-DOCSTART-,O
,O
Check,O
the,O
appropriate,O
box,O
:,O
,O
Payment,O
of,O
Filing,O
Fee,O
(,O
check,O
the,O
appropriate,O
box,O
),O
:,O
,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
Advantage,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
(,O
NAN,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
Advantage,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
2,I-BUSINESS
(,O
NXK,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Investment,I-BUSINESS
Quality,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Municipal,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Municipal,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
2,I-BUSINESS
(,O
NYV,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Performance,I-BUSINESS
Plus,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Quality,I-BUSINESS
Income,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Select,I-BUSINESS
Quality,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Nuveen,I-BUSINESS
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
Advantage,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
(,O
NKO,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Nuveen,I-BUSINESS
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Tax-Free,I-BUSINESS
Advantage,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
(,O
NRK,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Core,I-BUSINESS
Equity,I-BUSINESS
Alpha,I-BUSINESS
Fund,I-BUSINESS
(,O
JCE,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
JRS,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Diversified,I-BUSINESS
Dividend,I-BUSINESS
and,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
JDD,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Equity,I-BUSINESS
Premium,I-BUSINESS
and,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
(,O
JPG,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Equity,I-BUSINESS
Premium,I-BUSINESS
Advantage,I-BUSINESS
Fund,I-BUSINESS
(,O
JLA,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Equity,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
JPZ,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Equity,I-BUSINESS
Premium,I-BUSINESS
Opportunity,I-BUSINESS
Fund,I-BUSINESS
(,O
JSN,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Quality,I-BUSINESS
Preferred,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
JTP,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Quality,I-BUSINESS
Preferred,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
2,I-BUSINESS
(,O
JPS,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Quality,I-BUSINESS
Preferred,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
3,I-BUSINESS
(,O
JHP,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Tax-Advantaged,I-BUSINESS
Total,I-BUSINESS
Return,I-BUSINESS
Strategy,I-BUSINESS
Fund,I-BUSINESS
(,O
JTA,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Tax-Advantaged,I-BUSINESS
Dividend,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
(,O
JTD,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Global,I-BUSINESS
Government,I-BUSINESS
Enhanced,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
JGG,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Global,I-BUSINESS
Value,I-BUSINESS
Opportunities,I-BUSINESS
Fund,I-BUSINESS
(,O
JGV,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Multi-Currency,I-BUSINESS
Short-Term,I-BUSINESS
Government,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
JGT,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Multi-Strategy,I-BUSINESS
Income,I-BUSINESS
and,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
(,O
JPC,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Multi-Strategy,I-BUSINESS
Income,I-BUSINESS
and,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
2,I-BUSINESS
(,O
JQC,I-BUSINESS
),O
,O
To,O
the,O
Shareholders,O
of,O
the,O
Above,O
Funds,O
:,O
,O
Notice,O
is,O
hereby,O
given,O
that,O
the,O
Annual,O
Meeting,O
of,O
Shareholders,O
of,O
each,O
of,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
Advantage,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
(,O
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
Advantage,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
2,I-BUSINESS
(,O
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
2,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Municipal,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
2,I-BUSINESS
(,O
New,I-BUSINESS
York,I-BUSINESS
Value,I-BUSINESS
2,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
Advantage,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
(,O
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Tax-Free,I-BUSINESS
Advantage,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
(,O
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Tax-Free,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Core,I-BUSINESS
Equity,I-BUSINESS
Alpha,I-BUSINESS
Fund,I-BUSINESS
(,O
Core,I-BUSINESS
Equity,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
Real,I-BUSINESS
Estate,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Diversified,I-BUSINESS
Dividend,I-BUSINESS
and,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
Diversified,I-BUSINESS
Dividend,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Equity,I-BUSINESS
Premium,I-BUSINESS
and,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
(,O
Equity,I-BUSINESS
Premium,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Equity,I-BUSINESS
Premium,I-BUSINESS
Advantage,I-BUSINESS
Fund,I-BUSINESS
(,O
Equity,I-BUSINESS
Premium,I-BUSINESS
Advantage,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Equity,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
Equity,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Equity,I-BUSINESS
Premium,I-BUSINESS
Opportunity,I-BUSINESS
Fund,I-BUSINESS
(,O
Equity,I-BUSINESS
Premium,I-BUSINESS
Opportunity,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Quality,I-BUSINESS
Preferred,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
Quality,I-BUSINESS
Preferred,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Quality,I-BUSINESS
Preferred,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
2,I-BUSINESS
(,O
Quality,I-BUSINESS
Preferred,I-BUSINESS
2,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Quality,I-BUSINESS
Preferred,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
3,I-BUSINESS
(,O
Quality,I-BUSINESS
Preferred,I-BUSINESS
3,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Tax-Advantaged,I-BUSINESS
Total,I-BUSINESS
Return,I-BUSINESS
Strategy,I-BUSINESS
Fund,I-BUSINESS
(,O
Tax-Advantaged,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Tax-Advantaged,I-BUSINESS
Dividend,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
(,O
Tax-Advantaged,I-BUSINESS
Dividend,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Global,I-BUSINESS
Government,I-BUSINESS
Enhanced,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
Global,I-BUSINESS
Government,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Global,I-BUSINESS
Value,I-BUSINESS
Opportunities,I-BUSINESS
Fund,I-BUSINESS
(,O
Global,I-BUSINESS
Value,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Multi-Currency,I-BUSINESS
Short-Term,I-BUSINESS
Government,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
Multi-Currency,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Multi-Strategy,I-BUSINESS
Income,I-BUSINESS
and,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
(,O
Multi-Strategy,I-BUSINESS
),O
and,O
Nuveen,I-BUSINESS
Multi-Strategy,I-BUSINESS
Income,I-BUSINESS
and,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
2,I-BUSINESS
(,O
Multi-Strategy,I-BUSINESS
2,I-BUSINESS
),O
",",O
each,O
a,O
Massachusetts,I-LOCATION
Business,O
Trust,O
",",O
and,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Investment,I-BUSINESS
Quality,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
New,I-BUSINESS
York,I-BUSINESS
Investment,I-BUSINESS
Quality,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Municipal,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
New,I-BUSINESS
York,I-BUSINESS
Value,I-BUSINESS
),O
",",O
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New,I-BUSINESS
York,I-BUSINESS
Performance,I-BUSINESS
Plus,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
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York,I-BUSINESS
Performance,I-BUSINESS
Plus,I-BUSINESS
),O
",",O
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New,I-BUSINESS
York,I-BUSINESS
Quality,I-BUSINESS
Income,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
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York,I-BUSINESS
Quality,I-BUSINESS
),O
",",O
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New,I-BUSINESS
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Select,I-BUSINESS
Quality,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
New,I-BUSINESS
York,I-BUSINESS
Select,I-BUSINESS
),O
and,O
Nuveen,I-BUSINESS
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Premium,I-BUSINESS
),O
",",O
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a,O
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Corporation,O
(,O
individually,O
",",O
a,O
Fund,O
and,O
collectively,O
",",O
the,O
Funds,O
),O
",",O
will,O
be,O
held,O
in,O
the,O
31st,O
Floor,O
Conference,O
Room,O
of,O
Nuveen,I-BUSINESS
Investments,I-BUSINESS
",",O
333,O
West,I-LOCATION
Wacker,I-LOCATION
Drive,I-LOCATION
",",O
Chicago,I-LOCATION
",",O
Illinois,I-LOCATION
",",O
on,O
Tuesday,O
",",O
April,O
6,O
",",O
2010,O
",",O
at,O
10:00,O
a.m.,O
",",O
Central,I-MISCELLANEOUS
time,I-MISCELLANEOUS
(,O
for,O
each,O
Fund,O
",",O
an,O
Annual,O
Meeting,O
),O
",",O
for,O
the,O
following,O
purposes,O
and,O
to,O
transact,O
such,O
other,O
business,O
",",O
if,O
any,O
",",O
as,O
may,O
properly,O
come,O
before,O
the,O
Annual,O
Meeting,O
.,O
,O
Matters,O
to,O
Be,O
Voted,O
on,O
by,O
Shareholders,O
:,O
,O
Shareholders,O
of,O
record,O
at,O
the,O
close,O
of,O
business,O
on,O
February,O
8,O
",",O
2010,O
are,O
entitled,O
to,O
notice,O
of,O
and,O
to,O
vote,O
at,O
the,O
Annual,O
Meeting,O
.,O
,O
All,O
shareholders,O
are,O
cordially,O
invited,O
to,O
attend,O
the,O
Annual,O
Meeting,O
.,O
,O
In,O
order,O
to,O
avoid,O
delay,O
and,O
additional,O
expense,O
and,O
to,O
assure,O
that,O
your,O
shares,O
are,O
represented,O
",",O
please,O
vote,O
as,O
promptly,O
as,O
possible,O
",",O
regardless,O
of,O
whether,O
or,O
not,O
you,O
plan,O
to,O
attend,O
the,O
Annual,O
Meeting,O
.,O
,O
You,O
may,O
vote,O
by,O
mail,O
",",O
telephone,O
or,O
over,O
the,O
Internet,I-MISCELLANEOUS
.,O
,O
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",",O
please,O
mark,O
",",O
sign,O
",",O
date,O
and,O
mail,O
the,O
enclosed,O
proxy,O
card,O
.,O
,O
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is,O
required,O
if,O
mailed,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
To,O
vote,O
by,O
telephone,O
",",O
please,O
call,O
the,O
toll-free,O
number,O
located,O
on,O
your,O
proxy,O
card,O
and,O
follow,O
the,O
recorded,O
instructions,O
",",O
using,O
your,O
proxy,O
card,O
as,O
a,O
guide,O
.,O
,O
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vote,O
over,O
the,O
Internet,I-MISCELLANEOUS
",",O
go,O
to,O
the,O
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address,O
provided,O
on,O
your,O
proxy,O
card,O
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follow,O
the,O
instructions,O
",",O
using,O
your,O
proxy,O
card,O
as,O
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guide,O
.,O
,O
about,O
March,O
1,O
",",O
2010,O
.,O
,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
Advantage,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
(,O
NAN,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
Advantage,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
2,I-BUSINESS
(,O
NXK,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Investment,I-BUSINESS
Quality,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Municipal,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
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2,I-BUSINESS
(,O
NYV,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Performance,I-BUSINESS
Plus,I-BUSINESS
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",",I-BUSINESS
Inc.,I-BUSINESS
,O
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",",I-BUSINESS
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,O
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",",I-BUSINESS
Inc.,I-BUSINESS
,O
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(,O
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),O
,O
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",",I-BUSINESS
Inc.,I-BUSINESS
,O
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Advantage,I-BUSINESS
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Fund,I-BUSINESS
(,O
NRK,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Core,I-BUSINESS
Equity,I-BUSINESS
Alpha,I-BUSINESS
Fund,I-BUSINESS
(,O
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),O
,O
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Real,I-BUSINESS
Estate,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
JRS,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Diversified,I-BUSINESS
Dividend,I-BUSINESS
and,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
JDD,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Equity,I-BUSINESS
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and,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
(,O
JPG,I-BUSINESS
),O
,O
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Fund,I-BUSINESS
(,O
JLA,I-BUSINESS
),O
,O
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Equity,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
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),O
,O
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(,O
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),O
,O
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Quality,I-BUSINESS
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(,O
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),O
,O
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Quality,I-BUSINESS
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2,I-BUSINESS
(,O
JPS,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Quality,I-BUSINESS
Preferred,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
3,I-BUSINESS
(,O
JHP,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Tax-Advantaged,I-BUSINESS
Total,I-BUSINESS
Return,I-BUSINESS
Strategy,I-BUSINESS
Fund,I-BUSINESS
(,O
JTA,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Tax-Advantaged,I-BUSINESS
Dividend,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
(,O
JTD,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Global,I-BUSINESS
Government,I-BUSINESS
Enhanced,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
JGG,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Global,I-BUSINESS
Value,I-BUSINESS
Opportunities,I-BUSINESS
Fund,I-BUSINESS
(,O
JGV,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Multi-Currency,I-BUSINESS
Short-Term,I-BUSINESS
Government,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
JGT,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Multi-Strategy,I-BUSINESS
Income,I-BUSINESS
and,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
(,O
JPC,I-BUSINESS
),O
,O
Nuveen,I-BUSINESS
Multi-Strategy,I-BUSINESS
Income,I-BUSINESS
and,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
2,I-BUSINESS
(,O
JQC,I-BUSINESS
),O
,O
This,O
Joint,O
Proxy,O
Statement,O
is,O
furnished,O
in,O
connection,O
with,O
the,O
solicitation,O
by,O
the,O
Board,O
of,O
Directors,O
or,O
Trustees,O
(,O
each,O
a,O
Board,O
and,O
collectively,O
",",O
the,O
Boards,O
",",O
and,O
each,O
Director,O
or,O
Trustee,O
a,O
Board,O
Member,O
and,O
collectively,O
",",O
the,O
Board,O
Members,O
),O
of,O
each,O
of,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
Advantage,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
(,O
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
Advantage,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
2,I-BUSINESS
(,O
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
2,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Municipal,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
2,I-BUSINESS
(,O
New,I-BUSINESS
York,I-BUSINESS
Value,I-BUSINESS
2,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
Advantage,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
(,O
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Tax-Free,I-BUSINESS
Advantage,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
(,O
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Tax-Free,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Core,I-BUSINESS
Equity,I-BUSINESS
Alpha,I-BUSINESS
Fund,I-BUSINESS
(,O
Core,I-BUSINESS
Equity,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
Real,I-BUSINESS
Estate,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Diversified,I-BUSINESS
Dividend,I-BUSINESS
and,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
Diversified,I-BUSINESS
Dividend,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Equity,I-BUSINESS
Premium,I-BUSINESS
and,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
(,O
Equity,I-BUSINESS
Premium,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Equity,I-BUSINESS
Premium,I-BUSINESS
Advantage,I-BUSINESS
Fund,I-BUSINESS
(,O
Equity,I-BUSINESS
Premium,I-BUSINESS
Advantage,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Equity,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
Equity,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Equity,I-BUSINESS
Premium,I-BUSINESS
Opportunity,I-BUSINESS
Fund,I-BUSINESS
(,O
Equity,I-BUSINESS
Premium,I-BUSINESS
Opportunity,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Quality,I-BUSINESS
Preferred,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
Quality,I-BUSINESS
Preferred,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Quality,I-BUSINESS
Preferred,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
2,I-BUSINESS
(,O
Quality,I-BUSINESS
Preferred,I-BUSINESS
2,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Quality,I-BUSINESS
Preferred,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
3,I-BUSINESS
(,O
Quality,I-BUSINESS
Preferred,I-BUSINESS
3,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Tax-Advantaged,I-BUSINESS
Total,I-BUSINESS
Return,I-BUSINESS
Strategy,I-BUSINESS
Fund,I-BUSINESS
(,O
Tax-Advantaged,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Tax-Advantaged,I-BUSINESS
Dividend,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
(,O
Tax-Advantaged,I-BUSINESS
Dividend,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Global,I-BUSINESS
Government,I-BUSINESS
Enhanced,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
Global,I-BUSINESS
Government,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Global,I-BUSINESS
Value,I-BUSINESS
Opportunities,I-BUSINESS
Fund,I-BUSINESS
(,O
Global,I-BUSINESS
Value,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Multi-Currency,I-BUSINESS
Short-Term,I-BUSINESS
Government,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
(,O
Multi-Currency,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
Multi-Strategy,I-BUSINESS
Income,I-BUSINESS
and,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
(,O
Multi-Strategy,I-BUSINESS
),O
and,O
Nuveen,I-BUSINESS
Multi-Strategy,I-BUSINESS
Income,I-BUSINESS
and,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
2,I-BUSINESS
(,O
Multi-Strategy,I-BUSINESS
2,I-BUSINESS
),O
",",O
each,O
a,O
Massachusetts,I-LOCATION
Business,O
Trust,O
",",O
and,O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Investment,I-BUSINESS
Quality,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
New,I-BUSINESS
York,I-BUSINESS
Investment,I-BUSINESS
Quality,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Municipal,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
New,I-BUSINESS
York,I-BUSINESS
Value,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Performance,I-BUSINESS
Plus,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
New,I-BUSINESS
York,I-BUSINESS
Performance,I-BUSINESS
Plus,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Quality,I-BUSINESS
Income,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
New,I-BUSINESS
York,I-BUSINESS
Quality,I-BUSINESS
),O
",",O
Nuveen,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Select,I-BUSINESS
Quality,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
New,I-BUSINESS
York,I-BUSINESS
Select,I-BUSINESS
),O
and,O
Nuveen,I-BUSINESS
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
Municipal,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Premium,I-BUSINESS
),O
",",O
each,O
a,O
Minnesota,I-LOCATION
Corporation,O
(,O
individually,O
",",O
a,O
Fund,O
and,O
collectively,O
",",O
the,O
Funds,O
),O
",",O
of,O
proxies,O
to,O
be,O
voted,O
at,O
the,O
Annual,O
Meeting,O
of,O
Shareholders,O
to,O
be,O
held,O
in,O
the,O
31st,O
Floor,O
Conference,O
Room,O
of,O
Nuveen,I-BUSINESS
Investments,I-BUSINESS
",",O
333,O
West,I-LOCATION
Wacker,I-LOCATION
Drive,I-LOCATION
",",O
Chicago,I-LOCATION
",",O
Illinois,I-LOCATION
",",O
on,O
Tuesday,O
",",O
April,O
6,O
",",O
2010,O
",",O
at,O
10:00,O
a.m.,O
",",O
Central,I-MISCELLANEOUS
time,I-MISCELLANEOUS
(,O
for,O
each,O
Fund,O
",",O
an,O
Annual,O
Meeting,O
and,O
collectively,O
",",O
the,O
Annual,O
Meetings,O
),O
",",O
and,O
at,O
any,O
and,O
all,O
adjournments,O
thereof,O
.,O
,O
On,O
the,O
matters,O
coming,O
before,O
each,O
Annual,O
Meeting,O
as,O
to,O
which,O
a,O
choice,O
has,O
been,O
specified,O
by,O
shareholders,O
on,O
the,O
proxy,O
",",O
the,O
shares,O
will,O
be,O
voted,O
accordingly,O
.,O
,O
If,O
a,O
properly,O
executed,O
proxy,O
is,O
returned,O
and,O
no,O
choice,O
is,O
specified,O
",",O
the,O
shares,O
will,O
be,O
voted,O
FOR,O
the,O
election,O
of,O
the,O
nominees,O
as,O
listed,O
in,O
this,O
Joint,O
Proxy,O
Statement,O
.,O
,O
Shareholders,O
of,O
a,O
Fund,O
who,O
execute,O
proxies,O
may,O
revoke,O
them,O
at,O
any,O
time,O
before,O
they,O
are,O
voted,O
by,O
filing,O
with,O
that,O
Fund,O
a,O
written,O
notice,O
of,O
revocation,O
",",O
by,O
delivering,O
a,O
duly,O
executed,O
proxy,O
bearing,O
a,O
later,O
date,O
",",O
or,O
by,O
attending,O
the,O
Annual,O
Meeting,O
and,O
voting,O
in,O
person,O
.,O
,O
Merely,O
attending,O
the,O
Annual,O
Meeting,O
",",O
however,O
",",O
will,O
not,O
revoke,O
any,O
previously,O
submitted,O
proxy,O
.,O
,O
The,O
Board,O
of,O
each,O
Fund,O
has,O
determined,O
that,O
the,O
use,O
of,O
this,O
Joint,O
Proxy,O
Statement,O
for,O
each,O
Annual,O
Meeting,O
is,O
in,O
the,O
best,O
interest,O
of,O
each,O
Fund,O
and,O
its,O
shareholders,O
in,O
light,O
of,O
the,O
similar,O
matters,O
being,O
considered,O
and,O
voted,O
on,O
by,O
the,O
shareholders,O
.,O
,O
The,O
following,O
table,O
indicates,O
which,O
shareholders,O
are,O
solicited,O
with,O
respect,O
to,O
each,O
matter,O
:,O
,O
A,O
quorum,O
of,O
shareholders,O
is,O
required,O
to,O
take,O
action,O
at,O
each,O
Annual,O
Meeting,O
.,O
,O
A,O
majority,O
of,O
the,O
shares,O
entitled,O
to,O
vote,O
at,O
each,O
Annual,O
Meeting,O
",",O
represented,O
in,O
person,O
or,O
by,O
proxy,O
",",O
will,O
constitute,O
a,O
quorum,O
of,O
shareholders,O
at,O
that,O
Annual,O
Meeting,O
",",O
except,O
that,O
for,O
the,O
election,O
of,O
the,O
two,O
Board,O
Member,O
nominees,O
by,O
holders,O
of,O
Preferred,O
Shares,O
of,O
each,O
Fund,O
(,O
with,O
the,O
exception,O
of,O
New,I-BUSINESS
York,I-BUSINESS
Value,I-BUSINESS
2,I-BUSINESS
",",O
Core,I-BUSINESS
Equity,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Opportunity,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Advantage,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
",",O
Global,I-BUSINESS
Government,I-BUSINESS
",",O
Global,I-BUSINESS
Value,I-BUSINESS
",",O
Multi-Currency,I-BUSINESS
",",O
Tax-Advantaged,I-BUSINESS
Dividend,I-BUSINESS
",",O
Quality,I-BUSINESS
Preferred,I-BUSINESS
",",O
Quality,I-BUSINESS
Preferred,I-BUSINESS
2,I-BUSINESS
",",O
Quality,I-BUSINESS
Preferred,I-BUSINESS
3,I-BUSINESS
",",O
Real,I-BUSINESS
Estate,I-BUSINESS
",",O
Diversified,I-BUSINESS
Dividend,I-BUSINESS
",",O
Tax-Advantaged,I-BUSINESS
",",O
Multi-Strategy,I-BUSINESS
",",O
Multi-Strategy,I-BUSINESS
2,I-BUSINESS
and,O
New,I-BUSINESS
York,I-BUSINESS
Value,I-BUSINESS
),O
",",O
33/,O
%,O
of,O
the,O
Preferred,O
Shares,O
entitled,O
to,O
vote,O
and,O
represented,O
in,O
person,O
or,O
by,O
proxy,O
will,O
constitute,O
a,O
quorum,O
.,O
,O
Votes,O
cast,O
by,O
proxy,O
or,O
in,O
person,O
at,O
each,O
Annual,O
Meeting,O
will,O
be,O
tabulated,O
by,O
the,O
inspectors,O
of,O
election,O
appointed,O
for,O
that,O
Annual,O
Meeting,O
.,O
,O
The,O
inspectors,O
of,O
election,O
will,O
determine,O
whether,O
or,O
not,O
a,O
quorum,O
is,O
present,O
at,O
the,O
Annual,O
Meeting,O
.,O
,O
The,O
inspectors,O
of,O
election,O
will,O
treat,O
abstentions,O
and,O
broker,O
non-votes,O
(,O
i.e.,O
",",O
shares,O
held,O
by,O
brokers,O
or,O
nominees,O
",",O
typically,O
in,O
street,O
name,O
",",O
as,O
to,O
which,O
(,O
i,O
),O
instructions,O
have,O
not,O
been,O
received,O
from,O
the,O
beneficial,O
owners,O
or,O
persons,O
entitled,O
to,O
vote,O
and,O
(,O
ii,O
),O
the,O
broker,O
or,O
nominee,O
does,O
not,O
have,O
discretionary,O
voting,O
power,O
on,O
a,O
particular,O
matter,O
),O
as,O
present,O
for,O
purposes,O
of,O
determining,O
a,O
quorum,O
.,O
,O
For,O
each,O
Fund,O
",",O
the,O
affirmative,O
vote,O
of,O
a,O
plurality,O
of,O
the,O
shares,O
present,O
and,O
entitled,O
to,O
vote,O
at,O
the,O
Annual,O
Meeting,O
will,O
be,O
required,O
to,O
elect,O
the,O
Board,O
Members,O
of,O
that,O
Fund,O
.,O
,O
For,O
purposes,O
of,O
determining,O
the,O
approval,O
of,O
the,O
proposal,O
to,O
elect,O
nominees,O
for,O
each,O
Fund,O
",",O
abstentions,O
and,O
broker,O
non-votes,O
will,O
have,O
no,O
effect,O
on,O
the,O
election,O
of,O
Board,O
Members,O
.,O
,O
Preferred,O
Shares,O
held,O
in,O
street,O
name,O
as,O
to,O
which,O
voting,O
instructions,O
have,O
not,O
been,O
received,O
from,O
the,O
beneficial,O
owners,O
or,O
persons,O
entitled,O
to,O
vote,O
as,O
of,O
one,O
business,O
day,O
before,O
the,O
Annual,O
Meeting,O
",",O
or,O
",",O
if,O
adjourned,O
",",O
one,O
business,O
day,O
before,O
the,O
day,O
to,O
which,O
the,O
Annual,O
Meeting,O
is,O
adjourned,O
",",O
and,O
that,O
would,O
otherwise,O
be,O
treated,O
as,O
broker,O
non-votes,O
may,O
",",O
pursuant,O
to,O
Rule,O
452,O
of,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
",",O
be,O
voted,O
by,O
the,O
broker,O
on,O
the,O
proposal,O
in,O
the,O
same,O
proportion,O
as,O
the,O
votes,O
cast,O
by,O
all,O
holders,O
of,O
Preferred,O
Shares,O
as,O
a,O
class,O
who,O
have,O
voted,O
on,O
the,O
proposal,O
or,O
in,O
the,O
same,O
proportion,O
as,O
the,O
votes,O
cast,O
by,O
all,O
holders,O
of,O
Preferred,O
Shares,O
of,O
the,O
Fund,O
who,O
have,O
voted,O
on,O
that,O
item,O
.,O
,O
Rule,O
452,O
permits,O
proportionate,O
voting,O
of,O
Preferred,O
Shares,O
with,O
respect,O
to,O
a,O
particular,O
item,O
if,O
",",O
among,O
other,O
things,O
",",O
(,O
i,O
),O
a,O
minimum,O
of,O
30,O
%,O
of,O
the,O
Preferred,O
Shares,O
or,O
shares,O
of,O
a,O
series,O
of,O
Preferred,O
Shares,O
outstanding,O
has,O
been,O
voted,O
by,O
the,O
holders,O
of,O
such,O
shares,O
with,O
respect,O
to,O
such,O
item,O
and,O
(,O
ii,O
),O
less,O
than,O
10,O
%,O
of,O
the,O
Preferred,O
Shares,O
or,O
shares,O
of,O
a,O
series,O
of,O
Preferred,O
Shares,O
outstanding,O
has,O
been,O
voted,O
by,O
the,O
holders,O
of,O
such,O
shares,O
against,O
such,O
item,O
.,O
,O
For,O
the,O
purpose,O
of,O
meeting,O
the,O
30,O
%,O
test,O
",",O
abstentions,O
will,O
be,O
treated,O
as,O
shares,O
voted,O
and,O
",",O
for,O
the,O
purpose,O
of,O
meeting,O
the,O
10,O
%,O
test,O
",",O
abstentions,O
will,O
not,O
be,O
treated,O
as,O
shares,O
voted,O
against,O
the,O
item,O
.,O
,O
Those,O
persons,O
who,O
were,O
shareholders,O
of,O
record,O
at,O
the,O
close,O
of,O
business,O
on,O
Monday,O
",",O
February,O
8,O
",",O
2010,O
will,O
be,O
entitled,O
to,O
one,O
vote,O
for,O
each,O
share,O
held,O
and,O
a,O
proportionate,O
fractional,O
vote,O
for,O
each,O
fractional,O
vote,O
held,O
.,O
,O
As,O
of,O
February,O
8,O
",",O
2010,O
",",O
the,O
shares,O
of,O
the,O
Funds,O
were,O
issued,O
and,O
outstanding,O
as,O
follows,O
:,O
,O
Pursuant,O
to,O
the,O
organizational,O
documents,O
of,O
each,O
Massachusetts,I-LOCATION
Business,O
Trust,O
",",O
each,O
Board,O
is,O
divided,O
into,O
three,O
classes,O
",",O
Class,O
I,O
",",O
Class,O
II,O
and,O
Class,O
III,O
",",O
to,O
be,O
elected,O
by,O
the,O
holders,O
of,O
the,O
outstanding,O
Common,O
Shares,O
and,O
any,O
outstanding,O
Preferred,O
Shares,O
",",O
voting,O
together,O
as,O
a,O
single,O
class,O
to,O
serve,O
until,O
the,O
third,O
succeeding,O
annual,O
meeting,O
subsequent,O
to,O
their,O
election,O
or,O
thereafter,O
",",O
in,O
each,O
case,O
until,O
their,O
successors,O
have,O
been,O
duly,O
elected,O
and,O
qualified,O
.,O
,O
For,O
each,O
Massachusetts,I-LOCATION
Business,O
Trust,O
",",O
except,O
New,I-BUSINESS
York,I-BUSINESS
Value,I-BUSINESS
2,I-BUSINESS
",",O
Core,I-BUSINESS
Equity,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Advantage,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Opportunity,I-BUSINESS
",",O
Tax-Advantaged,I-BUSINESS
Dividend,I-BUSINESS
",",O
Global,I-BUSINESS
Government,I-BUSINESS
",",O
Global,I-BUSINESS
Value,I-BUSINESS
",",O
Multi-Currency,I-BUSINESS
",",O
Quality,I-BUSINESS
Preferred,I-BUSINESS
",",O
Quality,I-BUSINESS
Preferred,I-BUSINESS
2,I-BUSINESS
",",O
Quality,I-BUSINESS
Preferred,I-BUSINESS
3,I-BUSINESS
",",O
Real,I-BUSINESS
Estate,I-BUSINESS
",",O
Diversified,I-BUSINESS
Dividend,I-BUSINESS
",",O
Tax-Advantaged,I-BUSINESS
",",O
Multi-Strategy,I-BUSINESS
and,O
Multi-Strategy,I-BUSINESS
2,I-BUSINESS
",",O
under,O
normal,O
circumstances,O
",",O
holders,O
of,O
Preferred,O
Shares,O
are,O
entitled,O
to,O
elect,O
two,O
(,O
2,O
),O
Board,O
Members,O
.,O
,O
The,O
Board,O
Members,O
elected,O
by,O
holders,O
of,O
Preferred,O
Shares,O
will,O
be,O
elected,O
to,O
serve,O
until,O
the,O
next,O
annual,O
meeting,O
or,O
until,O
their,O
successors,O
have,O
been,O
duly,O
elected,O
and,O
qualified,O
.,O
,O
At,O
the,O
Annual,O
Meeting,O
of,O
each,O
Minnesota,I-LOCATION
Corporation,O
",",O
Board,O
Members,O
are,O
to,O
be,O
elected,O
to,O
serve,O
until,O
the,O
next,O
annual,O
meeting,O
or,O
until,O
their,O
successors,O
shall,O
have,O
been,O
duly,O
elected,O
and,O
qualified,O
.,O
,O
Under,O
the,O
terms,O
of,O
each,O
Minnesota,I-LOCATION
Corporation,O
s,O
organizational,O
documents,O
(,O
except,O
New,I-BUSINESS
York,I-BUSINESS
Value,I-BUSINESS
),O
",",O
under,O
normal,O
circumstances,O
",",O
holders,O
of,O
Preferred,O
Shares,O
are,O
entitled,O
to,O
elect,O
two,O
(,O
2,O
),O
Board,O
Members,O
",",O
and,O
the,O
remaining,O
Board,O
Members,O
are,O
to,O
be,O
elected,O
by,O
holders,O
of,O
Common,O
Shares,O
and,O
Preferred,O
Shares,O
",",O
voting,O
together,O
as,O
a,O
single,O
class,O
.,O
,O
Pursuant,O
to,O
the,O
organizational,O
documents,O
of,O
New,I-BUSINESS
York,I-BUSINESS
Value,I-BUSINESS
",",O
the,O
Board,O
is,O
divided,O
into,O
three,O
classes,O
",",O
with,O
each,O
class,O
being,O
elected,O
to,O
serve,O
until,O
the,O
third,O
succeeding,O
annual,O
meeting,O
subsequent,O
to,O
their,O
election,O
or,O
thereafter,O
in,O
each,O
case,O
when,O
their,O
respective,O
successors,O
are,O
duly,O
elected,O
and,O
qualified,O
.,O
,O
For,O
New,I-BUSINESS
York,I-BUSINESS
Value,I-BUSINESS
",",O
three,O
(,O
3,O
),O
Board,O
Members,O
are,O
nominated,O
to,O
be,O
elected,O
at,O
this,O
meeting,O
.,O
,O
It,O
is,O
the,O
intention,O
of,O
the,O
persons,O
named,O
in,O
the,O
enclosed,O
proxy,O
to,O
vote,O
the,O
shares,O
represented,O
thereby,O
for,O
the,O
election,O
of,O
the,O
nominees,O
listed,O
in,O
the,O
table,O
below,O
unless,O
the,O
proxy,O
is,O
marked,O
otherwise,O
.,O
,O
Each,O
of,O
the,O
nominees,O
has,O
agreed,O
to,O
serve,O
as,O
a,O
Board,O
Member,O
of,O
each,O
Fund,O
if,O
elected,O
.,O
,O
However,O
",",O
should,O
any,O
nominee,O
become,O
unable,O
or,O
unwilling,O
to,O
accept,O
nomination,O
for,O
election,O
",",O
the,O
proxies,O
will,O
be,O
voted,O
for,O
substitute,O
nominees,O
",",O
if,O
any,O
",",O
designated,O
by,O
that,O
Fund,O
s,O
present,O
Board,O
.,O
,O
For,O
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
",",O
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
2,I-BUSINESS
",",O
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
and,O
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Tax-Free,I-BUSINESS
",",O
Board,O
Members,O
Bremner,I-PERSON
and,O
Evans,I-PERSON
were,O
last,O
elected,O
to,O
each,O
Fund,O
s,O
Board,O
as,O
Class,O
III,O
Board,O
Members,O
at,O
the,O
annual,O
meeting,O
of,O
shareholders,O
held,O
on,O
May,O
6,O
",",O
2009,O
and,O
adjourned,O
to,O
June,O
17,O
",",O
2009,O
.,O
,O
For,O
Real,I-BUSINESS
Estate,I-BUSINESS
",",O
Diversified,I-BUSINESS
Dividend,I-BUSINESS
",",O
Quality,I-BUSINESS
Preferred,I-BUSINESS
",",O
Quality,I-BUSINESS
Preferred,I-BUSINESS
2,I-BUSINESS
",",O
Quality,I-BUSINESS
Preferred,I-BUSINESS
3,I-BUSINESS
",",O
Tax-advantaged,I-BUSINESS
",",O
Multi-Strategy,I-BUSINESS
and,O
Multi-Strategy,I-BUSINESS
2,I-BUSINESS
",",O
Board,O
Members,O
Bremner,I-PERSON
and,O
Evans,I-PERSON
were,O
last,O
elected,O
to,O
each,O
Fund,O
s,O
Board,O
as,O
Class,O
III,O
Board,O
Members,O
at,O
the,O
annual,O
meeting,O
of,O
shareholders,O
held,O
on,O
May,O
6,O
",",O
2009,O
.,O
,O
For,O
each,O
other,O
Massachusetts,I-LOCATION
Business,O
Trust,O
except,O
New,I-BUSINESS
York,I-BUSINESS
Value,I-BUSINESS
2,I-BUSINESS
",",O
Core,I-BUSINESS
Equity,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Advantage,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Opportunity,I-BUSINESS
",",O
Global,I-BUSINESS
Government,I-BUSINESS
",",O
Global,I-BUSINESS
Value,I-BUSINESS
",",O
Tax-Advantaged,I-BUSINESS
Dividend,I-BUSINESS
and,O
Multi-Currency,I-BUSINESS
",",O
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
",",O
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
2,I-BUSINESS
",",O
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
and,O
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Tax-Free,I-BUSINESS
",",O
Board,O
Members,O
Amboian,I-PERSON
",",O
Kundert,I-PERSON
and,O
Toth,I-PERSON
were,O
last,O
elected,O
to,O
each,O
Fund,O
s,O
Board,O
as,O
Class,O
II,O
Board,O
Members,O
at,O
the,O
annual,O
meeting,O
of,O
shareholders,O
held,O
on,O
June,O
30,O
",",O
2008,O
.,O
,O
For,O
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
",",O
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
2,I-BUSINESS
",",O
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Dividend,I-BUSINESS
and,O
Insured,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Tax-Free,I-BUSINESS
",",O
Board,O
Members,O
Amboian,I-PERSON
",",O
Kundert,I-PERSON
and,O
Toth,I-PERSON
were,O
last,O
elected,O
to,O
each,O
Fund,O
s,O
Board,O
as,O
Class,O
II,O
Board,O
Members,O
at,O
the,O
annual,O
meeting,O
of,O
shareholders,O
held,O
on,O
June,O
30,O
",",O
2008,O
and,O
adjourned,O
to,O
July,O
29,O
",",O
2008,O
.,O
,O
For,O
New,I-BUSINESS
York,I-BUSINESS
Value,I-BUSINESS
2,I-BUSINESS
",",O
all,O
of,O
the,O
Board,O
Members,O
were,O
elected,O
by,O
the,O
initial,O
shareholder,O
of,O
the,O
Fund,O
on,O
April,O
24,O
",",O
2009,O
.,O
,O
For,O
Core,I-BUSINESS
Equity,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Advantage,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Opportunity,I-BUSINESS
",",O
Global,I-BUSINESS
Government,I-BUSINESS
",",O
Global,I-BUSINESS
Value,I-BUSINESS
",",O
Tax-Advantaged,I-BUSINESS
Dividend,I-BUSINESS
and,O
Multi-Currency,I-BUSINESS
",",O
Board,O
Members,O
Bremner,I-PERSON
",",O
Evans,I-PERSON
and,O
Schneider,I-PERSON
were,O
last,O
elected,O
to,O
each,O
Fund,O
s,O
Board,O
as,O
Class,O
III,O
Board,O
Members,O
at,O
the,O
annual,O
meeting,O
of,O
shareholders,O
held,O
on,O
May,O
6,O
",",O
2009,O
.,O
,O
Board,O
Members,O
Amboian,I-PERSON
",",O
Kundert,I-PERSON
and,O
Toth,I-PERSON
were,O
last,O
elected,O
to,O
each,O
Fund,O
s,O
Board,O
as,O
Class,O
II,O
Board,O
Members,O
and,O
Board,O
Member,O
Hunter,I-PERSON
was,O
last,O
elected,O
to,O
each,O
Fund,O
s,O
Board,O
as,O
a,O
Class,O
I,O
Board,O
Member,O
at,O
the,O
annual,O
meeting,O
of,O
shareholders,O
held,O
on,O
June,O
30,O
",",O
2008,O
.,O
,O
For,O
each,O
Minnesota,I-LOCATION
Corporation,O
",",O
except,O
for,O
New,I-BUSINESS
York,I-BUSINESS
Value,I-BUSINESS
",",O
all,O
Board,O
Member,O
nominees,O
were,O
last,O
elected,O
to,O
each,O
Fund,O
s,O
Board,O
at,O
the,O
annual,O
meeting,O
of,O
shareholders,O
held,O
on,O
May,O
6,O
",",O
2009,O
and,O
adjourned,O
to,O
June,O
17,O
",",O
2009,O
.,O
,O
For,O
New,I-BUSINESS
York,I-BUSINESS
Value,I-BUSINESS
",",O
Board,O
Members,O
Bremner,I-PERSON
",",O
Evans,I-PERSON
and,O
Schneider,I-PERSON
were,O
last,O
elected,O
as,O
Class,O
III,O
Board,O
Members,O
at,O
the,O
annual,O
meeting,O
of,O
shareholders,O
held,O
on,O
May,O
6,O
",",O
2009,O
and,O
adjourned,O
to,O
June,O
17,O
",",O
2009,O
.,O
,O
Board,O
Members,O
Amboian,I-PERSON
",",O
Kundert,I-PERSON
and,O
Toth,I-PERSON
were,O
last,O
elected,O
as,O
Class,O
II,O
Board,O
Members,O
at,O
the,O
annual,O
meeting,O
of,O
shareholders,O
held,O
on,O
June,O
30,O
",",O
2008,O
.,O
,O
Board,O
Member,O
Hunter,O
was,O
last,O
elected,O
as,O
a,O
Class,O
I,O
Board,O
Member,O
of,O
the,O
Board,O
of,O
New,I-BUSINESS
York,I-BUSINESS
Value,I-BUSINESS
at,O
the,O
annual,O
meeting,O
of,O
shareholders,O
held,O
on,O
June,O
30,O
",",O
2008,O
.,O
,O
Other,O
than,O
Mr.,O
Amboian,I-PERSON
",",O
all,O
Board,O
Member,O
nominees,O
are,O
not,O
interested,O
persons,O
",",O
as,O
defined,O
in,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
1940,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
of,O
the,O
Funds,O
or,O
the,O
Adviser,O
and,O
have,O
never,O
been,O
an,O
employee,O
or,O
director,O
of,O
Nuveen,I-BUSINESS
Investments,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
Nuveen,I-BUSINESS
),O
",",O
the,O
Adviser,O
s,O
parent,O
company,O
",",O
or,O
any,O
affiliate,O
.,O
,O
Accordingly,O
",",O
such,O
Board,O
Members,O
are,O
deemed,O
Independent,O
Board,O
Members,O
.,O
,O
The,O
Board,O
unanimously,O
recommends,O
that,O
shareholders,O
vote,O
FOR,O
the,O
election,O
of,O
the,O
nominees,O
.,O
,O
The,O
dollar,O
range,O
of,O
equity,O
securities,O
beneficially,O
owned,O
by,O
each,O
Board,O
Member,O
in,O
each,O
Fund,O
and,O
all,O
Nuveen,I-BUSINESS
funds,O
overseen,O
by,O
the,O
Board,O
Member,O
as,O
of,O
December,O
31,O
",",O
2009,O
is,O
set,O
forth,O
in,O
Appendix,O
A,O
.,O

The,O
number,O
of,O
shares,O
of,O
each,O
Fund,O
beneficially,O
owned,O
by,O
each,O
Board,O
Member,O
and,O
by,O
the,O
Board,O
Members,O
and,O
officers,O
of,O
the,O
Funds,O
as,O
a,O
group,O
as,O
of,O
December,O
31,O
",",O
2009,O
is,O
set,O
forth,O
in,O
Appendix,O
A,O
.,O

On,O
December,O
31,O
",",O
2009,O
",",O
Board,O
Members,O
and,O
executive,O
officers,O
as,O
a,O
group,O
beneficially,O
owned,O
approximately,O
"640,000",O
shares,O
of,O
all,O
funds,O
managed,O
by,O
Nuveen,I-BUSINESS
Asset,I-BUSINESS
Management,I-BUSINESS
.,O
,O
(,O
NAM,I-BUSINESS
),O
(,O
including,O
shares,O
held,O
by,O
the,O
Board,O
Members,O
through,O
the,O
Deferred,O
Compensation,O
Plan,O
for,O
Independent,O
Board,O
Members,O
and,O
by,O
executive,O
officers,O
in,O
Nuveen,I-BUSINESS
s,O
401,O
(,O
k,O
),O
/profit,O
sharing,O
plan,O
),O
.,O
,O
As,O
of,O
February,O
8,O
",",O
2010,O
",",O
each,O
Board,O
Member,O
s,O
individual,O
beneficial,O
shareholdings,O
of,O
each,O
Fund,O
constituted,O
less,O
than,O
1,O
%,O
of,O
the,O
outstanding,O
shares,O
of,O
each,O
Fund,O
.,O
,O
As,O
of,O
February,O
8,O
",",O
2010,O
",",O
the,O
Board,O
Members,O
and,O
executive,O
officers,O
as,O
a,O
group,O
beneficially,O
owned,O
less,O
than,O
1,O
%,O
of,O
the,O
outstanding,O
shares,O
of,O
each,O
Fund,O
.,O
,O
As,O
of,O
February,O
8,O
",",O
2010,O
",",O
no,O
shareholder,O
beneficially,O
owned,O
more,O
than,O
5,O
%,O
of,O
any,O
class,O
of,O
shares,O
of,O
any,O
Fund,O
",",O
except,O
as,O
provided,O
in,O
Appendix,O
B,O
.,O
,O
Each,O
Independent,O
Board,O
Member,O
receives,O
a,O
$,O
"100,000",O
annual,O
retainer,O
plus,O
(,O
a,O
),O
a,O
fee,O
of,O
$,O
"3,250",O
per,O
day,O
for,O
attendance,O
in,O
person,O
or,O
by,O
telephone,O
at,O
a,O
regularly,O
scheduled,O
meeting,O
of,O
the,O
Board,O
;,O
,O
(,O
b,O
),O
a,O
fee,O
of,O
$,O
"2,500",O
per,O
meeting,O
for,O
attendance,O
in,O
person,O
where,O
such,O
in-person,O
attendance,O
is,O
required,O
and,O
$,O
"1,500",O
per,O
meeting,O
for,O
attendance,O
by,O
telephone,O
or,O
in,O
person,O
where,O
in-person,O
attendance,O
is,O
not,O
required,O
at,O
a,O
special,O
",",O
non-regularly,O
scheduled,O
board,O
meeting,O
;,O
(,O
c,O
),O
a,O
fee,O
of,O
$,O
"2,000",O
per,O
meeting,O
for,O
attendance,O
in,O
person,O
or,O
$,O
"1,500",O
per,O
meeting,O
for,O
attendance,O
by,O
telephone,O
at,O
an,O
audit,O
committee,O
meeting,O
;,O
(,O
d,O
),O
a,O
fee,O
of,O
$,O
"2,000",O
per,O
meeting,O
for,O
attendance,O
at,O
a,O
regularly,O
scheduled,O
compliance,O
",",O
risk,O
management,O
and,O
regulatory,O
oversight,O
committee,O
meeting,O
for,O
regular,O
quarterly,O
meetings,O
and,O
$,O
"1,000",O
per,O
meeting,O
for,O
attendance,O
of,O
other,O
",",O
non-quarterly,O
meetings,O
;,O
(,O
e,O
),O
a,O
fee,O
of,O
$,O
"1,000",O
per,O
meeting,O
for,O
attendance,O
in,O
person,O
or,O
by,O
telephone,O
for,O
a,O
meeting,O
of,O
the,O
dividend,O
committee,O
;,O
and,O
(,O
f,O
),O
a,O
fee,O
of,O
$,O
500,O
per,O
meeting,O
for,O
attendance,O
in,O
person,O
at,O
all,O
other,O
committee,O
meetings,O
",",O
$,O
"1,000",O
for,O
attendance,O
at,O
shareholder,O
meetings,O
",",O
on,O
a,O
day,O
on,O
which,O
no,O
regularly,O
scheduled,O
board,O
meeting,O
is,O
held,O
in,O
which,O
in-person,O
attendance,O
is,O
required,O
",",O
$,O
250,O
per,O
meeting,O
for,O
attendance,O
by,O
telephone,O
at,O
all,O
other,O
committee,O
meetings,O
(,O
excluding,O
shareholder,O
meetings,O
),O
where,O
in-person,O
attendance,O
is,O
not,O
required,O
and,O
$,O
100,O
per,O
meeting,O
when,O
the,O
executive,O
committee,O
acts,O
as,O
pricing,O
committee,O
for,O
IPOs,O
",",O
plus,O
",",O
in,O
each,O
case,O
",",O
expenses,O
incurred,O
in,O
attending,O
such,O
meetings,O
.,O
,O
In,O
addition,O
to,O
the,O
payments,O
described,O
above,O
",",O
the,O
Independent,O
Chairman,O
receives,O
$,O
"50,000",O
annually,O
and,O
the,O
Lead,O
Independent,O
Director,O
",",O
if,O
any,O
",",O
receives,O
$,O
"35,000",O
",",O
the,O
chairpersons,O
of,O
the,O
audit,O
committee,O
",",O
the,O
dividend,O
committee,O
and,O
the,O
compliance,O
",",O
risk,O
management,O
and,O
regulatory,O
oversight,O
committee,O
receive,O
$,O
"7,500",O
and,O
the,O
chairperson,O
of,O
the,O
nominating,O
and,O
governance,O
committee,O
receives,O
$,O
"5,000",O
as,O
additional,O
retainers,O
to,O
the,O
annual,O
retainer,O
paid,O
to,O
such,O
individuals,O
.,O
,O
Independent,O
Board,O
Members,O
also,O
receive,O
a,O
fee,O
of,O
$,O
"2,500",O
per,O
day,O
for,O
site,O
visits,O
to,O
entities,O
that,O
provide,O
services,O
to,O
the,O
Nuveen,I-BUSINESS
funds,O
on,O
days,O
on,O
which,O
no,O
regularly,O
scheduled,O
board,O
meeting,O
is,O
held,O
.,O
,O
When,O
ad,O
hoc,O
committees,O
are,O
organized,O
",",O
the,O
nominating,O
and,O
governance,O
committee,O
will,O
at,O
the,O
time,O
of,O
formation,O
determine,O
compensation,O
to,O
be,O
paid,O
to,O
the,O
members,O
of,O
such,O
committees,O
",",O
however,O
",",O
in,O
general,O
such,O
fees,O
will,O
be,O
$,O
"1,000",O
per,O
meeting,O
for,O
attendance,O
in,O
person,O
at,O
any,O
ad,O
hoc,O
committee,O
meeting,O
where,O
in-person,O
attendance,O
is,O
required,O
and,O
$,O
500,O
per,O
meeting,O
for,O
attendance,O
by,O
telephone,O
or,O
in,O
person,O
at,O
such,O
meetings,O
where,O
in-person,O
attendance,O
is,O
not,O
required,O
.,O
,O
The,O
annual,O
retainer,O
",",O
fees,O
and,O
expenses,O
are,O
allocated,O
among,O
the,O
funds,O
managed,O
by,O
the,O
Adviser,O
",",O
on,O
the,O
basis,O
of,O
relative,O
net,O
asset,O
sizes,O
although,O
fund,O
management,O
may,O
",",O
in,O
its,O
discretion,O
",",O
establish,O
a,O
minimum,O
amount,O
to,O
be,O
allocated,O
to,O
each,O
fund,O
.,O
,O
The,O
Board,O
Member,O
affiliated,O
with,O
Nuveen,I-BUSINESS
and,O
the,O
Adviser,O
serves,O
without,O
any,O
compensation,O
from,O
the,O
Funds,O
.,O
,O
The,O
boards,O
of,O
certain,O
Nuveen,I-BUSINESS
funds,O
(,O
the,O
Participating,O
Funds,O
),O
established,O
a,O
Deferred,O
Compensation,O
Plan,O
for,O
Independent,O
Board,O
Members,O
(,O
Deferred,O
Compensation,O
Plan,O
),O
.,O
,O
Under,O
the,O
Deferred,O
Compensation,O
Plan,O
",",O
Independent,O
Board,O
Members,O
of,O
the,O
Participating,O
Funds,O
may,O
defer,O
receipt,O
of,O
all,O
",",O
or,O
a,O
portion,O
",",O
of,O
the,O
compensation,O
they,O
earn,O
for,O
their,O
services,O
to,O
the,O
Participating,O
Funds,O
",",O
in,O
lieu,O
of,O
receiving,O
current,O
payments,O
of,O
such,O
compensation,O
.,O
,O
Any,O
deferred,O
amount,O
is,O
treated,O
as,O
though,O
an,O
equivalent,O
dollar,O
amount,O
had,O
been,O
invested,O
in,O
shares,O
of,O
one,O
or,O
more,O
eligible,O
Nuveen,I-BUSINESS
funds,O
.,O
,O
The,O
table,O
below,O
shows,O
",",O
for,O
each,O
Independent,O
Board,O
Member,O
",",O
the,O
aggregate,O
compensation,O
paid,O
by,O
each,O
Fund,O
to,O
each,O
Board,O
Member,O
nominee,O
for,O
its,O
last,O
fiscal,O
year,O
.,O
,O
The,O
Board,O
of,O
each,O
Fund,O
has,O
five,O
standing,O
committees,O
:,O
the,O
executive,O
committee,O
",",O
the,O
audit,O
committee,O
",",O
the,O
nominating,O
and,O
governance,O
committee,O
",",O
the,O
dividend,O
committee,O
and,O
the,O
compliance,O
",",O
risk,O
management,O
and,O
regulatory,O
oversight,O
committee,O
.,O
,O
John,I-LOCATION
P.,I-LOCATION
Amboian,I-LOCATION
",",O
Robert,I-LOCATION
P.,I-LOCATION
Bremner,I-LOCATION
",",O
Chair,O
",",O
and,O
Judith,I-LOCATION
M.,I-LOCATION
Stockdale,I-LOCATION
serve,O
as,O
current,O
members,O
of,O
the,O
executive,O
committee,O
of,O
each,O
Fund,O
.,O
,O
The,O
executive,O
committee,O
",",O
which,O
meets,O
between,O
regular,O
meetings,O
of,O
the,O
Board,O
",",O
is,O
authorized,O
to,O
exercise,O
all,O
of,O
the,O
powers,O
of,O
the,O
Board,O
;,O
provided,O
that,O
the,O
scope,O
of,O
the,O
powers,O
of,O
the,O
executive,O
committee,O
",",O
unless,O
otherwise,O
specifically,O
authorized,O
by,O
the,O
full,O
Board,O
",",O
is,O
limited,O
to,O
:,O
(,O
i,O
),O
emergency,O
matters,O
where,O
assembly,O
of,O
the,O
full,O
Board,O
is,O
impracticable,O
(,O
in,O
which,O
case,O
management,O
will,O
take,O
all,O
reasonable,O
steps,O
to,O
quickly,O
notify,O
each,O
individual,O
Board,O
Member,O
of,O
the,O
actions,O
taken,O
by,O
the,O
executive,O
committee,O
),O
and,O
(,O
ii,O
),O
matters,O
of,O
an,O
administrative,O
or,O
ministerial,O
nature,O
.,O
,O
The,O
number,O
of,O
executive,O
committee,O
meetings,O
of,O
each,O
Fund,O
held,O
during,O
its,O
last,O
fiscal,O
year,O
is,O
shown,O
in,O
Appendix,O
C,O
.,O
,O
Jack,I-PERSON
B.,I-PERSON
Evans,I-PERSON
",",O
Chair,O
",",O
Judith,I-PERSON
M.,I-PERSON
Stockdale,I-PERSON
and,O
Terence,I-PERSON
J.,I-PERSON
Toth,I-PERSON
are,O
current,O
members,O
of,O
the,O
dividend,O
committee,O
of,O
each,O
Fund,O
.,O
,O
The,O
dividend,O
committee,O
is,O
authorized,O
to,O
declare,O
distributions,O
on,O
the,O
Fund,O
s,O
shares,O
including,O
",",O
but,O
not,O
limited,O
to,O
",",O
regular,O
and,O
special,O
dividends,O
",",O
capital,O
gains,O
and,O
ordinary,O
income,O
distributions,O
.,O
,O
The,O
number,O
of,O
dividend,O
committee,O
meetings,O
of,O
each,O
Fund,O
held,O
during,O
its,O
last,O
fiscal,O
year,O
is,O
shown,O
in,O
Appendix,O
C,O
.,O
,O
William,I-PERSON
C.,I-PERSON
Hunter,I-PERSON
",",O
William,I-PERSON
J.,I-PERSON
Schneider,I-PERSON
",",O
Chair,O
",",O
Judith,I-PERSON
M.,I-PERSON
Stockdale,I-PERSON
and,O
Carole,I-PERSON
E.,I-PERSON
Stone,I-PERSON
are,O
current,O
members,O
of,O
the,O
compliance,O
",",O
risk,O
management,O
and,O
regulatory,O
oversight,O
committee,O
of,O
each,O
Fund,O
.,O
,O
The,O
compliance,O
",",O
risk,O
management,O
and,O
regulatory,O
oversight,O
committee,O
is,O
responsible,O
for,O
the,O
oversight,O
of,O
compliance,O
issues,O
",",O
risk,O
management,O
",",O
and,O
other,O
regulatory,O
matters,O
affecting,O
the,O
Funds,O
which,O
are,O
not,O
otherwise,O
the,O
jurisdiction,O
of,O
the,O
other,O
Board,O
committees,O
.,O
,O
The,O
number,O
of,O
compliance,O
",",O
risk,O
management,O
and,O
regulatory,O
oversight,O
committee,O
meetings,O
of,O
each,O
Fund,O
held,O
during,O
its,O
last,O
fiscal,O
year,O
is,O
shown,O
in,O
Appendix,O
C,O
.,O
,O
Each,O
Fund,O
s,O
Board,O
has,O
an,O
audit,O
committee,O
",",O
in,O
accordance,O
with,O
Section,O
3,O
(,O
a,O
),O
(,O
58,O
),O
(,O
A,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
1934,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
that,O
is,O
composed,O
of,O
Independent,O
Board,O
Members,O
who,O
are,O
also,O
independent,O
as,O
that,O
term,O
is,O
defined,O
in,O
the,O
listing,O
standards,O
pertaining,O
to,O
closed-end,O
funds,O
of,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
or,O
the,O
NYSE,I-BUSINESS
Amex,I-BUSINESS
",",O
as,O
applicable,O
.,O
,O
Robert,I-PERSON
P.,I-PERSON
Bremner,I-PERSON
",",O
Jack,I-PERSON
B.,I-PERSON
Evans,I-PERSON
",",O
David,I-PERSON
J.,I-PERSON
Kundert,I-PERSON
",",O
Chair,O
",",O
William,I-PERSON
J.,I-PERSON
Schneider,I-PERSON
and,O
Terence,I-PERSON
J.,I-PERSON
Toth,I-PERSON
are,O
current,O
members,O
of,O
the,O
audit,O
committee,O
of,O
each,O
Fund,O
.,O
,O
The,O
audit,O
committee,O
is,O
responsible,O
for,O
the,O
oversight,O
and,O
monitoring,O
of,O
(,O
1,O
),O
the,O
accounting,O
and,O
reporting,O
policies,O
",",O
procedures,O
and,O
practices,O
and,O
the,O
audit,O
of,O
the,O
financial,O
statements,O
of,O
the,O
Funds,O
",",O
(,O
2,O
),O
the,O
quality,O
and,O
integrity,O
of,O
the,O
financial,O
statements,O
of,O
the,O
Funds,O
and,O
(,O
3,O
),O
the,O
independent,O
registered,O
public,O
accounting,O
firm,O
s,O
qualifications,O
",",O
performance,O
and,O
independence,O
.,O
,O
The,O
audit,O
committee,O
reviews,O
the,O
work,O
and,O
any,O
recommendations,O
of,O
the,O
Funds,O
independent,O
registered,O
public,O
accounting,O
firm,O
.,O
,O
Based,O
on,O
such,O
review,O
",",O
it,O
is,O
authorized,O
to,O
make,O
recommendations,O
to,O
the,O
Board,O
.,O
,O
The,O
audit,O
committee,O
is,O
also,O
responsible,O
for,O
the,O
oversight,O
of,O
the,O
Pricing,O
Procedures,O
of,O
the,O
Funds,O
and,O
the,O
internal,O
Valuation,O
Group,O
.,O
,O
The,O
Boards,O
have,O
adopted,O
a,O
written,O
Audit,O
Committee,O
Charter,O
that,O
conforms,O
to,O
the,O
listing,O
standards,O
of,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
or,O
the,O
NYSE,I-BUSINESS
Amex,I-BUSINESS
",",O
as,O
applicable,O
.,O
,O
A,O
copy,O
of,O
the,O
Audit,O
Committee,O
Charter,O
is,O
attached,O
as,O
Appendix,O
D,O
.,O
,O
The,O
number,O
of,O
audit,O
committee,O
meetings,O
of,O
each,O
Fund,O
held,O
during,O
its,O
last,O
fiscal,O
year,O
is,O
shown,O
in,O
Appendix,O
C,O
.,O
,O
Exchange,O
or,O
NYSE,I-BUSINESS
Amex,I-BUSINESS
listing,O
standards,O
",",O
as,O
applicable,O
.,O
,O
Robert,I-PERSON
P.,I-PERSON
Bremner,I-PERSON
",",O
Chair,O
",",O
Jack,I-PERSON
B.,I-PERSON
Evans,I-PERSON
",",O
William,I-PERSON
C.,I-PERSON
Hunter,I-PERSON
",",O
David,I-PERSON
J.,I-PERSON
Kundert,I-PERSON
",",O
William,I-PERSON
J.,I-PERSON
Schneider,I-PERSON
",",O
Judith,I-PERSON
M.,I-PERSON
Stockdale,I-PERSON
",",O
Carole,I-PERSON
E.,I-PERSON
Stone,I-PERSON
and,O
Terence,I-PERSON
J.,I-PERSON
Toth,I-PERSON
are,O
current,O
members,O
of,O
the,O
nominating,O
and,O
governance,O
committee,O
of,O
each,O
Fund,O
.,O
,O
The,O
purpose,O
of,O
the,O
nominating,O
and,O
governance,O
committee,O
is,O
to,O
seek,O
",",O
identify,O
and,O
recommend,O
to,O
the,O
Board,O
qualified,O
candidates,O
for,O
election,O
or,O
appointment,O
to,O
each,O
Fund,O
s,O
Board,O
.,O
,O
In,O
addition,O
",",O
the,O
committee,O
oversees,O
matters,O
of,O
corporate,O
governance,O
",",O
including,O
the,O
evaluation,O
of,O
Board,O
performance,O
and,O
processes,O
",",O
and,O
assignment,O
and,O
rotation,O
of,O
committee,O
members,O
",",O
and,O
the,O
establishment,O
of,O
corporate,O
governance,O
guidelines,O
and,O
procedures,O
",",O
to,O
the,O
extent,O
necessary,O
or,O
desirable,O
.,O
,O
The,O
committee,O
operates,O
under,O
a,O
written,O
charter,O
adopted,O
and,O
approved,O
by,O
the,O
Boards,O
of,O
each,O
Fund,O
",",O
a,O
copy,O
of,O
which,O
is,O
available,O
on,O
the,O
Funds,O
website,O
at,O
www.nuveen.com/CEF/Info/Shareholder/,O
.,O
,O
The,O
number,O
of,O
nominating,O
and,O
governance,O
committee,O
meetings,O
of,O
each,O
Fund,O
held,O
during,O
its,O
last,O
fiscal,O
year,O
is,O
shown,O
in,O
Appendix,O
C,O
.,O
,O
The,O
nominating,O
and,O
governance,O
committee,O
looks,O
to,O
many,O
sources,O
for,O
recommendations,O
of,O
qualified,O
candidates,O
",",O
including,O
current,O
Board,O
Members,O
",",O
employees,O
of,O
the,O
Adviser,O
",",O
current,O
shareholders,O
of,O
the,O
Funds,O
",",O
third,O
party,O
sources,O
and,O
any,O
other,O
persons,O
or,O
entities,O
that,O
may,O
be,O
deemed,O
necessary,O
or,O
desirable,O
by,O
the,O
committee,O
.,O
,O
Shareholders,O
of,O
the,O
Funds,O
who,O
wish,O
to,O
nominate,O
a,O
candidate,O
to,O
their,O
Fund,O
s,O
Board,O
should,O
mail,O
information,O
to,O
the,O
attention,O
of,O
Lorna,I-PERSON
Ferguson,I-PERSON
",",O
Manager,O
of,O
Fund,O
Board,O
Relations,O
",",O
Nuveen,I-BUSINESS
Investments,I-BUSINESS
",",O
333,O
West,I-LOCATION
Wacker,I-LOCATION
Drive,I-LOCATION
",",O
Chicago,I-LOCATION
",",O
Illinois,I-LOCATION
60606,O
.,O
,O
This,O
information,O
must,O
include,O
evidence,O
of,O
Fund,O
ownership,O
of,O
the,O
person,O
or,O
entity,O
recommending,O
the,O
candidate,O
",",O
a,O
full,O
listing,O
of,O
the,O
proposed,O
candidate,O
s,O
education,O
",",O
experience,O
",",O
current,O
employment,O
",",O
date,O
of,O
birth,O
",",O
names,O
and,O
addresses,O
of,O
at,O
least,O
three,O
professional,O
references,O
",",O
information,O
as,O
to,O
whether,O
the,O
candidate,O
is,O
an,O
interested,O
person,O
(,O
as,O
such,O
term,O
is,O
defined,O
in,O
the,O
1940,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
in,O
relation,O
to,O
the,O
Fund,O
and,O
such,O
other,O
information,O
that,O
would,O
be,O
helpful,O
to,O
the,O
nominating,O
and,O
governance,O
committee,O
in,O
evaluating,O
the,O
candidate,O
.,O
,O
All,O
satisfactorily,O
completed,O
information,O
regarding,O
candidates,O
will,O
be,O
forwarded,O
to,O
the,O
chairman,O
of,O
the,O
nominating,O
and,O
governance,O
committee,O
and,O
the,O
outside,O
counsel,O
to,O
the,O
Independent,O
Board,O
Members,O
.,O
,O
Recommendations,O
for,O
candidates,O
to,O
the,O
Board,O
will,O
be,O
evaluated,O
in,O
light,O
of,O
whether,O
the,O
number,O
of,O
Board,O
members,O
is,O
expected,O
to,O
change,O
and,O
whether,O
the,O
Board,O
expects,O
any,O
vacancies,O
.,O
,O
All,O
nominations,O
from,O
Fund,O
shareholders,O
will,O
be,O
acknowledged,O
",",O
although,O
there,O
may,O
be,O
times,O
when,O
the,O
committee,O
is,O
not,O
actively,O
recruiting,O
new,O
Board,O
members,O
.,O
,O
In,O
those,O
circumstances,O
nominations,O
will,O
be,O
kept,O
on,O
file,O
until,O
active,O
recruitment,O
is,O
under,O
way,O
.,O
,O
The,O
nominating,O
and,O
governance,O
committee,O
sets,O
appropriate,O
standards,O
and,O
requirements,O
for,O
nominations,O
to,O
the,O
Board,O
.,O
,O
In,O
considering,O
a,O
candidate,O
s,O
qualifications,O
",",O
each,O
candidate,O
must,O
meet,O
certain,O
basic,O
requirements,O
",",O
including,O
relevant,O
skills,O
and,O
experience,O
",",O
time,O
availability,O
and,O
",",O
if,O
qualifying,O
as,O
an,O
Independent,O
Board,O
Member,O
candidate,O
",",O
independence,O
from,O
the,O
Adviser,O
or,O
other,O
service,O
providers,O
.,O
,O
These,O
experience,O
requirements,O
may,O
vary,O
depending,O
on,O
the,O
current,O
composition,O
of,O
the,O
Board,O
",",O
since,O
the,O
goal,O
is,O
to,O
ensure,O
an,O
appropriate,O
range,O
of,O
skills,O
and,O
experience,O
",",O
in,O
the,O
aggregate,O
.,O
,O
All,O
candidates,O
must,O
meet,O
high,O
expectations,O
of,O
personal,O
integrity,O
",",O
governance,O
experience,O
and,O
professional,O
competence,O
that,O
are,O
assessed,O
on,O
the,O
basis,O
of,O
personal,O
interviews,O
",",O
recommendations,O
",",O
or,O
direct,O
knowledge,O
by,O
committee,O
members,O
.,O
,O
The,O
committee,O
may,O
use,O
any,O
process,O
it,O
deems,O
appropriate,O
for,O
the,O
purpose,O
of,O
evaluating,O
candidates,O
",",O
which,O
process,O
may,O
include,O
",",O
without,O
limitation,O
",",O
personal,O
interviews,O
",",O
background,O
checks,O
",",O
written,O
submissions,O
by,O
the,O
candidates,O
and,O
third,O
party,O
references,O
.,O
,O
There,O
is,O
no,O
difference,O
in,O
the,O
manner,O
in,O
which,O
the,O
nominating,O
and,O
governance,O
committee,O
evaluates,O
candidates,O
when,O
the,O
candidate,O
is,O
submitted,O
by,O
a,O
shareholder,O
.,O
,O
reserves,O
the,O
right,O
to,O
make,O
the,O
final,O
selection,O
regarding,O
the,O
nomination,O
of,O
any,O
prospective,O
Board,O
member,O
.,O
,O
The,O
number,O
of,O
regular,O
quarterly,O
meetings,O
and,O
special,O
meetings,O
held,O
by,O
the,O
Board,O
of,O
each,O
Fund,O
during,O
the,O
Fund,O
s,O
last,O
fiscal,O
year,O
is,O
shown,O
in,O
Appendix,O
C.,O
During,O
the,O
last,O
fiscal,O
year,O
",",O
each,O
Board,O
Member,O
attended,O
75,O
%,O
or,O
more,O
of,O
each,O
Fund,O
s,O
Board,O
meetings,O
and,O
the,O
committee,O
meetings,O
(,O
if,O
a,O
member,O
thereof,O
),O
held,O
during,O
the,O
period,O
for,O
which,O
such,O
Board,O
Member,O
was,O
a,O
Board,O
Member,O
.,O
,O
The,O
policy,O
of,O
the,O
Board,O
relating,O
to,O
attendance,O
by,O
Board,O
Members,O
at,O
annual,O
meetings,O
of,O
the,O
Funds,O
and,O
the,O
number,O
of,O
Board,O
Members,O
who,O
attended,O
the,O
last,O
annual,O
meeting,O
of,O
shareholders,O
of,O
each,O
Fund,O
is,O
posted,O
on,O
the,O
Funds,O
website,O
at,O
www.nuveen.com/CEF/Info/Shareholder/,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
information,O
with,O
respect,O
to,O
each,O
officer,O
of,O
the,O
Funds,O
.,O
,O
Officers,O
receive,O
no,O
compensation,O
from,O
the,O
Funds,O
.,O
,O
The,O
officers,O
are,O
elected,O
by,O
the,O
Board,O
on,O
an,O
annual,O
basis,O
to,O
serve,O
until,O
successors,O
are,O
elected,O
and,O
qualified,O
.,O
,O
The,O
audit,O
committee,O
of,O
each,O
Board,O
is,O
responsible,O
for,O
the,O
oversight,O
and,O
monitoring,O
of,O
(,O
1,O
),O
the,O
accounting,O
and,O
reporting,O
policies,O
",",O
processes,O
and,O
practices,O
",",O
and,O
the,O
audit,O
of,O
the,O
financial,O
statements,O
",",O
of,O
each,O
Fund,O
",",O
(,O
2,O
),O
the,O
quality,O
and,O
integrity,O
of,O
the,O
Funds,O
financial,O
statements,O
and,O
(,O
3,O
),O
the,O
independent,O
registered,O
public,O
accounting,O
firm,O
s,O
qualifications,O
",",O
performance,O
and,O
independence,O
.,O
,O
In,O
its,O
oversight,O
capacity,O
",",O
the,O
committee,O
reviews,O
each,O
Fund,O
s,O
annual,O
financial,O
statements,O
with,O
both,O
management,O
and,O
the,O
independent,O
registered,O
public,O
accounting,O
firm,O
and,O
the,O
committee,O
meets,O
periodically,O
with,O
the,O
independent,O
registered,O
public,O
accounting,O
firm,O
and,O
internal,O
auditors,O
to,O
consider,O
their,O
evaluation,O
of,O
each,O
Fund,O
s,O
financial,O
and,O
internal,O
controls,O
.,O
,O
The,O
committee,O
also,O
selects,O
",",O
retains,O
",",O
evaluates,O
and,O
may,O
replace,O
each,O
Fund,O
s,O
independent,O
registered,O
public,O
accounting,O
firm,O
.,O
,O
The,O
committee,O
is,O
currently,O
composed,O
of,O
five,O
Independent,O
Board,O
Members,O
and,O
operates,O
under,O
a,O
written,O
charter,O
adopted,O
and,O
approved,O
by,O
each,O
Board,O
.,O
,O
Each,O
committee,O
member,O
meets,O
the,O
independence,O
and,O
experience,O
requirements,O
",",O
as,O
applicable,O
",",O
of,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
",",O
NYSE,I-BUSINESS
Amex,I-BUSINESS
",",O
Section,O
10A,O
of,O
the,O
1934,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
the,O
rules,O
and,O
regulations,O
of,O
the,O
SEC,I-GOVERNMENT
.,O
,O
The,O
committee,O
",",O
in,O
discharging,O
its,O
duties,O
",",O
has,O
met,O
with,O
and,O
held,O
discussions,O
with,O
management,O
and,O
each,O
Fund,O
s,O
independent,O
registered,O
public,O
accounting,O
firm,O
.,O
,O
The,O
committee,O
has,O
also,O
reviewed,O
and,O
discussed,O
the,O
audited,O
financial,O
statements,O
with,O
management,O
.,O
,O
Management,O
has,O
represented,O
to,O
the,O
independent,O
registered,O
public,O
accounting,O
firm,O
that,O
each,O
Fund,O
s,O
financial,O
statements,O
were,O
prepared,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
.,O
,O
committee,O
has,O
also,O
discussed,O
with,O
the,O
independent,O
registered,O
public,O
accounting,O
firm,O
the,O
matters,O
required,O
to,O
be,O
discussed,O
by,O
Statement,I-LEGISLATION/ACT
on,I-LEGISLATION/ACT
Auditing,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
(,O
SAS,I-LEGISLATION/ACT
),O
No.,O
61,O
(,O
Communication,I-MISCELLANEOUS
with,I-MISCELLANEOUS
Audit,I-MISCELLANEOUS
Committees,I-MISCELLANEOUS
),O
",",O
as,O
amended,O
by,O
SAS,I-LEGISLATION/ACT
No.,O
90,O
(,O
Audit,I-MISCELLANEOUS
Committee,I-MISCELLANEOUS
Communications,I-MISCELLANEOUS
),O
.,O
,O
Each,O
Fund,O
s,O
independent,O
registered,O
public,O
accounting,O
firm,O
provided,O
to,O
the,O
committee,O
the,O
written,O
disclosure,O
required,O
by,O
Independence,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Board,I-LEGISLATION/ACT
Standard,I-LEGISLATION/ACT
No.,O
1,O
(,O
Independence,I-MISCELLANEOUS
Discussions,I-MISCELLANEOUS
with,I-MISCELLANEOUS
Audit,I-MISCELLANEOUS
Committees,I-MISCELLANEOUS
),O
",",O
and,O
the,O
committee,O
discussed,O
with,O
representatives,O
of,O
the,O
independent,O
registered,O
public,O
accounting,O
firm,O
their,O
firm,O
s,O
independence,O
.,O
,O
As,O
provided,O
in,O
the,O
Audit,O
Committee,O
Charter,O
",",O
it,O
is,O
not,O
the,O
committee,O
s,O
responsibility,O
to,O
determine,O
",",O
and,O
the,O
considerations,O
and,O
discussions,O
referenced,O
above,O
do,O
not,O
ensure,O
",",O
that,O
each,O
Fund,O
s,O
financial,O
statements,O
are,O
complete,O
and,O
accurate,O
and,O
presented,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
.,O
,O
Based,O
on,O
the,O
committee,O
s,O
review,O
and,O
discussions,O
with,O
management,O
and,O
the,O
independent,O
registered,O
public,O
accounting,O
firm,O
",",O
the,O
representations,O
of,O
management,O
and,O
the,O
report,O
of,O
the,O
independent,O
registered,O
public,O
accounting,O
firm,O
to,O
the,O
committee,O
",",O
the,O
committee,O
has,O
recommended,O
that,O
the,O
audited,O
financial,O
statements,O
be,O
included,O
in,O
each,O
Fund,O
s,O
Annual,O
Report,O
.,O
,O
The,O
current,O
members,O
of,O
the,O
committee,O
are,O
:,O
,O
Audit,O
and,O
Related,O
Fees,O
.,O
,O
The,O
following,O
tables,O
provide,O
the,O
aggregate,O
fees,O
billed,O
during,O
each,O
Fund,O
s,O
last,O
two,O
fiscal,O
years,O
by,O
each,O
Fund,O
s,O
independent,O
registered,O
public,O
accounting,O
firm,O
for,O
engagements,O
directly,O
related,O
to,O
the,O
operations,O
and,O
financial,O
reporting,O
of,O
each,O
Fund,O
including,O
those,O
relating,O
(,O
i,O
),O
to,O
each,O
Fund,O
for,O
services,O
provided,O
to,O
the,O
Fund,O
and,O
(,O
ii,O
),O
to,O
the,O
Adviser,O
and,O
certain,O
entities,O
controlling,O
",",O
controlled,O
by,O
",",O
or,O
under,O
common,O
control,O
with,O
the,O
Adviser,O
that,O
provide,O
ongoing,O
services,O
to,O
each,O
Fund,O
(,O
Adviser,O
Entities,O
),O
.,O
,O
Audit,O
Committee,O
Pre-Approval,O
Policies,O
and,O
Procedures,O
.,O
,O
Generally,O
",",O
the,O
audit,O
committee,O
must,O
approve,O
each,O
Fund,O
s,O
independent,O
registered,O
public,O
accounting,O
firm,O
s,O
engagements,O
(,O
i,O
),O
with,O
the,O
Fund,O
for,O
audit,O
or,O
non-audit,O
services,O
and,O
(,O
ii,O
),O
with,O
the,O
Adviser,O
and,O
Adviser,O
Entities,O
for,O
non-audit,O
services,O
if,O
the,O
engagement,O
relates,O
directly,O
to,O
the,O
operations,O
and,O
financial,O
reporting,O
of,O
the,O
Fund,O
.,O
,O
Regarding,O
tax,O
and,O
research,O
projects,O
conducted,O
by,O
the,O
independent,O
registered,O
public,O
accounting,O
firm,O
for,O
each,O
Fund,O
and,O
the,O
Adviser,O
and,O
Adviser,O
Entities,O
(,O
with,O
respect,O
to,O
the,O
operations,O
and,O
financial,O
reporting,O
of,O
each,O
Fund,O
),O
",",O
such,O
engagements,O
will,O
be,O
(,O
i,O
),O
pre-approved,O
by,O
the,O
audit,O
committee,O
if,O
they,O
are,O
expected,O
to,O
be,O
for,O
amounts,O
greater,O
than,O
$,O
"10,000",O
;,O
(,O
ii,O
),O
reported,O
to,O
the,O
audit,O
committee,O
chairman,O
for,O
his,O
verbal,O
approval,O
prior,O
to,O
engagement,O
if,O
they,O
are,O
expected,O
to,O
be,O
for,O
amounts,O
under,O
$,O
"10,000",O
but,O
greater,O
than,O
$,O
"5,000",O
;,O
and,O
(,O
iii,O
),O
reported,O
to,O
the,O
audit,O
committee,O
at,O
the,O
next,O
audit,O
committee,O
meeting,O
if,O
they,O
are,O
expected,O
to,O
be,O
for,O
an,O
amount,O
under,O
$,O
"5,000",O
.,O
,O
The,O
audit,O
committee,O
has,O
approved,O
in,O
advance,O
all,O
audit,O
services,O
and,O
non-audit,O
services,O
that,O
the,O
independent,O
registered,O
public,O
accounting,O
firm,O
provided,O
to,O
each,O
Fund,O
and,O
to,O
the,O
Adviser,O
and,O
Adviser,O
Entities,O
(,O
with,O
respect,O
to,O
the,O
operations,O
and,O
financial,O
reporting,O
of,O
each,O
Fund,O
),O
.,O
,O
None,O
of,O
the,O
services,O
rendered,O
by,O
the,O
independent,O
registered,O
public,O
accounting,O
firm,O
to,O
each,O
Fund,O
or,O
the,O
Adviser,O
or,O
Adviser,O
Entities,O
were,O
pre-approved,O
by,O
the,O
audit,O
committee,O
pursuant,O
to,O
the,O
pre-approval,O
exception,O
under,O
Rule,O
2.01,O
(,O
c,O
),O
(,O
7,O
),O
(,O
i,O
),O
(,O
C,O
),O
or,O
Rule,O
2.01,O
(,O
c,O
),O
(,O
7,O
),O
(,O
ii,O
),O
of,O
Regulation,I-MISCELLANEOUS
S-X,I-MISCELLANEOUS
.,O
,O
The,O
Board,O
of,O
each,O
Fund,O
(,O
except,O
Equity,I-BUSINESS
Premium,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Advantage,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
",",O
Core,I-BUSINESS
Equity,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Opportunity,I-BUSINESS
",",O
Global,I-BUSINESS
Government,I-BUSINESS
",",O
Global,I-BUSINESS
Value,I-BUSINESS
and,O
Multi-Currency,I-BUSINESS
),O
has,O
appointed,O
Ernst,I-BUSINESS
&,I-BUSINESS
Young,I-BUSINESS
LLP,I-BUSINESS
as,O
independent,O
registered,O
public,O
accounting,O
firm,O
to,O
audit,O
the,O
books,O
and,O
records,O
of,O
the,O
Fund,O
for,O
its,O
current,O
fiscal,O
year,O
.,O
,O
The,O
Boards,O
of,O
Equity,I-BUSINESS
Premium,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Advantage,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
",",O
Core,I-BUSINESS
Equity,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Opportunity,I-BUSINESS
",",O
Global,I-BUSINESS
Government,I-BUSINESS
",",O
Global,I-BUSINESS
Value,I-BUSINESS
and,O
Multi-Currency,I-BUSINESS
have,O
appointed,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
as,O
independent,O
registered,O
public,O
accounting,O
firm,O
to,O
audit,O
the,O
books,O
and,O
records,O
of,O
these,O
Funds,O
for,O
their,O
current,O
fiscal,O
years,O
.,O
,O
A,O
representative,O
of,O
each,O
independent,O
registered,O
public,O
accounting,O
firm,O
will,O
be,O
present,O
at,O
the,O
Annual,O
Meetings,O
to,O
make,O
a,O
statement,O
",",O
if,O
such,O
representative,O
so,O
desires,O
",",O
and,O
to,O
respond,O
to,O
shareholders,O
questions,O
.,O
,O
Each,O
independent,O
registered,O
public,O
accounting,O
firm,O
has,O
informed,O
each,O
applicable,O
Fund,O
that,O
it,O
has,O
no,O
direct,O
or,O
indirect,O
material,O
financial,O
interest,O
in,O
the,O
Funds,O
",",O
Nuveen,I-BUSINESS
",",O
the,O
Adviser,O
or,O
any,O
other,O
investment,O
company,O
sponsored,O
by,O
Nuveen,O
.,O
,O
Section,O
30,O
(,O
h,O
),O
of,O
the,O
1940,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
Section,O
16,O
(,O
a,O
),O
of,O
the,O
1934,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
require,O
Board,O
Members,O
and,O
officers,O
",",O
the,O
Adviser,O
",",O
affiliated,O
persons,O
of,O
the,O
Adviser,O
and,O
persons,O
who,O
own,O
more,O
than,O
10,O
%,O
of,O
a,O
registered,O
class,O
of,O
a,O
Fund,O
s,O
equity,O
securities,O
to,O
file,O
forms,O
reporting,O
their,O
affiliation,O
with,O
that,O
Fund,O
and,O
reports,O
of,O
ownership,O
and,O
changes,O
in,O
ownership,O
of,O
that,O
Fund,O
s,O
shares,O
with,O
the,O
SEC,I-GOVERNMENT
and,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
or,O
NYSE,I-BUSINESS
Amex,I-BUSINESS
",",O
as,O
applicable,O
.,O
,O
These,O
persons,O
and,O
entities,O
are,O
required,O
by,O
SEC,I-GOVERNMENT
regulation,O
to,O
furnish,O
the,O
Funds,O
with,O
copies,O
of,O
all,O
Section,O
16,O
(,O
a,O
),O
forms,O
they,O
file,O
.,O
,O
Premium,I-BUSINESS
Opportunity,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Advantage,I-BUSINESS
and,O
Tax-Advantaged,I-BUSINESS
Dividend,I-BUSINESS
",",O
James,I-PERSON
Ruane,I-PERSON
made,O
an,O
amended,O
filing,O
on,O
Form,I-MISCELLANEOUS
3,I-MISCELLANEOUS
in,O
2009,O
;,O
with,O
respect,O
to,O
Real,I-BUSINESS
Estate,I-BUSINESS
",",O
William,I-PERSON
Adams,I-PERSON
made,O
an,O
amended,O
filing,O
on,O
Form,I-MISCELLANEOUS
3,I-MISCELLANEOUS
in,O
2009,O
;,O
and,O
with,O
respect,O
to,O
Real,I-BUSINESS
Estate,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Opportunity,I-BUSINESS
and,O
Multi-Strategy,I-BUSINESS
",",O
David,I-PERSON
Lamb,I-PERSON
made,O
a,O
late,O
filing,O
on,O
Form,I-MISCELLANEOUS
4,I-MISCELLANEOUS
in,O
2009,O
.,O
,O
To,O
the,O
knowledge,O
of,O
management,O
of,O
the,O
Funds,O
",",O
no,O
shareholder,O
of,O
a,O
Fund,O
owns,O
more,O
than,O
10,O
%,O
of,O
a,O
registered,O
class,O
of,O
a,O
Fund,O
s,O
equity,O
securities,O
",",O
except,O
as,O
provided,O
in,O
Appendix,O
B,O
.,O
,O
The,O
Adviser,O
",",O
located,O
at,O
333,O
West,I-LOCATION
Wacker,I-LOCATION
Drive,I-LOCATION
",",O
Chicago,I-LOCATION
",",O
Illinois,I-LOCATION
60606,O
",",O
serves,O
as,O
investment,O
adviser,O
and,O
manager,O
for,O
each,O
Fund,O
.,O
,O
The,O
Adviser,O
is,O
a,O
wholly-owned,O
subsidiary,O
of,O
Nuveen,I-BUSINESS
.,O
,O
Nuveen,I-BUSINESS
is,O
a,O
wholly-owned,O
subsidiary,O
of,O
Windy,I-BUSINESS
City,I-BUSINESS
",",O
a,O
corporation,O
formed,O
by,O
investors,O
led,O
by,O
Madison,I-BUSINESS
Dearborn,I-BUSINESS
Partners,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
MDP,I-BUSINESS
),O
",",O
a,O
private,O
equity,O
investment,O
firm,O
based,O
in,O
Chicago,I-LOCATION
",",O
Illinois,I-LOCATION
.,O
,O
Windy,I-BUSINESS
City,I-BUSINESS
is,O
controlled,O
by,O
MDP,I-BUSINESS
on,O
behalf,O
of,O
the,O
Madison,I-BUSINESS
Dearborn,I-BUSINESS
Capital,I-BUSINESS
Partner,I-BUSINESS
V,I-BUSINESS
funds,I-BUSINESS
.,O
,O
To,O
be,O
considered,O
for,O
presentation,O
at,O
the,O
annual,O
meeting,O
of,O
shareholders,O
for,O
the,O
Funds,O
to,O
be,O
held,O
in,O
2011,O
",",O
shareholder,O
proposals,O
submitted,O
pursuant,O
to,O
Rule,O
14a-8,O
of,O
the,O
1934,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
must,O
be,O
received,O
at,O
the,O
offices,O
of,O
that,O
Fund,O
",",O
333,O
West,I-LOCATION
Wacker,I-LOCATION
Drive,I-LOCATION
",",O
Chicago,I-LOCATION
",",O
Illinois,I-LOCATION
60606,O
",",O
not,O
later,O
than,O
January,O
4,O
",",O
2011,O
.,O
,O
A,O
shareholder,O
wishing,O
to,O
provide,O
notice,O
in,O
the,O
manner,O
prescribed,O
by,O
Rule,O
14a-4,O
(,O
c,O
),O
(,O
1,O
),O
of,O
a,O
proposal,O
submitted,O
outside,O
of,O
the,O
process,O
of,O
Rule,O
14a-8,O
for,O
the,O
annual,O
meeting,O
must,O
",",O
pursuant,O
to,O
each,O
Fund,O
s,O
By-Laws,O
",",O
submit,O
such,O
written,O
notice,O
to,O
the,O
Fund,O
not,O
later,O
than,O
March,O
16,O
",",O
2011,O
or,O
prior,O
to,O
March,O
1,O
",",O
2011,O
.,O
,O
Timely,O
submission,O
of,O
a,O
proposal,O
does,O
not,O
mean,O
that,O
such,O
proposal,O
will,O
be,O
included,O
in,O
a,O
proxy,O
statement,O
.,O
,O
Fund,O
shareholders,O
who,O
want,O
to,O
communicate,O
with,O
the,O
Board,O
or,O
any,O
individual,O
Board,O
Member,O
should,O
write,O
to,O
the,O
attention,O
of,O
Lorna,I-PERSON
Ferguson,I-PERSON
",",O
Manager,O
of,O
Fund,O
Board,O
Relations,O
",",O
Nuveen,I-BUSINESS
Investments,I-BUSINESS
",",O
333,O
West,I-LOCATION
Wacker,I-LOCATION
Drive,I-LOCATION
",",O
Chicago,I-LOCATION
",",O
Illinois,I-LOCATION
60606,O
.,O
,O
The,O
letter,O
should,O
indicate,O
that,O
you,O
are,O
a,O
Fund,O
shareholder,O
and,O
note,O
the,O
Fund,O
or,O
Funds,O
that,O
you,O
own,O
.,O
,O
If,O
the,O
communication,O
is,O
intended,O
for,O
a,O
specific,O
Board,O
Member,O
and,O
so,O
indicates,O
it,O
will,O
be,O
sent,O
only,O
to,O
that,O
Board,O
Member,O
.,O
,O
If,O
a,O
communication,O
does,O
not,O
indicate,O
a,O
specific,O
Board,O
Member,O
",",O
it,O
will,O
be,O
sent,O
to,O
the,O
Independent,O
Chairman,O
and,O
the,O
outside,O
counsel,O
to,O
the,O
Independent,O
Board,O
Members,O
for,O
further,O
distribution,O
as,O
deemed,O
appropriate,O
by,O
such,O
persons,O
.,O
,O
The,O
cost,O
of,O
preparing,O
",",O
printing,O
and,O
mailing,O
the,O
enclosed,O
proxy,O
",",O
accompanying,O
notice,O
and,O
proxy,O
statement,O
and,O
all,O
other,O
costs,O
in,O
connection,O
with,O
the,O
solicitation,O
of,O
proxies,O
will,O
be,O
paid,O
by,O
the,O
Funds,O
pro,O
rata,O
based,O
on,O
the,O
number,O
of,O
shareholder,O
accounts,O
.,O
,O
Additional,O
solicitation,O
may,O
be,O
made,O
by,O
letter,O
or,O
telephone,O
by,O
officers,O
or,O
employees,O
of,O
Nuveen,I-BUSINESS
or,O
the,O
Adviser,O
",",O
or,O
by,O
dealers,O
and,O
their,O
representatives,O
.,O
,O
Any,O
additional,O
costs,O
of,O
solicitation,O
will,O
be,O
paid,O
by,O
the,O
Fund,O
that,O
requires,O
additional,O
solicitation,O
.,O
,O
Premium,O
was,O
September,O
30,O
",",O
2009,O
.,O
,O
The,O
last,O
fiscal,O
year,O
end,O
for,O
Real,I-BUSINESS
Estate,I-BUSINESS
",",O
Diversified,I-BUSINESS
Dividend,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Advantage,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Income,I-BUSINESS
",",O
Equity,I-BUSINESS
Premium,I-BUSINESS
Opportunity,I-BUSINESS
",",O
Quality,I-BUSINESS
Preferred,I-BUSINESS
",",O
Quality,I-BUSINESS
Preferred,I-BUSINESS
2,I-BUSINESS
",",O
Quality,I-BUSINESS
Preferred,I-BUSINESS
3,I-BUSINESS
",",O
Tax-Advantaged,I-BUSINESS
",",O
Tax-Advantaged,I-BUSINESS
Dividend,I-BUSINESS
",",O
Global,I-BUSINESS
Government,I-BUSINESS
",",O
Global,I-BUSINESS
Value,I-BUSINESS
",",O
Core,I-BUSINESS
Equity,I-BUSINESS
",",O
Multi-Currency,I-BUSINESS
",",O
Multi-Strategy,I-BUSINESS
and,O
Multi-Strategy,I-BUSINESS
2,I-BUSINESS
was,O
December,O
31,O
",",O
2009,O
.,O
,O
Annual,O
reports,O
will,O
be,O
sent,O
to,O
shareholders,O
of,O
record,O
of,O
each,O
Fund,O
following,O
each,O
Fund,O
s,O
fiscal,O
year,O
end,O
.,O
,O
Each,O
Fund,O
will,O
furnish,O
",",O
without,O
charge,O
",",O
a,O
copy,O
of,O
its,O
annual,O
report,O
and/or,O
semi-annual,O
report,O
as,O
available,O
upon,O
request,O
.,O
,O
Important,O
Notice,O
Regarding,O
the,O
Availability,O
of,O
Proxy,O
Materials,O
for,O
the,O
Shareholder,O
Meeting,O
To,O
Be,O
Held,O
on,O
April,O
6,O
",",O
2010,O
:,O
,O
Each,O
Fund,O
s,O
proxy,O
statement,O
is,O
available,O
at,O
www.nuveen.com/CEF/Info/Shareholder/Proxy,O
Statements.aspx,O
.,O
,O
For,O
more,O
information,O
",",O
shareholders,O
may,O
also,O
contact,O
the,O
applicable,O
Fund,O
at,O
the,O
address,O
and,O
phone,O
number,O
set,O
forth,O
above,O
.,O
,O
Please,O
note,O
that,O
only,O
one,O
annual,O
report,O
or,O
proxy,O
statement,O
may,O
be,O
delivered,O
to,O
two,O
or,O
more,O
shareholders,O
of,O
a,O
Fund,O
who,O
share,O
an,O
address,O
",",O
unless,O
the,O
Fund,O
has,O
received,O
instructions,O
to,O
the,O
contrary,O
.,O
,O
To,O
request,O
a,O
separate,O
copy,O
of,O
an,O
annual,O
report,O
or,O
proxy,O
statement,O
",",O
or,O
for,O
instructions,O
as,O
to,O
how,O
to,O
request,O
a,O
separate,O
copy,O
of,O
such,O
documents,O
or,O
as,O
to,O
how,O
to,O
request,O
a,O
single,O
copy,O
if,O
multiple,O
copies,O
of,O
such,O
documents,O
are,O
received,O
",",O
shareholders,O
should,O
contact,O
the,O
applicable,O
Fund,O
at,O
the,O
address,O
and,O
phone,O
number,O
set,O
forth,O
above,O
.,O
,O
Management,O
does,O
not,O
intend,O
to,O
present,O
and,O
does,O
not,O
have,O
reason,O
to,O
believe,O
that,O
any,O
other,O
items,O
of,O
business,O
will,O
be,O
presented,O
at,O
the,O
Annual,O
Meetings,O
.,O
,O
However,O
",",O
if,O
other,O
matters,O
are,O
properly,O
presented,O
to,O
the,O
Annual,O
Meetings,O
for,O
a,O
vote,O
",",O
the,O
proxies,O
will,O
be,O
voted,O
by,O
the,O
persons,O
acting,O
under,O
the,O
proxies,O
upon,O
such,O
matters,O
in,O
accordance,O
with,O
their,O
judgment,O
of,O
the,O
best,O
interests,O
of,O
the,O
Fund,O
.,O
,O
A,O
list,O
of,O
shareholders,O
entitled,O
to,O
be,O
present,O
and,O
to,O
vote,O
at,O
each,O
Annual,O
Meeting,O
will,O
be,O
available,O
at,O
the,O
offices,O
of,O
the,O
Funds,O
",",O
333,O
West,I-LOCATION
Wacker,I-LOCATION
Drive,I-LOCATION
",",O
Chicago,I-LOCATION
",",O
Illinois,I-LOCATION
",",O
for,O
inspection,O
by,O
any,O
shareholder,O
during,O
regular,O
business,O
hours,O
beginning,O
ten,O
days,O
prior,O
to,O
the,O
date,O
of,O
the,O
Annual,O
Meeting,O
.,O
,O
Failure,O
of,O
a,O
quorum,O
to,O
be,O
present,O
at,O
any,O
Annual,O
Meeting,O
will,O
necessitate,O
adjournment,O
and,O
will,O
subject,O
that,O
Fund,O
to,O
additional,O
expense,O
.,O
,O
The,O
persons,O
named,O
in,O
the,O
enclosed,O
proxy,O
may,O
also,O
move,O
for,O
an,O
adjournment,O
of,O
any,O
Annual,O
Meeting,O
to,O
permit,O
further,O
solicitation,O
of,O
proxies,O
with,O
respect,O
to,O
the,O
proposal,O
if,O
they,O
determine,O
that,O
adjournment,O
and,O
further,O
solicitation,O
is,O
reasonable,O
and,O
in,O
the,O
best,O
interests,O
of,O
the,O
shareholders,O
.,O
,O
Under,O
each,O
Fund,O
s,O
By-Laws,O
",",O
an,O
adjournment,O
of,O
a,O
meeting,O
with,O
respect,O
to,O
a,O
matter,O
requires,O
the,O
affirmative,O
vote,O
of,O
a,O
majority,O
of,O
the,O
shares,O
entitled,O
to,O
vote,O
on,O
the,O
matter,O
present,O
in,O
person,O
or,O
represented,O
by,O
proxy,O
at,O
the,O
meeting,O
.,O
,O
IF,O
YOU,O
CAN,O
NOT,O
BE,O
PRESENT,O
AT,O
THE,O
MEETING,O
",",O
YOU,O
ARE,O
REQUESTED,O
TO,O
FILL,O
IN,O
",",O
SIGN,O
AND,O
RETURN,O
THE,O
ENCLOSED,O
PROXY,O
PROMPTLY,O
.,O
,O
NO,O
POSTAGE,O
IS,O
REQUIRED,O
IF,O
MAILED,O
IN,O
THE,O
UNITED,I-LOCATION
STATES,I-LOCATION
.,O
,O
The,O
following,O
table,O
lists,O
the,O
dollar,O
range,O
of,O
equity,O
securities,O
beneficially,O
owned,O
by,O
each,O
Board,O
Member,O
nominee,O
in,O
each,O
Fund,O
and,O
in,O
all,O
Nuveen,I-BUSINESS
funds,O
overseen,O
by,O
the,O
Board,O
Member,O
nominee,O
as,O
of,O
December,O
31,O
",",O
2009,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
",",O
for,O
each,O
Board,O
Member,O
nominee,O
and,O
for,O
the,O
Board,O
Member,O
nominees,O
and,O
officers,O
as,O
a,O
group,O
",",O
the,O
amount,O
of,O
shares,O
beneficially,O
owned,O
in,O
each,O
Fund,O
as,O
of,O
December,O
31,O
",",O
2009,O
.,O
,O
The,O
information,O
as,O
to,O
beneficial,O
ownership,O
is,O
based,O
on,O
statements,O
furnished,O
by,O
each,O
Board,O
Member,O
nominee,O
and,O
officer,O
.,O
,O
The,O
following,O
chart,O
lists,O
each,O
shareholder,O
or,O
group,O
of,O
shareholders,O
who,O
beneficially,O
owned,O
more,O
than,O
5,O
%,O
of,O
any,O
class,O
of,O
shares,O
of,O
any,O
Fund,O
*,O
:,O
,O
There,O
shall,O
be,O
a,O
committee,O
of,O
each,O
Board,O
of,O
Directors/Trustees,O
(,O
the,O
Board,O
),O
of,O
the,O
Nuveen,I-BUSINESS
Management,I-BUSINESS
Investment,I-BUSINESS
Companies,I-BUSINESS
(,O
the,O
Funds,O
or,O
",",O
individually,O
",",O
a,O
Fund,O
),O
to,O
be,O
known,O
as,O
the,O
Audit,O
Committee,O
.,O
,O
The,O
Audit,O
Committee,O
shall,O
be,O
comprised,O
of,O
at,O
least,O
three,O
Directors/Trustees,O
.,O
,O
Audit,O
Committee,O
members,O
shall,O
be,O
independent,O
of,O
the,O
Funds,O
and,O
free,O
of,O
any,O
relationship,O
that,O
",",O
in,O
the,O
opinion,O
of,O
the,O
Directors/Trustees,O
",",O
would,O
interfere,O
with,O
their,O
exercise,O
of,O
independent,O
judgment,O
as,O
an,O
Audit,O
Committee,O
member,O
.,O
,O
In,O
particular,O
",",O
each,O
member,O
must,O
meet,O
the,O
independence,O
and,O
experience,O
requirements,O
applicable,O
to,O
the,O
Funds,O
of,O
the,O
exchanges,O
on,O
which,O
shares,O
of,O
the,O
Funds,O
are,O
listed,O
",",O
Section,O
10a,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
(,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
and,O
the,O
rules,O
and,O
regulations,O
of,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
the,O
Commission,O
),O
.,O
,O
Each,O
such,O
member,O
of,O
the,O
Audit,O
Committee,O
shall,O
have,O
a,O
basic,O
understanding,O
of,O
finance,O
and,O
accounting,O
",",O
be,O
able,O
to,O
read,O
and,O
understand,O
fundamental,O
financial,O
statements,O
",",O
and,O
be,O
financially,O
literate,O
",",O
and,O
at,O
least,O
one,O
such,O
member,O
shall,O
have,O
accounting,O
or,O
related,O
financial,O
management,O
expertise,O
",",O
in,O
each,O
case,O
as,O
determined,O
by,O
the,O
Directors/Trustees,O
",",O
exercising,O
their,O
business,O
judgment,O
(,O
this,O
person,O
may,O
also,O
serve,O
as,O
the,O
Audit,O
Committee,O
s,O
financial,O
expert,O
as,O
defined,O
by,O
the,O
Commission,O
),O
.,O
,O
The,O
Board,O
shall,O
appoint,O
the,O
members,O
and,O
the,O
Chairman,O
of,O
the,O
Audit,O
Committee,O
",",O
on,O
the,O
recommendation,O
of,O
the,O
Nominating,O
and,O
Governance,O
Committee,O
.,O
,O
The,O
Audit,O
Committee,O
shall,O
meet,O
periodically,O
but,O
in,O
any,O
event,O
no,O
less,O
frequently,O
than,O
on,O
a,O
semi-annual,O
basis,O
.,O
,O
Except,O
for,O
the,O
Funds,O
",",O
Audit,O
Committee,O
members,O
shall,O
not,O
serve,O
simultaneously,O
on,O
the,O
audit,O
committees,O
of,O
more,O
than,O
two,O
other,O
public,O
companies,O
.,O
,O
The,O
Audit,O
Committee,O
shall,O
assist,O
the,O
Board,O
in,O
oversight,O
and,O
monitoring,O
of,O
(,O
1,O
),O
the,O
accounting,O
and,O
reporting,O
policies,O
",",O
processes,O
and,O
practices,O
",",O
and,O
the,O
audits,O
of,O
the,O
financial,O
statements,O
",",O
of,O
the,O
Funds,O
;,O
(,O
2,O
),O
the,O
quality,O
and,O
integrity,O
of,O
the,O
financial,O
statements,O
of,O
the,O
Funds,O
;,O
(,O
3,O
),O
the,O
Funds,O
compliance,O
with,O
legal,O
and,O
regulatory,O
requirements,O
",",O
(,O
4,O
),O
the,O
independent,O
auditors,O
qualifications,O
",",O
performance,O
and,O
independence,O
;,O
and,O
(,O
5,O
),O
oversight,O
of,O
the,O
Pricing,O
Procedures,O
of,O
the,O
Funds,O
and,O
the,O
Valuation,O
Group,O
.,O
,O
In,O
exercising,O
this,O
oversight,O
",",O
the,O
Audit,O
Committee,O
can,O
request,O
other,O
committees,O
of,O
the,O
Board,O
to,O
assume,O
responsibility,O
for,O
some,O
of,O
the,O
monitoring,O
as,O
long,O
as,O
the,O
other,O
committees,O
are,O
composed,O
exclusively,O
of,O
independent,O
directors,O
.,O
,O
In,O
doing,O
so,O
",",O
the,O
Audit,O
Committee,O
shall,O
seek,O
to,O
maintain,O
free,O
and,O
open,O
means,O
of,O
communication,O
among,O
the,O
Directors/Trustees,O
",",O
the,O
independent,O
auditors,O
",",O
the,O
internal,O
auditors,O
and,O
the,O
management,O
of,O
the,O
Funds,O
.,O
,O
The,O
Audit,O
Committee,O
shall,O
meet,O
periodically,O
with,O
Fund,O
management,O
",",O
the,O
Funds,O
internal,O
auditor,O
",",O
and,O
the,O
Funds,O
independent,O
auditors,O
",",O
in,O
separate,O
executive,O
sessions,O
.,O
,O
The,O
Audit,O
Committee,O
shall,O
prepare,O
reports,O
of,O
the,O
Audit,O
Committee,O
as,O
required,O
by,O
the,O
Commission,O
to,O
be,O
included,O
in,O
the,O
Fund,O
s,O
annual,O
proxy,O
statements,O
or,O
otherwise,O
.,O
,O
The,O
Audit,O
Committee,O
shall,O
have,O
the,O
authority,O
and,O
resources,O
in,O
its,O
discretion,O
to,O
retain,O
special,O
legal,O
",",O
accounting,O
or,O
other,O
consultants,O
to,O
advise,O
the,O
Audit,O
Committee,O
and,O
to,O
otherwise,O
discharge,O
its,O
responsibilities,O
",",O
including,O
appropriate,O
funding,O
as,O
determined,O
by,O
the,O
Audit,O
Committee,O
for,O
compensation,O
to,O
independent,O
auditors,O
engaged,O
for,O
the,O
purpose,O
of,O
preparing,O
or,O
issuing,O
an,O
audit,O
report,O
or,O
performing,O
other,O
audit,O
",",O
review,O
or,O
attest,O
services,O
for,O
a,O
Fund,O
",",O
,O
compensation,O
to,O
advisers,O
employed,O
by,O
the,O
Audit,O
Committee,O
",",O
and,O
ordinary,O
administrative,O
expenses,O
of,O
the,O
Audit,O
Committee,O
that,O
are,O
necessary,O
or,O
appropriate,O
in,O
carrying,O
out,O
its,O
duties,O
",",O
as,O
determined,O
in,O
its,O
discretion,O
.,O
,O
The,O
Audit,O
Committee,O
may,O
request,O
any,O
officer,O
or,O
employee,O
of,O
Nuveen,I-BUSINESS
Investments,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
or,O
its,O
affiliates,O
),O
(,O
collectively,O
",",O
Nuveen,I-BUSINESS
),O
or,O
the,O
Funds,O
independent,O
auditors,O
or,O
outside,O
counsel,O
to,O
attend,O
a,O
meeting,O
of,O
the,O
Audit,O
Committee,O
or,O
to,O
meet,O
with,O
any,O
members,O
of,O
",",O
or,O
consultants,O
to,O
",",O
the,O
Audit,O
Committee,O
.,O
,O
The,O
Funds,O
independent,O
auditors,O
and,O
internal,O
auditors,O
shall,O
have,O
unrestricted,O
accessibility,O
at,O
any,O
time,O
to,O
Committee,O
members,O
.,O
,O
Fund,O
management,O
has,O
the,O
primary,O
responsibility,O
to,O
establish,O
and,O
maintain,O
systems,O
for,O
accounting,O
",",O
reporting,O
",",O
disclosure,O
and,O
internal,O
control,O
.,O
,O
The,O
independent,O
auditors,O
have,O
the,O
primary,O
responsibility,O
to,O
plan,O
and,O
implement,O
an,O
audit,O
",",O
with,O
proper,O
consideration,O
given,O
to,O
the,O
accounting,O
",",O
reporting,O
and,O
internal,O
controls,O
.,O
,O
Each,O
independent,O
auditor,O
engaged,O
for,O
the,O
purpose,O
of,O
preparing,O
or,O
issuing,O
an,O
audit,O
report,O
or,O
performing,O
other,O
audit,O
",",O
review,O
or,O
attest,O
services,O
for,O
the,O
Funds,O
shall,O
report,O
directly,O
to,O
the,O
Audit,O
Committee,O
.,O
,O
The,O
independent,O
auditors,O
are,O
ultimately,O
accountable,O
to,O
the,O
Board,O
and,O
the,O
Audit,O
Committee,O
.,O
,O
It,O
is,O
the,O
ultimate,O
responsibility,O
of,O
the,O
Audit,O
Committee,O
to,O
select,O
",",O
appoint,O
",",O
retain,O
",",O
evaluate,O
",",O
oversee,O
and,O
replace,O
any,O
independent,O
auditors,O
and,O
to,O
determine,O
their,O
compensation,O
",",O
subject,O
to,O
ratification,O
of,O
the,O
Board,O
",",O
if,O
required,O
.,O
,O
These,O
Audit,O
Committee,O
responsibilities,O
may,O
not,O
be,O
delegated,O
to,O
any,O
other,O
Committee,O
or,O
the,O
Board,O
.,O
,O
The,O
Audit,O
Committee,O
is,O
responsible,O
for,O
the,O
following,O
:,O
,O
With,O
respect,O
to,O
Fund,O
financial,O
statements,O
:,O
,O
With,O
respect,O
to,O
the,O
independent,O
auditors,O
:,O
,O
With,O
respect,O
to,O
any,O
internal,O
auditor,O
:,O
,O
With,O
respect,O
to,O
pricing,O
and,O
valuation,O
oversight,O
:,O
,O
Although,O
the,O
Audit,O
Committee,O
shall,O
have,O
the,O
authority,O
and,O
responsibilities,O
set,O
forth,O
in,O
this,O
Charter,O
",",O
it,O
is,O
not,O
the,O
responsibility,O
of,O
the,O
Audit,O
Committee,O
to,O
plan,O
or,O
conduct,O
audits,O
or,O
to,O
determine,O
that,O
the,O
Funds,O
financial,O
statements,O
are,O
complete,O
and,O
accurate,O
and,O
are,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
.,O
,O
That,O
is,O
the,O
responsibility,O
of,O
management,O
and,O
the,O
independent,O
auditors,O
.,O
,O
Nor,O
is,O
it,O
the,O
duty,O
of,O
the,O
Audit,O
Committee,O
to,O
conduct,O
investigations,O
",",O
to,O
resolve,O
disagreements,O
",",O
if,O
any,O
",",O
between,O
management,O
and,O
the,O
independent,O
auditors,O
or,O
to,O
ensure,O
compliance,O
with,O
laws,O
and,O
regulations,O
.,O
,O
The,O
Annual,O
Meeting,O
of,O
shareholders,O
will,O
be,O
held,O
Tuesday,O
",",O
April,O
6,O
",",O
2010,O
at,O
10:00,O
a.m.,O
,O
Central,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
in,O
the,O
31st,O
Floor,O
Conference,O
Room,O
of,O
Nuveen,I-BUSINESS
Investments,I-BUSINESS
",",O
333,O
West,I-LOCATION
Wacker,I-LOCATION
Drive,I-LOCATION
",",O
Chicago,I-LOCATION
",",O
Illinois,I-LOCATION
",",O
60606,O
.,O
,O
At,O
this,O
meeting,O
",",O
you,O
will,O
be,O
asked,O
to,O
vote,O
on,O
the,O
proposals,O
described,O
in,O
the,O
proxy,O
statement,O
attached,O
.,O
,O
The,O
undersigned,O
hereby,O
appoints,O
Kevin,I-PERSON
J.,I-PERSON
McCarthy,I-PERSON
and,O
Gifford,I-PERSON
R.,I-PERSON
Zimmerman,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
proxies,O
for,O
the,O
undersigned,O
",",O
to,O
represent,O
and,O
vote,O
the,O
shares,O
of,O
the,O
undersigned,O
at,O
the,O
Annual,O
Meeting,O
of,O
shareholders,O
to,O
be,O
held,O
on,O
April,O
6,O
",",O
2010,O
",",O
or,O
any,O
adjournment,O
or,O
adjournments,O
thereof,O
.,O
,O
WHETHER,O
OR,O
NOT,O
YOU,O
PLAN,O
TO,O
JOIN,O
US,O
AT,O
THE,O
MEETING,O
",",O
PLEASE,O
COMPLETE,O
",",O
DATE,O
AND,O
SIGN,O
YOUR,O
PROXY,O
CARD,O
AND,O
RETURN,O
IT,O
IN,O
THE,O
ENCLOSED,O
ENVELOPE,O
SO,O
THAT,O
YOUR,O
VOTE,O
WILL,O
BE,O
COUNTED,O
.,O
,O
AS,O
AN,O
ALTERNATIVE,O
",",O
PLEASE,O
CONSIDER,O
VOTING,O
BY,O
TELEPHONE,O
AT,O
(,O
888,O
),O
221-0697,O
OR,O
OVER,O
THE,O
INTERNET,I-MISCELLANEOUS
(,O
www.proxyweb.com,O
),O
.,O
,O
In,O
their,O
discretion,O
",",O
the,O
proxies,O
are,O
authorized,O
to,O
vote,O
upon,O
such,O
other,O
business,O
as,O
may,O
properly,O
come,O
before,O
the,O
Annual,O
Meeting,O
.,O
,O
Properly,O
executed,O
proxies,O
will,O
be,O
voted,O
as,O
specified,O
.,O
,O
If,O
no,O
specification,O
is,O
made,O
",",O
such,O
shares,O
will,O
be,O
voted,O
FOR,O
each,O
proposal,O
.,O
,O
-DOCSTART-,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
(,O
1,O
),O
has,O
filed,O
all,O
reports,O
required,O
by,O
Section,O
13,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
during,O
the,O
preceding,O
12,O
months,O
(,O
or,O
for,O
such,O
shorter,O
period,O
that,O
the,O
registrant,O
was,O
required,O
to,O
file,O
such,O
reports,O
),O
",",O
and,O
(,O
2,O
),O
has,O
been,O
subject,O
to,O
such,O
filing,O
requirements,O
for,O
the,O
past,O
90,O
day,O
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
large,O
accelerated,O
filer,O
",",O
an,O
accelerated,O
filer,O
",",O
a,O
non-accelerated,O
filer,O
",",O
or,O
a,O
smaller,O
reporting,O
company,O
.,O
,O
See,O
the,O
definitions,O
of,O
“,O
large,O
accelerated,O
filer,O
",",O
”,O
“,O
accelerated,O
filer,O
”,O
and,O
“,O
smaller,O
reporting,O
company,O
”,O
in,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
shell,O
company,O
(,O
as,O
defined,O
in,O
Rule,O
12b-2,O
of,O
the,O
Act,O
),O
.,O
,O
Indicate,O
the,O
number,O
of,O
shares,O
outstanding,O
of,O
each,O
of,O
the,O
registrant,O
’,O
s,O
classes,O
of,O
common,O
stock,O
",",O
as,O
of,O
the,O
latest,O
practicable,O
date,O
.,O
,O
The,O
accompanying,O
financial,O
statements,O
have,O
been,O
prepared,O
by,O
the,O
Company,O
without,O
audit,O
.,O
,O
In,O
the,O
opinion,O
of,O
management,O
",",O
all,O
adjustments,O
(,O
which,O
include,O
only,O
normal,O
recurring,O
adjustments,O
),O
necessary,O
to,O
present,O
fairly,O
the,O
financial,O
position,O
",",O
results,O
of,O
operations,O
",",O
and,O
cash,O
flows,O
at,O
March,O
31,O
",",O
2011,O
",",O
and,O
for,O
all,O
periods,O
presented,O
herein,O
",",O
have,O
been,O
made,O
.,O
,O
Certain,O
information,O
and,O
footnote,O
disclosures,O
normally,O
included,O
in,O
financial,O
statements,O
prepared,O
in,O
accordance,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
have,O
been,O
condensed,O
or,O
omitted,O
.,O
,O
It,O
is,O
suggested,O
that,O
these,O
condensed,O
financial,O
statements,O
be,O
read,O
in,O
conjunction,O
with,O
the,O
financial,O
statements,O
and,O
notes,O
thereto,O
included,O
in,O
the,O
Company,O
’,O
s,O
December,O
31,O
",",O
2010,O
audited,O
financial,O
statements,O
.,O
,O
The,O
results,O
of,O
operations,O
for,O
the,O
period,O
ended,O
March,O
31,O
",",O
2011,O
and,O
2010,O
are,O
not,O
necessarily,O
indicative,O
of,O
the,O
operating,O
results,O
for,O
the,O
full,O
year,O
.,O
,O
The,O
Company,O
’,O
s,O
financial,O
statements,O
are,O
prepared,O
using,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
applicable,O
to,O
a,O
going,O
concern,O
which,O
contemplates,O
the,O
realization,O
of,O
assets,O
and,O
liquidation,O
of,O
liabilities,O
in,O
the,O
normal,O
course,O
of,O
business,O
.,O
,O
The,O
Company,O
has,O
not,O
yet,O
established,O
an,O
ongoing,O
source,O
of,O
revenues,O
sufficient,O
to,O
cover,O
its,O
operating,O
costs,O
and,O
allow,O
it,O
to,O
continue,O
as,O
a,O
going,O
concern,O
.,O
,O
The,O
ability,O
of,O
the,O
Company,O
to,O
continue,O
as,O
a,O
going,O
concern,O
is,O
dependent,O
on,O
the,O
Company,O
obtaining,O
adequate,O
capital,O
to,O
fund,O
operating,O
losses,O
until,O
it,O
becomes,O
profitable,O
.,O
,O
If,O
the,O
Company,O
is,O
unable,O
to,O
obtain,O
adequate,O
capital,O
",",O
it,O
could,O
be,O
forced,O
to,O
cease,O
operations,O
.,O
,O
In,O
order,O
to,O
continue,O
as,O
a,O
going,O
concern,O
",",O
the,O
Company,O
will,O
need,O
",",O
among,O
other,O
things,O
",",O
additional,O
capital,O
resources,O
.,O
,O
Management,O
’,O
s,O
plan,O
is,O
to,O
obtain,O
such,O
resources,O
for,O
the,O
Company,O
by,O
obtaining,O
capital,O
from,O
management,O
and,O
significant,O
shareholders,O
sufficient,O
to,O
meet,O
its,O
minimal,O
operating,O
expenses,O
and,O
seeking,O
equity,O
and/or,O
debt,O
financing,O
.,O
,O
However,O
management,O
can,O
not,O
provide,O
any,O
assurances,O
that,O
the,O
Company,O
will,O
be,O
successful,O
in,O
accomplishing,O
any,O
of,O
its,O
plans,O
.,O
,O
The,O
ability,O
of,O
the,O
Company,O
to,O
continue,O
as,O
a,O
going,O
concern,O
is,O
dependent,O
upon,O
its,O
ability,O
to,O
successfully,O
accomplish,O
the,O
plans,O
described,O
in,O
the,O
preceding,O
paragraph,O
and,O
eventually,O
secure,O
other,O
sources,O
of,O
financing,O
and,O
attain,O
profitable,O
operations,O
.,O
,O
The,O
accompanying,O
financial,O
statements,O
do,O
not,O
include,O
any,O
adjustments,O
that,O
might,O
be,O
necessary,O
if,O
the,O
Company,O
is,O
unable,O
to,O
continue,O
as,O
a,O
going,O
concern,O
.,O
,O
The,O
preparation,O
of,O
financial,O
statements,O
in,O
conformity,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
requires,O
management,O
to,O
make,O
estimates,O
and,O
assumptions,O
that,O
affect,O
the,O
reported,O
amounts,O
of,O
assets,O
and,O
liabilities,O
at,O
the,O
date,O
of,O
the,O
financial,O
statements,O
and,O
the,O
reported,O
amounts,O
of,O
revenue,O
and,O
expenses,O
during,O
the,O
reporting,O
period,O
.,O
,O
Actual,O
results,O
could,O
differ,O
from,O
those,O
estimates,O
.,O
,O
NOTE,O
3,O
–,O
SIGNIFICANT,O
ACCOUNTING,O
POLICIES,O
(,O
CONTINUED,O
),O
,O
The,O
Company,O
has,O
evaluated,O
recent,O
accounting,O
pronouncements,O
and,O
their,O
adoption,O
has,O
not,O
had,O
or,O
is,O
not,O
expected,O
to,O
have,O
a,O
material,O
impact,O
on,O
the,O
Company,O
’,O
s,O
financial,O
position,O
or,O
statements,O
.,O
,O
The,O
Company,O
owes,O
related,O
parties,O
$,O
"31,809",O
at,O
March,O
31,O
",",O
2011,O
.,O
,O
The,O
payable,O
is,O
non-interest,O
bearing,O
",",O
unsecured,O
",",O
and,O
due,O
and,O
payable,O
upon,O
demand,O
.,O
,O
On,O
March,O
20,O
",",O
2011,O
",",O
the,O
company,O
issued,O
"545,455",O
shares,O
of,O
its,O
par,O
value,O
$,O
0.001,O
common,O
stock,O
at,O
$,O
0.55,O
per,O
share,O
for,O
$,O
"300,000",O
cash,O
.,O
,O
On,O
February,O
8,O
",",O
2011,O
",",O
the,O
Company,O
issued,O
"40,000",O
shares,O
of,O
common,O
stock,O
to,O
members,O
of,O
the,O
Board,O
of,O
Directors,O
for,O
their,O
services,O
valued,O
at,O
$,O
0.02,O
per,O
share,O
for,O
an,O
aggregate,O
value,O
of,O
$,O
800,O
.,O
,O
In,O
connection,O
with,O
a,O
consulting,O
agreement,O
with,O
a,O
related,O
party,O
dated,O
January,O
17,O
",",O
2011,O
",",O
the,O
Company,O
issued,O
"360,000",O
common,O
shares,O
of,O
stock,O
valued,O
at,O
$,O
"7,200",O
or,O
$,O
0.02,O
per,O
share,O
.,O
,O
The,O
value,O
of,O
the,O
stock,O
is,O
classified,O
as,O
a,O
prepaid,O
expense,O
and,O
is,O
being,O
amortized,O
over,O
the,O
12,O
month,O
term,O
of,O
the,O
consulting,O
agreement,O
.,O
,O
The,O
Company,O
entered,O
into,O
an,O
agreement,O
to,O
pay,O
two,O
of,O
its,O
officers,O
a,O
salary,O
of,O
$,O
"1,000",O
per,O
month,O
beginning,O
on,O
February1,O
",",O
2011,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
",",O
the,O
accrued,O
salaries,O
balance,O
was,O
$,O
"4,000",O
.,O
,O
In,O
January,O
",",O
2011,O
the,O
Company,O
entered,O
into,O
a,O
lease,O
agreement,O
with,O
",",O
a,O
related,O
party,O
to,O
lease,O
some,O
office,O
space,O
.,O
,O
The,O
term,O
of,O
the,O
lease,O
is,O
for,O
one,O
year,O
commencing,O
on,O
February,O
1,O
",",O
2011,O
.,O
,O
The,O
Company,O
agreed,O
to,O
make,O
monthly,O
lease,O
payments,O
of,O
$,O
400,O
per,O
month,O
on,O
or,O
before,O
the,O
5th,O
day,O
of,O
each,O
month,O
along,O
with,O
a,O
refundable,O
security,O
deposit,O
of,O
$,O
"1,200",O
.,O
,O
On,O
January,O
17,O
",",O
2011,O
",",O
the,O
Company,O
entered,O
into,O
a,O
consulting,O
agreement,O
with,O
a,O
related,O
party,O
to,O
act,O
as,O
a,O
consultant,O
in,O
the,O
areas,O
of,O
corporate,O
growth,O
",",O
acquisitions,O
",",O
accounting,O
",",O
business,O
affairs,O
",",O
business,O
operations,O
",",O
financial,O
and,O
public,O
company,O
compliance,O
for,O
a,O
period,O
of,O
twelve,O
months,O
commencing,O
January,O
1,O
",",O
2011,O
and,O
continuing,O
through,O
December,O
31,O
",",O
2011,O
.,O
,O
The,O
Company,O
agreed,O
to,O
pay,O
the,O
consultant,O
a,O
fee,O
$,O
"10,000",O
upon,O
signing,O
the,O
agreement,O
and,O
$,O
"10,000",O
per,O
month,O
for,O
consulting,O
services,O
during,O
the,O
term,O
of,O
the,O
agreement,O
and,O
a,O
minimum,O
of,O
$,O
"2,000",O
per,O
month,O
for,O
expenses,O
.,O
,O
The,O
Company,O
also,O
issued,O
the,O
consultant,O
"360,000",O
common,O
shares,O
as,O
compensation,O
for,O
services,O
to,O
be,O
preformed,O
over,O
the,O
course,O
of,O
the,O
current,O
year,O
.,O
,O
On,O
April,O
1,O
",",O
2011,O
",",O
the,O
Company,O
purchased,O
at,O
auction,O
certain,O
oil,O
and,O
gas,O
leases,O
in,O
Pratt,I-LOCATION
County,I-LOCATION
Kansas,B-LOCATION
for,O
$,O
"260,000",O
.,O
,O
Prior,O
to,O
the,O
auction,O
",",O
the,O
company,O
made,O
a,O
deposit,O
of,O
$,O
"52,000",O
on,O
the,O
oil,O
and,O
gas,O
leases,O
.,O
,O
The,O
Company,O
paid,O
the,O
$,O
"208,000",O
balance,O
",",O
less,O
certain,O
small,O
tax,O
allowances,O
",",O
on,O
April,O
13,O
",",O
2011,O
.,O
,O
NOTE,O
7,O
–,O
SUBSEQUENT,O
EVENTS,O
(,O
CONTINUED,O
),O
,O
In,O
accordance,O
with,O
ASC,I-LEGISLATION/ACT
855-10,O
",",O
the,O
Company,O
’,O
s,O
management,O
has,O
reviewed,O
all,O
material,O
events,O
and,O
there,O
are,O
no,O
additional,O
material,O
subsequent,O
events,O
to,O
report,O
.,O
,O
This,O
quarterly,O
report,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
contains,O
“,O
forward-looking,O
statements,O
”,O
relating,O
to,O
the,O
registrant,O
which,O
represent,O
the,O
registrant,O
’,O
s,O
current,O
expectations,O
or,O
beliefs,O
",",O
including,O
statements,O
concerning,O
registrant,O
’,O
s,O
operations,O
",",O
performance,O
",",O
financial,O
condition,O
and,O
growth,O
.,O
,O
For,O
this,O
purpose,O
",",O
any,O
statement,O
contained,O
in,O
this,O
quarterly,O
report,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
that,O
are,O
not,O
statements,O
of,O
historical,O
fact,O
are,O
forward-looking,O
statements,O
.,O
,O
Without,O
limiting,O
the,O
generality,O
of,O
the,O
foregoing,O
",",O
words,O
such,O
as,O
“,O
may,O
”,O
",",O
“,O
anticipation,O
”,O
",",O
“,O
intend,O
”,O
",",O
“,O
could,O
”,O
",",O
“,O
estimate,O
”,O
",",O
or,O
“,O
continue,O
”,O
or,O
the,O
negative,O
or,O
other,O
comparable,O
terminology,O
are,O
intended,O
to,O
identify,O
forward-looking,O
statements,O
.,O
,O
These,O
statements,O
by,O
their,O
nature,O
involve,O
substantial,O
risks,O
and,O
uncertainties,O
",",O
such,O
as,O
credit,O
losses,O
",",O
dependence,O
on,O
management,O
and,O
key,O
personnel,O
and,O
variability,O
of,O
quarterly,O
results,O
",",O
ability,O
of,O
registrant,O
to,O
continue,O
its,O
growth,O
strategy,O
and,O
competition,O
",",O
certain,O
of,O
which,O
are,O
beyond,O
the,O
registrant,O
’,O
s,O
control,O
.,O
,O
Should,O
one,O
or,O
more,O
of,O
these,O
risks,O
or,O
uncertainties,O
materialize,O
or,O
should,O
the,O
underlying,O
assumptions,O
prove,O
incorrect,O
",",O
actual,O
outcomes,O
and,O
results,O
could,O
differ,O
materially,O
from,O
those,O
indicated,O
in,O
the,O
forward-looking,O
statements,O
.,O
,O
The,O
following,O
discussion,O
and,O
analysis,O
should,O
be,O
read,O
in,O
conjunction,O
with,O
the,O
information,O
set,O
forth,O
in,O
the,O
Company,O
’,O
s,O
audited,O
financial,O
statements,O
for,O
the,O
period,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
We,O
are,O
in,O
the,O
business,O
of,O
precious,O
minerals,O
exploration,O
and,O
oil,O
and,O
gas,O
exploration,O
and,O
production,O
.,O
,O
On,O
March,O
31st,O
",",O
2011,O
Northumberland,I-BUSINESS
(,O
NHUR,I-BUSINESS
),O
was,O
a,O
successful,O
bidder,O
at,O
the,O
Evenson,I-MISCELLANEOUS
Oil,I-MISCELLANEOUS
Production,I-MISCELLANEOUS
Auction,I-MISCELLANEOUS
in,O
Wichita,I-LOCATION
",",O
Kansas,I-LOCATION
.,O
,O
NHUR,I-BUSINESS
acquired,O
the,O
Mason,I-MISCELLANEOUS
",",I-MISCELLANEOUS
Thompson,I-MISCELLANEOUS
",",I-MISCELLANEOUS
Keyes,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Harrell,I-MISCELLANEOUS
leases,O
inclusive,O
of,O
all,O
production,O
and,O
improvements,O
.,O
,O
The,O
leases,O
were,O
purchased,O
at,O
auction,O
from,O
REH,I-BUSINESS
Oil,I-BUSINESS
&,I-BUSINESS
Gas,I-BUSINESS
LLC,I-BUSINESS
.,O
,O
The,O
leases,O
of,O
280,O
acres,O
located,O
in,O
the,O
Sawyer,I-LOCATION
field,O
in,O
Pratt,I-LOCATION
County,I-LOCATION
Kansas,B-LOCATION
and,O
120,O
acres,O
located,O
in,O
the,O
Wildcat,I-LOCATION
field,O
",",O
filed,O
in,O
Pratt,I-LOCATION
County,I-LOCATION
Kansas,B-LOCATION
",",O
were,O
purchased,O
for,O
Two,O
Hundred,O
Sixty,O
Thousand,O
Dollars,O
.,O
,O
The,O
descriptions,O
of,O
such,O
leases,O
are,O
attached,O
as,O
an,O
Exhibit,O
to,O
our,O
Form,I-MISCELLANEOUS
8K,I-MISCELLANEOUS
filed,O
March,O
31,O
",",O
2011,O
.,O
,O
Management,O
anticipates,O
these,O
acquisitions,O
to,O
commence,O
cash,O
revenue,O
flow,O
to,O
start,O
May,O
1,O
",",O
2011,O
.,O
,O
No,O
cash,O
revenue,O
was,O
generated,O
in,O
the,O
comparative,O
2010,O
quarter,O
(,O
s,O
),O
.,O
,O
Management,O
believes,O
oil,O
and,O
gas,O
exploration,O
and,O
production,O
will,O
result,O
in,O
a,O
faster,O
analysis,O
and,O
potential,O
return,O
on,O
investment,O
to,O
NHUR,I-BUSINESS
shareholders,O
in,O
comparison,O
to,O
the,O
development,O
of,O
mineral,O
leases,O
held,O
by,O
the,O
company,O
in,O
2010,O
.,O
,O
Management,O
did,O
not,O
renew,O
four,O
mineral,O
claims,O
",",O
collectively,O
named,O
the,O
“,O
BARD,I-MISCELLANEOUS
1-4,I-MISCELLANEOUS
Property,I-MISCELLANEOUS
",",O
”,O
situated,O
in,O
the,O
Paymaster,I-LOCATION
Canyon,I-LOCATION
area,O
of,O
Esmeralda,I-LOCATION
County,I-LOCATION
in,O
west-central,O
Nevada,I-LOCATION
.,O
,O
We,O
do,O
not,O
have,O
any,O
current,O
plans,O
to,O
acquire,O
interests,O
in,O
additional,O
mineral,O
properties,O
",",O
though,O
we,O
may,O
consider,O
such,O
acquisitions,O
in,O
the,O
future,O
.,O
,O
There,O
was,O
no,O
assurance,O
that,O
a,O
commercially,O
viable,O
precious,O
minerals,O
deposit,O
existed,O
on,O
the,O
BARD,I-MISCELLANEOUS
1-4,I-MISCELLANEOUS
Property,I-MISCELLANEOUS
and,O
further,O
development,O
was,O
abandoned,O
.,O
,O
Our,O
plan,O
of,O
operations,O
is,O
to,O
further,O
develop,O
our,O
recent,O
oil,O
and,O
gas,O
acquisitions,O
in,O
Kansas,O
and,O
carry,O
out,O
further,O
exploration,O
and,O
acquisition,O
in,O
the,O
oil,O
and,O
gas,O
sectors,O
.,O
,O
We,O
did,O
not,O
generate,O
any,O
revenues,O
during,O
the,O
reporting,O
period,O
.,O
,O
We,O
incurred,O
operating,O
expenses,O
in,O
the,O
amount,O
of,O
$,O
"51,007",O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
compared,O
to,O
$,O
13,O
",",O
891,O
for,O
the,O
corresponding,O
period,O
in,O
2010,O
.,O
,O
The,O
2011,O
operating,O
expenses,O
consisted,O
primarily,O
of,O
$,O
40,O
",",O
955,O
in,O
professional,O
fees,O
.,O
,O
We,O
incurred,O
a,O
net,O
loss,O
from,O
operations,O
of,O
$,O
"51,007",O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
compared,O
to,O
a,O
net,O
loss,O
of,O
$,O
"13,891",O
during,O
the,O
corresponding,O
period,O
in,O
2010,O
.,O
,O
The,O
decrease,O
resulted,O
primarily,O
from,O
increased,O
professional,O
fees,O
incurred,O
during,O
2011,O
.,O
,O
Since,O
its,O
inception,O
",",O
the,O
Company,O
has,O
financed,O
its,O
cash,O
requirements,O
from,O
the,O
sale,O
of,O
common,O
stock,O
.,O
,O
Uses,O
of,O
funds,O
have,O
included,O
activities,O
to,O
establish,O
our,O
business,O
",",O
professional,O
fees,O
and,O
other,O
general,O
and,O
administrative,O
expenses,O
.,O
,O
The,O
Company,O
’,O
s,O
principal,O
sources,O
of,O
liquidity,O
as,O
of,O
March,O
31,O
",",O
2011,O
consisted,O
of,O
$,O
"246,588",O
in,O
cash,O
and,O
a,O
shareholder,O
loan,O
facility,O
from,O
a,O
director,O
and,O
principal,O
shareholder,O
.,O
,O
We,O
believe,O
the,O
Company,O
will,O
have,O
adequate,O
resources,O
to,O
implement,O
its,O
strategic,O
objectives,O
in,O
upcoming,O
quarters,O
.,O
,O
Due,O
to,O
our,O
lack,O
of,O
operating,O
history,O
and,O
present,O
inability,O
to,O
generate,O
revenues,O
",",O
however,O
",",O
our,O
auditors,O
have,O
stated,O
their,O
opinion,O
that,O
there,O
currently,O
exists,O
substantial,O
doubt,O
about,O
our,O
ability,O
to,O
continue,O
as,O
a,O
going,O
concern,O
.,O
,O
Our,O
operating,O
results,O
are,O
difficult,O
to,O
forecast,O
.,O
,O
Our,O
prospects,O
should,O
be,O
evaluated,O
in,O
light,O
of,O
the,O
risks,O
",",O
expenses,O
and,O
difficulties,O
commonly,O
encountered,O
by,O
comparable,O
exploration,O
stage,O
companies,O
.,O
,O
There,O
can,O
be,O
no,O
assurance,O
that,O
we,O
will,O
successfully,O
address,O
such,O
risks,O
",",O
expenses,O
and,O
difficulties,O
.,O
,O
QUANTITATIVE,O
AND,O
QUALITATIVE,O
DISCLOSURES,O
ABOUT,O
MARKET,O
RISK,O
.,O
,O
We,O
are,O
a,O
smaller,O
reporting,O
company,O
as,O
defined,O
by,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
are,O
not,O
required,O
to,O
provide,O
the,O
information,O
required,O
under,O
this,O
item,O
.,O
,O
As,O
of,O
the,O
end,O
of,O
the,O
period,O
covered,O
by,O
this,O
report,O
(,O
the,O
“,O
Evaluation,O
Date,O
”,O
),O
",",O
the,O
Company,O
carried,O
out,O
an,O
evaluation,O
",",O
under,O
the,O
supervision,O
and,O
with,O
the,O
participation,O
of,O
the,O
Company,O
’,O
s,O
Principal,O
Executive,O
Officer,O
and,O
Principal,O
Financial,O
Officer,O
(,O
the,O
“,O
Certifying,O
Officers,O
”,O
),O
of,O
the,O
effectiveness,O
of,O
the,O
design,O
and,O
operation,O
of,O
the,O
Company,O
’,O
s,O
disclosure,O
controls,O
and,O
procedures,O
(,O
as,O
defined,O
in,O
rules,O
13a-15,O
(,O
e,O
),O
and,O
15d-15,O
(,O
e,O
),O
),O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Based,O
on,O
that,O
evaluation,O
",",O
the,O
Certifying,O
Officers,O
have,O
concluded,O
that,O
",",O
as,O
of,O
the,O
Evaluation,O
Date,O
",",O
the,O
disclosure,O
controls,O
and,O
procedures,O
in,O
place,O
were,O
not,O
effective,O
to,O
ensure,O
that,O
information,O
required,O
to,O
be,O
disclosed,O
by,O
us,O
in,O
reports,O
that,O
we,O
file,O
or,O
submit,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
is,O
recorded,O
",",O
processed,O
",",O
summarized,O
and,O
reported,O
on,O
a,O
timely,O
basis,O
in,O
accordance,O
with,O
applicable,O
rules,O
and,O
regulations,O
.,O
,O
The,O
Certifying,O
Officers,O
reviewed,O
our,O
internal,O
control,O
over,O
financial,O
reporting,O
(,O
as,O
defined,O
in,O
rules,O
13a-15,O
(,O
f,O
),O
and,O
15d-15,O
(,O
f,O
),O
),O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
as,O
of,O
the,O
Evaluation,O
Date,O
and,O
concluded,O
that,O
no,O
changes,O
occurred,O
in,O
such,O
control,O
or,O
in,O
other,O
factors,O
during,O
the,O
quarter,O
ended,O
March,O
31,O
",",O
2011,O
that,O
have,O
materially,O
affected,O
",",O
or,O
are,O
reasonably,O
likely,O
to,O
materially,O
affect,O
",",O
our,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
There,O
is,O
no,O
litigation,O
pending,O
or,O
threatened,O
by,O
or,O
against,O
us,O
.,O
,O
We,O
are,O
a,O
smaller,O
reporting,O
company,O
as,O
defined,O
by,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
are,O
not,O
required,O
to,O
provide,O
the,O
information,O
required,O
under,O
this,O
item,O
.,O
,O
On,O
March,O
20,O
",",O
2011,O
the,O
Board,O
of,O
Directors,O
approved,O
a,O
private,O
offering,O
of,O
"2,000,000",O
shares,O
of,O
its,O
common,O
stock,O
",",O
with,O
an,O
offering,O
price,O
of,O
$,O
0.55,O
per,O
share,O
.,O
,O
The,O
proceeds,O
from,O
this,O
offering,O
shall,O
be,O
used,O
for,O
project,O
development,O
and,O
operating,O
expenses,O
.,O
,O
On,O
March,O
30,O
",",O
2011,O
the,O
company,O
received,O
$,O
"300,000",O
from,O
this,O
offering,O
and,O
issued,O
.,O
,O
The,O
Company,O
will,O
issue,O
"545,455",O
to,O
the,O
subscriber,O
.,O
,O
The,O
Company,O
has,O
no,O
senior,O
securities,O
outstanding,O
.,O
,O
During,O
the,O
quarter,O
ended,O
March,O
31,O
",",O
2011,O
",",O
no,O
matters,O
were,O
submitted,O
to,O
a,O
vote,O
of,O
the,O
Company,O
’,O
s,O
security,O
holders,O
",",O
through,O
the,O
solicitation,O
of,O
proxies,O
or,O
otherwise,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
registrant,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
.,O
,O
NORTHUMBERLAND,I-BUSINESS
RESOURCES,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
Fortunato,I-PERSON
Villamagna,I-PERSON
President,O
(,O
Principal,O
Executive,O
Officer,O
),O
,O
I,O
",",O
Fortunato,I-PERSON
Villamagna,I-PERSON
",",O
certify,O
that,O
:,O
,O
I,O
have,O
reviewed,O
this,O
quarterly,O
report,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
of,O
Northumberland,I-BUSINESS
Resources,I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
this,O
quarterly,O
report,O
does,O
not,O
contain,O
any,O
untrue,O
statement,O
of,O
a,O
material,O
fact,O
or,O
omit,O
to,O
date,O
a,O
material,O
fact,O
necessary,O
to,O
make,O
the,O
statements,O
made,O
",",O
in,O
light,O
of,O
the,O
circumstances,O
under,O
which,O
such,O
statements,O
were,O
made,O
",",O
not,O
misleading,O
with,O
respect,O
to,O
the,O
period,O
covered,O
by,O
this,O
quarterly,O
report,O
;,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
the,O
financial,O
statements,O
",",O
and,O
other,O
financial,O
information,O
included,O
in,O
this,O
quarterly,O
report,O
",",O
fairly,O
present,O
in,O
all,O
material,O
respects,O
the,O
financial,O
condition,O
",",O
results,O
of,O
operations,O
and,O
cash,O
flows,O
of,O
the,O
small,O
business,O
issuer,O
as,O
of,O
",",O
and,O
for,O
",",O
the,O
periods,O
presented,O
in,O
this,O
quarterly,O
report,O
;,O
,O
The,O
small,O
business,O
issuer,O
’,O
s,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
are,O
responsible,O
for,O
establishing,O
and,O
maintaining,O
disclosure,O
controls,O
and,O
procedures,O
(,O
as,O
defined,O
in,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
Rules,O
13a-15,O
(,O
e,O
),O
and,O
15d-15,O
(,O
3,O
),O
),O
and,O
internal,O
control,O
over,O
financial,O
reporting,O
(,O
as,O
defined,O
in,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
Rules,O
13a-15,O
(,O
f,O
),O
and,O
15d-15,O
(,O
f,O
),O
for,O
the,O
small,O
business,O
issuer,O
and,O
have,O
:,O
,O
The,O
small,O
business,O
issuer,O
’,O
s,O
other,O
certifying,O
officers,O
and,O
I,O
have,O
disclosed,O
",",O
based,O
on,O
our,O
most,O
recent,O
evaluation,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
to,O
the,O
small,O
business,O
issuer,O
’,O
s,O
auditors,O
and,O
the,O
audit,O
committee,O
of,O
the,O
small,O
business,O
issuer,O
’,O
s,O
board,O
of,O
directors,O
(,O
or,O
persons,O
performing,O
the,O
equivalent,O
functions,O
),O
:,O
,O
(,O
b,O
),O
any,O
fraud,O
",",O
whether,O
or,O
not,O
material,O
",",O
that,O
involves,O
management,O
or,O
other,O
employees,O
who,O
have,O
a,O
significant,O
role,O
in,O
the,O
small,O
business,O
issuer,O
’,O
s,O
internal,O
controls,O
and,O
procedures,O
for,O
financial,O
reporting,O
.,O
,O
I,O
",",O
Peter,I-PERSON
Hewitt,I-PERSON
",",O
certify,O
that,O
:,O
,O
I,O
have,O
reviewed,O
this,O
Quarterly,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
of,O
Northumberland,I-BUSINESS
Resources,I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
this,O
report,O
does,O
not,O
contain,O
any,O
untrue,O
statement,O
of,O
a,O
material,O
fact,O
or,O
omit,O
to,O
state,O
a,O
material,O
fact,O
necessary,O
to,O
make,O
the,O
statements,O
made,O
",",O
in,O
light,O
of,O
the,O
circumstances,O
under,O
which,O
such,O
statements,O
were,O
made,O
",",O
not,O
misleading,O
with,O
respect,O
to,O
the,O
period,O
covered,O
by,O
this,O
report,O
;,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
the,O
financial,O
statements,O
",",O
and,O
other,O
financial,O
information,O
included,O
in,O
this,O
report,O
",",O
fairly,O
present,O
in,O
all,O
material,O
respects,O
the,O
financial,O
condition,O
",",O
results,O
of,O
operations,O
and,O
cash,O
flows,O
of,O
the,O
registrant,O
as,O
of,O
",",O
and,O
for,O
",",O
the,O
periods,O
presented,O
in,O
the,O
report,O
;,O
,O
The,O
registrant,O
’,O
s,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
are,O
responsible,O
for,O
establishing,O
and,O
maintaining,O
disclosure,O
controls,O
and,O
procedures,O
(,O
as,O
defined,O
in,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
Rules,O
13a-15,O
(,O
e,O
),O
and,O
15d-15,O
(,O
e,O
),O
),O
and,O
internal,O
control,O
over,O
financial,O
reporting,O
(,O
as,O
defined,O
in,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
Rules,O
13a-15,O
(,O
f,O
),O
and,O
15,O
(,O
d,O
),O
-,O
15,O
(,O
f,O
),O
),O
for,O
the,O
registrant,O
and,O
have,O
:,O
,O
(,O
a,O
),O
Designed,O
such,O
disclosure,O
controls,O
and,O
procedures,O
",",O
or,O
caused,O
such,O
disclosure,O
controls,O
and,O
procedures,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
ensure,O
that,O
material,O
information,O
relating,O
to,O
the,O
registrant,O
",",O
including,O
its,O
consolidated,O
subsidiaries,O
",",O
is,O
made,O
known,O
to,O
us,O
by,O
others,O
within,O
those,O
entities,O
",",O
particularly,O
during,O
the,O
period,O
in,O
which,O
this,O
report,O
is,O
being,O
prepared,O
;,O
,O
(,O
b,O
),O
Designed,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
or,O
caused,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
provide,O
reasonable,O
assurance,O
regarding,O
the,O
reliability,O
of,O
financial,O
reporting,O
and,O
the,O
preparation,O
of,O
financial,O
statements,O
for,O
external,O
purposes,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
;,O
,O
The,O
registrant,O
’,O
s,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
have,O
disclosed,O
",",O
based,O
on,O
our,O
most,O
recent,O
evaluation,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
to,O
the,O
registrant,O
’,O
s,O
auditors,O
and,O
the,O
audit,O
committee,O
of,O
the,O
registrant,O
’,O
s,O
board,O
of,O
directors,O
(,O
or,O
persons,O
performing,O
the,O
equivalent,O
functions,O
),O
:,O
,O
(,O
b,O
),O
Any,O
fraud,O
",",O
whether,O
or,O
not,O
material,O
",",O
that,O
involves,O
management,O
or,O
other,O
employees,O
who,O
have,O
a,O
significant,O
role,O
in,O
the,O
registrant,O
’,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
(,O
Principal,O
Accounting,O
Officer,O
),O
,O
The,O
undersigned,O
hereby,O
certify,O
",",O
pursuant,O
to,O
18,O
U.S.C.,I-LEGISLATION/ACT
Section,O
1350,O
",",O
as,O
adopted,O
pursuant,O
to,O
Section,O
906,O
of,O
the,O
Sarbanes-Oxley,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
2002,I-LEGISLATION/ACT
",",O
that,O
",",O
to,O
their,O
knowledge,O
",",O
the,O
Quarterly,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
for,O
the,O
period,O
ended,O
March,O
31,O
",",O
2011,O
of,O
Northumberland,I-BUSINESS
Resources,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
“,O
Company,O
”,O
),O
fully,O
complies,O
with,O
the,O
requirements,O
of,O
Section,O
13,O
(,O
a,O
),O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
and,O
the,O
information,O
contained,O
in,O
such,O
periodic,O
report,O
fairly,O
presents,O
",",O
in,O
all,O
material,O
respects,O
",",O
the,O
financial,O
condition,O
and,O
results,O
of,O
operations,O
of,O
the,O
Company,O
as,O
of,O
",",O
and,O
for,O
",",O
the,O
periods,O
presented,O
in,O
such,O
report,O
.,O
,O
Very,O
truly,O
yours,O
",",O
,O
-DOCSTART-,O
,O
RUSSELL,I-BUSINESS
2000®,I-BUSINESS
2X,I-BUSINESS
STRATEGY,I-BUSINESS
FUND,I-BUSINESS
IMPORTANT,O
INFORMATION,O
ABOUT,O
THE,O
FUND,O
The,O
Russell,I-BUSINESS
2000®,I-BUSINESS
2x,I-BUSINESS
Strategy,I-BUSINESS
Fund,I-BUSINESS
(,O
the,O
``,O
Fund,O
'',O
),O
is,O
very,O
different,O
from,O
most,O
other,O
mutual,O
funds,O
in,O
that,O
it,O
seeks,O
daily,O
leveraged,O
investment,O
results,O
.,O
,O
As,O
a,O
result,O
",",O
the,O
Fund,O
may,O
be,O
riskier,O
than,O
alternatives,O
that,O
do,O
not,O
use,O
leverage,O
because,O
the,O
performance,O
of,O
an,O
investment,O
is,O
magnified,O
.,O
,O
The,O
effect,O
of,O
leverage,O
on,O
the,O
Fund,O
will,O
generally,O
cause,O
the,O
Fund,O
's,O
performance,O
to,O
not,O
match,O
the,O
performance,O
of,O
the,O
Fund,O
's,O
benchmark,O
(,O
as,O
defined,O
below,O
),O
over,O
a,O
period,O
of,O
time,O
greater,O
than,O
one,O
day,O
.,O
,O
This,O
means,O
that,O
the,O
return,O
of,O
the,O
Fund,O
for,O
a,O
period,O
of,O
longer,O
than,O
a,O
single,O
trading,O
day,O
will,O
be,O
the,O
result,O
of,O
each,O
day,O
's,O
compounded,O
returns,O
over,O
the,O
period,O
",",O
which,O
will,O
very,O
likely,O
differ,O
from,O
twice,O
the,O
return,O
of,O
the,O
Fund,O
's,O
underlying,O
index,O
(,O
as,O
defined,O
below,O
),O
for,O
that,O
period,O
.,O
,O
As,O
a,O
consequence,O
",",O
especially,O
in,O
periods,O
of,O
market,O
volatility,O
",",O
the,O
path,O
or,O
trend,O
of,O
the,O
benchmark,O
during,O
the,O
longer,O
period,O
may,O
be,O
at,O
least,O
as,O
important,O
to,O
the,O
Fund,O
's,O
cumulative,O
return,O
for,O
the,O
longer,O
period,O
as,O
the,O
cumulative,O
return,O
of,O
the,O
benchmark,O
for,O
the,O
relevant,O
longer,O
period,O
.,O
,O
Further,O
",",O
the,O
return,O
for,O
investors,O
who,O
invest,O
for,O
a,O
period,O
longer,O
than,O
a,O
single,O
trading,O
day,O
will,O
not,O
be,O
the,O
product,O
of,O
the,O
return,O
of,O
the,O
Fund,O
's,O
stated,O
investment,O
goal,O
(,O
e.g.,O
",",O
2x,O
),O
and,O
the,O
cumulative,O
performance,O
of,O
the,O
underlying,O
index,O
(,O
as,O
defined,O
below,O
),O
.,O
,O
The,O
Fund,O
is,O
not,O
suitable,O
for,O
all,O
investors,O
.,O
,O
The,O
Fund,O
should,O
be,O
utilized,O
only,O
by,O
investors,O
who,O
(,O
a,O
),O
understand,O
the,O
risks,O
associated,O
with,O
the,O
use,O
of,O
leverage,O
",",O
(,O
b,O
),O
understand,O
the,O
consequences,O
of,O
seeking,O
daily,O
leveraged,O
investment,O
results,O
",",O
and,O
(,O
c,O
),O
intend,O
to,O
actively,O
monitor,O
and,O
manage,O
their,O
investments,O
.,O
,O
Investors,O
who,O
do,O
not,O
meet,O
these,O
criteria,O
should,O
not,O
buy,O
shares,O
of,O
the,O
Fund,O
.,O
,O
An,O
investment,O
in,O
the,O
Fund,O
is,O
not,O
a,O
complete,O
investment,O
program,O
.,O
,O
INVESTMENT,O
OBJECTIVE,O
The,O
Fund,O
seeks,O
to,O
provide,O
investment,O
results,O
that,O
match,O
",",O
before,O
fees,O
and,O
expenses,O
",",O
the,O
performance,O
of,O
a,O
specific,O
benchmark,O
on,O
a,O
daily,O
basis,O
.,O
,O
The,O
Fund,O
's,O
current,O
benchmark,O
is,O
200,O
%,O
of,O
the,O
performance,O
of,O
the,O
Russell,I-MISCELLANEOUS
2000®,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
the,O
``,O
underlying,O
index,O
'',O
),O
.,O
,O
The,O
Fund,O
does,O
not,O
seek,O
to,O
achieve,O
its,O
investment,O
objective,O
over,O
a,O
period,O
of,O
time,O
greater,O
than,O
one,O
day,O
.,O
,O
FEES,O
AND,O
EXPENSES,O
OF,O
THE,O
FUND,O
This,O
table,O
describes,O
the,O
fees,O
and,O
expenses,O
that,O
you,O
may,O
pay,O
if,O
you,O
buy,O
and,O
hold,O
shares,O
of,O
the,O
Fund,O
.,O
,O
Owners,O
of,O
variable,O
annuity,O
and,O
insurance,O
contracts,O
that,O
invest,O
in,O
the,O
Fund,O
should,O
refer,O
to,O
the,O
variable,O
insurance,O
contract,O
prospectus,O
for,O
a,O
description,O
of,O
fees,O
and,O
expenses,O
since,O
the,O
``,O
Fund,O
Fees,O
and,O
Expenses,O
'',O
table,O
and,O
``,O
Example,O
'',O
information,O
does,O
not,O
reflect,O
deductions,O
at,O
the,O
separate,O
account,O
level,O
or,O
contract,O
level,O
for,O
any,O
charges,O
that,O
may,O
be,O
incurred,O
under,O
a,O
contract,O
.,O
,O
If,O
this,O
information,O
were,O
to,O
reflect,O
the,O
deduction,O
of,O
insurance,O
charges,O
",",O
fees,O
and,O
expenses,O
would,O
be,O
higher,O
.,O
,O
ANNUAL,O
FUND,O
OPERATING,O
EXPENSES,O
(,O
expenses,O
that,O
you,O
pay,O
each,O
year,O
as,O
a,O
percentage,O
of,O
the,O
value,O
of,O
your,O
investment,O
),O
,O
EXAMPLE,O
This,O
Example,O
is,O
intended,O
to,O
help,O
you,O
compare,O
the,O
cost,O
of,O
investing,O
in,O
the,O
Fund,O
with,O
the,O
cost,O
of,O
investing,O
in,O
other,O
mutual,O
funds,O
.,O
,O
The,O
Example,O
assumes,O
that,O
you,O
invest,O
$,O
"10,000",O
in,O
the,O
Fund,O
for,O
the,O
time,O
periods,O
indicated,O
",",O
and,O
then,O
redeem,O
all,O
of,O
your,O
shares,O
at,O
the,O
end,O
of,O
those,O
periods,O
.,O
,O
The,O
Example,O
also,O
assumes,O
that,O
your,O
investment,O
has,O
a,O
5,O
%,O
return,O
each,O
year,O
and,O
that,O
the,O
Fund,O
's,O
operating,O
expenses,O
remain,O
the,O
same,O
.,O
,O
Although,O
your,O
actual,O
costs,O
may,O
be,O
higher,O
or,O
lower,O
",",O
based,O
on,O
these,O
assumptions,O
your,O
costs,O
would,O
be,O
:,O
,O
PORTFOLIO,O
TURNOVER,O
The,O
Fund,O
pays,O
transaction,O
costs,O
",",O
such,O
as,O
commissions,O
",",O
when,O
it,O
buys,O
and,O
sells,O
securities,O
(,O
or,O
``,O
turns,O
over,O
'',O
its,O
portfolio,O
),O
.,O
,O
A,O
higher,O
portfolio,O
turnover,O
rate,O
may,O
indicate,O
higher,O
transaction,O
costs,O
and,O
may,O
result,O
in,O
higher,O
taxes,O
when,O
Fund,O
shares,O
are,O
held,O
in,O
a,O
taxable,O
account,O
.,O
,O
These,O
costs,O
",",O
which,O
are,O
not,O
reflected,O
in,O
Total,O
Annual,O
Fund,O
Operating,O
Expenses,O
or,O
in,O
the,O
Example,O
",",O
affect,O
the,O
Fund,O
's,O
performance,O
.,O
,O
During,O
the,O
most,O
recent,O
fiscal,O
year,O
",",O
the,O
Fund,O
's,O
portfolio,O
turnover,O
rate,O
was,O
100,O
%,O
of,O
the,O
average,O
value,O
of,O
its,O
portfolio,O
.,O
,O
However,O
",",O
the,O
Fund,O
's,O
portfolio,O
turnover,O
rate,O
is,O
calculated,O
without,O
regard,O
to,O
cash,O
instruments,O
or,O
derivatives,O
.,O
,O
If,O
such,O
instruments,O
were,O
included,O
",",O
the,O
Fund,O
's,O
portfolio,O
turnover,O
rate,O
might,O
be,O
significantly,O
higher,O
.,O
,O
PRINCIPAL,O
INVESTMENT,O
STRATEGIES,O
The,O
Fund,O
employs,O
as,O
its,O
investment,O
strategy,O
a,O
program,O
of,O
investing,O
in,O
the,O
common,O
stock,O
of,O
companies,O
that,O
are,O
generally,O
within,O
the,O
capitalization,O
range,O
of,O
the,O
underlying,O
index,O
and,O
derivative,O
instruments,O
",",O
which,O
primarily,O
consist,O
of,O
equity,O
index,O
swaps,O
",",O
futures,O
contracts,O
",",O
and,O
options,O
on,O
securities,O
",",O
futures,O
contracts,O
",",O
and,O
stock,O
indices,O
.,O
,O
Equity,O
index,O
swaps,O
and,O
futures,O
and,O
options,O
contracts,O
",",O
if,O
used,O
properly,O
",",O
may,O
enable,O
the,O
Fund,O
to,O
meet,O
its,O
objective,O
by,O
increasing,O
the,O
Fund,O
's,O
exposure,O
to,O
the,O
securities,O
included,O
in,O
the,O
underlying,O
index,O
or,O
in,O
the,O
same,O
proportion,O
that,O
those,O
securities,O
are,O
represented,O
in,O
the,O
underlying,O
index,O
.,O
,O
Under,O
normal,O
circumstances,O
",",O
the,O
Fund,O
will,O
invest,O
at,O
least,O
80,O
%,O
of,O
its,O
net,O
assets,O
",",O
plus,O
any,O
borrowings,O
for,O
investment,O
purposes,O
",",O
in,O
financial,O
instruments,O
with,O
economic,O
characteristics,O
that,O
should,O
perform,O
similarly,O
to,O
the,O
securities,O
of,O
companies,O
in,O
the,O
underlying,O
index,O
.,O
,O
Certain,O
of,O
the,O
Fund,O
's,O
derivative,O
investments,O
may,O
be,O
traded,O
in,O
the,O
over-the-counter,O
(,O
``,O
OTC,O
'',O
),O
market,O
.,O
,O
The,O
Russell,I-MISCELLANEOUS
2000®,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
composed,O
of,O
the,O
"2,000",O
smallest,O
companies,O
in,O
the,O
Russell,I-MISCELLANEOUS
3000®,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
representing,O
approximately,O
10,O
%,O
of,O
the,O
Russell,I-MISCELLANEOUS
3000®,I-MISCELLANEOUS
total,O
market,O
capitalization,O
and,O
consisting,O
of,O
capitalizations,O
ranging,O
from,O
$,O
24,O
million,O
to,O
$,O
5.3,O
billion,O
as,O
of,O
December,O
31,O
",",O
2010,O
.,O
,O
The,O
Russell,I-MISCELLANEOUS
3000®,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
composed,O
of,O
the,O
"3,000",O
largest,O
U.S.,I-LOCATION
companies,O
ranked,O
by,O
total,O
market,O
capitalization,O
",",O
representing,O
approximately,O
98,O
%,O
of,O
the,O
U.S.,I-LOCATION
investable,O
equity,O
market,O
.,O
,O
On,O
a,O
day-to-day,O
basis,O
",",O
the,O
Fund,O
may,O
hold,O
U.S.,I-LOCATION
Government,O
securities,O
or,O
cash,O
equivalents,O
to,O
collateralize,O
its,O
derivative,O
positions,O
.,O
,O
In,O
an,O
effort,O
to,O
ensure,O
that,O
the,O
Fund,O
is,O
fully,O
invested,O
on,O
a,O
day-to-day,O
basis,O
",",O
the,O
Fund,O
may,O
conduct,O
any,O
necessary,O
trading,O
activity,O
at,O
or,O
just,O
prior,O
to,O
the,O
close,O
of,O
the,O
U.S.,I-LOCATION
to,O
the,O
extent,O
the,O
Fund,O
's,O
underlying,O
index,O
is,O
concentrated,O
in,O
a,O
particular,O
industry,O
the,O
Fund,O
will,O
necessarily,O
be,O
concentrated,O
in,O
that,O
industry,O
.,O
,O
The,O
Fund,O
is,O
non-diversified,O
and,O
",",O
therefore,O
",",O
may,O
invest,O
a,O
greater,O
percentage,O
of,O
its,O
assets,O
in,O
a,O
particular,O
issuer,O
in,O
comparison,O
to,O
a,O
diversified,O
fund,O
.,O
,O
PRINCIPAL,O
RISKS,O
As,O
with,O
all,O
mutual,O
funds,O
",",O
a,O
shareholder,O
is,O
subject,O
to,O
the,O
risk,O
that,O
his,O
or,O
her,O
investment,O
could,O
lose,O
money,O
.,O
,O
In,O
addition,O
to,O
this,O
risk,O
",",O
the,O
Fund,O
is,O
subject,O
to,O
a,O
number,O
of,O
additional,O
risks,O
that,O
may,O
affect,O
the,O
value,O
of,O
its,O
shares,O
",",O
including,O
:,O
Active,O
Trading,O
Risk,O
Active,O
trading,O
",",O
also,O
called,O
``,O
high,O
portfolio,O
turnover,O
",",O
'',O
may,O
result,O
in,O
higher,O
brokerage,O
costs,O
or,O
mark-up,O
charges,O
",",O
which,O
may,O
negatively,O
affect,O
Fund,O
performance,O
and,O
result,O
in,O
short-term,O
capital,O
gains,O
",",O
which,O
have,O
a,O
negative,O
tax,O
effect,O
.,O
,O
Large,O
movements,O
of,O
assets,O
into,O
and,O
out,O
of,O
the,O
Fund,O
due,O
to,O
active,O
trading,O
also,O
may,O
adversely,O
affect,O
the,O
Fund,O
's,O
ability,O
to,O
achieve,O
its,O
investment,O
objective,O
.,O
,O
Correlation,O
and,O
Compounding,O
Risk,O
A,O
number,O
of,O
factors,O
may,O
affect,O
the,O
Fund,O
's,O
ability,O
to,O
achieve,O
a,O
high,O
degree,O
of,O
correlation,O
with,O
its,O
benchmark,O
",",O
and,O
there,O
can,O
be,O
no,O
guarantee,O
that,O
the,O
Fund,O
will,O
achieve,O
a,O
high,O
degree,O
of,O
correlation,O
.,O
,O
Failure,O
to,O
achieve,O
a,O
high,O
degree,O
of,O
correlation,O
may,O
prevent,O
the,O
Fund,O
from,O
achieving,O
its,O
investment,O
objective,O
.,O
,O
The,O
risk,O
of,O
the,O
Fund,O
not,O
achieving,O
its,O
daily,O
investment,O
objective,O
will,O
be,O
more,O
acute,O
when,O
the,O
underlying,O
index,O
has,O
an,O
extreme,O
one-day,O
movement,O
approaching,O
50,O
%,O
.,O
,O
In,O
addition,O
",",O
as,O
a,O
result,O
of,O
compounding,O
",",O
the,O
Fund,O
's,O
performance,O
for,O
periods,O
greater,O
than,O
one,O
day,O
is,O
likely,O
to,O
be,O
either,O
greater,O
than,O
or,O
less,O
than,O
the,O
performance,O
of,O
the,O
underlying,O
index,O
times,O
the,O
stated,O
multiple,O
in,O
the,O
Fund,O
's,O
investment,O
objective,O
",",O
before,O
accounting,O
for,O
fees,O
and,O
fund,O
expenses,O
.,O
,O
Compounding,O
affects,O
all,O
investments,O
",",O
but,O
has,O
a,O
more,O
significant,O
impact,O
on,O
a,O
leveraged,O
index,O
fund,O
.,O
,O
In,O
general,O
",",O
particularly,O
during,O
periods,O
of,O
higher,O
index,O
volatility,O
",",O
compounding,O
will,O
cause,O
longer-term,O
results,O
to,O
be,O
more,O
or,O
less,O
than,O
the,O
return,O
of,O
the,O
Fund,O
's,O
benchmark,O
.,O
,O
This,O
effect,O
becomes,O
more,O
pronounced,O
as,O
volatility,O
increases,O
.,O
,O
Fund,O
performance,O
for,O
periods,O
greater,O
than,O
one,O
day,O
can,O
be,O
estimated,O
given,O
any,O
set,O
of,O
assumptions,O
for,O
the,O
following,O
factors,O
:,O
(,O
a,O
),O
underlying,O
index,O
performance,O
;,O
(,O
b,O
),O
underlying,O
index,O
volatility,O
;,O
(,O
c,O
),O
financing,O
rates,O
associated,O
with,O
leverage,O
;,O
(,O
d,O
),O
other,O
Fund,O
expenses,O
;,O
(,O
e,O
),O
dividends,O
paid,O
by,O
companies,O
in,O
the,O
underlying,O
index,O
;,O
and,O
(,O
f,O
),O
period,O
of,O
time,O
.,O
,O
The,O
chart,O
below,O
illustrates,O
the,O
impact,O
of,O
two,O
principal,O
factors,O
—,O
volatility,O
and,O
index,O
performance,O
—,O
on,O
Fund,O
performance,O
.,O
,O
The,O
chart,O
shows,O
estimated,O
Fund,O
returns,O
for,O
a,O
number,O
of,O
combinations,O
of,O
performance,O
and,O
volatility,O
over,O
a,O
one-year,O
period,O
.,O
,O
companies,O
included,O
in,O
the,O
underlying,O
index,O
;,O
(,O
b,O
),O
no,O
Fund,O
expenses,O
;,O
and,O
(,O
c,O
),O
a,O
cost,O
of,O
leverage,O
of,O
zero,O
percent,O
.,O
,O
If,O
Fund,O
expenses,O
were,O
included,O
",",O
the,O
Fund,O
's,O
performance,O
would,O
be,O
lower,O
than,O
shown,O
.,O
,O
Areas,O
shaded,O
lighter,O
represent,O
those,O
scenarios,O
where,O
the,O
Fund,O
can,O
be,O
expected,O
to,O
return,O
more,O
than,O
twice,O
the,O
performance,O
of,O
the,O
underlying,O
index,O
;,O
conversely,O
",",O
areas,O
shaded,O
darker,O
represent,O
those,O
scenarios,O
where,O
the,O
Fund,O
can,O
be,O
expected,O
to,O
return,O
less,O
than,O
twice,O
the,O
performance,O
of,O
the,O
underlying,O
index,O
.,O
,O
The,O
underlying,O
index,O
's,O
annualized,O
historical,O
volatility,O
rate,O
for,O
the,O
five,O
year,O
period,O
ended,O
December,O
31,O
",",O
2010,O
is,O
31.52,O
%,O
.,O
,O
The,O
underlying,O
index,O
's,O
highest,O
one-year,O
volatility,O
rate,O
during,O
the,O
five,O
year,O
period,O
is,O
54.46,O
%,O
.,O
,O
The,O
underlying,O
index,O
's,O
annualized,O
performance,O
for,O
the,O
five,O
year,O
period,O
ended,O
December,O
31,O
",",O
2010,O
is,O
4.46,O
%,O
.,O
,O
Historical,O
underlying,O
index,O
volatility,O
and,O
performance,O
are,O
not,O
indications,O
of,O
what,O
the,O
underlying,O
index,O
volatility,O
and,O
performance,O
will,O
be,O
in,O
the,O
future,O
.,O
,O
Counterparty,O
Credit,O
Risk,O
The,O
Fund,O
may,O
make,O
investments,O
in,O
financial,O
instruments,O
involving,O
counterparties,O
that,O
attempt,O
to,O
gain,O
exposure,O
to,O
a,O
particular,O
group,O
of,O
securities,O
",",O
index,O
or,O
asset,O
class,O
without,O
actually,O
purchasing,O
those,O
securities,O
or,O
investments,O
",",O
or,O
to,O
hedge,O
a,O
position,O
.,O
,O
The,O
Fund,O
's,O
use,O
of,O
such,O
financial,O
instruments,O
",",O
including,O
swap,O
agreements,O
",",O
involves,O
risks,O
that,O
are,O
different,O
from,O
those,O
associated,O
with,O
ordinary,O
portfolio,O
securities,O
transactions,O
.,O
,O
For,O
example,O
",",O
if,O
a,O
swap,O
agreement,O
counterparty,O
defaults,O
on,O
its,O
payment,O
obligations,O
to,O
the,O
Fund,O
",",O
this,O
default,O
will,O
cause,O
the,O
value,O
of,O
your,O
investment,O
in,O
the,O
Fund,O
to,O
decrease,O
.,O
,O
Swap,O
agreements,O
also,O
may,O
be,O
considered,O
to,O
be,O
illiquid,O
.,O
,O
Derivatives,O
Risk,O
The,O
Fund,O
's,O
investments,O
in,O
derivatives,O
may,O
pose,O
risks,O
in,O
addition,O
to,O
those,O
associated,O
with,O
investing,O
directly,O
in,O
securities,O
or,O
other,O
investments,O
",",O
including,O
illiquidity,O
of,O
the,O
derivatives,O
",",O
imperfect,O
correlations,O
with,O
underlying,O
investments,O
or,O
the,O
Fund,O
's,O
other,O
portfolio,O
holdings,O
",",O
lack,O
of,O
availability,O
and,O
counterparty,O
risk,O
.,O
,O
Early,O
Closing,O
Risk,O
The,O
Fund,O
is,O
subject,O
to,O
the,O
risk,O
that,O
unanticipated,O
early,O
closings,O
of,O
securities,O
exchanges,O
and,O
other,O
financial,O
markets,O
may,O
result,O
in,O
the,O
Fund,O
's,O
inability,O
to,O
buy,O
or,O
sell,O
securities,O
or,O
other,O
financial,O
instruments,O
on,O
that,O
day,O
and,O
may,O
cause,O
the,O
Fund,O
to,O
incur,O
substantial,O
trading,O
losses,O
.,O
,O
Leveraging,O
Risk,O
The,O
Fund,O
achieves,O
leveraged,O
exposure,O
to,O
the,O
underlying,O
index,O
through,O
the,O
use,O
of,O
derivative,O
instruments,O
.,O
,O
The,O
Fund,O
's,O
investment,O
in,O
these,O
instruments,O
generally,O
requires,O
a,O
small,O
investment,O
relative,O
to,O
the,O
amount,O
of,O
investment,O
exposure,O
assumed,O
.,O
,O
As,O
a,O
result,O
",",O
such,O
investments,O
may,O
give,O
rise,O
to,O
losses,O
that,O
exceed,O
the,O
amount,O
invested,O
in,O
those,O
instruments,O
.,O
,O
The,O
more,O
the,O
Fund,O
invests,O
in,O
leveraged,O
instruments,O
",",O
the,O
more,O
this,O
leverage,O
will,O
magnify,O
any,O
losses,O
on,O
those,O
investments,O
.,O
,O
Since,O
the,O
Fund,O
's,O
investment,O
strategy,O
involves,O
consistently,O
applied,O
leverage,O
",",O
the,O
value,O
of,O
the,O
Fund,O
's,O
shares,O
will,O
tend,O
to,O
increase,O
or,O
decrease,O
more,O
than,O
the,O
value,O
of,O
any,O
increase,O
or,O
decrease,O
in,O
the,O
underlying,O
index,O
.,O
,O
Leverage,O
also,O
will,O
have,O
the,O
effect,O
of,O
magnifying,O
tracking,O
error,O
.,O
,O
Liquidity,O
Risk,O
In,O
certain,O
circumstances,O
",",O
it,O
may,O
be,O
difficult,O
for,O
the,O
Fund,O
to,O
purchase,O
and,O
sell,O
particular,O
investments,O
within,O
a,O
reasonable,O
time,O
at,O
a,O
fair,O
price,O
.,O
,O
In,O
addition,O
",",O
the,O
ability,O
of,O
the,O
Fund,O
to,O
assign,O
an,O
accurate,O
daily,O
value,O
to,O
certain,O
investments,O
may,O
be,O
difficult,O
",",O
and,O
the,O
Advisor,O
may,O
be,O
required,O
to,O
fair,O
value,O
the,O
investments,O
.,O
,O
Market,O
Risk,O
The,O
Fund,O
's,O
investments,O
in,O
securities,O
and,O
derivatives,O
",",O
in,O
general,O
",",O
are,O
subject,O
to,O
market,O
risks,O
that,O
may,O
cause,O
their,O
prices,O
",",O
and,O
therefore,O
the,O
Fund,O
's,O
value,O
",",O
to,O
fluctuate,O
over,O
time,O
.,O
,O
An,O
investment,O
in,O
the,O
Fund,O
may,O
lose,O
money,O
.,O
,O
Non-Diversification,O
Risk,O
The,O
Fund,O
is,O
considered,O
non-diversified,O
and,O
can,O
invest,O
a,O
greater,O
portion,O
of,O
its,O
assets,O
in,O
securities,O
of,O
individual,O
issuers,O
than,O
a,O
diversified,O
fund,O
.,O
,O
As,O
a,O
result,O
",",O
changes,O
in,O
the,O
market,O
value,O
of,O
a,O
single,O
security,O
could,O
cause,O
greater,O
fluctuations,O
in,O
the,O
value,O
of,O
Fund,O
shares,O
than,O
would,O
occur,O
in,O
a,O
diversified,O
fund,O
.,O
,O
OTC,O
Trading,O
Risk,O
Certain,O
of,O
the,O
derivatives,O
in,O
which,O
the,O
Fund,O
may,O
invest,O
may,O
be,O
traded,O
(,O
and,O
privately,O
negotiated,O
),O
in,O
the,O
OTC,O
market,O
.,O
,O
While,O
the,O
OTC,O
derivatives,O
market,O
is,O
the,O
primary,O
trading,O
venue,O
for,O
many,O
derivatives,O
",",O
it,O
is,O
largely,O
unregulated,O
.,O
,O
As,O
a,O
result,O
and,O
similar,O
to,O
other,O
privately,O
negotiated,O
contracts,O
",",O
the,O
Fund,O
is,O
subject,O
to,O
counterparty,O
credit,O
risk,O
with,O
respect,O
to,O
such,O
derivative,O
contracts,O
.,O
,O
Passive,O
Investment,O
Risk,O
The,O
Fund,O
is,O
not,O
actively,O
managed,O
and,O
the,O
Advisor,O
does,O
not,O
attempt,O
to,O
take,O
defensive,O
positions,O
in,O
declining,O
markets,O
.,O
,O
Therefore,O
",",O
the,O
Fund,O
may,O
be,O
subject,O
to,O
greater,O
losses,O
in,O
a,O
declining,O
market,O
than,O
a,O
fund,O
that,O
is,O
actively,O
managed,O
.,O
,O
Small-Capitalization,O
Securities,O
Risk,O
The,O
Fund,O
is,O
subject,O
to,O
the,O
risk,O
that,O
small-capitalization,O
stocks,O
may,O
underperform,O
other,O
segments,O
of,O
the,O
equity,O
market,O
or,O
the,O
equity,O
market,O
as,O
a,O
whole,O
.,O
,O
Tracking,O
Error,O
Risk,O
The,O
Advisor,O
may,O
not,O
be,O
able,O
to,O
cause,O
the,O
Fund,O
's,O
performance,O
to,O
match,O
that,O
of,O
the,O
Fund,O
's,O
benchmark,O
",",O
either,O
on,O
a,O
daily,O
or,O
aggregate,O
basis,O
.,O
,O
Factors,O
such,O
as,O
Fund,O
expenses,O
",",O
imperfect,O
correlation,O
between,O
the,O
Fund,O
's,O
investments,O
and,O
those,O
of,O
the,O
underlying,O
index,O
",",O
rounding,O
of,O
share,O
prices,O
",",O
changes,O
to,O
the,O
composition,O
of,O
the,O
underlying,O
index,O
",",O
regulatory,O
policies,O
",",O
high,O
portfolio,O
turnover,O
rate,O
and,O
the,O
use,O
of,O
leverage,O
all,O
contribute,O
to,O
tracking,O
error,O
.,O
,O
Tracking,O
error,O
may,O
cause,O
the,O
Fund,O
's,O
performance,O
to,O
be,O
less,O
than,O
you,O
expect,O
.,O
,O
Trading,O
Halt,O
Risk,O
If,O
a,O
trading,O
halt,O
occurs,O
",",O
the,O
Fund,O
may,O
temporarily,O
be,O
unable,O
to,O
purchase,O
or,O
sell,O
securities,O
",",O
options,O
or,O
futures,O
contracts,O
.,O
,O
Such,O
a,O
trading,O
halt,O
near,O
the,O
time,O
the,O
Fund,O
prices,O
its,O
shares,O
may,O
limit,O
the,O
Fund,O
's,O
ability,O
to,O
use,O
leverage,O
and,O
may,O
prevent,O
the,O
Fund,O
from,O
achieving,O
its,O
investment,O
objective,O
.,O
,O
PERFORMANCE,O
INFORMATION,O
The,O
following,O
bar,O
chart,O
shows,O
the,O
performance,O
of,O
the,O
shares,O
of,O
the,O
Fund,O
from,O
year,O
to,O
year,O
.,O
,O
The,O
variability,O
of,O
performance,O
over,O
time,O
provides,O
an,O
indication,O
of,O
the,O
risks,O
of,O
investing,O
in,O
the,O
Fund,O
.,O
,O
The,O
following,O
table,O
shows,O
the,O
performance,O
of,O
the,O
shares,O
of,O
the,O
Fund,O
as,O
an,O
average,O
over,O
different,O
periods,O
of,O
time,O
in,O
comparison,O
to,O
the,O
performance,O
of,O
a,O
broad-based,O
market,O
index,O
.,O
,O
The,O
figures,O
in,O
the,O
bar,O
chart,O
and,O
table,O
assume,O
the,O
reinvestment,O
of,O
dividends,O
and,O
capital,O
gains,O
distributions,O
.,O
,O
Of,O
course,O
",",O
this,O
past,O
performance,O
(,O
before,O
taxes,O
),O
does,O
not,O
necessarily,O
indicate,O
how,O
the,O
Fund,O
will,O
perform,O
in,O
the,O
future,O
.,O
,O
The,O
performance,O
information,O
shown,O
below,O
is,O
based,O
on,O
a,O
calendar,O
year,O
.,O
,O
AVERAGE,O
ANNUAL,O
TOTAL,O
RETURN,O
(,O
for,O
periods,O
ended,O
December,O
31,O
",",O
2010,O
),O
,O
MANAGEMENT,O
INVESTMENT,O
ADVISOR,O
Security,I-BUSINESS
Investors,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
which,O
operates,O
under,O
the,O
name,O
Security,I-BUSINESS
Global,I-BUSINESS
Investors,I-BUSINESS
",",O
serves,O
as,O
the,O
investment,O
adviser,O
of,O
the,O
Fund,O
.,O
,O
PORTFOLIO,O
MANAGERS,O
Michael,I-PERSON
P.,I-PERSON
Byrum,I-PERSON
",",O
CFA,O
",",O
Senior,O
Vice,O
President,O
.,O
,O
Byrum,I-PERSON
has,O
been,O
associated,O
with,O
Security,I-BUSINESS
Global,I-BUSINESS
Investors,I-BUSINESS
since,O
1993,O
.,O
,O
Michael,I-PERSON
J.,I-PERSON
Dellapa,I-PERSON
",",O
CFA,O
",",O
CAIA,O
",",O
Portfolio,O
Manager,O
.,O
,O
Dellapa,I-PERSON
has,O
been,O
associated,O
with,O
Security,I-BUSINESS
Global,I-BUSINESS
Investors,I-BUSINESS
since,O
2000,O
.,O
,O
Ryan,I-PERSON
A,I-PERSON
.,I-PERSON
Harder,I-PERSON
",",O
CFA,O
",",O
Portfolio,O
Manager,O
.,O
,O
Harder,I-PERSON
has,O
been,O
associated,O
with,O
Security,I-BUSINESS
Global,I-BUSINESS
Investors,I-BUSINESS
since,O
2004,O
.,O
,O
PURCHASE,O
AND,O
SALE,O
OF,O
FUND,O
SHARES,O
Shares,O
of,O
the,O
Fund,O
are,O
purchased,O
by,O
insurance,O
companies,O
for,O
their,O
separate,O
accounts,O
to,O
fund,O
variable,O
life,O
insurance,O
and,O
variable,O
annuity,O
contracts,O
.,O
,O
All,O
orders,O
for,O
the,O
purchase,O
of,O
shares,O
are,O
subject,O
to,O
acceptance,O
or,O
rejection,O
by,O
the,O
Trust,O
.,O
,O
An,O
insurance,O
company,O
purchases,O
and,O
redeems,O
shares,O
of,O
the,O
Fund,O
based,O
on,O
",",O
among,O
other,O
things,O
",",O
the,O
amount,O
of,O
net,O
contract,O
premiums,O
or,O
purchase,O
payments,O
allocated,O
to,O
a,O
separate,O
account,O
investment,O
division,O
",",O
transfers,O
to,O
or,O
from,O
a,O
separate,O
account,O
investment,O
division,O
",",O
contract,O
loans,O
and,O
repayment,O
",",O
contract,O
withdrawals,O
and,O
surrenders,O
",",O
and,O
benefit,O
payments,O
",",O
at,O
the,O
Fund,O
's,O
NAV,O
per,O
share,O
calculated,O
as,O
of,O
that,O
same,O
day,O
.,O
,O
All,O
redemption,O
requests,O
will,O
be,O
processed,O
and,O
payment,O
with,O
respect,O
thereto,O
will,O
be,O
made,O
within,O
seven,O
days,O
after,O
tender,O
.,O
,O
TAX,O
INFORMATION,O
The,O
tax,O
consequences,O
of,O
your,O
investment,O
in,O
the,O
Fund,O
depends,O
on,O
the,O
provisions,O
of,O
the,O
annuity,O
or,O
life,O
insurance,O
program,O
through,O
which,O
you,O
invest,O
.,O
,O
For,O
more,O
information,O
on,O
taxes,O
",",O
please,O
refer,O
to,O
the,O
accompanying,O
prospectus,O
of,O
the,O
annuity,O
or,O
life,O
insurance,O
program,O
through,O
which,O
Fund,O
shares,O
are,O
offered,O
.,O
,O
This,O
page,O
intentionally,O
left,O
blank,O
.,O
,O
-DOCSTART-,O
,O
Payment,O
of,O
Filing,O
Fee,O
(,O
Check,O
the,O
appropriate,O
box,O
),O
:,O
,O
To,O
the,O
Holders,O
of,O
Common,O
Stock,O
of,O
Comcam,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
This,O
Information,O
Statement,O
has,O
been,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
and,O
is,O
being,O
furnished,O
",",O
pursuant,O
to,O
Section,O
14C,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
“,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
”,O
),O
",",O
to,O
the,O
holders,O
(,O
the,O
“,O
Stockholders,O
”,O
),O
of,O
the,O
common,O
stock,O
",",O
par,O
value,O
$,O
.0001,O
per,O
share,O
(,O
the,O
“,O
Common,O
Stock,O
”,O
),O
",",O
of,O
Comcam,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
Corporation,O
(,O
the,O
“,O
Company,O
”,O
),O
",",O
to,O
notify,O
such,O
Stockholders,O
that,O
on,O
or,O
about,O
March,O
5,O
",",O
2010,O
",",O
the,O
Company,O
received,O
written,O
consents,O
in,O
lieu,O
of,O
a,O
meeting,O
of,O
Stockholders,O
from,O
holders,O
of,O
"683,952,500",O
shares,O
representing,O
approximately,O
91,O
%,O
of,O
the,O
"744,640,134",O
shares,O
of,O
the,O
total,O
issued,O
and,O
outstanding,O
shares,O
of,O
voting,O
stock,O
of,O
the,O
Company,O
(,O
the,O
“,O
Majority,O
Stockholders,O
”,O
),O
to,O
authorize,O
1-for-85,O
reverse,O
stock,O
split,O
(,O
pro-rata,O
reduction,O
of,O
outstanding,O
shares,O
),O
of,O
our,O
issued,O
and,O
outstanding,O
shares,O
of,O
Common,O
Stock,O
(,O
the,O
“,O
Reverse,O
Stock,O
Split,O
”,O
),O
.,O
,O
There,O
will,O
not,O
be,O
an,O
increase,O
or,O
decrease,O
in,O
authorized,O
shares,O
nor,O
will,O
it,O
affect,O
the,O
par,O
value,O
per,O
share,O
of,O
the,O
Company,O
common,O
stock,O
.,O
,O
On,O
March,O
5,O
",",O
2010,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Company,O
approved,O
the,O
Reverse,O
Stock,O
Split,O
",",O
subject,O
to,O
Stockholder,O
approval,O
.,O
,O
The,O
Majority,O
Stockholders,O
approved,O
the,O
Reverse,O
Stock,O
Split,O
by,O
written,O
consent,O
in,O
lieu,O
of,O
a,O
meeting,O
on,O
March,O
5,O
",",O
2010,O
in,O
accordance,O
with,O
the,O
Delaware,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
“,O
DCGL,I-LEGISLATION/ACT
”,O
),O
.,O
,O
Accordingly,O
",",O
your,O
consent,O
is,O
not,O
required,O
and,O
is,O
not,O
being,O
solicited,O
in,O
connection,O
with,O
the,O
approval,O
of,O
these,O
actions,O
.,O
,O
On,O
March,O
5,O
",",O
2010,O
",",O
the,O
Board,O
of,O
Directors,O
and,O
persons,O
owning,O
a,O
majority,O
of,O
the,O
outstanding,O
voting,O
securities,O
of,O
Comcam,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
approved,O
and,O
adopted,O
resolutions,O
authorizing,O
the,O
Company,O
to,O
change,O
its,O
name,O
to,O
Monkey,I-BUSINESS
Rock,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
no,O
other,O
votes,O
are,O
required,O
or,O
necessary,O
(,O
the,O
“,O
Name,O
Change,O
”,O
),O
.,O
,O
The,O
Name,O
Change,O
will,O
become,O
effective,O
20,O
days,O
following,O
the,O
mailing,O
sent,O
to,O
stockholders,O
of,O
this,O
notice,O
provided,O
by,O
this,O
Definitive,O
Information,O
Statement,O
",",O
or,O
as,O
soon,O
thereafter,O
as,O
is,O
practicable,O
.,O
,O
We,O
will,O
first,O
mail,O
this,O
Information,O
Statement,O
to,O
stockholders,O
on,O
or,O
about,O
March,O
15,O
",",O
2010,O
.,O
,O
The,O
Board,O
of,O
Directors,O
of,O
the,O
Company,O
(,O
the,O
``,O
Board,O
'',O
),O
believes,O
that,O
the,O
stockholders,O
of,O
the,O
Company,O
will,O
benefit,O
from,O
the,O
Reverse,O
Stock,O
Split,O
because,O
it,O
will,O
attract,O
potential,O
investment,O
from,O
outside,O
investors,O
which,O
will,O
create,O
a,O
more,O
liquid,O
public,O
market,O
for,O
its,O
common,O
stock,O
.,O
,O
In,O
order,O
to,O
facilitate,O
such,O
transaction,O
",",O
the,O
Board,O
has,O
determined,O
that,O
the,O
capitalization,O
structure,O
of,O
the,O
Company,O
should,O
be,O
simplified,O
.,O
,O
No,O
assurances,O
can,O
be,O
given,O
that,O
such,O
investors,O
will,O
be,O
found,O
.,O
,O
Accordingly,O
",",O
it,O
was,O
the,O
Board,O
's,O
opinion,O
that,O
the,O
restructuring,O
transactions,O
described,O
above,O
would,O
better,O
position,O
the,O
Company,O
to,O
attract,O
potential,O
business,O
candidates,O
and,O
provide,O
the,O
stockholders,O
of,O
the,O
Company,O
with,O
the,O
greatest,O
potential,O
return,O
.,O
,O
The,O
Board,O
approved,O
the,O
above,O
actions,O
on,O
March,O
5,O
",",O
2010,O
and,O
stockholders,O
holding,O
a,O
voting,O
majority,O
of,O
the,O
outstanding,O
voting,O
capital,O
stock,O
of,O
the,O
Company,O
approved,O
the,O
above,O
actions,O
on,O
March,O
5,O
",",O
2010,O
.,O
,O
This,O
Information,O
Statement,O
contains,O
a,O
brief,O
summary,O
of,O
the,O
material,O
aspects,O
of,O
the,O
actions,O
approved,O
by,O
the,O
Board,O
and,O
the,O
holders,O
of,O
the,O
majority,O
of,O
the,O
outstanding,O
voting,O
capital,O
stock,O
of,O
the,O
Company,O
.,O
,O
The,O
Board,O
approved,O
a,O
resolution,O
to,O
effect,O
a,O
1-for-85,O
reverse,O
stock,O
split,O
.,O
,O
Under,O
this,O
reverse,O
stock,O
split,O
each,O
85,O
shares,O
of,O
our,O
Common,O
Stock,O
will,O
be,O
converted,O
automatically,O
into,O
1,O
share,O
of,O
Common,O
Stock,O
.,O
,O
To,O
avoid,O
the,O
issuance,O
of,O
fractional,O
shares,O
of,O
Company,O
Common,O
Stock,O
",",O
the,O
Company,O
will,O
issue,O
an,O
additional,O
share,O
to,O
all,O
holders,O
of,O
fractional,O
shares,O
.,O
,O
The,O
Company,O
anticipates,O
that,O
the,O
effective,O
date,O
of,O
the,O
reverse,O
stock,O
split,O
will,O
be,O
April,O
5,O
",",O
2010,O
.,O
,O
PLEASE,O
NOTE,O
THAT,O
THE,O
REVERSE,O
STOCK,O
SPLIT,O
WILL,O
NOT,O
CHANGE,O
YOUR,O
PROPORTIONATE,O
EQUITY,O
INTERESTS,O
IN,O
THE,O
COMPANY,O
",",O
EXCEPT,O
AS,O
MAY,O
RESULT,O
FROM,O
THE,O
ISSUANCE,O
OR,O
CANCELLATION,O
OF,O
SHARES,O
PURSUANT,O
TO,O
THE,O
FRACTIONAL,O
SHARES,O
.,O
,O
PLEASE,O
NOTE,O
THAT,O
THE,O
REVERSE,O
SPLIT,O
WILL,O
HAVE,O
THE,O
EFFECT,O
OF,O
SUBSTANTIALLY,O
INCREASING,O
THE,O
NUMBER,O
OF,O
SHARES,O
THE,O
COMPANY,O
WILL,O
BE,O
ABLE,O
TO,O
ISSUE,O
TO,O
NEW,O
OR,O
EXISTING,O
SHAREHOLDERS,O
BECAUSE,O
THE,O
NUMBER,O
OF,O
AUTHORIZED,O
SHARES,O
AND,O
THE,O
PAR,O
VALUE,O
PER,O
SHARE,O
OF,O
COMMON,O
STOCK,O
WILL,O
REMAIN,O
THE,O
SAME,O
WHILE,O
THE,O
NUMBER,O
OF,O
SHARES,O
ISSUED,O
AND,O
OUTSTANDING,O
WILL,O
BE,O
REDUCED,O
TEN-FOLD,O
.,O
,O
The,O
Board,O
of,O
Directors,O
believe,O
that,O
",",O
among,O
other,O
reasons,O
",",O
the,O
number,O
of,O
outstanding,O
shares,O
of,O
our,O
Common,O
Stock,O
have,O
contributed,O
to,O
a,O
lack,O
of,O
investor,O
interest,O
in,O
the,O
Company,O
and,O
has,O
made,O
it,O
difficult,O
to,O
attract,O
new,O
investors,O
and,O
potential,O
business,O
candidates,O
.,O
,O
The,O
Board,O
of,O
Directors,O
has,O
proposed,O
the,O
Reverse,O
Stock,O
Split,O
as,O
one,O
method,O
to,O
attract,O
business,O
opportunities,O
in,O
the,O
Company,O
.,O
,O
When,O
a,O
company,O
engages,O
in,O
a,O
reverse,O
stock,O
split,O
",",O
it,O
substitutes,O
one,O
share,O
of,O
stock,O
for,O
a,O
predetermined,O
amount,O
of,O
shares,O
of,O
stock,O
.,O
,O
It,O
does,O
not,O
increase,O
the,O
market,O
capitalization,O
of,O
the,O
company,O
.,O
,O
An,O
example,O
of,O
a,O
reverse,O
split,O
is,O
the,O
following,O
.,O
,O
A,O
company,O
has,O
"10,000,000",O
shares,O
of,O
common,O
stock,O
outstanding,O
.,O
,O
Assume,O
the,O
market,O
price,O
is,O
$,O
.01,O
per,O
share,O
.,O
,O
Assume,O
that,O
the,O
company,O
declares,O
a,O
1,O
for,O
5,O
reverse,O
stock,O
split,O
.,O
,O
After,O
the,O
reverse,O
split,O
",",O
that,O
company,O
will,O
have,O
1/5,O
as,O
many,O
shares,O
outstanding,O
or,O
"2,000,000",O
shares,O
outstanding,O
.,O
,O
The,O
stock,O
will,O
have,O
a,O
market,O
price,O
of,O
$,O
0.05,O
.,O
,O
If,O
an,O
individual,O
investor,O
owned,O
"10,000",O
shares,O
of,O
that,O
company,O
before,O
the,O
split,O
at,O
$,O
.01,O
per,O
share,O
",",O
he,O
will,O
own,O
"2,000",O
shares,O
at,O
$,O
.05,O
after,O
the,O
split,O
.,O
,O
In,O
either,O
case,O
",",O
his,O
stock,O
will,O
be,O
worth,O
$,O
100,O
.,O
,O
He,O
is,O
no,O
better,O
off,O
before,O
or,O
after,O
.,O
,O
Except,O
that,O
such,O
company,O
hopes,O
that,O
the,O
higher,O
stock,O
price,O
will,O
make,O
that,O
company,O
look,O
better,O
and,O
thus,O
the,O
company,O
will,O
be,O
a,O
more,O
attractive,O
merger,O
target,O
for,O
potential,O
business,O
.,O
,O
There,O
is,O
no,O
assurance,O
that,O
that,O
company,O
's,O
stock,O
will,O
rise,O
in,O
price,O
after,O
a,O
reverse,O
split,O
or,O
that,O
a,O
suitable,O
merger,O
candidate,O
will,O
emerge,O
.,O
,O
We,O
believe,O
that,O
the,O
reverse,O
stock,O
split,O
may,O
improve,O
the,O
price,O
level,O
of,O
our,O
Common,O
Stock,O
and,O
that,O
the,O
higher,O
share,O
price,O
could,O
help,O
generate,O
interest,O
in,O
the,O
Company,O
among,O
investors,O
and,O
other,O
business,O
opportunities,O
.,O
,O
However,O
",",O
the,O
effect,O
of,O
the,O
reverse,O
split,O
upon,O
the,O
market,O
price,O
for,O
our,O
Common,O
Stock,O
can,O
not,O
be,O
predicted,O
",",O
and,O
the,O
history,O
of,O
similar,O
stock,O
split,O
combinations,O
for,O
companies,O
in,O
like,O
circumstances,O
is,O
varied,O
.,O
,O
There,O
can,O
be,O
no,O
assurance,O
that,O
the,O
market,O
price,O
per,O
share,O
of,O
our,O
Common,O
Stock,O
after,O
the,O
reverse,O
split,O
will,O
rise,O
in,O
proportion,O
to,O
the,O
reduction,O
in,O
the,O
number,O
of,O
shares,O
of,O
Common,O
Stock,O
outstanding,O
resulting,O
from,O
the,O
reverse,O
split,O
.,O
,O
The,O
market,O
price,O
of,O
our,O
Common,O
Stock,O
may,O
also,O
be,O
based,O
on,O
our,O
performance,O
and,O
other,O
factors,O
",",O
some,O
of,O
which,O
may,O
be,O
unrelated,O
to,O
the,O
number,O
of,O
shares,O
outstanding,O
.,O
,O
The,O
reverse,O
split,O
will,O
affect,O
all,O
of,O
our,O
stockholders,O
uniformly,O
and,O
will,O
not,O
affect,O
any,O
stockholder,O
's,O
percentage,O
ownership,O
interests,O
in,O
the,O
Company,O
or,O
proportionate,O
voting,O
power,O
",",O
except,O
to,O
the,O
extent,O
that,O
the,O
reverse,O
split,O
results,O
in,O
any,O
of,O
our,O
stockholders,O
owning,O
a,O
fractional,O
share,O
.,O
,O
All,O
stockholders,O
holding,O
a,O
fractional,O
share,O
shall,O
be,O
issued,O
an,O
additional,O
share,O
.,O
,O
The,O
principal,O
effect,O
of,O
the,O
reverse,O
split,O
will,O
be,O
that,O
the,O
number,O
of,O
shares,O
of,O
Common,O
Stock,O
issued,O
and,O
outstanding,O
will,O
be,O
reduced,O
from,O
"744,640,134",O
shares,O
as,O
of,O
March,O
5,O
",",O
2010,O
to,O
approximately,O
"8,760,472",O
shares,O
(,O
depending,O
on,O
the,O
number,O
of,O
fractional,O
shares,O
that,O
are,O
issued,O
or,O
cancelled,O
),O
.,O
,O
The,O
number,O
of,O
authorized,O
shares,O
and,O
the,O
par,O
value,O
of,O
Common,O
Stock,O
will,O
not,O
be,O
affected,O
.,O
,O
The,O
following,O
chart,O
depicts,O
the,O
capitalization,O
structure,O
of,O
the,O
Company,O
",",O
both,O
",",O
pre-,O
and,O
post-split,O
(,O
the,O
post-split,O
issued,O
shares,O
may,O
differ,O
slightly,O
based,O
on,O
the,O
number,O
of,O
fractional,O
shares,O
),O
:,O
,O
The,O
reverse,O
split,O
will,O
not,O
affect,O
the,O
par,O
value,O
of,O
our,O
Common,O
Stock,O
.,O
,O
As,O
a,O
result,O
",",O
on,O
the,O
effective,O
date,O
of,O
the,O
reverse,O
split,O
",",O
the,O
stated,O
capital,O
on,O
our,O
balance,O
sheet,O
attributable,O
to,O
our,O
Common,O
Stock,O
will,O
be,O
reduced,O
to,O
less,O
than,O
the,O
present,O
amount,O
",",O
and,O
the,O
additional,O
paid-in,O
capital,O
account,O
shall,O
be,O
credited,O
with,O
the,O
amount,O
by,O
which,O
the,O
stated,O
capital,O
is,O
reduced,O
.,O
,O
The,O
per,O
share,O
net,O
income,O
or,O
loss,O
and,O
net,O
book,O
value,O
of,O
our,O
Common,O
Stock,O
will,O
be,O
increased,O
because,O
there,O
will,O
be,O
fewer,O
shares,O
of,O
our,O
Common,O
Stock,O
outstanding,O
.,O
,O
The,O
reverse,O
split,O
will,O
not,O
change,O
the,O
proportionate,O
equity,O
interests,O
of,O
our,O
stockholders,O
",",O
nor,O
will,O
the,O
respective,O
voting,O
rights,O
and,O
other,O
rights,O
of,O
stockholders,O
be,O
altered,O
",",O
except,O
for,O
possible,O
immaterial,O
changes,O
.,O
,O
The,O
Common,O
Stock,O
issued,O
pursuant,O
to,O
the,O
reverse,O
split,O
will,O
remain,O
fully,O
paid,O
and,O
non-assessable,O
.,O
,O
The,O
reverse,O
split,O
is,O
not,O
intended,O
as,O
",",O
and,O
will,O
not,O
have,O
the,O
effect,O
of,O
",",O
a,O
``,O
going,O
private,O
transaction,O
'',O
covered,O
by,O
Rule,O
13e-3,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
.,O
,O
We,O
will,O
continue,O
to,O
be,O
subject,O
to,O
the,O
periodic,O
reporting,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
.,O
,O
Stockholders,O
should,O
recognize,O
that,O
they,O
will,O
own,O
a,O
fewer,O
number,O
of,O
shares,O
than,O
they,O
presently,O
own,O
(,O
a,O
number,O
equal,O
to,O
the,O
number,O
of,O
shares,O
owned,O
immediately,O
prior,O
to,O
the,O
filing,O
of,O
the,O
certificate,O
of,O
amendment,O
divided,O
by,O
ten,O
),O
.,O
,O
While,O
we,O
expect,O
that,O
the,O
reverse,O
split,O
will,O
result,O
in,O
an,O
increase,O
in,O
the,O
potential,O
market,O
price,O
of,O
our,O
Common,O
Stock,O
",",O
there,O
can,O
be,O
no,O
assurance,O
that,O
the,O
reverse,O
split,O
will,O
increase,O
the,O
potential,O
market,O
price,O
of,O
our,O
Common,O
Stock,O
by,O
a,O
multiple,O
equal,O
to,O
the,O
exchange,O
number,O
or,O
result,O
in,O
the,O
permanent,O
increase,O
in,O
any,O
potential,O
market,O
price,O
(,O
which,O
is,O
dependent,O
upon,O
many,O
factors,O
",",O
including,O
our,O
performance,O
and,O
prospects,O
),O
.,O
,O
Also,O
",",O
should,O
the,O
market,O
price,O
of,O
our,O
Common,O
Stock,O
decline,O
",",O
the,O
percentage,O
decline,O
as,O
an,O
absolute,O
number,O
and,O
as,O
a,O
percentage,O
of,O
our,O
overall,O
market,O
capitalization,O
may,O
be,O
greater,O
than,O
would,O
pertain,O
in,O
the,O
absence,O
of,O
a,O
reverse,O
split,O
.,O
,O
Furthermore,O
",",O
the,O
possibility,O
exists,O
that,O
potential,O
liquidity,O
in,O
the,O
market,O
price,O
of,O
our,O
Common,O
Stock,O
could,O
be,O
adversely,O
affected,O
by,O
the,O
reduced,O
number,O
of,O
shares,O
that,O
would,O
be,O
outstanding,O
after,O
the,O
reverse,O
split,O
.,O
,O
In,O
addition,O
",",O
the,O
reverse,O
split,O
will,O
increase,O
the,O
number,O
of,O
stockholders,O
of,O
the,O
Company,O
who,O
own,O
odd,O
lots,O
(,O
less,O
than,O
100,O
shares,O
),O
.,O
,O
Stockholders,O
who,O
hold,O
odd,O
lots,O
typically,O
will,O
experience,O
an,O
increase,O
in,O
the,O
cost,O
of,O
selling,O
their,O
shares,O
",",O
as,O
well,O
as,O
possible,O
greater,O
difficulty,O
in,O
effecting,O
such,O
sales,O
.,O
,O
Consequently,O
",",O
there,O
can,O
be,O
no,O
assurance,O
that,O
the,O
reverse,O
split,O
will,O
achieve,O
the,O
desired,O
results,O
that,O
have,O
been,O
outlined,O
above,O
.,O
,O
THE,O
OVERALL,O
EFFECT,O
OF,O
THE,O
REVERSE,O
STOCK,O
SPLIT,O
MAY,O
BE,O
TO,O
RENDER,O
MORE,O
DIFFICULT,O
THE,O
ACCOMPLISHMENT,O
OF,O
MERGERS,O
OR,O
THE,O
ASSUMPTION,O
OF,O
CONTROL,O
BY,O
A,O
PRINCIPAL,O
STOCKHOLDER,O
",",O
AND,O
THUS,O
MAKE,O
DIFFICULT,O
THE,O
REMOVAL,O
OF,O
MANAGEMENT,O
.,O
,O
The,O
effective,O
increase,O
in,O
our,O
authorized,O
shares,O
could,O
potentially,O
be,O
used,O
by,O
management,O
to,O
thwart,O
a,O
take-over,O
attempt,O
.,O
,O
The,O
over-all,O
effects,O
of,O
this,O
proposal,O
might,O
be,O
to,O
render,O
it,O
more,O
difficult,O
or,O
discourage,O
a,O
merger,O
",",O
tender,O
offer,O
or,O
proxy,O
contest,O
",",O
or,O
the,O
assumption,O
of,O
control,O
by,O
a,O
holder,O
of,O
a,O
large,O
block,O
of,O
the,O
Company,O
’,O
s,O
securities,O
and,O
the,O
removal,O
of,O
incumbent,O
management,O
.,O
,O
The,O
proposal,O
could,O
make,O
the,O
accomplishment,O
of,O
a,O
merger,O
or,O
similar,O
transaction,O
more,O
difficult,O
",",O
even,O
if,O
",",O
it,O
is,O
beneficial,O
to,O
shareholders,O
.,O
,O
Management,O
might,O
use,O
the,O
additional,O
shares,O
to,O
resist,O
or,O
frustrate,O
a,O
third-party,O
transaction,O
",",O
favored,O
by,O
a,O
majority,O
of,O
the,O
independent,O
stockholders,O
",",O
that,O
would,O
provide,O
an,O
above,O
market,O
premium,O
",",O
by,O
issuing,O
additional,O
shares,O
to,O
frustrate,O
the,O
take-over,O
effort,O
.,O
,O
As,O
discussed,O
below,O
",",O
the,O
reason,O
the,O
Reverse,O
Stock,O
Split,O
is,O
being,O
proposed,O
is,O
to,O
increase,O
the,O
amount,O
of,O
shares,O
the,O
Company,O
is,O
able,O
to,O
issue,O
in,O
order,O
to,O
attract,O
potential,O
investors,O
and,O
conduct,O
a,O
financing,O
.,O
,O
This,O
proposal,O
is,O
not,O
the,O
result,O
of,O
management,O
’,O
s,O
knowledge,O
of,O
an,O
effort,O
to,O
accumulate,O
the,O
issuer,O
’,O
s,O
securities,O
or,O
to,O
obtain,O
control,O
of,O
the,O
issuer,O
by,O
means,O
of,O
a,O
merger,O
",",O
tender,O
offer,O
",",O
solicitation,O
or,O
otherwise,O
.,O
,O
Neither,O
the,O
Company,O
’,O
s,O
charter,O
nor,O
its,O
by-laws,O
presently,O
contain,O
any,O
provisions,O
having,O
anti-takeover,O
effects,O
and,O
this,O
proposal,O
is,O
not,O
a,O
plan,O
by,O
management,O
to,O
adopt,O
a,O
series,O
of,O
amendments,O
to,O
the,O
Company,O
’,O
s,O
charter,O
or,O
by-laws,O
to,O
institute,O
an,O
anti-takeover,O
provision,O
.,O
,O
The,O
Company,O
does,O
not,O
have,O
any,O
plans,O
or,O
proposals,O
to,O
adopt,O
other,O
provisions,O
or,O
enter,O
into,O
other,O
arrangements,O
that,O
may,O
have,O
material,O
anti-takeover,O
consequences,O
.,O
,O
The,O
advantage,O
of,O
the,O
Reverse,O
Stock,O
Split,O
will,O
be,O
to,O
permit,O
the,O
Company,O
to,O
pursue,O
financing,O
from,O
investors,O
and,O
issue,O
shares,O
of,O
common,O
stock,O
in,O
exchange,O
for,O
the,O
financing,O
.,O
,O
This,O
is,O
the,O
main,O
purpose,O
for,O
the,O
Reverse,O
Stock,O
Split,O
and,O
if,O
the,O
Reverse,O
Stock,O
Split,O
is,O
not,O
completed,O
",",O
the,O
Company,O
would,O
not,O
be,O
able,O
to,O
issue,O
additional,O
shares,O
sufficient,O
to,O
complete,O
a,O
financing,O
.,O
,O
The,O
main,O
disadvantage,O
to,O
the,O
Reverse,O
Stock,O
Split,O
is,O
that,O
it,O
may,O
have,O
an,O
anti-takeover,O
effect,O
and,O
discourage,O
any,O
potential,O
mergers,O
or,O
tender,O
offers,O
.,O
,O
As,O
discussed,O
above,O
",",O
the,O
Reverse,O
Stock,O
Split,O
was,O
the,O
subject,O
of,O
a,O
unanimous,O
vote,O
by,O
the,O
Board,O
of,O
Directors,O
approving,O
the,O
Reverse,O
Stock,O
Split,O
.,O
,O
There,O
are,O
no,O
rules,O
or,O
practices,O
on,O
any,O
stock,O
exchange,O
that,O
permit,O
such,O
exchange,O
to,O
reserve,O
the,O
right,O
to,O
refuse,O
to,O
list,O
or,O
to,O
de-list,O
any,O
stock,O
which,O
completes,O
a,O
reverse,O
stock,O
split,O
.,O
,O
The,O
main,O
purpose,O
of,O
completing,O
this,O
Reverse,O
Stock,O
Split,O
is,O
to,O
increase,O
the,O
amount,O
of,O
shares,O
available,O
in,O
order,O
to,O
have,O
the,O
ability,O
to,O
issue,O
shares,O
and,O
attract,O
investors,O
for,O
a,O
future,O
financing,O
.,O
,O
The,O
Company,O
currently,O
has,O
no,O
financing,O
agreements,O
pending,O
.,O
,O
The,O
Company,O
anticipates,O
that,O
the,O
reverse,O
split,O
will,O
become,O
effective,O
on,O
April,O
5,O
",",O
2010,O
",",O
or,O
as,O
soon,O
thereafter,O
as,O
is,O
practicable,O
",",O
which,O
we,O
will,O
refer,O
to,O
as,O
the,O
“,O
effective,O
date.,O
”,O
Beginning,O
on,O
the,O
effective,O
date,O
",",O
each,O
certificate,O
representing,O
pre-reverse,O
split,O
shares,O
will,O
be,O
deemed,O
for,O
all,O
corporate,O
purposes,O
to,O
evidence,O
ownership,O
of,O
post-reverse,O
split,O
shares,O
.,O
,O
Our,O
transfer,O
agent,O
",",O
Continental,I-BUSINESS
Stock,I-BUSINESS
Transfer,I-BUSINESS
&,I-BUSINESS
Trust,I-BUSINESS
Co.,I-BUSINESS
",",O
will,O
act,O
as,O
exchange,O
agent,O
for,O
purposes,O
of,O
implementing,O
the,O
exchange,O
of,O
stock,O
certificates,O
.,O
,O
We,O
refer,O
to,O
such,O
person,O
as,O
the,O
“,O
exchange,O
agent.,O
”,O
Holders,O
of,O
pre-reverse,O
split,O
shares,O
are,O
asked,O
to,O
surrender,O
to,O
the,O
exchange,O
agent,O
certificates,O
representing,O
pre-reverse,O
split,O
shares,O
in,O
exchange,O
for,O
certificates,O
representing,O
post-reverse,O
split,O
shares,O
in,O
accordance,O
with,O
the,O
procedures,O
set,O
forth,O
in,O
the,O
letter,O
of,O
transmittal,O
enclosed,O
with,O
this,O
Information,O
Statement,O
.,O
,O
No,O
new,O
certificates,O
will,O
be,O
issued,O
to,O
a,O
stockholder,O
until,O
that,O
stockholder,O
has,O
surrendered,O
the,O
stockholder,O
's,O
outstanding,O
certificate,O
(,O
s,O
),O
together,O
with,O
the,O
properly,O
completed,O
and,O
executed,O
letter,O
of,O
transmittal,O
.,O
,O
Our,O
stockholders,O
are,O
not,O
entitled,O
to,O
appraisal,O
rights,O
under,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporations,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
in,O
connection,O
with,O
the,O
reverse,O
stock,O
split,O
.,O
,O
STOCKHOLDERS,O
SHOULD,O
NOT,O
DESTROY,O
ANY,O
STOCK,O
CERTIFICATE,O
AND,O
SHOULD,O
NOT,O
SUBMIT,O
ANY,O
CERTIFICATES,O
WITHOUT,O
THE,O
LETTER,O
OF,O
TRANSMITTAL,O
.,O
,O
We,O
will,O
not,O
issue,O
fractional,O
certificates,O
for,O
post-reverse,O
split,O
shares,O
in,O
connection,O
with,O
the,O
reverse,O
split,O
.,O
,O
Instead,O
",",O
an,O
additional,O
share,O
shall,O
be,O
issued,O
to,O
all,O
holders,O
of,O
a,O
fractional,O
share,O
.,O
,O
To,O
the,O
extent,O
any,O
holders,O
of,O
pre-reverse,O
split,O
shares,O
are,O
entitled,O
to,O
fractional,O
shares,O
as,O
a,O
result,O
of,O
the,O
Reverse,O
Stock,O
Split,O
",",O
the,O
Company,O
will,O
issue,O
an,O
additional,O
share,O
to,O
all,O
holders,O
of,O
fractional,O
shares,O
.,O
,O
STOCKHOLDERS,O
SHOULD,O
NOT,O
DESTROY,O
ANY,O
STOCK,O
CERTIFICATE,O
AND,O
SHOULD,O
NOT,O
SUBMIT,O
ANY,O
CERTIFICATES,O
WITHOUT,O
THE,O
LETTER,O
OF,O
TRANSMITTAL,O
.,O
,O
Below,O
is,O
a,O
brief,O
summary,O
of,O
the,O
reverse,O
stock,O
split,O
:,O
,O
This,O
action,O
has,O
been,O
approved,O
by,O
the,O
Board,O
and,O
the,O
written,O
consents,O
of,O
the,O
holders,O
of,O
the,O
majority,O
of,O
the,O
outstanding,O
voting,O
capital,O
stock,O
of,O
the,O
Company,O
.,O
,O
The,O
entire,O
cost,O
of,O
furnishing,O
this,O
Information,O
Statement,O
will,O
be,O
borne,O
by,O
the,O
Company,O
.,O
,O
The,O
Company,O
will,O
request,O
brokerage,O
houses,O
",",O
nominees,O
",",O
custodians,O
",",O
fiduciaries,O
and,O
other,O
like,O
parties,O
to,O
forward,O
this,O
Information,O
Statement,O
to,O
the,O
beneficial,O
owners,O
of,O
the,O
Common,O
Stock,O
held,O
of,O
record,O
by,O
them,O
and,O
will,O
reimburse,O
such,O
persons,O
for,O
their,O
reasonable,O
charges,O
and,O
expenses,O
in,O
connection,O
therewith,O
.,O
,O
The,O
Board,O
of,O
Directors,O
has,O
fixed,O
the,O
close,O
of,O
business,O
on,O
March,O
5,O
",",O
2010,O
",",O
as,O
the,O
record,O
date,O
(,O
the,O
“,O
Record,O
Date,O
”,O
),O
for,O
the,O
determination,O
of,O
Stockholders,O
who,O
are,O
entitled,O
to,O
receive,O
this,O
Information,O
Statement,O
.,O
,O
You,O
are,O
being,O
provided,O
with,O
this,O
Information,O
Statement,O
pursuant,O
to,O
Section,O
14C,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
Regulation,O
14C,O
and,O
Schedule,I-MISCELLANEOUS
14C,I-MISCELLANEOUS
thereunder,O
",",O
and,O
",",O
in,O
accordance,O
therewith,O
",",O
the,O
Name,O
Change,O
and,O
Reverse,O
Stock,O
Split,O
will,O
not,O
become,O
effective,O
until,O
at,O
least,O
20,O
calendar,O
days,O
after,O
the,O
mailing,O
of,O
this,O
Information,O
Statement,O
.,O
,O
This,O
Information,O
Statement,O
is,O
being,O
mailed,O
on,O
or,O
about,O
March,O
15,O
",",O
2010,O
to,O
all,O
Stockholders,O
of,O
record,O
as,O
of,O
the,O
Record,O
Date,O
.,O
,O
The,O
Board,O
of,O
Directors,O
has,O
determined,O
that,O
",",O
in,O
light,O
of,O
the,O
fact,O
that,O
the,O
acquisition,O
of,O
Monkey,I-BUSINESS
Rock,I-BUSINESS
USA,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
has,O
caused,O
the,O
principal,O
business,O
of,O
our,O
company,O
to,O
consist,O
of,O
retail,O
leisure,O
company,O
based,O
in,O
the,O
motorcycle,O
industry,O
",",O
it,O
would,O
be,O
in,O
the,O
best,O
interests,O
of,O
the,O
Company,O
to,O
change,O
our,O
corporate,O
name,O
from,O
Comcam,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
to,O
Monkey,I-BUSINESS
Rock,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
On,O
March,O
5,O
",",O
2010,O
",",O
the,O
Company,O
's,O
Board,O
of,O
Directors,O
and,O
persons,O
owning,O
a,O
majority,O
of,O
the,O
Company,O
’,O
s,O
voting,O
securities,O
approved,O
a,O
resolution,O
authorizing,O
the,O
Company,O
to,O
amend,O
the,O
Articles,O
of,O
Incorporation,O
to,O
change,O
the,O
Company,O
’,O
s,O
name,O
to,O
Monkey,I-BUSINESS
Rock,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
The,O
Board,O
believes,O
that,O
the,O
name,O
change,O
better,O
reflects,O
the,O
nature,O
of,O
the,O
Company,O
’,O
s,O
current,O
and,O
anticipated,O
operations,O
.,O
,O
The,O
Company,O
had,O
operated,O
under,O
the,O
name,O
Comcam,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
which,O
reflected,O
the,O
Company,O
’,O
s,O
prior,O
business,O
of,O
serving,O
as,O
a,O
business,O
incubator,O
for,O
development,O
stage,O
technology,O
companies,O
.,O
,O
With,O
the,O
reverse,O
merger,O
of,O
Monkey,I-BUSINESS
Rock,I-BUSINESS
USA,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
in,O
March,O
2010,O
",",O
Monkey,I-BUSINESS
Rock,I-BUSINESS
USA,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
became,O
the,O
successor,O
issuer,O
to,O
Comcam,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
the,O
operations,O
of,O
Monkey,I-BUSINESS
Rock,I-BUSINESS
USA,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
became,O
that,O
of,O
the,O
Company,O
.,O
,O
We,O
intend,O
to,O
file,O
an,O
amendment,O
to,O
the,O
Company,O
’,O
s,O
Certificate,O
of,O
Incorporation,O
in,O
order,O
to,O
reflect,O
the,O
name,O
the,O
change,O
promptly,O
after,O
the,O
twentieth,O
day,O
after,O
the,O
date,O
this,O
Information,O
Statement,O
has,O
been,O
sent,O
to,O
stockholders,O
.,O
,O
With,O
the,O
approval,O
of,O
our,O
majority,O
stockholders,O
",",O
the,O
amended,O
Articles,O
will,O
become,O
effective,O
upon,O
their,O
filing,O
with,O
the,O
Secretary,O
of,O
State,I-LOCATION
of,I-LOCATION
Delaware,I-LOCATION
.,O
,O
The,O
Company,O
is,O
subject,O
to,O
the,O
informational,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
“,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
”,O
),O
",",O
and,O
in,O
accordance,O
therewith,O
files,O
reports,O
",",O
proxy,O
statements,O
and,O
other,O
information,O
including,O
annual,O
and,O
quarterly,O
reports,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
and,O
10-Q,I-MISCELLANEOUS
(,O
the,O
“,O
1934,I-MISCELLANEOUS
Act,I-MISCELLANEOUS
Filings,I-MISCELLANEOUS
”,O
),O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
the,O
“,O
Commission,O
”,O
),O
.,O
,O
Reports,O
and,O
other,O
information,O
filed,O
by,O
the,O
Company,O
can,O
be,O
inspected,O
and,O
copied,O
at,O
the,O
public,O
reference,O
facilities,O
maintained,O
at,O
the,O
Commission,O
at,O
Room,O
1024,O
",",O
450,O
Fifth,I-LOCATION
Street,I-LOCATION
",",O
N.W.,I-LOCATION
",",O
Washington,I-LOCATION
",",I-LOCATION
DC,I-LOCATION
20549,O
.,O
,O
Copies,O
of,O
such,O
material,O
can,O
be,O
obtained,O
upon,O
written,O
request,O
addressed,O
to,O
the,O
Commission,O
",",O
Public,O
Reference,O
Section,O
",",O
450,O
Fifth,I-LOCATION
Street,I-LOCATION
",",O
N.W.,I-LOCATION
",",O
Washington,I-LOCATION
",",I-LOCATION
D.C,I-LOCATION
.,I-LOCATION
,O
20549,O
",",O
at,O
prescribed,O
rates,O
.,O
,O
The,O
Commission,O
maintains,O
a,O
web,O
site,O
on,O
the,O
Internet,I-MISCELLANEOUS
(,O
http,O
:,O
//www.sec.gov,O
),O
that,O
contains,O
reports,O
",",O
proxy,O
and,O
information,O
statements,O
and,O
other,O
information,O
regarding,O
issuers,O
that,O
file,O
electronically,O
with,O
the,O
Commission,O
through,O
the,O
Electronic,I-MISCELLANEOUS
Data,I-MISCELLANEOUS
Gathering,I-MISCELLANEOUS
",",I-MISCELLANEOUS
Analysis,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Retrieval,I-MISCELLANEOUS
System,I-MISCELLANEOUS
(,O
“,O
EDGAR,I-MISCELLANEOUS
”,O
),O
.,O
,O
The,O
following,O
documents,O
as,O
filed,O
with,O
the,O
Commission,O
by,O
the,O
Company,O
are,O
incorporated,O
herein,O
by,O
reference,O
:,O
,O
As,O
of,O
the,O
date,O
of,O
the,O
Consent,O
by,O
the,O
Majority,O
Stockholders,O
",",O
March,O
5,O
",",O
2010,O
the,O
Company,O
had,O
"744,640,134",O
shares,O
of,O
Common,O
Stock,O
issued,O
and,O
outstanding,O
",",O
and,O
there,O
were,O
no,O
shares,O
of,O
Preferred,O
Stock,O
issued,O
and,O
outstanding,O
.,O
,O
Each,O
share,O
of,O
outstanding,O
Common,O
Stock,O
is,O
entitled,O
to,O
one,O
vote,O
on,O
matters,O
submitted,O
for,O
Stockholder,O
approval,O
.,O
,O
On,O
March,O
the,O
holders,O
of,O
"683,952,500",O
shares,O
(,O
or,O
approximately,O
91,O
%,O
of,O
the,O
"744,640,134",O
shares,O
of,O
Common,O
Stock,O
then,O
outstanding,O
),O
executed,O
and,O
delivered,O
to,O
the,O
Company,O
a,O
written,O
consent,O
approving,O
the,O
reverse,O
split,O
and,O
name,O
change,O
.,O
,O
Since,O
the,O
reverse,O
split,O
and,O
name,O
change,O
has,O
been,O
approved,O
by,O
the,O
Majority,O
Stockholders,O
",",O
no,O
proxies,O
are,O
being,O
solicited,O
with,O
this,O
Information,O
Statement,O
.,O
,O
The,O
DCGL,I-LEGISLATION/ACT
provides,O
in,O
substance,O
that,O
unless,O
the,O
Company,O
’,O
s,O
articles,O
of,O
incorporation,O
provides,O
otherwise,O
",",O
stockholders,O
may,O
take,O
action,O
without,O
a,O
meeting,O
of,O
stockholders,O
and,O
without,O
prior,O
notice,O
if,O
a,O
consent,O
or,O
consents,O
in,O
writing,O
",",O
setting,O
forth,O
the,O
action,O
so,O
taken,O
",",O
is,O
signed,O
by,O
the,O
holders,O
of,O
outstanding,O
stock,O
having,O
not,O
less,O
than,O
the,O
minimum,O
number,O
of,O
votes,O
that,O
would,O
be,O
necessary,O
to,O
take,O
such,O
action,O
at,O
a,O
meeting,O
at,O
which,O
all,O
shares,O
entitled,O
to,O
vote,O
thereon,O
were,O
present,O
.,O
,O
The,O
following,O
information,O
table,O
sets,O
forth,O
certain,O
information,O
regarding,O
the,O
Company,O
’,O
s,O
common,O
stock,O
owned,O
on,O
March,O
5,O
",",O
2010,O
by,O
(,O
i,O
),O
each,O
who,O
is,O
known,O
by,O
the,O
Company,O
to,O
own,O
beneficially,O
more,O
than,O
5,O
%,O
of,O
its,O
outstanding,O
Common,O
Stock,O
",",O
(,O
ii,O
),O
each,O
director,O
and,O
officer,O
",",O
and,O
(,O
iii,O
),O
all,O
officers,O
and,O
directors,O
as,O
a,O
group,O
:,O
,O
The,O
Stockholders,O
have,O
no,O
right,O
under,O
the,O
DBCA,I-LEGISLATION/ACT
",",O
the,O
Company,O
’,O
s,O
articles,O
of,O
incorporation,O
consistent,O
with,O
above,O
or,O
By-Laws,O
to,O
dissent,O
from,O
any,O
of,O
the,O
provisions,O
adopted,O
in,O
the,O
Amendments,O
.,O
,O
Pursuant,O
to,O
Rule,O
14c-2,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
this,O
reverse,O
split,O
and,O
name,O
change,O
shall,O
not,O
be,O
effective,O
until,O
a,O
date,O
at,O
least,O
twenty,O
(,O
20,O
),O
days,O
after,O
the,O
date,O
on,O
which,O
the,O
Definitive,O
Information,O
Statement,O
has,O
been,O
mailed,O
to,O
the,O
Stockholders,O
.,O
,O
The,O
Company,O
anticipates,O
that,O
the,O
actions,O
contemplated,O
hereby,O
will,O
be,O
effected,O
on,O
or,O
about,O
the,O
close,O
of,O
business,O
on,O
April,O
5,O
",",O
2010,O
or,O
as,O
soon,O
thereafter,O
and,O
is,O
practicable,O
.,O
,O
-DOCSTART-,O
,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
(,O
Mark,O
One,O
),O
,O
Indicate,O
by,O
check,O
mark,O
if,O
the,O
registrant,O
is,O
a,O
well-known,O
seasoned,O
issuer,O
",",O
as,O
defined,O
in,O
Rule,O
405,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Yes,O
No,O
x,O
Indicate,O
by,O
check,O
mark,O
if,O
the,O
registrant,O
is,O
not,O
required,O
to,O
file,O
reports,O
pursuant,O
to,O
Section,O
13,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Act,O
.,O
,O
Yes,O
No,O
x,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
:,O
(,O
1,O
),O
has,O
filed,O
all,O
reports,O
required,O
to,O
be,O
filed,O
by,O
Section,O
13,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
during,O
the,O
preceding,O
12,O
months,O
(,O
or,O
for,O
such,O
shorter,O
period,O
that,O
the,O
registrant,O
was,O
required,O
to,O
file,O
such,O
reports,O
),O
",",O
and,O
(,O
2,O
),O
has,O
been,O
subject,O
to,O
such,O
filing,O
requirements,O
for,O
the,O
last,O
90,O
days,O
.,O
,O
Yes,O
x,O
No,O
Indicate,O
by,O
check,O
mark,O
if,O
disclosure,O
of,O
delinquent,O
filers,O
pursuant,O
to,O
Item,O
405,O
of,O
Regulation,I-LEGISLATION/ACT
S-K,I-LEGISLATION/ACT
is,O
not,O
contained,O
herein,O
",",O
and,O
will,O
not,O
be,O
contained,O
",",O
to,O
the,O
best,O
of,O
registrant,O
s,O
knowledge,O
",",O
in,O
definitive,O
proxy,O
or,O
information,O
statements,O
incorporated,O
by,O
reference,O
in,O
Part,O
III,O
of,O
this,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
or,O
any,O
amendment,O
to,O
this,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
.,O
,O
x,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
large,O
accelerated,O
filer,O
",",O
an,O
accelerated,O
filer,O
",",O
a,O
non-accelerated,O
filer,O
or,O
a,O
smaller,O
reporting,O
company,O
.,O
,O
See,O
definitions,O
of,O
large,O
accelerated,O
filer,O
",",O
accelerated,O
filer,O
",",O
non-accelerated,O
filer,O
and,O
smaller,O
reporting,O
company,O
in,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
shell,O
company,O
(,O
as,O
defined,O
in,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
.,O
,O
Yes,O
No,O
x,O
State,O
the,O
aggregate,O
market,O
value,O
of,O
the,O
voting,O
and,O
non-voting,O
common,O
equity,O
held,O
by,O
nonaffiliates,O
computed,O
by,O
reference,O
to,O
the,O
price,O
at,O
which,O
the,O
common,O
equity,O
was,O
last,O
sold,O
",",O
or,O
the,O
average,O
bid,O
and,O
asked,O
prices,O
of,O
such,O
common,O
equity,O
",",O
as,O
of,O
the,O
last,O
business,O
day,O
of,O
the,O
registrant,O
s,O
most,O
recently,O
completed,O
second,O
fiscal,O
quarter,O
.,O
,O
The,O
registrant,O
had,O
no,O
voting,O
or,O
non-voting,O
common,O
equity,O
outstanding,O
as,O
of,O
the,O
last,O
business,O
day,O
of,O
the,O
registrant,O
s,O
most,O
recently,O
completed,O
second,O
fiscal,O
quarter,O
or,O
the,O
date,O
of,O
this,O
report,O
.,O
,O
The,O
following,O
Items,O
have,O
been,O
omitted,O
in,O
accordance,O
with,O
General,O
Instruction,O
J,O
to,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
:,O
,O
Substitute,O
information,O
provided,O
in,O
accordance,O
with,O
General,O
Instruction,O
J,O
to,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
:,O
Item,O
1112,O
(,O
b,O
),O
of,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
.,O
,O
Significant,O
Obligors,O
of,O
Pool,O
Assets,O
(,O
Financial,O
Information,O
),O
.,O
,O
The,O
assets,O
of,O
the,O
Chase,I-BUSINESS
Issuance,I-BUSINESS
Trust,I-BUSINESS
include,O
a,O
collateral,O
certificate,O
",",O
Series,I-MISCELLANEOUS
2002-CC,I-MISCELLANEOUS
(,O
the,O
First,I-MISCELLANEOUS
USA,I-MISCELLANEOUS
Collateral,I-MISCELLANEOUS
Certificate,I-MISCELLANEOUS
),O
",",O
representing,O
an,O
undivided,O
interest,O
in,O
the,O
assets,O
of,O
the,O
First,I-BUSINESS
USA,I-BUSINESS
Credit,I-BUSINESS
Card,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
(,O
the,O
First,I-BUSINESS
USA,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
),O
",",O
whose,O
assets,O
include,O
credit,O
card,O
receivables,O
arising,O
in,O
consumer,O
revolving,O
credit,O
card,O
accounts,O
owned,O
by,O
Chase,I-BUSINESS
Bank,I-BUSINESS
USA,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
(,O
Chase,I-BUSINESS
USA,I-BUSINESS
),O
.,O
,O
The,O
First,I-MISCELLANEOUS
USA,I-MISCELLANEOUS
Collateral,I-MISCELLANEOUS
Certificate,I-MISCELLANEOUS
represents,O
less,O
than,O
20,O
%,O
of,O
the,O
Chase,I-BUSINESS
Issuance,I-BUSINESS
Trust,I-BUSINESS
asset,O
pool,O
.,O
,O
The,O
First,I-BUSINESS
USA,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
should,O
not,O
be,O
considered,O
a,O
significant,O
obligor,O
in,O
relation,O
to,O
the,O
Chase,I-BUSINESS
Issuance,I-BUSINESS
Trust,I-BUSINESS
under,O
Item,O
1112,O
(,O
b,O
),O
of,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
.,O
,O
Nevertheless,O
",",O
the,O
information,O
required,O
by,O
General,O
Instruction,O
J,O
to,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
an,O
asset-backed,O
issuer,O
in,O
respect,O
of,O
the,O
First,I-BUSINESS
USA,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
has,O
been,O
disclosed,O
in,O
this,O
report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
.,O
,O
The,O
assets,O
of,O
the,O
Chase,I-BUSINESS
Issuance,I-BUSINESS
Trust,I-BUSINESS
included,O
a,O
collateral,O
certificate,O
",",O
Series,I-MISCELLANEOUS
2004-CC,I-MISCELLANEOUS
(,O
the,O
Chase,I-MISCELLANEOUS
Collateral,I-MISCELLANEOUS
Certificate,I-MISCELLANEOUS
),O
",",O
representing,O
an,O
undivided,O
interest,O
in,O
the,O
Chase,I-BUSINESS
Credit,I-BUSINESS
Card,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
(,O
the,O
Chase,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
),O
",",O
whose,O
assets,O
included,O
credit,O
card,O
receivables,O
arising,O
in,O
consumer,O
revolving,O
credit,O
card,O
accounts,O
owned,O
by,O
Chase,I-BUSINESS
USA,I-BUSINESS
.,O
,O
The,O
Chase,I-MISCELLANEOUS
Collateral,I-MISCELLANEOUS
Certificate,I-MISCELLANEOUS
was,O
paid,O
in,O
full,O
and,O
terminated,O
on,O
December,O
15,O
",",O
2009,O
.,O
,O
The,O
Chase,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
should,O
not,O
be,O
considered,O
a,O
significant,O
obligor,O
in,O
relation,O
to,O
the,O
Chase,I-BUSINESS
Issuance,I-BUSINESS
Trust,I-BUSINESS
under,O
Item,O
1112,O
(,O
b,O
),O
of,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
.,O
,O
Nonetheless,O
",",O
the,O
information,O
required,O
by,O
General,O
Instruction,O
J,O
to,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
an,O
asset-backed,O
issuer,O
in,O
respect,O
of,O
the,O
Chase,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
has,O
been,O
disclosed,O
in,O
this,O
report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
.,O
,O
None,O
of,O
the,O
pool,O
assets,O
held,O
by,O
the,O
Chase,I-BUSINESS
Issuance,I-BUSINESS
Trust,I-BUSINESS
other,O
than,O
collateral,O
certificates,O
",",O
and,O
none,O
of,O
the,O
pool,O
assets,O
relating,O
to,O
the,O
First,I-BUSINESS
USA,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
or,O
the,O
Chase,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
include,O
any,O
significant,O
obligors,O
.,O
,O
Item,O
1114,O
(,O
b,O
),O
(,O
2,O
),O
of,O
Regulation,I-MISCELLANEOUS
AB,I-MISCELLANEOUS
:,O
Credit,O
Enhancement,O
and,O
Other,O
Support,O
",",O
Except,O
for,O
Certain,O
Derivatives,O
Instruments,O
(,O
Financial,O
Information,O
),O
.,O
,O
Item,O
1115,O
(,O
b,O
),O
of,O
Regulation,I-MISCELLANEOUS
AB,I-MISCELLANEOUS
:,O
Certain,O
Derivatives,O
Instruments,O
(,O
Financial,O
Information,O
),O
.,O
,O
Item,O
1117,O
of,O
Regulation,I-MISCELLANEOUS
AB,I-MISCELLANEOUS
:,O
Legal,O
Proceedings,O
.,O
,O
Industry,O
Litigation,O
In,O
1996,O
",",O
Wal-Mart,I-BUSINESS
Stores,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
several,O
other,O
retailers,O
sued,O
MasterCard,I-BUSINESS
International,I-BUSINESS
Incorporated,I-BUSINESS
",",O
VISA,I-BUSINESS
U.S.A.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
VISA,I-BUSINESS
International,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
in,O
the,O
U.S.,I-COURT
District,I-COURT
Court,I-COURT
for,I-COURT
the,I-COURT
Eastern,I-COURT
District,I-COURT
of,I-COURT
New,I-COURT
York,I-COURT
(,O
the,O
District,O
Court,O
),O
.,O
,O
The,O
action,O
asserted,O
that,O
the,O
rules,O
of,O
the,O
foregoing,O
associations,O
regarding,O
the,O
uniform,O
acceptance,O
of,O
all,O
VISA,I-BUSINESS
and,O
MasterCard,I-BUSINESS
cards,O
",",O
including,O
debit,O
VISA,I-BUSINESS
and,O
MasterCard,I-BUSINESS
cards,O
",",O
constituted,O
an,O
illegal,O
tying,O
arrangement,O
.,O
,O
In,O
April,O
2003,O
",",O
MasterCard,I-BUSINESS
and,O
VISA,I-BUSINESS
each,O
agreed,O
to,O
settle,O
the,O
matter,O
by,O
among,O
other,O
things,O
",",O
reducing,O
interchange,O
rates,O
for,O
debit,O
cards,O
",",O
allowing,O
merchants,O
to,O
decline,O
debit,O
cards,O
",",O
and,O
agreeing,O
to,O
pay,O
into,O
settlement,O
funds,O
as,O
follows,O
:,O
MasterCard,I-BUSINESS
agreed,O
to,O
pay,O
into,O
a,O
settlement,O
fund,O
approximately,O
$,O
1,O
billion,O
over,O
ten,O
years,O
and,O
VISA,I-BUSINESS
agreed,O
to,O
pay,O
approximately,O
$,O
2,O
billion,O
over,O
ten,O
years,O
.,O
,O
On,O
December,O
19,O
",",O
2003,O
",",O
the,O
District,O
Court,O
granted,O
final,O
approval,O
of,O
the,O
settlement,O
.,O
,O
The,O
court,O
interpreted,O
the,O
release,O
provided,O
by,O
the,O
merchant,O
class,O
as,O
encompassing,O
any,O
possible,O
suit,O
by,O
class,O
members,O
with,O
respect,O
to,O
debit,O
or,O
credit,O
card,O
interchange,O
fees,O
or,O
with,O
respect,O
to,O
the,O
exclusionary,O
rules,O
barring,O
issuance,O
of,O
American,I-BUSINESS
Express,I-BUSINESS
or,O
Discover,I-BUSINESS
cards,O
by,O
member,O
banks,O
and,O
as,O
prohibiting,O
such,O
suits,O
against,O
the,O
member,O
banks,O
as,O
well,O
as,O
against,O
the,O
associations,O
.,O
,O
On,O
January,O
4,O
",",O
2005,O
",",O
the,O
U.S.,I-COURT
Court,I-COURT
of,I-COURT
Appeals,I-COURT
for,I-COURT
the,I-COURT
Second,I-COURT
Circuit,I-COURT
affirmed,O
the,O
District,O
Court,O
s,O
order,O
approving,O
the,O
settlement,O
in,O
all,O
respects,O
.,O
,O
Certain,O
merchants,O
that,O
had,O
previously,O
opted,O
out,O
of,O
the,O
settlement,O
filed,O
separate,O
lawsuits,O
and,O
the,O
opt,O
out,O
actions,O
have,O
been,O
resolved,O
.,O
,O
On,O
June,O
22,O
",",O
2005,O
",",O
a,O
group,O
of,O
merchants,O
filed,O
a,O
putative,O
class,O
action,O
complaint,O
in,O
the,O
U.S.,I-COURT
District,I-COURT
Court,I-COURT
for,I-COURT
the,I-COURT
District,I-COURT
of,I-COURT
Connecticut,I-COURT
.,O
,O
The,O
complaint,O
alleges,O
that,O
VISA,I-BUSINESS
",",O
MasterCard,I-BUSINESS
and,O
certain,O
member,O
banks,O
including,O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
",",O
Chase,I-BUSINESS
USA,I-BUSINESS
",",O
Capital,I-BUSINESS
One,I-BUSINESS
",",O
Citibank,I-BUSINESS
and,O
others,O
",",O
conspired,O
to,O
set,O
the,O
price,O
of,O
interchange,O
in,O
violation,O
of,O
Section,O
1,O
of,O
the,O
Sherman,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
The,O
complaint,O
further,O
alleges,O
tying/bundling,O
and,O
exclusive,O
dealing,O
.,O
,O
Since,O
the,O
filing,O
of,O
the,O
Connecticut,O
complaint,O
",",O
other,O
complaints,O
were,O
filed,O
in,O
different,O
U.S.,I-COURT
District,I-COURT
Courts,I-COURT
challenging,O
the,O
setting,O
of,O
interchange,O
",",O
as,O
well,O
the,O
associations,O
respective,O
rules,O
.,O
,O
The,O
Judicial,I-GOVERNMENT
Panel,I-GOVERNMENT
on,I-GOVERNMENT
Multidistrict,I-GOVERNMENT
Litigation,I-GOVERNMENT
consolidated,O
the,O
cases,O
in,O
the,O
Eastern,I-COURT
District,I-COURT
of,I-COURT
New,I-COURT
York,I-COURT
for,O
pretrial,O
proceedings,O
.,O
,O
An,O
amended,O
consolidated,O
complaint,O
was,O
filed,O
on,O
April,O
24,O
",",O
2006,O
.,O
,O
The,O
consolidated,O
complaint,O
also,O
added,O
claims,O
relating,O
to,O
off,O
line,O
debit,O
transactions,O
.,O
,O
Defendants,O
filed,O
a,O
motion,O
to,O
dismiss,O
all,O
claims,O
that,O
pre-date,O
January,O
1,O
",",O
2004,O
",",O
based,O
on,O
the,O
settlement,O
and,O
release,O
of,O
claims,O
in,O
the,O
Wal-Mart,I-BUSINESS
case,O
.,O
,O
On,O
January,O
8,O
",",O
2008,O
",",O
the,O
Court,O
granted,O
that,O
motion,O
and,O
those,O
claims,O
have,O
been,O
dismissed,O
.,O
,O
In,O
May,O
2008,O
",",O
the,O
plaintiffs,O
filed,O
a,O
motion,O
seeking,O
class,O
certification,O
and,O
the,O
defendants,O
opposed,O
that,O
motion,O
in,O
October,O
2008,O
.,O
,O
The,O
court,O
has,O
not,O
yet,O
ruled,O
on,O
the,O
class,O
certification,O
motion,O
.,O
,O
In,O
addition,O
to,O
the,O
consolidated,O
class,O
action,O
complaint,O
",",O
plaintiffs,O
filed,O
supplemental,O
complaints,O
challenging,O
the,O
MasterCard,I-BUSINESS
and,O
Visa,I-BUSINESS
initial,O
public,O
offerings,O
(,O
each,O
",",O
an,O
IPO,O
),O
.,O
,O
With,O
respect,O
to,O
MasterCard,I-BUSINESS
",",O
plaintiffs,O
first,O
filed,O
a,O
supplemental,O
complaint,O
in,O
May,O
2006,O
alleging,O
that,O
the,O
offering,O
violated,O
Section,O
7,O
of,O
the,O
Clayton,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
Section,O
1,O
of,O
the,O
Sherman,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
that,O
the,O
offering,O
was,O
a,O
fraudulent,O
conveyance,O
.,O
,O
Defendants,O
filed,O
a,O
motion,O
to,O
dismiss,O
both,O
of,O
those,O
claims,O
.,O
,O
On,O
November,O
25,O
",",O
2008,O
",",O
the,O
District,O
Court,O
dismissed,O
the,O
supplemental,O
complaints,O
with,O
leave,O
to,O
replead,O
.,O
,O
In,O
January,O
2009,O
",",O
the,O
plaintiffs,O
filed,O
and,O
served,O
a,O
Second,O
Amended,O
Consolidated,O
Class,O
Action,O
Complaint,O
against,O
all,O
defendants,O
and,O
an,O
amended,O
supplemental,O
complaint,O
against,O
MasterCard,I-BUSINESS
again,O
challenging,O
the,O
MasterCard,I-BUSINESS
IPO,O
making,O
antitrust,O
claims,O
similar,O
to,O
those,O
that,O
were,O
set,O
forth,O
in,O
the,O
original,O
supplemental,O
complaint,O
",",O
as,O
well,O
as,O
the,O
fraudulent,O
conveyance,O
claim,O
.,O
,O
With,O
respect,O
to,O
the,O
Visa,I-BUSINESS
IPO,O
",",O
the,O
plaintiffs,O
filed,O
a,O
supplemental,O
complaint,O
challenging,O
the,O
Visa,I-BUSINESS
IPO,O
on,O
antitrust,O
theories,O
parallel,O
to,O
those,O
articulated,O
in,O
the,O
MasterCard,I-BUSINESS
IPO,O
pleading,O
.,O
,O
On,O
March,O
31,O
",",O
2009,O
",",O
defendants,O
filed,O
a,O
motion,O
to,O
dismiss,O
the,O
Second,O
Amended,O
Consolidated,O
Class,O
Action,O
Complaint,O
.,O
,O
Separate,O
motions,O
to,O
dismiss,O
each,O
of,O
the,O
supplemental,O
complaints,O
challenging,O
the,O
MasterCard,I-BUSINESS
and,O
Visa,I-BUSINESS
IPOs,O
were,O
also,O
filed,O
.,O
,O
Chase,I-BUSINESS
USA,I-BUSINESS
can,O
not,O
predict,O
with,O
any,O
degree,O
of,O
certainty,O
the,O
final,O
outcome,O
of,O
the,O
litigation,O
described,O
above,O
",",O
its,O
effect,O
on,O
the,O
credit,O
card,O
industry,O
or,O
its,O
effect,O
on,O
Chase,I-BUSINESS
USA,I-BUSINESS
s,O
credit,O
card,O
business,O
.,O
,O
In,O
February,O
2000,O
",",O
plaintiff,O
Adam,I-PERSON
A.,I-PERSON
Schwartz,I-PERSON
filed,O
a,O
lawsuit,O
in,O
California,I-COURT
Superior,I-COURT
Court,I-COURT
against,O
VISA,I-BUSINESS
International,I-BUSINESS
Corp.,I-BUSINESS
",",O
VISA,I-BUSINESS
International,I-BUSINESS
Service,I-BUSINESS
Association,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
VISA,I-BUSINESS
U.S.A.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
MasterCard,I-BUSINESS
International,I-BUSINESS
Incorporated,I-BUSINESS
alleging,O
that,O
VISA,I-BUSINESS
and,O
MasterCard,I-BUSINESS
have,O
unlawfully,O
concealed,O
the,O
fact,O
that,O
each,O
increases,O
by,O
1,O
%,O
the,O
rate,O
at,O
which,O
it,O
converts,O
foreign,O
currency,O
to,O
United,I-LOCATION
States,I-LOCATION
dollars,O
for,O
credit,O
card,O
purchases,O
made,O
in,O
foreign,O
currencies,O
by,O
United,I-LOCATION
States,I-LOCATION
cardholders,O
.,O
,O
The,O
case,O
was,O
brought,O
under,O
the,O
California,I-LOCATION
unfair,O
business,O
practices,O
statute,O
.,O
,O
On,O
April,O
7,O
",",O
2003,O
",",O
the,O
court,O
issued,O
a,O
decision,O
in,O
favor,O
of,O
the,O
plaintiff,O
and,O
against,O
VISA,I-BUSINESS
and,O
MasterCard,I-BUSINESS
",",O
holding,O
that,O
the,O
networks,O
disclosures,O
of,O
the,O
1,O
%,O
currency,O
conversion,O
fee,O
were,O
inadequate,O
under,O
California,I-LOCATION
law,O
.,O
,O
VISA,I-BUSINESS
and,O
MasterCard,I-BUSINESS
appealed,O
the,O
decision,O
.,O
,O
On,O
September,O
28,O
",",O
2005,O
",",O
the,O
appellate,O
court,O
reversed,O
the,O
judgment,O
and,O
remanded,O
the,O
case,O
to,O
the,O
trial,O
court,O
for,O
further,O
consideration,O
.,O
,O
The,O
reversal,O
was,O
based,O
on,O
the,O
amendment,O
to,O
the,O
California,I-LOCATION
statute,O
at,O
issue,O
in,O
the,O
case,O
",",O
which,O
now,O
requires,O
the,O
plaintiff,O
to,O
have,O
suffered,O
actual,O
injury,O
.,O
,O
The,O
appellate,O
court,O
directed,O
the,O
trial,O
court,O
to,O
exercise,O
its,O
discretion,O
to,O
determine,O
whether,O
to,O
grant,O
leave,O
to,O
amend,O
the,O
complaint,O
to,O
add,O
a,O
new,O
plaintiff,O
.,O
,O
Beginning,O
in,O
or,O
around,O
February,O
2001,O
",",O
more,O
than,O
twenty,O
individual,O
credit,O
cardholders,O
filed,O
putative,O
class,O
actions,O
against,O
VISA,I-BUSINESS
International,I-BUSINESS
Service,I-BUSINESS
Association,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
VISA,I-BUSINESS
U.S.A.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
MasterCard,I-BUSINESS
International,I-BUSINESS
Incorporated,I-BUSINESS
and,O
seven,O
credit,O
card,O
issuing,O
banks,O
and,O
their,O
parent,O
companies,O
",",O
including,O
Chase,I-BUSINESS
USA,I-BUSINESS
and,O
JPMorgan,I-BUSINESS
Chase,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",O
alleging,O
that,O
VISA,I-BUSINESS
and,O
MasterCard,I-BUSINESS
",",O
together,O
with,O
their,O
members,O
banks,O
",",O
had,O
conspired,O
to,O
fix,O
the,O
price,O
of,O
currency,O
conversion,O
services,O
for,O
credit,O
card,O
purchases,O
made,O
in,O
a,O
foreign,O
currency,O
by,O
United,I-LOCATION
States,I-LOCATION
cardholders,O
.,O
,O
The,O
plaintiffs,O
also,O
asserted,O
that,O
disclosure,O
requirements,O
of,O
the,O
Truth-in-Lending,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
regulations,O
promulgated,O
thereunder,O
had,O
not,O
been,O
observed,O
.,O
,O
The,O
cases,O
were,O
consolidated,O
in,O
the,O
District,I-COURT
Court,I-COURT
for,I-COURT
the,I-COURT
Southern,I-COURT
District,I-COURT
of,I-COURT
New,I-COURT
York,I-COURT
for,O
pretrial,O
purposes,O
.,O
,O
On,O
July,O
3,O
",",O
2003,O
",",O
the,O
court,O
denied,O
in,O
principal,O
part,O
the,O
defendants,O
motion,O
to,O
dismiss,O
the,O
consolidated,O
complaint,O
.,O
,O
On,O
November,O
12,O
",",O
2003,O
",",O
the,O
plaintiffs,O
moved,O
for,O
an,O
order,O
certifying,O
the,O
action,O
as,O
a,O
class,O
action,O
",",O
and,O
by,O
Order,O
dated,O
October,O
15,O
",",O
2004,O
",",O
the,O
court,O
granted,O
class,O
certification,O
.,O
,O
On,O
July,O
20,O
",",O
2006,O
",",O
the,O
parties,O
in,O
the,O
consolidated,O
case,O
entered,O
into,O
a,O
nationwide,O
settlement,O
agreement,O
",",O
subject,O
to,O
court,O
approval,O
.,O
,O
The,O
court,O
held,O
a,O
final,O
approval,O
hearing,O
on,O
March,O
31,O
",",O
2008,O
and,O
took,O
the,O
matter,O
under,O
advisement,O
.,O
,O
The,O
defendants,O
have,O
denied,O
any,O
wrongdoing,O
",",O
and,O
the,O
court,O
has,O
not,O
made,O
any,O
ruling,O
on,O
the,O
merits,O
of,O
the,O
case,O
.,O
,O
The,O
settlement,O
agreement,O
includes,O
provisions,O
relating,O
to,O
disclosures,O
on,O
billing,O
statements,O
and,O
other,O
documents,O
",",O
and,O
a,O
settlement,O
fund,O
of,O
$,O
"336,000,000",O
to,O
pay,O
monetary,O
claims,O
",",O
the,O
costs,O
of,O
administering,O
the,O
settlement,O
and,O
notice,O
to,O
cardholders,O
",",O
court-approved,O
attorneys,O
fees,O
and,O
expenses,O
",",O
and,O
court-approved,O
awards,O
to,O
the,O
class,O
representatives,O
.,O
,O
Eligible,O
cardholders,O
will,O
be,O
able,O
to,O
make,O
monetary,O
claims,O
.,O
,O
The,O
settlement,O
documents,O
include,O
agreements,O
to,O
settle,O
certain,O
related,O
lawsuits,O
",",O
including,O
the,O
lawsuit,O
filed,O
by,O
Adam,I-PERSON
A.,I-PERSON
Schwartz,I-PERSON
against,O
the,O
VISA,I-BUSINESS
and,O
MasterCard,I-BUSINESS
entities,O
as,O
referenced,O
above,O
.,O
,O
The,O
court,O
granted,O
final,O
approval,O
of,O
the,O
settlement,O
on,O
October,O
22,O
",",O
2009,O
.,O
,O
Objectors,O
to,O
the,O
settlement,O
filed,O
appeals,O
in,O
the,O
Second,I-COURT
Circuit,I-COURT
.,O
,O
Other,O
Litigation,O
On,O
March,O
23,O
",",O
2004,O
",",O
plaintiff,O
James,I-PERSON
A.,I-PERSON
McCoy,I-PERSON
filed,O
a,O
lawsuit,O
in,O
California,I-COURT
Superior,I-COURT
Court,I-COURT
against,O
Chase,I-BUSINESS
Manhattan,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
USA,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
the,O
predecessor,O
entity,O
of,O
Chase,I-BUSINESS
USA,I-BUSINESS
.,O
,O
On,O
January,O
3,O
",",O
2006,O
",",O
plaintiff,O
McCoy,I-PERSON
filed,O
a,O
Second,O
Amended,O
Complaint,O
",",O
alleging,O
that,O
Chase,I-BUSINESS
USA,I-BUSINESS
violated,O
the,O
Truth-in-Lending,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
bringing,O
state,O
law,O
claims,O
for,O
unconscionability,O
",",O
declaratory,O
relief,O
",",O
illegal,O
penalty,O
",",O
consumer,O
fraud,O
",",O
breach,O
of,O
contract,O
and,O
breach,O
of,O
the,O
implied,O
covenant,O
of,O
good,O
faith,O
and,O
fair,O
dealing,O
.,O
,O
Plaintiff,O
brought,O
suit,O
on,O
behalf,O
of,O
a,O
putative,O
class,O
of,O
Chase,I-BUSINESS
USA,I-BUSINESS
credit,O
card,O
customers,O
who,O
claim,O
that,O
their,O
interest,O
rates,O
were,O
increased,O
without,O
notice,O
after,O
they,O
made,O
a,O
late,O
payment,O
to,O
either,O
Chase,I-BUSINESS
USA,I-BUSINESS
or,O
another,O
creditor,O
.,O
,O
Chase,I-BUSINESS
USA,I-BUSINESS
removed,O
the,O
case,O
to,O
federal,O
court,O
and,O
then,O
moved,O
to,O
dismiss,O
the,O
complaint,O
.,O
,O
On,O
August,O
21,O
",",O
2006,O
",",O
the,O
court,O
granted,O
Chase,I-BUSINESS
USA,I-BUSINESS
s,O
motion,O
and,O
dismissed,O
the,O
case,O
.,O
,O
Plaintiff,O
McCoy,I-PERSON
appealed,O
the,O
dismissal,O
to,O
the,O
Ninth,I-COURT
Circuit,I-COURT
Court,I-COURT
of,I-COURT
Appeals,I-COURT
.,O
,O
On,O
March,O
16,O
",",O
2009,O
",",O
the,O
Ninth,I-COURT
Circuit,I-COURT
issued,O
an,O
opinion,O
in,O
which,O
it,O
found,O
that,O
Chase,I-BUSINESS
USA,I-BUSINESS
violated,O
the,O
Truth-in-Lending,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
for,O
failing,O
to,O
provide,O
contemporaneous,O
notice,O
of,O
the,O
interest,O
rate,O
increases,O
.,O
,O
The,O
court,O
reversed,O
the,O
dismissal,O
of,O
several,O
of,O
the,O
state,O
law,O
claims,O
(,O
unconscionability,O
",",O
declaratory,O
relief,O
",",O
illegal,O
penalty,O
and,O
breach,O
of,O
contract,O
),O
and,O
remanded,O
the,O
case,O
to,O
the,O
lower,O
court,O
.,O
,O
The,O
Ninth,I-COURT
Circuit,I-COURT
affirmed,O
the,O
dismissal,O
of,O
the,O
consumer,O
fraud,O
and,O
implied,O
covenant,O
claims,O
.,O
,O
On,O
April,O
27,O
",",O
2009,O
",",O
Chase,I-BUSINESS
USA,I-BUSINESS
filed,O
a,O
motion,O
with,O
the,O
Ninth,I-COURT
Circuit,I-COURT
for,O
rehearing,O
en,O
banc,O
.,O
,O
On,O
June,O
15,O
",",O
2009,O
",",O
the,O
Ninth,I-COURT
Circuit,I-COURT
denied,O
Chase,I-BUSINESS
USA,I-BUSINESS
s,O
motion,O
for,O
rehearing,O
en,O
banc,O
.,O
,O
On,O
September,O
14,O
",",O
2009,O
",",O
Chase,I-BUSINESS
USA,I-BUSINESS
filed,O
a,O
certiorari,O
petition,O
with,O
the,O
United,I-COURT
States,I-COURT
Supreme,I-COURT
Court,I-COURT
seeking,O
review,O
of,O
the,O
decision,O
.,O
,O
Chase,I-BUSINESS
USA,I-BUSINESS
can,O
not,O
predict,O
with,O
any,O
degree,O
of,O
certainty,O
the,O
final,O
outcome,O
of,O
the,O
litigation,O
described,O
above,O
",",O
its,O
effect,O
on,O
the,O
credit,O
card,O
industry,O
or,O
its,O
effect,O
on,O
Chase,I-BUSINESS
USA,I-BUSINESS
s,O
credit,O
card,O
business,O
.,O
,O
A,O
number,O
of,O
lawsuits,O
seeking,O
class,O
action,O
certification,O
have,O
been,O
filed,O
in,O
both,O
state,O
and,O
federal,O
courts,O
against,O
Chase,I-BUSINESS
USA,I-BUSINESS
.,O
,O
These,O
lawsuits,O
challenge,O
certain,O
policies,O
and,O
practices,O
of,O
Chase,I-BUSINESS
USA,I-BUSINESS
s,O
credit,O
card,O
business,O
.,O
,O
A,O
few,O
of,O
these,O
lawsuits,O
have,O
been,O
conditionally,O
certified,O
as,O
class,O
actions,O
.,O
,O
Chase,I-BUSINESS
USA,I-BUSINESS
has,O
defended,O
itself,O
against,O
claims,O
in,O
the,O
past,O
and,O
intends,O
to,O
continue,O
to,O
do,O
so,O
in,O
the,O
future,O
.,O
,O
While,O
it,O
is,O
impossible,O
to,O
predict,O
the,O
outcome,O
of,O
any,O
of,O
these,O
lawsuits,O
",",O
Chase,I-BUSINESS
USA,I-BUSINESS
believes,O
that,O
any,O
liability,O
that,O
might,O
result,O
from,O
any,O
of,O
these,O
lawsuits,O
will,O
not,O
have,O
a,O
material,O
adverse,O
effect,O
on,O
the,O
credit,O
card,O
receivables,O
.,O
,O
The,O
following,O
Items,O
have,O
been,O
omitted,O
in,O
accordance,O
with,O
General,O
Instruction,O
J,O
to,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
:,O
,O
None,O
The,O
following,O
Items,O
have,O
been,O
omitted,O
in,O
accordance,O
with,O
General,O
Instruction,O
J,O
to,O
Form,I-MISCELLANEOUS
10,I-MISCELLANEOUS
K,I-MISCELLANEOUS
:,O
,O
Substitute,O
information,O
provided,O
in,O
accordance,O
with,O
General,O
Instruction,O
J,O
to,O
Form,I-MISCELLANEOUS
10,I-MISCELLANEOUS
K,I-MISCELLANEOUS
:,O
Item,O
1119,O
of,O
Regulation,I-MISCELLANEOUS
AB,I-MISCELLANEOUS
:,O
Affiliations,O
and,O
Certain,O
Relationships,O
and,O
Related,O
Transactions,O
.,O
,O
Information,O
required,O
by,O
Item,O
1119,O
of,O
Regulation,I-MISCELLANEOUS
AB,I-MISCELLANEOUS
has,O
been,O
omitted,O
from,O
this,O
report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
in,O
reliance,O
on,O
the,O
Instruction,O
to,O
Item,O
1119,O
.,O
,O
Item,O
1122,O
of,O
Regulation,I-MISCELLANEOUS
AB,I-MISCELLANEOUS
:,O
Compliance,O
with,O
Applicable,O
Servicing,O
Criteria,O
.,O
,O
Each,O
of,O
Chase,I-BUSINESS
USA,I-BUSINESS
",",O
as,O
the,O
servicer,O
for,O
each,O
of,O
the,O
Chase,I-BUSINESS
Issuance,I-BUSINESS
Trust,I-BUSINESS
",",O
the,O
First,I-BUSINESS
USA,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
and,O
the,O
Chase,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
",",O
and,O
BNY,I-BUSINESS
Mellon,I-BUSINESS
Trust,I-BUSINESS
of,I-BUSINESS
Delaware,I-BUSINESS
",",O
as,O
the,O
First,I-BUSINESS
USA,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
trustee,O
",",O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Mellon,I-BUSINESS
",",O
as,O
the,O
Chase,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
trustee,O
and,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
(,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
),O
",",O
as,O
the,O
indenture,O
trustee,O
for,O
the,O
Chase,I-BUSINESS
Issuance,I-BUSINESS
Trust,I-BUSINESS
(,O
each,O
",",O
a,O
Servicing,O
Participant,O
),O
was,O
a,O
party,O
participating,O
in,O
the,O
servicing,O
function,O
during,O
the,O
reporting,O
period,O
with,O
respect,O
to,O
the,O
pool,O
assets,O
held,O
by,O
the,O
respective,O
trust,O
.,O
,O
Assessment,O
are,O
attached,O
as,O
exhibits,O
to,O
this,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
.,O
,O
In,O
addition,O
",",O
each,O
of,O
the,O
Servicing,O
Participants,O
has,O
provided,O
an,O
attestation,O
report,O
(,O
each,O
",",O
an,O
Attestation,O
Report,O
),O
by,O
a,O
registered,O
independent,O
public,O
accounting,O
firm,O
regarding,O
its,O
related,O
Report,O
on,O
Assessment,O
.,O
,O
Each,O
Attestation,O
Report,O
is,O
attached,O
as,O
an,O
exhibit,O
to,O
this,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
.,O
,O
Item,O
1123,O
of,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
:,O
Servicer,O
Compliance,O
Statement,O
.,O
,O
Chase,I-BUSINESS
USA,I-BUSINESS
is,O
the,O
servicer,O
and,O
has,O
provided,O
a,O
statement,O
of,O
compliance,O
(,O
a,O
Compliance,O
Statement,O
),O
for,O
the,O
period,O
from,O
and,O
including,O
January,O
1,O
",",O
2009,O
through,O
and,O
including,O
December,O
31,O
",",O
2009,O
for,O
each,O
of,O
the,O
Chase,I-BUSINESS
Issuance,I-BUSINESS
Trust,I-BUSINESS
",",O
the,O
First,I-BUSINESS
USA,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
and,O
the,O
Chase,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
.,O
,O
Each,O
such,O
Compliance,O
Statement,O
has,O
been,O
signed,O
by,O
an,O
authorized,O
officer,O
of,O
the,O
servicer,O
for,O
the,O
respective,O
issuing,O
entity,O
and,O
is,O
attached,O
as,O
an,O
exhibit,O
to,O
this,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
.,O
,O
None,O
of,O
the,O
Reports,O
on,O
Assessment,O
or,O
the,O
related,O
Attestation,O
Reports,O
has,O
identified,O
any,O
material,O
instances,O
of,O
noncompliance,O
with,O
the,O
servicing,O
criteria,O
described,O
in,O
the,O
related,O
Report,O
on,O
Assessment,O
as,O
being,O
applicable,O
to,O
such,O
Servicing,O
Participant,O
except,O
that,O
the,O
Report,O
on,O
Assessment,O
provided,O
by,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Mellon,I-BUSINESS
",",O
BNY,I-BUSINESS
Mellon,I-BUSINESS
Trust,I-BUSINESS
of,I-BUSINESS
Delaware,I-BUSINESS
and,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Mellon,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
(,O
collectively,O
BNY,I-BUSINESS
),O
describes,O
a,O
material,O
instance,O
of,O
noncompliance,O
with,O
respect,O
Item,O
1122,O
(,O
d,O
),O
(,O
2,O
),O
(,O
i,O
),O
of,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
that,O
is,O
not,O
applicable,O
to,O
any,O
of,O
the,O
Chase,I-BUSINESS
Issuance,I-BUSINESS
Trust,I-BUSINESS
",",O
the,O
First,I-BUSINESS
USA,I-BUSINESS
Credit,I-BUSINESS
Card,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
or,O
the,O
Chase,I-BUSINESS
Credit,I-BUSINESS
Card,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
.,O
,O
The,O
Report,O
on,O
Assessment,O
provided,O
by,O
BNY,I-BUSINESS
was,O
prepared,O
on,O
a,O
platform,O
basis,O
.,O
,O
BNY,I-BUSINESS
defines,O
such,O
platform,O
as,O
publicly-issued,O
(,O
i.e.,O
",",O
transaction-level,O
reporting,O
initially,O
required,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
),O
asset-backed,O
securities,O
",",O
issued,O
on,O
or,O
after,O
January,O
1,O
",",O
2006,O
and,O
like-kind,O
transactions,O
issued,O
prior,O
to,O
January,O
1,O
",",O
2006,O
that,O
are,O
subject,O
to,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
for,O
which,O
BNY,I-BUSINESS
provides,O
trustee,O
",",O
securities,O
administration,O
or,O
paying,O
agent,O
services,O
",",O
as,O
defined,O
and,O
to,O
the,O
extent,O
applicable,O
in,O
the,O
transaction,O
agreements,O
",",O
other,O
than,O
residential,O
mortgage-backed,O
securities,O
and,O
other,O
mortgage-related,O
asset,O
backed,O
securities,O
.,O
,O
During,O
the,O
reporting,O
period,O
",",O
certain,O
payments,O
on,O
pool,O
assets,O
were,O
not,O
deposited,O
into,O
the,O
appropriate,O
segregated,O
custodial,O
bank,O
account,O
within,O
the,O
time,O
frame,O
required,O
by,O
the,O
related,O
transaction,O
documents,O
.,O
,O
The,O
segregated,O
account,O
for,O
each,O
specified,O
series,O
of,O
securities,O
was,O
in,O
existence,O
prior,O
to,O
the,O
time,O
the,O
deposits,O
were,O
to,O
be,O
made,O
into,O
such,O
account,O
but,O
such,O
account,O
was,O
not,O
utilized,O
in,O
all,O
instances,O
by,O
BNY,I-BUSINESS
as,O
stated,O
above,O
.,O
,O
However,O
",",O
payments,O
related,O
to,O
each,O
specified,O
series,O
of,O
securities,O
were,O
timely,O
remitted,O
to,O
the,O
investors,O
in,O
such,O
series,O
.,O
,O
Existing,O
procedures,O
have,O
been,O
reviewed,O
with,O
staff,O
to,O
enable,O
future,O
payments,O
to,O
be,O
deposited,O
into,O
the,O
segregated,O
account,O
for,O
each,O
specified,O
series,O
within,O
the,O
applicable,O
time,O
frames,O
.,O
,O
(,O
a,O
),O
(,O
1,O
),O
Not,O
Applicable,O
.,O
,O
(,O
a,O
),O
(,O
2,O
),O
Not,O
Applicable,O
.,O
,O
(,O
a,O
),O
(,O
3,O
),O
See,O
Item,O
15,O
(,O
b,O
),O
below,O
.,O
,O
SUPPLEMENTAL,O
INFORMATION,O
TO,O
BE,O
FURNISHED,O
WITH,O
REPORTS,O
FILED,O
PURSUANT,O
TO,O
SECTION,O
15,O
(,O
d,O
),O
OF,O
THE,O
ACT,O
BY,O
REGISTRANTS,O
WHICH,O
HAVE,O
NOT,O
REGISTERED,O
SECURITIES,O
PURSUANT,O
TO,O
SECTION,O
12,O
OF,O
THE,O
ACT,O
.,O
,O
No,O
annual,O
report,O
to,O
security,O
holders,O
or,O
proxy,O
statement,O
",",O
form,O
of,O
proxy,O
or,O
other,O
proxy,O
soliciting,O
material,O
has,O
been,O
sent,O
to,O
security,O
holders,O
or,O
is,O
anticipated,O
to,O
be,O
furnished,O
to,O
security,O
holders,O
subsequent,O
to,O
the,O
filing,O
of,O
this,O
annual,O
report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
Section,O
13,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
.,O
,O
CHASE,I-BUSINESS
ISSUANCE,I-BUSINESS
TRUST/,I-BUSINESS
FIRST,B-BUSINESS
USA,I-BUSINESS
CREDIT,I-BUSINESS
CARD,I-BUSINESS
MASTER,I-BUSINESS
TRUST/,I-BUSINESS
CHASE,B-BUSINESS
CREDIT,I-BUSINESS
CARD,I-BUSINESS
MASTER,I-BUSINESS
TRUST,I-BUSINESS
(,O
Issuing,O
entities,O
),O
,O
CHASE,I-BUSINESS
BANK,I-BUSINESS
USA,I-BUSINESS
",",I-BUSINESS
NATIONAL,I-BUSINESS
ASSOCIATION,I-BUSINESS
",",O
,O
(,O
senior,O
officer,O
of,O
Chase,I-BUSINESS
Bank,I-BUSINESS
USA,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
in,O
charge,O
of,O
securitization,O
),O
,O
Exhibit,O
31.1,O
Exhibit,O
31.1,O
I,O
",",O
Keith,I-PERSON
W.,I-PERSON
Schuck,I-PERSON
",",O
certify,O
that,O
:,O
,O
In,O
giving,O
the,O
certification,O
above,O
",",O
I,O
have,O
reasonably,O
relied,O
on,O
information,O
provided,O
to,O
me,O
by,O
the,O
following,O
unaffiliated,O
parties,O
:,O
BNY,I-BUSINESS
Mellon,I-BUSINESS
Trust,I-BUSINESS
of,I-BUSINESS
Delaware,I-BUSINESS
",",O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Mellon,I-BUSINESS
",",O
Wilmington,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
and,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
.,O
,O
(,O
senior,O
officer,O
of,O
Chase,I-BUSINESS
Bank,I-BUSINESS
USA,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
in,O
charge,O
of,O
securitization,O
),O
,O
Class,O
A,O
(,O
2002-6,O
),O
Class,O
A,O
(,O
2003-4,O
),O
Class,O
A,O
(,O
2003-8,O
),O
Class,O
A,O
(,O
2004-1,O
),O
Class,O
A,O
(,O
2004-3,O
),O
Class,O
A,O
(,O
2004-5,O
),O
Class,O
A,O
(,O
2004-6,O
),O
Class,O
A,O
(,O
2004-7,O
),O
Class,O
A,O
(,O
2004-8,O
),O
Class,O
A,O
(,O
2005-2,O
),O
Class,O
A,O
(,O
2005-3,O
),O
Class,O
A,O
(,O
2005-4,O
),O
Class,O
A,O
(,O
2005-5,O
),O
Class,O
A,O
(,O
2005-6,O
),O
Class,O
A,O
(,O
2005-7,O
),O
Class,O
A,O
(,O
2005-8,O
),O
Class,O
A,O
(,O
2005-9,O
),O
Class,O
A,O
(,O
2005-10,O
),O
Class,O
A,O
(,O
2005-11,O
),O
Class,O
A,O
(,O
2005-13,O
),O
Class,O
A,O
(,O
2006-1,O
),O
Class,O
A,O
(,O
2006-2,O
),O
Class,O
A,O
(,O
2006-3,O
),O
Class,O
A,O
(,O
2006-4,O
),O
Class,O
A,O
(,O
2006-5,O
),O
Class,O
A,O
(,O
2006-6,O
),O
Class,O
A,O
(,O
2006-7,O
),O
Class,O
A,O
(,O
2006-8,O
),O
Class,O
A,O
(,O
2007-1,O
),O
Class,O
A,O
(,O
2007-2,O
),O
Class,O
A,O
(,O
2007-3,O
),O
Class,O
A,O
(,O
2007-4,O
),O
Class,O
A,O
(,O
2007-5,O
),O
Class,O
A,O
(,O
2007-6,O
),O
Class,O
A,O
(,O
2007-7,O
),O
Class,O
A,O
(,O
2007-8,O
),O
Class,O
A,O
(,O
2007-9,O
),O
Class,O
A,O
(,O
2007-10,O
),O
Class,O
A,O
(,O
2007-11,O
),O
Class,O
A,O
(,O
2007-12,O
),O
Class,O
A,O
(,O
2007-13,O
),O
Class,O
A,O
(,O
2007-14,O
),O
Class,O
A,O
(,O
2007-15,O
),O
,O
Class,O
A,O
(,O
2007-16,O
),O
Class,O
A,O
(,O
2007-17,O
),O
Class,O
A,O
(,O
2007-18,O
),O
Class,O
A,O
(,O
2008-1,O
),O
Class,O
A,O
(,O
2008-2,O
),O
Class,O
A,O
(,O
2008-3,O
),O
Class,O
A,O
(,O
2008-4,O
),O
Class,O
A,O
(,O
2008-5,O
),O
Class,O
A,O
(,O
2008-6,O
),O
Class,O
A,O
(,O
2008-7,O
),O
Class,O
A,O
(,O
2008-8,O
),O
Class,O
A,O
(,O
2008-9,O
),O
Class,O
A,O
(,O
2008-10,O
),O
Class,O
A,O
(,O
2008-11,O
),O
Class,O
A,O
(,O
2008-12,O
),O
Class,O
A,O
(,O
2008-13,O
),O
Class,O
A,O
(,O
2008-14,O
),O
Class,O
A,O
(,O
2009-2,O
),O
Class,O
A,O
(,O
2009-3,O
),O
Class,O
A,O
(,O
2009-4,O
),O
Class,O
A,O
(,O
2009-5,O
),O
Class,O
A,O
(,O
2009-6,O
),O
Class,O
A,O
(,O
2009-7,O
),O
Class,O
A,O
(,O
2009-8,O
),O
Class,O
B,O
(,O
2004-01,O
),O
Class,O
B,O
(,O
2004-02,O
),O
Class,O
B,O
(,O
2006-01,O
),O
Class,O
B,O
(,O
2006-02,O
),O
Class,O
B,O
(,O
2007-01,O
),O
Class,O
C,O
(,O
2003-03,O
),O
Class,O
C,O
(,O
2004-01,O
),O
Class,O
C,O
(,O
2004-02,O
),O
Class,O
C,O
(,O
2004-03,O
),O
Class,O
C,O
(,O
2005-01,O
),O
Class,O
C,O
(,O
2005-02,O
),O
Class,O
C,O
(,O
2005-03,O
),O
Class,O
C,O
(,O
2006-02,O
),O
Class,O
C,O
(,O
2006-03,O
),O
Class,O
C,O
(,O
2006-04,O
),O
Class,O
C,O
(,O
2007-01,O
),O
,O
Corporate,O
Trust,O
Services,O
division,O
of,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
(,O
the,O
Company,O
),O
is,O
responsible,O
for,O
assessing,O
compliance,O
with,O
the,O
servicing,O
criteria,O
set,O
forth,O
in,O
Item,O
1122,O
(,O
d,O
),O
of,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
promulgated,O
by,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
.,O
,O
The,O
Company,O
has,O
determined,O
that,O
the,O
servicing,O
criteria,O
are,O
applicable,O
in,O
regards,O
to,O
the,O
servicing,O
platform,O
for,O
the,O
period,O
as,O
follows,O
:,O
Platform,O
:,O
Publicly-issued,O
(,O
i.e.,O
",",O
transaction-level,O
reporting,O
initially,O
required,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
),O
residential,O
mortgage-backed,O
securities,O
",",O
commercial,O
mortgage-backed,O
securities,O
and,O
other,O
asset-backed,O
securities,O
",",O
for,O
which,O
the,O
Company,O
provides,O
master,O
servicing,O
",",O
trustee,O
",",O
securities,O
administration,O
or,O
paying,O
agent,O
services,O
",",O
excluding,O
any,O
publicly,O
issued,O
transactions,O
issued,O
by,O
any,O
agency,O
or,O
instrumentality,O
of,O
the,O
U.S.,I-LOCATION
government,O
or,O
any,O
government,O
sponsored,O
entity,O
",",O
and,O
further,O
excluding,O
the,O
transactions,O
issued,O
prior,O
to,O
2006,O
for,O
which,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
outsources,O
all,O
material,O
servicing,O
activities,O
(,O
as,O
defined,O
by,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
),O
(,O
the,O
Platform,O
),O
.,O
,O
Applicable,O
Servicing,O
Criteria,O
:,O
All,O
servicing,O
criteria,O
set,O
forth,O
in,O
Item,O
1122,O
(,O
d,O
),O
",",O
to,O
the,O
extent,O
required,O
in,O
the,O
related,O
transaction,O
agreements,O
",",O
or,O
required,O
by,O
the,O
Item,O
1122,O
(,O
d,O
),O
servicing,O
criteria,O
in,O
regards,O
to,O
the,O
activities,O
performed,O
by,O
the,O
Company,O
",",O
except,O
for,O
the,O
following,O
criteria,O
:,O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
ii,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
iv,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
v,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
viii,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
ix,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
x,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
xi,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
xii,O
),O
and,O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
xiii,O
),O
",",O
which,O
Management,O
has,O
determined,O
are,O
not,O
applicable,O
to,O
the,O
activities,O
the,O
Company,O
performs,O
with,O
respect,O
to,O
the,O
Platform,O
(,O
the,O
Applicable,O
Servicing,O
Criteria,O
),O
.,O
,O
Period,O
:,O
As,O
of,O
and,O
for,O
the,O
twelve,O
months,O
ended,O
December,O
31,O
",",O
2009,O
(,O
the,O
Period,O
),O
.,O
,O
Third,O
parties,O
classified,O
as,O
vendors,O
:,O
With,O
respect,O
to,O
servicing,O
criteria,O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
i,O
),O
",",O
the,O
Company,O
has,O
engaged,O
various,O
vendors,O
to,O
handle,O
certain,O
Uniform,O
Commercial,O
Code,O
filing,O
functions,O
required,O
by,O
the,O
servicing,O
criteria,O
(,O
vendors,O
),O
.,O
,O
The,O
Company,O
has,O
determined,O
that,O
none,O
of,O
these,O
vendors,O
are,O
a,O
servicer,O
as,O
defined,O
in,O
Item,O
1101,O
(,O
j,O
),O
of,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
",",O
and,O
the,O
Company,O
elects,O
to,O
take,O
responsibility,O
for,O
assessing,O
compliance,O
with,O
the,O
portion,O
of,O
the,O
servicing,O
criteria,O
applicable,O
to,O
each,O
vendor,O
as,O
permitted,O
by,O
Interpretation,O
17.06,O
of,O
the,O
SEC,I-GOVERNMENT
Division,I-GOVERNMENT
of,I-GOVERNMENT
Corporation,I-GOVERNMENT
Finance,I-GOVERNMENT
Manual,B-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Publicly,I-LEGISLATION/ACT
Available,I-LEGISLATION/ACT
Telephone,I-LEGISLATION/ACT
Interpretations,I-LEGISLATION/ACT
(,O
Interpretation,O
17.06,O
),O
.,O
,O
The,O
Company,O
has,O
policies,O
and,O
procedures,O
in,O
place,O
to,O
provide,O
reasonable,O
assurance,O
that,O
the,O
vendor,O
s,O
activities,O
comply,O
in,O
all,O
material,O
respects,O
with,O
the,O
servicing,O
criteria,O
applicable,O
to,O
each,O
vendor,O
.,O
,O
The,O
Company,O
is,O
solely,O
responsible,O
for,O
determining,O
that,O
it,O
meets,O
the,O
SEC,I-GOVERNMENT
requirements,O
to,O
apply,O
Interpretation,O
17.06,O
for,O
the,O
vendors,O
and,O
related,O
criteria,O
.,O
,O
With,O
respect,O
to,O
the,O
Platform,O
and,O
the,O
Period,O
",",O
the,O
Company,O
provides,O
the,O
following,O
assessment,O
of,O
compliance,O
with,O
respect,O
to,O
the,O
Applicable,O
Servicing,O
Criteria,O
:,O
1,O
.,O
,O
The,O
Company,O
is,O
responsible,O
for,O
assessing,O
its,O
compliance,O
with,O
the,O
Applicable,O
Servicing,O
Criteria,O
.,O
,O
The,O
Company,O
has,O
assessed,O
compliance,O
with,O
the,O
Applicable,O
Servicing,O
Criteria,O
",",O
including,O
servicing,O
criteria,O
for,O
which,O
compliance,O
is,O
determined,O
based,O
on,O
Interpretation,O
17.06,O
as,O
described,O
above,O
",",O
as,O
of,O
and,O
for,O
the,O
Period,O
.,O
,O
In,O
performing,O
this,O
assessment,O
",",O
management,O
used,O
the,O
criteria,O
set,O
forth,O
by,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
in,O
paragraph,O
(,O
d,O
),O
of,O
Item,O
1122,O
of,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
.,O
,O
Based,O
on,O
such,O
assessment,O
as,O
of,O
and,O
for,O
the,O
Period,O
",",O
the,O
Company,O
has,O
complied,O
",",O
in,O
all,O
material,O
respects,O
with,O
the,O
applicable,O
servicing,O
criteria,O
.,O
,O
KPMG,I-BUSINESS
LLP,I-BUSINESS
",",O
a,O
registered,O
public,O
accounting,O
firm,O
",",O
has,O
issued,O
an,O
attestation,O
report,O
with,O
respect,O
to,O
the,O
Company,O
s,O
assessment,O
of,O
compliance,O
as,O
of,O
and,O
for,O
the,O
Period,O
.,O
,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Mellon,I-BUSINESS
(,O
formerly,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
),O
",",O
BNY,I-BUSINESS
Mellon,I-BUSINESS
Trust,I-BUSINESS
of,I-BUSINESS
Delaware,I-BUSINESS
(,O
formerly,O
BNYM,I-BUSINESS
(,I-BUSINESS
Delaware,I-BUSINESS
),I-BUSINESS
),O
and,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Mellon,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
(,O
formerly,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
),O
",",O
(,O
collectively,O
",",O
the,O
Company,O
),O
provides,O
this,O
platform-level,O
assessment,O
of,O
compliance,O
with,O
the,O
servicing,O
criteria,O
specified,O
in,O
Item,O
1122,O
(,O
d,O
),O
of,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
promulgated,O
by,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
.,O
,O
Management,O
has,O
determined,O
that,O
the,O
servicing,O
criteria,O
are,O
applicable,O
in,O
regard,O
to,O
the,O
servicing,O
platform,O
as,O
of,O
and,O
for,O
the,O
period,O
as,O
follows,O
:,O
Platform,O
:,O
Publicly-issued,O
(,O
i.e.,O
",",O
transaction-level,O
reporting,O
initially,O
required,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
),O
asset-backed,O
securities,O
issued,O
on,O
or,O
after,O
January,O
1,O
",",O
2006,O
and,O
like-kind,O
transactions,O
issued,O
prior,O
to,O
January,O
1,O
",",O
2006,O
that,O
comply,O
with,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
for,O
which,O
the,O
Company,O
provides,O
trustee,O
",",O
securities,O
administration,O
or,O
paying,O
agent,O
services,O
",",O
as,O
defined,O
and,O
to,O
the,O
extent,O
applicable,O
in,O
the,O
transaction,O
agreements,O
",",O
other,O
than,O
residential,O
mortgage-backed,O
securities,O
and,O
other,O
mortgage-related,O
asset-backed,O
securities,O
.,O
,O
Period,O
:,O
Twelve,O
months,O
ended,O
December,O
31,O
",",O
2009,O
(,O
the,O
Period,O
),O
.,O
,O
Applicable,O
Servicing,O
Criteria,O
:,O
All,O
servicing,O
criteria,O
set,O
forth,O
in,O
Item,O
1122,O
(,O
d,O
),O
",",O
to,O
the,O
extent,O
required,O
by,O
the,O
related,O
transaction,O
agreements,O
as,O
to,O
any,O
transaction,O
",",O
except,O
as,O
set,O
forth,O
in,O
the,O
column,O
titled,O
Not,O
Applicable,O
To,O
Platform,O
in,O
Appendix,O
1,O
attached,O
hereto,O
.,O
,O
With,O
respect,O
to,O
applicable,O
servicing,O
criteria,O
1122,O
(,O
d,O
),O
(,O
2,O
),O
(,O
iii,O
),O
and,O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
vii,O
),O
",",O
there,O
were,O
no,O
activities,O
performed,O
during,O
the,O
Period,O
with,O
respect,O
to,O
the,O
Platform,O
",",O
because,O
there,O
were,O
no,O
occurrences,O
of,O
events,O
that,O
would,O
require,O
the,O
Company,O
to,O
perform,O
such,O
activities,O
.,O
,O
With,O
respect,O
to,O
servicing,O
criteria,O
1122,O
(,O
d,O
),O
(,O
2,O
),O
(,O
vi,O
),O
management,O
has,O
engaged,O
a,O
vendor,O
to,O
perform,O
the,O
activities,O
required,O
by,O
these,O
servicing,O
criteria,O
.,O
,O
Management,O
has,O
determined,O
that,O
this,O
vendor,O
is,O
not,O
considered,O
a,O
servicer,O
as,O
defined,O
in,O
Item,O
1101,O
(,O
j,O
),O
of,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
",",O
and,O
management,O
has,O
elected,O
to,O
take,O
responsibility,O
for,O
assessing,O
compliance,O
with,O
the,O
servicing,O
criteria,O
applicable,O
to,O
this,O
vendor,O
as,O
permitted,O
by,O
Interpretation,O
17.06,O
of,O
the,O
SEC,I-GOVERNMENT
Division,I-GOVERNMENT
of,I-GOVERNMENT
Corporation,I-GOVERNMENT
Finance,I-GOVERNMENT
Manual,B-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Publicly,I-LEGISLATION/ACT
Available,I-LEGISLATION/ACT
Telephone,I-LEGISLATION/ACT
Interpretations,I-LEGISLATION/ACT
(,O
Interpretation,O
17.06,O
),O
.,O
,O
Management,O
has,O
policies,O
and,O
procedures,O
in,O
place,O
designed,O
to,O
provide,O
reasonable,O
assurance,O
that,O
the,O
vendor,O
s,O
activities,O
comply,O
in,O
all,O
material,O
respects,O
with,O
the,O
servicing,O
criteria,O
applicable,O
to,O
the,O
vendor,O
.,O
,O
Management,O
is,O
solely,O
responsible,O
for,O
determining,O
that,O
it,O
meets,O
the,O
SEC,I-GOVERNMENT
requirements,O
to,O
apply,O
Interpretation,O
17.06,O
for,O
the,O
vendor,O
and,O
related,O
criteria,O
.,O
,O
With,O
respect,O
to,O
the,O
Platform,O
and,O
the,O
Period,O
",",O
the,O
Company,O
provides,O
the,O
following,O
assessment,O
of,O
compliance,O
in,O
respect,O
of,O
the,O
Applicable,O
Servicing,O
Criteria,O
:,O
1,O
.,O
,O
The,O
Company,O
is,O
responsible,O
for,O
assessing,O
its,O
compliance,O
with,O
the,O
Applicable,O
Servicing,O
Criteria,O
.,O
,O
The,O
Company,O
has,O
assessed,O
compliance,O
with,O
the,O
Applicable,O
Servicing,O
Criteria,O
including,O
servicing,O
criteria,O
for,O
which,O
compliance,O
is,O
determined,O
based,O
on,O
Interpretation,O
17.06,O
as,O
described,O
above,O
.,O
,O
In,O
performing,O
this,O
assessment,O
",",O
management,O
used,O
the,O
criteria,O
set,O
forth,O
by,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
in,O
paragraph,O
(,O
d,O
),O
of,O
Item,O
1122,O
of,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
.,O
,O
Based,O
on,O
such,O
assessment,O
",",O
as,O
of,O
and,O
for,O
the,O
Period,O
",",O
the,O
Company,O
has,O
complied,O
",",O
in,O
all,O
material,O
respects,O
",",O
with,O
the,O
Applicable,O
Servicing,O
Criteria,O
other,O
than,O
as,O
identified,O
on,O
Schedule,O
A,O
attached,O
.,O
,O
KPMG,I-BUSINESS
LLP,I-BUSINESS
",",O
an,O
independent,O
registered,O
public,O
accounting,O
firm,O
",",O
has,O
issued,O
an,O
attestation,O
report,O
with,O
respect,O
to,O
the,O
Company,O
s,O
compliance,O
with,O
the,O
Applicable,O
Servicing,O
Criteria,O
as,O
of,O
and,O
for,O
the,O
Period,O
.,O
,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Mellon,I-BUSINESS
TrustCompany,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Mellon,I-BUSINESS
TrustCompany,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Mellon,I-BUSINESS
TrustCompany,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
1122,O
(,O
d,O
),O
(,O
2,O
),O
(,O
i,O
),O
:,O
Payments,O
on,O
pool,O
assets,O
are,O
deposited,O
into,O
the,O
appropriate,O
custodial,O
bank,O
accounts,O
and,O
related,O
bank,O
clearing,O
accounts,O
no,O
more,O
than,O
two,O
business,O
days,O
of,O
receipt,O
",",O
or,O
such,O
other,O
number,O
of,O
days,O
specified,O
in,O
the,O
transaction,O
agreements,O
.,O
,O
During,O
the,O
reporting,O
period,O
",",O
certain,O
payments,O
on,O
pool,O
assets,O
were,O
not,O
deposited,O
into,O
the,O
appropriate,O
segregated,O
custodial,O
bank,O
account,O
within,O
the,O
time,O
frame,O
required,O
by,O
the,O
related,O
transaction,O
documents,O
.,O
,O
The,O
segregated,O
account,O
for,O
each,O
specified,O
series,O
of,O
securities,O
was,O
in,O
existence,O
prior,O
to,O
the,O
time,O
the,O
deposits,O
were,O
to,O
be,O
made,O
into,O
such,O
account,O
but,O
such,O
account,O
was,O
not,O
utilized,O
in,O
all,O
instances,O
by,O
the,O
Trustee,O
as,O
stated,O
above,O
.,O
,O
However,O
",",O
payments,O
related,O
to,O
each,O
specified,O
series,O
of,O
securities,O
were,O
timely,O
remitted,O
to,O
the,O
investors,O
in,O
such,O
series,O
.,O
,O
Existing,O
procedures,O
have,O
been,O
reviewed,O
with,O
staff,O
to,O
enable,O
future,O
payments,O
to,O
be,O
deposited,O
into,O
the,O
segregated,O
account,O
for,O
each,O
specified,O
series,O
within,O
the,O
applicable,O
time,O
frames,O
.,O
,O
To,O
the,O
Stockholder,O
of,O
Chase,I-BUSINESS
Bank,I-BUSINESS
USA,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
:,O
We,O
have,O
examined,O
Chase,I-BUSINESS
Bank,I-BUSINESS
USA,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
s,O
(,O
the,O
Bank,O
),O
compliance,O
with,O
the,O
servicing,O
criteria,O
set,O
forth,O
in,O
Item,O
1122,O
(,O
d,O
),O
of,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
s,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
for,O
the,O
asset-backed,O
securities,O
transactions,O
for,O
which,O
the,O
Bank,O
performed,O
servicing,O
functions,O
set,O
forth,O
in,O
Item,O
1122,O
(,O
d,O
),O
involving,O
credit,O
card,O
receivables,O
",",O
for,O
which,O
transactions,O
the,O
Bank,O
acted,O
as,O
servicer,O
",",O
that,O
were,O
registered,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
pursuant,O
to,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
on,O
or,O
after,O
January,O
1,O
",",O
2006,O
",",O
where,O
the,O
related,O
asset-backed,O
securities,O
were,O
outstanding,O
(,O
the,O
Platform,O
),O
described,O
in,O
the,O
accompanying,O
Management,O
s,O
Report,O
on,O
Assessment,O
of,O
Compliance,O
with,O
Applicable,O
Servicing,O
Criteria,O
as,O
of,O
and,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
",",O
excluding,O
criteria,O
1122,O
(,O
d,O
),O
(,O
1,O
),O
(,O
ii,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
1,O
),O
(,O
iii,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
2,O
),O
(,O
iii,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
2,O
),O
(,O
iv,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
3,O
),O
(,O
iii,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
i,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
ii,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
x,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
xi,O
),O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
xii,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
xiii,O
),O
",",O
and,O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
xv,O
),O
",",O
which,O
the,O
Bank,O
has,O
determined,O
are,O
not,O
applicable,O
to,O
the,O
activities,O
performed,O
by,O
it,O
with,O
respect,O
to,O
the,O
Platform,O
.,O
,O
Exhibit,O
B,O
to,O
management,O
s,O
assertion,O
identifies,O
the,O
individual,O
asset-backed,O
transactions,O
and,O
securities,O
defined,O
by,O
management,O
as,O
constituting,O
the,O
Platform,O
.,O
,O
Management,O
is,O
responsible,O
for,O
the,O
Bank,O
s,O
compliance,O
with,O
the,O
servicing,O
criteria,O
.,O
,O
Our,O
responsibility,O
is,O
to,O
express,O
an,O
opinion,O
on,O
the,O
Bank,O
s,O
compliance,O
with,O
the,O
servicing,O
criteria,O
based,O
on,O
our,O
examination,O
.,O
,O
Our,O
examination,O
was,O
conducted,O
in,O
accordance,O
with,O
attestation,O
standards,O
of,O
the,O
Public,I-GOVERNMENT
Company,I-GOVERNMENT
Accounting,I-GOVERNMENT
Oversight,I-GOVERNMENT
Board,I-GOVERNMENT
(,I-GOVERNMENT
United,I-GOVERNMENT
States,I-GOVERNMENT
),I-GOVERNMENT
and,O
",",O
accordingly,O
",",O
included,O
examining,O
",",O
on,O
a,O
test,O
basis,O
",",O
evidence,O
about,O
the,O
Bank,O
s,O
compliance,O
with,O
the,O
applicable,O
servicing,O
criteria,O
and,O
performing,O
such,O
other,O
procedures,O
as,O
we,O
considered,O
necessary,O
in,O
the,O
circumstances,O
.,O
,O
Our,O
examination,O
included,O
testing,O
of,O
selected,O
asset-backed,O
transactions,O
and,O
securities,O
that,O
comprise,O
the,O
Platform,O
",",O
testing,O
of,O
selected,O
servicing,O
activities,O
related,O
to,O
the,O
Platform,O
",",O
and,O
determining,O
whether,O
the,O
Bank,O
processed,O
those,O
selected,O
transactions,O
and,O
performed,O
those,O
selected,O
activities,O
in,O
compliance,O
with,O
the,O
applicable,O
servicing,O
criteria,O
.,O
,O
Our,O
procedures,O
were,O
limited,O
to,O
the,O
selected,O
transactions,O
and,O
servicing,O
activities,O
performed,O
by,O
the,O
Bank,O
during,O
the,O
period,O
covered,O
by,O
this,O
report,O
.,O
,O
Our,O
procedures,O
were,O
not,O
designed,O
to,O
detect,O
noncompliance,O
arising,O
from,O
errors,O
that,O
may,O
have,O
occurred,O
prior,O
to,O
or,O
subsequent,O
to,O
our,O
tests,O
that,O
may,O
have,O
affected,O
the,O
balances,O
or,O
amounts,O
calculated,O
or,O
reported,O
by,O
the,O
Bank,O
during,O
the,O
period,O
covered,O
by,O
this,O
report,O
.,O
,O
We,O
believe,O
that,O
our,O
examination,O
provides,O
a,O
reasonable,O
basis,O
for,O
our,O
opinion,O
.,O
,O
Our,O
examination,O
does,O
not,O
provide,O
a,O
legal,O
determination,O
on,O
the,O
Bank,O
s,O
compliance,O
with,O
the,O
servicing,O
criteria,O
.,O
,O
In,O
our,O
opinion,O
",",O
the,O
Bank,O
complied,O
with,O
the,O
aforementioned,O
applicable,O
servicing,O
criteria,O
as,O
of,O
and,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
for,O
the,O
Platform,O
",",O
in,O
all,O
material,O
respects,O
.,O
,O
The,O
Board,O
of,O
Directors,O
The,O
Corporate,O
Trust,O
Services,O
division,O
of,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
:,O
We,O
have,O
examined,O
management,O
s,O
assessment,O
",",O
included,O
in,O
the,O
accompanying,O
Assessment,O
of,O
Compliance,O
with,O
Applicable,O
Servicing,O
Criteria,O
",",O
that,O
The,O
Corporate,O
Trust,O
Services,O
division,O
of,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
(,O
the,O
Company,O
),O
complied,O
with,O
the,O
servicing,O
criteria,O
set,O
forth,O
in,O
Item,O
1122,O
(,O
d,O
),O
of,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
s,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
for,O
publicly-issued,O
(,O
i.e.,O
",",O
transaction-level,O
reporting,O
initially,O
required,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
),O
residential,O
mortgage-backed,O
securities,O
",",O
commercial,O
mortgage-backed,O
securities,O
",",O
and,O
other,O
asset-backed,O
securities,O
",",O
for,O
which,O
the,O
Company,O
provides,O
master,O
servicing,O
",",O
trustee,O
",",O
securities,O
administration,O
",",O
or,O
paying,O
agent,O
services,O
",",O
excluding,O
transactions,O
issued,O
by,O
any,O
agency,O
or,O
instrumentality,O
of,O
the,O
U.S.,I-LOCATION
government,O
or,O
any,O
government,O
sponsored,O
entity,O
and,O
further,O
excluding,O
the,O
transactions,O
issued,O
prior,O
to,O
2006,O
for,O
which,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
outsources,O
all,O
material,O
servicing,O
activities,O
(,O
as,O
defined,O
by,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
),O
(,O
the,O
Platform,O
),O
",",O
except,O
for,O
servicing,O
criteria,O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
ii,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
iv,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
v,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
viii,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
ix,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
x,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
xi,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
xii,O
),O
",",O
and,O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
xiii,O
),O
",",O
which,O
the,O
Company,O
has,O
determined,O
are,O
not,O
applicable,O
to,O
the,O
activities,O
it,O
performs,O
with,O
respect,O
to,O
the,O
Platform,O
",",O
as,O
of,O
and,O
for,O
the,O
twelve,O
months,O
ended,O
December,O
31,O
",",O
2009,O
.,O
,O
Management,O
is,O
responsible,O
for,O
the,O
Company,O
s,O
compliance,O
with,O
the,O
servicing,O
criteria,O
.,O
,O
Our,O
responsibility,O
is,O
to,O
express,O
an,O
opinion,O
on,O
management,O
s,O
assessment,O
about,O
the,O
Company,O
s,O
compliance,O
based,O
on,O
our,O
examination,O
.,O
,O
Our,O
examination,O
was,O
conducted,O
in,O
accordance,O
with,O
the,O
standards,O
of,O
the,O
Public,I-GOVERNMENT
Company,I-GOVERNMENT
Accounting,I-GOVERNMENT
Oversight,I-GOVERNMENT
Board,I-GOVERNMENT
(,I-GOVERNMENT
United,I-GOVERNMENT
States,I-GOVERNMENT
),I-GOVERNMENT
and,O
",",O
accordingly,O
",",O
included,O
examining,O
",",O
on,O
a,O
test,O
basis,O
",",O
evidence,O
about,O
the,O
Company,O
s,O
compliance,O
with,O
the,O
servicing,O
criteria,O
specified,O
above,O
and,O
performing,O
such,O
other,O
procedures,O
as,O
we,O
considered,O
necessary,O
in,O
the,O
circumstances,O
.,O
,O
Our,O
examination,O
included,O
testing,O
selected,O
asset-backed,O
transactions,O
and,O
securities,O
that,O
comprise,O
the,O
Platform,O
",",O
testing,O
selected,O
servicing,O
activities,O
related,O
to,O
the,O
Platform,O
",",O
and,O
determining,O
whether,O
the,O
Company,O
processed,O
those,O
selected,O
transactions,O
and,O
performed,O
those,O
selected,O
activities,O
in,O
compliance,O
with,O
the,O
servicing,O
criteria,O
.,O
,O
Furthermore,O
",",O
our,O
procedures,O
were,O
limited,O
to,O
the,O
selected,O
transactions,O
and,O
servicing,O
activities,O
performed,O
by,O
the,O
Company,O
during,O
the,O
period,O
covered,O
by,O
this,O
report,O
.,O
,O
Our,O
procedures,O
were,O
not,O
designed,O
to,O
determine,O
whether,O
errors,O
may,O
have,O
occurred,O
either,O
prior,O
to,O
or,O
subsequent,O
to,O
our,O
tests,O
that,O
may,O
have,O
affected,O
the,O
balances,O
or,O
amounts,O
calculated,O
or,O
reported,O
by,O
the,O
Company,O
during,O
the,O
period,O
covered,O
by,O
this,O
report,O
for,O
the,O
selected,O
transactions,O
or,O
any,O
other,O
transactions,O
.,O
,O
We,O
believe,O
that,O
our,O
examination,O
provides,O
a,O
reasonable,O
basis,O
for,O
our,O
opinion,O
.,O
,O
Our,O
examination,O
does,O
not,O
provide,O
a,O
legal,O
determination,O
on,O
the,O
Company,O
s,O
compliance,O
with,O
the,O
servicing,O
criteria,O
.,O
,O
As,O
described,O
in,O
the,O
accompanying,O
management,O
s,O
Assessment,O
of,O
Compliance,O
With,O
Applicable,O
Servicing,O
Criteria,O
",",O
for,O
servicing,O
criteria,O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
i,O
),O
",",O
the,O
Company,O
has,O
engaged,O
a,O
vendor,O
to,O
perform,O
the,O
activities,O
required,O
by,O
these,O
servicing,O
criteria,O
.,O
,O
17.06,O
of,O
the,O
SEC,I-GOVERNMENT
Division,I-GOVERNMENT
of,I-GOVERNMENT
Corporation,I-GOVERNMENT
Finance,I-GOVERNMENT
Manual,B-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Publicly,I-LEGISLATION/ACT
Available,I-LEGISLATION/ACT
Telephone,I-LEGISLATION/ACT
Interpretations,I-LEGISLATION/ACT
(,O
Interpretation,O
17.06,O
),O
.,O
,O
As,O
permitted,O
by,O
Interpretation,O
17.06,O
",",O
the,O
Company,O
has,O
asserted,O
that,O
it,O
has,O
policies,O
and,O
procedures,O
in,O
place,O
designed,O
to,O
provide,O
reasonable,O
assurance,O
that,O
the,O
vendor,O
s,O
activities,O
comply,O
in,O
all,O
material,O
respects,O
with,O
the,O
servicing,O
criteria,O
applicable,O
to,O
each,O
vendor,O
.,O
,O
The,O
Company,O
is,O
solely,O
responsible,O
for,O
determining,O
that,O
it,O
meets,O
the,O
SEC,I-GOVERNMENT
requirements,O
to,O
apply,O
Interpretation,O
17.06,O
for,O
the,O
vendor,O
and,O
related,O
criteria,O
as,O
described,O
in,O
its,O
assertion,O
",",O
and,O
we,O
performed,O
no,O
procedures,O
with,O
respect,O
to,O
the,O
Company,O
s,O
eligibility,O
to,O
apply,O
Interpretation,O
17.06,O
.,O
,O
In,O
our,O
opinion,O
",",O
management,O
s,O
assessment,O
that,O
the,O
Company,O
complied,O
with,O
the,O
aforementioned,O
servicing,O
criteria,O
",",O
including,O
servicing,O
criteria,O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
i,O
),O
for,O
which,O
compliance,O
is,O
determined,O
based,O
on,O
Interpretation,O
17.06,O
as,O
described,O
above,O
",",O
as,O
of,O
and,O
for,O
the,O
twelve,O
months,O
ended,O
December,O
31,O
",",O
2009,O
is,O
fairly,O
stated,O
",",O
in,O
all,O
material,O
respects,O
.,O
,O
The,O
Board,O
of,O
Directors,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Mellon,I-BUSINESS
BNY,B-BUSINESS
Mellon,I-BUSINESS
Trust,I-BUSINESS
of,I-BUSINESS
Delaware,I-BUSINESS
The,B-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Mellon,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
:,O
We,O
have,O
examined,O
the,O
compliance,O
of,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Mellon,I-BUSINESS
(,O
formerly,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
),O
",",O
BNY,I-BUSINESS
Mellon,I-BUSINESS
Trust,I-BUSINESS
of,I-BUSINESS
Delaware,I-BUSINESS
(,O
formerly,O
BNYM,I-BUSINESS
(,I-BUSINESS
Delaware,I-BUSINESS
),I-BUSINESS
),O
and,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Mellon,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
(,O
formerly,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
),O
",",O
(,O
collectively,O
",",O
the,O
Company,O
),O
with,O
the,O
servicing,O
criteria,O
set,O
forth,O
in,O
Item,O
1122,O
(,O
d,O
),O
of,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
s,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
for,O
the,O
publicly,O
issued,O
(,O
i.e.,O
transaction-level,O
reporting,O
initially,O
required,O
under,O
the,O
Securities,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
),O
asset-backed,O
securities,O
issued,O
on,O
or,O
after,O
January,O
1,O
",",O
2006,O
and,O
like-kind,O
transactions,O
issued,O
prior,O
to,O
January,O
1,O
",",O
2006,O
that,O
are,O
subject,O
to,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
for,O
which,O
the,O
Company,O
provides,O
trustee,O
",",O
securities,O
administration,O
or,O
paying,O
agent,O
services,O
",",O
as,O
defined,O
and,O
to,O
the,O
extent,O
applicable,O
in,O
the,O
transaction,O
agreements,O
",",O
other,O
than,O
residential,O
mortgage-backed,O
securities,O
and,O
other,O
mortgage-related,O
asset-backed,O
securities,O
(,O
the,O
Platform,O
),O
",",O
except,O
for,O
servicing,O
criteria,O
1122,O
(,O
d,O
),O
(,O
1,O
),O
(,O
iii,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
1,O
),O
(,O
iv,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
vi,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
viii,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
x,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
xi,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
xii,O
),O
",",O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
xiii,O
),O
and,O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
xiv,O
),O
",",O
which,O
the,O
Company,O
has,O
determined,O
are,O
not,O
applicable,O
to,O
the,O
activities,O
it,O
performs,O
with,O
respect,O
to,O
the,O
Platform,O
",",O
as,O
of,O
and,O
for,O
the,O
twelve,O
months,O
ended,O
December,O
31,O
",",O
2009,O
.,O
,O
With,O
respect,O
to,O
applicable,O
servicing,O
criteria,O
1122,O
(,O
d,O
),O
(,O
2,O
),O
(,O
iii,O
),O
and,O
1122,O
(,O
d,O
),O
(,O
4,O
),O
(,O
vii,O
),O
",",O
the,O
Company,O
s,O
Assertion,O
of,O
Compliance,O
with,O
Applicable,O
Servicing,O
Criteria,O
indicates,O
that,O
there,O
were,O
no,O
activities,O
performed,O
as,O
of,O
and,O
for,O
the,O
twelve,O
months,O
ended,O
December,O
31,O
",",O
2009,O
with,O
respect,O
to,O
the,O
Platform,O
",",O
because,O
there,O
were,O
no,O
occurrences,O
of,O
events,O
that,O
would,O
require,O
the,O
Company,O
to,O
perform,O
such,O
activities,O
.,O
,O
Management,O
is,O
responsible,O
for,O
the,O
Company,O
s,O
compliance,O
with,O
the,O
servicing,O
criteria,O
.,O
,O
Our,O
responsibility,O
is,O
to,O
express,O
an,O
opinion,O
on,O
the,O
Company,O
s,O
compliance,O
based,O
on,O
our,O
examination,O
.,O
,O
Our,O
examination,O
was,O
conducted,O
in,O
accordance,O
with,O
the,O
standards,O
of,O
the,O
Public,I-GOVERNMENT
Company,I-GOVERNMENT
Accounting,I-GOVERNMENT
Oversight,I-GOVERNMENT
Board,I-GOVERNMENT
(,I-GOVERNMENT
United,I-GOVERNMENT
States,I-GOVERNMENT
),I-GOVERNMENT
and,O
",",O
accordingly,O
",",O
included,O
examining,O
",",O
on,O
a,O
test,O
basis,O
",",O
evidence,O
about,O
the,O
Company,O
s,O
compliance,O
with,O
the,O
servicing,O
criteria,O
specified,O
above,O
and,O
performing,O
such,O
other,O
procedures,O
as,O
we,O
considered,O
necessary,O
in,O
the,O
circumstances,O
.,O
,O
Our,O
examination,O
included,O
testing,O
selected,O
asset-backed,O
transactions,O
and,O
securities,O
that,O
comprise,O
the,O
Platform,O
",",O
testing,O
selected,O
servicing,O
activities,O
related,O
to,O
the,O
Platform,O
",",O
and,O
determining,O
whether,O
the,O
Company,O
processed,O
those,O
selected,O
transactions,O
and,O
performed,O
those,O
selected,O
activities,O
in,O
compliance,O
with,O
the,O
servicing,O
criteria,O
.,O
,O
Furthermore,O
",",O
our,O
procedures,O
were,O
limited,O
to,O
the,O
selected,O
transactions,O
and,O
servicing,O
activities,O
performed,O
by,O
the,O
Company,O
during,O
the,O
period,O
covered,O
by,O
this,O
report,O
.,O
,O
Our,O
procedures,O
were,O
not,O
designed,O
to,O
determine,O
whether,O
errors,O
may,O
have,O
occurred,O
either,O
prior,O
to,O
or,O
subsequent,O
to,O
our,O
tests,O
that,O
may,O
have,O
affected,O
the,O
balances,O
or,O
amounts,O
calculated,O
or,O
reported,O
by,O
the,O
Company,O
during,O
the,O
period,O
covered,O
by,O
this,O
report,O
for,O
the,O
selected,O
transactions,O
or,O
any,O
other,O
transactions,O
.,O
,O
We,O
believe,O
that,O
our,O
examination,O
provides,O
a,O
reasonable,O
basis,O
for,O
our,O
opinion,O
.,O
,O
Our,O
examination,O
does,O
not,O
does,O
not,O
provide,O
a,O
legal,O
determination,O
on,O
the,O
Company,O
s,O
compliance,O
with,O
the,O
servicing,O
criteria,O
.,O
,O
As,O
described,O
in,O
the,O
accompanying,O
Assertion,O
of,O
Compliance,O
with,O
Applicable,O
Servicing,O
Criteria,O
",",O
for,O
servicing,O
criteria,O
1122,O
(,O
d,O
),O
(,O
2,O
),O
(,O
vi,O
),O
",",O
the,O
Company,O
has,O
engaged,O
a,O
vendor,O
to,O
perform,O
the,O
activities,O
required,O
by,O
these,O
servicing,O
criteria,O
.,O
,O
The,O
Company,O
has,O
determined,O
that,O
this,O
vendor,O
is,O
not,O
considered,O
a,O
servicer,O
as,O
defined,O
in,O
Item,O
1101,O
(,O
j,O
),O
of,O
Regulation,I-LEGISLATION/ACT
AB,I-LEGISLATION/ACT
",",O
and,O
the,O
Company,O
has,O
elected,O
to,O
take,O
responsibility,O
for,O
assessing,O
compliance,O
with,O
the,O
servicing,O
criteria,O
applicable,O
to,O
this,O
vendor,O
as,O
permitted,O
by,O
Interpretation,O
17.06,O
of,O
the,O
SEC,I-GOVERNMENT
Division,I-GOVERNMENT
of,I-GOVERNMENT
Corporation,I-GOVERNMENT
Finance,I-GOVERNMENT
Manual,B-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Publicly,I-LEGISLATION/ACT
Available,I-LEGISLATION/ACT
Telephone,I-LEGISLATION/ACT
Interpretations,I-LEGISLATION/ACT
(,O
Interpretation,O
17.06,O
),O
.,O
,O
As,O
permitted,O
by,O
Interpretation,O
17.06,O
",",O
the,O
Company,O
has,O
asserted,O
that,O
it,O
has,O
policies,O
and,O
procedures,O
in,O
place,O
designed,O
to,O
provide,O
reasonable,O
assurance,O
that,O
the,O
vendor,O
s,O
activities,O
comply,O
in,O
all,O
material,O
respects,O
with,O
the,O
servicing,O
criteria,O
applicable,O
to,O
the,O
vendor,O
.,O
,O
The,O
Company,O
is,O
solely,O
responsible,O
for,O
determining,O
that,O
it,O
meets,O
the,O
SEC,I-GOVERNMENT
requirements,O
to,O
apply,O
Interpretation,O
17.06,O
for,O
the,O
vendor,O
and,O
related,O
criteria,O
as,O
described,O
in,O
its,O
assertion,O
",",O
and,O
we,O
performed,O
no,O
procedures,O
with,O
respect,O
to,O
the,O
Company,O
s,O
eligibility,O
to,O
apply,O
Interpretation,O
17.06,O
.,O
,O
Our,O
examination,O
disclosed,O
material,O
noncompliance,O
with,O
the,O
following,O
servicing,O
criterion,O
applicable,O
to,O
the,O
Company,O
as,O
of,O
and,O
for,O
the,O
twelve,O
months,O
ended,O
December,O
31,O
",",O
2009,O
.,O
,O
For,O
servicing,O
criterion,O
1122,O
(,O
d,O
),O
(,O
2,O
),O
(,O
i,O
),O
",",O
certain,O
payments,O
on,O
pool,O
assets,O
were,O
not,O
deposited,O
to,O
the,O
appropriate,O
custodial,O
bank,O
accounts,O
as,O
required,O
by,O
the,O
related,O
transaction,O
agreements,O
.,O
,O
In,O
our,O
opinion,O
",",O
except,O
for,O
the,O
material,O
noncompliance,O
described,O
above,O
",",O
the,O
Company,O
complied,O
",",O
in,O
all,O
material,O
respects,O
",",O
with,O
the,O
aforementioned,O
servicing,O
criteria,O
",",O
including,O
servicing,O
criteria,O
1122,O
(,O
d,O
),O
(,O
2,O
),O
(,O
vi,O
),O
for,O
which,O
compliance,O
is,O
determined,O
based,O
on,O
Interpretation,O
17.06,O
as,O
described,O
above,O
as,O
of,O
and,O
for,O
the,O
twelve,O
months,O
ended,O
December,O
31,O
",",O
2009,O
.,O
,O
We,O
do,O
not,O
express,O
an,O
opinion,O
or,O
any,O
form,O
of,O
assurance,O
on,O
the,O
last,O
two,O
paragraphs,O
of,O
Schedule,O
A,O
Material,I-MISCELLANEOUS
Instances,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Non-Compliance,I-MISCELLANEOUS
by,O
the,O
Company,O
to,O
management,O
s,O
Assertion,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Compliance,I-MISCELLANEOUS
with,I-MISCELLANEOUS
Applicable,I-MISCELLANEOUS
Servicing,I-MISCELLANEOUS
Criteria,I-MISCELLANEOUS
.,O
,O
Exhibit,O
35.1,O
Exhibit,O
35.1,O
The,O
undersigned,O
",",O
a,O
duly,O
authorized,O
officer,O
of,O
Chase,I-BUSINESS
Bank,I-BUSINESS
USA,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
(,O
the,O
Bank,O
),O
",",O
as,O
Servicer,O
pursuant,O
to,O
the,O
Third,O
Amended,O
and,O
Restated,O
Transfer,O
and,O
Servicing,O
Agreement,O
",",O
dated,O
as,O
of,O
December,O
19,O
",",O
2007,O
",",O
as,O
amended,O
by,O
the,O
First,O
Amendment,O
to,O
the,O
Third,O
Amended,O
and,O
Restated,O
Transfer,O
and,O
Servicing,O
Agreement,O
",",O
dated,O
as,O
of,O
May,O
8,O
",",O
2009,O
(,O
as,O
amended,O
and,O
supplemented,O
from,O
time,O
to,O
time,O
",",O
the,O
Agreement,O
),O
among,O
the,O
Bank,O
",",O
as,O
transferor,O
",",O
administrator,O
and,O
servicer,O
(,O
in,O
such,O
capacity,O
",",O
the,O
Servicer,O
),O
",",O
Chase,I-BUSINESS
Issuance,I-BUSINESS
Trust,I-BUSINESS
and,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
",",O
as,O
indenture,O
trustee,O
and,O
collateral,O
agent,O
",",O
does,O
hereby,O
certify,O
that,O
:,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
the,O
undersigned,O
has,O
duly,O
executed,O
this,O
certificate,O
this,O
29th,O
day,O
of,O
March,O
2010,O
.,O
,O
Exhibit,O
35.2,O
Exhibit,O
35.2,O
The,O
undersigned,O
",",O
a,O
duly,O
authorized,O
officer,O
of,O
Chase,I-BUSINESS
Bank,I-BUSINESS
USA,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
(,O
the,O
Bank,O
),O
",",O
as,O
Servicer,O
pursuant,O
to,O
the,O
Third,O
Amended,O
and,O
Restated,O
Pooling,O
and,O
Servicing,O
Agreement,O
",",O
dated,O
as,O
of,O
December,O
19,O
",",O
2007,O
(,O
as,O
amended,O
and,O
supplemented,O
from,O
time,O
to,O
time,O
",",O
the,O
Agreement,O
),O
between,O
the,O
Bank,O
",",O
as,O
transferor,O
and,O
servicer,O
(,O
in,O
such,O
capacity,O
",",O
the,O
Servicer,O
),O
and,O
BNY,I-BUSINESS
Mellon,I-BUSINESS
Trust,I-BUSINESS
of,I-BUSINESS
Delaware,I-BUSINESS
",",O
as,O
trustee,O
",",O
does,O
hereby,O
certify,O
that,O
:,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
the,O
undersigned,O
has,O
duly,O
executed,O
this,O
certificate,O
this,O
29th,O
day,O
of,O
March,O
2010,O
.,O
,O
Exhibit,O
35.3,O
Exhibit,O
35.3,O
The,O
undersigned,O
",",O
a,O
duly,O
authorized,O
officer,O
of,O
Chase,I-BUSINESS
Bank,I-BUSINESS
USA,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
(,O
the,O
Bank,O
),O
",",O
as,O
Servicer,O
pursuant,O
to,O
the,O
Fifth,O
Amended,O
and,O
Restated,O
Pooling,O
and,O
Servicing,O
Agreement,O
",",O
dated,O
as,O
of,O
December,O
19,O
",",O
2007,O
(,O
as,O
amended,O
and,O
supplemented,O
from,O
time,O
to,O
time,O
",",O
the,O
Agreement,O
),O
between,O
the,O
Bank,O
",",O
as,O
transferor,O
and,O
servicer,O
(,O
in,O
such,O
capacity,O
",",O
the,O
Servicer,O
),O
and,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Mellon,I-BUSINESS
",",O
as,O
trustee,O
",",O
does,O
hereby,O
certify,O
that,O
:,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
the,O
undersigned,O
has,O
duly,O
executed,O
this,O
certificate,O
this,O
29th,O
day,O
of,O
March,O
2010,O
.,O
,O
-DOCSTART-,O
,O
Check,O
the,O
appropriate,O
box,O
below,O
if,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filing,O
is,O
intended,O
to,O
simultaneously,O
satisfy,O
the,O
filing,O
obligation,O
of,O
the,O
registrant,O
under,O
any,O
of,O
the,O
following,O
provisions,O
(,O
see,O
General,O
Instruction,O
A.2,O
.,O
,O
Item,O
1.01,O
Entry,I-MISCELLANEOUS
into,I-MISCELLANEOUS
Material,I-MISCELLANEOUS
Definitive,I-MISCELLANEOUS
Agreement,I-MISCELLANEOUS
.,O
,O
Subscription,O
and,O
Shareholder,O
Agreement,O
with,O
Shenzhen,I-BUSINESS
VN,I-BUSINESS
Technologies,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
,O
On,O
April,O
4,O
",",O
2011,O
",",O
China,I-BUSINESS
Tel,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
Nevada,I-LOCATION
corporation,O
and,O
the,O
registrant,O
responsible,O
for,O
the,O
filing,O
of,O
this,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
(,O
“,O
China,I-BUSINESS
Tel,I-BUSINESS
”,O
),O
and,O
Trussnet,I-BUSINESS
Capital,I-BUSINESS
Partners,I-BUSINESS
(,I-BUSINESS
HK,I-BUSINESS
),I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
(,O
“,O
TCP,I-BUSINESS
”,O
),O
a,O
limited,O
liability,O
company,O
organized,O
under,O
the,O
laws,O
of,O
Hong,I-LOCATION
Kong,I-LOCATION
",",O
entered,O
into,O
an,O
agreement,O
(,O
“,O
Assignment,O
Agreement,O
”,O
),O
.,O
,O
The,O
Assignment,O
Agreement,O
relates,O
to,O
several,O
other,O
prior,O
agreements,O
disclosed,O
by,O
ChinaTel,I-BUSINESS
in,O
previous,O
SEC,I-GOVERNMENT
Form,B-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filings,O
",",O
and,O
described,O
by,O
short,O
hand,O
reference,O
as,O
follows,O
:,O
,O
The,O
material,O
terms,O
of,O
the,O
Assignment,O
Agreement,O
are,O
as,O
follows,O
:,O
,O
A,O
fully,O
executed,O
copy,O
of,O
the,O
Assignment,O
Agreement,O
is,O
attached,O
hereto,O
and,O
incorporated,O
by,O
this,O
reference,O
as,O
Exhibit,O
10.1,O
to,O
this,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
.,O
,O
Executive,O
Employment,O
Agreement,O
with,O
Tay,I-PERSON
Young,I-PERSON
Lee,I-PERSON
(,O
Colin,I-PERSON
Tay,I-PERSON
),O
,O
On,O
April,O
4,O
",",O
2011,O
",",O
the,O
Company,O
and,O
Tay,I-PERSON
Young,I-PERSON
Lee,I-PERSON
(,O
Colin,I-PERSON
Tay,I-PERSON
),O
entered,O
into,O
an,O
Executive,O
Employment,O
Agreement,O
(,O
“,O
Employment,O
Agreement,O
”,O
),O
.,O
,O
The,O
term,O
of,O
the,O
Employment,O
Agreement,O
extends,O
from,O
November,O
1,O
",",O
2010,O
until,O
December,O
31,O
",",O
2013,O
and,O
shall,O
be,O
automatically,O
extended,O
for,O
one,O
additional,O
year,O
on,O
the,O
anniversary,O
of,O
the,O
Commencement,O
Date,O
",",O
unless,O
not,O
less,O
than,O
90,O
days,O
prior,O
to,O
each,O
such,O
date,O
",",O
either,O
Mr.,O
Tay,I-PERSON
or,O
the,O
Company,O
give,O
notice,O
that,O
it,O
or,O
he,O
does,O
not,O
wish,O
to,O
extend,O
the,O
term,O
of,O
this,O
Employment,O
Agreement,O
.,O
,O
Under,O
the,O
Employment,O
Agreement,O
",",O
Mr.,O
Tay,I-PERSON
will,O
serve,O
as,O
President,O
of,O
the,O
Company,O
and,O
have,O
such,O
powers,O
and,O
duties,O
as,O
are,O
normally,O
inherent,O
in,O
such,O
capacity,O
in,O
publicly,O
held,O
corporations,O
of,O
similar,O
size,O
and,O
character,O
as,O
the,O
Company,O
.,O
,O
Tay,I-PERSON
will,O
receive,O
an,O
annual,O
base,O
salary,O
of,O
$,O
"350,000.00",O
",",O
and,O
he,O
will,O
be,O
eligible,O
to,O
participate,O
in,O
any,O
cash,O
incentive,O
compensation,O
plans,O
and,O
equity-based,O
incentive,O
compensation,O
plans,O
for,O
executives,O
of,O
the,O
Company,O
as,O
may,O
be,O
established,O
by,O
the,O
Board,O
or,O
Compensation,O
Committee,O
from,O
time,O
to,O
time,O
.,O
,O
Under,O
the,O
Employment,O
Agreement,O
Mr.,O
Tay,I-PERSON
shall,O
also,O
receive,O
"66,909,088",O
shares,O
of,O
the,O
Company,O
’,O
s,O
Series,O
B,O
Common,O
Stock,O
.,O
,O
Tay,I-PERSON
shall,O
also,O
be,O
entitled,O
to,O
participate,O
in,O
or,O
receive,O
benefits,O
under,O
any,O
executive,O
employee,O
benefits,O
plans,O
that,O
the,O
Company,O
may,O
adopt,O
",",O
including,O
",",O
without,O
limitation,O
",",O
each,O
pension,O
and,O
retirement,O
plan,O
",",O
stock,O
ownership,O
plan,O
",",O
life,O
insurance,O
plan,O
and,O
health,O
and,O
accident,O
plan,O
or,O
arrangement,O
established,O
and,O
maintained,O
by,O
the,O
Company,O
for,O
executives,O
of,O
the,O
same,O
or,O
lesser,O
status,O
within,O
hierarchy,O
of,O
the,O
Company,O
.,O
,O
Tay,O
shall,O
be,O
entitled,O
to,O
6,O
weeks,O
of,O
paid,O
vacation,O
time,O
per,O
calendar,O
year,O
.,O
,O
Under,O
the,O
Employment,O
Agreement,O
",",O
Mr.,O
Tay,I-PERSON
’,O
s,O
employment,O
may,O
be,O
terminated,O
upon,O
death,O
",",O
disability,O
",",O
by,O
the,O
Company,O
",",O
with,O
or,O
without,O
Cause,O
",",O
or,O
by,O
Mr.,O
Tay,I-PERSON
himself,O
",",O
with,O
or,O
without,O
Good,O
Reason,O
.,O
,O
The,O
Employment,O
Agreement,O
was,O
submitted,O
for,O
shareholder,O
approval,O
through,O
preliminary,O
information,O
statement,O
filed,O
on,O
SEC,I-GOVERNMENT
Schedule,B-MISCELLANEOUS
14C,I-MISCELLANEOUS
on,O
December,O
1,O
",",O
2010,O
and,O
definitive,O
information,O
statement,O
filed,O
on,O
SEC,I-GOVERNMENT
Schedule,B-MISCELLANEOUS
14C,I-MISCELLANEOUS
on,O
February,O
10,O
",",O
2011,O
.,O
,O
Shareholder,O
approval,O
became,O
effective,O
30,O
days,O
after,O
filing,O
of,O
the,O
definitive,O
information,O
statement,O
on,O
March,O
12,O
",",O
2011,O
",",O
however,O
the,O
Employment,O
Agreement,O
was,O
not,O
signed,O
until,O
April,O
4,O
",",O
2011,O
.,O
,O
A,O
fully,O
executed,O
copy,O
of,O
the,O
Employment,O
Agreement,O
is,O
attached,O
hereto,O
and,O
incorporated,O
by,O
this,O
reference,O
as,O
Exhibit,O
10.2,O
to,O
this,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
.,O
,O
Item,O
9.01,O
Financial,O
Statements,O
and,O
Exhibits,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
hereunto,O
duly,O
authorized,O
.,O
,O
CHINA,I-BUSINESS
TEL,I-BUSINESS
GROUP,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
.,O
,O
This,O
agreement,O
for,O
assignment,O
of,O
rights,O
under,O
a,O
share,O
subscription,O
agreement,O
and,O
cancellation,O
of,O
a,O
promissory,O
note,O
(,O
“,O
Assignment,O
Agreement,O
”,O
),O
is,O
effective,O
as,O
of,O
April,O
4,O
",",O
2011,O
(,O
“,O
Effective,O
Date,O
”,O
),O
between,O
ChinaTel,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
“,O
ChinaTel,I-BUSINESS
”,O
),O
and,O
Trussnet,I-BUSINESS
Capital,I-BUSINESS
Partners,I-BUSINESS
(,I-BUSINESS
HK,I-BUSINESS
),I-BUSINESS
Ltd.,I-BUSINESS
.,O
,O
ChinaTel,I-BUSINESS
and,O
TCP,I-BUSINESS
are,O
each,O
referred,O
to,O
as,O
a,O
“,O
Party,O
”,O
and,O
collectively,O
as,O
the,O
“,O
Parties,O
.,O
”,O
,O
TCP,I-BUSINESS
hereby,O
assigns,O
to,O
ChinaTel,I-BUSINESS
",",O
without,O
warranty,O
",",O
all,O
of,O
its,O
right,O
",",O
title,O
and,O
interest,O
in,O
the,O
TCP,I-BUSINESS
Subscription,O
Agreement,O
and,O
TCP,I-BUSINESS
Subscription,O
Addendum,O
.,O
,O
ChinaTel,I-BUSINESS
hereby,O
assumes,O
all,O
performance,O
obligations,O
of,O
TCP,I-BUSINESS
",",O
if,O
any,O
",",O
under,O
the,O
TCP,I-BUSINESS
Subscription,O
Agreement,O
and,O
TCP,I-BUSINESS
Subscription,O
Addendum,O
.,O
,O
To,O
the,O
extent,O
consent,O
to,O
this,O
assignment,O
is,O
required,O
from,O
CECT-Chinacomm,I-BUSINESS
or,O
any,O
other,O
party,O
to,O
the,O
TCP,I-BUSINESS
Subscription,O
Agreement,O
or,O
TCP,I-BUSINESS
Subscription,O
Addendum,O
",",O
TCP,I-BUSINESS
will,O
continue,O
to,O
act,O
as,O
agent,O
for,O
ChinaTel,I-BUSINESS
",",O
as,O
ChinaTel,I-BUSINESS
directs,O
.,O
,O
All,O
existing,O
rights,O
and,O
future,O
obligations,O
of,O
both,O
Parties,O
under,O
the,O
Agreement,O
",",O
the,O
Note,O
and,O
the,O
Pledge,O
Agreement,O
",",O
are,O
hereby,O
cancelled,O
and,O
terminated,O
except,O
as,O
set,O
forth,O
in,O
this,O
Assignment,O
Agreement,O
.,O
,O
This,O
Assignment,O
Agreement,O
may,O
be,O
executed,O
in,O
one,O
or,O
more,O
counterparts,O
",",O
each,O
of,O
which,O
shall,O
be,O
deemed,O
to,O
be,O
an,O
original,O
",",O
and,O
all,O
of,O
which,O
",",O
when,O
taken,O
together,O
",",O
shall,O
constitute,O
one,O
and,O
the,O
same,O
document,O
.,O
,O
CHINA,I-BUSINESS
TEL,I-BUSINESS
GROUP,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
TRUSSNET,I-BUSINESS
CAPITAL,I-BUSINESS
PARTNERS,I-BUSINESS
(,I-BUSINESS
HK,I-BUSINESS
),I-BUSINESS
LTD.,I-BUSINESS
,O
This,O
Executive,O
Employment,O
Agreement,O
(,O
``,O
Agreement,O
'',O
),O
is,O
made,O
as,O
of,O
the,O
1st,O
day,O
of,O
November,O
2010,O
",",O
between,O
China,I-BUSINESS
Tel,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
Nevada,I-LOCATION
corporation,O
(,O
“,O
Company,O
”,O
),O
",",O
and,O
Tay,I-PERSON
Yong,I-PERSON
Lee,I-PERSON
(,O
``,O
Executive,O
'',O
),O
.,O
,O
Company,O
and,O
Executive,O
are,O
also,O
referred,O
to,O
in,O
this,O
Agreement,O
individually,O
and,O
together,O
as,O
a,O
“,O
Party,O
”,O
or,O
the,O
“,O
Parties,O
.,O
”,O
,O
A,O
.,O
As,O
a,O
development,O
stage,O
company,O
",",O
the,O
Company,O
has,O
not,O
yet,O
adopted,O
formal,O
employment,O
agreements,O
and,O
incentive,O
based,O
compensation,O
",",O
profit,O
sharing,O
",",O
retirement,O
and,O
other,O
plans,O
designed,O
to,O
attract,O
",",O
retain,O
and,O
reward,O
key,O
executives,O
for,O
attainment,O
of,O
predetermined,O
and,O
objectively,O
measurable,O
short,O
and,O
long,O
range,O
financial,O
and,O
other,O
performance,O
goals,O
of,O
the,O
Company,O
(,O
collectively,O
“,O
Executive,O
Employee,O
Benefit,O
Plans,O
”,O
),O
.,O
,O
However,O
",",O
it,O
is,O
contemplated,O
that,O
the,O
Company,O
will,O
develop,O
and,O
adopt,O
Executive,O
Employee,O
Benefit,O
Plans,O
similar,O
to,O
those,O
in,O
effect,O
at,O
other,O
publicly,O
held,O
corporations,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
B,O
.,O
It,O
is,O
contemplated,O
that,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Company,O
(,O
“,O
Board,O
”,O
),O
will,O
create,O
a,O
Compensation,O
Committee,O
",",O
which,O
shall,O
have,O
primary,O
responsibility,O
for,O
developing,O
Executive,O
Employee,O
Benefit,O
Plans,O
",",O
and/or,O
for,O
recommending,O
payment,O
of,O
incentive,O
and,O
performance,O
based,O
compensation,O
of,O
executive,O
employees,O
of,O
the,O
Company,O
who,O
are,O
eligible,O
to,O
participate,O
under,O
such,O
plans,O
as,O
the,O
Company,O
may,O
adopt,O
from,O
time,O
to,O
time,O
.,O
,O
C.,O
Since,O
the,O
inception,O
of,O
the,O
Company,O
in,O
2008,O
",",O
the,O
Executive,O
has,O
been,O
providing,O
professional,O
services,O
to,O
the,O
Company,O
in,O
a,O
number,O
of,O
different,O
capacities,O
and,O
",",O
most,O
recently,O
",",O
as,O
the,O
President,O
of,O
the,O
Company,O
.,O
,O
The,O
President,O
of,O
the,O
Company,O
functions,O
as,O
the,O
Company,O
’,O
s,O
chief,O
executive,O
officer,O
responsible,O
for,O
the,O
overall,O
operational,O
and,O
strategic,O
management,O
of,O
the,O
Company,O
.,O
,O
D.,O
Since,O
the,O
inception,O
of,O
the,O
Company,O
in,O
2008,O
",",O
the,O
Executive,O
has,O
been,O
instrumental,O
in,O
developing,O
and,O
implementing,O
the,O
Company,O
’,O
s,O
business,O
strategies,O
and,O
in,O
developing,O
potential,O
financial,O
investments,O
in,O
the,O
Company,O
and,O
investment,O
opportunities,O
for,O
the,O
Company,O
",",O
through,O
both,O
his,O
significant,O
business,O
acumen,O
and,O
his,O
important,O
business,O
relationships,O
throughout,O
Asia,I-LOCATION
.,O
,O
The,O
Board,O
has,O
determined,O
that,O
the,O
Executive,O
has,O
performed,O
at,O
an,O
exceptional,O
level,O
during,O
his,O
affiliation,O
with,O
the,O
Company,O
and,O
wants,O
to,O
insure,O
that,O
he,O
is,O
retained,O
as,O
the,O
President,O
and,O
incentivized,O
to,O
continue,O
his,O
exceptional,O
performance,O
into,O
the,O
future,O
.,O
,O
E.,O
In,O
consideration,O
of,O
the,O
foregoing,O
",",O
and,O
for,O
other,O
good,O
and,O
valuable,O
consideration,O
",",O
the,O
sufficiency,O
of,O
which,O
is,O
hereby,O
acknowledged,O
",",O
the,O
Executive,O
and,O
the,O
Company,O
agree,O
to,O
the,O
following,O
terms,O
of,O
the,O
Executive,O
’,O
s,O
employment,O
with,O
the,O
Company,O
:,O
,O
The,O
term,O
of,O
this,O
Agreement,O
shall,O
extend,O
from,O
November,O
1,O
",",O
2010,O
(,O
``,O
Commencement,O
Date,O
'',O
),O
until,O
December,O
31,O
",",O
2013,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
term,O
of,O
this,O
Agreement,O
shall,O
be,O
automatically,O
extended,O
for,O
one,O
additional,O
year,O
on,O
the,O
anniversary,O
of,O
the,O
Commencement,O
Date,O
and,O
on,O
each,O
anniversary,O
thereafter,O
",",O
unless,O
",",O
not,O
less,O
than,O
ninety,O
(,O
90,O
),O
days,O
prior,O
to,O
each,O
such,O
date,O
",",O
either,O
the,O
Executive,O
or,O
the,O
Company,O
has,O
given,O
notice,O
to,O
the,O
other,O
that,O
it,O
or,O
he,O
does,O
not,O
wish,O
to,O
extend,O
the,O
term,O
of,O
this,O
Agreement,O
.,O
,O
The,O
term,O
of,O
this,O
Agreement,O
shall,O
also,O
terminate,O
upon,O
any,O
Date,O
of,O
Termination,O
(,O
as,O
defined,O
in,O
Section,O
4,O
of,O
this,O
Agreement,O
),O
.,O
,O
The,O
time,O
period,O
during,O
which,O
this,O
Agreement,O
is,O
in,O
effect,O
",",O
including,O
any,O
extensions,O
",",O
is,O
referred,O
to,O
in,O
this,O
Agreement,O
as,O
the,O
``,O
Term,O
.,O
'',O
,O
Position,O
and,O
Duties,O
During,O
the,O
Term,O
",",O
the,O
Executive,O
shall,O
serve,O
as,O
the,O
President,O
of,O
the,O
Company,O
and,O
shall,O
have,O
such,O
powers,O
and,O
duties,O
as,O
are,O
normally,O
inherent,O
in,O
such,O
capacity,O
in,O
publicly,O
held,O
corporations,O
of,O
similar,O
size,O
and,O
character,O
as,O
the,O
Company,O
",",O
or,O
as,O
may,O
",",O
from,O
time,O
to,O
time,O
",",O
be,O
prescribed,O
by,O
the,O
Board,O
;,O
provided,O
",",O
however,O
",",O
that,O
such,O
duties,O
are,O
consistent,O
with,O
the,O
Executive,O
's,O
position,O
or,O
other,O
positions,O
and,O
responsibilities,O
within,O
the,O
Company,O
that,O
the,O
Executive,O
may,O
hold,O
from,O
time,O
to,O
time,O
.,O
,O
The,O
Executive,O
shall,O
devote,O
his,O
full,O
working,O
time,O
and,O
efforts,O
to,O
the,O
business,O
and,O
affairs,O
of,O
the,O
Company,O
.,O
,O
Notwithstanding,O
the,O
foregoing,O
",",O
the,O
Executive,O
may,O
serve,O
on,O
the,O
Boards,O
of,O
Directors,O
of,O
other,O
companies,O
and,O
entities,O
",",O
with,O
the,O
written,O
approval,O
of,O
the,O
Board,O
",",O
or,O
engage,O
in,O
religious,O
",",O
charitable,O
or,O
other,O
community,O
activities,O
",",O
as,O
long,O
as,O
such,O
services,O
and,O
activities,O
are,O
disclosed,O
to,O
the,O
Board,O
and,O
do,O
not,O
interfere,O
in,O
any,O
material,O
way,O
with,O
the,O
Executive,O
's,O
performance,O
of,O
his,O
duties,O
to,O
the,O
Company,O
as,O
provided,O
in,O
this,O
Agreement,O
.,O
,O
Compensation,O
and,O
Employment,O
Benefits,O
.,O
,O
During,O
the,O
Term,O
",",O
the,O
Executive,O
shall,O
be,O
entitled,O
to,O
the,O
following,O
elements,O
of,O
compensation,O
and,O
other,O
employment,O
benefits,O
:,O
,O
(,O
a,O
),O
Base,O
Salary,O
.,O
,O
During,O
the,O
Term,O
",",O
the,O
Company,O
shall,O
pay,O
the,O
Executive,O
a,O
salary,O
(,O
“,O
Base,O
Salary,O
”,O
),O
at,O
an,O
annual,O
rate,O
as,O
shall,O
be,O
determined,O
from,O
time,O
to,O
time,O
by,O
the,O
Compensation,O
Committee,O
of,O
the,O
Board,O
",",O
consistent,O
with,O
the,O
general,O
policies,O
and,O
practices,O
of,O
the,O
Company,O
and,O
subject,O
to,O
periodic,O
review,O
",",O
provided,O
",",O
however,O
that,O
in,O
no,O
event,O
shall,O
such,O
annual,O
rate,O
be,O
less,O
than,O
Three,O
Hundred,O
Fifty,O
Thousand,O
Dollars,O
US,I-LOCATION
(,O
$,O
"350,000.00",O
),O
.,O
,O
The,O
Base,O
Salary,O
shall,O
be,O
paid,O
to,O
Executive,O
in,O
twelve,O
(,O
12,O
),O
equal,O
monthly,O
payments,O
at,O
or,O
about,O
the,O
1st,O
of,O
each,O
month,O
in,O
the,O
amount,O
of,O
Twenty-Nine,O
Thousand,O
",",O
Six,O
Hundred,O
Sixty-Six,O
Dollars,O
US,I-LOCATION
and,O
Sixty-Seven,O
Cents,O
(,O
$,O
"29,166.67",O
),O
.,O
,O
The,O
Base,O
Salary,O
shall,O
be,O
subject,O
to,O
withholding,O
of,O
taxes,O
under,O
applicable,O
laws,O
and,O
shall,O
be,O
paid,O
in,O
periodic,O
installments,O
in,O
accordance,O
with,O
the,O
payroll,O
practices,O
of,O
the,O
Company,O
applicable,O
to,O
other,O
salaried,O
employees,O
",",O
as,O
in,O
effect,O
from,O
time,O
to,O
time,O
at,O
the,O
Company,O
.,O
,O
(,O
b,O
),O
Cash,O
Bonus,O
Compensation,O
.,O
,O
The,O
Executive,O
shall,O
be,O
eligible,O
to,O
participate,O
in,O
such,O
cash,O
incentive,O
compensation,O
plans,O
for,O
executives,O
of,O
the,O
Company,O
as,O
may,O
be,O
established,O
by,O
the,O
Board,O
or,O
Compensation,O
Committee,O
to,O
reward,O
attainment,O
by,O
the,O
Company,O
of,O
short,O
and,O
long,O
term,O
performance,O
goals,O
and,O
other,O
criteria,O
",",O
and,O
to,O
receive,O
such,O
bonuses,O
as,O
are,O
determined,O
by,O
the,O
Board,O
or,O
Compensation,O
Committee,O
from,O
time,O
to,O
time,O
on,O
conditions,O
no,O
less,O
favorable,O
than,O
awards,O
made,O
to,O
other,O
senior,O
executive,O
officers,O
of,O
the,O
Company,O
.,O
,O
(,O
c,O
),O
Equity-Based,O
Compensation,O
.,O
,O
The,O
Executive,O
shall,O
be,O
eligible,O
to,O
participate,O
in,O
such,O
equity-based,O
incentive,O
compensation,O
plans,O
for,O
executives,O
of,O
the,O
Company,O
",",O
as,O
may,O
be,O
established,O
by,O
the,O
Company,O
",",O
and,O
to,O
be,O
awarded,O
as,O
compensation,O
such,O
classes,O
of,O
stock,O
",",O
warrants,O
",",O
and/or,O
options,O
(,O
collectively,O
",",O
“,O
Equities,O
”,O
),O
as,O
the,O
Company,O
may,O
issue,O
in,O
accordance,O
with,O
such,O
plans,O
and,O
in,O
such,O
amounts,O
as,O
are,O
determined,O
by,O
the,O
Board,O
or,O
the,O
Compensation,O
Committee,O
",",O
from,O
time,O
to,O
time,O
",",O
on,O
conditions,O
no,O
less,O
favorable,O
than,O
awards,O
made,O
to,O
other,O
senior,O
executive,O
officers,O
of,O
the,O
Company,O
.,O
,O
The,O
Executive,O
shall,O
be,O
entitled,O
to,O
receive,O
prompt,O
reimbursement,O
for,O
all,O
reasonable,O
expenses,O
incurred,O
by,O
him,O
in,O
performing,O
services,O
pursuant,O
to,O
this,O
Agreement,O
during,O
the,O
Term,O
",",O
in,O
accordance,O
with,O
the,O
policies,O
and,O
procedures,O
then,O
in,O
effect,O
and,O
established,O
by,O
the,O
Company,O
for,O
its,O
senior,O
executive,O
officers,O
.,O
,O
(,O
e,O
),O
Retention,O
Bonus,O
Compensation,O
.,O
,O
The,O
Executive,O
shall,O
receive,O
Sixty-Six,O
Million,O
",",O
Nine,O
Hundred,O
Nine,O
Thousand,O
",",O
Eighty-Eight,O
(,O
"66,909,088",O
),O
shares,O
of,O
the,O
Company,O
’,O
s,O
Series,O
B,O
common,O
stock,O
within,O
thirty,O
(,O
30,O
),O
business,O
days,O
of,O
the,O
signing,O
of,O
this,O
Agreement,O
.,O
,O
Such,O
shares,O
are,O
being,O
granted,O
by,O
the,O
Company,O
based,O
upon,O
its,O
desire,O
to,O
retain,O
the,O
Executive,O
to,O
remain,O
with,O
the,O
Company,O
in,O
his,O
current,O
position,O
of,O
President,O
",",O
to,O
continue,O
in,O
that,O
position,O
for,O
the,O
indefinite,O
future,O
and,O
to,O
assume,O
such,O
additional,O
operational,O
and,O
strategic,O
business,O
responsibilities,O
as,O
the,O
Board,O
may,O
determine,O
.,O
,O
(,O
f,O
),O
Other,O
Benefits,O
During,O
the,O
Term,O
",",O
the,O
Executive,O
shall,O
be,O
entitled,O
to,O
participate,O
in,O
or,O
receive,O
benefits,O
under,O
any,O
Executive,O
Employee,O
Benefit,O
Plans,O
the,O
Company,O
may,O
hereafter,O
adopt,O
",",O
including,O
",",O
without,O
limitation,O
",",O
each,O
pension,O
and,O
retirement,O
plan,O
;,O
supplemental,O
pension,O
",",O
retirement,O
and,O
deferred,O
compensation,O
plan,O
;,O
savings,O
and,O
profit-sharing,O
plan,O
;,O
stock,O
ownership,O
plan,O
;,O
stock,O
purchase,O
plan,O
;,O
stock,O
option,O
plan,O
;,O
life,O
insurance,O
plan,O
;,O
medical,O
insurance,O
plan,O
;,O
disability,O
plan,O
;,O
and,O
health,O
and,O
accident,O
plan,O
or,O
arrangement,O
established,O
and,O
maintained,O
by,O
the,O
Company,O
for,O
executives,O
of,O
the,O
same,O
or,O
lesser,O
status,O
within,O
the,O
hierarchy,O
of,O
the,O
Company,O
",",O
subject,O
to,O
and,O
on,O
a,O
basis,O
consistent,O
with,O
the,O
terms,O
",",O
conditions,O
and,O
overall,O
administration,O
of,O
such,O
plan,O
or,O
arrangement,O
on,O
conditions,O
no,O
less,O
favorable,O
than,O
awards,O
made,O
to,O
other,O
senior,O
executive,O
officers,O
of,O
the,O
Company,O
.,O
,O
Any,O
payments,O
or,O
benefits,O
to,O
which,O
the,O
Executive,O
is,O
entitled,O
under,O
any,O
Executive,O
Employee,O
Plan,O
in,O
respect,O
of,O
any,O
calendar,O
year,O
during,O
which,O
the,O
Executive,O
is,O
employed,O
by,O
the,O
Company,O
for,O
less,O
than,O
the,O
whole,O
of,O
such,O
year,O
shall,O
",",O
unless,O
otherwise,O
provided,O
in,O
the,O
applicable,O
plan,O
or,O
arrangement,O
",",O
be,O
prorated,O
in,O
accordance,O
with,O
the,O
number,O
of,O
days,O
in,O
such,O
calendar,O
year,O
during,O
which,O
he,O
is,O
so,O
employed,O
.,O
,O
Should,O
any,O
such,O
payments,O
or,O
benefits,O
accrue,O
on,O
a,O
fiscal,O
year,O
or,O
other,O
anniversary,O
date,O
(,O
rather,O
than,O
calendar,O
year,O
),O
",",O
then,O
the,O
proration,O
in,O
the,O
preceding,O
sentence,O
shall,O
be,O
on,O
the,O
basis,O
of,O
such,O
alternative,O
measurement,O
of,O
a,O
partial,O
year,O
.,O
,O
The,O
Executive,O
shall,O
be,O
entitled,O
to,O
all,O
paid,O
holidays,O
given,O
by,O
the,O
Company,O
to,O
its,O
executives,O
and,O
not,O
less,O
than,O
six,O
(,O
6,O
),O
weeks,O
of,O
paid,O
vacation,O
time,O
in,O
each,O
calendar,O
year,O
",",O
or,O
such,O
additional,O
time,O
as,O
in,O
the,O
judgment,O
of,O
the,O
Executive,O
",",O
as,O
ratified,O
annually,O
by,O
the,O
Board,O
",",O
does,O
not,O
interfere,O
with,O
the,O
ability,O
of,O
the,O
Executive,O
to,O
fulfill,O
the,O
duties,O
assigned,O
to,O
him,O
.,O
,O
In,O
this,O
regard,O
",",O
the,O
Parties,O
recognize,O
that,O
the,O
realities,O
of,O
modern,O
communication,O
devices,O
and,O
the,O
extent,O
of,O
travel,O
and,O
entertainment,O
associated,O
with,O
the,O
duties,O
to,O
be,O
assigned,O
to,O
the,O
Executive,O
require,O
flexibility,O
in,O
evaluating,O
the,O
extent,O
to,O
which,O
the,O
Executive,O
is,O
fulfilling,O
duties,O
assigned,O
to,O
him,O
even,O
while,O
on,O
vacation,O
or,O
away,O
from,O
his,O
office,O
.,O
,O
The,O
Executive,O
's,O
employment,O
under,O
this,O
Agreement,O
may,O
be,O
terminated,O
without,O
any,O
breach,O
of,O
this,O
Agreement,O
under,O
the,O
following,O
circumstances,O
:,O
,O
The,O
Executive,O
's,O
employment,O
pursuant,O
to,O
this,O
Agreement,O
shall,O
terminate,O
upon,O
his,O
death,O
.,O
,O
The,O
Company,O
may,O
terminate,O
the,O
Executive,O
's,O
employment,O
if,O
he,O
is,O
disabled,O
or,O
otherwise,O
unable,O
to,O
perform,O
the,O
essential,O
functions,O
of,O
the,O
Executive,O
's,O
then,O
existing,O
position,O
or,O
positions,O
under,O
this,O
Agreement,O
with,O
or,O
without,O
reasonable,O
accommodation,O
for,O
a,O
period,O
of,O
one,O
hundred,O
eighty,O
(,O
180,O
),O
days,O
(,O
which,O
need,O
not,O
be,O
consecutive,O
),O
in,O
any,O
twelve,O
(,O
12,O
),O
month,O
period,O
.,O
,O
If,O
any,O
question,O
arises,O
as,O
to,O
whether,O
during,O
any,O
period,O
the,O
Executive,O
is,O
disabled,O
so,O
as,O
to,O
be,O
unable,O
to,O
perform,O
the,O
essential,O
functions,O
of,O
the,O
Executive,O
's,O
then,O
existing,O
position,O
or,O
positions,O
with,O
or,O
without,O
reasonable,O
accommodation,O
",",O
the,O
Executive,O
may,O
",",O
and,O
at,O
the,O
request,O
of,O
the,O
Company,O
shall,O
",",O
submit,O
to,O
the,O
Company,O
a,O
certification,O
within,O
a,O
reasonable,O
period,O
of,O
time,O
from,O
such,O
request,O
and,O
in,O
reasonable,O
detail,O
by,O
a,O
physician,O
selected,O
by,O
the,O
Company,O
to,O
whom,O
the,O
Executive,O
or,O
the,O
Executive,O
's,O
guardian,O
has,O
no,O
reasonable,O
objection,O
as,O
to,O
whether,O
the,O
Executive,O
is,O
so,O
disabled,O
or,O
otherwise,O
unable,O
to,O
perform,O
the,O
essential,O
functions,O
of,O
the,O
Executive,O
’,O
s,O
then,O
existing,O
position,O
or,O
positions,O
",",O
or,O
how,O
long,O
such,O
disability,O
or,O
inability,O
is,O
expected,O
to,O
continue,O
.,O
,O
Such,O
certification,O
shall,O
be,O
provided,O
to,O
the,O
Board,O
",",O
which,O
shall,O
determine,O
the,O
extent,O
and,O
duration,O
of,O
the,O
Executive,O
’,O
s,O
disability,O
.,O
,O
The,O
Executive,O
shall,O
cooperate,O
with,O
any,O
reasonable,O
request,O
of,O
the,O
physician,O
in,O
connection,O
with,O
his,O
report,O
to,O
the,O
Board,O
.,O
,O
If,O
such,O
question,O
shall,O
arise,O
and,O
the,O
Executive,O
shall,O
fail,O
to,O
submit,O
such,O
certification,O
",",O
the,O
Company,O
's,O
determination,O
of,O
such,O
issue,O
shall,O
be,O
binding,O
on,O
the,O
Executive,O
.,O
,O
Nothing,O
in,O
this,O
Section,O
4,O
(,O
b,O
),O
shall,O
be,O
construed,O
to,O
waive,O
the,O
Executive,O
's,O
rights,O
",",O
if,O
any,O
",",O
under,O
existing,O
law,O
including,O
",",O
without,O
limitation,O
",",O
the,O
Family,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Medical,I-LEGISLATION/ACT
Leave,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1993,I-LEGISLATION/ACT
",",O
29,O
U.S.C.,I-LEGISLATION/ACT
2601,O
et,O
seq.,O
and,O
the,O
Americans,I-LEGISLATION/ACT
with,I-LEGISLATION/ACT
Disabilities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
42,O
U.S.C.,I-LEGISLATION/ACT
12101,O
et,O
seq.,O
(,O
c,O
),O
Termination,O
by,O
Company,O
for,O
Cause,O
At,O
any,O
time,O
during,O
the,O
Term,O
",",O
the,O
Company,O
may,O
terminate,O
the,O
Executive,O
's,O
employment,O
hereunder,O
for,O
Cause,O
.,O
,O
For,O
purposes,O
of,O
this,O
Agreement,O
",",O
``,O
Cause,O
'',O
shall,O
mean,O
:,O
(,O
i,O
),O
a,O
willful,O
act,O
of,O
dishonesty,O
by,O
the,O
Executive,O
with,O
respect,O
to,O
any,O
matter,O
involving,O
the,O
Company,O
or,O
any,O
subsidiary,O
which,O
results,O
in,O
financial,O
or,O
other,O
harm,O
to,O
the,O
Company,O
or,O
any,O
subsidiary,O
;,O
(,O
ii,O
),O
conviction,O
of,O
the,O
Executive,O
of,O
a,O
felony,O
or,O
other,O
crime,O
involving,O
the,O
personal,O
enrichment,O
of,O
the,O
Executive,O
at,O
the,O
expense,O
of,O
the,O
Company,O
or,O
any,O
subsidiary,O
(,O
unless,O
the,O
Executive,O
’,O
s,O
action,O
or,O
omission,O
occurred,O
in,O
good,O
faith,O
in,O
the,O
reasonable,O
belief,O
that,O
such,O
action,O
was,O
not,O
criminal,O
),O
;,O
or,O
(,O
iii,O
),O
willful,O
refusal,O
by,O
the,O
Executive,O
to,O
perform,O
to,O
the,O
Board,O
’,O
s,O
satisfaction,O
any,O
significant,O
portion,O
of,O
the,O
Executive,O
's,O
duties,O
and,O
responsibilities,O
as,O
the,O
President,O
of,O
the,O
Company,O
and/or,O
as,O
assigned,O
or,O
delegated,O
under,O
this,O
Agreement,O
(,O
other,O
than,O
any,O
such,O
failure,O
after,O
the,O
Executive,O
gives,O
notice,O
of,O
termination,O
for,O
``,O
Good,O
Reason,O
'',O
),O
",",O
which,O
failure,O
continues,O
without,O
correction,O
for,O
more,O
than,O
thirty,O
(,O
30,O
),O
days,O
after,O
written,O
notice,O
given,O
to,O
the,O
Executive,O
by,O
the,O
Board,O
.,O
,O
For,O
purposes,O
of,O
clause,O
(,O
i,O
),O
of,O
this,O
Section,O
4,O
.,O
,O
(,O
c,O
),O
",",O
no,O
act,O
",",O
or,O
failure,O
to,O
act,O
",",O
on,O
the,O
Executive,O
's,O
part,O
shall,O
be,O
deemed,O
``,O
willful,O
'',O
unless,O
done,O
",",O
or,O
omitted,O
to,O
be,O
done,O
",",O
by,O
the,O
Executive,O
without,O
reasonable,O
belief,O
that,O
the,O
Executive,O
's,O
act,O
",",O
or,O
failure,O
to,O
act,O
",",O
was,O
in,O
the,O
best,O
interests,O
of,O
the,O
Company,O
and/or,O
its,O
subsidiaries,O
.,O
,O
Any,O
act,O
or,O
failure,O
to,O
act,O
of,O
the,O
Executive,O
which,O
is,O
criminal,O
in,O
nature,O
",",O
or,O
which,O
involves,O
the,O
knowing,O
violation,O
of,O
any,O
applicable,O
law,O
",",O
shall,O
be,O
deemed,O
“,O
willful,O
.,O
”,O
,O
(,O
d,O
),O
Termination,O
by,O
the,O
Company,O
Without,O
Cause,O
.,O
,O
At,O
any,O
time,O
during,O
the,O
Term,O
",",O
the,O
Company,O
may,O
terminate,O
the,O
Executive,O
's,O
employment,O
under,O
this,O
Agreement,O
at,O
its,O
sole,O
discretion,O
for,O
any,O
reason,O
and,O
without,O
cause,O
.,O
,O
Any,O
termination,O
by,O
the,O
Company,O
of,O
the,O
Executive,O
's,O
employment,O
under,O
this,O
Agreement,O
which,O
does,O
not,O
constitute,O
a,O
termination,O
for,O
Cause,O
under,O
Section,O
4,O
.,O
,O
(,O
c,O
),O
or,O
result,O
from,O
the,O
death,O
or,O
disability,O
of,O
the,O
Executive,O
under,O
Section,O
4,O
.,O
,O
(,O
a,O
),O
or,O
(,O
b,O
),O
shall,O
be,O
deemed,O
a,O
termination,O
without,O
cause,O
.,O
,O
(,O
e,O
),O
Termination,O
by,O
the,O
Executive,O
for,O
Good,O
Reason,O
.,O
,O
The,O
Executive,O
may,O
terminate,O
his,O
employment,O
under,O
this,O
Agreement,O
for,O
“,O
Good,O
Reason.,O
”,O
For,O
purposes,O
of,O
this,O
Agreement,O
",",O
“,O
Good,O
Reason,O
”,O
shall,O
mean,O
the,O
occurrence,O
",",O
without,O
the,O
Executive,O
’,O
s,O
prior,O
written,O
consent,O
",",O
of,O
any,O
one,O
or,O
more,O
of,O
the,O
following,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
Executive,O
shall,O
have,O
given,O
the,O
Company,O
a,O
Notice,O
of,O
Termination,O
within,O
ninety,O
(,O
90,O
),O
days,O
after,O
the,O
occurrence,O
of,O
the,O
event,O
giving,O
rise,O
for,O
Good,O
Reason,O
and,O
the,O
Company,O
has,O
failed,O
to,O
cure,O
the,O
event,O
of,O
termination,O
within,O
thirty,O
(,O
30,O
),O
days,O
of,O
its,O
receipt,O
of,O
such,O
Notice,O
of,O
Termination,O
from,O
the,O
Executive,O
:,O
,O
(,O
i,O
),O
The,O
assignment,O
to,O
the,O
Executive,O
on,O
a,O
permanent,O
basis,O
of,O
a,O
material,O
amount,O
of,O
duties,O
which,O
are,O
inconsistent,O
with,O
the,O
Executive,O
’,O
s,O
position,O
;,O
authorities,O
",",O
duties,O
or,O
other,O
responsibilities,O
as,O
contemplated,O
by,O
Section,O
2,O
of,O
this,O
Agreement,O
;,O
provided,O
",",O
however,O
that,O
the,O
Executive,O
acknowledges,O
and,O
agrees,O
that,O
a,O
change,O
solely,O
in,O
office,O
or,O
title,O
of,O
the,O
Executive,O
",",O
by,O
itself,O
",",O
shall,O
not,O
automatically,O
constitute,O
Good,O
Reason,O
;,O
,O
(,O
ii,O
),O
A,O
material,O
breach,O
by,O
the,O
Company,O
of,O
any,O
material,O
provision,O
of,O
this,O
Agreement,O
;,O
,O
(,O
iii,O
),O
If,O
one,O
or,O
more,O
Changes,O
in,O
Control,O
of,O
the,O
Company,O
(,O
as,O
defined,O
in,O
Section,O
6,O
of,O
this,O
Agreement,O
),O
occurs,O
prior,O
to,O
the,O
termination,O
of,O
this,O
Agreement,O
",",O
Good,O
Reason,O
for,O
the,O
Executive,O
’,O
s,O
termination,O
of,O
employment,O
shall,O
",",O
in,O
addition,O
to,O
the,O
events,O
listed,O
above,O
",",O
also,O
mean,O
the,O
occurrence,O
",",O
without,O
the,O
Executive,O
’,O
s,O
prior,O
written,O
consent,O
",",O
of,O
any,O
one,O
or,O
more,O
of,O
the,O
following,O
actions,O
taken,O
by,O
the,O
Company,O
or,O
its,O
successor,O
in,O
interest,O
:,O
,O
(,O
A,O
),O
Reduction,O
of,O
the,O
Executive,O
’,O
s,O
Base,O
Salary,O
as,O
in,O
effect,O
immediately,O
before,O
the,O
occurrence,O
of,O
the,O
first,O
Change,O
in,O
Control,O
of,O
the,O
Company,O
or,O
as,O
the,O
Executive,O
’,O
s,O
Base,O
Salary,O
may,O
have,O
been,O
increased,O
from,O
time,O
to,O
time,O
after,O
that,O
occurrence,O
;,O
,O
(,O
B,O
),O
Reduction,O
of,O
the,O
Annual,O
Bonus,O
Opportunity,O
afforded,O
the,O
Executive,O
to,O
a,O
percentage,O
less,O
than,O
that,O
afforded,O
to,O
the,O
Executive,O
under,O
any,O
Executive,O
Employee,O
Benefit,O
Plans,O
as,O
in,O
effect,O
immediately,O
before,O
the,O
occurrence,O
of,O
the,O
first,O
Change,O
in,O
Control,O
of,O
the,O
Company,O
or,O
as,O
such,O
Annual,O
Bonus,O
Opportunity,O
may,O
have,O
been,O
increased,O
from,O
time,O
to,O
time,O
after,O
that,O
occurrence,O
;,O
,O
(,O
C,O
),O
Reduction,O
of,O
the,O
Annual,O
Equity-Based,O
Compensation,O
Opportunity,O
afforded,O
the,O
Executive,O
to,O
a,O
percentage,O
less,O
than,O
that,O
afforded,O
to,O
the,O
Executive,O
under,O
any,O
Executive,O
Employee,O
Benefit,O
Plans,O
as,O
in,O
effect,O
immediately,O
before,O
the,O
occurrence,O
of,O
the,O
first,O
Change,O
in,O
Control,O
of,O
the,O
Company,O
or,O
as,O
such,O
Annual,O
Equity-Based,O
Compensation,O
Opportunity,O
may,O
have,O
been,O
increased,O
from,O
time,O
to,O
time,O
after,O
that,O
occurrence,O
;,O
,O
(,O
D,O
),O
Failure,O
to,O
either,O
:,O
(,O
i,O
),O
continue,O
in,O
effect,O
or,O
(,O
ii,O
),O
continue,O
the,O
Executive,O
’,O
s,O
participation,O
on,O
substantially,O
the,O
same,O
basis,O
",",O
both,O
in,O
terms,O
of,O
amount,O
of,O
benefits,O
provided,O
and,O
the,O
level,O
of,O
the,O
Executive,O
’,O
s,O
participation,O
in,O
",",O
any,O
Executive,O
Employee,O
Benefit,O
Plan,O
as,O
existed,O
and,O
in,O
which,O
the,O
Executive,O
was,O
a,O
participant,O
immediately,O
before,O
the,O
occurrence,O
of,O
the,O
first,O
Change,O
in,O
Control,O
of,O
the,O
Company,O
",",O
or,O
any,O
substitute,O
plan,O
adopted,O
from,O
time,O
to,O
time,O
after,O
that,O
occurrence,O
",",O
unless,O
an,O
equitable,O
and,O
reasonably,O
comparable,O
arrangement,O
(,O
embodied,O
in,O
a,O
substitute,O
or,O
alternative,O
benefit,O
or,O
plan,O
),O
is,O
made,O
with,O
respect,O
to,O
such,O
Executive,O
Employee,O
Benefit,O
Plan,O
;,O
,O
(,O
E,O
),O
Taking,O
any,O
action,O
that,O
would,O
directly,O
or,O
indirectly,O
materially,O
reduce,O
any,O
other,O
non-contractual,O
benefits,O
that,O
were,O
provided,O
to,O
the,O
Executive,O
by,O
the,O
Company,O
immediately,O
before,O
the,O
occurrence,O
of,O
the,O
first,O
Change,O
in,O
Control,O
of,O
the,O
Company,O
or,O
deprive,O
the,O
Executive,O
of,O
any,O
material,O
fringe,O
benefit,O
enjoyed,O
by,O
the,O
Executive,O
immediately,O
before,O
the,O
occurrence,O
of,O
the,O
first,O
Change,O
in,O
Control,O
of,O
the,O
Company,O
;,O
,O
(,O
G,O
),O
Committing,O
a,O
material,O
breach,O
of,O
any,O
provision,O
of,O
this,O
Agreement,O
or,O
any,O
subsequent,O
written,O
agreement,O
the,O
Executive,O
has,O
or,O
may,O
in,O
the,O
future,O
have,O
with,O
the,O
Company,O
.,O
,O
(,O
f,O
),O
Termination,O
by,O
the,O
Executive,O
Without,O
Good,O
Reason,O
.,O
,O
At,O
any,O
time,O
during,O
the,O
Term,O
",",O
the,O
Executive,O
may,O
terminate,O
the,O
Executive,O
's,O
employment,O
under,O
this,O
Agreement,O
without,O
Good,O
Reason,O
.,O
,O
Any,O
termination,O
by,O
the,O
Executive,O
of,O
the,O
Executive,O
's,O
employment,O
under,O
this,O
Agreement,O
which,O
does,O
not,O
constitute,O
a,O
termination,O
for,O
Good,O
Reason,O
under,O
Section,O
4,O
(,O
d,O
),O
shall,O
be,O
deemed,O
a,O
termination,O
without,O
Good,O
Reason,O
.,O
,O
(,O
g,O
),O
Notice,O
of,O
Termination,O
.,O
,O
Except,O
for,O
termination,O
as,O
specified,O
in,O
Section,O
4,O
(,O
a,O
),O
",",O
any,O
termination,O
of,O
the,O
Executive,O
's,O
employment,O
by,O
the,O
Company,O
or,O
any,O
such,O
termination,O
by,O
the,O
Executive,O
shall,O
be,O
communicated,O
by,O
written,O
Notice,O
of,O
Termination,O
to,O
the,O
other,O
Party,O
to,O
this,O
Agreement,O
.,O
,O
For,O
purposes,O
of,O
this,O
Agreement,O
",",O
a,O
``,O
Notice,O
of,O
Termination,O
'',O
shall,O
mean,O
a,O
notice,O
which,O
shall,O
indicate,O
the,O
specific,O
termination,O
provision,O
in,O
this,O
Agreement,O
relied,O
upon,O
in,O
terminating,O
the,O
Executive,O
’,O
s,O
employment,O
.,O
,O
(,O
h,O
),O
Date,O
of,O
Termination,O
'',O
Date,O
of,O
Termination,O
'',O
shall,O
mean,O
:,O
(,O
i,O
),O
if,O
the,O
Executive,O
's,O
employment,O
is,O
terminated,O
by,O
his,O
death,O
",",O
the,O
date,O
of,O
his,O
death,O
;,O
(,O
ii,O
),O
if,O
the,O
Executive,O
's,O
employment,O
is,O
terminated,O
by,O
his,O
disability,O
or,O
other,O
inability,O
to,O
perform,O
his,O
essential,O
job,O
duties,O
",",O
thirty,O
(,O
30,O
),O
days,O
after,O
determination,O
by,O
the,O
Board,O
that,O
such,O
disability,O
or,O
other,O
inability,O
to,O
perform,O
is,O
of,O
a,O
duration,O
required,O
to,O
be,O
established,O
under,O
Section,O
4,O
(,O
b,O
),O
;,O
(,O
iii,O
),O
if,O
the,O
Executive,O
’,O
s,O
employment,O
is,O
terminated,O
by,O
the,O
Company,O
for,O
Cause,O
under,O
Section,O
4,O
(,O
c,O
),O
of,O
this,O
Agreement,O
",",O
the,O
date,O
on,O
which,O
Notice,O
of,O
Termination,O
is,O
given,O
or,O
the,O
expiration,O
of,O
any,O
period,O
for,O
cure,O
",",O
whichever,O
is,O
later,O
;,O
or,O
(,O
iv,O
),O
if,O
the,O
Executive,O
's,O
employment,O
is,O
terminated,O
by,O
either,O
the,O
Company,O
or,O
the,O
Executive,O
under,O
Section,O
4,O
(,O
d,O
),O
",",O
4,O
(,O
e,O
),O
or,O
4,O
(,O
f,O
),O
of,O
this,O
Agreement,O
",",O
thirty,O
(,O
30,O
),O
days,O
after,O
the,O
date,O
on,O
which,O
a,O
Notice,O
of,O
Termination,O
is,O
given,O
.,O
,O
Notwithstanding,O
the,O
foregoing,O
",",O
in,O
the,O
event,O
that,O
the,O
Executive,O
gives,O
a,O
Notice,O
of,O
Termination,O
to,O
the,O
Company,O
",",O
the,O
Company,O
may,O
unilaterally,O
accelerate,O
the,O
Date,O
of,O
Termination,O
",",O
and,O
such,O
acceleration,O
shall,O
not,O
result,O
in,O
a,O
different,O
form,O
of,O
termination,O
by,O
the,O
Company,O
for,O
purposes,O
of,O
this,O
Agreement,O
.,O
,O
(,O
a,O
),O
Termination,O
Generally,O
.,O
,O
If,O
the,O
Executive,O
's,O
employment,O
with,O
the,O
Company,O
is,O
terminated,O
:,O
(,O
i,O
),O
by,O
reason,O
of,O
death,O
;,O
(,O
ii,O
),O
by,O
reason,O
of,O
disability,O
or,O
other,O
inability,O
to,O
perform,O
his,O
essential,O
job,O
duties,O
;,O
(,O
iii,O
),O
by,O
the,O
Company,O
for,O
Cause,O
;,O
or,O
(,O
iv,O
),O
by,O
the,O
Executive,O
without,O
Good,O
Reason,O
",",O
the,O
Company,O
shall,O
pay,O
or,O
provide,O
to,O
the,O
Executive,O
(,O
or,O
to,O
his,O
authorized,O
representative,O
or,O
estate,O
),O
any,O
earned,O
but,O
unpaid,O
Base,O
Salary,O
",",O
unpaid,O
expense,O
reimbursements,O
",",O
a,O
reasonable,O
payment,O
for,O
any,O
unused,O
vacation,O
and,O
any,O
vested,O
benefits,O
the,O
Executive,O
may,O
have,O
under,O
any,O
Executive,O
Employee,O
Benefit,O
Plans,O
through,O
the,O
Date,O
of,O
Termination,O
as,O
calculated,O
on,O
a,O
prorated,O
annual,O
basis,O
(,O
``,O
Accrued,O
Benefit,O
'',O
),O
.,O
,O
Such,O
payments,O
shall,O
be,O
made,O
by,O
the,O
Company,O
within,O
sixty,O
(,O
60,O
),O
days,O
of,O
the,O
Date,O
of,O
Termination,O
.,O
,O
(,O
b,O
),O
Special,O
Rules,O
for,O
Calculating,O
Cash,O
Bonus,O
and,O
Equity-Based,O
Compensation,O
.,O
,O
Notwithstanding,O
the,O
terms,O
of,O
any,O
Executive,O
Employee,O
Benefit,O
Plans,O
",",O
or,O
the,O
performance,O
standards,O
established,O
by,O
the,O
Compensation,O
Committee,O
for,O
award,O
of,O
Cash,O
Bonus,O
Compensation,O
and/or,O
Equity-Based,O
Compensation,O
on,O
a,O
prospective,O
basis,O
",",O
the,O
prorated,O
portion,O
of,O
such,O
compensation,O
to,O
which,O
the,O
Executive,O
shall,O
be,O
entitled,O
as,O
a,O
result,O
of,O
termination,O
for,O
any,O
reason,O
shall,O
be,O
calculated,O
based,O
on,O
annual,O
amounts,O
the,O
Executive,O
earned,O
on,O
a,O
historical,O
basis,O
as,O
Cash,O
Bonus,O
Compensation,O
(,O
“,O
Termination,O
Year,O
Cash,O
Bonus,O
”,O
),O
and,O
Equity-Based,O
Compensation,O
(,O
“,O
Termination,O
Year,O
Equity-Based,O
Compensation,O
”,O
),O
",",O
respectively,O
.,O
,O
Each,O
of,O
the,O
Termination,O
Year,O
Cash,O
Bonus,O
and,O
the,O
Termination,O
Year,O
Equity-Based,O
Compensation,O
shall,O
be,O
calculated,O
separately,O
",",O
but,O
based,O
on,O
the,O
same,O
formula,O
.,O
,O
For,O
each,O
element,O
of,O
compensation,O
",",O
the,O
element,O
shall,O
be,O
the,O
greater,O
of,O
:,O
(,O
i,O
),O
the,O
average,O
amount,O
earned,O
by,O
the,O
Executive,O
during,O
the,O
three,O
(,O
3,O
),O
full,O
years,O
preceding,O
the,O
Date,O
of,O
Termination,O
;,O
or,O
(,O
ii,O
),O
the,O
amount,O
earned,O
by,O
the,O
Executive,O
in,O
the,O
last,O
full,O
year,O
preceding,O
the,O
Date,O
of,O
Termination,O
(,O
“,O
Formula,O
”,O
),O
.,O
,O
Each,O
amount,O
so,O
calculated,O
shall,O
be,O
prorated,O
as,O
described,O
in,O
Section,O
3,O
(,O
e,O
),O
of,O
this,O
Agreement,O
.,O
,O
Any,O
Termination,O
Year,O
Equity-Based,O
Compensation,O
shall,O
be,O
payable,O
in,O
cash,O
according,O
to,O
its,O
intrinsic,O
value,O
(,O
as,O
measured,O
for,O
purposes,O
of,O
the,O
Company,O
’,O
s,O
audited,O
financial,O
statements,O
),O
in,O
lieu,O
of,O
any,O
award,O
of,O
Securities,O
.,O
,O
Such,O
payment,O
shall,O
be,O
made,O
within,O
sixty,O
(,O
60,O
),O
days,O
of,O
the,O
Date,O
of,O
Termination,O
of,O
the,O
Executive,O
.,O
,O
(,O
c,O
),O
Termination,O
by,O
Company,O
Without,O
Cause,O
or,O
by,O
Executive,O
With,O
Good,O
Reason,O
If,O
the,O
Executive,O
's,O
employment,O
with,O
the,O
Company,O
is,O
terminated,O
by,O
:,O
(,O
w,O
),O
the,O
Company,O
without,O
Cause,O
or,O
(,O
x,O
),O
by,O
the,O
Executive,O
with,O
Good,O
Reason,O
",",O
then,O
the,O
Company,O
shall,O
",",O
through,O
the,O
Date,O
of,O
Termination,O
",",O
pay,O
the,O
Executive,O
his,O
Accrued,O
Benefit,O
",",O
including,O
the,O
amounts,O
calculated,O
under,O
the,O
special,O
rules,O
described,O
in,O
Section,O
5,O
(,O
b,O
),O
of,O
this,O
Agreement,O
",",O
on,O
the,O
conditions,O
that,O
:,O
(,O
y,O
),O
the,O
Executive,O
delivers,O
a,O
general,O
release,O
of,O
claims,O
in,O
a,O
form,O
and,O
manner,O
satisfactory,O
to,O
the,O
Company,O
(,O
``,O
Release,O
'',O
),O
within,O
ten,O
(,O
10,O
),O
days,O
of,O
the,O
Date,O
of,O
Termination,O
;,O
and,O
(,O
z,O
),O
within,O
twenty-one,O
(,O
21,O
),O
days,O
of,O
the,O
Executive,O
’,O
s,O
receipt,O
of,O
the,O
Release,O
from,O
the,O
Company,O
the,O
Executive,O
does,O
not,O
revoke,O
such,O
Release,O
during,O
a,O
seven,O
(,O
7,O
),O
day,O
revocation,O
period,O
.,O
,O
If,O
the,O
Executive,O
has,O
met,O
both,O
conditions,O
",",O
the,O
Company,O
shall,O
pay,O
the,O
Executive,O
the,O
following,O
additional,O
amounts,O
sixty,O
(,O
60,O
),O
days,O
following,O
the,O
Date,O
of,O
Termination,O
of,O
the,O
Executive,O
:,O
,O
(,O
i,O
),O
Five,O
(,O
5,O
),O
times,O
the,O
aggregate,O
of,O
the,O
following,O
three,O
elements,O
of,O
compensation,O
:,O
(,O
1,O
),O
the,O
Executive,O
’,O
s,O
annual,O
Base,O
Salary,O
(,O
as,O
calculated,O
using,O
the,O
Formula,O
),O
;,O
(,O
2,O
),O
the,O
Executive,O
’,O
s,O
Termination,O
Year,O
Cash,O
Bonus,O
;,O
and,O
(,O
3,O
),O
the,O
Executive,O
’,O
s,O
Termination,O
Year,O
Equity-Based,O
Compensation,O
.,O
,O
Such,O
amount,O
shall,O
be,O
paid,O
out,O
in,O
a,O
lump,O
sum,O
on,O
the,O
first,O
payroll,O
date,O
after,O
the,O
Date,O
of,O
Termination,O
or,O
expiration,O
of,O
the,O
seven,O
(,O
7,O
),O
day,O
revocation,O
period,O
for,O
the,O
Release,O
",",O
if,O
later,O
.,O
,O
(,O
ii,O
),O
Notwithstanding,O
the,O
terms,O
of,O
any,O
award,O
agreement,O
governing,O
such,O
stock,O
options,O
with,O
respect,O
to,O
termination,O
of,O
employment,O
",",O
the,O
Executive,O
shall,O
continue,O
to,O
vest,O
in,O
Executive,O
's,O
options,O
",",O
in,O
accordance,O
with,O
the,O
governing,O
stock,O
options,O
and,O
all,O
of,O
the,O
terms,O
of,O
those,O
plans,O
shall,O
continue,O
to,O
be,O
in,O
effect,O
",",O
as,O
though,O
Executive,O
had,O
remained,O
an,O
active,O
employee,O
",",O
for,O
twelve,O
(,O
12,O
),O
months,O
beyond,O
the,O
Date,O
of,O
Termination,O
.,O
,O
(,O
iii,O
),O
The,O
Company,O
shall,O
provide,O
to,O
the,O
Executive,O
health,O
",",O
dental,O
and,O
life,O
insurance,O
on,O
the,O
same,O
terms,O
and,O
conditions,O
",",O
as,O
though,O
the,O
Executive,O
had,O
remained,O
an,O
active,O
employee,O
",",O
for,O
eighteen,O
(,O
18,O
),O
months,O
beyond,O
the,O
Date,O
of,O
Termination,O
to,O
the,O
extent,O
they,O
existed,O
at,O
the,O
Date,O
of,O
Termination,O
.,O
,O
(,O
iv,O
),O
The,O
Company,O
shall,O
pay,O
to,O
the,O
Executive,O
all,O
reasonable,O
legal,O
and,O
arbitration,O
fees,O
and,O
expenses,O
incurred,O
by,O
the,O
Executive,O
in,O
obtaining,O
or,O
enforcing,O
any,O
right,O
or,O
benefit,O
provided,O
by,O
this,O
Agreement,O
",",O
except,O
in,O
cases,O
determined,O
by,O
the,O
court,O
or,O
arbitrator,O
to,O
involve,O
the,O
initiation,O
of,O
frivolous,O
or,O
bad,O
faith,O
litigation,O
or,O
arbitration,O
by,O
the,O
Executive,O
.,O
,O
Change,O
of,O
Control,O
A,O
“,O
Change,O
of,O
Control,O
”,O
shall,O
mean,O
the,O
occurrence,O
of,O
any,O
one,O
of,O
the,O
following,O
events,O
upon,O
the,O
occurrence,O
of,O
a,O
Change,O
in,O
Control,O
during,O
the,O
Term,O
.,O
,O
The,O
Company,O
shall,O
pay,O
to,O
the,O
Executive,O
the,O
amounts,O
he,O
would,O
have,O
otherwise,O
received,O
through,O
the,O
remainder,O
of,O
the,O
Term,O
",",O
as,O
set,O
forth,O
in,O
Sections,O
3,O
(,O
a,O
),O
(,O
i,O
),O
and,O
(,O
ii,O
),O
of,O
this,O
Agreement,O
",",O
had,O
he,O
remained,O
in,O
service,O
throughout,O
that,O
period,O
.,O
,O
Payment,O
shall,O
be,O
made,O
in,O
a,O
lump,O
sum,O
within,O
thirty,O
(,O
30,O
),O
days,O
following,O
the,O
occurrence,O
of,O
the,O
Change,O
in,O
Control,O
.,O
,O
For,O
this,O
purpose,O
",",O
“,O
Change,O
in,O
Control,O
”,O
means,O
and,O
shall,O
be,O
deemed,O
to,O
have,O
occurred,O
:,O
,O
(,O
d,O
),O
upon,O
consummation,O
of,O
the,O
sale,O
or,O
disposition,O
by,O
the,O
Company,O
of,O
all,O
or,O
substantially,O
all,O
of,O
the,O
Company,O
’,O
s,O
assets,O
",",O
other,O
than,O
any,O
such,O
transaction,O
which,O
would,O
result,O
in,O
a,O
Related,O
Party,O
owning,O
or,O
acquiring,O
more,O
than,O
fifty,O
percent,O
(,O
50,O
%,O
),O
of,O
the,O
assets,O
owned,O
by,O
the,O
Company,O
immediately,O
prior,O
to,O
the,O
transaction,O
.,O
,O
(,O
e,O
),O
For,O
purposes,O
of,O
the,O
foregoing,O
definitions,O
",",O
the,O
following,O
terms,O
shall,O
have,O
the,O
following,O
meanings,O
:,O
(,O
i,O
),O
“,O
Voting,O
Securities,O
or,O
Security,O
”,O
means,O
any,O
securities,O
of,O
the,O
Company,O
which,O
carry,O
the,O
right,O
to,O
vote,O
generally,O
in,O
the,O
election,O
of,O
directors,O
;,O
(,O
ii,O
),O
“,O
Subsidiary,O
”,O
or,O
“,O
Subsidiaries,O
”,O
means,O
",",O
with,O
respect,O
to,O
any,O
Person,O
",",O
any,O
corporation,O
",",O
partnership,O
",",O
limited,O
liability,O
company,O
",",O
association,O
or,O
other,O
business,O
entity,O
of,O
which,O
:,O
(,O
A,O
),O
if,O
a,O
corporation,O
",",O
fifty,O
percent,O
(,O
50,O
%,O
),O
or,O
more,O
of,O
the,O
total,O
voting,O
power,O
of,O
shares,O
of,O
stock,O
entitled,O
(,O
without,O
regard,O
to,O
the,O
occurrence,O
of,O
any,O
contingency,O
),O
to,O
vote,O
in,O
the,O
election,O
of,O
directors,O
",",O
managers,O
or,O
trustees,O
thereof,O
is,O
at,O
the,O
time,O
owned,O
or,O
controlled,O
",",O
directly,O
or,O
indirectly,O
",",O
by,O
that,O
Person,O
or,O
one,O
or,O
more,O
of,O
the,O
other,O
Subsidiaries,O
of,O
that,O
Person,O
or,O
combination,O
thereof,O
;,O
or,O
(,O
B,O
),O
if,O
a,O
partnership,O
",",O
limited,O
liability,O
company,O
",",O
association,O
or,O
other,O
business,O
entity,O
",",O
fifty,O
percent,O
(,O
50,O
%,O
),O
or,O
more,O
of,O
the,O
partnership,O
or,O
other,O
similar,O
ownership,O
interest,O
thereof,O
is,O
at,O
the,O
time,O
owned,O
or,O
controlled,O
",",O
directly,O
or,O
indirectly,O
",",O
by,O
any,O
Person,O
or,O
one,O
or,O
more,O
Subsidiaries,O
of,O
that,O
Person,O
or,O
a,O
combination,O
thereof,O
.,O
,O
For,O
purposes,O
of,O
this,O
definition,O
",",O
a,O
Person,O
or,O
Persons,O
shall,O
be,O
deemed,O
to,O
have,O
a,O
fifty,O
percent,O
(,O
50,O
%,O
),O
or,O
more,O
ownership,O
interest,O
in,O
a,O
partnership,O
",",O
limited,O
liability,O
company,O
",",O
association,O
or,O
other,O
business,O
entity,O
if,O
such,O
Person,O
or,O
Persons,O
are,O
allocated,O
fifty,O
percent,O
(,O
50,O
%,O
),O
or,O
more,O
of,O
partnership,O
",",O
limited,O
liability,O
company,O
",",O
association,O
or,O
other,O
business,O
entity,O
gains,O
or,O
losses,O
or,O
control,O
the,O
managing,O
director,O
or,O
member,O
or,O
general,O
partner,O
of,O
such,O
partnership,O
",",O
limited,O
liability,O
company,O
",",O
association,O
or,O
other,O
business,O
entity,O
;,O
(,O
iii,O
),O
“,O
Related,O
Party,O
”,O
means,O
:,O
(,O
A,O
),O
a,O
Subsidiary,O
of,O
the,O
Company,O
;,O
(,O
B,O
),O
an,O
employee,O
or,O
group,O
of,O
employees,O
of,O
the,O
Company,O
or,O
any,O
Subsidiary,O
of,O
the,O
Company,O
;,O
(,O
C,O
),O
a,O
trustee,O
or,O
other,O
fiduciary,O
holding,O
Securities,O
under,O
an,O
employee,O
benefit,O
plan,O
of,O
the,O
Company,O
or,O
any,O
majority-owned,O
Subsidiary,O
of,O
the,O
Company,O
;,O
or,O
(,O
D,O
),O
a,O
corporation,O
owned,O
directly,O
or,O
indirectly,O
by,O
the,O
stockholders,O
of,O
the,O
Company,O
in,O
substantially,O
the,O
same,O
proportion,O
as,O
their,O
ownership,O
of,O
Voting,O
Securities,O
;,O
and,O
(,O
iv,O
),O
“,O
Person,O
”,O
means,O
an,O
individual,O
",",O
a,O
partnership,O
",",O
a,O
corporation,O
",",O
a,O
limited,O
liability,O
company,O
",",O
an,O
association,O
",",O
a,O
joint,O
stock,O
company,O
",",O
an,O
estate,O
",",O
a,O
trust,O
",",O
a,O
joint,O
venture,O
",",O
an,O
unincorporated,O
organization,O
or,O
a,O
governmental,O
entity,O
or,O
any,O
department,O
",",O
agency,O
or,O
political,O
subdivision,O
thereof,O
.,O
,O
Mediation,O
and,O
Arbitration,O
of,O
Disputes,O
.,O
,O
If,O
a,O
dispute,O
arises,O
relating,O
to,O
this,O
Agreement,O
or,O
the,O
termination,O
thereof,O
",",O
claims,O
for,O
breach,O
of,O
contract,O
or,O
breach,O
of,O
the,O
covenant,O
of,O
good,O
faith,O
and,O
fair,O
dealing,O
",",O
claims,O
of,O
discrimination,O
or,O
any,O
other,O
claims,O
under,O
any,O
federal,O
",",O
state,O
or,O
local,O
law,O
or,O
regulation,O
now,O
in,O
existence,O
or,O
hereinafter,O
enacted,O
",",O
and,O
as,O
amended,O
from,O
time,O
to,O
time,O
(,O
“,O
Dispute,O
),O
",",O
the,O
Parties,O
shall,O
attempt,O
in,O
good,O
faith,O
to,O
settle,O
the,O
Dispute,O
through,O
mediation,O
conducted,O
by,O
a,O
mediator,O
to,O
be,O
mutually,O
selected,O
by,O
the,O
Parties,O
.,O
,O
The,O
Company,O
shall,O
pay,O
the,O
costs,O
of,O
the,O
mediator,O
.,O
,O
Each,O
Party,O
shall,O
cooperate,O
fully,O
and,O
fairly,O
with,O
the,O
mediator,O
",",O
and,O
shall,O
in,O
good,O
faith,O
attempt,O
to,O
reach,O
a,O
mutually,O
satisfactory,O
compromise,O
of,O
the,O
Dispute,O
.,O
,O
If,O
the,O
Dispute,O
is,O
not,O
resolved,O
within,O
thirty,O
(,O
30,O
),O
days,O
after,O
it,O
is,O
referred,O
to,O
the,O
mediator,O
",",O
it,O
shall,O
be,O
resolved,O
through,O
final,O
and,O
binding,O
arbitration,O
",",O
as,O
specified,O
in,O
this,O
Section,O
7,O
.,O
,O
Binding,O
arbitration,O
shall,O
be,O
conducted,O
by,O
the,O
Judicial,I-BUSINESS
Arbitration,I-BUSINESS
and,I-BUSINESS
Mediation,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
“,O
JAMS,I-BUSINESS
”,O
),O
",",O
sitting,O
in,O
San,I-LOCATION
Diego,I-LOCATION
County,I-LOCATION
",",O
California,I-LOCATION
",",O
for,O
resolution,O
by,O
a,O
single,O
arbitrator,O
acceptable,O
to,O
both,O
Parties,O
.,O
,O
If,O
the,O
Parties,O
fail,O
to,O
agree,O
to,O
an,O
arbitrator,O
within,O
ten,O
(,O
10,O
),O
business,O
days,O
of,O
a,O
written,O
demand,O
for,O
arbitration,O
being,O
sent,O
by,O
one,O
Party,O
to,O
the,O
other,O
Party,O
",",O
then,O
JAMS,I-BUSINESS
shall,O
select,O
the,O
arbitrator,O
according,O
to,O
the,O
JAMS,I-BUSINESS
Rules,B-LEGISLATION/ACT
for,I-LEGISLATION/ACT
Commercial,I-LEGISLATION/ACT
Arbitration,I-LEGISLATION/ACT
.,O
,O
The,O
arbitration,O
shall,O
be,O
conducted,O
pursuant,O
to,O
the,O
California,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Civil,I-LEGISLATION/ACT
Procedure,I-LEGISLATION/ACT
and,O
the,O
California,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Evidence,I-LEGISLATION/ACT
.,O
,O
The,O
award,O
of,O
such,O
arbitrator,O
shall,O
be,O
final,O
and,O
binding,O
on,O
the,O
Parties,O
",",O
and,O
may,O
be,O
enforced,O
by,O
any,O
court,O
of,O
competent,O
jurisdiction,O
.,O
,O
In,O
the,O
event,O
of,O
arbitration,O
to,O
resolve,O
a,O
Dispute,O
",",O
the,O
prevailing,O
Party,O
shall,O
be,O
entitled,O
to,O
recover,O
its,O
attorney,O
’,O
s,O
fees,O
and,O
other,O
out-of-pocket,O
costs,O
incurred,O
in,O
connection,O
therewith,O
from,O
any,O
non-prevailing,O
Party,O
involved,O
therein,O
.,O
,O
Consent,O
to,O
Jurisdiction,O
.,O
,O
To,O
the,O
extent,O
that,O
any,O
court,O
action,O
is,O
permitted,O
consistent,O
with,O
or,O
to,O
enforce,O
Section,O
7,O
of,O
this,O
Agreement,O
",",O
the,O
Parties,O
hereby,O
consent,O
to,O
the,O
jurisdiction,O
of,O
the,O
San,I-COURT
Diego,I-COURT
County,I-COURT
Superior,I-COURT
Court,I-COURT
of,I-COURT
California,I-COURT
State,I-COURT
and,O
the,O
United,I-COURT
States,I-COURT
District,I-COURT
Court,I-COURT
for,I-COURT
the,I-COURT
Southern,I-COURT
District,I-COURT
of,I-COURT
California,I-COURT
.,O
,O
Accordingly,O
",",O
with,O
respect,O
to,O
any,O
such,O
court,O
action,O
",",O
the,O
Executive,O
and,O
the,O
Company,O
:,O
(,O
i,O
),O
submit,O
to,O
the,O
personal,O
jurisdiction,O
of,O
such,O
courts,O
;,O
(,O
ii,O
),O
consent,O
to,O
service,O
of,O
process,O
;,O
and,O
(,O
iii,O
),O
waive,O
any,O
other,O
requirement,O
(,O
whether,O
imposed,O
by,O
statute,O
",",O
rule,O
of,O
court,O
",",O
or,O
otherwise,O
),O
with,O
respect,O
to,O
personal,O
jurisdiction,O
or,O
service,O
of,O
process,O
.,O
,O
This,O
Agreement,O
constitutes,O
the,O
entire,O
agreement,O
and,O
understanding,O
between,O
the,O
Parties,O
with,O
respect,O
to,O
the,O
subject,O
matter,O
of,O
this,O
Agreement,O
and,O
supersedes,O
all,O
prior,O
agreements,O
between,O
the,O
Parties,O
concerning,O
such,O
subject,O
matter,O
.,O
,O
Successor,O
to,O
the,O
Executive,O
.,O
,O
This,O
Agreement,O
shall,O
inure,O
to,O
the,O
benefit,O
of,O
and,O
be,O
enforceable,O
by,O
the,O
Executive,O
's,O
personal,O
representatives,O
",",O
executors,O
",",O
administrators,O
",",O
heirs,O
",",O
distributees,O
",",O
devisees,O
and,O
legatees,O
.,O
,O
In,O
the,O
event,O
of,O
the,O
Executive,O
's,O
death,O
after,O
his,O
termination,O
of,O
employment,O
",",O
but,O
prior,O
to,O
the,O
completion,O
by,O
the,O
Company,O
of,O
all,O
payments,O
due,O
him,O
under,O
this,O
Agreement,O
",",O
the,O
Company,O
shall,O
continue,O
such,O
payments,O
to,O
the,O
Executive,O
's,O
beneficiary,O
designated,O
in,O
writing,O
to,O
the,O
Company,O
prior,O
to,O
his,O
death,O
(,O
or,O
to,O
his,O
estate,O
",",O
if,O
the,O
Executive,O
fails,O
to,O
make,O
such,O
designation,O
),O
.,O
,O
Enforceability,O
If,O
any,O
portion,O
or,O
provision,O
of,O
this,O
Agreement,O
(,O
including,O
",",O
without,O
limitation,O
",",O
any,O
portion,O
or,O
provision,O
of,O
any,O
section,O
of,O
this,O
Agreement,O
),O
shall,O
to,O
any,O
extent,O
be,O
declared,O
illegal,O
or,O
unenforceable,O
by,O
a,O
court,O
of,O
competent,O
jurisdiction,O
",",O
then,O
the,O
remainder,O
of,O
this,O
Agreement,O
",",O
or,O
the,O
application,O
of,O
such,O
portion,O
or,O
provision,O
in,O
circumstances,O
other,O
than,O
those,O
as,O
to,O
which,O
it,O
is,O
so,O
declared,O
illegal,O
or,O
unenforceable,O
",",O
shall,O
not,O
be,O
affected,O
thereby,O
",",O
and,O
each,O
portion,O
and,O
provision,O
of,O
this,O
Agreement,O
shall,O
be,O
valid,O
and,O
enforceable,O
to,O
the,O
fullest,O
extent,O
permitted,O
by,O
law,O
.,O
,O
No,O
waiver,O
of,O
any,O
provision,O
hereof,O
shall,O
be,O
effective,O
",",O
unless,O
made,O
in,O
writing,O
and,O
signed,O
by,O
the,O
waiving,O
Party,O
.,O
,O
The,O
failure,O
of,O
any,O
Party,O
to,O
require,O
the,O
performance,O
of,O
any,O
term,O
or,O
obligation,O
of,O
this,O
Agreement,O
",",O
or,O
the,O
waiver,O
by,O
any,O
Party,O
of,O
any,O
breach,O
of,O
this,O
Agreement,O
",",O
shall,O
not,O
prevent,O
any,O
subsequent,O
enforcement,O
of,O
such,O
term,O
or,O
obligation,O
or,O
be,O
deemed,O
a,O
waiver,O
of,O
any,O
subsequent,O
breach,O
.,O
,O
Any,O
notices,O
",",O
requests,O
",",O
demands,O
and,O
other,O
communications,O
provided,O
for,O
by,O
this,O
Agreement,O
shall,O
be,O
sufficient,O
if,O
in,O
writing,O
and,O
delivered,O
in,O
person,O
or,O
sent,O
by,O
a,O
nationally,O
recognized,O
overnight,O
courier,O
service,O
or,O
by,O
registered,O
or,O
certified,O
mail,O
",",O
postage,O
prepaid,O
",",O
return,O
receipt,O
requested,O
",",O
to,O
the,O
Executive,O
at,O
the,O
last,O
address,O
the,O
Executive,O
has,O
filed,O
in,O
writing,O
with,O
the,O
Company,O
or,O
",",O
in,O
the,O
case,O
of,O
the,O
Company,O
",",O
to,O
Kenneth,I-PERSON
L.,I-PERSON
Waggoner,I-PERSON
",",O
Executive,O
Vice,O
President,O
Legal,O
",",O
General,O
Counsel,O
and,O
Director,O
of,O
the,O
Company,O
",",O
12526,O
High,I-LOCATION
Bluff,I-LOCATION
Drive,I-LOCATION
",",O
Suite,O
155,O
",",O
San,I-LOCATION
Diego,I-LOCATION
",",O
California,I-LOCATION
USA,B-LOCATION
.,O
,O
Effect,O
on,O
Other,O
Plans,O
.,O
,O
Nothing,O
in,O
this,O
Agreement,O
shall,O
be,O
construed,O
to,O
limit,O
the,O
rights,O
of,O
the,O
Executive,O
under,O
the,O
Company,O
's,O
benefit,O
plans,O
",",O
programs,O
or,O
policies,O
except,O
:,O
(,O
i,O
),O
as,O
otherwise,O
provided,O
in,O
this,O
Agreement,O
;,O
and,O
(,O
ii,O
),O
that,O
the,O
Executive,O
shall,O
have,O
no,O
rights,O
to,O
any,O
severance,O
or,O
similar,O
benefits,O
under,O
any,O
severance,O
pay,O
plan,O
",",O
policy,O
or,O
practice,O
.,O
,O
This,O
Agreement,O
may,O
be,O
amended,O
or,O
modified,O
only,O
by,O
a,O
written,O
instrument,O
signed,O
both,O
by,O
the,O
Executive,O
and,O
by,O
a,O
duly,O
authorized,O
representative,O
of,O
the,O
Company,O
.,O
,O
This,O
is,O
a,O
California,O
contract,O
and,O
shall,O
be,O
construed,O
under,O
and,O
be,O
governed,O
in,O
all,O
respects,O
by,O
the,O
laws,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
California,I-LOCATION
",",O
without,O
giving,O
effect,O
to,O
the,O
conflict,O
of,O
laws,O
principles,O
of,O
California,I-LOCATION
.,O
,O
With,O
respect,O
to,O
any,O
disputes,O
concerning,O
federal,O
law,O
",",O
such,O
disputes,O
shall,O
be,O
determined,O
in,O
accordance,O
with,O
the,O
law,O
as,O
it,O
would,O
be,O
interpreted,O
and,O
applied,O
by,O
the,O
United,I-COURT
States,I-COURT
Court,I-COURT
of,I-COURT
Appeals,I-COURT
for,I-COURT
the,I-COURT
Ninth,I-COURT
Circuit,I-COURT
.,O
,O
This,O
Agreement,O
may,O
be,O
executed,O
in,O
any,O
number,O
of,O
counterparts,O
",",O
each,O
of,O
which,O
when,O
so,O
executed,O
and,O
delivered,O
shall,O
be,O
taken,O
to,O
be,O
an,O
original,O
",",O
and,O
such,O
counterparts,O
shall,O
together,O
constitute,O
one,O
and,O
the,O
same,O
document,O
.,O
,O
Successor,O
to,O
Company,O
.,O
,O
The,O
Company,O
shall,O
require,O
any,O
successor,O
(,O
whether,O
direct,O
or,O
indirect,O
",",O
by,O
purchase,O
",",O
merger,O
",",O
consolidation,O
or,O
otherwise,O
),O
to,O
all,O
or,O
substantially,O
all,O
of,O
the,O
business,O
or,O
assets,O
of,O
the,O
Company,O
expressly,O
to,O
assume,O
and,O
agree,O
to,O
perform,O
this,O
Agreement,O
to,O
the,O
same,O
extent,O
that,O
the,O
Company,O
would,O
be,O
required,O
to,O
perform,O
it,O
if,O
no,O
succession,O
had,O
taken,O
place,O
.,O
,O
Failure,O
of,O
the,O
Company,O
to,O
obtain,O
an,O
assumption,O
of,O
this,O
Agreement,O
at,O
or,O
prior,O
to,O
the,O
effectiveness,O
of,O
any,O
succession,O
shall,O
be,O
a,O
breach,O
of,O
this,O
Agreement,O
and,O
shall,O
constitute,O
Good,O
Reason,O
if,O
the,O
Executive,O
elects,O
to,O
terminate,O
employment,O
.,O
,O
Wherever,O
used,O
herein,O
",",O
a,O
pronoun,O
in,O
the,O
masculine,O
gender,O
shall,O
be,O
considered,O
as,O
including,O
the,O
feminine,O
gender,O
unless,O
the,O
context,O
clearly,O
indicates,O
otherwise,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
the,O
parties,O
have,O
executed,O
this,O
Agreement,O
effective,O
on,O
the,O
date,O
and,O
year,O
first,O
above,O
written,O
.,O
,O
CHINA,I-BUSINESS
TEL,I-BUSINESS
GROUP,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
-DOCSTART-,O
,O
Eaton,I-BUSINESS
Vance,I-BUSINESS
Global,I-BUSINESS
Macro,I-BUSINESS
Absolute,I-BUSINESS
Return,I-BUSINESS
Fund,I-BUSINESS
Class,O
/Ticker,O
A/EAGMX,O
C/ECGMX,O
I/EIGMX,O
This,O
Summary,O
Prospectus,O
is,O
designed,O
to,O
provide,O
investors,O
with,O
key,O
fund,O
information,O
in,O
a,O
clear,O
and,O
concise,O
format,O
.,O
,O
Before,O
you,O
invest,O
",",O
you,O
may,O
want,O
to,O
review,O
the,O
Fund,O
s,O
Prospectus,O
and,O
Statement,O
of,O
Additional,O
Information,O
",",O
which,O
contain,O
more,O
information,O
about,O
the,O
Fund,O
and,O
its,O
risks,O
.,O
,O
The,O
Fund,O
s,O
Prospectus,O
and,O
Statement,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Additional,I-MISCELLANEOUS
Information,I-MISCELLANEOUS
",",O
both,O
dated,O
March,O
1,O
",",O
2010,O
",",O
are,O
incorporated,O
by,O
reference,O
into,O
this,O
Summary,O
Prospectus,O
.,O
,O
For,O
free,O
paper,O
or,O
electronic,O
copies,O
of,O
the,O
Fund,O
s,O
Prospectus,O
",",O
Statement,O
of,O
Additional,O
Information,O
",",O
and,O
other,O
information,O
about,O
the,O
Fund,O
",",O
go,O
to,O
http,O
:,O
//funddocuments.eatonvance.com,O
",",O
email,O
a,O
request,O
to,O
contact,O
@,O
eatonvance.com,O
",",O
call,O
1-800-262-1122,O
",",O
or,O
ask,O
any,O
financial,O
advisor,O
",",O
bank,O
",",O
or,O
broker-dealer,O
who,O
offers,O
shares,O
of,O
the,O
Fund,O
.,O
,O
Unless,O
otherwise,O
noted,O
",",O
page,O
number,O
references,O
refer,O
to,O
the,O
current,O
Prospectus,O
for,O
this,O
Fund,O
.,O
,O
Investment,O
Objective,O
The,O
Fund,O
s,O
investment,O
objective,O
is,O
total,O
return,O
.,O
,O
Total,O
return,O
is,O
defined,O
as,O
income,O
plus,O
capital,O
appreciation,O
.,O
,O
The,O
Fund,O
primarily,O
invests,O
its,O
assets,O
in,O
Global,I-BUSINESS
Macro,I-BUSINESS
Portfolio,I-BUSINESS
",",O
a,O
separate,O
registered,O
investment,O
company,O
with,O
the,O
same,O
objective,O
and,O
policies,O
as,O
the,O
Fund,O
.,O
,O
Fees,O
and,O
Expenses,O
of,O
the,O
Fund,O
This,O
table,O
describes,O
the,O
fees,O
and,O
expenses,O
that,O
you,O
may,O
pay,O
if,O
you,O
buy,O
and,O
hold,O
shares,O
of,O
the,O
Fund,O
.,O
,O
You,O
may,O
qualify,O
for,O
a,O
reduced,O
sales,O
charge,O
if,O
you,O
invest,O
",",O
or,O
agree,O
to,O
invest,O
over,O
a,O
13-month,O
period,O
",",O
at,O
least,O
$,O
"50,000",O
in,O
Eaton,I-BUSINESS
Vance,I-BUSINESS
Funds,I-BUSINESS
.,O
,O
More,O
information,O
about,O
these,O
and,O
other,O
discounts,O
is,O
available,O
from,O
your,O
financial,O
intermediary,O
and,O
in,O
Sales,O
Charges,O
beginning,O
on,O
page,O
28,O
of,O
the,O
Fund,O
s,O
Prospectus,O
and,O
page,O
27,O
of,O
the,O
Fund,O
s,O
Statement,O
of,O
Additional,O
Information,O
.,O
,O
This,O
Example,O
is,O
intended,O
to,O
help,O
you,O
compare,O
the,O
cost,O
of,O
investing,O
in,O
the,O
Fund,O
with,O
the,O
cost,O
of,O
investing,O
in,O
other,O
mutual,O
funds,O
.,O
,O
The,O
Example,O
assumes,O
that,O
you,O
invest,O
$,O
"10,000",O
in,O
the,O
Fund,O
for,O
the,O
time,O
periods,O
indicated,O
and,O
then,O
redeem,O
all,O
of,O
your,O
shares,O
at,O
the,O
end,O
of,O
those,O
periods,O
.,O
,O
The,O
Example,O
also,O
assumes,O
that,O
your,O
investment,O
has,O
a,O
5,O
%,O
return,O
each,O
year,O
and,O
that,O
the,O
operating,O
expenses,O
remain,O
the,O
same,O
.,O
,O
Although,O
your,O
actual,O
costs,O
may,O
be,O
higher,O
or,O
lower,O
",",O
based,O
on,O
these,O
assumptions,O
your,O
costs,O
would,O
be,O
:,O
,O
Portfolio,O
Turnover,O
The,O
Fund,O
pays,O
transaction,O
costs,O
",",O
such,O
as,O
commissions,O
",",O
when,O
it,O
buys,O
and,O
sells,O
securities,O
(,O
or,O
``,O
turns,O
over,O
'',O
its,O
portfolio,O
),O
.,O
,O
A,O
higher,O
portfolio,O
turnover,O
rate,O
may,O
indicate,O
higher,O
transaction,O
costs,O
and,O
may,O
result,O
in,O
higher,O
taxes,O
when,O
Fund,O
shares,O
are,O
held,O
in,O
a,O
taxable,O
account,O
.,O
,O
These,O
costs,O
",",O
which,O
are,O
not,O
reflected,O
in,O
Annual,O
Fund,O
Operating,O
Expenses,O
or,O
in,O
the,O
Example,O
",",O
affect,O
the,O
Fund,O
s,O
performance,O
.,O
,O
During,O
the,O
most,O
recent,O
fiscal,O
year,O
",",O
the,O
Fund,O
s,O
portfolio,O
turnover,O
rate,O
was,O
25,O
%,O
of,O
the,O
average,O
value,O
of,O
its,O
portfolio,O
.,O
,O
Principal,O
Investment,O
Strategies,O
The,O
Fund,O
seeks,O
its,O
objective,O
by,O
investing,O
in,O
securities,O
",",O
derivatives,O
and,O
other,O
instruments,O
to,O
establish,O
long,O
and,O
short,O
investment,O
exposures,O
around,O
the,O
world,O
.,O
,O
The,O
Fund,O
normally,O
invests,O
in,O
at,O
least,O
three,O
countries,O
(,O
one,O
of,O
which,O
may,O
be,O
the,O
United,I-LOCATION
States,I-LOCATION
),O
.,O
,O
The,O
Fund,O
s,O
long,O
and,O
short,O
investments,O
primarily,O
are,O
sovereign,O
exposures,O
",",O
including,O
sovereign,O
debt,O
",",O
currencies,O
",",O
and,O
interest,O
rates,O
.,O
,O
The,O
Fund,O
also,O
may,O
invest,O
in,O
corporate,O
debt,O
issuers,O
",",O
both,O
foreign,O
and,O
domestic,O
",",O
including,O
banks,O
",",O
and,O
",",O
to,O
a,O
more,O
limited,O
extent,O
",",O
may,O
be,O
exposed,O
to,O
foreign,O
or,O
domestic,O
equities,O
.,O
,O
Normally,O
not,O
more,O
than,O
25,O
%,O
of,O
the,O
Fund,O
s,O
assets,O
are,O
invested,O
in,O
securities,O
or,O
issuers,O
in,O
any,O
one,O
foreign,O
country,O
or,O
denominated,O
in,O
any,O
one,O
currency,O
other,O
than,O
the,O
U.S.,I-LOCATION
dollar,O
or,O
the,O
euro,I-MISCELLANEOUS
.,O
,O
The,O
Fund,O
may,O
have,O
significant,O
exposure,O
to,O
foreign,O
currencies,O
.,O
,O
The,O
Fund,O
s,O
investments,O
may,O
be,O
highly,O
concentrated,O
in,O
a,O
geographic,O
region,O
or,O
country,O
and,O
typically,O
a,O
portion,O
will,O
be,O
invested,O
in,O
emerging,O
market,O
countries,O
.,O
,O
In,O
seeking,O
its,O
objective,O
",",O
the,O
Fund,O
invests,O
in,O
fixed,O
income,O
securities,O
",",O
a,O
wide,O
variety,O
of,O
derivative,O
instruments,O
",",O
commodities-related,O
investments,O
and,O
",",O
to,O
a,O
more,O
limited,O
extent,O
",",O
equity,O
securities,O
.,O
,O
The,O
Fund,O
may,O
engage,O
in,O
repurchase,O
agreements,O
",",O
reverse,O
repurchase,O
agreements,O
",",O
forward,O
commitments,O
",",O
short,O
sales,O
and,O
securities,O
lending,O
and,O
it,O
is,O
authorized,O
to,O
borrow,O
for,O
investment,O
purposes,O
on,O
a,O
non-recourse,O
basis,O
.,O
,O
The,O
Fund,O
invests,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
and,O
abroad,O
",",O
including,O
emerging,O
markets,O
.,O
,O
The,O
Fund,O
frequently,O
has,O
significant,O
exposure,O
to,O
foreign,O
investments,O
and,O
derivatives,O
.,O
,O
In,O
managing,O
the,O
Fund,O
",",O
the,O
investment,O
adviser,O
adjusts,O
investments,O
in,O
an,O
effort,O
to,O
take,O
advantage,O
of,O
differences,O
in,O
",",O
countries,O
",",O
currencies,O
",",O
interest,O
rates,O
and,O
credits,O
based,O
on,O
its,O
global,O
macroeconomic,O
and,O
political,O
analysis,O
.,O
,O
The,O
investment,O
adviser,O
seeks,O
to,O
identify,O
countries,O
and,O
currencies,O
it,O
believes,O
have,O
potential,O
to,O
outperform,O
investments,O
in,O
other,O
countries,O
and,O
currencies,O
",",O
and,O
to,O
anticipate,O
changes,O
in,O
global,O
economies,O
",",O
markets,O
",",O
political,O
conditions,O
and,O
other,O
factors,O
for,O
this,O
purpose,O
.,O
,O
Principal,O
Risks,O
Foreign,O
Investment,O
Risk,O
.,O
,O
Because,O
the,O
Fund,O
can,O
invest,O
a,O
significant,O
portion,O
of,O
its,O
assets,O
in,O
foreign,O
instruments,O
",",O
the,O
value,O
of,O
Fund,O
shares,O
can,O
be,O
adversely,O
affected,O
by,O
changes,O
in,O
currency,O
exchange,O
rates,O
and,O
political,O
and,O
economic,O
developments,O
abroad,O
.,O
,O
In,O
emerging,O
or,O
less,O
developed,O
countries,O
",",O
these,O
risks,O
can,O
be,O
more,O
significant,O
.,O
,O
Investment,O
markets,O
in,O
emerging,O
market,O
countries,O
are,O
substantially,O
smaller,O
",",O
less,O
liquid,O
and,O
more,O
volatile,O
than,O
the,O
major,O
markets,O
in,O
developed,O
countries,O
",",O
and,O
as,O
a,O
result,O
",",O
Fund,O
share,O
values,O
may,O
be,O
more,O
volatile,O
.,O
,O
Emerging,O
market,O
countries,O
may,O
have,O
relatively,O
unstable,O
governments,O
and,O
economies,O
.,O
,O
Emerging,O
market,O
investments,O
often,O
are,O
subject,O
to,O
speculative,O
trading,O
",",O
which,O
typically,O
contributes,O
to,O
volatility,O
.,O
,O
Trading,O
in,O
foreign,O
and,O
emerging,O
markets,O
typically,O
involves,O
higher,O
expense,O
than,O
trading,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
The,O
Fund,O
may,O
have,O
difficulties,O
enforcing,O
its,O
legal,O
or,O
contractual,O
rights,O
in,O
a,O
foreign,O
country,O
.,O
,O
Economic,O
and,O
other,O
events,O
(,O
whether,O
real,O
or,O
perceived,O
),O
can,O
reduce,O
the,O
demand,O
for,O
certain,O
income,O
securities,O
",",O
or,O
for,O
investments,O
generally,O
",",O
which,O
may,O
reduce,O
market,O
prices,O
and,O
cause,O
the,O
value,O
of,O
Fund,O
shares,O
to,O
fall,O
.,O
,O
The,O
frequency,O
and,O
magnitude,O
of,O
such,O
changes,O
can,O
not,O
be,O
predicted,O
.,O
,O
Certain,O
income,O
securities,O
can,O
experience,O
downturns,O
in,O
trading,O
activity,O
and,O
",",O
at,O
such,O
times,O
",",O
the,O
supply,O
of,O
such,O
instruments,O
in,O
the,O
market,O
may,O
exceed,O
the,O
demand,O
.,O
,O
At,O
other,O
times,O
",",O
the,O
demand,O
for,O
such,O
instruments,O
may,O
exceed,O
the,O
supply,O
in,O
the,O
market,O
.,O
,O
An,O
imbalance,O
in,O
supply,O
and,O
demand,O
in,O
the,O
market,O
may,O
result,O
in,O
valuation,O
uncertainties,O
and,O
greater,O
volatility,O
",",O
less,O
liquidity,O
",",O
widening,O
credit,O
spreads,O
and,O
a,O
lack,O
of,O
price,O
transparency,O
in,O
the,O
market,O
.,O
,O
No,O
active,O
trading,O
market,O
may,O
exist,O
for,O
certain,O
investments,O
",",O
which,O
may,O
impair,O
the,O
ability,O
of,O
the,O
Fund,O
to,O
sell,O
or,O
to,O
realize,O
the,O
full,O
value,O
of,O
such,O
investments,O
in,O
the,O
event,O
of,O
the,O
need,O
to,O
liquidate,O
such,O
assets,O
.,O
,O
Adverse,O
market,O
conditions,O
ma,O
y,O
impair,O
the,O
liquidity,O
of,O
some,O
actively,O
traded,O
investments,O
.,O
,O
Income,O
securities,O
are,O
subject,O
to,O
the,O
risk,O
of,O
non-payment,O
of,O
scheduled,O
principal,O
and,O
interest,O
.,O
,O
Changes,O
in,O
economic,O
conditions,O
or,O
other,O
circumstances,O
may,O
reduce,O
the,O
capacity,O
of,O
the,O
party,O
obligated,O
to,O
make,O
principal,O
and,O
interest,O
payments,O
on,O
such,O
instruments,O
and,O
may,O
lead,O
to,O
defaults,O
.,O
,O
Such,O
non-payments,O
and,O
defaults,O
may,O
reduce,O
the,O
value,O
of,O
Fund,O
shares,O
and,O
income,O
distributions,O
.,O
,O
The,O
value,O
of,O
a,O
fixed,O
income,O
security,O
also,O
may,O
decline,O
because,O
of,O
concerns,O
about,O
the,O
issuer,O
s,O
ability,O
to,O
make,O
principal,O
and,O
interest,O
payments,O
.,O
,O
In,O
addition,O
",",O
the,O
credit,O
ratings,O
of,O
income,O
securities,O
may,O
be,O
lowered,O
if,O
the,O
financial,O
condition,O
of,O
the,O
party,O
obligated,O
to,O
make,O
payments,O
with,O
respect,O
to,O
such,O
instruments,O
changes,O
.,O
,O
In,O
the,O
event,O
of,O
bankruptcy,O
of,O
the,O
issuer,O
of,O
income,O
securities,O
",",O
the,O
Fund,O
could,O
experience,O
delays,O
or,O
limitations,O
with,O
respect,O
to,O
its,O
ability,O
to,O
realize,O
the,O
benefits,O
of,O
any,O
collateral,O
securing,O
the,O
instrument,O
.,O
,O
In,O
order,O
to,O
enforce,O
its,O
rights,O
in,O
the,O
event,O
of,O
a,O
def,O
ault,O
",",O
bankruptcy,O
or,O
similar,O
situation,O
",",O
the,O
Fund,O
may,O
be,O
required,O
to,O
retain,O
legal,O
or,O
similar,O
counsel,O
.,O
,O
The,O
use,O
of,O
derivatives,O
can,O
lead,O
to,O
losses,O
because,O
of,O
adverse,O
movements,O
in,O
the,O
price,O
or,O
value,O
of,O
the,O
asset,O
",",O
index,O
",",O
rate,O
or,O
instrument,O
underlying,O
a,O
derivative,O
",",O
due,O
to,O
failure,O
of,O
a,O
counterparty,O
or,O
due,O
to,O
tax,O
or,O
regulatory,O
constraints,O
.,O
,O
Derivatives,O
may,O
create,O
investment,O
leverage,O
in,O
the,O
Fund,O
",",O
which,O
magnifies,O
the,O
Fund,O
s,O
exposure,O
to,O
the,O
underlying,O
investment,O
.,O
,O
hedging,O
purposes,O
may,O
not,O
reduce,O
risk,O
if,O
they,O
are,O
not,O
sufficiently,O
correlated,O
to,O
the,O
position,O
being,O
hedged,O
.,O
,O
The,O
use,O
of,O
derivatives,O
involves,O
the,O
exercise,O
of,O
specialized,O
skill,O
and,O
judgment,O
",",O
and,O
even,O
a,O
well-conceived,O
transaction,O
may,O
be,O
unsuccessful,O
to,O
some,O
degree,O
because,O
of,O
market,O
behavior,O
or,O
unexpected,O
events,O
.,O
,O
Derivative,O
instruments,O
may,O
be,O
difficult,O
to,O
value,O
",",O
may,O
be,O
illiquid,O
",",O
and,O
may,O
be,O
subject,O
to,O
wide,O
swings,O
in,O
valuation,O
caused,O
by,O
changes,O
in,O
the,O
value,O
of,O
the,O
underlying,O
instrument,O
.,O
,O
The,O
loss,O
on,O
derivative,O
transactions,O
may,O
substantially,O
exceed,O
the,O
initial,O
investment,O
.,O
,O
Risk,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Lower,I-MISCELLANEOUS
Rated,I-MISCELLANEOUS
Investments,I-MISCELLANEOUS
.,O
,O
Investments,O
rated,O
below,O
investment,O
grade,O
and,O
comparable,O
unrated,O
investments,O
have,O
speculative,O
characteristics,O
because,O
of,O
the,O
credit,O
risk,O
associated,O
with,O
their,O
issuers,O
.,O
,O
Changes,O
in,O
economic,O
conditions,O
or,O
other,O
circumstances,O
typically,O
have,O
a,O
greater,O
effect,O
on,O
the,O
ability,O
of,O
issuers,O
of,O
lower,O
rated,O
investments,O
to,O
make,O
principal,O
and,O
interest,O
payments,O
than,O
they,O
do,O
on,O
issuers,O
of,O
higher,O
rated,O
investments,O
.,O
,O
An,O
economic,O
downturn,O
generally,O
leads,O
to,O
a,O
higher,O
non-payment,O
rate,O
",",O
and,O
a,O
lower,O
rated,O
investment,O
may,O
lose,O
significant,O
value,O
before,O
a,O
default,O
occurs,O
.,O
,O
Lower,O
rated,O
investments,O
generally,O
are,O
subject,O
to,O
greater,O
price,O
volatility,O
and,O
illiquidity,O
than,O
higher,O
rated,O
investments,O
.,O
,O
Interest,O
Rate,O
Risk,O
.,O
,O
As,O
interest,O
rates,O
rise,O
",",O
the,O
value,O
of,O
certain,O
fixed,O
income,O
securities,O
is,O
likely,O
to,O
decline,O
.,O
,O
Conversely,O
",",O
when,O
interest,O
rates,O
decline,O
",",O
the,O
value,O
of,O
such,O
investments,O
is,O
likely,O
to,O
rise,O
.,O
,O
Securities,O
with,O
longer,O
durations,O
are,O
more,O
sensitive,O
to,O
changes,O
in,O
interest,O
rates,O
than,O
securities,O
with,O
shorter,O
durations,O
",",O
making,O
them,O
more,O
volatile,O
.,O
,O
A,O
rising,O
interest,O
rate,O
environment,O
may,O
extend,O
the,O
average,O
life,O
of,O
mortgages,O
or,O
other,O
asset-backed,O
receivables,O
underlying,O
mortgage-backed,O
or,O
asset-backed,O
securities,O
.,O
,O
This,O
extension,O
increases,O
the,O
risk,O
of,O
depreciation,O
due,O
to,O
future,O
increases,O
in,O
market,O
interest,O
rates,O
.,O
,O
In,O
a,O
declining,O
interest,O
rate,O
environment,O
",",O
prepayment,O
of,O
securities,O
may,O
increase,O
.,O
,O
In,O
such,O
circumstances,O
",",O
the,O
Fund,O
may,O
have,O
to,O
re-invest,O
the,O
prepayment,O
proceeds,O
at,O
lower,O
yields,O
.,O
,O
Risk,I-MISCELLANEOUS
of,I-MISCELLANEOUS
U.S.,I-MISCELLANEOUS
,O
While,O
certain,O
U.S.,I-LOCATION
Government-sponsored,O
agencies,O
(,O
such,O
as,O
the,O
Federal,I-GOVERNMENT
Home,I-GOVERNMENT
Loan,I-GOVERNMENT
Mortgage,I-GOVERNMENT
Corporation,I-GOVERNMENT
and,O
the,O
Federal,I-GOVERNMENT
National,I-GOVERNMENT
Mortgage,I-GOVERNMENT
Association,I-GOVERNMENT
),O
may,O
be,O
chartered,O
or,O
sponsored,O
by,O
acts,O
of,O
Congress,I-GOVERNMENT
",",O
their,O
securities,O
are,O
neither,O
issued,O
nor,O
guaranteed,O
by,O
the,O
U.S.,I-LOC
Risks,O
of,O
Repurchase,O
Agreements,O
and,O
Reverse,O
Repurchase,O
Agreements,O
.,O
,O
In,O
the,O
event,O
of,O
the,O
bankruptcy,O
of,O
the,O
counterparty,O
to,O
a,O
repurchase,O
agreement,O
",",O
recovery,O
of,O
cash,O
may,O
be,O
delayed,O
.,O
,O
To,O
the,O
extent,O
that,O
",",O
in,O
the,O
meantime,O
",",O
the,O
value,O
of,O
the,O
purchased,O
securities,O
may,O
have,O
decreased,O
",",O
a,O
loss,O
could,O
result,O
.,O
,O
When,O
the,O
Fund,O
enters,O
into,O
a,O
reverse,O
repurchase,O
agreement,O
",",O
any,O
fluctuations,O
in,O
the,O
market,O
value,O
of,O
either,O
the,O
securities,O
transferred,O
to,O
another,O
party,O
or,O
the,O
securities,O
in,O
which,O
the,O
proceeds,O
may,O
be,O
invested,O
would,O
affect,O
the,O
market,O
value,O
of,O
the,O
Fund,O
s,O
assets,O
.,O
,O
As,O
a,O
result,O
",",O
such,O
transactions,O
may,O
increase,O
fluctuations,O
in,O
the,O
net,O
asset,O
value,O
of,O
the,O
Fund,O
s,O
shares,O
.,O
,O
Because,O
reverse,O
repurchase,O
agreements,O
may,O
be,O
considered,O
to,O
be,O
the,O
practical,O
equivalent,O
of,O
borrowing,O
funds,O
",",O
they,O
constitute,O
a,O
form,O
of,O
leverage,O
.,O
,O
If,O
the,O
Fund,O
reinvests,O
the,O
proceeds,O
of,O
a,O
reverse,O
repurchase,O
agreement,O
at,O
a,O
rate,O
lower,O
than,O
the,O
cost,O
of,O
the,O
agreement,O
",",O
entering,O
into,O
the,O
agreement,O
will,O
lower,O
the,O
Fund,O
s,O
yield,O
.,O
,O
Borrowing,O
to,O
increase,O
investments,O
(,O
``,O
leverage,O
'',O
),O
may,O
exaggerate,O
the,O
effect,O
on,O
the,O
Fund,O
s,O
net,O
asset,O
value,O
of,O
any,O
increase,O
or,O
decrease,O
in,O
the,O
value,O
of,O
the,O
security,O
purchased,O
with,O
the,O
borrowings,O
.,O
,O
Successful,O
use,O
of,O
a,O
leveraging,O
strategy,O
depends,O
on,O
the,O
investment,O
adviser,O
s,O
ability,O
to,O
predict,O
correctly,O
interest,O
rates,O
and,O
market,O
movements,O
.,O
,O
There,O
can,O
be,O
no,O
assurance,O
that,O
the,O
use,O
of,O
leverage,O
will,O
be,O
successful,O
.,O
,O
In,O
the,O
case,O
of,O
non-recourse,O
borrowings,O
",",O
the,O
non-recourse,O
nature,O
of,O
the,O
loans,O
may,O
limit,O
the,O
risks,O
associated,O
with,O
such,O
borrowings,O
.,O
,O
Borrowings,O
involve,O
additional,O
expense,O
to,O
the,O
Fund,O
.,O
,O
Risks,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Commodity-Related,I-MISCELLANEOUS
Investments,I-MISCELLANEOUS
.,O
,O
The,O
value,O
of,O
commodities,O
investments,O
will,O
generally,O
be,O
affected,O
by,O
overall,O
market,O
movements,O
and,O
factors,O
specific,O
to,O
a,O
particular,O
industry,O
or,O
commodity,O
",",O
which,O
may,O
include,O
weather,O
",",O
embargoes,O
",",O
tariffs,O
",",O
and,O
health,O
",",O
political,O
",",O
international,O
and,O
regulatory,O
developments,O
.,O
,O
Economic,O
and,O
other,O
events,O
(,O
whether,O
real,O
or,O
perceived,O
),O
can,O
reduce,O
the,O
demand,O
for,O
commodities,O
",",O
which,O
may,O
reduce,O
market,O
prices,O
and,O
cause,O
the,O
value,O
of,O
Fund,O
shares,O
to,O
fall,O
.,O
,O
The,O
frequency,O
and,O
magnitude,O
of,O
such,O
changes,O
can,O
not,O
be,O
predicted,O
.,O
,O
Exposure,O
to,O
commodities,O
and,O
commodities,O
markets,O
may,O
subject,O
the,O
Fund,O
to,O
greater,O
volatility,O
than,O
investments,O
in,O
traditional,O
securities,O
.,O
,O
No,O
active,O
trading,O
market,O
may,O
exist,O
for,O
certain,O
commodities,O
investments,O
",",O
which,O
may,O
impair,O
the,O
ability,O
of,O
the,O
Fund,O
to,O
sell,O
or,O
to,O
realize,O
the,O
full,O
value,O
of,O
such,O
investments,O
in,O
the,O
event,O
of,O
the,O
need,O
to,O
liquidate,O
such,O
investments,O
.,O
,O
In,O
addition,O
",",O
adverse,O
market,O
conditions,O
may,O
impair,O
the,O
liquidity,O
of,O
act,O
ively,O
traded,O
commodities,O
investments,O
.,O
,O
Certain,O
types,O
of,O
commodities,O
instruments,O
(,O
such,O
as,O
total,O
return,O
swaps,O
and,O
commodity-linked,O
notes,O
),O
are,O
subject,O
to,O
the,O
risk,O
that,O
the,O
counterparty,O
to,O
the,O
instrument,O
will,O
not,O
perform,O
or,O
be,O
unable,O
to,O
perform,O
in,O
accordance,O
with,O
the,O
terms,O
of,O
the,O
instrument,O
.,O
,O
To,O
the,O
extent,O
commodity-related,O
investments,O
are,O
held,O
through,O
an,O
offshore,O
subsidiary,O
of,O
the,O
Fund,O
",",O
such,O
subsidiary,O
will,O
not,O
be,O
subject,O
to,O
U.S.,I-LOCATION
laws,O
(,O
including,O
securities,O
laws,O
),O
and,O
their,O
protections,O
.,O
,O
An,O
offshore,O
subsidiary,O
will,O
be,O
subject,O
to,O
the,O
laws,O
of,O
a,O
foreign,O
jurisdiction,O
",",O
which,O
can,O
be,O
effected,O
by,O
developments,O
in,O
that,O
jurisdiction,O
.,O
,O
Equity,I-MISCELLANEOUS
Investing,I-MISCELLANEOUS
Risk,I-MISCELLANEOUS
.,O
,O
The,O
Fund,O
s,O
shares,O
may,O
be,O
sensitive,O
to,O
stock,O
market,O
volatility,O
.,O
,O
The,O
value,O
of,O
equity,O
investments,O
and,O
related,O
instruments,O
may,O
decline,O
in,O
response,O
to,O
conditions,O
affecting,O
the,O
general,O
economy,O
;,O
overall,O
market,O
changes,O
;,O
local,O
",",O
regional,O
or,O
global,O
political,O
",",O
social,O
or,O
economic,O
instability,O
;,O
and,O
currency,O
",",O
interest,O
rate,O
and,O
commodity,O
price,O
fluctuations,O
",",O
as,O
well,O
as,O
issuer,O
or,O
sector,O
specific,O
events,O
.,O
,O
Although,O
values,O
can,O
rebound,O
",",O
there,O
is,O
no,O
assurance,O
they,O
will,O
return,O
to,O
previous,O
levels,O
.,O
,O
Securities,I-MISCELLANEOUS
Lending,I-MISCELLANEOUS
Risk,I-MISCELLANEOUS
.,O
,O
Securities,O
lending,O
involves,O
possible,O
delay,O
in,O
recovery,O
of,O
the,O
securities,O
or,O
possible,O
loss,O
of,O
rights,O
in,O
the,O
collateral,O
should,O
the,O
borrower,O
fail,O
financially,O
.,O
,O
recovering,O
the,O
loaned,O
securities,O
.,O
,O
The,O
value,O
of,O
Fund,O
shares,O
could,O
also,O
fall,O
if,O
a,O
loan,O
is,O
called,O
and,O
the,O
Fund,O
is,O
required,O
to,O
liquidate,O
reinvested,O
collateral,O
at,O
a,O
loss,O
or,O
if,O
the,O
investment,O
adviser,O
is,O
unable,O
to,O
reinvest,O
cash,O
collateral,O
at,O
rates,O
which,O
exceed,O
the,O
costs,O
involved,O
.,O
,O
Issuer,I-MISCELLANEOUS
Diversification,I-MISCELLANEOUS
Risk,I-MISCELLANEOUS
.,O
,O
The,O
Fund,O
is,O
non-diversified,O
which,O
means,O
it,O
may,O
invest,O
a,O
greater,O
percentage,O
of,O
its,O
assets,O
in,O
the,O
securities,O
of,O
a,O
single,O
issuer,O
than,O
funds,O
that,O
are,O
diversified,O
.,O
,O
Non-diversified,O
funds,O
face,O
the,O
risk,O
of,O
focusing,O
investments,O
in,O
a,O
small,O
number,O
of,O
issuers,O
",",O
including,O
being,O
more,O
susceptible,O
to,O
risks,O
affecting,O
such,O
issuers,O
than,O
a,O
more,O
diversified,O
fund,O
might,O
be,O
.,O
,O
Risks,I-MISCELLANEOUS
Associated,I-MISCELLANEOUS
with,I-MISCELLANEOUS
Active,I-MISCELLANEOUS
Management,I-MISCELLANEOUS
.,O
,O
The,O
Fund,O
is,O
an,O
actively,O
managed,O
portfolio,O
and,O
its,O
success,O
depends,O
upon,O
the,O
investment,O
skills,O
and,O
analytical,O
abilities,O
of,O
the,O
investment,O
adviser,O
to,O
develop,O
and,O
effectively,O
implement,O
strategies,O
that,O
achieve,O
the,O
Fund,O
s,O
investment,O
objective,O
.,O
,O
Subjective,O
decisions,O
made,O
by,O
the,O
investment,O
adviser,O
may,O
cause,O
the,O
Fund,O
to,O
incur,O
losses,O
or,O
to,O
miss,O
profit,O
opportunities,O
on,O
which,O
it,O
may,O
otherwise,O
have,O
capitalized,O
.,O
,O
General,I-MISCELLANEOUS
Fund,I-MISCELLANEOUS
Investing,I-MISCELLANEOUS
Risks,I-MISCELLANEOUS
.,O
,O
The,O
Fund,O
is,O
not,O
a,O
complete,O
investment,O
program,O
and,O
you,O
may,O
lose,O
money,O
by,O
investing,O
in,O
the,O
Fund,O
.,O
,O
All,O
investments,O
carry,O
a,O
certain,O
amount,O
of,O
risk,O
and,O
there,O
is,O
no,O
guarantee,O
that,O
the,O
Fund,O
will,O
be,O
able,O
to,O
achieve,O
its,O
investment,O
objective,O
.,O
,O
In,O
general,O
",",O
the,O
Fund,O
s,O
Annual,O
Fund,O
Operating,O
Expenses,O
as,O
a,O
percentage,O
of,O
Fund,O
average,O
daily,O
net,O
assets,O
will,O
change,O
as,O
Fund,O
assets,O
increase,O
and,O
decrease,O
",",O
and,O
the,O
Fund,O
s,O
Annual,O
Fund,O
Operating,O
Expenses,O
may,O
differ,O
in,O
the,O
future,O
.,O
,O
Purchase,O
and,O
redemption,O
activities,O
by,O
Fund,O
shareholders,O
may,O
impact,O
the,O
management,O
of,O
the,O
Fund,O
and,O
its,O
ability,O
to,O
achieve,O
its,O
objective,O
.,O
,O
An,O
investment,O
in,O
the,O
Fund,O
is,O
not,O
a,O
deposit,O
in,O
a,O
bank,O
and,O
is,O
not,O
insured,O
or,O
guaranteed,O
by,O
the,O
Federal,I-GOVERNMENT
Deposit,I-GOVERNMENT
Insurance,I-GOVERNMENT
Corporation,I-GOVERNMENT
or,O
any,O
other,O
government,O
agency,O
",",O
entity,O
or,O
person,O
.,O
,O
You,O
may,O
lose,O
money,O
by,O
investing,O
in,O
the,O
Fund,O
.,O
,O
Performance,O
The,O
following,O
bar,O
chart,O
and,O
table,O
provide,O
some,O
indication,O
of,O
the,O
risks,O
of,O
investing,O
in,O
the,O
Fund,O
by,O
showing,O
changes,O
in,O
the,O
Fund,O
s,O
performance,O
from,O
year,O
to,O
year,O
and,O
how,O
the,O
Fund,O
s,O
average,O
annual,O
returns,O
over,O
time,O
compare,O
with,O
those,O
of,O
a,O
broad-based,O
securities,O
market,O
index,O
.,O
,O
The,O
returns,O
in,O
the,O
bar,O
chart,O
are,O
for,O
Class,O
A,O
shares,O
and,O
do,O
not,O
reflect,O
a,O
sales,O
charge,O
.,O
,O
If,O
the,O
sales,O
charge,O
was,O
reflected,O
",",O
the,O
returns,O
would,O
be,O
lower,O
.,O
,O
Past,O
performance,O
(,O
both,O
before,O
and,O
after,O
taxes,O
),O
is,O
no,O
guarantee,O
of,O
future,O
results,O
.,O
,O
The,O
performance,O
of,O
each,O
Class,O
for,O
the,O
period,O
prior,O
to,O
June,O
27,O
",",O
2007,O
is,O
that,O
of,O
Global,I-BUSINESS
Macro,I-BUSINESS
Portfolio,I-BUSINESS
",",O
the,O
registered,O
investment,O
company,O
in,O
which,O
the,O
Fund,O
invests,O
.,O
,O
The,O
performance,O
of,O
the,O
Portfolio,O
is,O
not,O
adjusted,O
for,O
Fund,O
expenses,O
.,O
,O
If,O
such,O
an,O
adjustment,O
was,O
made,O
",",O
the,O
performance,O
would,O
have,O
been,O
different,O
.,O
,O
The,O
Fund,O
s,O
performance,O
after,O
June,O
27,O
",",O
2007,O
reflects,O
the,O
effects,O
of,O
expense,O
reductions,O
.,O
,O
Absent,O
these,O
reductions,O
",",O
performance,O
would,O
have,O
been,O
lower,O
.,O
,O
Updated,O
Fund,O
performance,O
information,O
can,O
be,O
obtained,O
by,O
visiting,O
www.eatonvance.com,O
.,O
,O
During,O
the,O
ten,O
years,O
ended,O
December,O
31,O
",",O
2009,O
",",O
the,O
highest,O
quarterly,O
total,O
return,O
for,O
Class,O
A,O
was,O
5.81,O
%,O
for,O
the,O
quarter,O
ended,O
June,O
30,O
",",O
2003,O
",",O
and,O
the,O
lowest,O
quarterly,O
return,O
was,O
1.58,O
%,O
for,O
the,O
quarter,O
ended,O
September,O
30,O
",",O
2002,O
.,O
,O
For,O
the,O
30,O
days,O
ended,O
October,O
31,O
",",O
2009,O
",",O
the,O
SEC,I-GOVERNMENT
yields,O
for,O
Class,O
A,O
",",O
Class,O
C,O
and,O
Class,O
I,O
shares,O
were,O
2.46,O
%,O
",",O
1.27,O
%,O
and,O
2.80,O
%,O
",",O
respectively,O
.,O
,O
For,O
current,O
yield,O
information,O
",",O
call,O
1-800-262-1122,O
.,O
,O
These,O
returns,O
reflect,O
the,O
maximum,O
sales,O
charge,O
for,O
Class,O
A,O
(,O
4.75,O
%,O
),O
and,O
any,O
applicable,O
contingent,O
deferred,O
sales,O
charge,O
(,O
``,O
CDSC,O
'',O
),O
for,O
Class,O
C.,O
Class,O
A,O
and,O
Class,O
I,O
commenced,O
operations,O
on,O
June,O
27,O
",",O
2007,O
.,O
,O
The,O
Class,O
C,O
performance,O
shown,O
above,O
for,O
the,O
period,O
prior,O
to,O
October,O
1,O
",",O
2009,O
(,O
commencement,O
of,O
operations,O
),O
is,O
the,O
perfornance,O
for,O
Class,O
A,O
shares,O
adjusted,O
for,O
the,O
sales,O
charge,O
that,O
applies,O
to,O
Class,O
C,O
shares,O
(,O
but,O
not,O
adjusted,O
for,O
any,O
other,O
differences,O
in,O
the,O
expenses,O
of,O
the,O
two,O
classes,O
),O
.,O
,O
If,O
adjusted,O
for,O
expenses,O
",",O
returns,O
would,O
be,O
different,O
.,O
,O
The,I-MISCELLANEOUS
Bank,I-MISCELLANEOUS
of,I-MISCELLANEOUS
America,I-MISCELLANEOUS
Merrill,I-MISCELLANEOUS
Lynch,I-MISCELLANEOUS
3-Month,I-MISCELLANEOUS
U.S.,I-MISCELLANEOUS
Treasury,I-MISCELLANEOUS
Bill,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
an,O
unmanaged,O
market,O
index,O
of,O
U.S.,I-GOVERNMENT
Treasury,I-GOVERNMENT
securities,O
maturing,O
in,O
90,O
days,O
and,O
assumes,O
reinvestment,O
of,O
all,O
income,O
.,O
,O
Investors,O
can,O
not,O
invest,O
directly,O
in,O
an,O
Index,O
.,O
,O
(,O
Source,O
for,O
Bank,I-MISCELLANEOUS
of,I-MISCELLANEOUS
America,I-MISCELLANEOUS
Merrill,I-MISCELLANEOUS
Lynch,I-MISCELLANEOUS
3-Month,I-MISCELLANEOUS
U.S.,I-MISCELLANEOUS
Treasury,I-MISCELLANEOUS
Bill,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
:,O
Lipper,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
),O
,O
After-tax,O
returns,O
are,O
calculated,O
using,O
the,O
highest,O
historical,O
individual,O
federal,O
income,O
tax,O
rates,O
and,O
do,O
not,O
reflect,O
the,O
impact,O
of,O
state,O
and,O
local,O
taxes,O
.,O
,O
Actual,O
after-tax,O
returns,O
depend,O
on,O
a,O
shareholder,O
s,O
tax,O
situation,O
and,O
the,O
actual,O
characterization,O
of,O
distributions,O
",",O
and,O
may,O
differ,O
from,O
those,O
shown,O
.,O
,O
After-tax,O
returns,O
are,O
not,O
relevant,O
to,O
shareholders,O
who,O
hold,O
shares,O
in,O
tax-deferred,O
accounts,O
or,O
to,O
shares,O
held,O
by,O
non-taxable,O
entities,O
.,O
,O
After-tax,O
returns,O
for,O
other,O
Classes,O
of,O
shares,O
will,O
vary,O
from,O
the,O
after-tax,O
returns,O
presented,O
for,O
Class,O
A,O
shares,O
.,O
,O
Taxes,O
for,O
that,O
period,O
because,O
no,O
taxable,O
distributions,O
were,O
made,O
during,O
that,O
period,O
.,O
,O
Also,O
",",O
Return,O
After,O
Taxes,O
on,O
Distributions,O
and,O
the,O
Sale,O
of,O
Fund,O
Shares,O
for,O
a,O
period,O
may,O
be,O
greater,O
than,O
or,O
equal,O
to,O
Return,O
After,O
Taxes,O
on,O
Distributions,O
for,O
the,O
same,O
period,O
because,O
of,O
losses,O
realized,O
on,O
the,O
sale,O
of,O
Fund,O
shares,O
.,O
,O
Management,O
Investment,O
Adviser,O
.,O
,O
Eaton,I-BUSINESS
Vance,I-BUSINESS
Management,I-BUSINESS
(,O
``,O
Eaton,I-BUSINESS
Vance,I-BUSINESS
'',O
),O
serves,O
as,O
Investment,O
Adviser,O
to,O
the,O
Fund,O
.,O
,O
Boston,I-BUSINESS
Management,I-BUSINESS
and,I-BUSINESS
Research,I-BUSINESS
(,O
``,O
BMR,I-BUSINESS
'',O
),O
serves,O
as,O
Investment,O
Adviser,O
to,O
the,O
Portfolio,O
.,O
,O
Portfolio,O
Managers,O
Mark,I-PERSON
S.,I-PERSON
Venezia,I-PERSON
",",O
Vice,O
President,O
of,O
Eaton,I-BUSINESS
Vance,I-BUSINESS
and,O
BMR,I-BUSINESS
",",O
has,O
managed,O
the,O
Fund,O
and,O
the,O
Portfolio,O
since,O
inception,O
.,O
,O
John,I-PERSON
R.,I-PERSON
Baur,I-PERSON
",",O
Vice,O
President,O
of,O
Eaton,I-BUSINESS
Vance,I-BUSINESS
and,O
BMR,I-BUSINESS
",",O
has,O
managed,O
the,O
Fund,O
and,O
the,O
Portfolio,O
since,O
2008,O
.,O
,O
Michael,I-PERSON
A.,I-PERSON
Cirami,I-PERSON
",",O
Vice,O
President,O
of,O
Eaton,I-BUSINESS
Vance,I-BUSINESS
and,O
BMR,I-BUSINESS
",",O
has,O
managed,O
the,O
Fund,O
and,O
the,O
Portfolio,O
since,O
2008,O
.,O
,O
Purchase,O
and,O
Sale,O
of,O
Fund,O
Shares,O
You,O
may,O
purchase,O
",",O
redeem,O
or,O
exchange,O
Fund,O
shares,O
on,O
any,O
business,O
day,O
",",O
which,O
is,O
any,O
day,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
is,O
open,O
for,O
business,O
.,O
,O
You,O
may,O
purchase,O
",",O
redeem,O
or,O
exchange,O
Fund,O
shares,O
either,O
through,O
your,O
financial,O
intermediary,O
or,O
directly,O
from,O
the,O
Fund,O
either,O
by,O
writing,O
to,O
Eaton,I-BUSINESS
Vance,I-BUSINESS
Funds,I-BUSINESS
",",O
P.O,O
.,O
,O
Box,O
9653,O
",",O
Providence,I-LOCATION
",",O
RI,I-LOCATION
02940-9653,O
",",O
or,O
by,O
calling,O
1-800-262-1122,O
.,O
,O
The,O
minimum,O
initial,O
purchase,O
or,O
exchange,O
into,O
the,O
Fund,O
is,O
$,O
"1,000",O
for,O
Class,O
A,O
and,O
Class,O
C,O
and,O
$,O
"250,000",O
for,O
Class,O
I,O
(,O
waived,O
in,O
certain,O
circumstances,O
),O
.,O
,O
There,O
is,O
no,O
minimum,O
for,O
subsequent,O
investments,O
.,O
,O
Tax,O
Information,O
The,O
Fund,O
s,O
distributions,O
are,O
expected,O
to,O
be,O
taxed,O
as,O
ordinary,O
income,O
and/or,O
capital,O
gains,O
",",O
unless,O
you,O
are,O
exempt,O
from,O
taxation,O
.,O
,O
Payments,O
to,O
Broker-Dealers,O
and,O
Other,O
Financial,O
Intermediaries,O
If,O
you,O
purchase,O
Fund,O
shares,O
through,O
a,O
broker-dealer,O
or,O
other,O
financial,O
intermediary,O
(,O
such,O
as,O
a,O
bank,O
),O
(,O
collectively,O
",",O
``,O
financial,O
intermediaries,O
'',O
),O
",",O
the,O
Fund,O
",",O
its,O
principal,O
underwriter,O
and,O
its,O
affiliates,O
may,O
pay,O
the,O
financial,O
intermediary,O
for,O
the,O
sale,O
of,O
Fund,O
shares,O
and,O
related,O
services,O
.,O
,O
These,O
payments,O
may,O
create,O
a,O
conflict,O
of,O
interest,O
by,O
influencing,O
the,O
financial,O
intermediary,O
and,O
your,O
salesperson,O
to,O
recommend,O
the,O
Fund,O
over,O
another,O
investment,O
.,O
,O
Ask,O
your,O
salesperson,O
or,O
visit,O
your,O
financial,O
intermediary,O
s,O
web,O
site,O
for,O
more,O
information,O
.,O
,O
-DOCSTART-,O
,O
At,O
December,O
31,O
",",O
2009,O
",",O
the,O
aggregate,O
cost,O
of,O
investment,O
securities,O
for,O
income,O
tax,O
purposes,O
was,O
$,O
"130,494,563",O
.,O
,O
Net,O
unrealized,O
appreciation,O
on,O
investments,O
was,O
$,O
"12,040,882",O
of,O
which,O
$,O
"16,941,684",O
related,O
to,O
appreciated,O
investment,O
securities,O
and,O
$,O
"4,900,802",O
related,O
to,O
depreciated,O
investment,O
securities,O
.,O
,O
The,O
Financial,I-GOVERNMENT
Accounting,I-GOVERNMENT
Standards,I-GOVERNMENT
Board,I-GOVERNMENT
(,O
FASB,I-GOVERNMENT
),O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Codification,I-LEGISLATION/ACT
(,O
ASC,I-LEGISLATION/ACT
),O
has,O
become,O
the,O
exclusive,O
reference,O
of,O
authoritative,O
U.S.,I-LOCATION
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
(,O
GAAP,I-LEGISLATION/ACT
),O
recognized,O
by,O
the,O
FASB,I-GOVERNMENT
to,O
be,O
applied,O
by,O
nongovernmental,O
entities,O
.,O
,O
Rules,O
and,O
interpretive,O
releases,O
of,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
SEC,I-GOVERNMENT
),O
under,O
authority,O
of,O
federal,O
laws,O
are,O
also,O
sources,O
of,O
authoritative,O
GAAP,I-LEGISLATION/ACT
for,O
SEC,I-GOVERNMENT
registrants,O
.,O
,O
The,O
ASC,I-LEGISLATION/ACT
has,O
superseded,O
all,O
existing,O
non-SEC,I-MISCELLANEOUS
accounting,O
and,O
reporting,O
standards,O
.,O
,O
The,O
fund,O
s,O
financial,O
statements,O
are,O
prepared,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
",",O
which,O
may,O
require,O
the,O
use,O
of,O
management,O
estimates,O
and,O
assumptions,O
.,O
,O
Actual,O
results,O
could,O
differ,O
from,O
those,O
estimates,O
.,O
,O
Portfolio,O
valuation,O
:,O
Investments,O
in,O
securities,O
are,O
valued,O
at,O
the,O
last,O
sales,O
price,O
on,O
the,O
securities,O
exchange,O
or,O
national,O
securities,O
market,O
on,O
which,O
such,O
securities,O
are,O
primarily,O
traded,O
.,O
,O
Securities,O
listed,O
on,O
the,O
National,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
System,I-MISCELLANEOUS
for,O
which,O
market,O
quotations,O
are,O
available,O
are,O
valued,O
at,O
the,O
official,O
closing,O
price,O
or,O
",",O
if,O
there,O
is,O
no,O
official,O
closing,O
price,O
that,O
day,O
",",O
at,O
the,O
last,O
sales,O
price,O
.,O
,O
Securities,O
not,O
listed,O
on,O
an,O
exchange,O
or,O
the,O
national,O
securities,O
market,O
",",O
or,O
securities,O
for,O
which,O
there,O
were,O
no,O
transactions,O
",",O
are,O
valued,O
at,O
the,O
average,O
of,O
the,O
most,O
recent,O
bid,O
and,O
asked,O
prices,O
",",O
except,O
for,O
open,O
short,O
positions,O
",",O
where,O
the,O
asked,O
price,O
is,O
used,O
for,O
valuation,O
purposes,O
.,O
,O
Bid,O
price,O
is,O
used,O
when,O
no,O
asked,O
price,O
is,O
available,O
.,O
,O
Registered,O
investment,O
companies,O
that,O
are,O
not,O
traded,O
on,O
an,O
exchange,O
are,O
valued,O
at,O
their,O
net,O
asset,O
value,O
.,O
,O
When,O
market,O
quotations,O
or,O
official,O
closing,O
prices,O
are,O
not,O
readily,O
available,O
",",O
or,O
are,O
determined,O
not,O
to,O
reflect,O
accurately,O
fair,O
value,O
",",O
such,O
as,O
when,O
the,O
value,O
of,O
a,O
security,O
has,O
been,O
significantly,O
affected,O
by,O
events,O
after,O
the,O
close,O
of,O
the,O
exchange,O
or,O
market,O
on,O
which,O
the,O
security,O
is,O
principally,O
traded,O
(,O
for,O
example,O
",",O
a,O
foreign,O
exchange,O
or,O
market,O
),O
",",O
but,O
before,O
the,O
fund,O
calculates,O
its,O
net,O
asset,O
value,O
",",O
the,O
fund,O
may,O
value,O
these,O
investments,O
at,O
fair,O
value,O
as,O
determined,O
in,O
accordance,O
with,O
the,O
procedures,O
approved,O
by,O
the,O
Board,O
of,O
Trustees,O
.,O
,O
Fair,O
valuing,O
of,O
securities,O
may,O
be,O
determined,O
with,O
the,O
assistance,O
of,O
a,O
pricing,O
service,O
using,O
calculations,O
based,O
on,O
indices,O
of,O
domestic,O
securities,O
and,O
other,O
appropriate,O
indicators,O
",",O
such,O
as,O
prices,O
of,O
relevant,O
American,O
Depository,O
Receipts,O
and,O
futures,O
contracts,O
.,O
,O
forces,O
that,O
influence,O
the,O
market,O
in,O
which,O
the,O
securities,O
are,O
purchased,O
and,O
sold,O
",",O
and,O
public,O
trading,O
in,O
similar,O
securities,O
of,O
the,O
issuer,O
or,O
comparable,O
issuers,O
.,O
,O
Financial,O
futures,O
are,O
valued,O
at,O
the,O
last,O
sales,O
price,O
.,O
,O
Investments,O
denominated,O
in,O
foreign,O
currencies,O
are,O
translated,O
to,O
U.S.,I-LOCATION
dollars,O
at,O
the,O
prevailing,O
rates,O
of,O
exchange,O
.,O
,O
Forward,O
foreign,O
currency,O
exchange,O
contracts,O
(,O
forward,O
contracts,O
),O
are,O
valued,O
at,O
the,O
forward,O
rate,O
.,O
,O
The,O
fund,O
adopted,O
the,O
provisions,O
of,O
ASC,I-LEGISLATION/ACT
Topic,O
815,O
Derivatives,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Hedging,I-MISCELLANEOUS
which,O
requires,O
qualitative,O
disclosures,O
about,O
objectives,O
and,O
strategies,O
for,O
using,O
derivatives,O
",",O
quantitative,O
disclosures,O
about,O
fair,O
value,O
amounts,O
of,O
gains,O
and,O
losses,O
on,O
derivative,O
instruments,O
and,O
disclosures,O
about,O
credit-risk-related,O
contingent,O
features,O
in,O
derivative,O
agreements,O
.,O
,O
The,O
fund,O
held,O
no,O
derivatives,O
during,O
the,O
period,O
ended,O
December,O
31,O
",",O
2009.These,O
disclosures,O
did,O
not,O
impact,O
the,O
notes,O
to,O
the,O
financial,O
statements,O
.,O
,O
Additional,O
investment,O
related,O
disclosures,O
are,O
hereby,O
incorporated,O
by,O
reference,O
to,O
the,O
annual,O
and,O
semi-annual,O
reports,O
previously,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
on,O
Form,I-MISCELLANEOUS
N-CSR,I-MISCELLANEOUS
.,O
,O
At,O
December,O
31,O
",",O
2009,O
",",O
the,O
aggregate,O
cost,O
of,O
investment,O
securities,O
for,O
income,O
tax,O
purposes,O
was,O
$,O
"155,132,056",O
.,O
,O
Net,O
unrealized,O
appreciation,O
on,O
investments,O
was,O
$,O
"18,716,984",O
of,O
which,O
$,O
"21,637,784",O
related,O
to,O
appreciated,O
investment,O
securities,O
and,O
$,O
"2,920,800",O
related,O
to,O
depreciated,O
investment,O
securities,O
.,O
,O
The,O
Financial,I-GOVERNMENT
Accounting,I-GOVERNMENT
Standards,I-GOVERNMENT
Board,I-GOVERNMENT
(,O
FASB,I-GOVERNMENT
),O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Codification,I-LEGISLATION/ACT
(,O
ASC,I-LEGISLATION/ACT
),O
has,O
become,O
the,O
exclusive,O
reference,O
of,O
authoritative,O
U.S.,I-LOCATION
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
(,O
GAAP,I-LEGISLATION/ACT
),O
recognized,O
by,O
the,O
FASB,I-GOVERNMENT
to,O
be,O
applied,O
by,O
nongovernmental,O
entities,O
.,O
,O
Rules,O
and,O
interpretive,O
releases,O
of,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
SEC,I-GOVERNMENT
),O
under,O
authority,O
of,O
federal,O
laws,O
are,O
also,O
sources,O
of,O
authoritative,O
GAAP,I-LEGISLATION/ACT
for,O
SEC,I-GOVERNMENT
registrants,O
.,O
,O
The,O
ASC,I-LEGISLATION/ACT
has,O
superseded,O
all,O
existing,O
non-SEC,I-MISCELLANEOUS
accounting,O
and,O
reporting,O
standards,O
.,O
,O
The,O
fund,O
s,O
financial,O
statements,O
are,O
prepared,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
",",O
which,O
may,O
require,O
the,O
use,O
of,O
management,O
estimates,O
and,O
assumptions,O
.,O
,O
Actual,O
results,O
could,O
differ,O
from,O
those,O
estimates,O
.,O
,O
Portfolio,O
valuation,O
:,O
Investments,O
in,O
securities,O
are,O
valued,O
at,O
the,O
last,O
sales,O
price,O
on,O
the,O
securities,O
exchange,O
or,O
national,O
securities,O
market,O
on,O
which,O
such,O
securities,O
are,O
primarily,O
traded,O
.,O
,O
Securities,O
listed,O
on,O
the,O
National,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
System,I-MISCELLANEOUS
for,O
which,O
market,O
quotations,O
are,O
available,O
are,O
valued,O
at,O
the,O
official,O
closing,O
price,O
or,O
",",O
if,O
there,O
is,O
no,O
official,O
closing,O
price,O
that,O
day,O
",",O
at,O
the,O
last,O
sales,O
price,O
.,O
,O
Securities,O
not,O
listed,O
on,O
an,O
exchange,O
or,O
the,O
national,O
securities,O
market,O
",",O
or,O
securities,O
for,O
which,O
there,O
were,O
no,O
transactions,O
",",O
are,O
valued,O
at,O
the,O
average,O
of,O
the,O
most,O
recent,O
bid,O
and,O
asked,O
prices,O
",",O
except,O
for,O
open,O
short,O
positions,O
",",O
where,O
the,O
asked,O
price,O
is,O
used,O
for,O
valuation,O
purposes,O
.,O
,O
Bid,O
price,O
is,O
used,O
when,O
no,O
asked,O
price,O
is,O
available,O
.,O
,O
Registered,O
investment,O
companies,O
that,O
are,O
not,O
traded,O
on,O
an,O
exchange,O
are,O
valued,O
at,O
their,O
net,O
asset,O
value,O
.,O
,O
When,O
market,O
quotations,O
or,O
official,O
closing,O
prices,O
are,O
not,O
readily,O
available,O
",",O
or,O
are,O
determined,O
not,O
to,O
reflect,O
accurately,O
fair,O
value,O
",",O
such,O
as,O
when,O
the,O
value,O
of,O
a,O
security,O
has,O
been,O
significantly,O
affected,O
by,O
events,O
after,O
the,O
close,O
of,O
the,O
exchange,O
or,O
market,O
on,O
which,O
the,O
security,O
is,O
principally,O
traded,O
(,O
for,O
example,O
",",O
a,O
foreign,O
exchange,O
or,O
market,O
),O
",",O
but,O
before,O
the,O
fund,O
calculates,O
its,O
net,O
asset,O
value,O
",",O
the,O
fund,O
may,O
value,O
these,O
investments,O
at,O
fair,O
value,O
as,O
determined,O
in,O
accordance,O
with,O
the,O
procedures,O
approved,O
by,O
the,O
Board,O
of,O
Trustees,O
.,O
,O
Fair,O
valuing,O
of,O
securities,O
may,O
be,O
determined,O
with,O
the,O
assistance,O
of,O
a,O
pricing,O
service,O
using,O
calculations,O
based,O
on,O
indices,O
of,O
domestic,O
securities,O
and,O
other,O
appropriate,O
indicators,O
",",O
such,O
as,O
prices,O
of,O
relevant,O
American,O
Depository,O
Receipts,O
and,O
futures,O
contracts,O
.,O
,O
duration,O
of,O
restrictions,O
on,O
disposition,O
",",O
an,O
evaluation,O
of,O
the,O
forces,O
that,O
influence,O
the,O
market,O
in,O
which,O
the,O
securities,O
are,O
purchased,O
and,O
sold,O
",",O
and,O
public,O
trading,O
in,O
similar,O
securities,O
of,O
the,O
issuer,O
or,O
comparable,O
issuers,O
.,O
,O
Financial,O
futures,O
are,O
valued,O
at,O
the,O
last,O
sales,O
price,O
.,O
,O
Pursuant,O
to,O
a,O
securities,O
lending,O
agreement,O
with,O
The,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Mellon,I-BUSINESS
",",O
a,O
subsidiary,O
of,O
BNY,I-BUSINESS
Mellon,I-BUSINESS
and,O
an,O
affiliate,O
of,O
Dreyfus,I-BUSINESS
",",O
the,O
fund,O
may,O
lend,O
securities,O
to,O
qualified,O
institutions,O
.,O
,O
It,O
is,O
the,O
fund,O
s,O
policy,O
that,O
",",O
at,O
origination,O
",",O
all,O
loans,O
are,O
secured,O
by,O
collateral,O
of,O
at,O
least,O
102,O
%,O
of,O
the,O
value,O
of,O
U.S.,I-LOCATION
securities,O
loaned,O
and,O
105,O
%,O
of,O
the,O
value,O
of,O
foreign,O
securities,O
loaned,O
.,O
,O
Collateral,O
equivalent,O
to,O
at,O
least,O
100,O
%,O
of,O
the,O
market,O
value,O
of,O
securities,O
on,O
loan,O
is,O
maintained,O
at,O
all,O
times,O
.,O
,O
Collateral,O
is,O
either,O
in,O
the,O
form,O
of,O
cash,O
",",O
which,O
can,O
be,O
invested,O
in,O
certain,O
money,O
market,O
mutual,O
funds,O
managed,O
by,O
the,O
Manager,O
",",O
U.S.,I-LOCATION
Government,O
and,O
Agency,O
securities,O
or,O
letters,O
of,O
credit,O
.,O
,O
The,O
fund,O
is,O
entitled,O
to,O
receive,O
all,O
income,O
on,O
securities,O
loaned,O
",",O
in,O
addition,O
to,O
income,O
earned,O
as,O
a,O
result,O
of,O
the,O
lending,O
transaction,O
.,O
,O
Although,O
each,O
security,O
loaned,O
is,O
fully,O
collateralized,O
",",O
the,O
fund,O
bears,O
the,O
risk,O
of,O
delay,O
in,O
recovery,O
of,O
",",O
or,O
loss,O
of,O
rights,O
in,O
",",O
the,O
securities,O
loaned,O
should,O
a,O
borrower,O
fail,O
to,O
return,O
the,O
securities,O
in,O
a,O
timely,O
manner,O
.,O
,O
The,O
fund,O
adopted,O
the,O
provisions,O
of,O
ASC,O
Topic,O
815,O
Derivatives,O
and,O
Hedging,O
which,O
requires,O
qualitative,O
disclosures,O
about,O
objectives,O
and,O
strategies,O
for,O
using,O
derivatives,O
",",O
quantitative,O
disclosures,O
about,O
fair,O
value,O
amounts,O
of,O
gains,O
and,O
losses,O
on,O
derivative,O
instruments,O
and,O
disclosures,O
about,O
credit-risk-related,O
contingent,O
features,O
in,O
derivative,O
agreements,O
.,O
,O
The,O
disclosure,O
requirements,O
distinguish,O
between,O
derivatives,O
",",O
which,O
are,O
accounted,O
for,O
as,O
hedges,O
and,O
those,O
that,O
do,O
not,O
qualify,O
for,O
hedge,O
accounting,O
.,O
,O
Because,O
investment,O
companies,O
value,O
their,O
derivatives,O
at,O
fair,O
value,O
and,O
recognize,O
changes,O
in,O
fair,O
value,O
through,O
the,O
Statement,O
of,O
Operations,O
",",O
they,O
do,O
not,O
qualify,O
for,O
such,O
accounting,O
.,O
,O
Accordingly,O
",",O
even,O
though,O
a,O
fund,O
s,O
investments,O
in,O
derivatives,O
may,O
represent,O
economic,O
hedges,O
",",O
they,O
are,O
considered,O
to,O
be,O
non-hedge,O
transactions,O
for,O
purposes,O
of,O
this,O
disclosure,O
.,O
,O
Futures,O
Contracts,O
:,O
In,O
the,O
normal,O
course,O
of,O
pursuing,O
its,O
investment,O
objective,O
",",O
the,O
fund,O
is,O
exposed,O
to,O
market,O
risk,O
",",O
including,O
equity,O
price,O
risk,O
",",O
,O
as,O
a,O
result,O
of,O
changes,O
in,O
value,O
of,O
underlying,O
financial,O
instruments,O
.,O
,O
The,O
fund,O
may,O
invest,O
in,O
financial,O
futures,O
contracts,O
in,O
order,O
to,O
manage,O
its,O
exposure,O
to,O
or,O
protect,O
against,O
changes,O
in,O
the,O
market,O
.,O
,O
A,O
futures,O
contract,O
represents,O
a,O
commitment,O
for,O
the,O
future,O
purchase,O
or,O
a,O
sale,O
of,O
an,O
asset,O
at,O
a,O
specified,O
date,O
.,O
,O
Upon,O
entering,O
into,O
such,O
contracts,O
",",O
these,O
investments,O
require,O
initial,O
margin,O
deposits,O
with,O
a,O
broker,O
",",O
which,O
consist,O
of,O
cash,O
or,O
cash,O
equivalents,O
.,O
,O
The,O
amount,O
of,O
these,O
deposits,O
is,O
determined,O
by,O
the,O
exchange,O
or,O
Board,O
of,O
Trade,O
on,O
which,O
the,O
contract,O
is,O
traded,O
and,O
is,O
subject,O
to,O
change,O
.,O
,O
Accordingly,O
",",O
variation,O
margin,O
payments,O
are,O
received,O
or,O
made,O
to,O
reflect,O
daily,O
unrealized,O
gains,O
or,O
losses,O
which,O
are,O
recorded,O
in,O
the,O
Statement,O
of,O
Operations,O
.,O
,O
Futures,O
contracts,O
are,O
valued,O
daily,O
at,O
the,O
settlement,O
price,O
established,O
by,O
the,O
Board,O
of,O
Trade,O
or,O
exchange,O
upon,O
which,O
they,O
are,O
traded,O
.,O
,O
When,O
the,O
contracts,O
are,O
closed,O
",",O
the,O
fund,O
recognizes,O
a,O
realized,O
gain,O
or,O
loss,O
.,O
,O
There,O
is,O
minimal,O
counterparty,O
credit,O
risk,O
to,O
the,O
fund,O
with,O
futures,O
",",O
since,O
futures,O
are,O
exchange,O
traded,O
and,O
the,O
exchange,O
s,O
clearinghouse,O
",",O
as,O
counterparty,O
to,O
all,O
exchange,O
traded,O
futures,O
",",O
guarantees,O
the,O
futures,O
against,O
default,O
.,O
,O
Additional,O
investment,O
related,O
disclosures,O
are,O
hereby,O
incorporated,O
by,O
reference,O
to,O
the,O
annual,O
and,O
semi-annual,O
reports,O
previously,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
on,O
Form,I-MISCELLANEOUS
N-CSR,I-MISCELLANEOUS
.,O
,O
(,O
a,O
),O
The,O
Registrant,O
's,O
principal,O
executive,O
and,O
principal,O
financial,O
officers,O
have,O
concluded,O
",",O
based,O
on,O
their,O
evaluation,O
of,O
the,O
Registrant,O
's,O
disclosure,O
controls,O
and,O
procedures,O
as,O
of,O
a,O
date,O
within,O
90,O
days,O
of,O
the,O
filing,O
date,O
of,O
this,O
report,O
",",O
that,O
the,O
Registrant,O
's,O
disclosure,O
controls,O
and,O
procedures,O
are,O
reasonably,O
designed,O
to,O
ensure,O
that,O
information,O
required,O
to,O
be,O
disclosed,O
by,O
the,O
Registrant,O
on,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
is,O
recorded,O
",",O
processed,O
",",O
summarized,O
and,O
reported,O
within,O
the,O
required,O
time,O
periods,O
and,O
that,O
information,O
required,O
to,O
be,O
disclosed,O
by,O
the,O
Registrant,O
in,O
the,O
reports,O
that,O
it,O
files,O
or,O
submits,O
on,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
is,O
accumulated,O
and,O
communicated,O
to,O
the,O
Registrant,O
's,O
management,O
",",O
including,O
its,O
principal,O
executive,O
and,O
principal,O
financial,O
officers,O
",",O
as,O
appropriate,O
to,O
allow,O
timely,O
decisions,O
regarding,O
required,O
disclosure,O
.,O
,O
(,O
b,O
),O
There,O
were,O
no,O
changes,O
to,O
the,O
Registrant,O
's,O
internal,O
control,O
over,O
financial,O
reporting,O
that,O
occurred,O
during,O
the,O
Registrant,O
's,O
most,O
recently,O
ended,O
fiscal,O
quarter,O
that,O
have,O
materially,O
affected,O
",",O
or,O
are,O
reasonably,O
likely,O
to,O
materially,O
affect,O
",",O
the,O
Registrant,O
's,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
(,O
a,O
),O
Certifications,O
of,O
principal,O
executive,O
and,O
principal,O
financial,O
officers,O
as,O
required,O
by,O
Rule,O
30a-2,O
(,O
a,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
and,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
Report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
and,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
",",O
this,O
Report,O
has,O
been,O
signed,O
below,O
by,O
the,O
following,O
persons,O
on,O
behalf,O
of,O
the,O
Registrant,O
and,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
.,O
,O
(,O
a,O
),O
Certifications,O
of,O
principal,O
executive,O
and,O
principal,O
financial,O
officers,O
as,O
required,O
by,O
Rule,O
30a-2,O
(,O
a,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
.,O
,O
SECTION,O
302,O
CERTIFICATION,O
I,O
",",O
Bradley,I-PERSON
J.,I-PERSON
Skapyak,I-PERSON
",",O
certify,O
that,O
:,O
1,O
.,O
,O
I,O
have,O
reviewed,O
this,O
report,O
on,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
of,O
Dreyfus,I-BUSINESS
Stock,I-BUSINESS
Funds,I-BUSINESS
2,I-BUSINESS
.,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
this,O
report,O
does,O
not,O
contain,O
any,O
untrue,O
statement,O
of,O
a,O
material,O
fact,O
or,O
omit,O
to,O
state,O
a,O
material,O
fact,O
necessary,O
to,O
make,O
the,O
statements,O
made,O
",",O
in,O
light,O
of,O
the,O
circumstances,O
under,O
which,O
such,O
statements,O
were,O
made,O
",",O
not,O
misleading,O
with,O
respect,O
to,O
the,O
period,O
covered,O
by,O
this,O
report,O
;,O
3,O
.,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
the,O
schedule,O
of,O
investments,O
included,O
in,O
this,O
report,O
fairly,O
present,O
in,O
all,O
material,O
respects,O
the,O
investments,O
of,O
the,O
registrant,O
as,O
of,O
the,O
end,O
of,O
the,O
fiscal,O
quarter,O
for,O
which,O
the,O
report,O
is,O
filed,O
;,O
4,O
.,O
,O
The,O
registrant,O
's,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
are,O
responsible,O
for,O
establishing,O
and,O
maintaining,O
disclosure,O
controls,O
and,O
procedures,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
c,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
),O
and,O
internal,O
control,O
over,O
financial,O
reporting,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
d,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
),O
for,O
the,O
registrant,O
and,O
have,O
:,O
(,O
a,O
),O
Designed,O
such,O
disclosure,O
controls,O
and,O
procedures,O
",",O
or,O
caused,O
such,O
disclosure,O
controls,O
and,O
procedures,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
ensure,O
that,O
material,O
information,O
relating,O
to,O
the,O
registrant,O
",",O
including,O
its,O
consolidated,O
subsidiaries,O
",",O
is,O
made,O
known,O
to,O
us,O
by,O
others,O
within,O
those,O
entities,O
",",O
particularly,O
during,O
the,O
period,O
in,O
which,O
this,O
report,O
is,O
being,O
prepared,O
;,O
(,O
b,O
),O
Designed,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
or,O
caused,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
provide,O
reasonable,O
assurance,O
regarding,O
the,O
reliability,O
of,O
financial,O
reporting,O
and,O
the,O
preparation,O
of,O
financial,O
statements,O
for,O
external,O
purposes,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
;,O
(,O
c,O
),O
Evaluated,O
the,O
effectiveness,O
of,O
the,O
registrant,O
's,O
disclosure,O
controls,O
and,O
procedures,O
and,O
presented,O
in,O
this,O
report,O
our,O
conclusions,O
about,O
the,O
effectiveness,O
of,O
the,O
disclosure,O
controls,O
and,O
procedures,O
",",O
as,O
of,O
a,O
date,O
within,O
90,O
days,O
prior,O
to,O
the,O
filing,O
date,O
of,O
this,O
report,O
based,O
on,O
such,O
evaluation,O
;,O
and,O
(,O
d,O
),O
Disclosed,O
in,O
this,O
report,O
any,O
change,O
in,O
the,O
registrant,O
's,O
internal,O
control,O
over,O
financial,O
reporting,O
that,O
occurred,O
during,O
the,O
registrant,O
's,O
most,O
recent,O
fiscal,O
quarter,O
that,O
has,O
materially,O
affected,O
",",O
or,O
is,O
reasonably,O
likely,O
to,O
materially,O
affect,O
",",O
the,O
registrant,O
's,O
internal,O
control,O
over,O
financial,O
reporting,O
;,O
5,O
.,O
,O
The,O
registrant,O
's,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
have,O
disclosed,O
to,O
the,O
registrant,O
's,O
auditors,O
and,O
the,O
audit,O
committee,O
of,O
the,O
registrant,O
's,O
board,O
of,O
directors,O
(,O
or,O
persons,O
performing,O
the,O
equivalent,O
functions,O
),O
:,O
(,O
a,O
),O
All,O
significant,O
deficiencies,O
and,O
material,O
weaknesses,O
in,O
the,O
design,O
or,O
operation,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
which,O
are,O
reasonably,O
likely,O
to,O
adversely,O
affect,O
the,O
registrant,O
's,O
ability,O
to,O
record,O
",",O
process,O
",",O
summarize,O
",",O
and,O
report,O
financial,O
information,O
;,O
and,O
(,O
b,O
),O
Any,O
fraud,O
",",O
whether,O
or,O
not,O
material,O
",",O
that,O
involves,O
management,O
or,O
other,O
employees,O
who,O
have,O
a,O
significant,O
role,O
in,O
the,O
registrant,O
's,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
SECTION,O
302,O
CERTIFICATION,O
I,O
",",O
James,I-PERSON
Windels,I-PERSON
",",O
certify,O
that,O
:,O
1,O
.,O
,O
I,O
have,O
reviewed,O
this,O
report,O
on,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
of,O
Dreyfus,I-BUSINESS
Stock,I-BUSINESS
Funds,I-BUSINESS
2,I-BUSINESS
.,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
this,O
report,O
does,O
not,O
contain,O
any,O
untrue,O
statement,O
of,O
a,O
material,O
fact,O
or,O
omit,O
to,O
state,O
a,O
material,O
fact,O
necessary,O
to,O
make,O
the,O
statements,O
made,O
",",O
in,O
light,O
of,O
the,O
circumstances,O
under,O
which,O
such,O
statements,O
were,O
made,O
",",O
not,O
misleading,O
with,O
respect,O
to,O
the,O
period,O
covered,O
by,O
this,O
report,O
;,O
3,O
.,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
the,O
schedule,O
of,O
investments,O
included,O
in,O
this,O
report,O
fairly,O
present,O
in,O
all,O
material,O
respects,O
the,O
investments,O
of,O
the,O
registrant,O
as,O
of,O
the,O
end,O
of,O
the,O
fiscal,O
quarter,O
for,O
which,O
the,O
report,O
is,O
filed,O
;,O
4,O
.,O
,O
The,O
registrant,O
's,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
are,O
responsible,O
for,O
establishing,O
and,O
maintaining,O
disclosure,O
controls,O
and,O
procedures,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
c,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
),O
and,O
internal,O
control,O
over,O
financial,O
reporting,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
d,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
),O
for,O
the,O
registrant,O
and,O
have,O
:,O
(,O
a,O
),O
Designed,O
such,O
disclosure,O
controls,O
and,O
procedures,O
",",O
or,O
caused,O
such,O
disclosure,O
controls,O
and,O
procedures,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
ensure,O
that,O
material,O
information,O
relating,O
to,O
the,O
registrant,O
",",O
including,O
its,O
consolidated,O
subsidiaries,O
",",O
is,O
made,O
known,O
to,O
us,O
by,O
others,O
within,O
those,O
entities,O
",",O
particularly,O
during,O
the,O
period,O
in,O
which,O
this,O
report,O
is,O
being,O
prepared,O
;,O
(,O
b,O
),O
Designed,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
or,O
caused,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
provide,O
reasonable,O
assurance,O
regarding,O
the,O
reliability,O
of,O
financial,O
reporting,O
and,O
the,O
preparation,O
of,O
financial,O
statements,O
for,O
external,O
purposes,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
;,O
(,O
c,O
),O
Evaluated,O
the,O
effectiveness,O
of,O
the,O
registrant,O
's,O
disclosure,O
controls,O
and,O
procedures,O
and,O
presented,O
in,O
this,O
report,O
our,O
conclusions,O
about,O
the,O
effectiveness,O
of,O
the,O
disclosure,O
controls,O
and,O
procedures,O
",",O
as,O
of,O
a,O
date,O
within,O
90,O
days,O
prior,O
to,O
the,O
filing,O
date,O
of,O
this,O
report,O
based,O
on,O
such,O
evaluation,O
;,O
and,O
(,O
d,O
),O
Disclosed,O
in,O
this,O
report,O
any,O
change,O
in,O
the,O
registrant,O
's,O
internal,O
control,O
over,O
financial,O
reporting,O
that,O
occurred,O
during,O
the,O
registrant,O
's,O
most,O
recent,O
fiscal,O
quarter,O
that,O
has,O
materially,O
affected,O
",",O
or,O
is,O
reasonably,O
likely,O
to,O
materially,O
affect,O
",",O
the,O
registrant,O
's,O
internal,O
control,O
over,O
financial,O
reporting,O
;,O
5,O
.,O
,O
The,O
registrant,O
's,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
have,O
disclosed,O
to,O
the,O
registrant,O
's,O
auditors,O
and,O
the,O
audit,O
committee,O
of,O
the,O
registrant,O
's,O
board,O
of,O
directors,O
(,O
or,O
persons,O
performing,O
the,O
equivalent,O
functions,O
),O
:,O
(,O
a,O
),O
All,O
significant,O
deficiencies,O
and,O
material,O
weaknesses,O
in,O
the,O
design,O
or,O
operation,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
which,O
are,O
reasonably,O
likely,O
to,O
adversely,O
affect,O
the,O
registrant,O
's,O
ability,O
to,O
record,O
",",O
process,O
",",O
summarize,O
",",O
and,O
report,O
financial,O
information,O
;,O
and,O
(,O
b,O
),O
Any,O
fraud,O
",",O
whether,O
or,O
not,O
material,O
",",O
that,O
involves,O
management,O
or,O
other,O
employees,O
who,O
have,O
a,O
significant,O
role,O
in,O
the,O
registrant,O
's,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
-DOCSTART-,O
,O
MARSH,I-BUSINESS
USA,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
A,O
capital,O
stock,O
company,O
The,O
Underwriter,O
",",O
in,O
consideration,O
of,O
an,O
agreed,O
premium,O
",",O
and,O
subject,O
to,O
the,O
Declarations,O
made,O
a,O
part,O
hereof,O
",",O
the,O
General,O
Agreements,O
",",O
Conditions,O
and,O
Limitations,O
and,O
other,O
terms,O
of,O
this,O
bond,O
",",O
agrees,O
with,O
the,O
Insured,O
",",O
in,O
accordance,O
with,O
the,O
Insuring,O
Agreements,O
hereof,O
to,O
which,O
an,O
amount,O
of,O
insurance,O
is,O
applicable,O
as,O
set,O
forth,O
in,O
Item,O
3,O
of,O
the,O
Declarations,O
and,O
with,O
respect,O
to,O
loss,O
sustained,O
by,O
the,O
Insured,O
at,O
any,O
time,O
but,O
discovered,O
during,O
the,O
Bond,O
Period,O
",",O
to,O
indemnify,O
and,O
hold,O
harmless,O
the,O
Insured,O
for,O
:,O
,O
Loss,O
resulting,O
from,O
any,O
dishonest,O
or,O
fraudulent,O
act,O
(,O
s,O
),O
",",O
including,O
Larceny,O
or,O
Embezzlement,O
committed,O
by,O
an,O
Employee,O
",",O
committed,O
anywhere,O
and,O
whether,O
committed,O
alone,O
or,O
in,O
collusion,O
with,O
others,O
",",O
including,O
loss,O
of,O
Property,O
resulting,O
from,O
such,O
acts,O
of,O
an,O
Employee,O
",",O
which,O
Property,O
is,O
held,O
by,O
the,O
Insured,O
for,O
any,O
purpose,O
or,O
in,O
any,O
capacity,O
and,O
whether,O
so,O
held,O
gratuitously,O
or,O
not,O
and,O
whether,O
or,O
not,O
the,O
Insured,O
is,O
liable,O
therefor,O
.,O
,O
Dishonest,O
or,O
fraudulent,O
act,O
(,O
s,O
),O
as,O
used,O
in,O
this,O
Insuring,O
Agreement,O
shall,O
mean,O
only,O
dishonest,O
or,O
fraudulent,O
act,O
(,O
s,O
),O
committed,O
by,O
such,O
Employee,O
with,O
the,O
manifest,O
intent,O
:,O
,O
Expense,O
incurred,O
by,O
the,O
Insured,O
for,O
that,O
part,O
of,O
the,O
costs,O
of,O
audits,O
or,O
examinations,O
required,O
by,O
any,O
governmental,O
regulatory,O
authority,O
to,O
be,O
conducted,O
either,O
by,O
such,O
authority,O
or,O
by,O
an,O
independent,O
accountant,O
by,O
reason,O
of,O
the,O
discovery,O
of,O
loss,O
sustained,O
by,O
the,O
Insured,O
through,O
any,O
dishonest,O
or,O
fraudulent,O
act,O
(,O
s,O
),O
",",O
including,O
Larceny,O
or,O
Embezzlement,O
of,O
any,O
of,O
the,O
Employees,O
.,O
,O
Employee,O
or,O
in,O
which,O
such,O
Employee,O
is,O
concerned,O
or,O
implicated,O
or,O
with,O
respect,O
to,O
any,O
one,O
audit,O
or,O
examination,O
is,O
limited,O
to,O
the,O
amount,O
stated,O
opposite,O
Audit,O
Expense,O
in,O
Item,O
3,O
of,O
the,O
Declarations,O
;,O
it,O
being,O
understood,O
",",O
however,O
",",O
that,O
such,O
expense,O
shall,O
be,O
deemed,O
to,O
be,O
a,O
loss,O
sustained,O
by,O
the,O
Insured,O
through,O
any,O
dishonest,O
or,O
fraudulent,O
act,O
(,O
s,O
),O
",",O
including,O
Larceny,O
or,O
Embezzlement,O
of,O
one,O
or,O
more,O
of,O
the,O
Employees,O
and,O
the,O
liability,O
under,O
this,O
paragraph,O
shall,O
be,O
in,O
addition,O
to,O
the,O
Limit,O
of,O
liability,O
stated,O
in,O
Insuring,O
Agreement,O
(,O
A,O
),O
in,O
Item,O
3,O
of,O
the,O
Declarations,O
.,O
,O
Loss,O
of,O
Property,O
(,O
occurring,O
with,O
or,O
without,O
negligence,O
or,O
violence,O
),O
through,O
robbery,O
",",O
burglary,O
",",O
Larceny,O
",",O
theft,O
",",O
holdup,O
",",O
or,O
other,O
fraudulent,O
means,O
",",O
misplacement,O
",",O
mysterious,O
unexplainable,O
disappearance,O
",",O
damage,O
thereto,O
or,O
destruction,O
thereof,O
",",O
abstraction,O
or,O
removal,O
from,O
the,O
possession,O
",",O
custody,O
or,O
control,O
of,O
the,O
Insured,O
",",O
and,O
loss,O
of,O
subscription,O
",",O
conversion,O
",",O
redemption,O
or,O
deposit,O
privileges,O
through,O
the,O
misplacement,O
or,O
loss,O
of,O
Property,O
",",O
while,O
the,O
Property,O
is,O
(,O
or,O
is,O
supposed,O
or,O
believed,O
by,O
the,O
Insured,O
to,O
be,O
),O
lodged,O
or,O
deposited,O
within,O
any,O
offices,O
or,O
premises,O
located,O
anywhere,O
",",O
except,O
in,O
an,O
office,O
listed,O
in,O
Item,O
4,O
of,O
the,O
Declarations,O
or,O
amendment,O
thereof,O
or,O
in,O
the,O
mail,O
or,O
with,O
a,O
carrier,O
for,O
hire,O
other,O
than,O
an,O
armored,O
motor,O
vehicle,O
company,O
",",O
for,O
the,O
purpose,O
of,O
transportation,O
.,O
,O
Loss,O
of,O
Property,O
(,O
occurring,O
with,O
or,O
without,O
negligence,O
or,O
violence,O
),O
through,O
robbery,O
",",O
Larceny,O
",",O
theft,O
",",O
holdup,O
",",O
misplacement,O
",",O
mysterious,O
unexplainable,O
disappearance,O
",",O
being,O
lost,O
or,O
otherwise,O
made,O
away,O
with,O
",",O
damage,O
thereto,O
or,O
destruction,O
thereof,O
",",O
and,O
loss,O
of,O
subscription,O
",",O
conversion,O
",",O
redemption,O
or,O
deposit,O
privileges,O
through,O
the,O
misplacement,O
or,O
loss,O
of,O
Property,O
",",O
while,O
the,O
Property,O
is,O
in,O
transit,O
anywhere,O
in,O
the,O
custody,O
of,O
any,O
person,O
or,O
persons,O
acting,O
as,O
messenger,O
",",O
except,O
while,O
in,O
the,O
mail,O
or,O
with,O
a,O
carrier,O
for,O
hire,O
",",O
other,O
than,O
an,O
armored,O
motor,O
vehicle,O
company,O
",",O
for,O
the,O
purpose,O
of,O
transportation,O
",",O
such,O
transit,O
to,O
begin,O
immediately,O
upon,O
receipt,O
of,O
such,O
Property,O
by,O
the,O
transporting,O
person,O
or,O
persons,O
",",O
and,O
to,O
end,O
immediately,O
upon,O
delivery,O
thereof,O
at,O
destination,O
.,O
,O
Loss,O
through,O
FORGERY,O
or,O
ALTERATION,O
of,O
",",O
on,O
or,O
in,O
any,O
bills,O
of,O
exchange,O
",",O
checks,O
",",O
drafts,O
",",O
acceptances,O
",",O
certificates,O
of,O
deposit,O
.,O
,O
knowledge,O
and,O
consent,O
of,O
such,O
customer,O
",",O
shareholder,O
or,O
subscriber,O
to,O
shares,O
",",O
whether,O
certificated,O
or,O
uncertificated,O
",",O
of,O
an,O
Investment,O
Company,O
",",O
financial,O
or,O
banking,O
institution,O
or,O
stockbroker,O
",",O
withdrawal,O
orders,O
or,O
receipts,O
for,O
the,O
withdrawal,O
of,O
funds,O
or,O
Property,O
",",O
or,O
receipts,O
or,O
certificates,O
of,O
deposit,O
for,O
Property,O
and,O
bearing,O
the,O
name,O
of,O
the,O
Insured,O
as,O
issuer,O
",",O
or,O
of,O
another,O
Investment,O
Company,O
for,O
which,O
the,O
Insured,O
acts,O
as,O
agent,O
",",O
excluding,O
",",O
however,O
",",O
any,O
loss,O
covered,O
under,O
Insuring,O
Agreement,O
(,O
F,O
),O
hereof,O
whether,O
or,O
not,O
coverage,O
for,O
Insuring,O
Agreement,O
(,O
F,O
),O
is,O
provided,O
for,O
in,O
the,O
Declarations,O
of,O
this,O
bond,O
.,O
,O
Any,O
check,O
or,O
draft,O
(,O
a,O
),O
made,O
payable,O
to,O
a,O
fictitious,O
payee,O
and,O
endorsed,O
in,O
the,O
name,O
of,O
such,O
fictitious,O
payee,O
or,O
(,O
b,O
),O
procured,O
in,O
a,O
transaction,O
with,O
the,O
maker,O
or,O
drawer,O
thereof,O
or,O
with,O
one,O
acting,O
as,O
an,O
agent,O
of,O
such,O
maker,O
or,O
drawer,O
or,O
anyone,O
impersonating,O
another,O
and,O
made,O
or,O
drawn,O
payable,O
to,O
the,O
one,O
so,O
impersonated,O
and,O
endorsed,O
by,O
anyone,O
other,O
than,O
the,O
one,O
impersonated,O
",",O
shall,O
be,O
deemed,O
to,O
be,O
forged,O
as,O
to,O
such,O
endorsement,O
.,O
,O
Mechanically,O
reproduced,O
facsimile,O
signatures,O
are,O
treated,O
the,O
same,O
as,O
handwritten,O
signatures,O
.,O
,O
Loss,O
sustained,O
by,O
the,O
Insured,O
",",O
including,O
loss,O
sustained,O
by,O
reason,O
of,O
a,O
violation,O
of,O
the,O
constitution,O
",",O
by-laws,O
",",O
rules,O
or,O
regulations,O
of,O
any,O
Self,O
Regulatory,O
Organization,O
of,O
which,O
the,O
Insured,O
is,O
a,O
member,O
or,O
which,O
would,O
have,O
been,O
imposed,O
upon,O
the,O
Insured,O
by,O
the,O
constitution,O
",",O
by-laws,O
",",O
rules,O
or,O
regulations,O
of,O
any,O
Self,O
Regulatory,O
Organization,O
if,O
the,O
Insured,O
had,O
been,O
a,O
member,O
thereof,O
",",O
,O
Securities,O
",",O
documents,O
or,O
other,O
written,O
instruments,O
shall,O
be,O
deemed,O
to,O
mean,O
original,O
(,O
including,O
original,O
counterparts,O
),O
negotiable,O
or,O
non-negotiable,O
agreements,O
which,O
in,O
and,O
of,O
themselves,O
represent,O
an,O
equitable,O
interest,O
",",O
ownership,O
",",O
or,O
debt,O
",",O
including,O
an,O
assignment,O
thereof,O
which,O
instruments,O
are,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
",",O
transferable,O
by,O
delivery,O
of,O
such,O
agreements,O
with,O
any,O
necessary,O
endorsement,O
or,O
assignment,O
.,O
,O
The,O
word,O
counterfeited,O
as,O
used,O
in,O
this,O
Insuring,O
Agreement,O
shall,O
be,O
deemed,O
to,O
mean,O
any,O
security,O
",",O
document,O
or,O
other,O
written,O
instrument,O
which,O
is,O
intended,O
to,O
deceive,O
and,O
to,O
be,O
taken,O
for,O
an,O
original,O
.,O
,O
Mechanically,O
produced,O
facsimile,O
signatures,O
are,O
treated,O
the,O
same,O
as,O
handwritten,O
signatures,O
.,O
,O
issued,O
by,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
or,O
Canada,I-LOCATION
or,O
issued,O
pursuant,O
to,O
a,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
or,O
Canadian,I-MISCELLANEOUS
statute,O
for,O
use,O
as,O
currency,O
.,O
,O
Loss,O
against,O
any,O
and,O
all,O
sums,O
which,O
the,O
Insured,O
shall,O
become,O
obligated,O
to,O
pay,O
by,O
reason,O
of,O
the,O
Liability,O
imposed,O
upon,O
the,O
Insured,O
by,O
law,O
for,O
damages,O
:,O
For,O
having,O
either,O
complied,O
with,O
or,O
failed,O
to,O
comply,O
with,O
any,O
written,O
notice,O
of,O
any,O
customer,O
",",O
shareholder,O
or,O
subscriber,O
of,O
the,O
Insured,O
or,O
any,O
Authorized,O
Representative,O
of,O
such,O
customer,O
",",O
shareholder,O
or,O
subscriber,O
to,O
stop,O
payment,O
of,O
any,O
check,O
or,O
draft,O
made,O
or,O
drawn,O
by,O
such,O
customer,O
",",O
shareholder,O
or,O
subscriber,O
or,O
any,O
Authorized,O
Representative,O
of,O
such,O
customer,O
",",O
shareholder,O
or,O
subscriber,O
",",O
or,O
For,O
having,O
refused,O
to,O
pay,O
any,O
check,O
or,O
draft,O
made,O
or,O
drawn,O
by,O
any,O
customer,O
",",O
shareholder,O
or,O
subscriber,O
of,O
the,O
Insured,O
or,O
any,O
Authorized,O
Representative,O
of,O
such,O
customer,O
",",O
shareholder,O
or,O
subscriber,O
.,O
,O
Loss,O
resulting,O
from,O
payments,O
of,O
dividends,O
or,O
fund,O
shares,O
",",O
or,O
withdrawals,O
permitted,O
from,O
any,O
customer,O
s,O
",",O
shareholder,O
s,O
or,O
subscriber,O
s,O
account,O
based,O
upon,O
Uncollectible,O
Items,O
of,O
Deposit,O
of,O
a,O
customer,O
",",O
shareholder,O
or,O
subscriber,O
credited,O
by,O
the,O
Insured,O
or,O
the,O
Insured,O
s,O
agent,O
to,O
such,O
customer,O
s,O
",",O
shareholder,O
s,O
or,O
subscriber,O
s,O
Mutual,O
Fund,O
Account,O
;,O
or,O
loss,O
resulting,O
from,O
any,O
Item,O
of,O
Deposit,O
processed,O
through,O
an,O
Automated,O
Clearing,O
House,O
which,O
is,O
reversed,O
by,O
the,O
customer,O
",",O
shareholder,O
or,O
subscriber,O
and,O
deemed,O
uncollectible,O
by,O
the,O
Insured,O
.,O
,O
Loss,O
includes,O
dividends,O
and,O
interest,O
accrued,O
not,O
to,O
exceed,O
15,O
%,O
of,O
the,O
Uncollectible,O
Items,O
which,O
are,O
deposited,O
.,O
,O
This,O
Insuring,O
Agreement,O
applies,O
to,O
all,O
Mutual,O
Funds,O
with,O
exchange,O
privileges,O
if,O
all,O
Fund,O
(,O
s,O
),O
in,O
the,O
exchange,O
program,O
are,O
insured,O
by,O
a,O
National,I-BUSINESS
Union,I-BUSINESS
Fire,I-BUSINESS
Insurance,I-BUSINESS
Company,I-BUSINESS
of,I-BUSINESS
Pittsburgh,I-BUSINESS
",",I-BUSINESS
PA,I-BUSINESS
for,O
Uncollectible,O
Items,O
of,O
Deposit,O
.,O
,O
withdrawal,O
as,O
declared,O
in,O
the,O
Fund,O
(,O
s,O
),O
prospectus,O
shall,O
begin,O
from,O
the,O
date,O
a,O
deposit,O
was,O
first,O
credited,O
to,O
any,O
Insured,O
Fund,O
(,O
s,O
),O
.,O
,O
No,O
statement,O
made,O
by,O
or,O
on,O
behalf,O
of,O
the,O
Insured,O
",",O
whether,O
contained,O
in,O
the,O
application,O
or,O
otherwise,O
",",O
shall,O
be,O
deemed,O
to,O
be,O
a,O
warranty,O
of,O
anything,O
except,O
that,O
it,O
is,O
true,O
to,O
the,O
best,O
of,O
the,O
knowledge,O
and,O
belief,O
of,O
the,O
person,O
making,O
the,O
statement,O
.,O
,O
The,O
Insured,O
shall,O
promptly,O
give,O
notice,O
to,O
the,O
Underwriter,O
of,O
any,O
such,O
suit,O
or,O
legal,O
proceeding,O
and,O
at,O
the,O
request,O
of,O
the,O
Underwriter,O
shall,O
furnish,O
it,O
with,O
copies,O
of,O
all,O
pleadings,O
and,O
other,O
papers,O
therein,O
.,O
,O
At,O
the,O
Underwriter,O
s,O
election,O
the,O
Insured,O
shall,O
permit,O
the,O
Underwriter,O
to,O
conduct,O
the,O
defense,O
of,O
such,O
suit,O
or,O
legal,O
proceeding,O
",",O
in,O
the,O
Insured,O
s,O
name,O
",",O
through,O
attorneys,O
of,O
the,O
Underwriter,O
s,O
selection,O
.,O
,O
In,O
such,O
event,O
",",O
the,O
Insured,O
shall,O
give,O
all,O
reasonable,O
information,O
and,O
assistance,O
which,O
the,O
Underwriter,O
shall,O
deem,O
necessary,O
to,O
the,O
proper,O
defense,O
of,O
such,O
suit,O
or,O
legal,O
proceeding,O
.,O
,O
If,O
the,O
amount,O
of,O
the,O
Insured,O
s,O
liability,O
or,O
alleged,O
liability,O
is,O
greater,O
than,O
the,O
amount,O
recoverable,O
under,O
this,O
bond,O
",",O
or,O
if,O
a,O
Deductible,O
Amount,O
is,O
applicable,O
",",O
or,O
both,O
",",O
the,O
liability,O
of,O
the,O
Underwriter,O
under,O
this,O
General,O
Agreement,O
is,O
limited,O
to,O
the,O
proportion,O
of,O
court,O
costs,O
and,O
attorneys,O
fees,O
incurred,O
and,O
paid,O
by,O
the,O
Insured,O
or,O
by,O
the,O
Underwriter,O
that,O
the,O
amount,O
recoverable,O
under,O
this,O
bond,O
bears,O
to,O
the,O
total,O
of,O
such,O
amount,O
plus,O
the,O
amount,O
which,O
is,O
not,O
so,O
recoverable,O
.,O
,O
Such,O
indemnity,O
shall,O
be,O
in,O
addition,O
to,O
the,O
Limit,O
of,O
Liability,O
for,O
the,O
applicable,O
Insuring,O
Agreement,O
or,O
Coverage,O
.,O
,O
Acts,O
of,O
an,O
Employee,O
",",O
as,O
defined,O
in,O
this,O
bond,O
",",O
are,O
covered,O
under,O
Insuring,O
Agreement,O
(,O
A,O
),O
only,O
while,O
the,O
Employee,O
is,O
in,O
the,O
Insured,O
s,O
employ,O
.,O
,O
discovered,O
subsequent,O
to,O
the,O
termination,O
of,O
employment,O
",",O
coverage,O
would,O
still,O
apply,O
under,O
Insuring,O
Agreement,O
(,O
A,O
),O
if,O
the,O
direct,O
proximate,O
cause,O
of,O
the,O
loss,O
occurred,O
while,O
the,O
former,O
Employee,O
performed,O
duties,O
within,O
the,O
scope,O
of,O
his/her,O
employment,O
.,O
,O
DEFINITIONS,O
The,O
following,O
terms,O
",",O
as,O
used,O
in,O
this,O
bond,O
",",O
shall,O
have,O
the,O
respective,O
meanings,O
stated,O
in,O
this,O
Section,O
:,O
,O
Company,O
named,O
as,O
Insured,O
herein,O
",",O
or,O
while,O
acting,O
as,O
a,O
member,O
of,O
any,O
committee,O
duly,O
elected,O
or,O
appointed,O
to,O
examine,O
or,O
audit,O
or,O
have,O
custody,O
of,O
or,O
access,O
to,O
the,O
Property,O
of,O
any,O
such,O
Investment,O
Company,O
",",O
provided,O
that,O
only,O
Employees,O
or,O
partners,O
of,O
a,O
transfer,O
agent,O
",",O
shareholder,O
accounting,O
record-keeper,O
or,O
administrator,O
which,O
is,O
an,O
affiliated,O
person,O
as,O
defined,O
in,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
",",O
of,O
an,O
Investment,O
Company,O
named,O
as,O
Insured,O
or,O
is,O
an,O
affiliated,O
person,O
of,O
the,O
adviser,O
",",O
underwriter,O
or,O
administrator,O
of,O
such,O
Investment,O
Company,O
",",O
and,O
which,O
is,O
not,O
a,O
bank,O
",",O
shall,O
be,O
included,O
within,O
the,O
definition,O
of,O
Employee,O
.,O
,O
Each,O
employer,O
of,O
temporary,O
personnel,O
or,O
processors,O
as,O
set,O
forth,O
in,O
Sub-Sections,O
(,O
6,O
),O
and,O
of,O
Section,O
1,O
(,O
a,O
),O
and,O
their,O
partners,O
",",O
officers,O
and,O
employees,O
shall,O
collectively,O
be,O
deemed,O
to,O
be,O
one,O
person,O
for,O
all,O
the,O
purposes,O
of,O
this,O
bond,O
",",O
excepting,O
",",O
however,O
",",O
the,O
last,O
paragraph,O
of,O
Section,O
13,O
.,O
,O
Brokers,O
",",O
or,O
other,O
agents,O
under,O
contract,O
or,O
representatives,O
of,O
the,O
same,O
general,O
character,O
shall,O
not,O
be,O
considered,O
Employees,O
.,O
,O
EXCLUSIONS,O
THIS,O
BOND,O
DOES,O
NOT,O
COVER,O
:,O
,O
ASSIGNMENT,O
OF,O
RIGHTS,O
This,O
bond,O
does,O
not,O
afford,O
coverage,O
in,O
favor,O
of,O
any,O
Employers,O
of,O
temporary,O
personnel,O
or,O
of,O
processors,O
as,O
set,O
forth,O
in,O
sub-sections,O
(,O
6,O
),O
and,O
(,O
7,O
),O
of,O
Section,O
1,O
(,O
a,O
),O
of,O
this,O
bond,O
",",O
as,O
aforesaid,O
",",O
and,O
upon,O
payment,O
to,O
the,O
Insured,O
by,O
the,O
Underwriter,O
on,O
account,O
of,O
any,O
loss,O
through,O
dishonest,O
or,O
fraudulent,O
act,O
(,O
s,O
),O
including,O
Larceny,O
or,O
Embezzlement,O
committed,O
by,O
any,O
of,O
the,O
partners,O
",",O
officers,O
or,O
employees,O
of,O
such,O
Employers,O
",",O
whether,O
acting,O
alone,O
or,O
in,O
collusion,O
with,O
others,O
",",O
an,O
assignment,O
of,O
such,O
of,O
the,O
Insured,O
s,O
rights,O
and,O
causes,O
of,O
action,O
as,O
it,O
may,O
have,O
against,O
such,O
Employers,O
by,O
reason,O
of,O
such,O
acts,O
so,O
committed,O
shall,O
",",O
to,O
the,O
extent,O
of,O
such,O
payment,O
",",O
be,O
given,O
by,O
the,O
Insured,O
to,O
the,O
Underwriter,O
",",O
and,O
the,O
Insured,O
shall,O
execute,O
all,O
papers,O
necessary,O
to,O
secure,O
to,O
the,O
Underwriter,O
the,O
rights,O
herein,O
provided,O
for,O
.,O
,O
This,O
bond,O
is,O
for,O
the,O
use,O
and,O
benefit,O
only,O
of,O
the,O
Insured,O
named,O
in,O
the,O
Declarations,O
and,O
the,O
Underwriter,O
shall,O
not,O
be,O
liable,O
hereunder,O
for,O
loss,O
sustained,O
by,O
anyone,O
other,O
than,O
the,O
Insured,O
unless,O
the,O
Insured,O
",",O
in,O
its,O
sole,O
discretion,O
and,O
at,O
its,O
option,O
",",O
shall,O
include,O
such,O
loss,O
in,O
the,O
Insured,O
s,O
proof,O
of,O
loss,O
.,O
,O
At,O
the,O
earliest,O
practicable,O
moment,O
after,O
discovery,O
of,O
any,O
loss,O
hereunder,O
the,O
Insured,O
shall,O
give,O
the,O
Underwriter,O
written,O
notice,O
thereof,O
and,O
shall,O
also,O
within,O
six,O
months,O
after,O
such,O
discovery,O
furnish,O
to,O
the,O
Underwriter,O
affirmative,O
proof,O
of,O
loss,O
with,O
full,O
particulars,O
.,O
,O
If,O
claim,O
is,O
made,O
under,O
this,O
bond,O
for,O
loss,O
of,O
securities,O
or,O
shares,O
",",O
the,O
Underwriter,O
shall,O
not,O
be,O
liable,O
unless,O
each,O
of,O
such,O
securities,O
or,O
shares,O
is,O
identified,O
in,O
such,O
proof,O
of,O
loss,O
by,O
a,O
certificate,O
or,O
bond,O
number,O
or,O
",",O
where,O
such,O
securities,O
or,O
shares,O
are,O
uncertificated,O
",",O
by,O
such,O
identification,O
means,O
as,O
agreed,O
to,O
by,O
the,O
Underwriter,O
.,O
,O
The,O
Underwriter,O
shall,O
have,O
thirty,O
days,O
after,O
notice,O
and,O
proof,O
of,O
loss,O
within,O
which,O
to,O
investigate,O
the,O
claim,O
",",O
but,O
where,O
the,O
loss,O
is,O
clear,O
and,O
undisputed,O
",",O
settlement,O
shall,O
be,O
made,O
within,O
forty-eight,O
hours,O
;,O
and,O
this,O
shall,O
apply,O
notwithstanding,O
the,O
loss,O
is,O
made,O
up,O
wholly,O
or,O
in,O
part,O
of,O
securities,O
of,O
which,O
duplicates,O
may,O
be,O
obtained,O
.,O
,O
Legal,O
proceedings,O
for,O
recovery,O
of,O
any,O
loss,O
hereunder,O
shall,O
not,O
be,O
brought,O
prior,O
to,O
the,O
expiration,O
of,O
sixty,O
days,O
after,O
such,O
proof,O
of,O
loss,O
is,O
filed,O
with,O
the,O
Underwriter,O
nor,O
after,O
the,O
expiration,O
of,O
twenty-four,O
months,O
from,O
the,O
discovery,O
of,O
such,O
loss,O
",",O
except,O
that,O
any,O
action,O
or,O
proceeding,O
to,O
recover,O
hereunder,O
on,O
account,O
of,O
any,O
judgment,O
against,O
the,O
Insured,O
in,O
any,O
suit,O
mentioned,O
in,O
General,O
Agreement,O
C,O
or,O
to,O
recover,O
attorneys,O
fees,O
paid,O
in,O
any,O
such,O
suit,O
",",O
shall,O
be,O
begun,O
within,O
twenty-four,O
months,O
from,O
the,O
date,O
upon,O
which,O
the,O
judgment,O
in,O
such,O
suit,O
shall,O
become,O
final,O
.,O
,O
If,O
any,O
limitation,O
embodied,O
in,O
this,O
bond,O
is,O
prohibited,O
by,O
any,O
law,O
controlling,O
the,O
construction,O
hereof,O
",",O
such,O
limitation,O
shall,O
be,O
deemed,O
to,O
be,O
amended,O
so,O
as,O
to,O
be,O
equal,O
to,O
the,O
minimum,O
period,O
of,O
limitation,O
permitted,O
by,O
such,O
law,O
.,O
,O
which,O
would,O
cause,O
a,O
reasonable,O
person,O
to,O
assume,O
that,O
a,O
loss,O
covered,O
by,O
the,O
bond,O
has,O
been,O
or,O
will,O
be,O
incurred,O
even,O
though,O
the,O
exact,O
amount,O
or,O
details,O
of,O
loss,O
may,O
not,O
be,O
then,O
known,O
.,O
,O
VALUATION,O
OF,O
PROPERTY,O
The,O
value,O
of,O
any,O
Property,O
",",O
except,O
books,O
of,O
accounts,O
or,O
other,O
records,O
used,O
by,O
the,O
Insured,O
in,O
the,O
conduct,O
of,O
its,O
business,O
",",O
for,O
the,O
loss,O
of,O
which,O
a,O
claim,O
shall,O
be,O
made,O
hereunder,O
",",O
shall,O
be,O
determined,O
by,O
the,O
average,O
market,O
value,O
of,O
such,O
Property,O
on,O
the,O
business,O
day,O
next,O
preceding,O
the,O
discovery,O
of,O
such,O
loss,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
value,O
of,O
any,O
Property,O
replaced,O
by,O
the,O
Insured,O
prior,O
to,O
the,O
payment,O
of,O
claim,O
therefor,O
shall,O
be,O
the,O
actual,O
market,O
value,O
at,O
the,O
time,O
of,O
replacement,O
;,O
and,O
further,O
provided,O
that,O
in,O
case,O
of,O
a,O
loss,O
or,O
misplacement,O
of,O
interim,O
certificates,O
",",O
warrants,O
",",O
rights,O
",",O
or,O
other,O
securities,O
",",O
the,O
production,O
which,O
is,O
necessary,O
to,O
the,O
exercise,O
of,O
subscription,O
",",O
conversion,O
",",O
redemption,O
or,O
deposit,O
privileges,O
",",O
the,O
value,O
thereof,O
shall,O
be,O
the,O
market,O
value,O
of,O
such,O
privileges,O
immediately,O
preceding,O
the,O
expiration,O
thereof,O
if,O
said,O
loss,O
or,O
misplacement,O
is,O
not,O
discovered,O
until,O
after,O
their,O
expiration,O
.,O
,O
If,O
no,O
market,O
price,O
is,O
quoted,O
for,O
such,O
Property,O
or,O
for,O
such,O
privileges,O
",",O
the,O
value,O
shall,O
be,O
fixed,O
by,O
agreement,O
between,O
the,O
parties,O
or,O
by,O
arbitration,O
.,O
,O
In,O
case,O
of,O
any,O
loss,O
or,O
damage,O
to,O
Property,O
consisting,O
of,O
books,O
of,O
accounts,O
or,O
other,O
records,O
used,O
by,O
the,O
Insured,O
in,O
the,O
conduct,O
of,O
its,O
business,O
",",O
the,O
Underwriter,O
shall,O
be,O
liable,O
under,O
this,O
bond,O
only,O
if,O
such,O
books,O
or,O
records,O
are,O
actually,O
reproduced,O
and,O
then,O
for,O
not,O
more,O
than,O
the,O
cost,O
of,O
blank,O
books,O
",",O
blank,O
pages,O
or,O
other,O
materials,O
plus,O
the,O
cost,O
of,O
labor,O
for,O
the,O
actual,O
transcription,O
or,O
copying,O
of,O
data,O
which,O
shall,O
have,O
been,O
furnished,O
by,O
the,O
Insured,O
in,O
order,O
to,O
reproduce,O
such,O
books,O
and,O
other,O
records,O
.,O
,O
VALUATION,O
OF,O
PREMISES,O
AND,O
FURNISHINGS,O
In,O
case,O
of,O
damage,O
to,O
any,O
office,O
of,O
the,O
Insured,O
",",O
or,O
loss,O
of,O
or,O
damage,O
to,O
the,O
furnishings,O
",",O
fixtures,O
",",O
stationery,O
",",O
supplies,O
",",O
equipment,O
",",O
safes,O
or,O
vaults,O
therein,O
",",O
the,O
Underwriter,O
shall,O
not,O
be,O
liable,O
for,O
more,O
than,O
the,O
actual,O
cash,O
value,O
thereof,O
",",O
or,O
for,O
more,O
than,O
the,O
actual,O
cost,O
of,O
their,O
replacement,O
or,O
repair,O
.,O
,O
The,O
Underwriter,O
may,O
",",O
at,O
its,O
election,O
",",O
pay,O
such,O
actual,O
cash,O
value,O
or,O
make,O
such,O
replacement,O
or,O
repair,O
.,O
,O
If,O
the,O
Underwriter,O
and,O
the,O
Insured,O
can,O
not,O
agree,O
upon,O
such,O
cash,O
value,O
or,O
such,O
cost,O
of,O
replacement,O
or,O
repair,O
",",O
such,O
shall,O
be,O
determined,O
by,O
arbitration,O
.,O
,O
LOST,O
SECURITIES,O
If,O
the,O
Insured,O
shall,O
sustain,O
a,O
loss,O
of,O
securities,O
the,O
total,O
value,O
of,O
which,O
is,O
in,O
excess,O
of,O
the,O
limit,O
stated,O
in,O
Item,O
3,O
of,O
the,O
Declarations,O
of,O
this,O
bond,O
",",O
the,O
liability,O
of,O
the,O
Underwriter,O
shall,O
be,O
limited,O
to,O
payment,O
for,O
",",O
or,O
duplication,O
of,O
",",O
securities,O
having,O
value,O
equal,O
to,O
the,O
limit,O
stated,O
in,O
Item,O
3,O
of,O
the,O
Declarations,O
of,O
this,O
bond,O
.,O
,O
If,O
the,O
Underwriter,O
shall,O
make,O
payment,O
to,O
the,O
Insured,O
for,O
any,O
loss,O
of,O
securities,O
",",O
the,O
Insured,O
shall,O
thereupon,O
assign,O
to,O
the,O
Underwriter,O
all,O
of,O
the,O
Insured,O
s,O
rights,O
",",O
title,O
and,O
interests,O
in,O
and,O
to,O
said,O
securities,O
.,O
,O
With,O
respect,O
to,O
securities,O
the,O
value,O
of,O
which,O
do,O
not,O
exceed,O
the,O
Deductible,O
Amount,O
(,O
at,O
the,O
time,O
of,O
the,O
discovery,O
of,O
the,O
loss,O
),O
and,O
for,O
which,O
the,O
Underwriter,O
may,O
at,O
its,O
sole,O
discretion,O
and,O
option,O
and,O
at,O
the,O
request,O
of,O
the,O
Insured,O
issue,O
a,O
Lost,O
Instrument,O
Bond,O
or,O
Bonds,O
to,O
effect,O
replacement,O
thereof,O
",",O
the,O
Insured,O
will,O
pay,O
the,O
usual,O
premium,O
charged,O
therefor,O
and,O
will,O
indemnify,O
the,O
Underwriter,O
against,O
all,O
loss,O
or,O
expense,O
that,O
the,O
Underwriter,O
may,O
sustain,O
because,O
of,O
the,O
issuance,O
of,O
such,O
Lost,O
Instrument,O
Bond,O
or,O
Bonds,O
.,O
,O
With,O
respect,O
to,O
securities,O
the,O
value,O
of,O
which,O
exceeds,O
the,O
Deductible,O
Amount,O
(,O
at,O
the,O
time,O
of,O
discovery,O
of,O
the,O
loss,O
),O
and,O
for,O
which,O
the,O
Underwriter,O
may,O
issue,O
or,O
arrange,O
for,O
the,O
issuance,O
of,O
a,O
Lost,O
Instrument,O
Bond,O
or,O
Bonds,O
to,O
effect,O
replacement,O
thereof,O
",",O
the,O
Insured,O
agrees,O
that,O
it,O
will,O
pay,O
as,O
premium,O
therefor,O
a,O
proportion,O
of,O
the,O
usual,O
premium,O
charged,O
therefor,O
",",O
said,O
proportion,O
being,O
equal,O
to,O
the,O
percentage,O
that,O
the,O
Deductible,O
Amount,O
bears,O
to,O
the,O
value,O
of,O
the,O
securities,O
upon,O
discovery,O
of,O
the,O
loss,O
",",O
and,O
that,O
it,O
will,O
indemnify,O
the,O
issuer,O
of,O
said,O
Lost,O
Instrument,O
Bond,O
or,O
Bonds,O
against,O
all,O
loss,O
and,O
expense,O
that,O
is,O
not,O
recoverable,O
from,O
the,O
Underwriter,O
under,O
the,O
terms,O
and,O
conditions,O
of,O
this,O
INVESTMENT,O
COMPANY,O
BLANKET,O
BOND,O
subject,O
to,O
the,O
Limit,O
of,O
Liability,O
hereunder,O
.,O
,O
net,O
amount,O
of,O
such,O
recovery,O
",",O
less,O
the,O
actual,O
costs,O
and,O
expenses,O
of,O
making,O
same,O
",",O
shall,O
be,O
applied,O
to,O
reimburse,O
the,O
Insured,O
in,O
full,O
for,O
the,O
excess,O
portion,O
of,O
such,O
loss,O
",",O
and,O
the,O
remainder,O
",",O
if,O
any,O
",",O
shall,O
be,O
paid,O
first,O
in,O
reimbursement,O
of,O
the,O
Underwriter,O
and,O
thereafter,O
in,O
reimbursement,O
of,O
the,O
Insured,O
for,O
that,O
part,O
of,O
such,O
loss,O
within,O
the,O
Deductible,O
Amount,O
.,O
,O
The,O
Insured,O
shall,O
execute,O
all,O
necessary,O
papers,O
to,O
secure,O
to,O
the,O
Underwriter,O
the,O
rights,O
provided,O
for,O
herein,O
.,O
,O
shall,O
be,O
limited,O
to,O
the,O
applicable,O
Limit,O
of,O
Liability,O
stated,O
in,O
Item,O
3,O
of,O
the,O
Declarations,O
of,O
this,O
bond,O
irrespective,O
of,O
the,O
total,O
amount,O
of,O
such,O
loss,O
or,O
losses,O
and,O
shall,O
not,O
be,O
cumulative,O
in,O
amounts,O
from,O
year,O
to,O
year,O
or,O
from,O
period,O
to,O
period,O
.,O
,O
Sub-section,O
(,O
c,O
),O
is,O
not,O
applicable,O
to,O
any,O
situation,O
to,O
which,O
the,O
language,O
of,O
sub-section,O
(,O
d,O
),O
applies,O
.,O
,O
LIMIT,O
OF,O
LIABILITY,O
With,O
respect,O
to,O
any,O
loss,O
set,O
forth,O
in,O
the,O
PROVIDED,O
clause,O
of,O
Section,O
9,O
of,O
this,O
bond,O
which,O
is,O
recoverable,O
or,O
recovered,O
in,O
whole,O
or,O
in,O
part,O
under,O
any,O
other,O
bonds,O
or,O
policies,O
issued,O
by,O
the,O
Underwriter,O
to,O
the,O
Insured,O
or,O
to,O
any,O
predecessor,O
in,O
interest,O
of,O
the,O
Insured,O
and,O
terminated,O
or,O
cancelled,O
or,O
allowed,O
to,O
expire,O
and,O
in,O
which,O
the,O
period,O
for,O
discovery,O
has,O
not,O
expired,O
at,O
the,O
time,O
any,O
such,O
loss,O
thereunder,O
is,O
discovered,O
",",O
the,O
total,O
liability,O
of,O
the,O
Underwriter,O
under,O
this,O
bond,O
and,O
under,O
other,O
bonds,O
or,O
policies,O
shall,O
not,O
exceed,O
",",O
in,O
the,O
aggregate,O
",",O
the,O
amount,O
carried,O
hereunder,O
on,O
such,O
loss,O
or,O
the,O
amount,O
available,O
to,O
the,O
Insured,O
under,O
such,O
other,O
bonds,O
or,O
policies,O
",",O
as,O
limited,O
by,O
the,O
terms,O
and,O
conditions,O
thereof,O
",",O
for,O
any,O
such,O
loss,O
if,O
the,O
latter,O
amount,O
be,O
the,O
larger,O
.,O
,O
OTHER,O
INSURANCE,O
If,O
the,O
Insured,O
shall,O
hold,O
",",O
as,O
indemnity,O
against,O
any,O
loss,O
covered,O
hereunder,O
",",O
any,O
valid,O
and,O
enforceable,O
insurance,O
or,O
suretyship,O
",",O
the,O
Underwriter,O
shall,O
be,O
liable,O
hereunder,O
only,O
for,O
such,O
amount,O
of,O
such,O
loss,O
which,O
is,O
in,O
excess,O
of,O
the,O
amount,O
of,O
such,O
other,O
insurance,O
or,O
suretyship,O
",",O
not,O
exceeding,O
",",O
however,O
",",O
the,O
Limit,O
of,O
Liability,O
of,O
this,O
bond,O
applicable,O
to,O
such,O
loss,O
.,O
,O
account,O
of,O
loss,O
as,O
specified,O
",",O
respectively,O
",",O
in,O
sub-sections,O
(,O
a,O
),O
",",O
(,O
b,O
),O
",",O
(,O
c,O
),O
",",O
(,O
d,O
),O
and,O
(,O
e,O
),O
of,O
Section,O
9,O
",",O
NON-REDUCTION,I-MISCELLANEOUS
AND,I-MISCELLANEOUS
NON-,I-MISCELLANEOUS
ACCUMULATION,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
LIABILITY,I-MISCELLANEOUS
AND,I-MISCELLANEOUS
TOTAL,I-MISCELLANEOUS
LIABILITY,I-MISCELLANEOUS
",",O
unless,O
the,O
amount,O
of,O
such,O
loss,O
",",O
after,O
deducting,O
the,O
net,O
amount,O
of,O
all,O
reimbursement,O
and/or,O
recovery,O
obtained,O
or,O
made,O
by,O
the,O
Insured,O
",",O
other,O
than,O
from,O
any,O
bond,O
or,O
policy,O
of,O
insurance,O
issued,O
by,O
an,O
insurance,O
company,O
and,O
covering,O
such,O
loss,O
",",O
or,O
by,O
the,O
Underwriter,O
on,O
account,O
thereof,O
prior,O
to,O
payment,O
by,O
the,O
Underwriter,O
of,O
such,O
loss,O
",",O
shall,O
exceed,O
the,O
Deductible,O
Amount,O
set,O
forth,O
in,O
Item,O
3,O
of,O
the,O
Declarations,O
hereof,O
(,O
herein,O
called,O
Deductible,O
Amount,O
),O
and,O
then,O
for,O
such,O
excess,O
only,O
",",O
but,O
in,O
no,O
event,O
for,O
more,O
than,O
the,O
applicable,O
Limit,O
of,O
Liability,O
stated,O
in,O
Item,O
3,O
of,O
the,O
Declarations,O
.,O
,O
The,O
Insured,O
will,O
bear,O
",",O
in,O
addition,O
to,O
the,O
Deductible,O
Amount,O
",",O
premiums,O
on,O
Lost,O
Instrument,O
Bonds,O
as,O
set,O
forth,O
in,O
Section,O
7,O
.,O
,O
There,O
shall,O
be,O
no,O
deductible,O
applicable,O
to,O
any,O
loss,O
under,O
Insuring,O
Agreement,O
A,O
sustained,O
by,O
any,O
Investment,O
Company,O
named,O
as,O
Insured,O
herein,O
.,O
,O
TERMINATION,O
The,O
Underwriter,O
may,O
terminate,O
this,O
bond,O
as,O
an,O
entirety,O
by,O
furnishing,O
written,O
notice,O
specifying,O
the,O
termination,O
date,O
which,O
can,O
not,O
be,O
prior,O
to,O
60,O
days,O
after,O
the,O
receipt,O
of,O
such,O
written,O
notice,O
by,O
each,O
Investment,O
Company,O
named,O
as,O
Insured,O
and,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
Washington,I-LOCATION
",",I-LOCATION
D.C,I-LOCATION
.,I-LOCATION
,O
The,O
Insured,O
may,O
terminate,O
this,O
bond,O
as,O
an,O
entirety,O
by,O
furnishing,O
written,O
notice,O
to,O
the,O
Underwriter,O
.,O
,O
When,O
the,O
Insured,O
cancels,O
",",O
the,O
Insured,O
shall,O
furnish,O
written,O
notice,O
to,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
Washington,I-LOCATION
.,O
,O
prior,O
to,O
60,O
days,O
before,O
the,O
effective,O
date,O
of,O
the,O
termination,O
.,O
,O
The,O
Underwriter,O
shall,O
notify,O
all,O
other,O
Investment,O
Companies,O
named,O
as,O
Insured,O
of,O
the,O
receipt,O
of,O
such,O
termination,O
notice,O
and,O
the,O
termination,O
can,O
not,O
be,O
effective,O
prior,O
to,O
60,O
days,O
after,O
receipt,O
of,O
written,O
notice,O
by,O
all,O
other,O
Investment,O
Companies,O
.,O
,O
Premiums,O
are,O
earned,O
until,O
the,O
termination,O
date,O
as,O
set,O
forth,O
herein,O
.,O
,O
the,O
Insured,O
",",O
or,O
assignment,O
for,O
the,O
benefit,O
of,O
creditors,O
of,O
the,O
Insured,O
.,O
,O
or,O
immediately,O
upon,O
such,O
Insured,O
ceasing,O
to,O
exist,O
",",O
whether,O
through,O
merger,O
into,O
another,O
entity,O
",",O
or,O
by,O
disposition,O
of,O
all,O
of,O
its,O
assets,O
.,O
,O
The,O
Underwriter,O
shall,O
refund,O
the,O
unearned,O
premium,O
computed,O
at,O
short,O
rates,O
in,O
accordance,O
with,O
the,O
standard,O
short,O
rate,O
cancellation,O
tables,O
if,O
terminated,O
by,O
the,O
Insured,O
or,O
pro,O
rata,O
if,O
terminated,O
for,O
any,O
other,O
reason,O
.,O
,O
Insured,O
prior,O
to,O
the,O
effective,O
date,O
of,O
such,O
termination,O
or,O
cancellation,O
and,O
shall,O
pay,O
an,O
additional,O
premium,O
therefor,O
.,O
,O
Upon,O
receipt,O
of,O
such,O
notice,O
from,O
the,O
Insured,O
",",O
the,O
Underwriter,O
shall,O
give,O
its,O
written,O
consent,O
thereto,O
;,O
provided,O
",",O
however,O
",",O
that,O
such,O
additional,O
period,O
of,O
time,O
shall,O
terminate,O
immediately,O
;,O
,O
without,O
the,O
necessity,O
of,O
the,O
Underwriter,O
giving,O
notice,O
of,O
such,O
termination,O
.,O
,O
In,O
the,O
event,O
that,O
such,O
additional,O
period,O
of,O
time,O
is,O
terminated,O
",",O
as,O
provided,O
above,O
",",O
the,O
Underwriter,O
shall,O
refund,O
any,O
unearned,O
premium,O
.,O
,O
The,O
right,O
to,O
purchase,O
such,O
additional,O
period,O
for,O
the,O
discovery,O
of,O
loss,O
may,O
not,O
be,O
exercised,O
by,O
any,O
State,O
or,O
Federal,O
official,O
or,O
agency,O
",",O
or,O
by,O
any,O
receiver,O
or,O
liquidator,O
",",O
acting,O
or,O
appointed,O
to,O
take,O
over,O
the,O
Insured,O
s,O
business,O
for,O
the,O
operation,O
or,O
for,O
the,O
liquidation,O
thereof,O
or,O
for,O
any,O
other,O
purpose,O
.,O
,O
CENTRAL,O
HANDLING,O
OF,O
SECURITIES,O
Securities,O
included,O
in,O
the,O
systems,O
for,O
the,O
central,O
handling,O
of,O
securities,O
established,O
and,O
maintained,O
by,O
Depository,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
",",O
Midwest,I-BUSINESS
Depository,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
",",O
Pacific,I-BUSINESS
Securities,I-BUSINESS
Depository,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
",",O
and,O
Philadelphia,I-BUSINESS
Depository,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
",",O
hereinafter,O
called,O
Corporations,O
",",O
to,O
the,O
extent,O
of,O
the,O
Insured,O
's,O
interest,O
therein,O
as,O
effective,O
by,O
the,O
making,O
of,O
appropriate,O
entries,O
on,O
the,O
books,O
and,O
records,O
of,O
such,O
Corporations,O
shall,O
be,O
deemed,O
to,O
be,O
Property,O
.,O
,O
The,O
words,O
Employee,O
and,O
Employees,O
shall,O
be,O
deemed,O
to,O
include,O
the,O
officers,O
",",O
partners,O
",",O
clerks,O
and,O
other,O
employees,O
of,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
",",O
Boston,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
",",O
Midwest,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
",",O
Pacific,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
and,O
Philadelphia,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
",",O
,O
hereinafter,O
called,O
Exchanges,O
",",O
and,O
of,O
the,O
above,O
named,O
Corporations,O
",",O
and,O
of,O
any,O
nominee,O
in,O
whose,O
name,O
is,O
registered,O
any,O
security,O
included,O
within,O
the,O
systems,O
for,O
the,O
central,O
handling,O
of,O
securities,O
established,O
and,O
maintained,O
by,O
such,O
Corporations,O
",",O
and,O
any,O
employee,O
of,O
any,O
recognized,O
service,O
company,O
",",O
while,O
such,O
officers,O
",",O
partners,O
",",O
clerks,O
and,O
other,O
employees,O
and,O
employees,O
of,O
service,O
companies,O
perform,O
services,O
for,O
such,O
Corporations,O
in,O
the,O
operation,O
of,O
such,O
systems,O
.,O
,O
For,O
the,O
purpose,O
of,O
the,O
above,O
definition,O
a,O
recognized,O
service,O
company,O
shall,O
be,O
any,O
company,O
providing,O
clerks,O
or,O
other,O
personnel,O
to,O
said,O
Exchanges,O
or,O
Corporation,O
on,O
a,O
contract,O
basis,O
.,O
,O
The,O
Underwriter,O
shall,O
not,O
be,O
liable,O
on,O
account,O
of,O
any,O
loss,O
(,O
es,O
),O
in,O
connection,O
with,O
the,O
central,O
handling,O
of,O
securities,O
within,O
the,O
systems,O
established,O
and,O
maintained,O
by,O
such,O
Corporations,O
",",O
unless,O
such,O
loss,O
(,O
es,O
),O
shall,O
be,O
in,O
excess,O
of,O
the,O
amount,O
(,O
s,O
),O
recoverable,O
or,O
recovered,O
under,O
any,O
bond,O
or,O
policy,O
of,O
insurance,O
indemnifying,O
such,O
Corporations,O
",",O
against,O
such,O
loss,O
(,O
es,O
),O
",",O
and,O
then,O
the,O
Underwriter,O
shall,O
be,O
liable,O
hereunder,O
only,O
for,O
the,O
Insured,O
s,O
share,O
of,O
such,O
excess,O
loss,O
(,O
es,O
),O
",",O
but,O
in,O
no,O
event,O
for,O
more,O
than,O
the,O
Limit,O
of,O
Liability,O
applicable,O
hereunder,O
.,O
,O
For,O
the,O
purpose,O
of,O
determining,O
the,O
Insured,O
's,O
share,O
of,O
excess,O
loss,O
(,O
es,O
),O
it,O
shall,O
be,O
deemed,O
that,O
the,O
Insured,O
has,O
an,O
interest,O
in,O
any,O
certificate,O
representing,O
any,O
security,O
included,O
within,O
such,O
systems,O
equivalent,O
to,O
the,O
interest,O
the,O
Insured,O
then,O
has,O
in,O
all,O
certificates,O
representing,O
the,O
same,O
security,O
included,O
within,O
such,O
systems,O
and,O
that,O
such,O
Corporations,O
shall,O
use,O
their,O
best,O
judgement,O
in,O
apportioning,O
the,O
amount,O
(,O
s,O
),O
recoverable,O
or,O
recovered,O
under,O
any,O
bond,O
or,O
policy,O
of,O
insurance,O
indemnifying,O
such,O
Corporations,O
against,O
such,O
loss,O
(,O
es,O
),O
in,O
connection,O
with,O
the,O
central,O
handling,O
of,O
securities,O
within,O
such,O
systems,O
among,O
all,O
those,O
having,O
an,O
interest,O
as,O
recorded,O
by,O
appropriate,O
entries,O
in,O
the,O
books,O
and,O
records,O
of,O
such,O
Corporations,O
in,O
Property,O
involved,O
in,O
such,O
loss,O
(,O
es,O
),O
on,O
the,O
basis,O
that,O
each,O
such,O
interest,O
shall,O
share,O
in,O
the,O
amount,O
(,O
s,O
),O
so,O
recoverable,O
or,O
recovered,O
in,O
the,O
ratio,O
that,O
the,O
value,O
of,O
each,O
such,O
interest,O
bears,O
to,O
the,O
total,O
value,O
of,O
all,O
such,O
interests,O
and,O
that,O
the,O
Insured,O
s,O
share,O
of,O
such,O
excess,O
loss,O
(,O
es,O
),O
shall,O
be,O
the,O
amount,O
of,O
the,O
Insured,O
's,O
interest,O
in,O
such,O
Property,O
in,O
excess,O
of,O
the,O
amount,O
(,O
s,O
),O
so,O
apportioned,O
to,O
the,O
Insured,O
by,O
such,O
Corporations,O
.,O
,O
nominee,O
in,O
whose,O
name,O
is,O
registered,O
any,O
security,O
included,O
within,O
the,O
systems,O
for,O
the,O
central,O
handling,O
of,O
securities,O
established,O
and,O
maintained,O
by,O
such,O
Corporations,O
",",O
and,O
upon,O
payment,O
to,O
the,O
Insured,O
by,O
the,O
Underwriter,O
on,O
account,O
of,O
any,O
loss,O
(,O
es,O
),O
within,O
the,O
systems,O
",",O
an,O
assignment,O
of,O
such,O
of,O
the,O
Insured,O
s,O
rights,O
and,O
causes,O
of,O
action,O
as,O
it,O
may,O
have,O
against,O
such,O
Corporations,O
or,O
Exchanges,O
shall,O
to,O
the,O
extent,O
of,O
such,O
payment,O
",",O
be,O
given,O
by,O
the,O
Insured,O
to,O
the,O
Underwriter,O
",",O
and,O
the,O
Insured,O
shall,O
execute,O
all,O
papers,O
necessary,O
to,O
secure,O
to,O
the,O
Underwriter,O
the,O
rights,O
provided,O
for,O
herein,O
.,O
,O
ADDITIONAL,O
COMPANIES,O
INCLUDED,O
AS,O
INSURED,O
If,O
more,O
than,O
one,O
corporation,O
",",O
co-partnership,O
or,O
person,O
or,O
any,O
combination,O
of,O
them,O
be,O
included,O
as,O
the,O
Insured,O
herein,O
:,O
,O
NOTICE,O
AND,O
CHANGE,O
OF,O
CONTROL,O
Upon,O
the,O
Insured,O
s,O
obtaining,O
knowledge,O
of,O
a,O
transfer,O
of,O
its,O
outstanding,O
voting,O
securities,O
which,O
results,O
in,O
a,O
change,O
in,O
control,O
(,O
as,O
set,O
forth,O
in,O
Section,O
2,O
(,O
a,O
),O
(,O
9,O
),O
of,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
),O
of,O
the,O
Insured,O
",",O
the,O
Insured,O
shall,O
within,O
thirty,O
(,O
30,O
),O
days,O
of,O
such,O
knowledge,O
give,O
written,O
notice,O
to,O
the,O
Underwriter,O
setting,O
forth,O
:,O
,O
As,O
used,O
in,O
this,O
section,O
",",O
control,O
means,O
the,O
power,O
to,O
exercise,O
a,O
controlling,O
influence,O
over,O
the,O
management,O
or,O
policies,O
of,O
the,O
Insured,O
.,O
,O
Failure,O
to,O
give,O
the,O
required,O
notice,O
shall,O
result,O
in,O
termination,O
of,O
coverage,O
of,O
this,O
bond,O
",",O
effective,O
upon,O
the,O
date,O
of,O
stock,O
transfer,O
for,O
any,O
loss,O
in,O
which,O
any,O
transferee,O
is,O
concerned,O
or,O
implicated,O
.,O
,O
Such,O
notice,O
is,O
not,O
required,O
to,O
be,O
given,O
in,O
the,O
case,O
of,O
an,O
Insured,O
which,O
is,O
an,O
Investment,O
Company,O
.,O
,O
CHANGE,O
OR,O
MODIFICATION,O
This,O
bond,O
or,O
any,O
instrument,O
amending,O
or,O
effecting,O
same,O
may,O
not,O
be,O
changed,O
or,O
modified,O
orally,O
.,O
,O
No,O
changes,O
in,O
or,O
modification,O
thereof,O
shall,O
be,O
effective,O
unless,O
made,O
by,O
written,O
endorsement,O
issued,O
to,O
form,O
a,O
part,O
hereof,O
over,O
the,O
signature,O
of,O
the,O
Underwriter,O
s,O
Authorized,O
Representative,O
.,O
,O
Investment,O
Company,O
no,O
change,O
or,O
modification,O
which,O
would,O
adversely,O
affect,O
the,O
rights,O
of,O
the,O
Investment,O
Company,O
shall,O
be,O
effective,O
prior,O
to,O
60,O
days,O
after,O
written,O
notification,O
has,O
been,O
furnished,O
to,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
Washington,I-LOCATION
",",I-LOCATION
D.C,I-LOCATION
.,I-LOCATION
,O
by,O
the,O
Insured,O
or,O
by,O
the,O
Underwriter,O
.,O
,O
If,O
more,O
than,O
one,O
Investment,O
Company,O
is,O
named,O
as,O
the,O
Insured,O
herein,O
",",O
the,O
Underwriter,O
shall,O
give,O
written,O
notice,O
to,O
each,O
Investment,O
Company,O
and,O
to,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
Washington,I-LOCATION
",",I-LOCATION
D.C,I-LOCATION
.,I-LOCATION
,O
not,O
less,O
than,O
60,O
days,O
prior,O
to,O
the,O
effective,O
date,O
of,O
any,O
change,O
or,O
modification,O
which,O
would,O
adversely,O
affect,O
the,O
rights,O
of,O
such,O
Investment,O
Company,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
the,O
Underwriter,O
has,O
caused,O
this,O
bond,O
to,O
be,O
executed,O
on,O
the,O
Declarations,O
Page,O
.,O
,O
This,O
endorsement,O
",",O
effective,O
12:01,O
A.M.,O
December,O
15,O
",",O
2010,O
forms,O
a,O
part,O
of,O
policy,O
number,O
01-412-81-42,O
issued,O
to,O
METROPOLITAN,I-BUSINESS
SERIES,I-BUSINESS
FUND,I-BUSINESS
INC.,I-BUSINESS
.,O
,O
Wherever,O
used,O
in,O
this,O
endorsement,O
:,O
1,O
),O
Insurer,O
means,O
the,O
insurance,O
company,O
which,O
issued,O
this,O
policy,O
;,O
and,O
2,O
),O
Insured,O
means,O
the,O
Named,O
Corporation,O
",",O
Named,O
Organization,O
",",O
Named,O
Sponsor,O
",",O
Named,O
Insured,O
",",O
Named,O
Entity,O
or,O
Insured,O
stated,O
in,O
the,O
declarations,O
page,O
;,O
The,O
policy,O
is,O
hereby,O
amended,O
as,O
follows,O
:,O
,O
This,O
policy,O
may,O
be,O
cancelled,O
by,O
the,O
Insured,O
by,O
surrender,O
of,O
this,O
policy,O
to,O
the,O
Insurer,O
or,O
by,O
giving,O
written,O
notice,O
to,O
the,O
Insurer,O
stating,O
when,O
thereafter,O
such,O
cancellation,O
shall,O
be,O
effective,O
.,O
,O
The,O
Policy,O
Period,O
terminates,O
at,O
the,O
date,O
and,O
hour,O
specified,O
in,O
such,O
notice,O
",",O
or,O
at,O
the,O
date,O
and,O
time,O
of,O
surrender,O
.,O
,O
Notice,O
of,O
cancellation,O
by,O
the,O
Insurer,O
shall,O
specify,O
the,O
grounds,O
for,O
cancellation,O
.,O
,O
Notice,O
required,O
herein,O
to,O
be,O
mailed,O
by,O
the,O
Insurer,O
shall,O
be,O
sent,O
by,O
registered,O
",",O
certified,O
or,O
other,O
first,O
class,O
mail,O
.,O
,O
Delivery,O
of,O
written,O
notice,O
shall,O
be,O
equivalent,O
to,O
mailing,O
.,O
,O
Proof,O
of,O
mailing,O
of,O
such,O
notice,O
as,O
aforesaid,O
shall,O
be,O
sufficient,O
proof,O
of,O
notice,O
.,O
,O
The,O
Policy,O
Period,O
shall,O
terminate,O
at,O
the,O
effective,O
date,O
and,O
hour,O
of,O
cancellation,O
or,O
nonrenewal,O
specified,O
in,O
such,O
notice,O
.,O
,O
If,O
this,O
policy,O
shall,O
be,O
cancelled,O
by,O
the,O
Insurer,O
",",O
the,O
Insurer,O
shall,O
retain,O
the,O
pro,O
rata,O
proportion,O
of,O
the,O
premium,O
hereon,O
.,O
,O
Payment,O
or,O
tender,O
of,O
any,O
unearned,O
premium,O
by,O
the,O
Insurer,O
shall,O
not,O
be,O
a,O
condition,O
of,O
cancellation,O
",",O
but,O
such,O
payment,O
shall,O
be,O
made,O
as,O
soon,O
as,O
practicable,O
.,O
,O
ALL,O
OTHER,O
TERMS,O
",",O
CONDITIONS,O
AND,O
EXCLUSIONS,O
REMAIN,O
UNCHANGED,O
.,O
,O
This,O
endorsement,O
",",O
effective,O
12:01,O
A.M.,O
December,O
15,O
",",O
2010,O
forms,O
a,O
part,O
of,O
policy,O
number,O
01-412-81-42,O
issued,O
to,O
METROPOLITAN,I-BUSINESS
SERIES,I-BUSINESS
FUND,I-BUSINESS
INC.,I-BUSINESS
.,O
,O
It,O
is,O
agreed,O
that,O
:,O
,O
The,O
Underwriter,O
may,O
terminate,O
this,O
bond,O
as,O
an,O
entirety,O
by,O
furnishing,O
written,O
notice,O
specifying,O
the,O
termination,O
date,O
which,O
can,O
not,O
be,O
prior,O
to,O
90,O
days,O
after,O
the,O
receipt,O
of,O
such,O
written,O
notice,O
by,O
each,O
Investment,O
Company,O
named,O
as,O
Insured,O
and,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
Washington,I-LOCATION
",",I-LOCATION
D.C,I-LOCATION
.,I-LOCATION
,O
The,O
Insured,O
may,O
terminate,O
this,O
bond,O
as,O
an,O
entirety,O
by,O
furnishing,O
written,O
notice,O
to,O
the,O
Underwriter,O
.,O
,O
When,O
the,O
Insured,O
cancels,O
",",O
the,O
Insured,O
shall,O
furnish,O
written,O
notice,O
to,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
Washington,I-LOCATION
",",I-LOCATION
D.C,I-LOCATION
.,I-LOCATION
,O
prior,O
to,O
90,O
days,O
before,O
the,O
effective,O
date,O
of,O
the,O
termination,O
.,O
,O
The,O
Underwriter,O
shall,O
notify,O
all,O
other,O
Investment,O
Companies,O
named,O
as,O
Insured,O
of,O
the,O
receipt,O
of,O
such,O
termination,O
notice,O
and,O
the,O
termination,O
can,O
not,O
be,O
effective,O
prior,O
to,O
90,O
days,O
after,O
receipt,O
of,O
written,O
notice,O
by,O
all,O
other,O
Investment,O
Companies,O
.,O
,O
Premiums,O
are,O
earned,O
until,O
the,O
termination,O
date,O
as,O
set,O
forth,O
herein,O
.,O
,O
This,O
Bond,O
will,O
terminate,O
as,O
to,O
any,O
one,O
Insured,O
",",O
(,O
other,O
than,O
a,O
registered,O
management,O
investment,O
company,O
),O
",",O
immediately,O
upon,O
taking,O
over,O
of,O
such,O
Insured,O
by,O
a,O
receiver,O
or,O
other,O
liquidator,O
or,O
by,O
State,O
or,O
Federal,O
officials,O
",",O
or,O
immediately,O
upon,O
the,O
filing,O
of,O
a,O
petition,O
under,O
any,O
State,O
or,O
Federal,O
statute,O
relative,O
to,O
bankruptcy,O
or,O
reorganization,O
of,O
the,O
Insured,O
",",O
or,O
assignment,O
for,O
he,O
benefit,O
of,O
creditors,O
of,O
the,O
Insured,O
",",O
or,O
immediately,O
upon,O
such,O
Insured,O
ceasing,O
to,O
exist,O
",",O
whether,O
through,O
merger,O
into,O
another,O
entity,O
",",O
or,O
by,O
disposition,O
of,O
all,O
of,O
its,O
assets,O
.,O
,O
This,O
Bond,O
will,O
terminate,O
as,O
to,O
any,O
registered,O
management,O
investment,O
company,O
upon,O
the,O
expiration,O
of,O
90,O
days,O
after,O
written,O
notice,O
has,O
been,O
given,O
to,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
Washington,I-LOCATION
",",I-LOCATION
D.C,I-LOCATION
.,I-LOCATION
,O
The,O
Underwriter,O
shall,O
refund,O
the,O
unearned,O
premium,O
computed,O
at,O
short,O
rates,O
in,O
accordance,O
with,O
the,O
standard,O
short,O
rate,O
cancellation,O
tables,O
if,O
terminated,O
by,O
the,O
Insured,O
or,O
pro,O
rata,O
terminated,O
for,O
any,O
other,O
reason,O
.,O
,O
This,O
endorsement,O
",",O
effective,O
12:01,O
A.M.,O
December,O
15,O
",",O
2010,O
forms,O
a,O
part,O
of,O
policy,O
number,O
01-412-81-42,O
issued,O
to,O
METROPOLITAN,I-BUSINESS
SERIES,I-BUSINESS
FUND,I-BUSINESS
INC.,I-BUSINESS
.,O
,O
It,O
is,O
agreed,O
that,O
:,O
,O
Discovery,O
occurs,O
when,O
the,O
Director,O
of,O
Risk,O
Management,O
at,O
Metropolitan,I-BUSINESS
Series,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
which,O
would,O
cause,O
a,O
reasonable,O
person,O
to,O
assume,O
that,O
a,O
loss,O
covered,O
by,O
the,O
bond,O
has,O
been,O
or,O
will,O
be,O
incurred,O
even,O
though,O
the,O
exact,O
amount,O
or,O
details,O
of,O
loss,O
may,O
not,O
be,O
then,O
known,O
.,O
,O
This,O
endorsement,O
",",O
effective,O
12:01,O
A.M.,O
December,O
15,O
",",O
2010,O
forms,O
a,O
part,O
of,O
policy,O
number,O
01-412-81-42,O
issued,O
to,O
METROPOLITAN,I-BUSINESS
SERIES,I-BUSINESS
FUND,I-BUSINESS
INC.,I-BUSINESS
.,O
,O
It,O
is,O
agreed,O
that,O
:,O
,O
T.,I-BUSINESS
Rowe,I-BUSINESS
Price,I-BUSINESS
Large,I-BUSINESS
Cap,I-BUSINESS
Growth,I-BUSINESS
T.,B-BUSINESS
Rowe,I-BUSINESS
Price,I-BUSINESS
Small,I-BUSINESS
Cap,I-BUSINESS
Growth,I-BUSINESS
Van,B-BUSINESS
Eck,I-BUSINESS
Global,I-BUSINESS
Natural,I-BUSINESS
Resources,I-BUSINESS
Western,B-BUSINESS
Asset,I-BUSINESS
Management,I-BUSINESS
Strategic,I-BUSINESS
Bond,I-BUSINESS
Opportunities,I-BUSINESS
Western,B-BUSINESS
Asset,I-BUSINESS
Management,I-BUSINESS
U.S.,B-GOVERNMENT
Government,I-GOVERNMENT
MetLife,I-BUSINESS
Aggressive,I-BUSINESS
Allocation,I-BUSINESS
*,O
MetLife,I-BUSINESS
Conservative,I-BUSINESS
Allocation,I-BUSINESS
*,O
MetLife,I-BUSINESS
Conservative,I-BUSINESS
To,I-BUSINESS
Moderate,I-BUSINESS
Allocation,I-BUSINESS
*,O
MetLife,I-BUSINESS
Moderate,I-BUSINESS
Allocation,I-BUSINESS
*,O
MetLife,I-BUSINESS
Moderate,I-BUSINESS
To,I-BUSINESS
Aggressive,I-BUSINESS
Allocation,I-BUSINESS
*,O
Zenith,I-BUSINESS
Equity,I-BUSINESS
*,O
,O
This,O
endorsement,O
",",O
effective,O
12:01,O
A.M.,O
December,O
15,O
",",O
2010,O
forms,O
a,O
part,O
of,O
policy,O
number,O
01-412-81-42,O
issued,O
to,O
METROPOLITAN,I-BUSINESS
SERIES,I-BUSINESS
FUND,I-BUSINESS
INC.,I-BUSINESS
.,O
,O
In,O
consideration,O
of,O
the,O
premium,O
charged,O
",",O
it,O
is,O
hereby,O
understood,O
and,O
agreed,O
that,O
bond,O
is,O
hereby,O
amended,O
as,O
follows,O
:,O
,O
Telefacsimile,O
Transfer,O
Fraud,O
Under,O
the,O
terms,O
of,O
the,O
Telefacsimile,O
Transfer,O
Fraud,O
Insuring,O
Agreement,O
",",O
the,O
Insured,O
must,O
place,O
a,O
Verification,O
call-back,O
for,O
each,O
transfer,O
in,O
excess,O
of,O
$,O
"50,000",O
.,O
,O
any,O
Computer,O
System,O
operated,O
by,O
the,O
Insured,O
",",O
whether,O
owned,O
or,O
leased,O
;,O
or,O
any,O
Computer,O
System,O
identified,O
in,O
the,O
application,O
for,O
this,O
bond,O
;,O
or,O
a,O
Computer,O
System,O
first,O
used,O
by,O
the,O
Insured,O
during,O
the,O
bond,O
period,O
;,O
as,O
provided,O
by,O
General,O
Agreement,O
B,O
;,O
provided,O
the,O
entry,O
or,O
change,O
causes,O
:,O
,O
In,O
this,O
Insuring,O
Agreement,O
",",O
fraudulent,O
entry,O
or,O
change,O
shall,O
include,O
such,O
entry,O
or,O
change,O
made,O
by,O
an,O
Employee,O
of,O
the,O
Insured,O
acting,O
in,O
good,O
faith,O
:,O
,O
and,O
for,O
which,O
loss,O
the,O
Insured,O
is,O
legally,O
liable,O
to,O
the,O
Client,O
as,O
a,O
provider,O
of,O
data,O
processing,O
services,O
for,O
such,O
Client,O
.,O
,O
In,O
this,O
Insuring,O
Agreement,O
",",O
fraudulent,O
entry,O
or,O
change,O
shall,O
include,O
such,O
entry,O
or,O
change,O
made,O
by,O
an,O
Employee,O
of,O
the,O
Insured,O
acting,O
in,O
good,O
faith,O
:,O
,O
In,O
this,O
Insuring,O
Agreement,O
",",O
Client,O
means,O
an,O
entity,O
for,O
which,O
the,O
Insured,O
serves,O
as,O
data,O
processor,O
under,O
the,O
terms,O
of,O
a,O
written,O
agreement,O
.,O
,O
and,O
was,O
received,O
by,O
an,O
Employee,O
of,O
the,O
Insured,O
specifically,O
designated,O
to,O
receive,O
and,O
act,O
upon,O
such,O
instructions,O
",",O
but,O
the,O
voice,O
instruction,O
was,O
not,O
from,O
a,O
person,O
described,O
in,O
(,O
1,O
),O
",",O
(,O
2,O
),O
or,O
(,O
3,O
),O
above,O
",",O
provided,O
that,O
:,O
,O
As,O
used,O
in,O
this,O
Insuring,O
Agreement,O
",",O
Customer,O
means,O
an,O
entity,O
or,O
individual,O
which,O
has,O
a,O
written,O
agreement,O
with,O
the,O
Insured,O
authorizing,O
the,O
Insured,O
to,O
rely,O
on,O
voice,O
instructions,O
to,O
initiate,O
transfers,O
and,O
has,O
provided,O
the,O
Insured,O
with,O
the,O
names,O
of,O
persons,O
authorized,O
to,O
initiate,O
such,O
transfers,O
",",O
and,O
with,O
which,O
the,O
Insured,O
has,O
established,O
an,O
instruction,O
verification,O
mechanism,O
.,O
,O
provided,O
that,O
",",O
if,O
the,O
transfer,O
was,O
in,O
excess,O
of,O
the,O
amount,O
shown,O
on,O
the,O
Declarations,O
as,O
the,O
verification,O
call-back,O
amount,O
for,O
this,O
Insuring,O
Agreement,O
",",O
the,O
instructions,O
was,O
verified,O
by,O
a,O
call-back,O
according,O
to,O
a,O
prearranged,O
procedure,O
.,O
,O
As,O
used,O
in,O
this,O
Insuring,O
Agreement,O
",",O
Customer,O
means,O
an,O
entity,O
or,O
individual,O
which,O
has,O
a,O
written,O
agreement,O
with,O
the,O
Insured,O
authorizing,O
the,O
Insured,O
to,O
rely,O
on,O
Telefacsimile,O
Device,O
instructions,O
to,O
initiate,O
transfers,O
and,O
has,O
provided,O
the,O
Insured,O
with,O
the,O
names,O
of,O
persons,O
authorized,O
to,O
initiate,O
such,O
transfers,O
",",O
and,O
with,O
which,O
the,O
Insured,O
has,O
established,O
an,O
instruction,O
verification,O
mechanism,O
.,O
,O
The,O
liability,O
of,O
the,O
Company,O
shall,O
be,O
limited,O
to,O
the,O
cost,O
of,O
duplication,O
of,O
such,O
Electronic,O
Data,O
or,O
Computer,O
Programs,O
from,O
other,O
Electronic,O
Data,O
or,O
Computer,O
Programs,O
which,O
shall,O
have,O
been,O
furnished,O
by,O
the,O
Insured,O
.,O
,O
In,O
the,O
event,O
",",O
however,O
",",O
that,O
destroyed,O
or,O
damaged,O
Computer,O
Programs,O
can,O
not,O
be,O
duplicated,O
from,O
other,O
Computer,O
Programs,O
",",O
the,O
Company,O
will,O
pay,O
the,O
cost,O
incurred,O
for,O
computer,O
time,O
",",O
computer,O
programmers,O
",",O
consultants,O
or,O
other,O
technical,O
specialists,O
as,O
is,O
reasonable,O
necessary,O
to,O
restore,O
the,O
Computer,O
Programs,O
to,O
substantially,O
the,O
previous,O
level,O
of,O
operational,O
capability,O
.,O
,O
The,O
liability,O
of,O
the,O
Company,O
shall,O
be,O
limited,O
to,O
the,O
cost,O
of,O
duplication,O
of,O
such,O
Electronic,O
Data,O
or,O
Computer,O
Programs,O
from,O
other,O
Electronic,O
Data,O
or,O
Computer,O
Programs,O
which,O
shall,O
have,O
been,O
furnished,O
by,O
the,O
Insured,O
.,O
,O
In,O
the,O
event,O
",",O
however,O
",",O
that,O
destroyed,O
or,O
damaged,O
Computer,O
Programs,O
can,O
not,O
be,O
duplicated,O
from,O
other,O
Computer,O
Programs,O
",",O
the,O
Company,O
will,O
pay,O
the,O
cost,O
incurred,O
for,O
computer,O
time,O
",",O
computer,O
programmers,O
",",O
consultants,O
or,O
other,O
technical,O
specialists,O
as,O
is,O
reasonably,O
necessary,O
to,O
restore,O
the,O
Computer,O
Programs,O
to,O
substantially,O
the,O
previous,O
level,O
of,O
operational,O
capability,O
.,O
,O
Special,O
Condition,O
:,O
Under,O
this,O
Insuring,O
Agreement,O
",",O
Single,O
Loss,O
means,O
all,O
covered,O
costs,O
incurred,O
by,O
the,O
Insured,O
between,O
the,O
time,O
destruction,O
or,O
damage,O
is,O
discovered,O
and,O
the,O
time,O
the,O
Computer,O
System,O
is,O
restored,O
to,O
substantially,O
the,O
previous,O
level,O
of,O
operational,O
capability,O
.,O
,O
Recurrence,O
of,O
destruction,O
or,O
damage,O
after,O
the,O
Computer,O
System,O
is,O
restored,O
shall,O
constitute,O
a,O
separate,O
Single,O
Loss,O
.,O
,O
Special,O
Condition,O
:,O
Under,O
this,O
Insuring,O
Agreement,O
",",O
Single,O
Loss,O
means,O
loss,O
resulting,O
from,O
toll,O
call,O
charges,O
made,O
only,O
on,O
telephone,O
lines,O
directly,O
controlled,O
by,O
one,O
Voice,O
Computer,O
System,O
and,O
only,O
toll,O
call,O
charges,O
occurring,O
for,O
a,O
period,O
of,O
not,O
more,O
than,O
30,O
days,O
inclusive,O
of,O
the,O
date,O
on,O
which,O
the,O
first,O
such,O
toll,O
call,O
charge,O
was,O
made,O
.,O
,O
If,O
the,O
Insured,O
shall,O
",",O
while,O
this,O
bond,O
is,O
in,O
force,O
",",O
consolidate,O
or,O
merge,O
with,O
",",O
or,O
purchase,O
or,O
acquire,O
assets,O
or,O
liabilities,O
or,O
computer,O
systems,O
of,O
",",O
another,O
institution,O
",",O
the,O
Insured,O
shall,O
not,O
have,O
such,O
coverage,O
as,O
is,O
afforded,O
under,O
this,O
bond,O
for,O
loss,O
which,O
:,O
,O
by,O
which,O
Electronic,O
Data,O
are,O
electronically,O
collected,O
",",O
transmitted,O
",",O
processed,O
",",O
stored,O
and,O
retrieved,O
;,O
,O
unless,O
the,O
instructions,O
or,O
advices,O
are,O
Tested,O
and,O
the,O
loss,O
is,O
covered,O
under,O
the,O
COMPUTER,I-MISCELLANEOUS
SYSTEMS,I-MISCELLANEOUS
FRAUD,I-MISCELLANEOUS
or,I-MISCELLANEOUS
DATA,I-MISCELLANEOUS
PROCESSING,I-MISCELLANEOUS
SERVICE,I-MISCELLANEOUS
OPERATIONS,I-MISCELLANEOUS
Insuring,O
Agreements,O
;,O
,O
ALL,O
OTHER,O
TERMS,O
",",O
CONDITIONS,O
AND,O
EXCLUSIONS,O
REMAIN,O
UNCHANGED,O
.,O
,O
This,O
endorsement,O
",",O
effective,O
12:01,O
A.M.,O
December,O
15,O
",",O
2010,O
forms,O
a,O
part,O
of,O
policy,O
number,O
01-412-81-42,O
issued,O
to,O
METROPOLITAN,I-BUSINESS
SERIES,I-BUSINESS
FUND,I-BUSINESS
INC.,I-BUSINESS
.,O
,O
In,O
consideration,O
of,O
the,O
premium,O
charged,O
",",O
it,O
is,O
hereby,O
understood,O
and,O
agreed,O
as,O
follows,O
:,O
,O
c-claim,O
@,O
chartisinsurance.com,O
Your,O
email,O
must,O
reference,O
the,O
policy,O
number,O
for,O
this,O
policy,O
.,O
,O
The,O
date,O
of,O
the,O
Insurer,O
s,O
receipt,O
of,O
the,O
emailed,O
notice,O
shall,O
constitute,O
the,O
date,O
of,O
notice,O
.,O
,O
In,O
addition,O
to,O
Notice,O
of,O
Claim,O
Reporting,O
via,O
email,O
",",O
notice,O
may,O
also,O
be,O
given,O
to,O
the,O
Insurer,O
by,O
mailing,O
such,O
notice,O
to,O
:,O
Chartis,I-BUSINESS
",",O
Financil,O
Lines,O
Claims,O
",",O
P.O,O
.,O
,O
Box,O
25947,O
",",O
Shawnee,I-LOCATION
Mission,I-LOCATION
",",O
KS,I-LOCATION
66235,O
or,O
faxing,O
such,O
notice,O
to,O
(,O
866,O
),O
227-1750,O
.,O
,O
ALL,O
OTHER,O
TERMS,O
",",O
CONDITIONS,O
AND,O
EXCLUSIONS,O
REMAIN,O
UNCHANGED,O
.,O
,O
This,O
endorsement,O
",",O
effective,O
12:01,O
A.M.,O
December,O
15,O
",",O
2010,O
forms,O
a,O
part,O
of,O
policy,O
number,O
01-412-81-42,O
issued,O
to,O
METROPOLITAN,I-BUSINESS
SERIES,I-BUSINESS
FUND,I-BUSINESS
INC.,I-BUSINESS
.,O
,O
It,O
is,O
agreed,O
that,O
:,O
,O
This,O
endorsement,O
",",O
effective,O
12:01,O
A.M.,O
December,O
15,O
",",O
2010,O
forms,O
a,O
part,O
of,O
policy,O
number,O
01-412-81-42,O
issued,O
to,O
METROPOLITAN,I-BUSINESS
SERIES,I-BUSINESS
FUND,I-BUSINESS
INC.,I-BUSINESS
.,O
,O
In,O
consideration,O
of,O
the,O
premium,O
charged,O
",",O
it,O
is,O
hereby,O
understood,O
and,O
agreed,O
that,O
the,O
bond,O
is,O
amended,O
by,O
adding,O
Insuring,O
Agreement,O
(,O
),O
to,O
the,O
bond,O
as,O
follows,O
:,O
,O
Solely,O
for,O
the,O
purpose,O
of,O
the,O
coverage,O
afforded,O
by,O
this,O
rider,O
",",O
Section,O
2,O
.,O
,O
EXCLUSIONS,O
",",O
paragraph,O
(,O
k,O
),O
is,O
hereby,O
deleted,O
in,O
its,O
entirety,O
.,O
,O
ALL,O
OTHER,O
TERMS,O
",",O
CONDITIONS,O
AND,O
EXCLUSIONS,O
REMAIN,O
UNCHANGED,O
.,O
,O
This,O
endorsement,O
",",O
effective,O
12:01,O
A.M.,O
December,O
15,O
",",O
2010,O
forms,O
a,O
part,O
of,O
policy,O
number,O
01-412-81-42,O
issued,O
to,O
METROPOLITAN,I-BUSINESS
SERIES,I-BUSINESS
FUND,I-BUSINESS
INC.,I-BUSINESS
.,O
,O
It,O
is,O
agreed,O
that,O
:,O
,O
Notwithstanding,O
the,O
foregoing,O
",",O
if,O
the,O
Insured,O
shall,O
",",O
while,O
this,O
bond,O
is,O
in,O
force,O
",",O
consolidate,O
or,O
merge,O
with,O
",",O
or,O
purchase,O
or,O
acquire,O
assets,O
or,O
liabilities,O
of,O
",",O
another,O
institution,O
",",O
the,O
Insured,O
shall,O
automatically,O
have,O
such,O
coverage,O
as,O
is,O
afforded,O
under,O
this,O
bond,O
for,O
loss,O
without,O
an,O
additional,O
premium,O
charge,O
for,O
the,O
remainder,O
of,O
the,O
current,O
bond,O
period,O
provided,O
that,O
:,O
,O
This,O
endorsement,O
",",O
effective,O
12:01,O
A.M.,O
December,O
15,O
",",O
2010,O
forms,O
a,O
part,O
of,O
policy,O
number,O
01-412-81-42,O
issued,O
to,O
METROPOLITAN,I-BUSINESS
SERIES,I-BUSINESS
FUND,I-BUSINESS
INC.,I-BUSINESS
.,O
,O
It,O
is,O
agreed,O
that,O
:,O
,O
This,O
endorsement,O
",",O
effective,O
12:01,O
A.M.,O
December,O
15,O
",",O
2010,O
forms,O
a,O
part,O
of,O
policy,O
number,O
01-412-81-42,O
issued,O
to,O
METROPOLITAN,I-BUSINESS
SERIES,I-BUSINESS
FUND,I-BUSINESS
INC.,I-BUSINESS
.,O
,O
Wherever,O
used,O
herein,O
:,O
(,O
1,O
),O
Policy,O
means,O
the,O
policy,O
or,O
bond,O
to,O
which,O
this,O
endorsement,O
or,O
rider,O
is,O
made,O
part,O
of,O
;,O
(,O
2,O
),O
Insurer,O
means,O
the,O
Insurer,O
",",O
Underwriter,O
",",O
Company,O
or,O
other,O
name,O
specifically,O
ascribed,O
in,O
this,O
Policy,O
as,O
the,O
insurance,O
company,O
or,O
underwriter,O
for,O
this,O
Policy,O
;,O
(,O
3,O
),O
Company,O
means,O
the,O
Named,O
Entity,O
",",O
Named,O
Corporation,O
",",O
Named,O
Organization,O
",",O
Named,O
Sponsor,O
",",O
Named,O
Insured,O
",",O
First,O
Named,O
Insured,O
",",O
Insured,O
s,O
Representative,O
",",O
Policyholder,O
or,O
equivalent,O
term,O
stated,O
in,O
Item,O
1,O
of,O
the,O
Declarations,O
;,O
and,O
(,O
4,O
),O
Period,O
means,O
the,O
Policy,O
Period,O
",",O
Bond,O
Period,O
or,O
equivalent,O
term,O
stated,O
in,O
the,O
Declarations,O
.,O
,O
In,O
consideration,O
of,O
the,O
premium,O
charged,O
",",O
it,O
is,O
hereby,O
understood,O
and,O
agreed,O
that,O
notwithstanding,O
anything,O
to,O
the,O
contrary,O
in,O
any,O
CANCELLATION,O
or,O
TERMINATION,O
clause,O
of,O
this,O
Policy,O
(,O
and,O
any,O
endorsement,O
or,O
rider,O
amending,O
such,O
cancellation,O
or,O
termination,O
clause,O
",",O
including,O
but,O
not,O
limited,O
to,O
any,O
state,O
cancellation/non-renewal,O
amendatory,O
attached,O
to,O
this,O
policy,O
),O
",",O
if,O
this,O
Policy,O
shall,O
be,O
canceled,O
by,O
the,O
Company,O
",",O
the,O
Insurer,O
shall,O
return,O
to,O
the,O
Company,O
the,O
unearned,O
pro,O
rata,O
proportion,O
of,O
the,O
premium,O
as,O
of,O
the,O
effective,O
date,O
of,O
cancellation,O
.,O
,O
ALL,O
OTHER,O
TERMS,O
",",O
CONDITIONS,O
AND,O
EXCLUSIONS,O
REMAIN,O
UNCHANGED,O
.,O
,O
This,O
endorsement,O
",",O
effective,O
12:01,O
A.M.,O
December,O
15,O
",",O
2010,O
forms,O
a,O
part,O
of,O
policy,O
number,O
01-412-81-42,O
issued,O
to,O
METROPOLITAN,I-BUSINESS
SERIES,I-BUSINESS
FUND,I-BUSINESS
INC.,I-BUSINESS
.,O
,O
In,O
consideration,O
of,O
the,O
turn,O
premium,O
charged,O
",",O
it,O
is,O
hereby,O
understood,O
and,O
agreed,O
that,O
INSURING,O
AGREEMENT,O
(,O
A,O
),O
FIDELITY,O
of,O
this,O
bond,O
is,O
deleted,O
in,O
its,O
entirety,O
and,O
replaced,O
with,O
the,O
following,O
:,O
,O
Loss,O
resulting,O
from,O
any,O
dishonest,O
or,O
fraudulent,O
act,O
(,O
s,O
),O
",",O
including,O
Larceny,O
or,O
Embezzlement,O
committed,O
by,O
an,O
Employee,O
",",O
committed,O
anywhere,O
and,O
whether,O
committed,O
alone,O
or,O
in,O
collusion,O
with,O
others,O
",",O
including,O
loss,O
of,O
Property,O
resulting,O
from,O
such,O
acts,O
of,O
an,O
Employee,O
",",O
which,O
Property,O
is,O
held,O
by,O
the,O
Insured,O
for,O
any,O
purpose,O
or,O
in,O
any,O
capacity,O
and,O
whether,O
so,O
held,O
gratuitously,O
or,O
not,O
and,O
whether,O
or,O
not,O
the,O
Insured,O
is,O
liable,O
therefor,O
.,O
,O
Dishonest,O
or,O
fraudulent,O
act,O
(,O
s,O
),O
as,O
used,O
in,O
this,O
Insuring,O
Agreement,O
shall,O
mean,O
only,O
dishonest,O
or,O
fraudulent,O
act,O
(,O
s,O
),O
committed,O
by,O
such,O
Employee,O
with,O
the,O
manifest,O
intent,O
:,O
,O
Nothing,O
herein,O
shall,O
be,O
held,O
to,O
vary,O
",",O
alter,O
",",O
waive,O
or,O
extend,O
any,O
of,O
the,O
terms,O
",",O
limitations,O
",",O
conditions,O
or,O
provisions,O
of,O
the,O
attached,O
bond,O
other,O
than,O
as,O
above,O
stated,O
.,O
,O
This,O
endorsement,O
",",O
effective,O
12:01,O
A.M.,O
December,O
15,O
",",O
2010,O
forms,O
a,O
part,O
of,O
policy,O
number,O
01-412-81-42,O
issued,O
to,O
METROPOLITAN,I-BUSINESS
SERIES,I-BUSINESS
FUND,I-BUSINESS
INC.,I-BUSINESS
.,O
,O
Payment,O
of,O
loss,O
under,O
this,O
policy,O
shall,O
only,O
be,O
made,O
in,O
full,O
compliance,O
with,O
all,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
economic,O
or,O
trade,O
sanction,O
laws,O
or,O
regulations,O
",",O
including,O
",",O
but,O
not,O
limited,O
to,O
",",O
sanctions,O
",",O
laws,O
and,O
regulations,O
administered,O
and,O
enforced,O
by,O
the,O
U.S.,I-GOVERNMENT
Treasury,I-GOVERNMENT
Department,I-GOVERNMENT
s,I-GOVERNMENT
Office,I-GOVERNMENT
of,I-GOVERNMENT
Foreign,I-GOVERNMENT
Assets,I-GOVERNMENT
Control,I-GOVERNMENT
(,O
OFAC,I-GOVERNMENT
),O
.,O
,O
This,O
endorsement,O
",",O
effective,O
12:01,O
A.M.,O
December,O
15,O
",",O
2010,O
forms,O
a,O
part,O
of,O
policy,O
number,O
01-412-81-42,O
issued,O
to,O
METROPOLITAN,I-BUSINESS
SERIES,I-BUSINESS
FUND,I-BUSINESS
INC.,I-BUSINESS
.,O
,O
The,O
contents,O
of,O
the,O
Policy,O
is,O
comprised,O
of,O
the,O
following,O
forms,O
:,O
,O
ALL,O
OTHER,O
TERMS,O
",",O
CONDITIONS,O
AND,O
EXCLUSIONS,O
REMAIN,O
UNCHANGED,O
.,O
,O
The,O
undersigned,O
",",O
Assistant,O
Secretary,O
of,O
the,O
Metropolitan,I-BUSINESS
Series,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
Fund,O
),O
",",O
hereby,O
certifies,O
that,O
the,O
following,O
is,O
a,O
true,O
copy,O
of,O
the,O
form,O
of,O
resolution,O
adopted,O
by,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Fund,O
at,O
the,O
Board,O
of,O
Directors,O
Meeting,O
held,O
November,O
16,O
and,O
17,O
",",O
2010,O
:,O
,O
IN,O
WITNESS,O
HEREOF,O
",",O
I,O
hereunto,O
set,O
my,O
hand,O
as,O
of,O
this,O
7th,O
day,O
of,O
April,O
",",O
2011,O
.,O
,O
-DOCSTART-,O
,O
424,O
(,O
b,O
),O
(,O
3,O
),O
Filed,O
Pursuant,O
to,O
Rule,O
424,O
(,O
b,O
),O
(,O
3,O
),O
and,O
Rule,O
424,O
(,O
c,O
),O
Registration,O
No.,O
.,O
,O
333-149116,O
June,O
8,O
",",O
2011,O
This,O
prospectus,O
supplement,O
amends,O
the,O
prospectus,O
dated,O
March,O
16,O
",",O
2009,O
(,O
as,O
supplemented,O
on,O
April,O
15,O
",",O
2009,O
",",O
April,O
17,O
",",O
2009,O
",",O
April,O
22,O
",",O
2009,O
",",O
April,O
27,O
",",O
2009,O
",",O
May,O
4,O
",",O
2009,O
",",O
May,O
11,O
",",O
2009,O
",",O
May,O
27,O
",",O
2009,O
",",O
June,O
4,O
",",O
2009,O
",",O
June,O
8,O
",",O
2009,O
",",O
June,O
9,O
",",O
2009,O
",",O
June,O
11,O
",",O
2009,O
",",O
June,O
15,O
",",O
2009,O
",",O
July,O
7,O
",",O
2009,O
",",O
July,O
15,O
",",O
2009,O
",",O
August,O
3,O
",",O
2009,O
",",O
August,O
5,O
",",O
2009,O
",",O
September,O
11,O
",",O
2009,O
",",O
September,O
18,O
",",O
2009,O
",",O
November,O
12,O
",",O
2009,O
",",O
January,O
5,O
",",O
2010,O
",",O
March,O
1,O
",",O
2010,O
",",O
March,O
25,O
",",O
2010,O
",",O
April,O
26,O
",",O
2010,O
",",O
May,O
11,O
",",O
2010,O
",",O
May,O
18,O
",",O
2010,O
",",O
July,O
23,O
",",O
2010,O
",",O
August,O
9,O
",",O
2010,O
",",O
August,O
25,O
",",O
2010,O
",",O
November,O
3,O
",",O
2010,O
",",O
November,O
10,O
",",O
2010,O
",",O
December,O
30,O
",",O
2010,O
",",O
January,O
7,O
",",O
2011,O
",",O
January,O
14,O
",",O
2011,O
",",O
January,O
28,O
",",O
2011,O
",",O
March,O
1,O
",",O
2011,O
",",O
March,O
8,O
",",O
2011,O
",",O
March,O
18,O
",",O
2011,O
",",O
April,O
18,O
",",O
2011,O
",",O
May,O
5,O
",",O
2011,O
",",O
and,O
May,O
9,O
",",O
2011,O
),O
to,O
allow,O
certain,O
stockholders,O
or,O
their,O
pledgees,O
",",O
donees,O
",",O
transferees,O
",",O
or,O
other,O
successors,O
in,O
interest,O
(,O
the,O
Selling,O
Stockholders,O
),O
",",O
to,O
sell,O
",",O
from,O
time,O
to,O
time,O
",",O
up,O
to,O
"8,708,717",O
shares,O
of,O
our,O
common,O
stock,O
",",O
which,O
they,O
have,O
acquired,O
in,O
a,O
private,O
placement,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
and,O
up,O
to,O
"8,708,717",O
shares,O
of,O
our,O
common,O
stock,O
issuable,O
upon,O
the,O
exercise,O
of,O
warrants,O
which,O
are,O
held,O
by,O
the,O
Selling,O
Stockholders,O
named,O
in,O
the,O
prospectus,O
.,O
,O
On,O
January,O
9,O
",",O
2010,O
",",O
these,O
warrants,O
expired,O
unexercised,O
.,O
,O
We,O
would,O
not,O
receive,O
any,O
proceeds,O
from,O
any,O
such,O
sale,O
of,O
these,O
shares,O
.,O
,O
To,O
the,O
extent,O
any,O
of,O
the,O
warrants,O
are,O
exercised,O
for,O
cash,O
",",O
if,O
at,O
all,O
",",O
we,O
will,O
receive,O
the,O
exercise,O
price,O
for,O
those,O
warrants,O
.,O
,O
This,O
prospectus,O
supplement,O
is,O
being,O
filed,O
to,O
include,O
the,O
information,O
set,O
forth,O
in,O
the,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filed,O
on,O
June,O
6,O
",",O
2011,O
",",O
which,O
is,O
set,O
forth,O
below,O
.,O
,O
This,O
prospectus,O
supplement,O
should,O
be,O
read,O
in,O
conjunction,O
with,O
the,O
prospectus,O
dated,O
March,O
16,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
1,O
dated,O
April,O
15,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
2,O
dated,O
April,O
17,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
3,O
dated,O
April,O
22,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
4,O
dated,O
April,O
27,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
,O
5,O
dated,O
May,O
4,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
.,O
,O
6,O
dated,O
May,O
11,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
7,O
dated,O
May,O
27,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
8,O
dated,O
June,O
4,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
9,O
dated,O
June,O
8,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
10,O
dated,O
June,O
9,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
11,O
dated,O
June,O
11,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
12,O
dated,O
June,O
15,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
13,O
dated,O
July,O
7,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
14,O
dated,O
July,O
15,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
15,O
dated,O
August,O
3,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
16,O
dated,O
August,O
5,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
17,O
dated,O
September,O
11,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
18,O
dated,O
September,O
18,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
19,O
dated,O
November,O
12,O
",",O
2009,O
",",O
Prospectus,O
Supplement,O
No.,O
20,O
dated,O
January,O
5,O
",",O
2010,O
",",O
Prospectus,O
Supplement,O
No.,O
21,O
dated,O
March,O
1,O
",",O
2010,O
",",O
Prospectus,O
Supplement,O
No.,O
23,O
dated,O
March,O
25,O
",",O
2010,O
",",O
Prospectus,O
Supplement,O
No.,O
24,O
dated,O
April,O
26,O
",",O
2010,O
",",O
Prospectus,O
Supplement,O
No.,O
25,O
dated,O
May,O
11,O
",",O
2010,O
",",O
Prospectus,O
Supplement,O
No.,O
26,O
dated,O
May,O
18,O
",",O
2010,O
",",O
Prospectus,O
Supplement,O
No.,O
27,O
dated,O
July,O
23,O
",",O
2010,O
",",O
Prospectus,O
Supplement,O
No.,O
28,O
dated,O
August,O
9,O
",",O
2010,O
",",O
Prospectus,O
Supplement,O
No.,O
29,O
dated,O
August,O
25,O
",",O
2010,O
",",O
Prospectus,O
Supplement,O
No.,O
30,O
dated,O
November,O
3,O
",",O
2010,O
",",O
Prospectus,O
Supplement,O
No.,O
31,O
dated,O
November,O
10,O
",",O
2010,O
",",O
Prospectus,O
Supplement,O
No.,O
32,O
dated,O
December,O
30,O
",",O
2010,O
",",O
Prospectus,O
Supplement,O
No.,O
33,O
dated,O
January,O
7,O
",",O
2011,O
",",O
Prospectus,O
Supplement,O
No.,O
34,O
dated,O
January,O
14,O
",",O
2011,O
",",O
Prospectus,O
Supplement,O
No.,O
35,O
dated,O
January,O
28,O
",",O
2011,O
",",O
Prospectus,O
Supplement,O
No.,O
36,O
dated,O
March,O
1,O
",",O
2011,O
",",O
Prospectus,O
Supplement,O
No.,O
37,O
dated,O
March,O
8,O
",",O
2011,O
",",O
Prospectus,O
Supplement,O
No.,O
38,O
dated,O
March,O
18,O
",",O
2011,O
",",O
Prospectus,O
Supplement,O
No.,O
39,O
dated,O
April,O
18,O
",",O
2011,O
",",O
Prospectus,O
Supplement,O
No.,O
40,O
dated,O
May,O
5,O
",",O
2011,O
",",O
and,O
Prospectus,O
Supplement,O
No.,O
41,O
dated,O
May,O
9,O
",",O
2011,O
which,O
are,O
to,O
be,O
delivered,O
with,O
this,O
prospectus,O
supplement,O
.,O
,O
Our,O
common,O
stock,O
is,O
quoted,O
on,O
The,I-MISCELLANEOUS
NASDAQ,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
(,O
NASDAQ,I-BUSINESS
),O
under,O
the,O
ticker,O
symbol,O
AGEN,I-BUSINESS
.,O
,O
On,O
June,O
7,O
",",O
2011,O
",",O
the,O
last,O
reported,O
closing,O
price,O
per,O
share,O
of,O
our,O
common,O
stock,O
was,O
$,O
0.86,O
per,O
share,O
.,O
,O
Investing,O
in,O
our,O
securities,O
involves,O
a,O
high,O
degree,O
of,O
risk,O
.,O
,O
Before,O
investing,O
in,O
any,O
of,O
our,O
securities,O
",",O
you,O
should,O
read,O
the,O
discussion,O
of,O
material,O
risks,O
in,O
investing,O
in,O
our,O
common,O
stock,O
.,O
,O
See,O
Risk,O
Factors,O
on,O
page,O
1,O
of,O
the,O
prospectus,O
.,O
,O
Neither,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
nor,O
any,O
state,O
securities,O
commission,O
has,O
approved,O
or,O
disapproved,O
of,O
these,O
securities,O
or,O
passed,O
upon,O
the,O
adequacy,O
or,O
accuracy,O
of,O
this,O
prospectus,O
.,O
,O
Any,O
representation,O
to,O
the,O
contrary,O
is,O
a,O
criminal,O
offense,O
.,O
,O
Check,O
the,O
appropriate,O
box,O
below,O
if,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filing,O
is,O
intended,O
to,O
simultaneously,O
satisfy,O
the,O
filing,O
obligation,O
of,O
the,O
registrant,O
under,O
any,O
of,O
the,O
following,O
provisions,O
(,O
see,O
General,O
Instruction,O
A.2,O
.,O
,O
On,O
June,O
6,O
",",O
2011,O
",",O
Agenus,I-BUSINESS
Inc.,I-BUSINESS
announced,O
results,O
from,O
a,O
Phase,O
2,O
clinical,O
trial,O
testing,O
the,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
G-200,I-MISCELLANEOUS
vaccine,O
(,O
HSPPC-96,I-MISCELLANEOUS
;,O
vitespen,I-MISCELLANEOUS
),O
in,O
deadly,O
recurrent,O
brain,O
cancer,O
—,O
glioblastoma,I-MISCELLANEOUS
multiforme,I-MISCELLANEOUS
—,O
in,O
a,O
poster,O
presentation,O
at,O
the,O
47th,O
Annual,O
Meeting,O
of,O
the,O
American,I-BUSINESS
Society,I-BUSINESS
of,I-BUSINESS
Clinical,I-BUSINESS
Oncology,I-BUSINESS
in,O
Chicago,I-LOCATION
",",O
Illinois,I-LOCATION
.,O
,O
Results,O
from,O
this,O
trial,O
showed,O
that,O
93,O
%,O
of,O
the,O
patients,O
were,O
alive,O
at,O
26,O
weeks,O
after,O
surgery,O
and,O
a,O
median,O
overall,O
survival,O
of,O
11,O
months,O
(,O
47.6,O
weeks,O
),O
.,O
,O
Results,O
from,O
pre-defined,O
exploratory,O
analyses,O
of,O
disease,O
progression,O
showed,O
a,O
median,O
progression,O
free,O
survival,O
of,O
approximately,O
5,O
months,O
(,O
20,O
weeks,O
),O
.,O
,O
Importantly,O
",",O
measures,O
of,O
immune,O
response,O
post,O
vaccination,O
with,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
G-200,I-MISCELLANEOUS
demonstrated,O
a,O
significant,O
tumor-specific,O
CD8+,I-MISCELLANEOUS
T-cell,I-MISCELLANEOUS
response,O
as,O
well,O
as,O
innate,O
immune,O
responses,O
as,O
marked,O
by,O
a,O
significant,O
increase,O
in,O
levels,O
of,O
circulating,O
NK,I-MISCELLANEOUS
cells,I-MISCELLANEOUS
.,O
,O
The,O
full,O
text,O
of,O
the,O
press,O
release,O
issued,O
in,O
connection,O
with,O
the,O
announcement,O
is,O
being,O
filed,O
as,O
Exhibit,O
99.1,O
to,O
this,O
current,O
report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
.,O
,O
(,O
d,O
),O
Exhibits,O
The,O
following,O
exhibit,O
is,O
filed,O
herewith,O
:,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
hereunto,O
duly,O
authorized,O
.,O
,O
Exhibit,O
99.1,O
Lexington,I-LOCATION
",",O
MA,I-LOCATION
June,O
6,O
",",O
2011,O
Agenus,I-BUSINESS
Inc.,I-BUSINESS
(,O
NASDAQ,I-BUSINESS
:,O
AGEN,I-BUSINESS
),O
",",O
a,O
leading,O
developer,O
of,O
therapeutic,O
vaccines,O
for,O
cancer,O
and,O
infectious,O
diseases,O
",",O
today,O
announced,O
results,O
from,O
a,O
Phase,O
2,O
clinical,O
trial,O
testing,O
the,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
G-200,I-MISCELLANEOUS
vaccine,O
(,O
HSPPC-96,I-MISCELLANEOUS
;,O
vitespen,I-MISCELLANEOUS
),O
in,O
deadly,O
recurrent,O
brain,O
cancer,O
—,O
glioblastoma,I-MISCELLANEOUS
multiforme,I-MISCELLANEOUS
(,O
GBM,I-MISCELLANEOUS
),O
—,O
in,O
a,O
poster,O
presentation,O
at,O
the,O
47th,O
Annual,O
Meeting,O
of,O
the,O
American,I-BUSINESS
Society,I-BUSINESS
of,I-BUSINESS
Clinical,I-BUSINESS
Oncology,I-BUSINESS
(,O
ASCO,I-BUSINESS
),O
in,O
Chicago,I-LOCATION
",",O
Illinois,I-LOCATION
.,O
,O
The,O
key,O
objectives,O
of,O
the,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
G-200,I-MISCELLANEOUS
Phase,O
2,O
trial,O
were,O
to,O
evaluate,O
the,O
overall,O
survival,O
rate,O
",",O
safety,O
and,O
immunological,O
activity,O
consistent,O
with,O
a,O
tumor-specific,O
immune,O
response,O
.,O
,O
The,O
primary,O
objective,O
of,O
the,O
trial,O
was,O
to,O
assess,O
the,O
survival,O
rate,O
at,O
26,O
weeks,O
",",O
which,O
represents,O
the,O
average,O
survival,O
time,O
for,O
patients,O
experiencing,O
recurrence,O
of,O
their,O
GBM,I-MISCELLANEOUS
.,O
,O
Results,O
from,O
this,O
trial,O
showed,O
that,O
93,O
%,O
of,O
the,O
patients,O
were,O
alive,O
at,O
26,O
weeks,O
after,O
surgery,O
and,O
a,O
median,O
overall,O
survival,O
of,O
11,O
months,O
(,O
47.6,O
weeks,O
),O
.,O
,O
Results,O
from,O
pre-defined,O
exploratory,O
analyses,O
of,O
disease,O
progression,O
showed,O
a,O
median,O
progression,O
free,O
survival,O
(,O
PFS,O
),O
of,O
approximately,O
5,O
months,O
(,O
20,O
weeks,O
),O
.,O
,O
Importantly,O
",",O
measures,O
of,O
immune,O
response,O
post,O
vaccination,O
with,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
G-200,I-MISCELLANEOUS
demonstrated,O
a,O
significant,O
tumor-specific,O
CD8+,I-MISCELLANEOUS
T-cell,I-MISCELLANEOUS
response,O
as,O
well,O
as,O
innate,O
immune,O
responses,O
as,O
marked,O
by,O
a,O
significant,O
increase,O
in,O
levels,O
of,O
circulating,O
NK,I-MISCELLANEOUS
cells,I-MISCELLANEOUS
.,O
,O
The,O
robust,O
immune,O
response,O
coupled,O
with,O
improved,O
survival,O
relative,O
to,O
historical,O
controls,O
makes,O
the,O
data,O
from,O
this,O
trial,O
especially,O
encouraging,O
.,O
,O
The,O
safety,O
profile,O
of,O
HSPPC-96,I-MISCELLANEOUS
offers,O
a,O
great,O
opportunity,O
for,O
its,O
use,O
in,O
combination,O
with,O
other,O
approved,O
treatments,O
for,O
GBM,I-MISCELLANEOUS
",",O
said,O
Andrew,I-PERSON
T.,I-PERSON
Parsa,I-PERSON
",",O
MD,O
",",O
Ph.D.,O
",",O
associate,O
professor,O
in,O
the,O
Department,O
of,O
Neurological,O
Surgery,O
at,O
the,O
University,I-BUSINESS
of,I-BUSINESS
California,I-BUSINESS
",",I-BUSINESS
San,I-BUSINESS
Francisco,I-BUSINESS
(,O
UCSF,I-BUSINESS
),O
and,O
lead,O
investigator,O
in,O
the,O
trial,O
.,O
,O
Taken,O
together,O
",",O
the,O
results,O
clearly,O
support,O
advancement,O
of,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
G-200,I-MISCELLANEOUS
into,O
later,O
stage,O
randomized,O
trials,O
",",O
and,O
offer,O
an,O
opportunity,O
to,O
add,O
a,O
biologically,O
active,O
and,O
highly,O
well,O
tolerated,O
adjuvant,O
therapy,O
to,O
surgical,O
resection,O
for,O
recurrent,O
GBM,I-MISCELLANEOUS
patients,O
.,O
,O
Adverse,O
events,O
considered,O
related,O
to,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
G-200,I-MISCELLANEOUS
were,O
grade,O
1,O
or,O
2,O
in,O
nature,O
and,O
mainly,O
associated,O
with,O
the,O
injection,O
",",O
including,O
skin,O
reactions,O
and,O
stinging,O
at,O
the,O
site,O
of,O
injection,O
as,O
well,O
as,O
reports,O
of,O
fatigue,O
.,O
,O
No,O
related,O
grade,O
3,O
or,O
4,O
adverse,O
events,O
were,O
reported,O
in,O
this,O
trial,O
.,O
,O
Based,O
on,O
the,O
promising,O
results,O
from,O
this,O
Phase,O
2,O
study,O
",",O
Agenus,O
has,O
started,O
working,O
with,O
the,O
UCSF,I-BUSINESS
team,O
",",O
as,O
well,O
as,O
other,O
experts,O
in,O
the,O
field,O
",",O
to,O
design,O
a,O
randomized,O
trial,O
to,O
confirm,O
the,O
efficacy,O
of,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
G-200,I-MISCELLANEOUS
in,O
the,O
setting,O
of,O
recurrent,O
GBM,I-MISCELLANEOUS
",",O
said,O
Marcel,I-PERSON
Rozencweig,I-PERSON
",",O
MD,O
",",O
Acting,O
Chief,O
Medical,O
Officer,O
of,O
Agenus,O
.,O
,O
recent,O
FDA,I-GOVERNMENT
approvals,O
of,O
Provenge,I-MISCELLANEOUS
and,O
Yervoy™,I-MISCELLANEOUS
",",O
which,O
both,O
harness,O
the,O
power,O
of,O
the,O
immune,O
system,O
to,O
fight,O
cancer,O
and,O
offer,O
the,O
potential,O
for,O
combination,O
use,O
with,O
other,O
immunological,O
agents,O
",",O
I,O
believe,O
we,O
are,O
entering,O
a,O
new,O
era,O
in,O
the,O
treatment,O
of,O
cancer,O
that,O
could,O
see,O
substantially,O
improved,O
survival,O
rates,O
in,O
patients,O
fighting,O
this,O
disease,O
.,O
,O
The,O
trial,O
was,O
supported,O
through,O
funding,O
from,O
the,O
American,I-BUSINESS
Brain,I-BUSINESS
Tumor,I-BUSINESS
Association,I-BUSINESS
",",O
Accelerated,I-BUSINESS
Brain,I-BUSINESS
Cancer,I-BUSINESS
Cure,I-BUSINESS
",",O
National,I-BUSINESS
Brain,I-BUSINESS
Tumor,I-BUSINESS
Society,I-BUSINESS
",",O
and,O
National,I-GOVERNMENT
Cancer,I-GOVERNMENT
Institute,I-GOVERNMENT
Special,I-GOVERNMENT
Programs,I-GOVERNMENT
of,I-GOVERNMENT
Research,I-GOVERNMENT
Excellence,I-GOVERNMENT
.,O
,O
Parsa,I-PERSON
has,O
not,O
received,O
any,O
financial,O
support,O
or,O
travel,O
expense,O
reimbursement,O
for,O
this,O
work,O
or,O
for,O
consulting,O
activities,O
on,O
behalf,O
of,O
Agenus,I-BUSINESS
.,O
,O
Parsa,I-PERSON
does,O
not,O
have,O
an,O
equity,O
interest,O
in,O
Agenus,I-BUSINESS
or,O
other,O
financial,O
relationship,O
with,O
the,O
company,O
.,O
,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
G-200,I-MISCELLANEOUS
Study,O
Design,O
and,O
Further,O
Results,O
The,O
Phase,O
2,O
trial,O
was,O
designed,O
to,O
enroll,O
approximately,O
30,O
patients,O
with,O
recurrent,O
high-grade,O
GBM,I-MISCELLANEOUS
",",O
the,O
deadliest,O
form,O
of,O
brain,O
cancer,O
.,O
,O
Patients,O
underwent,O
surgery,O
to,O
remove,O
>,O
90,O
%,O
of,O
their,O
tumors,O
(,O
also,O
referred,O
to,O
as,O
gross,O
total,O
resection,O
),O
",",O
which,O
were,O
then,O
used,O
to,O
manufacture,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
G-200,I-MISCELLANEOUS
",",O
a,O
patient-specific,O
heat,O
shock,O
protein,O
based,O
therapeutic,O
vaccine,O
.,O
,O
Eligible,O
patients,O
were,O
treated,O
after,O
surgery,O
with,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
G-200,I-MISCELLANEOUS
once,O
weekly,O
for,O
four,O
weeks,O
",",O
followed,O
by,O
biweekly,O
injections,O
until,O
vaccine,O
depletion,O
or,O
disease,O
progression,O
.,O
,O
A,O
total,O
of,O
33,O
patients,O
were,O
enrolled,O
(,O
ITT,O
population,O
),O
and,O
all,O
received,O
at,O
least,O
one,O
dose,O
of,O
vaccine,O
;,O
30,O
of,O
the,O
33,O
patients,O
were,O
considered,O
evaluable,O
per-protocol,O
as,O
they,O
received,O
4,O
doses,O
of,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
G-200,I-MISCELLANEOUS
.,O
,O
The,O
median,O
patient,O
age,O
was,O
53,O
years,O
and,O
all,O
had,O
an,O
original,O
diagnosis,O
of,O
GBM,I-MISCELLANEOUS
",",O
which,O
tends,O
to,O
carry,O
a,O
poor,O
prognosis,O
.,O
,O
Results,O
in,O
the,O
ITT,O
population,O
were,O
similar,O
to,O
those,O
reported,O
on,O
in,O
the,O
evaluable,O
group,O
(,O
91,O
%,O
survival,O
rate,O
at,O
26,O
weeks,O
;,O
median,O
survival,O
rate,O
of,O
42.6,O
weeks,O
),O
.,O
,O
Results,O
from,O
pre-defined,O
exploratory,O
analyses,O
of,O
disease,O
progression,O
showed,O
a,O
median,O
progression,O
free,O
survival,O
(,O
PFS,O
),O
of,O
approximately,O
5,O
months,O
(,O
20,O
weeks,O
),O
in,O
the,O
evaluable,O
population,O
",",O
which,O
were,O
also,O
similar,O
in,O
the,O
ITT,O
population,O
(,O
PFS,O
of,O
17.1,O
weeks,O
),O
.,O
,O
Conference,O
Call,O
Information,O
June,O
6,O
",",O
2011,O
at,O
2,O
pm,O
CT,O
(,O
3,O
pm,O
ET,I-MISCELLANEOUS
),O
To,O
access,O
the,O
live,O
call,O
",",O
dial,O
877.475.3568,O
(,O
domestic,O
),O
or,O
678.809.3092,O
(,O
international,O
),O
;,O
the,O
access,O
code,O
is,O
67451717,O
.,O
,O
The,O
call,O
will,O
also,O
be,O
webcast,O
and,O
will,O
be,O
accessible,O
from,O
the,O
company,O
s,O
website,O
at,O
www.agenusbio.com/webcast/,O
.,O
,O
A,O
replay,O
will,O
be,O
available,O
via,O
phone,O
and,O
the,O
company,O
s,O
website,O
approximately,O
two,O
hours,O
after,O
the,O
call,O
through,O
midnight,O
Eastern,I-MISCELLANEOUS
Time,I-MISCELLANEOUS
on,O
August,O
6,O
",",O
2011,O
.,O
,O
The,O
replay,O
number,O
is,O
800.642.1687,O
(,O
domestic,O
),O
or,O
706.645.9291,O
(,O
international,O
),O
",",O
and,O
the,O
access,O
code,O
is,O
67451717,O
.,O
,O
About,O
Glioblastoma,I-MISCELLANEOUS
Multiforme,I-MISCELLANEOUS
(,O
GBM,I-MISCELLANEOUS
),O
The,O
incidence,O
rates,O
of,O
primary,O
malignant,O
brain,O
and,O
central,O
nervous,O
system,O
(,O
CNS,O
),O
cancers,O
have,O
increased,O
over,O
the,O
last,O
three,O
decades,O
.,O
,O
The,O
American,I-BUSINESS
Cancer,I-BUSINESS
Society,I-BUSINESS
estimates,O
that,O
more,O
than,O
"22,000",O
malignant,O
tumors,O
of,O
the,O
brain,O
or,O
spinal,O
cord,O
were,O
diagnosed,O
during,O
2010,O
in,O
the,O
US,I-LOCATION
and,O
that,O
more,O
than,O
"13,000",O
people,O
would,O
die,O
from,O
these,O
tumors,O
.,O
,O
Glioblastoma,I-MISCELLANEOUS
is,O
the,O
most,O
common,O
primary,O
malignant,O
brain,O
tumor,O
and,O
accounts,O
for,O
the,O
majority,O
of,O
diagnoses,O
and,O
has,O
been,O
associated,O
with,O
a,O
particularly,O
poor,O
prognosis,O
",",O
with,O
survival,O
rates,O
at,O
1,O
and,O
5,O
years,O
equaling,O
33.7,O
%,O
and,O
4.5,O
%,O
",",O
respectively,O
.,O
,O
The,O
current,O
standard,O
of,O
care,O
for,O
patients,O
with,O
newly,O
diagnosed,O
glioblastoma,I-MISCELLANEOUS
is,O
surgical,O
resection,O
followed,O
by,O
fractionated,O
external,O
beam,O
radiotherapy,O
and,O
systemic,O
temozolomide,I-MISCELLANEOUS
resulting,O
in,O
a,O
median,O
overall,O
survival,O
(,O
OS,O
),O
of,O
14.6,O
months,O
based,O
on,O
data,O
from,O
a,O
randomized,O
Phase,O
III,O
trial,O
.,O
,O
Although,O
this,O
treatment,O
can,O
prolong,O
survival,O
",",O
it,O
is,O
not,O
curative,O
and,O
the,O
vast,O
majority,O
of,O
patients,O
with,O
glioblastoma,O
experience,O
recurrent,O
disease,O
",",O
with,O
a,O
median,O
time,O
to,O
recurrence,O
of,O
7,O
months,O
.,O
,O
Currently,O
",",O
there,O
is,O
no,O
standard,O
treatment,O
for,O
patients,O
with,O
recurrent,O
glioblastoma,I-MISCELLANEOUS
",",O
although,O
additional,O
surgery,O
",",O
chemotherapy,O
(,O
i.e.,O
",",O
CCNU,I-MISCELLANEOUS
",",O
temozolomide,I-MISCELLANEOUS
),O
",",O
bevacizumab,I-MISCELLANEOUS
",",O
and,O
radiotherapy,O
are,O
used,O
.,O
,O
About,O
the,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
of,O
Cancer,O
Vaccines,O
The,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
of,O
vaccines,O
are,O
patient-specific,O
therapeutic,O
cancer,O
vaccine,O
candidates,O
.,O
,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
vaccines,O
contain,O
the,O
heat,O
shock,O
protein,O
",",O
gp96,I-MISCELLANEOUS
",",O
and,O
associated,O
peptides,O
that,O
are,O
purified,O
from,O
patient,O
tumor,O
tissue,O
.,O
,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
vaccines,O
are,O
designed,O
to,O
target,O
only,O
cancerous,O
cells,O
—,O
not,O
healthy,O
normal,O
cells,O
.,O
,O
As,O
a,O
result,O
",",O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
vaccines,O
are,O
designed,O
to,O
limit,O
the,O
toxicities,O
associated,O
with,O
traditional,O
broad-acting,O
cancer,O
treatments,O
.,O
,O
In,O
addition,O
to,O
the,O
recurrent,O
GBM,I-MISCELLANEOUS
study,O
reported,O
above,O
",",O
a,O
Phase,O
2,O
trial,O
testing,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
G-100,I-MISCELLANEOUS
in,O
newly,O
diagnosed,O
GBM,I-MISCELLANEOUS
is,O
on-going,O
and,O
actively,O
enrolling,O
patients,O
.,O
,O
This,O
trial,O
is,O
also,O
being,O
sponsored,O
by,O
Dr.,O
Andrew,I-PERSON
Parsa,I-PERSON
of,O
UCSF,I-BUSINESS
and,O
primarily,O
supported,O
with,O
funding,O
from,O
the,O
American,I-BUSINESS
Brain,I-BUSINESS
Tumor,I-BUSINESS
Association,I-BUSINESS
",",O
Accelerated,I-BUSINESS
Brain,I-BUSINESS
Cancer,I-BUSINESS
Cure,I-BUSINESS
",",O
National,I-BUSINESS
Brain,I-BUSINESS
Tumor,I-BUSINESS
Society,I-BUSINESS
",",O
and,O
National,I-GOVERNMENT
Cancer,I-GOVERNMENT
Institute,I-GOVERNMENT
Special,I-GOVERNMENT
Programs,I-GOVERNMENT
of,I-GOVERNMENT
Research,I-GOVERNMENT
Excellence,I-GOVERNMENT
.,O
,O
The,O
glioma,I-MISCELLANEOUS
trial,O
in,O
newly,O
diagnosed,O
patients,O
involves,O
administration,O
of,O
Prophage,I-MISCELLANEOUS
Series,I-MISCELLANEOUS
G-100,I-MISCELLANEOUS
in,O
combination,O
with,O
radiation,O
and,O
Temodar,I-MISCELLANEOUS
(,O
Merck,I-BUSINESS
;,O
temozolomide,I-MISCELLANEOUS
),O
",",O
the,O
standard,O
of,O
care,O
.,O
,O
Based,O
on,O
encouraging,O
early,O
results,O
",",O
this,O
trial,O
has,O
been,O
expanded,O
to,O
include,O
up,O
to,O
10,O
leading,O
brain,O
tumor,O
research,O
centers,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
About,O
Agenus,I-BUSINESS
Agenus,I-BUSINESS
Inc.,I-BUSINESS
is,O
a,O
biotechnology,O
company,O
working,O
to,O
develop,O
treatments,O
for,O
cancers,O
and,O
infectious,O
diseases,O
.,O
,O
The,O
company,O
is,O
focused,O
on,O
immunotherapeutic,O
products,O
based,O
on,O
strong,O
platform,O
technologies,O
with,O
multiple,O
product,O
candidates,O
advancing,O
through,O
the,O
clinic,O
",",O
including,O
several,O
product,O
candidates,O
that,O
have,O
advanced,O
into,O
late-stage,O
clinical,O
trials,O
through,O
corporate,O
partners,O
.,O
,O
For,O
more,O
information,O
",",O
please,O
visit,O
www.agenusbio.com,O
.,O
,O
-DOCSTART-,O
,O
Filed,O
by,O
PepsiCo,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
pursuant,O
to,O
Rule,O
425,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
and,O
deemed,O
filed,O
pursuant,O
to,O
Rule,O
14a-6,O
(,O
b,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
Subject,O
Companies,O
:,O
The,I-BUSINESS
Pepsi,I-BUSINESS
Bottling,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Commission,O
File,O
No.,O
:,O
001-14893,O
and,O
PepsiAmericas,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Commission,O
File,O
No.,O
Check,O
the,O
appropriate,O
box,O
below,O
if,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filing,O
is,O
intended,O
to,O
simultaneously,O
satisfy,O
the,O
filing,O
obligation,O
of,O
the,O
registrant,O
under,O
any,O
of,O
the,O
following,O
provisions,O
(,O
see,O
General,O
Instruction,O
A.2,O
.,O
,O
Written,O
communications,O
pursuant,O
to,O
Rule,O
425,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17,O
CFR,I-LEGISLATION/ACT
230.425,O
),O
,O
Soliciting,O
material,O
pursuant,O
to,O
Rule,O
14a-12,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17,O
CFR,I-LEGISLATION/ACT
240.14a-12,O
),O
,O
Pre-commencement,O
communications,O
pursuant,O
to,O
Rule,O
14d-2,O
(,O
b,O
),O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17,O
CFR,I-LEGISLATION/ACT
240.14d-2,O
(,O
b,O
),O
),O
,O
Pre-commencement,O
communications,O
pursuant,O
to,O
Rule,O
13e-4,O
(,O
c,O
),O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17,O
CFR,I-LEGISLATION/ACT
240.13e-4,O
(,O
c,O
),O
),O
,O
On,O
February,O
17,O
",",O
2010,O
:,O
(,O
i,O
),O
the,O
stockholders,O
of,O
The,I-BUSINESS
Pepsi,I-BUSINESS
Bottling,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
“,O
PBG,I-BUSINESS
”,O
),O
approved,O
the,O
adoption,O
of,O
the,O
Agreement,O
and,O
Plan,O
of,O
Merger,O
dated,O
as,O
of,O
August,O
3,O
",",O
2009,O
among,O
PepsiCo,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
“,O
Company,O
”,O
),O
",",O
PBG,I-BUSINESS
and,O
Pepsi-Cola,I-BUSINESS
Metropolitan,I-BUSINESS
Bottling,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
wholly,O
owned,O
subsidiary,O
of,O
the,O
Company,O
(,O
“,O
Metro,I-BUSINESS
”,O
),O
",",O
(,O
the,O
“,O
PBG,I-MISCELLANEOUS
Merger,I-MISCELLANEOUS
Agreement,I-MISCELLANEOUS
”,O
),O
at,O
PBG,I-BUSINESS
’,O
s,O
Special,O
Meeting,O
of,O
Stockholders,O
held,O
on,O
that,O
date,O
;,O
and,O
(,O
ii,O
),O
the,O
stockholders,O
of,O
PepsiAmericas,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
“,O
PAS,I-BUSINESS
”,O
),O
approved,O
the,O
adoption,O
of,O
the,O
Agreement,O
and,O
Plan,O
of,O
Merger,O
dated,O
as,O
of,O
August,O
3,O
",",O
2009,O
among,O
the,O
Company,O
",",O
PAS,I-BUSINESS
and,O
Metro,I-BUSINESS
(,O
the,O
“,O
PAS,I-MISCELLANEOUS
Merger,I-MISCELLANEOUS
Agreement,I-MISCELLANEOUS
”,O
and,O
",",O
together,O
with,O
the,O
PBG,I-MISCELLANEOUS
Merger,I-MISCELLANEOUS
Agreement,I-MISCELLANEOUS
",",O
the,O
“,O
Merger,I-MISCELLANEOUS
Agreements,I-MISCELLANEOUS
”,O
),O
at,O
PAS,I-BUSINESS
’,O
Special,O
Meeting,O
of,O
Stockholders,O
held,O
on,O
that,O
date,O
.,O
,O
The,O
Merger,I-MISCELLANEOUS
Agreements,I-MISCELLANEOUS
provide,O
that,O
",",O
upon,O
the,O
terms,O
and,O
subject,O
to,O
the,O
conditions,O
set,O
forth,O
therein,O
",",O
PBG,I-BUSINESS
and,O
PAS,I-BUSINESS
will,O
be,O
merged,O
with,O
and,O
into,O
Metro,I-BUSINESS
",",O
with,O
Metro,I-BUSINESS
continuing,O
as,O
the,O
surviving,O
corporation,O
and,O
a,O
wholly-owned,O
subsidiary,O
of,O
the,O
Company,O
.,O
,O
The,O
Company,O
hopes,O
to,O
close,O
the,O
acquisitions,O
",",O
which,O
remain,O
subject,O
to,O
regulatory,O
approvals,O
and,O
the,O
satisfaction,O
of,O
other,O
customary,O
closing,O
conditions,O
",",O
by,O
the,O
end,O
of,O
February,O
2010,O
.,O
,O
A,O
copy,O
of,O
the,O
press,O
release,O
is,O
attached,O
hereto,O
as,O
Exhibit,O
99.1,O
and,O
is,O
incorporated,O
herein,O
by,O
reference,O
into,O
this,O
Item,O
8.01,O
.,O
,O
Financial,O
Statements,O
and,O
Exhibits,O
.,O
,O
Press,O
Release,O
issued,O
by,O
PepsiCo,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
on,O
February,O
17,O
",",O
2010,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
hereunto,O
duly,O
authorized,O
.,O
,O
/s/,O
Thomas,I-PERSON
H.,I-PERSON
Tamoney,I-PERSON
",",I-PERSON
Jr,I-PERSON
.,I-PERSON
,O
Thomas,I-PERSON
H.,I-PERSON
Tamoney,I-PERSON
",",I-PERSON
Jr,I-PERSON
.,I-PERSON
,O
Press,O
Release,O
issued,O
by,O
PepsiCo,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
on,O
February,O
17,O
",",O
2010,O
.,O
,O
17,O
",",O
2010,O
–,O
PepsiCo,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
NYSE,I-BUSINESS
:,O
PEP,I-BUSINESS
),O
announced,O
today,O
that,O
the,O
stockholders,O
of,O
each,O
of,O
The,I-BUSINESS
Pepsi,I-BUSINESS
Bottling,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
NYSE,I-BUSINESS
:,O
PBG,I-BUSINESS
),O
and,O
PepsiAmericas,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
NYSE,I-BUSINESS
:,O
PAS,I-BUSINESS
),O
approved,O
and,O
adopted,O
their,O
respective,O
merger,O
agreements,O
with,O
PepsiCo,I-BUSINESS
and,O
Pepsi-Cola,I-BUSINESS
Metropolitan,I-BUSINESS
Bottling,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
“,O
Metro,I-BUSINESS
”,O
),O
",",O
a,O
wholly,O
owned,O
subsidiary,O
of,O
PepsiCo,I-BUSINESS
",",O
pursuant,O
to,O
which,O
each,O
of,O
PBG,I-BUSINESS
and,O
PAS,I-BUSINESS
will,O
be,O
merged,O
with,O
and,O
into,O
Metro,I-BUSINESS
",",O
with,O
Metro,I-BUSINESS
continuing,O
as,O
the,O
surviving,O
corporation,O
.,O
,O
Approximately,O
%,O
of,O
shares,O
of,O
PAS,I-BUSINESS
common,O
stock,O
outstanding,O
as,O
of,O
the,O
record,O
date,O
for,O
the,O
meeting,O
voted,O
to,O
adopt,O
the,O
merger,O
agreement,O
with,O
respect,O
to,O
PAS,I-BUSINESS
.,O
,O
Of,O
the,O
votes,O
cast,O
by,O
holders,O
of,O
shares,O
of,O
PAS,I-BUSINESS
common,O
stock,O
",",O
approximately,O
99.7,O
%,O
voted,O
to,O
adopt,O
the,O
merger,O
agreement,O
with,O
respect,O
to,O
PAS,I-BUSINESS
.,O
,O
PepsiCo,I-BUSINESS
hopes,O
to,O
close,O
the,O
acquisitions,O
",",O
which,O
remain,O
subject,O
to,O
regulatory,O
approvals,O
and,O
the,O
satisfaction,O
of,O
other,O
customary,O
closing,O
conditions,O
",",O
by,O
the,O
end,O
of,O
February,O
2010,O
.,O
,O
About,O
PepsiCo,I-BUSINESS
PepsiCo,B-BUSINESS
offers,O
the,O
world,O
’,O
s,O
largest,O
portfolio,O
of,O
billion-dollar,O
food,O
and,O
beverage,O
brands,O
",",O
including,O
18,O
different,O
product,O
lines,O
that,O
each,O
generate,O
more,O
than,O
$,O
1,O
billion,O
in,O
annual,O
retail,O
sales,O
.,O
,O
Our,O
main,O
businesses,O
–,O
Frito-Lay,I-MISCELLANEOUS
",",O
Quaker,I-MISCELLANEOUS
",",O
Pepsi-Cola,I-MISCELLANEOUS
",",O
Tropicana,I-MISCELLANEOUS
and,O
Gatorade,I-MISCELLANEOUS
–,O
also,O
make,O
hundreds,O
of,O
other,O
tasty,O
foods,O
and,O
drinks,O
that,O
bring,O
joy,O
to,O
our,O
consumers,O
in,O
over,O
200,O
countries,O
.,O
,O
With,O
more,O
than,O
$,O
43,O
billion,O
in,O
2009,O
revenues,O
",",O
PepsiCo,I-BUSINESS
employs,O
approximately,O
"203,000",O
people,O
who,O
are,O
united,O
by,O
our,O
unique,O
commitment,O
to,O
sustainable,O
growth,O
",",O
called,O
Performance,I-MISCELLANEOUS
with,I-MISCELLANEOUS
Purpose,I-MISCELLANEOUS
.,O
,O
-DOCSTART-,O
,O
Check,O
whether,O
the,O
registrant,O
is,O
a,O
well-known,O
seasoned,O
issuer,O
",",O
as,O
defined,O
in,O
Rule,O
405,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Check,O
whether,O
the,O
issuer,O
is,O
not,O
required,O
to,O
file,O
reports,O
pursuant,O
to,O
Section,O
13,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Check,O
whether,O
the,O
issuer,O
:,O
(,O
1,O
),O
has,O
filed,O
all,O
reports,O
required,O
to,O
be,O
filed,O
by,O
Section,O
13,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
during,O
the,O
past,O
12,O
months,O
(,O
or,O
for,O
such,O
shorter,O
period,O
that,O
the,O
Registrant,O
was,O
required,O
to,O
file,O
such,O
reports,O
),O
",",O
and,O
(,O
2,O
),O
has,O
been,O
subject,O
to,O
such,O
filing,O
requirements,O
for,O
the,O
past,O
90,O
days,O
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
has,O
submitted,O
electronically,O
and,O
posted,O
on,O
its,O
corporate,O
Web,O
site,O
",",O
if,O
any,O
",",O
every,O
Interactive,O
Data,O
File,O
required,O
to,O
be,O
submitted,O
and,O
posted,O
pursuant,O
to,O
Rule,O
405,O
of,O
Regulation,I-LEGISLATION/ACT
S-T,I-LEGISLATION/ACT
(,O
§,O
232.405,O
of,O
this,O
chapter,O
),O
during,O
the,O
preceding,O
12,O
months,O
(,O
or,O
for,O
such,O
shorter,O
period,O
that,O
the,O
registrant,O
was,O
required,O
to,O
submit,O
and,O
post,O
such,O
files,O
),O
.,O
,O
Indicate,O
by,O
check,O
mark,O
if,O
disclosure,O
of,O
delinquent,O
filers,O
pursuant,O
to,O
Item,O
405,O
of,O
Regulation,I-LEGISLATION/ACT
S-K,I-LEGISLATION/ACT
(,O
§,O
229.405,O
of,O
this,O
chapter,O
),O
is,O
not,O
contained,O
herein,O
",",O
and,O
will,O
not,O
be,O
contained,O
",",O
to,O
the,O
best,O
of,O
registrant,O
’,O
s,O
knowledge,O
",",O
in,O
definitive,O
proxy,O
or,O
information,O
statements,O
incorporated,O
by,O
reference,O
in,O
Part,O
III,O
of,O
this,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
or,O
any,O
amendment,O
to,O
this,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
Registrant,O
is,O
a,O
large,O
accelerated,O
filer,O
",",O
an,O
accelerated,O
filer,O
",",O
a,O
non-accelerated,O
filer,O
",",O
or,O
a,O
smaller,O
reporting,O
company,O
",",O
See,O
definitions,O
of,O
“,O
large,O
accelerated,O
filer,O
”,O
“,O
accelerated,O
filer,O
”,O
and,O
“,O
smaller,O
reporting,O
company,O
”,O
in,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Indicate,O
by,O
check,O
mark,O
if,O
the,O
registrant,O
is,O
a,O
Shell,O
company,O
(,O
as,O
defined,O
by,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
.,O
,O
The,O
issuer,O
’,O
s,O
revenues,O
for,O
its,O
most,O
recent,O
fiscal,O
year,O
were,O
:,O
None,O
$,O
--,O
0,O
--,O
,O
The,O
aggregate,O
market,O
value,O
of,O
the,O
voting,O
and,O
non-voting,O
common,O
equity,O
held,O
by,O
non-affiliates,O
of,O
the,O
registrant,O
was,O
approximately,O
$,O
-0.00-,O
based,O
upon,O
the,O
last,O
reported,O
sales,O
of,O
the,O
registrant,O
’,O
s,O
common,O
stock,O
on,O
the,O
Over-the-Counter,I-MISCELLANEOUS
Bulletin,I-MISCELLANEOUS
Board,I-MISCELLANEOUS
.,O
,O
Shares,O
of,O
common,O
stock,O
held,O
by,O
each,O
officer,O
and,O
director,O
and,O
by,O
each,O
person,O
who,O
owns,O
five,O
percent,O
or,O
more,O
of,O
the,O
outstanding,O
common,O
stock,O
have,O
been,O
excluded,O
from,O
this,O
calculation,O
as,O
such,O
persons,O
may,O
be,O
considered,O
to,O
be,O
affiliated,O
with,O
the,O
issuer,O
.,O
,O
As,O
of,O
March,O
31,O
",",O
2010,O
",",O
the,O
registrant,O
had,O
"15,276,411",O
shares,O
of,O
Common,O
Stock,O
",",O
$,O
0.10,O
par,O
value,O
per,O
share,O
",",O
issued,O
and,O
outstanding,O
.,O
,O
This,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
contains,O
forward,O
looking,O
statements,O
that,O
are,O
made,O
pursuant,O
to,O
the,O
Safe,O
Harbor,O
provisions,O
of,O
the,O
Private,I-LEGISLATION/ACT
Securities,I-LEGISLATION/ACT
Litigation,I-LEGISLATION/ACT
Reform,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1995,I-LEGISLATION/ACT
.,O
,O
Forward-looking,O
statements,O
involve,O
risks,O
",",O
uncertainties,O
and,O
assumptions,O
as,O
described,O
from,O
time,O
to,O
time,O
in,O
registration,O
statements,O
",",O
annual,O
reports,O
",",O
and,O
other,O
periodic,O
reports,O
and,O
filings,O
of,O
the,O
Company,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
.,O
,O
All,O
statements,O
",",O
other,O
than,O
statements,O
of,O
historical,O
facts,O
",",O
which,O
address,O
the,O
Company,O
’,O
s,O
expectations,O
of,O
sources,O
of,O
capital,O
or,O
which,O
express,O
the,O
Company,O
’,O
s,O
expectation,O
for,O
the,O
future,O
with,O
respect,O
to,O
financial,O
performance,O
or,O
operating,O
strategies,O
can,O
be,O
identified,O
as,O
forward-looking,O
statements,O
.,O
,O
As,O
a,O
result,O
",",O
there,O
can,O
be,O
no,O
assurance,O
that,O
the,O
Company,O
’,O
s,O
future,O
results,O
will,O
not,O
be,O
materially,O
different,O
from,O
those,O
described,O
herein,O
as,O
“,O
believed,O
",",O
”,O
“,O
anticipated,O
",",O
”,O
“,O
estimated,O
”,O
or,O
“,O
expected,O
",",O
”,O
which,O
reflect,O
the,O
current,O
view,O
of,O
the,O
Company,O
with,O
respect,O
to,O
future,O
events,O
.,O
,O
We,O
caution,O
readers,O
that,O
these,O
forward-looking,O
statements,O
speak,O
only,O
as,O
of,O
the,O
date,O
hereof,O
.,O
,O
The,O
Company,O
hereby,O
expressly,O
disclaims,O
any,O
obligation,O
or,O
undertaking,O
to,O
release,O
publicly,O
any,O
updates,O
or,O
revisions,O
to,O
any,O
such,O
statement,O
to,O
reflect,O
any,O
change,O
in,O
the,O
Company,O
’,O
s,O
expectations,O
or,O
any,O
change,O
in,O
events,O
",",O
conditions,O
or,O
circumstances,O
on,O
which,O
such,O
statement,O
is,O
based,O
.,O
,O
BEAUTY,I-BUSINESS
BRANDS,I-BUSINESS
GROUP,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
(,O
``,O
We,O
'',O
",",O
``,O
Us,O
'',O
or,O
the,O
``,O
Company,O
'',O
),O
is,O
a,O
Florida,I-LOCATION
corporation,O
and,O
was,O
incorporated,O
in,O
1968,O
as,O
“,O
Chemair,I-BUSINESS
Corporation,I-BUSINESS
of,I-BUSINESS
America.,I-BUSINESS
”,O
In,O
February,O
1983,O
",",O
the,O
Company,O
changed,O
its,O
name,O
to,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
The,O
Company,O
is,O
now,O
considering,O
business,O
opportunities,O
for,O
merger,O
or,O
acquisition,O
that,O
might,O
create,O
value,O
for,O
its,O
shareholders,O
.,O
,O
We,O
have,O
no,O
day-to-day,O
operations,O
.,O
,O
Our,O
officers,O
and,O
directors,O
devote,O
limited,O
time,O
and,O
attention,O
to,O
the,O
affairs,O
of,O
the,O
Company,O
.,O
,O
Management,O
has,O
adopted,O
a,O
conservative,O
policy,O
of,O
seeking,O
opportunities,O
that,O
it,O
considers,O
to,O
be,O
of,O
exceptional,O
quality,O
.,O
,O
Therefore,O
",",O
we,O
may,O
have,O
to,O
wait,O
some,O
time,O
before,O
consummating,O
a,O
suitable,O
transaction,O
.,O
,O
Management,O
recognizes,O
that,O
the,O
higher,O
the,O
standards,O
it,O
imposes,O
upon,O
us,O
",",O
the,O
greater,O
may,O
be,O
its,O
competitive,O
disadvantage,O
when,O
vying,O
with,O
other,O
acquiring,O
interests,O
or,O
entities,O
.,O
,O
The,O
Company,O
does,O
not,O
intend,O
to,O
restrict,O
its,O
consideration,O
to,O
any,O
particular,O
business,O
or,O
industry,O
segment,O
.,O
,O
Due,O
to,O
our,O
lack,O
of,O
financial,O
resources,O
",",O
the,O
scope,O
and,O
number,O
of,O
suitable,O
business,O
ventures,O
is,O
limited,O
.,O
,O
We,O
are,O
therefore,O
most,O
likely,O
to,O
participate,O
in,O
a,O
single,O
business,O
venture,O
.,O
,O
Accordingly,O
",",O
the,O
Company,O
may,O
not,O
be,O
able,O
to,O
diversify,O
and,O
may,O
be,O
limited,O
to,O
one,O
merger,O
or,O
acquisition,O
.,O
,O
The,O
lack,O
of,O
diversification,O
would,O
prevent,O
us,O
from,O
offsetting,O
losses,O
from,O
one,O
business,O
opportunity,O
against,O
profits,O
from,O
another,O
.,O
,O
The,O
decision,O
to,O
participate,O
in,O
a,O
specific,O
business,O
opportunity,O
will,O
be,O
made,O
upon,O
management,O
’,O
s,O
analysis,O
of,O
the,O
quality,O
of,O
the,O
opportunity,O
’,O
s,O
management,O
and,O
personnel,O
",",O
the,O
anticipated,O
acceptability,O
of,O
products,O
or,O
marketing,O
concepts,O
",",O
the,O
merit,O
of,O
technological,O
changes,O
and,O
numerous,O
other,O
factors,O
which,O
are,O
difficult,O
",",O
if,O
not,O
impossible,O
",",O
to,O
analyze,O
through,O
the,O
application,O
of,O
any,O
objective,O
criteria,O
.,O
,O
Further,O
",",O
it,O
is,O
anticipated,O
that,O
the,O
historical,O
operations,O
of,O
a,O
specific,O
venture,O
may,O
not,O
necessarily,O
be,O
indicative,O
of,O
the,O
potential,O
for,O
the,O
future,O
because,O
of,O
the,O
necessity,O
to,O
substantially,O
shift,O
a,O
marketing,O
approach,O
",",O
expand,O
operations,O
",",O
change,O
product,O
emphasis,O
",",O
change,O
or,O
substantially,O
augment,O
management,O
",",O
or,O
make,O
other,O
changes,O
.,O
,O
The,O
Company,O
will,O
be,O
partially,O
dependent,O
upon,O
the,O
management,O
of,O
any,O
given,O
business,O
opportunity,O
to,O
identify,O
such,O
problems,O
and,O
to,O
implement,O
",",O
or,O
be,O
primarily,O
responsible,O
for,O
the,O
implementation,O
of,O
required,O
changes,O
.,O
,O
Since,O
we,O
may,O
participate,O
in,O
a,O
business,O
opportunity,O
with,O
a,O
newly,O
organized,O
business,O
or,O
with,O
a,O
business,O
which,O
is,O
entering,O
a,O
new,O
phase,O
of,O
growth,O
",",O
it,O
should,O
be,O
emphasized,O
that,O
the,O
Company,O
may,O
incur,O
risk,O
due,O
to,O
the,O
failure,O
of,O
the,O
target,O
’,O
s,O
management,O
to,O
have,O
proven,O
its,O
abilities,O
or,O
effectiveness,O
",",O
or,O
the,O
failure,O
to,O
establish,O
a,O
market,O
for,O
the,O
target,O
’,O
s,O
products,O
or,O
services,O
",",O
or,O
the,O
failure,O
to,O
realize,O
profits,O
.,O
,O
The,O
Company,O
does,O
not,O
intend,O
to,O
acquire,O
or,O
merge,O
with,O
any,O
company,O
for,O
which,O
audited,O
financial,O
statements,O
can,O
not,O
be,O
obtained,O
.,O
,O
Never-the-less,O
",",O
management,O
anticipates,O
that,O
any,O
opportunity,O
in,O
which,O
we,O
participate,O
will,O
present,O
certain,O
risks,O
.,O
,O
Many,O
of,O
these,O
risks,O
can,O
not,O
be,O
adequately,O
identified,O
prior,O
to,O
selection,O
of,O
a,O
specific,O
opportunity,O
.,O
,O
Our,O
shareholders,O
must,O
therefore,O
depend,O
on,O
the,O
ability,O
of,O
management,O
to,O
identify,O
and,O
evaluate,O
such,O
risks,O
.,O
,O
Further,O
",",O
in,O
the,O
case,O
of,O
some,O
of,O
the,O
opportunities,O
available,O
to,O
us,O
",",O
it,O
may,O
be,O
anticipated,O
that,O
some,O
of,O
such,O
opportunities,O
are,O
yet,O
to,O
develop,O
as,O
going,O
concerns,O
or,O
that,O
some,O
of,O
such,O
opportunities,O
are,O
in,O
the,O
development,O
stage,O
in,O
that,O
same,O
have,O
not,O
generated,O
significant,O
revenues,O
from,O
principal,O
business,O
activities,O
prior,O
to,O
our,O
participation,O
.,O
,O
Implementation,O
of,O
a,O
structure,O
for,O
any,O
particular,O
business,O
acquisition,O
may,O
involve,O
a,O
merger,O
",",O
consolidation,O
",",O
reorganization,O
",",O
joint,O
venture,O
",",O
franchise,O
or,O
licensing,O
agreement,O
with,O
another,O
corporation,O
or,O
entity,O
.,O
,O
The,O
Company,O
may,O
also,O
purchase,O
stock,O
or,O
assets,O
of,O
an,O
existing,O
business,O
.,O
,O
On,O
the,O
completion,O
of,O
a,O
transaction,O
",",O
it,O
is,O
possible,O
that,O
present,O
management,O
and,O
shareholders,O
of,O
the,O
Company,O
would,O
not,O
remain,O
in,O
control,O
of,O
the,O
Company,O
.,O
,O
Further,O
",",O
our,O
officers,O
and,O
directors,O
may,O
",",O
as,O
part,O
of,O
the,O
terms,O
of,O
any,O
transaction,O
",",O
resign,O
",",O
to,O
be,O
replaced,O
by,O
new,O
officers,O
and,O
directors,O
without,O
a,O
vote,O
of,O
our,O
shareholders,O
.,O
,O
We,O
anticipate,O
that,O
any,O
securities,O
issued,O
in,O
any,O
such,O
reorganization,O
would,O
be,O
issued,O
in,O
reliance,O
on,O
exemptions,O
from,O
registration,O
under,O
applicable,O
federal,O
and,O
state,O
securities,O
laws,O
.,O
,O
However,O
",",O
in,O
certain,O
circumstances,O
",",O
as,O
a,O
negotiated,O
element,O
of,O
any,O
transaction,O
",",O
the,O
Company,O
may,O
agree,O
to,O
register,O
securities,O
either,O
at,O
the,O
time,O
a,O
transaction,O
is,O
consummated,O
",",O
under,O
certain,O
conditions,O
",",O
or,O
at,O
a,O
specified,O
time,O
thereafter,O
.,O
,O
The,O
issuance,O
of,O
substantial,O
additional,O
securities,O
and,O
their,O
potential,O
sale,O
into,O
any,O
trading,O
market,O
may,O
have,O
a,O
depressive,O
effect,O
on,O
such,O
market,O
.,O
,O
While,O
the,O
actual,O
terms,O
of,O
a,O
transaction,O
to,O
which,O
the,O
Company,O
may,O
be,O
a,O
party,O
can,O
not,O
be,O
predicted,O
",",O
it,O
may,O
be,O
expected,O
that,O
the,O
parties,O
to,O
a,O
business,O
transaction,O
will,O
find,O
it,O
desirable,O
to,O
avoid,O
the,O
creation,O
of,O
a,O
taxable,O
event,O
and,O
thereby,O
structure,O
the,O
acquisition,O
in,O
a,O
so,O
called,O
“,O
tax-free,O
”,O
reorganization,O
under,O
Section,O
368,O
(,O
a,O
),O
(,O
1,O
),O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1986,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
“,O
Code,O
”,O
),O
.,O
,O
In,O
order,O
to,O
obtain,O
tax-free,O
treatment,O
under,O
the,O
Code,O
",",O
it,O
may,O
be,O
necessary,O
for,O
the,O
owners,O
of,O
the,O
acquired,O
business,O
to,O
own,O
80,O
%,O
or,O
more,O
of,O
the,O
voting,O
stock,O
of,O
the,O
surviving,O
entity,O
.,O
,O
In,O
such,O
event,O
",",O
our,O
shareholders,O
would,O
retain,O
less,O
than,O
20,O
%,O
of,O
the,O
issued,O
and,O
outstanding,O
shares,O
of,O
the,O
surviving,O
entity,O
",",O
which,O
could,O
result,O
in,O
significant,O
dilution,O
in,O
the,O
equity,O
of,O
such,O
shareholders,O
.,O
,O
Our,O
due,O
diligence,O
process,O
will,O
likely,O
require,O
that,O
management,O
meet,O
personally,O
with,O
the,O
personnel,O
involved,O
in,O
any,O
given,O
transaction,O
",",O
visit,O
and,O
inspect,O
material,O
facilities,O
",",O
obtain,O
independent,O
analysis,O
or,O
verification,O
of,O
the,O
information,O
provided,O
",",O
check,O
references,O
for,O
management,O
and,O
key,O
persons,O
",",O
and,O
take,O
other,O
reasonable,O
investigative,O
measures,O
",",O
to,O
the,O
extent,O
of,O
our,O
limited,O
financial,O
resources,O
and,O
management,O
expertise,O
.,O
,O
The,O
manner,O
in,O
which,O
we,O
participate,O
in,O
an,O
opportunity,O
will,O
depend,O
on,O
the,O
nature,O
of,O
the,O
opportunity,O
",",O
the,O
respective,O
needs,O
and,O
desires,O
of,O
the,O
Company,O
and,O
other,O
parties,O
",",O
the,O
management,O
of,O
the,O
opportunity,O
",",O
and,O
the,O
our,O
relative,O
negotiating,O
strengths,O
.,O
,O
Negotiations,O
that,O
involve,O
mergers,O
or,O
acquisitions,O
will,O
focus,O
on,O
the,O
percentage,O
of,O
the,O
Company,O
that,O
the,O
target,O
company,O
shareholders,O
would,O
acquire,O
in,O
exchange,O
for,O
their,O
shareholdings,O
in,O
the,O
target,O
company,O
.,O
,O
Depending,O
upon,O
",",O
among,O
other,O
things,O
",",O
the,O
target,O
company,O
’,O
s,O
assets,O
and,O
liabilities,O
",",O
our,O
shareholders,O
will,O
in,O
all,O
likelihood,O
hold,O
a,O
lesser,O
percentage,O
ownership,O
interest,O
in,O
the,O
Company,O
following,O
any,O
merger,O
or,O
acquisition,O
.,O
,O
The,O
percentage,O
ownership,O
may,O
be,O
subject,O
to,O
significant,O
reduction,O
in,O
the,O
event,O
the,O
Company,O
acquires,O
a,O
target,O
company,O
with,O
substantial,O
assets,O
.,O
,O
Any,O
merger,O
or,O
acquisition,O
effected,O
by,O
the,O
Company,O
can,O
be,O
expected,O
to,O
have,O
a,O
significant,O
dilutive,O
effect,O
on,O
the,O
percentage,O
of,O
shares,O
held,O
by,O
our,O
current,O
shareholders,O
.,O
,O
The,O
Company,O
’,O
s,O
operation,O
following,O
its,O
merger,O
with,O
",",O
or,O
acquisition,O
of,O
a,O
business,O
will,O
be,O
dependent,O
on,O
the,O
nature,O
of,O
the,O
business,O
and,O
the,O
interest,O
acquired,O
.,O
,O
We,O
are,O
unable,O
to,O
determine,O
at,O
this,O
time,O
whether,O
the,O
Company,O
will,O
be,O
in,O
control,O
of,O
the,O
business,O
or,O
whether,O
present,O
management,O
will,O
be,O
in,O
control,O
of,O
the,O
Company,O
following,O
the,O
acquisition,O
.,O
,O
We,O
may,O
expect,O
that,O
any,O
future,O
business,O
will,O
present,O
various,O
challenges,O
that,O
can,O
not,O
be,O
predicted,O
at,O
the,O
present,O
time,O
.,O
,O
IN,O
ADDITION,O
TO,O
THE,O
OTHER,O
INFORMATION,O
PROVIDED,O
IN,O
THIS,O
REPORT,O
",",O
YOU,O
SHOULD,O
CAREFULLY,O
CONSIDER,O
THE,O
FOLLOWING,O
FACTORS,O
IN,O
EVALUATING,O
OUR,O
BUSINESS,O
",",O
OPERATIONS,O
AND,O
FINANCIAL,O
CONDITION,O
.,O
,O
ADDITIONAL,O
RISKS,O
AND,O
UNCERTAINTIES,O
NOT,O
PRESENTLY,O
KNOWN,O
TO,O
US,O
",",O
THAT,O
WE,O
CURRENTLY,O
DEEM,O
IMMATERIAL,O
OR,O
THAT,O
ARE,O
SIMILAR,O
TO,O
THOSE,O
FACED,O
BY,O
OTHER,O
COMPANIES,O
IN,O
OUR,O
INDUSTRY,O
OR,O
BUSINESS,O
IN,O
GENERAL,O
",",O
SUCH,O
AS,O
COMPETITIVE,O
CONDITIONS,O
",",O
MAY,O
ALSO,O
IMPAIR,O
OUR,O
BUSINESS,O
OPERATIONS,O
.,O
,O
THE,O
OCCURRENCE,O
OF,O
ANY,O
OF,O
THE,O
FOLLOWING,O
RISKS,O
COULD,O
HAVE,O
A,O
MATERIAL,O
ADVERSE,O
EFFECT,O
ON,O
OUR,O
BUSINESS,O
",",O
FINANCIAL,O
CONDITION,O
AND,O
RESULTS,O
OF,O
OPERATIONS,O
.,O
,O
We,O
Incurred,O
Losses,O
for,O
the,O
Years,O
Ended,O
December,O
31,O
",",O
2009,O
and,O
2008,O
and,O
May,O
Not,O
Become,O
a,O
Profitable,O
Enterprise,O
.,O
,O
We,O
incurred,O
an,O
operating,O
loss,O
of,O
$,O
"25,782",O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
and,O
approximately,O
$,O
"28,262",O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2008,O
.,O
,O
Our,O
profitability,O
is,O
dependent,O
upon,O
management,O
’,O
s,O
ability,O
to,O
identify,O
a,O
business,O
acquisition,O
and,O
thereafter,O
generate,O
revenues,O
and,O
develop,O
profitable,O
operations,O
.,O
,O
There,O
can,O
be,O
no,O
assurances,O
that,O
we,O
will,O
achieve,O
our,O
goal,O
of,O
profitable,O
operations,O
.,O
,O
We,O
Have,O
Limited,O
Resources,O
and,O
No,O
Revenues,O
From,O
Operations,O
",",O
and,O
Will,O
Need,O
Additional,O
Financing,O
in,O
Order,O
to,O
Execute,O
any,O
Business,O
Plan,O
.,O
,O
We,O
have,O
limited,O
resources,O
",",O
no,O
revenues,O
from,O
operations,O
to,O
date,O
and,O
our,O
cash,O
on,O
hand,O
may,O
not,O
be,O
sufficient,O
to,O
satisfy,O
our,O
cash,O
requirements,O
during,O
the,O
next,O
twelve,O
months,O
.,O
,O
In,O
addition,O
",",O
we,O
will,O
not,O
achieve,O
any,O
revenues,O
(,O
other,O
than,O
insignificant,O
investment,O
income,O
),O
until,O
",",O
at,O
the,O
earliest,O
",",O
the,O
consummation,O
of,O
a,O
merger,O
and,O
we,O
can,O
not,O
ascertain,O
our,O
capital,O
requirements,O
until,O
such,O
time,O
.,O
,O
Further,O
limiting,O
our,O
abilities,O
to,O
achieve,O
revenues,O
",",O
in,O
order,O
to,O
avoid,O
status,O
as,O
an,O
“,O
Investment,O
Company,O
”,O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
we,O
can,O
only,O
invest,O
our,O
funds,O
prior,O
to,O
a,O
merger,O
in,O
limited,O
investments,O
which,O
do,O
not,O
invoke,O
Investment,O
Company,O
status,O
.,O
,O
There,O
can,O
be,O
no,O
assurance,O
that,O
determinations,O
ultimately,O
made,O
by,O
us,O
will,O
permit,O
us,O
to,O
achieve,O
our,O
business,O
objectives,O
.,O
,O
We,O
Will,O
Most,O
Likely,O
Be,O
Abele,O
To,O
Effect,O
",",O
At,O
Most,O
",",O
One,O
Merger,O
",",O
and,O
Thus,O
",",O
May,O
Not,O
Have,O
A,O
Diversified,O
Business,O
.,O
,O
Our,O
resources,O
are,O
limited,O
and,O
we,O
will,O
most,O
likely,O
have,O
the,O
ability,O
to,O
effect,O
only,O
a,O
single,O
merger,O
.,O
,O
This,O
probable,O
lack,O
of,O
diversification,O
will,O
subject,O
us,O
to,O
numerous,O
economic,O
",",O
competitive,O
and,O
regulatory,O
developments,O
",",O
any,O
or,O
all,O
of,O
which,O
may,O
have,O
a,O
material,O
adverse,O
impact,O
upon,O
the,O
particular,O
industry,O
in,O
which,O
we,O
may,O
operate,O
subsequent,O
to,O
the,O
consummation,O
of,O
a,O
merger,O
.,O
,O
We,O
will,O
become,O
dependent,O
upon,O
the,O
development,O
or,O
market,O
acceptance,O
of,O
a,O
single,O
or,O
limited,O
number,O
of,O
products,O
",",O
processes,O
or,O
services,O
.,O
,O
The,O
Company,O
can,O
not,O
anticipate,O
the,O
government,O
regulations,O
",",O
if,O
any,O
",",O
to,O
which,O
we,O
may,O
be,O
subject,O
until,O
it,O
has,O
acquired,O
an,O
interest,O
in,O
a,O
business,O
.,O
,O
The,O
use,O
of,O
assets,O
to,O
conduct,O
a,O
business,O
that,O
the,O
Company,O
may,O
acquire,O
could,O
subject,O
it,O
to,O
environmental,O
",",O
public,O
health,O
and,O
safety,O
",",O
land,O
use,O
",",O
trade,O
",",O
or,O
other,O
governmental,O
regulations,O
and,O
state,O
or,O
local,O
taxation,O
.,O
,O
Our,O
selection,O
of,O
a,O
business,O
in,O
which,O
to,O
acquire,O
an,O
interest,O
will,O
include,O
an,O
effort,O
to,O
ascertain,O
",",O
to,O
the,O
extent,O
of,O
the,O
limited,O
resources,O
of,O
the,O
Company,O
",",O
the,O
effects,O
of,O
any,O
government,O
regulation,O
on,O
the,O
prospective,O
business,O
of,O
the,O
Company,O
.,O
,O
However,O
",",O
in,O
certain,O
circumstances,O
",",O
such,O
as,O
the,O
acquisition,O
of,O
an,O
interest,O
in,O
a,O
new,O
or,O
start-up,O
business,O
activity,O
",",O
it,O
may,O
not,O
be,O
possible,O
to,O
predict,O
with,O
any,O
degree,O
of,O
accuracy,O
the,O
impact,O
of,O
government,O
regulation,O
.,O
,O
We,O
may,O
be,O
involved,O
in,O
intense,O
competition,O
with,O
other,O
business,O
entities,O
",",O
many,O
of,O
which,O
will,O
likely,O
have,O
a,O
competitive,O
edge,O
over,O
us,O
by,O
virtue,O
of,O
their,O
stronger,O
financial,O
resources,O
and,O
prior,O
experience,O
in,O
business,O
.,O
,O
The,O
Company,O
can,O
provide,O
no,O
assurance,O
that,O
it,O
will,O
be,O
successful,O
in,O
obtaining,O
a,O
suitable,O
business,O
opportunity,O
.,O
,O
As,O
we,O
currently,O
are,O
not,O
involved,O
in,O
selling,O
products,O
or,O
services,O
",",O
there,O
can,O
be,O
no,O
assurance,O
that,O
we,O
will,O
be,O
successful,O
in,O
marketing,O
any,O
such,O
products,O
or,O
services,O
or,O
whether,O
a,O
market,O
will,O
develop,O
.,O
,O
We,O
currently,O
have,O
no,O
patents,O
",",O
trademarks,O
",",O
licenses,O
",",O
franchises,O
",",O
concessions,O
",",O
royalty,O
agreements,O
or,O
labor,O
contracts,O
.,O
,O
We,O
spent,O
no,O
amounts,O
on,O
research,O
and,O
development,O
activities,O
during,O
each,O
of,O
the,O
last,O
two,O
fiscal,O
years,O
.,O
,O
The,O
Company,O
currently,O
has,O
no,O
employees,O
.,O
,O
Management,O
uses,O
attorneys,O
and,O
accountants,O
as,O
necessary,O
and,O
does,O
not,O
plan,O
to,O
engage,O
any,O
full-time,O
employees,O
in,O
the,O
near,O
future,O
.,O
,O
Currently,O
",",O
the,O
Company,O
has,O
no,O
operating,O
business,O
.,O
,O
It,O
is,O
the,O
intention,O
of,O
the,O
current,O
management,O
to,O
locate,O
a,O
new,O
business,O
opportunity,O
",",O
either,O
by,O
acquisition,O
of,O
assets,O
",",O
stock,O
or,O
as,O
a,O
result,O
of,O
a,O
merger,O
.,O
,O
We,O
have,O
incurred,O
",",O
and,O
expect,O
to,O
continue,O
to,O
incur,O
",",O
increased,O
general,O
and,O
administrative,O
expenses,O
as,O
a,O
reporting,O
company,O
.,O
,O
We,O
also,O
believe,O
that,O
compliance,O
with,O
the,O
myriad,O
rules,O
and,O
regulations,O
applicable,O
to,O
reporting,O
companies,O
and,O
related,O
compliance,O
issues,O
will,O
divert,O
time,O
and,O
attention,O
of,O
management,O
away,O
from,O
operating,O
and,O
growing,O
our,O
business,O
.,O
,O
Being,O
a,O
public,O
company,O
also,O
increases,O
the,O
risk,O
of,O
exposure,O
to,O
class,O
action,O
stockholder,O
lawsuits,O
and,O
SEC,I-GOVERNMENT
enforcement,O
actions,O
",",O
and,O
increases,O
the,O
expense,O
to,O
obtain,O
appropriate,O
director,O
and,O
officer,O
liability,O
insurance,O
on,O
acceptable,O
or,O
even,O
reduced,O
policy,O
limits,O
and,O
coverage,O
.,O
,O
As,O
a,O
result,O
",",O
we,O
may,O
find,O
it,O
more,O
difficult,O
to,O
attract,O
and,O
retain,O
qualified,O
persons,O
to,O
serve,O
on,O
our,O
board,O
of,O
directors,O
or,O
as,O
executive,O
officers,O
.,O
,O
Control,O
by,O
an,O
Existing,O
Shareholder,O
.,O
,O
FormCap,I-BUSINESS
Advisory,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
beneficially,O
owns,O
over,O
98,O
%,O
of,O
the,O
outstanding,O
shares,O
of,O
our,O
Common,O
Stock,O
.,O
,O
As,O
a,O
result,O
",",O
this,O
shareholder,O
is,O
able,O
to,O
exercise,O
control,O
over,O
matters,O
requiring,O
shareholder,O
approval,O
",",O
including,O
the,O
election,O
of,O
directors,O
",",O
and,O
the,O
approval,O
of,O
mergers,O
",",O
consolidations,O
and,O
sales,O
of,O
all,O
or,O
substantially,O
all,O
of,O
our,O
assets,O
.,O
,O
Altucher,I-PERSON
",",O
the,O
company,O
’,O
s,O
Chairman,O
and,O
President,O
and,O
Mr.,O
Kelly,I-PERSON
",",O
a,O
Director,O
and,O
the,O
Company,O
’,O
s,O
Chief,O
Financial,O
Officer,O
",",O
are,O
the,O
owners,O
and,O
managing,O
members,O
of,O
FormCap,I-BUSINESS
Advisory,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
.,I-BUSINESS
,O
Our,O
Common,O
Stock,O
Is,O
A,O
“,O
Penny,O
Stock,O
”,O
Which,O
May,O
Restrict,O
The,O
Ability,O
Of,O
Stock,O
Holders,O
To,O
Sell,O
Our,O
Common,O
Stock,O
In,O
The,O
Secondary,O
Market,O
.,O
,O
The,O
SEC,I-GOVERNMENT
has,O
adopted,O
regulations,O
which,O
generally,O
define,O
“,O
penny,O
stock,O
”,O
to,O
be,O
an,O
equity,O
security,O
that,O
has,O
a,O
market,O
price,O
",",O
as,O
defined,O
",",O
of,O
less,O
than,O
$,O
5.00,O
per,O
share,O
",",O
or,O
an,O
exercise,O
price,O
of,O
less,O
than,O
$,O
5.00,O
per,O
share,O
",",O
subject,O
to,O
certain,O
exceptions,O
",",O
including,O
an,O
exception,O
of,O
an,O
equity,O
security,O
that,O
is,O
quoted,O
on,O
a,O
national,O
securities,O
exchange,O
.,O
,O
Our,O
Common,O
Stock,O
is,O
not,O
now,O
quoted,O
on,O
a,O
national,O
exchange,O
but,O
is,O
traded,O
on,O
Nasdaq,I-BUSINESS
’,O
s,O
OTC,I-MISCELLANEOUS
Bulletin,I-MISCELLANEOUS
Board,I-MISCELLANEOUS
(,O
“,O
OTCBB,I-MISCELLANEOUS
”,O
),O
.,O
,O
Thus,O
",",O
they,O
are,O
subject,O
to,O
rules,O
that,O
impose,O
additional,O
sales,O
practice,O
requirements,O
on,O
broker-dealers,O
who,O
sell,O
these,O
securities,O
.,O
,O
For,O
example,O
",",O
the,O
broker-dealer,O
must,O
make,O
a,O
special,O
suitability,O
determination,O
for,O
the,O
purchaser,O
of,O
such,O
securities,O
and,O
have,O
received,O
the,O
purchaser,O
’,O
s,O
written,O
consent,O
to,O
the,O
transactions,O
prior,O
to,O
the,O
purchase,O
.,O
,O
Additionally,O
",",O
the,O
rules,O
require,O
the,O
delivery,O
",",O
prior,O
to,O
the,O
transaction,O
",",O
of,O
a,O
disclosure,O
schedule,O
prepared,O
by,O
the,O
SEC,I-GOVERNMENT
relating,O
to,O
the,O
penny,O
stock,O
market,O
.,O
,O
The,O
broker-dealer,O
also,O
must,O
disclose,O
the,O
commissions,O
payable,O
to,O
both,O
the,O
broker-dealer,O
and,O
the,O
registered,O
underwriter,O
",",O
and,O
current,O
quotations,O
for,O
the,O
securities,O
",",O
and,O
",",O
if,O
the,O
broker-dealer,O
is,O
the,O
sole,O
market,O
maker,O
",",O
the,O
broker-dealer,O
must,O
disclose,O
this,O
fact,O
and,O
the,O
broker-dealer,O
’,O
s,O
presumed,O
control,O
over,O
the,O
market,O
.,O
,O
Finally,O
",",O
among,O
other,O
requirements,O
",",O
monthly,O
statements,O
must,O
be,O
sent,O
disclosing,O
recent,O
price,O
information,O
for,O
the,O
penny,O
stock,O
held,O
in,O
the,O
account,O
and,O
information,O
on,O
the,O
limited,O
market,O
in,O
penny,O
stocks,O
.,O
,O
The,O
“,O
penny,O
stock,O
”,O
rules,O
",",O
may,O
restrict,O
the,O
ability,O
of,O
our,O
stockholders,O
to,O
sell,O
our,O
Common,O
Stock,O
and,O
warrants,O
in,O
the,O
secondary,O
market,O
.,O
,O
Our,O
Common,O
Stock,O
Has,O
Been,O
Thinly,O
Traded,O
",",O
Liquidity,O
Is,O
Highly,O
Limited,O
",",O
And,O
We,O
May,O
Be,O
Unable,O
to,O
Obtain,O
Listing,O
Of,O
Our,O
Common,O
Stock,O
On,O
A,O
More,O
Liquid,O
Market,O
.,O
,O
Our,O
Common,O
Stock,O
is,O
quoted,O
on,O
the,O
OTCBB,I-MISCELLANEOUS
",",O
which,O
provides,O
significantly,O
less,O
liquidity,O
than,O
a,O
securities,O
exchange,O
(,O
such,O
as,O
the,O
NYSE,I-MISCELLANEOUS
Amex,I-MISCELLANEOUS
or,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
),O
or,O
an,O
automated,O
quotation,O
system,O
(,O
such,O
as,O
the,O
Nasdaq,I-MISCELLANEOUS
Global,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
or,O
Capital,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
),O
.,O
,O
There,O
is,O
uncertainty,O
that,O
we,O
will,O
ever,O
be,O
accepted,O
for,O
a,O
listing,O
on,O
an,O
automated,O
quotation,O
system,O
or,O
national,O
securities,O
exchange,O
.,O
,O
Often,O
there,O
is,O
currently,O
a,O
limited,O
volume,O
of,O
trading,O
in,O
our,O
Common,O
Stock,O
",",O
and,O
on,O
many,O
days,O
there,O
has,O
been,O
no,O
trading,O
activity,O
at,O
all,O
.,O
,O
The,O
purchasers,O
of,O
shares,O
of,O
our,O
Common,O
Stock,O
may,O
find,O
it,O
difficult,O
to,O
resell,O
their,O
shares,O
at,O
prices,O
quoted,O
in,O
the,O
market,O
or,O
at,O
all,O
.,O
,O
We,O
May,O
Issue,O
Additional,O
Shares,O
of,O
Common,O
Stock,O
or,O
Other,O
Securities,O
Which,O
Could,O
Dilute,O
the,O
Value,O
of,O
Our,O
Stockholders,O
’,O
Securities,O
.,O
,O
Certain,O
events,O
over,O
which,O
stockholders,O
have,O
no,O
control,O
could,O
result,O
in,O
the,O
issuance,O
of,O
additional,O
shares,O
of,O
our,O
Common,O
Stock,O
",",O
which,O
could,O
dilute,O
the,O
value,O
of,O
an,O
individual,O
stockholder,O
’,O
s,O
ownership,O
in,O
the,O
Company,O
.,O
,O
We,O
may,O
issue,O
additional,O
shares,O
of,O
Common,O
Stock,O
or,O
other,O
securities,O
:,O
,O
We,O
Are,O
Not,O
Required,O
to,O
Meet,O
or,O
Maintain,O
Any,O
Listing,O
Standards,O
for,O
Our,O
Common,O
Stock,O
to,O
Be,O
Quoted,O
on,O
the,O
OTC,I-MISCELLANEOUS
Bulletin,I-MISCELLANEOUS
Board,I-MISCELLANEOUS
",",O
Which,O
Could,O
Affect,O
Our,O
Stockholders,O
’,O
Ability,O
to,O
Access,O
Trading,O
Information,O
about,O
Our,O
Common,O
Stock,O
.,O
,O
The,O
OTCBulletin,I-MISCELLANEOUS
Board,I-MISCELLANEOUS
is,O
separate,O
and,O
distinct,O
from,O
the,O
NASDAQ,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
.,O
,O
Although,O
the,O
OTC,I-MISCELLANEOUS
Bulletin,I-MISCELLANEOUS
Board,I-MISCELLANEOUS
is,O
a,O
regulated,O
quotation,O
service,O
operated,O
by,O
the,O
National,I-BUSINESS
Association,I-BUSINESS
of,I-BUSINESS
Securities,I-BUSINESS
Dealers,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
“,O
NASD,I-BUSINESS
”,O
),O
that,O
displays,O
real-time,O
quotes,O
",",O
last,O
sale,O
prices,O
",",O
and,O
volume,O
information,O
in,O
over-the-counter,O
equity,O
securities,O
like,O
our,O
Common,O
Stock,O
",",O
we,O
are,O
not,O
required,O
to,O
meet,O
or,O
maintain,O
any,O
qualitative,O
or,O
quantitative,O
listing,O
standards,O
for,O
our,O
Common,O
Stock,O
to,O
be,O
quoted,O
on,O
the,O
OTCBulletin,I-MISCELLANEOUS
Board,I-MISCELLANEOUS
.,O
,O
Our,O
Common,O
Stock,O
does,O
not,O
presently,O
meet,O
the,O
minimum,O
listing,O
standards,O
for,O
listing,O
on,O
the,O
NASDAQ,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
or,O
any,O
national,O
securities,O
exchange,O
which,O
could,O
affect,O
our,O
stockholders,O
’,O
ability,O
to,O
access,O
trading,O
information,O
about,O
our,O
Common,O
Stock,O
.,O
,O
The,O
OTCBulletin,I-MISCELLANEOUS
Board,I-MISCELLANEOUS
is,O
generally,O
considered,O
to,O
be,O
a,O
less,O
efficient,O
market,O
than,O
the,O
established,O
exchanges,O
or,O
the,O
NASDAQ,I-BUSINESS
markets,O
.,O
,O
While,O
we,O
anticipate,O
seeking,O
to,O
be,O
listed,O
on,O
the,O
NASDAQ,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
or,O
a,O
national,O
exchange,O
at,O
some,O
time,O
in,O
the,O
future,O
",",O
it,O
is,O
impossible,O
at,O
this,O
time,O
to,O
predict,O
when,O
",",O
if,O
ever,O
",",O
such,O
application,O
will,O
be,O
made,O
or,O
whether,O
such,O
application,O
will,O
be,O
successful,O
.,O
,O
We,O
Do,O
Not,O
Intend,O
to,O
Pay,O
Dividends,O
.,O
,O
We,O
currently,O
intend,O
to,O
retain,O
any,O
future,O
earnings,O
to,O
fund,O
growth,O
and,O
",",O
therefore,O
",",O
do,O
not,O
expect,O
to,O
pay,O
any,O
dividends,O
to,O
our,O
stockholders,O
in,O
the,O
foreseeable,O
future,O
.,O
,O
We,O
maintain,O
our,O
offices,O
at,O
15,O
Broad,I-LOCATION
Street,I-LOCATION
",",O
Apt,O
.,O
,O
2624,O
",",O
New,I-LOCATION
York,I-LOCATION
",",O
New,I-LOCATION
York,I-LOCATION
10005,O
.,O
,O
The,O
telephone,O
number,O
is,O
(,O
513,O
),O
871-7223,O
.,O
,O
The,O
Company,O
occupies,O
space,O
with,O
our,O
President,O
.,O
,O
We,O
are,O
not,O
a,O
signatory,O
on,O
the,O
lease,O
and,O
would,O
be,O
considered,O
a,O
month-to-month,O
tenant,O
",",O
but,O
do,O
not,O
pay,O
rent,O
on,O
this,O
space,O
.,O
,O
The,O
space,O
is,O
currently,O
sufficient,O
for,O
our,O
needs,O
because,O
we,O
have,O
no,O
business,O
operations,O
.,O
,O
[,O
REMOVED,O
AND,O
RESERVED,O
],O
,O
Since,O
May,O
13,O
",",O
2008,O
",",O
our,O
Common,O
Stock,O
has,O
been,O
traded,O
on,O
the,O
OTC,I-MISCELLANEOUS
Bulletin,I-MISCELLANEOUS
Board,I-MISCELLANEOUS
under,O
the,O
symbol,O
“,O
BBGR,I-BUSINESS
”,O
.,O
,O
Prior,O
to,O
that,O
date,O
",",O
our,O
Common,O
Stock,O
had,O
been,O
quoted,O
on,O
the,O
“,O
pink,O
sheets,O
”,O
published,O
by,O
the,O
Pink,I-BUSINESS
Sheets,I-BUSINESS
LLC,I-BUSINESS
under,O
the,O
symbol,O
“,O
BBGR.PK.,I-BUSINESS
”,O
The,O
market,O
for,O
our,O
common,O
stock,O
is,O
limited,O
and,O
could,O
be,O
volatile,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
the,O
range,O
of,O
high,O
and,O
low,O
bid,O
quotations,O
or,O
high,O
and,O
low,O
closing,O
prices,O
",",O
as,O
applicable,O
",",O
for,O
our,O
Common,O
Stock,O
for,O
each,O
of,O
the,O
periods,O
indicated,O
as,O
reported,O
by,O
the,O
Pink,O
Sheets,O
or,O
the,O
OTC,I-MISCELLANEOUS
Bulletin,I-MISCELLANEOUS
Board,I-MISCELLANEOUS
.,O
,O
The,O
prices,O
for,O
the,O
Pink,I-MISCELLANEOUS
Sheets,I-MISCELLANEOUS
and,O
the,O
OTC,I-MISCELLANEOUS
Bulletin,I-MISCELLANEOUS
Board,I-MISCELLANEOUS
reflect,O
inter-dealer,O
prices,O
",",O
without,O
retail,O
mark-up,O
",",O
mark-down,O
or,O
commissions,O
.,O
,O
The,O
OTC,I-MISCELLANEOUS
Bulletin,I-MISCELLANEOUS
Board,I-MISCELLANEOUS
and,O
Pink,I-MISCELLANEOUS
Sheet,I-MISCELLANEOUS
prices,O
listed,O
below,O
may,O
not,O
represent,O
actual,O
transaction,O
prices,O
.,O
,O
The,O
Company,O
has,O
not,O
paid,O
a,O
dividend,O
on,O
its,O
shares,O
of,O
common,O
stock,O
and,O
does,O
not,O
plan,O
to,O
do,O
so,O
in,O
the,O
foreseeable,O
future,O
.,O
,O
The,O
amount,O
and,O
timing,O
of,O
any,O
dividend,O
and,O
the,O
determination,O
of,O
when,O
to,O
declare,O
any,O
dividend,O
is,O
subject,O
to,O
the,O
discretion,O
of,O
the,O
Company,O
's,O
Board,O
of,O
Directors,O
depending,O
on,O
the,O
Company,O
's,O
future,O
results,O
of,O
operations,O
",",O
financial,O
condition,O
",",O
capital,O
requirements,O
",",O
and,O
other,O
factors,O
deemed,O
relevant,O
by,O
the,O
Board,O
.,O
,O
The,O
number,O
of,O
shareholders,O
of,O
record,O
for,O
the,O
Company,O
’,O
s,O
common,O
stock,O
as,O
of,O
March,O
31,O
",",O
2010,O
is,O
approximately,O
247,O
.,O
,O
This,O
management,O
’,O
s,O
Plan,O
of,O
Operation,O
and,O
Results,O
of,O
Operations,O
and,O
other,O
parts,O
of,O
this,O
report,O
contain,O
forward-looking,O
statements,O
that,O
involve,O
risks,O
and,O
uncertainties,O
.,O
,O
Forward-looking,O
statements,O
can,O
also,O
be,O
identified,O
by,O
words,O
such,O
as,O
“,O
anticipates,O
",",O
”,O
“,O
expects,O
",",O
”,O
“,O
believes,O
",",O
”,O
“,O
plans,O
",",O
”,O
“,O
predicts,O
",",O
”,O
and,O
similar,O
terms,O
.,O
,O
Forward-looking,O
statements,O
are,O
not,O
guarantees,O
of,O
future,O
performance,O
and,O
our,O
actual,O
results,O
may,O
differ,O
significantly,O
from,O
the,O
results,O
discussed,O
in,O
the,O
forward-looking,O
statements,O
.,O
,O
Factors,O
that,O
might,O
cause,O
such,O
differences,O
include,O
",",O
but,O
are,O
not,O
limited,O
to,O
",",O
those,O
discussed,O
in,O
the,O
subsections,O
entitled,O
“,O
Forward-Looking,O
Statements,O
and,O
Factors,O
That,O
May,O
Affect,O
Future,O
Results,O
and,O
Financial,O
Condition,O
”,O
below,O
and,O
the,O
subsection,O
entitled,O
“,O
Risk,O
Factors,O
”,O
above,O
.,O
,O
The,O
following,O
discussion,O
should,O
be,O
read,O
in,O
conjunction,O
with,O
our,O
financial,O
statements,O
and,O
notes,O
thereto,O
included,O
in,O
this,O
report,O
.,O
,O
All,O
information,O
presented,O
herein,O
is,O
based,O
on,O
our,O
fiscal,O
year,O
ended,O
December,O
31,O
",",O
2009,O
.,O
,O
The,O
Company,O
’,O
s,O
plan,O
of,O
operation,O
for,O
the,O
coming,O
year,O
is,O
to,O
identify,O
and,O
acquire,O
a,O
favorable,O
business,O
opportunity,O
.,O
,O
The,O
Company,O
does,O
not,O
plan,O
to,O
limit,O
its,O
options,O
to,O
any,O
particular,O
industry,O
",",O
but,O
will,O
evaluate,O
each,O
opportunity,O
on,O
its,O
merits,O
.,O
,O
The,O
Company,O
has,O
not,O
yet,O
entered,O
into,O
any,O
agreement,O
",",O
nor,O
does,O
it,O
have,O
any,O
commitment,O
or,O
understanding,O
to,O
enter,O
into,O
or,O
become,O
engaged,O
in,O
any,O
transaction,O
",",O
as,O
of,O
the,O
date,O
of,O
this,O
filing,O
.,O
,O
The,O
Company,O
had,O
no,O
assets,O
as,O
of,O
December,O
31,O
",",O
2009,O
.,O
,O
Stockholders,O
’,O
deficit,O
in,O
the,O
Company,O
was,O
$,O
0,O
at,O
December,O
31,O
",",O
2009,O
.,O
,O
The,O
Company,O
had,O
negative,O
cash,O
flows,O
from,O
operations,O
of,O
$,O
"25,782",O
and,O
$,O
"33,134",O
for,O
the,O
years,O
ended,O
December,O
31,O
",",O
2009,O
and,O
2008,O
",",O
respectively,O
.,O
,O
Shareholders,O
of,O
the,O
Company,O
paid,O
expenses,O
totaling,O
$,O
"58,916",O
for,O
the,O
period,O
from,O
January,O
1,O
",",O
2008,O
to,O
December,O
31,O
",",O
2009,O
",",O
including,O
accounting,O
",",O
administration,O
",",O
consulting,O
and,O
professional,O
fees,O
.,O
,O
The,O
Company,O
had,O
cash,O
flows,O
from,O
financing,O
activities,O
of,O
$,O
"25,782",O
and,O
$,O
"33,134",O
for,O
the,O
years,O
ended,O
December,O
31,O
",",O
2009,O
and,O
2008,O
",",O
respectively,O
.,O
,O
The,O
Company,O
’,O
s,O
current,O
assets,O
are,O
insufficient,O
to,O
conduct,O
its,O
plan,O
of,O
operation,O
over,O
the,O
next,O
twelve,O
(,O
12,O
),O
months,O
and,O
it,O
may,O
have,O
to,O
seek,O
debt,O
or,O
equity,O
financing,O
to,O
fund,O
minimum,O
operations,O
.,O
,O
The,O
Company,O
has,O
no,O
current,O
commitments,O
or,O
arrangements,O
with,O
respect,O
to,O
",",O
or,O
immediate,O
sources,O
of,O
funding,O
.,O
,O
Further,O
",",O
no,O
assurances,O
can,O
be,O
given,O
that,O
funding,O
",",O
if,O
needed,O
",",O
would,O
be,O
available,O
or,O
available,O
to,O
the,O
Company,O
on,O
acceptable,O
terms,O
.,O
,O
The,O
Company,O
’,O
s,O
shareholders,O
would,O
be,O
the,O
most,O
likely,O
source,O
of,O
new,O
funding,O
in,O
the,O
form,O
of,O
loans,O
or,O
equity,O
placements,O
though,O
none,O
have,O
made,O
any,O
commitment,O
for,O
future,O
investment,O
and,O
the,O
Company,O
has,O
no,O
agreement,O
formal,O
or,O
otherwise,O
.,O
,O
The,O
Company,O
’,O
s,O
inability,O
to,O
obtain,O
funding,O
would,O
have,O
a,O
material,O
adverse,O
affect,O
on,O
its,O
plan,O
of,O
operation,O
.,O
,O
The,O
Company,O
has,O
no,O
current,O
plans,O
for,O
the,O
purchase,O
or,O
sale,O
of,O
any,O
plant,O
or,O
equipment,O
.,O
,O
The,O
Company,O
has,O
no,O
employees,O
and,O
has,O
no,O
current,O
plans,O
to,O
make,O
any,O
changes,O
in,O
the,O
number,O
of,O
employees,O
.,O
,O
The,O
Company,O
has,O
no,O
defined,O
benefit,O
plan,O
or,O
contractual,O
commitment,O
with,O
any,O
of,O
its,O
officers,O
or,O
directors,O
.,O
,O
During,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
",",O
and,O
for,O
the,O
year,O
to,O
date,O
",",O
the,O
Company,O
’,O
s,O
operations,O
were,O
limited,O
to,O
seeking,O
to,O
identify,O
prospective,O
business,O
opportunities,O
.,O
,O
We,O
do,O
not,O
expect,O
to,O
generate,O
revenues,O
within,O
the,O
next,O
twelve,O
months,O
of,O
operation,O
or,O
ever,O
",",O
since,O
we,O
have,O
yet,O
to,O
acquire,O
a,O
favorable,O
business,O
opportunity,O
",",O
which,O
opportunity,O
if,O
acquired,O
",",O
may,O
or,O
may,O
not,O
produce,O
revenue,O
.,O
,O
For,O
the,O
current,O
fiscal,O
year,O
",",O
the,O
Company,O
anticipates,O
incurring,O
a,O
loss,O
as,O
a,O
result,O
of,O
administration,O
expenses,O
",",O
accounting,O
costs,O
",",O
and,O
expenses,O
associated,O
with,O
maintaining,O
its,O
disclosure,O
obligations,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
“,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
”,O
),O
.,O
,O
Since,O
we,O
do,O
not,O
anticipate,O
generating,O
any,O
revenues,O
in,O
the,O
near,O
term,O
we,O
will,O
continue,O
to,O
operate,O
at,O
a,O
loss,O
.,O
,O
For,O
the,O
years,O
ended,O
December,O
31,O
",",O
2009,O
and,O
2008,O
",",O
the,O
Company,O
recorded,O
an,O
operating,O
loss,O
of,O
$,O
"25,782",O
and,O
$,O
"28,262",O
",",O
respectively,O
.,O
,O
The,O
Company,O
’,O
s,O
operating,O
loss,O
is,O
attributable,O
to,O
general,O
and,O
administrative,O
expenses,O
.,O
,O
The,O
general,O
and,O
administrative,O
expenses,O
include,O
accounting,O
costs,O
and,O
costs,O
associated,O
with,O
the,O
preparation,O
of,O
disclosure,O
documentation,O
in,O
connection,O
with,O
registration,O
pursuant,O
to,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
as,O
well,O
as,O
costs,O
associated,O
with,O
the,O
Company,O
’,O
s,O
search,O
for,O
a,O
suitable,O
business,O
opportunity,O
.,O
,O
We,O
did,O
not,O
generate,O
any,O
revenues,O
during,O
this,O
period,O
.,O
,O
We,O
expect,O
to,O
continue,O
to,O
operate,O
at,O
a,O
loss,O
through,O
fiscal,O
2010,O
and,O
due,O
to,O
the,O
nature,O
of,O
the,O
Company,O
’,O
s,O
search,O
for,O
a,O
suitable,O
business,O
opportunity,O
can,O
not,O
determine,O
whether,O
we,O
will,O
ever,O
generate,O
revenues,O
from,O
operations,O
.,O
,O
The,O
Company,O
expended,O
no,O
amounts,O
on,O
capital,O
expenditures,O
for,O
the,O
years,O
ended,O
December,O
31,O
",",O
2009,O
and,O
2008,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2009,O
",",O
we,O
have,O
no,O
off-balance,O
sheet,O
arrangements,O
such,O
as,O
guarantees,O
",",O
retained,O
or,O
contingent,O
interest,O
in,O
assets,O
transferred,O
",",O
obligation,O
under,O
a,O
derivative,O
instrument,O
and,O
obligation,O
arising,O
out,O
of,O
or,O
a,O
variable,O
interest,O
in,O
an,O
unconsolidated,O
entity,O
.,O
,O
We,O
do,O
not,O
have,O
any,O
commitments,O
which,O
are,O
required,O
to,O
be,O
disclosed,O
in,O
tabular,O
form,O
as,O
of,O
December,O
31,O
",",O
2009,O
.,O
,O
The,O
statements,O
contained,O
in,O
the,O
section,O
titled,O
Management,O
’,O
s,O
Plan,O
of,O
Operation,O
",",O
with,O
the,O
exception,O
of,O
historical,O
facts,O
",",O
are,O
forward,O
looking,O
statements,O
within,O
the,O
meaning,O
of,O
Section,O
27A,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
A,O
safe-harbor,O
provision,O
may,O
not,O
be,O
applicable,O
to,O
the,O
forward,O
looking,O
statements,O
made,O
in,O
this,O
prospectus,O
because,O
of,O
certain,O
exclusions,O
under,O
Section,O
27A,O
(,O
b,O
),O
.,O
,O
Forward,O
looking,O
statements,O
reflect,O
our,O
current,O
expectations,O
and,O
beliefs,O
regarding,O
our,O
future,O
results,O
of,O
operations,O
",",O
performance,O
",",O
and,O
achievements,O
.,O
,O
These,O
statements,O
are,O
subject,O
to,O
risks,O
and,O
uncertainties,O
and,O
are,O
based,O
upon,O
assumptions,O
and,O
beliefs,O
that,O
may,O
or,O
may,O
not,O
materialize,O
.,O
,O
These,O
statements,O
include,O
",",O
but,O
are,O
not,O
limited,O
to,O
",",O
statements,O
concerning,O
:,O
,O
—,O
our,O
anticipated,O
financial,O
performance,O
and,O
business,O
plan,O
;,O
,O
—,O
the,O
sufficiency,O
of,O
existing,O
capital,O
resources,O
;,O
,O
—,O
our,O
ability,O
to,O
raise,O
additional,O
capital,O
to,O
fund,O
cash,O
requirements,O
for,O
future,O
operations,O
;,O
,O
—,O
uncertainties,O
related,O
to,O
the,O
Company,O
’,O
s,O
future,O
business,O
prospects,O
;,O
,O
—,O
the,O
ability,O
of,O
the,O
Company,O
to,O
generate,O
revenues,O
to,O
fund,O
future,O
operations,O
;,O
,O
—,O
the,O
volatility,O
of,O
the,O
stock,O
market,O
and,O
;,O
,O
—,O
general,O
economic,O
conditions,O
.,O
,O
We,O
wish,O
to,O
caution,O
readers,O
that,O
the,O
Company,O
’,O
s,O
operating,O
results,O
are,O
subject,O
to,O
various,O
risks,O
and,O
uncertainties,O
that,O
could,O
cause,O
our,O
actual,O
results,O
to,O
differ,O
materially,O
from,O
those,O
discussed,O
or,O
anticipated,O
",",O
including,O
the,O
factors,O
set,O
forth,O
in,O
the,O
section,O
entitled,O
“,O
Risk,O
Factors,O
”,O
included,O
elsewhere,O
in,O
this,O
report,O
.,O
,O
We,O
also,O
wish,O
to,O
advise,O
readers,O
not,O
to,O
place,O
any,O
undue,O
reliance,O
on,O
the,O
forward,O
looking,O
statements,O
contained,O
in,O
this,O
report,O
",",O
which,O
reflect,O
our,O
beliefs,O
and,O
expectations,O
only,O
as,O
of,O
the,O
date,O
of,O
this,O
report,O
.,O
,O
We,O
assume,O
no,O
obligation,O
to,O
update,O
or,O
revise,O
these,O
forward,O
looking,O
statements,O
to,O
reflect,O
new,O
events,O
or,O
circumstances,O
or,O
any,O
changes,O
in,O
our,O
beliefs,O
or,O
expectations,O
",",O
other,O
that,O
is,O
required,O
by,O
law,O
.,O
,O
Our,O
financial,O
statements,O
and,O
accompanying,O
notes,O
have,O
been,O
prepared,O
in,O
accordance,O
with,O
United,I-LEGISLATION/ACT
States,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
applied,O
on,O
a,O
consistent,O
basis,O
.,O
,O
The,O
preparation,O
of,O
financial,O
statements,O
in,O
conformity,O
with,O
U.S.,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
requires,O
management,O
to,O
make,O
estimates,O
and,O
assumptions,O
that,O
affect,O
the,O
reported,O
amounts,O
of,O
assets,O
and,O
liabilities,O
",",O
the,O
disclosure,O
of,O
contingent,O
assets,O
and,O
liabilities,O
at,O
the,O
date,O
of,O
the,O
financial,O
statements,O
and,O
the,O
reported,O
amounts,O
of,O
revenues,O
and,O
expenses,O
during,O
the,O
reporting,O
periods,O
.,O
,O
We,O
regularly,O
evaluate,O
the,O
accounting,O
policies,O
and,O
estimates,O
that,O
we,O
use,O
to,O
prepare,O
our,O
financial,O
statements,O
.,O
,O
In,O
general,O
",",O
management,O
's,O
estimates,O
are,O
based,O
on,O
historical,O
experience,O
",",O
on,O
information,O
from,O
third,O
party,O
professionals,O
",",O
and,O
on,O
various,O
other,O
assumptions,O
that,O
are,O
believed,O
to,O
be,O
reasonable,O
under,O
the,O
facts,O
and,O
circumstances,O
.,O
,O
Actual,O
results,O
could,O
differ,O
from,O
those,O
estimates,O
made,O
by,O
management,O
.,O
,O
Due,O
to,O
the,O
uncertainty,O
of,O
our,O
ability,O
to,O
meet,O
our,O
current,O
operating,O
expenses,O
and,O
the,O
capital,O
expenses,O
noted,O
above,O
",",O
in,O
their,O
report,O
on,O
the,O
annual,O
financial,O
statements,O
as,O
of,O
December,O
31,O
",",O
2009,O
",",O
our,O
independent,O
registered,O
public,O
accounting,O
firm,O
included,O
an,O
explanatory,O
paragraph,O
regarding,O
concerns,O
about,O
our,O
ability,O
to,O
continue,O
as,O
a,O
going,O
concern,O
.,O
,O
Our,O
financial,O
statements,O
contain,O
additional,O
note,O
disclosures,O
describing,O
the,O
circumstances,O
that,O
lead,O
to,O
this,O
disclosure,O
by,O
our,O
independent,O
registered,O
public,O
accounting,O
firm,O
.,O
,O
The,O
Company,O
’,O
s,O
ability,O
to,O
continue,O
as,O
a,O
going,O
concern,O
is,O
subject,O
to,O
the,O
ability,O
of,O
the,O
Company,O
to,O
realize,O
a,O
profit,O
and/or,O
obtain,O
funding,O
from,O
outside,O
sources,O
.,O
,O
Management,O
’,O
s,O
plan,O
to,O
address,O
the,O
Company,O
’,O
s,O
ability,O
to,O
continue,O
as,O
a,O
going,O
concern,O
includes,O
:,O
(,O
1,O
),O
obtaining,O
funding,O
from,O
related,O
party,O
advances,O
and,O
private,O
placement,O
sources,O
;,O
(,O
2,O
),O
obtaining,O
additional,O
funding,O
from,O
the,O
sale,O
of,O
the,O
Company,O
’,O
s,O
securities,O
;,O
(,O
3,O
),O
establishing,O
revenues,O
from,O
prospective,O
business,O
opportunities,O
;,O
(,O
4,O
),O
obtaining,O
loans,O
and,O
grants,O
from,O
various,O
financial,O
institutions,O
where,O
possible,O
.,O
,O
Although,O
management,O
believes,O
that,O
it,O
will,O
be,O
able,O
to,O
obtain,O
the,O
necessary,O
funding,O
to,O
allow,O
the,O
Company,O
to,O
remain,O
a,O
going,O
concern,O
through,O
the,O
methods,O
discussed,O
above,O
",",O
there,O
can,O
be,O
no,O
assurances,O
that,O
such,O
methods,O
will,O
prove,O
successful,O
.,O
,O
As,O
a,O
“,O
smaller,O
reporting,O
company,O
”,O
as,O
defined,O
by,O
Item,O
10,O
of,O
Regulation,I-LEGISLATION/ACT
S-K,I-LEGISLATION/ACT
",",O
the,O
Company,O
is,O
not,O
required,O
to,O
provide,O
this,O
information,O
.,O
,O
To,O
the,O
Board,O
Directors,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
We,O
have,O
audited,O
the,O
accompanying,O
balance,O
sheets,O
of,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
“,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
”,O
),O
as,O
of,O
December,O
31,O
",",O
2009,O
and,O
2008,O
and,O
the,O
related,O
statements,O
of,O
expenses,O
",",O
shareholders,O
’,O
deficit,O
",",O
and,O
cash,O
flows,O
for,O
the,O
years,O
then,O
ended,O
.,O
,O
These,O
financial,O
statements,O
are,O
the,O
responsibility,O
of,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
',O
management,O
.,O
,O
Our,O
responsibility,O
is,O
to,O
express,O
an,O
opinion,O
on,O
these,O
consolidated,O
financial,O
statements,O
based,O
on,O
our,O
audits,O
.,O
,O
We,O
conducted,O
our,O
audits,O
in,O
accordance,O
with,O
the,O
standards,O
of,O
the,O
Public,I-GOVERNMENT
Company,I-GOVERNMENT
Accounting,I-GOVERNMENT
Oversight,I-GOVERNMENT
Board,I-GOVERNMENT
(,I-GOVERNMENT
United,I-GOVERNMENT
States,I-GOVERNMENT
),O
.,O
,O
Those,O
standards,O
require,O
that,O
we,O
plan,O
and,O
perform,O
an,O
audit,O
to,O
obtain,O
reasonable,O
assurance,O
about,O
whether,O
the,O
financial,O
statements,O
are,O
free,O
of,O
material,O
misstatement,O
.,O
,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
is,O
not,O
required,O
to,O
have,O
",",O
nor,O
were,O
we,O
engaged,O
to,O
perform,O
",",O
an,O
audit,O
of,O
its,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
Our,O
audits,O
included,O
consideration,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
a,O
basis,O
for,O
designing,O
audit,O
procedures,O
that,O
are,O
appropriate,O
in,O
the,O
circumstances,O
",",O
but,O
not,O
for,O
the,O
purpose,O
of,O
expressing,O
an,O
opinion,O
on,O
the,O
effectiveness,O
of,O
Beauty,O
Brands,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
Accordingly,O
",",O
we,O
express,O
no,O
such,O
opinion,O
.,O
,O
An,O
audit,O
also,O
includes,O
examining,O
",",O
on,O
a,O
test,O
basis,O
",",O
evidence,O
supporting,O
the,O
amounts,O
and,O
disclosures,O
in,O
the,O
financial,O
statements,O
",",O
assessing,O
the,O
accounting,O
principles,O
used,O
and,O
significant,O
estimates,O
made,O
by,O
management,O
",",O
as,O
well,O
as,O
evaluating,O
the,O
overall,O
financial,O
statement,O
presentation,O
.,O
,O
We,O
believe,O
that,O
our,O
audits,O
provide,O
a,O
reasonable,O
basis,O
for,O
our,O
opinion,O
.,O
,O
In,O
our,O
opinion,O
",",O
the,O
financial,O
statements,O
referred,O
to,O
above,O
present,O
fairly,O
",",O
in,O
all,O
material,O
respects,O
",",O
the,O
financial,O
position,O
of,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
as,O
of,O
December,O
31,O
",",O
2009,O
and,O
2008,O
and,O
the,O
results,O
of,O
operations,O
and,O
cash,O
flows,O
for,O
the,O
years,O
then,O
ended,O
",",O
in,O
conformity,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
.,O
,O
The,O
accompanying,O
financial,O
statements,O
have,O
been,O
prepared,O
assuming,O
that,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
will,O
continue,O
as,O
a,O
going,O
concern,O
.,O
,O
As,O
discussed,O
in,O
Note,O
2,O
to,O
the,O
financial,O
statements,O
",",O
Beauty,I-BUSINESS
Brands,I-BUSINESS
suffered,O
recurring,O
losses,O
from,O
operations,O
and,O
has,O
no,O
assets,O
",",O
which,O
raises,O
substantial,O
doubt,O
about,O
its,O
ability,O
to,O
continue,O
as,O
a,O
going,O
concern,O
.,O
,O
Management,O
’,O
s,O
plans,O
regarding,O
those,O
matters,O
also,O
are,O
described,O
in,O
Note,O
2,O
.,O
,O
The,O
financial,O
statements,O
do,O
not,O
include,O
any,O
adjustments,O
that,O
might,O
result,O
from,O
the,O
outcome,O
of,O
this,O
uncertainty,O
.,O
,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
is,O
a,O
holding,O
company,O
that,O
was,O
incorporated,O
in,O
Florida,I-LOCATION
in,O
1968,O
.,O
,O
It,O
began,O
operations,O
as,O
Chemair,I-BUSINESS
and,O
later,O
changed,O
its,O
name,O
to,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
The,O
company,O
ceased,O
all,O
operations,O
in,O
1993,O
and,O
is,O
currently,O
seeking,O
candidates,O
to,O
acquire,O
its,O
stock,O
or,O
to,O
complete,O
a,O
merger,O
.,O
,O
Use,O
of,O
Estimates,O
.,O
,O
The,O
preparation,O
of,O
financial,O
statements,O
in,O
conformity,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
requires,O
management,O
to,O
make,O
estimates,O
and,O
assumptions,O
that,O
affect,O
the,O
reported,O
amount,O
of,O
assets,O
and,O
liabilities,O
and,O
disclosures,O
of,O
contingent,O
assets,O
and,O
liabilities,O
at,O
the,O
date,O
of,O
the,O
financial,O
statements,O
and,O
the,O
reported,O
amounts,O
of,O
revenues,O
and,O
expenses,O
during,O
the,O
reporting,O
period,O
.,O
,O
While,O
it,O
is,O
believed,O
that,O
such,O
estimates,O
are,O
reasonable,O
",",O
actual,O
results,O
could,O
differ,O
significantly,O
from,O
those,O
estimates,O
.,O
,O
Cash,O
and,O
Cash,O
Equivalents,O
.,O
,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
considers,O
all,O
highly,O
liquid,O
investments,O
purchased,O
with,O
an,O
original,O
maturity,O
of,O
three,O
months,O
or,O
less,O
to,O
be,O
cash,O
equivalents,O
.,O
,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
has,O
no,O
revenues,O
.,O
,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
recognizes,O
deferred,O
tax,O
assets,O
and,O
liabilities,O
based,O
on,O
differences,O
between,O
the,O
financial,O
reporting,O
and,O
tax,O
bases,O
of,O
assets,O
and,O
liabilities,O
using,O
the,O
enacted,O
tax,O
rates,O
and,O
laws,O
that,O
are,O
expected,O
to,O
be,O
in,O
effect,O
when,O
the,O
differences,O
are,O
expected,O
to,O
be,O
recovered,O
.,O
,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
provides,O
a,O
valuation,O
allowance,O
for,O
deferred,O
tax,O
assets,O
for,O
which,O
it,O
does,O
not,O
consider,O
realization,O
of,O
such,O
assets,O
to,O
be,O
more,O
likely,O
than,O
not,O
.,O
,O
Basic,O
and,O
diluted,O
net,O
loss,O
per,O
share,O
.,O
,O
The,O
basic,O
net,O
loss,O
per,O
common,O
share,O
is,O
computed,O
by,O
dividing,O
the,O
net,O
loss,O
by,O
the,O
weighted,O
average,O
number,O
of,O
common,O
shares,O
outstanding,O
.,O
,O
Diluted,O
net,O
loss,O
per,O
common,O
share,O
is,O
computed,O
by,O
dividing,O
the,O
net,O
loss,O
adjusted,O
on,O
an,O
``,O
as,O
if,O
converted,O
'',O
basis,O
",",O
by,O
the,O
weighted,O
average,O
number,O
of,O
common,O
shares,O
outstanding,O
plus,O
potential,O
dilutive,O
securities,O
.,O
,O
For,O
the,O
years,O
ended,O
December,O
31,O
",",O
2009,O
and,O
2008,O
",",O
there,O
were,O
no,O
potential,O
dilutive,O
securities,O
.,O
,O
Stock,O
based,O
compensation,O
.,O
,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
adopted,O
ACS,I-LEGISLATION/ACT
718,O
on,O
January,O
1,O
",",O
2006,O
using,O
the,O
modified,O
prospective,O
method,O
.,O
,O
ACS,I-LEGISLATION/ACT
718,O
requires,O
all,O
share-based,O
payments,O
to,O
employees,O
",",O
including,O
stock,O
options,O
",",O
to,O
be,O
expensed,O
based,O
on,O
their,O
fair,O
value,O
over,O
the,O
required,O
award,O
service,O
period,O
.,O
,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
uses,O
the,O
straight,O
line,O
method,O
to,O
recognize,O
compensation,O
expense,O
related,O
to,O
share-based,O
payments,O
.,O
,O
In,O
prior,O
years,O
",",O
Beauty,I-BUSINESS
Brands,I-BUSINESS
followed,O
Accounting,I-GOVERNMENT
Principles,I-GOVERNMENT
Board,I-GOVERNMENT
No.,O
25,O
",",O
“,O
Accounting,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Issued,I-MISCELLANEOUS
to,I-MISCELLANEOUS
Employees,I-MISCELLANEOUS
",",O
”,O
in,O
accounting,O
for,O
its,O
stock,O
option,O
awards,O
to,O
employees,O
",",O
which,O
required,O
recording,O
share-based,O
compensation,O
expense,O
for,O
awards,O
that,O
were,O
issued,O
at,O
exercise,O
prices,O
less,O
than,O
fair,O
value,O
at,O
the,O
date,O
of,O
grant,O
.,O
,O
For,O
Beauty,I-BUSINESS
Brand,I-BUSINESS
’,O
s,O
non-employees,O
",",O
share-based,O
expense,O
is,O
recorded,O
in,O
accordance,O
with,O
Emerging,I-GOVERNMENT
Issues,I-GOVERNMENT
Task,I-GOVERNMENT
Force,I-GOVERNMENT
No.,O
96-18,O
",",O
“,O
Accounting,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
Instruments,I-MISCELLANEOUS
That,I-MISCELLANEOUS
Are,I-MISCELLANEOUS
Issued,I-MISCELLANEOUS
to,I-MISCELLANEOUS
Other,I-MISCELLANEOUS
Than,I-MISCELLANEOUS
Employees,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Acquistion,I-MISCELLANEOUS
",",I-MISCELLANEOUS
or,I-MISCELLANEOUS
in,I-MISCELLANEOUS
Conjunction,I-MISCELLANEOUS
with,I-MISCELLANEOUS
Selling,I-MISCELLANEOUS
",",I-MISCELLANEOUS
Goods,I-MISCELLANEOUS
or,I-MISCELLANEOUS
Services,I-MISCELLANEOUS
.,I-MISCELLANEOUS
”,O
,O
Recently,O
issued,O
accounting,O
pronouncements,O
.,O
,O
The,O
Company,O
implemented,O
ASC,I-LEGISLATION/ACT
855,O
",",O
Subsequent,I-MISCELLANEOUS
Events,I-MISCELLANEOUS
.,O
,O
This,O
standard,O
establishes,O
general,O
standards,O
of,O
accounting,O
for,O
and,O
disclosure,O
of,O
events,O
that,O
occur,O
after,O
the,O
balance,O
sheet,O
date,O
but,O
before,O
financial,O
statements,O
are,O
issued,O
.,O
,O
The,O
adoption,O
of,O
ASC,I-LEGISLATION/ACT
855,O
did,O
not,O
impact,O
the,O
Company,O
’,O
s,O
financial,O
position,O
or,O
results,O
of,O
operations,O
.,O
,O
The,O
Company,O
evaluated,O
all,O
events,O
or,O
transactions,O
that,O
occurred,O
after,O
December,O
31,O
",",O
2009,O
up,O
through,O
March,O
31,O
",",O
2010,O
the,O
date,O
the,O
Company,O
issued,O
these,O
financial,O
statements,O
.,O
,O
During,O
this,O
period,O
",",O
the,O
Company,O
had,O
no,O
subsequent,O
events,O
.,O
,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
does,O
not,O
expect,O
the,O
adoption,O
of,O
recently,O
issued,O
accounting,O
pronouncements,O
to,O
have,O
a,O
significant,O
impact,O
on,O
Beauty,I-BUSINESS
Brand,I-BUSINESS
’,O
s,O
results,O
of,O
operations,O
",",O
financial,O
position,O
or,O
cash,O
flow,O
.,O
,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
incurred,O
net,O
losses,O
and,O
negative,O
cash,O
flows,O
from,O
operations,O
in,O
fiscal,O
years,O
2009,O
and,O
2008,O
.,O
,O
These,O
conditions,O
raise,O
substantial,O
doubt,O
as,O
to,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
’,O
ability,O
to,O
continue,O
as,O
a,O
going,O
concern,O
.,O
,O
The,O
financial,O
statements,O
do,O
not,O
include,O
any,O
adjustments,O
that,O
might,O
be,O
necessary,O
if,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
is,O
unable,O
to,O
continue,O
as,O
a,O
going,O
concern,O
.,O
,O
Management,O
is,O
trying,O
to,O
raise,O
additional,O
capital,O
through,O
sales,O
of,O
common,O
stock,O
as,O
well,O
as,O
seeking,O
viable,O
candidates,O
to,O
purchase,O
the,O
Company,O
.,O
,O
$,O
"25,782",O
and,O
$,O
"33,134",O
of,O
expenses,O
were,O
paid,O
in,O
2009,O
and,O
2008,O
",",O
respectively,O
",",O
on,O
behalf,O
of,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
by,O
the,O
shareholders,O
and,O
is,O
reflected,O
as,O
a,O
capital,O
contribution,O
and,O
an,O
expense,O
for,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
.,O
,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
principal,O
office,O
is,O
in,O
the,O
office,O
of,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
principal,O
shareholder,O
pursuant,O
to,O
a,O
verbal,O
agreement,O
on,O
a,O
rent-free,O
month-to-month,O
basis,O
.,O
,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
uses,O
the,O
liability,O
method,O
",",O
where,O
deferred,O
tax,O
assets,O
and,O
liabilities,O
are,O
determined,O
based,O
on,O
the,O
expected,O
future,O
tax,O
consequences,O
of,O
temporary,O
differences,O
between,O
the,O
carrying,O
amounts,O
of,O
assets,O
and,O
liabilities,O
for,O
financial,O
and,O
income,O
tax,O
reporting,O
purposes,O
.,O
,O
During,O
fiscal,O
years,O
ended,O
2009,O
and,O
2008,O
",",O
Beauty,I-BUSINESS
Brands,I-BUSINESS
incurred,O
net,O
losses,O
and,O
",",O
therefore,O
",",O
has,O
no,O
tax,O
liability,O
.,O
,O
The,O
net,O
deferred,O
tax,O
asset,O
generated,O
by,O
the,O
loss,O
carry-forward,O
has,O
been,O
fully,O
reserved,O
.,O
,O
The,O
cumulative,O
net,O
operating,O
loss,O
carry-forward,O
is,O
approximately,O
$,O
"25,000",O
at,O
December,O
31,O
",",O
2009,O
",",O
and,O
will,O
expire,O
in,O
the,O
years,O
through,O
2029,O
.,O
,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Section,O
382,O
restricts,O
the,O
ability,O
to,O
use,O
these,O
carryforwards,O
whenever,O
an,O
ownership,O
change,O
as,O
defined,O
occurs,O
.,O
,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
incurred,O
such,O
an,O
ownership,O
change,O
in,O
2006,O
and,O
2008,O
.,O
,O
Because,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
’,O
s,O
stock,O
trading,O
has,O
been,O
limited,O
",",O
no,O
significant,O
losses,O
occurring,O
prior,O
to,O
that,O
date,O
are,O
available,O
.,O
,O
At,O
December,O
31,O
",",O
2009,O
and,O
2008,O
",",O
deferred,O
tax,O
assets,O
consisted,O
of,O
the,O
following,O
:,O
,O
In,O
a,O
private,O
transaction,O
not,O
involving,O
the,O
company,O
",",O
on,O
November,O
26,O
",",O
2008,O
",",O
the,O
then,O
controlling,O
shareholder,O
of,O
the,O
company,O
",",O
Deer,I-BUSINESS
Creek,I-BUSINESS
Capital,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
",",O
transferred,O
control,O
of,O
the,O
company,O
in,O
a,O
series,O
of,O
transactions,O
to,O
FormCap,I-BUSINESS
Advisory,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
.,I-BUSINESS
,O
CHANGES,O
IN,O
AND,O
DISAGREEMENTS,O
WITH,O
ACCOUNTANTS,O
ON,O
ACCOUNTING,O
AND,O
FINANCIAL,O
DISCLOSURES,O
.,O
,O
In,O
connection,O
with,O
the,O
two,O
most,O
recent,O
fiscal,O
years,O
or,O
subsequent,O
interim,O
periods,O
",",O
there,O
were,O
no,O
disagreements,O
between,O
the,O
Company,O
and,O
its,O
independent,O
accountant,O
on,O
any,O
matter,O
of,O
accounting,O
principles,O
or,O
practices,O
",",O
financial,O
statement,O
disclosure,O
or,O
auditing,O
scope,O
or,O
procedure,O
.,O
,O
Our,O
disclosure,O
controls,O
and,O
procedures,O
are,O
designed,O
to,O
ensure,O
that,O
information,O
required,O
to,O
be,O
disclosed,O
in,O
reports,O
that,O
we,O
file,O
or,O
submit,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
is,O
recorded,O
",",O
processed,O
",",O
summarized,O
and,O
reported,O
within,O
the,O
time,O
periods,O
specified,O
in,O
the,O
rules,O
and,O
forms,O
of,O
the,O
United,I-GOVERNMENT
States,I-GOVERNMENT
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
.,O
,O
Our,O
principal,O
executive,O
and,O
financial,O
officers,O
have,O
reviewed,O
the,O
effectiveness,O
of,O
our,O
``,O
disclosure,O
controls,O
and,O
procedures,O
'',O
(,O
as,O
defined,O
in,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
Rules,O
13a-14,O
(,O
c,O
),O
and,O
15d-14,O
(,O
c,O
),O
),O
within,O
the,O
end,O
of,O
the,O
period,O
covered,O
by,O
this,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
and,O
have,O
concluded,O
that,O
the,O
disclosure,O
controls,O
and,O
procedures,O
are,O
not,O
effective,O
due,O
to,O
a,O
material,O
weakness,O
to,O
ensure,O
that,O
material,O
information,O
relating,O
to,O
the,O
Company,O
is,O
recorded,O
",",O
processed,O
",",O
summarized,O
",",O
and,O
reported,O
in,O
a,O
timely,O
manner,O
.,O
,O
There,O
were,O
no,O
significant,O
changes,O
in,O
our,O
internal,O
controls,O
or,O
in,O
other,O
factors,O
that,O
could,O
significantly,O
affect,O
these,O
controls,O
subsequent,O
to,O
the,O
last,O
day,O
they,O
were,O
evaluated,O
by,O
our,O
principal,O
executive,O
and,O
financial,O
officers,O
.,O
,O
The,O
Company,O
’,O
s,O
management,O
is,O
responsible,O
for,O
establishing,O
and,O
maintaining,O
adequate,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
defined,O
in,O
Rules,O
13a-15,O
(,O
f,O
),O
and,O
15d-15,O
(,O
f,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
for,O
assessing,O
the,O
effectiveness,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
Because,O
of,O
its,O
inherent,O
limitations,O
",",O
internal,O
control,O
over,O
financial,O
reporting,O
may,O
not,O
prevent,O
or,O
detect,O
misstatements,O
.,O
,O
In,O
addition,O
",",O
projections,O
of,O
any,O
evaluation,O
of,O
effectiveness,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
to,O
future,O
periods,O
are,O
subject,O
to,O
the,O
risk,O
that,O
controls,O
may,O
become,O
inadequate,O
because,O
of,O
changes,O
in,O
conditions,O
or,O
a,O
deterioration,O
in,O
the,O
level,O
of,O
compliance,O
with,O
the,O
policies,O
or,O
procedures,O
.,O
,O
Our,O
management,O
conducted,O
an,O
evaluation,O
of,O
the,O
effectiveness,O
of,O
our,O
internal,O
control,O
over,O
financial,O
reporting,O
using,O
the,O
criteria,O
set,O
forth,O
by,O
the,O
Committee,I-BUSINESS
of,I-BUSINESS
Sponsoring,I-BUSINESS
Organizations,I-BUSINESS
of,I-BUSINESS
the,I-BUSINESS
Treadway,I-BUSINESS
Commission,I-BUSINESS
(,O
COSO,I-BUSINESS
),O
in,O
Internal,I-LEGISLATION/ACT
Control—Integrated,I-LEGISLATION/ACT
Framework,I-LEGISLATION/ACT
.,O
,O
Based,O
on,O
its,O
evaluation,O
",",O
our,O
management,O
concluded,O
that,O
there,O
is,O
a,O
material,O
weakness,O
in,O
our,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
A,O
material,O
weakness,O
is,O
a,O
deficiency,O
",",O
or,O
a,O
combination,O
of,O
control,O
deficiencies,O
",",O
in,O
internal,O
control,O
over,O
financial,O
reporting,O
such,O
that,O
there,O
is,O
a,O
reasonable,O
possibility,O
that,O
a,O
material,O
misstatement,O
of,O
the,O
Company,O
’,O
s,O
annual,O
or,O
interim,O
financial,O
statements,O
will,O
not,O
be,O
prevented,O
or,O
detected,O
on,O
a,O
timely,O
basis,O
.,O
,O
The,O
material,O
weakness,O
relates,O
to,O
the,O
lack,O
of,O
segregation,O
of,O
duties,O
in,O
financial,O
reporting,O
",",O
as,O
our,O
financial,O
reporting,O
and,O
all,O
accounting,O
functions,O
are,O
performed,O
by,O
an,O
external,O
consultant,O
with,O
no,O
oversight,O
by,O
a,O
professional,O
with,O
accounting,O
expertise,O
.,O
,O
Our,O
CEO,O
and,O
CFO,O
do,O
not,O
possess,O
accounting,O
expertise,O
.,O
,O
This,O
weakness,O
is,O
due,O
to,O
the,O
company,O
’,O
s,O
lack,O
of,O
working,O
capital,O
to,O
hire,O
additional,O
staff,O
.,O
,O
To,O
remedy,O
this,O
material,O
weakness,O
",",O
we,O
intend,O
to,O
engage,O
additional,O
resources,O
to,O
assist,O
with,O
financial,O
reporting,O
as,O
soon,O
as,O
our,O
finances,O
will,O
allow,O
.,O
,O
The,O
Company,O
’,O
s,O
management,O
carried,O
out,O
an,O
assessment,O
of,O
the,O
effectiveness,O
of,O
the,O
Company,O
’,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
of,O
December,O
31,O
",",O
2009,O
.,O
,O
The,O
Company,O
’,O
s,O
management,O
based,O
its,O
evaluation,O
on,O
criteria,O
set,O
forth,O
in,O
the,O
framework,O
in,O
Internal,I-LEGISLATION/ACT
Control—Integrated,I-LEGISLATION/ACT
Framework,I-LEGISLATION/ACT
issued,O
by,O
the,O
Committee,I-BUSINESS
of,I-BUSINESS
Sponsoring,I-BUSINESS
Organizations,I-BUSINESS
of,I-BUSINESS
the,I-BUSINESS
Treadway,I-BUSINESS
Commission,I-BUSINESS
.,O
,O
Based,O
on,O
that,O
assessment,O
",",O
management,O
has,O
concluded,O
that,O
the,O
Company,O
’,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
was,O
not,O
effective,O
as,O
of,O
December,O
31,O
",",O
2009,O
.,O
,O
This,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
does,O
not,O
include,O
an,O
attestation,O
report,O
of,O
the,O
Company,O
’,O
s,O
registered,O
public,O
accounting,O
firm,O
regarding,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
Management,O
’,O
s,O
report,O
was,O
not,O
subject,O
to,O
attestation,O
by,O
the,O
Company,O
’,O
s,O
registered,O
public,O
accounting,O
firm,O
pursuant,O
to,O
temporary,O
rules,O
of,O
the,O
SEC,I-GOVERNMENT
that,O
permit,O
the,O
Company,O
to,O
provide,O
only,O
management,O
’,O
s,O
report,O
in,O
this,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
.,O
,O
There,O
have,O
been,O
no,O
changes,O
in,O
the,O
Company,O
's,O
internal,O
control,O
over,O
financial,O
reporting,O
during,O
the,O
last,O
quarterly,O
period,O
covered,O
by,O
this,O
report,O
that,O
have,O
materially,O
affected,O
",",O
or,O
are,O
reasonably,O
likely,O
to,O
materially,O
affect,O
",",O
the,O
Company,O
's,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
The,O
Company,O
’,O
s,O
directors,O
",",O
their,O
ages,O
and,O
positions,O
and,O
the,O
periods,O
during,O
which,O
each,O
has,O
served,O
as,O
such,O
are,O
as,O
follows,O
:,O
,O
All,O
directors,O
will,O
hold,O
office,O
until,O
the,O
next,O
annual,O
stockholder,O
’,O
s,O
meeting,O
and,O
until,O
their,O
successors,O
have,O
been,O
elected,O
or,O
qualified,O
or,O
until,O
their,O
death,O
",",O
resignation,O
",",O
retirement,O
",",O
removal,O
",",O
or,O
disqualification,O
.,O
,O
Vacancies,O
on,O
the,O
board,O
will,O
be,O
filled,O
by,O
a,O
majority,O
vote,O
of,O
the,O
remaining,O
directors,O
.,O
,O
Officers,O
of,O
the,O
Company,O
serve,O
at,O
the,O
discretion,O
of,O
the,O
Board,O
of,O
Directors,O
.,O
,O
Altucher,I-PERSON
graduated,O
from,O
Cornell,I-BUSINESS
University,I-BUSINESS
with,O
a,O
B.A,O
.,O
,O
in,O
computer,O
science,O
and,O
pursued,O
graduate,O
work,O
in,O
computer,O
science,O
at,O
Carnegie,I-BUSINESS
Mellon,I-BUSINESS
University,I-BUSINESS
.,O
,O
Altucher,I-PERSON
is,O
currently,O
a,O
managing,O
member,O
of,O
our,O
principal,O
shareholder,O
",",O
FormCap,I-BUSINESS
Advisory,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
and,O
is,O
also,O
a,O
managing,O
member,O
of,O
Formula,I-BUSINESS
Capital,I-BUSINESS
Management,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
the,O
general,O
partner,O
of,O
Formula,I-BUSINESS
Capital,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
.,O
,O
Prior,O
to,O
forming,O
Formula,I-BUSINESS
Capital,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
Mr.,O
Altucher,I-PERSON
was,O
the,O
managing,O
partner,O
First,I-BUSINESS
Angel,I-BUSINESS
Capital,I-BUSINESS
",",O
a,O
$,O
30M,O
family,O
of,O
hedge,O
funds,O
and,O
fund,O
of,O
funds,O
.,O
,O
Altucher,I-PERSON
previously,O
acted,O
as,O
CEO/Director,O
of,O
Vaultus,I-BUSINESS
",",O
a,O
wireless,O
date,O
solutions,O
provider,O
for,O
Fortune,I-LEGISLATION/ACT
50,I-LEGISLATION/ACT
companies,O
.,O
,O
During,O
the,O
same,O
time,O
",",O
he,O
was,O
a,O
partner,O
in,O
(,O
212,O
),O
Ventures,O
",",O
a,O
New,I-LOCATION
York,I-LOCATION
based,O
venture,O
capital,O
firm,O
funded,O
by,O
Investcorp,I-BUSINESS
.,O
,O
Prior,O
to,O
Vaultus,O
",",O
Mr.,O
Altucher,I-PERSON
founded,O
Reset,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
an,O
Internet,I-MISCELLANEOUS
technology,O
firm,O
which,O
was,O
ultimately,O
sold,O
to,O
Xceed,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
Since,O
2002,O
",",O
Mr.,O
Altucher,I-PERSON
has,O
also,O
been,O
a,O
columnist,O
for,O
TheStreet.com,I-BUSINESS
",",O
Steet,I-MISCELLANEOUS
Insight,I-MISCELLANEOUS
",",O
Street,I-MISCELLANEOUS
View,I-MISCELLANEOUS
",",O
and,O
most,O
recently,O
",",O
Real,I-MISCELLANEOUS
Money,I-MISCELLANEOUS
.,O
,O
Altucher,I-PERSON
",",O
who,O
has,O
appeared,O
regularly,O
on,O
CNBC,I-BUSINESS
",",O
recently,O
authored,O
“,O
Trade,I-MISCELLANEOUS
Like,I-MISCELLANEOUS
A,I-MISCELLANEOUS
Hedge,I-MISCELLANEOUS
Fund,I-MISCELLANEOUS
”,O
(,O
Wiley,I-BUSINESS
2005,O
),O
",",O
“,O
TradeLike,I-MISCELLANEOUS
Warren,I-MISCELLANEOUS
Buffet,I-MISCELLANEOUS
”,O
(,O
Wiley,I-BUSINESS
2005,O
),O
",",O
and,O
$,I-MISCELLANEOUS
superCash,I-MISCELLANEOUS
(,O
2006,O
),O
.,O
,O
He,O
is,O
also,O
a,O
US-ranked,I-MISCELLANEOUS
chess,O
master,O
.,O
,O
Kelly,I-PERSON
is,O
currently,O
a,O
managing,O
member,O
of,O
our,O
principal,O
shareholder,O
",",O
FormCap,I-BUSINESS
Advisory,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
and,O
is,O
also,O
a,O
managing,O
member,O
of,O
Formula,I-BUSINESS
Capital,I-BUSINESS
Management,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
the,O
general,O
partner,O
of,O
Formula,I-BUSINESS
Capital,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
.,O
,O
Kelly,I-PERSON
graduated,O
Magna,O
Cum,O
Laude,O
from,O
Georgetown,I-BUSINESS
University,I-BUSINESS
with,O
a,O
B.S,O
.,O
,O
Prior,O
to,O
forming,O
Formula,I-BUSINESS
Capital,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
Mr.,O
Kelly,I-PERSON
had,O
been,O
a,O
partner,O
at,O
First,I-BUSINESS
Angel,I-BUSINESS
Capital,I-BUSINESS
",",O
a,O
$,O
30M,O
family,O
of,O
hedge,O
funds,O
and,O
fund,O
of,O
funds,O
.,O
,O
Kelly,I-PERSON
was,O
a,O
Principal,O
with,O
(,I-BUSINESS
212,I-BUSINESS
),I-BUSINESS
Ventures,I-BUSINESS
",",O
a,O
New,I-LOCATION
York,I-LOCATION
based,O
venture,O
capital,O
funded,O
by,O
Investcorp,I-BUSINESS
where,O
he,O
focused,O
primarily,O
on,O
analyzing,O
emerging,O
companies,O
.,O
,O
Prior,O
to,O
(,I-BUSINESS
212,I-BUSINESS
),I-BUSINESS
Ventures,I-BUSINESS
",",O
Mr.,O
Kelly,I-PERSON
was,O
an,O
Associate,O
with,O
Bruckmann,I-BUSINESS
",",I-BUSINESS
Rosser,I-BUSINESS
",",I-BUSINESS
Sherill,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",O
a,O
$,O
1.2B,O
private,O
equity,O
firm,O
specializing,O
in,O
management,O
buyouts,O
and,O
recapitalizations,O
of,O
high,O
quality,O
",",O
middle,O
market,O
companies,O
.,O
,O
Kelly,I-PERSON
began,O
his,O
career,O
as,O
an,O
Analyst,O
with,O
Credit,I-BUSINESS
Suisse,I-BUSINESS
First,I-BUSINESS
Boston,I-BUSINESS
in,O
its,O
leveraged,O
Finance,O
Group,O
",",O
where,O
he,O
primarily,O
focused,O
on,O
analyzing,O
and,O
executing,O
various,O
financing,O
alternatives,O
",",O
including,O
debt,O
",",O
equity,O
and,O
hybrid,O
securities,O
for,O
leveraged,O
buyouts,O
",",O
equity,O
offerings,O
and,O
principal,O
investments,O
across,O
several,O
industries,O
.,O
,O
Not,O
Applicable,O
",",O
the,O
Company,O
has,O
no,O
employees,O
.,O
,O
There,O
are,O
no,O
family,O
relationships,O
among,O
any,O
directors,O
or,O
executive,O
officers,O
.,O
,O
(,O
d,O
),O
Involvement,O
in,O
certain,O
legal,O
proceedings,O
.,O
,O
No,O
director,O
or,O
executive,O
officer,O
has,O
been,O
involved,O
in,O
any,O
of,O
the,O
following,O
legal,O
proceedings,O
during,O
the,O
past,O
5,O
years,O
:,O
,O
(,O
1,O
),O
Any,O
bankruptcy,O
petition,O
filed,O
by,O
or,O
against,O
any,O
business,O
of,O
which,O
such,O
person,O
was,O
a,O
general,O
partner,O
or,O
executive,O
officer,O
either,O
at,O
the,O
time,O
of,O
the,O
bankruptcy,O
or,O
within,O
two,O
years,O
prior,O
to,O
that,O
time,O
;,O
,O
(,O
2,O
),O
Any,O
conviction,O
in,O
a,O
criminal,O
proceeding,O
or,O
being,O
subject,O
to,O
a,O
pending,O
criminal,O
proceeding,O
(,O
excluding,O
traffic,O
violations,O
and,O
other,O
minor,O
offenses,O
),O
;,O
,O
(,O
4,O
),O
Being,O
found,O
by,O
a,O
court,O
of,O
competent,O
jurisdiction,O
(,O
in,O
a,O
civil,O
action,O
),O
",",O
the,O
Commission,O
or,O
the,O
Commodity,I-GOVERNMENT
Futures,I-GOVERNMENT
Trading,I-GOVERNMENT
Commission,I-GOVERNMENT
to,O
have,O
violated,O
a,O
federal,O
or,O
state,O
securities,O
or,O
commodities,O
law,O
",",O
and,O
the,O
judgment,O
has,O
not,O
been,O
reversed,O
",",O
suspended,O
",",O
or,O
vacated,O
.,O
,O
Our,O
Audit,O
Committee,O
is,O
comprised,O
of,O
our,O
two,O
officers,O
",",O
Dan,I-PERSON
Kelly,I-PERSON
and,O
James,I-PERSON
Altucher,I-PERSON
.,O
,O
Section,O
16,O
(,O
a,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
requires,O
our,O
directors,O
and,O
executive,O
officers,O
and,O
persons,O
who,O
beneficially,O
own,O
more,O
than,O
ten,O
percent,O
of,O
our,O
Common,O
Stock,O
(,O
collectively,O
",",O
the,O
“,O
Reporting,O
Persons,O
”,O
),O
to,O
report,O
their,O
ownership,O
of,O
and,O
transactions,O
in,O
our,O
Common,O
Stock,O
to,O
the,O
SEC,I-GOVERNMENT
.,O
,O
Copies,O
of,O
these,O
reports,O
are,O
also,O
required,O
to,O
be,O
supplied,O
to,O
us,O
.,O
,O
On,O
March,O
31,O
",",O
2010,O
",",O
the,O
members,O
of,O
our,O
principal,O
shareholder,O
",",O
FormCap,I-BUSINESS
Advisory,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
James,I-PERSON
Altucher,I-PERSON
and,O
Dan,I-PERSON
Kelly,I-PERSON
",",O
filed,O
forms,I-MISCELLANEOUS
3,I-MISCELLANEOUS
and,I-MISCELLANEOUS
4,I-MISCELLANEOUS
regarding,O
their,O
respective,O
initial,O
appointments,O
as,O
our,O
Chairman,O
and,O
Director,O
and,O
reflecting,O
the,O
acquisition,O
by,O
FormCap,I-BUSINESS
Advisors,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
of,O
the,O
majority,O
of,O
our,O
issued,O
and,O
outstanding,O
common,O
stock,O
in,O
November,O
2008,O
.,O
,O
The,O
failure,O
by,O
Mr.,O
Altucher,I-PERSON
and,O
Mr.,O
.,O
,O
Kelly,I-PERSON
to,O
timely,O
file,O
said,O
forms,I-MISCELLANEOUS
3,I-MISCELLANEOUS
and,I-MISCELLANEOUS
4,I-MISCELLANEOUS
was,O
inadvertent,O
.,O
,O
Altucher,I-PERSON
nor,O
Mr.,O
Kelly,I-PERSON
made,O
any,O
public,O
or,O
private,O
purchases,O
or,O
sales,O
of,O
our,O
common,O
stock,O
or,O
other,O
equities,O
other,O
than,O
indirectly,O
",",O
through,O
the,O
November,O
2008,O
transaction,O
.,O
,O
We,O
have,O
not,O
adopted,O
a,O
Code,O
of,O
Ethics,O
given,O
our,O
limited,O
operations,O
.,O
,O
We,O
expect,O
that,O
our,O
Board,O
of,O
Directors,O
following,O
a,O
merger,O
or,O
other,O
acquisition,O
transaction,O
will,O
adopt,O
a,O
Code,O
of,O
Ethics,O
.,O
,O
None,O
of,O
our,O
directors,O
receive,O
compensation,O
for,O
their,O
services,O
as,O
directors,O
.,O
,O
By,O
Sale,O
and,O
Repurchase,O
Agreement,O
dated,O
March,O
23,O
",",O
2007,O
",",O
by,O
and,O
between,O
Terrence,I-PERSON
A,I-PERSON
Tecco,I-PERSON
",",O
individually,O
and,O
as,O
Trustee,O
of,O
the,O
Tecco,I-BUSINESS
Family,I-BUSINESS
Trust,I-BUSINESS
(,O
collectively,O
“,O
Tecco,I-BUSINESS
”,O
),O
",",O
and,O
Deer,I-BUSINESS
Creek,I-BUSINESS
Capital,I-BUSINESS
",",I-BUSINESS
LP,I-BUSINESS
",",O
the,O
Tecco,I-BUSINESS
Family,I-BUSINESS
Trust,I-BUSINESS
transferred,O
"125,000",O
shares,O
of,O
the,O
Company,O
’,O
s,O
common,O
stock,O
to,O
Deer,I-BUSINESS
Creek,I-BUSINESS
",",O
together,O
with,O
common,O
stock,O
of,O
Core,I-BUSINESS
Technologies,I-BUSINESS
(,I-BUSINESS
Pennsylvania,I-BUSINESS
),I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
to,O
Deer,I-BUSINESS
Creek,I-BUSINESS
for,O
total,O
consideration,O
of,O
$,O
"12,000",O
.,O
,O
The,O
agreement,O
provided,O
Tecco,O
with,O
the,O
right,O
for,O
90,O
days,O
of,O
the,O
date,O
thereof,O
",",O
time,O
of,O
the,O
essence,O
",",O
to,O
repurchase,O
the,O
shares,O
so,O
transferred,O
for,O
$,O
"12,350",O
",",O
plus,O
interest,O
at,O
fifteen,O
percent,O
on,O
the,O
principal,O
amount,O
.,O
,O
Tecco,I-BUSINESS
never,O
repurchased,O
the,O
shares,O
in,O
either,O
company,O
.,O
,O
By,O
Exchange,O
Agreement,O
dated,O
on,O
or,O
about,O
November,O
26,O
",",O
2008,O
",",O
by,O
and,O
among,O
Deer,I-BUSINESS
Creek,I-BUSINESS
Capital,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
(,O
“,O
Deer,I-BUSINESS
Creek,I-BUSINESS
”,O
),O
",",O
RPM,I-BUSINESS
Trading,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
.,I-BUSINESS
,O
(,O
“,O
RPM,I-BUSINESS
”,O
),O
",",O
Formula,I-BUSINESS
Capital,I-BUSINESS
Management,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
Formula,I-BUSINESS
Capital,I-BUSINESS
”,O
),O
",",O
and,O
FormCap,I-BUSINESS
Advisory,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
FormCap,I-BUSINESS
”,O
),O
",",O
RPM,I-BUSINESS
transferred,O
to,O
Deer,I-BUSINESS
Creek,I-BUSINESS
"1,537,400",O
shares,O
of,O
the,O
Company,O
’,O
s,O
common,O
stock,O
",",O
whereupon,O
",",O
Deer,I-BUSINESS
Creek,I-BUSINESS
immediately,O
transferred,O
a,O
total,O
of,O
"15,193,000",O
shares,O
of,O
the,O
company,O
’,O
s,O
common,O
stock,O
to,O
FormCap,I-BUSINESS
at,O
the,O
request,O
of,O
Formula,I-BUSINESS
Capital,I-BUSINESS
",",O
which,O
request,O
was,O
made,O
in,O
connection,O
with,O
the,O
redemption,O
by,O
Formula,I-BUSINESS
Capital,I-BUSINESS
of,O
its,O
investment,O
in,O
Deer,I-BUSINESS
Creek,I-BUSINESS
.,O
,O
RPM,I-BUSINESS
’,O
s,O
transfer,O
of,O
its,O
shares,O
of,O
the,O
Company,O
’,O
s,O
common,O
stock,O
was,O
in,O
exchange,O
for,O
the,O
controlling,O
ownership,O
interest,O
held,O
by,O
Deer,I-BUSINESS
Creek,I-BUSINESS
in,O
another,O
corporation,O
",",O
Core,I-BUSINESS
Technologies,I-BUSINESS
(,I-BUSINESS
Pennsylvania,I-BUSINESS
),I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
The,O
result,O
of,O
this,O
exchange,O
was,O
that,O
FormCap,I-BUSINESS
became,O
the,O
Company,O
’,O
s,O
majority,O
shareholder,O
and,O
RPM,I-BUSINESS
and,O
Deer,I-BUSINESS
Creek,I-BUSINESS
divested,O
themselves,O
of,O
their,O
entire,O
ownership,O
interest,O
in,O
the,O
Company,O
.,O
,O
Dan,I-PERSON
Kelly,I-PERSON
and,O
James,I-PERSON
Altucher,I-PERSON
are,O
the,O
owners,O
and,O
managing,O
members,O
of,O
FormCap,I-BUSINESS
Advisory,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
.,I-BUSINESS
,O
Our,O
Board,O
of,O
Directors,O
consists,O
of,O
James,I-PERSON
Altucher,I-PERSON
",",O
Dan,I-PERSON
Kelly,I-PERSON
and,O
Terrence,I-PERSON
Tecco,I-PERSON
.,O
,O
None,O
of,O
them,O
are,O
independent,O
as,O
such,O
term,O
is,O
defined,O
by,O
a,O
national,O
securities,O
exchange,O
or,O
an,O
inter-dealer,O
quotation,O
system,O
.,O
,O
During,O
the,O
fiscal,O
year,O
ended,O
December,O
31,O
",",O
2009,O
",",O
FormCap,I-BUSINESS
Advisory,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
our,O
principal,O
shareholder,O
",",O
made,O
a,O
$,O
"25,782",O
capital,O
contribution,O
to,O
us,O
.,O
,O
The,O
aggregate,O
fees,O
billed,O
for,O
each,O
of,O
the,O
last,O
two,O
fiscal,O
years,O
for,O
professional,O
services,O
rendered,O
by,O
the,O
principal,O
accountant,O
for,O
the,O
audit,O
of,O
the,O
registrants,O
financial,O
statements,O
included,O
in,O
the,O
company,O
’,O
s,O
form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
",",O
10SB/A,I-MISCELLANEOUS
as,O
well,O
as,O
the,O
company,O
’,O
s,O
annual,O
financial,O
statements,O
and,O
to,O
review,O
the,O
financial,O
statements,O
included,O
in,O
the,O
registrant,O
’,O
s,O
Form,I-MISCELLANEOUS
10-QSB,I-MISCELLANEOUS
or,O
services,O
that,O
are,O
normally,O
provided,O
by,O
the,O
accountant,O
in,O
connection,O
with,O
statutory,O
and,O
regulatory,O
filings,O
or,O
engagements,O
for,O
those,O
fiscal,O
years,O
are,O
:,O
,O
In,O
accordance,O
with,O
the,O
requirements,O
of,O
Section,O
13,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
the,O
registrant,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
.,O
,O
BEAUTY,I-BUSINESS
BRANDS,I-BUSINESS
GROUP,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
I,O
",",O
James,I-PERSON
Altucher,I-PERSON
",",O
certify,O
that,O
:,O
,O
In,O
connection,O
with,O
this,O
Annual,O
Report,O
of,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
“,O
Company,O
”,O
),O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ending,O
December,O
31,O
",",O
2009,O
",",O
as,O
filed,O
with,O
the,O
Securities,O
and,O
Exchange,O
Commission,O
on,O
the,O
date,O
hereof,O
(,O
the,O
“,O
Report,O
”,O
),O
",",O
I,O
",",O
James,I-PERSON
Altucher,I-PERSON
",",O
Chairman,O
of,O
the,O
Board,O
of,O
Directors,O
and,O
President,O
of,O
the,O
Company,O
",",O
certify,O
to,O
the,O
best,O
of,O
my,O
knowledge,O
",",O
pursuant,O
to,O
18,O
U.S.C.,I-LEGISLATION/ACT
1350,O
",",O
as,O
adopted,O
pursuant,O
to,O
Sec.,O
906,O
of,O
the,O
Sarbanes-Oxley,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
2002,I-LEGISLATION/ACT
",",O
that,O
:,O
,O
In,O
connection,O
with,O
this,O
Annual,O
Report,O
of,O
Beauty,I-BUSINESS
Brands,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
“,O
Company,O
”,O
),O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ending,O
December,O
31,O
",",O
2009,O
",",O
as,O
filed,O
with,O
the,O
Securities,O
and,O
Exchange,O
Commission,O
on,O
the,O
date,O
hereof,O
(,O
the,O
“,O
Report,O
”,O
),O
",",O
I,O
",",O
Dan,I-PERSON
Kelly,I-PERSON
",",O
Directors,O
and,O
Chief,O
Financial,O
Officer,O
of,O
the,O
Company,O
",",O
certify,O
to,O
the,O
best,O
of,O
my,O
knowledge,O
",",O
pursuant,O
to,O
18,O
U.S.C.,I-LEGISLATION/ACT
1350,O
",",O
as,O
adopted,O
pursuant,O
to,O
Sec.,O
906,O
of,O
the,O
Sarbanes-Oxley,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
2002,I-LEGISLATION/ACT
",",O
that,O
:,O
,O
-DOCSTART-,O
,O
Check,O
the,O
appropriate,O
box,O
below,O
if,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filing,O
is,O
intended,O
to,O
simultaneously,O
satisfy,O
the,O
filing,O
obligation,O
of,O
the,O
registrant,O
under,O
any,O
of,O
the,O
following,O
provisions,O
:,O
,O
SunGard,I-BUSINESS
Data,I-BUSINESS
Systems,I-BUSINESS
Inc.,I-BUSINESS
is,O
an,O
indirect,O
wholly,O
owned,O
subsidiary,O
of,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
II,I-BUSINESS
",",O
which,O
is,O
a,O
subsidiary,O
of,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
(,O
collectively,O
",",O
SunGard,I-BUSINESS
or,O
the,O
Company,O
),O
.,O
,O
We,O
are,O
filing,O
this,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
to,O
revise,O
the,O
presentation,O
of,O
the,O
segment,O
information,O
contained,O
in,O
Notes,O
1,O
and,O
12,O
of,O
Notes,O
to,O
Consolidated,O
Financial,O
Statements,O
initially,O
provided,O
in,O
the,O
Company,O
s,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
filed,O
on,O
March,O
1,O
",",O
2011,O
(,O
collectively,O
",",O
the,O
2010,I-MISCELLANEOUS
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
),O
.,O
,O
This,O
revised,O
presentation,O
reflects,O
the,O
transfer,O
of,O
the,O
Company,O
s,O
K-12,O
business,O
from,O
its,O
Public,O
Sector,O
segment,O
to,O
its,O
Higher,O
Education,O
segment,O
(,O
Transfer,O
),O
which,O
took,O
effect,O
as,O
of,O
January,O
1,O
",",O
2011,O
.,O
,O
To,O
provide,O
comparability,O
",",O
we,O
have,O
revised,O
the,O
segment,O
information,O
provided,O
in,O
our,O
2010,I-MISCELLANEOUS
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
to,O
reflect,O
the,O
Transfer,O
.,O
,O
The,O
change,O
in,O
segment,O
measurement,O
had,O
no,O
impact,O
on,O
our,O
historical,O
consolidated,O
financial,O
position,O
",",O
results,O
of,O
operations,O
",",O
or,O
cash,O
flows,O
.,O
,O
We,O
have,O
updated,O
and,O
revised,O
the,O
items,O
in,O
our,O
2010,I-MISCELLANEOUS
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
that,O
were,O
impacted,O
by,O
the,O
Transfer,O
.,O
,O
We,O
have,O
not,O
otherwise,O
updated,O
our,O
2010,I-MISCELLANEOUS
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
any,O
other,O
activities,O
or,O
events,O
occurring,O
after,O
the,O
original,O
filing,O
date,O
.,O
,O
The,O
following,O
summarizes,O
the,O
sections,O
of,O
our,O
2010,I-MISCELLANEOUS
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
that,O
have,O
been,O
updated,O
from,O
their,O
previous,O
presentation,O
to,O
reflect,O
the,O
Transfer,O
:,O
,O
The,O
revised,O
financial,O
information,O
does,O
not,O
represent,O
a,O
restatement,O
of,O
previously,O
issued,O
financial,O
statements,O
.,O
,O
The,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
should,O
be,O
read,O
in,O
conjunction,O
with,O
our,O
Quarterly,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
for,O
the,O
quarter,O
ended,O
March,O
31,O
",",O
2011,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
hereunto,O
duly,O
authorized,O
.,O
,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
hereunto,O
duly,O
authorized,O
.,O
,O
SunGard,I-BUSINESS
Data,I-BUSINESS
Systems,I-BUSINESS
Inc.,I-BUSINESS
,O
We,O
hereby,O
consent,O
to,O
the,O
incorporation,O
by,O
reference,O
in,O
the,O
Registration,O
Statements,O
on,O
Form,I-MISCELLANEOUS
S-8,I-MISCELLANEOUS
(,O
No.,O
333-163309,O
),O
of,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
and,O
Form,I-MISCELLANEOUS
S-8,I-MISCELLANEOUS
(,O
No.,O
333-163311,O
),O
of,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
II,I-BUSINESS
of,O
our,O
reports,O
dated,O
March,O
1,O
",",O
2011,O
",",O
except,O
for,O
the,O
Trade,I-MISCELLANEOUS
Name,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Goodwill,I-MISCELLANEOUS
section,O
in,O
Note,O
1,O
and,O
Note,O
12,O
",",O
as,O
to,O
which,O
the,O
date,O
is,O
May,O
25,O
",",O
2011,O
",",O
relating,O
to,O
the,O
financial,O
statements,O
and,O
the,O
effectiveness,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
which,O
appear,O
in,O
this,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
.,O
,O
Financial,O
Statements,O
and,O
Supplementary,O
Data,O
Exhibit,O
99.1,O
As,O
revised,O
to,O
reflect,O
the,O
transfer,O
of,O
SunGard,I-BUSINESS
s,O
K-12,O
business,O
from,O
its,O
Public,O
Sector,O
segment,O
to,O
its,O
Higher,O
Education,O
segment,O
.,O
,O
Management,O
is,O
responsible,O
for,O
establishing,O
and,O
maintaining,O
adequate,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
Internal,O
control,O
over,O
financial,O
reporting,O
is,O
a,O
process,O
to,O
provide,O
reasonable,O
assurance,O
regarding,O
the,O
reliability,O
of,O
the,O
Company,O
s,O
financial,O
reporting,O
for,O
external,O
purposes,O
in,O
accordance,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
.,O
,O
Because,O
of,O
its,O
inherent,O
limitations,O
",",O
internal,O
control,O
over,O
financial,O
reporting,O
may,O
not,O
prevent,O
or,O
detect,O
misstatements,O
.,O
,O
Also,O
",",O
projections,O
of,O
any,O
evaluation,O
of,O
effectiveness,O
to,O
future,O
periods,O
are,O
subject,O
to,O
the,O
risk,O
that,O
controls,O
may,O
become,O
inadequate,O
because,O
of,O
changes,O
in,O
conditions,O
",",O
or,O
that,O
the,O
degree,O
of,O
compliance,O
with,O
the,O
policies,O
and,O
procedures,O
may,O
deteriorate,O
.,O
,O
Management,O
conducted,O
an,O
assessment,O
of,O
the,O
Company,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
based,O
on,O
the,O
criteria,O
established,O
by,O
the,O
Committee,I-BUSINESS
of,I-BUSINESS
Sponsoring,I-BUSINESS
Organizations,I-BUSINESS
of,I-BUSINESS
the,I-BUSINESS
Treadway,I-BUSINESS
Commission,I-BUSINESS
in,O
Internal,I-LEGISLATION/ACT
Control—Integrated,I-LEGISLATION/ACT
Framework,I-LEGISLATION/ACT
.,O
,O
Based,O
on,O
the,O
assessment,O
",",O
management,O
concluded,O
that,O
",",O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
the,O
Company,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
is,O
effective,O
based,O
on,O
those,O
criteria,O
.,O
,O
The,O
independent,O
registered,O
public,O
accounting,O
firm,O
that,O
audited,O
the,O
financial,O
statements,O
included,O
in,O
this,O
annual,O
report,O
has,O
issued,O
an,O
attestation,O
report,O
on,O
the,O
Company,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
The,O
attestation,O
report,O
is,O
included,O
herein,O
.,O
,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
II,I-BUSINESS
SunGard,B-BUSINESS
Data,I-BUSINESS
Systems,I-BUSINESS
Inc.,I-BUSINESS
,O
To,O
the,O
Board,O
of,O
Directors,O
and,O
Stockholders,O
of,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
:,O
In,O
our,O
opinion,O
",",O
the,O
accompanying,O
consolidated,O
balance,O
sheets,O
and,O
the,O
related,O
statements,O
of,O
operations,O
",",O
of,O
changes,O
in,O
equity,O
and,O
of,O
cash,O
flows,O
present,O
fairly,O
",",O
in,O
all,O
material,O
respects,O
",",O
the,O
financial,O
position,O
of,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
and,O
its,O
subsidiaries,O
(,O
SCC,I-BUSINESS
),O
at,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
and,O
the,O
results,O
of,O
their,O
operations,O
and,O
their,O
cash,O
flows,O
for,O
each,O
of,O
the,O
three,O
years,O
in,O
the,O
period,O
ended,O
December,O
31,O
",",O
2010,O
in,O
conformity,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
.,O
,O
Also,O
in,O
our,O
opinion,O
",",O
SCC,I-BUSINESS
maintained,O
",",O
in,O
all,O
material,O
respects,O
",",O
effective,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
based,O
on,O
criteria,O
established,O
in,O
Internal,I-MISCELLANEOUS
Control—Integrated,I-MISCELLANEOUS
Framework,I-MISCELLANEOUS
issued,O
by,O
the,O
Committee,I-BUSINESS
of,I-BUSINESS
Sponsoring,I-BUSINESS
Organizations,I-BUSINESS
of,I-BUSINESS
the,I-BUSINESS
Treadway,I-BUSINESS
Commission,I-BUSINESS
(,O
COSO,I-BUSINESS
),O
.,O
,O
SCC,I-BUSINESS
s,O
management,O
is,O
responsible,O
for,O
these,O
financial,O
statements,O
",",O
for,O
maintaining,O
effective,O
internal,O
control,O
over,O
financial,O
reporting,O
and,O
for,O
its,O
assessment,O
of,O
the,O
effectiveness,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
included,O
in,O
Management,I-LEGISLATION/ACT
s,I-LEGISLATION/ACT
Report,I-LEGISLATION/ACT
on,I-LEGISLATION/ACT
Internal,I-LEGISLATION/ACT
Control,I-LEGISLATION/ACT
over,I-LEGISLATION/ACT
Financial,I-LEGISLATION/ACT
Reporting,I-LEGISLATION/ACT
.,O
,O
Our,O
responsibility,O
is,O
to,O
express,O
opinions,O
on,O
these,O
financial,O
statements,O
and,O
on,O
SCC,I-BUSINESS
s,O
internal,O
control,O
over,O
financial,O
reporting,O
based,O
on,O
our,O
audits,O
(,O
which,O
was,O
an,O
integrated,O
audit,O
in,O
2010,O
),O
.,O
,O
We,O
conducted,O
our,O
audits,O
in,O
accordance,O
with,O
the,O
standards,O
of,O
the,O
Public,I-GOVERNMENT
Company,I-GOVERNMENT
Accounting,I-GOVERNMENT
Oversight,I-GOVERNMENT
Board,I-GOVERNMENT
(,O
United,I-LOCATION
States,I-LOCATION
),O
.,O
,O
Those,O
standards,O
require,O
that,O
we,O
plan,O
and,O
perform,O
the,O
audits,O
to,O
obtain,O
reasonable,O
assurance,O
about,O
whether,O
the,O
financial,O
statements,O
are,O
free,O
of,O
material,O
misstatement,O
and,O
whether,O
effective,O
internal,O
control,O
over,O
financial,O
reporting,O
was,O
maintained,O
in,O
all,O
material,O
respects,O
.,O
,O
Our,O
audits,O
of,O
the,O
financial,O
statements,O
included,O
examining,O
",",O
on,O
a,O
test,O
basis,O
",",O
evidence,O
supporting,O
the,O
amounts,O
and,O
disclosures,O
in,O
the,O
financial,O
statements,O
",",O
assessing,O
the,O
accounting,O
principles,O
used,O
and,O
significant,O
estimates,O
made,O
by,O
management,O
",",O
and,O
evaluating,O
the,O
overall,O
financial,O
statement,O
presentation,O
.,O
,O
Our,O
audit,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
included,O
obtaining,O
an,O
understanding,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
assessing,O
the,O
risk,O
that,O
a,O
material,O
weakness,O
exists,O
",",O
and,O
testing,O
and,O
evaluating,O
the,O
design,O
and,O
operating,O
effectiveness,O
of,O
internal,O
control,O
based,O
on,O
the,O
assessed,O
risk,O
.,O
,O
Our,O
audits,O
also,O
included,O
performing,O
such,O
other,O
procedures,O
as,O
we,O
considered,O
necessary,O
in,O
the,O
circumstances,O
.,O
,O
We,O
believe,O
that,O
our,O
audits,O
provide,O
a,O
reasonable,O
basis,O
for,O
our,O
opinions,O
.,O
,O
A,O
company,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
is,O
a,O
process,O
designed,O
to,O
provide,O
reasonable,O
assurance,O
regarding,O
the,O
reliability,O
of,O
financial,O
reporting,O
and,O
the,O
preparation,O
of,O
financial,O
statements,O
for,O
external,O
purposes,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
.,O
,O
A,O
company,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
includes,O
those,O
policies,O
and,O
procedures,O
that,O
(,O
i,O
),O
pertain,O
to,O
the,O
maintenance,O
of,O
records,O
that,O
",",O
in,O
reasonable,O
detail,O
",",O
accurately,O
and,O
fairly,O
reflect,O
the,O
transactions,O
and,O
dispositions,O
of,O
the,O
assets,O
of,O
the,O
company,O
;,O
(,O
ii,O
),O
provide,O
reasonable,O
assurance,O
that,O
transactions,O
are,O
recorded,O
as,O
necessary,O
to,O
permit,O
preparation,O
of,O
financial,O
statements,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
",",O
and,O
that,O
receipts,O
and,O
expenditures,O
of,O
the,O
company,O
are,O
being,O
made,O
only,O
in,O
accordance,O
with,O
authorizations,O
of,O
management,O
and,O
directors,O
of,O
the,O
company,O
;,O
and,O
(,O
iii,O
),O
provide,O
reasonable,O
assurance,O
regarding,O
prevention,O
or,O
timely,O
detection,O
of,O
unauthorized,O
acquisition,O
",",O
use,O
",",O
or,O
disposition,O
of,O
the,O
company,O
s,O
assets,O
that,O
could,O
have,O
a,O
material,O
effect,O
on,O
the,O
financial,O
statements,O
.,O
,O
Because,O
of,O
its,O
inherent,O
limitations,O
",",O
internal,O
control,O
over,O
financial,O
reporting,O
may,O
not,O
prevent,O
or,O
detect,O
misstatements,O
.,O
,O
Also,O
",",O
projections,O
of,O
any,O
evaluation,O
of,O
effectiveness,O
to,O
future,O
periods,O
are,O
subject,O
to,O
the,O
risk,O
that,O
controls,O
may,O
become,O
inadequate,O
because,O
of,O
changes,O
in,O
conditions,O
",",O
or,O
that,O
the,O
degree,O
of,O
compliance,O
with,O
the,O
policies,O
or,O
procedures,O
may,O
deteriorate,O
.,O
,O
To,O
the,O
Board,O
of,O
Directors,O
and,O
Stockholders,O
of,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
II,I-BUSINESS
:,O
In,O
our,O
opinion,O
",",O
the,O
accompanying,O
consolidated,O
balance,O
sheets,O
and,O
the,O
related,O
consolidated,O
statements,O
of,O
operations,O
",",O
of,O
changes,O
in,O
stockholders,O
equity,O
and,O
of,O
cash,O
flows,O
present,O
fairly,O
",",O
in,O
all,O
material,O
respects,O
",",O
the,O
financial,O
position,O
of,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
II,I-BUSINESS
and,O
its,O
subsidiaries,O
(,O
SCC,I-BUSINESS
II,I-BUSINESS
),O
at,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
and,O
the,O
results,O
of,O
their,O
operations,O
and,O
their,O
cash,O
flows,O
for,O
each,O
of,O
the,O
three,O
years,O
in,O
the,O
period,O
ended,O
December,O
31,O
",",O
2010,O
in,O
conformity,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
.,O
,O
Also,O
in,O
our,O
opinion,O
",",O
SCCII,I-BUSINESS
maintained,O
",",O
in,O
all,O
material,O
respects,O
",",O
effective,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
based,O
on,O
criteria,O
established,O
in,O
Internal,I-LEGISLATION/ACT
Control—Integrated,I-LEGISLATION/ACT
Framework,I-LEGISLATION/ACT
issued,O
by,O
the,O
Committee,I-BUSINESS
of,I-BUSINESS
Sponsoring,I-BUSINESS
Organizations,I-BUSINESS
of,I-BUSINESS
the,I-BUSINESS
Treadway,I-BUSINESS
Commission,I-BUSINESS
(,O
COSO,I-BUSINESS
),O
.,O
,O
SCCII,I-BUSINESS
s,O
management,O
is,O
responsible,O
for,O
these,O
financial,O
statements,O
",",O
for,O
maintaining,O
effective,O
internal,O
control,O
over,O
financial,O
reporting,O
and,O
for,O
its,O
assessment,O
of,O
the,O
effectiveness,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
included,O
in,O
Management,I-LEGISLATION/ACT
s,I-LEGISLATION/ACT
Report,I-LEGISLATION/ACT
on,I-LEGISLATION/ACT
Internal,I-LEGISLATION/ACT
Control,I-LEGISLATION/ACT
over,I-LEGISLATION/ACT
Financial,I-LEGISLATION/ACT
Reporting,I-LEGISLATION/ACT
.,O
,O
Our,O
responsibility,O
is,O
to,O
express,O
opinions,O
on,O
these,O
financial,O
statements,O
and,O
on,O
SCCII,I-BUSINESS
s,O
internal,O
control,O
over,O
financial,O
reporting,O
based,O
on,O
our,O
audits,O
(,O
which,O
was,O
an,O
integrated,O
audit,O
in,O
2010,O
),O
.,O
,O
We,O
conducted,O
our,O
audits,O
in,O
accordance,O
with,O
the,O
standards,O
of,O
the,O
Public,I-GOVERNMENT
Company,I-GOVERNMENT
Accounting,I-GOVERNMENT
Oversight,I-GOVERNMENT
Board,I-GOVERNMENT
(,I-GOVERNMENT
United,I-GOVERNMENT
States,I-GOVERNMENT
),I-GOVERNMENT
.,O
,O
Those,O
standards,O
require,O
that,O
we,O
plan,O
and,O
perform,O
the,O
audits,O
to,O
obtain,O
reasonable,O
assurance,O
about,O
whether,O
the,O
financial,O
statements,O
are,O
free,O
of,O
material,O
misstatement,O
and,O
whether,O
effective,O
internal,O
control,O
over,O
financial,O
reporting,O
was,O
maintained,O
in,O
all,O
material,O
respects,O
.,O
,O
Our,O
audits,O
of,O
the,O
financial,O
statements,O
included,O
examining,O
",",O
on,O
a,O
test,O
basis,O
",",O
evidence,O
supporting,O
the,O
amounts,O
and,O
disclosures,O
in,O
the,O
financial,O
statements,O
",",O
assessing,O
the,O
accounting,O
principles,O
used,O
and,O
significant,O
estimates,O
made,O
by,O
management,O
",",O
and,O
evaluating,O
the,O
overall,O
financial,O
statement,O
presentation,O
.,O
,O
Our,O
audit,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
included,O
obtaining,O
an,O
understanding,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
assessing,O
the,O
risk,O
that,O
a,O
material,O
weakness,O
exists,O
",",O
and,O
testing,O
and,O
evaluating,O
the,O
design,O
and,O
operating,O
effectiveness,O
of,O
internal,O
control,O
based,O
on,O
the,O
assessed,O
risk,O
.,O
,O
Our,O
audits,O
also,O
included,O
performing,O
such,O
other,O
procedures,O
as,O
we,O
considered,O
necessary,O
in,O
the,O
circumstances,O
.,O
,O
We,O
believe,O
that,O
our,O
audits,O
provide,O
a,O
reasonable,O
basis,O
for,O
our,O
opinions,O
.,O
,O
A,O
company,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
is,O
a,O
process,O
designed,O
to,O
provide,O
reasonable,O
assurance,O
regarding,O
the,O
reliability,O
of,O
financial,O
reporting,O
and,O
the,O
preparation,O
of,O
financial,O
statements,O
for,O
external,O
purposes,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
.,O
,O
A,O
company,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
includes,O
those,O
policies,O
and,O
procedures,O
that,O
(,O
i,O
),O
pertain,O
to,O
the,O
maintenance,O
of,O
records,O
that,O
",",O
in,O
reasonable,O
detail,O
",",O
accurately,O
and,O
fairly,O
reflect,O
the,O
transactions,O
and,O
dispositions,O
of,O
the,O
assets,O
of,O
the,O
company,O
;,O
(,O
ii,O
),O
provide,O
reasonable,O
assurance,O
that,O
transactions,O
are,O
recorded,O
as,O
necessary,O
to,O
permit,O
preparation,O
of,O
financial,O
statements,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
",",O
and,O
that,O
receipts,O
and,O
expenditures,O
of,O
the,O
company,O
are,O
being,O
made,O
only,O
in,O
accordance,O
with,O
authorizations,O
of,O
management,O
and,O
directors,O
of,O
the,O
company,O
;,O
and,O
(,O
iii,O
),O
provide,O
reasonable,O
assurance,O
regarding,O
prevention,O
or,O
timely,O
detection,O
of,O
unauthorized,O
acquisition,O
",",O
use,O
",",O
or,O
disposition,O
of,O
the,O
company,O
s,O
assets,O
that,O
could,O
have,O
a,O
material,O
effect,O
on,O
the,O
financial,O
statements,O
.,O
,O
Because,O
of,O
its,O
inherent,O
limitations,O
",",O
internal,O
control,O
over,O
financial,O
reporting,O
may,O
not,O
prevent,O
or,O
detect,O
misstatements,O
.,O
,O
Also,O
",",O
projections,O
of,O
any,O
evaluation,O
of,O
effectiveness,O
to,O
future,O
periods,O
are,O
subject,O
to,O
the,O
risk,O
that,O
controls,O
may,O
become,O
inadequate,O
because,O
of,O
changes,O
in,O
conditions,O
",",O
or,O
that,O
the,O
degree,O
of,O
compliance,O
with,O
the,O
policies,O
or,O
procedures,O
may,O
deteriorate,O
.,O
,O
To,O
the,O
Board,O
of,O
Directors,O
and,O
Stockholder,O
of,O
SunGard,I-BUSINESS
Data,I-BUSINESS
Systems,I-BUSINESS
Inc.,I-BUSINESS
:,O
In,O
our,O
opinion,O
",",O
the,O
accompanying,O
consolidated,O
balance,O
sheets,O
and,O
the,O
related,O
statements,O
of,O
operations,O
",",O
of,O
changes,O
in,O
stockholder,O
s,O
equity,O
and,O
of,O
cash,O
flows,O
present,O
fairly,O
",",O
in,O
all,O
material,O
respects,O
",",O
the,O
financial,O
position,O
of,O
SunGard,I-BUSINESS
Data,I-BUSINESS
Systems,I-BUSINESS
Inc.,I-BUSINESS
and,O
its,O
subsidiaries,O
(,O
SDS,I-BUSINESS
),O
at,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
and,O
the,O
results,O
of,O
their,O
operations,O
and,O
their,O
cash,O
flows,O
for,O
each,O
of,O
the,O
three,O
years,O
in,O
the,O
period,O
ended,O
December,O
31,O
",",O
2010,O
in,O
conformity,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
.,O
,O
Also,O
in,O
our,O
opinion,O
",",O
SDS,I-BUSINESS
maintained,O
",",O
in,O
all,O
material,O
respects,O
",",O
effective,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
based,O
on,O
criteria,O
established,O
in,O
Internal,I-LEGISLATION/ACT
Control—Integrated,I-LEGISLATION/ACT
Framework,I-LEGISLATION/ACT
issued,O
by,O
the,O
Committee,I-BUSINESS
of,I-BUSINESS
Sponsoring,I-BUSINESS
Organizations,I-BUSINESS
of,I-BUSINESS
the,I-BUSINESS
Treadway,I-BUSINESS
Commission,I-BUSINESS
(,O
COSO,I-BUSINESS
),O
.,O
,O
SDS,I-BUSINESS
management,O
is,O
responsible,O
for,O
these,O
financial,O
statements,O
",",O
for,O
maintaining,O
effective,O
internal,O
control,O
over,O
financial,O
reporting,O
and,O
for,O
its,O
assessment,O
of,O
the,O
effectiveness,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
included,O
in,O
Management,I-LEGISLATION/ACT
s,I-LEGISLATION/ACT
Report,I-LEGISLATION/ACT
on,I-LEGISLATION/ACT
Internal,I-LEGISLATION/ACT
Control,I-LEGISLATION/ACT
over,I-LEGISLATION/ACT
Financial,I-LEGISLATION/ACT
Reporting,I-LEGISLATION/ACT
.,O
,O
Our,O
responsibility,O
is,O
to,O
express,O
opinions,O
on,O
these,O
financial,O
statements,O
and,O
on,O
SDS,O
internal,O
control,O
over,O
financial,O
reporting,O
based,O
on,O
our,O
audits,O
(,O
which,O
was,O
an,O
integrated,O
audit,O
in,O
2010,O
),O
.,O
,O
We,O
conducted,O
our,O
audits,O
in,O
accordance,O
with,O
the,O
standards,O
of,O
the,O
Public,I-GOVERNMENT
Company,I-GOVERNMENT
Accounting,I-GOVERNMENT
Oversight,I-GOVERNMENT
Board,I-GOVERNMENT
(,I-GOVERNMENT
United,I-GOVERNMENT
States,I-GOVERNMENT
),I-GOVERNMENT
.,O
,O
Those,O
standards,O
require,O
that,O
we,O
plan,O
and,O
perform,O
the,O
audits,O
to,O
obtain,O
reasonable,O
assurance,O
about,O
whether,O
the,O
financial,O
statements,O
are,O
free,O
of,O
material,O
misstatement,O
and,O
whether,O
effective,O
internal,O
control,O
over,O
financial,O
reporting,O
was,O
maintained,O
in,O
all,O
material,O
respects,O
.,O
,O
Our,O
audits,O
of,O
the,O
financial,O
statements,O
included,O
examining,O
",",O
on,O
a,O
test,O
basis,O
",",O
evidence,O
supporting,O
the,O
amounts,O
and,O
disclosures,O
in,O
the,O
financial,O
statements,O
",",O
assessing,O
the,O
accounting,O
principles,O
used,O
and,O
significant,O
estimates,O
made,O
by,O
management,O
",",O
and,O
evaluating,O
the,O
overall,O
financial,O
statement,O
presentation,O
.,O
,O
Our,O
audit,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
included,O
obtaining,O
an,O
understanding,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
assessing,O
the,O
risk,O
that,O
a,O
material,O
weakness,O
exists,O
",",O
and,O
testing,O
and,O
evaluating,O
the,O
design,O
and,O
operating,O
effectiveness,O
of,O
internal,O
control,O
based,O
on,O
the,O
assessed,O
risk,O
.,O
,O
Our,O
audits,O
also,O
included,O
performing,O
such,O
other,O
procedures,O
as,O
we,O
considered,O
necessary,O
in,O
the,O
circumstances,O
.,O
,O
We,O
believe,O
that,O
our,O
audits,O
provide,O
a,O
reasonable,O
basis,O
for,O
our,O
opinions,O
.,O
,O
A,O
company,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
is,O
a,O
process,O
designed,O
to,O
provide,O
reasonable,O
assurance,O
regarding,O
the,O
reliability,O
of,O
financial,O
reporting,O
and,O
the,O
preparation,O
of,O
financial,O
statements,O
for,O
external,O
purposes,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
.,O
,O
A,O
company,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
includes,O
those,O
policies,O
and,O
procedures,O
that,O
(,O
i,O
),O
pertain,O
to,O
the,O
maintenance,O
of,O
records,O
that,O
",",O
in,O
reasonable,O
detail,O
",",O
accurately,O
and,O
fairly,O
reflect,O
the,O
transactions,O
and,O
dispositions,O
of,O
the,O
assets,O
of,O
the,O
company,O
;,O
(,O
ii,O
),O
provide,O
reasonable,O
assurance,O
that,O
transactions,O
are,O
recorded,O
as,O
necessary,O
to,O
permit,O
preparation,O
of,O
financial,O
statements,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
",",O
and,O
that,O
receipts,O
and,O
expenditures,O
of,O
the,O
company,O
are,O
being,O
made,O
only,O
in,O
accordance,O
with,O
authorizations,O
of,O
management,O
and,O
directors,O
of,O
the,O
company,O
;,O
and,O
(,O
iii,O
),O
provide,O
reasonable,O
assurance,O
regarding,O
prevention,O
or,O
timely,O
detection,O
of,O
unauthorized,O
acquisition,O
",",O
use,O
",",O
or,O
disposition,O
of,O
the,O
company,O
s,O
assets,O
that,O
could,O
have,O
a,O
material,O
effect,O
on,O
the,O
financial,O
statements,O
.,O
,O
Because,O
of,O
its,O
inherent,O
limitations,O
",",O
internal,O
control,O
over,O
financial,O
reporting,O
may,O
not,O
prevent,O
or,O
detect,O
misstatements,O
.,O
,O
Also,O
",",O
projections,O
of,O
any,O
evaluation,O
of,O
effectiveness,O
to,O
future,O
periods,O
are,O
subject,O
to,O
the,O
risk,O
that,O
controls,O
may,O
become,O
inadequate,O
because,O
of,O
changes,O
in,O
conditions,O
",",O
or,O
that,O
the,O
degree,O
of,O
compliance,O
with,O
the,O
policies,O
or,O
procedures,O
may,O
deteriorate,O
.,O
,O
Basis,O
of,O
Presentation,O
and,O
Summary,O
of,O
Significant,O
Accounting,O
Policies,O
:,O
SunGard,I-BUSINESS
Data,I-BUSINESS
Systems,I-BUSINESS
Inc.,I-BUSINESS
(,O
SunGard,I-BUSINESS
),O
was,O
acquired,O
on,O
August,O
11,O
",",O
2005,O
(,O
the,O
LBO,O
),O
in,O
a,O
leveraged,O
buy-out,O
by,O
a,O
consortium,O
of,O
private,O
equity,O
investment,O
funds,O
associated,O
with,O
Bain,I-BUSINESS
Capital,I-BUSINESS
Partners,I-BUSINESS
",",O
The,I-BUSINESS
Blackstone,I-BUSINESS
Group,I-BUSINESS
",",O
Goldman,I-BUSINESS
Sachs,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",O
Kohlberg,I-BUSINESS
Kravis,I-BUSINESS
Roberts,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",O
Providence,I-BUSINESS
Equity,I-BUSINESS
Partners,I-BUSINESS
",",O
Silver,I-BUSINESS
Lake,I-BUSINESS
and,I-BUSINESS
TPG,I-BUSINESS
(,O
collectively,O
",",O
the,O
Sponsors,O
),O
.,O
,O
SunGard,I-BUSINESS
is,O
a,O
wholly,O
owned,O
subsidiary,O
of,O
SunGard,I-BUSINESS
Holdco,I-BUSINESS
LLC,I-BUSINESS
",",O
which,O
is,O
wholly,O
owned,O
by,O
SunGard,I-BUSINESS
Holding,I-BUSINESS
Corp.,I-BUSINESS
",",O
which,O
is,O
wholly,O
owned,O
by,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
II,I-BUSINESS
(,O
SCCII,I-BUSINESS
),O
",",O
which,O
is,O
a,O
subsidiary,O
of,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
(,O
SCC,I-BUSINESS
),O
.,O
,O
SCC,I-BUSINESS
and,O
SCCII,I-BUSINESS
are,O
collectively,O
referred,O
to,O
as,O
the,O
Parent,O
Companies,O
.,O
,O
All,O
four,O
of,O
these,O
companies,O
were,O
formed,O
in,O
2005,O
for,O
the,O
purpose,O
of,O
facilitating,O
the,O
LBO,O
and,O
are,O
collectively,O
referred,O
to,O
as,O
the,O
Holding,O
Companies,O
.,O
,O
SCC,I-BUSINESS
",",O
SCCII,I-BUSINESS
and,O
SunGard,I-BUSINESS
are,O
separate,O
reporting,O
companies,O
and,O
are,O
collectively,O
referred,O
to,O
as,O
the,O
Company,O
.,O
,O
The,O
Holding,O
Companies,O
have,O
no,O
other,O
operations,O
beyond,O
those,O
of,O
their,O
ownership,O
of,O
SunGard,I-BUSINESS
.,O
,O
SunGard,I-BUSINESS
is,O
one,O
of,O
the,O
world,O
s,O
leading,O
software,O
and,O
technology,O
services,O
companies,O
and,O
has,O
four,O
segments,O
:,O
Financial,O
Systems,O
(,O
FS,O
),O
",",O
Higher,O
Education,O
(,O
HE,O
),O
",",O
Public,O
Sector,O
(,O
PS,O
),O
and,O
Availability,O
Services,O
(,O
AS,O
),O
.,O
,O
The,O
consolidated,O
financial,O
statements,O
include,O
the,O
accounts,O
of,O
the,O
Company,O
and,O
its,O
majority-owned,O
subsidiaries,O
.,O
,O
All,O
significant,O
intercompany,O
transactions,O
and,O
accounts,O
have,O
been,O
eliminated,O
.,O
,O
Estimates,O
The,O
preparation,O
of,O
consolidated,O
financial,O
statements,O
in,O
conformity,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
requires,O
management,O
to,O
make,O
many,O
estimates,O
and,O
judgments,O
that,O
affect,O
the,O
reported,O
amounts,O
of,O
assets,O
",",O
liabilities,O
",",O
revenue,O
and,O
expenses,O
.,O
,O
The,O
Company,O
evaluates,O
its,O
estimates,O
and,O
judgments,O
on,O
an,O
ongoing,O
basis,O
and,O
revises,O
them,O
when,O
necessary,O
.,O
,O
Actual,O
results,O
may,O
differ,O
from,O
the,O
original,O
or,O
revised,O
estimates,O
.,O
,O
The,O
presentation,O
of,O
certain,O
prior,O
year,O
amounts,O
has,O
been,O
revised,O
to,O
conform,O
to,O
the,O
current,O
year,O
presentation,O
.,O
,O
Revenue,O
Recognition,O
In,O
the,O
fourth,O
quarter,O
of,O
2010,O
the,O
Company,O
adopted,O
",",O
retrospective,O
to,O
the,O
beginning,O
of,O
the,O
year,O
",",O
the,O
provisions,O
of,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
No.,O
2009-13,O
",",O
Revenue,I-MISCELLANEOUS
Recognition—Multiple-Deliverable,I-MISCELLANEOUS
Revenue,I-MISCELLANEOUS
Arrangements,I-MISCELLANEOUS
(,O
ASU,I-LEGISLATION/ACT
2009-13,O
),O
and,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
2009-14,O
",",O
Software-Certain,I-MISCELLANEOUS
Revenue,I-MISCELLANEOUS
Arrangements,I-MISCELLANEOUS
that,I-MISCELLANEOUS
Include,I-MISCELLANEOUS
Software,I-MISCELLANEOUS
Elements,I-MISCELLANEOUS
(,O
ASU,I-LEGISLATION/ACT
2009-14,O
),O
.,O
,O
ASU,I-LEGISLATION/ACT
2009-13,O
amended,O
existing,O
accounting,O
guidance,O
for,O
revenue,O
recognition,O
for,O
multiple-element,O
arrangements,O
by,O
establishing,O
a,O
selling,O
price,O
hierarchy,O
that,O
allows,O
for,O
the,O
best,O
estimated,O
selling,O
price,O
(,O
BESP,O
),O
to,O
determine,O
the,O
allocation,O
of,O
arrangement,O
consideration,O
to,O
a,O
deliverable,O
in,O
a,O
multiple,O
element,O
arrangement,O
where,O
neither,O
vendor,O
specific,O
objective,O
evidence,O
(,O
VSOE,O
),O
nor,O
third-party,O
evidence,O
(,O
TPE,O
),O
is,O
available,O
for,O
that,O
deliverable,O
.,O
,O
ASU,I-LEGISLATION/ACT
2009-14,O
modifies,O
the,O
scope,O
of,O
existing,O
software,O
guidance,O
to,O
exclude,O
tangible,O
products,O
containing,O
software,O
components,O
and,O
non-software,O
components,O
that,O
function,O
together,O
to,O
deliver,O
the,O
product,O
s,O
essential,O
functionality,O
.,O
,O
software,O
deliverables,O
in,O
an,O
arrangement,O
where,O
the,O
vendor,O
sells,O
tangible,O
products,O
containing,O
software,O
components,O
that,O
are,O
essential,O
in,O
delivering,O
the,O
tangible,O
product,O
s,O
functionality,O
.,O
,O
The,O
impact,O
of,O
the,O
adoption,O
of,O
ASU,I-LEGISLATION/ACT
2009-13,O
and,O
ASU,I-LEGISLATION/ACT
2009-14,O
was,O
not,O
material,O
to,O
the,O
results,O
of,O
operations,O
for,O
2010,O
.,O
,O
The,O
following,O
criteria,O
must,O
be,O
met,O
in,O
determining,O
whether,O
revenue,O
may,O
be,O
recorded,O
:,O
persuasive,O
evidence,O
of,O
a,O
contract,O
exists,O
;,O
services,O
have,O
been,O
provided,O
;,O
the,O
price,O
is,O
fixed,O
or,O
determinable,O
;,O
and,O
collection,O
is,O
reasonably,O
assured,O
.,O
,O
The,O
Company,O
generates,O
revenue,O
from,O
the,O
following,O
sources,O
:,O
(,O
1,O
),O
services,O
revenue,O
",",O
which,O
includes,O
revenue,O
from,O
processing,O
services,O
",",O
software,O
maintenance,O
and,O
support,O
",",O
rentals,O
",",O
recovery,O
and,O
managed,O
services,O
",",O
professional,O
services,O
and,O
broker/dealer,O
fees,O
;,O
and,O
",",O
(,O
2,O
),O
software,O
license,O
fees,O
",",O
which,O
result,O
from,O
contracts,O
that,O
permit,O
the,O
customer,O
to,O
use,O
a,O
SunGard,I-BUSINESS
product,O
at,O
the,O
customer,O
s,O
site,O
.,O
,O
Services,O
revenue,O
is,O
recorded,O
as,O
the,O
services,O
are,O
provided,O
based,O
on,O
the,O
fair,O
value,O
of,O
each,O
element,O
.,O
,O
Most,O
AS,O
services,O
revenue,O
consists,O
of,O
fixed,O
monthly,O
fees,O
based,O
upon,O
the,O
specific,O
computer,O
configuration,O
or,O
business,O
process,O
for,O
which,O
the,O
service,O
is,O
being,O
provided,O
.,O
,O
When,O
recovering,O
from,O
an,O
interruption,O
",",O
customers,O
generally,O
are,O
contractually,O
obligated,O
to,O
pay,O
additional,O
fees,O
",",O
which,O
typically,O
cover,O
the,O
incremental,O
costs,O
of,O
supporting,O
customers,O
during,O
recoveries,O
.,O
,O
FS,O
services,O
revenue,O
includes,O
monthly,O
fees,O
",",O
which,O
may,O
include,O
a,O
fixed,O
minimum,O
fee,O
and/or,O
variable,O
fees,O
based,O
on,O
a,O
measure,O
of,O
volume,O
or,O
activity,O
",",O
such,O
as,O
the,O
number,O
of,O
accounts,O
",",O
trades,O
or,O
transactions,O
",",O
users,O
or,O
the,O
number,O
of,O
hours,O
of,O
service,O
.,O
,O
For,O
fixed-fee,O
professional,O
services,O
contracts,O
",",O
services,O
revenue,O
is,O
recorded,O
based,O
upon,O
proportional,O
performance,O
",",O
measured,O
by,O
the,O
actual,O
number,O
of,O
hours,O
incurred,O
divided,O
by,O
the,O
total,O
estimated,O
number,O
of,O
hours,O
for,O
the,O
project,O
.,O
,O
Changes,O
in,O
the,O
estimated,O
costs,O
or,O
hours,O
to,O
complete,O
the,O
contract,O
and,O
losses,O
",",O
if,O
any,O
",",O
are,O
reflected,O
in,O
the,O
period,O
during,O
which,O
the,O
change,O
or,O
loss,O
becomes,O
known,O
.,O
,O
License,O
fees,O
result,O
from,O
contracts,O
that,O
permit,O
the,O
customer,O
to,O
use,O
a,O
SunGard,I-BUSINESS
software,O
product,O
at,O
the,O
customer,O
s,O
site,O
.,O
,O
Generally,O
",",O
these,O
contracts,O
are,O
multiple-element,O
arrangements,O
since,O
they,O
usually,O
provide,O
for,O
professional,O
services,O
and,O
ongoing,O
software,O
maintenance,O
.,O
,O
In,O
these,O
instances,O
",",O
license,O
fees,O
are,O
recognized,O
upon,O
the,O
signing,O
of,O
the,O
contract,O
and,O
delivery,O
of,O
the,O
software,O
if,O
the,O
license,O
fee,O
is,O
fixed,O
or,O
determinable,O
",",O
collection,O
is,O
probable,O
",",O
and,O
there,O
is,O
sufficient,O
vendor,O
specific,O
evidence,O
of,O
the,O
fair,O
value,O
of,O
each,O
undelivered,O
element,O
.,O
,O
When,O
there,O
are,O
significant,O
program,O
modifications,O
or,O
customization,O
",",O
installation,O
",",O
systems,O
integration,O
or,O
related,O
services,O
",",O
the,O
professional,O
services,O
and,O
license,O
revenue,O
are,O
combined,O
and,O
recorded,O
based,O
upon,O
proportional,O
performance,O
",",O
measured,O
in,O
the,O
manner,O
described,O
above,O
.,O
,O
Revenue,O
is,O
recorded,O
when,O
billed,O
when,O
customer,O
payments,O
are,O
extended,O
beyond,O
normal,O
billing,O
terms,O
",",O
or,O
at,O
acceptance,O
when,O
there,O
is,O
significant,O
acceptance,O
",",O
technology,O
or,O
service,O
risk,O
.,O
,O
Revenue,O
also,O
is,O
recorded,O
over,O
the,O
longest,O
service,O
period,O
in,O
those,O
instances,O
where,O
the,O
software,O
is,O
bundled,O
together,O
with,O
post-delivery,O
services,O
and,O
there,O
is,O
not,O
sufficient,O
evidence,O
of,O
the,O
fair,O
value,O
of,O
each,O
undelivered,O
service,O
element,O
.,O
,O
With,O
respect,O
to,O
software,O
related,O
multiple-element,O
arrangements,O
",",O
sufficient,O
evidence,O
of,O
fair,O
value,O
is,O
defined,O
as,O
VSOE,O
.,O
,O
If,O
there,O
is,O
no,O
VSOE,O
of,O
the,O
fair,O
value,O
of,O
the,O
delivered,O
element,O
(,O
which,O
is,O
usually,O
the,O
software,O
),O
but,O
there,O
is,O
VSOE,O
of,O
the,O
fair,O
value,O
of,O
each,O
of,O
the,O
undelivered,O
elements,O
(,O
which,O
are,O
usually,O
maintenance,O
and,O
professional,O
services,O
),O
",",O
then,O
the,O
residual,O
method,O
is,O
used,O
to,O
determine,O
the,O
revenue,O
for,O
the,O
delivered,O
element,O
.,O
,O
The,O
revenue,O
for,O
each,O
of,O
the,O
undelivered,O
elements,O
is,O
set,O
at,O
the,O
fair,O
value,O
of,O
those,O
elements,O
using,O
VSOE,O
of,O
the,O
price,O
paid,O
when,O
each,O
of,O
the,O
undelivered,O
elements,O
is,O
sold,O
separately,O
.,O
,O
The,O
revenue,O
remaining,O
after,O
allocation,O
to,O
the,O
undelivered,O
elements,O
(,O
i.e.,O
",",O
the,O
residual,O
),O
is,O
allocated,O
to,O
the,O
delivered,O
element,O
.,O
,O
VSOE,O
supporting,O
the,O
fair,O
value,O
of,O
maintenance,O
is,O
based,O
on,O
the,O
optional,O
renewal,O
rates,O
for,O
each,O
product,O
and,O
is,O
typically,O
18,O
%,O
to,O
20,O
%,O
of,O
the,O
software,O
license,O
fee,O
per,O
year,O
.,O
,O
VSOE,O
supporting,O
the,O
fair,O
value,O
of,O
professional,O
services,O
is,O
based,O
on,O
the,O
standard,O
daily,O
rates,O
charged,O
when,O
those,O
services,O
are,O
sold,O
separately,O
.,O
,O
In,O
some,O
software,O
related,O
multiple-element,O
arrangements,O
",",O
the,O
services,O
rates,O
are,O
discounted,O
.,O
,O
In,O
these,O
cases,O
",",O
a,O
portion,O
of,O
the,O
software,O
license,O
fee,O
is,O
deferred,O
and,O
recognized,O
as,O
the,O
services,O
are,O
performed,O
based,O
on,O
VSOE,O
of,O
the,O
services,O
.,O
,O
From,O
time,O
to,O
time,O
",",O
the,O
Company,O
enters,O
into,O
arrangements,O
with,O
customers,O
that,O
purchase,O
non-software,O
related,O
services,O
at,O
the,O
same,O
time,O
",",O
or,O
within,O
close,O
proximity,O
",",O
of,O
purchasing,O
software,O
(,O
non-software,O
multiple-element,O
arrangements,O
),O
.,O
,O
Each,O
element,O
within,O
a,O
non-software,O
multiple-element,O
arrangement,O
is,O
accounted,O
for,O
as,O
a,O
separate,O
unit,O
of,O
accounting,O
provided,O
the,O
following,O
criteria,O
are,O
met,O
:,O
the,O
delivered,O
services,O
have,O
value,O
to,O
the,O
customer,O
on,O
a,O
standalone,O
basis,O
;,O
and,O
for,O
an,O
arrangement,O
that,O
includes,O
a,O
general,O
right,O
of,O
return,O
relative,O
to,O
the,O
delivered,O
services,O
",",O
delivery,O
or,O
performance,O
of,O
the,O
undelivered,O
service,O
is,O
considered,O
probable,O
and,O
is,O
substantially,O
controlled,O
by,O
the,O
Company,O
.,O
,O
Where,O
the,O
criteria,O
for,O
a,O
separate,O
unit,O
of,O
accounting,O
are,O
not,O
met,O
",",O
the,O
deliverable,O
is,O
combined,O
with,O
the,O
undelivered,O
element,O
(,O
s,O
),O
and,O
treated,O
as,O
a,O
single,O
unit,O
of,O
accounting,O
for,O
the,O
purposes,O
of,O
allocation,O
of,O
the,O
arrangement,O
consideration,O
and,O
revenue,O
recognition,O
.,O
,O
For,O
non-software,O
multiple-element,O
arrangements,O
",",O
the,O
Company,O
allocates,O
revenue,O
to,O
each,O
element,O
based,O
on,O
a,O
selling,O
price,O
hierarchy,O
at,O
the,O
arrangement,O
inception,O
.,O
,O
During,O
2008,O
and,O
2009,O
the,O
fair,O
value,O
of,O
each,O
undelivered,O
element,O
was,O
determined,O
using,O
VSOE,O
",",O
and,O
the,O
residual,O
method,O
was,O
used,O
to,O
assign,O
a,O
fair,O
value,O
to,O
the,O
delivered,O
element,O
if,O
its,O
VSOE,O
was,O
not,O
available,O
.,O
,O
Under,O
the,O
new,O
rules,O
for,O
2010,O
described,O
above,O
",",O
the,O
selling,O
price,O
for,O
each,O
element,O
is,O
based,O
upon,O
the,O
following,O
selling,O
price,O
hierarchy,O
:,O
VSOE,O
then,O
TPE,O
then,O
BESP,O
.,O
,O
The,O
total,O
arrangement,O
consideration,O
is,O
allocated,O
to,O
each,O
separate,O
unit,O
of,O
accounting,O
for,O
each,O
of,O
the,O
non-software,O
deliverables,O
using,O
the,O
relative,O
selling,O
prices,O
of,O
each,O
unit,O
based,O
on,O
this,O
hierarchy,O
.,O
,O
The,O
Company,O
limits,O
the,O
amount,O
of,O
revenue,O
recognized,O
for,O
delivered,O
elements,O
to,O
an,O
amount,O
that,O
is,O
not,O
contingent,O
upon,O
future,O
delivery,O
of,O
additional,O
products,O
or,O
services,O
or,O
meeting,O
of,O
any,O
specified,O
performance,O
conditions,O
.,O
,O
Since,O
under,O
the,O
new,O
hierarchy,O
a,O
fair,O
value,O
for,O
each,O
element,O
will,O
be,O
determinable,O
",",O
the,O
residual,O
method,O
is,O
no,O
longer,O
used,O
.,O
,O
To,O
determine,O
the,O
selling,O
price,O
in,O
non-software,O
multiple-element,O
arrangements,O
",",O
the,O
Company,O
establishes,O
VSOE,O
of,O
the,O
selling,O
price,O
using,O
the,O
price,O
charged,O
for,O
a,O
deliverable,O
when,O
sold,O
separately,O
.,O
,O
Where,O
VSOE,O
does,O
not,O
exist,O
",",O
TPE,O
is,O
established,O
by,O
evaluating,O
similar,O
competitor,O
products,O
or,O
services,O
in,O
standalone,O
arrangements,O
with,O
similarly,O
situated,O
customers,O
.,O
,O
If,O
the,O
Company,O
is,O
unable,O
to,O
determine,O
the,O
selling,O
price,O
because,O
VSOE,O
or,O
TPE,O
doesn,O
t,O
exist,O
",",O
it,O
determines,O
BESP,O
for,O
the,O
purposes,O
of,O
allocating,O
the,O
arrangement,O
by,O
considering,O
pricing,O
practices,O
",",O
margin,O
",",O
competition,O
and,O
geographies,O
in,O
which,O
it,O
offers,O
its,O
products,O
and,O
services,O
.,O
,O
Unbilled,O
receivables,O
are,O
created,O
when,O
services,O
are,O
performed,O
or,O
software,O
is,O
delivered,O
and,O
revenue,O
is,O
recognized,O
in,O
advance,O
of,O
billings,O
.,O
,O
Deferred,O
revenue,O
is,O
created,O
when,O
billing,O
occurs,O
in,O
advance,O
of,O
performing,O
services,O
or,O
when,O
all,O
revenue,O
recognition,O
criteria,O
have,O
not,O
been,O
met,O
.,O
,O
Cash,O
and,O
Cash,O
Equivalents,O
Cash,O
and,O
cash,O
equivalents,O
consist,O
of,O
investments,O
that,O
are,O
readily,O
convertible,O
into,O
cash,O
and,O
have,O
original,O
maturities,O
of,O
three,O
months,O
or,O
less,O
.,O
,O
Concentration,O
of,O
Credit,O
Risk,O
Financial,O
instruments,O
that,O
potentially,O
subject,O
the,O
Company,O
to,O
concentrations,O
of,O
credit,O
risk,O
consist,O
primarily,O
of,O
accounts,O
receivable,O
.,O
,O
The,O
Company,O
sells,O
a,O
significant,O
portion,O
of,O
its,O
products,O
and,O
services,O
to,O
the,O
financial,O
services,O
industry,O
and,O
could,O
be,O
affected,O
by,O
the,O
overall,O
condition,O
of,O
that,O
industry,O
.,O
,O
The,O
Company,O
believes,O
that,O
any,O
credit,O
risk,O
associated,O
with,O
accounts,O
receivable,O
is,O
substantially,O
mitigated,O
by,O
the,O
relatively,O
large,O
number,O
of,O
customer,O
accounts,O
and,O
reasonably,O
short,O
collection,O
terms,O
.,O
,O
Accounts,O
receivable,O
are,O
stated,O
at,O
estimated,O
net,O
realizable,O
value,O
",",O
which,O
approximates,O
fair,O
value,O
.,O
,O
By,O
policy,O
",",O
the,O
Company,O
places,O
its,O
available,O
cash,O
and,O
short-term,O
investments,O
with,O
institutions,O
of,O
high,O
credit-quality,O
and,O
limits,O
the,O
amount,O
of,O
credit,O
exposure,O
to,O
any,O
one,O
issuer,O
.,O
,O
Foreign,O
Currency,O
Translation,O
The,O
functional,O
currency,O
of,O
each,O
of,O
the,O
Company,O
s,O
foreign,O
operations,O
is,O
generally,O
the,O
local,O
currency,O
of,O
the,O
country,O
in,O
which,O
the,O
operation,O
is,O
located,O
.,O
,O
All,O
assets,O
and,O
liabilities,O
are,O
translated,O
into,O
U.S.,I-LOCATION
dollars,O
using,O
exchange,O
rates,O
in,O
effect,O
at,O
the,O
balance,O
sheet,O
date,O
.,O
,O
Revenue,O
and,O
expenses,O
are,O
translated,O
using,O
average,O
exchange,O
rates,O
during,O
the,O
period,O
.,O
,O
Increases,O
and,O
decreases,O
in,O
net,O
assets,O
resulting,O
from,O
foreign,O
currency,O
translation,O
are,O
reflected,O
in,O
stockholder,O
s,O
equity,O
as,O
a,O
component,O
of,O
accumulated,O
other,O
comprehensive,O
income,O
(,O
loss,O
),O
.,O
,O
Property,O
and,O
Equipment,O
Property,O
and,O
equipment,O
are,O
recorded,O
at,O
cost,O
and,O
depreciated,O
on,O
the,O
straight-line,O
method,O
over,O
the,O
estimated,O
useful,O
lives,O
of,O
the,O
assets,O
(,O
three,O
to,O
eight,O
years,O
for,O
equipment,O
and,O
ten,O
to,O
40,O
years,O
for,O
buildings,O
and,O
improvements,O
),O
.,O
,O
Leasehold,O
improvements,O
are,O
amortized,O
ratably,O
over,O
their,O
remaining,O
lease,O
term,O
or,O
useful,O
life,O
",",O
if,O
shorter,O
.,O
,O
Depreciation,O
and,O
amortization,O
of,O
property,O
and,O
equipment,O
in,O
continuing,O
operations,O
was,O
$,O
237,O
million,O
in,O
2008,O
",",O
$,O
243,O
million,O
in,O
2009,O
and,O
$,O
237,O
million,O
in,O
2010,O
.,O
,O
Software,O
Products,O
Software,O
development,O
costs,O
are,O
expensed,O
as,O
incurred,O
and,O
consist,O
primarily,O
of,O
design,O
and,O
development,O
costs,O
of,O
new,O
products,O
and,O
significant,O
enhancements,O
to,O
existing,O
products,O
incurred,O
before,O
the,O
establishment,O
of,O
technological,O
feasibility,O
.,O
,O
Recoverable,O
costs,O
incurred,O
subsequent,O
to,O
technological,O
feasibility,O
of,O
new,O
products,O
and,O
enhancements,O
to,O
existing,O
products,O
as,O
well,O
as,O
costs,O
associated,O
with,O
purchased,O
software,O
and,O
software,O
obtained,O
through,O
business,O
acquisitions,O
are,O
capitalized,O
and,O
amortized,O
over,O
the,O
estimated,O
useful,O
lives,O
of,O
the,O
related,O
products,O
",",O
generally,O
three,O
to,O
twelve,O
years,O
(,O
average,O
life,O
is,O
eight,O
years,O
),O
",",O
using,O
the,O
straight-line,O
method,O
or,O
the,O
ratio,O
of,O
current,O
revenue,O
to,O
current,O
and,O
anticipated,O
revenue,O
from,O
such,O
software,O
",",O
whichever,O
provides,O
the,O
greater,O
amortization,O
.,O
,O
Amortization,O
of,O
all,O
software,O
products,O
of,O
continuing,O
operations,O
",",O
including,O
software,O
acquired,O
in,O
business,O
acquisitions,O
and,O
software,O
purchased,O
for,O
internal,O
use,O
",",O
aggregated,O
$,O
253,O
million,O
in,O
2008,O
",",O
$,O
290,O
million,O
in,O
2009,O
and,O
$,O
265,O
million,O
in,O
2010,O
.,O
,O
Capitalized,O
development,O
costs,O
of,O
continuing,O
operations,O
were,O
$,O
17,O
million,O
in,O
2008,O
",",O
$,O
16,O
million,O
in,O
2009,O
and,O
$,O
15,O
million,O
in,O
2010,O
.,O
,O
Purchase,O
Accounting,O
and,O
Intangible,O
Assets,O
Purchase,O
accounting,O
requires,O
that,O
all,O
assets,O
and,O
liabilities,O
be,O
recorded,O
at,O
fair,O
value,O
on,O
the,O
acquisition,O
date,O
",",O
including,O
identifiable,O
intangible,O
assets,O
separate,O
from,O
goodwill,O
.,O
,O
Identifiable,O
intangible,O
assets,O
include,O
customer,O
base,O
(,O
which,O
includes,O
customer,O
contracts,O
and,O
relationships,O
),O
",",O
software,O
and,O
trade,O
name,O
.,O
,O
Goodwill,O
represents,O
the,O
excess,O
of,O
cost,O
over,O
the,O
fair,O
value,O
of,O
net,O
assets,O
acquired,O
.,O
,O
The,O
estimated,O
fair,O
values,O
and,O
useful,O
lives,O
of,O
identifiable,O
intangible,O
assets,O
are,O
based,O
on,O
many,O
factors,O
",",O
including,O
estimates,O
and,O
assumptions,O
of,O
future,O
operating,O
performance,O
and,O
cash,O
flows,O
of,O
the,O
acquired,O
business,O
",",O
the,O
nature,O
of,O
the,O
business,O
acquired,O
",",O
the,O
specific,O
characteristics,O
of,O
the,O
identified,O
intangible,O
assets,O
",",O
and,O
our,O
historical,O
experience,O
and,O
that,O
of,O
the,O
acquired,O
business,O
.,O
,O
The,O
estimates,O
and,O
assumptions,O
used,O
to,O
determine,O
the,O
fair,O
values,O
and,O
useful,O
lives,O
of,O
identified,O
intangible,O
assets,O
could,O
change,O
due,O
to,O
numerous,O
factors,O
",",O
including,O
product,O
demand,O
",",O
market,O
conditions,O
",",O
technological,O
developments,O
",",O
economic,O
conditions,O
and,O
competition,O
.,O
,O
In,O
connection,O
with,O
our,O
determination,O
of,O
fair,O
values,O
for,O
the,O
LBO,O
and,O
for,O
other,O
significant,O
acquisitions,O
",",O
the,O
Company,O
engages,O
independent,O
appraisal,O
firms,O
to,O
assist,O
with,O
the,O
valuation,O
of,O
intangible,O
(,O
and,O
certain,O
tangible,O
),O
assets,O
acquired,O
and,O
certain,O
assumed,O
obligations,O
.,O
,O
Customer,O
Base,O
Intangible,O
Assets,O
Customer,O
base,O
intangible,O
assets,O
represent,O
customer,O
contracts,O
and,O
relationships,O
obtained,O
as,O
a,O
result,O
of,O
the,O
LBO,O
and,O
as,O
part,O
of,O
acquired,O
businesses,O
and,O
are,O
amortized,O
using,O
the,O
straight-line,O
method,O
over,O
their,O
estimated,O
useful,O
lives,O
",",O
ranging,O
from,O
three,O
to,O
18,O
years,O
(,O
average,O
life,O
is,O
12,O
years,O
),O
.,O
,O
Amortization,O
of,O
all,O
customer,O
base,O
intangible,O
assets,O
of,O
continuing,O
operations,O
aggregated,O
$,O
243,O
million,O
in,O
2008,O
",",O
$,O
274,O
million,O
in,O
2009,O
and,O
$,O
266,O
million,O
in,O
2010,O
.,O
,O
Effective,O
January,O
1,O
",",O
2009,O
",",O
the,O
Company,O
shortened,O
the,O
remaining,O
useful,O
lives,O
of,O
certain,O
intangible,O
assets,O
to,O
reflect,O
revisions,O
to,O
estimated,O
customer,O
attrition,O
rates,O
.,O
,O
The,O
impact,O
of,O
this,O
revision,O
was,O
an,O
increase,O
in,O
amortization,O
of,O
acquisition-related,O
intangible,O
assets,O
of,O
approximately,O
$,O
36,O
million,O
in,O
2009,O
.,O
,O
Other,O
Intangible,O
Assets,O
Other,O
intangible,O
assets,O
consist,O
primarily,O
of,O
deferred,O
financing,O
costs,O
incurred,O
in,O
connection,O
with,O
debt,O
issued,O
in,O
the,O
LBO,O
and,O
amendments,O
to,O
our,O
debt,O
and,O
other,O
financing,O
transactions,O
(,O
see,O
Note,O
5,O
),O
",",O
noncompetition,O
agreements,O
obtained,O
in,O
business,O
acquisitions,O
",",O
long-term,O
accounts,O
receivable,O
",",O
prepayments,O
and,O
long-term,O
investments,O
.,O
,O
Deferred,O
financing,O
costs,O
are,O
amortized,O
over,O
the,O
term,O
of,O
the,O
related,O
debt,O
.,O
,O
Noncompetition,O
agreements,O
are,O
amortized,O
using,O
the,O
straight-line,O
method,O
over,O
their,O
stated,O
terms,O
",",O
ranging,O
from,O
two,O
to,O
five,O
years,O
.,O
,O
Impairment,O
Reviews,O
for,O
Long-Lived,O
Assets,O
The,O
Company,O
periodically,O
reviews,O
carrying,O
values,O
and,O
useful,O
lives,O
of,O
long-lived,O
assets,O
for,O
impairment,O
whenever,O
events,O
or,O
changes,O
in,O
circumstances,O
indicate,O
that,O
the,O
carrying,O
value,O
of,O
the,O
asset,O
may,O
not,O
be,O
recoverable,O
.,O
,O
Factors,O
that,O
could,O
indicate,O
an,O
impairment,O
include,O
significant,O
underperformance,O
of,O
the,O
asset,O
as,O
compared,O
to,O
historical,O
or,O
projected,O
future,O
operating,O
results,O
",",O
or,O
significant,O
negative,O
industry,O
or,O
economic,O
trends,O
.,O
,O
When,O
the,O
Company,O
determines,O
that,O
the,O
carrying,O
value,O
of,O
an,O
asset,O
may,O
not,O
be,O
recoverable,O
",",O
the,O
related,O
estimated,O
future,O
undiscounted,O
cash,O
flows,O
expected,O
to,O
result,O
from,O
the,O
use,O
and,O
eventual,O
disposition,O
of,O
the,O
asset,O
are,O
compared,O
to,O
the,O
carrying,O
value,O
of,O
the,O
asset,O
.,O
,O
If,O
the,O
sum,O
of,O
the,O
estimated,O
future,O
undiscounted,O
cash,O
flows,O
is,O
less,O
than,O
the,O
carrying,O
amount,O
",",O
an,O
impairment,O
charge,O
is,O
recorded,O
based,O
on,O
the,O
difference,O
between,O
the,O
carrying,O
value,O
of,O
the,O
asset,O
and,O
its,O
fair,O
value,O
",",O
which,O
the,O
Company,O
estimates,O
based,O
on,O
discounted,O
expected,O
future,O
cash,O
flows,O
.,O
,O
In,O
determining,O
whether,O
an,O
asset,O
is,O
impaired,O
",",O
the,O
Company,O
makes,O
assumptions,O
regarding,O
recoverability,O
of,O
costs,O
",",O
estimated,O
future,O
cash,O
flows,O
from,O
the,O
asset,O
",",O
intended,O
use,O
of,O
the,O
asset,O
and,O
other,O
relevant,O
factors,O
.,O
,O
If,O
these,O
estimates,O
or,O
their,O
related,O
assumptions,O
change,O
",",O
impairment,O
charges,O
for,O
these,O
assets,O
may,O
be,O
required,O
.,O
,O
Future,O
Amortization,O
of,O
Acquisition-Related,O
Intangible,O
Assets,O
Based,O
on,O
amounts,O
recorded,O
at,O
December,O
31,O
",",O
2010,O
",",O
total,O
expected,O
amortization,O
of,O
all,O
acquisition-related,O
intangible,O
assets,O
in,O
each,O
of,O
the,O
years,O
ended,O
December,O
31,O
follows,O
(,O
in,O
millions,O
),O
:,O
,O
Trade,O
Name,O
and,O
Goodwill,O
The,O
trade,O
name,O
intangible,O
asset,O
primarily,O
represents,O
the,O
fair,O
value,O
of,O
the,O
SunGard,I-BUSINESS
trade,O
name,O
at,O
August,O
11,O
",",O
2005,O
and,O
is,O
an,O
indefinite-lived,O
asset,O
and,O
therefore,O
is,O
not,O
subject,O
to,O
amortization,O
but,O
is,O
reviewed,O
at,O
least,O
annually,O
for,O
impairment,O
.,O
,O
Other,O
trade,O
names,O
are,O
amortized,O
over,O
their,O
estimated,O
useful,O
lives,O
.,O
,O
Goodwill,O
represents,O
the,O
excess,O
of,O
cost,O
over,O
the,O
fair,O
value,O
of,O
net,O
assets,O
acquired,O
.,O
,O
Generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
require,O
the,O
Company,O
to,O
perform,O
an,O
impairment,O
test,O
",",O
a,O
two-step,O
test,O
",",O
annually,O
and,O
more,O
frequently,O
when,O
negative,O
conditions,O
or,O
a,O
triggering,O
event,O
arise,O
.,O
,O
The,O
Company,O
completes,O
its,O
annual,O
goodwill,O
impairment,O
test,O
as,O
of,O
July,O
1,O
.,O
,O
In,O
step,O
one,O
",",O
the,O
estimated,O
fair,O
value,O
of,O
each,O
reporting,O
unit,O
is,O
compared,O
to,O
its,O
carrying,O
value,O
.,O
,O
The,O
Company,O
estimates,O
the,O
fair,O
values,O
of,O
each,O
reporting,O
unit,O
by,O
a,O
combination,O
of,O
(,O
i,O
),O
estimation,O
of,O
the,O
discounted,O
cash,O
flows,O
of,O
each,O
of,O
the,O
reporting,O
units,O
based,O
on,O
projected,O
earnings,O
in,O
the,O
future,O
(,O
the,O
income,O
approach,O
),O
and,O
(,O
ii,O
),O
a,O
comparative,O
analysis,O
of,O
revenue,O
and,O
EBITDA,O
multiples,O
of,O
public,O
companies,O
in,O
similar,O
markets,O
(,O
the,O
market,O
approach,O
),O
.,O
,O
If,O
there,O
is,O
a,O
deficiency,O
(,O
the,O
estimated,O
fair,O
value,O
of,O
a,O
reporting,O
unit,O
is,O
less,O
than,O
the,O
carrying,O
value,O
),O
",",O
a,O
step,O
two,O
test,O
is,O
required,O
.,O
,O
In,O
step,O
two,O
",",O
the,O
amount,O
of,O
any,O
goodwill,O
impairment,O
is,O
measured,O
by,O
comparing,O
the,O
implied,O
fair,O
value,O
of,O
the,O
reporting,O
unit,O
s,O
goodwill,O
to,O
the,O
carrying,O
value,O
of,O
goodwill,O
",",O
with,O
the,O
resulting,O
impairment,O
reflected,O
in,O
operations,O
.,O
,O
The,O
implied,O
fair,O
value,O
is,O
determined,O
in,O
the,O
same,O
manner,O
as,O
the,O
amount,O
of,O
goodwill,O
recognized,O
in,O
a,O
business,O
combination,O
.,O
,O
Estimating,O
the,O
fair,O
value,O
of,O
a,O
reporting,O
unit,O
requires,O
various,O
assumptions,O
including,O
the,O
use,O
of,O
projections,O
of,O
future,O
cash,O
flows,O
and,O
discount,O
rates,O
that,O
reflect,O
the,O
risks,O
associated,O
with,O
achieving,O
those,O
cash,O
flows,O
.,O
,O
The,O
assumptions,O
about,O
future,O
cash,O
flows,O
and,O
growth,O
rates,O
are,O
based,O
on,O
management,O
s,O
assessment,O
of,O
a,O
number,O
of,O
factors,O
including,O
the,O
reporting,O
unit,O
s,O
recent,O
performance,O
against,O
budget,O
",",O
performance,O
in,O
the,O
market,O
that,O
the,O
reporting,O
unit,O
serves,O
as,O
well,O
as,O
industry,O
and,O
general,O
economic,O
data,O
from,O
third,O
party,O
sources,O
.,O
,O
Discount,O
rate,O
assumptions,O
are,O
based,O
on,O
an,O
assessment,O
of,O
the,O
risk,O
inherent,O
in,O
those,O
future,O
cash,O
flows,O
.,O
,O
Changes,O
to,O
the,O
underlying,O
businesses,O
could,O
affect,O
the,O
future,O
cash,O
flows,O
",",O
which,O
in,O
turn,O
could,O
affect,O
the,O
fair,O
value,O
of,O
the,O
reporting,O
unit,O
.,O
,O
For,O
the,O
most,O
recent,O
annual,O
impairment,O
test,O
as,O
of,O
July,O
1,O
",",O
2010,O
",",O
the,O
discount,O
rates,O
used,O
were,O
10,O
%,O
or,O
11,O
%,O
and,O
perpetual,O
growth,O
rates,O
used,O
were,O
3,O
%,O
or,O
4,O
%,O
",",O
based,O
on,O
the,O
specific,O
characteristics,O
of,O
the,O
reporting,O
unit,O
.,O
,O
Based,O
on,O
the,O
results,O
of,O
the,O
step,O
one,O
test,O
for,O
the,O
July,O
1,O
annual,O
impairment,O
test,O
for,O
2010,O
",",O
the,O
Company,O
determined,O
that,O
the,O
carrying,O
value,O
of,O
our,O
Public,O
Sector,O
North,I-LOCATION
America,I-LOCATION
(,O
PS,O
NA,I-LOCATION
),O
",",O
Public,O
Sector,O
United,I-LOCATION
Kingdom,I-LOCATION
(,O
PS,O
UK,I-LOCATION
),O
",",O
which,O
has,O
since,O
been,O
sold,O
and,O
is,O
included,O
in,O
discontinued,O
operations,O
",",O
and,O
Higher,O
Education,O
Managed,O
Services,O
(,O
HE,O
MS,O
),O
reporting,O
units,O
were,O
in,O
excess,O
of,O
their,O
respective,O
fair,O
values,O
and,O
a,O
step,O
two,O
test,O
was,O
required,O
for,O
each,O
of,O
these,O
reporting,O
units,O
.,O
,O
these,O
three,O
reporting,O
units,O
serve,O
.,O
,O
Furthermore,O
",",O
there,O
was,O
a,O
decline,O
in,O
the,O
cash,O
flow,O
projections,O
for,O
the,O
PS,O
NA,I-LOCATION
and,O
PS,O
UK,I-LOCATION
reporting,O
units,O
",",O
compared,O
to,O
those,O
used,O
in,O
the,O
2009,O
goodwill,O
impairment,O
test,O
",",O
as,O
a,O
result,O
of,O
decline,O
in,O
the,O
overall,O
outlook,O
for,O
these,O
two,O
reporting,O
units,O
.,O
,O
Additionally,O
",",O
the,O
discount,O
rate,O
assumption,O
used,O
for,O
the,O
PS,O
UK,I-LOCATION
reporting,O
unit,O
was,O
higher,O
than,O
the,O
discount,O
rate,O
used,O
in,O
the,O
2009,O
impairment,O
test,O
.,O
,O
A,O
one,O
percentage,O
point,O
increase,O
in,O
the,O
perpetual,O
growth,O
rate,O
or,O
a,O
one,O
percentage,O
point,O
decrease,O
in,O
the,O
discount,O
rate,O
would,O
have,O
resulted,O
in,O
the,O
HE,O
MS,O
reporting,O
unit,O
having,O
a,O
fair,O
value,O
in,O
excess,O
of,O
carrying,O
value,O
and,O
a,O
step,O
two,O
test,O
would,O
not,O
have,O
been,O
required,O
.,O
,O
Prior,O
to,O
completing,O
the,O
step,O
two,O
tests,O
",",O
the,O
Company,O
first,O
evaluated,O
the,O
long-lived,O
assets,O
",",O
primarily,O
the,O
software,O
",",O
customer,O
base,O
and,O
property,O
and,O
equipment,O
",",O
for,O
impairment,O
.,O
,O
In,O
performing,O
the,O
impairment,O
tests,O
for,O
long-lived,O
assets,O
",",O
the,O
Company,O
estimated,O
the,O
undiscounted,O
cash,O
flows,O
for,O
the,O
asset,O
groups,O
over,O
the,O
remaining,O
useful,O
lives,O
of,O
the,O
reporting,O
unit,O
s,O
primary,O
asset,O
and,O
compared,O
that,O
to,O
the,O
carrying,O
value,O
of,O
the,O
asset,O
groups,O
.,O
,O
There,O
was,O
no,O
impairment,O
of,O
the,O
long-lived,O
assets,O
.,O
,O
In,O
completing,O
the,O
step,O
two,O
tests,O
to,O
determine,O
the,O
implied,O
fair,O
value,O
of,O
goodwill,O
and,O
therefore,O
the,O
amount,O
of,O
impairment,O
",",O
the,O
Company,O
first,O
determined,O
the,O
fair,O
value,O
of,O
the,O
tangible,O
and,O
intangible,O
assets,O
and,O
liabilities,O
.,O
,O
Based,O
on,O
the,O
testing,O
performed,O
",",O
the,O
Company,O
determined,O
that,O
the,O
carrying,O
value,O
of,O
goodwill,O
exceeded,O
its,O
implied,O
fair,O
value,O
for,O
each,O
of,O
the,O
three,O
reporting,O
units,O
and,O
recorded,O
a,O
goodwill,O
impairment,O
charge,O
of,O
$,O
328,O
million,O
",",O
of,O
which,O
$,O
237,O
million,O
is,O
presented,O
in,O
continuing,O
operations,O
and,O
$,O
91,O
million,O
in,O
discontinued,O
operations,O
.,O
,O
The,O
Company,O
has,O
three,O
other,O
reporting,O
units,O
",",O
whose,O
goodwill,O
balances,O
total,O
$,O
2.1,O
billion,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
where,O
the,O
excess,O
of,O
the,O
estimated,O
fair,O
value,O
over,O
the,O
carrying,O
value,O
of,O
the,O
reporting,O
unit,O
was,O
less,O
than,O
10,O
%,O
of,O
the,O
carrying,O
value,O
as,O
of,O
the,O
July,O
1,O
",",O
2010,O
impairment,O
test,O
.,O
,O
A,O
one,O
percentage,O
point,O
decrease,O
in,O
the,O
perpetual,O
growth,O
rate,O
or,O
a,O
one,O
percentage,O
point,O
increase,O
in,O
the,O
discount,O
rate,O
would,O
cause,O
each,O
of,O
these,O
reporting,O
units,O
to,O
fail,O
the,O
step,O
one,O
test,O
and,O
require,O
a,O
step,O
two,O
analysis,O
",",O
and,O
some,O
or,O
all,O
of,O
this,O
goodwill,O
could,O
be,O
impaired,O
.,O
,O
Furthermore,O
",",O
if,O
any,O
of,O
these,O
units,O
fail,O
to,O
achieve,O
expected,O
performance,O
levels,O
or,O
experience,O
a,O
downturn,O
in,O
the,O
business,O
below,O
current,O
expectations,O
",",O
goodwill,O
could,O
be,O
impaired,O
.,O
,O
The,O
Company,O
s,O
remaining,O
10,O
reporting,O
units,O
",",O
whose,O
goodwill,O
balances,O
in,O
aggregate,O
total,O
$,O
3.2,O
billion,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
each,O
had,O
estimated,O
fair,O
values,O
in,O
excess,O
of,O
25,O
%,O
more,O
than,O
the,O
carrying,O
value,O
of,O
the,O
reporting,O
unit,O
as,O
of,O
the,O
July,O
1,O
",",O
2010,O
impairment,O
test,O
.,O
,O
During,O
2009,O
",",O
based,O
on,O
an,O
evaluation,O
of,O
year-end,O
results,O
and,O
a,O
reduction,O
in,O
the,O
revenue,O
growth,O
outlook,O
for,O
the,O
AS,O
business,O
",",O
the,O
Company,O
concluded,O
that,O
AS,O
had,O
experienced,O
a,O
triggering,O
event,O
in,O
its,O
North,I-MISCELLANEOUS
American,I-MISCELLANEOUS
reporting,O
unit,O
(,O
AS,O
NA,I-LOCATION
),O
",",O
one,O
of,O
two,O
reporting,O
units,O
identified,O
in,O
the,O
July,O
1,O
",",O
2009,O
annual,O
impairment,O
test,O
where,O
the,O
excess,O
of,O
the,O
estimated,O
fair,O
value,O
over,O
the,O
carrying,O
value,O
was,O
less,O
than,O
10,O
%,O
.,O
,O
As,O
a,O
result,O
",",O
the,O
Company,O
determined,O
that,O
the,O
carrying,O
value,O
of,O
AS,O
NA,I-LOCATION
was,O
in,O
excess,O
of,O
its,O
fair,O
value,O
.,O
,O
In,O
completing,O
the,O
step,O
two,O
test,O
we,O
determined,O
that,O
the,O
carrying,O
value,O
of,O
AS,O
NA,I-LOCATION
s,O
goodwill,O
exceeded,O
its,O
implied,O
fair,O
value,O
by,O
$,O
1.13,O
billion,O
and,O
recorded,O
a,O
goodwill,O
impairment,O
charge,O
for,O
this,O
amount,O
.,O
,O
As,O
a,O
result,O
of,O
the,O
change,O
in,O
the,O
economic,O
environment,O
in,O
the,O
second,O
half,O
of,O
2008,O
and,O
completion,O
of,O
the,O
annual,O
budgeting,O
process,O
",",O
the,O
Company,O
completed,O
an,O
assessment,O
of,O
the,O
recoverability,O
of,O
our,O
goodwill,O
in,O
December,O
2008,O
.,O
,O
In,O
completing,O
this,O
review,O
",",O
the,O
Company,O
considered,O
a,O
number,O
of,O
factors,O
",",O
,O
including,O
a,O
comparison,O
of,O
the,O
budgeted,O
revenue,O
and,O
profitability,O
for,O
2009,O
to,O
that,O
included,O
in,O
the,O
annual,O
impairment,O
test,O
conducted,O
as,O
of,O
July,O
1,O
",",O
2008,O
",",O
and,O
the,O
amount,O
by,O
which,O
the,O
fair,O
value,O
of,O
each,O
reporting,O
unit,O
exceeded,O
its,O
carrying,O
value,O
in,O
the,O
2008,O
impairment,O
analysis,O
",",O
as,O
well,O
as,O
qualitative,O
factors,O
such,O
as,O
the,O
overall,O
economy,O
s,O
effect,O
on,O
each,O
reporting,O
unit,O
.,O
,O
Based,O
on,O
this,O
analysis,O
",",O
the,O
Company,O
concluded,O
that,O
the,O
decline,O
in,O
expected,O
future,O
cash,O
flows,O
in,O
one,O
of,O
its,O
PS,O
reporting,O
units,O
",",O
which,O
has,O
since,O
been,O
sold,O
and,O
presented,O
in,O
discontinued,O
operations,O
",",O
was,O
sufficient,O
to,O
result,O
in,O
an,O
impairment,O
of,O
goodwill,O
of,O
$,O
128,O
million,O
.,O
,O
The,O
following,O
table,O
summarizes,O
changes,O
in,O
goodwill,O
by,O
segment,O
(,O
in,O
millions,O
),O
:,O
,O
The,O
2009,O
adjustments,O
related,O
to,O
the,O
LBO,O
and,O
prior,O
year,O
acquisitions,O
includes,O
a,O
$,O
114,O
million,O
adjustment,O
to,O
correct,O
the,O
income,O
tax,O
rate,O
used,O
to,O
calculate,O
the,O
deferred,O
tax,O
liabilities,O
associated,O
with,O
the,O
intangible,O
assets,O
at,O
the,O
LBO,O
date,O
.,O
,O
The,O
adjustment,O
was,O
not,O
material,O
to,O
prior,O
periods,O
.,O
,O
Stock,O
Compensation,O
Stock-based,O
compensation,O
cost,O
is,O
measured,O
at,O
the,O
grant,O
date,O
based,O
on,O
the,O
fair,O
value,O
of,O
the,O
award,O
and,O
is,O
recognized,O
as,O
expense,O
over,O
the,O
appropriate,O
service,O
period,O
.,O
,O
Fair,O
value,O
for,O
stock,O
options,O
is,O
computed,O
using,O
the,O
Black-Scholes,I-MISCELLANEOUS
pricing,I-MISCELLANEOUS
model,I-MISCELLANEOUS
.,O
,O
Determining,O
the,O
fair,O
value,O
of,O
stock-based,O
awards,O
requires,O
considerable,O
judgment,O
",",O
including,O
estimating,O
the,O
expected,O
term,O
of,O
stock,O
options,O
",",O
expected,O
volatility,O
of,O
the,O
Company,O
s,O
stock,O
price,O
",",O
and,O
the,O
number,O
of,O
awards,O
expected,O
to,O
be,O
forfeited,O
.,O
,O
In,O
addition,O
",",O
for,O
stock-based,O
awards,O
where,O
vesting,O
is,O
dependent,O
upon,O
achieving,O
certain,O
operating,O
performance,O
goals,O
",",O
the,O
Company,O
estimates,O
the,O
likelihood,O
of,O
achieving,O
the,O
performance,O
goals,O
.,O
,O
Differences,O
between,O
actual,O
results,O
and,O
these,O
estimates,O
could,O
have,O
a,O
material,O
effect,O
on,O
the,O
consolidated,O
financial,O
results,O
.,O
,O
A,O
deferred,O
income,O
tax,O
asset,O
is,O
recorded,O
over,O
the,O
vesting,O
period,O
as,O
stock,O
compensation,O
expense,O
is,O
recognized,O
.,O
,O
The,O
Company,O
s,O
ability,O
to,O
use,O
the,O
deferred,O
tax,O
asset,O
is,O
ultimately,O
based,O
on,O
the,O
actual,O
value,O
of,O
the,O
stock,O
option,O
upon,O
exercise,O
or,O
restricted,O
stock,O
unit,O
upon,O
distribution,O
.,O
,O
If,O
the,O
actual,O
value,O
is,O
lower,O
than,O
the,O
fair,O
value,O
determined,O
on,O
the,O
date,O
of,O
grant,O
",",O
there,O
could,O
be,O
an,O
income,O
tax,O
expense,O
for,O
the,O
portion,O
of,O
the,O
deferred,O
tax,O
asset,O
that,O
can,O
not,O
be,O
used,O
",",O
which,O
could,O
have,O
a,O
material,O
effect,O
on,O
the,O
consolidated,O
financial,O
results,O
.,O
,O
Income,O
Taxes,O
The,O
Company,O
recognizes,O
deferred,O
income,O
tax,O
assets,O
and,O
liabilities,O
based,O
upon,O
the,O
expected,O
future,O
tax,O
consequences,O
of,O
events,O
that,O
have,O
been,O
recognized,O
in,O
the,O
financial,O
statements,O
or,O
tax,O
returns,O
.,O
,O
Deferred,O
income,O
tax,O
assets,O
and,O
liabilities,O
are,O
calculated,O
based,O
on,O
the,O
difference,O
between,O
the,O
financial,O
and,O
tax,O
bases,O
of,O
assets,O
and,O
liabilities,O
using,O
the,O
currently,O
enacted,O
income,O
tax,O
rates,O
in,O
effect,O
during,O
the,O
years,O
in,O
which,O
the,O
differences,O
are,O
expected,O
to,O
reverse,O
.,O
,O
Valuation,O
allowances,O
are,O
recorded,O
to,O
reduce,O
deferred,O
tax,O
assets,O
when,O
it,O
is,O
more,O
likely,O
than,O
not,O
that,O
a,O
tax,O
benefit,O
will,O
not,O
be,O
realized,O
.,O
,O
Deferred,O
tax,O
assets,O
for,O
which,O
no,O
valuation,O
allowance,O
is,O
recorded,O
may,O
not,O
be,O
realized,O
upon,O
changes,O
in,O
facts,O
and,O
circumstances,O
.,O
,O
Tax,O
benefits,O
related,O
to,O
uncertain,O
tax,O
positions,O
taken,O
or,O
expected,O
to,O
be,O
taken,O
on,O
a,O
tax,O
return,O
are,O
recorded,O
when,O
such,O
benefits,O
meet,O
a,O
more,O
likely,O
than,O
not,O
threshold,O
.,O
,O
Otherwise,O
",",O
these,O
tax,O
benefits,O
are,O
recorded,O
when,O
a,O
tax,O
position,O
has,O
been,O
effectively,O
settled,O
",",O
which,O
means,O
that,O
the,O
appropriate,O
taxing,O
authority,O
has,O
completed,O
their,O
examination,O
even,O
though,O
the,O
statute,O
of,O
limitations,O
remains,O
open,O
",",O
or,O
the,O
statute,O
of,O
limitation,O
expires,O
.,O
,O
Considerable,O
judgment,O
is,O
required,O
in,O
assessing,O
and,O
estimating,O
these,O
amounts,O
and,O
differences,O
between,O
the,O
actual,O
outcome,O
of,O
these,O
future,O
tax,O
consequences,O
and,O
estimates,O
made,O
could,O
have,O
a,O
material,O
effect,O
on,O
the,O
consolidated,O
financial,O
results,O
.,O
,O
Acquisitions,O
and,O
Discontinued,O
Operations,O
:,O
Acquisitions,O
The,O
Company,O
seeks,O
to,O
acquire,O
businesses,O
that,O
broaden,O
its,O
existing,O
product,O
lines,O
and,O
service,O
offerings,O
by,O
adding,O
complementary,O
products,O
and,O
service,O
offerings,O
and,O
by,O
expanding,O
its,O
geographic,O
reach,O
.,O
,O
During,O
2010,O
",",O
the,O
Company,O
completed,O
three,O
acquisitions,O
in,O
its,O
FS,O
segment,O
and,O
one,O
in,O
its,O
AS,O
segment,O
.,O
,O
Cash,O
paid,O
",",O
subject,O
to,O
certain,O
adjustments,O
",",O
was,O
$,O
82,O
million,O
.,O
,O
During,O
2009,O
",",O
the,O
Company,O
completed,O
three,O
acquisitions,O
in,O
its,O
FS,O
segment,O
",",O
and,O
",",O
in,O
2008,O
",",O
the,O
Company,O
completed,O
four,O
acquisitions,O
in,O
its,O
FS,O
segment,O
",",O
including,O
GL,I-BUSINESS
TRADE,I-BUSINESS
S.A.,I-BUSINESS
",",O
and,O
two,O
in,O
its,O
AS,O
segment,O
.,O
,O
Pro,O
Forma,O
Financial,O
Information,O
(,O
unaudited,O
),O
The,O
following,O
unaudited,O
pro,O
forma,O
results,O
of,O
operations,O
(,O
in,O
millions,O
),O
for,O
2008,O
assumes,O
that,O
businesses,O
acquired,O
in,O
2008,O
and,O
2009,O
occurred,O
as,O
of,O
the,O
beginning,O
of,O
2008,O
and,O
were,O
reflected,O
in,O
the,O
Company,O
s,O
results,O
from,O
that,O
date,O
.,O
,O
The,O
pro,O
forma,O
effect,O
of,O
the,O
2010,O
acquisitions,O
on,O
2010,O
was,O
not,O
material,O
.,O
,O
The,O
pro,O
forma,O
effect,O
of,O
the,O
2009,O
and,O
2010,O
acquisitions,O
on,O
2009,O
was,O
not,O
material,O
.,O
,O
For,O
2008,O
",",O
in,O
addition,O
to,O
the,O
businesses,O
acquired,O
in,O
2009,O
",",O
the,O
pro,O
forma,O
results,O
include,O
the,O
2008,O
acquisitions,O
",",O
the,O
more,O
significant,O
of,O
which,O
are,O
GL,I-BUSINESS
TRADE,I-BUSINESS
S.A.,I-BUSINESS
",",O
Strohl,I-BUSINESS
Systems,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
Advanced,I-BUSINESS
Portfolio,I-BUSINESS
Technologies,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
The,O
2010,O
acquisitions,O
are,O
excluded,O
from,O
the,O
2008,O
pro,O
forma,O
results,O
.,O
,O
This,O
unaudited,O
pro,O
forma,O
information,O
should,O
not,O
be,O
relied,O
upon,O
as,O
necessarily,O
being,O
indicative,O
of,O
the,O
historical,O
results,O
that,O
would,O
have,O
been,O
obtained,O
if,O
the,O
acquisitions,O
had,O
actually,O
occurred,O
at,O
the,O
beginning,O
of,O
each,O
period,O
presented,O
",",O
nor,O
of,O
the,O
results,O
that,O
may,O
be,O
obtained,O
in,O
the,O
future,O
.,O
,O
The,O
pro,O
forma,O
adjustments,O
include,O
the,O
effect,O
of,O
purchase,O
accounting,O
adjustments,O
",",O
interest,O
expense,O
and,O
related,O
tax,O
effects,O
.,O
,O
Discontinued,O
Operations,O
In,O
December,O
2010,O
",",O
the,O
Company,O
sold,O
its,O
PS,O
UK,I-LOCATION
operations,O
for,O
gross,O
proceeds,O
of,O
£88,O
million,O
(,O
$,O
138,O
million,O
),O
and,O
recorded,O
a,O
noncash,O
loss,O
on,O
the,O
sale,O
of,O
$,O
94,O
million,O
.,O
,O
In,O
2008,O
and,O
2010,O
",",O
impairment,O
charges,O
of,O
$,O
128,O
million,O
and,O
$,O
91,O
million,O
",",O
respectively,O
",",O
were,O
incurred,O
related,O
to,O
the,O
discontinued,O
operations,O
.,O
,O
The,O
results,O
for,O
the,O
discontinued,O
operations,O
for,O
2008,O
",",O
2009,O
and,O
2010,O
were,O
as,O
follows,O
(,O
in,O
millions,O
),O
:,O
,O
Clearing,O
Broker,O
Assets,O
and,O
Liabilities,O
:,O
Clearing,O
broker,O
assets,O
and,O
liabilities,O
are,O
comprised,O
of,O
the,O
following,O
(,O
in,O
millions,O
),O
:,O
,O
Segregated,O
customer,O
cash,O
and,O
treasury,O
bills,O
are,O
held,O
by,O
the,O
Company,O
on,O
behalf,O
of,O
customers,O
.,O
,O
Clearing,O
broker,O
securities,O
consist,O
of,O
trading,O
and,O
investment,O
securities,O
at,O
fair,O
market,O
values,O
",",O
which,O
are,O
based,O
on,O
quoted,O
market,O
rates,O
.,O
,O
Securities,O
borrowed,O
and,O
loaned,O
are,O
collateralized,O
financing,O
transactions,O
which,O
are,O
cash,O
deposits,O
made,O
to,O
or,O
received,O
from,O
other,O
broker/dealers,O
.,O
,O
Receivables,O
from,O
and,O
payables,O
to,O
customers,O
represent,O
amounts,O
due,O
or,O
payable,O
on,O
cash,O
and,O
margin,O
transactions,O
.,O
,O
Property,O
and,O
Equipment,O
:,O
Property,O
and,O
equipment,O
consisted,O
of,O
the,O
following,O
(,O
in,O
millions,O
),O
:,O
,O
Debt,O
and,O
Derivative,O
Instruments,O
:,O
Debt,O
consisted,O
of,O
the,O
following,O
(,O
in,O
millions,O
),O
:,O
,O
As,O
a,O
result,O
of,O
the,O
LBO,O
",",O
the,O
Company,O
is,O
highly,O
leveraged,O
.,O
,O
SunGard,O
was,O
in,O
compliance,O
with,O
all,O
covenants,O
at,O
December,O
31,O
",",O
2010,O
.,O
,O
Below,O
is,O
a,O
summary,O
of,O
our,O
debt,O
instruments,O
.,O
,O
(,O
A,O
),O
Senior,O
Secured,O
Credit,O
Facilities,O
SunGard,I-BUSINESS
s,O
senior,O
secured,O
credit,O
facilities,O
(,O
Credit,O
Agreement,O
),O
consist,O
of,O
(,O
1,O
),O
$,O
1.39,O
billion,O
of,O
U.S.,I-LOCATION
dollar-denominated,O
tranche,O
A,O
term,O
loans,O
and,O
$,O
62,O
million,O
of,O
pound,O
sterling-denominated,O
tranche,O
A,O
term,O
loans,O
",",O
each,O
maturing,O
on,O
February,O
28,O
",",O
2014,O
",",O
collectively,O
referred,O
to,O
as,O
the,O
unextended,O
term,O
loans,O
",",O
(,O
2,O
),O
$,O
2.41,O
billion,O
of,O
U.S.,I-LOCATION
dollar-denominated,O
tranche,O
B,O
term,O
loans,O
and,O
$,O
60,O
million,O
of,O
pound,O
sterling-denominated,O
tranche,O
B,O
term,O
loans,O
",",O
each,O
maturing,O
on,O
February,O
28,O
",",O
2016,O
",",O
collectively,O
referred,O
to,O
as,O
the,O
extended,O
term,O
loans,O
",",O
(,O
3,O
),O
$,O
479,O
million,O
of,O
U.S.,I-LOCATION
dollar-denominated,O
incremental,O
term,O
loans,O
maturing,O
on,O
February,O
28,O
",",O
2014,O
and,O
(,O
4,O
),O
an,O
$,O
829,O
million,O
revolving,O
credit,O
facility,O
with,O
$,O
580,O
million,O
of,O
commitments,O
terminating,O
on,O
May,O
11,O
",",O
2013,O
",",O
referred,O
to,O
as,O
the,O
extended,O
revolving,O
credit,O
loans,O
",",O
and,O
$,O
249,O
million,O
of,O
commitments,O
terminating,O
on,O
August,O
11,O
",",O
2011,O
",",O
referred,O
to,O
as,O
the,O
unextended,O
revolving,O
credit,O
loans,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2010,O
",",O
$,O
796,O
million,O
was,O
available,O
for,O
borrowing,O
under,O
the,O
revolving,O
credit,O
facility,O
after,O
giving,O
effect,O
to,O
certain,O
outstanding,O
letters,O
of,O
credit,O
.,O
,O
Borrowings,O
under,O
the,O
senior,O
secured,O
credit,O
facilities,O
bear,O
interest,O
at,O
a,O
rate,O
equal,O
to,O
an,O
applicable,O
margin,O
plus,O
",",O
at,O
our,O
option,O
",",O
either,O
(,O
a,O
),O
a,O
base,O
rate,O
that,O
is,O
the,O
higher,O
of,O
(,O
1,O
),O
the,O
prime,O
rate,O
of,O
JPMorgan,I-BUSINESS
Chase,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
and,O
(,O
2,O
),O
the,O
federal,O
funds,O
rate,O
plus,O
1/2,O
of,O
1,O
%,O
or,O
(,O
b,O
),O
LIBOR,O
based,O
on,O
the,O
costs,O
of,O
funds,O
for,O
deposits,O
in,O
the,O
currency,O
of,O
such,O
borrowing,O
for,O
either,O
30,O
",",O
60,O
",",O
90,O
or,O
180,O
days,O
.,O
,O
The,O
applicable,O
margin,O
for,O
borrowings,O
under,O
the,O
revolving,O
credit,O
facility,O
and,O
the,O
term,O
loan,O
facility,O
may,O
change,O
subject,O
to,O
attaining,O
certain,O
leverage,O
ratios,O
.,O
,O
In,O
addition,O
to,O
paying,O
interest,O
on,O
outstanding,O
principal,O
under,O
the,O
senior,O
secured,O
credit,O
facilities,O
",",O
we,O
pay,O
a,O
commitment,O
fee,O
to,O
the,O
lenders,O
under,O
the,O
revolving,O
credit,O
facility,O
in,O
respect,O
of,O
the,O
unutilized,O
commitments,O
.,O
,O
The,O
commitment,O
fee,O
rates,O
with,O
respect,O
to,O
unused,O
commitments,O
terminating,O
in,O
2011,O
and,O
unused,O
commitments,O
terminating,O
in,O
2013,O
are,O
0.50,O
%,O
per,O
annum,O
and,O
0.75,O
%,O
per,O
annum,O
",",O
respectively,O
",",O
and,O
may,O
change,O
subject,O
to,O
attaining,O
certain,O
leverage,O
ratios,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2010,O
",",O
the,O
interest,O
rate,O
for,O
the,O
extended,O
term,O
loans,O
",",O
after,O
adjusting,O
for,O
interest,O
rate,O
swaps,O
",",O
was,O
6.67,O
%,O
and,O
for,O
the,O
unextended,O
term,O
loans,O
",",O
after,O
adjusting,O
for,O
interest,O
rate,O
swaps,O
",",O
was,O
3.29,O
%,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2010,O
",",O
the,O
interest,O
rate,O
options,O
available,O
under,O
the,O
revolving,O
credit,O
facility,O
were,O
(,O
a,O
),O
the,O
base,O
rate,O
",",O
which,O
was,O
4.25,O
%,O
for,O
the,O
unextended,O
revolving,O
credit,O
loans,O
and,O
5.50,O
%,O
for,O
extended,O
revolving,O
credit,O
loans,O
or,O
(,O
b,O
),O
LIBOR,O
plus,O
2.00,O
%,O
for,O
unextended,O
revolving,O
credit,O
loans,O
and,O
LIBOR,O
plus,O
3.25,O
%,O
for,O
extended,O
revolving,O
credit,O
loans,O
.,O
,O
All,O
obligations,O
under,O
the,O
senior,O
secured,O
credit,O
facilities,O
are,O
fully,O
and,O
unconditionally,O
guaranteed,O
by,O
SunGard,I-BUSINESS
Holdco,I-BUSINESS
LLC,I-BUSINESS
and,O
by,O
substantially,O
all,O
domestic,O
",",O
100,O
%,O
owned,O
subsidiaries,O
",",O
referred,O
to,O
",",O
collectively,O
",",O
as,O
Guarantors,O
.,O
,O
SunGard,I-BUSINESS
is,O
required,O
to,O
repay,O
installments,O
on,O
the,O
loans,O
under,O
the,O
term,O
loan,O
facilities,O
in,O
quarterly,O
principal,O
amounts,O
of,O
0.25,O
%,O
of,O
their,O
funded,O
total,O
principal,O
amount,O
through,O
the,O
maturity,O
date,O
for,O
each,O
class,O
of,O
term,O
loans,O
",",O
at,O
which,O
time,O
the,O
remaining,O
aggregate,O
principal,O
balance,O
is,O
due,O
.,O
,O
Maturity,O
dates,O
for,O
our,O
tranche,O
B,O
term,O
loan,O
facilities,O
will,O
automatically,O
become,O
May,O
15,O
",",O
2015,O
if,O
the,O
Senior,O
Subordinated,O
Notes,O
are,O
not,O
extended,O
",",O
renewed,O
or,O
refinanced,O
on,O
or,O
prior,O
to,O
May,O
15,O
",",O
2015,O
.,O
,O
The,O
senior,O
secured,O
credit,O
facilities,O
also,O
require,O
SunGard,I-BUSINESS
to,O
prepay,O
outstanding,O
term,O
loans,O
",",O
subject,O
to,O
certain,O
exceptions,O
",",O
with,O
excess,O
cash,O
flow,O
and,O
proceeds,O
from,O
certain,O
asset,O
sales,O
",",O
casualty,O
and,O
condemnation,O
events,O
",",O
other,O
borrowings,O
and,O
certain,O
financings,O
under,O
SunGard,I-BUSINESS
s,O
accounts,O
receivable,O
securitization,O
program,O
.,O
,O
Any,O
required,O
payments,O
would,O
be,O
applied,O
pro,O
rata,O
to,O
the,O
term,O
loan,O
lenders,O
and,O
to,O
installments,O
of,O
the,O
term,O
loan,O
facilities,O
in,O
direct,O
order,O
of,O
maturity,O
.,O
,O
The,O
senior,O
secured,O
credit,O
facilities,O
contain,O
a,O
number,O
of,O
covenants,O
that,O
",",O
among,O
other,O
things,O
",",O
restrict,O
",",O
subject,O
to,O
certain,O
exceptions,O
",",O
SunGard,I-BUSINESS
s,O
(,O
and,O
most,O
or,O
all,O
of,O
its,O
subsidiaries,O
),O
ability,O
to,O
incur,O
additional,O
debt,O
or,O
issue,O
preferred,O
stock,O
",",O
pay,O
dividends,O
and,O
distributions,O
on,O
or,O
repurchase,O
capital,O
stock,O
",",O
create,O
liens,O
on,O
assets,O
",",O
enter,O
into,O
sale,O
and,O
leaseback,O
transactions,O
",",O
repay,O
subordinated,O
indebtedness,O
",",O
make,O
investments,O
",",O
loans,O
or,O
advances,O
",",O
make,O
capital,O
expenditures,O
",",O
engage,O
in,O
certain,O
transactions,O
with,O
affiliates,O
",",O
amend,O
certain,O
material,O
agreements,O
",",O
change,O
its,O
lines,O
of,O
business,O
",",O
sell,O
assets,O
and,O
engage,O
in,O
mergers,O
or,O
consolidations,O
.,O
,O
In,O
addition,O
",",O
under,O
the,O
senior,O
secured,O
credit,O
facilities,O
",",O
SunGard,I-BUSINESS
is,O
required,O
to,O
satisfy,O
certain,O
total,O
leverage,O
and,O
interest,O
coverage,O
ratios,O
.,O
,O
In,O
December,O
2010,O
",",O
we,O
sold,O
our,O
PS,O
UK,I-LOCATION
operation,O
for,O
gross,O
proceeds,O
of,O
£88,O
million,O
(,O
$,O
138,O
million,O
),O
.,O
,O
Under,O
SunGard,I-BUSINESS
s,O
debt,O
covenants,O
",",O
the,O
Company,O
was,O
required,O
to,O
apply,O
the,O
Net,O
Proceeds,O
",",O
as,O
defined,O
in,O
the,O
Credit,O
Agreement,O
",",O
to,O
the,O
repayment,O
of,O
outstanding,O
term,O
loans,O
.,O
,O
Accordingly,O
",",O
SunGard,I-BUSINESS
repaid,O
$,O
96,O
million,O
of,O
its,O
US,O
dollar-denominated,O
term,O
loans,O
",",O
$,O
3,O
million,O
of,O
pound,O
sterling-denominated,O
term,O
loans,O
and,O
$,O
2,O
million,O
of,O
our,O
euro-denominated,O
term,O
loans,O
.,O
,O
In,O
addition,O
",",O
and,O
concurrent,O
with,O
these,O
mandatory,O
prepayments,O
",",O
other,O
available,O
cash,O
was,O
used,O
to,O
voluntarily,O
repay,O
the,O
remaining,O
$,O
164,O
million,O
balance,O
outstanding,O
on,O
the,O
euro-denominated,O
term,O
loans,O
.,O
,O
As,O
a,O
result,O
of,O
the,O
repayment,O
",",O
SunGard,I-BUSINESS
is,O
not,O
required,O
to,O
make,O
quarterly,O
principal,O
payments,O
on,O
the,O
term,O
loans,O
until,O
December,O
2012,O
.,O
,O
In,O
June,O
2009,O
",",O
SunGard,I-BUSINESS
amended,O
and,O
restated,O
its,O
existing,O
Credit,O
Agreement,O
to,O
(,O
a,O
),O
extend,O
the,O
maturity,O
date,O
of,O
$,O
2.5,O
billion,O
of,O
its,O
U.S.,I-LOCATION
dollar-denominated,O
term,O
loans,O
",",O
£40,O
million,O
of,O
pound,O
sterling-denominated,O
term,O
loans,O
",",O
and,O
€120,O
million,O
of,O
euro-denominated,O
term,O
loans,O
from,O
February,O
2014,O
to,O
February,O
2016,O
",",O
(,O
b,O
),O
reduce,O
existing,O
revolving,O
credit,O
commitments,O
to,O
$,O
829,O
million,O
from,O
$,O
1,O
billion,O
and,O
extend,O
the,O
termination,O
date,O
of,O
$,O
580,O
million,O
of,O
those,O
commitments,O
to,O
May,O
2013,O
",",O
and,O
(,O
c,O
),O
amend,O
certain,O
other,O
provisions,O
including,O
those,O
related,O
to,O
negative,O
and,O
financial,O
covenants,O
.,O
,O
In,O
September,O
2008,O
",",O
the,O
Credit,O
Agreement,O
was,O
amended,O
to,O
increase,O
the,O
amount,O
of,O
term,O
loan,O
borrowings,O
by,O
SunGard,O
under,O
the,O
Credit,O
Agreement,O
by,O
$,O
500,O
million,O
(,O
Incremental,O
Term,O
Loan,O
),O
",",O
and,O
SunGard,I-BUSINESS
issued,O
at,O
a,O
$,O
6,O
million,O
discount,O
$,O
500,O
million,O
aggregate,O
principal,O
amount,O
of,O
10.625,O
%,O
Senior,O
Notes,O
due,O
2015,O
",",O
together,O
with,O
the,O
Incremental,O
Term,O
Loan,O
",",O
to,O
fund,O
the,O
acquisition,O
of,O
GL,I-BUSINESS
TRADE,I-BUSINESS
and,O
repay,O
$,O
250,O
million,O
of,O
senior,O
notes,O
due,O
in,O
January,O
2009,O
.,O
,O
The,O
second,O
amendment,O
to,O
the,O
Credit,O
Agreement,O
in,O
September,O
2008,O
changed,O
certain,O
terms,O
applicable,O
to,O
the,O
Incremental,O
Term,O
Loan,O
.,O
,O
Borrowings,O
can,O
be,O
at,O
either,O
a,O
Base,O
Rate,O
or,O
a,O
Eurocurrency,O
Rate,O
.,O
,O
Base,O
Rate,O
borrowings,O
reset,O
daily,O
and,O
bear,O
interest,O
at,O
a,O
minimum,O
of,O
4.0,O
%,O
plus,O
a,O
spread,O
of,O
2.75,O
%,O
.,O
,O
Eurocurrency,O
borrowings,O
can,O
be,O
made,O
for,O
periods,O
of,O
30,O
",",O
60,O
",",O
90,O
or,O
180,O
days,O
and,O
bear,O
interest,O
at,O
a,O
minimum,O
of,O
3.0,O
%,O
plus,O
a,O
spread,O
of,O
3.75,O
%,O
.,O
,O
The,O
interest,O
rate,O
at,O
each,O
of,O
December,O
31,O
",",O
2009,O
and,O
2010,O
was,O
6.75,O
%,O
.,O
,O
In,O
January,O
2011,O
",",O
we,O
amended,O
SunGard,I-BUSINESS
s,O
Incremental,O
Term,O
Loan,O
to,O
(,O
a,O
),O
eliminate,O
the,O
LIBOR,O
and,O
Base,O
Rate,O
floors,O
and,O
(,O
b,O
),O
reduce,O
the,O
Eurocurrency,O
Rate,O
spread,O
from,O
3.75,O
%,O
to,O
3.50,O
%,O
and,O
the,O
base,O
rate,O
spread,O
from,O
2.75,O
%,O
to,O
2.50,O
%,O
with,O
no,O
impact,O
on,O
maturity,O
.,O
,O
SunGard,I-BUSINESS
uses,O
interest,O
rate,O
swap,O
agreements,O
to,O
manage,O
the,O
amount,O
of,O
its,O
floating,O
rate,O
debt,O
in,O
order,O
to,O
reduce,O
its,O
exposure,O
to,O
variable,O
rate,O
interest,O
payments,O
associated,O
with,O
the,O
senior,O
secured,O
credit,O
facilities,O
.,O
,O
SunGard,I-BUSINESS
pays,O
a,O
stream,O
of,O
fixed,O
interest,O
payments,O
for,O
the,O
term,O
of,O
the,O
swap,O
",",O
and,O
in,O
turn,O
",",O
receives,O
variable,O
interest,O
payments,O
based,O
on,O
the,O
one-month,O
LIBOR,O
rate,O
or,O
three-month,O
LIBOR,O
rate,O
",",O
which,O
were,O
0.26,O
%,O
and,O
0.30,O
%,O
",",O
respectively,O
",",O
at,O
December,O
31,O
",",O
2010,O
.,O
,O
The,O
net,O
receipt,O
or,O
payment,O
from,O
the,O
interest,O
rate,O
swap,O
agreements,O
is,O
included,O
in,O
interest,O
expense,O
.,O
,O
A,O
summary,O
of,O
the,O
Company,O
s,O
interest,O
rate,O
swaps,O
at,O
December,O
31,O
",",O
2010,O
follows,O
:,O
,O
The,O
interest,O
rate,O
swaps,O
are,O
designated,O
and,O
qualify,O
as,O
cash,O
flow,O
hedges,O
and,O
are,O
included,O
at,O
estimated,O
fair,O
value,O
as,O
an,O
asset,O
or,O
a,O
liability,O
in,O
the,O
consolidated,O
balance,O
sheet,O
based,O
on,O
a,O
discounted,O
cash,O
flow,O
model,O
using,O
applicable,O
market,O
swap,O
rates,O
and,O
certain,O
assumptions,O
.,O
,O
For,O
2008,O
",",O
2009,O
and,O
2010,O
",",O
SunGard,O
included,O
an,O
unrealized,O
after-tax,O
loss,O
of,O
$,O
39,O
million,O
",",O
an,O
unrealized,O
after-tax,O
gain,O
of,O
$,O
18,O
million,O
",",O
and,O
an,O
unrealized,O
after-tax,O
gain,O
of,O
$,O
21,O
million,O
",",O
respectively,O
",",O
in,O
Other,O
Comprehensive,O
Income,O
(,O
Loss,O
),O
related,O
to,O
the,O
change,O
in,O
market,O
value,O
on,O
the,O
swaps,O
.,O
,O
The,O
market,O
value,O
of,O
the,O
swaps,O
recorded,O
in,O
Other,O
Comprehensive,O
Income,O
(,O
Loss,O
),O
may,O
be,O
recognized,O
in,O
the,O
statement,O
of,O
operations,O
if,O
certain,O
terms,O
of,O
the,O
senior,O
secured,O
credit,O
facilities,O
change,O
or,O
if,O
the,O
loan,O
is,O
extinguished,O
.,O
,O
The,O
$,O
70,O
million,O
and,O
$,O
38,O
million,O
fair,O
value,O
of,O
the,O
swap,O
agreements,O
at,O
December,O
31,O
",",O
2009,O
and,O
2010,O
",",O
respectively,O
",",O
is,O
included,O
in,O
accrued,O
expenses,O
.,O
,O
The,O
effects,O
of,O
the,O
interest,O
rate,O
swaps,O
are,O
reflected,O
in,O
the,O
effective,O
interest,O
rate,O
for,O
the,O
senior,O
secured,O
credit,O
facilities,O
in,O
the,O
components,O
of,O
debt,O
table,O
above,O
.,O
,O
The,O
table,O
below,O
summarizes,O
the,O
impact,O
of,O
the,O
effective,O
portion,O
of,O
interest,O
rate,O
swaps,O
on,O
the,O
balance,O
sheets,O
and,O
statements,O
of,O
operations,O
for,O
2008,O
",",O
2009,O
and,O
2010,O
(,O
in,O
millions,O
),O
:,O
,O
The,O
Company,O
had,O
no,O
ineffectiveness,O
related,O
to,O
its,O
swap,O
agreements,O
.,O
,O
The,O
Company,O
expects,O
to,O
reclassify,O
in,O
the,O
next,O
twelve,O
months,O
approximately,O
$,O
33,O
million,O
of,O
expense,O
from,O
accumulated,O
other,O
comprehensive,O
income,O
into,O
earnings,O
related,O
to,O
the,O
Company,O
s,O
interest,O
rate,O
swaps,O
based,O
on,O
the,O
borrowing,O
rates,O
at,O
December,O
31,O
",",O
2010,O
.,O
,O
2014,O
",",O
which,O
are,O
subject,O
to,O
certain,O
standard,O
covenants,O
.,O
,O
As,O
a,O
result,O
of,O
the,O
LBO,O
",",O
these,O
senior,O
notes,O
became,O
collateralized,O
on,O
an,O
equal,O
and,O
ratable,O
basis,O
with,O
loans,O
under,O
the,O
senior,O
secured,O
credit,O
facilities,O
and,O
are,O
guaranteed,O
by,O
all,O
subsidiaries,O
that,O
guarantee,O
the,O
senior,O
notes,O
due,O
2013,O
",",O
2015,O
",",O
2018,O
and,O
2020,O
and,O
senior,O
subordinated,O
notes,O
due,O
2015,O
.,O
,O
The,O
senior,O
notes,O
due,O
2014,O
are,O
recorded,O
at,O
$,O
234,O
million,O
and,O
$,O
238,O
million,O
as,O
of,O
December,O
31,O
",",O
2009,O
and,O
2010,O
",",O
respectively,O
",",O
reflecting,O
the,O
remaining,O
unamortized,O
discount,O
caused,O
by,O
the,O
LBO,O
.,O
,O
The,O
$,O
12,O
million,O
discount,O
at,O
December,O
31,O
",",O
2010,O
will,O
be,O
amortized,O
and,O
included,O
in,O
interest,O
expense,O
over,O
the,O
remaining,O
periods,O
to,O
maturity,O
.,O
,O
(,O
C,O
),O
Senior,O
Notes,O
due,O
2013,O
",",O
2015,O
",",O
2018,O
and,O
2020,O
and,O
Senior,O
Subordinated,O
Notes,O
due,O
2015,O
The,O
senior,O
notes,O
due,O
2013,O
",",O
2015,O
",",O
2018,O
and,O
2020,O
are,O
senior,O
unsecured,O
obligations,O
that,O
rank,O
senior,O
in,O
right,O
of,O
payment,O
to,O
future,O
debt,O
and,O
other,O
obligations,O
that,O
are,O
",",O
by,O
their,O
terms,O
",",O
expressly,O
subordinated,O
in,O
right,O
of,O
payment,O
to,O
the,O
senior,O
notes,O
",",O
including,O
the,O
senior,O
subordinated,O
notes,O
.,O
,O
The,O
senior,O
notes,O
(,O
i,O
),O
rank,O
equally,O
in,O
right,O
of,O
payment,O
to,O
all,O
existing,O
and,O
future,O
senior,O
debt,O
and,O
other,O
obligations,O
that,O
are,O
not,O
",",O
by,O
their,O
terms,O
",",O
expressly,O
subordinated,O
in,O
right,O
of,O
payment,O
to,O
the,O
senior,O
notes,O
",",O
(,O
ii,O
),O
are,O
effectively,O
subordinated,O
in,O
right,O
of,O
payment,O
to,O
all,O
existing,O
and,O
future,O
secured,O
debt,O
to,O
the,O
extent,O
of,O
the,O
value,O
of,O
the,O
assets,O
securing,O
such,O
debt,O
",",O
and,O
(,O
iii,O
),O
are,O
structurally,O
subordinated,O
to,O
all,O
obligations,O
of,O
each,O
subsidiary,O
that,O
is,O
not,O
a,O
guarantor,O
of,O
the,O
senior,O
notes,O
.,O
,O
All,O
obligations,O
under,O
the,O
senior,O
notes,O
are,O
fully,O
and,O
unconditionally,O
guaranteed,O
",",O
subject,O
to,O
certain,O
exceptions,O
",",O
by,O
substantially,O
all,O
domestic,O
",",O
wholly,O
owned,O
subsidiaries,O
of,O
SunGard,O
.,O
,O
In,O
November,O
2010,O
",",O
SunGard,I-BUSINESS
issued,O
$,O
900,O
million,O
of,O
7.375,O
%,O
senior,O
notes,O
due,O
2018,O
and,O
$,O
700,O
million,O
of,O
7.625,O
%,O
senior,O
notes,O
due,O
2020,O
and,O
used,O
the,O
proceeds,O
and,O
excess,O
cash,O
to,O
retire,O
the,O
$,O
1.6,O
billion,O
9.125,O
%,O
senior,O
notes,O
due,O
2013,O
.,O
,O
The,O
senior,O
subordinated,O
notes,O
due,O
2015,O
are,O
unsecured,O
senior,O
subordinated,O
obligations,O
that,O
are,O
subordinated,O
in,O
right,O
of,O
payment,O
to,O
the,O
existing,O
and,O
future,O
senior,O
debt,O
",",O
including,O
the,O
senior,O
secured,O
credit,O
facilities,O
",",O
the,O
senior,O
notes,O
due,O
2009,O
and,O
2014,O
and,O
the,O
senior,O
notes,O
due,O
2013,O
",",O
2015,O
",",O
2018,O
and,O
2020,O
.,O
,O
The,O
senior,O
subordinated,O
notes,O
(,O
i,O
),O
rank,O
equally,O
in,O
right,O
of,O
payment,O
to,O
all,O
future,O
senior,O
subordinated,O
debt,O
",",O
(,O
ii,O
),O
are,O
effectively,O
subordinated,O
in,O
right,O
of,O
payment,O
to,O
all,O
existing,O
and,O
future,O
secured,O
debt,O
to,O
the,O
extent,O
of,O
the,O
value,O
of,O
the,O
assets,O
securing,O
such,O
debt,O
",",O
(,O
iii,O
),O
are,O
structurally,O
subordinated,O
to,O
all,O
obligations,O
of,O
each,O
subsidiary,O
that,O
is,O
not,O
a,O
guarantor,O
of,O
the,O
senior,O
subordinated,O
notes,O
",",O
and,O
(,O
iv,O
),O
rank,O
senior,O
in,O
right,O
of,O
payment,O
to,O
all,O
future,O
debt,O
and,O
other,O
obligations,O
that,O
are,O
",",O
by,O
their,O
terms,O
",",O
expressly,O
subordinated,O
in,O
right,O
of,O
payment,O
to,O
the,O
senior,O
subordinated,O
notes,O
.,O
,O
The,O
senior,O
notes,O
due,O
2015,O
",",O
2018,O
and,O
2020,O
and,O
senior,O
subordinated,O
notes,O
due,O
2015,O
are,O
redeemable,O
in,O
whole,O
or,O
in,O
part,O
",",O
at,O
SunGard,I-BUSINESS
s,O
option,O
",",O
at,O
any,O
time,O
at,O
varying,O
redemption,O
prices,O
that,O
generally,O
include,O
premiums,O
",",O
which,O
are,O
defined,O
in,O
the,O
applicable,O
indentures,O
.,O
,O
In,O
addition,O
",",O
upon,O
a,O
change,O
of,O
control,O
",",O
SunGard,I-BUSINESS
is,O
required,O
to,O
make,O
an,O
offer,O
to,O
redeem,O
all,O
of,O
the,O
senior,O
notes,O
and,O
senior,O
subordinated,O
notes,O
at,O
a,O
redemption,O
price,O
equal,O
to,O
101,O
%,O
of,O
the,O
aggregate,O
principal,O
amount,O
thereof,O
plus,O
accrued,O
and,O
unpaid,O
interest,O
.,O
,O
The,O
indentures,O
governing,O
the,O
senior,O
notes,O
due,O
2015,O
",",O
2018,O
and,O
2020,O
and,O
senior,O
subordinated,O
notes,O
due,O
2015,O
contain,O
a,O
number,O
of,O
covenants,O
that,O
restrict,O
",",O
subject,O
to,O
certain,O
exceptions,O
",",O
SunGard,I-BUSINESS
s,O
ability,O
and,O
the,O
ability,O
of,O
its,O
restricted,O
subsidiaries,O
to,O
incur,O
additional,O
debt,O
or,O
issue,O
certain,O
preferred,O
shares,O
",",O
pay,O
dividends,O
on,O
or,O
make,O
other,O
distributions,O
in,O
respect,O
of,O
its,O
capital,O
stock,O
or,O
make,O
other,O
restricted,O
payments,O
",",O
make,O
certain,O
investments,O
",",O
enter,O
into,O
certain,O
types,O
of,O
transactions,O
with,O
affiliates,O
",",O
create,O
liens,O
securing,O
certain,O
debt,O
without,O
securing,O
the,O
senior,O
notes,O
due,O
2015,O
",",O
2018,O
and,O
2020,O
or,O
senior,O
subordinated,O
notes,O
due,O
2015,O
",",O
as,O
applicable,O
",",O
sell,O
certain,O
assets,O
",",O
consolidate,O
",",O
merge,O
",",O
sell,O
or,O
otherwise,O
dispose,O
of,O
all,O
or,O
substantially,O
all,O
of,O
its,O
assets,O
and,O
designate,O
its,O
subsidiaries,O
as,O
unrestricted,O
subsidiaries,O
.,O
,O
The,O
senior,O
notes,O
due,O
2018,O
and,O
2020,O
contain,O
registration,O
rights,O
by,O
which,O
the,O
Company,O
has,O
agreed,O
to,O
use,O
its,O
reasonable,O
best,O
efforts,O
to,O
register,O
with,O
the,O
U.S.,I-GOVERNMENT
Securities,I-GOVERNMENT
&,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
notes,O
having,O
substantially,O
identical,O
terms,O
.,O
,O
The,O
Company,O
will,O
use,O
its,O
reasonable,O
best,O
efforts,O
to,O
cause,O
the,O
exchange,O
offer,O
to,O
be,O
completed,O
or,O
",",O
if,O
required,O
",",O
to,O
have,O
one,O
or,O
more,O
shelf,O
registration,O
statements,O
declared,O
effective,O
",",O
within,O
360,O
days,O
after,O
the,O
issue,O
date,O
of,O
the,O
senior,O
notes,O
due,O
2018,O
and,O
2020,O
.,O
,O
If,O
the,O
Company,O
fails,O
to,O
meet,O
this,O
target,O
(,O
a,O
registration,O
default,O
),O
with,O
respect,O
to,O
the,O
senior,O
notes,O
due,O
2018,O
and,O
2020,O
",",O
the,O
annual,O
interest,O
rate,O
on,O
the,O
senior,O
notes,O
due,O
2018,O
and,O
2020,O
will,O
increase,O
by,O
0.25,O
%,O
for,O
each,O
subsequent,O
90-day,O
period,O
during,O
which,O
the,O
registration,O
default,O
continues,O
",",O
up,O
to,O
a,O
maximum,O
additional,O
interest,O
rate,O
of,O
1.0,O
%,O
per,O
year,O
over,O
the,O
applicable,O
interest,O
rate,O
.,O
,O
If,O
the,O
registration,O
default,O
is,O
corrected,O
or,O
",",O
if,O
it,O
is,O
not,O
corrected,O
",",O
upon,O
the,O
two,O
year,O
anniversary,O
of,O
the,O
issue,O
date,O
of,O
the,O
senior,O
notes,O
due,O
2018,O
and,O
2020,O
",",O
the,O
applicable,O
interest,O
rate,O
on,O
such,O
senior,O
notes,O
due,O
2018,O
and,O
2020,O
will,O
revert,O
to,O
the,O
original,O
level,O
.,O
,O
(,O
D,O
),O
Accounts,O
Receivable,O
Securitization,O
Program,O
In,O
December,O
2008,O
",",O
SunGard,O
terminated,O
its,O
off-balance,O
sheet,O
accounts,O
receivable,O
securitization,O
program,O
.,O
,O
Under,O
this,O
accounts,O
receivable,O
facility,O
",",O
eligible,O
receivables,O
were,O
sold,O
to,O
third-party,O
conduits,O
through,O
a,O
wholly,O
owned,O
",",O
bankruptcy,O
remote,O
",",O
special,O
purpose,O
entity,O
that,O
was,O
not,O
consolidated,O
for,O
financial,O
reporting,O
purposes,O
.,O
,O
SunGard,O
serviced,O
the,O
receivables,O
and,O
charged,O
a,O
monthly,O
servicing,O
fee,O
at,O
market,O
rates,O
.,O
,O
The,O
third-party,O
conduits,O
were,O
sponsored,O
by,O
certain,O
lenders,O
under,O
SunGard,I-BUSINESS
s,O
senior,O
secured,O
credit,O
facilities,O
.,O
,O
Sales,O
of,O
receivables,O
under,O
the,O
facility,O
qualified,O
as,O
sales,O
under,O
applicable,O
accounting,O
rules,O
.,O
,O
Accordingly,O
",",O
at,O
December,O
31,O
",",O
2008,O
",",O
these,O
receivables,O
",",O
totaling,O
$,O
363,O
million,O
",",O
net,O
of,O
applicable,O
allowances,O
",",O
and,O
the,O
corresponding,O
borrowings,O
totaling,O
$,O
77,O
million,O
were,O
excluded,O
from,O
SunGard,I-BUSINESS
s,O
consolidated,O
balance,O
sheet,O
.,O
,O
SunGard,I-BUSINESS
s,O
retained,O
interest,O
in,O
receivables,O
sold,O
as,O
of,O
December,O
31,O
",",O
2008,O
was,O
$,O
285,O
million,O
.,O
,O
The,O
loss,O
on,O
sale,O
of,O
receivables,O
and,O
discount,O
on,O
retained,O
interests,O
were,O
included,O
in,O
other,O
expense,O
and,O
totaled,O
$,O
25,O
million,O
for,O
2008,O
.,O
,O
The,O
gain,O
or,O
loss,O
on,O
sale,O
of,O
receivables,O
was,O
determined,O
at,O
the,O
date,O
of,O
transfer,O
based,O
upon,O
the,O
fair,O
value,O
of,O
the,O
assets,O
sold,O
and,O
the,O
interests,O
retained,O
.,O
,O
SunGard,O
estimated,O
fair,O
value,O
based,O
on,O
the,O
present,O
value,O
of,O
expected,O
cash,O
flows,O
.,O
,O
In,O
March,O
2009,O
",",O
SunGard,O
entered,O
into,O
a,O
syndicated,O
three-year,O
receivables,O
facility,O
.,O
,O
The,O
facility,O
limit,O
was,O
$,O
317,O
million,O
",",O
which,O
consisted,O
of,O
a,O
term,O
loan,O
commitment,O
of,O
$,O
181,O
million,O
and,O
a,O
revolving,O
commitment,O
of,O
$,O
136,O
million,O
.,O
,O
Advances,O
may,O
be,O
borrowed,O
and,O
repaid,O
under,O
the,O
revolving,O
commitment,O
with,O
no,O
impact,O
on,O
the,O
facility,O
limit,O
.,O
,O
The,O
term,O
loan,O
commitment,O
may,O
be,O
repaid,O
at,O
any,O
time,O
at,O
SunGard,O
s,O
option,O
",",O
but,O
will,O
result,O
in,O
a,O
permanent,O
reduction,O
in,O
the,O
facility,O
limit,O
.,O
,O
On,O
September,O
30,O
",",O
2010,O
",",O
SunGard,I-BUSINESS
entered,O
into,O
an,O
Amended,O
and,O
Restated,O
Credit,O
and,O
Security,O
Agreement,O
(,O
Agreement,O
),O
related,O
to,O
its,O
receivables,O
facility,O
.,O
,O
Among,O
other,O
things,O
",",O
the,O
amendment,O
(,O
a,O
),O
increased,O
the,O
borrowing,O
capacity,O
under,O
the,O
facility,O
from,O
$,O
317,O
million,O
to,O
$,O
350,O
million,O
",",O
(,O
b,O
),O
increased,O
the,O
term,O
loan,O
component,O
to,O
$,O
200,O
million,O
from,O
$,O
181,O
million,O
",",O
(,O
c,O
),O
extended,O
the,O
maturity,O
date,O
to,O
September,O
30,O
",",O
2014,O
",",O
(,O
d,O
),O
removed,O
the,O
3,O
%,O
LIBOR,O
floor,O
and,O
set,O
the,O
interest,O
rate,O
to,O
one-month,O
LIBOR,O
plus,O
3.5,O
%,O
",",O
which,O
at,O
December,O
31,O
",",O
2010,O
was,O
3.76,O
%,O
",",O
and,O
(,O
e,O
),O
amended,O
certain,O
terms,O
.,O
,O
At,O
December,O
31,O
",",O
2010,O
",",O
$,O
200,O
million,O
was,O
drawn,O
against,O
the,O
term,O
loan,O
commitment,O
and,O
$,O
113,O
million,O
was,O
drawn,O
against,O
the,O
revolving,O
commitment,O
",",O
which,O
represented,O
the,O
full,O
amount,O
available,O
for,O
borrowing,O
based,O
on,O
the,O
terms,O
and,O
conditions,O
of,O
the,O
facility,O
.,O
,O
At,O
December,O
31,O
",",O
2010,O
",",O
$,O
680,O
million,O
of,O
accounts,O
receivable,O
secure,O
the,O
borrowings,O
under,O
the,O
receivables,O
facility,O
.,O
,O
The,O
facility,O
is,O
subject,O
to,O
a,O
fee,O
on,O
the,O
unused,O
portion,O
of,O
1.00,O
%,O
per,O
annum,O
.,O
,O
The,O
receivables,O
facility,O
contains,O
certain,O
covenants,O
and,O
SunGard,O
is,O
required,O
to,O
satisfy,O
and,O
maintain,O
specified,O
facility,O
performance,O
ratios,O
",",O
financial,O
ratios,O
and,O
other,O
financial,O
condition,O
tests,O
.,O
,O
Future,O
Maturities,O
At,O
December,O
31,O
",",O
2010,O
",",O
annual,O
maturities,O
of,O
long-term,O
debt,O
during,O
the,O
next,O
five,O
years,O
and,O
thereafter,O
are,O
as,O
follows,O
(,O
in,O
millions,O
),O
:,O
,O
Fair,O
Value,O
Measurements,O
:,O
The,O
following,O
table,O
summarizes,O
assets,O
and,O
liabilities,O
measured,O
at,O
fair,O
value,O
on,O
a,O
recurring,O
basis,O
at,O
December,O
31,O
",",O
2010,O
(,O
in,O
millions,O
),O
:,O
,O
The,O
following,O
table,O
summarizes,O
assets,O
and,O
liabilities,O
measured,O
at,O
fair,O
value,O
on,O
a,O
recurring,O
basis,O
at,O
December,O
31,O
",",O
2009,O
(,O
in,O
millions,O
),O
:,O
,O
A,O
Level,O
1,O
fair,O
value,O
measure,O
is,O
based,O
upon,O
quoted,O
prices,O
in,O
active,O
markets,O
for,O
identical,O
assets,O
or,O
liabilities,O
.,O
,O
A,O
Level,O
2,O
fair,O
value,O
measure,O
is,O
based,O
upon,O
quoted,O
prices,O
for,O
similar,O
assets,O
and,O
liabilities,O
in,O
active,O
markets,O
or,O
inputs,O
that,O
are,O
observable,O
.,O
,O
A,O
Level,O
3,O
fair,O
value,O
measure,O
is,O
based,O
upon,O
inputs,O
that,O
are,O
unobservable,O
(,O
for,O
example,O
",",O
cash,O
flow,O
modeling,O
inputs,O
based,O
on,O
assumptions,O
),O
.,O
,O
Cash,O
and,O
cash,O
equivalents,O
,O
Money,O
market,O
funds,O
and,O
Clearing,O
broker,O
assets,O
U.S.,I-LOCATION
treasury,O
bills,O
are,O
recognized,O
and,O
measured,O
at,O
fair,O
value,O
in,O
the,O
Company,O
s,O
financial,O
statements,O
.,O
,O
Clearing,O
broker,O
assets,O
and,O
liabilities—securities,O
owned,O
and,O
customer,O
securities,O
sold,O
short,O
",",O
not,O
yet,O
purchased,O
are,O
recorded,O
at,O
closing,O
exchange-quoted,O
prices,O
.,O
,O
Fair,O
values,O
of,O
the,O
interest,O
rate,O
swap,O
agreements,O
are,O
calculated,O
using,O
a,O
discounted,O
cash,O
flow,O
model,O
using,O
observable,O
applicable,O
market,O
swap,O
rates,O
and,O
assumptions,O
and,O
are,O
compared,O
to,O
market,O
valuations,O
obtained,O
from,O
brokers,O
.,O
,O
During,O
2009,O
",",O
the,O
Company,O
recorded,O
impairment,O
charges,O
on,O
certain,O
of,O
its,O
FS,O
customer,O
base,O
and,O
software,O
assets,O
of,O
$,O
18,O
million,O
and,O
$,O
17,O
million,O
",",O
respectively,O
",",O
as,O
a,O
result,O
of,O
changes,O
to,O
the,O
cash,O
flow,O
projections,O
of,O
the,O
applicable,O
businesses,O
.,O
,O
These,O
non-recurring,O
fair,O
value,O
measures,O
are,O
classified,O
as,O
Level,O
3,O
in,O
the,O
fair,O
value,O
hierarchy,O
and,O
were,O
valued,O
using,O
discounted,O
cash,O
flow,O
models,O
.,O
,O
The,O
valuation,O
inputs,O
included,O
estimates,O
of,O
future,O
cash,O
flows,O
",",O
expectations,O
about,O
possible,O
variations,O
in,O
the,O
amount,O
and,O
timing,O
of,O
cash,O
flows,O
and,O
discount,O
rates,O
based,O
on,O
the,O
risk-adjusted,O
cost,O
of,O
capital,O
.,O
,O
The,O
following,O
table,O
summarizes,O
assets,O
and,O
liabilities,O
measured,O
at,O
fair,O
value,O
on,O
a,O
non-recurring,O
basis,O
at,O
December,O
31,O
",",O
2010,O
(,O
in,O
millions,O
),O
:,O
,O
The,O
following,O
table,O
summarizes,O
assets,O
and,O
liabilities,O
measured,O
at,O
fair,O
value,O
on,O
a,O
non-recurring,O
basis,O
at,O
December,O
31,O
",",O
2009,O
(,O
in,O
millions,O
),O
:,O
,O
The,O
fair,O
value,O
of,O
goodwill,O
is,O
categorized,O
in,O
Level,O
3,O
",",O
fair,O
value,O
measurement,O
using,O
significant,O
unobservable,O
inputs,O
",",O
and,O
is,O
estimated,O
by,O
a,O
combination,O
of,O
discounted,O
cash,O
flows,O
based,O
on,O
(,O
i,O
),O
projected,O
earnings,O
in,O
the,O
future,O
(,O
the,O
income,O
approach,O
),O
and,O
(,O
ii,O
),O
a,O
comparative,O
analysis,O
of,O
revenue,O
and,O
EBITDA,O
multiples,O
of,O
public,O
companies,O
in,O
similar,O
markets,O
(,O
the,O
market,O
approach,O
),O
.,O
,O
This,O
requires,O
the,O
use,O
of,O
various,O
assumptions,O
including,O
projections,O
of,O
future,O
cash,O
flows,O
",",O
perpetual,O
growth,O
rates,O
and,O
discount,O
rates,O
.,O
,O
Goodwill,O
with,O
a,O
carrying,O
value,O
of,O
$,O
888,O
million,O
was,O
written,O
down,O
to,O
fair,O
value,O
of,O
$,O
560,O
million,O
and,O
a,O
$,O
328,O
million,O
impairment,O
loss,O
was,O
recognized,O
",",O
of,O
which,O
$,O
237,O
million,O
is,O
reflected,O
in,O
continuing,O
operations,O
and,O
$,O
91,O
million,O
is,O
reflected,O
in,O
discontinued,O
operations,O
as,O
discussed,O
further,O
in,O
Notes,O
1,O
and,O
2,O
.,O
,O
Goodwill,O
with,O
a,O
carrying,O
value,O
of,O
$,O
"2,054",O
million,O
was,O
written,O
down,O
to,O
fair,O
value,O
of,O
$,O
928,O
million,O
and,O
a,O
$,O
"1,126",O
million,O
impairment,O
loss,O
was,O
recognized,O
",",O
which,O
is,O
reflected,O
in,O
continuing,O
operations,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
as,O
discussed,O
further,O
in,O
Note,O
1,O
.,O
,O
Fair,O
Value,O
of,O
Financial,O
Instruments,O
The,O
following,O
table,O
presents,O
the,O
carrying,O
amounts,O
and,O
fair,O
values,O
of,O
financial,O
instruments,O
(,O
in,O
millions,O
),O
:,O
,O
The,O
fair,O
values,O
of,O
cash,O
and,O
cash,O
equivalents,O
",",O
accounts,O
receivable,O
",",O
accounts,O
payable,O
and,O
accrued,O
expenses,O
",",O
to,O
the,O
extent,O
the,O
underlying,O
liability,O
will,O
be,O
settled,O
in,O
cash,O
",",O
approximate,O
carrying,O
values,O
because,O
of,O
the,O
short-term,O
nature,O
of,O
these,O
instruments,O
.,O
,O
The,O
derivative,O
financial,O
instruments,O
are,O
carried,O
at,O
fair,O
value,O
.,O
,O
The,O
fair,O
value,O
of,O
SunGard,I-BUSINESS
s,O
floating,O
rate,O
and,O
fixed,O
rate,O
long-term,O
debt,O
is,O
primarily,O
based,O
on,O
market,O
rates,O
.,O
,O
Preferred,O
Stock,O
SCCII,O
SCCII,O
has,O
preferred,O
and,O
common,O
stock,O
outstanding,O
at,O
December,O
31,O
",",O
2009,O
and,O
2010,O
.,O
,O
The,O
preferred,O
stock,O
is,O
non-voting,O
and,O
ranks,O
senior,O
in,O
right,O
of,O
payment,O
to,O
the,O
common,O
stock,O
.,O
,O
Each,O
share,O
of,O
preferred,O
stock,O
has,O
a,O
liquidation,O
preference,O
of,O
$,O
100,O
(,O
the,O
initial,O
class,O
P,O
liquidation,O
preference,O
),O
plus,O
an,O
amount,O
equal,O
to,O
the,O
accrued,O
and,O
unpaid,O
dividends,O
accruing,O
at,O
a,O
rate,O
of,O
11.5,O
%,O
per,O
year,O
of,O
the,O
initial,O
Class,O
P,O
liquidation,O
preference,O
(,O
$,O
100,O
per,O
share,O
),O
",",O
compounded,O
quarterly,O
.,O
,O
Holders,O
of,O
preferred,O
stock,O
are,O
entitled,O
to,O
receive,O
cumulative,O
preferential,O
dividends,O
to,O
the,O
extent,O
a,O
dividend,O
is,O
declared,O
by,O
the,O
Board,O
of,O
Directors,O
of,O
SCCII,I-BUSINESS
at,O
a,O
rate,O
of,O
11.5,O
%,O
per,O
year,O
of,O
the,O
initial,O
Class,O
P,O
liquidation,O
preference,O
(,O
$,O
100,O
per,O
share,O
),O
payable,O
quarterly,O
in,O
arrears,O
.,O
,O
The,O
aggregate,O
amount,O
of,O
cumulative,O
but,O
undeclared,O
preferred,O
stock,O
dividends,O
at,O
December,O
31,O
",",O
2009,O
and,O
2010,O
was,O
$,O
641,O
million,O
and,O
$,O
837,O
million,O
",",O
respectively,O
(,O
$,O
65.25,O
and,O
$,O
85.29,O
per,O
share,O
",",O
respectively,O
),O
.,O
,O
No,O
dividends,O
have,O
been,O
declared,O
since,O
inception,O
.,O
,O
Preferred,O
shares,O
and,O
stock,O
awards,O
based,O
in,O
preferred,O
shares,O
are,O
held,O
by,O
certain,O
members,O
of,O
management,O
.,O
,O
In,O
the,O
case,O
of,O
termination,O
resulting,O
from,O
disability,O
or,O
death,O
",",O
an,O
employee,O
or,O
his/her,O
estate,O
may,O
exercise,O
a,O
put,O
option,O
which,O
would,O
require,O
the,O
Company,O
to,O
repurchase,O
vested,O
shares,O
at,O
the,O
current,O
fair,O
market,O
value,O
.,O
,O
These,O
shares,O
of,O
preferred,O
stock,O
must,O
be,O
classified,O
as,O
temporary,O
equity,O
(,O
between,O
liabilities,O
and,O
stockholder,O
s,O
equity,O
),O
on,O
the,O
balance,O
sheet,O
of,O
SCCII,I-BUSINESS
.,O
,O
SCC,I-BUSINESS
Preferred,O
stock,O
of,O
SCCII,I-BUSINESS
is,O
classified,O
as,O
Noncontrolling,O
interest,O
in,O
the,O
equity,O
section,O
or,O
temporary,O
equity,O
on,O
the,O
balance,O
sheet,O
of,O
SCC,I-BUSINESS
.,O
,O
Common,O
Stock,O
SCC,I-BUSINESS
has,O
nine,O
classes,O
of,O
common,O
stock,O
",",O
Class,O
L,O
and,O
Class,O
A-1,O
through,O
A-8,O
.,O
,O
Class,O
L,O
common,O
stock,O
has,O
identical,O
terms,O
as,O
Class,O
A,O
common,O
stock,O
except,O
as,O
follows,O
:,O
,O
In,O
the,O
case,O
of,O
termination,O
resulting,O
from,O
disability,O
or,O
death,O
",",O
an,O
employee,O
or,O
his/her,O
estate,O
may,O
exercise,O
a,O
put,O
option,O
which,O
would,O
require,O
the,O
Company,O
to,O
repurchase,O
vested,O
shares,O
at,O
the,O
current,O
fair,O
market,O
value,O
.,O
,O
These,O
common,O
shares,O
must,O
be,O
classified,O
as,O
temporary,O
equity,O
(,O
between,O
liabilities,O
and,O
equity,O
),O
on,O
the,O
balance,O
sheet,O
of,O
SCC,I-BUSINESS
.,O
,O
Stock,O
Option,O
and,O
Award,O
Plans,O
and,O
Stock-Based,O
Compensation,O
:,O
The,O
SunGard,I-MISCELLANEOUS
2005,I-MISCELLANEOUS
Management,I-MISCELLANEOUS
Incentive,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
as,O
amended,O
from,O
time,O
to,O
time,O
(,O
Plan,O
),O
was,O
established,O
to,O
provide,O
long-term,O
equity,O
incentives,O
.,O
,O
The,O
Plan,O
authorizes,O
the,O
issuance,O
of,O
equity,O
subject,O
to,O
awards,O
made,O
under,O
the,O
Plan,O
for,O
up,O
to,O
70,O
million,O
shares,O
of,O
Class,O
A,O
common,O
stock,O
and,O
7,O
million,O
shares,O
of,O
Class,O
L,O
common,O
stock,O
of,O
SCC,O
and,O
2.5,O
million,O
shares,O
of,O
preferred,O
stock,O
of,O
SCCII,I-BUSINESS
.,O
,O
Under,O
the,O
Plan,O
",",O
awards,O
of,O
time-based,O
and,O
performance-based,O
options,O
have,O
been,O
granted,O
to,O
purchase,O
Units,O
in,O
the,O
Parent,O
Companies,O
.,O
,O
Each,O
Unit,O
consists,O
of,O
1.3,O
shares,O
of,O
Class,O
A,O
common,O
stock,O
and,O
0.1444,O
shares,O
of,O
Class,O
L,O
common,O
stock,O
of,O
SCC,I-BUSINESS
and,O
0.05,O
shares,O
of,O
preferred,O
stock,O
of,O
SCCII,I-BUSINESS
.,O
,O
The,O
shares,O
comprising,O
a,O
Unit,O
are,O
in,O
the,O
same,O
proportion,O
as,O
the,O
shares,O
issued,O
to,O
all,O
stockholders,O
of,O
the,O
Parent,O
Companies,O
.,O
,O
Options,O
on,O
Units,O
are,O
exercisable,O
only,O
for,O
whole,O
Units,O
and,O
can,O
not,O
be,O
separately,O
exercised,O
for,O
the,O
individual,O
classes,O
of,O
stock,O
.,O
,O
Beginning,O
in,O
2007,O
",",O
hybrid,O
equity,O
awards,O
generally,O
were,O
granted,O
under,O
the,O
Plan,O
",",O
which,O
awards,O
are,O
composed,O
of,O
restricted,O
stock,O
units,O
(,O
RSUs,O
),O
for,O
Units,O
and,O
options,O
to,O
purchase,O
Class,O
A,O
common,O
stock,O
in,O
SCC,I-BUSINESS
.,O
,O
Currently,O
",",O
equity,O
awards,O
are,O
being,O
granted,O
for,O
RSUs,O
.,O
,O
All,O
awards,O
under,O
the,O
Plan,O
are,O
granted,O
at,O
fair,O
market,O
value,O
on,O
the,O
date,O
of,O
grant,O
.,O
,O
Time-based,O
options,O
vest,O
over,O
five,O
years,O
as,O
follows,O
:,O
25,O
%,O
one,O
year,O
after,O
date,O
of,O
grant,O
",",O
and,O
1/48th,O
of,O
the,O
remaining,O
balance,O
each,O
month,O
thereafter,O
for,O
48,O
months,O
.,O
,O
Time-based,O
RSUs,O
vest,O
over,O
five,O
years,O
as,O
follows,O
:,O
10,O
%,O
one,O
year,O
after,O
date,O
of,O
grant,O
",",O
and,O
1/48th,O
of,O
the,O
remaining,O
balance,O
each,O
month,O
thereafter,O
for,O
48,O
months,O
.,O
,O
the,O
Company,O
during,O
a,O
specified,O
performance,O
period,O
",",O
generally,O
five,O
years,O
.,O
,O
Time-based,O
and,O
performance-based,O
options,O
can,O
partially,O
or,O
fully,O
vest,O
upon,O
a,O
change,O
of,O
control,O
and,O
certain,O
other,O
termination,O
events,O
",",O
subject,O
to,O
certain,O
conditions,O
",",O
and,O
expire,O
ten,O
years,O
from,O
the,O
date,O
of,O
grant,O
.,O
,O
Once,O
vested,O
",",O
time-based,O
and,O
performance-based,O
RSUs,O
become,O
payable,O
in,O
shares,O
upon,O
the,O
first,O
to,O
occur,O
of,O
a,O
change,O
of,O
control,O
",",O
separation,O
from,O
service,O
without,O
cause,O
",",O
or,O
the,O
date,O
that,O
is,O
five,O
years,O
(,O
ten,O
years,O
for,O
modified,O
performance-based,O
RSUs,O
),O
after,O
the,O
date,O
of,O
grant,O
.,O
,O
During,O
the,O
third,O
quarter,O
of,O
2009,O
",",O
the,O
Company,O
amended,O
the,O
terms,O
of,O
unvested,O
performance,O
awards,O
granted,O
prior,O
to,O
2009,O
by,O
(,O
i,O
),O
reducing,O
performance,O
targets,O
for,O
2009,O
and,O
2010,O
to,O
budgeted,O
Internal,O
EBITA,O
",",O
(,O
ii,O
),O
reducing,O
the,O
number,O
of,O
shares,O
that,O
are,O
earned,O
at,O
the,O
reduced,O
targets,O
",",O
(,O
iii,O
),O
delaying,O
vesting,O
of,O
earned,O
shares,O
",",O
and,O
",",O
(,O
iv,O
),O
in,O
the,O
case,O
of,O
certain,O
RSUs,O
",",O
increasing,O
the,O
length,O
of,O
time,O
for,O
distribution,O
",",O
or,O
release,O
",",O
of,O
vested,O
awards,O
.,O
,O
Excluding,O
the,O
15,O
senior,O
executive,O
management,O
award,O
holders,O
at,O
that,O
time,O
",",O
all,O
290,O
award,O
holders,O
participated,O
in,O
the,O
amendments,O
.,O
,O
During,O
the,O
fourth,O
quarter,O
of,O
2009,O
",",O
senior,O
executive,O
management,O
s,O
performance,O
awards,O
were,O
amended,O
consistent,O
with,O
non-senior,O
executive,O
awards,O
and,O
in,O
addition,O
were,O
amended,O
to,O
modify,O
or,O
add,O
",",O
as,O
applicable,O
",",O
vesting,O
on,O
a,O
return-on-equity,O
basis,O
terms,O
.,O
,O
All,O
amended,O
equity,O
awards,O
were,O
revalued,O
at,O
the,O
modification,O
dates,O
at,O
the,O
respective,O
fair,O
market,O
value,O
.,O
,O
There,O
was,O
no,O
expense,O
recognized,O
as,O
a,O
result,O
of,O
the,O
modifications,O
.,O
,O
During,O
the,O
second,O
quarter,O
of,O
2010,O
",",O
the,O
Company,O
amended,O
the,O
terms,O
of,O
all,O
unvested,O
performance,O
awards,O
outstanding,O
with,O
performance,O
periods,O
after,O
2010,O
by,O
reducing,O
the,O
performance,O
targets,O
for,O
those,O
periods,O
to,O
the,O
budgeted,O
Internal,O
EBITA,O
for,O
the,O
applicable,O
year,O
.,O
,O
All,O
280,O
award,O
holders,O
participated,O
in,O
the,O
amendments,O
",",O
and,O
there,O
was,O
no,O
expense,O
recognized,O
as,O
a,O
result,O
of,O
the,O
modification,O
.,O
,O
The,O
total,O
fair,O
value,O
of,O
options,O
that,O
vested,O
for,O
2008,O
",",O
2009,O
and,O
2010,O
was,O
$,O
32,O
million,O
",",O
$,O
24,O
million,O
and,O
$,O
18,O
million,O
",",O
respectively,O
.,O
,O
The,O
total,O
fair,O
value,O
of,O
RSUs,O
that,O
vested,O
for,O
the,O
years,O
2008,O
",",O
2009,O
and,O
2010,O
was,O
$,O
3,O
million,O
",",O
$,O
10,O
million,O
and,O
$,O
13,O
million,O
",",O
respectively,O
.,O
,O
At,O
December,O
31,O
",",O
2009,O
and,O
2010,O
",",O
approximately,O
"592,000",O
and,O
"804,000",O
RSU,O
Units,O
",",O
respectively,O
",",O
were,O
vested,O
.,O
,O
The,O
fair,O
value,O
of,O
option,O
Units,O
granted,O
in,O
each,O
year,O
using,O
the,O
Black-Scholes,I-MISCELLANEOUS
pricing,I-MISCELLANEOUS
model,I-MISCELLANEOUS
and,O
related,O
assumptions,O
follow,O
:,O
,O
The,O
fair,O
value,O
of,O
Class,O
A,O
options,O
granted,O
in,O
each,O
year,O
using,O
the,O
Black-Scholes,I-MISCELLANEOUS
pricing,I-MISCELLANEOUS
model,I-MISCELLANEOUS
and,O
related,O
assumptions,O
follow,O
:,O
,O
The,O
fair,O
value,O
of,O
each,O
option,O
award,O
is,O
estimated,O
on,O
the,O
date,O
of,O
grant,O
using,O
the,O
Black-Scholes,I-MISCELLANEOUS
option-pricing,I-MISCELLANEOUS
model,I-MISCELLANEOUS
.,O
,O
Since,O
the,O
Company,O
is,O
not,O
publicly,O
traded,O
",",O
the,O
Company,O
utilizes,O
equity,O
valuations,O
based,O
on,O
(,O
a,O
),O
stock,O
market,O
valuations,O
of,O
public,O
companies,O
in,O
comparable,O
businesses,O
",",O
(,O
b,O
),O
recent,O
transactions,O
involving,O
comparable,O
companies,O
and,O
(,O
c,O
),O
any,O
other,O
factors,O
deemed,O
relevant,O
.,O
,O
The,O
risk-free,O
rate,O
for,O
periods,O
within,O
the,O
contractual,O
life,O
of,O
the,O
option,O
is,O
based,O
on,O
the,O
U.S.,I-GOVERNMENT
Treasury,I-GOVERNMENT
yield,O
curve,O
in,O
effect,O
at,O
the,O
time,O
of,O
grant,O
.,O
,O
Expected,O
volatilities,O
are,O
based,O
on,O
implied,O
volatilities,O
from,O
market,O
comparisons,O
of,O
certain,O
publicly,O
traded,O
companies,O
and,O
other,O
factors,O
.,O
,O
The,O
expected,O
term,O
of,O
stock,O
options,O
granted,O
is,O
derived,O
from,O
historical,O
experience,O
and,O
expectations,O
and,O
represents,O
the,O
period,O
of,O
time,O
that,O
stock,O
options,O
granted,O
are,O
expected,O
to,O
be,O
outstanding,O
.,O
,O
The,O
requisite,O
service,O
period,O
is,O
generally,O
five,O
years,O
from,O
the,O
date,O
of,O
grant,O
.,O
,O
For,O
2008,O
",",O
2009,O
and,O
2010,O
",",O
the,O
Company,O
included,O
non-cash,O
stock,O
compensation,O
expense,O
of,O
$,O
35,O
million,O
",",O
$,O
33,O
million,O
and,O
$,O
31,O
million,O
",",O
respectively,O
",",O
in,O
sales,O
",",O
marketing,O
and,O
administration,O
expenses,O
.,O
,O
At,O
December,O
31,O
",",O
2010,O
",",O
there,O
is,O
approximately,O
$,O
7,O
million,O
and,O
$,O
46,O
million,O
",",O
respectively,O
",",O
of,O
unearned,O
non-cash,O
stock-based,O
compensation,O
related,O
to,O
time-based,O
options,O
and,O
RSUs,O
that,O
the,O
Company,O
expects,O
to,O
record,O
as,O
expense,O
over,O
a,O
weighted,O
average,O
of,O
2.5,O
and,O
3.7,O
years,O
",",O
respectively,O
.,O
,O
In,O
addition,O
",",O
at,O
December,O
31,O
",",O
2010,O
",",O
there,O
is,O
approximately,O
$,O
36,O
million,O
and,O
$,O
44,O
million,O
",",O
respectively,O
",",O
of,O
unearned,O
non-cash,O
stock-based,O
compensation,O
related,O
to,O
performance-based,O
options,O
and,O
RSUs,O
that,O
the,O
Company,O
could,O
record,O
as,O
expense,O
over,O
a,O
weighted,O
average,O
of,O
3.1,O
and,O
4.0,O
years,O
",",O
respectively,O
",",O
depending,O
on,O
the,O
level,O
of,O
achievement,O
of,O
financial,O
performance,O
goals,O
.,O
,O
Included,O
in,O
the,O
performance,O
award,O
amounts,O
above,O
are,O
approximately,O
"892,000",O
option,O
Units,O
(,O
$,O
5.0,O
million,O
),O
",",O
"483,000",O
class,O
A,O
options,O
(,O
$,O
0.5,O
million,O
),O
and,O
"226,000",O
RSUs,O
(,O
$,O
4.5,O
million,O
),O
that,O
were,O
earned,O
during,O
2009,O
and,O
2010,O
",",O
but,O
that,O
will,O
vest,O
monthly,O
during,O
2011,O
through,O
2013,O
.,O
,O
For,O
time-based,O
options,O
and,O
RSUs,O
",",O
compensation,O
expense,O
is,O
recorded,O
on,O
a,O
straight-line,O
basis,O
over,O
the,O
requisite,O
service,O
period,O
of,O
five,O
years,O
.,O
,O
For,O
performance-based,O
options,O
and,O
RSUs,O
",",O
recognition,O
of,O
compensation,O
expense,O
starts,O
when,O
the,O
achievement,O
of,O
financial,O
performance,O
goals,O
becomes,O
probable,O
and,O
is,O
recorded,O
over,O
the,O
remaining,O
service,O
period,O
.,O
,O
The,O
following,O
table,O
summarizes,O
option/RSU,O
activity,O
:,O
,O
Included,O
in,O
the,O
table,O
above,O
are,O
3.1,O
million,O
option,O
Units,O
(,O
weighted-average,O
exercise,O
price,O
of,O
$,O
18.38,O
),O
",",O
0.8,O
million,O
RSUs,O
(,O
weighted-average,O
price,O
of,O
$,O
21.90,O
),O
and,O
1.9,O
million,O
Class,O
A,O
options,O
(,O
weighted-average,O
exercise,O
price,O
of,O
$,O
1.87,O
),O
that,O
have,O
not,O
vested,O
and,O
for,O
which,O
the,O
performance,O
period,O
has,O
ended,O
.,O
,O
These,O
options,O
and,O
RSUs,O
may,O
be,O
canceled,O
in,O
the,O
future,O
.,O
,O
Shares,O
available,O
for,O
grant,O
under,O
the,O
2005,O
plan,O
at,O
December,O
31,O
",",O
2010,O
were,O
approximately,O
11.3,O
million,O
shares,O
of,O
Class,O
A,O
common,O
stock,O
and,O
1.9,O
million,O
shares,O
of,O
Class,O
L,O
common,O
stock,O
of,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
and,O
0.7,O
million,O
shares,O
of,O
preferred,O
stock,O
of,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
.,O
,O
The,O
total,O
intrinsic,O
value,O
of,O
options,O
exercised,O
during,O
the,O
years,O
2008,O
",",O
2009,O
and,O
2010,O
was,O
$,O
20,O
million,O
",",O
$,O
16,O
million,O
and,O
$,O
7,O
million,O
",",O
respectively,O
.,O
,O
Cash,O
proceeds,O
received,O
by,O
SCC,I-BUSINESS
",",O
including,O
proceeds,O
received,O
by,O
SCCII,I-BUSINESS
",",O
from,O
exercise,O
of,O
stock,O
options,O
was,O
$,O
3,O
million,O
",",O
$,O
5,O
million,O
and,O
$,O
1,O
million,O
in,O
2008,O
",",O
2009,O
and,O
2010,O
",",O
respectively,O
.,O
,O
Cash,O
proceeds,O
received,O
by,O
SCCII,I-BUSINESS
from,O
exercise,O
of,O
stock,O
options,O
was,O
$,O
1,O
million,O
in,O
each,O
of,O
2008,O
and,O
2009,O
and,O
$,O
0.4,O
million,O
in,O
2010,O
.,O
,O
The,O
tax,O
benefit,O
from,O
options,O
exercised,O
during,O
2008,O
",",O
2009,O
and,O
2010,O
was,O
$,O
7,O
million,O
",",O
$,O
6,O
million,O
and,O
$,O
2,O
million,O
",",O
respectively,O
.,O
,O
The,O
tax,O
benefit,O
from,O
release,O
of,O
RSUs,O
during,O
2008,O
",",O
2009,O
and,O
2010,O
was,O
$,O
0.1,O
million,O
",",O
$,O
0.1,O
million,O
and,O
$,O
0.8,O
million,O
",",O
respectively,O
.,O
,O
The,O
tax,O
benefit,O
is,O
realized,O
by,O
SCC,I-BUSINESS
since,O
SCC,I-BUSINESS
files,O
as,O
a,O
consolidated,O
group,O
which,O
includes,O
SCCII,I-BUSINESS
and,O
SunGard,I-BUSINESS
.,O
,O
The,O
following,O
table,O
summarizes,O
information,O
as,O
of,O
December,O
31,O
",",O
2010,O
concerning,O
options,O
for,O
Units,O
and,O
Class,O
A,O
shares,O
that,O
have,O
vested,O
and,O
that,O
are,O
expected,O
to,O
vest,O
in,O
the,O
future,O
:,O
,O
Savings,O
Plans,O
:,O
The,O
Company,O
and,O
its,O
subsidiaries,O
maintain,O
savings,O
and,O
other,O
defined,O
contribution,O
plans,O
.,O
,O
Certain,O
of,O
these,O
plans,O
generally,O
provide,O
that,O
employee,O
contributions,O
are,O
matched,O
with,O
cash,O
contributions,O
by,O
the,O
Company,O
subject,O
to,O
certain,O
limitations,O
including,O
a,O
limitation,O
on,O
the,O
Company,O
s,O
contributions,O
to,O
4,O
%,O
of,O
the,O
employee,O
s,O
compensation,O
.,O
,O
Total,O
expense,O
for,O
continuing,O
operations,O
under,O
these,O
plans,O
aggregated,O
$,O
54,O
million,O
in,O
2008,O
",",O
$,O
58,O
million,O
in,O
2009,O
and,O
$,O
63,O
million,O
in,O
2010,O
.,O
,O
Income,O
Taxes,O
:,O
The,O
provision,O
(,O
benefit,O
),O
for,O
income,O
taxes,O
for,O
2008,O
",",O
2009,O
and,O
2010,O
consisted,O
of,O
the,O
following,O
(,O
in,O
millions,O
),O
:,O
,O
Income,O
(,O
loss,O
),O
before,O
income,O
taxes,O
for,O
2008,O
",",O
2009,O
and,O
2010,O
consisted,O
of,O
the,O
following,O
(,O
in,O
millions,O
),O
:,O
,O
Differences,O
between,O
income,O
tax,O
expense,O
(,O
benefit,O
),O
at,O
the,O
U.S.,I-LOCATION
federal,O
statutory,O
income,O
tax,O
rate,O
and,O
the,O
Company,O
s,O
effective,O
income,O
tax,O
rate,O
for,O
2008,O
",",O
2009,O
and,O
2010,O
were,O
as,O
follows,O
(,O
in,O
millions,O
),O
:,O
,O
Deferred,O
income,O
taxes,O
are,O
recorded,O
based,O
upon,O
differences,O
between,O
financial,O
statement,O
and,O
tax,O
bases,O
of,O
assets,O
and,O
liabilities,O
.,O
,O
Deferred,O
tax,O
assets,O
and,O
liabilities,O
at,O
December,O
31,O
",",O
2009,O
and,O
2010,O
consisted,O
of,O
the,O
following,O
(,O
in,O
millions,O
),O
:,O
,O
The,O
net,O
operating,O
loss,O
carryforwards,O
total,O
$,O
2.2,O
billion,O
",",O
primarily,O
U.S.,I-LOCATION
state,O
of,O
$,O
1.9,O
billion,O
and,O
U.S.,I-LOCATION
federal,O
of,O
$,O
136,O
million,O
.,O
,O
These,O
tax,O
loss,O
carryforwards,O
expire,O
between,O
2011,O
and,O
2030,O
and,O
utilization,O
is,O
limited,O
in,O
certain,O
jurisdictions,O
.,O
,O
The,O
Company,O
recorded,O
the,O
benefit,O
of,O
tax,O
loss,O
carryforwards,O
of,O
$,O
2,O
million,O
",",O
$,O
23,O
million,O
and,O
$,O
32,O
million,O
in,O
2008,O
",",O
2009,O
and,O
2010,O
",",O
respectively,O
.,O
,O
A,O
valuation,O
allowance,O
for,O
deferred,O
income,O
tax,O
assets,O
associated,O
with,O
certain,O
net,O
operating,O
loss,O
carryforwards,O
has,O
been,O
established,O
.,O
,O
A,O
reconciliation,O
of,O
the,O
beginning,O
and,O
ending,O
amount,O
of,O
unrecognized,O
tax,O
benefits,O
follows,O
(,O
in,O
millions,O
),O
:,O
,O
Included,O
in,O
the,O
balance,O
of,O
unrecognized,O
tax,O
benefits,O
at,O
December,O
31,O
",",O
2010,O
is,O
approximately,O
$,O
2,O
million,O
(,O
net,O
of,O
state,O
benefit,O
),O
of,O
accrued,O
interest,O
and,O
penalties,O
.,O
,O
The,O
Company,O
recognizes,O
interest,O
and,O
penalties,O
related,O
to,O
uncertain,O
tax,O
positions,O
in,O
income,O
tax,O
expense,O
.,O
,O
The,O
Company,O
is,O
currently,O
under,O
audit,O
by,O
the,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
for,O
the,O
calendar,O
years,O
2007,O
and,O
2008,O
and,O
various,O
state,O
and,O
foreign,O
jurisdiction,O
tax,O
years,O
remain,O
open,O
to,O
examination,O
as,O
well,O
.,O
,O
At,O
any,O
time,O
some,O
portion,O
of,O
the,O
Company,O
s,O
operations,O
are,O
under,O
audit,O
.,O
,O
Accordingly,O
",",O
certain,O
matters,O
may,O
be,O
resolved,O
within,O
the,O
next,O
12,O
months,O
which,O
could,O
result,O
in,O
a,O
change,O
in,O
the,O
unrecognized,O
tax,O
benefit,O
liability,O
.,O
,O
As,O
part,O
of,O
the,O
Company,O
s,O
strategy,O
on,O
the,O
deployment,O
of,O
global,O
cash,O
",",O
during,O
the,O
fourth,O
quarter,O
of,O
2010,O
",",O
the,O
Company,O
determined,O
that,O
unremitted,O
earnings,O
of,O
approximately,O
$,O
446,O
million,O
which,O
had,O
previously,O
been,O
considered,O
to,O
be,O
indefinitely,O
reinvested,O
in,O
its,O
non-U.S.,I-MISCELLANEOUS
operations,O
may,O
be,O
repatriated,O
.,O
,O
Accordingly,O
",",O
deferred,O
tax,O
expense,O
of,O
$,O
48,O
million,O
was,O
recognized,O
to,O
establish,O
the,O
deferred,O
tax,O
liability,O
associated,O
with,O
unremitted,O
earnings,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2010,O
",",O
the,O
Company,O
provided,O
a,O
deferred,O
tax,O
liability,O
of,O
approximately,O
$,O
52,O
million,O
for,O
non-U.S.,I-MISCELLANEOUS
withholding,O
and,O
U.S.,I-LOCATION
income,O
taxes,O
associated,O
with,O
the,O
future,O
repatriation,O
of,O
earnings,O
for,O
certain,O
non-U.S.,I-MISCELLANEOUS
Segment,O
Information,O
:,O
The,O
Company,O
has,O
four,O
segments,O
:,O
FS,O
",",O
HE,O
and,O
PS,O
",",O
which,O
together,O
form,O
the,O
Company,O
s,O
Software,O
&,O
Processing,O
Solutions,O
business,O
",",O
and,O
AS,O
.,O
,O
FS,O
primarily,O
serves,O
financial,O
services,O
companies,O
through,O
a,O
broad,O
range,O
of,O
complementary,O
software,O
solutions,O
that,O
process,O
their,O
investment,O
and,O
trading,O
transactions,O
.,O
,O
The,O
principal,O
purpose,O
of,O
most,O
of,O
these,O
systems,O
is,O
to,O
automate,O
the,O
many,O
detailed,O
processes,O
associated,O
with,O
trading,O
securities,O
",",O
managing,O
investment,O
portfolios,O
and,O
accounting,O
for,O
investment,O
assets,O
.,O
,O
HE,O
primarily,O
provides,O
software,O
",",O
strategic,O
and,O
systems,O
integration,O
consulting,O
",",O
and,O
technology,O
management,O
services,O
to,O
colleges,O
",",O
universities,O
and,O
public,O
schools,O
.,O
,O
PS,O
primarily,O
provides,O
software,O
and,O
processing,O
solutions,O
designed,O
to,O
meet,O
the,O
specialized,O
needs,O
of,O
local,O
",",O
state,O
and,O
federal,O
governments,O
",",O
public,O
safety,O
and,O
justice,O
agencies,O
",",O
utilities,O
",",O
non-profits,O
and,O
other,O
public,O
sector,O
institutions,O
.,O
,O
AS,O
helps,O
its,O
customers,O
maintain,O
access,O
to,O
the,O
information,O
and,O
computer,O
systems,O
they,O
need,O
to,O
run,O
their,O
businesses,O
by,O
providing,O
them,O
with,O
cost-effective,O
resources,O
to,O
keep,O
their,O
IT,O
systems,O
reliable,O
and,O
secure,O
.,O
,O
AS,O
offers,O
a,O
complete,O
range,O
of,O
availability,O
services,O
",",O
including,O
recovery,O
services,O
",",O
managed,O
services,O
",",O
consulting,O
services,O
and,O
business,O
continuity,O
management,O
software,O
.,O
,O
The,O
Company,O
evaluates,O
the,O
performance,O
of,O
its,O
segments,O
based,O
on,O
operating,O
results,O
before,O
interest,O
",",O
income,O
taxes,O
",",O
goodwill,O
impairment,O
",",O
amortization,O
of,O
acquisition-related,O
intangible,O
assets,O
",",O
stock,O
compensation,O
and,O
certain,O
other,O
costs,O
.,O
,O
The,O
operating,O
results,O
for,O
each,O
segment,O
follow,O
(,O
in,O
millions,O
),O
:,O
,O
Amortization,O
of,O
acquisition-related,O
intangible,O
assets,O
by,O
segment,O
follows,O
(,O
in,O
millions,O
),O
:,O
,O
The,O
FS,O
segment,O
is,O
organized,O
to,O
align,O
with,O
customer-facing,O
business,O
areas,O
.,O
,O
FS,O
revenue,O
by,O
business,O
area,O
follows,O
(,O
in,O
millions,O
),O
:,O
,O
The,O
Company,O
s,O
revenue,O
by,O
customer,O
location,O
follows,O
(,O
in,O
millions,O
),O
:,O
,O
The,O
Company,O
s,O
property,O
and,O
equipment,O
by,O
geographic,O
location,O
follows,O
(,O
in,O
millions,O
),O
:,O
,O
Related,O
Party,O
Transactions,O
:,O
SunGard,I-BUSINESS
is,O
required,O
to,O
pay,O
management,O
fees,O
to,O
affiliates,O
of,O
the,O
Sponsors,O
in,O
connection,O
with,O
management,O
consulting,O
services,O
provided,O
to,O
SunGard,O
and,O
the,O
Parent,O
Companies,O
.,O
,O
These,O
services,O
include,O
financial,O
",",O
managerial,O
and,O
operational,O
advice,O
and,O
implementation,O
strategies,O
for,O
improving,O
the,O
operating,O
",",O
marketing,O
and,O
financial,O
performance,O
of,O
SunGard,O
and,O
its,O
subsidiaries,O
.,O
,O
The,O
management,O
fees,O
are,O
equal,O
to,O
1,O
%,O
of,O
quarterly,O
Adjusted,O
EBITDA,O
",",O
defined,O
as,O
earnings,O
before,O
interest,O
",",O
taxes,O
",",O
depreciation,O
and,O
amortization,O
and,O
goodwill,O
impairment,O
",",O
further,O
adjusted,O
to,O
exclude,O
unusual,O
items,O
and,O
other,O
adjustments,O
as,O
defined,O
in,O
the,O
management,O
agreement,O
",",O
and,O
are,O
payable,O
quarterly,O
in,O
arrears,O
.,O
,O
In,O
addition,O
",",O
these,O
affiliates,O
of,O
the,O
Sponsors,O
may,O
be,O
entitled,O
to,O
additional,O
fees,O
in,O
connection,O
with,O
certain,O
financing,O
",",O
acquisition,O
",",O
disposition,O
and,O
change,O
in,O
control,O
transactions,O
.,O
,O
For,O
the,O
years,O
ended,O
December,O
31,O
",",O
2008,O
",",O
2009,O
and,O
2010,O
",",O
SunGard,O
recorded,O
$,O
23,O
million,O
",",O
$,O
15,O
million,O
and,O
$,O
17,O
million,O
",",O
respectively,O
",",O
relating,O
to,O
management,O
fees,O
in,O
sales,O
",",O
marketing,O
and,O
administration,O
expenses,O
in,O
the,O
statement,O
of,O
operations,O
",",O
of,O
which,O
$,O
4,O
million,O
and,O
$,O
6,O
million,O
",",O
respectively,O
",",O
is,O
included,O
in,O
other,O
accrued,O
expenses,O
at,O
December,O
31,O
",",O
2009,O
and,O
2010,O
",",O
respectively,O
.,O
,O
Two,O
of,O
the,O
Company,O
s,O
Sponsors,O
",",O
Goldman,I-BUSINESS
Sachs,I-BUSINESS
&,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
and,O
Kohlberg,I-BUSINESS
Kravis,I-BUSINESS
Roberts,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",O
and/or,O
their,O
respective,O
affiliates,O
served,O
as,O
co-managers,O
in,O
connection,O
with,O
SunGard,I-BUSINESS
s,O
2008,O
debt,O
offering,O
of,O
$,O
500,O
million,O
Senior,O
Notes,O
due,O
2015,O
and,O
$,O
500,O
million,O
Incremental,O
Term,O
Loan,O
.,O
,O
In,O
connection,O
with,O
serving,O
in,O
such,O
capacity,O
",",O
Goldman,I-BUSINESS
Sachs,I-BUSINESS
&,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
and,O
Kohlberg,I-BUSINESS
Kravis,I-BUSINESS
Roberts,I-BUSINESS
&,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
were,O
paid,O
$,O
26,O
million,O
and,O
$,O
4,O
million,O
",",O
respectively,O
",",O
for,O
customary,O
fees,O
and,O
expenses,O
.,O
,O
One,O
of,O
the,O
Company,O
s,O
Sponsors,O
",",O
Goldman,I-BUSINESS
Sachs,I-BUSINESS
&,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
and/or,O
its,O
respective,O
affiliates,O
served,O
as,O
a,O
joint,O
book-running,O
manager,O
in,O
connection,O
with,O
SunGard,I-BUSINESS
s,O
2010,O
debt,O
offering,O
of,O
$,O
900,O
million,O
Senior,O
Notes,O
due,O
2018,O
and,O
$,O
700,O
million,O
Senior,O
Notes,O
due,O
2020,O
.,O
,O
In,O
connection,O
with,O
serving,O
in,O
such,O
capacity,O
",",O
Goldman,I-BUSINESS
Sachs,I-BUSINESS
&,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
was,O
paid,O
$,O
10,O
million,O
for,O
customary,O
fees,O
and,O
expenses,O
.,O
,O
Commitments,O
",",O
Contingencies,O
and,O
Guarantees,O
:,O
The,O
Company,O
leases,O
a,O
substantial,O
portion,O
of,O
its,O
computer,O
equipment,O
and,O
facilities,O
under,O
operating,O
leases,O
.,O
,O
The,O
Company,O
s,O
leases,O
are,O
generally,O
non-cancelable,O
or,O
cancelable,O
only,O
upon,O
payment,O
of,O
cancellation,O
fees,O
.,O
,O
All,O
lease,O
payments,O
are,O
based,O
on,O
the,O
passage,O
of,O
time,O
",",O
but,O
include,O
",",O
in,O
some,O
cases,O
",",O
payments,O
for,O
insurance,O
",",O
maintenance,O
and,O
property,O
taxes,O
.,O
,O
There,O
are,O
no,O
bargain,O
purchase,O
options,O
on,O
operating,O
leases,O
at,O
favorable,O
terms,O
",",O
but,O
most,O
facility,O
leases,O
have,O
one,O
or,O
more,O
renewal,O
options,O
and,O
have,O
either,O
fixed,O
or,O
Consumer,I-MISCELLANEOUS
Price,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
escalation,O
clauses,O
.,O
,O
Certain,O
facility,O
leases,O
include,O
an,O
annual,O
escalation,O
for,O
increases,O
in,O
utilities,O
and,O
property,O
taxes,O
.,O
,O
In,O
addition,O
",",O
certain,O
facility,O
leases,O
are,O
subject,O
to,O
restoration,O
clauses,O
",",O
whereby,O
the,O
facility,O
may,O
need,O
to,O
be,O
restored,O
to,O
its,O
original,O
condition,O
upon,O
termination,O
of,O
the,O
lease,O
.,O
,O
There,O
were,O
$,O
28,O
million,O
of,O
restoration,O
liabilities,O
included,O
in,O
accrued,O
expenses,O
at,O
December,O
31,O
",",O
2010,O
.,O
,O
Future,O
minimum,O
rentals,O
under,O
operating,O
leases,O
with,O
initial,O
or,O
remaining,O
non-cancelable,O
lease,O
terms,O
in,O
excess,O
of,O
one,O
year,O
at,O
December,O
31,O
",",O
2010,O
follow,O
(,O
in,O
millions,O
),O
:,O
,O
Rent,O
expense,O
from,O
continuing,O
operations,O
aggregated,O
$,O
222,O
million,O
in,O
2008,O
",",O
$,O
243,O
million,O
in,O
2009,O
and,O
$,O
237,O
million,O
in,O
2010,O
.,O
,O
At,O
December,O
31,O
",",O
2010,O
",",O
the,O
Company,O
had,O
$,O
42,O
million,O
of,O
outstanding,O
letters,O
of,O
credit,O
and,O
bid,O
bonds,O
issued,O
primarily,O
as,O
security,O
for,O
performance,O
under,O
certain,O
customer,O
contracts,O
.,O
,O
In,O
the,O
event,O
that,O
the,O
management,O
agreement,O
described,O
in,O
Note,O
13,O
is,O
terminated,O
by,O
the,O
Sponsors,O
(,O
or,O
their,O
affiliates,O
),O
or,O
SunGard,I-BUSINESS
and,O
its,O
Parent,O
Companies,O
",",O
the,O
Sponsors,O
(,O
or,O
their,O
affiliates,O
),O
will,O
receive,O
a,O
lump,O
sum,O
payment,O
equal,O
to,O
the,O
present,O
value,O
of,O
the,O
annual,O
management,O
fees,O
that,O
would,O
have,O
been,O
payable,O
for,O
the,O
remainder,O
of,O
the,O
term,O
of,O
the,O
management,O
agreement,O
.,O
,O
The,O
initial,O
term,O
of,O
the,O
management,O
agreement,O
is,O
ten,O
years,O
",",O
and,O
it,O
extends,O
annually,O
for,O
one,O
year,O
unless,O
the,O
Sponsors,O
(,O
or,O
their,O
affiliates,O
),O
or,O
SunGard,I-BUSINESS
and,O
its,O
Parent,O
Companies,O
provide,O
notice,O
to,O
the,O
other,O
.,O
,O
The,O
initial,O
ten,O
year,O
term,O
expires,O
August,O
11,O
",",O
2015,O
.,O
,O
The,O
Company,O
is,O
presently,O
a,O
party,O
to,O
certain,O
lawsuits,O
arising,O
in,O
the,O
ordinary,O
course,O
of,O
its,O
business,O
.,O
,O
In,O
the,O
opinion,O
of,O
management,O
",",O
none,O
of,O
its,O
current,O
legal,O
proceedings,O
are,O
expected,O
to,O
have,O
a,O
material,O
impact,O
on,O
the,O
Company,O
s,O
business,O
or,O
financial,O
results,O
.,O
,O
The,O
Company,O
s,O
customer,O
contracts,O
generally,O
include,O
typical,O
indemnification,O
of,O
customers,O
",",O
primarily,O
for,O
intellectual,O
property,O
infringement,O
claims,O
.,O
,O
Liabilities,O
in,O
connection,O
with,O
such,O
obligations,O
have,O
not,O
been,O
material,O
.,O
,O
Quarterly,O
Financial,O
Data,O
(,O
unaudited,O
),O
:,O
,O
Supplemental,O
Cash,O
Flow,O
Information,O
:,O
Supplemental,O
cash,O
flow,O
information,O
for,O
2008,O
",",O
2009,O
and,O
2010,O
follows,O
(,O
in,O
millions,O
),O
:,O
,O
Supplemental,O
Guarantor,O
Condensed,O
Consolidating,O
Financial,O
Statements,O
:,O
SunGard,O
s,O
senior,O
notes,O
are,O
jointly,O
and,O
severally,O
",",O
fully,O
and,O
unconditionally,O
guaranteed,O
on,O
a,O
senior,O
unsecured,O
basis,O
and,O
the,O
senior,O
subordinated,O
notes,O
are,O
jointly,O
and,O
severally,O
",",O
fully,O
and,O
unconditionally,O
guaranteed,O
on,O
an,O
unsecured,O
senior,O
subordinated,O
basis,O
",",O
in,O
each,O
case,O
",",O
subject,O
to,O
certain,O
exceptions,O
",",O
by,O
substantially,O
all,O
wholly,O
owned,O
",",O
domestic,O
subsidiaries,O
of,O
SunGard,I-BUSINESS
(,O
collectively,O
",",O
the,O
Guarantors,O
),O
.,O
,O
Each,O
of,O
the,O
Guarantors,O
is,O
100,O
%,O
owned,O
",",O
directly,O
or,O
indirectly,O
",",O
by,O
SunGard,I-BUSINESS
.,O
,O
None,O
of,O
the,O
other,O
subsidiaries,O
of,O
SunGard,I-BUSINESS
",",O
either,O
direct,O
or,O
indirect,O
",",O
nor,O
any,O
of,O
the,O
Holding,O
Companies,O
",",O
guarantee,O
the,O
senior,O
notes,O
and,O
senior,O
subordinated,O
notes,O
(,O
Non-Guarantors,O
),O
.,O
,O
The,O
Guarantors,O
also,O
unconditionally,O
guarantee,O
the,O
senior,O
secured,O
credit,O
facilities,O
",",O
described,O
in,O
Note,O
5,O
.,O
,O
The,O
following,O
tables,O
present,O
the,O
financial,O
position,O
",",O
results,O
of,O
operations,O
and,O
cash,O
flows,O
of,O
SunGard,I-BUSINESS
(,O
referred,O
to,O
as,O
Parent,O
Company,O
for,O
purposes,O
of,O
this,O
note,O
only,O
),O
",",O
the,O
Guarantor,O
subsidiaries,O
",",O
the,O
Non-Guarantor,O
subsidiaries,O
and,O
Eliminations,O
as,O
of,O
December,O
31,O
",",O
2009,O
and,O
2010,O
",",O
and,O
for,O
the,O
years,O
ended,O
December,O
31,O
",",O
2008,O
",",O
2009,O
and,O
2010,O
to,O
arrive,O
at,O
the,O
information,O
for,O
SunGard,I-BUSINESS
on,O
a,O
consolidated,O
basis,O
.,O
,O
SCC,I-BUSINESS
and,O
SCCII,I-BUSINESS
are,O
neither,O
parties,O
to,O
nor,O
guarantors,O
of,O
the,O
debt,O
issued,O
as,O
described,O
in,O
Note,O
5,O
.,O
,O
Management,O
's,O
Discussion,O
and,O
Analysis,O
Exhibit,O
99.2,O
As,O
revised,O
to,O
reflect,O
the,O
transfer,O
of,O
SunGard,I-BUSINESS
s,O
K-12,O
business,O
from,O
its,O
Public,O
Sector,O
segment,O
to,O
its,O
Higher,O
Education,O
segment,O
.,O
,O
Overview,O
We,O
are,O
one,O
of,O
the,O
world,O
s,O
leading,O
software,O
and,O
technology,O
services,O
companies,O
.,O
,O
We,O
provide,O
software,O
and,O
technology,O
services,O
to,O
financial,O
services,O
",",O
higher,O
education,O
and,O
public,O
sector,O
organizations,O
.,O
,O
We,O
also,O
provide,O
disaster,O
recovery,O
services,O
",",O
managed,O
services,O
",",O
information,O
availability,O
consulting,O
services,O
and,O
business,O
continuity,O
management,O
software,O
.,O
,O
We,O
serve,O
more,O
than,O
"25,000",O
customers,O
in,O
more,O
than,O
70,O
countries,O
.,O
,O
Our,O
high,O
quality,O
software,O
solutions,O
",",O
excellent,O
customer,O
support,O
and,O
specialized,O
technology,O
services,O
result,O
in,O
strong,O
customer,O
retention,O
rates,O
across,O
our,O
business,O
segments,O
and,O
create,O
long-term,O
customer,O
relationships,O
.,O
,O
We,O
believe,O
that,O
we,O
are,O
one,O
of,O
the,O
most,O
efficient,O
operators,O
of,O
mission-critical,O
IT,O
solutions,O
as,O
a,O
result,O
of,O
the,O
economies,O
of,O
scale,O
we,O
derive,O
from,O
serving,O
multiple,O
customers,O
on,O
shared,O
processing,O
platforms,O
.,O
,O
We,O
operate,O
our,O
business,O
in,O
four,O
segments,O
:,O
Financial,O
Systems,O
(,O
FS,O
),O
",",O
Higher,O
Education,O
(,O
HE,O
),O
",",O
Public,O
Sector,O
(,O
PS,O
),O
and,O
Availability,O
Services,O
(,O
AS,O
),O
.,O
,O
Our,O
FS,O
segment,O
primarily,O
serves,O
financial,O
services,O
companies,O
",",O
corporate,O
and,O
government,O
treasury,O
departments,O
and,O
energy,O
companies,O
.,O
,O
Our,O
HE,O
segment,O
primarily,O
serves,O
higher,O
education,O
institutions,O
.,O
,O
Our,O
PS,O
segment,O
primarily,O
serves,O
state,O
and,O
local,O
governments,O
and,O
not-for-profit,O
organizations,O
.,O
,O
Our,O
AS,O
segment,O
serves,O
IT-dependent,O
companies,O
across,O
virtually,O
all,O
industries,O
.,O
,O
SunGard,I-BUSINESS
is,O
a,O
wholly,O
owned,O
subsidiary,O
of,O
SunGard,I-BUSINESS
Holdco,I-BUSINESS
LLC,I-BUSINESS
",",O
which,O
is,O
wholly,O
owned,O
by,O
SunGard,I-BUSINESS
Holding,I-BUSINESS
Corp.,I-BUSINESS
",",O
which,O
is,O
wholly,O
owned,O
by,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
II,I-BUSINESS
(,O
SCCII,I-BUSINESS
),O
",",O
which,O
is,O
a,O
subsidiary,O
of,O
SunGard,I-BUSINESS
Capital,I-BUSINESS
Corp.,I-BUSINESS
(,O
SCC,I-BUSINESS
),O
.,O
,O
SCCII,I-BUSINESS
and,O
SCC,I-BUSINESS
are,O
collectively,O
referred,O
to,O
as,O
the,O
Parent,O
Companies,O
.,O
,O
All,O
four,O
of,O
these,O
companies,O
were,O
formed,O
for,O
the,O
purpose,O
of,O
facilitating,O
the,O
LBO,O
and,O
are,O
collectively,O
referred,O
to,O
as,O
the,O
Holding,O
Companies,O
.,O
,O
SunGard,I-BUSINESS
Data,I-BUSINESS
Systems,I-BUSINESS
Inc.,I-BUSINESS
(,O
SunGard,I-BUSINESS
),O
was,O
acquired,O
on,O
August,O
11,O
",",O
2005,O
in,O
a,O
leveraged,O
buy-out,O
by,O
a,O
consortium,O
of,O
private,O
equity,O
investment,O
funds,O
associated,O
with,O
Bain,I-BUSINESS
Capital,I-BUSINESS
Partners,I-BUSINESS
",",O
The,I-BUSINESS
Blackstone,I-BUSINESS
Group,I-BUSINESS
",",O
Goldman,I-BUSINESS
Sachs,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",O
Kohlberg,I-BUSINESS
Kravis,I-BUSINESS
Roberts,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",O
Providence,I-BUSINESS
Equity,I-BUSINESS
Partners,I-BUSINESS
",",O
Silver,I-BUSINESS
Lake,I-BUSINESS
and,O
TPG,I-BUSINESS
(,O
the,O
LBO,O
),O
.,O
,O
Our,O
Sponsors,O
continually,O
evaluate,O
various,O
strategic,O
alternatives,O
with,O
respect,O
to,O
the,O
Company,O
",",O
including,O
a,O
potential,O
spin-off,O
of,O
the,O
AS,O
business,O
to,O
our,O
current,O
equity,O
holders,O
.,O
,O
We,O
expect,O
that,O
if,O
we,O
were,O
to,O
spin-off,O
any,O
business,O
segment,O
",",O
that,O
business,O
segment,O
would,O
incur,O
new,O
debt,O
and,O
we,O
would,O
repay,O
a,O
portion,O
of,O
our,O
existing,O
indebtedness,O
.,O
,O
Additionally,O
",",O
it,O
is,O
possible,O
that,O
along,O
with,O
any,O
spin-off,O
",",O
we,O
would,O
receive,O
cash,O
proceeds,O
from,O
an,O
issuance,O
of,O
equity,O
of,O
one,O
of,O
our,O
Parent,O
Companies,O
.,O
,O
There,O
can,O
be,O
no,O
assurance,O
that,O
we,O
will,O
ultimately,O
pursue,O
any,O
strategic,O
alternatives,O
with,O
respect,O
to,O
any,O
business,O
segment,O
",",O
including,O
AS,O
",",O
or,O
an,O
equity,O
issuance,O
or,O
",",O
if,O
we,O
do,O
",",O
what,O
the,O
structure,O
or,O
timing,O
for,O
any,O
such,O
transaction,O
would,O
be,O
.,O
,O
FS,O
provides,O
mission-critical,O
software,O
and,O
technology,O
services,O
to,O
virtually,O
every,O
type,O
of,O
financial,O
services,O
institution,O
",",O
including,O
buy-side,O
and,O
sell-side,O
institutions,O
",",O
third-party,O
administrators,O
",",O
wealth,O
managers,O
",",O
retail,O
banks,O
",",O
insurance,O
companies,O
",",O
corporate,O
treasuries,O
and,O
energy,O
trading,O
firms,O
.,O
,O
Our,O
broad,O
range,O
of,O
complementary,O
software,O
solutions,O
and,O
associated,O
technology,O
services,O
help,O
financial,O
services,O
institutions,O
automate,O
the,O
business,O
processes,O
associated,O
with,O
trading,O
",",O
managing,O
portfolios,O
and,O
accounting,O
for,O
investment,O
assets,O
.,O
,O
HE,O
provides,O
software,O
and,O
technology,O
services,O
primarily,O
to,O
colleges,O
and,O
universities,O
as,O
well,O
as,O
to,O
school,O
districts,O
.,O
,O
Education,O
institutions,O
rely,O
on,O
our,O
broad,O
portfolio,O
of,O
solutions,O
and,O
technology,O
services,O
to,O
improve,O
the,O
way,O
they,O
teach,O
",",O
learn,O
",",O
manage,O
and,O
connect,O
with,O
their,O
constituents,O
.,O
,O
PS,O
provides,O
software,O
and,O
technology,O
services,O
designed,O
to,O
meet,O
the,O
specialized,O
needs,O
of,O
local,O
",",O
state,O
and,O
federal,O
governments,O
",",O
public,O
safety,O
and,O
justice,O
agencies,O
",",O
utilities,O
",",O
nonprofits,O
and,O
other,O
public,O
sector,O
institutions,O
.,O
,O
AS,O
provides,O
disaster,O
recovery,O
services,O
",",O
managed,O
IT,O
services,O
",",O
information,O
availability,O
consulting,O
services,O
and,O
business,O
continuity,O
management,O
software,O
to,O
"10,000",O
customers,O
in,O
North,I-LOCATION
America,I-LOCATION
and,O
Europe,I-LOCATION
.,O
,O
With,O
five,O
million,O
square,O
feet,O
of,O
data,O
center,O
and,O
operations,O
space,O
",",O
AS,O
assists,O
IT,O
organizations,O
across,O
virtually,O
all,O
industry,O
and,O
government,O
sectors,O
to,O
prepare,O
for,O
and,O
recover,O
from,O
emergencies,O
by,O
helping,O
them,O
minimize,O
their,O
computer,O
downtime,O
and,O
optimize,O
their,O
uptime,O
.,O
,O
Through,O
direct,O
sales,O
and,O
channel,O
partners,O
",",O
AS,O
helps,O
organizations,O
ensure,O
their,O
people,O
and,O
customers,O
have,O
uninterrupted,O
access,O
to,O
the,O
information,O
systems,O
they,O
need,O
in,O
order,O
to,O
do,O
business,O
.,O
,O
Global,O
Economic,O
Conditions,O
Current,O
instability,O
in,O
the,O
worldwide,O
financial,O
markets,O
",",O
including,O
volatility,O
in,O
and,O
disruption,O
of,O
the,O
credit,O
markets,O
",",O
has,O
resulted,O
in,O
uncertain,O
economic,O
conditions,O
.,O
,O
Late,O
in,O
2008,O
",",O
a,O
global,O
financial,O
crisis,O
triggered,O
unprecedented,O
market,O
volatility,O
and,O
depressed,O
economic,O
growth,O
.,O
,O
In,O
2009,O
",",O
the,O
markets,O
began,O
to,O
slowly,O
stabilize,O
as,O
the,O
year,O
progressed,O
and,O
continued,O
to,O
improve,O
in,O
2010,O
.,O
,O
However,O
",",O
the,O
current,O
economic,O
conditions,O
remain,O
dynamic,O
and,O
uncertain,O
and,O
are,O
likely,O
to,O
remain,O
so,O
into,O
2011,O
.,O
,O
Irrespective,O
of,O
global,O
economic,O
conditions,O
",",O
we,O
are,O
positive,O
about,O
our,O
competitive,O
position,O
and,O
our,O
current,O
product,O
portfolio,O
.,O
,O
We,O
believe,O
that,O
SunGard,I-BUSINESS
is,O
well-positioned,O
to,O
capitalize,O
on,O
new,O
opportunities,O
to,O
increase,O
revenue,O
as,O
the,O
global,O
economy,O
improves,O
.,O
,O
We,O
remain,O
focused,O
on,O
executing,O
in,O
the,O
areas,O
we,O
can,O
control,O
by,O
continuing,O
to,O
provide,O
high-value,O
products,O
and,O
solutions,O
while,O
managing,O
our,O
expenses,O
.,O
,O
SunGard,I-BUSINESS
s,O
results,O
of,O
operations,O
typically,O
trail,O
current,O
economic,O
activity,O
",",O
largely,O
due,O
to,O
the,O
multi-year,O
contracts,O
that,O
generate,O
the,O
majority,O
of,O
our,O
revenue,O
.,O
,O
We,O
participate,O
in,O
the,O
financial,O
services,O
",",O
higher,O
education,O
and,O
public,O
sector,O
industries,O
and,O
",",O
in,O
our,O
availability,O
services,O
business,O
",",O
across,O
a,O
broad,O
cross-section,O
of,O
the,O
economy,O
.,O
,O
Each,O
of,O
these,O
sectors,O
",",O
to,O
varying,O
degrees,O
",",O
has,O
experienced,O
some,O
disruption,O
.,O
,O
The,O
results,O
in,O
2010,O
reflect,O
the,O
impact,O
of,O
these,O
challenging,O
economic,O
conditions,O
.,O
,O
In,O
response,O
",",O
we,O
have,O
right-sized,O
our,O
expense,O
base,O
in,O
line,O
with,O
expected,O
revenue,O
opportunities,O
but,O
have,O
continued,O
to,O
invest,O
in,O
capital,O
spending,O
",",O
product,O
development,O
and,O
to,O
opportunistically,O
acquire,O
technology,O
through,O
acquisitions,O
.,O
,O
The,O
following,O
discussion,O
reflects,O
the,O
results,O
of,O
operations,O
and,O
financial,O
condition,O
of,O
SCC,I-BUSINESS
",",O
which,O
are,O
materially,O
the,O
same,O
as,O
the,O
results,O
of,O
operations,O
and,O
financial,O
condition,O
of,O
SCCII,I-BUSINESS
and,O
SunGard,I-BUSINESS
.,O
,O
Therefore,O
",",O
the,O
discussions,O
provided,O
are,O
applicable,O
to,O
each,O
of,O
SCC,I-BUSINESS
",",O
SCCII,I-BUSINESS
and,O
SunGard,I-BUSINESS
unless,O
otherwise,O
noted,O
.,O
,O
Also,O
",",O
the,O
following,O
discussion,O
includes,O
historical,O
and,O
certain,O
forward-looking,O
information,O
that,O
should,O
be,O
read,O
together,O
with,O
the,O
accompanying,O
Consolidated,O
Financial,O
Statements,O
and,O
related,O
footnotes,O
and,O
the,O
discussion,O
above,O
of,O
certain,O
risks,O
and,O
uncertainties,O
(,O
see,O
ITEM,O
1A—RISK,O
FACTORS,O
),O
that,O
could,O
cause,O
future,O
operating,O
results,O
to,O
differ,O
materially,O
from,O
historical,O
results,O
or,O
the,O
expected,O
results,O
indicated,O
by,O
forward-looking,O
statements,O
.,O
,O
Use,O
of,O
Estimates,O
and,O
Critical,O
Accounting,O
Policies,O
The,O
preparation,O
of,O
financial,O
statements,O
in,O
conformity,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
requires,O
us,O
to,O
make,O
many,O
estimates,O
and,O
judgments,O
that,O
affect,O
the,O
reported,O
amounts,O
of,O
assets,O
",",O
liabilities,O
",",O
revenue,O
and,O
expenses,O
.,O
,O
Those,O
estimates,O
and,O
judgments,O
are,O
based,O
on,O
historical,O
experience,O
",",O
future,O
expectations,O
and,O
other,O
factors,O
and,O
assumptions,O
we,O
believe,O
to,O
be,O
reasonable,O
under,O
the,O
circumstances,O
.,O
,O
We,O
review,O
our,O
estimates,O
and,O
judgments,O
on,O
an,O
ongoing,O
basis,O
and,O
revise,O
them,O
when,O
necessary,O
.,O
,O
Actual,O
results,O
may,O
differ,O
from,O
the,O
original,O
or,O
revised,O
estimates,O
.,O
,O
summary,O
of,O
our,O
significant,O
accounting,O
policies,O
is,O
contained,O
in,O
Note,O
1,O
of,O
Notes,O
to,O
Consolidated,O
Financial,O
Statements,O
.,O
,O
A,O
description,O
of,O
the,O
most,O
critical,O
policies,O
and,O
those,O
areas,O
where,O
estimates,O
have,O
a,O
relatively,O
greater,O
effect,O
in,O
the,O
financial,O
statements,O
follows,O
.,O
,O
Our,O
management,O
has,O
discussed,O
the,O
critical,O
accounting,O
policies,O
described,O
below,O
with,O
our,O
audit,O
committee,O
.,O
,O
Intangible,O
Assets,O
and,O
Purchase,O
Accounting,O
Purchase,O
accounting,O
requires,O
that,O
all,O
assets,O
and,O
liabilities,O
be,O
recorded,O
at,O
fair,O
value,O
on,O
the,O
acquisition,O
date,O
",",O
including,O
identifiable,O
intangible,O
assets,O
separate,O
from,O
goodwill,O
.,O
,O
Identifiable,O
intangible,O
assets,O
include,O
customer,O
base,O
(,O
which,O
includes,O
customer,O
contracts,O
and,O
relationships,O
),O
",",O
software,O
and,O
trade,O
name,O
.,O
,O
Goodwill,O
represents,O
the,O
excess,O
of,O
cost,O
over,O
the,O
fair,O
value,O
of,O
net,O
assets,O
acquired,O
.,O
,O
The,O
estimated,O
fair,O
values,O
and,O
useful,O
lives,O
of,O
identifiable,O
intangible,O
assets,O
are,O
based,O
on,O
many,O
factors,O
",",O
including,O
estimates,O
and,O
assumptions,O
of,O
future,O
operating,O
performance,O
and,O
cash,O
flows,O
of,O
the,O
acquired,O
business,O
",",O
the,O
nature,O
of,O
the,O
business,O
acquired,O
",",O
the,O
specific,O
characteristics,O
of,O
the,O
identified,O
intangible,O
assets,O
",",O
and,O
our,O
historical,O
experience,O
and,O
that,O
of,O
the,O
acquired,O
business,O
.,O
,O
The,O
estimates,O
and,O
assumptions,O
used,O
to,O
determine,O
the,O
fair,O
values,O
and,O
useful,O
lives,O
of,O
identified,O
intangible,O
assets,O
could,O
change,O
due,O
to,O
numerous,O
factors,O
",",O
including,O
product,O
demand,O
",",O
market,O
conditions,O
",",O
technological,O
developments,O
",",O
economic,O
conditions,O
and,O
competition,O
.,O
,O
In,O
connection,O
with,O
our,O
determination,O
of,O
fair,O
values,O
for,O
the,O
LBO,O
and,O
for,O
other,O
significant,O
acquisitions,O
",",O
we,O
engage,O
independent,O
appraisal,O
firms,O
to,O
assist,O
us,O
with,O
the,O
valuation,O
of,O
intangible,O
(,O
and,O
certain,O
tangible,O
),O
assets,O
acquired,O
and,O
certain,O
assumed,O
obligations,O
.,O
,O
We,O
periodically,O
review,O
carrying,O
values,O
and,O
useful,O
lives,O
of,O
long-lived,O
assets,O
for,O
impairment,O
whenever,O
events,O
or,O
changes,O
in,O
circumstances,O
indicate,O
that,O
the,O
carrying,O
value,O
of,O
the,O
asset,O
may,O
not,O
be,O
recoverable,O
.,O
,O
Factors,O
that,O
could,O
indicate,O
an,O
impairment,O
include,O
significant,O
underperformance,O
of,O
the,O
asset,O
as,O
compared,O
to,O
historical,O
or,O
projected,O
future,O
operating,O
results,O
",",O
or,O
significant,O
negative,O
industry,O
or,O
economic,O
trends,O
.,O
,O
When,O
we,O
determine,O
that,O
the,O
carrying,O
value,O
of,O
an,O
asset,O
may,O
not,O
be,O
recoverable,O
",",O
the,O
related,O
estimated,O
future,O
undiscounted,O
cash,O
flows,O
expected,O
to,O
result,O
from,O
the,O
use,O
and,O
eventual,O
disposition,O
of,O
the,O
asset,O
are,O
compared,O
to,O
the,O
carrying,O
value,O
of,O
the,O
asset,O
.,O
,O
If,O
the,O
sum,O
of,O
the,O
estimated,O
future,O
undiscounted,O
cash,O
flows,O
is,O
less,O
than,O
the,O
carrying,O
amount,O
",",O
we,O
record,O
an,O
impairment,O
charge,O
based,O
on,O
the,O
difference,O
between,O
the,O
carrying,O
value,O
of,O
the,O
asset,O
and,O
its,O
fair,O
value,O
",",O
which,O
we,O
estimate,O
based,O
on,O
discounted,O
expected,O
future,O
cash,O
flows,O
.,O
,O
In,O
determining,O
whether,O
an,O
asset,O
is,O
impaired,O
",",O
we,O
make,O
assumptions,O
regarding,O
recoverability,O
of,O
costs,O
",",O
estimated,O
future,O
cash,O
flows,O
from,O
the,O
asset,O
",",O
intended,O
use,O
of,O
the,O
asset,O
and,O
other,O
relevant,O
factors,O
.,O
,O
If,O
these,O
estimates,O
or,O
their,O
related,O
assumptions,O
change,O
",",O
we,O
may,O
be,O
required,O
to,O
record,O
impairment,O
charges,O
for,O
these,O
assets,O
.,O
,O
We,O
are,O
required,O
to,O
perform,O
a,O
goodwill,O
impairment,O
test,O
",",O
a,O
two-step,O
test,O
",",O
annually,O
and,O
more,O
frequently,O
when,O
negative,O
conditions,O
or,O
a,O
triggering,O
event,O
arise,O
.,O
,O
We,O
complete,O
our,O
annual,O
goodwill,O
impairment,O
test,O
as,O
of,O
July,O
1,O
.,O
,O
In,O
step,O
one,O
",",O
the,O
estimated,O
fair,O
value,O
of,O
each,O
reporting,O
unit,O
is,O
compared,O
to,O
its,O
carrying,O
value,O
.,O
,O
We,O
estimate,O
the,O
fair,O
values,O
of,O
each,O
reporting,O
unit,O
by,O
a,O
combination,O
of,O
(,O
i,O
),O
estimation,O
of,O
the,O
discounted,O
cash,O
flows,O
of,O
each,O
of,O
the,O
reporting,O
units,O
based,O
on,O
projected,O
earnings,O
in,O
the,O
future,O
(,O
the,O
income,O
approach,O
),O
and,O
(,O
ii,O
),O
a,O
comparative,O
analysis,O
of,O
revenue,O
and,O
EBITDA,O
multiples,O
of,O
public,O
companies,O
in,O
similar,O
markets,O
(,O
the,O
market,O
approach,O
),O
.,O
,O
If,O
there,O
is,O
a,O
deficiency,O
(,O
the,O
estimated,O
fair,O
value,O
of,O
a,O
reporting,O
unit,O
is,O
less,O
than,O
the,O
carrying,O
value,O
),O
",",O
a,O
step,O
two,O
test,O
is,O
required,O
.,O
,O
In,O
step,O
two,O
",",O
the,O
amount,O
of,O
any,O
goodwill,O
impairment,O
is,O
measured,O
by,O
comparing,O
the,O
implied,O
fair,O
value,O
of,O
the,O
reporting,O
unit,O
s,O
goodwill,O
to,O
the,O
carrying,O
value,O
of,O
goodwill,O
",",O
with,O
the,O
resulting,O
impairment,O
reflected,O
in,O
operations,O
.,O
,O
The,O
implied,O
fair,O
value,O
is,O
determined,O
in,O
the,O
same,O
manner,O
as,O
the,O
amount,O
of,O
goodwill,O
recognized,O
in,O
a,O
business,O
combination,O
.,O
,O
Estimating,O
the,O
fair,O
value,O
of,O
a,O
reporting,O
unit,O
requires,O
various,O
assumptions,O
including,O
projections,O
of,O
future,O
cash,O
flows,O
",",O
perpetual,O
growth,O
rates,O
and,O
discount,O
rates,O
that,O
reflect,O
the,O
risks,O
associated,O
with,O
achieving,O
those,O
cash,O
flows,O
.,O
,O
The,O
assumptions,O
about,O
future,O
cash,O
flows,O
and,O
growth,O
rates,O
are,O
based,O
on,O
management,O
s,O
assessment,O
of,O
a,O
number,O
of,O
factors,O
including,O
the,O
reporting,O
unit,O
s,O
recent,O
performance,O
against,O
budget,O
",",O
performance,O
in,O
the,O
market,O
that,O
the,O
reporting,O
unit,O
serves,O
",",O
as,O
well,O
as,O
industry,O
and,O
general,O
economic,O
data,O
from,O
third,O
party,O
sources,O
.,O
,O
Discount,O
rate,O
assumptions,O
are,O
based,O
on,O
an,O
assessment,O
of,O
the,O
risk,O
inherent,O
in,O
those,O
future,O
cash,O
flows,O
.,O
,O
Changes,O
to,O
the,O
underlying,O
businesses,O
could,O
affect,O
the,O
future,O
cash,O
flows,O
",",O
which,O
in,O
turn,O
could,O
affect,O
the,O
fair,O
value,O
of,O
the,O
reporting,O
unit,O
.,O
,O
For,O
our,O
most,O
recent,O
annual,O
impairment,O
test,O
as,O
of,O
July,O
1,O
",",O
2010,O
",",O
the,O
discount,O
rates,O
used,O
were,O
10,O
%,O
or,O
11,O
%,O
and,O
perpetual,O
growth,O
rates,O
used,O
were,O
3,O
%,O
or,O
4,O
%,O
",",O
based,O
on,O
the,O
specific,O
characteristics,O
of,O
the,O
reporting,O
unit,O
.,O
,O
Based,O
on,O
the,O
results,O
of,O
our,O
July,O
1,O
",",O
2010,O
step,O
one,O
tests,O
",",O
we,O
determined,O
that,O
the,O
carrying,O
value,O
of,O
our,O
Public,O
Sector,O
North,I-LOCATION
America,I-LOCATION
(,O
PS,O
NA,I-LOCATION
),O
reporting,O
unit,O
",",O
Public,I-LOCATION
Sector,I-LOCATION
United,I-LOCATION
Kingdom,I-LOCATION
(,O
PS,O
UK,I-LOCATION
),O
reporting,O
unit,O
",",O
which,O
has,O
since,O
been,O
sold,O
and,O
is,O
included,O
in,O
discontinued,O
operations,O
",",O
and,O
our,O
Higher,O
Education,O
Managed,O
Services,O
(,O
HE,O
MS,O
),O
reporting,O
unit,O
were,O
in,O
excess,O
of,O
their,O
respective,O
fair,O
values,O
and,O
a,O
step,O
two,O
test,O
was,O
required,O
for,O
each,O
of,O
these,O
reporting,O
units,O
.,O
,O
The,O
primary,O
drivers,O
for,O
the,O
decline,O
in,O
the,O
fair,O
value,O
of,O
the,O
reporting,O
units,O
compared,O
to,O
the,O
prior,O
year,O
is,O
the,O
reduction,O
in,O
the,O
perpetual,O
growth,O
rate,O
assumption,O
used,O
for,O
each,O
of,O
these,O
three,O
reporting,O
units,O
",",O
stemming,O
from,O
the,O
disruption,O
in,O
the,O
global,O
financial,O
markets,O
",",O
particularly,O
the,O
markets,O
in,O
which,O
these,O
three,O
reporting,O
units,O
serve,O
.,O
,O
Furthermore,O
",",O
there,O
was,O
a,O
decline,O
in,O
the,O
cash,O
flow,O
projections,O
for,O
the,O
PS,O
NA,I-LOCATION
and,O
PS,O
UK,I-LOCATION
reporting,O
units,O
",",O
compared,O
to,O
those,O
used,O
in,O
the,O
2009,O
goodwill,O
impairment,O
test,O
",",O
as,O
a,O
result,O
of,O
decline,O
in,O
the,O
overall,O
outlook,O
for,O
these,O
two,O
reporting,O
units,O
.,O
,O
Additionally,O
",",O
the,O
discount,O
rate,O
assumption,O
used,O
in,O
2010,O
for,O
the,O
PS,O
UK,I-LOCATION
reporting,O
unit,O
was,O
higher,O
than,O
the,O
discount,O
rate,O
used,O
in,O
the,O
2009,O
impairment,O
test,O
.,O
,O
A,O
one,O
percentage,O
point,O
increase,O
in,O
the,O
perpetual,O
growth,O
rate,O
or,O
a,O
one,O
percentage,O
point,O
decrease,O
in,O
the,O
discount,O
rate,O
would,O
have,O
resulted,O
in,O
our,O
HE,O
MS,O
reporting,O
unit,O
having,O
a,O
fair,O
value,O
in,O
excess,O
of,O
carrying,O
value,O
and,O
a,O
step,O
two,O
test,O
would,O
not,O
have,O
been,O
required,O
.,O
,O
Prior,O
to,O
completing,O
the,O
step,O
two,O
tests,O
",",O
we,O
first,O
evaluated,O
the,O
long-lived,O
assets,O
",",O
primarily,O
the,O
software,O
",",O
customer,O
base,O
and,O
property,O
and,O
equipment,O
",",O
for,O
impairment,O
.,O
,O
In,O
performing,O
the,O
impairment,O
tests,O
for,O
long-lived,O
assets,O
",",O
we,O
estimated,O
the,O
undiscounted,O
cash,O
flows,O
for,O
the,O
asset,O
groups,O
over,O
the,O
remaining,O
useful,O
lives,O
of,O
the,O
reporting,O
unit,O
s,O
primary,O
asset,O
and,O
compared,O
that,O
to,O
the,O
carrying,O
value,O
of,O
the,O
asset,O
groups,O
.,O
,O
There,O
was,O
no,O
impairment,O
of,O
the,O
long-lived,O
assets,O
.,O
,O
In,O
completing,O
the,O
step,O
two,O
tests,O
to,O
determine,O
the,O
implied,O
fair,O
value,O
of,O
goodwill,O
and,O
therefore,O
the,O
amount,O
of,O
impairment,O
",",O
we,O
first,O
determined,O
the,O
fair,O
value,O
of,O
the,O
tangible,O
and,O
intangible,O
assets,O
and,O
liabilities,O
.,O
,O
Based,O
on,O
the,O
testing,O
performed,O
",",O
we,O
determined,O
that,O
the,O
carrying,O
value,O
of,O
goodwill,O
exceeded,O
its,O
implied,O
fair,O
value,O
for,O
each,O
of,O
the,O
three,O
reporting,O
units,O
and,O
recorded,O
a,O
goodwill,O
impairment,O
charge,O
of,O
$,O
328,O
million,O
",",O
of,O
which,O
$,O
237,O
million,O
is,O
presented,O
in,O
continuing,O
operations,O
and,O
$,O
91,O
million,O
in,O
discontinued,O
operations,O
.,O
,O
We,O
have,O
three,O
other,O
reporting,O
units,O
",",O
whose,O
goodwill,O
balances,O
in,O
the,O
aggregate,O
total,O
$,O
2.1,O
billion,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
where,O
the,O
excess,O
of,O
the,O
estimated,O
fair,O
value,O
over,O
the,O
carrying,O
value,O
of,O
the,O
reporting,O
unit,O
was,O
less,O
than,O
10,O
%,O
of,O
the,O
carrying,O
value,O
as,O
of,O
the,O
July,O
1,O
",",O
2010,O
impairment,O
test,O
.,O
,O
A,O
one,O
percentage,O
point,O
decrease,O
in,O
the,O
perpetual,O
growth,O
rate,O
or,O
a,O
one,O
percentage,O
point,O
increase,O
in,O
the,O
discount,O
rate,O
would,O
cause,O
each,O
of,O
these,O
reporting,O
units,O
to,O
fail,O
the,O
step,O
one,O
test,O
and,O
require,O
a,O
step,O
two,O
analysis,O
",",O
and,O
some,O
or,O
all,O
of,O
this,O
goodwill,O
could,O
be,O
impaired,O
.,O
,O
Furthermore,O
",",O
if,O
any,O
of,O
these,O
units,O
fail,O
to,O
achieve,O
expected,O
performance,O
levels,O
or,O
experience,O
a,O
downturn,O
in,O
the,O
business,O
below,O
current,O
expectations,O
",",O
goodwill,O
could,O
be,O
impaired,O
.,O
,O
Our,O
remaining,O
10,O
reporting,O
units,O
",",O
whose,O
goodwill,O
balances,O
in,O
aggregate,O
total,O
$,O
3.2,O
billion,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
each,O
had,O
estimated,O
fair,O
values,O
in,O
excess,O
of,O
25,O
%,O
more,O
than,O
the,O
carrying,O
value,O
of,O
the,O
reporting,O
unit,O
as,O
of,O
the,O
July,O
1,O
",",O
2010,O
impairment,O
test,O
.,O
,O
During,O
2009,O
",",O
based,O
on,O
an,O
evaluation,O
of,O
year-end,O
results,O
and,O
a,O
reduction,O
in,O
the,O
revenue,O
growth,O
outlook,O
for,O
the,O
AS,O
business,O
",",O
we,O
concluded,O
that,O
AS,O
had,O
experienced,O
a,O
triggering,O
event,O
in,O
its,O
North,I-MISCELLANEOUS
American,I-MISCELLANEOUS
reporting,O
unit,O
(,O
AS,O
NA,I-LOCATION
),O
",",O
one,O
of,O
two,O
reporting,O
units,O
identified,O
in,O
the,O
July,O
1,O
",",O
2009,O
annual,O
impairment,O
test,O
where,O
the,O
excess,O
of,O
the,O
estimated,O
fair,O
value,O
over,O
the,O
carrying,O
value,O
was,O
less,O
than,O
10,O
%,O
.,O
,O
As,O
a,O
result,O
",",O
we,O
determined,O
that,O
the,O
carrying,O
value,O
of,O
AS,O
NA,I-LOCATION
was,O
in,O
excess,O
of,O
its,O
fair,O
value,O
.,O
,O
In,O
completing,O
the,O
step,O
two,O
test,O
",",O
we,O
determined,O
that,O
the,O
carrying,O
value,O
of,O
AS,O
NA,I-LOCATION
s,O
goodwill,O
exceeded,O
its,O
implied,O
fair,O
value,O
by,O
$,O
1.13,O
billion,O
and,O
recorded,O
a,O
goodwill,O
impairment,O
charge,O
for,O
this,O
amount,O
.,O
,O
As,O
a,O
result,O
of,O
the,O
change,O
in,O
the,O
economic,O
environment,O
in,O
the,O
second,O
half,O
of,O
2008,O
and,O
completion,O
of,O
the,O
annual,O
budgeting,O
process,O
",",O
we,O
completed,O
an,O
assessment,O
of,O
the,O
recoverability,O
of,O
our,O
goodwill,O
in,O
December,O
2008,O
.,O
,O
In,O
completing,O
this,O
review,O
",",O
we,O
considered,O
a,O
number,O
of,O
factors,O
",",O
including,O
a,O
comparison,O
of,O
the,O
budgeted,O
revenue,O
and,O
profitability,O
for,O
2009,O
to,O
that,O
included,O
in,O
the,O
annual,O
impairment,O
test,O
conducted,O
as,O
of,O
July,O
1,O
",",O
2008,O
",",O
and,O
the,O
amount,O
by,O
which,O
the,O
fair,O
value,O
of,O
each,O
reporting,O
unit,O
exceeded,O
its,O
carrying,O
value,O
in,O
the,O
2008,O
impairment,O
analysis,O
",",O
as,O
well,O
as,O
qualitative,O
factors,O
such,O
as,O
the,O
overall,O
economy,O
s,O
effect,O
on,O
each,O
reporting,O
unit,O
.,O
,O
Based,O
on,O
this,O
analysis,O
",",O
we,O
concluded,O
that,O
the,O
decline,O
in,O
expected,O
future,O
cash,O
flows,O
in,O
one,O
of,O
our,O
PS,O
reporting,O
units,O
",",O
which,O
has,O
since,O
been,O
sold,O
and,O
is,O
presented,O
in,O
discontinued,O
operations,O
",",O
was,O
sufficient,O
to,O
result,O
in,O
an,O
impairment,O
of,O
goodwill,O
of,O
$,O
128,O
million,O
.,O
,O
Revenue,O
Recognition,O
In,O
the,O
fourth,O
quarter,O
of,O
2010,O
we,O
adopted,O
",",O
retrospective,O
to,O
the,O
beginning,O
of,O
the,O
year,O
",",O
the,O
provisions,O
of,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
No.,O
2009-13,O
",",O
Revenue,I-MISCELLANEOUS
Recognition—Multiple—Deliverable,I-MISCELLANEOUS
Revenue,I-MISCELLANEOUS
Arrangements,I-MISCELLANEOUS
(,O
ASU,I-LEGISLATION/ACT
2009-13,O
),O
and,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
2009-14,O
",",O
Software—Certain,I-MISCELLANEOUS
Revenue,I-MISCELLANEOUS
Arrangements,I-MISCELLANEOUS
that,I-MISCELLANEOUS
Include,I-MISCELLANEOUS
Software,I-MISCELLANEOUS
Elements,I-MISCELLANEOUS
(,O
ASU,I-LEGISLATION/ACT
2009-14,O
),O
.,O
,O
ASU,I-LEGISLATION/ACT
2009-13,O
amended,O
existing,O
accounting,O
guidance,O
for,O
revenue,O
recognition,O
for,O
multiple-element,O
arrangements,O
by,O
establishing,O
a,O
selling,O
price,O
hierarchy,O
that,O
allows,O
for,O
the,O
best,O
estimated,O
selling,O
price,O
(,O
BESP,O
),O
to,O
determine,O
the,O
allocation,O
of,O
arrangement,O
consideration,O
to,O
a,O
deliverable,O
in,O
a,O
multiple,O
element,O
arrangement,O
where,O
neither,O
vendor,O
specific,O
objective,O
evidence,O
(,O
VSOE,O
),O
nor,O
third-party,O
evidence,O
(,O
TPE,O
),O
is,O
available,O
for,O
that,O
deliverable,O
.,O
,O
ASU,I-LEGISLATION/ACT
2009-14,O
modifies,O
the,O
scope,O
of,O
existing,O
software,O
guidance,O
to,O
exclude,O
tangible,O
products,O
containing,O
software,O
components,O
and,O
non-software,O
components,O
that,O
function,O
together,O
to,O
deliver,O
the,O
product,O
s,O
essential,O
functionality,O
.,O
,O
In,O
addition,O
",",O
ASU,I-LEGISLATION/ACT
2009-14,O
provides,O
guidance,O
on,O
how,O
a,O
vendor,O
should,O
allocate,O
arrangement,O
consideration,O
to,O
non-software,O
and,O
software,O
deliverables,O
in,O
an,O
arrangement,O
where,O
the,O
vendor,O
sells,O
tangible,O
products,O
containing,O
software,O
components,O
that,O
are,O
essential,O
in,O
delivering,O
the,O
tangible,O
product,O
s,O
functionality,O
.,O
,O
The,O
impact,O
of,O
our,O
adoption,O
of,O
ASU,I-LEGISLATION/ACT
2009-13,O
and,O
ASU,I-LEGISLATION/ACT
2009-14,O
was,O
not,O
material,O
to,O
our,O
consolidated,O
results,O
of,O
operations,O
for,O
2010,O
.,O
,O
The,O
following,O
criteria,O
must,O
be,O
met,O
in,O
determining,O
whether,O
revenue,O
may,O
be,O
recorded,O
:,O
persuasive,O
evidence,O
of,O
a,O
contract,O
exists,O
;,O
services,O
have,O
been,O
provided,O
;,O
the,O
price,O
is,O
fixed,O
or,O
determinable,O
;,O
and,O
collection,O
is,O
reasonably,O
assured,O
.,O
,O
We,O
generate,O
revenue,O
from,O
the,O
following,O
sources,O
:,O
(,O
1,O
),O
services,O
revenue,O
",",O
which,O
includes,O
revenue,O
from,O
processing,O
services,O
",",O
software,O
maintenance,O
and,O
support,O
",",O
rentals,O
",",O
recovery,O
and,O
managed,O
services,O
",",O
professional,O
services,O
and,O
broker/dealer,O
fees,O
;,O
and,O
(,O
2,O
),O
software,O
license,O
fees,O
",",O
which,O
result,O
from,O
contracts,O
that,O
permit,O
the,O
customer,O
to,O
use,O
a,O
SunGard,O
product,O
at,O
the,O
customer,O
s,O
site,O
.,O
,O
Services,O
revenue,O
is,O
recorded,O
as,O
the,O
services,O
are,O
provided,O
based,O
on,O
the,O
fair,O
value,O
of,O
each,O
element,O
.,O
,O
Most,O
AS,O
services,O
revenue,O
consists,O
of,O
fixed,O
monthly,O
fees,O
based,O
upon,O
the,O
specific,O
computer,O
configuration,O
or,O
business,O
process,O
for,O
which,O
the,O
service,O
is,O
being,O
provided,O
.,O
,O
When,O
recovering,O
from,O
an,O
interruption,O
",",O
customers,O
generally,O
are,O
contractually,O
obligated,O
to,O
pay,O
additional,O
fees,O
",",O
which,O
typically,O
cover,O
the,O
incremental,O
costs,O
of,O
supporting,O
customers,O
during,O
recoveries,O
.,O
,O
FS,O
services,O
revenue,O
includes,O
monthly,O
fees,O
",",O
which,O
may,O
include,O
a,O
fixed,O
minimum,O
fee,O
and/or,O
variable,O
fees,O
based,O
on,O
a,O
measure,O
of,O
volume,O
or,O
activity,O
",",O
such,O
as,O
the,O
number,O
of,O
accounts,O
",",O
trades,O
or,O
transactions,O
",",O
users,O
or,O
the,O
number,O
of,O
hours,O
of,O
service,O
.,O
,O
For,O
fixed-fee,O
professional,O
services,O
contracts,O
",",O
services,O
revenue,O
is,O
recorded,O
based,O
upon,O
proportional,O
performance,O
",",O
measured,O
by,O
the,O
actual,O
number,O
of,O
hours,O
incurred,O
divided,O
by,O
the,O
total,O
estimated,O
number,O
of,O
hours,O
for,O
the,O
project,O
.,O
,O
Changes,O
in,O
the,O
estimated,O
costs,O
or,O
hours,O
to,O
complete,O
the,O
contract,O
and,O
losses,O
",",O
if,O
any,O
",",O
are,O
reflected,O
in,O
the,O
period,O
during,O
which,O
the,O
change,O
or,O
loss,O
becomes,O
known,O
.,O
,O
License,O
fees,O
result,O
from,O
contracts,O
that,O
permit,O
the,O
customer,O
to,O
use,O
a,O
SunGard,O
software,O
product,O
at,O
the,O
customer,O
s,O
site,O
.,O
,O
Generally,O
",",O
these,O
contracts,O
are,O
multiple-element,O
arrangements,O
since,O
they,O
usually,O
provide,O
for,O
professional,O
services,O
and,O
ongoing,O
software,O
maintenance,O
.,O
,O
In,O
these,O
instances,O
",",O
license,O
fees,O
are,O
recognized,O
upon,O
the,O
signing,O
of,O
the,O
contract,O
and,O
delivery,O
of,O
the,O
software,O
if,O
the,O
license,O
fee,O
is,O
fixed,O
or,O
determinable,O
",",O
collection,O
is,O
probable,O
",",O
and,O
there,O
is,O
sufficient,O
vendor,O
specific,O
evidence,O
of,O
the,O
fair,O
value,O
of,O
each,O
undelivered,O
element,O
.,O
,O
When,O
there,O
are,O
significant,O
program,O
modifications,O
or,O
customization,O
",",O
installation,O
",",O
systems,O
integration,O
or,O
related,O
services,O
",",O
the,O
professional,O
services,O
and,O
license,O
revenue,O
are,O
combined,O
and,O
recorded,O
based,O
upon,O
proportional,O
performance,O
",",O
measured,O
in,O
the,O
manner,O
described,O
above,O
.,O
,O
Revenue,O
is,O
recorded,O
when,O
billed,O
when,O
customer,O
payments,O
are,O
extended,O
beyond,O
normal,O
billing,O
terms,O
",",O
or,O
at,O
acceptance,O
when,O
there,O
is,O
significant,O
acceptance,O
",",O
technology,O
or,O
service,O
risk,O
.,O
,O
Revenue,O
also,O
is,O
recorded,O
over,O
the,O
longest,O
service,O
period,O
in,O
those,O
instances,O
where,O
the,O
software,O
is,O
bundled,O
together,O
with,O
post-delivery,O
services,O
and,O
there,O
is,O
not,O
sufficient,O
evidence,O
of,O
the,O
fair,O
value,O
of,O
each,O
undelivered,O
service,O
element,O
.,O
,O
With,O
respect,O
to,O
software,O
related,O
multiple-element,O
arrangements,O
",",O
sufficient,O
evidence,O
of,O
fair,O
value,O
is,O
defined,O
as,O
VSOE,O
.,O
,O
If,O
there,O
is,O
no,O
VSOE,O
of,O
the,O
fair,O
value,O
of,O
the,O
delivered,O
element,O
(,O
which,O
is,O
usually,O
the,O
software,O
),O
but,O
there,O
is,O
VSOE,O
of,O
the,O
fair,O
value,O
of,O
each,O
of,O
the,O
undelivered,O
elements,O
(,O
which,O
are,O
usually,O
maintenance,O
and,O
professional,O
services,O
),O
",",O
then,O
the,O
residual,O
method,O
is,O
used,O
to,O
determine,O
the,O
revenue,O
for,O
the,O
delivered,O
element,O
.,O
,O
The,O
revenue,O
for,O
each,O
of,O
the,O
undelivered,O
elements,O
is,O
set,O
at,O
the,O
fair,O
value,O
of,O
those,O
elements,O
using,O
VSOE,O
of,O
the,O
price,O
paid,O
when,O
each,O
of,O
the,O
undelivered,O
elements,O
is,O
sold,O
separately,O
.,O
,O
The,O
revenue,O
remaining,O
after,O
allocation,O
to,O
the,O
undelivered,O
elements,O
(,O
i.e.,O
",",O
the,O
residual,O
),O
is,O
allocated,O
to,O
the,O
delivered,O
element,O
.,O
,O
VSOE,O
supporting,O
the,O
fair,O
value,O
of,O
maintenance,O
is,O
based,O
on,O
the,O
optional,O
renewal,O
rates,O
for,O
each,O
product,O
and,O
is,O
typically,O
18,O
%,O
to,O
20,O
%,O
of,O
the,O
software,O
license,O
fee,O
per,O
year,O
.,O
,O
VSOE,O
supporting,O
the,O
fair,O
value,O
of,O
professional,O
services,O
is,O
based,O
on,O
the,O
standard,O
daily,O
rates,O
charged,O
when,O
those,O
services,O
are,O
sold,O
separately,O
.,O
,O
In,O
some,O
software,O
related,O
multiple-element,O
arrangements,O
",",O
the,O
services,O
rates,O
are,O
discounted,O
.,O
,O
In,O
these,O
cases,O
",",O
a,O
portion,O
of,O
the,O
software,O
license,O
fee,O
is,O
deferred,O
and,O
recognized,O
as,O
the,O
services,O
are,O
performed,O
based,O
on,O
VSOE,O
of,O
the,O
services,O
.,O
,O
From,O
time,O
to,O
time,O
we,O
enter,O
into,O
arrangements,O
with,O
customers,O
who,O
purchase,O
non-software,O
related,O
services,O
from,O
us,O
at,O
the,O
same,O
time,O
",",O
or,O
within,O
close,O
proximity,O
",",O
of,O
purchasing,O
software,O
(,O
non-software,O
multiple-element,O
arrangements,O
),O
.,O
,O
accounted,O
for,O
as,O
a,O
separate,O
unit,O
of,O
accounting,O
provided,O
the,O
following,O
criteria,O
are,O
met,O
:,O
the,O
delivered,O
services,O
have,O
value,O
to,O
the,O
customer,O
on,O
a,O
standalone,O
basis,O
;,O
and,O
",",O
for,O
an,O
arrangement,O
that,O
includes,O
a,O
general,O
right,O
of,O
return,O
relative,O
to,O
the,O
delivered,O
services,O
",",O
delivery,O
or,O
performance,O
of,O
the,O
undelivered,O
service,O
is,O
considered,O
probable,O
and,O
is,O
substantially,O
controlled,O
by,O
us,O
.,O
,O
Where,O
the,O
criteria,O
for,O
a,O
separate,O
unit,O
of,O
accounting,O
are,O
not,O
met,O
",",O
the,O
deliverable,O
is,O
combined,O
with,O
the,O
undelivered,O
element,O
(,O
s,O
),O
and,O
treated,O
as,O
a,O
single,O
unit,O
of,O
accounting,O
for,O
the,O
purposes,O
of,O
allocation,O
of,O
the,O
arrangement,O
consideration,O
and,O
revenue,O
recognition,O
.,O
,O
For,O
our,O
non-software,O
multiple-element,O
arrangements,O
",",O
we,O
allocate,O
revenue,O
to,O
each,O
element,O
based,O
on,O
a,O
selling,O
price,O
hierarchy,O
at,O
the,O
arrangement,O
inception,O
.,O
,O
During,O
2008,O
and,O
2009,O
the,O
fair,O
value,O
of,O
each,O
undelivered,O
element,O
was,O
determined,O
using,O
VSOE,O
",",O
and,O
the,O
residual,O
method,O
was,O
used,O
to,O
assign,O
a,O
fair,O
value,O
to,O
the,O
delivered,O
element,O
if,O
its,O
VSOE,O
was,O
not,O
available,O
.,O
,O
Under,O
the,O
new,O
rules,O
for,O
2010,O
described,O
above,O
",",O
the,O
selling,O
price,O
for,O
each,O
element,O
is,O
based,O
upon,O
the,O
following,O
selling,O
price,O
hierarchy,O
:,O
VSOE,O
then,O
TPE,O
then,O
BESP,O
.,O
,O
The,O
total,O
arrangement,O
consideration,O
is,O
allocated,O
to,O
each,O
separate,O
unit,O
of,O
accounting,O
for,O
each,O
of,O
the,O
non-software,O
deliverables,O
using,O
the,O
relative,O
selling,O
prices,O
of,O
each,O
unit,O
based,O
on,O
this,O
hierarchy,O
.,O
,O
We,O
limit,O
the,O
amount,O
of,O
revenue,O
recognized,O
for,O
delivered,O
elements,O
to,O
an,O
amount,O
that,O
is,O
not,O
contingent,O
upon,O
future,O
delivery,O
of,O
additional,O
products,O
or,O
services,O
or,O
meeting,O
of,O
any,O
specified,O
performance,O
conditions,O
.,O
,O
Since,O
under,O
the,O
new,O
hierarchy,O
a,O
fair,O
value,O
for,O
each,O
element,O
will,O
be,O
determinable,O
",",O
the,O
residual,O
method,O
is,O
no,O
longer,O
used,O
.,O
,O
To,O
determine,O
the,O
selling,O
price,O
in,O
non-software,O
multiple-element,O
arrangements,O
",",O
we,O
establish,O
VSOE,O
of,O
the,O
selling,O
price,O
using,O
the,O
price,O
charged,O
for,O
a,O
deliverable,O
when,O
sold,O
separately,O
.,O
,O
Where,O
VSOE,O
does,O
not,O
exist,O
",",O
TPE,O
is,O
established,O
by,O
evaluating,O
similar,O
competitor,O
products,O
or,O
services,O
in,O
standalone,O
arrangements,O
with,O
similarly,O
situated,O
customers,O
.,O
,O
If,O
we,O
are,O
unable,O
to,O
determine,O
the,O
selling,O
price,O
because,O
VSOE,O
or,O
TPE,O
doesn,O
t,O
exist,O
",",O
we,O
determine,O
BESP,O
for,O
the,O
purposes,O
of,O
allocating,O
the,O
arrangement,O
by,O
considering,O
pricing,O
practices,O
",",O
margin,O
",",O
competition,O
",",O
and,O
geographies,O
in,O
which,O
we,O
offer,O
our,O
products,O
and,O
services,O
.,O
,O
Unbilled,O
receivables,O
are,O
created,O
when,O
services,O
are,O
performed,O
or,O
software,O
is,O
delivered,O
and,O
revenue,O
is,O
recognized,O
in,O
advance,O
of,O
billings,O
.,O
,O
Deferred,O
revenue,O
is,O
created,O
when,O
billing,O
occurs,O
in,O
advance,O
of,O
performing,O
services,O
or,O
when,O
all,O
revenue,O
recognition,O
criteria,O
have,O
not,O
been,O
met,O
.,O
,O
We,O
believe,O
that,O
our,O
revenue,O
recognition,O
practices,O
comply,O
with,O
the,O
complex,O
and,O
evolving,O
rules,O
governing,O
revenue,O
recognition,O
.,O
,O
Future,O
interpretations,O
of,O
existing,O
accounting,O
standards,O
",",O
new,O
standards,O
or,O
changes,O
in,O
our,O
business,O
practices,O
could,O
result,O
in,O
changes,O
in,O
our,O
revenue,O
recognition,O
accounting,O
policies,O
that,O
could,O
have,O
a,O
material,O
effect,O
on,O
our,O
consolidated,O
financial,O
results,O
.,O
,O
Accounting,O
for,O
Income,O
Taxes,O
We,O
recognize,O
deferred,O
income,O
tax,O
assets,O
and,O
liabilities,O
based,O
upon,O
the,O
expected,O
future,O
tax,O
consequences,O
of,O
events,O
that,O
have,O
been,O
recognized,O
in,O
our,O
financial,O
statements,O
or,O
tax,O
returns,O
.,O
,O
Deferred,O
income,O
tax,O
assets,O
and,O
liabilities,O
are,O
calculated,O
based,O
on,O
the,O
difference,O
between,O
the,O
financial,O
and,O
tax,O
bases,O
of,O
assets,O
and,O
liabilities,O
using,O
the,O
currently,O
enacted,O
income,O
tax,O
rates,O
in,O
effect,O
during,O
the,O
years,O
in,O
which,O
the,O
differences,O
are,O
expected,O
to,O
reverse,O
.,O
,O
Valuation,O
allowances,O
are,O
recorded,O
to,O
reduce,O
deferred,O
tax,O
assets,O
when,O
it,O
is,O
more,O
likely,O
than,O
not,O
that,O
a,O
tax,O
benefit,O
will,O
not,O
be,O
realized,O
.,O
,O
Deferred,O
tax,O
assets,O
for,O
which,O
no,O
valuation,O
allowance,O
is,O
recorded,O
may,O
not,O
be,O
realized,O
upon,O
changes,O
in,O
facts,O
and,O
circumstances,O
.,O
,O
Tax,O
benefits,O
related,O
to,O
uncertain,O
tax,O
positions,O
taken,O
or,O
expected,O
to,O
be,O
taken,O
on,O
a,O
tax,O
return,O
are,O
recorded,O
when,O
such,O
benefits,O
meet,O
a,O
more,O
likely,O
than,O
not,O
threshold,O
.,O
,O
benefits,O
are,O
recorded,O
when,O
a,O
tax,O
position,O
has,O
been,O
effectively,O
settled,O
",",O
which,O
means,O
that,O
the,O
appropriate,O
taxing,O
authority,O
has,O
completed,O
their,O
examination,O
even,O
though,O
the,O
statute,O
of,O
limitations,O
remains,O
open,O
",",O
or,O
the,O
statute,O
of,O
limitation,O
expires,O
.,O
,O
Considerable,O
judgment,O
is,O
required,O
in,O
assessing,O
and,O
estimating,O
these,O
amounts,O
and,O
differences,O
between,O
the,O
actual,O
outcome,O
of,O
these,O
future,O
tax,O
consequences,O
and,O
our,O
estimates,O
could,O
have,O
a,O
material,O
effect,O
on,O
our,O
consolidated,O
financial,O
results,O
.,O
,O
Accounting,O
for,O
Stock-Based,O
Compensation,O
Stock-based,O
compensation,O
cost,O
is,O
measured,O
at,O
the,O
grant,O
date,O
based,O
on,O
the,O
fair,O
value,O
of,O
the,O
award,O
and,O
is,O
recognized,O
as,O
expense,O
over,O
the,O
appropriate,O
service,O
period,O
.,O
,O
Fair,O
value,O
for,O
stock,O
options,O
is,O
computed,O
using,O
the,O
Black-Scholes,I-MISCELLANEOUS
pricing,I-MISCELLANEOUS
model,I-MISCELLANEOUS
.,O
,O
Determining,O
the,O
fair,O
value,O
of,O
stock-based,O
awards,O
requires,O
considerable,O
judgment,O
",",O
including,O
estimating,O
the,O
expected,O
term,O
of,O
stock,O
options,O
",",O
expected,O
volatility,O
of,O
our,O
stock,O
price,O
",",O
and,O
the,O
number,O
of,O
awards,O
expected,O
to,O
be,O
forfeited,O
.,O
,O
In,O
addition,O
",",O
for,O
stock-based,O
awards,O
where,O
vesting,O
is,O
dependent,O
upon,O
achieving,O
certain,O
operating,O
performance,O
goals,O
",",O
we,O
estimate,O
the,O
likelihood,O
of,O
achieving,O
the,O
performance,O
goals,O
.,O
,O
Differences,O
between,O
actual,O
results,O
and,O
these,O
estimates,O
could,O
have,O
a,O
material,O
effect,O
on,O
our,O
consolidated,O
financial,O
results,O
.,O
,O
A,O
deferred,O
income,O
tax,O
asset,O
is,O
recorded,O
over,O
the,O
vesting,O
period,O
as,O
stock,O
compensation,O
expense,O
is,O
recognized,O
.,O
,O
Our,O
ability,O
to,O
use,O
the,O
deferred,O
tax,O
asset,O
is,O
ultimately,O
based,O
on,O
the,O
actual,O
value,O
of,O
the,O
stock,O
option,O
upon,O
exercise,O
or,O
restricted,O
stock,O
unit,O
upon,O
distribution,O
.,O
,O
If,O
the,O
actual,O
value,O
is,O
lower,O
than,O
the,O
fair,O
value,O
determined,O
on,O
the,O
date,O
of,O
grant,O
",",O
then,O
there,O
could,O
be,O
an,O
income,O
tax,O
expense,O
for,O
the,O
portion,O
of,O
the,O
deferred,O
tax,O
asset,O
that,O
can,O
not,O
be,O
used,O
",",O
which,O
could,O
have,O
a,O
material,O
effect,O
on,O
our,O
consolidated,O
financial,O
results,O
.,O
,O
Results,O
of,O
Operations,O
We,O
evaluate,O
performance,O
of,O
our,O
segments,O
based,O
on,O
operating,O
results,O
before,O
interest,O
",",O
income,O
taxes,O
",",O
goodwill,O
impairment,O
charges,O
",",O
amortization,O
of,O
acquisition-related,O
intangible,O
assets,O
",",O
stock,O
compensation,O
and,O
certain,O
other,O
costs,O
(,O
see,O
Note,O
12,O
of,O
Notes,O
to,O
Consolidated,O
Financial,O
Statements,O
),O
.,O
,O
During,O
2010,O
",",O
we,O
sold,O
our,O
PS,O
UK,I-LOCATION
operation,O
which,O
is,O
presented,O
as,O
discontinued,O
operations,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
",",O
for,O
the,O
periods,O
indicated,O
",",O
certain,O
amounts,O
included,O
in,O
our,O
Consolidated,O
Statements,O
of,O
Operations,O
and,O
the,O
relative,O
percentage,O
that,O
those,O
amounts,O
represent,O
to,O
consolidated,O
revenue,O
(,O
unless,O
otherwise,O
indicated,O
),O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
",",O
for,O
the,O
periods,O
indicated,O
",",O
certain,O
supplemental,O
revenue,O
data,O
and,O
the,O
relative,O
percentage,O
that,O
those,O
amounts,O
represent,O
to,O
total,O
revenue,O
.,O
,O
Results,O
of,O
operations,O
",",O
excluding,O
broker/dealer,O
business,O
We,O
assess,O
our,O
performance,O
both,O
with,O
and,O
without,O
one,O
of,O
our,O
trading,O
systems,O
businesses,O
",",O
a,O
broker/dealer,O
with,O
an,O
inherently,O
lower,O
margin,O
than,O
our,O
other,O
software,O
and,O
processing,O
businesses,O
",",O
whose,O
performance,O
is,O
a,O
function,O
of,O
market,O
volatility,O
and,O
customer,O
mix,O
(,O
the,O
Broker/Dealer,O
),O
.,O
,O
By,O
excluding,O
the,O
Broker/Dealer,O
s,O
results,O
",",O
we,O
are,O
able,O
to,O
perform,O
additional,O
analysis,O
of,O
our,O
business,O
which,O
we,O
believe,O
is,O
important,O
in,O
understanding,O
the,O
results,O
of,O
both,O
the,O
Broker/Dealer,O
and,O
the,O
software,O
and,O
processing,O
businesses,O
.,O
,O
We,O
use,O
the,O
information,O
excluding,O
the,O
Broker/Dealer,O
business,O
for,O
a,O
variety,O
of,O
purposes,O
and,O
we,O
regularly,O
communicate,O
our,O
results,O
excluding,O
this,O
business,O
to,O
our,O
board,O
of,O
directors,O
.,O
,O
The,O
following,O
is,O
a,O
reconciliation,O
of,O
revenue,O
excluding,O
the,O
Broker/Dealer,O
and,O
operating,O
income,O
(,O
loss,O
),O
excluding,O
the,O
Broker/Dealer,O
",",O
which,O
are,O
each,O
non-GAAP,I-MISCELLANEOUS
measures,O
",",O
to,O
the,O
corresponding,O
reported,O
GAAP,I-LEGISLATION/ACT
measures,O
that,O
we,O
believe,O
to,O
be,O
most,O
directly,O
comparable,O
for,O
each,O
of,O
2008,O
",",O
2009,O
and,O
2010,O
(,O
in,O
millions,O
),O
.,O
,O
While,O
these,O
adjusted,O
results,O
are,O
useful,O
for,O
analysis,O
purposes,O
",",O
they,O
should,O
not,O
be,O
considered,O
as,O
an,O
alternative,O
to,O
our,O
reported,O
GAAP,I-LEGISLATION/ACT
results,O
.,O
,O
Year,O
Ended,O
December,O
31,O
",",O
2010,O
Compared,O
to,O
Year,O
Ended,O
December,O
31,O
",",O
2009,O
Operating,O
Income,O
:,O
Our,O
total,O
operating,O
margin,O
increased,O
to,O
5,O
%,O
in,O
2010,O
from,O
-11,O
%,O
in,O
2009,O
due,O
to,O
$,O
237,O
million,O
of,O
goodwill,O
impairment,O
charges,O
in,O
2010,O
and,O
$,O
1.13,O
billion,O
of,O
goodwill,O
impairment,O
charges,O
in,O
2009,O
.,O
,O
In,O
addition,O
",",O
the,O
operating,O
margin,O
was,O
also,O
impacted,O
by,O
a,O
$,O
58,O
million,O
increase,O
in,O
license,O
fees,O
",",O
the,O
impact,O
from,O
the,O
Broker/Dealer,O
and,O
the,O
decline,O
in,O
AS,O
margin,O
performance,O
.,O
,O
Financial,O
Systems,O
:,O
The,O
FS,O
operating,O
margin,O
increased,O
to,O
22,O
%,O
in,O
2010,O
from,O
20,O
%,O
in,O
2009,O
.,O
,O
The,O
operating,O
margin,O
improvement,O
is,O
mainly,O
due,O
to,O
a,O
$,O
63,O
million,O
increase,O
in,O
software,O
license,O
fees,O
",",O
including,O
the,O
recognition,O
of,O
$,O
32,O
million,O
of,O
license,O
fee,O
backlog,O
that,O
existed,O
at,O
December,O
31,O
",",O
2009,O
.,O
,O
Margin,O
improvement,O
from,O
the,O
reduced,O
contribution,O
from,O
the,O
Broker/Dealer,O
and,O
reduced,O
facilities,O
expense,O
was,O
mostly,O
offset,O
by,O
increased,O
employment-related,O
and,O
other,O
operating,O
expenses,O
.,O
,O
The,O
impact,O
of,O
the,O
decrease,O
in,O
the,O
Broker/Dealer,O
s,O
revenue,O
and,O
operating,O
income,O
on,O
FS,O
operating,O
margin,O
is,O
an,O
increase,O
in,O
2010,O
of,O
one,O
margin,O
point,O
.,O
,O
The,O
most,O
important,O
factors,O
affecting,O
the,O
FS,O
operating,O
margin,O
are,O
:,O
,O
Higher,O
Education,O
:,O
The,O
HE,O
operating,O
margin,O
was,O
26,O
%,O
in,O
each,O
of,O
2010,O
and,O
2009,O
.,O
,O
Although,O
revenue,O
decreased,O
$,O
23,O
million,O
",",O
we,O
maintained,O
the,O
operating,O
margin,O
primarily,O
by,O
decreasing,O
employment-related,O
expense,O
in,O
managed,O
services,O
.,O
,O
The,O
most,O
important,O
factors,O
affecting,O
the,O
HE,O
operating,O
margin,O
are,O
:,O
,O
Public,O
Sector,O
:,O
The,O
PS,O
operating,O
margin,O
was,O
27,O
%,O
and,O
28,O
%,O
in,O
2010,O
and,O
2009,O
",",O
respectively,O
.,O
,O
The,O
operating,O
margin,O
decrease,O
is,O
due,O
primarily,O
to,O
a,O
$,O
5,O
million,O
decrease,O
in,O
software,O
license,O
fees,O
",",O
partially,O
offset,O
by,O
decreased,O
employment-related,O
expense,O
.,O
,O
The,O
most,O
important,O
factors,O
affecting,O
the,O
PS,O
operating,O
margin,O
are,O
:,O
,O
Availability,O
Services,O
:,O
The,O
AS,O
operating,O
margin,O
was,O
22,O
%,O
in,O
2010,O
compared,O
to,O
25,O
%,O
in,O
2009,O
.,O
,O
The,O
lower,O
margin,O
was,O
driven,O
by,O
the,O
lower,O
mix,O
of,O
revenue,O
from,O
higher,O
margin,O
recovery,O
services,O
",",O
which,O
typically,O
use,O
shared,O
resources,O
",",O
and,O
an,O
absolute,O
decline,O
in,O
recovery,O
services,O
margin,O
due,O
mainly,O
to,O
the,O
lower,O
revenue,O
on,O
a,O
relatively,O
stable,O
fixed,O
cost,O
base,O
and,O
costs,O
related,O
to,O
eliminating,O
redundant,O
network,O
capacity,O
resulting,O
from,O
the,O
redesign,O
and,O
re-architecture,O
of,O
our,O
data,O
communications,O
network,O
.,O
,O
Recovery,O
services,O
cost,O
savings,O
initiatives,O
also,O
produced,O
expense,O
savings,O
in,O
2010,O
including,O
lower,O
facilities,O
and,O
employment-related,O
costs,O
.,O
,O
In,O
addition,O
",",O
AS,O
operating,O
margin,O
was,O
impacted,O
by,O
an,O
increase,O
in,O
revenue,O
from,O
lower,O
margin,O
managed,O
services,O
",",O
which,O
use,O
dedicated,O
resources,O
",",O
and,O
an,O
absolute,O
decline,O
in,O
managed,O
services,O
margin,O
due,O
mainly,O
to,O
higher,O
facilities,O
costs,O
",",O
primarily,O
utility,O
costs,O
related,O
to,O
cooling,O
due,O
to,O
warmer,O
summer,O
temperatures,O
and,O
the,O
addition,O
of,O
a,O
new,O
facility,O
",",O
increased,O
employment-related,O
and,O
temporary,O
staffing,O
costs,O
due,O
to,O
an,O
increased,O
focus,O
on,O
service,O
delivery,O
",",O
and,O
increased,O
costs,O
associated,O
with,O
the,O
redesign,O
and,O
re-architecture,O
of,O
our,O
data,O
communications,O
network,O
and,O
natural,O
demand,O
resulting,O
from,O
revenue,O
growth,O
.,O
,O
Also,O
impacting,O
the,O
change,O
in,O
the,O
margin,O
was,O
a,O
decrease,O
in,O
other,O
administrative,O
expenses,O
in,O
North,I-LOCATION
America,I-LOCATION
",",O
including,O
reduced,O
bad,O
debt,O
expense,O
resulting,O
from,O
improved,O
collections,O
and,O
lower,O
professional,O
services,O
expenses,O
",",O
and,O
the,O
decrease,O
in,O
the,O
margin,O
in,O
our,O
European,I-MISCELLANEOUS
business,O
mostly,O
due,O
to,O
an,O
increase,O
in,O
employment-related,O
costs,O
and,O
depreciation,O
and,O
amortization,O
",",O
partially,O
offset,O
by,O
reduced,O
bad,O
debt,O
expense,O
.,O
,O
The,O
most,O
important,O
factors,O
affecting,O
the,O
AS,O
operating,O
margin,O
are,O
:,O
,O
The,O
margin,O
rate,O
of,O
the,O
AS,O
European,I-MISCELLANEOUS
business,O
is,O
lower,O
than,O
the,O
margin,O
rate,O
of,O
the,O
North,I-MISCELLANEOUS
American,I-MISCELLANEOUS
business,O
due,O
primarily,O
to,O
a,O
higher,O
concentration,O
of,O
dedicated,O
resources,O
in,O
European,I-MISCELLANEOUS
recovery,O
services,O
.,O
,O
However,O
",",O
the,O
differential,O
in,O
the,O
margins,O
has,O
narrowed,O
over,O
the,O
past,O
several,O
years,O
because,O
of,O
the,O
growing,O
proportion,O
of,O
managed,O
services,O
in,O
North,I-LOCATION
America,I-LOCATION
.,O
,O
Revenue,O
:,O
Total,O
revenue,O
was,O
$,O
4.99,O
billion,O
in,O
2010,O
compared,O
to,O
$,O
5.33,O
billion,O
in,O
2009,O
",",O
a,O
decrease,O
of,O
6,O
%,O
.,O
,O
Organic,O
revenue,O
decreased,O
7,O
%,O
primarily,O
due,O
to,O
a,O
decline,O
in,O
the,O
Broker/Dealer,O
s,O
revenue,O
of,O
$,O
403,O
million,O
",",O
comprised,O
of,O
$,O
367,O
million,O
of,O
broker/dealer,O
fees,O
and,O
$,O
36,O
million,O
of,O
reimbursed,O
expenses,O
",",O
partially,O
offset,O
by,O
a,O
$,O
58,O
million,O
increase,O
in,O
software,O
license,O
fees,O
.,O
,O
Excluding,O
the,O
Broker/Dealer,O
",",O
organic,O
revenue,O
increased,O
1,O
%,O
.,O
,O
of,O
currency,O
exchange,O
rates,O
",",O
and,O
excludes,O
revenue,O
from,O
discontinued,O
operations,O
in,O
all,O
periods,O
presented,O
.,O
,O
When,O
assessing,O
our,O
financial,O
results,O
",",O
we,O
focus,O
on,O
growth,O
in,O
organic,O
revenue,O
because,O
overall,O
revenue,O
growth,O
is,O
affected,O
by,O
the,O
timing,O
and,O
magnitude,O
of,O
acquisitions,O
",",O
dispositions,O
and,O
by,O
currency,O
exchange,O
rates,O
.,O
,O
Our,O
revenue,O
is,O
highly,O
diversified,O
by,O
customer,O
and,O
product,O
.,O
,O
During,O
each,O
of,O
the,O
past,O
three,O
fiscal,O
years,O
",",O
no,O
single,O
customer,O
has,O
accounted,O
for,O
more,O
than,O
10,O
%,O
of,O
total,O
revenue,O
.,O
,O
On,O
average,O
for,O
the,O
past,O
three,O
fiscal,O
years,O
",",O
services,O
revenue,O
has,O
been,O
approximately,O
90,O
%,O
of,O
total,O
revenue,O
.,O
,O
About,O
70,O
%,O
of,O
services,O
revenue,O
is,O
highly,O
recurring,O
as,O
a,O
result,O
of,O
multi,O
year,O
contracts,O
and,O
is,O
generated,O
from,O
(,O
1,O
),O
software-related,O
services,O
including,O
software,O
maintenance,O
and,O
support,O
",",O
processing,O
and,O
rentals,O
;,O
and,O
(,O
2,O
),O
recovery,O
and,O
managed,O
services,O
.,O
,O
The,O
remaining,O
services,O
revenue,O
includes,O
(,O
1,O
),O
professional,O
services,O
",",O
which,O
are,O
recurring,O
in,O
nature,O
as,O
a,O
result,O
of,O
long-term,O
customer,O
relationships,O
;,O
and,O
(,O
2,O
),O
broker/dealer,O
fees,O
",",O
which,O
are,O
largely,O
correlated,O
with,O
trading,O
volumes,O
.,O
,O
Services,O
revenue,O
decreased,O
to,O
$,O
4.49,O
billion,O
from,O
$,O
4.84,O
billion,O
",",O
representing,O
approximately,O
90,O
%,O
of,O
total,O
revenue,O
in,O
2010,O
compared,O
to,O
91,O
%,O
in,O
2009,O
.,O
,O
The,O
revenue,O
decrease,O
was,O
mainly,O
due,O
to,O
the,O
$,O
367,O
million,O
decrease,O
in,O
broker/dealer,O
fees,O
noted,O
.,O
,O
Professional,O
services,O
revenue,O
was,O
$,O
791,O
million,O
and,O
$,O
770,O
million,O
in,O
2010,O
and,O
2009,O
",",O
respectively,O
.,O
,O
The,O
change,O
was,O
due,O
to,O
an,O
increase,O
in,O
FS,O
",",O
partially,O
offset,O
by,O
decreases,O
in,O
AS,O
and,O
HE,O
.,O
,O
Revenue,O
from,O
total,O
broker/dealer,O
fees,O
was,O
$,O
217,O
million,O
and,O
$,O
570,O
million,O
in,O
2010,O
and,O
2009,O
",",O
respectively,O
.,O
,O
Revenue,O
from,O
license,O
and,O
resale,O
fees,O
was,O
$,O
380,O
million,O
and,O
$,O
324,O
million,O
for,O
2010,O
and,O
2009,O
",",O
respectively,O
",",O
and,O
includes,O
software,O
license,O
revenue,O
of,O
$,O
291,O
million,O
and,O
$,O
233,O
million,O
",",O
respectively,O
.,O
,O
SunGard,O
ended,O
2009,O
with,O
a,O
software,O
license,O
backlog,O
of,O
$,O
35,O
million,O
in,O
FS,O
",",O
which,O
consisted,O
of,O
signed,O
contracts,O
for,O
licensed,O
software,O
that,O
(,O
i,O
),O
at,O
our,O
election,O
",",O
was,O
not,O
shipped,O
to,O
the,O
customer,O
until,O
2010,O
",",O
(,O
ii,O
),O
we,O
voluntarily,O
extended,O
payment,O
terms,O
or,O
(,O
iii,O
),O
included,O
products,O
or,O
services,O
not,O
yet,O
deliverable,O
and,O
from,O
which,O
the,O
license,O
element,O
can,O
not,O
be,O
separated,O
.,O
,O
Of,O
this,O
backlog,O
",",O
$,O
32,O
million,O
was,O
recognized,O
in,O
2010,O
.,O
,O
Financial,O
Systems,O
:,O
FS,O
revenue,O
was,O
$,O
2.81,O
billion,O
in,O
2010,O
compared,O
to,O
$,O
3.07,O
billion,O
in,O
2009,O
",",O
a,O
decrease,O
of,O
9,O
%,O
.,O
,O
Organic,O
revenue,O
decreased,O
by,O
approximately,O
9,O
%,O
in,O
2010,O
.,O
,O
Excluding,O
the,O
Broker/Dealer,O
business,O
",",O
organic,O
revenue,O
increased,O
6,O
%,O
.,O
,O
The,O
6,O
%,O
increase,O
is,O
primarily,O
driven,O
by,O
increases,O
in,O
software,O
license,O
",",O
professional,O
services,O
and,O
processing,O
revenue,O
.,O
,O
Professional,O
services,O
revenue,O
increased,O
$,O
50,O
million,O
",",O
or,O
9,O
%,O
",",O
to,O
$,O
583,O
million,O
due,O
to,O
a,O
general,O
increase,O
in,O
demand,O
from,O
existing,O
clients,O
as,O
well,O
as,O
new,O
projects,O
.,O
,O
Processing,O
revenue,O
increased,O
$,O
22,O
million,O
",",O
or,O
3,O
%,O
",",O
mainly,O
driven,O
by,O
increases,O
in,O
transaction,O
volumes,O
and,O
additional,O
hosted,O
services,O
.,O
,O
Revenue,O
from,O
license,O
and,O
resale,O
fees,O
included,O
software,O
license,O
revenue,O
of,O
$,O
237,O
million,O
",",O
an,O
increase,O
of,O
$,O
63,O
million,O
compared,O
to,O
2009,O
",",O
reflecting,O
the,O
recognition,O
in,O
2010,O
of,O
$,O
32,O
million,O
that,O
was,O
in,O
backlog,O
at,O
December,O
31,O
",",O
2009,O
and,O
improved,O
economic,O
conditions,O
in,O
2010,O
.,O
,O
Higher,O
Education,O
:,O
HE,O
revenue,O
was,O
$,O
571,O
million,O
in,O
2010,O
compared,O
to,O
$,O
594,O
million,O
in,O
2009,O
.,O
,O
The,O
$,O
23,O
million,O
",",O
or,O
4,O
%,O
",",O
decrease,O
was,O
all,O
organic,O
and,O
primarily,O
due,O
to,O
decreases,O
in,O
managed,O
services,O
revenue,O
mainly,O
resulting,O
from,O
customers,O
bringing,O
their,O
IT,O
solutions,O
in-house,O
",",O
and,O
professional,O
services,O
mainly,O
due,O
to,O
fewer,O
and,O
smaller-sized,O
customer,O
installations,O
",",O
partially,O
offset,O
by,O
an,O
increase,O
in,O
software,O
support,O
revenue,O
due,O
to,O
sales,O
of,O
new,O
licenses,O
in,O
the,O
past,O
12,O
months,O
and,O
annual,O
rate,O
increases,O
.,O
,O
Professional,O
services,O
revenue,O
was,O
$,O
128,O
million,O
in,O
2010,O
compared,O
to,O
$,O
141,O
million,O
in,O
2009,O
.,O
,O
Software,O
license,O
fees,O
increased,O
$,O
1,O
million,O
to,O
$,O
39,O
million,O
in,O
2010,O
from,O
$,O
38,O
million,O
in,O
2009,O
.,O
,O
HE,O
includes,O
our,O
K-12,O
operations,O
for,O
all,O
periods,O
presented,O
.,O
,O
Public,O
Sector,O
:,O
PS,O
revenue,O
was,O
$,O
145,O
million,O
in,O
2010,O
compared,O
to,O
$,O
153,O
million,O
in,O
2009,O
.,O
,O
The,O
$,O
8,O
million,O
",",O
or,O
5,O
%,O
",",O
decrease,O
was,O
all,O
organic,O
and,O
primarily,O
due,O
to,O
a,O
$,O
5,O
million,O
decrease,O
in,O
software,O
license,O
fees,O
.,O
,O
Revenue,O
from,O
license,O
and,O
resale,O
fees,O
included,O
software,O
license,O
fees,O
of,O
$,O
11,O
million,O
and,O
$,O
16,O
million,O
in,O
2010,O
and,O
2009,O
",",O
respectively,O
.,O
,O
Availability,O
Services,O
:,O
AS,O
revenue,O
was,O
$,O
1.47,O
billion,O
in,O
2010,O
compared,O
to,O
$,O
1.52,O
billion,O
in,O
2009,O
",",O
a,O
3,O
%,O
decrease,O
overall,O
and,O
organically,O
.,O
,O
In,O
North,I-LOCATION
America,I-LOCATION
",",O
which,O
accounts,O
for,O
approximately,O
80,O
%,O
of,O
our,O
AS,O
business,O
",",O
revenue,O
decreased,O
4,O
%,O
overall,O
and,O
4.5,O
%,O
organically,O
where,O
decreases,O
in,O
recovery,O
services,O
and,O
professional,O
services,O
revenue,O
exceeded,O
growth,O
in,O
managed,O
services,O
revenue,O
.,O
,O
Revenue,O
in,O
Europe,I-LOCATION
",",O
primarily,O
from,O
our,O
U.K,I-LOCATION
.,I-LOCATION
,O
operations,O
",",O
increased,O
0.5,O
%,O
",",O
but,O
increased,O
2,O
%,O
organically,O
",",O
where,O
increases,O
in,O
managed,O
services,O
revenue,O
were,O
partially,O
offset,O
by,O
decreases,O
in,O
recovery,O
services,O
revenue,O
.,O
,O
Most,O
of,O
our,O
recovery,O
services,O
revenue,O
is,O
derived,O
from,O
tape-based,O
solutions,O
.,O
,O
Recovery,O
services,O
has,O
been,O
shifting,O
from,O
tape-based,O
solutions,O
to,O
disk-based,O
and,O
managed,O
service,O
solutions,O
.,O
,O
We,O
expect,O
this,O
shift,O
to,O
continue,O
in,O
the,O
future,O
.,O
,O
Costs,O
and,O
Expenses,O
:,O
Total,O
costs,O
decreased,O
to,O
95,O
%,O
of,O
revenue,O
in,O
2010,O
from,O
111,O
%,O
of,O
2009,O
revenue,O
.,O
,O
Excluding,O
the,O
goodwill,O
impairment,O
charges,O
of,O
$,O
237,O
million,O
in,O
2010,O
and,O
$,O
1.13,O
billion,O
in,O
2009,O
and,O
the,O
Broker/Dealer,O
s,O
total,O
costs,O
of,O
$,O
207,O
million,O
in,O
2010,O
and,O
$,O
556,O
million,O
in,O
2009,O
",",O
total,O
costs,O
as,O
a,O
percentage,O
of,O
total,O
revenue,O
(,O
also,O
excluding,O
the,O
Broker/Dealer,O
),O
was,O
unchanged,O
at,O
89,O
%,O
.,O
,O
Cost,O
of,O
sales,O
and,O
direct,O
operating,O
expenses,O
as,O
a,O
percentage,O
of,O
total,O
revenue,O
was,O
44,O
%,O
in,O
2010,O
and,O
48,O
%,O
in,O
2009,O
",",O
largely,O
the,O
result,O
of,O
the,O
lower,O
volumes,O
of,O
the,O
Broker/Dealer,O
.,O
,O
Excluding,O
the,O
Broker/Dealer,O
s,O
expenses,O
of,O
$,O
189,O
million,O
in,O
2010,O
and,O
$,O
534,O
million,O
in,O
2009,O
",",O
cost,O
of,O
sales,O
and,O
direct,O
operating,O
expenses,O
as,O
a,O
percentage,O
of,O
total,O
revenue,O
(,O
also,O
excluding,O
the,O
Broker/Dealer,O
),O
was,O
unchanged,O
at,O
42,O
%,O
.,O
,O
Also,O
impacting,O
the,O
period,O
were,O
lower,O
employee-related,O
expenses,O
in,O
our,O
software,O
and,O
processing,O
businesses,O
",",O
mostly,O
offset,O
by,O
higher,O
AS,O
facilities,O
and,O
data,O
communications,O
network,O
costs,O
associated,O
with,O
the,O
redesign,O
and,O
re-architecture,O
of,O
our,O
data,O
communications,O
network,O
.,O
,O
Sales,O
",",O
marketing,O
and,O
administration,O
expenses,O
as,O
a,O
percentage,O
of,O
total,O
revenue,O
was,O
23,O
%,O
and,O
20,O
%,O
in,O
2010,O
and,O
2009,O
",",O
respectively,O
.,O
,O
Excluding,O
the,O
Broker/Dealer,O
s,O
expenses,O
of,O
$,O
12,O
million,O
in,O
2010,O
and,O
$,O
13,O
million,O
in,O
2009,O
",",O
sales,O
",",O
marketing,O
and,O
administration,O
expenses,O
as,O
a,O
percentage,O
of,O
total,O
revenue,O
(,O
also,O
excluding,O
the,O
Broker/Dealer,O
),O
was,O
unchanged,O
at,O
23,O
%,O
.,O
,O
The,O
$,O
53,O
million,O
increase,O
in,O
sales,O
",",O
marketing,O
and,O
administration,O
expenses,O
was,O
due,O
primarily,O
to,O
higher,O
employment-related,O
expense,O
in,O
FS,O
resulting,O
from,O
increased,O
employment,O
to,O
support,O
both,O
growth,O
in,O
the,O
business,O
and,O
international,O
expansion,O
",",O
principally,O
in,O
Asia,I-LOCATION
and,O
Brazil,I-LOCATION
",",O
as,O
well,O
as,O
annual,O
increases,O
following,O
cost,O
restraint,O
in,O
2009,O
due,O
to,O
economic,O
conditions,O
.,O
,O
Also,O
impacting,O
the,O
change,O
were,O
increases,O
in,O
professional,O
services,O
expense,O
",",O
advertising,O
and,O
trade,O
show,O
expenses,O
and,O
currency,O
transaction,O
losses,O
",",O
partially,O
offset,O
by,O
decreases,O
in,O
FS,O
facilities,O
expense,O
",",O
resulting,O
from,O
facilities,O
consolidation,O
in,O
2009,O
",",O
and,O
lower,O
bad,O
debt,O
expense,O
in,O
AS,O
.,O
,O
Because,O
AS,O
software,O
development,O
costs,O
are,O
insignificant,O
",",O
it,O
is,O
more,O
meaningful,O
to,O
measure,O
product,O
development,O
expense,O
as,O
a,O
percentage,O
of,O
revenue,O
from,O
software,O
and,O
processing,O
solutions,O
.,O
,O
In,O
2010,O
and,O
2009,O
",",O
software,O
development,O
expenses,O
were,O
10,O
%,O
and,O
9,O
%,O
",",O
respectively,O
",",O
of,O
revenue,O
from,O
software,O
and,O
processing,O
solutions,O
.,O
,O
Amortization,O
of,O
acquisition-related,O
intangible,O
assets,O
was,O
10,O
%,O
of,O
total,O
revenue,O
in,O
each,O
of,O
2010,O
and,O
2009,O
",",O
respectively,O
.,O
,O
During,O
2009,O
",",O
we,O
shortened,O
the,O
remaining,O
useful,O
lives,O
of,O
certain,O
intangible,O
assets,O
and,O
also,O
recorded,O
impairment,O
charges,O
of,O
our,O
customer,O
base,O
and,O
software,O
assets,O
of,O
$,O
18,O
million,O
and,O
$,O
17,O
million,O
",",O
respectively,O
.,O
,O
These,O
impairments,O
are,O
the,O
result,O
of,O
reduced,O
cash,O
flow,O
projections,O
related,O
to,O
the,O
software,O
and,O
customer,O
base,O
assets,O
that,O
were,O
impaired,O
.,O
,O
We,O
recorded,O
goodwill,O
impairment,O
charges,O
of,O
$,O
205,O
million,O
and,O
$,O
32,O
million,O
in,O
PS,O
and,O
HE,O
",",O
respectively,O
",",O
in,O
2010,O
and,O
$,O
1.13,O
billion,O
in,O
AS,O
in,O
2009,O
.,O
,O
These,O
impairments,O
are,O
described,O
in,O
the,O
Use,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Estimates,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Critical,I-MISCELLANEOUS
Accounting,I-MISCELLANEOUS
Policies,I-MISCELLANEOUS
section,O
above,O
.,O
,O
Interest,O
expense,O
was,O
$,O
638,O
million,O
in,O
2010,O
compared,O
to,O
$,O
637,O
million,O
in,O
2009,O
.,O
,O
Interest,O
expense,O
in,O
2010,O
compared,O
to,O
2009,O
was,O
impacted,O
by,O
the,O
following,O
:,O
(,O
a,O
),O
lower,O
average,O
borrowings,O
under,O
our,O
term,O
loans,O
at,O
a,O
slightly,O
higher,O
interest,O
rate,O
",",O
(,O
b,O
),O
higher,O
average,O
debt,O
outstanding,O
resulting,O
from,O
the,O
timing,O
of,O
our,O
borrowings,O
and,O
delayed,O
repayment,O
due,O
to,O
calling,O
bonds,O
that,O
were,O
not,O
tendered,O
related,O
to,O
the,O
refinance,O
of,O
our,O
$,O
1.6,O
billion,O
of,O
senior,O
notes,O
due,O
2013,O
at,O
a,O
lower,O
interest,O
rate,O
",",O
(,O
c,O
),O
higher,O
average,O
borrowings,O
on,O
our,O
accounts,O
receivable,O
facility,O
at,O
a,O
lower,O
interest,O
rate,O
and,O
(,O
d,O
),O
lower,O
average,O
borrowings,O
under,O
our,O
revolving,O
credit,O
facility,O
.,O
,O
The,O
loss,O
on,O
extinguishment,O
of,O
debt,O
in,O
2010,O
was,O
due,O
to,O
the,O
early,O
extinguishments,O
of,O
our,O
$,O
1.6,O
billion,O
of,O
senior,O
notes,O
due,O
in,O
2013,O
and,O
our,O
euro-denominated,O
term,O
loans,O
.,O
,O
The,O
loss,O
included,O
$,O
39,O
million,O
of,O
tender,O
and,O
call,O
premiums,O
.,O
,O
Other,O
income,O
was,O
$,O
7,O
million,O
in,O
2010,O
compared,O
to,O
$,O
15,O
million,O
in,O
2009,O
.,O
,O
The,O
decrease,O
is,O
due,O
primarily,O
to,O
a,O
$,O
9,O
million,O
decrease,O
in,O
foreign,O
currency,O
transaction,O
gains,O
related,O
to,O
our,O
euro-denominated,O
term,O
loans,O
.,O
,O
Our,O
overall,O
effective,O
income,O
tax,O
rate,O
is,O
typically,O
between,O
38,O
%,O
and,O
40,O
%,O
.,O
,O
The,O
effective,O
income,O
tax,O
rates,O
for,O
each,O
of,O
2010,O
and,O
2009,O
were,O
a,O
tax,O
benefit,O
of,O
7,O
%,O
and,O
6,O
%,O
",",O
respectively,O
",",O
reflecting,O
nondeductible,O
goodwill,O
impairment,O
charges,O
in,O
both,O
years,O
.,O
,O
The,O
reported,O
benefit,O
in,O
2010,O
includes,O
a,O
$,O
13,O
million,O
favorable,O
adjustment,O
due,O
primarily,O
to,O
the,O
impact,O
of,O
tax,O
rate,O
changes,O
on,O
deferred,O
tax,O
assets,O
and,O
liabilities,O
offset,O
by,O
a,O
$,O
48,O
million,O
unfavorable,O
charge,O
for,O
recording,O
deferred,O
income,O
taxes,O
on,O
unremitted,O
earnings,O
of,O
non-U.S.,I-MISCELLANEOUS
subsidiaries,O
which,O
are,O
no,O
longer,O
considered,O
to,O
be,O
permanently,O
reinvested,O
.,O
,O
The,O
reported,O
benefit,O
from,O
income,O
taxes,O
in,O
2009,O
includes,O
a,O
$,O
12,O
million,O
favorable,O
adjustment,O
primarily,O
related,O
to,O
utilization,O
in,O
our,O
2008,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
return,O
of,O
foreign,O
tax,O
credit,O
carryforwards,O
that,O
were,O
not,O
expected,O
to,O
be,O
utilized,O
at,O
the,O
time,O
of,O
the,O
2008,O
tax,O
provision,O
.,O
,O
Loss,O
from,O
discontinued,O
operations,O
",",O
net,O
of,O
tax,O
",",O
was,O
$,O
180,O
million,O
in,O
2010,O
compared,O
to,O
income,O
from,O
discontinued,O
operations,O
",",O
net,O
of,O
tax,O
",",O
of,O
$,O
4,O
million,O
in,O
2009,O
.,O
,O
During,O
2010,O
",",O
we,O
sold,O
our,O
PS,O
UK,O
operation,O
which,O
included,O
an,O
impairment,O
charge,O
",",O
net,O
of,O
tax,O
",",O
of,O
$,O
91,O
million,O
and,O
a,O
loss,O
on,O
disposal,O
of,O
approximately,O
$,O
94,O
million,O
which,O
included,O
the,O
write-off,O
of,O
the,O
currency,O
translation,O
adjustment,O
(,O
CTA,O
),O
which,O
is,O
included,O
as,O
a,O
separate,O
component,O
of,O
equity,O
.,O
,O
Accreted,O
dividends,O
on,O
SCCII,I-BUSINESS
s,O
cumulative,O
preferred,O
stock,O
were,O
$,O
191,O
million,O
and,O
$,O
180,O
million,O
in,O
2010,O
and,O
2009,O
",",O
respectively,O
.,O
,O
The,O
increase,O
in,O
dividends,O
is,O
due,O
to,O
compounding,O
.,O
,O
No,O
dividends,O
have,O
been,O
declared,O
by,O
SCCII,I-BUSINESS
.,O
,O
Year,O
Ended,O
December,O
31,O
",",O
2009,O
Compared,O
to,O
Year,O
Ended,O
December,O
31,O
",",O
2008,O
The,O
following,O
discussion,O
has,O
been,O
updated,O
to,O
reflect,O
the,O
disposition,O
of,O
PS,O
UK,I-LOCATION
and,O
its,O
presentation,O
as,O
a,O
discontinued,O
operation,O
.,O
,O
Operating,O
Income,O
:,O
Our,O
total,O
operating,O
margin,O
was,O
-11,O
%,O
in,O
2009,O
",",O
which,O
included,O
a,O
$,O
1.13,O
billion,O
goodwill,O
impairment,O
charge,O
",",O
and,O
12,O
%,O
in,O
2008,O
.,O
,O
In,O
addition,O
to,O
the,O
goodwill,O
impairment,O
charge,O
",",O
the,O
operating,O
margin,O
was,O
also,O
impacted,O
by,O
the,O
decline,O
in,O
AS,O
",",O
a,O
$,O
33,O
million,O
decrease,O
in,O
license,O
fees,O
and,O
a,O
$,O
57,O
million,O
increase,O
in,O
amortization,O
of,O
acquisition-related,O
intangible,O
assets,O
",",O
partially,O
offset,O
by,O
margin,O
improvement,O
in,O
our,O
software,O
and,O
processing,O
businesses,O
primarily,O
due,O
to,O
cost,O
savings,O
.,O
,O
Financial,O
Systems,O
:,O
The,O
FS,O
operating,O
margin,O
was,O
unchanged,O
at,O
20,O
%,O
in,O
each,O
of,O
2009,O
and,O
2008,O
.,O
,O
Margin,O
improvement,O
from,O
cost,O
savings,O
initiatives,O
",",O
primarily,O
in,O
employee-related,O
and,O
consultant,O
costs,O
",",O
was,O
offset,O
by,O
a,O
$,O
30,O
million,O
decrease,O
in,O
software,O
license,O
revenue,O
and,O
the,O
reduced,O
contribution,O
from,O
the,O
Broker/Dealer,O
mentioned,O
above,O
.,O
,O
The,O
impact,O
of,O
this,O
Broker/Dealer,O
on,O
FS,O
operating,O
margin,O
is,O
a,O
decline,O
of,O
almost,O
one,O
margin,O
point,O
.,O
,O
Higher,O
Education,O
:,O
The,O
HE,O
operating,O
margin,O
was,O
26,O
%,O
in,O
2009,O
compared,O
to,O
25,O
%,O
in,O
2008,O
.,O
,O
The,O
operating,O
margin,O
increase,O
is,O
due,O
to,O
the,O
impact,O
of,O
cost,O
savings,O
during,O
the,O
year,O
",",O
primarily,O
in,O
employee-related,O
and,O
consultant,O
costs,O
and,O
professional,O
services,O
expenses,O
.,O
,O
Public,O
Sector,O
:,O
The,O
PS,O
operating,O
margin,O
was,O
28,O
%,O
and,O
30,O
%,O
in,O
2009,O
and,O
2008,O
",",O
respectively,O
.,O
,O
The,O
operating,O
margin,O
decline,O
was,O
due,O
primarily,O
to,O
a,O
$,O
3,O
million,O
decrease,O
in,O
software,O
license,O
fees,O
.,O
,O
Availability,O
Services,O
:,O
The,O
AS,O
operating,O
margin,O
was,O
25,O
%,O
in,O
2009,O
compared,O
to,O
28,O
%,O
in,O
2008,O
",",O
primarily,O
due,O
to,O
facility,O
expansions,O
",",O
mostly,O
in,O
Europe,O
",",O
which,O
increased,O
the,O
fixed,O
cost,O
base,O
in,O
advance,O
of,O
anticipated,O
revenue,O
growth,O
",",O
increases,O
in,O
employee-related,O
costs,O
",",O
mostly,O
in,O
North,I-LOCATION
America,I-LOCATION
",",O
increased,O
depreciation,O
and,O
amortization,O
",",O
and,O
the,O
impact,O
of,O
a,O
change,O
in,O
the,O
mix,O
of,O
revenue,O
from,O
recovery,O
services,O
which,O
typically,O
use,O
shared,O
resources,O
to,O
managed,O
services,O
which,O
use,O
dedicated,O
resources,O
.,O
,O
Revenue,O
:,O
Total,O
revenue,O
was,O
$,O
5.33,O
billion,O
in,O
2009,O
compared,O
to,O
$,O
5.40,O
billion,O
in,O
2008,O
.,O
,O
Included,O
in,O
2009,O
was,O
the,O
full,O
year,O
impact,O
from,O
the,O
acquisitions,O
made,O
in,O
2008,O
including,O
the,O
October,O
2008,O
acquisition,O
of,O
GL,I-BUSINESS
TRADE,I-BUSINESS
S.A,I-BUSINESS
.,I-BUSINESS
,O
Organic,O
revenue,O
declined,O
3,O
%,O
primarily,O
due,O
to,O
a,O
decrease,O
in,O
professional,O
services,O
revenue,O
in,O
FS,O
and,O
HE,O
.,O
,O
Services,O
revenue,O
decreased,O
to,O
$,O
4.84,O
billion,O
from,O
$,O
4.90,O
billion,O
",",O
representing,O
approximately,O
91,O
%,O
of,O
total,O
revenue,O
in,O
each,O
of,O
2009,O
and,O
2008,O
.,O
,O
due,O
to,O
a,O
decrease,O
in,O
professional,O
services,O
and,O
processing,O
revenue,O
and,O
the,O
impact,O
of,O
changes,O
in,O
currency,O
exchange,O
rates,O
offset,O
in,O
part,O
by,O
an,O
increase,O
in,O
software,O
rentals,O
",",O
primarily,O
from,O
FS,O
acquired,O
businesses,O
.,O
,O
Professional,O
services,O
revenue,O
was,O
$,O
770,O
million,O
and,O
$,O
912,O
million,O
in,O
2009,O
and,O
2008,O
",",O
respectively,O
.,O
,O
The,O
decrease,O
was,O
primarily,O
in,O
FS,O
and,O
HE,O
and,O
was,O
the,O
result,O
of,O
customers,O
delaying,O
or,O
cancelling,O
projects,O
due,O
to,O
the,O
economic,O
climate,O
",",O
as,O
well,O
as,O
completion,O
of,O
certain,O
projects,O
in,O
2008,O
.,O
,O
Revenue,O
from,O
license,O
and,O
resale,O
fees,O
was,O
$,O
324,O
million,O
and,O
$,O
359,O
million,O
for,O
2009,O
and,O
2008,O
",",O
respectively,O
",",O
and,O
includes,O
software,O
license,O
revenue,O
of,O
$,O
233,O
million,O
and,O
$,O
266,O
million,O
",",O
respectively,O
.,O
,O
SunGard,O
ended,O
2009,O
with,O
a,O
software,O
license,O
backlog,O
of,O
$,O
35,O
million,O
in,O
FS,O
",",O
which,O
consisted,O
of,O
signed,O
contracts,O
for,O
licensed,O
software,O
that,O
(,O
i,O
),O
at,O
our,O
election,O
",",O
was,O
not,O
shipped,O
to,O
the,O
customer,O
until,O
2010,O
",",O
(,O
ii,O
),O
we,O
voluntarily,O
extended,O
payment,O
terms,O
or,O
(,O
iii,O
),O
included,O
products,O
or,O
services,O
not,O
yet,O
deliverable,O
and,O
from,O
which,O
the,O
license,O
element,O
can,O
not,O
be,O
separated,O
.,O
,O
Financial,O
Systems,O
:,O
FS,O
revenue,O
was,O
$,O
3.07,O
billion,O
in,O
2009,O
compared,O
to,O
$,O
3.08,O
billion,O
in,O
2008,O
.,O
,O
Organic,O
revenue,O
decreased,O
by,O
approximately,O
5,O
%,O
in,O
2009,O
.,O
,O
Included,O
in,O
2009,O
was,O
the,O
full,O
year,O
impact,O
from,O
acquired,O
businesses,O
which,O
mostly,O
offset,O
the,O
decline,O
in,O
organic,O
revenue,O
",",O
largely,O
professional,O
services,O
.,O
,O
Professional,O
services,O
revenue,O
decreased,O
$,O
120,O
million,O
or,O
18,O
%,O
to,O
$,O
533,O
million,O
.,O
,O
Revenue,O
from,O
license,O
and,O
resale,O
fees,O
included,O
software,O
license,O
revenue,O
of,O
$,O
174,O
million,O
and,O
$,O
204,O
million,O
",",O
respectively,O
",",O
in,O
2009,O
and,O
2008,O
.,O
,O
We,O
expect,O
a,O
material,O
decline,O
in,O
2010,O
revenue,O
in,O
one,O
of,O
our,O
trading,O
systems,O
businesses,O
",",O
a,O
Broker/Dealer,O
",",O
as,O
a,O
result,O
of,O
changes,O
in,O
customer,O
mix,O
and,O
lower,O
levels,O
of,O
volatility,O
.,O
,O
The,O
customer,O
mix,O
is,O
impacted,O
by,O
the,O
market-wide,O
dynamics,O
by,O
which,O
active,O
trading,O
firms,O
are,O
opting,O
to,O
become,O
broker/dealers,O
and,O
trade,O
on,O
their,O
own,O
behalf,O
.,O
,O
Beginning,O
in,O
the,O
first,O
quarter,O
of,O
2010,O
",",O
a,O
major,O
customer,O
of,O
this,O
Broker/Dealer,O
started,O
trading,O
on,O
its,O
own,O
behalf,O
.,O
,O
This,O
Broker/Dealer,O
business,O
",",O
which,O
has,O
an,O
inherently,O
lower,O
margin,O
than,O
our,O
other,O
FS,O
businesses,O
",",O
has,O
driven,O
organic,O
revenue,O
growth,O
over,O
the,O
past,O
three,O
years,O
.,O
,O
Higher,O
Education,O
:,O
HE,O
revenue,O
was,O
$,O
594,O
million,O
in,O
each,O
of,O
2009,O
and,O
2008,O
.,O
,O
Organic,O
revenue,O
decreased,O
1,O
%,O
.,O
,O
A,O
decline,O
in,O
professional,O
services,O
revenue,O
was,O
mostly,O
offset,O
by,O
increases,O
in,O
processing,O
and,O
software,O
support,O
revenue,O
.,O
,O
Professional,O
services,O
revenue,O
was,O
$,O
141,O
million,O
in,O
2009,O
compared,O
to,O
$,O
157,O
million,O
in,O
2008,O
.,O
,O
Software,O
license,O
fees,O
increased,O
$,O
1,O
million,O
to,O
$,O
38,O
million,O
in,O
2009,O
.,O
,O
Public,O
Sector,O
:,O
PS,O
revenue,O
was,O
$,O
153,O
million,O
in,O
2009,O
compared,O
to,O
$,O
162,O
million,O
in,O
2008,O
.,O
,O
Organic,O
revenue,O
decreased,O
6,O
%,O
in,O
2009,O
.,O
,O
The,O
$,O
9,O
million,O
",",O
or,O
6,O
%,O
",",O
decrease,O
was,O
due,O
primarily,O
to,O
decreases,O
in,O
professional,O
services,O
and,O
software,O
license,O
fees,O
",",O
partially,O
offset,O
by,O
an,O
increase,O
in,O
software,O
support,O
revenue,O
.,O
,O
Revenue,O
from,O
license,O
and,O
resale,O
fees,O
included,O
software,O
license,O
fees,O
of,O
$,O
16,O
million,O
and,O
$,O
20,O
million,O
in,O
2009,O
and,O
2008,O
",",O
respectively,O
.,O
,O
Availability,O
Services,O
:,O
AS,O
revenue,O
was,O
$,O
1.52,O
billion,O
in,O
2009,O
compared,O
to,O
$,O
1.57,O
billion,O
in,O
2008,O
",",O
a,O
3,O
%,O
decrease,O
.,O
,O
AS,O
organic,O
revenue,O
was,O
unchanged,O
in,O
2009,O
.,O
,O
In,O
North,I-LOCATION
America,I-LOCATION
",",O
revenue,O
decreased,O
1,O
%,O
overall,O
and,O
2,O
%,O
organically,O
where,O
decreases,O
in,O
recovery,O
services,O
exceeded,O
growth,O
in,O
managed,O
services,O
and,O
professional,O
services,O
revenue,O
.,O
,O
Revenue,O
from,O
license,O
and,O
resale,O
fees,O
included,O
software,O
license,O
revenue,O
of,O
$,O
4,O
million,O
",",O
a,O
decrease,O
of,O
$,O
2,O
million,O
from,O
the,O
prior,O
year,O
.,O
,O
Revenue,O
in,O
Europe,O
decreased,O
12,O
%,O
",",O
but,O
increased,O
2.5,O
%,O
organically,O
.,O
,O
Costs,O
and,O
Expenses,O
:,O
Total,O
costs,O
increased,O
to,O
111,O
%,O
of,O
revenue,O
in,O
2009,O
from,O
88,O
%,O
of,O
2008,O
revenue,O
.,O
,O
Included,O
in,O
2009,O
was,O
a,O
$,O
1.13,O
billion,O
impairment,O
charge,O
related,O
to,O
our,O
AS,O
business,O
.,O
,O
Cost,O
of,O
sales,O
and,O
direct,O
operating,O
expenses,O
as,O
a,O
percentage,O
of,O
total,O
revenue,O
was,O
48,O
%,O
in,O
each,O
of,O
2009,O
and,O
2008,O
.,O
,O
Lower,O
employee-related,O
and,O
consultant,O
expenses,O
in,O
our,O
software,O
and,O
processing,O
businesses,O
were,O
partially,O
offset,O
by,O
increased,O
costs,O
from,O
acquired,O
businesses,O
",",O
net,O
of,O
a,O
business,O
sold,O
in,O
2008,O
.,O
,O
The,O
decrease,O
in,O
sales,O
",",O
marketing,O
and,O
administration,O
expenses,O
of,O
$,O
25,O
million,O
was,O
due,O
primarily,O
to,O
decreased,O
costs,O
resulting,O
from,O
FS,O
employee-related,O
expenses,O
partially,O
offset,O
by,O
increased,O
costs,O
from,O
acquired,O
businesses,O
",",O
net,O
of,O
a,O
business,O
sold,O
in,O
2008,O
",",O
and,O
increases,O
in,O
FS,O
facilities,O
expense,O
.,O
,O
Because,O
AS,O
software,O
development,O
costs,O
are,O
insignificant,O
",",O
it,O
is,O
more,O
meaningful,O
to,O
measure,O
product,O
development,O
expense,O
as,O
a,O
percentage,O
of,O
revenue,O
from,O
software,O
and,O
processing,O
solutions,O
.,O
,O
In,O
2009,O
and,O
2008,O
",",O
software,O
development,O
expenses,O
were,O
9,O
%,O
and,O
8,O
%,O
",",O
respectively,O
",",O
of,O
revenue,O
from,O
software,O
and,O
processing,O
solutions,O
.,O
,O
Depreciation,O
and,O
amortization,O
as,O
a,O
percentage,O
of,O
total,O
revenue,O
was,O
5,O
%,O
in,O
each,O
of,O
2009,O
and,O
2008,O
.,O
,O
The,O
$,O
14,O
million,O
increase,O
in,O
2009,O
was,O
due,O
primarily,O
to,O
capital,O
expenditures,O
supporting,O
AS,O
",",O
FS,O
and,O
HE,O
.,O
,O
Amortization,O
of,O
acquisition-related,O
intangible,O
assets,O
was,O
10,O
%,O
and,O
9,O
%,O
of,O
total,O
revenue,O
in,O
2009,O
and,O
2008,O
",",O
respectively,O
.,O
,O
During,O
2009,O
",",O
we,O
shortened,O
the,O
remaining,O
useful,O
lives,O
of,O
certain,O
intangible,O
assets,O
and,O
also,O
recorded,O
impairment,O
charges,O
of,O
our,O
customer,O
base,O
and,O
software,O
assets,O
of,O
$,O
18,O
million,O
and,O
$,O
17,O
million,O
",",O
respectively,O
.,O
,O
During,O
2008,O
",",O
we,O
recorded,O
impairment,O
charges,O
of,O
our,O
customer,O
base,O
",",O
software,O
and,O
trade,O
name,O
assets,O
of,O
$,O
27,O
million,O
",",O
$,O
9,O
million,O
and,O
$,O
3,O
million,O
",",O
respectively,O
.,O
,O
These,O
impairments,O
are,O
the,O
result,O
of,O
reduced,O
cash,O
flow,O
projections,O
.,O
,O
We,O
recorded,O
a,O
goodwill,O
impairment,O
charge,O
of,O
$,O
1.13,O
billion,O
in,O
AS,O
in,O
2009,O
.,O
,O
This,O
impairment,O
is,O
described,O
in,O
the,O
Use,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Estimates,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Critical,I-MISCELLANEOUS
Accounting,I-MISCELLANEOUS
Policies,I-MISCELLANEOUS
section,O
above,O
.,O
,O
Interest,O
expense,O
was,O
$,O
637,O
million,O
in,O
2009,O
compared,O
to,O
$,O
597,O
million,O
in,O
2008,O
.,O
,O
The,O
increase,O
is,O
primarily,O
due,O
to,O
increased,O
borrowings,O
from,O
the,O
issuance,O
of,O
$,O
500,O
million,O
senior,O
notes,O
due,O
2015,O
",",O
a,O
$,O
500,O
million,O
increase,O
in,O
the,O
term,O
loan,O
and,O
borrowings,O
under,O
our,O
receivables,O
facility,O
",",O
partially,O
offset,O
by,O
decreased,O
borrowings,O
under,O
our,O
term,O
loans,O
and,O
revolving,O
credit,O
facility,O
",",O
repayment,O
of,O
our,O
senior,O
notes,O
due,O
in,O
January,O
2009,O
and,O
interest,O
rate,O
decreases,O
.,O
,O
Other,O
income,O
was,O
$,O
15,O
million,O
in,O
2009,O
compared,O
to,O
other,O
expense,O
of,O
$,O
93,O
million,O
in,O
2008,O
.,O
,O
The,O
income,O
in,O
2009,O
was,O
due,O
primarily,O
to,O
$,O
14,O
million,O
of,O
foreign,O
currency,O
translation,O
gains,O
related,O
to,O
our,O
euro-denominated,O
term,O
loan,O
.,O
,O
In,O
contrast,O
",",O
during,O
2008,O
",",O
currency,O
translation,O
related,O
to,O
those,O
same,O
euro-,O
,O
denominated,O
term,O
loans,O
produced,O
$,O
46,O
million,O
of,O
foreign,O
currency,O
translation,O
losses,O
.,O
,O
Also,O
incurred,O
in,O
2008,O
were,O
$,O
25,O
million,O
of,O
losses,O
on,O
sales,O
of,O
receivables,O
related,O
to,O
our,O
terminated,O
off-balance,O
sheet,O
receivables,O
facility,O
and,O
$,O
17,O
million,O
of,O
losses,O
on,O
euros,O
purchased,O
in,O
advance,O
of,O
and,O
fees,O
associated,O
with,O
unused,O
alternative,O
financing,O
commitments,O
for,O
the,O
acquisition,O
of,O
GL,I-BUSINESS
TRADE,I-BUSINESS
.,O
,O
We,O
believe,O
that,O
our,O
overall,O
effective,O
income,O
tax,O
rate,O
is,O
typically,O
between,O
38,O
%,O
and,O
40,O
%,O
.,O
,O
The,O
effective,O
income,O
tax,O
rates,O
for,O
2009,O
and,O
2008,O
were,O
a,O
tax,O
benefit,O
of,O
6,O
%,O
and,O
a,O
tax,O
provision,O
of,O
124,O
%,O
",",O
respectively,O
.,O
,O
The,O
rate,O
in,O
2009,O
reflects,O
a,O
nondeductible,O
goodwill,O
impairment,O
charge,O
.,O
,O
The,O
rate,O
in,O
2008,O
reflects,O
a,O
charge,O
for,O
tax,O
positions,O
taken,O
in,O
prior,O
years,O
as,O
well,O
as,O
differences,O
in,O
the,O
mix,O
of,O
taxable,O
income,O
in,O
various,O
jurisdictions,O
.,O
,O
The,O
reported,O
benefit,O
from,O
income,O
taxes,O
in,O
2009,O
includes,O
a,O
$,O
12,O
million,O
favorable,O
adjustment,O
primarily,O
related,O
to,O
utilization,O
in,O
our,O
2008,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
return,O
of,O
foreign,O
tax,O
credit,O
carryforwards,O
that,O
were,O
not,O
expected,O
to,O
be,O
utilized,O
at,O
the,O
time,O
of,O
the,O
2008,O
tax,O
provision,O
.,O
,O
Income,O
from,O
discontinued,O
operations,O
",",O
net,O
of,O
tax,O
",",O
was,O
$,O
4,O
million,O
in,O
2009,O
compared,O
to,O
loss,O
from,O
discontinued,O
operations,O
",",O
net,O
of,O
tax,O
",",O
of,O
$,O
150,O
million,O
in,O
2008,O
.,O
,O
During,O
2008,O
",",O
we,O
incurred,O
a,O
goodwill,O
impairment,O
charge,O
",",O
net,O
of,O
tax,O
",",O
of,O
$,O
128,O
million,O
.,O
,O
Also,O
in,O
2008,O
",",O
we,O
recorded,O
impairment,O
charges,O
of,O
our,O
customer,O
base,O
and,O
software,O
assets,O
of,O
$,O
20,O
million,O
and,O
$,O
8,O
million,O
",",O
respectively,O
.,O
,O
These,O
impairments,O
are,O
the,O
result,O
of,O
reduced,O
cash,O
flow,O
projections,O
related,O
to,O
the,O
software,O
and,O
customer,O
base,O
assets,O
that,O
were,O
impaired,O
.,O
,O
Accreted,O
dividends,O
on,O
SCCII,O
s,O
cumulative,O
preferred,O
stock,O
were,O
$,O
180,O
million,O
and,O
$,O
157,O
million,O
in,O
2009,O
and,O
2008,O
",",O
respectively,O
.,O
,O
The,O
increase,O
in,O
dividends,O
is,O
due,O
to,O
compounding,O
.,O
,O
No,O
dividends,O
have,O
been,O
declared,O
by,O
SCCII,I-BUSINESS
.,O
,O
Liquidity,O
and,O
Capital,O
Resources,O
:,O
At,O
December,O
31,O
",",O
2010,O
",",O
cash,O
and,O
cash,O
equivalents,O
in,O
continuing,O
operations,O
were,O
$,O
778,O
million,O
",",O
an,O
increase,O
of,O
$,O
136,O
million,O
from,O
December,O
31,O
",",O
2009,O
",",O
while,O
availability,O
under,O
our,O
revolving,O
credit,O
facility,O
was,O
$,O
796,O
million,O
.,O
,O
Approximately,O
$,O
483,O
million,O
of,O
cash,O
and,O
cash,O
equivalents,O
at,O
December,O
31,O
",",O
2010,O
was,O
held,O
by,O
our,O
wholly,O
owned,O
non-U.S.,I-MISCELLANEOUS
,O
While,O
available,O
to,O
fund,O
operations,O
and,O
strategic,O
investment,O
opportunities,O
abroad,O
",",O
most,O
of,O
these,O
funds,O
can,O
not,O
be,O
repatriated,O
for,O
use,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
without,O
incurring,O
additional,O
cash,O
tax,O
costs,O
and,O
in,O
some,O
cases,O
are,O
in,O
countries,O
with,O
currency,O
restrictions,O
.,O
,O
Also,O
",",O
approximately,O
$,O
100,O
million,O
of,O
cash,O
and,O
cash,O
equivalents,O
at,O
December,O
31,O
",",O
2010,O
relates,O
to,O
our,O
broker/dealer,O
operations,O
which,O
is,O
not,O
available,O
for,O
general,O
corporate,O
use,O
without,O
adversely,O
affecting,O
the,O
operation,O
of,O
the,O
broker/dealer,O
businesses,O
.,O
,O
Cash,O
flow,O
from,O
continuing,O
operations,O
was,O
$,O
714,O
million,O
in,O
2010,O
compared,O
to,O
cash,O
flow,O
from,O
continuing,O
operations,O
of,O
$,O
607,O
million,O
in,O
2009,O
.,O
,O
The,O
increase,O
in,O
cash,O
flow,O
from,O
continuing,O
operations,O
is,O
due,O
primarily,O
to,O
the,O
termination,O
in,O
December,O
2008,O
of,O
our,O
off-balance,O
sheet,O
accounts,O
receivable,O
securitization,O
program,O
",",O
which,O
reduced,O
2009,O
operating,O
cash,O
flow,O
",",O
and,O
$,O
92,O
million,O
less,O
of,O
income,O
tax,O
payments,O
",",O
net,O
of,O
refunds,O
",",O
in,O
2010,O
",",O
partially,O
offset,O
by,O
the,O
reduction,O
in,O
operating,O
income,O
after,O
adjusting,O
for,O
the,O
noncash,O
goodwill,O
impairments,O
in,O
2010,O
and,O
2009,O
.,O
,O
Cash,O
flow,O
from,O
continuing,O
operations,O
was,O
$,O
607,O
million,O
in,O
2009,O
compared,O
to,O
cash,O
flow,O
from,O
continuing,O
operations,O
of,O
$,O
375,O
million,O
in,O
2008,O
.,O
,O
The,O
increase,O
in,O
cash,O
flow,O
from,O
continuing,O
operations,O
is,O
due,O
primarily,O
to,O
the,O
positive,O
impact,O
of,O
approximately,O
$,O
287,O
million,O
from,O
the,O
termination,O
in,O
December,O
2008,O
of,O
our,O
off-balance,O
sheet,O
accounts,O
receivable,O
securitization,O
program,O
",",O
offset,O
by,O
an,O
increased,O
use,O
of,O
cash,O
",",O
principally,O
in,O
working,O
capital,O
",",O
in,O
the,O
balance,O
of,O
the,O
business,O
.,O
,O
Net,O
cash,O
used,O
by,O
continuing,O
operations,O
in,O
investing,O
activities,O
was,O
$,O
385,O
million,O
in,O
2010,O
and,O
$,O
331,O
million,O
in,O
2009,O
.,O
,O
During,O
2010,O
",",O
we,O
spent,O
$,O
82,O
million,O
for,O
four,O
acquisitions,O
",",O
whereas,O
we,O
spent,O
$,O
13,O
million,O
for,O
three,O
acquisitions,O
during,O
2009,O
.,O
,O
Capital,O
expenditures,O
for,O
continuing,O
operations,O
were,O
$,O
312,O
million,O
in,O
2010,O
and,O
$,O
323,O
million,O
in,O
2009,O
.,O
,O
In,O
2008,O
",",O
net,O
cash,O
used,O
by,O
continuing,O
operations,O
in,O
investing,O
activities,O
was,O
$,O
1.1,O
billion,O
",",O
primarily,O
related,O
to,O
$,O
721,O
million,O
spent,O
on,O
six,O
acquisitions,O
",",O
including,O
$,O
546,O
million,O
for,O
the,O
acquisition,O
of,O
GL,I-BUSINESS
TRADE,I-BUSINESS
S.A,I-BUSINESS
.,I-BUSINESS
,O
in,O
our,O
FS,O
business,O
",",O
and,O
capital,O
expenditures,O
were,O
$,O
391,O
million,O
.,O
,O
In,O
2010,O
",",O
net,O
cash,O
used,O
by,O
continuing,O
operations,O
in,O
financing,O
activities,O
was,O
$,O
344,O
million,O
",",O
which,O
included,O
the,O
early,O
retirements,O
of,O
our,O
senior,O
notes,O
due,O
2013,O
along,O
with,O
the,O
associated,O
retirement,O
premium,O
and,O
$,O
265,O
million,O
of,O
term,O
loans,O
",",O
and,O
the,O
issuance,O
of,O
$,O
900,O
million,O
of,O
senior,O
notes,O
due,O
2018,O
and,O
$,O
700,O
million,O
of,O
senior,O
notes,O
due,O
2020,O
(,O
net,O
of,O
associated,O
fees,O
),O
.,O
,O
We,O
also,O
increased,O
our,O
borrowings,O
under,O
our,O
accounts,O
receivable,O
securitization,O
program,O
by,O
$,O
63,O
million,O
in,O
2010,O
.,O
,O
In,O
2009,O
",",O
net,O
cash,O
used,O
by,O
continuing,O
operations,O
in,O
financing,O
activities,O
was,O
$,O
627,O
million,O
",",O
primarily,O
related,O
to,O
repayment,O
at,O
maturity,O
of,O
the,O
$,O
250,O
million,O
senior,O
secured,O
notes,O
and,O
repayment,O
of,O
$,O
500,O
million,O
of,O
borrowings,O
under,O
our,O
revolving,O
credit,O
facility,O
",",O
partially,O
offset,O
by,O
cash,O
received,O
from,O
the,O
new,O
receivables,O
facility,O
(,O
net,O
of,O
associated,O
fees,O
),O
.,O
,O
In,O
2008,O
",",O
net,O
cash,O
provided,O
by,O
financing,O
activities,O
was,O
$,O
1.3,O
billion,O
",",O
which,O
was,O
used,O
to,O
fund,O
the,O
acquisition,O
of,O
GL,I-BUSINESS
TRADE,I-BUSINESS
",",O
replace,O
the,O
liquidity,O
provided,O
by,O
the,O
terminated,O
off-balance,O
sheet,O
accounts,O
receivable,O
securitization,O
facility,O
and,O
repay,O
$,O
250,O
million,O
of,O
senior,O
notes,O
due,O
in,O
January,O
2009,O
.,O
,O
As,O
a,O
result,O
of,O
the,O
LBO,O
",",O
we,O
are,O
highly,O
leveraged,O
.,O
,O
Our,O
Sponsors,O
continually,O
evaluate,O
strategic,O
initiatives,O
",",O
some,O
of,O
which,O
could,O
significantly,O
impact,O
our,O
debt,O
profile,O
.,O
,O
See,O
above,O
Overview,O
.,O
,O
See,O
Note,O
5,O
of,O
Notes,O
to,O
Consolidated,O
Financial,O
Statements,O
which,O
contains,O
a,O
full,O
description,O
of,O
our,O
debt,O
.,O
,O
Total,O
debt,O
outstanding,O
as,O
of,O
December,O
31,O
",",O
2010,O
was,O
$,O
8.06,O
billion,O
",",O
which,O
consists,O
of,O
the,O
following,O
(,O
in,O
millions,O
),O
:,O
,O
Senior,O
Secured,O
Credit,O
Facilities,O
As,O
of,O
December,O
31,O
",",O
2010,O
",",O
SunGard,I-BUSINESS
s,O
senior,O
secured,O
credit,O
facilities,O
(,O
Credit,O
Agreement,O
),O
consist,O
of,O
(,O
1,O
),O
$,O
1.39,O
billion,O
of,O
U.S.,I-LOCATION
dollar-denominated,O
tranche,O
A,O
term,O
loans,O
and,O
$,O
62,O
million,O
of,O
pound,O
sterling-denominated,O
tranche,O
A,O
term,O
loans,O
",",O
each,O
maturing,O
on,O
February,O
28,O
",",O
2014,O
",",O
(,O
2,O
),O
$,O
2.41,O
billion,O
of,O
U.S.,I-LOCATION
dollar-denominated,O
tranche,O
B,O
term,O
loans,O
and,O
$,O
60,O
million,O
of,O
pound,O
sterling-denominated,O
tranche,O
B,O
term,O
loans,O
",",O
each,O
maturing,O
on,O
February,O
28,O
",",O
2016,O
",",O
(,O
3,O
),O
$,O
479,O
million,O
of,O
U.S.,I-LOCATION
dollar-denominated,O
incremental,O
term,O
loans,O
maturing,O
on,O
February,O
28,O
",",O
2014,O
and,O
(,O
4,O
),O
an,O
$,O
829,O
million,O
revolving,O
credit,O
facility,O
with,O
$,O
580,O
million,O
of,O
commitments,O
terminating,O
on,O
May,O
11,O
",",O
2013,O
",",O
and,O
$,O
249,O
million,O
of,O
commitments,O
terminating,O
on,O
August,O
11,O
",",O
2011,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2010,O
",",O
$,O
796,O
million,O
was,O
available,O
for,O
borrowing,O
under,O
the,O
revolving,O
credit,O
facility,O
after,O
giving,O
effect,O
to,O
certain,O
outstanding,O
letters,O
of,O
credit,O
.,O
,O
In,O
December,O
2010,O
",",O
we,O
sold,O
our,O
PS,O
UK,I-LOCATION
operation,O
for,O
gross,O
proceeds,O
of,O
£88,O
million,O
(,O
$,O
138,O
million,O
),O
.,O
,O
Pursuant,O
to,O
our,O
Credit,O
Agreement,O
",",O
we,O
were,O
required,O
to,O
apply,O
the,O
Net,O
Proceeds,O
",",O
as,O
defined,O
in,O
the,O
Credit,O
Agreement,O
",",O
to,O
the,O
repayment,O
of,O
outstanding,O
term,O
loans,O
.,O
,O
Accordingly,O
",",O
we,O
repaid,O
$,O
96,O
million,O
of,O
SunGard,I-BUSINESS
s,O
U.S.,I-LOCATION
dollar-denominated,O
term,O
loans,O
",",O
$,O
3,O
million,O
of,O
pound,O
sterling-denominated,O
term,O
loans,O
and,O
$,O
2,O
million,O
of,O
our,O
euro-denominated,O
term,O
loans,O
.,O
,O
In,O
addition,O
",",O
and,O
concurrent,O
with,O
these,O
mandatory,O
prepayments,O
",",O
other,O
available,O
cash,O
was,O
used,O
to,O
voluntarily,O
repay,O
the,O
remaining,O
$,O
164,O
million,O
balance,O
outstanding,O
on,O
the,O
euro-denominated,O
term,O
loans,O
.,O
,O
In,O
January,O
2011,O
",",O
we,O
amended,O
SunGard,I-BUSINESS
s,O
incremental,O
term,O
loan,O
to,O
(,O
a,O
),O
eliminate,O
the,O
LIBOR,O
and,O
Base,O
Rate,O
floors,O
and,O
(,O
b,O
),O
reduce,O
the,O
Eurocurrency,I-MISCELLANEOUS
Rate,O
spread,O
from,O
3.75,O
%,O
to,O
3.50,O
%,O
and,O
the,O
Base,O
Rate,O
spread,O
from,O
2.75,O
%,O
to,O
2.50,O
%,O
.,O
,O
The,O
loan,O
maturity,O
was,O
not,O
changed,O
.,O
,O
Senior,O
Notes,O
On,O
November,O
1,O
",",O
2010,O
",",O
SunGard,O
issued,O
$,O
900,O
million,O
of,O
7.375,O
%,O
senior,O
notes,O
due,O
in,O
November,O
2018,O
and,O
$,O
700,O
million,O
of,O
7.625,O
%,O
senior,O
notes,O
due,O
in,O
November,O
2020,O
.,O
,O
The,O
proceeds,O
",",O
together,O
with,O
other,O
cash,O
",",O
were,O
used,O
to,O
retire,O
our,O
$,O
1.6,O
billion,O
9.125,O
%,O
senior,O
notes,O
due,O
2013,O
.,O
,O
The,O
senior,O
notes,O
due,O
2018,O
and,O
2020,O
contain,O
registration,O
rights,O
by,O
which,O
SunGard,I-BUSINESS
has,O
agreed,O
to,O
use,O
its,O
reasonable,O
best,O
efforts,O
to,O
register,O
with,O
the,O
U.S.,I-LOCATION
Securities,I-GOVERNMENT
&,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
notes,O
having,O
substantially,O
identical,O
terms,O
.,O
,O
SunGard,I-BUSINESS
will,O
use,O
its,O
reasonable,O
best,O
efforts,O
to,O
cause,O
the,O
exchange,O
offer,O
to,O
be,O
completed,O
or,O
",",O
if,O
required,O
",",O
to,O
have,O
one,O
or,O
more,O
shelf,O
registration,O
statements,O
declared,O
effective,O
",",O
within,O
360,O
days,O
after,O
the,O
issue,O
date,O
of,O
the,O
senior,O
notes,O
due,O
2018,O
and,O
2020,O
.,O
,O
If,O
SunGard,I-BUSINESS
fails,O
to,O
meet,O
this,O
target,O
(,O
a,O
registration,O
default,O
),O
with,O
respect,O
to,O
the,O
senior,O
notes,O
due,O
2018,O
and,O
2020,O
",",O
the,O
annual,O
interest,O
rate,O
on,O
the,O
senior,O
notes,O
due,O
2018,O
and,O
2020,O
will,O
increase,O
by,O
0.25,O
%,O
for,O
each,O
subsequent,O
90-day,O
period,O
during,O
which,O
the,O
registration,O
default,O
continues,O
",",O
up,O
to,O
a,O
maximum,O
additional,O
interest,O
rate,O
of,O
1.0,O
%,O
per,O
year,O
over,O
the,O
applicable,O
interest,O
rate,O
.,O
,O
If,O
the,O
registration,O
default,O
is,O
corrected,O
or,O
",",O
if,O
it,O
is,O
not,O
corrected,O
",",O
upon,O
the,O
two,O
year,O
anniversary,O
of,O
the,O
issue,O
date,O
of,O
the,O
senior,O
notes,O
due,O
2018,O
and,O
2020,O
",",O
the,O
applicable,O
interest,O
rate,O
on,O
such,O
senior,O
notes,O
due,O
2018,O
and,O
2020,O
will,O
revert,O
to,O
the,O
original,O
level,O
.,O
,O
Receivables,O
Facilities,O
On,O
September,O
30,O
",",O
2010,O
",",O
SunGard,I-BUSINESS
entered,O
into,O
an,O
Amended,O
and,O
Restated,O
Credit,O
and,O
Security,O
Agreement,O
related,O
to,O
its,O
receivables,O
facility,O
.,O
,O
component,O
to,O
$,O
200,O
million,O
from,O
$,O
181,O
million,O
",",O
(,O
c,O
),O
extended,O
the,O
maturity,O
date,O
to,O
September,O
30,O
",",O
2014,O
",",O
(,O
d,O
),O
removed,O
the,O
3,O
%,O
LIBOR,O
floor,O
and,O
set,O
the,O
interest,O
rate,O
to,O
one-month,O
LIBOR,O
plus,O
3.5,O
%,O
",",O
which,O
at,O
December,O
31,O
",",O
2010,O
was,O
3.76,O
%,O
",",O
and,O
(,O
e,O
),O
amended,O
certain,O
other,O
terms,O
.,O
,O
At,O
December,O
31,O
",",O
2010,O
",",O
$,O
200,O
million,O
was,O
drawn,O
against,O
the,O
term,O
loan,O
commitment,O
and,O
$,O
113,O
million,O
was,O
drawn,O
against,O
the,O
revolving,O
commitment,O
",",O
which,O
represented,O
the,O
full,O
amount,O
available,O
for,O
borrowing,O
based,O
on,O
the,O
terms,O
and,O
conditions,O
of,O
the,O
facility,O
.,O
,O
At,O
December,O
31,O
",",O
2010,O
",",O
$,O
680,O
million,O
of,O
accounts,O
receivable,O
secure,O
the,O
borrowings,O
under,O
the,O
receivables,O
facility,O
.,O
,O
In,O
March,O
2009,O
",",O
SunGard,I-BUSINESS
entered,O
into,O
a,O
syndicated,O
three-year,O
receivables,O
facility,O
.,O
,O
The,O
facility,O
limit,O
was,O
$,O
317,O
million,O
",",O
which,O
consisted,O
of,O
a,O
term,O
loan,O
commitment,O
of,O
$,O
181,O
million,O
and,O
a,O
revolving,O
commitment,O
of,O
$,O
136,O
million,O
.,O
,O
Advances,O
may,O
be,O
borrowed,O
and,O
repaid,O
under,O
the,O
revolving,O
commitment,O
with,O
no,O
impact,O
on,O
the,O
facility,O
limit,O
.,O
,O
The,O
term,O
loan,O
commitment,O
may,O
be,O
repaid,O
at,O
any,O
time,O
at,O
SunGard,O
s,O
option,O
",",O
but,O
such,O
repayment,O
will,O
result,O
in,O
a,O
permanent,O
reduction,O
in,O
the,O
facility,O
limit,O
.,O
,O
Under,O
the,O
receivables,O
facility,O
",",O
SunGard,I-BUSINESS
was,O
generally,O
required,O
to,O
pay,O
interest,O
on,O
the,O
amount,O
of,O
each,O
advance,O
at,O
the,O
one,O
month,O
LIBOR,O
rate,O
(,O
with,O
a,O
floor,O
of,O
3,O
%,O
),O
plus,O
4.50,O
%,O
per,O
annum,O
.,O
,O
The,O
facility,O
is,O
subject,O
to,O
a,O
fee,O
on,O
the,O
unused,O
portion,O
of,O
1.00,O
%,O
per,O
annum,O
.,O
,O
The,O
receivables,O
facility,O
contains,O
certain,O
covenants,O
",",O
and,O
SunGard,I-BUSINESS
is,O
required,O
to,O
satisfy,O
and,O
maintain,O
specified,O
facility,O
performance,O
ratios,O
",",O
financial,O
ratios,O
and,O
other,O
financial,O
condition,O
tests,O
.,O
,O
In,O
December,O
2008,O
",",O
SunGard,I-BUSINESS
terminated,O
its,O
off-balance,O
sheet,O
accounts,O
receivable,O
securitization,O
program,O
.,O
,O
Under,O
that,O
accounts,O
receivable,O
facility,O
",",O
eligible,O
receivables,O
were,O
sold,O
to,O
third-party,O
conduits,O
through,O
a,O
wholly,O
owned,O
",",O
bankruptcy,O
remote,O
",",O
special,O
purpose,O
entity,O
that,O
is,O
not,O
consolidated,O
for,O
financial,O
reporting,O
purposes,O
.,O
,O
SunGard,I-BUSINESS
serviced,O
the,O
receivables,O
and,O
charged,O
a,O
monthly,O
servicing,O
fee,O
at,O
market,O
rates,O
.,O
,O
The,O
third-party,O
conduits,O
were,O
sponsored,O
by,O
certain,O
lenders,O
under,O
SunGard,O
s,O
senior,O
secured,O
credit,O
facilities,O
.,O
,O
Interest,O
Rate,O
Swaps,O
We,O
use,O
interest,O
rate,O
swap,O
agreements,O
to,O
manage,O
the,O
amount,O
of,O
our,O
floating,O
rate,O
debt,O
in,O
order,O
to,O
reduce,O
our,O
exposure,O
to,O
variable,O
rate,O
interest,O
payments,O
associated,O
with,O
the,O
senior,O
secured,O
credit,O
facilities,O
.,O
,O
We,O
pay,O
a,O
stream,O
of,O
fixed,O
interest,O
payments,O
for,O
the,O
term,O
of,O
the,O
swap,O
",",O
and,O
in,O
turn,O
",",O
receive,O
variable,O
interest,O
payments,O
based,O
on,O
one-month,O
LIBOR,O
or,O
three-month,O
LIBOR,O
(,O
0.26,O
%,O
and,O
0.30,O
%,O
",",O
respectively,O
",",O
at,O
December,O
31,O
",",O
2010,O
),O
.,O
,O
The,O
net,O
receipt,O
or,O
payment,O
from,O
the,O
interest,O
rate,O
swap,O
agreements,O
is,O
included,O
in,O
interest,O
expense,O
.,O
,O
A,O
summary,O
of,O
our,O
interest,O
rate,O
swaps,O
at,O
December,O
31,O
",",O
2010,O
follows,O
:,O
,O
Contractual,O
Obligations,O
At,O
December,O
31,O
",",O
2010,O
",",O
our,O
contractual,O
obligations,O
follow,O
(,O
in,O
millions,O
),O
:,O
,O
At,O
December,O
31,O
",",O
2010,O
",",O
contingent,O
purchase,O
price,O
obligations,O
that,O
depend,O
upon,O
the,O
operating,O
performance,O
of,O
certain,O
acquired,O
businesses,O
were,O
less,O
than,O
$,O
1,O
million,O
.,O
,O
We,O
also,O
have,O
outstanding,O
letters,O
of,O
credit,O
and,O
bid,O
bonds,O
that,O
total,O
approximately,O
$,O
42,O
million,O
.,O
,O
We,O
expect,O
our,O
cash,O
on,O
hand,O
",",O
cash,O
flows,O
from,O
operations,O
",",O
availability,O
under,O
our,O
Credit,O
Agreement,O
and,O
availability,O
under,O
our,O
accounts,O
receivable,O
revolving,O
commitment,O
to,O
provide,O
sufficient,O
liquidity,O
to,O
fund,O
our,O
current,O
obligations,O
",",O
projected,O
working,O
capital,O
requirements,O
and,O
capital,O
spending,O
for,O
a,O
period,O
that,O
includes,O
at,O
least,O
the,O
next,O
12,O
months,O
.,O
,O
Depending,O
on,O
market,O
conditions,O
",",O
SunGard,I-BUSINESS
",",O
its,O
Sponsors,O
and,O
their,O
affiliates,O
may,O
from,O
time,O
to,O
time,O
repurchase,O
debt,O
securities,O
issued,O
by,O
SunGard,I-BUSINESS
",",O
in,O
privately,O
negotiated,O
or,O
open,O
market,O
transactions,O
",",O
by,O
tender,O
offer,O
or,O
otherwise,O
.,O
,O
Covenant,O
Compliance,O
Our,O
senior,O
secured,O
credit,O
facilities,O
and,O
the,O
indentures,O
governing,O
our,O
senior,O
notes,O
due,O
2015,O
",",O
2018,O
and,O
2020,O
and,O
our,O
senior,O
subordinated,O
notes,O
due,O
2015,O
contain,O
various,O
covenants,O
that,O
limit,O
our,O
ability,O
to,O
engage,O
in,O
specified,O
types,O
of,O
transactions,O
.,O
,O
These,O
covenants,O
limit,O
our,O
ability,O
to,O
",",O
among,O
other,O
things,O
:,O
,O
In,O
addition,O
",",O
pursuant,O
to,O
the,O
Principal,O
Investor,O
Agreement,O
by,O
and,O
among,O
our,O
Holding,O
Companies,O
and,O
the,O
Sponsors,O
",",O
we,O
are,O
required,O
to,O
obtain,O
approval,O
from,O
certain,O
Sponsors,O
prior,O
to,O
the,O
declaration,O
or,O
payment,O
of,O
any,O
dividend,O
by,O
us,O
or,O
any,O
of,O
our,O
subsidiaries,O
(,O
other,O
than,O
dividends,O
payable,O
to,O
us,O
or,O
any,O
of,O
our,O
wholly,O
owned,O
subsidiaries,O
),O
.,O
,O
Under,O
the,O
senior,O
secured,O
credit,O
facilities,O
",",O
we,O
are,O
required,O
to,O
satisfy,O
and,O
maintain,O
specified,O
financial,O
ratios,O
and,O
other,O
financial,O
condition,O
tests,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2010,O
",",O
we,O
are,O
in,O
compliance,O
with,O
all,O
financial,O
and,O
nonfinancial,O
covenants,O
.,O
,O
While,O
we,O
believe,O
that,O
we,O
will,O
remain,O
in,O
compliance,O
",",O
our,O
continued,O
ability,O
to,O
meet,O
those,O
financial,O
ratios,O
and,O
tests,O
can,O
be,O
affected,O
by,O
events,O
beyond,O
our,O
control,O
",",O
and,O
there,O
is,O
no,O
assurance,O
that,O
we,O
will,O
continue,O
to,O
meet,O
those,O
ratios,O
and,O
tests,O
.,O
,O
Adjusted,O
earnings,O
before,O
interest,O
",",O
taxes,O
",",O
depreciation,O
and,O
amortization,O
and,O
goodwill,O
impairment,O
(,O
EBITDA,O
),O
is,O
a,O
non-GAAP,I-MISCELLANEOUS
measure,O
used,O
to,O
determine,O
our,O
compliance,O
with,O
certain,O
covenants,O
contained,O
in,O
the,O
indentures,O
governing,O
the,O
senior,O
notes,O
due,O
2015,O
",",O
2018,O
and,O
2020,O
and,O
senior,O
subordinated,O
notes,O
due,O
2015,O
and,O
in,O
our,O
senior,O
secured,O
credit,O
facilities,O
.,O
,O
Adjusted,O
EBITDA,O
is,O
defined,O
as,O
EBITDA,O
further,O
adjusted,O
to,O
exclude,O
unusual,O
items,O
and,O
other,O
adjustments,O
permitted,O
in,O
calculating,O
covenant,O
compliance,O
under,O
the,O
indentures,O
and,O
our,O
senior,O
secured,O
credit,O
facilities,O
.,O
,O
We,O
believe,O
that,O
including,O
supplementary,O
information,O
concerning,O
Adjusted,O
EBITDA,O
is,O
appropriate,O
to,O
provide,O
additional,O
information,O
to,O
investors,O
to,O
demonstrate,O
compliance,O
with,O
our,O
financing,O
covenants,O
.,O
,O
The,O
breach,O
of,O
covenants,O
in,O
our,O
senior,O
secured,O
credit,O
facilities,O
that,O
are,O
tied,O
to,O
ratios,O
based,O
on,O
Adjusted,O
EBITDA,O
could,O
result,O
in,O
a,O
default,O
and,O
the,O
lenders,O
could,O
elect,O
to,O
declare,O
all,O
amounts,O
borrowed,O
due,O
and,O
payable,O
.,O
,O
Any,O
such,O
acceleration,O
would,O
also,O
result,O
in,O
a,O
default,O
under,O
our,O
indentures,O
.,O
,O
Additionally,O
",",O
under,O
our,O
debt,O
agreements,O
",",O
our,O
ability,O
to,O
engage,O
in,O
activities,O
such,O
as,O
incurring,O
additional,O
indebtedness,O
",",O
making,O
investments,O
and,O
paying,O
dividends,O
is,O
also,O
tied,O
to,O
ratios,O
based,O
on,O
Adjusted,O
EBITDA,O
.,O
,O
Adjusted,O
EBITDA,O
does,O
not,O
represent,O
net,O
income,O
(,O
loss,O
),O
or,O
cash,O
flow,O
from,O
operations,O
as,O
those,O
terms,O
are,O
defined,O
by,O
GAAP,I-MISCELLANEOUS
and,O
does,O
not,O
necessarily,O
indicate,O
whether,O
cash,O
flows,O
will,O
be,O
sufficient,O
to,O
fund,O
cash,O
needs,O
.,O
,O
While,O
Adjusted,O
EBITDA,O
and,O
similar,O
measures,O
are,O
frequently,O
used,O
as,O
measures,O
of,O
operations,O
and,O
the,O
ability,O
to,O
meet,O
debt,O
service,O
requirements,O
",",O
these,O
terms,O
are,O
not,O
necessarily,O
comparable,O
to,O
other,O
similarly,O
titled,O
captions,O
of,O
other,O
companies,O
due,O
to,O
the,O
potential,O
inconsistencies,O
in,O
the,O
method,O
of,O
calculation,O
.,O
,O
Adjusted,O
EBITDA,O
does,O
not,O
reflect,O
the,O
impact,O
of,O
earnings,O
or,O
charges,O
resulting,O
from,O
matters,O
that,O
we,O
may,O
consider,O
not,O
to,O
be,O
indicative,O
of,O
our,O
ongoing,O
operations,O
.,O
,O
In,O
particular,O
",",O
the,O
definition,O
of,O
Adjusted,O
EBITDA,O
in,O
the,O
indentures,O
allows,O
us,O
to,O
add,O
back,O
certain,O
noncash,O
",",O
extraordinary,O
or,O
unusual,O
charges,O
that,O
are,O
deducted,O
in,O
calculating,O
net,O
income,O
(,O
loss,O
),O
.,O
,O
However,O
",",O
these,O
are,O
expenses,O
that,O
may,O
recur,O
",",O
vary,O
greatly,O
and,O
are,O
difficult,O
to,O
predict,O
.,O
,O
Further,O
",",O
our,O
debt,O
instruments,O
require,O
that,O
Adjusted,O
EBITDA,O
be,O
calculated,O
for,O
the,O
most,O
recent,O
four,O
fiscal,O
quarters,O
.,O
,O
As,O
a,O
result,O
",",O
the,O
measure,O
can,O
be,O
disproportionately,O
affected,O
by,O
a,O
particularly,O
strong,O
or,O
weak,O
quarter,O
.,O
,O
Further,O
",",O
it,O
may,O
not,O
be,O
comparable,O
to,O
the,O
measure,O
for,O
any,O
subsequent,O
four-quarter,O
period,O
or,O
any,O
complete,O
fiscal,O
year,O
.,O
,O
The,O
following,O
is,O
a,O
reconciliation,O
of,O
net,O
loss,O
",",O
which,O
is,O
a,O
GAAP,I-LEGISLATION/ACT
measure,O
of,O
our,O
operating,O
results,O
",",O
to,O
Adjusted,O
EBITDA,O
as,O
defined,O
in,O
our,O
debt,O
agreements,O
.,O
,O
The,O
terms,O
and,O
related,O
calculations,O
are,O
defined,O
in,O
the,O
indentures,O
.,O
,O
Our,O
covenant,O
requirements,O
and,O
actual,O
ratios,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
are,O
as,O
follows,O
:,O
,O
We,O
do,O
not,O
use,O
derivative,O
financial,O
instruments,O
for,O
trading,O
or,O
speculative,O
purposes,O
.,O
,O
We,O
have,O
invested,O
our,O
available,O
cash,O
in,O
short-term,O
",",O
highly,O
liquid,O
financial,O
instruments,O
",",O
substantially,O
all,O
having,O
initial,O
maturities,O
of,O
three,O
months,O
or,O
less,O
.,O
,O
When,O
necessary,O
",",O
we,O
have,O
borrowed,O
to,O
fund,O
acquisitions,O
.,O
,O
At,O
December,O
31,O
",",O
2010,O
",",O
we,O
had,O
total,O
debt,O
of,O
$,O
8.06,O
billion,O
",",O
including,O
$,O
4.71,O
billion,O
of,O
variable,O
rate,O
debt,O
.,O
,O
our,O
variable,O
rate,O
debt,O
.,O
,O
Swap,O
agreements,O
expiring,O
in,O
February,O
2011,O
have,O
notional,O
values,O
of,O
$,O
800,O
million,O
and,O
$,O
750,O
million,O
and,O
effectively,O
fix,O
the,O
variable,O
portion,O
of,O
our,O
interest,O
rates,O
at,O
5.00,O
%,O
and,O
3.17,O
%,O
",",O
respectively,O
.,O
,O
Swap,O
agreements,O
expiring,O
in,O
February,O
2012,O
have,O
a,O
notional,O
value,O
of,O
$,O
1.2,O
billion,O
and,O
effectively,O
fix,O
the,O
variable,O
portion,O
of,O
our,O
interest,O
rates,O
at,O
1.78,O
%,O
.,O
,O
Swap,O
agreements,O
expiring,O
in,O
May,O
2013,O
have,O
a,O
notional,O
value,O
of,O
$,O
500,O
million,O
and,O
effectively,O
fix,O
the,O
variable,O
portion,O
of,O
our,O
interest,O
rates,O
at,O
1.99,O
%,O
.,O
,O
Our,O
remaining,O
variable,O
rate,O
debt,O
of,O
$,O
1.46,O
billion,O
is,O
subject,O
to,O
changes,O
in,O
underlying,O
interest,O
rates,O
",",O
and,O
",",O
accordingly,O
",",O
our,O
interest,O
payments,O
will,O
fluctuate,O
.,O
,O
During,O
the,O
period,O
when,O
all,O
of,O
our,O
interest,O
rate,O
swap,O
agreements,O
are,O
effective,O
",",O
a,O
1,O
%,O
change,O
in,O
interest,O
rates,O
would,O
result,O
in,O
a,O
change,O
in,O
interest,O
of,O
approximately,O
$,O
15,O
million,O
per,O
year,O
.,O
,O
Upon,O
the,O
expiration,O
of,O
each,O
interest,O
rate,O
swap,O
agreement,O
in,O
February,O
2011,O
and,O
2012,O
and,O
May,O
2013,O
",",O
a,O
1,O
%,O
change,O
in,O
interest,O
rates,O
would,O
result,O
in,O
a,O
change,O
in,O
interest,O
of,O
approximately,O
$,O
30,O
million,O
",",O
$,O
42,O
million,O
and,O
$,O
47,O
million,O
per,O
year,O
",",O
respectively,O
.,O
,O
See,O
Note,O
5,O
to,O
Consolidated,O
Financial,O
Statements,O
.,O
,O
During,O
2010,O
",",O
approximately,O
31,O
%,O
of,O
our,O
revenue,O
was,O
from,O
customers,O
outside,O
the,O
United,I-LOCATION
States,I-LOCATION
with,O
approximately,O
67,O
%,O
of,O
this,O
revenue,O
coming,O
from,O
customers,O
located,O
in,O
the,O
United,I-LOCATION
Kingdom,I-LOCATION
and,O
Continental,I-LOCATION
Europe,I-LOCATION
.,O
,O
Only,O
a,O
portion,O
of,O
the,O
revenue,O
from,O
customers,O
outside,O
the,O
United,I-LOCATION
States,I-LOCATION
is,O
denominated,O
in,O
other,O
currencies,O
",",O
the,O
majority,O
being,O
pounds,O
sterling,O
and,O
euros,O
.,O
,O
Revenue,O
and,O
expenses,O
of,O
our,O
foreign,O
operations,O
are,O
generally,O
denominated,O
in,O
their,O
respective,O
local,O
currencies,O
.,O
,O
We,O
continue,O
to,O
monitor,O
our,O
exposure,O
to,O
currency,O
exchange,O
rates,O
.,O
,O
We,O
enter,O
into,O
currency,O
hedging,O
transactions,O
from,O
time,O
to,O
time,O
to,O
mitigate,O
certain,O
currency,O
exposures,O
.,O
,O
-DOCSTART-,O
,O
For,O
the,O
transition,O
period,O
from,O
______________,O
to,O
_____________,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
:,O
(,O
1,O
),O
has,O
filed,O
all,O
reports,O
required,O
to,O
be,O
filed,O
by,O
Section,O
13,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
during,O
the,O
preceding,O
12,O
months,O
(,O
or,O
for,O
such,O
shorter,O
period,O
that,O
the,O
registrant,O
was,O
required,O
to,O
file,O
such,O
reports,O
),O
",",O
and,O
(,O
2,O
),O
has,O
been,O
subject,O
to,O
such,O
filing,O
requirements,O
for,O
the,O
past,O
90,O
days,O
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
has,O
submitted,O
electronically,O
and,O
posted,O
on,O
its,O
corporate,O
Web,O
site,O
",",O
if,O
any,O
",",O
every,O
Interactive,O
Data,O
File,O
required,O
to,O
be,O
submitted,O
and,O
posted,O
pursuant,O
to,O
Rule,O
405,O
of,O
Regulation,I-LEGISLATION/ACT
S-T,I-LEGISLATION/ACT
during,O
the,O
preceding,O
12,O
months,O
(,O
or,O
for,O
such,O
shorter,O
period,O
that,O
the,O
registrant,O
was,O
required,O
to,O
submit,O
and,O
post,O
such,O
files,O
),O
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
large,O
accelerated,O
filer,O
",",O
an,O
accelerated,O
filed,O
",",O
a,O
non-accelerated,O
filer,O
or,O
a,O
smaller,O
reporting,O
company,O
.,O
,O
See,O
definitions,O
of,O
“,O
large,O
accelerated,O
filer,O
",",O
”,O
“,O
accelerated,O
filer,O
”,O
and,O
“,O
smaller,O
reporting,O
company,O
”,O
in,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
shell,O
company,O
(,O
as,O
defined,O
in,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
.,O
,O
As,O
of,O
May,O
16,O
",",O
2011,O
",",O
there,O
were,O
"3,157,096",O
shares,O
of,O
the,O
registrant,O
’,O
s,O
common,O
stock,O
outstanding,O
.,O
,O
The,O
accompanying,O
unaudited,O
interim,O
financial,O
statements,O
have,O
been,O
prepared,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
for,O
interim,O
financial,O
information,O
and,O
with,O
the,O
instructions,O
to,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
and,O
Regulation,I-LEGISLATION/ACT
S-X,I-LEGISLATION/ACT
.,O
,O
Accordingly,O
",",O
they,O
do,O
not,O
include,O
all,O
of,O
the,O
information,O
and,O
footnotes,O
required,O
by,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
for,O
complete,O
financial,O
statements,O
.,O
,O
In,O
the,O
opinion,O
of,O
management,O
",",O
all,O
adjustments,O
(,O
consisting,O
only,O
of,O
normal,O
recurring,O
accruals,O
),O
considered,O
necessary,O
for,O
a,O
fair,O
presentation,O
have,O
been,O
included,O
.,O
,O
Operating,O
results,O
for,O
the,O
three,O
month,O
period,O
ended,O
March,O
31,O
",",O
2011,O
are,O
not,O
necessarily,O
indicative,O
of,O
the,O
results,O
that,O
may,O
be,O
expected,O
for,O
the,O
full,O
year,O
.,O
,O
The,O
December,O
31,O
",",O
2010,O
balance,O
sheet,O
data,O
was,O
derived,O
from,O
audited,O
financial,O
statements,O
",",O
but,O
does,O
not,O
include,O
all,O
disclosures,O
required,O
by,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
.,O
,O
For,O
additional,O
information,O
",",O
refer,O
to,O
the,O
financial,O
statements,O
and,O
footnotes,O
thereto,O
included,O
in,O
Polonia,O
Bancorp,O
’,O
s,O
(,O
the,O
“,O
Company,O
”,O
),O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
Use,O
of,O
Estimates,O
in,O
the,O
Preparation,O
of,O
Financial,O
Statements,O
.,O
,O
The,O
preparation,O
of,O
financial,O
statements,O
in,O
conformity,O
with,O
U.,I-LEGISLATION/ACT
S.,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
requires,O
management,O
to,O
make,O
estimates,O
and,O
assumptions,O
that,O
affect,O
certain,O
recorded,O
amounts,O
and,O
disclosures,O
.,O
,O
Accordingly,O
",",O
actual,O
results,O
could,O
differ,O
from,O
those,O
estimates,O
.,O
,O
The,O
most,O
significant,O
estimate,O
pertains,O
to,O
the,O
allowance,O
for,O
loan,O
losses,O
.,O
,O
In,O
October,O
",",O
2010,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
ASU,I-LEGISLATION/ACT
2010-26,O
",",O
Accounting,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Costs,I-MISCELLANEOUS
Associated,I-MISCELLANEOUS
with,I-MISCELLANEOUS
Acquiring,I-MISCELLANEOUS
or,I-MISCELLANEOUS
Renewing,I-MISCELLANEOUS
Insurance,I-MISCELLANEOUS
Contracts,I-MISCELLANEOUS
.,O
,O
This,O
ASU,I-LEGISLATION/ACT
addresses,O
the,O
diversity,O
in,O
practice,O
regarding,O
the,O
interpretation,O
of,O
which,O
costs,O
relating,O
to,O
the,O
acquisition,O
of,O
new,O
or,O
renewal,O
insurance,O
contracts,O
qualify,O
for,O
deferral,O
",",O
The,O
amendments,O
are,O
effective,O
for,O
fiscal,O
years,O
and,O
interim,O
periods,O
within,O
those,O
fiscal,O
years,O
",",O
beginning,O
after,O
December,O
15,O
",",O
2011,O
and,O
are,O
not,O
expected,O
to,O
have,O
a,O
significant,O
impact,O
on,O
the,O
Company,O
’,O
s,O
financial,O
statements,O
.,O
,O
In,O
January,O
2011,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
ASU,I-LEGISLATION/ACT
2011-01,O
",",O
Receivables,I-MISCELLANEOUS
(,O
Topic,O
310,O
),O
:,O
Deferral,I-MISCELLANEOUS
of,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Effective,I-MISCELLANEOUS
Date,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Disclosures,I-MISCELLANEOUS
about,I-MISCELLANEOUS
Troubled,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Restructurings,I-MISCELLANEOUS
in,O
Update,O
No.,O
The,O
amendments,O
in,O
this,O
Update,O
temporarily,O
delay,O
the,O
effective,O
date,O
of,O
the,O
disclosures,O
about,O
troubled,O
debt,O
restructurings,O
in,O
Update,O
2010-20,O
",",O
enabling,O
public-entity,O
creditors,O
to,O
provide,O
those,O
disclosures,O
after,O
the,O
FASB,I-GOVERNMENT
clarifies,O
the,O
guidance,O
for,O
determining,O
what,O
constitutes,O
a,O
troubled,O
debt,O
restructuring,O
.,O
,O
The,O
deferral,O
in,O
this,O
Update,O
will,O
result,O
in,O
more,O
consistent,O
disclosures,O
about,O
troubled,O
debt,O
restructurings,O
.,O
,O
This,O
amendment,O
does,O
not,O
defer,O
the,O
effective,O
date,O
of,O
the,O
other,O
disclosure,O
requirements,O
in,O
Update,O
2010-20,O
.,O
,O
In,O
the,O
proposed,O
Update,O
for,O
determining,O
what,O
constitutes,O
a,O
troubled,O
debt,O
restructuring,O
",",O
the,O
FASB,I-GOVERNMENT
proposed,O
that,O
the,O
clarifications,O
would,O
be,O
effective,O
for,O
interim,O
and,O
annual,O
periods,O
ending,O
after,O
June,O
15,O
",",O
2011,O
.,O
,O
For,O
the,O
new,O
disclosures,O
about,O
troubled,O
debt,O
restructurings,O
in,O
Update,O
2010-20,O
",",O
those,O
clarifications,O
would,O
be,O
applied,O
retrospectively,O
to,O
the,O
beginning,O
of,O
the,O
fiscal,O
year,O
in,O
which,O
the,O
proposal,O
is,O
adopted,O
.,O
,O
The,O
adoption,O
of,O
this,O
guidance,O
in,O
not,O
expected,O
to,O
have,O
a,O
significant,O
impact,O
on,O
the,O
Company,O
’,O
s,O
financial,O
statements,O
.,O
,O
In,O
April,O
2011,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
ASU,I-LEGISLATION/ACT
2011-02,O
",",O
Receivables,I-MISCELLANEOUS
(,O
Topic,O
310,O
),O
:,O
A,I-MISCELLANEOUS
Creditor,I-MISCELLANEOUS
’,I-MISCELLANEOUS
s,I-MISCELLANEOUS
Determination,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Whether,I-MISCELLANEOUS
a,I-MISCELLANEOUS
Restructuring,I-MISCELLANEOUS
Is,I-MISCELLANEOUS
a,I-MISCELLANEOUS
Troubled,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Restructuring,I-MISCELLANEOUS
.,O
,O
The,O
amendments,O
in,O
this,O
Update,O
provide,O
additional,O
guidance,O
or,O
clarification,O
to,O
help,O
creditors,O
in,O
determining,O
whether,O
a,O
creditor,O
has,O
granted,O
a,O
concession,O
and,O
whether,O
a,O
debtor,O
is,O
experiencing,O
financial,O
difficulties,O
for,O
purposes,O
of,O
determining,O
whether,O
a,O
restructuring,O
constitutes,O
a,O
troubled,O
debt,O
restructuring,O
.,O
,O
The,O
amendments,O
in,O
this,O
Update,O
are,O
effective,O
for,O
the,O
first,O
interim,O
or,O
annual,O
reporting,O
period,O
beginning,O
on,O
or,O
after,O
June,O
15,O
",",O
2011,O
",",O
and,O
should,O
be,O
applied,O
retrospectively,O
to,O
the,O
beginning,O
annual,O
period,O
of,O
adoption,O
.,O
,O
As,O
a,O
result,O
of,O
applying,O
these,O
amendments,O
",",O
an,O
entity,O
may,O
identify,O
receivables,O
that,O
are,O
newly,O
considered,O
impaired,O
.,O
,O
For,O
purposes,O
of,O
measuring,O
impairment,O
of,O
those,O
receivables,O
",",O
an,O
entity,O
should,O
apply,O
the,O
amendments,O
prospectively,O
for,O
the,O
first,O
interim,O
or,O
annual,O
period,O
beginning,O
on,O
or,O
after,O
June,O
15,O
",",O
2011,O
.,O
,O
This,O
ASU,I-LEGISLATION/ACT
is,O
not,O
expected,O
to,O
have,O
a,O
significant,O
impact,O
on,O
the,O
Company,O
’,O
s,O
financial,O
statements,O
.,O
,O
Certain,O
items,O
previously,O
reported,O
have,O
been,O
reclassified,O
to,O
conform,O
to,O
the,O
current,O
year,O
’,O
s,O
reporting,O
format,O
.,O
,O
Such,O
reclassifications,O
did,O
not,O
affect,O
consolidated,O
net,O
income,O
or,O
consolidated,O
stockholders,O
’,O
equity,O
.,O
,O
Options,O
to,O
purchase,O
"153,903",O
shares,O
at,O
$,O
9.40,O
per,O
share,O
of,O
common,O
stock,O
as,O
of,O
March,O
31,O
",",O
2011,O
and,O
2010,O
",",O
as,O
well,O
as,O
"17,442",O
shares,O
and,O
"29,754",O
shares,O
of,O
restricted,O
stock,O
as,O
of,O
March,O
31,O
",",O
2011,O
and,O
2010,O
",",O
respectively,O
",",O
were,O
not,O
included,O
in,O
the,O
computation,O
of,O
diluted,O
earnings,O
per,O
share,O
because,O
to,O
do,O
so,O
would,O
have,O
been,O
anti-dilutive,O
.,O
,O
During,O
2010,O
",",O
the,O
Company,O
acquired,O
certain,O
assets,O
and,O
assumed,O
certain,O
liabilities,O
of,O
Earthstar,I-BUSINESS
Bank,I-BUSINESS
(,O
“,O
Earthstar,I-BUSINESS
”,O
),O
in,O
loss-share,O
transactions,O
facilitated,O
by,O
the,O
Federal,I-GOVERNMENT
Deposit,I-GOVERNMENT
Insurance,I-GOVERNMENT
Corporation,I-GOVERNMENT
(,O
“,O
FDIC,I-GOVERNMENT
”,O
),O
.,O
,O
Under,O
the,O
loss-share,O
agreements,O
",",O
the,O
Company,O
will,O
share,O
in,O
the,O
losses,O
on,O
assets,O
(,O
loans,O
and,O
other,O
real,O
estate,O
owned,O
),O
covered,O
under,O
the,O
agreement,O
(,O
referred,O
to,O
as,O
“,O
covered,O
loans,O
”,O
and,O
“,O
non-covered,O
loans,O
purchased,O
”,O
),O
.,O
,O
See,O
Note,O
3,O
of,O
the,O
notes,O
to,O
our,O
December,O
31,O
",",O
2010,O
audited,O
consolidated,O
financial,O
statements,O
contained,O
in,O
our,O
Annual,O
Report,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
for,O
additional,O
information,O
.,O
,O
In,O
complying,O
with,O
U.,I-LEGISLATION/ACT
S.,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
",",O
the,O
Company,O
has,O
developed,O
the,O
following,O
table,O
",",O
which,O
includes,O
the,O
tax,O
effects,O
of,O
the,O
components,O
of,O
other,O
comprehensive,O
income,O
.,O
,O
Other,O
comprehensive,O
income,O
consists,O
of,O
net,O
unrealized,O
gains,O
on,O
securities,O
available,O
for,O
sale,O
.,O
,O
Other,O
comprehensive,O
income,O
and,O
related,O
tax,O
effects,O
for,O
the,O
indicated,O
periods,O
",",O
consists,O
of,O
:,O
,O
The,O
amortized,O
cost,O
and,O
fair,O
value,O
of,O
investment,O
securities,O
available,O
for,O
sale,O
are,O
summarized,O
as,O
follows,O
:,O
,O
The,O
following,O
table,O
shows,O
the,O
Company,O
’,O
s,O
gross,O
unrealized,O
losses,O
and,O
fair,O
value,O
",",O
aggregated,O
by,O
investment,O
category,O
and,O
length,O
of,O
time,O
that,O
the,O
individual,O
securities,O
have,O
been,O
in,O
a,O
continuous,O
loss,O
position,O
.,O
,O
The,O
Company,O
reviews,O
its,O
position,O
quarterly,O
and,O
has,O
determined,O
that,O
at,O
March,O
31,O
",",O
2011,O
",",O
the,O
declines,O
outlined,O
in,O
the,O
above,O
table,O
represent,O
temporary,O
declines,O
and,O
the,O
Company,O
does,O
not,O
intend,O
to,O
sell,O
these,O
securities,O
and,O
does,O
not,O
believe,O
they,O
will,O
be,O
required,O
to,O
sell,O
these,O
securities,O
before,O
recovery,O
of,O
their,O
cost,O
basis,O
",",O
which,O
may,O
be,O
at,O
maturity,O
.,O
,O
There,O
were,O
23,O
positions,O
that,O
were,O
temporarily,O
impaired,O
at,O
March,O
31,O
",",O
2011,O
and,O
eight,O
positions,O
that,O
were,O
temporarily,O
impaired,O
at,O
December,O
31,O
",",O
2010,O
.,O
,O
The,O
Company,O
has,O
concluded,O
that,O
the,O
unrealized,O
losses,O
disclosed,O
above,O
are,O
not,O
other,O
than,O
temporary,O
but,O
are,O
the,O
result,O
of,O
interest,O
rate,O
changes,O
",",O
sector,O
credit,O
ratings,O
changes,O
or,O
company,O
specific,O
ratings,O
changes,O
that,O
are,O
not,O
expected,O
to,O
result,O
in,O
the,O
non-collection,O
of,O
principal,O
and,O
interest,O
during,O
the,O
period,O
.,O
,O
The,O
amortized,O
cost,O
and,O
fair,O
value,O
of,O
debt,O
securities,O
at,O
March,O
31,O
",",O
2011,O
",",O
by,O
contractual,O
maturity,O
",",O
are,O
shown,O
below,O
.,O
,O
Mortgage-backed,O
securities,O
provide,O
for,O
periodic,O
",",O
generally,O
monthly,O
",",O
payments,O
of,O
principal,O
and,O
interest,O
and,O
have,O
contractual,O
maturities,O
ranging,O
from,O
1,O
to,O
32,O
years,O
.,O
,O
Expected,O
maturities,O
will,O
differ,O
from,O
contractual,O
maturities,O
because,O
borrowers,O
may,O
have,O
the,O
right,O
to,O
call,O
or,O
prepay,O
obligations,O
with,O
or,O
without,O
call,O
or,O
prepayment,O
penalties,O
.,O
,O
For,O
the,O
period,O
ending,O
March,O
31,O
",",O
2011,O
",",O
the,O
Company,O
realized,O
no,O
gross,O
gains,O
from,O
the,O
sale,O
of,O
investments,O
securities,O
as,O
compared,O
to,O
realized,O
gross,O
gains,O
of,O
$,O
"293,815",O
and,O
proceeds,O
of,O
$,O
"6,483,428",O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
Loans,O
receivable,O
consist,O
of,O
the,O
following,O
:,O
,O
The,O
Company,O
’,O
s,O
loan,O
portfolio,O
consists,O
predominantly,O
of,O
one-to-four,O
family,O
unit,O
first,O
mortgage,O
loans,O
in,O
the,O
northwest,O
suburban,O
area,O
of,O
metropolitan,O
Philadelphia,I-LOCATION
",",O
primarily,O
in,O
Montgomery,I-LOCATION
and,O
Bucks,I-LOCATION
Counties,I-LOCATION
.,O
,O
These,O
loans,O
are,O
typically,O
secured,O
by,O
first,O
lien,O
positions,O
on,O
the,O
respective,O
real,O
estate,O
properties,O
and,O
are,O
subject,O
to,O
the,O
Bank,O
’,O
s,O
loan,O
underwriting,O
policies,O
.,O
,O
In,O
general,O
",",O
the,O
Company,O
’,O
s,O
loan,O
portfolio,O
performance,O
at,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
is,O
dependent,O
upon,O
the,O
local,O
economic,O
conditions,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
",",O
the,O
Company,O
had,O
$,O
31.7,O
million,O
(,O
net,O
of,O
fair,O
value,O
adjustments,O
),O
of,O
covered,O
loans,O
(,O
covered,O
under,O
loss,O
share,O
agreements,O
with,O
the,O
FDIC,I-GOVERNMENT
),O
.,O
,O
Covered,O
loans,O
were,O
recorded,O
at,O
fair,O
value,O
pursuant,O
to,O
the,O
purchase,O
accounting,O
guidelines,O
.,O
,O
Purchased,O
loans,O
acquired,O
in,O
a,O
business,O
combination,O
",",O
including,O
loans,O
purchased,O
in,O
our,O
FDIC-assisted,I-MISCELLANEOUS
transactions,O
",",O
are,O
recorded,O
at,O
estimated,O
fair,O
value,O
on,O
their,O
purchase,O
date,O
without,O
a,O
carryover,O
of,O
the,O
related,O
allowance,O
for,O
loan,O
losses,O
.,O
,O
Upon,O
acquisition,O
",",O
the,O
Company,O
evaluated,O
whether,O
each,O
acquired,O
loan,O
(,O
regardless,O
of,O
size,O
),O
was,O
within,O
the,O
scope,O
of,O
ASC,I-LEGISLATION/ACT
310-30,O
",",O
Receivables-Loans,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Securities,I-MISCELLANEOUS
Acquired,I-MISCELLANEOUS
with,I-MISCELLANEOUS
Deteriorated,I-MISCELLANEOUS
Credit,I-MISCELLANEOUS
Quality,I-MISCELLANEOUS
.,O
,O
Purchased,O
credit,O
–impaired,O
loans,O
are,O
loans,O
that,O
have,O
evidence,O
of,O
credit,O
deterioration,O
since,O
origination,O
and,O
it,O
is,O
probable,O
at,O
the,O
date,O
of,O
acquisition,O
that,O
the,O
Company,O
will,O
not,O
collect,O
all,O
contractually,O
required,O
principal,O
and,O
interest,O
payments,O
.,O
,O
The,O
carrying,O
value,O
of,O
covered,O
loans,O
acquired,O
with,O
deteriorated,O
credit,O
quality,O
was,O
$,O
1.9,O
million,O
at,O
March,O
31,O
",",O
2011,O
.,O
,O
There,O
were,O
no,O
material,O
increases,O
or,O
decreases,O
in,O
the,O
expected,O
cash,O
flows,O
of,O
covered,O
loans,O
between,O
December,O
10,O
",",O
2010,O
(,O
the,O
“,O
acquisition,O
date,O
”,O
),O
and,O
March,O
31,O
",",O
2011,O
.,O
,O
The,O
fair,O
value,O
of,O
purchased,O
credit-impaired,O
loans,O
",",O
on,O
the,O
acquisition,O
date,O
",",O
was,O
determined,O
",",O
primarily,O
based,O
on,O
the,O
fair,O
value,O
of,O
loan,O
collateral,O
.,O
,O
The,O
carrying,O
value,O
of,O
covered,O
loans,O
",",O
not,O
exhibiting,O
evidence,O
of,O
credit,O
impairment,O
at,O
March,O
31,O
",",O
2011,O
was,O
$,O
29.8,O
million,O
.,O
,O
The,O
fair,O
value,O
of,O
loans,O
that,O
were,O
not,O
credit-impaired,O
was,O
determined,O
based,O
on,O
estimates,O
of,O
losses,O
on,O
defaults,O
and,O
other,O
market,O
factors,O
.,O
,O
The,O
components,O
of,O
covered,O
loans,O
by,O
portfolio,O
class,O
as,O
of,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
were,O
as,O
follows,O
:,O
,O
The,O
following,O
table,O
shows,O
the,O
breakdown,O
of,O
covered,O
loans,O
that,O
are,O
current,O
",",O
past,O
due,O
",",O
non-accrual,O
",",O
and,O
loans,O
past,O
due,O
greater,O
than,O
90,O
days,O
and,O
still,O
accruing,O
as,O
of,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
.,O
,O
The,O
following,O
table,O
presents,O
covered,O
loans,O
that,O
currently,O
are,O
not,O
accruing,O
interest,O
as,O
of,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
.,O
,O
Changes,O
in,O
the,O
accretable,O
yield,O
for,O
purchased,O
credit-impaired,O
loans,O
were,O
as,O
follows,O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
.,O
,O
In,O
our,O
FDIC-assisted,I-MISCELLANEOUS
transaction,O
(,O
see,O
Note,O
3,O
),O
",",O
the,O
fair,O
value,O
of,O
purchased,O
credit-impaired,O
loans,O
",",O
on,O
the,O
acquisition,O
date,O
",",O
was,O
determined,O
based,O
on,O
assigned,O
risk,O
ratings,O
",",O
expected,O
cash,O
flows,O
and,O
the,O
fair,O
value,O
of,O
loan,O
collateral,O
.,O
,O
The,O
fair,O
value,O
of,O
loans,O
that,O
were,O
not,O
credit-impaired,O
was,O
determined,O
based,O
on,O
estimates,O
of,O
losses,O
on,O
defaults,O
and,O
other,O
market,O
factors,O
.,O
,O
Due,O
to,O
the,O
loss-share,O
agreement,O
with,O
the,O
FDIC,I-GOVERNMENT
",",O
the,O
Company,O
recorded,O
a,O
receivable,O
from,O
the,O
FDIC,I-GOVERNMENT
equal,O
to,O
the,O
present,O
value,O
of,O
the,O
corresponding,O
reimbursement,O
percentages,O
on,O
the,O
estimated,O
losses,O
embedded,O
in,O
the,O
loan,O
portfolio,O
.,O
,O
Management,O
has,O
an,O
established,O
methodology,O
to,O
determine,O
the,O
adequacy,O
of,O
the,O
allowance,O
for,O
loan,O
losses,O
that,O
assesses,O
the,O
risks,O
and,O
losses,O
inherent,O
in,O
the,O
loan,O
portfolio,O
.,O
,O
For,O
purposes,O
of,O
determining,O
the,O
allowance,O
for,O
loan,O
losses,O
",",O
the,O
Company,O
has,O
segmented,O
certain,O
loans,O
in,O
the,O
portfolio,O
by,O
product,O
type,O
.,O
,O
Loans,O
are,O
segmented,O
into,O
the,O
following,O
pools,O
:,O
commercial,O
loans,O
",",O
commercial,O
real,O
estate,O
loans,O
",",O
residential,O
real,O
estate,O
loans,O
",",O
and,O
consumer,O
loans,O
.,O
,O
Historical,O
loss,O
percentages,O
for,O
each,O
risk,O
category,O
are,O
calculated,O
and,O
used,O
as,O
the,O
basis,O
for,O
calculating,O
allowance,O
allocations,O
.,O
,O
These,O
historical,O
loss,O
percentages,O
are,O
calculated,O
over,O
a,O
three,O
year,O
period,O
for,O
all,O
portfolio,O
segments,O
.,O
,O
Certain,O
qualitative,O
factors,O
are,O
then,O
added,O
to,O
the,O
historical,O
allocation,O
percentage,O
to,O
get,O
the,O
adjusted,O
factor,O
to,O
be,O
applied,O
to,O
nonclassified,O
loans,O
.,O
,O
The,O
following,O
qualitative,O
factors,O
are,O
analyzed,O
for,O
each,O
portfolio,O
segment,O
:,O
,O
These,O
qualitative,O
factors,O
are,O
reviewed,O
each,O
quarter,O
and,O
adjusted,O
based,O
upon,O
relevant,O
changes,O
within,O
the,O
portfolio,O
.,O
,O
During,O
2011,O
",",O
the,O
qualitative,O
factors,O
were,O
reviewed,O
and,O
remained,O
unchanged,O
.,O
,O
Changes,O
in,O
the,O
allowance,O
for,O
loan,O
losses,O
for,O
the,O
quarter,O
ended,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
are,O
as,O
follows,O
:,O
,O
The,O
total,O
allowance,O
reflects,O
management,O
's,O
estimate,O
of,O
loan,O
losses,O
inherent,O
in,O
the,O
loan,O
portfolio,O
at,O
the,O
balance,O
sheet,O
date,O
.,O
,O
The,O
Company,O
considers,O
the,O
allowance,O
for,O
loan,O
losses,O
of,O
$,O
"1,146,354",O
adequate,O
to,O
cover,O
loan,O
losses,O
inherent,O
in,O
the,O
loan,O
portfolio,O
",",O
at,O
March,O
31,O
",",O
2011,O
.,O
,O
Included,O
in,O
the,O
allowance,O
for,O
loan,O
losses,O
is,O
$,O
"283,715",O
related,O
to,O
loans,O
covered,O
by,O
loss-share,O
agreements,O
with,O
the,O
FDIC,I-GOVERNMENT
.,O
,O
The,O
following,O
table,O
presents,O
the,O
activity,O
in,O
the,O
allowance,O
for,O
loan,O
losses,O
",",O
balance,O
in,O
allowance,O
for,O
loan,O
losses,O
and,O
recorded,O
investment,O
in,O
loans,O
by,O
portfolio,O
segment,O
and,O
based,O
on,O
impairment,O
method,O
of,O
non-covered,O
loans,O
as,O
of,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
.,O
,O
The,O
following,O
table,O
presents,O
the,O
activity,O
in,O
the,O
allowance,O
for,O
loan,O
losses,O
",",O
balance,O
in,O
allowance,O
for,O
loan,O
losses,O
and,O
recorded,O
investment,O
in,O
loans,O
by,O
portfolio,O
segment,O
and,O
based,O
on,O
impairment,O
method,O
of,O
covered,O
loans,O
as,O
of,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
.,O
,O
The,O
following,O
tables,O
represent,O
credit,O
exposures,O
by,O
internally,O
assigned,O
grades,O
for,O
quarter,O
ended,O
March,O
31,O
",",O
2011,O
.,O
,O
The,O
grading,O
analysis,O
estimates,O
the,O
capability,O
of,O
the,O
borrower,O
to,O
repay,O
the,O
contractual,O
obligations,O
of,O
the,O
loan,O
agreements,O
as,O
scheduled,O
or,O
at,O
all,O
.,O
,O
The,O
Company,O
's,O
internal,O
credit,O
risk,O
grading,O
system,O
is,O
based,O
on,O
experiences,O
with,O
similarly,O
graded,O
loans,O
.,O
,O
The,O
Company,O
's,O
internally,O
assigned,O
grades,O
are,O
as,O
follows,O
:,O
,O
Pass,O
–,O
loans,O
which,O
are,O
protected,O
by,O
the,O
current,O
net,O
worth,O
and,O
paying,O
capacity,O
of,O
the,O
obligor,O
or,O
by,O
the,O
value,O
of,O
the,O
underlying,O
collateral,O
.,O
,O
There,O
are,O
three,O
sub-grades,O
within,O
the,O
pass,O
category,O
to,O
further,O
distinguish,O
the,O
loan,O
.,O
,O
Special,O
Mention,O
–,O
loans,O
where,O
a,O
potential,O
weakness,O
or,O
risk,O
exists,O
",",O
which,O
could,O
cause,O
a,O
more,O
serious,O
problem,O
if,O
not,O
corrected,O
.,O
,O
Substandard,O
–,O
loans,O
that,O
have,O
a,O
well-defined,O
weakness,O
based,O
on,O
objective,O
evidence,O
and,O
are,O
characterized,O
by,O
the,O
distinct,O
possibility,O
that,O
the,O
Bank,O
will,O
sustain,O
some,O
loss,O
if,O
the,O
deficiencies,O
are,O
not,O
corrected,O
.,O
,O
Doubtful,O
–,O
loans,O
classified,O
as,O
doubtful,O
have,O
all,O
the,O
weaknesses,O
inherent,O
in,O
a,O
substandard,O
asset,O
.,O
,O
In,O
addition,O
",",O
these,O
weaknesses,O
make,O
collection,O
or,O
liquidation,O
in,O
full,O
highly,O
questionable,O
and,O
improbable,O
",",O
based,O
on,O
existing,O
circumstances,O
.,O
,O
Loss,O
–,O
loans,O
classified,O
as,O
a,O
loss,O
are,O
considered,O
uncollectible,O
",",O
or,O
of,O
such,O
value,O
that,O
continuance,O
as,O
an,O
asset,O
is,O
not,O
warranted,O
.,O
,O
The,O
following,O
table,O
presents,O
classes,O
of,O
the,O
loan,O
portfolio,O
summarized,O
by,O
the,O
aggregate,O
Pass,O
and,O
the,O
criticized,O
categories,O
of,O
Special,O
Mention,O
",",O
Substandard,O
",",O
Doubtful,O
",",O
and,O
Loss,O
within,O
the,O
internal,O
risk,O
rating,O
system,O
as,O
of,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
:,O
,O
For,O
one-to-four,O
family,O
real,O
estate,O
",",O
home,O
equity,O
",",O
HELOCs,O
",",O
and,O
education,O
and,O
other,O
loans,O
",",O
the,O
Company,O
evaluates,O
credit,O
quality,O
based,O
on,O
the,O
performance,O
of,O
the,O
individual,O
credits,O
.,O
,O
Payment,O
activity,O
is,O
reviewed,O
by,O
management,O
on,O
a,O
monthly,O
basis,O
to,O
determine,O
how,O
loans,O
are,O
performing,O
.,O
,O
Loans,O
are,O
considered,O
to,O
be,O
nonperforming,O
when,O
they,O
become,O
90,O
days,O
past,O
due,O
.,O
,O
The,O
following,O
table,O
presents,O
recorded,O
investment,O
in,O
the,O
loan,O
classes,O
based,O
on,O
payment,O
activity,O
as,O
of,O
March,O
31,O
",",O
2011and,O
December,O
31,O
",",O
2010,O
:,O
,O
Following,O
is,O
a,O
table,O
which,O
includes,O
an,O
aging,O
analysis,O
of,O
the,O
recorded,O
investment,O
of,O
past,O
due,O
loans,O
:,O
,O
Multi-family,O
and,O
commercial,O
loans,O
are,O
considered,O
for,O
nonaccrual,O
status,O
upon,O
90,O
days,O
delinquency,O
and,O
",",O
one-to-four,O
family,O
loans,O
are,O
considered,O
for,O
nonaccrual,O
status,O
after,O
120,O
days,O
.,O
,O
When,O
a,O
loan,O
is,O
placed,O
in,O
nonaccrual,O
status,O
",",O
previously,O
accrued,O
but,O
unpaid,O
interest,O
is,O
deducted,O
from,O
interest,O
income,O
.,O
,O
On,O
the,O
following,O
table,O
are,O
the,O
loans,O
on,O
nonaccrual,O
status,O
as,O
of,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
.,O
,O
The,O
balances,O
are,O
presented,O
by,O
class,O
of,O
loans,O
.,O
,O
The,O
company,O
had,O
nonaccrual,O
loans,O
of,O
$,O
"906,795",O
as,O
of,O
March,O
31,O
",",O
2011,O
and,O
$,O
"1,022,512",O
as,O
of,O
December,O
31,O
",",O
2010,O
.,O
,O
Interest,O
income,O
on,O
loans,O
would,O
have,O
been,O
increased,O
by,O
approximately,O
$,O
"1,007",O
and,O
$,O
"48,193",O
during,O
those,O
periods,O
",",O
if,O
these,O
loans,O
had,O
performed,O
in,O
accordance,O
with,O
their,O
original,O
terms,O
.,O
,O
Management,O
evaluates,O
commercial,O
real,O
estate,O
loans,O
which,O
are,O
90,O
days,O
or,O
more,O
past,O
due,O
to,O
be,O
impaired,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
",",O
there,O
were,O
no,O
loans,O
considered,O
to,O
be,O
impaired,O
.,O
,O
Deposit,O
accounts,O
are,O
summarized,O
as,O
follows,O
for,O
the,O
periods,O
ending,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
.,O
,O
The,O
Bank,O
has,O
a,O
Supplemental,O
Life,O
Insurance,O
Plan,O
(,O
the,O
“,O
Plan,O
”,O
),O
for,O
three,O
officers,O
of,O
the,O
Bank,O
.,O
,O
The,O
Plan,O
requires,O
the,O
Bank,O
to,O
make,O
annual,O
payments,O
to,O
the,O
beneficiaries,O
upon,O
their,O
death,O
.,O
,O
In,O
connection,O
with,O
the,O
Plan,O
",",O
the,O
Bank,O
funded,O
life,O
insurance,O
policies,O
with,O
an,O
original,O
investment,O
of,O
$,O
"3,085,000",O
on,O
the,O
lives,O
of,O
those,O
officers,O
.,O
,O
These,O
life,O
insurance,O
policies,O
currently,O
have,O
a,O
death,O
benefit,O
of,O
$,O
"11,975,329",O
.,O
,O
The,O
cash,O
surrender,O
value,O
of,O
these,O
policies,O
totaled,O
$,O
"4,157,636",O
and,O
$,O
"4,140,267",O
at,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
",",O
respectively,O
.,O
,O
The,O
Plan,O
provides,O
that,O
death,O
benefits,O
totaling,O
$,O
6.0,O
million,O
at,O
March,O
31,O
",",O
2011,O
",",O
will,O
be,O
paid,O
to,O
their,O
beneficiaries,O
in,O
the,O
event,O
the,O
officers,O
should,O
die,O
.,O
,O
Additionally,O
",",O
the,O
Bank,O
has,O
a,O
Supplemental,O
Retirement,O
Plan,O
(,O
“,O
SRP,O
”,O
),O
for,O
the,O
Bank,O
’,O
s,O
current,O
and,O
former,O
presidents,O
as,O
well,O
as,O
two,O
senior,O
officers,O
of,O
the,O
Bank,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
",",O
$,O
"1,545,446",O
and,O
$,O
"1,520,087",O
had,O
been,O
accrued,O
under,O
these,O
SRPs,O
",",O
respectively,O
",",O
and,O
this,O
liability,O
and,O
the,O
related,O
deferred,O
tax,O
assets,O
of,O
$,O
"525,452",O
and,O
$,O
"516,830",O
for,O
the,O
respective,O
periods,O
",",O
are,O
recognized,O
in,O
the,O
financial,O
statements,O
.,O
,O
The,O
deferred,O
compensation,O
for,O
the,O
current,O
and,O
former,O
president,O
is,O
to,O
be,O
paid,O
for,O
the,O
remainder,O
of,O
their,O
lives,O
commencing,O
with,O
the,O
first,O
year,O
following,O
the,O
termination,O
of,O
employment,O
after,O
completion,O
of,O
required,O
service,O
.,O
,O
The,O
current,O
president,O
’,O
s,O
payment,O
is,O
based,O
on,O
60,O
percent,O
of,O
his,O
final,O
full,O
year,O
annual,O
gross,O
taxable,O
compensation,O
adjusted,O
annually,O
for,O
the,O
change,O
in,O
the,O
consumer,O
price,O
index,O
or,O
4,O
percent,O
",",O
whichever,O
is,O
higher,O
.,O
,O
The,O
former,O
president,O
’,O
s,O
payment,O
is,O
based,O
on,O
60,O
percent,O
of,O
his,O
final,O
full,O
year,O
annual,O
gross,O
taxable,O
compensation,O
adjusted,O
annually,O
for,O
the,O
change,O
in,O
the,O
consumer,O
price,O
index,O
.,O
,O
The,O
deferred,O
compensation,O
for,O
the,O
two,O
senior,O
officers,O
is,O
to,O
be,O
paid,O
at,O
the,O
rate,O
of,O
$,O
"50,000",O
per,O
year,O
for,O
twenty,O
years,O
commencing,O
five,O
years,O
after,O
retirement,O
or,O
age,O
65,O
",",O
whichever,O
comes,O
first,O
",",O
following,O
the,O
termination,O
of,O
employment,O
.,O
,O
The,O
Company,O
records,O
periodic,O
accruals,O
for,O
thecost,O
of,O
providing,O
such,O
benefits,O
by,O
charges,O
to,O
income,O
.,O
,O
The,O
amount,O
accrued,O
was,O
approximately,O
$,O
"54,790",O
and,O
$,O
"38,064",O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
and,O
2010,O
",",O
respectively,O
.,O
,O
The,O
accruals,O
change,O
each,O
year,O
based,O
on,O
a,O
discount,O
rate,O
of,O
6.25,O
percent,O
used,O
in,O
determining,O
the,O
estimated,O
liability,O
that,O
will,O
be,O
accrued,O
when,O
the,O
employees,O
are,O
eligible,O
for,O
benefits,O
.,O
,O
The,O
following,O
table,O
illustrates,O
the,O
components,O
of,O
the,O
net,O
periodic,O
benefit,O
cost,O
for,O
the,O
supplemental,O
retirement,O
plan,O
:,O
,O
Generally,I-LEGISLATION/ACT
Accepted,I-LEGISLATION/ACT
Accounting,I-LEGISLATION/ACT
Principles,I-LEGISLATION/ACT
(,O
“,O
GAAP,I-LEGISLATION/ACT
”,O
),O
establishes,O
a,O
hierarchal,O
disclosure,O
framework,O
associated,O
with,O
the,O
level,O
of,O
pricing,O
observability,O
utilized,O
in,O
measuring,O
assets,O
and,O
liabilities,O
at,O
fair,O
value,O
.,O
,O
The,O
three,O
broad,O
levels,O
defined,O
by,O
GAAP,I-LEGISLATION/ACT
hierarchy,O
are,O
as,O
follows,O
:,O
,O
Level,O
I,O
:,O
Quoted,O
prices,O
are,O
available,O
in,O
active,O
markets,O
for,O
identical,O
assets,O
or,O
liabilities,O
as,O
of,O
the,O
reported,O
date,O
.,O
,O
Level,O
II,O
:,O
Pricing,O
inputs,O
are,O
other,O
than,O
the,O
quoted,O
prices,O
in,O
active,O
markets,O
",",O
which,O
are,O
either,O
directly,O
or,O
indirectly,O
observable,O
as,O
of,O
the,O
reported,O
date,O
.,O
,O
The,O
nature,O
of,O
these,O
assets,O
and,O
liabilities,O
includes,O
items,O
for,O
which,O
quoted,O
prices,O
are,O
available,O
but,O
traded,O
less,O
frequently,O
and,O
items,O
that,O
are,O
fair-valued,O
using,O
other,O
financial,O
instruments,O
",",O
the,O
parameters,O
of,O
which,O
can,O
be,O
directly,O
observed,O
.,O
,O
Level,O
III,O
:,O
Assets,O
and,O
liabilities,O
that,O
have,O
little,O
to,O
no,O
pricing,O
observability,O
as,O
of,O
the,O
reported,O
date,O
.,O
,O
These,O
items,O
do,O
not,O
have,O
two-way,O
markets,O
and,O
are,O
measured,O
using,O
management,O
’,O
s,O
best,O
estimate,O
of,O
fair,O
value,O
",",O
where,O
the,O
inputs,O
into,O
the,O
determination,O
of,O
fair,O
value,O
require,O
significant,O
management,O
judgment,O
or,O
estimation,O
.,O
,O
The,O
following,O
table,O
presents,O
the,O
assets,O
reported,O
on,O
the,O
consolidated,O
balance,O
sheets,O
at,O
their,O
fair,O
value,O
as,O
of,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
",",O
respectively,O
",",O
by,O
level,O
within,O
the,O
fair,O
value,O
hierarchy,O
.,O
,O
As,O
required,O
by,O
GAAP,I-LEGISLATION/ACT
",",O
financial,O
assets,O
and,O
liabilities,O
are,O
classified,O
in,O
their,O
entirety,O
based,O
on,O
the,O
lowest,O
level,O
of,O
input,O
that,O
is,O
significant,O
to,O
the,O
fair,O
value,O
measurement,O
.,O
,O
All,O
of,O
the,O
securities,O
classified,O
as,O
available,O
for,O
sale,O
are,O
reported,O
at,O
fair,O
value,O
utilizing,O
Level,O
2,O
inputs,O
.,O
,O
For,O
these,O
securities,O
",",O
the,O
Company,O
obtains,O
fair,O
value,O
measurements,O
from,O
an,O
independent,O
pricing,O
service,O
.,O
,O
The,O
fair,O
value,O
measurements,O
consider,O
observable,O
data,O
that,O
may,O
include,O
dealer,O
quoted,O
market,O
spreads,O
",",O
cash,O
flows,O
",",O
the,O
U.S.,I-GOVERNMENT
Treasury,I-GOVERNMENT
yield,O
curve,O
",",O
live,O
trading,O
levels,O
",",O
trade,O
execution,O
data,O
",",O
market,O
consensus,O
prepayment,O
speeds,O
",",O
credit,O
information,O
and,O
the,O
bond,O
’,O
s,O
terms,O
and,O
conditions,O
",",O
among,O
other,O
things,O
.,O
,O
In,O
certain,O
cases,O
",",O
the,O
inputs,O
used,O
to,O
measure,O
fair,O
value,O
may,O
fall,O
into,O
different,O
levels,O
of,O
the,O
fair,O
value,O
hierarchy,O
.,O
,O
In,O
such,O
cases,O
",",O
the,O
level,O
in,O
the,O
fair,O
value,O
hierarchy,O
",",O
within,O
which,O
the,O
fair,O
value,O
measurement,O
in,O
its,O
entirety,O
falls,O
",",O
has,O
been,O
determined,O
based,O
on,O
the,O
lowest,O
level,O
input,O
that,O
is,O
significant,O
to,O
the,O
fair,O
value,O
measurement,O
in,O
its,O
entirety,O
.,O
,O
The,O
Company,O
’,O
s,O
assessment,O
of,O
the,O
significance,O
of,O
a,O
particular,O
input,O
to,O
the,O
fair,O
value,O
measurement,O
in,O
its,O
entirety,O
requires,O
judgment,O
",",O
and,O
considers,O
factors,O
specific,O
to,O
the,O
asset,O
.,O
,O
The,O
measurement,O
of,O
fair,O
value,O
should,O
be,O
consistent,O
with,O
one,O
of,O
the,O
following,O
valuation,O
techniques,O
:,O
market,O
approach,O
",",O
income,O
approach,O
",",O
and/or,O
cost,O
approach,O
.,O
,O
The,O
market,O
approach,O
uses,O
prices,O
and,O
other,O
relevant,O
information,O
generated,O
by,O
market,O
transactions,O
involving,O
identical,O
or,O
comparable,O
assets,O
or,O
liabilities,O
(,O
including,O
a,O
business,O
),O
.,O
,O
For,O
example,O
",",O
valuation,O
techniques,O
consistent,O
with,O
the,O
market,O
approach,O
often,O
use,O
market,O
multiples,O
derived,O
from,O
a,O
set,O
of,O
comparables,O
.,O
,O
Multiples,O
might,O
lie,O
in,O
ranges,O
with,O
a,O
different,O
multiple,O
for,O
each,O
comparable,O
.,O
,O
The,O
selection,O
of,O
where,O
within,O
the,O
range,O
the,O
appropriate,O
multiple,O
falls,O
requires,O
judgment,O
",",O
considering,O
factors,O
specific,O
to,O
the,O
measurement,O
(,O
qualitative,O
and,O
quantitative,O
),O
.,O
,O
Valuation,O
techniques,O
consistent,O
with,O
the,O
market,O
approach,O
include,O
matrix,O
pricing,O
.,O
,O
Matrix,O
pricing,O
is,O
a,O
mathematical,O
technique,O
used,O
principally,O
to,O
value,O
debt,O
securities,O
without,O
relying,O
exclusively,O
on,O
quoted,O
prices,O
for,O
the,O
specific,O
securities,O
",",O
but,O
rather,O
by,O
relying,O
on,O
the,O
securities,O
’,O
relationship,O
to,O
other,O
benchmark,O
quoted,O
securities,O
.,O
,O
As,O
of,O
March,O
31,O
",",O
2011,O
",",O
all,O
of,O
the,O
financial,O
assets,O
measured,O
at,O
fair,O
value,O
utilized,O
the,O
market,O
approach,O
.,O
,O
The,O
estimated,O
fair,O
values,O
of,O
the,O
Company,O
’,O
s,O
financial,O
instruments,O
are,O
as,O
follows,O
:,O
,O
Financial,O
instruments,O
are,O
defined,O
as,O
cash,O
",",O
evidence,O
of,O
ownership,O
interest,O
in,O
an,O
entity,O
",",O
or,O
a,O
contract,O
that,O
creates,O
an,O
obligation,O
or,O
right,O
to,O
receive,O
or,O
deliver,O
cash,O
or,O
another,O
financial,O
instrument,O
from/to,O
a,O
second,O
entity,O
on,O
potentially,O
favorable,O
or,O
unfavorable,O
terms,O
.,O
,O
Fair,O
value,O
is,O
defined,O
as,O
the,O
amount,O
at,O
which,O
a,O
financial,O
instrument,O
could,O
be,O
exchanged,O
in,O
a,O
current,O
transaction,O
between,O
willing,O
parties,O
other,O
than,O
in,O
a,O
forced,O
or,O
liquidation,O
sale,O
.,O
,O
If,O
a,O
quoted,O
market,O
price,O
is,O
available,O
for,O
a,O
financial,O
instrument,O
",",O
the,O
estimated,O
fair,O
value,O
would,O
be,O
calculated,O
based,O
upon,O
the,O
market,O
price,O
per,O
trading,O
unit,O
of,O
the,O
instrument,O
.,O
,O
If,O
no,O
readily,O
available,O
market,O
exists,O
",",O
the,O
fair,O
value,O
estimates,O
for,O
financial,O
instruments,O
should,O
be,O
based,O
upon,O
management,O
’,O
s,O
judgment,O
regarding,O
current,O
economic,O
conditions,O
",",O
interest,O
rate,O
risk,O
",",O
expected,O
cash,O
flows,O
",",O
future,O
estimated,O
losses,O
",",O
and,O
other,O
factors,O
as,O
determined,O
through,O
various,O
option,O
pricing,O
formulas,O
or,O
stimulation,O
modeling,O
.,O
,O
As,O
many,O
of,O
these,O
assumptions,O
result,O
from,O
judgments,O
made,O
by,O
management,O
based,O
upon,O
estimates,O
that,O
are,O
inherently,O
uncertain,O
",",O
the,O
resulting,O
estimated,O
fair,O
values,O
may,O
not,O
be,O
indicative,O
of,O
the,O
amount,O
realizable,O
in,O
the,O
sale,O
of,O
a,O
particular,O
financial,O
instrument,O
.,O
,O
In,O
addition,O
",",O
changes,O
in,O
assumptions,O
on,O
which,O
the,O
estimated,O
fair,O
values,O
are,O
based,O
may,O
have,O
a,O
significant,O
impact,O
on,O
the,O
resulting,O
estimated,O
fair,O
values,O
.,O
,O
As,O
certain,O
assets,O
such,O
as,O
deferred,O
tax,O
assets,O
and,O
premises,O
and,O
equipment,O
are,O
not,O
considered,O
financial,O
instruments,O
",",O
the,O
estimated,O
fair,O
value,O
of,O
financial,O
instruments,O
would,O
not,O
represent,O
the,O
full,O
value,O
of,O
the,O
Company,O
.,O
,O
The,O
Company,O
employed,O
simulation,O
modeling,O
in,O
determining,O
the,O
estimated,O
fair,O
value,O
of,O
financial,O
instruments,O
for,O
which,O
quoted,O
market,O
prices,O
were,O
not,O
available,O
based,O
upon,O
the,O
following,O
assumptions,O
.,O
,O
The,O
fair,O
value,O
is,O
equal,O
to,O
the,O
current,O
carrying,O
value,O
.,O
,O
The,O
fair,O
value,O
of,O
investment,O
securities,O
available,O
for,O
sale,O
and,O
held,O
to,O
maturity,O
is,O
equal,O
to,O
the,O
available,O
quoted,O
market,O
price,O
.,O
,O
If,O
no,O
quoted,O
market,O
price,O
is,O
available,O
",",O
fair,O
value,O
is,O
estimated,O
using,O
the,O
quoted,O
market,O
price,O
for,O
similar,O
securities,O
.,O
,O
The,O
fair,O
value,O
is,O
estimated,O
by,O
discounting,O
future,O
cash,O
flows,O
using,O
current,O
market,O
inputs,O
at,O
which,O
loans,O
with,O
similar,O
terms,O
and,O
qualities,O
would,O
be,O
made,O
to,O
borrowers,O
of,O
similar,O
credit,O
quality,O
.,O
,O
Where,O
quoted,O
market,O
prices,O
were,O
available,O
",",O
primarily,O
for,O
certain,O
residential,O
mortgage,O
loans,O
",",O
such,O
market,O
rates,O
were,O
utilized,O
as,O
estimates,O
for,O
fair,O
value,O
.,O
,O
The,O
indemnification,O
asset,O
represents,O
the,O
present,O
value,O
of,O
the,O
estimated,O
cash,O
payments,O
expected,O
to,O
be,O
received,O
from,O
the,O
FDIC,O
for,O
future,O
losses,O
on,O
covered,O
assets,O
based,O
on,O
the,O
credit,O
adjustment,O
estimated,O
for,O
each,O
covered,O
asset,O
and,O
loss,O
sharing,O
percentages,O
.,O
,O
These,O
cash,O
flows,O
are,O
discounted,O
at,O
a,O
market-based,O
rate,O
to,O
reflect,O
the,O
uncertainty,O
of,O
the,O
timing,O
and,O
receipt,O
of,O
the,O
loss,O
sharing,O
reimbursement,O
from,O
the,O
FDIC,I-GOVERNMENT
.,O
,O
The,O
fair,O
values,O
of,O
certificates,O
of,O
deposit,O
and,O
FHLB,I-GOVERNMENT
advances,O
–,O
long-term,O
are,O
based,O
on,O
the,O
discounted,O
value,O
of,O
contractual,O
cash,O
flows,O
.,O
,O
The,O
discount,O
rates,O
are,O
estimated,O
using,O
rates,O
currently,O
offered,O
for,O
similar,O
instruments,O
with,O
similar,O
remaining,O
maturities,O
.,O
,O
Demand,O
",",O
savings,O
",",O
and,O
money,O
market,O
deposits,O
are,O
valued,O
at,O
the,O
amount,O
payable,O
on,O
demand,O
as,O
of,O
year-end,O
.,O
,O
The,O
fair,O
value,O
is,O
equal,O
to,O
the,O
cash,O
surrender,O
value,O
of,O
the,O
life,O
insurance,O
policies,O
.,O
,O
These,O
financial,O
instruments,O
are,O
generally,O
not,O
subject,O
to,O
sale,O
",",O
and,O
estimated,O
fair,O
values,O
are,O
not,O
readily,O
available,O
.,O
,O
The,O
carrying,O
value,O
",",O
represented,O
by,O
the,O
net,O
deferred,O
fee,O
arising,O
from,O
the,O
unrecognized,O
commitment,O
",",O
and,O
the,O
fair,O
value,O
",",O
determined,O
by,O
discounting,O
the,O
remaining,O
contractual,O
fee,O
over,O
the,O
term,O
of,O
the,O
commitment,O
using,O
fees,O
currently,O
charged,O
to,O
enter,O
into,O
similar,O
agreements,O
with,O
similar,O
credit,O
risk,O
",",O
are,O
not,O
considered,O
material,O
for,O
disclosure,O
.,O
,O
The,O
contractual,O
amounts,O
of,O
unfunded,O
commitments,O
are,O
presented,O
in,O
the,O
Liquidity,O
and,O
Capital,O
Management,O
section,O
below,O
.,O
,O
Management,O
’,O
s,O
discussion,O
and,O
analysis,O
of,O
the,O
Company,O
’,O
s,O
financial,O
condition,O
and,O
results,O
of,O
operations,O
is,O
intended,O
to,O
assist,O
in,O
understanding,O
the,O
financial,O
condition,O
and,O
results,O
of,O
operations,O
of,O
Polonia,I-BUSINESS
Bancorp,I-BUSINESS
.,O
,O
The,O
information,O
contained,O
in,O
this,O
section,O
should,O
be,O
read,O
in,O
conjunction,O
with,O
the,O
Unaudited,O
Consolidated,O
Financial,O
Statements,O
and,O
footnotes,O
appearing,O
in,O
Part,O
I,O
",",O
Item,O
1,O
of,O
this,O
document,O
.,O
,O
This,O
report,O
contains,O
forward-looking,O
statements,O
that,O
are,O
based,O
on,O
assumptions,O
and,O
may,O
describe,O
future,O
plans,O
",",O
strategies,O
and,O
expectations,O
of,O
Polonia,I-BUSINESS
MHC,I-BUSINESS
",",O
Polonia,I-BUSINESS
Bancorp,I-BUSINESS
and,O
Polonia,I-BUSINESS
Bank,I-BUSINESS
.,O
,O
These,O
forward-looking,O
statements,O
are,O
generally,O
identified,O
by,O
use,O
of,O
the,O
words,O
“,O
believe,O
",",O
”,O
“,O
expect,O
",",O
”,O
“,O
intend,O
",",O
”,O
“,O
anticipate,O
",",O
”,O
“,O
estimate,O
",",O
”,O
“,O
project,O
”,O
or,O
similar,O
expressions,O
.,O
,O
Polonia,I-BUSINESS
MHC,I-BUSINESS
’,O
s,O
",",O
Polonia,I-BUSINESS
Bancorp,I-BUSINESS
’,O
s,O
and,O
Polonia,I-BUSINESS
Bank,I-BUSINESS
’,O
s,O
ability,O
to,O
predict,O
results,O
or,O
the,O
actual,O
effect,O
of,O
future,O
plans,O
or,O
strategies,O
is,O
inherently,O
uncertain,O
.,O
,O
Factors,O
which,O
could,O
have,O
a,O
material,O
adverse,O
effect,O
on,O
the,O
operations,O
of,O
the,O
Company,O
and,O
its,O
subsidiary,O
include,O
",",O
but,O
are,O
not,O
limited,O
to,O
the,O
following,O
:,O
the,O
ability,O
to,O
successfully,O
integrate,O
the,O
operations,O
of,O
Earthstar,O
Bank,O
;,O
changes,O
in,O
interest,O
rates,O
;,O
national,O
and,O
regional,O
economic,O
conditions,O
;,O
legislative,O
and,O
regulatory,O
changes,O
;,O
monetary,O
and,O
fiscal,O
policies,O
of,O
the,O
U.S.,I-LOCATION
government,O
;,O
including,O
policies,O
of,O
the,O
U.S.,I-GOVERNMENT
Treasury,I-GOVERNMENT
and,O
the,O
Federal,I-GOVERNMENT
Reserve,I-GOVERNMENT
Board,I-GOVERNMENT
;,O
the,O
quality,O
and,O
composition,O
of,O
the,O
loan,O
or,O
investment,O
portfolios,O
;,O
demand,O
for,O
loan,O
products,O
;,O
deposit,O
flows,O
;,O
competition,O
;,O
demand,O
for,O
financial,O
services,O
in,O
the,O
Company,O
’,O
s,O
market,O
area,O
;,O
changes,O
in,O
real,O
estate,O
market,O
values,O
in,O
the,O
Company,O
’,O
s,O
market,O
area,O
;,O
and,O
changes,O
in,O
relevant,O
accounting,O
principles,O
and,O
guidelines,O
.,O
,O
Additionally,O
",",O
other,O
risks,O
and,O
uncertainties,O
are,O
described,O
herein,O
and,O
in,O
the,O
Company,O
’,O
s,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
under,O
“,O
Item,O
1A,O
:,O
Risk,O
Factors,O
”,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
the,O
“,O
SEC,I-GOVERNMENT
”,O
),O
which,O
is,O
available,O
through,O
the,O
SEC,I-GOVERNMENT
’,O
s,O
website,O
at,O
www.sec.gov,O
.,O
,O
These,O
risks,O
and,O
uncertainties,O
should,O
be,O
considered,O
in,O
evaluating,O
forward-looking,O
statements,O
and,O
undue,O
reliance,O
should,O
not,O
be,O
placed,O
on,O
such,O
statements,O
.,O
,O
Except,O
as,O
required,O
by,O
applicable,O
law,O
or,O
regulation,O
",",O
the,O
Company,O
does,O
not,O
undertake,O
",",O
and,O
specifically,O
disclaims,O
any,O
obligation,O
",",O
to,O
release,O
publicly,O
the,O
result,O
of,O
any,O
revisions,O
that,O
may,O
be,O
made,O
to,O
any,O
forward-looking,O
statements,O
to,O
reflect,O
events,O
or,O
circumstances,O
after,O
the,O
date,O
of,O
the,O
statements,O
or,O
to,O
reflect,O
the,O
occurrence,O
of,O
anticipated,O
or,O
unanticipated,O
events,O
.,O
,O
Polonia,I-BUSINESS
Bancorp,I-BUSINESS
was,O
organized,O
as,O
a,O
federally,O
chartered,O
corporation,O
at,O
the,O
direction,O
of,O
the,O
Bank,O
in,O
January,O
2007,O
to,O
become,O
the,O
mid-tier,O
stock,O
holding,O
company,O
for,O
the,O
Bank,O
upon,O
the,O
completion,O
of,O
its,O
reorganization,O
into,O
the,O
mutual,O
holding,O
company,O
form,O
of,O
organization,O
.,O
,O
As,O
a,O
result,O
of,O
the,O
reorganization,O
",",O
Polonia,I-BUSINESS
Bancorp,I-BUSINESS
’,O
s,O
business,O
activities,O
are,O
the,O
ownership,O
of,O
the,O
outstanding,O
capital,O
stock,O
of,O
Polonia,I-BUSINESS
Bank,I-BUSINESS
and,O
management,O
of,O
the,O
investment,O
of,O
offering,O
proceeds,O
retained,O
from,O
the,O
reorganization,O
.,O
,O
Currently,O
",",O
Polonia,I-BUSINESS
Bancorp,I-BUSINESS
neither,O
owns,O
or,O
leases,O
any,O
property,O
",",O
but,O
instead,O
uses,O
the,O
premises,O
",",O
equipment,O
and,O
other,O
property,O
of,O
Polonia,I-BUSINESS
Bank,I-BUSINESS
and,O
pays,O
appropriate,O
rental,O
fees,O
",",O
as,O
by,O
required,O
applicable,O
law,O
and,O
regulations,O
.,O
,O
In,O
the,O
future,O
",",O
Polonia,I-BUSINESS
Bancorp,I-BUSINESS
may,O
acquire,O
or,O
organize,O
other,O
operating,O
subsidiaries,O
;,O
however,O
",",O
there,O
are,O
no,O
current,O
plans,O
",",O
arrangements,O
",",O
or,O
understandings,O
",",O
written,O
or,O
oral,O
",",O
to,O
do,O
so,O
.,O
,O
Polonia,I-BUSINESS
Bank,I-BUSINESS
operates,O
as,O
a,O
community-oriented,O
financial,O
institution,O
offering,O
a,O
variety,O
of,O
deposit,O
products,O
as,O
well,O
as,O
providing,O
residential,O
real,O
estate,O
loans,O
",",O
and,O
to,O
a,O
lesser,O
degree,O
",",O
multi-family,O
and,O
nonresidential,O
real,O
estate,O
loans,O
",",O
home,O
equity,O
loans,O
and,O
consumer,O
loans,O
primarily,O
to,O
individuals,O
",",O
families,O
and,O
small,O
businesses,O
located,O
in,O
Bucks,I-LOCATION
",",O
Philadelphia,I-LOCATION
and,O
Montgomery,I-LOCATION
Counties,I-LOCATION
",",O
Pennsylvania,I-LOCATION
.,O
,O
The,O
Bank,O
operates,O
from,O
nine,O
full-service,O
locations,O
",",O
including,O
our,O
main,O
office,O
in,O
Huntingdon,I-LOCATION
Valley,I-LOCATION
",",O
Pennsylvania,I-LOCATION
and,O
our,O
branch,O
offices,O
in,O
the,O
city,O
of,O
Philadelphia,I-LOCATION
and,O
Bucks,I-LOCATION
County,I-LOCATION
.,O
,O
On,O
December,O
10,O
",",O
2010,O
",",O
Polonia,I-BUSINESS
Bank,I-BUSINESS
assumed,O
certain,O
of,O
the,O
deposits,O
and,O
acquired,O
certain,O
assets,O
of,O
Earthstar,I-BUSINESS
Bank,I-BUSINESS
",",O
a,O
state,O
charted,O
bank,O
from,O
the,O
Federal,I-GOVERNMENT
Deposit,I-GOVERNMENT
Insurance,I-GOVERNMENT
Corporation,I-GOVERNMENT
(,O
“,O
FDIC,I-GOVERNMENT
”,O
),O
",",O
as,O
receiver,O
for,O
Earthstar,I-BUSINESS
Bank,I-BUSINESS
.,O
,O
We,O
acquired,O
approximately,O
$,O
67,O
million,O
in,O
assets,O
",",O
including,O
approximately,O
$,O
42,O
million,O
in,O
loans,O
(,O
comprised,O
primarily,O
of,O
single-family,O
residential,O
and,O
home,O
equity,O
loans,O
(,O
“,O
Single-Family,O
Loans,O
”,O
),O
and,O
commercial,O
business,O
and,O
commercial,O
real,O
estate,O
loans,O
(,O
“,O
Commercial,O
Loans,O
”,O
),O
),O
",",O
and,O
approximately,O
$,O
8,O
million,O
in,O
investments,O
securities,O
.,O
,O
We,O
also,O
assumed,O
approximately,O
$,O
90,O
million,O
in,O
deposits,O
.,O
,O
We,O
consider,O
accounting,O
policies,O
involving,O
significant,O
judgments,O
and,O
assumptions,O
by,O
management,O
that,O
have,O
",",O
or,O
could,O
have,O
",",O
a,O
material,O
impact,O
on,O
the,O
carrying,O
value,O
of,O
certain,O
assets,O
or,O
on,O
income,O
to,O
be,O
critical,O
accounting,O
policies,O
.,O
,O
We,O
consider,O
the,O
following,O
to,O
be,O
our,O
critical,O
accounting,O
policies,O
.,O
,O
SecuritiesSecurities,O
are,O
reported,O
at,O
fair,O
value,O
adjusted,O
for,O
premiums,O
and,O
discounts,O
which,O
are,O
recognized,O
in,O
interest,O
income,O
using,O
the,O
interest,O
method,O
over,O
the,O
period,O
to,O
maturity,O
.,O
,O
Declines,O
in,O
the,O
fair,O
value,O
of,O
individual,O
securities,O
below,O
their,O
amortized,O
cost,O
",",O
and,O
that,O
are,O
deemed,O
to,O
be,O
other,O
than,O
temporary,O
",",O
will,O
be,O
written,O
down,O
to,O
current,O
market,O
value,O
and,O
included,O
in,O
earnings,O
as,O
realized,O
losses,O
.,O
,O
Management,O
systematically,O
evaluates,O
securities,O
for,O
other,O
than,O
temporary,O
declines,O
in,O
fair,O
value,O
on,O
a,O
quarterly,O
basis,O
.,O
,O
Allowance,O
for,O
loan,O
lossesThe,O
allowance,O
for,O
loan,O
losses,O
is,O
increased,O
by,O
charges,O
to,O
income,O
and,O
decreased,O
by,O
charge-offs,O
(,O
net,O
of,O
recoveries,O
),O
.,O
,O
The,O
Company,O
’,O
s,O
periodic,O
evaluation,O
of,O
the,O
adequacy,O
of,O
the,O
allowance,O
for,O
loan,O
losses,O
is,O
determined,O
by,O
management,O
through,O
evaluation,O
of,O
the,O
loss,O
exposure,O
on,O
individual,O
non-performing,O
",",O
delinquent,O
and,O
high-dollar,O
loans,O
;,O
review,O
of,O
economic,O
conditions,O
and,O
business,O
trends,O
;,O
historical,O
loss,O
experience,O
and,O
growth,O
and,O
composition,O
of,O
the,O
loan,O
portfolio,O
",",O
as,O
well,O
as,O
other,O
relevant,O
factors,O
.,O
,O
A,O
quantitative,O
analysis,O
is,O
utilized,O
to,O
support,O
the,O
adequacy,O
of,O
the,O
allowance,O
for,O
loan,O
losses,O
.,O
,O
This,O
analysis,O
includes,O
review,O
of,O
historical,O
charge-off,O
rates,O
for,O
loan,O
categories,O
",",O
fluctuations,O
and,O
trends,O
in,O
the,O
amount,O
of,O
classified,O
loans,O
and,O
economic,O
factors,O
.,O
,O
Significant,O
to,O
this,O
analysis,O
are,O
any,O
changes,O
in,O
observable,O
trends,O
that,O
may,O
be,O
occurring,O
relative,O
to,O
loans,O
to,O
assess,O
potential,O
weaknesseswithin,O
the,O
credit,O
.,O
,O
Current,O
economic,O
factors,O
and,O
trends,O
in,O
risk,O
ratings,O
are,O
considered,O
in,O
the,O
determination,O
and,O
allocation,O
of,O
the,O
allowance,O
for,O
loan,O
losses,O
.,O
,O
Income,O
taxes.The,O
Company,O
files,O
a,O
consolidated,O
federal,O
income,O
tax,O
return,O
.,O
,O
Deferred,O
tax,O
assets,O
and,O
liabilities,O
are,O
computed,O
based,O
on,O
the,O
difference,O
between,O
the,O
financial,O
statement,O
and,O
the,O
income,O
tax,O
basis,O
of,O
assets,O
and,O
liabilities,O
using,O
the,O
enacted,O
marginal,O
tax,O
rates,O
.,O
,O
Deferred,O
income,O
taxes,O
or,O
benefits,O
are,O
based,O
on,O
changes,O
in,O
the,O
deferred,O
tax,O
asset,O
or,O
liability,O
from,O
period,O
to,O
period,O
.,O
,O
Deferred,O
tax,O
assets,O
and,O
liabilities,O
are,O
reflected,O
at,O
currently,O
enacted,O
income,O
tax,O
rates,O
applicable,O
to,O
the,O
period,O
in,O
which,O
such,O
items,O
are,O
expected,O
to,O
be,O
realized,O
or,O
settled,O
.,O
,O
As,O
changes,O
in,O
tax,O
rates,O
are,O
enacted,O
",",O
deferred,O
tax,O
assets,O
and,O
liabilities,O
are,O
adjusted,O
through,O
the,O
provision,O
for,O
income,O
taxes,O
.,O
,O
Total,O
assets,O
at,O
March,O
31,O
",",O
2011,O
were,O
$,O
279.1,O
million,O
",",O
a,O
decrease,O
of,O
$,O
19.7,O
million,O
",",O
or,O
6.6,O
%,O
",",O
from,O
total,O
assets,O
of,O
$,O
298.8,O
million,O
at,O
December,O
31,O
",",O
2010,O
.,O
,O
The,O
decrease,O
in,O
assets,O
resulted,O
primarily,O
from,O
a,O
$,O
46.0,O
million,O
decrease,O
in,O
cash,O
and,O
cash,O
equivalents,O
",",O
partially,O
offset,O
by,O
a,O
$,O
27.4,O
million,O
increase,O
in,O
investment,O
securities,O
held,O
to,O
maturity,O
.,O
,O
Total,O
liabilities,O
at,O
March,O
31,O
",",O
2011,O
were,O
$,O
251.8,O
million,O
compared,O
to,O
$,O
271.6,O
million,O
at,O
December,O
31,O
",",O
2010,O
",",O
a,O
decrease,O
of,O
$,O
19.8,O
million,O
",",O
or,O
7.3,O
%,O
.,O
,O
The,O
decrease,O
in,O
liabilities,O
was,O
primarily,O
due,O
to,O
a,O
$,O
22.4,O
million,O
decrease,O
in,O
deposits,O
",",O
partially,O
offset,O
by,O
a,O
$,O
5.0,O
million,O
increase,O
in,O
FHLB,I-GOVERNMENT
advances-short-term,O
.,O
,O
Total,O
stockholder,O
’,O
s,O
equity,O
increased,O
to,O
$,O
27.4,O
million,O
at,O
March,O
31,O
",",O
2011,O
from,O
$,O
27.3,O
million,O
at,O
December,O
31,O
",",O
2010,O
",",O
an,O
increase,O
of,O
$,O
"100,000",O
",",O
or,O
0.4,O
%,O
",",O
primarily,O
as,O
a,O
result,O
of,O
our,O
operating,O
profit,O
.,O
,O
Cash,O
and,O
cash,O
equivalents,O
decreased,O
to,O
$,O
8.0,O
million,O
from,O
$,O
54.0,O
million,O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
a,O
decrease,O
of,O
$,O
46.0,O
million,O
",",O
or,O
85.2,O
%,O
.,O
,O
The,O
decrease,O
in,O
cash,O
and,O
cash,O
equivalents,O
was,O
attributable,O
",",O
in,O
part,O
",",O
to,O
the,O
purchase,O
of,O
$,O
29.0,O
million,O
in,O
investment,O
securities,O
held,O
to,O
maturity,O
and,O
the,O
decrease,O
of,O
$,O
22.4,O
million,O
in,O
deposits,O
",",O
partially,O
offset,O
by,O
a,O
$,O
5,O
million,O
increase,O
in,O
FHLB,I-GOVERNMENT
advances,O
–,O
short,O
term,O
.,O
,O
Investment,O
securities,O
available,O
for,O
sale,O
decreased,O
to,O
$,O
25.7,O
million,O
from,O
$,O
27.4,O
million,O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
a,O
decrease,O
of,O
$,O
1.7,O
million,O
",",O
or,O
6.2,O
%,O
.,O
,O
The,O
decrease,O
in,O
investment,O
securities,O
available,O
for,O
sale,O
was,O
attributable,O
to,O
payments,O
received,O
of,O
$,O
1.6,O
million,O
.,O
,O
Investment,O
securities,O
held,O
to,O
maturity,O
increased,O
to,O
$,O
53.5,O
million,O
from,O
$,O
26.1,O
million,O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
an,O
increase,O
of,O
$,O
27.4,O
million,O
",",O
or,O
104.9,O
%,O
.,O
,O
The,O
increase,O
in,O
investment,O
securities,O
held,O
to,O
maturity,O
was,O
attributable,O
",",O
in,O
part,O
",",O
to,O
the,O
purchase,O
of,O
$,O
29.0,O
million,O
in,O
mortgaged-backed,O
securities,O
",",O
partially,O
offset,O
by,O
$,O
1.6,O
million,O
in,O
payments,O
received,O
.,O
,O
Loans,O
receivable,O
",",O
net,O
",",O
increased,O
$,O
2.1,O
million,O
",",O
or,O
1.5,O
%,O
",",O
to,O
$,O
139.8,O
million,O
at,O
March,O
31,O
",",O
2011,O
",",O
compared,O
to,O
$,O
137.7,O
million,O
at,O
December,O
31,O
",",O
2010,O
.,O
,O
The,O
size,O
of,O
our,O
1-4,O
family,O
mortgage,O
loan,O
portfolio,O
increased,O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
due,O
primarily,O
to,O
an,O
increase,O
in,O
loan,O
originations,O
during,O
the,O
quarter,O
.,O
,O
The,O
Bank,O
did,O
not,O
sell,O
any,O
loans,O
during,O
the,O
quarter,O
.,O
,O
Total,O
deposits,O
decreased,O
to,O
$,O
217.3,O
million,O
from,O
$,O
239.7,O
million,O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
a,O
decrease,O
of,O
$,O
22.4,O
million,O
",",O
or,O
9.3,O
%,O
.,O
,O
The,O
decrease,O
in,O
deposits,O
was,O
attributable,O
",",O
in,O
part,O
",",O
to,O
the,O
outflow,O
of,O
$,O
17.5,O
million,O
in,O
time,O
deposits,O
",",O
as,O
rates,O
offered,O
on,O
the,O
maturity,O
of,O
time,O
deposits,O
were,O
below,O
rates,O
offered,O
in,O
the,O
marketplace,O
and,O
a,O
$,O
3.3,O
million,O
decrease,O
in,O
money,O
market,O
accounts,O
.,O
,O
We,O
utilize,O
borrowings,O
from,O
the,O
FHLB,I-GOVERNMENT
of,I-GOVERNMENT
Pittsburgh,I-GOVERNMENT
to,O
supplement,O
our,O
supply,O
of,O
funds,O
for,O
loans,O
and,O
investments,O
.,O
,O
The,O
$,O
5.0,O
million,O
increase,O
in,O
FHLB,I-GOVERNMENT
advances,O
short-term,O
was,O
due,O
to,O
more,O
attractive,O
shorter,O
term,O
funding,O
opportunities,O
available,O
through,O
advances,O
.,O
,O
The,O
proceeds,O
of,O
these,O
borrowings,O
were,O
used,O
to,O
fund,O
the,O
outflow,O
of,O
higher,O
interest,O
earning,O
certificates,O
of,O
deposit,O
which,O
matured,O
during,O
the,O
quarter,O
.,O
,O
We,O
recorded,O
net,O
income,O
of,O
$,O
"52,000",O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
compared,O
to,O
net,O
income,O
of,O
$,O
"216,000",O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2010,O
.,O
,O
The,O
higher,O
net,O
income,O
for,O
the,O
three,O
months,O
ended,O
March,O
2010,O
period,O
was,O
primarily,O
related,O
to,O
higher,O
noninterest,O
income,O
",",O
partially,O
offset,O
by,O
higher,O
noninterest,O
expense,O
.,O
,O
Net,O
Interest,O
Income,O
.,O
,O
The,O
following,O
table,O
summarizes,O
changes,O
in,O
interest,O
income,O
and,O
expense,O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
and,O
2010,O
.,O
,O
The,O
following,O
table,O
summarizes,O
average,O
balances,O
and,O
average,O
yields,O
and,O
costs,O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
and,O
2010,O
.,O
,O
Our,O
net,O
interest,O
rate,O
spread,O
increased,O
to,O
3.35,O
%,O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
from,O
3.07,O
%,O
for,O
the,O
same,O
period,O
in,O
2010,O
.,O
,O
Net,O
interest,O
income,O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
increased,O
$,O
"697,000",O
to,O
$,O
2.3,O
million,O
",",O
or,O
4.3,O
%,O
from,O
$,O
1.6,O
million,O
during,O
the,O
same,O
period,O
last,O
year,O
.,O
,O
The,O
primary,O
reasons,O
for,O
the,O
increase,O
in,O
net,O
interest,O
income,O
for,O
the,O
three,O
month,O
period,O
reflects,O
a,O
higher,O
average,O
balance,O
of,O
loans,O
and,O
investment,O
securities,O
primarily,O
related,O
to,O
the,O
acquisition,O
of,O
assets,O
from,O
the,O
former,O
Earthstar,I-BUSINESS
Bank,I-BUSINESS
",",O
a,O
lower,O
average,O
interest,O
rate,O
paid,O
on,O
money,O
market,O
accounts,O
",",O
savings,O
accounts,O
",",O
time,O
deposits,O
and,O
FHLB,I-GOVERNMENT
advances,O
.,O
,O
The,O
average,O
balance,O
of,O
loans,O
increased,O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
due,O
to,O
the,O
increased,O
balance,O
of,O
loan,O
acquired,O
from,O
the,O
former,O
Earthstar,I-BUSINESS
Bank,I-BUSINESS
",",O
increased,O
loan,O
originations,O
from,O
the,O
same,O
period,O
last,O
year,O
as,O
well,O
as,O
lower,O
loan,O
sales,O
during,O
the,O
current,O
period,O
as,O
compared,O
to,O
last,O
year,O
.,O
,O
Lower,O
interest,O
expense,O
on,O
deposits,O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
was,O
due,O
to,O
a,O
continuing,O
decline,O
in,O
market,O
interest,O
rates,O
.,O
,O
The,O
increase,O
in,O
the,O
average,O
balance,O
of,O
investment,O
securities,O
during,O
the,O
three,O
month,O
period,O
ended,O
March,O
31,O
",",O
2011,O
was,O
due,O
to,O
the,O
purchase,O
of,O
investment,O
securities,O
held,O
to,O
maturity,O
as,O
well,O
as,O
the,O
securities,O
acquired,O
from,O
the,O
former,O
Earthstar,I-BUSINESS
Bank,I-BUSINESS
.,O
,O
Provision,O
for,O
Loan,O
Losses,O
.,O
,O
We,O
recorded,O
a,O
provision,O
for,O
loan,O
losses,O
of,O
$,O
"309,000",O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
as,O
compared,O
to,O
a,O
credit,O
provision,O
for,O
loan,O
losses,O
of,O
$,O
"134,000",O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2010,O
.,O
,O
The,O
increase,O
in,O
the,O
provision,O
is,O
directly,O
related,O
to,O
the,O
increased,O
balance,O
in,O
loans,O
during,O
the,O
quarter,O
primarily,O
as,O
a,O
result,O
of,O
the,O
purchase,O
of,O
loans,O
through,O
the,O
FDIC,I-GOVERNMENT
assisted,O
transaction,O
.,O
,O
The,O
provisions,O
reflect,O
management,O
’,O
s,O
assessment,O
of,O
lending,O
activities,O
",",O
decreased,O
non-performing,O
loans,O
",",O
levels,O
of,O
current,O
delinquencies,O
and,O
current,O
economic,O
conditions,O
.,O
,O
Provisions,O
for,O
loan,O
losses,O
are,O
charged,O
to,O
earnings,O
to,O
maintain,O
the,O
total,O
allowance,O
for,O
loan,O
losses,O
at,O
a,O
level,O
believed,O
by,O
management,O
sufficient,O
to,O
cover,O
all,O
known,O
and,O
inherent,O
losses,O
in,O
the,O
loan,O
portfolio,O
which,O
are,O
both,O
probable,O
and,O
reasonably,O
estimable,O
.,O
,O
Management,O
’,O
s,O
analysis,O
includes,O
consideration,O
of,O
the,O
Company,O
’,O
s,O
historical,O
experience,O
",",O
the,O
volume,O
and,O
type,O
of,O
lending,O
conducted,O
by,O
the,O
Company,O
",",O
the,O
amount,O
of,O
the,O
Company,O
’,O
s,O
classified,O
and,O
criticized,O
assets,O
",",O
the,O
status,O
of,O
past,O
due,O
principal,O
and,O
interest,O
payments,O
",",O
general,O
economic,O
conditions,O
",",O
particularly,O
as,O
they,O
relate,O
to,O
the,O
Company,O
’,O
s,O
primary,O
market,O
area,O
",",O
and,O
other,O
factors,O
related,O
to,O
the,O
collectability,O
of,O
the,O
Company,O
’,O
s,O
loan,O
portfolio,O
.,O
,O
Noninterest,O
Income.The,O
following,O
table,O
summarizes,O
noninterest,O
income,O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
and,O
2010,O
.,O
,O
The,O
$,O
"319,000",O
decrease,O
in,O
noninterest,O
income,O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
as,O
compared,O
to,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2010,O
was,O
primarily,O
due,O
to,O
a,O
$,O
"294,000",O
and,O
$,O
"26,000",O
decrease,O
in,O
gains,O
on,O
the,O
sale,O
of,O
loans,O
and,O
investments,O
",",O
respectively,O
and,O
a,O
$,O
"7,000",O
decrease,O
in,O
earnings,O
on,O
Bank-owned,O
life,O
insurance,O
",",O
partially,O
offset,O
by,O
a,O
$,O
"11,000",O
increase,O
in,O
service,O
fees,O
on,O
deposit,O
accounts,O
.,O
,O
The,O
following,O
table,O
summarizes,O
noninterest,O
expense,O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
and,O
2010,O
.,O
,O
Total,O
noninterest,O
expense,O
increased,O
$,O
"29,000",O
",",O
or,O
1.4,O
%,O
",",O
to,O
$,O
2.1,O
million,O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
from,O
the,O
prior,O
year,O
period,O
.,O
,O
The,O
increase,O
in,O
noninterest,O
expense,O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
as,O
compared,O
to,O
the,O
prior,O
year,O
period,O
was,O
primarily,O
the,O
result,O
of,O
a,O
$,O
"230,000",O
increase,O
in,O
compensation,O
and,O
employee,O
benefits,O
related,O
to,O
the,O
acquisition,O
of,O
Earthstar,I-BUSINESS
Bank,I-BUSINESS
and,O
an,O
$,O
"89,000",O
increase,O
in,O
occupancy,O
and,O
equipment,O
due,O
to,O
the,O
upgrade,O
and,O
conversion,O
of,O
the,O
systems,O
",",O
partially,O
offset,O
by,O
",",O
the,O
decrease,O
in,O
expense,O
related,O
to,O
our,O
investment,O
in,O
a,O
subsidiary,O
set,O
up,O
to,O
manage,O
and,O
dispose,O
of,O
foreclosed,O
property,O
for,O
the,O
prior,O
year,O
period,O
and,O
the,O
decrease,O
in,O
federal,O
deposit,O
insurance,O
premiums,O
.,O
,O
Income,O
Taxes.We,O
recorded,O
tax,O
expense,O
of,O
$,O
"26,000",O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
compared,O
to,O
a,O
tax,O
benefit,O
of,O
$,O
"44,000",O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2010,O
.,O
,O
The,O
recording,O
of,O
tax,O
expenses,O
resulted,O
from,O
the,O
increase,O
in,O
our,O
taxable,O
operating,O
profits,O
.,O
,O
Liquidity,O
is,O
the,O
ability,O
to,O
meet,O
current,O
and,O
future,O
financial,O
obligations,O
of,O
a,O
short-term,O
nature,O
.,O
,O
Our,O
primary,O
sources,O
of,O
funds,O
consist,O
of,O
deposit,O
inflows,O
",",O
loan,O
repayments,O
",",O
maturities,O
and,O
sales,O
of,O
securities,O
and,O
borrowings,O
from,O
the,O
FHLB,I-GOVERNMENT
of,I-GOVERNMENT
Pittsburgh,I-GOVERNMENT
.,O
,O
While,O
maturities,O
and,O
scheduled,O
amortization,O
of,O
loans,O
and,O
securities,O
are,O
predictable,O
sources,O
of,O
funds,O
",",O
deposit,O
flows,O
and,O
loan,O
prepayments,O
are,O
greatly,O
influenced,O
by,O
general,O
interest,O
rates,O
",",O
economic,O
conditions,O
and,O
competition,O
.,O
,O
We,O
regularly,O
adjust,O
our,O
investments,O
in,O
liquid,O
assets,O
based,O
upon,O
our,O
assessment,O
of,O
(,O
1,O
),O
expected,O
loan,O
demand,O
",",O
(,O
2,O
),O
expected,O
deposit,O
flows,O
",",O
(,O
3,O
),O
yields,O
available,O
on,O
interest-earning,O
deposits,O
and,O
securities,O
and,O
(,O
4,O
),O
the,O
objectives,O
of,O
our,O
asset/liability,O
management,O
policy,O
.,O
,O
Our,O
most,O
liquid,O
assets,O
are,O
cash,O
and,O
cash,O
equivalents,O
.,O
,O
The,O
levels,O
of,O
these,O
assets,O
depend,O
on,O
our,O
operating,O
",",O
financing,O
",",O
lending,O
and,O
investing,O
activities,O
during,O
any,O
given,O
period,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
",",O
cash,O
and,O
cash,O
equivalents,O
totaled,O
$,O
8.0,O
million,O
.,O
,O
Securities,O
classified,O
as,O
available-for-sale,O
",",O
which,O
provide,O
additional,O
sources,O
of,O
liquidity,O
",",O
totaled,O
$,O
25.7,O
million,O
at,O
March,O
31,O
",",O
2011,O
.,O
,O
In,O
addition,O
",",O
at,O
March,O
31,O
",",O
2011,O
",",O
we,O
had,O
the,O
ability,O
to,O
borrow,O
a,O
total,O
of,O
approximately,O
$,O
89.2,O
million,O
from,O
the,O
FHLB,I-GOVERNMENT
of,I-GOVERNMENT
Pittsburgh,I-GOVERNMENT
.,O
,O
On,O
March,O
31,O
",",O
2011,O
",",O
we,O
had,O
$,O
31.5,O
million,O
of,O
borrowings,O
outstanding,O
.,O
,O
Any,O
growth,O
of,O
our,O
loan,O
portfolio,O
may,O
require,O
us,O
to,O
borrow,O
additional,O
funds,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
",",O
we,O
had,O
$,O
2.7,O
million,O
in,O
mortgage,O
loan,O
commitments,O
outstanding,O
and,O
$,O
"36,000",O
in,O
a,O
standby,O
letter,O
of,O
credit,O
.,O
,O
Time,O
deposits,O
due,O
within,O
one,O
year,O
of,O
March,O
31,O
",",O
2011,O
totaled,O
$,O
74.6,O
million,O
",",O
or,O
66.4,O
%,O
of,O
time,O
deposits,O
.,O
,O
If,O
these,O
maturing,O
deposits,O
do,O
not,O
remain,O
with,O
us,O
",",O
we,O
will,O
be,O
required,O
to,O
seek,O
other,O
sources,O
of,O
funds,O
",",O
including,O
other,O
time,O
deposits,O
and,O
borrowings,O
.,O
,O
Depending,O
onmarket,O
conditions,O
",",O
we,O
may,O
be,O
required,O
to,O
pay,O
higher,O
rates,O
on,O
such,O
deposits,O
or,O
other,O
borrowings,O
than,O
we,O
currently,O
pay,O
on,O
the,O
time,O
deposits,O
due,O
on,O
or,O
before,O
March,O
31,O
",",O
2012,O
.,O
,O
We,O
believe,O
",",O
however,O
",",O
based,O
on,O
past,O
experience,O
that,O
a,O
significant,O
portion,O
of,O
our,O
time,O
deposits,O
will,O
remain,O
with,O
us,O
.,O
,O
We,O
have,O
the,O
ability,O
to,O
attract,O
and,O
retain,O
deposits,O
by,O
adjusting,O
the,O
interest,O
rates,O
offered,O
.,O
,O
Our,O
primary,O
investing,O
activities,O
are,O
the,O
origination,O
of,O
loans,O
and,O
the,O
purchase,O
of,O
securities,O
.,O
,O
Our,O
primary,O
financing,O
activities,O
consist,O
of,O
activity,O
in,O
deposit,O
accounts,O
and,O
FHLB,I-GOVERNMENT
advances,O
.,O
,O
Deposit,O
flows,O
are,O
affected,O
by,O
the,O
overall,O
level,O
of,O
interest,O
rates,O
",",O
the,O
interest,O
rates,O
and,O
products,O
offered,O
by,O
us,O
and,O
our,O
local,O
competitors,O
and,O
other,O
factors,O
.,O
,O
We,O
generally,O
manage,O
the,O
pricing,O
of,O
our,O
deposits,O
to,O
be,O
competitive,O
and,O
to,O
increase,O
core,O
deposit,O
relationships,O
.,O
,O
Occasionally,O
",",O
we,O
offer,O
promotional,O
rates,O
on,O
certain,O
deposit,O
products,O
to,O
attract,O
deposits,O
.,O
,O
The,O
Company,O
is,O
a,O
separate,O
entity,O
and,O
apart,O
from,O
the,O
Bank,O
and,O
must,O
provide,O
for,O
its,O
own,O
liquidity,O
.,O
,O
As,O
of,O
March,O
31,O
",",O
2011,O
",",O
the,O
Company,O
had,O
$,O
8.0,O
million,O
in,O
cash,O
and,O
cash,O
equivalents,O
compared,O
to,O
$,O
54.0,O
million,O
as,O
of,O
December,O
31,O
",",O
2010,O
.,O
,O
Substantially,O
all,O
of,O
the,O
Company,O
’,O
s,O
cash,O
and,O
cash,O
equivalents,O
were,O
obtained,O
from,O
proceeds,O
it,O
retained,O
from,O
the,O
Bank,O
’,O
s,O
mutual-to-stock,O
conversion,O
completed,O
in,O
January,O
2007,O
.,O
,O
In,O
addition,O
to,O
its,O
operating,O
expenses,O
",",O
Company,O
may,O
utilize,O
its,O
cash,O
position,O
for,O
the,O
payment,O
of,O
dividends,O
or,O
to,O
repurchase,O
common,O
stock,O
",",O
subject,O
to,O
applicable,O
restrictions,O
.,O
,O
The,O
Company,O
can,O
receive,O
dividends,O
from,O
the,O
Bank,O
.,O
,O
Payment,O
of,O
such,O
dividends,O
to,O
the,O
Company,O
by,O
the,O
Bank,O
is,O
limited,O
under,O
federal,O
law,O
.,O
,O
The,O
amount,O
that,O
can,O
be,O
paid,O
in,O
any,O
calendar,O
year,O
",",O
without,O
prior,O
regulatory,O
approval,O
",",O
can,O
not,O
exceed,O
the,O
retained,O
net,O
earnings,O
(,O
as,O
defined,O
),O
for,O
the,O
year,O
plus,O
the,O
preceding,O
two,O
calendar,O
years,O
.,O
,O
The,O
Company,O
believes,O
that,O
such,O
restriction,O
will,O
not,O
have,O
an,O
impact,O
on,O
the,O
Company,O
’,O
s,O
ability,O
to,O
meet,O
its,O
ongoing,O
cash,O
obligations,O
.,O
,O
We,O
are,O
subject,O
to,O
various,O
regulatory,O
capital,O
requirements,O
administered,O
by,O
the,O
Office,I-GOVERNMENT
of,I-GOVERNMENT
Thrift,I-GOVERNMENT
Supervision,I-GOVERNMENT
",",O
including,O
a,O
risk-based,O
capital,O
measure,O
.,O
,O
The,O
risk-based,O
capital,O
guidelines,O
include,O
both,O
a,O
definition,O
of,O
capital,O
and,O
a,O
framework,O
for,O
calculating,O
risk-weighted,O
assets,O
by,O
assigning,O
balance,O
sheet,O
assets,O
and,O
off-balance,O
sheet,O
items,O
to,O
broad,O
risk,O
categories,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
",",O
we,O
exceeded,O
all,O
of,O
our,O
regulatory,O
capital,O
requirements,O
.,O
,O
We,O
are,O
considered,O
“,O
well,O
capitalized,O
”,O
under,O
regulatory,O
guidelines,O
.,O
,O
Off-Balance,O
Sheet,O
Arrangements,O
In,O
the,O
normal,O
course,O
of,O
operations,O
",",O
we,O
engage,O
in,O
a,O
variety,O
of,O
financial,O
transactions,O
that,O
",",O
in,O
accordance,O
with,O
U.S.,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
",",O
are,O
not,O
recorded,O
in,O
our,O
financial,O
statements,O
.,O
,O
These,O
transactions,O
involve,O
",",O
to,O
varying,O
degrees,O
",",O
elements,O
of,O
credit,O
",",O
interest,O
rate,O
and,O
liquidity,O
risk,O
.,O
,O
Such,O
transactions,O
are,O
used,O
primarily,O
to,O
manage,O
customers,O
’,O
requests,O
for,O
funding,O
and,O
take,O
the,O
form,O
of,O
loan,O
commitments,O
.,O
,O
For,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
and,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
we,O
engaged,O
in,O
no,O
off-balance,O
sheet,O
transactions,O
reasonably,O
likely,O
to,O
have,O
a,O
material,O
effect,O
on,O
our,O
financial,O
condition,O
",",O
results,O
of,O
operations,O
or,O
cash,O
flows,O
.,O
,O
The,O
Company,O
’,O
s,O
management,O
",",O
including,O
the,O
Company,O
’,O
s,O
principal,O
executive,O
officer,O
and,O
principal,O
financial,O
officer,O
",",O
have,O
evaluated,O
the,O
effectiveness,O
of,O
the,O
Company,O
’,O
s,O
“,O
disclosure,O
controls,O
and,O
procedures,O
",",O
”,O
as,O
such,O
term,O
is,O
defined,O
in,O
Rule,O
13a-15,O
(,O
e,O
),O
promulgated,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
(,O
the,O
“,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
”,O
),O
.,O
,O
Based,O
upon,O
their,O
evaluation,O
",",O
the,O
principal,O
executive,O
officer,O
and,O
principal,O
financial,O
officer,O
concluded,O
that,O
",",O
as,O
of,O
the,O
end,O
of,O
the,O
period,O
covered,O
by,O
this,O
report,O
",",O
the,O
Company,O
’,O
s,O
disclosure,O
controls,O
and,O
procedures,O
were,O
effective,O
for,O
the,O
purpose,O
of,O
ensuring,O
that,O
the,O
information,O
required,O
to,O
be,O
disclosed,O
in,O
the,O
reports,O
that,O
the,O
Company,O
files,O
or,O
submits,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
the,O
“,O
SEC,I-GOVERNMENT
”,O
),O
(,O
1,O
),O
is,O
recorded,O
",",O
processed,O
",",O
summarized,O
and,O
reported,O
within,O
the,O
time,O
periods,O
specified,O
in,O
the,O
SEC,I-GOVERNMENT
’,O
s,O
rules,O
and,O
forms,O
",",O
and,O
(,O
2,O
),O
is,O
accumulated,O
and,O
communicated,O
to,O
the,O
Company,O
’,O
s,O
management,O
",",O
including,O
its,O
principal,O
executive,O
and,O
principal,O
financial,O
officers,O
",",O
as,O
appropriate,O
to,O
allow,O
timely,O
decisions,O
regarding,O
required,O
disclosure,O
.,O
,O
There,O
have,O
been,O
no,O
changes,O
in,O
the,O
Company,O
’,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
identified,O
in,O
connection,O
with,O
the,O
evaluation,O
required,O
by,O
Rule,O
13a-15,O
(,O
e,O
),O
that,O
occurred,O
during,O
the,O
Company,O
’,O
s,O
last,O
fiscal,O
quarter,O
that,O
has,O
materially,O
affected,O
",",O
or,O
is,O
reasonably,O
likely,O
to,O
materially,O
affect,O
",",O
the,O
Company,O
’,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
From,O
time,O
to,O
time,O
",",O
we,O
may,O
be,O
party,O
to,O
various,O
legal,O
proceedings,O
incident,O
to,O
our,O
business,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
",",O
we,O
were,O
not,O
a,O
party,O
to,O
any,O
pending,O
legal,O
proceedings,O
that,O
we,O
believe,O
would,O
have,O
a,O
material,O
adverse,O
effect,O
on,O
our,O
financial,O
condition,O
",",O
results,O
of,O
operations,O
or,O
cash,O
flows,O
.,O
,O
In,O
addition,O
to,O
the,O
other,O
information,O
set,O
forth,O
in,O
this,O
report,O
",",O
you,O
should,O
carefully,O
consider,O
the,O
factors,O
discussed,O
in,O
Part,O
I,O
",",O
“,O
Item,O
1A,O
.,O
,O
Risk,O
Factors,O
”,O
in,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
which,O
could,O
materially,O
affect,O
our,O
business,O
",",O
financial,O
condition,O
or,O
future,O
results,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
the,O
risk,O
factors,O
of,O
the,O
Company,O
have,O
not,O
changed,O
materially,O
from,O
those,O
reported,O
in,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
.,O
,O
However,O
",",O
the,O
risks,O
described,O
in,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
are,O
not,O
the,O
only,O
risks,O
that,O
we,O
face,O
.,O
,O
Additional,O
risks,O
and,O
uncertainties,O
not,O
currently,O
known,O
to,O
us,O
or,O
that,O
we,O
currently,O
deem,O
to,O
be,O
immaterial,O
also,O
may,O
materially,O
adversely,O
affect,O
our,O
business,O
",",O
financial,O
condition,O
and/or,O
operating,O
results,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
thereunto,O
duly,O
authorized,O
.,O
,O
(,O
principal,O
executive,O
officer,O
),O
,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
I,O
",",O
Anthony,I-PERSON
J.,I-PERSON
Szuszczewicz,I-PERSON
",",O
certify,O
that,O
:,O
,O
(,O
a,O
),O
Designed,O
such,O
disclosure,O
controls,O
and,O
procedures,O
",",O
or,O
caused,O
such,O
disclosure,O
controls,O
and,O
procedures,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
ensure,O
that,O
material,O
information,O
relating,O
to,O
the,O
registrant,O
",",O
including,O
its,O
consolidated,O
subsidiaries,O
",",O
is,O
made,O
known,O
to,O
us,O
by,O
others,O
within,O
those,O
entities,O
",",O
particularly,O
during,O
the,O
period,O
in,O
which,O
this,O
report,O
is,O
being,O
prepared,O
;,O
,O
(,O
b,O
),O
Designed,O
such,O
control,O
over,O
financial,O
reporting,O
",",O
or,O
caused,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
provide,O
reasonable,O
assurance,O
regarding,O
the,O
reliability,O
of,O
financial,O
reporting,O
and,O
the,O
preparation,O
of,O
financial,O
statements,O
for,O
external,O
purposes,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
;,O
,O
(,O
b,O
),O
Any,O
fraud,O
",",O
whether,O
or,O
not,O
material,O
",",O
that,O
involves,O
management,O
or,O
other,O
employees,O
who,O
have,O
a,O
significant,O
role,O
in,O
the,O
registrant,O
’,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
I,O
",",O
Paul,I-PERSON
D.,I-PERSON
Rutkowski,I-PERSON
",",O
certify,O
that,O
:,O
,O
(,O
a,O
),O
Designed,O
such,O
disclosure,O
controls,O
and,O
procedures,O
",",O
or,O
caused,O
such,O
disclosure,O
controls,O
and,O
procedures,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
ensure,O
that,O
material,O
information,O
relating,O
to,O
the,O
registrant,O
",",O
including,O
its,O
consolidated,O
subsidiaries,O
",",O
is,O
made,O
known,O
to,O
us,O
by,O
others,O
within,O
those,O
entities,O
",",O
particularly,O
during,O
the,O
period,O
in,O
which,O
this,O
report,O
is,O
being,O
prepared,O
;,O
,O
(,O
b,O
),O
Designed,O
such,O
control,O
over,O
financial,O
reporting,O
",",O
or,O
caused,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
provide,O
reasonable,O
assurance,O
regarding,O
the,O
reliability,O
of,O
financial,O
reporting,O
and,O
the,O
preparation,O
of,O
financial,O
statements,O
for,O
external,O
purposes,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
;,O
,O
(,O
b,O
),O
Any,O
fraud,O
",",O
whether,O
or,O
not,O
material,O
",",O
that,O
involves,O
management,O
or,O
other,O
employees,O
who,O
have,O
a,O
significant,O
role,O
in,O
the,O
registrant,O
’,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
In,O
connection,O
with,O
the,O
Quarterly,O
Report,O
of,O
Polonia,I-BUSINESS
Bancorp,I-BUSINESS
(,O
the,O
“,O
Company,O
”,O
),O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
for,O
the,O
quarter,O
ended,O
March,O
31,O
",",O
2011,O
as,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
the,O
“,O
Report,O
”,O
),O
",",O
the,O
undersigned,O
hereby,O
certify,O
",",O
pursuant,O
to,O
18,O
U.S.C.,I-LEGISLATION/ACT
§,O
1350,O
",",O
as,O
added,O
by,O
§,O
906,O
of,O
the,O
Sarbanes-Oxley,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
2002,I-LEGISLATION/ACT
",",O
that,O
:,O
,O
-DOCSTART-,O
,O
INVESTMENT,O
OBJECTIVE,O
James,I-BUSINESS
Long-Short,I-BUSINESS
Fund,I-BUSINESS
seeks,O
to,O
provide,O
long-term,O
capital,O
appreciation,O
.,O
,O
FEES,I-MISCELLANEOUS
AND,I-MISCELLANEOUS
EXPENSES,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
THE,I-MISCELLANEOUS
FUND,I-MISCELLANEOUS
This,O
table,O
describes,O
the,O
fees,O
and,O
expenses,O
that,O
you,O
may,O
pay,O
if,O
you,O
buy,O
and,O
hold,O
shares,O
of,O
the,O
Fund,O
.,O
,O
ANNUAL,I-MISCELLANEOUS
FUND,I-MISCELLANEOUS
OPERATING,I-MISCELLANEOUS
EXPENSES,I-MISCELLANEOUS
(,O
expenses,O
that,O
you,O
pay,O
each,O
year,O
as,O
a,O
percentage,O
of,O
the,O
value,O
of,O
your,O
investment,O
),O
,O
EXAMPLE,I-MISCELLANEOUS
The,O
Example,O
is,O
intended,O
to,O
help,O
you,O
compare,O
the,O
cost,O
of,O
investing,O
in,O
the,O
Fund,O
with,O
the,O
cost,O
of,O
investing,O
in,O
other,O
mutual,O
funds,O
.,O
,O
The,O
Example,O
assumes,O
that,O
you,O
invest,O
$,O
"10,000",O
in,O
the,O
Fund,O
for,O
the,O
time,O
period,O
indicated,O
and,O
then,O
redeem,O
all,O
of,O
your,O
shares,O
at,O
the,O
end,O
of,O
those,O
periods,O
.,O
,O
The,O
Example,O
also,O
assumes,O
that,O
your,O
investment,O
has,O
a,O
5,O
%,O
return,O
each,O
year,O
and,O
that,O
the,O
Fund,O
s,O
operating,O
expenses,O
remain,O
the,O
same,O
.,O
,O
Although,O
your,O
actual,O
costs,O
may,O
be,O
higher,O
or,O
lower,O
",",O
based,O
on,O
these,O
assumptions,O
your,O
costs,O
would,O
be,O
:,O
,O
Portfolio,O
Turnover,O
:,O
The,O
Fund,O
pays,O
transaction,O
costs,O
",",O
such,O
as,O
commissions,O
",",O
when,O
it,O
buys,O
and,O
sells,O
securities,O
(,O
or,O
turns,O
over,O
its,O
portfolio,O
),O
.,O
,O
A,O
higher,O
portfolio,O
turnover,O
may,O
indicate,O
higher,O
transaction,O
costs,O
and,O
may,O
result,O
in,O
higher,O
taxes,O
when,O
Fund,O
shares,O
are,O
held,O
in,O
a,O
taxable,O
account,O
.,O
,O
These,O
costs,O
",",O
which,O
are,O
not,O
reflected,O
in,O
annual,O
fund,O
operating,O
expenses,O
or,O
in,O
the,O
Example,O
",",O
affect,O
the,O
Fund,O
s,O
performance,O
.,O
,O
PRINCIPAL,O
INVESTMENT,O
STRATEGIES,O
The,O
Fund,O
invests,O
primarily,O
in,O
foreign,O
and,O
domestic,O
equity,O
securities,O
(,O
long,O
positions,O
),O
that,O
the,O
Adviser,O
believes,O
are,O
undervalued,O
and,O
more,O
likely,O
to,O
appreciate,O
",",O
and,O
sells,O
short,O
equity,O
securities,O
(,O
short,O
positions,O
),O
that,O
the,O
Adviser,O
believes,O
are,O
overvalued,O
and,O
more,O
likely,O
to,O
depreciate,O
.,O
,O
The,O
Fund,O
also,O
may,O
take,O
long,O
positions,O
in,O
domestic,O
and,O
foreign,O
fixed,O
income,O
securities,O
that,O
the,O
Adviser,O
believes,O
are,O
more,O
likely,O
to,O
appreciate,O
in,O
the,O
interest,O
rate,O
and,O
spread,O
environment,O
anticipated,O
by,O
the,O
Adviser,O
",",O
and,O
short,O
positions,O
in,O
fixed,O
income,O
securities,O
that,O
the,O
Adviser,O
believes,O
are,O
more,O
likely,O
to,O
depreciate,O
in,O
the,O
interest,O
rate,O
and,O
spread,O
environment,O
anticipated,O
by,O
the,O
Adviser,O
.,O
,O
The,O
Fund,O
seeks,O
to,O
achieve,O
positive,O
returns,O
on,O
both,O
the,O
long,O
positions,O
and,O
short,O
positions,O
that,O
it,O
takes,O
in,O
various,O
securities,O
.,O
,O
At,O
any,O
one,O
time,O
",",O
the,O
Fund,O
can,O
have,O
up,O
to,O
a,O
100,O
%,O
exposure,O
in,O
long,O
positions,O
or,O
short,O
positions,O
.,O
,O
Equity,O
securities,O
that,O
the,O
Fund,O
will,O
principally,O
invest,O
in,O
are,O
common,O
stocks,O
",",O
preferred,O
stocks,O
and,O
real,O
estate,O
investment,O
trusts,O
(,O
REITs,O
),O
",",O
as,O
well,O
as,O
exchange,O
traded,O
funds,O
(,O
ETFs,O
),O
that,O
invest,O
primarily,O
in,O
equity,O
securities,O
and,O
exchange,O
traded,O
notes,O
(,O
ETNs,O
),O
whose,O
returns,O
are,O
linked,O
to,O
an,O
equity,O
index,O
.,O
,O
Fixed,O
income,O
securities,O
that,O
the,O
Fund,O
will,O
principally,O
invest,O
in,O
are,O
corporate,O
bonds,O
",",O
notes,O
",",O
high,O
yield,O
bonds,O
",",O
municipal,O
securities,O
",",O
U.S.,I-LOCATION
government,O
securities,O
and,O
sovereign,O
and,O
supranational,O
securities,O
",",O
as,O
well,O
as,O
ETFs,O
that,O
invest,O
primarily,O
in,O
such,O
securities,O
and,O
ETNs,O
whose,O
returns,O
are,O
linked,O
to,O
fixed,O
income,O
indexes,O
",",O
currencies,O
or,O
interest,O
rates,O
.,O
,O
The,O
Fund,O
may,O
take,O
long,O
and,O
short,O
positions,O
in,O
fixed,O
income,O
securities,O
of,O
any,O
maturity,O
or,O
credit,O
quality,O
.,O
,O
A,O
significant,O
portion,O
of,O
the,O
Fund,O
s,O
long,O
and,O
short,O
equity,O
positions,O
may,O
be,O
invested,O
in,O
smaller,O
capitalization,O
securities,O
.,O
,O
The,O
Fund,O
is,O
non-diversified,O
",",O
which,O
means,O
that,O
it,O
can,O
invest,O
a,O
relatively,O
high,O
percentage,O
of,O
its,O
assets,O
in,O
a,O
limited,O
number,O
of,O
securities,O
.,O
,O
The,O
Adviser,O
may,O
sell,O
a,O
long,O
position,O
or,O
close,O
out,O
a,O
short,O
position,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
position,O
is,O
not,O
as,O
likely,O
to,O
achieve,O
positive,O
returns,O
",",O
or,O
that,O
another,O
position,O
is,O
more,O
likely,O
to,O
do,O
so,O
.,O
,O
The,O
Adviser,O
also,O
may,O
sell,O
a,O
long,O
position,O
or,O
close,O
out,O
a,O
short,O
position,O
to,O
reallocate,O
the,O
Fund,O
s,O
portfolio,O
between,O
long,O
and,O
short,O
positions,O
",",O
or,O
between,O
equity,O
and,O
fixed,O
income,O
securities,O
;,O
to,O
adjust,O
the,O
portfolio,O
s,O
sector,O
or,O
industry,O
exposure,O
;,O
to,O
adjust,O
the,O
duration,O
of,O
the,O
fixed,O
income,O
portion,O
of,O
the,O
portfolio,O
;,O
or,O
to,O
trim,O
a,O
position,O
that,O
has,O
become,O
too,O
large,O
a,O
percentage,O
of,O
the,O
portfolio,O
.,O
,O
PRINCIPAL,I-MISCELLANEOUS
RISKS,I-MISCELLANEOUS
All,O
investments,O
carry,O
a,O
certain,O
amount,O
of,O
risk,O
and,O
the,O
Fund,O
can,O
not,O
guarantee,O
that,O
it,O
will,O
achieve,O
its,O
investment,O
objective,O
.,O
,O
An,O
investment,O
in,O
the,O
Fund,O
is,O
not,O
a,O
deposit,O
or,O
obligation,O
of,O
any,O
bank,O
",",O
is,O
not,O
endorsed,O
or,O
guaranteed,O
by,O
any,O
bank,O
",",O
and,O
is,O
not,O
insured,O
by,O
the,O
Federal,I-GOVERNMENT
Deposit,I-GOVERNMENT
Insurance,I-GOVERNMENT
Corporation,I-GOVERNMENT
(,O
FDIC,O
),O
or,O
any,O
other,O
government,O
agency,O
.,O
,O
You,O
may,O
lose,O
money,O
by,O
investing,O
in,O
the,O
Fund,O
.,O
,O
Below,O
are,O
the,O
main,O
risks,O
of,O
investing,O
in,O
the,O
Fund,O
.,O
,O
Equity,O
Market,O
Risk,O
:,O
Overall,O
stock,O
market,O
risks,O
may,O
affect,O
the,O
value,O
of,O
the,O
Fund,O
.,O
,O
Factors,O
such,O
as,O
domestic,O
economic,O
growth,O
and,O
market,O
conditions,O
",",O
interest,O
rate,O
levels,O
",",O
and,O
political,O
events,O
affect,O
the,O
securities,O
markets,O
.,O
,O
When,O
the,O
value,O
of,O
the,O
Fund,O
s,O
investments,O
goes,O
down,O
",",O
your,O
investment,O
in,O
the,O
Fund,O
decreases,O
in,O
value,O
and,O
you,O
could,O
lose,O
money,O
.,O
,O
Fixed,O
Income,O
Risk,O
:,O
Fixed,O
income,O
securities,O
are,O
subject,O
to,O
inherent,O
market,O
risks,O
and,O
fluctuations,O
in,O
value,O
due,O
to,O
changes,O
in,O
earnings,O
",",O
economic,O
conditions,O
",",O
quality,O
ratings,O
and,O
other,O
factors,O
beyond,O
the,O
control,O
of,O
the,O
Adviser,O
.,O
,O
These,O
securities,O
are,O
also,O
subject,O
to,O
price,O
fluctuations,O
based,O
on,O
changes,O
in,O
interest,O
rates,O
.,O
,O
If,O
rates,O
increase,O
",",O
the,O
value,O
of,O
the,O
Fund,O
s,O
fixed,O
income,O
securities,O
generally,O
will,O
decline,O
",",O
and,O
those,O
securities,O
with,O
longer,O
terms,O
generally,O
will,O
decline,O
more,O
.,O
,O
securities,O
held,O
by,O
the,O
Fund,O
.,O
,O
Such,O
defaults,O
could,O
result,O
in,O
losses,O
to,O
the,O
Fund,O
.,O
,O
Securities,O
with,O
lower,O
credit,O
quality,O
have,O
a,O
greater,O
risk,O
of,O
default,O
.,O
,O
In,O
addition,O
",",O
the,O
credit,O
quality,O
of,O
securities,O
held,O
by,O
the,O
Fund,O
may,O
be,O
lowered,O
if,O
an,O
issuer,O
s,O
financial,O
condition,O
changes,O
.,O
,O
Lower,O
credit,O
quality,O
may,O
lead,O
to,O
greater,O
volatility,O
in,O
the,O
price,O
of,O
a,O
security,O
and,O
in,O
shares,O
of,O
the,O
Fund,O
.,O
,O
Lower,O
credit,O
quality,O
also,O
may,O
affect,O
liquidity,O
and,O
make,O
it,O
difficult,O
for,O
the,O
Fund,O
to,O
sell,O
the,O
security,O
.,O
,O
Management,O
Risk,O
:,O
The,O
Adviser,O
s,O
judgments,O
about,O
the,O
attractiveness,O
",",O
value,O
and,O
potential,O
appreciation,O
of,O
a,O
particular,O
asset,O
class,O
or,O
individual,O
security,O
in,O
which,O
the,O
Fund,O
invests,O
may,O
prove,O
to,O
be,O
incorrect,O
.,O
,O
If,O
the,O
Adviser,O
does,O
not,O
correctly,O
identify,O
undervalued,O
and,O
overvalued,O
equity,O
securities,O
",",O
or,O
anticipate,O
future,O
interest,O
rate,O
and,O
spread,O
environments,O
",",O
the,O
Fund,O
may,O
experience,O
losses,O
regardless,O
of,O
the,O
overall,O
performance,O
of,O
the,O
markets,O
.,O
,O
Short,O
Selling,O
Risk,O
:,O
The,O
Fund,O
will,O
incur,O
a,O
loss,O
as,O
a,O
result,O
of,O
a,O
short,O
sale,O
if,O
the,O
price,O
of,O
the,O
security,O
sold,O
short,O
increases,O
in,O
value,O
between,O
the,O
date,O
of,O
the,O
short,O
sale,O
and,O
the,O
date,O
on,O
which,O
the,O
Fund,O
purchases,O
the,O
security,O
to,O
replace,O
the,O
borrowed,O
security,O
.,O
,O
In,O
addition,O
",",O
a,O
lender,O
may,O
request,O
that,O
securities,O
sold,O
short,O
be,O
returned,O
to,O
the,O
lender,O
on,O
short,O
notice,O
",",O
in,O
which,O
case,O
the,O
Fund,O
may,O
have,O
to,O
buy,O
the,O
securities,O
sold,O
short,O
at,O
an,O
unfavorable,O
price,O
.,O
,O
If,O
this,O
occurs,O
",",O
any,O
anticipated,O
gain,O
to,O
the,O
Fund,O
may,O
be,O
reduced,O
or,O
eliminated,O
or,O
the,O
short,O
sale,O
may,O
result,O
in,O
a,O
loss,O
.,O
,O
The,O
Fund,O
s,O
losses,O
are,O
potentially,O
unlimited,O
in,O
a,O
short,O
sale,O
transaction,O
.,O
,O
Short,O
sales,O
are,O
speculative,O
transactions,O
and,O
involve,O
special,O
risks,O
",",O
including,O
greater,O
reliance,O
on,O
the,O
Adviser,O
s,O
ability,O
to,O
accurately,O
anticipate,O
the,O
future,O
value,O
of,O
a,O
security,O
.,O
,O
Smaller,O
Cap,O
Company,O
Risk,O
:,O
Smaller,O
capitalization,O
companies,O
may,O
experience,O
higher,O
failure,O
rates,O
than,O
do,O
larger,O
capitalization,O
companies,O
.,O
,O
In,O
addition,O
",",O
smaller,O
companies,O
may,O
be,O
more,O
vulnerable,O
to,O
economic,O
",",O
market,O
and,O
industry,O
changes,O
.,O
,O
As,O
a,O
result,O
",",O
share,O
price,O
changes,O
may,O
be,O
more,O
sudden,O
or,O
erratic,O
than,O
the,O
prices,O
of,O
other,O
equity,O
securities,O
",",O
especially,O
over,O
the,O
short,O
term,O
.,O
,O
Such,O
companies,O
may,O
have,O
limited,O
product,O
lines,O
",",O
markets,O
or,O
financial,O
resources,O
and,O
may,O
lack,O
management,O
depth,O
.,O
,O
The,O
trading,O
volume,O
of,O
securities,O
of,O
smaller,O
capitalization,O
companies,O
is,O
normally,O
less,O
than,O
that,O
of,O
larger,O
capitalization,O
companies,O
",",O
and,O
therefore,O
may,O
disproportionately,O
affect,O
their,O
market,O
price,O
",",O
tending,O
to,O
make,O
them,O
fall,O
more,O
in,O
response,O
to,O
selling,O
pressure,O
than,O
is,O
the,O
case,O
with,O
larger,O
capitalization,O
companies,O
.,O
,O
These,O
risks,O
are,O
enhanced,O
for,O
micro,O
cap,O
securities,O
.,O
,O
Many,O
micro,O
cap,O
companies,O
tend,O
to,O
be,O
new,O
and,O
have,O
no,O
proven,O
track,O
record,O
.,O
,O
Some,O
of,O
these,O
companies,O
have,O
no,O
assets,O
or,O
operations,O
",",O
while,O
others,O
have,O
products,O
and,O
services,O
that,O
are,O
still,O
in,O
development,O
or,O
have,O
yet,O
to,O
be,O
tested,O
in,O
the,O
market,O
.,O
,O
The,O
prices,O
of,O
micro,O
cap,O
securities,O
generally,O
are,O
even,O
more,O
volatile,O
and,O
their,O
markets,O
less,O
liquid,O
than,O
other,O
small,O
or,O
mid,O
cap,O
securities,O
.,O
,O
Because,O
micro,O
cap,O
stocks,O
trade,O
in,O
low,O
volumes,O
",",O
any,O
size,O
of,O
trade,O
can,O
have,O
a,O
large,O
percentage,O
impact,O
on,O
the,O
price,O
of,O
the,O
stock,O
.,O
,O
REIT,O
Risk,O
:,O
To,O
the,O
extent,O
that,O
the,O
Fund,O
invests,O
in,O
companies,O
that,O
invest,O
in,O
real,O
estate,O
",",O
such,O
as,O
REITs,O
",",O
the,O
Fund,O
may,O
be,O
subject,O
to,O
risk,O
associated,O
with,O
the,O
real,O
estate,O
market,O
as,O
a,O
whole,O
",",O
such,O
as,O
taxation,O
",",O
regulations,O
",",O
and,O
economic,O
and,O
political,O
factors,O
that,O
negatively,O
impact,O
the,O
real,O
estate,O
market,O
",",O
and,O
with,O
direct,O
ownership,O
of,O
real,O
estate,O
",",O
such,O
as,O
decreases,O
in,O
real,O
estate,O
values,O
",",O
overbuilding,O
",",O
environmental,O
liabilities,O
and,O
increases,O
in,O
operating,O
costs,O
",",O
interest,O
rates,O
and/or,O
property,O
taxes,O
.,O
,O
Exchange,O
Traded,O
Fund,O
Risk,O
:,O
An,O
ETF,O
may,O
trade,O
at,O
a,O
discount,O
to,O
its,O
net,O
asset,O
value,O
.,O
,O
the,O
Fund,O
invests,O
in,O
addition,O
to,O
the,O
Fund,O
s,O
direct,O
fees,O
and,O
expenses,O
.,O
,O
The,O
Fund,O
will,O
also,O
incur,O
brokerage,O
costs,O
when,O
it,O
purchases,O
shares,O
of,O
ETFs,O
.,O
,O
In,O
addition,O
",",O
the,O
Fund,O
will,O
be,O
affected,O
by,O
losses,O
of,O
the,O
underlying,O
ETF,O
and,O
the,O
level,O
of,O
risk,O
arising,O
from,O
the,O
investment,O
practices,O
of,O
the,O
underlying,O
ETF,O
.,O
,O
Inverse,O
and,O
leveraged,O
ETFs,O
use,O
investment,O
techniques,O
and,O
financial,O
instruments,O
that,O
may,O
be,O
considered,O
aggressive,O
",",O
including,O
the,O
use,O
of,O
derivative,O
transactions,O
and,O
short,O
selling,O
techniques,O
.,O
,O
To,O
the,O
extent,O
that,O
the,O
Fund,O
invests,O
in,O
ETFs,O
that,O
invest,O
in,O
commodities,O
",",O
the,O
demand,O
and,O
supply,O
of,O
these,O
commodities,O
may,O
fluctuate,O
widely,O
.,O
,O
Commodity,O
ETFs,O
may,O
use,O
derivatives,O
",",O
which,O
exposes,O
them,O
to,O
further,O
risks,O
",",O
including,O
counterparty,O
risk,O
(,O
i.e.,O
",",O
the,O
risk,O
that,O
the,O
institution,O
on,O
the,O
other,O
side,O
of,O
the,O
trade,O
will,O
default,O
),O
.,O
,O
Exchange,O
Traded,O
Note,O
Risk,O
:,O
ETNs,O
are,O
synthetic,O
securities,O
",",O
typically,O
unsecured,O
",",O
with,O
returns,O
linked,O
to,O
the,O
performance,O
of,O
a,O
market,O
index,O
.,O
,O
An,O
ETN,O
does,O
not,O
own,O
the,O
underlying,O
index,O
it,O
is,O
tracking,O
",",O
and,O
thus,O
the,O
Fund,O
will,O
have,O
no,O
claim,O
on,O
the,O
index,O
and,O
will,O
be,O
totally,O
reliant,O
on,O
the,O
counterparty,O
for,O
payment,O
.,O
,O
ETNs,O
are,O
subject,O
to,O
credit,O
risk,O
of,O
the,O
counterparty,O
",",O
and,O
the,O
value,O
of,O
an,O
ETN,O
will,O
vary,O
and,O
will,O
be,O
influenced,O
by,O
time,O
to,O
maturity,O
",",O
level,O
of,O
supply,O
and,O
demand,O
for,O
the,O
ETN,O
",",O
volatility,O
and,O
lack,O
of,O
liquidity,O
in,O
underlying,O
markets,O
to,O
which,O
its,O
payments,O
are,O
linked,O
",",O
changes,O
in,O
the,O
applicable,O
interest,O
rates,O
",",O
changes,O
in,O
the,O
issuer,O
s,O
credit,O
rating,O
",",O
and,O
economic,O
",",O
legal,O
",",O
political,O
",",O
or,O
geographic,O
events,O
.,O
,O
The,O
Fund,O
will,O
bear,O
its,O
proportionate,O
share,O
of,O
any,O
fees,O
and,O
expenses,O
borne,O
by,O
the,O
ETN,O
.,O
,O
Sector,O
Risk,O
:,O
Equity,O
securities,O
within,O
the,O
same,O
group,O
of,O
industries,O
may,O
decline,O
in,O
price,O
due,O
to,O
sector-specific,O
market,O
or,O
economic,O
developments,O
.,O
,O
If,O
the,O
Adviser,O
invests,O
a,O
significant,O
portion,O
of,O
the,O
Fund,O
s,O
assets,O
in,O
a,O
particular,O
sector,O
",",O
the,O
Fund,O
is,O
subject,O
to,O
the,O
risk,O
that,O
companies,O
in,O
the,O
same,O
sector,O
are,O
likely,O
to,O
react,O
similarly,O
to,O
legislative,O
or,O
regulatory,O
changes,O
",",O
adverse,O
market,O
conditions,O
and/or,O
increased,O
competition,O
affecting,O
that,O
market,O
segment,O
.,O
,O
This,O
may,O
cause,O
the,O
Fund,O
s,O
net,O
asset,O
value,O
to,O
fluctuate,O
more,O
than,O
that,O
of,O
a,O
fund,O
that,O
does,O
not,O
concentrate,O
in,O
a,O
particular,O
sector,O
.,O
,O
High,O
Yield,O
Securities,O
Risk,O
:,O
The,O
Fund,O
may,O
be,O
subject,O
to,O
greater,O
levels,O
of,O
price,O
volatility,O
as,O
a,O
result,O
of,O
investing,O
in,O
high,O
yield,O
securities,O
and,O
unrated,O
securities,O
of,O
similar,O
credit,O
quality,O
(,O
commonly,O
known,O
as,O
junk,O
bonds,O
),O
than,O
funds,O
that,O
do,O
not,O
invest,O
in,O
such,O
securities,O
.,O
,O
Such,O
bonds,O
are,O
considered,O
to,O
be,O
predominately,O
speculative,O
because,O
of,O
the,O
issuer,O
s,O
lower,O
ability,O
to,O
make,O
principal,O
and,O
interest,O
payments,O
.,O
,O
An,O
economic,O
downturn,O
",",O
a,O
period,O
of,O
rising,O
interest,O
rates,O
or,O
increased,O
price,O
volatility,O
could,O
adversely,O
affect,O
the,O
market,O
for,O
these,O
securities,O
",",O
and,O
reduce,O
the,O
number,O
of,O
buyers,O
should,O
the,O
Fund,O
need,O
to,O
sell,O
these,O
securities,O
(,O
liquidity,O
risk,O
),O
.,O
,O
Should,O
an,O
issuer,O
declare,O
bankruptcy,O
",",O
there,O
may,O
be,O
potential,O
for,O
partial,O
recovery,O
of,O
the,O
value,O
of,O
the,O
bonds,O
",",O
but,O
the,O
Fund,O
could,O
also,O
lose,O
its,O
entire,O
investment,O
.,O
,O
Municipal,O
Securities,O
Risk,O
:,O
Municipal,O
securities,O
are,O
subject,O
to,O
the,O
risk,O
that,O
legislative,O
changes,O
and,O
local,O
and,O
business,O
developments,O
may,O
adversely,O
affect,O
the,O
yield,O
or,O
value,O
of,O
the,O
Fund,O
s,O
investments,O
in,O
such,O
securities,O
.,O
,O
Changes,O
or,O
proposed,O
changes,O
in,O
federal,O
tax,O
laws,O
may,O
also,O
cause,O
the,O
prices,O
of,O
municipal,O
securities,O
to,O
fall,O
and,O
adversely,O
affect,O
the,O
Fund,O
s,O
investment,O
.,O
,O
Foreign,O
Investment,O
Risk,O
:,O
Foreign,O
investing,O
involves,O
risks,O
not,O
typically,O
associated,O
with,O
U.S.,I-LOCATION
.,O
,O
These,O
risks,O
include,O
",",O
among,O
others,O
",",O
adverse,O
fluctuations,O
in,O
foreign,O
currency,O
values,O
as,O
well,O
as,O
adverse,O
political,O
",",O
social,O
and,O
economic,O
developments,O
affecting,O
a,O
foreign,O
country,O
.,O
,O
In,O
addition,O
",",O
foreign,O
investing,O
involves,O
less,O
publicly,O
available,O
information,O
",",O
and,O
more,O
volatile,O
or,O
less,O
liquid,O
securities,O
markets,O
.,O
,O
Foreign,O
accounting,O
may,O
be,O
less,O
transparent,O
than,O
U.S.,I-LOCATION
accounting,O
practices,O
and,O
foreign,O
regulation,O
may,O
be,O
inadequate,O
or,O
irregular,O
.,O
,O
Owning,O
foreign,O
securities,O
could,O
cause,O
the,O
Fund,O
s,O
performance,O
to,O
fluctuate,O
more,O
than,O
if,O
it,O
held,O
only,O
U.S.,I-LOCATION
,O
Sovereign,O
and,O
Supranational,O
Debt,O
Risk,O
:,O
The,O
Fund,O
may,O
invest,O
in,O
sovereign,O
and,O
supranational,O
debt,O
obligations,O
.,O
,O
Investment,O
in,O
sovereign,O
and,O
supranational,O
debt,O
obligations,O
involves,O
special,O
risks,O
not,O
present,O
in,O
foreign,O
corporate,O
debt,O
obligations,O
.,O
,O
The,O
issuer,O
of,O
the,O
debt,O
or,O
the,O
governmental,O
authorities,O
that,O
control,O
the,O
repayment,O
of,O
the,O
debt,O
may,O
be,O
unable,O
or,O
unwilling,O
to,O
repay,O
principal,O
or,O
interest,O
when,O
due,O
",",O
and,O
the,O
Fund,O
may,O
have,O
limited,O
recourse,O
in,O
the,O
event,O
of,O
a,O
default,O
.,O
,O
During,O
periods,O
of,O
economic,O
uncertainty,O
",",O
the,O
market,O
prices,O
of,O
sovereign,O
and,O
supranational,O
debt,O
",",O
and,O
the,O
Fund,O
s,O
net,O
asset,O
value,O
",",O
may,O
be,O
more,O
volatile,O
than,O
prices,O
of,O
U.S.,I-LOCATION
.,O
,O
Non-Diversification,O
Risk,O
:,O
As,O
a,O
non-diversified,O
fund,O
",",O
the,O
Fund,O
may,O
invest,O
more,O
of,O
its,O
total,O
assets,O
in,O
the,O
securities,O
of,O
issuers,O
that,O
each,O
represent,O
greater,O
than,O
5,O
%,O
of,O
the,O
Fund,O
s,O
total,O
assets,O
.,O
,O
Because,O
a,O
relatively,O
high,O
percentage,O
of,O
the,O
assets,O
of,O
the,O
Fund,O
may,O
be,O
invested,O
in,O
the,O
securities,O
of,O
a,O
limited,O
number,O
of,O
issuers,O
",",O
the,O
value,O
of,O
shares,O
of,O
the,O
Fund,O
may,O
be,O
more,O
sensitive,O
to,O
any,O
single,O
economic,O
",",O
business,O
",",O
political,O
or,O
regulatory,O
occurrence,O
than,O
the,O
value,O
of,O
shares,O
of,O
a,O
diversified,O
investment,O
company,O
.,O
,O
This,O
fluctuation,O
",",O
if,O
significant,O
",",O
may,O
affect,O
the,O
performance,O
of,O
the,O
Fund,O
.,O
,O
Portfolio,O
Turnover,O
Risk,O
:,O
The,O
Fund,O
will,O
likely,O
have,O
a,O
high,O
portfolio,O
turnover,O
rate,O
.,O
,O
A,O
high,O
portfolio,O
turnover,O
rate,O
can,O
result,O
in,O
increased,O
brokerage,O
commission,O
costs,O
and,O
may,O
expose,O
taxable,O
shareholders,O
to,O
potentially,O
larger,O
current,O
tax,O
liability,O
.,O
,O
Industry,O
practice,O
is,O
to,O
calculate,O
the,O
turnover,O
ratio,O
only,O
on,O
the,O
Fund,O
s,O
long,O
portfolio,O
.,O
,O
If,O
short,O
positions,O
were,O
also,O
included,O
in,O
this,O
calculation,O
",",O
the,O
Fund,O
s,O
turnover,O
ratio,O
would,O
likely,O
be,O
higher,O
.,O
,O
PERFORMANCE,O
Performance,O
information,O
is,O
not,O
included,O
because,O
the,O
Fund,O
had,O
not,O
yet,O
commenced,O
operations,O
as,O
of,O
December,O
31,O
",",O
2010,O
.,O
,O
When,O
this,O
information,O
is,O
provided,O
",",O
it,O
will,O
illustrate,O
the,O
variability,O
of,O
the,O
Fund,O
s,O
returns,O
and,O
give,O
some,O
indication,O
of,O
the,O
risks,O
of,O
investing,O
in,O
the,O
Fund,O
by,O
showing,O
changes,O
in,O
the,O
Fund,O
s,O
performance,O
from,O
year,O
to,O
year,O
and,O
by,O
showing,O
how,O
the,O
Fund,O
s,O
average,O
annual,O
returns,O
compare,O
with,O
those,O
of,O
a,O
broad,O
measure,O
of,O
market,O
performance,O
.,O
,O
PORTFOLIO,I-MISCELLANEOUS
MANAGEMENT,I-MISCELLANEOUS
James,I-BUSINESS
Investment,I-BUSINESS
Research,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
is,O
the,O
investment,O
adviser,O
to,O
the,O
Fund,O
.,O
,O
The,O
Fund,O
is,O
managed,O
by,O
an,O
investment,O
committee,O
of,O
the,O
Adviser,O
consisting,O
of,O
the,O
following,O
seven,O
members,O
:,O
,O
You,O
can,O
buy,O
and,O
redeem,O
shares,O
of,O
the,O
Fund,O
on,O
any,O
day,O
the,O
NYSE,I-BUSINESS
is,O
open,O
for,O
business,O
by,O
calling,O
1-800-99JAMES,O
(,O
1-800-995-2637,O
),O
;,O
by,O
writing,O
to,O
The,I-BUSINESS
James,I-BUSINESS
Advantage,I-BUSINESS
Funds,I-BUSINESS
",",O
P.O,O
.,O
,O
Box,O
786,O
",",O
Denver,I-LOCATION
",",O
CO,I-LOCATION
80201,O
;,O
via,O
overnight,O
mail,O
at,O
1290,O
Broadway,I-LOCATION
",",O
Suite,O
1100,O
",",O
Denver,I-LOCATION
",",O
CO,I-LOCATION
80203,O
;,O
via,O
the,O
Fund,O
s,O
website,O
at,O
www.jamesfunds.com,O
;,O
through,O
a,O
financial,O
intermediary,O
that,O
has,O
established,O
an,O
agreement,O
with,O
the,O
Fund,O
s,O
distributor,O
;,O
or,O
if,O
you,O
are,O
a,O
client,O
of,O
the,O
Adviser,O
.,O
,O
DIVIDENDS,I-MISCELLANEOUS
",",I-MISCELLANEOUS
CAPITAL,I-MISCELLANEOUS
GAINS,I-MISCELLANEOUS
AND,I-MISCELLANEOUS
TAXES,I-MISCELLANEOUS
The,O
Fund,O
s,O
distributions,O
may,O
be,O
taxable,O
as,O
ordinary,O
income,O
or,O
capital,O
gains,O
",",O
except,O
when,O
your,O
investment,O
is,O
in,O
an,O
IRA,O
",",O
401,O
(,O
k,O
),O
or,O
other,O
tax-advantaged,O
investment,O
plan,O
.,O
,O
POTENTIAL,O
CONFLICTS,O
OF,O
INTEREST,O
If,O
you,O
purchase,O
the,O
Fund,O
through,O
a,O
broker-dealer,O
or,O
other,O
financial,O
intermediary,O
(,O
such,O
as,O
a,O
bank,O
),O
",",O
the,O
Fund,O
and,O
its,O
related,O
companies,O
may,O
pay,O
the,O
intermediary,O
for,O
the,O
sale,O
of,O
Fund,O
shares,O
and,O
related,O
services,O
.,O
,O
These,O
payments,O
may,O
create,O
a,O
conflict,O
of,O
interest,O
by,O
influencing,O
the,O
broker-dealer,O
or,O
other,O
intermediary,O
and,O
your,O
salesperson,O
to,O
recommend,O
the,O
Fund,O
over,O
another,O
investment,O
.,O
,O
Ask,O
your,O
salesperson,O
or,O
visit,O
your,O
financial,O
intermediary,O
s,O
website,O
for,O
more,O
information,O
.,O
,O
-DOCSTART-,O
,O
If,O
the,O
filing,O
person,O
has,O
previously,O
filed,O
a,O
statement,O
on,O
Schedule,I-MISCELLANEOUS
13G,I-MISCELLANEOUS
to,O
report,O
the,O
acquisition,O
which,O
is,O
the,O
subject,O
of,O
this,O
Schedule,I-MISCELLANEOUS
13D,I-MISCELLANEOUS
",",O
and,O
is,O
filing,O
this,O
schedule,O
because,O
of,O
Rule,O
13d-1,O
(,O
e,O
),O
",",O
13d-1,O
(,O
f,O
),O
or,O
13d-1,O
(,O
g,O
),O
",",O
check,O
the,O
following,O
box,O
[,O
X,O
],O
.,O
,O
Note,O
:,O
Schedules,O
filed,O
in,O
paper,O
format,O
shall,O
include,O
a,O
signed,O
original,O
and,O
five,O
copies,O
of,O
the,O
schedule,O
",",O
including,O
all,O
exhibits,O
.,O
,O
See,O
Rule,O
13d-7,O
(,O
b,O
),O
for,O
other,O
parties,O
to,O
whom,O
copies,O
are,O
to,O
be,O
sent,O
.,O
,O
*,O
The,O
remainder,O
of,O
this,O
cover,O
page,O
shall,O
be,O
filled,O
out,O
for,O
a,O
reporting,O
person,O
's,O
initial,O
filing,O
on,O
this,O
form,O
with,O
respect,O
to,O
the,O
subject,O
class,O
of,O
securities,O
",",O
and,O
for,O
any,O
subsequent,O
amendment,O
containing,O
information,O
which,O
would,O
alter,O
disclosures,O
provided,O
in,O
a,O
prior,O
cover,O
page,O
.,O
,O
The,O
information,O
required,O
on,O
the,O
remainder,O
of,O
this,O
cover,O
page,O
shall,O
not,O
be,O
deemed,O
to,O
be,O
``,O
filed,O
'',O
for,O
the,O
purpose,O
of,O
Section,O
18,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
(,O
``,O
Act,O
'',O
),O
or,O
otherwise,O
subject,O
to,O
the,O
liabilities,O
of,O
that,O
section,O
of,O
the,O
Act,O
but,O
shall,O
be,O
subject,O
to,O
all,O
other,O
provisions,O
of,O
the,O
Act,O
(,O
however,O
",",O
see,O
the,O
Notes,O
),O
.,O
,O
2.CHECK,O
THE,O
APPROPRIATE,O
BOX,O
IF,O
A,O
MEMBER,O
OF,O
A,O
GROUP,O
*,O
(,O
a,O
),O
[,O
x,O
],O
(,O
b,O
),O
[,O
],O
,O
4.SOURCE,O
OF,O
FUNDS,O
*,O
,O
12.CHECK,O
BOX,O
IF,O
THE,O
AGGREGATE,O
AMOUNT,O
IN,O
ROW,O
(,O
11,O
),O
,O
EXCLUDES,O
CERTAIN,O
SHARES,O
*,O
[,O
],O
,O
13.PERCENT,O
OF,O
CLASS,O
REPRESENTED,O
BY,O
AMOUNT,O
IN,O
ROW,O
(,O
11,O
),O
,O
2.CHECK,O
THE,O
APPROPRIATE,O
BOX,O
IF,O
A,O
MEMBER,O
OF,O
A,O
GROUP,O
*,O
(,O
a,O
),O
[,O
x,O
],O
(,O
b,O
),O
[,O
],O
,O
4.SOURCE,O
OF,O
FUNDS,O
*,O
,O
REQUIRED,O
PURSUANT,O
TO,O
ITEMS,O
2,O
(,O
d,O
),O
or,O
2,O
(,O
e,O
),O
[,O
],O
,O
12.CHECK,O
BOX,O
IF,O
THE,O
AGGREGATE,O
AMOUNT,O
IN,O
ROW,O
(,O
11,O
),O
,O
EXCLUDES,O
CERTAIN,O
SHARES,O
*,O
[,O
],O
,O
13.PERCENT,O
OF,O
CLASS,O
REPRESENTED,O
BY,O
AMOUNT,O
IN,O
ROW,O
(,O
11,O
),O
,O
2.CHECK,O
THE,O
APPROPRIATE,O
BOX,O
IF,O
A,O
MEMBER,O
OF,O
A,O
GROUP,O
*,O
(,O
a,O
),O
[,O
x,O
],O
(,O
b,O
),O
[,O
],O
,O
4.SOURCE,O
OF,O
FUNDS,O
*,O
,O
REQUIRED,O
PURSUANT,O
TO,O
ITEMS,O
2,O
(,O
d,O
),O
or,O
2,O
(,O
e,O
),O
[,O
],O
,O
12.CHECK,O
BOX,O
IF,O
THE,O
AGGREGATE,O
AMOUNT,O
IN,O
ROW,O
(,O
11,O
),O
,O
EXCLUDES,O
CERTAIN,O
SHARES,O
*,O
[,O
],O
,O
13.PERCENT,O
OF,O
CLASS,O
REPRESENTED,O
BY,O
AMOUNT,O
IN,O
ROW,O
(,O
11,O
),O
,O
2.CHECK,O
THE,O
APPROPRIATE,O
BOX,O
IF,O
A,O
MEMBER,O
OF,O
A,O
GROUP,O
*,O
(,O
a,O
),O
[,O
x,O
],O
(,O
b,O
),O
[,O
],O
,O
4.SOURCE,O
OF,O
FUNDS,O
*,O
,O
5.CHECK,O
BOX,O
IF,O
DISCLOSURE,O
OF,O
LEGAL,O
PROCEEDINGS,O
IS,O
REQUIRED,O
PURSUANT,O
TO,O
ITEMS,O
2,O
(,O
d,O
),O
or,O
2,O
(,O
e,O
),O
[,O
],O
,O
12.CHECK,O
BOX,O
IF,O
THE,O
AGGREGATE,O
AMOUNT,O
IN,O
ROW,O
(,O
11,O
),O
,O
EXCLUDES,O
CERTAIN,O
SHARES,O
*,O
[,O
],O
,O
13.PERCENT,O
OF,O
CLASS,O
REPRESENTED,O
BY,O
AMOUNT,O
IN,O
ROW,O
(,O
11,O
),O
,O
2.CHECK,O
THE,O
APPROPRIATE,O
BOX,O
IF,O
A,O
MEMBER,O
OF,O
A,O
GROUP,O
*,O
(,O
a,O
),O
[,O
x,O
],O
(,O
b,O
),O
[,O
],O
,O
4.SOURCE,O
OF,O
FUNDS,O
*,O
,O
REQUIRED,O
PURSUANT,O
TO,O
ITEMS,O
2,O
(,O
d,O
),O
or,O
2,O
(,O
e,O
),O
[,O
],O
,O
12.CHECK,O
BOX,O
IF,O
THE,O
AGGREGATE,O
AMOUNT,O
IN,O
ROW,O
(,O
11,O
),O
,O
EXCLUDES,O
CERTAIN,O
SHARES,O
*,O
[,O
],O
,O
13.PERCENT,O
OF,O
CLASS,O
REPRESENTED,O
BY,O
AMOUNT,O
IN,O
ROW,O
(,O
11,O
),O
,O
2.CHECK,O
THE,O
APPROPRIATE,O
BOX,O
IF,O
A,O
MEMBER,O
OF,O
A,O
GROUP,O
*,O
(,O
a,O
),O
[,O
x,O
],O
(,O
b,O
),O
[,O
],O
,O
4.SOURCE,O
OF,O
FUNDS,O
*,O
,O
REQUIRED,O
PURSUANT,O
TO,O
ITEMS,O
2,O
(,O
d,O
),O
or,O
2,O
(,O
e,O
),O
[,O
],O
,O
12.CHECK,O
BOX,O
IF,O
THE,O
AGGREGATE,O
AMOUNT,O
IN,O
ROW,O
(,O
11,O
),O
,O
EXCLUDES,O
CERTAIN,O
SHARES,O
*,O
[,O
],O
,O
13.PERCENT,O
OF,O
CLASS,O
REPRESENTED,O
BY,O
AMOUNT,O
IN,O
ROW,O
(,O
11,O
),O
,O
The,O
Reporting,O
Persons,O
(,O
as,O
defined,O
below,O
),O
had,O
previously,O
reported,O
their,O
holdings,O
in,O
the,O
Schedule,I-MISCELLANEOUS
13G,I-MISCELLANEOUS
originally,O
filed,O
on,O
January,O
12,O
",",O
2009,O
",",O
as,O
subsequently,O
amended,O
.,O
,O
ITEM,O
1.Security,O
and,O
Issuer,O
.,O
,O
This,O
statement,O
relates,O
to,O
the,O
shares,O
of,O
common,O
stock,O
",",O
$,O
0.10,O
par,O
value,O
(,O
``,O
Common,O
Stock,O
'',O
),O
of,O
Zygo,O
Corporation,O
(,O
the,O
``,O
Issuer,O
'',O
),O
.,O
,O
The,O
Issuer,O
's,O
principal,O
executive,O
office,O
is,O
located,O
at,O
Laurel,I-LOCATION
Brook,I-LOCATION
Road,I-LOCATION
",",O
Middlefield,I-LOCATION
",",O
Connecticut,I-LOCATION
06455,O
.,O
,O
Identity,O
and,O
Background,O
.,O
,O
(,O
a,O
),O
-,O
(,O
c,O
),O
and,O
(,O
f,O
),O
,O
The,O
names,O
of,O
the,O
persons,O
filing,O
this,O
statement,O
on,O
Schedule,I-MISCELLANEOUS
13D,I-MISCELLANEOUS
are,O
:,O
MAK,I-BUSINESS
Capital,I-BUSINESS
One,I-BUSINESS
LLC,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
limited,O
liability,O
company,O
(,O
“,O
MAK,I-BUSINESS
Capital,I-BUSINESS
”,O
),O
",",O
MAK,I-BUSINESS
Capital,I-BUSINESS
Fund,I-BUSINESS
LP,I-BUSINESS
",",O
a,O
Bermuda,I-LOCATION
limited,O
partnership,O
(,O
“,O
MAK,I-BUSINESS
Fund,I-BUSINESS
”,O
),O
",",O
MAK-ro,I-BUSINESS
Capital,I-BUSINESS
Master,I-BUSINESS
Fund,I-BUSINESS
LP,I-BUSINESS
(,O
“,O
MAK-ro,I-BUSINESS
Fund,I-BUSINESS
”,O
),O
",",O
a,O
Cayman,I-LOCATION
Islands,I-LOCATION
limited,O
partnership,O
",",O
Michael,I-PERSON
A.,I-PERSON
Kaufman,I-PERSON
(,O
“,O
Mr.,O
Kaufman,I-PERSON
”,O
),O
",",O
Paloma,I-BUSINESS
International,I-BUSINESS
L.P.,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
limited,O
partnership,O
(,O
``,O
Paloma,I-BUSINESS
'',O
),O
",",O
and,O
S.,I-PERSON
Donald,I-PERSON
Sussman,I-PERSON
(,O
“,O
Mr.,O
Sussman,I-PERSON
",",O
”,O
and,O
collectively,O
",",O
the,O
``,O
Reporting,O
Persons,O
'',O
),O
.,O
,O
MAK,I-BUSINESS
GP,I-BUSINESS
LLC,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
limited,O
liability,O
company,O
(,O
“,O
MAK,I-BUSINESS
GP,I-BUSINESS
”,O
),O
",",O
is,O
the,O
general,O
partner,O
of,O
MAK,I-BUSINESS
Fund,I-BUSINESS
and,O
MAK-ro,I-BUSINESS
Fund,I-BUSINESS
.,O
,O
Kaufman,I-PERSON
is,O
the,O
controlling,O
person,O
of,O
MAK,I-BUSINESS
GP,I-BUSINESS
.,O
,O
Paloma,I-BUSINESS
Partners,I-BUSINESS
Company,I-BUSINESS
L.L.C.,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
limited,O
liability,O
company,O
(,O
“,O
PPC,I-BUSINESS
”,O
),O
and,O
Trust,I-BUSINESS
Asset,I-BUSINESS
Management,I-BUSINESS
LLP,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
limited,O
liability,O
partnership,O
(,O
“,O
TAM,I-BUSINESS
”,O
),O
are,O
the,O
general,O
partners,O
of,O
Paloma,I-BUSINESS
.,O
,O
Sussman,I-PERSON
is,O
the,O
controlling,O
person,O
of,O
TAM,I-BUSINESS
.,O
,O
MAK,I-BUSINESS
Capital,I-BUSINESS
is,O
the,O
investment,O
manager,O
for,O
MAK,I-BUSINESS
Fund,I-BUSINESS
",",O
MAK-ro,I-BUSINESS
Fund,I-BUSINESS
and,O
Paloma,I-BUSINESS
with,O
respect,O
to,O
the,O
securities,O
reported,O
in,O
this,O
Schedule,I-MISCELLANEOUS
13D,I-MISCELLANEOUS
.,O
,O
Kaufman,I-PERSON
is,O
the,O
controlling,O
person,O
of,O
MAK,I-BUSINESS
Capital,I-BUSINESS
.,O
,O
The,O
principal,O
business,O
address,O
for,O
MAK,I-BUSINESS
Fund,I-BUSINESS
and,O
MAK-ro,I-BUSINESS
Fund,I-BUSINESS
is,O
c/o,O
Dundee,I-BUSINESS
Leeds,I-BUSINESS
Management,I-BUSINESS
Services,I-BUSINESS
Ltd.,I-BUSINESS
",",O
129,O
Front,I-LOCATION
Street,I-LOCATION
",",O
Hamilton,I-LOCATION
",",O
HM,O
12,O
",",O
Bermuda,I-LOCATION
.,O
,O
The,O
principal,O
business,O
address,O
for,O
each,O
of,O
MAK,I-BUSINESS
Capital,I-BUSINESS
",",O
MAK,I-BUSINESS
GP,I-BUSINESS
and,O
Mr.,O
Kaufman,I-PERSON
is,O
590,O
Madison,I-LOCATION
Avenue,I-LOCATION
",",O
9th,O
Floor,O
",",O
New,I-LOCATION
York,I-LOCATION
",",O
New,I-LOCATION
York,I-LOCATION
10022,O
.,O
,O
The,O
principal,O
business,O
address,O
for,O
each,O
of,O
Paloma,I-BUSINESS
and,O
PPC,I-BUSINESS
is,O
Two,O
American,I-LOCATION
Lane,I-LOCATION
",",O
Greenwich,I-LOCATION
",",O
Connecticut,I-LOCATION
06836-2571,O
.,O
,O
The,O
principal,O
business,O
address,O
for,O
each,O
of,O
Mr.,O
Sussman,I-PERSON
and,O
TAM,I-BUSINESS
is,O
6100,O
Red,I-LOCATION
Hook,I-LOCATION
Quarters,I-LOCATION
",",O
Suites,O
C1-C6,O
",",O
St.,I-LOCATION
Thomas,I-LOCATION
",",O
US,I-LOCATION
Virgin,I-LOCATION
Islands,I-LOCATION
00802-1348,O
.,O
,O
The,O
principal,O
business,O
of,O
each,O
of,O
MAK,I-BUSINESS
Fund,I-BUSINESS
and,O
Paloma,I-BUSINESS
is,O
a,O
private,O
investment,O
fund,O
.,O
,O
The,O
principal,O
business,O
of,O
each,O
of,O
Mr.,O
Kaufman,I-PERSON
and,O
Mr.,O
Sussman,I-PERSON
is,O
providing,O
investment,O
management,O
services,O
.,O
,O
The,O
principal,O
business,O
of,O
each,O
of,O
MAK,I-BUSINESS
Capital,I-BUSINESS
",",O
MAK,I-BUSINESS
GP,I-BUSINESS
and,O
TAM,I-BUSINESS
is,O
providing,O
investment,O
management,O
services,O
.,O
,O
The,O
principal,O
business,O
of,O
PPC,I-BUSINESS
is,O
providing,O
administrative,O
services,O
.,O
,O
(,O
d,O
),O
During,O
the,O
last,O
five,O
years,O
",",O
none,O
of,O
the,O
persons,O
or,O
entities,O
listed,O
above,O
in,O
this,O
Item,O
2,O
has,O
been,O
convicted,O
in,O
a,O
criminal,O
proceeding,O
(,O
excluding,O
traffic,O
violations,O
or,O
similar,O
misdemeanors,O
),O
.,O
,O
(,O
e,O
),O
During,O
the,O
last,O
five,O
years,O
",",O
none,O
of,O
the,O
persons,O
or,O
entities,O
listed,O
above,O
in,O
this,O
Item,O
2,O
has,O
been,O
a,O
party,O
to,O
a,O
civil,O
proceeding,O
of,O
a,O
judicial,O
or,O
administrative,O
body,O
of,O
competent,O
jurisdiction,O
and,O
as,O
a,O
result,O
of,O
such,O
proceeding,O
was,O
or,O
is,O
subject,O
to,O
a,O
judgment,O
",",O
decree,O
or,O
final,O
order,O
enjoining,O
future,O
violations,O
of,O
",",O
or,O
prohibiting,O
or,O
mandating,O
activities,O
subject,O
to,O
",",O
federal,O
or,O
state,O
securities,O
laws,O
or,O
finding,O
any,O
violation,O
with,O
respect,O
to,O
such,O
laws,O
.,O
,O
ITEM,O
3.Source,O
and,O
Amount,O
of,O
Funds,O
or,O
Other,O
Consideration,O
.,O
,O
The,O
Reporting,O
Persons,O
acquired,O
the,O
shares,O
of,O
Common,O
Stock,O
reported,O
herein,O
at,O
an,O
aggregate,O
cost,O
of,O
$,O
"26,479,725",O
.,O
,O
The,O
funds,O
used,O
to,O
purchase,O
the,O
shares,O
of,O
Common,O
Stock,O
were,O
obtained,O
from,O
the,O
general,O
working,O
capital,O
of,O
MAK,I-BUSINESS
Fund,I-BUSINESS
",",O
MAK-ro,I-BUSINESS
Fund,I-BUSINESS
and,O
Paloma,I-BUSINESS
",",O
as,O
applicable,O
",",O
which,O
may,O
at,O
any,O
given,O
time,O
include,O
funds,O
borrowed,O
in,O
the,O
ordinary,O
course,O
in,O
their,O
margin,O
accounts,O
.,O
,O
ITEM,O
4.Purpose,O
of,O
Transaction,O
.,O
,O
All,O
of,O
the,O
shares,O
of,O
Common,O
Stock,O
reported,O
as,O
being,O
beneficially,O
owned,O
by,O
the,O
Reporting,O
Persons,O
in,O
this,O
Schedule,I-MISCELLANEOUS
13D,I-MISCELLANEOUS
were,O
acquired,O
for,O
investment,O
purposes,O
.,O
,O
This,O
Schedule,I-MISCELLANEOUS
13D,I-MISCELLANEOUS
is,O
being,O
filed,O
because,O
of,O
Rule,O
13d-1,O
(,O
f,O
),O
promulgated,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
which,O
requires,O
persons,O
reporting,O
on,O
Schedule,I-MISCELLANEOUS
13G,I-MISCELLANEOUS
to,O
file,O
a,O
Schedule,I-MISCELLANEOUS
13D,I-MISCELLANEOUS
when,O
beneficial,O
ownership,O
equals,O
or,O
exceeds,O
20,O
percent,O
of,O
the,O
class,O
of,O
equity,O
securities,O
.,O
,O
MAK,I-BUSINESS
Capital,I-BUSINESS
and,O
the,O
funds,O
it,O
manages,O
seek,O
to,O
acquire,O
meaningful,O
ownership,O
positions,O
in,O
companies,O
they,O
believe,O
have,O
strong,O
long-term,O
prospects,O
relative,O
to,O
the,O
stock,O
market,O
valuation,O
of,O
their,O
equity,O
and,O
support,O
boards,O
and,O
managements,O
which,O
work,O
diligently,O
and,O
effectively,O
toward,O
enhancing,O
performance,O
and,O
stockholder,O
value,O
.,O
,O
Consistent,O
with,O
this,O
approach,O
",",O
the,O
Reporting,O
Persons,O
currently,O
intend,O
to,O
acquire,O
additional,O
shares,O
of,O
Common,O
Stock,O
if,O
market,O
conditions,O
permit,O
purchases,O
at,O
prices,O
which,O
the,O
Reporting,O
Persons,O
consider,O
attractive,O
.,O
,O
The,O
Reporting,O
Persons,O
have,O
no,O
intention,O
of,O
seeking,O
control,O
of,O
the,O
Issuer,O
.,O
,O
However,O
",",O
the,O
Reporting,O
Persons,O
may,O
",",O
from,O
time,O
to,O
time,O
",",O
communicate,O
with,O
members,O
of,O
the,O
Issuer,O
’,O
s,O
board,O
of,O
directors,O
or,O
management,O
",",O
other,O
holders,O
of,O
shares,O
of,O
Common,O
Stock,O
and,O
other,O
persons,O
regarding,O
the,O
Issuer,O
’,O
s,O
efforts,O
to,O
enhance,O
operating,O
and,O
financial,O
performance,O
and,O
market,O
value,O
and,O
strategic,O
alternatives,O
available,O
to,O
the,O
Issuer,O
.,O
,O
The,O
Reporting,O
Persons,O
frequently,O
monitor,O
their,O
investments,O
and,O
",",O
therefore,O
",",O
reserve,O
the,O
right,O
to,O
dispose,O
of,O
shares,O
of,O
Common,O
Stock,O
depending,O
upon,O
market,O
conditions,O
.,O
,O
Except,O
as,O
set,O
forth,O
herein,O
",",O
none,O
of,O
the,O
Reporting,O
Persons,O
",",O
nor,O
to,O
their,O
knowledge,O
",",O
any,O
of,O
the,O
other,O
persons,O
identified,O
in,O
the,O
response,O
to,O
Item,O
2,O
",",O
has,O
any,O
plans,O
or,O
proposals,O
related,O
to,O
or,O
which,O
would,O
result,O
in,O
any,O
of,O
the,O
matters,O
described,O
in,O
subparagraphs,O
(,O
a,O
),O
through,O
(,O
j,O
),O
of,O
item,O
4,O
of,O
Schedule,I-MISCELLANEOUS
13D,I-MISCELLANEOUS
.,O
,O
ITEM,O
5.Interest,O
in,O
Securities,O
of,O
the,O
Issuer,O
.,O
,O
(,O
a,O
),O
The,O
Reporting,O
Persons,O
beneficially,O
own,O
:,O
,O
The,O
Reporting,O
Persons,O
collectively,O
beneficially,O
own,O
"3,556,460",O
shares,O
of,O
Common,O
Stock,O
representing,O
20.4,O
%,O
percent,O
of,O
the,O
outstanding,O
shares,O
of,O
Common,O
Stock,O
.,O
,O
The,O
20.4,O
%,O
ownership,O
calculation,O
was,O
based,O
on,O
the,O
"17,410,525",O
shares,O
of,O
Common,O
Stock,O
outstanding,O
as,O
of,O
February,O
1,O
",",O
2010,O
as,O
reported,O
in,O
the,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
filed,O
by,O
the,O
Issuer,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
on,O
February,O
9,O
",",O
2010,O
.,O
,O
MAK,I-BUSINESS
Fund,I-BUSINESS
individually,O
owns,O
"2,698,844",O
shares,O
of,O
Common,O
Stock,O
representing,O
15.5,O
%,O
of,O
the,O
outstanding,O
shares,O
of,O
Common,O
Stock,O
.,O
,O
MAK-ro,I-BUSINESS
Fund,I-BUSINESS
individually,O
owns,O
"140,546",O
shares,O
of,O
Common,O
Stock,O
representing,O
0.8,O
%,O
of,O
the,O
outstanding,O
shares,O
of,O
Common,O
Stock,O
.,O
,O
Paloma,I-BUSINESS
individually,O
owns,O
"717,070",O
shares,O
of,O
Common,O
Stock,O
representing,O
4.1,O
%,O
of,O
the,O
outstanding,O
shares,O
of,O
Common,O
Stock,O
.,O
,O
Paloma,I-BUSINESS
holds,O
its,O
shares,O
of,O
Common,O
Stock,O
through,O
its,O
subsidiary,O
",",O
Sunrise,I-BUSINESS
Partners,I-BUSINESS
Limited,I-BUSINESS
Partnership,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
limited,O
partnership,O
.,O
,O
(,O
b,O
),O
MAK,I-BUSINESS
Fund,I-BUSINESS
",",O
MAK,I-BUSINESS
Capital,I-BUSINESS
and,O
Mr.,O
Kaufman,I-PERSON
have,O
shared,O
power,O
to,O
vote,O
or,O
direct,O
the,O
vote,O
of,O
the,O
"2,698,844",O
shares,O
of,O
Common,O
Stock,O
owned,O
by,O
MAK,I-BUSINESS
Fund,I-BUSINESS
.,O
,O
MAK-ro,I-BUSINESS
Capital,I-BUSINESS
",",O
MAK,I-BUSINESS
Fund,I-BUSINESS
and,O
Mr.,O
Kaufman,I-PERSON
have,O
shared,O
power,O
to,O
vote,O
or,O
direct,O
the,O
vote,O
of,O
the,O
"140,546",O
shares,O
of,O
Common,O
Stock,O
owned,O
by,O
MAK-ro,I-BUSINESS
Fund,I-BUSINESS
.,O
,O
Sussman,I-PERSON
",",O
MAK,I-BUSINESS
Capital,I-BUSINESS
and,O
Mr.,O
Kaufman,I-PERSON
have,O
shared,O
power,O
to,O
vote,O
or,O
direct,O
the,O
vote,O
of,O
the,O
"717,070",O
shares,O
of,O
Common,O
Stock,O
owned,O
by,O
Paloma,I-PERSON
.,O
,O
MAK,I-BUSINESS
Fund,I-BUSINESS
",",O
MAK,I-BUSINESS
Capital,I-BUSINESS
and,O
Mr.,O
Kaufman,I-PERSON
have,O
shared,O
power,O
to,O
dispose,O
or,O
direct,O
the,O
disposition,O
of,O
the,O
"2,698,844",O
shares,O
of,O
Common,O
Stock,O
owned,O
by,O
MAK,I-BUSINESS
Fund,I-BUSINESS
.,O
,O
MAK-ro,I-BUSINESS
Fund,I-BUSINESS
",",O
MAK,I-BUSINESS
Capital,I-BUSINESS
and,O
Mr.,O
Kaufman,I-PERSON
have,O
shared,O
power,O
to,O
dispose,O
or,O
direct,O
the,O
disposition,O
of,O
the,O
"140,546",O
shares,O
of,O
Common,O
Stock,O
owned,O
by,O
MAK-ro,I-BUSINESS
Fund,I-BUSINESS
.,O
,O
Sussman,I-PERSON
",",O
MAK,I-BUSINESS
Capital,I-BUSINESS
and,O
Mr.,O
Kaufman,I-PERSON
have,O
shared,O
power,O
to,O
dispose,O
or,O
direct,O
the,O
disposition,O
of,O
the,O
"717,070",O
shares,O
of,O
Common,O
Stock,O
owned,O
by,O
Paloma,I-BUSINESS
.,O
,O
(,O
c,O
),O
A,O
list,O
of,O
the,O
transactions,O
in,O
the,O
Issuer,O
’,O
s,O
Common,O
Stock,O
that,O
were,O
effected,O
by,O
the,O
Reporting,O
Persons,O
during,O
the,O
past,O
sixty,O
days,O
is,O
attached,O
hereto,O
as,O
Exhibit,O
B,O
.,O
,O
After,O
reasonable,O
inquiry,O
and,O
to,O
the,O
best,O
of,O
its,O
knowledge,O
and,O
belief,O
",",O
the,O
undersigned,O
each,O
certifies,O
that,O
the,O
information,O
with,O
respect,O
to,O
it,O
set,O
forth,O
in,O
this,O
statement,O
is,O
true,O
",",O
complete,O
and,O
correct,O
.,O
,O
By,O
:,O
/s/,O
Michael,I-PERSON
A.,I-PERSON
,O
By,O
:,O
/s/,O
Michael,I-PERSON
A.,I-PERSON
,O
By,O
:,O
/s/,O
Michael,I-PERSON
A.,I-PERSON
,O
PALOMA,I-BUSINESS
INTERNATIONAL,I-BUSINESS
L.P.,I-BUSINESS
,O
By,O
:,O
/s/,O
Michael,I-PERSON
J.,I-PERSON
,O
By,O
:,O
/s/,O
Michael,I-PERSON
J.,I-PERSON
,O
The,O
undersigned,O
hereby,O
agree,O
that,O
the,O
statement,O
on,O
Schedule,I-MISCELLANEOUS
13D,I-MISCELLANEOUS
with,O
respect,O
to,O
the,O
Common,O
Stock,O
of,O
Zygo,I-BUSINESS
Corporation,I-BUSINESS
dated,O
as,O
of,O
March,O
8,O
",",O
2010,O
is,O
",",O
and,O
any,O
further,O
amendments,O
thereto,O
signed,O
by,O
each,O
of,O
the,O
undersigned,O
shall,O
be,O
",",O
filed,O
on,O
behalf,O
of,O
each,O
of,O
the,O
undersigned,O
pursuant,O
to,O
and,O
in,O
accordance,O
with,O
the,O
provisions,O
of,O
Rule,O
13d-1,O
(,O
k,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
.,O
,O
By,O
:,O
/s/,O
Michael,I-PERSON
A,I-PERSON
.,I-PERSON
,O
By,O
:,O
/s/,O
Michael,I-PERSON
A.,I-PERSON
,O
By,O
:,O
/s/,O
Michael,I-PERSON
A.,I-PERSON
,O
PALOMA,I-BUSINESS
INTERNATIONAL,I-BUSINESS
L.P.,I-BUSINESS
,O
By,O
:,O
/s/,O
Michael,I-PERSON
J.,I-PERSON
,O
By,O
:,O
/s/,O
Michael,I-PERSON
J.,I-PERSON
,O
The,O
following,O
transactions,O
were,O
effected,O
by,O
MAK,I-BUSINESS
Capital,I-BUSINESS
Fund,I-BUSINESS
LP,I-BUSINESS
during,O
the,O
past,O
sixty,O
(,O
60,O
),O
days,O
:,O
,O
The,O
following,O
transactions,O
were,O
effected,O
by,O
MAK-ro,I-BUSINESS
Capital,I-BUSINESS
Master,I-BUSINESS
Fund,I-BUSINESS
LP,I-BUSINESS
during,O
the,O
past,O
sixty,O
(,O
60,O
),O
days,O
:,O
,O
The,O
following,O
transactions,O
were,O
effected,O
by,O
Paloma,I-BUSINESS
International,I-BUSINESS
L.P.,I-BUSINESS
during,O
the,O
past,O
sixty,O
(,O
60,O
),O
days,O
:,O
,O
The,O
above,O
transactions,O
were,O
effected,O
on,O
the,O
open,O
market,O
.,O
,O
The,O
undersigned,O
hereby,O
makes,O
",",O
constitutes,O
and,O
appoints,O
each,O
of,O
Michael,I-PERSON
J.,I-PERSON
Berner,I-PERSON
and,O
Douglas,I-PERSON
W.,I-PERSON
Ambrose,I-PERSON
as,O
the,O
undersigned,O
’,O
s,O
true,O
and,O
lawful,O
authorized,O
representative,O
",",O
attorney-in-fact,O
and,O
agent,O
",",O
each,O
with,O
the,O
power,O
individually,O
to,O
execute,O
for,O
and,O
on,O
behalf,O
of,O
the,O
undersigned,O
and,O
to,O
file,O
with,O
and,O
deliver,O
to,O
the,O
United,I-GOVERNMENT
States,I-GOVERNMENT
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
and,O
any,O
other,O
authority,O
or,O
party,O
required,O
or,O
entitled,O
to,O
receive,O
the,O
same,O
:,O
(,O
a,O
),O
any,O
Forms,I-MISCELLANEOUS
3,I-MISCELLANEOUS
",",I-MISCELLANEOUS
4,I-MISCELLANEOUS
and,I-MISCELLANEOUS
5,I-MISCELLANEOUS
",",O
and,O
any,O
amendments,O
thereto,O
",",O
in,O
accordance,O
with,O
Section,O
16,O
(,O
a,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
“,O
1934,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
”,O
),O
",",O
and,O
the,O
rules,O
promulgated,O
thereunder,O
;,O
and,O
(,O
b,O
),O
any,O
Schedule,I-MISCELLANEOUS
13D,I-MISCELLANEOUS
or,O
Schedule,I-MISCELLANEOUS
13G,I-MISCELLANEOUS
",",O
and,O
any,O
amendments,O
thereto,O
",",O
on,O
behalf,O
of,O
the,O
undersigned,O
in,O
accordance,O
with,O
Section,O
13,O
of,O
the,O
1934,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
the,O
rules,O
promulgated,O
thereunder,O
.,O
,O
The,O
undersigned,O
also,O
hereby,O
grants,O
to,O
each,O
such,O
attorney-in-fact,O
the,O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
all,O
and,O
every,O
act,O
and,O
thing,O
whatsoever,O
requisite,O
",",O
necessary,O
and,O
proper,O
to,O
be,O
done,O
in,O
the,O
exercise,O
of,O
any,O
of,O
the,O
rights,O
and,O
powers,O
herein,O
granted,O
",",O
hereby,O
ratifying,O
and,O
confirming,O
all,O
that,O
such,O
attorney-in-fact,O
shall,O
lawfully,O
do,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
of,O
this,O
power,O
of,O
attorney,O
and,O
the,O
rights,O
and,O
powers,O
herein,O
granted,O
.,O
,O
The,O
undersigned,O
acknowledges,O
that,O
each,O
of,O
the,O
foregoing,O
attorneys-in-fact,O
",",O
in,O
serving,O
in,O
such,O
capacity,O
at,O
the,O
request,O
of,O
the,O
undersigned,O
",",O
is,O
not,O
assuming,O
any,O
of,O
the,O
undersigned,O
’,O
s,O
responsibilities,O
to,O
comply,O
with,O
Section,O
16,O
or,O
Section,O
13,O
or,O
any,O
other,O
provision,O
of,O
the,O
1934,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
or,O
the,O
rules,O
promulgated,O
thereunder,O
.,O
,O
This,O
Power,O
of,O
Attorney,O
shall,O
remain,O
in,O
full,O
force,O
and,O
effect,O
until,O
earlier,O
revoked,O
by,O
the,O
undersigned,O
in,O
a,O
signed,O
writing,O
delivered,O
to,O
the,O
foregoing,O
attorneys-in-fact,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
the,O
undersigned,O
has,O
caused,O
this,O
Power,O
of,O
Attorney,O
to,O
be,O
executed,O
as,O
of,O
May,O
9,O
",",O
2006,O
.,O
,O
STATE,I-LOCATION
OF,I-LOCATION
CONNECTICUT,I-LOCATION
",",O
COUNTY,I-LOCATION
OF,I-LOCATION
FAIRFIELD,I-LOCATION
ss,O
.,O
,O
:,O
On,O
May,O
9,O
",",O
2006,O
",",O
before,O
me,O
",",O
the,O
undersigned,O
personally,O
appeared,O
",",O
S.,I-PERSON
Donald,I-PERSON
Sussman,I-PERSON
",",O
personally,O
known,O
to,O
me,O
or,O
proved,O
to,O
me,O
on,O
the,O
basis,O
of,O
satisfactory,O
evidence,O
to,O
be,O
the,O
individual,O
whose,O
name,O
is,O
subscribed,O
to,O
the,O
within,O
instrument,O
and,O
acknowledged,O
to,O
me,O
that,O
he,O
executed,O
the,O
same,O
in,O
his,O
capacity,O
",",O
and,O
that,O
by,O
his,O
signature,O
on,O
the,O
instrument,O
",",O
the,O
individual,O
",",O
or,O
the,O
person,O
upon,O
behalf,O
of,O
which,O
the,O
individual,O
acted,O
",",O
executed,O
the,O
instrument,O
.,O
,O
(,O
signature,O
and,O
office,O
of,O
individual,O
taking,O
acknowledgement,O
),O
,O
-DOCSTART-,O
,O
Dominic,I-PERSON
Minore,I-PERSON
Securities,B-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
Investment,I-GOVERNMENT
Company,I-GOVERNMENT
Division,I-GOVERNMENT
100,O
F.,I-LOCATION
Street,I-LOCATION
",",O
N.E.,I-LOCATION
,O
This,O
letter,O
responds,O
to,O
the,O
comments,O
on,O
Post-Effective,O
Amendment,O
No.,O
39,O
to,O
the,O
Registrant,O
s,O
registration,O
statement,O
on,O
Form,I-MISCELLANEOUS
N-1A,I-MISCELLANEOUS
on,O
behalf,O
of,O
the,O
Ariel,I-BUSINESS
Fund,I-BUSINESS
",",O
Ariel,I-BUSINESS
Appreciation,I-BUSINESS
Fund,I-BUSINESS
and,O
Ariel,I-BUSINESS
Focus,I-BUSINESS
fund,I-BUSINESS
that,O
were,O
provided,O
to,O
me,O
by,O
telephone,O
by,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
the,O
Commission,O
),O
on,O
January,O
14,O
",",O
2010,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Fund,I-MISCELLANEOUS
Summaries-Fees,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Expenses,I-MISCELLANEOUS
of,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Fund,I-MISCELLANEOUS
in,O
the,O
Prospectus,O
in,O
the,O
lead,O
in,O
paragraph,O
",",O
please,O
delete,O
the,O
sentence,O
You,O
do,O
not,O
pay,O
a,O
sales,O
charge,O
or,O
load,O
when,O
you,O
buy,O
or,O
sell,O
shares,O
.,O
,O
Response,O
:,O
In,O
the,O
past,O
",",O
the,O
Registrant,O
has,O
received,O
many,O
calls,O
from,O
shareholders,O
inquiring,O
whether,O
a,O
Fund,O
is,O
a,O
load,O
or,O
no,O
load,O
fund,O
.,O
,O
In,O
response,O
",",O
the,O
Registrant,O
added,O
the,O
disclosure,O
You,O
do,O
not,O
pay,O
a,O
sales,O
charge,O
or,O
load,O
when,O
you,O
buy,O
or,O
sell,O
shares,O
to,O
its,O
Prospectus,O
.,O
,O
Therefore,O
in,O
order,O
to,O
avoid,O
any,O
confusion,O
on,O
the,O
part,O
of,O
shareholders,O
or,O
potential,O
investors,O
",",O
the,O
Registrant,O
believes,O
the,O
disclosure,O
should,O
remain,O
in,O
the,O
Prospectus,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Fund,I-MISCELLANEOUS
Summaries-Fees,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Expenses,I-MISCELLANEOUS
of,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Fund,I-MISCELLANEOUS
in,O
the,O
Prospectus,O
",",O
please,O
delete,O
the,O
sentences,O
The,O
expenses,O
are,O
based,O
on,O
actual,O
expenses,O
incurred,O
for,O
the,O
fiscal,O
year,O
ended,O
September,O
30,O
",",O
2009,O
.,O
,O
Expenses,O
may,O
vary,O
in,O
future,O
years,O
.,O
,O
Response,O
:,O
The,O
changes,O
will,O
be,O
made,O
as,O
requested,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Fund,I-MISCELLANEOUS
Summaries-Fees,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Expenses,I-MISCELLANEOUS
of,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Fund,I-MISCELLANEOUS
in,O
the,O
Prospectus,O
in,O
the,O
lead,O
in,O
paragraph,O
for,O
the,O
Example,O
",",O
please,O
(,O
i,O
),O
delete,O
the,O
phrase,O
based,O
on,O
the,O
current,O
level,O
of,O
expenses,O
at,O
the,O
end,O
of,O
the,O
first,O
sentence,O
",",O
(,O
ii,O
),O
delete,O
the,O
phrase,O
dividends,O
and,O
distributions,O
are,O
reinvested,O
from,O
the,O
second,O
sentence,O
and,O
replace,O
with,O
the,O
Fund,O
s,O
operating,O
expenses,O
remain,O
the,O
same,O
",",O
and,O
(,O
iii,O
),O
move,O
the,O
sentences,O
below,O
the,O
example,O
table,O
to,O
the,O
lead,O
in,O
paragraph,O
above,O
the,O
Example,O
.,O
,O
Response,O
:,O
The,O
changes,O
will,O
be,O
made,O
as,O
requested,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
Please,O
provide,O
the,O
heading,O
Portfolio,O
Turnover,O
before,O
the,O
paragraph,O
that,O
describes,O
the,O
Fund,O
s,O
portfolio,O
turnover,O
.,O
,O
Response,O
:,O
The,O
change,O
will,O
be,O
made,O
as,O
requested,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Fund,O
Summaries,O
Principal,O
Investment,O
Strategy,O
in,O
the,O
Prospectus,O
",",O
the,O
first,O
sentence,O
of,O
the,O
first,O
paragraph,O
states,O
that,O
the,O
Ariel,I-BUSINESS
Fund,I-BUSINESS
invests,O
primarily,O
in,O
stocks,O
of,O
companies,O
with,O
market,O
capitalizations,O
between,O
$,O
1,O
billion,O
and,O
$,O
5,O
billion,O
",",O
measured,O
at,O
the,O
time,O
of,O
purchase,O
.,O
,O
Please,O
provide,O
a,O
definition,O
of,O
stocks,O
.,O
,O
For,O
example,O
",",O
stocks,O
are,O
common,O
stocks,O
",",O
preferred,O
stocks,O
and,O
securities,O
convertible,O
into,O
common,O
stock,O
.,O
,O
Response,O
:,O
The,O
sentence,O
will,O
be,O
revised,O
to,O
read,O
as,O
follows,O
:,O
Ariel,I-BUSINESS
Fund,I-BUSINESS
invests,O
primarily,O
in,O
common,O
stocks,O
of,O
companies,O
with,O
market,O
capitalizations,O
between,O
$,O
1,O
billion,O
and,O
$,O
5,O
billion,O
",",O
measured,O
at,O
the,O
time,O
of,O
purchase,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
Please,O
remove,O
the,O
legend,O
Fund,O
Summaries-Prospectus,O
at,O
the,O
bottom,O
of,O
the,O
page,O
.,O
,O
Response,O
:,O
The,O
change,O
will,O
be,O
made,O
as,O
requested,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Fund,O
Summaries,O
Principal,O
Investment,O
Strategy,O
in,O
the,O
Prospectus,O
",",O
the,O
last,O
sentence,O
of,O
the,O
fourth,O
paragraph,O
states,O
that,O
:,O
We,O
will,O
sell,O
a,O
stock,O
if,O
its,O
valuation,O
reaches,O
our,O
private,O
market,O
value,O
as,O
determined,O
by,O
the,O
Adviser,O
or,O
if,O
there,O
are,O
material,O
changes,O
to,O
a,O
company,O
s,O
thesis,O
or,O
fundamentals,O
.,O
,O
Please,O
explain,O
thesis,O
in,O
Plain,O
English,O
.,O
,O
Response,O
:,O
The,O
Registrant,O
will,O
revise,O
its,O
disclosure,O
.,O
,O
The,O
sentence,O
will,O
now,O
read,O
as,O
follows,O
:,O
We,O
will,O
sell,O
a,O
stock,O
if,O
its,O
valuation,O
reaches,O
our,O
private,O
market,O
value,O
as,O
determined,O
by,O
the,O
Adviser,O
or,O
if,O
there,O
are,O
material,O
changes,O
to,O
a,O
company,O
s,O
fundamentals,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Fund,I-MISCELLANEOUS
Summaries-Principal,I-MISCELLANEOUS
Risks,I-MISCELLANEOUS
in,O
the,O
Prospectus,O
",",O
the,O
last,O
bullet,O
point,O
states,O
that,O
:,O
The,O
Fund,O
may,O
invest,O
a,O
significant,O
portion,O
of,O
its,O
assets,O
in,O
companies,O
within,O
the,O
financial,O
services,O
and,O
consumer,O
discretionary,O
sectors,O
.,O
,O
bullet,O
point,O
does,O
not,O
convey,O
a,O
risk,O
.,O
,O
Please,O
revise,O
to,O
make,O
it,O
a,O
risk,O
and,O
revise,O
the,O
Fund,O
s,O
principal,O
strategy,O
as,O
necessary,O
.,O
,O
Response,O
:,O
The,O
Fund,O
at,O
times,O
has,O
been,O
overweight,O
in,O
certain,O
sectors,O
(,O
financial,O
services,O
and,O
consumer,O
discretionary,O
sectors,O
),O
due,O
to,O
investments,O
made,O
by,O
the,O
Fund,O
.,O
,O
However,O
such,O
investments,O
are,O
not,O
considered,O
by,O
the,O
Fund,O
to,O
be,O
principal,O
strategies,O
.,O
,O
The,O
Registrant,O
believes,O
that,O
the,O
principal,O
investment,O
strategies,O
as,O
described,O
in,O
the,O
Prospectus,O
accurately,O
reflect,O
the,O
strategies,O
for,O
the,O
Fund,O
.,O
,O
However,O
",",O
since,O
the,O
Fund,O
is,O
overweight,O
in,O
particular,O
sectors,O
the,O
Registrant,O
believes,O
that,O
it,O
is,O
a,O
risk,O
to,O
the,O
Fund,O
.,O
,O
Therefore,O
",",O
the,O
Fund,O
has,O
added,O
a,O
principal,O
risk,O
to,O
reflect,O
this,O
matter,O
.,O
,O
The,O
principal,O
risk,O
will,O
be,O
revised,O
to,O
read,O
as,O
follows,O
:,O
The,O
Fund,O
often,O
invests,O
a,O
significant,O
portion,O
of,O
its,O
assets,O
in,O
companies,O
within,O
the,O
financial,O
services,O
and,O
consumer,O
discretionary,O
sectors,O
",",O
and,O
its,O
performance,O
may,O
suffer,O
if,O
these,O
sectors,O
underperform,O
the,O
overall,O
stock,O
market,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Fund,I-MISCELLANEOUS
Summaries-Principal,I-MISCELLANEOUS
Risks,I-MISCELLANEOUS
in,O
the,O
Prospectus,O
",",O
please,O
confirm,O
to,O
the,O
Commission,O
that,O
all,O
the,O
principal,O
risks,O
of,O
the,O
Fund,O
are,O
set,O
forth,O
in,O
the,O
Principal,O
Risks,O
section,O
.,O
,O
Response,O
:,O
The,O
Registrant,O
believes,O
that,O
all,O
principal,O
risks,O
have,O
been,O
currently,O
described,O
in,O
the,O
Prospectus,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Fund,O
Summaries-Performance,O
in,O
the,O
Prospectus,O
",",O
please,O
(,O
i,O
),O
remove,O
the,O
parenthetical,O
(,O
before,O
taxes,O
),O
in,O
the,O
heading,O
",",O
(,O
ii,O
),O
delete,O
the,O
second,O
sentence,O
The,O
Fund,O
s,O
past,O
performance,O
is,O
not,O
indicative,O
of,O
future,O
performance,O
.,O
,O
below,O
the,O
bar,O
charts,O
",",O
(,O
iii,O
),O
move,O
the,O
text,O
from,O
footnote,O
(,O
b,O
),O
of,O
the,O
average,O
annual,O
total,O
return,O
table,O
into,O
the,O
table,O
and,O
delete,O
the,O
footnote,O
and,O
(,O
iv,O
),O
move,O
the,O
last,O
sentence,O
in,O
the,O
section,O
to,O
the,O
lead,O
in,O
paragraph,O
.,O
,O
Response,O
:,O
The,O
changes,O
will,O
be,O
made,O
as,O
requested,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Fund,I-MISCELLANEOUS
Summaries-Portfolio,I-MISCELLANEOUS
Managers,I-MISCELLANEOUS
in,O
the,O
Prospectus,O
",",O
please,O
confirm,O
that,O
each,O
portfolio,O
manager,O
has,O
managed,O
the,O
Fund,O
since,O
the,O
time,O
period,O
indicated,O
.,O
,O
Response,O
:,O
The,O
Registrant,O
confirms,O
that,O
each,O
Portfolio,O
Manager,O
has,O
managed,O
the,O
respective,O
Fund,O
for,O
the,O
time,O
periods,O
set,O
forth,O
in,O
the,O
Prospectus,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Fund,I-BUSINESS
Summaries,I-BUSINESS
in,O
the,O
Prospectus,O
",",O
please,O
revise,O
the,O
first,O
sentence,O
of,O
the,O
last,O
paragraph,O
to,O
change,O
financial,O
intermediary,O
compensation,O
to,O
payments,O
to,O
broker-dealers,O
and,O
other,O
financial,O
intermediaries,O
.,O
,O
In,O
addition,O
",",O
please,O
delete,O
the,O
last,O
sentence,O
of,O
that,O
paragraph,O
.,O
,O
Response,O
:,O
The,O
changes,O
will,O
be,O
made,O
as,O
requested,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Fund,I-MISCELLANEOUS
Summaries-Fees,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Expenses,I-MISCELLANEOUS
with,O
respect,O
to,O
the,O
Ariel,I-BUSINESS
Focus,I-BUSINESS
Fund,I-BUSINESS
in,O
the,O
Prospectus,O
",",O
please,O
(,O
i,O
),O
change,O
Net,O
Expenses,O
to,O
Total,O
Annual,O
Fund,O
Operating,O
Expenses,O
After,O
Fee,O
Waiver,O
and/or,O
Expense,O
Reimbursement,O
",",O
(,O
ii,O
),O
confirm,O
that,O
the,O
Adviser,O
does,O
not,O
recoup,O
amounts,O
waived,O
or,O
reimbursed,O
",",O
and,O
(,O
iii,O
),O
in,O
the,O
footnote,O
to,O
the,O
fee,O
table,O
please,O
state,O
who,O
may,O
terminate,O
the,O
agreement,O
and,O
under,O
what,O
circumstances,O
.,O
,O
Lastly,O
",",O
please,O
file,O
the,O
current,O
expense,O
limitation,O
agreement,O
as,O
an,O
exhibit,O
to,O
the,O
Registration,O
Statement,O
.,O
,O
Response,O
:,O
The,O
change,O
from,O
Net,O
Expenses,O
to,O
Total,O
Annual,O
Fund,O
Operating,O
Expenses,O
After,O
Fee,O
Waiver,O
and/or,O
Expense,O
Reimbursement,O
will,O
be,O
made,O
as,O
requested,O
.,O
,O
The,O
Adviser,O
does,O
not,O
recoup,O
amounts,O
waived,O
or,O
reimbursed,O
from,O
a,O
previous,O
fiscal,O
year,O
under,O
the,O
expense,O
limitation,O
agreement,O
.,O
,O
The,O
following,O
disclosure,O
will,O
be,O
added,O
to,O
the,O
footnote,O
with,O
respect,O
to,O
termination,O
of,O
the,O
expense,O
limitation,O
agreement,O
:,O
The,O
agreement,O
automatically,O
renews,O
for,O
additional,O
one-year,O
periods,O
if,O
not,O
terminated,O
",",O
in,O
writing,O
",",O
by,O
either,O
party,O
before,O
September,O
30th,O
of,O
each,O
year,O
.,O
,O
The,O
Registrant,O
filed,O
a,O
copy,O
of,O
the,O
Expense,O
Limitation,O
Agreement,O
with,O
Post,O
Effective,O
Amendment,O
No.,O
38,O
on,O
January,O
28,O
",",O
2009,O
(,O
SEC,I-GOVERNMENT
Accession,O
No.,O
Pursuant,O
to,O
its,O
terms,O
",",O
the,O
Agreement,O
was,O
effective,O
until,O
September,O
30,O
",",O
2010,O
and,O
will,O
automatically,O
renew,O
for,O
additional,O
one-year,O
periods,O
if,O
not,O
terminated,O
",",O
in,O
writing,O
",",O
by,O
either,O
party,O
before,O
September,O
30th,O
of,O
each,O
year,O
.,O
,O
Please,O
note,O
that,O
the,O
parties,O
have,O
extended,O
the,O
Expense,O
Limitation,O
Agreement,O
until,O
September,O
30,O
",",O
2011,O
",",O
as,O
referenced,O
above,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Fund,I-MISCELLANEOUS
Summaries-Example,I-MISCELLANEOUS
with,I-MISCELLANEOUS
respect,I-MISCELLANEOUS
to,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Ariel,I-MISCELLANEOUS
Focus,I-MISCELLANEOUS
Fund,I-MISCELLANEOUS
in,O
the,O
Prospectus,O
",",O
please,O
revise,O
the,O
lead,O
in,O
paragraph,O
to,O
note,O
that,O
there,O
is,O
a,O
fee,O
waiver,O
in,O
years,O
1,O
and,O
2,O
.,O
,O
Response,O
:,O
The,O
change,O
will,O
be,O
made,O
as,O
requested,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Fund,I-MISCELLANEOUS
Summaries-Principal,I-MISCELLANEOUS
Risks,I-MISCELLANEOUS
in,O
the,O
Prospectus,O
",",O
the,O
fourth,O
bullet,O
point,O
states,O
that,O
:,O
The,O
Fund,O
may,O
invest,O
up,O
to,O
20,O
%,O
of,O
its,O
respective,O
assets,O
in,O
securities,O
of,O
foreign,O
companies,O
",",O
which,O
may,O
involve,O
risks,O
of,O
currency,O
fluctuation,O
and,O
adverse,O
developments,O
in,O
the,O
foreign,O
countries,O
.,O
,O
The,O
Principal,O
Investment,O
Strategy,O
does,O
not,O
provide,O
any,O
disclosure,O
with,O
respect,O
to,O
foreign,O
investments,O
.,O
,O
Please,O
revise,O
the,O
Principal,O
Investment,O
Strategy,O
to,O
include,O
such,O
disclosure,O
.,O
,O
Response,O
:,O
The,O
Fund,O
does,O
not,O
consider,O
investments,O
in,O
foreign,O
securities,O
to,O
be,O
a,O
principal,O
strategy,O
of,O
the,O
Fund,O
since,O
the,O
Funds,O
investments,O
in,O
foreign,O
securities,O
may,O
be,O
made,O
through,O
the,O
purchase,O
of,O
individual,O
securities,O
on,O
recognized,O
foreign,O
exchanges,O
and,O
developed,O
over-the-counter,O
markets,O
",",O
or,O
through,O
American,I-MISCELLANEOUS
Depositary,I-MISCELLANEOUS
Receipts,I-MISCELLANEOUS
(,O
ADR,I-MISCELLANEOUS
),O
or,O
Global,I-MISCELLANEOUS
Depositary,I-MISCELLANEOUS
Receipts,I-MISCELLANEOUS
(,O
GDR,I-MISCELLANEOUS
),O
covering,O
such,O
securities,O
.,O
,O
The,O
Fund,O
expects,O
to,O
invest,O
in,O
foreign,O
securities,O
mainly,O
through,O
ADRs,I-MISCELLANEOUS
or,O
GDRs,I-MISCELLANEOUS
.,O
,O
Therefore,O
",",O
the,O
Registrant,O
believes,O
that,O
the,O
disclosure,O
does,O
not,O
have,O
to,O
be,O
amended,O
.,O
,O
If,O
this,O
practice,O
were,O
to,O
change,O
",",O
the,O
Registrant,O
will,O
revise,O
the,O
disclosure,O
accordingly,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Fund,O
Summaries,O
-,O
Purchase,O
and,O
Sale,O
of,O
Fund,O
Shares,O
in,O
the,O
Prospectus,O
",",O
please,O
delete,O
the,O
third,O
sentence,O
of,O
the,O
first,O
paragraph,O
.,O
,O
In,O
addition,O
",",O
please,O
delete,O
the,O
footnote,O
to,O
the,O
table,O
in,O
this,O
section,O
.,O
,O
Response,O
:,O
The,O
changes,O
will,O
be,O
made,O
as,O
requested,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Value,I-MISCELLANEOUS
Investing,I-MISCELLANEOUS
defined-A,I-MISCELLANEOUS
long-term,I-MISCELLANEOUS
view,I-MISCELLANEOUS
in,O
the,O
Prospectus,O
",",O
the,O
second,O
sentence,O
of,O
the,O
third,O
paragraph,O
states,O
that,O
:,O
The,O
Funds,O
believe,O
a,O
stock,O
is,O
fully,O
valued,O
when,O
it,O
is,O
trading,O
at,O
a,O
price-to-earnings,O
ratio,O
of,O
more,O
than,O
20,O
times,O
forward,O
12,O
month,O
earnings,O
and/or,O
it,O
is,O
no,O
longer,O
trading,O
at,O
a,O
discount,O
to,O
our,O
private,O
market,O
value,O
calculation,O
.,O
,O
Please,O
clarify,O
if,O
the,O
Fund,O
will,O
always,O
sell,O
a,O
stock,O
based,O
on,O
this,O
criterion,O
or,O
is,O
this,O
just,O
one,O
reason,O
for,O
selling,O
a,O
stock,O
.,O
,O
In,O
addition,O
",",O
please,O
consider,O
including,O
this,O
in,O
the,O
Fund,O
Summaries,O
as,O
sell,O
discipline,O
for,O
the,O
Fund,O
.,O
,O
Response,O
:,O
The,O
Registrant,O
will,O
revise,O
the,O
disclosure,O
to,O
read,O
as,O
follows,O
:,O
In,O
determining,O
whether,O
a,O
stock,O
is,O
fully,O
valued,O
",",O
the,O
Funds,O
look,O
at,O
the,O
price-to-earnings,O
ratio,O
based,O
on,O
future,O
earnings,O
",",O
and,O
whether,O
it,O
trades,O
at,O
a,O
discount,O
to,O
our,O
private,O
market,O
value,O
calculation,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Managing,I-MISCELLANEOUS
Your,I-MISCELLANEOUS
Ariel,I-MISCELLANEOUS
Account-Regarding,I-MISCELLANEOUS
Sales,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Shares,I-MISCELLANEOUS
in,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
in,O
the,O
Prospectus,O
",",O
please,O
define,O
good,O
form,O
.,O
,O
Response,O
:,O
Good,O
form,O
means,O
that,O
the,O
Fund,O
s,O
transfer,O
agent,O
has,O
all,O
information,O
and,O
documentation,O
it,O
deems,O
necessary,O
to,O
effect,O
your,O
order,O
.,O
,O
The,O
sentence,O
has,O
been,O
added,O
to,O
the,O
Prospectus,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Managing,I-MISCELLANEOUS
Your,I-MISCELLANEOUS
Ariel,I-MISCELLANEOUS
Account-Calculating,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
share,I-MISCELLANEOUS
prices,I-MISCELLANEOUS
in,O
the,O
Prospectus,O
",",O
the,O
fourth,O
paragraph,O
discussed,O
foreign,O
securities,O
.,O
,O
Please,O
provide,O
disclosure,O
required,O
by,O
Instruction,O
2,O
to,O
Item,O
11,O
(,O
a,O
),O
(,O
3,O
),O
of,O
Form,I-MISCELLANEOUS
N-1A,I-MISCELLANEOUS
.,O
,O
If,O
the,O
Fund,O
has,O
portfolio,O
securities,O
that,O
are,O
primarily,O
listed,O
on,O
foreign,O
exchanges,O
that,O
trade,O
on,O
weekends,O
or,O
other,O
days,O
when,O
the,O
Fund,O
does,O
not,O
price,O
its,O
shares,O
",",O
disclose,O
that,O
the,O
net,O
asset,O
value,O
of,O
the,O
Fund,O
s,O
shares,O
may,O
change,O
on,O
days,O
when,O
shareholders,O
will,O
not,O
be,O
able,O
to,O
purchase,O
or,O
redeem,O
the,O
Fund,O
s,O
shares,O
.,O
,O
Response,O
:,O
As,O
noted,O
above,O
",",O
the,O
Funds,O
investments,O
in,O
foreign,O
securities,O
will,O
be,O
in,O
ADRs,I-MISCELLANEOUS
and,O
GDRs,I-MISCELLANEOUS
.,O
,O
Therefore,O
",",O
the,O
Registrant,O
believes,O
that,O
the,O
disclosure,O
does,O
not,O
have,O
to,O
be,O
amended,O
.,O
,O
If,O
this,O
practice,O
were,O
to,O
change,O
",",O
the,O
Registrant,O
will,O
revise,O
the,O
disclosure,O
accordingly,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Managing,I-MISCELLANEOUS
Your,I-MISCELLANEOUS
Ariel,I-MISCELLANEOUS
Account-Determining,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Price,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Your,I-MISCELLANEOUS
Transaction,I-MISCELLANEOUS
in,O
the,O
Prospectus,O
",",O
the,O
third,O
paragraph,O
discusses,O
an,O
intermediary,O
receiving,O
your,O
request,O
.,O
,O
Please,O
confirm,O
that,O
the,O
intermediary,O
is,O
not,O
acting,O
as,O
an,O
agent,O
of,O
the,O
Fund,O
.,O
,O
Response,O
:,O
In,O
certain,O
cases,O
",",O
the,O
Intermediary,O
may,O
act,O
as,O
an,O
agent,O
of,O
the,O
Fund,O
.,O
,O
In,O
these,O
instances,O
",",O
the,O
Intermediary,O
agrees,O
to,O
comply,O
with,O
the,O
Funds,O
pricing,O
policies,O
.,O
,O
As,O
noted,O
in,O
the,O
Prospectus,O
",",O
if,O
you,O
are,O
purchasing,O
",",O
selling,O
or,O
exchanging,O
Fund,O
shares,O
through,O
an,O
Intermediary,O
",",O
your,O
NAV,O
is,O
dependent,O
upon,O
when,O
your,O
Intermediary,O
receives,O
your,O
request,O
and,O
sends,O
it,O
to,O
the,O
Funds,O
.,O
,O
To,O
receive,O
the,O
closing,O
price,O
for,O
the,O
day,O
you,O
place,O
your,O
order,O
",",O
your,O
Intermediary,O
must,O
receive,O
your,O
order,O
at,O
or,O
before,O
NYSE,I-BUSINESS
Closing,O
Time,O
and,O
promptly,O
transmit,O
the,O
order,O
to,O
the,O
Funds,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Managing,I-MISCELLANEOUS
Your,I-MISCELLANEOUS
Ariel,I-MISCELLANEOUS
Account-Rule,I-MISCELLANEOUS
12b-1,I-MISCELLANEOUS
Fees,I-MISCELLANEOUS
in,O
the,O
Prospectus,O
",",O
please,O
move,O
this,O
section,O
so,O
that,O
it,O
follows,O
the,O
section,O
entitled,O
Payments,O
to,O
Brokers,O
",",O
Dealers,O
and,O
Other,O
Financial,O
Intermediaries,O
.,O
,O
Response,O
:,O
The,O
change,O
will,O
be,O
made,O
as,O
requested,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
the,O
section,O
entitled,O
Investment,O
Restrictions,O
in,O
the,O
Statement,O
of,O
Additional,O
Information,O
",",O
restriction,O
(,O
4,O
),O
describes,O
further,O
the,O
industry,O
concentration,O
policy,O
.,O
,O
The,O
Funds,O
use,O
a,O
different,O
classification,O
system,O
for,O
purposes,O
of,O
their,O
financial,O
statements,O
.,O
,O
Please,O
describe,O
the,O
classification,O
system,O
and,O
provide,O
an,O
explanation,O
as,O
to,O
why,O
the,O
Funds,O
use,O
a,O
different,O
system,O
.,O
,O
Response,O
:,O
For,O
presentation,O
purposes,O
in,O
the,O
Funds,O
financial,O
statements,O
",",O
and,O
to,O
be,O
consistent,O
with,O
the,O
industry,O
categories,O
displayed,O
in,O
the,O
Composition,O
of,O
Equity,O
Holdings,O
table,O
",",O
the,O
Funds,O
categorize,O
portfolio,O
holdings,O
using,O
the,O
Russell,O
Global,O
Sectors,O
Classification,O
Methodology,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
Lending,O
of,O
Portfolio,O
Securities,O
in,O
the,O
section,O
entitled,O
Investment,O
Strategies,O
and,O
Risks,O
in,O
the,O
Statement,O
of,O
Additional,O
Information,O
",",O
please,O
(,O
i,O
),O
clarify,O
that,O
the,O
Board,O
may,O
recall,O
securities,O
if,O
a,O
material,O
matter,O
is,O
proposed,O
by,O
an,O
issuer,O
of,O
a,O
security,O
",",O
(,O
ii,O
),O
describe,O
the,O
risk,O
of,O
loss,O
and,O
(,O
iii,O
),O
describe,O
fee,O
splits,O
with,O
a,O
lending,O
agent,O
",",O
if,O
any,O
.,O
,O
Response,O
:,O
The,O
first,O
paragraph,O
of,O
the,O
section,O
entitled,O
Lending,O
of,O
Portfolio,O
Securities,O
in,O
the,O
Statement,O
of,O
Additional,O
Information,O
notes,O
that,O
the,O
Trust,O
will,O
exercise,O
its,O
right,O
to,O
terminate,O
a,O
securities,O
loan,O
in,O
order,O
to,O
preserve,O
its,O
right,O
to,O
vote,O
upon,O
matters,O
of,O
importance,O
affecting,O
holders,O
of,O
the,O
securities,O
.,O
,O
As,O
such,O
",",O
the,O
Board,O
of,O
the,O
Trust,O
has,O
the,O
ability,O
to,O
recall,O
securities,O
if,O
a,O
material,O
matter,O
were,O
to,O
occur,O
.,O
,O
The,O
third,O
paragraph,O
of,O
the,O
section,O
entitled,O
Lending,O
of,O
Portfolio,O
Securities,O
in,O
the,O
Statement,O
of,O
Additional,O
Information,O
describes,O
the,O
risk,O
of,O
loss,O
.,O
,O
It,O
states,O
that,O
:,O
Securities,O
loans,O
may,O
be,O
made,O
to,O
broker-dealers,O
and,O
other,O
financial,O
institutions,O
to,O
facilitate,O
their,O
deliveries,O
of,O
such,O
securities,O
.,O
,O
As,O
with,O
any,O
extension,O
of,O
credit,O
",",O
there,O
may,O
be,O
risks,O
of,O
delay,O
in,O
recovery,O
and,O
possibly,O
loss,O
of,O
rights,O
in,O
the,O
loaned,O
securities,O
should,O
the,O
borrower,O
of,O
the,O
loaned,O
securities,O
fail,O
financially,O
.,O
,O
However,O
",",O
loans,O
will,O
be,O
made,O
only,O
to,O
those,O
firms,O
that,O
the,O
Adviser,O
deems,O
creditworthy,O
and,O
only,O
on,O
such,O
terms,O
as,O
it,O
believes,O
should,O
compensate,O
for,O
such,O
risk,O
.,O
,O
While,O
the,O
Funds,O
have,O
the,O
ability,O
to,O
lend,O
portfolio,O
securities,O
",",O
currently,O
none,O
of,O
the,O
Funds,O
are,O
lending,O
portfolio,O
securities,O
and,O
no,O
securities,O
lending,O
agent,O
has,O
been,O
appointed,O
.,O
,O
If,O
this,O
practice,O
were,O
to,O
change,O
",",O
the,O
Registrant,O
will,O
revise,O
the,O
disclosure,O
accordingly,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
Repurchase,O
Agreements,O
in,O
the,O
section,O
entitled,O
Investment,O
Strategies,O
and,O
Risks,O
in,O
the,O
Statement,O
of,O
Additional,O
Information,O
",",O
please,O
provide,O
a,O
statement,O
that,O
a,O
repurchase,O
agreement,O
is,O
a,O
loan,O
.,O
,O
Response,O
:,O
The,O
Statement,O
of,O
Additional,O
Information,O
states,O
that,O
Repurchase,O
agreements,O
are,O
short-term,O
money,O
market,O
investment,O
securities,O
transactions,O
",",O
designed,O
to,O
generate,O
current,O
income,O
.,O
,O
The,O
Registrant,O
believes,O
that,O
the,O
disclosure,O
accurately,O
reflects,O
the,O
definition,O
of,O
a,O
repurchase,O
agreement,O
.,O
,O
SEC,I-GOVERNMENT
Comment,O
:,O
In,O
Restricted,O
and,O
Illiquid,O
Securities,O
in,O
the,O
section,O
entitled,O
Investment,O
Strategies,O
and,O
Risks,O
in,O
the,O
Statement,O
of,O
Additional,O
Information,O
",",O
please,O
describe,O
the,O
steps,O
that,O
a,O
Fund,O
would,O
take,O
if,O
the,O
Fund,O
exceeds,O
the,O
15,O
%,O
investment,O
limitation,O
for,O
illiquid,O
securities,O
.,O
,O
Response,O
:,O
If,O
at,O
any,O
time,O
more,O
than,O
15,O
%,O
of,O
the,O
Fund,O
s,O
net,O
assets,O
are,O
illiquid,O
due,O
to,O
market,O
action,O
or,O
Fund,O
sales,O
of,O
liquid,O
securities,O
",",O
the,O
Registrant,O
will,O
seek,O
to,O
dispose,O
of,O
illiquid,O
assets,O
in,O
excess,O
of,O
15,O
%,O
with,O
all,O
deliberate,O
speed,O
.,O
,O
This,O
sentence,O
has,O
been,O
added,O
to,O
the,O
Statement,O
of,O
Additional,O
Information,O
.,O
,O
Please,O
call,O
me,O
at,O
(,O
617,O
),O
662-3969,O
if,O
you,O
have,O
any,O
further,O
questions,O
.,O
,O
You,O
requested,O
that,O
the,O
Registrant,O
make,O
certain,O
representations,O
concerning,O
the,O
Registration,O
Statement,O
on,O
Form,I-MISCELLANEOUS
N-1A,I-MISCELLANEOUS
and,O
the,O
response,O
being,O
made,O
to,O
the,O
comments,O
received,O
.,O
,O
These,O
representations,O
are,O
included,O
as,O
an,O
exhibit,O
to,O
this,O
letter,O
.,O
,O
Very,O
truly,O
yours,O
",",O
,O
Dominic,I-PERSON
Minore,I-PERSON
Securities,B-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
Investment,I-GOVERNMENT
Company,I-GOVERNMENT
Division,I-GOVERNMENT
100,O
F.,I-LOCATION
Street,I-LOCATION
",",O
N.E.,I-LOCATION
,O
In,O
connection,O
with,O
a,O
response,O
being,O
made,O
on,O
behalf,O
of,O
the,O
Registrant,O
to,O
comments,O
you,O
provided,O
with,O
respect,O
to,O
Post-Effective,O
Amendment,O
No.,O
39,O
to,O
the,O
Registrant,O
s,O
registration,O
statement,O
filed,O
on,O
Form,I-MISCELLANEOUS
N-1A,I-MISCELLANEOUS
for,O
the,O
Registrant,O
on,O
November,O
20,O
",",O
2009,O
(,O
Registration,O
Statement,O
),O
",",O
the,O
Registrant,O
hereby,O
acknowledges,O
that,O
:,O
,O
the,O
Registrant,O
may,O
not,O
assert,O
SEC,I-GOVERNMENT
Staff,O
comments,O
as,O
a,O
defense,O
in,O
any,O
proceeding,O
initiated,O
by,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
or,O
any,O
person,O
under,O
the,O
federal,O
securities,O
laws,O
.,O
,O
We,O
hope,O
that,O
the,O
foregoing,O
is,O
responsive,O
to,O
your,O
request,O
made,O
on,O
January,O
14,O
",",O
2010,O
.,O
,O
Please,O
do,O
not,O
hesitate,O
to,O
contact,O
the,O
undersigned,O
at,O
(,O
312,O
),O
612-2759,O
if,O
you,O
have,O
any,O
questions,O
concerning,O
the,O
foregoing,O
.,O
,O
-DOCSTART-,O
,O
The,O
Heritage,I-MISCELLANEOUS
Financial,I-MISCELLANEOUS
Corporation,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Employee,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Ownership,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Trust,I-MISCELLANEOUS
(,O
the,O
Plan,O
),O
is,O
subject,O
to,O
ERISA,I-LEGISLATION/ACT
and,O
elects,O
to,O
file,O
Plan,O
financial,O
statements,O
and,O
schedules,O
prepared,O
in,O
accordance,O
with,O
the,O
financial,O
reporting,O
requirements,O
of,O
ERISA,I-LEGISLATION/ACT
.,O
,O
Furnished,O
herewith,O
are,O
the,O
financial,O
statements,O
and,O
schedules,O
of,O
the,O
Plan,O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
and,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
Audit,O
and,O
Finance,O
Committee,O
Heritage,I-MISCELLANEOUS
Financial,I-MISCELLANEOUS
Corporation,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Employee,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Ownership,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Trust,I-MISCELLANEOUS
Olympia,I-LOCATION
",",O
Washington,I-LOCATION
We,O
have,O
audited,O
the,O
accompanying,O
statements,O
of,O
net,O
assets,O
available,O
for,O
benefits,O
of,O
the,O
Heritage,I-MISCELLANEOUS
Financial,I-MISCELLANEOUS
Corporation,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Employee,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Ownership,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Trust,I-MISCELLANEOUS
(,O
the,O
Plan,O
),O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
and,O
the,O
related,O
statement,O
of,O
changes,O
in,O
net,O
assets,O
available,O
for,O
benefits,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
These,O
financial,O
statements,O
are,O
the,O
responsibility,O
of,O
the,O
Plan,O
s,O
management,O
.,O
,O
Our,O
responsibility,O
is,O
to,O
express,O
an,O
opinion,O
on,O
these,O
financial,O
statements,O
based,O
on,O
our,O
audits,O
.,O
,O
We,O
conducted,O
our,O
audits,O
in,O
accordance,O
with,O
the,O
standards,O
of,O
the,O
Public,I-GOVERNMENT
Company,I-GOVERNMENT
Accounting,I-GOVERNMENT
Oversight,I-GOVERNMENT
Board,I-GOVERNMENT
(,I-GOVERNMENT
United,I-GOVERNMENT
States,I-GOVERNMENT
),I-GOVERNMENT
.,O
,O
Those,O
standards,O
require,O
that,O
we,O
plan,O
and,O
perform,O
the,O
audit,O
to,O
obtain,O
reasonable,O
assurance,O
about,O
whether,O
the,O
financial,O
statements,O
are,O
free,O
of,O
material,O
misstatement,O
.,O
,O
An,O
audit,O
includes,O
examining,O
on,O
a,O
test,O
basis,O
",",O
evidence,O
supporting,O
the,O
amounts,O
and,O
disclosures,O
in,O
the,O
financial,O
statements,O
.,O
,O
An,O
audit,O
also,O
includes,O
assessing,O
the,O
accounting,O
principles,O
used,O
and,O
significant,O
estimates,O
made,O
by,O
management,O
",",O
as,O
well,O
as,O
evaluating,O
the,O
overall,O
financial,O
statement,O
presentation,O
.,O
,O
We,O
believe,O
that,O
our,O
audits,O
provide,O
a,O
reasonable,O
basis,O
for,O
our,O
opinion,O
.,O
,O
In,O
our,O
opinion,O
",",O
the,O
financial,O
statements,O
referred,O
to,O
above,O
present,O
fairly,O
",",O
in,O
all,O
material,O
respects,O
",",O
the,O
net,O
assets,O
available,O
for,O
benefits,O
of,O
the,O
Plan,O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
and,O
the,O
changes,O
in,O
net,O
assets,O
available,O
for,O
benefits,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
in,O
conformity,O
with,O
U.S.,I-LOCATION
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
.,O
,O
Our,O
audits,O
were,O
performed,O
for,O
the,O
purpose,O
of,O
forming,O
an,O
opinion,O
on,O
the,O
basic,O
financial,O
statements,O
taken,O
as,O
a,O
whole,O
.,O
,O
The,O
supplemental,O
schedules,O
H,O
",",O
line,O
4i,O
Schedule,O
of,O
Assets,O
(,O
Held,O
at,O
End,O
of,O
Year,O
),O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
line,O
4a—Schedule,O
of,O
Delinquent,O
Participant,O
Contributions,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
are,O
presented,O
for,O
the,O
purpose,O
of,O
additional,O
analysis,O
and,O
are,O
not,O
a,O
required,O
part,O
of,O
the,O
basic,O
financial,O
statements,O
but,O
are,O
supplementary,O
information,O
required,O
by,O
the,O
Department,I-GOVERNMENT
of,I-GOVERNMENT
Labor,I-GOVERNMENT
s,O
Rules,O
and,O
Regulations,O
for,O
Reporting,O
and,O
Disclosure,O
under,O
the,O
Employee,I-LEGISLATION/ACT
Retirement,I-LEGISLATION/ACT
Income,I-LEGISLATION/ACT
Security,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1974,I-LEGISLATION/ACT
.,O
,O
The,O
supplemental,O
schedules,O
are,O
the,O
responsibility,O
of,O
the,O
Plan,O
s,O
management,O
.,O
,O
The,O
supplemental,O
schedules,O
have,O
been,O
subjected,O
to,O
the,O
auditing,O
procedures,O
applied,O
in,O
our,O
audits,O
of,O
the,O
basic,O
financial,O
statements,O
and,O
",",O
in,O
our,O
opinion,O
",",O
are,O
fairly,O
stated,O
in,O
all,O
material,O
respects,O
in,O
relation,O
to,O
the,O
basic,O
financial,O
statements,O
taken,O
as,O
a,O
whole,O
.,O
,O
See,O
accompanying,O
notes,O
to,O
financial,O
statements,O
.,O
,O
See,O
accompanying,O
notes,O
to,O
financial,O
statements,O
.,O
,O
The,O
following,O
description,O
of,O
the,O
Heritage,I-MISCELLANEOUS
Financial,I-MISCELLANEOUS
Corporation,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Employee,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Ownership,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Trust,I-MISCELLANEOUS
(,O
the,O
Plan,O
),O
provides,O
only,O
general,O
information,O
.,O
,O
Participants,O
should,O
refer,O
to,O
the,O
Plan,O
agreement,O
for,O
a,O
more,O
complete,O
description,O
of,O
the,O
Plan,O
s,O
provisions,O
.,O
,O
Heritage,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
(,O
the,O
Company,O
),O
is,O
a,O
bank,O
holding,O
company,O
with,O
headquarters,O
in,O
Olympia,I-LOCATION
",",O
Washington,I-LOCATION
.,O
,O
The,O
Plan,O
is,O
a,O
qualified,O
defined,O
contribution,O
plan,O
established,O
by,O
the,O
Company,O
under,O
the,O
provisions,O
of,O
Section,O
401,O
(,O
a,O
),O
",",O
Section,O
401,O
(,O
k,O
),O
and,O
Section,O
4975,O
(,O
e,O
),O
(,O
7,O
),O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
(,O
IRC,I-LEGISLATION/ACT
),O
with,O
salary,O
reduction,O
and,O
employer,O
stock,O
ownership,O
features,O
for,O
the,O
benefit,O
of,O
eligible,O
employees,O
of,O
the,O
Company,O
.,O
,O
The,O
Plan,O
is,O
subject,O
to,O
the,O
provisions,O
of,O
the,O
Employee,I-LEGISLATION/ACT
Retirement,I-LEGISLATION/ACT
Income,I-LEGISLATION/ACT
Security,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1974,I-LEGISLATION/ACT
(,O
ERISA,I-LEGISLATION/ACT
),O
",",O
as,O
amended,O
.,O
,O
The,O
Plan,O
is,O
administered,O
by,O
the,O
401,O
(,O
k,O
),O
Employee,O
Stock,O
Ownership,O
Plan,O
(,O
KSOP,O
),O
Committee,O
",",O
which,O
consists,O
of,O
certain,O
officers,O
and,O
employees,O
of,O
the,O
Company,O
.,O
,O
Wilmington,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
serves,O
as,O
the,O
Custodian,O
",",O
certain,O
officers,O
of,O
the,O
Company,O
serve,O
as,O
Trustees,O
of,O
the,O
Plan,O
and,O
RBC,I-BUSINESS
Wealth,I-BUSINESS
Management,I-BUSINESS
serves,O
as,O
the,O
investment,O
advisor,O
.,O
,O
Employees,O
are,O
eligible,O
to,O
participate,O
in,O
the,O
Plan,O
on,O
the,O
first,O
of,O
the,O
month,O
coincident,O
with,O
or,O
following,O
thirty,O
days,O
of,O
service,O
and,O
attaining,O
age,O
eighteen,O
.,O
,O
Participants,O
may,O
elect,O
to,O
contribute,O
up,O
to,O
the,O
lesser,O
of,O
100,O
%,O
of,O
their,O
eligible,O
compensation,O
or,O
to,O
certain,O
limitations,O
under,O
the,O
IRC,I-LEGISLATION/ACT
.,O
,O
These,O
limitations,O
include,O
a,O
dollar,O
limitation,O
(,O
$,O
"16,500",O
for,O
2010,O
and,O
2009,O
),O
and,O
discrimination,O
testing,O
limitations,O
.,O
,O
Additionally,O
",",O
participants,O
over,O
age,O
50,O
may,O
make,O
catch-up,O
contributions,O
up,O
to,O
the,O
applicable,O
dollar,O
limitation,O
(,O
$,O
"5,500",O
for,O
2010,O
and,O
2009,O
),O
.,O
,O
Participants,O
may,O
also,O
contribute,O
amounts,O
representing,O
distributions,O
from,O
other,O
qualified,O
plans,O
.,O
,O
The,O
Company,O
makes,O
contributions,O
to,O
participant,O
accounts,O
as,O
follows,O
:,O
,O
During,O
2010,O
",",O
the,O
Company,O
s,O
discretionary,O
profit,O
sharing,O
contribution,O
totaled,O
1,O
%,O
of,O
eligible,O
compensation,O
.,O
,O
The,O
following,O
provisions,O
apply,O
to,O
contributions,O
:,O
,O
During,O
2010,O
",",O
the,O
Company,O
met,O
the,O
minimum,O
funding,O
requirements,O
as,O
defined,O
by,O
ERISA,I-LEGISLATION/ACT
.,O
,O
Each,O
participant,O
s,O
account,O
is,O
credited,O
with,O
the,O
participant,O
s,O
elective,O
(,O
401,O
(,O
k,O
),O
),O
contributions,O
and,O
allocations,O
of,O
the,O
Company,O
s,O
contributions,O
(,O
including,O
Company,O
stock,O
attributable,O
to,O
repayments,O
of,O
the,O
ESOP,O
loan,O
),O
and,O
Plan,O
earnings,O
net,O
of,O
expenses,O
.,O
,O
The,O
benefit,O
to,O
which,O
a,O
participant,O
is,O
entitled,O
is,O
the,O
benefit,O
that,O
can,O
be,O
provided,O
from,O
the,O
participant,O
s,O
vested,O
account,O
.,O
,O
Participant,O
accounts,O
are,O
valued,O
daily,O
based,O
on,O
quoted,O
market,O
prices,O
.,O
,O
Participants,O
are,O
always,O
vested,O
in,O
their,O
401,O
(,O
k,O
),O
contributions,O
plus,O
earnings,O
thereon,O
.,O
,O
Vesting,O
in,O
the,O
Company,O
s,O
contributions,O
plus,O
earnings,O
thereon,O
is,O
based,O
on,O
years,O
of,O
service,O
.,O
,O
A,O
participant,O
s,O
matching,O
contribution,O
and,O
all,O
other,O
employer,O
contributions,O
are,O
100,O
%,O
vested,O
after,O
six,O
years,O
of,O
service,O
(,O
or,O
upon,O
death,O
or,O
disability,O
while,O
employed,O
",",O
or,O
retirement,O
on,O
or,O
after,O
normal,O
retirement,O
age,O
),O
",",O
with,O
20,O
%,O
vesting,O
at,O
two,O
years,O
of,O
service,O
increasing,O
by,O
an,O
additional,O
20,O
%,O
with,O
each,O
additional,O
year,O
of,O
service,O
.,O
,O
The,O
Plan,O
s,O
ESOP,O
component,O
is,O
designed,O
to,O
invest,O
primarily,O
in,O
Company,O
common,O
stock,O
in,O
order,O
to,O
comply,O
with,O
Section,O
4975,O
(,O
e,O
),O
(,O
7,O
),O
of,O
the,O
IRC,I-LEGISLATION/ACT
and,O
Income,I-LEGISLATION/ACT
Tax,I-LEGISLATION/ACT
Regulation,I-LEGISLATION/ACT
54.4975-11,O
.,O
,O
Upon,O
enrollment,O
in,O
the,O
Plan,O
",",O
a,O
participant,O
may,O
direct,O
his,O
or,O
her,O
401,O
(,O
k,O
),O
contributions,O
in,O
1,O
%,O
increments,O
among,O
eleven,O
registered,O
investment,O
company,O
funds,O
",",O
one,O
money,O
market,O
fund,O
",",O
and,O
the,O
Company,O
stock,O
fund,O
.,O
,O
Participants,O
also,O
have,O
the,O
option,O
to,O
invest,O
in,O
four,O
different,O
managed,O
portfolio,O
strategies,O
.,O
,O
Participants,O
may,O
change,O
their,O
investment,O
elections,O
and,O
reallocate,O
their,O
investments,O
on,O
a,O
daily,O
basis,O
(,O
including,O
with,O
respect,O
to,O
Company,O
stock,O
),O
.,O
,O
Contributions,O
may,O
be,O
temporarily,O
held,O
as,O
cash,O
balances,O
pending,O
the,O
execution,O
of,O
the,O
investment,O
according,O
to,O
the,O
participant,O
s,O
direction,O
.,O
,O
No,O
distributions,O
from,O
the,O
Plan,O
may,O
be,O
made,O
until,O
a,O
participant,O
retires,O
",",O
dies,O
(,O
in,O
which,O
case,O
",",O
payment,O
shall,O
be,O
made,O
to,O
his,O
or,O
her,O
beneficiary,O
or,O
",",O
if,O
none,O
",",O
to,O
his,O
or,O
her,O
legal,O
representatives,O
),O
",",O
becomes,O
disabled,O
or,O
otherwise,O
terminates,O
employment,O
with,O
the,O
Company,O
.,O
,O
Participants,O
aged,O
59,O
or,O
older,O
are,O
eligible,O
for,O
in-service,O
distributions,O
.,O
,O
However,O
",",O
the,O
participant,O
has,O
the,O
right,O
to,O
defer,O
receipt,O
of,O
his,O
Plan,O
accounts,O
until,O
he,O
or,O
she,O
attains,O
her,O
normal,O
retirement,O
age,O
(,O
age,O
65,O
),O
.,O
,O
Distributions,O
are,O
made,O
in,O
cash,O
",",O
Company,O
stock,O
",",O
or,O
both,O
",",O
at,O
the,O
election,O
of,O
the,O
participant,O
",",O
subject,O
to,O
the,O
terms,O
of,O
the,O
Plan,O
.,O
,O
Benefit,O
distributions,O
are,O
based,O
on,O
the,O
participant,O
s,O
vested,O
account,O
balance,O
and,O
may,O
be,O
distributed,O
in,O
a,O
lump,O
sum,O
.,O
,O
If,O
a,O
participant,O
s,O
vested,O
account,O
balances,O
exceed,O
$,O
"1,000",O
",",O
a,O
participant,O
may,O
elect,O
to,O
have,O
the,O
vested,O
accounts,O
distributed,O
in,O
installments,O
over,O
a,O
period,O
of,O
not,O
more,O
than,O
the,O
participant,O
s,O
life,O
expectancy,O
",",O
or,O
through,O
the,O
purchase,O
of,O
an,O
annuity,O
.,O
,O
In,O
the,O
case,O
of,O
a,O
married,O
participant,O
",",O
certain,O
accounts,O
from,O
a,O
previously,O
merged,O
plan,O
must,O
be,O
distributed,O
in,O
the,O
form,O
of,O
a,O
joint,O
and,O
survivor,O
annuity,O
with,O
the,O
participant,O
s,O
spouse,O
as,O
the,O
joint,O
annuitant,O
",",O
unless,O
waived,O
by,O
the,O
participant,O
and,O
consented,O
to,O
by,O
the,O
participant,O
s,O
spouse,O
.,O
,O
Under,O
certain,O
conditions,O
",",O
participants,O
",",O
while,O
still,O
employed,O
by,O
the,O
Company,O
",",O
are,O
permitted,O
to,O
withdraw,O
in,O
a,O
single,O
sum,O
",",O
the,O
employee,O
contribution,O
portion,O
of,O
their,O
account,O
balance,O
on,O
account,O
of,O
hardship,O
as,O
defined,O
in,O
IRS,I-LEGISLATION/ACT
regulations,O
.,O
,O
If,O
a,O
hardship,O
withdrawal,O
is,O
made,O
",",O
a,O
participant,O
s,O
right,O
to,O
make,O
401,O
(,O
k,O
),O
contributions,O
to,O
the,O
Plan,O
will,O
be,O
suspended,O
for,O
six,O
months,O
after,O
the,O
receipt,O
of,O
the,O
hardship,O
withdrawal,O
.,O
,O
This,O
will,O
affect,O
the,O
participant,O
s,O
right,O
to,O
receive,O
matching,O
contributions,O
but,O
not,O
other,O
Company,O
contributions,O
.,O
,O
In,O
addition,O
",",O
participants,O
",",O
while,O
still,O
employed,O
by,O
the,O
Company,O
",",O
are,O
permitted,O
to,O
withdraw,O
all,O
or,O
a,O
portion,O
of,O
their,O
employee,O
account,O
balance,O
after,O
age,O
59,O
.,O
,O
Rollover,O
accounts,O
may,O
be,O
withdrawn,O
",",O
all,O
or,O
part,O
",",O
once,O
during,O
each,O
Plan,O
Year,O
regardless,O
of,O
the,O
participant,O
s,O
age,O
.,O
,O
The,O
Plan,O
has,O
the,O
right,O
to,O
immediately,O
distribute,O
participant,O
accounts,O
upon,O
termination,O
of,O
service,O
for,O
participants,O
with,O
balances,O
not,O
exceeding,O
$,O
"1,000",O
",",O
as,O
a,O
lump,O
sum,O
distribution,O
.,O
,O
Participants,O
may,O
diversify,O
their,O
employer,O
contributions,O
daily,O
among,O
all,O
of,O
the,O
investment,O
options,O
in,O
the,O
Plan,O
from,O
time,O
to,O
time,O
",",O
including,O
the,O
Company,O
stock,O
fund,O
.,O
,O
No,O
participant,O
shall,O
have,O
any,O
voting,O
or,O
dividend,O
rights,O
or,O
other,O
rights,O
of,O
a,O
stockholder,O
prior,O
to,O
the,O
time,O
that,O
shares,O
are,O
allocated,O
to,O
the,O
participant,O
.,O
,O
Each,O
participant,O
is,O
entitled,O
to,O
exercise,O
voting,O
rights,O
attributable,O
to,O
the,O
shares,O
of,O
Company,O
stock,O
allocated,O
to,O
his,O
or,O
her,O
account,O
and,O
is,O
notified,O
by,O
the,O
trustee,O
prior,O
to,O
the,O
time,O
that,O
such,O
rights,O
are,O
to,O
be,O
exercised,O
.,O
,O
Forfeitures,O
may,O
be,O
used,O
to,O
pay,O
reasonable,O
and,O
permitted,O
administrative,O
expenses,O
",",O
with,O
the,O
remainder,O
used,O
to,O
reduce,O
the,O
Company,O
s,O
employer,O
contribution,O
obligation,O
.,O
,O
Forfeitures,O
used,O
to,O
reduce,O
employer,O
contributions,O
during,O
2010,O
were,O
approximately,O
$,O
"14,000",O
.,O
,O
Participants,O
may,O
borrow,O
",",O
upon,O
written,O
application,O
",",O
any,O
amount,O
provided,O
that,O
the,O
aggregate,O
amount,O
of,O
all,O
outstanding,O
notes,O
from,O
the,O
participant,O
to,O
the,O
Plan,O
",",O
taking,O
into,O
account,O
notes,O
payable,O
to,O
any,O
other,O
qualified,O
plan,O
maintained,O
by,O
the,O
employer,O
",",O
shall,O
not,O
exceed,O
the,O
lesser,O
of,O
$,O
"50,000",O
or,O
50,O
%,O
of,O
the,O
participant,O
s,O
vested,O
account,O
balance,O
.,O
,O
Note,O
terms,O
shall,O
not,O
exceed,O
five,O
years,O
",",O
except,O
for,O
the,O
purchase,O
of,O
a,O
primary,O
residence,O
.,O
,O
The,O
notes,O
are,O
collateralized,O
by,O
the,O
balance,O
in,O
the,O
participant,O
s,O
account,O
and,O
bear,O
interest,O
at,O
a,O
rate,O
equal,O
to,O
the,O
then,O
current,O
prime,O
rate,O
.,O
,O
Principal,O
and,O
interest,O
is,O
paid,O
ratably,O
semi-monthly,O
through,O
payroll,O
deductions,O
.,O
,O
The,O
interest,O
rate,O
on,O
outstanding,O
notes,O
as,O
of,O
December,O
31,O
",",O
2010,O
ranged,O
from,O
3.25,O
%,O
to,O
4.00,O
%,O
and,O
the,O
notes,O
mature,O
through,O
September,O
2014,O
.,O
,O
Administrative,O
expenses,O
including,O
trust,O
",",O
recordkeeping,O
",",O
audit,O
",",O
and,O
investment,O
fees,O
are,O
paid,O
by,O
the,O
Plan,O
.,O
,O
The,O
Company,O
may,O
also,O
pay,O
administrative,O
expenses,O
.,O
,O
The,O
accompanying,O
financial,O
statements,O
have,O
been,O
prepared,O
under,O
the,O
accrual,O
method,O
of,O
accounting,O
.,O
,O
The,O
preparation,O
of,O
financial,O
statements,O
in,O
conformity,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
requires,O
management,O
to,O
make,O
estimates,O
and,O
assumptions,O
that,O
affect,O
the,O
reported,O
amounts,O
of,O
assets,O
",",O
liabilities,O
and,O
changes,O
therein,O
",",O
and,O
the,O
disclosure,O
of,O
contingent,O
assets,O
and,O
liabilities,O
.,O
,O
Actual,O
results,O
could,O
differ,O
from,O
those,O
estimates,O
.,O
,O
The,O
Plan,O
allows,O
participants,O
to,O
direct,O
contributions,O
into,O
money,O
market,O
funds,O
",",O
various,O
registered,O
investment,O
company,O
funds,O
",",O
and,O
Company,O
stock,O
.,O
,O
The,O
underlying,O
investment,O
securities,O
of,O
these,O
funds,O
and,O
Company,O
stock,O
are,O
exposed,O
to,O
various,O
risks,O
",",O
including,O
but,O
not,O
limited,O
to,O
interest,O
rate,O
",",O
market,O
and,O
credit,O
risk,O
.,O
,O
Due,O
to,O
the,O
level,O
of,O
risk,O
associated,O
with,O
certain,O
underlying,O
investment,O
securities,O
and,O
the,O
level,O
of,O
uncertainty,O
related,O
to,O
changes,O
in,O
the,O
value,O
of,O
the,O
funds,O
",",O
in,O
particular,O
the,O
Company,O
stock,O
",",O
it,O
is,O
likely,O
that,O
changes,O
in,O
the,O
value,O
of,O
investment,O
securities,O
will,O
occur,O
in,O
the,O
near,O
term,O
and,O
that,O
such,O
changes,O
could,O
materially,O
affect,O
participants,O
account,O
balances,O
and,O
the,O
amounts,O
reported,O
in,O
the,O
statement,O
of,O
net,O
assets,O
available,O
for,O
benefits,O
and,O
the,O
statement,O
of,O
changes,O
in,O
net,O
assets,O
available,O
for,O
benefits,O
.,O
,O
Participants,O
should,O
refer,O
to,O
Heritage,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
s,O
annual,O
and,O
quarterly,O
financial,O
statements,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
Form,I-MISCELLANEOUS
10K,I-MISCELLANEOUS
and,O
10Q,I-MISCELLANEOUS
),O
regarding,O
risks,O
associated,O
with,O
Company,O
stock,O
.,O
,O
The,O
Plan,O
s,O
investments,O
are,O
stated,O
at,O
fair,O
value,O
.,O
,O
Shares,O
of,O
registered,O
investment,O
company,O
funds,O
and,O
the,O
Company,O
stock,O
in,O
the,O
ESOP,O
fund,O
are,O
valued,O
at,O
quoted,O
market,O
prices,O
.,O
,O
The,O
Company,O
stock,O
fund,O
is,O
valued,O
at,O
fair,O
value,O
based,O
on,O
its,O
year-end,O
unit,O
closing,O
price,O
(,O
comprised,O
of,O
year-end,O
market,O
price,O
of,O
the,O
stock,O
on,O
the,O
NASDAQ,I-MISCELLANEOUS
National,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
System,I-MISCELLANEOUS
plus,O
cash,O
equivalent,O
position,O
held,O
",",O
if,O
any,O
),O
.,O
,O
Purchases,O
and,O
sales,O
of,O
securities,O
are,O
recorded,O
on,O
a,O
trade-date,O
basis,O
.,O
,O
Dividend,O
income,O
is,O
accrued,O
on,O
the,O
ex-dividend,O
date,O
.,O
,O
Interest,O
income,O
is,O
recorded,O
on,O
the,O
accrual,O
basis,O
.,O
,O
Realized,O
gains,O
and,O
losses,O
from,O
security,O
transactions,O
are,O
reported,O
on,O
the,O
moving,O
average,O
method,O
.,O
,O
Net,O
appreciation,O
in,O
fair,O
value,O
of,O
investments,O
represents,O
the,O
change,O
in,O
fair,O
value,O
from,O
one,O
period,O
to,O
the,O
next,O
and,O
realized,O
gains,O
and,O
losses,O
.,O
,O
Benefits,O
are,O
recorded,O
when,O
paid,O
.,O
,O
At,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
assets,O
allocated,O
to,O
withdrawing,O
participants,O
totaled,O
$,O
"10,158",O
and,O
$,O
0,O
",",O
respectively,O
.,O
,O
Notes,O
receivable,O
from,O
participants,O
are,O
stated,O
at,O
the,O
outstanding,O
balance,O
of,O
the,O
loan,O
plus,O
accrued,O
interest,O
.,O
,O
In,O
September,O
2010,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
(,O
ASU,I-LEGISLATION/ACT
),O
No.,O
2010—25,O
",",O
Plan,I-MISCELLANEOUS
Accounting,I-MISCELLANEOUS
Defined,I-MISCELLANEOUS
Contribution,I-MISCELLANEOUS
Pension,I-MISCELLANEOUS
Plans,I-MISCELLANEOUS
(,I-MISCELLANEOUS
Topic,I-MISCELLANEOUS
962,I-MISCELLANEOUS
),I-MISCELLANEOUS
",",I-MISCELLANEOUS
Reporting,I-MISCELLANEOUS
Loans,I-MISCELLANEOUS
to,I-MISCELLANEOUS
Participants,I-MISCELLANEOUS
by,I-MISCELLANEOUS
Defined,I-MISCELLANEOUS
Contribution,I-MISCELLANEOUS
Pension,I-MISCELLANEOUS
Plans,I-MISCELLANEOUS
",",O
a,O
consensus,O
of,O
the,O
FASB,I-GOVERNMENT
Emerging,I-GOVERNMENT
Issues,I-GOVERNMENT
Task,I-GOVERNMENT
Force,I-GOVERNMENT
(,O
Update,O
),O
.,O
,O
This,O
Update,O
requires,O
that,O
participant,O
loans,O
be,O
classified,O
as,O
notes,O
receivable,O
from,O
participants,O
",",O
which,O
are,O
segregated,O
from,O
plan,O
investments,O
and,O
measured,O
at,O
their,O
unpaid,O
principal,O
balance,O
plus,O
any,O
accrued,O
but,O
unpaid,O
interest,O
.,O
,O
This,O
Update,O
is,O
effective,O
for,O
periods,O
ending,O
after,O
December,O
15,O
",",O
2010,O
",",O
with,O
early,O
adoption,O
permitted,O
",",O
and,O
requires,O
retrospective,O
application,O
to,O
all,O
periods,O
presented,O
.,O
,O
ASU,I-LEGISLATION/ACT
2010-25,O
was,O
adopted,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
and,O
retrospectively,O
applied,O
to,O
December,O
31,O
",",O
2009,O
.,O
,O
Prior,O
year,O
amounts,O
and,O
disclosures,O
have,O
been,O
revised,O
to,O
reflect,O
the,O
retrospective,O
application,O
of,O
adopting,O
this,O
new,O
standard,O
.,O
,O
The,O
Plan,O
purchased,O
shares,O
of,O
the,O
Company,O
s,O
stock,O
using,O
the,O
proceeds,O
of,O
a,O
loan,O
from,O
the,O
Company,O
and,O
the,O
Plan,O
holds,O
the,O
stock,O
in,O
a,O
trust,O
established,O
under,O
the,O
Plan,O
.,O
,O
The,O
loan,O
is,O
to,O
be,O
repaid,O
over,O
a,O
period,O
of,O
15,O
years,O
funded,O
by,O
Company,O
contributions,O
to,O
the,O
trust,O
fund,O
.,O
,O
The,O
Company,O
stock,O
acquired,O
with,O
the,O
ESOP,O
loan,O
is,O
held,O
in,O
a,O
suspense,O
account,O
under,O
the,O
Plan,O
pending,O
repayment,O
of,O
the,O
loan,O
.,O
,O
Under,O
the,O
ESOP,O
feature,O
of,O
the,O
Plan,O
",",O
the,O
Company,O
is,O
obligated,O
to,O
make,O
contributions,O
in,O
cash,O
to,O
the,O
Plan,O
which,O
",",O
when,O
aggregated,O
with,O
the,O
Plan,O
s,O
dividends,O
and,O
interest,O
earnings,O
",",O
equal,O
the,O
amount,O
necessary,O
to,O
enable,O
the,O
Plan,O
to,O
make,O
its,O
regularly,O
scheduled,O
payments,O
of,O
principal,O
and,O
interest,O
due,O
on,O
its,O
term,O
indebtedness,O
to,O
the,O
Company,O
.,O
,O
Each,O
year,O
",",O
as,O
the,O
Plan,O
makes,O
payments,O
of,O
principal,O
and,O
interest,O
",",O
an,O
appropriate,O
percentage,O
of,O
stock,O
is,O
released,O
from,O
the,O
suspense,O
account,O
in,O
accordance,O
with,O
applicable,O
regulations,O
under,O
the,O
IRC,I-LEGISLATION/ACT
",",O
and,O
allocated,O
to,O
participants,O
",",O
generally,O
on,O
a,O
pro,O
rata,O
basis,O
based,O
on,O
annual,O
compensation,O
.,O
,O
The,O
unallocated,O
shares,O
of,O
Company,O
stock,O
collateralize,O
the,O
loan,O
.,O
,O
The,O
lender,O
has,O
no,O
rights,O
against,O
shares,O
once,O
they,O
are,O
allocated,O
under,O
the,O
Plan,O
.,O
,O
Accordingly,O
",",O
the,O
table,O
below,O
presents,O
separately,O
the,O
assets,O
and,O
liabilities,O
and,O
changes,O
therein,O
pertaining,O
to,O
:,O
,O
The,O
Plan,O
s,O
ESOP,O
assets,O
are,O
summarized,O
as,O
follows,O
and,O
represent,O
a,O
portion,O
of,O
the,O
Heritage,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
common,O
stock,O
as,O
presented,O
on,O
the,O
Statement,O
of,O
Net,O
Assets,O
:,O
,O
Pending,O
transfers,O
represent,O
stocks,O
to,O
be,O
deposited,O
to,O
participants,O
in,O
Q1,O
of,O
the,O
following,O
plan,O
year,O
.,O
,O
Upon,O
transfer,O
",",O
the,O
shares,O
will,O
be,O
participant-directed,O
.,O
,O
The,O
ESOP,O
component,O
s,O
change,O
in,O
net,O
assets,O
is,O
summarized,O
as,O
follows,O
:,O
,O
In,O
January,O
1998,O
",",O
the,O
Plan,O
borrowed,O
$,O
"1,323,000",O
from,O
the,O
Company,O
to,O
purchase,O
shares,O
of,O
the,O
Company,O
s,O
stock,O
.,O
,O
The,O
loan,O
matures,O
January,O
2013,O
and,O
is,O
repaid,O
in,O
monthly,O
installments,O
of,O
$,O
"13,023",O
primarily,O
from,O
the,O
Company,O
s,O
contributions,O
.,O
,O
Interest,O
is,O
accrued,O
at,O
a,O
rate,O
of,O
8.5,O
%,O
per,O
annum,O
.,O
,O
The,O
repayment,O
schedule,O
for,O
principal,O
is,O
as,O
follows,O
:,O
,O
The,O
following,O
investments,O
represent,O
5,O
%,O
or,O
more,O
of,O
the,O
Plan,O
s,O
net,O
assets,O
available,O
for,O
benefits,O
at,O
the,O
end,O
of,O
the,O
year,O
:,O
,O
The,O
Plan,O
s,O
investments,O
appreciated,O
during,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
as,O
follows,O
:,O
,O
Fair,O
value,O
is,O
measured,O
in,O
three,O
levels,O
",",O
based,O
on,O
the,O
markets,O
in,O
which,O
the,O
assets,O
and,O
liabilities,O
are,O
traded,O
and,O
the,O
reliability,O
of,O
the,O
assumptions,O
used,O
to,O
determine,O
fair,O
value,O
.,O
,O
The,O
three,O
levels,O
are,O
described,O
below,O
:,O
,O
The,O
asset,O
s,O
or,O
liability,O
s,O
fair,O
value,O
measurement,O
level,O
within,O
the,O
fair,O
value,O
hierarchy,O
is,O
based,O
on,O
the,O
lowest,O
level,O
of,O
any,O
input,O
that,O
is,O
significant,O
to,O
the,O
fair,O
value,O
measurement,O
valuation,O
techniques,O
used,O
need,O
to,O
maximize,O
the,O
use,O
of,O
observable,O
inputs,O
and,O
minimize,O
the,O
use,O
of,O
unobservable,O
inputs,O
.,O
,O
Following,O
is,O
a,O
description,O
of,O
the,O
valuation,O
methodologies,O
used,O
for,O
assets,O
measured,O
at,O
fair,O
value,O
of,O
financial,O
assets,O
and,O
liabilities,O
.,O
,O
There,O
have,O
been,O
no,O
changes,O
in,O
the,O
methodologies,O
used,O
at,O
December,O
31,O
",",O
2010,O
and,O
2009,O
.,O
,O
Money,O
market,O
funds,O
and,O
equity,O
securities,O
:,O
Valued,O
at,O
the,O
closing,O
price,O
reported,O
on,O
the,O
active,O
market,O
on,O
which,O
the,O
individual,O
securities,O
are,O
traded,O
.,O
,O
Registered,O
investment,O
company,O
funds,O
:,O
Valued,O
at,O
the,O
net,O
asset,O
value,O
(,O
NAV,O
),O
of,O
shares,O
held,O
by,O
the,O
plan,O
at,O
year-end,O
.,O
,O
The,O
methods,O
described,O
above,O
may,O
produce,O
a,O
fair,O
value,O
calculation,O
that,O
may,O
not,O
be,O
indicative,O
of,O
net,O
realizable,O
value,O
or,O
reflective,O
of,O
future,O
fair,O
values,O
.,O
,O
Furthermore,O
",",O
while,O
the,O
Plan,O
believes,O
its,O
valuation,O
methods,O
are,O
appropriate,O
and,O
consistent,O
with,O
other,O
market,O
participants,O
",",O
the,O
use,O
of,O
different,O
methodologies,O
or,O
assumptions,O
to,O
determine,O
the,O
fair,O
value,O
of,O
certain,O
financial,O
instruments,O
could,O
result,O
in,O
a,O
different,O
fair,O
value,O
measurement,O
at,O
the,O
reporting,O
date,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
by,O
level,O
",",O
within,O
the,O
fair,O
value,O
hierarchy,O
",",O
the,O
Plan,O
s,O
assets,O
at,O
fair,O
value,O
on,O
a,O
recurring,O
basis,O
as,O
of,O
December,O
31,O
",",O
2010,O
:,O
,O
The,O
following,O
table,O
sets,O
forth,O
by,O
level,O
",",O
within,O
the,O
fair,O
value,O
hierarchy,O
",",O
the,O
Plan,O
s,O
assets,O
at,O
fair,O
value,O
on,O
a,O
recurring,O
basis,O
as,O
of,O
December,O
31,O
",",O
2009,O
:,O
,O
Fair,O
Value,O
of,O
Other,O
Financial,O
Instruments,O
The,O
fair,O
value,O
of,O
other,O
financial,O
instruments,O
such,O
as,O
employer,O
contributions,O
receivable,O
and,O
loan,O
payable,O
approximate,O
their,O
carrying,O
value,O
.,O
,O
The,O
Company,O
reserves,O
the,O
right,O
to,O
terminate,O
the,O
Plan,O
at,O
any,O
time,O
",",O
subject,O
to,O
Plan,O
provisions,O
.,O
,O
Upon,O
termination,O
of,O
the,O
Plan,O
",",O
participant,O
accounts,O
become,O
fully,O
vested,O
and,O
will,O
be,O
distributed,O
to,O
the,O
participant,O
or,O
his,O
or,O
her,O
beneficiary,O
at,O
the,O
time,O
prescribed,O
by,O
the,O
Plan,O
terms,O
and,O
the,O
IRC,I-LEGISLATION/ACT
.,O
,O
Upon,O
termination,O
of,O
the,O
Plan,O
",",O
the,O
trustee,O
will,O
direct,O
the,O
Plan,O
administrator,O
to,O
pay,O
all,O
liabilities,O
and,O
expenses,O
of,O
the,O
trust,O
fund,O
and,O
to,O
sell,O
shares,O
of,O
unallocated,O
stock,O
to,O
the,O
extent,O
it,O
determines,O
such,O
sale,O
necessary,O
to,O
repay,O
the,O
loan,O
.,O
,O
Remaining,O
unallocated,O
shares,O
will,O
be,O
allocated,O
to,O
participants,O
.,O
,O
Although,O
the,O
Plan,O
has,O
been,O
amended,O
since,O
receiving,O
the,O
determination,O
letter,O
",",O
the,O
Plan,O
administrator,O
believes,O
that,O
the,O
Plan,O
is,O
designed,O
and,O
is,O
currently,O
being,O
operated,O
in,O
compliance,O
with,O
the,O
applicable,O
requirements,O
of,O
the,O
IRC,I-LEGISLATION/ACT
.,O
,O
Therefore,O
",",O
no,O
provision,O
for,O
income,O
taxes,O
has,O
been,O
included,O
in,O
the,O
Plan,O
s,O
financial,O
statements,O
.,O
,O
The,O
Plan,O
will,O
be,O
submitted,O
to,O
the,O
IRS,I-GOVERNMENT
for,O
a,O
determination,O
letter,O
in,O
accordance,O
with,O
the,O
appropriate,O
reporting,O
cycle,O
.,O
,O
Accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
require,O
plan,O
management,O
to,O
evaluate,O
tax,O
positions,O
taken,O
by,O
the,O
Plan,O
and,O
recognize,O
a,O
tax,O
liability,O
(,O
or,O
asset,O
),O
if,O
the,O
Plan,O
has,O
taken,O
an,O
uncertain,O
position,O
that,O
more,O
likely,O
than,O
not,O
would,O
not,O
be,O
sustained,O
upon,O
examination,O
by,O
the,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
.,O
,O
The,O
plan,O
administrator,O
has,O
analyzed,O
the,O
tax,O
positions,O
taken,O
by,O
the,O
Plan,O
",",O
and,O
has,O
concluded,O
that,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
there,O
are,O
no,O
uncertain,O
positions,O
taken,O
or,O
expected,O
to,O
be,O
taken,O
that,O
would,O
require,O
recognition,O
of,O
a,O
liability,O
(,O
or,O
asset,O
),O
or,O
disclosure,O
in,O
the,O
financial,O
statements,O
.,O
,O
The,O
Plan,O
is,O
subject,O
to,O
routine,O
audits,O
by,O
taxing,O
jurisdictions,O
;,O
however,O
",",O
there,O
are,O
currently,O
no,O
audits,O
for,O
any,O
tax,O
periods,O
in,O
progress,O
.,O
,O
The,O
plan,O
administrator,O
believes,O
it,O
is,O
no,O
longer,O
subject,O
to,O
income,O
tax,O
examinations,O
for,O
years,O
prior,O
to,O
2008,O
.,O
,O
The,O
Plan,O
s,O
assets,O
",",O
which,O
consist,O
primarily,O
of,O
shares,O
of,O
Company,O
stock,O
",",O
registered,O
investment,O
company,O
funds,O
",",O
and,O
money,O
market,O
funds,O
are,O
held,O
by,O
Wilmington,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
",",O
the,O
Custodian,O
of,O
the,O
Plan,O
assets,O
.,O
,O
The,O
Company,O
s,O
contributions,O
are,O
held,O
and,O
managed,O
by,O
the,O
custodian,O
at,O
the,O
direction,O
of,O
the,O
Trustees,O
",",O
which,O
invests,O
cash,O
received,O
",",O
interest,O
and,O
dividend,O
income,O
",",O
and,O
makes,O
distributions,O
to,O
participants,O
.,O
,O
The,O
record,O
keeper,O
administers,O
the,O
payment,O
of,O
interest,O
and,O
principal,O
on,O
the,O
loan,O
",",O
which,O
is,O
reimbursed,O
to,O
the,O
trustee,O
through,O
contributions,O
determined,O
by,O
the,O
Company,O
.,O
,O
Officers,O
or,O
employees,O
of,O
the,O
Company,O
perform,O
certain,O
administrative,O
functions,O
.,O
,O
No,O
officer,O
or,O
employee,O
receives,O
compensation,O
from,O
the,O
Plan,O
.,O
,O
For,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
the,O
Plan,O
paid,O
Wilmington,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
$,O
"12,842",O
for,O
services,O
as,O
custodian,O
of,O
the,O
Plan,O
assets,O
.,O
,O
For,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
the,O
Plan,O
paid,O
approximately,O
$,O
"88,350",O
to,O
other,O
service,O
providers,O
that,O
are,O
defined,O
as,O
a,O
Party,O
in,O
Interest,O
under,O
ERISA,I-LEGISLATION/ACT
.,O
,O
Subsequent,O
events,O
have,O
been,O
evaluated,O
through,O
the,O
date,O
the,O
financial,O
statements,O
were,O
issued,O
.,O
,O
The,O
following,O
is,O
a,O
reconciliation,O
of,O
net,O
assets,O
available,O
for,O
benefits,O
per,O
the,O
financial,O
statements,O
to,O
Schedule,O
H,O
of,O
Form,I-MISCELLANEOUS
5500,I-MISCELLANEOUS
:,O
,O
The,O
following,O
is,O
a,O
reconciliation,O
of,O
benefits,O
paid,O
to,O
participants,O
per,O
the,O
financial,O
statements,O
to,O
Schedule,O
H,O
of,O
Form,I-MISCELLANEOUS
5500,I-MISCELLANEOUS
:,O
,O
See,O
accompanying,O
report,O
of,O
independent,O
registered,O
public,O
accounting,O
firm,O
.,O
,O
See,O
accompanying,O
report,O
of,O
independent,O
registered,O
public,O
accounting,O
firm,O
.,O
,O
The,O
Plan,O
",",O
pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
trustees,O
(,O
or,O
other,O
person,O
who,O
administer,O
the,O
Plan,O
),O
have,O
duly,O
caused,O
the,O
annual,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
hereunto,O
duly,O
authorized,O
.,O
,O
HERITAGE,I-MISCELLANEOUS
FINANCIAL,I-MISCELLANEOUS
CORPORATION,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
,O
(,O
Name,O
of,O
Plan,O
),O
,O
Consent,O
of,O
Independent,O
Registered,O
Public,O
Accounting,O
Firm,O
Exhibit,O
23.1,O
Audit,O
and,O
Finance,O
Committee,O
Heritage,I-MISCELLANEOUS
Financial,I-MISCELLANEOUS
Corporation,I-MISCELLANEOUS
s,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Employee,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Ownership,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Trust,I-MISCELLANEOUS
:,O
We,O
consent,O
to,O
the,O
incorporation,O
by,O
reference,O
in,O
the,O
registration,O
statement,O
(,O
No.,O
333-87599,O
),O
on,O
Form,I-MISCELLANEOUS
S-8,I-MISCELLANEOUS
of,O
Heritage,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
of,O
our,O
report,O
dated,O
June,O
21,O
",",O
2011,O
",",O
with,O
respect,O
to,O
the,O
statements,O
of,O
net,O
assets,O
available,O
for,O
benefits,O
of,O
the,O
Heritage,I-MISCELLANEOUS
Financial,I-MISCELLANEOUS
Corporation,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Employee,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Ownership,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Trust,I-MISCELLANEOUS
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
the,O
related,O
statement,O
of,O
changes,O
in,O
net,O
assets,O
available,O
for,O
benefits,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
and,O
the,O
supplemental,O
schedules,O
H,O
",",O
line,O
4i,O
Schedule,O
of,O
Assets,O
(,O
Held,O
at,O
End,O
of,O
Year,O
),O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
line,O
4a,O
Schedule,O
of,O
Delinquent,O
Participant,O
Contributions,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
which,O
report,O
appears,O
in,O
the,O
December,O
31,O
",",O
2010,O
annual,O
report,O
on,O
Form,I-MISCELLANEOUS
11-K,I-MISCELLANEOUS
of,O
the,O
Heritage,I-MISCELLANEOUS
Financial,I-MISCELLANEOUS
Corporation,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Employee,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Ownership,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Trust,I-MISCELLANEOUS
.,O
,O
-DOCSTART-,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
Registrant,O
has,O
submitted,O
electronically,O
and,O
posted,O
on,O
its,O
corporate,O
Web,O
site,O
",",O
if,O
any,O
",",O
every,O
Interactive,O
Data,O
File,O
required,O
to,O
be,O
submitted,O
and,O
posted,O
pursuant,O
to,O
Rule,O
405,O
of,O
Regulations,I-LEGISLATION/ACT
S-T,I-LEGISLATION/ACT
(,O
232.405,O
of,O
this,O
chapter,O
),O
during,O
the,O
preceding,O
12,O
months,O
(,O
or,O
for,O
shorter,O
period,O
that,O
the,O
Registrant,O
was,O
required,O
to,O
submit,O
and,O
post,O
such,O
files,O
),O
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
large,O
accelerated,O
filer,O
",",O
an,O
accelerated,O
filer,O
",",O
a,O
non-accelerated,O
filer,O
",",O
or,O
a,O
smaller,O
reporting,O
company,O
.,O
,O
See,O
definitions,O
of,O
“,O
large,O
accelerated,O
filer,O
”,O
",",O
“,O
accelerated,O
filer,O
”,O
and,O
“,O
smaller,O
reporting,O
company,O
”,O
in,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
check,O
one,O
),O
:,O
,O
As,O
of,O
May,O
16,O
",",O
2011,O
",",O
there,O
were,O
"41,543,655",O
outstanding,O
shares,O
of,O
common,O
stock,O
",",O
par,O
value,O
$,O
0.001,O
per,O
share,O
",",O
of,O
the,O
registrant,O
.,O
,O
(,O
1,O
),O
Derived,O
from,O
audited,O
financial,O
statements,O
.,O
,O
The,O
accompanying,O
unaudited,O
consolidated,O
financial,O
statements,O
have,O
been,O
prepared,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
(,O
“,O
US,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
”,O
),O
for,O
interim,O
financial,O
information,O
and,O
with,O
the,O
instructions,O
to,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
and,O
Article,O
8-03,O
of,O
Regulation,I-LEGISLATION/ACT
S-X,I-LEGISLATION/ACT
.,O
,O
Accordingly,O
",",O
the,O
consolidated,O
financial,O
statements,O
do,O
not,O
include,O
all,O
of,O
the,O
information,O
and,O
footnotes,O
required,O
by,O
US,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
for,O
complete,O
financial,O
statements,O
.,O
,O
In,O
the,O
opinion,O
of,O
management,O
",",O
all,O
adjustments,O
considered,O
necessary,O
for,O
a,O
fair,O
presentation,O
have,O
been,O
included,O
and,O
such,O
adjustments,O
are,O
of,O
a,O
normal,O
recurring,O
nature,O
.,O
,O
These,O
consolidated,O
financial,O
statements,O
should,O
be,O
read,O
in,O
conjunction,O
with,O
the,O
consolidated,O
financial,O
statements,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
and,O
notes,O
thereto,O
and,O
other,O
pertinent,O
information,O
contained,O
in,O
the,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
of,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
Corporation,I-BUSINESS
(,O
the,O
“,O
Company,O
”,O
",",O
“,O
we,O
”,O
",",O
“,O
us,O
”,O
or,O
“,O
our,O
”,O
),O
as,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
the,O
“,O
Commission,O
”,O
),O
.,O
,O
The,O
consolidated,O
financial,O
statements,O
of,O
the,O
Company,O
include,O
the,O
Company,O
and,O
its,O
subsidiaries,O
.,O
,O
All,O
material,O
inter-company,O
balances,O
and,O
transactions,O
have,O
been,O
eliminated,O
.,O
,O
The,O
results,O
of,O
operations,O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
are,O
not,O
necessarily,O
indicative,O
of,O
the,O
results,O
for,O
the,O
full,O
fiscal,O
year,O
ending,O
December,O
31,O
",",O
2011,O
.,O
,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
Corporation,I-BUSINESS
was,O
incorporated,O
under,O
the,O
laws,O
of,O
the,O
state,O
of,O
Nevada,I-LOCATION
on,O
October,O
21,O
",",O
2004,O
as,O
Darwin,I-BUSINESS
Resources,I-BUSINESS
Corp.,I-BUSINESS
",",O
(,O
“,O
Darwin-NV,I-BUSINESS
”,O
),O
.,O
,O
On,O
November,O
22,O
",",O
2005,O
",",O
Darwin-NV,I-BUSINESS
merged,O
with,O
and,O
into,O
its,O
newly-formed,O
wholly-owned,O
subsidiary,O
",",O
Darwin,I-BUSINESS
Resources,I-BUSINESS
Corp.,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
corporation,O
(,O
“,O
Darwin-DE,I-BUSINESS
”,O
),O
",",O
solely,O
for,O
the,O
purpose,O
of,O
changing,O
the,O
Company,O
’,O
s,O
state,O
of,O
incorporation,O
from,O
Nevada,I-LOCATION
to,O
Delaware,I-LOCATION
.,O
,O
On,O
November,O
23,O
",",O
2005,O
",",O
HBDC,I-BUSINESS
II,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
newly-formed,O
wholly-owned,O
subsidiary,O
of,O
Darwin-DE,I-BUSINESS
",",O
was,O
merged,O
with,O
and,O
into,O
Health,I-BUSINESS
Benefits,I-BUSINESS
Direct,I-BUSINESS
Corporation,I-BUSINESS
",",O
a,O
privately-held,O
Delaware,O
corporation,O
(,O
“,O
HBDC,I-BUSINESS
”,O
),O
",",O
and,O
the,O
name,O
of,O
the,O
resulting,O
entity,O
was,O
changed,O
from,O
Health,I-BUSINESS
Benefits,I-BUSINESS
Direct,I-BUSINESS
Corporation,I-BUSINESS
to,O
HBDC,I-BUSINESS
II,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
Following,O
the,O
merger,O
",",O
Darwin-DE,I-BUSINESS
changed,O
its,O
name,O
to,O
Health,I-BUSINESS
Benefits,I-BUSINESS
Direct,I-BUSINESS
Corporation,I-BUSINESS
.,O
,O
On,O
November,O
29,O
",",O
2010,O
",",O
Health,I-BUSINESS
Benefits,I-BUSINESS
Direct,I-BUSINESS
Corporation,I-BUSINESS
changed,O
its,O
name,O
to,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
Corporation,I-BUSINESS
.,O
,O
Our,O
current,O
operations,O
consist,O
of,O
our,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
LLC,I-BUSINESS
subsidiary,O
(,O
“,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
”,O
),O
.,O
,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
is,O
a,O
provider,O
of,O
comprehensive,O
",",O
web-based,O
insurance,O
administration,O
software,O
applications,O
.,O
,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
’,O
flagship,O
software,O
product,O
is,O
InsPro,I-BUSINESS
",",O
which,O
was,O
introduced,O
in,O
2004,O
.,O
,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
offers,O
InsPro,I-MISCELLANEOUS
Enterprise,I-MISCELLANEOUS
(,O
“,O
InsPro,I-MISCELLANEOUS
”,O
),O
on,O
a,O
licensed,O
and,O
an,O
Application,O
Service,O
Provider,O
(,O
“,O
ASP,O
”,O
),O
basis,O
.,O
,O
InsPro,I-MISCELLANEOUS
is,O
an,O
insurance,O
administration,O
and,O
marketing,O
system,O
that,O
supports,O
group,O
and,O
individual,O
business,O
lines,O
",",O
and,O
efficiently,O
processes,O
agent,O
",",O
direct,O
market,O
",",O
worksite,O
and,O
web,O
site,O
generated,O
business,O
.,O
,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
’,O
clients,O
include,O
insurance,O
carriers,O
and,O
third,O
party,O
administrators,O
.,O
,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
realizes,O
revenue,O
from,O
the,O
sale,O
of,O
software,O
licenses,O
",",O
application,O
service,O
provider,O
fees,O
",",O
software,O
maintenance,O
fees,O
and,O
professional,O
services,O
.,O
,O
We,O
acquired,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
on,O
October,O
1,O
",",O
2007,O
.,O
,O
NOTE,O
1,O
–,O
BASIS,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
PRESENTATION,I-MISCELLANEOUS
AND,I-MISCELLANEOUS
SUMMARY,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
SIGNIFICANT,I-MISCELLANEOUS
ACCOUNTING,I-MISCELLANEOUS
POLICIES,I-MISCELLANEOUS
(,O
continued,O
),O
,O
The,O
preparation,O
of,O
financial,O
statements,O
in,O
conformity,O
with,O
US,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
requires,O
management,O
to,O
make,O
estimates,O
and,O
assumptions,O
that,O
affect,O
certain,O
reported,O
amounts,O
and,O
disclosures,O
.,O
,O
Accordingly,O
",",O
actual,O
results,O
could,O
differ,O
from,O
those,O
estimates,O
.,O
,O
Significant,O
estimates,O
in,O
2011,O
and,O
2010,O
include,O
the,O
allowance,O
for,O
doubtful,O
accounts,O
",",O
stock-based,O
compensation,O
",",O
the,O
useful,O
lives,O
of,O
property,O
and,O
equipment,O
and,O
intangible,O
assets,O
",",O
warrant,O
liability,O
and,O
revenue,O
recognition,O
.,O
,O
The,O
Company,O
considers,O
all,O
liquid,O
debt,O
instruments,O
with,O
original,O
maturities,O
of,O
3,O
months,O
or,O
less,O
to,O
be,O
cash,O
equivalents,O
.,O
,O
The,O
Company,O
has,O
a,O
policy,O
of,O
establishing,O
an,O
allowance,O
for,O
uncollectible,O
accounts,O
based,O
on,O
its,O
best,O
estimate,O
of,O
the,O
amount,O
of,O
probable,O
credit,O
losses,O
in,O
its,O
existing,O
accounts,O
receivable,O
.,O
,O
The,O
Company,O
periodically,O
reviews,O
its,O
accounts,O
receivable,O
to,O
determine,O
whether,O
an,O
allowance,O
is,O
necessary,O
based,O
on,O
an,O
analysis,O
of,O
past,O
due,O
accounts,O
and,O
other,O
factors,O
that,O
may,O
indicate,O
that,O
the,O
realization,O
of,O
an,O
account,O
may,O
be,O
in,O
doubt,O
.,O
,O
Account,O
balances,O
deemed,O
to,O
be,O
uncollectible,O
are,O
charged,O
to,O
the,O
allowance,O
after,O
all,O
means,O
of,O
collection,O
have,O
been,O
exhausted,O
and,O
the,O
potential,O
for,O
recovery,O
is,O
considered,O
remote,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
",",O
the,O
Company,O
has,O
established,O
",",O
based,O
on,O
a,O
review,O
of,O
its,O
outstanding,O
balances,O
",",O
an,O
allowance,O
for,O
doubtful,O
accounts,O
in,O
the,O
amount,O
of,O
$,O
0,O
.,O
,O
Accounts,O
receivable,O
from,O
the,O
two,O
largest,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
clients,O
accounted,O
for,O
30,O
%,O
and,O
17,O
%,O
",",O
respectively,O
",",O
of,O
the,O
Company,O
’,O
s,O
total,O
accounts,O
receivable,O
balance,O
at,O
March,O
31,O
",",O
2011,O
.,O
,O
The,O
carrying,O
amounts,O
of,O
financial,O
instruments,O
",",O
including,O
cash,O
and,O
cash,O
equivalents,O
",",O
restricted,O
cash,O
",",O
accounts,O
receivable,O
",",O
accounts,O
payable,O
",",O
accrued,O
expenses,O
and,O
capital,O
leases,O
approximated,O
fair,O
value,O
as,O
of,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
",",O
because,O
of,O
the,O
relatively,O
short-term,O
maturity,O
of,O
these,O
instruments,O
and,O
their,O
market,O
interest,O
rates,O
.,O
,O
Property,O
and,O
equipment,O
are,O
carried,O
at,O
cost,O
.,O
,O
The,O
cost,O
of,O
repairs,O
and,O
maintenance,O
are,O
expensed,O
as,O
incurred,O
;,O
major,O
replacements,O
and,O
improvements,O
are,O
capitalized,O
.,O
,O
When,O
assets,O
are,O
retired,O
or,O
disposed,O
of,O
",",O
the,O
cost,O
and,O
accumulated,O
depreciation,O
are,O
removed,O
from,O
the,O
accounts,O
",",O
and,O
any,O
resulting,O
gains,O
or,O
losses,O
are,O
included,O
in,O
income,O
in,O
the,O
year,O
of,O
disposition,O
.,O
,O
In,O
accordance,O
with,O
Statement,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Financial,I-LEGISLATION/ACT
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
ASC,B-LEGISLATION/ACT
360,O
",",O
``,O
Accounting,I-MISCELLANEOUS
for,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Impairment,I-MISCELLANEOUS
or,I-MISCELLANEOUS
Disposal,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Long-Lived,I-MISCELLANEOUS
Assets,I-MISCELLANEOUS
'',O
the,O
Company,O
examines,O
the,O
possibility,O
of,O
decreases,O
in,O
the,O
value,O
of,O
fixed,O
assets,O
when,O
events,O
or,O
changes,O
in,O
circumstances,O
reflect,O
the,O
fact,O
that,O
their,O
recorded,O
value,O
may,O
not,O
be,O
recoverable,O
.,O
,O
Intangible,O
assets,O
consist,O
of,O
assets,O
acquired,O
in,O
connection,O
with,O
the,O
acquisition,O
of,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
and,O
costs,O
incurred,O
in,O
connection,O
with,O
the,O
development,O
of,O
the,O
Company,O
’,O
s,O
software,O
.,O
,O
See,O
Note,O
4,O
–,O
Intangible,I-MISCELLANEOUS
Assets,I-MISCELLANEOUS
.,O
,O
NOTE,O
1,O
–,O
BASIS,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
PRESENTATION,I-MISCELLANEOUS
AND,I-MISCELLANEOUS
SUMMARY,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
SIGNIFICANT,I-MISCELLANEOUS
ACCOUNTING,I-MISCELLANEOUS
POLICIES,I-MISCELLANEOUS
(,O
continued,O
),O
,O
The,O
Company,O
periodically,O
reviews,O
its,O
long-lived,O
assets,O
for,O
impairment,O
whenever,O
events,O
or,O
changes,O
in,O
circumstances,O
indicate,O
that,O
the,O
carrying,O
amount,O
of,O
the,O
assets,O
may,O
not,O
be,O
fully,O
recoverable,O
.,O
,O
The,O
Company,O
recognizes,O
an,O
impairment,O
loss,O
when,O
the,O
sum,O
of,O
expected,O
undiscounted,O
future,O
cash,O
flows,O
is,O
less,O
than,O
the,O
carrying,O
amount,O
of,O
the,O
asset,O
.,O
,O
The,O
amount,O
of,O
impairment,O
is,O
measured,O
as,O
the,O
difference,O
between,O
the,O
asset,O
's,O
estimated,O
fair,O
value,O
and,O
its,O
book,O
value,O
.,O
,O
For,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
the,O
Company,O
recorded,O
a,O
gain,O
on,O
the,O
change,O
in,O
fair,O
value,O
of,O
derivative,O
liability,O
of,O
$,O
"309,294",O
to,O
mark,O
to,O
market,O
for,O
the,O
decrease,O
in,O
fair,O
value,O
of,O
the,O
warrants,O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
.,O
,O
The,O
Company,O
determined,O
the,O
fair,O
value,O
of,O
the,O
warrant,O
liability,O
at,O
March,O
31,O
",",O
2011,O
was,O
$,O
"3,721,046",O
.,O
,O
The,O
fair,O
value,O
was,O
determined,O
using,O
the,O
Black,I-MISCELLANEOUS
Scholes,I-MISCELLANEOUS
Option,I-MISCELLANEOUS
Pricing,I-MISCELLANEOUS
Model,I-MISCELLANEOUS
based,O
on,O
the,O
following,O
assumptions,O
:,O
dividend,O
yield,O
:,O
0,O
%,O
",",O
risk,O
free,O
rate,O
:,O
0.17,O
%,O
and,O
the,O
following,O
:,O
,O
A,O
summary,O
of,O
the,O
Company,O
's,O
warrant,O
liability,O
activity,O
and,O
balances,O
as,O
of,O
and,O
for,O
year,O
ended,O
December,O
31,O
",",O
2010,O
are,O
as,O
follows,O
:,O
,O
NOTE,O
1,O
–,O
BASIS,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
PRESENTATION,I-MISCELLANEOUS
AND,I-MISCELLANEOUS
SUMMARY,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
SIGNIFICANT,I-MISCELLANEOUS
ACCOUNTING,I-MISCELLANEOUS
POLICIES,I-MISCELLANEOUS
(,O
continued,O
),O
,O
The,O
Company,O
accounts,O
for,O
income,O
taxes,O
under,O
the,O
liability,O
method,O
.,O
,O
Under,O
this,O
method,O
",",O
deferred,O
income,O
tax,O
assets,O
and,O
liabilities,O
are,O
determined,O
based,O
on,O
differences,O
between,O
the,O
financial,O
reporting,O
and,O
tax,O
bases,O
of,O
assets,O
and,O
liabilities,O
and,O
are,O
measured,O
using,O
the,O
enacted,O
tax,O
rates,O
and,O
laws,O
that,O
will,O
be,O
in,O
effect,O
when,O
the,O
differences,O
are,O
expected,O
to,O
reverse,O
.,O
,O
Basic,O
earnings,O
(,O
loss,O
),O
per,O
share,O
is,O
computed,O
by,O
dividing,O
net,O
income,O
(,O
loss,O
),O
by,O
the,O
weighted,O
average,O
number,O
of,O
shares,O
of,O
common,O
stock,O
outstanding,O
during,O
the,O
period,O
.,O
,O
Diluted,O
earnings,O
per,O
share,O
is,O
computed,O
by,O
dividing,O
net,O
income,O
by,O
the,O
weighted,O
average,O
number,O
of,O
shares,O
of,O
common,O
stock,O
",",O
common,O
stock,O
equivalents,O
and,O
potentially,O
dilutive,O
securities,O
outstanding,O
during,O
the,O
period,O
.,O
,O
Diluted,O
loss,O
per,O
common,O
share,O
is,O
not,O
presented,O
because,O
it,O
is,O
anti-dilutive,O
.,O
,O
The,O
Company,O
's,O
common,O
stock,O
equivalents,O
at,O
March,O
31,O
",",O
2011,O
",",O
include,O
the,O
following,O
:,O
,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
offers,O
InsPro,I-MISCELLANEOUS
on,O
a,O
licensed,O
and,O
an,O
ASP,O
basis,O
.,O
,O
An,O
InsPro,I-MISCELLANEOUS
software,O
license,O
entitles,O
the,O
purchaser,O
a,O
perpetual,O
license,O
to,O
a,O
copy,O
of,O
the,O
InsPro,I-MISCELLANEOUS
software,O
installed,O
at,O
a,O
single,O
client,O
location,O
.,O
,O
Alternatively,O
",",O
ASP,O
hosting,O
service,O
enables,O
a,O
client,O
to,O
lease,O
the,O
InsPro,I-MISCELLANEOUS
software,O
",",O
paying,O
only,O
for,O
that,O
capacity,O
required,O
to,O
support,O
their,O
business,O
.,O
,O
ASP,O
clients,O
access,O
InsPro,I-MISCELLANEOUS
installed,O
on,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
owned,O
servers,O
located,O
at,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
’,O
offices,O
or,O
at,O
a,O
third,O
party,O
’,O
s,O
site,O
.,O
,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
’,O
software,O
maintenance,O
fees,O
apply,O
to,O
both,O
licensed,O
and,O
ASP,O
clients,O
.,O
,O
Maintenance,O
fees,O
cover,O
periodic,O
updates,O
to,O
the,O
application,O
and,O
the,O
InsPro,I-MISCELLANEOUS
help,O
desk,O
.,O
,O
NOTE,O
1,O
–,O
BASIS,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
PRESENTATION,I-MISCELLANEOUS
AND,I-MISCELLANEOUS
SUMMARY,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
SIGNIFICANT,I-MISCELLANEOUS
ACCOUNTING,I-MISCELLANEOUS
POLICIES,I-MISCELLANEOUS
(,O
continued,O
),O
,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
’,O
consulting,O
and,O
implementation,O
services,O
are,O
generally,O
associated,O
with,O
the,O
implementation,O
of,O
an,O
InsPro,I-MISCELLANEOUS
instance,O
for,O
either,O
an,O
ASP,O
or,O
licensed,O
client,O
",",O
and,O
cover,O
such,O
activity,O
as,O
InsPro,I-MISCELLANEOUS
installation,O
",",O
configuration,O
",",O
modification,O
of,O
InsPro,I-MISCELLANEOUS
functionality,O
",",O
client,O
insurance,O
document,O
design,O
and,O
system,O
documentation,O
.,O
,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
’,O
revenue,O
is,O
generally,O
recognized,O
under,O
ASC,I-LEGISLATION/ACT
985-605,O
.,O
,O
For,O
software,O
arrangements,O
involving,O
multiple,O
elements,O
",",O
the,O
Company,O
allocates,O
revenue,O
to,O
each,O
element,O
based,O
on,O
the,O
relative,O
fair,O
value,O
or,O
the,O
residual,O
method,O
",",O
as,O
applicable,O
using,O
vendor,O
specific,O
objective,O
evidence,O
to,O
determine,O
fair,O
value,O
",",O
which,O
is,O
based,O
on,O
prices,O
charged,O
when,O
the,O
element,O
is,O
sold,O
separately,O
.,O
,O
Software,O
revenue,O
accounted,O
for,O
under,O
ASC,I-LEGISLATION/ACT
985-605,O
is,O
recognized,O
when,O
persuasive,O
evidence,O
of,O
an,O
arrangement,O
exists,O
",",O
the,O
software,O
is,O
delivered,O
in,O
accordance,O
with,O
all,O
terms,O
and,O
conditions,O
of,O
the,O
customer,O
contracts,O
",",O
the,O
fee,O
is,O
fixed,O
or,O
determinable,O
and,O
collectibility,O
is,O
probable,O
.,O
,O
Revenue,O
related,O
to,O
post-contract,O
customer,O
support,O
(,O
“,O
PCS,O
”,O
),O
",",O
including,O
technical,O
support,O
and,O
unspecified,O
when-and-if,O
available,O
software,O
upgrades,O
",",O
is,O
recognized,O
ratably,O
over,O
the,O
PCS,O
term,O
.,O
,O
Under,O
ASC,I-LEGISLATION/ACT
985-605,O
",",O
if,O
fair,O
value,O
does,O
not,O
exist,O
for,O
any,O
undelivered,O
element,O
",",O
revenue,O
is,O
not,O
recognized,O
until,O
the,O
earlier,O
of,O
(,O
i,O
),O
delivery,O
of,O
such,O
element,O
or,O
(,O
ii,O
),O
when,O
fair,O
value,O
of,O
the,O
undelivered,O
element,O
is,O
established,O
",",O
unless,O
the,O
undelivered,O
element,O
is,O
a,O
service,O
",",O
in,O
which,O
case,O
revenue,O
is,O
recognized,O
as,O
the,O
service,O
is,O
performed,O
once,O
the,O
service,O
is,O
the,O
only,O
undelivered,O
element,O
.,O
,O
The,O
Company,O
recognizes,O
revenue,O
from,O
software,O
license,O
agreements,O
when,O
persuasive,O
evidence,O
of,O
an,O
agreement,O
exists,O
",",O
delivery,O
of,O
the,O
software,O
has,O
occurred,O
",",O
the,O
fee,O
is,O
fixed,O
or,O
determinable,O
",",O
and,O
collectibility,O
is,O
probable,O
.,O
,O
The,O
Company,O
considers,O
fees,O
relating,O
to,O
arrangements,O
with,O
payment,O
terms,O
extending,O
beyond,O
one,O
year,O
to,O
not,O
be,O
fixed,O
or,O
determinable,O
and,O
revenue,O
for,O
these,O
arrangements,O
is,O
recognized,O
as,O
payments,O
become,O
due,O
from,O
the,O
customer,O
.,O
,O
In,O
software,O
arrangements,O
that,O
include,O
more,O
than,O
one,O
InsPro,I-MISCELLANEOUS
module,O
",",O
the,O
Company,O
allocates,O
the,O
total,O
arrangement,O
fee,O
among,O
the,O
modules,O
based,O
on,O
the,O
relative,O
fair,O
value,O
of,O
each,O
of,O
the,O
modules,O
.,O
,O
License,O
revenue,O
allocated,O
to,O
software,O
products,O
generally,O
is,O
recognized,O
upon,O
delivery,O
of,O
the,O
products,O
or,O
deferred,O
and,O
recognized,O
in,O
future,O
periods,O
to,O
the,O
extent,O
that,O
an,O
arrangement,O
includes,O
one,O
or,O
more,O
elements,O
to,O
be,O
delivered,O
at,O
a,O
future,O
date,O
and,O
for,O
which,O
fair,O
values,O
have,O
not,O
been,O
established,O
.,O
,O
Revenue,O
allocated,O
to,O
maintenance,O
agreements,O
is,O
recognized,O
ratably,O
over,O
the,O
maintenance,O
term,O
and,O
revenue,O
allocated,O
to,O
training,O
and,O
other,O
service,O
elements,O
is,O
recognized,O
as,O
the,O
services,O
are,O
performed,O
.,O
,O
The,O
unearned,O
portion,O
of,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
’,O
revenue,O
",",O
which,O
is,O
revenue,O
collected,O
or,O
billed,O
but,O
not,O
yet,O
recognized,O
as,O
earned,O
",",O
has,O
been,O
included,O
in,O
the,O
consolidated,O
balance,O
sheet,O
as,O
a,O
liability,O
for,O
deferred,O
revenue,O
.,O
,O
Cost,O
of,O
revenues,O
includes,O
direct,O
labor,O
and,O
associated,O
costs,O
for,O
employees,O
and,O
independent,O
contractors,O
performing,O
InsPro,I-MISCELLANEOUS
design,O
",",O
development,O
",",O
implementation,O
",",O
testing,O
together,O
with,O
customer,O
management,O
",",O
training,O
and,O
technical,O
support,O
",",O
as,O
well,O
as,O
facilities,O
",",O
equipment,O
and,O
software,O
costs,O
.,O
,O
Advertising,O
and,O
other,O
marketing,O
costs,O
are,O
expensed,O
as,O
incurred,O
.,O
,O
NOTE,O
1,O
–,O
BASIS,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
PRESENTATION,I-MISCELLANEOUS
AND,I-MISCELLANEOUS
SUMMARY,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
SIGNIFICANT,I-MISCELLANEOUS
ACCOUNTING,I-MISCELLANEOUS
POLICIES,I-MISCELLANEOUS
(,O
continued,O
),O
,O
The,O
Company,O
maintains,O
its,O
cash,O
in,O
bank,O
deposit,O
accounts,O
",",O
which,O
exceed,O
the,O
federally,O
insured,O
limits,O
as,O
provided,O
through,O
the,O
Federal,I-GOVERNMENT
Deposit,I-GOVERNMENT
Insurance,I-GOVERNMENT
Corporation,I-GOVERNMENT
(,O
“,O
FDIC,I-GOVERNMENT
”,O
),O
.,O
,O
In,O
2010,O
the,O
FDIC,I-GOVERNMENT
insurance,O
coverage,O
limit,O
has,O
been,O
permanently,O
increased,O
to,O
$,O
"250,000",O
per,O
depositor,O
",",O
per,O
institution,O
as,O
a,O
result,O
of,O
the,O
Dodd-Frank,I-LEGISLATION/ACT
Wall,I-LEGISLATION/ACT
Street,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Consumer,I-LEGISLATION/ACT
Protection,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Beginning,O
December,O
31,O
",",O
2010,O
",",O
the,O
FDIC,I-GOVERNMENT
has,O
implemented,O
a,O
new,O
temporary,O
insurance,O
category,O
to,O
provide,O
unlimited,O
FDIC,I-GOVERNMENT
insurance,O
coverage,O
for,O
funds,O
held,O
in,O
noninterest-bearing,O
transaction,O
accounts,O
at,O
insured,O
banks,O
.,O
,O
This,O
temporary,O
category,O
will,O
remain,O
in,O
effect,O
through,O
December,O
31,O
",",O
2012,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
",",O
the,O
Company,O
had,O
$,O
"5,211,859",O
of,O
cash,O
in,O
United,I-LOCATION
States,I-LOCATION
bank,O
deposits,O
",",O
of,O
which,O
$,O
"1,996,980",O
was,O
federally,O
insured,O
and,O
$,O
"3,214,879",O
exceeded,O
federally,O
insured,O
limits,O
.,O
,O
The,O
following,O
table,O
lists,O
the,O
percentage,O
of,O
the,O
Company,O
’,O
s,O
revenue,O
",",O
which,O
was,O
earned,O
from,O
the,O
Company,O
’,O
s,O
two,O
largest,O
InsPro,I-MISCELLANEOUS
clients,O
.,O
,O
The,O
Company,O
accounts,O
for,O
stock,O
based,O
compensation,O
transactions,O
using,O
a,O
fair-value-based,O
method,O
and,O
recognizes,O
compensation,O
cost,O
for,O
share-based,O
payments,O
to,O
employees,O
based,O
on,O
their,O
grant-date,O
fair,O
value,O
from,O
the,O
beginning,O
of,O
the,O
fiscal,O
period,O
in,O
which,O
the,O
recognition,O
provisions,O
are,O
first,O
applied,O
.,O
,O
The,O
Company,O
classifies,O
as,O
liability,O
instruments,O
the,O
fair,O
value,O
of,O
registration,O
rights,O
agreements,O
when,O
such,O
agreements,O
(,O
i,O
),O
require,O
it,O
to,O
file,O
",",O
and,O
cause,O
to,O
be,O
declared,O
effective,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
a,O
registration,O
statement,O
with,O
the,O
Commission,O
within,O
contractually,O
fixed,O
time,O
periods,O
",",O
and,O
(,O
ii,O
),O
provide,O
for,O
the,O
payment,O
of,O
liquidating,O
damages,O
in,O
the,O
event,O
of,O
its,O
failure,O
to,O
comply,O
with,O
such,O
agreements,O
and,O
such,O
failure,O
is,O
probable,O
.,O
,O
Registration,O
rights,O
with,O
these,O
characteristics,O
are,O
accounted,O
for,O
as,O
derivative,O
financial,O
instruments,O
at,O
fair,O
value,O
and,O
contracts,O
that,O
are,O
(,O
a,O
),O
indexed,O
to,O
and,O
potentially,O
settled,O
in,O
an,O
issuer,O
's,O
own,O
stock,O
and,O
(,O
b,O
),O
permit,O
gross,O
physical,O
or,O
net,O
share,O
settlement,O
with,O
no,O
net,O
cash,O
settlement,O
alternative,O
are,O
classified,O
as,O
equity,O
instruments,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
",",O
the,O
Company,O
does,O
not,O
believe,O
that,O
it,O
is,O
probable,O
that,O
the,O
Company,O
will,O
incur,O
a,O
penalty,O
in,O
connection,O
with,O
the,O
Company,O
’,O
s,O
registration,O
rights,O
agreements,O
.,O
,O
Accordingly,O
no,O
liability,O
was,O
recorded,O
as,O
of,O
March,O
31,O
",",O
2011,O
.,O
,O
NOTE,O
1,O
–,O
BASIS,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
PRESENTATION,I-MISCELLANEOUS
AND,I-MISCELLANEOUS
SUMMARY,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
SIGNIFICANT,I-MISCELLANEOUS
ACCOUNTING,I-MISCELLANEOUS
POLICIES,I-MISCELLANEOUS
(,O
continued,O
),O
,O
In,O
April,O
2009,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
guidance,O
in,O
the,O
Fair,I-MISCELLANEOUS
Value,I-MISCELLANEOUS
Measurements,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Disclosures,I-MISCELLANEOUS
Topic,I-MISCELLANEOUS
of,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Codification,I-MISCELLANEOUS
on,O
determining,O
fair,O
value,O
when,O
the,O
volume,O
and,O
level,O
of,O
activity,O
for,O
an,O
asset,O
or,O
liability,O
have,O
significantly,O
decreased,O
and,O
identifying,O
transactions,O
that,O
are,O
not,O
orderly,O
.,O
,O
The,O
guidance,O
emphasizes,O
that,O
even,O
if,O
there,O
has,O
been,O
a,O
significant,O
decrease,O
in,O
the,O
volume,O
and,O
level,O
of,O
activity,O
",",O
the,O
objective,O
of,O
a,O
fair,O
value,O
measurement,O
remains,O
the,O
same,O
.,O
,O
Fair,O
value,O
is,O
the,O
price,O
that,O
would,O
be,O
received,O
to,O
sell,O
an,O
asset,O
or,O
paid,O
to,O
transfer,O
a,O
liability,O
in,O
an,O
orderly,O
transaction,O
(,O
that,O
is,O
",",O
not,O
a,O
forced,O
liquidation,O
or,O
distressed,O
sale,O
),O
between,O
market,O
participants,O
.,O
,O
The,O
guidance,O
provides,O
a,O
number,O
of,O
factors,O
to,O
consider,O
when,O
evaluating,O
whether,O
there,O
has,O
been,O
a,O
significant,O
decrease,O
in,O
the,O
volume,O
and,O
level,O
of,O
activity,O
for,O
an,O
asset,O
or,O
liability,O
in,O
relation,O
to,O
normal,O
market,O
activity,O
.,O
,O
In,O
addition,O
",",O
when,O
transactions,O
or,O
quoted,O
prices,O
are,O
not,O
considered,O
orderly,O
",",O
adjustments,O
to,O
those,O
prices,O
based,O
on,O
the,O
weight,O
of,O
available,O
information,O
may,O
be,O
needed,O
to,O
determine,O
the,O
appropriate,O
fair,O
value,O
.,O
,O
The,O
guidance,O
is,O
effective,O
for,O
interim,O
or,O
annual,O
reporting,O
periods,O
ending,O
after,O
June,O
15,O
",",O
2009,O
",",O
and,O
shall,O
be,O
applied,O
prospectively,O
.,O
,O
We,O
adopted,O
this,O
guidance,O
effective,O
for,O
the,O
quarter,O
ending,O
June,O
30,O
",",O
2009,O
.,O
,O
There,O
is,O
no,O
impact,O
of,O
the,O
adoption,O
on,O
our,O
financial,O
statements,O
as,O
of,O
March,O
31,O
",",O
2011,O
.,O
,O
In,O
April,O
2009,O
",",O
FASB,I-GOVERNMENT
issued,O
guidance,O
in,O
the,O
Financial,I-MISCELLANEOUS
Instruments,I-MISCELLANEOUS
Topic,O
of,O
the,O
Codification,O
on,O
interim,O
disclosures,O
about,O
fair,O
value,O
of,O
financial,O
instruments,O
.,O
,O
The,O
guidance,O
requires,O
disclosures,O
about,O
the,O
fair,O
value,O
of,O
financial,O
instruments,O
for,O
both,O
interim,O
reporting,O
periods,O
",",O
as,O
well,O
as,O
annual,O
reporting,O
periods,O
.,O
,O
The,O
guidance,O
is,O
effective,O
for,O
all,O
interim,O
and,O
annual,O
reporting,O
periods,O
ending,O
after,O
June,O
15,O
",",O
2009,O
and,O
shall,O
be,O
applied,O
prospectively,O
.,O
,O
The,O
adoption,O
of,O
this,O
guidance,O
had,O
no,O
impact,O
on,O
our,O
financial,O
statements,O
as,O
of,O
March,O
31,O
",",O
2011,O
.,O
,O
In,O
May,O
2009,O
",",O
FASB,I-GOVERNMENT
issued,O
guidance,O
in,O
the,O
Subsequent,I-MISCELLANEOUS
Events,I-MISCELLANEOUS
Topic,O
of,O
the,O
Codification,O
.,O
,O
The,O
guidance,O
is,O
intended,O
to,O
establish,O
general,O
standards,O
of,O
accounting,O
for,O
",",O
and,O
disclosure,O
of,O
",",O
events,O
that,O
occur,O
after,O
the,O
balance,O
sheet,O
date,O
but,O
before,O
financial,O
statements,O
are,O
issued,O
.,O
,O
It,O
requires,O
the,O
disclosure,O
of,O
the,O
date,O
through,O
which,O
an,O
entity,O
has,O
evaluated,O
subsequent,O
events,O
and,O
the,O
basis,O
for,O
that,O
date,O
.,O
,O
The,O
guidance,O
is,O
effective,O
for,O
interim,O
or,O
annual,O
financial,O
periods,O
ending,O
after,O
June,O
15,O
",",O
2009,O
and,O
is,O
required,O
to,O
be,O
adopted,O
prospectively,O
.,O
,O
We,O
adopted,O
this,O
guidance,O
effective,O
for,O
the,O
quarter,O
ending,O
June,O
30,O
",",O
2009,O
.,O
,O
The,O
adoption,O
of,O
this,O
guidance,O
had,O
no,O
impact,O
on,O
our,O
financial,O
statements,O
as,O
of,O
March,O
31,O
",",O
2011,O
",",O
other,O
than,O
the,O
additional,O
disclosure,O
.,O
,O
In,O
June,O
2009,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
guidance,O
which,O
will,O
amend,O
the,O
Consolidation,I-MISCELLANEOUS
Topic,O
of,O
the,O
Codification,O
.,O
,O
The,O
guidance,O
addresses,O
the,O
effects,O
of,O
eliminating,O
the,O
qualifying,O
special-purpose,O
entity,O
(,O
QSPE,O
),O
concept,O
and,O
responds,O
to,O
concerns,O
over,O
the,O
transparency,O
of,O
enterprises,O
’,O
involvement,O
with,O
variable,O
interest,O
entities,O
(,O
VIEs,O
),O
.,O
,O
The,O
guidance,O
is,O
effective,O
beginning,O
on,O
January,O
1,O
",",O
2010,O
.,O
,O
We,O
do,O
not,O
expect,O
the,O
adoption,O
of,O
this,O
guidance,O
to,O
have,O
an,O
impact,O
on,O
our,O
financial,O
statements,O
.,O
,O
In,O
August,O
2009,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
No.,O
2009-05,O
",",O
“,O
Measuring,I-MISCELLANEOUS
Liabilities,I-MISCELLANEOUS
at,I-MISCELLANEOUS
Fair,I-MISCELLANEOUS
Value,I-MISCELLANEOUS
”,O
(,O
ASU,I-LEGISLATION/ACT
2009-05,O
),O
.,O
,O
ASU,I-LEGISLATION/ACT
2009-05,O
amends,O
the,O
Fair,I-MISCELLANEOUS
Value,I-MISCELLANEOUS
Measurements,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Disclosures,I-MISCELLANEOUS
Topic,O
of,O
the,O
FASB,I-LEGISLATION/ACT
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Codification,I-LEGISLATION/ACT
by,O
providing,O
additional,O
guidance,O
clarifying,O
the,O
measurement,O
of,O
liabilities,O
at,O
fair,O
value,O
.,O
,O
ASU,I-LEGISLATION/ACT
2009-05,O
is,O
effective,O
for,O
us,O
for,O
the,O
reporting,O
period,O
ending,O
December,O
31,O
",",O
2010,O
.,O
,O
We,O
do,O
not,O
expect,O
the,O
adoption,O
of,O
ASU,I-LEGISLATION/ACT
2009-05,O
to,O
have,O
an,O
impact,O
on,O
our,O
financial,O
statements,O
.,O
,O
In,O
October,O
2009,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
2009-15,O
",",O
Accounting,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Own-Share,I-MISCELLANEOUS
Lending,I-MISCELLANEOUS
Arrangements,I-MISCELLANEOUS
in,I-MISCELLANEOUS
Contemplation,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Convertible,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Issuance,I-MISCELLANEOUS
or,I-MISCELLANEOUS
Other,I-MISCELLANEOUS
Financing,I-MISCELLANEOUS
.,O
,O
This,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
amends,O
the,O
FASB,I-LEGISLATION/ACT
Accounting,I-LEGISLATION/ACT
Standard,I-LEGISLATION/ACT
Codification,I-LEGISLATION/ACT
for,O
EITF,I-LEGISLATION/ACT
09-1,O
.,O
,O
(,O
See,O
EITF,I-LEGISLATION/ACT
09-1,O
effective,O
date,O
below,O
),O
.,O
,O
NOTE,O
1,O
–,O
BASIS,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
PRESENTATION,I-MISCELLANEOUS
AND,I-MISCELLANEOUS
SUMMARY,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
SIGNIFICANT,I-MISCELLANEOUS
ACCOUNTING,I-MISCELLANEOUS
POLICIES,I-MISCELLANEOUS
(,O
continued,O
),O
,O
In,O
October,O
2009,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
2009-14,O
",",O
Software,I-MISCELLANEOUS
(,O
Topic,O
985,O
),O
:,O
Certain,I-MISCELLANEOUS
Revenue,I-MISCELLANEOUS
Arrangements,I-MISCELLANEOUS
That,I-MISCELLANEOUS
Include,I-MISCELLANEOUS
Software,I-MISCELLANEOUS
Elements,I-MISCELLANEOUS
.,O
,O
This,O
update,O
changed,O
the,O
accounting,O
model,O
for,O
revenue,O
arrangements,O
that,O
include,O
both,O
tangible,O
products,O
and,O
software,O
elements,O
.,O
,O
Effective,O
prospectively,O
for,O
revenue,O
arrangements,O
entered,O
into,O
or,O
materially,O
modified,O
in,O
fiscal,O
years,O
beginning,O
on,O
or,O
after,O
June,O
15,O
",",O
2010,O
.,O
,O
Early,O
adoption,O
is,O
permitted,O
.,O
,O
The,O
Company,O
does,O
not,O
expect,O
the,O
provisions,O
of,O
ASU,I-LEGISLATION/ACT
2009-14,O
to,O
have,O
a,O
material,O
effect,O
on,O
the,O
financial,O
position,O
",",O
results,O
of,O
operations,O
or,O
cash,O
flows,O
of,O
the,O
Company,O
.,O
,O
In,O
October,O
2009,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
2009-13,O
",",O
Revenue,I-MISCELLANEOUS
Recognition,I-MISCELLANEOUS
(,O
Topic,O
605,O
),O
:,O
Multiple-Deliverable,I-MISCELLANEOUS
Revenue,I-MISCELLANEOUS
Arrangements,I-MISCELLANEOUS
.,O
,O
This,O
update,O
addressed,O
the,O
accounting,O
for,O
multiple-deliverable,O
arrangements,O
to,O
enable,O
vendors,O
to,O
account,O
for,O
products,O
or,O
services,O
(,O
deliverables,O
),O
separately,O
rather,O
than,O
a,O
combined,O
unit,O
and,O
will,O
be,O
separated,O
in,O
more,O
circumstances,O
that,O
under,O
existing,O
US,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
.,O
,O
This,O
amendment,O
has,O
eliminated,O
that,O
residual,O
method,O
of,O
allocation,O
.,O
,O
Effective,O
prospectively,O
for,O
revenue,O
arrangements,O
entered,O
into,O
or,O
materially,O
modified,O
in,O
fiscal,O
years,O
beginning,O
on,O
or,O
after,O
June,O
15,O
",",O
2010,O
.,O
,O
Early,O
adoption,O
is,O
permitted,O
.,O
,O
The,O
Company,O
does,O
not,O
expect,O
the,O
provisions,O
of,O
ASU,I-LEGISLATION/ACT
2009-13,O
to,O
have,O
a,O
material,O
effect,O
on,O
the,O
financial,O
position,O
",",O
results,O
of,O
operations,O
or,O
cash,O
flows,O
of,O
the,O
Company,O
.,O
,O
In,O
December,O
2009,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
2009-17,O
",",O
Consolidations,I-MISCELLANEOUS
(,O
Topic,O
810,O
),O
:,O
Improvements,I-MISCELLANEOUS
to,I-MISCELLANEOUS
Financial,I-MISCELLANEOUS
Reporting,I-MISCELLANEOUS
by,I-MISCELLANEOUS
Enterprises,I-MISCELLANEOUS
Involved,I-MISCELLANEOUS
with,I-MISCELLANEOUS
Variable,I-MISCELLANEOUS
Interest,I-MISCELLANEOUS
Entities,I-MISCELLANEOUS
.,O
,O
This,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
amends,O
the,O
FASB,I-LEGISLATION/ACT
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Codification,I-LEGISLATION/ACT
for,O
Statement,O
167,O
.,O
,O
(,O
See,O
FAS,I-LEGISLATION/ACT
167,O
effective,O
date,O
below,O
),O
.,O
,O
In,O
December,O
2009,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
2009-16,O
",",O
Transfers,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Servicing,I-MISCELLANEOUS
(,O
Topic,O
860,O
),O
:,O
Accounting,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Transfers,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Financial,I-MISCELLANEOUS
Assets,I-MISCELLANEOUS
.,O
,O
This,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
amends,O
the,O
FASB,I-LEGISLATION/ACT
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Codification,I-LEGISLATION/ACT
for,O
Statement,O
166,O
.,O
,O
(,O
See,O
FAS,I-LEGISLATION/ACT
166,O
effective,O
date,O
below,O
),O
.,O
,O
In,O
January,O
2010,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
2010-02,O
",",O
Consolidation,I-MISCELLANEOUS
(,O
Topic,O
810,O
),O
:,O
Accounting,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Reporting,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Decreases,I-MISCELLANEOUS
in,I-MISCELLANEOUS
Ownership,I-MISCELLANEOUS
of,I-MISCELLANEOUS
a,I-MISCELLANEOUS
Subsidiary,I-MISCELLANEOUS
.,O
,O
This,O
amendment,O
to,O
Topic,O
810,O
clarifies,O
",",O
but,O
does,O
not,O
change,O
",",O
the,O
scope,O
of,O
current,O
US,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
.,O
,O
It,O
clarifies,O
the,O
decrease,O
in,O
ownership,O
provisions,O
of,O
Subtopic,O
810-10,O
and,O
removes,O
the,O
potential,O
conflict,O
between,O
guidance,O
in,O
that,O
Subtopic,O
and,O
asset,O
derecognition,O
and,O
gain,O
or,O
loss,O
recognition,O
guidance,O
that,O
may,O
exist,O
in,O
other,O
US,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
.,O
,O
An,O
entity,O
will,O
be,O
required,O
to,O
follow,O
the,O
amended,O
guidance,O
beginning,O
in,O
the,O
period,O
that,O
it,O
first,O
adopts,O
FAS,I-LEGISLATION/ACT
160,O
(,O
now,O
included,O
in,O
Subtopic,O
810-10,O
),O
.,O
,O
For,O
those,O
entities,O
that,O
have,O
already,O
adopted,O
FAS,I-LEGISLATION/ACT
160,O
",",O
the,O
amendments,O
are,O
effective,O
at,O
the,O
beginning,O
of,O
the,O
first,O
interim,O
or,O
annual,O
reporting,O
period,O
ending,O
on,O
or,O
after,O
December,O
15,O
",",O
2009,O
.,O
,O
The,O
amendments,O
should,O
be,O
applied,O
retrospectively,O
to,O
the,O
first,O
period,O
that,O
an,O
entity,O
adopted,O
FAS,I-LEGISLATION/ACT
160,O
.,O
,O
The,O
Company,O
does,O
not,O
expect,O
the,O
provisions,O
of,O
ASU,I-LEGISLATION/ACT
2010-02,O
to,O
have,O
a,O
material,O
effect,O
on,O
the,O
financial,O
position,O
",",O
results,O
of,O
operations,O
or,O
cash,O
flows,O
of,O
the,O
Company,O
.,O
,O
In,O
January,O
2010,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
2010-01,O
",",O
Equity,I-MISCELLANEOUS
(,O
Topic,O
505,O
),O
:,O
Accounting,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Distributions,I-MISCELLANEOUS
to,I-MISCELLANEOUS
Shareholders,I-MISCELLANEOUS
with,I-MISCELLANEOUS
Components,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Cash,I-MISCELLANEOUS
(,O
A,O
Consensus,O
of,O
the,O
FASB,I-GOVERNMENT
Emerging,I-GOVERNMENT
Issues,I-GOVERNMENT
Task,I-GOVERNMENT
Force,I-GOVERNMENT
),O
.,O
,O
This,O
amendment,O
to,O
Topic,O
505,O
clarifies,O
the,O
stock,O
portion,O
of,O
a,O
distribution,O
to,O
shareholders,O
that,O
allows,O
them,O
to,O
elect,O
to,O
receive,O
cash,O
or,O
stock,O
with,O
a,O
limit,O
on,O
the,O
amount,O
of,O
cash,O
that,O
will,O
be,O
distributed,O
is,O
not,O
a,O
stock,O
dividend,O
for,O
purposes,O
of,O
applying,O
Topics,O
505,O
and,O
260,O
.,O
,O
Effective,O
for,O
interim,O
and,O
annual,O
periods,O
ending,O
on,O
or,O
after,O
December,O
15,O
",",O
2009,O
",",O
and,O
would,O
be,O
applied,O
on,O
a,O
retrospective,O
basis,O
.,O
,O
The,O
Company,O
does,O
not,O
expect,O
the,O
provisions,O
of,O
ASU,I-LEGISLATION/ACT
2010-01,O
to,O
have,O
a,O
material,O
effect,O
on,O
the,O
financial,O
position,O
",",O
results,O
of,O
operations,O
or,O
cash,O
flows,O
of,O
the,O
Company,O
.,O
,O
NOTE,O
1,O
–,O
BASIS,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
PRESENTATION,I-MISCELLANEOUS
AND,I-MISCELLANEOUS
SUMMARY,I-MISCELLANEOUS
OF,I-MISCELLANEOUS
SIGNIFICANT,I-MISCELLANEOUS
ACCOUNTING,I-MISCELLANEOUS
POLICIES,I-MISCELLANEOUS
(,O
continued,O
),O
,O
In,O
February,O
2010,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
ASU,I-LEGISLATION/ACT
2010-09,O
",",O
which,O
addresses,O
certain,O
implementation,O
issues,O
related,O
to,O
an,O
entity,O
’,O
s,O
requirement,O
to,O
perform,O
and,O
disclose,O
subsequent,O
events,O
procedures,O
.,O
,O
The,O
ASU,I-LEGISLATION/ACT
(,O
i,O
),O
exempts,O
entities,O
that,O
file,O
their,O
financial,O
statements,O
with,O
",",O
or,O
furnish,O
them,O
to,O
",",O
the,O
Commission,O
from,O
disclosing,O
the,O
date,O
through,O
which,O
subsequent,O
events,O
procedures,O
have,O
been,O
performed,O
and,O
(,O
ii,O
),O
clarifies,O
the,O
circumstances,O
in,O
which,O
an,O
entity,O
’,O
s,O
financial,O
statements,O
would,O
be,O
considered,O
restated,O
and,O
in,O
which,O
the,O
entity,O
would,O
therefore,O
be,O
required,O
to,O
update,O
its,O
subsequent,O
events,O
evaluation,O
since,O
the,O
originally,O
issued,O
or,O
available,O
to,O
be,O
issued,O
financial,O
statements,O
.,O
,O
ASU,I-LEGISLATION/ACT
2010-09,O
became,O
effective,O
immediately,O
upon,O
issuance,O
",",O
and,O
the,O
Company,O
adopted,O
its,O
disclosure,O
requirements,O
within,O
the,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
In,O
April,O
2010,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
ASU,I-LEGISLATION/ACT
2010-17,O
Revenue,I-MISCELLANEOUS
Recognition,I-MISCELLANEOUS
–,I-MISCELLANEOUS
Milestone,I-MISCELLANEOUS
Method,I-MISCELLANEOUS
(,O
Topic,O
605,O
),O
:,O
Milestone,I-MISCELLANEOUS
Method,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Revenue,I-MISCELLANEOUS
Recognition,I-MISCELLANEOUS
(,O
“,O
ASU,I-LEGISLATION/ACT
2010-17,O
”,O
),O
.,O
,O
ASU,I-LEGISLATION/ACT
2010-17,O
provides,O
guidance,O
on,O
defining,O
a,O
milestone,O
and,O
determining,O
when,O
it,O
may,O
be,O
appropriate,O
to,O
apply,O
the,O
milestone,O
method,O
of,O
revenue,O
recognition,O
for,O
research,O
or,O
development,O
transactions,O
.,O
,O
Consideration,O
that,O
is,O
contingent,O
on,O
achievement,O
of,O
a,O
milestone,O
in,O
its,O
entirety,O
may,O
be,O
recognized,O
as,O
revenue,O
in,O
the,O
period,O
in,O
which,O
the,O
milestone,O
is,O
achieved,O
only,O
if,O
the,O
milestone,O
is,O
judged,O
to,O
meet,O
certain,O
criteria,O
to,O
be,O
considered,O
substantive,O
.,O
,O
Milestones,O
should,O
be,O
considered,O
substantive,O
in,O
their,O
entirety,O
and,O
may,O
not,O
be,O
bifurcated,O
.,O
,O
An,O
arrangement,O
may,O
contain,O
both,O
substantive,O
and,O
nonsubstantive,O
milestones,O
",",O
and,O
each,O
milestone,O
should,O
be,O
evaluated,O
individually,O
to,O
determine,O
if,O
it,O
is,O
substantive,O
.,O
,O
ASU,I-LEGISLATION/ACT
2010-17,O
is,O
effective,O
on,O
a,O
prospective,O
basis,O
for,O
milestones,O
achieved,O
in,O
fiscal,O
years,O
",",O
and,O
interim,O
periods,O
within,O
those,O
years,O
",",O
beginning,O
on,O
or,O
after,O
June,O
15,O
",",O
2010,O
",",O
with,O
early,O
adoption,O
permitted,O
.,O
,O
We,O
adopted,O
this,O
guidance,O
effective,O
for,O
the,O
quarter,O
ending,O
June,O
30,O
",",O
2010,O
and,O
it,O
did,O
not,O
have,O
a,O
material,O
impact,O
on,O
our,O
consolidated,O
financial,O
statements,O
.,O
,O
In,O
July,O
2010,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
ASU,I-LEGISLATION/ACT
No.,O
2010-20,O
",",O
Receivables,I-MISCELLANEOUS
(,O
Topic,O
310,O
),O
:,O
Disclosures,I-MISCELLANEOUS
about,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Credit,I-MISCELLANEOUS
Quality,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Financing,I-MISCELLANEOUS
Receivables,I-MISCELLANEOUS
and,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Allowance,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Credit,I-MISCELLANEOUS
Losses,I-MISCELLANEOUS
.,O
,O
ASU,I-LEGISLATION/ACT
2010-20,O
requires,O
additional,O
disclosures,O
about,O
the,O
credit,O
quality,O
of,O
a,O
company,O
’,O
s,O
loans,O
and,O
the,O
allowance,O
for,O
loan,O
losses,O
held,O
against,O
those,O
loans,O
.,O
,O
Company,O
will,O
need,O
to,O
disaggregate,O
new,O
and,O
existing,O
disclosures,O
based,O
on,O
how,O
it,O
develops,O
its,O
allowance,O
for,O
loan,O
losses,O
and,O
how,O
it,O
manages,O
credit,O
exposures,O
.,O
,O
Additional,O
disclosure,O
is,O
also,O
required,O
about,O
the,O
credit,O
quality,O
indicators,O
of,O
loans,O
by,O
class,O
at,O
the,O
end,O
of,O
the,O
reporting,O
period,O
",",O
the,O
aging,O
of,O
the,O
past,O
due,O
loans,O
",",O
information,O
about,O
troubled,O
debt,O
restructurings,O
",",O
and,O
significant,O
purchases,O
and,O
sales,O
of,O
loans,O
during,O
the,O
reporting,O
period,O
by,O
class,O
.,O
,O
The,O
new,O
guidance,O
is,O
effective,O
for,O
interim,O
and,O
annual,O
periods,O
beginning,O
after,O
December,O
15,O
",",O
2010,O
.,O
,O
The,O
Company,O
anticipates,O
that,O
adoption,O
of,O
these,O
additional,O
disclosures,O
will,O
not,O
have,O
a,O
material,O
effect,O
on,O
its,O
financial,O
position,O
of,O
results,O
of,O
operations,O
.,O
,O
Other,O
accounting,O
standards,O
that,O
have,O
been,O
issued,O
or,O
proposed,O
by,O
FASB,I-GOVERNMENT
that,O
do,O
not,O
require,O
adoption,O
until,O
a,O
future,O
date,O
are,O
not,O
expected,O
to,O
have,O
a,O
material,O
impact,O
on,O
the,O
consolidated,O
financial,O
statements,O
upon,O
adoption,O
.,O
,O
The,O
Company,O
has,O
classified,O
its,O
former,O
telesales,O
call,O
center,O
and,O
external,O
(,O
ISG,O
),O
agent,O
produced,O
agency,O
business,O
(,O
the,O
“,O
Agency,O
Business,O
”,O
),O
",",O
its,O
former,O
Insurint,O
business,O
",",O
and,O
its,O
leased,O
offices,O
located,O
in,O
New,I-LOCATION
York,I-LOCATION
and,O
Florida,I-LOCATION
as,O
discontinued,O
operations,O
.,O
,O
The,O
financial,O
position,O
of,O
discontinued,O
operations,O
was,O
as,O
follows,O
:,O
,O
The,O
results,O
of,O
discontinued,O
operations,O
were,O
as,O
follows,O
:,O
,O
On,O
February,O
20,O
",",O
2009,O
",",O
the,O
Company,O
entered,O
into,O
and,O
completed,O
the,O
sale,O
of,O
the,O
Agency,O
Business,O
to,O
eHealth,I-BUSINESS
Insurance,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
an,O
unaffiliated,O
third,O
party,O
",",O
pursuant,O
to,O
the,O
terms,O
of,O
a,O
Client,O
Transition,O
Agreement,O
(,O
the,O
“,O
Agreement,O
”,O
),O
.,O
,O
Property,O
and,O
equipment,O
consisted,O
of,O
the,O
following,O
:,O
,O
For,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
and,O
2010,O
",",O
depreciation,O
expense,O
was,O
$,O
"95,034",O
and,O
$,O
"93,004",O
",",O
respectively,O
.,O
,O
Intangible,O
assets,O
consisted,O
of,O
the,O
following,O
:,O
,O
For,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
and,O
2010,O
",",O
amortization,O
expense,O
was,O
$,O
"86,684",O
and,O
$,O
"138,807",O
respectively,O
.,O
,O
Amortization,O
expense,O
subsequent,O
to,O
the,O
period,O
ended,O
March,O
31,O
",",O
2011,O
is,O
as,O
follows,O
:,O
,O
During,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
"425,000",O
options,O
previously,O
granted,O
to,O
Warren,I-PERSON
Musser,I-PERSON
",",O
the,O
vice,O
chairman,O
of,O
the,O
Company,O
’,O
s,O
board,O
of,O
directors,O
",",O
expired,O
in,O
accordance,O
with,O
the,O
terms,O
of,O
the,O
stock,O
options,O
.,O
,O
The,O
Company,O
recorded,O
compensation,O
expense,O
pertaining,O
to,O
director,O
and,O
employee,O
stock,O
options,O
as,O
follows,O
:,O
,O
A,O
summary,O
of,O
the,O
Company,O
's,O
outstanding,O
stock,O
options,O
as,O
of,O
and,O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
are,O
as,O
follows,O
:,O
,O
NOTE,O
5,O
–,O
SHAREHOLDERS,I-MISCELLANEOUS
’,I-MISCELLANEOUS
EQUITY,I-MISCELLANEOUS
(,O
continued,O
),O
,O
The,O
following,O
information,O
applies,O
to,O
options,O
outstanding,O
at,O
March,O
31,O
",",O
2011,O
:,O
,O
As,O
of,O
March,O
31,O
",",O
2011,O
",",O
there,O
were,O
"30,000,000",O
shares,O
of,O
our,O
common,O
stock,O
authorized,O
to,O
be,O
issued,O
under,O
the,O
Company,O
’,O
s,O
2010,O
Equity,O
Compensation,O
Plan,O
",",O
of,O
which,O
"22,406,980",O
shares,O
of,O
our,O
common,O
stock,O
remain,O
available,O
for,O
future,O
stock,O
option,O
grants,O
.,O
,O
The,O
total,O
intrinsic,O
value,O
of,O
stock,O
options,O
outstanding,O
and,O
exercisable,O
as,O
of,O
March,O
31,O
",",O
2011,O
was,O
$,O
0,O
.,O
,O
The,O
value,O
of,O
equity,O
compensation,O
expense,O
not,O
yet,O
expensed,O
pertaining,O
to,O
unvested,O
equity,O
compensation,O
was,O
$,O
"180,383",O
as,O
of,O
March,O
31,O
",",O
2011,O
",",O
which,O
will,O
be,O
recognized,O
over,O
a,O
weighted,O
average,O
4.5,O
years,O
in,O
the,O
future,O
.,O
,O
NOTE,O
5,O
–,O
SHAREHOLDERS,I-MISCELLANEOUS
’,I-MISCELLANEOUS
EQUITY,I-MISCELLANEOUS
(,O
continued,O
),O
,O
On,O
January,O
10,O
",",O
2011,O
",",O
warrants,O
to,O
purchase,O
"1,175,000",O
shares,O
of,O
the,O
Company,O
’,O
s,O
common,O
stock,O
at,O
an,O
exercise,O
price,O
of,O
$,O
1.50,O
per,O
share,O
expired,O
in,O
accordance,O
with,O
the,O
terms,O
of,O
the,O
warrants,O
.,O
,O
A,O
summary,O
of,O
the,O
status,O
of,O
the,O
Company,O
's,O
outstanding,O
common,O
stock,O
warrants,O
as,O
of,O
and,O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
are,O
as,O
follows,O
:,O
,O
The,O
following,O
information,O
applies,O
to,O
common,O
stock,O
warrants,O
outstanding,O
at,O
March,O
31,O
",",O
2011,O
:,O
,O
NOTE,O
5,O
–,O
SHAREHOLDERS,I-MISCELLANEOUS
’,I-MISCELLANEOUS
EQUITY,I-MISCELLANEOUS
(,O
continued,O
),O
,O
A,O
summary,O
of,O
the,O
status,O
of,O
the,O
Company,O
's,O
outstanding,O
preferred,O
stock,O
warrants,O
as,O
of,O
and,O
for,O
the,O
period,O
ended,O
March,O
31,O
",",O
2011,O
are,O
as,O
follows,O
:,O
,O
Outstanding,O
preferred,O
stock,O
warrants,O
at,O
March,O
31,O
",",O
2011,O
have,O
a,O
remaining,O
contractual,O
life,O
of,O
4.4,O
years,O
.,O
,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
has,O
entered,O
into,O
several,O
capital,O
lease,O
obligations,O
to,O
purchase,O
equipment,O
used,O
for,O
operations,O
.,O
,O
The,O
Company,O
has,O
the,O
option,O
to,O
purchase,O
the,O
equipment,O
at,O
the,O
end,O
of,O
the,O
lease,O
agreement,O
for,O
one,O
dollar,O
.,O
,O
The,O
underlying,O
assets,O
and,O
related,O
depreciation,O
were,O
included,O
in,O
the,O
appropriate,O
fixed,O
asset,O
category,O
",",O
and,O
related,O
depreciation,O
account,O
.,O
,O
Property,O
and,O
equipment,O
includes,O
the,O
following,O
amounts,O
for,O
leases,O
that,O
have,O
been,O
capitalized,O
as,O
of,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
:,O
,O
Future,O
minimum,O
payments,O
required,O
under,O
capital,O
leases,O
at,O
March,O
31,O
",",O
2011,O
are,O
as,O
follows,O
:,O
,O
The,O
Company,O
implemented,O
a,O
401,O
(,O
k,O
),O
plan,O
on,O
January,O
1,O
",",O
2007,O
.,O
,O
Eligible,O
employees,O
contribute,O
to,O
the,O
401,O
(,O
k,O
),O
plan,O
.,O
,O
Employees,O
become,O
eligible,O
after,O
attaining,O
age,O
19,O
and,O
after,O
6,O
months,O
of,O
employment,O
with,O
the,O
Company,O
.,O
,O
The,O
employee,O
may,O
become,O
a,O
participant,O
of,O
the,O
401,O
(,O
k,O
),O
plan,O
on,O
the,O
first,O
day,O
of,O
the,O
month,O
following,O
the,O
completion,O
of,O
the,O
eligibility,O
requirements,O
.,O
,O
Effective,O
January,O
1,O
",",O
2007,O
the,O
Company,O
implemented,O
an,O
elective,O
contribution,O
to,O
the,O
plan,O
of,O
25,O
%,O
of,O
the,O
employee,O
’,O
s,O
contribution,O
up,O
to,O
4,O
%,O
of,O
the,O
employee,O
’,O
s,O
contribution,O
(,O
the,O
“,O
Contribution,O
”,O
),O
.,O
,O
The,O
Contributions,O
are,O
subject,O
to,O
a,O
vesting,O
schedule,O
and,O
become,O
fully,O
vested,O
after,O
one,O
year,O
of,O
service,O
",",O
retirement,O
",",O
death,O
or,O
disability,O
",",O
whichever,O
occurs,O
first,O
.,O
,O
The,O
Company,O
made,O
contributions,O
of,O
$,O
"11,633",O
and,O
$,O
"10,024",O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
and,O
2010,O
.,O
,O
On,O
January,O
4,O
",",O
2011,O
",",O
the,O
Company,O
and,O
FG2200,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
agreed,O
to,O
amend,O
their,O
lease,O
whereby,O
the,O
Company,O
paid,O
to,O
FG2200,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
$,O
"16,300",O
as,O
consideration,O
to,O
shorten,O
the,O
expiration,O
of,O
the,O
lease,O
to,O
February,O
28,O
",",O
2011,O
",",O
and,O
to,O
amend,O
the,O
security,O
deposit,O
provisions,O
of,O
the,O
lease,O
.,O
,O
The,O
amendment,O
amended,O
the,O
security,O
deposit,O
whereby,O
the,O
Company,O
’,O
s,O
existing,O
$,O
"1,000,000",O
letter,O
of,O
credit,O
",",O
which,O
served,O
as,O
the,O
security,O
deposit,O
for,O
the,O
lease,O
",",O
expired,O
on,O
January,O
14,O
",",O
2011,O
",",O
and,O
was,O
replaced,O
by,O
a,O
$,O
"160,300",O
cash,O
payment,O
from,O
the,O
Company,O
to,O
FG2200,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
which,O
consisted,O
of,O
$,O
"16,300",O
consideration,O
for,O
amending,O
the,O
Lease,O
and,O
a,O
$,O
"150,000",O
security,O
deposit,O
.,O
,O
NOTE,O
8,O
–,O
RESTRICTED,I-MISCELLANEOUS
CASH,I-MISCELLANEOUS
",",I-MISCELLANEOUS
COMMITMENTS,I-MISCELLANEOUS
AND,I-MISCELLANEOUS
CONTINGENCIES,I-MISCELLANEOUS
(,O
continued,O
),O
,O
On,O
January,O
14,O
",",O
2011,O
",",O
the,O
Company,O
’,O
s,O
$,O
"1,000,000",O
letter,O
of,O
credit,O
was,O
terminated,O
by,O
the,O
issuing,O
bank,O
at,O
the,O
request,O
of,O
the,O
Company,O
and,O
the,O
restrictions,O
on,O
the,O
restricted,O
cash,O
",",O
which,O
served,O
as,O
collateral,O
and,O
was,O
included,O
in,O
restricted,O
cash,O
",",O
were,O
eliminated,O
on,O
that,O
date,O
.,O
,O
On,O
February,O
5,O
",",O
2011,O
",",O
the,O
Company,O
’,O
s,O
$,O
"151,503",O
letter,O
of,O
credit,O
was,O
terminated,O
by,O
the,O
issuing,O
bank,O
at,O
the,O
request,O
of,O
the,O
Company,O
and,O
the,O
restrictions,O
on,O
the,O
restricted,O
cash,O
",",O
which,O
served,O
as,O
collateral,O
and,O
was,O
included,O
in,O
restricted,O
cash,O
",",O
were,O
eliminated,O
on,O
that,O
date,O
.,O
,O
The,O
Company,O
leases,O
certain,O
real,O
and,O
personal,O
property,O
under,O
non-cancelable,O
operating,O
leases,O
.,O
,O
Rent,O
expense,O
was,O
$,O
"255,783",O
and,O
$,O
"311,794",O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
and,O
2010,O
",",O
respectively,O
.,O
,O
Management,O
has,O
evaluated,O
the,O
effects,O
of,O
all,O
events,O
subsequent,O
to,O
March,O
31,O
",",O
2011,O
through,O
the,O
date,O
which,O
the,O
financial,O
statements,O
were,O
available,O
to,O
be,O
issued,O
and,O
has,O
concluded,O
that,O
all,O
events,O
requiring,O
adjustment,O
to,O
or,O
disclosure,O
in,O
the,O
financial,O
statements,O
have,O
been,O
made,O
.,O
,O
Certain,O
of,O
the,O
statements,O
contained,O
in,O
this,O
Quarterly,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
",",O
including,O
in,O
the,O
“,O
Management,O
’,O
s,O
Discussion,O
and,O
Analysis,O
or,O
Plan,O
of,O
Operation,O
(,O
“,O
MD,O
&,O
A,O
”,O
),O
and,O
elsewhere,O
in,O
this,O
report,O
are,O
“,O
forward-looking,O
statements,O
”,O
within,O
the,O
meaning,O
of,O
Section,O
27A,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
and,O
Section,O
21E,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
“,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
”,O
),O
.,O
,O
These,O
statements,O
are,O
based,O
on,O
management,O
’,O
s,O
current,O
expectations,O
and,O
are,O
subject,O
to,O
uncertainty,O
and,O
changes,O
in,O
circumstances,O
.,O
,O
Actual,O
results,O
may,O
vary,O
materially,O
from,O
the,O
expectations,O
contained,O
in,O
the,O
forward-looking,O
statements,O
.,O
,O
The,O
forward-looking,O
statements,O
herein,O
include,O
",",O
among,O
others,O
",",O
statements,O
addressing,O
management,O
’,O
s,O
views,O
with,O
respect,O
to,O
future,O
financial,O
and,O
operating,O
results,O
and,O
costs,O
associated,O
with,O
the,O
Company,O
’,O
s,O
operations,O
and,O
other,O
similar,O
statements,O
.,O
,O
Various,O
factors,O
",",O
including,O
competitive,O
pressures,O
",",O
market,O
interest,O
rates,O
",",O
changes,O
in,O
insurance,O
carrier,O
mix,O
",",O
regulatory,O
changes,O
",",O
customer,O
and,O
insurance,O
carrier,O
defaults,O
or,O
insolvencies,O
",",O
acquisition,O
of,O
businesses,O
that,O
do,O
not,O
perform,O
as,O
we,O
expect,O
or,O
that,O
are,O
difficult,O
for,O
us,O
to,O
integrate,O
or,O
control,O
",",O
adverse,O
resolution,O
of,O
any,O
contract,O
or,O
other,O
disputes,O
with,O
customers,O
and,O
insurance,O
carriers,O
",",O
or,O
the,O
loss,O
of,O
one,O
or,O
more,O
key,O
insurance,O
carrier,O
relationships,O
",",O
could,O
cause,O
actual,O
outcomes,O
and,O
results,O
to,O
differ,O
materially,O
from,O
those,O
described,O
in,O
forward-looking,O
statements,O
.,O
,O
The,O
words,O
“,O
may,O
",",O
”,O
“,O
will,O
",",O
”,O
“,O
expect,O
",",O
”,O
“,O
intend,O
",",O
”,O
“,O
anticipate,O
",",O
”,O
“,O
estimate,O
",",O
”,O
“,O
believe,O
",",O
”,O
“,O
continue,O
”,O
and,O
similar,O
expressions,O
may,O
identify,O
forward-looking,O
statements,O
",",O
but,O
the,O
absence,O
of,O
these,O
words,O
does,O
not,O
necessarily,O
mean,O
that,O
a,O
statement,O
is,O
not,O
forward-looking,O
.,O
,O
While,O
we,O
believe,O
that,O
we,O
have,O
a,O
reasonable,O
basis,O
for,O
each,O
forward-looking,O
statement,O
contained,O
in,O
this,O
Quarterly,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
",",O
we,O
caution,O
you,O
that,O
these,O
statements,O
are,O
based,O
on,O
a,O
combination,O
of,O
facts,O
and,O
factors,O
currently,O
known,O
by,O
us,O
and,O
projections,O
of,O
the,O
future,O
about,O
which,O
we,O
can,O
not,O
be,O
certain,O
.,O
,O
Many,O
factors,O
",",O
including,O
general,O
business,O
and,O
economic,O
conditions,O
and,O
the,O
risks,O
and,O
uncertainties,O
described,O
in,O
the,O
“,O
Risk,O
Factors,O
”,O
section,O
of,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
fiscal,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
affect,O
our,O
ability,O
to,O
achieve,O
our,O
objectives,O
.,O
,O
As,O
a,O
result,O
of,O
these,O
factors,O
",",O
we,O
can,O
not,O
assure,O
you,O
that,O
the,O
forward-looking,O
statements,O
in,O
this,O
Quarterly,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
will,O
prove,O
to,O
be,O
accurate,O
.,O
,O
In,O
addition,O
",",O
if,O
our,O
forward-looking,O
statements,O
prove,O
to,O
be,O
inaccurate,O
",",O
the,O
inaccuracy,O
may,O
be,O
material,O
.,O
,O
In,O
light,O
of,O
the,O
significant,O
uncertainties,O
in,O
these,O
forward-looking,O
statements,O
",",O
you,O
should,O
not,O
regard,O
these,O
statements,O
as,O
a,O
representation,O
or,O
warranty,O
by,O
us,O
or,O
any,O
other,O
person,O
that,O
we,O
will,O
achieve,O
our,O
objectives,O
and,O
plans,O
in,O
any,O
specified,O
time,O
frame,O
",",O
if,O
at,O
all,O
.,O
,O
We,O
may,O
not,O
update,O
these,O
forward-looking,O
statements,O
",",O
even,O
though,O
our,O
situation,O
may,O
change,O
in,O
the,O
future,O
.,O
,O
We,O
qualify,O
all,O
the,O
forward-looking,O
statements,O
contained,O
in,O
this,O
Quarterly,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
by,O
the,O
foregoing,O
cautionary,O
statements,O
.,O
,O
The,O
current,O
operations,O
of,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
Corporation,I-BUSINESS
(,O
the,O
“,O
Company,O
”,O
",",O
“,O
we,O
”,O
",",O
“,O
us,O
”,O
or,O
“,O
our,O
”,O
),O
consist,O
of,O
our,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
subsidiary,O
(,O
“,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
”,O
),O
.,O
,O
InsPro,I-MISCELLANEOUS
is,O
a,O
comprehensive,O
",",O
web-based,O
insurance,O
administration,O
software,O
application,O
.,O
,O
InsPro,I-MISCELLANEOUS
was,O
introduced,O
by,O
Atiam,I-BUSINESS
Technologies,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
(,O
now,O
our,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
subsidiary,O
),O
in,O
2004,O
.,O
,O
InsPro,I-MISCELLANEOUS
clients,O
include,O
health,O
insurance,O
carriers,O
and,O
third,O
party,O
administrators,O
.,O
,O
Unlike,O
our,O
Insurint,O
platform,O
",",O
we,O
market,O
InsPro,I-MISCELLANEOUS
as,O
a,O
licensed,O
software,O
application,O
",",O
and,O
we,O
realize,O
revenue,O
from,O
the,O
sale,O
of,O
the,O
software,O
licenses,O
",",O
application,O
service,O
provider,O
fees,O
",",O
software,O
maintenance,O
fees,O
and,O
professional,O
services,O
.,O
,O
Financial,I-LEGISLATION/ACT
Reporting,I-LEGISLATION/ACT
Release,I-LEGISLATION/ACT
No.,O
60,O
",",O
which,O
was,O
released,O
by,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
the,O
“,O
Commission,O
”,O
),O
",",O
encourages,O
all,O
companies,O
to,O
include,O
a,O
discussion,O
of,O
critical,O
accounting,O
policies,O
or,O
methods,O
used,O
in,O
the,O
preparation,O
of,O
financial,O
statements,O
.,O
,O
Our,O
consolidated,O
financial,O
statements,O
include,O
a,O
summary,O
of,O
the,O
significant,O
accounting,O
policies,O
and,O
methods,O
used,O
in,O
the,O
preparation,O
of,O
the,O
consolidated,O
financial,O
statements,O
.,O
,O
Management,O
believes,O
the,O
following,O
critical,O
accounting,O
policies,O
affect,O
the,O
significant,O
judgments,O
and,O
estimates,O
used,O
in,O
the,O
preparation,O
of,O
the,O
consolidated,O
financial,O
statements,O
.,O
,O
Use,O
of,O
Estimates,O
-,O
Management,O
's,O
Discussion,O
and,O
Analysis,O
or,O
Plan,O
of,O
Operation,O
is,O
based,O
upon,O
the,O
Company,O
’,O
s,O
consolidated,O
financial,O
statements,O
",",O
which,O
have,O
been,O
prepared,O
in,O
accordance,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
.,O
,O
The,O
preparation,O
of,O
these,O
consolidated,O
financial,O
statements,O
requires,O
our,O
management,O
to,O
make,O
estimates,O
and,O
judgments,O
that,O
affect,O
the,O
reported,O
amounts,O
of,O
assets,O
",",O
liabilities,O
",",O
revenues,O
",",O
and,O
expenses,O
",",O
and,O
related,O
disclosure,O
of,O
contingent,O
assets,O
and,O
liabilities,O
.,O
,O
On,O
an,O
ongoing,O
basis,O
",",O
management,O
evaluates,O
these,O
estimates,O
",",O
including,O
those,O
related,O
to,O
allowances,O
for,O
doubtful,O
accounts,O
receivable,O
and,O
long-lived,O
assets,O
such,O
as,O
intangible,O
assets,O
.,O
,O
Management,O
bases,O
these,O
estimates,O
on,O
historical,O
experience,O
and,O
on,O
various,O
other,O
assumptions,O
that,O
are,O
believed,O
to,O
be,O
reasonable,O
under,O
the,O
circumstances,O
",",O
the,O
results,O
of,O
which,O
form,O
the,O
basis,O
of,O
making,O
judgments,O
about,O
the,O
carrying,O
value,O
of,O
assets,O
and,O
liabilities,O
that,O
are,O
not,O
readily,O
apparent,O
from,O
other,O
sources,O
.,O
,O
Significant,O
estimates,O
in,O
2011,O
and,O
2010,O
include,O
the,O
allowance,O
for,O
doubtful,O
accounts,O
",",O
stock-based,O
compensation,O
",",O
the,O
useful,O
lives,O
of,O
property,O
and,O
equipment,O
and,O
intangible,O
assets,O
",",O
accrued,O
expenses,O
pertaining,O
to,O
abandoned,O
facilities,O
",",O
warrant,O
liability,O
and,O
revenue,O
recognition,O
.,O
,O
Actual,O
results,O
may,O
differ,O
from,O
these,O
estimates,O
under,O
different,O
assumptions,O
or,O
conditions,O
.,O
,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
offers,O
InsPro,I-MISCELLANEOUS
on,O
a,O
licensed,O
and,O
an,O
application,O
service,O
provider,O
(,O
“,O
ASP,O
”,O
),O
basis,O
.,O
,O
An,O
InsPro,I-MISCELLANEOUS
software,O
license,O
entitles,O
the,O
purchaser,O
a,O
perpetual,O
license,O
to,O
a,O
copy,O
of,O
the,O
InsPro,I-MISCELLANEOUS
software,O
installed,O
at,O
a,O
single,O
client,O
location,O
",",O
which,O
may,O
be,O
used,O
to,O
drive,O
a,O
production,O
and,O
model,O
office,O
instance,O
of,O
the,O
application,O
.,O
,O
The,O
ASP,O
hosting,O
service,O
enables,O
a,O
client,O
to,O
lease,O
the,O
InsPro,I-MISCELLANEOUS
software,O
",",O
paying,O
only,O
for,O
that,O
capacity,O
required,O
to,O
support,O
their,O
business,O
.,O
,O
ASP,O
clients,O
access,O
an,O
instance,O
of,O
InsPro,I-MISCELLANEOUS
installed,O
on,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
’,O
servers,O
located,O
at,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
’,O
offices,O
or,O
at,O
a,O
third,O
party,O
’,O
s,O
site,O
.,O
,O
Software,O
maintenance,O
fees,O
apply,O
to,O
both,O
licensed,O
and,O
ASP,O
clients,O
.,O
,O
Maintenance,O
fees,O
cover,O
periodic,O
updates,O
to,O
the,O
application,O
and,O
the,O
InsPro,I-MISCELLANEOUS
Help,O
Desk,O
.,O
,O
Professional,O
services,O
are,O
generally,O
associated,O
with,O
the,O
implementation,O
of,O
an,O
InsPro,I-MISCELLANEOUS
instance,O
for,O
either,O
an,O
ASP,O
or,O
licensed,O
client,O
",",O
and,O
cover,O
such,O
activity,O
as,O
InsPro,O
installation,O
",",O
configuration,O
",",O
modification,O
of,O
InsPro,O
functionality,O
",",O
client,O
insurance,O
plan,O
set-up,O
",",O
client,O
insurance,O
document,O
design,O
and,O
system,O
documentation,O
.,O
,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
revenue,O
is,O
generally,O
recognized,O
under,O
ASC,I-LEGISLATION/ACT
985-605,O
.,O
,O
For,O
software,O
arrangements,O
involving,O
multiple,O
elements,O
",",O
we,O
allocate,O
revenue,O
to,O
each,O
element,O
based,O
on,O
the,O
relative,O
fair,O
value,O
or,O
the,O
residual,O
method,O
",",O
as,O
applicable,O
using,O
vendor,O
specific,O
objective,O
evidence,O
to,O
determine,O
fair,O
value,O
",",O
which,O
is,O
based,O
on,O
prices,O
charged,O
when,O
the,O
element,O
is,O
sold,O
separately,O
.,O
,O
Software,O
revenue,O
accounted,O
for,O
under,O
ASC,I-LEGISLATION/ACT
985-605,O
is,O
recognized,O
when,O
persuasive,O
evidence,O
of,O
an,O
arrangement,O
exists,O
",",O
the,O
software,O
is,O
delivered,O
in,O
accordance,O
with,O
all,O
terms,O
and,O
conditions,O
of,O
the,O
customer,O
contracts,O
",",O
the,O
fee,O
is,O
fixed,O
or,O
determinable,O
and,O
collectibility,O
is,O
probable,O
.,O
,O
Revenue,O
related,O
to,O
post-contract,O
customer,O
support,O
(,O
“,O
PCS,O
”,O
),O
",",O
including,O
technical,O
support,O
and,O
unspecified,O
when-and-if,O
available,O
software,O
upgrades,O
",",O
is,O
recognized,O
ratably,O
over,O
the,O
PCS,O
term,O
.,O
,O
Under,O
ASC,I-LEGISLATION/ACT
985-605,O
",",O
if,O
fair,O
value,O
does,O
not,O
exist,O
for,O
any,O
undelivered,O
element,O
",",O
revenue,O
is,O
not,O
recognized,O
until,O
the,O
earlier,O
of,O
(,O
i,O
),O
delivery,O
of,O
such,O
element,O
or,O
(,O
ii,O
),O
when,O
fair,O
value,O
of,O
the,O
undelivered,O
element,O
is,O
established,O
",",O
unless,O
the,O
undelivered,O
element,O
is,O
a,O
service,O
",",O
in,O
which,O
case,O
revenue,O
is,O
recognized,O
as,O
the,O
service,O
is,O
performed,O
once,O
the,O
service,O
is,O
the,O
only,O
undelivered,O
element,O
.,O
,O
We,O
recognize,O
revenues,O
from,O
software,O
license,O
agreements,O
when,O
persuasive,O
evidence,O
of,O
an,O
agreement,O
exists,O
",",O
delivery,O
of,O
the,O
software,O
has,O
occurred,O
",",O
the,O
fee,O
is,O
fixed,O
or,O
determinable,O
",",O
and,O
collectibility,O
is,O
probable,O
.,O
,O
We,O
consider,O
fees,O
relating,O
to,O
arrangements,O
with,O
payment,O
terms,O
extending,O
beyond,O
one,O
year,O
to,O
not,O
be,O
fixed,O
or,O
determinable,O
and,O
revenue,O
for,O
these,O
arrangements,O
is,O
recognized,O
as,O
payments,O
become,O
due,O
from,O
the,O
customer,O
.,O
,O
In,O
software,O
arrangements,O
that,O
include,O
more,O
than,O
one,O
InsPro,I-MISCELLANEOUS
module,O
",",O
we,O
allocate,O
the,O
total,O
arrangement,O
fee,O
among,O
the,O
modules,O
based,O
on,O
the,O
relative,O
fair,O
value,O
of,O
each,O
of,O
the,O
modules,O
.,O
,O
License,O
revenue,O
allocated,O
to,O
software,O
products,O
generally,O
is,O
recognized,O
upon,O
delivery,O
of,O
the,O
products,O
or,O
deferred,O
and,O
recognized,O
in,O
future,O
periods,O
to,O
the,O
extent,O
that,O
an,O
arrangement,O
includes,O
one,O
or,O
more,O
elements,O
to,O
be,O
delivered,O
at,O
a,O
future,O
date,O
and,O
for,O
which,O
fair,O
values,O
have,O
not,O
been,O
established,O
.,O
,O
Revenue,O
allocated,O
to,O
maintenance,O
agreements,O
is,O
recognized,O
ratably,O
over,O
the,O
maintenance,O
term,O
and,O
revenue,O
allocated,O
to,O
training,O
and,O
other,O
service,O
elements,O
is,O
recognized,O
as,O
the,O
services,O
are,O
performed,O
.,O
,O
The,O
unearned,O
portion,O
of,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
’,O
revenue,O
",",O
which,O
is,O
revenue,O
collected,O
or,O
billed,O
but,O
not,O
yet,O
recognized,O
as,O
earned,O
",",O
has,O
been,O
included,O
in,O
the,O
consolidated,O
balance,O
sheet,O
as,O
a,O
liability,O
for,O
deferred,O
revenue,O
.,O
,O
We,O
review,O
the,O
carrying,O
value,O
of,O
property,O
and,O
equipment,O
and,O
intangible,O
assets,O
for,O
impairment,O
at,O
least,O
annually,O
or,O
whenever,O
events,O
or,O
changes,O
in,O
circumstances,O
indicate,O
that,O
the,O
carrying,O
amount,O
of,O
an,O
asset,O
may,O
not,O
be,O
recoverable,O
.,O
,O
Recoverability,O
of,O
long-lived,O
assets,O
is,O
measured,O
by,O
comparison,O
of,O
its,O
carrying,O
amount,O
to,O
the,O
undiscounted,O
cash,O
flows,O
that,O
the,O
asset,O
or,O
asset,O
group,O
is,O
expected,O
to,O
generate,O
.,O
,O
If,O
such,O
assets,O
are,O
considered,O
to,O
be,O
impaired,O
",",O
the,O
impairment,O
to,O
be,O
recognized,O
is,O
measured,O
by,O
the,O
amount,O
by,O
which,O
the,O
carrying,O
amount,O
of,O
the,O
property,O
",",O
if,O
any,O
",",O
exceeds,O
its,O
fair,O
market,O
value,O
.,O
,O
For,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
(,O
“,O
First,O
Quarter,O
2011,O
”,O
),O
",",O
we,O
earned,O
revenues,O
of,O
$,O
"2,342,869",O
compared,O
to,O
$,O
"1,249,635",O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2010,O
(,O
“,O
First,O
Quarter,O
2010,O
”,O
),O
",",O
an,O
increase,O
of,O
$,O
"1,093,234",O
or,O
88,O
%,O
.,O
,O
Revenues,O
include,O
the,O
following,O
:,O
,O
Our,O
cost,O
of,O
revenues,O
for,O
First,O
Quarter,O
2011,O
was,O
$,O
"1,658,861",O
as,O
compared,O
to,O
$,O
"1,758,408",O
for,O
First,O
Quarter,O
2010,O
for,O
an,O
decrease,O
of,O
$,O
"99,547",O
or,O
6,O
%,O
as,O
compared,O
to,O
First,O
Quarter,O
2010,O
.,O
,O
Cost,O
of,O
revenues,O
consisted,O
of,O
the,O
following,O
:,O
,O
As,O
a,O
result,O
of,O
the,O
aforementioned,O
factors,O
",",O
we,O
reported,O
a,O
gross,O
profit,O
of,O
$,O
"684,008",O
in,O
First,O
Quarter,O
2011,O
as,O
compared,O
to,O
a,O
gross,O
loss,O
of,O
$,O
"508,773",O
in,O
First,O
Quarter,O
2010,O
.,O
,O
Our,O
selling,O
",",O
general,O
and,O
administrative,O
expenses,O
for,O
First,O
Quarter,O
2011,O
was,O
$,O
"1,185,717",O
as,O
compared,O
to,O
$,O
"1,451,517",O
for,O
First,O
Quarter,O
2010,O
for,O
a,O
decrease,O
of,O
$,O
"265,800",O
or,O
18,O
%,O
as,O
compared,O
to,O
First,O
Quarter,O
2010,O
.,O
,O
Selling,O
",",O
marketing,O
and,O
administrative,O
expenses,O
consisted,O
of,O
the,O
following,O
:,O
,O
In,O
First,O
Quarter,O
2011,O
we,O
incurred,O
salaries,O
",",O
employee,O
benefits,O
and,O
related,O
taxes,O
of,O
$,O
"653,122",O
as,O
compared,O
to,O
$,O
"596,009",O
for,O
First,O
Quarter,O
2010,O
",",O
an,O
increase,O
of,O
$,O
"57,113",O
or,O
10,O
%,O
.,O
,O
Salaries,O
",",O
commission,O
and,O
related,O
taxes,O
consisted,O
of,O
the,O
following,O
:,O
,O
Advertising,O
and,O
other,O
marketing,O
in,O
First,O
Quarter,O
2011,O
was,O
$,O
"23,477",O
as,O
compared,O
to,O
$,O
"57,343",O
in,O
First,O
Quarter,O
2010,O
.,O
,O
The,O
decrease,O
is,O
the,O
result,O
of,O
a,O
non,O
recurring,O
finders,O
’,O
fee,O
payable,O
to,O
a,O
third,O
party,O
in,O
the,O
First,O
Quarter,O
of,O
2010,O
pertaining,O
to,O
signing,O
of,O
a,O
new,O
client,O
.,O
,O
Depreciation,O
and,O
amortization,O
expense,O
consisted,O
of,O
the,O
following,O
:,O
,O
In,O
First,O
Quarter,O
2011,O
we,O
incurred,O
rent,O
",",O
utilities,O
",",O
telephone,O
and,O
communications,O
expense,O
of,O
$,O
"97,448",O
as,O
compared,O
to,O
$,O
"75,243",O
in,O
First,O
Quarter,O
2010,O
.,O
,O
The,O
increase,O
is,O
primarily,O
attributable,O
to,O
increased,O
utilities,O
and,O
telecommunications,O
costs,O
.,O
,O
In,O
First,O
Quarter,O
2011,O
we,O
incurred,O
professional,O
fees,O
of,O
$,O
"104,537",O
as,O
compared,O
to,O
$,O
"347,997",O
in,O
First,O
Quarter,O
2010,O
.,O
,O
The,O
decrease,O
in,O
professional,O
fees,O
is,O
attributable,O
to,O
legal,O
costs,O
incurred,O
in,O
connection,O
with,O
settled,O
litigation,O
with,O
certain,O
shareholders,O
in,O
the,O
First,O
Quarter,O
of,O
2010,O
and,O
to,O
a,O
lesser,O
extent,O
costs,O
incurred,O
in,O
connection,O
with,O
the,O
Company,O
’,O
s,O
rights,O
offering,O
incurred,O
in,O
the,O
First,O
Quarter,O
2010,O
.,O
,O
In,O
First,O
Quarter,O
2011,O
we,O
incurred,O
other,O
general,O
and,O
administrative,O
expenses,O
of,O
$,O
"125,415",O
as,O
compared,O
to,O
$,O
"143,114",O
in,O
First,O
Quarter,O
2010,O
.,O
,O
The,O
decrease,O
is,O
the,O
result,O
of,O
lower,O
computer,O
processing,O
costs,O
as,O
a,O
result,O
of,O
cost,O
cutting,O
initiatives,O
.,O
,O
Other,O
general,O
and,O
administrative,O
expense,O
includes,O
office,O
expenses,O
",",O
travel,O
and,O
entertainment,O
pertaining,O
to,O
sales,O
and,O
marketing,O
activities,O
",",O
corporate,O
insurance,O
costs,O
and,O
computer,O
hardware,O
and,O
software,O
costs,O
.,O
,O
As,O
a,O
result,O
of,O
the,O
aforementioned,O
factors,O
",",O
we,O
reported,O
a,O
loss,O
from,O
operations,O
of,O
$,O
"501,709",O
in,O
First,O
Quarter,O
2011,O
as,O
compared,O
to,O
a,O
loss,O
from,O
operations,O
of,O
$,O
"1,960,290",O
in,O
First,O
Quarter,O
2010,O
.,O
,O
Results,O
from,O
discontinued,O
operations,O
were,O
as,O
follows,O
:,O
,O
For,O
First,O
Quarter,O
2011,O
we,O
earned,O
revenues,O
in,O
discontinued,O
operations,O
of,O
$,O
"407,992",O
compared,O
to,O
$,O
"1,395,731",O
in,O
the,O
First,O
Quarter,O
2010,O
",",O
a,O
decrease,O
of,O
$,O
"987,739",O
or,O
71,O
%,O
.,O
,O
Revenues,O
include,O
the,O
following,O
:,O
,O
Total,O
operating,O
expenses,O
of,O
discontinued,O
operations,O
for,O
First,O
Quarter,O
2011,O
was,O
$,O
"188,972",O
as,O
compared,O
to,O
$,O
"364,576",O
for,O
First,O
Quarter,O
2010,O
for,O
a,O
decrease,O
of,O
$,O
"175,604",O
or,O
48,O
%,O
as,O
compared,O
to,O
First,O
Quarter,O
2010,O
.,O
,O
The,O
primary,O
reason,O
for,O
the,O
decrease,O
is,O
attributable,O
to,O
the,O
sale,O
of,O
Insurint,O
and,O
the,O
cessation,O
of,O
activities,O
for,O
Insurint,O
subsequent,O
to,O
March,O
31,O
",",O
2010,O
.,O
,O
As,O
a,O
result,O
of,O
the,O
aforementioned,O
factors,O
",",O
we,O
reported,O
a,O
gain,O
from,O
discontinued,O
operations,O
of,O
$,O
"219,020",O
or,O
$,O
0.01,O
gain,O
from,O
discontinued,O
operations,O
basic,O
and,O
$,O
0.00,O
diluted,O
per,O
share,O
in,O
First,O
Quarter,O
2011,O
as,O
compared,O
to,O
a,O
gain,O
from,O
discontinued,O
operations,O
of,O
$,O
"1,031,155",O
or,O
$,O
0.03,O
gain,O
from,O
discontinued,O
operations,O
basic,O
and,O
diluted,O
per,O
share,O
in,O
First,O
Quarter,O
2010,O
.,O
,O
Other,O
income,O
(,O
expenses,O
),O
,O
In,O
First,O
Quarter,O
2011,O
we,O
recognized,O
a,O
gain,O
on,O
change,O
in,O
fair,O
value,O
of,O
warrants,O
liabilities,O
of,O
$,O
"309,294",O
as,O
compared,O
to,O
a,O
gain,O
of,O
$,O
"974,468",O
in,O
the,O
First,O
Quarter,O
2010,O
.,O
,O
The,O
gain,O
in,O
both,O
First,O
Quarter,O
2011,O
and,O
First,O
Quarter,O
2010,O
represents,O
the,O
mark,O
to,O
market,O
adjustments,O
for,O
the,O
change,O
in,O
fair,O
value,O
of,O
warrants,O
",",O
which,O
contain,O
provisions,O
that,O
adjust,O
the,O
exercise,O
price,O
of,O
these,O
warrants,O
in,O
the,O
event,O
we,O
issue,O
our,O
common,O
stock,O
or,O
other,O
securities,O
convertible,O
into,O
our,O
common,O
stock,O
at,O
price,O
lower,O
than,O
the,O
exercise,O
price,O
of,O
these,O
warrants,O
.,O
,O
Interest,O
income,O
is,O
attributable,O
to,O
interest-bearing,O
cash,O
deposits,O
.,O
,O
The,O
decrease,O
in,O
interest,O
income,O
is,O
the,O
result,O
of,O
a,O
decline,O
in,O
interest,O
rates,O
and,O
a,O
decline,O
in,O
cash,O
balances,O
.,O
,O
Interest,O
expense,O
of,O
is,O
lower,O
in,O
First,O
Quarter,O
2011,O
as,O
compared,O
to,O
the,O
First,O
Quarter,O
of,O
2010,O
as,O
a,O
result,O
of,O
the,O
repayment,O
of,O
our,O
secured,O
promissory,O
note,O
with,O
the,O
Co-Investment,I-BUSINESS
Fund,I-BUSINESS
II,I-BUSINESS
",",I-BUSINESS
L.,I-BUSINESS
P.,I-BUSINESS
",",O
A,O
Delaware,I-LOCATION
limited,O
partnership,O
(,O
“,O
Co-Investment,I-BUSINESS
”,O
),O
",",O
in,O
the,O
fourth,O
quarter,O
of,O
2010,O
and,O
the,O
elimination,O
of,O
interest,O
expense,O
on,O
the,O
Secured,O
Note,O
.,O
,O
Net,O
income,O
(,O
loss,O
),O
,O
As,O
a,O
result,O
of,O
these,O
factors,O
discussed,O
above,O
",",O
we,O
reported,O
a,O
net,O
income,O
of,O
$,O
"27,641",O
or,O
$,O
0.00,O
loss,O
basic,O
and,O
diluted,O
per,O
share,O
and,O
in,O
First,O
Quarter,O
2011,O
as,O
compared,O
to,O
a,O
net,O
loss,O
of,O
$,O
"2,954",O
or,O
$,O
0.00,O
loss,O
basic,O
and,O
diluted,O
per,O
share,O
in,O
First,O
Quarter,O
2010,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
",",O
we,O
had,O
a,O
cash,O
balance,O
of,O
$,O
"5,211,859",O
and,O
working,O
capital,O
of,O
$,O
"4,552,600",O
.,O
,O
Net,O
cash,O
used,O
by,O
operations,O
was,O
$,O
"278,668",O
in,O
First,O
Quarter,O
2011,O
as,O
compared,O
to,O
$,O
"853,841",O
in,O
First,O
Quarter,O
2010,O
.,O
,O
The,O
improvement,O
in,O
cash,O
flow,O
from,O
operations,O
was,O
the,O
result,O
of,O
Increases,O
in,O
deferred,O
revenue,O
of,O
$,O
"809,613",O
",",O
which,O
is,O
primarily,O
the,O
result,O
of,O
the,O
collection,O
of,O
an,O
deposit,O
on,O
a,O
license,O
fee,O
payment,O
and,O
to,O
a,O
lesser,O
extent,O
the,O
collection,O
of,O
annual,O
maintenance,O
fees,O
in,O
First,O
Quarter,O
2011,O
partially,O
offset,O
by,O
the,O
recognition,O
of,O
license,O
fee,O
revenue,O
in,O
the,O
First,O
Quarter,O
2011,O
",",O
which,O
was,O
collected,O
prior,O
to,O
2011,O
.,O
,O
Also,O
impacting,O
the,O
improvement,O
in,O
our,O
cash,O
flow,O
from,O
operations,O
was,O
our,O
net,O
income,O
of,O
$,O
"27,641",O
in,O
the,O
First,O
Quarter,O
of,O
2011,O
as,O
compared,O
to,O
our,O
net,O
loss,O
of,O
$,O
"2,954",O
in,O
the,O
First,O
Quarter,O
of,O
2010,O
and,O
:,O
,O
In,O
addition,O
to,O
cash,O
used,O
in,O
operating,O
activities,O
we,O
incurred,O
the,O
following,O
non,O
cash,O
gain,O
and,O
expenses,O
in,O
2011,O
",",O
which,O
were,O
included,O
in,O
our,O
net,O
income,O
(,O
loss,O
),O
",",O
including,O
:,O
,O
Net,O
cash,O
used,O
by,O
investing,O
activities,O
in,O
the,O
First,O
Quarter,O
2011,O
was,O
$,O
"29,816",O
as,O
compared,O
to,O
$,O
"110,363",O
in,O
the,O
First,O
Quarter,O
2010,O
.,O
,O
Investing,O
activities,O
pertain,O
to,O
the,O
purchase,O
of,O
property,O
and,O
equipment,O
supporting,O
current,O
and,O
future,O
operations,O
.,O
,O
Net,O
cash,O
provided,O
by,O
financing,O
activities,O
in,O
the,O
First,O
Quarter,O
2011,O
was,O
$,O
"1,091,317",O
as,O
compared,O
to,O
$,O
"1,200,040",O
in,O
the,O
First,O
Quarter,O
2010,O
.,O
,O
We,O
do,O
not,O
currently,O
have,O
any,O
relationships,O
with,O
unconsolidated,O
entities,O
or,O
financial,O
partnerships,O
",",O
such,O
as,O
entities,O
referred,O
to,O
as,O
structured,O
finance,O
or,O
special,O
purpose,O
entities,O
",",O
which,O
would,O
have,O
been,O
established,O
for,O
the,O
purpose,O
of,O
facilitating,O
off-balance,O
sheet,O
or,O
other,O
contractually,O
narrow,O
or,O
limited,O
purposes,O
.,O
,O
(,O
a,O
),O
Evaluation,O
of,O
Disclosure,O
Controls,O
and,O
Procedures,O
.,O
,O
Our,O
management,O
is,O
responsible,O
for,O
establishing,O
and,O
maintaining,O
adequate,O
internal,O
control,O
over,O
financial,O
reporting,O
for,O
the,O
Company,O
.,O
,O
Under,O
the,O
supervision,O
of,O
our,O
Chief,O
Executive,O
Officer,O
and,O
Chief,O
Financial,O
Officer,O
",",O
our,O
management,O
conducted,O
an,O
assessment,O
of,O
the,O
effectiveness,O
of,O
our,O
disclosure,O
controls,O
and,O
procedures,O
(,O
as,O
such,O
term,O
is,O
defined,O
in,O
Rules,O
13a-15,O
(,O
e,O
),O
and,O
15d-15,O
(,O
e,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
),O
as,O
of,O
the,O
end,O
of,O
the,O
period,O
covered,O
by,O
this,O
report,O
.,O
,O
Based,O
on,O
the,O
results,O
of,O
such,O
assessment,O
",",O
management,O
have,O
concluded,O
that,O
the,O
our,O
disclosure,O
controls,O
and,O
procedures,O
as,O
of,O
the,O
end,O
of,O
the,O
period,O
covered,O
by,O
this,O
report,O
have,O
been,O
designed,O
and,O
are,O
functioning,O
effectively,O
to,O
provide,O
reasonable,O
assurance,O
that,O
the,O
information,O
required,O
to,O
be,O
disclosed,O
by,O
us,O
in,O
reports,O
filed,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
is,O
recorded,O
",",O
processed,O
",",O
summarized,O
and,O
reported,O
within,O
the,O
time,O
periods,O
specified,O
in,O
the,O
Commission,O
’,O
s,O
rules,O
and,O
is,O
accumulated,O
and,O
communicated,O
to,O
management,O
",",O
including,O
our,O
principal,O
executive,O
and,O
principal,O
financial,O
officers,O
",",O
or,O
person,O
performing,O
similar,O
functions,O
",",O
as,O
appropriate,O
to,O
allow,O
timely,O
decisions,O
regarding,O
required,O
disclosure,O
.,O
,O
A,O
control,O
system,O
",",O
no,O
matter,O
how,O
well,O
conceived,O
and,O
operated,O
",",O
can,O
provide,O
only,O
reasonable,O
",",O
not,O
absolute,O
",",O
assurance,O
that,O
the,O
objectives,O
of,O
the,O
control,O
system,O
are,O
met,O
.,O
,O
Because,O
of,O
the,O
inherent,O
limitations,O
in,O
all,O
control,O
systems,O
",",O
no,O
evaluation,O
of,O
controls,O
can,O
provide,O
absolute,O
assurance,O
that,O
all,O
control,O
issues,O
and,O
instances,O
of,O
fraud,O
",",O
if,O
any,O
",",O
within,O
the,O
Company,O
have,O
been,O
detected,O
.,O
,O
The,O
design,O
of,O
any,O
system,O
of,O
controls,O
also,O
is,O
based,O
in,O
part,O
upon,O
certain,O
assumptions,O
about,O
the,O
likelihood,O
of,O
future,O
events,O
",",O
and,O
there,O
can,O
be,O
no,O
assurance,O
that,O
any,O
design,O
will,O
succeed,O
in,O
achieving,O
its,O
stated,O
goals,O
under,O
all,O
potential,O
future,O
conditions,O
;,O
over,O
time,O
",",O
control,O
may,O
become,O
inadequate,O
because,O
of,O
changes,O
in,O
conditions,O
",",O
or,O
the,O
degree,O
of,O
compliance,O
with,O
the,O
policies,O
or,O
procedures,O
may,O
deteriorate,O
.,O
,O
Because,O
of,O
the,O
inherent,O
limitations,O
in,O
a,O
cost-effective,O
control,O
system,O
",",O
misstatements,O
due,O
to,O
error,O
or,O
fraud,O
may,O
occur,O
and,O
not,O
be,O
detected,O
.,O
,O
(,O
b,O
),O
Change,O
in,O
Internal,O
Control,O
over,O
Financial,O
Reporting,O
.,O
,O
There,O
have,O
not,O
been,O
any,O
changes,O
in,O
our,O
internal,O
control,O
over,O
financial,O
reporting,O
during,O
our,O
most,O
recent,O
fiscal,O
quarter,O
that,O
have,O
materially,O
affected,O
",",O
or,O
are,O
reasonably,O
likely,O
to,O
materially,O
affect,O
",",O
the,O
Company,O
’,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
We,O
are,O
involved,O
in,O
various,O
investigations,O
",",O
claims,O
and,O
lawsuits,O
arising,O
in,O
the,O
normal,O
conduct,O
of,O
our,O
business,O
",",O
none,O
of,O
which,O
",",O
in,O
our,O
opinion,O
",",O
will,O
harm,O
our,O
business,O
.,O
,O
We,O
can,O
not,O
assure,O
that,O
we,O
will,O
prevail,O
in,O
any,O
litigation,O
.,O
,O
Regardless,O
of,O
the,O
outcome,O
",",O
any,O
litigation,O
may,O
require,O
us,O
to,O
incur,O
significant,O
litigation,O
expense,O
and,O
may,O
result,O
in,O
significant,O
diversion,O
of,O
our,O
attention,O
.,O
,O
*,O
Filed,O
herewith,O
.,O
,O
†,O
Furnished,O
herewith,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
thereunto,O
duly,O
authorized,O
.,O
,O
(,O
Principal,O
Executive,O
and,O
Financial,O
Officer,O
),O
,O
*,O
Filed,O
herewith,O
.,O
,O
†,O
Furnished,O
herewith,O
.,O
,O
I,O
",",O
Anthony,I-PERSON
R.,I-PERSON
Verdi,I-PERSON
",",O
certify,O
that,O
:,O
,O
I,O
",",O
Anthony,I-PERSON
R.,I-PERSON
Verdi,I-PERSON
",",O
certify,O
that,O
:,O
,O
In,O
connection,O
with,O
the,O
Quarterly,O
Report,O
of,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
Corporation,I-BUSINESS
(,O
the,O
``,O
Company,O
'',O
),O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
for,O
the,O
fiscal,O
quarter,O
ended,O
March,O
31,O
",",O
2010,O
as,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
on,O
the,O
date,O
hereof,O
(,O
the,O
``,O
Report,O
'',O
),O
",",O
I,O
",",O
Anthony,I-PERSON
R.,I-PERSON
Verdi,I-PERSON
",",O
Chief,O
Executive,O
Officer,O
of,O
the,O
Company,O
",",O
certify,O
that,O
",",O
based,O
on,O
my,O
knowledge,O
:,O
,O
(,O
2,O
),O
The,O
information,O
contained,O
in,O
the,O
Report,O
fairly,O
presents,O
",",O
in,O
all,O
material,O
respects,O
",",O
the,O
financial,O
condition,O
and,O
results,O
of,O
operations,O
of,O
the,O
Company,O
.,O
,O
In,O
connection,O
with,O
the,O
Quarterly,O
Report,O
of,O
InsPro,I-BUSINESS
Technologies,I-BUSINESS
Corporation,I-BUSINESS
(,O
the,O
``,O
Company,O
'',O
),O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
for,O
the,O
fiscal,O
quarter,O
ended,O
March,O
31,O
",",O
2011,O
as,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
on,O
the,O
date,O
hereof,O
(,O
the,O
``,O
Report,O
'',O
),O
",",O
I,O
",",O
Anthony,I-PERSON
R.,I-PERSON
Verdi,I-PERSON
",",O
Chief,O
Financial,O
Officer,O
of,O
the,O
Company,O
",",O
certify,O
",",O
based,O
on,O
my,O
knowledge,O
:,O
,O
(,O
2,O
),O
The,O
information,O
contained,O
in,O
the,O
Report,O
fairly,O
presents,O
",",O
in,O
all,O
material,O
respects,O
",",O
the,O
financial,O
condition,O
and,O
results,O
of,O
operations,O
of,O
the,O
Company,O
.,O
,O
-DOCSTART-,O
,O
Check,O
the,O
appropriate,O
box,O
below,O
if,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filing,O
is,O
intended,O
to,O
simultaneously,O
satisfy,O
the,O
filing,O
obligation,O
of,O
the,O
registrant,O
under,O
any,O
of,O
the,O
following,O
provisions,O
:,O
,O
Item,O
5.02,O
Departure,O
of,O
Directors,O
or,O
Certain,O
Officers,O
;,O
Election,O
of,O
Directors,O
;,O
Appointment,O
of,O
Certain,O
Officers,O
;,O
Compensatory,O
Arrangements,O
of,O
Certain,O
Officers,O
.,O
,O
On,O
June,O
23,O
",",O
2011,O
",",O
EMS,I-BUSINESS
Technologies,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
Company,O
),O
and,O
Gary,I-PERSON
B,I-PERSON
.,I-PERSON
Shell,I-PERSON
",",O
the,O
Company,O
s,O
Senior,O
Vice,O
President,O
",",O
Chief,O
Financial,O
Officer,O
and,O
Treasurer,O
",",O
entered,O
into,O
an,O
Amended,O
and,O
Restated,O
Executive,O
Protection,O
Agreement,O
(,O
the,O
Amended,O
EPA,O
),O
.,O
,O
The,O
Amended,O
EPA,O
includes,O
a,O
new,O
non-compete,O
provision,O
that,O
prohibits,O
Mr.,O
Shell,I-PERSON
from,O
competing,O
with,O
the,O
Company,O
for,O
six,O
months,O
following,O
a,O
termination,O
of,O
his,O
employment,O
for,O
any,O
reason,O
.,O
,O
In,O
connection,O
with,O
the,O
addition,O
of,O
the,O
non-compete,O
",",O
the,O
Amended,O
EPA,O
allocates,O
$,O
"75,000",O
of,O
any,O
payments,O
ultimately,O
paid,O
to,O
Mr.,O
Shell,I-PERSON
under,O
the,O
Amended,O
EPA,O
as,O
consideration,O
for,O
the,O
non-compete,O
.,O
,O
This,O
description,O
is,O
qualified,O
in,O
its,O
entirety,O
by,O
reference,O
to,O
the,O
Amended,O
EPA,O
",",O
a,O
copy,O
of,O
which,O
is,O
attached,O
hereto,O
as,O
Exhibit,O
10.1,O
and,O
incorporated,O
by,O
reference,O
herein,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
hereunto,O
duly,O
authorized,O
.,O
,O
EMS,I-BUSINESS
TECHNOLOGIES,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
THIS,O
AGREEMENT,O
",",O
as,O
amended,O
and,O
restated,O
effective,O
as,O
of,O
the,O
23rd,O
day,O
of,O
June,O
",",O
2011,O
",",O
by,O
and,O
between,O
EMS,I-BUSINESS
TECHNOLOGIES,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
",",O
a,O
Georgia,I-LOCATION
corporation,O
(,O
the,O
Company,O
),O
",",O
and,O
Gary,I-PERSON
B,I-PERSON
.,I-PERSON
Shell,I-PERSON
(,O
the,O
Executive,O
),O
",",O
supersedes,O
and,O
replaces,O
entirely,O
any,O
and,O
all,O
previous,O
agreements,O
between,O
the,O
Company,O
and,O
Executive,O
that,O
provides,O
Executive,O
with,O
post-termination,O
compensation,O
",",O
following,O
a,O
change,O
in,O
the,O
control,O
of,O
the,O
Company,O
",",O
of,O
a,O
nature,O
or,O
in,O
amounts,O
not,O
otherwise,O
provided,O
under,O
the,O
terms,O
of,O
programs,O
and,O
policies,O
applicable,O
to,O
the,O
Company,O
s,O
employees,O
generally,O
.,O
,O
WHEREAS,O
",",O
the,O
Company,O
wishes,O
to,O
assure,O
both,O
itself,O
and,O
its,O
key,O
employees,O
of,O
continuity,O
of,O
management,O
and,O
objective,O
judgment,O
in,O
the,O
event,O
of,O
any,O
Change,O
in,O
Control,O
(,O
as,O
defined,O
below,O
),O
of,O
the,O
Company,O
and,O
to,O
provide,O
certain,O
other,O
benefits,O
",",O
and,O
the,O
Executive,O
is,O
a,O
key,O
employee,O
of,O
the,O
Company,O
and,O
an,O
integral,O
part,O
of,O
its,O
management,O
;,O
NOW,O
",",O
THEREFORE,O
",",O
for,O
and,O
in,O
consideration,O
of,O
the,O
premises,O
and,O
the,O
mutual,O
covenants,O
herein,O
contained,O
",",O
the,O
parties,O
hereby,O
agree,O
as,O
follows,O
:,O
,O
I,O
.,O
TERM,O
OF,O
AGREEMENT,O
.,O
,O
This,O
Agreement,O
shall,O
be,O
effective,O
immediately,O
upon,O
its,O
execution,O
by,O
the,O
parties,O
hereto,O
.,O
,O
The,O
term,O
of,O
this,O
Agreement,O
shall,O
be,O
for,O
a,O
rolling,O
",",O
three-year,O
period,O
commencing,O
on,O
the,O
date,O
hereof,O
",",O
and,O
shall,O
be,O
deemed,O
automatically,O
(,O
without,O
further,O
action,O
by,O
either,O
the,O
Company,O
or,O
the,O
Executive,O
),O
to,O
extend,O
each,O
day,O
for,O
an,O
additional,O
day,O
such,O
that,O
the,O
remaining,O
term,O
of,O
this,O
Agreement,O
shall,O
continue,O
to,O
be,O
three,O
years,O
.,O
,O
The,O
foregoing,O
notwithstanding,O
",",O
this,O
Agreement,O
shall,O
immediately,O
cease,O
to,O
be,O
effective,O
and,O
shall,O
terminate,O
if,O
the,O
Executive,O
ceases,O
to,O
be,O
employed,O
by,O
the,O
Company,O
",",O
at,O
any,O
time,O
before,O
a,O
Change,O
in,O
Control,O
(,O
as,O
defined,O
below,O
),O
has,O
occurred,O
",",O
in,O
a,O
corporate,O
officer,O
position,O
of,O
vice,O
president,O
or,O
higher,O
position,O
;,O
provided,O
",",O
however,O
",",O
such,O
cessation,O
of,O
the,O
Executive,O
s,O
employment,O
(,O
i,O
),O
was,O
not,O
at,O
the,O
request,O
of,O
a,O
third,O
party,O
who,O
has,O
indicated,O
an,O
intention,O
or,O
taken,O
steps,O
reasonably,O
calculated,O
to,O
effect,O
a,O
Change,O
in,O
Control,O
",",O
(,O
ii,O
),O
did,O
not,O
otherwise,O
occur,O
in,O
connection,O
with,O
a,O
Change,O
in,O
Control,O
that,O
in,O
fact,O
occurs,O
",",O
or,O
(,O
iii,O
),O
did,O
not,O
occur,O
in,O
connection,O
with,O
a,O
Board-authorized,O
plan,O
for,O
",",O
or,O
Board-authorized,O
implementation,O
efforts,O
with,O
respect,O
to,O
",",O
a,O
Change,O
in,O
Control,O
(,O
whether,O
or,O
not,O
such,O
Change,O
in,O
Control,O
in,O
fact,O
occurs,O
),O
.,O
,O
Board,O
—,O
The,O
Board,O
of,O
Directors,O
of,O
the,O
Company,O
",",O
or,O
its,O
successor,O
.,O
,O
Cause,O
—,O
The,O
term,O
Cause,O
as,O
used,O
herein,O
shall,O
mean,O
:,O
(,O
i,O
),O
any,O
act,O
that,O
constitutes,O
",",O
on,O
the,O
part,O
of,O
the,O
Executive,O
",",O
(,O
a,O
),O
fraud,O
",",O
dishonesty,O
",",O
gross,O
negligence,O
",",O
or,O
willful,O
misconduct,O
and,O
(,O
b,O
),O
that,O
directly,O
results,O
in,O
material,O
injury,O
to,O
the,O
Company,O
",",O
or,O
(,O
ii,O
),O
the,O
Executive,O
s,O
conviction,O
of,O
a,O
felony,O
or,O
crime,O
involving,O
moral,O
turpitude,O
.,O
,O
events,O
or,O
circumstances,O
constituting,O
Cause,O
to,O
the,O
reasonable,O
satisfaction,O
of,O
the,O
Company,O
.,O
,O
A,O
termination,O
for,O
Cause,O
based,O
on,O
clause,O
(,O
ii,O
),O
above,O
shall,O
take,O
effect,O
immediately,O
upon,O
giving,O
of,O
the,O
termination,O
notice,O
.,O
,O
Change,O
in,O
Control,O
—,O
The,O
term,O
Change,O
in,O
Control,O
as,O
used,O
herein,O
shall,O
mean,O
the,O
occurrence,O
of,O
one,O
of,O
the,O
following,O
:,O
,O
(,O
iv,O
),O
the,O
occurrence,O
of,O
any,O
other,O
event,O
or,O
circumstance,O
which,O
is,O
not,O
covered,O
by,O
(,O
i,O
),O
through,O
(,O
iii,O
),O
above,O
which,O
the,O
Board,O
determines,O
affects,O
control,O
of,O
the,O
Company,O
and,O
constitutes,O
a,O
Change,O
in,O
Control,O
for,O
purposes,O
of,O
this,O
Agreement,O
.,O
,O
Disability,O
—,O
The,O
term,O
Disability,O
shall,O
mean,O
the,O
Executive,O
s,O
inability,O
as,O
a,O
result,O
of,O
physical,O
or,O
mental,O
incapacity,O
to,O
substantially,O
perform,O
his,O
or,O
her,O
duties,O
for,O
the,O
Company,O
on,O
a,O
full-time,O
basis,O
for,O
a,O
period,O
of,O
six,O
months,O
.,O
,O
Excess,O
Severance,O
Payment,O
—,O
The,O
term,O
Excess,O
Severance,O
Payment,O
shall,O
have,O
the,O
same,O
meaning,O
as,O
the,O
term,O
excess,O
parachute,O
payment,O
defined,O
in,O
Section,O
280G,O
(,O
b,O
),O
(,O
l,O
),O
of,O
the,O
Code,O
.,O
,O
Severance,O
Payment,O
—,O
The,O
term,O
Severance,O
Payment,O
shall,O
have,O
the,O
same,O
meaning,O
as,O
the,O
term,O
parachute,O
payment,O
defined,O
in,O
Section,O
280G,O
(,O
b,O
),O
(,O
2,O
),O
of,O
the,O
Code,O
.,O
,O
Present,O
Value,O
—,O
The,O
term,O
Present,O
Value,O
shall,O
have,O
the,O
same,O
meaning,O
as,O
provided,O
in,O
Section,O
280G,O
(,O
d,O
),O
(,O
4,O
),O
of,O
the,O
Code,O
.,O
,O
Reasonable,O
Compensation,O
—,O
The,O
term,O
Reasonable,O
Compensation,O
shall,O
have,O
the,O
same,O
meaning,O
as,O
provided,O
in,O
Section,O
280G,O
(,O
b,O
),O
(,O
4,O
),O
of,O
the,O
Code,O
.,O
,O
BENEFITS,O
UPON,O
TERMINATION,O
.,O
,O
(,O
ii,O
),O
on,O
or,O
within,O
24,O
months,O
after,O
a,O
Change,O
in,O
Control,O
",",O
and,O
such,O
termination,O
is,O
a,O
result,O
of,O
Involuntary,O
Termination,O
or,O
Voluntary,O
Termination,O
",",O
as,O
defined,O
below,O
",",O
,O
then,O
the,O
benefits,O
described,O
in,O
Section,O
2,O
below,O
shall,O
",",O
subject,O
to,O
Article,O
IV,O
of,O
this,O
Agreement,O
",",O
be,O
paid,O
or,O
provided,O
to,O
the,O
Executive,O
.,O
,O
The,O
fact,O
that,O
Executive,O
is,O
eligible,O
for,O
early,O
",",O
normal,O
or,O
delayed,O
retirement,O
under,O
a,O
Company,O
retirement,O
plan,O
at,O
the,O
time,O
of,O
his,O
or,O
her,O
termination,O
shall,O
not,O
make,O
him,O
or,O
her,O
ineligible,O
to,O
receive,O
benefits,O
hereunder,O
.,O
,O
For,O
the,O
purposes,O
of,O
the,O
following,O
definitions,O
",",O
the,O
term,O
Company,O
shall,O
include,O
the,O
Company,O
s,O
subsidiaries,O
and,O
any,O
successor,O
as,O
a,O
result,O
of,O
the,O
Change,O
in,O
Control,O
to,O
the,O
business,O
and,O
assets,O
of,O
the,O
Company,O
or,O
its,O
subsidiaries,O
.,O
,O
(,O
a,O
),O
Involuntary,O
Termination,O
—,O
For,O
purposes,O
hereof,O
",",O
Involuntary,O
Termination,O
shall,O
mean,O
termination,O
of,O
employment,O
that,O
is,O
involuntary,O
on,O
the,O
part,O
of,O
the,O
Executive,O
and,O
that,O
occurs,O
for,O
reasons,O
other,O
than,O
Cause,O
",",O
Disability,O
or,O
death,O
.,O
,O
(,O
b,O
),O
Voluntary,O
Termination,O
—,O
For,O
purposes,O
hereof,O
",",O
Voluntary,O
Termination,O
shall,O
mean,O
termination,O
of,O
employment,O
that,O
is,O
voluntary,O
on,O
the,O
part,O
of,O
the,O
Executive,O
",",O
and,O
",",O
in,O
the,O
judgment,O
of,O
the,O
Executive,O
",",O
is,O
due,O
to,O
",",O
and,O
which,O
occurs,O
within,O
six,O
months,O
of,O
:,O
,O
(,O
i,O
),O
the,O
assignment,O
to,O
the,O
Executive,O
of,O
any,O
duties,O
inconsistent,O
with,O
the,O
Executive,O
s,O
title,O
and,O
status,O
in,O
effect,O
prior,O
to,O
the,O
Change,O
in,O
Control,O
",",O
a,O
material,O
increase,O
or,O
decrease,O
in,O
the,O
Executive,O
s,O
responsibilities,O
at,O
the,O
Company,O
from,O
those,O
in,O
effect,O
immediately,O
prior,O
to,O
the,O
Change,O
in,O
Control,O
",",O
or,O
an,O
adverse,O
alteration,O
in,O
the,O
nature,O
or,O
status,O
of,O
such,O
responsibilities,O
(,O
other,O
than,O
any,O
such,O
alteration,O
to,O
the,O
extent,O
incidental,O
to,O
the,O
fact,O
that,O
the,O
Company,O
may,O
no,O
longer,O
be,O
a,O
public,O
company,O
),O
;,O
,O
(,O
ii,O
),O
a,O
reduction,O
by,O
the,O
Company,O
of,O
the,O
Executive,O
s,O
base,O
salary,O
from,O
such,O
salary,O
in,O
effect,O
prior,O
to,O
the,O
Change,O
in,O
Control,O
;,O
,O
the,O
year,O
preceding,O
the,O
Change,O
in,O
Control,O
),O
",",O
except,O
for,O
required,O
travel,O
on,O
the,O
Company,O
s,O
business,O
to,O
an,O
extent,O
substantially,O
consistent,O
with,O
the,O
Executive,O
s,O
business,O
travel,O
obligations,O
prior,O
to,O
the,O
Change,O
in,O
Control,O
;,O
,O
(,O
iv,O
),O
the,O
failure,O
by,O
the,O
Company,O
",",O
without,O
the,O
Executive,O
s,O
consent,O
",",O
to,O
pay,O
to,O
the,O
Executive,O
any,O
portion,O
of,O
the,O
Executive,O
s,O
then-current,O
compensation,O
(,O
including,O
base,O
salary,O
and,O
annual,O
bonus,O
to,O
the,O
extent,O
payable,O
under,O
the,O
terms,O
of,O
annual,O
bonus,O
programs,O
in,O
effect,O
from,O
time,O
to,O
time,O
),O
",",O
or,O
to,O
pay,O
to,O
the,O
Executive,O
any,O
portion,O
of,O
an,O
installment,O
of,O
deferred,O
compensation,O
under,O
any,O
deferred,O
compensation,O
program,O
of,O
the,O
Company,O
",",O
in,O
each,O
case,O
within,O
seven,O
days,O
of,O
the,O
date,O
such,O
compensation,O
is,O
due,O
;,O
,O
(,O
v,O
),O
the,O
failure,O
by,O
the,O
Company,O
to,O
continue,O
in,O
effect,O
any,O
compensation,O
plan,O
in,O
which,O
the,O
Executive,O
participates,O
immediately,O
prior,O
to,O
the,O
Change,O
in,O
Control,O
",",O
which,O
is,O
material,O
to,O
the,O
Executive,O
s,O
total,O
compensation,O
",",O
including,O
but,O
not,O
limited,O
to,O
the,O
Company,O
s,O
annual,O
bonus,O
plan,O
",",O
stock,O
option,O
plan,O
",",O
or,O
any,O
similar,O
or,O
substitute,O
plans,O
adopted,O
prior,O
to,O
the,O
Change,O
in,O
Control,O
",",O
unless,O
an,O
equitable,O
arrangement,O
(,O
embodied,O
in,O
an,O
ongoing,O
substitute,O
or,O
alternative,O
plan,O
),O
has,O
been,O
made,O
with,O
respect,O
to,O
such,O
plan,O
",",O
or,O
the,O
failure,O
by,O
the,O
Company,O
to,O
continue,O
the,O
Executive,O
s,O
participation,O
in,O
such,O
plan,O
(,O
or,O
in,O
such,O
substitute,O
or,O
alternative,O
plan,O
),O
on,O
a,O
basis,O
not,O
materially,O
less,O
favorable,O
",",O
both,O
in,O
terms,O
of,O
the,O
amount,O
of,O
benefits,O
provided,O
(,O
or,O
potentially,O
available,O
under,O
incentive,O
compensation,O
programs,O
),O
and,O
the,O
level,O
of,O
the,O
Executive,O
s,O
participation,O
relative,O
to,O
other,O
participants,O
",",O
as,O
existed,O
immediately,O
prior,O
to,O
the,O
Change,O
in,O
Control,O
;,O
,O
(,O
vii,O
),O
the,O
failure,O
of,O
any,O
successor,O
to,O
assume,O
this,O
Agreement,O
as,O
provided,O
in,O
Section,O
V.2,O
below,O
.,O
,O
A,O
termination,O
shall,O
not,O
be,O
considered,O
voluntary,O
within,O
the,O
meaning,O
of,O
this,O
Agreement,O
if,O
such,O
termination,O
is,O
the,O
result,O
of,O
Cause,O
",",O
Disability,O
or,O
death,O
of,O
the,O
Executive,O
.,O
,O
The,O
Executive,O
s,O
continued,O
employment,O
shall,O
not,O
constitute,O
consent,O
to,O
",",O
or,O
a,O
waiver,O
of,O
rights,O
with,O
respect,O
to,O
",",O
any,O
act,O
or,O
failure,O
to,O
act,O
relating,O
to,O
Voluntary,O
Termination,O
hereunder,O
.,O
,O
Benefits,O
to,O
be,O
Provided,O
—,O
If,O
the,O
Executive,O
becomes,O
eligible,O
for,O
benefits,O
under,O
Section,O
1,O
above,O
",",O
the,O
Company,O
shall,O
pay,O
or,O
provide,O
to,O
the,O
Executive,O
the,O
compensation,O
and,O
benefits,O
set,O
forth,O
in,O
this,O
Section,O
2,O
.,O
,O
(,O
a,O
),O
Salary,O
—,O
The,O
Executive,O
will,O
continue,O
to,O
receive,O
his,O
or,O
her,O
current,O
salary,O
(,O
subject,O
to,O
withholding,O
of,O
all,O
applicable,O
taxes,O
and,O
any,O
amounts,O
referred,O
to,O
in,O
Section,O
2,O
(,O
b,O
),O
below,O
),O
for,O
the,O
period,O
specified,O
below,O
following,O
his,O
date,O
of,O
termination,O
in,O
the,O
same,O
manner,O
as,O
it,O
was,O
being,O
paid,O
as,O
of,O
the,O
date,O
of,O
termination,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
salary,O
payments,O
provided,O
for,O
hereunder,O
shall,O
be,O
paid,O
in,O
a,O
single,O
lump,O
sum,O
payment,O
",",O
to,O
be,O
paid,O
not,O
earlier,O
than,O
six,O
months,O
and,O
one,O
day,O
",",O
and,O
not,O
later,O
than,O
seven,O
months,O
",",O
after,O
his,O
or,O
her,O
termination,O
of,O
employment,O
;,O
provided,O
",",O
further,O
",",O
that,O
the,O
amount,O
of,O
such,O
lump,O
sum,O
payment,O
shall,O
be,O
determined,O
by,O
taking,O
the,O
salary,O
payments,O
to,O
be,O
made,O
and,O
discounting,O
them,O
to,O
their,O
Present,O
Value,O
on,O
the,O
date,O
the,O
Executive,O
s,O
employment,O
is,O
terminated,O
",",O
increased,O
by,O
interest,O
on,O
such,O
amount,O
for,O
each,O
day,O
from,O
the,O
31st,O
day,O
after,O
termination,O
of,O
employment,O
until,O
the,O
date,O
of,O
payment,O
",",O
calculated,O
on,O
a,O
daily,O
basis,O
at,O
a,O
rate,O
per,O
annum,O
equal,O
to,O
the,O
rate,O
used,O
to,O
determine,O
such,O
Present,O
Value,O
.,O
,O
For,O
purposes,O
hereof,O
",",O
the,O
Executive,O
s,O
current,O
salary,O
shall,O
be,O
the,O
highest,O
rate,O
in,O
effect,O
during,O
the,O
six-month,O
period,O
prior,O
to,O
the,O
Executive,O
s,O
termination,O
.,O
,O
The,O
period,O
for,O
which,O
such,O
salary,O
payments,O
shall,O
be,O
so,O
made,O
shall,O
be,O
as,O
follows,O
:,O
,O
(,O
ii,O
),O
24,O
months,O
in,O
the,O
case,O
of,O
a,O
Change,O
in,O
Control,O
occurring,O
with,O
the,O
prior,O
approval,O
of,O
the,O
Board,O
of,O
Directors,O
.,O
,O
(,O
b,O
),O
Health,O
and,O
Life,O
Insurance,O
Coverage,O
—,O
The,O
health,O
and,O
life,O
insurance,O
benefits,O
coverage,O
(,O
including,O
any,O
executive,O
medical,O
plan,O
or,O
split,O
dollar,O
insurance,O
plan,O
),O
provided,O
to,O
the,O
Executive,O
at,O
his,O
or,O
her,O
date,O
of,O
termination,O
(,O
or,O
",",O
if,O
greater,O
",",O
within,O
six,O
months,O
prior,O
to,O
such,O
date,O
of,O
termination,O
),O
",",O
shall,O
be,O
provided,O
by,O
the,O
Company,O
(,O
no,O
less,O
frequently,O
than,O
monthly,O
),O
at,O
its,O
expense,O
at,O
the,O
same,O
level,O
and,O
in,O
the,O
same,O
manner,O
as,O
if,O
his,O
or,O
her,O
employment,O
had,O
not,O
terminated,O
(,O
and,O
",",O
if,O
applicable,O
",",O
such,O
coverage,O
had,O
not,O
been,O
terminated,O
or,O
modified,O
within,O
six,O
months,O
prior,O
to,O
such,O
date,O
of,O
termination,O
),O
",",O
but,O
subject,O
to,O
the,O
customary,O
changes,O
in,O
such,O
coverages,O
if,O
the,O
Executive,O
reaches,O
age,O
65,O
or,O
has,O
similar,O
changes,O
in,O
personal,O
or,O
family,O
circumstances,O
",",O
beginning,O
on,O
the,O
date,O
of,O
such,O
termination,O
and,O
ending,O
on,O
the,O
date,O
12,O
months,O
from,O
the,O
date,O
of,O
such,O
termination,O
.,O
,O
Any,O
additional,O
coverages,O
the,O
Executive,O
had,O
at,O
termination,O
",",O
including,O
dependent,O
coverage,O
",",O
will,O
also,O
be,O
continued,O
for,O
such,O
period,O
on,O
the,O
same,O
terms,O
",",O
to,O
the,O
extent,O
permitted,O
by,O
the,O
applicable,O
policies,O
or,O
contracts,O
.,O
,O
Any,O
costs,O
the,O
Executive,O
was,O
paying,O
for,O
such,O
coverages,O
at,O
the,O
time,O
of,O
termination,O
shall,O
be,O
paid,O
by,O
the,O
Executive,O
by,O
separate,O
check,O
payable,O
to,O
the,O
Company,O
each,O
month,O
in,O
advance,O
.,O
,O
the,O
terms,O
of,O
any,O
benefit,O
plan,O
as,O
described,O
above,O
.,O
,O
The,O
coverages,O
provided,O
for,O
in,O
this,O
subsection,O
shall,O
be,O
applied,O
against,O
and,O
reduce,O
the,O
period,O
for,O
which,O
COBRA,I-LEGISLATION/ACT
will,O
be,O
provided,O
",",O
and,O
may,O
at,O
the,O
Company,O
s,O
election,O
be,O
provided,O
as,O
COBRA,I-LEGISLATION/ACT
coverage,O
",",O
subject,O
to,O
payment,O
by,O
the,O
Company,O
to,O
the,O
Executive,O
(,O
monthly,O
in,O
advance,O
),O
of,O
additional,O
compensation,O
equal,O
to,O
the,O
excess,O
of,O
the,O
COBRA,I-LEGISLATION/ACT
premium,O
over,O
the,O
costs,O
otherwise,O
payable,O
by,O
the,O
Executive,O
as,O
provided,O
above,O
",",O
in,O
each,O
case,O
as,O
in,O
effect,O
from,O
time,O
to,O
time,O
",",O
plus,O
an,O
additional,O
amount,O
as,O
necessary,O
to,O
reimburse,O
the,O
Executive,O
for,O
additional,O
taxes,O
payable,O
on,O
both,O
such,O
additional,O
compensation,O
and,O
such,O
additional,O
amount,O
at,O
a,O
combined,O
tax,O
rate,O
of,O
45,O
%,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
first,O
of,O
any,O
such,O
payments,O
by,O
the,O
Company,O
shall,O
be,O
made,O
no,O
earlier,O
than,O
six,O
months,O
and,O
one,O
day,O
",",O
and,O
not,O
later,O
than,O
seven,O
months,O
",",O
after,O
the,O
Executive,O
s,O
termination,O
of,O
employment,O
and,O
shall,O
include,O
all,O
amounts,O
so,O
payable,O
with,O
respect,O
to,O
the,O
first,O
seven,O
months,O
following,O
such,O
termination,O
.,O
,O
(,O
c,O
),O
Stock,O
Options,O
—,O
As,O
of,O
the,O
Executive,O
s,O
date,O
of,O
termination,O
",",O
all,O
outstanding,O
stock,O
options,O
granted,O
to,O
the,O
Executive,O
under,O
any,O
stock,O
option,O
plan,O
or,O
program,O
maintained,O
by,O
the,O
Company,O
shall,O
become,O
100,O
%,O
vested,O
and,O
immediately,O
exercisable,O
",",O
and,O
shall,O
thereafter,O
remain,O
exercisable,O
until,O
the,O
expiration,O
dates,O
otherwise,O
in,O
effect,O
had,O
the,O
Executive,O
remained,O
continuously,O
employed,O
by,O
the,O
Company,O
.,O
,O
(,O
d,O
),O
Annual,O
Bonus,O
for,O
the,O
Year,O
Preceding,O
Termination,O
—,O
If,O
not,O
previously,O
paid,O
",",O
the,O
Company,O
shall,O
pay,O
to,O
the,O
Executive,O
cash,O
incentive,O
compensation,O
for,O
the,O
year,O
preceding,O
the,O
year,O
in,O
which,O
the,O
termination,O
occurs,O
",",O
in,O
an,O
amount,O
determined,O
in,O
accordance,O
with,O
",",O
and,O
payable,O
as,O
provided,O
in,O
",",O
the,O
Company,O
s,O
Executive,O
Annual,O
Incentive,O
Compensation,O
Plan,O
(,O
or,O
successor,O
or,O
replacement,O
plan,O
),O
as,O
in,O
effect,O
for,O
such,O
preceding,O
year,O
.,O
,O
(,O
e,O
),O
Annual,O
Bonus,O
for,O
the,O
Year,O
of,O
Termination,O
—,O
In,O
the,O
case,O
of,O
a,O
Change,O
in,O
Control,O
occurring,O
with,O
the,O
prior,O
approval,O
of,O
the,O
Board,O
of,O
Directors,O
",",O
the,O
Company,O
shall,O
pay,O
to,O
the,O
Executive,O
cash,O
incentive,O
compensation,O
for,O
the,O
year,O
in,O
which,O
the,O
termination,O
occurs,O
in,O
the,O
amount,O
determined,O
in,O
accordance,O
with,O
",",O
and,O
payable,O
as,O
provided,O
in,O
",",O
the,O
Company,O
s,O
Executive,O
Annual,O
Incentive,O
Compensation,O
Plan,O
(,O
or,O
successor,O
or,O
replacement,O
plan,O
),O
as,O
in,O
effect,O
for,O
such,O
year,O
.,O
,O
(,O
f,O
),O
Effect,O
of,O
Death,O
—,O
In,O
the,O
event,O
of,O
the,O
Executive,O
s,O
death,O
after,O
he,O
becomes,O
entitled,O
to,O
payments,O
or,O
benefits,O
hereunder,O
",",O
the,O
payments,O
and,O
benefits,O
shall,O
be,O
continued,O
to,O
his,O
or,O
her,O
spouse,O
for,O
the,O
remainder,O
of,O
the,O
applicable,O
36-,O
",",O
24-,O
or,O
12-month,O
period,O
.,O
,O
If,O
the,O
Executive,O
is,O
not,O
married,O
",",O
the,O
payments,O
and,O
benefits,O
shall,O
cease,O
on,O
his,O
or,O
her,O
date,O
of,O
death,O
.,O
,O
(,O
g,O
),O
Allocation,O
for,O
Non-Competition,O
Obligation,O
.,O
,O
—,O
A,O
portion,O
of,O
the,O
payments,O
paid,O
to,O
Executive,O
under,O
this,O
Agreement,O
in,O
the,O
amount,O
of,O
$,O
"75,000",O
is,O
paid,O
to,O
Executive,O
as,O
consideration,O
for,O
Executive,O
s,O
Non-Competition,O
Obligation,O
under,O
Article,O
VII,O
of,O
this,O
Agreement,O
.,O
,O
LIMITATION,O
OF,O
BENEFITS,O
.,O
,O
Limitation,O
of,O
Amount,O
—,O
Notwithstanding,O
anything,O
in,O
this,O
Agreement,O
to,O
the,O
contrary,O
",",O
if,O
any,O
of,O
the,O
compensation,O
or,O
benefits,O
payable,O
",",O
or,O
to,O
be,O
provided,O
",",O
to,O
the,O
Executive,O
by,O
the,O
Company,O
under,O
this,O
Agreement,O
or,O
otherwise,O
are,O
treated,O
as,O
Excess,O
Severance,O
Payments,O
(,O
whether,O
alone,O
or,O
in,O
conjunction,O
with,O
payments,O
or,O
benefits,O
outside,O
of,O
this,O
Agreement,O
),O
",",O
the,O
compensation,O
and,O
benefits,O
provided,O
under,O
this,O
Agreement,O
or,O
otherwise,O
shall,O
be,O
modified,O
or,O
reduced,O
in,O
the,O
manner,O
provided,O
in,O
Section,O
2,O
below,O
to,O
the,O
extent,O
necessary,O
so,O
that,O
the,O
compensation,O
and,O
benefits,O
payable,O
or,O
to,O
be,O
provided,O
to,O
the,O
Executive,O
under,O
this,O
Agreement,O
that,O
are,O
treated,O
as,O
Severance,O
Payments,O
",",O
as,O
well,O
as,O
any,O
compensation,O
or,O
benefits,O
provided,O
outside,O
of,O
this,O
Agreement,O
that,O
are,O
so,O
treated,O
",",O
shall,O
not,O
cause,O
the,O
Company,O
to,O
have,O
paid,O
an,O
Excess,O
Severance,O
Payment,O
.,O
,O
In,O
computing,O
such,O
amount,O
",",O
the,O
parties,O
shall,O
take,O
into,O
account,O
all,O
provisions,O
of,O
Code,O
Section,O
280G,O
",",O
and,O
the,O
regulations,O
thereunder,O
",",O
including,O
making,O
appropriate,O
adjustments,O
to,O
such,O
calculation,O
for,O
amounts,O
established,O
to,O
be,O
Reasonable,O
Compensation,O
",",O
and,O
for,O
amounts,O
paid,O
to,O
the,O
Executive,O
as,O
consideration,O
for,O
the,O
Executive,O
s,O
Non-Competition,O
Obligation,O
under,O
Article,O
VII,O
of,O
this,O
Agreement,O
.,O
,O
The,O
determinations,O
under,O
this,O
Section,O
IV.1,O
with,O
regard,O
to,O
Excess,O
Severance,O
Payments,O
shall,O
be,O
made,O
by,O
an,O
independent,O
accounting,O
firm,O
selected,O
by,O
the,O
Company,O
and,O
the,O
Executive,O
",",O
which,O
shall,O
provide,O
detailed,O
supporting,O
calculations,O
to,O
the,O
parties,O
.,O
,O
Modification,O
of,O
Amount,O
—,O
In,O
the,O
event,O
that,O
the,O
amount,O
of,O
any,O
Severance,O
Payments,O
which,O
would,O
be,O
payable,O
to,O
or,O
for,O
the,O
benefit,O
of,O
the,O
Executive,O
under,O
this,O
Agreement,O
must,O
be,O
modified,O
or,O
reduced,O
to,O
comply,O
with,O
this,O
Article,O
",",O
the,O
Executive,O
shall,O
direct,O
which,O
Severance,O
Payments,O
are,O
to,O
be,O
modified,O
or,O
reduced,O
but,O
only,O
to,O
the,O
extent,O
that,O
the,O
right,O
to,O
direct,O
",",O
and,O
the,O
actual,O
direction,O
of,O
",",O
which,O
Severance,O
Payments,O
are,O
to,O
be,O
modified,O
or,O
reduced,O
does,O
not,O
result,O
in,O
any,O
failure,O
of,O
this,O
Agreement,O
to,O
comply,O
with,O
Section,O
409A,O
of,O
the,O
Code,O
.,O
,O
If,O
the,O
right,O
to,O
direct,O
",",O
or,O
the,O
actual,O
direction,O
of,O
",",O
which,O
Severance,O
Payments,O
are,O
to,O
be,O
modified,O
or,O
reduced,O
would,O
result,O
in,O
any,O
failure,O
of,O
this,O
Agreement,O
or,O
any,O
other,O
arrangement,O
to,O
comply,O
with,O
Section,O
409A,O
of,O
the,O
Code,O
",",O
then,O
",",O
in,O
lieu,O
of,O
the,O
Executive,O
s,O
right,O
to,O
direct,O
which,O
Severance,O
Payments,O
are,O
to,O
be,O
reduced,O
or,O
modified,O
",",O
the,O
order,O
of,O
reduction,O
",",O
on,O
a,O
pro,O
rata,O
basis,O
within,O
each,O
category,O
",",O
shall,O
be,O
first,O
any,O
such,O
cash,O
payments,O
",",O
next,O
any,O
equity,O
compensation,O
",",O
then,O
any,O
medical,O
or,O
life,O
insurance,O
and,O
lastly,O
any,O
other,O
remaining,O
payments,O
or,O
benefits,O
.,O
,O
No,O
increase,O
in,O
the,O
amount,O
of,O
any,O
payment,O
shall,O
be,O
made,O
without,O
the,O
consent,O
of,O
the,O
Company,O
.,O
,O
Avoidance,O
of,O
Penalty,O
Taxes,O
—,O
This,O
Article,O
shall,O
be,O
interpreted,O
so,O
as,O
to,O
avoid,O
the,O
imposition,O
of,O
excise,O
taxes,O
on,O
the,O
Executive,O
under,O
Section,O
4999,O
of,O
the,O
Code,O
or,O
the,O
disallowance,O
of,O
a,O
deduction,O
to,O
the,O
Company,O
pursuant,O
to,O
Section,O
280G,O
(,O
a,O
),O
of,O
the,O
Code,O
with,O
respect,O
to,O
amounts,O
payable,O
under,O
this,O
Agreement,O
or,O
otherwise,O
.,O
,O
In,O
connection,O
with,O
any,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
examination,O
",",O
audit,O
or,O
other,O
inquiry,O
",",O
the,O
Company,O
and,O
the,O
Executive,O
agree,O
to,O
take,O
action,O
to,O
provide,O
",",O
and,O
to,O
cooperate,O
in,O
providing,O
",",O
evidence,O
to,O
the,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
that,O
the,O
compensation,O
and,O
benefits,O
provided,O
under,O
this,O
Agreement,O
or,O
otherwise,O
do,O
not,O
result,O
in,O
the,O
payment,O
of,O
Excess,O
Severance,O
Payments,O
.,O
,O
Additional,O
Limitation,O
—,O
In,O
addition,O
to,O
the,O
limits,O
otherwise,O
provided,O
in,O
this,O
Article,O
",",O
to,O
the,O
extent,O
permitted,O
by,O
law,O
the,O
Executive,O
may,O
in,O
his,O
or,O
her,O
sole,O
discretion,O
elect,O
to,O
reduce,O
(,O
or,O
change,O
the,O
timing,O
of,O
),O
any,O
payments,O
he,O
may,O
be,O
eligible,O
to,O
receive,O
under,O
this,O
Agreement,O
or,O
otherwise,O
to,O
prevent,O
the,O
imposition,O
of,O
excise,O
taxes,O
on,O
the,O
Executive,O
under,O
Section,O
4999,O
of,O
the,O
Code,O
or,O
to,O
otherwise,O
reduce,O
or,O
delay,O
liability,O
for,O
taxes,O
owed,O
under,O
the,O
Code,O
;,O
but,O
",",O
,O
only,O
if,O
the,O
right,O
of,O
the,O
Executive,O
to,O
elect,O
to,O
reduce,O
(,O
or,O
change,O
the,O
timing,O
of,O
),O
any,O
payments,O
he,O
or,O
she,O
may,O
be,O
eligible,O
to,O
receive,O
under,O
this,O
Agreement,O
or,O
otherwise,O
",",O
or,O
any,O
actual,O
election,O
to,O
reduce,O
(,O
or,O
change,O
the,O
timing,O
of,O
),O
any,O
payments,O
he,O
or,O
she,O
may,O
be,O
eligible,O
to,O
receive,O
under,O
this,O
Agreement,O
or,O
otherwise,O
",",O
will,O
not,O
result,O
in,O
any,O
failure,O
of,O
this,O
Agreement,O
or,O
other,O
arrangement,O
to,O
comply,O
with,O
Section,O
409A,O
of,O
the,O
Code,O
.,O
,O
Notices,O
—,O
Any,O
notice,O
to,O
a,O
party,O
required,O
or,O
permitted,O
to,O
be,O
given,O
hereunder,O
shall,O
be,O
in,O
writing,O
and,O
shall,O
be,O
deemed,O
given,O
when,O
delivered,O
and,O
shall,O
be,O
hand,O
delivered,O
",",O
sent,O
by,O
facsimile,O
transmission,O
with,O
request,O
for,O
confirmation,O
of,O
receipt,O
",",O
or,O
mailed,O
registered,O
or,O
certified,O
mail,O
(,O
return,O
receipt,O
requested,O
),O
",",O
to,O
such,O
party,O
at,O
such,O
party,O
s,O
address,O
as,O
specified,O
below,O
",",O
or,O
at,O
such,O
other,O
address,O
as,O
such,O
party,O
shall,O
specify,O
by,O
notice,O
to,O
the,O
other,O
.,O
,O
If,O
to,O
the,O
Executive,O
",",O
to,O
his,O
or,O
her,O
last,O
address,O
provided,O
to,O
the,O
Company,O
by,O
the,O
Executive,O
",",O
and,O
if,O
none,O
as,O
otherwise,O
shown,O
on,O
the,O
records,O
of,O
the,O
Company,O
.,O
,O
Assignment,O
—,O
This,O
Agreement,O
shall,O
inure,O
to,O
the,O
benefit,O
of,O
and,O
shall,O
be,O
binding,O
upon,O
the,O
parties,O
hereto,O
and,O
their,O
respective,O
executors,O
",",O
administrators,O
",",O
heirs,O
",",O
personal,O
representatives,O
and,O
successors,O
",",O
but,O
",",O
except,O
as,O
hereinafter,O
provided,O
",",O
neither,O
this,O
Agreement,O
nor,O
any,O
right,O
hereunder,O
may,O
be,O
assigned,O
or,O
transferred,O
by,O
either,O
party,O
thereto,O
",",O
or,O
by,O
any,O
beneficiary,O
or,O
any,O
other,O
person,O
",",O
nor,O
be,O
subject,O
to,O
alienation,O
",",O
anticipation,O
",",O
sale,O
",",O
pledge,O
",",O
encumbrance,O
",",O
execution,O
",",O
levy,O
or,O
other,O
legal,O
process,O
of,O
any,O
kind,O
against,O
the,O
Executive,O
",",O
his,O
or,O
her,O
beneficiary,O
or,O
any,O
other,O
person,O
.,O
,O
Notwithstanding,O
the,O
foregoing,O
",",O
any,O
person,O
or,O
business,O
entity,O
succeeding,O
to,O
substantially,O
all,O
of,O
the,O
business,O
of,O
the,O
Company,O
by,O
purchase,O
",",O
merger,O
",",O
consolidation,O
",",O
sale,O
of,O
assets,O
or,O
otherwise,O
",",O
shall,O
be,O
bound,O
by,O
this,O
Agreement,O
and,O
must,O
assume,O
all,O
obligations,O
of,O
the,O
Company,O
set,O
forth,O
in,O
this,O
Agreement,O
",",O
and,O
the,O
Company,O
shall,O
use,O
its,O
reasonable,O
best,O
efforts,O
to,O
obtain,O
such,O
assumption,O
prior,O
to,O
the,O
effective,O
date,O
of,O
any,O
such,O
succession,O
.,O
,O
No,O
Obligation,O
to,O
Fund,O
—,O
The,O
agreement,O
of,O
the,O
Company,O
(,O
or,O
its,O
successor,O
),O
to,O
make,O
payments,O
to,O
the,O
Executive,O
hereunder,O
shall,O
represent,O
solely,O
the,O
unsecured,O
obligation,O
of,O
the,O
Company,O
(,O
and,O
its,O
successor,O
),O
",",O
except,O
to,O
the,O
extent,O
the,O
Company,O
(,O
or,O
its,O
successor,O
),O
in,O
its,O
sole,O
discretion,O
elects,O
in,O
whole,O
or,O
in,O
part,O
to,O
fund,O
its,O
obligations,O
under,O
this,O
Agreement,O
pursuant,O
to,O
a,O
trust,O
arrangement,O
or,O
otherwise,O
.,O
,O
Applicable,O
Law,O
—,O
This,O
Agreement,O
shall,O
be,O
governed,O
by,O
and,O
construed,O
and,O
enforced,O
in,O
accordance,O
with,O
the,O
laws,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
Georgia,I-LOCATION
.,O
,O
Arbitration,O
of,O
Disputes,O
;,O
Expenses,O
—,O
All,O
claims,O
by,O
the,O
Executive,O
for,O
compensation,O
and,O
benefits,O
under,O
this,O
Agreement,O
shall,O
be,O
directed,O
to,O
and,O
determined,O
by,O
the,O
Board,O
and,O
shall,O
be,O
in,O
writing,O
.,O
,O
submission,O
of,O
such,O
claim,O
",",O
and,O
shall,O
set,O
forth,O
the,O
specific,O
reasons,O
for,O
the,O
denial,O
and,O
the,O
specific,O
provisions,O
of,O
this,O
Agreement,O
relied,O
upon,O
.,O
,O
Any,O
further,O
dispute,O
or,O
controversy,O
arising,O
under,O
or,O
in,O
connection,O
with,O
this,O
Agreement,O
shall,O
be,O
settled,O
exclusively,O
by,O
arbitration,O
in,O
Atlanta,I-LOCATION
",",O
Georgia,I-LOCATION
",",O
in,O
accordance,O
with,O
the,O
commercial,O
arbitration,O
rules,O
of,O
the,O
American,I-BUSINESS
Arbitration,I-BUSINESS
Association,I-BUSINESS
then,O
in,O
effect,O
.,O
,O
The,O
arbitration,O
award,O
shall,O
be,O
final,O
and,O
binding,O
upon,O
the,O
parties,O
",",O
and,O
judgment,O
upon,O
the,O
award,O
may,O
be,O
entered,O
on,O
the,O
arbitrator,O
s,O
award,O
in,O
any,O
court,O
having,O
jurisdiction,O
.,O
,O
Any,O
arbitration,O
award,O
in,O
favor,O
of,O
the,O
Executive,O
",",O
in,O
whole,O
or,O
in,O
part,O
",",O
shall,O
include,O
interest,O
",",O
at,O
the,O
rate,O
of,O
10,O
%,O
per,O
annum,O
",",O
on,O
the,O
amount,O
awarded,O
from,O
the,O
date,O
it,O
was,O
due,O
for,O
payment,O
as,O
provided,O
in,O
this,O
Agreement,O
.,O
,O
In,O
the,O
event,O
the,O
Executive,O
incurs,O
legal,O
fees,O
and,O
other,O
expenses,O
in,O
seeking,O
to,O
obtain,O
or,O
enforce,O
any,O
rights,O
or,O
benefits,O
provided,O
by,O
this,O
Agreement,O
and,O
is,O
successful,O
",",O
in,O
whole,O
or,O
in,O
part,O
",",O
in,O
obtaining,O
or,O
enforcing,O
any,O
such,O
rights,O
or,O
benefits,O
through,O
settlement,O
",",O
arbitration,O
or,O
otherwise,O
",",O
the,O
Company,O
shall,O
pay,O
",",O
and,O
any,O
arbitration,O
award,O
shall,O
include,O
",",O
the,O
Executive,O
s,O
reasonable,O
legal,O
fees,O
and,O
expenses,O
incurred,O
in,O
enforcing,O
this,O
Agreement,O
and,O
the,O
Executive,O
s,O
share,O
of,O
the,O
fees,O
of,O
the,O
arbitrator,O
",",O
such,O
fees,O
and,O
expenses,O
to,O
be,O
paid,O
by,O
the,O
Company,O
promptly,O
but,O
in,O
any,O
event,O
within,O
30,O
days,O
after,O
any,O
final,O
settlement,O
",",O
arbitration,O
or,O
adjudication,O
of,O
any,O
denial,O
of,O
claim,O
for,O
benefits,O
hereunder,O
.,O
,O
Except,O
to,O
the,O
extent,O
provided,O
in,O
the,O
preceding,O
sentence,O
",",O
each,O
party,O
shall,O
pay,O
its,O
own,O
legal,O
fees,O
and,O
other,O
expenses,O
associated,O
with,O
any,O
dispute,O
",",O
provided,O
",",O
that,O
the,O
fee,O
for,O
the,O
arbitrator,O
shall,O
be,O
shared,O
equally,O
.,O
,O
Amendment,O
—,O
This,O
Agreement,O
may,O
only,O
be,O
amended,O
by,O
a,O
written,O
instrument,O
signed,O
by,O
the,O
parties,O
hereto,O
",",O
which,O
makes,O
specific,O
reference,O
to,O
this,O
Agreement,O
.,O
,O
Severability,O
—,O
If,O
any,O
provision,O
of,O
this,O
Agreement,O
shall,O
be,O
held,O
invalid,O
or,O
unenforceable,O
by,O
any,O
court,O
of,O
competent,O
jurisdiction,O
",",O
such,O
holding,O
shall,O
not,O
invalidate,O
or,O
render,O
unenforceable,O
any,O
other,O
provisions,O
hereof,O
.,O
,O
Other,O
Benefits,O
—,O
Nothing,O
in,O
this,O
Agreement,O
shall,O
limit,O
or,O
replace,O
the,O
compensation,O
or,O
benefits,O
payable,O
to,O
the,O
Executive,O
",",O
or,O
otherwise,O
adversely,O
affect,O
the,O
Executive,O
s,O
rights,O
",",O
under,O
any,O
other,O
benefit,O
plan,O
",",O
program,O
or,O
agreement,O
to,O
which,O
the,O
Executive,O
is,O
a,O
party,O
.,O
,O
SECTION,O
409A,O
COMPLIANCE,O
.,O
,O
Notwithstanding,O
any,O
other,O
provision,O
of,O
this,O
Agreement,O
to,O
the,O
contrary,O
",",O
it,O
is,O
intended,O
that,O
any,O
payment,O
or,O
benefit,O
provided,O
pursuant,O
to,O
or,O
in,O
connection,O
with,O
this,O
Agreement,O
that,O
is,O
considered,O
to,O
be,O
nonqualified,O
deferred,O
compensation,O
subject,O
to,O
Section,O
409A,O
of,O
the,O
Code,O
shall,O
be,O
provided,O
and,O
paid,O
in,O
a,O
manner,O
",",O
and,O
at,O
such,O
time,O
",",O
including,O
without,O
limitation,O
payment,O
and,O
provision,O
of,O
benefits,O
only,O
in,O
connection,O
with,O
the,O
occurrence,O
of,O
a,O
permissible,O
payment,O
event,O
contained,O
in,O
Section,O
409A,O
",",O
that,O
complies,O
with,O
the,O
applicable,O
requirements,O
of,O
Section,O
409A,O
of,O
the,O
Code,O
",",O
to,O
avoid,O
the,O
unfavorable,O
tax,O
consequences,O
provided,O
therein,O
for,O
non-compliance,O
.,O
,O
For,O
purposes,O
of,O
this,O
Agreement,O
",",O
all,O
rights,O
to,O
payments,O
and,O
benefits,O
hereunder,O
shall,O
be,O
treated,O
as,O
rights,O
to,O
receive,O
a,O
series,O
of,O
separate,O
payments,O
and,O
benefits,O
to,O
the,O
fullest,O
extent,O
allowed,O
by,O
Section,O
409A,O
of,O
the,O
Code,O
.,O
,O
required,O
by,O
Section,O
409A,O
of,O
the,O
Code,O
(,O
the,O
409A,O
deferral,O
period,O
),O
.,O
,O
In,O
the,O
event,O
such,O
payments,O
are,O
otherwise,O
due,O
to,O
be,O
made,O
during,O
the,O
409A,O
deferral,O
period,O
",",O
the,O
payments,O
which,O
would,O
otherwise,O
have,O
been,O
made,O
in,O
the,O
409A,O
deferral,O
period,O
shall,O
be,O
accumulated,O
and,O
paid,O
in,O
a,O
lump,O
sum,O
as,O
soon,O
as,O
the,O
409A,O
deferral,O
period,O
ends,O
",",O
and,O
the,O
balance,O
of,O
the,O
payments,O
shall,O
be,O
made,O
as,O
otherwise,O
scheduled,O
.,O
,O
In,O
the,O
event,O
benefits,O
are,O
required,O
to,O
be,O
deferred,O
",",O
any,O
such,O
benefit,O
may,O
be,O
provided,O
during,O
the,O
409A,O
deferral,O
period,O
at,O
the,O
Executive,O
s,O
expense,O
",",O
with,O
the,O
Executive,O
having,O
the,O
right,O
to,O
reimbursement,O
from,O
the,O
Company,O
once,O
the,O
409A,O
deferral,O
period,O
ends,O
",",O
and,O
the,O
balance,O
of,O
the,O
benefits,O
shall,O
be,O
provided,O
as,O
otherwise,O
scheduled,O
.,O
,O
For,O
purposes,O
of,O
this,O
Agreement,O
",",O
termination,O
or,O
cessation,O
of,O
employment,O
shall,O
mean,O
a,O
separation,O
from,O
service,O
within,O
the,O
meaning,O
of,O
Section,O
409A,O
of,O
the,O
Code,O
where,O
it,O
is,O
reasonably,O
anticipated,O
that,O
no,O
further,O
services,O
would,O
be,O
performed,O
after,O
such,O
date,O
or,O
that,O
the,O
level,O
of,O
bona,O
fide,O
services,O
the,O
Executive,O
would,O
perform,O
after,O
that,O
date,O
(,O
whether,O
as,O
an,O
employee,O
or,O
independent,O
contractor,O
),O
would,O
permanently,O
decrease,O
to,O
no,O
more,O
than,O
20,O
%,O
of,O
the,O
average,O
level,O
of,O
bona,O
fide,O
services,O
performed,O
over,O
the,O
immediately,O
preceding,O
36-month,O
period,O
(,O
or,O
",",O
if,O
lesser,O
",",O
Executive,O
s,O
period,O
of,O
service,O
),O
.,O
,O
NON-COMPETITION,O
OBLIGATION,O
For,O
a,O
period,O
of,O
six,O
(,O
6,O
),O
months,O
following,O
Executive,O
s,O
termination,O
of,O
employment,O
for,O
any,O
reason,O
",",O
Executive,O
shall,O
not,O
(,O
a,O
),O
organize,O
or,O
form,O
any,O
other,O
business,O
that,O
will,O
compete,O
with,O
the,O
Business,O
of,O
the,O
Company,O
(,O
as,O
defined,O
below,O
),O
or,O
(,O
b,O
),O
engage,O
in,O
the,O
executive,O
management,O
of,O
",",O
or,O
provide,O
consulting,O
services,O
concerning,O
the,O
executive,O
management,O
of,O
",",O
any,O
person,O
or,O
business,O
entity,O
that,O
competes,O
with,O
the,O
Business,O
of,O
the,O
Company,O
",",O
other,O
than,O
the,O
Company,O
or,O
its,O
affiliates,O
within,O
the,O
Territory,O
.,O
,O
The,O
term,O
Business,O
of,O
the,O
Company,O
means,O
the,O
design,O
",",O
development,O
",",O
manufacturing,O
",",O
sale,O
and,O
provision,O
of,O
wireless,O
connectivity,O
solutions,O
addressing,O
the,O
enterprise,O
mobility,O
",",O
communications-on-the-move,O
",",O
tracking,O
and,O
in-flight,O
connectivity,O
markets,O
for,O
commercial,O
and,O
government,O
users,O
",",O
including,O
but,O
not,O
limited,O
to,O
:,O
,O
The,O
design,O
",",O
development,O
",",O
manufacturing,O
",",O
sale,O
and,O
provision,O
of,O
(,O
a,O
),O
satellite-based,O
communications,O
through,O
a,O
broad,O
array,O
of,O
terminals,O
and,O
antennas,O
for,O
the,O
aeronautical,O
markets,O
and,O
(,O
b,O
),O
in-cabin,O
connection,O
devices,O
and,O
computers,O
to,O
process,O
data,O
on,O
board,O
aircraft,O
",",O
including,O
rugged,O
data,O
storage,O
",",O
airborne,O
connectivity,O
",",O
air-to-ground,O
connectivity,O
",",O
and,O
data,O
recording,O
and,O
replay,O
equipment,O
;,O
,O
(,O
ii,O
),O
Defense,O
and,O
Space,O
.,O
,O
The,O
design,O
",",O
development,O
",",O
manufacturing,O
",",O
sale,O
and,O
provision,O
of,O
antenna,O
and,O
radio,O
frequency,O
beam,O
management,O
systems,O
for,O
a,O
broad,O
range,O
of,O
military,O
and,O
commercial,O
applications,O
",",O
including,O
mobile,O
network-centric,O
operations,O
",",O
RADAR,O
for,O
battlefield,O
visibility,O
and,O
precision,O
strike,O
",",O
satellite,O
sub-system,O
",",O
and,O
commercial,O
aero,O
connectivity,O
;,O
,O
(,O
iv,O
),O
Global,O
Tracking,O
.,O
,O
The,O
design,O
",",O
development,O
",",O
manufacturing,O
",",O
sale,O
and,O
provision,O
of,O
satellite-based,O
communication,O
products,O
and,O
services,O
for,O
telematics,O
and,O
micro,O
telemetry,O
applications,O
into,O
global,O
markets,O
",",O
including,O
those,O
which,O
enable,O
customers,O
to,O
locate,O
",",O
track,O
",",O
communicate,O
",",O
and,O
safeguard,O
mobile,O
assets,O
",",O
fleets,O
",",O
cargo,O
and,O
personnel,O
",",O
as,O
well,O
as,O
to,O
monitor,O
fixed,O
assets,O
in,O
hostile,O
and,O
remote,O
terrains,O
.,O
,O
The,O
term,O
Territory,O
means,O
the,O
territory,O
for,O
which,O
Executive,O
is,O
providing,O
services,O
at,O
the,O
time,O
of,O
termination,O
of,O
Executive,O
s,O
employment,O
.,O
,O
Executive,O
acknowledges,O
and,O
agrees,O
that,O
the,O
Territory,O
identified,O
in,O
this,O
Article,O
VII,O
is,O
an,O
area,O
for,O
which,O
Executive,O
performs,O
services,O
for,O
the,O
Company,O
by,O
being,O
actively,O
engaged,O
as,O
a,O
member,O
of,O
the,O
Company,O
s,O
executive,O
management,O
team,O
.,O
,O
Executive,O
agrees,O
that,O
Executive,O
s,O
obligations,O
under,O
this,O
Article,O
VII,O
are,O
obligations,O
which,O
will,O
continue,O
beyond,O
the,O
date,O
Executive,O
s,O
employment,O
terminates,O
and,O
that,O
such,O
obligations,O
are,O
reasonable,O
and,O
necessary,O
to,O
protect,O
the,O
Company,O
s,O
legitimate,O
business,O
interests,O
.,O
,O
Executive,O
agrees,O
that,O
the,O
remedies,O
at,O
law,O
available,O
to,O
the,O
Company,O
for,O
any,O
actual,O
or,O
threatened,O
breach,O
by,O
Executive,O
of,O
the,O
covenants,O
in,O
this,O
Article,O
VII,O
would,O
be,O
inadequate,O
and,O
that,O
the,O
Company,O
shall,O
be,O
entitled,O
to,O
specific,O
performance,O
of,O
the,O
covenants,O
in,O
this,O
Article,O
VII,O
",",O
including,O
entry,O
of,O
an,O
ex,O
parte,O
",",O
temporary,O
restraining,O
order,O
in,O
state,O
or,O
federal,O
court,O
",",O
preliminary,O
and,O
permanent,O
injunctive,O
relief,O
against,O
activities,O
in,O
violation,O
of,O
this,O
Article,O
VII,O
",",O
or,O
both,O
",",O
or,O
other,O
appropriate,O
judicial,O
remedy,O
",",O
writ,O
or,O
order,O
",",O
in,O
addition,O
to,O
any,O
damages,O
and,O
legal,O
expenses,O
which,O
the,O
Company,O
may,O
be,O
legally,O
entitled,O
to,O
recover,O
without,O
the,O
purchase,O
and,O
posting,O
of,O
bond,O
or,O
other,O
security,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
the,O
Company,O
has,O
caused,O
this,O
Agreement,O
to,O
be,O
executed,O
on,O
its,O
behalf,O
by,O
its,O
duly,O
authorized,O
officers,O
and,O
the,O
Executive,O
has,O
hereunder,O
set,O
his,O
or,O
her,O
hand,O
",",O
as,O
of,O
the,O
date,O
first,O
above,O
written,O
.,O
,O
-DOCSTART-,O
,O
If,O
the,O
filing,O
person,O
has,O
previously,O
filed,O
a,O
statement,O
on,O
Schedule,I-MISCELLANEOUS
13G,I-MISCELLANEOUS
to,O
report,O
the,O
acquisition,O
that,O
is,O
the,O
subject,O
of,O
this,O
Schedule,I-MISCELLANEOUS
13D,I-MISCELLANEOUS
",",O
and,O
is,O
filing,O
this,O
schedule,O
because,O
of,O
ss.ss.240.13d-l,O
(,O
e,O
),O
",",O
240.13d-l,O
(,O
f,O
),O
or,O
240.13d-1,O
(,O
g,O
),O
",",O
check,O
the,O
following,O
box,O
.,O
,O
Note,O
:,O
Schedules,O
filed,O
in,O
paper,O
format,O
shall,O
include,O
a,O
signed,O
original,O
and,O
five,O
copies,O
of,O
the,O
schedule,O
",",O
including,O
all,O
exhibits,O
.,O
,O
See,O
ss.240.13d-7,O
for,O
other,O
parties,O
to,O
whom,O
copies,O
are,O
to,O
be,O
sent,O
.,O
,O
The,O
information,O
required,O
on,O
the,O
remainder,O
of,O
this,O
cover,O
page,O
shall,O
not,O
be,O
deemed,O
to,O
be,O
filed,O
for,O
the,O
purpose,O
of,O
Section,O
18,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
(,O
Act,O
),O
or,O
otherwise,O
subject,O
to,O
the,O
liabilities,O
of,O
that,O
section,O
of,O
the,O
Act,O
but,O
shall,O
be,O
subject,O
to,O
all,O
other,O
provisions,O
of,O
the,O
Act,O
(,O
however,O
",",O
see,O
the,O
Notes,O
),O
.,O
,O
(,O
1,O
),O
Beneficial,O
ownership,O
is,O
disclaimed,O
with,O
respect,O
to,O
certain,O
securities,O
of,O
the,O
Issuer,O
.,O
,O
See,O
Item,O
5,O
.,O
,O
(,O
2,O
),O
Includes,O
"30,670,422",O
shares,O
of,O
Class,O
B,O
Common,O
Stock,O
",",O
which,O
are,O
convertible,O
at,O
the,O
option,O
of,O
the,O
holder,O
into,O
an,O
equivalent,O
number,O
of,O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
.,O
,O
Includes,O
"68,431",O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
owned,O
by,O
H,I-BUSINESS
C,I-BUSINESS
Crown,I-BUSINESS
Corp.,I-BUSINESS
.,O
,O
(,O
1,O
),O
Beneficial,O
ownership,O
is,O
disclaimed,O
with,O
respect,O
to,O
certain,O
securities,O
of,O
the,O
Issuer,O
.,O
,O
See,O
Item,O
5,O
.,O
,O
(,O
2,O
),O
Includes,O
"30,670,422",O
shares,O
of,O
Class,O
B,O
Common,O
Stock,O
",",O
which,O
are,O
convertible,O
at,O
the,O
option,O
of,O
the,O
holder,O
into,O
an,O
equivalent,O
number,O
of,O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
.,O
,O
Includes,O
"68,431",O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
owned,O
by,O
H,I-BUSINESS
C,I-BUSINESS
Crown,I-BUSINESS
Corp.,I-BUSINESS
.,I-BUSINESS
,O
(,O
1,O
),O
Beneficial,O
ownership,O
is,O
disclaimed,O
with,O
respect,O
to,O
certain,O
securities,O
of,O
the,O
Issuer,O
.,O
,O
See,O
Item,O
5,O
.,O
,O
(,O
2,O
),O
Includes,O
"30,670,422",O
shares,O
of,O
Class,O
B,O
Common,O
Stock,O
",",O
which,O
are,O
convertible,O
at,O
the,O
option,O
of,O
the,O
holder,O
into,O
an,O
equivalent,O
number,O
of,O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
.,O
,O
Includes,O
"68,431",O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
owned,O
by,O
H,I-BUSINESS
C,I-BUSINESS
Crown,I-BUSINESS
Corp.,I-BUSINESS
.,I-BUSINESS
,O
(,O
1,O
),O
Beneficial,O
ownership,O
is,O
disclaimed,O
with,O
respect,O
to,O
certain,O
securities,O
of,O
the,O
Issuer,O
.,O
,O
See,O
Item,O
5,O
.,O
,O
(,O
2,O
),O
Includes,O
"30,670,422",O
shares,O
of,O
Class,O
B,O
Common,O
Stock,O
",",O
which,O
are,O
convertible,O
at,O
the,O
option,O
of,O
the,O
holder,O
into,O
an,O
equivalent,O
number,O
of,O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
.,O
,O
(,O
1,O
),O
Beneficial,O
ownership,O
is,O
disclaimed,O
with,O
respect,O
to,O
certain,O
securities,O
of,O
the,O
Issuer,O
.,O
,O
See,O
Item,O
5,O
.,O
,O
(,O
2,O
),O
Includes,O
"30,670,422",O
shares,O
of,O
Class,O
B,O
Common,O
Stock,O
",",O
which,O
are,O
convertible,O
at,O
the,O
option,O
of,O
the,O
holder,O
into,O
an,O
equivalent,O
number,O
of,O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
.,O
,O
This,O
Schedule,I-MISCELLANEOUS
13D/A,I-MISCELLANEOUS
Amendment,O
No.,O
12,O
amends,O
and,O
supplements,O
the,O
Schedule,I-MISCELLANEOUS
13D,I-MISCELLANEOUS
filed,O
previously,O
by,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
",",I-BUSINESS
Incorporated,I-BUSINESS
",",O
H.A.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
H,I-BUSINESS
C,I-BUSINESS
Crown,I-BUSINESS
Corp.,I-BUSINESS
",",O
Hallmark,I-BUSINESS
Entertainment,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
Hallmark,I-BUSINESS
Entertainment,I-BUSINESS
Investments,I-BUSINESS
Co.,I-BUSINESS
",",O
jointly,O
with,O
respect,O
to,O
the,O
securities,O
of,O
the,O
Issuer,O
(,O
the,O
Schedule,I-MISCELLANEOUS
13D,I-MISCELLANEOUS
),O
.,O
,O
Capitalized,O
terms,O
used,O
but,O
not,O
otherwise,O
defined,O
herein,O
have,O
the,O
meanings,O
set,O
forth,O
in,O
the,O
Schedule,I-MISCELLANEOUS
13D,I-MISCELLANEOUS
.,O
,O
PURPOSE,O
OF,O
TRANSACTION,O
.,O
,O
Item,O
4,O
of,O
the,O
Schedule,I-MISCELLANEOUS
13D,I-MISCELLANEOUS
",",O
as,O
it,O
has,O
been,O
amended,O
from,O
time,O
to,O
time,O
",",O
is,O
hereby,O
further,O
amended,O
as,O
follows,O
:,O
,O
On,O
February,O
26,O
",",O
2010,O
",",O
the,O
Reporting,O
Persons,O
entered,O
into,O
that,O
certain,O
Master,O
Recapitalization,O
Agreement,O
",",O
dated,O
February,O
26,O
",",O
2010,O
",",O
by,O
and,O
among,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
",",O
HCC,I-BUSINESS
",",O
HEH,I-BUSINESS
",",O
the,O
Issuer,O
",",O
Crown,I-BUSINESS
Media,I-BUSINESS
United,I-BUSINESS
States,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
and,O
certain,O
subsidiaries,O
of,O
the,O
Issuer,O
(,O
the,O
Master,O
Recapitalization,O
Agreement,O
),O
.,O
,O
A,O
copy,O
of,O
the,O
Master,O
Recapitalization,O
Agreement,O
has,O
been,O
filed,O
as,O
an,O
exhibit,O
to,O
this,O
Schedule,I-MISCELLANEOUS
13D/A,I-MISCELLANEOUS
Amendment,O
No.,O
The,O
Master,O
Recapitalization,O
Agreement,O
provides,O
for,O
the,O
recapitalization,O
of,O
the,O
HCC,I-BUSINESS
Debt,O
due,O
from,O
the,O
Issuer,O
and,O
its,O
subsidiaries,O
to,O
HCC,I-BUSINESS
and,O
its,O
affiliates,O
and,O
certain,O
related,O
transactions,O
(,O
collectively,O
",",O
the,O
Transactions,O
),O
.,O
,O
Consummation,O
of,O
the,O
Transactions,O
is,O
subject,O
to,O
the,O
satisfaction,O
of,O
certain,O
conditions,O
set,O
forth,O
in,O
the,O
Master,O
Recapitalization,O
Agreement,O
.,O
,O
Upon,O
consummation,O
of,O
the,O
Transactions,O
",",O
among,O
other,O
things,O
:,O
,O
$,O
315,O
million,O
of,O
the,O
HCC,I-BUSINESS
Debt,O
would,O
be,O
converted,O
into,O
an,O
equal,O
principal,O
amount,O
of,O
new,O
debt,O
to,O
be,O
issued,O
to,O
HCC,I-BUSINESS
upon,O
the,O
terms,O
set,O
forth,O
in,O
the,O
Credit,O
Agreement,O
filed,O
as,O
Exhibit,O
10.2,O
to,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
of,O
the,O
Issuer,O
",",O
dated,O
March,O
1,O
",",O
2010,O
;,O
,O
the,O
balance,O
of,O
the,O
HCC,I-BUSINESS
Debt,O
would,O
be,O
converted,O
into,O
shares,O
of,O
the,O
Issuer,O
s,O
Class,O
A,O
common,O
stock,O
",",O
par,O
value,O
$,O
0.01,O
per,O
share,O
(,O
Class,O
A,O
Common,O
Stock,O
),O
",",O
based,O
on,O
the,O
Conversion,O
Price,O
(,O
as,O
defined,O
in,O
the,O
Master,O
Recapitalization,O
Agreement,O
),O
",",O
such,O
that,O
HCC,I-BUSINESS
would,O
hold,O
90.1,O
%,O
of,O
the,O
outstanding,O
Class,O
A,O
Common,O
Stock,O
(,O
excluding,O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
issuable,O
upon,O
the,O
conversion,O
of,O
shares,O
of,O
convertible,O
preferred,O
stock,O
),O
if,O
the,O
Transactions,O
were,O
to,O
close,O
on,O
March,O
31,O
",",O
2010,O
.,O
,O
The,O
Transactions,O
include,O
the,O
filing,O
of,O
a,O
Second,O
Amended,O
and,O
Restated,O
Certificate,O
of,O
Incorporation,O
of,O
the,O
Issuer,O
filed,O
as,O
Exhibit,O
3.1,O
to,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
of,O
the,O
Issuer,O
",",O
dated,O
March,O
1,O
",",O
2010,O
(,O
the,O
Second,O
Amended,O
Charter,O
),O
with,O
the,O
Secretary,O
of,O
State,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
Delaware,I-LOCATION
to,O
authorize,O
additional,O
shares,O
of,O
common,O
stock,O
and,O
convertible,O
preferred,O
stock,O
in,O
amounts,O
sufficient,O
for,O
the,O
proposed,O
issuance,O
of,O
common,O
stock,O
and,O
convertible,O
preferred,O
stock,O
and,O
for,O
the,O
ultimate,O
conversion,O
of,O
such,O
convertible,O
preferred,O
stock,O
into,O
common,O
stock,O
.,O
,O
Upon,O
the,O
filing,O
of,O
the,O
Second,O
Amended,O
Charter,O
",",O
each,O
share,O
of,O
the,O
Issuer,O
s,O
Class,O
B,O
common,O
stock,O
",",O
par,O
value,O
$,O
0.01,O
per,O
share,O
",",O
outstanding,O
immediately,O
prior,O
to,O
the,O
filing,O
will,O
be,O
automatically,O
converted,O
into,O
one,O
share,O
of,O
Class,O
A,O
Common,O
Stock,O
.,O
,O
The,O
rights,O
of,O
the,O
new,O
class,O
of,O
convertible,O
preferred,O
stock,O
that,O
will,O
be,O
issued,O
to,O
HCC,I-BUSINESS
are,O
provided,O
in,O
the,O
Certificate,O
of,O
Designation,O
",",O
which,O
will,O
also,O
be,O
filed,O
with,O
the,O
Secretary,O
of,O
State,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
Delaware,I-LOCATION
as,O
part,O
of,O
the,O
Transactions,O
.,O
,O
The,O
Transactions,O
also,O
include,O
the,O
merger,O
of,O
HEIC,I-BUSINESS
(,O
the,O
HEIC,I-BUSINESS
Merger,O
),O
with,O
and,O
into,O
the,O
Issuer,O
pursuant,O
to,O
the,O
HEIC,I-BUSINESS
Merger,O
Agreement,O
(,O
as,O
defined,O
below,O
),O
and,O
the,O
merger,O
of,O
HEH,I-BUSINESS
(,O
the,O
HEH,I-BUSINESS
Merger,O
),O
with,O
and,O
into,O
the,O
Issuer,O
pursuant,O
to,O
the,O
HEH,I-BUSINESS
Merger,O
Agreement,O
(,O
as,O
defined,O
below,O
),O
",",O
each,O
as,O
described,O
in,O
more,O
detail,O
below,O
.,O
,O
In,O
addition,O
",",O
the,O
Master,O
Recapitalization,O
Agreement,O
provides,O
that,O
",",O
at,O
the,O
request,O
of,O
the,O
Special,O
Committee,O
or,O
any,O
special,O
committee,O
of,O
the,O
Issuer,O
s,O
Board,O
of,O
Directors,O
comprised,O
of,O
disinterested,O
directors,O
who,O
are,O
independent,O
of,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
",",O
the,O
Issuer,O
shall,O
file,O
a,O
Third,O
Amended,O
and,O
Restated,O
Certificate,O
of,O
Incorporation,O
filed,O
as,O
Exhibit,O
3.3,O
to,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
of,O
the,O
Issuer,O
",",O
dated,O
March,O
1,O
",",O
2010,O
(,O
the,O
Third,O
Amended,O
Charter,O
),O
in,O
order,O
to,O
effect,O
a,O
reverse,O
stock,O
split,O
of,O
the,O
Class,O
A,O
Common,O
Stock,O
.,O
,O
Under,O
the,O
Stockholders,O
Agreement,O
filed,O
as,O
Exhibit,O
4.1,O
to,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
of,O
the,O
Issuer,O
",",O
dated,O
March,O
1,O
",",O
2010,O
(,O
the,O
Stockholders,O
Agreement,O
),O
",",O
upon,O
consummation,O
of,O
the,O
Transactions,O
",",O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
will,O
agree,O
to,O
certain,O
standstill,O
provisions,O
.,O
,O
Specifically,O
",",O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
will,O
not,O
",",O
and,O
will,O
cause,O
its,O
controlled,O
affiliates,O
not,O
to,O
",",O
acquire,O
any,O
additional,O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
until,O
December,O
31,O
",",O
2013,O
except,O
in,O
the,O
case,O
of,O
any,O
of,O
the,O
following,O
:,O
,O
acquisitions,O
effected,O
with,O
the,O
prior,O
approval,O
of,O
a,O
special,O
committee,O
of,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Issuer,O
comprised,O
solely,O
of,O
independent,O
",",O
disinterested,O
directors,O
;,O
,O
acquisitions,O
of,O
additional,O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
in,O
connection,O
with,O
the,O
conversion,O
of,O
the,O
Series,O
A,O
Preferred,O
Stock,O
;,O
,O
acquisitions,O
effected,O
between,O
January,O
1,O
",",O
2012,O
and,O
December,O
31,O
",",O
2013,O
and,O
either,O
(,O
a,O
),O
in,O
connection,O
with,O
certain,O
Premium,O
Transactions,O
(,O
as,O
defined,O
below,O
),O
or,O
(,O
b,O
),O
pursuant,O
to,O
a,O
tender,O
offer,O
by,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
or,O
its,O
affiliates,O
for,O
all,O
of,O
the,O
outstanding,O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
",",O
provided,O
the,O
holders,O
of,O
Class,O
A,O
Common,O
Stock,O
not,O
affiliated,O
with,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
tender,O
",",O
in,O
the,O
aggregate,O
",",O
at,O
least,O
a,O
majority,O
of,O
the,O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
held,O
by,O
all,O
such,O
stockholders,O
at,O
such,O
time,O
.,O
,O
A,O
Premium,O
Transaction,O
is,O
a,O
transaction,O
in,O
which,O
holders,O
of,O
Class,O
A,O
Common,O
Stock,O
not,O
affiliated,O
with,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
(,O
Minority,O
Stockholders,O
),O
have,O
the,O
right,O
to,O
sell,O
their,O
Class,O
A,O
Common,O
Stock,O
in,O
connection,O
with,O
such,O
transaction,O
for,O
",",O
or,O
the,O
right,O
to,O
receive,O
in,O
connection,O
with,O
such,O
transaction,O
",",O
consideration,O
per,O
share,O
of,O
Class,O
A,O
Common,O
Stock,O
consisting,O
of,O
:,O
(,O
x,O
),O
consideration,O
equivalent,O
(,O
Equivalent,O
Consideration,O
),O
to,O
the,O
greatest,O
consideration,O
per,O
share,O
of,O
Class,O
A,O
Common,O
Stock,O
received,O
by,O
HCC,O
in,O
connection,O
with,O
such,O
transaction,O
and,O
(,O
y,O
),O
a,O
premium,O
",",O
in,O
cash,O
",",O
equal,O
to,O
$,O
0.50,O
per,O
share,O
of,O
Class,O
A,O
Common,O
Stock,O
",",O
subject,O
to,O
proportionate,O
adjustments,O
for,O
any,O
stock,O
splits,O
",",O
combinations,O
",",O
reclassifications,O
",",O
adjustments,O
",",O
sales,O
of,O
Class,O
A,O
Common,O
Stock,O
by,O
the,O
Issuer,O
",",O
sales,O
of,O
Class,O
A,O
Common,O
Stock,O
by,O
HCC,O
pursuant,O
to,O
a,O
public,O
offering,O
or,O
block,O
trade,O
as,O
provided,O
in,O
the,O
Stockholders,O
Agreement,O
",",O
or,O
any,O
similar,O
transaction,O
.,O
,O
The,O
Stockholders,O
Agreement,O
also,O
contains,O
certain,O
co-sale,O
provisions,O
restricting,O
HCC,I-BUSINESS
s,O
ability,O
to,O
sell,O
or,O
transfer,O
its,O
Class,O
A,O
Common,O
Stock,O
.,O
,O
Until,O
December,O
31,O
",",O
2013,O
",",O
HCC,I-BUSINESS
will,O
not,O
sell,O
or,O
transfer,O
its,O
Class,O
A,O
Common,O
Stock,O
to,O
a,O
third,O
party,O
except,O
:,O
,O
to,O
an,O
affiliate,O
of,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
or,O
pursuant,O
to,O
a,O
bona,O
fide,O
pledge,O
of,O
the,O
shares,O
to,O
a,O
lender,O
that,O
is,O
not,O
an,O
affiliate,O
of,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
(,O
collectively,O
",",O
a,O
Permitted,O
Transfer,O
),O
;,O
,O
on,O
or,O
after,O
January,O
1,O
",",O
2012,O
until,O
December,O
31,O
",",O
2013,O
(,O
a,O
),O
in,O
a,O
Premium,O
Transaction,O
or,O
(,O
b,O
),O
pursuant,O
to,O
a,O
public,O
offering,O
or,O
block,O
trade,O
in,O
which,O
",",O
to,O
the,O
knowledge,O
of,O
HCC,I-BUSINESS
",",O
no,O
single,O
purchaser,O
(,O
together,O
with,O
its,O
affiliates,O
and,O
associates,O
),O
will,O
acquire,O
beneficial,O
ownership,O
of,O
a,O
block,O
of,O
shares,O
of,O
the,O
Issuer,O
in,O
such,O
transaction,O
in,O
excess,O
of,O
5,O
%,O
(,O
in,O
the,O
case,O
of,O
a,O
public,O
offering,O
),O
or,O
2,O
%,O
(,O
in,O
the,O
case,O
of,O
any,O
block,O
trade,O
),O
of,O
the,O
outstanding,O
Class,O
A,O
Common,O
Stock,O
.,O
,O
From,O
and,O
after,O
January,O
1,O
",",O
2014,O
until,O
the,O
earlier,O
of,O
(,O
x,O
),O
December,O
31,O
",",O
2020,O
",",O
or,O
(,O
y,O
),O
such,O
time,O
as,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
and,O
its,O
controlled,O
affiliates,O
cease,O
to,O
own,O
a,O
majority,O
of,O
the,O
outstanding,O
Class,O
A,O
Common,O
Stock,O
",",O
HCC,I-BUSINESS
may,O
not,O
transfer,O
to,O
any,O
transferee,O
or,O
group,O
of,O
transferees,O
that,O
are,O
affiliates,O
",",O
in,O
one,O
transaction,O
or,O
in,O
a,O
series,O
of,O
related,O
transactions,O
",",O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
constituting,O
a,O
majority,O
of,O
the,O
outstanding,O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
",",O
except,O
(,O
i,O
),O
in,O
a,O
Permitted,O
Transfer,O
",",O
(,O
ii,O
),O
with,O
the,O
prior,O
approval,O
of,O
a,O
special,O
committee,O
of,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Issuer,O
comprised,O
solely,O
of,O
independent,O
disinterested,O
directors,O
",",O
or,O
(,O
iii,O
),O
in,O
a,O
transaction,O
in,O
which,O
the,O
Minority,O
Stockholders,O
have,O
the,O
right,O
to,O
sell,O
their,O
Class,O
A,O
Common,O
Stock,O
in,O
connection,O
with,O
such,O
transaction,O
for,O
",",O
or,O
the,O
right,O
to,O
receive,O
in,O
connection,O
with,O
such,O
transaction,O
",",O
Equivalent,O
Consideration,O
.,O
,O
The,O
Stockholders,O
Agreement,O
also,O
grants,O
HCC,I-BUSINESS
and,O
its,O
affiliates,O
certain,O
subscription,O
rights,O
with,O
respect,O
to,O
future,O
issuances,O
of,O
equity,O
securities,O
by,O
the,O
Issuer,O
.,O
,O
Upon,O
consummation,O
of,O
the,O
Transactions,O
",",O
HCC,I-BUSINESS
will,O
be,O
granted,O
certain,O
registration,O
rights,O
in,O
respect,O
of,O
the,O
Series,O
A,O
Preferred,O
Stock,O
and,O
Class,O
A,O
Common,O
Stock,O
pursuant,O
to,O
that,O
certain,O
Registration,O
Rights,O
Agreement,O
filed,O
as,O
Exhibit,O
4.2,O
to,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
of,O
the,O
Issuer,O
",",O
dated,O
March,O
1,O
",",O
2010,O
.,O
,O
On,O
February,O
26,O
",",O
2010,O
",",O
HEIC,I-BUSINESS
and,O
the,O
Issuer,O
entered,O
into,O
that,O
certain,O
Agreement,O
and,O
Plan,O
of,O
Merger,O
of,O
the,O
Issuer,O
and,O
HEIC,I-BUSINESS
(,O
the,O
HEIC,I-BUSINESS
Merger,O
Agreement,O
),O
.,O
,O
A,O
copy,O
of,O
the,O
HEIC,I-BUSINESS
Merger,O
Agreement,O
has,O
been,O
filed,O
as,O
an,O
exhibit,O
to,O
this,O
Schedule,I-LEGISLATION/ACT
13D/A,I-LEGISLATION/ACT
Amendment,O
No.,O
Upon,O
consummation,O
of,O
the,O
Transactions,O
",",O
pursuant,O
to,O
the,O
HEIC,I-BUSINESS
Merger,O
Agreement,O
each,O
outstanding,O
share,O
of,O
Class,O
A,O
Common,O
Stock,O
",",O
par,O
value,O
$,O
.01,O
per,O
share,O
",",O
of,O
HEIC,I-BUSINESS
(,O
HEIC,I-BUSINESS
Class,O
A,O
Common,O
Stock,O
),O
and,O
each,O
outstanding,O
share,O
of,O
Class,O
B,O
Common,O
Stock,O
",",O
par,O
value,O
$,O
.01,O
per,O
share,O
",",O
of,O
HEIC,I-BUSINESS
(,O
HEIC,I-BUSINESS
Class,O
B,O
Common,O
Stock,O
and,O
",",O
together,O
with,O
the,O
HEIC,I-BUSINESS
Class,O
A,O
Common,O
Stock,O
",",O
the,O
HEIC,I-BUSINESS
Common,O
Stock,O
),O
would,O
be,O
converted,O
into,O
that,O
number,O
of,O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
equal,O
to,O
the,O
number,O
of,O
shares,O
of,O
the,O
Issuer,O
owned,O
by,O
HEIC,I-BUSINESS
immediately,O
prior,O
to,O
the,O
HEIC,I-BUSINESS
Merger,O
divided,O
by,O
the,O
total,O
number,O
of,O
shares,O
of,O
HEIC,I-BUSINESS
Common,O
Stock,O
outstanding,O
immediately,O
prior,O
to,O
the,O
HEIC,I-BUSINESS
Merger,O
.,O
,O
On,O
February,O
26,O
",",O
2010,O
",",O
HEH,I-BUSINESS
and,O
the,O
Issuer,O
entered,O
into,O
that,O
certain,O
Agreement,O
and,O
Plan,O
of,O
Merger,O
of,O
the,O
Issuer,O
and,O
HEH,I-BUSINESS
(,O
the,O
HEH,I-BUSINESS
Merger,O
Agreement,O
),O
.,O
,O
A,O
copy,O
of,O
the,O
HEH,I-BUSINESS
Merger,O
Agreement,O
has,O
been,O
filed,O
as,O
an,O
exhibit,O
to,O
this,O
Schedule,I-MISCELLANEOUS
13D/A,I-MISCELLANEOUS
Amendment,O
No.,O
Upon,O
consummation,O
of,O
the,O
Transactions,O
",",O
pursuant,O
to,O
the,O
HEH,I-BUSINESS
Merger,O
Agreement,O
each,O
outstanding,O
share,O
of,O
common,O
stock,O
",",O
par,O
value,O
$,O
.01,O
per,O
share,O
",",O
of,O
HEH,I-BUSINESS
(,O
the,O
HEH,I-BUSINESS
Common,O
Stock,O
),O
would,O
be,O
converted,O
into,O
that,O
number,O
of,O
shares,O
of,O
Class,O
A,O
Common,O
Stock,O
equal,O
to,O
the,O
number,O
of,O
shares,O
of,O
the,O
Issuer,O
owned,O
by,O
HEH,I-BUSINESS
immediately,O
prior,O
to,O
the,O
HEH,I-BUSINESS
Merger,O
divided,O
by,O
the,O
total,O
number,O
of,O
shares,O
of,O
HEH,I-BUSINESS
Common,O
Stock,O
outstanding,O
immediately,O
prior,O
to,O
the,O
HEH,I-BUSINESS
Merger,O
.,O
,O
HCC,I-BUSINESS
has,O
reserved,O
all,O
of,O
its,O
rights,O
and,O
remedies,O
in,O
the,O
event,O
that,O
the,O
Transactions,O
are,O
not,O
consummated,O
.,O
,O
In,O
such,O
event,O
",",O
upon,O
expiration,O
of,O
the,O
Waiver,O
Period,O
",",O
HCC,I-BUSINESS
may,O
seek,O
payment,O
with,O
respect,O
to,O
the,O
HCC,I-BUSINESS
Debt,O
and,O
",",O
if,O
payments,O
required,O
with,O
respect,O
to,O
such,O
HCC,I-BUSINESS
Debt,O
are,O
not,O
made,O
",",O
to,O
exercise,O
rights,O
and,O
remedies,O
available,O
to,O
HCC,I-BUSINESS
pursuant,O
to,O
the,O
contracts,O
underlying,O
the,O
HCC,I-BUSINESS
Debt,O
and,O
applicable,O
law,O
.,O
,O
Such,O
exercise,O
of,O
rights,O
and,O
remedies,O
may,O
include,O
the,O
commencement,O
of,O
proceedings,O
under,O
Title,O
11,O
of,O
the,O
United,I-LEGISLATION/ACT
States,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
(,O
the,O
U.S.,I-LEGISLATION/ACT
Bankruptcy,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
),O
",",O
the,O
foreclosure,O
upon,O
collateral,O
for,O
the,O
HCC,I-BUSINESS
Debt,O
",",O
the,O
commencement,O
of,O
other,O
collection,O
proceedings,O
against,O
the,O
Issuer,O
or,O
the,O
proposal,O
of,O
the,O
merger,O
or,O
sale,O
of,O
the,O
Issuer,O
or,O
all,O
or,O
substantially,O
all,O
of,O
the,O
Issuer,O
s,O
assets,O
.,O
,O
Alternatively,O
",",O
HCC,I-BUSINESS
may,O
simply,O
choose,O
to,O
collect,O
all,O
of,O
the,O
Issuer,O
s,O
free,O
cash,O
flow,O
for,O
the,O
foreseeable,O
future,O
.,O
,O
Such,O
actions,O
may,O
have,O
one,O
or,O
more,O
of,O
the,O
effects,O
described,O
in,O
the,O
Instructions,O
to,O
Item,O
4,O
of,O
Schedule,O
13D,O
.,O
,O
CONTRACTS,O
",",O
ARRANGEMENTS,O
",",O
UNDERSTANDINGS,O
OR,O
RELATIONSHIPS,O
WITH,O
RESPECT,O
TO,O
SECURITIES,O
OF,O
THE,O
ISSUER,O
.,O
,O
Master,O
Recapitalization,O
Agreement,O
.,O
,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
",",O
HCC,I-BUSINESS
",",O
HEH,I-BUSINESS
",",O
the,O
Issuer,O
",",O
Crown,I-BUSINESS
Media,I-BUSINESS
United,I-BUSINESS
States,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
and,O
certain,O
subsidiaries,O
of,O
the,O
Issuer,O
are,O
parties,O
to,O
the,O
Master,O
Recapitalization,O
Agreement,O
.,O
,O
Agreement,O
and,O
Plan,O
of,O
Merger,O
of,O
Crown,I-BUSINESS
Media,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
Hallmark,I-BUSINESS
Entertainment,I-BUSINESS
Investments,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
HEIC,I-BUSINESS
and,O
the,O
Issuer,O
are,O
parties,O
to,O
the,O
HEIC,I-BUSINESS
Merger,O
Agreement,O
.,O
,O
Agreement,O
and,O
Plan,O
of,O
Merger,O
of,O
Crown,I-BUSINESS
Media,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
Hallmark,I-BUSINESS
Entertainment,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
HEH,I-BUSINESS
and,O
the,O
Issuer,O
are,O
parties,O
to,O
the,O
HEH,I-BUSINESS
Merger,O
Agreement,O
.,O
,O
The,O
terms,O
of,O
the,O
Master,O
Recapitalization,O
Agreement,O
",",O
the,O
HEIC,I-BUSINESS
Merger,O
Agreement,O
and,O
the,O
HEH,I-BUSINESS
Merger,O
Agreement,O
are,O
described,O
in,O
Item,O
2.03,O
of,O
the,O
Issuer,O
s,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
",",O
dated,O
as,O
of,O
March,O
1,O
",",O
2010,O
",",O
which,O
is,O
incorporated,O
herein,O
by,O
reference,O
.,O
,O
MATERIAL,O
TO,O
BE,O
FILED,O
AS,O
EXHIBITS,O
.,O
,O
Master,O
Recapitalization,O
Agreement,O
",",O
dated,O
February,O
26,O
",",O
2010,O
",",O
by,O
and,O
among,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
",",I-BUSINESS
Incorporated,I-BUSINESS
",",O
H,I-BUSINESS
C,I-BUSINESS
Crown,I-BUSINESS
Corp.,I-BUSINESS
",",O
Hallmark,I-BUSINESS
Entertainment,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Crown,I-BUSINESS
Media,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Crown,I-BUSINESS
Media,I-BUSINESS
United,I-BUSINESS
States,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
and,O
the,O
subsidiaries,O
of,O
Crown,I-BUSINESS
Media,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
listed,O
as,O
Guarantors,O
on,O
the,O
Credit,O
Facility,O
and,O
the,O
exhibits,O
thereto,O
(,O
incorporated,O
herein,O
by,O
reference,O
to,O
Exhibits,O
10.1,O
",",O
2.1,O
",",O
2.2,O
",",O
3.1,O
",",O
3.2,O
",",O
3.3,O
",",O
4.1,O
",",O
4.2,O
",",O
10.2,O
and,O
10.3,O
to,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
of,O
the,O
Issuer,O
",",O
dated,O
as,O
of,O
March,O
1,O
",",O
2010,O
),O
,O
Agreement,O
and,O
Plan,O
of,O
Merger,O
of,O
Crown,I-BUSINESS
Media,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
Hallmark,I-BUSINESS
Entertainment,I-BUSINESS
Investments,I-BUSINESS
Co.,I-BUSINESS
",",O
dated,O
as,O
of,O
February,O
26,O
",",O
2010,O
(,O
incorporated,O
herein,O
by,O
reference,O
to,O
Exhibit,O
2.1,O
to,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
of,O
the,O
Issuer,O
",",O
dated,O
as,O
of,O
March,O
1,O
",",O
2010,O
),O
,O
Agreement,O
and,O
Plan,O
of,O
Merger,O
of,O
Crown,I-BUSINESS
Media,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
Hallmark,I-BUSINESS
Entertainment,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
dated,O
as,O
of,O
February,O
26,O
",",O
2010,O
(,O
incorporated,O
herein,O
by,O
reference,O
to,O
Exhibit,O
2.2,O
to,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
of,O
the,O
Issuer,O
",",O
dated,O
as,O
of,O
March,O
1,O
",",O
2010,O
),O
,O
After,O
reasonable,O
inquiry,O
and,O
to,O
the,O
best,O
of,O
our,O
knowledge,O
and,O
belief,O
",",O
we,O
certify,O
that,O
the,O
information,O
set,O
forth,O
in,O
this,O
statement,O
is,O
true,O
",",O
complete,O
and,O
correct,O
.,O
,O
H,I-BUSINESS
C,I-BUSINESS
CROWN,I-BUSINESS
CORP.,I-BUSINESS
,O
HALLMARK,I-BUSINESS
ENTERTAINMENT,I-BUSINESS
HOLDINGS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
HALLMARK,I-BUSINESS
ENTERTAINMENT,I-BUSINESS
INVESTMENTS,I-BUSINESS
CO,I-BUSINESS
.,I-BUSINESS
,O
The,O
name,O
and,O
present,O
principal,O
occupation,O
of,O
each,O
of,O
the,O
directors,O
and,O
executive,O
officers,O
of,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
",",I-BUSINESS
Incorporated,I-BUSINESS
",",O
Hallmark,I-BUSINESS
Entertainment,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Hallmark,I-BUSINESS
Entertainment,I-BUSINESS
Investments,I-BUSINESS
Co.,I-BUSINESS
",",O
H,I-BUSINESS
C,I-BUSINESS
Crown,I-BUSINESS
Corp.,I-BUSINESS
and,O
H.A.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
are,O
set,O
forth,O
below,O
.,O
,O
The,O
business,O
address,O
for,O
each,O
of,O
the,O
directors,O
and,O
executive,O
officers,O
of,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
",",I-BUSINESS
Incorporated,I-BUSINESS
",",O
Hallmark,I-BUSINESS
Entertainment,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
Hallmark,I-BUSINESS
Entertainment,I-BUSINESS
Investments,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
is,O
c/o,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
",",I-BUSINESS
Incorporated,I-BUSINESS
",",O
2501,O
McGee,I-LOCATION
",",O
Kansas,I-LOCATION
City,I-LOCATION
",",O
Missouri,I-LOCATION
64108,O
.,O
,O
The,O
business,O
address,O
for,O
each,O
of,O
the,O
directors,O
and,O
executive,O
officers,O
of,O
H,I-BUSINESS
C,I-BUSINESS
Crown,I-BUSINESS
Corp.,I-BUSINESS
is,O
c/o,O
H,I-BUSINESS
C,I-BUSINESS
Crown,I-BUSINESS
Corp.,I-BUSINESS
",",O
103,O
Foulk,I-LOCATION
Road,I-LOCATION
",",O
Suite,O
214,O
",",O
Wilmington,I-LOCATION
",",O
Delaware,I-LOCATION
19803,O
.,O
,O
The,O
business,O
address,O
for,O
each,O
of,O
the,O
directors,O
and,O
executive,O
officers,O
of,O
H.A.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
is,O
c/o,O
H.A.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
103,O
Foulk,I-LOCATION
Road,I-LOCATION
",",O
Suite,O
214,O
",",O
Wilmington,I-LOCATION
",",O
Delaware,I-LOCATION
19803,O
.,O
,O
All,O
the,O
directors,O
and,O
executive,O
officers,O
listed,O
on,O
this,O
Schedule,O
I,O
are,O
United,I-LOCATION
States,I-LOCATION
citizens,O
.,O
,O
Director,O
;,O
Chief,O
Executive,O
Officer,O
of,O
T.H.E.,I-BUSINESS
New,I-BUSINESS
Voice,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Director,O
;,O
Chairman,O
of,O
the,O
Board,O
of,O
United,I-BUSINESS
Stationers,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Director,O
;,O
Chairman,O
and,O
Co-Chief,O
Executive,O
Officer,O
of,O
The,I-BUSINESS
J.M.,I-BUSINESS
,O
Director,O
;,O
President,O
Hallmark,I-BUSINESS
Hall,I-BUSINESS
of,I-BUSINESS
Fame,I-BUSINESS
Productions,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
To,O
the,O
knowledge,O
of,O
the,O
Reporting,O
Persons,O
",",O
listed,O
below,O
are,O
the,O
names,O
of,O
the,O
executive,O
officers,O
and,O
directors,O
who,O
beneficially,O
own,O
Common,O
Stock,O
",",O
along,O
with,O
the,O
number,O
of,O
shares,O
each,O
such,O
person,O
beneficially,O
owns,O
.,O
,O
To,O
the,O
knowledge,O
of,O
the,O
Reporting,O
Persons,O
",",O
the,O
persons,O
listed,O
below,O
are,O
the,O
only,O
persons,O
on,O
Schedule,O
I,O
who,O
beneficially,O
own,O
Common,O
Stock,O
.,O
,O
To,O
the,O
knowledge,O
of,O
the,O
Reporting,O
Persons,O
except,O
as,O
noted,O
below,O
",",O
(,O
a,O
),O
each,O
person,O
listed,O
below,O
has,O
the,O
sole,O
power,O
to,O
vote,O
or,O
direct,O
to,O
vote,O
and,O
dispose,O
or,O
direct,O
to,O
dispose,O
those,O
shares,O
of,O
Common,O
Stock,O
beneficially,O
owned,O
by,O
such,O
person,O
and,O
(,O
b,O
),O
each,O
person,O
beneficially,O
owns,O
shares,O
of,O
Common,O
Stock,O
representing,O
less,O
than,O
1,O
%,O
of,O
the,O
Class,O
A,O
Common,O
Stock,O
outstanding,O
.,O
,O
(,O
1,O
),O
Donald,I-PERSON
J,I-PERSON
.,I-PERSON
Hall,I-PERSON
",",I-PERSON
Jr,I-PERSON
.,I-PERSON
,O
and,O
David,I-PERSON
E.,I-PERSON
Hall,I-PERSON
each,O
may,O
be,O
deemed,O
to,O
be,O
a,O
beneficial,O
owner,O
of,O
the,O
shares,O
beneficially,O
owned,O
by,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
",",I-BUSINESS
Incorporated,I-BUSINESS
because,O
each,O
is,O
a,O
co-trustee,O
of,O
a,O
voting,O
trust,O
which,O
controls,O
all,O
of,O
the,O
voting,O
securities,O
of,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
",",I-BUSINESS
Incorporated,I-BUSINESS
and,O
each,O
is,O
a,O
director,O
and,O
an,O
officer,O
of,O
Hallmark,I-BUSINESS
Cards,I-BUSINESS
",",I-BUSINESS
Incorporated,I-BUSINESS
.,O
,O
Each,O
disclaims,O
beneficial,O
ownership,O
of,O
such,O
shares,O
",",O
except,O
to,O
the,O
extent,O
of,O
his,O
pecuniary,O
interest,O
therein,O
.,O
,O
(,O
2,O
),O
Includes,O
"4,098",O
shares,O
of,O
underlying,O
Class,O
A,O
Common,O
Stock,O
options,O
that,O
have,O
vested,O
.,O
,O
-DOCSTART-,O
,O
Approximate,O
date,O
of,O
commencement,O
of,O
proposed,O
sale,O
to,O
the,O
public,O
:,O
From,O
time,O
to,O
time,O
after,O
the,O
effective,O
date,O
of,O
this,O
registration,O
statement,O
.,O
,O
If,O
the,O
only,O
securities,O
being,O
registered,O
on,O
this,O
Form,O
are,O
being,O
offered,O
pursuant,O
to,O
dividend,O
or,O
interest,O
reinvestment,O
plans,O
",",O
please,O
check,O
the,O
following,O
box,O
.,O
,O
If,O
any,O
of,O
the,O
securities,O
being,O
registered,O
on,O
this,O
Form,O
are,O
to,O
be,O
offered,O
on,O
a,O
delayed,O
or,O
continuous,O
basis,O
pursuant,O
to,O
Rule,O
415,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
other,O
than,O
securities,O
offered,O
only,O
in,O
connection,O
with,O
dividend,O
or,O
interest,O
reinvestment,O
plans,O
",",O
check,O
the,O
following,O
box,O
.,O
,O
If,O
this,O
Form,O
is,O
filed,O
to,O
register,O
additional,O
securities,O
for,O
an,O
offering,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
please,O
check,O
the,O
following,O
box,O
and,O
list,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
registration,O
statement,O
number,O
of,O
the,O
earlier,O
effective,O
registration,O
statement,O
for,O
the,O
same,O
offering,O
.,O
,O
If,O
this,O
Form,O
is,O
a,O
post-effective,O
amendment,O
filed,O
pursuant,O
to,O
Rule,O
462,O
(,O
c,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
check,O
the,O
following,O
box,O
and,O
list,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
registration,O
statement,O
number,O
of,O
the,O
earlier,O
effective,O
registration,O
statement,O
for,O
the,O
same,O
offering,O
.,O
,O
If,O
this,O
Form,O
is,O
a,O
registration,O
statement,O
pursuant,O
to,O
General,I-LEGISLATION/ACT
Instruction,I-LEGISLATION/ACT
I.D.,I-LEGISLATION/ACT
or,O
a,O
post-effective,O
amendment,O
thereto,O
that,O
shall,O
become,O
effective,O
upon,O
filing,O
with,O
the,O
SEC,I-GOVERNMENT
pursuant,O
to,O
Rule,O
462,O
(,O
e,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
check,O
the,O
following,O
box,O
.,O
,O
If,O
this,O
Form,O
is,O
a,O
post-effective,O
amendment,O
to,O
a,O
registration,O
statement,O
filed,O
pursuant,O
to,O
General,I-LEGISLATION/ACT
Instruction,I-LEGISLATION/ACT
I.D.,I-LEGISLATION/ACT
filed,O
to,O
register,O
additional,O
securities,O
or,O
additional,O
classes,O
of,O
securities,O
pursuant,O
to,O
Rule,O
413,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
check,O
the,O
following,O
box,O
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
large,O
accelerated,O
filer,O
",",O
an,O
accelerated,O
filer,O
",",O
a,O
non-accelerated,O
filer,O
",",O
or,O
a,O
smaller,O
reporting,O
company,O
.,O
,O
See,O
the,O
definitions,O
of,O
large,O
accelerated,O
filer,O
",",O
accelerated,O
filer,O
and,O
smaller,O
reporting,O
company,O
in,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
The,O
Registrant,O
hereby,O
amends,O
this,O
Registration,O
Statement,O
on,O
such,O
date,O
or,O
dates,O
as,O
may,O
be,O
necessary,O
to,O
delay,O
its,O
effective,O
date,O
until,O
the,O
Registrant,O
shall,O
file,O
a,O
further,O
amendment,O
which,O
specifically,O
states,O
that,O
this,O
Registration,O
Statement,O
shall,O
thereafter,O
become,O
effective,O
in,O
accordance,O
with,O
Section,O
8,O
(,O
a,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
or,O
until,O
the,O
Registration,O
Statement,O
shall,O
become,O
effective,O
on,O
such,O
date,O
as,O
the,O
Commission,O
acting,O
pursuant,O
to,O
said,O
Section,O
8,O
(,O
a,O
),O
may,O
determine,O
.,O
,O
PURSUANT,O
TO,O
RULE,O
429,O
UNDER,O
THE,O
SECURITIES,I-LEGISLATION/ACT
ACT,I-LEGISLATION/ACT
",",O
THIS,O
REGISTRATION,O
STATEMENT,O
CONTAINS,O
A,O
COMBINED,O
PROSPECTUS,O
THAT,O
ALSO,O
RELATES,O
TO,O
"5,180,680",O
SHARES,O
OF,O
COMMON,O
STOCK,O
PREVIOUSLY,O
REGISTERED,O
PURSUANT,O
TO,O
A,O
REGISTRATION,O
STATEMENT,O
ON,O
FORM,I-MISCELLANEOUS
S-1,I-MISCELLANEOUS
",",O
No.,O
A,O
REGISTRATION,O
FEE,O
IN,O
THE,O
AMOUNT,O
OF,O
$,O
"1,260",O
WAS,O
PREVIOUSLY,O
PAID,O
BY,O
THE,O
REGISTRANT,O
IN,O
CONNECTION,O
WITH,O
REGISTRATION,O
STATEMENT,O
No.,O
THIS,O
REGISTRATION,O
STATEMENT,O
CONSTITUTES,O
POST-EFFECTIVE,O
AMENDMENT,O
No.,O
1,O
TO,O
REGISTRATION,O
STATEMENT,O
No.,O
333-168094,O
",",O
AND,O
SUCH,O
AMENDMENT,O
SHALL,O
HEREAFTER,O
BECOME,O
EFFECTIVE,O
CONCURRENTLY,O
WITH,O
THE,O
EFFECTIVENESS,O
OF,O
THIS,O
REGISTRATION,O
STATEMENT,O
.,O
,O
The,O
information,O
in,O
this,O
prospectus,O
is,O
not,O
complete,O
and,O
may,O
be,O
changed,O
.,O
,O
The,O
selling,O
stockholder,O
may,O
not,O
sell,O
these,O
securities,O
until,O
the,O
registration,O
statement,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
is,O
effective,O
.,O
,O
This,O
prospectus,O
is,O
not,O
an,O
offer,O
to,O
sell,O
these,O
securities,O
and,O
is,O
not,O
soliciting,O
an,O
offer,O
to,O
buy,O
these,O
securities,O
in,O
any,O
state,O
where,O
the,O
offer,O
or,O
sale,O
is,O
not,O
permitted,O
.,O
,O
This,O
prospectus,O
relates,O
to,O
the,O
disposition,O
from,O
time,O
to,O
time,O
of,O
up,O
to,O
"5,150,680",O
shares,O
of,O
our,O
common,O
stock,O
",",O
which,O
are,O
held,O
or,O
may,O
be,O
held,O
by,O
the,O
selling,O
stockholder,O
named,O
in,O
this,O
prospectus,O
.,O
,O
We,O
are,O
not,O
selling,O
any,O
common,O
stock,O
under,O
this,O
prospectus,O
and,O
will,O
not,O
receive,O
any,O
of,O
the,O
proceeds,O
from,O
the,O
sale,O
of,O
shares,O
by,O
the,O
selling,O
stockholder,O
.,O
,O
The,O
selling,O
stockholder,O
identified,O
in,O
this,O
prospectus,O
",",O
or,O
its,O
permitted,O
transferees,O
or,O
other,O
successors-in-interest,O
",",O
may,O
offer,O
the,O
shares,O
from,O
time,O
to,O
time,O
through,O
public,O
or,O
private,O
transactions,O
at,O
prevailing,O
market,O
prices,O
",",O
at,O
prices,O
related,O
to,O
prevailing,O
market,O
prices,O
",",O
or,O
at,O
privately,O
negotiated,O
prices,O
.,O
,O
We,O
provide,O
more,O
information,O
about,O
how,O
the,O
selling,O
stockholder,O
may,O
sell,O
its,O
shares,O
of,O
common,O
stock,O
in,O
the,O
section,O
entitled,O
Plan,O
of,O
Distribution,O
beginning,O
on,O
page,O
36,O
of,O
this,O
prospectus,O
.,O
,O
We,O
will,O
not,O
be,O
paying,O
any,O
underwriting,O
discounts,O
or,O
commissions,O
in,O
connection,O
with,O
any,O
offering,O
of,O
common,O
stock,O
under,O
this,O
prospectus,O
.,O
,O
Our,O
common,O
stock,O
is,O
listed,O
on,O
The,I-MISCELLANEOUS
NASDAQ,I-MISCELLANEOUS
Global,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
under,O
the,O
symbol,O
ONTY,I-BUSINESS
.,O
,O
The,O
last,O
reported,O
sale,O
price,O
of,O
our,O
common,O
stock,O
on,O
The,I-MISCELLANEOUS
NASDAQ,I-MISCELLANEOUS
Global,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
on,O
March,O
31,O
",",O
2011,O
was,O
$,O
3.87,O
per,O
share,O
.,O
,O
Investing,O
in,O
our,O
common,O
stock,O
involves,O
a,O
high,O
degree,O
of,O
risk,O
.,O
,O
Please,O
see,O
the,O
sections,O
entitled,O
Risk,O
Factors,O
beginning,O
on,O
page,O
7,O
of,O
this,O
prospectus,O
and,O
Part,O
II,O
—,O
Item,O
1A,O
—,O
Risk,O
Factors,O
in,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
Neither,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
nor,O
any,O
state,O
securities,O
commission,O
has,O
approved,O
or,O
disapproved,O
of,O
these,O
securities,O
",",O
or,O
determined,O
if,O
this,O
prospectus,O
is,O
truthful,O
or,O
complete,O
.,O
,O
Any,O
representation,O
to,O
the,O
contrary,O
is,O
a,O
criminal,O
offense,O
.,O
,O
This,O
prospectus,O
is,O
part,O
of,O
a,O
registration,O
statement,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
that,O
we,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
or,O
the,O
SEC,I-GOVERNMENT
",",O
using,O
the,O
shelf,O
registration,O
process,O
.,O
,O
Under,O
this,O
process,O
",",O
the,O
selling,O
stockholder,O
may,O
from,O
time,O
to,O
time,O
",",O
in,O
one,O
or,O
more,O
offerings,O
",",O
sell,O
the,O
common,O
stock,O
described,O
in,O
this,O
prospectus,O
.,O
,O
This,O
prospectus,O
does,O
not,O
contain,O
all,O
of,O
the,O
information,O
set,O
forth,O
in,O
the,O
registration,O
statement,O
",",O
certain,O
parts,O
of,O
which,O
are,O
omitted,O
in,O
accordance,O
with,O
the,O
rules,O
and,O
regulations,O
of,O
the,O
SEC,I-GOVERNMENT
.,O
,O
Accordingly,O
",",O
you,O
should,O
refer,O
to,O
the,O
registration,O
statement,O
and,O
its,O
exhibits,O
for,O
further,O
information,O
about,O
us,O
and,O
our,O
common,O
stock,O
.,O
,O
Copies,O
of,O
the,O
registration,O
statement,O
and,O
its,O
exhibits,O
are,O
on,O
file,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
Statements,O
contained,O
in,O
this,O
prospectus,O
concerning,O
the,O
documents,O
we,O
have,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
are,O
not,O
intended,O
to,O
be,O
comprehensive,O
",",O
and,O
in,O
each,O
instance,O
we,O
refer,O
you,O
to,O
the,O
copy,O
of,O
the,O
actual,O
document,O
filed,O
as,O
an,O
exhibit,O
to,O
the,O
registration,O
statement,O
or,O
otherwise,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
You,O
should,O
rely,O
only,O
on,O
the,O
information,O
contained,O
in,O
or,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
(,O
as,O
supplemented,O
and,O
amended,O
),O
.,O
,O
We,O
have,O
not,O
authorized,O
anyone,O
to,O
provide,O
you,O
with,O
different,O
information,O
.,O
,O
This,O
document,O
may,O
only,O
be,O
used,O
where,O
it,O
is,O
legal,O
to,O
sell,O
these,O
securities,O
.,O
,O
You,O
should,O
not,O
assume,O
that,O
the,O
information,O
contained,O
in,O
this,O
prospectus,O
is,O
accurate,O
as,O
of,O
any,O
date,O
other,O
than,O
its,O
date,O
regardless,O
of,O
the,O
time,O
of,O
delivery,O
of,O
the,O
prospectus,O
or,O
any,O
sale,O
of,O
our,O
common,O
stock,O
.,O
,O
We,O
urge,O
you,O
to,O
read,O
carefully,O
this,O
prospectus,O
(,O
as,O
supplemented,O
and,O
amended,O
),O
",",O
together,O
with,O
the,O
information,O
incorporated,O
herein,O
by,O
reference,O
as,O
described,O
under,O
the,O
heading,O
Information,O
Incorporated,O
by,O
Reference,O
",",O
before,O
deciding,O
whether,O
to,O
invest,O
in,O
any,O
of,O
the,O
common,O
stock,O
being,O
offered,O
.,O
,O
This,O
summary,O
highlights,O
information,O
contained,O
elsewhere,O
in,O
this,O
prospectus,O
or,O
incorporated,O
herein,O
by,O
reference,O
.,O
,O
This,O
summary,O
is,O
not,O
complete,O
and,O
does,O
not,O
contain,O
all,O
of,O
the,O
information,O
that,O
you,O
should,O
consider,O
before,O
deciding,O
to,O
invest,O
in,O
our,O
securities,O
.,O
,O
We,O
urge,O
you,O
to,O
read,O
this,O
entire,O
prospectus,O
and,O
the,O
information,O
incorporated,O
by,O
reference,O
herein,O
carefully,O
",",O
including,O
the,O
Risk,O
Factors,O
section,O
.,O
,O
We,O
are,O
a,O
clinical-stage,O
biopharmaceutical,O
company,O
focused,O
primarily,O
on,O
the,O
development,O
of,O
therapeutic,O
products,O
for,O
the,O
treatment,O
of,O
cancer,O
.,O
,O
Our,O
goal,O
is,O
to,O
develop,O
and,O
commercialize,O
novel,O
synthetic,O
vaccines,O
and,O
targeted,O
small,O
molecules,O
that,O
have,O
the,O
potential,O
to,O
improve,O
the,O
lives,O
and,O
outcomes,O
of,O
cancer,O
patients,O
.,O
,O
Our,O
cancer,O
vaccines,O
are,O
designed,O
to,O
stimulate,O
the,O
immune,O
system,O
to,O
attack,O
cancer,O
cells,O
",",O
while,O
our,O
small,O
molecule,O
compounds,O
are,O
designed,O
to,O
inhibit,O
the,O
activity,O
of,O
specific,O
cancer-related,O
proteins,O
.,O
,O
We,O
are,O
advancing,O
our,O
product,O
candidates,O
through,O
in-house,O
development,O
efforts,O
and,O
strategic,O
collaborations,O
.,O
,O
We,O
believe,O
the,O
quality,O
and,O
breadth,O
of,O
our,O
product,O
candidate,O
pipeline,O
",",O
strategic,O
collaborations,O
and,O
scientific,O
team,O
will,O
potentially,O
enable,O
us,O
to,O
become,O
an,O
integrated,O
biopharmaceutical,O
company,O
with,O
a,O
diversified,O
portfolio,O
of,O
novel,O
",",O
commercialized,O
therapeutics,O
for,O
major,O
diseases,O
.,O
,O
Our,O
lead,O
product,O
candidate,O
",",O
Stimuvax,I-MISCELLANEOUS
",",O
is,O
being,O
evaluated,O
in,O
two,O
Phase,O
3,O
clinical,O
trials,O
for,O
the,O
treatment,O
of,O
non-small,I-MISCELLANEOUS
cell,I-MISCELLANEOUS
lung,I-MISCELLANEOUS
cancer,I-MISCELLANEOUS
",",O
or,O
NSCLC,I-MISCELLANEOUS
.,O
,O
We,O
have,O
granted,O
an,O
exclusive,O
",",O
worldwide,O
license,O
to,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
of,O
Darmstadt,I-LOCATION
",",O
Germany,I-LOCATION
",",O
or,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
",",O
for,O
the,O
development,O
",",O
manufacture,O
and,O
commercialization,O
of,O
Stimuvax,I-MISCELLANEOUS
.,O
,O
Our,O
pipeline,O
of,O
clinical,O
stage,O
proprietary,O
small,O
molecule,O
product,O
candidates,O
was,O
acquired,O
by,O
us,O
in,O
October,O
2006,O
from,O
ProlX,I-BUSINESS
Pharmaceuticals,I-BUSINESS
Corporation,I-BUSINESS
",",O
or,O
ProlX,I-BUSINESS
.,O
,O
We,O
are,O
currently,O
focusing,O
our,O
internal,O
development,O
efforts,O
on,O
PX-866,I-MISCELLANEOUS
",",O
for,O
which,O
we,O
initiated,O
two,O
Phase,O
1/2,O
trials,O
in,O
2010,O
",",O
and,O
plan,O
to,O
initiate,O
two,O
additional,O
Phase,O
2,O
trials,O
in,O
the,O
first,O
half,O
of,O
2011,O
.,O
,O
As,O
of,O
the,O
date,O
of,O
this,O
prospectus,O
",",O
we,O
have,O
not,O
licensed,O
any,O
rights,O
to,O
our,O
small,O
molecules,O
to,O
any,O
third,O
party,O
and,O
retain,O
all,O
development,O
",",O
commercialization,O
and,O
manufacturing,O
rights,O
.,O
,O
We,O
are,O
also,O
conducting,O
preclinical,O
development,O
of,O
ONT-10,I-MISCELLANEOUS
(,O
formerly,O
BGLP40,I-MISCELLANEOUS
),O
",",O
a,O
cancer,O
vaccine,O
directed,O
against,O
a,O
target,O
similar,O
to,O
Stimuvax,I-MISCELLANEOUS
",",O
and,O
which,O
is,O
proprietary,O
to,O
us,O
.,O
,O
In,O
addition,O
to,O
our,O
product,O
candidates,O
",",O
we,O
have,O
developed,O
novel,O
vaccine,O
technology,O
we,O
may,O
further,O
develop,O
ourselves,O
and/or,O
license,O
to,O
others,O
.,O
,O
is,O
the,O
successor,O
corporation,O
to,O
Biomira,I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
On,O
August,O
23,O
",",O
1985,O
",",O
Biomira,I-BUSINESS
Inc.,I-BUSINESS
was,O
incorporated,O
under,O
the,O
Canada,I-LEGISLATION/ACT
Business,I-LEGISLATION/ACT
Corporations,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
was,O
incorporated,O
in,O
the,O
state,O
of,O
Delaware,I-LOCATION
on,O
September,O
7,O
",",O
2007,O
.,O
,O
On,O
December,O
10,O
",",O
2007,O
",",O
Oncothyreon,I-BUSINESS
became,O
the,O
successor,O
corporation,O
to,O
Biomira,I-BUSINESS
by,O
way,O
of,O
an,O
arrangement,O
effected,O
pursuant,O
to,O
Canadian,I-MISCELLANEOUS
law,O
.,O
,O
Our,O
executive,O
office,O
is,O
located,O
at,O
2601,O
Fourth,I-LOCATION
Avenue,I-LOCATION
",",O
Suite,O
500,O
",",O
Seattle,I-LOCATION
",",O
Washington,I-LOCATION
98121,O
and,O
our,O
telephone,O
number,O
is,O
(,O
206,O
),O
801-2100,O
.,O
,O
We,O
maintain,O
an,O
Internet,I-MISCELLANEOUS
website,O
at,O
www.oncothyreon.com,O
.,O
,O
We,O
have,O
not,O
incorporated,O
the,O
information,O
on,O
our,O
website,O
by,O
reference,O
into,O
this,O
prospectus,O
",",O
and,O
you,O
should,O
not,O
consider,O
it,O
to,O
be,O
a,O
part,O
of,O
this,O
prospectus,O
.,O
,O
We,O
carry,O
on,O
our,O
business,O
directly,O
and,O
through,O
our,O
subsidiaries,O
.,O
,O
Throughout,O
this,O
prospectus,O
",",O
unless,O
the,O
context,O
specifies,O
or,O
implies,O
otherwise,O
",",O
the,O
terms,O
Company,O
",",O
Oncothyreon,I-GOVERNMENT
",",O
Biomira,I-GOVERNMENT
",",O
we,O
",",O
us,O
",",O
and,O
our,O
refer,O
to,O
Oncothyreon,I-BUSINESS
Inc.,I-BUSINESS
",",O
its,O
predecessor,O
",",O
Biomira,I-BUSINESS
Inc.,I-BUSINESS
",",O
and,O
its,O
subsidiaries,O
.,O
,O
The,O
selling,O
stockholder,O
named,O
in,O
this,O
prospectus,O
may,O
offer,O
and,O
sell,O
up,O
to,O
"5,150,680",O
shares,O
of,O
our,O
common,O
stock,O
.,O
,O
Our,O
common,O
stock,O
is,O
listed,O
on,O
The,I-MISCELLANEOUS
NASDAQ,I-MISCELLANEOUS
Global,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
under,O
the,O
symbol,O
ONTY,I-BUSINESS
.,O
,O
Shares,O
of,O
common,O
stock,O
that,O
may,O
be,O
offered,O
in,O
this,O
offering,O
",",O
when,O
issued,O
and,O
paid,O
for,O
",",O
will,O
be,O
fully,O
paid,O
and,O
non-assessable,O
.,O
,O
We,O
will,O
not,O
receive,O
any,O
of,O
the,O
proceeds,O
of,O
sales,O
by,O
the,O
selling,O
stockholder,O
of,O
any,O
of,O
the,O
common,O
stock,O
covered,O
by,O
this,O
prospectus,O
.,O
,O
Throughout,O
this,O
prospectus,O
",",O
when,O
we,O
refer,O
to,O
the,O
shares,O
of,O
our,O
common,O
stock,O
",",O
the,O
offer,O
and,O
sale,O
of,O
which,O
are,O
being,O
registered,O
on,O
behalf,O
of,O
the,O
selling,O
stockholder,O
",",O
we,O
are,O
referring,O
to,O
the,O
shares,O
of,O
common,O
stock,O
that,O
have,O
been,O
and,O
may,O
be,O
issued,O
to,O
Small,I-BUSINESS
Cap,I-BUSINESS
Biotech,I-BUSINESS
Value,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
",",O
or,O
SCBV,I-BUSINESS
",",O
pursuant,O
to,O
the,O
common,O
stock,O
purchase,O
agreement,O
with,O
SCBV,I-BUSINESS
described,O
below,O
.,O
,O
When,O
we,O
refer,O
to,O
the,O
selling,O
stockholder,O
in,O
this,O
prospectus,O
",",O
we,O
are,O
referring,O
to,O
SCBV,I-BUSINESS
and,O
",",O
as,O
applicable,O
",",O
any,O
donees,O
",",O
pledgees,O
",",O
transferees,O
or,O
other,O
successors-in-interest,O
selling,O
shares,O
received,O
after,O
the,O
date,O
of,O
this,O
prospectus,O
from,O
SCBV,I-BUSINESS
as,O
a,O
gift,O
",",O
pledge,O
",",O
or,O
other,O
non-sale,O
related,O
transfer,O
.,O
,O
On,O
July,O
6,O
",",O
2010,O
",",O
we,O
entered,O
into,O
a,O
common,O
stock,O
purchase,O
agreement,O
",",O
which,O
we,O
refer,O
to,O
in,O
this,O
prospectus,O
as,O
the,O
Purchase,O
Agreement,O
",",O
with,O
SCBV,I-BUSINESS
providing,O
for,O
a,O
financing,O
arrangement,O
that,O
is,O
sometimes,O
referred,O
to,O
as,O
a,O
committed,O
equity,O
line,O
financing,O
facility,O
.,O
,O
The,O
Purchase,O
Agreement,O
provides,O
that,O
",",O
upon,O
the,O
terms,O
and,O
subject,O
to,O
the,O
conditions,O
in,O
the,O
Purchase,O
Agreement,O
",",O
SCBV,I-BUSINESS
is,O
committed,O
to,O
purchase,O
up,O
to,O
$,O
20.0,O
million,O
of,O
shares,O
of,O
our,O
common,O
stock,O
over,O
the,O
24-month,O
term,O
of,O
the,O
Purchase,O
Agreement,O
under,O
certain,O
specified,O
conditions,O
and,O
limitations,O
",",O
provided,O
that,O
in,O
no,O
event,O
may,O
we,O
sell,O
under,O
the,O
Purchase,O
Agreement,O
more,O
than,O
"5,090,759",O
shares,O
of,O
common,O
stock,O
",",O
which,O
is,O
equal,O
to,O
one,O
share,O
less,O
than,O
20,O
%,O
of,O
our,O
outstanding,O
shares,O
of,O
common,O
stock,O
on,O
July,O
6,O
",",O
2010,O
",",O
the,O
closing,O
date,O
of,O
the,O
Purchase,O
Agreement,O
",",O
less,O
the,O
number,O
of,O
shares,O
of,O
common,O
stock,O
we,O
issued,O
to,O
SCBV,I-BUSINESS
on,O
the,O
closing,O
date,O
as,O
commitment,O
shares,O
described,O
below,O
.,O
,O
Furthermore,O
",",O
in,O
no,O
event,O
may,O
SCBV,I-BUSINESS
purchase,O
any,O
shares,O
of,O
our,O
common,O
stock,O
which,O
",",O
when,O
aggregated,O
with,O
all,O
other,O
shares,O
of,O
our,O
common,O
stock,O
then,O
beneficially,O
owned,O
by,O
SCBV,I-BUSINESS
",",O
would,O
result,O
in,O
the,O
beneficial,O
ownership,O
by,O
SCBV,I-BUSINESS
of,O
more,O
than,O
9.9,O
%,O
of,O
the,O
then,O
outstanding,O
shares,O
of,O
our,O
common,O
stock,O
.,O
,O
These,O
maximum,O
share,O
and,O
beneficial,O
ownership,O
limitations,O
may,O
not,O
be,O
waived,O
by,O
the,O
parties,O
.,O
,O
From,O
time,O
to,O
time,O
over,O
the,O
term,O
of,O
the,O
Purchase,O
Agreement,O
",",O
and,O
in,O
our,O
sole,O
discretion,O
",",O
we,O
may,O
present,O
SCBV,I-BUSINESS
with,O
draw,O
down,O
notices,O
requiring,O
SCBV,I-BUSINESS
to,O
purchase,O
a,O
specified,O
dollar,O
amount,O
of,O
shares,O
of,O
our,O
common,O
stock,O
",",O
based,O
on,O
the,O
price,O
per,O
share,O
over,O
10,O
consecutive,O
trading,O
days,O
",",O
or,O
the,O
Draw,O
Down,O
Period,O
",",O
with,O
the,O
total,O
dollar,O
amount,O
of,O
each,O
draw,O
down,O
subject,O
to,O
certain,O
agreed-upon,O
limitations,O
based,O
on,O
the,O
market,O
price,O
of,O
our,O
common,O
stock,O
at,O
the,O
time,O
of,O
the,O
draw,O
down,O
(,O
which,O
may,O
not,O
be,O
waived,O
or,O
modified,O
),O
.,O
,O
In,O
addition,O
",",O
in,O
our,O
sole,O
discretion,O
",",O
but,O
subject,O
to,O
certain,O
limitations,O
",",O
we,O
may,O
require,O
SCBV,I-BUSINESS
to,O
purchase,O
a,O
percentage,O
of,O
the,O
daily,O
trading,O
volume,O
of,O
our,O
common,O
stock,O
for,O
each,O
trading,O
day,O
during,O
the,O
Draw,O
Down,O
Period,O
.,O
,O
We,O
are,O
allowed,O
to,O
present,O
SCBV,I-BUSINESS
with,O
up,O
to,O
24,O
draw,O
down,O
notices,O
during,O
the,O
term,O
of,O
the,O
Purchase,O
Agreement,O
",",O
with,O
only,O
one,O
such,O
draw,O
down,O
notice,O
allowed,O
per,O
Draw,O
Down,O
Period,O
and,O
a,O
minimum,O
of,O
five,O
trading,O
days,O
required,O
between,O
each,O
Draw,O
Down,O
Period,O
.,O
,O
Once,O
presented,O
with,O
a,O
draw,O
down,O
notice,O
",",O
SCBV,I-BUSINESS
is,O
required,O
to,O
purchase,O
a,O
pro,O
rata,O
portion,O
of,O
the,O
shares,O
on,O
each,O
trading,O
day,O
during,O
the,O
trading,O
period,O
on,O
which,O
the,O
daily,O
volume,O
weighted,O
average,O
price,O
for,O
our,O
common,O
stock,O
exceeds,O
a,O
threshold,O
price,O
determined,O
by,O
us,O
for,O
such,O
draw,O
down,O
.,O
,O
The,O
per,O
share,O
purchase,O
price,O
for,O
these,O
shares,O
equals,O
the,O
daily,O
volume,O
weighted,O
average,O
price,O
of,O
our,O
common,O
stock,O
on,O
each,O
date,O
during,O
the,O
Draw,O
Down,O
Period,O
on,O
which,O
shares,O
are,O
purchased,O
",",O
less,O
a,O
discount,O
ranging,O
from,O
5.00,O
%,O
to,O
7.00,O
%,O
(,O
which,O
range,O
may,O
not,O
be,O
modified,O
),O
",",O
based,O
on,O
a,O
minimum,O
price,O
we,O
specify,O
.,O
,O
shares,O
of,O
common,O
stock,O
allocated,O
to,O
that,O
trading,O
day,O
.,O
,O
The,O
obligations,O
of,O
SCBV,I-BUSINESS
under,O
the,O
Purchase,O
Agreement,O
to,O
purchase,O
shares,O
of,O
our,O
common,O
stock,O
may,O
not,O
be,O
transferred,O
to,O
any,O
other,O
party,O
.,O
,O
In,O
partial,O
consideration,O
for,O
SCBV,I-BUSINESS
s,O
execution,O
and,O
delivery,O
of,O
the,O
Purchase,O
Agreement,O
",",O
we,O
issued,O
to,O
SCBV,I-BUSINESS
upon,O
the,O
execution,O
and,O
delivery,O
of,O
the,O
Purchase,O
Agreement,O
"59,921",O
shares,O
of,O
our,O
common,O
stock,O
",",O
which,O
we,O
refer,O
to,O
as,O
the,O
Commitment,O
Shares,O
",",O
which,O
is,O
equal,O
to,O
the,O
sum,O
of,O
$,O
"20,000",O
divided,O
by,O
the,O
volume,O
weighted,O
average,O
price,O
of,O
our,O
common,O
stock,O
for,O
each,O
trading,O
day,O
during,O
the,O
10,O
trading,O
day,O
period,O
ending,O
July,O
6,O
",",O
2010,O
.,O
,O
The,O
average,O
price,O
per,O
Commitment,O
Share,O
was,O
$,O
3.3377,O
.,O
,O
The,O
issuance,O
of,O
the,O
Commitment,O
Shares,O
",",O
together,O
with,O
all,O
other,O
shares,O
of,O
common,O
stock,O
issuable,O
to,O
SCBV,I-BUSINESS
pursuant,O
to,O
the,O
terms,O
of,O
the,O
Purchase,O
Agreement,O
",",O
is,O
exempt,O
from,O
registration,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
pursuant,O
to,O
the,O
exemption,O
for,O
transactions,O
by,O
an,O
issuer,O
not,O
involving,O
any,O
public,O
offering,O
under,O
Section,O
4,O
(,O
2,O
),O
of,O
and,O
Regulation,O
D,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
or,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
SCBV,I-BUSINESS
has,O
agreed,O
that,O
during,O
the,O
term,O
of,O
the,O
Purchase,O
Agreement,O
",",O
neither,O
SCBV,I-BUSINESS
nor,O
any,O
of,O
its,O
affiliates,O
will,O
",",O
directly,O
or,O
indirectly,O
",",O
engage,O
in,O
any,O
short,O
sales,O
involving,O
our,O
securities,O
or,O
grant,O
any,O
option,O
to,O
purchase,O
",",O
or,O
acquire,O
any,O
right,O
to,O
dispose,O
of,O
or,O
otherwise,O
dispose,O
for,O
value,O
of,O
",",O
any,O
shares,O
of,O
our,O
common,O
stock,O
or,O
any,O
securities,O
convertible,O
into,O
or,O
exercisable,O
or,O
exchangeable,O
for,O
any,O
shares,O
of,O
our,O
common,O
stock,O
",",O
or,O
enter,O
into,O
any,O
swap,O
",",O
hedge,O
or,O
other,O
similar,O
agreement,O
that,O
transfers,O
",",O
in,O
whole,O
or,O
in,O
part,O
",",O
the,O
economic,O
risk,O
of,O
ownership,O
of,O
any,O
shares,O
of,O
our,O
common,O
stock,O
",",O
provided,O
that,O
SCBV,I-BUSINESS
will,O
not,O
be,O
prohibited,O
from,O
engaging,O
in,O
certain,O
transactions,O
relating,O
to,O
any,O
of,O
the,O
shares,O
of,O
our,O
common,O
stock,O
that,O
it,O
owns,O
",",O
including,O
the,O
Commitment,O
Shares,O
",",O
or,O
that,O
it,O
is,O
obligated,O
to,O
purchase,O
under,O
a,O
pending,O
draw,O
down,O
notice,O
.,O
,O
The,O
Purchase,O
Agreement,O
contains,O
customary,O
representations,O
",",O
warranties,O
and,O
covenants,O
by,O
",",O
among,O
and,O
for,O
the,O
benefit,O
of,O
the,O
parties,O
.,O
,O
Before,O
SCBV,I-BUSINESS
is,O
obligated,O
to,O
purchase,O
any,O
shares,O
of,O
our,O
common,O
stock,O
pursuant,O
to,O
a,O
draw,O
down,O
notice,O
",",O
certain,O
conditions,O
specified,O
in,O
the,O
Purchase,O
Agreement,O
",",O
none,O
of,O
which,O
are,O
in,O
SCBV,I-BUSINESS
s,O
control,O
",",O
must,O
be,O
satisfied,O
",",O
including,O
the,O
following,O
:,O
,O
There,O
is,O
no,O
guarantee,O
that,O
we,O
will,O
be,O
able,O
to,O
meet,O
the,O
foregoing,O
conditions,O
or,O
any,O
of,O
the,O
other,O
conditions,O
in,O
the,O
Purchase,O
Agreement,O
or,O
that,O
we,O
will,O
be,O
able,O
to,O
draw,O
down,O
any,O
portion,O
of,O
the,O
amounts,O
available,O
under,O
the,O
equity,O
line,O
with,O
SCBV,I-BUSINESS
.,O
,O
The,O
Purchase,O
Agreement,O
may,O
be,O
terminated,O
at,O
any,O
time,O
by,O
the,O
mutual,O
written,O
consent,O
of,O
the,O
parties,O
.,O
,O
Unless,O
earlier,O
terminated,O
",",O
the,O
Purchase,O
Agreement,O
will,O
terminate,O
automatically,O
on,O
the,O
earlier,O
to,O
occur,O
of,O
(,O
i,O
),O
August,O
1,O
",",O
2012,O
(,O
which,O
term,O
may,O
not,O
be,O
extended,O
by,O
the,O
parties,O
),O
and,O
(,O
ii,O
),O
the,O
date,O
on,O
which,O
SCBV,I-BUSINESS
purchases,O
the,O
entire,O
commitment,O
amount,O
under,O
the,O
Purchase,O
Agreement,O
.,O
,O
We,O
may,O
terminate,O
the,O
Purchase,O
Agreement,O
on,O
one,O
trading,O
day,O
prior,O
written,O
notice,O
to,O
SCBV,I-BUSINESS
",",O
subject,O
to,O
certain,O
conditions,O
.,O
,O
SCBV,I-BUSINESS
may,O
terminate,O
the,O
Purchase,O
Agreement,O
effective,O
upon,O
one,O
trading,O
day,O
prior,O
written,O
notice,O
to,O
us,O
under,O
certain,O
circumstances,O
",",O
including,O
the,O
following,O
:,O
,O
The,O
Purchase,O
Agreement,O
provides,O
that,O
no,O
termination,O
of,O
the,O
Purchase,O
Agreement,O
will,O
limit,O
",",O
alter,O
",",O
modify,O
",",O
change,O
or,O
otherwise,O
affect,O
any,O
of,O
the,O
parties,O
rights,O
or,O
obligations,O
with,O
respect,O
to,O
any,O
pending,O
draw,O
down,O
notice,O
",",O
and,O
that,O
the,O
parties,O
must,O
fully,O
perform,O
their,O
respective,O
obligations,O
with,O
respect,O
to,O
any,O
such,O
pending,O
draw,O
down,O
notice,O
under,O
the,O
Purchase,O
Agreement,O
",",O
provided,O
all,O
of,O
the,O
conditions,O
to,O
the,O
settlement,O
thereof,O
are,O
timely,O
satisfied,O
.,O
,O
The,O
Purchase,O
Agreement,O
also,O
provides,O
for,O
indemnification,O
of,O
SCBV,I-BUSINESS
and,O
its,O
affiliates,O
in,O
the,O
event,O
that,O
SCBV,I-BUSINESS
incurs,O
losses,O
",",O
liabilities,O
",",O
obligations,O
",",O
claims,O
",",O
contingencies,O
",",O
damages,O
",",O
costs,O
and,O
expenses,O
related,O
to,O
a,O
breach,O
by,O
us,O
of,O
any,O
of,O
our,O
representations,O
and,O
warranties,O
under,O
the,O
Purchase,O
Agreement,O
or,O
the,O
other,O
related,O
transaction,O
documents,O
or,O
any,O
action,O
instituted,O
against,O
SCBV,I-BUSINESS
or,O
its,O
affiliates,O
due,O
to,O
the,O
transactions,O
contemplated,O
by,O
the,O
Purchase,O
Agreement,O
or,O
other,O
transaction,O
documents,O
",",O
subject,O
to,O
certain,O
limitations,O
.,O
,O
We,O
agreed,O
to,O
pay,O
$,O
"35,000",O
of,O
reasonable,O
attorneys,O
fees,O
and,O
expenses,O
(,O
exclusive,O
of,O
disbursements,O
and,O
out-of-pocket,O
expenses,O
),O
incurred,O
by,O
SCBV,I-BUSINESS
in,O
connection,O
with,O
the,O
preparation,O
",",O
negotiation,O
",",O
execution,O
and,O
delivery,O
of,O
the,O
Purchase,O
Agreement,O
and,O
related,O
transaction,O
documentation,O
.,O
,O
Further,O
",",O
if,O
we,O
issue,O
a,O
draw,O
down,O
notice,O
and,O
fail,O
to,O
deliver,O
the,O
shares,O
to,O
SCBV,I-BUSINESS
on,O
the,O
applicable,O
settlement,O
date,O
",",O
and,O
such,O
failure,O
continues,O
for,O
10,O
trading,O
days,O
",",O
we,O
agreed,O
to,O
pay,O
SCBV,I-BUSINESS
",",O
in,O
addition,O
to,O
all,O
other,O
remedies,O
available,O
to,O
SCBV,I-BUSINESS
under,O
the,O
Purchase,O
Agreement,O
",",O
an,O
amount,O
in,O
cash,O
equal,O
to,O
2.0,O
%,O
of,O
the,O
purchase,O
price,O
of,O
such,O
shares,O
for,O
each,O
30-day,O
period,O
the,O
shares,O
are,O
not,O
delivered,O
",",O
plus,O
accrued,O
interest,O
.,O
,O
In,O
connection,O
with,O
the,O
Purchase,O
Agreement,O
",",O
on,O
July,O
6,O
",",O
2010,O
",",O
we,O
entered,O
into,O
a,O
registration,O
rights,O
agreement,O
with,O
SCBV,I-BUSINESS
",",O
which,O
we,O
refer,O
to,O
in,O
this,O
prospectus,O
as,O
the,O
Registration,O
Rights,O
Agreement,O
",",O
pursuant,O
to,O
which,O
we,O
granted,O
to,O
SCBV,I-BUSINESS
certain,O
registration,O
rights,O
related,O
to,O
the,O
Commitment,O
Shares,O
and,O
the,O
shares,O
issuable,O
under,O
the,O
Purchase,O
Agreement,O
.,O
,O
Pursuant,O
to,O
the,O
Registration,O
Rights,O
Agreement,O
",",O
we,O
have,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
a,O
registration,O
statement,O
",",O
of,O
which,O
this,O
prospectus,O
is,O
a,O
part,O
",",O
relating,O
to,O
the,O
selling,O
stockholder,O
s,O
resale,O
of,O
the,O
Commitment,O
Shares,O
and,O
any,O
shares,O
of,O
common,O
stock,O
purchased,O
by,O
SCBV,I-BUSINESS
under,O
the,O
Purchase,O
Agreement,O
.,O
,O
The,O
effectiveness,O
of,O
this,O
registration,O
statement,O
is,O
a,O
condition,O
precedent,O
to,O
our,O
ability,O
to,O
sell,O
common,O
stock,O
to,O
SCBV,I-BUSINESS
under,O
the,O
Purchase,O
Agreement,O
.,O
,O
We,O
also,O
agreed,O
",",O
among,O
other,O
things,O
",",O
to,O
indemnify,O
SCBV,O
from,O
certain,O
liabilities,O
and,O
fees,O
and,O
expenses,O
of,O
SCBV,I-BUSINESS
incident,O
to,O
our,O
obligations,O
under,O
the,O
Registration,O
Rights,O
Agreement,O
",",O
including,O
certain,O
liabilities,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
SCBV,I-BUSINESS
has,O
agreed,O
to,O
indemnify,O
and,O
hold,O
harmless,O
us,O
and,O
each,O
of,O
our,O
directors,O
",",O
officers,O
and,O
persons,O
who,O
control,O
us,O
against,O
certain,O
liabilities,O
that,O
may,O
be,O
based,O
upon,O
written,O
information,O
furnished,O
by,O
SCBV,I-BUSINESS
to,O
us,O
for,O
inclusion,O
in,O
a,O
registration,O
statement,O
pursuant,O
to,O
the,O
Registration,O
Rights,O
Agreement,O
",",O
including,O
certain,O
liabilities,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Reedland,I-BUSINESS
Capital,I-BUSINESS
Partners,I-BUSINESS
",",O
an,O
Institutional,O
Division,O
of,O
Financial,I-BUSINESS
West,I-BUSINESS
Group,I-BUSINESS
",",O
member,O
FINRA/SIPC,I-BUSINESS
",",O
served,O
as,O
our,O
placement,O
agent,O
in,O
connection,O
with,O
the,O
financing,O
arrangement,O
contemplated,O
by,O
the,O
Purchase,O
Agreement,O
.,O
,O
SCBV,I-BUSINESS
upon,O
settlement,O
of,O
each,O
such,O
sale,O
.,O
,O
We,O
have,O
agreed,O
to,O
indemnify,O
and,O
hold,O
harmless,O
Reedland,O
against,O
certain,O
liabilities,O
",",O
including,O
certain,O
liabilities,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
The,O
foregoing,O
description,O
of,O
the,O
Purchase,O
Agreement,O
and,O
the,O
Registration,O
Rights,O
Agreement,O
does,O
not,O
purport,O
to,O
be,O
complete,O
and,O
is,O
qualified,O
in,O
its,O
entirety,O
by,O
reference,O
to,O
the,O
full,O
text,O
of,O
the,O
Purchase,O
Agreement,O
and,O
Registration,O
Rights,O
Agreement,O
",",O
copies,O
of,O
which,O
have,O
been,O
filed,O
or,O
incorporated,O
by,O
reference,O
as,O
exhibits,O
to,O
the,O
registration,O
statement,O
of,O
which,O
this,O
prospectus,O
is,O
a,O
part,O
.,O
,O
Investors,O
should,O
carefully,O
consider,O
the,O
risks,O
described,O
below,O
before,O
deciding,O
whether,O
to,O
invest,O
in,O
our,O
securities,O
.,O
,O
The,O
risks,O
described,O
below,O
are,O
not,O
the,O
only,O
ones,O
we,O
face,O
.,O
,O
If,O
any,O
of,O
the,O
following,O
risks,O
actually,O
occurs,O
",",O
our,O
business,O
",",O
financial,O
condition,O
or,O
results,O
of,O
operations,O
could,O
be,O
adversely,O
affected,O
.,O
,O
In,O
such,O
case,O
",",O
the,O
trading,O
price,O
of,O
our,O
common,O
stock,O
could,O
decline,O
and,O
you,O
could,O
lose,O
all,O
or,O
part,O
of,O
your,O
investment,O
.,O
,O
Our,O
actual,O
results,O
could,O
differ,O
materially,O
from,O
those,O
anticipated,O
in,O
the,O
forward-looking,O
statements,O
made,O
throughout,O
this,O
prospectus,O
as,O
a,O
result,O
of,O
different,O
factors,O
",",O
including,O
the,O
risks,O
we,O
face,O
described,O
below,O
.,O
,O
Our,O
near-term,O
success,O
is,O
highly,O
dependent,O
on,O
the,O
success,O
of,O
our,O
lead,O
product,O
candidate,O
",",O
Stimuvax,O
",",O
and,O
we,O
can,O
not,O
be,O
certain,O
that,O
it,O
will,O
be,O
successfully,O
developed,O
or,O
receive,O
regulatory,O
approval,O
or,O
be,O
successfully,O
commercialized,O
.,O
,O
Our,O
lead,O
product,O
candidate,O
",",O
Stimuvax,I-MISCELLANEOUS
",",O
is,O
being,O
evaluated,O
in,O
Phase,O
3,O
clinical,O
trials,O
for,O
the,O
treatment,O
of,O
non-small,I-MISCELLANEOUS
cell,I-MISCELLANEOUS
lung,I-MISCELLANEOUS
cancer,I-MISCELLANEOUS
",",O
or,O
NSCLC,I-MISCELLANEOUS
",",O
and,O
",",O
until,O
the,O
March,O
2010,O
suspension,O
of,O
clinical,O
trials,O
",",O
was,O
being,O
evaluated,O
in,O
a,O
global,O
Phase,O
3,O
trial,O
in,O
breast,O
cancer,O
.,O
,O
The,O
March,O
2010,O
suspension,O
by,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
of,O
the,O
clinical,O
development,O
program,O
for,O
Stimuvax,I-MISCELLANEOUS
was,O
the,O
result,O
of,O
a,O
suspected,O
unexpected,O
serious,O
adverse,O
event,O
reaction,O
in,O
a,O
patient,O
with,O
multiple,O
myeloma,O
participating,O
in,O
an,O
exploratory,O
clinical,O
trial,O
.,O
,O
In,O
June,O
2010,O
",",O
we,O
announced,O
that,O
the,O
U.S.,I-GOVERNMENT
Food,I-GOVERNMENT
and,I-GOVERNMENT
Drug,I-GOVERNMENT
Administration,I-GOVERNMENT
",",O
or,O
FDA,I-GOVERNMENT
",",O
lifted,O
the,O
clinical,O
hold,O
it,O
had,O
placed,O
on,O
the,O
Phase,O
3,O
clinical,O
trials,O
in,O
NSCLC,I-MISCELLANEOUS
.,O
,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
has,O
resumed,O
the,O
treatment,O
and,O
enrollment,O
in,O
these,O
trials,O
for,O
Stimuvax,I-MISCELLANEOUS
in,O
NSCLC,I-MISCELLANEOUS
.,O
,O
The,O
clinical,O
hold,O
on,O
the,O
Stimuvax,I-MISCELLANEOUS
trial,O
in,O
breast,O
cancer,O
remains,O
in,O
effect,O
and,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
has,O
discontinued,O
the,O
Phase,O
3,O
trial,O
in,O
breast,O
cancer,O
.,O
,O
Stimuvax,I-MISCELLANEOUS
will,O
require,O
the,O
successful,O
completion,O
of,O
the,O
ongoing,O
NSCLC,I-MISCELLANEOUS
trials,O
and,O
possibly,O
other,O
clinical,O
trials,O
before,O
submission,O
of,O
a,O
biologic,O
license,O
application,O
",",O
or,O
BLA,O
",",O
or,O
its,O
foreign,O
equivalent,O
for,O
approval,O
.,O
,O
This,O
process,O
can,O
take,O
many,O
years,O
and,O
require,O
the,O
expenditure,O
of,O
substantial,O
resources,O
.,O
,O
Pursuant,O
to,O
our,O
agreement,O
with,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
",",O
Merck,I-BUSINESS
KGaA,I-BUSINESS
is,O
responsible,O
for,O
the,O
development,O
and,O
the,O
regulatory,O
approval,O
process,O
and,O
any,O
subsequent,O
commercialization,O
of,O
Stimuvax,I-MISCELLANEOUS
.,O
,O
We,O
can,O
not,O
assure,O
you,O
that,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
will,O
continue,O
to,O
advance,O
the,O
development,O
and,O
commercialization,O
of,O
Stimuvax,I-MISCELLANEOUS
as,O
quickly,O
as,O
would,O
be,O
optimal,O
for,O
our,O
stockholders,O
.,O
,O
In,O
addition,O
",",O
Merck,I-BUSINESS
KGaA,I-BUSINESS
has,O
the,O
right,O
to,O
terminate,O
the,O
2008,O
license,O
agreement,O
upon,O
30,O
days,O
prior,O
written,O
notice,O
if,O
",",O
in,O
its,O
reasonable,O
judgment,O
",",O
it,O
determines,O
there,O
are,O
issues,O
concerning,O
the,O
safety,O
or,O
efficacy,O
of,O
Stimuvax,I-MISCELLANEOUS
that,O
would,O
materially,O
and,O
adversely,O
affect,O
Stimuvax,I-MISCELLANEOUS
s,O
medical,O
",",O
economic,O
or,O
competitive,O
viability,O
.,O
,O
Clinical,O
trials,O
involving,O
the,O
number,O
of,O
sites,O
and,O
patients,O
required,O
for,O
FDA,I-GOVERNMENT
approval,O
of,O
Stimuvax,I-MISCELLANEOUS
may,O
not,O
be,O
successfully,O
completed,O
.,O
,O
If,O
these,O
clinical,O
trials,O
fail,O
to,O
demonstrate,O
that,O
Stimuvax,O
is,O
safe,O
and,O
effective,O
",",O
it,O
will,O
not,O
receive,O
regulatory,O
approval,O
.,O
,O
Even,O
if,O
Stimuvax,I-MISCELLANEOUS
receives,O
regulatory,O
approval,O
",",O
it,O
may,O
never,O
be,O
successfully,O
commercialized,O
.,O
,O
If,O
Stimuvax,I-MISCELLANEOUS
does,O
not,O
receive,O
regulatory,O
approval,O
or,O
is,O
not,O
successfully,O
commercialized,O
",",O
or,O
if,O
Merck,I-BUSINESS
were,O
to,O
terminate,O
the,O
2008,O
license,O
agreement,O
",",O
we,O
may,O
not,O
be,O
able,O
to,O
generate,O
revenue,O
",",O
become,O
profitable,O
or,O
continue,O
our,O
operations,O
.,O
,O
Any,O
failure,O
of,O
Stimuvax,O
to,O
receive,O
regulatory,O
approval,O
or,O
be,O
successfully,O
commercialized,O
would,O
have,O
a,O
material,O
adverse,O
effect,O
on,O
our,O
business,O
",",O
operating,O
results,O
",",O
and,O
financial,O
condition,O
and,O
could,O
result,O
in,O
a,O
substantial,O
decline,O
in,O
the,O
price,O
of,O
our,O
common,O
stock,O
.,O
,O
We,O
understand,O
that,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
intends,O
to,O
submit,O
for,O
regulatory,O
approval,O
of,O
Stimuvax,I-MISCELLANEOUS
for,O
the,O
treatment,O
of,O
NSCLC,I-MISCELLANEOUS
based,O
on,O
the,O
results,O
of,O
a,O
single,O
Phase,O
3,O
trial,O
",",O
the,O
START,O
study,O
.,O
,O
If,O
the,O
FDA,I-GOVERNMENT
determines,O
that,O
the,O
results,O
of,O
this,O
single,O
study,O
do,O
not,O
demonstrate,O
the,O
efficacy,O
of,O
Stimuvax,O
with,O
a,O
sufficient,O
degree,O
of,O
statistical,O
certainty,O
",",O
the,O
FDA,I-GOVERNMENT
may,O
require,O
an,O
additional,O
Phase,O
3,O
study,O
to,O
be,O
performed,O
prior,O
to,O
regulatory,O
approval,O
.,O
,O
the,O
termination,O
by,O
Merk,I-BUSINESS
KGaA,I-BUSINESS
of,O
our,O
license,O
agreement,O
with,O
them,O
.,O
,O
In,O
addition,O
",",O
there,O
can,O
be,O
no,O
guarantee,O
that,O
the,O
results,O
of,O
an,O
additional,O
trial,O
would,O
be,O
supportive,O
of,O
the,O
results,O
of,O
the,O
START,O
trial,O
.,O
,O
Stimuvax,I-MISCELLANEOUS
and,O
ONT-10,I-MISCELLANEOUS
are,O
based,O
on,O
novel,O
technologies,O
",",O
which,O
may,O
raise,O
new,O
regulatory,O
issues,O
that,O
could,O
delay,O
or,O
make,O
FDA,I-GOVERNMENT
approval,O
more,O
difficult,O
.,O
,O
The,O
process,O
of,O
obtaining,O
required,O
FDA,I-GOVERNMENT
and,O
other,O
regulatory,O
approvals,O
",",O
including,O
foreign,O
approvals,O
",",O
is,O
expensive,O
",",O
often,O
takes,O
many,O
years,O
and,O
can,O
vary,O
substantially,O
based,O
upon,O
the,O
type,O
",",O
complexity,O
and,O
novelty,O
of,O
the,O
products,O
involved,O
.,O
,O
Stimuvax,I-MISCELLANEOUS
and,O
ONT-10,I-MISCELLANEOUS
are,O
novel,O
;,O
therefore,O
",",O
regulatory,O
agencies,O
may,O
lack,O
experience,O
with,O
them,O
",",O
which,O
may,O
lengthen,O
the,O
regulatory,O
review,O
process,O
",",O
increase,O
our,O
development,O
costs,O
and,O
delay,O
or,O
prevent,O
commercialization,O
of,O
Stimuvax,I-MISCELLANEOUS
and,O
our,O
other,O
active,O
vaccine,O
products,O
under,O
development,O
.,O
,O
To,O
date,O
",",O
the,O
FDA,I-GOVERNMENT
has,O
approved,O
for,O
commercial,O
sale,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
only,O
one,O
active,O
vaccine,O
designed,O
to,O
stimulate,O
an,O
immune,O
response,O
against,O
cancer,O
.,O
,O
Consequently,O
",",O
there,O
is,O
limited,O
precedent,O
for,O
the,O
successful,O
development,O
or,O
commercialization,O
of,O
products,O
based,O
on,O
our,O
technologies,O
in,O
this,O
area,O
.,O
,O
The,O
suspension,O
of,O
Merck,I-BUSINESS
s,O
clinical,O
development,O
program,O
for,O
Stimuvax,I-MISCELLANEOUS
could,O
severely,O
harm,O
our,O
business,O
.,O
,O
In,O
March,O
2010,O
",",O
we,O
announced,O
that,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
suspended,O
the,O
clinical,O
development,O
program,O
for,O
Stimuvax,O
as,O
the,O
result,O
of,O
a,O
suspected,O
unexpected,O
serious,O
adverse,O
event,O
reaction,O
in,O
a,O
patient,O
with,O
multiple,O
myeloma,O
participating,O
in,O
an,O
exploratory,O
clinical,O
trial,O
.,O
,O
The,O
suspension,O
was,O
a,O
precautionary,O
measure,O
while,O
an,O
investigation,O
of,O
the,O
cause,O
of,O
the,O
adverse,O
event,O
was,O
conducted,O
",",O
but,O
it,O
affected,O
the,O
Phase,O
3,O
clinical,O
trials,O
in,O
NSCLC,I-MISCELLANEOUS
and,O
in,O
breast,O
cancer,O
.,O
,O
In,O
June,O
2010,O
",",O
we,O
announced,O
that,O
the,O
FDA,I-GOVERNMENT
",",O
lifted,O
the,O
clinical,O
hold,O
it,O
had,O
placed,O
on,O
the,O
Phase,O
3,O
clinical,O
trials,O
in,O
NSCLC,I-MISCELLANEOUS
.,O
,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
has,O
resumed,O
the,O
treatment,O
and,O
enrollment,O
in,O
these,O
trials,O
for,O
Stimuvax,I-MISCELLANEOUS
in,O
NSCLC,I-MISCELLANEOUS
.,O
,O
The,O
clinical,O
hold,O
on,O
the,O
Stimuvax,I-MISCELLANEOUS
trial,O
in,O
breast,O
cancer,O
remains,O
in,O
effect,O
and,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
has,O
discontinued,O
the,O
Phase,O
3,O
trial,O
in,O
breast,O
cancer,O
.,O
,O
As,O
of,O
the,O
date,O
of,O
this,O
prospectus,O
",",O
we,O
can,O
offer,O
no,O
assurances,O
that,O
this,O
serious,O
adverse,O
event,O
was,O
not,O
caused,O
by,O
Stimuvax,I-MISCELLANEOUS
or,O
that,O
there,O
are,O
not,O
or,O
will,O
not,O
be,O
more,O
such,O
serious,O
adverse,O
events,O
in,O
the,O
future,O
.,O
,O
The,O
occurrence,O
of,O
this,O
serious,O
adverse,O
event,O
",",O
or,O
other,O
such,O
serious,O
adverse,O
events,O
",",O
could,O
result,O
in,O
a,O
prolonged,O
delay,O
",",O
including,O
the,O
need,O
to,O
enroll,O
more,O
patients,O
or,O
collect,O
more,O
data,O
",",O
or,O
the,O
termination,O
of,O
the,O
clinical,O
development,O
program,O
for,O
Stimuvax,I-MISCELLANEOUS
.,O
,O
For,O
example,O
",",O
we,O
have,O
been,O
informed,O
that,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
plans,O
to,O
increase,O
the,O
size,O
of,O
the,O
START,O
trial,O
of,O
Stimuvax®,I-MISCELLANEOUS
in,O
NSCLC,I-MISCELLANEOUS
from,O
an,O
estimated,O
number,O
of,O
1322,O
to,O
1476,O
patients,O
as,O
part,O
of,O
a,O
plan,O
to,O
maintain,O
the,O
statistical,O
power,O
of,O
the,O
trial,O
.,O
,O
This,O
change,O
was,O
agreed,O
in,O
consultation,O
with,O
the,O
U.S.,I-GOVERNMENT
Food,I-GOVERNMENT
and,I-GOVERNMENT
Drug,I-GOVERNMENT
Administration,I-GOVERNMENT
(,O
the,O
FDA,I-GOVERNMENT
),O
",",O
and,O
the,O
Special,O
Protocol,O
Agreement,O
(,O
SPA,O
),O
for,O
START,O
has,O
been,O
amended,O
to,O
reflect,O
the,O
change,O
.,O
,O
Another,O
unexpected,O
serious,O
adverse,O
event,O
reaction,O
could,O
cause,O
a,O
similar,O
suspension,O
of,O
clinical,O
trials,O
in,O
the,O
future,O
.,O
,O
Any,O
of,O
these,O
foregoing,O
risks,O
could,O
materially,O
and,O
adversely,O
affect,O
our,O
business,O
",",O
results,O
of,O
operations,O
and,O
the,O
trading,O
price,O
of,O
our,O
common,O
stock,O
.,O
,O
The,O
terms,O
of,O
our,O
secured,O
debt,O
facility,O
may,O
restrict,O
our,O
current,O
and,O
future,O
operations,O
",",O
particularly,O
our,O
ability,O
to,O
respond,O
to,O
changes,O
or,O
to,O
take,O
some,O
actions,O
",",O
and,O
our,O
failure,O
to,O
comply,O
with,O
such,O
covenants,O
",",O
whether,O
due,O
to,O
events,O
beyond,O
our,O
control,O
or,O
otherwise,O
",",O
could,O
result,O
in,O
an,O
event,O
of,O
default,O
which,O
could,O
materially,O
and,O
adversely,O
affect,O
our,O
operating,O
results,O
and,O
our,O
financial,O
condition,O
.,O
,O
In,O
February,O
2011,O
we,O
borrowed,O
$,O
5.0,O
million,O
pursuant,O
to,O
the,O
terms,O
of,O
a,O
loan,O
and,O
security,O
agreement,O
",",O
or,O
the,O
loan,O
agreement,O
",",O
with,O
General,I-BUSINESS
Electric,I-BUSINESS
Capital,I-BUSINESS
Corporation,I-BUSINESS
",",O
or,O
GECC,I-BUSINESS
.,O
,O
In,O
addition,O
",",O
at,O
any,O
time,O
before,O
November,O
1,O
",",O
2011,O
we,O
may,O
",",O
at,O
our,O
sole,O
option,O
",",O
borrow,O
from,O
GECC,I-BUSINESS
an,O
additional,O
$,O
7.5,O
million,O
",",O
subject,O
to,O
our,O
satisfaction,O
of,O
specified,O
conditions,O
precedent,O
.,O
,O
make,O
distributions,O
",",O
or,O
repurchase,O
stock,O
.,O
,O
The,O
loan,O
agreement,O
also,O
requires,O
that,O
we,O
have,O
12,O
months,O
of,O
unrestricted,O
cash,O
and,O
cash,O
equivalents,O
(,O
as,O
calculated,O
in,O
the,O
loan,O
agreement,O
),O
as,O
of,O
each,O
December,O
31,O
during,O
the,O
term,O
of,O
the,O
loan,O
agreement,O
.,O
,O
A,O
breach,O
of,O
any,O
of,O
these,O
covenants,O
or,O
the,O
occurrence,O
of,O
certain,O
other,O
events,O
of,O
default,O
",",O
which,O
are,O
customary,O
in,O
similar,O
loan,O
facilities,O
",",O
would,O
result,O
in,O
a,O
default,O
under,O
the,O
loan,O
agreement,O
.,O
,O
If,O
there,O
was,O
an,O
uncured,O
event,O
of,O
default,O
",",O
GECC,I-BUSINESS
could,O
cause,O
all,O
amounts,O
outstanding,O
under,O
the,O
loan,O
agreement,O
to,O
become,O
due,O
and,O
payable,O
immediately,O
and,O
could,O
proceed,O
against,O
the,O
collateral,O
securing,O
the,O
indebtedness,O
",",O
including,O
our,O
cash,O
",",O
cash,O
equivalents,O
and,O
short-term,O
investments,O
.,O
,O
We,O
can,O
not,O
be,O
certain,O
that,O
our,O
assets,O
would,O
be,O
sufficient,O
to,O
fully,O
repay,O
borrowings,O
under,O
the,O
loan,O
agreement,O
",",O
either,O
upon,O
maturity,O
or,O
acceleration,O
upon,O
an,O
uncured,O
event,O
of,O
default,O
.,O
,O
Our,O
ability,O
to,O
continue,O
with,O
our,O
planned,O
operations,O
is,O
dependent,O
on,O
our,O
success,O
at,O
raising,O
additional,O
capital,O
sufficient,O
to,O
meet,O
our,O
obligations,O
on,O
a,O
timely,O
basis,O
.,O
,O
If,O
we,O
fail,O
to,O
obtain,O
additional,O
financing,O
when,O
needed,O
",",O
we,O
may,O
be,O
unable,O
to,O
complete,O
the,O
development,O
",",O
regulatory,O
approval,O
and,O
commercialization,O
of,O
our,O
product,O
candidates,O
.,O
,O
We,O
have,O
expended,O
and,O
continue,O
to,O
expend,O
substantial,O
funds,O
in,O
connection,O
with,O
our,O
product,O
development,O
activities,O
and,O
clinical,O
trials,O
and,O
regulatory,O
approvals,O
.,O
,O
The,O
very,O
limited,O
funds,O
generated,O
currently,O
from,O
our,O
operations,O
will,O
be,O
insufficient,O
to,O
enable,O
us,O
to,O
bring,O
all,O
of,O
our,O
products,O
currently,O
under,O
development,O
to,O
commercialization,O
.,O
,O
Accordingly,O
",",O
we,O
need,O
to,O
raise,O
additional,O
funds,O
from,O
the,O
sale,O
of,O
our,O
securities,O
",",O
partnering,O
arrangements,O
or,O
other,O
financing,O
transactions,O
in,O
order,O
to,O
finance,O
the,O
commercialization,O
of,O
our,O
product,O
candidates,O
.,O
,O
The,O
current,O
financing,O
environment,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
particularly,O
for,O
biotechnology,O
companies,O
like,O
us,O
",",O
remains,O
challenging,O
and,O
we,O
can,O
provide,O
no,O
assurances,O
as,O
to,O
when,O
such,O
environment,O
will,O
improve,O
.,O
,O
For,O
these,O
reasons,O
",",O
among,O
others,O
",",O
we,O
can,O
not,O
be,O
certain,O
that,O
additional,O
financing,O
will,O
be,O
available,O
when,O
and,O
as,O
needed,O
or,O
",",O
if,O
available,O
",",O
that,O
it,O
will,O
be,O
available,O
on,O
acceptable,O
terms,O
.,O
,O
For,O
example,O
",",O
pursuant,O
to,O
the,O
terms,O
of,O
the,O
loan,O
agreement,O
with,O
GECC,I-BUSINESS
",",O
we,O
may,O
borrow,O
an,O
additional,O
$,O
7.5,O
million,O
at,O
any,O
time,O
before,O
November,O
1,O
",",O
2011,O
",",O
subject,O
to,O
our,O
satisfaction,O
of,O
certain,O
specified,O
conditions,O
precedent,O
.,O
,O
We,O
can,O
not,O
guarantee,O
that,O
we,O
will,O
be,O
able,O
to,O
satisfy,O
such,O
conditions,O
and,O
",",O
thus,O
",",O
the,O
additional,O
$,O
7.5,O
million,O
may,O
be,O
unavailable,O
.,O
,O
If,O
financing,O
is,O
available,O
",",O
it,O
may,O
be,O
on,O
terms,O
that,O
adversely,O
affect,O
the,O
interests,O
of,O
our,O
existing,O
stockholders,O
or,O
restrict,O
our,O
ability,O
to,O
conduct,O
our,O
operations,O
.,O
,O
If,O
adequate,O
financing,O
is,O
not,O
available,O
",",O
we,O
may,O
need,O
to,O
continue,O
to,O
reduce,O
or,O
eliminate,O
our,O
expenditures,O
for,O
research,O
and,O
development,O
",",O
testing,O
",",O
production,O
and,O
marketing,O
for,O
some,O
of,O
our,O
product,O
candidates,O
.,O
,O
Our,O
actual,O
capital,O
requirements,O
will,O
depend,O
on,O
numerous,O
factors,O
",",O
including,O
:,O
,O
We,O
may,O
not,O
be,O
able,O
to,O
secure,O
sufficient,O
financing,O
on,O
acceptable,O
terms,O
.,O
,O
If,O
we,O
can,O
not,O
",",O
we,O
may,O
need,O
to,O
delay,O
",",O
reduce,O
or,O
eliminate,O
some,O
or,O
all,O
of,O
our,O
research,O
and,O
development,O
programs,O
",",O
any,O
of,O
which,O
would,O
be,O
expected,O
to,O
have,O
a,O
material,O
adverse,O
effect,O
on,O
our,O
business,O
",",O
operating,O
results,O
",",O
and,O
financial,O
condition,O
.,O
,O
We,O
have,O
a,O
history,O
of,O
net,O
losses,O
",",O
we,O
anticipate,O
additional,O
losses,O
and,O
we,O
may,O
never,O
become,O
profitable,O
.,O
,O
Other,O
than,O
the,O
year,O
ended,O
December,O
31,O
",",O
2008,O
",",O
we,O
have,O
incurred,O
net,O
losses,O
in,O
each,O
fiscal,O
year,O
since,O
we,O
commenced,O
our,O
research,O
activities,O
in,O
1985,O
.,O
,O
The,O
net,O
income,O
we,O
realized,O
in,O
2008,O
was,O
due,O
entirely,O
to,O
our,O
December,O
2008,O
transactions,O
with,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
and,O
we,O
do,O
not,O
anticipate,O
realizing,O
net,O
income,O
again,O
for,O
the,O
foreseeable,O
future,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2010,O
",",O
our,O
accumulated,O
deficit,O
was,O
approximately,O
$,O
347.3,O
million,O
.,O
,O
Our,O
losses,O
have,O
resulted,O
primarily,O
from,O
expenses,O
incurred,O
in,O
research,O
and,O
development,O
of,O
our,O
product,O
candidates,O
.,O
,O
We,O
do,O
not,O
know,O
when,O
or,O
if,O
we,O
will,O
complete,O
our,O
product,O
development,O
efforts,O
",",O
receive,O
regulatory,O
approval,O
for,O
any,O
of,O
our,O
product,O
candidates,O
",",O
or,O
successfully,O
commercialize,O
any,O
approved,O
products,O
.,O
,O
As,O
a,O
result,O
",",O
it,O
is,O
difficult,O
to,O
predict,O
the,O
extent,O
of,O
any,O
future,O
losses,O
or,O
the,O
time,O
required,O
to,O
achieve,O
profitability,O
",",O
if,O
at,O
all,O
.,O
,O
Any,O
failure,O
of,O
our,O
products,O
to,O
complete,O
successful,O
clinical,O
trials,O
and,O
obtain,O
regulatory,O
approval,O
and,O
any,O
failure,O
to,O
become,O
and,O
remain,O
profitable,O
would,O
adversely,O
affect,O
the,O
price,O
of,O
our,O
common,O
stock,O
and,O
our,O
ability,O
to,O
raise,O
capital,O
and,O
continue,O
operations,O
.,O
,O
There,O
is,O
no,O
assurance,O
that,O
we,O
will,O
be,O
granted,O
regulatory,O
approval,O
for,O
any,O
of,O
our,O
product,O
candidates,O
.,O
,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
has,O
been,O
testing,O
our,O
lead,O
product,O
candidate,O
",",O
Stimuvax,I-MISCELLANEOUS
",",O
in,O
Phase,O
3,O
clinical,O
trials,O
for,O
the,O
treatment,O
of,O
NSCLC,I-MISCELLANEOUS
.,O
,O
We,O
have,O
initiated,O
two,O
Phase,O
1/2,O
trials,O
in,O
2010,O
for,O
PX-866,I-MISCELLANEOUS
",",O
and,O
plan,O
to,O
initiate,O
two,O
additional,O
Phase,O
2,O
trials,O
in,O
the,O
first,O
half,O
of,O
2011,O
.,O
,O
Our,O
other,O
product,O
candidates,O
remain,O
in,O
the,O
pre-clinical,O
testing,O
stages,O
.,O
,O
The,O
results,O
from,O
pre-clinical,O
testing,O
and,O
clinical,O
trials,O
that,O
we,O
have,O
completed,O
may,O
not,O
be,O
predictive,O
of,O
results,O
in,O
future,O
pre-clinical,O
tests,O
and,O
clinical,O
trials,O
",",O
and,O
there,O
can,O
be,O
no,O
assurance,O
that,O
we,O
will,O
demonstrate,O
sufficient,O
safety,O
and,O
efficacy,O
to,O
obtain,O
the,O
requisite,O
regulatory,O
approvals,O
.,O
,O
A,O
number,O
of,O
companies,O
in,O
the,O
biotechnology,O
and,O
pharmaceutical,O
industries,O
",",O
including,O
our,O
company,O
",",O
have,O
suffered,O
significant,O
setbacks,O
in,O
advanced,O
clinical,O
trials,O
",",O
even,O
after,O
promising,O
results,O
in,O
earlier,O
trials,O
.,O
,O
For,O
example,O
",",O
the,O
clinical,O
trials,O
for,O
Stimuvax,I-MISCELLANEOUS
were,O
suspended,O
as,O
a,O
result,O
of,O
a,O
suspected,O
unexpected,O
serious,O
adverse,O
event,O
reaction,O
in,O
a,O
patient,O
.,O
,O
Although,O
the,O
clinical,O
hold,O
for,O
trials,O
in,O
NSCLC,I-MISCELLANEOUS
has,O
been,O
lifted,O
",",O
it,O
remains,O
in,O
effect,O
for,O
the,O
trial,O
in,O
breast,O
cancer,O
and,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
has,O
decided,O
to,O
discontinue,O
the,O
Phase,O
3,O
trial,O
in,O
breast,O
cancer,O
.,O
,O
Regulatory,O
approval,O
may,O
not,O
be,O
obtained,O
for,O
any,O
of,O
our,O
product,O
candidates,O
.,O
,O
If,O
our,O
product,O
candidates,O
are,O
not,O
shown,O
to,O
be,O
safe,O
and,O
effective,O
in,O
clinical,O
trials,O
",",O
the,O
resulting,O
delays,O
in,O
developing,O
other,O
product,O
candidates,O
and,O
conducting,O
related,O
pre-clinical,O
testing,O
and,O
clinical,O
trials,O
",",O
as,O
well,O
as,O
the,O
potential,O
need,O
for,O
additional,O
financing,O
",",O
would,O
have,O
a,O
material,O
adverse,O
effect,O
on,O
our,O
business,O
",",O
financial,O
condition,O
and,O
results,O
of,O
operations,O
.,O
,O
We,O
are,O
dependent,O
upon,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
to,O
develop,O
and,O
commercialize,O
our,O
lead,O
product,O
candidate,O
",",O
Stimuvax,I-MISCELLANEOUS
.,O
,O
Under,O
our,O
license,O
agreement,O
with,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
for,O
our,O
lead,O
product,O
candidate,O
",",O
Stimuvax,I-MISCELLANEOUS
",",O
Merck,I-BUSINESS
KGaA,I-BUSINESS
is,O
entirely,O
responsible,O
for,O
the,O
development,O
",",O
manufacture,O
and,O
worldwide,O
commercialization,O
of,O
Stimuvax,I-MISCELLANEOUS
and,O
the,O
costs,O
associated,O
with,O
such,O
development,O
",",O
manufacture,O
and,O
commercialization,O
.,O
,O
Any,O
future,O
payments,O
",",O
including,O
royalties,O
to,O
us,O
",",O
will,O
depend,O
on,O
the,O
extent,O
to,O
which,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
advances,O
Stimuvax,I-MISCELLANEOUS
through,O
development,O
and,O
commercialization,O
.,O
,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
has,O
the,O
right,O
to,O
terminate,O
the,O
2008,O
license,O
agreement,O
",",O
upon,O
30,O
days,O
written,O
notice,O
",",O
if,O
",",O
in,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
s,O
reasonable,O
judgment,O
",",O
Merck,I-BUSINESS
KGaA,I-BUSINESS
determines,O
that,O
there,O
are,O
issues,O
concerning,O
the,O
safety,O
or,O
efficacy,O
of,O
Stimuvax,I-MISCELLANEOUS
which,O
materially,O
adversely,O
affect,O
Stimuvax,I-MISCELLANEOUS
s,O
medical,O
",",O
economic,O
or,O
competitive,O
viability,O
;,O
provided,O
that,O
if,O
we,O
do,O
not,O
agree,O
with,O
such,O
determination,O
we,O
have,O
the,O
right,O
to,O
cause,O
the,O
matter,O
to,O
be,O
submitted,O
to,O
binding,O
arbitration,O
.,O
,O
Our,O
ability,O
to,O
receive,O
any,O
significant,O
revenue,O
from,O
Stimuvax,I-MISCELLANEOUS
is,O
dependent,O
on,O
the,O
efforts,O
of,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
.,O
,O
to,O
fund,O
the,O
development,O
and,O
commercialization,O
of,O
Stimuvax,I-MISCELLANEOUS
or,O
enter,O
into,O
alternative,O
arrangements,O
with,O
a,O
third,O
party,O
.,O
,O
We,O
could,O
also,O
become,O
involved,O
in,O
disputes,O
with,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
",",O
which,O
could,O
lead,O
to,O
delays,O
in,O
or,O
termination,O
of,O
our,O
development,O
and,O
commercialization,O
of,O
Stimuvax,I-MISCELLANEOUS
and,O
time-consuming,O
and,O
expensive,O
litigation,O
or,O
arbitration,O
.,O
,O
If,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
terminates,O
or,O
breaches,O
its,O
agreement,O
with,O
us,O
",",O
or,O
otherwise,O
fails,O
to,O
complete,O
its,O
obligations,O
in,O
a,O
timely,O
manner,O
",",O
the,O
chances,O
of,O
successfully,O
developing,O
or,O
commercializing,O
Stimuvax,I-MISCELLANEOUS
would,O
be,O
materially,O
and,O
adversely,O
affected,O
.,O
,O
We,O
and,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
currently,O
rely,O
on,O
third,O
party,O
manufacturers,O
to,O
supply,O
our,O
product,O
candidates,O
",",O
which,O
could,O
delay,O
or,O
prevent,O
the,O
clinical,O
development,O
and,O
commercialization,O
of,O
our,O
product,O
candidates,O
.,O
,O
We,O
currently,O
depend,O
on,O
third,O
party,O
manufacturers,O
for,O
the,O
manufacture,O
of,O
PX-866,I-MISCELLANEOUS
.,O
,O
Any,O
disruption,O
in,O
production,O
",",O
inability,O
of,O
these,O
third,O
party,O
manufacturers,O
to,O
produce,O
adequate,O
quantities,O
to,O
meet,O
our,O
needs,O
or,O
other,O
impediments,O
with,O
respect,O
to,O
development,O
or,O
manufacturing,O
could,O
adversely,O
affect,O
our,O
ability,O
to,O
continue,O
our,O
research,O
and,O
development,O
activities,O
or,O
successfully,O
complete,O
pre-clinical,O
studies,O
and,O
clinical,O
trials,O
",",O
delay,O
submissions,O
of,O
our,O
regulatory,O
applications,O
or,O
adversely,O
affect,O
our,O
ability,O
to,O
commercialize,O
our,O
product,O
candidates,O
in,O
a,O
timely,O
manner,O
",",O
or,O
at,O
all,O
.,O
,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
currently,O
depends,O
on,O
a,O
single,O
manufacturer,O
",",O
Baxter,I-BUSINESS
International,I-BUSINESS
Inc.,I-BUSINESS
",",O
or,O
Baxter,I-BUSINESS
",",O
for,O
the,O
supply,O
of,O
our,O
lead,O
product,O
candidate,O
",",O
Stimuvax,I-MISCELLANEOUS
",",O
and,O
on,O
Corixa,I-BUSINESS
Corp.,I-BUSINESS
(,O
now,O
a,O
part,O
of,O
GlaxoSmithKline,I-BUSINESS
plc,I-BUSINESS
",",O
or,O
GSK,I-BUSINESS
),O
for,O
the,O
manufacture,O
of,O
the,O
adjuvant,O
in,O
Stimuvax,I-MISCELLANEOUS
.,O
,O
If,O
Stimuvax,I-MISCELLANEOUS
is,O
not,O
approved,O
by,O
2015,O
",",O
Corixa/GSK,I-BUSINESS
may,O
terminate,O
its,O
obligation,O
to,O
supply,O
the,O
adjuvant,O
.,O
,O
In,O
this,O
case,O
",",O
we,O
or,O
our,O
partner,O
would,O
retain,O
the,O
necessary,O
licenses,O
from,O
Corixa/GSK,I-BUSINESS
required,O
to,O
have,O
the,O
adjuvant,O
manufactured,O
",",O
but,O
the,O
transfer,O
of,O
the,O
process,O
to,O
a,O
third,O
party,O
would,O
delay,O
the,O
development,O
and,O
commercialization,O
of,O
Stimuvax,I-MISCELLANEOUS
",",O
which,O
would,O
materially,O
harm,O
our,O
business,O
.,O
,O
Similarly,O
",",O
we,O
rely,O
on,O
a,O
single,O
manufacturer,O
",",O
Fermentek,I-BUSINESS
",",I-BUSINESS
LTD.,I-BUSINESS
for,O
the,O
supply,O
of,O
Wortmannin,I-MISCELLANEOUS
",",O
a,O
key,O
raw,O
ingredient,O
for,O
PX-866,I-MISCELLANEOUS
.,O
,O
Without,O
the,O
timely,O
support,O
of,O
Fermentek,I-BUSINESS
",",I-BUSINESS
LTD.,I-BUSINESS
",",O
our,O
development,O
program,O
for,O
PX-866,I-MISCELLANEOUS
could,O
suffer,O
significant,O
delays,O
",",O
require,O
significantly,O
higher,O
spending,O
or,O
face,O
cancellation,O
.,O
,O
Our,O
product,O
candidates,O
have,O
not,O
yet,O
been,O
manufactured,O
on,O
a,O
commercial,O
scale,O
.,O
,O
In,O
order,O
to,O
commercialize,O
a,O
product,O
candidate,O
",",O
the,O
third,O
party,O
manufacturer,O
may,O
need,O
to,O
increase,O
its,O
manufacturing,O
capacity,O
",",O
which,O
may,O
require,O
the,O
manufacturer,O
to,O
fund,O
capital,O
improvements,O
to,O
support,O
the,O
scale,O
up,O
of,O
manufacturing,O
and,O
related,O
activities,O
.,O
,O
With,O
respect,O
to,O
PX-866,I-MISCELLANEOUS
",",O
we,O
may,O
be,O
required,O
to,O
provide,O
all,O
or,O
a,O
portion,O
of,O
these,O
funds,O
.,O
,O
The,O
third,O
party,O
manufacturer,O
may,O
not,O
be,O
able,O
to,O
successfully,O
increase,O
its,O
manufacturing,O
capacity,O
for,O
our,O
product,O
candidate,O
for,O
which,O
we,O
obtain,O
marketing,O
approval,O
in,O
a,O
timely,O
or,O
economic,O
manner,O
",",O
or,O
at,O
all,O
.,O
,O
If,O
any,O
manufacturer,O
is,O
unable,O
to,O
provide,O
commercial,O
quantities,O
of,O
a,O
product,O
candidate,O
",",O
we,O
(,O
or,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
",",O
in,O
the,O
case,O
of,O
Stimuvax,I-MISCELLANEOUS
),O
will,O
need,O
to,O
successfully,O
transfer,O
manufacturing,O
technology,O
to,O
a,O
new,O
manufacturer,O
.,O
,O
Engaging,O
a,O
new,O
manufacturer,O
for,O
a,O
particular,O
product,O
candidate,O
could,O
require,O
us,O
(,O
or,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
",",O
in,O
the,O
case,O
of,O
Stimuvax,I-MISCELLANEOUS
),O
to,O
conduct,O
comparative,O
studies,O
or,O
use,O
other,O
means,O
to,O
determine,O
equivalence,O
between,O
product,O
candidates,O
manufactured,O
by,O
a,O
new,O
manufacturer,O
and,O
those,O
previously,O
manufactured,O
by,O
the,O
existing,O
manufacturer,O
",",O
which,O
could,O
delay,O
or,O
prevent,O
commercialization,O
of,O
our,O
product,O
candidates,O
.,O
,O
If,O
any,O
of,O
these,O
manufacturers,O
is,O
unable,O
or,O
unwilling,O
to,O
increase,O
its,O
manufacturing,O
capacity,O
or,O
if,O
alternative,O
arrangements,O
are,O
not,O
established,O
on,O
a,O
timely,O
basis,O
or,O
on,O
acceptable,O
terms,O
",",O
the,O
development,O
and,O
commercialization,O
of,O
our,O
product,O
candidates,O
may,O
be,O
delayed,O
or,O
there,O
may,O
be,O
a,O
shortage,O
in,O
supply,O
.,O
,O
Any,O
manufacturer,O
of,O
our,O
products,O
must,O
comply,O
with,O
current,I-LEGISLATION/ACT
Good,I-LEGISLATION/ACT
Manufacturing,I-LEGISLATION/ACT
Practices,I-LEGISLATION/ACT
",",O
or,O
cGMP,I-LEGISLATION/ACT
",",O
requirements,O
enforced,O
by,O
the,O
FDA,I-GOVERNMENT
through,O
its,O
facilities,O
inspection,O
program,O
or,O
by,O
foreign,O
regulatory,O
agencies,O
.,O
,O
These,O
requirements,O
include,O
quality,O
control,O
",",O
quality,O
assurance,O
and,O
the,O
maintenance,O
of,O
records,O
and,O
documentation,O
.,O
,O
with,O
other,O
FDA,I-GOVERNMENT
",",O
state,O
and,O
foreign,O
regulatory,O
requirements,O
.,O
,O
We,O
have,O
little,O
control,O
over,O
our,O
manufacturers,O
compliance,O
with,O
these,O
regulations,O
and,O
standards,O
.,O
,O
A,O
failure,O
to,O
comply,O
with,O
these,O
requirements,O
may,O
result,O
in,O
fines,O
and,O
civil,O
penalties,O
",",O
suspension,O
of,O
production,O
",",O
suspension,O
or,O
delay,O
in,O
product,O
approval,O
",",O
product,O
seizure,O
or,O
recall,O
",",O
or,O
withdrawal,O
of,O
product,O
approval,O
.,O
,O
If,O
the,O
safety,O
of,O
any,O
quantities,O
supplied,O
is,O
compromised,O
due,O
to,O
our,O
manufacturers,O
failure,O
to,O
adhere,O
to,O
applicable,O
laws,O
or,O
for,O
other,O
reasons,O
",",O
we,O
may,O
not,O
be,O
able,O
to,O
obtain,O
regulatory,O
approval,O
for,O
or,O
successfully,O
commercialize,O
our,O
products,O
.,O
,O
Any,O
failure,O
or,O
delay,O
in,O
commencing,O
or,O
completing,O
clinical,O
trials,O
for,O
our,O
product,O
candidates,O
could,O
severely,O
harm,O
our,O
business,O
.,O
,O
Each,O
of,O
our,O
product,O
candidates,O
must,O
undergo,O
extensive,O
pre-clinical,O
studies,O
and,O
clinical,O
trials,O
as,O
a,O
condition,O
to,O
regulatory,O
approval,O
.,O
,O
Pre-clinical,O
studies,O
and,O
clinical,O
trials,O
are,O
expensive,O
and,O
take,O
many,O
years,O
to,O
complete,O
.,O
,O
The,O
commencement,O
and,O
completion,O
of,O
clinical,O
trials,O
for,O
our,O
product,O
candidates,O
may,O
be,O
delayed,O
by,O
many,O
factors,O
",",O
including,O
:,O
,O
It,O
is,O
possible,O
that,O
none,O
of,O
our,O
product,O
candidates,O
will,O
complete,O
clinical,O
trials,O
in,O
any,O
of,O
the,O
markets,O
in,O
which,O
we,O
and/or,O
our,O
collaborators,O
intend,O
to,O
sell,O
those,O
product,O
candidates,O
.,O
,O
Accordingly,O
",",O
we,O
and/or,O
our,O
collaborators,O
may,O
not,O
receive,O
the,O
regulatory,O
approvals,O
necessary,O
to,O
market,O
our,O
product,O
candidates,O
.,O
,O
Any,O
failure,O
or,O
delay,O
in,O
commencing,O
or,O
completing,O
clinical,O
trials,O
or,O
obtaining,O
regulatory,O
approvals,O
for,O
product,O
candidates,O
would,O
prevent,O
or,O
delay,O
their,O
commercialization,O
and,O
severely,O
harm,O
our,O
business,O
and,O
financial,O
condition,O
.,O
,O
For,O
example,O
",",O
although,O
the,O
suspension,O
of,O
the,O
clinical,O
development,O
program,O
for,O
Stimuvax,I-MISCELLANEOUS
in,O
March,O
2010,O
has,O
been,O
lifted,O
for,O
trials,O
in,O
NSCLC,I-MISCELLANEOUS
",",O
it,O
remains,O
in,O
effect,O
for,O
the,O
Phase,O
3,O
breast,O
cancer,O
trial,O
and,O
",",O
in,O
any,O
event,O
",",O
may,O
result,O
in,O
a,O
prolonged,O
delay,O
or,O
in,O
the,O
termination,O
of,O
the,O
clinical,O
development,O
program,O
for,O
Stimuvax,I-MISCELLANEOUS
.,O
,O
For,O
example,O
",",O
Merck,I-BUSINESS
KGaA,I-BUSINESS
has,O
announced,O
that,O
it,O
has,O
decided,O
to,O
discontinue,O
the,O
Phase,O
3,O
trial,O
in,O
breast,O
cancer,O
.,O
,O
A,O
prolonged,O
delay,O
or,O
termination,O
of,O
the,O
clinical,O
development,O
program,O
would,O
have,O
a,O
material,O
adverse,O
impact,O
on,O
our,O
business,O
and,O
financial,O
condition,O
.,O
,O
The,O
failure,O
to,O
enroll,O
patients,O
for,O
clinical,O
trials,O
may,O
cause,O
delays,O
in,O
developing,O
our,O
product,O
candidates,O
.,O
,O
We,O
may,O
encounter,O
delays,O
if,O
we,O
",",O
any,O
collaboration,O
partners,O
or,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
are,O
unable,O
to,O
enroll,O
enough,O
patients,O
to,O
complete,O
clinical,O
trials,O
.,O
,O
Patient,O
enrollment,O
depends,O
on,O
many,O
factors,O
",",O
including,O
",",O
the,O
size,O
of,O
the,O
patient,O
population,O
",",O
the,O
nature,O
of,O
the,O
protocol,O
",",O
the,O
proximity,O
of,O
patients,O
to,O
clinical,O
sites,O
and,O
the,O
eligibility,O
criteria,O
for,O
the,O
trial,O
.,O
,O
simultaneously,O
",",O
patient,O
enrollment,O
in,O
ongoing,O
trials,O
can,O
be,O
adversely,O
affected,O
by,O
negative,O
results,O
from,O
completed,O
trials,O
.,O
,O
Our,O
product,O
candidates,O
are,O
focused,O
in,O
oncology,O
",",O
which,O
can,O
be,O
a,O
difficult,O
patient,O
population,O
to,O
recruit,O
.,O
,O
For,O
example,O
",",O
the,O
suspension,O
of,O
the,O
Stimuvax,I-MISCELLANEOUS
trials,O
resulted,O
in,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
enrolling,O
additional,O
patients,O
which,O
could,O
delay,O
such,O
trials,O
.,O
,O
We,O
rely,O
on,O
third,O
parties,O
to,O
conduct,O
our,O
clinical,O
trials,O
.,O
,O
If,O
these,O
third,O
parties,O
do,O
not,O
perform,O
as,O
contractually,O
required,O
or,O
otherwise,O
expected,O
",",O
we,O
may,O
not,O
be,O
able,O
to,O
obtain,O
regulatory,O
approval,O
for,O
or,O
be,O
able,O
to,O
commercialize,O
our,O
product,O
candidates,O
.,O
,O
We,O
rely,O
on,O
third,O
parties,O
",",O
such,O
as,O
contract,O
research,O
organizations,O
",",O
medical,O
institutions,O
",",O
clinical,O
investigators,O
and,O
contract,O
laboratories,O
",",O
to,O
assist,O
in,O
conducting,O
our,O
clinical,O
trials,O
.,O
,O
We,O
have,O
",",O
in,O
the,O
ordinary,O
course,O
of,O
business,O
",",O
entered,O
into,O
agreements,O
with,O
these,O
third,O
parties,O
.,O
,O
Nonetheless,O
",",O
we,O
are,O
responsible,O
for,O
confirming,O
that,O
each,O
of,O
our,O
clinical,O
trials,O
is,O
conducted,O
in,O
accordance,O
with,O
its,O
general,O
investigational,O
plan,O
and,O
protocol,O
.,O
,O
Moreover,O
",",O
the,O
FDA,I-GOVERNMENT
and,O
foreign,O
regulatory,O
agencies,O
require,O
us,O
to,O
comply,O
with,O
regulations,O
and,O
standards,O
",",O
commonly,O
referred,O
to,O
as,O
good,O
clinical,O
practices,O
",",O
for,O
conducting,O
",",O
recording,O
and,O
reporting,O
the,O
results,O
of,O
clinical,O
trials,O
to,O
assure,O
that,O
data,O
and,O
reported,O
results,O
are,O
credible,O
and,O
accurate,O
and,O
that,O
the,O
trial,O
participants,O
are,O
adequately,O
protected,O
.,O
,O
Our,O
reliance,O
on,O
third,O
parties,O
does,O
not,O
relieve,O
us,O
of,O
these,O
responsibilities,O
and,O
requirements,O
.,O
,O
If,O
these,O
third,O
parties,O
do,O
not,O
successfully,O
carry,O
out,O
their,O
contractual,O
duties,O
or,O
regulatory,O
obligations,O
or,O
meet,O
expected,O
deadlines,O
",",O
if,O
the,O
third,O
parties,O
need,O
to,O
be,O
replaced,O
or,O
if,O
the,O
quality,O
or,O
accuracy,O
of,O
the,O
data,O
they,O
obtain,O
is,O
compromised,O
due,O
to,O
the,O
failure,O
to,O
adhere,O
to,O
our,O
clinical,O
protocols,O
or,O
regulatory,O
requirements,O
or,O
for,O
other,O
reasons,O
",",O
our,O
pre-clinical,O
development,O
activities,O
or,O
clinical,O
trials,O
may,O
be,O
extended,O
",",O
delayed,O
",",O
suspended,O
or,O
terminated,O
",",O
and,O
we,O
may,O
not,O
be,O
able,O
to,O
obtain,O
regulatory,O
approval,O
for,O
our,O
product,O
candidates,O
.,O
,O
Even,O
if,O
regulatory,O
approval,O
is,O
received,O
for,O
our,O
product,O
candidates,O
",",O
the,O
later,O
discovery,O
of,O
previously,O
unknown,O
problems,O
with,O
a,O
product,O
",",O
manufacturer,O
or,O
facility,O
may,O
result,O
in,O
restrictions,O
",",O
including,O
withdrawal,O
of,O
the,O
product,O
from,O
the,O
market,O
.,O
,O
Approval,O
of,O
a,O
product,O
candidate,O
may,O
be,O
conditioned,O
upon,O
certain,O
limitations,O
and,O
restrictions,O
as,O
to,O
the,O
drug,O
s,O
use,O
",",O
or,O
upon,O
the,O
conduct,O
of,O
further,O
studies,O
",",O
and,O
may,O
be,O
subject,O
to,O
continuous,O
review,O
.,O
,O
After,O
approval,O
of,O
a,O
product,O
",",O
if,O
any,O
",",O
there,O
will,O
be,O
significant,O
ongoing,O
regulatory,O
compliance,O
obligations,O
",",O
and,O
if,O
we,O
or,O
our,O
collaborators,O
fail,O
to,O
comply,O
with,O
these,O
requirements,O
",",O
we,O
",",O
any,O
of,O
our,O
collaborators,O
or,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
could,O
be,O
subject,O
to,O
penalties,O
",",O
including,O
:,O
,O
Regulatory,O
agencies,O
may,O
require,O
us,O
",",O
any,O
of,O
our,O
collaborators,O
or,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
to,O
delay,O
",",O
restrict,O
or,O
discontinue,O
clinical,O
trials,O
on,O
various,O
grounds,O
",",O
including,O
a,O
finding,O
that,O
the,O
subjects,O
or,O
patients,O
are,O
being,O
exposed,O
to,O
an,O
unacceptable,O
health,O
risk,O
.,O
,O
For,O
example,O
",",O
in,O
March,O
2010,O
",",O
Merck,I-BUSINESS
KGaA,I-BUSINESS
suspended,O
the,O
clinical,O
development,O
program,O
for,O
Stimuvax,I-MISCELLANEOUS
in,O
both,O
NSCLC,I-MISCELLANEOUS
and,O
breast,O
cancer,O
as,O
the,O
result,O
of,O
a,O
suspected,O
unexpected,O
serious,O
adverse,O
event,O
reaction,O
in,O
a,O
patient,O
with,O
multiple,O
myeloma,O
participating,O
in,O
an,O
exploratory,O
clinical,O
trial,O
.,O
,O
Although,O
the,O
clinical,O
hold,O
placed,O
on,O
Stimuvax,I-MISCELLANEOUS
clinical,O
trials,O
in,O
NSCLC,I-MISCELLANEOUS
has,O
been,O
lifted,O
",",O
the,O
suspension,O
of,O
clinical,O
trials,O
in,O
breast,O
cancer,O
remains,O
in,O
effect,O
and,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
has,O
announced,O
that,O
it,O
has,O
decided,O
to,O
discontinue,O
the,O
Phase,O
3,O
trial,O
in,O
breast,O
cancer,O
.,O
,O
In,O
addition,O
",",O
we,O
",",O
any,O
of,O
our,O
collaborators,O
or,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
may,O
be,O
unable,O
to,O
submit,O
applications,O
to,O
regulatory,O
agencies,O
within,O
the,O
time,O
frame,O
we,O
currently,O
expect,O
.,O
,O
Once,O
submitted,O
",",O
applications,O
must,O
be,O
approved,O
by,O
various,O
regulatory,O
agencies,O
before,O
we,O
",",O
any,O
of,O
our,O
collaborators,O
or,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
can,O
commercialize,O
the,O
product,O
described,O
in,O
the,O
application,O
.,O
,O
All,O
statutes,O
and,O
regulations,O
governing,O
the,O
conduct,O
of,O
clinical,O
trials,O
are,O
subject,O
to,O
change,O
in,O
the,O
future,O
",",O
which,O
could,O
affect,O
the,O
cost,O
of,O
such,O
clinical,O
trials,O
.,O
,O
Any,O
unanticipated,O
costs,O
or,O
delays,O
in,O
such,O
clinical,O
studies,O
could,O
delay,O
our,O
ability,O
to,O
generate,O
revenues,O
and,O
harm,O
our,O
financial,O
condition,O
and,O
results,O
of,O
operations,O
.,O
,O
Failure,O
to,O
obtain,O
regulatory,O
approval,O
in,O
foreign,O
jurisdictions,O
would,O
prevent,O
us,O
from,O
marketing,O
our,O
products,O
internationally,O
.,O
,O
We,O
intend,O
to,O
have,O
our,O
product,O
candidates,O
marketed,O
outside,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
In,O
order,O
to,O
market,O
our,O
products,O
in,O
the,O
European,I-GOVERNMENT
Union,I-GOVERNMENT
and,O
many,O
other,O
non-U.S.,I-MISCELLANEOUS
jurisdictions,O
",",O
we,O
must,O
obtain,O
separate,O
regulatory,O
approvals,O
and,O
comply,O
with,O
numerous,O
and,O
varying,O
regulatory,O
requirements,O
.,O
,O
To,O
date,O
",",O
we,O
have,O
not,O
filed,O
for,O
marketing,O
approval,O
for,O
any,O
of,O
our,O
product,O
candidates,O
and,O
may,O
not,O
receive,O
the,O
approvals,O
necessary,O
to,O
commercialize,O
our,O
product,O
candidates,O
in,O
any,O
market,O
.,O
,O
The,O
approval,O
procedure,O
varies,O
among,O
countries,O
and,O
can,O
involve,O
additional,O
testing,O
and,O
data,O
review,O
.,O
,O
The,O
time,O
required,O
to,O
obtain,O
foreign,O
regulatory,O
approval,O
may,O
differ,O
from,O
that,O
required,O
to,O
obtain,O
FDA,I-GOVERNMENT
approval,O
.,O
,O
The,O
foreign,O
regulatory,O
approval,O
process,O
may,O
include,O
all,O
of,O
the,O
risks,O
associated,O
with,O
obtaining,O
FDA,I-GOVERNMENT
approval,O
.,O
,O
We,O
may,O
not,O
obtain,O
foreign,O
regulatory,O
approvals,O
on,O
a,O
timely,O
basis,O
",",O
if,O
at,O
all,O
.,O
,O
Approval,O
by,O
the,O
FDA,I-GOVERNMENT
does,O
not,O
ensure,O
approval,O
by,O
regulatory,O
agencies,O
in,O
other,O
countries,O
",",O
and,O
approval,O
by,O
one,O
foreign,O
regulatory,O
authority,O
does,O
not,O
ensure,O
approval,O
by,O
regulatory,O
agencies,O
in,O
other,O
foreign,O
countries,O
or,O
by,O
the,O
FDA,I-GOVERNMENT
.,O
,O
However,O
",",O
a,O
failure,O
or,O
delay,O
in,O
obtaining,O
regulatory,O
approval,O
in,O
one,O
jurisdiction,O
may,O
have,O
a,O
negative,O
effect,O
on,O
the,O
regulatory,O
approval,O
process,O
in,O
other,O
jurisdictions,O
",",O
including,O
approval,O
by,O
the,O
FDA,I-GOVERNMENT
.,O
,O
The,O
failure,O
to,O
obtain,O
regulatory,O
approval,O
in,O
foreign,O
jurisdictions,O
could,O
harm,O
our,O
business,O
.,O
,O
Our,O
product,O
candidates,O
may,O
never,O
achieve,O
market,O
acceptance,O
even,O
if,O
we,O
obtain,O
regulatory,O
approvals,O
.,O
,O
Even,O
if,O
we,O
receive,O
regulatory,O
approvals,O
for,O
the,O
commercial,O
sale,O
of,O
our,O
product,O
candidates,O
",",O
the,O
commercial,O
success,O
of,O
these,O
product,O
candidates,O
will,O
depend,O
on,O
",",O
among,O
other,O
things,O
",",O
their,O
acceptance,O
by,O
physicians,O
",",O
patients,O
",",O
third,O
party,O
payers,O
such,O
as,O
health,O
insurance,O
companies,O
and,O
other,O
members,O
of,O
the,O
medical,O
community,O
as,O
a,O
therapeutic,O
and,O
cost-effective,O
alternative,O
to,O
competing,O
products,O
and,O
treatments,O
.,O
,O
If,O
our,O
product,O
candidates,O
fail,O
to,O
gain,O
market,O
acceptance,O
",",O
we,O
may,O
be,O
unable,O
to,O
earn,O
sufficient,O
revenue,O
to,O
continue,O
our,O
business,O
.,O
,O
Market,O
acceptance,O
of,O
",",O
and,O
demand,O
for,O
",",O
any,O
product,O
that,O
we,O
may,O
develop,O
and,O
commercialize,O
will,O
depend,O
on,O
many,O
factors,O
",",O
including,O
:,O
,O
If,O
our,O
product,O
candidates,O
do,O
not,O
become,O
widely,O
accepted,O
by,O
physicians,O
",",O
patients,O
",",O
third,O
party,O
payors,O
and,O
other,O
members,O
of,O
the,O
medical,O
community,O
",",O
our,O
business,O
",",O
financial,O
condition,O
and,O
results,O
of,O
operations,O
would,O
be,O
materially,O
and,O
adversely,O
affected,O
.,O
,O
If,O
we,O
are,O
unable,O
to,O
obtain,O
",",O
maintain,O
and,O
enforce,O
our,O
proprietary,O
rights,O
",",O
we,O
may,O
not,O
be,O
able,O
to,O
compete,O
effectively,O
or,O
operate,O
profitably,O
.,O
,O
Our,O
success,O
is,O
dependent,O
in,O
part,O
on,O
obtaining,O
",",O
maintaining,O
and,O
enforcing,O
our,O
patents,O
and,O
other,O
proprietary,O
rights,O
and,O
will,O
depend,O
in,O
large,O
part,O
on,O
our,O
ability,O
to,O
:,O
,O
As,O
of,O
December,O
31,O
",",O
2010,O
",",O
we,O
owned,O
approximately,O
16,O
U.S.,I-LOCATION
patents,O
and,O
21,O
U.S.,I-LOCATION
patent,O
applications,O
",",O
as,O
well,O
as,O
the,O
corresponding,O
foreign,O
patents,O
and,O
patent,O
applications,O
",",O
and,O
held,O
exclusive,O
or,O
partially,O
exclusive,O
licenses,O
to,O
approximately,O
eight,O
U.S.,I-LOCATION
patents,O
and,O
two,O
U.S.,I-LOCATION
patent,O
applications,O
",",O
as,O
well,O
as,O
the,O
corresponding,O
foreign,O
patents,O
and,O
patent,O
applications,O
.,O
,O
The,O
degree,O
of,O
future,O
protection,O
for,O
our,O
proprietary,O
rights,O
is,O
uncertain,O
.,O
,O
The,O
patent,O
position,O
of,O
biotechnology,O
and,O
pharmaceutical,O
firms,O
is,O
highly,O
uncertain,O
and,O
involves,O
many,O
complex,O
legal,O
and,O
technical,O
issues,O
.,O
,O
There,O
is,O
no,O
clear,O
policy,O
involving,O
the,O
breadth,O
of,O
claims,O
allowed,O
in,O
patents,O
or,O
the,O
degree,O
of,O
protection,O
afforded,O
under,O
patents,O
.,O
,O
Although,O
we,O
believe,O
our,O
potential,O
rights,O
under,O
patent,O
applications,O
provide,O
a,O
competitive,O
advantage,O
",",O
it,O
is,O
possible,O
that,O
patent,O
applications,O
owned,O
by,O
or,O
licensed,O
to,O
us,O
will,O
not,O
result,O
in,O
patents,O
being,O
issued,O
",",O
or,O
that,O
",",O
if,O
issued,O
",",O
the,O
patents,O
will,O
not,O
give,O
us,O
an,O
advantage,O
over,O
competitors,O
with,O
similar,O
products,O
or,O
technology,O
",",O
nor,O
can,O
we,O
assure,O
you,O
that,O
we,O
can,O
obtain,O
",",O
maintain,O
and,O
enforce,O
all,O
ownership,O
and,O
other,O
proprietary,O
rights,O
necessary,O
to,O
develop,O
and,O
commercialize,O
our,O
product,O
candidates,O
.,O
,O
Even,O
if,O
any,O
or,O
all,O
of,O
our,O
patent,O
applications,O
issue,O
as,O
patents,O
",",O
others,O
may,O
challenge,O
the,O
validity,O
",",O
inventorship,O
",",O
ownership,O
",",O
enforceability,O
or,O
scope,O
of,O
our,O
patents,O
or,O
other,O
technology,O
used,O
in,O
or,O
otherwise,O
necessary,O
for,O
the,O
development,O
and,O
commercialization,O
of,O
our,O
product,O
candidates,O
.,O
,O
We,O
may,O
not,O
be,O
successful,O
in,O
defending,O
against,O
any,O
such,O
challenges,O
.,O
,O
Moreover,O
",",O
the,O
cost,O
of,O
litigation,O
to,O
uphold,O
the,O
validity,O
of,O
patents,O
to,O
prevent,O
infringement,O
or,O
to,O
otherwise,O
protect,O
our,O
proprietary,O
rights,O
can,O
be,O
substantial,O
.,O
,O
If,O
the,O
outcome,O
of,O
litigation,O
is,O
adverse,O
to,O
us,O
",",O
third,O
parties,O
may,O
be,O
able,O
to,O
use,O
the,O
challenged,O
technologies,O
without,O
payment,O
to,O
us,O
.,O
,O
There,O
is,O
no,O
assurance,O
that,O
our,O
patents,O
",",O
if,O
issued,O
",",O
will,O
not,O
be,O
infringed,O
or,O
successfully,O
avoided,O
through,O
design,O
innovation,O
.,O
,O
Intellectual,O
property,O
lawsuits,O
are,O
expensive,O
and,O
would,O
consume,O
time,O
and,O
other,O
resources,O
",",O
even,O
if,O
the,O
outcome,O
were,O
successful,O
.,O
,O
In,O
addition,O
",",O
there,O
is,O
a,O
risk,O
that,O
a,O
court,O
would,O
decide,O
that,O
our,O
patents,O
",",O
if,O
issued,O
",",O
are,O
not,O
valid,O
and,O
that,O
we,O
do,O
not,O
have,O
the,O
right,O
to,O
stop,O
the,O
other,O
party,O
from,O
using,O
the,O
inventions,O
.,O
,O
There,O
is,O
also,O
the,O
risk,O
that,O
",",O
even,O
if,O
the,O
validity,O
of,O
a,O
patent,O
were,O
upheld,O
",",O
a,O
court,O
would,O
refuse,O
to,O
stop,O
the,O
other,O
party,O
from,O
using,O
the,O
inventions,O
",",O
including,O
on,O
the,O
ground,O
that,O
its,O
activities,O
do,O
not,O
infringe,O
that,O
patent,O
.,O
,O
If,O
any,O
of,O
these,O
events,O
were,O
to,O
occur,O
",",O
our,O
business,O
",",O
financial,O
condition,O
and,O
results,O
of,O
operations,O
would,O
be,O
materially,O
and,O
adversely,O
effected,O
.,O
,O
In,O
addition,O
to,O
the,O
intellectual,O
property,O
and,O
other,O
rights,O
described,O
above,O
",",O
we,O
also,O
rely,O
on,O
unpatented,O
technology,O
",",O
trade,O
secrets,O
",",O
trademarks,O
and,O
confidential,O
information,O
",",O
particularly,O
when,O
we,O
do,O
not,O
believe,O
that,O
patent,O
protection,O
is,O
appropriate,O
or,O
available,O
.,O
,O
However,O
",",O
trade,O
secrets,O
are,O
difficult,O
to,O
protect,O
and,O
it,O
is,O
possible,O
that,O
others,O
will,O
independently,O
develop,O
substantially,O
equivalent,O
information,O
and,O
techniques,O
or,O
otherwise,O
gain,O
access,O
to,O
or,O
disclose,O
our,O
unpatented,O
technology,O
",",O
trade,O
secrets,O
and,O
confidential,O
information,O
.,O
,O
We,O
require,O
each,O
of,O
our,O
employees,O
",",O
consultants,O
and,O
advisors,O
to,O
execute,O
a,O
confidentiality,O
and,O
invention,O
assignment,O
agreement,O
at,O
the,O
commencement,O
of,O
an,O
employment,O
or,O
consulting,O
relationship,O
with,O
us,O
.,O
,O
However,O
",",O
it,O
is,O
possible,O
that,O
these,O
agreements,O
will,O
not,O
provide,O
effective,O
protection,O
of,O
our,O
confidential,O
information,O
or,O
",",O
in,O
the,O
event,O
of,O
unauthorized,O
use,O
of,O
our,O
intellectual,O
property,O
or,O
the,O
intellectual,O
property,O
of,O
third,O
parties,O
",",O
provide,O
adequate,O
or,O
effective,O
remedies,O
or,O
protection,O
.,O
,O
If,O
our,O
vaccine,O
technology,O
or,O
our,O
product,O
candidates,O
",",O
including,O
Stimuvax,O
",",O
conflict,O
with,O
the,O
rights,O
of,O
others,O
",",O
we,O
may,O
not,O
be,O
able,O
to,O
manufacture,O
or,O
market,O
our,O
product,O
candidates,O
",",O
which,O
could,O
have,O
a,O
material,O
and,O
adverse,O
effect,O
on,O
us,O
and,O
on,O
our,O
collaboration,O
with,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
.,O
,O
Issued,O
patents,O
held,O
by,O
others,O
may,O
limit,O
our,O
ability,O
to,O
develop,O
commercial,O
products,O
.,O
,O
All,O
issued,O
patents,O
are,O
entitled,O
to,O
a,O
presumption,O
of,O
validity,O
under,O
the,O
laws,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
If,O
we,O
need,O
licenses,O
to,O
such,O
patents,O
to,O
permit,O
us,O
to,O
develop,O
or,O
market,O
our,O
product,O
candidates,O
",",O
we,O
may,O
be,O
required,O
to,O
pay,O
significant,O
fees,O
or,O
royalties,O
",",O
and,O
we,O
can,O
not,O
be,O
certain,O
that,O
we,O
would,O
be,O
able,O
to,O
obtain,O
such,O
licenses,O
on,O
commercially,O
reasonable,O
terms,O
",",O
if,O
at,O
all,O
.,O
,O
Competitors,O
or,O
third,O
parties,O
may,O
obtain,O
patents,O
that,O
may,O
cover,O
subject,O
matter,O
we,O
use,O
in,O
developing,O
the,O
technology,O
required,O
to,O
bring,O
our,O
products,O
to,O
market,O
",",O
that,O
we,O
use,O
in,O
producing,O
our,O
products,O
",",O
or,O
that,O
we,O
use,O
in,O
treating,O
patients,O
with,O
our,O
products,O
.,O
,O
We,O
know,O
that,O
others,O
have,O
filed,O
patent,O
applications,O
in,O
various,O
jurisdictions,O
that,O
relate,O
to,O
several,O
areas,O
in,O
which,O
we,O
are,O
developing,O
products,O
.,O
,O
of,O
patents,O
and,O
some,O
are,O
still,O
pending,O
.,O
,O
We,O
may,O
be,O
required,O
to,O
alter,O
our,O
processes,O
or,O
product,O
candidates,O
",",O
pay,O
licensing,O
fees,O
or,O
cease,O
activities,O
.,O
,O
Certain,O
parts,O
of,O
our,O
vaccine,O
technology,O
",",O
including,O
the,O
MUC1,I-MISCELLANEOUS
antigen,I-MISCELLANEOUS
",",O
originated,O
from,O
third,O
party,O
sources,O
.,O
,O
These,O
third,O
party,O
sources,O
include,O
academic,O
",",O
government,O
and,O
other,O
research,O
laboratories,O
",",O
as,O
well,O
as,O
the,O
public,O
domain,O
.,O
,O
If,O
use,O
of,O
technology,O
incorporated,O
into,O
or,O
used,O
to,O
produce,O
our,O
product,O
candidates,O
is,O
challenged,O
",",O
or,O
if,O
our,O
processes,O
or,O
product,O
candidates,O
conflict,O
with,O
patent,O
rights,O
of,O
others,O
",",O
third,O
parties,O
could,O
bring,O
legal,O
actions,O
against,O
us,O
",",O
in,O
Europe,I-LOCATION
",",O
the,O
United,I-LOCATION
States,I-LOCATION
and,O
elsewhere,O
",",O
claiming,O
damages,O
and,O
seeking,O
to,O
enjoin,O
manufacturing,O
and,O
marketing,O
of,O
the,O
affected,O
products,O
.,O
,O
Additionally,O
",",O
it,O
is,O
not,O
possible,O
to,O
predict,O
with,O
certainty,O
what,O
patent,O
claims,O
may,O
issue,O
from,O
pending,O
applications,O
.,O
,O
In,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
for,O
example,O
",",O
patent,O
prosecution,O
can,O
proceed,O
in,O
secret,O
prior,O
to,O
issuance,O
of,O
a,O
patent,O
.,O
,O
As,O
a,O
result,O
",",O
third,O
parties,O
may,O
be,O
able,O
to,O
obtain,O
patents,O
with,O
claims,O
relating,O
to,O
our,O
product,O
candidates,O
which,O
they,O
could,O
attempt,O
to,O
assert,O
against,O
us,O
.,O
,O
Further,O
",",O
as,O
we,O
develop,O
our,O
products,O
",",O
third,O
parties,O
may,O
assert,O
that,O
we,O
infringe,O
the,O
patents,O
currently,O
held,O
or,O
licensed,O
by,O
them,O
and,O
it,O
is,O
difficult,O
to,O
provide,O
the,O
outcome,O
of,O
any,O
such,O
action,O
.,O
,O
There,O
has,O
been,O
significant,O
litigation,O
in,O
the,O
biotechnology,O
industry,O
over,O
patents,O
and,O
other,O
proprietary,O
rights,O
and,O
if,O
we,O
become,O
involved,O
in,O
any,O
litigation,O
",",O
it,O
could,O
consume,O
a,O
substantial,O
portion,O
of,O
our,O
resources,O
",",O
regardless,O
of,O
the,O
outcome,O
of,O
the,O
litigation,O
.,O
,O
If,O
these,O
legal,O
actions,O
are,O
successful,O
",",O
in,O
addition,O
to,O
any,O
potential,O
liability,O
for,O
damages,O
",",O
we,O
could,O
be,O
required,O
to,O
obtain,O
a,O
license,O
",",O
grant,O
cross-licenses,O
and,O
pay,O
substantial,O
royalties,O
in,O
order,O
to,O
continue,O
to,O
manufacture,O
or,O
market,O
the,O
affected,O
products,O
.,O
,O
There,O
is,O
no,O
assurance,O
that,O
we,O
would,O
prevail,O
in,O
any,O
legal,O
action,O
or,O
that,O
any,O
license,O
required,O
under,O
a,O
third,O
party,O
patent,O
would,O
be,O
made,O
available,O
on,O
acceptable,O
terms,O
or,O
at,O
all,O
.,O
,O
Ultimately,O
",",O
we,O
could,O
be,O
prevented,O
from,O
commercializing,O
a,O
product,O
",",O
or,O
forced,O
to,O
cease,O
some,O
aspect,O
of,O
our,O
business,O
operations,O
",",O
as,O
a,O
result,O
of,O
claims,O
of,O
patent,O
infringement,O
or,O
violation,O
of,O
other,O
intellectual,O
property,O
rights,O
",",O
which,O
could,O
have,O
a,O
material,O
and,O
adverse,O
effect,O
on,O
our,O
business,O
",",O
financial,O
condition,O
and,O
results,O
of,O
operations,O
.,O
,O
If,O
any,O
products,O
we,O
develop,O
become,O
subject,O
to,O
unfavorable,O
pricing,O
regulations,O
",",O
third,O
party,O
reimbursement,O
practices,O
or,O
healthcare,O
reform,O
initiatives,O
",",O
our,O
ability,O
to,O
successfully,O
commercialize,O
our,O
products,O
will,O
be,O
impaired,O
.,O
,O
Our,O
future,O
revenues,O
",",O
profitability,O
and,O
access,O
to,O
capital,O
will,O
be,O
affected,O
by,O
the,O
continuing,O
efforts,O
of,O
governmental,O
and,O
private,O
third,O
party,O
payers,O
to,O
contain,O
or,O
reduce,O
the,O
costs,O
of,O
health,O
care,O
through,O
various,O
means,O
.,O
,O
We,O
expect,O
a,O
number,O
of,O
federal,O
",",O
state,O
and,O
foreign,O
proposals,O
to,O
control,O
the,O
cost,O
of,O
drugs,O
through,O
government,O
regulation,O
.,O
,O
We,O
are,O
unsure,O
of,O
the,O
impact,O
recent,O
health,O
care,O
reform,O
legislation,O
may,O
have,O
on,O
our,O
business,O
or,O
what,O
actions,O
federal,O
",",O
state,O
",",O
foreign,O
and,O
private,O
payers,O
may,O
take,O
in,O
response,O
to,O
the,O
recent,O
reforms,O
.,O
,O
Therefore,O
",",O
it,O
is,O
difficult,O
to,O
provide,O
the,O
effect,O
of,O
any,O
implemented,O
reform,O
on,O
our,O
business,O
.,O
,O
Our,O
ability,O
to,O
commercialize,O
our,O
products,O
successfully,O
will,O
depend,O
",",O
in,O
part,O
",",O
on,O
the,O
extent,O
to,O
which,O
reimbursement,O
for,O
the,O
cost,O
of,O
such,O
products,O
and,O
related,O
treatments,O
will,O
be,O
available,O
from,O
government,O
health,O
administration,O
authorities,O
",",O
such,O
as,O
Medicare,I-MISCELLANEOUS
and,O
Medicaid,I-MISCELLANEOUS
in,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
private,O
health,O
insurers,O
and,O
other,O
organizations,O
.,O
,O
Significant,O
uncertainty,O
exists,O
as,O
to,O
the,O
reimbursement,O
status,O
of,O
newly,O
approved,O
health,O
care,O
products,O
",",O
particularly,O
for,O
indications,O
for,O
which,O
there,O
is,O
no,O
current,O
effective,O
treatment,O
or,O
for,O
which,O
medical,O
care,O
typically,O
is,O
not,O
sought,O
.,O
,O
Adequate,O
third,O
party,O
coverage,O
may,O
not,O
be,O
available,O
to,O
enable,O
us,O
to,O
maintain,O
price,O
levels,O
sufficient,O
to,O
realize,O
an,O
appropriate,O
return,O
on,O
our,O
investment,O
in,O
product,O
research,O
and,O
development,O
.,O
,O
If,O
adequate,O
coverage,O
and,O
reimbursement,O
levels,O
are,O
not,O
provided,O
by,O
government,O
and,O
third,O
party,O
payors,O
for,O
use,O
of,O
our,O
products,O
",",O
our,O
products,O
may,O
fail,O
to,O
achieve,O
market,O
acceptance,O
and,O
our,O
results,O
of,O
operations,O
will,O
be,O
harmed,O
.,O
,O
Governments,O
often,O
impose,O
strict,O
price,O
controls,O
",",O
which,O
may,O
adversely,O
affect,O
our,O
future,O
profitability,O
.,O
,O
We,O
intend,O
to,O
seek,O
approval,O
to,O
market,O
our,O
future,O
products,O
in,O
both,O
the,O
United,I-LOCATION
States,I-LOCATION
and,O
foreign,O
jurisdictions,O
.,O
,O
If,O
we,O
obtain,O
approval,O
in,O
one,O
or,O
more,O
foreign,O
jurisdictions,O
",",O
we,O
will,O
be,O
subject,O
to,O
rules,O
and,O
regulations,O
in,O
those,O
jurisdictions,O
relating,O
to,O
our,O
product,O
.,O
,O
In,O
some,O
foreign,O
countries,O
",",O
particularly,O
in,O
the,O
European,I-GOVERNMENT
Union,I-GOVERNMENT
",",O
prescription,O
drug,O
pricing,O
is,O
subject,O
to,O
government,O
control,O
.,O
,O
In,O
these,O
countries,O
",",O
pricing,O
negotiations,O
with,O
governmental,O
authorities,O
can,O
take,O
considerable,O
time,O
after,O
the,O
receipt,O
of,O
marketing,O
approval,O
for,O
a,O
drug,O
candidate,O
.,O
,O
To,O
obtain,O
reimbursement,O
or,O
pricing,O
approval,O
in,O
some,O
countries,O
",",O
we,O
may,O
be,O
required,O
to,O
conduct,O
a,O
clinical,O
trial,O
that,O
compares,O
the,O
cost-effectiveness,O
of,O
our,O
future,O
product,O
to,O
other,O
available,O
therapies,O
.,O
,O
In,O
addition,O
",",O
it,O
is,O
unclear,O
what,O
impact,O
",",O
if,O
any,O
",",O
recent,O
health,O
care,O
reform,O
legislation,O
will,O
have,O
on,O
the,O
price,O
of,O
drugs,O
;,O
however,O
",",O
prices,O
may,O
become,O
subject,O
to,O
controls,O
similar,O
to,O
those,O
in,O
other,O
countries,O
.,O
,O
If,O
reimbursement,O
of,O
our,O
future,O
products,O
is,O
unavailable,O
or,O
limited,O
in,O
scope,O
or,O
amount,O
",",O
or,O
if,O
pricing,O
is,O
set,O
at,O
unsatisfactory,O
levels,O
",",O
we,O
may,O
be,O
unable,O
to,O
achieve,O
or,O
sustain,O
profitability,O
.,O
,O
We,O
face,O
potential,O
product,O
liability,O
exposure,O
",",O
and,O
if,O
successful,O
claims,O
are,O
brought,O
against,O
us,O
",",O
we,O
may,O
incur,O
substantial,O
liability,O
for,O
a,O
product,O
candidate,O
and,O
may,O
have,O
to,O
limit,O
its,O
commercialization,O
.,O
,O
The,O
use,O
of,O
our,O
product,O
candidates,O
in,O
clinical,O
trials,O
and,O
the,O
sale,O
of,O
any,O
products,O
for,O
which,O
we,O
obtain,O
marketing,O
approval,O
expose,O
us,O
to,O
the,O
risk,O
of,O
product,O
liability,O
claims,O
.,O
,O
Product,O
liability,O
claims,O
might,O
be,O
brought,O
against,O
us,O
by,O
consumers,O
",",O
health,O
care,O
providers,O
",",O
pharmaceutical,O
companies,O
or,O
others,O
selling,O
our,O
products,O
.,O
,O
If,O
we,O
can,O
not,O
successfully,O
defend,O
ourselves,O
against,O
these,O
claims,O
",",O
we,O
will,O
incur,O
substantial,O
liabilities,O
.,O
,O
Regardless,O
of,O
merit,O
or,O
eventual,O
outcome,O
",",O
liability,O
claims,O
may,O
result,O
in,O
:,O
,O
Although,O
we,O
currently,O
have,O
product,O
liability,O
insurance,O
coverage,O
for,O
our,O
clinical,O
trials,O
for,O
expenses,O
or,O
losses,O
up,O
to,O
a,O
$,O
10,O
million,O
aggregate,O
annual,O
limit,O
",",O
our,O
insurance,O
coverage,O
may,O
not,O
reimburse,O
us,O
or,O
may,O
not,O
be,O
sufficient,O
to,O
reimburse,O
us,O
for,O
any,O
or,O
all,O
expenses,O
or,O
losses,O
we,O
may,O
suffer,O
.,O
,O
Moreover,O
",",O
insurance,O
coverage,O
is,O
becoming,O
increasingly,O
expensive,O
and,O
",",O
in,O
the,O
future,O
",",O
we,O
may,O
not,O
be,O
able,O
to,O
maintain,O
insurance,O
coverage,O
at,O
a,O
reasonable,O
cost,O
or,O
in,O
sufficient,O
amounts,O
to,O
protect,O
us,O
against,O
losses,O
due,O
to,O
liability,O
.,O
,O
We,O
intend,O
to,O
expand,O
our,O
insurance,O
coverage,O
to,O
include,O
the,O
sale,O
of,O
commercial,O
products,O
if,O
we,O
obtain,O
marketing,O
approval,O
for,O
our,O
product,O
candidates,O
in,O
development,O
",",O
but,O
we,O
may,O
be,O
unable,O
to,O
obtain,O
commercially,O
reasonable,O
product,O
liability,O
insurance,O
for,O
any,O
products,O
approved,O
for,O
marketing,O
.,O
,O
On,O
occasion,O
",",O
large,O
judgments,O
have,O
been,O
awarded,O
in,O
class,O
action,O
lawsuits,O
based,O
on,O
products,O
that,O
had,O
unanticipated,O
side,O
effects,O
.,O
,O
A,O
successful,O
product,O
liability,O
claim,O
or,O
series,O
of,O
claims,O
brought,O
against,O
us,O
could,O
cause,O
our,O
stock,O
price,O
to,O
fall,O
and,O
",",O
if,O
judgments,O
exceed,O
our,O
insurance,O
coverage,O
",",O
could,O
decrease,O
our,O
cash,O
and,O
adversely,O
affect,O
our,O
business,O
.,O
,O
We,O
face,O
substantial,O
competition,O
",",O
which,O
may,O
result,O
in,O
others,O
discovering,O
",",O
developing,O
or,O
commercializing,O
products,O
before,O
",",O
or,O
more,O
successfully,O
",",O
than,O
we,O
do,O
.,O
,O
Our,O
future,O
success,O
depends,O
on,O
our,O
ability,O
to,O
demonstrate,O
and,O
maintain,O
a,O
competitive,O
advantage,O
with,O
respect,O
to,O
the,O
design,O
",",O
development,O
and,O
commercialization,O
of,O
our,O
product,O
candidates,O
.,O
,O
We,O
expect,O
any,O
product,O
candidate,O
that,O
we,O
commercialize,O
with,O
our,O
collaborative,O
partners,O
or,O
on,O
our,O
own,O
will,O
compete,O
with,O
existing,O
",",O
market-leading,O
products,O
and,O
products,O
in,O
development,O
.,O
,O
There,O
are,O
currently,O
two,O
products,O
approved,O
as,O
maintenance,O
therapy,O
following,O
treatment,O
of,O
inoperable,O
locoregional,O
Stage,O
III,O
NSCLC,I-MISCELLANEOUS
with,O
induction,O
chemotherapy,O
",",O
Tarceva,I-MISCELLANEOUS
(,O
erlotinib,I-MISCELLANEOUS
),O
",",O
a,O
targeted,O
small,O
molecule,O
from,O
Genentech,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
member,O
of,O
the,O
Roche,I-BUSINESS
Group,I-BUSINESS
",",O
and,O
Alimta,I-MISCELLANEOUS
(,O
pemetrexed,I-MISCELLANEOUS
),O
",",O
a,O
chemotherapeutic,O
from,O
Eli,I-BUSINESS
Lilly,I-BUSINESS
and,I-BUSINESS
Company,I-BUSINESS
.,O
,O
Stimuvax,I-MISCELLANEOUS
has,O
not,O
been,O
tested,O
in,O
combination,O
with,O
or,O
in,O
comparison,O
to,O
these,O
products,O
.,O
,O
It,O
is,O
possible,O
that,O
other,O
existing,O
or,O
new,O
agents,O
will,O
be,O
approved,O
for,O
this,O
indication,O
.,O
,O
In,O
addition,O
",",O
there,O
are,O
at,O
least,O
three,O
vaccines,O
in,O
development,O
for,O
the,O
treatment,O
of,O
NSCLC,I-MISCELLANEOUS
",",O
including,O
GSK,I-BUSINESS
s,O
MAGE,I-MISCELLANEOUS
A3,I-MISCELLANEOUS
vaccine,O
in,O
Phase,O
3,O
",",O
NovaRx,I-BUSINESS
Corporation,I-BUSINESS
s,O
Lucanix,I-MISCELLANEOUS
in,O
Phase,O
3,O
and,O
Transgene,I-BUSINESS
s,O
TG-4010,I-MISCELLANEOUS
in,O
Phase,O
2,O
.,O
,O
TG-4010,I-MISCELLANEOUS
also,O
targets,O
MUC1,I-MISCELLANEOUS
",",O
although,O
using,O
technology,O
different,O
from,O
Stimuvax,I-MISCELLANEOUS
.,O
,O
To,O
our,O
knowledge,O
",",O
these,O
vaccines,O
are,O
not,O
currently,O
being,O
developed,O
in,O
the,O
same,O
indications,O
as,O
Stimuvax,I-MISCELLANEOUS
.,O
,O
However,O
",",O
subsequent,O
development,O
of,O
these,O
vaccines,O
",",O
including,O
Stimuvax,I-MISCELLANEOUS
",",O
may,O
result,O
in,O
direct,O
competition,O
.,O
,O
Small,O
Molecule,O
Products,O
.,O
,O
PX-866,I-MISCELLANEOUS
is,O
an,O
inhibitor,O
of,O
phosphoinositide,I-MISCELLANEOUS
3-kinase,I-MISCELLANEOUS
(,O
PI3K,I-MISCELLANEOUS
),O
.,O
,O
We,O
are,O
aware,O
of,O
several,O
companies,O
that,O
have,O
entered,O
clinical,O
trials,O
with,O
competing,O
compounds,O
targeting,O
the,O
same,O
protein,O
.,O
,O
Among,O
those,O
are,O
compounds,O
being,O
developed,O
by,O
Novartis,I-BUSINESS
(,O
Phase,O
1/2,O
),O
",",O
Roche/Genentech,I-BUSINESS
(,O
Phase,O
1,O
),O
",",O
Bayer,I-BUSINESS
(,O
Phase,O
1,O
),O
",",O
Semafore,I-BUSINESS
(,O
Phase,O
1,O
),O
",",O
Sanofi-Aventis,I-BUSINESS
(,O
Phase,O
2,O
),O
",",O
Pfizer,I-BUSINESS
(,O
Phase,O
1,O
),O
and,O
Calistoga,I-BUSINESS
(,O
Phase,O
2,O
),O
.,O
,O
There,O
are,O
also,O
several,O
approved,O
targeted,O
therapies,O
for,O
cancer,O
and,O
in,O
development,O
against,O
which,O
PX-866,I-MISCELLANEOUS
might,O
compete,O
.,O
,O
Many,O
of,O
our,O
potential,O
competitors,O
have,O
substantially,O
greater,O
financial,O
",",O
technical,O
and,O
personnel,O
resources,O
than,O
we,O
have,O
.,O
,O
In,O
addition,O
",",O
many,O
of,O
these,O
competitors,O
have,O
significantly,O
greater,O
commercial,O
infrastructures,O
than,O
we,O
have,O
.,O
,O
Our,O
ability,O
to,O
compete,O
successfully,O
will,O
depend,O
largely,O
on,O
our,O
ability,O
to,O
:,O
,O
Established,O
competitors,O
may,O
invest,O
heavily,O
to,O
quickly,O
discover,O
and,O
develop,O
novel,O
compounds,O
that,O
could,O
make,O
our,O
product,O
candidates,O
obsolete,O
.,O
,O
In,O
addition,O
",",O
any,O
new,O
product,O
that,O
competes,O
with,O
a,O
generic,O
market-leading,O
product,O
must,O
demonstrate,O
compelling,O
advantages,O
in,O
efficacy,O
",",O
convenience,O
",",O
tolerability,O
and,O
safety,O
in,O
order,O
to,O
overcome,O
severe,O
price,O
competition,O
and,O
to,O
be,O
commercially,O
successful,O
.,O
,O
If,O
we,O
are,O
not,O
able,O
to,O
compete,O
effectively,O
against,O
our,O
current,O
and,O
future,O
competitors,O
",",O
our,O
business,O
will,O
not,O
grow,O
and,O
our,O
financial,O
condition,O
and,O
operations,O
will,O
suffer,O
.,O
,O
If,O
we,O
are,O
unable,O
to,O
enter,O
into,O
agreements,O
with,O
partners,O
to,O
perform,O
sales,O
and,O
marketing,O
functions,O
",",O
or,O
build,O
these,O
functions,O
ourselves,O
",",O
we,O
will,O
not,O
be,O
able,O
to,O
commercialize,O
our,O
product,O
candidates,O
.,O
,O
We,O
currently,O
do,O
not,O
have,O
any,O
internal,O
sales,O
",",O
marketing,O
or,O
distribution,O
capabilities,O
.,O
,O
In,O
order,O
to,O
commercialize,O
any,O
of,O
our,O
product,O
candidates,O
",",O
we,O
must,O
either,O
acquire,O
or,O
internally,O
develop,O
a,O
sales,O
",",O
marketing,O
and,O
distribution,O
infrastructure,O
or,O
enter,O
into,O
agreements,O
with,O
partners,O
to,O
perform,O
these,O
services,O
for,O
us,O
.,O
,O
Under,O
our,O
agreements,O
with,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
",",O
Merck,I-BUSINESS
KGaA,I-BUSINESS
is,O
responsible,O
for,O
developing,O
and,O
commercializing,O
Stimuvax,I-MISCELLANEOUS
",",O
and,O
any,O
problems,O
with,O
that,O
relationship,O
could,O
delay,O
the,O
development,O
and,O
commercialization,O
of,O
Stimuvax,I-MISCELLANEOUS
.,O
,O
Additionally,O
",",O
we,O
may,O
not,O
be,O
able,O
to,O
enter,O
into,O
arrangements,O
with,O
respect,O
to,O
our,O
product,O
candidates,O
not,O
covered,O
by,O
the,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
agreements,O
on,O
commercially,O
acceptable,O
terms,O
",",O
if,O
at,O
all,O
.,O
,O
Factors,O
that,O
may,O
inhibit,O
our,O
efforts,O
to,O
commercialize,O
our,O
product,O
candidates,O
without,O
entering,O
into,O
arrangements,O
with,O
third,O
parties,O
include,O
:,O
,O
If,O
we,O
are,O
not,O
able,O
to,O
partner,O
with,O
a,O
third,O
party,O
and,O
are,O
not,O
successful,O
in,O
recruiting,O
sales,O
and,O
marketing,O
personnel,O
or,O
in,O
building,O
a,O
sales,O
and,O
marketing,O
and,O
distribution,O
infrastructure,O
",",O
we,O
will,O
have,O
difficulty,O
commercializing,O
our,O
product,O
candidates,O
",",O
which,O
would,O
adversely,O
affect,O
our,O
business,O
and,O
financial,O
condition,O
.,O
,O
If,O
we,O
lose,O
key,O
personnel,O
",",O
or,O
we,O
are,O
unable,O
to,O
attract,O
and,O
retain,O
highly-qualified,O
personnel,O
on,O
a,O
cost-effective,O
basis,O
",",O
it,O
would,O
be,O
more,O
difficult,O
for,O
us,O
to,O
manage,O
our,O
existing,O
business,O
operations,O
and,O
to,O
identify,O
and,O
pursue,O
new,O
growth,O
opportunities,O
.,O
,O
Our,O
success,O
depends,O
in,O
large,O
part,O
upon,O
our,O
ability,O
to,O
attract,O
and,O
retain,O
highly,O
qualified,O
scientific,O
",",O
clinical,O
",",O
manufacturing,O
",",O
and,O
management,O
personnel,O
.,O
,O
In,O
addition,O
",",O
any,O
difficulties,O
retaining,O
key,O
personnel,O
or,O
managing,O
this,O
growth,O
could,O
disrupt,O
our,O
operations,O
.,O
,O
Future,O
growth,O
will,O
require,O
us,O
to,O
continue,O
to,O
implement,O
and,O
improve,O
our,O
managerial,O
",",O
operational,O
and,O
financial,O
systems,O
",",O
and,O
continue,O
to,O
retain,O
",",O
recruit,O
and,O
train,O
additional,O
qualified,O
personnel,O
",",O
which,O
may,O
impose,O
a,O
strain,O
on,O
our,O
administrative,O
and,O
operational,O
infrastructure,O
.,O
,O
The,O
competition,O
for,O
qualified,O
personnel,O
in,O
the,O
biopharmaceutical,O
field,O
is,O
intense,O
.,O
,O
We,O
are,O
highly,O
dependent,O
on,O
our,O
continued,O
ability,O
to,O
attract,O
",",O
retain,O
and,O
motivate,O
highly-qualified,O
management,O
",",O
clinical,O
and,O
scientific,O
personnel,O
.,O
,O
Due,O
to,O
our,O
limited,O
resources,O
",",O
we,O
may,O
not,O
be,O
able,O
to,O
effectively,O
recruit,O
",",O
train,O
and,O
retain,O
additional,O
qualified,O
personnel,O
.,O
,O
If,O
we,O
are,O
unable,O
to,O
retain,O
key,O
personnel,O
or,O
manage,O
our,O
growth,O
effectively,O
",",O
we,O
may,O
not,O
be,O
able,O
to,O
implement,O
our,O
business,O
plan,O
.,O
,O
Furthermore,O
",",O
we,O
have,O
not,O
entered,O
into,O
non-competition,O
agreements,O
with,O
all,O
of,O
our,O
key,O
employees,O
.,O
,O
In,O
addition,O
",",O
we,O
do,O
not,O
maintain,O
key,O
person,O
life,O
insurance,O
on,O
any,O
of,O
our,O
officers,O
",",O
employees,O
or,O
consultants,O
.,O
,O
The,O
loss,O
of,O
the,O
services,O
of,O
existing,O
personnel,O
",",O
the,O
failure,O
to,O
recruit,O
additional,O
key,O
scientific,O
",",O
technical,O
and,O
managerial,O
personnel,O
in,O
a,O
timely,O
manner,O
",",O
and,O
the,O
loss,O
of,O
our,O
employees,O
to,O
our,O
competitors,O
would,O
harm,O
our,O
research,O
and,O
development,O
programs,O
and,O
our,O
business,O
.,O
,O
Our,O
business,O
is,O
subject,O
to,O
increasingly,O
complex,O
environmental,O
legislation,O
that,O
has,O
increased,O
both,O
our,O
costs,O
and,O
the,O
risk,O
of,O
noncompliance,O
.,O
,O
Our,O
business,O
may,O
involve,O
the,O
use,O
of,O
hazardous,O
material,O
",",O
which,O
will,O
require,O
us,O
to,O
comply,O
with,O
environmental,O
regulations,O
.,O
,O
We,O
face,O
increasing,O
complexity,O
in,O
our,O
product,O
development,O
as,O
we,O
adjust,O
to,O
new,O
and,O
upcoming,O
requirements,O
relating,O
to,O
the,O
materials,O
composition,O
of,O
many,O
of,O
our,O
product,O
candidates,O
.,O
,O
If,O
we,O
use,O
biological,O
and,O
hazardous,O
materials,O
in,O
a,O
manner,O
that,O
causes,O
contamination,O
or,O
injury,O
or,O
violates,O
laws,O
",",O
we,O
may,O
be,O
liable,O
for,O
damages,O
.,O
,O
Environmental,O
regulations,O
could,O
have,O
a,O
material,O
adverse,O
effect,O
on,O
the,O
results,O
of,O
our,O
operations,O
and,O
our,O
financial,O
position,O
.,O
,O
We,O
maintain,O
insurance,O
under,O
our,O
general,O
liability,O
policy,O
for,O
any,O
liability,O
associated,O
with,O
our,O
hazardous,O
materials,O
activities,O
",",O
and,O
it,O
is,O
possible,O
in,O
the,O
future,O
that,O
our,O
coverage,O
would,O
be,O
insufficient,O
if,O
we,O
incurred,O
a,O
material,O
environmental,O
liability,O
.,O
,O
If,O
we,O
fail,O
to,O
establish,O
and,O
maintain,O
proper,O
and,O
effective,O
internal,O
controls,O
",",O
our,O
ability,O
to,O
produce,O
accurate,O
financial,O
statements,O
on,O
a,O
timely,O
basis,O
could,O
be,O
impaired,O
",",O
which,O
would,O
adversely,O
affect,O
our,O
consolidated,O
operating,O
results,O
",",O
our,O
ability,O
to,O
operate,O
our,O
business,O
",",O
and,O
our,O
stock,O
price,O
.,O
,O
Ensuring,O
that,O
we,O
have,O
adequate,O
internal,O
financial,O
and,O
accounting,O
controls,O
and,O
procedures,O
in,O
place,O
to,O
produce,O
accurate,O
financial,O
statements,O
on,O
a,O
timely,O
basis,O
is,O
a,O
costly,O
and,O
time-consuming,O
effort,O
that,O
needs,O
to,O
be,O
re-evaluated,O
frequently,O
.,O
,O
Failure,O
on,O
our,O
part,O
to,O
have,O
effective,O
internal,O
financial,O
and,O
accounting,O
controls,O
would,O
cause,O
our,O
financial,O
reporting,O
to,O
be,O
unreliable,O
",",O
could,O
have,O
a,O
material,O
adverse,O
effect,O
on,O
our,O
business,O
",",O
operating,O
results,O
",",O
and,O
financial,O
condition,O
",",O
and,O
could,O
cause,O
the,O
trading,O
price,O
of,O
our,O
common,O
stock,O
to,O
fall,O
dramatically,O
.,O
,O
For,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
",",O
we,O
and,O
our,O
independent,O
registered,O
public,O
accounting,O
firm,O
identified,O
certain,O
material,O
weaknesses,O
in,O
our,O
internal,O
controls,O
that,O
are,O
described,O
in,O
Item,O
9A,O
—,O
Controls,O
and,O
Procedures,O
—,O
Management,O
s,O
Report,O
on,O
Internal,O
Control,O
over,O
Financial,O
Reporting,O
",",O
of,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
.,O
,O
Remediation,O
of,O
the,O
material,O
weaknesses,O
was,O
fully,O
completed,O
on,O
December,O
31,O
",",O
2010,O
;,O
however,O
",",O
we,O
can,O
provide,O
no,O
assurances,O
that,O
these,O
or,O
other,O
material,O
weaknesses,O
in,O
our,O
internal,O
control,O
over,O
financial,O
reporting,O
will,O
not,O
be,O
identified,O
in,O
the,O
future,O
.,O
,O
Our,O
management,O
is,O
responsible,O
for,O
establishing,O
and,O
maintaining,O
adequate,O
internal,O
control,O
over,O
financial,O
reporting,O
to,O
provide,O
reasonable,O
assurance,O
regarding,O
the,O
reliability,O
of,O
our,O
financial,O
reporting,O
and,O
the,O
preparation,O
of,O
financial,O
statements,O
for,O
external,O
purposes,O
in,O
accordance,O
with,O
U.S.,I-LOCATION
.,O
,O
Our,O
management,O
does,O
not,O
expect,O
that,O
our,O
internal,O
control,O
over,O
financial,O
reporting,O
will,O
prevent,O
or,O
detect,O
all,O
errors,O
and,O
all,O
fraud,O
.,O
,O
A,O
control,O
system,O
",",O
no,O
matter,O
how,O
well,O
designed,O
and,O
operated,O
",",O
can,O
provide,O
only,O
reasonable,O
",",O
not,O
absolute,O
",",O
assurance,O
that,O
the,O
control,O
system,O
s,O
objectives,O
will,O
be,O
met,O
.,O
,O
Because,O
of,O
the,O
inherent,O
limitations,O
in,O
all,O
control,O
systems,O
",",O
no,O
evaluation,O
of,O
controls,O
can,O
provide,O
absolute,O
assurance,O
that,O
misstatements,O
due,O
to,O
error,O
or,O
fraud,O
will,O
not,O
occur,O
or,O
that,O
all,O
control,O
issues,O
and,O
instances,O
of,O
fraud,O
",",O
if,O
any,O
",",O
within,O
the,O
company,O
will,O
have,O
been,O
detected,O
.,O
,O
In,O
June,O
2010,O
we,O
retained,O
outside,O
consultants,O
to,O
assist,O
us,O
with,O
designing,O
and,O
implementing,O
an,O
adequate,O
risk,O
assessment,O
process,O
to,O
identify,O
future,O
complex,O
transactions,O
requiring,O
specialized,O
knowledge,O
to,O
ensure,O
the,O
appropriate,O
accounting,O
for,O
and,O
disclosure,O
of,O
such,O
transactions,O
.,O
,O
In,O
September,O
2010,O
and,O
January,O
2011,O
",",O
we,O
retained,O
personnel,O
with,O
the,O
appropriate,O
technical,O
expertise,O
to,O
assist,O
us,O
in,O
accounting,O
for,O
complex,O
transactions,O
in,O
accordance,O
with,O
U.S.,I-LOCATION
.,O
,O
In,O
future,O
periods,O
",",O
if,O
the,O
process,O
required,O
by,O
Section,O
404,O
of,O
the,O
Sarbanes-Oxley,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
reveals,O
any,O
other,O
material,O
weaknesses,O
or,O
significant,O
deficiencies,O
",",O
the,O
correction,O
of,O
any,O
such,O
material,O
weaknesses,O
or,O
significant,O
deficiencies,O
could,O
require,O
additional,O
remedial,O
measures,O
which,O
could,O
be,O
costly,O
and,O
time-consuming,O
.,O
,O
In,O
addition,O
",",O
we,O
may,O
be,O
unable,O
to,O
produce,O
accurate,O
financial,O
statements,O
on,O
a,O
timely,O
basis,O
.,O
,O
Any,O
of,O
the,O
foregoing,O
could,O
cause,O
investors,O
to,O
lose,O
confidence,O
in,O
the,O
reliability,O
of,O
our,O
consolidated,O
financial,O
statements,O
",",O
which,O
could,O
cause,O
the,O
market,O
price,O
of,O
our,O
common,O
stock,O
to,O
decline,O
and,O
make,O
it,O
more,O
difficult,O
for,O
us,O
to,O
finance,O
our,O
operations,O
and,O
growth,O
.,O
,O
If,O
we,O
are,O
required,O
to,O
redeem,O
the,O
shares,O
of,O
our,O
Class,O
UA,O
preferred,O
stock,O
",",O
our,O
financial,O
condition,O
may,O
be,O
adversely,O
affected,O
.,O
,O
Our,O
certificate,O
of,O
incorporation,O
provides,O
for,O
the,O
mandatory,O
redemption,O
of,O
shares,O
of,O
our,O
Class,O
UA,O
preferred,O
stock,O
if,O
we,O
realize,O
net,O
profits,O
in,O
any,O
year,O
.,O
,O
See,O
Note,O
8,O
—,O
Share,O
Capital,O
—,O
Authorized,O
Shares,O
—,O
Class,O
UA,O
preferred,O
stock,O
of,O
the,O
audited,O
financial,O
statements,O
included,O
in,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
For,O
this,O
purpose,O
",",O
net,O
profits,O
.,O
,O
means,O
the,O
after,O
tax,O
profits,O
determined,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
",",O
where,O
relevant,O
",",O
consistently,O
applied,O
.,O
,O
The,O
certificate,O
of,O
incorporation,O
does,O
not,O
specify,O
the,O
jurisdiction,O
whose,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
would,O
apply,O
for,O
the,O
redemption,O
provision,O
.,O
,O
At,O
the,O
time,O
of,O
the,O
original,O
issuance,O
of,O
the,O
shares,O
",",O
we,O
were,O
a,O
corporation,O
organized,O
under,O
the,O
federal,O
laws,O
of,O
Canada,I-LOCATION
",",O
and,O
our,O
principal,O
operations,O
were,O
located,O
in,O
Canada,I-LOCATION
.,O
,O
In,O
addition,O
",",O
the,O
original,O
purchaser,O
and,O
current,O
holder,O
of,O
the,O
Class,O
UA,O
preferred,O
stock,O
is,O
a,O
Canadian,O
entity,O
.,O
,O
In,O
connection,O
with,O
our,O
reincorporation,O
in,O
Delaware,I-LOCATION
",",O
we,O
disclosed,O
that,O
the,O
rights,O
",",O
preferences,O
and,O
privileges,O
of,O
the,O
shares,O
would,O
remain,O
unchanged,O
except,O
as,O
required,O
by,O
Delaware,I-LOCATION
law,O
",",O
and,O
the,O
mandatory,O
redemption,O
provisions,O
were,O
not,O
changed,O
.,O
,O
In,O
addition,O
",",O
the,O
formula,O
for,O
determining,O
the,O
price,O
at,O
which,O
such,O
shares,O
would,O
be,O
redeemed,O
is,O
expressed,O
in,O
Canadian,I-MISCELLANEOUS
dollars,O
.,O
,O
Although,O
",",O
if,O
challenged,O
",",O
we,O
believe,O
that,O
a,O
Delaware,I-LOCATION
court,O
would,O
determine,O
that,O
net,O
profits,O
be,O
interpreted,O
in,O
accordance,O
with,O
Canadian,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
",",O
we,O
can,O
not,O
provide,O
assurances,O
that,O
a,O
Delaware,I-LOCATION
court,O
would,O
agree,O
with,O
such,O
interpretation,O
.,O
,O
As,O
a,O
result,O
of,O
the,O
December,O
2008,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
transaction,O
",",O
we,O
recognized,O
on,O
a,O
one-time,O
basis,O
all,O
deferred,O
revenue,O
relating,O
to,O
Stimuvax,I-MISCELLANEOUS
",",O
under,O
both,O
U.S.,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
and,O
Canadian,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
.,O
,O
GAAP,I-LEGISLATION/ACT
this,O
resulted,O
in,O
net,O
income,O
.,O
,O
However,O
",",O
under,O
Canadian,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
we,O
were,O
required,O
to,O
recognize,O
an,O
impairment,O
on,O
intangible,O
assets,O
which,O
resulted,O
in,O
a,O
net,O
loss,O
for,O
2008,O
and,O
therefore,O
did,O
not,O
redeem,O
any,O
shares,O
of,O
Class,O
UA,O
preferred,O
stock,O
in,O
2009,O
.,O
,O
If,O
in,O
the,O
future,O
we,O
recognize,O
net,O
income,O
under,O
Canadian,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
",",O
or,O
any,O
successor,O
to,O
such,O
principles,O
",",O
or,O
if,O
the,O
holder,O
of,O
Class,O
UA,O
preferred,O
stock,O
were,O
to,O
challenge,O
",",O
and,O
prevail,O
in,O
a,O
dispute,O
involving,O
",",O
the,O
interpretation,O
of,O
the,O
mandatory,O
redemption,O
provision,O
",",O
we,O
may,O
be,O
required,O
to,O
redeem,O
such,O
shares,O
which,O
would,O
have,O
an,O
adverse,O
effect,O
on,O
our,O
cash,O
position,O
.,O
,O
The,O
maximum,O
aggregate,O
amount,O
that,O
we,O
would,O
be,O
required,O
to,O
pay,O
to,O
redeem,O
such,O
shares,O
is,O
CAN,I-MISCELLANEOUS
$,O
1.25,O
million,O
.,O
,O
The,O
holder,O
of,O
the,O
Class,O
UA,O
preferred,O
stock,O
has,O
declined,O
to,O
sign,O
an,O
acknowledgement,O
that,O
Canadian,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
applies,O
to,O
the,O
redemption,O
provision,O
and,O
has,O
indicated,O
that,O
it,O
believes,O
U.S.,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
should,O
apply,O
.,O
,O
As,O
of,O
the,O
date,O
of,O
this,O
prospectus,O
",",O
the,O
holder,O
has,O
not,O
initiated,O
a,O
proceeding,O
to,O
challenge,O
this,O
interpretation,O
;,O
however,O
",",O
it,O
may,O
do,O
so,O
.,O
,O
If,O
they,O
do,O
dispute,O
this,O
interpretation,O
",",O
although,O
we,O
believe,O
a,O
Delaware,I-LOCATION
court,O
would,O
agree,O
with,O
the,O
interpretation,O
described,O
above,O
",",O
we,O
can,O
provide,O
no,O
assurances,O
that,O
we,O
would,O
prevail,O
in,O
such,O
a,O
dispute,O
.,O
,O
Further,O
",",O
any,O
dispute,O
regarding,O
this,O
matter,O
",",O
even,O
if,O
we,O
were,O
ultimately,O
successful,O
",",O
could,O
require,O
significant,O
resources,O
which,O
may,O
adversely,O
affect,O
our,O
results,O
of,O
operations,O
.,O
,O
We,O
may,O
expand,O
our,O
business,O
through,O
the,O
acquisition,O
of,O
companies,O
or,O
businesses,O
or,O
in-licensing,O
product,O
candidates,O
that,O
could,O
disrupt,O
our,O
business,O
and,O
harm,O
our,O
financial,O
condition,O
.,O
,O
We,O
may,O
in,O
the,O
future,O
seek,O
to,O
expand,O
our,O
products,O
and,O
capabilities,O
by,O
acquiring,O
one,O
or,O
more,O
companies,O
or,O
businesses,O
or,O
in-licensing,O
one,O
or,O
more,O
product,O
candidates,O
.,O
,O
Acquisitions,O
and,O
in-licenses,O
involve,O
numerous,O
risks,O
",",O
including,O
:,O
,O
In,O
our,O
recent,O
history,O
",",O
we,O
have,O
not,O
expanded,O
our,O
business,O
through,O
in-licensing,O
and,O
we,O
have,O
completed,O
only,O
one,O
acquisition,O
;,O
therefore,O
",",O
our,O
experience,O
in,O
making,O
acquisitions,O
and,O
in-licensing,O
is,O
limited,O
.,O
,O
We,O
can,O
not,O
assure,O
you,O
that,O
any,O
acquisition,O
or,O
in-license,O
will,O
result,O
in,O
short-term,O
or,O
long-term,O
benefits,O
to,O
us,O
.,O
,O
We,O
may,O
incorrectly,O
judge,O
the,O
value,O
or,O
worth,O
of,O
an,O
acquired,O
company,O
or,O
business,O
or,O
in-licensed,O
product,O
candidate,O
.,O
,O
In,O
addition,O
",",O
our,O
future,O
success,O
would,O
depend,O
in,O
part,O
on,O
our,O
ability,O
to,O
manage,O
the,O
rapid,O
growth,O
associated,O
with,O
some,O
of,O
these,O
acquisitions,O
and,O
in-licenses,O
.,O
,O
We,O
can,O
not,O
assure,O
you,O
that,O
we,O
would,O
be,O
able,O
to,O
make,O
the,O
combination,O
of,O
our,O
business,O
with,O
that,O
of,O
acquired,O
businesses,O
or,O
companies,O
or,O
in-licensed,O
product,O
candidates,O
work,O
or,O
be,O
successful,O
.,O
,O
Furthermore,O
",",O
the,O
development,O
or,O
expansion,O
of,O
our,O
business,O
or,O
any,O
acquired,O
business,O
or,O
company,O
or,O
in-licensed,O
product,O
candidate,O
may,O
require,O
a,O
substantial,O
capital,O
investment,O
by,O
us,O
.,O
,O
We,O
may,O
not,O
have,O
these,O
necessary,O
funds,O
or,O
they,O
might,O
not,O
be,O
available,O
to,O
us,O
on,O
acceptable,O
terms,O
or,O
at,O
all,O
.,O
,O
We,O
may,O
also,O
seek,O
to,O
raise,O
funds,O
by,O
selling,O
shares,O
of,O
our,O
capital,O
stock,O
",",O
which,O
could,O
dilute,O
our,O
current,O
stockholders,O
ownership,O
interest,O
",",O
or,O
securities,O
convertible,O
into,O
our,O
capital,O
stock,O
",",O
which,O
could,O
dilute,O
current,O
stockholders,O
ownership,O
interest,O
upon,O
conversion,O
.,O
,O
Our,O
common,O
stock,O
may,O
become,O
ineligible,O
for,O
listing,O
on,O
The,I-MISCELLANEOUS
NASDAQ,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
",",O
which,O
would,O
materially,O
adversely,O
affect,O
the,O
liquidity,O
and,O
price,O
of,O
our,O
common,O
stock,O
.,O
,O
Our,O
common,O
stock,O
is,O
currently,O
listed,O
for,O
trading,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
on,O
The,I-MISCELLANEOUS
NASDAQ,I-MISCELLANEOUS
Global,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
.,O
,O
As,O
a,O
result,O
of,O
our,O
failure,O
to,O
timely,O
file,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
",",O
we,O
received,O
a,O
letter,O
from,O
The,I-MISCELLANEOUS
NASDAQ,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
informing,O
us,O
that,O
we,O
did,O
not,O
comply,O
with,O
continued,O
listing,O
requirements,O
.,O
,O
Although,O
the,O
filing,O
of,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
allowed,O
us,O
to,O
regain,O
full,O
compliance,O
with,O
SEC,I-GOVERNMENT
reporting,O
requirements,O
and,O
The,I-MISCELLANEOUS
NASDAQ,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
continued,O
listing,O
requirements,O
",",O
we,O
have,O
in,O
the,O
past,O
and,O
could,O
in,O
the,O
future,O
be,O
unable,O
to,O
meet,O
The,I-MISCELLANEOUS
NASDAQ,I-MISCELLANEOUS
Global,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
continued,O
listing,O
requirements,O
.,O
,O
For,O
example,O
",",O
on,O
August,O
20,O
",",O
2008,O
we,O
disclosed,O
that,O
we,O
had,O
received,O
a,O
letter,O
from,O
The,I-MISCELLANEOUS
NASDAQ,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
indicating,O
that,O
we,O
did,O
not,O
comply,O
with,O
the,O
requirements,O
for,O
continued,O
listing,O
on,O
The,I-MISCELLANEOUS
NASDAQ,I-MISCELLANEOUS
Global,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
because,O
we,O
did,O
not,O
meet,O
the,O
maintenance,O
standard,O
in,O
Marketplace,I-LEGISLATION/ACT
Rule,I-LEGISLATION/ACT
4450,O
(,O
b,O
),O
(,O
1,O
),O
(,O
A,O
),O
(,O
recodified,O
as,O
Marketplace,I-LEGISLATION/ACT
Rule,I-LEGISLATION/ACT
5450,O
(,O
b,O
),O
),O
that,O
specifies,O
",",O
among,O
other,O
things,O
",",O
that,O
the,O
market,O
value,O
of,O
our,O
common,O
stock,O
be,O
at,O
least,O
$,O
50,O
million,O
or,O
that,O
our,O
stockholders,O
equity,O
was,O
at,O
least,O
$,O
10,O
million,O
.,O
,O
Although,O
we,O
regained,O
compliance,O
with,O
the,O
stockholders,O
equity,O
standard,O
",",O
we,O
have,O
a,O
history,O
of,O
losses,O
and,O
would,O
expect,O
that,O
",",O
absent,O
the,O
completion,O
of,O
a,O
financing,O
or,O
other,O
event,O
that,O
would,O
have,O
a,O
positive,O
impact,O
on,O
our,O
stockholders,O
equity,O
",",O
our,O
stockholders,O
equity,O
would,O
decline,O
over,O
time,O
.,O
,O
Further,O
",",O
in,O
the,O
past,O
our,O
stock,O
price,O
has,O
traded,O
near,O
",",O
and,O
at,O
times,O
below,O
",",O
the,O
$,O
1.00,O
minimum,O
bid,O
price,O
required,O
for,O
continued,O
listing,O
on,O
NASDAQ,I-BUSINESS
.,O
,O
so,O
in,O
the,O
future,O
.,O
,O
If,O
we,O
fail,O
to,O
maintain,O
compliance,O
with,O
NASDAQ,I-BUSINESS
s,O
listing,O
standards,O
",",O
and,O
our,O
common,O
stock,O
becomes,O
ineligible,O
for,O
listing,O
on,O
The,I-MISCELLANEOUS
NASDAQ,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
the,O
liquidity,O
and,O
price,O
of,O
our,O
common,O
stock,O
would,O
be,O
adversely,O
affected,O
.,O
,O
If,O
our,O
common,O
stock,O
was,O
delisted,O
",",O
the,O
price,O
of,O
our,O
stock,O
and,O
the,O
ability,O
of,O
our,O
stockholders,O
to,O
trade,O
in,O
our,O
stock,O
would,O
be,O
adversely,O
affected,O
.,O
,O
In,O
addition,O
",",O
we,O
would,O
be,O
subject,O
to,O
a,O
number,O
of,O
restrictions,O
regarding,O
the,O
registration,O
of,O
our,O
stock,O
under,O
U.S.,I-LOCATION
federal,O
securities,O
laws,O
",",O
and,O
we,O
would,O
not,O
be,O
able,O
to,O
allow,O
our,O
employees,O
to,O
exercise,O
their,O
outstanding,O
options,O
",",O
which,O
could,O
adversely,O
affect,O
our,O
business,O
and,O
results,O
of,O
operations,O
.,O
,O
If,O
we,O
are,O
delisted,O
in,O
the,O
future,O
from,O
The,I-MISCELLANEOUS
NASDAQ,I-MISCELLANEOUS
Global,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
",",O
there,O
may,O
be,O
other,O
negative,O
implications,O
",",O
including,O
the,O
potential,O
loss,O
of,O
confidence,O
by,O
actual,O
or,O
potential,O
collaboration,O
partners,O
",",O
suppliers,O
and,O
employees,O
and,O
the,O
loss,O
of,O
institutional,O
investor,O
interest,O
in,O
our,O
company,O
.,O
,O
The,O
trading,O
price,O
of,O
our,O
common,O
stock,O
may,O
be,O
volatile,O
.,O
,O
The,O
market,O
prices,O
for,O
and,O
trading,O
volumes,O
of,O
securities,O
of,O
biotechnology,O
companies,O
",",O
including,O
our,O
securities,O
",",O
have,O
been,O
historically,O
volatile,O
.,O
,O
The,O
market,O
has,O
from,O
time,O
to,O
time,O
experienced,O
significant,O
price,O
and,O
volume,O
fluctuations,O
unrelated,O
to,O
the,O
operating,O
performance,O
of,O
particular,O
companies,O
.,O
,O
The,O
market,O
price,O
of,O
our,O
common,O
shares,O
may,O
fluctuate,O
significantly,O
due,O
to,O
a,O
variety,O
of,O
factors,O
",",O
including,O
:,O
,O
In,O
addition,O
",",O
the,O
stock,O
market,O
has,O
experienced,O
extreme,O
price,O
and,O
volume,O
fluctuations,O
that,O
have,O
often,O
been,O
unrelated,O
or,O
disproportionate,O
to,O
the,O
operating,O
performance,O
of,O
individual,O
companies,O
.,O
,O
Broad,O
market,O
and,O
industry,O
factors,O
may,O
seriously,O
affect,O
the,O
market,O
price,O
of,O
companies,O
stock,O
",",O
including,O
ours,O
",",O
regardless,O
of,O
actual,O
operating,O
performance,O
.,O
,O
In,O
addition,O
",",O
in,O
the,O
past,O
",",O
following,O
periods,O
of,O
volatility,O
in,O
the,O
overall,O
market,O
and,O
the,O
market,O
price,O
of,O
a,O
particular,O
company,O
s,O
securities,O
",",O
securities,O
class,O
action,O
litigation,O
has,O
often,O
been,O
instituted,O
against,O
these,O
companies,O
.,O
,O
This,O
litigation,O
",",O
if,O
instituted,O
against,O
us,O
",",O
could,O
result,O
in,O
substantial,O
costs,O
and,O
a,O
diversion,O
of,O
our,O
management,O
s,O
attention,O
and,O
resources,O
.,O
,O
Because,O
we,O
do,O
not,O
expect,O
to,O
pay,O
dividends,O
on,O
our,O
common,O
stock,O
",",O
stockholders,O
will,O
benefit,O
from,O
an,O
investment,O
in,O
our,O
common,O
stock,O
only,O
if,O
it,O
appreciates,O
in,O
value,O
.,O
,O
We,O
have,O
never,O
paid,O
cash,O
dividends,O
on,O
our,O
common,O
shares,O
and,O
have,O
no,O
present,O
intention,O
to,O
pay,O
any,O
dividends,O
in,O
the,O
future,O
.,O
,O
We,O
are,O
not,O
profitable,O
and,O
do,O
not,O
expect,O
to,O
earn,O
any,O
material,O
revenues,O
for,O
at,O
least,O
several,O
years,O
",",O
if,O
at,O
all,O
.,O
,O
As,O
a,O
result,O
",",O
we,O
intend,O
to,O
use,O
all,O
available,O
cash,O
and,O
liquid,O
assets,O
in,O
the,O
development,O
of,O
our,O
business,O
.,O
,O
Any,O
future,O
determination,O
about,O
the,O
payment,O
of,O
dividends,O
will,O
be,O
made,O
at,O
the,O
discretion,O
of,O
our,O
board,O
of,O
directors,O
and,O
will,O
depend,O
upon,O
our,O
earnings,O
",",O
if,O
any,O
",",O
capital,O
requirements,O
",",O
operating,O
and,O
financial,O
conditions,O
and,O
on,O
such,O
other,O
factors,O
as,O
our,O
board,O
of,O
directors,O
deems,O
relevant,O
.,O
,O
As,O
a,O
result,O
",",O
the,O
success,O
of,O
an,O
investment,O
in,O
our,O
common,O
stock,O
will,O
depend,O
upon,O
any,O
future,O
appreciation,O
in,O
its,O
value,O
.,O
,O
There,O
is,O
no,O
guarantee,O
that,O
our,O
common,O
stock,O
will,O
appreciate,O
in,O
value,O
or,O
even,O
maintain,O
the,O
price,O
at,O
which,O
stockholders,O
have,O
purchased,O
their,O
shares,O
.,O
,O
We,O
expect,O
that,O
we,O
will,O
seek,O
to,O
raise,O
additional,O
capital,O
in,O
the,O
future,O
;,O
however,O
",",O
such,O
capital,O
may,O
not,O
be,O
available,O
to,O
us,O
on,O
reasonable,O
terms,O
",",O
if,O
at,O
all,O
",",O
when,O
or,O
as,O
we,O
require,O
additional,O
funding,O
.,O
,O
If,O
we,O
issue,O
additional,O
shares,O
of,O
our,O
common,O
stock,O
or,O
other,O
securities,O
that,O
may,O
be,O
convertible,O
into,O
",",O
or,O
exercisable,O
or,O
exchangeable,O
for,O
",",O
our,O
common,O
stock,O
",",O
our,O
existing,O
stockholders,O
would,O
experience,O
further,O
dilution,O
.,O
,O
We,O
expect,O
that,O
we,O
will,O
seek,O
to,O
raise,O
additional,O
capital,O
from,O
time,O
to,O
time,O
in,O
the,O
future,O
.,O
,O
For,O
example,O
",",O
in,O
July,O
2010,O
",",O
we,O
entered,O
into,O
a,O
common,O
stock,O
purchase,O
agreement,O
with,O
Small,I-BUSINESS
Cap,I-BUSINESS
Biotech,I-BUSINESS
Value,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
",",O
or,O
SCBV,I-BUSINESS
",",O
pursuant,O
to,O
which,O
we,O
may,O
sell,O
to,O
SCBV,I-BUSINESS
up,O
to,O
"5,090,759",O
shares,O
of,O
our,O
common,O
stock,O
over,O
a,O
24-month,O
period,O
",",O
subject,O
to,O
the,O
satisfaction,O
of,O
certain,O
terms,O
and,O
conditions,O
contained,O
in,O
the,O
common,O
stock,O
purchase,O
agreement,O
.,O
,O
Future,O
financings,O
may,O
involve,O
the,O
issuance,O
of,O
debt,O
",",O
equity,O
and/or,O
securities,O
convertible,O
into,O
or,O
exercisable,O
or,O
exchangeable,O
for,O
our,O
equity,O
securities,O
.,O
,O
These,O
financings,O
may,O
not,O
be,O
available,O
to,O
us,O
on,O
reasonable,O
terms,O
or,O
at,O
all,O
when,O
and,O
as,O
we,O
require,O
funding,O
.,O
,O
In,O
addition,O
",",O
until,O
October,O
13,O
",",O
2011,O
",",O
the,O
investors,O
in,O
our,O
2010,O
private,O
placement,O
have,O
certain,O
rights,O
of,O
first,O
refusal,O
with,O
respect,O
to,O
any,O
equity,O
or,O
equity,O
equivalent,O
securities,O
that,O
we,O
issue,O
.,O
,O
Compliance,O
with,O
the,O
terms,O
of,O
these,O
rights,O
of,O
first,O
refusal,O
could,O
complicate,O
any,O
future,O
financing,O
transactions,O
we,O
pursue,O
.,O
,O
If,O
we,O
are,O
able,O
to,O
consummate,O
such,O
financings,O
",",O
the,O
trading,O
price,O
of,O
our,O
common,O
stock,O
could,O
be,O
adversely,O
affected,O
and/or,O
the,O
terms,O
of,O
such,O
financings,O
may,O
adversely,O
affect,O
the,O
interests,O
of,O
our,O
existing,O
stockholders,O
.,O
,O
Any,O
failure,O
to,O
obtain,O
additional,O
working,O
capital,O
when,O
required,O
would,O
have,O
a,O
material,O
adverse,O
effect,O
on,O
our,O
business,O
and,O
financial,O
condition,O
and,O
would,O
be,O
expected,O
to,O
result,O
in,O
a,O
decline,O
in,O
our,O
stock,O
price,O
.,O
,O
Any,O
issuances,O
of,O
our,O
common,O
stock,O
",",O
preferred,O
stock,O
",",O
or,O
securities,O
such,O
as,O
warrants,O
or,O
notes,O
that,O
are,O
convertible,O
into,O
",",O
exercisable,O
or,O
exchangeable,O
for,O
",",O
our,O
capital,O
stock,O
",",O
would,O
have,O
a,O
dilutive,O
effect,O
on,O
the,O
voting,O
and,O
economic,O
interest,O
of,O
our,O
existing,O
stockholders,O
.,O
,O
If,O
we,O
sell,O
shares,O
of,O
our,O
common,O
stock,O
under,O
our,O
existing,O
committed,O
equity,O
line,O
financing,O
facility,O
",",O
our,O
existing,O
stockholders,O
will,O
experience,O
immediate,O
dilution,O
and,O
",",O
as,O
a,O
result,O
",",O
our,O
stock,O
price,O
may,O
go,O
down,O
.,O
,O
issued,O
to,O
SCBV,I-BUSINESS
in,O
July,O
2010,O
as,O
compensation,O
for,O
their,O
commitment,O
to,O
enter,O
into,O
the,O
financing,O
arrangement,O
.,O
,O
The,O
sale,O
of,O
shares,O
of,O
our,O
common,O
stock,O
pursuant,O
to,O
the,O
financing,O
arrangement,O
will,O
have,O
a,O
dilutive,O
impact,O
on,O
our,O
existing,O
stockholders,O
.,O
,O
SCBV,I-BUSINESS
may,O
resell,O
some,O
or,O
all,O
of,O
the,O
shares,O
we,O
issue,O
to,O
them,O
under,O
the,O
financing,O
arrangement,O
and,O
such,O
sales,O
could,O
cause,O
the,O
market,O
price,O
of,O
our,O
common,O
stock,O
to,O
decline,O
significantly,O
with,O
advances,O
under,O
the,O
financing,O
arrangement,O
.,O
,O
To,O
the,O
extent,O
of,O
any,O
such,O
decline,O
",",O
any,O
subsequent,O
advances,O
would,O
require,O
us,O
to,O
issue,O
a,O
greater,O
number,O
of,O
shares,O
of,O
common,O
stock,O
to,O
SCBV,I-BUSINESS
in,O
exchange,O
for,O
each,O
dollar,O
of,O
the,O
advance,O
.,O
,O
Under,O
these,O
circumstances,O
",",O
our,O
existing,O
stockholders,O
would,O
experience,O
greater,O
dilution,O
.,O
,O
Although,O
SCBV,I-BUSINESS
is,O
precluded,O
from,O
short,O
sales,O
of,O
shares,O
acquired,O
pursuant,O
to,O
advances,O
under,O
the,O
financing,O
arrangement,O
",",O
the,O
sale,O
of,O
our,O
common,O
stock,O
under,O
the,O
financing,O
arrangement,O
could,O
encourage,O
short,O
sales,O
by,O
third,O
parties,O
",",O
which,O
could,O
contribute,O
to,O
the,O
further,O
decline,O
of,O
our,O
stock,O
price,O
.,O
,O
Our,O
management,O
will,O
have,O
broad,O
discretion,O
over,O
the,O
use,O
of,O
proceeds,O
from,O
the,O
sale,O
of,O
securities,O
to,O
SCBV,I-BUSINESS
and,O
may,O
not,O
use,O
such,O
proceeds,O
in,O
ways,O
that,O
increase,O
the,O
value,O
of,O
our,O
stock,O
price,O
.,O
,O
We,O
will,O
have,O
broad,O
discretion,O
over,O
the,O
use,O
of,O
proceeds,O
from,O
the,O
sale,O
of,O
securities,O
to,O
SCBV,I-BUSINESS
and,O
we,O
could,O
spend,O
the,O
proceeds,O
in,O
ways,O
that,O
do,O
not,O
improve,O
our,O
results,O
of,O
operations,O
or,O
enhance,O
the,O
value,O
of,O
our,O
common,O
stock,O
.,O
,O
Our,O
failure,O
to,O
apply,O
these,O
funds,O
effectively,O
could,O
have,O
a,O
material,O
adverse,O
effect,O
on,O
our,O
business,O
",",O
delay,O
the,O
development,O
of,O
our,O
product,O
candidates,O
and,O
cause,O
the,O
price,O
of,O
our,O
common,O
stock,O
to,O
decline,O
.,O
,O
We,O
can,O
issue,O
shares,O
of,O
preferred,O
stock,O
that,O
may,O
adversely,O
affect,O
the,O
rights,O
of,O
a,O
stockholder,O
of,O
our,O
common,O
stock,O
.,O
,O
Our,O
certificate,O
of,O
incorporation,O
authorizes,O
us,O
to,O
issue,O
up,O
to,O
"10,000,000",O
shares,O
of,O
preferred,O
stock,O
with,O
designations,O
",",O
rights,O
",",O
and,O
preferences,O
determined,O
from,O
time-to-time,O
by,O
our,O
board,O
of,O
directors,O
.,O
,O
Accordingly,O
",",O
our,O
board,O
of,O
directors,O
is,O
empowered,O
",",O
without,O
stockholder,O
approval,O
",",O
to,O
issue,O
preferred,O
stock,O
with,O
dividend,O
",",O
liquidation,O
",",O
conversion,O
",",O
voting,O
or,O
other,O
rights,O
superior,O
to,O
those,O
of,O
holders,O
of,O
our,O
common,O
stock,O
.,O
,O
For,O
example,O
",",O
an,O
issuance,O
of,O
shares,O
of,O
preferred,O
stock,O
could,O
:,O
,O
We,O
have,O
in,O
the,O
past,O
",",O
and,O
we,O
may,O
at,O
any,O
time,O
in,O
the,O
future,O
",",O
issue,O
additional,O
shares,O
of,O
authorized,O
preferred,O
stock,O
.,O
,O
We,O
expect,O
our,O
quarterly,O
operating,O
results,O
to,O
fluctuate,O
in,O
future,O
periods,O
",",O
which,O
may,O
cause,O
our,O
stock,O
price,O
to,O
fluctuate,O
or,O
decline,O
.,O
,O
Our,O
quarterly,O
operating,O
results,O
have,O
fluctuated,O
in,O
the,O
past,O
",",O
and,O
we,O
believe,O
they,O
will,O
continue,O
to,O
do,O
so,O
in,O
the,O
future,O
.,O
,O
by,O
us,O
in,O
September,O
2010,O
of,O
warrants,O
to,O
purchase,O
"3,182,147",O
shares,O
of,O
our,O
common,O
stock,O
.,O
,O
These,O
warrants,O
are,O
accounted,O
for,O
as,O
a,O
derivative,O
financial,O
instrument,O
pursuant,O
to,O
the,O
ASC,I-LEGISLATION/ACT
Topic,O
815,O
",",O
Derivatives,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Hedging,I-MISCELLANEOUS
",",O
and,O
classified,O
as,O
a,O
derivative,O
liability,O
.,O
,O
Accordingly,O
",",O
the,O
fair,O
value,O
of,O
the,O
warrants,O
is,O
recorded,O
on,O
our,O
consolidated,O
balance,O
sheet,O
as,O
a,O
liability,O
",",O
and,O
such,O
fair,O
value,O
is,O
adjusted,O
at,O
each,O
financial,O
reporting,O
date,O
with,O
the,O
adjustment,O
to,O
fair,O
value,O
reflected,O
in,O
our,O
consolidated,O
statement,O
of,O
operations,O
.,O
,O
The,O
fair,O
value,O
of,O
the,O
warrants,O
is,O
determined,O
using,O
the,O
Black-Scholes,I-MISCELLANEOUS
option,I-MISCELLANEOUS
valuation,I-MISCELLANEOUS
model,I-MISCELLANEOUS
.,O
,O
Fluctuations,O
in,O
the,O
assumptions,O
and,O
factors,O
used,O
in,O
the,O
Black-Scholes,I-MISCELLANEOUS
model,I-MISCELLANEOUS
can,O
result,O
in,O
adjustments,O
to,O
the,O
fair,O
value,O
of,O
the,O
warrants,O
reflected,O
on,O
our,O
balance,O
sheet,O
and,O
",",O
therefore,O
",",O
our,O
statement,O
of,O
operations,O
.,O
,O
Due,O
to,O
the,O
classification,O
of,O
such,O
warrants,O
and,O
other,O
factors,O
",",O
quarterly,O
results,O
of,O
operations,O
are,O
difficult,O
to,O
forecast,O
",",O
and,O
period-to-period,O
comparisons,O
of,O
our,O
operating,O
results,O
may,O
not,O
be,O
predictive,O
of,O
future,O
performance,O
.,O
,O
In,O
one,O
or,O
more,O
future,O
quarters,O
",",O
our,O
results,O
of,O
operations,O
may,O
fall,O
below,O
the,O
expectations,O
of,O
securities,O
analysts,O
and,O
investors,O
.,O
,O
In,O
that,O
event,O
",",O
the,O
market,O
price,O
of,O
our,O
common,O
stock,O
could,O
decline,O
.,O
,O
In,O
addition,O
",",O
the,O
market,O
price,O
of,O
our,O
common,O
stock,O
may,O
fluctuate,O
or,O
decline,O
regardless,O
of,O
our,O
operating,O
performance,O
.,O
,O
This,O
prospectus,O
and,O
the,O
SEC,I-GOVERNMENT
filings,O
that,O
are,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
contain,O
or,O
incorporate,O
by,O
reference,O
forward-looking,O
statements,O
.,O
,O
The,O
Private,I-LEGISLATION/ACT
Securities,I-LEGISLATION/ACT
Litigation,I-LEGISLATION/ACT
Reform,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1995,I-LEGISLATION/ACT
has,O
established,O
that,O
these,O
statements,O
qualify,O
for,O
safe,O
harbors,O
from,O
liability,O
.,O
,O
You,O
can,O
identify,O
these,O
statements,O
by,O
forward-looking,O
words,O
such,O
as,O
may,O
",",O
expect,O
",",O
anticipate,O
",",O
contemplate,O
",",O
believe,O
",",O
estimate,O
",",O
intends,O
",",O
and,O
continue,O
or,O
similar,O
words,O
.,O
,O
You,O
should,O
read,O
statements,O
that,O
contain,O
these,O
words,O
carefully,O
because,O
they,O
discuss,O
future,O
expectations,O
",",O
contain,O
projections,O
of,O
future,O
results,O
of,O
operations,O
or,O
financial,O
condition,O
",",O
or,O
state,O
other,O
forward-looking,O
information,O
.,O
,O
We,O
believe,O
it,O
is,O
important,O
to,O
communicate,O
our,O
expectations,O
to,O
our,O
stockholders,O
.,O
,O
However,O
",",O
there,O
may,O
be,O
events,O
in,O
the,O
future,O
that,O
we,O
are,O
not,O
able,O
to,O
predict,O
accurately,O
or,O
over,O
which,O
we,O
have,O
no,O
control,O
.,O
,O
The,O
risk,O
factors,O
and,O
cautionary,O
language,O
discussed,O
in,O
this,O
prospectus,O
provide,O
examples,O
of,O
risks,O
",",O
uncertainties,O
and,O
events,O
that,O
may,O
cause,O
actual,O
results,O
to,O
differ,O
materially,O
from,O
the,O
expectations,O
described,O
in,O
the,O
forward-looking,O
statements,O
",",O
including,O
our,O
ability,O
to,O
:,O
,O
Although,O
we,O
believe,O
that,O
the,O
forward-looking,O
statements,O
contained,O
herein,O
are,O
reasonable,O
",",O
we,O
can,O
give,O
no,O
assurance,O
that,O
our,O
expectations,O
will,O
be,O
met,O
.,O
,O
All,O
forward-looking,O
statements,O
contained,O
herein,O
are,O
expressly,O
qualified,O
in,O
their,O
entirety,O
by,O
this,O
cautionary,O
statement,O
and,O
the,O
risk,O
factors,O
beginning,O
on,O
page,O
7,O
.,O
,O
You,O
are,O
cautioned,O
not,O
to,O
place,O
undue,O
reliance,O
on,O
these,O
forward-looking,O
statements,O
",",O
which,O
speak,O
only,O
as,O
of,O
the,O
date,O
of,O
this,O
prospectus,O
.,O
,O
Except,O
to,O
the,O
extent,O
required,O
by,O
applicable,O
laws,O
and,O
regulations,O
",",O
we,O
undertake,O
no,O
obligation,O
to,O
update,O
these,O
forward-looking,O
statements,O
to,O
reflect,O
events,O
or,O
circumstances,O
after,O
the,O
date,O
of,O
this,O
prospectus,O
or,O
to,O
reflect,O
the,O
occurrence,O
of,O
unanticipated,O
events,O
.,O
,O
The,O
selling,O
stockholder,O
will,O
receive,O
all,O
of,O
the,O
net,O
proceeds,O
from,O
sales,O
of,O
the,O
common,O
stock,O
sold,O
pursuant,O
to,O
this,O
prospectus,O
.,O
,O
We,O
have,O
never,O
paid,O
cash,O
dividends,O
on,O
our,O
common,O
stock,O
and,O
have,O
no,O
present,O
intention,O
to,O
pay,O
any,O
dividends,O
in,O
the,O
future,O
.,O
,O
We,O
are,O
not,O
profitable,O
and,O
do,O
not,O
expect,O
to,O
earn,O
any,O
material,O
revenues,O
for,O
at,O
least,O
several,O
years,O
",",O
if,O
at,O
all,O
.,O
,O
As,O
a,O
result,O
",",O
we,O
intend,O
to,O
use,O
all,O
available,O
cash,O
and,O
liquid,O
assets,O
in,O
the,O
development,O
of,O
our,O
business,O
.,O
,O
In,O
addition,O
",",O
the,O
terms,O
of,O
our,O
loan,O
and,O
security,O
agreement,O
restrict,O
our,O
ability,O
to,O
pay,O
dividends,O
.,O
,O
Any,O
future,O
determination,O
about,O
the,O
payment,O
of,O
dividends,O
will,O
be,O
made,O
at,O
the,O
discretion,O
of,O
our,O
board,O
of,O
directors,O
and,O
will,O
depend,O
upon,O
our,O
earnings,O
",",O
if,O
any,O
",",O
capital,O
requirements,O
",",O
operating,O
and,O
financial,O
conditions,O
and,O
on,O
such,O
other,O
factors,O
as,O
our,O
board,O
of,O
directors,O
deems,O
relevant,O
.,O
,O
The,O
following,O
is,O
a,O
summary,O
of,O
the,O
material,O
provisions,O
of,O
the,O
common,O
stock,O
and,O
the,O
preferred,O
stock,O
contained,O
in,O
our,O
certificate,O
of,O
incorporation,O
and,O
bylaws,O
.,O
,O
For,O
greater,O
detail,O
about,O
our,O
capital,O
stock,O
",",O
please,O
refer,O
to,O
our,O
certificate,O
of,O
incorporation,O
and,O
bylaws,O
",",O
both,O
as,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
as,O
annexes,O
to,O
our,O
registration,O
statement,O
on,O
Form,I-MISCELLANEOUS
S-4,I-MISCELLANEOUS
initially,O
filed,O
September,O
27,O
",",O
2007,O
",",O
as,O
amended,O
.,O
,O
We,O
are,O
authorized,O
to,O
issue,O
"110,012,500",O
shares,O
of,O
all,O
classes,O
of,O
capital,O
stock,O
",",O
of,O
which,O
"100,000,000",O
shares,O
is,O
common,O
stock,O
",",O
$,O
0.0001,O
par,O
value,O
per,O
share,O
;,O
"10,000,000",O
shares,O
is,O
undesignated,O
preferred,O
stock,O
",",O
$,O
0.0001,O
par,O
value,O
per,O
share,O
and,O
"12,500",O
shares,O
is,O
Class,O
UA,O
preferred,O
stock,O
",",O
no,O
par,O
value,O
per,O
share,O
.,O
,O
Our,O
capital,O
is,O
stated,O
in,O
U.S.,I-LOCATION
.,O
,O
As,O
of,O
February,O
28,O
",",O
2011,O
",",O
we,O
had,O
"30,088,628",O
outstanding,O
shares,O
of,O
common,O
stock,O
.,O
,O
The,O
holders,O
of,O
our,O
common,O
stock,O
are,O
entitled,O
to,O
receive,O
such,O
dividends,O
or,O
distributions,O
as,O
are,O
lawfully,O
declared,O
on,O
our,O
common,O
stock,O
",",O
to,O
have,O
notice,O
of,O
any,O
authorized,O
meeting,O
of,O
stockholders,O
",",O
and,O
to,O
one,O
vote,O
for,O
each,O
share,O
of,O
our,O
common,O
stock,O
on,O
all,O
matters,O
which,O
are,O
properly,O
submitted,O
to,O
a,O
vote,O
of,O
stockholders,O
.,O
,O
As,O
a,O
Delaware,I-LOCATION
corporation,O
",",O
we,O
are,O
subject,O
to,O
statutory,O
limitations,O
on,O
the,O
declaration,O
and,O
payment,O
of,O
dividends,O
.,O
,O
In,O
the,O
event,O
of,O
a,O
liquidation,O
",",O
dissolution,O
or,O
winding,O
up,O
of,O
Oncothyreon,O
",",O
holders,O
of,O
our,O
common,O
stock,O
have,O
the,O
right,O
to,O
a,O
ratable,O
portion,O
of,O
assets,O
remaining,O
after,O
satisfaction,O
in,O
full,O
of,O
the,O
prior,O
rights,O
of,O
creditors,O
",",O
including,O
holders,O
of,O
our,O
indebtedness,O
",",O
all,O
liabilities,O
and,O
the,O
aggregate,O
liquidation,O
preferences,O
of,O
any,O
outstanding,O
shares,O
of,O
our,O
preferred,O
stock,O
.,O
,O
The,O
holders,O
of,O
our,O
common,O
stock,O
have,O
no,O
conversion,O
",",O
redemption,O
",",O
preemptive,O
or,O
cumulative,O
voting,O
rights,O
.,O
,O
As,O
of,O
February,O
28,O
",",O
2011,O
",",O
other,O
than,O
as,O
described,O
below,O
",",O
no,O
shares,O
of,O
our,O
preferred,O
stock,O
had,O
been,O
issued,O
and,O
no,O
such,O
shares,O
were,O
subject,O
to,O
outstanding,O
options,O
and,O
other,O
rights,O
to,O
purchase,O
or,O
acquire,O
.,O
,O
However,O
",",O
shares,O
of,O
preferred,O
stock,O
may,O
be,O
issued,O
in,O
one,O
or,O
more,O
series,O
from,O
time,O
to,O
time,O
by,O
our,O
board,O
of,O
directors,O
",",O
and,O
the,O
board,O
of,O
directors,O
is,O
expressly,O
authorized,O
to,O
fix,O
by,O
resolution,O
or,O
resolutions,O
the,O
designations,O
and,O
the,O
powers,O
",",O
preferences,O
and,O
rights,O
",",O
and,O
the,O
qualifications,O
",",O
limitations,O
and,O
restrictions,O
thereof,O
",",O
of,O
the,O
shares,O
of,O
each,O
series,O
of,O
preferred,O
stock,O
.,O
,O
Subject,O
to,O
the,O
determination,O
of,O
our,O
board,O
of,O
directors,O
",",O
any,O
shares,O
of,O
our,O
preferred,O
stock,O
that,O
may,O
be,O
issued,O
in,O
the,O
future,O
would,O
generally,O
have,O
preferences,O
over,O
our,O
common,O
stock,O
with,O
respect,O
to,O
the,O
payment,O
of,O
dividends,O
and,O
the,O
distribution,O
of,O
assets,O
in,O
the,O
event,O
liquidation,O
",",O
dissolution,O
or,O
winding,O
up,O
of,O
Oncothyreon,I-BUSINESS
.,O
,O
Our,O
certificate,O
of,O
incorporation,O
provides,O
for,O
a,O
separate,O
class,O
of,O
preferred,O
stock,O
",",O
the,O
Class,O
UA,O
preferred,O
stock,O
.,O
,O
As,O
of,O
February,O
28,O
",",O
2011,O
",",O
"12,500",O
shares,O
of,O
Class,O
UA,O
preferred,O
stock,O
are,O
issued,O
and,O
outstanding,O
and,O
held,O
by,O
the,O
University,I-BUSINESS
of,I-BUSINESS
Alberta,I-BUSINESS
.,O
,O
Below,O
is,O
a,O
summary,O
of,O
the,O
terms,O
associated,O
with,O
our,O
Class,O
UA,O
preferred,O
stock,O
.,O
,O
Please,O
refer,O
to,O
our,O
certificate,O
of,O
incorporation,O
for,O
a,O
full,O
description,O
of,O
the,O
rights,O
and,O
privileges,O
attached,O
to,O
our,O
Class,O
UA,O
preferred,O
stock,O
.,O
,O
holders,O
of,O
the,O
shares,O
of,O
Class,O
UA,O
preferred,O
stock,O
would,O
be,O
entitled,O
to,O
vote,O
separately,O
as,O
a,O
class,O
",",O
in,O
which,O
case,O
the,O
holders,O
of,O
the,O
shares,O
of,O
Class,O
UA,O
preferred,O
stock,O
shall,O
be,O
entitled,O
to,O
receive,O
notice,O
of,O
and,O
to,O
attend,O
and,O
vote,O
at,O
such,O
meeting,O
.,O
,O
Amendments,O
to,O
our,O
certificate,O
of,O
incorporation,O
that,O
would,O
increase,O
or,O
decrease,O
the,O
par,O
value,O
of,O
the,O
Class,O
UA,O
preferred,O
stock,O
or,O
alter,O
or,O
change,O
the,O
powers,O
",",O
preferences,O
or,O
special,O
rights,O
of,O
the,O
Class,O
UA,O
preferred,O
stock,O
so,O
as,O
to,O
affect,O
them,O
adversely,O
would,O
require,O
the,O
approval,O
of,O
the,O
Class,O
UA,O
preferred,O
stock,O
.,O
,O
The,O
Class,O
UA,O
preferred,O
stock,O
is,O
not,O
convertible,O
into,O
shares,O
of,O
any,O
other,O
class,O
of,O
our,O
capital,O
stock,O
.,O
,O
The,O
holders,O
of,O
the,O
shares,O
of,O
Class,O
UA,O
preferred,O
stock,O
are,O
not,O
entitled,O
to,O
receive,O
dividends,O
.,O
,O
In,O
the,O
event,O
of,O
any,O
liquidation,O
",",O
dissolution,O
or,O
winding,O
up,O
of,O
Oncothyreon,I-BUSINESS
",",O
the,O
holders,O
of,O
the,O
Class,O
UA,O
preferred,O
stock,O
are,O
entitled,O
to,O
receive,O
",",O
in,O
preference,O
to,O
the,O
holders,O
of,O
our,O
common,O
stock,O
",",O
an,O
amount,O
equal,O
to,O
the,O
lesser,O
of,O
(,O
a,O
),O
20,O
%,O
of,O
the,O
after,O
tax,O
profits,O
",",O
which,O
we,O
refer,O
to,O
as,O
net,O
profits,O
",",O
determined,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
",",O
where,O
relevant,O
",",O
consistently,O
applied,O
",",O
for,O
the,O
period,O
commencing,O
at,O
the,O
end,O
of,O
our,O
last,O
completed,O
fiscal,O
year,O
and,O
ending,O
on,O
the,O
date,O
of,O
the,O
distribution,O
of,O
our,O
assets,O
to,O
stockholders,O
together,O
with,O
20,O
%,O
of,O
our,O
net,O
profits,O
for,O
the,O
last,O
completed,O
fiscal,O
year,O
and,O
(,O
b,O
),O
Cdn.,O
$,O
100,O
per,O
share,O
.,O
,O
We,O
may,O
",",O
at,O
our,O
option,O
and,O
subject,O
to,O
the,O
requirements,O
of,O
applicable,O
law,O
",",O
redeem,O
at,O
any,O
time,O
the,O
whole,O
or,O
from,O
time,O
to,O
time,O
any,O
part,O
of,O
the,O
then-outstanding,O
shares,O
of,O
Class,O
UA,O
preferred,O
stock,O
for,O
Cdn.,O
$,O
100,O
per,O
share,O
.,O
,O
We,O
are,O
required,O
each,O
year,O
to,O
redeem,O
at,O
Cdn.,I-MISCELLANEOUS
$,O
100,O
per,O
share,O
that,O
number,O
of,O
shares,O
of,O
Class,O
UA,O
preferred,O
stock,O
as,O
is,O
determined,O
by,O
dividing,O
20,O
%,O
of,O
the,O
net,O
profits,O
by,O
Cdn.,I-MISCELLANEOUS
$,O
100,O
.,O
,O
Our,O
shares,O
of,O
authorized,O
and,O
unissued,O
common,O
stock,O
are,O
available,O
for,O
future,O
issuance,O
without,O
additional,O
stockholder,O
approval,O
.,O
,O
While,O
these,O
additional,O
shares,O
are,O
not,O
designed,O
to,O
deter,O
or,O
prevent,O
a,O
change,O
of,O
control,O
",",O
under,O
some,O
circumstances,O
we,O
could,O
use,O
the,O
additional,O
shares,O
to,O
create,O
voting,O
impediments,O
or,O
to,O
frustrate,O
persons,O
seeking,O
to,O
effect,O
a,O
takeover,O
or,O
otherwise,O
gain,O
control,O
by,O
",",O
for,O
example,O
",",O
issuing,O
those,O
shares,O
in,O
private,O
placements,O
to,O
purchasers,O
who,O
might,O
side,O
with,O
our,O
board,O
of,O
directors,O
in,O
opposing,O
a,O
hostile,O
takeover,O
bid,O
.,O
,O
Our,O
certificate,O
of,O
incorporation,O
grants,O
our,O
board,O
of,O
directors,O
the,O
authority,O
",",O
without,O
any,O
further,O
vote,O
or,O
action,O
by,O
our,O
stockholders,O
",",O
to,O
issue,O
preferred,O
stock,O
in,O
one,O
or,O
more,O
series,O
and,O
to,O
fix,O
the,O
number,O
of,O
shares,O
constituting,O
any,O
such,O
series,O
and,O
the,O
preferences,O
",",O
limitations,O
and,O
relative,O
rights,O
",",O
including,O
dividend,O
rights,O
",",O
dividend,O
rate,O
",",O
voting,O
rights,O
",",O
terms,O
of,O
redemption,O
",",O
redemption,O
price,O
or,O
prices,O
",",O
conversion,O
rights,O
and,O
liquidation,O
preferences,O
of,O
the,O
shares,O
constituting,O
any,O
series,O
.,O
,O
The,O
existence,O
of,O
authorized,O
but,O
unissued,O
preferred,O
stock,O
could,O
reduce,O
our,O
attractiveness,O
as,O
a,O
target,O
for,O
an,O
unsolicited,O
takeover,O
bid,O
since,O
we,O
could,O
",",O
for,O
example,O
",",O
issue,O
shares,O
of,O
preferred,O
stock,O
to,O
parties,O
who,O
might,O
oppose,O
such,O
a,O
takeover,O
bid,O
or,O
shares,O
that,O
contain,O
terms,O
the,O
potential,O
acquirer,O
may,O
find,O
unattractive,O
.,O
,O
This,O
may,O
have,O
the,O
effect,O
of,O
delaying,O
or,O
preventing,O
a,O
change,O
in,O
control,O
",",O
may,O
discourage,O
bids,O
for,O
the,O
common,O
stock,O
at,O
a,O
premium,O
over,O
the,O
market,O
price,O
of,O
the,O
common,O
stock,O
",",O
and,O
may,O
adversely,O
affect,O
the,O
market,O
price,O
of,O
",",O
and,O
the,O
voting,O
and,O
other,O
rights,O
of,O
the,O
holders,O
of,O
",",O
common,O
stock,O
.,O
,O
Certain,O
provisions,O
of,O
Delaware,I-LOCATION
law,O
and,O
our,O
certificate,O
of,O
incorporation,O
and,O
bylaws,O
could,O
make,O
it,O
more,O
difficult,O
to,O
acquire,O
us,O
by,O
means,O
of,O
a,O
tender,O
offer,O
",",O
a,O
proxy,O
contest,O
or,O
otherwise,O
and,O
to,O
remove,O
our,O
incumbent,O
officers,O
and,O
directors,O
.,O
,O
These,O
provisions,O
",",O
summarized,O
below,O
",",O
are,O
expected,O
to,O
discourage,O
certain,O
types,O
of,O
coercive,O
takeover,O
practices,O
and,O
inadequate,O
takeover,O
bids,O
and,O
to,O
encourage,O
persons,O
seeking,O
to,O
acquire,O
control,O
of,O
us,O
to,O
first,O
negotiate,O
with,O
us,O
.,O
,O
We,O
believe,O
that,O
the,O
benefits,O
of,O
increased,O
protection,O
of,O
our,O
potential,O
ability,O
to,O
negotiate,O
with,O
the,O
proponent,O
of,O
an,O
unfriendly,O
or,O
unsolicited,O
proposal,O
to,O
acquire,O
or,O
restructure,O
us,O
outweigh,O
the,O
disadvantages,O
of,O
discouraging,O
takeover,O
or,O
acquisition,O
proposals,O
because,O
",",O
among,O
other,O
things,O
",",O
negotiation,O
of,O
these,O
proposals,O
could,O
result,O
in,O
an,O
improvement,O
of,O
their,O
terms,O
.,O
,O
We,O
are,O
subject,O
to,O
Section,O
203,O
of,O
the,O
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
the,I-LEGISLATION/ACT
State,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Delaware,I-LEGISLATION/ACT
",",O
an,O
anti-takeover,O
law,O
.,O
,O
In,O
general,O
",",O
Section,O
203,O
prohibits,O
a,O
publicly,O
held,O
Delaware,I-LOCATION
corporation,O
from,O
engaging,O
in,O
a,O
business,O
combination,O
with,O
an,O
interested,O
stockholder,O
for,O
a,O
period,O
of,O
three,O
years,O
following,O
the,O
date,O
the,O
person,O
became,O
an,O
interested,O
stockholder,O
",",O
unless,O
",",O
with,O
exceptions,O
",",O
the,O
business,O
combination,O
or,O
the,O
transaction,O
in,O
which,O
the,O
person,O
became,O
an,O
interested,O
stockholder,O
is,O
approved,O
in,O
a,O
prescribed,O
manner,O
.,O
,O
Generally,O
",",O
a,O
business,O
combination,O
includes,O
a,O
merger,O
",",O
asset,O
or,O
stock,O
sale,O
",",O
or,O
other,O
transaction,O
resulting,O
in,O
a,O
financial,O
benefit,O
to,O
the,O
interested,O
stockholder,O
.,O
,O
Generally,O
",",O
an,O
interested,O
stockholder,O
is,O
a,O
person,O
who,O
",",O
together,O
with,O
affiliates,O
and,O
associates,O
",",O
owns,O
",",O
or,O
within,O
three,O
years,O
prior,O
to,O
the,O
determination,O
of,O
interested,O
stockholder,O
status,O
",",O
did,O
own,O
",",O
15,O
%,O
or,O
more,O
of,O
a,O
corporation,O
s,O
voting,O
stock,O
.,O
,O
The,O
existence,O
of,O
this,O
provision,O
would,O
be,O
expected,O
to,O
have,O
an,O
anti-takeover,O
effect,O
with,O
respect,O
to,O
transactions,O
not,O
approved,O
in,O
advance,O
by,O
our,O
board,O
of,O
directors,O
",",O
including,O
discouraging,O
attempts,O
that,O
might,O
result,O
in,O
a,O
premium,O
over,O
the,O
market,O
price,O
for,O
the,O
shares,O
of,O
common,O
stock,O
held,O
by,O
stockholders,O
.,O
,O
Our,O
certificate,O
of,O
incorporation,O
and,O
bylaws,O
require,O
that,O
any,O
action,O
required,O
or,O
permitted,O
to,O
be,O
taken,O
by,O
our,O
stockholders,O
must,O
be,O
effected,O
at,O
a,O
duly,O
called,O
annual,O
or,O
special,O
meeting,O
of,O
the,O
stockholders,O
and,O
may,O
not,O
be,O
effected,O
by,O
written,O
consent,O
.,O
,O
Special,O
meetings,O
of,O
our,O
stockholders,O
may,O
be,O
called,O
only,O
by,O
the,O
Chairman,O
of,O
our,O
board,O
of,O
directors,O
",",O
a,O
majority,O
of,O
our,O
board,O
of,O
directors,O
or,O
our,O
president,O
.,O
,O
Our,O
certificate,O
of,O
incorporation,O
and,O
bylaws,O
also,O
provide,O
that,O
our,O
board,O
of,O
directors,O
will,O
be,O
divided,O
into,O
three,O
classes,O
",",O
with,O
each,O
class,O
serving,O
staggered,O
three-year,O
terms,O
.,O
,O
Except,O
as,O
otherwise,O
set,O
forth,O
in,O
our,O
certificate,O
of,O
incorporation,O
and,O
bylaws,O
",",O
the,O
stockholders,O
may,O
amend,O
or,O
repeal,O
certain,O
provisions,O
of,O
our,O
certificate,O
of,O
incorporation,O
and,O
may,O
amend,O
",",O
alter,O
or,O
repeal,O
our,O
bylaws,O
only,O
with,O
the,O
affirmative,O
vote,O
of,O
the,O
holders,O
of,O
75,O
%,O
of,O
the,O
shares,O
of,O
capital,O
stock,O
issued,O
and,O
outstanding,O
and,O
entitled,O
to,O
vote,O
at,O
a,O
general,O
or,O
special,O
meeting,O
of,O
our,O
stockholders,O
",",O
as,O
applicable,O
.,O
,O
These,O
provisions,O
may,O
have,O
the,O
effect,O
of,O
deterring,O
hostile,O
takeovers,O
or,O
delaying,O
changes,O
in,O
control,O
of,O
us,O
or,O
our,O
management,O
.,O
,O
The,O
transfer,O
agent,O
for,O
our,O
common,O
stock,O
is,O
Computershare,I-BUSINESS
Investor,I-BUSINESS
Services,I-BUSINESS
Inc.,I-BUSINESS
",",O
350,O
Indiana,I-LOCATION
St.,I-LOCATION
",",O
Suite,O
800,O
",",O
Golden,I-LOCATION
",",O
Colorado,I-LOCATION
80401,O
",",O
(,O
214,O
),O
340-0757,O
.,O
,O
Our,O
common,O
stock,O
is,O
quoted,O
on,O
the,O
Nasdaq,I-MISCELLANEOUS
Global,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
under,O
the,O
trading,O
symbol,O
ONTY,I-BUSINESS
.,O
,O
This,O
prospectus,O
relates,O
to,O
the,O
possible,O
resale,O
from,O
time,O
to,O
time,O
by,O
the,O
selling,O
stockholder,O
of,O
any,O
or,O
all,O
of,O
the,O
shares,O
of,O
common,O
stock,O
that,O
(,O
i,O
),O
may,O
be,O
issued,O
by,O
us,O
to,O
SCBV,I-BUSINESS
under,O
the,O
Purchase,O
Agreement,O
and,O
(,O
ii,O
),O
have,O
been,O
issued,O
as,O
of,O
the,O
date,O
hereof,O
to,O
SCBV,I-BUSINESS
as,O
Commitment,O
Shares,O
under,O
the,O
terms,O
of,O
the,O
Purchase,O
Agreement,O
.,O
,O
For,O
additional,O
information,O
regarding,O
the,O
issuance,O
of,O
common,O
stock,O
covered,O
by,O
this,O
prospectus,O
",",O
see,O
Prospectus,O
Summary,O
—,O
Committed,O
Equity,O
Line,O
Financing,O
With,O
SCBV,O
above,O
.,O
,O
We,O
are,O
registering,O
the,O
shares,O
of,O
common,O
stock,O
pursuant,O
to,O
the,O
provisions,O
of,O
the,O
Registration,O
Rights,O
Agreement,O
we,O
entered,O
into,O
with,O
SCBV,I-BUSINESS
on,O
July,O
6,O
",",O
2010,O
in,O
order,O
to,O
permit,O
the,O
selling,O
stockholder,O
to,O
offer,O
the,O
shares,O
for,O
resale,O
from,O
time,O
to,O
time,O
.,O
,O
Except,O
for,O
the,O
ownership,O
of,O
the,O
Commitment,O
Shares,O
and,O
for,O
the,O
transactions,O
contemplated,O
by,O
the,O
Purchase,O
Agreement,O
and,O
the,O
Registration,O
Rights,O
Agreement,O
",",O
SCBV,I-BUSINESS
has,O
not,O
had,O
any,O
material,O
relationship,O
with,O
us,O
within,O
the,O
past,O
three,O
years,O
.,O
,O
The,O
table,O
below,O
presents,O
information,O
regarding,O
the,O
selling,O
stockholder,O
and,O
the,O
shares,O
of,O
common,O
stock,O
that,O
it,O
may,O
offer,O
from,O
time,O
to,O
time,O
under,O
this,O
prospectus,O
.,O
,O
This,O
table,O
is,O
prepared,O
based,O
on,O
information,O
supplied,O
to,O
us,O
by,O
the,O
selling,O
stockholder,O
",",O
and,O
reflects,O
holdings,O
as,O
of,O
March,O
15,O
",",O
2011,O
.,O
,O
As,O
used,O
in,O
this,O
prospectus,O
",",O
the,O
term,O
selling,O
stockholder,O
includes,O
SCBV,O
and,O
any,O
donees,O
",",O
pledgees,O
",",O
transferees,O
or,O
other,O
successors,O
in,O
interest,O
selling,O
shares,O
received,O
after,O
the,O
date,O
of,O
this,O
prospectus,O
from,O
the,O
selling,O
stockholder,O
as,O
a,O
gift,O
",",O
pledge,O
",",O
or,O
other,O
non-sale,O
related,O
transfer,O
.,O
,O
The,O
number,O
of,O
shares,O
in,O
the,O
column,O
Maximum,O
Number,O
of,O
Shares,O
of,O
Common,O
Stock,O
to,O
be,O
Offered,O
Pursuant,O
to,O
this,O
Prospectus,O
represents,O
all,O
of,O
the,O
shares,O
of,O
common,O
stock,O
that,O
the,O
selling,O
stockholder,O
may,O
offer,O
under,O
this,O
prospectus,O
.,O
,O
The,O
selling,O
stockholder,O
may,O
sell,O
some,O
",",O
all,O
or,O
none,O
of,O
its,O
shares,O
in,O
this,O
offering,O
.,O
,O
We,O
do,O
not,O
know,O
how,O
long,O
the,O
selling,O
stockholder,O
will,O
hold,O
the,O
shares,O
before,O
selling,O
them,O
",",O
and,O
we,O
currently,O
have,O
no,O
agreements,O
",",O
arrangements,O
or,O
understandings,O
with,O
the,O
selling,O
stockholder,O
regarding,O
the,O
sale,O
of,O
any,O
of,O
the,O
shares,O
.,O
,O
Beneficial,O
ownership,O
is,O
determined,O
in,O
accordance,O
with,O
Rule,O
13d-3,O
(,O
d,O
),O
promulgated,O
by,O
the,O
SEC,I-GOVERNMENT
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
and,O
includes,O
shares,O
of,O
common,O
stock,O
with,O
respect,O
to,O
which,O
the,O
selling,O
stockholder,O
has,O
voting,O
and,O
investment,O
power,O
.,O
,O
The,O
percentage,O
of,O
shares,O
of,O
common,O
stock,O
beneficially,O
owned,O
by,O
the,O
selling,O
stockholder,O
prior,O
to,O
the,O
offering,O
shown,O
in,O
the,O
table,O
below,O
is,O
based,O
both,O
on,O
an,O
aggregate,O
of,O
"30,088,628",O
shares,O
of,O
our,O
common,O
stock,O
outstanding,O
on,O
March,O
15,O
",",O
2011,O
.,O
,O
Because,O
the,O
purchase,O
price,O
of,O
the,O
shares,O
of,O
common,O
stock,O
issuable,O
under,O
the,O
Purchase,O
Agreement,O
is,O
determined,O
on,O
each,O
settlement,O
date,O
",",O
the,O
number,O
of,O
shares,O
that,O
may,O
actually,O
be,O
sold,O
by,O
the,O
Company,O
under,O
the,O
Purchase,O
Agreement,O
may,O
be,O
fewer,O
than,O
the,O
number,O
of,O
shares,O
being,O
offered,O
by,O
this,O
prospectus,O
.,O
,O
The,O
fourth,O
column,O
assumes,O
the,O
sale,O
of,O
all,O
of,O
the,O
shares,O
offered,O
by,O
the,O
selling,O
stockholder,O
pursuant,O
to,O
this,O
prospectus,O
.,O
,O
We,O
are,O
registering,O
(,O
i,O
),O
shares,O
of,O
common,O
stock,O
that,O
may,O
be,O
issued,O
by,O
us,O
from,O
time,O
to,O
time,O
to,O
SCBV,I-BUSINESS
under,O
the,O
Purchase,O
Agreement,O
to,O
permit,O
the,O
resale,O
of,O
these,O
shares,O
of,O
common,O
stock,O
after,O
the,O
issuance,O
thereof,O
by,O
the,O
selling,O
stockholder,O
from,O
time,O
to,O
time,O
after,O
the,O
date,O
of,O
this,O
prospectus,O
and,O
(,O
ii,O
),O
shares,O
of,O
common,O
stock,O
that,O
have,O
been,O
issued,O
as,O
of,O
the,O
date,O
hereof,O
as,O
Commitment,O
Shares,O
to,O
SCBV,I-BUSINESS
under,O
the,O
terms,O
of,O
the,O
Purchase,O
Agreement,O
to,O
permit,O
the,O
resale,O
of,O
these,O
shares,O
of,O
common,O
stock,O
by,O
the,O
selling,O
stockholder,O
from,O
time,O
to,O
time,O
after,O
the,O
date,O
of,O
this,O
prospectus,O
.,O
,O
We,O
will,O
not,O
receive,O
any,O
of,O
the,O
proceeds,O
from,O
the,O
sale,O
by,O
the,O
selling,O
stockholder,O
of,O
the,O
shares,O
of,O
common,O
stock,O
.,O
,O
We,O
will,O
bear,O
all,O
fees,O
and,O
expenses,O
incident,O
to,O
our,O
obligation,O
to,O
register,O
the,O
shares,O
of,O
common,O
stock,O
.,O
,O
The,O
selling,O
stockholder,O
may,O
decide,O
not,O
to,O
sell,O
any,O
shares,O
of,O
common,O
stock,O
.,O
,O
The,O
selling,O
stockholder,O
may,O
sell,O
all,O
or,O
a,O
portion,O
of,O
the,O
shares,O
of,O
common,O
stock,O
beneficially,O
owned,O
by,O
it,O
and,O
offered,O
hereby,O
from,O
time,O
to,O
time,O
directly,O
or,O
through,O
one,O
or,O
more,O
underwriters,O
",",O
broker-dealers,O
or,O
agents,O
",",O
who,O
may,O
receive,O
compensation,O
in,O
the,O
form,O
of,O
discounts,O
",",O
concessions,O
or,O
commissions,O
from,O
the,O
selling,O
stockholder,O
and/or,O
the,O
purchasers,O
of,O
the,O
shares,O
of,O
common,O
stock,O
for,O
whom,O
they,O
may,O
act,O
as,O
agent,O
.,O
,O
In,O
effecting,O
sales,O
",",O
broker-dealers,O
that,O
are,O
engaged,O
by,O
the,O
selling,O
stockholder,O
may,O
arrange,O
for,O
other,O
broker-dealers,O
to,O
participate,O
.,O
,O
SCBV,I-BUSINESS
is,O
an,O
underwriter,O
within,O
the,O
meaning,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Any,O
brokers,O
",",O
dealers,O
or,O
agents,O
who,O
participate,O
in,O
the,O
distribution,O
of,O
the,O
shares,O
of,O
common,O
stock,O
by,O
the,O
selling,O
stockholder,O
may,O
also,O
be,O
deemed,O
to,O
be,O
underwriters,O
",",O
and,O
any,O
profits,O
on,O
the,O
sale,O
of,O
the,O
shares,O
of,O
common,O
stock,O
by,O
them,O
and,O
any,O
discounts,O
",",O
commissions,O
or,O
concessions,O
received,O
by,O
any,O
such,O
brokers,O
",",O
dealers,O
or,O
agents,O
may,O
be,O
deemed,O
to,O
be,O
underwriting,O
discounts,O
and,O
commissions,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
SCBV,I-BUSINESS
has,O
advised,O
us,O
that,O
it,O
will,O
use,O
an,O
unaffiliated,O
broker-dealer,O
to,O
effectuate,O
all,O
resales,O
of,O
our,O
common,O
stock,O
.,O
,O
To,O
our,O
knowledge,O
",",O
SCBV,I-BUSINESS
has,O
not,O
entered,O
into,O
any,O
agreement,O
",",O
arrangement,O
or,O
understanding,O
with,O
any,O
particular,O
broker-dealer,O
or,O
market,O
maker,O
with,O
respect,O
to,O
the,O
shares,O
of,O
common,O
stock,O
offered,O
hereby,O
",",O
nor,O
do,O
we,O
know,O
the,O
identity,O
of,O
the,O
broker-dealers,O
or,O
market,O
makers,O
that,O
may,O
participate,O
in,O
the,O
resale,O
of,O
the,O
shares,O
.,O
,O
Because,O
SCBV,I-BUSINESS
is,O
",",O
and,O
any,O
other,O
selling,O
stockholder,O
",",O
broker,O
",",O
dealer,O
or,O
agent,O
may,O
be,O
deemed,O
to,O
be,O
",",O
an,O
underwriter,O
within,O
the,O
meaning,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
SCBV,I-BUSINESS
will,O
(,O
and,O
any,O
other,O
selling,O
stockholder,O
",",O
broker,O
",",O
dealer,O
or,O
agent,O
may,O
),O
be,O
subject,O
to,O
the,O
prospectus,O
delivery,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
may,O
be,O
subject,O
to,O
certain,O
statutory,O
liabilities,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
including,O
",",O
without,O
limitation,O
",",O
Sections,O
11,O
",",O
12,O
and,O
17,O
thereof,O
),O
and,O
Rule,O
10b-5,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
The,O
selling,O
stockholder,O
will,O
act,O
independently,O
of,O
us,O
in,O
making,O
decisions,O
with,O
respect,O
to,O
the,O
timing,O
",",O
manner,O
and,O
size,O
of,O
each,O
sale,O
.,O
,O
The,O
shares,O
of,O
common,O
stock,O
may,O
be,O
sold,O
in,O
one,O
or,O
more,O
transactions,O
at,O
fixed,O
prices,O
",",O
at,O
prevailing,O
market,O
prices,O
at,O
the,O
time,O
of,O
the,O
sale,O
",",O
at,O
varying,O
prices,O
determined,O
at,O
the,O
time,O
of,O
sale,O
",",O
or,O
at,O
negotiated,O
prices,O
.,O
,O
These,O
sales,O
may,O
be,O
effected,O
in,O
transactions,O
",",O
which,O
may,O
involve,O
crosses,O
or,O
block,O
transactions,O
",",O
pursuant,O
to,O
one,O
or,O
more,O
of,O
the,O
following,O
methods,O
:,O
,O
The,O
selling,O
stockholder,O
may,O
also,O
sell,O
shares,O
of,O
common,O
stock,O
covered,O
by,O
this,O
prospectus,O
pursuant,O
to,O
Rule,O
144,O
promulgated,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
if,O
available,O
",",O
rather,O
than,O
under,O
this,O
prospectus,O
.,O
,O
In,O
addition,O
",",O
the,O
selling,O
stockholder,O
may,O
transfer,O
the,O
shares,O
of,O
common,O
stock,O
by,O
other,O
means,O
not,O
described,O
in,O
this,O
prospectus,O
.,O
,O
Any,O
broker-dealer,O
participating,O
in,O
such,O
transactions,O
as,O
agent,O
may,O
receive,O
commissions,O
from,O
the,O
selling,O
stockholder,O
(,O
and,O
",",O
if,O
they,O
act,O
as,O
agent,O
for,O
the,O
purchaser,O
of,O
such,O
shares,O
",",O
from,O
such,O
purchaser,O
),O
.,O
,O
SCBV,I-BUSINESS
has,O
informed,O
us,O
that,O
each,O
such,O
broker-dealer,O
will,O
receive,O
commissions,O
from,O
SCBV,I-BUSINESS
which,O
will,O
not,O
exceed,O
customary,O
brokerage,O
commissions,O
.,O
,O
Broker-dealers,O
may,O
agree,O
with,O
the,O
selling,O
stockholder,O
to,O
sell,O
a,O
specified,O
number,O
of,O
shares,O
at,O
a,O
stipulated,O
price,O
per,O
share,O
",",O
and,O
",",O
to,O
the,O
extent,O
such,O
a,O
broker-dealer,O
is,O
unable,O
to,O
do,O
so,O
acting,O
as,O
agent,O
for,O
the,O
selling,O
stockholder,O
",",O
to,O
purchase,O
as,O
principal,O
any,O
unsold,O
shares,O
at,O
the,O
price,O
required,O
to,O
fulfill,O
the,O
broker-dealer,O
commitment,O
to,O
the,O
selling,O
stockholder,O
.,O
,O
Broker-dealers,O
who,O
acquire,O
shares,O
as,O
principal,O
may,O
thereafter,O
resell,O
such,O
shares,O
from,O
time,O
to,O
time,O
in,O
one,O
or,O
more,O
transactions,O
(,O
which,O
may,O
involve,O
crosses,O
and,O
block,O
transactions,O
and,O
which,O
may,O
involve,O
sales,O
to,O
and,O
through,O
other,O
broker-dealers,O
",",O
including,O
transactions,O
of,O
the,O
nature,O
described,O
above,O
and,O
pursuant,O
to,O
one,O
or,O
more,O
of,O
the,O
methods,O
described,O
above,O
),O
at,O
fixed,O
prices,O
",",O
at,O
prevailing,O
market,O
prices,O
at,O
the,O
time,O
of,O
the,O
sale,O
",",O
at,O
varying,O
prices,O
determined,O
at,O
the,O
time,O
of,O
sale,O
",",O
or,O
at,O
negotiated,O
prices,O
",",O
and,O
in,O
connection,O
with,O
such,O
resales,O
may,O
pay,O
to,O
or,O
receive,O
from,O
the,O
purchasers,O
of,O
such,O
shares,O
commissions,O
computed,O
as,O
described,O
above,O
.,O
,O
To,O
the,O
extent,O
required,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
an,O
amendment,O
to,O
this,O
prospectus,O
or,O
a,O
supplemental,O
prospectus,O
will,O
be,O
filed,O
",",O
disclosing,O
:,O
,O
SCBV,I-BUSINESS
has,O
informed,O
us,O
that,O
it,O
does,O
not,O
have,O
any,O
written,O
or,O
oral,O
agreement,O
or,O
understanding,O
",",O
directly,O
or,O
indirectly,O
",",O
with,O
any,O
person,O
to,O
distribute,O
the,O
common,O
stock,O
.,O
,O
Pursuant,O
to,O
a,O
requirement,O
of,O
the,O
Financial,I-BUSINESS
Industry,I-BUSINESS
Regulatory,I-BUSINESS
Authority,I-BUSINESS
",",O
or,O
FINRA,I-BUSINESS
",",O
the,O
maximum,O
commission,O
or,O
discount,O
and,O
other,O
compensation,O
to,O
be,O
received,O
by,O
any,O
FINRA,I-BUSINESS
member,O
or,O
independent,O
broker-dealer,O
shall,O
not,O
be,O
greater,O
than,O
eight,O
percent,O
(,O
8,O
%,O
),O
of,O
the,O
gross,O
proceeds,O
received,O
by,O
us,O
for,O
the,O
sale,O
of,O
any,O
securities,O
being,O
registered,O
pursuant,O
to,O
SEC,I-GOVERNMENT
Rule,O
415,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Under,O
the,O
securities,O
laws,O
of,O
some,O
states,O
",",O
the,O
shares,O
of,O
common,O
stock,O
may,O
be,O
sold,O
in,O
such,O
states,O
only,O
through,O
registered,O
or,O
licensed,O
brokers,O
or,O
dealers,O
.,O
,O
In,O
addition,O
",",O
in,O
some,O
states,O
the,O
shares,O
of,O
common,O
stock,O
may,O
not,O
be,O
sold,O
unless,O
such,O
shares,O
have,O
been,O
registered,O
or,O
qualified,O
for,O
sale,O
in,O
such,O
state,O
or,O
an,O
exemption,O
from,O
registration,O
or,O
qualification,O
is,O
available,O
and,O
is,O
complied,O
with,O
.,O
,O
There,O
can,O
be,O
no,O
assurance,O
that,O
the,O
selling,O
stockholder,O
will,O
sell,O
any,O
or,O
all,O
of,O
the,O
shares,O
of,O
common,O
stock,O
registered,O
pursuant,O
to,O
the,O
registration,O
statement,O
",",O
of,O
which,O
this,O
prospectus,O
forms,O
a,O
part,O
.,O
,O
Underwriters,O
and,O
purchasers,O
that,O
are,O
deemed,O
underwriters,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
may,O
engage,O
in,O
transactions,O
that,O
stabilize,O
",",O
maintain,O
or,O
otherwise,O
affect,O
the,O
price,O
of,O
the,O
common,O
stock,O
",",O
including,O
the,O
entry,O
of,O
stabilizing,O
bids,O
or,O
syndicate,O
covering,O
transactions,O
or,O
the,O
imposition,O
of,O
penalty,O
bids,O
.,O
,O
The,O
selling,O
stockholder,O
and,O
any,O
other,O
person,O
participating,O
in,O
the,O
sale,O
or,O
distribution,O
of,O
the,O
shares,O
of,O
common,O
stock,O
will,O
be,O
subject,O
to,O
applicable,O
provisions,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
the,O
rules,O
and,O
regulations,O
thereunder,O
(,O
including,O
",",O
without,O
limitation,O
",",O
Regulation,I-LEGISLATION/ACT
M,I-LEGISLATION/ACT
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
which,O
may,O
restrict,O
certain,O
activities,O
of,O
",",O
and,O
limit,O
the,O
timing,O
of,O
purchases,O
and,O
sales,O
of,O
any,O
of,O
the,O
shares,O
of,O
common,O
stock,O
by,O
",",O
the,O
selling,O
stockholder,O
and,O
any,O
other,O
participating,O
person,O
.,O
,O
To,O
the,O
extent,O
applicable,O
",",O
Regulation,I-LEGISLATION/ACT
M,I-LEGISLATION/ACT
may,O
also,O
restrict,O
the,O
ability,O
of,O
any,O
person,O
engaged,O
in,O
the,O
distribution,O
of,O
the,O
shares,O
of,O
common,O
stock,O
to,O
engage,O
in,O
market-making,O
and,O
certain,O
other,O
activities,O
with,O
respect,O
to,O
the,O
shares,O
of,O
common,O
stock,O
.,O
,O
In,O
addition,O
",",O
the,O
anti-manipulation,O
rules,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
may,O
apply,O
to,O
sales,O
of,O
the,O
shares,O
of,O
common,O
stock,O
in,O
the,O
market,O
.,O
,O
All,O
of,O
the,O
foregoing,O
may,O
affect,O
the,O
marketability,O
of,O
the,O
shares,O
of,O
common,O
stock,O
and,O
the,O
ability,O
of,O
any,O
person,O
or,O
entity,O
to,O
engage,O
in,O
market-making,O
activities,O
with,O
respect,O
to,O
the,O
shares,O
of,O
common,O
stock,O
.,O
,O
We,O
have,O
agreed,O
to,O
pay,O
all,O
expenses,O
of,O
the,O
registration,O
of,O
the,O
shares,O
of,O
common,O
stock,O
pursuant,O
to,O
the,O
registration,O
rights,O
agreement,O
",",O
estimated,O
to,O
be,O
$,O
"147,315",O
in,O
total,O
",",O
including,O
",",O
without,O
limitation,O
",",O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
filing,O
fees,O
and,O
expenses,O
of,O
compliance,O
with,O
state,O
securities,O
or,O
Blue,O
Sky,O
laws,O
;,O
provided,O
",",O
however,O
",",O
SCBV,I-BUSINESS
will,O
pay,O
all,O
selling,O
commissions,O
",",O
concessions,O
and,O
discounts,O
",",O
and,O
other,O
amounts,O
payable,O
to,O
underwriters,O
",",O
dealers,O
or,O
agents,O
",",O
if,O
any,O
",",O
as,O
well,O
as,O
transfer,O
taxes,O
and,O
certain,O
other,O
expenses,O
associated,O
with,O
the,O
sale,O
of,O
the,O
shares,O
of,O
common,O
stock,O
.,O
,O
We,O
have,O
agreed,O
to,O
indemnify,O
SCBV,I-BUSINESS
and,O
certain,O
other,O
persons,O
against,O
certain,O
liabilities,O
in,O
connection,O
with,O
the,O
offering,O
of,O
shares,O
of,O
common,O
stock,O
offered,O
hereby,O
",",O
including,O
liabilities,O
arising,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
or,O
",",O
if,O
such,O
indemnity,O
is,O
unavailable,O
",",O
to,O
contribute,O
amounts,O
required,O
to,O
be,O
paid,O
in,O
respect,O
of,O
such,O
liabilities,O
.,O
,O
SCBV,I-BUSINESS
has,O
agreed,O
to,O
indemnify,O
us,O
against,O
liabilities,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
that,O
may,O
arise,O
from,O
any,O
written,O
information,O
furnished,O
to,O
us,O
by,O
SCBV,I-BUSINESS
specifically,O
for,O
use,O
in,O
this,O
prospectus,O
or,O
",",O
if,O
such,O
indemnity,O
is,O
unavailable,O
",",O
to,O
contribute,O
amounts,O
required,O
to,O
be,O
paid,O
in,O
respect,O
of,O
such,O
liabilities,O
.,O
,O
At,O
any,O
time,O
a,O
particular,O
offer,O
of,O
the,O
shares,O
of,O
common,O
stock,O
is,O
made,O
by,O
the,O
selling,O
stockholder,O
",",O
a,O
revised,O
prospectus,O
or,O
prospectus,O
supplement,O
",",O
if,O
required,O
",",O
will,O
be,O
distributed,O
.,O
,O
Such,O
prospectus,O
supplement,O
or,O
post-effective,O
amendment,O
will,O
be,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
to,O
reflect,O
the,O
disclosure,O
of,O
any,O
required,O
additional,O
information,O
with,O
respect,O
to,O
the,O
distribution,O
of,O
the,O
shares,O
of,O
common,O
stock,O
.,O
,O
We,O
may,O
suspend,O
the,O
sale,O
of,O
shares,O
by,O
the,O
selling,O
stockholder,O
pursuant,O
to,O
this,O
prospectus,O
for,O
certain,O
periods,O
of,O
time,O
for,O
certain,O
reasons,O
",",O
including,O
if,O
the,O
prospectus,O
is,O
required,O
to,O
be,O
supplemented,O
or,O
amended,O
to,O
include,O
additional,O
material,O
information,O
.,O
,O
Certain,O
legal,O
matters,O
will,O
be,O
passed,O
upon,O
for,O
us,O
by,O
Wilson,I-BUSINESS
Sonsini,I-BUSINESS
Goodrich,I-BUSINESS
&,I-BUSINESS
Rosati,I-BUSINESS
",",I-BUSINESS
Professional,I-BUSINESS
Corporation,I-BUSINESS
",",O
Seattle,I-LOCATION
",",O
Washington,I-LOCATION
.,O
,O
Additional,O
legal,O
matters,O
may,O
be,O
passed,O
on,O
for,O
us,O
",",O
or,O
any,O
underwriters,O
",",O
dealers,O
or,O
agents,O
",",O
by,O
counsel,O
that,O
we,O
will,O
name,O
in,O
the,O
applicable,O
prospectus,O
supplement,O
.,O
,O
The,O
consolidated,O
financial,O
statements,O
of,O
Oncothyreon,I-BUSINESS
Inc.,I-BUSINESS
as,O
of,O
and,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
appearing,O
in,O
Oncothyreon,I-BUSINESS
s,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
and,O
the,O
effectiveness,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
have,O
been,O
audited,O
by,O
Ernst,I-BUSINESS
&,I-BUSINESS
Young,I-BUSINESS
LLP,I-BUSINESS
",",O
independent,O
registered,O
public,O
accounting,O
firm,O
",",O
as,O
set,O
forth,O
in,O
their,O
reports,O
thereon,O
",",O
included,O
therein,O
",",O
and,O
incorporated,O
herein,O
by,O
reference,O
.,O
,O
Such,O
consolidated,O
financial,O
statements,O
are,O
incorporated,O
herein,O
by,O
reference,O
in,O
reliance,O
upon,O
such,O
reports,O
given,O
on,O
the,O
authority,O
of,O
such,O
firm,O
as,O
experts,O
in,O
accounting,O
and,O
auditing,O
.,O
,O
The,O
2008,O
and,O
2009,O
consolidated,O
financial,O
statements,O
incorporated,O
in,O
this,O
prospectus,O
by,O
reference,O
from,O
the,O
Company,O
s,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
have,O
been,O
audited,O
by,O
Deloitte,I-BUSINESS
&,I-BUSINESS
Touche,I-BUSINESS
LLP,I-BUSINESS
",",O
an,O
independent,O
registered,O
public,O
accounting,O
firm,O
",",O
as,O
stated,O
in,O
their,O
report,O
",",O
which,O
is,O
incorporated,O
herein,O
by,O
reference,O
.,O
,O
Such,O
financial,O
statements,O
have,O
been,O
so,O
incorporated,O
in,O
reliance,O
upon,O
the,O
report,O
of,O
such,O
firm,O
given,O
upon,O
their,O
authority,O
as,O
experts,O
in,O
accounting,O
and,O
auditing,O
.,O
,O
We,O
file,O
annual,O
",",O
quarterly,O
and,O
other,O
reports,O
",",O
proxy,O
statements,O
and,O
other,O
information,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
Our,O
SEC,I-GOVERNMENT
filings,O
are,O
available,O
to,O
the,O
public,O
over,O
the,O
Internet,I-MISCELLANEOUS
at,O
the,O
SEC,I-GOVERNMENT
s,O
website,O
at,O
http,O
:,O
//www.sec.gov,O
.,O
,O
You,O
may,O
also,O
read,O
and,O
copy,O
any,O
document,O
we,O
file,O
at,O
the,O
SEC,I-GOVERNMENT
s,O
Public,O
Reference,O
Room,O
at,O
100,O
F,I-LOCATION
Street,I-LOCATION
",",O
NE,I-LOCATION
",",O
Washington,I-LOCATION
",",I-LOCATION
D.C,I-LOCATION
.,I-LOCATION
,O
Please,O
call,O
the,O
SEC,I-GOVERNMENT
at,O
1-800-SEC-0330,O
for,O
further,O
information,O
on,O
the,O
Public,O
Reference,O
Room,O
.,O
,O
Our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
",",O
Quarterly,O
Reports,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
",",O
and,O
Current,O
Reports,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
",",O
including,O
any,O
amendments,O
to,O
those,O
reports,O
",",O
and,O
other,O
information,O
that,O
we,O
file,O
with,O
or,O
furnish,O
to,O
the,O
SEC,I-GOVERNMENT
pursuant,O
to,O
Section,O
13,O
(,O
a,O
),O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
can,O
also,O
be,O
accessed,O
free,O
of,O
charge,O
by,O
linking,O
directly,O
from,O
our,O
website,O
at,O
http,O
:,O
//www.oncothyreon.com,O
under,O
the,O
Investor,O
—,O
SEC,I-GOVERNMENT
Filings,O
caption,O
to,O
the,O
SEC,I-GOVERNMENT
s,O
Edgar,I-MISCELLANEOUS
Database,I-MISCELLANEOUS
.,O
,O
These,O
filings,O
will,O
be,O
available,O
as,O
soon,O
as,O
reasonably,O
practicable,O
after,O
we,O
electronically,O
file,O
such,O
material,O
with,O
",",O
or,O
furnish,O
it,O
to,O
",",O
the,O
SEC,I-GOVERNMENT
.,O
,O
Information,O
contained,O
on,O
our,O
website,O
is,O
not,O
part,O
of,O
this,O
prospectus,O
.,O
,O
The,O
SEC,I-GOVERNMENT
allows,O
us,O
to,O
incorporate,O
by,O
reference,O
the,O
information,O
we,O
file,O
with,O
it,O
",",O
which,O
means,O
that,O
we,O
can,O
disclose,O
important,O
information,O
to,O
you,O
by,O
referring,O
you,O
to,O
another,O
document,O
that,O
we,O
have,O
filed,O
separately,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
You,O
should,O
read,O
the,O
information,O
incorporated,O
by,O
reference,O
because,O
it,O
is,O
an,O
important,O
part,O
of,O
this,O
prospectus,O
.,O
,O
We,O
incorporate,O
by,O
reference,O
the,O
following,O
information,O
or,O
documents,O
that,O
we,O
have,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
(,O
excluding,O
those,O
portions,O
of,O
any,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
that,O
are,O
not,O
deemed,O
filed,O
pursuant,O
to,O
the,O
General,O
Instructions,O
of,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
),O
:,O
,O
All,O
reports,O
and,O
other,O
documents,O
we,O
subsequently,O
file,O
pursuant,O
to,O
Section,O
13,O
(,O
a,O
),O
",",O
13,O
(,O
c,O
),O
",",O
14,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
prior,O
to,O
the,O
termination,O
of,O
this,O
offering,O
",",O
including,O
all,O
such,O
documents,O
we,O
may,O
file,O
with,O
the,O
SEC,I-GOVERNMENT
after,O
the,O
date,O
of,O
the,O
initial,O
registration,O
statement,O
and,O
prior,O
to,O
the,O
effectiveness,O
of,O
the,O
registration,O
statement,O
",",O
but,O
excluding,O
any,O
information,O
furnished,O
to,O
",",O
rather,O
than,O
filed,O
with,O
",",O
the,O
SEC,I-GOVERNMENT
",",O
will,O
also,O
be,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
and,O
deemed,O
to,O
be,O
part,O
of,O
this,O
prospectus,O
from,O
the,O
date,O
of,O
the,O
filing,O
of,O
such,O
reports,O
and,O
documents,O
.,O
,O
Any,O
statement,O
contained,O
in,O
any,O
document,O
incorporated,O
by,O
reference,O
herein,O
shall,O
be,O
deemed,O
to,O
be,O
modified,O
or,O
superseded,O
for,O
purposes,O
of,O
this,O
prospectus,O
to,O
the,O
extent,O
that,O
a,O
statement,O
contained,O
in,O
this,O
prospectus,O
or,O
any,O
prospectus,O
supplement,O
modifies,O
or,O
supersedes,O
such,O
statement,O
.,O
,O
Any,O
statement,O
so,O
modified,O
or,O
superseded,O
shall,O
not,O
be,O
deemed,O
",",O
except,O
as,O
so,O
modified,O
or,O
superseded,O
",",O
to,O
constitute,O
a,O
part,O
of,O
this,O
prospectus,O
.,O
,O
We,O
will,O
provide,O
without,O
charge,O
to,O
each,O
person,O
",",O
including,O
any,O
beneficial,O
owner,O
",",O
to,O
whom,O
this,O
prospectus,O
is,O
delivered,O
",",O
upon,O
written,O
or,O
oral,O
request,O
",",O
a,O
copy,O
of,O
any,O
or,O
all,O
documents,O
that,O
are,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
",",O
but,O
not,O
delivered,O
with,O
the,O
prospectus,O
",",O
other,O
than,O
exhibits,O
to,O
such,O
documents,O
unless,O
such,O
exhibits,O
are,O
specifically,O
incorporated,O
by,O
reference,O
into,O
the,O
documents,O
that,O
this,O
prospectus,O
incorporates,O
.,O
,O
You,O
should,O
direct,O
written,O
requests,O
to,O
:,O
Oncothyreon,I-BUSINESS
Inc.,I-BUSINESS
",",O
2601,O
Fourth,I-LOCATION
Avenue,I-LOCATION
",",O
Suite,O
500,O
",",O
Seattle,I-LOCATION
",",O
Washington,I-LOCATION
98121,O
",",O
or,O
you,O
may,O
call,O
us,O
at,O
(,O
206,O
),O
801-2100,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
the,O
various,O
costs,O
and,O
expenses,O
(,O
other,O
than,O
the,O
underwriting,O
discounts,O
and,O
commissions,O
),O
payable,O
by,O
the,O
company,O
in,O
connection,O
with,O
a,O
distribution,O
of,O
securities,O
registered,O
hereby,O
.,O
,O
All,O
amounts,O
are,O
estimates,O
except,O
the,O
SEC,I-GOVERNMENT
registration,O
fee,O
.,O
,O
Section,O
145,O
of,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
authorizes,O
a,O
corporation,O
s,O
board,O
of,O
directors,O
to,O
grant,O
",",O
and,O
authorizes,O
a,O
court,O
to,O
award,O
",",O
indemnity,O
to,O
officers,O
",",O
directors,O
and,O
other,O
corporate,O
agents,O
.,O
,O
As,O
permitted,O
by,O
Section,O
102,O
(,O
b,O
),O
(,O
7,O
),O
of,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
s,O
certificate,O
of,O
incorporation,O
includes,O
provisions,O
that,O
eliminate,O
the,O
personal,O
liability,O
of,O
its,O
directors,O
and,O
officers,O
for,O
monetary,O
damages,O
for,O
breach,O
of,O
their,O
fiduciary,O
duty,O
as,O
directors,O
and,O
officers,O
.,O
,O
In,O
addition,O
",",O
as,O
permitted,O
by,O
Section,O
145,O
of,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
",",O
the,O
certificate,O
of,O
incorporation,O
and,O
bylaws,O
of,O
the,O
Registrant,O
provide,O
that,O
:,O
,O
These,O
indemnification,O
provisions,O
and,O
the,O
indemnification,O
agreements,O
entered,O
into,O
between,O
the,O
Registrant,O
and,O
its,O
officers,O
and,O
directors,O
may,O
be,O
sufficiently,O
broad,O
to,O
permit,O
indemnification,O
of,O
the,O
Registrant,O
s,O
officers,O
and,O
directors,O
for,O
liabilities,O
(,O
including,O
reimbursement,O
of,O
expenses,O
incurred,O
),O
arising,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Exhibits,O
and,O
Financial,O
Statement,O
Schedules,O
.,O
,O
The,O
following,O
exhibits,O
are,O
filed,O
herewith,O
or,O
are,O
incorporated,O
by,O
reference,O
to,O
exhibits,O
previously,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
:,O
,O
(,O
b,O
),O
Financial,O
Statement,O
Schedules,O
.,O
,O
No,O
financial,O
statement,O
schedules,O
are,O
provided,O
because,O
they,O
are,O
inapplicable,O
or,O
the,O
requested,O
information,O
is,O
shown,O
in,O
the,O
consolidated,O
financial,O
statements,O
of,O
the,O
registrant,O
or,O
related,O
notes,O
thereto,O
included,O
in,O
the,O
registrant,O
s,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
filed,O
with,O
the,O
SEC,I-GOVERNMENT
on,O
March,O
14,O
",",O
2011,O
.,O
,O
(,O
a,O
),O
The,O
undersigned,O
registrant,O
hereby,O
undertakes,O
:,O
,O
(,O
1,O
),O
To,O
file,O
",",O
during,O
any,O
period,O
in,O
which,O
offers,O
or,O
sales,O
are,O
being,O
made,O
",",O
a,O
post-effective,O
amendment,O
to,O
this,O
registration,O
statement,O
:,O
,O
(,O
i,O
),O
to,O
include,O
any,O
prospectus,O
required,O
by,O
section,O
10,O
(,O
a,O
),O
(,O
3,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
;,O
,O
(,O
ii,O
),O
to,O
reflect,O
in,O
the,O
prospectus,O
any,O
facts,O
or,O
events,O
arising,O
after,O
the,O
effective,O
date,O
of,O
the,O
registration,O
statement,O
(,O
or,O
the,O
most,O
recent,O
post-effective,O
amendment,O
thereof,O
),O
which,O
",",O
individually,O
or,O
in,O
the,O
aggregate,O
",",O
represent,O
a,O
fundamental,O
change,O
in,O
the,O
information,O
set,O
forth,O
in,O
the,O
registration,O
statement,O
.,O
,O
(,O
iii,O
),O
to,O
include,O
any,O
material,O
information,O
with,O
respect,O
to,O
the,O
plan,O
of,O
distribution,O
not,O
previously,O
disclosed,O
in,O
the,O
registration,O
statement,O
or,O
any,O
material,O
change,O
to,O
such,O
information,O
in,O
the,O
registration,O
statement,O
.,O
,O
provided,O
",",O
however,O
",",O
that,O
paragraphs,O
(,O
l,O
),O
(,O
i,O
),O
",",O
(,O
l,O
),O
(,O
ii,O
),O
and,O
(,O
l,O
),O
(,O
iii,O
),O
do,O
not,O
apply,O
if,O
the,O
information,O
required,O
to,O
be,O
included,O
in,O
a,O
post-effective,O
amendment,O
by,O
those,O
paragraphs,O
is,O
contained,O
in,O
periodic,O
reports,O
filed,O
with,O
or,O
furnished,O
to,O
the,O
SEC,I-GOVERNMENT
by,O
the,O
registrant,O
pursuant,O
to,O
Section,O
13,O
or,O
Section,O
15,O
(,O
d,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
that,O
are,O
incorporated,O
by,O
reference,O
in,O
the,O
registration,O
statement,O
",",O
or,O
is,O
contained,O
in,O
a,O
form,O
of,O
prospectus,O
filed,O
pursuant,O
to,O
Rule,O
424,O
(,O
b,O
),O
that,O
is,O
part,O
of,O
the,O
registration,O
statement,O
.,O
,O
securities,O
offered,O
therein,O
",",O
and,O
the,O
offering,O
of,O
such,O
securities,O
at,O
that,O
time,O
shall,O
be,O
deemed,O
to,O
be,O
the,O
initial,O
bona,O
fide,O
offering,O
thereof,O
.,O
,O
(,O
3,O
),O
To,O
remove,O
from,O
registration,O
by,O
means,O
of,O
a,O
post-effective,O
amendment,O
any,O
of,O
the,O
securities,O
being,O
registered,O
which,O
remain,O
unsold,O
at,O
the,O
termination,O
of,O
the,O
offering,O
.,O
,O
(,O
4,O
),O
That,O
",",O
for,O
the,O
purpose,O
of,O
determining,O
liability,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
to,O
any,O
purchaser,O
:,O
,O
(,O
ii,O
),O
Each,O
prospectus,O
required,O
to,O
be,O
filed,O
pursuant,O
to,O
Rule,O
424,O
(,O
b,O
),O
(,O
2,O
),O
",",O
(,O
b,O
),O
(,O
5,O
),O
or,O
(,O
b,O
),O
(,O
7,O
),O
as,O
part,O
of,O
a,O
registration,O
statement,O
in,O
reliance,O
on,O
Rule,O
430B,O
relating,O
to,O
an,O
offering,O
made,O
pursuant,O
to,O
Rule,O
415,O
(,O
a,O
),O
(,O
l,O
),O
(,O
i,O
),O
",",O
(,O
vii,O
),O
or,O
(,O
x,O
),O
for,O
the,O
purpose,O
of,O
providing,O
the,O
information,O
required,O
by,O
Section,O
10,O
(,O
a,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
shall,O
be,O
deemed,O
to,O
be,O
part,O
of,O
and,O
included,O
in,O
the,O
registration,O
statement,O
as,O
of,O
the,O
earlier,O
of,O
the,O
date,O
such,O
form,O
of,O
prospectus,O
is,O
first,O
used,O
after,O
effectiveness,O
or,O
the,O
date,O
of,O
the,O
first,O
contract,O
of,O
sale,O
of,O
securities,O
in,O
the,O
offering,O
described,O
in,O
the,O
prospectus,O
.,O
,O
As,O
provided,O
in,O
Rule,O
430B,O
",",O
for,O
liability,O
purposes,O
of,O
the,O
issuer,O
and,O
any,O
person,O
that,O
is,O
at,O
that,O
date,O
an,O
underwriter,O
",",O
such,O
date,O
shall,O
be,O
deemed,O
to,O
be,O
a,O
new,O
effective,O
date,O
of,O
the,O
registration,O
statement,O
relating,O
to,O
the,O
securities,O
in,O
the,O
registration,O
statement,O
to,O
which,O
that,O
prospectus,O
relates,O
",",O
and,O
the,O
offering,O
of,O
such,O
securities,O
at,O
that,O
time,O
shall,O
be,O
deemed,O
to,O
be,O
the,O
initial,O
bona,O
fide,O
offering,O
thereof,O
.,O
,O
Provided,O
",",O
however,O
",",O
that,O
no,O
statement,O
made,O
in,O
a,O
registration,O
statement,O
or,O
prospectus,O
that,O
is,O
part,O
of,O
the,O
registration,O
statement,O
or,O
made,O
in,O
a,O
document,O
incorporated,O
or,O
deemed,O
incorporated,O
by,O
reference,O
into,O
the,O
registration,O
statement,O
or,O
prospectus,O
that,O
is,O
part,O
of,O
the,O
registration,O
statement,O
will,O
",",O
as,O
to,O
a,O
purchaser,O
with,O
a,O
time,O
of,O
contract,O
of,O
sale,O
prior,O
to,O
such,O
effective,O
date,O
",",O
supersede,O
or,O
modify,O
any,O
statement,O
that,O
was,O
made,O
in,O
the,O
registration,O
statement,O
or,O
prospectus,O
that,O
was,O
part,O
of,O
the,O
registration,O
statement,O
or,O
made,O
in,O
any,O
such,O
document,O
immediately,O
prior,O
to,O
such,O
effective,O
date,O
.,O
,O
(,O
5,O
),O
That,O
",",O
for,O
the,O
purpose,O
of,O
determining,O
liability,O
of,O
the,O
registrant,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
to,O
any,O
purchaser,O
in,O
the,O
initial,O
distribution,O
of,O
the,O
securities,O
",",O
the,O
undersigned,O
registrant,O
undertakes,O
that,O
in,O
a,O
primary,O
offering,O
of,O
securities,O
of,O
the,O
undersigned,O
registrant,O
pursuant,O
to,O
this,O
registration,O
statement,O
",",O
regardless,O
of,O
the,O
underwriting,O
method,O
used,O
to,O
sell,O
the,O
securities,O
to,O
the,O
purchaser,O
",",O
if,O
the,O
securities,O
are,O
offered,O
or,O
sold,O
to,O
such,O
purchaser,O
by,O
means,O
of,O
any,O
of,O
the,O
following,O
communications,O
",",O
the,O
undersigned,O
registrant,O
will,O
be,O
a,O
seller,O
to,O
the,O
purchaser,O
and,O
will,O
be,O
considered,O
to,O
offer,O
or,O
sell,O
such,O
securities,O
to,O
such,O
purchaser,O
:,O
,O
(,O
i,O
),O
Any,O
preliminary,O
prospectus,O
or,O
prospectus,O
of,O
the,O
undersigned,O
registrant,O
relating,O
to,O
the,O
offering,O
required,O
to,O
be,O
filed,O
pursuant,O
to,O
Rule,O
424,O
;,O
,O
(,O
ii,O
),O
Any,O
free,O
writing,O
prospectus,O
relating,O
to,O
the,O
offering,O
prepared,O
by,O
or,O
on,O
behalf,O
of,O
the,O
undersigned,O
registrant,O
or,O
used,O
or,O
referred,O
to,O
by,O
the,O
undersigned,O
registrant,O
;,O
,O
(,O
iv,O
),O
Any,O
other,O
communication,O
that,O
is,O
an,O
offer,O
in,O
the,O
offering,O
made,O
by,O
the,O
undersigned,O
registrant,O
to,O
the,O
purchaser,O
.,O
,O
(,O
b,O
),O
That,O
",",O
for,O
purposes,O
of,O
determining,O
any,O
liability,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
each,O
filing,O
of,O
the,O
Registrant,O
s,O
annual,O
report,O
pursuant,O
to,O
Section,O
13,O
(,O
a,O
),O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
(,O
and,O
",",O
where,O
applicable,O
",",O
each,O
filing,O
of,O
an,O
employee,O
benefit,O
plan,O
s,O
annual,O
report,O
pursuant,O
to,O
Section,O
15,O
(,O
d,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
),O
that,O
is,O
incorporated,O
by,O
reference,O
in,O
this,O
Registration,O
Statement,O
shall,O
be,O
deemed,O
to,O
be,O
a,O
new,O
registration,O
statement,O
relating,O
to,O
the,O
securities,O
offered,O
therein,O
",",O
and,O
the,O
offering,O
of,O
such,O
securities,O
at,O
that,O
time,O
shall,O
be,O
deemed,O
to,O
be,O
the,O
initial,O
bona,O
fide,O
offering,O
thereof,O
.,O
,O
(,O
c,O
),O
Insofar,O
as,O
indemnification,O
for,O
liabilities,O
arising,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
may,O
be,O
permitted,O
to,O
directors,O
",",O
officers,O
and,O
controlling,O
persons,O
of,O
the,O
registrant,O
pursuant,O
to,O
the,O
foregoing,O
provisions,O
",",O
or,O
otherwise,O
",",O
the,O
registrant,O
has,O
been,O
advised,O
that,O
in,O
the,O
opinion,O
of,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
such,O
indemnification,O
is,O
against,O
public,O
policy,O
as,O
expressed,O
in,O
the,O
Act,O
and,O
is,O
",",O
therefore,O
",",O
unenforceable,O
.,O
,O
In,O
the,O
event,O
that,O
a,O
claim,O
for,O
indemnification,O
against,O
such,O
liabilities,O
(,O
other,O
than,O
the,O
payment,O
by,O
the,O
registrant,O
of,O
expenses,O
incurred,O
or,O
paid,O
by,O
a,O
director,O
",",O
officer,O
or,O
controlling,O
person,O
of,O
the,O
registrant,O
in,O
the,O
successful,O
defense,O
of,O
any,O
action,O
",",O
suit,O
or,O
proceeding,O
),O
is,O
asserted,O
by,O
such,O
director,O
officer,O
or,O
controlling,O
person,O
in,O
connection,O
with,O
the,O
securities,O
being,O
registered,O
",",O
the,O
registrant,O
will,O
",",O
unless,O
in,O
the,O
opinion,O
of,O
its,O
counsel,O
the,O
matter,O
has,O
been,O
settled,O
by,O
controlling,O
precedent,O
",",O
submit,O
to,O
a,O
court,O
of,O
appropriate,O
jurisdiction,O
the,O
question,O
whether,O
such,O
indemnification,O
by,O
it,O
is,O
against,O
public,O
policy,O
as,O
expressed,O
in,O
the,O
Act,O
and,O
will,O
be,O
governed,O
by,O
the,O
final,O
adjudication,O
of,O
such,O
issue,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
registrant,O
certifies,O
that,O
it,O
has,O
reasonable,O
grounds,O
to,O
believe,O
that,O
it,O
meets,O
all,O
of,O
the,O
requirements,O
for,O
filing,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
and,O
has,O
duly,O
caused,O
this,O
Registration,O
Statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
in,O
the,O
City,I-LOCATION
of,I-LOCATION
Seattle,I-LOCATION
",",O
State,I-LOCATION
of,I-LOCATION
Washington,I-LOCATION
",",O
on,O
April,O
1,O
",",O
2011,O
.,O
,O
KNOW,O
ALL,O
PERSONS,O
BY,O
THESE,O
PRESENTS,O
",",O
that,O
each,O
person,O
whose,O
signature,O
appears,O
below,O
constitutes,O
and,O
appoints,O
Robert,I-PERSON
L.,I-PERSON
Kirkman,I-PERSON
and,O
Julia,I-PERSON
M.,I-PERSON
Eastland,I-PERSON
and,O
each,O
of,O
them,O
",",O
his,O
or,O
her,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
with,O
full,O
power,O
of,O
substitution,O
and,O
resubstitution,O
",",O
for,O
him,O
or,O
her,O
and,O
in,O
his,O
or,O
her,O
name,O
",",O
place,O
and,O
stead,O
",",O
in,O
any,O
and,O
all,O
capacities,O
",",O
to,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
pre,O
and,O
post-effective,O
amendments,O
),O
to,O
this,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
to,O
file,O
the,O
same,O
with,O
all,O
exhibits,O
thereto,O
",",O
and,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
and,O
agents,O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
and,O
necessary,O
to,O
be,O
done,O
",",O
as,O
fully,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
he,O
or,O
she,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
hereby,O
ratifying,O
and,O
confirming,O
all,O
that,O
each,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
or,O
their,O
substitute,O
or,O
substitutes,O
may,O
lawfully,O
do,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Ladies,O
and,O
Gentlemen,O
:,O
,O
We,O
have,O
acted,O
as,O
counsel,O
to,O
Oncothyreon,I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
corporation,O
(,O
the,O
Company,O
),O
",",O
in,O
connection,O
with,O
the,O
registration,O
of,O
the,O
resale,O
",",O
from,O
time,O
to,O
time,O
",",O
of,O
up,O
to,O
"5,150,680",O
shares,O
(,O
the,O
Shares,O
),O
of,O
the,O
Company,O
s,O
common,O
stock,O
",",O
$,O
0.0001,O
par,O
value,O
per,O
share,O
(,O
the,O
Common,O
Stock,O
),O
",",O
issued,O
or,O
issuable,O
to,O
the,O
selling,O
stockholder,O
(,O
the,O
Selling,O
Stockholder,O
),O
named,O
in,O
the,O
prospectus,O
that,O
forms,O
a,O
part,O
of,O
the,O
Company,O
s,O
Registration,O
Statement,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
filed,O
on,O
the,O
date,O
hereof,O
(,O
the,O
Registration,O
Statement,O
),O
.,O
,O
The,O
Shares,O
include,O
(,O
i,O
),O
"59,921",O
shares,O
of,O
Common,O
Stock,O
(,O
the,O
Commitment,O
Shares,O
),O
issued,O
to,O
the,O
Selling,O
Stockholder,O
pursuant,O
to,O
that,O
certain,O
Common,O
Stock,O
Purchase,O
Agreement,O
",",O
dated,O
as,O
of,O
July,O
6,O
",",O
2010,O
",",O
by,O
and,O
between,O
the,O
Company,O
and,O
Small,I-BUSINESS
Cap,I-BUSINESS
Biotech,I-BUSINESS
Value,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
(,O
the,O
Purchase,O
Agreement,O
),O
",",O
and,O
(,O
ii,O
),O
up,O
to,O
"5,090,759",O
shares,O
of,O
Common,O
Stock,O
(,O
the,O
Agreement,O
Shares,O
),O
that,O
may,O
be,O
issued,O
upon,O
the,O
terms,O
and,O
subject,O
to,O
the,O
conditions,O
set,O
forth,O
in,O
the,O
Purchase,O
Agreement,O
.,O
,O
We,O
have,O
examined,O
copies,O
of,O
the,O
Purchase,O
Agreement,O
",",O
the,O
Registration,O
Rights,O
Agreement,O
",",O
dated,O
as,O
of,O
July,O
6,O
",",O
2010,O
",",O
by,O
and,O
between,O
the,O
Company,O
and,O
the,O
Selling,O
Stockholder,O
",",O
the,O
Registration,O
Statement,O
",",O
and,O
the,O
prospectus,O
that,O
forms,O
a,O
part,O
thereof,O
.,O
,O
We,O
have,O
also,O
examined,O
instruments,O
",",O
documents,O
and,O
records,O
which,O
we,O
deemed,O
relevant,O
and,O
necessary,O
for,O
the,O
basis,O
of,O
our,O
opinions,O
hereinafter,O
expressed,O
.,O
,O
In,O
such,O
examination,O
",",O
we,O
have,O
assumed,O
(,O
i,O
),O
the,O
authenticity,O
of,O
original,O
documents,O
and,O
the,O
genuineness,O
of,O
all,O
signatures,O
",",O
(,O
ii,O
),O
the,O
conformity,O
to,O
the,O
originals,O
of,O
all,O
documents,O
submitted,O
to,O
us,O
as,O
copies,O
",",O
and,O
(,O
iii,O
),O
the,O
truth,O
",",O
accuracy,O
",",O
and,O
completeness,O
of,O
the,O
information,O
",",O
representations,O
and,O
warranties,O
contained,O
in,O
the,O
records,O
",",O
documents,O
",",O
instruments,O
and,O
certificates,O
we,O
have,O
reviewed,O
.,O
,O
Based,O
on,O
and,O
subject,O
to,O
the,O
foregoing,O
",",O
we,O
are,O
of,O
the,O
opinion,O
that,O
:,O
,O
We,O
express,O
no,O
opinion,O
as,O
to,O
the,O
laws,O
of,O
any,O
other,O
jurisdiction,O
other,O
than,O
the,O
federal,O
laws,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
and,O
the,O
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
the,I-LEGISLATION/ACT
State,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Delaware,I-LEGISLATION/ACT
.,O
,O
We,O
consent,O
to,O
the,O
use,O
of,O
this,O
opinion,O
as,O
an,O
exhibit,O
to,O
the,O
Registration,O
Statement,O
",",O
and,O
we,O
consent,O
to,O
the,O
reference,O
of,O
our,O
name,O
under,O
the,O
caption,O
Legal,O
Matters,O
in,O
the,O
prospectus,O
that,O
forms,O
a,O
part,O
of,O
the,O
Registration,O
Statement,O
.,O
,O
In,O
giving,O
such,O
consent,O
",",O
we,O
do,O
not,O
thereby,O
admit,O
that,O
we,O
are,O
in,O
the,O
category,O
of,O
persons,O
whose,O
consent,O
is,O
required,O
under,O
Section,O
7,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
/s/,O
Wilson,I-BUSINESS
Sonsini,I-BUSINESS
Goodrich,I-BUSINESS
&,I-BUSINESS
Rosati,I-BUSINESS
",",I-BUSINESS
P.C,I-BUSINESS
.,I-BUSINESS
,O
We,O
consent,O
to,O
the,O
reference,O
to,O
our,O
firm,O
under,O
the,O
caption,O
Experts,O
in,O
the,O
Registration,O
Statement,O
(,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
),O
and,O
related,O
Prospectus,O
of,O
Oncothyreon,I-BUSINESS
Inc.,I-BUSINESS
for,O
the,O
registration,O
of,O
"5,150,680",O
shares,O
of,O
its,O
common,O
stock,O
and,O
to,O
the,O
incorporation,O
by,O
reference,O
therein,O
of,O
our,O
reports,O
dated,O
March,O
14,O
",",O
2011,O
",",O
with,O
respect,O
to,O
the,O
consolidated,O
financial,O
statements,O
of,O
Oncothyreon,I-BUSINESS
Inc.,I-BUSINESS
",",O
and,O
the,O
effectiveness,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
of,O
Oncothyreon,I-BUSINESS
Inc.,I-BUSINESS
",",O
included,O
in,O
its,O
Annual,O
Report,O
(,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
),O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
.,O
,O
We,O
consent,O
to,O
the,O
incorporation,O
by,O
reference,O
in,O
this,O
Registration,O
Statement,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
of,O
our,O
report,O
dated,O
May,O
5,O
",",O
2010,O
",",O
relating,O
to,O
the,O
2008,O
and,O
2009,O
consolidated,O
financial,O
statements,O
of,O
Oncothyreon,I-BUSINESS
Inc.,I-BUSINESS
and,O
subsidiaries,O
",",O
appearing,O
in,O
the,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
of,O
Oncothyreon,I-BUSINESS
Inc.,I-BUSINESS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
and,O
to,O
the,O
reference,O
to,O
us,O
under,O
the,O
heading,O
Experts,O
in,O
the,O
Prospectus,O
",",O
which,O
is,O
part,O
of,O
this,O
Registration,O
Statement,O
.,O
,O
-DOCSTART-,O
,O
UNITED,I-GOVERNMENT
STATES,I-GOVERNMENT
SECURITIES,I-GOVERNMENT
AND,I-GOVERNMENT
EXCHANGE,I-GOVERNMENT
COMMISSION,I-GOVERNMENT
Washington,I-LOCATION
",",I-LOCATION
D.C,I-LOCATION
.,I-LOCATION
,O
Indicate,O
by,O
check,O
mark,O
if,O
the,O
registrant,O
is,O
a,O
well-known,O
seasoned,O
issuer,O
",",O
as,O
defined,O
in,O
Rule,O
405,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Indicate,O
by,O
check,O
mark,O
if,O
the,O
registrant,O
is,O
not,O
required,O
to,O
file,O
reports,O
pursuant,O
to,O
Section,O
13,O
or,O
Section,O
15,O
(,O
d,O
),O
of,O
the,O
Act,O
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
(,O
1,O
),O
has,O
filed,O
all,O
reports,O
required,O
to,O
be,O
filed,O
by,O
Section,O
13,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
during,O
the,O
past,O
12,O
months,O
(,O
or,O
for,O
such,O
shorter,O
period,O
that,O
the,O
registrant,O
was,O
required,O
to,O
file,O
such,O
reports,O
),O
",",O
and,O
(,O
2,O
),O
has,O
been,O
subject,O
to,O
such,O
filing,O
requirements,O
for,O
the,O
past,O
90,O
days,O
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
has,O
submitted,O
electronically,O
and,O
posted,O
on,O
its,O
corporate,O
Web,O
site,O
",",O
if,O
any,O
",",O
every,O
Interactive,O
Data,O
File,O
required,O
to,O
be,O
submitted,O
and,O
posted,O
pursuant,O
to,O
Rule,O
405,O
of,O
Regulation,I-LEGISLATION/ACT
S-T,I-LEGISLATION/ACT
(,O
§,O
232.405,O
of,O
this,O
chapter,O
),O
during,O
the,O
preceding,O
12,O
months,O
(,O
or,O
for,O
such,O
shorter,O
period,O
that,O
the,O
registrant,O
was,O
required,O
to,O
submit,O
and,O
post,O
such,O
files,O
),O
.,O
,O
Indicate,O
by,O
check,O
mark,O
if,O
disclosure,O
of,O
delinquent,O
filers,O
pursuant,O
to,O
Item,O
405,O
of,O
Regulation,I-LEGISLATION/ACT
S-K,I-LEGISLATION/ACT
(,O
§229.405,O
of,O
this,O
chapter,O
),O
is,O
not,O
contained,O
herein,O
",",O
and,O
will,O
not,O
be,O
contained,O
",",O
to,O
the,O
best,O
of,O
registrant,O
s,O
knowledge,O
",",O
in,O
definitive,O
proxy,O
or,O
information,O
statement,O
incorporated,O
by,O
reference,O
in,O
Part,O
III,O
of,O
this,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
or,O
any,O
amendment,O
to,O
this,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
large,O
accelerated,O
filer,O
",",O
an,O
accelerated,O
filer,O
",",O
a,O
non-accelerated,O
filer,O
",",O
or,O
a,O
smaller,O
reporting,O
company,O
.,O
,O
See,O
the,O
definitions,O
of,O
large,O
accelerated,O
filer,O
",",O
accelerated,O
filer,O
and,O
smaller,O
reporting,O
company,O
in,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-MISCELLANEOUS
Act,I-MISCELLANEOUS
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
shell,O
company,O
(,O
as,O
defined,O
in,O
Rule,O
12b-2,O
of,O
the,O
Act,O
),O
.,O
,O
The,O
estimated,O
aggregate,O
market,O
value,O
of,O
the,O
Common,O
Stock,O
held,O
by,O
non-affiliates,O
(,O
shareholders,O
holding,O
less,O
than,O
5,O
%,O
of,O
an,O
outstanding,O
class,O
of,O
stock,O
",",O
excluding,O
directors,O
and,O
executive,O
officers,O
),O
of,O
the,O
Company,O
on,O
June,O
30,O
",",O
2009,O
was,O
$,O
"65,826,720",O
.,O
,O
This,O
calculation,O
is,O
based,O
upon,O
an,O
estimate,O
of,O
the,O
fair,O
market,O
value,O
of,O
the,O
Common,O
Stock,O
of,O
$,O
20.00,O
per,O
share,O
",",O
which,O
was,O
the,O
price,O
of,O
the,O
last,O
several,O
trades,O
of,O
which,O
management,O
is,O
aware,O
prior,O
to,O
this,O
date,O
.,O
,O
Because,O
there,O
is,O
not,O
an,O
active,O
trading,O
market,O
for,O
the,O
Common,O
Stock,O
",",O
we,O
have,O
used,O
our,O
book,O
value,O
of,O
$,O
12.41,O
as,O
of,O
June,O
30,O
",",O
2009,O
to,O
calculate,O
our,O
public,O
float,O
.,O
,O
The,O
number,O
of,O
shares,O
outstanding,O
of,O
the,O
issuer,O
s,O
common,O
stock,O
",",O
as,O
of,O
March,O
1,O
",",O
2010,O
was,O
"3,787,170",O
.,O
,O
This,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K/A,I-MISCELLANEOUS
(,O
Form,I-MISCELLANEOUS
10-K/A,I-MISCELLANEOUS
),O
is,O
being,O
filed,O
as,O
Amendment,O
No.,O
1,O
(,O
this,O
Amendment,O
),O
to,O
the,O
Registrant,O
s,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
(,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
),O
for,O
the,O
fiscal,O
year,O
ended,O
December,O
31,O
",",O
2009,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
on,O
March,O
18,O
",",O
2010,O
.,O
,O
This,O
Amendment,O
is,O
being,O
filed,O
to,O
correct,O
an,O
inadvertent,O
typographical,O
error,O
in,O
the,O
Selected,O
Financial,O
Data,O
table,O
of,O
Exhibit,O
13,O
",",O
which,O
incorrectly,O
referred,O
to,O
net,O
income,O
—,O
basic,O
of,O
$,O
0.44,O
per,O
share,O
as,O
opposed,O
to,O
net,O
income,O
—,O
basic,O
of,O
$,O
(,O
0.44,O
),O
per,O
share,O
.,O
,O
Pursuant,O
to,O
Rule,O
12b-15,O
promulgated,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
filed,O
with,O
this,O
Amendment,O
is,O
Exhibit,O
13,O
with,O
the,O
corrected,O
net,O
income,O
—,O
basic,O
of,O
$,O
(,O
0.44,O
),O
per,O
share,O
.,O
,O
This,O
Amendment,O
does,O
not,O
affect,O
any,O
other,O
parts,O
of,O
",",O
or,O
exhibits,O
to,O
the,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
",",O
and,O
those,O
unaffected,O
parts,O
or,O
exhibits,O
are,O
not,O
included,O
in,O
this,O
Amendment,O
.,O
,O
Except,O
as,O
expressly,O
stated,O
in,O
this,O
Amendment,O
",",O
the,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
continues,O
to,O
speak,O
as,O
of,O
the,O
date,O
of,O
the,O
original,O
filing,O
of,O
the,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
",",O
and,O
we,O
have,O
not,O
updated,O
the,O
disclosure,O
contained,O
in,O
the,O
Amendment,O
to,O
reflect,O
events,O
that,O
have,O
occurred,O
since,O
the,O
filing,O
of,O
the,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
.,O
,O
Accordingly,O
",",O
this,O
Amendment,O
must,O
be,O
read,O
in,O
conjunction,O
with,O
our,O
other,O
filings,O
",",O
if,O
any,O
",",O
made,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
subsequent,O
to,O
the,O
filing,O
of,O
the,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
",",O
including,O
amendments,O
to,O
those,O
filings,O
",",O
if,O
any,O
.,O
,O
In,O
accordance,O
with,O
Section,O
13,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
.,O
,O
James,I-PERSON
R.,I-PERSON
Clarkson,I-PERSON
",",O
President,O
&,O
,O
-DOCSTART-,O
,O
Plan,O
Participants,O
and,O
the,O
Corporate,O
Benefits,O
Committee,O
of,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
&,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
We,O
have,O
audited,O
the,O
accompanying,O
statements,O
of,O
net,O
assets,O
available,O
for,O
benefits,O
of,O
the,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
&,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
(,O
the,O
Plan,O
),O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
and,O
the,O
related,O
statement,O
of,O
changes,O
in,O
net,O
assets,O
available,O
for,O
benefits,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
These,O
financial,O
statements,O
are,O
the,O
responsibility,O
of,O
the,O
Plan,O
s,O
management,O
.,O
,O
Our,O
responsibility,O
is,O
to,O
express,O
an,O
opinion,O
on,O
these,O
financial,O
statements,O
based,O
on,O
our,O
audits,O
.,O
,O
We,O
conducted,O
our,O
audits,O
in,O
accordance,O
with,O
the,O
standards,O
of,O
the,O
Public,I-GOVERNMENT
Company,I-GOVERNMENT
Accounting,I-GOVERNMENT
Oversight,I-GOVERNMENT
Board,I-GOVERNMENT
(,I-GOVERNMENT
United,I-GOVERNMENT
States,I-GOVERNMENT
),I-GOVERNMENT
.,O
,O
Those,O
standards,O
require,O
that,O
we,O
plan,O
and,O
perform,O
the,O
audit,O
to,O
obtain,O
reasonable,O
assurance,O
about,O
whether,O
the,O
financial,O
statements,O
are,O
free,O
of,O
material,O
misstatement,O
.,O
,O
An,O
audit,O
includes,O
consideration,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
a,O
basis,O
for,O
designing,O
audit,O
procedures,O
that,O
are,O
appropriate,O
in,O
the,O
circumstances,O
",",O
but,O
not,O
for,O
the,O
purpose,O
of,O
expressing,O
an,O
opinion,O
on,O
the,O
effectiveness,O
of,O
the,O
Plan,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
Accordingly,O
",",O
we,O
express,O
no,O
such,O
opinion,O
.,O
,O
An,O
audit,O
includes,O
examining,O
",",O
on,O
a,O
test,O
basis,O
",",O
evidence,O
supporting,O
the,O
amounts,O
and,O
disclosures,O
in,O
the,O
financial,O
statements,O
.,O
,O
An,O
audit,O
also,O
includes,O
assessing,O
the,O
accounting,O
principles,O
used,O
and,O
significant,O
estimates,O
made,O
by,O
management,O
",",O
as,O
well,O
as,O
evaluating,O
the,O
overall,O
financial,O
statement,O
presentation,O
.,O
,O
We,O
believe,O
that,O
our,O
audits,O
provide,O
a,O
reasonable,O
basis,O
for,O
our,O
opinion,O
.,O
,O
In,O
our,O
opinion,O
",",O
the,O
financial,O
statements,O
referred,O
to,O
above,O
present,O
fairly,O
",",O
in,O
all,O
material,O
respects,O
",",O
the,O
net,O
assets,O
available,O
for,O
benefits,O
of,O
the,O
Plan,O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
and,O
the,O
changes,O
in,O
net,O
assets,O
available,O
for,O
benefits,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
in,O
conformity,O
with,O
U.S.,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
.,O
,O
Our,O
audits,O
were,O
performed,O
for,O
the,O
purpose,O
of,O
forming,O
an,O
opinion,O
on,O
the,O
basic,O
financial,O
statements,O
taken,O
as,O
a,O
whole,O
.,O
,O
The,O
accompanying,O
supplemental,O
schedule,O
of,O
assets,O
as,O
of,O
December,O
31,O
",",O
2010,O
is,O
presented,O
for,O
the,O
purpose,O
of,O
additional,O
analysis,O
and,O
is,O
not,O
a,O
required,O
part,O
of,O
the,O
basic,O
financial,O
statements,O
but,O
is,O
supplementary,O
information,O
required,O
by,O
the,O
Department,I-GOVERNMENT
of,I-GOVERNMENT
Labor,I-GOVERNMENT
s,O
Rules,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Regulations,I-LEGISLATION/ACT
for,I-LEGISLATION/ACT
Reporting,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Disclosure,I-LEGISLATION/ACT
under,O
the,O
Employee,I-LEGISLATION/ACT
Retirement,I-LEGISLATION/ACT
Income,I-LEGISLATION/ACT
Security,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1974,I-LEGISLATION/ACT
.,O
,O
The,O
supplemental,O
schedule,O
is,O
the,O
responsibility,O
of,O
the,O
Plan,O
s,O
management,O
.,O
,O
The,O
supplemental,O
schedule,O
has,O
been,O
subjected,O
to,O
the,O
auditing,O
procedures,O
applied,O
in,O
our,O
audits,O
of,O
the,O
basic,O
financial,O
statements,O
and,O
",",O
in,O
our,O
opinion,O
",",O
is,O
fairly,O
stated,O
in,O
all,O
material,O
respects,O
in,O
relation,O
to,O
the,O
basic,O
financial,O
statements,O
taken,O
as,O
a,O
whole,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
The,O
following,O
description,O
of,O
the,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
&,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
(,O
the,O
Plan,O
),O
is,O
provided,O
for,O
general,O
information,O
purposes,O
only,O
.,O
,O
The,O
Plan,O
includes,O
the,O
Savings,O
and,O
Investment,O
Plan,O
(,O
SIP,O
),O
",",O
Vocon,I-MISCELLANEOUS
and,O
Deferred,O
Profit,O
Sharing,O
(,O
DPS,O
),O
Accounts,O
.,O
,O
Participants,O
should,O
refer,O
to,O
the,O
Plan,O
document,O
for,O
more,O
complete,O
information,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
Acquisition,O
On,O
January,O
1,O
",",O
2009,O
",",O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
was,O
acquired,O
by,O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
Corporation,I-BUSINESS
(,O
the,O
Corporation,O
),O
.,O
,O
Under,O
the,O
terms,O
of,O
the,O
transaction,O
",",O
all,O
shares,O
of,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
common,O
stock,O
(,O
ML,I-BUSINESS
common,O
stock,O
),O
held,O
in,O
the,O
Plan,O
by,O
Plan,O
participants,O
were,O
automatically,O
converted,O
to,O
Bank,O
of,O
America,O
Corporation,O
common,O
stock,O
(,O
BAC,I-BUSINESS
common,O
stock,O
),O
with,O
one,O
share,O
of,O
ML,I-BUSINESS
common,O
stock,O
converted,O
to,O
0.8595,O
of,O
a,O
share,O
of,O
BAC,I-BUSINESS
common,O
stock,O
.,O
,O
Effective,O
with,O
the,O
acquisition,O
by,O
the,O
Corporation,O
",",O
the,O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
Corporation,I-BUSINESS
Corporate,I-BUSINESS
Benefits,I-BUSINESS
Committee,I-BUSINESS
(,O
the,O
Committee,O
),O
became,O
the,O
plan,O
administrator,O
of,O
the,O
Plan,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
Company,O
),O
continues,O
as,O
the,O
plan,O
sponsor,O
.,O
,O
The,O
Board,O
of,O
Directors,O
of,O
the,O
Corporation,O
has,O
the,O
right,O
at,O
any,O
time,O
to,O
remove,O
any,O
member,O
of,O
the,O
Committee,O
.,O
,O
Members,O
of,O
the,O
Committee,O
serve,O
without,O
compensation,O
and,O
act,O
by,O
majority,O
vote,O
.,O
,O
The,O
Committee,O
has,O
overall,O
responsibility,O
for,O
the,O
operation,O
and,O
administration,O
of,O
the,O
Plan,O
including,O
the,O
power,O
to,O
construe,O
and,O
interpret,O
the,O
Plan,O
",",O
decide,O
all,O
questions,O
that,O
arise,O
thereunder,O
",",O
and,O
to,O
delegate,O
responsibilities,O
.,O
,O
Plan,O
Trustee,O
Effective,O
November,O
2,O
",",O
2009,O
",",O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
FSB,I-BUSINESS
",",O
a,O
federally,O
chartered,O
savings,O
bank,O
affiliated,O
with,O
the,O
Company,O
and,O
the,O
Trustee,O
of,O
the,O
Plan,O
",",O
merged,O
into,O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
(,O
BANA,I-BUSINESS
),O
",",O
which,O
",",O
as,O
a,O
result,O
of,O
the,O
merger,O
",",O
succeeded,O
to,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
FSB,I-BUSINESS
as,O
one,O
of,O
two,O
Co-Trustees,O
.,O
,O
State,I-BUSINESS
Street,I-BUSINESS
Bank,I-BUSINESS
and,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
is,O
the,O
other,O
Co-Trustee,O
.,O
,O
SIP,O
Account,O
General,O
The,O
Plan,O
is,O
a,O
defined,O
contribution,O
plan,O
for,O
employees,O
of,O
the,O
Company,O
and,O
participating,O
subsidiaries,O
.,O
,O
The,O
portion,O
of,O
the,O
Plan,O
invested,O
in,O
BAC,I-BUSINESS
common,O
stock,O
is,O
designated,O
an,O
Employee,O
Stock,O
Ownership,O
Plan,O
(,O
ESOP,O
),O
.,O
,O
The,O
Plan,O
is,O
subject,O
to,O
the,O
provisions,O
of,O
the,O
Employee,I-LEGISLATION/ACT
Retirement,I-LEGISLATION/ACT
Income,I-LEGISLATION/ACT
Security,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1974,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
ERISA,I-LEGISLATION/ACT
),O
.,O
,O
Effective,O
January,O
1,O
",",O
2010,O
",",O
the,O
Plan,O
was,O
closed,O
to,O
new,O
participants,O
",",O
with,O
certain,O
exceptions,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
SIP,O
Account,O
(,O
Continued,O
),O
,O
Eligible,O
Company,O
employees,O
newly,O
hired,O
on,O
or,O
after,O
January,O
1,O
",",O
2010,O
participate,O
in,O
The,I-MISCELLANEOUS
Bank,I-MISCELLANEOUS
of,I-MISCELLANEOUS
America,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
with,O
certain,O
exceptions,O
.,O
,O
Pre-tax,O
Contributions,O
Each,O
participant,O
may,O
elect,O
to,O
make,O
contributions,O
to,O
the,O
Plan,O
on,O
a,O
pre-tax,O
basis,O
through,O
payroll,O
deductions,O
from,O
1,O
%,O
through,O
25,O
%,O
of,O
such,O
participant,O
s,O
eligible,O
compensation,O
(,O
as,O
defined,O
in,O
the,O
Plan,O
document,O
),O
for,O
each,O
pay,O
period,O
.,O
,O
In,O
accordance,O
with,O
federal,O
law,O
",",O
the,O
2010,O
annual,O
pre-tax,O
contributions,O
were,O
limited,O
to,O
$,O
"16,500",O
for,O
participants,O
who,O
are,O
below,O
age,O
50,O
.,O
,O
In,O
addition,O
",",O
participants,O
who,O
are,O
age,O
50,O
or,O
older,O
and,O
have,O
made,O
the,O
maximum,O
contribution,O
to,O
the,O
Plan,O
can,O
make,O
an,O
additional,O
catch,O
up,O
contribution,O
to,O
the,O
Plan,O
through,O
payroll,O
deductions,O
up,O
to,O
a,O
maximum,O
of,O
$,O
"5,500",O
in,O
2010,O
.,O
,O
A,O
participant,O
can,O
elect,O
to,O
change,O
the,O
rate,O
at,O
which,O
his/her,O
contribution,O
is,O
determined,O
at,O
any,O
time,O
during,O
the,O
year,O
.,O
,O
If,O
an,O
employee,O
makes,O
both,O
pre-tax,O
contributions,O
and,O
Roth,O
after-tax,O
contributions,O
(,O
described,O
below,O
),O
",",O
these,O
percentage,O
and,O
dollar,O
contribution,O
limits,O
apply,O
to,O
these,O
types,O
of,O
contributions,O
in,O
the,O
aggregate,O
.,O
,O
Roth,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Contributions,O
Employees,O
are,O
eligible,O
to,O
contribute,O
on,O
an,O
after-tax,O
basis,O
through,O
payroll,O
deductions,O
from,O
1,O
%,O
to,O
25,O
%,O
of,O
eligible,O
compensation,O
as,O
Roth,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
deductions,O
.,O
,O
In,O
addition,O
",",O
participants,O
who,O
are,O
age,O
50,O
or,O
older,O
and,O
have,O
made,O
the,O
maximum,O
contribution,O
to,O
the,O
Plan,O
can,O
make,O
an,O
additional,O
Roth,I-MISCELLANEOUS
catch,O
up,O
contribution,O
to,O
the,O
Plan,O
through,O
payroll,O
deductions,O
up,O
to,O
a,O
maximum,O
of,O
$,O
"5,500",O
in,O
2010,O
.,O
,O
Provided,O
requirements,O
are,O
met,O
",",O
withdrawals,O
of,O
contributions,O
and,O
any,O
earnings,O
are,O
tax,O
free,O
.,O
,O
A,O
participant,O
s,O
combined,O
pre-tax,O
and,O
Roth,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
contributions,O
can,O
not,O
exceed,O
the,O
maximum,O
annual,O
amount,O
allowed,O
by,O
law,O
.,O
,O
After,O
Tax,O
Contributions,O
A,O
participant,O
may,O
elect,O
to,O
contribute,O
up,O
to,O
25,O
%,O
of,O
his/her,O
eligible,O
compensation,O
in,O
traditional,O
(,O
non-Roth,I-MISCELLANEOUS
),O
after-tax,O
dollars,O
up,O
to,O
an,O
annual,O
maximum,O
of,O
$,O
"10,000",O
.,O
,O
Employer,O
Contributions,O
For,O
employees,O
with,O
at,O
least,O
1,O
year,O
of,O
service,O
",",O
the,O
Company,O
matches,O
100,O
%,O
of,O
the,O
first,O
4,O
%,O
of,O
each,O
participant,O
s,O
eligible,O
compensation,O
contributed,O
to,O
the,O
Plan,O
",",O
up,O
to,O
a,O
plan,O
year,O
maximum,O
of,O
$,O
"3,000",O
for,O
employees,O
with,O
eligible,O
compensation,O
of,O
less,O
than,O
$,O
"300,000",O
for,O
the,O
prior,O
plan,O
year,O
",",O
and,O
$,O
"2,000",O
for,O
all,O
others,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
SIP,O
Account,O
(,O
Continued,O
),O
,O
Employer,O
Contributions,O
(,O
Continued,O
),O
,O
Employer,O
contributions,O
are,O
made,O
in,O
the,O
form,O
of,O
cash,O
.,O
,O
For,O
the,O
year-ended,O
December,O
31,O
",",O
2010,O
",",O
the,O
Company,O
contributed,O
$,O
"77,453,404",O
.,O
,O
Withdrawals,O
Withdrawals,O
during,O
employment,O
are,O
permitted,O
under,O
certain,O
circumstances,O
.,O
,O
There,O
are,O
two,O
types,O
of,O
withdrawals,O
:,O
hardship,O
and,O
non-hardship,O
.,O
,O
A,O
hardship,O
withdrawal,O
is,O
available,O
under,O
limited,O
circumstances,O
",",O
which,O
the,O
participant,O
must,O
document,O
",",O
and,O
is,O
paid,O
in,O
cash,O
.,O
,O
A,O
non-hardship,O
withdrawal,O
is,O
available,O
under,O
certain,O
circumstances,O
",",O
depending,O
on,O
the,O
participant,O
s,O
age,O
",",O
length,O
of,O
Plan,O
participation,O
",",O
and/or,O
type,O
of,O
account,O
or,O
sub-account,O
involved,O
.,O
,O
Before,O
age,O
70,O
",",O
a,O
non-hardship,O
withdrawal,O
is,O
paid,O
in,O
cash,O
",",O
except,O
that,O
active,O
participants,O
who,O
are,O
at,O
least,O
age,O
59,O
may,O
elect,O
to,O
withdraw,O
all,O
",",O
but,O
not,O
less,O
than,O
all,O
",",O
of,O
their,O
vested,O
account,O
balances,O
held,O
in,O
BAC,I-BUSINESS
common,O
stock,O
.,O
,O
After,O
age,O
70,O
other,O
payment,O
options,O
are,O
available,O
for,O
a,O
non-hardship,O
withdrawal,O
.,O
,O
The,O
payment,O
options,O
for,O
non-hardship,O
withdrawals,O
",",O
to,O
the,O
extent,O
permitted,O
by,O
Plan,O
provisions,O
",",O
are,O
generally,O
as,O
follows,O
:,O
lump-sum,O
distributions,O
of,O
cash,O
and/or,O
securities,O
",",O
and,O
transfer,O
to,O
an,O
individual,O
retirement,O
account,O
or,O
other,O
brokerage,O
account,O
.,O
,O
Payment,O
of,O
Benefits,O
Distributions,O
of,O
account,O
balances,O
may,O
occur,O
upon,O
a,O
participant,O
s,O
retirement,O
",",O
death,O
or,O
other,O
termination,O
of,O
employment,O
.,O
,O
A,O
participant,O
",",O
or,O
a,O
beneficiary,O
",",O
may,O
receive,O
distributions,O
under,O
one,O
of,O
several,O
options,O
.,O
,O
The,O
options,O
are,O
as,O
follows,O
:,O
lump-sum,O
distribution,O
of,O
cash,O
and/or,O
securities,O
",",O
transfer,O
to,O
an,O
individual,O
retirement,O
account,O
or,O
other,O
brokerage,O
account,O
",",O
or,O
the,O
purchase,O
of,O
an,O
annuity,O
.,O
,O
All,O
amounts,O
allocated,O
to,O
participants,O
who,O
elected,O
to,O
withdraw,O
from,O
the,O
Plan,O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
were,O
paid,O
prior,O
to,O
year,O
end,O
.,O
,O
Vesting,O
of,O
Benefits,O
Participants,O
are,O
always,O
100,O
%,O
vested,O
in,O
contributions,O
to,O
the,O
Plan,O
made,O
from,O
their,O
eligible,O
compensation,O
and,O
in,O
amounts,O
rolled,O
over,O
from,O
a,O
former,O
employer,O
s,O
qualified,O
retirement,O
plan,O
or,O
transfer,O
from,O
another,O
plan,O
",",O
and,O
in,O
each,O
case,O
",",O
the,O
earnings,O
thereon,O
.,O
,O
Participants,O
become,O
vested,O
in,O
employer,O
contributions,O
and,O
earnings,O
thereon,O
based,O
on,O
completed,O
Years,O
of,O
Service,O
:,O
1,O
Year,O
of,O
Service,O
-,O
20,O
%,O
vested,O
;,O
2,O
Years,O
of,O
Service,O
-,O
40,O
%,O
vested,O
;,O
3,O
Years,O
of,O
Service,O
-,O
60,O
%,O
vested,O
;,O
4,O
Years,O
of,O
Service,O
-,O
80,O
%,O
vested,O
;,O
and,O
5,O
Years,O
of,O
Service,O
-,O
100,O
%,O
vested,O
.,O
,O
Participants,O
become,O
100,O
%,O
vested,O
in,O
employer,O
contributions,O
when,O
they,O
attain,O
age,O
65,O
or,O
terminate,O
employment,O
as,O
a,O
result,O
of,O
death,O
.,O
,O
Participants,O
are,O
100,O
%,O
vested,O
in,O
the,O
dividends,O
paid,O
on,O
BAC,I-BUSINESS
common,O
stock,O
held,O
in,O
their,O
account,O
regardless,O
of,O
their,O
years,O
of,O
service,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
SIP,O
Account,O
(,O
Continued,O
),O
,O
Forfeitures,O
As,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
the,O
forfeited,O
nonvested,O
account,O
totaled,O
$,O
"5,106,065",O
and,O
$,O
"660,526",O
",",O
respectively,O
.,O
,O
This,O
account,O
will,O
be,O
used,O
to,O
reduce,O
future,O
employer,O
contributions,O
.,O
,O
Participant,O
Accounts,O
Individual,O
accounts,O
are,O
maintained,O
for,O
each,O
Plan,O
participant,O
.,O
,O
Each,O
participant,O
s,O
account,O
is,O
credited,O
with,O
employee,O
contributions,O
",",O
employer,O
matching,O
contributions,O
and,O
investment,O
earnings,O
",",O
and,O
charged,O
with,O
the,O
allocation,O
of,O
investment,O
losses,O
and,O
withdrawals,O
.,O
,O
Participant,O
Notes,O
Receivable,O
Generally,O
",",O
active,O
participants,O
in,O
the,O
Plan,O
are,O
eligible,O
for,O
loans,O
from,O
the,O
Plan,O
.,O
,O
A,O
maximum,O
of,O
2,O
outstanding,O
loans,O
is,O
permitted,O
at,O
any,O
time,O
.,O
,O
Interest,O
rates,O
on,O
loans,O
are,O
generally,O
calculated,O
based,O
on,O
the,O
prime,O
rate,O
as,O
published,O
in,O
the,O
Wall,I-MISCELLANEOUS
Street,I-MISCELLANEOUS
Journal,I-MISCELLANEOUS
on,O
the,O
last,O
business,O
day,O
of,O
the,O
month,O
prior,O
to,O
the,O
month,O
the,O
loan,O
was,O
obtained,O
.,O
,O
Interest,O
rates,O
on,O
the,O
loans,O
are,O
fixed,O
.,O
,O
General,O
purpose,O
loans,O
have,O
a,O
term,O
of,O
1,O
to,O
5,O
years,O
and,O
principal,O
residence,O
loans,O
have,O
a,O
term,O
of,O
1,O
to,O
15,O
years,O
.,O
,O
The,O
maximum,O
loan,O
amount,O
that,O
may,O
be,O
obtained,O
is,O
the,O
lesser,O
of,O
50,O
%,O
of,O
the,O
participant,O
s,O
vested,O
account,O
balance,O
reduced,O
by,O
any,O
outstanding,O
loan,O
balance,O
",",O
or,O
$,O
"50,000",O
reduced,O
by,O
the,O
highest,O
outstanding,O
balance,O
of,O
loans,O
under,O
the,O
Plan,O
and,O
under,O
any,O
tax-qualified,O
plans,O
maintained,O
by,O
affiliates,O
during,O
the,O
12,O
month,O
period,O
ending,O
on,O
the,O
day,O
before,O
the,O
loan,O
was,O
made,O
.,O
,O
Interest,O
rates,O
ranged,O
from,O
3.25,O
%,O
to,O
9.75,O
%,O
for,O
loans,O
held,O
by,O
the,O
Plan,O
as,O
of,O
December,O
31,O
",",O
2010,O
.,O
,O
Vocon,I-MISCELLANEOUS
and,O
DPS,O
Accounts,O
General,O
The,O
Vocon,I-MISCELLANEOUS
Accounts,O
were,O
established,O
for,O
participants,O
who,O
made,O
voluntary,O
",",O
non-deductible,O
contributions,O
to,O
the,O
Pension,O
Plan,O
for,O
Employees,O
of,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
Affiliates,O
",",O
which,O
terminated,O
in,O
1988,O
",",O
and,O
represent,O
the,O
amounts,O
transferred,O
to,O
the,O
Plan,O
from,O
the,O
terminated,O
Pension,O
Plan,O
with,O
respect,O
to,O
such,O
contributions,O
.,O
,O
The,O
DPS,O
Accounts,O
were,O
established,O
for,O
participants,O
with,O
amounts,O
transferred,O
to,O
the,O
Plan,O
from,O
the,O
Deferred,O
Profit,O
Sharing,O
Plan,O
for,O
Employees,O
of,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
",",I-BUSINESS
Pierce,I-BUSINESS
",",I-BUSINESS
Fenner,I-BUSINESS
and,I-BUSINESS
Smith,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
Affiliates,O
(,O
MLPF,I-BUSINESS
&,I-BUSINESS
S,I-BUSINESS
),O
.,O
,O
Employer,O
contributions,O
to,O
that,O
plan,O
were,O
suspended,O
as,O
of,O
December,O
1973,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Vocon,I-MISCELLANEOUS
and,O
DPS,O
Accounts,O
(,O
Continued,O
),O
,O
Participant,O
Accounts,O
Participants,O
can,O
direct,O
the,O
investment,O
of,O
their,O
accounts,O
among,O
any,O
of,O
the,O
investment,O
alternatives,O
offered,O
by,O
the,O
Plan,O
.,O
,O
Each,O
participant,O
s,O
account,O
is,O
credited,O
with,O
investment,O
earnings,O
",",O
and,O
charged,O
with,O
the,O
allocation,O
of,O
investment,O
losses,O
and,O
withdrawals,O
.,O
,O
Vesting,O
Participants,O
are,O
100,O
%,O
vested,O
in,O
the,O
Vocon,I-MISCELLANEOUS
and,O
DPS,O
Accounts,O
.,O
,O
Payment,O
of,O
Benefits,O
Distributions,O
from,O
the,O
Plan,O
are,O
allowed,O
due,O
to,O
death,O
",",O
retirement,O
",",O
in-service,O
withdrawal,O
",",O
or,O
termination,O
.,O
,O
All,O
amounts,O
allocated,O
to,O
participants,O
who,O
elected,O
to,O
withdraw,O
from,O
the,O
Plan,O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
were,O
paid,O
prior,O
to,O
year,O
end,O
.,O
,O
Investment,O
Alternatives,O
All,O
contributions,O
to,O
the,O
Plan,O
may,O
be,O
allocated,O
among,O
any,O
of,O
the,O
available,O
investments,O
selected,O
by,O
the,O
participant,O
from,O
among,O
the,O
investment,O
alternatives,O
designated,O
by,O
the,O
Committee,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
there,O
were,O
33,O
open,O
investment,O
options,O
in,O
the,O
Plan,O
.,O
,O
As,O
of,O
April,O
27,O
",",O
2010,O
",",O
the,O
BAC,I-BUSINESS
common,O
stock,O
investment,O
option,O
changed,O
accounting,O
methods,O
from,O
share,O
accounting,O
to,O
unit,O
accounting,O
.,O
,O
Under,O
the,O
unit,O
accounting,O
methodology,O
",",O
holdings,O
are,O
expressed,O
in,O
terms,O
of,O
dollars,O
and,O
the,O
number,O
of,O
fund,O
units,O
held,O
",",O
similar,O
to,O
units,O
of,O
a,O
mutual,O
fund,O
.,O
,O
However,O
",",O
unlike,O
a,O
typical,O
mutual,O
fund,O
",",O
the,O
BAC,I-BUSINESS
Common,O
Stock,O
Fund,O
primarily,O
invests,O
in,O
BAC,I-BUSINESS
common,O
stock,O
.,O
,O
In,O
June,O
2010,O
",",O
the,O
AIM,I-BUSINESS
International,I-BUSINESS
Growth,I-BUSINESS
Institutional,I-BUSINESS
Fund,I-BUSINESS
",",O
Alliance,I-BUSINESS
Bernstein,I-BUSINESS
Small,I-BUSINESS
Cap,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
Emerging,I-BUSINESS
Markets,I-BUSINESS
Institutional,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
Euro,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
Focus,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
Focus,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
Global,I-BUSINESS
Financial,I-BUSINESS
Service,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
Global,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
Healthcare,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
High,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
International,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
Latin,I-BUSINESS
America,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
Mid-Cap,I-BUSINESS
Value,I-BUSINESS
Opportunities,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
Natural,I-BUSINESS
Resources,I-BUSINESS
Trust,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
Pacific,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
Short-Term,I-BUSINESS
Bond,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
Small,I-BUSINESS
Cap,I-BUSINESS
Growth,I-BUSINESS
Institutional,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
Small,I-BUSINESS
Mid,I-BUSINESS
Growth,I-BUSINESS
Institutional,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
Utilities,I-BUSINESS
&,I-BUSINESS
Telecommunications,I-BUSINESS
Fund,I-BUSINESS
",",O
BlackRock,I-BUSINESS
World,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
",",O
Hotchkis,I-BUSINESS
and,I-BUSINESS
Wiley,I-BUSINESS
Large,I-BUSINESS
Cap,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
",",O
Hotchkis,I-BUSINESS
and,I-BUSINESS
Wiley,I-BUSINESS
Mid,I-BUSINESS
Cap,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
",",O
Hotchkis,I-BUSINESS
and,I-BUSINESS
Wiley,I-BUSINESS
Small,I-BUSINESS
Cap,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
",",O
Ivy,I-BUSINESS
International,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
",",O
MFS,I-BUSINESS
Research,I-BUSINESS
Fund,I-BUSINESS
",",O
Munder,I-BUSINESS
Large,I-BUSINESS
Cap,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
U.S.,I-BUSINESS
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Investment,O
Alternatives,O
(,O
Continued,O
),O
,O
Bond,O
2014,O
Trust,O
-,O
Series,O
3,O
ceased,O
to,O
be,O
investment,O
options,O
under,O
the,O
Plan,O
.,O
,O
Participants,O
with,O
investments,O
in,O
these,O
funds,O
were,O
notified,O
that,O
their,O
investments,O
were,O
mapped,O
out,O
to,O
other,O
remaining,O
investment,O
options,O
under,O
the,O
Plan,O
.,O
,O
Also,O
in,O
June,O
2010,O
",",O
the,O
BlackRock,I-BUSINESS
Fundamental,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
completed,O
its,O
acquisition,O
of,O
the,O
BlackRock,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Appreciation,I-MISCELLANEOUS
Portfolio,I-MISCELLANEOUS
through,O
a,O
reorganization,O
.,O
,O
Upon,O
closing,O
of,O
the,O
reorganization,O
",",O
the,O
name,O
of,O
the,O
BlackRock,I-BUSINESS
Fundamental,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
was,O
changed,O
to,O
BlackRock,I-BUSINESS
Capital,I-BUSINESS
Appreciation,I-BUSINESS
Institutional,I-BUSINESS
Fund,I-BUSINESS
.,O
,O
In,O
July,O
2010,O
",",O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Management,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
and,O
Evergreen,I-BUSINESS
Investment,I-BUSINESS
Management,I-BUSINESS
Company,I-BUSINESS
completed,O
a,O
series,O
of,O
fund,O
mergers,O
",",O
reorganizations,O
and,O
liquidations,O
.,O
,O
As,O
a,O
result,O
",",O
the,O
Evergreen,I-BUSINESS
Mid,I-BUSINESS
Cap,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
was,O
merged,O
into,O
the,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Advantage,I-BUSINESS
Mid,I-BUSINESS
Cap,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
.,O
,O
Effective,O
December,O
3,O
",",O
2010,O
",",O
all,O
assets,O
of,O
the,O
Retirement,I-BUSINESS
Preservation,I-BUSINESS
Trust,I-BUSINESS
were,O
transferred,O
to,O
the,O
new,O
Stable,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
.,O
,O
At,O
that,O
time,O
",",O
the,O
Retirement,I-BUSINESS
Preservation,I-BUSINESS
Trust,I-BUSINESS
was,O
no,O
longer,O
an,O
investment,O
alternative,O
.,O
,O
Participants,O
accounts,O
invested,O
in,O
units,O
of,O
the,O
Retirement,I-BUSINESS
Preservation,I-BUSINESS
Trust,I-BUSINESS
were,O
automatically,O
converted,O
to,O
holdings,O
in,O
the,O
Stable,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
(,O
see,O
Note,O
5,O
:,O
Interest,O
in,O
the,O
Stable,I-BUSINESS
Value,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
),O
.,O
,O
In,O
2009,O
",",O
the,O
Vanguard,I-BUSINESS
Inflation-Protected,I-BUSINESS
Securities,I-BUSINESS
Fund,I-BUSINESS
was,O
added,O
as,O
an,O
investment,O
alternative,O
under,O
the,O
Plan,O
.,O
,O
Recent,O
Accounting,O
Pronouncement,O
In,O
January,O
2010,O
",",O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
2010-06,O
",",O
Improving,I-MISCELLANEOUS
Disclosures,I-MISCELLANEOUS
about,I-MISCELLANEOUS
Fair,I-MISCELLANEOUS
Value,I-MISCELLANEOUS
Measurements,I-MISCELLANEOUS
(,O
ASU,I-LEGISLATION/ACT
2010-06,O
),O
",",O
expanded,O
the,O
required,O
disclosures,O
about,O
fair,O
value,O
measurements,O
(,O
see,O
Note,O
6,O
:,O
Fair,O
Value,O
Measurements,O
),O
.,O
,O
ASU,I-LEGISLATION/ACT
2010-06,O
requires,O
(,O
i,O
),O
separate,O
disclosure,O
of,O
significant,O
transfers,O
into,O
and,O
out,O
of,O
level,O
1,O
and,O
level,O
2,O
",",O
along,O
with,O
reasons,O
for,O
such,O
transfers,O
;,O
(,O
ii,O
),O
separate,O
presentation,O
of,O
gross,O
purchases,O
",",O
sales,O
",",O
issuances,O
",",O
and,O
settlements,O
in,O
the,O
level,O
3,O
reconciliation,O
;,O
and,O
(,O
iii,O
),O
presentation,O
of,O
fair,O
value,O
disclosures,O
by,O
nature,O
and,O
risk,O
class,O
for,O
all,O
fair,O
value,O
assets,O
and,O
liabilities,O
.,O
,O
The,O
requirements,O
of,O
ASU,I-LEGISLATION/ACT
2010-06,O
are,O
effective,O
for,O
the,O
current,O
reporting,O
period,O
except,O
for,O
the,O
level,O
3,O
reconciliation,O
disaggregation,O
which,O
is,O
required,O
in,O
2011,O
reporting,O
.,O
,O
The,O
Plan,O
s,O
financial,O
statements,O
are,O
presented,O
to,O
conform,O
to,O
the,O
requirements,O
of,O
ASU,I-LEGISLATION/ACT
2010-06,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Significant,O
accounting,O
policies,O
of,O
the,O
Plan,O
are,O
summarized,O
below,O
:,O
Basis,O
of,O
Accounting,O
The,O
financial,O
statements,O
are,O
prepared,O
on,O
the,O
accrual,O
basis,O
of,O
accounting,O
in,O
accordance,O
with,O
U.S.,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
(,O
GAAP,I-LEGISLATION/ACT
),O
.,O
,O
Revenues,O
are,O
recognized,O
as,O
earned,O
.,O
,O
Benefits,O
paid,O
to,O
plan,O
participants,O
are,O
recorded,O
when,O
paid,O
.,O
,O
All,O
other,O
expenses,O
are,O
recorded,O
as,O
incurred,O
.,O
,O
Management,O
Estimates,O
The,O
preparation,O
of,O
financial,O
statements,O
in,O
conformity,O
with,O
GAAP,I-LEGISLATION/ACT
requires,O
management,O
to,O
make,O
estimates,O
and,O
assumptions,O
that,O
affect,O
the,O
reported,O
amounts,O
of,O
Plan,O
assets,O
and,O
liabilities,O
and,O
disclosure,O
of,O
contingent,O
liabilities,O
at,O
the,O
date,O
of,O
the,O
financial,O
statements,O
and,O
the,O
reported,O
amounts,O
of,O
Plan,O
additions,O
and,O
deductions,O
during,O
the,O
reporting,O
period,O
.,O
,O
Actual,O
results,O
could,O
differ,O
from,O
those,O
estimates,O
.,O
,O
Investment,O
Valuation,O
and,O
Income,O
Recognition,O
Investments,O
are,O
carried,O
at,O
fair,O
value,O
.,O
,O
Fair,O
value,O
is,O
the,O
price,O
that,O
would,O
be,O
received,O
to,O
sell,O
an,O
asset,O
or,O
paid,O
to,O
transfer,O
a,O
liability,O
in,O
an,O
orderly,O
transaction,O
between,O
market,O
participants,O
at,O
the,O
measurement,O
date,O
(,O
see,O
Note,O
6,O
:,O
Fair,O
Value,O
Measurements,O
),O
.,O
,O
Benefit,O
responsive,O
investment,O
contracts,O
are,O
stated,O
at,O
fair,O
value,O
and,O
are,O
adjusted,O
to,O
contract,O
value,O
(,O
which,O
represent,O
contributions,O
made,O
under,O
the,O
contract,O
",",O
plus,O
interest,O
less,O
withdrawals,O
and,O
administration,O
expenses,O
),O
on,O
the,O
Statements,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Net,I-MISCELLANEOUS
Assets,I-MISCELLANEOUS
Available,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Benefits,I-MISCELLANEOUS
(,O
see,O
Note,O
5,O
:,O
Interest,O
in,O
the,O
Stable,I-BUSINESS
Value,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
),O
.,O
,O
As,O
described,O
in,O
Financial,I-GOVERNMENT
Accounting,I-GOVERNMENT
Standards,I-GOVERNMENT
Board,I-GOVERNMENT
(,O
FASB,I-GOVERNMENT
),O
Staff,I-LEGISLATION/ACT
Position,I-LEGISLATION/ACT
AAG,I-LEGISLATION/ACT
INV-1,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
SOP,I-LEGISLATION/ACT
94-4-1,I-LEGISLATION/ACT
",",O
Reporting,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Fully,I-MISCELLANEOUS
Benefit,I-MISCELLANEOUS
Responsive,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Contracts,I-MISCELLANEOUS
Held,I-MISCELLANEOUS
by,I-MISCELLANEOUS
Certain,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Companies,I-MISCELLANEOUS
Subject,I-MISCELLANEOUS
to,I-MISCELLANEOUS
the,I-MISCELLANEOUS
AICPA,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Company,I-MISCELLANEOUS
Guide,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Defined-Contribution,I-MISCELLANEOUS
Health,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Welfare,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Pension,I-MISCELLANEOUS
Plans,I-MISCELLANEOUS
",",O
which,O
was,O
codified,O
in,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Codification,I-LEGISLATION/ACT
(,O
ASC,I-LEGISLATION/ACT
),O
962-205-45,O
",",O
investment,O
contracts,O
held,O
by,O
a,O
defined-contribution,O
plan,O
are,O
required,O
to,O
be,O
reported,O
at,O
fair,O
value,O
.,O
,O
However,O
",",O
contract,O
value,O
is,O
the,O
relevant,O
measurement,O
attribute,O
for,O
that,O
portion,O
of,O
the,O
net,O
assets,O
available,O
for,O
benefits,O
of,O
a,O
defined-contribution,O
plan,O
attributable,O
to,O
fully,O
benefit-responsive,O
investment,O
contracts,O
because,O
contract,O
value,O
is,O
the,O
amount,O
participants,O
would,O
receive,O
if,O
they,O
were,O
to,O
initiate,O
permitted,O
transactions,O
under,O
the,O
terms,O
of,O
the,O
plan,O
.,O
,O
The,I-MISCELLANEOUS
Statements,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Net,I-MISCELLANEOUS
Assets,I-MISCELLANEOUS
Available,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Benefits,I-MISCELLANEOUS
present,O
the,O
adjustment,O
of,O
the,O
investment,O
contracts,O
from,O
fair,O
value,O
to,O
contract,O
value,O
.,O
,O
The,I-MISCELLANEOUS
Statement,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Changes,I-MISCELLANEOUS
in,I-MISCELLANEOUS
Net,I-MISCELLANEOUS
Assets,I-MISCELLANEOUS
Available,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Benefits,I-MISCELLANEOUS
is,O
prepared,O
on,O
a,O
contract,O
value,O
basis,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Investment,O
Valuation,O
and,O
Income,O
Recognition,O
(,O
Continued,O
),O
,O
Realized,O
gains,O
or,O
losses,O
on,O
investment,O
transactions,O
are,O
recorded,O
as,O
the,O
difference,O
between,O
proceeds,O
received,O
and,O
cost,O
.,O
,O
Cost,O
is,O
determined,O
on,O
the,O
average,O
cost,O
basis,O
.,O
,O
Net,O
appreciation,O
(,O
depreciation,O
),O
in,O
fair,O
value,O
of,O
investments,O
includes,O
the,O
reversal,O
of,O
previously,O
recognized,O
appreciation,O
(,O
depreciation,O
),O
related,O
to,O
investments,O
sold,O
during,O
the,O
period,O
.,O
,O
Investment,O
securities,O
purchased,O
and,O
sold,O
are,O
recorded,O
on,O
a,O
trade-date,O
basis,O
.,O
,O
Interest,O
income,O
is,O
recorded,O
on,O
an,O
accrual,O
basis,O
.,O
,O
Dividends,O
are,O
recorded,O
on,O
the,O
ex-dividend,O
date,O
.,O
,O
Participant,O
Notes,O
Receivable,O
Participant,O
notes,O
receivable,O
are,O
measured,O
at,O
their,O
unpaid,O
principal,O
balance,O
plus,O
any,O
accrued,O
but,O
unpaid,O
interest,O
.,O
,O
Delinquent,O
participant,O
loans,O
are,O
reclassified,O
as,O
distributions,O
based,O
upon,O
the,O
terms,O
of,O
the,O
Plan,O
document,O
.,O
,O
Plan,O
Expenses,O
Plan,O
expenses,O
",",O
including,O
expenses,O
of,O
the,O
Committee,O
and,O
the,O
Plan,O
s,O
Trustee,O
",",O
to,O
the,O
extent,O
not,O
paid,O
by,O
the,O
Plan,O
",",O
are,O
paid,O
by,O
the,O
Company,O
.,O
,O
Subsequent,O
Events,O
In,O
preparing,O
the,O
financial,O
statements,O
",",O
transactions,O
and,O
events,O
were,O
evaluated,O
for,O
potential,O
recognition,O
.,O
,O
It,O
was,O
determined,O
that,O
there,O
are,O
no,O
subsequent,O
transactions,O
and,O
events,O
that,O
require,O
disclosure,O
to,O
or,O
adjustment,O
in,O
the,O
financial,O
statements,O
.,O
,O
Reclassifications,O
In,O
September,O
",",O
2010,O
",",O
ASU,I-LEGISLATION/ACT
2010-25,O
",",O
Reporting,I-MISCELLANEOUS
Loans,I-MISCELLANEOUS
to,I-MISCELLANEOUS
Participants,I-MISCELLANEOUS
by,I-MISCELLANEOUS
Defined,I-MISCELLANEOUS
Contribution,I-MISCELLANEOUS
Pension,I-MISCELLANEOUS
Plans,I-MISCELLANEOUS
",",O
clarified,O
the,O
classification,O
and,O
measurement,O
of,O
the,O
participant,O
loans,O
by,O
defined,O
contribution,O
plans,O
.,O
,O
ASU,I-LEGISLATION/ACT
2010-25,O
provided,O
that,O
in,O
defined,O
contribution,O
plans,O
financial,O
statements,O
",",O
participant,O
loans,O
should,O
be,O
classified,O
as,O
notes,O
receivable,O
from,O
the,O
participants,O
",",O
which,O
are,O
segregated,O
from,O
plan,O
investments,O
and,O
measured,O
at,O
their,O
unpaid,O
principal,O
balance,O
plus,O
any,O
accrued,O
but,O
unpaid,O
interest,O
.,O
,O
Additionally,O
",",O
participant,O
loans,O
are,O
exempt,O
from,O
(,O
i,O
),O
the,O
disclosure,O
requirements,O
about,O
fair,O
value,O
in,O
paragraphs,O
825-10-50-10,O
through,O
50-16,O
of,O
the,O
ASC,I-LEGISLATION/ACT
and,O
(,O
ii,O
),O
credit,O
quality,O
disclosures,O
required,O
by,O
the,O
amendments,O
in,O
ASU,I-LEGISLATION/ACT
2010-20,O
",",O
Receivables,I-MISCELLANEOUS
(,I-MISCELLANEOUS
Topic,I-MISCELLANEOUS
310,I-MISCELLANEOUS
),I-MISCELLANEOUS
:,O
Disclosures,I-MISCELLANEOUS
about,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Credit,I-MISCELLANEOUS
Quality,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Financing,I-MISCELLANEOUS
Receivables,I-MISCELLANEOUS
and,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Allowance,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Credit,I-MISCELLANEOUS
Losses,I-MISCELLANEOUS
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
The,O
Plan,O
reclassified,O
participant,O
loans,O
to,O
participant,O
notes,O
receivable,O
totaling,O
$,O
"91,210,509",O
and,O
$,O
"83,749,733",O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
respectively,O
",",O
on,O
the,O
Statements,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Net,I-MISCELLANEOUS
Assets,I-MISCELLANEOUS
Available,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Benefits,I-MISCELLANEOUS
.,O
,O
Net,O
assets,O
of,O
the,O
Plan,O
were,O
not,O
affected,O
by,O
the,O
reclassification,O
.,O
,O
Investments,O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
that,O
represent,O
5,O
%,O
or,O
more,O
of,O
the,O
Plan,O
s,O
net,O
assets,O
available,O
for,O
benefits,O
include,O
the,O
following,O
:,O
,O
The,O
Plan,O
invests,O
in,O
various,O
investment,O
securities,O
.,O
,O
Investment,O
securities,O
are,O
exposed,O
to,O
various,O
risks,O
such,O
as,O
interest,O
rate,O
",",O
market,O
and,O
credit,O
risks,O
.,O
,O
Due,O
to,O
the,O
level,O
of,O
risk,O
associated,O
with,O
certain,O
investment,O
securities,O
",",O
it,O
is,O
at,O
least,O
reasonably,O
possible,O
that,O
changes,O
in,O
the,O
values,O
of,O
investment,O
securities,O
will,O
occur,O
in,O
the,O
near,O
term,O
and,O
that,O
such,O
changes,O
could,O
materially,O
affect,O
participants,O
account,O
balances,O
and,O
the,O
amounts,O
reported,O
in,O
the,O
statement,O
of,O
net,O
assets,O
available,O
for,O
benefits,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
A,O
portion,O
of,O
the,O
Plan,O
s,O
investments,O
is,O
in,O
the,O
Stable,I-BUSINESS
Value,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
(,O
Master,O
Trust,O
),O
.,O
,O
The,O
Master,O
Trust,O
was,O
established,O
on,O
January,O
1,O
",",O
2009,O
to,O
provide,O
a,O
single,O
collective,O
investment,O
vehicle,O
for,O
the,O
Stable,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
investment,O
option,O
of,O
The,I-MISCELLANEOUS
Bank,I-MISCELLANEOUS
of,I-MISCELLANEOUS
America,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
",",O
The,I-MISCELLANEOUS
Bank,I-MISCELLANEOUS
of,I-MISCELLANEOUS
America,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Legacy,I-MISCELLANEOUS
Companies,I-MISCELLANEOUS
",",O
and,O
the,O
Transferred,I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
Account,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
",",O
and,O
effective,O
December,O
3,O
",",O
2010,O
",",O
the,O
Plan,O
and,O
the,O
Merrill,I-MISCELLANEOUS
Lynch,I-MISCELLANEOUS
&,I-MISCELLANEOUS
Co.,I-MISCELLANEOUS
",",I-MISCELLANEOUS
Inc.,I-MISCELLANEOUS
Retirement,I-MISCELLANEOUS
Accumulation,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
(,O
collectively,O
known,O
as,O
Participating,O
Plans,O
),O
.,O
,O
The,O
assets,O
of,O
the,O
Master,O
Trust,O
are,O
held,O
by,O
BANA,I-BUSINESS
",",O
as,O
Trustee,O
",",O
and,O
the,O
portfolio,O
is,O
managed,O
by,O
an,O
unaffiliated,O
investment,O
advisor,O
",",O
The,I-BUSINESS
Dreyfus,I-BUSINESS
Corporation,I-BUSINESS
",",O
a,O
unit,O
of,O
BNY,I-BUSINESS
Mellon,I-BUSINESS
.,O
,O
Each,O
Participating,O
Plan,O
owns,O
an,O
undivided,O
interest,O
in,O
the,O
Master,O
Trust,O
.,O
,O
The,O
terms,O
of,O
the,O
underlying,O
investment,O
contracts,O
in,O
the,O
Stable,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
are,O
benefit,O
responsive,O
",",O
providing,O
a,O
guarantee,O
by,O
the,O
issuer,O
to,O
pay,O
principal,O
plus,O
accrued,O
interest,O
in,O
response,O
to,O
benefit-related,O
requests,O
for,O
payment,O
.,O
,O
The,O
value,O
of,O
the,O
Plan,O
s,O
interest,O
in,O
the,O
Master,O
Trust,O
is,O
based,O
on,O
the,O
beginning,O
value,O
of,O
the,O
Plan,O
s,O
interest,O
in,O
the,O
Master,O
Trust,O
plus,O
actual,O
contributions,O
and,O
allocated,O
investment,O
income,O
less,O
actual,O
distributions,O
and,O
allocated,O
administrative,O
expenses,O
.,O
,O
The,O
fair,O
market,O
values,O
of,O
these,O
investment,O
contracts,O
reported,O
in,O
aggregate,O
for,O
the,O
Master,O
Trust,O
was,O
$,O
"3,661,075,833",O
as,O
of,O
December,O
31,O
",",O
2010,O
.,O
,O
The,O
Plan,O
had,O
an,O
undivided,O
interest,O
of,O
6.24,O
%,O
in,O
the,O
following,O
assets,O
of,O
the,O
Master,O
Trust,O
as,O
of,O
December,O
31,O
",",O
2010,O
:,O
,O
For,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
the,O
Master,O
Trust,O
earned,O
$,O
"110,675,974",O
in,O
interest,O
income,O
.,O
,O
The,O
average,O
yield,O
and,O
crediting,O
interest,O
rates,O
for,O
such,O
investments,O
were,O
3.01,O
%,O
and,O
3.23,O
%,O
",",O
respectively,O
for,O
2010,O
.,O
,O
The,O
average,O
yield,O
credited,O
to,O
participants,O
was,O
2.98,O
%,O
for,O
2010,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
The,O
Stable,O
Value,O
Fund,O
generally,O
consists,O
of,O
the,O
following,O
types,O
of,O
guaranteed,O
investment,O
contracts,O
(,O
GICs,O
),O
described,O
below,O
:,O
Guaranteed,O
Investment,O
Contracts,O
Traditional,O
GICs,O
are,O
unsecured,O
",",O
general,O
account,O
obligations,O
of,O
insurance,O
companies,O
.,O
,O
The,O
obligation,O
is,O
backed,O
by,O
the,O
general,O
account,O
assets,O
of,O
the,O
insurance,O
company,O
that,O
writes,O
the,O
investment,O
contract,O
.,O
,O
The,O
crediting,O
rate,O
on,O
this,O
product,O
is,O
typically,O
fixed,O
for,O
the,O
life,O
of,O
the,O
investment,O
.,O
,O
Fair,O
values,O
of,O
traditional,O
GICs,O
are,O
calculated,O
using,O
the,O
present,O
value,O
of,O
the,O
contract,O
s,O
future,O
cash,O
flow,O
values,O
discounted,O
by,O
comparable,O
duration,O
Wall,I-MISCELLANEOUS
Street,I-MISCELLANEOUS
Journal,I-MISCELLANEOUS
GIC,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
rates,O
.,O
,O
Separate,O
account,O
GICs,O
are,O
investments,O
in,O
a,O
segregated,O
account,O
of,O
assets,O
maintained,O
by,O
an,O
insurance,O
company,O
for,O
the,O
benefit,O
of,O
the,O
investors,O
.,O
,O
The,O
total,O
return,O
of,O
the,O
segregated,O
account,O
assets,O
supports,O
the,O
separate,O
account,O
GICs,O
return,O
.,O
,O
The,O
crediting,O
rate,O
on,O
this,O
product,O
will,O
reset,O
periodically,O
and,O
it,O
will,O
have,O
an,O
interest,O
rate,O
of,O
not,O
less,O
than,O
0,O
%,O
.,O
,O
Fair,O
values,O
of,O
separate,O
account,O
GICs,O
are,O
calculated,O
using,O
the,O
market,O
value,O
provided,O
by,O
the,O
insurance,O
companies,O
that,O
manage,O
the,O
underlying,O
assets,O
of,O
the,O
product,O
.,O
,O
Fixed,O
Maturity,O
Synthetic,O
Guaranteed,O
Investment,O
Contracts,O
General,O
fixed,O
maturity,O
synthetic,O
GICs,O
consist,O
of,O
an,O
asset,O
or,O
collection,O
of,O
assets,O
that,O
are,O
owned,O
by,O
the,O
fund,O
(,O
or,O
plan,O
),O
and,O
a,O
benefit,O
responsive,O
",",O
book,O
value,O
wrap,O
contract,O
purchased,O
for,O
the,O
portfolio,O
.,O
,O
The,O
wrap,O
contract,O
provides,O
book,O
value,O
accounting,O
for,O
the,O
asset,O
and,O
assures,O
that,O
book,O
value,O
benefit,O
responsive,O
payments,O
will,O
be,O
made,O
for,O
participant,O
directed,O
withdrawals,O
.,O
,O
The,O
crediting,O
rate,O
of,O
the,O
contract,O
is,O
set,O
at,O
the,O
start,O
of,O
the,O
contract,O
and,O
typically,O
resets,O
every,O
quarter,O
.,O
,O
Generally,O
",",O
fixed,O
maturity,O
synthetics,O
are,O
held,O
to,O
maturity,O
.,O
,O
The,O
initial,O
crediting,O
rate,O
is,O
established,O
based,O
on,O
the,O
market,O
interest,O
rates,O
at,O
the,O
time,O
the,O
initial,O
asset,O
is,O
purchased,O
and,O
it,O
will,O
have,O
an,O
interest,O
crediting,O
rate,O
not,O
less,O
than,O
0,O
%,O
.,O
,O
Fair,O
values,O
of,O
general,O
fixed,O
maturity,O
synthetic,O
GICs,O
are,O
calculated,O
using,O
the,O
sum,O
of,O
all,O
assets,O
market,O
values,O
provided,O
by,O
Interactive,O
Data,O
Services,O
",",O
a,O
third,O
party,O
vendor,O
BNY,I-BUSINESS
Mellon,I-BUSINESS
has,O
engaged,O
to,O
provide,O
fixed,O
income,O
prices,O
on,O
a,O
monthly,O
basis,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Variable,O
Synthetic,O
Guaranteed,O
Investment,O
Contracts,O
Variable,O
synthetic,O
GICs,O
consist,O
of,O
an,O
asset,O
or,O
collection,O
of,O
assets,O
that,O
are,O
managed,O
by,O
a,O
bank,O
or,O
insurance,O
company,O
and,O
are,O
held,O
in,O
a,O
bankruptcy,O
remote,O
vehicle,O
for,O
the,O
benefit,O
of,O
the,O
fund,O
(,O
or,O
plan,O
),O
.,O
,O
The,O
contract,O
is,O
benefit,O
responsive,O
and,O
provides,O
next,O
day,O
liquidity,O
at,O
book,O
value,O
.,O
,O
The,O
crediting,O
rate,O
on,O
this,O
product,O
resets,O
every,O
quarter,O
based,O
on,O
the,O
current,O
market,O
index,O
rates,O
at,O
that,O
time,O
and,O
an,O
investment,O
spread,O
.,O
,O
The,O
investment,O
spread,O
is,O
established,O
at,O
time,O
of,O
issuance,O
and,O
is,O
guaranteed,O
by,O
the,O
issuer,O
for,O
the,O
life,O
of,O
the,O
investment,O
.,O
,O
Fair,O
values,O
for,O
variable,O
synthetic,O
GICs,O
are,O
calculated,O
using,O
the,O
present,O
value,O
of,O
the,O
contract,O
s,O
future,O
cash,O
flow,O
values,O
discounted,O
by,O
comparable,O
swap,O
rates,O
.,O
,O
Constant,O
Duration,O
Synthetic,O
Guaranteed,O
Investment,O
Contracts,O
Constant,O
duration,O
synthetic,O
GICs,O
consist,O
of,O
a,O
portfolio,O
of,O
securities,O
owned,O
by,O
the,O
fund,O
(,O
or,O
plan,O
),O
and,O
a,O
benefit,O
responsive,O
",",O
book,O
value,O
wrap,O
contract,O
purchased,O
for,O
the,O
portfolio,O
.,O
,O
The,O
wrap,O
contract,O
amortizes,O
gains,O
and,O
losses,O
of,O
the,O
underlying,O
securities,O
over,O
the,O
portfolio,O
duration,O
",",O
and,O
assures,O
that,O
book,O
value,O
benefit,O
responsive,O
payments,O
will,O
be,O
made,O
for,O
participant,O
directed,O
withdrawals,O
.,O
,O
The,O
crediting,O
rate,O
on,O
a,O
constant,O
duration,O
synthetic,O
GIC,O
resets,O
every,O
quarter,O
based,O
on,O
the,O
book,O
value,O
of,O
the,O
contract,O
",",O
the,O
market,O
yield,O
of,O
the,O
underlying,O
assets,O
",",O
the,O
market,O
value,O
of,O
the,O
underlying,O
assets,O
and,O
the,O
average,O
duration,O
of,O
the,O
underlying,O
assets,O
.,O
,O
The,O
crediting,O
rate,O
aims,O
at,O
converging,O
the,O
book,O
value,O
of,O
the,O
contract,O
and,O
the,O
market,O
value,O
of,O
the,O
underlying,O
portfolio,O
over,O
the,O
duration,O
of,O
the,O
contract,O
and,O
therefore,O
will,O
be,O
affected,O
by,O
movements,O
in,O
interest,O
rates,O
and/or,O
changes,O
in,O
the,O
market,O
value,O
of,O
the,O
underlying,O
portfolio,O
.,O
,O
The,O
initial,O
crediting,O
rate,O
is,O
established,O
based,O
on,O
the,O
market,O
interest,O
rates,O
at,O
the,O
time,O
the,O
underlying,O
portfolio,O
is,O
first,O
put,O
together,O
and,O
it,O
will,O
have,O
an,O
interest,O
crediting,O
rate,O
of,O
not,O
less,O
than,O
0,O
%,O
.,O
,O
Fair,O
values,O
for,O
constant,O
duration,O
synthetic,O
GICs,O
are,O
calculated,O
using,O
the,O
market,O
values,O
provided,O
by,O
the,O
external,O
investment,O
managers,O
BNY,I-BUSINESS
Mellon,I-BUSINESS
or,O
its,O
clients,O
have,O
engaged,O
to,O
provide,O
investment,O
services,O
.,O
,O
In,O
the,O
absence,O
of,O
an,O
actively,O
traded,O
market,O
",",O
discounted,O
cash,O
flows,O
are,O
only,O
an,O
estimate,O
of,O
the,O
contract,O
s,O
economic,O
value,O
.,O
,O
These,O
values,O
are,O
not,O
a,O
useful,O
value,O
for,O
participant,O
statement,O
purposes,O
nor,O
are,O
they,O
representative,O
of,O
the,O
value,O
that,O
may,O
be,O
received,O
from,O
those,O
contracts,O
in,O
either,O
a,O
participant,O
disbursement,O
or,O
an,O
early,O
termination,O
of,O
the,O
contract,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
It,O
is,O
probable,O
that,O
withdrawals,O
and,O
transfers,O
resulting,O
from,O
the,O
following,O
events,O
will,O
limit,O
the,O
ability,O
of,O
the,O
fund,O
to,O
transact,O
at,O
book,O
or,O
contract,O
value,O
.,O
,O
Instead,O
",",O
market,O
value,O
will,O
likely,O
be,O
used,O
in,O
determining,O
the,O
payouts,O
to,O
the,O
participants,O
:,O
,O
In,O
general,O
",",O
issuers,O
may,O
terminate,O
the,O
contract,O
and,O
settle,O
at,O
other,O
than,O
contract,O
value,O
if,O
the,O
qualification,O
status,O
of,O
employer,O
or,O
plan,O
changes,O
",",O
breach,O
of,O
material,O
obligations,O
under,O
the,O
contract,O
and,O
misrepresentation,O
by,O
the,O
contract,O
holder,O
",",O
or,O
failure,O
of,O
the,O
underlying,O
portfolio,O
to,O
conform,O
to,O
the,O
pre-established,O
investment,O
guidelines,O
.,O
,O
All,O
contracts,O
are,O
benefit,O
responsive,O
unless,O
otherwise,O
noted,O
.,O
,O
ASC,I-LEGISLATION/ACT
820,O
",",O
Fair,I-MISCELLANEOUS
Value,I-MISCELLANEOUS
Measurements,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Disclosures,I-MISCELLANEOUS
",",O
provides,O
the,O
framework,O
for,O
measuring,O
fair,O
value,O
.,O
,O
That,O
framework,O
provides,O
a,O
fair,O
value,O
hierarchy,O
that,O
prioritizes,O
the,O
inputs,O
to,O
valuation,O
techniques,O
used,O
to,O
measure,O
fair,O
value,O
.,O
,O
The,O
hierarchy,O
gives,O
the,O
highest,O
priority,O
to,O
unadjusted,O
quoted,O
prices,O
in,O
active,O
markets,O
for,O
identical,O
assets,O
or,O
liabilities,O
(,O
level,O
1,O
measurements,O
),O
and,O
the,O
lowest,O
priority,O
to,O
unobservable,O
inputs,O
(,O
level,O
3,O
measurements,O
),O
.,O
,O
The,O
three,O
levels,O
of,O
the,O
fair,O
value,O
hierarchy,O
under,O
ASC,O
820,O
are,O
described,O
below,O
:,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
The,O
asset,O
s,O
or,O
liability,O
s,O
fair,O
value,O
measurement,O
level,O
within,O
the,O
fair,O
value,O
hierarchy,O
is,O
based,O
on,O
the,O
lowest,O
level,O
of,O
any,O
input,O
that,O
is,O
significant,O
to,O
the,O
fair,O
value,O
measurement,O
.,O
,O
Valuation,O
techniques,O
used,O
need,O
to,O
maximize,O
the,O
use,O
of,O
observable,O
inputs,O
and,O
minimize,O
the,O
use,O
of,O
unobservable,O
inputs,O
.,O
,O
The,O
following,O
is,O
a,O
description,O
of,O
the,O
valuation,O
methodologies,O
used,O
for,O
assets,O
measured,O
at,O
fair,O
value,O
.,O
,O
There,O
have,O
been,O
no,O
changes,O
in,O
the,O
methodologies,O
used,O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
.,O
,O
Money,O
market,O
and,O
interest,O
bearing,O
cash,O
are,O
valued,O
at,O
cost,O
",",O
which,O
approximates,O
fair,O
value,O
.,O
,O
Mutual,O
funds,O
are,O
valued,O
at,O
the,O
net,O
asset,O
value,O
of,O
shares,O
held,O
by,O
the,O
Plan,O
at,O
year-end,O
",",O
except,O
for,O
the,O
BlackRock,I-BUSINESS
FFI,I-BUSINESS
Premier,I-BUSINESS
Institutional,I-BUSINESS
Fund,I-BUSINESS
which,O
is,O
valued,O
pursuant,O
to,O
the,O
amortized,O
cost,O
method,O
.,O
,O
The,O
amortized,O
cost,O
method,O
approximates,O
fair,O
value,O
by,O
valuing,O
each,O
portfolio,O
investment,O
at,O
its,O
acquisition,O
cost,O
as,O
adjusted,O
for,O
amortization,O
of,O
premium,O
or,O
accretion,O
of,O
discount,O
on,O
a,O
straight-line,O
basis,O
over,O
the,O
instrument,O
s,O
remaining,O
life,O
.,O
,O
Collective,O
investment,O
funds,O
are,O
valued,O
based,O
on,O
the,O
closing,O
market,O
price,O
reported,O
on,O
the,O
active,O
market,O
on,O
which,O
the,O
underlying,O
investments,O
are,O
traded,O
.,O
,O
Common,O
stock,O
is,O
valued,O
at,O
the,O
closing,O
price,O
reported,O
on,O
the,O
active,O
market,O
on,O
which,O
the,O
securities,O
are,O
traded,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Investment,O
contracts,O
",",O
including,O
wrap,O
contracts,O
",",O
held,O
in,O
the,O
Master,O
Trust,O
which,O
are,O
comprised,O
of,O
fixed,O
maturity,O
synthetic,O
GIC,O
",",O
constant,O
duration,O
synthetic,O
GIC,O
",",O
variable,O
rate,O
synthetic,O
GIC,O
and,O
traditional,O
GIC,O
are,O
valued,O
using,O
the,O
present,O
value,O
of,O
the,O
contracts,O
future,O
cash,O
flow,O
values,O
discounted,O
by,O
comparable,O
duration,O
Wall,I-MISCELLANEOUS
Street,I-MISCELLANEOUS
Journal,I-MISCELLANEOUS
GIC,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
rates,O
.,O
,O
In,O
relation,O
to,O
Master,O
Trust,O
GIC,O
contracts,O
",",O
principal,O
protection,O
is,O
purchased,O
from,O
the,O
issuer,O
in,O
the,O
form,O
of,O
a,O
wrap,O
.,O
,O
These,O
wraps,O
are,O
valued,O
based,O
on,O
an,O
internal,O
pricing,O
matrix,O
which,O
uses,O
an,O
income,O
approach,O
to,O
determine,O
the,O
present,O
value,O
of,O
the,O
fee,O
payments,O
related,O
to,O
the,O
contract,O
",",O
using,O
both,O
current,O
contractual,O
fees,O
as,O
well,O
as,O
replacement,O
fees,O
generated,O
by,O
matrix,O
pricing,O
(,O
see,O
Note,O
5,O
:,O
Interest,O
in,O
the,O
Stable,I-BUSINESS
Value,I-BUSINESS
Master,I-BUSINESS
Trust,I-BUSINESS
),O
.,O
,O
The,O
methods,O
described,O
above,O
may,O
produce,O
a,O
fair,O
value,O
calculation,O
that,O
may,O
not,O
be,O
indicative,O
of,O
net,O
realizable,O
value,O
or,O
reflective,O
of,O
future,O
fair,O
values,O
.,O
,O
Furthermore,O
",",O
while,O
management,O
believes,O
its,O
valuation,O
methods,O
are,O
appropriate,O
and,O
consistent,O
with,O
other,O
market,O
participants,O
",",O
the,O
use,O
of,O
different,O
methodologies,O
or,O
assumptions,O
to,O
determine,O
the,O
fair,O
value,O
of,O
certain,O
financial,O
instruments,O
could,O
result,O
in,O
a,O
different,O
fair,O
value,O
measurement,O
at,O
the,O
reporting,O
date,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
by,O
level,O
",",O
within,O
the,O
fair,O
value,O
hierarchy,O
",",O
the,O
Master,O
Trust,O
s,O
investments,O
at,O
fair,O
value,O
as,O
of,O
December,O
31,O
",",O
2010,O
:,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
The,O
following,O
table,O
sets,O
forth,O
the,O
summary,O
of,O
changes,O
in,O
the,O
fair,O
value,O
of,O
the,O
Master,O
Trust,O
s,O
level,O
3,O
investments,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
:,O
,O
The,O
following,O
tables,O
set,O
forth,O
by,O
level,O
",",O
within,O
the,O
fair,O
value,O
hierarchy,O
",",O
the,O
Plan,O
s,O
non-Master,O
Trust,O
investments,O
at,O
fair,O
value,O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
:,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
The,O
Plan,O
s,O
investments,O
(,O
including,O
gains,O
and,O
losses,O
on,O
investments,O
bought,O
and,O
sold,O
",",O
as,O
well,O
as,O
held,O
during,O
the,O
year,O
),O
appreciated,O
(,O
depreciated,O
),O
in,O
fair,O
value,O
as,O
follows,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
:,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Other,O
income,O
substantially,O
represents,O
the,O
Plan,O
s,O
allocable,O
share,O
of,O
proceeds,O
from,O
a,O
judicially,O
approved,O
settlement,O
of,O
a,O
class,O
action,O
lawsuit,O
brought,O
by,O
participants,O
in,O
the,O
Plan,O
and,O
certain,O
other,O
Company,O
retirement,O
plans,O
that,O
alleged,O
ERISA,I-LEGISLATION/ACT
fiduciary,O
violations,O
with,O
respect,O
to,O
plan,O
investments,O
in,O
Company,O
common,O
stock,O
.,O
,O
Although,O
it,O
has,O
not,O
expressed,O
any,O
intention,O
to,O
do,O
so,O
",",O
the,O
Company,O
has,O
the,O
right,O
under,O
the,O
Plan,O
to,O
discontinue,O
its,O
contributions,O
at,O
any,O
time,O
and,O
to,O
terminate,O
the,O
Plan,O
subject,O
to,O
the,O
provisions,O
set,O
forth,O
in,O
ERISA,I-LEGISLATION/ACT
.,O
,O
In,O
the,O
event,O
the,O
Plan,O
terminates,O
",",O
the,O
total,O
amounts,O
credited,O
to,O
the,O
accounts,O
of,O
each,O
participant,O
become,O
fully,O
vested,O
",",O
no,O
further,O
allocations,O
shall,O
be,O
made,O
",",O
and,O
no,O
eligible,O
employee,O
shall,O
become,O
a,O
participant,O
after,O
the,O
date,O
of,O
termination,O
.,O
,O
Certain,O
investment,O
options,O
offered,O
under,O
the,O
Plan,O
are,O
managed,O
by,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
Investment,I-BUSINESS
Managers,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
",",O
an,O
affiliate,O
of,O
the,O
Company,O
.,O
,O
Consequently,O
",",O
parties-in-interest,O
may,O
nominally,O
participate,O
in,O
certain,O
transactions,O
involving,O
Plan,O
assets,O
.,O
,O
Retirement,O
&,O
Philanthropic,O
Services,O
",",O
a,O
division,O
of,O
MLPF,I-BUSINESS
&,I-BUSINESS
S,I-BUSINESS
",",O
a,O
subsidiary,O
of,O
the,O
Company,O
",",O
and,O
BANA,I-BUSINESS
perform,O
administrative,O
services,O
for,O
the,O
Plan,O
.,O
,O
Employees,O
of,O
these,O
affiliates,O
may,O
also,O
be,O
participants,O
in,O
the,O
Plan,O
.,O
,O
Certain,O
other,O
administrative,O
functions,O
are,O
performed,O
by,O
employees,O
of,O
the,O
Corporation,O
who,O
may,O
also,O
be,O
participants,O
in,O
the,O
Plan,O
.,O
,O
No,O
such,O
employee,O
receives,O
compensation,O
from,O
the,O
Plan,O
.,O
,O
Fees,O
paid,O
by,O
the,O
Plan,O
for,O
investment,O
management,O
services,O
are,O
depicted,O
in,O
the,O
mutual,O
fund,O
prospectus,O
in,O
the,O
designated,O
investment,O
options,O
and,O
were,O
included,O
as,O
a,O
reduction,O
of,O
the,O
return,O
earned,O
on,O
such,O
fund,O
.,O
,O
Certain,O
investments,O
in,O
the,O
Plan,O
are,O
managed,O
by,O
BlackRock,I-BUSINESS
Investment,I-BUSINESS
Management,I-BUSINESS
LLC,I-BUSINESS
(,O
BlackRock,I-BUSINESS
),O
.,O
,O
BlackRock,I-BUSINESS
is,O
an,O
indirect,O
",",O
wholly,O
owned,O
subsidiary,O
of,O
BlackRock,I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
The,O
Corporation,O
owns,O
a,O
7,O
%,O
economic,O
interest,O
in,O
BlackRock,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
As,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
the,O
Plan,O
held,O
investments,O
in,O
BlackRock,I-BUSINESS
mutual,O
funds,O
of,O
$,O
"2,370,599,710",O
and,O
$,O
"2,257,957,920",O
",",O
respectively,O
and,O
in,O
collective,O
funds,O
managed,O
by,O
BlackRock,O
of,O
$,O
"392,709,299",O
and,O
$,O
"503,944,504",O
",",O
respectively,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2010,O
",",O
cash,O
funds,O
advised,O
by,O
BlackRock,I-BUSINESS
were,O
$,O
"13,207,531",O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
the,O
Plan,O
held,O
investments,O
in,O
BAC,I-BUSINESS
common,O
stock,O
valued,O
at,O
$,O
"433,285,380",O
and,O
$,O
"451,698,598",O
",",O
respectively,O
.,O
,O
The,O
Plan,O
earned,O
dividends,O
of,O
$,O
"1,776,573",O
on,O
BAC,O
common,O
stock,O
held,O
during,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
The,O
following,O
is,O
a,O
reconciliation,O
of,O
net,O
assets,O
available,O
for,O
benefits,O
per,O
the,O
financial,O
statements,O
to,O
Form,I-MISCELLANEOUS
5500,I-MISCELLANEOUS
:,O
,O
The,O
following,O
is,O
a,O
reconciliation,O
of,O
total,O
income,O
per,O
the,O
financial,O
statements,O
to,O
Form,I-MISCELLANEOUS
5500,I-MISCELLANEOUS
:,O
,O
The,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
(,O
IRS,I-GOVERNMENT
),O
has,O
determined,O
and,O
informed,O
the,O
Company,O
by,O
letter,O
dated,O
July,O
22,O
",",O
2002,O
that,O
the,O
Plan,O
and,O
related,O
trust,O
are,O
designed,O
in,O
accordance,O
with,O
applicable,O
sections,O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
(,O
IRC,I-LEGISLATION/ACT
),O
.,O
,O
The,O
Plan,O
has,O
been,O
amended,O
since,O
receiving,O
the,O
determination,O
letter,O
.,O
,O
In,O
January,O
of,O
2010,O
",",O
the,O
Plan,O
Sponsor,O
filed,O
for,O
an,O
updated,O
determination,O
letter,O
.,O
,O
The,O
application,O
is,O
currently,O
pending,O
review,O
by,O
the,O
IRS,O
.,O
,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
The,O
Plan,O
administrator,O
believes,O
that,O
the,O
Plan,O
is,O
currently,O
designed,O
and,O
operated,O
in,O
compliance,O
with,O
the,O
applicable,O
requirements,O
of,O
the,O
IRC,I-LEGISLATION/ACT
.,O
,O
Under,O
present,O
federal,O
income,O
tax,O
laws,O
",",O
a,O
participating,O
employee,O
will,O
not,O
be,O
subject,O
to,O
federal,O
income,O
taxes,O
on,O
the,O
contributions,O
by,O
the,O
employer,O
",",O
or,O
on,O
the,O
interest,O
",",O
dividends,O
or,O
profits,O
on,O
the,O
sale,O
of,O
investments,O
received,O
by,O
the,O
Plan,O
s,O
Trustee,O
",",O
until,O
the,O
participating,O
employee,O
s,O
account,O
is,O
distributed,O
.,O
,O
GAAP,I-LEGISLATION/ACT
requires,O
Plan,O
management,O
to,O
evaluate,O
uncertain,O
tax,O
positions,O
taken,O
by,O
the,O
Plan,O
.,O
,O
The,O
financial,O
statement,O
effects,O
of,O
a,O
tax,O
position,O
are,O
recognized,O
when,O
the,O
position,O
is,O
more,O
likely,O
than,O
not,O
to,O
be,O
sustained,O
upon,O
examination,O
by,O
the,O
IRS,I-GOVERNMENT
.,O
,O
The,O
tax,O
positions,O
taken,O
by,O
the,O
Plan,O
have,O
been,O
analyzed,O
and,O
",",O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
there,O
are,O
no,O
uncertain,O
tax,O
positions,O
taken,O
or,O
expected,O
to,O
be,O
taken,O
that,O
would,O
require,O
recognition,O
of,O
a,O
liability,O
(,O
or,O
asset,O
),O
or,O
disclosure,O
in,O
the,O
financial,O
statements,O
.,O
,O
The,O
Plan,O
is,O
subject,O
to,O
routine,O
audits,O
by,O
taxing,O
jurisdictions,O
;,O
however,O
",",O
there,O
are,O
currently,O
no,O
audits,O
for,O
any,O
tax,O
periods,O
in,O
progress,O
.,O
,O
The,O
Plan,O
administrator,O
believes,O
it,O
is,O
no,O
longer,O
subject,O
to,O
income,O
tax,O
examinations,O
for,O
years,O
prior,O
to,O
2007,O
.,O
,O
Column,O
(,O
d,O
),O
Cost,O
was,O
omitted,O
as,O
all,O
investments,O
are,O
participant-directed,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
trustees,O
(,O
or,O
other,O
persons,O
who,O
administer,O
the,O
employee,O
benefit,O
plan,O
),O
have,O
duly,O
caused,O
this,O
annual,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
hereunto,O
duly,O
authorized,O
.,O
,O
Consent,O
of,O
Morris,I-BUSINESS
",",I-BUSINESS
Davis,I-BUSINESS
&,I-BUSINESS
Chan,I-BUSINESS
LLP,I-BUSINESS
Exhibit,O
23.1,O
We,O
consent,O
to,O
the,O
incorporation,O
by,O
reference,O
in,O
the,O
Registration,O
Statement,O
No.,O
333-153771,O
on,O
Form,I-MISCELLANEOUS
S-8,I-MISCELLANEOUS
of,O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
Corporation,I-BUSINESS
and,O
the,O
Registration,O
Statement,O
No.,O
333-41425,O
and,O
No.,O
333-85421,O
on,O
Form,I-MISCELLANEOUS
S-8,I-MISCELLANEOUS
of,O
Merrill,I-BUSINESS
Lynch,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
each,O
filed,O
with,O
the,O
Securities,I-BUSINESS
and,I-BUSINESS
Exchange,I-BUSINESS
Commission,I-BUSINESS
",",O
pertaining,O
to,O
Merrill,I-MISCELLANEOUS
Lynch,I-MISCELLANEOUS
&,I-MISCELLANEOUS
Co.,I-MISCELLANEOUS
",",I-MISCELLANEOUS
Inc.,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
&,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
of,O
our,O
report,O
dated,O
June,O
23,O
",",O
2011,O
",",O
with,O
respect,O
to,O
the,O
financial,O
statements,O
and,O
supplemental,O
schedule,O
of,O
the,O
Merrill,I-MISCELLANEOUS
Lynch,I-MISCELLANEOUS
&,I-MISCELLANEOUS
Co.,I-MISCELLANEOUS
",",I-MISCELLANEOUS
Inc.,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
&,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
included,O
in,O
the,O
Annual,O
Report,O
(,O
Form,I-MISCELLANEOUS
11-K,I-MISCELLANEOUS
),O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
for,O
the,O
year,O
then,O
ended,O
.,O
,O
-DOCSTART-,O
,O
UNITED,I-GOVERNMENT
STATES,I-GOVERNMENT
SECURITIES,I-GOVERNMENT
AND,I-GOVERNMENT
EXCHANGE,I-GOVERNMENT
COMMISSION,I-GOVERNMENT
Washington,I-LOCATION
",",I-LOCATION
D.C,I-LOCATION
.,I-LOCATION
,O
FORM,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
(,O
Mark,O
One,O
),O
[,O
X,O
],O
QUARTERLY,O
REPORT,O
PURSUANT,O
TO,O
SECTION,O
13,O
OR,O
15,O
(,O
d,O
),O
OF,O
THE,O
SECURITIES,I-LEGISLATION/ACT
EXCHANGE,I-LEGISLATION/ACT
ACT,I-LEGISLATION/ACT
OF,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
For,O
the,O
quarterly,O
period,O
ended,O
April,O
30,O
",",O
2011,O
or,O
[,O
],O
TRANSITION,O
REPORT,O
UNDER,O
SECTION,O
13,O
OR,O
15,O
(,O
d,O
),O
OF,O
THE,O
SECURITIES,I-LEGISLATION/ACT
EXCHANGE,I-LEGISLATION/ACT
ACT,I-LEGISLATION/ACT
OF,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
For,O
the,O
transition,O
period,O
from,O
________________________,O
to,O
________________________,O
Commission,O
File,O
Number,O
000-50861,O
AMERICAS,I-BUSINESS
WIND,I-BUSINESS
ENERGY,I-BUSINESS
CORPORATION,I-BUSINESS
(,O
Exact,O
name,O
of,O
registrant,O
as,O
specified,O
in,O
its,O
charter,O
),O
,O
(,O
State,O
or,O
other,O
jurisdiction,O
of,O
incorporation,O
or,O
organization,O
),O
,O
416.233.5670,O
(,O
Registrant,O
s,O
telephone,O
number,O
",",O
including,O
area,O
code,O
),O
,O
(,O
Former,O
name,O
",",O
former,O
address,O
and,O
former,O
fiscal,O
year,O
",",O
if,O
changed,O
since,O
last,O
report,O
),O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
(,O
1,O
),O
has,O
filed,O
all,O
reports,O
required,O
to,O
be,O
filed,O
by,O
Section,O
13,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
during,O
the,O
preceding,O
12,O
months,O
(,O
or,O
for,O
such,O
shorter,O
period,O
that,O
the,O
registrant,O
was,O
required,O
to,O
file,O
such,O
reports,O
),O
",",O
and,O
(,O
2,O
),O
has,O
been,O
subject,O
to,O
such,O
filing,O
requirements,O
for,O
the,O
past,O
90,O
days,O
.,O
,O
[,O
X,O
],O
YES,O
[,O
],O
NO,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
has,O
submitted,O
electronically,O
and,O
posted,O
on,O
its,O
corporate,O
Web,O
site,O
",",O
if,O
any,O
",",O
every,O
Interactive,O
Data,O
File,O
required,O
to,O
be,O
submitted,O
and,O
posted,O
pursuant,O
to,O
Rule,O
405,O
of,O
Regulation,I-LEGISLATION/ACT
S-T,I-LEGISLATION/ACT
(,O
§232.405,O
of,O
this,O
chapter,O
),O
during,O
the,O
preceding,O
12,O
months,O
(,O
or,O
for,O
such,O
shorter,O
period,O
that,O
the,O
registrant,O
was,O
required,O
to,O
submit,O
and,O
post,O
such,O
files,O
),O
.,O
,O
[,O
],O
YES,O
[,O
],O
NO,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
large,O
accelerated,O
filer,O
",",O
an,O
accelerated,O
filer,O
",",O
a,O
non-accelerated,O
filer,O
",",O
or,O
a,O
small,O
reporting,O
company,O
.,O
,O
See,O
the,O
definitions,O
of,O
large,O
accelerated,O
filer,O
",",O
accelerated,O
filer,O
and,O
smaller,O
reporting,O
company,O
in,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
(,O
Do,O
not,O
check,O
if,O
a,O
smaller,O
reporting,O
company,O
),O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
shell,O
company,O
(,O
as,O
defined,O
in,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
[,O
],O
YES,O
[,O
X,O
],O
NO,O
APPLICABLE,O
ONLY,O
TO,O
ISSUERS,O
INVOLVED,O
IN,O
BANKRUPTCY,O
PROCEEDINGS,O
DURING,O
THE,O
PRECEDING,O
FIVE,O
YEARS,O
Check,O
whether,O
the,O
registrant,O
has,O
filed,O
all,O
documents,O
and,O
reports,O
required,O
to,O
be,O
filed,O
by,O
Sections,O
12,O
",",O
13,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
after,O
the,O
distribution,O
of,O
securities,O
under,O
a,O
plan,O
confirmed,O
by,O
a,O
court,O
.,O
,O
[,O
],O
YES,O
[,O
],O
NO,O
APPLICABLE,O
ONLY,O
TO,O
CORPORATE,O
ISSUERS,O
Indicate,O
the,O
number,O
of,O
shares,O
outstanding,O
of,O
each,O
of,O
the,O
issuer,O
s,O
classes,O
of,O
common,O
stock,O
",",O
as,O
of,O
the,O
latest,O
practicable,O
date,O
.,O
,O
PART,O
I,O
-,O
FINANCIAL,O
INFORMATION,O
Item,O
1,O
.,O
,O
Financial,O
Statements,O
Our,O
unaudited,O
consolidated,O
interim,O
financial,O
statements,O
for,O
the,O
three,O
and,O
nine,O
month,O
periods,O
ended,O
April,O
30,O
",",O
2011,O
form,O
part,O
of,O
this,O
quarterly,O
report,O
.,O
,O
They,O
are,O
stated,O
in,O
United,I-LOCATION
States,I-LOCATION
Dollars,O
(,O
US,O
$,O
),O
and,O
are,O
prepared,O
in,O
accordance,O
with,O
United,I-LOCATION
States,I-LOCATION
generally,B-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
.,O
,O
AMERICAS,I-BUSINESS
WIND,I-BUSINESS
ENERGY,I-BUSINESS
CORPORATION,I-BUSINESS
CONDENSED,O
CONSOLIDATED,O
INTERIM,O
FINANCIAL,O
STATEMENTS,O
FOR,O
THE,O
NINE-MONTH,O
PERIODS,O
ENDED,O
APRIL,O
30,O
",",O
2011,O
AND,O
2010,O
UNAUDITED,O
(,O
EXPRESSED,O
IN,O
U.S.,I-LOCATION
,O
(,O
The,O
accompanying,O
notes,O
are,O
an,O
integral,O
part,O
of,O
these,O
condensed,O
consolidated,O
interim,O
financial,O
statements,O
.,O
),O
,O
AMERICAS,I-BUSINESS
WIND,I-BUSINESS
ENERGY,I-BUSINESS
CORPORATION,I-BUSINESS
Condensed,O
Consolidated,O
Interim,O
Statements,O
of,O
Operations,O
and,O
Comprehensive,O
Loss,O
For,O
the,O
Three-Month,O
and,O
Nine-Month,O
Periods,O
Ended,O
April,O
30,O
",",O
2011,O
and,O
2010,O
and,O
the,O
Period,O
from,O
July,O
29,O
",",O
2002,O
(,O
date,O
of,O
inception,O
),O
through,O
April,O
30,O
",",O
2011,O
(,O
Expressed,O
in,O
U.S.,I-LOCATION
,O
Gain,O
on,O
sale,O
of,O
investment,O
in,O
Emergya,I-BUSINESS
Wind,I-BUSINESS
Technologies,I-BUSINESS
B.V.,I-BUSINESS
.,I-BUSINESS
,O
Benefit,O
from,O
income,O
taxes,O
(,O
note,O
8,O
),O
,O
(,O
The,O
accompanying,O
notes,O
are,O
an,O
integral,O
part,O
of,O
these,O
condensed,O
consolidated,O
interim,O
financial,O
statements,O
.,O
),O
,O
AMERICAS,I-BUSINESS
WIND,I-BUSINESS
ENERGY,I-BUSINESS
CORPORATION,I-BUSINESS
Condensed,O
Consolidated,O
Interim,O
Statements,O
of,O
Cash,O
Flows,O
For,O
the,O
Nine-Month,O
Periods,O
Ended,O
April,O
30,O
",",O
2011,O
and,O
2010,O
andCumulative,O
from,O
Inception,O
(,O
July,O
29,O
",",O
2002,O
),O
through,O
April,O
30,O
",",O
2011,O
(,O
Expressed,O
in,O
U.S.,I-LOCATION
,O
Gain,O
on,O
sale,O
of,O
investment,O
in,O
EWT,I-BUSINESS
B.V.,I-BUSINESS
,O
Changes,O
in,O
non-cash,O
working,O
capital,O
",",O
net,O
of,O
effects,O
from,O
acquisition,O
:,O
,O
Advances,O
from,O
Digital,I-BUSINESS
Predictive,I-BUSINESS
Systems,I-BUSINESS
Inc.,I-BUSINESS
,O
Repayment,O
to,O
Digital,I-BUSINESS
Predictive,I-BUSINESS
Systems,I-BUSINESS
Inc.,I-BUSINESS
,O
Proceeds,O
from,O
sale,O
of,O
investment,O
in,O
Emergya,I-BUSINESS
Wind,I-BUSINESS
Technologies,I-BUSINESS
B.V.,I-BUSINESS
.,I-BUSINESS
,O
(,O
The,O
accompanying,O
notes,O
are,O
an,O
integral,O
part,O
of,O
these,O
condensed,O
consolidated,O
interim,O
financial,O
statements,O
.,O
),O
,O
AMERICAS,I-BUSINESS
WIND,I-BUSINESS
ENERGY,I-BUSINESS
CORPORATION,I-BUSINESS
AND,O
SUBSIDIARIES,O
(,O
A,O
DEVELOPMENT,O
STAGE,O
COMPANY,O
),O
Notes,O
to,O
Condensed,O
Consolidated,O
Interim,O
Financial,O
Statements,O
April,O
30,O
",",O
2011,O
and,O
2010,O
(,O
Expressed,O
in,O
U.S.,I-LOCATION
,O
Americas,I-BUSINESS
Wind,I-BUSINESS
Energy,I-BUSINESS
Corporation,I-BUSINESS
(,O
the,O
``,O
Company,O
'',O
),O
was,O
incorporated,O
under,O
the,O
laws,O
of,O
the,O
State,O
of,O
Nevada,I-LOCATION
on,O
August,O
22,O
",",O
2003,O
.,O
,O
The,O
Company,O
was,O
acquired,O
in,O
a,O
reverse,O
merger,O
transaction,O
on,O
August,O
11,O
",",O
2006,O
.,O
,O
The,O
Company,O
changed,O
its,O
ordinary,O
course,O
of,O
business,O
from,O
that,O
of,O
establishing,O
a,O
marine,O
adventure,O
tourism,O
business,O
to,O
that,O
of,O
manufacturing,O
and,O
distributing,O
wind,O
power,O
turbines,O
to,O
wind,O
farm,O
developers,O
throughout,O
the,O
Americas,O
through,O
its,O
operating,O
subsidiary,O
incorporated,O
in,O
Canada,I-LOCATION
",",O
Americas,I-BUSINESS
Wind,I-BUSINESS
Energy,I-BUSINESS
Inc.,I-BUSINESS
",",O
which,O
has,O
been,O
involved,O
in,O
the,O
wind,O
turbines,O
business,O
since,O
July,O
29,O
",",O
2002,O
up,O
until,O
June,O
11,O
",",O
2010,O
.,O
,O
Following,O
the,O
finalized,O
settlement,O
agreement,O
on,O
June,O
11,O
",",O
2010,O
the,O
Company,O
discontinued,O
its,O
operations,O
in,O
the,O
wind,O
turbines,O
business,O
and,O
has,O
focused,O
its,O
activities,O
on,O
managing,O
the,O
settlement,O
agreement,O
and,O
seeking,O
out,O
and,O
investigating,O
potential,O
business,O
opportunities,O
in,O
a,O
business,O
combination,O
.,O
,O
The,O
Company,O
's,O
consolidated,O
financial,O
statements,O
are,O
presented,O
on,O
a,O
going,O
concern,O
basis,O
",",O
which,O
contemplates,O
the,O
realization,O
of,O
assets,O
and,O
discharge,O
of,O
liabilities,O
in,O
the,O
normal,O
course,O
of,O
business,O
.,O
,O
The,O
Company,O
's,O
negative,O
working,O
capital,O
and,O
accumulated,O
deficit,O
raise,O
substantial,O
doubt,O
as,O
to,O
its,O
ability,O
to,O
continue,O
as,O
a,O
going,O
concern,O
.,O
,O
As,O
of,O
April,O
30,O
",",O
2011,O
",",O
the,O
Company,O
had,O
negative,O
working,O
capital,O
of,O
$,O
"2,189,601",O
and,O
accumulated,O
deficit,O
of,O
$,O
"4,449,351",O
.,O
,O
The,O
Company,O
's,O
continuance,O
as,O
a,O
going,O
concern,O
is,O
dependent,O
on,O
its,O
directors,O
and,O
principal,O
stockholders,O
in,O
providing,O
financial,O
support,O
in,O
the,O
short,O
term,O
and,O
receiving,O
sufficient,O
payments,O
under,O
the,O
Settlement,O
Agreement,O
to,O
discharge,O
the,O
Company,O
s,O
liabilities,O
.,O
,O
In,O
the,O
event,O
that,O
these,O
are,O
not,O
achieved,O
",",O
the,O
assets,O
may,O
not,O
be,O
realized,O
or,O
liabilities,O
discharged,O
at,O
their,O
carrying,O
amounts,O
",",O
and,O
differences,O
from,O
the,O
carrying,O
amounts,O
reported,O
in,O
these,O
condensed,O
consolidated,O
interim,O
financial,O
statements,O
could,O
be,O
material,O
.,O
,O
The,O
accompanying,O
condensed,O
consolidated,O
interim,O
financial,O
statements,O
do,O
not,O
include,O
any,O
adjustments,O
to,O
reflect,O
the,O
possible,O
future,O
effects,O
on,O
the,O
recoverability,O
and,O
classification,O
of,O
assets,O
or,O
the,O
amounts,O
and,O
classification,O
of,O
liabilities,O
that,O
may,O
result,O
from,O
the,O
inability,O
of,O
the,O
Company,O
to,O
continue,O
as,O
a,O
going,O
concern,O
.,O
,O
AMERICAS,I-BUSINESS
WIND,I-BUSINESS
ENERGY,I-BUSINESS
CORPORATION,I-BUSINESS
AND,O
SUBSIDIARIES,O
(,O
A,O
DEVELOPMENT,O
STAGE,O
COMPANY,O
),O
Notes,O
to,O
Condensed,O
Consolidated,O
Interim,O
Financial,O
Statements,O
April,O
30,O
",",O
2011,O
and,O
2010,O
(,O
Expressed,O
in,O
U.S.,I-LOCATION
,O
The,O
accompanying,O
condensed,O
consolidated,O
interim,O
financial,O
statements,O
of,O
the,O
Company,O
have,O
been,O
prepared,O
in,O
accordance,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
(,O
``,O
US,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
'',O
),O
for,O
interim,O
financial,O
information,O
and,O
the,O
instructions,O
to,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
.,O
,O
Accordingly,O
",",O
they,O
do,O
not,O
include,O
all,O
of,O
the,O
information,O
and,O
footnotes,O
required,O
by,O
US,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
for,O
complete,O
financial,O
statements,O
.,O
,O
In,O
the,O
opinion,O
of,O
the,O
Company,O
's,O
management,O
",",O
all,O
adjustments,O
(,O
consisting,O
only,O
of,O
normal,O
recurring,O
accruals,O
),O
considered,O
necessary,O
for,O
a,O
fair,O
presentation,O
have,O
been,O
included,O
.,O
,O
Operating,O
results,O
for,O
the,O
nine-,O
month,O
period,O
ended,O
April,O
30,O
",",O
2011,O
are,O
not,O
necessarily,O
indicative,O
of,O
the,O
results,O
that,O
may,O
be,O
expected,O
for,O
the,O
full,O
fiscal,O
year,O
ending,O
July,O
31,O
",",O
2011,O
.,O
,O
The,O
accompanying,O
condensed,O
consolidated,O
interim,O
financial,O
statements,O
should,O
be,O
read,O
in,O
conjunction,O
with,O
the,O
audited,O
consolidated,O
financial,O
statements,O
of,O
the,O
Company,O
for,O
the,O
fiscal,O
year,O
ended,O
July,O
31,O
",",O
2010,O
.,O
,O
Depreciation,O
expense,O
charged,O
to,O
operations,O
amounted,O
to,O
$,O
207,O
for,O
the,O
nine,O
months,O
ended,O
April,O
30,O
",",O
2011,O
.,O
,O
The,O
amounts,O
due,O
to,O
stockholders,O
bear,O
interest,O
of,O
10,O
%,O
per,O
annum,O
",",O
are,O
unsecured,O
and,O
are,O
due,O
on,O
demand,O
.,O
,O
AMERICAS,I-BUSINESS
WIND,I-BUSINESS
ENERGY,I-BUSINESS
CORPORATION,I-BUSINESS
AND,O
SUBSIDIARIES,O
(,O
A,O
DEVELOPMENT,O
STAGE,O
COMPANY,O
),O
Notes,O
to,O
Condensed,O
Consolidated,O
Interim,O
Financial,O
Statements,O
April,O
30,O
",",O
2011,O
and,O
2010,O
(,O
Expressed,O
in,O
U.S.,I-LOCATION
,O
On,O
March,O
6,O
",",O
2008,O
",",O
the,O
Company,O
received,O
$,O
"350,000",O
pursuant,O
to,O
a,O
convertible,O
loan,O
agreement,O
.,O
,O
The,O
convertible,O
loan,O
bears,O
interest,O
at,O
2,O
%,O
above,O
the,O
Bank,I-BUSINESS
of,I-BUSINESS
Canada,I-BUSINESS
's,O
prime,O
rate,O
per,O
annum,O
(,O
as,O
of,O
April,O
30,O
",",O
2011,O
",",O
the,O
Bank,I-BUSINESS
of,I-BUSINESS
Canada,I-BUSINESS
's,O
rate,O
was,O
3.0,O
%,O
),O
",",O
payable,O
quarterly,O
",",O
is,O
unsecured,O
",",O
and,O
matured,O
on,O
March,O
6,O
",",O
2009,O
.,O
,O
As,O
the,O
convertible,O
loan,O
payable,O
was,O
not,O
repaid,O
on,O
March,O
6,O
",",O
2009,O
",",O
its,O
maturity,O
date,O
",",O
Smart,I-BUSINESS
Goal,I-BUSINESS
Investment,I-BUSINESS
Limited,I-BUSINESS
may,O
",",O
by,O
written,O
notice,O
",",O
exercise,O
its,O
right,O
of,O
conversion,O
in,O
respect,O
of,O
either,O
a,O
portion,O
of,O
or,O
the,O
total,O
outstanding,O
amount,O
of,O
the,O
loan,O
plus,O
accrued,O
interest,O
into,O
shares,O
of,O
the,O
Company,O
at,O
$,O
0.32,O
per,O
share,O
.,O
,O
As,O
of,O
April,O
30,O
",",O
2011,O
",",O
Smart,I-BUSINESS
Goal,I-BUSINESS
Investment,I-BUSINESS
Limited,I-BUSINESS
has,O
not,O
exercised,O
the,O
right,O
of,O
conversion,O
.,O
,O
At,O
the,O
date,O
of,O
issuance,O
",",O
the,O
conversion,O
feature,O
of,O
the,O
convertible,O
loan,O
was,O
in-the-money,O
.,O
,O
The,O
intrinsic,O
value,O
of,O
this,O
beneficial,O
conversion,O
feature,O
was,O
$,O
"278,560",O
.,O
,O
In,O
accordance,O
with,O
ASC,I-LEGISLATION/ACT
470-20,O
",",O
Debt,I-MISCELLANEOUS
with,I-MISCELLANEOUS
Conversion,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Other,I-MISCELLANEOUS
Options,I-MISCELLANEOUS
",",O
this,O
amount,O
was,O
measured,O
but,O
was,O
not,O
recognized,O
as,O
of,O
April,O
30,O
",",O
2011,O
",",O
and,O
will,O
be,O
recorded,O
as,O
additional,O
paid-in,O
capital,O
when,O
converted,O
.,O
,O
On,O
April,O
7,O
",",O
2011,O
",",O
the,O
Company,O
issued,O
"5,000,000",O
common,O
shares,O
to,O
a,O
current,O
stockholder,O
of,O
the,O
Company,O
in,O
exchange,O
for,O
the,O
settlement,O
of,O
$,O
"150,000",O
of,O
debt,O
owing,O
to,O
the,O
stockholder,O
.,O
,O
On,O
June,O
7,O
",",O
2010,O
",",O
the,O
Company,O
issued,O
"5,000,000",O
common,O
shares,O
to,O
a,O
current,O
stockholder,O
of,O
the,O
Company,O
in,O
exchange,O
for,O
the,O
settlement,O
of,O
$,O
"200,000",O
of,O
debt,O
owing,O
to,O
the,O
stockholder,O
.,O
,O
On,O
July,O
20,O
",",O
2010,O
",",O
a,O
current,O
stockholder,O
of,O
the,O
Company,O
converted,O
"1,076,923",O
class,O
A,O
special,O
voting,O
shares,O
for,O
"1,076,923",O
common,O
shares,O
of,O
the,O
Company,O
.,O
,O
On,O
August,O
11,O
",",O
2006,O
",",O
the,O
Company,O
entered,O
into,O
a,O
reverse,O
merger,O
transaction,O
through,O
its,O
subsidiary,O
6544797,O
Canada,I-BUSINESS
Ltd.,I-BUSINESS
(,O
Purchaser,O
),O
with,O
AWE,I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
Purchaser,O
issued,O
"30,000,000",O
class,O
A,O
preferred,O
shares,O
(,O
Preferred,O
Shares,O
),O
convertible,O
to,O
"30,000,000",O
common,O
shares,O
of,O
the,O
Company,O
and,O
"30,000,000",O
class,O
A,O
special,O
voting,O
shares,O
(,O
Special,O
Voting,O
Shares,O
),O
of,O
the,O
Company,O
to,O
AWE,I-BUSINESS
Inc.,I-BUSINESS
in,O
exchange,O
for,O
all,O
of,O
the,O
shares,O
of,O
AWE,I-BUSINESS
Inc.,I-BUSINESS
to,O
maintain,O
the,O
voting,O
rights,O
.,O
,O
AMERICAS,I-BUSINESS
WIND,I-BUSINESS
ENERGY,I-BUSINESS
CORPORATION,I-BUSINESS
AND,O
SUBSIDIARIES,O
(,O
A,O
DEVELOPMENT,O
STAGE,O
COMPANY,O
),O
Notes,O
to,O
Condensed,O
Consolidated,O
Interim,O
Financial,O
Statements,O
April,O
30,O
",",O
2011,O
and,O
2010,O
(,O
Expressed,O
in,O
U.S.,I-LOCATION
,O
The,O
Preferred,O
Shares,O
and,O
the,O
Special,O
Voting,O
Shares,O
",",O
when,O
taken,O
together,O
",",O
are,O
the,O
economic,O
equivalent,O
of,O
the,O
corresponding,O
common,O
shares,O
of,O
the,O
Company,O
and,O
entitle,O
the,O
holder,O
to,O
one,O
vote,O
on,O
the,O
same,O
basis,O
and,O
in,O
the,O
same,O
circumstances,O
as,O
one,O
corresponding,O
share,O
of,O
the,O
common,O
shares,O
of,O
the,O
Company,O
and,O
are,O
intended,O
to,O
be,O
the,O
same,O
in,O
all,O
respects,O
as,O
the,O
regular,O
common,O
shares,O
and,O
are,O
not,O
subordinate,O
.,O
,O
The,O
exchangeable,O
shares,O
are,O
exchangeable,O
at,O
any,O
time,O
",",O
at,O
the,O
option,O
of,O
the,O
holder,O
",",O
on,O
a,O
one-for-one,O
basis,O
with,O
the,O
corresponding,O
common,O
shares,O
of,O
the,O
Company,O
.,O
,O
For,O
financial,O
statement,O
presentation,O
purposes,O
only,O
",",O
"18,107,692",O
(,O
2009,O
"18,107,692",O
),O
Preferred,O
Shares,O
of,O
the,O
Purchaser,O
were,O
presented,O
as,O
having,O
been,O
converted,O
into,O
"18,107,692",O
(,O
2009,O
"18,107,692",O
),O
common,O
shares,O
of,O
the,O
Company,O
and,O
the,O
"18,107,692",O
(,O
2009,O
"18,107,692",O
),O
Special,O
Voting,O
Shares,O
of,O
the,O
Company,O
were,O
presented,O
as,O
having,O
been,O
converted,O
and,O
cancelled,O
to,O
more,O
accurately,O
reflect,O
the,O
substance,O
of,O
the,O
reverse,O
merger,O
transaction,O
.,O
,O
For,O
the,O
year,O
ended,O
July,O
31,O
",",O
2010,O
",",O
the,O
Company,O
converted,O
a,O
total,O
of,O
"1,076,923",O
(,O
2009,O
"2,000,000",O
),O
Special,O
Voting,O
Shares,O
into,O
common,O
shares,O
.,O
,O
The,O
Special,O
Voting,O
Shares,O
are,O
presented,O
in,O
the,O
consolidated,O
balance,O
sheets,O
as,O
follows,O
:,O
,O
AMERICAS,I-BUSINESS
WIND,I-BUSINESS
ENERGY,I-BUSINESS
CORPORATION,I-BUSINESS
AND,O
SUBSIDIARIES,O
(,O
A,O
DEVELOPMENT,O
STAGE,O
COMPANY,O
),O
Notes,O
to,O
Condensed,O
Consolidated,O
Interim,O
Financial,O
Statements,O
April,O
30,O
",",O
2011,O
and,O
2010,O
(,O
Expressed,O
in,O
U.S.,I-LOCATION
,O
The,O
Company,O
incurred,O
the,O
following,O
amounts,O
with,O
related,O
parties,O
:,O
,O
These,O
transactions,O
were,O
in,O
the,O
normal,O
course,O
of,O
business,O
and,O
recorded,O
at,O
an,O
exchange,O
value,O
established,O
and,O
agreed,O
upon,O
by,O
the,O
related,O
parties,O
.,O
,O
Included,O
in,O
accounts,O
payable,O
and,O
accrued,O
liabilities,O
are,O
$,O
"28,378",O
(,O
2010,O
-,O
$,O
"15,343",O
),O
and,O
$,O
"51,262",O
(,O
2010,O
-,O
$,O
"59,107",O
),O
",",O
respectively,O
relating,O
to,O
amounts,O
owed,O
to,O
stockholders,O
.,O
,O
The,O
Company,O
's,O
current,O
income,O
taxes,O
are,O
as,O
follows,O
:,O
,O
Expected,O
income,O
tax,O
recovery,O
at,O
the,O
statutory,O
rate,O
of,O
31.9,O
%,O
,O
AMERICAS,I-BUSINESS
WIND,I-BUSINESS
ENERGY,I-BUSINESS
CORPORATION,I-BUSINESS
AND,O
SUBSIDIARIES,O
(,O
A,O
DEVELOPMENT,O
STAGE,O
COMPANY,O
),O
Notes,O
to,O
Condensed,O
Consolidated,O
Interim,O
Financial,O
Statements,O
April,O
30,O
",",O
2011,O
and,O
2010,O
(,O
Expressed,O
in,O
U.S.,I-LOCATION
,O
The,O
components,O
of,O
deferred,O
tax,O
assets,O
(,O
liability,O
),O
are,O
as,O
follows,O
:,O
,O
The,O
Company,O
has,O
net,O
operating,O
loss,O
carryforwards,O
available,O
to,O
be,O
applied,O
against,O
future,O
years,O
',O
income,O
.,O
,O
Due,O
to,O
the,O
losses,O
from,O
operations,O
and,O
expected,O
future,O
operating,O
results,O
",",O
it,O
is,O
more,O
likely,O
than,O
not,O
that,O
the,O
deferred,O
tax,O
asset,O
resulting,O
from,O
the,O
tax,O
losses,O
available,O
for,O
carry,O
forward,O
will,O
not,O
be,O
realized,O
through,O
the,O
reduction,O
of,O
future,O
income,O
tax,O
payments,O
",",O
accordingly,O
",",O
a,O
100,O
%,O
valuation,O
allowance,O
has,O
been,O
recorded,O
for,O
deferred,O
tax,O
assets,O
and,O
current,O
income,O
taxes,O
.,O
,O
As,O
of,O
April,O
30,O
",",O
2011,O
",",O
the,O
Company,O
had,O
$,O
"6,128,921",O
of,O
Federal,O
",",O
provincial,O
and,O
state,O
net,O
operating,O
loss,O
carryforwards,O
(,O
including,O
losses,O
of,O
$,O
"325,674",O
in,O
the,O
U.S.,I-LOCATION
),O
available,O
to,O
offset,O
future,O
taxable,O
income,O
.,O
,O
Such,O
carryforwards,O
expire,O
in,O
:,O
,O
AMERICAS,I-BUSINESS
WIND,I-BUSINESS
ENERGY,I-BUSINESS
CORPORATION,I-BUSINESS
AND,O
SUBSIDIARIES,O
(,O
A,O
DEVELOPMENT,O
STAGE,O
COMPANY,O
),O
Notes,O
to,O
Condensed,O
Consolidated,O
Interim,O
Financial,O
Statements,O
April,O
30,O
",",O
2011,O
and,O
2010,O
(,O
Expressed,O
in,O
U.S.,I-LOCATION
,O
On,O
March,O
5,O
",",O
2009,O
",",O
the,O
Company,O
sublicensed,O
its,O
license,O
to,O
EWT,I-BUSINESS
allowing,O
the,O
use,O
of,O
its,O
exclusive,O
intellectual,O
property,O
and,O
know-how,O
rights,O
in,O
relation,O
to,O
the,O
manufacturing,O
and,O
sales,O
of,O
medium,O
capacity,O
wind,O
turbines,O
in,O
the,O
size,O
range,O
of,O
600,O
kilowatt,O
to,O
1,O
megawatt,O
to,O
the,O
Canadian,I-MISCELLANEOUS
",",O
United,I-LOCATION
States,I-LOCATION
",",O
Mexican,I-MISCELLANEOUS
and,O
related,O
territory,O
markets,O
(,O
Exclusive,O
Rights,O
Territory,O
),O
to,O
EWT,I-BUSINESS
.,O
,O
The,O
agreement,O
specified,O
that,O
the,O
Company,O
receive,O
sublicense,O
payments,O
in,O
an,O
amount,O
equal,O
to,O
the,O
sum,O
of,O
(,O
i,O
),O
2.5,O
%,O
of,O
sales,O
revenues,O
and,O
(,O
ii,O
),O
12.5,O
%,O
of,O
gross,O
profit,O
",",O
not,O
exceeding,O
$,O
"28,000,000",O
in,O
aggregate,O
.,O
,O
The,O
Company,O
had,O
the,O
right,O
to,O
terminate,O
the,O
Agreement,O
earlier,O
if,O
the,O
aggregate,O
sublicense,O
payments,O
under,O
the,O
Agreement,O
were,O
less,O
than,O
$,O
"14,000,000",O
and,O
one,O
of,O
the,O
following,O
events,O
occurred,O
before,O
March,O
5,O
",",O
2012,O
:,O
a,O
),O
If,O
EWT,I-BUSINESS
ceased,O
to,O
conduct,O
any,O
business,O
in,O
the,O
Exclusive,O
Rights,O
Territory,O
for,O
a,O
period,O
of,O
greater,O
than,O
12,O
consecutive,O
months,O
;,O
b,O
),O
If,O
EWT,I-BUSINESS
sought,O
relief,O
under,O
Title,O
7,O
of,O
the,O
U.S.,I-LEGISLATION/ACT
Bankruptcy,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
or,O
a,O
similar,O
provision,O
and,O
an,O
order,O
was,O
entered,O
to,O
liquidate,O
EWT,I-BUSINESS
as,O
opposed,O
to,O
a,O
bankruptcy,O
filing,O
under,O
Title,O
11,O
seeking,O
reorganization,O
;,O
or,O
c,O
),O
If,O
EWT,I-BUSINESS
failed,O
to,O
make,O
any,O
undisputed,O
payments,O
to,O
the,O
Company,O
when,O
due,O
and,O
such,O
payment,O
was,O
not,O
made,O
within,O
45,O
days,O
of,O
the,O
notice,O
given,O
by,O
the,O
Company,O
.,O
,O
As,O
part,O
of,O
the,O
Agreement,O
",",O
the,O
Company,O
transferred,O
to,O
EWT,I-BUSINESS
all,O
of,O
its,O
risks,O
and,O
benefits,O
to,O
its,O
Waverly,I-BUSINESS
and,O
Rural,I-BUSINESS
contracts,O
.,O
,O
As,O
such,O
",",O
the,O
Company,O
was,O
committed,O
to,O
transfer,O
the,O
deposits,O
made,O
by,O
Waverly,I-BUSINESS
and,O
Rural,I-BUSINESS
of,O
$,O
"940,730",O
to,O
EWT,I-BUSINESS
.,O
,O
EWT,I-BUSINESS
assumed,O
the,O
costs,O
incurred,O
on,O
the,O
Confederation,I-BUSINESS
and,O
Windvision,I-BUSINESS
contracts,O
.,O
,O
The,O
total,O
aggregate,O
costs,O
along,O
with,O
the,O
deposits,O
on,O
the,O
Waverly,I-BUSINESS
and,O
Rural,I-BUSINESS
contracts,O
owing,O
to,O
EWT,I-BUSINESS
was,O
$,O
"2,818,875",O
(,O
herein,O
debt,O
),O
.,O
,O
Also,O
",",O
as,O
part,O
of,O
the,O
Agreement,O
",",O
the,O
Company,O
assigned,O
all,O
of,O
its,O
rights,O
",",O
interest,O
and,O
obligations,O
under,O
the,O
license,O
agreement,O
with,O
GE,I-BUSINESS
Power,I-BUSINESS
Technology,I-BUSINESS
LLC,I-BUSINESS
(,O
``,O
GEPT,I-BUSINESS
'',O
),O
.,O
,O
On,O
April,O
28,O
",",O
2010,O
",",O
the,O
Company,O
entered,O
into,O
the,O
Settlement,O
Agreement,O
.,O
,O
This,O
agreement,O
replaced,O
the,O
March,O
5,O
",",O
2009,O
agreement,O
.,O
,O
Under,O
this,O
agreement,O
",",O
the,O
Company,O
will,O
receive,O
future,O
payments,O
based,O
on,O
3,O
%,O
of,O
sales,O
of,O
wind,O
turbines,O
made,O
by,O
EWT,I-BUSINESS
(,O
herein,O
the,O
Settlement,O
Payments,O
),O
",",O
with,O
the,O
total,O
Settlement,O
Payments,O
not,O
exceeding,O
$,O
"10,000,000",O
.,O
,O
Prior,O
to,O
entering,O
into,O
the,O
Settlement,O
Agreement,O
",",O
the,O
debt,O
due,O
to,O
EWT,I-BUSINESS
was,O
approx,O
.,O
,O
AMERICAS,I-BUSINESS
WIND,I-BUSINESS
ENERGY,I-BUSINESS
CORPORATION,I-BUSINESS
AND,O
SUBSIDIARIES,O
(,O
A,O
DEVELOPMENT,O
STAGE,O
COMPANY,O
),O
Notes,O
to,O
Condensed,O
Consolidated,O
Interim,O
Financial,O
Statements,O
April,O
30,O
",",O
2011,O
and,O
2010,O
(,O
Expressed,O
in,O
U.S.,I-LOCATION
,O
Power,I-BUSINESS
",",O
Wind,I-BUSINESS
Vision,I-BUSINESS
and,O
Wray,I-BUSINESS
contracts,O
.,O
,O
EWT,I-BUSINESS
determined,O
that,O
the,O
costs,O
to,O
complete,O
the,O
contracts,O
would,O
be,O
considerably,O
more,O
than,O
the,O
$,O
2.8,O
million,O
and,O
accordingly,O
made,O
efforts,O
to,O
enter,O
into,O
the,O
Settlement,O
Agreement,O
.,O
,O
It,O
was,O
agreed,O
the,O
full,O
and,O
final,O
payment,O
of,O
$,O
4,O
million,O
was,O
fair,O
and,O
reasonable,O
to,O
both,O
parties,O
and,O
to,O
satisfy,O
EWT,I-BUSINESS
for,O
any,O
unforeseen,O
obligations,O
incurred,O
by,O
completing,O
the,O
contracts,O
.,O
,O
In,O
exchange,O
",",O
EWT,I-BUSINESS
agreed,O
to,O
release,O
the,O
Company,O
from,O
any,O
future,O
or,O
further,O
liabilities,O
incurred,O
from,O
those,O
contracts,O
.,O
,O
As,O
repayment,O
of,O
the,O
debt,O
payable,O
by,O
the,O
Company,O
to,O
EWT,I-BUSINESS
",",O
EWT,I-BUSINESS
will,O
apply,O
the,O
first,O
$,O
"2,000,000",O
of,O
Settlement,O
Payments,O
against,O
the,O
debt,O
amount,O
.,O
,O
Once,O
$,O
"2,000,000",O
has,O
been,O
repaid,O
to,O
EWT,I-BUSINESS
",",O
the,O
Settlement,O
Payments,O
will,O
be,O
made,O
to,O
the,O
Company,O
at,O
50,O
%,O
of,O
the,O
Settlement,O
Payment,O
amount,O
until,O
EWT,I-BUSINESS
have,O
retained,O
an,O
aggregate,O
of,O
$,O
"4,000,000",O
in,O
total,O
Settlement,O
Payments,O
(,O
including,O
the,O
initial,O
$,O
"2,000,000",O
),O
.,O
,O
Subsequent,O
to,O
that,O
",",O
the,O
Settlement,O
Payments,O
will,O
be,O
paid,O
in,O
full,O
to,O
the,O
Company,O
until,O
the,O
earlier,O
of,O
the,O
$,O
"10,000,000",O
being,O
reached,O
or,O
until,O
the,O
fourth,O
anniversary,O
date,O
of,O
this,O
agreement,O
.,O
,O
If,O
no,O
Settlement,O
Payments,O
are,O
received,O
under,O
the,O
Agreement,O
",",O
the,O
Company,O
will,O
not,O
be,O
committed,O
to,O
repaying,O
the,O
debt,O
.,O
,O
As,O
such,O
",",O
the,O
debt,O
has,O
been,O
removed,O
and,O
offset,O
against,O
the,O
write,O
down,O
of,O
the,O
intangible,O
asset,O
of,O
$,O
"2,008,955",O
in,O
other,O
income,O
in,O
these,O
consolidated,O
financial,O
statements,O
.,O
,O
Certain,O
comparative,O
amounts,O
have,O
been,O
reclassified,O
to,O
conform,O
with,O
the,O
presentation,O
adopted,O
in,O
the,O
current,O
period,O
.,O
,O
Management,O
's,O
Discussion,O
and,O
Analysis,O
of,O
Financial,O
Condition,O
and,O
Results,O
of,O
Operations,O
FORWARD-LOOKING,O
STATEMENTS,O
This,O
quarterly,O
report,O
contains,O
forward-looking,O
statements,O
.,O
,O
These,O
statements,O
relate,O
to,O
future,O
events,O
or,O
our,O
future,O
financial,O
performance,O
.,O
,O
In,O
some,O
cases,O
",",O
you,O
can,O
identify,O
forward-looking,O
statements,O
by,O
terminology,O
such,O
as,O
``,O
may,O
'',O
",",O
``,O
should,O
'',O
",",O
``,O
expects,O
'',O
",",O
``,O
plans,O
'',O
",",O
``,O
anticipates,O
'',O
",",O
``,O
believes,O
'',O
",",O
``,O
estimates,O
'',O
",",O
``,O
predicts,O
'',O
",",O
``,O
potential,O
'',O
or,O
``,O
continue,O
'',O
or,O
the,O
negative,O
of,O
these,O
terms,O
or,O
other,O
comparable,O
terminology,O
.,O
,O
These,O
statements,O
are,O
only,O
predictions,O
and,O
involve,O
known,O
and,O
unknown,O
risks,O
",",O
uncertainties,O
and,O
other,O
factors,O
",",O
that,O
may,O
cause,O
our,O
or,O
our,O
industry,O
's,O
actual,O
results,O
",",O
levels,O
of,O
activity,O
",",O
performance,O
or,O
achievements,O
to,O
be,O
materially,O
different,O
from,O
any,O
future,O
results,O
",",O
levels,O
of,O
activity,O
",",O
performance,O
or,O
achievements,O
expressed,O
or,O
implied,O
by,O
these,O
forward-looking,O
statements,O
.,O
,O
Although,O
we,O
believe,O
that,O
the,O
expectations,O
reflected,O
in,O
the,O
forward-looking,O
statements,O
are,O
reasonable,O
",",O
we,O
can,O
not,O
guarantee,O
future,O
results,O
",",O
levels,O
of,O
activity,O
",",O
performance,O
or,O
achievements,O
.,O
,O
Except,O
as,O
required,O
by,O
applicable,O
law,O
",",O
including,O
the,O
securities,O
laws,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
we,O
do,O
not,O
intend,O
to,O
update,O
any,O
of,O
the,O
forward-looking,O
statements,O
to,O
conform,O
these,O
statements,O
to,O
actual,O
results,O
.,O
,O
Our,O
unaudited,O
financial,O
statements,O
are,O
stated,O
in,O
United,I-LOCATION
States,I-LOCATION
Dollars,O
(,O
US,O
$,O
),O
and,O
are,O
prepared,O
in,O
accordance,O
with,O
United,I-LEGISLATION/ACT
States,I-LEGISLATION/ACT
Generally,I-LEGISLATION/ACT
Accepted,I-LEGISLATION/ACT
Accounting,I-LEGISLATION/ACT
Principles,I-LEGISLATION/ACT
.,O
,O
The,O
following,O
discussion,O
should,O
be,O
read,O
in,O
conjunction,O
with,O
our,O
financial,O
statements,O
and,O
the,O
related,O
notes,O
that,O
appear,O
elsewhere,O
in,O
this,O
quarterly,O
report,O
.,O
,O
The,O
following,O
discussion,O
contains,O
forward-looking,O
statements,O
that,O
reflect,O
our,O
plans,O
",",O
estimates,O
and,O
beliefs,O
.,O
,O
Our,O
actual,O
results,O
could,O
differ,O
materially,O
from,O
those,O
discussed,O
in,O
the,O
forward,O
looking,O
statements,O
.,O
,O
Factors,O
that,O
could,O
cause,O
or,O
contribute,O
to,O
such,O
differences,O
include,O
",",O
but,O
are,O
not,O
limited,O
to,O
",",O
those,O
discussed,O
below,O
and,O
elsewhere,O
in,O
this,O
quarterly,O
report,O
.,O
,O
In,O
this,O
quarterly,O
report,O
",",O
unless,O
otherwise,O
specified,O
",",O
all,O
dollar,O
amounts,O
are,O
expressed,O
in,O
United,I-LOCATION
States,I-LOCATION
dollars,O
.,O
,O
All,O
references,O
to,O
``,O
US,I-LOCATION
$,O
'',O
refer,O
to,O
United,I-LOCATION
States,I-LOCATION
dollars,O
and,O
all,O
references,O
to,O
``,O
common,O
shares,O
'',O
refer,O
to,O
the,O
common,O
shares,O
in,O
our,O
capital,O
stock,O
.,O
,O
As,O
used,O
in,O
this,O
quarterly,O
report,O
",",O
the,O
terms,O
we,O
",",O
us,O
",",O
our,O
and,O
our,O
company,O
refer,O
to,O
Americas,I-BUSINESS
Wind,I-BUSINESS
Energy,I-BUSINESS
Corporation,I-BUSINESS
",",O
and,O
",",O
unless,O
otherwise,O
indicated,O
",",O
our,O
subsidiary,O
",",O
6544797,O
Canada,I-BUSINESS
Ltd.,I-BUSINESS
",",O
a,O
Canadian,I-MISCELLANEOUS
corporation,O
",",O
and,O
our,O
wholly-owned,O
subsidiary,O
Americas,I-BUSINESS
Wind,I-BUSINESS
Energy,I-BUSINESS
Inc.,I-BUSINESS
",",O
an,O
Ontario,I-LOCATION
corporation,O
.,O
,O
General,O
Overview,O
We,O
were,O
incorporated,O
pursuant,O
to,O
the,O
laws,O
of,O
the,O
State,O
of,O
Nevada,I-LOCATION
on,O
August,O
22,O
",",O
2003,O
.,O
,O
On,O
June,O
4,O
",",O
2005,O
",",O
we,O
effected,O
a,O
6,O
for,O
1,O
forward,O
stock,O
split,O
of,O
the,O
issued,O
shares,O
of,O
common,O
stock,O
in,O
the,O
capital,O
of,O
our,O
company,O
.,O
,O
On,O
October,O
14,O
",",O
2005,O
",",O
we,O
effected,O
a,O
3.195,O
for,O
1,O
forward,O
stock,O
split,O
of,O
the,O
issued,O
shares,O
of,O
common,O
stock,O
in,O
the,O
capital,O
of,O
our,O
company,O
.,O
,O
On,O
April,O
4,O
",",O
2006,O
",",O
our,O
board,O
of,O
directors,O
approved,O
an,O
amendment,O
to,O
our,O
articles,O
of,O
incorporation,O
to,O
create,O
"30,000,000",O
class,O
A,O
special,O
voting,O
shares,O
in,O
the,O
capital,O
of,O
our,O
company,O
.,O
,O
Subsequent,O
to,O
our,O
board,O
of,O
directors,O
approval,O
of,O
the,O
amendment,O
to,O
our,O
articles,O
of,O
incorporation,O
",",O
on,O
April,O
5,O
",",O
2006,O
",",O
the,O
holders,O
of,O
a,O
majority,O
of,O
the,O
outstanding,O
common,O
shares,O
of,O
our,O
company,O
consented,O
in,O
writing,O
to,O
the,O
amendment,O
to,O
our,O
articles,O
of,O
incorporation,O
.,O
,O
The,O
amendment,O
to,O
our,O
articles,O
of,O
incorporation,O
was,O
effected,O
with,O
the,O
Nevada,I-GOVERNMENT
Secretary,I-GOVERNMENT
of,I-GOVERNMENT
State,I-GOVERNMENT
on,O
June,O
19,O
",",O
2006,O
.,O
,O
As,O
a,O
result,O
",",O
our,O
authorized,O
capital,O
consists,O
of,O
"100,000,000",O
shares,O
of,O
common,O
stock,O
with,O
a,O
par,O
value,O
of,O
$,O
0.0001,O
and,O
"30,000,000",O
class,O
A,O
special,O
voting,O
stock,O
without,O
par,O
value,O
.,O
,O
On,O
August,O
28,O
",",O
2006,O
",",O
our,O
board,O
of,O
directors,O
approved,O
an,O
amendment,O
to,O
our,O
articles,O
of,O
incorporation,O
to,O
change,O
our,O
name,O
from,O
Northwest,I-BUSINESS
Passage,I-BUSINESS
Ventures,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
to,O
Americas,I-BUSINESS
Wind,I-BUSINESS
Energy,I-BUSINESS
Corporation,I-BUSINESS
.,I-BUSINESS
,O
Also,O
on,O
August,O
28,O
",",O
2006,O
",",O
the,O
holders,O
of,O
a,O
majority,O
of,O
the,O
outstanding,O
common,O
shares,O
of,O
our,O
company,O
consented,O
in,O
writing,O
to,O
the,O
amendment,O
to,O
our,O
articles,O
of,O
incorporation,O
.,O
,O
The,O
amendment,O
to,O
our,O
articles,O
of,O
incorporation,O
was,O
effected,O
with,O
the,O
Nevada,I-GOVERNMENT
Secretary,I-GOVERNMENT
of,I-GOVERNMENT
State,I-GOVERNMENT
on,O
October,O
16,O
",",O
2006,O
.,O
,O
Effective,O
March,O
5,O
",",O
2009,O
",",O
we,O
entered,O
into,O
a,O
sublicense,O
agreement,O
with,O
Americas,I-BUSINESS
Wind,I-BUSINESS
Energy,I-BUSINESS
Inc.,I-BUSINESS
(,O
AWE,I-BUSINESS
),O
",",O
our,O
Ontario,I-LOCATION
subsidiary,O
company,O
",",O
Emergya,I-BUSINESS
Wind,I-BUSINESS
Technologies,I-BUSINESS
B.V.,I-BUSINESS
",",O
a,O
Netherlands,I-LOCATION
company,O
and,O
EWT-Americas,I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
corporation,O
",",O
wherein,O
we,O
have,O
agreed,O
to,O
grant,O
to,O
EWT-Americas,I-BUSINESS
an,O
exclusive,O
sublicense,O
of,O
all,O
of,O
our,O
rights,O
under,O
a,O
master,O
license,O
agreement,O
dated,O
April,O
23,O
",",O
2004,O
.,O
,O
We,O
had,O
an,O
exclusive,O
license,O
for,O
the,O
North,I-MISCELLANEOUS
American,I-MISCELLANEOUS
territory,O
from,O
EWT,I-BUSINESS
B.V.,I-BUSINESS
",",O
of,O
the,O
Netherlands,I-LOCATION
",",O
for,O
the,O
mid-sized,O
direct,O
drive,O
wind,O
turbines,O
manufactured,O
by,O
EWT,I-BUSINESS
B.V.,I-BUSINESS
.,I-BUSINESS
,O
We,O
have,O
provided,O
a,O
sub-license,O
of,O
these,O
rights,O
to,O
EWT-Americas,I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
wholly,O
owned,O
subsidiary,O
of,O
Emergya,I-BUSINESS
Wind,I-BUSINESS
Technologies,I-BUSINESS
Holdings,I-BUSINESS
N.V,I-BUSINESS
.,I-BUSINESS
,O
and,O
an,O
affiliate,O
of,O
EWT,I-BUSINESS
B.V.,I-BUSINESS
.,I-BUSINESS
,O
The,O
major,O
terms,O
of,O
the,O
transaction,O
which,O
closed,O
effective,O
March,O
5,O
",",O
2009,O
are,O
:,O
,O
We,O
sub-licensed,O
to,O
EWT-Americas,I-BUSINESS
our,O
existing,O
rights,O
to,O
market,O
in,O
North,I-LOCATION
America,I-LOCATION
EWT-,B-BUSINESS
Americas,I-BUSINESS
will,O
be,O
the,O
exclusive,O
manufacturer,O
and,O
supplier,O
of,O
EWT,I-BUSINESS
wind,O
turbines,O
in,O
North,I-LOCATION
America,I-LOCATION
.,O
,O
On,O
March,O
5,O
",",O
2009,O
",",O
we,O
completed,O
a,O
sublicense,O
agreement,O
with,O
EWT,I-BUSINESS
Americas,I-BUSINESS
.,O
,O
The,O
complete,O
agreement,O
is,O
available,O
on-line,O
as,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
Summary,O
terms,O
of,O
the,O
agreement,O
were,O
:,O
,O
The,O
sublicense,O
agreement,O
gave,O
AWE,O
a,O
royalty,O
of,O
2.5,O
%,O
of,O
sales,O
revenue,O
and,O
12.5,O
%,O
of,O
contribution,O
margin,O
on,O
all,O
sales,O
to,O
companies,O
listed,O
on,O
exhibit,O
A,O
of,O
the,O
agreement,O
over,O
the,O
next,O
5,O
years,O
.,O
,O
The,O
royalty,O
payments,O
were,O
capped,O
at,O
$,O
28,O
million,O
.,O
,O
EWT,O
Americas,O
took,O
over,O
all,O
AWE,O
projects,O
except,O
two,O
and,O
was,O
completing,O
these,O
two,O
projects,O
for,O
our,O
company,O
.,O
,O
The,O
costs,O
to,O
complete,O
these,O
two,O
projects,O
plus,O
additional,O
monies,O
owed,O
to,O
EWT,O
for,O
materials,O
was,O
being,O
taken,O
out,O
of,O
our,O
royalty,O
payments,O
at,O
the,O
rate,O
of,O
25,O
%,O
of,O
each,O
royalty,O
payment,O
until,O
completed,O
.,O
,O
We,O
can,O
not,O
compete,O
with,O
EWT,I-BUSINESS
Americas,I-BUSINESS
in,O
the,O
wind,O
turbine,O
business,O
.,O
,O
Effective,O
March,O
5,O
",",O
2009,O
",",O
Mr.,O
Frank,I-PERSON
Pickersgill,I-PERSON
",",O
our,O
secretary,O
and,O
director,O
",",O
entered,O
into,O
a,O
consulting,O
agreement,O
with,O
EWT-Americas,I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
Pursuant,O
to,O
the,O
terms,O
of,O
the,O
consulting,O
agreement,O
",",O
Mr.,O
Pickersgill,I-PERSON
was,O
to,O
provide,O
business,O
consulting,O
services,O
to,O
EWT-Americas,I-BUSINESS
Inc.,I-BUSINESS
for,O
a,O
monthly,O
compensation,O
of,O
US,I-LOCATION
$,O
"6,250",O
.,O
,O
The,O
agreement,O
was,O
to,O
be,O
terminated,O
on,O
the,O
earlier,O
of,O
:,O
(,O
i,O
),O
two,O
years,O
from,O
the,O
date,O
of,O
the,O
agreement,O
",",O
or,O
(,O
ii,O
),O
the,O
termination,O
of,O
the,O
sublicense,O
agreement,O
.,O
,O
Effective,O
March,O
5,O
",",O
2009,O
",",O
Mr.,O
Hal,I-PERSON
Dickout,I-PERSON
",",O
our,O
president,O
",",O
chief,O
executive,O
officer,O
",",O
chairman,O
and,O
director,O
(,O
also,O
our,O
principal,O
executive,O
officer,O
",",O
principal,O
financial,O
officer,O
and,O
principal,O
accounting,O
officer,O
),O
",",O
entered,O
into,O
a,O
consulting,O
agreement,O
with,O
EWT-Americas,I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
Pursuant,O
to,O
the,O
terms,O
of,O
the,O
consulting,O
agreement,O
",",O
Mr.,O
Dickout,I-PERSON
was,O
to,O
provide,O
business,O
consulting,O
services,O
to,O
EWT-Americas,I-BUSINESS
Inc.,I-BUSINESS
for,O
a,O
monthly,O
compensation,O
of,O
US,I-LOCATION
$,O
"6,250",O
.,O
,O
The,O
agreement,O
was,O
to,O
be,O
terminated,O
on,O
the,O
earlier,O
of,O
:,O
(,O
i,O
),O
two,O
years,O
from,O
the,O
date,O
of,O
the,O
agreement,O
",",O
or,O
(,O
ii,O
),O
the,O
termination,O
of,O
the,O
sublicense,O
agreement,O
.,O
,O
On,O
February,O
1,O
",",O
2010,O
",",O
we,O
received,O
a,O
letter,O
from,O
EWT,I-BUSINESS
B.V.,I-BUSINESS
claiming,O
that,O
they,O
are,O
(,O
1,O
),O
terminating,O
the,O
sublicense,O
agreement,O
citing,O
alleged,O
violations,O
of,O
representations,O
and,O
warranties,O
in,O
the,O
agreement,O
;,O
(,O
2,O
),O
alleging,O
that,O
large,O
orders,O
and,O
opportunities,O
were,O
cancelled,O
due,O
to,O
AWE,I-BUSINESS
failures,O
;,O
and,O
(,O
3,O
),O
alleging,O
amounts,O
owing,O
to,O
EWT,I-BUSINESS
of,O
US,I-LOCATION
$,O
2.519,O
million,O
",",O
are,O
due,O
and,O
payable,O
within,O
30,O
days,O
.,O
,O
Our,O
responses,O
to,O
the,O
allegations,O
are,O
as,O
follows,O
:,O
,O
There,O
was,O
no,O
breach,O
of,O
warranty,O
or,O
untrue,O
representation,O
in,O
the,O
sublicense,O
agreement,O
on,O
our,O
part,O
or,O
on,O
the,O
part,O
of,O
Americas,I-BUSINESS
Wind,I-BUSINESS
Energy,I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
The,O
money,O
allegedly,O
owed,O
to,O
EWT,I-BUSINESS
was,O
to,O
be,O
paid,O
from,O
future,O
payments,O
and,O
is,O
not,O
due,O
.,O
,O
Our,O
company,O
rejected,O
the,O
claims,O
in,O
the,O
letter,O
and,O
we,O
entered,O
into,O
settlement,O
discussions,O
with,O
EWT,I-BUSINESS
and,O
EWT-Americas,I-BUSINESS
(,O
together,O
EWT,O
),O
.,O
,O
These,O
discussions,O
have,O
resulted,O
in,O
a,O
settlement,O
agreement,O
dated,O
as,O
of,O
April,O
28,O
",",O
2010,O
",",O
which,O
became,O
effective,O
on,O
June,O
11,O
",",O
2010,O
.,O
,O
A,O
summary,O
of,O
the,O
key,O
terms,O
of,O
the,O
settlement,O
agreement,O
is,O
as,O
follows,O
:,O
,O
We,O
will,O
be,O
paid,O
a,O
fee,O
with,O
respect,O
to,O
sales,O
by,O
EWT,I-BUSINESS
.,O
,O
of,O
600kw,O
to,O
1mw,O
wind,O
turbines,O
in,O
the,O
territory,O
covered,O
by,O
the,O
original,O
license,O
agreement,O
over,O
the,O
next,O
four,O
years,O
subject,O
to,O
a,O
maximum,O
cap,O
of,O
$,O
"10,000,000",O
.,O
,O
As,O
repayment,O
of,O
the,O
debt,O
payable,O
by,O
our,O
company,O
to,O
EWT,I-BUSINESS
",",O
EWT,I-BUSINESS
will,O
apply,O
the,O
first,O
$,O
"2,000,000",O
of,O
settlement,O
payments,O
against,O
the,O
debt,O
amount,O
.,O
,O
Once,O
$,O
"2,000,000",O
has,O
been,O
repaid,O
to,O
EWT,I-BUSINESS
",",O
the,O
settlement,O
payments,O
will,O
be,O
made,O
to,O
our,O
company,O
at,O
50,O
%,O
of,O
the,O
settlement,O
payment,O
amount,O
until,O
EWT,I-BUSINESS
have,O
retained,O
an,O
aggregate,O
of,O
$,O
"4,000,000",O
in,O
total,O
settlement,O
payments,O
(,O
including,O
the,O
initial,O
$,O
"2,000,000",O
),O
.,O
,O
Subsequent,O
to,O
that,O
",",O
the,O
settlement,O
payments,O
will,O
be,O
paid,O
in,O
full,O
to,O
our,O
company,O
until,O
the,O
earlier,O
of,O
the,O
$,O
"10,000,000",O
being,O
reached,O
or,O
until,O
the,O
fourth,O
anniversary,O
date,O
of,O
the,O
agreement,O
.,O
,O
If,O
no,O
settlement,O
payments,O
are,O
received,O
under,O
the,O
agreement,O
",",O
our,O
company,O
will,O
not,O
be,O
committed,O
to,O
repaying,O
the,O
debt,O
.,O
,O
The,O
consulting,O
contracts,O
with,O
H.,I-PERSON
C.,I-PERSON
Dickout,I-PERSON
and,O
F.,I-PERSON
D.,I-PERSON
Pickersgill,I-PERSON
are,O
reinstated,O
.,O
,O
The,O
settlement,O
agreement,O
is,O
conditioned,O
upon,O
and,O
was,O
not,O
effective,O
unless,O
EWT,I-BUSINESS
reaches,O
agreement,O
with,O
former,O
customers,O
of,O
our,O
company,O
or,O
EWT,I-BUSINESS
waives,O
the,O
claim,O
",",O
which,O
condition,O
was,O
satisfied,O
by,O
EWT,I-BUSINESS
waiving,O
the,O
condition,O
effective,O
June,O
11,O
",",O
2010,O
To,O
date,O
",",O
we,O
have,O
not,O
received,O
any,O
royalty,O
payments,O
under,O
the,O
settlement,O
agreement,O
signed,O
on,O
April,O
28,O
",",O
2010,O
.,O
,O
Pursuant,O
to,O
the,O
agreement,O
",",O
our,O
company,O
will,O
receive,O
payments,O
equal,O
to,O
3,O
%,O
of,O
the,O
sales,O
revenue,O
generated,O
by,O
EWT,I-BUSINESS
in,O
North,I-LOCATION
America,I-LOCATION
.,O
,O
Under,O
this,O
agreement,O
",",O
EWT,I-BUSINESS
has,O
assumed,O
all,O
of,O
the,O
liabilities,O
of,O
AWE,I-BUSINESS
.,O
,O
The,O
royalty,O
payments,O
and,O
debt,O
repayment,O
will,O
work,O
as,O
follows,O
:,O
,O
The,O
first,O
$,O
"2,000,000",O
of,O
royalty,O
payments,O
due,O
to,O
us,O
will,O
be,O
retained,O
by,O
EWT,I-BUSINESS
to,O
offset,O
the,O
debt,O
owing,O
to,O
them,O
by,O
us,O
.,O
,O
Subsequent,O
to,O
that,O
",",O
we,O
will,O
receive,O
50,O
%,O
of,O
the,O
royalty,O
payments,O
owing,O
to,O
us,O
",",O
and,O
the,O
other,O
50,O
%,O
will,O
go,O
towards,O
paying,O
down,O
the,O
debt,O
we,O
owe,O
to,O
EWT,I-BUSINESS
",",O
until,O
a,O
total,O
of,O
$,O
"4,000,000",O
of,O
royalty,O
payments,O
are,O
retained,O
by,O
EWT,I-BUSINESS
.,O
,O
Subsequent,O
payments,O
will,O
be,O
paid,O
in,O
full,O
to,O
AWE,I-BUSINESS
until,O
a,O
maximum,O
of,O
$,O
"10,000,000",O
in,O
royalty,O
payments,O
has,O
been,O
received,O
by,O
AWE,I-BUSINESS
.,O
,O
There,O
is,O
no,O
liability,O
to,O
EWT,I-BUSINESS
beyond,O
paying,O
a,O
percentage,O
of,O
royalties,O
received,O
.,O
,O
However,O
",",O
if,O
no,O
royalties,O
are,O
received,O
by,O
us,O
",",O
the,O
debt,O
will,O
not,O
be,O
repayable,O
to,O
EWT,I-BUSINESS
.,O
,O
Our,O
Current,O
Business,O
We,O
are,O
now,O
out,O
of,O
the,O
business,O
of,O
manufacturing,O
and,O
supplying,O
wind,O
turbines,O
and,O
look,O
forward,O
to,O
the,O
fees,O
that,O
may,O
be,O
generated,O
as,O
a,O
result,O
of,O
the,O
settlement,O
reached,O
.,O
,O
It,O
is,O
management,O
s,O
intent,O
to,O
search,O
for,O
a,O
merger,O
or,O
acquisition,O
partner,O
who,O
is,O
interested,O
in,O
our,O
public,O
structure,O
",",O
who,O
can,O
use,O
our,O
tax,O
loss,O
carry-forwards,O
and,O
who,O
values,O
the,O
royalty,O
stream,O
",",O
in,O
order,O
to,O
get,O
best,O
total,O
return,O
for,O
shareholders,O
.,O
,O
We,O
plan,O
to,O
raise,O
the,O
necessary,O
capital,O
to,O
do,O
this,O
through,O
a,O
convertible,O
debenture,O
or,O
sale,O
of,O
shares,O
.,O
,O
We,O
have,O
retained,O
a,O
competent,O
and,O
experienced,O
financial,O
firm,O
to,O
assist,O
in,O
this,O
process,O
.,O
,O
In,O
the,O
short,O
term,O
",",O
operations,O
will,O
continue,O
to,O
be,O
funded,O
by,O
shareholder,O
loans,O
and,O
in,O
the,O
longer,O
term,O
the,O
royalty,O
payments,O
from,O
EWT,I-BUSINESS
are,O
expected,O
to,O
contribute,O
strongly,O
to,O
our,O
company,O
s,O
balance,O
sheet,O
.,O
,O
Cash,O
Requirements,O
Over,O
the,O
next,O
12,O
months,O
we,O
intend,O
to,O
operate,O
as,O
a,O
business,O
development,O
company,O
.,O
,O
We,O
anticipate,O
that,O
we,O
will,O
incur,O
the,O
following,O
operating,O
expenses,O
during,O
this,O
period,O
:,O
,O
We,O
believe,O
that,O
we,O
will,O
require,O
additional,O
funds,O
to,O
implement,O
our,O
growth,O
strategy,O
.,O
,O
These,O
funds,O
may,O
be,O
raised,O
through,O
equity,O
financing,O
",",O
debt,O
financing,O
",",O
or,O
other,O
sources,O
",",O
which,O
may,O
result,O
in,O
further,O
dilution,O
in,O
the,O
equity,O
ownership,O
of,O
our,O
shares,O
.,O
,O
There,O
is,O
no,O
assurance,O
that,O
we,O
will,O
be,O
able,O
to,O
maintain,O
operations,O
at,O
a,O
level,O
sufficient,O
for,O
an,O
investor,O
to,O
obtain,O
a,O
return,O
on,O
their,O
investment,O
in,O
our,O
common,O
stock,O
.,O
,O
Further,O
",",O
we,O
may,O
continue,O
to,O
be,O
unprofitable,O
.,O
,O
Purchase,O
of,O
Significant,O
Equipment,O
We,O
do,O
not,O
anticipate,O
the,O
purchase,O
or,O
sale,O
of,O
any,O
plant,O
or,O
significant,O
equipment,O
during,O
the,O
next,O
12,O
months,O
.,O
,O
Trends,O
and,O
Uncertainties,O
Our,O
revenues,O
are,O
dependent,O
on,O
the,O
success,O
of,O
EWT,I-BUSINESS
in,O
selling,O
wind,O
turbines,O
to,O
our,O
customer,O
list,O
.,O
,O
Prospects,O
look,O
good,O
in,O
the,O
current,O
political,O
environment,O
of,O
support,O
for,O
renewables,O
but,O
results,O
can,O
not,O
be,O
assured,O
.,O
,O
Our,O
ability,O
to,O
develop,O
new,O
business,O
in,O
the,O
current,O
market,O
environment,O
may,O
take,O
some,O
time,O
.,O
,O
Employees,O
As,O
of,O
April,O
30,O
",",O
2011,O
",",O
we,O
had,O
two,O
employees,O
consisting,O
of,O
Harold,I-PERSON
Dickout,I-PERSON
",",O
our,O
chief,O
executive,O
officer,O
",",O
president,O
and,O
chairman,O
and,O
Frank,I-PERSON
Pickersgill,I-PERSON
",",O
our,O
secretary,O
.,O
,O
We,O
plan,O
to,O
hire,O
additional,O
employees,O
when,O
circumstances,O
warrant,O
.,O
,O
Going,O
Concern,O
We,O
anticipate,O
that,O
additional,O
funding,O
will,O
be,O
required,O
in,O
the,O
form,O
of,O
equity,O
financing,O
from,O
the,O
sale,O
of,O
our,O
common,O
stock,O
.,O
,O
At,O
this,O
time,O
",",O
we,O
can,O
not,O
provide,O
investors,O
with,O
any,O
assurance,O
that,O
we,O
will,O
be,O
able,O
to,O
raise,O
sufficient,O
funding,O
from,O
the,O
sale,O
of,O
our,O
common,O
stock,O
or,O
through,O
a,O
loan,O
from,O
our,O
directors,O
to,O
meet,O
our,O
obligations,O
over,O
the,O
next,O
twelve,O
months,O
.,O
,O
We,O
do,O
not,O
have,O
any,O
arrangements,O
in,O
place,O
for,O
any,O
future,O
debt,O
or,O
equity,O
financing,O
.,O
,O
Off-Balance,O
Sheet,O
Arrangements,O
We,O
have,O
no,O
off-balance,O
sheet,O
arrangements,O
that,O
have,O
or,O
are,O
reasonably,O
likely,O
to,O
have,O
a,O
current,O
or,O
future,O
effect,O
on,O
our,O
financial,O
condition,O
",",O
changes,O
in,O
financial,O
condition,O
",",O
revenues,O
or,O
expenses,O
",",O
results,O
of,O
operations,O
",",O
liquidity,O
",",O
capital,O
expenditures,O
or,O
capital,O
resources,O
that,O
is,O
material,O
to,O
stockholders,O
.,O
,O
Expenses,O
Our,O
operating,O
expenses,O
for,O
the,O
three,O
and,O
nine,O
month,O
periods,O
ended,O
April,O
30,O
",",O
2011,O
and,O
2010,O
are,O
outlined,O
in,O
the,O
table,O
below,O
:,O
,O
Operating,O
expenses,O
for,O
the,O
nine,O
months,O
ended,O
April,O
30,O
",",O
2011,O
",",O
increased,O
by,O
32.2,O
%,O
as,O
compared,O
to,O
the,O
comparative,O
period,O
in,O
2010,O
primarily,O
as,O
a,O
result,O
of,O
foreign,O
exchange,O
differences,O
.,O
,O
Other,O
income,O
for,O
the,O
nine,O
months,O
ended,O
April,O
30,O
",",O
2011,O
",",O
decreased,O
by,O
99.9,O
%,O
as,O
compared,O
to,O
the,O
comparative,O
period,O
in,O
2010,O
.,O
,O
Equity,O
Compensation,O
We,O
currently,O
do,O
not,O
have,O
any,O
stock,O
option,O
or,O
equity,O
compensation,O
plans,O
or,O
arrangements,O
.,O
,O
As,O
of,O
April,O
30,O
",",O
2011,O
",",O
our,O
company,O
had,O
working,O
capital,O
deficit,O
of,O
$,O
"2,189,601",O
.,O
,O
Contractual,O
Obligations,O
As,O
a,O
smaller,O
reporting,O
company,O
",",O
we,O
are,O
not,O
required,O
to,O
provide,O
tabular,O
disclosure,O
obligations,O
.,O
,O
Critical,O
Accounting,O
Policies,O
Our,O
financial,O
statements,O
and,O
accompanying,O
notes,O
have,O
been,O
prepared,O
in,O
conformity,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
for,O
financial,O
statements,O
.,O
,O
Preparing,O
financial,O
statements,O
requires,O
management,O
to,O
make,O
estimates,O
and,O
assumptions,O
that,O
affect,O
the,O
reported,O
amounts,O
of,O
assets,O
",",O
liabilities,O
",",O
revenue,O
",",O
and,O
expenses,O
.,O
,O
These,O
estimates,O
and,O
assumptions,O
are,O
affected,O
by,O
management,O
s,O
application,O
of,O
accounting,O
policies,O
.,O
,O
We,O
believe,O
that,O
understanding,O
the,O
basis,O
and,O
nature,O
of,O
the,O
estimates,O
and,O
assumptions,O
involved,O
with,O
the,O
following,O
aspects,O
of,O
our,O
financial,O
statements,O
is,O
critical,O
to,O
an,O
understanding,O
of,O
our,O
financials,O
.,O
,O
Basis,O
of,O
Presentation,O
The,O
condensed,O
consolidated,O
interim,O
financial,O
statements,O
of,O
our,O
company,O
have,O
been,O
prepared,O
in,O
accordance,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
(,O
``,O
US,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
'',O
),O
for,O
interim,O
financial,O
information,O
and,O
the,O
instructions,O
to,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
.,O
,O
Accordingly,O
",",O
they,O
do,O
not,O
include,O
all,O
of,O
the,O
information,O
and,O
footnotes,O
required,O
by,O
US,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
for,O
complete,O
financial,O
statements,O
.,O
,O
In,O
the,O
opinion,O
of,O
our,O
company,O
's,O
management,O
",",O
all,O
adjustments,O
(,O
consisting,O
only,O
of,O
normal,O
recurring,O
accruals,O
),O
considered,O
necessary,O
for,O
a,O
fair,O
presentation,O
have,O
been,O
included,O
.,O
,O
Operating,O
results,O
for,O
the,O
nine-month,O
period,O
ended,O
April,O
30,O
",",O
2011,O
are,O
not,O
necessarily,O
indicative,O
of,O
the,O
results,O
that,O
may,O
be,O
expected,O
for,O
the,O
full,O
fiscal,O
year,O
ending,O
July,O
31,O
",",O
2011,O
.,O
,O
The,O
condensed,O
consolidated,O
interim,O
financial,O
statements,O
should,O
be,O
read,O
in,O
conjunction,O
with,O
the,O
audited,O
consolidated,O
financial,O
statements,O
of,O
our,O
company,O
for,O
the,O
fiscal,O
year,O
ended,O
July,O
31,O
",",O
2010,O
.,O
,O
Quantitative,O
Disclosures,O
About,O
Market,O
Risks,O
As,O
a,O
smaller,O
reporting,O
company,O
",",O
we,O
are,O
not,O
required,O
to,O
provide,O
the,O
information,O
required,O
by,O
this,O
Item,O
.,O
,O
Controls,O
and,O
Procedures,O
Management,O
s,O
Report,O
on,O
Disclosure,O
Controls,O
and,O
Procedures,O
We,O
maintain,O
disclosure,O
controls,O
and,O
procedures,O
that,O
are,O
designed,O
to,O
ensure,O
that,O
information,O
required,O
to,O
be,O
disclosed,O
in,O
our,O
reports,O
filed,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
is,O
recorded,O
",",O
processed,O
",",O
summarized,O
and,O
reported,O
within,O
the,O
time,O
periods,O
specified,O
in,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
's,O
rules,O
and,O
forms,O
",",O
and,O
that,O
such,O
information,O
is,O
accumulated,O
and,O
communicated,O
to,O
our,O
management,O
",",O
including,O
our,O
president,O
(,O
our,O
principal,O
executive,O
officer,O
",",O
principal,O
financial,O
officer,O
and,O
principle,O
accounting,O
officer,O
),O
to,O
allow,O
for,O
timely,O
decisions,O
regarding,O
required,O
disclosure,O
.,O
,O
As,O
of,O
the,O
end,O
of,O
the,O
quarter,O
covered,O
by,O
this,O
report,O
",",O
we,O
carried,O
out,O
an,O
evaluation,O
",",O
under,O
the,O
supervision,O
and,O
with,O
the,O
participation,O
of,O
our,O
president,O
(,O
our,O
principal,O
executive,O
officer,O
",",O
principal,O
financial,O
officer,O
and,O
principle,O
accounting,O
officer,O
),O
",",O
of,O
the,O
effectiveness,O
of,O
the,O
design,O
and,O
operation,O
of,O
our,O
disclosure,O
controls,O
and,O
procedures,O
.,O
,O
Based,O
on,O
the,O
foregoing,O
",",O
our,O
president,O
(,O
our,O
principal,O
executive,O
officer,O
",",O
principal,O
financial,O
officer,O
and,O
principle,O
accounting,O
officer,O
),O
concluded,O
that,O
our,O
disclosure,O
controls,O
and,O
procedures,O
were,O
effective,O
as,O
of,O
the,O
end,O
of,O
the,O
period,O
covered,O
by,O
this,O
quarterly,O
report,O
.,O
,O
Changes,O
in,O
Internal,O
Control,O
over,O
Financial,O
Reporting,O
There,O
have,O
been,O
no,O
changes,O
in,O
our,O
internal,O
controls,O
over,O
financial,O
reporting,O
that,O
occurred,O
during,O
our,O
quarter,O
ended,O
April,O
30,O
",",O
2011,O
that,O
have,O
materially,O
or,O
are,O
reasonably,O
likely,O
to,O
materially,O
affect,O
",",O
our,O
internal,O
controls,O
over,O
financial,O
reporting,O
.,O
,O
PART,O
II,O
-,O
OTHER,I-MISCELLANEOUS
INFORMATION,I-MISCELLANEOUS
Item,O
1,O
.,O
,O
Legal,O
Proceedings,O
We,O
know,O
of,O
no,O
material,O
",",O
existing,O
or,O
pending,O
legal,O
proceedings,O
against,O
our,O
company,O
",",O
nor,O
are,O
we,O
involved,O
as,O
a,O
plaintiff,O
in,O
any,O
material,O
proceeding,O
or,O
pending,O
litigation,O
.,O
,O
There,O
are,O
no,O
proceedings,O
in,O
which,O
any,O
of,O
our,O
directors,O
",",O
officers,O
or,O
affiliates,O
",",O
or,O
any,O
registered,O
or,O
beneficial,O
shareholder,O
",",O
is,O
an,O
adverse,O
party,O
or,O
has,O
a,O
material,O
interest,O
adverse,O
to,O
our,O
interest,O
.,O
,O
Risk,O
Factors,O
Much,O
of,O
the,O
information,O
included,O
in,O
this,O
quarterly,O
report,O
includes,O
or,O
is,O
based,O
upon,O
estimates,O
",",O
projections,O
or,O
other,O
``,O
forward,O
looking,O
statements,O
'',O
.,O
,O
Such,O
forward,O
looking,O
statements,O
include,O
any,O
projections,O
or,O
estimates,O
made,O
by,O
us,O
and,O
our,O
management,O
in,O
connection,O
with,O
our,O
business,O
operations,O
.,O
,O
While,O
these,O
forward-looking,O
statements,O
",",O
and,O
any,O
assumptions,O
upon,O
which,O
they,O
are,O
based,O
",",O
are,O
made,O
in,O
good,O
faith,O
and,O
reflect,O
our,O
current,O
judgment,O
regarding,O
the,O
direction,O
of,O
our,O
business,O
",",O
actual,O
results,O
will,O
almost,O
always,O
vary,O
",",O
sometimes,O
materially,O
",",O
from,O
any,O
estimates,O
",",O
predictions,O
",",O
projections,O
",",O
assumptions,O
or,O
other,O
future,O
performance,O
suggested,O
herein,O
.,O
,O
Such,O
estimates,O
",",O
projections,O
or,O
other,O
``,O
forward,O
looking,O
statements,O
'',O
involve,O
various,O
risks,O
and,O
uncertainties,O
as,O
outlined,O
below,O
.,O
,O
We,O
caution,O
the,O
reader,O
that,O
important,O
factors,O
in,O
some,O
cases,O
have,O
affected,O
and,O
",",O
in,O
the,O
future,O
",",O
could,O
materially,O
affect,O
actual,O
results,O
and,O
cause,O
actual,O
results,O
to,O
differ,O
materially,O
from,O
the,O
results,O
expressed,O
in,O
any,O
such,O
estimates,O
",",O
projections,O
or,O
other,O
``,O
forward,O
looking,O
statements,O
'',O
.,O
,O
Our,O
common,O
shares,O
are,O
considered,O
speculative,O
during,O
the,O
development,O
of,O
our,O
new,O
business,O
operations,O
.,O
,O
Prospective,O
investors,O
should,O
consider,O
carefully,O
the,O
risk,O
factors,O
set,O
out,O
below,O
.,O
,O
Risks,O
Related,O
to,O
Our,O
Business,O
Our,O
audited,O
financial,O
statements,O
for,O
the,O
year,O
end,O
July,O
31,O
",",O
2010,O
",",O
states,O
that,O
there,O
is,O
a,O
substantial,O
doubt,O
that,O
we,O
will,O
be,O
able,O
to,O
continue,O
as,O
a,O
going,O
concern,O
.,O
,O
Our,O
income,O
from,O
the,O
settlement,O
agreement,O
between,O
our,O
company,O
and,O
EWT,I-BUSINESS
is,O
a,O
percentage,O
of,O
sales,O
achieved,O
by,O
EWT,I-BUSINESS
in,O
North,I-LOCATION
America,I-LOCATION
.,O
,O
This,O
income,O
is,O
dependent,O
on,O
EWT,I-BUSINESS
achieving,O
these,O
sales,O
.,O
,O
To,O
the,O
extent,O
that,O
sales,O
are,O
not,O
achieved,O
or,O
are,O
less,O
than,O
anticipated,O
",",O
our,O
income,O
will,O
be,O
impacted,O
and,O
our,O
company,O
may,O
have,O
difficulty,O
in,O
meeting,O
our,O
payment,O
obligations,O
.,O
,O
To,O
date,O
",",O
we,O
have,O
not,O
received,O
any,O
payments,O
pursuant,O
to,O
the,O
settlement,O
agreement,O
.,O
,O
There,O
may,O
be,O
some,O
doubt,O
about,O
ability,O
to,O
continue,O
as,O
a,O
going,O
concern,O
.,O
,O
Our,O
company,O
s,O
continuance,O
as,O
a,O
going,O
concern,O
is,O
dependent,O
on,O
out,O
directors,O
and,O
principal,O
stockholders,O
in,O
providing,O
financial,O
support,O
in,O
the,O
short,O
term,O
and,O
receiving,O
sufficient,O
royalty,O
payments,O
to,O
discharge,O
our,O
company,O
s,O
liabilities,O
.,O
,O
In,O
the,O
event,O
that,O
these,O
are,O
not,O
achieved,O
",",O
the,O
assets,O
may,O
not,O
be,O
realized,O
or,O
liabilities,O
discharged,O
at,O
their,O
carrying,O
amounts,O
",",O
and,O
differences,O
from,O
the,O
carrying,O
amounts,O
reported,O
in,O
these,O
consolidated,O
financial,O
statements,O
could,O
be,O
material,O
.,O
,O
Most,O
of,O
our,O
assets,O
and,O
all,O
of,O
our,O
directors,O
and,O
officers,O
are,O
outside,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
with,O
the,O
result,O
that,O
it,O
may,O
be,O
difficult,O
for,O
investors,O
to,O
enforce,O
within,O
the,O
United,I-LOCATION
States,I-LOCATION
any,O
judgments,O
obtained,O
against,O
us,O
or,O
any,O
of,O
our,O
directors,O
or,O
officers,O
.,O
,O
Although,O
we,O
are,O
organized,O
under,O
the,O
laws,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
Nevada,I-LOCATION
",",O
United,I-LOCATION
States,I-LOCATION
",",O
our,O
principal,O
business,O
office,O
is,O
located,O
in,O
Toronto,I-LOCATION
",",O
Ontario,I-LOCATION
",",O
Canada,I-LOCATION
.,O
,O
Outside,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
it,O
may,O
be,O
difficult,O
for,O
investors,O
to,O
enforce,O
judgments,O
against,O
us,O
that,O
are,O
obtained,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
in,O
any,O
action,O
",",O
including,O
actions,O
predicated,O
upon,O
civil,O
liability,O
provisions,O
of,O
federal,O
securities,O
laws,O
.,O
,O
In,O
addition,O
",",O
all,O
of,O
our,O
directors,O
and,O
officers,O
reside,O
outside,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
and,O
nearly,O
all,O
of,O
the,O
assets,O
of,O
these,O
persons,O
and,O
our,O
assets,O
are,O
located,O
outside,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
As,O
a,O
result,O
",",O
it,O
may,O
not,O
be,O
possible,O
for,O
investors,O
to,O
effect,O
service,O
of,O
process,O
within,O
the,O
United,I-LOCATION
States,I-LOCATION
upon,O
such,O
persons,O
or,O
to,O
enforce,O
against,O
us,O
or,O
such,O
persons,O
judgments,O
predicated,O
upon,O
the,O
liability,O
provisions,O
of,O
United,I-LOCATION
States,I-LOCATION
securities,O
laws,O
.,O
,O
There,O
is,O
substantial,O
doubt,O
as,O
to,O
the,O
enforceability,O
against,O
us,O
or,O
any,O
of,O
our,O
directors,O
and,O
officers,O
located,O
outside,O
the,O
United,I-LOCATION
States,I-LOCATION
in,O
original,O
actions,O
or,O
in,O
actions,O
of,O
enforcement,O
of,O
judgments,O
of,O
United,I-LOCATION
States,I-LOCATION
courts,O
or,O
liabilities,O
predicated,O
on,O
the,O
civil,O
liability,O
provisions,O
of,O
United,I-LOCATION
States,I-LOCATION
federal,O
securities,O
laws,O
.,O
,O
In,O
addition,O
",",O
as,O
the,O
majority,O
of,O
our,O
assets,O
are,O
located,O
outside,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
it,O
may,O
be,O
difficult,O
to,O
enforce,O
United,I-LOCATION
States,I-LOCATION
bankruptcy,O
proceedings,O
against,O
us,O
.,O
,O
Under,O
bankruptcy,O
laws,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
courts,O
typically,O
have,O
jurisdiction,O
over,O
a,O
debtor,O
's,O
property,O
",",O
wherever,O
it,O
is,O
located,O
",",O
including,O
property,O
situated,O
in,O
other,O
countries,O
.,O
,O
Courts,O
outside,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
may,O
not,O
recognize,O
the,O
United,I-LOCATION
States,I-LOCATION
bankruptcy,O
court,O
's,O
jurisdiction,O
.,O
,O
Accordingly,O
",",O
you,O
may,O
have,O
trouble,O
administering,O
a,O
United,I-LOCATION
States,I-LOCATION
bankruptcy,O
case,O
involving,O
a,O
Nevada,I-LOCATION
company,O
as,O
debtor,O
with,O
most,O
of,O
its,O
property,O
located,O
outside,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
Any,O
orders,O
or,O
judgments,O
of,O
a,O
bankruptcy,O
court,O
obtained,O
by,O
you,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
may,O
not,O
be,O
enforceable,O
.,O
,O
Risks,O
Related,O
To,O
Our,O
Company,O
Stock,O
If,O
we,O
issue,O
additional,O
shares,O
in,O
the,O
future,O
",",O
it,O
will,O
result,O
in,O
the,O
dilution,O
of,O
our,O
existing,O
shareholders,O
.,O
,O
Our,O
articles,O
authorize,O
the,O
issuance,O
of,O
up,O
to,O
"100,000,000",O
shares,O
of,O
common,O
stock,O
and,O
"30,000,000",O
class,O
A,O
special,O
voting,O
stock,O
.,O
,O
Our,O
board,O
of,O
directors,O
may,O
choose,O
to,O
issue,O
some,O
or,O
all,O
of,O
such,O
shares,O
to,O
acquire,O
one,O
or,O
more,O
businesses,O
or,O
to,O
provide,O
additional,O
financing,O
in,O
the,O
future,O
.,O
,O
The,O
issuance,O
of,O
any,O
such,O
shares,O
will,O
result,O
in,O
a,O
reduction,O
of,O
the,O
book,O
value,O
and,O
market,O
price,O
of,O
the,O
outstanding,O
shares,O
of,O
our,O
common,O
stock,O
.,O
,O
If,O
we,O
issue,O
any,O
such,O
additional,O
shares,O
",",O
such,O
issuance,O
will,O
cause,O
a,O
reduction,O
in,O
the,O
proportionate,O
ownership,O
and,O
voting,O
power,O
of,O
all,O
current,O
shareholders,O
.,O
,O
Further,O
",",O
such,O
issuance,O
may,O
result,O
in,O
a,O
change,O
of,O
control,O
of,O
our,O
corporation,O
.,O
,O
Trading,O
of,O
our,O
stock,O
may,O
be,O
restricted,O
by,O
the,O
Securities,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
's,O
penny,O
stock,O
regulations,O
",",O
which,O
may,O
limit,O
a,O
stockholder,O
's,O
ability,O
to,O
buy,O
and,O
sell,O
our,O
stock,O
.,O
,O
The,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
has,O
adopted,O
regulations,O
which,O
generally,O
define,O
``,O
penny,O
stock,O
'',O
to,O
be,O
any,O
equity,O
security,O
that,O
has,O
a,O
market,O
price,O
(,O
as,O
defined,O
),O
less,O
than,O
$,O
5.00,O
per,O
share,O
or,O
an,O
exercise,O
price,O
of,O
less,O
than,O
$,O
5.00,O
per,O
share,O
",",O
subject,O
to,O
certain,O
exceptions,O
.,O
,O
Our,O
securities,O
are,O
covered,O
by,O
the,O
penny,O
stock,O
rules,O
",",O
which,O
impose,O
additional,O
sales,O
practice,O
requirements,O
on,O
broker-dealers,O
who,O
sell,O
to,O
persons,O
other,O
than,O
established,O
customers,O
and,O
``,O
accredited,O
investors,O
'',O
.,O
,O
The,O
term,O
``,O
accredited,O
investor,O
'',O
refers,O
generally,O
to,O
institutions,O
with,O
assets,O
in,O
excess,O
of,O
$,O
"5,000,000",O
or,O
individuals,O
with,O
a,O
net,O
worth,O
in,O
excess,O
of,O
$,O
"1,000,000",O
or,O
annual,O
income,O
exceeding,O
$,O
"200,000",O
or,O
$,O
"300,000",O
jointly,O
with,O
their,O
spouse,O
.,O
,O
The,O
penny,O
stock,O
rules,O
require,O
a,O
broker-dealer,O
",",O
prior,O
to,O
a,O
transaction,O
in,O
a,O
penny,O
stock,O
not,O
otherwise,O
exempt,O
from,O
the,O
rules,O
",",O
to,O
deliver,O
a,O
standardized,O
risk,O
disclosure,O
document,O
in,O
a,O
form,O
prepared,O
by,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
which,O
provides,O
information,O
about,O
penny,O
stocks,O
and,O
the,O
nature,O
and,O
level,O
of,O
risks,O
in,O
the,O
penny,O
stock,O
market,O
.,O
,O
The,O
broker-dealer,O
also,O
must,O
provide,O
the,O
customer,O
with,O
current,O
bid,O
and,O
offer,O
quotations,O
for,O
the,O
penny,O
stock,O
",",O
the,O
compensation,O
of,O
the,O
broker-dealer,O
and,O
its,O
salesperson,O
in,O
the,O
transaction,O
and,O
monthly,O
account,O
statements,O
showing,O
the,O
market,O
value,O
of,O
each,O
penny,O
stock,O
held,O
in,O
the,O
customer,O
's,O
account,O
.,O
,O
The,O
bid,O
and,O
offer,O
quotations,O
",",O
and,O
the,O
broker-dealer,O
and,O
salesperson,O
compensation,O
information,O
",",O
must,O
be,O
given,O
to,O
the,O
customer,O
orally,O
or,O
in,O
writing,O
prior,O
to,O
effecting,O
the,O
transaction,O
and,O
must,O
be,O
given,O
to,O
the,O
customer,O
in,O
writing,O
before,O
or,O
with,O
the,O
customer,O
's,O
confirmation,O
.,O
,O
In,O
addition,O
",",O
the,O
penny,O
stock,O
rules,O
require,O
that,O
prior,O
to,O
a,O
transaction,O
in,O
a,O
penny,O
stock,O
not,O
otherwise,O
exempt,O
from,O
these,O
rules,O
",",O
the,O
broker-dealer,O
must,O
make,O
a,O
special,O
written,O
determination,O
that,O
the,O
penny,O
stock,O
is,O
a,O
suitable,O
investment,O
for,O
the,O
purchaser,O
and,O
receive,O
the,O
purchaser,O
's,O
written,O
agreement,O
to,O
the,O
transaction,O
.,O
,O
These,O
disclosure,O
requirements,O
may,O
have,O
the,O
effect,O
of,O
reducing,O
the,O
level,O
of,O
trading,O
activity,O
in,O
the,O
secondary,O
market,O
for,O
the,O
stock,O
that,O
is,O
subject,O
to,O
these,O
penny,O
stock,O
rules,O
.,O
,O
Consequently,O
",",O
these,O
penny,O
stock,O
rules,O
may,O
affect,O
the,O
ability,O
of,O
broker-dealers,O
to,O
trade,O
our,O
securities,O
.,O
,O
We,O
believe,O
that,O
the,O
penny,O
stock,O
rules,O
discourage,O
investor,O
interest,O
in,O
and,O
limit,O
the,O
marketability,O
of,O
our,O
common,O
stock,O
.,O
,O
FINRA,I-BUSINESS
sales,O
practice,O
requirements,O
may,O
also,O
limit,O
a,O
stockholder,O
's,O
ability,O
to,O
buy,O
and,O
sell,O
our,O
stock,O
.,O
,O
In,O
addition,O
to,O
the,O
``,O
penny,O
stock,O
'',O
rules,O
described,O
above,O
",",O
the,O
Financial,I-BUSINESS
Industry,I-BUSINESS
Regulatory,I-BUSINESS
Authority,I-BUSINESS
(,O
FINRA,I-BUSINESS
),O
",",O
formerly,O
the,O
National,I-BUSINESS
Association,I-BUSINESS
of,I-BUSINESS
Securities,I-BUSINESS
Dealers,I-BUSINESS
or,O
NASD,I-BUSINESS
",",O
has,O
adopted,O
rules,O
that,O
require,O
that,O
in,O
recommending,O
an,O
investment,O
to,O
a,O
customer,O
",",O
a,O
broker-dealer,O
must,O
have,O
reasonable,O
grounds,O
for,O
believing,O
that,O
the,O
investment,O
is,O
suitable,O
for,O
that,O
customer,O
.,O
,O
Prior,O
to,O
recommending,O
speculative,O
low,O
priced,O
securities,O
to,O
their,O
non-institutional,O
customers,O
",",O
broker-dealers,O
must,O
make,O
reasonable,O
efforts,O
to,O
obtain,O
information,O
about,O
the,O
customer,O
's,O
financial,O
status,O
",",O
tax,O
status,O
",",O
investment,O
objectives,O
and,O
other,O
information,O
.,O
,O
Under,O
interpretations,O
of,O
these,O
rules,O
",",O
the,O
FINRA,I-BUSINESS
believes,O
that,O
there,O
is,O
a,O
high,O
probability,O
that,O
speculative,O
low,O
priced,O
securities,O
will,O
not,O
be,O
suitable,O
for,O
at,O
least,O
some,O
customers,O
.,O
,O
FINRA,I-BUSINESS
requirements,O
make,O
it,O
more,O
difficult,O
for,O
broker-dealers,O
to,O
recommend,O
that,O
their,O
customers,O
buy,O
our,O
common,O
stock,O
",",O
which,O
may,O
limit,O
your,O
ability,O
to,O
buy,O
and,O
sell,O
our,O
stock,O
and,O
have,O
an,O
adverse,O
effect,O
on,O
the,O
market,O
for,O
our,O
shares,O
.,O
,O
Our,O
common,O
stock,O
is,O
illiquid,O
and,O
the,O
price,O
of,O
our,O
common,O
stock,O
may,O
be,O
negatively,O
impacted,O
by,O
factors,O
which,O
are,O
unrelated,O
to,O
our,O
operations,O
.,O
,O
Our,O
common,O
stock,O
currently,O
trades,O
on,O
a,O
limited,O
basis,O
on,O
the,O
OTC,I-MISCELLANEOUS
Bulletin,I-MISCELLANEOUS
Board,I-MISCELLANEOUS
.,O
,O
Trading,O
of,O
our,O
stock,O
through,O
the,O
OTC,I-MISCELLANEOUS
Bulletin,I-MISCELLANEOUS
Board,I-MISCELLANEOUS
is,O
frequently,O
thin,O
and,O
highly,O
volatile,O
.,O
,O
There,O
is,O
no,O
assurance,O
that,O
a,O
sufficient,O
market,O
will,O
develop,O
in,O
the,O
stock,O
",",O
in,O
which,O
case,O
it,O
could,O
be,O
difficult,O
for,O
shareholders,O
to,O
sell,O
their,O
stock,O
.,O
,O
The,O
market,O
price,O
of,O
our,O
common,O
stock,O
could,O
fluctuate,O
substantially,O
due,O
to,O
a,O
variety,O
of,O
factors,O
",",O
including,O
market,O
perception,O
of,O
our,O
ability,O
to,O
achieve,O
our,O
planned,O
growth,O
",",O
quarterly,O
operating,O
results,O
of,O
our,O
competitors,O
",",O
trading,O
volume,O
in,O
our,O
common,O
stock,O
",",O
changes,O
in,O
general,O
conditions,O
in,O
the,O
economy,O
and,O
the,O
financial,O
markets,O
or,O
other,O
developments,O
affecting,O
our,O
competitors,O
or,O
us,O
.,O
,O
In,O
addition,O
",",O
the,O
stock,O
market,O
is,O
subject,O
to,O
extreme,O
price,O
and,O
volume,O
fluctuations,O
.,O
,O
This,O
volatility,O
has,O
had,O
a,O
significant,O
effect,O
on,O
the,O
market,O
price,O
of,O
securities,O
issued,O
by,O
many,O
companies,O
for,O
reasons,O
unrelated,O
to,O
their,O
operating,O
performance,O
and,O
could,O
have,O
the,O
same,O
effect,O
on,O
our,O
common,O
stock,O
.,O
,O
Trends,O
",",O
Risks,O
and,O
Uncertainties,O
We,O
have,O
sought,O
to,O
identify,O
what,O
we,O
believe,O
to,O
be,O
the,O
most,O
significant,O
risks,O
to,O
our,O
business,O
",",O
but,O
we,O
can,O
not,O
predict,O
whether,O
",",O
or,O
to,O
what,O
extent,O
",",O
any,O
of,O
such,O
risks,O
may,O
be,O
realized,O
nor,O
can,O
we,O
guarantee,O
that,O
we,O
have,O
identified,O
all,O
possible,O
risks,O
that,O
might,O
arise,O
.,O
,O
Investors,O
should,O
carefully,O
consider,O
all,O
of,O
such,O
risk,O
factors,O
before,O
making,O
an,O
investment,O
decision,O
with,O
respect,O
to,O
our,O
common,O
shares,O
.,O
,O
Unregistered,O
Sales,O
of,O
Equity,O
Securities,O
and,O
Use,O
of,O
Proceeds,O
None,O
.,O
,O
Defaults,O
Upon,O
Senior,O
Securities,O
None,O
.,O
,O
[,O
Removed,O
and,O
Reserved,O
],O
Item,O
5,O
.,O
,O
Other,O
Information,O
None,O
.,O
,O
Share,O
Exchange,O
Agreement,O
dated,O
August,O
11,O
",",O
2006,O
",",O
among,O
Northwest,I-BUSINESS
Passage,I-BUSINESS
Ventures,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
",",O
6544797,O
Canada,I-BUSINESS
Ltd.,I-BUSINESS
",",O
Americas,I-BUSINESS
Wind,I-BUSINESS
Energy,I-BUSINESS
Inc.,I-BUSINESS
and,O
the,O
shareholders,O
of,O
Americas,I-BUSINESS
Wind,I-BUSINESS
Energy,I-BUSINESS
Inc.,I-BUSINESS
(,O
incorporated,O
by,O
reference,O
from,O
our,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filed,O
on,O
September,O
11,O
",",O
2006,O
),O
.,O
,O
Articles,O
of,O
Incorporation,O
(,O
incorporated,O
by,O
reference,O
from,O
our,O
Registration,O
Statement,O
on,O
Form,I-MISCELLANEOUS
SB-2,I-MISCELLANEOUS
filed,O
on,O
October,O
29,O
",",O
2003,O
),O
.,O
,O
Bylaws,O
(,O
incorporated,O
by,O
reference,O
from,O
our,O
Registration,O
Statement,O
on,O
Form,I-MISCELLANEOUS
SB-2,I-MISCELLANEOUS
Filed,O
on,O
October,O
29,O
",",O
2003,O
),O
.,O
,O
Certificate,O
of,O
Amendment,O
filed,O
with,O
the,O
Nevada,I-GOVERNMENT
Secretary,I-GOVERNMENT
of,I-GOVERNMENT
State,I-GOVERNMENT
on,O
June,O
19,O
",",O
2006,O
(,O
incorporated,O
by,O
reference,O
from,O
our,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filed,O
on,O
September,O
11,O
",",O
2006,O
),O
.,O
,O
Certificate,O
of,O
Amendment,O
filed,O
with,O
the,O
Nevada,I-GOVERNMENT
Secretary,I-GOVERNMENT
of,I-GOVERNMENT
State,I-GOVERNMENT
on,O
October,O
16,O
",",O
2006,O
(,O
incorporated,O
by,O
reference,O
from,O
our,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filed,O
on,O
October,O
16,O
",",O
2006,O
),O
.,O
,O
License,O
Agreement,O
dated,O
April,O
23,O
",",O
2004,O
",",O
among,O
Americas,I-BUSINESS
Wind,I-BUSINESS
Energy,I-BUSINESS
Inc.,I-BUSINESS
and,O
Emergya,I-BUSINESS
Wind,I-BUSINESS
Technologies,I-BUSINESS
B.V.,I-BUSINESS
(,O
incorporated,O
by,O
reference,O
from,O
our,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filed,O
on,O
September,O
11,O
",",O
2006,O
),O
.,O
,O
Convertible,O
Loan,O
Agreement,O
between,O
our,O
company,O
and,O
Smart,I-BUSINESS
Goal,I-BUSINESS
Investment,I-BUSINESS
Limited,I-BUSINESS
(,O
incorporated,O
by,O
reference,O
from,O
our,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filed,O
on,O
April,O
11,O
",",O
2008,O
),O
.,O
,O
Sublicense,O
Agreement,O
dated,O
March,O
5,O
",",O
2009,O
(,O
incorporated,O
by,O
reference,O
from,O
our,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filed,O
on,O
March,O
11,O
",",O
2009,O
),O
.,O
,O
GE,I-BUSINESS
Assignment,O
Agreement,O
dated,O
March,O
5,O
",",O
2009,O
(,O
incorporated,O
by,O
reference,O
from,O
our,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filed,O
on,O
March,O
11,O
",",O
2009,O
),O
.,O
,O
Rural,I-BUSINESS
Assignment,O
Agreement,O
dated,O
March,O
5,O
",",O
2009,O
(,O
incorporated,O
by,O
reference,O
from,O
our,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filed,O
on,O
March,O
11,O
",",O
2009,O
),O
.,O
,O
Waverly,I-BUSINESS
Assignment,O
Agreement,O
dated,O
March,O
5,O
",",O
2009,O
(,O
incorporated,O
by,O
reference,O
from,O
our,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filed,O
on,O
March,O
11,O
",",O
2009,O
),O
.,O
,O
Consulting,O
Agreement,O
between,O
Mr.,O
Hal,I-PERSON
Dickout,I-PERSON
and,O
EWT-Americas,I-BUSINESS
Inc.,I-BUSINESS
(,O
incorporated,O
by,O
reference,O
from,O
our,O
Quarterly,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
filed,O
on,O
June,O
15,O
",",O
2009,O
),O
.,O
,O
Consulting,O
Agreement,O
between,O
Mr.,O
Frank,I-PERSON
Pickersgill,I-PERSON
and,O
EWT-Americas,I-BUSINESS
Inc.,I-BUSINESS
(,O
incorporated,O
by,O
reference,O
from,O
our,O
Quarterly,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
filed,O
on,O
June,O
15,O
",",O
2009,O
),O
.,O
,O
Settlement,O
Agreement,O
dated,O
April,O
28,O
",",O
2010,O
with,O
Emergya,I-BUSINESS
Wind,I-BUSINESS
Technologies,I-BUSINESS
B.V.,I-BUSINESS
and,O
EWT-,I-BUSINESS
Americas,I-BUSINESS
Inc.,I-BUSINESS
(,O
incorporated,O
by,O
reference,O
from,O
our,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filed,O
on,O
May,O
12,O
",",O
2010,O
),O
.,O
,O
SIGNATURES,O
Pursuant,O
to,O
the,O
requirements,O
of,O
Section,O
13,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
.,O
,O
Dated,O
:,O
June,O
14,O
",",O
2011,O
/s/,O
Harold,I-PERSON
C.F,I-PERSON
.,I-PERSON
,O
and,O
Principal,O
Accounting,O
Officer,O
),O
,O
EXHIBIT,O
31.1,O
CERTIFICATION,O
PURSUANT,O
TO,O
18,O
U.S.C.,I-LEGISLATION/ACT
ss,O
1350,O
",",O
AS,O
ADOPTED,O
PURSUANT,O
TO,O
SECTION,O
302,O
OF,O
THE,O
SARBANES-OXLEY,I-LEGISLATION/ACT
ACT,I-LEGISLATION/ACT
OF,I-LEGISLATION/ACT
2002,I-LEGISLATION/ACT
I,O
",",O
Harold,I-PERSON
C.,I-PERSON
F.,I-PERSON
Dickout,I-PERSON
",",O
certify,O
that,O
:,O
,O
I,O
have,O
reviewed,O
this,O
quarterly,O
report,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
of,O
Americas,I-BUSINESS
Wind,I-BUSINESS
Energy,I-BUSINESS
Corporation,I-BUSINESS
;,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
this,O
report,O
does,O
not,O
contain,O
any,O
untrue,O
statement,O
of,O
a,O
material,O
fact,O
or,O
omit,O
to,O
state,O
a,O
material,O
fact,O
necessary,O
to,O
make,O
the,O
statements,O
made,O
",",O
in,O
light,O
of,O
the,O
circumstances,O
under,O
which,O
such,O
statements,O
were,O
made,O
",",O
not,O
misleading,O
with,O
respect,O
to,O
the,O
period,O
covered,O
by,O
this,O
report,O
;,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
the,O
financial,O
statements,O
",",O
and,O
other,O
financial,O
information,O
included,O
in,O
this,O
report,O
",",O
fairly,O
present,O
in,O
all,O
material,O
respects,O
the,O
financial,O
condition,O
",",O
results,O
of,O
operations,O
and,O
cash,O
flows,O
of,O
the,O
registrant,O
as,O
of,O
",",O
and,O
for,O
",",O
the,O
periods,O
presented,O
in,O
this,O
report,O
;,O
,O
The,O
registrant,O
's,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
are,O
responsible,O
for,O
establishing,O
and,O
maintaining,O
disclosure,O
controls,O
and,O
procedures,O
(,O
as,O
defined,O
in,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
Rules,O
13a-15,O
(,O
e,O
),O
and,O
15d-15,O
(,O
e,O
),O
),O
and,O
internal,O
control,O
over,O
financial,O
reporting,O
(,O
as,O
defined,O
in,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
Rules,O
13a-15,O
(,O
f,O
),O
and,O
15d-15,O
(,O
f,O
),O
),O
for,O
the,O
registrant,O
and,O
have,O
:,O
,O
Designed,O
such,O
disclosure,O
controls,O
and,O
procedures,O
",",O
or,O
caused,O
such,O
disclosure,O
controls,O
and,O
procedures,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
ensure,O
that,O
material,O
information,O
relating,O
to,O
the,O
registrant,O
",",O
including,O
its,O
consolidated,O
subsidiaries,O
",",O
is,O
made,O
known,O
to,O
us,O
by,O
others,O
within,O
those,O
entities,O
",",O
particularly,O
during,O
the,O
period,O
in,O
which,O
this,O
report,O
is,O
being,O
prepared,O
;,O
,O
Designed,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
or,O
caused,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
provide,O
reasonable,O
assurance,O
regarding,O
the,O
reliability,O
of,O
financial,O
reporting,O
and,O
the,O
preparation,O
of,O
financial,O
statements,O
for,O
external,O
purposes,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
;,O
,O
The,O
registrant,O
's,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
have,O
disclosed,O
",",O
based,O
on,O
our,O
most,O
recent,O
evaluation,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
to,O
the,O
registrant,O
's,O
auditors,O
and,O
the,O
audit,O
committee,O
of,O
the,O
registrant,O
's,O
board,O
of,O
directors,O
(,O
or,O
persons,O
performing,O
the,O
equivalent,O
functions,O
),O
:,O
,O
Any,O
fraud,O
",",O
whether,O
or,O
not,O
material,O
",",O
that,O
involves,O
management,O
or,O
other,O
employees,O
who,O
have,O
a,O
significant,O
role,O
in,O
the,O
registrant,O
's,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
Date,O
:,O
June,O
14,O
",",O
2011,O
/s/,O
Harold,I-LOCATION
C.F.,I-LOCATION
Dickout,I-LOCATION
Harold,B-LOCATION
C.,I-LOCATION
F.,I-LOCATION
Dickout,I-LOCATION
President,O
",",O
Chief,O
Executive,O
Officer,O
",",O
Chairman,O
and,O
Director,O
(,O
Principal,O
Executive,O
Officer,O
",",O
Principal,O
FinancialOfficer,O
and,O
Principal,O
Accounting,O
Officer,O
),O
,O
EXHIBIT,O
32.1,O
CERTIFICATION,O
PURSUANT,O
TO,O
18,O
U.S.C.,I-LEGISLATION/ACT
SECTION,O
1350,O
",",O
AS,O
ADOPTED,O
PURSUANT,O
TO,O
SECTION,O
906,O
OF,O
THE,O
SARBANES-OXLEY,I-LEGISLATION/ACT
ACT,I-LEGISLATION/ACT
OF,I-LEGISLATION/ACT
2002,I-LEGISLATION/ACT
I,O
",",O
Harold,I-PERSON
C.,I-PERSON
F.,I-PERSON
Dickout,I-PERSON
",",O
hereby,O
certify,O
",",O
pursuant,O
to,O
18,O
U.S.C.,I-LEGISLATION/ACT
Section,O
1350,O
",",O
as,O
adopted,O
pursuant,O
to,O
Section,O
906,O
of,O
the,O
Sarbanes-Oxley,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
2002,I-LEGISLATION/ACT
",",O
that,O
:,O
,O
the,O
information,O
contained,O
in,O
the,O
Report,O
fairly,O
presents,O
",",O
in,O
all,O
material,O
respects,O
",",O
the,O
financial,O
condition,O
and,O
results,O
of,O
operations,O
of,O
Americas,I-BUSINESS
Wind,I-BUSINESS
Energy,I-BUSINESS
Corporation,I-BUSINESS
.,O
,O
/s/,O
Harold,I-PERSON
C.F,I-PERSON
.,I-PERSON
,O
and,O
Principal,O
Accounting,O
Officer,O
),O
,O
A,O
signed,O
original,O
of,O
this,O
written,O
statement,O
required,O
by,O
Section,O
906,O
",",O
or,O
other,O
document,O
authenticating,O
",",O
acknowledging,O
",",O
or,O
otherwise,O
adopting,O
the,O
signature,O
that,O
appears,O
in,O
typed,O
form,O
within,O
the,O
electronic,O
version,O
of,O
this,O
written,O
statement,O
required,O
by,O
Section,O
906,O
",",O
has,O
been,O
provided,O
to,O
Americas,I-BUSINESS
Wind,I-BUSINESS
Energy,I-BUSINESS
Corporation,I-BUSINESS
and,O
will,O
be,O
retained,O
by,O
Americas,I-BUSINESS
Wind,I-BUSINESS
Energy,I-BUSINESS
Corporation,I-BUSINESS
and,O
furnished,O
to,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
or,O
its,O
staff,O
upon,O
request,O
.,O
,O
-DOCSTART-,O
,O
To,O
seek,O
long-term,O
growth,O
of,O
capital,O
.,O
,O
This,O
table,O
describes,O
the,O
fees,O
and,O
expenses,O
you,O
may,O
pay,O
if,O
you,O
buy,O
and,O
hold,O
shares,O
of,O
the,O
fund,O
.,O
,O
You,O
may,O
qualify,O
for,O
sales,O
charge,O
discounts,O
on,O
Class,O
A,O
shares,O
if,O
you,O
and,O
your,O
family,O
invest,O
",",O
or,O
agree,O
to,O
invest,O
in,O
the,O
future,O
",",O
at,O
least,O
$,O
"50,000",O
in,O
the,O
John,I-BUSINESS
Hancock,I-BUSINESS
family,O
of,O
funds,O
.,O
,O
More,O
information,O
about,O
these,O
and,O
other,O
discounts,O
is,O
available,O
on,O
pages,O
11,O
to,O
12,O
of,O
the,O
prospectus,O
under,O
Sales,O
charge,O
reductions,O
and,O
waivers,O
or,O
pages,O
59,O
to,O
63,O
of,O
the,O
fund,O
s,O
statement,O
of,O
additional,O
information,O
under,O
Initial,O
Sales,O
Charge,O
on,O
Class,O
A,O
Shares,O
.,O
,O
Shareholder,O
fees,O
are,O
those,O
fees,O
paid,O
directly,O
from,O
your,O
investment,O
.,O
,O
Annual,O
fund,O
operating,O
expenses,O
are,O
those,O
expenses,O
that,O
you,O
pay,O
each,O
year,O
as,O
a,O
percentage,O
of,O
the,O
value,O
of,O
your,O
investment,O
.,O
,O
This,O
example,O
is,O
intended,O
to,O
help,O
you,O
compare,O
the,O
cost,O
of,O
investing,O
in,O
the,O
fund,O
with,O
the,O
cost,O
of,O
investing,O
in,O
other,O
mutual,O
funds,O
.,O
,O
Please,O
see,O
below,O
a,O
hypothetical,O
example,O
showing,O
the,O
expenses,O
of,O
a,O
$,O
"10,000",O
investment,O
at,O
the,O
end,O
of,O
the,O
various,O
time,O
frames,O
indicated,O
.,O
,O
The,O
example,O
assumes,O
a,O
5,O
%,O
average,O
annual,O
return,O
.,O
,O
The,O
example,O
assumes,O
fund,O
expenses,O
will,O
not,O
change,O
over,O
the,O
periods,O
.,O
,O
Although,O
your,O
actual,O
costs,O
may,O
be,O
higher,O
or,O
lower,O
",",O
based,O
on,O
these,O
assumptions,O
",",O
your,O
costs,O
would,O
be,O
:,O
,O
The,O
fund,O
pays,O
transaction,O
costs,O
",",O
such,O
as,O
commissions,O
",",O
when,O
it,O
buys,O
and,O
sells,O
securities,O
(,O
or,O
turns,O
over,O
its,O
portfolio,O
),O
.,O
,O
A,O
higher,O
portfolio,O
turnover,O
rate,O
may,O
indicate,O
higher,O
transaction,O
costs,O
and,O
may,O
result,O
in,O
higher,O
taxes,O
when,O
fund,O
shares,O
are,O
held,O
in,O
a,O
taxable,O
account,O
.,O
,O
These,O
costs,O
",",O
which,O
are,O
not,O
reflected,O
in,O
annual,O
fund,O
operating,O
expenses,O
or,O
in,O
the,O
example,O
",",O
affect,O
the,O
fund,O
s,O
performance,O
.,O
,O
During,O
its,O
most,O
recent,O
fiscal,O
year,O
",",O
the,O
fund,O
s,O
portfolio,O
turnover,O
rate,O
was,O
67,O
%,O
of,O
the,O
average,O
value,O
of,O
its,O
portfolio,O
.,O
,O
Under,O
normal,O
conditions,O
",",O
the,O
fund,O
invests,O
at,O
least,O
80,O
%,O
of,O
its,O
net,O
assets,O
in,O
domestic,O
equity,O
securities,O
.,O
,O
In,O
managing,O
the,O
fund,O
",",O
the,O
subadviser,O
seeks,O
to,O
identify,O
companies,O
that,O
it,O
believes,O
are,O
currently,O
undervalued,O
relative,O
to,O
the,O
market,O
",",O
based,O
on,O
estimated,O
future,O
earnings,O
and,O
cash,O
flow,O
.,O
,O
These,O
companies,O
generally,O
have,O
market,O
values,O
at,O
valuation,O
ratios,O
",",O
such,O
as,O
price-to-book,O
and,O
below,O
market,O
average,O
",",O
as,O
defined,O
by,O
the,O
S,I-MISCELLANEOUS
&,I-MISCELLANEOUS
P,I-MISCELLANEOUS
500,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
.,O
,O
In,O
choosing,O
individual,O
securities,O
",",O
the,O
subadviser,O
screens,O
a,O
dynamic,O
universe,O
of,O
the,O
500,O
largest,O
publicly,O
traded,O
U.S.,I-LOCATION
(,O
As,O
of,O
December,O
31,O
",",O
2009,O
",",O
this,O
included,O
companies,O
with,O
market,O
values,O
above,O
approximately,O
$,O
4.5,O
billion,O
.,O
),O
,O
Using,O
fundamental,O
research,O
and,O
a,O
proprietary,O
computer,O
model,O
",",O
the,O
subadviser,O
ranks,O
these,O
companies,O
from,O
the,O
cheapest,O
to,O
the,O
most,O
expensive,O
on,O
the,O
basis,O
of,O
current,O
share,O
price,O
to,O
the,O
subadviser,O
s,O
estimate,O
of,O
normal,O
long-term,O
earnings,O
power,O
.,O
,O
As,O
a,O
result,O
of,O
the,O
subadviser,O
s,O
research,O
and,O
stock,O
selection,O
",",O
the,O
fund,O
may,O
focus,O
on,O
particular,O
sectors,O
of,O
the,O
economy,O
.,O
,O
The,O
subadviser,O
s,O
management,O
team,O
intensively,O
evaluates,O
the,O
cheapest,O
companies,O
to,O
construct,O
a,O
portfolio,O
of,O
stocks,O
that,O
the,O
subadviser,O
believes,O
generally,O
have,O
the,O
following,O
characteristics,O
:,O
,O
Before,O
investing,O
",",O
the,O
subadviser,O
considers,O
the,O
value,O
of,O
an,O
entire,O
business,O
relative,O
to,O
its,O
price,O
.,O
,O
The,O
subadviser,O
views,O
itself,O
as,O
a,O
long-term,O
business,O
investor,O
",",O
rather,O
than,O
a,O
stock,O
buyer,O
.,O
,O
This,O
systematic,O
process,O
is,O
intended,O
to,O
ensure,O
that,O
the,O
fund,O
s,O
portfolio,O
avoids,O
the,O
emotional,O
inputs,O
that,O
can,O
lead,O
to,O
overvalued,O
securities,O
.,O
,O
The,O
subadviser,O
approaches,O
sell,O
decisions,O
from,O
the,O
same,O
disciplined,O
framework,O
.,O
,O
The,O
subadviser,O
generally,O
sells,O
a,O
security,O
when,O
it,O
reaches,O
fair,O
value,O
",",O
there,O
are,O
more,O
attractive,O
opportunities,O
or,O
there,O
is,O
a,O
change,O
in,O
company,O
fundamentals,O
.,O
,O
Under,O
normal,O
market,O
conditions,O
",",O
the,O
fund,O
is,O
almost,O
entirely,O
invested,O
in,O
stocks,O
.,O
,O
The,O
fund,O
may,O
invest,O
up,O
to,O
20,O
%,O
of,O
its,O
net,O
assets,O
in,O
debt,O
securities,O
",",O
including,O
debt,O
securities,O
rated,O
below,O
investment,O
grade,O
(,O
below,O
Baa,O
by,O
Moody,I-BUSINESS
s,I-BUSINESS
or,O
below,O
BBB,O
by,O
S,I-BUSINESS
&,I-BUSINESS
P,I-BUSINESS
",",O
and,O
in,O
comparable,O
quality,O
unrated,O
securities,O
that,O
",",O
in,O
the,O
opinion,O
of,O
the,O
subadviser,O
",",O
offer,O
comparable,O
yield,O
and,O
risks,O
to,O
those,O
securities,O
that,O
are,O
rated,O
.,O
,O
The,O
fund,O
may,O
also,O
invest,O
up,O
to,O
20,O
%,O
of,O
its,O
net,O
assets,O
in,O
securities,O
of,O
foreign,O
issuers,O
that,O
are,O
not,O
publicly,O
traded,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
including,O
depositary,O
receipts,O
.,O
,O
An,O
investment,O
in,O
the,O
fund,O
is,O
not,O
a,O
bank,O
deposit,O
and,O
is,O
not,O
insured,O
or,O
guaranteed,O
by,O
the,O
Federal,I-GOVERNMENT
Deposit,I-GOVERNMENT
Insurance,I-GOVERNMENT
Corporation,I-GOVERNMENT
or,O
any,O
other,O
government,O
agency,O
.,O
,O
The,O
fund,O
s,O
shares,O
will,O
go,O
up,O
and,O
down,O
in,O
price,O
",",O
meaning,O
that,O
you,O
could,O
lose,O
money,O
by,O
investing,O
in,O
the,O
fund,O
.,O
,O
Many,O
factors,O
influence,O
a,O
mutual,O
fund,O
s,O
performance,O
.,O
,O
Instability,O
in,O
the,O
financial,O
markets,O
has,O
led,O
the,O
United,I-GOVERNMENT
States,I-GOVERNMENT
government,I-GOVERNMENT
to,O
take,O
a,O
number,O
of,O
unprecedented,O
actions,O
designed,O
to,O
support,O
certain,O
financial,O
institutions,O
and,O
segments,O
of,O
the,O
financial,O
markets,O
that,O
have,O
experienced,O
extreme,O
volatility,O
and,O
",",O
in,O
some,O
cases,O
",",O
a,O
lack,O
of,O
liquidity,O
.,O
,O
Federal,I-GOVERNMENT
",",O
state,O
and,O
other,O
governments,O
",",O
and,O
their,O
regulatory,O
agencies,O
or,O
self-regulatory,O
organizations,O
",",O
may,O
take,O
actions,O
that,O
affect,O
the,O
regulation,O
of,O
the,O
instruments,O
in,O
which,O
the,O
fund,O
invests,O
",",O
or,O
the,O
issuers,O
of,O
such,O
instruments,O
",",O
in,O
ways,O
that,O
are,O
unforeseeable,O
.,O
,O
Legislation,O
or,O
regulation,O
may,O
also,O
change,O
the,O
way,O
in,O
which,O
the,O
fund,O
itself,O
is,O
regulated,O
.,O
,O
Such,O
legislation,O
or,O
regulation,O
could,O
limit,O
or,O
preclude,O
the,O
fund,O
s,O
ability,O
to,O
achieve,O
its,O
goal,O
.,O
,O
Governments,O
or,O
their,O
agencies,O
may,O
also,O
acquire,O
distressed,O
assets,O
from,O
financial,O
institutions,O
and,O
acquire,O
ownership,O
interests,O
in,O
those,O
institutions,O
.,O
,O
The,O
implications,O
of,O
government,O
ownership,O
and,O
disposition,O
of,O
these,O
assets,O
are,O
unclear,O
",",O
and,O
such,O
a,O
program,O
may,O
have,O
positive,O
or,O
negative,O
effects,O
on,O
the,O
liquidity,O
",",O
valuation,O
and,O
performance,O
of,O
the,O
fund,O
s,O
portfolio,O
holdings,O
.,O
,O
Furthermore,O
",",O
volatile,O
financial,O
markets,O
can,O
expose,O
the,O
fund,O
to,O
greater,O
market,O
and,O
liquidity,O
risk,O
and,O
potential,O
difficulty,O
in,O
valuing,O
portfolio,O
instruments,O
held,O
by,O
the,O
fund,O
.,O
,O
The,O
fund,O
s,O
main,O
risk,O
factors,O
are,O
listed,O
below,O
in,O
alphabetical,O
order,O
.,O
,O
Before,O
investing,O
",",O
be,O
sure,O
to,O
read,O
the,O
additional,O
descriptions,O
of,O
these,O
risks,O
beginning,O
on,O
page,O
5,O
of,O
the,O
prospectus,O
.,O
,O
Active,O
management,O
risk,O
The,O
subadviser,O
s,O
investment,O
strategy,O
may,O
fail,O
to,O
produce,O
the,O
intended,O
result,O
.,O
,O
Equity,O
securities,O
risk,O
The,O
value,O
of,O
a,O
company,O
s,O
equity,O
securities,O
is,O
subject,O
to,O
changes,O
in,O
the,O
company,O
s,O
financial,O
condition,O
",",O
and,O
overall,O
market,O
and,O
economic,O
conditions,O
.,O
,O
The,O
securities,O
of,O
value,O
companies,O
are,O
subject,O
to,O
the,O
risk,O
that,O
the,O
companies,O
may,O
not,O
overcome,O
the,O
adverse,O
business,O
developments,O
or,O
other,O
factors,O
causing,O
their,O
securities,O
to,O
be,O
underpriced,O
or,O
that,O
the,O
market,O
may,O
never,O
come,O
to,O
recognize,O
their,O
fundamental,O
value,O
.,O
,O
Fixed-income,O
securities,O
risk,O
Fixed-income,O
securities,O
are,O
affected,O
by,O
changes,O
in,O
interest,O
rates,O
and,O
credit,O
quality,O
.,O
,O
A,O
rise,O
in,O
interest,O
rates,O
typically,O
causes,O
bond,O
prices,O
to,O
fall,O
.,O
,O
The,O
longer,O
the,O
average,O
maturity,O
of,O
the,O
bonds,O
held,O
by,O
the,O
fund,O
",",O
the,O
more,O
sensitive,O
the,O
fund,O
is,O
likely,O
to,O
be,O
to,O
interest-rate,O
changes,O
.,O
,O
There,O
is,O
the,O
possibility,O
that,O
the,O
issuer,O
of,O
the,O
security,O
will,O
not,O
repay,O
all,O
or,O
a,O
portion,O
of,O
the,O
principal,O
borrowed,O
and,O
will,O
not,O
make,O
all,O
interest,O
payments,O
.,O
,O
Lower-rated,O
fixed-income,O
securities,O
and,O
high-yield,O
securities,O
involve,O
a,O
higher,O
degree,O
of,O
risk,O
than,O
fixed-income,O
securities,O
in,O
higher-rated,O
categories,O
.,O
,O
Foreign,O
securities,O
risk,O
As,O
compared,O
to,O
U.S.,I-LOCATION
companies,O
",",O
there,O
may,O
be,O
less,O
publicly,O
available,O
information,O
relating,O
to,O
foreign,O
companies,O
.,O
,O
Foreign,O
securities,O
may,O
be,O
subject,O
to,O
foreign,O
taxes,O
.,O
,O
The,O
value,O
of,O
foreign,O
securities,O
is,O
subject,O
to,O
currency,O
fluctuations,O
and,O
adverse,O
political,O
and,O
economic,O
developments,O
.,O
,O
Calendar,O
year,O
total,O
returns,O
These,O
do,O
not,O
include,O
sales,O
charges,O
and,O
would,O
have,O
been,O
lower,O
if,O
they,O
did,O
.,O
,O
Calendar,O
year,O
total,O
returns,O
are,O
shown,O
only,O
for,O
Class,O
A,O
shares,O
and,O
would,O
be,O
different,O
for,O
other,O
share,O
classes,O
.,O
,O
The,O
following,O
performance,O
information,O
shown,O
provides,O
some,O
indication,O
of,O
the,O
risks,O
of,O
investing,O
in,O
the,O
fund,O
.,O
,O
Fund,O
returns,O
vary,O
from,O
year,O
to,O
year,O
and,O
may,O
indicate,O
the,O
fund,O
s,O
level,O
of,O
volatility,O
;,O
however,O
",",O
as,O
always,O
",",O
past,O
performance,O
(,O
before,O
and,O
after,O
taxes,O
),O
does,O
not,O
indicate,O
future,O
results,O
.,O
,O
All,O
figures,O
assume,O
dividend,O
reinvestment,O
.,O
,O
Performance,O
for,O
the,O
fund,O
is,O
updated,O
daily,O
",",O
monthly,O
and,O
quarterly,O
and,O
may,O
be,O
obtained,O
at,O
our,O
Web,O
site,O
:,O
www.jhfunds.com/FundPerformance,O
or,O
by,O
calling,O
Signature,O
Services,O
at,O
1-800-225-5291,O
between,O
8:00,O
A.M.,O
and,O
7:00,O
P.M.,O
",",O
Eastern,I-MISCELLANEOUS
Time,I-MISCELLANEOUS
",",O
on,O
most,O
business,O
days,O
.,O
,O
Average,O
annual,O
total,O
returns,O
Performance,O
of,O
a,O
broad-based,O
market,O
index,O
is,O
included,O
for,O
comparison,O
.,O
,O
After-tax,O
returns,O
These,O
are,O
shown,O
only,O
for,O
Class,O
A,O
shares,O
and,O
would,O
be,O
different,O
for,O
other,O
classes,O
.,O
,O
They,O
reflect,O
the,O
highest,O
individual,O
federal,O
marginal,O
income,O
tax,O
rates,O
in,O
effect,O
as,O
of,O
the,O
date,O
provided,O
and,O
do,O
not,O
reflect,O
any,O
state,O
or,O
local,O
taxes,O
.,O
,O
Your,O
actual,O
after-tax,O
returns,O
may,O
be,O
different,O
.,O
,O
After-tax,O
returns,O
are,O
not,O
relevant,O
to,O
shares,O
held,O
in,O
an,O
IRA,O
",",O
401,O
(,O
k,O
),O
or,O
other,O
tax-,O
advantaged,O
investment,O
plan,O
.,O
,O
Total,O
return,O
The,O
fund,O
s,O
total,O
return,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
was,O
35.80,O
%,O
.,O
,O
Best,O
quarter,O
:,O
Q2,O
09,O
",",O
27.25,O
%,O
,O
Worst,O
quarter,O
:,O
Q4,O
08,O
",",O
−25.23,O
%,O
,O
The,O
minimum,O
initial,O
investment,O
requirement,O
for,O
Class,O
A,O
",",O
B,O
and,O
C,O
shares,O
of,O
the,O
fund,O
is,O
$,O
"2,500",O
",",O
except,O
for,O
Coverdell,I-MISCELLANEOUS
ESAs,I-MISCELLANEOUS
it,O
is,O
$,O
"2,000",O
and,O
group,O
investments,O
it,O
is,O
$,O
250,O
.,O
,O
There,O
are,O
no,O
subsequent,O
investment,O
requirements,O
.,O
,O
You,O
may,O
redeem,O
shares,O
of,O
the,O
fund,O
on,O
any,O
business,O
day,O
through,O
our,O
Web,O
site,O
:,O
www.jhfunds.com,O
;,O
by,O
mail,O
:,O
Mutual,O
Fund,O
Operations,O
",",O
John,I-BUSINESS
Hancock,I-BUSINESS
Signature,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
P.O,O
.,O
,O
or,O
by,O
telephone,O
:,O
,O
The,O
fund,O
typically,O
declares,O
and,O
pays,O
income,O
dividends,O
and,O
capital,O
gains,O
",",O
if,O
any,O
",",O
at,O
least,O
annually,O
.,O
,O
The,O
fund,O
s,O
distributions,O
are,O
taxable,O
",",O
and,O
will,O
be,O
taxed,O
as,O
ordinary,O
income,O
and/or,O
capital,O
gains,O
",",O
unless,O
you,O
are,O
investing,O
through,O
a,O
tax-deferred,O
arrangement,O
",",O
such,O
as,O
a,O
401,O
(,O
k,O
),O
plan,O
or,O
individual,O
retirement,O
account,O
.,O
,O
Withdrawals,O
from,O
such,O
tax-deferred,O
arrangements,O
may,O
be,O
subject,O
to,O
tax,O
.,O
,O
Shares,O
of,O
the,O
fund,O
are,O
primarily,O
sold,O
through,O
financial,O
intermediaries,O
",",O
such,O
as,O
brokers,O
",",O
banks,O
",",O
registered,O
investment,O
advisers,O
",",O
financial,O
planners,O
and,O
retirement,O
plan,O
administrators,O
.,O
,O
The,O
fund,O
s,O
related,O
companies,O
may,O
pay,O
intermediaries,O
for,O
the,O
sale,O
of,O
fund,O
shares,O
and,O
related,O
services,O
.,O
,O
These,O
payments,O
may,O
influence,O
the,O
financial,O
intermediary,O
to,O
recommend,O
the,O
fund,O
over,O
another,O
investment,O
.,O
,O
Ask,O
your,O
salesperson,O
or,O
visit,O
your,O
financial,O
intermediary,O
s,O
Web,O
site,O
for,O
more,O
information,O
.,O
,O
2010,O
John,I-BUSINESS
Hancock,I-BUSINESS
Funds,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
380SP,O
3-1-10,O
SEC,I-GOVERNMENT
file,O
number,O
:,O
,O
-DOCSTART-,O
,O
Check,O
the,O
appropriate,O
box,O
below,O
if,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filing,O
is,O
intended,O
to,O
simultaneously,O
satisfy,O
the,O
filing,O
obligation,O
of,O
the,O
Registrant,O
under,O
any,O
of,O
the,O
following,O
provisions,O
(,O
See,O
General,O
Instruction,O
A.2,O
below,O
),O
:,O
,O
Written,O
communications,O
pursuant,O
to,O
Rule,O
425,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17,O
CFR,I-LEGISLATION/ACT
230.425,O
),O
,O
Soliciting,O
material,O
pursuant,O
to,O
Rule,O
14a-12,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17,O
CFR,I-LEGISLATION/ACT
240.14a-12,O
),O
,O
Pre-commencement,O
communications,O
pursuant,O
to,O
Rule,O
14d-2,O
(,O
b,O
),O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17,O
CFR,I-LEGISLATION/ACT
240.14d-2,O
(,O
b,O
),O
),O
,O
Pre-commencement,O
communications,O
pursuant,O
to,O
Rule,O
13e-4,O
(,O
c,O
),O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17,O
CFR,I-LEGISLATION/ACT
240.13e-4,O
(,O
c,O
),O
),O
,O
Results,O
of,O
Operations,O
and,O
Financial,O
Condition,O
.,O
,O
CytRx,I-BUSINESS
Corporation,I-BUSINESS
on,O
May,O
5,O
",",O
2011,O
issued,O
a,O
press,O
release,O
regarding,O
its,O
financial,O
results,O
for,O
the,O
quarter,O
ended,O
March,O
31,O
",",O
2011,O
.,O
,O
A,O
copy,O
of,O
the,O
press,O
release,O
is,O
attached,O
as,O
Exhibit,O
99.1,O
.,O
,O
The,O
information,O
in,O
this,O
report,O
and,O
the,O
exhibit,O
attached,O
hereto,O
shall,O
not,O
be,O
deemed,O
``,O
filed,O
'',O
for,O
purposes,O
of,O
Section,O
18,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
nor,O
shall,O
they,O
be,O
deemed,O
incorporated,O
by,O
reference,O
in,O
any,O
filing,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
or,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
except,O
as,O
shall,O
be,O
expressly,O
set,O
forth,O
by,O
specific,O
reference,O
in,O
such,O
filing,O
.,O
,O
Financial,O
Statements,O
and,O
Exhibits,O
.,O
,O
The,O
exhibit,O
listed,O
on,O
the,O
accompanying,O
Index,O
to,O
Exhibits,O
is,O
filed,O
herewith,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
Report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
hereunto,O
duly,O
authorized,O
.,O
,O
LOS,I-LOCATION
ANGELES,I-LOCATION
(,O
May,O
5,O
",",O
2011,O
),O
–,O
CytRx,I-BUSINESS
Corporation,I-BUSINESS
(,O
Nasdaq,I-BUSINESS
:,O
CYTR,I-BUSINESS
),O
",",O
a,O
biopharmaceutical,O
company,O
specializing,O
in,O
oncology,O
",",O
today,O
reported,O
financial,O
results,O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
and,O
provided,O
a,O
business,O
update,O
.,O
,O
“,O
This,O
is,O
a,O
highly,O
eventful,O
time,O
at,O
CytRx,I-BUSINESS
as,O
we,O
currently,O
have,O
seven,O
clinical,O
trials,O
underway,O
or,O
expected,O
to,O
begin,O
soon,O
with,O
our,O
oncology,O
portfolio,O
.,O
,O
We,O
are,O
very,O
excited,O
about,O
our,O
plans,O
to,O
report,O
preliminary,O
clinical,O
data,O
from,O
our,O
Phase,O
2,O
proof-of-concept,O
clinical,O
trial,O
in,O
high-risk,O
B-cell,I-MISCELLANEOUS
chronic,I-MISCELLANEOUS
lymphocytic,I-MISCELLANEOUS
leukemia,I-MISCELLANEOUS
(,O
B-CLL,I-MISCELLANEOUS
),O
in,O
the,O
near-term,O
",",O
”,O
said,O
Steven,I-PERSON
A.,I-PERSON
Kriegsman,I-PERSON
",",O
CytRx,I-BUSINESS
President,O
and,O
CEO,O
.,O
,O
“,O
Our,O
ability,O
to,O
rapidly,O
produce,O
preliminary,O
efficacy,O
and,O
safety,O
data,O
reflects,O
solid,O
execution,O
on,O
a,O
strategy,O
to,O
quickly,O
and,O
cost-effectively,O
move,O
our,O
oncology,O
portfolio,O
toward,O
commercialization,O
",",O
with,O
the,O
goals,O
of,O
providing,O
effective,O
treatment,O
options,O
for,O
patients,O
suffering,O
with,O
cancers,O
and,O
enhancing,O
value,O
for,O
our,O
shareholders,O
.,O
,O
“,O
Among,O
our,O
recent,O
highlights,O
",",O
we,O
commenced,O
a,O
dose,O
escalation,O
trial,O
with,O
our,O
tumor-targeting,O
pro-drug,O
candidate,O
INNO-206,I-MISCELLANEOUS
in,O
patients,O
with,O
advanced,O
solid,O
tumors,O
who,O
have,O
failed,O
standard,O
therapies,O
.,O
,O
Data,O
from,O
this,O
trial,O
is,O
expected,O
to,O
support,O
our,O
planned,O
move,O
in,O
the,O
second,O
half,O
of,O
this,O
year,O
into,O
a,O
Phase,O
2,O
clinical,O
trial,O
in,O
patients,O
suffering,O
from,O
soft,O
tissue,O
sarcomas,O
",",O
”,O
he,O
added,O
.,O
,O
“,O
Additionally,O
",",O
just,O
last,O
week,O
we,O
announced,O
receipt,O
of,O
orphan,O
drug,O
designation,O
for,O
INNO-206,I-MISCELLANEOUS
in,O
pancreatic,O
cancer,O
and,O
are,O
now,O
making,O
arrangements,O
to,O
support,O
third-party,O
development,O
for,O
this,O
deadliest,O
of,O
all,O
cancers,O
.,O
,O
With,O
tamibarotene,O
",",O
we,O
took,O
measures,O
to,O
expedite,O
enrollment,O
in,O
our,O
Phase,O
2b,O
clinical,O
trial,O
with,O
this,O
drug,O
candidate,O
as,O
a,O
first-line,O
treatment,O
for,O
non-small-cell,O
lung,O
cancer,O
by,O
increasing,O
our,O
clinical,O
sites,O
to,O
15,O
.,O
,O
“,O
We,O
are,O
in,O
the,O
highly,O
advantageous,O
position,O
of,O
having,O
what,O
we,O
believe,O
are,O
sufficient,O
capital,O
resources,O
to,O
support,O
our,O
current,O
operations,O
and,O
development,O
programs,O
for,O
the,O
foreseeable,O
future,O
",",O
as,O
we,O
begin,O
to,O
produce,O
important,O
clinical,O
data,O
",",O
”,O
added,O
Mr.,O
,O
“,O
We,O
reported,O
more,O
than,O
$,O
30,O
million,O
in,O
cash,O
and,O
cash,O
equivalents,O
at,O
the,O
first,O
quarter,O
close,O
and,O
have,O
additional,O
opportunities,O
to,O
boost,O
our,O
financial,O
resources,O
by,O
monetizing,O
our,O
remaining,O
non-oncology,O
assets,O
.,O
,O
Last,O
month,O
",",O
we,O
received,O
"163,000",O
shares,O
of,O
common,O
stock,O
of,O
ADVENTRX,I-BUSINESS
Pharmaceuticals,I-BUSINESS
(,O
of,O
which,O
approximately,O
20,O
%,O
are,O
being,O
held,O
in,O
escrow,O
),O
in,O
exchange,O
for,O
our,O
19.1,O
%,O
stake,O
in,O
SynthRx,I-BUSINESS
.,O
,O
If,O
all,O
milestones,O
under,O
that,O
agreement,O
are,O
achieved,O
",",O
we,O
could,O
receive,O
up,O
to,O
2.9,O
million,O
additional,O
shares,O
of,O
ADVENTRX.,I-BUSINESS
”,O
The,O
last,O
sale,O
price,O
of,O
ADVENTRX,I-BUSINESS
(,O
NYSE,I-BUSINESS
Amex,I-BUSINESS
:,O
ANX,I-BUSINESS
),O
shares,O
on,O
the,O
NYSE,I-BUSINESS
Amex,I-BUSINESS
on,O
May,O
2,O
",",O
2011,O
was,O
$,O
2.65,O
.,O
,O
First,O
Quarter,O
2011,O
Financial,O
Results,O
CytRx,I-BUSINESS
reported,O
a,O
net,O
loss,O
for,O
the,O
first,O
quarter,O
of,O
2011,O
of,O
$,O
6.3,O
million,O
",",O
or,O
$,O
0.06,O
per,O
share,O
",",O
based,O
on,O
109.2,O
million,O
weighted,O
average,O
shares,O
outstanding,O
.,O
,O
The,O
2011,O
first,O
quarter,O
net,O
loss,O
included,O
a,O
recognized,O
gain,O
of,O
$,O
0.6,O
million,O
resulting,O
from,O
the,O
warrant,O
derivative,O
liabilities,O
related,O
to,O
warrants,O
issued,O
in,O
July,O
2009,O
being,O
marked,O
to,O
market,O
each,O
quarter,O
.,O
,O
The,O
Company,O
reported,O
a,O
net,O
loss,O
for,O
the,O
first,O
quarter,O
of,O
2010,O
of,O
$,O
0.6,O
million,O
",",O
or,O
$,O
0.01,O
per,O
share,O
",",O
based,O
on,O
108.9,O
million,O
weighted,O
average,O
shares,O
outstanding,O
.,O
,O
The,O
2010,O
first,O
quarter,O
included,O
a,O
$,O
3.8,O
million,O
gain,O
on,O
the,O
sales,O
of,O
shares,O
of,O
common,O
stock,O
in,O
RXi,I-BUSINESS
Pharmaceuticals,I-BUSINESS
Corporation,I-BUSINESS
(,O
Nasdaq,I-BUSINESS
:,O
RXII,I-BUSINESS
),O
and,O
$,O
0.1,O
million,O
on,O
the,O
valuation,O
of,O
warrant,O
derivative,O
liabilities,O
related,O
to,O
warrants,O
issued,O
in,O
July,O
2009,O
.,O
,O
The,O
Company,O
’,O
s,O
cash,O
used,O
in,O
operating,O
activities,O
was,O
approximately,O
$,O
3.7,O
million,O
for,O
the,O
first,O
quarter,O
of,O
2011,O
.,O
,O
Research,O
and,O
development,O
(,O
R,O
&,O
D,O
),O
expenses,O
were,O
$,O
4.8,O
million,O
for,O
first,O
quarter,O
of,O
2011,O
",",O
compared,O
with,O
$,O
2.0,O
million,O
for,O
first,O
quarter,O
of,O
2010,O
.,O
,O
This,O
increase,O
resulted,O
from,O
the,O
expansion,O
of,O
the,O
Company,O
’,O
s,O
oncology,O
clinical,O
development,O
programs,O
.,O
,O
R,O
&,O
D,O
expenses,O
excluding,O
stock,O
option,O
expense,O
",",O
non-cash,O
expenses,O
",",O
and,O
depreciation,O
expense,O
",",O
were,O
$,O
4.7,O
million,O
for,O
the,O
three-month,O
period,O
ended,O
March,O
31,O
",",O
2011,O
",",O
and,O
included,O
$,O
1.1,O
million,O
for,O
the,O
INNO-206,I-MISCELLANEOUS
program,O
",",O
$,O
0.1,O
million,O
for,O
the,O
bafetinib,O
program,O
",",O
$,O
2.3,O
million,O
for,O
the,O
tamibarotene,O
program,O
",",O
with,O
the,O
remainder,O
for,O
general,O
operation,O
of,O
clinical,O
programs,O
.,O
,O
General,O
and,O
administrative,O
(,O
G,O
&,O
A,O
),O
expenses,O
were,O
$,O
2.0,O
million,O
for,O
the,O
first,O
quarter,O
of,O
2011,O
",",O
compared,O
with,O
$,O
2.6,O
million,O
for,O
the,O
comparable,O
period,O
in,O
2010,O
",",O
and,O
included,O
$,O
0.2,O
million,O
of,O
employee,O
stock,O
option,O
expense,O
.,O
,O
The,O
reduction,O
was,O
due,O
to,O
a,O
decrease,O
in,O
professional,O
",",O
legal,O
and,O
consulting,O
fees,O
.,O
,O
CytRx,I-BUSINESS
reported,O
cash,O
",",O
cash,O
equivalents,O
and,O
marketable,O
securities,O
of,O
$,O
30.1,O
million,O
as,O
of,O
March,O
31,O
",",O
2011,O
",",O
compared,O
with,O
cash,O
",",O
cash,O
equivalents,O
and,O
marketable,O
securities,O
",",O
and,O
proceeds,O
from,O
the,O
sale,O
of,O
RXi,O
",",O
of,O
$,O
33.8,O
million,O
as,O
of,O
December,O
31,O
",",O
2010,O
.,O
,O
On,O
April,O
8,O
",",O
2011,O
",",O
CytRx,I-BUSINESS
received,O
approximately,O
"163,000",O
shares,O
of,O
common,O
stock,O
of,O
ADVENTRX,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
NYSE,I-BUSINESS
Amex,I-BUSINESS
:,O
ANX,I-BUSINESS
),O
in,O
exchange,O
for,O
its,O
19.1,O
%,O
ownership,O
in,O
SynthRx,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,I-BUSINESS
,O
CytRx,I-BUSINESS
has,O
a,O
pipeline,O
of,O
oncology,O
drug,O
compounds,O
that,O
offer,O
broad,O
market,O
opportunities,O
",",O
including,O
bafetinib,O
",",O
tamibarotene,O
and,O
INNO-206,I-MISCELLANEOUS
.,O
,O
CytRx,I-BUSINESS
holds,O
rights,O
to,O
bafetinib,I-MISCELLANEOUS
(,O
formerly,O
known,O
as,O
INNO-406,I-MISCELLANEOUS
),O
in,O
all,O
territories,O
except,O
Japan,I-LOCATION
.,O
,O
Bafetinib,I-MISCELLANEOUS
is,O
a,O
potent,O
",",O
orally,O
available,O
",",O
rationally,O
designed,O
",",O
dual,O
Bcr-Abl,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Lyn,I-MISCELLANEOUS
kinase,I-MISCELLANEOUS
inhibitor,O
.,O
,O
CytRx,I-BUSINESS
recently,O
announced,O
initiation,O
of,O
two,O
Phase,O
2,O
proof-of-concept,O
clinical,O
trials,O
to,O
evaluate,O
the,O
efficacy,O
and,O
safety,O
of,O
bafetinib,I-MISCELLANEOUS
in,O
patients,O
with,O
high-risk,O
B-cell,I-MISCELLANEOUS
chronic,I-MISCELLANEOUS
lymphocytic,I-MISCELLANEOUS
leukemia,I-MISCELLANEOUS
(,O
B-CLL,I-MISCELLANEOUS
),O
and,O
advanced,O
prostate,O
cancer,O
",",O
and,O
a,O
pharmacokinetic,O
clinical,O
trial,O
in,O
patients,O
with,O
brain,O
cancer,O
.,O
,O
Bafetinib,I-MISCELLANEOUS
was,O
developed,O
as,O
a,O
third-line,O
treatment,O
for,O
patients,O
with,O
CML,I-MISCELLANEOUS
and,O
certain,O
forms,O
of,O
acute,I-MISCELLANEOUS
myeloid,I-MISCELLANEOUS
leukemia,I-MISCELLANEOUS
(,O
AML,I-MISCELLANEOUS
),O
that,O
are,O
refractory,O
or,O
intolerant,O
of,O
other,O
approved,O
treatments,O
.,O
,O
In,O
November,O
2008,O
",",O
CytRx,I-BUSINESS
announced,O
that,O
bafetinib,I-MISCELLANEOUS
demonstrated,O
clinical,O
responses,O
in,O
patients,O
with,O
CML,I-MISCELLANEOUS
in,O
an,O
international,O
",",O
open-label,O
Phase,O
1,O
dose-ranging,O
clinical,O
trial,O
conducted,O
in,O
patients,O
with,O
CML,I-MISCELLANEOUS
and,O
other,O
leukemias,O
that,O
have,O
a,O
certain,O
mutation,O
called,O
the,O
Philadelphia,I-MISCELLANEOUS
Chromosome,I-MISCELLANEOUS
(,O
Ph+,I-MISCELLANEOUS
),O
and,O
are,O
intolerant,O
of,O
or,O
resistant,O
to,O
Gleevec,I-MISCELLANEOUS
and,O
",",O
in,O
some,O
cases,O
",",O
second-line,O
tyrosine,O
kinase,O
inhibitors,O
such,O
as,O
dasatinib,I-MISCELLANEOUS
and,O
nilotinib,I-MISCELLANEOUS
.,O
,O
In,O
April,O
2010,O
",",O
the,O
Company,O
announced,O
that,O
bafetinib,O
had,O
received,O
official,O
notification,O
from,O
the,O
Committee,I-GOVERNMENT
for,I-GOVERNMENT
Orphan,I-GOVERNMENT
Medicinal,I-GOVERNMENT
Products,I-GOVERNMENT
(,O
COMP,I-GOVERNMENT
),O
of,O
the,O
European,I-GOVERNMENT
Medicines,I-GOVERNMENT
Agency,I-GOVERNMENT
(,O
EMEA,I-GOVERNMENT
),O
that,O
a,O
positive,O
opinion,O
was,O
made,O
regarding,O
the,O
application,O
for,O
orphan,O
medicinal,O
product,O
status,O
for,O
the,O
treatment,O
of,O
chronic,I-MISCELLANEOUS
myeloid,I-MISCELLANEOUS
leukemia,I-MISCELLANEOUS
(,O
CML,I-MISCELLANEOUS
),O
.,O
,O
Bafetinib,I-MISCELLANEOUS
also,O
has,O
been,O
granted,O
Orphan,O
Drug,O
Status,O
for,O
the,O
treatment,O
of,O
Philadelphia,I-MISCELLANEOUS
chromosome-positive,I-MISCELLANEOUS
(,O
Ph+,I-MISCELLANEOUS
),O
CML,I-MISCELLANEOUS
by,O
the,O
U.S.,I-GOVERNMENT
Food,I-GOVERNMENT
and,I-GOVERNMENT
Drug,I-GOVERNMENT
Administration,I-GOVERNMENT
(,O
FDA,I-GOVERNMENT
),O
.,O
,O
CytRx,I-BUSINESS
holds,O
the,O
North,I-MISCELLANEOUS
American,I-MISCELLANEOUS
and,O
European,I-MISCELLANEOUS
rights,O
to,O
tamibarotene,I-MISCELLANEOUS
as,O
a,O
treatment,O
for,O
certain,O
cancers,O
.,O
,O
Tamibarotene,I-MISCELLANEOUS
is,O
an,O
orally,O
available,O
",",O
rationally,O
designed,O
",",O
synthetic,O
retinoid,O
compound,O
designed,O
to,O
potentially,O
avoid,O
toxic,O
side,O
effects,O
by,O
binding,O
to,O
its,O
molecular,O
target,O
more,O
selectively,O
than,O
all-trans,I-MISCELLANEOUS
retinoic,I-MISCELLANEOUS
acid,I-MISCELLANEOUS
(,O
ATRA,I-MISCELLANEOUS
),O
",",O
the,O
current,O
first-line,O
treatment,O
for,O
APL,I-MISCELLANEOUS
.,O
,O
Tamibarotene,I-MISCELLANEOUS
is,O
being,O
evaluated,O
for,O
efficacy,O
and,O
safety,O
in,O
a,O
Phase,O
2,O
trial,O
as,O
a,O
third-line,O
treatment,O
for,O
APL,O
",",O
and,O
in,O
a,O
Phase,O
1/2,O
dose,O
escalation,O
trial,O
in,O
combination,O
with,O
arsenic,I-MISCELLANEOUS
trioxide,I-MISCELLANEOUS
(,O
ATO,I-MISCELLANEOUS
),O
in,O
relapsed,O
APL,O
to,O
determine,O
maximum,O
dose,O
and,O
dose-limiting,O
toxicity,O
.,O
,O
The,O
FDA,I-GOVERNMENT
has,O
granted,O
Orphan,O
Drug,O
Designation,O
for,O
APL,I-MISCELLANEOUS
and,O
Fast,O
Track,O
Designation,O
for,O
the,O
treatment,O
of,O
adult,O
patients,O
with,O
relapsed,O
or,O
refractory,O
APL,I-MISCELLANEOUS
following,O
treatment,O
with,O
ATRA,I-MISCELLANEOUS
and,O
ATO,I-MISCELLANEOUS
.,O
,O
Tamibarotene,I-MISCELLANEOUS
also,O
has,O
been,O
granted,O
orphan,O
medicinal,O
product,O
status,O
by,O
the,O
European,I-GOVERNMENT
Medicines,I-GOVERNMENT
Agency,I-GOVERNMENT
for,O
the,O
treatment,O
of,O
APL,I-MISCELLANEOUS
.,O
,O
The,O
estimated,O
annual,O
market,O
potential,O
in,O
the,O
U.S.,I-LOCATION
and,O
Europe,I-LOCATION
for,O
tamibarotene,I-MISCELLANEOUS
as,O
a,O
treatment,O
for,O
refractory,O
",",O
maintenance,O
and,O
front-line,O
therapy,O
in,O
APL,I-MISCELLANEOUS
is,O
up,O
to,O
$,O
150,O
million,O
.,O
,O
In,O
addition,O
",",O
the,O
Company,O
has,O
announced,O
initiation,O
of,O
a,O
Phase,O
2,O
clinical,O
trial,O
of,O
tamibarotene,O
as,O
a,O
treatment,O
for,O
stage,O
IIIb,O
and,O
IV,O
non-small-cell,O
lung,O
cancer,O
.,O
,O
INNO-206,I-MISCELLANEOUS
is,O
a,O
tumor-targeting,O
pro-drug,O
of,O
the,O
commonly,O
prescribed,O
chemotherapeutic,I-MISCELLANEOUS
doxorubicin,I-MISCELLANEOUS
and,O
was,O
designed,O
to,O
reduce,O
adverse,O
events,O
by,O
controlling,O
release,O
and,O
preferentially,O
targeting,O
the,O
tumor,O
.,O
,O
The,O
Company,O
has,O
announced,O
plans,O
to,O
initiate,O
or,O
support,O
two,O
Phase,O
2,O
clinical,O
trials,O
of,O
INNO-206,I-MISCELLANEOUS
in,O
patients,O
with,O
soft,O
tissue,O
sarcomas,O
and,O
pancreatic,O
cancer,O
upon,O
completion,O
of,O
an,O
abbreviated,O
safety,O
study,O
.,O
,O
In,O
a,O
Phase,O
1,O
study,O
",",O
doses,O
were,O
administered,O
at,O
up,O
to,O
six,O
times,O
the,O
standard,O
dosing,O
of,O
doxorubicin,O
without,O
an,O
increase,O
in,O
observed,O
side,O
effects,O
over,O
those,O
historically,O
seen,O
with,O
doxorubicin,I-MISCELLANEOUS
.,O
,O
Objective,O
clinical,O
responses,O
were,O
seen,O
in,O
patients,O
with,O
sarcoma,O
",",O
breast,O
and,O
lung,O
cancers,O
.,O
,O
The,O
Company,O
also,O
has,O
announced,O
that,O
INNO-206,I-MISCELLANEOUS
demonstrated,O
statistically,O
significant,O
results,O
in,O
animal,O
models,O
of,O
breast,O
cancer,O
",",O
small,O
cell,O
lung,O
cancer,O
",",O
pancreatic,O
cancer,O
and,O
ovarian,O
cancer,O
.,O
,O
CytRx,I-BUSINESS
Corporation,I-BUSINESS
is,O
a,O
biopharmaceutical,O
research,O
and,O
development,O
oncology,O
company,O
engaged,O
in,O
the,O
development,O
of,O
high-value,O
human,O
therapeutics,O
.,O
,O
The,O
CytRx,I-BUSINESS
oncology,O
pipeline,O
includes,O
three,O
programs,O
in,O
clinical,O
development,O
for,O
cancer,O
indications,O
:,O
bafetinib,I-MISCELLANEOUS
",",O
tamibarotene,I-MISCELLANEOUS
and,O
INNO-206,I-MISCELLANEOUS
.,O
,O
The,O
Company,O
is,O
evaluating,O
bafetinib,I-MISCELLANEOUS
in,O
the,O
ENABLE,I-MISCELLANEOUS
Phase,O
2,O
clinical,O
trial,O
in,O
high-risk,O
B-cell,I-MISCELLANEOUS
chronic,I-MISCELLANEOUS
lymphocytic,I-MISCELLANEOUS
leukemia,I-MISCELLANEOUS
(,O
B-CLL,I-MISCELLANEOUS
),O
and,O
the,O
PROACT,I-MISCELLANEOUS
Phase,O
2,O
clinical,O
trial,O
in,O
advanced,O
prostate,O
cancer,O
",",O
and,O
is,O
conducting,O
a,O
pharmacokinetic,O
clinical,O
trial,O
in,O
brain,O
cancer,O
.,O
,O
With,O
its,O
tumor-targeting,O
pro-drug,O
candidate,O
INNO-206,I-MISCELLANEOUS
",",O
CytRx,I-BUSINESS
plans,O
to,O
initiate,O
or,O
support,O
Phase,O
2,O
proof-of-concept,O
clinical,O
trials,O
as,O
a,O
treatment,O
for,O
pancreatic,O
cancer,O
and,O
soft,O
tissue,O
sarcomas,O
",",O
following,O
a,O
dose,O
escalation,O
trial,O
in,O
patients,O
with,O
advanced,O
solid,O
tumors,O
.,O
,O
CytRx,I-BUSINESS
’,O
s,O
pipeline,O
also,O
includes,O
tamibarotene,I-MISCELLANEOUS
",",O
which,O
it,O
is,O
testing,O
in,O
patients,O
with,O
non-small-cell,O
lung,O
cancer,O
and,O
which,O
is,O
in,O
a,O
registration,O
clinical,O
trial,O
as,O
a,O
treatment,O
for,O
acute,I-MISCELLANEOUS
promyelocytic,I-MISCELLANEOUS
leukemia,I-MISCELLANEOUS
(,O
APL,I-MISCELLANEOUS
),O
.,O
,O
In,O
addition,O
to,O
its,O
core,O
oncology,O
programs,O
",",O
CytRx,I-BUSINESS
owns,O
rights,O
to,O
two,O
drug,O
candidates,O
based,O
on,O
its,O
molecular,O
chaperone,O
regulation,O
technology,O
.,O
,O
The,O
Company,O
’,O
s,O
current,O
business,O
strategy,O
is,O
to,O
seek,O
one,O
or,O
more,O
strategic,O
partnerships,O
to,O
pursue,O
the,O
development,O
of,O
that,O
technology,O
or,O
the,O
outright,O
sale,O
of,O
the,O
molecular,O
chaperone,O
business,O
.,O
,O
For,O
more,O
information,O
on,O
the,O
Company,O
",",O
visit,O
http,O
:,O
//www.cytrx.com,O
.,O
,O
This,O
press,O
release,O
contains,O
forward-looking,O
statements,O
within,O
the,O
meaning,O
of,O
Section,O
21E,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
.,O
,O
Such,O
statements,O
involve,O
risks,O
and,O
uncertainties,O
that,O
could,O
cause,O
actual,O
events,O
or,O
results,O
to,O
differ,O
materially,O
from,O
the,O
events,O
or,O
results,O
described,O
in,O
the,O
forward-looking,O
statements,O
",",O
including,O
risks,O
relating,O
to,O
the,O
ability,O
to,O
obtain,O
regulatory,O
approval,O
for,O
clinical,O
testing,O
of,O
INNO-206,I-MISCELLANEOUS
",",O
bafetinib,I-MISCELLANEOUS
or,O
tamibarotene,I-MISCELLANEOUS
",",O
the,O
scope,O
of,O
clinical,O
testing,O
that,O
may,O
be,O
required,O
by,O
regulatory,O
authorities,O
and,O
the,O
timing,O
and,O
outcome,O
of,O
further,O
clinical,O
trials,O
",",O
the,O
risk,O
that,O
any,O
future,O
human,O
testing,O
of,O
INNO-206,I-MISCELLANEOUS
for,O
pancreatic,O
cancer,O
or,O
soft,O
tissue,O
sarcomas,O
",",O
bafetinib,I-MISCELLANEOUS
for,O
B-CLL,I-MISCELLANEOUS
",",O
advanced,O
prostate,O
cancer,O
or,O
brain,O
cancer,O
",",O
or,O
tamibarotene,I-MISCELLANEOUS
for,O
APL,I-MISCELLANEOUS
or,O
solid,O
tumors,O
",",O
including,O
non-small,O
cell,O
lung,O
cancer,O
",",O
might,O
not,O
produce,O
results,O
similar,O
to,O
those,O
seen,O
in,O
past,O
human,O
or,O
animal,O
testing,O
",",O
risks,O
related,O
to,O
CytRx,I-BUSINESS
's,O
ability,O
to,O
manufacture,O
its,O
drug,O
candidates,O
in,O
a,O
timely,O
fashion,O
",",O
cost-effectively,O
or,O
in,O
commercial,O
quantities,O
in,O
compliance,O
with,O
stringent,O
regulatory,O
requirements,O
",",O
risks,O
related,O
to,O
CytRx,I-BUSINESS
's,O
ability,O
to,O
enter,O
into,O
one,O
or,O
more,O
transactions,O
to,O
advance,O
development,O
of,O
its,O
molecular,O
chaperone,O
assets,O
",",O
risks,O
related,O
to,O
CytRx,I-BUSINESS
's,O
need,O
for,O
additional,O
capital,O
or,O
strategic,O
partnerships,O
to,O
fund,O
its,O
ongoing,O
working,O
capital,O
needs,O
and,O
development,O
efforts,O
",",O
including,O
any,O
future,O
clinical,O
development,O
of,O
INNO-206,I-MISCELLANEOUS
",",O
Bafetinib,I-MISCELLANEOUS
or,O
tamibarotene,I-MISCELLANEOUS
",",O
and,O
the,O
risks,O
and,O
uncertainties,O
described,O
in,O
the,O
most,O
recent,O
annual,O
and,O
quarterly,O
reports,O
filed,O
by,O
CytRx,I-BUSINESS
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
and,O
current,O
reports,O
filed,O
since,O
the,O
date,O
of,O
CytRx,I-BUSINESS
's,O
most,O
recent,O
annual,O
report,O
.,O
,O
All,O
forward-looking,O
statements,O
are,O
based,O
upon,O
information,O
available,O
to,O
CytRx,I-BUSINESS
on,O
the,O
date,O
the,O
statements,O
are,O
first,O
published,O
.,O
,O
CytRx,I-BUSINESS
undertakes,O
no,O
obligation,O
to,O
publicly,O
update,O
or,O
revise,O
any,O
forward-looking,O
statements,O
",",O
whether,O
as,O
a,O
result,O
of,O
new,O
information,O
",",O
future,O
events,O
or,O
otherwise,O
.,O
,O
Contact,O
:,O
Investor,I-BUSINESS
Relations,I-BUSINESS
Legend,I-BUSINESS
Securities,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,I-BUSINESS
,O
-DOCSTART-,O
,O
Check,O
the,O
appropriate,O
box,O
below,O
if,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filing,O
is,O
intended,O
to,O
simultaneously,O
satisfy,O
the,O
filing,O
obligation,O
of,O
the,O
registrant,O
under,O
any,O
of,O
the,O
following,O
provisions,O
(,O
see,O
General,O
Instruction,O
A.2,O
.,O
,O
o,O
Written,O
communications,O
pursuant,O
to,O
Rule,O
425,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17CFR,I-LEGISLATION/ACT
230.425,O
),O
,O
o,O
Soliciting,O
material,O
pursuant,O
to,O
Rule,O
14a-12,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17CFR,I-LEGISLATION/ACT
240.14a-12,O
),O
,O
o,O
Pre-commencement,O
communications,O
pursuant,O
to,O
Rule,O
14d-2,O
(,O
b,O
),O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17CFR,I-LEGISLATION/ACT
240.14d-2,O
(,O
b,O
),O
),O
,O
o,O
Pre-commencement,O
communications,O
pursuant,O
to,O
Rule,O
13e-4,O
(,O
c,O
),O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17CFR,I-LEGISLATION/ACT
240.13e-4,O
(,O
c,O
),O
),O
,O
Item,O
2.02,O
Results,O
of,O
Operations,O
and,O
Financial,O
Condition,O
.,O
,O
On,O
February,O
3,O
",",O
2010,O
",",O
Pericom,I-BUSINESS
Semiconductor,I-BUSINESS
Corporation,I-BUSINESS
issued,O
a,O
press,O
release,O
announcing,O
earnings,O
for,O
the,O
fiscal,O
2010,O
second,O
quarter,O
ended,O
December,O
26,O
",",O
2009,O
.,O
,O
A,O
copy,O
of,O
the,O
press,O
release,O
and,O
presentation,O
slides,O
which,O
will,O
be,O
discussed,O
in,O
Pericom,O
’,O
s,O
webcast,O
earnings,O
call,O
are,O
attached,O
hereto,O
as,O
Exhibits,O
99.1,O
and,O
99.2,O
",",O
respectively,O
.,O
,O
The,O
information,O
in,O
this,O
current,O
report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
(,O
including,O
Exhibits,O
99.1,O
and,O
99.2,O
),O
is,O
being,O
furnished,O
pursuant,O
to,O
Item,O
12,O
and,O
shall,O
not,O
be,O
deemed,O
to,O
be,O
“,O
filed,O
”,O
for,O
purposes,O
of,O
Section,O
18,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
or,O
otherwise,O
subject,O
to,O
the,O
liability,O
of,O
that,O
section,O
.,O
,O
Item,O
9.01,O
Financial,O
Statements,O
",",O
Pro,O
Forma,O
Financial,O
Information,O
and,O
Exhibits,O
.,O
,O
The,O
exhibit,O
listed,O
below,O
is,O
being,O
furnished,O
with,O
this,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
.,O
,O
Press,O
Release,O
issued,O
by,O
Pericom,I-BUSINESS
Semiconductor,I-BUSINESS
Corporation,I-BUSINESS
entitled,O
“,O
Pericom,I-MISCELLANEOUS
Semiconductor,I-MISCELLANEOUS
Reports,I-MISCELLANEOUS
Fiscal,I-MISCELLANEOUS
Q2,I-MISCELLANEOUS
2010,I-MISCELLANEOUS
Financial,I-MISCELLANEOUS
Results,I-MISCELLANEOUS
”,O
dated,O
February,O
3,O
",",O
2010,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
hereunto,O
duly,O
authorized,O
.,O
,O
San,I-LOCATION
Jose,I-LOCATION
",",O
Calif,I-LOCATION
.,O
,O
–,O
February,O
3,O
",",O
2010,O
-,O
Pericom,I-BUSINESS
Semiconductor,I-BUSINESS
Corporation,I-BUSINESS
(,O
NASDAQ,I-BUSINESS
:,O
PSEM,I-BUSINESS
),O
",",O
a,O
worldwide,O
supplier,O
of,O
high-speed,O
integrated,O
circuits,O
and,O
frequency,O
control,O
products,O
",",O
today,O
announced,O
results,O
for,O
its,O
fiscal,O
second,O
quarter,O
ended,O
December,O
26,O
",",O
2009,O
.,O
,O
Net,O
revenues,O
improved,O
9,O
%,O
sequentially,O
and,O
17,O
%,O
year-over-year,O
to,O
$,O
35.8,O
million,O
.,O
,O
Gross,O
profits,O
increased,O
$,O
1.5,O
million,O
sequentially,O
and,O
$,O
2.1,O
million,O
year-over-year,O
.,O
,O
Gross,O
margin,O
of,O
33.6,O
%,O
improved,O
166,O
basis,O
points,O
on,O
a,O
sequential,O
basis,O
and,O
126,O
basis,O
points,O
year-over-year,O
.,O
,O
Net,O
income,O
increased,O
86,O
%,O
sequentially,O
and,O
120,O
%,O
year-over-year,O
to,O
$,O
2.5,O
million,O
.,O
,O
Total,O
shares,O
repurchased,O
during,O
the,O
period,O
were,O
"102,551",O
shares,O
for,O
$,O
"1,056,399",O
.,O
,O
Net,O
revenues,O
for,O
the,O
second,O
quarter,O
were,O
$,O
35.8,O
million,O
",",O
an,O
increase,O
of,O
9,O
%,O
from,O
the,O
$,O
33.0,O
million,O
reported,O
in,O
the,O
first,O
quarter,O
",",O
and,O
up,O
17,O
%,O
from,O
the,O
$,O
30.7,O
million,O
reported,O
in,O
the,O
comparable,O
period,O
last,O
year,O
.,O
,O
Gross,O
margin,O
was,O
33.6,O
%,O
",",O
up,O
from,O
32.0,O
%,O
last,O
quarter,O
",",O
and,O
up,O
from,O
32.4,O
%,O
in,O
the,O
comparable,O
period,O
last,O
year,O
.,O
,O
Net,O
revenues,O
for,O
the,O
six-month,O
period,O
ending,O
December,O
26,O
",",O
2009,O
were,O
$,O
68.8,O
million,O
",",O
down,O
8,O
%,O
from,O
$,O
74.5,O
million,O
in,O
the,O
prior,O
year,O
comparable,O
period,O
.,O
,O
Gross,O
margin,O
in,O
the,O
six-month,O
period,O
ending,O
December,O
26,O
",",O
2009,O
was,O
32.8,O
%,O
",",O
down,O
from,O
34.8,O
%,O
in,O
the,O
comparable,O
period,O
last,O
year,O
.,O
,O
Operating,O
expenses,O
in,O
the,O
quarter,O
were,O
$,O
10.4,O
million,O
",",O
down,O
from,O
$,O
10.9,O
million,O
in,O
the,O
previous,O
quarter,O
and,O
up,O
from,O
$,O
10.0,O
million,O
in,O
the,O
comparable,O
period,O
last,O
year,O
.,O
,O
Operating,O
expenses,O
in,O
the,O
six-month,O
period,O
ending,O
December,O
26,O
",",O
2009,O
were,O
$,O
21.3,O
million,O
",",O
unchanged,O
from,O
the,O
comparable,O
period,O
last,O
year,O
.,O
,O
Share-based,O
compensation,O
expense,O
in,O
the,O
quarter,O
was,O
$,O
"933,000",O
",",O
up,O
from,O
$,O
"930,000",O
in,O
the,O
previous,O
quarter,O
and,O
up,O
from,O
$,O
"904,000",O
in,O
the,O
comparable,O
period,O
last,O
year,O
.,O
,O
Stock,O
based,O
compensation,O
expense,O
for,O
the,O
six-month,O
period,O
ended,O
December,O
26,O
",",O
2009,O
was,O
$,O
"1,863,000",O
",",O
up,O
from,O
$,O
"1,699,000",O
in,O
the,O
comparable,O
prior,O
year,O
period,O
.,O
,O
Net,O
income,O
in,O
the,O
quarter,O
was,O
$,O
2.5,O
million,O
",",O
or,O
$,O
0.10,O
per,O
diluted,O
share,O
",",O
compared,O
with,O
net,O
income,O
of,O
$,O
1.3,O
million,O
",",O
or,O
$,O
0.05,O
per,O
diluted,O
share,O
in,O
the,O
first,O
quarter,O
",",O
and,O
net,O
income,O
of,O
$,O
1.1,O
million,O
",",O
or,O
$,O
0.04,O
per,O
diluted,O
share,O
in,O
the,O
comparable,O
period,O
last,O
year,O
.,O
,O
Net,O
income,O
in,O
the,O
six-month,O
period,O
ending,O
December,O
26,O
",",O
2009,O
was,O
$,O
3.8,O
million,O
",",O
or,O
$,O
0.15,O
per,O
diluted,O
share,O
",",O
down,O
from,O
$,O
4.8,O
million,O
",",O
or,O
$,O
0.19,O
per,O
diluted,O
share,O
in,O
the,O
comparable,O
prior,O
year,O
period,O
.,O
,O
“,O
We,O
are,O
pleased,O
to,O
report,O
a,O
strong,O
sequential,O
revenue,O
increase,O
of,O
9,O
%,O
",",O
driven,O
by,O
a,O
pickup,O
in,O
demand,O
from,O
all,O
key,O
market,O
segments,O
that,O
we,O
serve.,O
”,O
said,O
Alex,I-PERSON
Hui,I-PERSON
",",O
president,O
and,O
CEO,O
of,O
Pericom,I-BUSINESS
.,O
,O
“,O
We,O
achieved,O
a,O
sequential,O
improvement,O
in,O
gross,O
margin,O
and,O
a,O
reduction,O
in,O
operating,O
overhead,O
",",O
giving,O
us,O
better,O
operating,O
results,O
.,O
,O
We,O
will,O
continue,O
to,O
drive,O
improvements,O
in,O
these,O
areas,O
going,O
forward,O
.,O
”,O
,O
“,O
We,O
are,O
happy,O
to,O
see,O
the,O
deployment,O
of,O
our,O
serial,O
connectivity,O
and,O
timing,O
solutions,O
beyond,O
the,O
digital,O
video,O
and,O
PC,O
markets,O
that,O
we,O
served,O
in,O
recent,O
years,O
.,O
,O
We,O
initiated,O
the,O
volume,O
shipment,O
of,O
PCIe,I-MISCELLANEOUS
products,O
into,O
embedded,O
applications,O
such,O
as,O
multi-function,O
printers,O
and,O
wireless,O
routers,O
.,O
,O
We,O
also,O
scored,O
multiple,O
design,O
wins,O
with,O
our,O
signal,O
integrity,O
solution,O
at,O
key,O
networking,O
and,O
server,O
OEMs,O
.,O
,O
With,O
new,O
versions,O
of,O
serial,O
protocols,O
operating,O
at,O
higher,O
data,O
rates,O
",",O
we,O
expect,O
to,O
see,O
an,O
increasing,O
need,O
for,O
our,O
products,O
.,O
,O
With,O
its,O
broad,O
connectivity,O
and,O
timing,O
solutions,O
",",O
Pericom,I-BUSINESS
is,O
well,O
positioned,O
to,O
support,O
our,O
key,O
customers,O
in,O
the,O
next,O
phase,O
of,O
growth,O
.,O
,O
We,O
look,O
forward,O
to,O
resuming,O
our,O
revenue,O
growth,O
and,O
delivering,O
better,O
operating,O
results,O
in,O
2010,O
.,O
”,O
,O
In,O
the,O
December,O
quarter,O
",",O
we,O
continued,O
to,O
expand,O
our,O
serial,O
connectivity,O
solution,O
with,O
the,O
introduction,O
of,O
9,O
new,O
products,O
that,O
work,O
across,O
the,O
Signal,O
Integrity,O
",",O
Timing,O
and,O
Connectivity,O
product,O
areas,O
:,O
,O
Expanding,O
its,O
solutions,O
for,O
high,O
speed,O
serial,O
protocol,O
signal,O
integrity,O
",",O
Pericom,I-BUSINESS
introduced,O
2,O
new,O
ReDriverTM,I-LEGISLATION/ACT
products,O
addressing,O
high,O
speed,O
serial,O
SATA,I-MISCELLANEOUS
(,O
Serial,I-MISCELLANEOUS
ATA,I-MISCELLANEOUS
),O
and,O
DisplayPort,I-MISCELLANEOUS
protocols,O
.,O
,O
These,O
products,O
address,O
volume,O
computing,O
and,O
ultra-mobility,O
market,O
segments,O
.,O
,O
Adding,O
to,O
high,O
speed,O
Connectivity,O
solutions,O
",",O
Pericom,I-BUSINESS
introduced,O
3,O
new,O
switching,O
and,O
connectivity,O
products,O
targeted,O
across,O
PCIe,I-MISCELLANEOUS
Gen2,I-MISCELLANEOUS
",",O
HDMI,I-MISCELLANEOUS
",",O
and,O
USB,I-MISCELLANEOUS
2.0,I-MISCELLANEOUS
protocols,O
.,O
,O
The,O
USB,I-MISCELLANEOUS
2.0,I-MISCELLANEOUS
product,O
integrates,O
industry,O
leading,O
features,O
for,O
ultra-mobility,O
(,O
cell,O
phone,O
),O
platforms,O
.,O
,O
Other,O
target,O
segments,O
include,O
volume,O
computing,O
.,O
,O
Expanding,O
its,O
timing,O
solutions,O
for,O
next,O
generation,O
platforms,O
",",O
Pericom,I-BUSINESS
introduced,O
4,O
new,O
products,O
in,O
the,O
past,O
quarter—2,O
advanced,O
crystal,O
oscillators,O
(,O
XO,O
),O
and,O
2,O
clock,O
generator/buffers—all,O
targeting,O
next,O
generation,O
networking,O
and,O
ultra-mobility,O
market,O
segments,O
.,O
,O
On,O
April,O
29,O
",",O
2008,O
",",O
our,O
Board,O
of,O
Directors,O
authorized,O
the,O
repurchase,O
of,O
an,O
additional,O
$,O
30,O
million,O
of,O
our,O
common,O
stock,O
.,O
,O
Pursuant,O
to,O
the,O
2008,O
authority,O
",",O
the,O
Company,O
repurchased,O
"102,551",O
shares,O
in,O
the,O
three,O
months,O
ended,O
December,O
26,O
",",O
2009,O
for,O
an,O
aggregate,O
cost,O
of,O
$,O
"1,056,399",O
and,O
an,O
average,O
per,O
share,O
purchase,O
price,O
of,O
$,O
10.30,O
.,O
,O
The,O
remaining,O
balance,O
of,O
potential,O
share,O
repurchases,O
under,O
the,O
2008,O
authority,O
is,O
approximately,O
$,O
25.4,O
million,O
.,O
,O
The,O
following,O
statements,O
are,O
based,O
on,O
current,O
expectations,O
.,O
,O
These,O
statements,O
are,O
forward,O
looking,O
",",O
and,O
actual,O
results,O
may,O
differ,O
materially,O
.,O
,O
Revenues,O
in,O
the,O
third,O
fiscal,O
quarter,O
are,O
expected,O
to,O
be,O
in,O
the,O
range,O
of,O
$,O
34.0,O
million,O
to,O
$,O
36.0,O
million,O
.,O
,O
Gross,O
margins,O
are,O
expected,O
to,O
be,O
in,O
the,O
33,O
%,O
to,O
35,O
%,O
range,O
.,O
,O
Operating,O
expenses,O
are,O
expected,O
to,O
be,O
in,O
the,O
range,O
of,O
$,O
9.8,O
to,O
$,O
10.4,O
million,O
",",O
which,O
include,O
stock-based,O
compensation,O
expense,O
of,O
approximately,O
$,O
1.0,O
million,O
.,O
,O
Other,O
income,O
is,O
expected,O
to,O
be,O
approximately,O
$,O
1.1,O
million,O
.,O
,O
Net,O
income,O
from,O
unconsolidated,O
affiliates,O
PTI,I-BUSINESS
and,O
JCP,I-BUSINESS
is,O
expected,O
to,O
be,O
approximately,O
$,O
0.4,O
million,O
.,O
,O
The,O
effective,O
tax,O
rate,O
is,O
expected,O
to,O
be,O
approximately,O
33,O
%,O
.,O
,O
The,O
press,O
release,O
will,O
be,O
followed,O
by,O
a,O
conference,O
call,O
beginning,O
at,O
1:30,O
p.m.,O
.,O
,O
To,O
listen,O
to,O
the,O
call,O
",",O
dial,O
(,O
888,O
),O
278-8459,O
and,O
reference,O
“,O
Pericom,I-BUSINESS
”,O
.,O
,O
A,O
slide,O
presentation,O
will,O
accompany,O
the,O
conference,O
call,O
.,O
,O
To,O
view,O
the,O
slides,O
",",O
please,O
visit,O
the,O
investor,O
relations,O
section,O
of,O
www.pericom.com,O
.,O
,O
A,O
taped,O
replay,O
of,O
the,O
conference,O
call,O
will,O
be,O
made,O
available,O
for,O
five,O
business,O
days,O
.,O
,O
To,O
listen,O
to,O
the,O
replay,O
",",O
dial,O
(,O
888,O
),O
203-1112,O
and,O
reference,O
conference,O
number,O
5436348,O
.,O
,O
The,O
Pericom,I-BUSINESS
financial,O
results,O
conference,O
call,O
will,O
be,O
available,O
via,O
a,O
live,O
webcast,O
on,O
the,O
investor,O
relations,O
section,O
of,O
the,O
web,O
site,O
at,O
http,O
:,O
//www.pericom.com,O
.,O
,O
Access,O
the,O
web,O
site,O
15,O
minutes,O
prior,O
to,O
the,O
start,O
of,O
the,O
call,O
to,O
download,O
and,O
install,O
any,O
necessary,O
audio,O
software,O
.,O
,O
An,O
archived,O
webcast,O
replay,O
will,O
be,O
available,O
on,O
the,O
web,O
site,O
for,O
approximately,O
90,O
days,O
.,O
,O
Pericom,I-BUSINESS
Semiconductor,I-BUSINESS
Corporation,I-BUSINESS
(,O
NASDAQ,I-BUSINESS
:,O
PSEM,I-BUSINESS
),O
enables,O
serial,O
connectivity,O
with,O
the,O
industry,O
's,O
most,O
complete,O
solutions,O
for,O
the,O
computing,O
",",O
communications,O
and,O
consumer,O
market,O
segments,O
.,O
,O
Pericom,I-BUSINESS
's,O
analog,O
",",O
digital,O
and,O
mixed-signal,O
integrated,O
circuits,O
",",O
along,O
with,O
its,O
SaRonix-eCERA,I-MISCELLANEOUS
frequency,O
control,O
products,O
are,O
essential,O
in,O
the,O
timing,O
",",O
switching,O
",",O
bridging,O
and,O
conditioning,O
of,O
high-speed,O
signals,O
required,O
by,O
today,O
's,O
ever-increasing,O
speed,O
and,O
bandwidth,O
demanding,O
applications,O
.,O
,O
Company,O
headquarters,O
is,O
in,O
San,I-LOCATION
Jose,I-LOCATION
",",O
California,I-LOCATION
",",O
with,O
design,O
centers,O
and,O
technical,O
sales,O
and,O
support,O
offices,O
globally,O
.,O
,O
This,O
press,O
release,O
contains,O
forward-looking,O
statements,O
as,O
defined,O
under,O
The,I-LEGISLATION/ACT
Securities,I-LEGISLATION/ACT
Litigation,I-LEGISLATION/ACT
Reform,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1995,I-LEGISLATION/ACT
.,O
,O
Forward-looking,O
statements,O
in,O
this,O
release,O
include,O
the,O
statements,O
under,O
the,O
caption,O
‘,O
Fiscal,O
Q3,O
Outlook,O
’,O
",",O
which,O
regard,O
the,O
anticipated,O
revenues,O
",",O
gross,O
margin,O
",",O
operating,O
expenses,O
",",O
other,O
income,O
and,O
tax,O
rate,O
in,O
the,O
third,O
fiscal,O
quarter,O
",",O
and,O
statements,O
regarding,O
continuing,O
to,O
drive,O
improvements,O
in,O
gross,O
margin,O
and,O
operating,O
overhead,O
",",O
an,O
increasing,O
need,O
for,O
our,O
products,O
",",O
Pericom,I-BUSINESS
being,O
well,O
positioned,O
for,O
the,O
next,O
phase,O
of,O
growth,O
",",O
resuming,O
revenue,O
growth,O
and,O
delivering,O
better,O
operating,O
results,O
in,O
2010,O
.,O
,O
The,O
Company,O
’,O
s,O
actual,O
results,O
could,O
differ,O
materially,O
from,O
what,O
is,O
set,O
forth,O
in,O
such,O
forward-looking,O
statements,O
due,O
to,O
a,O
variety,O
of,O
risk,O
factors,O
",",O
including,O
softness,O
in,O
demand,O
for,O
our,O
products,O
",",O
price,O
erosion,O
for,O
certain,O
of,O
our,O
products,O
",",O
unexpected,O
difficulties,O
in,O
developing,O
new,O
products,O
",",O
customer,O
decisions,O
to,O
reduce,O
inventory,O
",",O
economic,O
or,O
financial,O
difficulties,O
experienced,O
by,O
our,O
customers,O
",",O
or,O
technological,O
and,O
market,O
changes,O
.,O
,O
All,O
forward-looking,O
statements,O
included,O
in,O
this,O
document,O
are,O
made,O
as,O
of,O
the,O
date,O
hereof,O
",",O
based,O
on,O
information,O
available,O
to,O
the,O
Company,O
as,O
of,O
the,O
date,O
hereof,O
",",O
and,O
Pericom,I-BUSINESS
assumes,O
no,O
obligation,O
to,O
update,O
any,O
forward-looking,O
statements,O
.,O
,O
Parties,O
receiving,O
this,O
release,O
are,O
encouraged,O
to,O
review,O
our,O
annual,O
report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
June,O
27,O
",",O
2009,O
",",O
and,O
",",O
in,O
particular,O
",",O
the,O
risk,O
factors,O
section,O
contained,O
therein,O
.,O
,O
(,O
In,O
thousands,O
",",O
except,O
per,O
share,O
data,O
),O
,O
This,O
presentation,O
will,O
include,O
remarks,O
about,O
future,O
expectations,O
",",O
plans,O
and,O
prospects,O
for,O
Pericom,I-BUSINESS
which,O
constitute,O
forward-looking,O
statements,O
for,O
purposes,O
of,O
the,O
safe-harbor,O
provisions,O
under,O
applicable,O
federal,O
securities,O
laws,O
.,O
,O
Such,O
forward-looking,O
statementsinclude,O
the,O
statements,O
in,O
the,O
slide,O
entitled,O
Q3,O
FY10,O
Business,O
Outlook,O
",",O
which,O
sets,O
forth,O
expected,O
revenues,O
",",O
gross,O
margin,O
and,O
other,O
financial,O
results,O
for,O
the,O
fiscal,O
third,O
quarter,O
.,O
,O
Actual,O
results,O
may,O
differ,O
materially,O
from,O
our,O
forward-looking,O
statements,O
",",O
as,O
a,O
result,O
of,O
various,O
important,O
risks,O
and,O
uncertainties,O
",",O
including,O
unexpected,O
softness,O
in,O
demand,O
for,O
our,O
products,O
",",O
price,O
erosion,O
for,O
certain,O
of,O
our,O
products,O
",",O
customer,O
decisions,O
to,O
reduce,O
inventory,O
and,O
other,O
risks,O
and,O
uncertainties,O
which,O
are,O
detailed,O
and,O
may,O
be,O
reviewed,O
in,O
the,O
Company,O
s,O
filings,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
All,O
forward-looking,O
statements,O
included,O
in,O
this,O
presentation,O
are,O
made,O
as,O
of,O
the,O
date,O
of,O
this,O
presentation,O
",",O
and,O
Pericom,I-BUSINESS
expressly,O
disclaims,O
any,O
obligation,O
to,O
update,O
the,O
information,O
provided,O
in,O
this,O
presentation,O
",",O
except,O
as,O
required,O
by,O
law,O
.,O
,O
We,O
encourage,O
you,O
to,O
review,O
our,O
most,O
recent,O
annual,O
report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
and,O
our,O
most,O
recent,O
quarterly,O
report,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
filed,O
with,O
the,O
SEC,I-GOVERNMENT
and,O
",",O
in,O
particular,O
the,O
risk,O
factor,O
sections,O
of,O
those,O
filings,O
.,O
,O
Up,O
9,O
%,O
Q-to-Q,O
and,O
17,O
%,O
vs,O
.,O
,O
Computer,O
at,O
47,O
%,O
",",O
communication,O
at,O
31,O
%,O
",",O
consumer,O
at,O
15,O
%,O
",",O
other,O
7,O
%,O
,O
US,O
at,O
8,O
%,O
",",O
Asia,O
at,O
87,O
%,O
",",O
Europe,O
at,O
5,O
%,O
,O
Domestic,O
distribution,O
at,O
6,O
%,O
",",O
foreign,O
distribution,O
at,O
54,O
%,O
",",O
contract,O
manufacturers,O
at,O
24,O
%,O
",",O
OEMs,O
at,O
16,O
%,O
,O
Gross,O
margin,O
of,O
33.6,O
%,O
,O
Q2,O
gross,O
margin,O
increased,O
166,O
bps,O
sequentially,O
and,O
127,O
bps,O
vs,O
.,O
,O
Operating,O
expense,O
of,O
$,O
10.4,O
M,O
vs,O
.,O
,O
$,O
10.9,O
M,O
last,O
Q,O
included,O
:,O
,O
Operating,O
income,O
of,O
$,O
1.7,O
M,O
vs,O
.,O
,O
Operating,O
income,O
margin,O
of,O
4.7,O
%,O
,O
Net,O
income,O
of,O
$,O
2.5,O
M,O
vs,O
.,O
,O
Net,O
profit,O
margin,O
of,O
6.9,O
%,O
,O
GAAP,I-LEGISLATION/ACT
EPS,O
of,O
10,O
cents,O
vs,O
.,O
,O
Tax,O
Rate,O
of,O
33.9,O
%,O
for,O
Q2,O
.,O
,O
IC,O
at,O
62,O
%,O
,O
Included,O
analog,O
switch,O
at,O
28,O
%,O
",",O
digital,O
switch,O
at,O
8,O
%,O
",",O
silicon,O
clocks,O
at,O
8,O
%,O
",",O
connect,O
at,O
16,O
%,O
",",O
interface,O
at,O
2,O
%,O
,O
FCP,O
at,O
38,O
%,O
,O
Pericom,I-BUSINESS
introduced,O
a,O
total,O
of,O
9,O
new,O
products,O
across,O
the,O
Signal,O
Integrity,O
",",O
Timing,O
",",O
and,O
Connectivity,O
product,O
areas,O
in,O
our,O
2QFY10,O
.,O
,O
Pericom,I-BUSINESS
introduced,O
2,O
new,O
ReDriverTM,I-MISCELLANEOUS
products,O
-,O
addressing,O
high,O
speed,O
serial,O
SATA,I-MISCELLANEOUS
and,O
DisplayPort,I-MISCELLANEOUS
protocols,O
.,O
,O
These,O
products,O
address,O
volume,O
Computing,O
and,O
Ultra,O
Mobility,O
market,O
segments,O
.,O
,O
Pericom,I-BUSINESS
introduced,O
3,O
new,O
switching,O
and,O
connectivity,O
products,O
targeted,O
across,O
PCIe,I-MISCELLANEOUS
Gen2,I-MISCELLANEOUS
",",O
HDMI,I-MISCELLANEOUS
",",O
and,O
USB2.0,I-MISCELLANEOUS
protocols,O
.,O
,O
The,O
USB2.0,I-MISCELLANEOUS
product,O
integrates,O
industry,O
leading,O
features,O
for,O
Ultra,O
Mobility,O
(,O
cell,O
phone,O
),O
platforms,O
.,O
,O
Other,O
target,O
segments,O
include,O
volume,O
Computing,O
.,O
,O
Tax,O
rate,O
of,O
approximately,O
33,O
%,O
,O
-DOCSTART-,O
,O
Subject,O
Company,O
:,O
O.A.K.,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
Commission,O
File,O
No.,O
Growth,O
made,O
in,O
Michigan,I-LOCATION
.,O
,O
A,O
LOT,O
OF,O
PEOPLE,O
ARE,O
TALKING,O
ABOUT,O
STATE,O
PRIDE,O
THESE,O
DAYS,O
.,O
,O
BUT,O
AT,O
CHEMICAL,I-BUSINESS
BANK,I-BUSINESS
",",O
IT,O
'S,O
NOT,O
A,O
TREND,O
.,O
,O
IT,O
'S,O
OUR,O
TRADITION,O
.,O
,O
WE,O
'RE,O
MAKING,O
A,O
STATEMENT,O
.,O
,O
TO,O
OUR,O
SHAREHOLDERS,O
You,O
may,O
recall,O
that,O
in,O
our,O
2008,O
letter,O
",",O
we,O
related,O
that,O
we,O
were,O
``,O
facing,O
economic,O
challenges,O
the,O
depth,O
and,O
breadth,O
of,O
which,O
are,O
unprecedented,O
in,O
our,O
lifetimes,O
.,O
'',O
,O
We,O
noted,O
that,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
would,O
neither,O
play,O
the,O
``,O
blame,O
game,O
'',O
nor,O
seek,O
government,O
handouts,O
.,O
,O
We,O
chose,O
",",O
instead,O
",",O
to,O
help,O
lead,O
the,O
way,O
to,O
recovery,O
by,O
providing,O
our,O
customers,O
and,O
communities,O
with,O
access,O
to,O
financial,O
products,O
and,O
services,O
",",O
resources,O
and,O
direction,O
in,O
these,O
uncertain,O
times,O
.,O
,O
In,O
short,O
",",O
we,O
viewed,O
the,O
environment,O
as,O
an,O
opportunity,O
for,O
us,O
to,O
show,O
leadership,O
",",O
and,O
we,O
are,O
pleased,O
to,O
report,O
that,O
we,O
have,O
stepped,O
capably,O
into,O
that,O
role,O
.,O
,O
For,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
",",O
2009,O
was,O
a,O
year,O
of,O
renewal,O
and,O
growth,O
in,O
which,O
we,O
not,O
only,O
survived,O
",",O
but,O
capitalized,O
on,O
a,O
challenging,O
environment,O
to,O
progress,O
on,O
a,O
number,O
of,O
long-term,O
strategic,O
goals,O
and,O
objectives,O
",",O
including,O
:,O
Assuming,O
the,O
mantle,O
of,O
leadership,O
in,O
promoting,O
Michigan,I-LOCATION
through,O
our,O
``,O
Made,I-MISCELLANEOUS
in,I-MISCELLANEOUS
Michigan,I-MISCELLANEOUS
'',O
campaign,O
Serving,O
as,O
a,O
source,O
of,O
strength,O
and,O
stabi,O
lity,O
for,O
the,O
communities,O
and,O
customers,O
we,O
serve,O
",",O
as,O
a,O
profitable,O
",",O
financially,O
strong,O
depository,O
institution,O
",",O
resulting,O
in,O
double-digit,O
deposit,O
growth,O
Posting,O
positive,O
earnings,O
and,O
strong,O
capital,O
levels,O
in,O
a,O
challenging,O
economic,O
environment,O
",",O
while,O
maintaining,O
and,O
even,O
expanding,O
our,O
commitments,O
to,O
our,O
customers,O
",",O
communities,O
and,O
the,O
not-for-profit,O
organizations,O
we,O
support,O
Working,O
with,O
customers,O
facing,O
significant,O
economic,O
challenges,O
to,O
arrive,O
at,O
mutually,O
acceptable,O
solutions,O
to,O
short-term,O
financial,O
duress,O
",",O
including,O
a,O
highly,O
successful,O
residential,O
mortgage,O
modification,O
program,O
Identifying,O
",",O
negotiating,O
",",O
and,O
in,O
early,O
2010,O
",",O
announcing,O
a,O
pending,O
merger,O
with,O
O.A.K.,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
that,O
we,O
believe,O
will,O
facilitate,O
future,O
growth,O
while,O
enhancing,O
our,O
client,O
service,O
capabilities,O
in,O
the,O
important,O
Grand,I-LOCATION
Rapids,I-LOCATION
region,O
To,O
be,O
clear,O
",",O
neither,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
nor,O
Michigan,I-LOCATION
is,O
immune,O
to,O
further,O
impacts,O
from,O
the,O
economic,O
storm,O
that,O
has,O
gripped,O
our,O
country,O
for,O
the,O
past,O
few,O
years,O
and,O
our,O
state,O
for,O
even,O
longer,O
.,O
,O
On,O
the,O
other,O
hand,O
",",O
we,O
can,O
see,O
",",O
for,O
the,O
first,O
time,O
in,O
quite,O
a,O
while,O
",",O
a,O
slowdown,O
in,O
the,O
rate,O
of,O
decline,O
and,O
sense,O
early-stage,O
opportunities,O
that,O
will,O
facilitate,O
future,O
growth,O
.,O
,O
As,O
a,O
result,O
",",O
we,O
are,O
cautiously,O
optimistic,O
about,O
what,O
2010,O
holds,O
in,O
store,O
for,O
both,O
the,O
state,O
and,O
our,O
Company,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
is,O
the,O
third,O
largest,O
bank,O
holding,O
company,O
headquartered,O
in,O
Michigan,I-LOCATION
",",O
with,O
129,O
branch,O
offices,O
in,O
31,O
counties,O
.,O
,O
CHANGING,O
THE,O
LANDSCAPE,O
OF,O
OUR,O
GREAT,O
STATE,O
A,O
SOURCE,O
OF,O
STRENGTH,O
AND,O
STABILITY,O
Our,O
financial,O
performance,O
has,O
positioned,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
as,O
a,O
source,O
of,O
strength,O
and,O
stability,O
in,O
the,O
markets,O
we,O
serve,O
.,O
,O
In,O
perhaps,O
the,O
most,O
difficult,O
environment,O
to,O
make,O
money,O
in,O
banking,O
in,O
recent,O
memory,O
",",O
we,O
are,O
pleased,O
to,O
report,O
that,O
during,O
2009,O
",",O
Chemical,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
posted,O
earnings,O
of,O
$,O
10.0,O
million,O
",",O
or,O
$,O
0.42,O
per,O
diluted,O
share,O
",",O
as,O
compared,O
to,O
$,O
19.8,O
million,O
",",O
or,O
$,O
0.83,O
per,O
diluted,O
share,O
",",O
reported,O
for,O
2008,O
.,O
,O
Our,O
earnings,O
decline,O
was,O
driven,O
primarily,O
by,O
higher,O
provisions,O
for,O
loan,O
losses,O
",",O
higher,O
credit-related,O
costs,O
",",O
and,O
higher,O
FDIC,I-GOVERNMENT
insurance,O
premiums,O
.,O
,O
All,O
three,O
of,O
these,O
factors,O
are,O
related,O
to,O
the,O
challenging,O
economic,O
environment,O
in,O
which,O
we,O
are,O
operating,O
.,O
,O
Make,O
no,O
mistake,O
",",O
we,O
are,O
not,O
satisfied,O
with,O
this,O
level,O
of,O
earnings,O
and,O
are,O
committed,O
to,O
improving,O
it,O
.,O
,O
Balance,O
sheet,O
growth,O
fueled,O
by,O
strong,O
deposit,O
growth,O
led,O
to,O
a,O
modest,O
increase,O
in,O
net,O
interest,O
income,O
.,O
,O
Our,O
strategy,O
to,O
maintain,O
a,O
high,O
level,O
of,O
liquidity,O
should,O
allow,O
us,O
t,O
o,O
achieve,O
higher,O
earnings,O
as,O
quality,O
loan,O
growth,O
opportunities,O
emerge,O
.,O
,O
A,O
variety,O
of,O
costs,O
related,O
to,O
overall,O
declines,O
in,O
asset,O
quality,O
tempered,O
our,O
ability,O
to,O
achieve,O
a,O
higher,O
level,O
of,O
earnings,O
.,O
,O
Most,O
significantly,O
",",O
our,O
provision,O
for,O
loan,O
losses,O
increased,O
substantially,O
",",O
from,O
$,O
49.2,O
million,O
in,O
2008,O
to,O
$,O
59.0,O
million,O
in,O
2009,O
",",O
an,O
increase,O
of,O
20,O
percent,O
.,O
,O
In,O
addition,O
",",O
we,O
recorded,O
additional,O
credit-related,O
costs,O
and,O
write,O
downs,O
of,O
other,O
real,O
estate,O
owned,O
",",O
which,O
is,O
real,O
estate,O
acquired,O
through,O
a,O
negotiated,O
process,O
with,O
debtors,O
who,O
are,O
unable,O
to,O
meet,O
their,O
obligations,O
",",O
or,O
in,O
some,O
cases,O
through,O
foreclosure,O
",",O
totaling,O
$,O
9.1,O
million,O
",",O
up,O
45,O
percent,O
2008,O
levels,O
.,O
,O
Noninterest,O
income,O
was,O
essentially,O
flat,O
for,O
the,O
year,O
",",O
while,O
operating,O
expenses,O
were,O
up,O
$,O
8.5,O
million,O
",",O
or,O
8,O
percent,O
",",O
due,O
primarily,O
to,O
the,O
aforementioned,O
increases,O
in,O
credit-related,O
costs,O
and,O
FDIC,I-GOVERNMENT
premiums,O
.,O
,O
Credit,O
related,O
costs,O
were,O
up,O
$,O
2.8,O
million,O
or,O
45,O
percent,O
and,O
FDIC,I-GOVERNMENT
premiums,O
were,O
up,O
$,O
6.1,O
million,O
or,O
680,O
percent,O
.,O
,O
Asset,O
quality,O
was,O
an,O
area,O
of,O
primary,O
focus,O
during,O
2009,O
",",O
and,O
while,O
it,O
declined,O
significantly,O
during,O
the,O
first,O
three,O
quarters,O
",",O
the,O
rate,O
of,O
decline,O
showed,O
signs,O
of,O
subsiding,O
during,O
the,O
fourth,O
quarter,O
of,O
2009,O
.,O
,O
MADE,O
IN,O
MICHIGAN,O
CHEMICAL,O
BANKMI.COM,O
31,O
",",O
2009,O
.,O
,O
As,O
a,O
consequence,O
",",O
the,O
loan,O
loss,O
provision,O
was,O
increased,O
to,O
recognize,O
losses,O
inherent,O
in,O
the,O
portfolio,O
.,O
,O
This,O
resulted,O
in,O
a,O
42,O
percent,O
increase,O
in,O
our,O
allowance,O
for,O
loan,O
losses,O
to,O
$,O
80.8,O
million,O
at,O
December,O
31,O
",",O
2009,O
compared,O
to,O
the,O
prior,O
year-end,O
level,O
of,O
$,O
57.1,O
million,O
.,O
,O
Net,O
charge-offs,O
increased,O
in,O
2009,O
by,O
$,O
3.6,O
million,O
",",O
or,O
12,O
percent,O
",",O
to,O
$,O
35.2,O
million,O
.,O
,O
Despite,O
these,O
credit-related,O
challenges,O
",",O
the,O
Company,O
was,O
able,O
to,O
maintain,O
a,O
position,O
of,O
capital,O
strength,O
.,O
,O
Coupled,O
with,O
the,O
more,O
severe,O
challenges,O
faced,O
by,O
many,O
of,O
the,O
institutions,O
with,O
whom,O
we,O
compete,O
",",O
we,O
are,O
relatively,O
well,O
positioned,O
to,O
translate,O
this,O
strength,O
into,O
a,O
competitive,O
advantage,O
.,O
,O
During,O
2009,O
",",O
existing,O
and,O
new,O
customers,O
responded,O
to,O
our,O
financial,O
strength,O
",",O
which,O
translated,O
into,O
significant,O
growth,O
for,O
the,O
Company,O
.,O
,O
This,O
growth,O
was,O
fueled,O
by,O
a,O
substantial,O
increase,O
in,O
deposits,O
.,O
,O
From,O
December,O
31,O
",",O
2008,O
to,O
December,O
31,O
",",O
2009,O
",",O
deposits,O
increased,O
from,O
$,O
2.98,O
billion,O
to,O
$,O
3.42,O
billion,O
",",O
an,O
increase,O
of,O
$,O
439,O
million,O
",",O
o,O
r,O
nearly,O
15,O
percent,O
.,O
,O
We,O
utilized,O
these,O
deposits,O
to,O
enhance,O
our,O
liquidity,O
and,O
pay,O
down,O
long-term,O
debt,O
.,O
,O
While,O
we,O
continued,O
to,O
lend,O
to,O
creditworthy,O
customers,O
and,O
actively,O
sought,O
out,O
new,O
customer,O
relationships,O
",",O
incremental,O
demand,O
for,O
loans,O
remained,O
low,O
as,O
businesses,O
and,O
consumers,O
became,O
more,O
conservative,O
.,O
,O
Total,O
loans,O
remained,O
flat,O
as,O
a,O
substantial,O
increase,O
in,O
consumer,O
lending,O
",",O
fueled,O
by,O
growth,O
in,O
indirect,O
lending,O
",",O
was,O
offset,O
by,O
declines,O
in,O
residential,O
real,O
estate,O
lending,O
.,O
,O
This,O
decline,O
came,O
as,O
the,O
bank,O
sold,O
a,O
significant,O
percentage,O
of,O
the,O
residential,O
mortgage,O
loans,O
it,O
originated,O
at,O
near,O
historically,O
low,O
fixed,O
rates,O
into,O
the,O
secondary,O
market,O
",",O
retaining,O
servicing,O
rights,O
.,O
,O
As,O
a,O
result,O
",",O
Chemical,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
's,O
total,O
assets,O
increased,O
by,O
$,O
376.4,O
million,O
",",O
or,O
nearly,O
10,O
percent,O
",",O
in,O
2009,O
.,O
,O
To,O
put,O
this,O
in,O
context,O
",",O
in,O
the,O
4-year,O
period,O
from,O
December,O
31,O
",",O
2004,O
",",O
to,O
December,O
31,O
",",O
2008,O
",",O
our,O
total,O
assets,O
increased,O
by,O
$,O
110.2,O
million,O
",",O
or,O
3,O
percent,O
.,O
,O
In,O
2010,O
",",O
credit,O
quality,O
issues,O
will,O
remain,O
a,O
primary,O
concern,O
",",O
and,O
we,O
will,O
contin,O
ue,O
to,O
take,O
appropriate,O
actions,O
to,O
lower,O
nonperforming,O
asset,O
levels,O
.,O
,O
SOWING,O
THE,O
SEEDS,O
OF,O
PROGRESS,O
FACILITATING,O
FUTURE,O
GROWTH,O
Deposit,O
growth,O
in,O
2009,O
result,O
in,O
part,O
from,O
an,O
increase,O
in,O
consumers,O
',O
savings,O
rates,O
but,O
was,O
facilitated,O
by,O
the,O
strong,O
",",O
relationship-based,O
sales,O
and,O
service,O
orientation,O
of,O
our,O
organization,O
.,O
,O
In,O
2009,O
",",O
despite,O
the,O
economic,O
challenges,O
we,O
faced,O
",",O
we,O
made,O
considerable,O
strides,O
in,O
enhancing,O
our,O
retail,O
market,O
positioning,O
.,O
,O
Our,O
efforts,O
in,O
promoting,O
and,O
building,O
our,O
brand,O
helped,O
leverage,O
the,O
returns,O
from,O
considerable,O
investments,O
made,O
in,O
sales,O
and,O
service,O
training,O
",",O
retail,O
banking,O
systems,O
and,O
technology,O
over,O
the,O
past,O
few,O
years,O
.,O
,O
We,O
are,O
confident,O
that,O
these,O
investments,O
not,O
only,O
led,O
to,O
our,O
substantial,O
deposit,O
growth,O
in,O
2009,O
",",O
but,O
should,O
also,O
support,O
further,O
growth,O
in,O
2010,O
and,O
beyond,O
as,O
consumers,O
and,O
businesses,O
resume,O
borrowing,O
.,O
,O
In,O
retail,O
banking,O
",",O
our,O
branch,O
distribution,O
system,O
played,O
a,O
key,O
role,O
in,O
our,O
deposit,O
growth,O
.,O
,O
For,O
the,O
full,O
year,O
",",O
deposits,O
increased,O
by,O
15,O
percent,O
",",O
including,O
a,O
9,O
percent,O
increase,O
in,O
noninterest-bearing,O
deposits,O
and,O
a,O
16,O
percent,O
increase,O
in,O
interest-be,O
aring,O
deposits,O
.,O
,O
Our,O
efforts,O
to,O
increase,O
the,O
number,O
of,O
product,O
and,O
service,O
relationships,O
we,O
have,O
with,O
each,O
customer,O
also,O
showed,O
signs,O
of,O
progress,O
",",O
with,O
62.85,O
percent,O
of,O
Chemical,I-BUSINESS
Bank,I-BUSINESS
's,O
customer,O
households,O
having,O
multiple,O
service,O
relationships,O
with,O
us,O
at,O
December,O
31,O
",",O
2009,O
",",O
up,O
from,O
61.10,O
percent,O
at,O
year-end,O
2008,O
.,O
,O
We,O
improved,O
our,O
results,O
in,O
mortgage,O
banking,O
.,O
,O
During,O
2009,O
",",O
mortgage,O
banking,O
revenue,O
increased,O
by,O
$,O
2.6,O
million,O
to,O
reach,O
$,O
4.4,O
million,O
",",O
an,O
increase,O
of,O
140,O
percent,O
over,O
2008,O
's,O
levels,O
.,O
,O
In,O
early,O
2009,O
",",O
we,O
initiated,O
a,O
residential,O
real,O
estate,O
loan,O
modification,O
program,O
designed,O
to,O
help,O
homeowners,O
stay,O
in,O
their,O
homes,O
if,O
they,O
were,O
struggling,O
to,O
meet,O
their,O
Chemical,I-BUSINESS
Bank,I-BUSINESS
mortgage,O
obligations,O
.,O
,O
To,O
date,O
",",O
this,O
program,O
has,O
helped,O
over,O
140,O
customers,O
with,O
modifications,O
totaling,O
$,O
17.4,O
million,O
in,O
outstanding,O
loans,O
.,O
,O
These,O
loans,O
were,O
current,O
in,O
accordance,O
with,O
their,O
modified,O
terms,O
at,O
December,O
31,O
",",O
2009,O
.,O
,O
In,O
commercial,O
banking,O
",",O
we,O
continued,O
to,O
expand,O
existing,O
client,O
relationships,O
while,O
forgoing,O
new,O
relationships,O
",",O
and,O
benefited,O
fro,O
m,O
new,O
deposit,O
growth,O
.,O
,O
However,O
",",O
in,O
reaction,O
to,O
the,O
challenging,O
economy,O
",",O
many,O
of,O
our,O
commercial,O
banking,O
customers,O
have,O
become,O
more,O
conservative,O
in,O
their,O
approach,O
to,O
debt,O
",",O
while,O
at,O
the,O
same,O
time,O
our,O
underwriting,O
standards,O
have,O
tightened,O
.,O
,O
As,O
a,O
result,O
",",O
our,O
growth,O
in,O
relationships,O
did,O
not,O
translate,O
into,O
a,O
higher,O
level,O
of,O
commercial,O
loan,O
balances,O
at,O
year-end,O
.,O
,O
In,O
the,O
trust,O
and,O
investment,O
group,O
",",O
a,O
challenging,O
year,O
for,O
the,O
financial,O
markets,O
translated,O
to,O
a,O
challenging,O
year,O
for,O
the,O
business,O
.,O
,O
We,O
were,O
effective,O
in,O
guiding,O
our,O
customers,O
through,O
a,O
difficult,O
market,O
",",O
which,O
saw,O
domestic,O
equity,O
market,O
performance,O
decline,O
precipitously,O
during,O
the,O
first,O
four,O
months,O
of,O
2009,O
prior,O
to,O
rebounding,O
in,O
the,O
fourth,O
quarter,O
to,O
end,O
the,O
year,O
up,O
over,O
26,O
percent,O
",",O
as,O
measured,O
by,O
the,O
S,O
&,O
P,O
500,O
.,O
,O
We,O
ended,O
the,O
year,O
with,O
slightly,O
over,O
$,O
1.9,O
billion,O
in,O
trust,O
assets,O
under,O
management,O
",",O
and,O
an,O
encouraging,O
outlook,O
for,O
2010,O
.,O
,O
During,O
the,O
upcoming,O
year,O
",",O
our,O
focus,O
will,O
be,O
on,O
creating,O
awareness,O
of,O
our,O
capabilities,O
in,O
this,O
arena,O
across,O
our,O
client,O
base,O
and,O
beyo,O
nd,O
.,O
,O
BRANCHING,O
OUT,O
IN,O
WEST,I-LOCATION
MICHIGAN,I-LOCATION
PENDING,O
ACQUISITION,O
OF,O
O.A.K,I-BUSINESS
.,O
,O
FINANCIAL,O
Shortly,O
after,O
the,O
close,O
of,O
the,O
year,O
",",O
we,O
announced,O
the,O
pending,O
acquisition,O
of,O
Grand,I-MISCELLANEOUS
Rapids-based,I-MISCELLANEOUS
O.A.K.,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
(,O
OAK,I-BUSINESS
),O
",",O
whose,O
banking,O
subsidiary,O
is,O
Byron,I-BUSINESS
Bank,I-BUSINESS
.,O
,O
We,O
have,O
been,O
looking,O
for,O
some,O
time,O
to,O
improve,O
our,O
presence,O
in,O
the,O
Grand,I-LOCATION
Rapids,I-LOCATION
region,O
and,O
believe,O
Byron,I-BUSINESS
is,O
a,O
great,O
strategic,O
and,O
cultural,O
fit,O
.,O
,O
The,O
combination,O
of,O
the,O
two,O
organizations,O
will,O
enhance,O
our,O
competitive,O
position,O
",",O
branch,O
distribution,O
system,O
and,O
deposit,O
franchise,O
",",O
and,O
should,O
further,O
facilitate,O
our,O
Company,O
's,O
future,O
growth,O
.,O
,O
We,O
add,O
to,O
our,O
talent,O
pool,O
a,O
great,O
group,O
of,O
banking,O
professionals,O
who,O
share,O
our,O
community,O
banking,O
service,O
culture,O
.,O
,O
Pat,I-PERSON
Gill,I-PERSON
",",O
who,O
is,O
president,O
and,O
chief,O
executive,O
officer,O
of,O
OAK,I-BUSINESS
",",O
will,O
become,O
chairman,O
of,O
Chemical,I-BUSINESS
Bank,I-BUSINESS
's,O
western,O
region,O
and,O
join,O
our,O
executive,O
management,O
team,O
.,O
,O
In,O
addition,O
",",O
we,O
will,O
add,O
two,O
OAK,I-BUSINESS
independent,O
directors,O
to,O
our,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
board,O
of,O
directors,O
.,O
,O
This,O
is,O
an,O
all-stock,O
transaction,O
in,O
which,O
OAK,I-BUSINESS
's,O
shareholders,O
will,O
be,O
ent,O
itled,O
to,O
receive,O
1.306,O
shares,O
of,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
common,O
stock,O
for,O
each,O
share,O
of,O
OAK,I-BUSINESS
common,O
stock,O
",",O
subject,O
to,O
adjustment,O
under,O
certain,O
limited,O
conditions,O
.,O
,O
We,O
expect,O
to,O
incur,O
acquisition-related,O
and,O
integration,O
costs,O
of,O
approximately,O
$,O
6,O
million,O
and,O
a,O
reduction,O
of,O
OAK,I-BUSINESS
's,O
annual,O
operating,O
expenses,O
of,O
approximately,O
$,O
3.8,O
million,O
.,O
,O
Excluding,O
the,O
estimated,O
acquisition-related,O
and,O
integration,O
costs,O
",",O
we,O
expect,O
the,O
transaction,O
to,O
be,O
accretive,O
to,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
's,O
operating,O
results,O
in,O
2010,O
and,O
accretive,O
to,O
earnings,O
in,O
2011,O
.,O
,O
We,O
anticipate,O
that,O
the,O
transaction,O
will,O
close,O
in,O
the,O
second,O
quarter,O
of,O
2010,O
",",O
and,O
we,O
will,O
consolidate,O
Byron,I-BUSINESS
Bank,I-BUSINESS
into,O
Chemical,I-BUSINESS
Bank,I-BUSINESS
and,O
operate,O
under,O
the,O
Chemical,I-BUSINESS
Bank,I-BUSINESS
name,O
subsequent,O
to,O
closing,O
.,O
,O
The,O
Grand,I-LOCATION
Rapids,I-LOCATION
market,O
is,O
one,O
of,O
our,O
state,O
's,O
most,O
robust,O
business,O
and,O
consumer,O
regions,O
.,O
,O
The,O
acquisition,O
will,O
add,O
14,O
branches,O
in,O
Ottawa,I-LOCATION
",",O
Allegan,I-LOCATION
and,O
Kent,I-LOCATION
counties,O
and,O
increase,O
our,O
core,O
deposit,O
base,O
by,O
some,O
$,O
438,O
million,O
.,O
,O
We,O
estimate,O
we,O
will,O
jump,O
from,O
14th,O
to,O
6th,O
in,O
deposit,O
market,O
share,O
in,O
the,O
Grand,I-LOCATION
Rapids,I-LOCATION
region,O
.,O
,O
On,O
a,O
pro-forma,O
basis,O
as,O
of,O
December,O
31,O
",",O
2009,O
",",O
the,O
combined,O
organizations,O
had,O
approximately,O
$,O
5.1,O
billion,O
in,O
assets,O
",",O
$,O
3.6,O
billion,O
in,O
loans,O
and,O
$,O
4.1,O
billion,O
in,O
deposits,O
in,O
143,O
banking,O
offices,O
across,O
31,O
counties,O
in,O
Michigan,I-LOCATION
's,O
Lower,I-LOCATION
Peninsula,I-LOCATION
.,O
,O
Obviously,O
",",O
these,O
are,O
challenging,O
times,O
.,O
,O
Most,O
of,O
the,O
``,O
transactions,O
'',O
we,O
read,O
about,O
in,O
the,O
banking,O
industry,O
these,O
days,O
involve,O
the,O
Federal,I-GOVERNMENT
Deposit,I-GOVERNMENT
Insurance,I-GOVERNMENT
Corporation,I-GOVERNMENT
(,O
the,O
FDIC,I-GOVERNMENT
),O
coming,O
in,O
and,O
facilitating,O
the,O
acquisition,O
of,O
a,O
troubled,O
institution,O
's,O
deposits,O
",",O
locations,O
and,O
",",O
often,O
some,O
assets,O
",",O
such,O
as,O
loans,O
",",O
with,O
a,O
guarantee,O
provision,O
.,O
,O
In,O
this,O
case,O
",",O
we,O
have,O
two,O
of,O
Michigan,I-LOCATION
's,O
stronger,O
",",O
most,O
stable,O
institutions,O
coming,O
together,O
not,O
because,O
of,O
necessity,O
but,O
because,O
of,O
the,O
desire,O
to,O
grow,O
and,O
to,O
better,O
serve,O
our,O
customers,O
",",O
communities,O
",",O
shareholders,O
and,O
employees,O
.,O
,O
We,O
believe,O
that,O
this,O
acquisition,O
not,O
only,O
demonstrates,O
a,O
clear,O
commitment,O
to,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
's,O
long-term,O
",",O
optimistic,O
view,O
of,O
Michigan,I-LOCATION
",",O
but,O
also,O
reinforces,O
our,O
``,O
Made,I-MISCELLANEOUS
in,I-MISCELLANEOUS
Michigan,I-MISCELLANEOUS
'',O
philosophy,O
.,O
,O
We,O
remain,O
attuned,O
to,O
a,O
nd,O
will,O
continue,O
to,O
pursue,O
a,O
wide,O
variety,O
of,O
additional,O
opportunities,O
to,O
leverage,O
our,O
capital,O
strength,O
during,O
this,O
unprecedented,O
period,O
for,O
our,O
industry,O
.,O
,O
ADDITIONAL,O
INFORMATION,O
ABOUT,O
THE,O
CHEMICAL,I-BUSINESS
FINANCIAL,I-BUSINESS
CORPORATION,I-BUSINESS
/,O
O.A.K.,I-BUSINESS
FINANCIAL,I-BUSINESS
CORPORATION,I-BUSINESS
TRANSACTION,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
has,O
filed,O
a,O
registration,O
statement,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
SEC,I-GOVERNMENT
),O
to,O
register,O
the,O
securities,O
that,O
OAK,I-BUSINESS
shareholders,O
will,O
receive,O
if,O
the,O
merger,O
of,O
OAK,I-BUSINESS
into,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
is,O
completed,O
.,O
,O
The,O
registration,O
statement,O
contains,O
a,O
prospectus,O
and,O
proxy,O
statement,O
and,O
other,O
relevant,O
documents,O
concerning,O
the,O
merger,O
.,O
,O
Investors,O
are,O
urged,O
to,O
read,O
the,O
registration,O
statement,O
",",O
the,O
prospectus,O
and,O
proxy,O
statement,O
",",O
and,O
other,O
relevant,O
documents,O
because,O
they,O
contain,O
important,O
information,O
about,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
",",O
OAK,I-BUSINESS
",",O
and,O
the,O
merger,O
.,O
,O
Investors,O
may,O
obtain,O
the,O
documents,O
free,O
of,O
charge,O
at,O
the,O
SEC,I-GOVERNMENT
's,O
website,O
www.sec.gov,O
.,O
,O
The,O
proposed,O
transaction,O
will,O
be,O
submitted,O
to,O
the,O
shareholders,O
of,O
OAK,I-BUSINESS
for,O
their,O
consideration,O
and,O
approval,O
in,O
connection,O
with,O
the,O
proposed,O
transaction,O
",",O
OAK,I-BUSINESS
has,O
filed,O
a,O
proxy,O
statement,O
and,O
other,O
relevant,O
documents,O
to,O
be,O
distributed,O
to,O
the,O
shareholders,O
of,O
OAK,I-BUSINESS
.,O
,O
Investors,O
are,O
urged,O
to,O
read,O
the,O
proxy,O
statement,O
regarding,O
the,O
proposed,O
transaction,O
and,O
any,O
other,O
relevant,O
documents,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
as,O
well,O
as,O
any,O
amendments,O
or,O
supplements,O
to,O
those,O
documents,O
",",O
because,O
they,O
will,O
contain,O
important,O
information,O
.,O
,O
Investors,O
may,O
obtain,O
a,O
free,O
copy,O
of,O
the,O
proxy,O
statement,O
",",O
as,O
well,O
as,O
other,O
filings,O
containing,O
information,O
about,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
and,O
OAK,I-BUSINESS
",",O
free,O
of,O
charge,O
from,O
the,O
SEC,I-GOVERNMENT
's,O
website,O
(,O
www.sec.gov,O
),O
;,O
by,O
contacting,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
",",O
333,O
East,I-LOCATION
Main,I-LOCATION
Street,I-LOCATION
",",O
PO,O
Box,O
569,O
",",O
Midland,I-LOCATION
",",O
MI,I-LOCATION
48640-0569,O
",",O
Attention,O
:,O
Ms.,O
Lori,I-PERSON
A.,I-PERSON
Gwizdala,I-PERSON
",",O
Investor,O
Relations,O
",",O
telephone,O
800-867-9757,O
or,O
by,O
contacting,O
O.A.K.,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
",",O
2445,O
84th,I-LOCATION
Street,I-LOCATION
",",I-LOCATION
SW,I-LOCATION
",",O
Byron,I-LOCATION
Center,I-LOCATION
",",O
MI,I-LOCATION
49315,O
",",O
Attention,O
:,O
Mr.,O
James,I-PERSON
A.,I-PERSON
Luyk,I-PERSON
",",O
Investor,O
Relations,O
",",O
telephone,O
616-599-7419,O
.,O
,O
INVESTORS,O
SHOULD,O
READ,O
THE,O
PROXY,O
STATEMENT,O
AND,O
OTHER,O
DOCUMENTS,O
FILED,O
WITH,O
THE,O
SEC,I-GOVERNMENT
CAREFULLY,O
BEFORE,O
MAKING,O
A,O
DECISION,O
CONCERNING,O
THE,O
TRANSACTION,O
.,O
,O
OAK,I-BUSINESS
and,O
its,O
directors,O
",",O
executive,O
officers,O
",",O
and,O
certain,O
other,O
members,O
of,O
management,O
and,O
employees,O
may,O
be,O
soli,O
citing,O
proxies,O
from,O
OAK,I-BUSINESS
shareholders,O
in,O
favor,O
of,O
the,O
transaction,O
.,O
,O
Information,O
regarding,O
the,O
persons,O
who,O
may,O
",",O
under,O
the,O
rules,O
of,O
the,O
SEC,I-GOVERNMENT
",",O
be,O
considered,O
participants,O
in,O
the,O
solicitation,O
of,O
OAK,I-BUSINESS
shareholders,O
in,O
connection,O
with,O
the,O
proposed,O
transaction,O
is,O
set,O
forth,O
in,O
the,O
proxy,O
statement,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
You,O
can,O
find,O
information,O
about,O
OAK,I-BUSINESS
's,O
executive,O
officers,O
and,O
directors,O
in,O
its,O
most,O
recent,O
proxy,O
statement,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
",",O
which,O
is,O
available,O
at,O
the,O
SEC,I-GOVERNMENT
's,O
website,O
(,O
www.sec.gov,O
),O
.,O
,O
You,O
can,O
also,O
obtain,O
free,O
copies,O
of,O
these,O
documents,O
from,O
Chemical,I-BUSINESS
or,O
OAK,I-BUSINESS
",",O
as,O
appropriate,O
",",O
using,O
the,O
contact,O
information,O
above,O
.,O
,O
HARVESTING,O
THE,O
POTENTIAL,O
IN,O
OUR,O
STATE,O
.,O
,O
THE,O
FINANCIAL,O
SECTOR,O
As,O
alluded,O
to,O
earlier,O
",",O
2009,O
witnessed,O
the,O
continuing,O
of,O
one,O
of,O
the,O
most,O
several,O
global,O
economic,O
environments,O
in,O
decades,O
.,O
,O
Michigan,I-LOCATION
",",O
whose,O
economy,O
has,O
been,O
in,O
recession,O
for,O
six,O
years,O
",",O
continued,O
its,O
roller,O
coaster,O
ride,O
in,O
virtually,O
every,O
economic,O
sector,O
.,O
,O
Two,O
of,O
our,O
most,O
storied,O
corporations,O
",",O
General,I-BUSINESS
Motors,I-BUSINESS
and,O
Chrysler,I-BUSINESS
",",O
filed,O
for,O
bankruptcy,O
.,O
,O
The,O
failures,O
in,O
the,O
financial,O
sector,O
",",O
primarily,O
on,O
Wall,I-LOCATION
Street,I-LOCATION
",",O
heightened,O
the,O
scrutiny,O
of,O
virtually,O
every,O
bank,O
in,O
the,O
world,O
.,O
,O
This,O
scrutiny,O
resulted,O
in,O
``,O
Main,O
Street,O
'',O
commercial,O
banks,O
being,O
put,O
in,O
the,O
same,O
bucket,O
as,O
Wall,I-LOCATION
Street,I-LOCATION
investment,O
banks,O
.,O
,O
Banking,O
regulators,O
closed,O
140,O
banks,O
in,O
2009,O
.,O
,O
This,O
was,O
the,O
highest,O
number,O
of,O
financial,O
institution,O
closures,O
since,O
the,O
end,O
of,O
the,O
savings,O
and,O
loan,O
association,O
crisis,O
in,O
1992,O
",",O
when,O
181,O
FDIC-insured,I-MISCELLANEOUS
depository,O
institutions,O
failed,O
.,O
,O
Of,O
the,O
140,O
institutions,O
closed,O
in,O
2009,O
",",O
four,O
were,O
headquartered,O
in,O
Michigan,I-LOCATION
.,O
,O
Many,O
of,O
our,O
peers,O
",",O
however,O
",",O
continue,O
to,O
operate,O
in,O
a,O
weakened,O
position,O
.,O
,O
Some,O
have,O
received,O
funding,O
from,O
the,O
U.S.,I-GOVERNMENT
Treasury,I-GOVERNMENT
's,O
Troubled,I-MISCELLANEOUS
Asset,I-MISCELLANEOUS
Relief,I-MISCELLANEOUS
Program,I-MISCELLANEOUS
",",O
better,O
known,O
as,O
TARP,I-MISCELLANEOUS
",",O
in,O
order,O
to,O
shore,O
up,O
their,O
capital,O
levels,O
.,O
,O
Because,O
of,O
our,O
strong,O
capital,O
base,O
",",O
Chemical,I-BUSINESS
Financial,I-BUSINESS
chose,O
not,O
to,O
participate,O
in,O
the,O
TARP,I-MISCELLANEOUS
program,O
.,O
,O
Bank,O
failures,O
have,O
increased,O
the,O
cost,O
of,O
doing,O
business,O
for,O
all,O
banks,O
.,O
,O
The,O
FDIC,I-GOVERNMENT
",",O
whose,O
insurance,O
fund,O
was,O
depleted,O
due,O
to,O
the,O
cost,O
of,O
bank,O
failures,O
",",O
increased,O
dramatically,O
the,O
premiums,O
all,O
remaining,O
banks,O
must,O
pay,O
.,O
,O
As,O
mentioned,O
earlier,O
",",O
Chemical,I-BUSINESS
Bank,I-BUSINESS
had,O
total,O
assessed,O
premiums,O
of,O
$,O
7.0,O
million,O
in,O
2009,O
",",O
compared,O
to,O
less,O
than,O
$,O
1,O
million,O
in,O
2008,O
.,O
,O
We,O
and,O
all,O
other,O
banks,O
also,O
prepaid,O
a,O
special,O
three-year,O
premium,O
to,O
the,O
FDIC,I-GOVERNMENT
for,O
coverage,O
from,O
2010,O
to,O
2012,O
",",O
which,O
for,O
us,O
amounted,O
to,O
$,O
19.7,O
million,O
.,O
,O
As,O
often,O
happens,O
in,O
distressed,O
economic,O
times,O
",",O
a,O
wave,O
of,O
regulatory,O
and,O
legislative,O
``,O
solutions,O
'',O
have,O
surfaced,O
.,O
,O
While,O
the,O
total,O
impact,O
of,O
the,O
myriad,O
of,O
regulatory,O
and,O
congressional,O
proposals,O
is,O
unknown,O
",",O
it,O
is,O
apparent,O
that,O
many,O
of,O
these,O
so-called,O
reforms,O
are,O
aimed,O
at,O
perpetrators,O
of,O
poor,O
lending,O
and,O
investment,O
practices,O
.,O
,O
Unfortunately,O
",",O
it,O
will,O
also,O
affect,O
those,O
of,O
us,O
who,O
never,O
participated,O
in,O
such,O
debacles,O
.,O
,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
avoided,O
many,O
problems,O
that,O
have,O
manifested,O
themselves,O
in,O
these,O
reforms,O
by,O
not,O
unduly,O
leveraging,O
our,O
balance,O
sheet,O
",",O
by,O
maintaining,O
high,O
levels,O
of,O
liquidity,O
",",O
by,O
avoiding,O
esoteric,O
financial,O
investments,O
and,O
by,O
not,O
participating,O
in,O
the,O
subprime,O
mortgage,O
market,O
.,O
,O
Hopefully,O
",",O
regulators,O
and,O
representatives,O
in,O
Congress,I-GOVERNMENT
will,O
avoid,O
painting,O
every,O
bank,O
with,O
the,O
same,O
brush,O
",",O
so,O
that,O
our,O
stakeholders,O
are,O
not,O
adversely,O
impacted,O
by,O
over-reactionary,O
decisions,O
.,O
,O
MITTENS,O
FOR,O
MICHIGAN,I-LOCATION
In,O
2009,O
",",O
Chemical,I-BUSINESS
Financial,I-BUSINESS
once,O
again,O
partnered,O
with,O
local,O
United,I-BUSINESS
Way,I-BUSINESS
agencies,O
and,O
other,O
charitable,O
organizations,O
in,O
our,O
communities,O
to,O
provide,O
donations,O
of,O
mittens,O
",",O
gloves,O
",",O
hats,O
and,O
scarves,O
to,O
needy,O
families,O
.,O
,O
Together,O
with,O
our,O
customers,O
and,O
employees,O
",",O
we,O
donated,O
over,O
"10,000",O
items,O
to,O
help,O
warm,O
hands,O
and,O
hearts,O
across,O
our,O
communities,O
.,O
,O
LEADERSHIP,O
AND,O
COMMITMENT,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
has,O
long,O
prided,O
itself,O
on,O
the,O
commitment,O
we,O
have,O
to,O
our,O
state,O
and,O
the,O
communities,O
in,O
which,O
we,O
operate,O
.,O
,O
In,O
August,O
",",O
we,O
unveiled,O
our,O
multimedia,O
MICH,I-MISCELLANEOUS
AGAIN,I-MISCELLANEOUS
promotional,O
campaign,O
",",O
an,O
extension,O
of,O
our,O
``,O
Made,I-MISCELLANEOUS
in,I-MISCELLANEOUS
Michigan,I-MISCELLANEOUS
'',O
campaign,O
introduced,O
in,O
2008,O
",",O
inviting,O
the,O
public,O
to,O
rediscover,O
what,O
makes,O
this,O
state,O
great,O
.,O
,O
We,O
want,O
to,O
help,O
change,O
the,O
way,O
people,O
think,O
and,O
talk,O
about,O
Michigan,I-LOCATION
while,O
improving,O
their,O
economic,O
literacy,O
.,O
,O
Our,O
state,O
's,O
strength,O
is,O
not,O
confined,O
to,O
a,O
single,O
product,O
or,O
industry,O
but,O
lies,O
in,O
the,O
innovation,O
",",O
work,O
ethic,O
",",O
and,O
very,O
fabric,O
of,O
our,O
entrepreneurs,O
and,O
communities,O
.,O
,O
These,O
factors,O
have,O
fueled,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
's,O
growth,O
for,O
over,O
90,O
years,O
.,O
,O
We,O
support,O
our,O
communities,O
because,O
the,O
hard-working,O
",",O
creative,O
people,O
and,O
businesses,O
who,O
reside,O
in,O
them,O
will,O
lead,O
our,O
economic,O
comeback,O
.,O
,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
once,O
again,O
partnered,O
with,O
local,O
United,I-BUSINESS
Way,I-BUSINESS
agencies,O
and,O
other,O
charitable,O
organizations,O
in,O
our,O
Mittens,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Michigan,I-MISCELLANEOUS
campaign,O
.,O
,O
We,O
collected,O
over,O
"10,000",O
donation,O
s,O
from,O
individuals,O
",",O
businesses,O
and,O
employees,O
to,O
help,O
warm,O
the,O
hands,O
and,O
hearts,O
of,O
needy,O
families,O
throughout,O
Michigan,I-LOCATION
.,O
,O
We,O
were,O
very,O
proud,O
to,O
be,O
recognized,O
during,O
the,O
year,O
with,O
top,O
honors,O
for,O
both,O
of,O
these,O
campaigns,O
by,O
the,O
Michigan,I-BUSINESS
Bankers,I-BUSINESS
Association,I-BUSINESS
and,O
the,O
American,I-BUSINESS
Bankers,I-BUSINESS
Association,I-BUSINESS
.,O
,O
In,O
2009,O
",",O
our,O
employees,O
logged,O
thousands,O
of,O
hours,O
in,O
volunteer,O
and,O
community,O
service,O
.,O
,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
contributed,O
approximately,O
$,O
1.5,O
million,O
in,O
charitable,O
donations,O
and,O
sponsorships,O
within,O
these,O
communities,O
where,O
our,O
employees,O
live,O
and,O
work,O
and,O
where,O
we,O
felt,O
we,O
could,O
help,O
make,O
a,O
difference,O
.,O
,O
We,O
will,O
continue,O
our,O
leadership,O
role,O
and,O
deep,O
commitment,O
to,O
being,O
a,O
good,O
corporate,O
citizen,O
and,O
can,O
assure,O
you,O
that,O
our,O
people,O
will,O
continue,O
their,O
devotion,O
to,O
the,O
communities,O
they,O
serve,O
.,O
,O
VOLUNTEERING,O
Employees,O
logged,O
thousands,O
of,O
hours,O
in,O
volunteer,O
and,O
community,O
service,O
.,O
,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
contributed,O
approximately,O
$,O
1.5,O
million,O
in,O
charitable,O
giving,O
and,O
sponsorships,O
within,O
those,O
communities,O
where,O
our,O
employees,O
live,O
and,O
work,O
.,O
,O
2009,O
was,O
a,O
year,O
of,O
renewal,O
and,O
growth,O
in,O
which,O
we,O
not,O
only,O
survived,O
",",O
but,O
capitalized,O
on,O
a,O
challenging,O
environment,O
to,O
progress,O
on,O
a,O
number,O
of,O
long-term,O
strategic,O
goals,O
and,O
objectives,O
.,O
,O
REVITALIZING,O
OUR,O
COMMUNITIES,O
ONE,O
STREET,O
AT,O
A,O
TIME,O
.,O
,O
CORPORATE,O
GOVERNANCE,O
The,O
contribution,O
of,O
our,O
corporate,O
directors,O
and,O
our,O
community,O
bank,O
directors,O
are,O
significant,O
",",O
both,O
in,O
terms,O
of,O
their,O
leadership,O
and,O
counsel,O
and,O
the,O
roles,O
they,O
play,O
in,O
the,O
communities,O
in,O
which,O
they,O
serve,O
.,O
,O
In,O
accordance,O
with,O
our,O
Director,O
Retirement,O
Policy,O
",",O
the,O
following,O
directors,O
retired,O
from,O
service,O
to,O
the,O
Company,O
in,O
April,O
2009,O
:,O
Wayne,I-PERSON
Everett,I-PERSON
from,O
the,O
Cadillac,I-BUSINESS
Community,I-BUSINESS
Board,I-BUSINESS
and,O
Thomas,I-PERSON
VanLaan,I-PERSON
from,O
Grand,I-LOCATION
Rapids,I-LOCATION
.,O
,O
We,O
thank,O
them,O
for,O
their,O
commitment,O
and,O
dedication,O
.,O
,O
LOOKING,O
AHEAD,O
In,O
spite,O
of,O
a,O
difficult,O
year,O
for,O
our,O
industry,O
",",O
Chemical,I-BUSINESS
Financial,I-BUSINESS
continued,O
to,O
make,O
significant,O
progress,O
in,O
virtually,O
all,O
areas,O
of,O
our,O
business,O
.,O
,O
While,O
2009,O
showed,O
some,O
economic,O
improvement,O
on,O
a,O
macro,O
scale,O
",",O
there,O
is,O
still,O
much,O
to,O
do,O
to,O
bring,O
our,O
communities,O
",",O
state,O
and,O
country,O
back,O
to,O
a,O
sustainable,O
level,O
of,O
economic,O
growth,O
.,O
,O
For,O
the,O
banking,O
industry,O
in,O
general,O
and,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
in,O
particular,O
",",O
2010,O
will,O
continue,O
to,O
have,O
its,O
challenges,O
.,O
,O
However,O
",",O
we,O
have,O
seen,O
som,O
e,O
emerging,O
signs,O
of,O
confidence,O
creep,O
back,O
into,O
the,O
financial,O
markets,O
.,O
,O
With,O
our,O
capital,O
strength,O
",",O
strong,O
liquidity,O
and,O
a,O
growing,O
and,O
dedicated,O
customer,O
base,O
",",O
we,O
will,O
continue,O
to,O
invest,O
in,O
our,O
business,O
",",O
our,O
communities,O
and,O
our,O
people,O
.,O
,O
Because,O
of,O
our,O
strength,O
",",O
we,O
anticipate,O
that,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
may,O
have,O
opportunities,O
for,O
growth,O
through,O
direct,O
acquisitions,O
or,O
FDIC-assisted,I-MISCELLANEOUS
transactions,O
.,O
,O
We,O
will,O
also,O
pursue,O
strategies,O
to,O
further,O
enhance,O
our,O
capital,O
strength,O
to,O
position,O
the,O
Company,O
for,O
even,O
greater,O
long-term,O
value,O
creation,O
.,O
,O
We,O
believe,O
our,O
competitive,O
position,O
in,O
the,O
markets,O
we,O
serve,O
is,O
gaining,O
momentum,O
",",O
but,O
ultimately,O
our,O
success,O
will,O
be,O
based,O
on,O
the,O
ability,O
of,O
our,O
"1,537",O
employees,O
to,O
deliver,O
value,O
to,O
our,O
customers,O
day-in,O
and,O
day-out,O
.,O
,O
We,O
collectively,O
believe,O
that,O
we,O
are,O
up,O
to,O
that,O
task,O
.,O
,O
We,O
thank,O
you,O
for,O
your,O
continued,O
confidence,O
and,O
support,O
of,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
.,O
,O
Sincerely,O
",",O
/s/,O
David,I-PERSON
B.,I-PERSON
Ramaker,I-PERSON
David,B-PERSON
B.,I-PERSON
Ramaker,I-PERSON
Chairman,O
",",O
Chief,O
Executive,O
Officer,O
and,O
President,O
/s/,O
Gary,I-PERSON
E.,I-PERSON
Anderson,I-PERSON
Gary,B-PERSON
E.,I-PERSON
Anderson,I-PERSON
Lead,O
Independent,O
Director,O
Despite,O
the,O
economic,O
challenges,O
we,O
faced,O
",",O
we,O
made,O
considerable,O
strides,O
in,O
enhancing,O
our,O
retail,O
market,O
positioning,O
.,O
,O
Our,O
efforts,O
in,O
promoting,O
and,O
building,O
our,O
brand,O
helped,O
leverage,O
the,O
returns,O
from,O
considerable,O
investments,O
made,O
in,O
sales,O
and,O
service,O
training,O
retail,O
banking,O
systems,O
and,O
technology,O
over,O
the,O
past,O
few,O
years,O
.,O
,O
EXECUTIVE,O
OFFICERS,O
:,O
David,I-PERSON
B.,I-PERSON
Ramaker,I-PERSON
Chairman,O
",",O
Chief,O
Executive,O
Officer,O
and,O
President,O
Lori,I-PERSON
A.,I-PERSON
Gwizdala,I-PERSON
Executive,O
Vice,O
President,O
",",O
Chief,O
Financial,O
Officer,O
and,O
Corporate,O
Treasurer,O
Thomas,I-PERSON
W.,I-PERSON
Kohn,I-PERSON
Executive,O
Vice,O
President,O
of,O
Community,O
Banking,O
and,O
Corporate,O
Secretary,O
Kenneth,I-PERSON
W.,I-PERSON
Johnson,I-PERSON
Executive,O
Vice,O
President,O
and,O
Director,O
of,O
Bank,O
Operations,O
John,I-PERSON
E.,I-PERSON
Kessler,I-PERSON
Executive,O
Vice,O
President,O
and,O
Senior,O
Trust,O
Officer,O
James,I-PERSON
E.,I-PERSON
Tomczyk,I-PERSON
Executive,O
Vice,O
President,O
and,O
Senior,O
Credit,O
Officer,O
Dominic,I-PERSON
Monastiere,I-PERSON
Executive,O
Vice,O
President,O
and,O
Chief,O
Risk,O
Management,O
Officer,O
Front,O
Row,O
Left,O
to,O
Right,O
:,O
Lori,I-PERSON
A.,I-PERSON
Gwizdala,I-PERSON
",",O
David,I-PERSON
B.,I-PERSON
Ramaker,I-PERSON
",",O
Thomas,I-PERSON
W.,I-PERSON
Kohn,I-PERSON
Back,O
Row,O
Left,O
to,O
Right,O
:,O
Kenneth,I-PERSON
W.,I-PERSON
Johnson,I-PERSON
",",O
John,I-PERSON
E.,I-PERSON
Kessler,I-PERSON
",",O
James,I-PERSON
E.,I-PERSON
Tomczyk,I-PERSON
",",O
Dominic,I-PERSON
Monastiere,I-PERSON
CORPORATE,O
DIRECTORS,O
:,O
Gary,I-PERSON
E.,I-PERSON
Anderson,I-PERSON
Lead,O
Independent,O
Director,O
",",O
Chemical,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
Retired,O
Chairman,O
",",O
Dow,I-BUSINESS
Corning,I-BUSINESS
Corporation,I-BUSINESS
J.,I-PERSON
Daniel,I-PERSON
Bernson,I-PERSON
Vice,O
Chairman,O
",",O
The,I-BUSINESS
Hanson,I-BUSINESS
Group,I-BUSINESS
Nancy,I-PERSON
Bowman,I-PERSON
Co-Owner,O
",",O
Bowman,I-BUSINESS
&,I-BUSINESS
Rogers,I-BUSINESS
",",O
PC,O
James,I-PERSON
A.,I-PERSON
Currie,I-PERSON
Investor,O
Thomas,I-PERSON
T.,I-PERSON
Huff,I-PERSON
Attorney,O
at,O
Law,O
",",O
Thoma,I-PERSON
s,I-PERSON
T.,I-PERSON
Huff,I-PERSON
",",O
PC,O
Owner,O
",",O
Peregrine,I-BUSINESS
Realty,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
and,O
Peregrine,I-BUSINESS
Restaurant,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
,O
Michael,I-PERSON
T.,I-PERSON
Laethem,I-PERSON
President,O
",",O
Farm,I-BUSINESS
Depot,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
,O
Geoffery,I-PERSON
E.,I-PERSON
Merszei,I-PERSON
Executive,O
Vice,O
President,O
",",O
The,I-BUSINESS
Dow,I-BUSINESS
Chemical,I-BUSINESS
Company,I-BUSINESS
;,O
President,O
",",O
Dow,I-BUSINESS
Europe,I-BUSINESS
",",I-BUSINESS
Middle,I-BUSINESS
East,I-BUSINESS
and,I-BUSINESS
Africa,I-BUSINESS
;,O
and,O
Chairman,O
",",O
Dow,I-BUSINESS
Europe,I-BUSINESS
Terence,I-PERSON
F.,I-PERSON
Moore,I-PERSON
President,O
Emeritus,O
",",O
MidMichigan,I-BUSINESS
Health,I-BUSINESS
Aloysius,I-PERSON
J.,I-PERSON
Oliver,I-PERSON
Retired,O
Chairman,O
",",O
Chief,O
Executive,O
Officer,O
and,O
President,O
",",O
Chemical,O
Financial,O
Corporation,O
David,I-PERSON
B.,I-PERSON
Ramaker,I-PERSON
Chairman,O
",",O
Chief,O
Executive,O
Officer,O
and,O
President,O
",",O
Chemical,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
and,O
Chemical,I-BUSINESS
Bank,I-BUSINESS
Larry,I-PERSON
D.,I-PERSON
Stauffer,I-PERSON
Consultant,O
",",O
Auto,I-BUSINESS
Wares,I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
CORPORATE,O
INFORMATION,O
THE,O
COMPANY,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
is,O
a,O
registered,O
financial,O
holding,O
company,O
headquartered,O
in,O
Midland,I-LOCATION
",",O
Michigan,I-LOCATION
",",O
that,O
operated,O
through,O
one,O
commercial,O
banking,O
subsidiary,O
",",O
Chemical,I-BUSINESS
Bank,I-BUSINESS
",",O
with,O
129,O
banking,O
offices,O
in,O
31,O
counties,O
located,O
generally,O
across,O
the,O
mid-,O
and,O
lower-sections,O
of,O
Michigan,I-LOCATION
's,O
Lower,I-LOCATION
Peninsula,I-LOCATION
",",O
as,O
of,O
December,O
31,O
",",O
2009,O
.,O
,O
The,O
Corporation,O
's,O
principal,O
operations,O
are,O
conducted,O
by,O
Chemical,I-BUSINESS
Bank,I-BUSINESS
",",O
a,O
state,O
chartered,O
bank,O
headquartered,O
in,O
Midland,I-LOCATION
",",O
Michigan,I-LOCATION
",",O
that,O
offers,O
the,O
full,O
range,O
of,O
services,O
normally,O
associated,O
with,O
commercial,O
banking,O
and,O
also,O
provides,O
trust,O
and,O
investment,O
management,O
services,O
.,O
,O
The,O
Corporation,O
is,O
responsible,O
for,O
the,O
effectiveness,O
and,O
efficiency,O
of,O
financial,O
",",O
operational,O
and,O
administrative,O
controls,O
of,O
Chemical,I-BUSINESS
Bank,I-BUSINESS
.,O
,O
COMMON,O
STOCK,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
common,O
stock,O
trades,O
on,O
The,I-BUSINESS
Nasdaq,I-BUSINESS
Stock,I-BUSINESS
Market,I-BUSINESS
under,O
the,O
symbol,O
CHFC,O
.,O
,O
At,O
December,O
31,O
",",O
2009,O
",",O
there,O
were,O
"23,891,321",O
shares,O
outstanding,O
and,O
approximately,O
"4,900",O
shareholders,O
of,O
record,O
.,O
,O
SHAREHOLDER,O
ASSIST,O
ANCE,O
Inquiries,O
related,O
to,O
shareholder,O
records,O
",",O
change,O
of,O
name,O
",",O
address,O
or,O
ownership,O
of,O
stock,O
",",O
and,O
lost,O
or,O
stolen,O
certificates,O
can,O
be,O
directed,O
to,O
the,O
Corporation,O
's,O
transfer,O
agent,O
and,O
registrar,O
:,O
Computershare,I-BUSINESS
Investor,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
250,O
Royall,I-LOCATION
Street,I-LOCATION
",",O
Canton,I-LOCATION
",",O
MA,I-LOCATION
02021,O
.,O
,O
CHEMICAL,O
INVEST,O
DIRECTOR,O
",",O
Dividend,O
Reinvestment,O
Program,O
The,O
Corporation,O
offers,O
a,O
dividend,O
reinvestment,O
program,O
through,O
Computershare,I-BUSINESS
Investor,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
whereby,O
shareholders,O
may,O
reinvest,O
all,O
or,O
some,O
of,O
their,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
dividends,O
in,O
additional,O
shares,O
of,O
the,O
Corporation,O
's,O
stock,O
.,O
,O
Information,O
concerning,O
this,O
optional,O
program,O
is,O
available,O
from,O
the,O
transfer,O
agent,O
shown,O
above,O
or,O
the,O
Corporate,O
Office,O
of,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
",",O
P.O,O
.,O
,O
Box,O
569,O
",",O
Midland,I-LOCATION
",",O
Michigan,I-LOCATION
48640-0569,O
.,O
,O
Telephone,O
:,O
(,O
989,O
),O
839-5350,O
or,O
via,O
the,O
Corporation,O
's,O
website,O
at,O
www.chemicalbankmi.com,O
",",O
``,O
Investor,O
Information,O
.,O
'',O
,O
DIVIDEND,O
DIRECT,O
DEPOSIT,O
Shareholders,O
of,O
the,O
Corporation,O
may,O
have,O
their,O
dividends,O
deposited,O
into,O
their,O
savings,O
or,O
checki,O
ng,O
account,O
at,O
any,O
bank,O
that,O
is,O
a,O
member,O
of,O
the,O
National,I-MISCELLANEOUS
Automated,I-MISCELLANEOUS
Clearing,I-MISCELLANEOUS
House,I-MISCELLANEOUS
system,O
.,O
,O
Information,O
describing,O
this,O
service,O
and,O
an,O
authorization,O
form,O
can,O
be,O
requested,O
from,O
the,O
transfer,O
agent,O
shown,O
above,O
or,O
the,O
Corporate,O
Office,O
of,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
",",O
P.O,O
.,O
,O
Box,O
569,O
",",O
Midland,I-LOCATION
",",O
Michigan,I-LOCATION
48640-0569,O
.,O
,O
Telephone,O
(,O
989,O
),O
839-5350,O
.,O
,O
ANNUAL,O
MEETING,O
The,O
annual,O
meeting,O
of,O
shareholders,O
will,O
be,O
held,O
at,O
the,O
Midland,I-LOCATION
Center,I-LOCATION
for,I-LOCATION
the,I-LOCATION
Arts,I-LOCATION
",",O
1801,O
W.,I-LOCATION
St.,I-LOCATION
",",O
Andrews,I-LOCATION
Drive,I-LOCATION
",",O
Midland,I-LOCATION
",",O
Michigan,I-LOCATION
",",O
on,O
Monday,O
",",O
April,O
19,O
",",O
2010,O
",",O
at,O
2:00,O
p.m.,O
.,O
,O
CORPORATE,O
INFORMATION,O
Analysts,O
",",O
investors,O
",",O
shareholders,O
and,O
others,O
seeking,O
financial,O
or,O
general,O
information,O
about,O
the,O
Corporation,O
are,O
invited,O
to,O
contact,O
David,I-PERSON
B.,I-PERSON
Ramaker,I-PERSON
",",O
Chairman,O
",",O
Chief,O
Executive,O
Officer,O
and,O
President,O
",",O
or,O
Lori,I-PERSON
A.,I-PERSON
Gwizdala,I-PERSON
",",O
Executive,O
Vice,O
President,O
",",O
Chief,O
Financial,O
Officer,O
and,O
Treasurer,O
.,O
,O
Telephone,O
(,O
989,O
),O
839-5350,O
.,O
,O
EQUAL,O
OPPORTUNITY,O
EMPLOYER,O
Chemical,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
and,O
its,O
subsidiary,O
are,O
equal,O
opportunity,O
employers,O
.,O
,O
CHEMICAL,I-BUSINESS
FINANCIAL,I-BUSINESS
CORPORATION,I-BUSINESS
333,O
East,I-LOCATION
Main,I-LOCATION
Street,I-LOCATION
",",O
P.O,O
.,O
,O
Box,O
5,O
69,O
Midland,I-LOCATION
",",O
Michigan,I-LOCATION
48640-0569,O
Telephone,O
:,O
(,O
989,O
),O
839-5350,O
/,O
Fax,O
:,O
(,O
989,O
),O
839-5255,O
www.chemicalbankmi.com,O
",",O
``,O
Investor,O
Information,O
'',O
,O
-DOCSTART-,O
,O
Supplement,O
to,O
the,O
Fidelity,I-BUSINESS
Advisor®,I-BUSINESS
Inflation-Protected,I-BUSINESS
Bond,I-BUSINESS
Fund,I-BUSINESS
Class,O
A,O
",",O
Class,O
T,O
",",O
Class,O
B,O
",",O
and,O
Class,O
C,O
May,O
28,O
",",O
2011,O
Prospectus,O
Effective,O
July,O
15,O
",",O
2011,O
",",O
the,O
following,O
information,O
replaces,O
similar,O
sales,O
charge,O
waiver,O
information,O
for,O
Class,O
A,O
and,O
Class,O
T,O
found,O
in,O
the,O
``,O
Fund,O
Distribution,O
'',O
section,O
beginning,O
on,O
page,O
32,O
.,O
,O
A,O
front-end,O
sales,O
charge,O
will,O
not,O
apply,O
to,O
the,O
following,O
Class,O
A,O
or,O
Class,O
T,O
shares,O
:,O
,O
Purchased,O
for,O
an,O
employee,O
benefit,O
plan,O
other,O
than,O
a,O
plan,O
investing,O
through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
.,O
,O
For,O
this,O
purpose,O
",",O
employee,O
benefit,O
plans,O
generally,O
include,O
401,O
(,O
a,O
),O
",",O
401,O
(,O
k,O
),O
",",O
403,O
(,O
b,O
),O
",",O
and,O
457,O
(,O
b,O
),O
governmental,O
plans,O
",",O
but,O
do,O
not,O
include,O
:,O
IRAs,O
",",O
SIMPLE,O
",",O
SEP,O
",",O
or,O
SARSEP,O
plans,O
;,O
or,O
health,O
savings,O
accounts,O
;,O
,O
Purchased,O
for,O
an,O
insurance,O
company,O
separate,O
account,O
;,O
,O
Purchased,O
for,O
managed,O
account,O
programs,O
that,O
charge,O
an,O
asset-based,O
fee,O
by,O
a,O
broker-dealer,O
",",O
registered,O
investment,O
adviser,O
",",O
insurance,O
company,O
",",O
trust,O
institution,O
or,O
bank,O
trust,O
department,O
;,O
,O
Purchased,O
with,O
the,O
proceeds,O
of,O
a,O
redemption,O
of,O
Fidelity,I-BUSINESS
or,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
shares,O
held,O
in,O
(,O
i,O
),O
an,O
insurance,O
company,O
separate,O
account,O
",",O
or,O
(,O
ii,O
),O
an,O
employee,O
benefit,O
plan,O
(,O
as,O
described,O
in,O
waiver,O
number,O
1,O
above,O
",",O
including,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
),O
",",O
the,O
proceeds,O
of,O
which,O
must,O
be,O
reinvested,O
directly,O
into,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
shares,O
;,O
,O
Purchased,O
with,O
any,O
proceeds,O
of,O
a,O
distribution,O
from,O
a,O
Fidelity,I-BUSINESS
recordkept,O
employee,O
benefit,O
plan,O
(,O
as,O
described,O
in,O
waiver,O
number,O
1,O
above,O
",",O
including,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
),O
that,O
is,O
rolled,O
directly,O
into,O
a,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
IRA,O
;,O
,O
Purchased,O
by,O
a,O
bank,O
trust,O
officer,O
",",O
registered,O
representative,O
",",O
or,O
other,O
employee,O
(,O
or,O
a,O
member,O
of,O
one,O
of,O
their,O
immediate,O
families,O
),O
of,O
intermediaries,O
having,O
agreements,O
with,O
FDC,I-BUSINESS
.,O
,O
A,O
member,O
of,O
the,O
immediate,O
family,O
of,O
a,O
bank,O
trust,O
officer,O
",",O
a,O
registered,O
representative,O
",",O
or,O
other,O
employee,O
of,O
intermediaries,O
having,O
agreements,O
with,O
FDC,I-BUSINESS
",",O
is,O
a,O
spouse,O
of,O
one,O
of,O
those,O
individuals,O
",",O
an,O
account,O
for,O
which,O
one,O
of,O
those,O
individuals,O
is,O
acting,O
as,O
custodian,O
for,O
a,O
minor,O
child,O
",",O
and,O
a,O
trust,O
account,O
that,O
is,O
registered,O
for,O
the,O
sole,O
benefit,O
of,O
a,O
minor,O
child,O
of,O
one,O
of,O
those,O
individuals,O
;,O
,O
Purchased,O
with,O
distributions,O
of,O
income,O
",",O
principal,O
",",O
and,O
capital,O
gains,O
from,O
Fidelity,I-BUSINESS
Defined,I-BUSINESS
Trusts,I-BUSINESS
;,O
,O
Purchased,O
to,O
repay,O
a,O
loan,O
against,O
Class,O
A,O
",",O
Class,O
T,O
",",O
or,O
Class,O
B,O
shares,O
held,O
in,O
the,O
investor,O
's,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
;,O
,O
(,O
Applicable,O
only,O
to,O
Class,O
A,O
purchases,O
after,O
October,O
23,O
",",O
2009,O
),O
Purchased,O
by,O
a,O
shareholder,O
who,O
redeemed,O
Destiny,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
assets,O
and,O
received,O
the,O
proceeds,O
in,O
the,O
form,O
of,O
directly,O
held,O
shares,O
of,O
a,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
after,O
September,O
30,O
",",O
2008,O
.,O
,O
The,O
following,O
information,O
replaces,O
similar,O
CDSC,O
waiver,O
information,O
found,O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Distribution,I-MISCELLANEOUS
'',O
section,O
on,O
page,O
34,O
.,O
,O
The,O
CDSC,O
may,O
be,O
waived,O
on,O
the,O
redemption,O
of,O
shares,O
(,O
applies,O
to,O
Class,O
A,O
",",O
Class,O
T,O
",",O
Class,O
B,O
",",O
and,O
Class,O
C,O
",",O
unless,O
otherwise,O
noted,O
),O
:,O
,O
For,O
disability,O
or,O
death,O
;,O
,O
From,O
employer-sponsored,O
retirement,O
plans,O
(,O
except,O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
and,O
SARSEPs,O
),O
starting,O
the,O
year,O
in,O
which,O
age,O
70,O
1/2,O
is,O
attained,O
;,O
,O
For,O
minimum,O
required,O
distributions,O
from,O
Traditional,O
IRAs,O
",",O
Rollover,O
IRAs,O
",",O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
and,O
SARSEPs,O
(,O
excludes,O
Roth,O
accounts,O
),O
starting,O
the,O
year,O
in,O
which,O
age,O
70,O
1/2,O
is,O
attained,O
;,O
,O
Through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
Systematic,I-MISCELLANEOUS
Withdrawal,I-MISCELLANEOUS
Program,I-MISCELLANEOUS
",",O
if,O
the,O
amount,O
does,O
not,O
exceed,O
12,O
%,O
of,O
the,O
account,O
balance,O
in,O
a,O
rolling,O
12-month,O
period,O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
Held,O
by,O
insurance,O
company,O
separate,O
accounts,O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
From,O
an,O
employee,O
benefit,O
plan,O
(,O
except,O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
SARSEPs,O
",",O
and,O
plans,O
covering,O
self-employed,O
individuals,O
and,O
their,O
employees,O
),O
or,O
403,O
(,O
b,O
),O
programs,O
(,O
except,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
programs,I-MISCELLANEOUS
for,O
which,O
Fidelity,I-BUSINESS
or,O
an,O
affiliate,O
serves,O
as,O
custodian,O
),O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
On,O
which,O
a,O
finder,O
's,O
fee,O
was,O
eligible,O
to,O
be,O
paid,O
to,O
an,O
investment,O
professional,O
at,O
the,O
time,O
of,O
purchase,O
",",O
but,O
was,O
not,O
paid,O
because,O
payment,O
was,O
declined,O
(,O
to,O
determine,O
your,O
eligibility,O
for,O
this,O
CDSC,O
waiver,O
",",O
please,O
ask,O
your,O
investment,O
professional,O
if,O
he,O
or,O
she,O
received,O
a,O
finder,O
's,O
fee,O
at,O
the,O
time,O
of,O
purchase,O
),O
;,O
,O
(,O
Applicable,O
to,O
Class,O
B,O
only,O
),O
From,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
.,O
,O
Supplement,O
to,O
the,O
Fidelity,I-BUSINESS
Advisor®,I-BUSINESS
Inflation-Protected,I-BUSINESS
Bond,I-BUSINESS
Fund,I-BUSINESS
Institutional,O
Class,O
May,O
28,O
",",O
2011,O
Prospectus,O
The,O
following,O
information,O
supplements,O
the,O
similar,O
information,O
found,O
in,O
the,O
``,O
Buying,I-MISCELLANEOUS
Shares,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
16,O
.,O
,O
Institutional,O
Class,O
shares,O
are,O
offered,O
to,O
:,O
,O
Employee,O
benefit,O
plans,O
investing,O
through,O
an,O
intermediary,O
.,O
,O
For,O
this,O
purpose,O
",",O
employee,O
benefit,O
plans,O
generally,O
include,O
profit,O
sharing,O
",",O
401,O
(,O
k,O
),O
",",O
and,O
403,O
(,O
b,O
),O
plans,O
",",O
but,O
do,O
not,O
include,O
:,O
IRAs,O
;,O
SIMPLE,O
",",O
SEP,O
",",O
or,O
SARSEP,O
plans,O
;,O
plans,O
covering,O
self-employed,O
individuals,O
and,O
their,O
employees,O
(,O
formerly,O
Keogh/H.R.,I-MISCELLANEOUS
10,I-MISCELLANEOUS
plans,I-MISCELLANEOUS
),O
;,O
health,O
savings,O
accounts,O
;,O
or,O
plans,O
investing,O
through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
;,O
,O
Insurance,O
company,O
separate,O
accounts,O
;,O
,O
Broker-dealer,O
",",O
registered,O
investment,O
adviser,O
",",O
insurance,O
company,O
",",O
trust,O
institution,O
and,O
bank,O
trust,O
department,O
managed,O
account,O
programs,O
that,O
charge,O
an,O
asset-based,O
fee,O
;,O
,O
Current,O
or,O
former,O
Trustees,O
or,O
officers,O
of,O
a,O
Fidelity,I-BUSINESS
fund,O
or,O
current,O
or,O
retired,O
officers,O
",",O
directors,O
",",O
or,O
regular,O
employees,O
of,O
FMR,I-BUSINESS
LLC,I-BUSINESS
or,O
FIL,I-BUSINESS
Limited,I-BUSINESS
or,O
their,O
direct,O
or,O
indirect,O
subsidiaries,O
(,O
Fidelity,I-BUSINESS
Trustee,O
or,O
employee,O
),O
",",O
spouses,O
of,O
Fidelity,I-BUSINESS
Trustees,O
or,O
employees,O
",",O
Fidelity,I-BUSINESS
Trustees,O
or,O
employees,O
acting,O
as,O
a,O
custodian,O
for,O
a,O
minor,O
child,O
",",O
or,O
persons,O
acting,O
as,O
trustee,O
of,O
a,O
trust,O
for,O
the,O
sole,O
benefit,O
of,O
the,O
minor,O
child,O
of,O
a,O
Fidelity,I-BUSINESS
Trustee,O
or,O
employee,O
;,O
,O
Purchased,O
for,O
any,O
state,O
",",O
county,O
",",O
or,O
city,O
",",O
or,O
any,O
governmental,O
instrumentality,O
",",O
department,O
",",O
authority,O
or,O
agency,O
;,O
,O
Purchased,O
by,O
a,O
charitable,O
organization,O
(,O
as,O
defined,O
for,O
purposes,O
of,O
Section,O
501,O
(,O
c,O
),O
(,O
3,O
),O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
),O
or,O
a,O
charitable,O
remainder,O
trust,O
or,O
life,O
income,O
pool,O
established,O
for,O
the,O
benefit,O
of,O
a,O
charitable,O
organization,O
;,O
,O
Qualified,O
tuition,O
programs,O
for,O
which,O
FMR,I-BUSINESS
or,O
an,O
affiliate,O
serves,O
as,O
investment,O
manager,O
",",O
or,O
mutual,O
funds,O
managed,O
by,O
Fidelity,I-BUSINESS
or,O
other,O
parties,O
;,O
,O
public,O
and,O
private,O
retirement,O
programs,O
and,O
non-U.S.,I-MISCELLANEOUS
insurance,O
companies,O
",",O
if,O
approved,O
by,O
Fidelity,I-BUSINESS
;,O
,O
Destiny,I-MISCELLANEOUS
Planholders,O
who,O
exchange,O
",",O
or,O
have,O
exchanged,O
",",O
from,O
Class,O
O,O
to,O
Institutional,O
Class,O
of,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
funds,I-BUSINESS
.,O
,O
Supplement,O
to,O
the,O
Fidelity,I-BUSINESS
AdvisorSM,I-BUSINESS
Investment,I-BUSINESS
Grade,I-BUSINESS
Bond,I-BUSINESS
Fund,I-BUSINESS
Class,O
A,O
",",O
Class,O
T,O
",",O
Class,O
B,O
",",O
and,O
Class,O
C,O
October,O
30,O
",",O
2010,O
Prospectus,O
The,O
following,O
information,O
replaces,O
similar,O
information,O
found,O
under,O
the,O
heading,O
``,O
Description,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Principal,I-MISCELLANEOUS
Security,I-MISCELLANEOUS
Types,I-MISCELLANEOUS
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Basics,I-MISCELLANEOUS
'',O
section,O
on,O
page,O
10,O
.,O
,O
Forward-settling,O
securities,O
involve,O
a,O
commitment,O
to,O
purchase,O
or,O
sell,O
specific,O
securities,O
when,O
issued,O
",",O
or,O
at,O
a,O
predetermined,O
price,O
or,O
yield,O
.,O
,O
When,O
a,O
fund,O
does,O
not,O
already,O
own,O
or,O
have,O
the,O
right,O
to,O
obtain,O
securities,O
equivalent,O
in,O
kind,O
and,O
amount,O
",",O
a,O
commitment,O
to,O
sell,O
securities,O
is,O
equivalent,O
to,O
a,O
short,O
sale,O
.,O
,O
Payment,O
and,O
delivery,O
take,O
place,O
after,O
the,O
customary,O
settlement,O
period,O
.,O
,O
The,O
following,O
information,O
replaces,O
similar,O
information,O
found,O
under,O
the,O
heading,O
``,O
Principal,O
Investment,O
Risks,O
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Basics,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
10,O
.,O
,O
Derivatives,O
",",O
forward-settling,O
securities,O
",",O
and,O
short,O
sale,O
transactions,O
involve,O
leverage,O
because,O
they,O
can,O
provide,O
investment,O
exposure,O
in,O
an,O
amount,O
exceeding,O
the,O
initial,O
investment,O
.,O
,O
Leverage,O
can,O
magnify,O
investment,O
risks,O
and,O
cause,O
losses,O
to,O
be,O
realized,O
more,O
quickly,O
.,O
,O
A,O
small,O
change,O
in,O
the,O
underlying,O
asset,O
",",O
instrument,O
",",O
or,O
index,O
can,O
lead,O
to,O
a,O
significant,O
loss,O
.,O
,O
Assets,O
segregated,O
to,O
cover,O
these,O
transactions,O
may,O
decline,O
in,O
value,O
and,O
are,O
not,O
available,O
to,O
meet,O
redemptions,O
.,O
,O
Forward-settling,O
securities,O
and,O
short,O
sale,O
transactions,O
also,O
involve,O
the,O
risk,O
that,O
a,O
security,O
will,O
not,O
be,O
issued,O
",",O
delivered,O
",",O
available,O
for,O
purchase,O
",",O
or,O
paid,O
for,O
when,O
anticipated,O
.,O
,O
An,O
increase,O
in,O
the,O
market,O
price,O
of,O
securities,O
sold,O
short,O
will,O
result,O
in,O
a,O
loss,O
.,O
,O
Government,O
legislation,O
or,O
regulation,O
could,O
affect,O
the,O
use,O
of,O
these,O
transactions,O
and,O
could,O
limit,O
the,O
fund,O
's,O
ability,O
to,O
pursue,O
its,O
investment,O
strategies,O
.,O
,O
Effective,O
July,O
15,O
",",O
2011,O
",",O
the,O
following,O
information,O
replaces,O
similar,O
sales,O
charge,O
waiver,O
information,O
for,O
Class,O
A,O
and,O
Class,O
T,O
found,O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Distribution,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
31,O
.,O
,O
A,O
front-end,O
sales,O
charge,O
will,O
not,O
apply,O
to,O
the,O
following,O
Class,O
A,O
or,O
Class,O
T,O
shares,O
:,O
,O
Purchased,O
for,O
an,O
employee,O
benefit,O
plan,O
other,O
than,O
a,O
plan,O
investing,O
through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
.,O
,O
For,O
this,O
purpose,O
",",O
employee,O
benefit,O
plans,O
generally,O
include,O
401,O
(,O
a,O
),O
",",O
401,O
(,O
k,O
),O
",",O
403,O
(,O
b,O
),O
",",O
and,O
457,O
(,O
b,O
),O
governmental,O
plans,O
",",O
but,O
do,O
not,O
include,O
:,O
IRAs,O
",",O
SIMPLE,O
",",O
SEP,O
",",O
or,O
SARSEP,O
plans,O
;,O
or,O
health,O
savings,O
accounts,O
;,O
,O
Purchased,O
for,O
an,O
insurance,O
company,O
separate,O
account,O
;,O
,O
Purchased,O
for,O
managed,O
account,O
programs,O
that,O
charge,O
an,O
asset-based,O
fee,O
by,O
a,O
broker-dealer,O
",",O
registered,O
investment,O
adviser,O
",",O
insurance,O
company,O
",",O
trust,O
institution,O
or,O
bank,O
trust,O
department,O
;,O
,O
Purchased,O
with,O
the,O
proceeds,O
of,O
a,O
redemption,O
of,O
Fidelity,I-BUSINESS
or,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
shares,O
held,O
in,O
(,O
i,O
),O
an,O
insurance,O
company,O
separate,O
account,O
",",O
or,O
(,O
ii,O
),O
an,O
employee,O
benefit,O
plan,O
(,O
as,O
described,O
in,O
waiver,O
number,O
1,O
above,O
",",O
including,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
),O
",",O
the,O
proceeds,O
of,O
which,O
must,O
be,O
reinvested,O
directly,O
into,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
shares,O
;,O
,O
Purchased,O
with,O
any,O
proceeds,O
of,O
a,O
distribution,O
from,O
a,O
Fidelity,I-BUSINESS
recordkept,O
employee,O
benefit,O
plan,O
(,O
as,O
described,O
in,O
waiver,O
number,O
1,O
above,O
",",O
including,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
),O
that,O
is,O
rolled,O
directly,O
into,O
a,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
IRA,O
;,O
,O
Purchased,O
by,O
a,O
bank,O
trust,O
officer,O
",",O
registered,O
representative,O
",",O
or,O
other,O
employee,O
(,O
or,O
a,O
member,O
of,O
one,O
of,O
their,O
immediate,O
families,O
),O
of,O
intermediaries,O
having,O
agreements,O
with,O
FDC,I-BUSINESS
.,O
,O
A,O
member,O
of,O
the,O
immediate,O
family,O
of,O
a,O
bank,O
trust,O
officer,O
",",O
a,O
registered,O
representative,O
",",O
or,O
other,O
employee,O
of,O
intermediaries,O
having,O
agreements,O
with,O
FDC,I-BUSINESS
",",O
is,O
a,O
spouse,O
of,O
one,O
of,O
those,O
individuals,O
",",O
an,O
account,O
for,O
which,O
one,O
of,O
those,O
individuals,O
is,O
acting,O
as,O
custodian,O
for,O
a,O
minor,O
child,O
",",O
and,O
a,O
trust,O
account,O
that,O
is,O
registered,O
for,O
the,O
sole,O
benefit,O
of,O
a,O
minor,O
child,O
of,O
one,O
of,O
those,O
individuals,O
;,O
,O
Purchased,O
with,O
distributions,O
of,O
income,O
",",O
principal,O
",",O
and,O
capital,O
gains,O
from,O
Fidelity,I-BUSINESS
Defined,I-BUSINESS
Trusts,I-BUSINESS
;,O
,O
Purchased,O
to,O
repay,O
a,O
loan,O
against,O
Class,O
A,O
",",O
Class,O
T,O
",",O
or,O
Class,O
B,O
shares,O
held,O
in,O
the,O
investor,O
's,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
;,O
,O
(,O
Applicable,O
only,O
to,O
Class,O
A,O
purchases,O
after,O
October,O
23,O
",",O
2009,O
),O
Purchased,O
by,O
a,O
shareholder,O
who,O
redeemed,O
Destiny,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
assets,O
and,O
received,O
the,O
proceeds,O
in,O
the,O
form,O
of,O
directly,O
held,O
shares,O
of,O
a,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
after,O
September,O
30,O
",",O
2008,O
.,O
,O
The,O
following,O
information,O
replaces,O
similar,O
CDSC,O
waiver,O
information,O
found,O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Distribution,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
33,O
.,O
,O
The,O
CDSC,O
may,O
be,O
waived,O
on,O
the,O
redemption,O
of,O
shares,O
(,O
applies,O
to,O
Class,O
A,O
",",O
Class,O
T,O
",",O
Class,O
B,O
",",O
and,O
Class,O
C,O
",",O
unless,O
otherwise,O
noted,O
),O
:,O
,O
For,O
disability,O
or,O
death,O
;,O
,O
From,O
employer-sponsored,O
retirement,O
plans,O
(,O
except,O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
and,O
SARSEPs,O
),O
starting,O
the,O
year,O
in,O
which,O
age,O
70,O
1/2,O
is,O
attained,O
;,O
,O
For,O
minimum,O
required,O
distributions,O
from,O
Traditional,O
IRAs,O
",",O
Rollover,O
IRAs,O
",",O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
and,O
SARSEPs,O
(,O
excludes,O
Roth,O
accounts,O
),O
starting,O
the,O
year,O
in,O
which,O
age,O
70,O
1/2,O
is,O
attained,O
;,O
,O
Through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
Systematic,I-MISCELLANEOUS
Withdrawal,I-MISCELLANEOUS
Program,I-MISCELLANEOUS
",",O
if,O
the,O
amount,O
does,O
not,O
exceed,O
12,O
%,O
of,O
the,O
account,O
balance,O
in,O
a,O
rolling,O
12-month,O
period,O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
Held,O
by,O
insurance,O
company,O
separate,O
accounts,O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
From,O
an,O
employee,O
benefit,O
plan,O
(,O
except,O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
SARSEPs,O
",",O
and,O
plans,O
covering,O
self-employed,O
individuals,O
and,O
their,O
employees,O
),O
or,O
403,O
(,O
b,O
),O
programs,O
(,O
except,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
programs,I-MISCELLANEOUS
for,O
which,O
Fidelity,I-BUSINESS
or,O
an,O
affiliate,O
serves,O
as,O
custodian,O
),O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
On,O
which,O
a,O
finder,O
's,O
fee,O
was,O
eligible,O
to,O
be,O
paid,O
to,O
an,O
investment,O
professional,O
at,O
the,O
time,O
of,O
purchase,O
",",O
but,O
was,O
not,O
paid,O
because,O
payment,O
was,O
declined,O
(,O
to,O
determine,O
your,O
eligibility,O
for,O
this,O
CDSC,O
waiver,O
",",O
please,O
ask,O
your,O
investment,O
professional,O
if,O
he,O
or,O
she,O
received,O
a,O
finder,O
's,O
fee,O
at,O
the,O
time,O
of,O
purchase,O
),O
;,O
,O
(,O
Applicable,O
to,O
Class,O
B,O
only,O
),O
From,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
.,O
,O
Supplement,O
to,O
the,O
Fidelity,I-BUSINESS
AdvisorSM,I-BUSINESS
Investment,I-BUSINESS
Grade,I-BUSINESS
Bond,I-BUSINESS
Fund,I-BUSINESS
Institutional,O
Class,O
October,O
30,O
",",O
2010,O
Prospectus,O
The,O
following,O
information,O
replaces,O
similar,O
information,O
found,O
under,O
the,O
heading,O
``,O
Description,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Principal,I-MISCELLANEOUS
Security,I-MISCELLANEOUS
Types,I-MISCELLANEOUS
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Basics,I-MISCELLANEOUS
'',O
section,O
on,O
page,O
9,O
.,O
,O
Forward-settling,O
securities,O
involve,O
a,O
commitment,O
to,O
purchase,O
or,O
sell,O
specific,O
securities,O
when,O
issued,O
",",O
or,O
at,O
a,O
predetermined,O
price,O
or,O
yield,O
.,O
,O
When,O
a,O
fund,O
does,O
not,O
already,O
own,O
or,O
have,O
the,O
right,O
to,O
obtain,O
securities,O
equivalent,O
in,O
kind,O
and,O
amount,O
",",O
a,O
commitment,O
to,O
sell,O
securities,O
is,O
equivalent,O
to,O
a,O
short,O
sale,O
.,O
,O
Payment,O
and,O
delivery,O
take,O
place,O
after,O
the,O
customary,O
settlement,O
period,O
.,O
,O
The,O
following,O
information,O
replaces,O
similar,O
information,O
found,O
under,O
the,O
heading,O
``,O
Principal,O
Investment,O
Risks,O
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Basics,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
9,O
.,O
,O
Derivatives,O
",",O
forward-settling,O
securities,O
",",O
and,O
short,O
sale,O
transactions,O
involve,O
leverage,O
because,O
they,O
can,O
provide,O
investment,O
exposure,O
in,O
an,O
amount,O
exceeding,O
the,O
initial,O
investment,O
.,O
,O
Leverage,O
can,O
magnify,O
investment,O
risks,O
and,O
cause,O
losses,O
to,O
be,O
realized,O
more,O
quickly,O
.,O
,O
A,O
small,O
change,O
in,O
the,O
underlying,O
asset,O
",",O
instrument,O
",",O
or,O
index,O
can,O
lead,O
to,O
a,O
significant,O
loss,O
.,O
,O
Assets,O
segregated,O
to,O
cover,O
these,O
transactions,O
may,O
decline,O
in,O
value,O
and,O
are,O
not,O
available,O
to,O
meet,O
redemptions,O
.,O
,O
Forward-settling,O
securities,O
and,O
short,O
sale,O
transactions,O
also,O
involve,O
the,O
risk,O
that,O
a,O
security,O
will,O
not,O
be,O
issued,O
",",O
delivered,O
",",O
available,O
for,O
purchase,O
",",O
or,O
paid,O
for,O
when,O
anticipated,O
.,O
,O
An,O
increase,O
in,O
the,O
market,O
price,O
of,O
securities,O
sold,O
short,O
will,O
result,O
in,O
a,O
loss,O
.,O
,O
Government,O
legislation,O
or,O
regulation,O
could,O
affect,O
the,O
use,O
of,O
these,O
transactions,O
and,O
could,O
limit,O
the,O
fund,O
's,O
ability,O
to,O
pursue,O
its,O
investment,O
strategies,O
.,O
,O
The,O
following,O
information,O
supplements,O
the,O
similar,O
information,O
found,O
in,O
the,O
``,O
Buying,I-MISCELLANEOUS
Shares,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
15,O
.,O
,O
Institutional,O
Class,O
shares,O
are,O
offered,O
to,O
:,O
,O
Employee,O
benefit,O
plans,O
investing,O
through,O
an,O
intermediary,O
.,O
,O
For,O
this,O
purpose,O
",",O
employee,O
benefit,O
plans,O
generally,O
include,O
profit,O
sharing,O
",",O
401,O
(,O
k,O
),O
",",O
and,O
403,O
(,O
b,O
),O
plans,O
",",O
but,O
do,O
not,O
include,O
:,O
IRAs,O
;,O
SIMPLE,O
",",O
SEP,O
",",O
or,O
SARSEP,O
plans,O
;,O
plans,O
covering,O
self-employed,O
individuals,O
and,O
their,O
employees,O
(,O
formerly,O
Keogh/H.R.,I-MISCELLANEOUS
10,I-MISCELLANEOUS
plans,I-MISCELLANEOUS
),O
;,O
health,O
savings,O
accounts,O
;,O
or,O
plans,O
investing,O
through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
;,O
,O
Insurance,O
company,O
separate,O
accounts,O
;,O
,O
Broker-dealer,O
",",O
registered,O
investment,O
adviser,O
",",O
insurance,O
company,O
",",O
trust,O
institution,O
and,O
bank,O
trust,O
department,O
managed,O
account,O
programs,O
that,O
charge,O
an,O
asset-based,O
fee,O
;,O
,O
Current,O
or,O
former,O
Trustees,O
or,O
officers,O
of,O
a,O
Fidelity,I-BUSINESS
fund,O
or,O
current,O
or,O
retired,O
officers,O
",",O
directors,O
",",O
or,O
regular,O
employees,O
of,O
FMR,I-BUSINESS
LLC,I-BUSINESS
or,O
FIL,I-BUSINESS
Limited,I-BUSINESS
or,O
their,O
direct,O
or,O
indirect,O
subsidiaries,O
(,O
Fidelity,I-BUSINESS
Trustee,O
or,O
employee,O
),O
",",O
spouses,O
of,O
Fidelity,I-BUSINESS
Trustees,O
or,O
employees,O
",",O
Fidelity,I-BUSINESS
Trustees,O
or,O
employees,O
acting,O
as,O
a,O
custodian,O
for,O
a,O
minor,O
child,O
",",O
or,O
persons,O
acting,O
as,O
trustee,O
of,O
a,O
trust,O
for,O
the,O
sole,O
benefit,O
of,O
the,O
minor,O
child,O
of,O
a,O
Fidelity,I-BUSINESS
Trustee,O
or,O
employee,O
;,O
,O
Purchased,O
for,O
any,O
state,O
",",O
county,O
",",O
or,O
city,O
",",O
or,O
any,O
governmental,O
instrumentality,O
",",O
department,O
",",O
authority,O
or,O
agency,O
;,O
,O
Purchased,O
by,O
a,O
charitable,O
organization,O
(,O
as,O
defined,O
for,O
purposes,O
of,O
Section,O
501,O
(,O
c,O
),O
(,O
3,O
),O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
),O
or,O
a,O
charitable,O
remainder,O
trust,O
or,O
life,O
income,O
pool,O
established,O
for,O
the,O
benefit,O
of,O
a,O
charitable,O
organization,O
;,O
,O
Qualified,O
tuition,O
programs,O
for,O
which,O
FMR,I-BUSINESS
or,O
an,O
affiliate,O
serves,O
as,O
investment,O
manager,O
",",O
or,O
mutual,O
funds,O
managed,O
by,O
Fidelity,I-BUSINESS
or,O
other,O
parties,O
;,O
,O
public,O
and,O
private,O
retirement,O
programs,O
and,O
non-U.S.,I-MISCELLANEOUS
insurance,O
companies,O
",",O
if,O
approved,O
by,O
Fidelity,I-BUSINESS
;,O
,O
Destiny,I-MISCELLANEOUS
Planholders,O
who,O
exchange,O
",",O
or,O
have,O
exchanged,O
",",O
from,O
Class,O
O,O
to,O
Institutional,O
Class,O
of,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
funds,I-BUSINESS
.,O
,O
Supplement,O
to,O
the,O
Fidelity,I-BUSINESS
Advisor®,I-BUSINESS
Strategic,I-BUSINESS
Real,I-BUSINESS
Return,I-BUSINESS
Fund,I-BUSINESS
Class,O
A,O
",",O
Class,O
T,O
",",O
Class,O
B,O
",",O
and,O
Class,O
C,O
November,O
29,O
",",O
2010,O
Prospectus,O
The,O
following,O
information,O
replaces,O
similar,O
information,O
found,O
under,O
the,O
heading,O
``,O
Description,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Principal,I-MISCELLANEOUS
Security,I-MISCELLANEOUS
Types,I-MISCELLANEOUS
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Basics,I-MISCELLANEOUS
'',O
section,O
on,O
page,O
11,O
.,O
,O
Forward-settling,O
securities,O
involve,O
a,O
commitment,O
to,O
purchase,O
or,O
sell,O
specific,O
securities,O
when,O
issued,O
",",O
or,O
at,O
a,O
predetermined,O
price,O
or,O
yield,O
.,O
,O
When,O
a,O
fund,O
does,O
not,O
already,O
own,O
or,O
have,O
the,O
right,O
to,O
obtain,O
securities,O
equivalent,O
in,O
kind,O
and,O
amount,O
",",O
a,O
commitment,O
to,O
sell,O
securities,O
is,O
equivalent,O
to,O
a,O
short,O
sale,O
.,O
,O
Payment,O
and,O
delivery,O
take,O
place,O
after,O
the,O
customary,O
settlement,O
period,O
.,O
,O
The,O
following,O
information,O
replaces,O
similar,O
information,O
found,O
under,O
the,O
heading,O
``,O
Principal,O
Investment,O
Risks,O
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Basics,I-MISCELLANEOUS
'',O
section,O
on,O
page,O
14,O
.,O
,O
Derivatives,O
",",O
forward-settling,O
securities,O
",",O
and,O
short,O
sale,O
transactions,O
involve,O
leverage,O
because,O
they,O
can,O
provide,O
investment,O
exposure,O
in,O
an,O
amount,O
exceeding,O
the,O
initial,O
investment,O
.,O
,O
Leverage,O
can,O
magnify,O
investment,O
risks,O
and,O
cause,O
losses,O
to,O
be,O
realized,O
more,O
quickly,O
.,O
,O
A,O
small,O
change,O
in,O
the,O
underlying,O
asset,O
",",O
instrument,O
",",O
or,O
index,O
can,O
lead,O
to,O
a,O
significant,O
loss,O
.,O
,O
Assets,O
segregated,O
to,O
cover,O
these,O
transactions,O
may,O
decline,O
in,O
value,O
and,O
are,O
not,O
available,O
to,O
meet,O
redemptions,O
.,O
,O
Forward-settling,O
securities,O
and,O
short,O
sale,O
transactions,O
also,O
involve,O
the,O
risk,O
that,O
a,O
security,O
will,O
not,O
be,O
issued,O
",",O
delivered,O
",",O
available,O
for,O
purchase,O
",",O
or,O
paid,O
for,O
when,O
anticipated,O
.,O
,O
An,O
increase,O
in,O
the,O
market,O
price,O
of,O
securities,O
sold,O
short,O
will,O
result,O
in,O
a,O
loss,O
.,O
,O
Government,O
legislation,O
or,O
regulation,O
could,O
affect,O
the,O
use,O
of,O
these,O
transactions,O
and,O
could,O
limit,O
the,O
fund,O
's,O
ability,O
to,O
pursue,O
its,O
investment,O
strategies,O
.,O
,O
Effective,O
July,O
15,O
",",O
2011,O
",",O
the,O
following,O
information,O
replaces,O
similar,O
sales,O
charge,O
waiver,O
information,O
for,O
Class,O
A,O
and,O
Class,O
T,O
found,O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Distribution,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
36,O
.,O
,O
A,O
front-end,O
sales,O
charge,O
will,O
not,O
apply,O
to,O
the,O
following,O
Class,O
A,O
or,O
Class,O
T,O
shares,O
:,O
,O
Purchased,O
for,O
an,O
employee,O
benefit,O
plan,O
other,O
than,O
a,O
plan,O
investing,O
through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
.,O
,O
For,O
this,O
purpose,O
",",O
employee,O
benefit,O
plans,O
generally,O
include,O
401,O
(,O
a,O
),O
",",O
401,O
(,O
k,O
),O
",",O
403,O
(,O
b,O
),O
",",O
and,O
457,O
(,O
b,O
),O
governmental,O
plans,O
",",O
but,O
do,O
not,O
include,O
:,O
IRAs,O
",",O
SIMPLE,O
",",O
SEP,O
",",O
or,O
SARSEP,O
plans,O
;,O
or,O
health,O
savings,O
accounts,O
;,O
,O
Purchased,O
for,O
an,O
insurance,O
company,O
separate,O
account,O
;,O
,O
Purchased,O
for,O
managed,O
account,O
programs,O
that,O
charge,O
an,O
asset-based,O
fee,O
by,O
a,O
broker-dealer,O
",",O
registered,O
investment,O
adviser,O
",",O
insurance,O
company,O
",",O
trust,O
institution,O
or,O
bank,O
trust,O
department,O
;,O
,O
Purchased,O
with,O
the,O
proceeds,O
of,O
a,O
redemption,O
of,O
Fidelity,I-BUSINESS
or,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
shares,O
held,O
in,O
(,O
i,O
),O
an,O
insurance,O
company,O
separate,O
account,O
",",O
or,O
(,O
ii,O
),O
an,O
employee,O
benefit,O
plan,O
(,O
as,O
described,O
in,O
waiver,O
number,O
1,O
above,O
",",O
including,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
),O
",",O
the,O
proceeds,O
of,O
which,O
must,O
be,O
reinvested,O
directly,O
into,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
shares,O
;,O
,O
Purchased,O
with,O
any,O
proceeds,O
of,O
a,O
distribution,O
from,O
a,O
Fidelity,I-BUSINESS
recordkept,O
employee,O
benefit,O
plan,O
(,O
as,O
described,O
in,O
waiver,O
number,O
1,O
above,O
",",O
including,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
),O
that,O
is,O
rolled,O
directly,O
into,O
a,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
IRA,O
;,O
,O
Purchased,O
by,O
a,O
bank,O
trust,O
officer,O
",",O
registered,O
representative,O
",",O
or,O
other,O
employee,O
(,O
or,O
a,O
member,O
of,O
one,O
of,O
their,O
immediate,O
families,O
),O
of,O
intermediaries,O
having,O
agreements,O
with,O
FDC,I-BUSINESS
.,O
,O
A,O
member,O
of,O
the,O
immediate,O
family,O
of,O
a,O
bank,O
trust,O
officer,O
",",O
a,O
registered,O
representative,O
",",O
or,O
other,O
employee,O
of,O
intermediaries,O
having,O
agreements,O
with,O
FDC,I-BUSINESS
",",O
is,O
a,O
spouse,O
of,O
one,O
of,O
those,O
individuals,O
",",O
an,O
account,O
for,O
which,O
one,O
of,O
those,O
individuals,O
is,O
acting,O
as,O
custodian,O
for,O
a,O
minor,O
child,O
",",O
and,O
a,O
trust,O
account,O
that,O
is,O
registered,O
for,O
the,O
sole,O
benefit,O
of,O
a,O
minor,O
child,O
of,O
one,O
of,O
those,O
individuals,O
;,O
,O
Purchased,O
with,O
distributions,O
of,O
income,O
",",O
principal,O
",",O
and,O
capital,O
gains,O
from,O
Fidelity,I-BUSINESS
Defined,I-BUSINESS
Trusts,I-BUSINESS
;,O
,O
Purchased,O
to,O
repay,O
a,O
loan,O
against,O
Class,O
A,O
",",O
Class,O
T,O
",",O
or,O
Class,O
B,O
shares,O
held,O
in,O
the,O
investor,O
's,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
;,O
,O
(,O
Applicable,O
only,O
to,O
Class,O
A,O
purchases,O
after,O
October,O
23,O
",",O
2009,O
),O
Purchased,O
by,O
a,O
shareholder,O
who,O
redeemed,O
Destiny,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
assets,O
and,O
received,O
the,O
proceeds,O
in,O
the,O
form,O
of,O
directly,O
held,O
shares,O
of,O
a,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
after,O
September,O
30,O
",",O
2008,O
.,O
,O
The,O
following,O
information,O
replaces,O
similar,O
CDSC,O
waiver,O
information,O
found,O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Distribution,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
37,O
.,O
,O
The,O
CDSC,O
may,O
be,O
waived,O
on,O
the,O
redemption,O
of,O
shares,O
(,O
applies,O
to,O
Class,O
A,O
",",O
Class,O
T,O
",",O
Class,O
B,O
",",O
and,O
Class,O
C,O
",",O
unless,O
otherwise,O
noted,O
),O
:,O
,O
For,O
disability,O
or,O
death,O
;,O
,O
From,O
employer-sponsored,O
retirement,O
plans,O
(,O
except,O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
and,O
SARSEPs,O
),O
starting,O
the,O
year,O
in,O
which,O
age,O
70,O
1/2,O
is,O
attained,O
;,O
,O
For,O
minimum,O
required,O
distributions,O
from,O
Traditional,O
IRAs,O
",",O
Rollover,O
IRAs,O
",",O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
and,O
SARSEPs,O
(,O
excludes,O
Roth,O
accounts,O
),O
starting,O
the,O
year,O
in,O
which,O
age,O
70,O
1/2,O
is,O
attained,O
;,O
,O
Through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
Systematic,I-MISCELLANEOUS
Withdrawal,I-MISCELLANEOUS
Program,I-MISCELLANEOUS
",",O
if,O
the,O
amount,O
does,O
not,O
exceed,O
12,O
%,O
of,O
the,O
account,O
balance,O
in,O
a,O
rolling,O
12-month,O
period,O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
Held,O
by,O
insurance,O
company,O
separate,O
accounts,O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
From,O
an,O
employee,O
benefit,O
plan,O
(,O
except,O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
SARSEPs,O
",",O
and,O
plans,O
covering,O
self-employed,O
individuals,O
and,O
their,O
employees,O
),O
or,O
403,O
(,O
b,O
),O
programs,O
(,O
except,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
programs,I-MISCELLANEOUS
for,O
which,O
Fidelity,I-BUSINESS
or,O
an,O
affiliate,O
serves,O
as,O
custodian,O
),O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
On,O
which,O
a,O
finder,O
's,O
fee,O
was,O
eligible,O
to,O
be,O
paid,O
to,O
an,O
investment,O
professional,O
at,O
the,O
time,O
of,O
purchase,O
",",O
but,O
was,O
not,O
paid,O
because,O
payment,O
was,O
declined,O
(,O
to,O
determine,O
your,O
eligibility,O
for,O
this,O
CDSC,O
waiver,O
",",O
please,O
ask,O
your,O
investment,O
professional,O
if,O
he,O
or,O
she,O
received,O
a,O
finder,O
's,O
fee,O
at,O
the,O
time,O
of,O
purchase,O
),O
;,O
,O
(,O
Applicable,O
to,O
Class,O
B,O
only,O
),O
From,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
.,O
,O
Supplement,O
to,O
the,O
Fidelity,I-BUSINESS
Advisor®,I-BUSINESS
Strategic,I-BUSINESS
Real,I-BUSINESS
Return,I-BUSINESS
Fund,I-BUSINESS
Institutional,O
Class,O
November,O
29,O
",",O
2010,O
Prospectus,O
The,O
following,O
information,O
replaces,O
similar,O
information,O
found,O
under,O
the,O
heading,O
``,O
Description,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Principal,I-MISCELLANEOUS
Security,I-MISCELLANEOUS
Types,I-MISCELLANEOUS
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Basics,I-MISCELLANEOUS
'',O
section,O
on,O
page,O
11,O
.,O
,O
Forward-settling,O
securities,O
involve,O
a,O
commitment,O
to,O
purchase,O
or,O
sell,O
specific,O
securities,O
when,O
issued,O
",",O
or,O
at,O
a,O
predetermined,O
price,O
or,O
yield,O
.,O
,O
When,O
a,O
fund,O
does,O
not,O
already,O
own,O
or,O
have,O
the,O
right,O
to,O
obtain,O
securities,O
equivalent,O
in,O
kind,O
and,O
amount,O
",",O
a,O
commitment,O
to,O
sell,O
securities,O
is,O
equivalent,O
to,O
a,O
short,O
sale,O
.,O
,O
Payment,O
and,O
delivery,O
take,O
place,O
after,O
the,O
customary,O
settlement,O
period,O
.,O
,O
The,O
following,O
information,O
replaces,O
similar,O
information,O
found,O
under,O
the,O
heading,O
``,O
Principal,O
Investment,O
Risks,O
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Basics,I-MISCELLANEOUS
'',O
section,O
on,O
page,O
14,O
.,O
,O
Derivatives,O
",",O
forward-settling,O
securities,O
",",O
and,O
short,O
sale,O
transactions,O
involve,O
leverage,O
because,O
they,O
can,O
provide,O
investment,O
exposure,O
in,O
an,O
amount,O
exceeding,O
the,O
initial,O
investment,O
.,O
,O
Leverage,O
can,O
magnify,O
investment,O
risks,O
and,O
cause,O
losses,O
to,O
be,O
realized,O
more,O
quickly,O
.,O
,O
A,O
small,O
change,O
in,O
the,O
underlying,O
asset,O
",",O
instrument,O
",",O
or,O
index,O
can,O
lead,O
to,O
a,O
significant,O
loss,O
.,O
,O
Assets,O
segregated,O
to,O
cover,O
these,O
transactions,O
may,O
decline,O
in,O
value,O
and,O
are,O
not,O
available,O
to,O
meet,O
redemptions,O
.,O
,O
Forward-settling,O
securities,O
and,O
short,O
sale,O
transactions,O
also,O
involve,O
the,O
risk,O
that,O
a,O
security,O
will,O
not,O
be,O
issued,O
",",O
delivered,O
",",O
available,O
for,O
purchase,O
",",O
or,O
paid,O
for,O
when,O
anticipated,O
.,O
,O
An,O
increase,O
in,O
the,O
market,O
price,O
of,O
securities,O
sold,O
short,O
will,O
result,O
in,O
a,O
loss,O
.,O
,O
Government,O
legislation,O
or,O
regulation,O
could,O
affect,O
the,O
use,O
of,O
these,O
transactions,O
and,O
could,O
limit,O
the,O
fund,O
's,O
ability,O
to,O
pursue,O
its,O
investment,O
strategies,O
.,O
,O
The,O
following,O
information,O
supplements,O
the,O
similar,O
information,O
found,O
in,O
the,O
``,O
Buying,I-MISCELLANEOUS
Shares,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
19,O
.,O
,O
Institutional,O
Class,O
shares,O
are,O
offered,O
to,O
:,O
,O
Employee,O
benefit,O
plans,O
investing,O
through,O
an,O
intermediary,O
.,O
,O
For,O
this,O
purpose,O
",",O
employee,O
benefit,O
plans,O
generally,O
include,O
profit,O
sharing,O
",",O
401,O
(,O
k,O
),O
",",O
and,O
403,O
(,O
b,O
),O
plans,O
",",O
but,O
do,O
not,O
include,O
:,O
IRAs,O
;,O
SIMPLE,O
",",O
SEP,O
",",O
or,O
SARSEP,O
plans,O
;,O
plans,O
covering,O
self-employed,O
individuals,O
and,O
their,O
employees,O
(,O
formerly,O
Keogh/H.R.,I-MISCELLANEOUS
10,I-MISCELLANEOUS
plans,I-MISCELLANEOUS
),O
;,O
health,O
savings,O
accounts,O
;,O
or,O
plans,O
investing,O
through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
;,O
,O
Insurance,O
company,O
separate,O
accounts,O
;,O
,O
Broker-dealer,O
",",O
registered,O
investment,O
adviser,O
",",O
insurance,O
company,O
",",O
trust,O
institution,O
and,O
bank,O
trust,O
department,O
managed,O
account,O
programs,O
that,O
charge,O
an,O
asset-based,O
fee,O
;,O
,O
Current,O
or,O
former,O
Trustees,O
or,O
officers,O
of,O
a,O
Fidelity,I-BUSINESS
fund,O
or,O
current,O
or,O
retired,O
officers,O
",",O
directors,O
",",O
or,O
regular,O
employees,O
of,O
FMR,I-BUSINESS
LLC,I-BUSINESS
or,O
FIL,I-BUSINESS
Limited,I-BUSINESS
or,O
their,O
direct,O
or,O
indirect,O
subsidiaries,O
(,O
Fidelity,I-BUSINESS
Trustee,O
or,O
employee,O
),O
",",O
spouses,O
of,O
Fidelity,I-BUSINESS
Trustees,O
or,O
employees,O
",",O
Fidelity,I-BUSINESS
Trustees,O
or,O
employees,O
acting,O
as,O
a,O
custodian,O
for,O
a,O
minor,O
child,O
",",O
or,O
persons,O
acting,O
as,O
trustee,O
of,O
a,O
trust,O
for,O
the,O
sole,O
benefit,O
of,O
the,O
minor,O
child,O
of,O
a,O
Fidelity,I-BUSINESS
Trustee,O
or,O
employee,O
;,O
,O
Purchased,O
for,O
any,O
state,O
",",O
county,O
",",O
or,O
city,O
",",O
or,O
any,O
governmental,O
instrumentality,O
",",O
department,O
",",O
authority,O
or,O
agency,O
;,O
,O
Purchased,O
by,O
a,O
charitable,O
organization,O
(,O
as,O
defined,O
for,O
purposes,O
of,O
Section,O
501,O
(,O
c,O
),O
(,O
3,O
),O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
),O
or,O
a,O
charitable,O
remainder,O
trust,O
or,O
life,O
income,O
pool,O
established,O
for,O
the,O
benefit,O
of,O
a,O
charitable,O
organization,O
;,O
,O
Qualified,O
tuition,O
programs,O
for,O
which,O
FMR,I-BUSINESS
or,O
an,O
affiliate,O
serves,O
as,O
investment,O
manager,O
",",O
or,O
mutual,O
funds,O
managed,O
by,O
Fidelity,I-BUSINESS
or,O
other,O
parties,O
;,O
,O
public,O
and,O
private,O
retirement,O
programs,O
and,O
non-U.S.,I-MISCELLANEOUS
insurance,O
companies,O
",",O
if,O
approved,O
by,O
Fidelity,I-BUSINESS
;,O
,O
Destiny,I-MISCELLANEOUS
Planholders,O
who,O
exchange,O
",",O
or,O
have,O
exchanged,O
",",O
from,O
Class,O
O,O
to,O
Institutional,O
Class,O
of,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
funds,I-BUSINESS
.,O
,O
Supplement,O
to,O
the,O
Fidelity,I-BUSINESS
Advisor®,I-BUSINESS
Strategic,I-BUSINESS
Dividend,I-BUSINESS
&,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
Class,O
A,O
",",O
Class,O
T,O
",",O
Class,O
B,O
",",O
and,O
Class,O
C,O
January,O
29,O
",",O
2011,O
Prospectus,O
Effective,O
July,O
15,O
",",O
2011,O
",",O
the,O
following,O
information,O
replaces,O
similar,O
sales,O
charge,O
waiver,O
information,O
for,O
Class,O
A,O
and,O
Class,O
T,O
found,O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Distribution,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
32,O
.,O
,O
A,O
front-end,O
sales,O
charge,O
will,O
not,O
apply,O
to,O
the,O
following,O
Class,O
A,O
or,O
Class,O
T,O
shares,O
:,O
,O
Purchased,O
for,O
an,O
employee,O
benefit,O
plan,O
other,O
than,O
a,O
plan,O
investing,O
through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
.,O
,O
For,O
this,O
purpose,O
",",O
employee,O
benefit,O
plans,O
generally,O
include,O
401,O
(,O
a,O
),O
",",O
401,O
(,O
k,O
),O
",",O
403,O
(,O
b,O
),O
",",O
and,O
457,O
(,O
b,O
),O
governmental,O
plans,O
",",O
but,O
do,O
not,O
include,O
:,O
IRAs,O
;,O
SIMPLE,O
",",O
SEP,O
",",O
or,O
SARSEP,O
plans,O
;,O
or,O
health,O
savings,O
accounts,O
;,O
,O
Purchased,O
for,O
an,O
insurance,O
company,O
separate,O
account,O
;,O
,O
Purchased,O
for,O
managed,O
account,O
programs,O
that,O
charge,O
an,O
asset-based,O
fee,O
by,O
a,O
broker-dealer,O
",",O
registered,O
investment,O
adviser,O
",",O
insurance,O
company,O
",",O
trust,O
institution,O
or,O
bank,O
trust,O
department,O
;,O
,O
Purchased,O
with,O
the,O
proceeds,O
of,O
a,O
redemption,O
of,O
Fidelity,I-BUSINESS
or,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
shares,O
held,O
in,O
(,O
i,O
),O
an,O
insurance,O
company,O
separate,O
account,O
",",O
or,O
(,O
ii,O
),O
an,O
employee,O
benefit,O
plan,O
(,O
as,O
described,O
in,O
waiver,O
number,O
1,O
above,O
",",O
including,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
),O
",",O
the,O
proceeds,O
of,O
which,O
must,O
be,O
reinvested,O
directly,O
into,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
shares,O
;,O
,O
Purchased,O
with,O
any,O
proceeds,O
of,O
a,O
distribution,O
from,O
a,O
Fidelity,I-BUSINESS
recordkept,O
employee,O
benefit,O
plan,O
(,O
as,O
described,O
in,O
waiver,O
number,O
1,O
above,O
",",O
including,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
),O
that,O
is,O
rolled,O
directly,O
into,O
a,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
IRA,O
;,O
,O
Purchased,O
by,O
a,O
bank,O
trust,O
officer,O
",",O
registered,O
representative,O
",",O
or,O
other,O
employee,O
(,O
or,O
a,O
member,O
of,O
one,O
of,O
their,O
immediate,O
families,O
),O
of,O
intermediaries,O
having,O
agreements,O
with,O
FDC,I-BUSINESS
.,O
,O
A,O
member,O
of,O
the,O
immediate,O
family,O
of,O
a,O
bank,O
trust,O
officer,O
",",O
a,O
registered,O
representative,O
",",O
or,O
other,O
employee,O
of,O
intermediaries,O
having,O
agreements,O
with,O
FDC,I-BUSINESS
",",O
is,O
a,O
spouse,O
of,O
one,O
of,O
those,O
individuals,O
",",O
an,O
account,O
for,O
which,O
one,O
of,O
those,O
individuals,O
is,O
acting,O
as,O
custodian,O
for,O
a,O
minor,O
child,O
",",O
and,O
a,O
trust,O
account,O
that,O
is,O
registered,O
for,O
the,O
sole,O
benefit,O
of,O
a,O
minor,O
child,O
of,O
one,O
of,O
those,O
individuals,O
;,O
,O
Purchased,O
with,O
distributions,O
of,O
income,O
",",O
principal,O
",",O
and,O
capital,O
gains,O
from,O
Fidelity,I-BUSINESS
Defined,I-BUSINESS
Trusts,I-BUSINESS
;,O
,O
Purchased,O
to,O
repay,O
a,O
loan,O
against,O
Class,O
A,O
",",O
Class,O
T,O
",",O
or,O
Class,O
B,O
shares,O
held,O
in,O
the,O
investor,O
's,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
;,O
,O
(,O
Applicable,O
only,O
to,O
Class,O
A,O
purchases,O
after,O
October,O
23,O
",",O
2009,O
),O
Purchased,O
by,O
a,O
shareholder,O
who,O
redeemed,O
Destiny,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
assets,O
and,O
received,O
the,O
proceeds,O
in,O
the,O
form,O
of,O
directly,O
held,O
shares,O
of,O
a,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
after,O
September,O
30,O
",",O
2008,O
.,O
,O
The,O
following,O
information,O
replaces,O
similar,O
CDSC,O
waiver,O
information,O
found,O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Distribution,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
33,O
.,O
,O
The,O
CDSC,O
may,O
be,O
waived,O
on,O
the,O
redemption,O
of,O
shares,O
(,O
applies,O
to,O
Class,O
A,O
",",O
Class,O
T,O
",",O
Class,O
B,O
",",O
and,O
Class,O
C,O
",",O
unless,O
otherwise,O
noted,O
),O
:,O
,O
For,O
disability,O
or,O
death,O
;,O
,O
From,O
employer-sponsored,O
retirement,O
plans,O
(,O
except,O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
and,O
SARSEPs,O
),O
starting,O
the,O
year,O
in,O
which,O
age,O
70,O
1/2,O
is,O
attained,O
;,O
,O
For,O
minimum,O
required,O
distributions,O
from,O
Traditional,O
IRAs,O
",",O
Rollover,O
IRAs,O
",",O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
and,O
SARSEPs,O
(,O
excludes,O
Roth,O
accounts,O
),O
starting,O
the,O
year,O
in,O
which,O
age,O
70,O
1/2,O
is,O
attained,O
;,O
,O
Through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
Systematic,I-MISCELLANEOUS
Withdrawal,I-MISCELLANEOUS
Program,I-MISCELLANEOUS
",",O
if,O
the,O
amount,O
does,O
not,O
exceed,O
12,O
%,O
of,O
the,O
account,O
balance,O
in,O
a,O
rolling,O
12-month,O
period,O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
Held,O
by,O
insurance,O
company,O
separate,O
accounts,O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
From,O
an,O
employee,O
benefit,O
plan,O
(,O
except,O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
SARSEPs,O
and,O
plans,O
covering,O
self-employed,O
individuals,O
and,O
their,O
employees,O
),O
or,O
403,O
(,O
b,O
),O
programs,O
(,O
except,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
programs,I-MISCELLANEOUS
for,O
which,O
Fidelity,I-BUSINESS
or,O
an,O
affiliate,O
serves,O
as,O
custodian,O
),O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
On,O
which,O
a,O
finder,O
's,O
fee,O
was,O
eligible,O
to,O
be,O
paid,O
to,O
an,O
investment,O
professional,O
at,O
the,O
time,O
of,O
purchase,O
",",O
but,O
was,O
not,O
paid,O
because,O
payment,O
was,O
declined,O
(,O
to,O
determine,O
your,O
eligibility,O
for,O
this,O
CDSC,O
waiver,O
",",O
please,O
ask,O
your,O
investment,O
professional,O
if,O
he,O
or,O
she,O
received,O
a,O
finder,O
's,O
fee,O
at,O
the,O
time,O
of,O
purchase,O
),O
;,O
,O
(,O
Applicable,O
to,O
Class,O
B,O
only,O
),O
From,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
.,O
,O
Supplement,O
to,O
the,O
Fidelity,I-BUSINESS
Advisor®,I-BUSINESS
Strategic,I-BUSINESS
Dividend,I-BUSINESS
&,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
Institutional,O
Class,O
January,O
29,O
",",O
2011,O
Prospectus,O
The,O
following,O
information,O
supplements,O
the,O
similar,O
information,O
found,O
in,O
the,O
``,O
Buying,I-MISCELLANEOUS
Shares,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
15,O
.,O
,O
Institutional,O
Class,O
shares,O
are,O
offered,O
to,O
:,O
,O
Employee,O
benefit,O
plans,O
investing,O
through,O
an,O
intermediary,O
.,O
,O
For,O
this,O
purpose,O
",",O
employee,O
benefit,O
plans,O
generally,O
include,O
profit,O
sharing,O
",",O
401,O
(,O
k,O
),O
",",O
and,O
403,O
(,O
b,O
),O
plans,O
",",O
but,O
do,O
not,O
include,O
:,O
IRAs,O
;,O
SIMPLE,O
",",O
SEP,O
",",O
or,O
SARSEP,O
plans,O
;,O
plans,O
covering,O
self-employed,O
individuals,O
and,O
their,O
employees,O
(,O
formerly,O
Keogh/H.R.,I-MISCELLANEOUS
10,I-MISCELLANEOUS
plans,I-MISCELLANEOUS
),O
;,O
health,O
savings,O
accounts,O
;,O
or,O
plans,O
investing,O
through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
;,O
,O
Insurance,O
company,O
separate,O
accounts,O
;,O
,O
Broker-dealer,O
",",O
registered,O
investment,O
adviser,O
",",O
insurance,O
company,O
",",O
trust,O
institution,O
and,O
bank,O
trust,O
department,O
managed,O
account,O
programs,O
that,O
charge,O
an,O
asset-based,O
fee,O
;,O
,O
Current,O
or,O
former,O
Trustees,O
or,O
officers,O
of,O
a,O
Fidelity,I-BUSINESS
fund,O
or,O
current,O
or,O
retired,O
officers,O
",",O
directors,O
",",O
or,O
regular,O
employees,O
of,O
FMR,I-BUSINESS
LLC,I-BUSINESS
or,O
FIL,I-BUSINESS
Limited,I-BUSINESS
or,O
their,O
direct,O
or,O
indirect,O
subsidiaries,O
(,O
Fidelity,I-BUSINESS
Trustee,O
or,O
employee,O
),O
",",O
spouses,O
of,O
Fidelity,I-BUSINESS
Trustees,O
or,O
employees,O
",",O
Fidelity,I-BUSINESS
Trustees,O
or,O
employees,O
acting,O
as,O
a,O
custodian,O
for,O
a,O
minor,O
child,O
",",O
or,O
persons,O
acting,O
as,O
trustee,O
of,O
a,O
trust,O
for,O
the,O
sole,O
benefit,O
of,O
the,O
minor,O
child,O
of,O
a,O
Fidelity,I-BUSINESS
Trustee,O
or,O
employee,O
;,O
,O
Purchased,O
for,O
any,O
state,O
",",O
county,O
",",O
or,O
city,O
",",O
or,O
any,O
governmental,O
instrumentality,O
",",O
department,O
",",O
authority,O
or,O
agency,O
;,O
,O
Purchased,O
by,O
a,O
charitable,O
organization,O
(,O
as,O
defined,O
for,O
purposes,O
of,O
Section,O
501,O
(,O
c,O
),O
(,O
3,O
),O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
),O
or,O
a,O
charitable,O
remainder,O
trust,O
or,O
life,O
income,O
pool,O
established,O
for,O
the,O
benefit,O
of,O
a,O
charitable,O
organization,O
;,O
,O
Qualified,O
tuition,O
programs,O
for,O
which,O
FMR,I-BUSINESS
or,O
an,O
affiliate,O
serves,O
as,O
investment,O
manager,O
",",O
or,O
mutual,O
funds,O
managed,O
by,O
Fidelity,I-BUSINESS
or,O
other,O
parties,O
;,O
,O
public,O
and,O
private,O
retirement,O
programs,O
and,O
non-U.S.,I-MISCELLANEOUS
insurance,O
companies,O
",",O
if,O
approved,O
by,O
Fidelity,I-BUSINESS
;,O
,O
Destiny,I-MISCELLANEOUS
Planholders,O
who,O
exchange,O
",",O
or,O
have,O
exchanged,O
",",O
from,O
Class,O
O,O
to,O
Institutional,O
Class,O
of,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
funds,O
.,O
,O
Supplement,O
to,O
the,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
Dynamic,I-BUSINESS
Strategies®,I-BUSINESS
Fund,I-BUSINESS
Class,O
A,O
",",O
Class,O
T,O
",",O
Class,O
B,O
",",O
and,O
Class,O
C,O
March,O
1,O
",",O
2011,O
Prospectus,O
The,O
Board,O
of,O
Trustees,O
of,O
Fidelity,I-BUSINESS
Dynamic,I-BUSINESS
Strategies®,I-BUSINESS
Fund,I-BUSINESS
has,O
approved,O
certain,O
changes,O
effective,O
June,O
1,O
",",O
2011,O
",",O
including,O
changing,O
the,O
name,O
``,O
Dynamic,O
Strategies,O
'',O
to,O
``,O
Global,O
Strategies,O
'',O
and,O
modifying,O
the,O
fund,O
's,O
investment,O
policies,O
.,O
,O
Effective,O
June,O
1,O
",",O
2011,O
",",O
the,O
following,O
bullet,O
replaces,O
the,O
first,O
bullet,O
under,O
the,O
heading,O
``,O
Principal,O
Investment,O
Strategies,O
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Summary,I-MISCELLANEOUS
'',O
section,O
on,O
page,O
4,O
.,O
,O
Allocating,O
the,O
fund,O
's,O
assets,O
between,O
stocks,O
and,O
bonds,O
by,O
investing,O
in,O
Fidelity,I-BUSINESS
funds,O
(,O
underlying,O
Fidelity,I-BUSINESS
funds,O
),O
and,O
unaffiliated,O
exchanged,O
traded,O
funds,O
(,O
ETFs,O
),O
",",O
or,O
through,O
direct,O
investments,O
.,O
,O
Effective,O
June,O
1,O
",",O
2011,O
",",O
the,O
following,O
bullets,O
supplement,O
the,O
information,O
found,O
under,O
the,O
heading,O
``,O
Principal,O
Investment,O
Strategies,O
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Summary,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
4,O
.,O
,O
Investing,O
in,O
securities,O
issued,O
anywhere,O
in,O
the,O
world,O
.,O
,O
Allocating,O
investments,O
across,O
different,O
countries,O
and,O
regions,O
.,O
,O
Effective,O
June,O
1,O
",",O
2011,O
",",O
the,O
fifth,O
bullet,O
under,O
the,O
heading,O
``,O
Principal,O
Investment,O
Strategies,O
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Summary,I-MISCELLANEOUS
'',O
section,O
on,O
page,O
5,O
has,O
been,O
removed,O
.,O
,O
Effective,O
June,O
1,O
",",O
2011,O
",",O
the,O
following,O
information,O
replaces,O
the,O
information,O
found,O
under,O
the,O
heading,O
``,O
Principal,O
Investment,O
Strategies,O
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Basics,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
10,O
.,O
,O
FMRC,I-BUSINESS
invests,O
the,O
fund,O
's,O
assets,O
in,O
securities,O
issued,O
anywhere,O
in,O
the,O
world,O
",",O
including,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
FMRC,I-BUSINESS
generally,O
allocates,O
the,O
fund,O
's,O
assets,O
between,O
stocks,O
(,O
equity,O
securities,O
of,O
all,O
types,O
",",O
including,O
domestic,O
",",O
international,O
and,O
emerging,O
markets,O
equities,O
and,O
ETFs,O
),O
and,O
bonds,O
(,O
fixed,O
income,O
securities,O
of,O
all,O
types,O
",",O
including,O
domestic,O
",",O
international,O
",",O
emerging,O
markets,O
",",O
high,O
yield,O
",",O
investment,O
grade,O
and,O
inflation,O
protected,O
bonds,O
",",O
floating,O
rate,O
loans,O
",",O
and,O
ETNs,O
),O
.,O
,O
The,O
fund,O
may,O
make,O
investments,O
that,O
do,O
not,O
fall,O
into,O
either,O
asset,O
class,O
.,O
,O
FMRC,I-BUSINESS
may,O
invest,O
a,O
significant,O
portion,O
of,O
the,O
fund,O
's,O
assets,O
in,O
non-traditional,O
assets,O
",",O
including,O
commodity-related,O
investments,O
.,O
,O
The,O
fund,O
gains,O
exposure,O
to,O
each,O
asset,O
class,O
by,O
investing,O
primarily,O
in,O
a,O
combination,O
of,O
Fidelity,I-BUSINESS
funds,O
and,O
unaffiliated,O
ETFs,O
(,O
underlying,O
funds,O
),O
",",O
although,O
it,O
may,O
also,O
invest,O
directly,O
in,O
individual,O
securities,O
.,O
,O
FMRC,I-BUSINESS
may,O
invest,O
up,O
to,O
25,O
%,O
of,O
the,O
fund,O
's,O
assets,O
in,O
a,O
wholly-owned,O
subsidiary,O
of,O
the,O
fund,O
organized,O
under,O
the,O
laws,O
of,O
the,O
Cayman,I-LOCATION
Islands,I-LOCATION
(,O
the,O
Subsidiary,O
),O
.,O
,O
The,O
Subsidiary,O
is,O
managed,O
by,O
FMRC,I-BUSINESS
and,O
has,O
the,O
same,O
investment,O
objective,O
as,O
the,O
fund,O
.,O
,O
FMRC,I-BUSINESS
intends,O
to,O
invest,O
the,O
Subsidiary,O
's,O
assets,O
directly,O
in,O
commodity-related,O
ETFs,O
and,O
ETNs,O
and,O
other,O
commodities,O
and,O
commodity-linked,O
investments,O
.,O
,O
FMR,I-BUSINESS
normally,O
allocates,O
the,O
fund,O
's,O
investments,O
across,O
different,O
countries,O
and,O
regions,O
.,O
,O
FMRC,I-BUSINESS
regularly,O
reviews,O
the,O
fund,O
's,O
allocation,O
and,O
makes,O
changes,O
to,O
favor,O
investments,O
it,O
believes,O
will,O
provide,O
the,O
most,O
favorable,O
outlook,O
for,O
achieving,O
the,O
fund,O
's,O
objective,O
.,O
,O
Depending,O
on,O
its,O
outlook,O
",",O
FMRC,I-BUSINESS
may,O
from,O
time,O
to,O
time,O
allocate,O
substantially,O
all,O
of,O
the,O
fund,O
's,O
assets,O
in,O
either,O
the,O
stock,O
class,O
or,O
bond,O
class,O
.,O
,O
In,O
making,O
allocation,O
decisions,O
",",O
FMRC,I-BUSINESS
will,O
consider,O
multiple,O
data,O
sources,O
",",O
including,O
economic,O
research,O
",",O
quantitative,O
analysis,O
",",O
fundamental,O
research,O
",",O
and,O
technical,O
analysis,O
.,O
,O
FMRC,I-BUSINESS
expects,O
to,O
emphasize,O
specific,O
themes,O
within,O
each,O
asset,O
class,O
.,O
,O
FMRC,I-BUSINESS
may,O
actively,O
adjust,O
the,O
fund,O
's,O
allocation,O
between,O
asset,O
classes,O
at,O
any,O
time,O
to,O
take,O
advantage,O
of,O
short-term,O
market,O
opportunities,O
",",O
and,O
may,O
therefore,O
hold,O
some,O
positions,O
for,O
a,O
relatively,O
short,O
period,O
of,O
time,O
.,O
,O
Other,O
allocation,O
decisions,O
will,O
be,O
strategic,O
and,O
longer-term,O
in,O
nature,O
.,O
,O
FMRC,I-BUSINESS
will,O
attempt,O
to,O
capture,O
short-term,O
market,O
opportunities,O
by,O
actively,O
trading,O
ETFs,O
",",O
but,O
does,O
not,O
intend,O
to,O
actively,O
trade,O
Fidelity,I-BUSINESS
funds,O
.,O
,O
For,O
current,O
information,O
on,O
fund,O
holdings,O
",",O
please,O
visit,O
Fidelity,I-BUSINESS
's,O
website,O
at,O
www.advisor.fidelity.com,O
.,O
,O
For,O
information,O
on,O
the,O
underlying,O
funds,O
",",O
see,O
the,O
underlying,O
funds,O
',O
prospectuses,O
.,O
,O
A,O
copy,O
of,O
any,O
underlying,O
Fidelity,I-BUSINESS
fund's,O
prospectus,O
is,O
available,O
at,O
www.fidelity.com,O
or,O
www.advisor.fidelity.com,O
.,O
,O
For,O
a,O
copy,O
of,O
an,O
ETF,O
's,O
prospectus,O
",",O
visit,O
the,O
web,O
site,O
of,O
the,O
company,O
that,O
manages,O
or,O
sponsors,O
that,O
ETF,O
.,O
,O
The,O
non-traditional,O
assets,O
in,O
which,O
the,O
fund,O
invests,O
may,O
include,O
commodities,O
and,O
commodity-related,O
investments,O
",",O
real,O
estate-related,O
investments,O
",",O
and,O
market,O
neutral,O
strategies,O
",",O
which,O
can,O
be,O
less,O
correlated,O
with,O
the,O
overall,O
stock,O
market,O
than,O
traditional,O
asset,O
classes,O
.,O
,O
In,O
addition,O
to,O
the,O
principal,O
investment,O
strategies,O
discussed,O
above,O
",",O
FMRC,I-BUSINESS
may,O
also,O
lend,O
the,O
fund,O
's,O
securities,O
to,O
broker,O
dealers,O
or,O
other,O
institutions,O
to,O
earn,O
income,O
for,O
the,O
fund,O
.,O
,O
FMRC,I-BUSINESS
may,O
also,O
use,O
various,O
techniques,O
",",O
such,O
as,O
buying,O
and,O
selling,O
futures,O
contracts,O
",",O
as,O
tools,O
in,O
the,O
management,O
of,O
portfolio,O
assets,O
.,O
,O
If,O
FMRC,I-BUSINESS
's,O
strategies,O
do,O
not,O
work,O
as,O
intended,O
",",O
the,O
fund,O
may,O
not,O
achieve,O
its,O
objective,O
.,O
,O
Effective,O
July,O
15,O
",",O
2011,O
",",O
the,O
following,O
information,O
replaces,O
similar,O
sales,O
charge,O
waiver,O
information,O
for,O
Class,O
A,O
and,O
Class,O
T,O
found,O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Distribution,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
35,O
.,O
,O
A,O
front-end,O
sales,O
charge,O
will,O
not,O
apply,O
to,O
the,O
following,O
Class,O
A,O
or,O
Class,O
T,O
shares,O
:,O
,O
Purchased,O
for,O
an,O
employee,O
benefit,O
plan,O
other,O
than,O
a,O
plan,O
investing,O
through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
.,O
,O
For,O
this,O
purpose,O
",",O
employee,O
benefit,O
plans,O
generally,O
include,O
401,O
(,O
a,O
),O
",",O
401,O
(,O
k,O
),O
",",O
403,O
(,O
b,O
),O
",",O
and,O
457,O
(,O
b,O
),O
governmental,O
plans,O
",",O
but,O
do,O
not,O
include,O
:,O
IRAs,O
",",O
SIMPLE,O
",",O
SEP,O
",",O
or,O
SARSEP,O
plans,O
;,O
or,O
health,O
savings,O
accounts,O
;,O
,O
Purchased,O
for,O
an,O
insurance,O
company,O
separate,O
account,O
;,O
,O
Purchased,O
for,O
managed,O
account,O
programs,O
that,O
charge,O
an,O
asset-based,O
fee,O
by,O
a,O
broker-dealer,O
",",O
registered,O
investment,O
adviser,O
",",O
insurance,O
company,O
",",O
trust,O
institution,O
or,O
bank,O
trust,O
department,O
;,O
,O
Purchased,O
with,O
the,O
proceeds,O
of,O
a,O
redemption,O
of,O
Fidelity,I-BUSINESS
or,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
shares,O
held,O
in,O
(,O
i,O
),O
an,O
insurance,O
company,O
separate,O
account,O
",",O
or,O
(,O
ii,O
),O
an,O
employee,O
benefit,O
plan,O
(,O
as,O
described,O
in,O
waiver,O
number,O
1,O
above,O
",",O
including,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
),O
",",O
the,O
proceeds,O
of,O
which,O
must,O
be,O
reinvested,O
directly,O
into,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
shares,O
;,O
,O
Purchased,O
with,O
any,O
proceeds,O
of,O
a,O
distribution,O
from,O
a,O
Fidelity,I-BUSINESS
recordkept,O
employee,O
benefit,O
plan,O
(,O
as,O
described,O
in,O
waiver,O
number,O
1,O
above,O
",",O
including,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
),O
that,O
is,O
rolled,O
directly,O
into,O
a,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
IRA,O
;,O
,O
Purchased,O
by,O
a,O
bank,O
trust,O
officer,O
",",O
registered,O
representative,O
",",O
or,O
other,O
employee,O
(,O
or,O
a,O
member,O
of,O
one,O
of,O
their,O
immediate,O
families,O
),O
of,O
intermediaries,O
having,O
agreements,O
with,O
FDC,I-BUSINESS
.,O
,O
A,O
member,O
of,O
the,O
immediate,O
family,O
of,O
a,O
bank,O
trust,O
officer,O
",",O
a,O
registered,O
representative,O
",",O
or,O
other,O
employee,O
of,O
intermediaries,O
having,O
agreements,O
with,O
FDC,I-BUSINESS
",",O
is,O
a,O
spouse,O
of,O
one,O
of,O
those,O
individuals,O
",",O
an,O
account,O
for,O
which,O
one,O
of,O
those,O
individuals,O
is,O
acting,O
as,O
custodian,O
for,O
a,O
minor,O
child,O
",",O
and,O
a,O
trust,O
account,O
that,O
is,O
registered,O
for,O
the,O
sole,O
benefit,O
of,O
a,O
minor,O
child,O
of,O
one,O
of,O
those,O
individuals,O
;,O
,O
Purchased,O
with,O
distributions,O
of,O
income,O
",",O
principal,O
",",O
and,O
capital,O
gains,O
from,O
Fidelity,I-BUSINESS
Defined,I-BUSINESS
Trusts,I-BUSINESS
;,O
,O
Purchased,O
to,O
repay,O
a,O
loan,O
against,O
Class,O
A,O
",",O
Class,O
T,O
",",O
or,O
Class,O
B,O
shares,O
held,O
in,O
the,O
investor,O
's,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
;,O
,O
(,O
Applicable,O
only,O
to,O
Class,O
A,O
purchases,O
after,O
October,O
23,O
",",O
2009,O
),O
Purchased,O
by,O
a,O
shareholder,O
who,O
redeemed,O
Destiny,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
assets,O
and,O
received,O
the,O
proceeds,O
in,O
the,O
form,O
of,O
directly,O
held,O
shares,O
of,O
a,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
after,O
September,O
30,O
",",O
2008,O
.,O
,O
The,O
following,O
information,O
replaces,O
similar,O
CDSC,O
waiver,O
information,O
found,O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Distribution,I-MISCELLANEOUS
'',O
section,O
on,O
page,O
37,O
.,O
,O
The,O
CDSC,O
may,O
be,O
waived,O
on,O
the,O
redemption,O
of,O
shares,O
(,O
applies,O
to,O
Class,O
A,O
",",O
Class,O
T,O
",",O
Class,O
B,O
",",O
and,O
Class,O
C,O
",",O
unless,O
otherwise,O
noted,O
),O
:,O
,O
For,O
disability,O
or,O
death,O
;,O
,O
From,O
employer-sponsored,O
retirement,O
plans,O
(,O
except,O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
and,O
SARSEPs,O
),O
starting,O
the,O
year,O
in,O
which,O
age,O
70,O
1/2,O
is,O
attained,O
;,O
,O
For,O
minimum,O
required,O
distributions,O
from,O
Traditional,O
IRAs,O
",",O
Rollover,O
IRAs,O
",",O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
and,O
SARSEPs,O
(,O
excludes,O
Roth,O
accounts,O
),O
starting,O
the,O
year,O
in,O
which,O
age,O
70,O
1/2,O
is,O
attained,O
;,O
,O
Through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
Systematic,I-MISCELLANEOUS
Withdrawal,I-MISCELLANEOUS
Program,I-MISCELLANEOUS
",",O
if,O
the,O
amount,O
does,O
not,O
exceed,O
12,O
%,O
of,O
the,O
account,O
balance,O
in,O
a,O
rolling,O
12-month,O
period,O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
Held,O
by,O
insurance,O
company,O
separate,O
accounts,O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
From,O
an,O
employee,O
benefit,O
plan,O
(,O
except,O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
SARSEPs,O
",",O
and,O
plans,O
covering,O
self-employed,O
individuals,O
and,O
their,O
employees,O
),O
or,O
403,O
(,O
b,O
),O
programs,O
(,O
except,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
programs,I-MISCELLANEOUS
for,O
which,O
Fidelity,I-BUSINESS
or,O
an,O
affiliate,O
serves,O
as,O
custodian,O
),O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
On,O
which,O
a,O
finder,O
's,O
fee,O
was,O
eligible,O
to,O
be,O
paid,O
to,O
an,O
investment,O
professional,O
at,O
the,O
time,O
of,O
purchase,O
",",O
but,O
was,O
not,O
paid,O
because,O
payment,O
was,O
declined,O
(,O
to,O
determine,O
your,O
eligibility,O
for,O
this,O
CDSC,O
waiver,O
",",O
please,O
ask,O
your,O
investment,O
professional,O
if,O
he,O
or,O
she,O
received,O
a,O
finder,O
's,O
fee,O
at,O
the,O
time,O
of,O
purchase,O
),O
;,O
,O
(,O
Applicable,O
to,O
Class,O
B,O
only,O
),O
From,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
.,O
,O
Supplement,O
to,O
the,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
Dynamic,I-BUSINESS
Strategies®,I-BUSINESS
Fund,I-BUSINESS
Institutional,O
Class,O
March,O
1,O
",",O
2011,O
Prospectus,O
The,O
Board,O
of,O
Trustees,O
of,O
Fidelity,I-BUSINESS
Dynamic,I-BUSINESS
Strategies®,I-BUSINESS
Fund,I-BUSINESS
has,O
approved,O
certain,O
changes,O
effective,O
June,O
1,O
",",O
2011,O
",",O
including,O
changing,O
the,O
name,O
``,O
Dynamic,O
Strategies,O
'',O
to,O
``,O
Global,O
Strategies,O
'',O
and,O
modifying,O
the,O
fund,O
's,O
investment,O
policies,O
.,O
,O
Effective,O
June,O
1,O
",",O
2011,O
",",O
the,O
following,O
bullet,O
replaces,O
the,O
first,O
bullet,O
under,O
the,O
heading,O
``,O
Principal,O
Investment,O
Strategies,O
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Summary,I-MISCELLANEOUS
'',O
section,O
on,O
page,O
4,O
.,O
,O
Allocating,O
the,O
fund,O
's,O
assets,O
between,O
stocks,O
and,O
bonds,O
by,O
investing,O
in,O
Fidelity,I-BUSINESS
funds,O
(,O
underlying,O
Fidelity,I-BUSINESS
funds,O
),O
and,O
unaffiliated,O
exchanged,O
traded,O
funds,O
(,O
ETFs,O
),O
",",O
or,O
through,O
direct,O
investments,O
.,O
,O
Effective,O
June,O
1,O
",",O
2011,O
",",O
the,O
following,O
bullets,O
supplement,O
the,O
information,O
found,O
under,O
the,O
heading,O
``,O
Principal,O
Investment,O
Strategies,O
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Summary,I-MISCELLANEOUS
'',O
section,O
on,O
page,O
4,O
.,O
,O
Investing,O
in,O
securities,O
issued,O
anywhere,O
in,O
the,O
world,O
.,O
,O
Allocating,O
investments,O
across,O
different,O
countries,O
and,O
regions,O
.,O
,O
Effective,O
June,O
1,O
",",O
2011,O
",",O
the,O
fifth,O
bullet,O
under,O
the,O
heading,O
``,O
Principal,O
Investment,O
Strategies,O
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Summary,I-MISCELLANEOUS
'',O
section,O
on,O
page,O
4,O
has,O
been,O
removed,O
.,O
,O
Effective,O
June,O
1,O
",",O
2011,O
",",O
the,O
following,O
information,O
replaces,O
the,O
information,O
found,O
under,O
the,O
heading,O
``,O
Principal,O
Investment,O
Strategies,O
'',O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Basics,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
9,O
.,O
,O
FMRC,I-BUSINESS
invests,O
the,O
fund,O
's,O
assets,O
in,O
securities,O
issued,O
anywhere,O
in,O
the,O
world,O
",",O
including,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
FMRC,I-BUSINESS
generally,O
allocates,O
the,O
fund,O
's,O
assets,O
between,O
stocks,O
(,O
equity,O
securities,O
of,O
all,O
types,O
",",O
including,O
domestic,O
",",O
international,O
and,O
emerging,O
markets,O
equities,O
and,O
ETFs,O
),O
and,O
bonds,O
(,O
fixed,O
income,O
securities,O
of,O
all,O
types,O
",",O
including,O
domestic,O
",",O
international,O
",",O
emerging,O
markets,O
",",O
high,O
yield,O
",",O
investment,O
grade,O
and,O
inflation,O
protected,O
bonds,O
",",O
floating,O
rate,O
loans,O
",",O
and,O
ETNs,O
),O
.,O
,O
The,O
fund,O
may,O
make,O
investments,O
that,O
do,O
not,O
fall,O
into,O
either,O
asset,O
class,O
.,O
,O
FMRC,I-BUSINESS
may,O
invest,O
a,O
significant,O
portion,O
of,O
the,O
fund,O
's,O
assets,O
in,O
non-traditional,O
assets,O
",",O
including,O
commodity-related,O
investments,O
.,O
,O
The,O
fund,O
gains,O
exposure,O
to,O
each,O
asset,O
class,O
by,O
investing,O
primarily,O
in,O
a,O
combination,O
of,O
Fidelity,I-BUSINESS
funds,O
and,O
unaffiliated,O
ETFs,O
(,O
underlying,O
funds,O
),O
",",O
although,O
it,O
may,O
also,O
invest,O
directly,O
in,O
individual,O
securities,O
.,O
,O
FMRC,I-BUSINESS
may,O
invest,O
up,O
to,O
25,O
%,O
of,O
the,O
fund,O
's,O
assets,O
in,O
a,O
wholly-owned,O
subsidiary,O
of,O
the,O
fund,O
organized,O
under,O
the,O
laws,O
of,O
the,O
Cayman,I-LOCATION
Islands,I-LOCATION
(,O
the,O
Subsidiary,O
),O
.,O
,O
The,O
Subsidiary,O
is,O
managed,O
by,O
FMRC,I-BUSINESS
and,O
has,O
the,O
same,O
investment,O
objective,O
as,O
the,O
fund,O
.,O
,O
FMRC,I-BUSINESS
intends,O
to,O
invest,O
the,O
Subsidiary,O
's,O
assets,O
directly,O
in,O
commodity-related,O
ETFs,O
and,O
ETNs,O
and,O
other,O
commodities,O
and,O
commodity-linked,O
investments,O
.,O
,O
FMR,I-BUSINESS
normally,O
allocates,O
the,O
fund,O
's,O
investments,O
across,O
different,O
countries,O
and,O
regions,O
.,O
,O
FMRC,I-BUSINESS
regularly,O
reviews,O
the,O
fund,O
's,O
allocation,O
and,O
makes,O
changes,O
to,O
favor,O
investments,O
it,O
believes,O
will,O
provide,O
the,O
most,O
favorable,O
outlook,O
for,O
achieving,O
the,O
fund,O
's,O
objective,O
.,O
,O
Depending,O
on,O
its,O
outlook,O
",",O
FMRC,I-BUSINESS
may,O
from,O
time,O
to,O
time,O
allocate,O
substantially,O
all,O
of,O
the,O
fund,O
's,O
assets,O
in,O
either,O
the,O
stock,O
class,O
or,O
bond,O
class,O
.,O
,O
In,O
making,O
allocation,O
decisions,O
",",O
FMRC,I-BUSINESS
will,O
consider,O
multiple,O
data,O
sources,O
",",O
including,O
economic,O
research,O
",",O
quantitative,O
analysis,O
",",O
fundamental,O
research,O
",",O
and,O
technical,O
analysis,O
.,O
,O
FMRC,I-BUSINESS
expects,O
to,O
emphasize,O
specific,O
themes,O
within,O
each,O
asset,O
class,O
.,O
,O
FMRC,I-BUSINESS
may,O
actively,O
adjust,O
the,O
fund,O
's,O
allocation,O
between,O
asset,O
classes,O
at,O
any,O
time,O
to,O
take,O
advantage,O
of,O
short-term,O
market,O
opportunities,O
",",O
and,O
may,O
therefore,O
hold,O
some,O
positions,O
for,O
a,O
relatively,O
short,O
period,O
of,O
time,O
.,O
,O
Other,O
allocation,O
decisions,O
will,O
be,O
strategic,O
and,O
longer-term,O
in,O
nature,O
.,O
,O
FMRC,I-BUSINESS
will,O
attempt,O
to,O
capture,O
short-term,O
market,O
opportunities,O
by,O
actively,O
trading,O
ETFs,O
",",O
but,O
does,O
not,O
intend,O
to,O
actively,O
trade,O
Fidelity,I-BUSINESS
funds,O
.,O
,O
For,O
current,O
information,O
on,O
fund,O
holdings,O
",",O
please,O
visit,O
Fidelity,I-BUSINESS
's,O
website,O
at,O
www.advisor.fidelity.com,O
.,O
,O
For,O
information,O
on,O
the,O
underlying,O
funds,O
",",O
see,O
the,O
underlying,O
funds,O
',O
prospectuses,O
.,O
,O
A,O
copy,O
of,O
any,O
underlying,O
Fidelity,I-BUSINESS
fund,O
's,O
prospectus,O
is,O
available,O
at,O
www.fidelity.com,O
or,O
www.advisor.fidelity.com,O
.,O
,O
For,O
a,O
copy,O
of,O
an,O
ETF,O
's,O
prospectus,O
",",O
visit,O
the,O
web,O
site,O
of,O
the,O
company,O
that,O
manages,O
or,O
sponsors,O
that,O
ETF,O
.,O
,O
The,O
non-traditional,O
assets,O
in,O
which,O
the,O
fund,O
invests,O
may,O
include,O
commodities,O
and,O
commodity-related,O
investments,O
",",O
real,O
estate-related,O
investments,O
",",O
and,O
market,O
neutral,O
strategies,O
",",O
which,O
can,O
be,O
less,O
correlated,O
with,O
the,O
overall,O
stock,O
market,O
than,O
traditional,O
asset,O
classes,O
.,O
,O
In,O
addition,O
to,O
the,O
principal,O
investment,O
strategies,O
discussed,O
above,O
",",O
FMRC,I-BUSINESS
may,O
also,O
lend,O
the,O
fund,O
's,O
securities,O
to,O
broker,O
dealers,O
or,O
other,O
institutions,O
to,O
earn,O
income,O
for,O
the,O
fund,O
.,O
,O
FMRC,I-BUSINESS
may,O
also,O
use,O
various,O
techniques,O
",",O
such,O
as,O
buying,O
and,O
selling,O
futures,O
contracts,O
",",O
as,O
tools,O
in,O
the,O
management,O
of,O
portfolio,O
assets,O
.,O
,O
If,O
FMRC,I-BUSINESS
's,O
strategies,O
do,O
not,O
work,O
as,O
intended,O
",",O
the,O
fund,O
may,O
not,O
achieve,O
its,O
objective,O
.,O
,O
The,O
following,O
information,O
supplements,O
the,O
similar,O
information,O
found,O
in,O
the,O
``,O
Buying,I-MISCELLANEOUS
Shares,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
20,O
.,O
,O
Institutional,O
Class,O
shares,O
are,O
offered,O
to,O
:,O
,O
Employee,O
benefit,O
plans,O
investing,O
through,O
an,O
intermediary,O
.,O
,O
For,O
this,O
purpose,O
",",O
employee,O
benefit,O
plans,O
generally,O
include,O
profit,O
sharing,O
",",O
401,O
(,O
k,O
),O
",",O
and,O
403,O
(,O
b,O
),O
plans,O
",",O
but,O
do,O
not,O
include,O
:,O
IRAs,O
;,O
SIMPLE,O
",",O
SEP,O
",",O
or,O
SARSEP,O
plans,O
;,O
plans,O
covering,O
self-employed,O
individuals,O
and,O
their,O
employees,O
(,O
formerly,O
Keogh/H.R.,I-MISCELLANEOUS
10,I-MISCELLANEOUS
plans,I-MISCELLANEOUS
),O
;,O
health,O
savings,O
accounts,O
;,O
or,O
plans,O
investing,O
through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor®,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
;,O
,O
Insurance,O
company,O
separate,O
accounts,O
;,O
,O
Broker-dealer,O
",",O
registered,O
investment,O
adviser,O
",",O
insurance,O
company,O
",",O
trust,O
institution,O
and,O
bank,O
trust,O
department,O
managed,O
account,O
programs,O
that,O
charge,O
an,O
asset-based,O
fee,O
;,O
,O
Current,O
or,O
former,O
Trustees,O
or,O
officers,O
of,O
a,O
Fidelity,I-BUSINESS
fund,O
or,O
current,O
or,O
retired,O
officers,O
",",O
directors,O
",",O
or,O
regular,O
employees,O
of,O
FMR,I-BUSINESS
LLC,I-BUSINESS
or,O
FIL,I-BUSINESS
Limited,I-BUSINESS
or,O
their,O
direct,O
or,O
indirect,O
subsidiaries,O
(,O
Fidelity,I-BUSINESS
Trustee,O
or,O
employee,O
),O
",",O
spouses,O
of,O
Fidelity,I-BUSINESS
Trustees,O
or,O
employees,O
",",O
Fidelity,I-BUSINESS
Trustees,O
or,O
employees,O
acting,O
as,O
a,O
custodian,O
for,O
a,O
minor,O
child,O
",",O
or,O
persons,O
acting,O
as,O
trustee,O
of,O
a,O
trust,O
for,O
the,O
sole,O
benefit,O
of,O
the,O
minor,O
child,O
of,O
a,O
Fidelity,I-BUSINESS
Trustee,O
or,O
employee,O
;,O
,O
Purchased,O
for,O
any,O
state,O
",",O
county,O
",",O
or,O
city,O
",",O
or,O
any,O
governmental,O
instrumentality,O
",",O
department,O
",",O
authority,O
or,O
agency,O
;,O
,O
Purchased,O
by,O
a,O
charitable,O
organization,O
(,O
as,O
defined,O
for,O
purposes,O
of,O
Section,O
501,O
(,O
c,O
),O
(,O
3,O
),O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
),O
or,O
a,O
charitable,O
remainder,O
trust,O
or,O
life,O
income,O
pool,O
established,O
for,O
the,O
benefit,O
of,O
a,O
charitable,O
organization,O
;,O
,O
Qualified,O
tuition,O
programs,O
for,O
which,O
FMR,O
or,O
an,O
affiliate,O
serves,O
as,O
investment,O
manager,O
",",O
or,O
mutual,O
funds,O
managed,O
by,O
Fidelity,I-BUSINESS
or,O
other,O
parties,O
;,O
,O
public,O
and,O
private,O
retirement,O
programs,O
and,O
non-U.S.,I-MISCELLANEOUS
insurance,O
companies,O
",",O
if,O
approved,O
by,O
Fidelity,I-BUSINESS
;,O
,O
Destiny,I-MISCELLANEOUS
Planholders,O
who,O
exchange,O
",",O
or,O
have,O
exchanged,O
",",O
from,O
Class,O
O,O
to,O
Institutional,O
Class,O
of,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
funds,I-BUSINESS
.,O
,O
Supplement,O
to,O
the,O
Fidelity,I-BUSINESS
AdvisorSM,I-BUSINESS
Corporate,I-BUSINESS
Bond,I-BUSINESS
Fund,I-BUSINESS
Class,O
A,O
",",O
Class,O
T,O
",",O
and,O
Class,O
C,O
October,O
30,O
",",O
2010,O
Prospectus,O
Effective,O
July,O
15,O
",",O
2011,O
",",O
the,O
following,O
information,O
replaces,O
similar,O
sales,O
charge,O
waiver,O
information,O
for,O
Class,O
A,O
and,O
Class,O
T,O
found,O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Distribution,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
29,O
.,O
,O
A,O
front-end,O
sales,O
charge,O
will,O
not,O
apply,O
to,O
the,O
following,O
Class,O
A,O
or,O
Class,O
T,O
shares,O
:,O
,O
Purchased,O
for,O
an,O
employee,O
benefit,O
plan,O
other,O
than,O
a,O
plan,O
investing,O
through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
.,O
,O
For,O
this,O
purpose,O
",",O
employee,O
benefit,O
plans,O
generally,O
include,O
401,O
(,O
a,O
),O
",",O
401,O
(,O
k,O
),O
",",O
403,O
(,O
b,O
),O
",",O
and,O
457,O
(,O
b,O
),O
governmental,O
plans,O
",",O
but,O
do,O
not,O
include,O
:,O
IRAs,O
;,O
SIMPLE,O
",",O
SEP,O
",",O
or,O
SARSEP,O
plans,O
;,O
or,O
health,O
savings,O
accounts,O
;,O
,O
Purchased,O
for,O
an,O
insurance,O
company,O
separate,O
account,O
;,O
,O
Purchased,O
for,O
managed,O
account,O
programs,O
that,O
charge,O
an,O
asset-based,O
fee,O
by,O
a,O
broker-dealer,O
",",O
registered,O
investment,O
adviser,O
",",O
insurance,O
company,O
",",O
trust,O
institution,O
or,O
bank,O
trust,O
department,O
;,O
,O
Purchased,O
with,O
the,O
proceeds,O
of,O
a,O
redemption,O
of,O
Fidelity,I-BUSINESS
or,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
shares,O
held,O
in,O
(,O
i,O
),O
an,O
insurance,O
company,O
separate,O
account,O
",",O
or,O
(,O
ii,O
),O
an,O
employee,O
benefit,O
plan,O
(,O
as,O
described,O
in,O
waiver,O
number,O
1,O
above,O
",",O
including,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
),O
",",O
the,O
proceeds,O
of,O
which,O
must,O
be,O
reinvested,O
directly,O
into,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
shares,O
;,O
,O
Purchased,O
with,O
any,O
proceeds,O
of,O
a,O
distribution,O
from,O
a,O
Fidelity,I-BUSINESS
recordkept,O
employee,O
benefit,O
plan,O
(,O
as,O
described,O
in,O
waiver,O
number,O
1,O
above,O
",",O
including,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
),O
that,O
is,O
rolled,O
directly,O
into,O
a,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
IRA,O
;,O
,O
Purchased,O
by,O
a,O
bank,O
trust,O
officer,O
",",O
registered,O
representative,O
",",O
or,O
other,O
employee,O
(,O
or,O
a,O
member,O
of,O
one,O
of,O
their,O
immediate,O
families,O
),O
of,O
intermediaries,O
having,O
agreements,O
with,O
FDC,I-BUSINESS
.,O
,O
A,O
member,O
of,O
the,O
immediate,O
family,O
of,O
a,O
bank,O
trust,O
officer,O
",",O
a,O
registered,O
representative,O
",",O
or,O
other,O
employee,O
of,O
intermediaries,O
having,O
agreements,O
with,O
FDC,I-BUSINESS
",",O
is,O
a,O
spouse,O
of,O
one,O
of,O
those,O
individuals,O
",",O
an,O
account,O
for,O
which,O
one,O
of,O
those,O
individuals,O
is,O
acting,O
as,O
custodian,O
for,O
a,O
minor,O
child,O
",",O
and,O
a,O
trust,O
account,O
that,O
is,O
registered,O
for,O
the,O
sole,O
benefit,O
of,O
a,O
minor,O
child,O
of,O
one,O
of,O
those,O
individuals,O
;,O
,O
Purchased,O
with,O
distributions,O
of,O
income,O
",",O
principal,O
",",O
and,O
capital,O
gains,O
from,O
Fidelity,I-BUSINESS
Defined,I-BUSINESS
Trusts,I-BUSINESS
;,O
,O
Purchased,O
to,O
repay,O
a,O
loan,O
against,O
Class,O
A,O
",",O
Class,O
T,O
or,O
Class,O
B,O
shares,O
held,O
in,O
the,O
investor,O
's,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
;,O
,O
(,O
Applicable,O
only,O
to,O
Class,O
A,O
purchases,O
after,O
October,O
23,O
",",O
2009,O
),O
Purchased,O
by,O
a,O
shareholder,O
who,O
redeemed,O
Destiny,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
assets,O
and,O
received,O
the,O
proceeds,O
in,O
the,O
form,O
of,O
directly,O
held,O
shares,O
of,O
a,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
after,O
September,O
30,O
",",O
2008,O
.,O
,O
The,O
following,O
information,O
replaces,O
similar,O
CDSC,O
waiver,O
information,O
found,O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Distribution,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
30,O
.,O
,O
The,O
CDSC,O
may,O
be,O
waived,O
on,O
the,O
redemption,O
of,O
shares,O
(,O
applies,O
to,O
Class,O
A,O
",",O
Class,O
T,O
",",O
and,O
Class,O
C,O
",",O
unless,O
otherwise,O
noted,O
),O
:,O
,O
For,O
disability,O
or,O
death,O
;,O
,O
From,O
employer-sponsored,O
retirement,O
plans,O
(,O
except,O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
and,O
SARSEPs,O
),O
starting,O
the,O
year,O
in,O
which,O
age,O
70,O
1/2,O
is,O
attained,O
;,O
,O
For,O
minimum,O
required,O
distributions,O
from,O
Traditional,O
IRAs,O
",",O
Rollover,O
IRAs,O
",",O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
and,O
SARSEPs,O
(,O
excludes,O
Roth,O
accounts,O
),O
starting,O
the,O
year,O
in,O
which,O
age,O
70,O
1/2,O
is,O
attained,O
;,O
,O
Through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
Systematic,I-MISCELLANEOUS
Withdrawal,I-MISCELLANEOUS
Program,I-MISCELLANEOUS
",",O
if,O
the,O
amount,O
does,O
not,O
exceed,O
12,O
%,O
of,O
the,O
account,O
balance,O
in,O
a,O
rolling,O
12-month,O
period,O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
Held,O
by,O
insurance,O
company,O
separate,O
accounts,O
;,O
,O
(,O
Applicable,O
to,O
Class,O
A,O
and,O
Class,O
T,O
only,O
),O
From,O
an,O
employee,O
benefit,O
plan,O
(,O
except,O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
SARSEPs,O
and,O
plans,O
covering,O
self-employed,O
individuals,O
and,O
their,O
employees,O
),O
or,O
403,O
(,O
b,O
),O
programs,O
(,O
except,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
programs,I-MISCELLANEOUS
for,O
which,O
Fidelity,I-BUSINESS
or,O
an,O
affiliate,O
serves,O
as,O
custodian,O
),O
;,O
,O
(,O
Applicable,O
to,O
Class,O
C,O
only,O
),O
On,O
which,O
investment,O
professionals,O
did,O
not,O
receive,O
a,O
concession,O
at,O
the,O
time,O
of,O
purchase,O
.,O
,O
Supplement,O
to,O
the,O
Fidelity,I-BUSINESS
AdvisorSM,I-BUSINESS
Corporate,I-BUSINESS
Bond,I-BUSINESS
Fund,I-BUSINESS
Institutional,O
Class,O
October,O
30,O
",",O
2010,O
Prospectus,O
The,O
following,O
information,O
supplements,O
the,O
similar,O
information,O
found,O
in,O
the,O
``,O
Buying,I-MISCELLANEOUS
Shares,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
14,O
.,O
,O
Institutional,O
Class,O
shares,O
are,O
offered,O
to,O
:,O
,O
Employee,O
benefit,O
plans,O
investing,O
through,O
an,O
intermediary,O
.,O
,O
For,O
this,O
purpose,O
",",O
employee,O
benefit,O
plans,O
generally,O
include,O
profit,O
sharing,O
",",O
401,O
(,O
k,O
),O
",",O
and,O
403,O
(,O
b,O
),O
plans,O
",",O
but,O
do,O
not,O
include,O
:,O
IRAs,O
;,O
SIMPLE,O
",",O
SEP,O
",",O
or,O
SARSEP,O
plans,O
;,O
plans,O
covering,O
self-employed,O
individuals,O
and,O
their,O
employees,O
(,O
formerly,O
Keogh/H.R.,I-MISCELLANEOUS
10,I-MISCELLANEOUS
plans,I-MISCELLANEOUS
),O
;,O
health,O
savings,O
accounts,O
;,O
or,O
plans,O
investing,O
through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
;,O
,O
Insurance,O
company,O
separate,O
accounts,O
;,O
,O
Broker-dealer,O
",",O
registered,O
investment,O
adviser,O
",",O
insurance,O
company,O
",",O
trust,O
institution,O
and,O
bank,O
trust,O
department,O
managed,O
account,O
programs,O
that,O
charge,O
an,O
asset-based,O
fee,O
;,O
,O
Current,O
or,O
former,O
Trustees,O
or,O
officers,O
of,O
a,O
Fidelity,I-BUSINESS
fund,O
or,O
current,O
or,O
retired,O
officers,O
",",O
directors,O
",",O
or,O
regular,O
employees,O
of,O
FMR,I-BUSINESS
LLC,I-BUSINESS
or,O
FIL,I-BUSINESS
Limited,I-BUSINESS
or,O
their,O
direct,O
or,O
indirect,O
subsidiaries,O
(,O
Fidelity,I-BUSINESS
Trustee,O
or,O
employee,O
),O
",",O
spouses,O
of,O
Fidelity,I-BUSINESS
Trustees,O
or,O
employees,O
",",O
Fidelity,I-BUSINESS
Trustees,O
or,O
employees,O
acting,O
as,O
a,O
custodian,O
for,O
a,O
minor,O
child,O
",",O
or,O
persons,O
acting,O
as,O
trustee,O
of,O
a,O
trust,O
for,O
the,O
sole,O
benefit,O
of,O
the,O
minor,O
child,O
of,O
a,O
Fidelity,I-BUSINESS
Trustee,O
or,O
employee,O
;,O
,O
Purchased,O
for,O
any,O
state,O
",",O
county,O
",",O
or,O
city,O
",",O
or,O
any,O
governmental,O
instrumentality,O
",",O
department,O
",",O
authority,O
or,O
agency,O
;,O
,O
Purchased,O
by,O
a,O
charitable,O
organization,O
(,O
as,O
defined,O
for,O
purposes,O
of,O
Section,O
501,O
(,O
c,O
),O
(,O
3,O
),O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
),O
or,O
a,O
charitable,O
remainder,O
trust,O
or,O
life,O
income,O
pool,O
established,O
for,O
the,O
benefit,O
of,O
a,O
charitable,O
organization,O
;,O
,O
Qualified,O
tuition,O
programs,O
for,O
which,O
FMR,I-BUSINESS
or,O
an,O
affiliate,O
serves,O
as,O
investment,O
manager,O
",",O
or,O
mutual,O
funds,O
managed,O
by,O
Fidelity,O
or,O
other,O
parties,O
;,O
,O
public,O
and,O
private,O
retirement,O
programs,O
and,O
non-U.S.,I-MISCELLANEOUS
insurance,O
companies,O
",",O
if,O
approved,O
by,O
Fidelity,I-BUSINESS
;,O
,O
Destiny,I-MISCELLANEOUS
Planholders,O
who,O
exchange,O
",",O
or,O
have,O
exchanged,O
",",O
from,O
Class,O
O,O
to,O
Institutional,O
Class,O
of,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
funds,I-BUSINESS
.,O
,O
Supplement,O
to,O
the,O
Fidelity®,I-BUSINESS
Defined,I-BUSINESS
Maturity,I-BUSINESS
Funds,I-BUSINESS
Class,O
A,O
May,O
16,O
",",O
2011,O
As,O
Revised,O
May,O
19,O
",",O
2011,O
Prospectus,O
Effective,O
July,O
15,O
",",O
2011,O
",",O
the,O
following,O
information,O
replaces,O
similar,O
sales,O
charge,O
waiver,O
information,O
for,O
Class,O
A,O
found,O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Distribution,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
45,O
.,O
,O
A,O
front-end,O
sales,O
charge,O
will,O
not,O
apply,O
to,O
the,O
following,O
Class,O
A,O
shares,O
:,O
,O
Purchased,O
for,O
an,O
employee,O
benefit,O
plan,O
other,O
than,O
a,O
plan,O
investing,O
through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
.,O
,O
For,O
this,O
purpose,O
",",O
employee,O
benefit,O
plans,O
generally,O
include,O
401,O
(,O
a,O
),O
",",O
401,O
(,O
k,O
),O
",",O
403,O
(,O
b,O
),O
",",O
and,O
457,O
(,O
b,O
),O
governmental,O
plans,O
",",O
but,O
do,O
not,O
include,O
:,O
IRAs,O
",",O
SIMPLE,O
",",O
SEP,O
",",O
or,O
SARSEP,O
plans,O
;,O
or,O
health,O
savings,O
accounts,O
;,O
,O
Purchased,O
for,O
an,O
insurance,O
company,O
separate,O
account,O
;,O
,O
Purchased,O
for,O
managed,O
account,O
programs,O
that,O
charge,O
an,O
asset-based,O
fee,O
by,O
a,O
broker-dealer,O
",",O
registered,O
investment,O
adviser,O
",",O
insurance,O
company,O
",",O
trust,O
institution,O
or,O
bank,O
trust,O
department,O
;,O
,O
Purchased,O
with,O
the,O
proceeds,O
of,O
a,O
redemption,O
of,O
Fidelity,I-BUSINESS
or,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
shares,O
held,O
in,O
(,O
i,O
),O
an,O
insurance,O
company,O
separate,O
account,O
",",O
or,O
(,O
ii,O
),O
an,O
employee,O
benefit,O
plan,O
(,O
as,O
described,O
in,O
waiver,O
number,O
1,O
above,O
",",O
including,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
),O
",",O
the,O
proceeds,O
of,O
which,O
must,O
be,O
reinvested,O
directly,O
into,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
shares,O
;,O
,O
Purchased,O
with,O
any,O
proceeds,O
of,O
a,O
distribution,O
from,O
a,O
Fidelity,I-BUSINESS
recordkept,O
employee,O
benefit,O
plan,O
(,O
as,O
described,O
in,O
waiver,O
number,O
1,O
above,O
",",O
including,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
),O
that,O
is,O
rolled,O
directly,O
into,O
a,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
IRA,O
;,O
,O
Purchased,O
by,O
a,O
bank,O
trust,O
officer,O
",",O
registered,O
representative,O
",",O
or,O
other,O
employee,O
(,O
or,O
a,O
member,O
of,O
one,O
of,O
their,O
immediate,O
families,O
),O
of,O
intermediaries,O
having,O
agreements,O
with,O
FDC,I-BUSINESS
.,O
,O
A,O
member,O
of,O
the,O
immediate,O
family,O
of,O
a,O
bank,O
trust,O
officer,O
",",O
a,O
registered,O
representative,O
",",O
or,O
other,O
employee,O
of,O
intermediaries,O
having,O
agreements,O
with,O
FDC,I-BUSINESS
",",O
is,O
a,O
spouse,O
of,O
one,O
of,O
those,O
individuals,O
",",O
an,O
account,O
for,O
which,O
one,O
of,O
those,O
individuals,O
is,O
acting,O
as,O
custodian,O
for,O
a,O
minor,O
child,O
",",O
and,O
a,O
trust,O
account,O
that,O
is,O
registered,O
for,O
the,O
sole,O
benefit,O
of,O
a,O
minor,O
child,O
of,O
one,O
of,O
those,O
individuals,O
;,O
,O
Purchased,O
with,O
distributions,O
of,O
income,O
",",O
principal,O
",",O
and,O
capital,O
gains,O
from,O
Fidelity,I-BUSINESS
Defined,I-BUSINESS
Trusts,I-BUSINESS
;,O
,O
Purchased,O
to,O
repay,O
a,O
loan,O
against,O
Class,O
A,O
shares,O
held,O
in,O
the,O
investor,O
's,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
;,O
,O
(,O
Applicable,O
only,O
to,O
Class,O
A,O
purchases,O
after,O
October,O
23,O
",",O
2009,O
),O
Purchased,O
by,O
a,O
shareholder,O
who,O
redeemed,O
Destiny,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
assets,O
and,O
received,O
the,O
proceeds,O
in,O
the,O
form,O
of,O
directly,O
held,O
shares,O
of,O
a,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
fund,I-BUSINESS
after,O
September,O
30,O
",",O
2008,O
.,O
,O
The,O
following,O
information,O
replaces,O
similar,O
CDSC,O
waiver,O
information,O
found,O
in,O
the,O
``,O
Fund,I-MISCELLANEOUS
Distribution,I-MISCELLANEOUS
'',O
section,O
on,O
page,O
47,O
.,O
,O
The,O
CDSC,O
may,O
be,O
waived,O
on,O
the,O
redemption,O
of,O
shares,O
(,O
applies,O
to,O
Class,O
A,O
",",O
unless,O
otherwise,O
noted,O
),O
:,O
,O
For,O
disability,O
or,O
death,O
;,O
,O
From,O
employer-sponsored,O
retirement,O
plans,O
(,O
except,O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
and,O
SARSEPs,O
),O
starting,O
the,O
year,O
in,O
which,O
age,O
70,O
1/2,O
is,O
attained,O
;,O
,O
For,O
minimum,O
required,O
distributions,O
from,O
Traditional,O
IRAs,O
",",O
Rollover,O
IRAs,O
",",O
SIMPLE,O
IRAs,O
",",O
SEPs,O
",",O
and,O
SARSEPs,O
(,O
excludes,O
Roth,O
accounts,O
),O
starting,O
the,O
year,O
in,O
which,O
age,O
70,O
1/2,O
is,O
attained,O
;,O
,O
Through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
Systematic,I-MISCELLANEOUS
Withdrawal,I-MISCELLANEOUS
Program,I-MISCELLANEOUS
",",O
if,O
the,O
amount,O
does,O
not,O
exceed,O
12,O
%,O
of,O
the,O
account,O
balance,O
in,O
a,O
rolling,O
12-month,O
period,O
;,O
,O
Held,O
by,O
insurance,O
company,O
separate,O
accounts,O
;,O
,O
On,O
which,O
a,O
finder,O
's,O
fee,O
was,O
eligible,O
to,O
be,O
paid,O
to,O
an,O
investment,O
professional,O
at,O
the,O
time,O
of,O
purchase,O
",",O
but,O
was,O
not,O
paid,O
because,O
payment,O
was,O
declined,O
(,O
to,O
determine,O
your,O
eligibility,O
for,O
this,O
CDSC,O
waiver,O
",",O
please,O
ask,O
your,O
investment,O
professional,O
if,O
he,O
or,O
she,O
received,O
a,O
finder,O
's,O
fee,O
at,O
the,O
time,O
of,O
purchase,O
),O
.,O
,O
Supplement,O
to,O
the,O
Fidelity®,I-BUSINESS
Defined,I-BUSINESS
Maturity,I-BUSINESS
Funds,I-BUSINESS
Institutional,O
Class,O
May,O
16,O
",",O
2011,O
Prospectus,O
The,O
following,O
information,O
supplements,O
the,O
similar,O
information,O
found,O
in,O
the,O
``,O
Buying,I-MISCELLANEOUS
Shares,I-MISCELLANEOUS
'',O
section,O
beginning,O
on,O
page,O
31,O
.,O
,O
Institutional,O
Class,O
shares,O
are,O
offered,O
to,O
:,O
,O
Employee,O
benefit,O
plans,O
investing,O
through,O
an,O
intermediary,O
.,O
,O
For,O
this,O
purpose,O
",",O
employee,O
benefit,O
plans,O
generally,O
include,O
profit,O
sharing,O
",",O
401,O
(,O
k,O
),O
",",O
and,O
403,O
(,O
b,O
),O
plans,O
",",O
but,O
do,O
not,O
include,O
:,O
IRAs,O
;,O
SIMPLE,O
",",O
SEP,O
",",O
or,O
SARSEP,O
plans,O
;,O
plans,O
covering,O
self-employed,O
individuals,O
and,O
their,O
employees,O
(,O
formerly,O
Keogh/H.R.,I-MISCELLANEOUS
10,I-MISCELLANEOUS
plans,I-MISCELLANEOUS
),O
;,O
health,O
savings,O
accounts,O
;,O
or,O
plans,O
investing,O
through,O
the,O
Fidelity,I-MISCELLANEOUS
Advisor,I-MISCELLANEOUS
403,I-MISCELLANEOUS
(,I-MISCELLANEOUS
b,I-MISCELLANEOUS
),I-MISCELLANEOUS
program,I-MISCELLANEOUS
;,O
,O
Insurance,O
company,O
separate,O
accounts,O
;,O
,O
Broker-dealer,O
",",O
registered,O
investment,O
adviser,O
",",O
insurance,O
company,O
",",O
trust,O
institution,O
and,O
bank,O
trust,O
department,O
managed,O
account,O
programs,O
that,O
charge,O
an,O
asset-based,O
fee,O
;,O
,O
Current,O
or,O
former,O
Trustees,O
or,O
officers,O
of,O
a,O
Fidelity,I-BUSINESS
fund,O
or,O
current,O
or,O
retired,O
officers,O
",",O
directors,O
",",O
or,O
regular,O
employees,O
of,O
FMR,I-BUSINESS
LLC,I-BUSINESS
or,O
FIL,I-BUSINESS
Limited,I-BUSINESS
or,O
their,O
direct,O
or,O
indirect,O
subsidiaries,O
(,O
Fidelity,I-BUSINESS
Trustee,O
or,O
employee,O
),O
",",O
spouses,O
of,O
Fidelity,I-BUSINESS
Trustees,O
or,O
employees,O
",",O
Fidelity,I-BUSINESS
Trustees,O
or,O
employees,O
acting,O
as,O
a,O
custodian,O
for,O
a,O
minor,O
child,O
",",O
or,O
persons,O
acting,O
as,O
trustee,O
of,O
a,O
trust,O
for,O
the,O
sole,O
benefit,O
of,O
the,O
minor,O
child,O
of,O
a,O
Fidelity,I-BUSINESS
Trustee,O
or,O
employee,O
;,O
,O
Purchased,O
for,O
any,O
state,O
",",O
county,O
",",O
or,O
city,O
",",O
or,O
any,O
governmental,O
instrumentality,O
",",O
department,O
",",O
authority,O
or,O
agency,O
;,O
,O
Purchased,O
by,O
a,O
charitable,O
organization,O
(,O
as,O
defined,O
for,O
purposes,O
of,O
Section,O
501,O
(,O
c,O
),O
(,O
3,O
),O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
),O
or,O
a,O
charitable,O
remainder,O
trust,O
or,O
life,O
income,O
pool,O
established,O
for,O
the,O
benefit,O
of,O
a,O
charitable,O
organization,O
;,O
,O
Qualified,O
tuition,O
programs,O
for,O
which,O
FMR,I-BUSINESS
or,O
an,O
affiliate,O
serves,O
as,O
investment,O
manager,O
",",O
or,O
mutual,O
funds,O
managed,O
by,O
Fidelity,I-BUSINESS
or,O
other,O
parties,O
;,O
,O
public,O
and,O
private,O
retirement,O
programs,O
and,O
non-U.S.,I-MISCELLANEOUS
insurance,O
companies,O
",",O
if,O
approved,O
by,O
Fidelity,I-BUSINESS
;,O
,O
Destiny,I-MISCELLANEOUS
Planholders,O
who,O
exchange,O
",",O
or,O
have,O
exchanged,O
",",O
from,O
Class,O
O,O
to,O
Institutional,O
Class,O
of,O
Fidelity,I-BUSINESS
Advisor,I-BUSINESS
funds,I-BUSINESS
.,O
,O
-DOCSTART-,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
large,O
accelerated,O
filer,O
",",O
an,O
accelerated,O
filer,O
",",O
a,O
non-accelerated,O
filer,O
",",O
or,O
a,O
smaller,O
reporting,O
company,O
.,O
,O
See,O
the,O
definitions,O
of,O
“,O
large,O
accelerated,O
filer,O
",",O
”,O
“,O
accelerated,O
filer,O
”,O
and,O
“,O
smaller,O
reporting,O
company,O
”,O
in,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
(,O
1,O
),O
In,O
accordance,O
with,O
Rule,O
416,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
this,O
registration,O
statement,O
shall,O
be,O
deemed,O
to,O
cover,O
any,O
additional,O
securities,O
that,O
may,O
from,O
time,O
to,O
time,O
be,O
offered,O
or,O
issued,O
to,O
prevent,O
dilution,O
resulting,O
from,O
stock,O
splits,O
",",O
stock,O
dividends,O
or,O
similar,O
transactions,O
.,O
,O
(,O
2,O
),O
Estimated,O
solely,O
for,O
the,O
purpose,O
of,O
calculating,O
the,O
registration,O
fee,O
in,O
accordance,O
with,O
Rule,O
457,O
(,O
h,O
),O
and,O
457,O
(,O
c,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
.,O
,O
The,O
price,O
per,O
share,O
and,O
aggregate,O
offering,O
price,O
are,O
calculated,O
on,O
the,O
basis,O
of,O
the,O
average,O
of,O
the,O
high,O
and,O
low,O
prices,O
of,O
the,O
Registrant,O
’,O
s,O
common,O
stock,O
on,O
June,O
6,O
",",O
2011,O
",",O
as,O
reported,O
on,O
the,O
NASDAQ,I-MISCELLANEOUS
Global,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
.,O
,O
This,O
Registration,O
Statement,O
on,O
Form,I-MISCELLANEOUS
S-8,I-MISCELLANEOUS
is,O
being,O
filed,O
for,O
the,O
purpose,O
of,O
registering,O
an,O
aggregate,O
of,O
"1,563,627",O
shares,O
of,O
common,O
stock,O
of,O
the,O
Registrant,O
to,O
be,O
issued,O
pursuant,O
to,O
the,O
Registrant,O
’,O
s,O
2006,I-MISCELLANEOUS
Employee,I-MISCELLANEOUS
Incentive,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
(,O
the,O
“,O
Plan,O
”,O
),O
.,O
,O
The,O
shares,O
being,O
registered,O
hereunder,O
represent,O
the,O
number,O
of,O
shares,O
by,O
which,O
the,O
Plan,O
was,O
automatically,O
increased,O
on,O
January,O
1,O
",",O
2011,O
",",O
as,O
provided,O
by,O
the,O
terms,O
of,O
the,O
Plan,O
.,O
,O
Pursuant,O
to,O
General,O
Instruction,O
E,O
to,O
Form,I-MISCELLANEOUS
S-8,I-MISCELLANEOUS
",",O
the,O
contents,O
of,O
the,O
Registrant,O
’,O
s,O
Registration,O
Statements,O
on,O
Form,I-MISCELLANEOUS
S-8,I-MISCELLANEOUS
(,O
File,O
Nos,O
.,O
,O
333-131846,O
",",O
333-149726,O
",",O
333-158085,O
",",O
and,O
333-164626,O
),O
",",O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
on,O
February,O
14,O
",",O
2006,O
",",O
March,O
14,O
",",O
2008,O
",",O
March,O
18,O
",",O
2009,O
",",O
and,O
February,O
1,O
",",O
2010,O
",",O
respectively,O
",",O
are,O
incorporated,O
herein,O
by,O
reference,O
.,O
,O
The,O
Exhibit,O
Index,O
immediately,O
preceding,O
the,O
exhibits,O
is,O
incorporated,O
herein,O
by,O
reference,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
registrant,O
certifies,O
that,O
it,O
has,O
reasonable,O
grounds,O
to,O
believe,O
that,O
it,O
meets,O
all,O
the,O
requirements,O
for,O
filing,O
on,O
Form,I-MISCELLANEOUS
S-8,I-MISCELLANEOUS
and,O
has,O
duly,O
caused,O
this,O
Registration,O
Statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
City,I-LOCATION
of,I-LOCATION
Hawthorne,I-LOCATION
",",O
State,I-LOCATION
of,I-LOCATION
New,I-LOCATION
York,I-LOCATION
",",O
on,O
June,O
8,O
",",O
2011,O
.,O
,O
ACORDA,I-BUSINESS
THERAPEUTICS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
By,O
:,O
/s/Ron,I-PERSON
Cohen,I-PERSON
",",O
M.D,O
.,O
,O
Ron,I-PERSON
Cohen,I-PERSON
",",O
M.D,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
on,O
Form,I-MISCELLANEOUS
S-8,I-MISCELLANEOUS
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
.,O
,O
/s/,O
Ron,I-PERSON
Cohen,I-PERSON
",",O
M.D,O
.,O
,O
Ron,I-PERSON
Cohen,I-PERSON
",",O
M.D,O
.,O
,O
/s/,O
David,I-PERSON
Lawrence,I-PERSON
",",O
M.B.A,O
.,O
,O
David,I-PERSON
Lawrence,I-PERSON
",",O
M.B.A,O
.,O
,O
We,O
",",O
the,O
undersigned,O
directors,O
of,O
Acorda,I-BUSINESS
Therapeutics,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
hereby,O
severally,O
constitute,O
and,O
appoint,O
Ron,I-PERSON
Cohen,I-PERSON
our,O
true,O
and,O
lawful,O
attorney,O
with,O
full,O
power,O
to,O
him,O
to,O
sign,O
for,O
us,O
and,O
in,O
our,O
names,O
in,O
the,O
capacities,O
indicated,O
below,O
",",O
this,O
Registration,O
Statement,O
on,O
Form,I-MISCELLANEOUS
S-8,I-MISCELLANEOUS
filed,O
herewith,O
and,O
any,O
and,O
all,O
subsequent,O
amendments,O
to,O
said,O
registration,O
statement,O
",",O
and,O
generally,O
to,O
do,O
all,O
such,O
things,O
in,O
our,O
names,O
and,O
on,O
our,O
behalf,O
in,O
our,O
capacities,O
as,O
directors,O
to,O
enable,O
Acorda,I-BUSINESS
Therapeutics,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
to,O
comply,O
with,O
the,O
provisions,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
and,O
all,O
requirements,O
of,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
hereby,O
ratifying,O
and,O
confirming,O
our,O
signatures,O
as,O
they,O
may,O
be,O
signed,O
by,O
our,O
said,O
attorney,O
to,O
said,O
registration,O
statement,O
and,O
any,O
and,O
all,O
amendments,O
thereto,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
.,O
,O
/s/,O
Sandra,I-PERSON
Panem,I-PERSON
",",O
Ph.D.,O
Sandra,I-PERSON
Panem,I-PERSON
",",O
Ph.D.,O
Acorda,I-BUSINESS
Therapeutics,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,I-BUSINESS
,O
Ladies,O
and,O
Gentlemen,O
:,O
,O
We,O
have,O
acted,O
as,O
counsel,O
to,O
Acorda,I-BUSINESS
Therapeutics,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
Delaware,O
corporation,O
(,O
the,O
“,O
Company,O
”,O
),O
",",O
in,O
connection,O
with,O
the,O
registration,O
by,O
the,O
Company,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
“,O
Act,O
”,O
),O
",",O
of,O
"1,563,627",O
shares,O
of,O
the,O
Company,O
’,O
s,O
Common,O
Stock,O
",",O
par,O
value,O
$,O
0.001,O
per,O
share,O
(,O
the,O
“,O
Shares,O
”,O
),O
",",O
issuable,O
under,O
the,O
Company,O
’,O
s,O
2006,I-MISCELLANEOUS
Employee,I-MISCELLANEOUS
Incentive,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
(,O
as,O
amended,O
",",O
the,O
“,O
Plan,O
”,O
),O
",",O
pursuant,O
to,O
the,O
registration,O
statement,O
on,O
Form,I-MISCELLANEOUS
S-8,I-MISCELLANEOUS
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
on,O
June,O
8,O
",",O
2011,O
(,O
such,O
registration,O
statement,O
is,O
referred,O
to,O
herein,O
as,O
the,O
“,O
Registration,O
Statement,O
”,O
),O
.,O
,O
We,O
have,O
reviewed,O
such,O
corporate,O
records,O
",",O
certificates,O
and,O
other,O
documents,O
",",O
and,O
such,O
questions,O
of,O
law,O
",",O
as,O
we,O
have,O
considered,O
necessary,O
or,O
appropriate,O
for,O
the,O
purposes,O
of,O
this,O
opinion,O
.,O
,O
We,O
have,O
assumed,O
that,O
all,O
signatures,O
are,O
genuine,O
",",O
that,O
all,O
documents,O
submitted,O
to,O
us,O
as,O
originals,O
are,O
authentic,O
and,O
that,O
all,O
copies,O
of,O
documents,O
submitted,O
to,O
us,O
conform,O
to,O
the,O
originals,O
.,O
,O
We,O
have,O
relied,O
as,O
to,O
certain,O
matters,O
on,O
information,O
obtained,O
from,O
public,O
officials,O
",",O
officers,O
of,O
the,O
Company,O
and,O
other,O
sources,O
believed,O
by,O
us,O
to,O
be,O
responsible,O
.,O
,O
Based,O
upon,O
the,O
foregoing,O
",",O
we,O
are,O
of,O
the,O
opinion,O
that,O
the,O
Shares,O
have,O
been,O
duly,O
authorized,O
and,O
",",O
when,O
issued,O
and,O
paid,O
for,O
in,O
accordance,O
with,O
the,O
terms,O
of,O
the,O
Company,O
’,O
s,O
Certificate,O
of,O
Incorporation,O
",",O
the,O
Plan,O
and,O
any,O
individual,O
agreements,O
relating,O
to,O
such,O
Shares,O
",",O
will,O
be,O
validly,O
issued,O
",",O
fully,O
paid,O
and,O
nonassessable,O
.,O
,O
We,O
are,O
members,O
of,O
the,O
bar,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
New,I-LOCATION
York,I-LOCATION
.,O
,O
We,O
do,O
not,O
express,O
any,O
opinion,O
herein,O
on,O
any,O
laws,O
other,O
than,O
the,O
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
the,I-LEGISLATION/ACT
State,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Delaware,I-LEGISLATION/ACT
and,O
applicable,O
provisions,O
of,O
the,O
Delaware,I-LEGISLATION/ACT
Constitution,I-LEGISLATION/ACT
and,O
reported,O
judicial,O
decisions,O
interpreting,O
these,O
laws,O
.,O
,O
We,O
hereby,O
consent,O
to,O
the,O
filing,O
of,O
this,O
opinion,O
as,O
Exhibit,O
5.1,O
to,O
the,O
Registration,O
Statement,O
.,O
,O
In,O
giving,O
such,O
consent,O
",",O
we,O
do,O
not,O
thereby,O
admit,O
that,O
we,O
are,O
in,O
the,O
category,O
of,O
persons,O
whose,O
consent,O
is,O
required,O
under,O
Section,O
7,O
of,O
the,O
Act,O
.,O
,O
The,O
Board,O
of,O
Directors,O
Acorda,I-BUSINESS
Therapeutics,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
We,O
consent,O
to,O
the,O
incorporation,O
by,O
reference,O
in,O
this,O
Registration,O
Statement,O
pertaining,O
to,O
the,O
2006,I-MISCELLANEOUS
Employee,I-MISCELLANEOUS
Incentive,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
of,O
Acorda,I-BUSINESS
Therapeutics,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
of,O
our,O
report,O
dated,O
March,O
1,O
",",O
2011,O
",",O
with,O
respect,O
to,O
the,O
consolidated,O
financial,O
statements,O
of,O
Acorda,I-BUSINESS
Therapeutics,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
the,O
effectiveness,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
of,O
Acorda,I-BUSINESS
Therapeutics,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
included,O
in,O
its,O
Annual,O
Report,O
(,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
),O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
.,O
,O
The,O
Board,O
of,O
Directors,O
Acorda,I-BUSINESS
Therapeutics,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
We,O
consent,O
to,O
the,O
use,O
of,O
our,O
report,O
dated,O
February,O
26,O
",",O
2010,O
",",O
with,O
respect,O
to,O
the,O
consolidated,O
balance,O
sheet,O
of,O
Acorda,I-BUSINESS
Therapeutics,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
as,O
of,O
December,O
31,O
",",O
2009,O
",",O
and,O
the,O
related,O
consolidated,O
statements,O
of,O
operations,O
",",O
changes,O
in,O
stockholders,O
',O
equity,O
",",O
and,O
cash,O
flows,O
for,O
each,O
of,O
the,O
years,O
in,O
the,O
two-year,O
period,O
ended,O
December,O
31,O
",",O
2009,O
",",O
incorporated,O
herein,O
by,O
reference,O
.,O
,O
-DOCSTART-,O
,O
UNITED,I-GOVERNMENT
STATES,I-GOVERNMENT
SECURITIES,I-GOVERNMENT
AND,I-GOVERNMENT
EXCHANGE,I-GOVERNMENT
COMMISSION,I-GOVERNMENT
Washington,I-LOCATION
",",I-LOCATION
D.C,I-LOCATION
.,I-LOCATION
,O
Registrant,O
s,O
telephone,O
number,O
",",O
including,O
area,O
code,O
:,O
1-212-883-2500,O
Date,O
of,O
fiscal,O
year,O
end,O
:,O
October,O
31,O
",",O
2009,O
Date,O
of,O
reporting,O
period,O
:,O
October,O
31,O
",",O
2009,O
Form,I-MISCELLANEOUS
N-CSR,I-MISCELLANEOUS
is,O
to,O
be,O
used,O
by,O
management,O
investment,O
companies,O
to,O
file,O
reports,O
with,O
the,O
Commission,O
not,O
later,O
than,O
10,O
days,O
after,O
the,O
transmission,O
to,O
stockholders,O
of,O
any,O
report,O
that,O
is,O
required,O
to,O
be,O
transmitted,O
to,O
stockholders,O
under,O
Rule,O
30e-1,O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
(,O
17,O
CFR,I-MISCELLANEOUS
270.30e-1,O
),O
.,O
,O
The,O
Commission,O
may,O
use,O
the,O
information,O
provided,O
on,O
Form,I-MISCELLANEOUS
N-CSR,I-MISCELLANEOUS
in,O
its,O
regulatory,O
",",O
disclosure,O
review,O
",",O
inspection,O
",",O
and,O
policymaking,O
roles,O
.,O
,O
A,O
registrant,O
is,O
required,O
to,O
disclose,O
the,O
information,O
specified,O
by,O
Form,I-MISCELLANEOUS
N-CSR,I-MISCELLANEOUS
",",O
and,O
the,O
Commission,O
will,O
make,O
this,O
information,O
public,O
.,O
,O
A,O
registrant,O
is,O
not,O
required,O
to,O
respond,O
to,O
the,O
collection,O
of,O
information,O
contained,O
in,O
Form,I-MISCELLANEOUS
N-CSR,I-MISCELLANEOUS
unless,O
the,O
Form,O
displays,O
a,O
currently,O
valid,O
Office,I-GOVERNMENT
of,I-GOVERNMENT
Management,I-GOVERNMENT
and,I-GOVERNMENT
Budget,I-GOVERNMENT
(,O
OMB,I-GOVERNMENT
),O
control,O
number,O
.,O
,O
Please,O
direct,O
comments,O
concerning,O
the,O
accuracy,O
of,O
the,O
information,O
collection,O
burden,O
estimate,O
and,O
any,O
suggestions,O
for,O
reducing,O
the,O
burden,O
to,O
Secretary,O
",",O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
450,O
Fifth,I-LOCATION
Street,I-LOCATION
",",O
NW,I-LOCATION
",",O
Washington,I-LOCATION
",",I-LOCATION
DC,I-LOCATION
20549-0609,O
.,O
,O
The,O
OMB,I-GOVERNMENT
has,O
reviewed,O
this,O
collection,O
of,O
information,O
under,O
the,O
clearance,O
requirements,O
of,O
44,O
U.S.C.,I-LEGISLATION/ACT
Report,O
(,O
s,O
),O
to,O
Shareholders,O
.,O
,O
The,O
registrant,O
s,O
annual,O
report,O
transmitted,O
to,O
shareholders,O
pursuant,O
to,O
Rule,O
30e-1,O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
“,O
1940,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
”,O
),O
is,O
attached,O
hereto,O
.,O
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
LETTER,O
TO,O
SHAREHOLDERS,O
December,O
24,O
",",O
2009,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Dear,O
Shareholder,O
",",O
Enclosed,O
is,O
the,O
Annual,O
Report,O
for,O
the,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
Fund,O
),O
.,O
,O
This,O
report,O
covers,O
the,O
period,O
from,O
November,O
1,O
",",O
2008,O
through,O
October,O
31,O
",",O
2009,O
.,O
,O
As,O
of,O
October,O
31,O
",",O
2009,O
",",O
the,O
net,O
asset,O
value,O
of,O
the,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
Master,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
the,O
Master,O
Fund,O
),O
",",O
into,O
which,O
all,O
assets,O
of,O
the,O
Fund,O
are,O
invested,O
",",O
was,O
$,O
"346,064,337",O
",",O
which,O
included,O
investments,O
in,O
133,O
fixed,O
income,O
securities,O
with,O
a,O
net,O
investment,O
value,O
of,O
$,O
"342,845,354",O
and,O
$,O
"3,218,983",O
of,O
cash,O
and,O
other,O
assets,O
(,O
net,O
of,O
other,O
liabilities,O
),O
.,O
,O
Performance,O
information,O
as,O
of,O
October,O
31,O
",",O
2009,O
is,O
presented,O
below,O
along,O
with,O
the,O
performance,O
for,O
the,O
benchmark,O
of,O
the,O
Master,O
Fund,O
.,O
,O
The,O
compositional,O
difference,O
between,O
the,O
Master,O
Fund,O
and,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Aggregate,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
still,O
the,O
largest,O
factor,O
affecting,O
the,O
relative,O
underperformance,O
of,O
the,O
Fund,O
.,O
,O
The,O
portfolio,O
of,O
the,O
Master,O
Fund,O
is,O
comprised,O
almost,O
entirely,O
of,O
CMBS,O
while,O
over,O
70,O
%,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Aggregate,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
comprised,O
of,O
Treasuries,I-MISCELLANEOUS
",",O
Agency,O
MBS,O
pass-throughs,O
and,O
Agency,O
debentures,O
.,O
,O
Below,O
is,O
comparative,O
performance,O
information,O
for,O
the,O
BBB,I-MISCELLANEOUS
component,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Grade,I-MISCELLANEOUS
CMBS,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
which,O
may,O
reflect,O
a,O
more,O
direct,O
comparison,O
based,O
on,O
the,O
composition,O
of,O
the,O
Master,O
Fund,O
s,O
portfolio,O
.,O
,O
Market,O
Overview,O
Taking,O
its,O
cues,O
from,O
a,O
rally,O
in,O
stocks,O
and,O
other,O
credit,O
markets,O
",",O
pricing,O
in,O
the,O
CMBS,O
market,O
has,O
continued,O
to,O
improve,O
since,O
April,O
despite,O
a,O
continued,O
weakening,O
in,O
commercial,O
real,O
estate,O
fundamentals,O
.,O
,O
Average,O
spreads,O
on,O
Super,I-MISCELLANEOUS
Senior,I-MISCELLANEOUS
AAAs,I-MISCELLANEOUS
eligible,O
for,O
the,O
Term,I-MISCELLANEOUS
Asset-Backed,I-MISCELLANEOUS
Securities,I-MISCELLANEOUS
Loan,I-MISCELLANEOUS
Facility,I-MISCELLANEOUS
(,O
TALF,I-MISCELLANEOUS
),O
have,O
tightened,O
dramatically,O
",",O
from,O
625bp,O
at,O
the,O
end,O
of,O
April,O
to,O
as,O
low,O
as,O
400,O
bp,O
in,O
mid-July,O
after,O
the,O
first,O
round,O
of,O
TALF,I-MISCELLANEOUS
funding,O
for,O
legacy,O
CMBS,O
was,O
successfully,O
completed,O
.,O
,O
Spreads,O
on,O
Super,I-MISCELLANEOUS
Senior,I-MISCELLANEOUS
AAAs,I-MISCELLANEOUS
not,O
eligible,O
for,O
TALF,I-MISCELLANEOUS
were,O
in,O
the,O
mid,O
700s,O
at,O
the,O
end,O
of,O
April,O
and,O
tightened,O
to,O
the,O
low,O
500s,O
by,O
early,O
August,O
in,O
anticipation,O
of,O
demand,O
for,O
such,O
investments,O
by,O
asset,O
managers,O
in,O
the,O
Public-Private,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Program,I-MISCELLANEOUS
(,O
PPIP,I-MISCELLANEOUS
),O
.,O
,O
On,O
the,O
heels,O
of,O
this,O
technical,O
rally,O
",",O
many,O
insurance,O
companies,O
and,O
money,O
managers,O
looked,O
for,O
opportunities,O
to,O
sell,O
",",O
pushing,O
spreads,O
back,O
out,O
to,O
the,O
high,O
400s,O
for,O
TALF-eligible,I-MISCELLANEOUS
and,O
high,O
600s,O
for,O
non,O
TALF-eligible,I-MISCELLANEOUS
bonds,O
.,O
,O
However,O
",",O
this,O
supply,O
was,O
gradually,O
absorbed,O
and,O
the,O
broader,O
economic,O
sentiment,O
continued,O
to,O
improve,O
into,O
Q4,O
.,O
,O
By,O
the,O
end,O
of,O
October,O
",",O
spreads,O
on,O
Super,I-MISCELLANEOUS
Senior,I-MISCELLANEOUS
AAAs,I-MISCELLANEOUS
",",O
eligible,O
and,O
non-eligible,O
for,O
TALF,I-MISCELLANEOUS
",",O
reached,O
the,O
mid,O
300s,O
and,O
mid,O
500s,O
",",O
respectively,O
.,O
,O
Bonds,O
rated,O
below,O
AAA,I-MISCELLANEOUS
also,O
enjoyed,O
a,O
small,O
rally,O
in,O
price,O
in,O
spite,O
of,O
an,O
increase,O
in,O
the,O
CMBS,O
conduit,O
delinquency,O
rate,O
from,O
2.45,O
%,O
at,O
the,O
end,O
of,O
April,O
to,O
4.80,O
%,O
at,O
the,O
end,O
of,O
October1,O
.,O
,O
Some,O
of,O
the,O
recent,O
price,O
gains,O
have,O
been,O
attributed,O
to,O
a,O
ruling,O
by,O
the,O
Treasury,I-GOVERNMENT
Department,I-GOVERNMENT
that,O
provides,O
special,O
servicers,O
with,O
greater,O
leeway,O
to,O
conduct,O
modifications,O
on,O
loans,O
in,O
advance,O
of,O
mortgages,O
becoming,O
delinquent,O
.,O
,O
Prior,O
to,O
the,O
change,O
",",O
special,O
servicers,O
were,O
restricted,O
from,O
modifying,O
loans,O
unless,O
loans,O
were,O
in,O
‘imminent,O
default,O
or,O
had,O
defaulted,O
.,O
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
The,O
new,O
guidance,O
enables,O
distressed,O
borrowers,O
to,O
initiate,O
conversations,O
with,O
special,O
servicers,O
to,O
proactively,O
evaluate,O
their,O
mortgages,O
in,O
hopes,O
of,O
averting,O
foreclosure,O
.,O
,O
These,O
changes,O
generated,O
renewed,O
interest,O
in,O
more,O
credit,O
sensitive,O
classes,O
of,O
CMBS,O
as,O
the,O
prospects,O
for,O
immediate,O
liquidation,O
of,O
delinquent,O
loans,O
into,O
a,O
depressed,O
market,O
diminished,O
.,O
,O
However,O
",",O
most,O
lower,O
rated,O
CMBS,O
positions,O
still,O
trade,O
for,O
pennies,O
on,O
the,O
dollar,O
as,O
most,O
investors,O
recognize,O
that,O
the,O
new,O
guidance,O
may,O
simply,O
delay,O
",",O
rather,O
than,O
eliminate,O
",",O
impending,O
defaults,O
.,O
,O
The,O
CMBS,O
market,O
recently,O
received,O
some,O
welcome,O
news,O
in,O
the,O
form,O
of,O
the,O
first,O
U.S.,I-LOCATION
CMBS,O
deal,O
consisting,O
of,O
newly,O
originated,O
collateral,O
issued,O
in,O
almost,O
a,O
year,O
and,O
a,O
half,O
.,O
,O
The,O
Developers,O
Diversified,O
Realty,O
deal,O
was,O
issued,O
into,O
strong,O
demand,O
and,O
priced,O
at,O
tighter,O
than,O
expected,O
spreads,O
with,O
the,O
TALF,I-MISCELLANEOUS
eligible,O
AAA,I-MISCELLANEOUS
tranche,O
pricing,O
at,O
140bp,O
over,O
swaps,O
.,O
,O
The,O
deal,O
featured,O
notable,O
differences,O
to,O
the,O
traditional,O
CMBS,O
structure,O
",",O
including,O
a,O
simplified,O
low,O
leverage,O
three,O
tranche,O
structure,O
.,O
,O
The,O
mortgage,O
collateral,O
was,O
also,O
more,O
conservatively,O
underwritten,O
than,O
those,O
of,O
the,O
recent,O
past,O
",",O
with,O
a,O
debt,O
coverage,O
ratio,O
of,O
2.04x,O
and,O
an,O
LTV,O
of,O
51.7,O
%,O
2,O
.,O
,O
With,O
respect,O
to,O
non-securitized,O
CRE,O
debt,O
",",O
both,O
statistical,O
and,O
anecdotal,O
evidence,O
points,O
to,O
further,O
deterioration,O
within,O
institutional,O
loan,O
portfolios,O
",",O
primarily,O
banks,O
.,O
,O
As,O
of,O
September,O
30,O
",",O
2009,O
",",O
the,O
national,O
average,O
default,O
rate,O
for,O
commercial,O
real,O
estate,O
mortgages,O
held,O
by,O
financial,O
institutions,O
rose,O
to,O
3.40,O
%,O
(,O
up,O
from,O
2.88,O
%,O
three,O
months,O
earlier3,O
),O
.,O
,O
We,O
expect,O
that,O
this,O
deterioration,O
will,O
continue,O
to,O
put,O
pressure,O
on,O
financial,O
institutions,O
.,O
,O
However,O
",",O
the,O
current,O
low,O
interest,O
rate,O
environment,O
is,O
providing,O
breathing,O
room,O
for,O
these,O
financial,O
institutions,O
that,O
hope,O
to,O
earn,O
their,O
way,O
out,O
of,O
the,O
crisis,O
.,O
,O
Given,O
the,O
general,O
uncertainty,O
in,O
commercial,O
real,O
estate,O
debt,O
markets,O
",",O
we,O
continue,O
to,O
position,O
the,O
Master,O
Fund,O
in,O
seasoned,O
securities,O
and,O
securities,O
with,O
significant,O
amounts,O
of,O
credit,O
enhancement,O
.,O
,O
We,O
believe,O
that,O
this,O
position,O
will,O
be,O
beneficial,O
to,O
the,O
Fund,O
in,O
the,O
event,O
of,O
continued,O
weakness,O
in,O
commercial,O
real,O
estate,O
fundamentals,O
.,O
,O
As,O
of,O
October,O
31,O
",",O
2009,O
",",O
96.1,O
%,O
of,O
the,O
non-IO,O
",",O
non-Super,O
Senior,O
CMBS,O
positions,O
in,O
the,O
Master,O
Fund,O
were,O
invested,O
in,O
2005,O
and,O
earlier,O
vintages,O
.,O
,O
With,O
regard,O
to,O
the,O
financial,O
results,O
for,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
",",O
please,O
find,O
the,O
following,O
audited,O
annual,O
financial,O
statements,O
for,O
the,O
fiscal,O
year,O
ending,O
October,O
31,O
",",O
2009.If,O
you,O
have,O
any,O
questions,O
",",O
please,O
feel,O
free,O
to,O
contact,O
me,O
at,O
(,O
212,O
),O
883-2541,O
or,O
Robert,I-PERSON
Kopchains,I-PERSON
at,O
(,O
212,O
),O
883-2692,O
.,O
,O
CMBS,O
delinquency,O
data,O
are,O
from,O
Trepp,I-BUSINESS
and,O
include,O
conduit,O
commercial,O
mortgages,O
",",O
all,O
property,O
types,O
",",O
securitized,O
as,O
commercial,O
mortgage,O
backed,O
securities,O
that,O
are,O
30+,O
",",O
in,O
process,O
of,O
foreclosure,O
",",O
REO,O
",",O
or,O
non-performing,O
maturities.2,O
.,O
,O
DDR,O
2009-DDR1,O
Termsheet3,O
.,O
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
PERFORMANCE,O
OVERVIEW,O
(,O
unaudited,O
),O
Growth,O
in,O
Value,O
of,O
a,O
$,O
"10,000",O
Investment,O
in,O
the,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
and,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Aggregate,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
1,I-MISCELLANEOUS
(,O
December,O
31,O
",",O
1994,O
to,O
October,O
31,O
",",O
2009,O
),O
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
FUND,O
OVERVIEW,O
(,O
unaudited,O
),O
THE,O
INVESTMENT,O
ADVISER,O
ING,I-BUSINESS
Clarion,I-BUSINESS
Capital,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
has,O
$,O
4.5,O
billion,O
under,O
management,O
.,O
,O
ING,I-BUSINESS
Clarion,I-BUSINESS
Capital,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
is,O
an,O
affiliate,O
of,O
ING,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Investment,I-BUSINESS
Management,I-BUSINESS
",",O
the,O
world,O
s,O
largest,O
real,O
estate,O
investment,O
manager,O
with,O
$,O
96.2,O
billion,O
in,O
real,O
estate,O
assets,O
under,O
management,O
",",O
including,O
$,O
43.7,O
billion,O
managed,O
by,O
ING,I-BUSINESS
Clarion,I-BUSINESS
-,O
the,O
U.S.,I-LOCATION
arm,O
of,O
ING,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Investment,I-BUSINESS
Management,I-BUSINESS
.,O
,O
ING,I-BUSINESS
Clarion,I-BUSINESS
Capital,I-BUSINESS
has,O
50,O
employees,O
and,O
has,O
been,O
investing,O
for,O
its,O
institutional,O
clients,O
since,O
1996,O
with,O
a,O
focus,O
on,O
real,O
estate,O
related,O
debt,O
.,O
,O
Operating,O
out,O
of,O
its,O
headquarters,O
in,O
New,I-LOCATION
York,I-LOCATION
",",O
ING,I-BUSINESS
Clarion,I-BUSINESS
Capital,I-BUSINESS
is,O
dedicated,O
to,O
debt,O
investments,O
and,O
benefits,O
from,O
its,O
affiliate,O
s,O
(,O
ING,I-BUSINESS
Clarion,I-BUSINESS
),O
real,O
estate,O
resources,O
",",O
including,O
over,O
400,O
employees,O
in,O
the,O
U.S.,I-LOCATION
and,O
a,O
global,O
research,O
team,O
comprised,O
of,O
9,O
people,O
*,O
.,O
,O
FUND,O
OBJECTIVE,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
Master,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
the,O
Master,O
Fund,O
),O
seeks,O
to,O
generate,O
high,O
current,O
income,O
by,O
selecting,O
investments,O
based,O
on,O
fundamental,O
analysis,O
and,O
relative,O
value,O
.,O
,O
INVESTMENT,O
STRATEGY,O
The,O
Master,O
Fund,O
s,O
investment,O
approach,O
identifies,O
investments,O
with,O
potential,O
for,O
capital,O
appreciation,O
based,O
on,O
credit,O
upgrades,O
and,O
other,O
factors,O
.,O
,O
The,O
majority,O
of,O
the,O
securities,O
in,O
which,O
the,O
Master,O
Fund,O
invests,O
are,O
commercial,O
mortgage,O
backed,O
securities,O
with,O
a,O
maturity,O
of,O
2,O
to,O
20,O
years,O
.,O
,O
The,O
portfolio,O
is,O
actively,O
managed,O
to,O
enhance,O
return,O
and,O
to,O
mitigate,O
downside,O
risk,O
.,O
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
FINANCIAL,O
HIGHLIGHTS,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
See,O
Notes,O
to,O
Financial,O
Statements,O
and,O
Attached,O
Financial,O
Statements,O
of,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
Master,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
FINANCIAL,O
STATEMENTS,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
See,O
Notes,O
to,O
Financial,O
Statements,O
and,O
Attached,O
Financial,O
Statements,O
of,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
Master,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
FINANCIAL,O
STATEMENTS,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
See,O
Notes,O
to,O
Financial,O
Statements,O
and,O
Attached,O
Financial,O
Statements,O
of,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
Master,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
FINANCIAL,O
STATEMENTS,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
See,O
Notes,O
to,O
Financial,O
Statements,O
and,O
Attached,O
Financial,O
Statements,O
of,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
Master,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
FINANCIAL,O
STATEMENTS,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
NOTES,O
TO,O
FINANCIAL,O
STATEMENTS,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
See,O
Attached,O
Financial,O
Statements,O
of,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
Master,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
NOTES,O
TO,O
FINANCIAL,O
STATEMENTS,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
See,O
Attached,O
Financial,O
Statements,O
of,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
Master,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
NOTES,O
TO,O
FINANCIAL,O
STATEMENTS,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
See,O
Attached,O
Financial,O
Statements,O
of,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
Master,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
REPORT,O
OF,O
INDEPENDENT,O
REGISTERED,O
PUBLIC,O
ACCOUNTING,O
FIRM,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
To,O
the,O
Board,O
of,O
Directors,O
and,O
Shareholders,O
of,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
:,O
We,O
have,O
audited,O
the,O
accompanying,O
statement,O
of,O
assets,O
and,O
liabilities,O
of,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
Fund,O
),O
",",O
as,O
of,O
October,O
31,O
",",O
2009,O
",",O
and,O
the,O
related,O
statements,O
of,O
operations,O
and,O
cash,O
flows,O
for,O
the,O
year,O
then,O
ended,O
",",O
the,O
statements,O
of,O
changes,O
in,O
net,O
assets,O
for,O
each,O
of,O
the,O
two,O
years,O
in,O
the,O
period,O
then,O
ended,O
",",O
and,O
the,O
financial,O
highlights,O
for,O
each,O
of,O
the,O
five,O
years,O
in,O
the,O
period,O
then,O
ended,O
.,O
,O
These,O
financial,O
statements,O
and,O
financial,O
highlights,O
are,O
the,O
responsibility,O
of,O
the,O
Fund,O
s,O
management,O
.,O
,O
Our,O
responsibility,O
is,O
to,O
express,O
an,O
opinion,O
on,O
these,O
financial,O
statements,O
and,O
financial,O
highlights,O
based,O
on,O
our,O
audits,O
.,O
,O
We,O
conducted,O
our,O
audits,O
in,O
accordance,O
with,O
the,O
Standards,O
of,O
the,O
Public,I-GOVERNMENT
Company,I-GOVERNMENT
Accounting,I-GOVERNMENT
Oversight,I-GOVERNMENT
Board,I-GOVERNMENT
(,I-GOVERNMENT
United,I-GOVERNMENT
States,I-GOVERNMENT
),I-GOVERNMENT
.,O
,O
Those,O
standards,O
require,O
that,O
we,O
plan,O
and,O
perform,O
the,O
audit,O
to,O
obtain,O
reasonable,O
assurance,O
about,O
whether,O
the,O
financial,O
statements,O
and,O
financial,O
highlights,O
are,O
free,O
of,O
material,O
misstatement,O
.,O
,O
We,O
were,O
not,O
engaged,O
to,O
perform,O
an,O
audit,O
of,O
the,O
Fund,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
Our,O
audits,O
included,O
consideration,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
a,O
basis,O
for,O
designing,O
audit,O
procedures,O
that,O
are,O
appropriate,O
in,O
the,O
circumstances,O
",",O
but,O
not,O
for,O
the,O
purpose,O
of,O
expressing,O
an,O
opinion,O
on,O
the,O
effectiveness,O
of,O
the,O
Fund,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
Accordingly,O
",",O
we,O
express,O
no,O
such,O
opinion,O
.,O
,O
An,O
audit,O
also,O
includes,O
examining,O
",",O
on,O
a,O
test,O
basis,O
",",O
evidence,O
supporting,O
the,O
amounts,O
and,O
disclosures,O
in,O
the,O
financial,O
statements,O
and,O
financial,O
highlights,O
",",O
assessing,O
the,O
accounting,O
principles,O
used,O
and,O
significant,O
estimates,O
made,O
by,O
management,O
",",O
and,O
evaluating,O
the,O
overall,O
financial,O
statement,O
presentation,O
.,O
,O
We,O
believe,O
that,O
our,O
audits,O
provide,O
a,O
reasonable,O
basis,O
for,O
our,O
opinion,O
.,O
,O
In,O
our,O
opinion,O
",",O
the,O
financial,O
statements,O
and,O
financial,O
highlights,O
referred,O
to,O
above,O
present,O
fairly,O
",",O
in,O
all,O
material,O
respects,O
",",O
the,O
financial,O
position,O
of,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
at,O
October,O
31,O
",",O
2009,O
",",O
the,O
results,O
of,O
its,O
operations,O
and,O
its,O
cash,O
flows,O
for,O
the,O
year,O
then,O
ended,O
",",O
the,O
changes,O
in,O
its,O
net,O
assets,O
for,O
each,O
of,O
the,O
two,O
years,O
in,O
the,O
period,O
then,O
ended,O
",",O
and,O
the,O
financial,O
highlights,O
for,O
each,O
of,O
the,O
five,O
years,O
in,O
the,O
period,O
then,O
ended,O
",",O
in,O
conformity,O
with,O
U.S.,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
.,O
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
FUND,O
EXPENSES,O
(,O
unaudited,O
),O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
As,O
a,O
shareholder,O
of,O
the,O
Fund,O
",",O
you,O
incur,O
two,O
types,O
of,O
costs,O
:,O
(,O
1,O
),O
transaction,O
costs,O
",",O
which,O
may,O
include,O
sales,O
charges,O
(,O
loads,O
),O
on,O
purchase,O
payments,O
and,O
contingent,O
deferred,O
sales,O
charges,O
on,O
redemptions,O
and,O
(,O
2,O
),O
ongoing,O
costs,O
",",O
including,O
management,O
fees,O
and,O
other,O
Fund,O
expenses,O
.,O
,O
This,O
example,O
is,O
intended,O
to,O
help,O
you,O
understand,O
your,O
ongoing,O
costs,O
(,O
in,O
dollars,O
),O
of,O
investing,O
in,O
the,O
Fund,O
and,O
to,O
compare,O
these,O
costs,O
with,O
the,O
ongoing,O
costs,O
of,O
investing,O
in,O
other,O
mutual,O
funds,O
.,O
,O
The,O
example,O
is,O
based,O
on,O
an,O
investment,O
of,O
$,O
"1,000",O
invested,O
at,O
the,O
beginning,O
of,O
the,O
period,O
and,O
held,O
for,O
the,O
entire,O
period,O
as,O
indicated,O
below,O
.,O
,O
ACTUAL,O
EXPENSES,O
The,O
first,O
line,O
of,O
the,O
table,O
provides,O
information,O
about,O
actual,O
account,O
values,O
and,O
actual,O
expenses,O
.,O
,O
You,O
may,O
use,O
the,O
information,O
in,O
this,O
line,O
",",O
together,O
with,O
the,O
amount,O
you,O
invested,O
",",O
to,O
estimate,O
the,O
expenses,O
that,O
you,O
paid,O
over,O
the,O
period,O
.,O
,O
Simply,O
divide,O
the,O
account,O
value,O
by,O
$,O
"1,000",O
(,O
for,O
example,O
",",O
an,O
$,O
"8,600",O
account,O
value,O
divided,O
by,O
$,O
"1,000",O
=,O
8.6,O
),O
",",O
then,O
multiply,O
the,O
result,O
by,O
the,O
number,O
in,O
the,O
first,O
line,O
under,O
the,O
heading,O
entitled,O
Expenses,O
Paid,O
During,O
the,O
Period,O
to,O
estimate,O
the,O
expenses,O
you,O
paid,O
on,O
your,O
account,O
during,O
this,O
period,O
.,O
,O
HYPOTHETICAL,O
EXAMPLE,O
FOR,O
COMPARISON,O
PURPOSES,O
The,O
second,O
line,O
of,O
the,O
table,O
below,O
provides,O
information,O
about,O
hypothetical,O
account,O
values,O
and,O
hypothetical,O
expenses,O
based,O
on,O
the,O
Fund,O
s,O
actual,O
expense,O
ratio,O
and,O
an,O
assumed,O
annual,O
rate,O
of,O
return,O
of,O
5,O
%,O
before,O
expenses,O
",",O
which,O
is,O
not,O
the,O
Fund,O
s,O
actual,O
return,O
.,O
,O
The,O
hypothetical,O
account,O
values,O
and,O
expenses,O
may,O
not,O
be,O
used,O
to,O
estimate,O
the,O
actual,O
ending,O
account,O
balance,O
or,O
expenses,O
you,O
paid,O
for,O
the,O
period,O
.,O
,O
You,O
may,O
use,O
this,O
information,O
to,O
compare,O
the,O
ongoing,O
costs,O
of,O
investing,O
in,O
the,O
Fund,O
and,O
other,O
funds,O
by,O
comparing,O
this,O
5,O
%,O
hypothetical,O
example,O
with,O
the,O
5,O
%,O
hypothetical,O
examples,O
that,O
appear,O
in,O
the,O
shareholder,O
reports,O
of,O
other,O
funds,O
.,O
,O
Please,O
note,O
that,O
the,O
expenses,O
shown,O
in,O
the,O
table,O
are,O
meant,O
to,O
highlight,O
your,O
ongoing,O
costs,O
only,O
and,O
do,O
not,O
reflect,O
any,O
transactional,O
costs,O
",",O
such,O
as,O
sales,O
charges,O
(,O
loads,O
),O
or,O
contingent,O
deferred,O
sales,O
charges,O
on,O
redemptions,O
.,O
,O
Therefore,O
",",O
the,O
second,O
line,O
of,O
the,O
table,O
is,O
useful,O
in,O
comparing,O
ongoing,O
costs,O
only,O
",",O
and,O
will,O
not,O
help,O
you,O
determine,O
the,O
relative,O
total,O
costs,O
of,O
owning,O
different,O
funds,O
.,O
,O
In,O
addition,O
",",O
if,O
these,O
transactional,O
costs,O
were,O
included,O
",",O
your,O
costs,O
would,O
have,O
been,O
higher,O
.,O
,O
A,O
description,O
of,O
the,O
Fund,O
s,O
proxy,O
voting,O
policies,O
and,O
procedures,O
related,O
to,O
portfolio,O
securities,O
is,O
available,O
without,O
charge,O
",",O
upon,O
request,O
",",O
by,O
calling,O
the,O
Fund,O
at,O
(,O
212,O
),O
883-2750,O
or,O
on,O
the,O
Securities,I-GOVERNMENT
&,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
s,O
website,O
at,O
http,O
:,O
//www.sec.gov,O
.,O
,O
Information,O
regarding,O
how,O
the,O
Fund,O
voted,O
proxies,O
for,O
portfolio,O
securities,O
",",O
if,O
applicable,O
",",O
during,O
the,O
most,O
recent,O
12-month,O
period,O
ended,O
June,O
30,O
",",O
is,O
also,O
available,O
",",O
without,O
charge,O
and,O
upon,O
request,O
by,O
calling,O
the,O
Fund,O
at,O
(,O
212,O
),O
883-2750,O
or,O
by,O
accessing,O
the,O
Fund,O
s,O
Form,I-MISCELLANEOUS
N-PX,I-MISCELLANEOUS
on,O
the,O
Commission,O
s,O
website,O
at,O
http,O
:,O
//www.sec.gov,O
.,O
,O
The,O
Fund,O
will,O
file,O
its,O
complete,O
schedule,O
of,O
portfolio,O
holdings,O
with,O
the,O
Securities,I-GOVERNMENT
&,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
for,O
the,O
first,O
and,O
third,O
quarters,O
of,O
each,O
fiscal,O
year,O
on,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
.,O
,O
The,O
Fund,O
s,O
Forms,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
are,O
available,O
on,O
the,O
SEC,I-GOVERNMENT
website,O
at,O
http,O
:,O
//www.sec.gov,O
.,O
,O
The,O
Fund,O
s,O
Forms,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
may,O
also,O
be,O
reviewed,O
and,O
copied,O
at,O
the,O
Commission,O
s,O
Public,I-LOCATION
Reference,I-LOCATION
Room,I-LOCATION
in,O
Washington,I-LOCATION
",",I-LOCATION
DC,I-LOCATION
;,O
information,O
on,O
the,O
operation,O
of,O
the,O
Public,I-LOCATION
Reference,I-LOCATION
Room,I-LOCATION
may,O
be,O
obtained,O
by,O
calling,O
(,O
800,O
),O
SEC-0330,O
.,O
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
See,O
Notes,O
to,O
Financial,O
Statements,O
.,O
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
See,O
Notes,O
to,O
Financial,O
Statements,O
.,O
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
See,O
Notes,O
to,O
Financial,O
Statements,O
.,O
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
See,O
Notes,O
to,O
Financial,O
Statements,O
.,O
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
See,O
Notes,O
to,O
Financial,O
Statements,O
.,O
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
REPORT,O
OF,O
INDEPENDENT,O
REGISTERED,O
PUBLIC,O
ACCOUNTING,O
FIRM,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
MASTER,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
.,I-BUSINESS
,O
To,O
the,O
Board,O
of,O
Directors,O
and,O
Members,O
of,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
Master,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
:,O
We,O
have,O
audited,O
the,O
accompanying,O
statement,O
of,O
assets,O
",",O
liabilities,O
and,O
members,O
capital,O
",",O
including,O
the,O
schedule,O
of,O
portfolio,O
holdings,O
",",O
of,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
Master,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
the,O
Master,O
Fund,O
),O
",",O
as,O
of,O
October,O
31,O
",",O
2009,O
",",O
and,O
the,O
related,O
statements,O
of,O
operations,O
and,O
cash,O
flows,O
for,O
the,O
year,O
then,O
ended,O
",",O
the,O
statements,O
of,O
changes,O
in,O
members,O
capital,O
for,O
each,O
of,O
the,O
two,O
years,O
in,O
the,O
period,O
then,O
ended,O
",",O
and,O
the,O
financial,O
highlights,O
for,O
each,O
of,O
the,O
five,O
years,O
in,O
the,O
period,O
then,O
ended,O
.,O
,O
These,O
financial,O
statements,O
and,O
financial,O
highlights,O
are,O
the,O
responsibility,O
of,O
the,O
Master,O
Fund,O
s,O
management,O
.,O
,O
Our,O
responsibility,O
is,O
to,O
express,O
an,O
opinion,O
on,O
these,O
financial,O
statements,O
and,O
financial,O
highlights,O
based,O
on,O
our,O
audits,O
.,O
,O
We,O
conducted,O
our,O
audits,O
in,O
accordance,O
with,O
the,O
Standards,O
of,O
the,O
Public,I-GOVERNMENT
Company,I-GOVERNMENT
Accounting,I-GOVERNMENT
Oversight,I-GOVERNMENT
Board,I-GOVERNMENT
(,I-GOVERNMENT
United,I-GOVERNMENT
States,I-GOVERNMENT
),I-GOVERNMENT
.,O
,O
Those,O
standards,O
require,O
that,O
we,O
plan,O
and,O
perform,O
the,O
audit,O
to,O
obtain,O
reasonable,O
assurance,O
about,O
whether,O
the,O
financial,O
statements,O
and,O
financial,O
highlights,O
are,O
free,O
of,O
material,O
misstatement,O
.,O
,O
We,O
were,O
not,O
engaged,O
to,O
perform,O
an,O
audit,O
of,O
the,O
Master,O
Fund,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
Our,O
audits,O
included,O
consideration,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
a,O
basis,O
for,O
designing,O
audit,O
procedures,O
that,O
are,O
appropriate,O
in,O
the,O
circumstances,O
",",O
but,O
not,O
for,O
the,O
purpose,O
of,O
expressing,O
an,O
opinion,O
on,O
the,O
effectiveness,O
of,O
the,O
Master,O
Fund,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
Accordingly,O
",",O
we,O
express,O
no,O
such,O
opinion,O
.,O
,O
An,O
audit,O
also,O
includes,O
examining,O
",",O
on,O
a,O
test,O
basis,O
",",O
evidence,O
supporting,O
the,O
amounts,O
and,O
disclosures,O
in,O
the,O
financial,O
statements,O
and,O
financial,O
highlights,O
",",O
assessing,O
the,O
accounting,O
principles,O
used,O
and,O
significant,O
estimates,O
made,O
by,O
management,O
",",O
and,O
evaluating,O
the,O
overall,O
financial,O
statement,O
presentation,O
.,O
,O
Our,O
procedures,O
included,O
confirmation,O
of,O
securities,O
owned,O
as,O
of,O
October,O
31,O
",",O
2009,O
by,O
correspondence,O
with,O
the,O
custodian,O
and,O
others,O
.,O
,O
We,O
believe,O
that,O
our,O
audits,O
provide,O
a,O
reasonable,O
basis,O
for,O
our,O
opinion,O
.,O
,O
In,O
our,O
opinion,O
",",O
the,O
financial,O
statements,O
and,O
financial,O
highlights,O
referred,O
to,O
above,O
present,O
fairly,O
",",O
in,O
all,O
material,O
respects,O
",",O
the,O
financial,O
position,O
of,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
Master,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
at,O
October,O
31,O
",",O
2009,O
",",O
the,O
results,O
of,O
its,O
operations,O
and,O
its,O
cash,O
flows,O
for,O
the,O
year,O
then,O
ended,O
",",O
the,O
changes,O
in,O
its,O
members,O
capital,O
for,O
each,O
of,O
the,O
two,O
years,O
in,O
the,O
period,O
then,O
ended,O
",",O
and,O
the,O
financial,O
highlights,O
for,O
each,O
of,O
the,O
five,O
years,O
in,O
the,O
period,O
then,O
ended,O
",",O
in,O
conformity,O
U.S.,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
.,O
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
FUND,O
EXPENSES,O
(,O
unaudited,O
),O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
MASTER,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
As,O
a,O
member,O
of,O
the,O
Master,O
Fund,O
",",O
you,O
incur,O
two,O
types,O
of,O
costs,O
:,O
(,O
1,O
),O
transaction,O
costs,O
",",O
which,O
may,O
include,O
sales,O
charges,O
(,O
loads,O
),O
on,O
purchase,O
payments,O
",",O
contingent,O
deferred,O
sales,O
charges,O
on,O
redemptions,O
and,O
(,O
2,O
),O
ongoing,O
costs,O
",",O
including,O
management,O
fees,O
and,O
other,O
Master,O
Fund,O
expenses,O
.,O
,O
This,O
example,O
is,O
intended,O
to,O
help,O
you,O
understand,O
your,O
ongoing,O
costs,O
(,O
in,O
dollars,O
),O
of,O
investing,O
in,O
the,O
Master,O
Fund,O
and,O
to,O
compare,O
these,O
costs,O
with,O
the,O
ongoing,O
costs,O
of,O
investing,O
in,O
other,O
mutual,O
funds,O
.,O
,O
The,O
example,O
is,O
based,O
on,O
an,O
investment,O
of,O
$,O
"1,000",O
invested,O
at,O
the,O
beginning,O
of,O
the,O
period,O
and,O
held,O
for,O
the,O
entire,O
period,O
as,O
indicated,O
below,O
.,O
,O
ACTUAL,O
EXPENSES,O
The,O
first,O
line,O
of,O
the,O
table,O
provides,O
information,O
about,O
actual,O
account,O
values,O
and,O
actual,O
expenses,O
.,O
,O
You,O
may,O
use,O
the,O
information,O
in,O
this,O
line,O
",",O
together,O
with,O
the,O
amount,O
you,O
invested,O
",",O
to,O
estimate,O
the,O
expenses,O
that,O
you,O
paid,O
over,O
the,O
period,O
.,O
,O
Simply,O
divide,O
the,O
account,O
value,O
by,O
$,O
"1,000",O
(,O
for,O
example,O
",",O
an,O
$,O
"8,600",O
account,O
value,O
divided,O
by,O
$,O
"1,000",O
=,O
8.6,O
),O
",",O
then,O
multiply,O
the,O
result,O
by,O
the,O
number,O
in,O
the,O
first,O
line,O
under,O
the,O
heading,O
entitled,O
Expenses,O
Paid,O
During,O
the,O
Period,O
to,O
estimate,O
the,O
expenses,O
you,O
paid,O
on,O
your,O
account,O
during,O
this,O
period,O
.,O
,O
HYPOTHETICAL,O
EXAMPLE,O
FOR,O
COMPARISON,O
PURPOSES,O
The,O
second,O
line,O
of,O
the,O
table,O
below,O
provides,O
information,O
about,O
hypothetical,O
account,O
values,O
and,O
hypothetical,O
expenses,O
based,O
on,O
the,O
Master,O
Fund,O
s,O
actual,O
expense,O
ratio,O
and,O
an,O
assumed,O
annual,O
rate,O
of,O
return,O
of,O
5,O
%,O
before,O
expenses,O
",",O
which,O
is,O
not,O
the,O
Master,O
Fund,O
s,O
actual,O
return,O
.,O
,O
The,O
hypothetical,O
account,O
values,O
and,O
expenses,O
may,O
not,O
be,O
used,O
to,O
estimate,O
the,O
actual,O
ending,O
account,O
balance,O
or,O
expenses,O
you,O
paid,O
for,O
the,O
period,O
.,O
,O
You,O
may,O
use,O
this,O
information,O
to,O
compare,O
the,O
ongoing,O
costs,O
of,O
investing,O
in,O
the,O
Master,O
Fund,O
and,O
other,O
funds,O
by,O
comparing,O
this,O
5,O
%,O
hypothetical,O
example,O
with,O
the,O
5,O
%,O
hypothetical,O
examples,O
that,O
appear,O
in,O
the,O
shareholder,O
reports,O
of,O
other,O
funds,O
.,O
,O
Please,O
note,O
that,O
the,O
expenses,O
shown,O
in,O
the,O
table,O
are,O
meant,O
to,O
highlight,O
your,O
ongoing,O
costs,O
only,O
and,O
do,O
not,O
reflect,O
any,O
transactional,O
costs,O
",",O
such,O
as,O
sales,O
charges,O
(,O
loads,O
),O
",",O
or,O
contingent,O
deferred,O
sales,O
charges,O
on,O
redemptions,O
.,O
,O
Therefore,O
",",O
the,O
second,O
line,O
of,O
the,O
table,O
is,O
useful,O
in,O
comparing,O
ongoing,O
costs,O
only,O
",",O
and,O
will,O
not,O
help,O
you,O
determine,O
the,O
relative,O
total,O
costs,O
of,O
owning,O
different,O
funds,O
.,O
,O
In,O
addition,O
",",O
if,O
these,O
transactional,O
costs,O
were,O
included,O
",",O
your,O
costs,O
would,O
have,O
been,O
higher,O
.,O
,O
A,O
description,O
of,O
the,O
Master,O
Fund,O
s,O
proxy,O
voting,O
policies,O
and,O
procedures,O
related,O
to,O
portfolio,O
securities,O
is,O
available,O
without,O
charge,O
",",O
upon,O
request,O
",",O
by,O
calling,O
the,O
Fund,O
at,O
(,O
212,O
),O
883-2750,O
or,O
on,O
the,O
Securities,I-GOVERNMENT
&,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
s,O
website,O
at,O
http,O
:,O
//www.sec.gov,O
.,O
,O
Information,O
regarding,O
how,O
the,O
Master,O
Fund,O
voted,O
proxies,O
for,O
portfolio,O
securities,O
",",O
if,O
applicable,O
",",O
during,O
the,O
most,O
recent,O
12-month,O
period,O
ended,O
June,O
30,O
",",O
is,O
also,O
available,O
",",O
without,O
charge,O
and,O
upon,O
request,O
by,O
calling,O
the,O
Master,O
Fund,O
at,O
(,O
212,O
),O
883-2750,O
or,O
by,O
accessing,O
the,O
Master,O
Fund,O
s,O
Form,I-MISCELLANEOUS
N-PX,I-MISCELLANEOUS
on,O
the,O
Commission,O
s,O
website,O
at,O
http,O
:,O
//www.sec.gov,O
.,O
,O
The,O
Master,O
Fund,O
will,O
file,O
its,O
complete,O
schedule,O
of,O
portfolio,O
holdings,O
with,O
the,O
Securities,I-GOVERNMENT
&,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
for,O
the,O
first,O
and,O
third,O
quarters,O
of,O
each,O
fiscal,O
year,O
on,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
.,O
,O
The,O
Master,O
Fund,O
s,O
Forms,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
are,O
available,O
on,O
the,O
SEC,I-GOVERNMENT
website,O
at,O
http,O
:,O
//www.sec.gov,O
.,O
,O
The,O
Master,O
Fund,O
s,O
Forms,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
may,O
also,O
be,O
reviewed,O
and,O
copied,O
at,O
the,O
Commission,O
s,O
Public,I-LOCATION
Reference,I-LOCATION
Room,I-LOCATION
in,O
Washington,I-LOCATION
",",I-LOCATION
DC,I-LOCATION
;,O
information,O
on,O
the,O
operation,O
of,O
the,O
Public,I-LOCATION
Reference,I-LOCATION
Room,I-LOCATION
may,O
be,O
obtained,O
by,O
calling,O
(,O
800,O
),O
SEC-0330,O
.,O
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
OFFICERS,O
AND,O
DIRECTORS,O
Unless,O
otherwise,O
noted,O
",",O
the,O
address,O
of,O
all,O
Officers,O
and,O
Directors,O
is,O
c/o,O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
230,O
Park,I-LOCATION
Avenue,I-LOCATION
",",O
New,I-LOCATION
York,I-LOCATION
",",O
NY,I-LOCATION
10169,O
.,O
,O
Each,O
Director,O
serves,O
until,O
their,O
retirement,O
",",O
resignation,O
",",O
death,O
or,O
removal,O
.,O
,O
Additional,O
information,O
about,O
the,O
Directors,O
is,O
available,O
in,O
the,O
Fund,O
s,O
Statement,O
of,O
Additional,O
Information,O
dated,O
February,O
28,O
",",O
2009,O
",",O
which,O
is,O
available,O
from,O
the,O
Fund,O
at,O
no,O
charge,O
by,O
calling,O
Jerry,I-PERSON
Cammarata,I-PERSON
at,O
(,O
212,O
),O
883-2750,O
.,O
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
ANNUAL,O
REPORT,O
2009,O
|,O
CLARION,I-BUSINESS
VALUE,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Code,O
of,O
Ethics,O
.,O
,O
(,O
a,O
),O
The,O
registrant,O
has,O
adopted,O
a,O
code,O
of,O
ethics,O
that,O
applies,O
to,O
the,O
registrant,O
s,O
President,O
and,O
Chief,O
Financial,O
Officer,O
.,O
,O
(,O
b,O
),O
Not,O
applicable,O
.,O
,O
(,O
c,O
),O
The,O
registrant,O
has,O
not,O
amended,O
its,O
Code,O
of,O
Ethics,O
during,O
the,O
period,O
covered,O
by,O
the,O
shareholder,O
report,O
presented,O
in,O
Item,O
1,O
hereto,O
.,O
,O
(,O
d,O
),O
The,O
registrant,O
has,O
not,O
granted,O
a,O
waiver,O
or,O
an,O
implicit,O
waiver,O
from,O
a,O
provision,O
of,O
its,O
Code,O
of,O
Ethics,O
.,O
,O
(,O
e,O
),O
Not,O
applicable,O
.,O
,O
(,O
f,O
),O
(,O
1,O
),O
The,O
registrant,O
s,O
Code,O
of,O
Ethics,O
is,O
attached,O
hereto,O
as,O
exhibit,O
12,O
(,O
a,O
),O
(,O
1,O
),O
.,O
,O
(,O
2,O
),O
,O
(,O
3,O
),O
,O
Item,O
3,O
.,O
,O
Audit,O
Committee,O
Financial,O
Expert,O
.,O
,O
The,O
registrant,O
s,O
Board,O
of,O
Directors,O
(,O
Board,O
),O
has,O
determined,O
that,O
the,O
registrant,O
has,O
at,O
least,O
one,O
Audit,O
Committee,O
Financial,O
Expert,O
(,O
ACFE,O
),O
serving,O
on,O
the,O
registrant,O
s,O
Audit,O
Committee,O
.,O
,O
The,O
Board,O
determined,O
that,O
S.,I-PERSON
Leland,I-PERSON
Dill,I-PERSON
qualifies,O
as,O
ACFE,O
and,O
is,O
independent,O
(,O
as,O
each,O
item,O
defined,O
in,O
Item,O
3,O
of,O
Form,I-MISCELLANEOUS
N-CSR,I-MISCELLANEOUS
),O
.,O
,O
A,O
person,O
who,O
is,O
determined,O
to,O
be,O
an,O
ACFE,O
will,O
not,O
be,O
deemed,O
an,O
expert,O
for,O
any,O
purpose,O
",",O
including,O
without,O
limitation,O
for,O
purposes,O
of,O
Section,O
11,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
as,O
a,O
result,O
of,O
being,O
designated,O
or,O
identified,O
as,O
an,O
ACFE,O
pursuant,O
to,O
this,O
Item,O
.,O
,O
The,O
designation,O
or,O
identification,O
of,O
a,O
person,O
as,O
an,O
ACFE,O
pursuant,O
to,O
this,O
Item,O
does,O
not,O
impose,O
on,O
such,O
person,O
any,O
duties,O
",",O
obligations,O
",",O
or,O
liability,O
that,O
are,O
greater,O
than,O
the,O
duties,O
",",O
obligations,O
",",O
and,O
liability,O
imposed,O
on,O
such,O
person,O
as,O
a,O
member,O
of,O
the,O
Audit,O
Committee,O
and,O
Board,O
in,O
the,O
absence,O
of,O
such,O
designation,O
or,O
identification,O
.,O
,O
The,O
designation,O
or,O
identification,O
of,O
a,O
person,O
as,O
an,O
ACFE,O
pursuant,O
to,O
this,O
Item,O
does,O
not,O
affect,O
the,O
duties,O
",",O
obligations,O
",",O
or,O
liability,O
of,O
any,O
other,O
member,O
of,O
the,O
Audit,O
Committee,O
or,O
Board,O
.,O
,O
Principal,O
Accountant,O
Fees,O
and,O
Services,O
.,O
,O
Audit,O
Fees,O
:,O
the,O
aggregate,O
fees,O
billed,O
in,O
each,O
of,O
the,O
last,O
two,O
fiscal,O
years,O
for,O
professional,O
services,O
rendered,O
by,O
the,O
principal,O
accountant,O
for,O
the,O
audit,O
of,O
the,O
registrant,O
s,O
annual,O
financial,O
statements,O
or,O
services,O
that,O
are,O
normally,O
provided,O
by,O
the,O
accountant,O
in,O
connection,O
with,O
statutory,O
and,O
regulatory,O
filings,O
or,O
engagements,O
for,O
those,O
fiscal,O
years,O
are,O
as,O
follows,O
:,O
,O
Audit-Related,O
Fees,O
:,O
the,O
aggregate,O
fees,O
billed,O
in,O
each,O
of,O
the,O
last,O
two,O
fiscal,O
years,O
for,O
assurance,O
and,O
related,O
services,O
by,O
the,O
principal,O
accountant,O
that,O
are,O
reasonably,O
related,O
to,O
the,O
performance,O
of,O
the,O
audit,O
of,O
the,O
registrant,O
s,O
financial,O
statements,O
and,O
are,O
not,O
reported,O
under,O
paragraph,O
(,O
a,O
),O
of,O
this,O
item,O
are,O
as,O
follows,O
:,O
,O
Tax,O
Fees,O
",",O
the,O
aggregate,O
fees,O
billed,O
in,O
each,O
of,O
the,O
last,O
two,O
fiscal,O
years,O
for,O
professional,O
services,O
rendered,O
by,O
the,O
principal,O
accountant,O
for,O
tax,O
compliance,O
",",O
tax,O
advice,O
",",O
and,O
tax,O
planning,O
are,O
as,O
follows,O
:,O
,O
All,O
Other,O
Fees,O
",",O
the,O
aggregate,O
fees,O
billed,O
in,O
each,O
of,O
the,O
last,O
two,O
fiscal,O
years,O
for,O
products,O
and,O
services,O
provided,O
by,O
the,O
principal,O
accountant,O
",",O
other,O
than,O
the,O
services,O
reported,O
in,O
paragraphs,O
(,O
a,O
),O
and,O
(,O
c,O
),O
of,O
this,O
Item,O
are,O
as,O
follows,O
:,O
,O
(,O
e,O
),O
Audit,O
Committee,O
Pre-Approval,O
Policies,O
and,O
Procedures,O
.,O
,O
(,O
i,O
),O
Per,O
Rule,O
2-01,O
(,O
c,O
),O
(,O
7,O
),O
(,O
A,O
),O
",",O
the,O
audit,O
committee,O
pre-approves,O
all,O
of,O
the,O
Audit,O
",",O
Audit-Related,O
",",O
Tax,O
and,O
Other,O
Fees,O
of,O
the,O
registrant,O
.,O
,O
(,O
ii,O
),O
100,O
%,O
of,O
services,O
described,O
in,O
each,O
of,O
Items,O
4,O
(,O
b,O
),O
through,O
(,O
d,O
),O
were,O
approved,O
by,O
the,O
Audit,O
Committee,O
pursuant,O
to,O
paragraph,O
(,O
c,O
),O
(,O
7,O
),O
(,O
i,O
),O
(,O
C,O
),O
of,O
Rule,O
2-01,O
of,O
Regulation,I-LEGISLATION/ACT
S-X,I-LEGISLATION/ACT
.,O
,O
(,O
f,O
),O
The,O
percentage,O
of,O
hours,O
expended,O
on,O
the,O
principal,O
accountant,O
s,O
engagement,O
to,O
audit,O
the,O
registrant,O
s,O
financial,O
statements,O
for,O
the,O
most,O
recent,O
fiscal,O
year,O
attributable,O
to,O
work,O
performed,O
by,O
persons,O
other,O
than,O
the,O
principal,O
accountant,O
s,O
full-time,O
",",O
permanent,O
employees,O
was,O
zero,O
.,O
,O
(,O
g,O
),O
The,O
aggregate,O
non-audit,O
fees,O
billed,O
by,O
the,O
Principal,O
s,O
accountant,O
for,O
services,O
rendered,O
to,O
the,O
registrant,O
",",O
the,O
registrant,O
s,O
adviser,O
or,O
any,O
entity,O
controlling,O
",",O
controlled,O
by,O
",",O
or,O
under,O
common,O
control,O
with,O
the,O
investment,O
adviser,O
that,O
provides,O
ongoing,O
services,O
to,O
the,O
registrant,O
(,O
except,O
for,O
any,O
sub-adviser,O
whose,O
role,O
is,O
primarily,O
portfolio,O
management,O
and,O
is,O
subcontracted,O
with,O
or,O
overseen,O
by,O
another,O
investment,O
adviser,O
),O
that,O
directly,O
impacted,O
the,O
registrant,O
for,O
the,O
period,O
from,O
November,O
1,O
",",O
2008,O
to,O
October,O
31,O
",",O
2009,O
were,O
$,O
0,O
.,O
,O
(,O
h,O
),O
There,O
were,O
no,O
non-audit,O
services,O
rendered,O
by,O
the,O
principal,O
accountant,O
to,O
the,O
registrant,O
s,O
investment,O
adviser,O
or,O
entity,O
controlling,O
",",O
controlled,O
by,O
",",O
or,O
under,O
common,O
control,O
with,O
the,O
investment,O
adviser,O
that,O
provides,O
ongoing,O
services,O
to,O
the,O
registrant,O
that,O
were,O
not,O
pre-approved,O
pursuant,O
to,O
paragraph,O
(,O
c,O
),O
(,O
7,O
),O
(,O
ii,O
),O
of,O
Rule,O
2-01,O
of,O
Regulation,I-LEGISLATION/ACT
S-X,I-LEGISLATION/ACT
.,O
,O
Audit,O
Committee,O
of,O
Listed,O
Registrants,O
.,O
,O
Schedule,O
of,O
Investments,O
.,O
,O
The,O
Schedule,O
of,O
Investments,O
is,O
included,O
as,O
part,O
of,O
the,O
report,O
to,O
shareholders,O
filed,O
under,O
Item,O
1,O
of,O
this,O
Form,I-MISCELLANEOUS
N-CSR,I-MISCELLANEOUS
.,O
,O
Disclosure,O
of,O
Proxy,O
Voting,O
Policies,O
and,O
Procedures,O
for,O
Closed-End,O
Management,O
Investment,O
Companies,O
.,O
,O
Portfolio,O
Managers,O
of,O
Closed-End,O
Management,O
Investment,O
Companies,O
.,O
,O
Purchases,O
of,O
Equity,O
Securities,O
by,O
Closed-End,O
Management,O
Investment,O
Company,O
and,O
Affiliated,O
Purchasers,O
.,O
,O
Submission,O
of,O
Matters,O
to,O
a,O
Vote,O
of,O
Security,O
Holders,O
.,O
,O
There,O
were,O
no,O
material,O
changes,O
to,O
the,O
procedures,O
by,O
which,O
shareholders,O
may,O
recommend,O
nominees,O
to,O
the,O
registrant,O
s,O
board,O
of,O
directors,O
since,O
the,O
registrant,O
s,O
most,O
recent,O
disclosure,O
in,O
response,O
to,O
the,O
requirements,O
of,O
Item,O
7,O
(,O
d,O
),O
(,O
ii,O
),O
(,O
G,O
),O
of,O
Schedule,I-MISCELLANEOUS
14A,I-MISCELLANEOUS
or,O
this,O
Item,O
.,O
,O
Controls,O
and,O
Procedures,O
.,O
,O
(,O
a,O
),O
Based,O
on,O
their,O
evaluation,O
of,O
the,O
registrant,O
s,O
disclosure,O
controls,O
and,O
procedures,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
d,O
),O
under,O
the,O
1940,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
as,O
of,O
a,O
date,O
within,O
90,O
days,O
of,O
the,O
filing,O
date,O
of,O
the,O
report,O
",",O
the,O
President,O
(,O
principal,O
executive,O
officer,O
),O
and,O
the,O
Chief,O
Financial,O
Officer,O
(,O
principal,O
financial,O
officer,O
),O
of,O
the,O
registrant,O
",",O
concluded,O
that,O
they,O
were,O
not,O
aware,O
of,O
any,O
material,O
deficiencies,O
in,O
the,O
design,O
or,O
operation,O
of,O
the,O
registrant,O
s,O
disclosure,O
controls,O
and,O
procedures,O
and,O
that,O
these,O
controls,O
and,O
procedures,O
are,O
effective,O
.,O
,O
(,O
b,O
),O
There,O
was,O
no,O
change,O
in,O
the,O
registrant,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
d,O
),O
under,O
the,O
1940,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
over,O
the,O
fiscal,O
quarter,O
of,O
the,O
period,O
covered,O
by,O
this,O
report,O
that,O
has,O
materially,O
affected,O
",",O
or,O
is,O
reasonably,O
likely,O
to,O
materially,O
affect,O
",",O
the,O
registrant,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
(,O
a,O
),O
(,O
1,O
),O
Code,O
of,O
Ethics,O
.,O
,O
(,O
a,O
),O
(,O
2,O
),O
Certifications,O
of,O
the,O
registrant,O
s,O
President,O
and,O
Chief,O
Financial,O
Officer,O
pursuant,O
to,O
Section,O
302,O
of,O
the,O
Sarbanes-Oxley,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
2002,I-LEGISLATION/ACT
(,O
SOX,I-LEGISLATION/ACT
),O
are,O
attached,O
as,O
Exhibit,O
99.CERT,O
.,O
,O
(,O
b,O
),O
Certifications,O
of,O
the,O
registrant,O
s,O
President,O
and,O
Chief,O
Financial,O
Officer,O
pursuant,O
to,O
Section,O
906,O
of,O
SOX,I-LEGISLATION/ACT
are,O
attached,O
as,O
Exhibit,O
99.906CERT,O
.,O
,O
SIGNATURES,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
and,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
",",O
the,O
registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
.,O
,O
(,O
Registrant,O
),O
Clarion,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
and,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
",",O
this,O
report,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
on,O
behalf,O
of,O
the,O
registrant,O
and,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
.,O
,O
-DOCSTART-,O
,O
If,O
Not,O
Covered,O
is,O
inserted,O
below,O
opposite,O
any,O
specified,O
INSURING,O
CLAUSE,O
",",O
such,O
INSURING,O
CLAUSE,O
and,O
any,O
other,O
reference,O
shall,O
be,O
deemed,O
to,O
be,O
deleted,O
.,O
,O
There,O
shall,O
be,O
no,O
deductible,O
applicable,O
to,O
any,O
loss,O
under,O
INSURING,O
CLAUSE,O
1.,O
sustained,O
by,O
any,O
Investment,O
Company,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
THE,O
COMPANY,O
has,O
caused,O
this,O
Bond,O
to,O
be,O
signed,O
by,O
its,O
authorized,O
officers,O
",",O
but,O
it,O
shall,O
not,O
be,O
valid,O
unless,O
also,O
signed,O
by,O
an,O
authorized,O
representative,O
of,O
the,O
Company,O
.,O
,O
The,O
COMPANY,O
",",O
in,O
consideration,O
of,O
payment,O
of,O
the,O
required,O
premium,O
",",O
and,O
in,O
reliance,O
on,O
the,O
APPLICATION,O
and,O
all,O
other,O
statements,O
made,O
and,O
information,O
furnished,O
to,O
the,O
COMPANY,O
by,O
the,O
ASSURED,O
",",O
and,O
subject,O
to,O
the,O
DECLARATIONS,O
made,O
a,O
part,O
of,O
this,O
Bond,O
and,O
to,O
all,O
other,O
terms,O
and,O
conditions,O
of,O
this,O
Bond,O
",",O
agrees,O
to,O
pay,O
the,O
ASSURED,O
for,O
:,O
,O
It,O
is,O
agreed,O
that,O
the,O
NAME,O
OF,O
ASSURED,O
in,O
the,O
DECLARATIONS,O
is,O
amended,O
to,O
read,O
as,O
follows,O
:,O
,O
BB,I-BUSINESS
&,I-BUSINESS
T,I-BUSINESS
INTERMEDIATE,I-BUSINESS
U.S.,I-BUSINESS
,O
BB,I-BUSINESS
&,I-BUSINESS
T,I-BUSINESS
SHORT,I-BUSINESS
U.S.,I-BUSINESS
,O
This,O
Endorsement,O
applies,O
to,O
loss,O
discovered,O
after,O
12:01,O
a.m.,O
on,O
December,O
1,O
",",O
2009,O
.,O
,O
ALL,O
OTHER,O
TERMS,O
AND,O
CONDITIONS,O
OF,O
THIS,O
BOND,O
REMAIN,O
UNCHANGED,O
.,O
,O
In,O
consideration,O
of,O
the,O
premium,O
charged,O
",",O
it,O
is,O
agreed,O
that,O
this,O
Bond,O
is,O
amended,O
as,O
follows,O
:,O
,O
The,O
title,O
and,O
any,O
headings,O
in,O
this,O
endorsement/rider,O
are,O
solely,O
for,O
convenience,O
and,O
form,O
no,O
part,O
of,O
the,O
terms,O
and,O
conditions,O
of,O
coverage,O
.,O
,O
All,O
other,O
terms,O
",",O
conditions,O
and,O
limitations,O
of,O
this,O
Bond,O
shall,O
remain,O
unchanged,O
.,O
,O
17-02-2437,O
(,O
12/2006,O
),O
rev,O
.,O
,O
It,O
is,O
agreed,O
that,O
this,O
insurance,O
does,O
not,O
apply,O
to,O
the,O
extent,O
that,O
trade,O
or,O
economic,O
sanctions,O
or,O
other,O
laws,O
or,O
regulations,O
prohibit,O
the,O
coverage,O
provided,O
by,O
this,O
insurance,O
.,O
,O
ALL,O
OTHER,O
TERMS,O
AND,O
CONDITIONS,O
OF,O
THIS,O
BOND,O
REMAIN,O
UNCHANGED,O
.,O
,O
Authorized,O
Representative,O
Form,O
14-02-9228,O
(,O
Ed,O
.,O
,O
It,O
is,O
agreed,O
that,O
this,O
Bond,O
is,O
amended,O
as,O
follows,O
:,O
,O
If,O
this,O
Bond,O
has,O
been,O
in,O
effect,O
for,O
sixty,O
(,O
60,O
),O
days,O
or,O
less,O
",",O
and,O
it,O
is,O
not,O
a,O
renewal,O
Bond,O
",",O
the,O
COMPANY,O
may,O
terminate,O
for,O
any,O
reason,O
by,O
providing,O
written,O
notice,O
of,O
termination,O
at,O
least,O
sixty,O
(,O
60,O
),O
days,O
before,O
the,O
effective,O
date,O
of,O
termination,O
.,O
,O
DECLARATIONS,O
of,O
this,O
Bond,O
.,O
,O
If,O
this,O
Bond,O
is,O
cancelled,O
for,O
nonpayment,O
of,O
premium,O
",",O
the,O
COMPANY,O
will,O
mail,O
or,O
deliver,O
",",O
by,O
certified,O
mail,O
",",O
return,O
receipt,O
provided,O
by,O
the,O
United,I-GOVERNMENT
States,I-GOVERNMENT
Postal,I-GOVERNMENT
Service,I-GOVERNMENT
",",O
a,O
written,O
notice,O
at,O
least,O
thirty,O
(,O
30,O
),O
days,O
before,O
the,O
effective,O
date,O
of,O
cancellation,O
.,O
,O
The,O
cancellation,O
notice,O
shall,O
contain,O
information,O
regarding,O
the,O
amount,O
of,O
premium,O
due,O
and,O
the,O
due,O
date,O
",",O
and,O
shall,O
state,O
the,O
effect,O
of,O
nonpayment,O
by,O
the,O
due,O
date,O
.,O
,O
Cancellation,O
shall,O
not,O
be,O
effective,O
if,O
payment,O
of,O
the,O
amount,O
due,O
is,O
made,O
prior,O
to,O
the,O
effective,O
date,O
of,O
cancellation,O
.,O
,O
All,O
notice,O
of,O
cancellation,O
shall,O
state,O
the,O
reason,O
(,O
s,O
),O
for,O
cancellation,O
.,O
,O
There,O
is,O
no,O
liability,O
on,O
the,O
part,O
of,O
",",O
and,O
no,O
cause,O
of,O
action,O
of,O
any,O
nature,O
shall,O
arise,O
against,O
",",O
the,O
COMPANY,O
",",O
its,O
authorized,O
representatives,O
",",O
its,O
employees,O
",",O
or,O
any,O
firm,O
",",O
person,O
or,O
corporation,O
furnishing,O
to,O
the,O
COMPANY,O
",",O
information,O
relating,O
to,O
the,O
reasons,O
for,O
cancellation,O
or,O
nonrenewal,O
",",O
for,O
any,O
statement,O
made,O
by,O
them,O
in,O
complying,O
or,O
enabling,O
the,O
COMPANY,O
to,O
comply,O
with,O
this,O
Section,O
",",O
for,O
the,O
provision,O
of,O
information,O
pertaining,O
thereto,O
",",O
or,O
for,O
statements,O
made,O
or,O
evidence,O
submitted,O
at,O
any,O
hearings,O
conducted,O
in,O
connection,O
therewith,O
",",O
if,O
such,O
information,O
was,O
provided,O
in,O
good,O
faith,O
and,O
without,O
malice,O
.,O
,O
If,O
the,O
COMPANY,O
elects,O
not,O
to,O
renew,O
this,O
Bond,O
",",O
the,O
COMPANY,O
shall,O
mail,O
or,O
deliver,O
written,O
notice,O
",",O
by,O
certified,O
mail,O
",",O
return,O
receipt,O
",",O
provided,O
by,O
the,O
United,I-GOVERNMENT
States,I-GOVERNMENT
Postal,I-GOVERNMENT
Service,I-GOVERNMENT
",",O
to,O
the,O
ASSURED,O
",",O
at,O
his,O
last,O
known,O
address,O
",",O
at,O
least,O
sixty,O
(,O
60,O
),O
days,O
before,O
the,O
expiration,O
date,O
or,O
before,O
the,O
anniversary,O
date,O
",",O
if,O
this,O
Bond,O
has,O
been,O
written,O
for,O
a,O
term,O
of,O
more,O
than,O
one,O
(,O
1,O
),O
year,O
.,O
,O
Such,O
notice,O
shall,O
also,O
be,O
mailed,O
to,O
the,O
ASSURED,O
S,O
agent,O
or,O
broker,O
",",O
if,O
any,O
.,O
,O
Such,O
notice,O
shall,O
contain,O
all,O
of,O
the,O
following,O
:,O
,O
Notice,O
of,O
nonrenewal,O
shall,O
not,O
be,O
required,O
if,O
the,O
COMPANY,O
or,O
a,O
COMPANY,O
within,O
the,O
same,O
insurance,O
group,O
has,O
offered,O
to,O
issue,O
a,O
renewal,O
Bond,O
",",O
the,O
ASSURED,O
has,O
obtained,O
replacement,O
coverage,O
or,O
has,O
agreed,O
in,O
writing,O
to,O
obtain,O
replacement,O
coverage,O
",",O
the,O
ASSURED,O
has,O
requested,O
or,O
agreed,O
to,O
nonrenewal,O
",",O
or,O
the,O
Bond,O
is,O
expressly,O
designated,O
as,O
nonrenewable,O
.,O
,O
This,O
Endorsement,O
applies,O
to,O
loss,O
discovered,O
after,O
12:01,O
a.m.,O
on,O
December,O
1,O
",",O
2009,O
.,O
,O
ALL,O
OTHER,O
TERMS,O
AND,O
CONDITIONS,O
OF,O
THIS,O
BOND,O
REMAIN,O
UNCHANGED,O
.,O
,O
If,O
an,O
increase,O
in,O
bonding,O
limits,O
is,O
required,O
pursuant,O
to,O
rule,O
17g-1,O
of,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
(,O
the,O
Act,O
),O
",",O
due,O
to,O
:,O
,O
then,O
the,O
minimum,O
required,O
increase,O
in,O
limits,O
shall,O
take,O
place,O
automatically,O
without,O
payment,O
of,O
additional,O
premium,O
for,O
the,O
remainder,O
of,O
the,O
BOND,O
PERIOD,O
.,O
,O
The,O
title,O
and,O
any,O
headings,O
in,O
this,O
endorsement/rider,O
are,O
solely,O
for,O
convenience,O
and,O
form,O
no,O
part,O
of,O
the,O
terms,O
and,O
conditions,O
of,O
coverage,O
.,O
,O
All,O
other,O
terms,O
",",O
conditions,O
and,O
limitations,O
of,O
this,O
Bond,O
shall,O
remain,O
unchanged,O
.,O
,O
Your,O
company,O
is,O
now,O
required,O
to,O
file,O
an,O
electronic,O
copy,O
of,O
your,O
fidelity,O
insurance,O
coverage,O
(,O
Chubb,I-BUSINESS
s,O
ICAP,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
policy,O
),O
to,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
SEC,I-GOVERNMENT
),O
",",O
according,O
to,O
rules,O
adopted,O
by,O
the,O
SEC,I-GOVERNMENT
on,O
June,O
12,O
",",O
2006,O
.,O
,O
Chubb,I-BUSINESS
is,O
in,O
the,O
process,O
of,O
providing,O
your,O
agent/broker,O
with,O
an,O
electronic,O
copy,O
of,O
your,O
insurance,O
policy,O
as,O
well,O
as,O
instructions,O
on,O
how,O
to,O
submit,O
this,O
proof,O
of,O
fidelity,O
insurance,O
coverage,O
to,O
the,O
SEC,I-GOVERNMENT
.,O
,O
You,O
can,O
expect,O
to,O
receive,O
this,O
information,O
from,O
your,O
agent/broker,O
shortly,O
.,O
,O
The,O
electronic,O
copy,O
of,O
your,O
policy,O
is,O
provided,O
by,O
Chubb,I-BUSINESS
solely,O
as,O
a,O
convenience,O
and,O
does,O
not,O
affect,O
the,O
terms,O
and,O
conditions,O
of,O
coverage,O
as,O
set,O
forth,O
in,O
the,O
paper,O
policy,O
you,O
receive,O
by,O
mail,O
.,O
,O
The,O
terms,O
and,O
conditions,O
of,O
the,O
policy,O
mailed,O
to,O
you,O
",",O
which,O
are,O
the,O
same,O
as,O
those,O
set,O
forth,O
in,O
the,O
electronic,O
copy,O
",",O
constitute,O
the,O
entire,O
agreement,O
between,O
your,O
company,O
and,O
Chubb,I-BUSINESS
.,O
,O
If,O
you,O
have,O
any,O
questions,O
",",O
please,O
contact,O
your,O
agent,O
or,O
broker,O
.,O
,O
Form,O
14-02-12160,O
(,O
ed,O
.,O
,O
All,O
of,O
the,O
members,O
of,O
the,O
Chubb,O
Group,O
of,O
Insurance,O
companies,O
doing,O
business,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
(,O
hereinafter,O
Chubb,I-BUSINESS
),O
distribute,O
their,O
products,O
through,O
licensed,O
insurance,O
brokers,O
and,O
agents,O
(,O
producers,O
),O
.,O
,O
Detailed,O
information,O
regarding,O
the,O
types,O
of,O
compensation,O
paid,O
by,O
Chubb,I-BUSINESS
to,O
producers,O
on,O
US,I-LOCATION
insurance,O
transactions,O
is,O
available,O
under,O
the,O
Producer,O
Compensation,O
link,O
located,O
at,O
the,O
bottom,O
of,O
the,O
page,O
at,O
www.chubb.com,O
",",O
or,O
by,O
calling,O
1-866-588-9478,O
.,O
,O
Additional,O
information,O
may,O
be,O
available,O
from,O
your,O
producer,O
.,O
,O
Thank,O
you,O
for,O
choosing,O
Chubb,I-BUSINESS
.,O
,O
You,O
are,O
hereby,O
notified,O
that,O
",",O
under,O
the,O
Terrorism,I-LEGISLATION/ACT
Risk,I-LEGISLATION/ACT
Insurance,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
the,O
Act,O
),O
",",O
effective,O
December,O
26,O
",",O
2007,O
",",O
this,O
policy,O
makes,O
available,O
to,O
you,O
insurance,O
for,O
losses,O
arising,O
out,O
of,O
certain,O
acts,O
of,O
terrorism,O
.,O
,O
Terrorism,O
is,O
defined,O
as,O
any,O
act,O
certified,O
by,O
the,O
Secretary,O
of,O
the,O
Treasury,I-GOVERNMENT
",",O
in,O
concurrence,O
with,O
the,O
Secretary,O
of,O
State,O
and,O
the,O
Attorney,O
General,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
to,O
be,O
an,O
act,O
of,O
terrorism,O
;,O
to,O
be,O
a,O
violent,O
act,O
or,O
an,O
act,O
that,O
is,O
dangerous,O
to,O
human,O
life,O
",",O
property,O
or,O
infrastructure,O
;,O
to,O
have,O
resulted,O
in,O
damage,O
within,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
or,O
outside,O
the,O
United,I-LOCATION
States,I-LOCATION
in,O
the,O
case,O
of,O
an,O
air,O
carrier,O
or,O
vessel,O
or,O
the,O
premises,O
of,O
a,O
United,I-GOVERNMENT
States,I-GOVERNMENT
Mission,I-GOVERNMENT
;,O
and,O
to,O
have,O
been,O
committed,O
by,O
an,O
individual,O
or,O
individuals,O
as,O
part,O
of,O
an,O
effort,O
to,O
coerce,O
the,O
civilian,O
population,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
or,O
to,O
influence,O
the,O
policy,O
or,O
affect,O
the,O
conduct,O
of,O
the,O
United,I-GOVERNMENT
States,I-GOVERNMENT
Government,I-GOVERNMENT
by,O
coercion,O
.,O
,O
You,O
should,O
know,O
that,O
the,O
insurance,O
provided,O
by,O
your,O
policy,O
for,O
losses,O
caused,O
by,O
acts,O
of,O
terrorism,O
is,O
partially,O
reimbursed,O
by,O
the,O
United,I-LOCATION
States,I-LOCATION
under,O
the,O
formula,O
set,O
forth,O
in,O
the,O
Act,O
.,O
,O
Under,O
this,O
formula,O
",",O
the,O
United,I-LOCATION
States,I-LOCATION
pays,O
85,O
%,O
of,O
covered,O
terrorism,O
losses,O
that,O
exceed,O
the,O
statutorily,O
established,O
deductible,O
to,O
be,O
paid,O
by,O
the,O
insurance,O
company,O
providing,O
the,O
coverage,O
.,O
,O
However,O
",",O
if,O
aggregate,O
insured,O
losses,O
attributable,O
to,O
terrorist,O
acts,O
certified,O
under,O
the,O
Act,O
exceed,O
$,O
100,O
billion,O
in,O
a,O
Program,O
Year,O
(,O
January,O
1,O
through,O
December,O
31,O
),O
",",O
the,O
Treasury,I-GOVERNMENT
shall,O
not,O
make,O
any,O
payment,O
for,O
any,O
portion,O
of,O
the,O
amount,O
of,O
such,O
losses,O
that,O
exceeds,O
$,O
100,O
billion,O
.,O
,O
If,O
aggregate,O
insured,O
losses,O
attributable,O
to,O
terrorist,O
acts,O
certified,O
under,O
the,O
Act,O
exceed,O
$,O
100,O
billion,O
in,O
a,O
Program,O
Year,O
(,O
January,O
1,O
through,O
December,O
31,O
),O
and,O
we,O
have,O
met,O
our,O
insurer,O
deductible,O
under,O
the,O
Act,O
",",O
we,O
shall,O
not,O
be,O
liable,O
for,O
the,O
payment,O
of,O
any,O
portion,O
of,O
the,O
amount,O
of,O
such,O
losses,O
that,O
exceeds,O
$,O
100,O
billion,O
",",O
and,O
in,O
such,O
case,O
insured,O
losses,O
up,O
to,O
that,O
amount,O
are,O
subject,O
to,O
pro,O
rata,O
allocation,O
in,O
accordance,O
with,O
procedures,O
established,O
by,O
the,O
Secretary,O
of,O
the,O
Treasury,I-GOVERNMENT
.,O
,O
The,O
portion,O
of,O
your,O
policy,O
s,O
annual,O
premium,O
that,O
is,O
attributable,O
to,O
insurance,O
for,O
such,O
acts,O
of,O
terrorism,O
is,O
:,O
$,O
-0-,O
.,O
,O
If,O
you,O
have,O
any,O
questions,O
about,O
this,O
notice,O
",",O
please,O
contact,O
your,O
agent,O
or,O
broker,O
.,O
,O
THIS,O
AGREEMENT,O
made,O
as,O
of,O
May,O
1,O
",",O
2005,O
",",O
and,O
as,O
amended,O
and,O
restated,O
as,O
of,O
June,O
2,O
",",O
2007,O
",",O
by,O
and,O
between,O
BB,I-BUSINESS
&,I-BUSINESS
T,I-BUSINESS
Funds,I-BUSINESS
and,O
BB,I-BUSINESS
&,I-BUSINESS
T,I-BUSINESS
Variable,I-BUSINESS
Insurance,I-BUSINESS
Funds,I-BUSINESS
(,O
each,O
a,O
Trust,O
),O
",",O
each,O
on,O
behalf,O
of,O
its,O
respective,O
constituent,O
series,O
(,O
each,O
a,O
Fund,O
),O
.,O
,O
WHEREAS,O
",",O
each,O
Trust,O
is,O
a,O
management,O
investment,O
company,O
registered,O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
(,O
the,O
Act,O
),O
;,O
,O
WHEREAS,O
",",O
each,O
Trust,O
is,O
named,O
as,O
an,O
insured,O
under,O
a,O
joint,O
fidelity,O
bond,O
pursuant,O
to,O
Rule,O
17g-1,O
under,O
the,O
Act,O
(,O
the,O
Joint,O
Insured,O
Bond,O
),O
issued,O
by,O
Chubb,I-BUSINESS
Custom,I-BUSINESS
Insurance,I-BUSINESS
Company,I-BUSINESS
(,O
the,O
Insurer,O
),O
;,O
,O
WHEREAS,O
",",O
each,O
Trust,O
and,O
its,O
respective,O
Trustees,O
and,O
officers,O
are,O
named,O
as,O
insureds,O
under,O
a,O
joint,O
directors,O
and,O
officers/errors,O
and,O
omissions,O
liability,O
insurance,O
policy,O
(,O
the,O
Joint,O
D,O
&,O
O,O
Policy,O
),O
pursuant,O
to,O
Rule,O
17d-1,O
under,O
the,O
Act,O
;,O
,O
WHEREAS,O
",",O
each,O
Trust,O
desires,O
to,O
establish,O
the,O
criteria,O
by,O
which,O
recoveries,O
under,O
the,O
Joint,O
Insured,O
Bond,O
",",O
the,O
Joint,O
D,O
&,O
O,O
Policy,O
and,O
the,O
Joint,O
IDL,O
Policy,O
shall,O
be,O
allocated,O
among,O
the,O
parties,O
;,O
,O
NOW,O
",",O
THEREFORE,O
",",O
it,O
is,O
agreed,O
as,O
follows,O
:,O
,O
In,O
the,O
event,O
that,O
the,O
claims,O
of,O
loss,O
of,O
the,O
Trusts,O
under,O
the,O
Joint,O
Insured,O
Bond,O
are,O
so,O
related,O
that,O
the,O
Insurer,O
is,O
entitled,O
to,O
assert,O
that,O
the,O
claims,O
must,O
be,O
aggregated,O
",",O
each,O
Trust,O
shall,O
receive,O
an,O
equitable,O
and,O
proportionate,O
share,O
of,O
the,O
recovery,O
",",O
but,O
at,O
least,O
equal,O
to,O
the,O
amount,O
it,O
would,O
have,O
received,O
had,O
it,O
provided,O
and,O
maintained,O
a,O
single,O
insured,O
bond,O
with,O
the,O
minimum,O
coverage,O
required,O
under,O
Rule,O
17g-1,O
under,O
the,O
Act,O
.,O
,O
The,O
proposed,O
premiums,O
for,O
the,O
Joint,O
D,O
&,O
O,O
Policy,O
and,O
the,O
Joint,O
IDL,O
Policy,O
are,O
to,O
be,O
allocated,O
to,O
each,O
Trust,O
",",O
based,O
upon,O
the,O
proportionate,O
share,O
of,O
the,O
sum,O
of,O
the,O
premiums,O
that,O
would,O
have,O
been,O
paid,O
if,O
such,O
insurance,O
coverage,O
were,O
purchased,O
separately,O
by,O
each,O
Trust,O
.,O
,O
aggregate,O
recovery,O
by,O
the,O
Trusts,O
under,O
the,O
Joint,O
D,O
&,O
O,O
Policy,O
for,O
any,O
related,O
claims,O
is,O
less,O
than,O
the,O
aggregate,O
loss,O
incurred,O
by,O
the,O
Trusts,O
that,O
gave,O
rise,O
to,O
such,O
claims,O
",",O
the,O
allocation,O
of,O
the,O
amounts,O
payable,O
under,O
the,O
Joint,O
D,O
&,O
O,O
Policy,O
shall,O
be,O
as,O
follows,O
:,O
(,O
i,O
),O
the,O
first,O
$,O
"3,750,000",O
shall,O
be,O
allocated,O
to,O
any,O
losses,O
of,O
a,O
Trust,O
and,O
its,O
Trustees,O
and,O
officers,O
based,O
on,O
the,O
order,O
in,O
which,O
claims,O
are,O
asserted,O
",",O
and,O
(,O
ii,O
),O
the,O
balance,O
shall,O
be,O
allocated,O
on,O
an,O
equitable,O
and,O
proportionate,O
basis,O
among,O
both,O
Trusts,O
and,O
their,O
Trustees,O
and,O
officers,O
.,O
,O
In,O
the,O
event,O
that,O
the,O
claims,O
of,O
loss,O
of,O
a,O
Trust,O
under,O
the,O
Joint,O
IDL,O
Policy,O
for,O
any,O
period,O
exceed,O
the,O
amount,O
of,O
insurance,O
coverage,O
available,O
to,O
pay,O
such,O
claims,O
",",O
or,O
in,O
the,O
event,O
that,O
the,O
aggregate,O
recovery,O
by,O
the,O
Trusts,O
under,O
the,O
Joint,O
IDL,O
Policy,O
for,O
any,O
related,O
claims,O
is,O
less,O
than,O
the,O
aggregate,O
loss,O
incurred,O
by,O
the,O
Trusts,O
that,O
gave,O
rise,O
to,O
such,O
claims,O
",",O
the,O
allocation,O
of,O
the,O
amounts,O
payable,O
under,O
the,O
Joint,O
IDL,O
Policy,O
shall,O
be,O
as,O
follows,O
:,O
(,O
i,O
),O
the,O
first,O
$,O
"1,875,000",O
shall,O
be,O
allocated,O
to,O
any,O
losses,O
of,O
a,O
Trust,O
and,O
its,O
Trustees,O
based,O
on,O
the,O
order,O
in,O
which,O
claims,O
are,O
asserted,O
",",O
and,O
(,O
ii,O
),O
the,O
balance,O
shall,O
be,O
allocated,O
on,O
an,O
equitable,O
and,O
proportionate,O
basis,O
among,O
both,O
Trusts,O
and,O
their,O
Trustees,O
.,O
,O
The,O
term,O
of,O
this,O
Agreement,O
shall,O
commence,O
on,O
the,O
date,O
hereof,O
and,O
shall,O
terminate,O
upon,O
the,O
termination,O
or,O
cancellation,O
of,O
the,O
Joint,O
Insured,O
Bond,O
",",O
Joint,O
D,O
&,O
O,O
Policy,O
and,O
Joint,O
IDL,O
Policy,O
",",O
or,O
upon,O
notice,O
from,O
any,O
party,O
hereto,O
.,O
,O
A,O
copy,O
of,O
the,O
Agreement,O
and,O
Declaration,O
of,O
Trust,O
",",O
as,O
from,O
time,O
to,O
time,O
amended,O
",",O
of,O
each,O
of,O
BB,I-BUSINESS
&,I-BUSINESS
T,I-BUSINESS
Funds,I-BUSINESS
and,O
BB,I-BUSINESS
&,I-BUSINESS
T,I-BUSINESS
Variable,I-BUSINESS
Insurance,I-BUSINESS
Funds,I-BUSINESS
is,O
on,O
file,O
with,O
the,O
Secretary,O
of,O
State,O
of,O
The,I-LOCATION
Commonwealth,I-LOCATION
of,I-LOCATION
Massachusetts,I-LOCATION
",",O
and,O
notice,O
is,O
hereby,O
given,O
that,O
this,O
Agreement,O
is,O
executed,O
on,O
behalf,O
of,O
the,O
trustees,O
of,O
each,O
Trust,O
as,O
trustees,O
and,O
not,O
individually,O
and,O
that,O
the,O
obligations,O
under,O
this,O
instrument,O
are,O
not,O
binding,O
upon,O
any,O
of,O
the,O
trustees,O
or,O
holders,O
of,O
shares,O
of,O
beneficial,O
interest,O
of,O
any,O
Fund,O
individually,O
",",O
but,O
are,O
binding,O
only,O
upon,O
the,O
respective,O
assets,O
and,O
property,O
of,O
each,O
Fund,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
the,O
parties,O
have,O
caused,O
this,O
Agreement,O
to,O
be,O
executed,O
by,O
their,O
officers,O
hereunto,O
duly,O
authorized,O
all,O
as,O
of,O
the,O
day,O
and,O
year,O
first,O
above,O
written,O
.,O
,O
I,O
",",O
Avery,I-PERSON
Maher,I-PERSON
",",O
Assistant,O
Secretary,O
of,O
BB,I-BUSINESS
&,I-BUSINESS
T,I-BUSINESS
Funds,I-BUSINESS
and,O
BB,I-BUSINESS
&,I-BUSINESS
T,I-BUSINESS
Variable,I-BUSINESS
Insurance,I-BUSINESS
Funds,I-BUSINESS
(,O
the,O
Trusts,O
),O
",",O
hereby,O
certify,O
that,O
the,O
following,O
votes,O
have,O
been,O
adopted,O
at,O
a,O
meeting,O
duly,O
called,O
and,O
held,O
on,O
November,O
17,O
",",O
2009,O
",",O
at,O
which,O
a,O
quorum,O
was,O
present,O
and,O
acting,O
throughout,O
:,O
,O
RESOLVED,O
",",O
that,O
the,O
Amended,O
and,O
Restated,O
Agreement,O
Among,O
Joint,O
Insureds,O
between,O
BB,I-BUSINESS
&,I-BUSINESS
T,I-BUSINESS
Funds,I-BUSINESS
and,O
BB,I-BUSINESS
&,I-BUSINESS
T,I-BUSINESS
Variable,I-BUSINESS
Insurance,I-BUSINESS
Funds,I-BUSINESS
",",O
in,O
the,O
form,O
presented,O
to,O
this,O
meeting,O
",",O
be,O
",",O
and,O
it,O
hereby,O
is,O
",",O
confirmed,O
",",O
ratified,O
and,O
approved,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
the,O
undersigned,O
has,O
hereunto,O
set,O
her,O
hand,O
this,O
5th,O
day,O
of,O
January,O
2010,O
.,O
,O
-DOCSTART-,O
,O
Columbia,I-BUSINESS
Funds,I-BUSINESS
Series,I-BUSINESS
Trust,I-BUSINESS
I,I-BUSINESS
The,O
interactive,O
data,O
file,O
included,O
as,O
an,O
exhibit,O
to,O
this,O
filing,O
relates,O
to,O
the,O
supplement,O
to,O
the,O
prospectuses,O
for,O
Columbia,I-BUSINESS
Massachusetts,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
",",O
Columbia,I-BUSINESS
Connecticut,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
and,O
Columbia,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Equity,I-BUSINESS
Fund,I-BUSINESS
filed,O
pursuant,O
to,O
Rule,O
497,O
(,O
e,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
on,O
May,O
31,O
",",O
2011,O
(,O
Accession,O
No.,O
0001193125-11-154623,O
),O
",",O
which,O
is,O
incorporated,O
herein,O
by,O
reference,O
.,O
,O
The,O
Fund,O
has,O
added,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
.,O
,O
Accordingly,O
",",O
as,O
of,O
May,O
31,O
",",O
2011,O
",",O
the,O
Fund,O
's,O
Prospectuses,O
are,O
hereby,O
revised,O
as,O
follows,O
:,O
,O
The,O
paragraph,O
under,O
the,O
heading,O
``,O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectus,O
entitled,O
``,O
Columbia,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Tax-Exempt,I-MISCELLANEOUS
Fund,I-MISCELLANEOUS
-,I-MISCELLANEOUS
Performance,I-MISCELLANEOUS
Information,I-MISCELLANEOUS
",",O
'',O
is,O
deleted,O
and,O
replaced,O
in,O
its,O
entirety,O
with,O
the,O
following,O
:,O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
and,O
the,O
Lipper,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
.,O
,O
The,I-MISCELLANEOUS
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
considered,O
representative,O
of,O
the,O
broad,O
market,O
for,O
investment-grade,O
",",O
tax-exempt,O
bonds,O
with,O
maturities,O
of,O
at,O
least,O
one,O
year,O
.,O
,O
The,I-MISCELLANEOUS
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
a,O
subset,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
consisting,O
solely,O
of,O
bonds,O
issued,O
in,O
the,O
state,O
of,O
Connecticut,I-LOCATION
.,O
,O
Prior,O
to,O
May,O
31,O
",",O
2011,O
",",O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
was,O
the,O
Fund,O
's,O
sole,O
benchmark,O
.,O
,O
The,O
Fund,O
added,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
additional,O
index,O
provides,O
a,O
reasonable,O
view,O
of,O
the,O
avail,O
able,O
municipal,O
investment,O
opportunities,O
in,O
Connecticut,I-LOCATION
and,O
therefore,O
provides,O
an,O
additional,O
useful,O
performance,O
comparison,O
.,O
,O
The,O
Lipper,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
is,O
composed,O
of,O
funds,O
with,O
investment,O
objectives,O
similar,O
to,O
those,O
of,O
the,O
Fund,O
.,O
,O
The,O
following,O
line,O
is,O
added,O
to,O
the,O
table,O
under,O
the,O
heading,O
'',O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectuses,O
entitled,O
``,O
Columbia,I-BUSINESS
Connecticut,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
'',O
:,O
,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
and,O
the,O
Lipper,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
considered,O
representative,O
of,O
the,O
broad,O
market,O
for,O
investment-grade,O
",",O
tax-exempt,O
bonds,O
with,O
maturities,O
of,O
at,O
least,O
one,O
year,O
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
a,O
subset,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
consisting,O
solely,O
of,O
bonds,O
issued,O
in,O
the,O
state,O
of,O
Connecticut,I-LOCATION
.,O
,O
Prior,O
to,O
May,O
31,O
",",O
2011,O
",",O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
was,O
the,O
Fund,O
's,O
sole,O
benchmark,O
.,O
,O
The,O
Fund,O
added,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
t,O
hat,O
the,O
additional,O
index,O
provides,O
a,O
reasonable,O
view,O
of,O
the,O
available,O
municipal,O
investment,O
opportunities,O
in,O
Connecticut,I-LOCATION
and,O
therefore,O
provides,O
an,O
additional,O
useful,O
performance,O
comparison,O
.,O
,O
The,O
Lipper,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
is,O
composed,O
of,O
funds,O
with,O
investment,O
objectives,O
similar,O
to,O
those,O
of,O
the,O
Fund,O
.,O
,O
Columbia,I-BUSINESS
Connecticut,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
Barclays,B-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
If,O
the,O
Fund,O
has,O
annual,O
returns,O
for,O
at,O
least,O
one,O
calendar,O
year,O
",",O
provide,O
a,O
table,O
showing,O
the,O
Fund,O
's,O
(,O
A,O
),O
average,O
annual,O
total,O
return,O
;,O
(,O
B,O
),O
average,O
annual,O
total,O
return,O
(,O
after,O
taxes,O
on,O
distributions,O
),O
;,O
and,O
(,O
C,O
),O
average,O
annual,O
total,O
return,O
(,O
after,O
taxes,O
on,O
distributions,O
and,O
redemption,O
),O
.,O
,O
A,O
Money,O
Market,O
Fund,O
should,O
show,O
only,O
the,O
returns,O
described,O
in,O
clause,O
(,O
A,O
),O
of,O
the,O
preceding,O
sentence,O
.,O
,O
All,O
returns,O
should,O
be,O
shown,O
for,O
1-,O
",",O
5-,O
",",O
and,O
10-,O
calendar,O
year,O
periods,O
ending,O
on,O
the,O
date,O
of,O
the,O
most,O
recently,O
completed,O
calendar,O
year,O
(,O
or,O
for,O
the,O
life,O
of,O
the,O
Fund,O
",",O
if,O
shorter,O
),O
",",O
but,O
only,O
for,O
periods,O
subsequent,O
to,O
the,O
effective,O
date,O
of,O
the,O
Fund,O
's,O
registration,O
statement,O
.,O
,O
The,O
table,O
also,O
shouldshow,O
the,O
returns,O
of,O
an,O
appropriate,O
broadbased,O
securities,O
market,O
index,O
as,O
defined,O
in,O
Instruction,O
5,O
to,O
Item,O
22,O
(,O
b,O
),O
(,O
7,O
),O
for,O
the,O
same,O
periods,O
.,O
,O
A,O
Fund,O
that,O
has,O
been,O
in,O
existence,O
for,O
more,O
than,O
10,O
years,O
also,O
may,O
include,O
returns,O
for,O
the,O
life,O
of,O
the,O
Fund,O
.,O
,O
A,O
Money,O
Market,O
Fund,O
may,O
provide,O
the,O
Fund,O
's,O
7-day,O
yield,O
ending,O
on,O
the,O
date,O
of,O
the,O
most,O
recent,O
calendar,O
year,O
or,O
disclose,O
a,O
toll-free,O
(,O
or,O
collect,O
),O
telephone,O
number,O
that,O
investors,O
can,O
use,O
to,O
obtain,O
the,O
Fund,O
's,O
current,O
7-day,O
yield,O
.,O
,O
For,O
a,O
Fund,O
(,O
other,O
than,O
a,O
Money,O
Market,O
Fund,O
or,O
a,O
Fund,O
described,O
in,O
General,O
Instruction,O
C.3,O
.,O
,O
(,O
d,O
),O
(,O
iii,O
),O
),O
",",O
provide,O
the,O
information,O
in,O
the,O
following,O
table,O
with,O
the,O
specified,O
captions,O
AVERAGE,O
ANNUAL,O
TOTAL,O
RETURNS,O
(,O
For,O
the,O
periods,O
ended,O
December,O
31,O
",",O
_____,O
),O
.,O
,O
For,O
a,O
Fund,O
that,O
provides,O
annual,O
total,O
returns,O
for,O
only,O
one,O
calendar,O
year,O
or,O
for,O
a,O
Fund,O
that,O
does,O
not,O
include,O
the,O
bar,O
chart,O
because,O
it,O
does,O
not,O
have,O
annual,O
returns,O
for,O
a,O
full,O
calendar,O
year,O
",",O
modify,O
",",O
as,O
appropriate,O
",",O
the,O
narrative,O
explanation,O
required,O
by,O
paragraph,O
(,O
c,O
),O
(,O
2,O
),O
(,O
i,O
),O
(,O
e.g.,O
",",O
by,O
stating,O
that,O
the,O
information,O
gives,O
some,O
indication,O
of,O
the,O
risks,O
of,O
an,O
investment,O
in,O
the,O
Fund,O
by,O
comparing,O
the,O
Fund,O
's,O
performance,O
with,O
a,O
broad,O
measure,O
of,O
market,O
performance,O
),O
.,O
,O
Contains,O
a,O
command,O
for,O
the,O
SEC,I-GOVERNMENT
Viewer,O
for,O
the,O
role,O
corresponding,O
to,O
PerformanceTableData,O
.,O
,O
Columbia,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Equity,I-BUSINESS
Fund,I-BUSINESS
|,O
,O
Effective,O
on,O
May,O
31,O
",",O
2011,O
",",O
the,O
Fund,O
will,O
change,O
its,O
benchmark,O
from,O
FTSE,I-MISCELLANEOUS
National,I-MISCELLANEOUS
Association,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Real,I-MISCELLANEOUS
Estate,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Trusts,I-MISCELLANEOUS
All,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
to,O
the,O
FTSE,I-MISCELLANEOUS
National,I-MISCELLANEOUS
Association,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Real,I-MISCELLANEOUS
Estate,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Trusts,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
.,O
,O
Accordingly,O
",",O
as,O
of,O
May,O
31,O
",",O
2011,O
",",O
the,O
Fund,O
's,O
Prospectuses,O
will,O
be,O
hereby,O
revised,O
as,O
follows,O
:,O
,O
The,O
paragraph,O
under,O
the,O
heading,O
``,O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectus,O
entitled,O
``,O
Columbia,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Equity,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
",",O
'',O
is,O
deleted,O
and,O
replaced,O
in,O
its,O
entirety,O
with,O
the,O
following,O
:,O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
FTSE,I-MISCELLANEOUS
National,I-MISCELLANEOUS
Association,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Real,I-MISCELLANEOUS
Estate,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Trusts,I-MISCELLANEOUS
(,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
),I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
which,O
reflects,O
performance,O
of,O
all,O
publicly,O
traded,O
equity,O
REITs,O
other,O
than,O
those,O
designated,O
as,O
timber,O
REITs,O
",",O
and,O
its,O
former,O
benchmark,O
",",O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
All,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
which,O
reflects,O
performance,O
of,O
all,O
publicly,O
traded,O
equity,O
REITs,O
",",O
including,O
timber,O
REITs,O
.,O
,O
The,O
Fund,O
changed,O
its,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,O
is,O
more,O
representative,O
of,O
the,O
investment,O
approach,O
used,O
to,O
manage,O
the,O
Fund,O
.,O
,O
The,O
following,O
lines,O
are,O
added,O
to,O
the,O
table,O
under,O
the,O
heading,O
'',O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectuses,O
entitled,O
``,O
Columbia,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Equity,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
'',O
:,O
,O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,O
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
FTSE,I-MISCELLANEOUS
National,I-MISCELLANEOUS
Association,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Real,I-MISCELLANEOUS
Estate,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Trusts,I-MISCELLANEOUS
(,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
),I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
which,O
reflects,O
performance,O
of,O
all,O
publicly,O
traded,O
equity,O
REITs,O
other,O
than,O
those,O
designated,O
as,O
timber,O
REITs,O
",",O
and,O
its,O
former,O
benchmark,O
",",O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
All,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
which,O
reflects,O
performance,O
of,O
all,O
publicly,O
traded,O
equity,O
REITs,O
",",O
including,O
timber,O
REITs,O
.,O
,O
The,O
Fund,O
changed,O
its,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,O
is,O
more,O
representative,O
of,O
the,O
investment,O
approach,O
used,O
to,O
manage,O
the,O
Fund,O
.,O
,O
Columbia,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Equity,I-BUSINESS
Fund,I-BUSINESS
FTSE,B-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,O
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
If,O
the,O
Fund,O
has,O
annual,O
returns,O
for,O
at,O
least,O
one,O
calendar,O
year,O
",",O
provide,O
a,O
table,O
showing,O
the,O
Fund,O
's,O
(,O
A,O
),O
average,O
annual,O
total,O
return,O
;,O
(,O
B,O
),O
average,O
annual,O
total,O
return,O
(,O
after,O
taxes,O
on,O
distributions,O
),O
;,O
and,O
(,O
C,O
),O
average,O
annual,O
total,O
return,O
(,O
after,O
taxes,O
on,O
distributions,O
and,O
redemption,O
),O
.,O
,O
A,O
Money,O
Market,O
Fund,O
should,O
show,O
only,O
the,O
returns,O
described,O
in,O
clause,O
(,O
A,O
),O
of,O
the,O
preceding,O
sentence,O
.,O
,O
All,O
returns,O
should,O
be,O
shown,O
for,O
1-,O
",",O
5-,O
",",O
and,O
10-,O
calendar,O
year,O
periods,O
ending,O
on,O
the,O
date,O
of,O
the,O
most,O
recently,O
completed,O
calendar,O
year,O
(,O
or,O
for,O
the,O
life,O
of,O
the,O
Fund,O
",",O
if,O
shorter,O
),O
",",O
but,O
only,O
for,O
periods,O
subsequent,O
to,O
the,O
effective,O
date,O
of,O
the,O
Fund,O
's,O
registration,O
statement,O
.,O
,O
The,O
table,O
also,O
shouldshow,O
the,O
returns,O
of,O
an,O
appropriate,O
broadbased,O
securities,O
market,O
index,O
as,O
defined,O
in,O
Instruction,O
5,O
to,O
Item,O
22,O
(,O
b,O
),O
(,O
7,O
),O
for,O
the,O
same,O
periods,O
.,O
,O
A,O
Fund,O
that,O
has,O
been,O
in,O
existence,O
for,O
more,O
than,O
10,O
years,O
also,O
may,O
include,O
returns,O
for,O
the,O
life,O
of,O
the,O
Fund,O
.,O
,O
A,O
Money,O
Market,O
Fund,O
may,O
provide,O
the,O
Fund,O
's,O
7-day,O
yield,O
ending,O
on,O
the,O
date,O
of,O
the,O
most,O
recent,O
calendar,O
year,O
or,O
disclose,O
a,O
toll-free,O
(,O
or,O
collect,O
),O
telephone,O
number,O
that,O
investors,O
can,O
use,O
to,O
obtain,O
the,O
Fund,O
's,O
current,O
7-day,O
yield,O
.,O
,O
For,O
a,O
Fund,O
(,O
other,O
than,O
a,O
Money,O
Market,O
Fund,O
or,O
a,O
Fund,O
described,O
in,O
General,O
Instruction,O
C.3,O
.,O
,O
(,O
d,O
),O
(,O
iii,O
),O
),O
",",O
provide,O
the,O
information,O
in,O
the,O
following,O
table,O
with,O
the,O
specified,O
captions,O
AVERAGE,O
ANNUAL,O
TOTAL,O
RETURNS,O
(,O
For,O
the,O
periods,O
ended,O
December,O
31,O
",",O
_____,O
),O
.,O
,O
For,O
a,O
Fund,O
that,O
provides,O
annual,O
total,O
returns,O
for,O
only,O
one,O
calendar,O
year,O
or,O
for,O
a,O
Fund,O
that,O
does,O
not,O
include,O
the,O
bar,O
chart,O
because,O
it,O
does,O
not,O
have,O
annual,O
returns,O
for,O
a,O
full,O
calendar,O
year,O
",",O
modify,O
",",O
as,O
appropriate,O
",",O
the,O
narrative,O
explanation,O
required,O
by,O
paragraph,O
(,O
c,O
),O
(,O
2,O
),O
(,O
i,O
),O
(,O
e.g.,O
",",O
by,O
stating,O
that,O
the,O
information,O
gives,O
some,O
indication,O
of,O
the,O
risks,O
of,O
an,O
investment,O
in,O
the,O
Fund,O
by,O
comparing,O
the,O
Fund,O
's,O
performance,O
with,O
a,O
broad,O
measure,O
of,O
market,O
performance,O
),O
.,O
,O
Contains,O
a,O
command,O
for,O
the,O
SEC,I-GOVERNMENT
Viewer,O
for,O
the,O
role,O
corresponding,O
to,O
PerformanceTableData,O
.,O
,O
The,O
Fund,O
has,O
added,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
.,O
,O
Accordingly,O
",",O
as,O
of,O
May,O
31,O
",",O
2011,O
",",O
the,O
Fund,O
's,O
Prospectus,O
is,O
hereby,O
revised,O
as,O
follows,O
:,O
,O
The,O
paragraph,O
under,O
the,O
heading,O
``,O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectus,O
entitled,O
``,O
Columbia,I-BUSINESS
Massachusetts,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
",",O
'',O
is,O
deleted,O
and,O
replaced,O
in,O
its,O
entirety,O
with,O
the,O
following,O
:,O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
and,O
the,O
Lipper,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
.,O
,O
The,O
Barclays,O
Capital,O
Municipal,O
Bond,O
Index,O
is,O
considered,O
representative,O
of,O
the,O
broad,O
market,O
for,O
investment-grade,O
",",O
tax-exempt,O
bonds,O
with,O
maturities,O
of,O
at,O
least,O
one,O
year,O
.,O
,O
The,O
Barclays,O
Capital,O
Massachusetts,O
Municipal,O
Bond,O
Index,O
is,O
a,O
subset,O
of,O
the,O
Barclays,O
Capital,O
Municipal,O
Bond,O
Index,O
consisting,O
solely,O
of,O
bonds,O
issued,O
in,O
the,O
state,O
of,O
Massachusetts,O
.,O
,O
Prior,O
to,O
May,O
31,O
",",O
2011,O
",",O
the,O
Barclays,O
Capital,O
Municipal,O
Bond,O
Index,O
was,O
the,O
Fund,O
's,O
sole,O
benchmark,O
.,O
,O
The,O
Fund,O
added,O
the,O
Barclays,O
Capital,O
Massachusetts,O
Municipal,O
Bond,O
Index,O
as,O
a,O
secondary,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
additional,O
index,O
provides,O
a,O
reasonable,O
view,O
of,O
the,O
available,O
municipal,O
investment,O
opportunities,O
in,O
Massachusetts,O
and,O
therefore,O
provides,O
an,O
additional,O
useful,O
performance,O
comparison,O
.,O
,O
The,O
Lipper,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
is,O
composed,O
of,O
funds,O
with,O
investment,O
objectives,O
similar,O
to,O
those,O
of,O
the,O
Fund,O
.,O
,O
The,O
following,O
line,O
is,O
added,O
to,O
the,O
table,O
under,O
the,O
heading,O
'',O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectus,O
entitled,O
``,O
Columbia,I-BUSINESS
Massachusetts,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
'',O
:,O
,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
and,O
the,O
Lipper,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
considered,O
representative,O
of,O
the,O
broad,O
market,O
for,O
investment-grade,O
",",O
tax-exempt,O
bonds,O
with,O
maturities,O
of,O
at,O
least,O
one,O
year,O
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
a,O
subset,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
consisting,O
solely,O
of,O
bonds,O
issued,O
in,O
the,O
state,O
of,O
Massachusetts,I-LOCATION
.,O
,O
Prior,O
to,O
May,O
31,O
",",O
2011,O
",",O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
was,O
the,O
Fund,O
's,O
sole,O
benchmark,O
.,O
,O
The,O
Fund,O
added,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
additional,O
index,O
provides,O
a,O
reasonable,O
view,O
of,O
the,O
available,O
municipal,O
investment,O
opportunities,O
in,O
Massachusetts,I-LOCATION
and,O
therefore,O
provides,O
an,O
additional,O
useful,O
performance,O
comparison,O
.,O
,O
The,O
Lipper,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
is,O
composed,O
of,O
funds,O
with,O
investment,O
objectives,O
similar,O
to,O
those,O
of,O
the,O
Fund,O
.,O
,O
Columbia,I-BUSINESS
Massachusetts,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
Barclays,B-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
The,O
Fund,O
has,O
added,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
.,O
,O
Accordingly,O
",",O
as,O
of,O
May,O
31,O
",",O
2011,O
",",O
the,O
Fund,O
's,O
Prospectuses,O
are,O
hereby,O
revised,O
as,O
follows,O
:,O
,O
The,O
paragraph,O
under,O
the,O
heading,O
``,O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectus,O
entitled,O
``,O
Columbia,I-BUSINESS
Connecticut,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
",",O
'',O
is,O
deleted,O
and,O
replaced,O
in,O
its,O
entirety,O
with,O
the,O
following,O
:,O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
and,O
the,O
Lipper,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
considered,O
representative,O
of,O
the,O
broad,O
market,O
for,O
investment-grade,O
",",O
tax-exempt,O
bonds,O
with,O
maturities,O
of,O
at,O
least,O
one,O
year,O
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
a,O
subset,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
consisting,O
solely,O
of,O
bonds,O
issued,O
in,O
the,O
state,O
of,O
Connecticut,I-LOCATION
.,O
,O
Prior,O
to,O
May,O
31,O
",",O
2011,O
",",O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
was,O
the,O
Fund,O
's,O
sole,O
benchmark,O
.,O
,O
The,O
Fund,O
added,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
additional,O
index,O
provides,O
a,O
reasonable,O
view,O
of,O
the,O
avail,O
able,O
municipal,O
investment,O
opportunities,O
in,O
Connecticut,I-LOCATION
and,O
therefore,O
provides,O
an,O
additional,O
useful,O
performance,O
comparison,O
.,O
,O
The,O
Lipper,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
is,O
composed,O
of,O
funds,O
with,O
investment,O
objectives,O
similar,O
to,O
those,O
of,O
the,O
Fund,O
.,O
,O
The,O
following,O
line,O
is,O
added,O
to,O
the,O
table,O
under,O
the,O
heading,O
'',O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectuses,O
entitled,O
``,O
Columbia,I-BUSINESS
Connecticut,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
'',O
:,O
,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
and,O
the,O
Lipper,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
considered,O
representative,O
of,O
the,O
broad,O
market,O
for,O
investment-grade,O
",",O
tax-exempt,O
bonds,O
with,O
maturities,O
of,O
at,O
least,O
one,O
year,O
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
a,O
subset,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
consisting,O
solely,O
of,O
bonds,O
issued,O
in,O
the,O
state,O
of,O
Connecticut,I-LOCATION
.,O
,O
Prior,O
to,O
May,O
31,O
",",O
2011,O
",",O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
was,O
the,O
Fund,O
's,O
sole,O
benchmark,O
.,O
,O
The,O
Fund,O
added,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
t,O
hat,O
the,O
additional,O
index,O
provides,O
a,O
reasonable,O
view,O
of,O
the,O
available,O
municipal,O
investment,O
opportunities,O
in,O
Connecticut,I-LOCATION
and,O
therefore,O
provides,O
an,O
additional,O
useful,O
performance,O
comparison,O
.,O
,O
The,O
Lipper,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
is,O
composed,O
of,O
funds,O
with,O
investment,O
objectives,O
similar,O
to,O
those,O
of,O
the,O
Fund,O
.,O
,O
Columbia,I-BUSINESS
Connecticut,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
Barclays,B-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
Columbia,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Equity,I-BUSINESS
Fund,I-BUSINESS
|,O
,O
Effective,O
on,O
May,O
31,O
",",O
2011,O
",",O
the,O
Fund,O
will,O
change,O
its,O
benchmark,O
from,O
FTSE,I-MISCELLANEOUS
National,I-MISCELLANEOUS
Association,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Real,I-MISCELLANEOUS
Estate,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Trusts,I-MISCELLANEOUS
All,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
to,O
the,O
FTSE,I-MISCELLANEOUS
National,I-MISCELLANEOUS
Association,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Real,I-MISCELLANEOUS
Estate,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Trusts,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
.,O
,O
Accordingly,O
",",O
as,O
of,O
May,O
31,O
",",O
2011,O
",",O
the,O
Fund,O
's,O
Prospectuses,O
will,O
be,O
hereby,O
revised,O
as,O
follows,O
:,O
,O
The,O
paragraph,O
under,O
the,O
heading,O
``,O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectus,O
entitled,O
``,O
Columbia,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Equity,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
",",O
'',O
is,O
deleted,O
and,O
replaced,O
in,O
its,O
entirety,O
with,O
the,O
following,O
:,O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
FTSE,I-MISCELLANEOUS
National,I-MISCELLANEOUS
Association,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Real,I-MISCELLANEOUS
Estate,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Trusts,I-MISCELLANEOUS
(,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
),I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
which,O
reflects,O
performance,O
of,O
all,O
publicly,O
traded,O
equity,O
REITs,O
other,O
than,O
those,O
designated,O
as,O
timber,O
REITs,O
",",O
and,O
its,O
former,O
benchmark,O
",",O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
All,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
which,O
reflects,O
performance,O
of,O
all,O
publicly,O
traded,O
equity,O
REITs,O
",",O
including,O
timber,O
REITs,O
.,O
,O
The,O
Fund,O
changed,O
its,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
more,O
representative,O
of,O
the,O
investment,O
approach,O
used,O
to,O
manage,O
the,O
Fund,O
.,O
,O
The,O
following,O
lines,O
are,O
added,O
to,O
the,O
table,O
under,O
the,O
heading,O
'',O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectuses,O
entitled,O
``,O
Columbia,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Equity,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
'',O
:,O
,O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
FTSE,I-MISCELLANEOUS
National,I-MISCELLANEOUS
Association,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Real,I-MISCELLANEOUS
Estate,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Trusts,I-MISCELLANEOUS
(,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
),I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
which,O
reflects,O
performance,O
of,O
all,O
publicly,O
traded,O
equity,O
REITs,O
other,O
than,O
those,O
designated,O
as,O
timber,O
REITs,O
",",O
and,O
its,O
former,O
benchmark,O
",",O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
All,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
which,O
reflects,O
performance,O
of,O
all,O
publicly,O
traded,O
equity,O
REITs,O
",",O
including,O
timber,O
REITs,O
.,O
,O
The,O
Fund,O
changed,O
its,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
more,O
representative,O
of,O
the,O
investment,O
approach,O
used,O
to,O
manage,O
the,O
Fund,O
.,O
,O
Columbia,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Equity,I-BUSINESS
Fund,I-BUSINESS
FTSE,B-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
If,O
the,O
Fund,O
has,O
annual,O
returns,O
for,O
at,O
least,O
one,O
calendar,O
year,O
",",O
provide,O
a,O
table,O
showing,O
the,O
Fund,O
's,O
(,O
A,O
),O
average,O
annual,O
total,O
return,O
;,O
(,O
B,O
),O
average,O
annual,O
total,O
return,O
(,O
after,O
taxes,O
on,O
distributions,O
),O
;,O
and,O
(,O
C,O
),O
average,O
annual,O
total,O
return,O
(,O
after,O
taxes,O
on,O
distributions,O
and,O
redemption,O
),O
.,O
,O
A,O
Money,O
Market,O
Fund,O
should,O
show,O
only,O
the,O
returns,O
described,O
in,O
clause,O
(,O
A,O
),O
of,O
the,O
preceding,O
sentence,O
.,O
,O
All,O
returns,O
should,O
be,O
shown,O
for,O
1-,O
",",O
5-,O
",",O
and,O
10-,O
calendar,O
year,O
periods,O
ending,O
on,O
the,O
date,O
of,O
the,O
most,O
recently,O
completed,O
calendar,O
year,O
(,O
or,O
for,O
the,O
life,O
of,O
the,O
Fund,O
",",O
if,O
shorter,O
),O
",",O
but,O
only,O
for,O
periods,O
subsequent,O
to,O
the,O
effective,O
date,O
of,O
the,O
Fund,O
's,O
registration,O
statement,O
.,O
,O
The,O
table,O
also,O
shouldshow,O
the,O
returns,O
of,O
an,O
appropriate,O
broadbased,O
securities,O
market,O
index,O
as,O
defined,O
in,O
Instruction,O
5,O
to,O
Item,O
22,O
(,O
b,O
),O
(,O
7,O
),O
for,O
the,O
same,O
periods,O
.,O
,O
A,O
Fund,O
that,O
has,O
been,O
in,O
existence,O
for,O
more,O
than,O
10,O
years,O
also,O
may,O
include,O
returns,O
for,O
the,O
life,O
of,O
the,O
Fund,O
.,O
,O
A,O
Money,O
Market,O
Fund,O
may,O
provide,O
the,O
Fund,O
's,O
7-day,O
yield,O
ending,O
on,O
the,O
date,O
of,O
the,O
most,O
recent,O
calendar,O
year,O
or,O
disclose,O
a,O
toll-free,O
(,O
or,O
collect,O
),O
telephone,O
number,O
that,O
investors,O
can,O
use,O
to,O
obtain,O
the,O
Fund,O
's,O
current,O
7-day,O
yield,O
.,O
,O
For,O
a,O
Fund,O
(,O
other,O
than,O
a,O
Money,O
Market,O
Fund,O
or,O
a,O
Fund,O
described,O
in,O
General,O
Instruction,O
C.3,O
.,O
,O
(,O
d,O
),O
(,O
iii,O
),O
),O
",",O
provide,O
the,O
information,O
in,O
the,O
following,O
table,O
with,O
the,O
specified,O
captions,O
AVERAGE,O
ANNUAL,O
TOTAL,O
RETURNS,O
(,O
For,O
the,O
periods,O
ended,O
December,O
31,O
",",O
_____,O
),O
.,O
,O
For,O
a,O
Fund,O
that,O
provides,O
annual,O
total,O
returns,O
for,O
only,O
one,O
calendar,O
year,O
or,O
for,O
a,O
Fund,O
that,O
does,O
not,O
include,O
the,O
bar,O
chart,O
because,O
it,O
does,O
not,O
have,O
annual,O
returns,O
for,O
a,O
full,O
calendar,O
year,O
",",O
modify,O
",",O
as,O
appropriate,O
",",O
the,O
narrative,O
explanation,O
required,O
by,O
paragraph,O
(,O
c,O
),O
(,O
2,O
),O
(,O
i,O
),O
(,O
e.g.,O
",",O
by,O
stating,O
that,O
the,O
information,O
gives,O
some,O
indication,O
of,O
the,O
risks,O
of,O
an,O
investment,O
in,O
the,O
Fund,O
by,O
comparing,O
the,O
Fund,O
's,O
performance,O
with,O
a,O
broad,O
measure,O
of,O
market,O
performance,O
),O
.,O
,O
Contains,O
a,O
command,O
for,O
the,O
SEC,I-GOVERNMENT
Viewer,O
for,O
the,O
role,O
corresponding,O
to,O
PerformanceTableData,O
.,O
,O
The,O
Fund,O
has,O
added,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
.,O
,O
Accordingly,O
",",O
as,O
of,O
May,O
31,O
",",O
2011,O
",",O
the,O
Fund,O
's,O
Prospectus,O
is,O
hereby,O
revised,O
as,O
follows,O
:,O
,O
The,O
paragraph,O
under,O
the,O
heading,O
``,O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectus,O
entitled,O
``,O
Columbia,I-BUSINESS
Massachusetts,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
",",O
'',O
is,O
deleted,O
and,O
replaced,O
in,O
its,O
entirety,O
with,O
the,O
following,O
:,O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
and,O
the,O
Lipper,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
considered,O
representative,O
of,O
the,O
broad,O
market,O
for,O
investment-grade,O
",",O
tax-exempt,O
bonds,O
with,O
maturities,O
of,O
at,O
least,O
one,O
year,O
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
a,O
subset,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
consisting,O
solely,O
of,O
bonds,O
issued,O
in,O
the,O
state,O
of,O
Massachusetts,I-LOCATION
.,O
,O
Prior,O
to,O
May,O
31,O
",",O
2011,O
",",O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
was,O
the,O
Fund,O
's,O
sole,O
benchmark,O
.,O
,O
The,O
Fund,O
added,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
additional,O
index,O
provides,O
a,O
reasonable,O
view,O
of,O
the,O
available,O
municipal,O
investment,O
opportunities,O
in,O
Massachusetts,I-LOCATION
and,O
therefore,O
provides,O
an,O
additional,O
useful,O
performance,O
comparison,O
.,O
,O
The,O
Lipper,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
is,O
composed,O
of,O
funds,O
with,O
investment,O
objectives,O
similar,O
to,O
those,O
of,O
the,O
Fund,O
.,O
,O
The,O
following,O
line,O
is,O
added,O
to,O
the,O
table,O
under,O
the,O
heading,O
'',O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectus,O
entitled,O
``,O
Columbia,I-BUSINESS
Massachusetts,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
'',O
:,O
,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
and,O
the,O
Lipper,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
considered,O
representative,O
of,O
the,O
broad,O
market,O
for,O
investment-grade,O
",",O
tax-exempt,O
bonds,O
with,O
maturities,O
of,O
at,O
least,O
one,O
year,O
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
a,O
subset,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
consisting,O
solely,O
of,O
bonds,O
issued,O
in,O
the,O
state,O
of,O
Massachusetts,I-LOCATION
.,O
,O
Prior,O
to,O
May,O
31,O
",",O
2011,O
",",O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
was,O
the,O
Fund,O
's,O
sole,O
benchmark,O
.,O
,O
The,O
Fund,O
added,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
additional,O
index,O
provides,O
a,O
reasonable,O
view,O
of,O
the,O
available,O
municipal,O
investment,O
opportunities,O
in,O
Massachusetts,I-LOCATION
and,O
therefore,O
provides,O
an,O
additional,O
useful,O
performance,O
comparison,O
.,O
,O
The,O
Lipper,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
is,O
composed,O
of,O
funds,O
with,O
investment,O
objectives,O
similar,O
to,O
those,O
of,O
the,O
Fund,O
.,O
,O
Columbia,I-BUSINESS
Massachusetts,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
|,O
|,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
The,O
Fund,O
has,O
added,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
.,O
,O
Accordingly,O
",",O
as,O
of,O
May,O
31,O
",",O
2011,O
",",O
the,O
Fund,O
's,O
Prospectuses,O
are,O
hereby,O
revised,O
as,O
follows,O
:,O
,O
The,O
paragraph,O
under,O
the,O
heading,O
``,O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectus,O
entitled,O
``,O
Columbia,I-BUSINESS
Connecticut,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
",",O
'',O
is,O
deleted,O
and,O
replaced,O
in,O
its,O
entirety,O
with,O
the,O
following,O
:,O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
and,O
the,O
Lipper,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
considered,O
representative,O
of,O
the,O
broad,O
market,O
for,O
investment-grade,O
",",O
tax-exempt,O
bonds,O
with,O
maturities,O
of,O
at,O
least,O
one,O
year,O
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
a,O
subset,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
consisting,O
solely,O
of,O
bonds,O
issued,O
in,O
the,O
state,O
of,O
Connecticut,I-LOCATION
.,O
,O
Prior,O
to,O
May,O
31,O
",",O
2011,O
",",O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
was,O
the,O
Fund,O
's,O
sole,O
benchmark,O
.,O
,O
The,O
Fund,O
added,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
additional,O
index,O
provides,O
a,O
reasonable,O
view,O
of,O
the,O
avail,O
able,O
municipal,O
investment,O
opportunities,O
in,O
Connecticut,I-LOCATION
and,O
therefore,O
provides,O
an,O
additional,O
useful,O
performance,O
comparison,O
.,O
,O
The,O
Lipper,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
is,O
composed,O
of,O
funds,O
with,O
investment,O
objectives,O
similar,O
to,O
those,O
of,O
the,O
Fund,O
.,O
,O
The,O
following,O
line,O
is,O
added,O
to,O
the,O
table,O
under,O
the,O
heading,O
'',O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectuses,O
entitled,O
``,O
Columbia,I-BUSINESS
Connecticut,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
'',O
:,O
,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
and,O
the,O
Lipper,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
considered,O
representative,O
of,O
the,O
broad,O
market,O
for,O
investment-grade,O
",",O
tax-exempt,O
bonds,O
with,O
maturities,O
of,O
at,O
least,O
one,O
year,O
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
a,O
subset,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
consisting,O
solely,O
of,O
bonds,O
issued,O
in,O
the,O
state,O
of,O
Connecticut,I-LOCATION
.,O
,O
Prior,O
to,O
May,O
31,O
",",O
2011,O
",",O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
was,O
the,O
Fund,O
's,O
sole,O
benchmark,O
.,O
,O
The,O
Fund,O
added,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
t,O
hat,O
the,O
additional,O
index,O
provides,O
a,O
reasonable,O
view,O
of,O
the,O
available,O
municipal,O
investment,O
opportunities,O
in,O
Connecticut,I-LOCATION
and,O
therefore,O
provides,O
an,O
additional,O
useful,O
performance,O
comparison,O
.,O
,O
The,O
Lipper,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
is,O
composed,O
of,O
funds,O
with,O
investment,O
objectives,O
similar,O
to,O
those,O
of,O
the,O
Fund,O
.,O
,O
Columbia,I-BUSINESS
Connecticut,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
|,O
|,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
Columbia,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Equity,I-BUSINESS
Fund,I-BUSINESS
|,O
,O
Effective,O
on,O
May,O
31,O
",",O
2011,O
",",O
the,O
Fund,O
will,O
change,O
its,O
benchmark,O
from,O
FTSE,I-MISCELLANEOUS
National,I-MISCELLANEOUS
Association,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Real,I-MISCELLANEOUS
Estate,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Trusts,I-MISCELLANEOUS
All,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
to,O
the,O
FTSE,I-MISCELLANEOUS
National,I-MISCELLANEOUS
Association,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Real,I-MISCELLANEOUS
Estate,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Trusts,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
.,O
,O
Accordingly,O
",",O
as,O
of,O
May,O
31,O
",",O
2011,O
",",O
the,O
Fund,O
's,O
Prospectuses,O
will,O
be,O
hereby,O
revised,O
as,O
follows,O
:,O
,O
The,O
paragraph,O
under,O
the,O
heading,O
``,O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectus,O
entitled,O
``,O
Columbia,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Equity,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
",",O
'',O
is,O
deleted,O
and,O
replaced,O
in,O
its,O
entirety,O
with,O
the,O
following,O
:,O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
FTSE,I-MISCELLANEOUS
National,I-MISCELLANEOUS
Association,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Real,I-MISCELLANEOUS
Estate,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Trusts,I-MISCELLANEOUS
(,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
),I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
which,O
reflects,O
performance,O
of,O
all,O
publicly,O
traded,O
equity,O
REITs,O
other,O
than,O
those,O
designated,O
as,O
timber,O
REITs,O
",",O
and,O
its,O
former,O
benchmark,O
",",O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
All,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
which,O
reflects,O
performance,O
of,O
all,O
publicly,O
traded,O
equity,O
REITs,O
",",O
including,O
timber,O
REITs,O
.,O
,O
The,O
Fund,O
changed,O
its,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
more,O
representative,O
of,O
the,O
investment,O
approach,O
used,O
to,O
manage,O
the,O
Fund,O
.,O
,O
The,O
following,O
lines,O
are,O
added,O
to,O
the,O
table,O
under,O
the,O
heading,O
'',O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectuses,O
entitled,O
``,O
Columbia,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Equity,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
'',O
:,O
,O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
FTSE,I-MISCELLANEOUS
National,I-MISCELLANEOUS
Association,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Real,I-MISCELLANEOUS
Estate,I-MISCELLANEOUS
Investment,I-MISCELLANEOUS
Trusts,I-MISCELLANEOUS
(,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
),I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
which,O
reflects,O
performance,O
of,O
all,O
publicly,O
traded,O
equity,O
REITs,O
other,O
than,O
those,O
designated,O
as,O
timber,O
REITs,O
",",O
and,O
its,O
former,O
benchmark,O
",",O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
All,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
which,O
reflects,O
performance,O
of,O
all,O
publicly,O
traded,O
equity,O
REITs,O
",",O
including,O
timber,O
REITs,O
.,O
,O
The,O
Fund,O
changed,O
its,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
more,O
representative,O
of,O
the,O
investment,O
approach,O
used,O
to,O
manage,O
the,O
Fund,O
.,O
,O
Columbia,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Equity,I-BUSINESS
Fund,I-BUSINESS
|,O
|,O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
If,O
the,O
value,O
is,O
true,O
",",O
then,O
the,O
document,O
as,O
an,O
amendment,O
to,O
previously-filed/accepted,O
document,O
.,O
,O
The,O
date,O
the,O
document,O
was,O
made,O
available,O
and,O
submitted,O
",",O
in,O
CCYY-MM-DD,O
format,O
.,O
,O
The,O
date,O
of,O
submission,O
",",O
date,O
of,O
acceptance,O
by,O
the,O
recipient,O
",",O
and,O
the,O
document,O
effective,O
date,O
are,O
all,O
potentially,O
different,O
.,O
,O
The,O
date,O
when,O
a,O
document,O
",",O
upon,O
receipt,O
and,O
acceptance,O
",",O
becomes,O
officially,O
effective,O
",",O
in,O
CCYY-MM-DD,O
format,O
.,O
,O
Usually,O
it,O
is,O
a,O
system-assigned,O
date,O
time,O
value,O
",",O
but,O
it,O
may,O
be,O
declared,O
by,O
the,O
submitter,O
in,O
some,O
cases,O
.,O
,O
The,O
end,O
date,O
of,O
the,O
period,O
reflected,O
on,O
the,O
cover,O
page,O
if,O
a,O
periodic,O
report,O
.,O
,O
For,O
all,O
other,O
reports,O
and,O
registration,O
statements,O
this,O
will,O
be,O
the,O
filing,O
date,O
.,O
,O
The,O
format,O
of,O
the,O
date,O
is,O
CCYY-MM-DD,O
.,O
,O
The,O
type,O
of,O
document,O
being,O
provided,O
(,O
such,O
as,O
10-K,O
",",O
10-Q,O
",",O
N-1A,O
",",O
etc,O
),O
.,O
,O
The,O
document,O
type,O
should,O
be,O
limited,O
to,O
the,O
same,O
value,O
as,O
the,O
supporting,O
SEC,I-GOVERNMENT
submission,O
type,O
.,O
,O
The,O
acceptable,O
values,O
are,O
as,O
follows,O
:,O
S-1,O
",",O
S-3,O
",",O
S-4,O
",",O
S-11,O
",",O
F-1,O
",",O
F-3,O
",",O
F-4,O
",",O
F-9,O
",",O
F-10,O
",",O
6-K,O
",",O
8-K,O
",",O
10,O
",",O
10-K,O
",",O
10-Q,O
",",O
20-F,O
",",O
40-F,O
",",O
N-1A,O
",",O
485BPOS,O
",",O
NCSR,O
",",O
N-Q,O
",",O
and,O
Other,O
.,O
,O
A,O
unique,O
10-digit,O
SEC-issued,I-MISCELLANEOUS
value,O
to,O
identify,O
entities,O
that,O
have,O
filed,O
disclosures,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
It,O
is,O
commonly,O
abbreviated,O
as,O
CIK,O
.,O
,O
The,O
exact,O
name,O
of,O
the,O
entity,O
filing,O
the,O
report,O
as,O
specified,O
in,O
its,O
charter,O
",",O
which,O
is,O
required,O
by,O
forms,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
Return,O
Before,O
Taxes,O
.,O
,O
Return,O
Before,O
Taxes,O
.,O
,O
Return,O
Before,O
Taxes,O
.,O
,O
If,O
the,O
Fund,O
has,O
annual,O
returns,O
for,O
at,O
least,O
one,O
calendar,O
year,O
",",O
provide,O
a,O
table,O
showing,O
the,O
Fund,O
's,O
(,O
A,O
),O
average,O
annual,O
total,O
return,O
;,O
(,O
B,O
),O
average,O
annual,O
total,O
return,O
(,O
after,O
taxes,O
on,O
distributions,O
),O
;,O
and,O
(,O
C,O
),O
average,O
annual,O
total,O
return,O
(,O
after,O
taxes,O
on,O
distributions,O
and,O
redemption,O
),O
.,O
,O
A,O
Money,O
Market,O
Fund,O
should,O
show,O
only,O
the,O
returns,O
described,O
in,O
clause,O
(,O
A,O
),O
of,O
the,O
preceding,O
sentence,O
.,O
,O
All,O
returns,O
should,O
be,O
shown,O
for,O
1-,O
",",O
5-,O
",",O
and,O
10-,O
calendar,O
year,O
periods,O
ending,O
on,O
the,O
date,O
of,O
the,O
most,O
recently,O
completed,O
calendar,O
year,O
(,O
or,O
for,O
the,O
life,O
of,O
the,O
Fund,O
",",O
if,O
shorter,O
),O
",",O
but,O
only,O
for,O
periods,O
subsequent,O
to,O
the,O
effective,O
date,O
of,O
the,O
Fund,O
's,O
registration,O
statement,O
.,O
,O
The,O
table,O
also,O
shouldshow,O
the,O
returns,O
of,O
an,O
appropriate,O
broadbased,O
securities,O
market,O
index,O
as,O
defined,O
in,O
Instruction,O
5,O
to,O
Item,O
22,O
(,O
b,O
),O
(,O
7,O
),O
for,O
the,O
same,O
periods,O
.,O
,O
A,O
Fund,O
that,O
has,O
been,O
in,O
existence,O
for,O
more,O
than,O
10,O
years,O
also,O
may,O
include,O
returns,O
for,O
the,O
life,O
of,O
the,O
Fund,O
.,O
,O
A,O
Money,O
Market,O
Fund,O
may,O
provide,O
the,O
Fund,O
's,O
7-day,O
yield,O
ending,O
on,O
the,O
date,O
of,O
the,O
most,O
recent,O
calendar,O
year,O
or,O
disclose,O
a,O
toll-free,O
(,O
or,O
collect,O
),O
telephone,O
number,O
that,O
investors,O
can,O
use,O
to,O
obtain,O
the,O
Fund,O
's,O
current,O
7-day,O
yield,O
.,O
,O
For,O
a,O
Fund,O
(,O
other,O
than,O
a,O
Money,O
Market,O
Fund,O
or,O
a,O
Fund,O
described,O
in,O
General,O
Instruction,O
C.3,O
.,O
,O
(,O
d,O
),O
(,O
iii,O
),O
),O
",",O
provide,O
the,O
information,O
in,O
the,O
following,O
table,O
with,O
the,O
specified,O
captions,O
AVERAGE,O
ANNUAL,O
TOTAL,O
RETURNS,O
(,O
For,O
the,O
periods,O
ended,O
December,O
31,O
",",O
_____,O
),O
.,O
,O
For,O
a,O
Fund,O
that,O
provides,O
annual,O
total,O
returns,O
for,O
only,O
one,O
calendar,O
year,O
or,O
for,O
a,O
Fund,O
that,O
does,O
not,O
include,O
the,O
bar,O
chart,O
because,O
it,O
does,O
not,O
have,O
annual,O
returns,O
for,O
a,O
full,O
calendar,O
year,O
",",O
modify,O
",",O
as,O
appropriate,O
",",O
the,O
narrative,O
explanation,O
required,O
by,O
paragraph,O
(,O
c,O
),O
(,O
2,O
),O
(,O
i,O
),O
(,O
e.g.,O
",",O
by,O
stating,O
that,O
the,O
information,O
gives,O
some,O
indication,O
of,O
the,O
risks,O
of,O
an,O
investment,O
in,O
the,O
Fund,O
by,O
comparing,O
the,O
Fund,O
's,O
performance,O
with,O
a,O
broad,O
measure,O
of,O
market,O
performance,O
),O
.,O
,O
The,O
date,O
of,O
the,O
prospectus,O
.,O
,O
Average,O
Annual,O
Total,O
Returns,O
(,O
dei_LegalEntityAxis,O
),O
,O
Columbia,I-BUSINESS
Real,I-BUSINESS
Estate,I-BUSINESS
Equity,I-BUSINESS
Fund,I-BUSINESS
|,O
|,O
FTSE,I-MISCELLANEOUS
NAREIT,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
REITs,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
Columbia,I-BUSINESS
Connecticut,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
|,O
|,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Connecticut,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
Columbia,I-BUSINESS
Massachusetts,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
|,O
|,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
Return,O
Before,O
Taxes,O
.,O
,O
Return,O
Before,O
Taxes,O
.,O
,O
Return,O
Before,O
Taxes,O
.,O
,O
The,O
Fund,O
has,O
added,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
.,O
,O
Accordingly,O
",",O
as,O
of,O
May,O
31,O
",",O
2011,O
",",O
the,O
Fund,O
's,O
Prospectus,O
is,O
hereby,O
revised,O
as,O
follows,O
:,O
,O
The,O
paragraph,O
under,O
the,O
heading,O
``,O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectus,O
entitled,O
``,O
Columbia,I-BUSINESS
Massachusetts,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
",",O
'',O
is,O
deleted,O
and,O
replaced,O
in,O
its,O
entirety,O
with,O
the,O
following,O
:,O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
and,O
the,O
Lipper,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
considered,O
representative,O
of,O
the,O
broad,O
market,O
for,O
investment-grade,O
",",O
tax-exempt,O
bonds,O
with,O
maturities,O
of,O
at,O
least,O
one,O
year,O
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
a,O
subset,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
consisting,O
solely,O
of,O
bonds,O
issued,O
in,O
the,O
state,O
of,O
Massachusetts,I-LOCATION
.,O
,O
Prior,O
to,O
May,O
31,O
",",O
2011,O
",",O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
was,O
the,O
Fund,O
's,O
sole,O
benchmark,O
.,O
,O
The,O
Fund,O
added,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
additional,O
index,O
provides,O
a,O
reasonable,O
view,O
of,O
the,O
available,O
municipal,O
investment,O
opportunities,O
in,O
Massachusetts,I-LOCATION
and,O
therefore,O
provides,O
an,O
additional,O
useful,O
performance,O
comparison,O
.,O
,O
The,O
Lipper,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
is,O
composed,O
of,O
funds,O
with,O
investment,O
objectives,O
similar,O
to,O
those,O
of,O
the,O
Fund,O
.,O
,O
The,O
following,O
line,O
is,O
added,O
to,O
the,O
table,O
under,O
the,O
heading,O
'',O
Average,O
Annual,O
Total,O
Return,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
'',O
in,O
the,O
section,O
of,O
the,O
Fund,O
's,O
Prospectus,O
entitled,O
``,O
Columbia,I-BUSINESS
Massachusetts,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
-,O
Performance,O
Information,O
'',O
:,O
,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
The,O
table,O
compares,O
the,O
Fund,O
's,O
returns,O
for,O
each,O
period,O
with,O
those,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
",",O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
and,O
the,O
Lipper,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
considered,O
representative,O
of,O
the,O
broad,O
market,O
for,O
investment-grade,O
",",O
tax-exempt,O
bonds,O
with,O
maturities,O
of,O
at,O
least,O
one,O
year,O
.,O
,O
The,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
a,O
subset,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
consisting,O
solely,O
of,O
bonds,O
issued,O
in,O
the,O
state,O
of,O
Massachusetts,I-LOCATION
.,O
,O
Prior,O
to,O
May,O
31,O
",",O
2011,O
",",O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
was,O
the,O
Fund,O
's,O
sole,O
benchmark,O
.,O
,O
The,O
Fund,O
added,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
as,O
a,O
secondary,O
benchmark,O
effective,O
May,O
31,O
",",O
2011,O
because,O
the,O
Adviser,O
believes,O
that,O
the,O
additional,O
index,O
provides,O
a,O
reasonable,O
view,O
of,O
the,O
available,O
municipal,O
investment,O
opportunities,O
in,O
Massachusetts,I-LOCATION
and,O
therefore,O
provides,O
an,O
additional,O
useful,O
performance,O
comparison,O
.,O
,O
The,O
Lipper,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Debt,I-MISCELLANEOUS
Funds,I-MISCELLANEOUS
Classification,I-MISCELLANEOUS
is,O
composed,O
of,O
funds,O
with,O
investment,O
objectives,O
similar,O
to,O
those,O
of,O
the,O
Fund,O
.,O
,O
Columbia,I-BUSINESS
Massachusetts,I-BUSINESS
Tax-Exempt,I-BUSINESS
Fund,I-BUSINESS
Barclays,B-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Massachusetts,I-MISCELLANEOUS
Municipal,I-MISCELLANEOUS
Bond,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
(,O
reflects,O
no,O
deductions,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
,O
If,O
the,O
Fund,O
has,O
annual,O
returns,O
for,O
at,O
least,O
one,O
calendar,O
year,O
",",O
provide,O
a,O
table,O
showing,O
the,O
Fund,O
's,O
(,O
A,O
),O
average,O
annual,O
total,O
return,O
;,O
(,O
B,O
),O
average,O
annual,O
total,O
return,O
(,O
after,O
taxes,O
on,O
distributions,O
),O
;,O
and,O
(,O
C,O
),O
average,O
annual,O
total,O
return,O
(,O
after,O
taxes,O
on,O
distributions,O
and,O
redemption,O
),O
.,O
,O
A,O
Money,O
Market,O
Fund,O
should,O
show,O
only,O
the,O
returns,O
described,O
in,O
clause,O
(,O
A,O
),O
of,O
the,O
preceding,O
sentence,O
.,O
,O
All,O
returns,O
should,O
be,O
shown,O
for,O
1-,O
",",O
5-,O
",",O
and,O
10-,O
calendar,O
year,O
periods,O
ending,O
on,O
the,O
date,O
of,O
the,O
most,O
recently,O
completed,O
calendar,O
year,O
(,O
or,O
for,O
the,O
life,O
of,O
the,O
Fund,O
",",O
if,O
shorter,O
),O
",",O
but,O
only,O
for,O
periods,O
subsequent,O
to,O
the,O
effective,O
date,O
of,O
the,O
Fund,O
's,O
registration,O
statement,O
.,O
,O
The,O
table,O
also,O
shouldshow,O
the,O
returns,O
of,O
an,O
appropriate,O
broadbased,O
securities,O
market,O
index,O
as,O
defined,O
in,O
Instruction,O
5,O
to,O
Item,O
22,O
(,O
b,O
),O
(,O
7,O
),O
for,O
the,O
same,O
periods,O
.,O
,O
A,O
Fund,O
that,O
has,O
been,O
in,O
existence,O
for,O
more,O
than,O
10,O
years,O
also,O
may,O
include,O
returns,O
for,O
the,O
life,O
of,O
the,O
Fund,O
.,O
,O
A,O
Money,O
Market,O
Fund,O
may,O
provide,O
the,O
Fund,O
's,O
7-day,O
yield,O
ending,O
on,O
the,O
date,O
of,O
the,O
most,O
recent,O
calendar,O
year,O
or,O
disclose,O
a,O
toll-free,O
(,O
or,O
collect,O
),O
telephone,O
number,O
that,O
investors,O
can,O
use,O
to,O
obtain,O
the,O
Fund,O
's,O
current,O
7-day,O
yield,O
.,O
,O
For,O
a,O
Fund,O
(,O
other,O
than,O
a,O
Money,O
Market,O
Fund,O
or,O
a,O
Fund,O
described,O
in,O
General,O
Instruction,O
C.3,O
.,O
,O
(,O
d,O
),O
(,O
iii,O
),O
),O
",",O
provide,O
the,O
information,O
in,O
the,O
following,O
table,O
with,O
the,O
specified,O
captions,O
AVERAGE,O
ANNUAL,O
TOTAL,O
RETURNS,O
(,O
For,O
the,O
periods,O
ended,O
December,O
31,O
",",O
_____,O
),O
.,O
,O
For,O
a,O
Fund,O
that,O
provides,O
annual,O
total,O
returns,O
for,O
only,O
one,O
calendar,O
year,O
or,O
for,O
a,O
Fund,O
that,O
does,O
not,O
include,O
the,O
bar,O
chart,O
because,O
it,O
does,O
not,O
have,O
annual,O
returns,O
for,O
a,O
full,O
calendar,O
year,O
",",O
modify,O
",",O
as,O
appropriate,O
",",O
the,O
narrative,O
explanation,O
required,O
by,O
paragraph,O
(,O
c,O
),O
(,O
2,O
),O
(,O
i,O
),O
(,O
e.g.,O
",",O
by,O
stating,O
that,O
the,O
information,O
gives,O
some,O
indication,O
of,O
the,O
risks,O
of,O
an,O
investment,O
in,O
the,O
Fund,O
by,O
comparing,O
the,O
Fund,O
's,O
performance,O
with,O
a,O
broad,O
measure,O
of,O
market,O
performance,O
),O
.,O
,O
Contains,O
a,O
command,O
for,O
the,O
SEC,I-GOVERNMENT
Viewer,O
for,O
the,O
role,O
corresponding,O
to,O
PerformanceTableData,O
.,O
,O
-DOCSTART-,O
,O
The,O
information,O
in,O
this,O
preliminary,O
prospectus,O
supplement,O
and,O
the,O
accompanying,O
prospectus,O
is,O
not,O
complete,O
and,O
may,O
be,O
changed,O
.,O
,O
This,O
preliminary,O
prospectus,O
supplement,O
and,O
the,O
accompanying,O
prospectus,O
are,O
not,O
an,O
offer,O
to,O
sell,O
these,O
securities,O
and,O
are,O
not,O
soliciting,O
an,O
offer,O
to,O
buy,O
these,O
securities,O
in,O
any,O
jurisdiction,O
where,O
the,O
offer,O
or,O
sale,O
is,O
not,O
permitted,O
.,O
,O
Filed,O
pursuant,O
to,O
Rule,O
424,O
(,O
b,O
),O
(,O
5,O
),O
Registration,O
No.,O
333-157354,O
PROSPECTUS,O
SUPPLEMENT,O
(,O
To,O
prospectus,O
dated,O
February,O
23,O
",",O
2010,O
),O
We,O
are,O
offering,O
$,O
400.0,O
million,O
aggregate,O
principal,O
amount,O
of,O
%,O
Senior,O
Notes,O
due,O
2018,O
(,O
the,O
notes,O
),O
.,O
,O
Interest,O
on,O
the,O
notes,O
will,O
be,O
payable,O
on,O
and,O
of,O
each,O
year,O
",",O
beginning,O
on,O
",",O
2010,O
.,O
,O
The,O
notes,O
will,O
mature,O
on,O
",",O
2018,O
.,O
,O
We,O
may,O
redeem,O
some,O
or,O
all,O
of,O
the,O
notes,O
at,O
any,O
time,O
prior,O
to,O
their,O
maturity,O
at,O
the,O
applicable,O
redemption,O
price,O
described,O
in,O
this,O
prospectus,O
supplement,O
",",O
plus,O
accrued,O
and,O
unpaid,O
interest,O
to,O
",",O
but,O
not,O
including,O
",",O
the,O
date,O
of,O
redemption,O
.,O
,O
We,O
may,O
also,O
redeem,O
up,O
to,O
35,O
%,O
of,O
the,O
notes,O
prior,O
to,O
",",O
2013,O
with,O
the,O
net,O
cash,O
proceeds,O
we,O
receive,O
from,O
certain,O
public,O
equity,O
offerings,O
.,O
,O
If,O
a,O
change,O
of,O
control,O
",",O
as,O
described,O
in,O
this,O
prospectus,O
supplement,O
under,O
the,O
heading,O
Description,O
of,O
the,O
Notes,O
Repurchase,O
Upon,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
occurs,O
",",O
we,O
will,O
be,O
required,O
to,O
offer,O
to,O
purchase,O
the,O
notes,O
from,O
the,O
holders,O
under,O
certain,O
circumstances,O
.,O
,O
The,O
notes,O
will,O
be,O
our,O
senior,O
unsecured,O
obligations,O
and,O
will,O
rank,O
equally,O
in,O
right,O
of,O
payment,O
with,O
all,O
of,O
our,O
other,O
existing,O
and,O
future,O
senior,O
indebtedness,O
and,O
senior,O
in,O
right,O
of,O
payment,O
to,O
all,O
of,O
our,O
existing,O
and,O
future,O
subordinated,O
indebtedness,O
.,O
,O
The,O
notes,O
will,O
be,O
effectively,O
subordinated,O
to,O
any,O
of,O
our,O
existing,O
and,O
future,O
secured,O
indebtedness,O
to,O
the,O
extent,O
of,O
the,O
value,O
of,O
the,O
collateral,O
securing,O
such,O
indebtedness,O
.,O
,O
The,O
notes,O
will,O
be,O
guaranteed,O
on,O
a,O
senior,O
unsecured,O
basis,O
by,O
substantially,O
all,O
of,O
our,O
subsidiaries,O
.,O
,O
The,O
notes,O
will,O
be,O
issued,O
only,O
in,O
registered,O
form,O
in,O
minimum,O
denominations,O
of,O
$,O
"2,000",O
and,O
integral,O
multiples,O
of,O
$,O
"1,000",O
in,O
excess,O
thereof,O
.,O
,O
The,O
notes,O
will,O
not,O
be,O
listed,O
on,O
any,O
securities,O
exchange,O
.,O
,O
Currently,O
",",O
there,O
is,O
no,O
public,O
market,O
for,O
the,O
notes,O
.,O
,O
Investing,O
in,O
the,O
notes,O
involves,O
risks,O
that,O
are,O
described,O
under,O
beginning,O
on,O
page,O
S-9,O
of,O
this,O
prospectus,O
supplement,O
.,O
,O
Neither,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
nor,O
any,O
state,O
securities,O
commission,O
has,O
approved,O
or,O
disapproved,O
of,O
these,O
securities,O
or,O
determined,O
if,O
this,O
prospectus,O
supplement,O
or,O
the,O
accompanying,O
prospectus,O
is,O
truthful,O
or,O
complete,O
.,O
,O
Any,O
representation,O
to,O
the,O
contrary,O
is,O
a,O
criminal,O
offense,O
.,O
,O
The,O
notes,O
will,O
be,O
ready,O
for,O
delivery,O
in,O
book-entry,O
form,O
only,O
through,O
the,O
facilities,O
of,O
The,I-BUSINESS
Depository,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
for,O
the,O
accounts,O
of,O
its,O
participants,O
",",O
including,O
Euroclear,I-BUSINESS
Bank,I-BUSINESS
S.A./N.V.,I-BUSINESS
",",O
as,O
operator,O
of,O
the,O
Euroclear,I-BUSINESS
System,I-BUSINESS
",",O
and,O
Clearstream,I-BUSINESS
Banking,I-BUSINESS
",",I-BUSINESS
société,I-BUSINESS
anonyme,I-BUSINESS
",",O
on,O
or,O
about,O
April,O
",",O
2010,O
.,O
,O
In,O
making,O
your,O
investment,O
decision,O
",",O
you,O
should,O
rely,O
only,O
on,O
the,O
information,O
contained,O
or,O
incorporated,O
by,O
reference,O
in,O
this,O
prospectus,O
supplement,O
and,O
the,O
accompanying,O
prospectus,O
.,O
,O
We,O
have,O
not,O
",",O
and,O
the,O
underwriters,O
have,O
not,O
",",O
authorized,O
anyone,O
to,O
provide,O
you,O
with,O
additional,O
or,O
different,O
information,O
.,O
,O
If,O
anyone,O
provides,O
you,O
with,O
different,O
or,O
inconsistent,O
information,O
",",O
you,O
should,O
not,O
rely,O
on,O
it,O
.,O
,O
We,O
are,O
not,O
making,O
an,O
offer,O
of,O
these,O
securities,O
in,O
any,O
jurisdiction,O
where,O
the,O
offer,O
is,O
not,O
permitted,O
.,O
,O
You,O
should,O
not,O
assume,O
that,O
the,O
information,O
contained,O
in,O
or,O
incorporated,O
by,O
reference,O
in,O
this,O
prospectus,O
supplement,O
or,O
the,O
accompanying,O
prospectus,O
is,O
accurate,O
as,O
of,O
any,O
time,O
subsequent,O
to,O
the,O
date,O
of,O
such,O
information,O
.,O
,O
This,O
prospectus,O
supplement,O
and,O
the,O
documents,O
incorporated,O
by,O
reference,O
herein,O
contain,O
forward-looking,O
statements,O
within,O
the,O
meaning,O
of,O
Section,O
27A,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
and,O
Section,O
21E,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
.,O
,O
All,O
statements,O
",",O
other,O
than,O
statements,O
of,O
historical,O
fact,O
",",O
included,O
or,O
incorporated,O
by,O
reference,O
herein,O
regarding,O
our,O
strategy,O
",",O
future,O
operations,O
",",O
financial,O
position,O
",",O
estimated,O
financial,O
results,O
",",O
planned,O
transactions,O
",",O
projected,O
costs,O
",",O
prospects,O
",",O
goals,O
and,O
objectives,O
are,O
forward-looking,O
statements,O
.,O
,O
In,O
some,O
cases,O
",",O
you,O
can,O
identify,O
forward-looking,O
statements,O
by,O
terminology,O
such,O
as,O
anticipate,O
",",O
believe,O
",",O
estimate,O
",",O
expect,O
",",O
intend,O
",",O
may,O
",",O
plan,O
",",O
seek,O
",",O
project,O
",",O
will,O
",",O
would,O
",",O
and,O
similar,O
expressions,O
or,O
expressions,O
of,O
the,O
negative,O
of,O
these,O
terms,O
.,O
,O
Such,O
statements,O
are,O
only,O
predictions,O
and,O
",",O
accordingly,O
",",O
are,O
subject,O
to,O
substantial,O
risks,O
",",O
uncertainties,O
and,O
assumptions,O
.,O
,O
We,O
intend,O
for,O
our,O
forward-looking,O
statements,O
to,O
be,O
covered,O
by,O
the,O
safe,O
harbor,O
provisions,O
for,O
forward-looking,O
statements,O
contained,O
in,O
the,O
Private,I-LEGISLATION/ACT
Securities,I-LEGISLATION/ACT
Litigation,I-LEGISLATION/ACT
Reform,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1995,I-LEGISLATION/ACT
",",O
and,O
we,O
set,O
forth,O
this,O
statement,O
in,O
order,O
to,O
comply,O
with,O
such,O
safe,O
harbor,O
provisions,O
.,O
,O
Although,O
we,O
believe,O
that,O
the,O
expectations,O
",",O
plans,O
",",O
intentions,O
",",O
and,O
projections,O
reflected,O
in,O
our,O
forward-looking,O
statements,O
are,O
reasonable,O
",",O
such,O
statements,O
are,O
subject,O
to,O
known,O
and,O
unknown,O
risks,O
",",O
uncertainties,O
",",O
and,O
other,O
factors,O
that,O
may,O
cause,O
our,O
actual,O
results,O
",",O
performance,O
",",O
or,O
achievements,O
to,O
be,O
materially,O
different,O
from,O
any,O
future,O
results,O
",",O
performance,O
",",O
or,O
achievements,O
expressed,O
or,O
implied,O
by,O
the,O
forward-looking,O
statements,O
.,O
,O
The,O
risks,O
",",O
uncertainties,O
",",O
and,O
other,O
factors,O
that,O
our,O
stockholders,O
and,O
prospective,O
investors,O
should,O
consider,O
include,O
",",O
but,O
are,O
not,O
limited,O
to,O
",",O
the,O
following,O
:,O
,O
Please,O
refer,O
to,O
our,O
most,O
recent,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
and,O
to,O
our,O
subsequent,O
filings,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
the,O
SEC,I-GOVERNMENT
),O
for,O
additional,O
discussion,O
of,O
the,O
foregoing,O
risks,O
.,O
,O
Forward-looking,O
statements,O
speak,O
only,O
as,O
of,O
the,O
date,O
on,O
which,O
they,O
are,O
made,O
",",O
and,O
we,O
undertake,O
no,O
obligation,O
to,O
publicly,O
update,O
or,O
revise,O
any,O
forward-looking,O
statements,O
to,O
reflect,O
subsequent,O
events,O
or,O
circumstances,O
",",O
except,O
as,O
required,O
by,O
law,O
.,O
,O
This,O
document,O
is,O
in,O
two,O
parts,O
.,O
,O
The,O
first,O
part,O
is,O
this,O
prospectus,O
supplement,O
",",O
which,O
contains,O
the,O
terms,O
of,O
this,O
offering,O
of,O
notes,O
.,O
,O
The,O
second,O
part,O
is,O
the,O
accompanying,O
prospectus,O
dated,O
February,O
23,O
",",O
2010,O
",",O
which,O
is,O
part,O
of,O
our,O
Registration,O
Statement,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
(,O
Registration,O
No.,O
333-157354,O
),O
",",O
which,O
gives,O
more,O
general,O
information,O
",",O
some,O
of,O
which,O
may,O
not,O
apply,O
to,O
this,O
offering,O
.,O
,O
This,O
prospectus,O
supplement,O
and,O
the,O
information,O
incorporated,O
by,O
reference,O
in,O
this,O
prospectus,O
supplement,O
may,O
add,O
to,O
",",O
update,O
or,O
change,O
the,O
information,O
in,O
the,O
accompanying,O
prospectus,O
.,O
,O
If,O
information,O
in,O
this,O
prospectus,O
supplement,O
is,O
inconsistent,O
with,O
information,O
in,O
the,O
accompanying,O
prospectus,O
",",O
the,O
information,O
in,O
this,O
prospectus,O
supplement,O
will,O
apply,O
and,O
will,O
supersede,O
the,O
information,O
in,O
the,O
accompanying,O
prospectus,O
.,O
,O
It,O
is,O
important,O
for,O
you,O
to,O
read,O
and,O
consider,O
all,O
information,O
contained,O
or,O
incorporated,O
by,O
reference,O
in,O
this,O
prospectus,O
supplement,O
and,O
the,O
accompanying,O
prospectus,O
in,O
making,O
your,O
investment,O
decision,O
.,O
,O
You,O
should,O
also,O
read,O
and,O
consider,O
the,O
information,O
in,O
the,O
documents,O
to,O
which,O
we,O
have,O
referred,O
you,O
in,O
Where,O
You,O
Can,O
Find,O
Additional,O
Information,O
in,O
the,O
accompanying,O
prospectus,O
.,O
,O
No,O
person,O
is,O
authorized,O
to,O
give,O
any,O
information,O
or,O
to,O
make,O
any,O
representations,O
other,O
than,O
those,O
contained,O
or,O
incorporated,O
by,O
reference,O
in,O
this,O
prospectus,O
supplement,O
or,O
the,O
accompanying,O
prospectus,O
and,O
",",O
if,O
given,O
or,O
made,O
",",O
such,O
information,O
or,O
representations,O
must,O
not,O
be,O
relied,O
upon,O
as,O
having,O
been,O
authorized,O
.,O
,O
Neither,O
the,O
delivery,O
of,O
this,O
prospectus,O
supplement,O
and,O
the,O
accompanying,O
prospectus,O
",",O
nor,O
any,O
sale,O
made,O
hereunder,O
",",O
shall,O
under,O
any,O
circumstances,O
create,O
any,O
implication,O
that,O
there,O
has,O
been,O
no,O
change,O
in,O
our,O
affairs,O
since,O
the,O
date,O
of,O
this,O
prospectus,O
supplement,O
",",O
or,O
that,O
the,O
information,O
contained,O
or,O
incorporated,O
by,O
reference,O
in,O
this,O
prospectus,O
supplement,O
or,O
the,O
accompanying,O
prospectus,O
is,O
correct,O
as,O
of,O
any,O
time,O
subsequent,O
to,O
the,O
date,O
of,O
such,O
information,O
.,O
,O
The,O
distribution,O
of,O
this,O
prospectus,O
supplement,O
and,O
the,O
accompanying,O
prospectus,O
and,O
the,O
offering,O
of,O
the,O
notes,O
in,O
certain,O
jurisdictions,O
may,O
be,O
restricted,O
by,O
law,O
.,O
,O
This,O
prospectus,O
supplement,O
and,O
the,O
accompanying,O
prospectus,O
do,O
not,O
constitute,O
an,O
offer,O
",",O
or,O
an,O
invitation,O
on,O
our,O
behalf,O
or,O
the,O
underwriters,O
or,O
any,O
of,O
them,O
",",O
to,O
subscribe,O
to,O
or,O
purchase,O
any,O
of,O
the,O
notes,O
",",O
and,O
may,O
not,O
be,O
used,O
for,O
or,O
in,O
connection,O
with,O
an,O
offer,O
or,O
solicitation,O
by,O
anyone,O
",",O
in,O
any,O
jurisdiction,O
in,O
which,O
such,O
an,O
offer,O
or,O
solicitation,O
is,O
not,O
authorized,O
or,O
to,O
any,O
person,O
to,O
whom,O
it,O
is,O
unlawful,O
to,O
make,O
such,O
an,O
offer,O
or,O
solicitation,O
.,O
,O
For,O
convenience,O
",",O
the,O
terms,O
AutoNation,I-BUSINESS
",",O
the,O
Company,O
",",O
we,O
",",O
us,O
",",O
and,O
our,O
are,O
used,O
in,O
this,O
prospectus,O
to,O
refer,O
to,O
AutoNation,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
its,O
subsidiaries,O
",",O
unless,O
otherwise,O
indicated,O
or,O
the,O
context,O
otherwise,O
requires,O
.,O
,O
Our,O
dealership,O
operations,O
are,O
conducted,O
by,O
our,O
subsidiaries,O
.,O
,O
We,O
have,O
included,O
financial,O
measures,O
of,O
adjusted,O
EBITDA,O
in,O
this,O
prospectus,O
supplement,O
",",O
which,O
is,O
a,O
non-GAAP,I-MISCELLANEOUS
financial,O
measure,O
as,O
defined,O
under,O
the,O
rules,O
of,O
the,O
SEC,I-GOVERNMENT
.,O
,O
Adjusted,O
EBITDA,O
represents,O
net,O
income,O
before,O
interest,O
expense,O
",",O
income,O
tax,O
expense,O
",",O
depreciation,O
and,O
amortization,O
expense,O
",",O
loss,O
from,O
discontinued,O
operations,O
(,O
net,O
of,O
income,O
taxes,O
),O
",",O
goodwill,O
and,O
franchise,O
rights,O
impairments,O
",",O
gain,O
on,O
senior,O
note,O
repurchases,O
and,O
certain,O
other,O
items,O
.,O
,O
Adjusted,O
EBITDA,O
is,O
not,O
required,O
by,O
",",O
or,O
presented,O
in,O
accordance,O
with,O
",",O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
or,O
GAAP,I-LEGISLATION/ACT
.,O
,O
Adjusted,O
EBITDA,O
is,O
a,O
performance,O
measure,O
that,O
is,O
used,O
by,O
our,O
management,O
",",O
and,O
we,O
believe,O
is,O
commonly,O
reported,O
and,O
widely,O
used,O
by,O
investors,O
and,O
other,O
interested,O
parties,O
",",O
to,O
evaluate,O
a,O
company,O
s,O
operating,O
performance,O
on,O
a,O
consistent,O
basis,O
after,O
removing,O
the,O
impact,O
of,O
capital,O
structure,O
",",O
asset,O
base,O
",",O
items,O
beyond,O
the,O
control,O
of,O
management,O
(,O
such,O
as,O
income,O
taxes,O
),O
and,O
certain,O
other,O
items,O
.,O
,O
Adjusted,O
EBITDA,O
has,O
limitations,O
as,O
an,O
analytical,O
tool,O
",",O
and,O
you,O
should,O
not,O
consider,O
it,O
in,O
isolation,O
or,O
as,O
a,O
substitute,O
for,O
analysis,O
of,O
our,O
results,O
as,O
reported,O
under,O
GAAP,I-LEGISLATION/ACT
.,O
,O
Some,O
of,O
these,O
limitations,O
are,O
:,O
,O
Because,O
of,O
these,O
limitations,O
",",O
adjusted,O
EBITDA,O
should,O
not,O
be,O
considered,O
as,O
a,O
measure,O
of,O
discretionary,O
cash,O
available,O
to,O
us,O
to,O
invest,O
in,O
the,O
operation,O
and,O
growth,O
of,O
our,O
business,O
or,O
as,O
a,O
measure,O
of,O
cash,O
that,O
will,O
be,O
available,O
to,O
us,O
to,O
meet,O
our,O
obligations,O
.,O
,O
You,O
should,O
compensate,O
for,O
these,O
limitations,O
by,O
relying,O
primarily,O
on,O
our,O
GAAP,I-LEGISLATION/ACT
results,O
and,O
using,O
adjusted,O
EBITDA,O
as,O
a,O
supplement,O
.,O
,O
In,O
evaluating,O
adjusted,O
EBITDA,O
",",O
you,O
should,O
be,O
aware,O
that,O
in,O
the,O
future,O
we,O
may,O
incur,O
expenses,O
similar,O
to,O
those,O
for,O
which,O
adjustments,O
are,O
made,O
in,O
calculating,O
adjusted,O
EBITDA,O
.,O
,O
Our,O
presentation,O
of,O
adjusted,O
EBITDA,O
should,O
not,O
be,O
construed,O
as,O
a,O
basis,O
to,O
infer,O
that,O
our,O
future,O
results,O
will,O
be,O
unaffected,O
by,O
unusual,O
or,O
non-recurring,O
items,O
.,O
,O
Adjusted,O
EBITDA,O
does,O
not,O
reflect,O
the,O
impact,O
of,O
earnings,O
or,O
charges,O
resulting,O
from,O
certain,O
matters,O
we,O
consider,O
to,O
be,O
indicative,O
of,O
our,O
ability,O
to,O
service,O
our,O
debt,O
over,O
the,O
period,O
such,O
debt,O
is,O
expected,O
to,O
remain,O
outstanding,O
.,O
,O
The,O
non-GAAP,I-MISCELLANEOUS
measure,O
of,O
adjusted,O
EBITDA,O
used,O
in,O
this,O
prospectus,O
supplement,O
may,O
be,O
different,O
from,O
similar,O
measures,O
used,O
by,O
other,O
companies,O
",",O
limiting,O
their,O
usefulness,O
as,O
comparable,O
measures,O
.,O
,O
This,O
non-GAAP,I-MISCELLANEOUS
financial,O
measure,O
should,O
not,O
be,O
considered,O
as,O
an,O
alternative,O
to,O
net,O
income,O
",",O
as,O
an,O
indicator,O
of,O
operating,O
performance,O
or,O
liquidity,O
.,O
,O
See,O
footnote,O
(,O
3,O
),O
to,O
the,O
summary,O
consolidated,O
financial,O
information,O
under,O
Prospectus,O
Supplement,O
Summary,O
—,O
Summary,O
Consolidated,O
Financial,O
Information,O
for,O
a,O
description,O
of,O
the,O
calculation,O
of,O
adjusted,O
EBITDA,O
and,O
an,O
unaudited,O
reconciliation,O
of,O
adjusted,O
EBITDA,O
to,O
net,O
income,O
.,O
,O
This,O
summary,O
highlights,O
selected,O
information,O
about,O
us,O
and,O
this,O
offering,O
.,O
,O
It,O
does,O
not,O
contain,O
all,O
of,O
the,O
information,O
that,O
may,O
be,O
important,O
to,O
you,O
in,O
deciding,O
whether,O
to,O
purchase,O
the,O
notes,O
.,O
,O
We,O
encourage,O
you,O
to,O
read,O
the,O
entire,O
prospectus,O
supplement,O
",",O
the,O
accompanying,O
prospectus,O
and,O
the,O
documents,O
that,O
we,O
have,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
that,O
are,O
incorporated,O
by,O
reference,O
herein,O
.,O
,O
AutoNation,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
through,O
its,O
subsidiaries,O
",",O
is,O
the,O
largest,O
automotive,O
retailer,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
As,O
of,O
December,O
31,O
",",O
2009,O
",",O
we,O
owned,O
and,O
operated,O
246,O
new,O
vehicle,O
franchises,O
from,O
203,O
stores,O
located,O
in,O
major,O
metropolitan,O
markets,O
",",O
predominantly,O
in,O
the,O
Sunbelt,I-LOCATION
region,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
Our,O
stores,O
",",O
which,O
we,O
believe,O
are,O
some,O
of,O
the,O
most,O
recognizable,O
and,O
well-known,O
in,O
our,O
key,O
markets,O
",",O
sell,O
33,O
different,O
brands,O
of,O
new,O
vehicles,O
.,O
,O
The,O
core,O
brands,O
of,O
vehicles,O
that,O
we,O
sell,O
",",O
representing,O
approximately,O
96,O
%,O
of,O
the,O
new,O
vehicles,O
that,O
we,O
sold,O
in,O
2009,O
",",O
are,O
manufactured,O
by,O
Toyota,I-BUSINESS
",",O
Ford,I-BUSINESS
",",O
Honda,I-BUSINESS
",",O
Nissan,I-BUSINESS
",",O
General,I-BUSINESS
Motors,I-BUSINESS
",",O
Mercedes,I-BUSINESS
",",O
BMW,I-BUSINESS
",",O
and,O
Chrysler,I-BUSINESS
.,O
,O
We,O
offer,O
a,O
diversified,O
range,O
of,O
automotive,O
products,O
and,O
services,O
",",O
including,O
new,O
vehicles,O
",",O
used,O
vehicles,O
",",O
parts,O
and,O
automotive,O
services,O
and,O
automotive,O
finance,O
and,O
insurance,O
products,O
.,O
,O
We,O
also,O
arrange,O
financing,O
for,O
vehicle,O
purchases,O
through,O
third-party,O
finance,O
sources,O
.,O
,O
We,O
believe,O
that,O
the,O
significant,O
scale,O
of,O
our,O
operations,O
and,O
the,O
quality,O
of,O
our,O
managerial,O
talent,O
allow,O
us,O
to,O
achieve,O
efficiencies,O
in,O
our,O
key,O
markets,O
by,O
",",O
among,O
other,O
things,O
",",O
leveraging,O
our,O
market,O
brands,O
and,O
advertising,O
",",O
improving,O
asset,O
management,O
",",O
implementing,O
standardized,O
processes,O
and,O
increasing,O
productivity,O
across,O
all,O
of,O
our,O
stores,O
.,O
,O
We,O
were,O
incorporated,O
in,O
Delaware,I-LOCATION
in,O
1991,O
.,O
,O
Our,O
principal,O
executive,O
offices,O
are,O
located,O
at,O
200,O
SW,I-LOCATION
1st,I-LOCATION
Ave,I-LOCATION
",",O
Fort,I-LOCATION
Lauderdale,I-LOCATION
",",O
FL,I-LOCATION
33301,O
",",O
and,O
our,O
telephone,O
number,O
at,O
that,O
address,O
is,O
(,O
954,O
),O
769-6000,O
.,O
,O
We,O
maintain,O
a,O
web,O
site,O
at,O
www.autonation.com,O
.,O
,O
Information,O
contained,O
in,O
or,O
accessed,O
through,O
our,O
web,O
site,O
does,O
not,O
constitute,O
a,O
part,O
of,O
this,O
prospectus,O
supplement,O
.,O
,O
The,O
Tender,O
Offers,O
and,O
Consent,O
Solicitations,O
On,O
March,O
31,O
",",O
2010,O
",",O
we,O
commenced,O
cash,O
tender,O
offers,O
(,O
each,O
an,O
Offer,O
and,O
collectively,O
",",O
the,O
Offers,O
),O
for,O
any,O
and,O
all,O
of,O
our,O
outstanding,O
(,O
i,O
),O
Floating,O
Rate,O
Notes,O
due,O
2013,O
(,O
the,O
Floating,O
Rate,O
Notes,O
),O
and,O
(,O
ii,O
),O
7,O
%,O
Senior,O
Notes,O
due,O
2014,O
(,O
the,O
Fixed,O
Rate,O
Notes,O
and,O
",",O
together,O
with,O
the,O
Floating,O
Rate,O
Notes,O
",",O
the,O
Old,O
Notes,O
),O
.,O
,O
In,O
conjunction,O
with,O
the,O
Offers,O
",",O
we,O
also,O
are,O
soliciting,O
consents,O
to,O
shorten,O
the,O
notice,O
period,O
required,O
to,O
undertake,O
an,O
optional,O
redemption,O
of,O
the,O
notes,O
and,O
to,O
eliminate,O
substantially,O
all,O
of,O
the,O
restrictive,O
covenants,O
and,O
certain,O
events,O
of,O
default,O
contained,O
in,O
the,O
indenture,O
governing,O
the,O
Old,O
Notes,O
.,O
,O
The,O
total,O
consideration,O
payable,O
in,O
respect,O
of,O
the,O
Floating,O
Rate,O
Notes,O
that,O
are,O
validly,O
tendered,O
",",O
and,O
for,O
which,O
the,O
related,O
consents,O
are,O
delivered,O
prior,O
to,O
the,O
consent,O
deadline,O
",",O
is,O
$,O
"1,010.00",O
per,O
$,O
"1,000",O
principal,O
amount,O
of,O
the,O
Floating,O
Rate,O
Notes,O
",",O
plus,O
accrued,O
but,O
unpaid,O
interest,O
up,O
to,O
but,O
excluding,O
the,O
settlement,O
date,O
.,O
,O
The,O
total,O
consideration,O
payable,O
in,O
respect,O
of,O
the,O
Fixed,O
Rate,O
Notes,O
that,O
are,O
validly,O
tendered,O
",",O
and,O
for,O
which,O
the,O
related,O
consents,O
are,O
delivered,O
prior,O
to,O
the,O
consent,O
deadline,O
",",O
is,O
$,O
"1,035.00",O
per,O
$,O
"1,000",O
principal,O
amount,O
of,O
the,O
Fixed,O
Rate,O
Notes,O
",",O
plus,O
accrued,O
but,O
unpaid,O
interest,O
up,O
to,O
but,O
excluding,O
the,O
settlement,O
date,O
.,O
,O
To,O
be,O
eligible,O
to,O
receive,O
the,O
total,O
consideration,O
for,O
the,O
Floating,O
Rate,O
Notes,O
or,O
the,O
Fixed,O
Rate,O
Notes,O
",",O
as,O
applicable,O
",",O
which,O
includes,O
a,O
consent,O
payment,O
of,O
$,O
30.00,O
per,O
$,O
"1,000",O
principal,O
amount,O
of,O
Floating,O
Rate,O
Notes,O
or,O
Fixed,O
Rate,O
Notes,O
",",O
as,O
applicable,O
",",O
holders,O
must,O
tender,O
their,O
Old,O
Notes,O
",",O
and,O
deliver,O
the,O
related,O
consents,O
",",O
prior,O
to,O
the,O
consent,O
deadline,O
",",O
which,O
is,O
5:00,O
p.m.,O
",",O
New,I-LOCATION
York,I-LOCATION
City,I-LOCATION
time,O
",",O
on,O
April,O
13,O
",",O
2010,O
",",O
unless,O
extended,O
.,O
,O
This,O
prospectus,O
supplement,O
is,O
not,O
an,O
offer,O
to,O
purchase,O
the,O
Old,O
Notes,O
and,O
the,O
tender,O
offers,O
and,O
consent,O
solicitations,O
are,O
made,O
only,O
by,O
and,O
pursuant,O
to,O
the,O
terms,O
of,O
the,O
Offer,O
to,O
Purchase,O
and,O
Consent,O
Solicitation,O
Statement,O
dated,O
March,O
31,O
",",O
2010,O
",",O
as,O
the,O
same,O
may,O
be,O
amended,O
or,O
supplemented,O
.,O
,O
The,O
Old,O
Notes,O
are,O
currently,O
redeemable,O
.,O
,O
On,O
April,O
15,O
",",O
2010,O
",",O
the,O
Floating,O
Rate,O
Notes,O
will,O
be,O
redeemable,O
at,O
$,O
"1,010.00",O
per,O
$,O
"1,000",O
principal,O
amount,O
of,O
Floating,O
Rate,O
Notes,O
plus,O
accrued,O
and,O
unpaid,O
interest,O
and,O
the,O
Fixed,O
Rate,O
Notes,O
will,O
be,O
redeemable,O
at,O
$,O
"1,035.00",O
per,O
$,O
"1,000",O
principal,O
amount,O
of,O
Fixed,O
Rate,O
Notes,O
plus,O
accrued,O
and,O
unpaid,O
interest,O
.,O
,O
Following,O
the,O
Expiration,O
Time,O
",",O
we,O
may,O
elect,O
to,O
redeem,O
and,O
satisfy,O
and,O
discharge,O
",",O
in,O
accordance,O
with,O
the,O
terms,O
and,O
conditions,O
of,O
the,O
indenture,O
governing,O
the,O
Old,O
Notes,O
",",O
any,O
or,O
all,O
Old,O
Notes,O
not,O
tendered,O
and,O
accepted,O
for,O
purchase,O
pursuant,O
to,O
the,O
Offers,O
.,O
,O
This,O
prospectus,O
supplement,O
does,O
not,O
constitute,O
a,O
notice,O
of,O
redemption,O
of,O
the,O
Old,O
Notes,O
or,O
an,O
obligation,O
to,O
issue,O
a,O
notice,O
of,O
redemption,O
of,O
Old,O
Notes,O
.,O
,O
In,O
the,O
event,O
that,O
we,O
elect,O
to,O
exercise,O
our,O
redemption,O
rights,O
in,O
respect,O
of,O
the,O
Old,O
Notes,O
",",O
the,O
appropriate,O
notice,O
or,O
notices,O
of,O
redemption,O
will,O
be,O
issued,O
at,O
a,O
later,O
date,O
or,O
dates,O
upon,O
the,O
terms,O
and,O
conditions,O
set,O
forth,O
in,O
the,O
indenture,O
governing,O
the,O
Old,O
Notes,O
.,O
,O
Amendment,O
to,O
Existing,O
Credit,O
Agreement,O
We,O
are,O
seeking,O
consents,O
from,O
our,O
existing,O
lenders,O
under,O
our,O
existing,O
credit,O
agreement,O
",",O
which,O
we,O
refer,O
to,O
as,O
the,O
existing,O
credit,O
agreement,O
",",O
to,O
(,O
i,O
),O
extend,O
the,O
maturity,O
date,O
from,O
July,O
18,O
",",O
2012,O
to,O
July,O
18,O
",",O
2014,O
of,O
all,O
or,O
a,O
portion,O
of,O
the,O
term,O
loan,O
facility,O
and,O
all,O
or,O
a,O
portion,O
of,O
the,O
revolving,O
credit,O
facility,O
",",O
(,O
ii,O
),O
reduce,O
the,O
size,O
of,O
the,O
term,O
loan,O
facility,O
(,O
and,O
make,O
a,O
corresponding,O
prepayment,O
),O
from,O
$,O
600.0,O
million,O
to,O
not,O
less,O
than,O
approximately,O
$,O
520.0,O
million,O
",",O
(,O
iii,O
),O
reduce,O
the,O
size,O
of,O
the,O
revolving,O
credit,O
facility,O
from,O
$,O
700.0,O
million,O
to,O
not,O
less,O
than,O
$,O
616.0,O
million,O
and,O
(,O
iv,O
),O
amend,O
certain,O
other,O
provisions,O
.,O
,O
We,O
refer,O
to,O
the,O
existing,O
credit,O
agreement,O
",",O
as,O
it,O
may,O
be,O
amended,O
by,O
the,O
contemplated,O
amendments,O
",",O
as,O
the,O
amended,O
credit,O
agreement,O
.,O
,O
Our,O
amended,O
credit,O
agreement,O
will,O
provide,O
for,O
a,O
bifurcation,O
of,O
the,O
current,O
term,O
loan,O
facility,O
into,O
a,O
tranche,O
maturing,O
on,O
July,O
18,O
",",O
2012,O
and,O
a,O
tranche,O
maturing,O
on,O
July,O
18,O
",",O
2014,O
(,O
provided,O
that,O
if,O
all,O
term,O
loan,O
lenders,O
agree,O
to,O
extend,O
the,O
maturity,O
date,O
of,O
their,O
term,O
loans,O
",",O
the,O
term,O
loan,O
facility,O
will,O
not,O
be,O
bifurcated,O
and,O
will,O
consist,O
solely,O
of,O
a,O
tranche,O
maturing,O
on,O
July,O
18,O
",",O
2014,O
),O
and,O
a,O
bifurcation,O
of,O
the,O
current,O
revolving,O
credit,O
facility,O
into,O
a,O
tranche,O
terminating,O
on,O
July,O
18,O
",",O
2012,O
and,O
a,O
tranche,O
terminating,O
on,O
July,O
18,O
",",O
2014,O
(,O
provided,O
that,O
if,O
all,O
revolving,O
lenders,O
agree,O
to,O
extend,O
the,O
maturity,O
date,O
of,O
their,O
revolving,O
loans,O
",",O
the,O
revolving,O
credit,O
facility,O
will,O
not,O
be,O
bifurcated,O
and,O
will,O
consist,O
solely,O
of,O
a,O
tranche,O
maturing,O
on,O
July,O
18,O
",",O
2014,O
),O
.,O
,O
We,O
are,O
also,O
seeking,O
consents,O
from,O
our,O
existing,O
lenders,O
under,O
our,O
existing,O
credit,O
agreement,O
to,O
modify,O
the,O
capitalization,O
ratio,O
covenant,O
and,O
change,O
the,O
maximum,O
leverage,O
ratio,O
covenant,O
from,O
2.75x,O
to,O
3.25x,O
.,O
,O
We,O
may,O
not,O
be,O
able,O
to,O
amend,O
our,O
existing,O
credit,O
agreement,O
at,O
all,O
or,O
to,O
the,O
full,O
extent,O
described,O
above,O
.,O
,O
This,O
offering,O
is,O
not,O
conditioned,O
on,O
an,O
amendment,O
and,O
extension,O
of,O
the,O
existing,O
credit,O
agreement,O
.,O
,O
If,O
we,O
are,O
unable,O
to,O
amend,O
the,O
existing,O
credit,O
agreement,O
or,O
are,O
only,O
able,O
to,O
amend,O
certain,O
provisions,O
of,O
the,O
existing,O
credit,O
agreement,O
",",O
the,O
descriptions,O
of,O
the,O
various,O
amendments,O
described,O
above,O
may,O
be,O
subject,O
to,O
change,O
.,O
,O
In,O
this,O
prospectus,O
supplement,O
",",O
the,O
term,O
transactions,O
refers,O
to,O
",",O
collectively,O
",",O
(,O
i,O
),O
the,O
offering,O
of,O
the,O
notes,O
pursuant,O
to,O
this,O
prospectus,O
supplement,O
",",O
(,O
ii,O
),O
the,O
Offers,O
and,O
related,O
consent,O
solicitations,O
for,O
each,O
series,O
of,O
Old,O
Notes,O
",",O
including,O
the,O
assumed,O
purchase,O
of,O
all,O
Old,O
Notes,O
pursuant,O
to,O
the,O
Offers,O
for,O
the,O
total,O
consideration,O
offered,O
pursuant,O
thereto,O
and,O
(,O
iii,O
),O
the,O
amendment,O
of,O
our,O
existing,O
credit,O
agreement,O
described,O
above,O
and,O
the,O
associated,O
paydown,O
of,O
a,O
portion,O
of,O
the,O
term,O
loan,O
facility,O
thereunder,O
.,O
,O
Estimated,O
Financial,O
Results,O
for,O
the,O
Quarter,O
Ending,O
March,O
31,O
",",O
2010,O
On,O
March,O
31,O
",",O
2010,O
",",O
the,O
Company,O
issued,O
a,O
press,O
release,O
announcing,O
estimated,O
financial,O
results,O
for,O
the,O
first,O
quarter,O
of,O
2010,O
.,O
,O
Based,O
on,O
preliminary,O
information,O
",",O
the,O
Company,O
currently,O
expects,O
first,O
quarter,O
2010,O
revenue,O
to,O
be,O
approximately,O
$,O
2.8,O
billion,O
and,O
first,O
quarter,O
2010,O
earnings,O
per,O
share,O
from,O
continuing,O
operations,O
to,O
be,O
in,O
the,O
range,O
of,O
$,O
0.29,O
to,O
$,O
0.32,O
.,O
,O
The,O
Company,O
also,O
expects,O
new,O
vehicle,O
sales,O
to,O
be,O
approximately,O
"45,000",O
units,O
",",O
or,O
up,O
approximately,O
18,O
%,O
as,O
compared,O
to,O
the,O
same,O
period,O
in,O
2009,O
",",O
and,O
used,O
vehicle,O
sales,O
to,O
be,O
approximately,O
"38,000",O
units,O
",",O
or,O
up,O
approximately,O
12,O
%,O
as,O
compared,O
to,O
the,O
same,O
period,O
in,O
2009,O
.,O
,O
The,O
foregoing,O
estimates,O
are,O
based,O
on,O
preliminary,O
information,O
about,O
the,O
first,O
quarter,O
of,O
2010,O
.,O
,O
The,O
Company,O
cautions,O
that,O
it,O
has,O
not,O
completed,O
its,O
normal,O
quarter-end,O
closing,O
and,O
review,O
processes,O
for,O
the,O
first,O
quarter,O
of,O
2010,O
",",O
and,O
that,O
actual,O
results,O
could,O
differ,O
materially,O
from,O
the,O
foregoing,O
estimates,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
our,O
summary,O
consolidated,O
financial,O
information,O
as,O
of,O
and,O
for,O
the,O
fiscal,O
years,O
ended,O
December,O
31,O
",",O
2009,O
",",O
2008,O
",",O
2007,O
",",O
2006,O
and,O
2005,O
.,O
,O
The,O
information,O
was,O
derived,O
from,O
our,O
audited,O
annual,O
consolidated,O
financial,O
statements,O
.,O
,O
You,O
should,O
read,O
the,O
following,O
summary,O
consolidated,O
financial,O
information,O
together,O
with,O
Management,O
s,O
Discussion,O
and,O
Analysis,O
of,O
Financial,O
Condition,O
and,O
Results,O
of,O
Operations,O
and,O
our,O
historical,O
consolidated,O
financial,O
statements,O
",",O
including,O
the,O
related,O
notes,O
",",O
in,O
each,O
case,O
",",O
contained,O
in,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
(,O
the,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
),O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
on,O
February,O
17,O
",",O
2010,O
",",O
which,O
is,O
incorporated,O
by,O
reference,O
in,O
the,O
accompanying,O
prospectus,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
an,O
unaudited,O
reconciliation,O
of,O
net,O
income,O
to,O
adjusted,O
EBITDA,O
:,O
,O
An,O
investment,O
in,O
the,O
notes,O
involves,O
a,O
high,O
degree,O
of,O
risk,O
.,O
,O
Before,O
deciding,O
to,O
purchase,O
any,O
notes,O
",",O
you,O
should,O
carefully,O
consider,O
the,O
risks,O
and,O
uncertainties,O
set,O
forth,O
below,O
and,O
the,O
risks,O
and,O
uncertainties,O
incorporated,O
by,O
reference,O
in,O
this,O
prospectus,O
supplement,O
and,O
the,O
accompanying,O
prospectus,O
",",O
including,O
the,O
information,O
included,O
under,O
Risk,O
Factors,O
in,O
our,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
and,O
in,O
other,O
documents,O
that,O
we,O
subsequently,O
file,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
These,O
risks,O
and,O
uncertainties,O
are,O
not,O
the,O
only,O
ones,O
facing,O
us,O
.,O
,O
There,O
may,O
be,O
other,O
risks,O
that,O
a,O
prospective,O
investor,O
should,O
consider,O
that,O
are,O
relevant,O
to,O
that,O
investor,O
s,O
own,O
particular,O
circumstances,O
or,O
generally,O
.,O
,O
Risks,O
Related,O
to,O
the,O
Notes,O
Our,O
substantial,O
indebtedness,O
could,O
adversely,O
affect,O
our,O
financial,O
condition,O
and,O
operations,O
and,O
prevent,O
us,O
from,O
fulfilling,O
our,O
debt,O
service,O
obligations,O
under,O
the,O
notes,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2009,O
",",O
after,O
giving,O
pro,O
forma,O
effect,O
to,O
the,O
transactions,O
",",O
we,O
and,O
the,O
guarantors,O
would,O
have,O
had,O
approximately,O
$,O
2.5,O
billion,O
of,O
total,O
indebtedness,O
(,O
including,O
amounts,O
outstanding,O
under,O
our,O
existing,O
credit,O
agreement,O
",",O
mortgage,O
facility,O
",",O
capital,O
leases,O
and,O
floorplan,O
financing,O
arrangements,O
),O
.,O
,O
In,O
addition,O
",",O
also,O
after,O
giving,O
pro,O
forma,O
effect,O
to,O
the,O
transactions,O
",",O
we,O
would,O
have,O
had,O
approximately,O
$,O
551.3,O
million,O
of,O
undrawn,O
capacity,O
under,O
the,O
revolving,O
facility,O
of,O
our,O
existing,O
credit,O
agreement,O
",",O
of,O
which,O
we,O
would,O
have,O
had,O
the,O
ability,O
to,O
borrow,O
$,O
365.2,O
million,O
due,O
to,O
limitations,O
imposed,O
by,O
a,O
leverage,O
ratio,O
test,O
.,O
,O
Our,O
substantial,O
indebtedness,O
could,O
have,O
important,O
consequences,O
.,O
,O
The,O
occurrence,O
of,O
any,O
one,O
of,O
these,O
events,O
could,O
have,O
a,O
material,O
adverse,O
effect,O
on,O
our,O
business,O
",",O
financial,O
condition,O
",",O
results,O
of,O
operations,O
",",O
prospects,O
and,O
our,O
ability,O
to,O
service,O
our,O
debt,O
obligations,O
.,O
,O
Despite,O
our,O
substantial,O
indebtedness,O
",",O
we,O
may,O
still,O
be,O
able,O
to,O
incur,O
more,O
debt,O
",",O
intensifying,O
the,O
risks,O
described,O
above,O
.,O
,O
incur,O
additional,O
indebtedness,O
",",O
which,O
could,O
increase,O
the,O
risks,O
associated,O
with,O
our,O
already,O
substantial,O
indebtedness,O
.,O
,O
Subject,O
to,O
certain,O
limitations,O
",",O
we,O
have,O
the,O
ability,O
to,O
borrow,O
additional,O
funds,O
under,O
our,O
existing,O
credit,O
agreement,O
.,O
,O
We,O
are,O
seeking,O
consents,O
from,O
the,O
lenders,O
under,O
our,O
existing,O
credit,O
agreement,O
to,O
increase,O
the,O
leverage,O
ratio,O
from,O
2.75x,O
to,O
3.25x,O
.,O
,O
If,O
we,O
incur,O
any,O
additional,O
indebtedness,O
or,O
obligations,O
that,O
rank,O
equally,O
with,O
the,O
notes,O
",",O
including,O
trade,O
payables,O
",",O
the,O
holders,O
of,O
those,O
obligations,O
may,O
be,O
entitled,O
to,O
share,O
ratably,O
with,O
you,O
in,O
any,O
proceeds,O
distributed,O
in,O
connection,O
with,O
any,O
insolvency,O
",",O
liquidation,O
",",O
reorganization,O
",",O
dissolution,O
or,O
other,O
winding,O
up,O
of,O
us,O
",",O
which,O
may,O
reduce,O
the,O
amount,O
of,O
proceeds,O
paid,O
to,O
you,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2009,O
",",O
after,O
giving,O
pro,O
forma,O
effect,O
to,O
the,O
transactions,O
",",O
we,O
and,O
the,O
guarantors,O
would,O
have,O
had,O
approximately,O
$,O
2.5,O
billion,O
of,O
indebtedness,O
(,O
including,O
borrowings,O
under,O
our,O
mortgage,O
facility,O
",",O
capital,O
leases,O
and,O
floorplan,O
financing,O
arrangements,O
),O
",",O
of,O
which,O
approximately,O
$,O
1.6,O
billion,O
would,O
have,O
been,O
secured,O
.,O
,O
In,O
addition,O
",",O
also,O
after,O
giving,O
pro,O
forma,O
effect,O
to,O
the,O
transactions,O
",",O
we,O
would,O
have,O
had,O
approximately,O
$,O
551.3,O
million,O
of,O
undrawn,O
capacity,O
under,O
the,O
revolving,O
facility,O
of,O
our,O
existing,O
credit,O
agreement,O
",",O
of,O
which,O
we,O
would,O
have,O
had,O
the,O
ability,O
to,O
borrow,O
$,O
365.2,O
million,O
due,O
to,O
limitations,O
imposed,O
by,O
a,O
leverage,O
ratio,O
test,O
.,O
,O
We,O
may,O
not,O
be,O
able,O
to,O
generate,O
sufficient,O
cash,O
flows,O
to,O
meet,O
our,O
debt,O
service,O
obligations,O
.,O
,O
Our,O
ability,O
to,O
make,O
scheduled,O
payments,O
on,O
",",O
or,O
to,O
refinance,O
our,O
obligations,O
with,O
respect,O
to,O
",",O
our,O
indebtedness,O
",",O
including,O
the,O
notes,O
",",O
will,O
depend,O
on,O
our,O
financial,O
and,O
operating,O
performance,O
",",O
which,O
in,O
turn,O
will,O
be,O
affected,O
by,O
general,O
economic,O
conditions,O
and,O
by,O
financial,O
",",O
competitive,O
",",O
regulatory,O
and,O
other,O
factors,O
beyond,O
our,O
control,O
.,O
,O
There,O
can,O
be,O
no,O
assurance,O
that,O
our,O
future,O
cash,O
flow,O
will,O
be,O
sufficient,O
to,O
meet,O
our,O
obligations,O
and,O
commitments,O
.,O
,O
If,O
we,O
are,O
unable,O
to,O
generate,O
sufficient,O
cash,O
flow,O
from,O
operations,O
in,O
the,O
future,O
to,O
service,O
our,O
indebtedness,O
and,O
to,O
meet,O
our,O
other,O
commitments,O
",",O
we,O
will,O
be,O
required,O
to,O
adopt,O
one,O
or,O
more,O
alternatives,O
",",O
such,O
as,O
refinancing,O
or,O
restructuring,O
our,O
debt,O
or,O
equity,O
capital,O
or,O
engaging,O
in,O
asset,O
sales,O
.,O
,O
There,O
can,O
be,O
no,O
assurance,O
that,O
any,O
of,O
these,O
actions,O
could,O
be,O
effected,O
on,O
a,O
timely,O
basis,O
or,O
on,O
satisfactory,O
terms,O
or,O
that,O
these,O
actions,O
would,O
enable,O
us,O
to,O
continue,O
to,O
satisfy,O
our,O
capital,O
requirements,O
.,O
,O
In,O
addition,O
",",O
the,O
terms,O
of,O
our,O
existing,O
or,O
future,O
franchise,O
and,O
framework,O
agreements,O
with,O
vehicle,O
manufacturers,O
and,O
our,O
debt,O
agreements,O
",",O
including,O
the,O
indenture,O
that,O
will,O
govern,O
the,O
notes,O
and,O
our,O
existing,O
credit,O
agreement,O
",",O
whether,O
or,O
not,O
amended,O
",",O
may,O
prohibit,O
us,O
from,O
adopting,O
any,O
of,O
these,O
alternatives,O
.,O
,O
The,O
notes,O
and,O
the,O
guarantees,O
are,O
unsecured,O
obligations,O
.,O
,O
The,O
notes,O
will,O
be,O
senior,O
unsecured,O
obligations,O
and,O
will,O
rank,O
equally,O
in,O
right,O
of,O
payment,O
with,O
all,O
of,O
our,O
existing,O
and,O
future,O
senior,O
debt,O
",",O
including,O
our,O
existing,O
credit,O
agreement,O
",",O
and,O
senior,O
in,O
right,O
of,O
payment,O
to,O
all,O
of,O
our,O
existing,O
and,O
future,O
subordinated,O
debt,O
.,O
,O
The,O
notes,O
will,O
be,O
guaranteed,O
on,O
an,O
unsecured,O
basis,O
by,O
substantially,O
all,O
of,O
our,O
existing,O
and,O
future,O
restricted,O
subsidiaries,O
.,O
,O
In,O
the,O
event,O
any,O
of,O
our,O
other,O
senior,O
debt,O
is,O
secured,O
by,O
liens,O
on,O
our,O
assets,O
and,O
the,O
lenders,O
under,O
such,O
debt,O
exercise,O
remedies,O
with,O
respect,O
to,O
the,O
pledged,O
assets,O
",",O
the,O
proceeds,O
of,O
the,O
liquidation,O
of,O
the,O
pledged,O
assets,O
will,O
first,O
be,O
applied,O
to,O
repay,O
obligations,O
secured,O
by,O
the,O
pledges,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2009,O
",",O
after,O
giving,O
pro,O
forma,O
effect,O
to,O
the,O
transactions,O
",",O
we,O
and,O
the,O
guarantors,O
would,O
have,O
had,O
approximately,O
$,O
2.5,O
billion,O
of,O
indebtedness,O
(,O
including,O
borrowings,O
under,O
our,O
mortgage,O
facility,O
",",O
capital,O
leases,O
and,O
floorplan,O
financing,O
arrangements,O
),O
",",O
of,O
which,O
approximately,O
$,O
1.6,O
billion,O
would,O
have,O
been,O
secured,O
.,O
,O
In,O
addition,O
",",O
also,O
after,O
giving,O
pro,O
forma,O
effect,O
to,O
the,O
transactions,O
",",O
we,O
would,O
have,O
had,O
approximately,O
$,O
551.3,O
million,O
of,O
undrawn,O
capacity,O
under,O
the,O
revolving,O
facility,O
of,O
our,O
existing,O
credit,O
agreement,O
",",O
of,O
which,O
we,O
would,O
have,O
had,O
the,O
ability,O
to,O
borrow,O
$,O
365.2,O
million,O
due,O
to,O
limitations,O
imposed,O
by,O
a,O
leverage,O
ratio,O
test,O
.,O
,O
The,O
exercise,O
of,O
default,O
rights,O
(,O
other,O
than,O
rights,O
to,O
demand,O
payment,O
in,O
the,O
event,O
of,O
default,O
or,O
bring,O
suit,O
for,O
payment,O
of,O
amounts,O
due,O
and,O
payable,O
),O
under,O
certain,O
of,O
the,O
guarantees,O
will,O
be,O
subject,O
to,O
requirements,O
of,O
advance,O
notice,O
to,O
certain,O
of,O
the,O
automotive,O
manufacturers,O
",",O
as,O
set,O
forth,O
in,O
the,O
indenture,O
.,O
,O
We,O
conduct,O
substantially,O
all,O
of,O
our,O
operations,O
through,O
subsidiaries,O
.,O
,O
We,O
are,O
a,O
holding,O
company,O
and,O
conduct,O
substantially,O
all,O
of,O
our,O
operations,O
through,O
subsidiaries,O
.,O
,O
As,O
a,O
holding,O
company,O
",",O
we,O
are,O
dependent,O
on,O
distributions,O
of,O
funds,O
from,O
our,O
subsidiaries,O
to,O
meet,O
our,O
debt,O
service,O
and,O
other,O
obligations,O
",",O
including,O
the,O
payment,O
of,O
principal,O
and,O
interest,O
on,O
the,O
notes,O
.,O
,O
Our,O
subsidiaries,O
may,O
not,O
generate,O
sufficient,O
cash,O
from,O
operations,O
to,O
enable,O
us,O
to,O
make,O
payments,O
on,O
our,O
indebtedness,O
",",O
including,O
the,O
notes,O
.,O
,O
corporate,O
laws,O
",",O
other,O
laws,O
and,O
regulations,O
and,O
contractual,O
restrictions,O
.,O
,O
If,O
we,O
are,O
unable,O
to,O
obtain,O
funds,O
from,O
our,O
subsidiaries,O
as,O
a,O
result,O
of,O
restrictions,O
under,O
our,O
other,O
debt,O
instruments,O
",",O
state,O
law,O
or,O
otherwise,O
",",O
we,O
may,O
not,O
be,O
able,O
to,O
pay,O
interest,O
or,O
principal,O
on,O
the,O
notes,O
when,O
due,O
",",O
or,O
to,O
redeem,O
the,O
notes,O
upon,O
a,O
change,O
of,O
control,O
repurchase,O
event,O
",",O
and,O
we,O
can,O
not,O
assure,O
you,O
that,O
we,O
will,O
be,O
able,O
to,O
obtain,O
the,O
necessary,O
funds,O
from,O
other,O
sources,O
.,O
,O
Not,O
all,O
of,O
our,O
subsidiaries,O
are,O
guarantors,O
",",O
and,O
our,O
claims,O
will,O
be,O
subordinated,O
to,O
all,O
of,O
the,O
creditors,O
of,O
the,O
non-guarantor,O
subsidiaries,O
.,O
,O
The,O
notes,O
will,O
be,O
guaranteed,O
by,O
most,O
",",O
but,O
not,O
all,O
",",O
of,O
our,O
subsidiaries,O
.,O
,O
In,O
the,O
event,O
of,O
insolvency,O
",",O
liquidation,O
",",O
dissolution,O
",",O
reorganization,O
",",O
or,O
similar,O
proceeding,O
of,O
any,O
of,O
our,O
nonguarantor,O
subsidiaries,O
",",O
any,O
creditors,O
of,O
each,O
of,O
these,O
subsidiaries,O
would,O
be,O
entitled,O
to,O
payment,O
in,O
full,O
from,O
that,O
subsidiary,O
s,O
assets,O
and,O
earnings,O
before,O
such,O
assets,O
and,O
earnings,O
may,O
be,O
distributed,O
to,O
us,O
to,O
service,O
payments,O
on,O
the,O
notes,O
.,O
,O
For,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
",",O
our,O
non-guarantor,O
subsidiaries,O
represented,O
less,O
than,O
1,O
%,O
of,O
our,O
total,O
assets,O
",",O
total,O
revenue,O
",",O
income,O
from,O
continuing,O
operations,O
before,O
income,O
taxes,O
and,O
cash,O
flows,O
from,O
operating,O
activities,O
.,O
,O
See,O
Description,P
of,P
the,P
Notes,O
-,O
Guarantees,P
.,O
,O
Federal,O
and,O
state,O
statutes,O
may,O
allow,O
courts,O
to,O
void,O
the,O
guarantees,O
",",O
subordinate,O
the,O
guarantees,O
or,O
require,O
noteholders,O
to,O
return,O
payments,O
received,O
from,O
guarantors,O
.,O
,O
Various,O
applicable,O
fraudulent,O
conveyance,O
laws,O
have,O
been,O
enacted,O
for,O
the,O
protection,O
of,O
creditors,O
.,O
,O
A,O
court,O
may,O
use,O
these,O
laws,O
to,O
subordinate,O
or,O
void,O
the,O
guarantees,O
of,O
the,O
notes,O
issued,O
by,O
any,O
of,O
our,O
subsidiary,O
guarantors,O
.,O
,O
It,O
is,O
also,O
possible,O
that,O
under,O
certain,O
circumstances,O
a,O
court,O
could,O
hold,O
that,O
the,O
direct,O
obligations,O
of,O
a,O
subsidiary,O
guaranteeing,O
the,O
notes,O
could,O
be,O
superior,O
to,O
the,O
obligations,O
under,O
that,O
guarantee,O
.,O
,O
A,O
court,O
could,O
void,O
or,O
subordinate,O
the,O
guarantee,O
of,O
the,O
notes,O
by,O
any,O
of,O
our,O
subsidiaries,O
in,O
favor,O
of,O
that,O
subsidiary,O
s,O
other,O
debts,O
or,O
liabilities,O
to,O
the,O
extent,O
that,O
the,O
court,O
determined,O
that,O
either,O
of,O
the,O
following,O
was,O
true,O
at,O
the,O
time,O
the,O
subsidiary,O
issued,O
the,O
guarantee,O
:,O
,O
In,O
addition,O
",",O
any,O
payment,O
by,O
such,O
subsidiary,O
guarantor,O
pursuant,O
to,O
any,O
guarantee,O
could,O
be,O
voided,O
and,O
required,O
to,O
be,O
returned,O
to,O
such,O
subsidiary,O
guarantor,O
",",O
or,O
to,O
a,O
fund,O
for,O
the,O
benefit,O
of,O
the,O
creditors,O
of,O
such,O
subsidiary,O
guarantor,O
.,O
,O
Among,O
other,O
things,O
",",O
a,O
legal,O
challenge,O
of,O
a,O
subsidiary,O
s,O
guarantee,O
of,O
the,O
notes,O
on,O
fraudulent,O
conveyance,O
grounds,O
may,O
focus,O
on,O
the,O
benefits,O
",",O
if,O
any,O
",",O
realized,O
by,O
that,O
subsidiary,O
as,O
a,O
result,O
of,O
our,O
issuance,O
of,O
the,O
notes,O
.,O
,O
To,O
the,O
extent,O
a,O
subsidiary,O
s,O
guarantee,O
of,O
the,O
notes,O
is,O
voided,O
as,O
a,O
result,O
of,O
fraudulent,O
conveyance,O
or,O
held,O
unenforceable,O
for,O
any,O
other,O
reason,O
",",O
the,O
noteholders,O
would,O
cease,O
to,O
have,O
any,O
claim,O
in,O
respect,O
of,O
that,O
guarantee,O
and,O
would,O
be,O
creditors,O
solely,O
of,O
us,O
.,O
,O
There,O
is,O
no,O
assurance,O
that,O
we,O
will,O
be,O
able,O
to,O
purchase,O
the,O
notes,O
upon,O
a,O
change,O
of,O
control,O
repurchase,O
event,O
.,O
,O
If,O
certain,O
change,O
of,O
control,O
events,O
occur,O
",",O
we,O
may,O
need,O
to,O
refinance,O
large,O
amounts,O
of,O
our,O
debt,O
",",O
including,O
the,O
notes,O
",",O
the,O
debt,O
under,O
our,O
existing,O
credit,O
agreement,O
",",O
our,O
floorplan,O
financing,O
arrangements,O
and,O
our,O
mortgage,O
facility,O
.,O
,O
Upon,O
a,O
change,O
of,O
control,O
repurchase,O
event,O
",",O
as,O
defined,O
in,O
the,O
indenture,O
",",O
we,O
must,O
offer,O
to,O
buy,O
back,O
the,O
notes,O
for,O
a,O
price,O
equal,O
to,O
101,O
%,O
of,O
their,O
principal,O
amount,O
",",O
plus,O
accrued,O
and,O
unpaid,O
interest,O
to,O
the,O
date,O
of,O
purchase,O
.,O
,O
We,O
would,O
fund,O
any,O
repurchase,O
obligation,O
with,O
our,O
available,O
cash,O
",",O
borrowings,O
",",O
sales,O
of,O
equity,O
or,O
debt,O
or,O
funds,O
provided,O
by,O
a,O
new,O
controlling,O
person,O
.,O
,O
We,O
can,O
not,O
assure,O
you,O
that,O
there,O
will,O
be,O
sufficient,O
funds,O
available,O
for,O
any,O
required,O
repurchases,O
of,O
the,O
notes,O
if,O
a,O
change,O
of,O
control,O
repurchase,O
event,O
occurs,O
.,O
,O
In,O
addition,O
",",O
the,O
terms,O
of,O
our,O
existing,O
credit,O
agreement,O
will,O
limit,O
our,O
ability,O
to,O
repurchase,O
your,O
notes,O
and,O
provide,O
that,O
certain,O
change,O
of,O
control,O
events,O
constitute,O
an,O
event,O
of,O
default,O
thereunder,O
.,O
,O
Our,O
future,O
debt,O
agreements,O
may,O
contain,O
similar,O
restrictions,O
and,O
provisions,O
.,O
,O
If,O
the,O
holders,O
of,O
the,O
notes,O
exercise,O
their,O
right,O
to,O
require,O
us,O
to,O
repurchase,O
all,O
the,O
notes,O
upon,O
a,O
change,O
of,O
control,O
repurchase,O
event,O
",",O
the,O
financial,O
effect,O
of,O
this,O
repurchase,O
could,O
cause,O
a,O
default,O
under,O
our,O
other,O
debt,O
",",O
even,O
if,O
the,O
change,O
of,O
control,O
repurchase,O
event,O
itself,O
would,O
not,O
cause,O
a,O
default,O
.,O
,O
Accordingly,O
",",O
it,O
is,O
possible,O
that,O
we,O
will,O
not,O
have,O
sufficient,O
funds,O
at,O
the,O
time,O
of,O
the,O
change,O
of,O
control,O
to,O
make,O
the,O
required,O
repurchase,O
of,O
our,O
other,O
debt,O
and,O
the,O
notes,O
or,O
that,O
restrictions,O
in,O
our,O
existing,O
credit,O
agreement,O
would,O
allow,O
such,O
repurchases,O
.,O
,O
In,O
addition,O
",",O
certain,O
corporate,O
events,O
",",O
such,O
as,O
leveraged,O
capitalizations,O
that,O
would,O
increase,O
the,O
level,O
of,O
our,O
indebtedness,O
",",O
would,O
not,O
constitute,O
a,O
Change,O
of,O
Control,O
under,O
the,O
indenture,O
.,O
,O
See,O
Description,O
of,O
the,O
Notes,O
Repurchase,O
Upon,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
.,O
,O
Our,O
credit,O
ratings,O
may,O
not,O
reflect,O
all,O
risks,O
of,O
your,O
investment,O
in,O
the,O
notes,O
.,O
,O
Our,O
credit,O
ratings,O
are,O
an,O
assessment,O
by,O
rating,O
agencies,O
of,O
our,O
ability,O
to,O
pay,O
our,O
debts,O
when,O
due,O
.,O
,O
Consequently,O
",",O
real,O
or,O
anticipated,O
changes,O
in,O
our,O
credit,O
ratings,O
will,O
generally,O
affect,O
the,O
market,O
value,O
of,O
the,O
notes,O
.,O
,O
These,O
credit,O
ratings,O
may,O
not,O
reflect,O
the,O
potential,O
impact,O
of,O
risks,O
relating,O
to,O
structure,O
or,O
marketing,O
of,O
the,O
notes,O
.,O
,O
In,O
addition,O
",",O
if,O
any,O
of,O
our,O
outstanding,O
debt,O
that,O
is,O
rated,O
is,O
downgraded,O
",",O
raising,O
capital,O
will,O
become,O
more,O
difficult,O
for,O
us,O
and,O
borrowing,O
costs,O
under,O
our,O
existing,O
credit,O
agreement,O
and,O
other,O
future,O
borrowings,O
may,O
increase,O
.,O
,O
Agency,O
ratings,O
are,O
not,O
a,O
recommendation,O
to,O
buy,O
",",O
sell,O
or,O
hold,O
any,O
security,O
and,O
may,O
be,O
revised,O
or,O
withdrawn,O
at,O
any,O
time,O
by,O
the,O
issuing,O
organization,O
.,O
,O
Each,O
agency,O
s,O
rating,O
should,O
be,O
evaluated,O
independently,O
of,O
any,O
other,O
agency,O
s,O
rating,O
.,O
,O
There,O
is,O
currently,O
no,O
public,O
market,O
for,O
the,O
notes,O
",",O
and,O
we,O
do,O
not,O
know,O
if,O
a,O
market,O
will,O
ever,O
develop,O
or,O
",",O
if,O
a,O
market,O
does,O
develop,O
",",O
whether,O
it,O
will,O
be,O
sustained,O
.,O
,O
The,O
notes,O
are,O
a,O
new,O
issue,O
of,O
securities,O
and,O
there,O
is,O
no,O
existing,O
trading,O
market,O
for,O
the,O
notes,O
.,O
,O
Although,O
the,O
underwriters,O
have,O
informed,O
us,O
that,O
they,O
intend,O
to,O
make,O
a,O
market,O
in,O
the,O
notes,O
",",O
they,O
have,O
no,O
obligation,O
to,O
do,O
so,O
and,O
may,O
discontinue,O
making,O
a,O
market,O
at,O
any,O
time,O
without,O
notice,O
.,O
,O
As,O
a,O
result,O
",",O
we,O
can,O
not,O
assure,O
you,O
that,O
a,O
liquid,O
market,O
will,O
develop,O
for,O
the,O
notes,O
",",O
that,O
you,O
will,O
be,O
able,O
to,O
sell,O
your,O
notes,O
at,O
a,O
particular,O
time,O
or,O
that,O
the,O
prices,O
that,O
you,O
receive,O
when,O
you,O
sell,O
the,O
notes,O
will,O
be,O
favorable,O
.,O
,O
We,O
can,O
not,O
assure,O
you,O
that,O
an,O
active,O
trading,O
market,O
will,O
develop,O
for,O
the,O
notes,O
.,O
,O
We,O
do,O
not,O
intend,O
to,O
apply,O
for,O
listing,O
of,O
the,O
notes,O
on,O
any,O
securities,O
exchange,O
.,O
,O
If,O
a,O
market,O
for,O
the,O
notes,O
does,O
not,O
develop,O
",",O
you,O
may,O
not,O
be,O
able,O
to,O
resell,O
your,O
notes,O
for,O
an,O
extended,O
period,O
of,O
time,O
",",O
if,O
at,O
all,O
.,O
,O
Moreover,O
",",O
if,O
markets,O
for,O
the,O
notes,O
do,O
develop,O
in,O
the,O
future,O
",",O
we,O
can,O
not,O
assure,O
you,O
that,O
these,O
markets,O
will,O
continue,O
indefinitely,O
or,O
that,O
the,O
notes,O
can,O
be,O
sold,O
at,O
a,O
price,O
equal,O
to,O
or,O
greater,O
than,O
their,O
initial,O
offering,O
price,O
.,O
,O
In,O
addition,O
",",O
in,O
response,O
to,O
prevailing,O
interest,O
rates,O
and,O
market,O
conditions,O
generally,O
",",O
as,O
well,O
as,O
our,O
performance,O
",",O
the,O
notes,O
could,O
trade,O
at,O
a,O
price,O
lower,O
than,O
their,O
initial,O
offering,O
price,O
.,O
,O
Our,O
significant,O
shareholders,O
may,O
support,O
strategies,O
that,O
are,O
opposed,O
to,O
the,O
interests,O
of,O
our,O
noteholders,O
or,O
with,O
which,O
you,O
disagree,O
.,O
,O
Certain,O
of,O
our,O
shareholders,O
",",O
including,O
certain,O
of,O
our,O
directors,O
",",O
have,O
the,O
power,O
to,O
significantly,O
influence,O
the,O
results,O
of,O
shareholder,O
votes,O
and,O
the,O
election,O
of,O
our,O
board,O
of,O
directors,O
",",O
as,O
well,O
as,O
transactions,O
involving,O
a,O
potential,O
change,O
of,O
control,O
.,O
,O
These,O
shareholders,O
may,O
support,O
strategies,O
and,O
directions,O
",",O
such,O
as,O
share,O
repurchases,O
",",O
that,O
are,O
in,O
their,O
best,O
interests,O
or,O
in,O
the,O
interests,O
of,O
our,O
equity,O
holders,O
in,O
general,O
",",O
but,O
that,O
are,O
not,O
in,O
the,O
interests,O
of,O
our,O
noteholders,O
or,O
with,O
which,O
you,O
disagree,O
.,O
,O
We,O
can,O
not,O
assure,O
you,O
that,O
these,O
shareholders,O
will,O
not,O
increase,O
their,O
ownership,O
percentage,O
in,O
the,O
future,O
.,O
,O
We,O
may,O
pursue,O
acquisitions,O
",",O
dispositions,O
",",O
investments,O
",",O
dividends,O
",",O
share,O
repurchases,O
and/or,O
other,O
corporate,O
transactions,O
that,O
we,O
believe,O
will,O
maximize,O
equity,O
returns,O
of,O
our,O
shareholders,O
but,O
may,O
involve,O
risks,O
to,O
holders,O
of,O
the,O
notes,O
.,O
,O
From,O
time,O
to,O
time,O
",",O
we,O
consider,O
opportunities,O
for,O
acquisitions,O
of,O
businesses,O
or,O
other,O
assets,O
and,O
other,O
strategic,O
transactions,O
.,O
,O
These,O
transactions,O
may,O
involve,O
risks,O
",",O
such,O
as,O
risks,O
of,O
integration,O
of,O
acquired,O
businesses,O
and,O
loss,O
of,O
cash,O
flows,O
and,O
market,O
positions,O
of,O
disposed,O
businesses,O
.,O
,O
In,O
addition,O
",",O
the,O
indenture,O
that,O
will,O
govern,O
the,O
notes,O
will,O
allow,O
us,O
substantial,O
flexibility,O
to,O
pay,O
dividends,O
on,O
",",O
or,O
make,O
significant,O
repurchases,O
of,O
",",O
our,O
common,O
stock,O
.,O
,O
These,O
transactions,O
will,O
be,O
subject,O
to,O
the,O
discretion,O
of,O
our,O
board,O
of,O
directors,O
.,O
,O
There,O
can,O
be,O
no,O
assurance,O
that,O
we,O
will,O
effect,O
any,O
of,O
these,O
transactions,O
",",O
but,O
",",O
if,O
we,O
do,O
",",O
risks,O
to,O
the,O
holders,O
of,O
the,O
notes,O
may,O
be,O
increased,O
",",O
possibly,O
materially,O
.,O
,O
Our,O
existing,O
credit,O
agreement,O
and,O
mortgage,O
facility,O
contain,O
certain,O
financial,O
ratios,O
and,O
other,O
restrictions,O
on,O
our,O
ability,O
to,O
conduct,O
our,O
business,O
.,O
,O
The,O
existing,O
credit,O
agreement,O
relating,O
to,O
our,O
revolving,O
credit,O
facility,O
and,O
term,O
loan,O
facility,O
contain,O
",",O
and,O
future,O
debt,O
agreements,O
will,O
likely,O
contain,O
",",O
numerous,O
financial,O
and,O
operating,O
covenants,O
that,O
limit,O
the,O
discretion,O
of,O
our,O
management,O
with,O
respect,O
to,O
various,O
business,O
matters,O
.,O
,O
The,O
indenture,O
governing,O
the,O
Old,O
Notes,O
also,O
contains,O
numerous,O
financial,O
and,O
operating,O
covenants,O
",",O
which,O
covenants,O
will,O
be,O
eliminated,O
if,O
the,O
consent,O
solicitations,O
relating,O
to,O
the,O
Old,O
Notes,O
are,O
completed,O
.,O
,O
The,O
covenants,O
contained,O
in,O
the,O
Company,O
s,O
debt,O
instruments,O
place,O
significant,O
restrictions,O
on,O
",",O
among,O
other,O
things,O
",",O
our,O
ability,O
to,O
incur,O
additional,O
indebtedness,O
",",O
to,O
create,O
liens,O
or,O
other,O
encumbrances,O
",",O
to,O
make,O
certain,O
payments,O
(,O
including,O
dividends,O
and,O
repurchases,O
of,O
our,O
shares,O
),O
and,O
investments,O
",",O
and,O
to,O
sell,O
or,O
otherwise,O
dispose,O
of,O
assets,O
and,O
to,O
merge,O
or,O
consolidate,O
with,O
other,O
entities,O
.,O
,O
A,O
failure,O
by,O
us,O
to,O
comply,O
with,O
the,O
obligations,O
contained,O
in,O
our,O
existing,O
credit,O
agreement,O
could,O
result,O
in,O
an,O
event,O
of,O
default,O
under,O
our,O
existing,O
credit,O
agreement,O
",",O
which,O
could,O
permit,O
acceleration,O
of,O
the,O
related,O
debt,O
as,O
well,O
as,O
acceleration,O
of,O
debt,O
under,O
other,O
instruments,O
",",O
including,O
under,O
the,O
indenture,O
that,O
will,O
govern,O
the,O
notes,O
",",O
that,O
contain,O
cross-acceleration,O
or,O
cross-default,O
provisions,O
.,O
,O
If,O
any,O
debt,O
is,O
accelerated,O
",",O
our,O
liquid,O
assets,O
may,O
not,O
be,O
sufficient,O
to,O
repay,O
in,O
full,O
such,O
indebtedness,O
and,O
our,O
other,O
indebtedness,O
.,O
,O
Additionally,O
",",O
we,O
have,O
granted,O
certain,O
vehicle,O
manufacturers,O
the,O
right,O
to,O
acquire,O
",",O
at,O
fair,O
market,O
value,O
",",O
our,O
automotive,O
stores,O
franchised,O
by,O
those,O
manufacturers,O
in,O
specified,O
circumstances,O
in,O
the,O
event,O
of,O
our,O
default,O
under,O
the,O
indenture,O
that,O
will,O
govern,O
the,O
notes,O
or,O
the,O
existing,O
credit,O
agreement,O
for,O
our,O
revolving,O
credit,O
facility,O
and,O
term,O
loan,O
facility,O
.,O
,O
Under,O
our,O
existing,O
credit,O
agreement,O
",",O
we,O
are,O
required,O
to,O
remain,O
in,O
compliance,O
with,O
a,O
maximum,O
consolidated,O
leverage,O
ratio,O
and,O
a,O
maximum,O
capitalization,O
ratio,O
.,O
,O
We,O
are,O
seeking,O
consents,O
from,O
the,O
lenders,O
under,O
our,O
existing,O
credit,O
agreement,O
to,O
increase,O
the,O
leverage,O
ratio,O
from,O
2.75x,O
to,O
3.25x,O
",",O
which,O
will,O
allows,O
us,O
greater,O
flexibility,O
to,O
make,O
certain,O
payments,O
",",O
including,O
dividends,O
and,O
share,O
repurchases,O
.,O
,O
If,O
our,O
earnings,O
decline,O
or,O
if,O
we,O
are,O
required,O
to,O
record,O
impairment,O
charges,O
in,O
the,O
future,O
",",O
we,O
may,O
be,O
unable,O
to,O
comply,O
with,O
the,O
financial,O
ratios,O
required,O
by,O
our,O
existing,O
credit,O
agreement,O
.,O
,O
In,O
such,O
case,O
",",O
we,O
would,O
seek,O
an,O
amendment,O
or,O
waiver,O
of,O
our,O
existing,O
credit,O
agreement,O
or,O
consider,O
other,O
options,O
",",O
such,O
as,O
raising,O
capital,O
through,O
an,O
equity,O
issuance,O
to,O
pay,O
down,O
debt,O
",",O
which,O
could,O
be,O
dilutive,O
to,O
stockholders,O
.,O
,O
There,O
can,O
be,O
no,O
assurance,O
that,O
our,O
lenders,O
would,O
agree,O
to,O
an,O
amendment,O
or,O
waiver,O
of,O
our,O
existing,O
credit,O
agreement,O
.,O
,O
In,O
the,O
event,O
we,O
obtain,O
an,O
amendment,O
or,O
waiver,O
of,O
our,O
existing,O
credit,O
agreement,O
",",O
we,O
would,O
likely,O
incur,O
additional,O
fees,O
and,O
higher,O
interest,O
expense,O
.,O
,O
We,O
estimate,O
that,O
the,O
net,O
proceeds,O
from,O
this,O
offering,O
will,O
be,O
approximately,O
$,O
392.1,O
million,O
after,O
deducting,O
underwriting,O
discounts,O
and,O
our,O
estimated,O
expenses,O
related,O
to,O
the,O
offering,O
.,O
,O
We,O
intend,O
to,O
use,O
the,O
net,O
proceeds,O
of,O
this,O
offering,O
(,O
i,O
),O
to,O
pay,O
the,O
consideration,O
required,O
to,O
purchase,O
Old,O
Notes,O
tendered,O
in,O
connection,O
with,O
the,O
Offers,O
for,O
any,O
and,O
all,O
of,O
our,O
outstanding,O
Old,O
Notes,O
",",O
including,O
in,O
each,O
case,O
the,O
payment,O
of,O
any,O
applicable,O
accrued,O
and,O
unpaid,O
interest,O
on,O
such,O
Old,O
Notes,O
",",O
(,O
ii,O
),O
if,O
we,O
so,O
elect,O
",",O
to,O
redeem,O
any,O
Old,O
Notes,O
that,O
may,O
remain,O
outstanding,O
following,O
completion,O
of,O
the,O
Offers,O
",",O
including,O
the,O
payment,O
of,O
any,O
applicable,O
accrued,O
and,O
unpaid,O
interest,O
on,O
such,O
Old,O
Notes,O
",",O
(,O
iii,O
),O
to,O
reduce,O
borrowings,O
under,O
the,O
existing,O
credit,O
agreement,O
term,O
loan,O
facility,O
",",O
(,O
iv,O
),O
to,O
pay,O
related,O
fees,O
and,O
expenses,O
and,O
(,O
v,O
),O
for,O
general,O
corporate,O
purposes,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
our,O
estimated,O
sources,O
and,O
uses,O
of,O
funds,O
:,O
,O
The,O
following,O
table,O
sets,O
forth,O
our,O
consolidated,O
cash,O
and,O
cash,O
equivalents,O
and,O
capitalization,O
as,O
of,O
December,O
31,O
",",O
2009,O
:,O
,O
You,O
should,O
read,O
the,O
information,O
in,O
this,O
table,O
in,O
conjunction,O
with,O
the,O
information,O
set,O
forth,O
following,O
the,O
caption,O
Use,O
of,O
Proceeds,O
and,O
our,O
consolidated,O
financial,O
statements,O
and,O
the,O
notes,O
thereto,O
",",O
which,O
are,O
incorporated,O
by,O
reference,O
in,O
this,O
prospectus,O
supplement,O
and,O
the,O
accompanying,O
prospectus,O
.,O
,O
The,O
following,O
is,O
a,O
description,O
of,O
the,O
principal,O
terms,O
of,O
certain,O
of,O
our,O
indebtedness,O
:,O
Old,O
Notes,O
At,O
December,O
31,O
",",O
2009,O
",",O
we,O
had,O
outstanding,O
$,O
146.1,O
million,O
of,O
Floating,O
Rate,O
Notes,O
and,O
$,O
132.6,O
million,O
of,O
Fixed,O
Rate,O
Notes,O
",",O
in,O
each,O
case,O
at,O
par,O
.,O
,O
The,O
Floating,O
Rate,O
Notes,O
bear,O
interest,O
at,O
a,O
rate,O
equal,O
to,O
three-month,O
LIBOR,I-MISCELLANEOUS
plus,O
2.0,O
%,O
per,O
annum,O
",",O
adjusted,O
quarterly,O
",",O
and,O
may,O
be,O
redeemed,O
by,O
us,O
currently,O
at,O
102,O
%,O
of,O
principal,O
",",O
at,O
101,O
%,O
of,O
principal,O
on,O
or,O
after,O
April,O
15,O
",",O
2010,O
",",O
and,O
at,O
100,O
%,O
of,O
principal,O
on,O
or,O
after,O
April,O
15,O
",",O
2011,O
.,O
,O
The,O
Fixed,O
Rate,O
Notes,O
may,O
be,O
redeemed,O
by,O
us,O
currently,O
at,O
105.25,O
%,O
of,O
principal,O
",",O
at,O
103.5,O
%,O
of,O
principal,O
on,O
or,O
after,O
April,O
15,O
",",O
2010,O
",",O
at,O
101.75,O
%,O
of,O
principal,O
on,O
or,O
after,O
April,O
15,O
",",O
2011,O
",",O
and,O
at,O
100,O
%,O
of,O
principal,O
on,O
or,O
after,O
April,O
15,O
",",O
2012,O
.,O
,O
Concurrently,O
with,O
the,O
filing,O
of,O
this,O
prospectus,O
supplement,O
",",O
we,O
commenced,O
the,O
Offers,O
to,O
purchase,O
for,O
cash,O
any,O
and,O
all,O
of,O
the,O
outstanding,O
$,O
146.1,O
million,O
principal,O
amount,O
of,O
the,O
Floating,O
Rate,O
Notes,O
for,O
$,O
"1,010.00",O
for,O
each,O
$,O
"1,000",O
principal,O
amount,O
of,O
Floating,O
Rate,O
Notes,O
and,O
any,O
and,O
all,O
of,O
the,O
outstanding,O
$,O
132.6,O
million,O
aggregate,O
principal,O
amount,O
of,O
the,O
Fixed,O
Rate,O
Notes,O
for,O
$,O
"1,035.00",O
for,O
each,O
$,O
"1,000",O
principal,O
amount,O
of,O
Fixed,O
Rate,O
Notes,O
.,O
,O
The,O
indenture,O
governing,O
the,O
Old,O
Notes,O
currently,O
contains,O
significant,O
covenants,O
",",O
including,O
covenants,O
limiting,O
the,O
incurrence,O
of,O
indebtedness,O
",",O
the,O
making,O
of,O
restricted,O
payments,O
and,O
the,O
conduct,O
of,O
transactions,O
with,O
affiliates,O
and,O
asset,O
sales,O
.,O
,O
In,O
connection,O
with,O
the,O
Offers,O
",",O
we,O
also,O
commenced,O
solicitations,O
of,O
consents,O
to,O
amend,O
the,O
indenture,O
relating,O
to,O
the,O
Old,O
Notes,O
",",O
to,O
eliminate,O
most,O
of,O
the,O
restrictive,O
covenants,O
and,O
certain,O
of,O
the,O
events,O
of,O
default,O
contained,O
in,O
the,O
indenture,O
.,O
,O
We,O
intend,O
to,O
use,O
a,O
portion,O
of,O
the,O
net,O
proceeds,O
from,O
this,O
offering,O
to,O
purchase,O
any,O
and,O
all,O
of,O
such,O
Old,O
Notes,O
and,O
make,O
related,O
consent,O
payments,O
pursuant,O
to,O
the,O
Offers,O
.,O
,O
Following,O
the,O
expiration,O
of,O
the,O
Offers,O
",",O
we,O
may,O
elect,O
to,O
redeem,O
and,O
satisfy,O
and,O
discharge,O
",",O
in,O
accordance,O
with,O
the,O
terms,O
and,O
conditions,O
of,O
the,O
indenture,O
governing,O
the,O
Old,O
Notes,O
",",O
all,O
Old,O
Notes,O
not,O
tendered,O
and,O
accepted,O
for,O
purchase,O
pursuant,O
to,O
the,O
Offers,O
.,O
,O
This,O
prospectus,O
supplement,O
does,O
not,O
constitute,O
a,O
notice,O
of,O
redemption,O
of,O
the,O
Old,O
Notes,O
or,O
an,O
obligation,O
to,O
issue,O
a,O
notice,O
of,O
redemption,O
of,O
Old,O
Notes,O
.,O
,O
In,O
the,O
event,O
that,O
we,O
elect,O
to,O
exercise,O
our,O
redemption,O
rights,O
in,O
respect,O
of,O
the,O
Old,O
Notes,O
",",O
the,O
appropriate,O
notice,O
or,O
notices,O
of,O
redemption,O
will,O
be,O
issued,O
at,O
a,O
later,O
date,O
or,O
dates,O
upon,O
the,O
terms,O
and,O
conditions,O
set,O
forth,O
in,O
the,O
indenture,O
governing,O
the,O
Old,O
Notes,O
.,O
,O
Credit,O
Agreement,O
Concurrently,O
with,O
the,O
completion,O
of,O
this,O
offering,O
",",O
we,O
plan,O
to,O
amend,O
our,O
existing,O
credit,O
agreement,O
in,O
order,O
to,O
(,O
i,O
),O
extend,O
the,O
maturity,O
date,O
of,O
all,O
or,O
a,O
portion,O
of,O
the,O
term,O
loan,O
facility,O
and,O
all,O
or,O
a,O
portion,O
of,O
the,O
revolving,O
credit,O
facility,O
",",O
(,O
ii,O
),O
reduce,O
the,O
size,O
of,O
the,O
term,O
loan,O
facility,O
(,O
and,O
make,O
a,O
corresponding,O
prepayment,O
),O
from,O
$,O
600.0,O
million,O
to,O
not,O
less,O
than,O
approximately,O
$,O
520.0,O
million,O
",",O
(,O
iii,O
),O
reduce,O
the,O
size,O
of,O
the,O
revolving,O
credit,O
facility,O
from,O
$,O
700.0,O
million,O
to,O
not,O
less,O
than,O
$,O
616.0,O
million,O
and,O
(,O
iv,O
),O
amend,O
certain,O
other,O
provisions,O
.,O
,O
Our,O
amended,O
credit,O
agreement,O
will,O
provide,O
for,O
a,O
bifurcation,O
of,O
the,O
current,O
term,O
loan,O
facility,O
into,O
a,O
tranche,O
maturing,O
on,O
July,O
18,O
",",O
2012,O
(,O
the,O
Existing,O
Term,O
Loan,O
Facility,O
),O
and,O
a,O
tranche,O
maturing,O
on,O
July,O
18,O
",",O
2014,O
(,O
the,O
Extended,O
Term,O
Loan,O
Facility,O
),O
(,O
provided,O
that,O
if,O
all,O
term,O
loan,O
lenders,O
agree,O
to,O
extend,O
the,O
maturity,O
date,O
of,O
their,O
term,O
loans,O
",",O
the,O
term,O
loan,O
facility,O
will,O
not,O
be,O
bifurcated,O
and,O
will,O
consist,O
of,O
solely,O
of,O
a,O
tranche,O
maturing,O
on,O
July,O
18,O
",",O
2014,O
),O
and,O
a,O
bifurcation,O
of,O
the,O
current,O
revolving,O
credit,O
facility,O
into,O
a,O
tranche,O
terminating,O
on,O
July,O
18,O
",",O
2012,O
(,O
the,O
Existing,O
Revolving,O
Facility,O
),O
and,O
a,O
tranche,O
terminating,O
on,O
July,O
18,O
",",O
2014,O
(,O
the,O
Extended,O
Revolving,O
Facility,O
),O
(,O
provided,O
that,O
if,O
all,O
revolving,O
lenders,O
agree,O
to,O
extend,O
the,O
maturity,O
date,O
of,O
their,O
revolving,O
loans,O
",",O
the,O
revolving,O
credit,O
facility,O
will,O
not,O
be,O
bifurcated,O
and,O
will,O
consist,O
solely,O
of,O
a,O
tranche,O
maturing,O
on,O
July,O
18,O
",",O
2014,O
),O
.,O
,O
We,O
may,O
not,O
be,O
able,O
to,O
amend,O
our,O
existing,O
credit,O
agreement,O
at,O
all,O
or,O
to,O
the,O
full,O
extent,O
described,O
above,O
and,O
in,O
the,O
subsequent,O
paragraphs,O
.,O
,O
This,O
offering,O
is,O
not,O
conditioned,O
on,O
an,O
amendment,O
and,O
extension,O
of,O
the,O
existing,O
credit,O
agreement,O
.,O
,O
If,O
we,O
are,O
unable,O
to,O
amend,O
the,O
existing,O
credit,O
agreement,O
or,O
are,O
only,O
able,O
to,O
amend,O
certain,O
provisions,O
of,O
the,O
existing,O
credit,O
agreement,O
",",O
the,O
descriptions,O
of,O
the,O
various,O
amendments,O
described,O
below,O
may,O
be,O
subject,O
to,O
change,O
.,O
,O
We,O
will,O
have,O
a,O
letter,O
of,O
credit,O
sublimit,O
as,O
part,O
of,O
our,O
revolving,O
credit,O
facility,O
.,O
,O
amount,O
of,O
any,O
outstanding,O
letters,O
of,O
credit,O
",",O
which,O
totaled,O
$,O
64.7,O
million,O
at,O
December,O
31,O
",",O
2009,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2009,O
",",O
we,O
had,O
no,O
borrowings,O
outstanding,O
under,O
the,O
revolving,O
credit,O
facility,O
",",O
leaving,O
$,O
635.3,O
million,O
of,O
borrowing,O
capacity,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2009,O
",",O
this,O
borrowing,O
capacity,O
was,O
limited,O
under,O
the,O
maximum,O
consolidated,O
leverage,O
ratio,O
contained,O
in,O
our,O
existing,O
credit,O
agreement,O
to,O
approximately,O
$,O
164,O
million,O
.,O
,O
The,O
credit,O
spread,O
charged,O
for,O
the,O
current,O
revolving,O
credit,O
facility,O
and,O
the,O
current,O
term,O
loan,O
facility,O
is,O
",",O
and,O
the,O
credit,O
spread,O
charged,O
for,O
the,O
Existing,O
Revolving,O
Facility,O
and,O
Existing,O
Term,O
Loan,O
Facility,O
under,O
the,O
amended,O
credit,O
agreement,O
will,O
be,O
",",O
affected,O
by,O
our,O
senior,O
unsecured,O
credit,O
ratings,O
from,O
Standard,I-BUSINESS
&,I-BUSINESS
Poor,I-BUSINESS
s,I-BUSINESS
(,O
BB+,O
",",O
with,O
stable,O
outlook,O
),O
and,O
Moody,I-BUSINESS
s,I-BUSINESS
(,O
Ba2,O
",",O
with,O
stable,O
outlook,O
),O
.,O
,O
For,O
instance,O
",",O
under,O
the,O
current,O
terms,O
of,O
our,O
existing,O
credit,O
agreement,O
",",O
a,O
one-notch,O
downgrade,O
of,O
our,O
senior,O
unsecured,O
credit,O
rating,O
by,O
either,O
Standard,I-BUSINESS
&,I-BUSINESS
Poor,I-BUSINESS
s,I-BUSINESS
or,O
Moody,I-BUSINESS
s,I-BUSINESS
would,O
result,O
in,O
a,O
25,O
basis,O
point,O
increase,O
in,O
the,O
credit,O
spread,O
under,O
our,O
term,O
loan,O
facility,O
",",O
a,O
20,O
basis,O
point,O
increase,O
in,O
the,O
credit,O
spread,O
under,O
our,O
revolving,O
credit,O
facility,O
",",O
and,O
a,O
5,O
basis,O
point,O
increase,O
in,O
the,O
facility,O
fee,O
applicable,O
to,O
our,O
revolving,O
credit,O
facility,O
.,O
,O
Credit,O
ratings,O
and/or,O
outlook,O
could,O
be,O
lowered,O
if,O
new,O
vehicle,O
demand,O
worsens,O
significantly,O
",",O
threatening,O
our,O
earnings,O
and,O
cash,O
flow,O
",",O
or,O
if,O
we,O
increase,O
our,O
financial,O
leverage,O
through,O
acquisitions,O
or,O
share,O
repurchases,O
.,O
,O
generate,O
cash,O
flow,O
while,O
maintaining,O
moderate,O
financial,O
policies,O
.,O
,O
The,O
credit,O
spread,O
charged,O
for,O
the,O
Extended,O
Revolving,O
Facility,O
and,O
Extended,O
Term,O
Loan,O
Facility,O
will,O
be,O
affected,O
by,O
our,O
total,O
leverage,O
ratio,O
calculated,O
using,O
our,O
most,O
recently,O
delivered,O
financial,O
statements,O
.,O
,O
For,O
instance,O
",",O
under,O
the,O
terms,O
of,O
the,O
proposed,O
amended,O
credit,O
agreement,O
",",O
a,O
one-notch,O
downgrade,O
of,O
our,O
total,O
leverage,O
ratio,O
from,O
greater,O
than,O
or,O
equal,O
to,O
1.5,O
to,O
1.0,O
but,O
less,O
than,O
2.0,O
to,O
1.0,O
to,O
greater,O
than,O
or,O
equal,O
to,O
2.00,O
to,O
1.0,O
but,O
less,O
than,O
3.0,O
to,O
1.0,O
would,O
result,O
in,O
a,O
25,O
basis,O
point,O
increase,O
in,O
the,O
credit,O
spread,O
under,O
our,O
term,O
loan,O
facility,O
",",O
a,O
25,O
basis,O
point,O
increase,O
in,O
the,O
credit,O
spread,O
under,O
our,O
revolving,O
credit,O
facility,O
",",O
and,O
a,O
12.5,O
basis,O
point,O
increase,O
in,O
the,O
commitment,O
fee,O
applicable,O
to,O
our,O
revolving,O
credit,O
facility,O
.,O
,O
We,O
may,O
select,O
interest,O
periods,O
of,O
one,O
week,O
or,O
one,O
",",O
two,O
",",O
three,O
",",O
six,O
or,O
twelve,O
months,O
",",O
subject,O
to,O
availability,O
with,O
the,O
participating,O
lenders,O
.,O
,O
We,O
will,O
be,O
required,O
to,O
pay,O
interest,O
on,O
loans,O
bearing,O
interest,O
at,O
the,O
LIBOR,I-MISCELLANEOUS
rate,O
at,O
the,O
end,O
of,O
the,O
selected,O
interest,O
period,O
",",O
but,O
no,O
less,O
frequently,O
than,O
quarterly,O
.,O
,O
For,O
all,O
other,O
loans,O
",",O
we,O
will,O
be,O
required,O
to,O
pay,O
interest,O
quarterly,O
.,O
,O
Our,O
existing,O
credit,O
agreement,O
provides,O
for,O
maturity,O
of,O
the,O
term,O
loans,O
on,O
July,O
18,O
",",O
2012,O
and,O
termination,O
of,O
the,O
revolving,O
credit,O
facility,O
and,O
payment,O
of,O
all,O
amounts,O
outstanding,O
thereunder,O
on,O
July,O
18,O
",",O
2012,O
.,O
,O
Our,O
amended,O
credit,O
agreement,O
will,O
provide,O
for,O
maturity,O
of,O
the,O
term,O
loans,O
under,O
the,O
Existing,O
Term,O
Loan,O
Facility,O
and,O
termination,O
of,O
the,O
revolving,O
credit,O
facility,O
and,O
payment,O
of,O
all,O
amounts,O
outstanding,O
thereunder,O
on,O
July,O
18,O
",",O
2012,O
",",O
and,O
maturity,O
of,O
the,O
term,O
loans,O
under,O
the,O
Extended,O
Term,O
Loan,O
Facility,O
and,O
termination,O
of,O
the,O
Extended,O
Revolving,O
Facility,O
and,O
payment,O
of,O
all,O
amounts,O
outstanding,O
thereunder,O
on,O
July,O
18,O
",",O
2014,O
.,O
,O
Our,O
existing,O
credit,O
agreement,O
is,O
",",O
and,O
the,O
amended,O
credit,O
agreement,O
will,O
be,O
",",O
guaranteed,O
by,O
substantially,O
all,O
of,O
our,O
direct,O
and,O
indirect,O
",",O
existing,O
and,O
future,O
domestic,O
subsidiaries,O
",",O
with,O
certain,O
limited,O
exceptions,O
.,O
,O
Optional,O
prepayments,O
and,O
commitment,O
reductions,O
.,O
,O
Under,O
the,O
existing,O
credit,O
agreement,O
",",O
we,O
are,O
able,O
to,O
prepay,O
amounts,O
outstanding,O
under,O
the,O
existing,O
credit,O
agreement,O
in,O
whole,O
or,O
in,O
part,O
at,O
any,O
time,O
without,O
premium,O
or,O
penalty,O
",",O
subject,O
to,O
reimbursement,O
of,O
the,O
lenders,O
breakage,O
and,O
redeployment,O
costs,O
in,O
the,O
case,O
of,O
a,O
prepayment,O
of,O
LIBOR,I-MISCELLANEOUS
borrowings,O
.,O
,O
Under,O
the,O
existing,O
credit,O
agreement,O
",",O
we,O
are,O
also,O
able,O
to,O
cancel,O
the,O
unutilized,O
portion,O
of,O
any,O
commitment,O
under,O
the,O
revolving,O
credit,O
facility,O
in,O
excess,O
of,O
the,O
competitive,O
bid,O
loans,O
",",O
the,O
swing,O
line,O
loans,O
and,O
the,O
stated,O
amount,O
of,O
all,O
letters,O
of,O
credit,O
in,O
whole,O
or,O
in,O
part,O
without,O
premium,O
or,O
penalty,O
.,O
,O
Under,O
the,O
amended,O
credit,O
agreement,O
",",O
we,O
will,O
be,O
able,O
to,O
prepay,O
amounts,O
outstanding,O
under,O
the,O
amended,O
credit,O
agreement,O
in,O
whole,O
or,O
in,O
part,O
at,O
any,O
time,O
without,O
premium,O
or,O
penalty,O
",",O
subject,O
to,O
reimbursement,O
of,O
the,O
lenders,O
breakage,O
and,O
redeployment,O
costs,O
in,O
the,O
case,O
of,O
a,O
prepayment,O
of,O
LIBOR,I-MISCELLANEOUS
borrowings,O
.,O
,O
Under,O
the,O
amended,O
credit,O
agreement,O
",",O
we,O
will,O
also,O
be,O
able,O
to,O
cancel,O
the,O
unutilized,O
portion,O
of,O
any,O
commitment,O
under,O
the,O
revolving,O
credit,O
facility,O
in,O
excess,O
of,O
the,O
competitive,O
bid,O
loans,O
",",O
the,O
swing,O
line,O
loans,O
and,O
the,O
stated,O
amount,O
of,O
all,O
letters,O
of,O
credit,O
in,O
whole,O
or,O
in,O
part,O
without,O
premium,O
or,O
penalty,O
.,O
,O
Under,O
the,O
existing,O
credit,O
agreement,O
we,O
are,O
",",O
and,O
under,O
the,O
amended,O
credit,O
agreement,O
we,O
will,O
be,O
",",O
subject,O
to,O
covenants,O
that,O
restrict,O
our,O
ability,O
to,O
",",O
among,O
other,O
things,O
:,O
,O
Under,O
the,O
existing,O
credit,O
agreement,O
",",O
we,O
are,O
subject,O
to,O
financial,O
covenants,O
including,O
a,O
maximum,O
leverage,O
ratio,O
of,O
2.75x,O
and,O
a,O
maximum,O
capitalization,O
ratio,O
of,O
no,O
more,O
than,O
65,O
%,O
.,O
,O
the,O
amended,O
credit,O
agreement,O
",",O
we,O
will,O
be,O
subject,O
to,O
financial,O
covenants,O
including,O
a,O
maximum,O
leverage,O
ratio,O
of,O
3.25x,O
and,O
a,O
maximum,O
capitalization,O
ratio,O
of,O
no,O
more,O
than,O
60,O
%,O
.,O
,O
In,O
addition,O
",",O
unlike,O
our,O
existing,O
credit,O
agreement,O
",",O
the,O
maximum,O
capitalization,O
ratio,O
under,O
the,O
amended,O
credit,O
agreement,O
will,O
be,O
calculated,O
excluding,O
goodwill,O
",",O
franchise,O
rights,O
and,O
long-lived,O
asset,O
impairments,O
subsequent,O
to,O
2007,O
.,O
,O
Floorplan,O
facilities,O
We,O
maintain,O
secured,O
used,O
floorplan,O
facilities,O
primarily,O
collateralized,O
by,O
used,O
vehicle,O
inventories,O
and,O
related,O
receivables,O
.,O
,O
At,O
December,O
31,O
",",O
2009,O
",",O
the,O
aggregate,O
capacity,O
under,O
these,O
facilities,O
was,O
$,O
170.0,O
million,O
.,O
,O
As,O
of,O
that,O
date,O
",",O
$,O
80.8,O
million,O
had,O
been,O
borrowed,O
under,O
these,O
facilities,O
.,O
,O
The,O
remaining,O
borrowing,O
capacity,O
under,O
these,O
facilities,O
of,O
$,O
89.2,O
million,O
was,O
limited,O
to,O
$,O
53.1,O
million,O
based,O
on,O
the,O
eligible,O
used,O
vehicle,O
inventory,O
that,O
could,O
have,O
been,O
pledged,O
as,O
collateral,O
.,O
,O
Vehicle,O
floorplan,O
payable-trade,O
totaled,O
$,O
1.0,O
billion,O
at,O
December,O
31,O
",",O
2009,O
.,O
,O
Vehicle,O
floorplan,O
payable-trade,O
reflects,O
amounts,O
borrowed,O
to,O
finance,O
the,O
purchase,O
of,O
specific,O
new,O
vehicle,O
inventories,O
with,O
manufacturers,O
captive,O
finance,O
subsidiaries,O
.,O
,O
Vehicle,O
floorplan,O
payable-non-trade,O
totaled,O
$,O
357.6,O
million,O
at,O
December,O
31,O
",",O
2009,O
",",O
and,O
represents,O
amounts,O
borrowed,O
to,O
finance,O
the,O
purchase,O
of,O
specific,O
new,O
and,O
",",O
to,O
a,O
lesser,O
extent,O
",",O
used,O
vehicle,O
inventories,O
with,O
non-trade,O
lenders,O
.,O
,O
All,O
the,O
floorplan,O
facilities,O
generally,O
utilize,O
LIBOR-based,I-MISCELLANEOUS
interest,O
rates,O
.,O
,O
Floorplan,O
facilities,O
are,O
due,O
on,O
demand,O
",",O
but,O
in,O
the,O
case,O
of,O
new,O
vehicle,O
inventories,O
",",O
are,O
generally,O
paid,O
within,O
several,O
business,O
days,O
after,O
the,O
related,O
vehicles,O
are,O
sold,O
.,O
,O
Our,O
manufacturer,O
agreements,O
generally,O
require,O
that,O
the,O
manufacturer,O
have,O
the,O
ability,O
to,O
draft,O
against,O
the,O
new,O
floorplan,O
facilities,O
so,O
the,O
lender,O
directly,O
funds,O
the,O
manufacturer,O
for,O
the,O
purchase,O
of,O
new,O
vehicle,O
inventory,O
.,O
,O
Floorplan,O
facilities,O
are,O
primarily,O
collateralized,O
by,O
vehicle,O
inventories,O
and,O
related,O
receivables,O
.,O
,O
Mortgage,O
facility,O
At,O
December,O
31,O
",",O
2009,O
",",O
we,O
had,O
$,O
226.4,O
million,O
outstanding,O
under,O
a,O
mortgage,O
facility,O
with,O
an,O
automotive,O
manufacturer,O
s,O
captive,O
finance,O
subsidiary,O
.,O
,O
The,O
mortgage,O
facility,O
was,O
refinanced,O
under,O
a,O
new,O
facility,O
in,O
November,O
2007,O
to,O
provide,O
a,O
fixed,O
interest,O
rate,O
(,O
5.864,O
%,O
),O
and,O
provide,O
financing,O
secured,O
by,O
10-year,O
mortgages,O
on,O
certain,O
of,O
our,O
store,O
properties,O
.,O
,O
The,O
mortgage,O
facility,O
requires,O
monthly,O
principal,O
and,O
interest,O
payments,O
of,O
$,O
1.7,O
million,O
based,O
on,O
a,O
fixed,O
amortization,O
schedule,O
with,O
a,O
balloon,O
payment,O
of,O
$,O
155.4,O
million,O
due,O
November,O
2017,O
.,O
,O
The,O
notes,O
will,O
be,O
issued,O
under,O
a,O
senior,O
indenture,O
to,O
be,O
dated,O
as,O
of,O
April,O
",",O
2010,O
",",O
as,O
amended,O
and,O
supplemented,O
by,O
a,O
supplemental,O
indenture,O
",",O
to,O
be,O
dated,O
as,O
of,O
April,O
",",O
2010,O
",",O
between,O
us,O
and,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
as,O
trustee,O
(,O
as,O
so,O
amended,O
",",O
the,O
indenture,O
),O
.,O
,O
Throughout,O
this,O
summary,O
",",O
we,O
refer,O
to,O
both,O
the,O
senior,O
indenture,O
and,O
supplemental,O
indenture,O
together,O
as,O
the,O
indenture,O
.,O
,O
The,O
indenture,O
is,O
subject,O
to,O
and,O
is,O
governed,O
by,O
the,O
Trust,I-LEGISLATION/ACT
Indenture,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1939,I-LEGISLATION/ACT
",",O
as,O
amended,O
.,O
,O
We,O
have,O
filed,O
a,O
form,O
of,O
the,O
senior,O
indenture,O
as,O
an,O
exhibit,O
to,O
the,O
registration,O
statement,O
of,O
which,O
the,O
accompanying,O
prospectus,O
forms,O
a,O
part,O
.,O
,O
The,O
following,O
description,O
summarizes,O
selected,O
provisions,O
of,O
the,O
indenture,O
and,O
the,O
notes,O
.,O
,O
It,O
does,O
not,O
restate,O
the,O
indenture,O
or,O
the,O
terms,O
of,O
the,O
notes,O
in,O
their,O
entirety,O
.,O
,O
We,O
urge,O
you,O
to,O
read,O
the,O
forms,O
of,O
the,O
indenture,O
and,O
the,O
notes,O
because,O
the,O
indenture,O
and,O
the,O
notes,O
",",O
and,O
not,O
this,O
description,O
",",O
define,O
the,O
rights,O
of,O
noteholders,O
.,O
,O
Copies,O
of,O
the,O
indenture,O
and,O
the,O
notes,O
are,O
available,O
from,O
us,O
upon,O
request,O
.,O
,O
See,O
Where,O
You,O
Can,O
Find,O
Additional,O
Information,O
in,O
the,O
accompanying,O
prospectus,O
.,O
,O
In,O
this,O
Description,I-MISCELLANEOUS
of,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Notes,I-MISCELLANEOUS
",",O
the,O
terms,O
Company,O
",",O
we,O
",",O
us,O
",",O
our,O
and,O
similar,O
words,O
refer,O
only,O
to,O
AutoNation,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
its,O
successors,O
under,O
the,O
indenture,O
",",O
in,O
each,O
case,O
excluding,O
its,O
subsidiaries,O
.,O
,O
General,O
The,O
notes,O
:,O
,O
Interest,O
on,O
the,O
notes,O
will,O
:,O
,O
If,O
any,O
interest,O
payment,O
date,O
or,O
maturity,O
date,O
falls,O
on,O
a,O
day,O
that,O
is,O
not,O
a,O
business,O
day,O
",",O
the,O
required,O
payment,O
of,O
principal,O
or,O
interest,O
will,O
be,O
made,O
on,O
the,O
next,O
business,O
day,O
as,O
if,O
made,O
on,O
the,O
date,O
that,O
payment,O
was,O
due,O
",",O
and,O
no,O
interest,O
will,O
accrue,O
on,O
that,O
payment,O
for,O
the,O
period,O
from,O
and,O
after,O
the,O
interest,O
payment,O
date,O
or,O
maturity,O
date,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
to,O
the,O
date,O
of,O
the,O
payment,O
on,O
the,O
next,O
business,O
day,O
.,O
,O
Guarantees,O
The,O
indenture,O
will,O
provide,O
that,O
the,O
Company,O
s,O
payment,O
obligations,O
under,O
the,O
notes,O
will,O
be,O
jointly,O
and,O
severally,O
",",O
fully,O
and,O
unconditionally,O
",",O
guaranteed,O
(,O
the,O
Subsidiary,O
Guarantees,O
),O
on,O
a,O
senior,O
basis,O
by,O
the,O
Guarantors,O
.,O
,O
The,O
Guarantors,O
are,O
comprised,O
of,O
substantially,O
all,O
of,O
the,O
direct,O
and,O
indirect,O
Domestic,O
Subsidiaries,O
of,O
the,O
Company,O
.,O
,O
The,O
notes,O
will,O
be,O
effectively,O
subordinated,O
in,O
right,O
of,O
payment,O
to,O
all,O
of,O
the,O
liabilities,O
of,O
the,O
Subsidiaries,O
of,O
the,O
Company,O
that,O
do,O
not,O
guarantee,O
the,O
notes,O
.,O
,O
For,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
",",O
our,O
non-guarantor,O
Subsidiaries,O
represented,O
less,O
than,O
1,O
%,O
of,O
our,O
total,O
assets,O
",",O
total,O
revenues,O
",",O
income,O
from,O
continuing,O
operations,O
before,O
income,O
taxes,O
and,O
cash,O
flows,O
from,O
operating,O
activities,O
.,O
,O
In,O
addition,O
",",O
if,O
any,O
Domestic,O
Subsidiary,O
of,O
the,O
Company,O
becomes,O
a,O
guarantor,O
or,O
obligor,O
in,O
respect,O
of,O
any,O
other,O
Indebtedness,O
of,O
the,O
Company,O
or,O
any,O
of,O
the,O
Guarantors,O
",",O
the,O
Company,O
shall,O
cause,O
such,O
Domestic,O
Subsidiary,O
to,O
enter,O
into,O
a,O
supplemental,O
indenture,O
in,O
which,O
such,O
Domestic,O
Subsidiary,O
shall,O
agree,O
to,O
guarantee,O
the,O
Company,O
s,O
obligations,O
under,O
the,O
notes,O
.,O
,O
If,O
the,O
Company,O
defaults,O
in,O
payment,O
of,O
the,O
principal,O
or,O
interest,O
on,O
the,O
notes,O
",",O
each,O
of,O
the,O
Guarantors,O
will,O
be,O
unconditionally,O
",",O
jointly,O
and,O
severally,O
",",O
obligated,O
to,O
duly,O
and,O
punctually,O
pay,O
the,O
principal,O
and,O
interest,O
on,O
the,O
notes,O
.,O
,O
The,O
obligations,O
of,O
each,O
Guarantor,O
under,O
its,O
Subsidiary,O
Guarantee,O
are,O
limited,O
to,O
the,O
maximum,O
amount,O
which,O
",",O
after,O
giving,O
effect,O
to,O
all,O
other,O
contingent,O
and,O
fixed,O
liabilities,O
of,O
such,O
Guarantor,O
",",O
and,O
after,O
giving,O
effect,O
to,O
any,O
collections,O
from,O
or,O
payments,O
made,O
by,O
or,O
on,O
behalf,O
of,O
any,O
other,O
Guarantor,O
in,O
respect,O
of,O
the,O
obligations,O
of,O
such,O
other,O
Guarantor,O
under,O
its,O
Subsidiary,O
Guarantee,O
or,O
pursuant,O
to,O
its,O
contribution,O
obligations,O
under,O
the,O
indenture,O
",",O
will,O
result,O
in,O
the,O
obligations,O
of,O
such,O
Guarantor,O
under,O
its,O
Subsidiary,O
Guarantee,O
not,O
constituting,O
a,O
fraudulent,O
conveyance,O
or,O
fraudulent,O
transfer,O
under,O
Federal,I-GOVERNMENT
or,O
state,O
law,O
.,O
,O
Each,O
Guarantor,O
that,O
makes,O
a,O
payment,O
or,O
distribution,O
under,O
its,O
Subsidiary,O
Guarantee,O
will,O
be,O
entitled,O
to,O
a,O
contribution,O
from,O
any,O
other,O
Guarantor,O
in,O
a,O
pro,O
rata,O
amount,O
based,O
on,O
the,O
net,O
assets,O
of,O
each,O
Guarantor,O
determined,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
.,O
,O
The,O
enforcement,O
of,O
certain,O
rights,O
with,O
respect,O
to,O
the,O
Subsidiary,O
Guarantees,O
is,O
also,O
subject,O
to,O
the,O
terms,O
of,O
the,O
Manufacturers,O
Letter,O
Agreements,O
.,O
,O
Notwithstanding,O
the,O
foregoing,O
",",O
in,O
certain,O
circumstances,O
a,O
Subsidiary,O
Guarantee,O
of,O
a,O
Guarantor,O
may,O
be,O
released,O
pursuant,O
to,O
the,O
provisions,O
under,O
Covenants,O
Limitation,O
on,O
Issuances,O
of,O
Guarantees,O
of,O
Indebtedness,O
.,O
,O
The,O
Company,O
also,O
may,O
",",O
at,O
any,O
time,O
",",O
cause,O
a,O
Domestic,O
Subsidiary,O
to,O
become,O
a,O
Guarantor,O
by,O
executing,O
and,O
delivering,O
a,O
supplemental,O
indenture,O
providing,O
for,O
the,O
guarantee,O
of,O
payment,O
of,O
the,O
notes,O
by,O
such,O
Domestic,O
Subsidiary,O
on,O
the,O
basis,O
provided,O
in,O
the,O
indenture,O
.,O
,O
Ranking,O
The,O
notes,O
will,O
be,O
unsecured,O
senior,O
obligations,O
of,O
the,O
Company,O
",",O
and,O
the,O
Indebtedness,O
represented,O
by,O
the,O
notes,O
and,O
the,O
payment,O
of,O
principal,O
of,O
and,O
interest,O
on,O
the,O
notes,O
will,O
rank,O
equally,O
in,O
right,O
of,O
payment,O
with,O
all,O
other,O
existing,O
and,O
future,O
unsubordinated,O
unsecured,O
Indebtedness,O
of,O
the,O
Company,O
and,O
senior,O
in,O
right,O
of,O
payment,O
to,O
all,O
existing,O
and,O
future,O
subordinated,O
Indebtedness,O
of,O
the,O
Company,O
.,O
,O
In,O
the,O
event,O
that,O
our,O
senior,O
secured,O
creditors,O
exercise,O
remedies,O
with,O
respect,O
to,O
the,O
collateral,O
securing,O
such,O
senior,O
secured,O
debt,O
",",O
the,O
proceeds,O
of,O
the,O
liquidation,O
of,O
that,O
collateral,O
will,O
first,O
be,O
applied,O
to,O
repay,O
obligations,O
secured,O
by,O
such,O
liens,O
before,O
any,O
such,O
proceeds,O
can,O
be,O
applied,O
to,O
repay,O
any,O
senior,O
unsecured,O
obligations,O
",",O
including,O
the,O
notes,O
.,O
,O
The,O
Indebtedness,O
evidenced,O
by,O
each,O
Subsidiary,O
Guarantee,O
(,O
including,O
the,O
payment,O
of,O
principal,O
of,O
and,O
interest,O
on,O
the,O
notes,O
),O
is,O
unsecured,O
",",O
ranks,O
equally,O
in,O
right,O
of,O
payment,O
with,O
all,O
other,O
existing,O
and,O
future,O
unsubordinated,O
unsecured,O
Indebtedness,O
of,O
such,O
Guarantor,O
and,O
ranks,O
senior,O
in,O
right,O
of,O
payment,O
to,O
all,O
subordinated,O
Indebtedness,O
of,O
such,O
Guarantor,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2009,O
",",O
on,O
a,O
pro,O
forma,O
basis,O
after,O
giving,O
effect,O
to,O
(,O
i,O
),O
the,O
purchase,O
of,O
all,O
of,O
the,O
$,O
146.1,O
million,O
in,O
aggregate,O
principal,O
amount,O
of,O
Floating,O
Rate,O
Notes,O
",",O
including,O
accrued,O
and,O
unpaid,O
interest,O
",",O
and,O
all,O
of,O
the,O
$,O
132.6,O
million,O
in,O
aggregate,O
principal,O
amount,O
of,O
the,O
Fixed,O
Rate,O
Notes,O
",",O
including,O
accrued,O
and,O
unpaid,O
interest,O
",",O
in,O
each,O
case,O
pursuant,O
to,O
the,O
Offers,O
",",O
and,O
the,O
payment,O
of,O
related,O
consents,O
in,O
connection,O
therewith,O
",",O
(,O
ii,O
),O
the,O
issuance,O
of,O
the,O
notes,O
and,O
the,O
application,O
of,O
the,O
net,O
proceeds,O
therefrom,O
and,O
(,O
iii,O
),O
the,O
paydown,O
of,O
approximately,O
$,O
80.0,O
million,O
of,O
borrowings,O
under,O
the,O
term,O
loan,O
facility,O
under,O
our,O
existing,O
credit,O
agreement,O
",",O
the,O
Company,O
and,O
the,O
Guarantors,O
would,O
have,O
had,O
approximately,O
$,O
2.5,O
billion,O
of,O
Indebtedness,O
(,O
including,O
borrowings,O
under,O
our,O
existing,O
credit,O
agreement,O
",",O
mortgage,O
facility,O
",",O
capital,O
leases,O
and,O
floorplan,O
financing,O
arrangements,O
),O
",",O
of,O
which,O
approximately,O
$,O
1.6,O
billion,O
would,O
have,O
been,O
secured,O
.,O
,O
Additional,O
Issuances,O
We,O
may,O
issue,O
additional,O
notes,O
",",O
without,O
limitation,O
and,O
without,O
your,O
consent,O
.,O
,O
If,O
we,O
issue,O
additional,O
notes,O
under,O
the,O
indenture,O
",",O
they,O
will,O
have,O
the,O
same,O
terms,O
and,O
conditions,O
as,O
the,O
notes,O
being,O
offered,O
by,O
this,O
prospectus,O
supplement,O
in,O
all,O
respects,O
(,O
except,O
for,O
the,O
payment,O
of,O
interest,O
accruing,O
prior,O
to,O
the,O
issue,O
date,O
of,O
the,O
additional,O
notes,O
),O
so,O
that,O
the,O
additional,O
notes,O
may,O
be,O
consolidated,O
and,O
form,O
a,O
single,O
series,O
with,O
the,O
notes,O
of,O
that,O
series,O
issued,O
under,O
this,O
prospectus,O
supplement,O
.,O
,O
Optional,O
Redemption,O
Optional,O
Redemption,O
With,O
Proceeds,O
from,O
Public,O
Equity,O
Offerings,O
At,O
any,O
time,O
prior,O
to,O
",",O
2013,O
",",O
we,O
may,O
redeem,O
up,O
to,O
35,O
%,O
of,O
the,O
principal,O
amount,O
of,O
the,O
notes,O
with,O
the,O
net,O
cash,O
proceeds,O
of,O
one,O
or,O
more,O
Public,O
Equity,O
Offerings,O
of,O
our,O
common,O
stock,O
at,O
a,O
redemption,O
price,O
(,O
expressed,O
as,O
a,O
percentage,O
of,O
principal,O
amount,O
),O
of,O
%,O
",",O
plus,O
accrued,O
and,O
unpaid,O
interest,O
to,O
the,O
redemption,O
date,O
;,O
provided,O
that,O
at,O
least,O
65,O
%,O
of,O
the,O
aggregate,O
principal,O
amount,O
of,O
notes,O
originally,O
issued,O
on,O
the,O
closing,O
date,O
remains,O
outstanding,O
after,O
each,O
such,O
redemption,O
and,O
notice,O
of,O
any,O
such,O
redemption,O
is,O
mailed,O
within,O
60,O
days,O
of,O
each,O
such,O
Public,O
Equity,O
Offering,O
.,O
,O
For,O
the,O
purposes,O
of,O
this,O
redemption,O
provision,O
",",O
a,O
Public,O
Equity,O
Offering,O
means,O
an,O
underwritten,O
public,O
offering,O
of,O
common,O
stock,O
(,O
other,O
than,O
redeemable,O
capital,O
stock,O
),O
of,O
the,O
Company,O
with,O
gross,O
cash,O
proceeds,O
to,O
the,O
Company,O
of,O
at,O
least,O
$,O
50.0,O
million,O
pursuant,O
to,O
an,O
effective,O
registration,O
statement,O
filed,O
pursuant,O
to,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
other,O
than,O
a,O
registration,O
statement,O
on,O
Form,I-MISCELLANEOUS
S-4,I-MISCELLANEOUS
(,O
or,O
any,O
successor,O
form,O
covering,O
substantially,O
the,O
same,O
transactions,O
),O
",",O
Form,I-MISCELLANEOUS
S-8,I-MISCELLANEOUS
(,O
or,O
any,O
successor,O
form,O
covering,O
substantially,O
the,O
same,O
transactions,O
),O
or,O
otherwise,O
relating,O
to,O
equity,O
securities,O
issuable,O
under,O
any,O
employee,O
benefit,O
plan,O
of,O
the,O
Company,O
),O
.,O
,O
Optional,O
Make-Whole,O
Redemption,O
We,O
may,O
redeem,O
the,O
notes,O
",",O
at,O
our,O
option,O
",",O
at,O
any,O
time,O
in,O
whole,O
",",O
or,O
from,O
time,O
to,O
time,O
in,O
part,O
",",O
at,O
a,O
make-whole,O
redemption,O
price,O
equal,O
to,O
the,O
greater,O
of,O
:,O
,O
For,O
purposes,O
of,O
determining,O
the,O
optional,O
make-whole,O
redemption,O
price,O
",",O
the,O
following,O
definitions,O
are,O
applicable,O
:,O
Comparable,O
Treasury,O
Issue,O
means,O
the,O
United,I-GOVERNMENT
States,I-GOVERNMENT
Treasury,I-GOVERNMENT
security,O
selected,O
by,O
an,O
Independent,O
Investment,O
Banker,O
as,O
having,O
a,O
maturity,O
comparable,O
to,O
the,O
remaining,O
term,O
(,O
as,O
measured,O
from,O
the,O
date,O
of,O
redemption,O
),O
of,O
the,O
notes,O
that,O
would,O
be,O
utilized,O
",",O
at,O
the,O
time,O
of,O
selection,O
and,O
in,O
accordance,O
with,O
customary,O
financial,O
practice,O
",",O
in,O
pricing,O
new,O
issues,O
of,O
corporate,O
debt,O
securities,O
of,O
comparable,O
maturity,O
to,O
the,O
remaining,O
terms,O
of,O
the,O
notes,O
.,O
,O
Comparable,O
Treasury,O
Price,O
means,O
",",O
with,O
respect,O
to,O
any,O
redemption,O
date,O
",",O
(,O
i,O
),O
the,O
average,O
of,O
the,O
Reference,O
Treasury,O
Dealer,O
Quotations,O
obtained,O
by,O
us,O
for,O
that,O
redemption,O
date,O
",",O
after,O
excluding,O
the,O
highest,O
and,O
lowest,O
of,O
such,O
Reference,O
Treasury,O
Dealer,O
Quotations,O
",",O
(,O
ii,O
),O
if,O
we,O
are,O
unable,O
to,O
obtain,O
at,O
least,O
four,O
such,O
Reference,O
Treasury,O
Dealer,O
Quotations,O
",",O
the,O
average,O
of,O
all,O
Reference,O
Treasury,O
Dealer,O
Quotations,O
obtained,O
by,O
us,O
",",O
or,O
(,O
iii,O
),O
if,O
only,O
one,O
Reference,O
Treasury,O
Dealer,O
Quotation,O
is,O
received,O
",",O
such,O
quotation,O
.,O
,O
Independent,O
Investment,O
Banker,O
means,O
Banc,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
Securities,I-BUSINESS
LLC,I-BUSINESS
",",O
or,O
",",O
if,O
such,O
firm,O
is,O
unwilling,O
or,O
unable,O
to,O
select,O
the,O
applicable,O
Comparable,O
Treasury,O
Issue,O
",",O
an,O
independent,O
investment,O
banking,O
institution,O
of,O
national,O
standing,O
appointed,O
by,O
us,O
.,O
,O
Reference,O
Treasury,O
Dealer,O
means,O
Banc,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
Securities,I-BUSINESS
LLC,I-BUSINESS
and,O
its,O
successors,O
",",O
and,O
at,O
least,O
two,O
other,O
primary,O
U.S.,I-LOCATION
government,O
securities,O
dealers,O
in,O
New,I-LOCATION
York,I-LOCATION
City,I-LOCATION
(,O
each,O
",",O
a,O
Primary,O
Treasury,O
Dealer,O
),O
selected,O
by,O
the,O
Independent,O
Investment,O
Banker,O
;,O
provided,O
",",O
however,O
",",O
that,O
if,O
any,O
of,O
the,O
foregoing,O
shall,O
cease,O
to,O
be,O
a,O
Primary,O
Treasury,O
Dealer,O
",",O
we,O
shall,O
substitute,O
therefor,O
another,O
Primary,O
Treasury,O
Dealer,O
.,O
,O
Reference,O
Treasury,O
Dealer,O
Quotations,O
means,O
",",O
with,O
respect,O
to,O
each,O
Reference,O
Treasury,O
Dealer,O
and,O
any,O
redemption,O
date,O
for,O
the,O
notes,O
",",O
an,O
average,O
",",O
as,O
determined,O
by,O
us,O
",",O
of,O
the,O
bid,O
and,O
asked,O
prices,O
for,O
the,O
Comparable,O
Treasury,O
Issue,O
for,O
the,O
notes,O
",",O
expressed,O
in,O
each,O
case,O
as,O
a,O
percentage,O
of,O
its,O
principal,O
amount,O
",",O
quoted,O
in,O
writing,O
to,O
the,O
us,O
by,O
the,O
Reference,O
Treasury,O
Dealer,O
at,O
3:30,O
p.m.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
the,O
third,O
business,O
day,O
preceding,O
the,O
redemption,O
date,O
.,O
,O
Treasury,O
Yield,O
means,O
",",O
with,O
respect,O
to,O
any,O
redemption,O
date,O
applicable,O
to,O
the,O
notes,O
",",O
the,O
rate,O
per,O
annum,O
equal,O
to,O
the,O
semi-annual,O
equivalent,O
yield,O
to,O
maturity,O
",",O
computed,O
as,O
of,O
the,O
third,O
business,O
day,O
immediately,O
preceding,O
the,O
redemption,O
date,O
",",O
of,O
the,O
Comparable,O
Treasury,O
Issue,O
",",O
assuming,O
a,O
price,O
for,O
the,O
Comparable,O
Treasury,O
Issue,O
",",O
expressed,O
as,O
a,O
percentage,O
of,O
its,O
principal,O
amount,O
",",O
equal,O
to,O
the,O
applicable,O
Comparable,O
Treasury,O
Price,O
for,O
the,O
redemption,O
date,O
.,O
,O
General,O
The,O
notes,O
called,O
for,O
redemption,O
become,O
due,O
on,O
the,O
date,O
fixed,O
for,O
redemption,O
.,O
,O
Notices,O
of,O
redemption,O
will,O
be,O
mailed,O
by,O
first-class,O
mail,O
at,O
least,O
30,O
but,O
not,O
more,O
than,O
60,O
days,O
before,O
the,O
redemption,O
date,O
to,O
each,O
holder,O
of,O
notes,O
to,O
be,O
redeemed,O
at,O
its,O
registered,O
address,O
.,O
,O
The,O
notice,O
of,O
redemption,O
for,O
the,O
notes,O
will,O
state,O
the,O
amount,O
to,O
be,O
redeemed,O
.,O
,O
On,O
and,O
after,O
the,O
redemption,O
date,O
",",O
interest,O
will,O
cease,O
to,O
accrue,O
on,O
any,O
notes,O
that,O
are,O
redeemed,O
.,O
,O
If,O
less,O
than,O
all,O
of,O
the,O
notes,O
are,O
redeemed,O
at,O
any,O
time,O
",",O
the,O
notes,O
to,O
be,O
redeemed,O
shall,O
be,O
selected,O
by,O
lot,O
by,O
DTC,I-BUSINESS
",",O
in,O
the,O
case,O
of,O
notes,O
represented,O
by,O
a,O
global,O
security,O
",",O
or,O
by,O
the,O
trustee,O
by,O
a,O
method,O
the,O
trustee,O
deems,O
fair,O
and,O
appropriate,O
",",O
in,O
the,O
case,O
of,O
notes,O
that,O
are,O
not,O
represented,O
by,O
a,O
global,O
security,O
.,O
,O
No,O
note,O
of,O
$,O
"2,000",O
in,O
principal,O
amount,O
or,O
less,O
shall,O
be,O
redeemed,O
in,O
part,O
.,O
,O
If,O
any,O
note,O
is,O
to,O
be,O
redeemed,O
in,O
part,O
only,O
",",O
the,O
notice,O
of,O
redemption,O
relating,O
to,O
such,O
note,O
will,O
state,O
the,O
portion,O
of,O
the,O
principal,O
amount,O
to,O
be,O
redeemed,O
.,O
,O
A,O
new,O
note,O
in,O
principal,O
amount,O
equal,O
to,O
the,O
unredeemed,O
portion,O
will,O
be,O
issued,O
upon,O
cancellation,O
of,O
the,O
original,O
note,O
.,O
,O
No,O
Sinking,O
Fund,O
The,O
notes,O
will,O
not,O
be,O
entitled,O
to,O
the,O
benefit,O
of,O
any,O
sinking,O
fund,O
.,O
,O
Repurchase,O
Upon,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
If,O
a,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
occurs,O
",",O
unless,O
the,O
Company,O
has,O
exercised,O
its,O
right,O
to,O
redeem,O
the,O
notes,O
as,O
described,O
above,O
under,O
—Optional,I-MISCELLANEOUS
Redemption,I-MISCELLANEOUS
",",O
the,O
Company,O
will,O
be,O
required,O
to,O
make,O
an,O
offer,O
to,O
each,O
holder,O
of,O
the,O
notes,O
to,O
repurchase,O
all,O
or,O
any,O
part,O
(,O
equal,O
to,O
$,O
"2,000",O
or,O
an,O
integral,O
multiple,O
of,O
$,O
"1,000",O
in,O
excess,O
thereof,O
),O
of,O
that,O
holder,O
s,O
notes,O
at,O
a,O
repurchase,O
price,O
in,O
cash,O
equal,O
to,O
101,O
%,O
of,O
the,O
aggregate,O
principal,O
amount,O
of,O
the,O
notes,O
repurchased,O
plus,O
any,O
accrued,O
and,O
unpaid,O
interest,O
on,O
the,O
notes,O
repurchased,O
to,O
",",O
but,O
not,O
including,O
",",O
the,O
date,O
of,O
repurchase,O
;,O
provided,O
that,O
after,O
giving,O
effect,O
to,O
the,O
purchase,O
",",O
any,O
notes,O
that,O
remain,O
outstanding,O
shall,O
have,O
a,O
denomination,O
of,O
$,O
"2,000",O
and,O
integral,O
multiples,O
of,O
$,O
"1,000",O
above,O
that,O
amount,O
.,O
,O
Within,O
30,O
days,O
following,O
any,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
or,O
",",O
at,O
the,O
option,O
of,O
the,O
Company,O
",",O
prior,O
to,O
any,O
Change,O
of,O
Control,O
",",O
but,O
after,O
the,O
public,O
announcement,O
of,O
the,O
transaction,O
that,O
constitutes,O
or,O
may,O
constitute,O
the,O
Change,O
of,O
Control,O
",",O
the,O
Company,O
will,O
be,O
required,O
to,O
mail,O
a,O
notice,O
(,O
a,O
Change,O
of,O
Control,O
Offer,O
),O
to,O
each,O
holder,O
",",O
with,O
a,O
copy,O
to,O
the,O
trustee,O
",",O
describing,O
the,O
transaction,O
or,O
transactions,O
that,O
constitute,O
or,O
may,O
constitute,O
the,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
and,O
offering,O
to,O
repurchase,O
the,O
notes,O
on,O
the,O
payment,O
date,O
specified,O
in,O
the,O
notice,O
",",O
which,O
date,O
will,O
be,O
no,O
earlier,O
than,O
30,O
days,O
and,O
no,O
later,O
than,O
60,O
days,O
from,O
the,O
date,O
such,O
notice,O
is,O
mailed,O
.,O
,O
The,O
notice,O
shall,O
",",O
if,O
mailed,O
prior,O
to,O
the,O
date,O
of,O
consummation,O
of,O
the,O
Change,O
of,O
Control,O
",",O
state,O
that,O
the,O
Change,O
of,O
Control,O
Offer,O
is,O
conditioned,O
on,O
a,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
occurring,O
on,O
or,O
prior,O
to,O
the,O
payment,O
date,O
specified,O
in,O
the,O
notice,O
.,O
,O
The,O
Company,O
will,O
comply,O
with,O
the,O
requirements,O
of,O
Rule,O
14e-1,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
and,O
any,O
other,O
securities,O
laws,O
and,O
regulations,O
thereunder,O
to,O
the,O
extent,O
those,O
laws,O
and,O
regulations,O
are,O
applicable,O
in,O
connection,O
with,O
the,O
repurchase,O
of,O
the,O
notes,O
as,O
a,O
result,O
of,O
a,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
.,O
,O
To,O
the,O
extent,O
that,O
the,O
provisions,O
of,O
any,O
securities,O
laws,O
or,O
regulations,O
conflict,O
with,O
the,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
provisions,O
of,O
the,O
notes,O
",",O
the,O
Company,O
will,O
comply,O
with,O
the,O
applicable,O
securities,O
laws,O
and,O
regulations,O
and,O
will,O
not,O
be,O
deemed,O
to,O
have,O
breached,O
its,O
obligations,O
under,O
the,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
provisions,O
of,O
the,O
notes,O
by,O
virtue,O
of,O
such,O
conflict,O
.,O
,O
On,O
the,O
repurchase,O
date,O
following,O
a,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
",",O
the,O
Company,O
will,O
",",O
to,O
the,O
extent,O
lawful,O
:,O
(,O
1,O
),O
accept,O
for,O
payment,O
all,O
the,O
notes,O
or,O
portions,O
of,O
the,O
notes,O
properly,O
tendered,O
pursuant,O
to,O
the,O
applicable,O
Change,O
of,O
Control,O
Offer,O
;,O
(,O
2,O
),O
deposit,O
with,O
the,O
paying,O
agent,O
an,O
amount,O
equal,O
to,O
the,O
aggregate,O
purchase,O
price,O
in,O
respect,O
of,O
all,O
the,O
notes,O
or,O
portions,O
of,O
the,O
notes,O
properly,O
tendered,O
pursuant,O
to,O
the,O
applicable,O
Change,O
of,O
Control,O
Offer,O
;,O
and,O
(,O
3,O
),O
deliver,O
or,O
cause,O
to,O
be,O
delivered,O
to,O
the,O
trustee,O
the,O
notes,O
properly,O
accepted,O
",",O
together,O
with,O
an,O
officers,O
certificate,O
stating,O
the,O
aggregate,O
principal,O
amount,O
of,O
notes,O
being,O
purchased,O
by,O
the,O
Company,O
.,O
,O
The,O
trustee,O
will,O
promptly,O
mail,O
",",O
or,O
cause,O
the,O
paying,O
agent,O
to,O
promptly,O
mail,O
",",O
to,O
each,O
holder,O
of,O
notes,O
properly,O
tendered,O
",",O
the,O
purchase,O
price,O
for,O
the,O
notes,O
",",O
and,O
the,O
trustee,O
will,O
promptly,O
authenticate,O
and,O
mail,O
(,O
or,O
cause,O
to,O
be,O
transferred,O
by,O
book-entry,O
),O
to,O
each,O
holder,O
a,O
new,O
note,O
equal,O
in,O
principal,O
amount,O
to,O
any,O
unpurchased,O
portion,O
of,O
any,O
notes,O
surrendered,O
.,O
,O
The,O
Company,O
will,O
not,O
be,O
required,O
to,O
make,O
an,O
offer,O
to,O
repurchase,O
the,O
notes,O
upon,O
a,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
if,O
a,O
third,O
party,O
makes,O
such,O
an,O
offer,O
in,O
the,O
manner,O
",",O
at,O
the,O
times,O
and,O
otherwise,O
in,O
compliance,O
with,O
the,O
requirements,O
for,O
an,O
offer,O
made,O
by,O
the,O
Company,O
and,O
such,O
third,O
party,O
purchases,O
all,O
notes,O
properly,O
tendered,O
and,O
not,O
withdrawn,O
under,O
its,O
offer,O
.,O
,O
The,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
feature,O
of,O
the,O
notes,O
may,O
in,O
certain,O
circumstances,O
make,O
more,O
difficult,O
or,O
discourage,O
a,O
sale,O
or,O
takeover,O
of,O
the,O
Company,O
and,O
",",O
thus,O
",",O
the,O
removal,O
of,O
incumbent,O
management,O
.,O
,O
The,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
feature,O
is,O
a,O
result,O
of,O
negotiations,O
between,O
the,O
Company,O
and,O
the,O
underwriters,O
.,O
,O
transactions,O
",",O
including,O
acquisitions,O
",",O
refinancings,O
or,O
other,O
recapitalizations,O
",",O
that,O
would,O
not,O
constitute,O
a,O
Change,O
of,O
Control,O
under,O
the,O
indenture,O
",",O
but,O
that,O
could,O
increase,O
the,O
amount,O
of,O
Indebtedness,O
outstanding,O
at,O
such,O
time,O
or,O
otherwise,O
affect,O
the,O
capital,O
structure,O
of,O
the,O
Company,O
or,O
credit,O
ratings,O
of,O
the,O
notes,O
.,O
,O
Restrictions,O
on,O
the,O
ability,O
of,O
the,O
Company,O
to,O
incur,O
Liens,O
(,O
as,O
defined,O
herein,O
),O
and,O
enter,O
into,O
sale,O
and,O
leaseback,O
transactions,O
are,O
contained,O
in,O
the,O
covenants,O
as,O
described,O
following,O
the,O
captions,O
Covenants,O
Limitation,O
on,O
Liens,O
and,O
Covenants,O
Limitation,O
on,O
Sale,O
and,O
Leaseback,O
Transactions,O
.,O
,O
Except,O
for,O
the,O
limitations,O
contained,O
in,O
such,O
covenants,O
and,O
the,O
covenant,O
relating,O
to,O
repurchases,O
upon,O
the,O
occurrence,O
of,O
a,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
",",O
the,O
indenture,O
will,O
not,O
contain,O
any,O
covenants,O
or,O
provisions,O
that,O
may,O
afford,O
holders,O
of,O
the,O
notes,O
protection,O
in,O
the,O
event,O
of,O
a,O
highly,O
leveraged,O
transaction,O
.,O
,O
The,O
Company,O
may,O
not,O
have,O
sufficient,O
funds,O
to,O
repurchase,O
all,O
the,O
notes,O
upon,O
a,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
.,O
,O
Even,O
if,O
it,O
has,O
sufficient,O
funds,O
",",O
the,O
Company,O
may,O
be,O
prohibited,O
from,O
repurchasing,O
the,O
notes,O
under,O
the,O
terms,O
of,O
its,O
future,O
debt,O
instruments,O
.,O
,O
See,O
Risk,O
Factors,O
Risks,O
Related,O
to,O
the,O
Notes,O
.,O
,O
There,O
is,O
no,O
assurance,O
that,O
we,O
will,O
be,O
able,O
to,O
purchase,O
the,O
Notes,O
upon,O
a,O
change,O
of,O
control,O
.,O
,O
If,O
holders,O
of,O
not,O
less,O
than,O
95,O
%,O
in,O
aggregate,O
principal,O
amount,O
of,O
the,O
outstanding,O
notes,O
validly,O
tender,O
and,O
do,O
not,O
withdraw,O
such,O
notes,O
in,O
a,O
Change,O
of,O
Control,O
Offer,O
and,O
we,O
",",O
or,O
any,O
third,O
party,O
making,O
a,O
Change,O
of,O
Control,O
Offer,O
in,O
lieu,O
of,O
us,O
",",O
as,O
described,O
above,O
",",O
purchases,O
all,O
of,O
the,O
notes,O
validly,O
tendered,O
and,O
not,O
withdrawn,O
by,O
such,O
holders,O
",",O
we,O
will,O
have,O
the,O
right,O
",",O
upon,O
not,O
less,O
than,O
30,O
nor,O
more,O
than,O
60,O
days,O
prior,O
notice,O
",",O
given,O
not,O
more,O
than,O
30,O
days,O
following,O
such,O
purchase,O
pursuant,O
to,O
the,O
Change,O
of,O
Control,O
Offer,O
described,O
above,O
",",O
to,O
redeem,O
all,O
notes,O
that,O
remain,O
outstanding,O
following,O
such,O
purchase,O
at,O
a,O
redemption,O
price,O
in,O
cash,O
equal,O
to,O
101,O
%,O
of,O
the,O
principal,O
amount,O
thereof,O
",",O
plus,O
accrued,O
and,O
unpaid,O
interest,O
",",O
if,O
any,O
",",O
to,O
the,O
date,O
of,O
redemption,O
.,O
,O
For,O
purposes,O
of,O
the,O
foregoing,O
discussion,O
of,O
a,O
repurchase,O
at,O
the,O
option,O
of,O
holders,O
",",O
the,O
following,O
definitions,O
are,O
applicable,O
:,O
Change,O
of,O
Control,O
shall,O
occur,O
if,O
:,O
(,O
1,O
),O
any,O
Person,O
or,O
group,O
(,O
as,O
such,O
terms,O
are,O
used,O
in,O
Sections,O
13,O
(,O
d,O
),O
(,O
3,O
),O
and,O
14,O
(,O
d,O
),O
(,O
2,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
other,O
than,O
Permitted,O
Holders,O
",",O
is,O
or,O
becomes,O
the,O
beneficial,O
owner,O
(,O
as,O
defined,O
in,O
Rules,O
13d-3,O
and,O
13d-5,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
except,O
that,O
for,O
purposes,O
of,O
this,O
clause,O
(,O
1,O
),O
such,O
Person,O
shall,O
be,O
deemed,O
to,O
have,O
beneficial,O
ownership,O
of,O
all,O
shares,O
that,O
any,O
such,O
Person,O
has,O
the,O
right,O
to,O
acquire,O
",",O
whether,O
such,O
right,O
is,O
exercisable,O
immediately,O
or,O
only,O
after,O
the,O
passage,O
of,O
time,O
),O
",",O
directly,O
or,O
indirectly,O
",",O
of,O
more,O
than,O
50,O
%,O
of,O
the,O
total,O
outstanding,O
Voting,O
Stock,O
of,O
the,O
Company,O
;,O
(,O
2,O
),O
during,O
any,O
period,O
of,O
two,O
consecutive,O
years,O
",",O
individuals,O
who,O
at,O
the,O
beginning,O
of,O
such,O
period,O
constituted,O
the,O
board,O
of,O
directors,O
of,O
the,O
Company,O
(,O
together,O
with,O
any,O
new,O
directors,O
whose,O
election,O
to,O
such,O
board,O
or,O
whose,O
nomination,O
for,O
election,O
by,O
the,O
stockholders,O
of,O
the,O
Company,O
was,O
approved,O
by,O
a,O
vote,O
of,O
a,O
majority,O
of,O
the,O
directors,O
then,O
still,O
in,O
office,O
who,O
were,O
either,O
directors,O
at,O
the,O
beginning,O
of,O
such,O
period,O
or,O
whose,O
election,O
or,O
nomination,O
for,O
election,O
was,O
previously,O
so,O
approved,O
),O
cease,O
for,O
any,O
reason,O
to,O
constitute,O
a,O
majority,O
of,O
such,O
board,O
of,O
directors,O
then,O
in,O
office,O
;,O
(,O
3,O
),O
the,O
Company,O
consolidates,O
with,O
or,O
merges,O
with,O
or,O
into,O
any,O
Person,O
(,O
other,O
than,O
a,O
Permitted,O
Holder,O
),O
",",O
or,O
any,O
Person,O
(,O
other,O
than,O
a,O
Permitted,O
Holder,O
),O
consolidates,O
with,O
or,O
merges,O
into,O
or,O
with,O
the,O
Company,O
",",O
in,O
any,O
such,O
event,O
pursuant,O
to,O
a,O
transaction,O
in,O
which,O
the,O
outstanding,O
Voting,O
Stock,O
of,O
the,O
Company,O
is,O
converted,O
into,O
or,O
exchanged,O
for,O
cash,O
",",O
securities,O
or,O
other,O
property,O
",",O
other,O
than,O
any,O
such,O
transaction,O
where,O
the,O
outstanding,O
Voting,O
Stock,O
of,O
the,O
Company,O
is,O
converted,O
into,O
or,O
exchanged,O
for,O
Voting,O
Stock,O
of,O
the,O
surviving,O
Person,O
representing,O
a,O
majority,O
of,O
the,O
voting,O
power,O
of,O
all,O
Voting,O
Stock,O
of,O
such,O
surviving,O
Person,O
immediately,O
after,O
giving,O
effect,O
to,O
such,O
issuance,O
;,O
(,O
4,O
),O
the,O
sale,O
",",O
lease,O
",",O
transfer,O
",",O
conveyance,O
or,O
other,O
disposition,O
(,O
other,O
than,O
by,O
way,O
of,O
merger,O
or,O
consolidation,O
),O
",",O
in,O
one,O
or,O
a,O
series,O
of,O
related,O
transactions,O
",",O
of,O
all,O
or,O
substantially,O
all,O
of,O
the,O
assets,O
of,O
the,O
Company,O
and,O
its,O
Subsidiaries,O
taken,O
as,O
a,O
whole,O
to,O
any,O
Person,O
or,O
group,O
(,O
as,O
such,O
terms,O
are,O
used,O
in,O
Section,O
13,O
(,O
d,O
),O
and,O
14,O
(,O
d,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
other,O
than,O
to,O
the,O
Company,O
",",O
one,O
of,O
the,O
Company,O
s,O
Subsidiaries,O
or,O
a,O
Permitted,O
Holder,O
or,O
(,O
5,O
),O
the,O
Company,O
is,O
liquidated,O
or,O
dissolved,O
or,O
adopts,O
a,O
plan,O
of,O
liquidation,O
or,O
dissolution,O
other,O
than,O
in,O
a,O
transaction,O
which,O
complies,O
with,O
the,O
provisions,O
described,O
under,O
—Merger,I-MISCELLANEOUS
",",I-MISCELLANEOUS
Consolidation,I-MISCELLANEOUS
or,I-MISCELLANEOUS
Sale,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Assets,I-MISCELLANEOUS
.,O
,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
means,O
the,O
occurrence,O
of,O
both,O
a,O
Change,O
of,O
Control,O
and,O
a,O
Ratings,O
Event,O
.,O
,O
Investment,O
Grade,O
means,O
a,O
rating,O
of,O
Baa3,O
or,O
better,O
by,O
Moody,I-BUSINESS
s,I-BUSINESS
(,O
or,O
its,O
equivalent,O
under,O
any,O
successor,O
Rating,O
Categories,O
of,O
Moody,I-BUSINESS
s,I-BUSINESS
),O
",",O
a,O
rating,O
of,O
BBB-,O
or,O
better,O
by,O
S,I-BUSINESS
&,I-BUSINESS
P,I-BUSINESS
(,O
or,O
its,O
equivalent,O
under,O
any,O
successor,O
Rating,O
Categories,O
of,O
S,I-BUSINESS
&,I-BUSINESS
P,I-BUSINESS
),O
and,O
the,O
equivalent,O
Investment,O
Grade,O
credit,O
rating,O
from,O
any,O
additional,O
Rating,O
Agency,O
or,O
Rating,O
Agencies,O
selected,O
by,O
the,O
Company,O
.,O
,O
Moody,I-BUSINESS
s,I-BUSINESS
means,O
Moody,I-BUSINESS
s,I-BUSINESS
Investors,I-BUSINESS
Service,I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
subsidiary,O
of,O
Moody,I-BUSINESS
s,I-BUSINESS
Corporation,I-BUSINESS
",",O
and,O
its,O
successors,O
.,O
,O
Rating,O
Agency,O
means,O
(,O
1,O
),O
each,O
of,O
Moody,I-BUSINESS
s,I-BUSINESS
and,O
S,I-BUSINESS
&,I-BUSINESS
P,I-BUSINESS
and,O
(,O
2,O
),O
if,O
either,O
of,O
Moody,I-BUSINESS
s,I-BUSINESS
or,O
S,I-BUSINESS
&,I-BUSINESS
P,I-BUSINESS
ceases,O
to,O
rate,O
the,O
notes,O
or,O
fails,O
to,O
make,O
a,O
rating,O
of,O
the,O
notes,O
publicly,O
available,O
for,O
reasons,O
outside,O
of,O
the,O
control,O
of,O
the,O
Company,O
",",O
a,O
nationally,O
recognized,O
statistical,O
rating,O
organization,O
within,O
the,O
meaning,O
of,O
Rule,O
15c3-1,O
(,O
c,O
),O
(,O
2,O
),O
(,O
vi,O
),O
(,O
F,O
),O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
selected,O
by,O
the,O
Company,O
as,O
a,O
replacement,O
agency,O
for,O
Moody,I-BUSINESS
s,I-BUSINESS
or,O
S,I-BUSINESS
&,I-BUSINESS
P,I-BUSINESS
",",O
or,O
both,O
",",O
as,O
the,O
ease,O
may,O
be,O
.,O
,O
Rating,O
Date,O
means,O
the,O
date,O
that,O
is,O
60,O
days,O
prior,O
to,O
the,O
earlier,O
of,O
(,O
i,O
),O
a,O
Change,O
of,O
Control,O
or,O
(,O
ii,O
),O
public,O
notice,O
of,O
the,O
occurrence,O
of,O
a,O
Change,O
of,O
Control,O
or,O
of,O
the,O
intention,O
by,O
the,O
Company,O
to,O
affect,O
a,O
Change,O
of,O
Control,O
.,O
,O
Ratings,O
Event,O
means,O
the,O
occurrence,O
of,O
the,O
events,O
described,O
in,O
(,O
a,O
),O
or,O
(,O
b,O
),O
of,O
this,O
definition,O
on,O
",",O
or,O
within,O
60,O
days,O
after,O
the,O
earlier,O
of,O
",",O
(,O
i,O
),O
the,O
occurrence,O
of,O
a,O
Change,O
of,O
Control,O
or,O
(,O
ii,O
),O
public,O
notice,O
of,O
the,O
occurrence,O
of,O
a,O
Change,O
of,O
Control,O
or,O
the,O
intention,O
by,O
the,O
Company,O
to,O
effect,O
a,O
Change,O
of,O
Control,O
(,O
which,O
period,O
shall,O
be,O
extended,O
so,O
long,O
as,O
the,O
rating,O
of,O
the,O
notes,O
is,O
under,O
publicly,O
announced,O
consideration,O
for,O
a,O
possible,O
downgrade,O
by,O
any,O
of,O
the,O
Rating,O
Agencies,O
),O
:,O
(,O
a,O
),O
if,O
the,O
notes,O
are,O
rated,O
by,O
one,O
or,O
both,O
Rating,O
Agencies,O
on,O
the,O
Rating,O
Date,O
as,O
Investment,O
Grade,O
",",O
the,O
rating,O
of,O
the,O
notes,O
shall,O
be,O
reduced,O
so,O
that,O
the,O
notes,O
are,O
rated,O
below,O
Investment,O
Grade,O
by,O
both,O
Rating,O
Agencies,O
or,O
(,O
b,O
),O
if,O
the,O
notes,O
are,O
rated,O
below,O
Investment,O
Grade,O
by,O
both,O
Rating,O
Agencies,O
on,O
the,O
Rating,O
Date,O
",",O
the,O
rating,O
of,O
the,O
notes,O
shall,O
remain,O
rated,O
below,O
Investment,O
Grade,O
by,O
both,O
Rating,O
Agencies,O
.,O
,O
S,I-BUSINESS
&,I-BUSINESS
P,I-BUSINESS
means,O
Standard,I-BUSINESS
&,I-BUSINESS
Poor,I-BUSINESS
s,I-BUSINESS
",",O
a,O
division,O
of,O
The,I-BUSINESS
McGraw-Hill,I-BUSINESS
Companies,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
and,O
its,O
successors,O
.,O
,O
Voting,O
Stock,O
of,O
any,O
specified,O
person,O
(,O
as,O
that,O
term,O
is,O
used,O
in,O
Section,O
13,O
(,O
d,O
),O
(,O
3,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
as,O
of,O
any,O
date,O
means,O
the,O
capital,O
stock,O
of,O
such,O
person,O
that,O
is,O
at,O
the,O
time,O
entitled,O
to,O
vote,O
generally,O
in,O
the,O
election,O
of,O
the,O
board,O
of,O
directors,O
of,O
such,O
person,O
.,O
,O
Covenants,O
Except,O
as,O
described,O
in,O
Limitation,O
on,O
Liens,O
and,O
Limitation,O
on,O
Sale,O
and,O
Leaseback,O
Transactions,O
",",O
neither,O
the,O
Company,O
nor,O
any,O
of,O
its,O
subsidiaries,O
will,O
be,O
restricted,O
by,O
the,O
indenture,O
from,O
:,O
,O
In,O
addition,O
",",O
the,O
Company,O
will,O
not,O
be,O
required,O
to,O
maintain,O
any,O
financial,O
ratios,O
or,O
specified,O
levels,O
of,O
net,O
worth,O
or,O
liquidity,O
or,O
to,O
repurchase,O
or,O
redeem,O
or,O
otherwise,O
modify,O
the,O
terms,O
of,O
any,O
of,O
the,O
notes,O
upon,O
a,O
change,O
of,O
control,O
or,O
other,O
events,O
involving,O
us,O
or,O
any,O
of,O
our,O
subsidiaries,O
which,O
may,O
adversely,O
affect,O
the,O
creditworthiness,O
of,O
the,O
notes,O
",",O
except,O
to,O
the,O
limited,O
extent,O
described,O
following,O
the,O
caption,O
—Change,O
of,O
Control,O
Offer,O
.,O
,O
the,O
event,O
of,O
a,O
highly,O
leveraged,O
or,O
other,O
transaction,O
involving,O
the,O
Company,O
that,O
may,O
adversely,O
affect,O
holders,O
of,O
the,O
notes,O
",",O
except,O
to,O
the,O
limited,O
extent,O
described,O
following,O
the,O
caption,O
—Change,O
of,O
Control,O
Offer,O
.,O
,O
The,O
indenture,O
contains,O
the,O
following,O
principal,O
covenants,O
:,O
Limitation,O
on,O
Liens,O
The,O
Company,O
will,O
not,O
",",O
and,O
will,O
not,O
permit,O
any,O
of,O
its,O
Domestic,O
Subsidiaries,O
to,O
",",O
create,O
",",O
incur,O
",",O
assume,O
or,O
permit,O
to,O
exist,O
any,O
Lien,O
on,O
(,O
a,O
),O
any,O
Principal,O
Property,O
or,O
(,O
b,O
),O
the,O
Capital,O
Stock,O
of,O
any,O
Subsidiary,O
",",O
in,O
each,O
case,O
to,O
secure,O
Indebtedness,O
of,O
the,O
Company,O
",",O
any,O
Subsidiary,O
of,O
the,O
Company,O
or,O
any,O
other,O
Person,O
",",O
unless,O
prior,O
to,O
or,O
at,O
the,O
same,O
time,O
",",O
the,O
notes,O
(,O
together,O
with,O
",",O
at,O
the,O
option,O
of,O
the,O
Company,O
",",O
any,O
other,O
Indebtedness,O
of,O
the,O
Company,O
or,O
any,O
Subsidiary,O
ranking,O
equally,O
in,O
right,O
of,O
payment,O
with,O
the,O
notes,O
),O
are,O
equally,O
and,O
ratably,O
secured,O
with,O
or,O
",",O
at,O
the,O
option,O
of,O
the,O
Company,O
",",O
prior,O
to,O
",",O
such,O
Indebtedness,O
.,O
,O
Any,O
Lien,O
created,O
for,O
the,O
benefit,O
of,O
the,O
holders,O
of,O
the,O
notes,O
pursuant,O
to,O
the,O
preceding,O
sentence,O
shall,O
provide,O
by,O
its,O
terms,O
that,O
such,O
Lien,O
shall,O
be,O
automatically,O
and,O
unconditionally,O
released,O
and,O
discharged,O
upon,O
the,O
release,O
and,O
discharge,O
of,O
such,O
Lien,O
that,O
gave,O
rise,O
to,O
the,O
obligation,O
to,O
secure,O
the,O
notes,O
under,O
this,O
covenant,O
.,O
,O
The,O
foregoing,O
restriction,O
does,O
not,O
apply,O
",",O
with,O
respect,O
to,O
any,O
Person,O
",",O
to,O
any,O
of,O
the,O
following,O
:,O
(,O
1,O
),O
any,O
Lien,O
existing,O
as,O
of,O
the,O
Issue,O
Date,O
;,O
(,O
2,O
),O
any,O
Lien,O
arising,O
by,O
reason,O
of,O
:,O
(,O
a,O
),O
any,O
judgment,O
",",O
decree,O
or,O
order,O
of,O
any,O
court,O
",",O
so,O
long,O
as,O
such,O
Lien,O
is,O
adequately,O
bonded,O
or,O
with,O
respect,O
to,O
which,O
adequate,O
reserves,O
or,O
other,O
appropriate,O
provisions,O
are,O
being,O
maintained,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
and,O
any,O
appropriate,O
legal,O
proceedings,O
which,O
may,O
have,O
been,O
duly,O
initiated,O
for,O
the,O
review,O
of,O
such,O
judgment,O
",",O
decree,O
or,O
order,O
shall,O
not,O
have,O
been,O
finally,O
terminated,O
or,O
the,O
period,O
within,O
which,O
such,O
proceedings,O
may,O
be,O
initiated,O
shall,O
not,O
have,O
expired,O
;,O
(,O
b,O
),O
taxes,O
",",O
governmental,O
assessments,O
or,O
similar,O
governmental,O
charges,O
or,O
levies,O
not,O
yet,O
delinquent,O
or,O
which,O
are,O
being,O
contested,O
in,O
good,O
faith,O
;,O
(,O
c,O
),O
security,O
for,O
payment,O
of,O
workers,O
compensation,O
",",O
unemployment,O
insurance,O
and,O
other,O
governmental,O
insurance,O
or,O
benefits,O
and/or,O
other,O
insurance,O
arrangements,O
(,O
including,O
",",O
without,O
limitation,O
",",O
pledges,O
or,O
deposits,O
securing,O
liability,O
under,O
self,O
insurance,O
general,O
liability,O
insurance,O
programs,O
),O
;,O
(,O
d,O
),O
good,O
faith,O
deposits,O
in,O
connection,O
with,O
bids,O
",",O
tenders,O
",",O
statutory,O
obligations,O
",",O
leases,O
",",O
contracts,O
(,O
other,O
than,O
contracts,O
for,O
the,O
payment,O
of,O
money,O
),O
;,O
(,O
e,O
),O
zoning,O
and,O
other,O
restrictions,O
",",O
charges,O
or,O
encumbrances,O
(,O
whether,O
or,O
not,O
recorded,O
),O
",",O
easements,O
(,O
including,O
",",O
without,O
limitation,O
",",O
reciprocal,O
easement,O
agreements,O
and,O
utility,O
agreements,O
),O
licenses,O
",",O
reservations,O
",",O
title,O
defects,O
",",O
rights,O
of,O
others,O
for,O
rights,O
of,O
way,O
",",O
utilities,O
",",O
sewers,O
",",O
electric,O
lines,O
",",O
telephone,O
or,O
telegraph,O
lines,O
",",O
and,O
other,O
similar,O
purposes,O
",",O
provisions,O
",",O
covenants,O
",",O
consents,O
",",O
conditions,O
",",O
waivers,O
",",O
variations,O
",",O
encroachments,O
",",O
restrictions,O
on,O
the,O
use,O
of,O
property,O
or,O
minor,O
irregularities,O
of,O
title,O
(,O
and,O
with,O
respect,O
to,O
leasehold,O
interests,O
",",O
mortgages,O
",",O
obligations,O
",",O
liens,O
and,O
other,O
encumbrances,O
incurred,O
",",O
created,O
assumed,O
or,O
permitted,O
to,O
exist,O
and,O
arising,O
by,O
",",O
through,O
or,O
under,O
a,O
landlord,O
or,O
owner,O
of,O
the,O
leased,O
property,O
",",O
with,O
or,O
without,O
consent,O
of,O
the,O
lessee,O
),O
",",O
none,O
of,O
which,O
materially,O
impairs,O
the,O
use,O
of,O
any,O
parcel,O
of,O
property,O
material,O
to,O
the,O
operation,O
of,O
the,O
business,O
of,O
the,O
Company,O
or,O
any,O
Subsidiary,O
or,O
the,O
value,O
of,O
such,O
property,O
for,O
the,O
purpose,O
of,O
such,O
business,O
;,O
,O
(,O
f,O
),O
deposits,O
to,O
secure,O
public,O
",",O
statutory,O
or,O
similar,O
obligations,O
",",O
or,O
in,O
lieu,O
of,O
surety,O
or,O
appeal,O
bonds,O
or,O
Liens,O
incurred,O
or,O
deposits,O
made,O
as,O
a,O
result,O
of,O
progress,O
payments,O
under,O
government,O
contracts,O
;,O
(,O
g,O
),O
Liens,O
incurred,O
or,O
deposits,O
made,O
in,O
connection,O
with,O
letters,O
of,O
credit,O
issued,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
;,O
or,O
(,O
h,O
),O
operation,O
of,O
law,O
in,O
favor,O
of,O
mechanics,O
",",O
carriers,O
",",O
warehousemen,O
",",O
landlords,O
",",O
materialmen,O
",",O
laborers,O
",",O
employees,O
",",O
suppliers,O
or,O
other,O
similar,O
Persons,O
",",O
incurred,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
for,O
sums,O
which,O
are,O
not,O
yet,O
delinquent,O
or,O
are,O
being,O
contested,O
in,O
good,O
faith,O
by,O
negotiations,O
or,O
by,O
appropriate,O
proceedings,O
which,O
suspend,O
the,O
collection,O
thereof,O
;,O
(,O
3,O
),O
any,O
Lien,O
to,O
secure,O
the,O
performance,O
bids,O
",",O
trade,O
contracts,O
",",O
leases,O
(,O
including,O
",",O
without,O
limitation,O
",",O
statutory,O
and,O
common,O
law,O
landlord,O
s,O
liens,O
),O
",",O
statutory,O
obligations,O
",",O
surety,O
and,O
appeal,O
bonds,O
",",O
letters,O
of,O
credit,O
and,O
other,O
obligations,O
of,O
a,O
like,O
nature,O
and,O
incurred,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
of,O
the,O
Company,O
or,O
any,O
Subsidiary,O
;,O
(,O
4,O
),O
Liens,O
securing,O
Indebtedness,O
incurred,O
to,O
finance,O
the,O
construction,O
",",O
purchase,O
or,O
lease,O
of,O
",",O
or,O
repairs,O
",",O
improvements,O
or,O
additions,O
to,O
",",O
property,O
",",O
plant,O
or,O
equipment,O
of,O
such,O
Person,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
Lien,O
may,O
not,O
extend,O
to,O
any,O
other,O
property,O
owned,O
by,O
such,O
Person,O
at,O
the,O
time,O
the,O
Lien,O
is,O
Incurred,O
(,O
other,O
than,O
assets,O
and,O
property,O
affixed,O
or,O
appurtenant,O
thereto,O
),O
",",O
and,O
the,O
Indebtedness,O
(,O
other,O
than,O
any,O
interest,O
thereon,O
),O
secured,O
by,O
the,O
Lien,O
may,O
not,O
be,O
incurred,O
more,O
than,O
180,O
days,O
after,O
the,O
later,O
of,O
the,O
acquisition,O
",",O
completion,O
of,O
construction,O
",",O
repair,O
",",O
improvement,O
",",O
addition,O
or,O
commencement,O
of,O
full,O
operation,O
of,O
the,O
property,O
subject,O
to,O
the,O
Lien,O
;,O
(,O
5,O
),O
Liens,O
on,O
property,O
or,O
shares,O
of,O
capital,O
stock,O
of,O
another,O
Person,O
at,O
the,O
time,O
such,O
other,O
Person,O
becomes,O
a,O
subsidiary,O
of,O
such,O
Person,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
Liens,O
may,O
not,O
extend,O
to,O
any,O
other,O
property,O
owned,O
by,O
such,O
Person,O
(,O
other,O
than,O
assets,O
and,O
property,O
affixed,O
or,O
appurtenant,O
thereto,O
),O
;,O
(,O
6,O
),O
Liens,O
on,O
property,O
at,O
the,O
time,O
such,O
Person,O
or,O
any,O
of,O
its,O
subsidiaries,O
acquires,O
the,O
property,O
",",O
including,O
any,O
acquisition,O
by,O
means,O
of,O
a,O
merger,O
or,O
consolidation,O
with,O
or,O
into,O
such,O
Person,O
or,O
a,O
subsidiary,O
of,O
such,O
Person,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
Liens,O
may,O
not,O
extend,O
to,O
any,O
other,O
property,O
owned,O
by,O
such,O
Person,O
(,O
other,O
than,O
assets,O
and,O
property,O
affixed,O
or,O
appurtenant,O
thereto,O
),O
;,O
(,O
7,O
),O
Liens,O
in,O
favor,O
of,O
the,O
Company,O
or,O
any,O
of,O
its,O
Subsidiaries,O
;,O
(,O
8,O
),O
any,O
Lien,O
securing,O
any,O
Vehicle,O
Inventory,O
Indebtedness,O
and/or,O
Vehicle,O
Receivables,O
Indebtedness,O
;,O
(,O
9,O
),O
Liens,O
securing,O
Indebtedness,O
under,O
Mortgage,O
Facilities,O
in,O
an,O
aggregate,O
principal,O
amount,O
not,O
to,O
exceed,O
$,O
500.0,O
million,O
incurred,O
and,O
outstanding,O
after,O
the,O
Issue,O
Date,O
;,O
(,O
10,O
),O
Liens,O
securing,O
Indebtedness,O
under,O
Debt,O
Facilities,O
in,O
an,O
aggregate,O
principal,O
amount,O
not,O
to,O
exceed,O
$,O
"1,300.0",O
million,O
at,O
any,O
one,O
time,O
outstanding,O
;,O
(,O
11,O
),O
Liens,O
securing,O
Indebtedness,O
under,O
Interest,O
Rate,O
Agreements,O
",",O
Currency,O
Agreements,O
or,O
Commodity,O
Price,O
Protection,O
Agreements,O
or,O
otherwise,O
incurred,O
to,O
hedge,O
interest,O
rate,O
risk,O
or,O
currency,O
or,O
commodity,O
pricing,O
risk,O
;,O
(,O
12,O
),O
Liens,O
to,O
secure,O
any,O
refinancing,O
(,O
or,O
successive,O
refinancings,O
),O
as,O
a,O
whole,O
",",O
or,O
in,O
part,O
",",O
of,O
any,O
Indebtedness,O
secured,O
by,O
any,O
Lien,O
referred,O
to,O
in,O
the,O
foregoing,O
clauses,O
(,O
1,O
),O
",",O
(,O
4,O
),O
",",O
(,O
5,O
),O
",",O
(,O
6,O
),O
or,O
(,O
11,O
),O
;,O
provided,O
",",O
however,O
",",O
that,O
:,O
(,O
a,O
),O
such,O
new,O
Lien,O
shall,O
be,O
limited,O
to,O
all,O
or,O
part,O
of,O
the,O
same,O
property,O
and,O
assets,O
that,O
secured,O
or,O
",",O
under,O
the,O
written,O
agreements,O
pursuant,O
to,O
which,O
the,O
original,O
Lien,O
arose,O
",",O
could,O
secure,O
the,O
original,O
Lien,O
(,O
plus,O
improvements,O
and,O
accessions,O
to,O
",",O
such,O
property,O
or,O
proceeds,O
or,O
distributions,O
thereof,O
),O
;,O
and,O
(,O
b,O
),O
the,O
Indebtedness,O
secured,O
by,O
such,O
Lien,O
at,O
such,O
time,O
is,O
not,O
increased,O
to,O
any,O
amount,O
greater,O
than,O
the,O
sum,O
of,O
(,O
x,O
),O
the,O
outstanding,O
principal,O
amount,O
or,O
",",O
,O
if,O
greater,O
",",O
committed,O
amount,O
of,O
the,O
Indebtedness,O
described,O
in,O
clauses,O
(,O
1,O
),O
",",O
(,O
4,O
),O
",",O
(,O
5,O
),O
",",O
(,O
6,O
),O
or,O
(,O
11,O
),O
at,O
the,O
time,O
the,O
original,O
Lien,O
became,O
a,O
Lien,O
permitted,O
under,O
the,O
indenture,O
and,O
(,O
y,O
),O
an,O
amount,O
necessary,O
to,O
pay,O
any,O
fees,O
and,O
expenses,O
",",O
including,O
premiums,O
",",O
related,O
to,O
such,O
refinancing,O
",",O
refunding,O
",",O
extension,O
",",O
renewal,O
or,O
replacement,O
;,O
and,O
(,O
13,O
),O
Liens,O
on,O
assets,O
subject,O
to,O
a,O
Sale,O
and,O
Leaseback,O
Transaction,O
securing,O
Attributable,O
Debt,O
permitted,O
to,O
be,O
incurred,O
as,O
described,O
following,O
the,O
caption,O
Covenants,O
Limitation,O
on,O
Sale,O
and,O
Leaseback,O
Transactions,O
.,O
,O
Notwithstanding,O
the,O
foregoing,O
restrictions,O
",",O
the,O
Company,O
and,O
its,O
Subsidiaries,O
will,O
be,O
permitted,O
to,O
incur,O
Indebtedness,O
secured,O
by,O
a,O
Lien,O
which,O
would,O
otherwise,O
be,O
subject,O
to,O
the,O
foregoing,O
restrictions,O
without,O
equally,O
and,O
ratably,O
securing,O
the,O
notes,O
",",O
if,O
any,O
",",O
provided,O
that,O
",",O
after,O
giving,O
effect,O
to,O
such,O
Indebtedness,O
",",O
the,O
aggregate,O
amount,O
of,O
all,O
Indebtedness,O
secured,O
by,O
Liens,O
(,O
not,O
including,O
Liens,O
permitted,O
under,O
clauses,O
(,O
1,O
),O
through,O
(,O
13,O
),O
above,O
),O
",",O
together,O
with,O
all,O
attributable,O
debt,O
outstanding,O
pursuant,O
to,O
the,O
second,O
paragraph,O
of,O
the,O
—Limitation,O
on,O
Sale,O
and,O
Leaseback,O
Transactions,O
covenant,O
",",O
does,O
not,O
exceed,O
15,O
%,O
of,O
the,O
Consolidated,O
Net,O
Tangible,O
Assets,O
of,O
the,O
Company,O
calculated,O
as,O
of,O
the,O
date,O
of,O
the,O
creation,O
or,O
incurrence,O
of,O
the,O
Lien,O
.,O
,O
The,O
Company,O
and,O
its,O
Subsidiaries,O
also,O
may,O
",",O
without,O
equally,O
and,O
ratably,O
securing,O
the,O
notes,O
",",O
create,O
or,O
incur,O
Liens,O
that,O
extend,O
",",O
renew,O
",",O
substitute,O
or,O
replace,O
(,O
including,O
successive,O
extensions,O
",",O
renewals,O
",",O
substitutions,O
or,O
replacements,O
),O
",",O
in,O
whole,O
or,O
in,O
part,O
",",O
any,O
Lien,O
permitted,O
pursuant,O
to,O
the,O
preceding,O
sentence,O
.,O
,O
Limitation,O
on,O
Sale,O
and,O
Leaseback,O
Transactions,O
The,O
Company,O
will,O
not,O
",",O
and,O
will,O
not,O
permit,O
any,O
of,O
its,O
Domestic,O
Subsidiaries,O
to,O
",",O
directly,O
or,O
indirectly,O
",",O
enter,O
into,O
any,O
arrangement,O
with,O
any,O
other,O
Person,O
pursuant,O
to,O
which,O
the,O
Company,O
or,O
any,O
of,O
its,O
Domestic,O
Subsidiaries,O
leases,O
any,O
Principal,O
Property,O
that,O
has,O
been,O
or,O
is,O
to,O
be,O
sold,O
or,O
transferred,O
by,O
the,O
Company,O
or,O
any,O
Domestic,O
Subsidiary,O
to,O
such,O
other,O
Person,O
with,O
the,O
intention,O
of,O
taking,O
back,O
a,O
lease,O
(,O
a,O
Sale,O
and,O
Leaseback,O
Transaction,O
),O
",",O
whether,O
now,O
owned,O
or,O
hereafter,O
acquired,O
",",O
unless,O
:,O
(,O
1,O
),O
such,O
transaction,O
with,O
respect,O
to,O
a,O
Principal,O
Property,O
if,O
a,O
binding,O
commitment,O
with,O
respect,O
thereto,O
is,O
entered,O
into,O
within,O
one,O
year,O
after,O
the,O
later,O
of,O
(,O
i,O
),O
the,O
date,O
of,O
issuance,O
of,O
the,O
first,O
series,O
of,O
debt,O
securities,O
under,O
the,O
indenture,O
or,O
(,O
ii,O
),O
the,O
date,O
such,O
Principal,O
Property,O
was,O
acquired,O
;,O
(,O
2,O
),O
the,O
Sale,O
and,O
Leaseback,O
Transaction,O
is,O
solely,O
with,O
the,O
Company,O
or,O
any,O
of,O
its,O
Domestic,O
Subsidiaries,O
;,O
(,O
3,O
),O
the,O
lease,O
is,O
for,O
a,O
period,O
not,O
in,O
excess,O
of,O
36,O
months,O
",",O
including,O
renewals,O
;,O
(,O
4,O
),O
the,O
Company,O
would,O
(,O
at,O
the,O
time,O
of,O
entering,O
into,O
such,O
arrangement,O
),O
be,O
entitled,O
to,O
incur,O
Indebtedness,O
secured,O
by,O
a,O
Lien,O
with,O
respect,O
to,O
such,O
Sale,O
and,O
Leaseback,O
Transaction,O
",",O
without,O
equally,O
and,O
ratably,O
securing,O
the,O
notes,O
then,O
outstanding,O
under,O
the,O
indenture,O
",",O
pursuant,O
to,O
the,O
last,O
paragraph,O
of,O
the,O
—Limitation,O
on,O
Liens,O
covenant,O
described,O
above,O
;,O
or,O
(,O
5,O
),O
leases,O
where,O
the,O
proceeds,O
from,O
the,O
sale,O
of,O
the,O
subject,O
property,O
are,O
at,O
least,O
equal,O
to,O
the,O
fair,O
market,O
value,O
(,O
as,O
determined,O
in,O
good,O
faith,O
by,O
the,O
Company,O
),O
of,O
the,O
subject,O
Principal,O
Property,O
and,O
the,O
Company,O
applies,O
an,O
amount,O
equal,O
to,O
the,O
net,O
proceeds,O
from,O
the,O
sale,O
of,O
such,O
Principal,O
Property,O
to,O
the,O
purchase,O
of,O
other,O
property,O
or,O
assets,O
used,O
or,O
useful,O
in,O
its,O
business,O
or,O
to,O
the,O
retirement,O
of,O
long-term,O
Indebtedness,O
within,O
365,O
days,O
of,O
the,O
effective,O
date,O
of,O
any,O
such,O
Sale,O
and,O
Leaseback,O
Transaction,O
;,O
provided,O
that,O
",",O
in,O
lieu,O
of,O
applying,O
such,O
amount,O
to,O
the,O
retirement,O
of,O
long-term,O
Indebtedness,O
",",O
the,O
Company,O
may,O
deliver,O
notes,O
to,O
the,O
trustee,O
for,O
cancellation,O
.,O
,O
Notwithstanding,O
the,O
restrictions,O
set,O
forth,O
in,O
the,O
preceding,O
paragraph,O
",",O
the,O
Company,O
and,O
its,O
Subsidiaries,O
may,O
enter,O
into,O
any,O
Sale,O
and,O
Leaseback,O
Transaction,O
which,O
would,O
otherwise,O
be,O
subject,O
to,O
the,O
foregoing,O
restrictions,O
",",O
if,O
after,O
giving,O
effect,O
thereto,O
the,O
aggregate,O
amount,O
of,O
all,O
Attributable,O
Debt,O
with,O
respect,O
to,O
such,O
transactions,O
",",O
together,O
with,O
all,O
Indebtedness,O
outstanding,O
pursuant,O
to,O
the,O
last,O
paragraph,O
of,O
the,O
—Limitation,O
on,O
Liens,O
covenant,O
described,O
above,O
",",O
does,O
not,O
exceed,O
15,O
%,O
of,O
the,O
Consolidated,O
Net,O
Tangible,O
Assets,O
of,O
the,O
Company,O
calculated,O
as,O
of,O
the,O
closing,O
date,O
of,O
the,O
Sale,O
and,O
Leaseback,O
Transaction,O
.,O
,O
Limitation,O
on,O
Issuances,O
of,O
Guarantees,O
of,O
Indebtedness,O
The,O
Company,O
will,O
not,O
cause,O
or,O
permit,O
any,O
Domestic,O
Subsidiary,O
(,O
which,O
is,O
not,O
a,O
Guarantor,O
),O
",",O
directly,O
or,O
indirectly,O
",",O
to,O
guarantee,O
",",O
assume,O
or,O
in,O
any,O
other,O
manner,O
become,O
liable,O
with,O
respect,O
to,O
any,O
Indebtedness,O
of,O
the,O
Company,O
or,O
any,O
Domestic,O
Subsidiary,O
unless,O
such,O
Domestic,O
Subsidiary,O
simultaneously,O
executes,O
and,O
delivers,O
a,O
supplemental,O
indenture,O
to,O
the,O
indenture,O
providing,O
for,O
a,O
Subsidiary,O
Guarantee,O
of,O
the,O
notes,O
on,O
the,O
same,O
terms,O
as,O
the,O
guarantee,O
of,O
such,O
Indebtedness,O
except,O
that,O
(,O
A,O
),O
such,O
guarantee,O
need,O
not,O
be,O
secured,O
unless,O
required,O
pursuant,O
to,O
—Limitation,O
on,O
Liens,O
and,O
(,O
B,O
),O
if,O
such,O
Indebtedness,O
is,O
by,O
its,O
terms,O
expressly,O
subordinated,O
to,O
the,O
notes,O
",",O
any,O
such,O
assumption,O
",",O
guarantee,O
or,O
other,O
liability,O
of,O
such,O
Domestic,O
Subsidiary,O
with,O
respect,O
to,O
such,O
Indebtedness,O
shall,O
be,O
subordinated,O
to,O
such,O
Domestic,O
Subsidiary,O
s,O
Subsidiary,O
Guarantee,O
of,O
the,O
notes,O
at,O
least,O
to,O
the,O
same,O
extent,O
as,O
such,O
Indebtedness,O
is,O
subordinated,O
to,O
the,O
notes,O
.,O
,O
The,O
preceding,O
paragraph,O
will,O
not,O
be,O
applicable,O
to,O
any,O
Guarantees,O
of,O
any,O
Domestic,O
Subsidiary,O
given,O
to,O
a,O
bank,O
or,O
trust,O
company,O
or,O
any,O
commercial,O
banking,O
institution,O
that,O
is,O
a,O
member,O
of,O
the,O
U.S.,I-GOVERNMENT
Federal,I-GOVERNMENT
Reserve,I-GOVERNMENT
System,I-GOVERNMENT
(,O
or,O
any,O
branch,O
",",O
Subsidiary,O
or,O
Affiliate,O
thereof,O
),O
",",O
in,O
connection,O
with,O
the,O
operation,O
of,O
cash,O
management,O
programs,O
established,O
for,O
its,O
benefit,O
or,O
that,O
of,O
any,O
other,O
Domestic,O
Subsidiary,O
.,O
,O
Notwithstanding,O
the,O
foregoing,O
",",O
any,O
Subsidiary,O
Guarantee,O
by,O
a,O
Domestic,O
Subsidiary,O
of,O
the,O
notes,O
shall,O
provide,O
by,O
its,O
terms,O
that,O
it,O
(,O
and,O
all,O
Liens,O
securing,O
the,O
same,O
),O
shall,O
be,O
automatically,O
and,O
unconditionally,O
released,O
and,O
discharged,O
upon,O
(,O
i,O
),O
any,O
sale,O
",",O
exchange,O
or,O
transfer,O
",",O
to,O
any,O
Person,O
not,O
an,O
Affiliate,O
of,O
the,O
Company,O
",",O
of,O
all,O
of,O
the,O
Company,O
s,O
Capital,O
Stock,O
in,O
",",O
or,O
all,O
or,O
substantially,O
all,O
the,O
assets,O
of,O
",",O
such,O
Domestic,O
Subsidiary,O
",",O
which,O
transaction,O
is,O
in,O
compliance,O
with,O
the,O
terms,O
of,O
the,O
indenture,O
and,O
such,O
Domestic,O
Subsidiary,O
is,O
released,O
from,O
all,O
guarantees,O
",",O
if,O
any,O
",",O
by,O
it,O
of,O
other,O
Indebtedness,O
of,O
the,O
Company,O
or,O
any,O
Domestic,O
Subsidiary,O
",",O
and,O
(,O
ii,O
),O
with,O
respect,O
to,O
any,O
Subsidiary,O
Guarantees,O
created,O
after,O
the,O
Issue,O
Date,O
",",O
the,O
release,O
by,O
the,O
holders,O
of,O
the,O
Indebtedness,O
of,O
the,O
Company,O
described,O
in,O
the,O
preceding,O
paragraph,O
above,O
of,O
their,O
guarantee,O
by,O
such,O
Domestic,O
Subsidiary,O
(,O
including,O
any,O
deemed,O
release,O
upon,O
payment,O
in,O
full,O
of,O
all,O
obligations,O
under,O
such,O
Indebtedness,O
),O
",",O
at,O
such,O
time,O
as,O
(,O
A,O
),O
no,O
other,O
Indebtedness,O
of,O
the,O
Company,O
has,O
been,O
guaranteed,O
by,O
such,O
Domestic,O
Subsidiary,O
or,O
(,O
B,O
),O
the,O
holders,O
of,O
all,O
such,O
other,O
Indebtedness,O
which,O
is,O
guaranteed,O
by,O
such,O
Domestic,O
Subsidiary,O
also,O
release,O
their,O
guarantee,O
by,O
such,O
Domestic,O
Subsidiary,O
(,O
including,O
any,O
deemed,O
release,O
upon,O
payment,O
in,O
full,O
of,O
all,O
obligations,O
under,O
such,O
Indebtedness,O
),O
.,O
,O
and,O
an,O
opinion,O
of,O
counsel,O
",",O
each,O
to,O
the,O
effect,O
that,O
such,O
consolidation,O
",",O
merger,O
",",O
sale,O
",",O
assignment,O
",",O
transfer,O
",",O
lease,O
or,O
conveyance,O
or,O
other,O
transaction,O
and,O
the,O
supplemental,O
indenture,O
in,O
respect,O
thereof,O
comply,O
with,O
the,O
indenture,O
and,O
that,O
all,O
conditions,O
precedent,O
therein,O
provided,O
for,O
relating,O
to,O
such,O
transaction,O
have,O
been,O
complied,O
with,O
;,O
and,O
(,O
5,O
),O
at,O
the,O
time,O
of,O
the,O
transaction,O
each,O
Guarantor,O
",",O
unless,O
it,O
is,O
the,O
other,O
party,O
to,O
the,O
transactions,O
described,O
above,O
",",O
will,O
have,O
by,O
supplemental,O
indenture,O
confirmed,O
that,O
its,O
Subsidiary,O
Guarantee,O
shall,O
apply,O
to,O
such,O
Person,O
s,O
obligations,O
under,O
the,O
indenture,O
and,O
the,O
notes,O
.,O
,O
In,O
the,O
event,O
of,O
any,O
transaction,O
(,O
other,O
than,O
a,O
lease,O
),O
described,O
in,O
and,O
complying,O
with,O
the,O
conditions,O
listed,O
in,O
the,O
immediately,O
preceding,O
paragraph,O
in,O
which,O
the,O
Company,O
is,O
not,O
the,O
continuing,O
corporation,O
",",O
the,O
successor,O
Person,O
formed,O
or,O
remaining,O
or,O
to,O
which,O
such,O
transfer,O
is,O
made,O
shall,O
succeed,O
to,O
",",O
and,O
be,O
substituted,O
for,O
",",O
and,O
may,O
exercise,O
every,O
right,O
and,O
power,O
of,O
",",O
the,O
Company,O
and,O
the,O
Company,O
will,O
be,O
discharged,O
from,O
all,O
obligations,O
and,O
covenants,O
under,O
the,O
indenture,O
and,O
the,O
notes,O
.,O
,O
Each,O
Guarantor,O
(,O
other,O
than,O
any,O
Guarantor,O
whose,O
Subsidiary,O
Guarantee,O
is,O
to,O
be,O
released,O
in,O
accordance,O
with,O
the,O
terms,O
of,O
its,O
Subsidiary,O
Guarantee,O
and,O
the,O
indenture,O
in,O
connection,O
with,O
the,O
sale,O
",",O
exchange,O
or,O
transfer,O
to,O
any,O
Person,O
(,O
other,O
than,O
an,O
Affiliate,O
of,O
the,O
Company,O
),O
of,O
all,O
of,O
the,O
Capital,O
Stock,O
of,O
such,O
Guarantor,O
),O
will,O
not,O
",",O
and,O
the,O
Company,O
will,O
not,O
cause,O
or,O
permit,O
any,O
Guarantor,O
to,O
",",O
consolidate,O
with,O
or,O
merge,O
with,O
or,O
into,O
any,O
Person,O
other,O
than,O
the,O
Company,O
or,O
any,O
other,O
Guarantor,O
unless,O
:,O
(,O
1,O
),O
such,O
Guarantor,O
is,O
the,O
surviving,O
corporation,O
or,O
the,O
Person,O
formed,O
by,O
or,O
surviving,O
any,O
such,O
consolidation,O
or,O
merger,O
(,O
if,O
other,O
than,O
the,O
Guarantor,O
),O
is,O
a,O
corporation,O
organized,O
and,O
existing,O
under,O
the,O
laws,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
",",O
any,O
State,O
thereof,O
or,O
the,O
District,I-LOCATION
of,I-LOCATION
Columbia,I-LOCATION
and,O
such,O
Person,O
assumes,O
by,O
supplemental,O
indenture,O
all,O
of,O
the,O
obligations,O
of,O
the,O
Guarantor,O
on,O
its,O
Subsidiary,O
Guarantee,O
;,O
and,O
(,O
2,O
),O
immediately,O
after,O
giving,O
effect,O
to,O
such,O
transaction,O
",",O
no,O
Default,O
or,O
Event,O
of,O
Default,O
shall,O
have,O
occurred,O
and,O
be,O
continuing,O
.,O
,O
The,O
successor,O
Guarantor,O
will,O
succeed,O
to,O
",",O
and,O
except,O
in,O
the,O
case,O
of,O
a,O
lease,O
be,O
substituted,O
for,O
",",O
such,O
Guarantor,O
under,O
the,O
indenture,O
and,O
such,O
Guarantor,O
s,O
Subsidiary,O
Guarantee,O
.,O
,O
The,O
foregoing,O
covenant,O
contains,O
the,O
phrase,O
substantially,O
all,O
.,O
,O
Although,O
there,O
is,O
a,O
limited,O
body,O
of,O
case,O
law,O
interpreting,O
the,O
phrase,O
substantially,O
all,O
",",O
there,O
is,O
no,O
precise,O
established,O
definition,O
of,O
the,O
phrase,O
under,O
applicable,O
law,O
.,O
,O
Accordingly,O
",",O
in,O
certain,O
circumstances,O
there,O
may,O
be,O
a,O
degree,O
of,O
uncertainty,O
as,O
to,O
whether,O
a,O
particular,O
transaction,O
would,O
involve,O
all,O
or,O
substantially,O
all,O
of,O
the,O
property,O
or,O
assets,O
of,O
a,O
Person,O
.,O
,O
(,O
whether,O
at,O
scheduled,O
maturity,O
",",O
upon,O
acceleration,O
",",O
redemption,O
or,O
otherwise,O
),O
or,O
(,O
b,O
),O
which,O
results,O
in,O
acceleration,O
of,O
the,O
Indebtedness,O
",",O
and,O
in,O
each,O
case,O
after,O
we,O
have,O
received,O
written,O
notice,O
of,O
the,O
default,O
from,O
the,O
trustee,O
or,O
from,O
the,O
holders,O
of,O
at,O
least,O
25,O
%,O
of,O
the,O
aggregate,O
principal,O
amount,O
of,O
notes,O
then,O
outstanding,O
and,O
thereafter,O
do,O
not,O
cure,O
the,O
default,O
within,O
30,O
days,O
;,O
(,O
6,O
),O
failure,O
by,O
the,O
Company,O
or,O
any,O
of,O
its,O
Subsidiaries,O
to,O
pay,O
final,O
judgments,O
aggregating,O
in,O
excess,O
of,O
$,O
50.0,O
million,O
above,O
available,O
insurance,O
coverage,O
or,O
indemnity,O
coverage,O
",",O
which,O
judgments,O
are,O
not,O
paid,O
",",O
discharged,O
or,O
stayed,O
for,O
a,O
period,O
of,O
60,O
days,O
;,O
(,O
7,O
),O
certain,O
events,O
of,O
bankruptcy,O
or,O
insolvency,O
with,O
respect,O
to,O
the,O
Company,O
or,O
any,O
of,O
its,O
Significant,O
Subsidiaries,O
;,O
and,O
(,O
8,O
),O
except,O
as,O
permitted,O
by,O
the,O
indenture,O
",",O
any,O
Subsidiary,O
Guarantee,O
of,O
a,O
Significant,O
Subsidiary,O
is,O
held,O
in,O
any,O
judicial,O
proceeding,O
to,O
be,O
unenforceable,O
or,O
invalid,O
.,O
,O
If,O
any,O
Event,O
of,O
Default,O
occurs,O
and,O
is,O
continuing,O
",",O
the,O
trustee,O
or,O
the,O
holders,O
of,O
at,O
least,O
25,O
%,O
in,O
principal,O
amount,O
of,O
the,O
then,O
outstanding,O
notes,O
may,O
declare,O
all,O
the,O
notes,O
to,O
be,O
due,O
and,O
payable,O
immediately,O
.,O
,O
Notwithstanding,O
the,O
foregoing,O
",",O
in,O
the,O
case,O
of,O
an,O
Event,O
of,O
Default,O
arising,O
from,O
certain,O
events,O
of,O
bankruptcy,O
or,O
insolvency,O
",",O
with,O
respect,O
to,O
the,O
Company,O
",",O
all,O
outstanding,O
notes,O
will,O
become,O
due,O
and,O
payable,O
without,O
further,O
action,O
or,O
notice,O
.,O
,O
Holders,O
of,O
the,O
notes,O
may,O
not,O
enforce,O
the,O
indenture,O
or,O
the,O
notes,O
except,O
as,O
provided,O
in,O
the,O
indenture,O
.,O
,O
Subject,O
to,O
certain,O
limitations,O
",",O
holders,O
of,O
at,O
least,O
a,O
majority,O
in,O
principal,O
amount,O
of,O
the,O
then,O
outstanding,O
notes,O
may,O
direct,O
the,O
trustee,O
in,O
its,O
exercise,O
of,O
any,O
trust,O
or,O
power,O
.,O
,O
The,O
trustee,O
may,O
withhold,O
from,O
holders,O
of,O
the,O
notes,O
notice,O
of,O
any,O
continuing,O
Default,O
or,O
Event,O
of,O
Default,O
(,O
except,O
a,O
Default,O
or,O
Event,O
of,O
Default,O
relating,O
to,O
the,O
payment,O
of,O
principal,O
or,O
interest,O
),O
if,O
it,O
determines,O
that,O
withholding,O
notice,O
is,O
in,O
their,O
interest,O
.,O
,O
The,O
holders,O
of,O
at,O
least,O
a,O
majority,O
in,O
aggregate,O
principal,O
amount,O
of,O
the,O
notes,O
then,O
outstanding,O
by,O
notice,O
to,O
the,O
trustee,O
may,O
on,O
behalf,O
of,O
the,O
holders,O
of,O
all,O
of,O
the,O
notes,O
waive,O
any,O
existing,O
Default,O
or,O
Event,O
of,O
Default,O
and,O
its,O
consequences,O
under,O
the,O
indenture,O
except,O
a,O
continuing,O
Default,O
or,O
Event,O
of,O
Default,O
in,O
the,O
payment,O
of,O
principal,O
of,O
or,O
interest,O
on,O
the,O
notes,O
.,O
,O
The,O
Company,O
is,O
required,O
to,O
deliver,O
to,O
the,O
trustee,O
annually,O
a,O
statement,O
regarding,O
compliance,O
with,O
the,O
indenture,O
",",O
and,O
the,O
Company,O
is,O
required,O
",",O
within,O
5,O
business,O
days,O
of,O
becoming,O
aware,O
of,O
any,O
Default,O
or,O
Event,O
of,O
Default,O
",",O
to,O
deliver,O
to,O
the,O
trustee,O
a,O
statement,O
specifying,O
such,O
Default,O
or,O
Event,O
of,O
Default,O
.,O
,O
Defeasance,O
or,O
Covenant,O
Defeasance,O
of,O
Indenture,O
The,O
Company,O
may,O
",",O
at,O
its,O
option,O
and,O
at,O
any,O
time,O
",",O
elect,O
to,O
have,O
the,O
obligations,O
of,O
the,O
Company,O
",",O
any,O
Guarantor,O
and,O
any,O
other,O
obligor,O
upon,O
notes,O
discharged,O
with,O
respect,O
to,O
the,O
outstanding,O
notes,O
(,O
defeasance,O
),O
.,O
,O
Such,O
defeasance,O
means,O
that,O
the,O
Company,O
",",O
any,O
such,O
Guarantor,O
and,O
any,O
other,O
obligor,O
under,O
the,O
indenture,O
shall,O
be,O
deemed,O
to,O
have,O
paid,O
and,O
discharged,O
the,O
entire,O
Indebtedness,O
represented,O
by,O
the,O
outstanding,O
notes,O
being,O
defeased,O
",",O
except,O
for,O
:,O
(,O
1,O
),O
the,O
rights,O
of,O
holders,O
of,O
such,O
outstanding,O
notes,O
to,O
receive,O
payments,O
in,O
respect,O
of,O
the,O
principal,O
of,O
and,O
interest,O
on,O
such,O
notes,O
when,O
such,O
payments,O
are,O
due,O
",",O
(,O
2,O
),O
the,O
Company,O
s,O
obligations,O
with,O
respect,O
to,O
such,O
notes,O
concerning,O
issuing,O
temporary,O
notes,O
",",O
registration,O
of,O
notes,O
",",O
mutilated,O
",",O
destroyed,O
",",O
lost,O
or,O
stolen,O
notes,O
",",O
and,O
the,O
maintenance,O
of,O
an,O
office,O
or,O
agency,O
for,O
payment,O
and,O
money,O
for,O
security,O
payments,O
held,O
in,O
trust,O
",",O
(,O
3,O
),O
the,O
rights,O
",",O
powers,O
",",O
trusts,O
",",O
duties,O
and,O
immunities,O
of,O
the,O
trustee,O
",",O
and,O
(,O
4,O
),O
the,O
defeasance,O
provisions,O
of,O
the,O
indenture,O
.,O
,O
In,O
addition,O
",",O
the,O
Company,O
may,O
",",O
at,O
its,O
option,O
and,O
at,O
any,O
time,O
",",O
elect,O
to,O
have,O
the,O
obligations,O
of,O
the,O
Company,O
and,O
any,O
Guarantor,O
released,O
with,O
respect,O
to,O
certain,O
covenants,O
that,O
are,O
described,O
in,O
the,O
indenture,O
(,O
covenant,O
defeasance,O
),O
and,O
thereafter,O
any,O
omission,O
to,O
comply,O
with,O
such,O
obligations,O
shall,O
not,O
constitute,O
a,O
Default,O
or,O
an,O
Event,O
of,O
Default,O
with,O
respect,O
to,O
the,O
notes,O
.,O
,O
In,O
the,O
event,O
covenant,O
defeasance,O
occurs,O
",",O
certain,O
events,O
(,O
not,O
including,O
nonpayment,O
",",O
bankruptcy,O
and,O
insolvency,O
events,O
),O
described,O
under,O
Events,O
of,O
Default,O
will,O
no,O
longer,O
constitute,O
an,O
Event,O
of,O
Default,O
with,O
respect,O
to,O
the,O
notes,O
that,O
have,O
been,O
defeased,O
.,O
,O
In,O
order,O
to,O
exercise,O
either,O
defeasance,O
or,O
covenant,O
defeasance,O
",",O
with,O
respect,O
to,O
the,O
notes,O
that,O
are,O
the,O
subject,O
of,O
such,O
defeasance,O
or,O
covenant,O
defeasance,O
:,O
(,O
a,O
),O
the,O
Company,O
must,O
irrevocably,O
deposit,O
with,O
the,O
trustee,O
",",O
in,O
trust,O
",",O
for,O
the,O
benefit,O
of,O
the,O
holders,O
of,O
such,O
notes,O
cash,O
in,O
United,I-LOCATION
States,I-LOCATION
dollars,O
",",O
U.S.,I-MISCELLANEOUS
Government,I-MISCELLANEOUS
Obligations,I-MISCELLANEOUS
(,O
as,O
defined,O
in,O
the,O
indenture,O
),O
",",O
or,O
a,O
combination,O
thereof,O
",",O
in,O
such,O
amounts,O
as,O
will,O
be,O
sufficient,O
",",O
in,O
the,O
opinion,O
of,O
a,O
nationally,O
recognized,O
firm,O
of,O
independent,O
public,O
accountants,O
or,O
a,O
nationally,O
recognized,O
investment,O
banking,O
firm,O
",",O
to,O
pay,O
and,O
discharge,O
the,O
principal,O
of,O
",",O
premium,O
",",O
if,O
any,O
",",O
and,O
interest,O
on,O
such,O
outstanding,O
notes,O
on,O
the,O
Stated,O
Maturity,O
;,O
(,O
b,O
),O
in,O
the,O
case,O
of,O
defeasance,O
",",O
the,O
Company,O
shall,O
have,O
delivered,O
to,O
the,O
trustee,O
an,O
opinion,O
of,O
independent,O
counsel,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
stating,O
that,O
(,O
A,O
),O
the,O
Company,O
has,O
received,O
from,O
",",O
or,O
there,O
has,O
been,O
published,O
by,O
",",O
the,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
a,O
ruling,O
or,O
(,O
B,O
),O
since,O
the,O
date,O
of,O
the,O
indenture,O
",",O
there,O
has,O
been,O
a,O
change,O
in,O
the,O
applicable,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
law,O
",",O
in,O
either,O
case,O
to,O
the,O
effect,O
that,O
",",O
and,O
based,O
thereon,O
such,O
opinion,O
of,O
independent,O
counsel,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
shall,O
confirm,O
that,O
",",O
the,O
holders,O
of,O
such,O
outstanding,O
notes,O
will,O
not,O
recognize,O
income,O
",",O
gain,O
or,O
loss,O
for,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
purposes,O
as,O
a,O
result,O
of,O
such,O
defeasance,O
and,O
will,O
be,O
subject,O
to,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
on,O
the,O
same,O
amounts,O
",",O
in,O
the,O
same,O
manner,O
and,O
at,O
the,O
same,O
times,O
as,O
would,O
have,O
been,O
the,O
case,O
if,O
such,O
defeasance,O
had,O
not,O
occurred,O
;,O
(,O
c,O
),O
in,O
the,O
case,O
of,O
covenant,O
defeasance,O
",",O
the,O
Company,O
shall,O
have,O
delivered,O
to,O
the,O
trustee,O
an,O
opinion,O
of,O
independent,O
counsel,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
to,O
the,O
effect,O
that,O
the,O
holders,O
of,O
such,O
outstanding,O
notes,O
will,O
not,O
recognize,O
income,O
",",O
gain,O
or,O
loss,O
for,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
purposes,O
as,O
a,O
result,O
of,O
such,O
covenant,O
defeasance,O
and,O
will,O
be,O
subject,O
to,O
U.S.,I-LOCATION
(,O
i,O
),O
the,O
Company,O
will,O
have,O
delivered,O
to,O
the,O
trustee,O
an,O
officers,O
certificate,O
and,O
an,O
opinion,O
of,O
independent,O
counsel,O
",",O
each,O
stating,O
that,O
all,O
conditions,O
precedent,O
provided,O
for,O
relating,O
to,O
either,O
the,O
defeasance,O
or,O
the,O
covenant,O
defeasance,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
have,O
been,O
complied,O
with,O
.,O
,O
Satisfaction,O
and,O
Discharge,O
The,O
indenture,O
will,O
be,O
discharged,O
and,O
will,O
cease,O
to,O
be,O
of,O
further,O
effect,O
(,O
except,O
as,O
to,O
surviving,O
rights,O
of,O
registration,O
of,O
transfer,O
or,O
exchange,O
of,O
the,O
notes,O
as,O
expressly,O
provided,O
for,O
in,O
the,O
indenture,O
),O
as,O
to,O
all,O
outstanding,O
notes,O
under,O
the,O
indenture,O
when,O
:,O
(,O
a,O
),O
either,O
:,O
(,O
1,O
),O
all,O
such,O
notes,O
theretofore,O
authenticated,O
and,O
delivered,O
(,O
except,O
lost,O
",",O
stolen,O
or,O
destroyed,O
notes,O
which,O
have,O
been,O
replaced,O
or,O
paid,O
or,O
notes,O
whose,O
payment,O
has,O
been,O
deposited,O
in,O
trust,O
or,O
segregated,O
and,O
held,O
in,O
trust,O
by,O
the,O
Company,O
and,O
thereafter,O
repaid,O
to,O
the,O
Company,O
or,O
discharged,O
from,O
such,O
trust,O
as,O
provided,O
for,O
in,O
the,O
indenture,O
),O
have,O
been,O
delivered,O
to,O
the,O
trustee,O
for,O
cancellation,O
",",O
or,O
(,O
2,O
),O
all,O
such,O
notes,O
not,O
theretofore,O
delivered,O
to,O
the,O
trustee,O
for,O
cancellation,O
(,O
a,O
),O
have,O
become,O
due,O
and,O
payable,O
",",O
(,O
b,O
),O
will,O
become,O
due,O
and,O
payable,O
at,O
their,O
Stated,O
Maturity,O
within,O
one,O
year,O
",",O
or,O
(,O
c,O
),O
are,O
to,O
be,O
called,O
for,O
redemption,O
within,O
one,O
year,O
under,O
arrangements,O
satisfactory,O
to,O
the,O
trustee,O
for,O
the,O
giving,O
of,O
notice,O
of,O
redemption,O
by,O
the,O
trustee,O
in,O
the,O
name,O
",",O
and,O
at,O
the,O
expense,O
",",O
of,O
the,O
Company,O
;,O
(,O
b,O
),O
the,O
Company,O
or,O
any,O
Guarantor,O
has,O
irrevocably,O
deposited,O
or,O
caused,O
to,O
be,O
deposited,O
with,O
the,O
trustee,O
as,O
trust,O
funds,O
in,O
trust,O
an,O
amount,O
in,O
United,I-LOCATION
States,I-LOCATION
dollars,O
sufficient,O
to,O
pay,O
and,O
discharge,O
the,O
entire,O
Indebtedness,O
on,O
such,O
notes,O
not,O
theretofore,O
delivered,O
to,O
the,O
trustee,O
for,O
cancellation,O
",",O
including,O
principal,O
of,O
",",O
premium,O
",",O
if,O
any,O
",",O
and,O
accrued,O
interest,O
at,O
such,O
Maturity,O
",",O
Stated,O
Maturity,O
or,O
redemption,O
date,O
;,O
(,O
c,O
),O
no,O
Default,O
or,O
Event,O
of,O
Default,O
shall,O
have,O
occurred,O
and,O
be,O
continuing,O
on,O
the,O
date,O
of,O
such,O
deposit,O
or,O
shall,O
occur,O
as,O
a,O
result,O
of,O
such,O
deposit,O
and,O
such,O
deposit,O
will,O
not,O
result,O
in,O
a,O
breach,O
or,O
violation,O
of,O
",",O
or,O
constitute,O
a,O
default,O
under,O
",",O
any,O
other,O
material,O
agreement,O
to,O
which,O
the,O
Company,O
or,O
any,O
Guarantor,O
is,O
a,O
party,O
or,O
by,O
which,O
the,O
Company,O
or,O
any,O
Guarantor,O
is,O
bound,O
;,O
(,O
d,O
),O
the,O
Company,O
or,O
any,O
Guarantor,O
has,O
paid,O
or,O
caused,O
to,O
be,O
paid,O
all,O
other,O
sums,O
payable,O
under,O
the,O
indenture,O
by,O
the,O
Company,O
and,O
any,O
Guarantor,O
;,O
(,O
e,O
),O
the,O
Company,O
has,O
delivered,O
irrevocable,O
instructions,O
to,O
the,O
trustee,O
to,O
apply,O
such,O
funds,O
to,O
the,O
payment,O
of,O
the,O
notes,O
at,O
maturity,O
or,O
redemption,O
",",O
as,O
the,O
case,O
may,O
be,O
;,O
and,O
(,O
f,O
),O
the,O
Company,O
has,O
delivered,O
to,O
the,O
trustee,O
an,O
officers,O
certificate,O
and,O
an,O
opinion,O
of,O
independent,O
counsel,O
each,O
stating,O
that,O
all,O
conditions,O
precedent,O
under,O
the,O
indenture,O
relating,O
to,O
the,O
satisfaction,O
and,O
discharge,O
of,O
such,O
indenture,O
have,O
been,O
complied,O
with,O
.,O
,O
Amendment,O
",",O
Supplement,O
and,O
Waiver,O
Except,O
as,O
provided,O
in,O
the,O
next,O
two,O
succeeding,O
paragraphs,O
",",O
the,O
indenture,O
",",O
the,O
notes,O
or,O
the,O
Subsidiary,O
Guarantees,O
may,O
be,O
amended,O
or,O
supplemented,O
with,O
the,O
consent,O
of,O
the,O
holders,O
of,O
at,O
least,O
a,O
majority,O
in,O
principal,O
amount,O
of,O
the,O
notes,O
then,O
outstanding,O
(,O
including,O
",",O
without,O
limitation,O
",",O
consents,O
obtained,O
in,O
connection,O
with,O
a,O
purchase,O
of,O
",",O
or,O
tender,O
offer,O
or,O
exchange,O
offer,O
for,O
",",O
notes,O
),O
",",O
and,O
any,O
existing,O
Default,O
or,O
compliance,O
with,O
any,O
provision,O
of,O
the,O
indenture,O
or,O
the,O
notes,O
may,O
be,O
waived,O
with,O
the,O
consent,O
of,O
the,O
holders,O
of,O
a,O
majority,O
in,O
principal,O
amount,O
of,O
the,O
then,O
outstanding,O
notes,O
(,O
including,O
consents,O
obtained,O
in,O
connection,O
with,O
a,O
tender,O
offer,O
or,O
exchange,O
offer,O
for,O
notes,O
),O
.,O
,O
Without,O
the,O
consent,O
of,O
each,O
holder,O
affected,O
",",O
an,O
amendment,O
or,O
waiver,O
may,O
not,O
(,O
with,O
respect,O
to,O
any,O
notes,O
held,O
by,O
a,O
non-consenting,O
holder,O
),O
:,O
(,O
1,O
),O
reduce,O
the,O
principal,O
amount,O
of,O
notes,O
whose,O
holders,O
must,O
consent,O
to,O
an,O
amendment,O
",",O
supplement,O
or,O
waiver,O
;,O
(,O
2,O
),O
reduce,O
the,O
principal,O
of,O
or,O
change,O
the,O
fixed,O
maturity,O
of,O
any,O
note,O
or,O
alter,O
the,O
provisions,O
with,O
respect,O
to,O
the,O
redemption,O
of,O
the,O
notes,O
(,O
other,O
than,O
provisions,O
relating,O
to,O
the,O
covenants,O
described,O
above,O
under,O
the,O
caption,O
—Repurchase,O
Upon,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
),O
;,O
(,O
3,O
),O
reduce,O
the,O
rate,O
of,O
or,O
change,O
the,O
time,O
for,O
payment,O
of,O
interest,O
on,O
any,O
note,O
;,O
(,O
4,O
),O
waive,O
a,O
Default,O
or,O
Event,O
of,O
Default,O
in,O
the,O
payment,O
of,O
principal,O
of,O
and,O
interest,O
on,O
the,O
notes,O
(,O
except,O
a,O
rescission,O
of,O
acceleration,O
of,O
the,O
notes,O
by,O
the,O
holders,O
of,O
at,O
least,O
a,O
majority,O
in,O
aggregate,O
principal,O
amount,O
of,O
the,O
notes,O
and,O
a,O
waiver,O
of,O
the,O
payment,O
default,O
that,O
resulted,O
from,O
such,O
acceleration,O
),O
;,O
(,O
5,O
),O
make,O
any,O
note,O
payable,O
in,O
money,O
other,O
than,O
that,O
stated,O
in,O
the,O
notes,O
;,O
(,O
6,O
),O
make,O
any,O
change,O
in,O
the,O
provisions,O
of,O
the,O
indenture,O
relating,O
to,O
waivers,O
of,O
past,O
Defaults,O
or,O
the,O
rights,O
of,O
holders,O
of,O
notes,O
to,O
receive,O
payments,O
of,O
principal,O
of,O
or,O
interest,O
on,O
the,O
notes,O
;,O
(,O
7,O
),O
waive,O
a,O
redemption,O
payment,O
with,O
respect,O
to,O
any,O
note,O
(,O
other,O
than,O
a,O
payment,O
required,O
by,O
one,O
of,O
the,O
covenants,O
described,O
above,O
under,O
the,O
caption,O
—Repurchase,O
Upon,O
Change,O
of,O
Control,O
Repurchase,O
Event,O
),O
;,O
(,O
8,O
),O
make,O
any,O
change,O
in,O
the,O
foregoing,O
amendment,O
and,O
waiver,O
provisions,O
;,O
(,O
9,O
),O
modify,O
",",O
without,O
the,O
written,O
consent,O
of,O
the,O
trustee,O
",",O
the,O
rights,O
",",O
duties,O
or,O
immunities,O
of,O
the,O
trustee,O
;,O
or,O
(,O
10,O
),O
release,O
any,O
Guarantor,O
that,O
is,O
a,O
Significant,O
Subsidiary,O
from,O
its,O
Subsidiary,O
Guarantee,O
",",O
except,O
as,O
provided,O
in,O
the,O
indenture,O
.,O
,O
Notwithstanding,O
the,O
foregoing,O
",",O
without,O
the,O
consent,O
of,O
any,O
holder,O
of,O
notes,O
",",O
the,O
Company,O
",",O
the,O
Guarantors,O
and,O
the,O
trustee,O
may,O
amend,O
or,O
supplement,O
the,O
indenture,O
or,O
the,O
notes,O
:,O
(,O
1,O
),O
to,O
cure,O
any,O
ambiguity,O
",",O
defect,O
or,O
inconsistency,O
in,O
the,O
indenture,O
or,O
the,O
notes,O
;,O
(,O
2,O
),O
to,O
provide,O
for,O
uncertificated,O
notes,O
in,O
addition,O
to,O
or,O
in,O
place,O
of,O
certificated,O
notes,O
;,O
(,O
3,O
),O
to,O
provide,O
for,O
the,O
assumption,O
of,O
the,O
Company,O
s,O
obligations,O
to,O
holders,O
of,O
notes,O
in,O
the,O
case,O
of,O
a,O
merger,O
or,O
consolidation,O
or,O
sale,O
of,O
all,O
or,O
substantially,O
all,O
of,O
the,O
Company,O
s,O
assets,O
;,O
(,O
4,O
),O
to,O
make,O
any,O
change,O
that,O
",",O
in,O
the,O
good,O
faith,O
opinion,O
of,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Company,O
",",O
would,O
provide,O
any,O
additional,O
rights,O
or,O
benefits,O
to,O
the,O
holders,O
of,O
notes,O
or,O
that,O
does,O
not,O
adversely,O
affect,O
the,O
legal,O
rights,O
under,O
the,O
indenture,O
of,O
any,O
such,O
holder,O
;,O
(,O
5,O
),O
to,O
secure,O
the,O
notes,O
or,O
to,O
add,O
additional,O
Guarantors,O
;,O
(,O
6,O
),O
to,O
comply,O
with,O
requirements,O
of,O
the,O
SEC,I-GOVERNMENT
in,O
order,O
to,O
effect,O
or,O
maintain,O
the,O
qualification,O
of,O
the,O
indenture,O
under,O
the,O
Trust,I-LEGISLATION/ACT
Indenture,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
;,O
,O
(,O
7,O
),O
to,O
conform,O
the,O
text,O
of,O
the,O
indenture,O
or,O
the,O
notes,O
to,O
any,O
provision,O
of,O
this,O
Description,O
of,O
the,O
Notes,O
to,O
the,O
extent,O
that,O
such,O
provision,O
in,O
this,O
Description,O
of,O
the,O
Notes,O
was,O
intended,O
to,O
be,O
a,O
verbatim,O
recitation,O
of,O
the,O
indenture,O
",",O
the,O
Subsidiary,O
Guarantees,O
or,O
the,O
notes,O
;,O
(,O
8,O
),O
to,O
remove,O
a,O
Guarantor,O
which,O
",",O
in,O
accordance,O
with,O
the,O
terms,O
of,O
the,O
indenture,O
",",O
ceases,O
to,O
be,O
liable,O
in,O
respect,O
of,O
its,O
Subsidiary,O
Guarantee,O
;,O
(,O
9,O
),O
to,O
add,O
to,O
the,O
covenants,O
of,O
the,O
Company,O
or,O
any,O
Guarantor,O
for,O
the,O
benefit,O
of,O
the,O
holders,O
of,O
notes,O
or,O
to,O
surrender,O
any,O
right,O
or,O
power,O
conferred,O
upon,O
the,O
Company,O
or,O
any,O
Guarantor,O
;,O
(,O
10,O
),O
to,O
provide,O
for,O
the,O
issuance,O
of,O
additional,O
notes,O
in,O
accordance,O
with,O
the,O
limitations,O
set,O
forth,O
in,O
the,O
indenture,O
as,O
of,O
the,O
date,O
of,O
the,O
indenture,O
;,O
(,O
11,O
),O
to,O
comply,O
with,O
the,O
provisions,O
of,O
the,O
DTC,I-BUSINESS
or,O
the,O
trustee,O
with,O
respect,O
to,O
the,O
provisions,O
in,O
the,O
indenture,O
and,O
the,O
notes,O
relating,O
to,O
transfer,O
and,O
exchanges,O
of,O
notes,O
or,O
beneficial,O
interests,O
in,O
notes,O
;,O
and,O
(,O
12,O
),O
evidence,O
and,O
provide,O
for,O
the,O
acceptance,O
of,O
appointment,O
by,O
a,O
successor,O
trustee,O
.,O
,O
Trustee,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
will,O
be,O
the,O
trustee,O
",",O
security,O
registrar,O
",",O
paying,O
agent,O
and,O
conversion,O
agent,O
for,O
the,O
notes,O
.,O
,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
in,O
each,O
of,O
its,O
capacities,O
",",O
including,O
without,O
limitation,O
as,O
trustee,O
",",O
security,O
registrar,O
",",O
paying,O
agent,O
and,O
conversion,O
agent,O
",",O
assumes,O
no,O
responsibility,O
for,O
the,O
accuracy,O
or,O
completeness,O
of,O
the,O
information,O
concerning,O
us,O
or,O
our,O
affiliates,O
or,O
any,O
other,O
party,O
contained,O
in,O
this,O
document,O
or,O
the,O
related,O
documents,O
or,O
for,O
any,O
failure,O
by,O
us,O
or,O
any,O
other,O
party,O
to,O
disclose,O
events,O
that,O
may,O
have,O
occurred,O
and,O
may,O
affect,O
the,O
significance,O
or,O
accuracy,O
of,O
such,O
information,O
.,O
,O
We,O
may,O
maintain,O
banking,O
relationships,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
with,O
the,O
trustee,O
and,O
its,O
affiliates,O
.,O
,O
Exchange,O
and,O
Transfer,O
You,O
may,O
exchange,O
or,O
transfer,O
the,O
notes,O
in,O
accordance,O
with,O
the,O
indenture,O
.,O
,O
You,O
will,O
not,O
be,O
required,O
to,O
pay,O
a,O
service,O
charge,O
to,O
exchange,O
or,O
transfer,O
the,O
notes,O
",",O
but,O
you,O
may,O
be,O
required,O
to,O
pay,O
for,O
any,O
tax,O
or,O
other,O
governmental,O
charge,O
associated,O
with,O
the,O
exchange,O
or,O
transfer,O
.,O
,O
The,O
exchange,O
or,O
transfer,O
will,O
only,O
be,O
made,O
if,O
the,O
transfer,O
agent,O
is,O
satisfied,O
with,O
your,O
proof,O
of,O
ownership,O
.,O
,O
See,O
—Book-entry,O
issuance,O
.,O
,O
Paying,O
and,O
Paying,O
Agents,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
will,O
act,O
as,O
our,O
paying,O
agent,O
for,O
the,O
notes,O
.,O
,O
We,O
may,O
choose,O
to,O
pay,O
interest,O
by,O
mailing,O
checks,O
or,O
making,O
wire,O
transfers,O
.,O
,O
Regardless,O
of,O
who,O
acts,O
as,O
the,O
paying,O
agent,O
",",O
all,O
money,O
paid,O
by,O
us,O
to,O
a,O
paying,O
agent,O
that,O
remains,O
unclaimed,O
at,O
the,O
end,O
of,O
two,O
years,O
after,O
the,O
amount,O
is,O
due,O
to,O
note,O
holders,O
will,O
be,O
repaid,O
to,O
us,O
.,O
,O
After,O
that,O
two-year,O
period,O
",",O
you,O
may,O
look,O
only,O
to,O
us,O
for,O
payment,O
and,O
not,O
to,O
the,O
trustee,O
",",O
any,O
other,O
paying,O
agent,O
or,O
anyone,O
else,O
.,O
,O
We,O
may,O
also,O
arrange,O
for,O
additional,O
payment,O
offices,O
",",O
and,O
may,O
cancel,O
or,O
change,O
these,O
offices,O
",",O
including,O
any,O
use,O
of,O
the,O
trustee,O
s,O
corporate,O
trust,O
office,O
.,O
,O
We,O
must,O
notify,O
you,O
of,O
changes,O
in,O
identities,O
of,O
the,O
paying,O
agents,O
for,O
the,O
notes,O
.,O
,O
Governing,O
Law,O
The,O
indenture,O
provides,O
that,O
it,O
and,O
the,O
notes,O
will,O
be,O
governed,O
by,O
",",O
and,O
construed,O
in,O
accordance,O
with,O
",",O
the,O
laws,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
New,I-LOCATION
York,I-LOCATION
.,O
,O
Definitions,O
The,O
indenture,O
contains,O
the,O
following,O
defined,O
terms,O
:,O
Affiliate,O
means,O
",",O
as,O
to,O
any,O
Person,O
",",O
any,O
other,O
Person,O
who,O
",",O
directly,O
or,O
indirectly,O
",",O
through,O
one,O
or,O
more,O
intermediaries,O
",",O
controls,O
",",O
or,O
is,O
controlled,O
by,O
",",O
or,O
is,O
under,O
common,O
control,O
with,O
",",O
the,O
first,O
referred,O
to,O
Person,O
.,O
,O
The,O
term,O
control,O
means,O
the,O
possession,O
",",O
directly,O
or,O
indirectly,O
",",O
of,O
the,O
power,O
to,O
direct,O
or,O
cause,O
the,O
direction,O
of,O
the,O
management,O
and,O
policies,O
of,O
a,O
Person,O
",",O
whether,O
through,O
the,O
ownership,O
of,O
voting,O
securities,O
",",O
by,O
contract,O
or,O
otherwise,O
.,O
,O
Attributable,O
Debt,O
means,O
",",O
with,O
respect,O
to,O
any,O
Sale,O
and,O
Leaseback,O
Transaction,O
",",O
at,O
the,O
time,O
of,O
determination,O
",",O
the,O
total,O
obligation,O
(,O
discounted,O
to,O
the,O
present,O
value,O
at,O
the,O
imputed,O
rate,O
of,O
interest,O
as,O
determined,O
in,O
good,O
faith,O
by,O
us,O
),O
of,O
the,O
lessee,O
for,O
rental,O
payments,O
(,O
other,O
than,O
amounts,O
required,O
to,O
be,O
paid,O
on,O
account,O
of,O
taxes,O
",",O
assessments,O
",",O
maintenance,O
",",O
repairs,O
",",O
insurance,O
",",O
water,O
rates,O
or,O
similar,O
charges,O
required,O
to,O
by,O
paid,O
by,O
such,O
lessee,O
thereunder,O
or,O
and,O
other,O
items,O
which,O
do,O
not,O
constitute,O
payments,O
for,O
property,O
rights,O
or,O
any,O
amount,O
required,O
to,O
be,O
paid,O
by,O
lessee,O
thereunder,O
contingent,O
upon,O
the,O
amount,O
of,O
maintenance,O
",",O
repairs,O
",",O
insurance,O
",",O
taxes,O
",",O
assessments,O
",",O
water,O
charger,O
or,O
similar,O
charges,O
),O
during,O
the,O
remaining,O
portion,O
of,O
the,O
initial,O
term,O
of,O
the,O
lease,O
included,O
in,O
such,O
Sale,O
and,O
Leaseback,O
Transaction,O
.,O
,O
In,O
the,O
case,O
of,O
any,O
lease,O
which,O
is,O
terminable,O
by,O
the,O
lessee,O
upon,O
the,O
payment,O
of,O
a,O
penalty,O
",",O
such,O
rental,O
payments,O
shall,O
be,O
the,O
lesser,O
of,O
(,O
x,O
),O
the,O
amount,O
determined,O
assuming,O
termination,O
upon,O
the,O
first,O
date,O
such,O
lease,O
may,O
be,O
terminated,O
(,O
in,O
which,O
case,O
the,O
amount,O
shall,O
also,O
include,O
the,O
amount,O
of,O
the,O
penalty,O
",",O
but,O
shall,O
not,O
include,O
any,O
rent,O
that,O
would,O
be,O
required,O
to,O
be,O
paid,O
under,O
such,O
lease,O
subsequent,O
to,O
the,O
first,O
date,O
upon,O
which,O
it,O
may,O
be,O
so,O
terminated,O
),O
or,O
(,O
y,O
),O
the,O
amount,O
determined,O
assuming,O
no,O
such,O
termination,O
.,O
,O
Automobile,O
Retailing,O
Activities,O
means,O
vehicle,O
retailing,O
",",O
wholesaling,O
",",O
leasing,O
",",O
financing,O
",",O
servicing,O
and,O
related,O
activities,O
.,O
,O
Capital,O
Lease,O
Obligation,O
of,O
any,O
Person,O
means,O
all,O
monetary,O
obligations,O
of,O
such,O
Person,O
and,O
its,O
Subsidiaries,O
on,O
a,O
consolidated,O
basis,O
under,O
any,O
capital,O
lease,O
of,O
(,O
or,O
other,O
agreement,O
conveying,O
the,O
right,O
to,O
use,O
),O
real,O
or,O
Personal,O
property,O
which,O
",",O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
",",O
is,O
required,O
to,O
be,O
recorded,O
as,O
a,O
capitalized,O
lease,O
obligation,O
.,O
,O
Capital,O
Stock,O
of,O
any,O
Person,O
means,O
any,O
and,O
all,O
shares,O
",",O
interests,O
",",O
participations,O
",",O
rights,O
in,O
or,O
other,O
equivalents,O
(,O
however,O
designated,O
),O
of,O
such,O
Person,O
s,O
capital,O
stock,O
",",O
other,O
equity,O
interests,O
whether,O
now,O
outstanding,O
or,O
issued,O
after,O
the,O
date,O
of,O
the,O
indenture,O
",",O
partnership,O
interests,O
(,O
whether,O
general,O
or,O
limited,O
),O
",",O
limited,O
liability,O
company,O
interests,O
",",O
any,O
other,O
interest,O
or,O
participation,O
that,O
confers,O
on,O
a,O
Person,O
that,O
right,O
to,O
receive,O
a,O
share,O
of,O
the,O
profits,O
and,O
losses,O
of,O
",",O
or,O
distributions,O
of,O
assets,O
of,O
",",O
the,O
issuing,O
Person,O
",",O
including,O
any,O
Preferred,O
Stock,O
",",O
and,O
any,O
rights,O
(,O
other,O
than,O
debt,O
securities,O
convertible,O
into,O
Capital,O
Stock,O
),O
",",O
warrants,O
or,O
options,O
exchangeable,O
for,O
or,O
convertible,O
into,O
such,O
Capital,O
Stock,O
.,O
,O
Commodity,O
Price,O
Protection,O
Agreement,O
means,O
any,O
forward,O
contract,O
",",O
commodity,O
swap,O
",",O
commodity,O
option,O
or,O
other,O
similar,O
financial,O
agreement,O
or,O
arrangement,O
relating,O
to,O
",",O
or,O
the,O
value,O
which,O
is,O
dependent,O
upon,O
",",O
fluctuations,O
in,O
commodity,O
prices,O
.,O
,O
Consolidated,O
Net,O
Tangible,O
Assets,O
means,O
of,O
any,O
Person,O
as,O
of,O
any,O
date,O
means,O
the,O
total,O
assets,O
of,O
such,O
Person,O
and,O
its,O
Subsidiaries,O
as,O
of,O
the,O
most,O
recent,O
fiscal,O
quarter,O
end,O
for,O
which,O
a,O
consolidated,O
balance,O
sheet,O
of,O
such,O
Person,O
and,O
its,O
Subsidiaries,O
is,O
available,O
as,O
of,O
that,O
date,O
",",O
minus,O
(,O
i,O
),O
all,O
current,O
liabilities,O
of,O
such,O
Person,O
and,O
its,O
Subsidiaries,O
reflected,O
on,O
such,O
balance,O
sheet,O
(,O
excluding,O
any,O
current,O
liabilities,O
for,O
borrowed,O
money,O
having,O
a,O
maturity,O
of,O
less,O
than,O
12,O
months,O
but,O
by,O
its,O
terms,O
being,O
renewable,O
or,O
extendible,O
beyond,O
12,O
months,O
from,O
such,O
date,O
at,O
the,O
option,O
of,O
the,O
borrower,O
),O
and,O
(,O
ii,O
),O
all,O
goodwill,O
",",O
tradenames,O
",",O
trademarks,O
",",O
patents,O
",",O
unamortized,O
debt,O
discount,O
and,O
expense,O
and,O
other,O
like,O
intangible,O
assets,O
of,O
such,O
Person,O
and,O
its,O
Subsidiaries,O
reflected,O
on,O
such,O
balance,O
sheet,O
",",O
all,O
calculated,O
on,O
a,O
consolidated,O
basis,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
.,O
,O
thereto,O
from,O
time,O
to,O
time,O
",",O
dated,O
as,O
of,O
July,O
14,O
",",O
2005,O
",",O
as,O
amended,O
as,O
of,O
the,O
Issue,O
Date,O
",",O
as,O
such,O
agreement,O
",",O
in,O
whole,O
or,O
in,O
part,O
",",O
in,O
one,O
or,O
more,O
instances,O
",",O
may,O
be,O
amended,O
",",O
renewed,O
",",O
extended,O
",",O
substituted,O
",",O
refinanced,O
",",O
restructured,O
",",O
replaced,O
",",O
supplemented,O
or,O
otherwise,O
modified,O
from,O
time,O
to,O
time,O
(,O
including,O
",",O
without,O
limitation,O
",",O
any,O
successive,O
renewals,O
",",O
extensions,O
",",O
substitutions,O
",",O
refinancings,O
",",O
restructurings,O
",",O
replacements,O
",",O
supplements,O
or,O
other,O
modifications,O
of,O
the,O
foregoing,O
),O
.,O
,O
Currency,O
Agreement,O
means,O
in,O
respect,O
of,O
a,O
Person,O
any,O
foreign,O
exchange,O
contract,O
",",O
currency,O
swap,O
agreement,O
or,O
other,O
similar,O
agreement,O
or,O
arrangements,O
designed,O
to,O
protect,O
such,O
Person,O
against,O
fluctuations,O
in,O
currency,O
values,O
.,O
,O
Debt,O
Facilities,O
means,O
one,O
or,O
more,O
debt,O
facilities,O
or,O
commercial,O
paper,O
facilities,O
",",O
in,O
each,O
case,O
with,O
banks,O
or,O
other,O
financial,O
institutions,O
or,O
institutional,O
lenders,O
",",O
or,O
other,O
Persons,O
which,O
provide,O
",",O
originate,O
or,O
arrange,O
debt,O
or,O
commercial,O
paper,O
facilities,O
",",O
providing,O
for,O
revolving,O
credit,O
loans,O
",",O
term,O
loans,O
",",O
receivables,O
financing,O
or,O
letters,O
of,O
credit,O
",",O
including,O
the,O
Credit,O
Agreement,O
",",O
and/or,O
one,O
or,O
more,O
indentures,O
relating,O
to,O
debt,O
securities,O
",",O
in,O
each,O
case,O
in,O
existence,O
from,O
time,O
to,O
time,O
as,O
such,O
facilities,O
",",O
in,O
whole,O
or,O
in,O
part,O
",",O
in,O
one,O
or,O
more,O
instances,O
",",O
may,O
be,O
amended,O
",",O
renewed,O
",",O
extended,O
",",O
substituted,O
",",O
refinanced,O
",",O
restructured,O
",",O
replaced,O
",",O
supplemented,O
or,O
otherwise,O
modified,O
from,O
time,O
to,O
time,O
(,O
including,O
",",O
without,O
limitation,O
",",O
any,O
successive,O
renewals,O
",",O
extensions,O
",",O
substitutions,O
",",O
refinancings,O
",",O
restructurings,O
",",O
replacements,O
",",O
supplements,O
or,O
other,O
modifications,O
of,O
the,O
foregoing,O
),O
.,O
,O
Default,O
means,O
any,O
event,O
which,O
is,O
",",O
or,O
after,O
notice,O
or,O
passage,O
of,O
time,O
or,O
both,O
would,O
be,O
",",O
an,O
Event,O
of,O
Default,O
.,O
,O
Domestic,O
Subsidiary,O
means,O
a,O
Subsidiary,O
of,O
the,O
Company,O
that,O
is,O
organized,O
or,O
existing,O
under,O
the,O
laws,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
any,O
state,O
thereof,O
",",O
the,O
District,I-LOCATION
of,I-LOCATION
Columbia,I-LOCATION
or,O
any,O
territory,O
thereof,O
.,O
,O
Eligible,O
Special,O
Purpose,O
Entity,O
means,O
any,O
Person,O
which,O
is,O
or,O
is,O
not,O
a,O
Subsidiary,O
of,O
the,O
Company,O
which,O
has,O
been,O
formed,O
by,O
or,O
for,O
the,O
benefit,O
of,O
the,O
Company,O
or,O
any,O
Subsidiary,O
of,O
the,O
Company,O
for,O
the,O
purpose,O
of,O
(,O
i,O
),O
financing,O
or,O
refinancing,O
",",O
leasing,O
",",O
selling,O
or,O
securitizing,O
Vehicles,O
or,O
related,O
receivables,O
and,O
which,O
finances,O
",",O
refinances,O
or,O
securitizes,O
Vehicles,O
or,O
related,O
receivables,O
of,O
",",O
leases,O
Vehicles,O
to,O
or,O
purchases,O
Vehicles,O
or,O
related,O
receivables,O
from,O
the,O
Company,O
or,O
any,O
Subsidiary,O
of,O
the,O
Company,O
;,O
or,O
(,O
ii,O
),O
financing,O
or,O
refinancing,O
consumer,O
receivables,O
",",O
leases,O
",",O
loans,O
or,O
retail,O
installment,O
contracts,O
.,O
,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
means,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
or,O
any,O
successor,O
statute,O
",",O
and,O
the,O
rules,O
and,O
regulations,O
promulgated,O
by,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
thereunder,O
.,O
,O
Generally,I-LEGISLATION/ACT
Accepted,I-LEGISLATION/ACT
Accounting,I-LEGISLATION/ACT
Principles,I-LEGISLATION/ACT
or,O
GAAP,I-LEGISLATION/ACT
means,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
interpretations,I-LEGISLATION/ACT
thereof,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
consistently,O
applied,O
",",O
which,O
are,O
in,O
effect,O
at,O
the,O
time,O
of,O
the,O
relevant,O
calculation,O
.,O
,O
Guarantee,O
means,O
any,O
obligation,O
",",O
contingent,O
or,O
otherwise,O
",",O
of,O
any,O
Person,O
directly,O
or,O
indirectly,O
guaranteeing,O
any,O
Indebtedness,O
of,O
any,O
other,O
Person,O
and,O
any,O
obligation,O
",",O
direct,O
or,O
indirect,O
",",O
contingent,O
or,O
otherwise,O
",",O
of,O
such,O
Person,O
(,O
1,O
),O
to,O
purchase,O
or,O
pay,O
(,O
or,O
advance,O
or,O
supply,O
funds,O
for,O
the,O
purchase,O
or,O
payment,O
of,O
),O
such,O
Indebtedness,O
of,O
such,O
other,O
Person,O
(,O
whether,O
arising,O
by,O
virtue,O
of,O
partnership,O
arrangements,O
",",O
or,O
by,O
agreement,O
to,O
keep,O
well,O
",",O
to,O
purchase,O
assets,O
",",O
goods,O
",",O
securities,O
or,O
services,O
",",O
to,O
take,O
or,O
pay,O
or,O
to,O
maintain,O
financial,O
statement,O
conditions,O
or,O
otherwise,O
),O
or,O
(,O
2,O
),O
entered,O
into,O
for,O
purposes,O
of,O
assuring,O
in,O
any,O
other,O
manner,O
the,O
obligee,O
of,O
such,O
Indebtedness,O
of,O
the,O
payment,O
thereof,O
or,O
to,O
protect,O
such,O
obligee,O
against,O
loss,O
in,O
respect,O
thereof,O
(,O
in,O
whole,O
or,O
in,O
part,O
),O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
term,O
guarantee,O
will,O
not,O
include,O
endorsements,O
for,O
collection,O
or,O
deposit,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
.,O
,O
The,O
term,O
guarantee,O
",",O
when,O
used,O
as,O
a,O
verb,O
",",O
has,O
a,O
correlative,O
meaning,O
.,O
,O
Guarantors,O
means,O
each,O
Domestic,O
Subsidiary,O
of,O
the,O
Company,O
that,O
executes,O
a,O
Subsidiary,O
Guarantee,O
in,O
accordance,O
with,O
the,O
provisions,O
of,O
the,O
indenture,O
",",O
and,O
their,O
respective,O
successors,O
and,O
assigns,O
.,O
,O
Hedging,O
Obligation,O
means,O
the,O
obligations,O
of,O
any,O
Person,O
pursuant,O
to,O
any,O
Interest,O
Rate,O
Agreement,O
or,O
Currency,O
Agreement,O
.,O
,O
Holder,O
means,O
the,O
Person,O
in,O
whose,O
name,O
a,O
note,O
of,O
either,O
series,O
is,O
registered,O
on,O
the,O
security,O
register,O
books,O
.,O
,O
Incur,O
means,O
issue,O
",",O
assume,O
",",O
guarantee,O
or,O
otherwise,O
become,O
liable,O
for,O
Indebtedness,O
.,O
,O
Indebtedness,O
means,O
",",O
with,O
respect,O
to,O
any,O
Person,O
",",O
obligations,O
of,O
such,O
Person,O
for,O
borrowed,O
money,O
(,O
including,O
without,O
limitation,O
",",O
Indebtedness,O
for,O
borrowed,O
money,O
evidenced,O
by,O
notes,O
",",O
bonds,O
",",O
debentures,O
or,O
similar,O
instruments,O
),O
",",O
excluding,O
any,O
trade,O
payables,O
and,O
other,O
current,O
liabilities,O
arising,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
.,O
,O
Interest,O
Rate,O
Agreement,O
means,O
",",O
in,O
respect,O
of,O
a,O
Person,O
",",O
any,O
interest,O
rate,O
swap,O
agreement,O
",",O
interest,O
rate,O
cap,O
agreement,O
or,O
other,O
financial,O
agreement,O
or,O
arrangement,O
designed,O
to,O
protect,O
such,O
Person,O
against,O
fluctuations,O
in,O
interest,O
rates,O
.,O
,O
Issue,O
Date,O
means,O
the,O
original,O
issue,O
date,O
of,O
the,O
notes,O
offered,O
by,O
this,O
prospectus,O
under,O
the,O
indenture,O
.,O
,O
Lien,O
means,O
any,O
mortgage,O
or,O
deed,O
of,O
trust,O
",",O
charge,O
",",O
pledge,O
",",O
lien,O
(,O
statutory,O
or,O
otherwise,O
),O
",",O
privilege,O
",",O
security,O
interest,O
",",O
assignment,O
",",O
deposit,O
",",O
arrangement,O
",",O
easement,O
",",O
hypothecation,O
",",O
claim,O
",",O
preference,O
",",O
priority,O
or,O
other,O
encumbrance,O
upon,O
or,O
with,O
respect,O
to,O
any,O
property,O
of,O
any,O
kind,O
(,O
including,O
any,O
conditional,O
sale,O
",",O
capital,O
lease,O
or,O
other,O
title,O
retention,O
agreement,O
",",O
any,O
leases,O
in,O
the,O
nature,O
thereof,O
",",O
and,O
any,O
agreement,O
to,O
give,O
any,O
security,O
interest,O
),O
",",O
real,O
or,O
Personal,O
",",O
movable,O
or,O
immovable,O
",",O
now,O
owned,O
or,O
hereafter,O
acquired,O
.,O
,O
A,O
Person,O
will,O
be,O
deemed,O
to,O
own,O
subject,O
to,O
a,O
Lien,O
any,O
property,O
which,O
it,O
has,O
acquired,O
or,O
holds,O
subject,O
to,O
the,O
interest,O
of,O
a,O
vendor,O
or,O
lessor,O
under,O
any,O
conditional,O
sale,O
agreement,O
",",O
Capital,O
Lease,O
Obligation,O
or,O
other,O
title,O
retention,O
agreement,O
.,O
,O
Manufacturer,O
means,O
a,O
vehicle,O
manufacturer,O
which,O
is,O
a,O
party,O
to,O
a,O
dealership,O
agreement,O
with,O
the,O
Company,O
or,O
any,O
Subsidiary,O
of,O
the,O
Company,O
.,O
,O
Manufacturers,O
Letter,O
Agreements,O
means,O
each,O
of,O
the,O
following,O
:,O
(,O
i,O
),O
that,O
certain,O
letter,O
dated,O
January,O
30,O
",",O
2006,O
to,O
Mr.,O
Kevin,I-PERSON
Flynn,I-PERSON
of,O
Toyota,I-BUSINESS
Motor,I-BUSINESS
Sales,I-BUSINESS
USA,I-BUSINESS
",",O
which,O
was,O
confirmed,O
and,O
agreed,O
by,O
Ms.,O
Nancy,I-PERSON
Davies,I-PERSON
on,O
behalf,O
of,O
Toyota,I-BUSINESS
Motor,I-BUSINESS
Sales,I-BUSINESS
",",I-BUSINESS
U.S.A.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
(,O
ii,O
),O
that,O
certain,O
letter,O
dated,O
January,O
30,O
",",O
2006,O
to,O
Ms.,O
Olga,I-PERSON
Reisler,I-PERSON
of,O
Nissan,I-BUSINESS
North,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
which,O
was,O
confirmed,O
and,O
agreed,O
by,O
Ms.,O
Reisler,I-PERSON
on,O
behalf,O
of,O
Nissan,I-BUSINESS
North,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
(,O
iii,O
),O
that,O
certain,O
letter,O
dated,O
January,O
30,O
",",O
2006,O
to,O
Mr.,O
Alex,I-PERSON
Larkin,I-PERSON
of,O
Kia,I-BUSINESS
Motors,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
which,O
was,O
confirmed,O
and,O
agreed,O
by,O
Mr.,O
Larkin,I-PERSON
on,O
behalf,O
of,O
Kia,I-BUSINESS
Motors,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
(,O
iv,O
),O
that,O
certain,O
letter,O
dated,O
January,O
30,O
",",O
2006,O
to,O
Ms.,O
Jennifer,I-PERSON
Moneagle,I-PERSON
of,O
Ford,I-BUSINESS
Motor,I-BUSINESS
Company,I-BUSINESS
",",O
which,O
was,O
confirmed,O
and,O
agreed,O
by,O
R.,I-PERSON
Erik,I-PERSON
Peterson,I-PERSON
on,O
behalf,O
of,O
Ford,I-BUSINESS
Motor,I-BUSINESS
Company,I-BUSINESS
and,O
(,O
v,O
),O
that,O
certain,O
letter,O
dated,O
February,O
23,O
",",O
2006,O
to,O
Ms.,O
Donna,I-PERSON
Parlapiano,I-PERSON
",",O
Vice,O
President,O
",",O
Regional,O
Operations,O
&,O
Industry,O
Relations,O
",",O
of,O
the,O
Company,O
",",O
from,O
BMW,I-BUSINESS
of,I-BUSINESS
North,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
.,I-BUSINESS
,O
Maturity,O
means,O
",",O
when,O
used,O
with,O
respect,O
to,O
the,O
notes,O
",",O
the,O
date,O
on,O
which,O
the,O
principal,O
of,O
the,O
notes,O
becomes,O
due,O
and,O
payable,O
as,O
therein,O
provided,O
or,O
as,O
provided,O
in,O
the,O
indenture,O
",",O
whether,O
at,O
Stated,O
Maturity,O
or,O
the,O
redemption,O
date,O
and,O
whether,O
by,O
declaration,O
of,O
acceleration,O
",",O
Change,O
of,O
Control,O
Offer,O
in,O
respect,O
of,O
a,O
Change,O
of,O
Control,O
",",O
call,O
for,O
redemption,O
or,O
otherwise,O
.,O
,O
Mortgage,O
Facilities,O
means,O
one,O
or,O
more,O
debt,O
facilities,O
in,O
each,O
case,O
with,O
banks,O
",",O
manufacturers,O
and/or,O
other,O
entities,O
providing,O
for,O
borrowings,O
secured,O
primarily,O
by,O
real,O
property,O
in,O
each,O
case,O
as,O
amended,O
",",O
restated,O
",",O
modified,O
",",O
renewed,O
",",O
refunded,O
",",O
replaced,O
or,O
refinanced,O
in,O
whole,O
or,O
in,O
part,O
from,O
time,O
to,O
time,O
;,O
provided,O
",",O
that,O
the,O
value,O
of,O
the,O
security,O
securing,O
such,O
debt,O
facilities,O
shall,O
not,O
",",O
at,O
the,O
time,O
such,O
debt,O
facilities,O
are,O
entered,O
into,O
",",O
exceed,O
100,O
%,O
of,O
the,O
aggregate,O
principal,O
amount,O
of,O
the,O
Indebtedness,O
in,O
respect,O
of,O
such,O
debt,O
facilities,O
.,O
,O
Offers,O
means,O
the,O
cash,O
tender,O
offers,O
to,O
purchase,O
any,O
and,O
all,O
of,O
the,O
Company,O
s,O
outstanding,O
(,O
i,O
),O
Floating,O
Rate,O
Notes,O
and,O
(,O
ii,O
),O
Fixed,O
Rate,O
Notes,O
pursuant,O
to,O
the,O
terms,O
of,O
the,O
Offer,O
to,O
Purchase,O
and,O
Consent,O
Solicitation,O
Statement,O
dated,O
March,O
31,O
",",O
2010,O
and,O
the,O
related,O
Letter,O
of,O
Transmittal,O
and,O
Consent,O
",",O
as,O
each,O
may,O
be,O
amended,O
or,O
supplemented,O
.,O
,O
Permitted,O
Holders,O
means,O
ESL,I-BUSINESS
Investments,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
any,O
Person,O
controlling,O
",",O
controlled,O
by,O
",",O
or,O
under,O
common,O
control,O
with,O
",",O
ESL,I-BUSINESS
Investments,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
Person,O
means,O
any,O
individual,O
",",O
corporation,O
",",O
limited,O
liability,O
company,O
",",O
partnership,O
",",O
joint,O
venture,O
",",O
association,O
",",O
joint-stock,O
company,O
",",O
trust,O
",",O
unincorporated,O
organization,O
or,O
government,O
or,O
any,O
agency,O
or,O
political,O
subdivision,O
thereof,O
.,O
,O
Preferred,O
Stock,O
means,O
",",O
with,O
respect,O
to,O
any,O
Person,O
",",O
any,O
Capital,O
Stock,O
of,O
any,O
class,O
or,O
classes,O
(,O
however,O
designated,O
),O
which,O
is,O
preferred,O
as,O
to,O
the,O
payment,O
of,O
dividends,O
or,O
distributions,O
",",O
or,O
as,O
to,O
the,O
distribution,O
of,O
assets,O
upon,O
any,O
voluntary,O
or,O
involuntary,O
liquidation,O
or,O
dissolution,O
of,O
such,O
Person,O
",",O
over,O
the,O
Capital,O
Stock,O
of,O
any,O
other,O
class,O
in,O
such,O
Person,O
.,O
,O
Principal,O
Property,O
means,O
any,O
building,O
",",O
structure,O
or,O
other,O
facility,O
located,O
within,O
the,O
United,I-LOCATION
States,I-LOCATION
(,O
other,O
than,O
its,O
territories,O
and,O
possessions,O
),O
and,O
owned,O
by,O
the,O
Company,O
or,O
any,O
Domestic,O
Subsidiary,O
",",O
the,O
book,O
value,O
of,O
which,O
is,O
not,O
less,O
than,O
0.5,O
%,O
of,O
the,O
Company,O
s,O
Consolidated,O
Net,O
Tangible,O
Assets,O
.,O
,O
For,O
purposes,O
of,O
this,O
definition,O
",",O
book,O
value,O
will,O
be,O
measured,O
at,O
the,O
time,O
the,O
relevant,O
Lien,O
is,O
being,O
created,O
or,O
",",O
in,O
the,O
case,O
of,O
any,O
Lien,O
incurred,O
pursuant,O
to,O
the,O
fourth,O
paragraph,O
under,O
Covenants,O
Limitation,O
on,O
Liens,O
",",O
at,O
the,O
time,O
the,O
relevant,O
secured,O
Indebtedness,O
is,O
deemed,O
to,O
be,O
incurred,O
.,O
,O
The,O
term,O
Principal,O
Property,O
does,O
not,O
include,O
any,O
building,O
",",O
structure,O
or,O
other,O
facility,O
that,O
our,O
board,O
of,O
directors,O
declares,O
by,O
resolution,O
not,O
to,O
be,O
of,O
material,O
importance,O
to,O
the,O
total,O
business,O
conducted,O
by,O
us,O
and,O
our,O
Domestic,O
Subsidiaries,O
taken,O
as,O
a,O
whole,O
.,O
,O
Significant,O
Subsidiary,O
means,O
any,O
Subsidiary,O
which,O
is,O
a,O
significant,O
subsidiary,O
within,O
the,O
meaning,O
of,O
Rule,O
405,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Stated,O
Maturity,O
means,O
",",O
when,O
used,O
with,O
respect,O
to,O
any,O
Indebtedness,O
or,O
any,O
installment,O
of,O
interest,O
thereon,O
",",O
the,O
dates,O
specified,O
in,O
such,O
Indebtedness,O
as,O
the,O
fixed,O
date,O
on,O
which,O
the,O
principal,O
of,O
such,O
Indebtedness,O
or,O
such,O
installment,O
of,O
interest,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
is,O
due,O
and,O
payable,O
.,O
,O
Subsidiary,O
means,O
",",O
with,O
respect,O
to,O
any,O
Person,O
(,O
the,O
parent,O
),O
at,O
any,O
date,O
",",O
any,O
corporation,O
",",O
limited,O
liability,O
company,O
",",O
partnership,O
",",O
association,O
or,O
other,O
entity,O
of,O
which,O
a,O
majority,O
of,O
the,O
shares,O
or,O
securities,O
or,O
other,O
interests,O
having,O
ordinary,O
voting,O
power,O
for,O
the,O
election,O
of,O
directors,O
or,O
another,O
governing,O
body,O
(,O
other,O
than,O
securities,O
or,O
interests,O
having,O
such,O
power,O
only,O
by,O
reason,O
of,O
the,O
happening,O
of,O
a,O
contingency,O
),O
are,O
at,O
the,O
time,O
beneficially,O
owned,O
directly,O
or,O
indirectly,O
through,O
one,O
or,O
more,O
intermediaries,O
",",O
or,O
both,O
",",O
by,O
the,O
parent,O
.,O
,O
Vehicle,O
Inventory,O
Indebtedness,O
means,O
Indebtedness,O
(,O
including,O
pursuant,O
to,O
a,O
commercial,O
paper,O
program,O
),O
incurred,O
by,O
the,O
Company,O
",",O
any,O
Subsidiary,O
of,O
the,O
Company,O
or,O
any,O
Eligible,O
Special,O
Purpose,O
Entity,O
to,O
purchase,O
",",O
lease,O
",",O
finance,O
or,O
refinance,O
or,O
guaranty,O
the,O
purchasing,O
",",O
leasing,O
",",O
financing,O
or,O
refinancing,O
of,O
Vehicles,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
of,O
the,O
Company,O
and,O
its,O
Subsidiaries,O
or,O
related,O
receivables,O
",",O
which,O
Indebtedness,O
(,O
x,O
),O
is,O
secured,O
by,O
the,O
Vehicles,O
or,O
related,O
receivables,O
so,O
financed,O
",",O
to,O
the,O
extent,O
",",O
at,O
any,O
date,O
of,O
determination,O
thereof,O
",",O
the,O
amount,O
of,O
such,O
Indebtedness,O
does,O
not,O
exceed,O
the,O
depreciated,O
book,O
value,O
of,O
such,O
Vehicles,O
or,O
the,O
book,O
value,O
of,O
such,O
related,O
receivables,O
as,O
determined,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
applied,O
on,O
a,O
consistent,O
basis,O
or,O
(,O
y,O
),O
is,O
unsecured,O
and,O
provides,O
for,O
a,O
borrowing,O
base,O
which,O
may,O
not,O
exceed,O
85,O
%,O
of,O
the,O
value,O
of,O
such,O
Vehicles,O
.,O
,O
Vehicle,O
Receivables,O
Indebtedness,O
means,O
Indebtedness,O
(,O
including,O
pursuant,O
to,O
a,O
commercial,O
paper,O
program,O
),O
incurred,O
by,O
any,O
Eligible,O
Special,O
Purpose,O
Entity,O
to,O
finance,O
",",O
refinance,O
or,O
guaranty,O
the,O
financing,O
or,O
refinancing,O
of,O
consumer,O
receivables,O
",",O
leases,O
",",O
loans,O
or,O
retail,O
installment,O
contracts,O
incurred,O
in,O
the,O
sale,O
",",O
transfer,O
or,O
lease,O
of,O
Vehicles,O
;,O
provided,O
(,O
x,O
),O
no,O
assets,O
other,O
than,O
the,O
Vehicles,O
",",O
consumer,O
receivables,O
",",O
leases,O
",",O
loans,O
",",O
retail,O
installment,O
contracts,O
or,O
related,O
proceeds,O
(,O
including,O
",",O
without,O
limitation,O
",",O
proceeds,O
from,O
insurance,O
",",O
Vehicles,O
and,O
other,O
obligations,O
under,O
such,O
receivables,O
",",O
leases,O
",",O
loans,O
or,O
retail,O
installment,O
contracts,O
),O
to,O
be,O
financed,O
or,O
refinanced,O
secure,O
such,O
Indebtedness,O
;,O
and,O
(,O
y,O
),O
neither,O
the,O
Company,O
nor,O
any,O
of,O
its,O
other,O
Subsidiaries,O
shall,O
incur,O
any,O
liability,O
with,O
respect,O
to,O
such,O
Indebtedness,O
other,O
than,O
liability,O
arising,O
by,O
reason,O
of,O
(,O
1,O
),O
a,O
breach,O
of,O
a,O
representation,O
or,O
warranty,O
or,O
customary,O
indemnities,O
",",O
in,O
each,O
case,O
contained,O
in,O
any,O
instrument,O
relating,O
to,O
such,O
Indebtedness,O
or,O
(,O
2,O
),O
customary,O
interests,O
retained,O
by,O
the,O
Company,O
and/or,O
its,O
Restricted,O
Subsidiaries,O
in,O
such,O
Indebtedness,O
.,O
,O
Vehicles,O
means,O
all,O
now,O
existing,O
or,O
hereafter,O
acquired,O
new,O
and,O
used,O
automobiles,O
",",O
sport,O
utility,O
vehicles,O
",",O
trucks,O
and,O
vans,O
of,O
all,O
types,O
and,O
descriptions,O
",",O
whether,O
held,O
for,O
sale,O
",",O
lease,O
",",O
rental,O
or,O
operational,O
purposes,O
",",O
which,O
relate,O
to,O
the,O
Company,O
s,O
or,O
any,O
Subsidiary,O
s,O
Automobile,O
Retailing,O
Activities,O
.,O
,O
Book-entry,O
Issuance,O
The,O
notes,O
will,O
be,O
represented,O
by,O
one,O
or,O
more,O
global,O
notes,O
that,O
will,O
be,O
deposited,O
with,O
and,O
registered,O
in,O
the,O
name,O
of,O
The,I-BUSINESS
Depository,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
",",O
or,O
DTC,I-BUSINESS
",",O
or,O
its,O
nominee,O
.,O
,O
We,O
will,O
not,O
issue,O
certificated,O
notes,O
to,O
you,O
",",O
except,O
in,O
the,O
limited,O
circumstances,O
described,O
below,O
.,O
,O
Each,O
global,O
note,O
will,O
be,O
issued,O
to,O
DTC,I-BUSINESS
",",O
which,O
will,O
keep,O
a,O
computerized,O
record,O
of,O
its,O
participants,O
whose,O
clients,O
have,O
purchased,O
the,O
notes,O
.,O
,O
Each,O
participant,O
will,O
then,O
keep,O
a,O
record,O
of,O
its,O
own,O
clients,O
.,O
,O
Unless,O
it,O
is,O
exchanged,O
in,O
whole,O
or,O
in,O
part,O
for,O
a,O
certificated,O
note,O
",",O
a,O
global,O
note,O
may,O
not,O
be,O
transferred,O
.,O
,O
DTC,I-BUSINESS
",",O
its,O
nominees,O
and,O
their,O
successors,O
may,O
",",O
however,O
",",O
transfer,O
a,O
global,O
note,O
as,O
a,O
whole,O
to,O
one,O
another,O
",",O
and,O
these,O
transfers,O
are,O
required,O
to,O
be,O
recorded,O
on,O
our,O
records,O
or,O
a,O
register,O
to,O
be,O
maintained,O
by,O
the,O
trustee,O
.,O
,O
Beneficial,O
interests,O
in,O
a,O
global,O
note,O
will,O
be,O
shown,O
on,O
",",O
and,O
transfers,O
of,O
beneficial,O
interests,O
in,O
the,O
global,O
note,O
will,O
be,O
made,O
only,O
through,O
",",O
records,O
maintained,O
by,O
DTC,O
and,O
its,O
participants,O
.,O
,O
DTC,I-BUSINESS
has,O
provided,O
us,O
with,O
the,O
following,O
information,O
:,O
DTC,I-BUSINESS
is,O
a,O
limited,O
purpose,O
trust,O
company,O
organized,O
under,O
the,O
New,I-LEGISLATION/ACT
York,I-LEGISLATION/ACT
Banking,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
",",O
a,O
banking,O
organization,O
within,O
the,O
meaning,O
of,O
the,O
New,I-LEGISLATION/ACT
York,I-LEGISLATION/ACT
Banking,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
",",O
a,O
member,O
of,O
the,O
Federal,I-GOVERNMENT
Reserve,I-GOVERNMENT
System,I-GOVERNMENT
",",O
a,O
clearing,O
corporation,O
within,O
the,O
meaning,O
of,O
the,O
New,I-LEGISLATION/ACT
York,I-LEGISLATION/ACT
Uniform,I-LEGISLATION/ACT
Commercial,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
and,O
a,O
clearing,O
agency,O
registered,O
under,O
the,O
provisions,O
of,O
Section,O
17A,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
DTC,I-BUSINESS
holds,O
securities,O
that,O
its,O
direct,O
participants,O
deposit,O
with,O
DTC,I-BUSINESS
.,O
,O
DTC,I-BUSINESS
also,O
records,O
the,O
settlements,O
among,O
direct,O
participants,O
of,O
securities,O
transactions,O
",",O
such,O
as,O
transfers,O
and,O
pledges,O
",",O
in,O
deposited,O
securities,O
through,O
computerized,O
records,O
for,O
direct,O
participants,O
accounts,O
.,O
,O
This,O
book-entry,O
system,O
eliminates,O
the,O
need,O
to,O
exchange,O
certificated,O
securities,O
.,O
,O
Direct,O
participants,O
include,O
securities,O
brokers,O
and,O
dealers,O
",",O
banks,O
",",O
trust,O
companies,O
",",O
clearing,O
corporations,O
and,O
certain,O
other,O
organizations,O
.,O
,O
DTC,I-BUSINESS
s,O
book-entry,O
system,O
is,O
also,O
used,O
by,O
other,O
organizations,O
such,O
as,O
securities,O
brokers,O
and,O
dealers,O
",",O
banks,O
and,O
trust,O
companies,O
that,O
work,O
through,O
a,O
direct,O
participant,O
.,O
,O
The,O
rules,O
that,O
apply,O
to,O
DTC,O
and,O
its,O
participants,O
are,O
on,O
file,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
When,O
you,O
purchase,O
notes,O
through,O
the,O
DTC,I-BUSINESS
system,O
",",O
the,O
purchases,O
must,O
be,O
made,O
by,O
or,O
through,O
a,O
direct,O
participant,O
",",O
which,O
will,O
receive,O
credit,O
for,O
the,O
notes,O
on,O
DTC,I-BUSINESS
s,O
records,O
.,O
,O
When,O
you,O
actually,O
purchase,O
the,O
notes,O
",",O
you,O
will,O
become,O
their,O
beneficial,O
owner,O
.,O
,O
Your,O
ownership,O
interest,O
will,O
be,O
recorded,O
only,O
on,O
the,O
direct,O
or,O
indirect,O
participants,O
records,O
.,O
,O
DTC,I-BUSINESS
will,O
have,O
no,O
knowledge,O
of,O
your,O
individual,O
ownership,O
of,O
the,O
notes,O
.,O
,O
DTC,I-BUSINESS
s,O
records,O
will,O
show,O
only,O
the,O
identity,O
of,O
the,O
direct,O
participants,O
and,O
the,O
principal,O
amount,O
of,O
the,O
notes,O
held,O
by,O
or,O
through,O
them,O
.,O
,O
You,O
will,O
not,O
receive,O
a,O
written,O
confirmation,O
of,O
your,O
purchase,O
or,O
sale,O
or,O
any,O
periodic,O
account,O
statement,O
directly,O
from,O
DTC,I-BUSINESS
.,O
,O
You,O
should,O
instead,O
receive,O
these,O
from,O
your,O
direct,O
or,O
indirect,O
participant,O
.,O
,O
As,O
a,O
result,O
",",O
the,O
direct,O
or,O
indirect,O
participants,O
are,O
responsible,O
for,O
keeping,O
accurate,O
account,O
of,O
the,O
holdings,O
of,O
their,O
customers,O
.,O
,O
The,O
trustee,O
will,O
wire,O
payments,O
on,O
the,O
notes,O
to,O
DTC,I-BUSINESS
s,O
nominee,O
.,O
,O
We,O
and,O
the,O
trustee,O
will,O
treat,O
DTC,I-BUSINESS
s,O
nominee,O
as,O
the,O
owner,O
of,O
each,O
global,O
note,O
for,O
all,O
purposes,O
.,O
,O
Accordingly,O
",",O
we,O
",",O
the,O
trustee,O
and,O
any,O
paying,O
agent,O
will,O
have,O
no,O
direct,O
responsibility,O
or,O
liability,O
to,O
pay,O
amounts,O
due,O
on,O
a,O
global,O
note,O
to,O
you,O
or,O
any,O
other,O
beneficial,O
owners,O
in,O
that,O
global,O
note,O
.,O
,O
It,O
is,O
DTC,I-BUSINESS
s,O
current,O
practice,O
",",O
upon,O
receipt,O
of,O
any,O
payment,O
of,O
distributions,O
or,O
liquidation,O
amounts,O
",",O
to,O
proportionately,O
credit,O
direct,O
participants,O
accounts,O
on,O
the,O
payment,O
date,O
based,O
on,O
their,O
holdings,O
.,O
,O
In,O
addition,O
",",O
it,O
is,O
DTC,I-BUSINESS
s,O
current,O
practice,O
to,O
pass,O
through,O
any,O
consenting,O
or,O
voting,O
rights,O
to,O
such,O
participants,O
by,O
using,O
an,O
omnibus,O
proxy,O
.,O
,O
Those,O
participants,O
will,O
",",O
in,O
turn,O
",",O
make,O
payments,O
to,O
and,O
solicit,O
votes,O
from,O
you,O
",",O
the,O
ultimate,O
owner,O
of,O
notes,O
",",O
based,O
on,O
their,O
customary,O
practices,O
.,O
,O
Payments,O
to,O
you,O
will,O
be,O
the,O
responsibility,O
of,O
the,O
participants,O
and,O
not,O
of,O
DTC,I-BUSINESS
",",O
the,O
trustee,O
or,O
the,O
Company,O
.,O
,O
Notes,O
represented,O
by,O
one,O
or,O
more,O
global,O
notes,O
will,O
be,O
exchangeable,O
for,O
certificated,O
notes,O
with,O
the,O
same,O
terms,O
in,O
authorized,O
denominations,O
only,O
if,O
:,O
,O
If,O
a,O
global,O
note,O
is,O
exchanged,O
for,O
certificated,O
notes,O
",",O
the,O
trustee,O
will,O
keep,O
the,O
registration,O
books,O
for,O
the,O
notes,O
at,O
its,O
corporate,O
office,O
and,O
follow,O
customary,O
practices,O
and,O
procedures,O
regarding,O
those,O
certificated,O
notes,O
.,O
,O
The,O
following,O
summary,O
describes,O
the,O
material,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
considerations,O
of,O
the,O
acquisition,O
",",O
ownership,O
and,O
disposition,O
of,O
the,O
notes,O
as,O
of,O
the,O
date,O
hereof,O
to,O
non-U.S.,I-MISCELLANEOUS
holders,O
that,O
acquire,O
notes,O
for,O
cash,O
at,O
their,O
original,O
issue,O
price,O
pursuant,O
to,O
this,O
offer,O
.,O
,O
The,O
summary,O
is,O
based,O
on,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1986,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Code,O
),O
",",O
Treasury,I-LEGISLATION/ACT
Regulations,I-LEGISLATION/ACT
",",O
judicial,O
decisions,O
",",O
published,O
positions,O
of,O
the,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
(,O
IRS,I-GOVERNMENT
),O
",",O
and,O
other,O
applicable,O
authorities,O
",",O
all,O
as,O
in,O
effect,O
as,O
of,O
the,O
date,O
hereof,O
and,O
all,O
of,O
which,O
are,O
subject,O
to,O
change,O
or,O
differing,O
interpretations,O
(,O
possibly,O
with,O
retroactive,O
effect,O
),O
.,O
,O
The,O
discussion,O
does,O
not,O
address,O
all,O
of,O
the,O
tax,O
consequences,O
that,O
may,O
be,O
relevant,O
to,O
a,O
particular,O
person,O
or,O
to,O
persons,O
subject,O
to,O
special,O
treatment,O
under,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
laws,O
(,O
such,O
as,O
financial,O
institutions,O
",",O
broker,O
dealers,O
",",O
insurance,O
companies,O
",",O
regulated,O
investment,O
companies,O
",",O
real,O
estate,O
investment,O
trusts,O
",",O
cooperatives,O
",",O
traders,O
in,O
securities,O
who,O
elect,O
to,O
apply,O
a,O
mark-to-market,O
method,O
of,O
accounting,O
",",O
expatriates,O
",",O
tax-exempt,O
organizations,O
",",O
or,O
persons,O
that,O
are,O
",",O
or,O
hold,O
their,O
notes,O
through,O
",",O
partnerships,O
or,O
other,O
pass-through,O
entities,O
),O
",",O
or,O
to,O
persons,O
who,O
hold,O
the,O
notes,O
as,O
part,O
of,O
a,O
straddle,O
",",O
hedge,O
",",O
conversion,O
",",O
synthetic,O
security,O
",",O
or,O
constructive,O
sale,O
transaction,O
for,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
purposes,O
",",O
all,O
of,O
whom,O
may,O
be,O
subject,O
to,O
tax,O
rules,O
that,O
differ,O
from,O
those,O
summarized,O
below,O
.,O
,O
In,O
addition,O
",",O
this,O
discussion,O
does,O
not,O
address,O
the,O
consequences,O
of,O
any,O
state,O
",",O
local,O
",",O
non-U.S.,I-MISCELLANEOUS
tax,O
consequences,O
",",O
any,O
U.S.,I-LOCATION
tax,O
consequences,O
related,O
to,O
any,O
currency,O
other,O
than,O
the,O
U.S.,I-LOCATION
dollar,O
or,O
any,O
tax,O
consequences,O
other,O
than,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
consequences,O
.,O
,O
This,O
summary,O
deals,O
only,O
with,O
persons,O
who,O
hold,O
the,O
notes,O
as,O
capital,O
assets,O
within,O
the,O
meaning,O
of,O
the,O
Code,O
(,O
generally,O
",",O
property,O
held,O
for,O
investment,O
),O
.,O
,O
Holders,O
are,O
urged,O
to,O
consult,O
their,O
tax,O
advisors,O
as,O
to,O
the,O
particular,O
U.S.,I-LOCATION
federal,O
tax,O
consequences,O
to,O
them,O
of,O
the,O
acquisition,O
",",O
ownership,O
and,O
disposition,O
of,O
notes,O
",",O
as,O
well,O
as,O
the,O
effects,O
of,O
state,O
",",O
local,O
and,O
non-U.S.,I-MISCELLANEOUS
.,O
,O
For,O
purposes,O
of,O
this,O
summary,O
",",O
a,O
non-U.S.,I-MISCELLANEOUS
holder,O
means,O
any,O
beneficial,O
owner,O
(,O
other,O
than,O
a,O
partnership,O
or,O
other,O
pass-through,O
entity,O
for,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
purposes,O
),O
that,O
is,O
not,O
a,O
U.S.,I-LOCATION
holder,O
means,O
a,O
beneficial,O
owner,O
of,O
a,O
note,O
(,O
as,O
determined,O
for,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
purposes,O
),O
that,O
is,O
",",O
or,O
is,O
treated,O
as,O
",",O
a,O
citizen,O
or,O
individual,O
resident,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
a,O
corporation,O
created,O
or,O
organized,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
or,O
under,O
the,O
laws,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
or,O
any,O
political,O
subdivision,O
thereof,O
",",O
an,O
estate,O
the,O
income,O
of,O
which,O
is,O
subject,O
to,O
U.S.,I-LOCATION
federal,O
income,O
taxation,O
regardless,O
of,O
its,O
source,O
",",O
or,O
a,O
trust,O
if,O
(,O
i,O
),O
a,O
court,O
within,O
the,O
United,I-LOCATION
States,I-LOCATION
is,O
able,O
to,O
exercise,O
primary,O
supervision,O
over,O
the,O
administration,O
of,O
the,O
trust,O
and,O
one,O
or,O
more,O
U.S.,I-LOCATION
persons,O
have,O
the,O
authority,O
to,O
control,O
all,O
substantial,O
decisions,O
of,O
the,O
trust,O
",",O
or,O
(,O
ii,O
),O
the,O
trust,O
has,O
a,O
valid,O
election,O
in,O
effect,O
to,O
be,O
treated,O
as,O
a,O
U.S.,I-LOCATION
,O
If,O
a,O
partnership,O
(,O
including,O
any,O
entity,O
treated,O
as,O
a,O
partnership,O
or,O
other,O
pass-through,O
entity,O
for,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
purposes,O
),O
is,O
a,O
holder,O
of,O
a,O
note,O
",",O
the,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
treatment,O
of,O
a,O
partner,O
in,O
the,O
partnership,O
generally,O
will,O
depend,O
on,O
the,O
status,O
of,O
the,O
partner,O
and,O
the,O
activities,O
of,O
such,O
partnership,O
.,O
,O
Partners,O
and,O
partnerships,O
should,O
consult,O
their,O
tax,O
advisors,O
as,O
to,O
the,O
particular,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
consequences,O
applicable,O
to,O
them,O
.,O
,O
holder,O
generally,O
will,O
not,O
be,O
subject,O
to,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
on,O
interest,O
paid,O
or,O
accrued,O
on,O
a,O
note,O
if,O
the,O
interest,O
is,O
not,O
effectively,O
connected,O
with,O
a,O
U.S.,I-LOCATION
trade,O
or,O
business,O
(,O
or,O
",",O
in,O
the,O
case,O
of,O
certain,O
tax,O
treaties,O
",",O
is,O
not,O
attributable,O
to,O
a,O
permanent,O
establishment,O
or,O
fixed,O
base,O
within,O
the,O
United,I-LOCATION
States,I-LOCATION
),O
.,O
,O
In,O
addition,O
",",O
subject,O
to,O
the,O
discussion,O
of,O
backup,O
withholding,O
below,O
",",O
a,O
non-U.S.,I-MISCELLANEOUS
holder,O
generally,O
will,O
not,O
be,O
subject,O
to,O
U.S.,I-LOCATION
withholding,O
tax,O
on,O
interest,O
paid,O
on,O
a,O
note,O
",",O
provided,O
that,O
the,O
non-U.S.,I-MISCELLANEOUS
(,O
4,O
),O
certifies,O
to,O
its,O
non-U.S.,I-MISCELLANEOUS
status,O
on,O
IRS,I-GOVERNMENT
Form,B-MISCELLANEOUS
W-8,I-MISCELLANEOUS
BEN,I-MISCELLANEOUS
(,O
or,O
other,O
applicable,O
Form,I-MISCELLANEOUS
W-8,I-MISCELLANEOUS
),O
.,O
,O
Alternatively,O
",",O
a,O
non-U.S.,I-MISCELLANEOUS
holder,O
that,O
can,O
not,O
satisfy,O
the,O
above,O
requirements,O
generally,O
will,O
be,O
exempt,O
from,O
U.S.,I-LOCATION
federal,O
withholding,O
tax,O
with,O
respect,O
to,O
interest,O
paid,O
on,O
the,O
notes,O
if,O
the,O
holder,O
establishes,O
that,O
such,O
interest,O
is,O
not,O
subject,O
to,O
withholding,O
tax,O
because,O
it,O
is,O
effectively,O
connected,O
with,O
the,O
non-U.S.,I-MISCELLANEOUS
holder,O
s,O
conduct,O
of,O
a,O
trade,O
or,O
business,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
(,O
generally,O
",",O
by,O
providing,O
an,O
IRS,I-GOVERNMENT
Form,B-MISCELLANEOUS
W-8ECI,I-MISCELLANEOUS
),O
.,O
,O
However,O
",",O
to,O
the,O
extent,O
that,O
such,O
interest,O
is,O
effectively,O
connected,O
with,O
the,O
non-U.S.,I-MISCELLANEOUS
holder,O
s,O
conduct,O
of,O
a,O
trade,O
or,O
business,O
(,O
and,O
",",O
in,O
the,O
case,O
of,O
certain,O
tax,O
treaties,O
",",O
is,O
attributable,O
to,O
a,O
permanent,O
establishment,O
or,O
fixed,O
base,O
within,O
the,O
United,I-LOCATION
States,I-LOCATION
),O
",",O
the,O
non-U.S.,I-MISCELLANEOUS
holder,O
generally,O
will,O
be,O
subject,O
to,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
on,O
a,O
net,O
basis,O
and,O
",",O
if,O
it,O
is,O
a,O
foreign,O
corporation,O
",",O
may,O
be,O
subject,O
to,O
a,O
30,O
%,O
U.S.,I-LOCATION
branch,O
profits,O
tax,O
(,O
or,O
lower,O
applicable,O
treaty,O
rate,O
),O
.,O
,O
If,O
a,O
non-U.S.,I-MISCELLANEOUS
holder,O
does,O
not,O
satisfy,O
the,O
requirements,O
described,O
above,O
",",O
and,O
does,O
not,O
establish,O
that,O
the,O
interest,O
is,O
effectively,O
connected,O
with,O
the,O
non-U.S.,I-MISCELLANEOUS
holder,O
s,O
conduct,O
of,O
a,O
trade,O
or,O
business,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
the,O
non-U.S.,I-MISCELLANEOUS
holder,O
generally,O
will,O
be,O
subject,O
to,O
U.S.,I-LOCATION
withholding,O
tax,O
",",O
currently,O
imposed,O
at,O
30,O
%,O
.,O
,O
Under,O
certain,O
income,O
tax,O
treaties,O
",",O
the,O
U.S.,I-LOCATION
withholding,O
rate,O
on,O
payments,O
of,O
interest,O
may,O
be,O
reduced,O
or,O
eliminated,O
",",O
provided,O
the,O
non-U.S.,I-MISCELLANEOUS
holder,O
complies,O
with,O
the,O
applicable,O
certification,O
requirements,O
(,O
generally,O
",",O
by,O
providing,O
a,O
properly,O
completed,O
IRS,I-GOVERNMENT
Form,B-MISCELLANEOUS
W-8,I-MISCELLANEOUS
BEN,I-MISCELLANEOUS
),O
.,O
,O
Subject,O
to,O
the,O
discussion,O
below,O
regarding,O
backup,O
withholding,O
",",O
a,O
non-U.S.,I-MISCELLANEOUS
holder,O
generally,O
will,O
not,O
be,O
subject,O
to,O
U.S.,I-LOCATION
federal,O
income,O
taxation,O
with,O
respect,O
to,O
gain,O
realized,O
on,O
the,O
sale,O
",",O
exchange,O
",",O
redemption,O
or,O
other,O
disposition,O
of,O
a,O
note,O
",",O
unless,O
(,O
1,O
),O
the,O
gain,O
is,O
effectively,O
connected,O
with,O
the,O
non-U.S.,I-MISCELLANEOUS
holder,O
s,O
conduct,O
of,O
a,O
U.S.,I-LOCATION
trade,O
or,O
business,O
(,O
and,O
",",O
in,O
the,O
case,O
of,O
certain,O
tax,O
treaties,O
",",O
the,O
gain,O
is,O
attributable,O
to,O
a,O
permanent,O
establishment,O
or,O
fixed,O
base,O
within,O
the,O
United,I-LOCATION
States,I-LOCATION
),O
;,O
or,O
(,O
2,O
),O
in,O
the,O
case,O
of,O
an,O
individual,O
",",O
such,O
individual,O
is,O
present,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
for,O
183,O
days,O
or,O
more,O
during,O
the,O
taxable,O
year,O
in,O
which,O
gain,O
is,O
realized,O
and,O
certain,O
other,O
conditions,O
are,O
met,O
.,O
,O
Information,O
reporting,O
and,O
backup,O
withholding,O
.,O
,O
holder,O
may,O
be,O
subject,O
to,O
information,O
reporting,O
with,O
respect,O
to,O
interest,O
paid,O
or,O
accrued,O
on,O
a,O
note,O
",",O
the,O
amount,O
of,O
tax,O
",",O
if,O
any,O
",",O
withheld,O
with,O
respect,O
to,O
those,O
payments,O
and,O
with,O
respect,O
to,O
amounts,O
realized,O
on,O
the,O
disposition,O
of,O
a,O
note,O
.,O
,O
holder,O
not,O
subject,O
to,O
U.S.,I-LOCATION
income,O
tax,O
may,O
nonetheless,O
be,O
subject,O
to,O
backup,O
withholding,O
on,O
interest,O
paid,O
on,O
a,O
note,O
",",O
and,O
with,O
respect,O
to,O
amounts,O
realized,O
on,O
the,O
disposition,O
of,O
a,O
note,O
",",O
unless,O
the,O
non-U.S.,I-MISCELLANEOUS
holder,O
provides,O
the,O
withholding,O
agent,O
with,O
the,O
applicable,O
IRS,I-GOVERNMENT
Form,B-MISCELLANEOUS
W-8,I-MISCELLANEOUS
or,O
otherwise,O
establishes,O
an,O
exemption,O
.,O
,O
holders,O
should,O
consult,O
their,O
tax,O
advisors,O
as,O
to,O
their,O
qualifications,O
for,O
an,O
exemption,O
for,O
backup,O
withholding,O
and,O
the,O
procedure,O
for,O
obtaining,O
such,O
an,O
exemption,O
.,O
,O
Backup,O
withholding,O
is,O
not,O
an,O
additional,O
tax,O
.,O
,O
Any,O
amounts,O
withheld,O
under,O
the,O
backup,O
withholding,O
rules,O
from,O
a,O
payment,O
to,O
a,O
non-U.S.,I-MISCELLANEOUS
holder,O
may,O
be,O
credited,O
against,O
the,O
non-U.S.,I-MISCELLANEOUS
holder,O
s,O
U.S.,I-LOCATION
federal,O
income,O
tax,O
liability,O
",",O
if,O
any,O
",",O
or,O
refunded,O
",",O
if,O
the,O
required,O
information,O
is,O
furnished,O
to,O
the,O
IRS,I-GOVERNMENT
in,O
a,O
timely,O
manner,O
.,O
,O
holders,O
should,O
consult,O
their,O
tax,O
advisors,O
regarding,O
the,O
applicability,O
of,O
the,O
information,O
reporting,O
and,O
backup,O
withholding,O
rules,O
to,O
them,O
.,O
,O
Banc,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
Securities,I-BUSINESS
LLC,I-BUSINESS
is,O
acting,O
as,O
representative,O
of,O
each,O
of,O
the,O
underwriters,O
named,O
below,O
.,O
,O
Subject,O
to,O
the,O
terms,O
and,O
conditions,O
set,O
forth,O
in,O
a,O
firm,O
commitment,O
underwriting,O
agreement,O
among,O
us,O
and,O
the,O
underwriters,O
",",O
we,O
have,O
agreed,O
to,O
sell,O
to,O
the,O
underwriters,O
",",O
and,O
each,O
of,O
the,O
underwriters,O
has,O
agreed,O
",",O
severally,O
and,O
not,O
jointly,O
",",O
to,O
purchase,O
from,O
us,O
",",O
the,O
principal,O
amount,O
of,O
notes,O
set,O
forth,O
opposite,O
its,O
name,O
below,O
.,O
,O
Subject,O
to,O
the,O
terms,O
and,O
conditions,O
set,O
forth,O
in,O
the,O
underwriting,O
agreement,O
",",O
the,O
underwriters,O
have,O
agreed,O
",",O
severally,O
and,O
not,O
jointly,O
",",O
to,O
purchase,O
all,O
of,O
the,O
notes,O
sold,O
under,O
the,O
underwriting,O
agreement,O
if,O
any,O
of,O
these,O
notes,O
are,O
purchased,O
.,O
,O
If,O
an,O
underwriter,O
defaults,O
",",O
the,O
underwriting,O
agreement,O
provides,O
that,O
the,O
purchase,O
commitments,O
of,O
the,O
nondefaulting,O
underwriters,O
may,O
be,O
increased,O
or,O
the,O
underwriting,O
agreement,O
may,O
be,O
terminated,O
.,O
,O
We,O
have,O
agreed,O
to,O
indemnify,O
the,O
underwriters,O
and,O
their,O
controlling,O
persons,O
against,O
certain,O
liabilities,O
in,O
connection,O
with,O
this,O
offering,O
",",O
including,O
liabilities,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
or,O
to,O
contribute,O
to,O
payments,O
the,O
underwriters,O
may,O
be,O
required,O
to,O
make,O
in,O
respect,O
of,O
those,O
liabilities,O
.,O
,O
The,O
underwriters,O
are,O
offering,O
the,O
notes,O
",",O
subject,O
to,O
prior,O
sale,O
",",O
when,O
",",O
as,O
and,O
if,O
issued,O
to,O
and,O
accepted,O
by,O
them,O
",",O
subject,O
to,O
approval,O
of,O
legal,O
matters,O
by,O
their,O
counsel,O
",",O
including,O
the,O
validity,O
of,O
the,O
notes,O
",",O
and,O
other,O
conditions,O
contained,O
in,O
the,O
underwriting,O
agreement,O
",",O
such,O
as,O
the,O
receipt,O
by,O
the,O
underwriters,O
of,O
officer,O
s,O
certificates,O
and,O
legal,O
opinions,O
.,O
,O
The,O
underwriters,O
reserve,O
the,O
right,O
to,O
withdraw,O
",",O
cancel,O
or,O
modify,O
offers,O
to,O
the,O
public,O
and,O
to,O
reject,O
orders,O
in,O
whole,O
or,O
in,O
part,O
.,O
,O
The,O
underwriters,O
may,O
offer,O
and,O
sell,O
notes,O
through,O
certain,O
of,O
their,O
affiliates,O
.,O
,O
Commissions,O
and,O
Discounts,O
The,O
representatives,O
have,O
advised,O
us,O
that,O
the,O
underwriters,O
propose,O
initially,O
to,O
offer,O
the,O
notes,O
to,O
the,O
public,O
at,O
the,O
public,O
offering,O
price,O
set,O
forth,O
on,O
the,O
cover,O
page,O
of,O
this,O
prospectus,O
supplement,O
.,O
,O
After,O
the,O
initial,O
offering,O
",",O
the,O
public,O
offering,O
price,O
or,O
any,O
other,O
term,O
of,O
the,O
offering,O
may,O
be,O
changed,O
.,O
,O
The,O
expenses,O
of,O
the,O
offering,O
",",O
not,O
including,O
the,O
underwriting,O
discount,O
",",O
are,O
estimated,O
at,O
$,O
"900,000",O
and,O
are,O
payable,O
by,O
us,O
.,O
,O
New,O
Issue,O
of,O
Notes,O
The,O
notes,O
are,O
a,O
new,O
issue,O
of,O
securities,O
with,O
no,O
established,O
trading,O
market,O
.,O
,O
We,O
do,O
not,O
intend,O
to,O
apply,O
for,O
listing,O
of,O
the,O
notes,O
on,O
any,O
national,O
securities,O
exchange,O
or,O
for,O
inclusion,O
of,O
the,O
notes,O
on,O
any,O
automated,O
dealer,O
quotation,O
system,O
.,O
,O
We,O
have,O
been,O
advised,O
by,O
the,O
underwriters,O
that,O
they,O
presently,O
intend,O
to,O
make,O
a,O
market,O
in,O
the,O
notes,O
after,O
completion,O
of,O
the,O
offering,O
.,O
,O
market-making,O
activities,O
at,O
any,O
time,O
without,O
any,O
notice,O
.,O
,O
We,O
can,O
not,O
assure,O
the,O
liquidity,O
of,O
the,O
trading,O
market,O
for,O
the,O
notes,O
or,O
that,O
an,O
active,O
public,O
market,O
for,O
the,O
notes,O
will,O
develop,O
.,O
,O
If,O
an,O
active,O
public,O
trading,O
market,O
for,O
the,O
notes,O
does,O
not,O
develop,O
",",O
the,O
market,O
price,O
and,O
liquidity,O
of,O
the,O
notes,O
may,O
be,O
adversely,O
affected,O
.,O
,O
If,O
the,O
notes,O
are,O
traded,O
",",O
they,O
may,O
trade,O
at,O
a,O
discount,O
from,O
their,O
initial,O
offering,O
price,O
",",O
depending,O
on,O
prevailing,O
interest,O
rates,O
",",O
the,O
market,O
for,O
similar,O
securities,O
",",O
our,O
operating,O
performance,O
and,O
financial,O
condition,O
",",O
general,O
economic,O
conditions,O
and,O
other,O
factors,O
.,O
,O
No,O
Sales,O
of,O
Similar,O
Securities,O
We,O
have,O
agreed,O
that,O
we,O
will,O
not,O
",",O
for,O
a,O
period,O
of,O
60,O
days,O
after,O
the,O
date,O
of,O
this,O
prospectus,O
supplement,O
",",O
without,O
first,O
obtaining,O
the,O
prior,O
written,O
consent,O
of,O
Banc,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
Securities,I-BUSINESS
LLC,I-BUSINESS
",",O
directly,O
or,O
indirectly,O
",",O
issue,O
",",O
sell,O
",",O
offer,O
to,O
contract,O
or,O
grant,O
any,O
option,O
to,O
sell,O
",",O
pledge,O
",",O
transfer,O
or,O
otherwise,O
dispose,O
of,O
",",O
any,O
debt,O
securities,O
or,O
securities,O
exchangeable,O
for,O
or,O
convertible,O
into,O
debt,O
securities,O
",",O
except,O
for,O
the,O
notes,O
sold,O
to,O
the,O
underwriters,O
pursuant,O
to,O
the,O
underwriting,O
agreement,O
.,O
,O
Short,O
Positions,O
In,O
connection,O
with,O
the,O
offering,O
",",O
the,O
underwriters,O
may,O
purchase,O
and,O
sell,O
the,O
notes,O
in,O
the,O
open,O
market,O
.,O
,O
These,O
transactions,O
may,O
include,O
short,O
sales,O
and,O
purchases,O
on,O
the,O
open,O
market,O
to,O
cover,O
positions,O
created,O
by,O
short,O
sales,O
.,O
,O
Short,O
sales,O
involve,O
the,O
sale,O
by,O
the,O
underwriters,O
of,O
a,O
greater,O
principal,O
amount,O
of,O
notes,O
than,O
they,O
are,O
required,O
to,O
purchase,O
in,O
the,O
offering,O
.,O
,O
The,O
underwriters,O
must,O
close,O
out,O
any,O
short,O
position,O
by,O
purchasing,O
notes,O
in,O
the,O
open,O
market,O
.,O
,O
A,O
short,O
position,O
is,O
more,O
likely,O
to,O
be,O
created,O
if,O
the,O
underwriters,O
are,O
concerned,O
that,O
there,O
may,O
be,O
downward,O
pressure,O
on,O
the,O
price,O
of,O
the,O
notes,O
in,O
the,O
open,O
market,O
after,O
pricing,O
that,O
could,O
adversely,O
affect,O
investors,O
who,O
purchase,O
in,O
the,O
offering,O
.,O
,O
The,O
underwriters,O
also,O
may,O
impose,O
a,O
penalty,O
bid,O
.,O
,O
This,O
occurs,O
when,O
a,O
particular,O
underwriter,O
repays,O
to,O
the,O
underwriters,O
a,O
portion,O
of,O
the,O
underwriting,O
discount,O
received,O
by,O
it,O
because,O
the,O
representatives,O
have,O
repurchased,O
notes,O
sold,O
by,O
or,O
for,O
the,O
account,O
of,O
such,O
underwriter,O
in,O
stabilizing,O
or,O
short,O
covering,O
transactions,O
.,O
,O
Similar,O
to,O
other,O
purchase,O
transactions,O
",",O
the,O
underwriters,O
purchases,O
to,O
cover,O
the,O
syndicate,O
short,O
sales,O
may,O
have,O
the,O
effect,O
of,O
raising,O
or,O
maintaining,O
the,O
market,O
price,O
of,O
the,O
notes,O
or,O
preventing,O
or,O
retarding,O
a,O
decline,O
in,O
the,O
market,O
price,O
of,O
the,O
notes,O
.,O
,O
As,O
a,O
result,O
",",O
the,O
price,O
of,O
the,O
notes,O
may,O
be,O
higher,O
than,O
the,O
price,O
that,O
might,O
otherwise,O
exist,O
in,O
the,O
open,O
market,O
.,O
,O
Neither,O
we,O
nor,O
any,O
of,O
the,O
underwriters,O
make,O
any,O
representation,O
or,O
prediction,O
as,O
to,O
the,O
direction,O
or,O
magnitude,O
of,O
any,O
effect,O
that,O
the,O
transactions,O
described,O
above,O
may,O
have,O
on,O
the,O
price,O
of,O
the,O
notes,O
.,O
,O
In,O
addition,O
",",O
neither,O
we,O
nor,O
any,O
of,O
the,O
underwriters,O
make,O
any,O
representation,O
that,O
the,O
representatives,O
will,O
engage,O
in,O
these,O
transactions,O
or,O
that,O
these,O
transactions,O
",",O
once,O
commenced,O
",",O
will,O
not,O
be,O
discontinued,O
without,O
notice,O
.,O
,O
Other,O
Relationships,O
The,O
underwriters,O
and,O
their,O
respective,O
affiliates,O
are,O
full,O
service,O
financial,O
institutions,O
engaged,O
in,O
various,O
activities,O
",",O
which,O
may,O
include,O
securities,O
trading,O
",",O
commercial,O
and,O
investment,O
banking,O
",",O
financial,O
advisory,O
",",O
investment,O
management,O
",",O
principal,O
investment,O
",",O
hedging,O
",",O
commodity,O
trading,O
",",O
financing,O
and,O
brokerage,O
activities,O
.,O
,O
Certain,O
of,O
the,O
underwriters,O
and,O
their,O
respective,O
affiliates,O
have,O
",",O
from,O
time,O
to,O
time,O
",",O
performed,O
",",O
and,O
may,O
in,O
the,O
future,O
perform,O
",",O
various,O
financial,O
advisory,O
and,O
investment,O
banking,O
services,O
for,O
us,O
and,O
our,O
affiliates,O
",",O
for,O
which,O
they,O
received,O
or,O
will,O
receive,O
customary,O
fees,O
and,O
expenses,O
.,O
,O
In,O
particular,O
",",O
Banc,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
Securities,I-BUSINESS
LLC,I-BUSINESS
",",O
an,O
affiliate,O
of,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
Inc.,I-BUSINESS
and,O
an,O
affiliate,O
of,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Securities,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
are,O
lenders,O
and/or,O
agents,O
under,O
our,O
existing,O
credit,O
agreement,O
.,O
,O
Banc,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
Securities,I-BUSINESS
LLC,I-BUSINESS
",",I-BUSINESS
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
Inc.,I-BUSINESS
and,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Securities,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
will,O
act,O
as,O
dealer,O
managers,O
and,O
solicitation,O
agents,O
in,O
connection,O
with,O
the,O
tender,O
offers,O
and,O
consent,O
solicitations,O
for,O
the,O
Floating,O
Rate,O
Notes,O
and,O
the,O
Fixed,O
Rate,O
Notes,O
.,O
,O
Additionally,O
",",O
the,O
underwriters,O
and,O
their,O
respective,O
affiliates,O
have,O
",",O
from,O
time,O
to,O
time,O
",",O
performed,O
",",O
and,O
may,O
in,O
the,O
future,O
perform,O
financing,O
services,O
for,O
the,O
Company,O
and,O
its,O
affiliates,O
and,O
may,O
engage,O
in,O
transactions,O
with,O
us,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
.,O
,O
In,O
the,O
ordinary,O
course,O
of,O
their,O
various,O
business,O
activities,O
",",O
the,O
underwriters,O
and,O
their,O
respective,O
affiliates,O
may,O
make,O
or,O
hold,O
a,O
broad,O
array,O
of,O
investments,O
and,O
actively,O
trade,O
debt,O
and,O
equity,O
securities,O
(,O
or,O
related,O
derivative,O
securities,O
),O
and,O
financial,O
instruments,O
(,O
including,O
bank,O
loans,O
),O
for,O
their,O
own,O
account,O
and,O
for,O
the,O
accounts,O
of,O
their,O
customers,O
and,O
may,O
at,O
any,O
time,O
hold,O
long,O
and,O
short,O
positions,O
in,O
such,O
securities,O
and,O
instruments,O
.,O
,O
Such,O
investment,O
and,O
securities,O
activities,O
may,O
involve,O
our,O
securities,O
and,O
instruments,O
.,O
,O
Notice,O
to,O
Prospective,O
Investors,O
in,O
the,O
EEA,I-LOCATION
In,O
relation,O
to,O
each,O
Member,O
State,O
of,O
the,O
European,I-LOCATION
Economic,I-LOCATION
Area,I-LOCATION
which,O
has,O
implemented,O
the,O
Prospectus,O
Directive,O
(,O
each,O
",",O
a,O
Relevant,O
Member,O
State,O
),O
an,O
offer,O
to,O
the,O
public,O
of,O
any,O
notes,O
which,O
are,O
the,O
subject,O
of,O
the,O
offering,O
contemplated,O
by,O
this,O
prospectus,O
supplement,O
may,O
not,O
be,O
made,O
in,O
that,O
Relevant,O
Member,O
State,O
",",O
except,O
that,O
an,O
offer,O
to,O
the,O
public,O
in,O
that,O
Relevant,O
Member,O
State,O
of,O
any,O
notes,O
may,O
be,O
made,O
at,O
any,O
time,O
under,O
the,O
following,O
exemptions,O
under,O
the,O
Prospectus,O
Directive,O
",",O
if,O
they,O
have,O
been,O
implemented,O
in,O
that,O
Relevant,O
Member,O
State,O
:,O
(,O
a,O
),O
to,O
legal,O
entities,O
which,O
are,O
authorized,O
or,O
regulated,O
to,O
operate,O
in,O
the,O
financial,O
markets,O
or,O
",",O
if,O
not,O
so,O
authorized,O
or,O
regulated,O
",",O
whose,O
corporate,O
purpose,O
is,O
solely,O
to,O
invest,O
in,O
securities,O
;,O
(,O
b,O
),O
to,O
any,O
legal,O
entity,O
which,O
has,O
two,O
or,O
more,O
of,O
(,O
1,O
),O
an,O
average,O
of,O
at,O
least,O
250,O
employees,O
during,O
the,O
last,O
financial,O
year,O
;,O
(,O
2,O
),O
a,O
total,O
balance,O
sheet,O
of,O
more,O
than,O
"€43,000,000",O
and,O
(,O
3,O
),O
an,O
annual,O
net,O
turnover,O
of,O
more,O
than,O
"€50,000,000",O
",",O
as,O
shown,O
in,O
its,O
last,O
annual,O
or,O
consolidated,O
accounts,O
;,O
(,O
c,O
),O
by,O
the,O
underwriters,O
to,O
fewer,O
than,O
100,O
natural,O
or,O
legal,O
persons,O
(,O
other,O
than,O
qualified,O
investors,O
as,O
defined,O
in,O
the,O
Prospectus,O
Directive,O
),O
subject,O
to,O
obtaining,O
the,O
prior,O
consent,O
of,O
the,O
representatives,O
for,O
any,O
such,O
offer,O
;,O
or,O
(,O
d,O
),O
in,O
any,O
other,O
circumstances,O
falling,O
within,O
Article,O
3,O
(,O
2,O
),O
of,O
the,O
Prospectus,O
Directive,O
;,O
provided,O
that,O
no,O
such,O
offer,O
of,O
notes,O
shall,O
result,O
in,O
a,O
requirement,O
for,O
the,O
publication,O
by,O
us,O
or,O
any,O
representative,O
of,O
a,O
prospectus,O
pursuant,O
to,O
Article,O
3,O
of,O
the,O
Prospectus,O
Directive,O
.,O
,O
Any,O
person,O
making,O
or,O
intending,O
to,O
make,O
any,O
offer,O
of,O
notes,O
within,O
the,O
EEA,I-LOCATION
should,O
only,O
do,O
so,O
in,O
circumstances,O
in,O
which,O
no,O
obligation,O
arises,O
for,O
us,O
or,O
any,O
of,O
the,O
underwriters,O
to,O
produce,O
a,O
prospectus,O
for,O
such,O
offer,O
.,O
,O
Neither,O
we,O
nor,O
the,O
underwriters,O
have,O
authorized,O
",",O
nor,O
do,O
they,O
authorize,O
",",O
the,O
making,O
of,O
any,O
offer,O
of,O
notes,O
through,O
any,O
financial,O
intermediary,O
",",O
other,O
than,O
offers,O
made,O
by,O
the,O
underwriters,O
which,O
constitute,O
the,O
final,O
offering,O
of,O
notes,O
contemplated,O
in,O
this,O
prospectus,O
supplement,O
.,O
,O
For,O
the,O
purposes,O
of,O
this,O
provision,O
",",O
and,O
your,O
representation,O
below,O
",",O
the,O
expression,O
an,O
offer,O
to,O
the,O
public,O
in,O
relation,O
to,O
any,O
notes,O
in,O
any,O
Relevant,O
Member,O
State,O
means,O
the,O
communication,O
in,O
any,O
form,O
and,O
by,O
any,O
means,O
of,O
sufficient,O
information,O
on,O
the,O
terms,O
of,O
the,O
offer,O
and,O
any,O
notes,O
to,O
be,O
offered,O
so,O
as,O
to,O
enable,O
an,O
investor,O
to,O
decide,O
to,O
purchase,O
any,O
notes,O
",",O
as,O
the,O
same,O
may,O
be,O
varied,O
in,O
that,O
Relevant,O
Member,O
State,O
by,O
any,O
measure,O
implementing,O
the,O
Prospectus,O
Directive,O
in,O
that,O
Relevant,O
Member,O
State,O
and,O
the,O
expression,O
Prospectus,O
Directive,O
means,O
Directive,O
2003/71/EC,O
and,O
includes,O
any,O
relevant,O
implementing,O
measure,O
in,O
each,O
Relevant,O
Member,O
State,O
.,O
,O
(,O
B,O
),O
in,O
the,O
case,O
of,O
any,O
notes,O
acquired,O
by,O
it,O
as,O
a,O
financial,O
intermediary,O
",",O
as,O
that,O
term,O
is,O
used,O
in,O
Article,O
3,O
(,O
2,O
),O
of,O
the,O
Prospectus,O
Directive,O
",",O
(,O
i,O
),O
the,O
notes,O
acquired,O
by,O
it,O
in,O
the,O
offering,O
have,O
not,O
been,O
acquired,O
on,O
behalf,O
of,O
",",O
nor,O
have,O
they,O
been,O
acquired,O
with,O
a,O
view,O
to,O
their,O
offer,O
or,O
resale,O
to,O
",",O
persons,O
in,O
any,O
Relevant,O
Member,O
State,O
other,O
than,O
qualified,O
investors,O
(,O
as,O
defined,O
in,O
the,O
Prospectus,O
Directive,O
),O
",",O
or,O
in,O
circumstances,O
in,O
which,O
the,O
prior,O
consent,O
of,O
the,O
representatives,O
has,O
been,O
given,O
to,O
the,O
offer,O
or,O
resale,O
;,O
or,O
(,O
ii,O
),O
where,O
notes,O
have,O
been,O
acquired,O
by,O
it,O
on,O
behalf,O
of,O
persons,O
in,O
any,O
Relevant,O
Member,O
State,O
other,O
than,O
qualified,O
investors,O
",",O
the,O
offer,O
of,O
those,O
notes,O
to,O
it,O
is,O
not,O
treated,O
under,O
the,O
Prospectus,O
Directive,O
as,O
having,O
been,O
made,O
to,O
such,O
persons,O
.,O
,O
In,O
addition,O
",",O
in,O
the,O
United,I-LOCATION
Kingdom,I-LOCATION
",",O
this,O
document,O
is,O
being,O
distributed,O
only,O
to,O
",",O
and,O
is,O
directed,O
only,O
at,O
",",O
and,O
any,O
offer,O
subsequently,O
made,O
may,O
only,O
be,O
directed,O
at,O
persons,O
who,O
are,O
qualified,O
investors,O
(,O
as,O
defined,O
in,O
the,O
Prospectus,O
Directive,O
),O
(,O
i,O
),O
who,O
have,O
professional,O
experience,O
in,O
matters,O
relating,O
to,O
investments,O
falling,O
within,O
Article,O
19,O
(,O
5,O
),O
of,O
the,O
Financial,I-LEGISLATION/ACT
Services,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Markets,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
2000,I-LEGISLATION/ACT
(,O
Financial,O
Promotion,O
),O
Order,O
2005,O
",",O
as,O
amended,O
(,O
the,O
Order,O
),O
and/or,O
(,O
ii,O
),O
who,O
are,O
high,O
net,O
worth,O
companies,O
(,O
or,O
persons,O
to,O
whom,O
it,O
may,O
otherwise,O
be,O
lawfully,O
communicated,O
),O
falling,O
within,O
Article,O
49,O
(,O
2,O
),O
(,O
a,O
),O
to,O
(,O
d,O
),O
of,O
the,O
Order,O
(,O
all,O
such,O
persons,O
together,O
being,O
referred,O
to,O
as,O
relevant,O
persons,O
),O
.,O
,O
This,O
document,O
must,O
not,O
be,O
acted,O
on,O
or,O
relied,O
on,O
in,O
the,O
United,I-LOCATION
Kingdom,I-LOCATION
by,O
persons,O
who,O
are,O
not,O
relevant,O
persons,O
.,O
,O
In,O
the,O
United,I-LOCATION
Kingdom,I-LOCATION
",",O
any,O
investment,O
or,O
investment,O
activity,O
to,O
which,O
this,O
document,O
relates,O
is,O
only,O
available,O
to,O
",",O
and,O
will,O
be,O
engaged,O
in,O
with,O
",",O
relevant,O
persons,O
.,O
,O
Notice,O
to,O
Prospective,O
Investors,O
in,O
Switzerland,I-LOCATION
This,O
prospectus,O
does,O
not,O
constitute,O
an,O
issue,O
prospectus,O
pursuant,O
to,O
Article,O
652a,O
or,O
Article,O
1156,O
of,O
the,O
Swiss,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Obligations,I-LEGISLATION/ACT
and,O
the,O
notes,O
will,O
not,O
be,O
listed,O
on,O
the,O
SIX,I-BUSINESS
Swiss,I-BUSINESS
Exchange,I-BUSINESS
.,O
,O
Therefore,O
",",O
this,O
prospectus,O
may,O
not,O
comply,O
with,O
the,O
disclosure,O
standards,O
of,O
the,O
listing,O
rules,O
(,O
including,O
any,O
additional,O
listing,O
rules,O
or,O
prospectus,O
schemes,O
),O
of,O
the,O
SIX,I-BUSINESS
Swiss,I-BUSINESS
Exchange,I-BUSINESS
.,O
,O
Accordingly,O
",",O
the,O
notes,O
may,O
not,O
be,O
offered,O
to,O
the,O
public,O
in,O
or,O
from,O
Switzerland,I-LOCATION
",",O
but,O
only,O
to,O
a,O
selected,O
and,O
limited,O
circle,O
of,O
investors,O
who,O
do,O
not,O
subscribe,O
to,O
the,O
notes,O
with,O
a,O
view,O
to,O
distribution,O
.,O
,O
Any,O
such,O
investors,O
will,O
be,O
individually,O
approached,O
by,O
the,O
underwriters,O
from,O
time,O
to,O
time,O
.,O
,O
Notice,O
to,O
Prospective,O
Investors,O
in,O
the,O
Dubai,I-BUSINESS
International,I-BUSINESS
Financial,I-BUSINESS
Centre,I-BUSINESS
This,O
document,O
relates,O
to,O
an,O
exempt,O
offer,O
in,O
accordance,O
with,O
the,O
Offered,I-LEGISLATION/ACT
Securities,I-LEGISLATION/ACT
Rules,I-LEGISLATION/ACT
of,O
the,O
Dubai,I-BUSINESS
Financial,I-BUSINESS
Services,I-BUSINESS
Authority,I-BUSINESS
.,O
,O
This,O
document,O
is,O
intended,O
for,O
distribution,O
only,O
to,O
persons,O
of,O
a,O
type,O
specified,O
in,O
those,O
rules,O
.,O
,O
It,O
must,O
not,O
be,O
delivered,O
to,O
",",O
or,O
relied,O
on,O
by,O
",",O
any,O
other,O
person,O
.,O
,O
The,O
Dubai,I-BUSINESS
Financial,I-BUSINESS
Services,I-BUSINESS
Authority,I-BUSINESS
has,O
no,O
responsibility,O
for,O
reviewing,O
or,O
verifying,O
any,O
documents,O
in,O
connection,O
with,O
exempt,O
offers,O
.,O
,O
The,O
Dubai,I-BUSINESS
Financial,I-BUSINESS
Services,I-BUSINESS
Authority,I-BUSINESS
has,O
not,O
approved,O
this,O
document,O
nor,O
taken,O
steps,O
to,O
verify,O
the,O
information,O
set,O
out,O
in,O
it,O
",",O
and,O
has,O
no,O
responsibility,O
for,O
it,O
.,O
,O
The,O
notes,O
which,O
are,O
the,O
subject,O
of,O
the,O
offering,O
contemplated,O
by,O
this,O
prospectus,O
supplement,O
may,O
be,O
illiquid,O
and/or,O
subject,O
to,O
restrictions,O
on,O
their,O
resale,O
.,O
,O
Prospective,O
purchasers,O
of,O
the,O
notes,O
offered,O
should,O
conduct,O
their,O
own,O
due,O
diligence,O
on,O
the,O
notes,O
.,O
,O
If,O
you,O
do,O
not,O
understand,O
the,O
contents,O
of,O
this,O
document,O
you,O
should,O
consult,O
an,O
authorised,O
financial,O
adviser,O
.,O
,O
Notice,O
to,O
Prospective,O
Investors,O
in,O
Hong,I-LOCATION
Kong,I-LOCATION
This,O
prospectus,O
has,O
not,O
been,O
approved,O
by,O
or,O
registered,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Futures,I-GOVERNMENT
Commission,I-GOVERNMENT
of,I-GOVERNMENT
Hong,I-GOVERNMENT
Kong,I-GOVERNMENT
or,O
the,O
Registrar,O
of,O
Companies,O
of,O
Hong,I-LOCATION
Kong,I-LOCATION
.,O
,O
The,O
shares,O
will,O
not,O
be,O
offered,O
or,O
sold,O
in,O
Hong,I-LOCATION
Kong,I-LOCATION
other,O
than,O
(,O
a,O
),O
to,O
professional,O
investors,O
as,O
defined,O
in,O
the,O
Securities,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Futures,I-LEGISLATION/ACT
Ordinance,I-LEGISLATION/ACT
(,O
Cap,O
.,O
,O
571,O
),O
of,O
Hong,I-LOCATION
Kong,I-LOCATION
and,O
any,O
rules,O
made,O
under,O
that,O
Ordinance,O
;,O
or,O
(,O
b,O
),O
in,O
other,O
circumstances,O
which,O
do,O
not,O
result,O
in,O
the,O
document,O
being,O
a,O
prospectus,O
as,O
defined,O
in,O
the,O
Companies,I-LEGISLATION/ACT
Ordinance,I-LEGISLATION/ACT
(,O
Cap,O
.,O
,O
32,O
),O
of,O
Hong,I-LOCATION
Kong,I-LOCATION
or,O
which,O
do,O
not,O
constitute,O
an,O
offer,O
to,O
the,O
public,O
within,O
the,O
meaning,O
of,O
that,O
Ordinance,O
.,O
,O
No,O
advertisement,O
",",O
invitation,O
or,O
document,O
relating,O
to,O
the,O
shares,O
which,O
is,O
directed,O
at,O
",",O
or,O
the,O
contents,O
of,O
which,O
are,O
likely,O
to,O
be,O
accessed,O
or,O
read,O
by,O
",",O
the,O
public,O
of,O
Hong,I-LOCATION
Kong,I-LOCATION
(,O
except,O
if,O
permitted,O
to,O
do,O
so,O
under,O
the,O
securities,O
laws,O
of,O
Hong,I-LOCATION
Kong,I-LOCATION
),O
has,O
been,O
issued,O
or,O
will,O
be,O
issued,O
in,O
Hong,I-LOCATION
Kong,I-LOCATION
or,O
elsewhere,O
other,O
than,O
with,O
respect,O
to,O
shares,O
which,O
are,O
or,O
are,O
intended,O
to,O
be,O
disposed,O
of,O
only,O
to,O
persons,O
outside,O
Hong,I-LOCATION
Kong,I-LOCATION
or,O
only,O
to,O
professional,O
investors,O
as,O
defined,O
in,O
the,O
Securities,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Futures,I-LEGISLATION/ACT
Ordinance,I-LEGISLATION/ACT
and,O
any,O
rules,O
made,O
under,O
that,O
Ordinance,O
.,O
,O
Notice,O
to,O
Prospective,O
Investors,O
in,O
Singapore,I-LOCATION
This,O
prospectus,O
has,O
not,O
been,O
registered,O
as,O
a,O
prospectus,O
with,O
the,O
Monetary,I-GOVERNMENT
Authority,I-GOVERNMENT
of,I-GOVERNMENT
Singapore,I-GOVERNMENT
.,O
,O
Accordingly,O
",",O
this,O
prospectus,O
and,O
any,O
other,O
document,O
or,O
material,O
in,O
connection,O
with,O
the,O
offer,O
or,O
sale,O
",",O
or,O
invitation,O
for,O
subscription,O
or,O
purchase,O
",",O
of,O
the,O
shares,O
may,O
not,O
be,O
circulated,O
or,O
distributed,O
",",O
nor,O
may,O
the,O
shares,O
be,O
offered,O
or,O
sold,O
",",O
or,O
be,O
made,O
the,O
subject,O
of,O
an,O
invitation,O
for,O
subscription,O
or,O
purchase,O
",",O
whether,O
directly,O
or,O
indirectly,O
",",O
to,O
persons,O
in,O
Singapore,I-LOCATION
other,O
than,O
(,O
i,O
),O
to,O
an,O
institutional,O
investor,O
under,O
Section,O
274,O
of,O
the,O
Securities,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Futures,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
Chapter,O
289,O
),O
(,O
the,O
SFA,I-LEGISLATION/ACT
),O
",",O
(,O
ii,O
),O
to,O
a,O
relevant,O
person,O
",",O
or,O
any,O
person,O
pursuant,O
to,O
Section,O
275,O
(,O
1A,O
),O
",",O
and,O
in,O
accordance,O
with,O
the,O
conditions,O
",",O
specified,O
in,O
Section,O
275,O
of,O
the,O
SFA,I-LEGISLATION/ACT
or,O
(,O
iii,O
),O
otherwise,O
pursuant,O
to,O
",",O
and,O
in,O
accordance,O
with,O
the,O
conditions,O
of,O
",",O
any,O
other,O
applicable,O
provision,O
of,O
the,O
SFA,I-LEGISLATION/ACT
.,O
,O
Where,O
the,O
shares,O
are,O
subscribed,O
or,O
purchased,O
under,O
Section,O
275,O
by,O
a,O
relevant,O
person,O
which,O
is,O
:,O
(,O
a,O
),O
a,O
corporation,O
(,O
which,O
is,O
not,O
an,O
accredited,O
investor,O
),O
the,O
sole,O
business,O
of,O
which,O
is,O
to,O
hold,O
investments,O
and,O
the,O
entire,O
share,O
capital,O
of,O
which,O
is,O
owned,O
by,O
one,O
or,O
more,O
individuals,O
",",O
each,O
of,O
whom,O
is,O
an,O
accredited,O
investor,O
;,O
or,O
(,O
b,O
),O
a,O
trust,O
(,O
where,O
the,O
trustee,O
is,O
not,O
an,O
accredited,O
investor,O
),O
whose,O
sole,O
purpose,O
is,O
to,O
hold,O
investments,O
and,O
each,O
beneficiary,O
is,O
an,O
accredited,O
investor,O
",",O
then,O
shares,O
",",O
debentures,O
and,O
units,O
of,O
shares,O
and,O
debentures,O
of,O
that,O
corporation,O
or,O
the,O
beneficiaries,O
rights,O
and,O
interest,O
in,O
that,O
trust,O
shall,O
not,O
be,O
transferable,O
for,O
6,O
months,O
after,O
that,O
corporation,O
or,O
that,O
trust,O
has,O
acquired,O
the,O
shares,O
under,O
Section,O
275,O
except,O
;,O
(,O
i,O
),O
to,O
an,O
institutional,O
investor,O
under,O
Section,O
274,O
of,O
the,O
SFA,I-LEGISLATION/ACT
or,O
to,O
a,O
relevant,O
person,O
",",O
or,O
any,O
person,O
pursuant,O
to,O
Section,O
275,O
(,O
1A,O
),O
",",O
and,O
in,O
accordance,O
with,O
the,O
conditions,O
",",O
specified,O
in,O
Section,O
275,O
of,O
the,O
SFA,I-LEGISLATION/ACT
;,O
(,O
ii,O
),O
where,O
no,O
consideration,O
is,O
given,O
for,O
the,O
transfer,O
;,O
or,O
(,O
iii,O
),O
by,O
operation,O
of,O
law,O
.,O
,O
Notice,O
to,O
Prospective,O
Investors,O
in,O
Japan,I-LOCATION
The,O
shares,O
have,O
not,O
been,O
and,O
will,O
not,O
be,O
registered,O
under,O
the,O
Financial,I-LEGISLATION/ACT
Instruments,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Japan,I-LEGISLATION/ACT
(,O
Law,O
No.,O
25,O
of,O
1948,O
",",O
as,O
amended,O
),O
and,O
",",O
accordingly,O
",",O
will,O
not,O
be,O
offered,O
or,O
sold,O
",",O
directly,O
or,O
indirectly,O
",",O
in,O
Japan,O
",",O
or,O
for,O
the,O
benefit,O
of,O
any,O
Japanese,I-MISCELLANEOUS
Person,O
or,O
to,O
others,O
for,O
re-offering,O
or,O
resale,O
",",O
directly,O
or,O
indirectly,O
",",O
in,O
Japan,I-LOCATION
or,O
to,O
any,O
Japanese,I-MISCELLANEOUS
Person,O
",",O
except,O
in,O
compliance,O
with,O
all,O
applicable,O
laws,O
",",O
regulations,O
and,O
ministerial,O
guidelines,O
promulgated,O
by,O
relevant,O
Japanese,I-MISCELLANEOUS
governmental,O
or,O
regulatory,O
authorities,O
in,O
effect,O
at,O
the,O
relevant,O
time,O
.,O
,O
For,O
the,O
purposes,O
of,O
this,O
paragraph,O
",",O
Japanese,I-MISCELLANEOUS
Person,O
shall,O
mean,O
any,O
person,O
resident,O
in,O
Japan,I-LOCATION
",",O
including,O
any,O
corporation,O
or,O
other,O
entity,O
organized,O
under,O
the,O
laws,O
of,O
Japan,I-LOCATION
.,O
,O
The,O
validity,O
of,O
the,O
notes,O
will,O
be,O
passed,O
upon,O
for,O
us,O
by,O
Skadden,I-BUSINESS
",",I-BUSINESS
Arps,I-BUSINESS
",",I-BUSINESS
Slate,I-BUSINESS
",",I-BUSINESS
Meagher,I-BUSINESS
&,I-BUSINESS
Flom,I-BUSINESS
LLP,I-BUSINESS
.,O
,O
Simpson,I-BUSINESS
Thacher,I-BUSINESS
&,I-BUSINESS
Bartlett,I-BUSINESS
LLP,I-BUSINESS
",",I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
",",O
New,I-LOCATION
York,I-LOCATION
",",O
will,O
pass,O
upon,O
certain,O
legal,O
matters,O
for,O
the,O
underwriters,O
in,O
connection,O
with,O
the,O
issuance,O
of,O
the,O
notes,O
.,O
,O
The,O
consolidated,O
financial,O
statements,O
of,O
AutoNation,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
as,O
of,O
December,O
31,O
",",O
2009,O
and,O
2008,O
",",O
and,O
for,O
each,O
of,O
the,O
years,O
in,O
the,O
three-year,O
period,O
ended,O
December,O
31,O
",",O
2009,O
",",O
and,O
management,O
s,O
assessment,O
of,O
the,O
effectiveness,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
of,O
December,O
31,O
",",O
2009,O
have,O
been,O
incorporated,O
by,O
reference,O
herein,O
and,O
in,O
the,O
registration,O
statement,O
in,O
reliance,O
upon,O
the,O
reports,O
of,O
KPMG,I-BUSINESS
LLP,I-BUSINESS
",",O
independent,O
registered,O
public,O
accounting,O
firm,O
",",O
incorporated,O
by,O
reference,O
herein,O
",",O
and,O
upon,O
the,O
authority,O
of,O
said,O
firm,O
as,O
experts,O
in,O
accounting,O
and,O
auditing,O
.,O
,O
The,O
audit,O
report,O
covering,O
the,O
December,O
31,O
",",O
2009,O
consolidated,O
financial,O
statements,O
refers,O
to,O
the,O
adoption,O
of,O
FASB,I-LEGISLATION/ACT
Interpretation,I-LEGISLATION/ACT
No.,O
48,O
",",O
Accounting,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Uncertainty,I-MISCELLANEOUS
in,I-MISCELLANEOUS
Income,I-MISCELLANEOUS
Taxes,I-MISCELLANEOUS
(,O
included,O
in,O
FASB,I-LEGISLATION/ACT
ASC,I-LEGISLATION/ACT
Topic,O
740,O
",",O
Income,I-MISCELLANEOUS
Taxes,I-MISCELLANEOUS
),O
",",O
effective,O
January,O
1,O
",",O
2007,O
.,O
,O
PROSPECTUS,O
We,O
may,O
from,O
time,O
to,O
time,O
offer,O
to,O
sell,O
",",O
together,O
or,O
separately,O
",",O
common,O
stock,O
",",O
preferred,O
stock,O
",",O
debt,O
securities,O
",",O
guarantees,O
of,O
debt,O
securities,O
",",O
warrants,O
",",O
subscription,O
rights,O
to,O
purchase,O
common,O
stock,O
or,O
preferred,O
stock,O
",",O
depositary,O
shares,O
or,O
stock,O
purchase,O
contracts,O
",",O
as,O
well,O
as,O
units,O
that,O
include,O
any,O
of,O
these,O
securities,O
.,O
,O
The,O
debt,O
securities,O
may,O
consist,O
of,O
debentures,O
",",O
notes,O
or,O
other,O
types,O
of,O
debt,O
and,O
may,O
be,O
guaranteed,O
by,O
certain,O
of,O
our,O
subsidiaries,O
.,O
,O
The,O
preferred,O
stock,O
",",O
debt,O
securities,O
",",O
warrants,O
and,O
stock,O
purchase,O
contracts,O
may,O
be,O
convertible,O
or,O
exercisable,O
or,O
exchangeable,O
for,O
common,O
or,O
preferred,O
stock,O
or,O
other,O
securities,O
.,O
,O
We,O
will,O
provide,O
specific,O
terms,O
of,O
these,O
securities,O
in,O
one,O
or,O
more,O
supplements,O
to,O
this,O
prospectus,O
at,O
the,O
time,O
of,O
offering,O
.,O
,O
You,O
should,O
read,O
this,O
prospectus,O
and,O
any,O
relevant,O
prospectus,O
supplement,O
or,O
free,O
writing,O
prospectus,O
",",O
as,O
well,O
as,O
the,O
documents,O
incorporated,O
or,O
deemed,O
to,O
be,O
incorporated,O
by,O
reference,O
in,O
this,O
prospectus,O
",",O
carefully,O
before,O
you,O
make,O
your,O
investment,O
decision,O
with,O
respect,O
to,O
any,O
offering,O
.,O
,O
Our,O
common,O
stock,O
is,O
listed,O
on,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
and,O
trades,O
under,O
the,O
ticker,O
symbol,O
AN,I-BUSINESS
.,O
,O
Each,O
prospectus,O
supplement,O
will,O
indicate,O
if,O
the,O
securities,O
offered,O
thereby,O
will,O
be,O
listed,O
on,O
any,O
securities,O
exchange,O
.,O
,O
This,O
prospectus,O
may,O
not,O
be,O
used,O
to,O
sell,O
securities,O
unless,O
accompanied,O
by,O
a,O
prospectus,O
supplement,O
or,O
a,O
free,O
writing,O
prospectus,O
.,O
,O
We,O
may,O
offer,O
securities,O
through,O
underwriting,O
syndicates,O
managed,O
or,O
co-managed,O
by,O
one,O
or,O
more,O
underwriters,O
",",O
or,O
directly,O
to,O
purchasers,O
.,O
,O
The,O
prospectus,O
supplement,O
or,O
free,O
writing,O
prospectus,O
for,O
an,O
offering,O
of,O
securities,O
will,O
describe,O
in,O
detail,O
the,O
plan,O
of,O
distribution,O
for,O
that,O
offering,O
.,O
,O
Investing,O
in,O
our,O
securities,O
involves,O
certain,O
risks,O
.,O
,O
You,O
should,O
carefully,O
consider,O
the,O
risks,O
described,O
under,O
Risk,O
Factors,O
in,O
our,O
most,O
recent,O
annual,O
report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
",",O
which,O
is,O
incorporated,O
by,O
reference,O
herein,O
",",O
as,O
well,O
the,O
other,O
information,O
contained,O
or,O
incorporated,O
by,O
reference,O
in,O
this,O
prospectus,O
or,O
in,O
any,O
applicable,O
prospectus,O
supplement,O
or,O
free,O
writing,O
prospectus,O
before,O
making,O
a,O
decision,O
to,O
invest,O
in,O
our,O
securities,O
.,O
,O
See,O
Risk,O
Factors,O
on,O
page,O
1,O
of,O
this,O
prospectus,O
.,O
,O
Neither,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
nor,O
any,O
state,O
securities,O
commission,O
has,O
approved,O
or,O
disapproved,O
of,O
these,O
securities,O
or,O
determined,O
if,O
this,O
prospectus,O
is,O
truthful,O
or,O
complete,O
.,O
,O
Any,O
representation,O
to,O
the,O
contrary,O
is,O
a,O
criminal,O
offense,O
.,O
,O
This,O
prospectus,O
and,O
the,O
documents,O
incorporated,O
by,O
reference,O
herein,O
contain,O
forward-looking,O
statements,O
within,O
the,O
meaning,O
of,O
Section,O
27A,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
and,O
Section,O
21E,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
.,O
,O
All,O
statements,O
",",O
other,O
than,O
statements,O
of,O
historical,O
facts,O
",",O
included,O
or,O
incorporated,O
herein,O
regarding,O
our,O
strategy,O
",",O
future,O
operations,O
",",O
financial,O
position,O
",",O
future,O
revenues,O
",",O
projected,O
costs,O
",",O
prospects,O
",",O
plans,O
and,O
objectives,O
are,O
forward-looking,O
statements,O
.,O
,O
In,O
some,O
cases,O
",",O
you,O
can,O
identify,O
forward-looking,O
statements,O
by,O
terminology,O
such,O
as,O
anticipate,O
",",O
believe,O
",",O
estimate,O
",",O
expect,O
",",O
intend,O
",",O
may,O
",",O
plan,O
",",O
seek,O
",",O
project,O
",",O
will,O
",",O
would,O
",",O
and,O
similar,O
expressions,O
or,O
expressions,O
of,O
the,O
negative,O
of,O
these,O
terms,O
.,O
,O
Such,O
statements,O
are,O
only,O
predictions,O
and,O
",",O
accordingly,O
",",O
are,O
subject,O
to,O
substantial,O
risks,O
",",O
uncertainties,O
and,O
assumptions,O
.,O
,O
We,O
intend,O
for,O
our,O
forward-looking,O
statements,O
to,O
be,O
covered,O
by,O
the,O
safe,O
harbor,O
provisions,O
for,O
forward-looking,O
statements,O
contained,O
in,O
the,O
Private,I-LEGISLATION/ACT
Securities,I-LEGISLATION/ACT
Litigation,I-LEGISLATION/ACT
Reform,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1995,I-LEGISLATION/ACT
",",O
and,O
we,O
set,O
forth,O
this,O
statement,O
in,O
order,O
to,O
comply,O
with,O
such,O
safe,O
harbor,O
provisions,O
.,O
,O
Although,O
we,O
believe,O
that,O
the,O
expectations,O
",",O
plans,O
",",O
intentions,O
",",O
and,O
projections,O
reflected,O
in,O
our,O
forward-looking,O
statements,O
are,O
reasonable,O
",",O
such,O
statements,O
are,O
subject,O
to,O
known,O
and,O
unknown,O
risks,O
",",O
uncertainties,O
",",O
and,O
other,O
factors,O
that,O
may,O
cause,O
our,O
actual,O
results,O
",",O
performance,O
",",O
or,O
achievements,O
to,O
be,O
materially,O
different,O
from,O
any,O
future,O
results,O
",",O
performance,O
",",O
or,O
achievements,O
expressed,O
or,O
implied,O
by,O
the,O
forward-looking,O
statements,O
.,O
,O
The,O
risks,O
",",O
uncertainties,O
",",O
and,O
other,O
factors,O
that,O
our,O
stockholders,O
and,O
prospective,O
investors,O
should,O
consider,O
include,O
",",O
but,O
are,O
not,O
limited,O
to,O
",",O
the,O
following,O
:,O
,O
Please,O
refer,O
to,O
our,O
most,O
recent,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
and,O
to,O
our,O
subsequent,O
filings,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
the,O
SEC,I-GOVERNMENT
),O
for,O
additional,O
discussion,O
of,O
the,O
foregoing,O
risks,O
.,O
,O
Forward-looking,O
statements,O
speak,O
only,O
as,O
of,O
the,O
date,O
on,O
which,O
they,O
are,O
made,O
",",O
and,O
we,O
undertake,O
no,O
obligation,O
to,O
publicly,O
update,O
or,O
revise,O
any,O
forward-looking,O
statements,O
to,O
reflect,O
subsequent,O
events,O
or,O
circumstances,O
",",O
except,O
as,O
required,O
by,O
law,O
.,O
,O
This,O
prospectus,O
is,O
part,O
of,O
an,O
automatic,O
shelf,O
registration,O
statement,O
that,O
we,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
Under,O
this,O
shelf,O
registration,O
process,O
",",O
we,O
may,O
sell,O
any,O
combination,O
of,O
the,O
securities,O
described,O
in,O
this,O
prospectus,O
in,O
one,O
or,O
more,O
offerings,O
.,O
,O
This,O
prospectus,O
provides,O
you,O
with,O
a,O
general,O
description,O
of,O
the,O
securities,O
we,O
may,O
offer,O
.,O
,O
Each,O
time,O
we,O
sell,O
securities,O
",",O
we,O
will,O
provide,O
a,O
prospectus,O
supplement,O
or,O
a,O
free,O
writing,O
prospectus,O
that,O
will,O
contain,O
specific,O
information,O
about,O
the,O
terms,O
of,O
that,O
offering,O
.,O
,O
The,O
prospectus,O
supplement,O
or,O
free,O
writing,O
prospectus,O
may,O
also,O
add,O
",",O
update,O
or,O
change,O
information,O
contained,O
in,O
this,O
prospectus,O
.,O
,O
You,O
should,O
carefully,O
read,O
both,O
this,O
prospectus,O
and,O
any,O
applicable,O
prospectus,O
supplement,O
or,O
free,O
writing,O
prospectus,O
together,O
with,O
additional,O
information,O
described,O
under,O
the,O
heading,O
Where,I-MISCELLANEOUS
You,I-MISCELLANEOUS
Can,I-MISCELLANEOUS
Find,I-MISCELLANEOUS
Additional,I-MISCELLANEOUS
Information,I-MISCELLANEOUS
before,O
deciding,O
to,O
invest,O
in,O
any,O
of,O
the,O
securities,O
being,O
offered,O
.,O
,O
You,O
should,O
rely,O
only,O
on,O
the,O
information,O
contained,O
in,O
or,O
incorporated,O
by,O
reference,O
in,O
this,O
prospectus,O
or,O
any,O
related,O
prospectus,O
supplement,O
or,O
free,O
writing,O
prospectus,O
.,O
,O
We,O
have,O
not,O
authorized,O
anyone,O
to,O
provide,O
you,O
with,O
different,O
information,O
.,O
,O
We,O
are,O
not,O
making,O
an,O
offer,O
of,O
these,O
securities,O
in,O
any,O
jurisdiction,O
where,O
the,O
offer,O
is,O
not,O
permitted,O
.,O
,O
You,O
should,O
not,O
assume,O
that,O
the,O
information,O
contained,O
in,O
this,O
prospectus,O
or,O
any,O
prospectus,O
supplement,O
or,O
free,O
writing,O
prospectus,O
is,O
accurate,O
on,O
any,O
date,O
other,O
than,O
the,O
date,O
on,O
the,O
front,O
cover,O
of,O
such,O
documents,O
or,O
that,O
any,O
information,O
we,O
have,O
incorporated,O
by,O
reference,O
is,O
correct,O
on,O
any,O
date,O
subsequent,O
to,O
the,O
date,O
of,O
the,O
document,O
incorporated,O
by,O
reference,O
",",O
even,O
though,O
this,O
prospectus,O
or,O
any,O
prospectus,O
supplement,O
or,O
free,O
writing,O
prospectus,O
is,O
delivered,O
or,O
securities,O
are,O
sold,O
on,O
a,O
later,O
date,O
.,O
,O
Neither,O
the,O
delivery,O
of,O
this,O
prospectus,O
or,O
any,O
applicable,O
prospectus,O
supplement,O
or,O
free,O
writing,O
prospectus,O
nor,O
any,O
distribution,O
of,O
securities,O
pursuant,O
to,O
such,O
documents,O
shall,O
",",O
under,O
any,O
circumstances,O
",",O
create,O
any,O
implication,O
that,O
there,O
has,O
been,O
no,O
change,O
in,O
the,O
information,O
set,O
forth,O
in,O
this,O
prospectus,O
or,O
any,O
applicable,O
prospectus,O
supplement,O
or,O
free,O
writing,O
prospectus,O
or,O
in,O
our,O
affairs,O
since,O
the,O
date,O
of,O
this,O
prospectus,O
or,O
any,O
applicable,O
prospectus,O
supplement,O
or,O
free,O
writing,O
prospectus,O
.,O
,O
For,O
convenience,O
",",O
the,O
terms,O
AutoNation,I-BUSINESS
",",O
the,O
Company,O
",",O
we,O
",",O
us,O
",",O
and,O
our,O
are,O
used,O
in,O
this,O
prospectus,O
to,O
refer,O
to,O
AutoNation,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
its,O
subsidiaries,O
",",O
unless,O
otherwise,O
required,O
by,O
the,O
context,O
.,O
,O
Our,O
dealership,O
operations,O
are,O
conducted,O
by,O
our,O
subsidiaries,O
.,O
,O
This,O
summary,O
highlights,O
certain,O
information,O
about,O
AutoNation,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
Because,O
it,O
is,O
a,O
summary,O
",",O
it,O
does,O
not,O
contain,O
all,O
the,O
information,O
you,O
should,O
consider,O
before,O
investing,O
in,O
our,O
securities,O
.,O
,O
You,O
should,O
read,O
carefully,O
this,O
entire,O
prospectus,O
",",O
any,O
prospectus,O
supplement,O
or,O
free,O
writing,O
prospectus,O
and,O
the,O
documents,O
that,O
we,O
incorporate,O
herein,O
and,O
therein,O
by,O
reference,O
",",O
including,O
the,O
sections,O
entitled,O
Risk,O
Factors,O
and,O
our,O
financial,O
statements,O
and,O
related,O
notes,O
.,O
,O
You,O
may,O
obtain,O
a,O
copy,O
of,O
the,O
documents,O
that,O
we,O
incorporate,O
by,O
reference,O
without,O
charge,O
by,O
following,O
the,O
instructions,O
in,O
the,O
section,O
below,O
entitled,O
Where,O
You,O
Can,O
Find,O
Additional,O
Information,O
.,O
,O
AutoNation,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
through,O
its,O
subsidiaries,O
",",O
is,O
the,O
largest,O
automotive,O
retailer,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
As,O
of,O
December,O
31,O
",",O
2009,O
",",O
we,O
owned,O
and,O
operated,O
246,O
new,O
vehicle,O
franchises,O
from,O
203,O
stores,O
located,O
in,O
major,O
metropolitan,O
markets,O
",",O
predominantly,O
in,O
the,O
Sunbelt,I-LOCATION
region,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
Our,O
stores,O
",",O
which,O
we,O
believe,O
are,O
some,O
of,O
the,O
most,O
recognizable,O
and,O
well-known,O
in,O
our,O
key,O
markets,O
",",O
sell,O
33,O
different,O
brands,O
of,O
new,O
vehicles,O
.,O
,O
The,O
core,O
brands,O
of,O
vehicles,O
that,O
we,O
sell,O
",",O
representing,O
approximately,O
96,O
%,O
of,O
the,O
new,O
vehicles,O
that,O
we,O
sold,O
in,O
2009,O
",",O
are,O
manufactured,O
by,O
Toyota,I-BUSINESS
",",O
Ford,I-BUSINESS
",",O
Honda,I-BUSINESS
",",O
Nissan,I-BUSINESS
",",O
General,I-BUSINESS
Motors,I-BUSINESS
",",O
Mercedes,I-BUSINESS
",",O
BMW,I-BUSINESS
",",O
and,O
Chrysler,I-BUSINESS
.,O
,O
We,O
offer,O
a,O
diversified,O
range,O
of,O
automotive,O
products,O
and,O
services,O
",",O
including,O
new,O
vehicles,O
",",O
used,O
vehicles,O
",",O
parts,O
and,O
automotive,O
services,O
",",O
and,O
automotive,O
finance,O
and,O
insurance,O
products,O
.,O
,O
We,O
also,O
arrange,O
financing,O
for,O
vehicle,O
purchases,O
through,O
third-party,O
finance,O
sources,O
.,O
,O
We,O
believe,O
that,O
the,O
significant,O
scale,O
of,O
our,O
operations,O
and,O
the,O
quality,O
of,O
our,O
managerial,O
talent,O
allow,O
us,O
to,O
achieve,O
efficiencies,O
in,O
our,O
key,O
markets,O
by,O
",",O
among,O
other,O
things,O
",",O
leveraging,O
our,O
market,O
brands,O
and,O
advertising,O
",",O
improving,O
asset,O
management,O
",",O
implementing,O
standardized,O
processes,O
",",O
and,O
increasing,O
productivity,O
across,O
all,O
of,O
our,O
stores,O
.,O
,O
We,O
were,O
incorporated,O
in,O
Delaware,I-LOCATION
in,O
1991,O
.,O
,O
Our,O
principal,O
executive,O
offices,O
are,O
located,O
at,O
200,O
SW,I-LOCATION
1st,I-LOCATION
Ave,I-LOCATION
",",O
Fort,O
Lauderdale,O
",",O
FL,I-LOCATION
33301,O
",",O
and,O
our,O
telephone,O
number,O
at,O
that,O
address,O
is,O
(,O
954,O
),O
769-6000,O
.,O
,O
We,O
maintain,O
a,O
web,O
site,O
at,O
www.autonation.com,O
.,O
,O
Information,O
contained,O
in,O
or,O
accessed,O
through,O
our,O
web,O
site,O
does,O
not,O
constitute,O
a,O
part,O
of,O
this,O
prospectus,O
.,O
,O
Investing,O
in,O
our,O
securities,O
involves,O
risks,O
.,O
,O
You,O
should,O
carefully,O
consider,O
",",O
among,O
other,O
things,O
",",O
(,O
i,O
),O
the,O
risk,O
factors,O
identified,O
under,O
the,O
heading,O
Risk,O
Factors,O
in,O
Part,O
I,O
",",O
Item,O
1A,O
of,O
our,O
most,O
recent,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
",",O
as,O
updated,O
by,O
our,O
Quarterly,O
Reports,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
and,O
any,O
Current,O
Reports,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filed,O
subsequent,O
to,O
such,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
",",O
(,O
ii,O
),O
the,O
risk,O
factors,O
identified,O
under,O
the,O
heading,O
Risk,O
Factors,O
in,O
any,O
applicable,O
prospectus,O
supplement,O
or,O
free,O
writing,O
prospectus,O
",",O
and,O
(,O
iii,O
),O
the,O
other,O
information,O
set,O
forth,O
in,O
this,O
prospectus,O
",",O
in,O
any,O
applicable,O
prospectus,O
supplement,O
or,O
free,O
writing,O
prospectus,O
",",O
and,O
in,O
the,O
documents,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
.,O
,O
For,O
more,O
information,O
",",O
see,O
the,O
section,O
entitled,O
Where,O
You,O
Can,O
Find,O
Additional,O
Information,O
.,O
,O
These,O
risks,O
could,O
materially,O
and,O
adversely,O
affect,O
our,O
business,O
",",O
results,O
of,O
operations,O
and,O
financial,O
condition,O
and,O
could,O
result,O
in,O
a,O
partial,O
or,O
complete,O
loss,O
of,O
your,O
investment,O
.,O
,O
Unless,O
otherwise,O
indicated,O
in,O
a,O
prospectus,O
supplement,O
or,O
a,O
free,O
writing,O
prospectus,O
",",O
the,O
net,O
proceeds,O
from,O
the,O
sale,O
of,O
the,O
securities,O
will,O
be,O
used,O
for,O
general,O
corporate,O
purposes,O
",",O
including,O
working,O
capital,O
",",O
acquisitions,O
",",O
retirement,O
of,O
debt,O
and,O
other,O
business,O
opportunities,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
our,O
ratio,O
of,O
earnings,O
to,O
fixed,O
charges,O
for,O
the,O
periods,O
indicated,O
:,O
,O
The,O
ratio,O
of,O
earnings,O
to,O
fixed,O
charges,O
is,O
calculated,O
by,O
dividing,O
earnings,O
",",O
as,O
defined,O
",",O
by,O
fixed,O
charges,O
",",O
as,O
defined,O
.,O
,O
For,O
this,O
purpose,O
",",O
earnings,O
consist,O
of,O
income,O
from,O
continuing,O
operations,O
before,O
taxes,O
",",O
earnings,O
from,O
unconsolidated,O
affiliates,O
and,O
fixed,O
charges,O
.,O
,O
Fixed,O
charges,O
consist,O
of,O
interest,O
on,O
indebtedness,O
",",O
including,O
floorplan,O
interest,O
",",O
amortization,O
of,O
debt,O
issuance,O
costs,O
and,O
the,O
estimated,O
portion,O
of,O
rental,O
expense,O
we,O
deem,O
to,O
be,O
representative,O
of,O
the,O
interest,O
factor,O
of,O
rental,O
payments,O
under,O
operating,O
leases,O
.,O
,O
We,O
did,O
not,O
have,O
any,O
preferred,O
stock,O
outstanding,O
for,O
the,O
periods,O
presented,O
",",O
and,O
therefore,O
the,O
ratios,O
of,O
earnings,O
to,O
combined,O
fixed,O
charges,O
and,O
preferred,O
stock,O
dividends,O
would,O
be,O
the,O
same,O
as,O
the,O
ratios,O
of,O
earnings,O
to,O
fixed,O
charges,O
presented,O
above,O
.,O
,O
The,O
following,O
description,O
of,O
our,O
capital,O
stock,O
is,O
based,O
on,O
our,O
Third,O
Amended,O
and,O
Restated,O
Certificate,O
of,O
Incorporation,O
",",O
as,O
amended,O
(,O
our,O
Certificate,O
of,O
Incorporation,O
),O
",",O
our,O
Amended,O
and,O
Restated,O
By-Laws,O
(,O
our,O
By-Laws,O
),O
and,O
applicable,O
provisions,O
of,O
law,O
.,O
,O
We,O
have,O
summarized,O
certain,O
portions,O
of,O
our,O
Certificate,O
of,O
Incorporation,O
and,O
By-Laws,O
below,O
.,O
,O
The,O
summary,O
is,O
not,O
complete,O
and,O
is,O
subject,O
to,O
",",O
and,O
is,O
qualified,O
in,O
its,O
entirety,O
by,O
",",O
the,O
applicable,O
provisions,O
of,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
(,O
DGCL,I-LEGISLATION/ACT
),O
",",O
our,O
Certificate,O
of,O
Incorporation,O
and,O
our,O
By-Laws,O
",",O
which,O
are,O
incorporated,O
by,O
reference,O
herein,O
.,O
,O
You,O
should,O
read,O
our,O
Certificate,O
of,O
Incorporation,O
and,O
By-Laws,O
for,O
the,O
provisions,O
that,O
are,O
important,O
to,O
you,O
.,O
,O
Copies,O
of,O
our,O
Certificate,O
of,O
Incorporation,O
and,O
By-Laws,O
are,O
available,O
upon,O
request,O
.,O
,O
Please,O
see,O
Where,O
You,O
Can,O
Find,O
Additional,O
Information,O
below,O
.,O
,O
As,O
used,O
in,O
this,O
Description,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
",",O
the,O
terms,O
our,O
",",O
ours,O
and,O
us,O
refer,O
only,O
to,O
AutoNation,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
corporation,O
",",O
and,O
not,O
",",O
unless,O
otherwise,O
indicated,O
",",O
to,O
any,O
of,O
its,O
subsidiaries,O
.,O
,O
Capital,O
Stock,O
Under,O
our,O
Certificate,O
of,O
Incorporation,O
",",O
our,O
authorized,O
capital,O
stock,O
consists,O
of,O
"1,500,000,000",O
shares,O
of,O
common,O
stock,O
",",O
$,O
0.01,O
par,O
value,O
",",O
and,O
"5,000,000",O
shares,O
of,O
preferred,O
stock,O
",",O
$,O
0.01,O
par,O
value,O
.,O
,O
As,O
of,O
February,O
12,O
",",O
2010,O
",",O
there,O
were,O
"170,518,986",O
shares,O
of,O
common,O
stock,O
issued,O
and,O
outstanding,O
and,O
no,O
shares,O
of,O
preferred,O
stock,O
issued,O
and,O
outstanding,O
.,O
,O
Common,O
Stock,O
Our,O
common,O
stock,O
is,O
listed,O
on,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
under,O
the,O
ticker,O
symbol,O
AN,I-BUSINESS
.,O
,O
Each,O
holder,O
of,O
shares,O
of,O
our,O
common,O
stock,O
is,O
entitled,O
to,O
one,O
vote,O
for,O
each,O
share,O
held,O
of,O
record,O
on,O
the,O
applicable,O
record,O
date,O
on,O
all,O
matters,O
submitted,O
to,O
a,O
vote,O
of,O
stockholders,O
.,O
,O
Subject,O
to,O
any,O
preferential,O
dividend,O
rights,O
granted,O
to,O
the,O
holders,O
of,O
any,O
shares,O
of,O
our,O
preferred,O
stock,O
that,O
may,O
at,O
the,O
time,O
be,O
outstanding,O
",",O
holders,O
of,O
our,O
common,O
stock,O
are,O
entitled,O
to,O
receive,O
dividends,O
as,O
may,O
be,O
declared,O
from,O
time,O
to,O
time,O
by,O
our,O
Board,O
of,O
Directors,O
(,O
Board,O
),O
out,O
of,O
funds,O
legally,O
available,O
therefor,O
.,O
,O
Upon,O
any,O
liquidation,O
or,O
dissolution,O
of,O
AutoNation,I-BUSINESS
",",O
holders,O
of,O
our,O
common,O
stock,O
are,O
entitled,O
to,O
share,O
pro,O
rata,O
in,O
all,O
remaining,O
assets,O
available,O
for,O
distribution,O
to,O
stockholders,O
after,O
payment,O
or,O
providing,O
for,O
our,O
liabilities,O
and,O
the,O
liquidation,O
preference,O
of,O
any,O
outstanding,O
preferred,O
stock,O
.,O
,O
Holders,O
of,O
our,O
common,O
stock,O
have,O
no,O
preemptive,O
right,O
to,O
purchase,O
",",O
subscribe,O
for,O
or,O
otherwise,O
acquire,O
any,O
unissued,O
or,O
treasury,O
shares,O
or,O
other,O
securities,O
.,O
,O
Preferred,O
Stock,O
Our,O
Certificate,O
of,O
Incorporation,O
authorizes,O
our,O
Board,O
to,O
create,O
preferred,O
stock,O
in,O
one,O
or,O
more,O
classes,O
or,O
series,O
and,O
to,O
fix,O
for,O
each,O
such,O
class,O
or,O
series,O
the,O
voting,O
powers,O
",",O
designations,O
",",O
preferences,O
and,O
relative,O
",",O
participating,O
",",O
optional,O
or,O
other,O
special,O
rights,O
and,O
any,O
qualifications,O
",",O
limitations,O
or,O
restrictions,O
thereof,O
.,O
,O
upon,O
the,O
dissolution,O
of,O
us,O
",",O
or,O
upon,O
any,O
distribution,O
of,O
our,O
assets,O
",",O
as,O
our,O
Board,O
may,O
establish,O
;,O
or,O
(,O
v,O
),O
convertible,O
into,O
",",O
or,O
exchangeable,O
for,O
",",O
shares,O
of,O
any,O
other,O
class,O
or,O
classes,O
of,O
stock,O
",",O
or,O
of,O
any,O
other,O
series,O
of,O
the,O
same,O
or,O
any,O
other,O
class,O
or,O
classes,O
of,O
stock,O
",",O
of,O
ours,O
at,O
such,O
price,O
or,O
prices,O
or,O
at,O
such,O
rates,O
of,O
exchange,O
and,O
with,O
such,O
adjustments,O
as,O
our,O
Board,O
may,O
establish,O
.,O
,O
Issuance,O
of,O
preferred,O
stock,O
could,O
discourage,O
bids,O
for,O
the,O
common,O
stock,O
at,O
a,O
premium,O
as,O
well,O
as,O
create,O
a,O
depressive,O
effect,O
on,O
the,O
market,O
price,O
of,O
the,O
common,O
stock,O
.,O
,O
As,O
of,O
the,O
date,O
hereof,O
",",O
no,O
shares,O
of,O
preferred,O
stock,O
are,O
outstanding,O
.,O
,O
Certain,O
Anti-Takeover,O
Provisions,O
of,O
Our,O
Certificate,O
of,O
Incorporation,O
and,O
By-Laws,O
and,O
the,O
DGCL,I-LEGISLATION/ACT
Certain,O
provisions,O
in,O
our,O
Certificate,O
of,O
Incorporation,O
and,O
By-Laws,O
and,O
the,O
DGCL,I-LEGISLATION/ACT
may,O
have,O
the,O
effect,O
of,O
delaying,O
",",O
deferring,O
or,O
discouraging,O
another,O
party,O
from,O
acquiring,O
us,O
.,O
,O
These,O
provisions,O
",",O
which,O
are,O
summarized,O
below,O
",",O
are,O
expected,O
to,O
discourage,O
coercive,O
takeover,O
practices,O
and,O
inadequate,O
takeover,O
bids,O
.,O
,O
These,O
provisions,O
are,O
also,O
designed,O
to,O
encourage,O
persons,O
seeking,O
to,O
acquire,O
control,O
of,O
us,O
to,O
first,O
negotiate,O
with,O
our,O
Board,O
.,O
,O
Advance,O
Notice,O
of,O
Shareholder,O
Proposals,O
or,O
Nominations,O
Our,O
By-Laws,O
provide,O
that,O
shareholders,O
at,O
an,O
annual,O
meeting,O
may,O
only,O
consider,O
proposals,O
or,O
nominations,O
specified,O
in,O
the,O
notice,O
of,O
meeting,O
or,O
brought,O
before,O
the,O
meeting,O
by,O
or,O
at,O
the,O
direction,O
of,O
the,O
Board,O
or,O
by,O
a,O
shareholder,O
who,O
was,O
a,O
shareholder,O
of,O
record,O
on,O
the,O
record,O
date,O
for,O
the,O
meeting,O
",",O
who,O
is,O
entitled,O
to,O
vote,O
at,O
the,O
meeting,O
and,O
who,O
has,O
given,O
to,O
our,O
Corporate,O
Secretary,O
timely,O
written,O
notice,O
",",O
in,O
proper,O
form,O
",",O
of,O
the,O
shareholder,O
s,O
intention,O
to,O
bring,O
that,O
proposal,O
or,O
nomination,O
before,O
the,O
meeting,O
.,O
,O
In,O
addition,O
to,O
certain,O
other,O
applicable,O
requirements,O
",",O
for,O
a,O
shareholder,O
proposal,O
or,O
nomination,O
to,O
be,O
properly,O
brought,O
before,O
an,O
annual,O
meeting,O
by,O
a,O
shareholder,O
",",O
such,O
shareholder,O
generally,O
must,O
have,O
given,O
notice,O
thereof,O
in,O
proper,O
written,O
form,O
to,O
our,O
Corporate,O
Secretary,O
not,O
less,O
than,O
90,O
days,O
nor,O
more,O
than,O
120,O
days,O
prior,O
to,O
the,O
anniversary,O
date,O
of,O
the,O
immediately,O
preceding,O
annual,O
meeting,O
of,O
shareholders,O
.,O
,O
Our,O
By-Laws,O
may,O
have,O
the,O
effect,O
of,O
precluding,O
the,O
conduct,O
of,O
certain,O
business,O
at,O
a,O
meeting,O
if,O
the,O
proper,O
procedures,O
are,O
not,O
followed,O
or,O
may,O
discourage,O
or,O
defer,O
a,O
potential,O
acquiror,O
from,O
conducting,O
a,O
solicitation,O
of,O
proxies,O
to,O
elect,O
its,O
own,O
slate,O
of,O
directors,O
or,O
otherwise,O
attempting,O
to,O
obtain,O
control,O
of,O
us,O
.,O
,O
Special,O
Meetings,O
of,O
Shareholders,O
Our,O
By-Laws,O
deny,O
shareholders,O
the,O
right,O
to,O
call,O
a,O
special,O
meeting,O
of,O
shareholders,O
.,O
,O
Our,O
By-Laws,O
provide,O
that,O
only,O
the,O
Board,O
may,O
call,O
special,O
meetings,O
of,O
the,O
shareholders,O
.,O
,O
Stockholders,O
are,O
permitted,O
under,O
our,O
By-Laws,O
to,O
act,O
by,O
written,O
consent,O
in,O
lieu,O
of,O
a,O
meeting,O
.,O
,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
We,O
are,O
a,O
Delaware,I-LOCATION
corporation,O
and,O
consequently,O
are,O
also,O
subject,O
to,O
certain,O
anti-takeover,O
provisions,O
of,O
the,O
DGCL,I-LEGISLATION/ACT
.,O
,O
Subject,O
to,O
certain,O
exceptions,O
",",O
Section,O
203,O
of,O
the,O
DGCL,I-LEGISLATION/ACT
prevents,O
a,O
publicly,O
held,O
Delaware,I-LOCATION
corporation,O
from,O
engaging,O
in,O
a,O
business,O
combination,O
with,O
any,O
interested,O
stockholder,O
for,O
three,O
years,O
following,O
the,O
date,O
that,O
the,O
person,O
became,O
an,O
interested,O
stockholder,O
",",O
unless,O
the,O
interested,O
stockholder,O
attained,O
such,O
status,O
with,O
the,O
approval,O
of,O
our,O
Board,O
or,O
unless,O
the,O
business,O
combination,O
is,O
approved,O
in,O
a,O
prescribed,O
manner,O
.,O
,O
A,O
business,O
combination,O
includes,O
",",O
among,O
other,O
things,O
",",O
a,O
merger,O
or,O
consolidation,O
involving,O
us,O
and,O
the,O
interested,O
stockholder,O
and,O
the,O
sale,O
of,O
more,O
than,O
10,O
%,O
of,O
our,O
assets,O
.,O
,O
In,O
general,O
",",O
an,O
interested,O
stockholder,O
is,O
any,O
entity,O
or,O
person,O
beneficially,O
owning,O
15,O
%,O
or,O
more,O
of,O
our,O
outstanding,O
voting,O
stock,O
and,O
any,O
entity,O
or,O
person,O
affiliated,O
with,O
or,O
controlling,O
or,O
controlled,O
by,O
such,O
entity,O
or,O
person,O
.,O
,O
Section,O
203,O
makes,O
it,O
more,O
difficult,O
for,O
an,O
interested,O
stockholder,O
to,O
effect,O
various,O
business,O
combinations,O
with,O
a,O
corporation,O
for,O
a,O
three-year,O
period,O
.,O
,O
This,O
statute,O
could,O
prohibit,O
or,O
delay,O
mergers,O
or,O
other,O
takeover,O
or,O
change,O
in,O
control,O
attempts,O
not,O
approved,O
in,O
advance,O
by,O
our,O
Board,O
and,O
as,O
a,O
result,O
could,O
discourage,O
attempts,O
to,O
acquire,O
us,O
",",O
which,O
could,O
depress,O
the,O
market,O
price,O
of,O
our,O
common,O
stock,O
.,O
,O
We,O
will,O
set,O
forth,O
in,O
the,O
applicable,O
prospectus,O
supplement,O
or,O
free,O
writing,O
prospectus,O
a,O
description,O
of,O
any,O
debt,O
securities,O
",",O
guarantees,O
of,O
debt,O
securities,O
",",O
warrants,O
",",O
subscription,O
rights,O
to,O
purchase,O
common,O
stock,O
or,O
preferred,O
stock,O
",",O
depositary,O
shares,O
",",O
stock,O
purchase,O
contracts,O
or,O
units,O
that,O
may,O
be,O
offered,O
under,O
this,O
prospectus,O
.,O
,O
The,O
securities,O
being,O
offered,O
hereby,O
may,O
be,O
sold,O
by,O
us,O
:,O
,O
We,O
will,O
identify,O
the,O
specific,O
plan,O
of,O
distribution,O
",",O
including,O
any,O
underwriters,O
",",O
dealers,O
",",O
agents,O
or,O
direct,O
purchasers,O
and,O
their,O
compensation,O
",",O
in,O
a,O
prospectus,O
supplement,O
or,O
a,O
free,O
writing,O
prospectus,O
.,O
,O
We,O
file,O
annual,O
",",O
quarterly,O
and,O
current,O
reports,O
",",O
proxy,O
statements,O
and,O
other,O
information,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
You,O
may,O
read,O
and,O
copy,O
this,O
information,O
at,O
the,O
SEC,I-GOVERNMENT
s,O
Public,O
Reference,O
Room,O
located,O
at,O
100,O
F,I-LOCATION
Street,I-LOCATION
",",O
N.E.,I-LOCATION
",",O
Room,O
1580,O
",",O
Washington,I-LOCATION
",",I-LOCATION
D.C,I-LOCATION
.,I-LOCATION
,O
You,O
may,O
obtain,O
information,O
on,O
the,O
operation,O
of,O
the,O
SEC,I-GOVERNMENT
s,O
Public,O
Reference,O
Room,O
by,O
calling,O
the,O
SEC,I-GOVERNMENT
at,O
1-800-SEC-0330,O
.,O
,O
The,O
SEC,I-GOVERNMENT
also,O
maintains,O
a,O
web,O
site,O
that,O
contains,O
reports,O
",",O
proxy,O
and,O
information,O
statements,O
and,O
other,O
information,O
regarding,O
issuers,O
that,O
file,O
electronically,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
The,O
address,O
of,O
the,O
site,O
is,O
http,O
:,O
//www.sec.gov,O
.,O
,O
The,O
SEC,I-GOVERNMENT
allows,O
us,O
to,O
incorporate,O
by,O
reference,O
information,O
into,O
this,O
document,O
.,O
,O
This,O
means,O
that,O
we,O
can,O
disclose,O
important,O
information,O
to,O
you,O
by,O
referring,O
you,O
to,O
another,O
document,O
filed,O
separately,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
The,O
information,O
incorporated,O
by,O
reference,O
is,O
considered,O
to,O
be,O
a,O
part,O
of,O
this,O
document,O
",",O
except,O
for,O
any,O
information,O
superseded,O
by,O
information,O
that,O
is,O
included,O
directly,O
in,O
this,O
document,O
or,O
incorporated,O
by,O
reference,O
subsequent,O
to,O
the,O
date,O
of,O
this,O
document,O
.,O
,O
This,O
prospectus,O
incorporates,O
by,O
reference,O
the,O
documents,O
listed,O
below,O
and,O
any,O
future,O
filings,O
that,O
we,O
make,O
with,O
the,O
SEC,I-GOVERNMENT
under,O
Section,O
13,O
(,O
a,O
),O
",",O
13,O
(,O
c,O
),O
",",O
14,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
other,O
than,O
information,O
in,O
the,O
documents,O
or,O
filings,O
that,O
is,O
deemed,O
to,O
have,O
been,O
furnished,O
and,O
not,O
filed,O
),O
after,O
the,O
date,O
of,O
this,O
prospectus,O
and,O
prior,O
to,O
the,O
termination,O
of,O
the,O
offering,O
.,O
,O
You,O
may,O
also,O
request,O
a,O
copy,O
of,O
any,O
documents,O
incorporated,O
by,O
reference,O
in,O
this,O
prospectus,O
(,O
including,O
any,O
exhibits,O
that,O
are,O
specifically,O
incorporated,O
by,O
reference,O
in,O
them,O
),O
",",O
at,O
no,O
cost,O
",",O
by,O
writing,O
or,O
telephoning,O
us,O
at,O
the,O
following,O
address,O
or,O
telephone,O
number,O
:,O
,O
C.,I-PERSON
Coleman,I-PERSON
G.,I-PERSON
Edmunds,I-PERSON
",",O
Senior,O
Vice,O
President,O
",",O
Deputy,O
General,O
Counsel,O
and,O
Assistant,O
Secretary,O
of,O
the,O
Company,O
and,O
Skadden,I-BUSINESS
",",I-BUSINESS
Arps,I-BUSINESS
",",I-BUSINESS
Slate,I-BUSINESS
",",I-BUSINESS
Meagher,I-BUSINESS
&,I-BUSINESS
Flom,I-BUSINESS
LLP,I-BUSINESS
",",O
Chicago,I-LOCATION
",",O
Illinois,I-LOCATION
will,O
pass,O
upon,O
the,O
validity,O
of,O
any,O
securities,O
issued,O
under,O
this,O
prospectus,O
.,O
,O
Edmunds,I-PERSON
owns,O
shares,O
of,O
our,O
common,O
stock,O
",",O
and,O
holds,O
stock,O
options,O
and,O
restricted,O
stock,O
awards,O
and,O
may,O
receive,O
additional,O
awards,O
in,O
the,O
future,O
.,O
,O
Any,O
underwriters,O
will,O
be,O
represented,O
by,O
their,O
own,O
legal,O
counsel,O
.,O
,O
The,O
consolidated,O
financial,O
statements,O
of,O
AutoNation,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
as,O
of,O
December,O
31,O
",",O
2009,O
and,O
2008,O
",",O
and,O
for,O
each,O
of,O
the,O
years,O
in,O
the,O
three-year,O
period,O
ended,O
December,O
31,O
",",O
2009,O
",",O
and,O
management,O
s,O
assessment,O
of,O
the,O
effectiveness,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
of,O
December,O
31,O
",",O
2009,O
have,O
been,O
incorporated,O
by,O
reference,O
herein,O
and,O
in,O
the,O
registration,O
statement,O
in,O
reliance,O
upon,O
the,O
reports,O
of,O
KPMG,I-BUSINESS
LLP,I-BUSINESS
",",O
independent,O
registered,O
public,O
accounting,O
firm,O
",",O
incorporated,O
by,O
reference,O
herein,O
",",O
and,O
upon,O
the,O
authority,O
of,O
said,O
firm,O
as,O
experts,O
in,O
accounting,O
and,O
auditing,O
.,O
,O
The,O
audit,O
report,O
covering,O
the,O
December,O
31,O
",",O
2009,O
consolidated,O
financial,O
statements,O
refers,O
to,O
the,O
adoption,O
of,O
FASB,I-LEGISLATION/ACT
Interpretation,I-LEGISLATION/ACT
No.,O
48,O
",",O
Accounting,I-MISCELLANEOUS
for,I-MISCELLANEOUS
Uncertainty,I-MISCELLANEOUS
in,I-MISCELLANEOUS
Income,I-MISCELLANEOUS
Taxes,I-MISCELLANEOUS
(,O
included,O
in,O
FASB,I-LEGISLATION/ACT
ASC,I-LEGISLATION/ACT
Topic,O
740,O
",",O
Income,I-MISCELLANEOUS
Taxes,I-MISCELLANEOUS
),O
",",O
effective,O
January,O
1,O
",",O
2007,O
.,O
,O
-DOCSTART-,O
,O
Filed,O
Pursuant,O
to,O
Rule,O
424,O
(,O
b,O
),O
(,O
3,O
),O
,O
This,O
Prospectus,O
Supplement,O
No.,O
5,O
supplements,O
and,O
amends,O
the,O
prospectus,O
dated,O
April,O
10,O
",",O
2009,O
",",O
as,O
supplemented,O
to,O
date,O
",",O
which,O
we,O
refer,O
to,O
as,O
the,O
Prospectus,O
.,O
,O
The,O
Prospectus,O
relates,O
to,O
the,O
resale,O
by,O
certain,O
selling,O
stockholders,O
of,O
up,O
to,O
"648,300",O
shares,O
of,O
our,O
common,O
stock,O
.,O
,O
On,O
January,O
7,O
",",O
2010,O
",",O
we,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
a,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
disclosing,O
under,O
Item,O
8.01,O
that,O
we,O
had,O
announced,O
four,O
anticipated,O
milestones,O
for,O
2010,O
.,O
,O
A,O
copy,O
of,O
this,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
is,O
included,O
in,O
this,O
Prospectus,O
Supplement,O
No.,O
5,O
",",O
however,O
",",O
the,O
information,O
in,O
Item,O
7.01,O
thereof,O
",",O
including,O
the,O
exhibits,O
attached,O
thereto,O
",",O
shall,O
not,O
be,O
deemed,O
filed,O
for,O
any,O
purpose,O
",",O
including,O
for,O
the,O
purposes,O
of,O
Section,O
18,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
or,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
or,O
otherwise,O
subject,O
to,O
the,O
liabilities,O
of,O
that,O
Section,O
",",O
and,O
shall,O
not,O
be,O
deemed,O
incorporated,O
by,O
reference,O
into,O
any,O
filing,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
or,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
regardless,O
of,O
any,O
general,O
incorporation,O
language,O
in,O
such,O
filing,O
.,O
,O
On,O
January,O
8,O
",",O
2010,O
",",O
we,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
a,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
disclosing,O
under,O
Item,O
5.02,O
the,O
resignation,O
of,O
Edward,I-PERSON
E.,I-PERSON
Penhoet,I-PERSON
",",O
Ph.D.,O
",",O
from,O
the,O
Corcept,O
Board,O
of,O
Directors,O
due,O
to,O
time,O
pressures,O
from,O
his,O
appointment,O
as,O
a,O
member,O
of,O
President,O
Obama,I-PERSON
s,O
Council,I-GOVERNMENT
of,I-GOVERNMENT
Advisors,I-GOVERNMENT
on,I-GOVERNMENT
Science,I-GOVERNMENT
and,I-GOVERNMENT
Technology,I-GOVERNMENT
.,O
,O
A,O
copy,O
of,O
this,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
is,O
included,O
in,O
this,O
Prospectus,O
Supplement,O
No.,O
This,O
Prospectus,O
Supplement,O
No.,O
5,O
should,O
be,O
read,O
in,O
conjunction,O
with,O
",",O
and,O
delivered,O
with,O
",",O
the,O
Prospectus,O
and,O
is,O
qualified,O
by,O
reference,O
to,O
the,O
Prospectus,O
except,O
to,O
the,O
extent,O
that,O
the,O
information,O
in,O
this,O
Prospectus,O
Supplement,O
No.,O
5,O
supersedes,O
the,O
information,O
contained,O
in,O
the,O
Prospectus,O
.,O
,O
All,O
references,O
in,O
the,O
Prospectus,O
to,O
this,O
prospectus,O
are,O
hereby,O
amended,O
to,O
read,O
this,O
prospectus,O
(,O
as,O
supplemented,O
and,O
amended,O
),O
.,O
,O
This,O
Prospectus,O
Supplement,O
No.,O
5,O
contains,O
forward-looking,O
statements,O
",",O
including,O
",",O
for,O
example,O
",",O
statements,O
relating,O
to,O
our,O
clinical,O
development,O
and,O
research,O
programs,O
",",O
the,O
timing,O
of,O
the,O
introduction,O
of,O
CORLUX,I-MISCELLANEOUS
and,O
future,O
product,O
candidates,O
",",O
including,O
CORT,I-MISCELLANEOUS
108297,I-MISCELLANEOUS
",",O
estimates,O
of,O
the,O
timing,O
of,O
enrollment,O
or,O
completion,O
of,O
our,O
clinical,O
trials,O
and,O
the,O
anticipated,O
results,O
of,O
those,O
trials,O
",",O
the,O
ability,O
to,O
create,O
value,O
from,O
CORLUX,I-MISCELLANEOUS
or,O
other,O
future,O
product,O
candidates,O
and,O
our,O
estimates,O
regarding,O
our,O
capital,O
requirements,O
",",O
spending,O
plans,O
and,O
needs,O
for,O
additional,O
financing,O
.,O
,O
Forward-looking,O
statements,O
are,O
subject,O
to,O
a,O
number,O
of,O
known,O
and,O
unknown,O
risks,O
and,O
uncertainties,O
that,O
might,O
cause,O
actual,O
results,O
to,O
differ,O
materially,O
from,O
those,O
expressed,O
or,O
implied,O
by,O
such,O
statements,O
.,O
,O
For,O
example,O
",",O
there,O
can,O
be,O
no,O
assurances,O
with,O
respect,O
to,O
the,O
cost,O
",",O
rate,O
of,O
spending,O
",",O
completion,O
or,O
success,O
of,O
clinical,O
trials,O
;,O
financial,O
projections,O
may,O
not,O
be,O
accurate,O
;,O
there,O
can,O
be,O
no,O
assurances,O
that,O
we,O
will,O
pursue,O
further,O
activities,O
with,O
respect,O
to,O
the,O
development,O
of,O
CORLUX,I-MISCELLANEOUS
",",O
CORT,I-MISCELLANEOUS
108297,I-MISCELLANEOUS
",",O
or,O
any,O
of,O
its,O
other,O
selective,O
GR-II,O
antagonists,O
.,O
,O
These,O
and,O
other,O
risk,O
factors,O
are,O
set,O
forth,O
in,O
our,O
SEC,I-GOVERNMENT
filings,O
.,O
,O
We,O
disclaim,O
any,O
intention,O
or,O
duty,O
to,O
update,O
any,O
forward-looking,O
statement,O
made,O
in,O
this,O
Prospectus,O
Supplement,O
No.,O
Our,O
common,O
stock,O
is,O
traded,O
on,O
the,O
Nasdaq,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
under,O
the,O
symbol,O
CORT,I-BUSINESS
.,O
,O
On,O
January,O
11,O
",",O
2010,O
",",O
the,O
closing,O
price,O
of,O
our,O
common,O
stock,O
was,O
$,O
3.13,O
.,O
,O
Investing,O
in,O
our,O
common,O
stock,O
involves,O
a,O
high,O
degree,O
of,O
risk,O
.,O
,O
Please,O
carefully,O
consider,O
the,O
Risk,O
Factors,O
beginning,O
on,O
page,O
4,O
of,O
the,O
accompanying,O
Prospectus,O
",",O
as,O
well,O
as,O
the,O
section,O
entitled,O
Risk,O
Factors,O
included,O
in,O
our,O
recent,O
quarterly,O
and,O
annual,O
reports,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
.,O
,O
Neither,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
nor,O
any,O
state,O
securities,O
commission,O
has,O
approved,O
or,O
disapproved,O
of,O
these,O
securities,O
or,O
determined,O
if,O
this,O
prospectus,O
supplement,O
or,O
the,O
accompanying,O
Prospectus,O
to,O
which,O
this,O
prospectus,O
supplement,O
relates,O
are,O
truthful,O
or,O
complete,O
.,O
,O
Any,O
representation,O
to,O
the,O
contrary,O
is,O
a,O
criminal,O
offense,O
.,O
,O
Check,O
the,O
appropriate,O
box,O
below,O
if,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filing,O
is,O
intended,O
to,O
simultaneously,O
satisfy,O
the,O
filing,O
obligation,O
of,O
the,O
registrant,O
under,O
any,O
of,O
the,O
following,O
provisions,O
(,O
see,O
General,O
Instruction,O
A.2,O
.,O
,O
Regulation,O
FD,O
Disclosure,O
On,O
January,O
5,O
",",O
2010,O
",",O
Corcept,I-BUSINESS
Therapeutic,I-BUSINESS
Incorporated,I-BUSINESS
(,O
the,O
Company,O
),O
issued,O
a,O
press,O
release,O
announcing,O
its,O
anticipated,O
milestones,O
for,O
2010,O
",",O
which,O
is,O
attached,O
hereto,O
as,O
Exhibit,O
99.1,O
and,O
incorporated,O
herein,O
by,O
reference,O
.,O
,O
The,O
information,O
in,O
this,O
Item,O
7.01,O
of,O
this,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
",",O
including,O
the,O
exhibits,O
attached,O
hereto,O
",",O
is,O
being,O
furnished,O
pursuant,O
to,O
Item,O
7.01,O
and,O
shall,O
not,O
be,O
deemed,O
filed,O
for,O
any,O
purpose,O
",",O
including,O
for,O
the,O
purposes,O
of,O
Section,O
18,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
or,O
otherwise,O
subject,O
to,O
the,O
liabilities,O
of,O
that,O
Section,O
.,O
,O
The,O
information,O
in,O
this,O
Item,O
7.01,O
of,O
this,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
",",O
including,O
the,O
exhibits,O
attached,O
hereto,O
",",O
shall,O
not,O
be,O
deemed,O
incorporated,O
by,O
reference,O
into,O
any,O
filing,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
or,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
regardless,O
of,O
any,O
general,O
incorporation,O
language,O
in,O
such,O
filing,O
.,O
,O
Other,O
Events,O
On,O
January,O
5,O
",",O
2010,O
",",O
the,O
Company,O
announced,O
four,O
anticipated,O
milestones,O
for,O
2010,O
:,O
,O
The,O
full,O
text,O
of,O
the,O
press,O
release,O
is,O
included,O
in,O
the,O
exhibit,O
to,O
this,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
.,O
,O
Item,O
9.01,O
Financial,O
Statements,O
and,O
Exhibits,O
.,O
,O
The,O
following,O
material,O
is,O
filed,O
as,O
an,O
exhibit,O
to,O
this,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
:,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
hereunto,O
duly,O
authorized,O
.,O
,O
MENLO,I-LOCATION
PARK,I-LOCATION
",",O
Calif.,I-LOCATION
",",O
(,O
January,O
5,O
",",O
2010,O
),O
—,O
Corcept,I-BUSINESS
Therapeutics,I-BUSINESS
Incorporated,I-BUSINESS
(,O
NASDAQ,I-BUSINESS
:,O
CORT,I-BUSINESS
),O
",",O
a,O
pharmaceutical,O
company,O
engaged,O
in,O
the,O
discovery,O
and,O
development,O
of,O
drugs,O
for,O
the,O
treatment,O
of,O
severe,O
metabolic,O
and,O
psychiatric,O
disorders,O
",",O
announces,O
its,O
anticipated,O
milestones,O
for,O
2010,O
.,O
,O
These,O
four,O
milestones,O
should,O
mark,O
a,O
transformational,O
year,O
for,O
the,O
company,O
said,O
Joseph,I-PERSON
K.,I-PERSON
Belanoff,I-PERSON
",",O
M.D.,O
",",O
Chief,O
Executive,O
Officer,O
of,O
Corcept,O
.,O
,O
Most,O
important,O
",",O
we,O
expect,O
to,O
complete,O
enrollment,O
in,O
our,O
pivotal,O
trial,O
of,O
CORLUX,I-BUSINESS
for,O
the,O
treatment,O
of,O
Cushing,I-MISCELLANEOUS
s,I-MISCELLANEOUS
Syndrome,I-MISCELLANEOUS
in,O
the,O
first,O
quarter,O
of,O
this,O
year,O
.,O
,O
The,O
results,O
of,O
this,O
trial,O
",",O
if,O
positive,O
",",O
should,O
support,O
an,O
NDA,I-MISCELLANEOUS
submission,O
by,O
year-end,O
and,O
",",O
if,O
approved,O
by,O
the,O
FDA,I-GOVERNMENT
",",O
commercialization,O
of,O
CORLUX,I-MISCELLANEOUS
in,O
2011,O
.,O
,O
We,O
are,O
focusing,O
our,O
efforts,O
on,O
preparing,O
to,O
make,O
CORLUX,I-MISCELLANEOUS
commercially,O
available,O
to,O
patients,O
and,O
address,O
this,O
significant,O
unmet,O
medical,O
need,O
.,O
,O
FOUR,O
KEY,O
MILESTONES,O
FOR,O
2010,O
We,O
expect,O
to,O
reach,O
major,O
milestones,O
related,O
to,O
our,O
development,O
of,O
CORLUX,O
and,O
our,O
selective,O
GR-II,I-MISCELLANEOUS
antagonists,I-MISCELLANEOUS
during,O
2010,O
:,O
CORLUX,I-MISCELLANEOUS
for,O
Cushing,I-MISCELLANEOUS
s,I-MISCELLANEOUS
Syndrome,I-MISCELLANEOUS
We,O
are,O
nearing,O
completion,O
of,O
enrollment,O
in,O
our,O
50-patient,O
open-label,O
Phase,O
3,O
study,O
of,O
CORLUX,I-MISCELLANEOUS
for,O
the,O
treatment,O
of,O
endogenous,O
Cushing,I-MISCELLANEOUS
s,I-MISCELLANEOUS
Syndrome,I-MISCELLANEOUS
",",O
a,O
serious,O
metabolic,O
disorder,O
affecting,O
approximately,O
"20,000",O
patients,O
in,O
the,O
US,I-LOCATION
.,I-LOCATION
,O
Based,O
on,O
the,O
timing,O
of,O
enrollment,O
and,O
the,O
6-month,O
glucose,O
tolerance,O
and,O
blood,O
pressure,O
endpoints,O
agreed,O
to,O
with,O
the,O
FDA,I-GOVERNMENT
",",O
we,O
anticipate,O
completing,O
patient,O
treatment,O
in,O
the,O
Phase,O
3,O
trial,O
of,O
CORLUX,I-MISCELLANEOUS
for,O
Cushing,I-MISCELLANEOUS
s,I-MISCELLANEOUS
Syndrome,I-MISCELLANEOUS
and,O
announcing,O
efficacy,O
results,O
in,O
3Q,O
2010,O
.,O
,O
We,O
expect,O
to,O
submit,O
our,O
NDA,I-MISCELLANEOUS
to,O
the,O
FDA,I-MISCELLANEOUS
in,O
the,O
fourth,O
quarter,O
of,O
2010,O
.,O
,O
Additional,O
studies,O
and,O
preparation,O
of,O
documentation,O
in,O
support,O
of,O
our,O
NDA,I-MISCELLANEOUS
submission,O
are,O
ongoing,O
",",O
which,O
should,O
enable,O
our,O
submission,O
soon,O
after,O
the,O
Phase,O
3,O
efficacy,O
results,O
are,O
available,O
.,O
,O
We,O
are,O
now,O
preparing,O
for,O
the,O
2011,O
commercialization,O
of,O
CORLUX,I-MISCELLANEOUS
in,O
the,O
United,I-LOCATION
States,I-LOCATION
and,O
pursuing,O
partnerships,O
for,O
commercialization,O
outside,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
Management,O
is,O
focused,O
on,O
making,O
this,O
potential,O
treatment,O
available,O
to,O
patients,O
in,O
an,O
expeditious,O
and,O
efficient,O
manner,O
.,O
,O
The,O
FDA,I-GOVERNMENT
granted,O
us,O
Orphan,O
Drug,O
Designation,O
for,O
CORLUX,I-MISCELLANEOUS
for,O
the,O
treatment,O
of,O
endogenous,O
Cushing,I-MISCELLANEOUS
s,I-MISCELLANEOUS
Syndrome,I-MISCELLANEOUS
",",O
which,O
provides,O
seven,O
years,O
of,O
marketing,O
exclusivity,O
in,O
the,O
U.S.,I-LOCATION
from,O
the,O
date,O
of,O
approval,O
",",O
as,O
well,O
as,O
potential,O
tax,O
credits,O
related,O
to,O
product,O
development,O
expenses,O
.,O
,O
Selective,O
GR-II,I-MISCELLANEOUS
Antagonist,I-MISCELLANEOUS
CORT,B-MISCELLANEOUS
108297,I-MISCELLANEOUS
for,O
the,O
Prevention,O
of,O
Weight,O
Gain,O
Caused,O
by,O
Antipsychotic,O
Medication,O
We,O
plan,O
to,O
begin,O
enrollment,O
in,O
the,O
Phase,O
1,O
study,O
of,O
our,O
lead,O
selective,O
GR-II,I-MISCELLANEOUS
antagonist,I-MISCELLANEOUS
",",O
CORT,I-MISCELLANEOUS
108297,I-MISCELLANEOUS
",",O
in,O
the,O
first,O
quarter,O
of,O
2010,O
",",O
based,O
on,O
the,O
Investigational,I-MISCELLANEOUS
New,I-MISCELLANEOUS
Drug,I-MISCELLANEOUS
(,O
IND,I-MISCELLANEOUS
),O
application,O
we,O
submitted,O
to,O
the,O
FDA,I-GOVERNMENT
in,O
December,O
2009,O
.,O
,O
The,O
study,O
is,O
a,O
single,O
ascending,O
dose,O
safety,O
and,O
tolerability,O
study,O
in,O
healthy,O
volunteers,O
",",O
which,O
should,O
be,O
completed,O
by,O
year-end,O
2010,O
.,O
,O
If,O
successful,O
",",O
this,O
study,O
should,O
support,O
advancing,O
CORT,I-MISCELLANEOUS
108297,I-MISCELLANEOUS
into,O
additional,O
trials,O
evaluating,O
its,O
safety,O
and,O
efficacy,O
in,O
the,O
prevention,O
of,O
weight,O
gain,O
and,O
other,O
metabolic,O
effects,O
caused,O
by,O
antipsychotic,O
medications,O
",",O
a,O
major,O
unmet,O
medical,O
need,O
in,O
a,O
large,O
market,O
.,O
,O
During,O
2010,O
we,O
plan,O
to,O
continue,O
our,O
research,O
and,O
preclinical,O
efforts,O
to,O
advance,O
additional,O
compounds,O
within,O
our,O
three,O
distinct,O
series,O
of,O
selective,O
GR-II,I-MISCELLANEOUS
antagonists,I-MISCELLANEOUS
.,O
,O
Based,O
on,O
the,O
published,O
literature,O
",",O
the,O
regulation,O
of,O
cortisol,O
could,O
have,O
applications,O
in,O
a,O
wide,O
array,O
of,O
serious,O
diseases,O
",",O
including,O
diabetes,O
",",O
obesity,O
",",O
hypertension,O
",",O
osteoporosis,O
",",O
Alzheimer,I-MISCELLANEOUS
s,I-MISCELLANEOUS
disease,I-MISCELLANEOUS
",",O
and,O
other,O
neurodegenerative,O
diseases,O
.,O
,O
CORLUX,I-MISCELLANEOUS
for,O
Psychotic,O
Depression,O
We,O
plan,O
to,O
continue,O
enrolling,O
patients,O
in,O
our,O
Phase,O
3,O
trial,O
of,O
CORLUX,I-MISCELLANEOUS
for,O
the,O
treatment,O
of,O
psychotic,O
depression,O
.,O
,O
As,O
previously,O
announced,O
",",O
we,O
are,O
conducting,O
the,O
trial,O
at,O
eight,O
clinical,O
sites,O
to,O
focus,O
our,O
resources,O
on,O
completion,O
of,O
our,O
NDA,I-MISCELLANEOUS
and,O
the,O
near-term,O
commercialization,O
of,O
CORLUX,I-MISCELLANEOUS
for,O
the,O
Cushing,I-MISCELLANEOUS
s,I-MISCELLANEOUS
Syndrome,I-MISCELLANEOUS
indication,O
.,O
,O
With,O
this,O
reduced,O
number,O
of,O
sites,O
",",O
we,O
do,O
not,O
expect,O
data,O
from,O
this,O
trial,O
to,O
be,O
available,O
during,O
2010,O
.,O
,O
About,O
Cushing,I-MISCELLANEOUS
s,I-MISCELLANEOUS
Syndrome,I-MISCELLANEOUS
Endogenous,O
Cushing,I-MISCELLANEOUS
s,I-MISCELLANEOUS
Syndrome,I-MISCELLANEOUS
is,O
caused,O
by,O
prolonged,O
exposure,O
of,O
the,O
body,O
s,O
tissues,O
to,O
high,O
levels,O
of,O
the,O
hormone,O
cortisol,O
due,O
to,O
a,O
variety,O
of,O
pathologic,O
conditions,O
.,O
,O
Cushing,I-MISCELLANEOUS
s,I-MISCELLANEOUS
Syndrome,I-MISCELLANEOUS
is,O
an,O
orphan,O
indication,O
which,O
most,O
commonly,O
affects,O
adults,O
aged,O
20,O
to,O
50,O
.,O
,O
An,O
estimated,O
10,O
to,O
15,O
of,O
every,O
one,O
million,O
people,O
are,O
newly,O
diagnosed,O
with,O
this,O
syndrome,O
each,O
year,O
",",O
resulting,O
in,O
over,O
"3,000",O
new,O
patients,O
in,O
the,O
US,I-LOCATION
.,O
,O
An,O
estimated,O
"20,000",O
patients,O
in,O
the,O
US,I-LOCATION
have,O
Cushing,I-MISCELLANEOUS
s,I-MISCELLANEOUS
Syndrome,I-MISCELLANEOUS
.,O
,O
Symptoms,O
vary,O
",",O
but,O
most,O
people,O
have,O
one,O
or,O
more,O
of,O
the,O
following,O
manifestations,O
:,O
high,O
blood,O
sugar,O
",",O
diabetes,O
",",O
high,O
blood,O
pressure,O
",",O
upper,O
body,O
obesity,O
",",O
rounded,O
face,O
",",O
increased,O
fat,O
around,O
the,O
neck,O
",",O
thinning,O
arms,O
and,O
legs,O
",",O
severe,O
fatigue,O
and,O
weak,O
muscles,O
.,O
,O
Irritability,O
",",O
anxiety,O
",",O
cognitive,O
disturbances,O
and,O
depression,O
are,O
common,O
.,O
,O
Cushing,I-MISCELLANEOUS
s,I-MISCELLANEOUS
Syndrome,I-MISCELLANEOUS
can,O
affect,O
every,O
organ,O
system,O
in,O
the,O
body,O
and,O
can,O
be,O
lethal,O
if,O
not,O
treated,O
effectively,O
.,O
,O
There,O
is,O
no,O
FDA-approved,I-MISCELLANEOUS
treatment,O
for,O
Cushing,I-MISCELLANEOUS
s,I-MISCELLANEOUS
Syndrome,I-MISCELLANEOUS
.,O
,O
About,O
Psychotic,O
Depression,O
Psychotic,O
depression,O
is,O
a,O
serious,O
psychiatric,O
disorder,O
that,O
affects,O
approximately,O
three,O
million,O
people,O
annually,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
It,O
is,O
more,O
prevalent,O
than,O
either,O
schizophrenia,I-MISCELLANEOUS
or,O
bipolar,I-MISCELLANEOUS
I,I-MISCELLANEOUS
disorder,I-MISCELLANEOUS
.,O
,O
The,O
disorder,O
is,O
characterized,O
by,O
severe,O
depression,O
accompanied,O
by,O
delusions,O
",",O
hallucinations,O
or,O
both,O
.,O
,O
People,O
with,O
psychotic,O
depression,O
are,O
approximately,O
70,O
times,O
more,O
likely,O
to,O
commit,O
suicide,O
than,O
the,O
general,O
population,O
and,O
often,O
require,O
lengthy,O
and,O
expensive,O
hospital,O
stays,O
.,O
,O
There,O
is,O
no,O
FDA-approved,I-MISCELLANEOUS
treatment,O
for,O
psychotic,O
depression,O
.,O
,O
About,O
Weight,O
Gain,O
Caused,O
by,O
Antipsychotics,O
The,O
group,O
of,O
medications,O
known,O
as,O
atypical,O
antipsychotics,O
",",O
including,O
olanzapine,I-MISCELLANEOUS
",",O
risperidone,I-MISCELLANEOUS
",",O
clozapine,I-MISCELLANEOUS
and,O
quetiapine,I-MISCELLANEOUS
",",O
are,O
widely,O
used,O
to,O
treat,O
schizophrenia,I-MISCELLANEOUS
and,O
bipolar,I-MISCELLANEOUS
disorder,I-MISCELLANEOUS
.,O
,O
All,O
medications,O
in,O
this,O
group,O
are,O
associated,O
with,O
treatment,O
emergent,O
weight,O
gain,O
of,O
varying,O
degrees,O
and,O
carry,O
warning,O
labels,O
relating,O
to,O
treatment,O
emergent,O
hyperglycemia,I-MISCELLANEOUS
and,O
diabetes,I-MISCELLANEOUS
mellitus,I-MISCELLANEOUS
.,O
,O
Weight,O
gain,O
and,O
alterations,O
in,O
metabolic,O
efficiency,O
have,O
been,O
observed,O
for,O
many,O
years,O
in,O
patients,O
with,O
abnormally,O
high,O
circulating,O
cortisol,O
.,O
,O
There,O
is,O
no,O
FDA-approved,I-MISCELLANEOUS
treatment,O
for,O
the,O
weight,O
gain,O
associated,O
with,O
the,O
use,O
of,O
antipsychotic,O
medications,O
.,O
,O
About,O
CORLUX,I-MISCELLANEOUS
Corcept,I-BUSINESS
s,O
first-generation,O
compound,O
",",O
CORLUX,I-MISCELLANEOUS
",",O
also,O
known,O
as,O
mifepristone,I-MISCELLANEOUS
",",O
directly,O
blocks,O
the,O
GR-II,I-MISCELLANEOUS
(,O
cortisol,O
),O
receptor,O
and,O
the,O
progesterone,O
receptor,O
.,O
,O
Intellectual,O
property,O
protection,O
is,O
in,O
place,O
to,O
protect,O
important,O
methods,O
of,O
use,O
for,O
CORLUX,I-MISCELLANEOUS
.,O
,O
Corcept,I-BUSINESS
retains,O
worldwide,O
rights,O
to,O
its,O
intellectual,O
property,O
related,O
to,O
CORLUX,I-MISCELLANEOUS
.,O
,O
About,O
CORT,I-MISCELLANEOUS
108297,I-MISCELLANEOUS
CORT,B-MISCELLANEOUS
108297,I-MISCELLANEOUS
is,O
one,O
of,O
several,O
potent,O
",",O
selective,O
antagonists,O
of,O
the,O
GR-II,I-MISCELLANEOUS
receptor,I-MISCELLANEOUS
that,O
we,O
have,O
discovered,O
and,O
for,O
which,O
Corcept,I-BUSINESS
owns,O
worldwide,O
intellectual,O
property,O
rights,O
.,O
,O
In,O
in,O
vitro,O
binding,O
affinity,O
and,O
functional,O
assays,O
it,O
does,O
not,O
have,O
affinity,O
for,O
the,O
PR,I-MISCELLANEOUS
(,O
progesterone,I-MISCELLANEOUS
),O
",",O
ER,I-MISCELLANEOUS
(,O
estrogen,I-MISCELLANEOUS
),O
",",O
AR,I-MISCELLANEOUS
(,O
androgen,I-MISCELLANEOUS
),O
or,O
GR-I,I-MISCELLANEOUS
(,O
mineralocorticoid,I-MISCELLANEOUS
),O
receptors,O
.,O
,O
About,O
Corcept,I-BUSINESS
Therapeutics,I-BUSINESS
Incorporated,I-BUSINESS
Corcept,B-BUSINESS
is,O
a,O
pharmaceutical,O
company,O
engaged,O
in,O
the,O
discovery,O
and,O
development,O
of,O
drugs,O
for,O
the,O
treatment,O
of,O
severe,O
metabolic,O
and,O
psychiatric,O
disorders,O
.,O
,O
The,O
company,O
has,O
two,O
Phase,O
3,O
programs,O
ongoing,O
;,O
CORLUX,I-BUSINESS
for,O
the,O
treatment,O
of,O
Cushing,I-MISCELLANEOUS
s,I-MISCELLANEOUS
Syndrome,I-MISCELLANEOUS
and,O
CORLUX,I-MISCELLANEOUS
for,O
the,O
treatment,O
of,O
the,O
psychotic,O
features,O
of,O
psychotic,O
depression,O
.,O
,O
Corcept,I-BUSINESS
has,O
also,O
developed,O
an,O
extensive,O
intellectual,O
property,O
portfolio,O
that,O
covers,O
the,O
use,O
of,O
GR-II,I-MISCELLANEOUS
antagonists,I-MISCELLANEOUS
in,O
the,O
treatment,O
of,O
a,O
wide,O
variety,O
of,O
psychiatric,O
and,O
metabolic,O
disorders,O
",",O
including,O
the,O
prevention,O
of,O
weight,O
gain,O
caused,O
by,O
the,O
use,O
of,O
antipsychotic,O
medication,O
.,O
,O
Statements,O
made,O
in,O
this,O
news,O
release,O
",",O
other,O
than,O
statements,O
of,O
historical,O
fact,O
",",O
are,O
forward-looking,O
statements,O
",",O
including,O
",",O
for,O
example,O
",",O
statements,O
relating,O
to,O
Corcept,I-BUSINESS
s,O
clinical,O
development,O
and,O
research,O
programs,O
",",O
the,O
timing,O
of,O
the,O
introduction,O
of,O
CORLUX,I-MISCELLANEOUS
and,O
future,O
product,O
candidates,O
",",O
including,O
CORT,I-MISCELLANEOUS
108297,I-MISCELLANEOUS
",",O
estimates,O
of,O
the,O
timing,O
of,O
enrollment,O
or,O
completion,O
of,O
our,O
clinical,O
trials,O
and,O
the,O
anticipated,O
results,O
of,O
those,O
trials,O
",",O
the,O
ability,O
to,O
create,O
value,O
from,O
CORLUX,I-MISCELLANEOUS
or,O
other,O
future,O
product,O
candidates,O
and,O
our,O
estimates,O
regarding,O
our,O
capital,O
requirements,O
",",O
spending,O
plans,O
and,O
needs,O
for,O
additional,O
financing,O
.,O
,O
known,O
and,O
unknown,O
risks,O
and,O
uncertainties,O
that,O
might,O
cause,O
actual,O
results,O
to,O
differ,O
materially,O
from,O
those,O
expressed,O
or,O
implied,O
by,O
such,O
statements,O
.,O
,O
For,O
example,O
",",O
there,O
can,O
be,O
no,O
assurances,O
with,O
respect,O
to,O
the,O
cost,O
",",O
rate,O
of,O
spending,O
",",O
completion,O
or,O
success,O
of,O
clinical,O
trials,O
;,O
financial,O
projections,O
may,O
not,O
be,O
accurate,O
;,O
there,O
can,O
be,O
no,O
assurances,O
that,O
Corcept,O
will,O
pursue,O
further,O
activities,O
with,O
respect,O
to,O
the,O
development,O
of,O
CORLUX,I-MISCELLANEOUS
",",O
CORT,I-MISCELLANEOUS
108297,I-MISCELLANEOUS
",",O
or,O
any,O
of,O
its,O
other,O
selective,O
GR-II,I-MISCELLANEOUS
antagonists,I-MISCELLANEOUS
.,O
,O
These,O
and,O
other,O
risk,O
factors,O
are,O
set,O
forth,O
in,O
the,O
Company,O
s,O
SEC,I-GOVERNMENT
filings,O
",",O
all,O
of,O
which,O
are,O
available,O
from,O
our,O
website,O
(,O
www.corcept.com,O
),O
or,O
from,O
the,O
SEC,I-GOVERNMENT
s,O
website,O
(,O
www.sec.gov,O
),O
.,O
,O
We,O
disclaim,O
any,O
intention,O
or,O
duty,O
to,O
update,O
any,O
forward-looking,O
statement,O
made,O
in,O
this,O
news,O
release,O
.,O
,O
Check,O
the,O
appropriate,O
box,O
below,O
if,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filing,O
is,O
intended,O
to,O
simultaneously,O
satisfy,O
the,O
filing,O
obligation,O
of,O
the,O
registrant,O
under,O
any,O
of,O
the,O
following,O
provisions,O
(,O
see,O
General,O
Instruction,O
A.2,O
.,O
,O
Item,O
5.02,O
Departure,O
of,O
Directors,O
or,O
Certain,O
Officers,O
;,O
Election,O
of,O
Directors,O
;,O
Appointment,O
of,O
Certain,O
Officers,O
;,O
Compensation,O
Arrangements,O
of,O
Certain,O
Officers,O
(,O
b,O
),O
On,O
January,O
5,O
",",O
2010,O
",",O
Corcept,I-BUSINESS
Therapeutics,I-BUSINESS
Incorporated,I-BUSINESS
(,O
the,O
Company,O
),O
was,O
advised,O
by,O
Edward,I-PERSON
E.,I-PERSON
Penhoet,I-PERSON
",",O
Ph.D.,O
",",O
of,O
his,O
decision,O
to,O
resign,O
from,O
the,O
Corcept,I-BUSINESS
Board,O
of,O
Directors,O
due,O
to,O
time,O
constraints,O
associated,O
with,O
his,O
appointment,O
as,O
a,O
member,O
of,O
President,O
Obama,I-PERSON
s,O
Council,I-GOVERNMENT
of,I-GOVERNMENT
Advisors,I-GOVERNMENT
on,I-GOVERNMENT
Science,I-GOVERNMENT
and,I-GOVERNMENT
Technology,I-GOVERNMENT
(,O
PCAST,I-GOVERNMENT
),O
.,O
,O
PCAST,I-GOVERNMENT
is,O
an,O
advisory,O
group,O
comprised,O
of,O
20,O
of,O
the,O
nation,O
s,O
leading,O
scientists,O
and,O
engineers,O
who,O
directly,O
advise,O
the,O
President,O
and,O
the,O
Executive,O
Office,O
of,O
the,O
President,O
.,O
,O
PCAST,I-GOVERNMENT
makes,O
policy,O
recommendations,O
in,O
the,O
many,O
areas,O
where,O
understanding,O
of,O
science,O
",",O
technology,O
",",O
and,O
innovation,O
is,O
key,O
to,O
strengthening,O
our,O
economy,O
and,O
forming,O
policy,O
that,O
works,O
for,O
the,O
American,I-MISCELLANEOUS
people,O
.,O
,O
Penhoet,I-PERSON
has,O
served,O
as,O
a,O
member,O
of,O
the,O
Corcept,I-BUSINESS
Board,O
since,O
June,O
2008,O
.,O
,O
He,O
has,O
served,O
as,O
a,O
Director,O
of,O
Alta,I-BUSINESS
Partners,I-BUSINESS
",",I-BUSINESS
LLP,I-BUSINESS
",",O
a,O
venture,O
capital,O
firm,O
",",O
since,O
2000,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
hereunto,O
duly,O
authorized,O
.,O
,O
-DOCSTART-,O
,O
Filed,O
pursuant,O
to,O
Rule,O
425,O
Filed,O
by,O
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
Pursuant,O
to,O
Rule,O
425,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
and,O
deemed,O
filed,O
pursuant,O
to,O
Rule,O
14a-12,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
Subject,O
Company,O
:,O
Switch,I-BUSINESS
&,I-BUSINESS
Data,I-BUSINESS
Facilities,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
(,O
Commission,O
File,O
No.,O
001-33302,O
),O
The,O
following,O
are,O
portions,O
of,O
a,O
transcript,O
of,O
an,O
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
investor,O
presentation,O
given,O
on,O
January,O
6,O
",",O
2010,O
at,O
the,O
Citi,I-MISCELLANEOUS
Global,I-MISCELLANEOUS
Entertainment,I-MISCELLANEOUS
",",I-MISCELLANEOUS
Media,I-MISCELLANEOUS
",",I-MISCELLANEOUS
and,I-MISCELLANEOUS
Telecommunications,I-MISCELLANEOUS
Conference,I-MISCELLANEOUS
:,O
Mike,I-PERSON
Rollins,I-PERSON
Citi,I-BUSINESS
Investment,I-BUSINESS
Research,I-BUSINESS
Analyst,O
,O
Can,O
you,O
give,O
us,O
an,O
update,O
on,O
your,O
pending,O
acquisition,O
of,O
Switch,I-BUSINESS
&,I-BUSINESS
Data,I-BUSINESS
?,O
,O
Keith,I-PERSON
Taylor,I-PERSON
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.—CFO,I-BUSINESS
,O
Yes,O
",",O
the,O
update,O
on,O
Switch,I-BUSINESS
&,I-BUSINESS
Data,I-BUSINESS
.,I-BUSINESS
,O
We,O
just,O
released,O
an,O
8-K,I-MISCELLANEOUS
",",O
probably,O
within,O
the,O
last,O
hour,O
",",O
that,O
basically,O
says,O
that,O
the,O
Department,I-GOVERNMENT
of,I-GOVERNMENT
Justice,I-GOVERNMENT
",",O
or,O
the,O
HSR,I-LEGISLATION/ACT
work,O
",",O
has,O
gone,O
to,O
a,O
second,O
request,O
.,O
,O
And,O
so,O
a,O
second,O
request,O
really,O
puts,O
more,O
time,O
on,O
to,O
this,O
review,O
.,O
,O
And,O
ultimately,O
what,O
we,O
think,O
today,O
now,O
is,O
that,O
this,O
is,O
a,O
Q2,O
closing,O
versus,O
a,O
Q1,O
closing,O
and,O
so,O
that,O
is,O
sort,O
of,O
hot,O
off,O
the,O
press,O
.,O
,O
Mike,I-PERSON
Rollins,I-PERSON
Citi,I-BUSINESS
Investment,I-BUSINESS
Research,I-BUSINESS
Analyst,O
,O
Anything,O
else,O
in,O
terms,O
of,O
—,O
any,O
other,O
updates,O
in,O
terms,O
of,O
the,O
acquisition,O
?,O
,O
I,O
know,O
that,O
last,O
month,O
",",O
you,O
highlighted,O
some,O
synergy,O
opportunities,O
for,O
the,O
combination,O
.,O
,O
Maybe,O
you,O
can,O
go,O
into,O
a,O
little,O
more,O
detail,O
of,O
what,O
the,O
amount,O
was,O
and,O
what,O
that,O
s,O
for,O
?,O
,O
Is,O
that,O
a,O
revenue,O
and,O
cost,O
synergy,O
or,O
just,O
a,O
cost,O
synergy,O
?,O
,O
Keith,I-PERSON
Taylor,I-PERSON
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.—CFO,I-BUSINESS
,O
Sure,O
.,O
,O
I,O
think,O
first,O
and,O
foremost,O
",",O
when,O
I,O
look,O
at,O
the,O
two,O
organizations,O
",",O
obviously,O
",",O
they,O
have,O
—,O
they,O
think,O
well,O
together,O
.,O
,O
We,O
sort,O
of,O
existed,O
in,O
the,O
same,O
environment,O
.,O
,O
So,O
the,O
relationship,O
between,O
our,O
company,O
and,O
the,O
Switch,I-BUSINESS
&,I-BUSINESS
Data,I-BUSINESS
company,O
is,O
very,O
",",O
very,O
strong,O
.,O
,O
I,O
think,O
the,O
teams,O
that,O
are,O
working,O
together,O
to,O
think,O
about,O
how,O
to,O
put,O
the,O
businesses,O
together,O
",",O
again,O
",",O
are,O
doing,O
extremely,O
well,O
",",O
given,O
the,O
fact,O
that,O
it,O
is,O
going,O
to,O
be,O
a,O
merger,O
of,O
two,O
companies,O
or,O
the,O
acquisition,O
of,O
Switch,I-BUSINESS
&,I-BUSINESS
Data,I-BUSINESS
.,O
,O
That,O
all,O
said,O
",",O
when,O
you,O
think,O
about,O
economically,O
what,O
s,O
going,O
to,O
happen,O
",",O
there,O
is,O
the,O
assumption,O
that,O
we,O
re,O
going,O
to,O
derive,O
a,O
lot,O
of,O
synergies,O
out,O
of,O
the,O
transaction,O
.,O
,O
And,O
no,O
matter,O
what,O
line,O
on,O
the,O
P,O
&,O
L,O
you,O
look,O
at,O
",",O
we,O
think,O
that,O
there,O
s,O
an,O
opportunity,O
.,O
,O
And,O
",",O
certainly,O
",",O
there,O
are,O
opportunities,O
to,O
remove,O
costs,O
that,O
are,O
duplicative,O
.,O
,O
But,O
there,O
are,O
also,O
opportunities,O
to,O
get,O
leverage,O
off,O
the,O
cost,O
of,O
running,O
a,O
business,O
.,O
,O
We,O
have,O
power,O
purchase,O
agreements,O
with,O
certain,O
vendors,O
in,O
unregulated,O
markets,O
.,O
,O
They,O
don,O
t,O
necessarily,O
have,O
those,O
.,O
,O
And,O
so,O
by,O
taking,O
their,O
contract,O
and,O
working,O
it,O
into,O
our,O
contract,O
",",O
we,O
can,O
influence,O
the,O
overall,O
costs,O
of,O
operating,O
their,O
data,O
centers,O
.,O
,O
Then,O
you,O
think,O
about,O
cost,O
of,O
capital,O
",",O
we,O
think,O
the,O
combination,O
of,O
the,O
two,O
businesses,O
and,O
the,O
lower,O
gross,O
leverage,O
will,O
allow,O
us,O
to,O
find,O
cheaper,O
sources,O
of,O
capital,O
for,O
the,O
combined,O
business,O
.,O
,O
Then,O
lastly,O
",",O
I,O
will,O
tell,O
you,O
that,O
when,O
you,O
think,O
about,O
tax,O
and,O
the,O
NOLs,O
",",O
there,O
are,O
some,O
certain,O
advantages,O
from,O
a,O
tax,O
perspective,O
",",O
and,O
so,O
that,O
will,O
benefit,O
us,O
as,O
well,O
.,O
,O
So,O
we,O
put,O
at,O
least,O
a,O
floor,O
into,O
the,O
market,O
today,O
saying,O
we,O
think,O
the,O
synergies,O
are,O
$,O
20,O
million,O
or,O
better,O
.,O
,O
But,O
I,O
think,O
my,O
view,O
is,O
this,O
is,O
a,O
great,O
opportunity,O
for,O
the,O
combination,O
of,O
two,O
good,O
companies,O
and,O
we,O
ll,O
just,O
have,O
to,O
wait,O
until,O
Q2,O
and,O
hopefully,O
get,O
through,O
the,O
Department,I-GOVERNMENT
of,I-GOVERNMENT
Justice,I-GOVERNMENT
review,O
.,O
,O
Mike,I-PERSON
Rollins,I-PERSON
Citi,I-BUSINESS
Investment,I-BUSINESS
Research,I-BUSINESS
Analyst,O
,O
And,O
so,O
the,O
synergy,O
number,O
I,O
think,O
was,O
$,O
20,O
million,O
?,O
,O
Keith,I-PERSON
Taylor,I-PERSON
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.—CFO,I-BUSINESS
,O
$,O
20,O
million,O
.,O
,O
Mike,I-PERSON
Rollins,I-PERSON
Citi,I-BUSINESS
Investment,I-BUSINESS
Research,I-BUSINESS
Analyst,O
,O
And,O
is,O
that,O
just,O
cost,O
?,O
,O
Keith,I-PERSON
Taylor,I-PERSON
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.—CFO,I-BUSINESS
,O
It,O
s,O
predominantly,O
cost,O
",",O
yes,O
.,O
,O
And,O
cost,O
on,O
the,O
operating,O
line,O
.,O
,O
I,O
m,O
not,O
talking,O
about,O
interest,O
or,O
taxes,O
.,O
,O
Mike,I-PERSON
Rollins,I-PERSON
Citi,I-BUSINESS
Investment,I-BUSINESS
Research,I-BUSINESS
Analyst,O
,O
The,O
other,O
part,O
of,O
the,O
process,O
with,O
the,O
pending,O
acquisition,O
is,O
filing,O
an,O
S-4,I-MISCELLANEOUS
.,O
,O
And,O
in,O
its,O
S-4,I-MISCELLANEOUS
document,O
",",O
Equinix,I-BUSINESS
included,O
an,O
outlook,O
for,O
revenue,O
",",O
OIBITDA,O
",",O
and,O
CapEx,O
between,O
2009,O
and,O
2014,O
.,O
,O
And,O
the,O
Company,O
has,O
already,O
indicated,O
that,O
that,O
s,O
not,O
guidance,O
.,O
,O
Keith,I-PERSON
Taylor,I-PERSON
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.—CFO,I-BUSINESS
,O
Yes,O
.,O
,O
Mike,I-PERSON
Rollins,I-PERSON
Citi,I-BUSINESS
Investment,I-BUSINESS
Research,I-BUSINESS
Analyst,O
,O
But,O
can,O
you,O
help,O
investors,O
understand,O
how,O
they,O
should,O
be,O
using,O
this,O
information,O
?,O
,O
And,O
one,O
of,O
the,O
things,O
I,O
m,O
assuming,O
is,O
the,O
09,O
CapEx,O
number,O
",",O
which,O
is,O
bigger,O
than,O
the,O
guidance,O
",",O
includes,O
acquisitions,O
",",O
or,O
may,O
include,O
acquisitions,O
.,O
,O
So,O
can,O
you,O
help,O
us,O
understand,O
sort,O
of,O
what,O
s,O
in,O
those,O
numbers,O
and,O
how,O
investors,O
should,O
use,O
that,O
information,O
?,O
,O
Keith,I-PERSON
Taylor,I-PERSON
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.—CFO,I-BUSINESS
,O
Sure,O
.,O
,O
And,O
obviously,O
a,O
lot,O
of,O
that,O
was,O
asked,O
today,O
in,O
our,O
one-on-one,O
meetings,O
.,O
,O
First,O
and,O
foremost,O
",",O
let,O
me,O
deal,O
with,O
2009,O
.,O
,O
The,O
number,O
that,O
we,O
provided,O
—,O
it,O
s,O
not,O
—,O
let,O
me,O
take,O
a,O
step,O
back,O
.,O
,O
What,O
is,O
included,O
in,O
the,O
S-4,I-MISCELLANEOUS
is,O
basically,O
a,O
plan,O
",",O
a,O
plan,O
of,O
what,O
could,O
we,O
do,O
over,O
a,O
five-year,O
period,O
.,O
,O
That,O
plan,O
is,O
2009,O
",",O
it,O
s,O
lower,O
than,O
projected,O
guidance,O
for,O
2009,O
.,O
,O
In,O
fact,O
",",O
it,O
s,O
lower,O
—,O
and,O
that,O
s,O
on,O
the,O
revenue,O
line,O
",",O
and,O
EBITDA,O
line,O
.,O
,O
And,O
it,O
gives,O
you,O
outlook,O
to,O
2010,O
as,O
well,O
",",O
and,O
it,O
s,O
slightly,O
lower,O
than,O
what,O
we,O
give,O
you,O
on,O
a,O
growth,O
rate,O
for,O
2010,O
.,O
,O
That,O
all,O
said,O
",",O
the,O
fact,O
then,O
because,O
of,O
now,O
giving,O
guidance,O
on,O
Q3,O
that,O
was,O
different,O
than,O
that,O
tells,O
you,O
that,O
we,O
did,O
that,O
plan,O
well,O
in,O
advance,O
of,O
our,O
Q3,O
numbers,O
.,O
,O
Q3,O
was,O
a,O
great,O
quarter,O
for,O
us,O
.,O
,O
By,O
all,O
accounts,O
",",O
we,O
think,O
we,O
knocked,O
it,O
out,O
of,O
the,O
park,O
.,O
,O
We,O
felt,O
very,O
good,O
about,O
our,O
numbers,O
",",O
and,O
so,O
the,O
numbers,O
moved,O
up,O
.,O
,O
Now,O
",",O
all,O
that,O
said,O
",",O
embedded,O
in,O
that,O
2009,O
disclosure,O
was,O
a,O
CapEx,O
line,O
of,O
$,O
509,O
million,O
.,O
,O
$,O
50,O
million,O
of,O
that,O
is,O
basically,O
the,O
covered,O
call,O
that,O
we,O
used,O
with,O
the,O
—,O
and,O
it,O
was,O
just,O
where,O
it,O
got,O
allocated,O
in,O
the,O
business,O
",",O
in,O
the,O
model,O
.,O
,O
And,O
recognizing,O
the,O
business,O
model,O
",",O
the,O
financial,O
model,O
that,O
we,O
shared,O
with,O
Raymond,I-PERSON
James,I-PERSON
",",O
who,O
was,O
the,O
advisor,O
providing,O
the,O
fairness,O
opinion,O
to,O
Switch,I-BUSINESS
&,I-BUSINESS
Data,I-BUSINESS
",",O
that,O
was,O
the,O
outflow,O
where,O
the,O
CapEx,O
got,O
allocated,O
.,O
,O
But,O
$,O
50,O
million,O
of,O
that,O
was,O
the,O
covered,O
call,O
",",O
which,O
was,O
",",O
again,O
",",O
a,O
very,O
big,O
transaction,O
I,O
think,O
we,O
did,O
.,O
,O
Mike,I-PERSON
Rollins,I-PERSON
Citi,I-BUSINESS
Investment,I-BUSINESS
Research,I-BUSINESS
Analyst,O
,O
Just,O
for,O
people,O
who,O
are,O
less,O
familiar,O
",",O
the,O
covered,O
call,O
that,O
you,O
re,O
saying,O
",",O
was,O
that,O
was,O
associated,O
with,O
the,O
convertible,O
debt,O
—,O
Keith,I-PERSON
Taylor,I-PERSON
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.—CFO,I-BUSINESS
,O
Convertible,O
in,O
June,O
.,O
,O
Mike,I-PERSON
Rollins,I-PERSON
Citi,I-BUSINESS
Investment,I-BUSINESS
Research,I-BUSINESS
Analyst,O
,O
Issued,O
earlier,O
in,O
the,O
year,O
?,O
,O
Keith,I-PERSON
Taylor,I-PERSON
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.—CFO,I-BUSINESS
,O
Yes,O
.,O
,O
So,O
it,O
was,O
a,O
financial,O
transaction,O
.,O
,O
So,O
really,O
the,O
CapEx,O
line,O
there,O
was,O
$,O
459,O
million,O
.,O
,O
Mike,I-PERSON
Rollins,I-PERSON
Citi,I-BUSINESS
Investment,I-BUSINESS
Research,I-BUSINESS
Analyst,O
,O
And,O
just,O
thinking,O
about,O
the,O
investment,O
that,O
you,O
are,O
making,O
in,O
Switch,I-BUSINESS
&,I-BUSINESS
Data,I-BUSINESS
",",O
does,O
that,O
then,O
count,O
towards,O
some,O
of,O
that,O
revenue,O
capacity,O
and,O
CapEx,O
?,O
,O
So,O
in,O
a,O
way,O
",",O
is,O
there,O
a,O
risk,O
that,O
looking,O
at,O
that,O
plan,O
is,O
double,O
accounting,O
because,O
in,O
a,O
way,O
you,O
are,O
buying,O
a,O
lot,O
of,O
the,O
capacity,O
and,O
some,O
of,O
the,O
expansion,O
that,O
I,O
think,O
you,O
were,O
originally,O
hoping,O
to,O
do,O
.,O
,O
Keith,I-PERSON
Taylor,I-PERSON
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.—CFO,I-BUSINESS
,O
The,O
plan,O
did,O
not,O
contemplate,O
any,O
duplication,O
with,O
Switch,I-BUSINESS
&,I-BUSINESS
Data,I-BUSINESS
.,O
,O
The,O
only,O
place,O
where,O
we,O
will,O
get,O
a,O
little,O
bit,O
of,O
—,O
not,O
a,O
little,O
bit,O
—,O
more,O
meaningful,O
capacity,O
is,O
in,O
New,I-LOCATION
York,I-LOCATION
",",O
and,O
we,O
get,O
a,O
little,O
bit,O
of,O
capacity,O
in,O
Dallas,I-LOCATION
.,O
,O
But,O
overall,O
",",O
these,O
are,O
all,O
new,O
markets,O
that,O
we,O
want,O
—,O
that,O
s,O
an,O
organic,O
plan,O
where,O
we,O
wanted,O
to,O
be,O
as,O
an,O
industry,O
",",O
or,O
as,O
a,O
company,O
.,O
,O
And,O
so,O
that,O
s,O
what,O
we,O
think,O
we,O
can,O
do,O
.,O
,O
When,O
you,O
throw,O
on,O
Switch,I-BUSINESS
&,I-BUSINESS
Data,I-BUSINESS
",",O
there,O
s,O
an,O
opportunity,O
that,O
is,O
even,O
greater,O
.,O
,O
So,O
I,O
don,O
t,O
think,O
it,O
s,O
going,O
to,O
displace,O
any,O
meaningful,O
CapEx,O
.,O
,O
I,O
think,O
it,O
might,O
defer,O
it,O
for,O
a,O
short,O
period,O
of,O
time,O
.,O
,O
But,O
in,O
New,I-LOCATION
York,I-LOCATION
",",O
the,O
biggest,O
issue,O
—,O
and,O
we,O
re,O
quite,O
concerned,O
.,O
,O
Even,O
though,O
we,O
re,O
in,O
construction,O
today,O
for,O
the,O
final,O
phase,O
of,O
our,O
New,I-MISCELLANEOUS
York-4,I-MISCELLANEOUS
Phase,I-MISCELLANEOUS
III,I-MISCELLANEOUS
asset,O
",",O
that,O
we,O
will,O
run,O
out,O
of,O
capacity,O
very,O
",",O
very,O
quickly,O
because,O
that,O
gives,O
you,O
a,O
sense,O
of,O
the,O
pent-up,O
demand,O
for,O
that,O
asset,O
.,O
,O
Mike,I-PERSON
Rollins,I-PERSON
Citi,I-BUSINESS
Investment,I-BUSINESS
Research,I-BUSINESS
Analyst,O
,O
And,O
so,O
just,O
one,O
last,O
question,O
on,O
this,O
.,O
,O
So,O
the,O
business,O
case,O
that,O
was,O
in,O
the,O
S-4,I-MISCELLANEOUS
",",O
did,O
that,O
assume,O
some,O
geographic,O
expansion,O
",",O
or,O
was,O
that,O
just,O
reinvestment,O
in,O
markets,O
that,O
you,O
are,O
currently,O
in,O
around,O
the,O
globe,O
?,O
,O
Keith,I-PERSON
Taylor,I-PERSON
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.—CFO,I-BUSINESS
,O
Vastly,O
reinvestment,O
in,O
the,O
markets,O
we,O
re,O
in,O
.,O
,O
So,O
it,O
s,O
building,O
the,O
D.C.-7,I-MISCELLANEOUS
and,O
the,O
D.C.-8,I-MISCELLANEOUS
",",O
the,O
Silicon,I-MISCELLANEOUS
Valley-6,I-MISCELLANEOUS
s,O
and,O
the,O
like,O
.,O
,O
It,O
gives,O
you,O
—,O
takes,O
you,O
one,O
step,O
further,O
ahead,O
.,O
,O
Mike,I-PERSON
Rollins,I-PERSON
Citi,I-BUSINESS
Investment,I-BUSINESS
Research,I-BUSINESS
Analyst,O
,O
Yes,O
",",O
as,O
you,O
re,O
trying,O
to,O
get,O
deeper,O
into,O
enterprise,O
",",O
are,O
you,O
doing,O
anything,O
new,O
on,O
the,O
distribution,O
side,O
",",O
shifting,O
more,O
of,O
this,O
on,O
resellers,O
or,O
agents,O
?,O
,O
Or,O
is,O
there,O
anything,O
we,O
should,O
be,O
looking,O
out,O
for,O
on,O
that,O
front,O
?,O
,O
Keith,I-PERSON
Taylor,I-PERSON
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.—CFO,I-BUSINESS
,O
We,O
re,O
going,O
to,O
put,O
probably,O
our,O
sales,O
organization,O
in,O
place,O
that,O
will,O
be,O
in,O
markets,O
where,O
we,O
actually,O
don,O
t,O
have,O
assets,O
.,O
,O
And,O
selling,O
from,O
those,O
assets,O
into,O
our,O
assets,O
",",O
and,O
then,O
just,O
the,O
combination,O
of,O
an,O
Equinix,I-BUSINESS
Switch,B-BUSINESS
&,I-BUSINESS
Data,I-BUSINESS
business,O
gives,O
us,O
16,O
other,O
markets,O
that,O
we,O
will,O
go,O
after,O
and,O
I,O
just,O
see,O
a,O
great,O
opportunity,O
.,O
,O
Keith,I-PERSON
Taylor,I-PERSON
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.—CFO,I-BUSINESS
,O
Over,O
time,O
we,O
ll,O
continue,O
to,O
think,O
about,O
the,O
REIT,O
structure,O
",",O
whether,O
or,O
not,O
we,O
can,O
take,O
any,O
of,O
our,O
assets,O
",",O
put,O
them,O
into,O
a,O
REIT,O
structure,O
to,O
become,O
more,O
tax,O
efficient,O
.,O
,O
That,O
said,O
",",O
we,O
do,O
have,O
NOLs,O
;,O
we,O
have,O
meaningful,O
NOLs,O
.,O
,O
And,O
with,O
a,O
combination,O
of,O
again,O
Equinix,I-BUSINESS
and,O
Switch,I-BUSINESS
&,I-BUSINESS
Data,I-BUSINESS
",",O
there,O
s,O
some,O
tax,O
advantages,O
to,O
this,O
as,O
well,O
.,O
,O
And,O
so,O
that,O
would,O
potentially,O
delay,O
that,O
decision,O
even,O
further,O
with,O
the,O
right,O
structure,O
and,O
looking,O
at,O
the,O
382,O
limitations,O
on,O
their,O
NOLs,O
.,O
,O
This,O
document,O
contains,O
forward-looking,O
statements,O
that,O
involve,O
risks,O
and,O
uncertainties,O
.,O
,O
Actual,O
results,O
may,O
differ,O
materially,O
from,O
expectations,O
discussed,O
in,O
such,O
forward-looking,O
statements,O
.,O
,O
failure,O
to,O
receive,O
significant,O
revenue,O
from,O
customers,O
in,O
recently,O
built,O
out,O
data,O
centers,O
;,O
failure,O
to,O
complete,O
any,O
financing,O
arrangements,O
contemplated,O
from,O
time,O
to,O
time,O
;,O
competition,O
from,O
existing,O
and,O
new,O
competitors,O
;,O
the,O
ability,O
to,O
generate,O
sufficient,O
cash,O
flow,O
or,O
otherwise,O
obtain,O
funds,O
to,O
repay,O
new,O
or,O
outstanding,O
indebtedness,O
;,O
the,O
loss,O
or,O
decline,O
in,O
business,O
from,O
our,O
key,O
customers,O
;,O
the,O
results,O
of,O
any,O
litigation,O
relating,O
to,O
past,O
stock,O
option,O
grants,O
and,O
practices,O
;,O
and,O
other,O
risks,O
described,O
from,O
time,O
to,O
time,O
in,O
Equinix,O
s,O
filings,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
.,O
,O
In,O
particular,O
",",O
see,O
Equinix,I-BUSINESS
s,O
recent,O
quarterly,O
and,O
annual,O
reports,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
copies,O
of,O
which,O
are,O
available,O
upon,O
request,O
from,O
Equinix,I-BUSINESS
.,O
,O
Equinix,I-BUSINESS
does,O
not,O
assume,O
any,O
obligation,O
to,O
update,O
the,O
forward-looking,O
information,O
contained,O
in,O
this,O
filing,O
.,O
,O
Equinix,I-BUSINESS
and,O
IBX,I-MISCELLANEOUS
are,O
registered,O
trademarks,O
of,O
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
International,I-MISCELLANEOUS
Business,I-MISCELLANEOUS
Exchange,I-MISCELLANEOUS
is,O
a,O
trademark,O
of,O
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
Important,O
Information,O
for,O
Investors,O
and,O
Stockholders,O
In,O
connection,O
with,O
the,O
proposed,O
transaction,O
involving,O
Equinix,I-BUSINESS
and,O
Switch,I-BUSINESS
and,I-BUSINESS
Data,I-BUSINESS
",",O
Equinix,I-BUSINESS
has,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
a,O
registration,O
Statement,O
on,O
Form,I-MISCELLANEOUS
S-4,I-MISCELLANEOUS
containing,O
a,O
proxy,O
statement/prospectus,O
.,O
,O
The,O
proxy,O
statement/prospectus,O
was,O
first,O
mailed,O
to,O
stockholders,O
of,O
Switch,I-BUSINESS
and,I-BUSINESS
Data,I-BUSINESS
on,O
or,O
about,O
December,O
23,O
",",O
2009,O
.,O
,O
SWITCH,I-BUSINESS
AND,I-BUSINESS
DATA,I-BUSINESS
STOCKHOLDERS,O
ARE,O
URGED,O
TO,O
READ,O
THE,O
PROXY,O
STATEMENT/PROSPECTUS,O
AND,O
OTHER,O
DOCUMENTS,O
FILED,O
WITH,O
THE,O
SEC,I-GOVERNMENT
CAREFULLY,O
IN,O
THEIR,O
ENTIRETY,O
BECAUSE,O
THEY,O
WILL,O
CONTAIN,O
IMPORTANT,O
INFORMATION,O
ABOUT,O
THE,O
PROPOSED,O
TRANSACTION,O
.,O
,O
Switch,I-BUSINESS
and,I-BUSINESS
Data,I-BUSINESS
stockholders,O
may,O
obtain,O
free,O
copies,O
of,O
the,O
registration,O
statement,O
and,O
the,O
proxy,O
statement/prospectus,O
and,O
other,O
documents,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
by,O
Equinix,I-BUSINESS
and,O
Switch,I-BUSINESS
and,I-BUSINESS
Data,I-BUSINESS
through,O
the,O
website,O
maintained,O
by,O
the,O
SEC,I-GOVERNMENT
at,O
www.sec.gov,O
.,O
,O
In,O
addition,O
",",O
Switch,I-BUSINESS
and,I-BUSINESS
Data,I-BUSINESS
stockholders,O
may,O
obtain,O
free,O
copies,O
of,O
the,O
registration,O
statement,O
and,O
the,O
proxy,O
statement/prospectus,O
and,O
other,O
documents,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
from,O
Equinix,I-BUSINESS
by,O
directing,O
a,O
request,O
to,O
Equinix,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
301,O
Velocity,I-LOCATION
Way,I-LOCATION
",",O
Fifth,O
Floor,O
",",O
Foster,I-LOCATION
City,I-LOCATION
",",O
CA,I-LOCATION
94404,O
",",O
Attention,O
:,O
Investor,O
Relations,O
(,O
telephone,O
:,O
888-222-1162,O
),O
or,O
going,O
to,O
Equinix,I-BUSINESS
s,O
corporate,O
website,O
at,O
www.equinix.com,O
",",O
or,O
from,O
Switch,I-BUSINESS
and,I-BUSINESS
Data,I-BUSINESS
by,O
directing,O
a,O
request,O
to,O
Switch,I-BUSINESS
&,I-BUSINESS
Data,I-BUSINESS
Facilities,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
1715,O
Westshore,I-LOCATION
Boulevard,I-LOCATION
",",O
Suite,O
650,O
",",O
Tampa,I-LOCATION
",",O
FL,I-LOCATION
33607,O
",",O
Attention,O
:,O
Investor,O
Relations,O
(,O
telephone,O
:,O
866-797-2633,O
),O
or,O
going,O
to,O
Switch,I-BUSINESS
and,I-BUSINESS
Data,I-BUSINESS
s,O
corporate,O
website,O
at,O
www.switchanddata.com,O
.,O
,O
Equinix,I-BUSINESS
",",O
Switch,I-BUSINESS
and,I-BUSINESS
Data,I-BUSINESS
and,O
their,O
respective,O
directors,O
and,O
executive,O
officers,O
may,O
be,O
deemed,O
to,O
be,O
participants,O
in,O
the,O
solicitation,O
of,O
proxies,O
in,O
respect,O
of,O
the,O
proposed,O
transaction,O
.,O
,O
Information,O
regarding,O
Equinix,I-BUSINESS
s,O
directors,O
and,O
executive,O
officers,O
is,O
contained,O
in,O
its,O
annual,O
proxy,O
statement,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
on,O
April,O
23,O
",",O
2009,O
.,O
,O
Information,O
regarding,O
Switch,I-BUSINESS
and,I-BUSINESS
Data,I-BUSINESS
s,O
directors,O
and,O
executive,O
officers,O
is,O
contained,O
in,O
Switch,I-BUSINESS
and,I-BUSINESS
Data,I-BUSINESS
s,O
annual,O
proxy,O
statement,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
on,O
April,O
6,O
",",O
2009,O
.,O
,O
Additional,O
information,O
regarding,O
the,O
interests,O
of,O
such,O
potential,O
participants,O
is,O
included,O
in,O
the,O
Proxy,O
Statement/Prospectus,O
and,O
the,O
other,O
relevant,O
documents,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
-DOCSTART-,O
,O
Morgan,I-BUSINESS
Securities,I-BUSINESS
LLC,I-BUSINESS
(,O
f/k/a,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
Inc.,I-BUSINESS
),O
,O
Morgan,I-BUSINESS
Securities,I-BUSINESS
”,O
),O
;,O
Bear,I-BUSINESS
Stearns,I-BUSINESS
Asset,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
(,O
“,O
BSAM,I-BUSINESS
”,O
),O
;,O
Bear,I-BUSINESS
Stearns,I-BUSINESS
Health,I-BUSINESS
Innoventures,I-BUSINESS
Management,I-BUSINESS
",",I-BUSINESS
L.L.C.,I-BUSINESS
(,O
“,O
BSHIM,I-BUSINESS
”,O
),O
;,O
BSCGP,I-BUSINESS
Inc.,I-BUSINESS
(,O
“,O
BSCGP,I-BUSINESS
”,O
),O
;,O
Constellation,I-BUSINESS
Growth,I-BUSINESS
Capital,I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
Constellation,I-BUSINESS
”,O
),O
;,O
Constellation,I-BUSINESS
Ventures,I-BUSINESS
Management,I-BUSINESS
II,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
Constellation,I-BUSINESS
II,I-BUSINESS
”,O
),O
;,O
Highbridge,I-BUSINESS
Capital,I-BUSINESS
Management,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
Highbridge,I-BUSINESS
”,O
),O
;,O
JF,I-BUSINESS
International,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
(,O
“,O
JFIMI,I-BUSINESS
”,O
),O
;,O
JPMorgan,I-BUSINESS
Asset,I-BUSINESS
Management,I-BUSINESS
(,I-BUSINESS
UK,I-BUSINESS
),I-BUSINESS
Limited,I-BUSINESS
(,O
“,O
JPMAMUK,I-BUSINESS
”,O
),O
;,O
JPMorgan,I-BUSINESS
Distribution,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Morgan,I-BUSINESS
Institutional,I-BUSINESS
Investments,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Morgan,I-BUSINESS
Investment,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
,O
Morgan,I-BUSINESS
Latin,I-BUSINESS
America,I-BUSINESS
Management,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
JPMLAM,I-BUSINESS
”,O
),O
;,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Partners,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
JPMP,I-BUSINESS
”,O
),O
;,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Private,I-BUSINESS
Investments,I-BUSINESS
Inc.,I-BUSINESS
(,O
“,O
JPMPI,I-BUSINESS
”,O
),O
;,O
OEP,I-BUSINESS
Co-Investors,I-BUSINESS
Management,I-BUSINESS
II,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
(,O
“,O
OEP,I-BUSINESS
II,I-BUSINESS
”,O
),O
;,O
OEP,I-BUSINESS
Co-Investors,I-BUSINESS
Management,I-BUSINESS
III,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
(,O
“,O
OEP,I-BUSINESS
III,I-BUSINESS
”,O
",",O
and,O
together,O
with,O
OEP,I-BUSINESS
II,I-BUSINESS
",",O
the,O
“,O
OEP,I-BUSINESS
Entities,I-BUSINESS
”,O
),O
;,O
Security,I-BUSINESS
Capital,I-BUSINESS
Research,I-BUSINESS
&,I-BUSINESS
Management,I-BUSINESS
Incorporated,I-BUSINESS
(,O
“,O
Security,I-BUSINESS
Capital,I-BUSINESS
”,O
),O
;,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
Street,I-BUSINESS
GP,I-BUSINESS
Corporation,I-BUSINESS
(,O
“,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
GP,I-BUSINESS
”,O
),O
;,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
Street,I-BUSINESS
Management,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
Management,I-BUSINESS
”,O
),O
;,O
and,O
Technology,I-BUSINESS
Coinvestors,I-BUSINESS
Management,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
TCM,I-BUSINESS
”,O
),O
(,O
collectively,O
",",O
the,O
“,O
Applicants,O
”,O
),O
each,O
hereby,O
applies,O
pursuant,O
to,O
Section,O
9,O
(,O
c,O
),O
of,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
“,O
Act,O
”,O
),O
",",O
for,O
(,O
i,O
),O
an,O
order,O
of,O
temporary,O
exemption,O
from,O
Section,O
9,O
(,O
a,O
),O
pending,O
the,O
determination,O
of,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
the,O
“,O
Commission,O
”,O
),O
on,O
this,O
application,O
(,O
“,O
Application,O
”,O
),O
for,O
an,O
order,O
of,O
permanent,O
exemption,O
and,O
(,O
ii,O
),O
a,O
permanent,O
order,O
exempting,O
each,O
Applicant,O
from,O
the,O
provisions,O
of,O
Section,O
9,O
(,O
a,O
),O
of,O
the,O
Act,O
in,O
respect,O
of,O
the,O
permanent,O
injunction,O
",",O
as,O
described,O
below,O
",",O
that,O
has,O
been,O
entered,O
against,O
J.P.,I-BUSINESS
.,O
,O
Other,O
than,O
the,O
Applicants,O
",",O
no,O
existing,O
company,O
of,O
which,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
is,O
an,O
affiliated,O
person,O
currently,O
serves,O
as,O
an,O
investment,O
adviser,O
(,O
as,O
defined,O
in,O
Section,O
2,O
(,O
a,O
),O
(,O
20,O
),O
of,O
the,O
Act,O
),O
",",O
depositor,O
",",O
or,O
principal,O
underwriter,O
(,O
as,O
defined,O
in,O
Section,O
2,O
(,O
a,O
),O
(,O
29,O
),O
of,O
the,O
Act,O
),O
for,O
any,O
registered,O
investment,O
company,O
",",O
including,O
registered,O
management,O
companies,O
",",O
registered,O
unit,O
investment,O
trusts,O
(,O
“,O
UITs,O
”,O
),O
",",O
or,O
registered,O
face,O
amount,O
certificate,O
companies,O
",",O
or,O
investment,O
adviser,O
to,O
employees,O
’,O
securities,O
companies,O
(,O
as,O
defined,O
in,O
Section,O
2,O
(,O
a,O
),O
(,O
13,O
),O
of,O
the,O
Act,O
),O
subject,O
to,O
Section,O
9,O
of,O
the,O
Act,O
(,O
“,O
ESCs,O
”,O
),O
.,O
,O
Applicants,O
request,O
that,O
any,O
relief,O
granted,O
by,O
the,O
Commission,O
pursuant,O
to,O
this,O
Application,O
also,O
apply,O
to,O
any,O
other,O
existing,O
company,O
of,O
which,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
is,O
an,O
affiliated,O
person,O
within,O
the,O
meaning,O
of,O
Section,O
2,O
(,O
a,O
),O
(,O
3,O
),O
of,O
the,O
Act,O
and,O
to,O
any,O
other,O
company,O
of,O
which,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
may,O
become,O
an,O
affiliated,O
person,O
in,O
the,O
future,O
(,O
together,O
with,O
the,O
Applicants,O
",",O
the,O
“,O
Covered,O
Persons,O
”,O
),O
.,O
,O
Applicants,O
request,O
that,O
the,O
temporary,O
order,O
remain,O
in,O
effect,O
until,O
the,O
Commission,O
acts,O
on,O
the,O
Application,O
for,O
the,O
permanent,O
order,O
.,O
,O
Morgan,I-BUSINESS
Securities,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
limited,O
liability,O
company,O
",",O
is,O
registered,O
as,O
a,O
broker-dealer,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
“,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
”,O
),O
and,O
is,O
registered,O
as,O
an,O
investment,O
adviser,O
under,O
the,O
Investment,I-LEGISLATION/ACT
Advisers,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
“,O
Advisers,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
”,O
),O
.,O
,O
Morgan,I-BUSINESS
Securities,I-BUSINESS
does,O
not,O
currently,O
serve,O
as,O
investment,O
adviser,O
",",O
sub-adviser,O
",",O
depositor,O
or,O
principal,O
underwriter,O
to,O
any,O
of,O
the,O
Funds,O
.,O
,O
The,O
ultimate,O
parent,O
of,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
is,O
JPMorgan,I-BUSINESS
Chase,I-BUSINESS
&,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
JPMC,I-BUSINESS
is,O
a,O
financial,O
services,O
holding,O
company,O
whose,O
businesses,O
provide,O
a,O
broad,O
range,O
of,O
financial,O
services,O
to,O
consumer,O
and,O
corporate,O
customers,O
.,O
,O
JPMC,I-BUSINESS
is,O
also,O
the,O
ultimate,O
parent,O
of,O
the,O
other,O
Applicants,O
.,O
,O
The,O
Funds,O
for,O
which,O
the,O
Applicants,O
currently,O
serve,O
as,O
investment,O
adviser,O
",",O
sub-adviser,O
",",O
general,O
partner,O
or,O
principal,O
underwriter,O
are,O
identified,O
in,O
Exhibit,O
A,O
.,O
The,O
other,O
Applicants,O
",",O
as,O
subsidiaries,O
of,O
the,O
same,O
ultimate,O
parent,O
",",O
are,O
under,O
common,O
control,O
with,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
is,O
an,O
affiliated,O
person,O
of,O
the,O
other,O
Applicants,O
within,O
the,O
meaning,O
of,O
Section,O
2,O
(,O
a,O
),O
(,O
3,O
),O
of,O
the,O
Act,O
.,O
,O
BSAM,I-BUSINESS
",",O
a,O
New,I-LOCATION
York,I-LOCATION
corporation,O
",",O
is,O
registered,O
as,O
an,O
investment,O
adviser,O
under,O
the,O
Advisers,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
investment,O
adviser,O
or,O
sub-adviser,O
to,O
various,O
Funds,O
",",O
including,O
as,O
general,O
partner,O
that,O
provides,O
investment,O
advisory,O
services,O
to,O
various,O
ESCs,O
.,O
,O
BSAM,I-BUSINESS
is,O
a,O
wholly-owned,O
subsidiary,O
of,O
JPMC,I-BUSINESS
.,O
,O
“,O
Funds,O
”,O
refer,O
to,O
any,O
registered,O
investment,O
company,O
or,O
ESC,O
for,O
which,O
a,O
Covered,O
Person,O
serves,O
as,O
an,O
investment,O
adviser,O
",",O
sub-adviser,O
",",O
general,O
partner,O
or,O
depositor,O
",",O
or,O
any,O
registered,O
open-end,O
investment,O
company,O
",",O
registered,O
UIT,O
or,O
registered,O
face,O
amount,O
certificate,O
company,O
for,O
which,O
a,O
Covered,O
Person,O
serves,O
as,O
principal,O
underwriter,O
.,O
,O
Every,O
Applicant,O
that,O
is,O
a,O
general,O
partner,O
that,O
provides,O
investment,O
advisory,O
services,O
to,O
one,O
or,O
more,O
ESCs,I-BUSINESS
believes,O
",",O
for,O
purposes,O
of,O
this,O
Application,O
",",O
that,O
it,O
is,O
performing,O
a,O
function,O
that,O
falls,O
within,O
the,O
definition,O
of,O
“,O
investment,O
adviser,O
”,O
in,O
Section,O
2,O
(,O
a,O
),O
(,O
20,O
),O
of,O
the,O
Act,O
.,O
,O
BSHIM,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
limited,O
liability,O
corporation,O
",",O
and,O
BSCGP,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
corporation,O
",",O
serve,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
general,O
partners,O
that,O
provide,O
investment,O
advisory,O
services,O
to,O
various,O
ESCs,O
.,O
,O
BSHIM,I-BUSINESS
and,O
BSCGP,I-BUSINESS
are,O
wholly-owned,O
subsidiaries,O
of,O
JPMC,I-BUSINESS
.,O
,O
Constellation,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
limited,O
liability,O
corporation,O
",",O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
sub-adviser,O
to,O
various,O
ESCs,O
.,O
,O
Constellation,O
is,O
an,O
indirect,O
",",O
majority-owned,O
subsidiary,O
of,O
JPMC,O
.,O
,O
Constellation,O
II,O
",",O
a,O
Delaware,O
limited,O
liability,O
corporation,O
",",O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
general,O
partner,O
that,O
provides,O
investment,O
advisory,O
services,O
to,O
various,O
ESCs,O
.,O
,O
Constellation,O
II,O
is,O
a,O
wholly-owned,O
subsidiary,O
of,O
JPMC,I-BUSINESS
.,O
,O
Highbridge,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
limited,O
liability,O
company,O
",",O
is,O
registered,O
as,O
an,O
investment,O
adviser,O
under,O
the,O
Advisers,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
investment,O
adviser,O
or,O
sub-adviser,O
to,O
various,O
Funds,O
.,O
,O
Highbridge,I-BUSINESS
is,O
an,O
indirect,O
",",O
majority-owned,O
subsidiary,O
of,O
JPMC,I-BUSINESS
.,O
,O
JFIMI,I-BUSINESS
",",O
a,O
British,I-LOCATION
Virgin,I-LOCATION
Islands,I-LOCATION
corporation,O
",",O
is,O
registered,O
as,O
an,O
investment,O
adviser,O
under,O
the,O
Advisers,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
investment,O
adviser,O
or,O
sub-adviser,O
to,O
various,O
Funds,O
.,O
,O
JFIMI,I-BUSINESS
is,O
a,O
wholly-owned,O
subsidiary,O
of,O
JPMC,I-BUSINESS
.,O
,O
JPMAMUK,I-BUSINESS
",",O
a,O
United,I-LOCATION
Kingdom,I-LOCATION
corporation,O
",",O
is,O
registered,O
as,O
an,O
investment,O
adviser,O
under,O
the,O
Advisers,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
investment,O
adviser,O
or,O
sub-adviser,O
to,O
various,O
Funds,O
.,O
,O
JPMAMUK,I-BUSINESS
is,O
a,O
wholly-owned,O
subsidiary,O
of,O
JPMC,I-BUSINESS
.,O
,O
JPMDS,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
corporation,O
",",O
is,O
registered,O
as,O
a,O
broker-dealer,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
principal,O
underwriter,O
to,O
various,O
Funds,O
.,O
,O
JPMDS,I-BUSINESS
is,O
a,O
wholly-owned,O
subsidiary,O
of,O
JPMC,I-BUSINESS
.,O
,O
JPMII,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
corporation,O
",",O
is,O
registered,O
as,O
a,O
broker-dealer,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
placement,O
agent,O
to,O
various,O
Funds,O
.,O
,O
JPMII,I-BUSINESS
is,O
a,O
wholly,O
owned,O
subsidiary,O
of,O
JPMC,I-BUSINESS
.,O
,O
JPMIM,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
corporation,O
",",O
is,O
registered,O
as,O
an,O
investment,O
adviser,O
under,O
the,O
Advisers,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
investment,O
adviser,O
or,O
sub-adviser,O
to,O
various,O
Funds,O
.,O
,O
JPMIM,I-BUSINESS
is,O
a,O
wholly-owned,O
subsidiary,O
of,O
JPMC,I-BUSINESS
.,O
,O
JPMLAM,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
limited,O
liability,O
company,O
",",O
is,O
registered,O
as,O
an,O
investment,O
adviser,O
under,O
the,O
Advisers,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
investment,O
adviser,O
or,O
sub-adviser,O
to,O
various,O
ESCs,O
.,O
,O
JPMLAM,I-BUSINESS
is,O
a,O
wholly-owned,O
subsidiary,O
of,O
JPMC,I-BUSINESS
.,O
,O
JPMP,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
limited,O
liability,O
company,O
",",O
is,O
registered,O
as,O
an,O
investment,O
adviser,O
under,O
the,O
Advisers,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
investment,O
adviser,O
or,O
sub-adviser,O
to,O
various,O
ESCs,O
.,O
,O
JPMP,I-BUSINESS
is,O
a,O
wholly-owned,O
subsidiary,O
of,O
JPMC,I-BUSINESS
.,O
,O
JPMPI,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
corporation,O
",",O
is,O
registered,O
as,O
an,O
investment,O
adviser,O
under,O
the,O
Advisers,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
investment,O
adviser,O
or,O
sub-adviser,O
to,O
various,O
Funds,O
.,O
,O
JPMPI,I-BUSINESS
is,O
a,O
wholly-owned,O
subsidiary,O
of,O
JPMC,I-BUSINESS
.,O
,O
The,O
OEP,I-BUSINESS
Entities,I-BUSINESS
",",O
both,O
Cayman,I-LOCATION
Islands,I-LOCATION
exempted,O
limited,O
companies,O
",",O
are,O
exempt,O
from,O
registration,O
as,O
investment,O
advisers,O
by,O
virtue,O
of,O
Section,O
203,O
(,O
b,O
),O
(,O
3,O
),O
of,O
the,O
Advisers,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
and,O
serve,O
",",O
,O
JPMII,I-BUSINESS
serves,O
as,O
placement,O
agent,O
to,O
JPMorgan,I-BUSINESS
Institutional,I-BUSINESS
Trust,I-BUSINESS
with,O
respect,O
to,O
its,O
series,O
:,O
JPMorgan,I-BUSINESS
Core,I-BUSINESS
Bond,I-BUSINESS
Trust,I-BUSINESS
",",O
JPMorgan,I-BUSINESS
Equity,I-BUSINESS
Index,I-BUSINESS
Trust,I-BUSINESS
",",O
and,O
JPMorgan,I-BUSINESS
Intermediate,I-BUSINESS
Bond,I-BUSINESS
Trust,I-BUSINESS
.,O
,O
JPMorgan,I-BUSINESS
Institutional,I-BUSINESS
Trust,I-BUSINESS
is,O
an,O
open-end,O
investment,O
company,O
registered,O
under,O
the,O
Act,O
",",O
but,O
its,O
shares,O
are,O
not,O
registered,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
.,O
,O
JPMII,I-BUSINESS
believes,O
",",O
for,O
the,O
purposes,O
of,O
this,O
Application,O
",",O
that,O
it,O
is,O
performing,O
a,O
function,O
that,O
falls,O
within,O
the,O
definition,O
of,O
``,O
principal,O
underwriter,O
'',O
in,O
Section,O
2,O
(,O
a,O
),O
(,O
29,O
),O
of,O
the,O
Act,O
.,O
,O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
general,O
partners,O
that,O
provide,O
investment,O
advisory,O
services,O
to,O
various,O
ESCs,O
.,O
,O
The,O
OEP,I-BUSINESS
Entities,I-BUSINESS
are,O
wholly-owned,O
subsidiaries,O
of,O
JPMC,I-BUSINESS
.,O
,O
Security,I-BUSINESS
Capital,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
corporation,O
",",O
is,O
registered,O
as,O
an,O
investment,O
adviser,O
under,O
the,O
Advisers,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
investment,O
adviser,O
or,O
sub-adviser,O
to,O
various,O
Funds,O
.,O
,O
Security,I-BUSINESS
Capital,I-BUSINESS
is,O
a,O
wholly-owned,O
subsidiary,O
of,O
JPMC,I-BUSINESS
.,O
,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
GP,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
Corporation,O
",",O
is,O
registered,O
as,O
an,O
investment,O
adviser,O
under,O
the,O
Advisers,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
an,O
investment,O
adviser,O
or,O
sub-adviser,O
to,O
various,O
ESCs,O
.,O
,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
GP,I-BUSINESS
is,O
a,O
wholly,O
owned,O
subsidiary,O
of,O
JPMC,I-BUSINESS
.,O
,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
Management,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
limited,O
liability,O
company,O
",",O
is,O
registered,O
as,O
an,O
investment,O
adviser,O
under,O
the,O
Advisers,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
investment,O
adviser,O
or,O
sub-adviser,O
to,O
various,O
ESCs,O
.,O
,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
Management,I-BUSINESS
is,O
a,O
wholly-owned,O
subsidiary,O
of,O
JPMC,I-BUSINESS
.,O
,O
TCM,I-BUSINESS
",",O
a,O
California,I-LOCATION
limited,O
liability,O
corporation,O
",",O
serves,O
",",O
and,O
may,O
in,O
the,O
future,O
serve,O
",",O
as,O
the,O
general,O
partner,O
that,O
provides,O
investment,O
advisory,O
services,O
to,O
various,O
ESCs,O
.,O
,O
TCM,I-BUSINESS
is,O
a,O
wholly-owned,O
subsidiary,O
of,O
JPMC,I-BUSINESS
.,O
,O
B.,O
SEC,I-GOVERNMENT
v.,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
LLC,I-BUSINESS
(,O
f/k/a/,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
Inc.,I-BUSINESS
),O
,O
Morgan,I-BUSINESS
Securities,I-BUSINESS
executed,O
on,O
June,O
17,O
",",O
2011,O
",",O
a,O
Consent,O
of,O
Defendant,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
(,O
the,O
“,O
Consent,O
”,O
),O
",",O
in,O
which,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
neither,O
admitted,O
nor,O
denied,O
any,O
of,O
the,O
allegations,O
(,O
except,O
as,O
to,O
personal,O
and,O
subject,O
matter,O
jurisdiction,O
),O
in,O
a,O
complaint,O
filed,O
by,O
the,O
Commission,O
",",O
but,O
in,O
which,O
it,O
consented,O
to,O
the,O
entry,O
of,O
a,O
final,O
judgment,O
(,O
“,O
Final,O
Judgment,O
”,O
),O
against,O
it,O
by,O
the,O
United,I-COURT
States,I-COURT
District,I-COURT
Court,I-COURT
for,I-COURT
the,I-COURT
Southern,I-COURT
District,I-COURT
of,I-COURT
New,I-COURT
York,I-COURT
(,O
the,O
“,O
Court,O
”,O
),O
.,O
,O
The,O
Commission,O
approved,O
the,O
Consent,O
",",O
and,O
on,O
June,O
21,O
",",O
2011,O
",",O
the,O
Commission,O
filed,O
a,O
complaint,O
(,O
the,O
“,O
Complaint,O
”,O
),O
against,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
in,O
the,O
Court,O
.,O
,O
The,O
conduct,O
of,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
alleged,O
in,O
the,O
Complaint,O
involved,O
an,O
offering,O
of,O
a,O
largely,O
synthetic,O
collateralized,O
debt,O
obligation,O
(,O
“,O
CDO,O
”,O
),O
whose,O
portfolio,O
consisted,O
primarily,O
of,O
credit,O
default,O
swaps,O
(,O
“,O
CDS,O
”,O
),O
referencing,O
other,O
CDO,O
securities,O
to,O
qualified,O
institutional,O
buyers,O
in,O
reliance,O
on,O
the,O
exemption,O
from,O
registration,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
(,O
“,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
”,O
),O
provided,O
by,O
Rule,O
144A,O
thereunder,O
and,O
to,O
non-U.S.,I-MISCELLANEOUS
persons,O
in,O
reliance,O
on,O
the,O
safe,O
harbor,O
from,O
registration,O
provided,O
by,O
Regulation,O
S,O
thereunder,O
.,O
,O
The,O
Complaint,O
alleged,O
that,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
represented,O
in,O
marketing,O
materials,O
that,O
the,O
collateral,O
manager,O
selected,O
the,O
CDO,O
’,O
s,O
investment,O
portfolio,O
but,O
failed,O
to,O
disclose,O
that,O
the,O
hedge,O
fund,O
that,O
purchased,O
the,O
subordinated,O
notes,O
(,O
or,O
“,O
equity,O
”,O
),O
",",O
which,O
also,O
took,O
the,O
short,O
position,O
on,O
roughly,O
half,O
of,O
the,O
portfolio,O
’,O
s,O
assets,O
",",O
played,O
a,O
significant,O
role,O
in,O
the,O
selection,O
process,O
.,O
,O
Specifically,O
",",O
the,O
Complaint,O
alleged,O
that,O
although,O
the,O
offering,O
circular,O
for,O
the,O
CDO,O
did,O
have,O
a,O
risk,O
factor,O
that,O
disclosed,O
that,O
a,O
noteholder,O
may,O
hold,O
a,O
short,O
position,O
with,O
respect,O
to,O
the,O
referenced,O
CDOs,O
or,O
buy,O
credit,O
protection,O
with,O
respect,O
to,O
the,O
referenced,O
CDOs,O
",",O
and,O
that,O
a,O
noteholder,O
may,O
act,O
with,O
respect,O
to,O
those,O
positions,O
“,O
without,O
regard,O
to,O
whether,O
any,O
such,O
action,O
might,O
have,O
an,O
adverse,O
effect,O
on,O
the,O
Issuer,O
",",O
the,O
Noteholders,O
",",O
related,O
Reference,O
Entity,O
or,O
any,O
Reference,O
Obligation,O
",",O
”,O
this,O
disclosure,O
did,O
not,O
indicate,O
that,O
such,O
a,O
noteholder,O
was,O
involved,O
in,O
the,O
portfolio,O
selection,O
process,O
.,O
,O
The,O
Final,O
Judgment,O
wouldrestrain,O
and,O
enjoin,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
from,O
violating,O
Sections,O
17,O
(,O
a,O
),O
(,O
2,O
),O
and,O
(,O
3,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
in,O
the,O
offer,O
or,O
sale,O
of,O
any,O
security,O
or,O
security-based,O
swap,O
agreement,O
(,O
the,O
“,O
Injunction,O
”,O
),O
",",O
impose,O
liability,O
on,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
for,O
payment,O
of,O
disgorgement,O
of,O
$,O
18.6,O
million,O
with,O
prejudgment,O
interest,O
thereon,O
in,O
the,O
amount,O
of,O
$,O
2,O
million,O
",",O
and,O
a,O
civil,O
penalty,O
in,O
the,O
amount,O
of,O
$,O
133,O
million,O
.,O
,O
The,O
Final,O
Judgment,O
also,O
would,O
require,O
J.P.,I-BUSINESS
mortgage-related,O
securities,O
),O
",",O
including,O
CDOs,O
referencing,O
those,O
securities,O
(,O
collectively,O
",",O
“,O
mortgage,O
securities,O
”,O
),O
;,O
(,O
ii,O
),O
the,O
role,O
of,O
the,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
’,O
Legal,O
and,O
Compliance,O
Department,O
with,O
respect,O
to,O
the,O
review,O
of,O
marketing,O
materials,O
used,O
in,O
connection,O
with,O
mortgage,O
securities,O
offerings,O
;,O
(,O
iii,O
),O
the,O
review,O
of,O
the,O
written,O
marketing,O
materials,O
used,O
in,O
connection,O
with,O
mortgage,O
securities,O
by,O
outside,O
counsel,O
where,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
is,O
the,O
lead,O
underwriter,O
of,O
an,O
offering,O
of,O
mortgage,O
securities,O
and,O
retains,O
outside,O
counsel,O
to,O
advise,O
on,O
the,O
offering,O
;,O
(,O
iv,O
),O
the,O
delivery,O
of,O
offering,O
circulars/prospectuses,O
for,O
mortgage,O
securities,O
offerings,O
;,O
(,O
v,O
),O
annual,O
internal,O
audits,O
to,O
determine,O
that,O
items,O
(,O
i,O
),O
-,O
(,O
iv,O
),O
are,O
being,O
complied,O
with,O
;,O
and,O
(,O
vi,O
),O
education,O
and,O
training,O
of,O
persons,O
involved,O
in,O
the,O
structuring,O
or,O
marketing,O
of,O
mortgage,O
securities,O
offerings,O
.,O
,O
The,O
Final,O
Judgment,O
was,O
entered,O
on,O
June,O
29,O
",",O
2011,O
",",O
giving,O
effect,O
to,O
the,O
Injunction,O
.,O
,O
Section,O
9,O
(,O
a,O
),O
(,O
2,O
),O
of,O
the,O
Act,O
provides,O
",",O
in,O
pertinent,O
part,O
",",O
that,O
a,O
person,O
may,O
not,O
serve,O
or,O
act,O
as,O
",",O
among,O
other,O
things,O
",",O
an,O
investment,O
adviser,O
or,O
depositor,O
of,O
any,O
investment,O
company,O
registered,O
under,O
the,O
Act,O
or,O
as,O
a,O
principal,O
underwriter,O
for,O
any,O
registered,O
open-end,O
investment,O
company,O
",",O
registered,O
UIT,O
",",O
or,O
registered,O
face,O
amount,O
certificate,O
company,O
",",O
if,O
the,O
person,O
",",O
by,O
reason,O
of,O
any,O
misconduct,O
",",O
is,O
permanently,O
or,O
temporarily,O
enjoined,O
by,O
order,O
",",O
judgment,O
",",O
or,O
decree,O
of,O
any,O
court,O
of,O
competent,O
jurisdiction,O
from,O
",",O
among,O
other,O
things,O
",",O
acting,O
as,O
",",O
engaging,O
in,O
or,O
continuing,O
any,O
conduct,O
or,O
practice,O
in,O
connection,O
with,O
the,O
purchase,O
or,O
sale,O
of,O
any,O
security,O
.,O
,O
Section,O
9,O
(,O
a,O
),O
(,O
3,O
),O
of,O
the,O
Act,O
extends,O
the,O
prohibitions,O
of,O
Section,O
9,O
(,O
a,O
),O
(,O
2,O
),O
to,O
a,O
company,O
",",O
any,O
“,O
affiliated,O
person,O
”,O
of,O
which,O
is,O
disqualified,O
under,O
the,O
provisions,O
of,O
Section,O
9,O
(,O
a,O
),O
(,O
2,O
),O
.,O
,O
“,O
Affiliated,O
person,O
”,O
is,O
defined,O
in,O
Section,O
2,O
(,O
a,O
),O
(,O
3,O
),O
of,O
the,O
Act,O
to,O
include,O
",",O
among,O
others,O
",",O
any,O
person,O
directly,O
or,O
indirectly,O
controlling,O
",",O
controlled,O
by,O
",",O
or,O
under,O
common,O
control,O
with,O
",",O
the,O
other,O
person,O
.,O
,O
The,O
entry,O
of,O
the,O
Final,O
Judgment,O
would,O
result,O
in,O
a,O
disqualification,O
of,O
J.P.,I-BUSINESS
.,I-BUSINESS
,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
v.,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
LLC,I-BUSINESS
(,O
f/k/a,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
Inc.,I-BUSINESS
),O
",",O
11-CV-4206,O
(,O
S.D.N.Y,O
.,O
,O
June,O
29,O
",",O
2011,O
),O
.,O
,O
purchase,O
or,O
sale,O
of,O
any,O
security,O
.,O
,O
As,O
a,O
consequence,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
would,O
be,O
unable,O
to,O
act,O
as,O
investment,O
adviser,O
",",O
sub-adviser,O
or,O
depositor,O
to,O
the,O
Funds,O
or,O
serve,O
as,O
principal,O
underwriter,O
to,O
any,O
Fund,O
that,O
is,O
a,O
registered,O
open-end,O
investment,O
company,O
",",O
UIT,O
",",O
or,O
registered,O
face,O
amount,O
certificate,O
company,O
.,O
,O
Taken,O
together,O
",",O
Sections,O
9,O
(,O
a,O
),O
(,O
2,O
),O
and,O
9,O
(,O
a,O
),O
(,O
3,O
),O
would,O
have,O
the,O
effect,O
of,O
also,O
precluding,O
the,O
other,O
Applicants,O
from,O
providing,O
advisory,O
or,O
sub-advisory,O
services,O
to,O
",",O
or,O
serving,O
as,O
depositor,O
of,O
",",O
any,O
Fund,O
",",O
and,O
would,O
preclude,O
such,O
Applicants,O
from,O
serving,O
as,O
principal,O
underwriter,O
for,O
any,O
Fund,O
that,O
is,O
a,O
registered,O
open-end,O
investment,O
company,O
",",O
UIT,O
",",O
or,O
registered,O
face,O
amount,O
certificate,O
company,O
.,O
,O
The,O
entry,O
of,O
the,O
Final,O
Judgment,O
results,O
in,O
a,O
disqualification,O
of,O
such,O
Applicants,O
under,O
Section,O
9,O
(,O
a,O
),O
(,O
3,O
),O
because,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
is,O
an,O
affiliated,O
person,O
of,O
the,O
other,O
Applicants,O
and,O
has,O
",",O
by,O
consenting,O
to,O
the,O
entry,O
of,O
the,O
Final,O
Judgment,O
",",O
become,O
subject,O
to,O
an,O
injunction,O
described,O
in,O
Section,O
9,O
(,O
a,O
),O
(,O
2,O
),O
.,O
,O
Other,O
Covered,O
Persons,O
similarly,O
would,O
be,O
disqualified,O
pursuant,O
to,O
Section,O
9,O
(,O
a,O
),O
(,O
3,O
),O
were,O
they,O
to,O
act,O
in,O
any,O
of,O
the,O
capacities,O
listed,O
in,O
Section,O
9,O
(,O
a,O
),O
with,O
respect,O
to,O
a,O
Fund,O
.,O
,O
Section,O
9,O
(,O
c,O
),O
of,O
the,O
Act,O
provides,O
that,O
",",O
upon,O
application,O
",",O
the,O
Commission,O
shall,O
by,O
order,O
grant,O
a,O
person,O
an,O
exemption,O
from,O
the,O
provisions,O
of,O
Section,O
9,O
(,O
a,O
),O
",",O
either,O
unconditionally,O
or,O
on,O
an,O
appropriate,O
temporary,O
or,O
other,O
conditional,O
basis,O
",",O
if,O
the,O
person,O
establishes,O
that,O
:,O
(,O
1,O
),O
the,O
prohibitions,O
of,O
Section,O
9,O
(,O
a,O
),O
",",O
as,O
applied,O
to,O
the,O
person,O
",",O
are,O
unduly,O
or,O
disproportionately,O
severe,O
;,O
or,O
(,O
2,O
),O
the,O
conduct,O
of,O
the,O
person,O
has,O
been,O
such,O
as,O
not,O
to,O
make,O
it,O
against,O
the,O
public,O
interest,O
or,O
the,O
protection,O
of,O
investors,O
to,O
grant,O
the,O
exemption,O
.,O
,O
no,O
involvement,O
in,O
",",O
or,O
have,O
remedied,O
",",O
the,O
conduct,O
that,O
serves,O
as,O
the,O
basis,O
for,O
disqualification,O
under,O
Section,O
9,O
(,O
a,O
),O
.,O
,O
In,O
light,O
of,O
the,O
Action,O
",",O
the,O
Applicants,O
submit,O
this,O
Application,O
pursuant,O
to,O
Section,O
9,O
(,O
c,O
),O
of,O
the,O
Act,O
.,O
,O
In,O
order,O
to,O
ensure,O
the,O
eligibility,O
of,O
the,O
Applicants,O
to,O
continue,O
to,O
serve,O
as,O
investment,O
adviser,O
or,O
sub-adviser,O
of,O
the,O
Funds,O
(,O
including,O
as,O
general,O
partner,O
providing,O
investment,O
advisory,O
services,O
to,O
the,O
ESCs,O
),O
",",O
or,O
principal,O
underwriter,O
for,O
each,O
Fund,O
that,O
is,O
a,O
registered,O
open-end,O
investment,O
company,O
",",O
and,O
of,O
the,O
Applicants,O
and,O
other,O
Covered,O
Persons,O
to,O
serve,O
in,O
the,O
future,O
as,O
investment,O
adviser,O
",",O
sub-adviser,O
or,O
depositor,O
of,O
any,O
Fund,O
(,O
including,O
as,O
general,O
partner,O
providing,O
investment,O
advisory,O
services,O
to,O
the,O
ESCs,O
),O
",",O
or,O
principal,O
underwriter,O
for,O
any,O
Fund,O
that,O
is,O
a,O
open-end,O
investment,O
company,O
",",O
registered,O
UIT,O
",",O
or,O
registered,O
face,O
amount,O
certificate,O
company,O
",",O
Applicants,O
seek,O
(,O
1,O
),O
an,O
order,O
granting,O
the,O
requested,O
relief,O
to,O
the,O
Applicants,O
and,O
any,O
other,O
Covered,O
Persons,O
on,O
a,O
temporary,O
basis,O
pending,O
the,O
Commission,O
’,O
s,O
determination,O
with,O
respect,O
to,O
a,O
permanent,O
exemption,O
",",O
and,O
(,O
2,O
),O
a,O
permanent,O
order,O
of,O
the,O
Commission,O
exempting,O
the,O
Applicants,O
and,O
any,O
other,O
Covered,O
Persons,O
from,O
the,O
provisions,O
of,O
Section,O
9,O
(,O
a,O
),O
of,O
the,O
Act,O
.,O
,O
In,O
support,O
of,O
their,O
position,O
that,O
the,O
Commission,O
should,O
issue,O
the,O
orders,O
granting,O
the,O
temporary,O
and,O
permanent,O
exemptions,O
requested,O
above,O
from,O
the,O
provisions,O
of,O
Section,O
9,O
(,O
a,O
),O
of,O
the,O
Act,O
",",O
Applicants,O
assert,O
the,O
following,O
statements,O
.,O
,O
Applications,O
for,O
Relief,O
from,O
Disqualification,O
",",O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
Release,O
No.,O
general,O
partner,O
providing,O
investment,O
advisory,O
services,O
to,O
ESCs,O
),O
or,O
principal,O
underwriter,O
for,O
any,O
registered,O
open-end,O
investment,O
company,O
",",O
registered,O
UIT,O
or,O
registered,O
face,O
amount,O
certificate,O
company,O
.,O
,O
The,O
alleged,O
conduct,O
did,O
not,O
relate,O
to,O
the,O
Funds,O
’,O
management,O
or,O
distribution,O
.,O
,O
The,O
alleged,O
conduct,O
did,O
not,O
involve,O
any,O
Fund,O
or,O
the,O
assets,O
of,O
any,O
Fund,O
.,O
,O
The,O
legislative,O
history,O
of,O
Section,O
9,O
of,O
the,O
Act,O
indicates,O
that,O
the,O
purpose,O
of,O
the,O
section,O
“,O
was,O
to,O
get,O
rid,O
of,O
persons,O
with,O
criminal,O
records,O
",",O
persons,O
who,O
were,O
under,O
injunctions,O
from,O
the,O
courts,O
of,O
competent,O
jurisdiction,O
for,O
improper,O
practices,O
in,O
connection,O
with,O
securities.,O
”,O
At,O
the,O
time,O
Section,O
9,O
was,O
adopted,O
",",O
investment,O
companies,O
typically,O
were,O
managed,O
by,O
relatively,O
small,O
partnerships,O
.,O
,O
It,O
could,O
not,O
have,O
been,O
foreseen,O
that,O
investment,O
advisers,O
and,O
other,O
service,O
providers,O
to,O
investment,O
companies,O
would,O
in,O
the,O
future,O
be,O
part,O
of,O
large,O
financial,O
service,O
organizations,O
such,O
as,O
JPMC,I-BUSINESS
.,O
,O
As,O
a,O
result,O
",",O
the,O
drafters,O
of,O
the,O
provision,O
could,O
not,O
have,O
intended,O
that,O
Section,O
9,O
would,O
operate,O
as,O
it,O
does,O
in,O
the,O
present,O
case,O
.,O
,O
That,O
is,O
",",O
it,O
was,O
not,O
intended,O
that,O
an,O
investment,O
company,O
would,O
have,O
to,O
be,O
deprived,O
of,O
its,O
management,O
or,O
distribution,O
because,O
of,O
alleged,O
violations,O
that,O
are,O
not,O
related,O
to,O
the,O
manager,O
’,O
s,O
or,O
distributor,O
’,O
s,O
activities,O
.,O
,O
In,O
the,O
absence,O
of,O
improper,O
practices,O
relating,O
to,O
their,O
Fund,O
business,O
",",O
therefore,O
",",O
Applicants,O
submit,O
that,O
Section,O
9,O
(,O
a,O
),O
should,O
not,O
operate,O
to,O
bar,O
them,O
from,O
serving,O
the,O
Funds,O
and,O
their,O
shareholders,O
.,O
,O
As,O
a,O
result,O
of,O
the,O
foregoing,O
",",O
the,O
conduct,O
of,O
Applicants,O
has,O
not,O
been,O
such,O
as,O
to,O
make,O
it,O
against,O
the,O
public,O
interest,O
or,O
the,O
protection,O
of,O
investors,O
to,O
grant,O
the,O
Application,O
.,O
,O
To,O
the,O
best,O
of,O
Applicants,O
’,O
knowledge,O
:,O
(,O
i,O
),O
none,O
of,O
the,O
current,O
directors,O
",",O
officers,O
or,O
employees,O
of,O
the,O
Applicants,O
that,O
are,O
involved,O
in,O
providing,O
services,O
as,O
investment,O
adviser,O
or,O
sub-,O
,O
Investment,O
Trusts,O
and,O
Investment,O
Companies,O
:,O
Hearings,O
on,O
S,O
.,O
,O
3580,O
Before,O
the,O
Subcomm,O
.,O
,O
on,O
Securities,O
and,O
Exchange,O
of,O
the,O
Senate,O
Comm,O
.,O
,O
on,O
Banking,O
and,O
Currency,O
",",O
76th,O
Cong.,I-GOVERNMENT
",",O
3d,O
Sess,O
.,O
,O
874,O
(,O
1940,O
),O
(,O
statement,O
of,O
Judge,O
Healy,I-PERSON
),O
.,O
,O
adviser,O
of,O
the,O
Funds,O
(,O
including,O
as,O
general,O
partner,O
providing,O
investment,O
advisory,O
services,O
to,O
ESCs,O
),O
or,O
principal,O
underwriter,O
(,O
as,O
defined,O
in,O
Section,O
2,O
(,O
a,O
),O
(,O
29,O
),O
of,O
the,O
Act,O
),O
for,O
any,O
registered,O
open-end,O
company,O
(,O
or,O
any,O
other,O
persons,O
in,O
such,O
roles,O
during,O
the,O
time,O
period,O
covered,O
by,O
the,O
Complaint,O
),O
participated,O
in,O
the,O
conduct,O
alleged,O
in,O
the,O
Complaint,O
to,O
have,O
constituted,O
the,O
violations,O
that,O
provide,O
a,O
basis,O
for,O
the,O
Injunction,O
;,O
(,O
ii,O
),O
the,O
personnel,O
at,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
who,O
participated,O
in,O
the,O
conduct,O
alleged,O
in,O
the,O
Complaint,O
to,O
have,O
constituted,O
the,O
violations,O
that,O
provided,O
a,O
basis,O
for,O
the,O
Injunction,O
have,O
had,O
no,O
",",O
and,O
will,O
not,O
have,O
any,O
",",O
involvement,O
in,O
providing,O
investment,O
advisory,O
or,O
depository,O
services,O
(,O
including,O
as,O
general,O
partner,O
providing,O
investment,O
advisory,O
services,O
to,O
ESCs,O
),O
to,O
the,O
Funds,O
or,O
principal,O
underwriting,O
services,O
to,O
the,O
Funds,O
that,O
are,O
registered,O
open-end,O
investment,O
companies,O
",",O
registered,O
UITs,O
or,O
registered,O
face,O
amount,O
certificate,O
companies,O
on,O
behalf,O
of,O
the,O
Applicants,O
or,O
other,O
Covered,O
Persons,O
;,O
and,O
(,O
iii,O
),O
because,O
the,O
personnel,O
of,O
the,O
Applicants,O
(,O
other,O
than,O
those,O
at,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
),O
did,O
not,O
participate,O
in,O
the,O
conduct,O
alleged,O
in,O
the,O
Complaint,O
to,O
have,O
constituted,O
the,O
violations,O
that,O
provide,O
a,O
basis,O
for,O
the,O
Injunction,O
",",O
the,O
shareholders,O
of,O
those,O
Funds,O
were,O
not,O
affected,O
any,O
differently,O
than,O
if,O
those,O
Funds,O
had,O
received,O
services,O
from,O
any,O
other,O
non-affiliated,O
investment,O
adviser,O
or,O
principal,O
underwriter,O
.,O
,O
Applicants,O
believe,O
that,O
the,O
conduct,O
of,O
Applicants,O
has,O
not,O
been,O
such,O
as,O
to,O
make,O
it,O
against,O
the,O
public,O
interest,O
or,O
the,O
protection,O
of,O
investors,O
to,O
grant,O
the,O
requested,O
exemption,O
from,O
Section,O
9,O
(,O
a,O
),O
.,O
,O
The,O
Injunction,O
subjects,O
each,O
of,O
the,O
Applicants,O
(,O
other,O
than,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
),O
to,O
the,O
prohibitions,O
of,O
Section,O
9,O
(,O
a,O
),O
of,O
the,O
Act,O
solely,O
because,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
is,O
an,O
affiliated,O
person,O
of,O
these,O
companies,O
within,O
the,O
meaning,O
of,O
the,O
Act,O
.,O
,O
Morgan,I-BUSINESS
Securities,I-BUSINESS
was,O
a,O
party,O
to,O
the,O
Action,O
and,O
was,O
alleged,O
to,O
have,O
been,O
involved,O
in,O
the,O
activities,O
that,O
form,O
the,O
basis,O
for,O
the,O
Injunction,O
.,O
,O
If,O
the,O
Applicants,O
were,O
disqualified,O
under,O
Section,O
9,O
(,O
a,O
),O
from,O
continuing,O
to,O
serve,O
as,O
investment,O
adviser,O
or,O
sub-adviser,O
of,O
the,O
Funds,O
",",O
or,O
principal,O
underwriter,O
for,O
the,O
Funds,O
that,O
are,O
registered,O
open-end,O
investment,O
companies,O
",",O
registered,O
UITs,O
or,O
registered,O
face,O
amount,O
certificate,O
companies,O
and,O
were,O
unable,O
to,O
obtain,O
the,O
requested,O
exemption,O
",",O
the,O
effect,O
on,O
their,O
businesses,O
and,O
employees,O
would,O
be,O
severe,O
.,O
,O
The,O
Applicants,O
have,O
committed,O
substantial,O
resources,O
to,O
establishing,O
an,O
expertise,O
in,O
providing,O
services,O
covered,O
by,O
Section,O
9,O
(,O
a,O
),O
of,O
the,O
Act,O
to,O
the,O
Funds,O
.,O
,O
Currently,O
",",O
the,O
Applicants,O
employ,O
approximately,O
940,O
persons,O
who,O
are,O
actively,O
involved,O
in,O
performing,O
advisory,O
or,O
sub-advisory,O
and/or,O
underwriting,O
functions,O
for,O
the,O
Funds,O
(,O
not,O
including,O
the,O
large,O
number,O
of,O
employees,O
of,O
the,O
Applicants,O
who,O
support,O
the,O
approximately,O
940employees,O
who,O
would,O
be,O
adversely,O
affected,O
if,O
the,O
Applicants,O
could,O
no,O
longer,O
offer,O
the,O
Funds,O
to,O
their,O
customers,O
),O
.,O
,O
Prohibiting,O
the,O
Applicants,O
from,O
serving,O
as,O
investment,O
adviser,O
or,O
sub-adviser,O
of,O
and/or,O
principal,O
underwriter,O
for,O
Funds,O
not,O
only,O
would,O
affect,O
Applicants,O
’,O
businesses,O
adversely,O
",",O
but,O
also,O
Applicants,O
’,O
employees,O
.,O
,O
For,O
the,O
foregoing,O
reasons,O
",",O
the,O
Section,O
9,O
(,O
a,O
),O
prohibitions,O
as,O
applied,O
to,O
the,O
Applicants,O
would,O
be,O
unduly,O
and,O
disproportionately,O
severe,O
.,O
,O
With,O
respect,O
to,O
the,O
Applicants,O
who,O
provide,O
investment,O
advisory,O
services,O
to,O
the,O
ESCs,O
in,O
particular,O
",",O
their,O
disqualification,O
from,O
providing,O
relevant,O
advisory,O
or,O
subadvisory,O
services,O
to,O
the,O
ESCs,O
listed,O
in,O
Exhibit,O
A,O
would,O
not,O
be,O
in,O
the,O
public,O
interest,O
or,O
in,O
furtherance,O
of,O
the,O
protection,O
of,O
investors,O
",",O
and,O
indeed,O
such,O
disqualification,O
would,O
frustrate,O
the,O
expectations,O
of,O
the,O
eligible,O
employees,O
who,O
invested,O
in,O
the,O
ESCs,O
.,O
,O
Because,O
the,O
ESCs,O
have,O
been,O
formed,O
for,O
certain,O
key,O
employees,O
",",O
officers,O
and,O
directors,O
of,O
JPMC,I-BUSINESS
and,O
its,O
affiliates,O
",",O
it,O
would,O
not,O
be,O
consistent,O
with,O
the,O
purposes,O
of,O
the,O
employees,O
’,O
securities,O
company,O
provisions,O
of,O
the,O
Act,O
or,O
the,O
terms,O
and,O
conditions,O
of,O
the,O
ESC,O
orders,O
to,O
require,O
another,O
entity,O
not,O
affiliated,O
with,O
JPMC,I-BUSINESS
to,O
manage,O
the,O
ESCs,O
.,O
,O
addition,O
",",O
participating,O
employees,O
of,O
JPMC,I-BUSINESS
and,O
its,O
affiliates,O
likely,O
subscribed,O
for,O
interests,O
in,O
the,O
ESCs,O
with,O
the,O
expectation,O
that,O
the,O
ESCs,O
would,O
be,O
managed,O
by,O
an,O
affiliate,O
of,O
JPMC,I-BUSINESS
.,O
,O
To,O
provide,O
further,O
assurance,O
that,O
the,O
exemptive,O
relief,O
being,O
requested,O
herein,O
would,O
be,O
consistent,O
with,O
the,O
public,O
interest,O
and,O
the,O
protection,O
of,O
investors,O
",",O
the,O
Applicants,O
undertake,O
to,O
distribute,O
",",O
as,O
soon,O
as,O
reasonably,O
practicable,O
",",O
written,O
materials,O
describing,O
the,O
circumstances,O
that,O
led,O
to,O
the,O
Injunction,O
and,O
any,O
impact,O
on,O
the,O
Funds,O
and,O
this,O
Application,O
to,O
",",O
and,O
to,O
offer,O
to,O
meet,O
in,O
person,O
to,O
discuss,O
the,O
materials,O
with,O
",",O
the,O
boards,O
of,O
directors,O
or,O
trustees,O
of,O
each,O
Fund,O
(,O
excluding,O
",",O
for,O
this,O
purpose,O
",",O
the,O
ESCs,O
),O
for,O
which,O
the,O
Applicants,O
serves,O
as,O
investment,O
adviser,O
",",O
subadviser,O
or,O
principal,O
underwriter,O
",",O
including,O
the,O
directors,O
or,O
trustees,O
who,O
are,O
not,O
“,O
interested,O
persons,O
”,O
as,O
defined,O
in,O
Section,O
2,O
(,O
a,O
),O
(,O
19,O
),O
of,O
the,O
Act,O
",",O
and,O
their,O
independent,O
legal,O
counsel,O
",",O
if,O
any,O
.,O
,O
The,O
Applicants,O
will,O
provide,O
the,O
Funds,O
with,O
the,O
information,O
concerning,O
the,O
Injunction,O
and,O
this,O
Application,O
necessary,O
for,O
those,O
Funds,O
to,O
fulfill,O
their,O
disclosure,O
and,O
other,O
obligations,O
under,O
the,O
federal,O
securities,O
laws,O
and,O
will,O
provide,O
them,O
a,O
copy,O
of,O
the,O
Final,O
Judgment,O
as,O
entered,O
by,O
the,O
Court,O
.,O
,O
The,O
inability,O
of,O
the,O
Applicants,O
to,O
continue,O
to,O
serve,O
as,O
investment,O
adviser,O
or,O
subadviser,O
of,O
the,O
Funds,O
(,O
including,O
as,O
general,O
partner,O
providing,O
investment,O
advisory,O
services,O
to,O
ESCs,O
),O
or,O
principal,O
underwriter,O
for,O
the,O
Funds,O
that,O
are,O
registered,O
open-end,O
investment,O
companies,O
would,O
result,O
in,O
the,O
Funds,O
and,O
their,O
shareholders,O
facing,O
potentially,O
severe,O
hardships,O
.,O
,O
expected,O
the,O
Funds,O
would,O
receive,O
when,O
they,O
decided,O
to,O
invest,O
in,O
the,O
Funds,O
.,O
,O
In,O
addition,O
",",O
the,O
Funds,O
would,O
have,O
to,O
expend,O
time,O
and,O
other,O
resources,O
to,O
engage,O
substitute,O
advisers,O
or,O
sub-advisers,O
(,O
and/or,O
general,O
partners,O
",",O
in,O
the,O
case,O
of,O
certain,O
ESCs,O
),O
and,O
principal,O
underwriters,O
.,O
,O
The,O
prohibitions,O
of,O
Section,O
9,O
(,O
a,O
),O
could,O
",",O
therefore,O
",",O
operate,O
to,O
the,O
detriment,O
of,O
the,O
financial,O
interests,O
of,O
such,O
Funds,O
and,O
their,O
shareholders,O
.,O
,O
Certain,O
of,O
the,O
Applicants,O
and,O
their,O
affiliates,O
previously,O
have,O
applied,O
for,O
and,O
obtained,O
the,O
following,O
orders,O
under,O
Section,O
9,O
(,O
c,O
),O
.,O
,O
Because,O
the,O
previously,O
obtained,O
Section,O
9,O
(,O
c,O
),O
orders,O
were,O
necessitated,O
by,O
enforcement,O
actions,O
brought,O
by,O
the,O
Commission,O
in,O
the,O
past,O
",",O
they,O
should,O
have,O
little,O
",",O
if,O
any,O
",",O
relevance,O
to,O
whether,O
the,O
pending,O
Application,O
is,O
granted,O
.,O
,O
Rather,O
",",O
this,O
Application,O
should,O
be,O
judged,O
on,O
its,O
own,O
merits,O
.,O
,O
Enron,I-BUSINESS
On,O
July,O
28,O
",",O
2003,O
",",O
the,O
Commission,O
filed,O
a,O
complaint,O
(,O
the,O
“,O
Enron,I-MISCELLANEOUS
Complaint,I-MISCELLANEOUS
”,O
),O
against,O
JPMC,I-BUSINESS
in,O
the,O
United,I-COURT
States,I-COURT
District,I-COURT
Court,I-COURT
for,I-COURT
the,I-COURT
Southern,I-COURT
District,I-COURT
of,I-COURT
Texas,I-COURT
(,O
the,O
“,O
Texas,I-COURT
District,I-COURT
Court,I-COURT
”,O
),O
in,O
a,O
civil,O
action,O
captioned,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
v.,O
JPMorgan,I-BUSINESS
Chase,I-BUSINESS
&,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
The,O
Enron,I-MISCELLANEOUS
Complaint,I-MISCELLANEOUS
alleged,O
that,O
JPMC,I-BUSINESS
aided,O
and,O
abetted,O
violations,O
by,O
Enron,I-BUSINESS
Corp.,I-BUSINESS
(,O
“,O
Enron,I-BUSINESS
”,O
),O
of,O
Section,O
10,O
(,O
b,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
Rule,O
10b-5,O
thereunder,O
.,O
,O
The,O
alleged,O
violations,O
occurred,O
in,O
connection,O
with,O
Enron,I-BUSINESS
’,O
s,O
financial,O
statement,O
disclosure,O
of,O
transactions,O
with,O
one,O
or,O
more,O
affiliates,O
of,O
JPMC,I-BUSINESS
between,O
1997,O
and,O
2001,O
.,O
,O
On,O
July,O
24,O
",",O
2003,O
",",O
JPMC,I-BUSINESS
executed,O
a,O
consent,O
in,O
which,O
it,O
neither,O
admitted,O
nor,O
denied,O
any,O
of,O
the,O
allegations,O
in,O
the,O
Enron,I-MISCELLANEOUS
Complaint,I-MISCELLANEOUS
",",O
except,O
as,O
to,O
jurisdiction,O
",",O
but,O
consented,O
to,O
the,O
entry,O
of,O
an,O
injunction,O
(,O
the,O
“,O
Enron,I-MISCELLANEOUS
Injunction,I-MISCELLANEOUS
”,O
),O
and,O
agreed,O
to,O
pay,O
$,O
135,O
million,O
in,O
disgorgement,O
",",O
civil,O
penalties,O
and,O
interest,O
.,O
,O
employees,O
",",O
from,O
violating,O
the,O
statutes,O
and,O
rules,O
cited,O
in,O
the,O
Enron,I-MISCELLANEOUS
Complaint,I-MISCELLANEOUS
.,O
,O
Additionally,O
",",O
the,O
Enron,I-MISCELLANEOUS
Final,I-MISCELLANEOUS
Judgment,I-MISCELLANEOUS
ordered,O
JPMC,I-BUSINESS
to,O
make,O
payments,O
aggregating,O
$,O
135,O
million,O
.,O
,O
The,O
Commission,O
pursuant,O
to,O
Section,O
9,O
(,O
c,O
),O
exempted,O
JPMC,I-BUSINESS
",",O
and,O
any,O
other,O
existing,O
company,O
of,O
which,O
JPMC,I-BUSINESS
is,O
an,O
affiliated,O
person,O
and,O
any,O
other,O
company,O
of,O
which,O
JPMC,I-BUSINESS
may,O
become,O
an,O
affiliated,O
person,O
in,O
the,O
future,O
",",O
from,O
the,O
provisions,O
of,O
Section,O
9,O
(,O
a,O
),O
of,O
the,O
Act,O
with,O
respect,O
to,O
the,O
Enron,I-MISCELLANEOUS
Injunction,I-MISCELLANEOUS
.,O
,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
Release,O
Nos,O
.,O
,O
IC-26141,O
;,O
812-12991,O
(,O
July,O
28,O
",",O
2003,O
),O
(,O
notice,O
and,O
temporary,O
order,O
),O
and,O
IC-26168,O
;,O
812-12991,O
(,O
Aug,O
.,O
,O
26,O
",",O
2003,O
),O
(,O
permanent,O
order,O
),O
.,O
,O
IPOs,O
On,O
October,O
1,O
",",O
2003,O
",",O
the,O
Commission,O
filed,O
a,O
complaint,O
(,O
the,O
“,O
IPO,I-MISCELLANEOUS
Complaint,I-MISCELLANEOUS
”,O
),O
against,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
Inc.,I-BUSINESS
(,O
predecessor,O
to,O
JPMS,I-BUSINESS
",",O
“,O
JPMSI,I-BUSINESS
”,O
),O
in,O
the,O
United,I-COURT
States,I-COURT
District,I-COURT
Court,I-COURT
for,I-COURT
the,I-COURT
District,I-COURT
of,I-COURT
Columbia,I-COURT
(,O
the,O
“,O
D.C.,I-COURT
District,I-COURT
Court,I-COURT
”,O
),O
in,O
a,O
civil,O
action,O
captioned,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
v.,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
The,O
IPO,I-MISCELLANEOUS
Complaint,I-MISCELLANEOUS
alleged,O
that,O
JPMSI,I-BUSINESS
violated,O
Rule,O
101,O
of,O
Regulation,I-LEGISLATION/ACT
M,I-LEGISLATION/ACT
[,O
17,O
C.F.R,I-LEGISLATION/ACT
.,O
,O
§242.l01,O
],O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
by,O
attempting,O
to,O
induce,O
certain,O
institutional,O
customers,O
to,O
place,O
orders,O
for,O
shares,O
in,O
the,O
aftermarket,O
for,O
certain,O
initial,O
public,O
offerings,O
(,O
“,O
IPOs,O
”,O
),O
it,O
underwrote,O
during,O
the,O
restricted,O
period,O
of,O
such,O
IPOs,O
.,O
,O
The,O
IPO,I-MISCELLANEOUS
Complaint,I-MISCELLANEOUS
also,O
alleged,O
that,O
JPMSI,I-BUSINESS
violated,O
then,O
NASD,I-LEGISLATION/ACT
Conduct,I-LEGISLATION/ACT
Rule,I-LEGISLATION/ACT
2110,O
by,O
persuading,O
one,O
or,O
more,O
institutional,O
customers,O
to,O
take,O
an,O
allocation,O
of,O
a,O
“,O
cold,O
”,O
IPO,O
by,O
promising,O
to,O
reward,O
the,O
customer,O
with,O
an,O
allocation,O
of,O
an,O
upcoming,O
“,O
hot,O
”,O
IPO,O
.,O
,O
On,O
September,O
18,O
",",O
2003,O
",",O
JPMSI,I-BUSINESS
executed,O
a,O
consent,O
in,O
which,O
it,O
neither,O
admitted,O
nor,O
denied,O
any,O
of,O
the,O
allegations,O
in,O
the,O
IPO,I-MISCELLANEOUS
Complaint,I-MISCELLANEOUS
",",O
except,O
as,O
to,O
jurisdiction,O
",",O
but,O
consented,O
to,O
the,O
imposition,O
of,O
an,O
injunction,O
(,O
the,O
“,O
IPO,I-MISCELLANEOUS
Injunction,I-MISCELLANEOUS
”,O
),O
and,O
a,O
payment,O
of,O
a,O
civil,O
penalty,O
of,O
$,O
25,O
million,O
.,O
,O
On,O
October,O
8,O
",",O
2003,O
",",O
the,O
D.C,I-LOCATION
.,I-LOCATION
,O
other,O
things,O
",",O
enjoined,O
JPMSI,I-BUSINESS
",",O
its,O
officers,O
",",O
agents,O
",",O
servants,O
",",O
employees,O
",",O
attorneys,O
",",O
and,O
all,O
persons,O
in,O
active,O
concert,O
or,O
participation,O
with,O
JPMSI,I-BUSINESS
who,O
receive,O
actual,O
notice,O
of,O
the,O
IPO,I-MISCELLANEOUS
Final,I-MISCELLANEOUS
Judgment,I-MISCELLANEOUS
",",O
from,O
violating,O
Rule,O
101,O
of,O
Regulation,I-LEGISLATION/ACT
M,I-LEGISLATION/ACT
[,O
17,O
C.F.R,I-LEGISLATION/ACT
.,I-LEGISLATION/ACT
,O
§242.10l,O
],O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
then,O
NASD,I-LEGISLATION/ACT
Conduct,I-LEGISLATION/ACT
Rule,I-LEGISLATION/ACT
2110,O
.,O
,O
Additionally,O
",",O
the,O
IPO,I-MISCELLANEOUS
Final,I-MISCELLANEOUS
Judgment,I-MISCELLANEOUS
ordered,O
JPMSI,I-BUSINESS
to,O
make,O
payments,O
aggregating,O
$,O
25,O
million,O
.,O
,O
The,O
Commission,O
pursuant,O
to,O
Section,O
9,O
(,O
c,O
),O
exempted,O
JPMSI,I-BUSINESS
",",O
and,O
any,O
other,O
existing,O
company,O
of,O
which,O
JPMSI,I-BUSINESS
is,O
an,O
affiliated,O
person,O
and,O
any,O
other,O
company,O
of,O
which,O
JPMSI,I-BUSINESS
may,O
become,O
an,O
affiliated,O
person,O
in,O
the,O
future,O
",",O
from,O
the,O
provisions,O
of,O
Section,O
9,O
(,O
a,O
),O
of,O
the,O
Act,O
with,O
respect,O
to,O
the,O
IPO,I-MISCELLANEOUS
Injunction,I-MISCELLANEOUS
.,O
,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
Release,O
No.,O
8,O
",",O
2003,O
),O
(,O
notice,O
and,O
temporary,O
order,O
),O
and,O
IC-26249,O
(,O
Nov,O
.,O
,O
4,O
",",O
2003,O
),O
(,O
permanent,O
order,O
),O
.,O
,O
Research,O
Analysts,O
-,O
JPMSI,I-BUSINESS
On,O
April,O
28,O
",",O
2003,O
",",O
the,O
Commission,O
filed,O
a,O
complaint,O
(,O
the,O
“,O
JPMSI,I-MISCELLANEOUS
Research,I-MISCELLANEOUS
Analysts,I-MISCELLANEOUS
Complaint,I-MISCELLANEOUS
”,O
),O
against,O
JPMSI,I-BUSINESS
in,O
the,O
United,I-COURT
States,I-COURT
District,I-COURT
Court,I-COURT
for,I-COURT
the,I-COURT
Southern,I-COURT
District,I-COURT
of,I-COURT
New,I-COURT
York,I-COURT
(,O
the,O
“,O
New,I-COURT
York,I-COURT
District,I-COURT
Court,I-COURT
”,O
),O
in,O
a,O
civil,O
action,O
captioned,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
v.,O
J.P.,I-BUSINESS
Morgan,I-BUSINESS
Securities,I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
The,O
JPSMI,I-MISCELLANEOUS
Research,I-MISCELLANEOUS
Analysts,I-MISCELLANEOUS
Complaint,I-MISCELLANEOUS
alleged,O
that,O
JPMSI,I-BUSINESS
violated,O
then,O
Conduct,O
Rules,O
2110,O
",",O
22l0,O
(,O
d,O
),O
(,O
1,O
),O
(,O
A,O
),O
",",O
and,O
3010,O
of,O
NASD,I-GOVERNMENT
",",I-GOVERNMENT
Inc.,I-GOVERNMENT
(,O
“,O
NASD,I-GOVERNMENT
”,O
),O
and,O
Rules,O
342,O
",",O
"401,472",O
",",O
and,O
476,O
(,O
a,O
),O
(,O
6,O
),O
of,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
“,O
NYSE,I-BUSINESS
”,O
),O
(,O
such,O
NYSE,I-BUSINESS
and,O
NASD,I-GOVERNMENT
rules,O
together,O
",",O
“,O
Exchange,O
Rules,O
”,O
),O
by,O
engaging,O
in,O
acts,O
and,O
practices,O
that,O
imposed,O
conflicts,O
of,O
interest,O
on,O
its,O
research,O
analysts,O
.,O
,O
The,O
Complaint,O
also,O
alleged,O
that,O
JPMSI,I-BUSINESS
failed,O
to,O
:,O
(,O
a,O
),O
disclose,O
that,O
JPMSI,I-BUSINESS
made,O
payments,O
for,O
research,O
to,O
other,O
broker-dealers,O
not,O
involved,O
in,O
an,O
underwriting,O
transaction,O
and,O
(,O
b,O
),O
establish,O
and,O
maintain,O
adequate,O
policies,O
",",O
systems,O
",",O
and,O
procedures,O
to,O
detect,O
and,O
prevent,O
the,O
foregoing,O
investment,O
banking,O
influences,O
and,O
conflicts,O
of,O
interest,O
.,O
,O
On,O
April,O
21,O
",",O
2003,O
",",O
JPMSI,I-BUSINESS
executed,O
a,O
Consent,O
of,O
JPMSI,I-BUSINESS
(,O
the,O
“,O
JPMSI,I-MISCELLANEOUS
Research,I-MISCELLANEOUS
Analysts,I-MISCELLANEOUS
Consent,I-MISCELLANEOUS
”,O
),O
in,O
which,O
it,O
neither,O
admitted,O
nor,O
denied,O
any,O
of,O
the,O
allegations,O
in,O
the,O
JPMSI,I-MISCELLANEOUS
Research,I-MISCELLANEOUS
Analysts,I-MISCELLANEOUS
Complaint,I-MISCELLANEOUS
",",O
except,O
as,O
to,O
jurisdiction,O
",",O
but,O
consented,O
to,O
the,O
imposition,O
of,O
an,O
injunction,O
",",O
certain,O
other,O
equitable,O
relief,O
",",O
and,O
a,O
payment,O
of,O
$,O
80,O
million,O
.,O
,O
On,O
October,O
31,O
",",O
2003,O
",",O
the,O
New,I-COURT
York,I-COURT
District,I-COURT
Court,I-COURT
entered,O
a,O
Final,O
Judgment,O
As,O
To,O
Defendant,O
JPMSI,I-BUSINESS
(,O
the,O
“,O
JPMSI,I-MISCELLANEOUS
Research,I-MISCELLANEOUS
Analysts,I-MISCELLANEOUS
Final,I-MISCELLANEOUS
Judgment,I-MISCELLANEOUS
”,O
),O
that,O
",",O
among,O
other,O
things,O
",",O
enjoined,O
JPMSI,I-BUSINESS
",",O
directly,O
or,O
through,O
its,O
officers,O
",",O
directors,O
",",O
agents,O
and,O
employees,O
",",O
from,O
violating,O
then,O
NASD,I-LEGISLATION/ACT
Conduct,I-LEGISLATION/ACT
Rules,I-LEGISLATION/ACT
2110,O
",",O
2210,O
",",O
and,O
3010,O
and,O
NYSE,I-LEGISLATION/ACT
Rules,I-LEGISLATION/ACT
342,O
",",O
401,O
",",O
472,O
",",O
and,O
476,O
(,O
the,O
“,O
JPMSI,I-MISCELLANEOUS
Research,I-MISCELLANEOUS
Analysts,I-MISCELLANEOUS
Injunction,I-MISCELLANEOUS
”,O
),O
.,O
,O
Additionally,O
",",O
the,O
JPMSI,I-MISCELLANEOUS
Research,I-MISCELLANEOUS
Analysts,I-MISCELLANEOUS
Final,I-MISCELLANEOUS
Judgment,I-MISCELLANEOUS
ordered,O
JPMS,I-BUSINESS
to,O
make,O
payments,O
aggregating,O
$,O
80,O
million,O
.,O
,O
JPMSI,I-BUSINESS
also,O
agreed,O
to,O
comply,O
with,O
certain,O
undertakings,O
",",O
including,O
",",O
among,O
other,O
things,O
",",O
adopting,O
and,O
implementing,O
policies,O
and,O
procedures,O
relating,O
to,O
certain,O
research,O
activities,O
.,O
,O
The,O
Commission,O
pursuant,O
to,O
Section,O
9,O
(,O
c,O
),O
exempted,O
JPMSI,I-BUSINESS
",",O
and,O
any,O
other,O
existing,O
company,O
of,O
which,O
JPMSI,I-BUSINESS
is,O
an,O
affiliated,O
person,O
and,O
any,O
other,O
company,O
of,O
which,O
JPMSI,I-BUSINESS
may,O
become,O
an,O
affiliated,O
person,O
in,O
the,O
future,O
",",O
from,O
the,O
provisions,O
of,O
Section,O
9,O
(,O
a,O
),O
of,O
the,O
Act,O
with,O
respect,O
to,O
the,O
JPMSI,I-MISCELLANEOUS
Research,I-MISCELLANEOUS
Analysts,I-MISCELLANEOUS
Injunction,I-MISCELLANEOUS
.,O
,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
Release,O
Nos,O
.,O
,O
31,O
",",O
2003,O
),O
(,O
notice,O
and,O
temporary,O
order,O
),O
and,O
IC-27134,O
(,O
Oct,O
.,O
,O
27,O
",",O
2005,O
),O
(,O
permanent,O
order,O
),O
.,O
,O
Research,O
Analysts—Bear,I-BUSINESS
Stearns,I-BUSINESS
On,O
or,O
about,O
April,O
28,O
",",O
2003,O
",",O
the,O
Commission,O
filed,O
a,O
complaint,O
(,O
the,O
“,O
Bear,I-MISCELLANEOUS
Research,I-MISCELLANEOUS
Analysts,I-MISCELLANEOUS
Complaint,I-MISCELLANEOUS
”,O
),O
against,O
Bear,I-BUSINESS
",",I-BUSINESS
Stearns,I-BUSINESS
&,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
(,O
“,O
BS,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
”,O
),O
in,O
the,O
New,I-COURT
York,I-COURT
District,I-COURT
Court,I-COURT
in,O
a,O
civil,O
action,O
captioned,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
v.,O
Bear,I-BUSINESS
",",I-BUSINESS
Stearns,I-BUSINESS
&,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
then,O
executed,O
a,O
consent,O
and,O
undertaking,O
in,O
which,O
BS,I-BUSINESS
&,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
denied,O
any,O
of,O
the,O
allegations,O
in,O
the,O
Bear,I-MISCELLANEOUS
Research,I-MISCELLANEOUS
Analysts,I-MISCELLANEOUS
Complaint,I-MISCELLANEOUS
",",O
except,O
as,O
to,O
jurisdiction,O
",",O
but,O
consented,O
to,O
the,O
entry,O
of,O
a,O
final,O
judgment,O
against,O
BS,I-BUSINESS
&,I-BUSINESS
Co,I-BUSINESS
.,O
,O
by,O
the,O
New,I-COURT
York,I-COURT
District,I-COURT
Court,I-COURT
(,O
the,O
“,O
Bear,I-MISCELLANEOUS
Final,I-MISCELLANEOUS
Judgment,I-MISCELLANEOUS
”,O
),O
.,O
,O
The,O
Bear,I-MISCELLANEOUS
Final,I-MISCELLANEOUS
Judgment,I-MISCELLANEOUS
",",O
among,O
other,O
things,O
",",O
enjoined,O
BS,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",O
directly,O
or,O
through,O
its,O
officers,O
",",O
directors,O
",",O
agents,O
and,O
employees,O
",",O
from,O
violating,O
Rules,O
401,O
",",O
476,O
",",O
472,O
and,O
342,O
of,O
the,O
NYSE,I-BUSINESS
and,O
then,O
Rules,O
2110,O
",",O
2210,O
and,O
3010,O
of,O
the,O
NASD,I-GOVERNMENT
(,O
the,O
“,O
Bear,I-MISCELLANEOUS
Research,I-MISCELLANEOUS
Analysts,I-MISCELLANEOUS
Injunction,I-MISCELLANEOUS
”,O
),O
.,O
,O
Additionally,O
",",O
the,O
Bear,I-MISCELLANEOUS
Final,I-MISCELLANEOUS
Judgment,I-MISCELLANEOUS
ordered,O
BS,I-BUSINESS
&,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
to,O
make,O
payments,O
aggregating,O
$,O
80,O
million,O
",",O
and,O
to,O
comply,O
with,O
the,O
undertakings,O
set,O
forth,O
in,O
the,O
Bear,I-MISCELLANEOUS
Final,I-MISCELLANEOUS
Judgment,I-MISCELLANEOUS
.,O
,O
Those,O
undertakings,O
involve,O
the,O
adoption,O
and,O
implementation,O
of,O
policies,O
and,O
procedures,O
relating,O
to,O
BS,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
’,O
s,O
research,O
practices,O
.,O
,O
The,O
Commission,O
pursuant,O
to,O
Section,O
9,O
(,O
c,O
),O
exempted,O
BS,I-BUSINESS
&,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
and,O
any,O
other,O
existing,O
company,O
of,O
which,O
BS,I-BUSINESS
&,I-BUSINESS
Co,I-BUSINESS
.,O
,O
is,O
an,O
affiliated,O
person,O
and,O
any,O
other,O
company,O
of,O
which,O
BS,I-BUSINESS
&,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
may,O
become,O
an,O
affiliated,O
person,O
in,O
the,O
future,O
",",O
from,O
the,O
provisions,O
of,O
Section,O
9,O
(,O
a,O
),O
of,O
the,O
Act,O
with,O
respect,O
to,O
the,O
Bear,I-MISCELLANEOUS
Research,I-MISCELLANEOUS
Analysts,I-MISCELLANEOUS
Injunction,I-MISCELLANEOUS
.,O
,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
Release,O
Nos,O
.,O
,O
IC-,O
26237,O
(,O
Oct,O
.,O
,O
31,O
",",O
2003,O
),O
(,O
notice,O
and,O
temporary,O
order,O
),O
and,O
IC-,O
27136,O
(,O
Oct,O
.,O
,O
27,O
",",O
2005,O
),O
(,O
permanent,O
order,O
),O
.,O
,O
The,O
Applicants,O
agree,O
that,O
any,O
order,O
granted,O
by,O
the,O
Commission,O
pursuant,O
to,O
this,O
Application,O
will,O
be,O
subject,O
to,O
the,O
following,O
condition,O
:,O
Any,O
temporary,O
exemption,O
granted,O
pursuant,O
to,O
the,O
Application,O
shall,O
be,O
without,O
prejudice,O
to,O
",",O
and,O
shall,O
not,O
limit,O
the,O
Commission,O
’,O
s,O
rights,O
in,O
any,O
manner,O
with,O
respect,O
to,O
",",O
any,O
Commission,O
investigation,O
of,O
",",O
or,O
administrative,O
proceedings,O
involving,O
or,O
against,O
",",O
Covered,O
Persons,O
",",O
including,O
without,O
limitation,O
",",O
the,O
consideration,O
by,O
the,O
Commission,O
of,O
a,O
permanent,O
exemption,O
from,O
Section,O
9,O
(,O
a,O
),O
of,O
the,O
Act,O
requested,O
pursuant,O
to,O
the,O
Application,O
or,O
the,O
revocation,O
or,O
removal,O
of,O
any,O
temporary,O
exemptions,O
granted,O
under,O
the,O
Act,O
in,O
connection,O
with,O
the,O
Application,O
.,O
,O
For,O
the,O
reasons,O
set,O
forth,O
above,O
",",O
each,O
of,O
the,O
Applicants,O
meets,O
the,O
standards,O
for,O
exemption,O
specified,O
in,O
Section,O
9,O
(,O
c,O
),O
of,O
the,O
Act,O
and,O
",",O
therefore,O
",",O
respectfully,O
apply,O
",",O
on,O
behalf,O
of,O
themselves,O
and,O
the,O
Covered,O
Persons,O
",",O
for,O
the,O
entry,O
of,O
the,O
following,O
orders,O
by,O
the,O
Commission,O
as,O
soon,O
as,O
may,O
be,O
practicable,O
:,O
,O
2.,O
that,O
",",O
pursuant,O
to,O
Section,O
9,O
(,O
c,O
),O
of,O
the,O
Act,O
",",O
each,O
of,O
the,O
Applicants,O
and,O
the,O
other,O
Covered,O
Persons,O
be,O
permanently,O
exempted,O
from,O
any,O
of,O
the,O
provisions,O
of,O
Section,O
9,O
(,O
a,O
),O
of,O
the,O
Act,O
that,O
might,O
otherwise,O
be,O
operative,O
as,O
a,O
result,O
of,O
the,O
Action,O
.,O
,O
Pursuant,O
to,O
Rule,O
0-2,O
(,O
f,O
),O
under,O
the,O
Act,O
",",O
the,O
Applicants,O
state,O
that,O
their,O
addresses,O
are,O
as,O
indicated,O
on,O
the,O
cover,O
page,O
of,O
this,O
Application,O
and,O
further,O
state,O
that,O
all,O
communications,O
or,O
questions,O
concerning,O
this,O
Application,O
should,O
be,O
directed,O
to,O
:,O
,O
with,O
a,O
copy,O
to,O
:,O
,O
The,O
Applicants,O
request,O
that,O
the,O
Commission,O
issue,O
the,O
requested,O
orders,O
pursuant,O
to,O
Rule,O
0-5,O
under,O
the,O
Act,O
without,O
conducting,O
a,O
hearing,O
.,O
,O
Pursuant,O
to,O
Rule,O
0-2,O
(,O
c,O
),O
(,O
1,O
),O
under,O
the,O
Act,O
",",O
each,O
Applicant,O
states,O
that,O
under,O
the,O
provisions,O
of,O
each,O
Applicant,O
’,O
s,O
governing,O
instruments,O
",",O
the,O
responsibility,O
for,O
the,O
management,O
of,O
its,O
affairs,O
and,O
business,O
is,O
vested,O
in,O
its,O
Chief,O
Executive,O
Officer,O
",",O
Board,O
of,O
Directors,O
",",O
officers,O
",",O
or,O
other,O
governing,O
body,O
",",O
as,O
applicable,O
.,O
,O
Each,O
Applicant,O
represents,O
that,O
the,O
undersigned,O
individual,O
is,O
authorized,O
to,O
file,O
this,O
Application,O
in,O
its,O
name,O
and,O
on,O
its,O
behalf,O
.,O
,O
The,O
certifications,O
required,O
by,O
Rule,O
0-2,O
(,O
c,O
),O
(,O
1,O
),O
under,O
the,O
Act,O
are,O
included,O
on,O
the,O
signature,O
pages,O
to,O
this,O
Application,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-1,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-2,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-3,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-4,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-5,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-6,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-7,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-8,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-9,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-10,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-11,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-12,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-13,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-14,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-15,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-16,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-17,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-18,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-19,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-20,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
Applicant,O
named,O
below,O
has,O
caused,O
this,O
Application,O
to,O
be,O
duly,O
signed,O
on,O
its,O
behalf,O
on,O
the,O
29th,O
day,O
of,O
June,O
",",O
2011,O
.,O
,O
The,O
authorization,O
required,O
by,O
rule,O
0-2,O
(,O
c,O
),O
under,O
the,O
Act,O
is,O
included,O
in,O
Exhibit,O
A-21,O
to,O
this,O
Application,O
.,O
,O
All,O
action,O
by,O
stockholders,O
",",O
trustees,O
",",O
directors,O
",",O
or,O
other,O
bodies,O
necessary,O
to,O
authorize,O
deponent,O
to,O
execute,O
and,O
file,O
such,O
instrument,O
has,O
been,O
taken,O
.,O
,O
The,O
undersigned,O
is,O
familiar,O
with,O
such,O
instrument,O
",",O
and,O
the,O
contents,O
thereof,O
",",O
and,O
that,O
the,O
facts,O
therein,O
set,O
forth,O
are,O
true,O
to,O
the,O
best,O
of,O
his,O
or,O
her,O
knowledge,O
",",O
information,O
and,O
belief,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
of,O
J.P.,I-BUSINESS
MORGAN,I-BUSINESS
SECURITIES,I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
JPMS,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Carlos,I-PERSON
M.,I-PERSON
Hernandez,I-PERSON
",",O
elected,O
President,O
and,O
Managing,O
Director,O
of,O
JPMS,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
him,O
as,O
such,O
under,O
JPMS,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
of,O
BEAR,I-BUSINESS
STEARNS,I-BUSINESS
ASSET,I-BUSINESS
MANAGEMENT,I-BUSINESS
INC.,I-BUSINESS
(,O
“,O
BSAM,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Greg,I-PERSON
Quental,I-PERSON
",",O
elected,O
Director,O
of,O
BSAM,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
him,O
as,O
such,O
under,O
BSAM,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
of,O
BEAR,I-BUSINESS
STEARNS,I-BUSINESS
HEALTH,I-BUSINESS
INNOVENTURES,I-BUSINESS
MANAGEMENT,I-BUSINESS
",",I-BUSINESS
L.L.C.,I-BUSINESS
(,O
“,O
BSHIM,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Todd,I-PERSON
Hesse,I-PERSON
",",O
elected,O
Managing,O
Director,O
of,O
BSHIM,O
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
him,O
as,O
such,O
under,O
BSHIM,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
of,O
BSCGP,I-BUSINESS
INC.,I-BUSINESS
(,O
“,O
BSCGP,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Todd,I-PERSON
Hesse,I-PERSON
",",O
elected,O
Managing,O
Director,O
of,O
BSCGP,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
him,O
as,O
such,O
under,O
BSCGP,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
General,O
Counsel,O
of,O
CONSTELLATION,I-BUSINESS
GROWTH,I-BUSINESS
CAPITAL,I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
Constellation,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Faith,I-PERSON
Rosenfeld,I-PERSON
",",O
elected,O
Chief,O
Administrative,O
Officer,O
of,O
Constellation,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
her,O
as,O
such,O
under,O
Constellation,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
of,O
CONSTELLATION,I-BUSINESS
VENTURES,I-BUSINESS
MANAGEMENT,I-BUSINESS
II,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
Constellation,I-BUSINESS
II,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Todd,I-PERSON
Hesse,I-PERSON
",",O
elected,O
Managing,O
Director,O
of,O
Constellation,I-BUSINESS
II,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
him,O
as,O
such,O
under,O
Constellation,O
II,O
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
General,O
Counsel,O
of,O
HIGHBRIDGE,I-BUSINESS
CAPITAL,I-BUSINESS
MANAGEMENT,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
Highbridge,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
John,I-PERSON
Oliva,I-PERSON
",",O
elected,O
Chief,O
Compliance,O
Officer,O
of,O
Highbridge,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
him,O
as,O
such,O
under,O
Highbridge,O
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Chief,O
Compliance,O
Officer,O
of,O
JF,I-BUSINESS
INTERNATIONAL,I-BUSINESS
MANAGEMENT,I-BUSINESS
INC.,I-BUSINESS
(,O
“,O
JFIMI,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Ken,I-PERSON
Tam,I-PERSON
",",O
elected,O
Director,O
of,O
JFIMI,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
him,O
as,O
such,O
under,O
JFIMI,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Secretary,O
of,O
JPMORGAN,I-BUSINESS
ASSET,I-BUSINESS
MANAGEMENT,I-BUSINESS
(,I-BUSINESS
UK,I-BUSINESS
),I-BUSINESS
LIMITED,I-BUSINESS
(,O
“,O
JPMAMUK,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
James,I-PERSON
B.,I-PERSON
Broderick,I-PERSON
",",O
elected,O
Director,O
of,O
JPMAMUK,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
him,O
as,O
such,O
under,O
JPMAMUK,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
of,O
JPMORGAN,I-BUSINESS
DISTRIBUTION,I-BUSINESS
SERVICES,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
(,O
“,O
JPMDS,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Robert,I-PERSON
L.,I-PERSON
Young,I-PERSON
",",O
elected,O
Director,O
and,O
Managing,O
Director,O
of,O
JPMDS,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
him,O
as,O
such,O
under,O
JPMDS,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
of,O
J.P.,I-BUSINESS
MORGAN,I-BUSINESS
INSTITUTIONAL,I-BUSINESS
INVESTMENTS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
(,O
“,O
JPMII,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
George,I-PERSON
Gatch,I-PERSON
",",O
elected,O
President,O
and,O
Director,O
of,O
JPMII,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
him,O
as,O
such,O
under,O
JPMII,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
of,O
J.P.,I-BUSINESS
MORGAN,I-BUSINESS
INVESTMENT,I-BUSINESS
MANAGEMENT,I-BUSINESS
INC.,I-BUSINESS
(,O
“,O
JPMIM,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
George,I-PERSON
Catch,I-PERSON
",",O
elected,O
Chief,O
Executive,O
Officer,O
",",O
President,O
and,O
Director,O
of,O
JPMIM,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
him,O
as,O
such,O
under,O
JPMIM,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
of,O
J.P.,I-BUSINESS
MORGAN,I-BUSINESS
LATIN,I-BUSINESS
AMERICA,I-BUSINESS
MANAGEMENT,I-BUSINESS
COMPANY,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
JPMLAM,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Ana,I-PERSON
Capella,I-PERSON
Gomez-Acebo,I-PERSON
",",O
elected,O
Managing,O
Director,O
of,O
JPMLAM,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
her,O
as,O
such,O
under,O
JPMLAM,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
of,O
J.P.,I-BUSINESS
MORGAN,I-BUSINESS
PARTNERS,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
JPMP,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Ana,I-PERSON
Capella,I-PERSON
Gomez-Acebo,I-PERSON
",",O
elected,O
Managing,O
Director,O
of,O
JPMP,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
her,O
as,O
such,O
under,O
JPMP,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Assistant,O
Secretary,O
of,O
J.P.,I-BUSINESS
MORGAN,I-BUSINESS
PRIVATE,I-BUSINESS
INVESTMENTS,I-BUSINESS
INC.,I-BUSINESS
(,O
“,O
JPMPI,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Michael,I-PERSON
Raczynski,I-PERSON
",",O
elected,O
Chief,O
Compliance,O
Officer,O
of,O
JPMPI,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
him,O
as,O
such,O
under,O
JPMPI,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
of,O
OEP,I-BUSINESS
CO-INVESTORS,I-BUSINESS
MANAGEMENT,I-BUSINESS
II,I-BUSINESS
",",I-BUSINESS
LTD.,I-BUSINESS
(,O
“,O
OEP,I-BUSINESS
II,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Richard,I-PERSON
M.,I-PERSON
Cashin,I-PERSON
",",O
elected,O
President,O
of,O
OEP,I-BUSINESS
II,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
him,O
as,O
such,O
under,O
OEP,I-BUSINESS
II,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
of,O
OEP,I-BUSINESS
CO-INVESTORS,I-BUSINESS
MANAGEMENT,I-BUSINESS
III,I-BUSINESS
",",I-BUSINESS
LTD.,I-BUSINESS
(,O
“,O
OEP,I-BUSINESS
III,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Richard,I-PERSON
M.,I-PERSON
Cashin,I-PERSON
",",O
elected,O
President,O
of,O
OEP,I-BUSINESS
III,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
her,O
as,O
such,O
under,O
OEP,I-BUSINESS
III,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
of,O
SECURITY,I-BUSINESS
CAPITAL,I-BUSINESS
RESEARCH,I-BUSINESS
&,I-BUSINESS
MANAGEMENT,I-BUSINESS
INCORPORATED,I-BUSINESS
(,O
“,O
Security,I-BUSINESS
Capital,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Anthony,I-PERSON
R.,I-PERSON
Manno,I-PERSON
Jr.,I-PERSON
",",O
elected,O
Chief,O
Executive,O
Officer,O
",",O
President,O
and,O
Director,O
of,O
Security,I-BUSINESS
Capital,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
him,O
as,O
such,O
under,O
Security,I-BUSINESS
Capital,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
of,O
SIXTY,I-BUSINESS
WALL,I-BUSINESS
STREET,I-BUSINESS
GP,I-BUSINESS
CORPORATION,I-BUSINESS
(,O
“,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
Street,I-BUSINESS
GP,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Ana,I-PERSON
Capella,I-PERSON
Gomez-Acebo,I-PERSON
",",O
elected,O
Managing,O
Director,O
of,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
Street,I-BUSINESS
GP,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
her,O
as,O
such,O
under,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
Street,I-BUSINESS
GP,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
of,O
SIXTY,I-BUSINESS
WALL,I-BUSINESS
STREET,I-BUSINESS
MANGAGEMENT,I-BUSINESS
COMPANY,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
Street,I-BUSINESS
Management,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Ana,I-PERSON
Capella,I-PERSON
Gomez-Acebo,I-PERSON
",",O
elected,O
Managing,O
Director,O
of,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
Street,I-BUSINESS
Management,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
her,O
as,O
such,O
under,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
Street,I-BUSINESS
Management,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
The,O
undersigned,O
",",O
being,O
duly,O
elected,O
Vice,O
President,O
and,O
Assistant,O
Secretary,O
TECHNOLOGY,I-BUSINESS
COINVESTORS,I-BUSINESS
MANAGEMENT,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
“,O
TCM,I-BUSINESS
”,O
),O
",",O
does,O
hereby,O
certify,O
that,O
this,O
Application,O
is,O
signed,O
by,O
Ana,I-PERSON
Capella,I-PERSON
Gomez-Acebo,I-PERSON
",",O
elected,O
Managing,O
Director,O
of,O
TCM,I-BUSINESS
pursuant,O
to,O
the,O
general,O
authority,O
vested,O
in,O
her,O
as,O
such,O
under,O
TCM,I-BUSINESS
policy,O
and,O
required,O
documents,O
.,O
,O
IN,O
WITNESS,O
WHEREOF,O
",",O
I,O
have,O
set,O
my,O
hand,O
this,O
June,O
29,O
",",O
2011,O
.,O
,O
Bear,I-BUSINESS
Stearns,I-BUSINESS
Asset,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
,O
Bear,I-BUSINESS
Stearns,I-BUSINESS
Health,I-BUSINESS
Innoventures,I-BUSINESS
Management,I-BUSINESS
",",I-BUSINESS
L.L.C.,I-BUSINESS
,O
Constellation,I-BUSINESS
Growth,I-BUSINESS
Capital,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
Constellation,B-BUSINESS
Ventures,I-BUSINESS
Management,I-BUSINESS
II,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
Highbridge,B-BUSINESS
Capital,I-BUSINESS
Management,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
J.P.,B-BUSINESS
Morgan,I-BUSINESS
Investment,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
,O
Morgan,I-BUSINESS
Latin,I-BUSINESS
America,I-BUSINESS
Management,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
J.P.,B-BUSINESS
Morgan,I-BUSINESS
Partners,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
J.P.,B-BUSINESS
Morgan,I-BUSINESS
Private,I-BUSINESS
Investments,I-BUSINESS
Inc.,I-BUSINESS
,O
JF,I-BUSINESS
International,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
,O
JPMorgan,I-BUSINESS
Asset,I-BUSINESS
Management,I-BUSINESS
(,I-BUSINESS
UK,I-BUSINESS
),I-BUSINESS
Limited,I-BUSINESS
,O
OEP,B-BUSINESS
Co-Investors,I-BUSINESS
Management,I-BUSINESS
II,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
,O
OEP,I-BUSINESS
Co-Investors,I-BUSINESS
Management,I-BUSINESS
III,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
,O
JPMorgan,I-BUSINESS
Distribution,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Morgan,I-BUSINESS
Institutional,I-BUSINESS
Investments,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Bear,I-BUSINESS
Stearns,I-BUSINESS
Asset,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
,O
Bear,I-BUSINESS
Stearns,I-BUSINESS
Asset,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
,O
currently,O
acts,O
as,O
the,O
investment,O
adviser,O
to,O
the,O
following,O
open-end,O
fund,O
.,O
,O
Highbridge,I-BUSINESS
Capital,I-BUSINESS
Management,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
currently,O
acts,O
as,O
the,O
sub-adviser,O
to,O
the,O
following,O
open-end,O
funds,O
.,O
,O
As,O
of,O
June,O
21,O
",",O
2011,O
.,O
,O
JF,I-BUSINESS
International,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
,O
JF,I-BUSINESS
International,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
,O
currently,O
acts,O
as,O
the,O
investment,O
adviser,O
to,O
the,O
following,O
closed-end,O
fund,O
.,O
,O
JF,I-BUSINESS
International,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
currently,O
acts,O
as,O
the,O
sub-adviser,O
to,O
the,O
following,O
open-end,O
funds,O
.,O
,O
Morgan,I-BUSINESS
Investment,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
,O
Morgan,I-BUSINESS
Investment,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
currently,O
acts,O
as,O
the,O
investment,O
adviser,O
to,O
the,O
following,O
open-end,O
funds,O
.,O
,O
Morgan,I-BUSINESS
Fleming,I-BUSINESS
Mutual,I-BUSINESS
Fund,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
JPMorgan,I-BUSINESS
Value,I-BUSINESS
Opportunities,I-BUSINESS
Fund,I-BUSINESS
Inc.,I-BUSINESS
,O
Morgan,I-BUSINESS
Investment,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
currently,O
acts,O
as,O
the,O
investment,O
adviser,O
to,O
the,O
following,O
closed-end,O
funds,O
.,O
,O
Morgan,I-BUSINESS
Investment,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
currently,O
acts,O
as,O
the,O
sub-adviser,O
to,O
the,O
following,O
open-end,O
funds,O
.,O
,O
ING,I-BUSINESS
Partners,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Principal,I-BUSINESS
Funds,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Principal,I-BUSINESS
Variable,I-BUSINESS
Contracts,I-BUSINESS
Funds,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
JPMorgan,I-BUSINESS
Asset,I-BUSINESS
Management,I-BUSINESS
(,I-BUSINESS
UK,I-BUSINESS
),I-BUSINESS
Limited,I-BUSINESS
currently,O
acts,O
as,O
the,O
investment,O
adviser,O
to,O
the,O
following,O
closed-end,O
fund,O
.,O
,O
JPMorgan,I-BUSINESS
Distribution,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
JPMorgan,I-BUSINESS
Distribution,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
currently,O
acts,O
as,O
the,O
distributor,O
for,O
the,O
following,O
open-end,O
funds,O
.,O
,O
Morgan,I-BUSINESS
Fleming,I-BUSINESS
Mutual,I-BUSINESS
Fund,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
JPMorgan,I-BUSINESS
Value,I-BUSINESS
Opportunities,I-BUSINESS
Fund,I-BUSINESS
Inc.,I-BUSINESS
,O
Morgan,I-BUSINESS
Institutional,I-BUSINESS
Investments,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Morgan,I-BUSINESS
Institutional,I-BUSINESS
Investments,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
currently,O
acts,O
as,O
the,O
placement,O
agent,O
for,O
the,O
following,O
open-end,O
funds,O
.,O
,O
Morgan,I-BUSINESS
Private,I-BUSINESS
Investments,I-BUSINESS
Inc.,I-BUSINESS
,O
Morgan,I-BUSINESS
Private,I-BUSINESS
Investments,I-BUSINESS
Inc.,I-BUSINESS
currently,O
acts,O
as,O
the,O
sub-adviser,O
to,O
the,O
following,O
open-end,O
funds,O
.,O
,O
Morgan,I-BUSINESS
Private,I-BUSINESS
Investments,I-BUSINESS
Inc.,I-BUSINESS
currently,O
acts,O
as,O
the,O
sub-adviser,O
to,O
the,O
following,O
closed-end,O
fund,O
.,O
,O
Security,I-BUSINESS
Capital,I-BUSINESS
Research,I-BUSINESS
&,I-BUSINESS
Management,I-BUSINESS
Incorporated,I-BUSINESS
currently,O
acts,O
as,O
the,O
investment,O
adviser,O
to,O
the,O
following,O
open-end,O
fund,O
.,O
,O
Security,I-BUSINESS
Capital,I-BUSINESS
Research,I-BUSINESS
&,I-BUSINESS
Management,I-BUSINESS
Incorporated,I-BUSINESS
currently,O
acts,O
as,O
the,O
sub-adviser,O
to,O
the,O
following,O
open-end,O
funds,O
.,O
,O
Security,I-BUSINESS
Capital,I-BUSINESS
Research,I-BUSINESS
&,I-BUSINESS
Management,I-BUSINESS
Incorporated,I-BUSINESS
acts,O
as,O
the,O
sub-adviser,O
to,O
the,O
following,O
closed-end,O
funds,O
.,O
,O
Bear,I-BUSINESS
Stearns,I-BUSINESS
Asset,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
,O
Bear,I-BUSINESS
Stearns,I-BUSINESS
Asset,I-BUSINESS
Management,I-BUSINESS
Inc.,I-BUSINESS
currently,O
serves,O
as,O
general,O
partner,O
that,O
provides,O
investment,O
advisory,O
services,O
to,O
the,O
following,O
ESCs,O
.,O
,O
Bear,I-BUSINESS
Stearns,I-BUSINESS
Health,I-BUSINESS
Innoventures,I-BUSINESS
Management,I-BUSINESS
",",I-BUSINESS
L.L.C.,I-BUSINESS
,O
Bear,I-BUSINESS
Stearns,I-BUSINESS
Health,I-BUSINESS
Innoventures,I-BUSINESS
Management,I-BUSINESS
",",I-BUSINESS
L.L.C.,I-BUSINESS
currently,O
serves,O
as,O
general,O
partner,O
that,O
provides,O
investment,O
advisory,O
services,O
to,O
the,O
following,O
ESC,O
.,O
,O
currently,O
serves,O
as,O
general,O
partner,O
that,O
provides,O
investment,O
advisory,O
services,O
to,O
the,O
following,O
ESCs,O
.,O
,O
Constellation,I-BUSINESS
Growth,I-BUSINESS
Capital,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
currently,O
serves,O
as,O
sub-adviser,O
to,O
the,O
following,O
ESCs,O
.,O
,O
Constellation,I-BUSINESS
Ventures,I-BUSINESS
Management,I-BUSINESS
II,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
currently,O
serves,O
as,O
general,O
partner,O
that,O
provides,O
investment,O
advisory,O
services,O
to,O
the,O
following,O
ESCs,O
.,O
,O
Morgan,I-BUSINESS
Latin,I-BUSINESS
America,I-BUSINESS
Management,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
currently,O
serves,O
as,O
the,O
investment,O
adviser,O
to,O
the,O
following,O
ESC,O
.,O
,O
Morgan,I-BUSINESS
Partners,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
currently,O
serves,O
as,O
the,O
investment,O
adviser,O
to,O
the,O
following,O
ESCs,O
.,O
,O
OEP,I-BUSINESS
Co-Investors,I-BUSINESS
Management,I-BUSINESS
II,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
,O
OEP,I-BUSINESS
Co-Investors,I-BUSINESS
Management,I-BUSINESS
II,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
currently,O
serves,O
as,O
general,O
partner,O
that,O
provides,O
investment,O
advisory,O
services,O
to,O
the,O
following,O
ESC,O
.,O
,O
OEP,I-BUSINESS
Co-Investors,I-BUSINESS
Management,I-BUSINESS
III,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
,O
OEP,I-BUSINESS
Co-Investors,I-BUSINESS
Management,I-BUSINESS
III,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
currently,O
serves,O
as,O
general,O
partner,O
that,O
provides,O
investment,O
advisory,O
services,O
to,O
the,O
following,O
ESC,O
.,O
,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
Street,I-BUSINESS
GP,I-BUSINESS
Corporation,I-BUSINESS
currently,O
serves,O
as,O
the,O
investment,O
adviser,O
to,O
the,O
following,O
ESC,O
.,O
,O
Sixty,I-BUSINESS
Wall,I-BUSINESS
Street,I-BUSINESS
Management,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
currently,O
serves,O
as,O
the,O
investment,O
adviser,O
to,O
the,O
following,O
ESC,O
.,O
,O
Technology,I-BUSINESS
Coinvestors,I-BUSINESS
Management,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
currently,O
serves,O
as,O
general,O
partner,O
that,O
provides,O
investment,O
advisory,O
services,O
to,O
the,O
following,O
ESC,O
.,O
,O
-DOCSTART-,O
,O
Filed,O
by,O
Terra,I-BUSINESS
Industries,I-BUSINESS
Inc.,I-BUSINESS
,O
Subject,O
Company,O
:,O
Terra,I-BUSINESS
Industries,I-BUSINESS
Inc.,I-BUSINESS
,O
Commission,O
File,O
No.,O
On,O
March,O
12,O
",",O
2010,O
",",O
Terra,I-BUSINESS
Industries,I-BUSINESS
Inc.,I-BUSINESS
sent,O
the,O
following,O
letter,O
to,O
customers,O
:,O
,O
Dear,O
Terra,I-BUSINESS
Customer,O
:,O
,O
I,O
am,O
writing,O
to,O
inform,O
you,O
about,O
an,O
important,O
development,O
regarding,O
Terra,I-BUSINESS
.,O
,O
This,O
morning,O
Terra,I-BUSINESS
and,O
CF,I-BUSINESS
Industries,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
CF,I-BUSINESS
),O
announced,O
that,O
the,O
two,O
companies,O
have,O
reached,O
an,O
agreement,O
under,O
which,O
Terra,I-BUSINESS
will,O
be,O
acquired,O
by,O
CF,I-BUSINESS
for,O
$,O
37.15,O
in,O
cash,O
and,O
0.0953,O
of,O
a,O
share,O
of,O
CF,I-BUSINESS
common,O
stock,O
for,O
each,O
Terra,I-BUSINESS
share,O
.,O
,O
As,O
part,O
of,O
this,O
agreement,O
",",O
Terra,I-BUSINESS
has,O
terminated,O
its,O
previously,O
announced,O
merger,O
agreement,O
with,O
Yara,I-BUSINESS
International,I-BUSINESS
ASA,I-BUSINESS
.,O
,O
A,O
copy,O
of,O
the,O
press,O
release,O
that,O
Terra,I-BUSINESS
and,O
CF,I-BUSINESS
jointly,O
issued,O
this,O
morning,O
is,O
attached,O
for,O
your,O
convenience,O
and,O
can,O
be,O
found,O
on,O
the,O
investor,O
relations,O
page,O
of,O
our,O
Web,O
site,O
at,O
:,O
www.terraindustries.com,O
.,O
,O
We,O
believe,O
that,O
this,O
transaction,O
with,O
CF,I-BUSINESS
will,O
provide,O
you,O
",",O
our,O
valued,O
customers,O
",",O
with,O
an,O
exciting,O
opportunity,O
to,O
benefit,O
from,O
a,O
more,O
robust,O
supply,O
chain,O
and,O
enhanced,O
product,O
offerings,O
.,O
,O
The,O
transaction,O
with,O
CF,I-BUSINESS
is,O
subject,O
to,O
customary,O
closing,O
conditions,O
and,O
is,O
expected,O
to,O
close,O
next,O
month,O
.,O
,O
Until,O
the,O
transaction,O
closes,O
",",O
however,O
",",O
we,O
will,O
operate,O
as,O
separate,O
companies,O
and,O
it,O
will,O
remain,O
business,O
as,O
usual,O
at,O
Terra,I-BUSINESS
.,O
,O
Over,O
the,O
years,O
",",O
we,O
have,O
developed,O
a,O
strong,O
working,O
relationship,O
and,O
as,O
Terra,I-BUSINESS
becomes,O
part,O
of,O
CF,I-BUSINESS
",",O
we,O
look,O
forward,O
to,O
building,O
on,O
that,O
relationship,O
.,O
,O
While,O
we,O
will,O
make,O
every,O
effort,O
to,O
continue,O
keeping,O
you,O
informed,O
throughout,O
this,O
process,O
",",O
should,O
you,O
have,O
any,O
questions,O
",",O
I,O
encourage,O
you,O
to,O
reach,O
out,O
to,O
your,O
Terra,I-BUSINESS
sales,O
representative,O
.,O
,O
Thank,O
you,O
for,O
your,O
continued,O
support,O
.,O
,O
This,O
communication,O
is,O
neither,O
an,O
offer,O
to,O
purchase,O
nor,O
the,O
solicitation,O
of,O
an,O
offer,O
to,O
sell,O
any,O
securities,O
.,O
,O
In,O
connection,O
with,O
the,O
exchange,O
offer,O
by,O
CF,I-BUSINESS
Industries,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
CF,I-BUSINESS
),O
referred,O
to,O
in,O
this,O
communication,O
",",O
Terra,I-BUSINESS
Industries,I-BUSINESS
Inc.,I-BUSINESS
(,O
Terra,I-BUSINESS
),O
has,O
filed,O
a,O
Solicitation/Recommendation,O
Statement,O
on,O
Schedule,I-MISCELLANEOUS
14D-9,I-MISCELLANEOUS
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
the,O
SEC,I-GOVERNMENT
),O
and,O
expects,O
to,O
file,O
amendments,O
thereto,O
.,O
,O
Investors,O
and,O
security,O
holders,O
are,O
urged,O
to,O
read,O
the,O
Solicitation/Recommendation,O
Statement,O
on,O
Schedule,I-MISCELLANEOUS
14D-9,I-MISCELLANEOUS
and,O
any,O
other,O
relevant,O
documents,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
(,O
when,O
available,O
),O
because,O
they,O
will,O
contain,O
important,O
information,O
.,O
,O
Investors,O
and,O
security,O
holders,O
may,O
obtain,O
a,O
free,O
copy,O
of,O
the,O
Solicitation/Recommendation,O
Statement,O
on,O
Schedule,I-MISCELLANEOUS
14D-9,I-MISCELLANEOUS
and,O
other,O
documents,O
that,O
Terra,I-BUSINESS
files,O
with,O
the,O
SEC,I-GOVERNMENT
(,O
when,O
available,O
),O
at,O
the,O
SEC,I-GOVERNMENT
s,O
Web,O
site,O
at,O
www.sec.gov,O
and,O
Terra,I-BUSINESS
s,O
Web,O
site,O
at,O
www.terraindustries.com,O
.,O
,O
SEC,I-GOVERNMENT
(,O
when,O
available,O
),O
may,O
be,O
obtained,O
from,O
Terra,I-BUSINESS
free,O
of,O
charge,O
by,O
directing,O
a,O
request,O
to,O
Terra,I-BUSINESS
Industries,I-BUSINESS
Inc.,I-BUSINESS
",",O
Attn,O
:,O
Investor,O
Relations,O
",",O
Terra,I-BUSINESS
Industries,I-BUSINESS
Inc.,I-BUSINESS
",",O
600,O
Fourth,I-LOCATION
Street,I-LOCATION
",",O
P.O,O
.,O
,O
Box,O
6000,O
",",O
Sioux,I-LOCATION
City,I-LOCATION
",",O
IA,I-LOCATION
51102-6000,O
.,O
,O
Certain,O
statements,O
in,O
this,O
communication,O
may,O
constitute,O
forward-looking,O
statements,O
within,O
the,O
meaning,O
of,O
the,O
Private,I-LEGISLATION/ACT
Securities,I-LEGISLATION/ACT
Litigation,I-LEGISLATION/ACT
Reform,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1995,I-LEGISLATION/ACT
.,O
,O
Statements,O
made,O
in,O
connection,O
with,O
the,O
exchange,O
offer,O
referred,O
to,O
in,O
this,O
communication,O
are,O
not,O
subject,O
to,O
the,O
safe,O
harbor,O
protections,O
provided,O
to,O
forward-looking,O
statements,O
under,O
the,O
Private,I-LEGISLATION/ACT
Securities,I-LEGISLATION/ACT
Litigation,I-LEGISLATION/ACT
Reform,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1995,I-LEGISLATION/ACT
.,O
,O
Forward-looking,O
statements,O
are,O
based,O
upon,O
assumptions,O
as,O
to,O
future,O
events,O
that,O
may,O
not,O
prove,O
to,O
be,O
accurate,O
.,O
,O
Actual,O
outcomes,O
and,O
results,O
may,O
differ,O
materially,O
from,O
what,O
is,O
expressed,O
or,O
forecasted,O
in,O
these,O
forward-looking,O
statements,O
.,O
,O
As,O
a,O
result,O
",",O
these,O
statements,O
speak,O
only,O
as,O
of,O
the,O
date,O
they,O
were,O
made,O
and,O
Terra,I-BUSINESS
undertakes,O
no,O
obligation,O
to,O
publicly,O
update,O
or,O
revise,O
any,O
forward-looking,O
statements,O
",",O
whether,O
as,O
a,O
result,O
of,O
new,O
information,O
",",O
future,O
events,O
or,O
otherwise,O
",",O
except,O
as,O
otherwise,O
required,O
by,O
law,O
.,O
,O
Words,O
such,O
as,O
expects,O
",",O
intends,O
",",O
plans,O
",",O
projects,O
",",O
believes,O
",",O
estimates,O
",",O
and,O
similar,O
expressions,O
are,O
used,O
to,O
identify,O
these,O
forward-looking,O
statements,O
.,O
,O
The,O
forward-looking,O
statements,O
contained,O
herein,O
include,O
statements,O
about,O
the,O
exchange,O
offer,O
by,O
CF,I-BUSINESS
and,O
the,O
proposed,O
merger,O
of,O
a,O
wholly,O
owned,O
subsidiary,O
of,O
CF,I-BUSINESS
into,O
Terra,I-BUSINESS
.,O
,O
Forward-looking,O
statements,O
are,O
not,O
guarantees,O
of,O
future,O
performance,O
and,O
involve,O
risks,O
",",O
uncertainties,O
and,O
assumptions,O
that,O
are,O
difficult,O
to,O
predict,O
.,O
,O
These,O
risks,O
",",O
uncertainties,O
and,O
assumptions,O
include,O
",",O
among,O
others,O
:,O
,O
Additional,O
information,O
as,O
to,O
these,O
factors,O
can,O
be,O
found,O
in,O
Terra,I-BUSINESS
s,O
2009,O
Annual,O
Report/10-K,O
and,O
in,O
Terra,O
s,O
subsequent,O
Quarterly,O
Reports,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
(,O
when,O
available,O
),O
",",O
in,O
each,O
case,O
in,O
the,O
sections,O
entitled,O
Business,O
",",O
Risk,O
Factors,O
",",O
Legal,O
Proceedings,O
",",O
and,O
Management,O
s,O
Discussion,O
and,O
Analysis,O
of,O
Financial,O
Condition,O
and,O
Results,O
of,O
Operations,O
",",O
and,O
in,O
the,O
Notes,O
to,O
the,O
consolidated,O
financial,O
statements,O
.,O
,O
-DOCSTART-,O
,O
Linda,I-PERSON
Cvrkel,I-PERSON
Branch,O
Chief,O
United,I-GOVERNMENT
States,I-GOVERNMENT
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
Division,O
of,O
Corporation,O
Finance,O
100,O
F,I-LOCATION
Street,I-LOCATION
",",O
N.E.,I-LOCATION
,O
The,O
purpose,O
of,O
this,O
letter,O
is,O
to,O
respond,O
to,O
your,O
letter,O
of,O
June,O
20,O
",",O
2011,O
.,O
,O
For,O
your,O
convenience,O
",",O
the,O
original,O
staff,O
comments,O
have,O
been,O
repeated,O
in,O
bold,O
typeface,O
",",O
followed,O
by,O
our,O
responses,O
.,O
,O
We,O
note,O
your,O
disclosure,O
regarding,O
the,O
fact,O
that,O
you,O
believe,O
free,O
cash,O
flow,O
(,O
FCF,O
),O
is,O
a,O
useful,O
measure,O
for,O
investors,O
in,O
determining,O
your,O
ability,O
to,O
generate,O
excess,O
cash,O
flows,O
for,O
reinvestment,O
in,O
the,O
business,O
",",O
for,O
discretionary,O
deployment,O
in,O
investments,O
such,O
as,O
real,O
estate,O
or,O
acquisition,O
opportunities,O
",",O
the,O
potential,O
returning,O
of,O
capital,O
to,O
shareholders,O
or,O
the,O
repayment,O
of,O
indebtedness,O
.,O
,O
As,O
the,O
repayment,O
of,O
indebtedness,O
is,O
mentioned,O
after,O
the,O
discretionary,O
expenditures,O
",",O
as,O
well,O
as,O
the,O
fact,O
that,O
FCF,O
excludes,O
other,O
mandatory,O
expenditures,O
such,O
as,O
debt,O
service,O
",",O
this,O
statement,O
appears,O
to,O
imply,O
that,O
the,O
measure,O
represents,O
the,O
residual,O
cash,O
flow,O
available,O
for,O
discretionary,O
purposes,O
",",O
or,O
rather,O
nonmandatory,O
repayment,O
of,O
indebtedness,O
.,O
,O
Please,O
tell,O
us,O
and,O
revise,O
your,O
disclosure,O
in,O
future,O
filings,O
to,O
clarify,O
whether,O
mandatory,O
debt,O
service,O
requirements,O
or,O
other,O
non-discretionary,O
expenditures,O
are,O
deducted,O
from,O
the,O
measure,O
.,O
,O
Please,O
refer,O
to,O
Question,O
102.07,O
of,O
the,O
Compliance,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Disclosure,I-LEGISLATION/ACT
Interpretations,I-LEGISLATION/ACT
issues,O
on,O
January,O
11,O
",",O
2010,O
for,O
further,O
details,O
.,O
,O
We,O
will,O
clarify,O
our,O
definition,O
of,O
FCF,O
in,O
future,O
filings,O
.,O
,O
As,O
the,O
calculation,O
of,O
FCF,O
is,O
based,O
on,O
Cash,O
Flows,O
from,O
Operating,O
Activities,O
",",O
the,O
cash,O
payments,O
made,O
to,O
service,O
our,O
debt,O
(,O
i.e.,O
interest,O
payments,O
),O
are,O
incorporated,O
into,O
the,O
calculation,O
of,O
this,O
measure,O
while,O
repayments,O
of,O
principal,O
are,O
not,O
.,O
,O
In,O
response,O
to,O
the,O
Staff,O
s,O
comment,O
",",O
in,O
future,O
filings,O
we,O
will,O
change,O
the,O
language,O
on,O
page,O
35,O
to,O
read,O
as,O
follows,O
:,O
,O
FCF,O
is,O
defined,O
as,O
Cash,O
Flows,O
from,O
Operating,O
Activities,O
less,O
capital,O
expenditures,O
(,O
excluding,O
real,O
estate,O
),O
",",O
net,O
of,O
proceeds,O
from,O
the,O
sales,O
of,O
property,O
and,O
equipment,O
and,O
other,O
",",O
net,O
and,O
additions,O
to,O
customer,O
acquisition,O
cost,O
.,O
,O
Our,O
management,O
uses,O
this,O
measure,O
when,O
evaluating,O
the,O
operating,O
performance,O
of,O
our,O
consolidated,O
business,O
.,O
,O
We,O
believe,O
this,O
measure,O
provides,O
relevant,O
and,O
useful,O
information,O
to,O
our,O
current,O
and,O
potential,O
investors,O
.,O
,O
FCF,O
is,O
a,O
useful,O
measure,O
in,O
determining,O
our,O
ability,O
to,O
generate,O
excess,O
cash,O
that,O
may,O
be,O
used,O
for,O
reinvestment,O
in,O
the,O
business,O
",",O
discretionary,O
deployment,O
in,O
investments,O
such,O
as,O
real,O
estate,O
or,O
acquisition,O
opportunities,O
",",O
returning,O
of,O
capital,O
to,O
our,O
shareholders,O
and,O
voluntary,O
prepayments,O
of,O
indebtedness,O
.,O
,O
We,O
note,O
in,O
several,O
instances,O
where,O
you,O
indicate,O
that,O
even,O
though,O
you,O
are,O
unable,O
to,O
predict,O
the,O
final,O
outcome,O
of,O
the,O
case,O
",",O
you,O
do,O
not,O
expect,O
that,O
it,O
will,O
have,O
a,O
material,O
impact,O
on,O
the,O
financial,O
statements,O
.,O
,O
We,O
do,O
not,O
consider,O
such,O
disclosures,O
to,O
be,O
adequate,O
.,O
,O
Pursuant,O
to,O
ASC,I-LEGISLATION/ACT
450-20-50-3,O
if,O
no,O
accrual,O
is,O
made,O
for,O
a,O
loss,O
contingency,O
because,O
one,O
or,O
both,O
of,O
the,O
conditions,O
are,O
not,O
met,O
",",O
or,O
an,O
exposure,O
to,O
loss,O
exists,O
in,O
excess,O
of,O
the,O
amount,O
accrued,O
pursuant,O
to,O
the,O
provisions,O
of,O
ASC,I-LEGISLATION/ACT
450-20-30-1,O
",",O
disclosure,O
of,O
the,O
contingency,O
shall,O
be,O
made,O
when,O
there,O
is,O
at,O
least,O
a,O
reasonable,O
possibility,O
that,O
a,O
loss,O
or,O
an,O
additional,O
loss,O
may,O
have,O
been,O
incurred,O
.,O
,O
The,O
disclosure,O
shall,O
indicate,O
the,O
nature,O
of,O
the,O
contingency,O
and,O
shall,O
give,O
an,O
estimate,O
of,O
the,O
possible,O
loss,O
or,O
range,O
of,O
loss,O
or,O
state,O
that,O
such,O
an,O
estimate,O
can,O
not,O
be,O
made,O
.,O
,O
For,O
contingencies,O
where,O
an,O
estimate,O
can,O
not,O
be,O
made,O
of,O
the,O
possible,O
loss,O
or,O
range,O
of,O
loss,O
",",O
please,O
advise,O
us,O
as,O
to,O
why,O
.,O
,O
We,O
may,O
have,O
further,O
comment,O
upon,O
receipt,O
of,O
your,O
response,O
.,O
,O
We,O
account,O
for,O
loss,O
contingencies,O
in,O
accordance,O
with,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Codification,I-LEGISLATION/ACT
450-20,O
",",O
Loss,I-MISCELLANEOUS
Contingencies,I-MISCELLANEOUS
.,O
,O
In,O
response,O
to,O
the,O
Staff,O
s,O
comment,O
",",O
in,O
future,O
filings,O
we,O
will,O
change,O
the,O
language,O
in,O
Note,O
10,O
(,O
c,O
),O
to,O
the,O
Consolidated,O
Financial,O
Statements,O
to,O
read,O
as,O
follows,O
:,O
,O
We,O
are,O
involved,O
in,O
litigation,O
from,O
time,O
to,O
time,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
with,O
a,O
portion,O
of,O
the,O
defense,O
and/or,O
settlement,O
costs,O
being,O
covered,O
by,O
various,O
commercial,O
liability,O
insurance,O
policies,O
purchased,O
by,O
us,O
and,O
",",O
in,O
limited,O
cases,O
",",O
indemnification,O
from,O
third,O
parties,O
.,O
,O
Our,O
policy,O
is,O
to,O
establish,O
reserves,O
for,O
loss,O
contingencies,O
when,O
the,O
losses,O
are,O
both,O
probable,O
and,O
estimable,O
.,O
,O
We,O
record,O
legal,O
costs,O
associated,O
with,O
loss,O
contingencies,O
as,O
expenses,O
in,O
the,O
period,O
in,O
which,O
they,O
are,O
incurred,O
.,O
,O
The,O
matters,O
described,O
below,O
represent,O
our,O
more,O
significant,O
loss,O
contingencies,O
.,O
,O
In,O
each,O
matter,O
",",O
we,O
have,O
evaluated,O
the,O
matter,O
and,O
accrued,O
an,O
amount,O
",",O
if,O
both,O
probable,O
and,O
estimable,O
",",O
that,O
represents,O
our,O
estimate,O
of,O
any,O
probable,O
loss,O
associated,O
with,O
such,O
matter,O
.,O
,O
In,O
addition,O
",",O
we,O
have,O
estimated,O
a,O
reasonably,O
possible,O
range,O
for,O
all,O
loss,O
contingencies,O
including,O
those,O
described,O
below,O
.,O
,O
We,O
believe,O
it,O
is,O
reasonably,O
possible,O
that,O
we,O
could,O
incur,O
aggregate,O
losses,O
in,O
addition,O
to,O
amounts,O
currently,O
accrued,O
for,O
all,O
matters,O
up,O
to,O
an,O
additional,O
$,O
11,O
million,O
over,O
the,O
next,O
several,O
years,O
.,O
,O
We,O
note,O
that,O
with,O
respect,O
to,O
the,O
February,O
27,O
",",O
2010,O
earthquake,O
in,O
Chile,I-LOCATION
",",O
you,O
have,O
recorded,O
gains,O
on,O
the,O
disposal/write-down,O
of,O
property,O
",",O
plant,O
and,O
equipment,O
",",O
net,O
in,O
your,O
statement,O
of,O
operations,O
of,O
approximately,O
$,O
"10,200",O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
and,O
have,O
received,O
approximately,O
$,O
"27,000",O
in,O
insurance,O
recoveries,O
.,O
,O
Such,O
amount,O
represents,O
a,O
portion,O
of,O
your,O
business,O
personal,O
property,O
",",O
business,O
interruption,O
",",O
and,O
expense,O
claims,O
filed,O
with,O
your,O
insurance,O
carriers,O
.,O
,O
Please,O
tell,O
us,O
and,O
revise,O
the,O
notes,O
to,O
your,O
consolidated,O
financial,O
statements,O
in,O
future,O
filings,O
to,O
disclose,O
your,O
accounting,O
policy,O
for,O
involuntary,O
conversions,O
of,O
property,O
plant,O
and,O
equity,O
and,O
proceeds,O
from,O
business,O
interruption,O
insurance,O
.,O
,O
Your,O
response,O
and,O
revised,O
policy,O
should,O
address,O
the,O
timing,O
for,O
when,O
such,O
proceeds,O
are,O
recognized,O
within,O
the,O
financial,O
statements,O
",",O
and,O
the,O
aggregate,O
amount,O
of,O
business,O
interruption,O
insurance,O
recoveries,O
recognized,O
during,O
the,O
period,O
and,O
line,O
item,O
(,O
s,O
),O
in,O
the,O
statements,O
of,O
operations,O
in,O
which,O
those,O
recoveries,O
are,O
classified,O
.,O
,O
Supplementary,O
",",O
we,O
would,O
like,O
to,O
inform,O
the,O
Staff,O
that,O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
March,O
31,O
",",O
2011,O
",",O
we,O
had,O
not,O
received,O
any,O
proceeds,O
from,O
business,O
interruption,O
insurance,O
associated,O
with,O
the,O
Chilean,I-MISCELLANEOUS
earthquake,O
.,O
,O
During,O
the,O
quarter,O
ended,O
June,O
30,O
",",O
2011,O
",",O
we,O
received,O
approximately,O
$,O
0.7,O
million,O
of,O
additional,O
insurance,O
proceeds,O
related,O
to,O
the,O
Chilean,I-MISCELLANEOUS
earthquake,O
",",O
of,O
which,O
approximately,O
$,O
0.2,O
million,O
relates,O
to,O
business,O
interruption,O
insurance,O
recoveries,O
.,O
,O
In,O
future,O
filings,O
",",O
to,O
the,O
extent,O
appropriate,O
",",O
we,O
will,O
include,O
disclosure,O
of,O
the,O
below,O
policies,O
.,O
,O
Our,O
policy,O
related,O
to,O
business,O
interruption,O
insurance,O
recoveries,O
is,O
to,O
record,O
gains,O
within,O
other,O
(,O
income,O
),O
expense,O
",",O
net,O
in,O
our,O
consolidated,O
statement,O
of,O
operations,O
and,O
proceeds,O
received,O
within,O
cash,O
flows,O
from,O
operating,O
activities,O
in,O
our,O
consolidated,O
statement,O
of,O
cash,O
flows,O
.,O
,O
Such,O
amounts,O
are,O
recorded,O
in,O
the,O
period,O
when,O
the,O
cash,O
is,O
received,O
.,O
,O
Our,O
policy,O
with,O
respect,O
to,O
involuntary,O
conversion,O
of,O
property,O
",",O
plant,O
and,O
equipment,O
is,O
to,O
record,O
any,O
gain,O
or,O
loss,O
within,O
(,O
gain,O
),O
loss,O
on,O
disposal/writedown,O
of,O
property,O
",",O
plant,O
and,O
equipment,O
",",O
net,O
within,O
operating,O
income,O
in,O
our,O
consolidated,O
statement,O
of,O
operations,O
and,O
proceeds,O
received,O
within,O
cash,O
flows,O
from,O
investing,O
activities,O
within,O
our,O
consolidated,O
statement,O
of,O
cash,O
flows,O
.,O
,O
Losses,O
are,O
recorded,O
when,O
incurred,O
and,O
gains,O
are,O
recorded,O
in,O
the,O
period,O
when,O
cash,O
received,O
exceeds,O
the,O
carrying,O
value,O
of,O
the,O
related,O
property,O
",",O
plant,O
and,O
equipment,O
.,O
,O
We,O
note,O
that,O
in,O
January,O
2011,O
",",O
you,O
acquired,O
the,O
remaining,O
80,O
%,O
interest,O
of,O
your,O
joint,O
venture,O
in,O
Poland,I-LOCATION
in,O
a,O
stock,O
transaction,O
for,O
an,O
estimated,O
purchase,O
price,O
of,O
$,O
"69,500",O
.,O
,O
We,O
also,O
note,O
that,O
your,O
calculation,O
of,O
the,O
fair,O
value,O
of,O
your,O
previously,O
held,O
equity,O
interest,O
of,O
$,O
"10,425",O
utilized,O
an,O
estimate,O
of,O
the,O
control,O
premium,O
paid,O
which,O
reduced,O
the,O
total,O
fair,O
value,O
of,O
the,O
consideration,O
for,O
the,O
purchase,O
of,O
the,O
remaining,O
80,O
%,O
interest,O
by,O
40,O
%,O
.,O
,O
In,O
this,O
regard,O
",",O
please,O
advise,O
us,O
and,O
revise,O
future,O
filings,O
tell,O
us,O
how,O
you,O
determined,O
that,O
40,O
%,O
was,O
an,O
appropriate,O
discount,O
factor,O
for,O
the,O
control,O
premium,O
.,O
,O
You,O
response,O
should,O
include,O
significant,O
assumptions,O
used,O
and/or,O
factors,O
considered,O
by,O
management,O
in,O
determining,O
the,O
discount,O
rate,O
.,O
,O
In,O
determining,O
the,O
appropriate,O
discount,O
factor,O
to,O
apply,O
in,O
the,O
calculation,O
of,O
the,O
gain,O
on,O
our,O
previously,O
held,O
equity,O
interest,O
in,O
our,O
joint,O
venture,O
in,O
Poland,I-LOCATION
",",O
management,O
gave,O
consideration,O
to,O
the,O
size,O
and,O
location,O
of,O
the,O
business,O
acquired,O
",",O
the,O
potential,O
future,O
profits,O
expected,O
to,O
be,O
generated,O
by,O
the,O
business,O
and,O
publicly,O
available,O
market,O
data,O
.,O
,O
Management,O
performed,O
a,O
sensitivity,O
analysis,O
on,O
the,O
40,O
%,O
control,O
premium,O
in,O
order,O
to,O
assess,O
the,O
materiality,O
of,O
any,O
potential,O
change,O
in,O
the,O
discount,O
factor,O
.,O
,O
Management,O
noted,O
that,O
had,O
a,O
20,O
%,O
discount,O
factor,O
been,O
applied,O
for,O
purposes,O
of,O
this,O
calculation,O
",",O
that,O
the,O
gain,O
recorded,O
on,O
this,O
transaction,O
would,O
have,O
increased,O
by,O
$,O
3.5,O
million,O
.,O
,O
In,O
response,O
to,O
the,O
Staff,O
s,O
comment,O
",",O
in,O
future,O
filings,O
",",O
we,O
will,O
change,O
the,O
language,O
on,O
page,O
23,O
to,O
read,O
as,O
follows,O
:,O
,O
The,O
Company,O
determined,O
that,O
a,O
40,O
%,O
control,O
premium,O
was,O
appropriate,O
after,O
considering,O
the,O
size,O
and,O
location,O
of,O
the,O
business,O
acquired,O
",",O
the,O
potential,O
future,O
profits,O
expected,O
to,O
be,O
generated,O
by,O
the,O
Polish,I-MISCELLANEOUS
entity,O
and,O
publicly,O
available,O
market,O
data,O
.,O
,O
We,O
urge,O
all,O
persons,O
who,O
are,O
responsible,O
for,O
the,O
accuracy,O
and,O
adequacy,O
of,O
the,O
disclosure,O
in,O
the,O
filing,O
to,O
be,O
certain,O
that,O
the,O
filing,O
includes,O
all,O
information,O
required,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
and,O
that,O
they,O
have,O
provided,O
all,O
information,O
investors,O
require,O
for,O
an,O
informed,O
investment,O
decision,O
.,O
,O
Since,O
the,O
company,O
and,O
its,O
management,O
are,O
in,O
possession,O
of,O
all,O
facts,O
relating,O
to,O
a,O
company,O
s,O
disclosure,O
",",O
they,O
are,O
responsible,O
for,O
the,O
accuracy,O
and,O
adequacy,O
of,O
the,O
disclosures,O
they,O
have,O
made,O
.,O
,O
In,O
connection,O
with,O
responding,O
to,O
our,O
comments,O
",",O
please,O
provide,O
",",O
in,O
writing,O
",",O
a,O
statement,O
from,O
the,O
company,O
acknowledging,O
that,O
:,O
,O
the,O
company,O
is,O
responsible,O
for,O
the,O
adequacy,O
and,O
accuracy,O
of,O
the,O
disclosure,O
in,O
the,O
filing,O
;,O
,O
the,O
company,O
may,O
not,O
assert,O
staff,O
comments,O
as,O
a,O
defense,O
in,O
any,O
proceeding,O
initiated,O
by,O
the,O
Commission,O
or,O
any,O
person,O
under,O
the,O
federal,O
securities,O
laws,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
As,O
requested,O
",",O
we,O
acknowledge,O
that,O
:,O
,O
the,O
Company,O
is,O
responsible,O
for,O
the,O
adequacy,O
and,O
accuracy,O
of,O
the,O
disclosure,O
in,O
the,O
filing,O
;,O
,O
the,O
Company,O
may,O
not,O
assert,O
staff,O
comments,O
as,O
a,O
defense,O
in,O
any,O
proceeding,O
initiated,O
by,O
the,O
Commission,O
or,O
any,O
person,O
under,O
the,O
federal,O
securities,O
laws,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
If,O
you,O
have,O
any,O
questions,O
concerning,O
the,O
content,O
of,O
this,O
letter,O
",",O
please,O
do,O
not,O
hesitate,O
to,O
contact,O
me,O
at,O
(,O
617,O
),O
535-2767,O
.,O
,O
-DOCSTART-,O
,O
Other,O
schedules,O
required,O
by,O
29,O
CFR,I-LEGISLATION/ACT
2520.103-10,O
of,O
the,O
Department,I-GOVERNMENT
of,I-GOVERNMENT
Labor,I-GOVERNMENT
’,O
s,O
Rules,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Regulations,I-LEGISLATION/ACT
for,I-LEGISLATION/ACT
Reporting,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Disclosure,I-LEGISLATION/ACT
under,O
the,O
Employee,I-LEGISLATION/ACT
Retirement,I-LEGISLATION/ACT
Income,I-LEGISLATION/ACT
Security,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1974,I-LEGISLATION/ACT
have,O
been,O
omitted,O
because,O
they,O
are,O
not,O
applicable,O
.,O
,O
We,O
have,O
audited,O
the,O
accompanying,O
statement,O
of,O
net,O
assets,O
available,O
for,O
benefits,O
of,O
the,O
Dover,I-MISCELLANEOUS
Corporation,I-MISCELLANEOUS
Retirement,I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
the,O
related,O
statement,O
of,O
changes,O
in,O
net,O
assets,O
available,O
for,O
benefits,O
for,O
the,O
year,O
then,O
ended,O
.,O
,O
These,O
financial,O
statements,O
are,O
the,O
responsibility,O
of,O
the,O
Plan,O
's,O
management,O
.,O
,O
Our,O
responsibility,O
is,O
to,O
express,O
an,O
opinion,O
on,O
these,O
financial,O
statements,O
based,O
on,O
our,O
audit,O
.,O
,O
We,O
conducted,O
our,O
audit,O
in,O
accordance,O
with,O
the,O
standards,O
of,O
the,O
Public,I-BUSINESS
Company,I-BUSINESS
Accounting,I-BUSINESS
Oversight,I-BUSINESS
Board,I-BUSINESS
(,O
United,I-LOCATION
States,I-LOCATION
),O
.,O
,O
Those,O
standards,O
require,O
that,O
we,O
plan,O
and,O
perform,O
the,O
audit,O
to,O
obtain,O
reasonable,O
assurance,O
about,O
whether,O
the,O
financial,O
statements,O
are,O
free,O
of,O
material,O
misstatement,O
.,O
,O
An,O
audit,O
includes,O
examining,O
",",O
on,O
a,O
test,O
basis,O
",",O
evidence,O
supporting,O
the,O
amounts,O
and,O
disclosures,O
in,O
the,O
financial,O
statements,O
.,O
,O
An,O
audit,O
also,O
includes,O
assessing,O
the,O
accounting,O
principles,O
used,O
and,O
significant,O
estimates,O
made,O
by,O
management,O
",",O
as,O
well,O
as,O
evaluating,O
the,O
overall,O
financial,O
statement,O
presentation,O
.,O
,O
We,O
believe,O
that,O
our,O
audit,O
provides,O
a,O
reasonable,O
basis,O
for,O
our,O
opinion,O
.,O
,O
In,O
our,O
opinion,O
",",O
the,O
financial,O
statements,O
referred,O
to,O
above,O
present,O
fairly,O
",",O
in,O
all,O
material,O
respects,O
",",O
the,O
net,O
assets,O
available,O
for,O
benefits,O
of,O
the,O
Dover,I-MISCELLANEOUS
Corporation,I-MISCELLANEOUS
Retirement,I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
and,O
the,O
changes,O
in,O
net,O
assets,O
available,O
for,O
benefits,O
for,O
the,O
year,O
then,O
ended,O
",",O
in,O
conformity,O
with,O
U.S.,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
.,O
,O
Our,O
audit,O
was,O
performed,O
for,O
the,O
purpose,O
of,O
forming,O
an,O
opinion,O
on,O
the,O
basic,O
financial,O
statements,O
taken,O
as,O
a,O
whole,O
.,O
,O
The,O
supplemental,O
schedules,O
of,O
Schedule,O
H,O
",",O
Line,O
4i,O
–,O
Schedule,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Assets,I-MISCELLANEOUS
(,O
Held,O
at,O
End,O
of,O
Year,O
),O
and,O
Schedule,O
H,O
",",O
Line,O
4a,O
–,O
Schedule,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Delinquent,I-MISCELLANEOUS
Participant,I-MISCELLANEOUS
Contributions,I-MISCELLANEOUS
are,O
presented,O
for,O
the,O
purpose,O
of,O
additional,O
analysis,O
and,O
are,O
not,O
a,O
required,O
part,O
of,O
the,O
basic,O
financial,O
statements,O
but,O
are,O
supplementary,O
information,O
required,O
by,O
the,O
Department,I-GOVERNMENT
of,I-GOVERNMENT
Labor,I-GOVERNMENT
's,O
Rules,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Regulations,I-LEGISLATION/ACT
for,I-LEGISLATION/ACT
Reporting,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Disclosure,I-LEGISLATION/ACT
under,O
the,O
Employee,I-LEGISLATION/ACT
Retirement,I-LEGISLATION/ACT
Income,I-LEGISLATION/ACT
Security,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1974,I-LEGISLATION/ACT
.,O
,O
These,O
supplemental,O
schedules,O
are,O
the,O
responsibility,O
of,O
the,O
Plan,O
's,O
management,O
.,O
,O
The,O
supplemental,O
schedules,O
have,O
been,O
subjected,O
to,O
the,O
auditing,O
procedures,O
applied,O
in,O
the,O
audit,O
of,O
the,O
basic,O
2010,O
financial,O
statements,O
and,O
",",O
in,O
our,O
opinion,O
",",O
are,O
fairly,O
stated,O
in,O
all,O
material,O
respects,O
in,O
relation,O
to,O
the,O
basic,O
2010,O
financial,O
statements,O
taken,O
as,O
a,O
whole,O
.,O
,O
We,O
have,O
audited,O
the,O
accompanying,O
statement,O
of,O
net,O
assets,O
available,O
for,O
benefits,O
of,O
Dover,I-MISCELLANEOUS
Corporation,I-MISCELLANEOUS
Retirement,I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
as,O
of,O
December,O
31,O
",",O
2009,O
.,O
,O
This,O
financial,O
statement,O
is,O
the,O
responsibility,O
of,O
the,O
Plan,O
’,O
s,O
management,O
.,O
,O
Our,O
responsibility,O
is,O
to,O
express,O
an,O
opinion,O
on,O
this,O
financial,O
statement,O
based,O
on,O
our,O
audit,O
.,O
,O
We,O
conducted,O
our,O
audit,O
in,O
accordance,O
with,O
the,O
standards,O
of,O
the,O
Public,I-BUSINESS
Company,I-BUSINESS
Accounting,I-BUSINESS
Oversight,I-BUSINESS
Board,I-BUSINESS
(,O
United,I-LOCATION
States,I-LOCATION
),O
.,O
,O
Those,O
standards,O
require,O
that,O
we,O
plan,O
and,O
perform,O
the,O
audit,O
to,O
obtain,O
reasonable,O
assurance,O
about,O
whether,O
the,O
statement,O
of,O
net,O
assets,O
available,O
for,O
benefits,O
is,O
free,O
of,O
material,O
misstatement,O
.,O
,O
An,O
audit,O
includes,O
examining,O
",",O
on,O
a,O
test,O
basis,O
",",O
evidence,O
supporting,O
the,O
amounts,O
and,O
disclosures,O
in,O
the,O
statement,O
of,O
net,O
assets,O
available,O
for,O
benefits,O
.,O
,O
An,O
audit,O
also,O
includes,O
assessing,O
the,O
accounting,O
principles,O
used,O
and,O
significant,O
estimates,O
made,O
by,O
management,O
",",O
as,O
well,O
as,O
evaluating,O
the,O
overall,O
financial,O
statement,O
presentation,O
.,O
,O
We,O
believe,O
that,O
our,O
audit,O
provides,O
a,O
reasonable,O
basis,O
for,O
our,O
opinion,O
.,O
,O
In,O
our,O
opinion,O
",",O
the,O
statement,O
of,O
net,O
assets,O
available,O
for,O
benefits,O
referred,O
to,O
above,O
presents,O
fairly,O
",",O
in,O
all,O
material,O
respects,O
",",O
the,O
net,O
assets,O
available,O
for,O
benefits,O
of,O
Dover,I-MISCELLANEOUS
Corporation,I-MISCELLANEOUS
Retirement,I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
as,O
of,O
December,O
31,O
",",O
2009,O
",",O
in,O
conformity,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
.,O
,O
The,O
following,O
description,O
of,O
the,O
Dover,I-MISCELLANEOUS
Corporation,I-MISCELLANEOUS
Retirement,I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
(,O
the,O
“,O
Plan,O
”,O
),O
provides,O
only,O
general,O
information,O
.,O
,O
This,O
description,O
of,O
the,O
provisions,O
of,O
the,O
Plan,O
is,O
governed,O
in,O
all,O
respects,O
by,O
the,O
detailed,O
terms,O
and,O
conditions,O
contained,O
in,O
the,O
Plan,O
itself,O
.,O
,O
Participants,O
should,O
refer,O
to,O
the,O
Plan,O
document,O
for,O
a,O
more,O
complete,O
description,O
of,O
the,O
Plan,O
’,O
s,O
provisions,O
.,O
,O
The,O
Plan,O
is,O
a,O
defined,O
contribution,O
plan,O
established,O
to,O
encourage,O
and,O
facilitate,O
retirement,O
savings,O
and,O
investment,O
by,O
eligible,O
employees,O
of,O
Dover,I-BUSINESS
Corporation,I-BUSINESS
and,O
its,O
subsidiaries,O
(,O
“,O
Dover,I-BUSINESS
”,O
),O
.,O
,O
The,O
Plan,O
is,O
subject,O
to,O
the,O
provisions,O
of,O
the,O
Employee,I-LEGISLATION/ACT
Retirement,I-LEGISLATION/ACT
Income,I-LEGISLATION/ACT
Security,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1974,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
“,O
ERISA,I-LEGISLATION/ACT
”,O
),O
.,O
,O
The,O
assets,O
of,O
the,O
Plan,O
that,O
are,O
invested,O
in,O
Dover,I-BUSINESS
stock,O
are,O
in,O
a,O
separate,O
fund,O
(,O
“,O
Dover,I-BUSINESS
Stock,I-BUSINESS
Fund,I-BUSINESS
”,O
),O
which,O
constitutes,O
an,O
``,O
Employee,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Ownership,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
'',O
(,O
an,O
“,O
ESOP,I-MISCELLANEOUS
”,O
),O
under,O
certain,O
sections,O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
.,O
,O
The,O
Plan,O
gives,O
participants,O
the,O
option,O
to,O
receive,O
dividends,O
in,O
cash,O
with,O
respect,O
to,O
the,O
stock,O
held,O
in,O
the,O
Dover,I-BUSINESS
Stock,I-BUSINESS
Fund,I-BUSINESS
",",O
which,O
then,O
allows,O
Dover,I-BUSINESS
to,O
deduct,O
for,O
Federal,I-GOVERNMENT
income,O
tax,O
purposes,O
the,O
dividends,O
that,O
are,O
paid,O
with,O
respect,O
to,O
the,O
stock,O
in,O
such,O
Fund,O
",",O
regardless,O
of,O
whether,O
participants,O
actually,O
receive,O
the,O
dividends,O
in,O
cash,O
.,O
,O
Effective,O
January,O
1,O
",",O
2009,O
",",O
Wachovia,I-BUSINESS
Corporation,I-BUSINESS
was,O
acquired,O
by,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
&,I-BUSINESS
Company,I-BUSINESS
",",O
although,O
Wachovia,I-BUSINESS
Corporation,I-BUSINESS
continued,O
to,O
provide,O
administration,O
services,O
to,O
the,O
Plan,O
and,O
Wachovia,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
(,O
“,O
Trustee,O
”,O
),O
continued,O
to,O
provide,O
trustee,O
services,O
to,O
the,O
Plan,O
throughout,O
2009,O
.,O
,O
On,O
March,O
20,O
",",O
2010,O
",",O
Wachovia,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
and,O
Wachovia,I-BUSINESS
Bank,I-BUSINESS
of,I-BUSINESS
Delaware,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
were,O
merged,O
into,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
N.A,I-BUSINESS
.,I-BUSINESS
,O
The,O
combined,O
organization,O
now,O
operates,O
as,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Institutional,I-BUSINESS
Retirement,I-BUSINESS
and,I-BUSINESS
Trust,I-BUSINESS
and,O
is,O
the,O
successor,O
trustee,O
to,O
the,O
Plan,O
.,O
,O
The,O
Trustee,O
has,O
been,O
granted,O
authority,O
by,O
Dover,I-BUSINESS
’,I-BUSINESS
s,I-BUSINESS
Benefits,I-BUSINESS
Committee,I-BUSINESS
(,O
the,O
“,O
Plan,O
Administrator,O
”,O
),O
",",O
appointed,O
by,O
the,O
Compensation,O
Committee,O
of,O
the,O
Board,O
of,O
Directors,O
",",O
to,O
purchase,O
and,O
sell,O
securities,O
.,O
,O
Eligible,O
employees,O
of,O
Dover,I-BUSINESS
companies,O
(,O
“,O
Employer,O
”,O
),O
that,O
have,O
elected,O
to,O
participate,O
in,O
the,O
Plan,O
may,O
make,O
pre-tax,O
contributions,O
to,O
the,O
Plan,O
.,O
,O
Participating,O
companies,O
may,O
make,O
(,O
i,O
),O
matching,O
contributions,O
to,O
the,O
Plan,O
",",O
(,O
ii,O
),O
profit-sharing,O
contributions,O
to,O
the,O
Plan,O
",",O
or,O
(,O
iii,O
),O
both,O
matching,O
and,O
profit,O
sharing,O
contributions,O
.,O
,O
Generally,O
",",O
all,O
employees,O
of,O
participating,O
companies,O
who,O
have,O
reached,O
age,O
21,O
are,O
immediately,O
eligible,O
to,O
participate,O
in,O
the,O
Plan,O
.,O
,O
The,O
Plan,O
has,O
an,O
automatic,O
enrollment,O
feature,O
for,O
all,O
Employers,O
(,O
except,O
for,O
employee,O
groups,O
covered,O
by,O
collective,O
bargaining,O
agreements,O
that,O
have,O
not,O
authorized,O
such,O
feature,O
),O
.,O
,O
Eligible,O
employees,O
are,O
enrolled,O
automatically,O
in,O
the,O
Plan,O
at,O
a,O
3,O
%,O
pre-tax,O
contribution,O
rate,O
unless,O
they,O
formally,O
opt-out,O
of,O
the,O
Plan,O
within,O
30,O
days,O
or,O
elect,O
to,O
contribute,O
at,O
a,O
higher,O
or,O
lower,O
rate,O
.,O
,O
Such,O
participants,O
receive,O
an,O
immediate,O
company,O
match,O
(,O
if,O
their,O
Employer,O
has,O
elected,O
to,O
make,O
matching,O
contributions,O
),O
",",O
with,O
the,O
participant,O
generally,O
becoming,O
fully,O
vested,O
in,O
such,O
matching,O
contributions,O
after,O
attaining,O
one,O
year,O
of,O
service,O
.,O
,O
Pre-tax,O
contributions,O
of,O
participants,O
who,O
are,O
automatically,O
enrolled,O
in,O
the,O
Plan,O
will,O
be,O
invested,O
in,O
the,O
appropriate,O
Manning,I-BUSINESS
&,I-BUSINESS
Napier,I-BUSINESS
Retirement,I-BUSINESS
Target,I-BUSINESS
Collective,I-BUSINESS
Investment,I-BUSINESS
Trust,I-BUSINESS
Funds,I-BUSINESS
(,O
“,O
CIT,I-BUSINESS
”,O
),O
(,O
see,O
Note,O
3,O
),O
based,O
on,O
the,O
participant,O
’,O
s,O
date,O
of,O
birth,O
unless,O
the,O
participant,O
elects,O
other,O
investments,O
permitted,O
under,O
the,O
Plan,O
.,O
,O
Employee,O
pre-tax,O
deferrals,O
from,O
eligible,O
compensation,O
to,O
the,O
Plan,O
are,O
voluntary,O
.,O
,O
Eligible,O
compensation,O
generally,O
includes,O
salary,O
and,O
wages,O
",",O
commissions,O
and,O
certain,O
bonuses,O
.,O
,O
Generally,O
",",O
a,O
participant,O
may,O
elect,O
to,O
exclude,O
from,O
1,O
%,O
to,O
50,O
%,O
(,O
in,O
whole,O
percentages,O
),O
of,O
his,O
or,O
her,O
eligible,O
compensation,O
(,O
“,O
Participant,O
Contribution,O
”,O
),O
from,O
current,O
taxable,O
income,O
by,O
having,O
such,O
amount,O
contributed,O
to,O
his,O
or,O
her,O
account,O
in,O
the,O
Plan,O
.,O
,O
Participants,O
who,O
have,O
attained,O
the,O
age,O
of,O
50,O
before,O
the,O
end,O
of,O
the,O
Plan,O
year,O
are,O
eligible,O
to,O
make,O
catch-up,O
contributions,O
.,O
,O
Participants,O
may,O
also,O
contribute,O
amounts,O
representing,O
distributions,O
from,O
other,O
qualified,O
defined,O
benefit,O
or,O
defined,O
contribution,O
plans,O
.,O
,O
The,O
amount,O
contributed,O
by,O
a,O
participant,O
is,O
subject,O
to,O
applicable,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
limits,O
.,O
,O
The,O
Plan,O
allows,O
for,O
both,O
a,O
fixed,O
per-payroll,O
matching,O
contribution,O
(,O
“,O
Basic,O
Employer,O
Matching,O
Contribution,O
”,O
),O
and,O
an,O
additional,O
annual,O
year-end,O
matching,O
contribution,O
(,O
“,O
Year-end,O
Employer,O
Matching,O
Contribution,O
”,O
),O
",",O
together,O
the,O
“,O
Employer,O
Matching,O
Contribution.,O
”,O
The,O
Basic,O
Employer,O
Matching,O
Contribution,O
is,O
typically,O
a,O
fixed,O
percentage,O
(,O
e.g.,O
",",O
25,O
%,O
",",O
40,O
%,O
",",O
50,O
%,O
),O
on,O
the,O
first,O
X,O
%,O
of,O
a,O
participant,O
’,O
s,O
compensation,O
(,O
e.g.,O
",",O
6,O
%,O
),O
that,O
he,O
or,O
she,O
contributes,O
to,O
the,O
Plan,O
.,O
,O
At,O
the,O
discretion,O
of,O
an,O
Employer,O
’,O
s,O
board,O
of,O
directors,O
",",O
an,O
additional,O
Year-end,O
Employer,O
Matching,O
Contribution,O
may,O
be,O
made,O
to,O
the,O
Plan,O
on,O
behalf,O
of,O
contributing,O
participants,O
employed,O
on,O
the,O
last,O
day,O
of,O
the,O
year,O
.,O
,O
Basic,O
and,O
Year-end,O
matching,O
contributions,O
are,O
subject,O
to,O
an,O
aggregate,O
limit,O
on,O
such,O
contributions,O
of,O
200,O
%,O
of,O
the,O
first,O
6,O
%,O
of,O
each,O
participant,O
’,O
s,O
compensation,O
contributed,O
to,O
the,O
Plan,O
.,O
,O
Catch-up,O
contributions,O
are,O
not,O
matched,O
under,O
the,O
Plan,O
.,O
,O
Employer,O
Matching,O
Contributions,O
may,O
be,O
made,O
in,O
the,O
form,O
of,O
cash,O
or,O
Dover,I-BUSINESS
stock,O
.,O
,O
Historically,O
",",O
Dover,I-BUSINESS
has,O
only,O
contributed,O
cash,O
to,O
the,O
Plan,O
",",O
which,O
is,O
then,O
used,O
to,O
purchase,O
the,O
Dover,I-BUSINESS
stock,O
credited,O
to,O
the,O
participants,O
’,O
accounts,O
.,O
,O
A,O
participating,O
Employer,O
also,O
may,O
elect,O
to,O
make,O
profit,O
sharing,O
contributions,O
for,O
a,O
Plan,O
year,O
with,O
respect,O
to,O
its,O
employees,O
who,O
have,O
satisfied,O
the,O
age,O
and,O
service,O
requirements,O
specified,O
by,O
such,O
Employer,O
.,O
,O
Such,O
contributions,O
are,O
allocated,O
in,O
proportion,O
to,O
the,O
compensation,O
of,O
participants,O
who,O
are,O
employed,O
by,O
that,O
employer,O
and,O
are,O
employees,O
on,O
the,O
last,O
day,O
of,O
the,O
Plan,O
year,O
whether,O
or,O
not,O
they,O
have,O
deferred,O
any,O
of,O
their,O
compensation,O
into,O
the,O
Plan,O
.,O
,O
Profit,O
sharing,O
contributions,O
are,O
invested,O
consistent,O
with,O
each,O
participant,O
’,O
s,O
investment,O
fund,O
elections,O
.,O
,O
Beginning,O
in,O
April,O
2009,O
",",O
due,O
to,O
the,O
protracted,O
downturn,O
in,O
the,O
economy,O
",",O
a,O
number,O
of,O
participating,O
employers,O
elected,O
to,O
temporarily,O
suspend,O
their,O
contributions,O
to,O
the,O
Plan,O
.,O
,O
As,O
of,O
January,O
2011,O
",",O
all,O
of,O
the,O
employers,O
that,O
suspended,O
matching,O
contributions,O
have,O
reinstated,O
them,O
.,O
,O
Participants,O
are,O
fully,O
vested,O
immediately,O
with,O
respect,O
to,O
their,O
own,O
contributions,O
.,O
,O
Employer,O
Matching,O
Contributions,O
for,O
all,O
participants,O
",",O
plus,O
earnings,O
thereon,O
",",O
generally,O
vest,O
after,O
the,O
participant,O
completes,O
one,O
year,O
of,O
service,O
.,O
,O
Generally,O
",",O
in,O
any,O
Plan,O
year,O
in,O
which,O
a,O
participant,O
does,O
not,O
receive,O
the,O
maximum,O
Employer,O
Matching,O
Contribution,O
to,O
which,O
he,O
or,O
she,O
is,O
entitled,O
(,O
due,O
to,O
periodic,O
payroll-based,O
limitations,O
),O
",",O
the,O
Employer,O
will,O
make,O
a,O
“,O
true-up,O
”,O
contribution,O
(,O
year-end,O
reconciling,O
Employer,O
Matching,O
Contribution,O
),O
.,O
,O
To,O
be,O
entitled,O
to,O
a,O
true-up,O
contribution,O
",",O
a,O
participant,O
must,O
either,O
be,O
an,O
active,O
employee,O
as,O
of,O
December,O
31,O
of,O
the,O
Plan,O
year,O
or,O
his,O
or,O
her,O
employment,O
must,O
have,O
terminated,O
during,O
the,O
Plan,O
year,O
due,O
to,O
death,O
",",O
permanent,O
disability,O
or,O
retirement,O
.,O
,O
Except,O
for,O
those,O
employers,O
whose,O
employees,O
’,O
profit-sharing,O
contribution,O
accounts,O
are,O
immediately,O
vested,O
",",O
a,O
participant,O
’,O
s,O
profit-sharing,O
account,O
generally,O
becomes,O
fully,O
vested,O
after,O
five,O
years,O
of,O
service,O
(,O
or,O
at,O
a,O
rate,O
of,O
20,O
%,O
per,O
year,O
),O
.,O
,O
A,O
participant,O
’,O
s,O
matching,O
contribution,O
and,O
profit-sharing,O
account,O
may,O
also,O
become,O
fully,O
vested,O
upon,O
the,O
participant,O
’,O
s,O
attainment,O
of,O
age,O
65,O
while,O
he,O
or,O
she,O
is,O
a,O
Dover,I-BUSINESS
employee,O
",",O
in,O
the,O
event,O
of,O
his,O
or,O
her,O
death,O
or,O
permanent,O
disability,O
while,O
a,O
Dover,I-BUSINESS
employee,O
",",O
or,O
if,O
the,O
Plan,O
is,O
terminated,O
.,O
,O
A,O
participant,O
’,O
s,O
vested,O
account,O
balance,O
in,O
the,O
Plan,O
is,O
distributable,O
following,O
the,O
participant,O
’,O
s,O
retirement,O
",",O
death,O
or,O
other,O
termination,O
of,O
employment,O
.,O
,O
Unvested,O
amounts,O
are,O
forfeited,O
and,O
used,O
to,O
reduce,O
future,O
employer,O
contributions,O
.,O
,O
At,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
accumulated,O
forfeited,O
unvested,O
amounts,O
totaled,O
$,O
"1,200",O
and,O
$,O
"1,583",O
",",O
respectively,O
.,O
,O
During,O
2010,O
",",O
$,O
"1,002",O
of,O
forfeitures,O
in,O
the,O
Plan,O
were,O
used,O
to,O
offset,O
current,O
year,O
employer,O
contributions,O
.,O
,O
Hardship,O
withdrawals,O
are,O
permitted,O
for,O
any,O
participants,O
who,O
are,O
active,O
employees,O
and,O
demonstrate,O
a,O
financial,O
hardship,O
which,O
meets,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
regulations,O
to,O
be,O
considered,O
an,O
“,O
immediate,O
and,O
heavy,O
financial,O
need.,O
”,O
The,O
hardship,O
withdrawal,O
amount,O
is,O
limited,O
to,O
the,O
amount,O
“,O
necessary,O
”,O
to,O
satisfy,O
the,O
financial,O
need,O
",",O
plus,O
income,O
taxes,O
that,O
the,O
participant,O
is,O
expected,O
to,O
incur,O
on,O
the,O
amount,O
of,O
the,O
withdrawal,O
.,O
,O
Distributions,O
from,O
the,O
Plan,O
are,O
generally,O
made,O
in,O
the,O
form,O
of,O
single,O
lump,O
sum,O
payments,O
",",O
although,O
the,O
Plan,O
allows,O
installment,O
distribution,O
payments,O
in,O
the,O
case,O
of,O
fully,O
vested,O
terminated,O
participants,O
who,O
have,O
reached,O
age,O
55,O
.,O
,O
For,O
distributions,O
that,O
include,O
company,O
stock,O
",",O
the,O
participant,O
may,O
elect,O
to,O
receive,O
whole,O
shares,O
of,O
company,O
stock,O
“,O
in-kind,O
”,O
and,O
the,O
remaining,O
fractional,O
share,O
in,O
cash,O
.,O
,O
A,O
participant,O
is,O
entitled,O
to,O
100,O
%,O
of,O
his,O
or,O
her,O
account,O
balance,O
upon,O
retirement,O
at,O
or,O
after,O
age,O
65,O
",",O
death,O
or,O
disability,O
.,O
,O
A,O
participant,O
may,O
borrow,O
from,O
his,O
or,O
her,O
vested,O
interest,O
in,O
the,O
Plan,O
",",O
subject,O
to,O
applicable,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
regulations,O
and,O
certain,O
restrictions,O
imposed,O
by,O
the,O
Plan,O
.,O
,O
The,O
notes,O
receivable,O
are,O
secured,O
by,O
the,O
balances,O
in,O
the,O
participant,O
’,O
s,O
accounts,O
.,O
,O
Each,O
note,O
receivable,O
carries,O
a,O
reasonable,O
rate,O
of,O
interest,O
determined,O
by,O
the,O
Plan,O
Administrator,O
to,O
be,O
commensurate,O
with,O
the,O
prevailing,O
interest,O
rate,O
charged,O
on,O
similar,O
commercial,O
loans,O
made,O
within,O
the,O
same,O
locale,O
and,O
time,O
period,O
.,O
,O
Notes,O
receivable,O
outstanding,O
as,O
of,O
December,O
31,O
",",O
2010,O
bear,O
interest,O
at,O
rates,O
between,O
3.25,O
%,O
and,O
10.25,O
%,O
.,O
,O
A,O
participant,O
may,O
have,O
up,O
to,O
two,O
outstanding,O
notes,O
receivable,O
at,O
one,O
time,O
.,O
,O
Subject,O
to,O
the,O
Plan,O
’,O
s,O
excessive,O
trading,O
restrictions,O
",",O
each,O
participant,O
has,O
the,O
right,O
to,O
direct,O
the,O
entire,O
amount,O
of,O
his,O
or,O
her,O
Plan,O
account,O
to,O
be,O
invested,O
in,O
one,O
or,O
more,O
of,O
the,O
available,O
investment,O
funds,O
in,O
multiples,O
of,O
one,O
percent,O
.,O
,O
Each,O
participant,O
has,O
the,O
right,O
during,O
any,O
business,O
day,O
to,O
transfer,O
all,O
or,O
any,O
portion,O
of,O
the,O
amount,O
in,O
his,O
or,O
her,O
account,O
among,O
the,O
investment,O
funds,O
",",O
except,O
that,O
participants,O
who,O
are,O
considered,O
Dover,I-BUSINESS
“,O
insiders,O
”,O
may,O
complete,O
transfers,O
involving,O
Dover,I-BUSINESS
stock,O
only,O
during,O
designated,O
window,O
periods,O
.,O
,O
Each,O
participant,O
has,O
the,O
right,O
to,O
roll,O
over,O
into,O
the,O
Plan,O
certain,O
distributions,O
from,O
other,O
tax-qualified,O
plans,O
or,O
appropriate,O
individual,O
retirement,O
accounts,O
.,O
,O
Participants,O
are,O
entitled,O
to,O
vote,O
with,O
respect,O
to,O
any,O
Dover,I-BUSINESS
shares,O
in,O
their,O
account,O
in,O
the,O
Plan,O
in,O
the,O
same,O
manner,O
as,O
other,O
Dover,I-BUSINESS
stockholders,O
.,O
,O
Certain,O
administrative,O
expenses,O
of,O
the,O
Plan,O
related,O
to,O
the,O
Trustee,O
",",O
recordkeeping,O
",",O
legal,O
and,O
audit,O
fees,O
are,O
paid,O
by,O
Dover,I-BUSINESS
.,O
,O
Fees,O
or,O
commissions,O
associated,O
with,O
each,O
of,O
the,O
investment,O
options,O
and,O
certain,O
administrative,O
expenses,O
of,O
the,O
Plan,O
are,O
paid,O
primarily,O
by,O
participants,O
as,O
a,O
deduction,O
from,O
the,O
amount,O
invested,O
or,O
as,O
an,O
offset,O
to,O
investment,O
earnings,O
.,O
,O
The,O
accompanying,O
financial,O
statements,O
were,O
prepared,O
on,O
the,O
accrual,O
basis,O
of,O
accounting,O
in,O
conformity,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
.,O
,O
In,O
September,O
2010,O
",",O
the,O
Financial,I-BUSINESS
Accounting,I-BUSINESS
Standards,I-BUSINESS
Board,I-BUSINESS
(,O
“,O
FASB,I-BUSINESS
”,O
),O
issued,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Update,I-LEGISLATION/ACT
(,O
“,O
ASU,I-LEGISLATION/ACT
”,O
),O
2010-25,O
",",O
Reporting,I-MISCELLANEOUS
Loans,I-MISCELLANEOUS
to,I-MISCELLANEOUS
Participants,I-MISCELLANEOUS
by,I-MISCELLANEOUS
Defined,I-MISCELLANEOUS
Contribution,I-MISCELLANEOUS
Pension,I-MISCELLANEOUS
Plans,I-MISCELLANEOUS
.,O
,O
The,O
ASU,I-LEGISLATION/ACT
requires,O
that,O
loans,O
should,O
be,O
classified,O
as,O
notes,O
receivable,O
from,O
participants,O
and,O
measured,O
at,O
their,O
unpaid,O
principal,O
balance,O
",",O
plus,O
any,O
accrued,O
but,O
unpaid,O
interest,O
.,O
,O
Previously,O
",",O
participant,O
loans,O
were,O
classified,O
as,O
investments,O
that,O
are,O
recognized,O
at,O
fair,O
value,O
in,O
accordance,O
with,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Codification,I-LEGISLATION/ACT
(,O
“,O
ASC,I-LEGISLATION/ACT
”,O
),O
962-325,O
.,O
,O
This,O
guidance,O
is,O
effective,O
for,O
reporting,O
periods,O
ending,O
after,O
December,O
15,O
",",O
2010,O
and,O
is,O
to,O
be,O
applied,O
retrospectively,O
to,O
all,O
periods,O
presented,O
comparatively,O
.,O
,O
The,O
adoption,O
of,O
this,O
guidance,O
by,O
the,O
Plan,O
resulted,O
in,O
the,O
reclassification,O
from,O
investments,O
to,O
notes,O
receivable,O
from,O
participants,O
of,O
$,O
"27,478",O
on,O
the,O
Statement,O
of,O
Net,O
Assets,O
Available,O
for,O
Benefits,O
as,O
of,O
December,O
31,O
",",O
2009,O
.,O
,O
The,O
adoption,O
had,O
no,O
effect,O
on,O
the,O
Plan,O
’,O
s,O
net,O
assets,O
available,O
for,O
benefits,O
.,O
,O
The,O
Plan,O
’,O
s,O
investments,O
are,O
reported,O
at,O
fair,O
value,O
(,O
see,O
Note,O
4,O
),O
.,O
,O
Investments,O
in,O
common,O
shares,O
of,O
Dover,I-BUSINESS
are,O
valued,O
at,O
the,O
closing,O
market,O
price,O
on,O
the,O
last,O
business,O
day,O
of,O
the,O
Plan,O
year,O
based,O
on,O
quotations,O
from,O
national,O
securities,O
exchanges,O
.,O
,O
The,O
fair,O
value,O
of,O
investments,O
in,O
registered,O
mutual,O
funds,O
are,O
obtained,O
from,O
quoted,O
prices,O
on,O
national,O
securities,O
exchanges,O
.,O
,O
The,O
fair,O
value,O
of,O
investments,O
in,O
collective,O
funds,O
and,O
pooled,O
separate,O
accounts,O
are,O
based,O
on,O
the,O
net,O
asset,O
values,O
as,O
of,O
the,O
last,O
business,O
day,O
of,O
the,O
Plan,O
year,O
as,O
determined,O
by,O
their,O
respective,O
investment,O
managers,O
and,O
recent,O
transaction,O
prices,O
.,O
,O
Purchases,O
and,O
sales,O
of,O
investment,O
securities,O
are,O
reflected,O
on,O
a,O
trade-date,O
basis,O
.,O
,O
Gains,O
and,O
losses,O
on,O
sales,O
of,O
investment,O
securities,O
are,O
determined,O
on,O
the,O
average,O
cost,O
method,O
.,O
,O
Funds,O
temporarily,O
awaiting,O
investment,O
are,O
placed,O
in,O
a,O
short-term,O
investment,O
fund,O
of,O
the,O
Trustee,O
where,O
they,O
earn,O
the,O
prevailing,O
market,O
rate,O
of,O
interest,O
.,O
,O
Dividend,O
income,O
is,O
recorded,O
on,O
the,O
ex-dividend,O
date,O
.,O
,O
Interest,O
income,O
from,O
other,O
investments,O
is,O
recorded,O
as,O
earned,O
.,O
,O
The,O
Plan,O
presents,O
in,O
the,O
Statement,O
of,O
Changes,O
in,O
Net,O
Assets,O
Available,O
for,O
Benefits,O
the,O
net,O
appreciation,O
or,O
depreciation,O
in,O
the,O
fair,O
value,O
of,O
its,O
investments,O
which,O
consists,O
of,O
the,O
realized,O
gains,O
or,O
losses,O
and,O
the,O
unrealized,O
appreciation,O
or,O
depreciation,O
on,O
those,O
investments,O
.,O
,O
Notes,O
receivable,O
from,O
participants,O
are,O
reported,O
at,O
their,O
unpaid,O
principal,O
balance,O
plus,O
any,O
accrued,O
but,O
unpaid,O
interest,O
with,O
no,O
allowance,O
for,O
credit,O
losses,O
",",O
as,O
repayments,O
of,O
principal,O
and,O
interest,O
are,O
received,O
through,O
payroll,O
deductions,O
and,O
the,O
notes,O
are,O
collateralized,O
by,O
the,O
participants,O
’,O
account,O
balances,O
.,O
,O
The,O
preparation,O
of,O
financial,O
statements,O
in,O
conformity,O
with,O
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
requires,O
management,O
to,O
make,O
estimates,O
and,O
assumptions,O
that,O
affect,O
the,O
reported,O
amounts,O
and,O
disclosures,O
of,O
assets,O
",",O
liabilities,O
and,O
changes,O
therein,O
",",O
and,O
disclosure,O
of,O
contingent,O
assets,O
and,O
liabilities,O
.,O
,O
Actual,O
results,O
could,O
differ,O
from,O
those,O
estimates,O
.,O
,O
Certain,O
amounts,O
in,O
the,O
prior,O
year,O
have,O
been,O
reclassified,O
to,O
conform,O
to,O
current,O
year,O
presentation,O
.,O
,O
The,O
Plan,O
provides,O
for,O
various,O
investment,O
options,O
in,O
any,O
combination,O
of,O
stocks,O
",",O
collective,O
trust,O
funds,O
",",O
mutual,O
funds,O
and,O
other,O
investment,O
securities,O
.,O
,O
Investment,O
securities,O
are,O
exposed,O
to,O
various,O
risks,O
",",O
including,O
",",O
but,O
not,O
limited,O
to,O
",",O
interest,O
rate,O
",",O
market,O
",",O
liquidity,O
and,O
credit,O
risks,O
.,O
,O
Due,O
to,O
the,O
level,O
of,O
risk,O
associated,O
with,O
certain,O
investment,O
securities,O
and,O
the,O
level,O
of,O
uncertainty,O
related,O
to,O
changes,O
in,O
the,O
value,O
of,O
investment,O
securities,O
",",O
it,O
is,O
at,O
least,O
reasonably,O
possible,O
that,O
changes,O
in,O
risks,O
in,O
the,O
near,O
term,O
could,O
materially,O
affect,O
participants,O
’,O
account,O
balances,O
and,O
the,O
amounts,O
reported,O
in,O
the,O
Statement,O
of,O
Net,O
Assets,O
Available,O
for,O
Benefits,O
and,O
Statement,O
of,O
Changes,O
in,O
Net,O
Assets,O
Available,O
for,O
Benefits,O
.,O
,O
At,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
approximately,O
22.61,O
%,O
and,O
20.99,O
%,O
",",O
respectively,O
",",O
of,O
the,O
Plan,O
’,O
s,O
assets,O
were,O
invested,O
in,O
Dover,I-BUSINESS
Corporation,I-BUSINESS
common,O
stock,O
.,O
,O
Distributions,O
to,O
participants,O
are,O
recorded,O
in,O
the,O
Plan,O
’,O
s,O
financial,O
statements,O
when,O
paid,O
.,O
,O
Refunds,O
of,O
excess,O
participant,O
deferral,O
contributions,O
and,O
forfeited,O
employer,O
matching,O
contributions,O
may,O
be,O
required,O
to,O
satisfy,O
the,O
relevant,O
nondiscrimination,O
provisions,O
of,O
the,O
Plan,O
.,O
,O
Such,O
refunds,O
are,O
accrued,O
as,O
a,O
liability,O
and,O
reduction,O
in,O
contributions,O
in,O
the,O
Plan,O
year,O
in,O
which,O
the,O
excess,O
deferrals,O
were,O
made,O
to,O
the,O
Plan,O
.,O
,O
Although,O
it,O
has,O
not,O
expressed,O
any,O
intent,O
to,O
do,O
so,O
",",O
Dover,I-BUSINESS
has,O
the,O
right,O
under,O
the,O
Plan,O
to,O
discontinue,O
all,O
contributions,O
at,O
any,O
time,O
and,O
to,O
terminate,O
the,O
Plan,O
",",O
subject,O
to,O
the,O
provisions,O
of,O
the,O
Plan,O
",",O
ERISA,I-LEGISLATION/ACT
and,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
.,O
,O
In,O
the,O
event,O
of,O
termination,O
",",O
participants,O
will,O
become,O
100,O
%,O
vested,O
in,O
their,O
Plan,O
accounts,O
.,O
,O
The,O
Plan,O
offered,O
the,O
following,O
investment,O
funds,O
during,O
2010,O
:,O
,O
The,I-BUSINESS
American,I-BUSINESS
Funds,I-BUSINESS
Growth,I-BUSINESS
Fund,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
(,O
R-4,O
),O
seeks,O
capital,O
growth,O
by,O
investing,O
primarily,O
in,O
common,O
stock,O
and,O
seeks,O
to,O
invest,O
in,O
companies,O
that,O
appear,O
to,O
offer,O
opportunities,O
for,O
capital,O
growth,O
",",O
some,O
of,O
which,O
are,O
based,O
outside,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
The,I-BUSINESS
Wells,I-BUSINESS
Fargo,I-BUSINESS
International,I-BUSINESS
Core,I-BUSINESS
Equity,I-BUSINESS
Fund,I-BUSINESS
(,O
N9,O
),O
seeks,O
to,O
achieve,O
consistent,O
",",O
long-term,O
value-added,O
performance,O
using,O
a,O
disciplined,O
approach,O
to,O
identifying,O
market,O
misvaluations,O
and,O
market,O
inefficiencies,O
that,O
represent,O
opportunities,O
.,O
,O
The,O
investment,O
strategy,O
uses,O
security,O
selection,O
rather,O
than,O
focusing,O
on,O
a,O
market,O
or,O
country,O
",",O
sector,O
etc,O
.,O
,O
The,O
fund,O
’,O
s,O
primary,O
underlying,O
assets,O
include,O
a,O
diversified,O
portfolio,O
of,O
equities,O
across,O
several,O
industries,O
such,O
as,O
financials,O
",",O
consumer,O
discretionary,O
",",O
industrials,O
",",O
materials,O
",",O
and,O
consumer,O
staples,O
.,O
,O
Units,O
of,O
participation,O
are,O
redeemable,O
on,O
a,O
daily,O
basis,O
corresponding,O
to,O
the,O
valuation,O
frequency,O
",",O
at,O
unit,O
values,O
determined,O
as,O
of,O
the,O
end,O
of,O
a,O
business,O
day,O
.,O
,O
The,O
fund,O
’,O
s,O
investments,O
are,O
valued,O
on,O
the,O
basis,O
of,O
market,O
valuations,O
",",O
where,O
available,O
",",O
as,O
provided,O
by,O
independent,O
pricing,O
services,O
.,O
,O
Securities,O
for,O
which,O
bid,O
quotations,O
are,O
not,O
readily,O
available,O
are,O
valued,O
at,O
fair,O
value,O
as,O
determined,O
by,O
the,O
fund,O
’,O
s,O
trustee,O
using,O
observable,O
market,O
data,O
.,O
,O
The,I-BUSINESS
Hartford,I-BUSINESS
Small,I-BUSINESS
Company,I-BUSINESS
HLS,I-BUSINESS
Fund,I-BUSINESS
(,O
IA,O
),O
seeks,O
growth,O
of,O
capital,O
by,O
investing,O
primarily,O
in,O
small,O
cap,O
equity,O
securities,O
selected,O
on,O
the,O
basis,O
of,O
potential,O
for,O
capital,O
appreciation,O
.,O
,O
The,I-BUSINESS
Northern,I-BUSINESS
Small,I-BUSINESS
Cap,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
seeks,O
long-term,O
capital,O
appreciation,O
by,O
investing,O
principally,O
in,O
equity,O
securities,O
of,O
small-capitalization,O
companies,O
with,O
market,O
capitalization,O
",",O
at,O
time,O
of,O
purchase,O
",",O
within,O
the,O
range,O
of,O
the,O
Russell,I-MISCELLANEOUS
2000,I-MISCELLANEOUS
Value,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
.,O
,O
The,I-BUSINESS
Dover,I-BUSINESS
Stock,I-BUSINESS
Fund,I-BUSINESS
invests,O
in,O
Dover,I-BUSINESS
common,O
stock,O
and,O
contains,O
a,O
nominal,O
balance,O
in,O
money,O
market,O
instruments,O
for,O
liquidity,O
purposes,O
.,O
,O
This,O
account,O
holds,O
shares,O
of,O
Dover,I-BUSINESS
common,O
stock,O
purchased,O
through,O
employee,O
and,O
employer,O
contributions,O
.,O
,O
The,O
Income,O
Fund,O
has,O
an,O
indirect,O
investment,O
in,O
the,O
RiverSource,I-BUSINESS
Trust,I-BUSINESS
Equity,I-BUSINESS
Index,I-BUSINESS
Base,I-BUSINESS
Fund,I-BUSINESS
.,O
,O
The,O
investment,O
objective,O
of,O
this,O
fund,O
is,O
to,O
preserve,O
principal,O
and,O
income,O
while,O
maximizing,O
current,O
income,O
.,O
,O
Units,O
of,O
participation,O
can,O
be,O
redeemed,O
on,O
any,O
business,O
day,O
at,O
the,O
daily,O
unit,O
value,O
.,O
,O
The,O
fund,O
’,O
s,O
investment,O
holdings,O
are,O
valued,O
at,O
the,O
redemption,O
value,O
of,O
the,O
underlying,O
fund,O
.,O
,O
The,O
fund,O
’,O
s,O
primary,O
underlying,O
assets,O
include,O
a,O
diversified,O
portfolio,O
of,O
common,O
stocks,O
across,O
several,O
industries,O
such,O
as,O
oil,O
",",O
gas,O
",",O
and,O
consumable,O
fuels,O
",",O
pharmaceuticals,O
",",O
computers,O
and,O
peripherals,O
",",O
diversified,O
financial,O
services,O
",",O
and,O
insurance,O
services,O
.,O
,O
The,I-BUSINESS
PIMCO,I-BUSINESS
Total,I-BUSINESS
Return,I-BUSINESS
Fund,I-BUSINESS
(,O
Administrative,O
Class,O
),O
invests,O
primarily,O
in,O
a,O
portfolio,O
of,O
intermediate,O
maturity,O
fixed,O
income,O
securities,O
",",O
with,O
investments,O
in,O
U.S.,I-GOVERNMENT
Treasury,I-GOVERNMENT
",",O
corporate,O
and,O
mortgage-backed,O
bonds,O
.,O
,O
The,O
fund,O
also,O
invests,O
in,O
U.S.,I-LOCATION
Dollar,O
and,O
non-U.S.,I-MISCELLANEOUS
Dollar,O
denominated,O
securities,O
of,O
non-U.S.,I-MISCELLANEOUS
issuers,O
and,O
money,O
market,O
instruments,O
.,O
,O
Units,O
of,O
participation,O
can,O
be,O
redeemed,O
on,O
any,O
business,O
day,O
at,O
the,O
daily,O
unit,O
net,O
asset,O
value,O
.,O
,O
The,I-BUSINESS
Columbia,I-BUSINESS
Balanced,I-BUSINESS
Fund,I-BUSINESS
(,O
R4,O
),O
invests,O
in,O
a,O
balanced,O
mix,O
of,O
U.S.,I-LOCATION
stocks,O
and,O
fixed,O
income,O
securities,O
.,O
,O
The,I-BUSINESS
Columbia,I-BUSINESS
Large,I-BUSINESS
Core,I-BUSINESS
Quantitative,I-BUSINESS
Fund,I-BUSINESS
(,O
R4,O
),O
seeks,O
long-term,O
capital,O
appreciation,O
.,O
,O
The,O
fund,O
typically,O
invests,O
80,O
%,O
of,O
assets,O
in,O
equity,O
securities,O
of,O
companies,O
listed,O
on,O
U.S.,I-LOCATION
exchanges,O
with,O
market,O
capitalizations,O
greater,O
than,O
$,O
5,O
billion,O
at,O
the,O
time,O
of,O
purchase,O
.,O
,O
The,I-BUSINESS
RiverSource,I-BUSINESS
Trust,I-BUSINESS
Equity,I-BUSINESS
Index,I-BUSINESS
Fund,I-BUSINESS
I,I-BUSINESS
(,O
CTF,O
),O
invests,O
primarily,O
in,O
the,O
RiverSource,I-BUSINESS
Trust,I-BUSINESS
Equity,I-BUSINESS
Index,I-BUSINESS
Base,I-BUSINESS
Fund,I-BUSINESS
and,O
seeks,O
to,O
achieve,O
the,O
rate,O
of,O
return,O
of,O
the,O
Standard,I-MISCELLANEOUS
&,I-MISCELLANEOUS
Poor,I-MISCELLANEOUS
’,I-MISCELLANEOUS
s,I-MISCELLANEOUS
500,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
.,O
,O
The,O
fund,O
invests,O
in,O
some,O
or,O
all,O
of,O
the,O
companies,O
upon,O
which,O
the,O
Standard,I-MISCELLANEOUS
&,I-MISCELLANEOUS
Poor,I-MISCELLANEOUS
’,I-MISCELLANEOUS
s,I-MISCELLANEOUS
500,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
is,O
based,O
.,O
,O
Units,O
of,O
participation,O
can,O
be,O
redeemed,O
on,O
any,O
business,O
day,O
at,O
the,O
daily,O
unit,O
value,O
.,O
,O
The,O
fund,O
’,O
s,O
holdings,O
are,O
valued,O
at,O
the,O
redemption,O
value,O
of,O
the,O
underlying,O
fund,O
.,O
,O
The,O
fund,O
’,O
s,O
primary,O
underlying,O
assets,O
include,O
a,O
diversified,O
portfolio,O
of,O
common,O
stocks,O
across,O
several,O
industries,O
such,O
as,O
oil,O
",",O
gas,O
",",O
and,O
consumable,O
fuels,O
",",O
pharmaceuticals,O
",",O
computers,O
and,O
peripherals,O
",",O
diversified,O
financial,O
services,O
",",O
and,O
insurance,O
services,O
.,O
,O
The,I-BUSINESS
Davis,I-BUSINESS
New,I-BUSINESS
York,I-BUSINESS
Venture,I-BUSINESS
Fund,I-BUSINESS
(,O
A,O
),O
seeks,O
long-term,O
capital,O
growth,O
.,O
,O
The,O
fund,O
invests,O
the,O
majority,O
of,O
its,O
assets,O
in,O
equity,O
securities,O
issued,O
by,O
large,O
companies,O
with,O
market,O
capitalizations,O
of,O
at,O
least,O
$,O
10,O
billion,O
.,O
,O
While,O
the,O
fund,O
invests,O
primarily,O
in,O
U.S.,I-LOCATION
companies,O
",",O
it,O
may,O
also,O
invest,O
in,O
foreign,O
companies,O
.,O
,O
The,I-BUSINESS
Neuberger,I-BUSINESS
Berman,I-BUSINESS
Genesis,I-BUSINESS
Fund,I-BUSINESS
(,O
Tr,O
),O
invests,O
primarily,O
in,O
undervalued,O
stocks,O
of,O
small-capitalization,O
companies,O
",",O
which,O
it,O
defines,O
as,O
those,O
companies,O
with,O
a,O
total,O
market,O
value,O
of,O
no,O
more,O
than,O
$,O
2,O
billion,O
as,O
measured,O
at,O
the,O
time,O
the,O
fund,O
first,O
invests,O
.,O
,O
The,I-BUSINESS
American,I-BUSINESS
Funds,I-BUSINESS
Capital,I-BUSINESS
World,I-BUSINESS
Growth,I-BUSINESS
and,I-BUSINESS
Income,I-BUSINESS
Fund,I-BUSINESS
seeks,O
to,O
provide,O
investors,O
with,O
long-term,O
growth,O
of,O
capital,O
while,O
providing,O
current,O
income,O
by,O
investing,O
primarily,O
in,O
common,O
stocks,O
and,O
bonds,O
of,O
well-established,O
companies,O
located,O
around,O
the,O
world,O
.,O
,O
The,I-BUSINESS
Manning,I-BUSINESS
&,I-BUSINESS
Napier,I-BUSINESS
Retirement,I-BUSINESS
Target,I-BUSINESS
CIT,I-BUSINESS
Funds,I-BUSINESS
(,O
2010,O
",",O
2020,O
",",O
2030,O
",",O
2040,O
&,O
Target,O
Income,O
),O
adjust,O
the,O
investment,O
allocation,O
from,O
a,O
more,O
aggressive,O
mix,O
at,O
younger,O
ages,O
to,O
an,O
increasingly,O
more,O
conservative,O
mix,O
at,O
older,O
ages,O
as,O
the,O
participant,O
approaches,O
his,O
or,O
her,O
retirement,O
date,O
.,O
,O
The,O
funds,O
invest,O
primarily,O
in,O
other,O
collective,O
investment,O
trusts,O
with,O
similar,O
investment,O
objectives,O
",",O
which,O
in,O
turn,O
invest,O
in,O
equity,O
securities,O
",",O
debt,O
and,O
fixed,O
income,O
securities,O
",",O
treasury,O
securities,O
",",O
and,O
mutual,O
funds,O
and,O
invests,O
at,O
varying,O
portfolio,O
allocations,O
as,O
appropriate,O
to,O
adjust,O
over,O
time,O
to,O
meet,O
the,O
changing,O
risk,O
and,O
return,O
objectives,O
of,O
investors,O
over,O
their,O
expected,O
investment,O
horizon,O
.,O
,O
Units,O
of,O
participation,O
can,O
be,O
redeemed,O
on,O
any,O
business,O
day,O
at,O
the,O
daily,O
unit,O
net,O
asset,O
value,O
.,O
,O
The,I-BUSINESS
Artisan,I-BUSINESS
Mid,I-BUSINESS
Cap,I-BUSINESS
Value,I-BUSINESS
Fund,I-BUSINESS
pursues,O
long-term,O
capital,O
growth,O
by,O
investing,O
in,O
undervalued,O
",",O
medium-sized,O
U.S.,I-LOCATION
companies,O
",",O
which,O
it,O
defines,O
as,O
those,O
companies,O
with,O
a,O
market,O
capitalization,O
greater,O
than,O
the,O
market,O
capitalization,O
of,O
the,O
smallest,O
company,O
in,O
the,O
Russell,I-MISCELLANEOUS
Midcap,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
and,O
less,O
than,O
three,O
times,O
the,O
weighted,O
average,O
market,O
capitalization,O
of,O
all,O
companies,O
in,O
that,O
index,O
.,O
,O
The,I-BUSINESS
Aberdeen,I-BUSINESS
Small,I-BUSINESS
Cap,I-BUSINESS
Institutional,I-BUSINESS
Fund,I-BUSINESS
seeks,O
long-term,O
capital,O
appreciation,O
by,O
investing,O
in,O
equity,O
securities,O
of,O
small-cap,O
companies,O
.,O
,O
This,O
fund,O
considers,O
small,O
cap,O
companies,O
to,O
be,O
those,O
that,O
have,O
market,O
capitalizations,O
similar,O
to,O
companies,O
included,O
in,O
the,O
Russell,I-MISCELLANEOUS
2000,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
at,O
the,O
time,O
of,O
investment,O
.,O
,O
The,O
fund,O
generally,O
will,O
not,O
consider,O
a,O
company,O
with,O
market,O
capitalization,O
in,O
excess,O
of,O
$,O
4.8,O
billion,O
as,O
of,O
January,O
31,O
",",O
2010,O
to,O
be,O
small,O
cap,O
.,O
,O
The,I-BUSINESS
Principal,I-BUSINESS
U.S.,I-BUSINESS
Property,I-BUSINESS
Separate,I-BUSINESS
Account,I-BUSINESS
invests,O
primarily,O
in,O
real,O
estate,O
holdings,O
.,O
,O
This,O
fund,O
is,O
subject,O
to,O
liquidity,O
restrictions,O
and,O
is,O
closed,O
to,O
future,O
participation,O
.,O
,O
The,O
fair,O
value,O
of,O
investments,O
that,O
individually,O
represent,O
5,O
%,O
or,O
more,O
of,O
the,O
Plan,O
’,O
s,O
net,O
assets,O
available,O
for,O
benefits,O
are,O
noted,O
in,O
the,O
following,O
table,O
:,O
,O
The,O
Plan,O
’,O
s,O
investments,O
(,O
including,O
gains,O
and,O
losses,O
on,O
investments,O
bought,O
and,O
sold,O
",",O
as,O
well,O
as,O
held,O
during,O
the,O
year,O
),O
appreciated,O
in,O
value,O
as,O
follows,O
:,O
,O
ASC,I-LEGISLATION/ACT
820,O
",",O
Fair,I-MISCELLANEOUS
Value,I-MISCELLANEOUS
Measurements,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Disclosures,I-MISCELLANEOUS
defines,O
fair,O
value,O
as,O
the,O
price,O
that,O
would,O
be,O
received,O
from,O
selling,O
an,O
asset,O
or,O
paid,O
to,O
transfer,O
a,O
liability,O
in,O
an,O
orderly,O
transaction,O
between,O
market,O
participants,O
at,O
the,O
measurement,O
date,O
.,O
,O
When,O
determining,O
the,O
fair,O
value,O
measurements,O
for,O
assets,O
and,O
liabilities,O
required,O
to,O
be,O
recorded,O
at,O
fair,O
value,O
",",O
the,O
Plan,O
considers,O
the,O
principal,O
or,O
most,O
advantageous,O
market,O
in,O
which,O
it,O
would,O
transact,O
and,O
considers,O
assumptions,O
that,O
market,O
participants,O
would,O
use,O
when,O
pricing,O
the,O
asset,O
or,O
liability,O
",",O
such,O
as,O
inherent,O
risk,O
",",O
transfer,O
restrictions,O
",",O
and,O
risk,O
of,O
nonperformance,O
.,O
,O
ASC,I-LEGISLATION/ACT
820,O
also,O
establishes,O
a,O
fair,O
value,O
hierarchy,O
that,O
requires,O
the,O
Plan,O
to,O
maximize,O
the,O
use,O
of,O
observable,O
inputs,O
and,O
minimize,O
the,O
use,O
of,O
unobservable,O
inputs,O
when,O
measuring,O
fair,O
value,O
.,O
,O
A,O
financial,O
instrument,O
’,O
s,O
categorization,O
within,O
the,O
fair,O
value,O
hierarchy,O
is,O
based,O
upon,O
the,O
lowest,O
level,O
of,O
input,O
that,O
is,O
significant,O
to,O
the,O
fair,O
value,O
measurement,O
.,O
,O
ASC,I-LEGISLATION/ACT
820,O
establishes,O
three,O
levels,O
of,O
inputs,O
that,O
may,O
be,O
used,O
to,O
measure,O
fair,O
value,O
:,O
,O
Level,O
1,O
:,O
quoted,O
prices,O
in,O
active,O
markets,O
for,O
identical,O
assets,O
or,O
liabilities,O
.,O
,O
Mutual,O
funds,O
and,O
Dover,I-BUSINESS
Stock,O
Fund,O
:,O
These,O
investments,O
are,O
public,O
investment,O
securities,O
valued,O
by,O
obtaining,O
quoted,O
prices,O
from,O
nationally,O
recognized,O
securities,O
exchanges,O
.,O
,O
Level,O
2,O
:,O
inputs,O
other,O
than,O
Level,O
1,O
that,O
are,O
observable,O
",",O
either,O
directly,O
or,O
indirectly,O
",",O
such,O
as,O
quoted,O
prices,O
in,O
active,O
markets,O
for,O
similar,O
assets,O
or,O
liabilities,O
",",O
quoted,O
prices,O
for,O
identical,O
or,O
similar,O
assets,O
or,O
liabilities,O
in,O
markets,O
that,O
are,O
not,O
active,O
",",O
or,O
other,O
inputs,O
that,O
are,O
observable,O
or,O
can,O
be,O
corroborated,O
by,O
observable,O
market,O
data,O
for,O
substantially,O
the,O
full,O
term,O
of,O
the,O
assets,O
or,O
liabilities,O
;,O
,O
Collective,O
funds,O
:,O
These,O
investments,O
are,O
public,O
investment,O
securities,O
valued,O
based,O
on,O
the,O
net,O
asset,O
values,O
as,O
of,O
the,O
last,O
business,O
day,O
of,O
the,O
Plan,O
year,O
as,O
determined,O
by,O
their,O
respective,O
investment,O
managers,O
.,O
,O
Level,O
3,O
:,O
unobservable,O
inputs,O
that,O
are,O
supported,O
by,O
little,O
or,O
no,O
market,O
activity,O
and,O
that,O
are,O
significant,O
to,O
the,O
fair,O
value,O
of,O
the,O
assets,O
or,O
liabilities,O
or,O
significant,O
unobservable,O
inputs,O
that,O
reflect,O
the,O
Plan,O
’,O
s,O
own,O
assumptions,O
about,O
the,O
assumptions,O
that,O
market,O
participants,O
would,O
use,O
in,O
pricing,O
an,O
asset,O
or,O
liability,O
.,O
,O
Property,O
Separate,O
Account,O
:,O
This,O
is,O
a,O
separate,O
account,O
investing,O
primarily,O
in,O
real,O
estate,O
holdings,O
",",O
which,O
are,O
valued,O
annually,O
by,O
independent,O
appraisers,O
giving,O
consideration,O
to,O
income,O
",",O
cost,O
and,O
sales,O
comparison,O
approaches,O
for,O
valuing,O
real,O
estate,O
.,O
,O
Values,O
are,O
updated,O
daily,O
based,O
on,O
changes,O
in,O
market,O
rates,O
and,O
conditions,O
.,O
,O
Below,O
are,O
the,O
Plan,O
’,O
s,O
financial,O
instruments,O
carried,O
at,O
fair,O
value,O
on,O
a,O
recurring,O
basis,O
by,O
their,O
ASC,I-LEGISLATION/ACT
820,O
fair,O
value,O
hierarchy,O
level,O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
:,O
,O
There,O
were,O
no,O
significant,O
transfers,O
between,O
Level,O
1,O
and,O
Level,O
2,O
investments,O
during,O
2010,O
.,O
,O
The,O
table,O
below,O
sets,O
forth,O
a,O
summary,O
of,O
changes,O
in,O
the,O
fair,O
value,O
of,O
the,O
Plan,O
’,O
s,O
level,O
3,O
investment,O
assets,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
:,O
,O
Certain,O
Plan,O
assets,O
are,O
invested,O
in,O
common,O
stock,O
of,O
Dover,I-BUSINESS
Corporation,I-BUSINESS
.,O
,O
Dover,I-BUSINESS
",",O
as,O
the,O
Plan,O
sponsor,O
",",O
is,O
also,O
a,O
related,O
party,O
in,O
accordance,O
with,O
Section,O
3.14,O
of,O
ERISA,I-LEGISLATION/ACT
.,O
,O
Certain,O
Plan,O
investments,O
are,O
shares,O
of,O
mutual,O
or,O
collective,O
funds,O
managed,O
by,O
the,O
Trustee,O
or,O
companies,O
owned,O
by,O
the,O
Trustee,O
as,O
defined,O
by,O
the,O
Plan,O
and,O
",",O
therefore,O
",",O
these,O
transactions,O
qualify,O
as,O
party-in-interest,O
transactions,O
.,O
,O
Notes,O
receivable,O
from,O
participants,O
held,O
by,O
the,O
Plan,O
are,O
also,O
considered,O
party-in-interest,O
transactions,O
.,O
,O
At,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
the,O
Plan,O
held,O
"3,642",O
and,O
"3,723",O
shares,O
of,O
employer,O
stock,O
",",O
respectively,O
.,O
,O
Dividends,O
were,O
paid,O
on,O
these,O
shares,O
in,O
the,O
amount,O
of,O
$,O
"3,952",O
during,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
These,O
transactions,O
also,O
qualify,O
as,O
party-in-interest,O
transactions,O
.,O
,O
Dover,I-BUSINESS
has,O
previously,O
received,O
a,O
determination,O
letter,O
dated,O
July,O
29,O
",",O
2004,O
from,O
the,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
stating,O
that,O
the,O
Plan,O
",",O
as,O
then,O
designed,O
",",O
was,O
in,O
compliance,O
with,O
the,O
provisions,O
of,O
Section,O
401,O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
",",O
and,O
that,O
its,O
related,O
trust,O
is,O
exempt,O
from,O
Federal,I-GOVERNMENT
income,O
taxes,O
.,O
,O
On,O
February,O
2,O
",",O
2009,O
",",O
the,O
Plan,O
was,O
submitted,O
to,O
the,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
for,O
a,O
new,O
determination,O
letter,O
that,O
covers,O
numerous,O
amendments,O
since,O
receiving,O
the,O
2004,O
determination,O
letter,O
.,O
,O
Dover,I-BUSINESS
believes,O
that,O
the,O
Plan,O
is,O
designed,O
and,O
currently,O
being,O
operated,O
in,O
compliance,O
with,O
the,O
applicable,O
provisions,O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
.,O
,O
On,O
January,O
1,O
",",O
2010,O
",",O
assets,O
amounting,O
to,O
$,O
"14,394",O
were,O
transferred,O
into,O
the,O
Plan,O
from,O
the,O
Marathon,I-MISCELLANEOUS
Equipment,I-MISCELLANEOUS
Company,I-MISCELLANEOUS
Retirement,I-MISCELLANEOUS
Accumulation,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
.,O
,O
Marathon,I-BUSINESS
Equipment,I-BUSINESS
Company,I-BUSINESS
began,O
participating,O
in,O
the,O
Plan,O
effective,O
January,O
1,O
",",O
2010,O
.,O
,O
On,O
April,O
1,O
",",O
2010,O
",",O
assets,O
amounting,O
to,O
$,O
"16,347",O
were,O
transferred,O
into,O
the,O
Plan,O
from,O
the,O
Datamax,I-MISCELLANEOUS
Corporation,I-MISCELLANEOUS
Code,I-MISCELLANEOUS
Section,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Profit,I-MISCELLANEOUS
Sharing,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Trust,I-MISCELLANEOUS
and,O
assets,O
amounting,O
to,O
$,O
"3,438",O
were,O
transferred,O
into,O
the,O
Plan,O
from,O
the,O
O,I-BUSINESS
’,I-BUSINESS
Neil,I-BUSINESS
Product,I-BUSINESS
Development,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
Datamax-O,I-BUSINESS
’,I-BUSINESS
Neil,I-BUSINESS
Corporation,I-BUSINESS
began,O
participating,O
in,O
the,O
Plan,O
effective,O
April,O
1,O
",",O
2010,O
.,O
,O
On,O
April,O
30,O
",",O
2010,O
",",O
assets,O
amounting,O
to,O
$,O
"4,943",O
were,O
transferred,O
out,O
of,O
the,O
Plan,O
(,O
as,O
a,O
trust-to-trust,O
transfer,O
of,O
assets,O
),O
into,O
the,O
Triton,I-MISCELLANEOUS
Systems,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Delaware,I-MISCELLANEOUS
",",I-MISCELLANEOUS
LLC,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Retirement,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
set,O
up,O
for,O
Triton,I-BUSINESS
participants,O
who,O
were,O
part,O
of,O
the,O
2010,O
sale,O
of,O
Triton,I-BUSINESS
Systems,I-BUSINESS
of,I-BUSINESS
Delaware,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
On,O
May,O
10,O
",",O
2010,O
",",O
assets,O
amounting,O
to,O
$,O
"30,195",O
were,O
transferred,O
into,O
the,O
Plan,O
from,O
the,O
Knowles,I-MISCELLANEOUS
Electronics,I-MISCELLANEOUS
",",I-MISCELLANEOUS
LLC,I-MISCELLANEOUS
Retirement,I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
for,O
the,O
Knowles,I-BUSINESS
Family,I-BUSINESS
of,I-BUSINESS
Companies,I-BUSINESS
.,O
,O
Knowles,I-BUSINESS
Electronics,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
began,O
participating,O
in,O
the,O
Plan,O
effective,O
December,O
27,O
",",O
2009,O
.,O
,O
In,O
connection,O
with,O
this,O
merger,O
",",O
the,O
Plan,O
added,O
to,O
its,O
investment,O
offerings,O
the,O
Artisan,I-BUSINESS
Mid,I-BUSINESS
Cap,I-BUSINESS
Value,I-BUSINESS
Investor,I-BUSINESS
Fund,I-BUSINESS
",",O
which,O
seeks,O
maximum,O
long-term,O
capital,O
growth,O
by,O
investing,O
primarily,O
in,O
undervalued,O
",",O
medium-sized,O
U.S.,I-LOCATION
.,O
,O
On,O
July,O
1,O
",",O
2010,O
",",O
assets,O
amounting,O
to,O
$,O
520,O
were,O
transferred,O
into,O
the,O
Plan,O
from,O
the,O
Multitest,I-MISCELLANEOUS
401,I-MISCELLANEOUS
(,I-MISCELLANEOUS
k,I-MISCELLANEOUS
),I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
.,O
,O
Multitest,I-BUSINESS
Electronic,I-BUSINESS
Systems,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
began,O
participating,O
in,O
the,O
Plan,O
effective,O
July,O
1,O
",",O
2010,O
.,O
,O
An,O
additional,O
$,O
720,O
of,O
notes,O
receivable,O
from,O
participants,O
was,O
transferred,O
into,O
the,O
Plan,O
during,O
the,O
year,O
for,O
certain,O
operating,O
companies,O
that,O
began,O
participating,O
in,O
the,O
Dover,I-MISCELLANEOUS
Retirement,I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
prior,O
to,O
2010,O
.,O
,O
As,O
reported,O
on,O
the,O
supplemental,O
schedule,O
of,O
delinquent,O
participant,O
contributions,O
",",O
certain,O
Plan,O
contributions,O
were,O
not,O
remitted,O
to,O
the,O
Plan,O
within,O
the,O
time,O
frame,O
specified,O
by,O
29,O
CFR,I-LEGISLATION/ACT
2510-3-102,O
of,O
the,O
Department,I-GOVERNMENT
of,I-GOVERNMENT
Labor,I-GOVERNMENT
’,O
s,O
Rules,O
and,O
Regulations,O
for,O
reporting,O
under,O
ERISA,I-LEGISLATION/ACT
",",O
thus,O
constituting,O
nonexempt,O
transactions,O
between,O
the,O
Plan,O
and,O
Dover,I-BUSINESS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
Jay,I-PERSON
L.,I-PERSON
Kloosterboer,I-PERSON
",",O
Senior,O
Vice,O
President,O
",",O
Human,O
Resources,O
and,O
Member,O
of,O
the,O
Benefits,O
Committee,O
(,O
Plan,O
Administrator,O
),O
,O
23.2,O
Consent,O
of,O
J.H,O
.,O
,O
We,O
consent,O
to,O
the,O
incorporation,O
by,O
reference,O
in,O
the,O
Registration,O
Statement,O
No.,O
333-01419,O
on,O
Form,I-MISCELLANEOUS
S-8,I-MISCELLANEOUS
of,O
Dover,I-BUSINESS
Corporation,I-BUSINESS
of,O
our,O
report,O
dated,O
June,O
24,O
",",O
2011,O
appearing,O
in,O
this,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
11-K,I-MISCELLANEOUS
of,O
Dover,I-MISCELLANEOUS
Corporation,I-MISCELLANEOUS
Retirement,I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
We,O
hereby,O
consent,O
to,O
the,O
incorporation,O
by,O
reference,O
in,O
the,O
Registration,O
Statement,O
of,O
Dover,I-BUSINESS
Corporation,I-BUSINESS
on,O
Form,I-MISCELLANEOUS
S-8,I-MISCELLANEOUS
(,O
File,O
No.,O
333-01419,O
),O
of,O
our,O
report,O
dated,O
June,O
29,O
",",O
2010,O
on,O
the,O
statement,O
of,O
net,O
assets,O
available,O
for,O
benefits,O
as,O
of,O
December,O
31,O
",",O
2009,O
of,O
Dover,I-MISCELLANEOUS
Corporation,I-MISCELLANEOUS
Retirement,I-MISCELLANEOUS
Savings,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
",",O
which,O
appears,O
in,O
this,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
11-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
-DOCSTART-,O
,O
If,O
the,O
securities,O
being,O
registered,O
on,O
this,O
form,O
are,O
being,O
offered,O
in,O
connection,O
with,O
the,O
formation,O
of,O
a,O
holding,O
company,O
and,O
there,O
is,O
compliance,O
with,O
General,O
Instruction,O
G,O
",",O
check,O
the,O
following,O
box,O
.,O
,O
If,O
this,O
Form,O
is,O
filed,O
to,O
register,O
additional,O
securities,O
for,O
an,O
offering,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
check,O
the,O
following,O
box,O
and,O
list,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
registration,O
statement,O
number,O
of,O
the,O
earlier,O
effective,O
registration,O
statement,O
for,O
the,O
same,O
offering,O
.,O
,O
If,O
this,O
Form,O
is,O
a,O
post-effective,O
amendment,O
filed,O
pursuant,O
to,O
Rule,O
462,O
(,O
d,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
check,O
the,O
following,O
box,O
and,O
list,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
registration,O
statement,O
number,O
of,O
the,O
earlier,O
effective,O
registration,O
statement,O
for,O
the,O
same,O
offering,O
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
large,O
accelerated,O
filer,O
",",O
an,O
accelerated,O
filer,O
",",O
a,O
non-accelerated,O
filer,O
",",O
or,O
a,O
smaller,O
reporting,O
company,O
.,O
,O
See,O
the,O
definitions,O
of,O
large,O
accelerated,O
filer,O
",",O
accelerated,O
filer,O
and,O
smaller,O
reporting,O
company,O
in,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
(,O
Do,O
not,O
check,O
if,O
a,O
smaller,O
reporting,O
company,O
),O
,O
The,O
Registrants,O
hereby,O
amend,O
this,O
registration,O
statement,O
on,O
such,O
date,O
or,O
dates,O
as,O
may,O
be,O
necessary,O
to,O
delay,O
its,O
effective,O
date,O
until,O
the,O
registrants,O
shall,O
file,O
a,O
further,O
amendment,O
which,O
specifically,O
states,O
that,O
this,O
registration,O
statement,O
shall,O
thereafter,O
become,O
effective,O
in,O
accordance,O
with,O
Section,O
8,O
(,O
a,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
or,O
until,O
the,O
registration,O
statement,O
shall,O
become,O
effective,O
on,O
such,O
date,O
as,O
the,O
SEC,I-BUSINESS
",",O
acting,O
pursuant,O
to,O
said,O
Section,O
8,O
(,O
a,O
),O
",",O
may,O
determine,O
.,O
,O
The,O
following,O
subsidiaries,O
of,O
Sonic,O
are,O
co-registrants,O
under,O
this,O
registration,O
statement,O
for,O
the,O
purpose,O
of,O
providing,O
guarantees,O
",",O
if,O
any,O
",",O
of,O
payments,O
on,O
debt,O
securities,O
registered,O
hereunder,O
:,O
,O
The,O
primary,O
standard,O
industrial,O
classification,O
of,O
all,O
of,O
the,O
additional,O
registrants,O
is,O
5511,O
.,O
,O
The,O
principal,O
executive,O
office,O
of,O
all,O
of,O
the,O
additional,O
registrants,O
is,O
6415,O
Idlewild,I-LOCATION
Road,I-LOCATION
",",O
Suite,O
109,O
",",O
Charlotte,I-LOCATION
",",O
North,I-LOCATION
Carolina,I-LOCATION
28212,O
.,O
,O
Both,O
acceptance,O
and,O
rejection,O
of,O
this,O
exchange,O
offer,O
involve,O
risks,O
.,O
,O
Some,O
of,O
the,O
risks,O
associated,O
with,O
the,O
exchange,O
offer,O
and,O
an,O
investment,O
in,O
the,O
Series,O
B,O
notes,O
offered,O
through,O
this,O
prospectus,O
are,O
described,O
under,O
the,O
caption,O
Risk,O
Factors,O
beginning,O
on,O
page,O
10,O
of,O
this,O
prospectus,O
and,O
in,O
our,O
filings,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
incorporated,O
by,O
reference,O
herein,O
.,O
,O
Neither,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
nor,O
any,O
state,O
securities,O
commission,O
has,O
approved,O
or,O
disapproved,O
of,O
the,O
notes,O
or,O
determined,O
if,O
this,O
prospectus,O
is,O
truthful,O
and,O
complete,O
.,O
,O
Any,O
representation,O
to,O
the,O
contrary,O
is,O
a,O
criminal,O
offense,O
.,O
,O
You,O
should,O
base,O
your,O
decision,O
whether,O
to,O
participate,O
in,O
the,O
exchange,O
offer,O
after,O
considering,O
all,O
of,O
the,O
information,O
contained,O
in,O
this,O
prospectus,O
and,O
the,O
information,O
incorporated,O
by,O
reference,O
herein,O
.,O
,O
In,O
making,O
your,O
investment,O
decision,O
",",O
we,O
have,O
not,O
authorized,O
any,O
other,O
person,O
to,O
provide,O
you,O
with,O
different,O
or,O
additional,O
information,O
.,O
,O
If,O
anyone,O
else,O
provides,O
you,O
with,O
different,O
or,O
additional,O
information,O
",",O
you,O
should,O
not,O
rely,O
on,O
it,O
.,O
,O
We,O
are,O
not,O
making,O
an,O
offer,O
to,O
sell,O
or,O
exchange,O
the,O
Series,O
B,O
notes,O
(,O
1,O
),O
in,O
any,O
jurisdiction,O
where,O
the,O
offer,O
or,O
sale,O
is,O
not,O
permitted,O
",",O
(,O
2,O
),O
where,O
the,O
person,O
making,O
the,O
offer,O
is,O
not,O
qualified,O
to,O
do,O
so,O
or,O
(,O
3,O
),O
to,O
any,O
person,O
who,O
can,O
not,O
legally,O
be,O
offered,O
the,O
Series,O
B,O
notes,O
.,O
,O
You,O
should,O
assume,O
that,O
the,O
information,O
appearing,O
in,O
this,O
prospectus,O
and,O
the,O
information,O
incorporated,O
by,O
reference,O
herein,O
is,O
accurate,O
only,O
as,O
of,O
their,O
respective,O
dates,O
.,O
,O
Our,O
business,O
",",O
financial,O
condition,O
",",O
results,O
of,O
operations,O
and,O
prospects,O
may,O
have,O
changed,O
since,O
those,O
dates,O
.,O
,O
Nothing,O
contained,O
in,O
or,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
is,O
",",O
or,O
shall,O
be,O
relied,O
upon,O
as,O
",",O
a,O
promise,O
or,O
representation,O
as,O
to,O
past,O
or,O
future,O
performance,O
.,O
,O
In,O
making,O
a,O
decision,O
whether,O
to,O
participate,O
in,O
the,O
exchange,O
offer,O
",",O
you,O
must,O
rely,O
on,O
your,O
own,O
examination,O
of,O
us,O
and,O
the,O
terms,O
of,O
the,O
exchange,O
offer,O
and,O
the,O
Series,O
B,O
notes,O
",",O
including,O
the,O
merits,O
and,O
risks,O
involved,O
.,O
,O
You,O
should,O
not,O
consider,O
any,O
information,O
in,O
or,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
to,O
be,O
legal,O
",",O
business,O
or,O
tax,O
advice,O
.,O
,O
You,O
should,O
consult,O
your,O
own,O
attorney,O
",",O
business,O
advisor,O
and,O
tax,O
advisor,O
for,O
legal,O
",",O
business,O
and,O
tax,O
advice,O
regarding,O
participation,O
in,O
the,O
exchange,O
offer,O
and,O
an,O
investment,O
in,O
the,O
Series,O
B,O
notes,O
.,O
,O
We,O
make,O
no,O
representation,O
or,O
warranty,O
",",O
express,O
or,O
implied,O
",",O
as,O
to,O
the,O
accuracy,O
or,O
completeness,O
of,O
the,O
information,O
obtained,O
from,O
third,O
party,O
sources,O
set,O
forth,O
herein,O
or,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
.,O
,O
No,O
automobile,O
manufacturer,O
or,O
distributor,O
has,O
been,O
involved,O
",",O
directly,O
or,O
indirectly,O
",",O
in,O
the,O
preparation,O
of,O
this,O
prospectus,O
or,O
in,O
the,O
offering,O
being,O
made,O
hereby,O
.,O
,O
No,O
automobile,O
manufacturer,O
or,O
distributor,O
has,O
been,O
authorized,O
to,O
make,O
any,O
statements,O
or,O
representations,O
in,O
connection,O
with,O
the,O
offering,O
",",O
and,O
no,O
automobile,O
manufacturer,O
or,O
distributor,O
has,O
any,O
responsibility,O
for,O
the,O
accuracy,O
or,O
completeness,O
of,O
this,O
prospectus,O
or,O
for,O
the,O
offering,O
hereunder,O
.,O
,O
This,O
offer,O
may,O
be,O
withdrawn,O
at,O
any,O
time,O
prior,O
to,O
the,O
closing,O
of,O
the,O
offering,O
",",O
and,O
the,O
offering,O
is,O
subject,O
to,O
the,O
terms,O
of,O
this,O
prospectus,O
.,O
,O
Laws,O
in,O
certain,O
jurisdictions,O
may,O
restrict,O
the,O
distribution,O
of,O
this,O
prospectus,O
and,O
the,O
offer,O
and,O
sale,O
or,O
exchange,O
of,O
the,O
Series,O
B,O
notes,O
.,O
,O
jurisdiction,O
in,O
which,O
you,O
purchase,O
",",O
offer,O
or,O
sell,O
the,O
Series,O
B,O
notes,O
and,O
must,O
obtain,O
any,O
consent,O
",",O
approval,O
or,O
permission,O
required,O
for,O
your,O
purchase,O
",",O
offer,O
or,O
sale,O
of,O
Series,O
B,O
notes,O
under,O
the,O
laws,O
and,O
regulations,O
in,O
force,O
in,O
any,O
jurisdiction,O
to,O
which,O
you,O
are,O
subject,O
or,O
in,O
which,O
you,O
make,O
such,O
purchases,O
",",O
offers,O
or,O
sales,O
",",O
and,O
we,O
shall,O
have,O
no,O
responsibility,O
therefor,O
.,O
,O
Except,O
as,O
otherwise,O
indicated,O
or,O
as,O
the,O
context,O
otherwise,O
requires,O
",",O
all,O
references,O
in,O
this,O
prospectus,O
to,O
the,O
Company,O
",",O
we,O
",",O
us,O
",",O
our,O
",",O
or,O
Sonic,I-BUSINESS
mean,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
its,O
subsidiaries,O
.,O
,O
We,O
obtained,O
the,O
industry,O
",",O
market,O
and,O
competitive,O
position,O
data,O
included,O
and,O
incorporated,O
by,O
reference,O
in,O
this,O
prospectus,O
from,O
our,O
own,O
internal,O
estimates,O
and,O
research,O
as,O
well,O
as,O
from,O
industry,O
publications,O
and,O
research,O
",",O
surveys,O
and,O
studies,O
conducted,O
by,O
third,O
parties,O
.,O
,O
Industry,O
publications,O
",",O
studies,O
and,O
surveys,O
generally,O
state,O
that,O
they,O
have,O
been,O
obtained,O
from,O
sources,O
believed,O
to,O
be,O
reliable,O
",",O
although,O
they,O
do,O
not,O
guarantee,O
the,O
accuracy,O
or,O
completeness,O
of,O
such,O
information,O
.,O
,O
While,O
we,O
believe,O
that,O
each,O
of,O
these,O
publications,O
",",O
studies,O
and,O
surveys,O
is,O
reliable,O
",",O
we,O
have,O
not,O
independently,O
verified,O
industry,O
",",O
market,O
and,O
competitive,O
position,O
data,O
from,O
third-party,O
sources,O
.,O
,O
While,O
we,O
believe,O
our,O
internal,O
business,O
research,O
is,O
reliable,O
and,O
the,O
market,O
definitions,O
are,O
appropriate,O
",",O
neither,O
such,O
research,O
nor,O
these,O
definitions,O
have,O
been,O
verified,O
by,O
any,O
independent,O
source,O
.,O
,O
Accordingly,O
",",O
investors,O
should,O
not,O
place,O
undue,O
weight,O
on,O
the,O
industry,O
and,O
market,O
share,O
data,O
presented,O
in,O
this,O
prospectus,O
.,O
,O
This,O
prospectus,O
contains,O
numerous,O
forward-looking,O
statements,O
within,O
the,O
meaning,O
of,O
Section,O
27A,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
Section,O
21E,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
.,O
,O
These,O
forward-looking,O
statements,O
address,O
our,O
future,O
objectives,O
",",O
plans,O
and,O
goals,O
",",O
as,O
well,O
as,O
our,O
intent,O
",",O
beliefs,O
and,O
current,O
expectations,O
regarding,O
future,O
operating,O
performance,O
",",O
and,O
can,O
generally,O
be,O
identified,O
by,O
words,O
such,O
as,O
may,O
",",O
will,O
",",O
should,O
",",O
believe,O
",",O
expect,O
",",O
anticipate,O
",",O
intend,O
",",O
plan,O
",",O
foresee,O
",",O
and,O
other,O
similar,O
words,O
or,O
phrases,O
.,O
,O
Specific,O
events,O
addressed,O
by,O
these,O
forward-looking,O
statements,O
include,O
",",O
but,O
are,O
not,O
limited,O
to,O
:,O
,O
These,O
forward-looking,O
statements,O
are,O
based,O
on,O
our,O
current,O
estimates,O
and,O
assumptions,O
and,O
involve,O
various,O
risks,O
and,O
uncertainties,O
.,O
,O
As,O
a,O
result,O
",",O
you,O
are,O
cautioned,O
that,O
these,O
forward-looking,O
statements,O
are,O
not,O
guarantees,O
of,O
future,O
performance,O
",",O
and,O
that,O
actual,O
results,O
could,O
differ,O
materially,O
from,O
those,O
projected,O
in,O
these,O
forward-looking,O
statements,O
.,O
,O
Factors,O
which,O
may,O
cause,O
actual,O
results,O
to,O
differ,O
materially,O
from,O
our,O
projections,O
include,O
those,O
risks,O
described,O
in,O
Risk,O
Factors,O
and,O
elsewhere,O
in,O
this,O
prospectus,O
and,O
our,O
filings,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
the,O
SEC,I-GOVERNMENT
),O
that,O
are,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
",",O
as,O
well,O
as,O
:,O
,O
This,O
summary,O
highlights,O
selected,O
information,O
included,O
in,O
or,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
.,O
,O
The,O
following,O
summary,O
does,O
not,O
contain,O
all,O
of,O
the,O
information,O
that,O
you,O
should,O
consider,O
before,O
deciding,O
whether,O
to,O
participate,O
in,O
the,O
exchange,O
offer,O
and,O
is,O
qualified,O
in,O
its,O
entirety,O
by,O
the,O
more,O
detailed,O
information,O
appearing,O
elsewhere,O
in,O
the,O
prospectus,O
and,O
the,O
financial,O
statements,O
and,O
the,O
documents,O
incorporated,O
by,O
reference,O
.,O
,O
You,O
should,O
carefully,O
read,O
the,O
entire,O
prospectus,O
",",O
including,O
the,O
Risk,O
Factors,O
section,O
beginning,O
on,O
page,O
10,O
",",O
before,O
deciding,O
whether,O
to,O
participate,O
in,O
the,O
exchange,O
offer,O
.,O
,O
See,O
Where,O
You,O
Can,O
Find,O
More,O
Information,O
About,O
Sonic,I-BUSINESS
.,O
,O
We,O
are,O
one,O
of,O
the,O
largest,O
automotive,O
retailers,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
As,O
of,O
January,O
31,O
",",O
2010,O
",",O
we,O
operated,O
145,O
dealership,O
franchises,O
at,O
122,O
dealership,O
locations,O
",",O
representing,O
29,O
different,O
brands,O
of,O
cars,O
and,O
light,O
trucks,O
",",O
and,O
26,O
collision,O
repair,O
centers,O
in,O
15,O
states,O
.,O
,O
Our,O
dealerships,O
provide,O
comprehensive,O
services,O
including,O
(,O
1,O
),O
sales,O
of,O
both,O
new,O
and,O
used,O
cars,O
and,O
light,O
trucks,O
",",O
(,O
2,O
),O
sales,O
of,O
replacement,O
parts,O
and,O
performance,O
of,O
vehicle,O
maintenance,O
",",O
warranty,O
",",O
paint,O
and,O
repair,O
services,O
and,O
(,O
3,O
),O
arrangement,O
of,O
extended,O
service,O
contracts,O
",",O
financing,O
and,O
insurance,O
and,O
other,O
aftermarket,O
products,O
for,O
our,O
automotive,O
customers,O
.,O
,O
Our,O
Class,O
A,O
common,O
stock,O
is,O
traded,O
on,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
under,O
the,O
symbol,O
SAH,I-BUSINESS
.,O
,O
We,O
were,O
incorporated,O
in,O
Delaware,I-LOCATION
in,O
1997,O
.,O
,O
In,O
January,O
and,O
February,O
2010,O
",",O
Toyota,I-BUSINESS
Motor,I-BUSINESS
Corporation,I-BUSINESS
issued,O
recalls,O
affecting,O
certain,O
of,O
its,O
most,O
popular,O
models,O
in,O
certain,O
model,O
years,O
due,O
to,O
design,O
problems,O
with,O
accelerator,O
pedals,O
and,O
anti-lock,O
brake,O
systems,O
.,O
,O
Toyota,I-BUSINESS
Motor,I-BUSINESS
Corporation,I-BUSINESS
had,O
also,O
instructed,O
its,O
dealerships,O
to,O
stop,O
selling,O
vehicles,O
affected,O
by,O
the,O
accelerator,O
pedal,O
recall,O
until,O
it,O
developed,O
a,O
solution,O
to,O
the,O
design,O
problem,O
and,O
provided,O
the,O
necessary,O
parts,O
and,O
instructions,O
to,O
fix,O
the,O
issue,O
.,O
,O
During,O
the,O
period,O
of,O
time,O
when,O
affected,O
vehicles,O
could,O
not,O
be,O
sold,O
",",O
Toyota,I-BUSINESS
Motor,I-BUSINESS
Corporation,I-BUSINESS
offered,O
its,O
dealers,O
floor,O
plan,O
assistance,O
to,O
help,O
reduce,O
dealers,O
cost,O
of,O
carrying,O
vehicles,O
which,O
it,O
could,O
not,O
sell,O
due,O
to,O
the,O
recall,O
.,O
,O
We,O
believe,O
the,O
effect,O
of,O
these,O
recalls,O
will,O
reduce,O
our,O
sales,O
of,O
Toyota,I-BUSINESS
vehicles,O
in,O
the,O
first,O
quarter,O
of,O
2010,O
",",O
but,O
will,O
also,O
increase,O
our,O
fixed,O
operations,O
business,O
in,O
the,O
future,O
for,O
work,O
performed,O
to,O
correct,O
the,O
issue,O
.,O
,O
We,O
can,O
not,O
estimate,O
how,O
this,O
recall,O
will,O
affect,O
consumer,O
preferences,O
over,O
the,O
long-term,O
.,O
,O
On,O
February,O
24,O
",",O
2010,O
",",O
General,I-BUSINESS
Motors,I-BUSINESS
announced,O
that,O
the,O
planned,O
sale,O
of,O
its,O
Hummer,I-MISCELLANEOUS
brand,O
to,O
Sichuan,I-BUSINESS
Tengzhong,I-BUSINESS
Heavy,I-BUSINESS
Industrial,I-BUSINESS
Machines,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
had,O
fallen,O
through,O
",",O
and,O
that,O
General,I-BUSINESS
Motors,I-BUSINESS
will,O
commence,O
the,O
wind,O
down,O
of,O
the,O
Hummer,I-MISCELLANEOUS
brand,O
.,O
,O
As,O
of,O
February,O
25,O
",",O
2010,O
",",O
we,O
operated,O
three,O
Hummer,I-MISCELLANEOUS
franchises,O
out,O
of,O
multi-franchise,O
facilities,O
.,O
,O
In,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
",",O
we,O
only,O
sold,O
approximately,O
110,O
Hummer,I-MISCELLANEOUS
new,O
vehicle,O
units,O
at,O
retail,O
.,O
,O
As,O
a,O
result,O
",",O
we,O
do,O
not,O
believe,O
that,O
the,O
pending,O
discontinuation,O
of,O
the,O
Hummer,I-MISCELLANEOUS
brand,O
will,O
be,O
material,O
to,O
our,O
operations,O
",",O
financial,O
position,O
or,O
cash,O
flows,O
.,O
,O
On,O
January,O
15,O
",",O
2010,O
",",O
we,O
entered,O
into,O
an,O
amended,O
and,O
restated,O
syndicated,O
secured,O
revolving,O
credit,O
facility,O
and,O
a,O
new,O
syndicated,O
floor,O
plan,O
facility,O
(,O
comprised,O
of,O
a,O
new,O
vehicle,O
floor,O
plan,O
sub-facility,O
and,O
a,O
used,O
vehicle,O
floor,O
plan,O
sub-facility,O
),O
to,O
finance,O
new,O
and,O
used,O
vehicles,O
(,O
the,O
2010,O
Credit,O
Facilities,O
),O
that,O
provide,O
us,O
a,O
total,O
of,O
up,O
to,O
$,O
521.0,O
million,O
in,O
combined,O
revolving,O
credit,O
and,O
floor,O
plan,O
financing,O
.,O
,O
Under,O
the,O
terms,O
of,O
these,O
facilities,O
",",O
up,O
to,O
$,O
321.0,O
million,O
is,O
available,O
under,O
the,O
new,O
vehicle,O
floor,O
plan,O
sub-facility,O
",",O
up,O
to,O
$,O
50.0,O
million,O
is,O
available,O
under,O
the,O
used,O
vehicle,O
floor,O
plan,O
sub-facility,O
and,O
up,O
to,O
$,O
150.0,O
million,O
is,O
available,O
for,O
working,O
capital,O
and,O
general,O
corporate,O
purposes,O
under,O
the,O
revolving,O
credit,O
facility,O
.,O
,O
The,O
2010,O
Credit,O
Facilities,O
mature,O
on,O
August,O
15,O
",",O
2012,O
.,O
,O
We,O
also,O
have,O
capacity,O
to,O
finance,O
new,O
and,O
used,O
vehicle,O
inventory,O
purchases,O
under,O
bilateral,O
floor,O
plan,O
agreements,O
with,O
various,O
manufacturer-affiliated,O
finance,O
companies,O
and,O
other,O
lending,O
institutions,O
.,O
,O
On,O
March,O
12,O
",",O
2010,O
",",O
we,O
issued,O
a,O
notice,O
to,O
redeem,O
$,O
200,O
million,O
of,O
our,O
outstanding,O
8,O
/,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2013,O
(,O
the,O
8.625,O
%,O
Notes,O
),O
with,O
the,O
net,O
proceeds,O
from,O
our,O
private,O
offering,O
of,O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2018,O
",",O
Series,O
A,O
",",O
and,O
cash,O
on,O
hand,O
.,O
,O
We,O
expect,O
to,O
complete,O
this,O
redemption,O
on,O
April,O
12,O
",",O
2010,O
.,O
,O
The,O
following,O
is,O
a,O
brief,O
summary,O
of,O
certain,O
terms,O
of,O
the,O
Series,O
B,O
notes,O
.,O
,O
Certain,O
of,O
the,O
terms,O
and,O
conditions,O
described,O
below,O
are,O
subject,O
to,O
important,O
limitations,O
and,O
exceptions,O
.,O
,O
For,O
a,O
more,O
complete,O
description,O
of,O
the,O
terms,O
of,O
the,O
Series,O
B,O
notes,O
",",O
see,O
Description,O
of,O
Notes,O
beginning,O
on,O
page,O
35,O
.,O
,O
The,O
summary,O
consolidated,O
income,O
statement,O
data,O
for,O
the,O
years,O
ended,O
December,O
31,O
",",O
2007,O
",",O
2008,O
and,O
2009,O
and,O
the,O
summary,O
consolidated,O
balance,O
sheet,O
data,O
as,O
of,O
December,O
31,O
",",O
2008,O
and,O
2009,O
are,O
derived,O
from,O
our,O
consolidated,O
financial,O
statements,O
",",O
which,O
are,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
from,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
.,O
,O
The,O
summary,O
consolidated,O
balance,O
sheet,O
data,O
as,O
of,O
December,O
31,O
",",O
2007,O
are,O
derived,O
from,O
our,O
consolidated,O
financial,O
statements,O
as,O
of,O
and,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2007,O
",",O
which,O
are,O
not,O
included,O
in,O
or,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
.,O
,O
This,O
summary,O
consolidated,O
financial,O
and,O
operating,O
data,O
should,O
be,O
read,O
in,O
conjunction,O
with,O
Management,O
s,O
Discussion,O
and,O
Analysis,O
of,O
Financial,O
Condition,O
and,O
Results,O
of,O
Operations,O
and,O
our,O
consolidated,O
financial,O
statements,O
and,O
the,O
related,O
notes,O
thereto,O
",",O
which,O
are,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
from,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
.,O
,O
We,O
have,O
accounted,O
for,O
all,O
of,O
our,O
dealership,O
acquisitions,O
using,O
the,O
purchase,O
method,O
of,O
accounting,O
and,O
",",O
as,O
a,O
result,O
",",O
we,O
do,O
not,O
include,O
in,O
our,O
consolidated,O
financial,O
statements,O
the,O
results,O
of,O
operations,O
of,O
acquired,O
dealerships,O
prior,O
to,O
the,O
date,O
they,O
were,O
acquired,O
.,O
,O
The,O
Summary,O
Consolidated,O
Financial,O
and,O
Operating,O
Data,O
discussed,O
below,O
reflects,O
the,O
results,O
of,O
operations,O
and,O
financial,O
position,O
of,O
each,O
of,O
the,O
dealerships,O
acquired,O
prior,O
to,O
December,O
31,O
",",O
2009,O
.,O
,O
As,O
a,O
result,O
of,O
the,O
effects,O
of,O
our,O
acquisitions,O
and,O
other,O
potential,O
factors,O
in,O
the,O
future,O
",",O
the,O
Summary,O
Consolidated,O
Financial,O
and,O
Operating,O
Data,O
set,O
forth,O
below,O
is,O
not,O
necessarily,O
indicative,O
of,O
our,O
results,O
of,O
operations,O
and,O
financial,O
position,O
in,O
the,O
future,O
or,O
the,O
results,O
of,O
operations,O
and,O
financial,O
position,O
that,O
would,O
have,O
resulted,O
had,O
such,O
acquisitions,O
occurred,O
at,O
the,O
beginning,O
of,O
the,O
periods,O
presented,O
below,O
.,O
,O
The,O
following,O
financial,O
data,O
for,O
all,O
periods,O
presented,O
reflects,O
Sonic,I-BUSINESS
s,O
December,O
31,O
",",O
2009,O
reclassification,O
of,O
franchises,O
between,O
continuing,O
operations,O
and,O
discontinued,O
operations,O
in,O
accordance,O
with,O
the,O
provisions,O
of,O
Presentation,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Financial,I-MISCELLANEOUS
Statements,I-MISCELLANEOUS
in,O
the,O
ASC,I-LEGISLATION/ACT
.,O
,O
This,O
section,O
describes,O
some,O
",",O
but,O
not,O
all,O
",",O
of,O
the,O
risks,O
of,O
participating,O
in,O
the,O
exchange,O
offer,O
and,O
an,O
investment,O
in,O
our,O
Series,O
B,O
notes,O
.,O
,O
Before,O
making,O
a,O
decision,O
as,O
to,O
whether,O
to,O
participate,O
in,O
the,O
exchange,O
offer,O
",",O
you,O
should,O
carefully,O
consider,O
the,O
risk,O
factors,O
described,O
below,O
",",O
the,O
risk,O
factors,O
included,O
in,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
",",O
which,O
are,O
incorporated,O
by,O
reference,O
herein,O
",",O
and,O
the,O
risks,O
described,O
in,O
our,O
other,O
filings,O
with,O
the,O
SEC,I-GOVERNMENT
that,O
are,O
incorporated,O
by,O
reference,O
herein,O
.,O
,O
Failure,O
to,O
exchange,O
your,O
Series,O
A,O
notes,O
may,O
have,O
adverse,O
consequences,O
to,O
you,O
.,O
,O
If,O
you,O
do,O
not,O
exchange,O
your,O
Series,O
A,O
notes,O
for,O
Series,O
B,O
notes,O
in,O
the,O
exchange,O
offer,O
",",O
your,O
Series,O
A,O
notes,O
will,O
continue,O
to,O
be,O
subject,O
to,O
the,O
restrictions,O
on,O
transfer,O
contained,O
in,O
the,O
legend,O
on,O
the,O
Series,O
A,O
notes,O
.,O
,O
In,O
general,O
",",O
the,O
Series,O
A,O
notes,O
may,O
not,O
be,O
offered,O
or,O
sold,O
unless,O
they,O
are,O
registered,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
However,O
",",O
you,O
may,O
offer,O
or,O
sell,O
your,O
Series,O
A,O
notes,O
under,O
an,O
exemption,O
from,O
",",O
or,O
in,O
a,O
transaction,O
not,O
subject,O
to,O
",",O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
applicable,O
state,O
securities,O
laws,O
.,O
,O
After,O
the,O
exchange,O
offer,O
is,O
completed,O
",",O
you,O
will,O
not,O
be,O
entitled,O
to,O
any,O
exchange,O
or,O
registration,O
rights,O
with,O
respect,O
to,O
your,O
Series,O
A,O
notes,O
except,O
under,O
limited,O
circumstances,O
.,O
,O
The,O
exchange,O
offer,O
for,O
the,O
Series,O
A,O
notes,O
is,O
not,O
conditioned,O
upon,O
the,O
tender,O
of,O
a,O
minimum,O
aggregate,O
principal,O
amount,O
of,O
Series,O
A,O
notes,O
.,O
,O
Issuance,O
of,O
the,O
Series,O
B,O
notes,O
in,O
exchange,O
for,O
the,O
Series,O
A,O
notes,O
pursuant,O
to,O
the,O
exchange,O
offer,O
will,O
be,O
made,O
following,O
the,O
prior,O
satisfaction,O
",",O
or,O
waiver,O
",",O
of,O
the,O
conditions,O
set,O
forth,O
in,O
The,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Offer—Conditions,I-LEGISLATION/ACT
and,O
only,O
after,O
timely,O
receipt,O
by,O
the,O
exchange,O
agent,O
of,O
Series,O
A,O
notes,O
",",O
a,O
properly,O
completed,O
and,O
duly,O
executed,O
letter,O
of,O
transmittal,O
and,O
all,O
other,O
required,O
documents,O
.,O
,O
Therefore,O
",",O
holders,O
of,O
Series,O
A,O
notes,O
desiring,O
to,O
tender,O
their,O
Series,O
A,O
notes,O
in,O
exchange,O
for,O
Series,O
B,O
notes,O
should,O
allow,O
sufficient,O
time,O
to,O
ensure,O
timely,O
delivery,O
of,O
all,O
required,O
documentation,O
.,O
,O
Neither,O
we,O
",",O
the,O
exchange,O
agent,O
",",O
nor,O
any,O
other,O
person,O
is,O
under,O
any,O
duty,O
to,O
give,O
notification,O
of,O
defects,O
or,O
irregularities,O
with,O
respect,O
to,O
the,O
tenders,O
of,O
Series,O
A,O
notes,O
for,O
exchange,O
.,O
,O
Series,O
A,O
notes,O
that,O
may,O
be,O
tendered,O
in,O
the,O
exchange,O
offer,O
but,O
which,O
are,O
not,O
validly,O
tendered,O
will,O
remain,O
outstanding,O
following,O
the,O
consummation,O
of,O
the,O
exchange,O
offer,O
.,O
,O
Certain,O
participants,O
in,O
the,O
exchange,O
offer,O
must,O
deliver,O
a,O
prospectus,O
in,O
connection,O
with,O
resales,O
of,O
the,O
Series,O
B,O
notes,O
.,O
,O
Based,O
on,O
certain,O
no-action,O
letters,O
issued,O
by,O
the,O
staff,O
of,O
the,O
Commission,O
",",O
we,O
believe,O
that,O
you,O
may,O
offer,O
for,O
resale,O
",",O
resell,O
or,O
otherwise,O
transfer,O
the,O
exchange,O
notes,O
without,O
compliance,O
with,O
the,O
registration,O
and,O
prospectus,O
delivery,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
However,O
",",O
in,O
some,O
instances,O
described,O
in,O
this,O
prospectus,O
under,O
Plan,O
of,O
Distribution,O
",",O
you,O
will,O
remain,O
obligated,O
to,O
comply,O
with,O
the,O
registration,O
and,O
prospectus,O
delivery,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
to,O
transfer,O
your,O
Series,O
B,O
notes,O
.,O
,O
In,O
these,O
cases,O
",",O
if,O
you,O
transfer,O
any,O
Series,O
B,O
note,O
without,O
delivering,O
a,O
prospectus,O
meeting,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
or,O
without,O
an,O
exemption,O
from,O
registration,O
of,O
your,O
Series,O
B,O
notes,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
you,O
may,O
incur,O
liability,O
under,O
this,O
act,O
.,O
,O
We,O
do,O
not,O
and,O
will,O
not,O
assume,O
",",O
or,O
indemnify,O
you,O
against,O
",",O
this,O
liability,O
.,O
,O
If,O
you,O
do,O
not,O
exchange,O
your,O
Series,O
A,O
notes,O
for,O
Series,O
B,O
notes,O
",",O
you,O
will,O
continue,O
to,O
be,O
subject,O
to,O
restrictions,O
on,O
transfer,O
of,O
your,O
Series,O
A,O
notes,O
.,O
,O
If,O
you,O
do,O
not,O
exchange,O
your,O
Series,O
A,O
notes,O
for,O
the,O
Series,O
B,O
notes,O
pursuant,O
to,O
the,O
exchange,O
offer,O
",",O
you,O
will,O
continue,O
to,O
be,O
subject,O
to,O
the,O
restrictions,O
on,O
transfer,O
of,O
your,O
Series,O
A,O
notes,O
described,O
in,O
the,O
legend,O
on,O
your,O
Series,O
A,O
notes,O
.,O
,O
The,O
restrictions,O
on,O
transfer,O
of,O
your,O
Series,O
A,O
notes,O
arise,O
because,O
we,O
issued,O
the,O
Series,O
A,O
notes,O
pursuant,O
to,O
exemptions,O
from,O
",",O
or,O
in,O
transactions,O
not,O
subject,O
to,O
",",O
the,O
registration,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
applicable,O
state,O
securities,O
laws,O
.,O
,O
In,O
general,O
",",O
you,O
may,O
only,O
offer,O
to,O
sell,O
the,O
Series,O
A,O
notes,O
if,O
they,O
are,O
registered,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
applicable,O
state,O
securities,O
laws,O
",",O
or,O
offered,O
and,O
sold,O
pursuant,O
to,O
an,O
exemption,O
from,O
such,O
requirements,O
.,O
,O
We,O
do,O
not,O
intend,O
to,O
register,O
the,O
Series,O
A,O
notes,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
be,O
required,O
to,O
comply,O
with,O
the,O
registration,O
and,O
prospectus,O
delivery,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
in,O
connection,O
with,O
any,O
resale,O
transaction,O
.,O
,O
To,O
the,O
extent,O
Series,O
A,O
notes,O
are,O
tendered,O
and,O
accepted,O
in,O
the,O
exchange,O
offer,O
",",O
the,O
trading,O
market,O
",",O
if,O
any,O
",",O
for,O
the,O
Series,O
A,O
notes,O
would,O
be,O
adversely,O
affected,O
.,O
,O
If,O
you,O
do,O
not,O
comply,O
with,O
the,O
specified,O
exchange,O
procedures,O
described,O
in,O
this,O
prospectus,O
",",O
you,O
may,O
be,O
unable,O
to,O
obtain,O
registered,O
notes,O
.,O
,O
We,O
will,O
issue,O
the,O
Series,O
B,O
notes,O
in,O
exchange,O
for,O
the,O
Series,O
A,O
notes,O
pursuant,O
to,O
this,O
exchange,O
offer,O
only,O
after,O
we,O
have,O
timely,O
received,O
the,O
Series,O
A,O
notes,O
",",O
along,O
with,O
a,O
properly,O
completed,O
and,O
duly,O
executed,O
letter,O
of,O
transmittal,O
and,O
all,O
other,O
required,O
documents,O
.,O
,O
Therefore,O
",",O
if,O
you,O
want,O
to,O
tender,O
your,O
Series,O
A,O
notes,O
in,O
exchange,O
for,O
Series,O
B,O
notes,O
",",O
you,O
should,O
allow,O
sufficient,O
time,O
to,O
ensure,O
timely,O
delivery,O
.,O
,O
Neither,O
we,O
nor,O
the,O
exchange,O
agent,O
is,O
under,O
any,O
duty,O
to,O
give,O
notification,O
of,O
defects,O
or,O
irregularities,O
with,O
respect,O
to,O
the,O
tender,O
of,O
Series,O
A,O
notes,O
for,O
exchange,O
.,O
,O
The,O
exchange,O
offer,O
will,O
expire,O
at,O
5:00,O
p.m.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
",",O
2010,O
",",O
or,O
on,O
a,O
later,O
extended,O
date,O
and,O
time,O
as,O
we,O
may,O
decide,O
.,O
,O
Series,O
A,O
notes,O
that,O
are,O
not,O
tendered,O
or,O
are,O
tendered,O
but,O
not,O
accepted,O
for,O
exchange,O
will,O
",",O
following,O
the,O
expiration,O
date,O
and,O
the,O
consummation,O
of,O
this,O
exchange,O
offer,O
",",O
continue,O
to,O
be,O
subject,O
to,O
the,O
existing,O
restrictions,O
upon,O
transfer,O
thereof,O
.,O
,O
In,O
general,O
",",O
the,O
Series,O
A,O
notes,O
may,O
not,O
be,O
offered,O
or,O
sold,O
",",O
unless,O
registered,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
or,O
except,O
pursuant,O
to,O
an,O
exemption,O
from,O
or,O
in,O
a,O
transaction,O
not,O
subject,O
to,O
",",O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
In,O
addition,O
",",O
if,O
you,O
are,O
still,O
holding,O
any,O
Series,O
A,O
notes,O
after,O
the,O
expiration,O
date,O
and,O
the,O
exchange,O
offer,O
has,O
been,O
consummated,O
",",O
subject,O
to,O
certain,O
exceptions,O
",",O
you,O
will,O
not,O
be,O
entitled,O
to,O
any,O
rights,O
to,O
have,O
such,O
Series,O
A,O
notes,O
registered,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
or,O
to,O
any,O
similar,O
rights,O
under,O
the,O
registration,O
rights,O
agreement,O
subject,O
to,O
limited,O
exceptions,O
",",O
if,O
applicable,O
.,O
,O
We,O
do,O
not,O
currently,O
anticipate,O
that,O
we,O
will,O
register,O
the,O
Series,O
A,O
notes,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
The,O
Series,O
B,O
notes,O
and,O
any,O
Series,O
A,O
notes,O
having,O
the,O
same,O
maturity,O
which,O
remain,O
outstanding,O
after,O
consummation,O
of,O
the,O
exchange,O
offer,O
will,O
vote,O
together,O
as,O
a,O
single,O
class,O
for,O
purposes,O
of,O
determining,O
whether,O
holders,O
of,O
the,O
requisite,O
percentage,O
thereof,O
have,O
taken,O
certain,O
actions,O
or,O
exercised,O
certain,O
rights,O
under,O
the,O
Indenture,O
.,O
,O
Our,O
substantial,O
indebtedness,O
could,O
adversely,O
affect,O
our,O
financial,O
health,O
and,O
prevent,O
us,O
from,O
fulfilling,O
our,O
obligations,O
under,O
the,O
Series,O
B,O
notes,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2009,O
",",O
after,O
giving,O
pro,O
forma,O
effect,O
to,O
the,O
issuance,O
of,O
the,O
Series,O
A,O
notes,O
and,O
the,O
redemption,O
of,O
$,O
200,O
million,O
aggregate,O
principal,O
amount,O
of,O
our,O
8.625,O
%,O
notes,O
",",O
we,O
would,O
have,O
had,O
total,O
principal,O
indebtedness,O
of,O
$,O
615.3,O
million,O
",",O
excluding,O
up,O
to,O
an,O
additional,O
$,O
48.6,O
million,O
that,O
we,O
had,O
available,O
for,O
additional,O
borrowings,O
effective,O
upon,O
the,O
closing,O
of,O
our,O
syndicated,O
revolving,O
credit,O
facility,O
based,O
on,O
the,O
borrowing,O
base,O
calculation,O
(,O
as,O
of,O
December,O
31,O
",",O
2009,O
),O
and,O
$,O
766.7,O
million,O
of,O
outstanding,O
indebtedness,O
under,O
our,O
floor,O
plan,O
facilities,O
.,O
,O
Our,O
substantial,O
indebtedness,O
could,O
have,O
important,O
consequences,O
to,O
you,O
.,O
,O
For,O
example,O
",",O
it,O
could,O
:,O
,O
In,O
addition,O
",",O
certain,O
of,O
our,O
debt,O
bears,O
interest,O
at,O
variable,O
rates,O
.,O
,O
If,O
market,O
interest,O
rates,O
increase,O
",",O
variable-rate,O
debt,O
will,O
create,O
higher,O
debt,O
service,O
requirements,O
",",O
which,O
could,O
adversely,O
affect,O
our,O
cash,O
flow,O
.,O
,O
While,O
we,O
may,O
enter,O
into,O
agreements,O
limiting,O
our,O
exposure,O
to,O
higher,O
interest,O
rates,O
",",O
any,O
such,O
agreements,O
may,O
not,O
offer,O
complete,O
protection,O
from,O
this,O
risk,O
.,O
,O
Despite,O
our,O
current,O
indebtedness,O
levels,O
",",O
we,O
and,O
our,O
subsidiaries,O
may,O
be,O
able,O
to,O
incur,O
substantially,O
more,O
debt,O
and,O
take,O
other,O
actions,O
that,O
could,O
diminish,O
our,O
ability,O
to,O
make,O
payments,O
on,O
the,O
Series,O
B,O
notes,O
when,O
due,O
.,O
,O
This,O
could,O
further,O
exacerbate,O
the,O
risks,O
associated,O
with,O
our,O
substantial,O
indebtedness,O
.,O
,O
We,O
and,O
our,O
subsidiaries,O
may,O
be,O
able,O
to,O
incur,O
substantial,O
additional,O
indebtedness,O
in,O
the,O
future,O
",",O
subject,O
to,O
the,O
restrictions,O
contained,O
in,O
our,O
debt,O
instruments,O
existing,O
at,O
the,O
time,O
such,O
indebtedness,O
is,O
incurred,O
.,O
,O
The,O
terms,O
of,O
the,O
indenture,O
governing,O
the,O
notes,O
permit,O
the,O
incurrence,O
of,O
additional,O
debt,O
",",O
securing,O
existing,O
or,O
future,O
debt,O
",",O
recapitalizing,O
our,O
debt,O
or,O
taking,O
a,O
number,O
of,O
other,O
actions,O
subject,O
to,O
certain,O
conditions,O
",",O
any,O
of,O
which,O
could,O
have,O
the,O
effect,O
of,O
diminishing,O
our,O
ability,O
to,O
make,O
payments,O
on,O
the,O
Series,O
B,O
notes,O
when,O
due,O
.,O
,O
The,O
terms,O
of,O
the,O
instruments,O
governing,O
our,O
subsidiaries,O
indebtedness,O
may,O
also,O
permit,O
such,O
actions,O
.,O
,O
Our,O
repayment,O
obligations,O
under,O
the,O
Series,O
B,O
notes,O
will,O
be,O
junior,O
to,O
our,O
obligations,O
under,O
our,O
2010,O
Credit,O
Facilities,O
and,O
other,O
senior,O
indebtedness,O
",",O
and,O
our,O
guarantors,O
repayment,O
obligations,O
under,O
the,O
guarantees,O
will,O
be,O
junior,O
to,O
their,O
senior,O
indebtedness,O
.,O
,O
The,O
payment,O
of,O
the,O
principal,O
of,O
",",O
premium,O
",",O
if,O
any,O
",",O
and,O
interest,O
on,O
the,O
Series,O
B,O
notes,O
will,O
be,O
subordinated,O
to,O
the,O
prior,O
payment,O
in,O
full,O
of,O
all,O
of,O
our,O
existing,O
and,O
future,O
senior,O
indebtedness,O
.,O
,O
In,O
the,O
event,O
of,O
a,O
liquidation,O
",",O
dissolution,O
",",O
reorganization,O
or,O
any,O
similar,O
proceeding,O
",",O
our,O
assets,O
will,O
be,O
available,O
to,O
pay,O
obligations,O
on,O
the,O
Series,O
B,O
notes,O
only,O
after,O
senior,O
indebtedness,O
has,O
been,O
paid,O
in,O
full,O
.,O
,O
Therefore,O
",",O
there,O
may,O
not,O
be,O
sufficient,O
assets,O
to,O
pay,O
amounts,O
due,O
on,O
all,O
or,O
any,O
of,O
the,O
Series,O
B,O
notes,O
.,O
,O
In,O
addition,O
",",O
we,O
may,O
not,O
:,O
,O
if,O
any,O
senior,O
indebtedness,O
is,O
not,O
paid,O
when,O
due,O
or,O
any,O
other,O
default,O
on,O
senior,O
indebtedness,O
occurs,O
and,O
the,O
maturity,O
of,O
such,O
indebtedness,O
is,O
accelerated,O
in,O
accordance,O
with,O
its,O
terms,O
unless,O
",",O
in,O
any,O
case,O
",",O
the,O
default,O
has,O
been,O
cured,O
or,O
waived,O
",",O
and,O
the,O
acceleration,O
has,O
been,O
rescinded,O
or,O
the,O
senior,O
indebtedness,O
has,O
been,O
repaid,O
in,O
full,O
.,O
,O
Moreover,O
",",O
under,O
certain,O
circumstances,O
",",O
if,O
any,O
non-payment,O
default,O
exists,O
with,O
respect,O
to,O
senior,O
indebtedness,O
",",O
we,O
may,O
not,O
make,O
any,O
payments,O
on,O
the,O
Series,O
B,O
notes,O
for,O
a,O
specified,O
time,O
",",O
unless,O
such,O
default,O
is,O
cured,O
or,O
waived,O
",",O
any,O
acceleration,O
of,O
such,O
indebtedness,O
has,O
been,O
rescinded,O
or,O
such,O
indebtedness,O
has,O
been,O
repaid,O
in,O
full,O
.,O
,O
See,O
If,O
we,O
default,O
on,O
our,O
obligations,O
to,O
pay,O
our,O
other,O
indebtedness,O
",",O
we,O
may,O
not,O
be,O
able,O
to,O
make,O
payments,O
on,O
the,O
Series,O
B,O
notes,O
.,O
,O
The,O
Series,O
B,O
notes,O
and,O
the,O
guarantees,O
will,O
be,O
unsecured,O
senior,O
subordinated,O
obligations,O
.,O
,O
Accordingly,O
",",O
they,O
will,O
rank,O
:,O
,O
Assuming,O
all,O
Series,O
A,O
notes,O
are,O
exchanged,O
for,O
Series,O
B,O
notes,O
and,O
the,O
redemption,O
of,O
$,O
200,O
million,O
of,O
our,O
8/,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2013,O
",",O
as,O
of,O
December,O
31,O
",",O
2009,O
",",O
excluding,O
floor,O
plan,O
debt,O
",",O
the,O
Series,O
B,O
notes,O
would,O
have,O
been,O
subordinated,O
to,O
approximately,O
$,O
123.0,O
million,O
of,O
senior,O
debt,O
of,O
certain,O
of,O
our,O
guarantors,O
and,O
equal,O
in,O
right,O
of,O
payment,O
to,O
approximately,O
$,O
92.0,O
million,O
of,O
senior,O
subordinated,O
debt,O
",",O
,O
$,O
17.0,O
million,O
of,O
which,O
would,O
have,O
been,O
structurally,O
subordinated,O
to,O
the,O
Series,O
B,O
notes,O
since,O
such,O
debt,O
is,O
not,O
guaranteed,O
by,O
our,O
subsidiaries,O
.,O
,O
In,O
addition,O
",",O
the,O
Series,O
B,O
notes,O
would,O
have,O
been,O
subordinated,O
to,O
approximately,O
$,O
172.5,O
million,O
of,O
senior,O
debt,O
at,O
the,O
parent,O
company,O
level,O
;,O
however,O
",",O
such,O
debt,O
is,O
not,O
guaranteed,O
by,O
our,O
subsidiaries,O
and,O
therefore,O
the,O
Series,O
B,O
notes,O
would,O
have,O
been,O
structurally,O
senior,O
in,O
right,O
of,O
payment,O
with,O
regard,O
to,O
the,O
guarantors,O
.,O
,O
In,O
addition,O
",",O
our,O
non-guarantor,O
subsidiaries,O
would,O
have,O
had,O
$,O
17.8,O
million,O
of,O
debt,O
(,O
other,O
than,O
intercompany,O
liabilities,O
and,O
trade,O
payables,O
),O
to,O
which,O
the,O
Series,O
B,O
notes,O
would,O
have,O
been,O
structurally,O
subordinated,O
.,O
,O
The,O
Series,O
B,O
notes,O
will,O
not,O
be,O
secured,O
by,O
any,O
of,O
our,O
assets,O
or,O
assets,O
of,O
the,O
guarantors,O
.,O
,O
Our,O
bilateral,O
floor,O
plan,O
indebtedness,O
is,O
secured,O
by,O
substantially,O
all,O
of,O
the,O
assets,O
of,O
our,O
subsidiaries,O
that,O
receive,O
financing,O
under,O
the,O
respective,O
arrangements,O
.,O
,O
Our,O
construction/mortgage,O
indebtedness,O
is,O
secured,O
by,O
the,O
property,O
acquired,O
with,O
borrowings,O
under,O
such,O
indebtedness,O
.,O
,O
The,O
indebtedness,O
under,O
our,O
2010,O
Credit,O
Facilities,O
is,O
secured,O
by,O
pledge,O
of,O
substantially,O
all,O
of,O
our,O
assets,O
and,O
the,O
assets,O
of,O
substantially,O
all,O
of,O
our,O
domestic,O
subsidiaries,O
",",O
as,O
well,O
as,O
a,O
pledge,O
of,O
the,O
franchise,O
agreements,O
and,O
stock,O
or,O
equity,O
interests,O
of,O
our,O
dealership,O
franchise,O
subsidiaries,O
",",O
except,O
for,O
those,O
dealership,O
franchise,O
subsidiaries,O
where,O
the,O
applicable,O
manufacturer,O
prohibits,O
such,O
a,O
pledge,O
",",O
in,O
which,O
cases,O
the,O
stock,O
or,O
equity,O
interests,O
of,O
the,O
dealership,O
franchise,O
subsidiary,O
is,O
subject,O
to,O
an,O
escrow,O
arrangement,O
with,O
the,O
administrative,O
agent,O
.,O
,O
Substantially,O
all,O
of,O
our,O
domestic,O
subsidiaries,O
also,O
guarantee,O
our,O
obligations,O
under,O
the,O
2010,O
Credit,O
Facilities,O
.,O
,O
In,O
the,O
event,O
of,O
a,O
default,O
on,O
the,O
Series,O
B,O
notes,O
or,O
our,O
bankruptcy,O
",",O
liquidation,O
or,O
reorganization,O
",",O
these,O
assets,O
will,O
be,O
available,O
to,O
satisfy,O
the,O
obligations,O
with,O
respect,O
to,O
the,O
indebtedness,O
secured,O
thereby,O
before,O
any,O
payment,O
therefrom,O
could,O
be,O
made,O
on,O
the,O
Series,O
B,O
notes,O
.,O
,O
Therefore,O
",",O
there,O
may,O
not,O
be,O
sufficient,O
assets,O
to,O
pay,O
amounts,O
due,O
on,O
all,O
or,O
any,O
of,O
the,O
Series,O
B,O
notes,O
.,O
,O
A,O
significant,O
portion,O
of,O
our,O
outstanding,O
indebtedness,O
and,O
the,O
indebtedness,O
of,O
our,O
subsidiaries,O
is,O
secured,O
by,O
substantially,O
all,O
of,O
our,O
and,O
our,O
subsidiaries,O
consolidated,O
assets,O
.,O
,O
As,O
a,O
result,O
of,O
these,O
security,O
interests,O
",",O
such,O
assets,O
would,O
be,O
available,O
to,O
satisfy,O
claims,O
of,O
our,O
creditors,O
",",O
including,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
",",O
if,O
we,O
were,O
to,O
become,O
insolvent,O
only,O
to,O
the,O
extent,O
the,O
value,O
of,O
such,O
assets,O
exceeded,O
the,O
amount,O
of,O
our,O
secured,O
and,O
our,O
subsidiaries,O
indebtedness,O
and,O
other,O
obligations,O
.,O
,O
In,O
addition,O
",",O
the,O
existence,O
of,O
these,O
security,O
interests,O
may,O
adversely,O
affect,O
our,O
financial,O
flexibility,O
.,O
,O
Indebtedness,O
under,O
our,O
2010,O
Credit,O
Facilities,O
is,O
secured,O
by,O
a,O
lien,O
on,O
substantially,O
all,O
of,O
our,O
and,O
our,O
subsidiaries,O
assets,O
",",O
including,O
pledges,O
of,O
all,O
or,O
a,O
portion,O
of,O
the,O
capital,O
stock,O
of,O
certain,O
of,O
our,O
subsidiaries,O
.,O
,O
The,O
Series,O
B,O
notes,O
are,O
unsecured,O
and,O
therefore,O
do,O
not,O
have,O
the,O
benefit,O
of,O
such,O
collateral,O
.,O
,O
Accordingly,O
",",O
if,O
an,O
event,O
of,O
default,O
were,O
to,O
occur,O
under,O
our,O
2010,O
Credit,O
Facilities,O
",",O
the,O
senior,O
secured,O
creditors,O
under,O
such,O
facilities,O
would,O
have,O
a,O
prior,O
right,O
to,O
our,O
and,O
our,O
subsidiaries,O
assets,O
",",O
to,O
the,O
exclusion,O
of,O
our,O
unsecured,O
creditors,O
",",O
including,O
the,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
.,O
,O
In,O
that,O
event,O
",",O
our,O
and,O
our,O
subsidiaries,O
assets,O
would,O
first,O
be,O
used,O
to,O
repay,O
in,O
full,O
all,O
indebtedness,O
and,O
other,O
obligations,O
secured,O
by,O
them,O
",",O
resulting,O
in,O
all,O
or,O
a,O
portion,O
of,O
our,O
and,O
our,O
subsidiaries,O
assets,O
being,O
unavailable,O
to,O
satisfy,O
the,O
claims,O
of,O
our,O
unsecured,O
indebtedness,O
",",O
including,O
the,O
Series,O
B,O
notes,O
.,O
,O
The,O
creditors,O
under,O
these,O
secured,O
facilities,O
would,O
have,O
a,O
prior,O
claim,O
on,O
such,O
assets,O
in,O
the,O
event,O
of,O
our,O
bankruptcy,O
",",O
insolvency,O
",",O
liquidation,O
or,O
reorganization,O
",",O
and,O
we,O
might,O
not,O
have,O
sufficient,O
funds,O
to,O
pay,O
all,O
of,O
our,O
creditors,O
and,O
holders,O
of,O
our,O
unsecured,O
indebtedness,O
",",O
including,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
",",O
might,O
receive,O
less,O
",",O
ratably,O
",",O
than,O
the,O
holders,O
of,O
our,O
senior,O
secured,O
debt,O
and,O
all,O
of,O
our,O
subsidiaries,O
debt,O
",",O
and,O
might,O
not,O
be,O
fully,O
paid,O
",",O
or,O
might,O
not,O
be,O
paid,O
at,O
all,O
",",O
even,O
when,O
the,O
holders,O
of,O
our,O
senior,O
secured,O
debt,O
and,O
all,O
of,O
our,O
subsidiaries,O
debt,O
receive,O
full,O
payment,O
for,O
their,O
claims,O
.,O
,O
In,O
that,O
event,O
",",O
holders,O
of,O
our,O
unsecured,O
indebtedness,O
",",O
including,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
",",O
would,O
not,O
be,O
entitled,O
to,O
receive,O
any,O
of,O
our,O
assets,O
or,O
the,O
proceeds,O
therefrom,O
.,O
,O
The,O
pledge,O
of,O
these,O
assets,O
and,O
other,O
restrictions,O
may,O
limit,O
our,O
flexibility,O
in,O
raising,O
capital,O
for,O
other,O
purposes,O
.,O
,O
Because,O
substantially,O
all,O
of,O
our,O
assets,O
are,O
pledged,O
under,O
our,O
2010,O
Credit,O
Facilities,O
",",O
our,O
ability,O
to,O
incur,O
additional,O
secured,O
indebtedness,O
or,O
to,O
sell,O
or,O
dispose,O
of,O
assets,O
to,O
raise,O
capital,O
may,O
be,O
impaired,O
",",O
which,O
could,O
have,O
an,O
adverse,O
effect,O
on,O
our,O
financial,O
flexibility,O
.,O
,O
If,O
we,O
default,O
on,O
our,O
obligations,O
to,O
pay,O
our,O
other,O
indebtedness,O
",",O
we,O
may,O
not,O
be,O
able,O
to,O
make,O
payments,O
on,O
the,O
Series,O
B,O
notes,O
.,O
,O
Any,O
default,O
under,O
the,O
agreements,O
governing,O
our,O
indebtedness,O
",",O
including,O
a,O
default,O
under,O
our,O
2010,O
Credit,O
Facilities,O
that,O
is,O
not,O
waived,O
by,O
the,O
required,O
lenders,O
",",O
could,O
result,O
in,O
our,O
inability,O
to,O
pay,O
principal,O
",",O
premium,O
",",O
if,O
any,O
",",O
and,O
interest,O
on,O
the,O
Series,O
B,O
notes,O
and,O
substantially,O
decrease,O
the,O
market,O
value,O
of,O
the,O
Series,O
B,O
notes,O
.,O
,O
If,O
we,O
are,O
unable,O
to,O
generate,O
sufficient,O
cash,O
flow,O
and,O
are,O
otherwise,O
unable,O
to,O
obtain,O
funds,O
necessary,O
to,O
meet,O
required,O
payments,O
of,O
principal,O
",",O
premium,O
",",O
if,O
any,O
",",O
and,O
interest,O
on,O
our,O
indebtedness,O
",",O
or,O
if,O
we,O
otherwise,O
fail,O
to,O
comply,O
with,O
the,O
various,O
covenants,O
",",O
including,O
financial,O
and,O
operating,O
covenants,O
",",O
in,O
the,O
instruments,O
governing,O
our,O
indebtedness,O
(,O
including,O
our,O
2010,O
Credit,O
Facilities,O
),O
",",O
we,O
could,O
be,O
in,O
default,O
under,O
the,O
terms,O
of,O
the,O
agreements,O
governing,O
such,O
indebtedness,O
.,O
,O
In,O
the,O
event,O
of,O
such,O
default,O
",",O
the,O
holders,O
of,O
such,O
indebtedness,O
could,O
elect,O
to,O
declare,O
all,O
the,O
funds,O
borrowed,O
thereunder,O
to,O
be,O
due,O
and,O
payable,O
",",O
together,O
with,O
accrued,O
and,O
unpaid,O
interest,O
",",O
the,O
lenders,O
under,O
our,O
2010,O
Credit,O
Facilities,O
could,O
elect,O
to,O
terminate,O
their,O
commitments,O
",",O
cease,O
making,O
further,O
loans,O
and,O
institute,O
foreclosure,O
proceedings,O
against,O
our,O
assets,O
",",O
and,O
we,O
may,O
seek,O
protection,O
under,O
the,O
bankruptcy,O
code,O
.,O
,O
If,O
our,O
future,O
operating,O
performance,O
declines,O
to,O
the,O
extent,O
that,O
we,O
are,O
unable,O
to,O
meet,O
our,O
financial,O
covenants,O
under,O
the,O
2010,O
Credit,O
Facilities,O
",",O
we,O
may,O
need,O
to,O
request,O
waivers,O
from,O
the,O
required,O
lenders,O
under,O
our,O
2010,O
Credit,O
Facilities,O
to,O
avoid,O
being,O
in,O
default,O
.,O
,O
If,O
we,O
are,O
unable,O
to,O
obtain,O
a,O
waiver,O
from,O
the,O
required,O
lenders,O
",",O
we,O
would,O
be,O
in,O
default,O
under,O
our,O
2010,O
Credit,O
Facilities,O
",",O
the,O
lenders,O
could,O
exercise,O
their,O
rights,O
as,O
described,O
above,O
",",O
and,O
we,O
may,O
seek,O
protection,O
under,O
the,O
bankruptcy,O
code,O
.,O
,O
See,O
Description,O
of,O
Other,O
Indebtedness,O
-,O
2010,O
Credit,O
Facilities,O
and,O
Description,O
of,O
Notes,O
.,O
,O
Our,O
ability,O
to,O
make,O
interest,O
and,O
principal,O
payments,O
when,O
due,O
to,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
depends,O
upon,O
the,O
receipt,O
of,O
sufficient,O
funds,O
from,O
our,O
subsidiaries,O
.,O
,O
Substantially,O
all,O
of,O
our,O
consolidated,O
assets,O
are,O
held,O
by,O
our,O
subsidiaries,O
and,O
substantially,O
all,O
of,O
our,O
consolidated,O
cash,O
flow,O
and,O
net,O
income,O
are,O
generated,O
by,O
our,O
subsidiaries,O
.,O
,O
Accordingly,O
",",O
our,O
cash,O
flow,O
and,O
ability,O
to,O
service,O
debt,O
",",O
including,O
the,O
Series,O
B,O
notes,O
",",O
depends,O
to,O
a,O
substantial,O
degree,O
on,O
the,O
results,O
of,O
operations,O
of,O
our,O
subsidiaries,O
and,O
upon,O
the,O
ability,O
of,O
our,O
subsidiaries,O
to,O
provide,O
us,O
with,O
cash,O
.,O
,O
We,O
may,O
receive,O
cash,O
from,O
our,O
subsidiaries,O
in,O
the,O
form,O
of,O
dividends,O
or,O
loans,O
or,O
other,O
distributions,O
.,O
,O
We,O
may,O
use,O
this,O
cash,O
to,O
service,O
our,O
debt,O
obligations,O
or,O
for,O
working,O
capital,O
.,O
,O
Our,O
subsidiaries,O
are,O
separate,O
and,O
distinct,O
legal,O
entities,O
and,O
have,O
no,O
obligation,O
",",O
contingent,O
or,O
otherwise,O
",",O
to,O
distribute,O
cash,O
to,O
us,O
or,O
to,O
make,O
funds,O
available,O
to,O
service,O
debt,O
.,O
,O
In,O
addition,O
",",O
the,O
ability,O
of,O
our,O
subsidiaries,O
to,O
pay,O
dividends,O
or,O
make,O
loans,O
or,O
distributions,O
to,O
us,O
is,O
subject,O
to,O
minimum,O
net,O
capital,O
requirements,O
under,O
manufacturer,O
franchise,O
agreements,O
and,O
laws,O
of,O
the,O
state,O
in,O
which,O
a,O
subsidiary,O
is,O
organized,O
and,O
depends,O
to,O
a,O
significant,O
degree,O
on,O
the,O
results,O
of,O
operations,O
of,O
our,O
subsidiaries,O
and,O
other,O
business,O
considerations,O
.,O
,O
To,O
service,O
our,O
debt,O
",",O
we,O
will,O
require,O
a,O
significant,O
amount,O
of,O
cash,O
",",O
which,O
may,O
not,O
be,O
available,O
to,O
us,O
.,O
,O
Our,O
ability,O
to,O
make,O
payments,O
on,O
",",O
or,O
repay,O
or,O
refinance,O
",",O
our,O
debt,O
",",O
including,O
the,O
Series,O
B,O
notes,O
",",O
and,O
to,O
fund,O
planned,O
capital,O
expenditures,O
and,O
our,O
research,O
and,O
development,O
efforts,O
",",O
will,O
depend,O
largely,O
upon,O
our,O
future,O
operating,O
performance,O
.,O
,O
Our,O
future,O
performance,O
",",O
to,O
a,O
certain,O
extent,O
",",O
is,O
subject,O
to,O
general,O
economic,O
",",O
financial,O
",",O
competitive,O
",",O
legislative,O
",",O
regulatory,O
and,O
other,O
factors,O
that,O
are,O
beyond,O
our,O
control,O
.,O
,O
In,O
addition,O
",",O
our,O
ability,O
to,O
borrow,O
funds,O
in,O
the,O
future,O
to,O
make,O
payments,O
on,O
our,O
debt,O
will,O
depend,O
on,O
the,O
satisfaction,O
of,O
the,O
covenants,O
in,O
our,O
2010,O
Credit,O
Facilities,O
and,O
our,O
other,O
debt,O
agreements,O
",",O
including,O
the,O
indenture,O
governing,O
the,O
Series,O
B,O
notes,O
and,O
the,O
indenture,O
governing,O
the,O
8.625,O
%,O
Notes,O
",",O
and,O
other,O
agreements,O
we,O
may,O
enter,O
into,O
in,O
the,O
future,O
.,O
,O
In,O
particular,O
",",O
we,O
will,O
need,O
to,O
maintain,O
certain,O
financial,O
ratios,O
under,O
our,O
2010,O
Credit,O
Facilities,O
.,O
,O
We,O
can,O
not,O
assure,O
you,O
that,O
our,O
business,O
will,O
generate,O
sufficient,O
cash,O
flow,O
from,O
operations,O
or,O
that,O
future,O
borrowings,O
will,O
be,O
available,O
to,O
us,O
under,O
our,O
2010,O
Credit,O
Facilities,O
or,O
from,O
other,O
sources,O
in,O
an,O
amount,O
sufficient,O
to,O
enable,O
us,O
to,O
pay,O
our,O
debt,O
",",O
including,O
the,O
Series,O
B,O
notes,O
",",O
or,O
to,O
fund,O
our,O
other,O
liquidity,O
needs,O
.,O
,O
We,O
may,O
need,O
to,O
refinance,O
all,O
or,O
a,O
portion,O
of,O
our,O
indebtedness,O
",",O
including,O
the,O
Series,O
B,O
notes,O
",",O
on,O
or,O
before,O
maturity,O
.,O
,O
We,O
can,O
not,O
assure,O
you,O
that,O
we,O
will,O
be,O
able,O
to,O
refinance,O
any,O
of,O
our,O
debt,O
",",O
including,O
our,O
2010,O
Credit,O
Facilities,O
",",O
on,O
commercially,O
reasonable,O
terms,O
or,O
at,O
all,O
.,O
,O
8.625,O
%,O
Notes,O
that,O
remain,O
outstanding,O
following,O
the,O
redemption,O
of,O
$,O
200,O
million,O
of,O
our,O
8.625,O
%,O
Notes,O
mature,O
prior,O
to,O
the,O
maturity,O
of,O
the,O
Series,O
B,O
notes,O
.,O
,O
If,O
we,O
were,O
unable,O
to,O
make,O
payments,O
or,O
refinance,O
our,O
debt,O
or,O
obtain,O
new,O
financing,O
under,O
these,O
circumstances,O
",",O
we,O
would,O
have,O
to,O
consider,O
other,O
options,O
",",O
such,O
as,O
sales,O
of,O
assets,O
",",O
sales,O
of,O
equity,O
and/or,O
negotiations,O
with,O
our,O
lenders,O
to,O
restructure,O
the,O
applicable,O
debt,O
.,O
,O
Our,O
2010,O
Credit,O
Facilities,O
",",O
the,O
indenture,O
governing,O
the,O
Series,O
B,O
notes,O
and,O
the,O
indenture,O
governing,O
the,O
8.625,O
%,O
Notes,O
may,O
restrict,O
",",O
or,O
market,O
or,O
business,O
conditions,O
may,O
limit,O
",",O
our,O
ability,O
to,O
do,O
some,O
of,O
these,O
things,O
.,O
,O
The,O
agreements,O
governing,O
our,O
debt,O
",",O
including,O
the,O
Series,O
B,O
notes,O
",",O
the,O
8.625,O
%,O
Notes,O
and,O
our,O
2010,O
Credit,O
Facilities,O
",",O
contain,O
various,O
covenants,O
that,O
impose,O
restrictions,O
on,O
us,O
that,O
may,O
affect,O
our,O
ability,O
to,O
operate,O
our,O
business,O
and,O
to,O
make,O
payments,O
on,O
the,O
Series,O
B,O
notes,O
.,O
,O
The,O
2010,O
Credit,O
Facilities,O
",",O
the,O
indenture,O
governing,O
the,O
Series,O
B,O
notes,O
and,O
the,O
indenture,O
governing,O
the,O
8.625,O
%,O
Notes,O
impose,O
",",O
and,O
future,O
financing,O
agreements,O
are,O
likely,O
to,O
impose,O
",",O
operating,O
and,O
financial,O
restrictions,O
on,O
our,O
activities,O
.,O
,O
These,O
restrictions,O
require,O
us,O
to,O
comply,O
with,O
or,O
maintain,O
certain,O
financial,O
tests,O
and,O
ratios,O
",",O
including,O
a,O
consolidated,O
liquidity,O
ratio,O
",",O
a,O
consolidated,O
fixed,O
charge,O
coverage,O
ratio,O
and,O
a,O
consolidated,O
total,O
senior,O
secured,O
debt,O
to,O
EBITDA,O
ratio,O
.,O
,O
In,O
addition,O
",",O
the,O
agreements,O
limit,O
or,O
prohibit,O
our,O
ability,O
to,O
",",O
among,O
other,O
things,O
:,O
,O
These,O
restrictions,O
on,O
our,O
ability,O
to,O
operate,O
our,O
business,O
could,O
seriously,O
harm,O
our,O
business,O
by,O
",",O
among,O
other,O
things,O
",",O
limiting,O
our,O
ability,O
to,O
take,O
advantage,O
of,O
financing,O
",",O
merger,O
and,O
acquisition,O
and,O
other,O
corporate,O
opportunities,O
.,O
,O
See,O
Description,O
of,O
Other,O
Indebtedness,O
and,O
Description,O
of,O
Notes,O
.,O
,O
Various,O
risks,O
",",O
uncertainties,O
and,O
events,O
beyond,O
our,O
control,O
could,O
affect,O
our,O
ability,O
to,O
comply,O
with,O
these,O
covenants,O
and,O
maintain,O
these,O
financial,O
tests,O
and,O
ratios,O
.,O
,O
Failure,O
to,O
comply,O
with,O
any,O
of,O
the,O
covenants,O
in,O
our,O
existing,O
or,O
future,O
financing,O
agreements,O
could,O
result,O
in,O
a,O
default,O
under,O
those,O
agreements,O
and,O
under,O
other,O
agreements,O
containing,O
cross-default,O
provisions,O
.,O
,O
A,O
default,O
would,O
permit,O
lenders,O
to,O
accelerate,O
the,O
maturity,O
of,O
the,O
debt,O
under,O
these,O
agreements,O
and,O
to,O
foreclose,O
upon,O
any,O
collateral,O
securing,O
the,O
debt,O
.,O
,O
Under,O
these,O
circumstances,O
",",O
we,O
might,O
not,O
have,O
sufficient,O
funds,O
or,O
other,O
resources,O
to,O
satisfy,O
all,O
of,O
our,O
obligations,O
",",O
including,O
our,O
obligations,O
under,O
the,O
Series,O
B,O
notes,O
.,O
,O
In,O
addition,O
",",O
the,O
limitations,O
imposed,O
by,O
financing,O
agreements,O
on,O
our,O
ability,O
to,O
incur,O
additional,O
debt,O
and,O
to,O
take,O
other,O
actions,O
might,O
significantly,O
impair,O
our,O
ability,O
to,O
obtain,O
other,O
financing,O
.,O
,O
We,O
can,O
not,O
assure,O
you,O
that,O
we,O
will,O
be,O
granted,O
waivers,O
or,O
amendments,O
to,O
these,O
agreements,O
if,O
for,O
any,O
reason,O
we,O
are,O
unable,O
to,O
comply,O
with,O
these,O
agreements,O
or,O
that,O
we,O
will,O
be,O
able,O
to,O
refinance,O
our,O
debt,O
on,O
terms,O
acceptable,O
to,O
us,O
",",O
or,O
at,O
all,O
.,O
,O
We,O
may,O
not,O
have,O
the,O
ability,O
to,O
raise,O
the,O
funds,O
necessary,O
to,O
purchase,O
the,O
Series,O
B,O
notes,O
upon,O
a,O
change,O
of,O
control,O
",",O
and,O
our,O
future,O
debt,O
may,O
contain,O
limitations,O
on,O
our,O
ability,O
to,O
repurchase,O
the,O
Series,O
B,O
notes,O
.,O
,O
Holders,O
of,O
the,O
Series,O
B,O
notes,O
will,O
have,O
the,O
right,O
to,O
require,O
us,O
to,O
repurchase,O
the,O
Series,O
B,O
notes,O
upon,O
the,O
occurrence,O
of,O
a,O
change,O
of,O
control,O
at,O
101,O
%,O
of,O
their,O
principal,O
amount,O
plus,O
accrued,O
and,O
unpaid,O
interest,O
",",O
as,O
described,O
under,O
Description,O
of,O
Notes,O
Purchase,O
of,O
Series,O
B,O
Notes,O
Upon,O
a,O
Change,O
of,O
Control,O
in,O
this,O
prospectus,O
.,O
,O
However,O
",",O
we,O
may,O
not,O
have,O
enough,O
available,O
cash,O
or,O
be,O
able,O
to,O
obtain,O
financing,O
at,O
the,O
time,O
we,O
are,O
required,O
to,O
make,O
repurchases,O
of,O
Series,O
B,O
notes,O
.,O
,O
In,O
addition,O
",",O
our,O
ability,O
to,O
repurchase,O
the,O
Series,O
B,O
notes,O
may,O
be,O
limited,O
by,O
law,O
or,O
by,O
agreements,O
governing,O
our,O
then,O
outstanding,O
indebtedness,O
.,O
,O
Our,O
failure,O
to,O
repurchase,O
Series,O
B,O
notes,O
at,O
a,O
time,O
when,O
the,O
repurchase,O
is,O
required,O
by,O
the,O
indenture,O
would,O
constitute,O
an,O
event,O
of,O
default,O
under,O
the,O
indenture,O
.,O
,O
An,O
event,O
of,O
default,O
under,O
the,O
indenture,O
or,O
the,O
change,O
of,O
control,O
itself,O
could,O
also,O
lead,O
to,O
a,O
default,O
under,O
agreements,O
governing,O
our,O
existing,O
or,O
future,O
indebtedness,O
.,O
,O
If,O
the,O
repayment,O
of,O
the,O
related,O
indebtedness,O
were,O
to,O
be,O
accelerated,O
after,O
any,O
applicable,O
notice,O
or,O
grace,O
periods,O
",",O
we,O
may,O
not,O
have,O
sufficient,O
funds,O
to,O
repay,O
the,O
indebtedness,O
and,O
repurchase,O
the,O
Series,O
B,O
notes,O
.,O
,O
Some,O
significant,O
restructuring,O
transactions,O
may,O
not,O
constitute,O
a,O
change,O
of,O
control,O
",",O
in,O
which,O
case,O
we,O
would,O
not,O
be,O
obligated,O
to,O
offer,O
to,O
repurchase,O
the,O
Series,O
B,O
notes,O
.,O
,O
Upon,O
the,O
occurrence,O
of,O
a,O
change,O
of,O
control,O
",",O
you,O
have,O
the,O
right,O
to,O
require,O
us,O
to,O
repurchase,O
your,O
Series,O
B,O
notes,O
.,O
,O
However,O
",",O
the,O
change,O
of,O
control,O
provisions,O
will,O
not,O
afford,O
protection,O
to,O
holders,O
of,O
Series,O
B,O
notes,O
in,O
the,O
event,O
of,O
certain,O
other,O
transactions,O
that,O
could,O
adversely,O
affect,O
the,O
Series,O
B,O
notes,O
.,O
,O
For,O
example,O
",",O
transactions,O
such,O
as,O
leveraged,O
recapitalizations,O
",",O
refinancings,O
",",O
restructurings,O
",",O
or,O
acquisitions,O
initiated,O
by,O
us,O
may,O
not,O
constitute,O
a,O
change,O
of,O
control,O
requiring,O
us,O
to,O
repurchase,O
the,O
Series,O
B,O
notes,O
.,O
,O
In,O
the,O
event,O
of,O
any,O
such,O
transaction,O
",",O
the,O
holders,O
would,O
not,O
have,O
the,O
right,O
to,O
require,O
us,O
to,O
repurchase,O
the,O
Series,O
B,O
notes,O
",",O
even,O
though,O
each,O
of,O
these,O
transactions,O
could,O
increase,O
the,O
amount,O
of,O
our,O
indebtedness,O
",",O
or,O
otherwise,O
adversely,O
affect,O
our,O
capital,O
structure,O
or,O
any,O
credit,O
ratings,O
",",O
thereby,O
adversely,O
affecting,O
the,O
holders,O
of,O
Series,O
B,O
notes,O
.,O
,O
Our,O
credit,O
ratings,O
may,O
not,O
reflect,O
the,O
risks,O
of,O
investing,O
in,O
the,O
Series,O
B,O
notes,O
and,O
any,O
downgrade,O
of,O
our,O
credit,O
ratings,O
generally,O
may,O
cause,O
the,O
trading,O
price,O
of,O
the,O
notes,O
to,O
fall,O
.,O
,O
The,O
Series,O
B,O
notes,O
will,O
be,O
rated,O
by,O
at,O
least,O
one,O
nationally,O
recognized,O
statistical,O
rating,O
organization,O
.,O
,O
The,O
ratings,O
of,O
our,O
Series,O
B,O
notes,O
will,O
primarily,O
reflect,O
our,O
financial,O
strength,O
and,O
will,O
change,O
in,O
accordance,O
with,O
the,O
rating,O
of,O
our,O
financial,O
strength,O
.,O
,O
Any,O
rating,O
is,O
not,O
a,O
recommendation,O
to,O
purchase,O
",",O
sell,O
or,O
hold,O
any,O
particular,O
security,O
",",O
including,O
the,O
Series,O
B,O
notes,O
.,O
,O
These,O
ratings,O
do,O
not,O
comment,O
as,O
to,O
market,O
price,O
or,O
suitability,O
for,O
a,O
particular,O
investor,O
.,O
,O
In,O
addition,O
",",O
ratings,O
at,O
any,O
time,O
may,O
be,O
lowered,O
or,O
withdrawn,O
in,O
their,O
entirety,O
.,O
,O
The,O
ratings,O
of,O
the,O
Series,O
B,O
notes,O
may,O
not,O
reflect,O
the,O
potential,O
impact,O
of,O
all,O
risks,O
related,O
to,O
structure,O
and,O
other,O
factors,O
on,O
any,O
trading,O
market,O
for,O
",",O
or,O
trading,O
value,O
of,O
",",O
the,O
Series,O
B,O
notes,O
.,O
,O
If,O
one,O
or,O
more,O
rating,O
agencies,O
that,O
rates,O
the,O
Series,O
B,O
notes,O
reduces,O
their,O
rating,O
in,O
the,O
future,O
",",O
or,O
announces,O
their,O
intention,O
to,O
put,O
the,O
Series,O
B,O
notes,O
on,O
credit,O
watch,O
",",O
the,O
market,O
price,O
of,O
the,O
Series,O
B,O
notes,O
could,O
be,O
harmed,O
.,O
,O
Future,O
downgrades,O
of,O
our,O
credit,O
ratings,O
in,O
general,O
could,O
cause,O
also,O
the,O
trading,O
price,O
of,O
the,O
Series,O
B,O
notes,O
to,O
decrease,O
and,O
increase,O
our,O
corporate,O
borrowing,O
costs,O
.,O
,O
Provisions,O
in,O
the,O
indenture,O
for,O
the,O
Series,O
B,O
notes,O
may,O
deter,O
or,O
prevent,O
a,O
business,O
combination,O
that,O
may,O
be,O
favorable,O
to,O
you,O
.,O
,O
If,O
a,O
change,O
of,O
control,O
occurs,O
prior,O
to,O
the,O
maturity,O
date,O
of,O
the,O
notes,O
",",O
holders,O
of,O
the,O
Series,O
B,O
notes,O
will,O
have,O
the,O
right,O
",",O
at,O
their,O
option,O
",",O
to,O
require,O
us,O
to,O
repurchase,O
all,O
or,O
a,O
portion,O
of,O
their,O
Series,O
B,O
notes,O
.,O
,O
In,O
addition,O
",",O
the,O
indenture,O
for,O
the,O
Series,O
B,O
notes,O
prohibits,O
us,O
from,O
engaging,O
in,O
certain,O
mergers,O
or,O
acquisitions,O
unless,O
",",O
among,O
other,O
things,O
",",O
the,O
surviving,O
entity,O
assumes,O
our,O
obligations,O
under,O
the,O
Series,O
B,O
notes,O
.,O
,O
These,O
and,O
other,O
provisions,O
could,O
prevent,O
or,O
deter,O
a,O
third,O
party,O
from,O
acquiring,O
us,O
even,O
where,O
the,O
acquisition,O
could,O
be,O
beneficial,O
to,O
you,O
.,O
,O
The,O
guarantees,O
may,O
not,O
be,O
enforceable,O
because,O
of,O
fraudulent,O
conveyance,O
laws,O
.,O
,O
Our,O
obligations,O
under,O
the,O
Series,O
B,O
notes,O
will,O
be,O
guaranteed,O
by,O
all,O
of,O
our,O
domestic,O
operating,O
subsidiaries,O
.,O
,O
If,O
a,O
court,O
were,O
to,O
find,O
",",O
pursuant,O
to,O
federal,O
bankruptcy,O
or,O
state,O
fraudulent,O
transfer,O
laws,O
or,O
otherwise,O
",",O
that,O
:,O
,O
the,O
court,O
could,O
avoid,O
or,O
subordinate,O
the,O
guarantee,O
in,O
favor,O
of,O
the,O
guarantor,O
s,O
other,O
creditors,O
.,O
,O
Among,O
other,O
things,O
",",O
a,O
legal,O
challenge,O
of,O
a,O
guarantee,O
on,O
fraudulent,O
conveyance,O
grounds,O
may,O
focus,O
on,O
the,O
benefits,O
",",O
if,O
any,O
",",O
realized,O
by,O
the,O
guarantor,O
as,O
a,O
result,O
of,O
our,O
issuance,O
of,O
the,O
Series,O
B,O
notes,O
and,O
be,O
subject,O
to,O
a,O
claim,O
that,O
",",O
because,O
the,O
guarantees,O
were,O
incurred,O
for,O
the,O
benefit,O
of,O
Sonic,I-BUSINESS
",",O
and,O
only,O
indirectly,O
for,O
the,O
benefit,O
of,O
the,O
guarantors,O
",",O
the,O
obligations,O
of,O
the,O
guarantors,O
under,O
the,O
guarantees,O
were,O
incurred,O
for,O
less,O
than,O
reasonably,O
equivalent,O
value,O
or,O
fair,O
consideration,O
.,O
,O
If,O
a,O
party,O
challenging,O
the,O
validity,O
of,O
the,O
guarantees,O
were,O
successful,O
",",O
any,O
payment,O
by,O
that,O
guarantor,O
pursuant,O
to,O
its,O
guarantee,O
could,O
be,O
voided,O
and,O
required,O
to,O
be,O
returned,O
to,O
the,O
guarantor,O
",",O
or,O
to,O
a,O
fund,O
for,O
the,O
benefit,O
of,O
the,O
creditors,O
of,O
the,O
guarantor,O
.,O
,O
The,O
measure,O
of,O
insolvency,O
of,O
the,O
guarantor,O
for,O
these,O
purposes,O
will,O
vary,O
depending,O
upon,O
the,O
law,O
of,O
the,O
relevant,O
jurisdiction,O
.,O
,O
Generally,O
",",O
however,O
",",O
a,O
company,O
would,O
be,O
considered,O
insolvent,O
:,O
,O
We,O
can,O
not,O
assure,O
you,O
what,O
standards,O
a,O
court,O
would,O
apply,O
to,O
determine,O
whether,O
a,O
guarantor,O
was,O
insolvent,O
at,O
the,O
relevant,O
time,O
.,O
,O
To,O
the,O
extent,O
that,O
a,O
guarantee,O
were,O
to,O
be,O
avoided,O
as,O
a,O
fraudulent,O
conveyance,O
or,O
held,O
unenforceable,O
for,O
any,O
other,O
reason,O
",",O
holders,O
of,O
the,O
Series,O
B,O
notes,O
would,O
cease,O
to,O
have,O
any,O
claim,O
in,O
respect,O
of,O
the,O
guarantor,O
and,O
would,O
be,O
creditors,O
solely,O
of,O
ours,O
and,O
other,O
guarantors,O
whose,O
guarantees,O
had,O
not,O
been,O
avoided,O
or,O
held,O
unenforceable,O
.,O
,O
In,O
this,O
event,O
",",O
the,O
claims,O
of,O
the,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
against,O
the,O
issuer,O
of,O
an,O
invalid,O
guarantee,O
would,O
be,O
subject,O
to,O
the,O
prior,O
payment,O
in,O
full,O
of,O
all,O
liabilities,O
of,O
the,O
guarantor,O
thereunder,O
.,O
,O
There,O
can,O
be,O
no,O
assurance,O
that,O
",",O
after,O
providing,O
for,O
all,O
prior,O
claims,O
",",O
there,O
would,O
be,O
sufficient,O
assets,O
to,O
satisfy,O
the,O
claims,O
of,O
the,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
relating,O
to,O
the,O
voided,O
guarantees,O
.,O
,O
The,O
guarantees,O
may,O
be,O
released,O
under,O
certain,O
circumstances,O
",",O
including,O
upon,O
resale,O
",",O
exchange,O
or,O
transfer,O
by,O
us,O
of,O
the,O
stock,O
of,O
the,O
related,O
guarantor,O
or,O
all,O
or,O
substantially,O
all,O
of,O
the,O
assets,O
of,O
the,O
guarantor,O
to,O
a,O
non-affiliate,O
.,O
,O
See,O
Description,O
of,O
Notes,O
Certain,O
Covenants,O
Limitations,O
on,O
Issuances,O
of,O
Guarantees,O
of,O
and,O
Pledges,O
for,O
Indebtedness,O
.,O
,O
In,O
addition,O
",",O
to,O
the,O
extent,O
that,O
a,O
court,O
were,O
to,O
find,O
that,O
the,O
issuance,O
of,O
the,O
Series,O
B,O
notes,O
violated,O
federal,O
or,O
state,O
fraudulent,O
transfer,O
or,O
conveyance,O
laws,O
",",O
in,O
the,O
manner,O
described,O
above,O
with,O
respect,O
to,O
the,O
guarantors,O
",",O
the,O
court,O
could,O
void,O
a,O
guarantor,O
s,O
obligation,O
under,O
its,O
guarantee,O
or,O
take,O
other,O
action,O
detrimental,O
to,O
the,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
such,O
as,O
avoiding,O
or,O
modify,O
our,O
obligations,O
to,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
in,O
favor,O
our,O
other,O
creditors,O
.,O
,O
To,O
the,O
extent,O
that,O
the,O
issuance,O
of,O
the,O
Series,O
B,O
notes,O
were,O
to,O
be,O
avoided,O
as,O
a,O
fraudulent,O
conveyance,O
or,O
held,O
unenforceable,O
for,O
any,O
other,O
reason,O
",",O
holders,O
of,O
the,O
Series,O
B,O
notes,O
would,O
cease,O
to,O
have,O
any,O
claim,O
against,O
us,O
and,O
would,O
be,O
creditors,O
solely,O
of,O
the,O
guarantors,O
whose,O
guarantees,O
had,O
not,O
been,O
avoided,O
or,O
held,O
unenforceable,O
.,O
,O
In,O
this,O
event,O
",",O
the,O
claims,O
of,O
the,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
against,O
us,O
would,O
be,O
subject,O
to,O
the,O
prior,O
payment,O
in,O
full,O
of,O
all,O
of,O
our,O
liabilities,O
.,O
,O
We,O
can,O
not,O
assure,O
you,O
that,O
",",O
after,O
providing,O
for,O
all,O
prior,O
claims,O
",",O
there,O
would,O
be,O
sufficient,O
assets,O
to,O
satisfy,O
the,O
claims,O
of,O
the,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
.,O
,O
There,O
is,O
currently,O
no,O
market,O
for,O
the,O
Series,O
B,O
notes,O
.,O
,O
We,O
can,O
not,O
assure,O
you,O
that,O
an,O
active,O
trading,O
market,O
will,O
develop,O
for,O
the,O
Series,O
B,O
notes,O
.,O
,O
The,O
Series,O
B,O
notes,O
are,O
a,O
new,O
issue,O
of,O
securities,O
.,O
,O
There,O
is,O
no,O
established,O
trading,O
market,O
for,O
the,O
Series,O
B,O
notes,O
.,O
,O
We,O
do,O
not,O
intend,O
to,O
apply,O
for,O
listing,O
of,O
the,O
Series,O
B,O
notes,O
on,O
any,O
securities,O
exchange,O
or,O
market,O
quotation,O
system,O
.,O
,O
The,O
liquidity,O
of,O
",",O
and,O
trading,O
market,O
for,O
",",O
the,O
Series,O
B,O
notes,O
also,O
may,O
be,O
adversely,O
affected,O
by,O
general,O
declines,O
in,O
the,O
market,O
or,O
by,O
declines,O
in,O
the,O
market,O
for,O
similar,O
securities,O
or,O
a,O
decline,O
in,O
our,O
share,O
price,O
.,O
,O
Such,O
declines,O
may,O
adversely,O
affect,O
such,O
liquidity,O
and,O
trading,O
markets,O
independent,O
of,O
our,O
financial,O
performance,O
and,O
prospects,O
.,O
,O
The,O
selected,O
consolidated,O
income,O
statement,O
data,O
for,O
the,O
years,O
ended,O
December,O
31,O
",",O
2007,O
",",O
2008,O
and,O
2009,O
and,O
the,O
selected,O
consolidated,O
balance,O
sheet,O
data,O
as,O
of,O
December,O
31,O
",",O
2008,O
and,O
2009,O
are,O
derived,O
from,O
our,O
consolidated,O
financial,O
statements,O
",",O
which,O
are,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
from,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
.,O
,O
The,O
selected,O
consolidated,O
income,O
statement,O
data,O
for,O
the,O
years,O
ended,O
December,O
31,O
",",O
2005,O
and,O
2006,O
and,O
the,O
selected,O
consolidated,O
balance,O
sheet,O
data,O
as,O
of,O
December,O
31,O
",",O
2005,O
",",O
2006,O
and,O
2007,O
are,O
derived,O
from,O
our,O
audited,O
consolidated,O
financial,O
statements,O
as,O
of,O
and,O
for,O
such,O
years,O
",",O
which,O
are,O
not,O
included,O
in,O
or,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
.,O
,O
This,O
selected,O
consolidated,O
financial,O
and,O
operating,O
data,O
should,O
be,O
read,O
in,O
conjunction,O
with,O
Management,O
s,O
Discussion,O
and,O
Analysis,O
of,O
Financial,O
Condition,O
and,O
Results,O
of,O
Operations,O
and,O
our,O
consolidated,O
financial,O
statements,O
and,O
the,O
related,O
notes,O
thereto,O
",",O
which,O
are,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
from,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
.,O
,O
We,O
have,O
accounted,O
for,O
all,O
of,O
our,O
dealership,O
acquisitions,O
using,O
the,O
purchase,O
method,O
of,O
accounting,O
and,O
",",O
as,O
a,O
result,O
",",O
we,O
do,O
not,O
include,O
in,O
our,O
consolidated,O
financial,O
statements,O
the,O
results,O
of,O
operations,O
of,O
acquired,O
dealerships,O
prior,O
to,O
the,O
date,O
they,O
were,O
acquired,O
.,O
,O
The,O
Selected,O
Consolidated,O
Financial,O
and,O
Operating,O
Data,O
discussed,O
below,O
reflects,O
the,O
results,O
of,O
operations,O
and,O
financial,O
position,O
of,O
each,O
of,O
the,O
dealerships,O
acquired,O
prior,O
to,O
December,O
31,O
",",O
2009,O
.,O
,O
As,O
a,O
result,O
of,O
the,O
effects,O
of,O
our,O
acquisitions,O
and,O
other,O
potential,O
factors,O
in,O
the,O
future,O
",",O
the,O
Selected,O
Consolidated,O
Financial,O
and,O
Operating,O
Data,O
set,O
forth,O
below,O
is,O
not,O
necessarily,O
indicative,O
of,O
our,O
results,O
of,O
operations,O
and,O
financial,O
position,O
in,O
the,O
future,O
or,O
the,O
results,O
of,O
operations,O
and,O
financial,O
position,O
that,O
would,O
have,O
resulted,O
had,O
such,O
acquisitions,O
occurred,O
at,O
the,O
beginning,O
of,O
the,O
periods,O
presented,O
below,O
.,O
,O
We,O
will,O
not,O
receive,O
any,O
proceeds,O
from,O
the,O
issuance,O
of,O
Series,O
B,O
notes,O
in,O
the,O
exchange,O
offer,O
.,O
,O
The,O
Series,O
B,O
notes,O
will,O
evidence,O
the,O
same,O
debt,O
as,O
the,O
Series,O
A,O
notes,O
tendered,O
in,O
exchange,O
for,O
the,O
Series,O
B,O
notes,O
.,O
,O
The,O
Series,O
A,O
notes,O
exchanged,O
for,O
Series,O
B,O
notes,O
in,O
this,O
exchange,O
offer,O
will,O
be,O
retired,O
and,O
canceled,O
.,O
,O
Accordingly,O
",",O
the,O
issuance,O
of,O
the,O
Series,O
B,O
notes,O
will,O
not,O
result,O
in,O
any,O
change,O
in,O
our,O
indebtedness,O
.,O
,O
The,O
net,O
proceeds,O
of,O
the,O
Series,O
A,O
notes,O
was,O
approximately,O
$,O
203.2,O
million,O
after,O
deducting,O
the,O
initial,O
purchasers,O
discount,O
and,O
estimated,O
expenses,O
related,O
to,O
the,O
issuance,O
of,O
the,O
Series,O
A,O
notes,O
.,O
,O
The,O
net,O
proceeds,O
from,O
the,O
sale,O
of,O
the,O
Series,O
A,O
notes,O
will,O
be,O
used,O
",",O
together,O
with,O
cash,O
on,O
hand,O
",",O
to,O
redeem,O
$,O
200.0,O
million,O
aggregate,O
principal,O
amount,O
of,O
our,O
8.625,O
%,O
Notes,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
our,O
cash,O
and,O
capitalization,O
as,O
of,O
December,O
31,O
",",O
2009,O
:,O
,O
This,O
table,O
should,O
be,O
read,O
in,O
conjunction,O
with,O
the,O
audited,O
consolidated,O
financial,O
statements,O
(,O
including,O
the,O
notes,O
thereto,O
),O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
.,O
,O
We,O
issued,O
the,O
Series,O
A,O
notes,O
that,O
are,O
subject,O
to,O
this,O
exchange,O
offer,O
on,O
March,O
12,O
",",O
2010,O
in,O
a,O
transaction,O
exempt,O
from,O
the,O
registration,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Simultaneously,O
with,O
the,O
sale,O
of,O
the,O
Series,O
A,O
notes,O
that,O
are,O
subject,O
to,O
this,O
exchange,O
offer,O
",",O
we,O
entered,O
into,O
a,O
registration,O
rights,O
agreement,O
with,O
Banc,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
Securities,I-BUSINESS
LLC,I-BUSINESS
",",O
as,O
representative,O
of,O
the,O
initial,O
purchasers,O
",",O
under,O
which,O
we,O
agreed,O
to,O
offer,O
to,O
exchange,O
the,O
Series,O
A,O
notes,O
for,O
publicly,O
tradeable,O
notes,O
having,O
identical,O
terms,O
to,O
those,O
of,O
the,O
Series,O
A,O
notes,O
.,O
,O
The,O
exchange,O
offer,O
being,O
conducted,O
with,O
this,O
prospectus,O
",",O
if,O
consummated,O
within,O
the,O
required,O
time,O
period,O
",",O
will,O
satisfy,O
our,O
obligations,O
under,O
the,O
registration,O
rights,O
agreement,O
except,O
in,O
limited,O
circumstances,O
.,O
,O
This,O
prospectus,O
",",O
together,O
with,O
the,O
related,O
letter,O
of,O
transmittal,O
",",O
is,O
being,O
sent,O
to,O
all,O
beneficial,O
holders,O
of,O
Series,O
A,O
notes,O
known,O
to,O
us,O
.,O
,O
Promptly,O
after,O
this,O
registration,O
statement,O
has,O
been,O
declared,O
effective,O
",",O
we,O
will,O
offer,O
the,O
Series,O
B,O
notes,O
in,O
exchange,O
for,O
surrender,O
of,O
the,O
Series,O
A,O
notes,O
.,O
,O
We,O
will,O
keep,O
the,O
exchange,O
offer,O
open,O
for,O
not,O
less,O
than,O
30,O
days,O
(,O
or,O
longer,O
if,O
required,O
by,O
applicable,O
law,O
),O
after,O
the,O
date,O
notice,O
of,O
the,O
exchange,O
offer,O
is,O
mailed,O
to,O
the,O
holders,O
of,O
the,O
Series,O
A,O
notes,O
.,O
,O
For,O
each,O
Series,O
A,O
note,O
validly,O
tendered,O
to,O
us,O
pursuant,O
to,O
the,O
exchange,O
offer,O
and,O
not,O
withdrawn,O
by,O
the,O
holder,O
thereof,O
",",O
the,O
holder,O
of,O
each,O
Series,O
A,O
note,O
will,O
receive,O
a,O
Series,O
B,O
note,O
having,O
a,O
principal,O
amount,O
equal,O
to,O
that,O
of,O
the,O
tendered,O
Series,O
A,O
note,O
.,O
,O
Interest,O
on,O
each,O
Series,O
B,O
note,O
will,O
accrue,O
from,O
the,O
last,O
date,O
on,O
which,O
interest,O
was,O
paid,O
on,O
the,O
tendered,O
Series,O
A,O
note,O
in,O
exchange,O
therefor,O
or,O
",",O
if,O
no,O
interest,O
has,O
been,O
paid,O
on,O
the,O
Series,O
A,O
note,O
",",O
from,O
March,O
12,O
",",O
2010,O
.,O
,O
Based,O
on,O
an,O
interpretation,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
by,O
the,O
staff,O
of,O
the,O
Commission,O
set,O
forth,O
in,O
several,O
no,O
action,O
letters,O
to,O
third,O
parties,O
",",O
and,O
subject,O
to,O
the,O
immediately,O
following,O
sentence,O
",",O
we,O
believe,O
that,O
the,O
Series,O
B,O
notes,O
issued,O
pursuant,O
to,O
the,O
exchange,O
offer,O
may,O
be,O
offered,O
for,O
resale,O
",",O
resold,O
and,O
otherwise,O
transferred,O
by,O
holders,O
thereof,O
without,O
further,O
compliance,O
with,O
the,O
registration,O
and,O
prospectus,O
delivery,O
provisions,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
However,O
",",O
any,O
purchaser,O
of,O
Series,O
A,O
notes,O
who,O
is,O
an,O
affiliate,O
of,O
Sonic,I-BUSINESS
(,O
within,O
the,O
meaning,O
of,O
Rule,O
405,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
or,O
who,O
intends,O
to,O
participate,O
in,O
the,O
exchange,O
offer,O
for,O
the,O
purpose,O
of,O
distributing,O
the,O
Series,O
B,O
notes,O
(,O
a,O
),O
will,O
not,O
be,O
able,O
to,O
rely,O
on,O
the,O
interpretation,O
by,O
the,O
staff,O
of,O
the,O
Commission,O
set,O
forth,O
in,O
the,O
no-action,O
letters,O
of,O
the,O
Commissions,O
staff,O
",",O
(,O
b,O
),O
will,O
not,O
be,O
able,O
to,O
tender,O
Series,O
A,O
notes,O
in,O
the,O
exchange,O
offer,O
and,O
(,O
c,O
),O
must,O
comply,O
with,O
the,O
registration,O
and,O
prospectus,O
delivery,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
in,O
connection,O
with,O
any,O
sale,O
or,O
transfer,O
of,O
the,O
Series,O
A,O
notes,O
",",O
unless,O
such,O
sale,O
or,O
transfer,O
is,O
made,O
pursuant,O
to,O
an,O
exemption,O
from,O
such,O
requirements,O
.,O
,O
In,O
addition,O
",",O
in,O
connection,O
with,O
any,O
resales,O
of,O
Series,O
B,O
notes,O
",",O
any,O
broker/dealer,O
(,O
a,O
Participating,O
Broker-Dealer,O
),O
who,O
acquired,O
the,O
Series,O
A,O
notes,O
for,O
its,O
own,O
account,O
as,O
a,O
result,O
of,O
market-making,O
activities,O
or,O
other,O
trading,O
activities,O
must,O
deliver,O
a,O
prospectus,O
meeting,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
The,O
Commission,O
has,O
taken,O
the,O
position,O
that,O
Participating,O
Broker-Dealers,O
may,O
fulfill,O
their,O
prospectus,O
delivery,O
requirements,O
with,O
respect,O
to,O
the,O
Series,O
B,O
notes,O
(,O
other,O
than,O
a,O
resale,O
of,O
an,O
unsold,O
allotment,O
from,O
the,O
original,O
sale,O
of,O
the,O
Series,O
A,O
notes,O
),O
with,O
the,O
prospectus,O
contained,O
in,O
this,O
Exchange,O
Offer,O
Registration,O
Statement,O
.,O
,O
We,O
will,O
allow,O
Participating,O
Broker-Dealers,O
and,O
other,O
persons,O
",",O
if,O
any,O
",",O
subject,O
to,O
similar,O
prospectus,O
delivery,O
requirements,O
to,O
use,O
the,O
prospectus,O
contained,O
in,O
the,O
Exchange,O
Offer,O
Registration,O
Statement,O
in,O
connection,O
with,O
the,O
resale,O
of,O
such,O
Series,O
B,O
notes,O
",",O
subject,O
to,O
limitations,O
set,O
forth,O
in,O
the,O
registration,O
rights,O
agreement,O
.,O
,O
If,O
any,O
changes,O
in,O
law,O
or,O
the,O
applicable,O
interpretations,O
of,O
the,O
staff,O
of,O
the,O
Commission,O
do,O
not,O
permit,O
us,O
to,O
effect,O
the,O
exchange,O
offer,O
",",O
or,O
if,O
for,O
any,O
other,O
reason,O
the,O
Exchange,O
Offer,O
Registration,O
Statement,O
is,O
not,O
consummated,O
within,O
270,O
days,O
of,O
the,O
date,O
of,O
original,O
issue,O
of,O
the,O
Series,O
A,O
notes,O
",",O
or,O
upon,O
the,O
request,O
of,O
any,O
of,O
the,O
initial,O
purchasers,O
with,O
respect,O
to,O
Series,O
A,O
notes,O
not,O
eligible,O
to,O
be,O
exchanged,O
for,O
Series,O
B,O
notes,O
",",O
or,O
if,O
a,O
holder,O
of,O
the,O
Series,O
A,O
notes,O
is,O
not,O
permitted,O
by,O
applicable,O
law,O
to,O
participate,O
in,O
the,O
exchange,O
offer,O
or,O
elects,O
to,O
participate,O
in,O
the,O
exchange,O
offer,O
but,O
does,O
not,O
receive,O
freely,O
tradable,O
Series,O
B,O
notes,O
pursuant,O
to,O
the,O
exchange,O
offer,O
(,O
other,O
than,O
due,O
solely,O
to,O
the,O
status,O
of,O
such,O
holder,O
as,O
an,O
affiliate,O
of,O
ours,O
within,O
the,O
meaning,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
we,O
will,O
",",O
at,O
our,O
cost,O
",",O
,O
If,O
we,O
file,O
a,O
shelf,O
registration,O
statement,O
",",O
we,O
will,O
notify,O
each,O
holder,O
of,O
our,O
intent,O
to,O
file,O
such,O
a,O
shelf,O
registration,O
statement,O
at,O
least,O
five,O
business,O
days,O
prior,O
to,O
such,O
filing,O
",",O
provide,O
to,O
each,O
holder,O
of,O
the,O
Series,O
A,O
notes,O
copies,O
of,O
the,O
prospectus,O
which,O
is,O
a,O
part,O
of,O
the,O
shelf,O
registration,O
statement,O
as,O
such,O
holder,O
reasonably,O
requests,O
",",O
notify,O
each,O
such,O
holder,O
when,O
the,O
shelf,O
registration,O
statement,O
for,O
the,O
Series,O
A,O
notes,O
has,O
become,O
effective,O
and,O
take,O
certain,O
other,O
actions,O
as,O
are,O
required,O
to,O
permit,O
unrestricted,O
resales,O
of,O
the,O
Series,O
A,O
notes,O
.,O
,O
A,O
holder,O
of,O
Series,O
A,O
notes,O
who,O
sells,O
such,O
Series,O
A,O
notes,O
pursuant,O
to,O
the,O
shelf,O
registration,O
statement,O
generally,O
will,O
be,O
required,O
to,O
be,O
named,O
as,O
a,O
selling,O
security,O
holder,O
in,O
the,O
related,O
prospectus,O
and,O
to,O
deliver,O
the,O
prospectus,O
to,O
purchasers,O
",",O
will,O
be,O
subject,O
to,O
certain,O
of,O
the,O
civil,O
liability,O
provisions,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
in,O
connection,O
with,O
such,O
sales,O
and,O
will,O
be,O
bound,O
by,O
the,O
provisions,O
of,O
the,O
registration,O
rights,O
agreement,O
which,O
are,O
applicable,O
to,O
such,O
a,O
holder,O
(,O
including,O
certain,O
indemnification,O
obligations,O
),O
.,O
,O
In,O
the,O
event,O
that,O
the,O
exchange,O
offer,O
is,O
not,O
consummated,O
or,O
a,O
shelf,O
registration,O
statement,O
is,O
not,O
declared,O
effective,O
",",O
in,O
either,O
case,O
",",O
on,O
or,O
prior,O
to,O
the,O
270th,O
day,O
following,O
the,O
date,O
of,O
original,O
issue,O
of,O
the,O
Series,O
A,O
notes,O
(,O
either,O
such,O
event,O
",",O
a,O
Registration,O
Default,O
),O
",",O
the,O
interest,O
rate,O
borne,O
by,O
the,O
Series,O
A,O
notes,O
will,O
be,O
increased,O
by,O
0.25,O
%,O
per,O
annum,O
upon,O
the,O
occurrence,O
of,O
each,O
Registration,O
Default,O
",",O
which,O
increased,O
rate,O
will,O
further,O
increase,O
by,O
0.25,O
%,O
each,O
90-day,O
period,O
that,O
such,O
additional,O
interest,O
continues,O
to,O
accrue,O
under,O
any,O
Registration,O
Default,O
",",O
with,O
an,O
aggregate,O
maximum,O
increase,O
in,O
the,O
interest,O
rate,O
equal,O
to,O
one,O
percent,O
(,O
1,O
%,O
),O
per,O
annum,O
.,O
,O
90,O
day,O
period,O
with,O
an,O
aggregate,O
maximum,O
increase,O
in,O
the,O
interest,O
rate,O
equal,O
to,O
one,O
(,O
1,O
%,O
),O
per,O
annum,O
.,O
,O
Following,O
the,O
cure,O
of,O
all,O
Registration,O
Defaults,O
or,O
the,O
shelf,O
registration,O
statement,O
becoming,O
usable,O
",",O
the,O
accrual,O
of,O
additional,O
interest,O
will,O
cease,O
and,O
the,O
interest,O
rate,O
will,O
revert,O
to,O
the,O
original,O
rate,O
.,O
,O
The,O
form,O
and,O
terms,O
of,O
the,O
Series,O
B,O
notes,O
are,O
identical,O
in,O
all,O
material,O
respects,O
to,O
the,O
form,O
and,O
terms,O
of,O
the,O
Series,O
A,O
notes,O
.,O
,O
The,O
Series,O
B,O
notes,O
will,O
be,O
registered,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
The,O
Series,O
A,O
notes,O
are,O
not,O
currently,O
registered,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
As,O
a,O
result,O
",",O
the,O
Series,O
B,O
notes,O
issued,O
in,O
the,O
exchange,O
offer,O
will,O
not,O
bear,O
legends,O
restricting,O
their,O
transfer,O
and,O
will,O
not,O
contain,O
the,O
registration,O
rights,O
and,O
liquidated,O
damage,O
provisions,O
contained,O
in,O
the,O
Series,O
A,O
notes,O
.,O
,O
Upon,O
the,O
completion,O
of,O
the,O
exchange,O
offer,O
",",O
you,O
will,O
not,O
be,O
entitled,O
to,O
any,O
liquidated,O
damages,O
on,O
your,O
Series,O
A,O
notes,O
or,O
any,O
further,O
registration,O
rights,O
under,O
the,O
registration,O
rights,O
agreement,O
except,O
under,O
limited,O
circumstances,O
.,O
,O
The,O
exchange,O
offer,O
is,O
not,O
extended,O
to,O
holders,O
of,O
Series,O
A,O
notes,O
in,O
any,O
jurisdiction,O
where,O
the,O
exchange,O
offer,O
does,O
not,O
comply,O
with,O
the,O
securities,O
or,O
blue,O
sky,O
laws,O
of,O
that,O
jurisdiction,O
.,O
,O
In,O
this,O
section,O
entitled,O
The,O
Exchange,O
Offer,O
",",O
the,O
term,O
holder,O
means,O
:,O
,O
We,O
are,O
offering,O
to,O
exchange,O
$,O
210.0,O
million,O
in,O
aggregate,O
principal,O
amount,O
of,O
our,O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2018,O
",",O
Series,O
B,O
that,O
have,O
been,O
registered,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
for,O
a,O
like,O
principal,O
amount,O
of,O
our,O
outstanding,O
unregistered,O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2018,O
",",O
Series,O
A,O
.,O
,O
Upon,O
the,O
terms,O
and,O
subject,O
to,O
the,O
conditions,O
set,O
forth,O
in,O
this,O
prospectus,O
and,O
in,O
the,O
accompanying,O
letter,O
of,O
transmittal,O
",",O
we,O
will,O
accept,O
all,O
Series,O
A,O
notes,O
validly,O
tendered,O
and,O
not,O
withdrawn,O
before,O
5:00,O
p.m.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
the,O
expiration,O
date,O
of,O
the,O
exchange,O
offer,O
.,O
,O
We,O
will,O
issue,O
$,O
"1,000",O
principal,O
amount,O
of,O
Series,O
B,O
notes,O
in,O
exchange,O
for,O
each,O
$,O
"1,000",O
principal,O
amount,O
of,O
outstanding,O
Series,O
A,O
notes,O
we,O
accept,O
in,O
the,O
exchange,O
offer,O
.,O
,O
You,O
may,O
tender,O
some,O
or,O
all,O
of,O
your,O
Series,O
A,O
notes,O
under,O
the,O
exchange,O
offer,O
.,O
,O
The,O
exchange,O
offer,O
is,O
not,O
conditioned,O
upon,O
any,O
minimum,O
amount,O
of,O
Series,O
A,O
notes,O
being,O
tendered,O
.,O
,O
The,O
form,O
and,O
terms,O
of,O
the,O
Series,O
B,O
notes,O
will,O
be,O
the,O
same,O
as,O
the,O
form,O
and,O
terms,O
of,O
the,O
Series,O
A,O
notes,O
",",O
except,O
that,O
:,O
,O
The,O
Series,O
B,O
notes,O
will,O
evidence,O
the,O
same,O
debt,O
as,O
the,O
Series,O
A,O
notes,O
and,O
will,O
be,O
issued,O
under,O
",",O
and,O
be,O
entitled,O
to,O
the,O
benefits,O
of,O
",",O
the,O
indenture,O
",",O
as,O
supplemented,O
",",O
governing,O
the,O
Series,O
A,O
notes,O
.,O
,O
The,O
Series,O
B,O
notes,O
will,O
accrue,O
interest,O
from,O
the,O
most,O
recent,O
date,O
to,O
which,O
interest,O
has,O
been,O
paid,O
or,O
",",O
if,O
no,O
interest,O
has,O
been,O
paid,O
",",O
from,O
date,O
of,O
issuance,O
of,O
the,O
Series,O
A,O
notes,O
.,O
,O
Accordingly,O
",",O
registered,O
holders,O
of,O
Series,O
B,O
notes,O
on,O
the,O
record,O
date,O
for,O
the,O
first,O
interest,O
payment,O
date,O
following,O
the,O
completion,O
of,O
the,O
exchange,O
offer,O
will,O
receive,O
interest,O
accrued,O
from,O
the,O
most,O
recent,O
date,O
to,O
which,O
interest,O
has,O
been,O
paid,O
or,O
",",O
if,O
no,O
interest,O
has,O
been,O
paid,O
",",O
from,O
the,O
date,O
of,O
issuance,O
of,O
the,O
Series,O
A,O
notes,O
.,O
,O
However,O
",",O
if,O
that,O
record,O
date,O
occurs,O
prior,O
to,O
completion,O
of,O
the,O
exchange,O
offer,O
",",O
then,O
the,O
interest,O
payable,O
on,O
the,O
first,O
interest,O
payment,O
date,O
following,O
the,O
completion,O
of,O
the,O
exchange,O
offer,O
will,O
be,O
paid,O
to,O
the,O
registered,O
holders,O
of,O
the,O
Series,O
A,O
notes,O
on,O
that,O
record,O
date,O
.,O
,O
In,O
connection,O
with,O
the,O
exchange,O
offer,O
",",O
you,O
do,O
not,O
have,O
any,O
appraisal,O
or,O
dissenters,O
rights,O
under,O
the,O
Delaware,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
or,O
the,O
indenture,O
",",O
as,O
supplemented,O
.,O
,O
We,O
intend,O
to,O
conduct,O
the,O
exchange,O
offer,O
in,O
accordance,O
with,O
the,O
registration,O
rights,O
agreement,O
and,O
the,O
applicable,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
and,O
the,O
rules,O
and,O
regulations,O
of,O
the,O
SEC,I-GOVERNMENT
.,O
,O
We,O
will,O
be,O
deemed,O
to,O
have,O
accepted,O
validly,O
tendered,O
Series,O
A,O
notes,O
when,O
",",O
as,O
and,O
if,O
we,O
have,O
given,O
oral,O
or,O
written,O
notice,O
of,O
our,O
acceptance,O
to,O
the,O
exchange,O
agent,O
.,O
,O
The,O
exchange,O
agent,O
will,O
act,O
as,O
agent,O
for,O
the,O
tendering,O
holders,O
for,O
the,O
purpose,O
of,O
receiving,O
the,O
Series,O
B,O
notes,O
from,O
us,O
.,O
,O
If,O
we,O
do,O
not,O
accept,O
any,O
tendered,O
notes,O
because,O
of,O
an,O
invalid,O
tender,O
or,O
for,O
any,O
other,O
reason,O
",",O
we,O
will,O
return,O
certificates,O
for,O
any,O
unaccepted,O
Series,O
A,O
notes,O
without,O
expense,O
to,O
the,O
tendering,O
holder,O
as,O
promptly,O
as,O
practicable,O
after,O
the,O
expiration,O
date,O
.,O
,O
The,O
exchange,O
offer,O
will,O
expire,O
at,O
5:00,O
p.m.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
",",O
2010,O
",",O
unless,O
we,O
",",O
in,O
our,O
sole,O
discretion,O
",",O
extend,O
the,O
exchange,O
offer,O
.,O
,O
The,O
term,O
expiration,O
date,O
means,O
",",O
2010,O
",",O
unless,O
we,O
extend,O
the,O
exchange,O
offer,O
",",O
in,O
which,O
case,O
the,O
term,O
expiration,O
date,O
means,O
the,O
latest,O
date,O
to,O
which,O
the,O
exchange,O
offer,O
is,O
extended,O
.,O
,O
If,O
we,O
determine,O
to,O
extend,O
the,O
exchange,O
offer,O
",",O
we,O
will,O
notify,O
the,O
exchange,O
agent,O
of,O
any,O
extension,O
by,O
oral,O
or,O
written,O
notice,O
and,O
give,O
each,O
registered,O
holder,O
notice,O
of,O
the,O
extension,O
by,O
means,O
of,O
a,O
press,O
release,O
or,O
other,O
public,O
announcement,O
before,O
9:00,O
a.m.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
the,O
next,O
business,O
day,O
after,O
the,O
previously,O
scheduled,O
expiration,O
date,O
.,O
,O
We,O
reserve,O
the,O
right,O
",",O
in,O
our,O
sole,O
discretion,O
",",O
to,O
delay,O
accepting,O
any,O
Series,O
A,O
notes,O
",",O
to,O
extend,O
the,O
exchange,O
offer,O
or,O
to,O
amend,O
or,O
terminate,O
the,O
exchange,O
offer,O
if,O
any,O
of,O
the,O
conditions,O
described,O
below,O
under,O
—Conditions,O
have,O
not,O
been,O
satisfied,O
or,O
waived,O
by,O
giving,O
oral,O
or,O
written,O
notice,O
to,O
the,O
exchange,O
agent,O
of,O
the,O
delay,O
",",O
extension,O
",",O
amendment,O
or,O
termination,O
.,O
,O
Further,O
",",O
we,O
reserve,O
the,O
right,O
",",O
in,O
our,O
sole,O
discretion,O
",",O
to,O
amend,O
the,O
terms,O
of,O
the,O
exchange,O
offer,O
in,O
any,O
manner,O
.,O
,O
We,O
will,O
notify,O
you,O
as,O
promptly,O
as,O
practicable,O
of,O
any,O
extension,O
",",O
amendment,O
or,O
termination,O
.,O
,O
Any,O
delay,O
in,O
acceptance,O
",",O
extension,O
",",O
termination,O
or,O
amendment,O
will,O
be,O
followed,O
as,O
promptly,O
as,O
practicable,O
by,O
oral,O
or,O
written,O
notice,O
.,O
,O
If,O
the,O
exchange,O
offer,O
is,O
amended,O
in,O
a,O
manner,O
determined,O
by,O
us,O
to,O
constitute,O
a,O
material,O
change,O
",",O
we,O
will,O
promptly,O
disclosure,O
the,O
amendment,O
in,O
a,O
manner,O
reasonably,O
calculated,O
to,O
inform,O
the,O
holders,O
of,O
the,O
Series,O
A,O
notes,O
of,O
the,O
amendment,O
.,O
,O
Depending,O
upon,O
the,O
significance,O
of,O
the,O
amendment,O
",",O
we,O
may,O
extend,O
the,O
exchange,O
offer,O
if,O
it,O
otherwise,O
would,O
expire,O
during,O
the,O
extension,O
period,O
.,O
,O
Without,O
limiting,O
the,O
manner,O
in,O
which,O
we,O
may,O
choose,O
to,O
make,O
a,O
public,O
announcement,O
of,O
any,O
extension,O
",",O
amendment,O
or,O
termination,O
of,O
the,O
exchange,O
offer,O
",",O
we,O
will,O
not,O
be,O
obligated,O
to,O
publish,O
",",O
advertise,O
or,O
otherwise,O
communicate,O
any,O
announcement,O
",",O
other,O
than,O
by,O
making,O
a,O
timely,O
release,O
to,O
an,O
appropriate,O
news,O
agency,O
.,O
,O
Any,O
tender,O
of,O
Series,O
A,O
notes,O
that,O
is,O
not,O
withdrawn,O
prior,O
to,O
the,O
expiration,O
date,O
will,O
constitute,O
a,O
binding,O
agreement,O
between,O
the,O
tendering,O
holder,O
and,O
us,O
upon,O
the,O
terms,O
and,O
subject,O
to,O
the,O
conditions,O
set,O
forth,O
in,O
this,O
prospectus,O
and,O
in,O
the,O
accompanying,O
letter,O
of,O
transmittal,O
.,O
,O
A,O
holder,O
who,O
wishes,O
to,O
tender,O
Series,O
A,O
notes,O
in,O
the,O
exchange,O
offer,O
must,O
do,O
either,O
of,O
the,O
following,O
on,O
or,O
prior,O
to,O
5:00,O
p.m.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
the,O
expiration,O
date,O
:,O
,O
In,O
addition,O
",",O
one,O
of,O
the,O
following,O
must,O
occur,O
on,O
or,O
prior,O
to,O
5:00,O
p.m.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
the,O
expiration,O
date,O
:,O
,O
The,O
term,O
agent,O
s,O
message,O
means,O
a,O
message,O
",",O
transmitted,O
by,O
the,O
book-entry,O
transfer,O
facility,O
to,O
and,O
received,O
by,O
the,O
exchange,O
agent,O
and,O
forming,O
a,O
part,O
of,O
the,O
book-entry,O
confirmation,O
",",O
which,O
states,O
that,O
the,O
book-entry,O
transfer,O
facility,O
has,O
received,O
an,O
express,O
acknowledgment,O
from,O
the,O
tendering,O
participant,O
stating,O
that,O
the,O
participant,O
has,O
received,O
and,O
agrees,O
to,O
be,O
bound,O
by,O
the,O
letter,O
of,O
transmittal,O
and,O
that,O
we,O
may,O
enforce,O
the,O
letter,O
of,O
transmittal,O
against,O
the,O
participant,O
.,O
,O
The,O
tender,O
by,O
a,O
holder,O
of,O
Series,O
A,O
notes,O
will,O
constitute,O
an,O
agreement,O
between,O
the,O
holder,O
and,O
Sonic,I-BUSINESS
in,O
accordance,O
with,O
the,O
terms,O
and,O
subject,O
to,O
the,O
conditions,O
set,O
forth,O
in,O
this,O
prospectus,O
and,O
in,O
the,O
letter,O
of,O
transmittal,O
.,O
,O
Only,O
a,O
holder,O
of,O
Series,O
A,O
notes,O
may,O
tender,O
Series,O
A,O
notes,O
in,O
the,O
exchange,O
offer,O
.,O
,O
Holders,O
may,O
also,O
request,O
their,O
respective,O
duly,O
authorized,O
brokers,O
",",O
dealers,O
",",O
commercial,O
banks,O
",",O
trust,O
companies,O
or,O
nominees,O
to,O
effect,O
a,O
tender,O
for,O
the,O
holders,O
.,O
,O
Delivery,O
of,O
all,O
documents,O
must,O
be,O
made,O
to,O
the,O
exchange,O
agent,O
at,O
the,O
address,O
set,O
forth,O
below,O
.,O
,O
Do,O
not,O
send,O
letters,O
of,O
transmittal,O
or,O
Series,O
A,O
notes,O
to,O
us,O
.,O
,O
The,O
method,O
of,O
delivery,O
of,O
Series,O
A,O
notes,O
",",O
the,O
letter,O
of,O
transmittal,O
and,O
all,O
other,O
required,O
documents,O
to,O
the,O
exchange,O
agent,O
is,O
at,O
your,O
election,O
and,O
risk,O
.,O
,O
Rather,O
than,O
mail,O
these,O
items,O
",",O
we,O
recommend,O
that,O
you,O
use,O
an,O
overnight,O
or,O
hand,O
delivery,O
service,O
.,O
,O
In,O
all,O
cases,O
",",O
you,O
should,O
allow,O
sufficient,O
time,O
to,O
assure,O
timely,O
delivery,O
to,O
the,O
exchange,O
agent,O
before,O
the,O
expiration,O
date,O
.,O
,O
Generally,O
",",O
an,O
eligible,O
institution,O
(,O
as,O
defined,O
below,O
),O
must,O
guarantee,O
signatures,O
on,O
a,O
letter,O
of,O
transmittal,O
or,O
a,O
notice,O
of,O
withdrawal,O
unless,O
the,O
Series,O
A,O
notes,O
are,O
tendered,O
:,O
,O
If,O
signatures,O
on,O
a,O
letter,O
of,O
transmittal,O
or,O
a,O
notice,O
of,O
withdrawal,O
are,O
required,O
to,O
be,O
guaranteed,O
",",O
the,O
guarantee,O
must,O
be,O
by,O
a,O
firm,O
(,O
each,O
an,O
eligible,O
institution,O
),O
which,O
is,O
:,O
,O
If,O
the,O
letter,O
of,O
transmittal,O
is,O
signed,O
by,O
a,O
person,O
other,O
than,O
the,O
registered,O
holder,O
of,O
any,O
outstanding,O
Series,O
A,O
notes,O
",",O
the,O
Series,O
A,O
notes,O
must,O
be,O
endorsed,O
or,O
accompanied,O
by,O
appropriate,O
powers,O
of,O
attorney,O
.,O
,O
The,O
power,O
of,O
attorney,O
must,O
be,O
signed,O
by,O
the,O
registered,O
holder,O
exactly,O
as,O
the,O
registered,O
holder,O
(,O
s,O
),O
name,O
(,O
s,O
),O
appear,O
(,O
s,O
),O
on,O
the,O
Series,O
A,O
notes,O
and,O
an,O
eligible,O
institution,O
must,O
guarantee,O
the,O
signature,O
on,O
the,O
power,O
of,O
attorney,O
.,O
,O
If,O
the,O
letter,O
of,O
transmittal,O
or,O
any,O
Series,O
A,O
notes,O
or,O
powers,O
of,O
attorney,O
are,O
signed,O
by,O
trustees,O
",",O
executors,O
",",O
administrators,O
",",O
guardians,O
",",O
attorneys-in-fact,O
",",O
officers,O
of,O
corporations,O
or,O
others,O
acting,O
in,O
a,O
fiduciary,O
or,O
representative,O
capacity,O
",",O
these,O
persons,O
should,O
so,O
indicate,O
when,O
signing,O
.,O
,O
Unless,O
waived,O
by,O
us,O
",",O
they,O
should,O
also,O
submit,O
evidence,O
satisfactory,O
to,O
us,O
of,O
their,O
authority,O
to,O
so,O
act,O
.,O
,O
If,O
you,O
wish,O
to,O
tender,O
Series,O
A,O
notes,O
that,O
are,O
registered,O
in,O
the,O
name,O
of,O
a,O
broker,O
",",O
dealer,O
",",O
commercial,O
bank,O
",",O
trust,O
company,O
or,O
other,O
nominee,O
",",O
you,O
should,O
promptly,O
instruct,O
the,O
registered,O
holder,O
to,O
tender,O
on,O
your,O
behalf,O
.,O
,O
If,O
you,O
wish,O
to,O
tender,O
on,O
your,O
behalf,O
",",O
you,O
must,O
",",O
before,O
completing,O
the,O
procedures,O
for,O
tendering,O
Series,O
A,O
notes,O
",",O
either,O
register,O
ownership,O
of,O
the,O
Series,O
A,O
notes,O
in,O
your,O
name,O
or,O
obtain,O
a,O
properly,O
completed,O
bond,O
power,O
from,O
the,O
registered,O
holder,O
.,O
,O
The,O
transfer,O
of,O
registered,O
ownership,O
may,O
take,O
considerable,O
time,O
.,O
,O
We,O
will,O
determine,O
in,O
our,O
sole,O
discretion,O
all,O
questions,O
as,O
to,O
the,O
validity,O
",",O
form,O
",",O
eligibility,O
",",O
including,O
time,O
of,O
receipt,O
",",O
and,O
acceptance,O
of,O
Series,O
A,O
notes,O
tendered,O
for,O
exchange,O
.,O
,O
Our,O
determination,O
will,O
be,O
final,O
and,O
binding,O
on,O
all,O
parties,O
.,O
,O
We,O
reserve,O
the,O
absolute,O
right,O
to,O
reject,O
any,O
and,O
all,O
tenders,O
of,O
Series,O
A,O
notes,O
not,O
properly,O
tendered,O
or,O
Series,O
A,O
notes,O
our,O
acceptance,O
of,O
which,O
might,O
",",O
in,O
the,O
judgment,O
of,O
our,O
counsel,O
",",O
be,O
unlawful,O
.,O
,O
We,O
also,O
reserve,O
the,O
absolute,O
right,O
to,O
waive,O
any,O
defects,O
",",O
irregularities,O
or,O
conditions,O
of,O
tender,O
as,O
to,O
any,O
particular,O
Series,O
A,O
notes,O
.,O
,O
Our,O
interpretation,O
of,O
the,O
terms,O
and,O
conditions,O
of,O
the,O
exchange,O
offer,O
",",O
including,O
the,O
instructions,O
in,O
the,O
letter,O
of,O
transmittal,O
",",O
will,O
be,O
final,O
and,O
binding,O
on,O
all,O
parties,O
.,O
,O
Unless,O
waived,O
",",O
any,O
defects,O
or,O
irregularities,O
in,O
connection,O
with,O
tenders,O
of,O
Series,O
A,O
notes,O
must,O
be,O
cured,O
within,O
the,O
time,O
period,O
we,O
determine,O
.,O
,O
Neither,O
we,O
",",O
the,O
exchange,O
agent,O
nor,O
any,O
other,O
person,O
has,O
any,O
duty,O
to,O
give,O
notification,O
of,O
defects,O
or,O
irregularities,O
with,O
respect,O
to,O
tenders,O
of,O
Series,O
A,O
notes,O
.,O
,O
In,O
addition,O
",",O
neither,O
we,O
",",O
the,O
exchange,O
agent,O
nor,O
any,O
other,O
person,O
will,O
incur,O
any,O
liability,O
for,O
failure,O
to,O
give,O
you,O
notification,O
of,O
defects,O
or,O
irregularities,O
with,O
respect,O
to,O
tenders,O
of,O
your,O
Series,O
A,O
notes,O
.,O
,O
By,O
tendering,O
",",O
you,O
will,O
represent,O
to,O
us,O
that,O
",",O
among,O
other,O
things,O
:,O
,O
If,O
you,O
or,O
the,O
person,O
receiving,O
your,O
Series,O
B,O
notes,O
is,O
our,O
affiliate,O
",",O
as,O
defined,O
under,O
Rule,O
405,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
or,O
is,O
participating,O
in,O
the,O
exchange,O
offer,O
for,O
the,O
purpose,O
of,O
distributing,O
the,O
Series,O
B,O
notes,O
",",O
you,O
or,O
that,O
other,O
person,O
(,O
1,O
),O
can,O
not,O
rely,O
on,O
the,O
applicable,O
interpretations,O
of,O
the,O
staff,O
of,O
the,O
SEC,I-GOVERNMENT
and,O
(,O
2,O
),O
must,O
comply,O
with,O
the,O
registration,O
and,O
prospectus,O
delivery,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
in,O
any,O
resale,O
transaction,O
.,O
,O
If,O
you,O
are,O
a,O
broker-dealer,O
and,O
you,O
will,O
receive,O
Series,O
B,O
notes,O
for,O
your,O
own,O
account,O
in,O
exchange,O
for,O
Series,O
A,O
notes,O
",",O
where,O
such,O
Series,O
A,O
notes,O
were,O
acquired,O
as,O
a,O
result,O
of,O
market-making,O
activities,O
or,O
other,O
trading,O
activities,O
",",O
you,O
must,O
acknowledge,O
that,O
you,O
will,O
deliver,O
a,O
prospectus,O
in,O
connection,O
with,O
any,O
resale,O
of,O
the,O
Series,O
B,O
notes,O
.,O
,O
Upon,O
satisfaction,O
of,O
all,O
conditions,O
to,O
the,O
exchange,O
offer,O
",",O
we,O
will,O
accept,O
",",O
promptly,O
after,O
the,O
expiration,O
date,O
",",O
all,O
Series,O
A,O
notes,O
properly,O
tendered,O
and,O
issue,O
the,O
Series,O
B,O
notes,O
.,O
,O
For,O
purposes,O
of,O
the,O
exchange,O
offer,O
",",O
we,O
shall,O
be,O
deemed,O
to,O
have,O
accepted,O
properly,O
tendered,O
Series,O
A,O
notes,O
for,O
exchange,O
when,O
",",O
as,O
and,O
if,O
we,O
have,O
given,O
oral,O
or,O
written,O
notice,O
of,O
that,O
acceptance,O
to,O
the,O
exchange,O
agent,O
.,O
,O
For,O
each,O
Series,O
A,O
note,O
accepted,O
for,O
exchange,O
",",O
you,O
will,O
receive,O
a,O
Series,O
B,O
note,O
having,O
a,O
principal,O
amount,O
equal,O
to,O
that,O
of,O
the,O
surrendered,O
Series,O
A,O
note,O
.,O
,O
In,O
all,O
cases,O
",",O
we,O
will,O
issue,O
Series,O
B,O
notes,O
for,O
Series,O
A,O
notes,O
that,O
we,O
have,O
accepted,O
for,O
exchange,O
under,O
the,O
exchange,O
offer,O
only,O
after,O
the,O
exchange,O
agent,O
timely,O
receives,O
(,O
1,O
),O
certificates,O
for,O
your,O
Series,O
A,O
notes,O
or,O
a,O
timely,O
confirmation,O
of,O
book-entry,O
transfer,O
of,O
your,O
Series,O
A,O
notes,O
into,O
the,O
exchange,O
agent,O
s,O
account,O
at,O
DTC,I-BUSINESS
and,O
(,O
2,O
),O
a,O
properly,O
completed,O
and,O
duly,O
executed,O
letter,O
of,O
transmittal,O
and,O
all,O
other,O
required,O
documents,O
or,O
a,O
properly,O
transmitted,O
agent,O
s,O
message,O
.,O
,O
If,O
we,O
do,O
not,O
accept,O
any,O
tendered,O
Series,O
A,O
notes,O
for,O
any,O
reason,O
set,O
forth,O
in,O
the,O
terms,O
of,O
the,O
exchange,O
offer,O
or,O
if,O
you,O
submit,O
Series,O
A,O
notes,O
for,O
a,O
greater,O
principal,O
amount,O
than,O
you,O
desire,O
to,O
exchange,O
",",O
we,O
will,O
return,O
the,O
unaccepted,O
or,O
non-exchanged,O
Series,O
A,O
notes,O
without,O
expense,O
to,O
you,O
.,O
,O
In,O
the,O
case,O
of,O
Series,O
A,O
notes,O
tendered,O
by,O
book-entry,O
transfer,O
into,O
the,O
exchange,O
agent,O
s,O
account,O
at,O
DTC,I-BUSINESS
under,O
the,O
book-entry,O
procedures,O
described,O
below,O
",",O
we,O
will,O
credit,O
the,O
non-exchanged,O
Series,O
A,O
notes,O
to,O
your,O
account,O
maintained,O
with,O
DTC,I-BUSINESS
.,O
,O
We,O
understand,O
that,O
the,O
exchange,O
agent,O
will,O
make,O
a,O
request,O
within,O
two,O
business,O
days,O
after,O
the,O
date,O
of,O
this,O
prospectus,O
to,O
establish,O
accounts,O
for,O
the,O
Series,O
A,O
notes,O
at,O
DTC,I-BUSINESS
for,O
the,O
purpose,O
of,O
facilitating,O
the,O
exchange,O
offer,O
",",O
and,O
any,O
financial,O
institution,O
that,O
is,O
a,O
participant,O
in,O
DTC,I-BUSINESS
s,O
system,O
may,O
make,O
book-entry,O
delivery,O
of,O
Series,O
A,O
notes,O
by,O
causing,O
DTC,I-BUSINESS
to,O
transfer,O
the,O
Series,O
A,O
notes,O
into,O
the,O
exchange,O
agent,O
s,O
account,O
at,O
DTC,I-BUSINESS
in,O
accordance,O
with,O
DTC,I-BUSINESS
s,O
procedures,O
for,O
transfer,O
.,O
,O
Although,O
delivery,O
of,O
Series,O
A,O
notes,O
may,O
be,O
effected,O
through,O
book-entry,O
transfer,O
at,O
DTC,I-BUSINESS
",",O
the,O
exchange,O
agent,O
must,O
receive,O
a,O
properly,O
completed,O
and,O
duly,O
executed,O
letter,O
of,O
transmittal,O
with,O
any,O
required,O
signature,O
guarantees,O
",",O
or,O
an,O
agent,O
s,O
message,O
instead,O
of,O
a,O
letter,O
of,O
transmittal,O
",",O
and,O
all,O
other,O
required,O
documents,O
at,O
its,O
address,O
listed,O
below,O
under,O
—Exchange,O
Agent,O
on,O
or,O
before,O
the,O
expiration,O
date,O
",",O
or,O
if,O
you,O
comply,O
with,O
the,O
guaranteed,O
delivery,O
procedures,O
described,O
below,O
",",O
within,O
the,O
time,O
period,O
provided,O
under,O
those,O
procedures,O
.,O
,O
Delivery,O
of,O
documents,O
to,O
DTC,I-BUSINESS
does,O
not,O
constitute,O
delivery,O
to,O
the,O
exchange,O
agent,O
.,O
,O
If,O
you,O
wish,O
to,O
tender,O
your,O
Series,O
A,O
notes,O
and,O
your,O
Series,O
A,O
notes,O
are,O
not,O
immediately,O
available,O
",",O
or,O
you,O
can,O
not,O
deliver,O
your,O
Series,O
A,O
notes,O
",",O
the,O
letter,O
of,O
transmittal,O
or,O
any,O
other,O
required,O
documents,O
or,O
comply,O
with,O
DTC,I-BUSINESS
s,O
procedures,O
for,O
transfer,O
before,O
the,O
expiration,O
date,O
",",O
then,O
you,O
may,O
participate,O
in,O
the,O
exchange,O
offer,O
if,O
:,O
,O
You,O
may,O
withdraw,O
your,O
tender,O
of,O
Series,O
A,O
notes,O
at,O
any,O
time,O
before,O
5:00,O
p.m.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
the,O
expiration,O
date,O
of,O
the,O
exchange,O
offer,O
.,O
,O
For,O
a,O
withdrawal,O
to,O
be,O
effective,O
",",O
the,O
exchange,O
agent,O
must,O
receive,O
a,O
written,O
notice,O
of,O
withdrawal,O
at,O
its,O
address,O
listed,O
below,O
under,O
—Exchange,O
Agent,O
.,O
,O
The,O
notice,O
of,O
withdrawal,O
must,O
:,O
,O
If,O
you,O
have,O
delivered,O
or,O
otherwise,O
identified,O
to,O
the,O
exchange,O
agent,O
the,O
certificates,O
for,O
Series,O
A,O
notes,O
",",O
then,O
",",O
before,O
the,O
release,O
of,O
such,O
certificates,O
",",O
you,O
must,O
also,O
submit,O
the,O
serial,O
numbers,O
of,O
the,O
particular,O
certificates,O
to,O
be,O
withdrawn,O
and,O
a,O
signed,O
notice,O
of,O
withdrawal,O
with,O
signatures,O
guaranteed,O
by,O
an,O
eligible,O
institution,O
",",O
unless,O
the,O
holder,O
is,O
an,O
eligible,O
institution,O
.,O
,O
We,O
will,O
determine,O
in,O
our,O
sole,O
discretion,O
all,O
questions,O
as,O
to,O
the,O
validity,O
",",O
form,O
and,O
eligibility,O
",",O
including,O
time,O
of,O
receipt,O
",",O
of,O
notices,O
of,O
withdrawal,O
.,O
,O
Our,O
determination,O
will,O
be,O
final,O
and,O
binding,O
on,O
all,O
parties,O
.,O
,O
Any,O
Series,O
A,O
notes,O
so,O
withdrawn,O
will,O
be,O
deemed,O
not,O
to,O
have,O
been,O
validly,O
tendered,O
for,O
purposes,O
of,O
the,O
exchange,O
offer,O
.,O
,O
We,O
will,O
return,O
any,O
Series,O
A,O
notes,O
that,O
have,O
been,O
tendered,O
but,O
that,O
are,O
not,O
exchanged,O
for,O
any,O
reason,O
to,O
the,O
holder,O
",",O
without,O
cost,O
",",O
as,O
soon,O
as,O
practicable,O
after,O
withdrawal,O
",",O
rejection,O
of,O
tender,O
or,O
termination,O
of,O
the,O
exchange,O
offer,O
.,O
,O
In,O
the,O
case,O
of,O
Series,O
A,O
notes,O
tendered,O
by,O
book-entry,O
transfer,O
into,O
the,O
exchange,O
agent,O
s,O
account,O
at,O
DTC,I-BUSINESS
",",O
the,O
Series,O
A,O
notes,O
will,O
be,O
credited,O
to,O
an,O
account,O
maintained,O
with,O
DTC,I-BUSINESS
for,O
the,O
Series,O
A,O
notes,O
.,O
,O
You,O
may,O
retender,O
properly,O
withdrawn,O
Series,O
A,O
notes,O
by,O
following,O
one,O
of,O
the,O
procedures,O
described,O
under,O
—Procedures,O
for,O
Tendering,O
Series,O
A,O
notes,O
at,O
any,O
time,O
on,O
or,O
before,O
5:00,O
p.m.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
the,O
expiration,O
date,O
.,O
,O
Notwithstanding,O
any,O
other,O
term,O
of,O
the,O
exchange,O
offer,O
",",O
we,O
will,O
not,O
be,O
required,O
to,O
accept,O
for,O
exchange,O
",",O
or,O
exchange,O
Series,O
B,O
notes,O
for,O
",",O
any,O
Series,O
A,O
notes,O
if,O
among,O
other,O
things,O
",",O
prior,O
to,O
the,O
expiration,O
of,O
the,O
exchange,O
offer,O
:,O
,O
The,O
conditions,O
listed,O
above,O
are,O
for,O
our,O
sole,O
benefit,O
and,O
we,O
may,O
assert,O
them,O
regardless,O
of,O
the,O
circumstances,O
giving,O
rise,O
to,O
any,O
condition,O
.,O
,O
We,O
may,O
waive,O
these,O
conditions,O
in,O
our,O
discretion,O
in,O
whole,O
or,O
in,O
part,O
at,O
any,O
time,O
and,O
from,O
time,O
to,O
time,O
prior,O
to,O
the,O
expiration,O
of,O
the,O
exchange,O
offer,O
.,O
,O
If,O
we,O
fail,O
at,O
any,O
time,O
to,O
exercise,O
any,O
of,O
the,O
above,O
rights,O
",",O
the,O
failure,O
will,O
not,O
be,O
deemed,O
a,O
waiver,O
of,O
those,O
rights,O
",",O
and,O
those,O
rights,O
will,O
be,O
deemed,O
ongoing,O
rights,O
which,O
may,O
be,O
asserted,O
at,O
any,O
time,O
and,O
from,O
time,O
to,O
time,O
prior,O
to,O
the,O
expiration,O
of,O
the,O
exchange,O
offer,O
.,O
,O
All,O
conditions,O
will,O
be,O
satisfied,O
or,O
waived,O
prior,O
to,O
the,O
expiration,O
of,O
the,O
exchange,O
offer,O
.,O
,O
Bank,I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
is,O
the,O
exchange,O
agent,O
for,O
the,O
exchange,O
offer,O
.,O
,O
You,O
should,O
direct,O
questions,O
and,O
requests,O
for,O
assistance,O
",",O
requests,O
for,O
additional,O
copies,O
of,O
this,O
prospectus,O
",",O
the,O
letter,O
of,O
transmittal,O
or,O
the,O
notice,O
of,O
guaranteed,O
delivery,O
to,O
the,O
following,O
address,O
for,O
the,O
exchange,O
agent,O
:,O
,O
If,O
you,O
deliver,O
letters,O
of,O
transmittal,O
or,O
any,O
other,O
required,O
documents,O
to,O
an,O
address,O
or,O
facsimile,O
number,O
other,O
than,O
those,O
listed,O
above,O
",",O
your,O
tender,O
is,O
invalid,O
.,O
,O
Delivery,O
of,O
the,O
letter,O
of,O
transmittal,O
to,O
an,O
address,O
other,O
than,O
as,O
listed,O
above,O
or,O
transmission,O
via,O
facsimile,O
other,O
than,O
as,O
listed,O
above,O
will,O
not,O
constitute,O
a,O
valid,O
delivery,O
of,O
the,O
letter,O
of,O
transmittal,O
.,O
,O
Originals,O
of,O
all,O
documents,O
sent,O
by,O
facsimile,O
should,O
be,O
sent,O
promptly,O
be,O
registered,O
or,O
certified,O
mail,O
",",O
by,O
hand,O
or,O
overnight,O
delivery,O
service,O
.,O
,O
The,O
exchange,O
agent,O
is,O
also,O
the,O
trustee,O
under,O
the,O
indenture,O
governing,O
the,O
Series,O
A,O
and,O
Series,O
B,O
notes,O
",",O
as,O
well,O
as,O
the,O
indentures,O
governing,O
our,O
other,O
outstanding,O
notes,O
.,O
,O
We,O
may,O
from,O
time,O
to,O
time,O
enter,O
into,O
other,O
commercial,O
relationships,O
with,O
the,O
exchange,O
agent,O
.,O
,O
We,O
will,O
pay,O
the,O
expenses,O
of,O
the,O
exchange,O
offer,O
.,O
,O
We,O
will,O
not,O
make,O
any,O
payments,O
to,O
brokers,O
",",O
dealers,O
or,O
others,O
soliciting,O
acceptances,O
of,O
the,O
exchange,O
offer,O
.,O
,O
We,O
are,O
making,O
the,O
principal,O
solicitation,O
by,O
mail,O
;,O
however,O
",",O
our,O
officers,O
and,O
employees,O
may,O
make,O
additional,O
solicitations,O
by,O
facsimile,O
transmission,O
",",O
e-mail,O
",",O
telephone,O
or,O
in,O
person,O
.,O
,O
You,O
will,O
not,O
be,O
charged,O
a,O
service,O
fee,O
for,O
the,O
exchange,O
of,O
your,O
Series,O
A,O
notes,O
",",O
but,O
we,O
may,O
require,O
you,O
to,O
pay,O
any,O
transfer,O
or,O
similar,O
government,O
taxes,O
in,O
certain,O
circumstances,O
.,O
,O
You,O
will,O
not,O
be,O
obligated,O
to,O
pay,O
any,O
transfer,O
taxes,O
",",O
unless,O
you,O
instruct,O
us,O
to,O
register,O
Series,O
B,O
notes,O
in,O
the,O
name,O
of,O
",",O
or,O
request,O
that,O
Series,O
A,O
notes,O
not,O
tendered,O
or,O
not,O
accepted,O
in,O
the,O
exchange,O
offer,O
be,O
returned,O
to,O
",",O
a,O
person,O
other,O
than,O
the,O
registered,O
tendering,O
holder,O
.,O
,O
If,O
you,O
are,O
eligible,O
to,O
participate,O
in,O
the,O
exchange,O
offer,O
but,O
do,O
not,O
tender,O
your,O
Series,O
A,O
notes,O
",",O
you,O
will,O
not,O
have,O
any,O
further,O
registration,O
rights,O
.,O
,O
Your,O
Series,O
A,O
notes,O
will,O
continue,O
to,O
be,O
subject,O
to,O
restrictions,O
on,O
transfer,O
.,O
,O
Accordingly,O
",",O
you,O
may,O
resell,O
the,O
Series,O
A,O
notes,O
that,O
are,O
not,O
exchanged,O
only,O
:,O
,O
in,O
each,O
case,O
in,O
accordance,O
with,O
all,O
other,O
applicable,O
securities,O
laws,O
.,O
,O
We,O
do,O
not,O
intend,O
to,O
register,O
the,O
Series,O
A,O
notes,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
The,O
Series,O
B,O
notes,O
will,O
be,O
recorded,O
at,O
the,O
same,O
carrying,O
value,O
as,O
the,O
Series,O
A,O
notes,O
.,O
,O
Accordingly,O
",",O
we,O
will,O
not,O
recognize,O
any,O
gain,O
or,O
loss,O
on,O
the,O
exchange,O
for,O
accounting,O
purposes,O
.,O
,O
We,O
do,O
not,O
believe,O
that,O
the,O
receipt,O
of,O
any,O
material,O
federal,O
or,O
state,O
regulatory,O
approval,O
will,O
be,O
necessary,O
in,O
connection,O
with,O
the,O
exchange,O
offer,O
",",O
other,O
than,O
the,O
effectiveness,O
of,O
the,O
exchange,O
offer,O
registration,O
statement,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
The,O
following,O
is,O
a,O
summary,O
of,O
certain,O
of,O
our,O
outstanding,O
indebtedness,O
.,O
,O
This,O
summary,O
does,O
not,O
purport,O
to,O
be,O
complete,O
and,O
is,O
qualified,O
in,O
its,O
entirety,O
by,O
reference,O
to,O
the,O
descriptions,O
of,O
this,O
indebtedness,O
contained,O
in,O
our,O
periodic,O
and,O
current,O
reports,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
and,O
the,O
agreements,O
and,O
instruments,O
governing,O
such,O
indebtedness,O
filed,O
as,O
exhibits,O
to,O
such,O
reports,O
.,O
,O
On,O
January,O
15,O
",",O
2010,O
",",O
we,O
entered,O
into,O
an,O
amended,O
and,O
restated,O
syndicated,O
credit,O
agreement,O
with,O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
as,O
administrative,O
agent,O
and,O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
DCFS,I-BUSINESS
USA,I-BUSINESS
LLC,I-BUSINESS
",",O
BMW,I-BUSINESS
Financial,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
Toyota,I-BUSINESS
Motor,I-BUSINESS
Credit,I-BUSINESS
Corporation,I-BUSINESS
",",O
JPMorgan,I-BUSINESS
Chase,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
Wachovia,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
",",O
Comerica,I-BUSINESS
Bank,I-BUSINESS
and,I-BUSINESS
World,I-BUSINESS
Omni,I-BUSINESS
Financial,I-BUSINESS
Corp.,I-BUSINESS
",",O
as,O
Lenders,O
and,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Bank,I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
",",O
as,O
LC,O
issuer,O
(,O
the,O
Revolving,O
Credit,O
Facility,O
),O
and,O
a,O
syndicated,O
floor,O
plan,O
credit,O
facility,O
with,O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
as,O
administrative,O
agent,O
",",O
and,O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
JPMorgan,I-BUSINESS
Chase,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
Wachovia,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
and,O
Comerica,I-BUSINESS
Bank,I-BUSINESS
",",O
as,O
lenders,O
(,O
the,O
Floorplan,O
Facility,O
),O
.,O
,O
The,O
Revolving,O
Credit,O
Facility,O
and,O
Floorplan,O
Facility,O
mature,O
on,O
August,O
15,O
",",O
2012,O
.,O
,O
The,O
Revolving,O
Credit,O
Facility,O
has,O
a,O
borrowing,O
limit,O
of,O
$,O
150,O
million,O
",",O
which,O
may,O
be,O
expanded,O
up,O
to,O
$,O
215,O
million,O
in,O
total,O
credit,O
availability,O
upon,O
satisfaction,O
of,O
certain,O
conditions,O
.,O
,O
The,O
Revolving,O
Credit,O
Facility,O
is,O
available,O
for,O
acquisitions,O
",",O
capital,O
expenditures,O
",",O
working,O
capital,O
and,O
general,O
corporate,O
purposes,O
.,O
,O
The,O
amount,O
available,O
for,O
borrowing,O
under,O
the,O
Revolving,O
Credit,O
Facility,O
is,O
reduced,O
on,O
a,O
dollar-for-dollar,O
basis,O
by,O
the,O
aggregate,O
face,O
amount,O
of,O
any,O
outstanding,O
letters,O
of,O
credit,O
under,O
the,O
Revolving,O
Credit,O
Facility,O
and,O
is,O
subject,O
to,O
compliance,O
with,O
a,O
borrowing,O
base,O
.,O
,O
The,O
borrowing,O
base,O
is,O
calculated,O
based,O
on,O
the,O
value,O
of,O
eligible,O
accounts,O
",",O
eligible,O
inventory,O
",",O
eligible,O
equipment,O
and,O
"5,000,000",O
shares,O
of,O
common,O
stock,O
of,O
Speedway,I-BUSINESS
Motorsports,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
SMI,I-BUSINESS
),O
pledged,O
as,O
collateral,O
by,O
one,O
of,O
our,O
affiliates,O
",",O
Sonic,I-BUSINESS
Financial,I-BUSINESS
Corporation,I-BUSINESS
(,O
SFC,I-BUSINESS
),O
.,O
,O
In,O
connection,O
with,O
the,O
Revolving,O
Credit,O
Facility,O
",",O
we,O
",",O
substantially,O
all,O
of,O
our,O
subsidiaries,O
and,O
SFC,I-BUSINESS
entered,O
into,O
various,O
collateral,O
documents,O
.,O
,O
These,O
documents,O
include,O
an,O
amended,O
and,O
restated,O
security,O
agreement,O
",",O
an,O
amended,O
and,O
restated,O
escrow,O
and,O
security,O
agreement,O
and,O
amended,O
and,O
restated,O
securities,O
pledge,O
agreements,O
(,O
the,O
Collateral,O
Documents,O
),O
with,O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
as,O
administrative,O
agent,O
.,O
,O
Under,O
the,O
Collateral,O
Documents,O
",",O
outstanding,O
obligations,O
under,O
the,O
Revolving,O
Credit,O
Facility,O
are,O
secured,O
by,O
a,O
pledge,O
of,O
substantially,O
all,O
of,O
our,O
assets,O
and,O
the,O
assets,O
of,O
substantially,O
all,O
of,O
our,O
domestic,O
subsidiaries,O
",",O
and,O
by,O
the,O
pledge,O
of,O
"5,000,000",O
shares,O
of,O
common,O
stock,O
of,O
SMI,I-BUSINESS
by,O
SFC,I-BUSINESS
.,O
,O
The,O
Collateral,O
Documents,O
also,O
provide,O
for,O
the,O
pledge,O
of,O
the,O
franchise,O
agreements,O
and,O
stock,O
or,O
equity,O
interests,O
of,O
our,O
dealership,O
franchise,O
subsidiaries,O
",",O
except,O
for,O
those,O
dealership,O
franchise,O
subsidiaries,O
where,O
the,O
applicable,O
manufacturer,O
prohibits,O
such,O
a,O
pledge,O
",",O
in,O
which,O
cases,O
the,O
stock,O
or,O
equity,O
interests,O
of,O
the,O
dealership,O
franchise,O
subsidiary,O
is,O
subject,O
to,O
an,O
escrow,O
arrangement,O
with,O
the,O
administrative,O
agent,O
.,O
,O
Substantially,O
all,O
of,O
our,O
domestic,O
subsidiaries,O
also,O
guarantee,O
our,O
obligations,O
under,O
the,O
Revolving,O
Credit,O
Facility,O
under,O
the,O
terms,O
of,O
an,O
amended,O
and,O
restated,O
guaranty,O
agreement,O
with,O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
as,O
administrative,O
agent,O
",",O
entered,O
into,O
in,O
connection,O
with,O
the,O
Revolving,O
Credit,O
Facility,O
.,O
,O
The,O
Floorplan,O
Facility,O
is,O
comprised,O
of,O
a,O
new,O
vehicle,O
revolving,O
floor,O
plan,O
facility,O
in,O
an,O
amount,O
up,O
to,O
$,O
321,O
million,O
(,O
the,O
New,O
Vehicle,O
Floorplan,O
Facility,O
),O
and,O
a,O
used,O
vehicle,O
revolving,O
floor,O
plan,O
facility,O
in,O
an,O
amount,O
up,O
to,O
$,O
50,O
million,O
",",O
subject,O
to,O
compliance,O
with,O
a,O
borrowing,O
base,O
(,O
the,O
Used,O
Vehicle,O
Floorplan,O
Facility,O
),O
.,O
,O
We,O
may,O
",",O
under,O
certain,O
conditions,O
",",O
request,O
an,O
increase,O
in,O
the,O
Floorplan,O
Facility,O
by,O
up,O
to,O
$,O
125,O
million,O
",",O
which,O
shall,O
be,O
allocated,O
between,O
the,O
New,O
Vehicle,O
Floorplan,O
Facility,O
and,O
the,O
Used,O
Vehicle,O
Floorplan,O
Facility,O
as,O
we,O
request,O
",",O
with,O
no,O
more,O
than,O
15,O
%,O
of,O
the,O
aggregate,O
commitments,O
allocated,O
to,O
the,O
commitments,O
under,O
the,O
Used,O
Vehicle,O
Floorplan,O
Facility,O
.,O
,O
Under,O
the,O
terms,O
of,O
the,O
amended,O
and,O
restated,O
security,O
agreement,O
entered,O
into,O
in,O
connection,O
with,O
the,O
Revolving,O
Credit,O
Facility,O
and,O
guaranty,O
agreements,O
entered,O
into,O
by,O
us,O
and,O
certain,O
of,O
our,O
subsidiaries,O
in,O
connection,O
with,O
the,O
Floorplan,O
Facility,O
",",O
outstanding,O
obligations,O
under,O
the,O
Floorplan,O
Facility,O
are,O
guaranteed,O
by,O
us,O
and,O
certain,O
of,O
our,O
subsidiaries,O
and,O
are,O
secured,O
by,O
a,O
pledge,O
of,O
substantially,O
all,O
of,O
our,O
assets,O
and,O
the,O
assets,O
of,O
certain,O
of,O
our,O
domestic,O
subsidiaries,O
.,O
,O
The,O
amounts,O
outstanding,O
under,O
the,O
Revolving,O
Credit,O
Facility,O
",",O
New,O
Vehicle,O
Floorplan,O
Facility,O
and,O
Used,O
Vehicle,O
Floorplan,O
Facility,O
each,O
bear,O
interest,O
at,O
variable,O
rates,O
based,O
on,O
specified,O
percentages,O
above,O
LIBOR,O
or,O
the,O
Base,O
Rate,O
according,O
to,O
a,O
performance-based,O
pricing,O
grid,O
determined,O
by,O
Sonic,I-BUSINESS
s,O
Consolidated,O
Total,O
Debt,O
to,O
EBITDA,O
Ratio,O
as,O
of,O
the,O
last,O
day,O
of,O
the,O
immediately,O
preceding,O
fiscal,O
quarter,O
.,O
,O
The,O
Revolving,O
Credit,O
Facility,O
and,O
Floorplan,O
Facility,O
contain,O
certain,O
negative,O
covenants,O
",",O
including,O
covenants,O
which,O
could,O
restrict,O
or,O
prohibit,O
indebtedness,O
",",O
liens,O
",",O
the,O
payment,O
of,O
dividends,O
",",O
capital,O
expenditures,O
and,O
material,O
dispositions,O
and,O
acquisitions,O
of,O
assets,O
as,O
well,O
as,O
other,O
customary,O
covenants,O
and,O
default,O
provisions,O
.,O
,O
Financial,O
covenants,O
include,O
required,O
specified,O
ratios,O
(,O
as,O
each,O
is,O
defined,O
in,O
the,O
Revolving,O
Credit,O
Facility,O
and,O
Floorplan,O
Facility,O
),O
of,O
:,O
,O
The,O
Revolving,O
Credit,O
Facility,O
and,O
Floorplan,O
Facility,O
contain,O
events,O
of,O
default,O
",",O
including,O
cross-defaults,O
to,O
other,O
material,O
indebtedness,O
",",O
change,O
of,O
control,O
events,O
and,O
events,O
of,O
default,O
customary,O
for,O
syndicated,O
commercial,O
credit,O
facilities,O
.,O
,O
Upon,O
the,O
occurrence,O
of,O
an,O
event,O
of,O
default,O
",",O
we,O
could,O
be,O
required,O
to,O
immediately,O
repay,O
all,O
outstanding,O
amounts,O
under,O
the,O
Revolving,O
Credit,O
Facility,O
and,O
Floorplan,O
Facility,O
.,O
,O
We,O
have,O
$,O
275.0,O
million,O
of,O
aggregate,O
principal,O
amount,O
of,O
the,O
8.625,O
%,O
Notes,O
outstanding,O
.,O
,O
The,O
8.625,O
%,O
Notes,O
are,O
unsecured,O
obligations,O
that,O
rank,O
equal,O
in,O
right,O
of,O
payment,O
to,O
all,O
of,O
our,O
existing,O
and,O
future,O
senior,O
subordinated,O
indebtedness,O
",",O
mature,O
on,O
August,O
15,O
",",O
2013,O
and,O
are,O
currently,O
redeemable,O
at,O
our,O
option,O
at,O
a,O
redemption,O
price,O
of,O
102.875,O
and,O
are,O
redeemable,O
at,O
our,O
option,O
after,O
August,O
15,O
",",O
2010,O
at,O
a,O
redemption,O
price,O
of,O
101.438,O
%,O
.,O
,O
Our,O
obligations,O
under,O
the,O
8.625,O
%,O
Notes,O
are,O
guaranteed,O
by,O
all,O
of,O
our,O
operating,O
domestic,O
subsidiaries,O
.,O
,O
The,O
indenture,O
governing,O
the,O
8.625,O
%,O
Notes,O
contains,O
certain,O
specified,O
restrictive,O
financial,O
covenants,O
and,O
certain,O
other,O
limitations,O
or,O
prohibitions,O
concerning,O
the,O
incurrence,O
of,O
other,O
indebtedness,O
",",O
capital,O
stock,O
",",O
guaranties,O
",",O
asset,O
sales,O
",",O
investments,O
",",O
cash,O
dividends,O
to,O
shareholders,O
",",O
distributions,O
",",O
redemptions,O
",",O
and,O
pledges,O
of,O
assets,O
to,O
any,O
third,O
party,O
lender,O
of,O
senior,O
subordinated,O
debt,O
.,O
,O
On,O
March,O
12,O
",",O
2010,O
",",O
we,O
issued,O
a,O
notice,O
of,O
redemption,O
for,O
$,O
200,O
million,O
aggregate,O
principal,O
amount,O
of,O
our,O
8.625,O
%,O
Notes,O
.,O
,O
We,O
expect,O
to,O
complete,O
the,O
redemption,O
on,O
April,O
12,O
",",O
2010,O
.,O
,O
5.0,O
%,O
Convertible,O
Senior,O
Notes,O
due,O
2029,O
(,O
5,O
%,O
Convertible,O
Notes,O
),O
,O
We,O
have,O
$,O
172.5,O
million,O
in,O
aggregate,O
principal,O
amount,O
of,O
5.0,O
%,O
Convertible,O
Notes,O
outstanding,O
.,O
,O
The,O
5.0,O
%,O
Convertible,O
Notes,O
were,O
issued,O
in,O
2009,O
",",O
bear,O
interest,O
at,O
a,O
rate,O
of,O
5.0,O
%,O
per,O
year,O
and,O
mature,O
on,O
October,O
1,O
",",O
2029,O
.,O
,O
We,O
may,O
redeem,O
some,O
or,O
all,O
of,O
the,O
5.0,O
%,O
Convertible,O
Notes,O
for,O
cash,O
at,O
any,O
time,O
subsequent,O
to,O
October,O
1,O
",",O
2014,O
at,O
a,O
repurchase,O
price,O
equal,O
to,O
100,O
%,O
of,O
the,O
principal,O
amount,O
of,O
the,O
5.0,O
%,O
Convertible,O
Notes,O
then,O
outstanding,O
.,O
,O
Holders,O
have,O
the,O
right,O
to,O
require,O
us,O
to,O
purchase,O
the,O
5.0,O
%,O
Convertible,O
Notes,O
on,O
each,O
of,O
October,O
1,O
",",O
2014,O
",",O
October,O
1,O
",",O
2019,O
and,O
October,O
1,O
",",O
2024,O
or,O
in,O
the,O
event,O
of,O
a,O
change,O
in,O
control,O
for,O
cash,O
at,O
a,O
purchase,O
price,O
equal,O
to,O
100,O
%,O
of,O
the,O
principal,O
amount,O
of,O
the,O
5.0,O
%,O
Convertible,O
Notes,O
then,O
outstanding,O
.,O
,O
defined,O
in,O
the,O
indenture,O
),O
per,O
$,O
"1,000",O
principal,O
amount,O
of,O
notes,O
for,O
each,O
day,O
of,O
that,O
measurement,O
period,O
was,O
less,O
than,O
98,O
%,O
of,O
the,O
product,O
of,O
the,O
last,O
reported,O
sale,O
price,O
of,O
our,O
Class,O
A,O
common,O
stock,O
and,O
the,O
applicable,O
conversion,O
rate,O
on,O
each,O
such,O
day,O
;,O
(,O
3,O
),O
if,O
we,O
call,O
any,O
or,O
all,O
of,O
the,O
5.0,O
%,O
Convertible,O
Notes,O
for,O
redemption,O
",",O
at,O
any,O
time,O
prior,O
to,O
the,O
close,O
of,O
business,O
on,O
the,O
third,O
scheduled,O
trading,O
day,O
prior,O
to,O
the,O
redemption,O
date,O
;,O
or,O
(,O
4,O
),O
upon,O
the,O
occurrence,O
of,O
specified,O
corporate,O
events,O
.,O
,O
On,O
and,O
after,O
July,O
1,O
",",O
2029,O
to,O
(,O
and,O
including,O
),O
the,O
close,O
of,O
business,O
on,O
the,O
third,O
scheduled,O
trading,O
day,O
immediately,O
preceding,O
the,O
maturity,O
date,O
",",O
holders,O
may,O
convert,O
their,O
5.0,O
%,O
Convertible,O
Notes,O
at,O
any,O
time,O
",",O
regardless,O
of,O
the,O
foregoing,O
circumstances,O
.,O
,O
The,O
conversion,O
rate,O
is,O
74.7245,O
shares,O
of,O
Class,O
A,O
common,O
stock,O
per,O
$,O
"1,000",O
principal,O
amount,O
of,O
notes,O
",",O
which,O
is,O
equivalent,O
to,O
a,O
conversion,O
price,O
of,O
approximately,O
$,O
13.38,O
per,O
share,O
of,O
Class,O
A,O
common,O
stock,O
.,O
,O
4.25,O
%,O
Convertible,O
Senior,O
Subordinated,O
Notes,O
due,O
2015,O
(,O
4.25,O
%,O
Convertible,O
Notes,O
),O
,O
We,O
have,O
approximately,O
$,O
17.0,O
million,O
aggregate,O
principal,O
amount,O
of,O
4.25,O
%,O
Convertible,O
Notes,O
outstanding,O
.,O
,O
The,O
4.25,O
%,O
Convertible,O
Notes,O
were,O
issued,O
in,O
2005,O
and,O
bear,O
interest,O
at,O
an,O
annual,O
rate,O
of,O
4.25,O
%,O
until,O
November,O
30,O
",",O
2010,O
and,O
4.75,O
%,O
thereafter,O
.,O
,O
The,O
4.25,O
%,O
Convertible,O
Notes,O
are,O
unsecured,O
obligations,O
that,O
rank,O
equal,O
in,O
right,O
of,O
payment,O
to,O
all,O
of,O
our,O
existing,O
and,O
future,O
senior,O
subordinated,O
indebtedness,O
",",O
mature,O
on,O
November,O
30,O
",",O
2015,O
and,O
are,O
redeemable,O
on,O
or,O
after,O
November,O
30,O
",",O
2010,O
.,O
,O
Our,O
obligations,O
under,O
the,O
4.25,O
%,O
Convertible,O
Notes,O
are,O
not,O
guaranteed,O
by,O
any,O
of,O
our,O
subsidiaries,O
.,O
,O
Holders,O
of,O
the,O
4.25,O
%,O
Convertible,O
Notes,O
may,O
convert,O
them,O
into,O
cash,O
and,O
shares,O
of,O
Sonic,O
s,O
Class,O
A,O
common,O
stock,O
at,O
an,O
initial,O
conversion,O
rate,O
of,O
41.4185,O
shares,O
per,O
$,O
"1,000",O
of,O
principal,O
amount,O
",",O
subject,O
to,O
distributions,O
on,O
",",O
or,O
other,O
changes,O
in,O
our,O
Class,O
A,O
common,O
stock,O
",",O
if,O
any,O
",",O
prior,O
to,O
the,O
conversion,O
date,O
.,O
,O
The,O
4.25,O
%,O
Convertible,O
Notes,O
are,O
convertible,O
into,O
cash,O
and,O
shares,O
of,O
our,O
Class,O
A,O
common,O
stock,O
if,O
prior,O
to,O
October,O
31,O
",",O
2010,O
",",O
during,O
the,O
five,O
business,O
day,O
period,O
after,O
any,O
five,O
consecutive,O
trading,O
day,O
period,O
in,O
which,O
the,O
trading,O
price,O
per,O
$,O
"1,000",O
principal,O
amount,O
of,O
4.25,O
%,O
Convertible,O
Notes,O
was,O
less,O
than,O
103,O
%,O
of,O
the,O
product,O
of,O
the,O
closing,O
price,O
of,O
our,O
Class,O
A,O
common,O
stock,O
and,O
the,O
applicable,O
conversion,O
rate,O
for,O
the,O
4.25,O
%,O
Convertible,O
Notes,O
;,O
if,O
we,O
call,O
the,O
4.25,O
%,O
Convertible,O
Notes,O
for,O
redemption,O
;,O
or,O
upon,O
the,O
occurrence,O
of,O
certain,O
corporate,O
transactions,O
;,O
or,O
on,O
or,O
after,O
October,O
31,O
",",O
2010,O
.,O
,O
Upon,O
conversion,O
of,O
the,O
4.25,O
%,O
Convertible,O
Notes,O
",",O
we,O
will,O
be,O
required,O
to,O
deliver,O
cash,O
equal,O
to,O
the,O
lesser,O
of,O
the,O
aggregate,O
principal,O
amount,O
of,O
the,O
4.25,O
%,O
Convertible,O
Notes,O
being,O
converted,O
and,O
our,O
total,O
conversion,O
obligation,O
.,O
,O
If,O
our,O
total,O
conversion,O
obligation,O
exceeds,O
the,O
aggregate,O
principal,O
amount,O
of,O
the,O
4.25,O
%,O
Convertible,O
Notes,O
being,O
converted,O
",",O
we,O
will,O
deliver,O
shares,O
of,O
Class,O
A,O
common,O
stock,O
to,O
the,O
extent,O
of,O
the,O
excess,O
amount,O
",",O
if,O
any,O
.,O
,O
We,O
also,O
have,O
bilateral,O
floor,O
plan,O
credit,O
arrangements,O
with,O
each,O
of,O
DCFS,I-BUSINESS
USA,I-BUSINESS
LLC,I-BUSINESS
",",O
Ford,I-BUSINESS
Motor,I-BUSINESS
Credit,I-BUSINESS
Company,I-BUSINESS
LLC,I-BUSINESS
",",O
GMAC,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
formally,O
known,O
as,O
General,I-BUSINESS
Motors,I-BUSINESS
Acceptance,I-BUSINESS
Corporation,I-BUSINESS
),O
",",O
BMW,I-BUSINESS
Financial,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Toyota,I-BUSINESS
Motor,I-BUSINESS
Credit,I-BUSINESS
Corporation,I-BUSINESS
and,O
World,I-BUSINESS
Omni,I-BUSINESS
Financial,I-BUSINESS
Corp.,I-BUSINESS
.,O
,O
Collectively,O
",",O
these,O
bilateral,O
floor,O
plan,O
credit,O
facilities,O
provide,O
financing,O
for,O
new,O
and,O
used,O
vehicle,O
inventory,O
purchased,O
from,O
the,O
respective,O
manufacturer,O
affiliates,O
of,O
these,O
captive,O
finance,O
companies,O
(,O
and,O
",",O
in,O
some,O
cases,O
",",O
also,O
provide,O
financing,O
for,O
new,O
and,O
used,O
vehicle,O
inventory,O
purchased,O
from,O
non-affiliated,O
manufacturers,O
),O
.,O
,O
Each,O
of,O
these,O
separate,O
floor,O
plan,O
facilities,O
bear,O
interest,O
at,O
variable,O
rates,O
based,O
on,O
prime,O
rate,O
or,O
LIBOR,O
.,O
,O
Our,O
obligations,O
under,O
each,O
of,O
these,O
bilateral,O
floor,O
plan,O
arrangements,O
are,O
guaranteed,O
and,O
are,O
secured,O
by,O
liens,O
on,O
substantially,O
all,O
of,O
the,O
assets,O
of,O
our,O
respective,O
subsidiaries,O
that,O
receive,O
financing,O
under,O
these,O
arrangements,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2009,O
",",O
we,O
had,O
approximately,O
$,O
116.7,O
million,O
in,O
outstanding,O
mortgage,O
financing,O
related,O
to,O
several,O
of,O
our,O
dealership,O
properties,O
.,O
,O
These,O
mortgage,O
notes,O
require,O
monthly,O
payments,O
of,O
principal,O
and,O
interest,O
through,O
maturity,O
and,O
are,O
secured,O
by,O
the,O
underlying,O
properties,O
.,O
,O
Maturity,O
dates,O
range,O
between,O
June,O
2013,O
and,O
December,O
2029,O
.,O
,O
The,O
weighted,O
average,O
interest,O
rate,O
was,O
5.1,O
%,O
at,O
December,O
31,O
",",O
2009,O
.,O
,O
The,O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2018,O
",",O
Series,O
B,O
(,O
the,O
Series,O
B,O
notes,O
),O
will,O
be,O
issued,O
under,O
an,O
Indenture,O
(,O
the,O
Indenture,O
),O
among,O
Sonic,I-BUSINESS
",",O
the,O
Guarantors,O
and,O
U.S.,I-BUSINESS
Bank,I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
",",O
as,O
trustee,O
(,O
the,O
Trustee,O
),O
.,O
,O
The,O
Series,O
A,O
notes,O
were,O
issued,O
under,O
the,O
same,O
Indenture,O
.,O
,O
The,O
terms,O
of,O
the,O
Series,O
A,O
and,O
Series,O
B,O
notes,O
include,O
those,O
stated,O
in,O
the,O
Indenture,O
and,O
those,O
made,O
a,O
part,O
of,O
the,O
Indenture,O
by,O
reference,O
to,O
the,O
Trust,I-LEGISLATION/ACT
Indenture,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1939,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Trust,I-LEGISLATION/ACT
Indenture,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
.,O
,O
Parenthetical,O
references,O
to,O
Section,O
mean,O
the,O
applicable,O
Section,O
of,O
the,O
Indenture,O
.,O
,O
The,O
following,O
summary,O
of,O
the,O
material,O
provisions,O
of,O
the,O
Indenture,O
governing,O
the,O
Series,O
B,O
notes,O
does,O
not,O
purport,O
to,O
be,O
complete,O
",",O
and,O
where,O
reference,O
is,O
made,O
to,O
particular,O
provisions,O
of,O
the,O
Indenture,O
",",O
these,O
provisions,O
",",O
including,O
the,O
definitions,O
of,O
certain,O
terms,O
",",O
are,O
qualified,O
in,O
their,O
entirety,O
by,O
reference,O
to,O
all,O
of,O
the,O
provisions,O
of,O
the,O
Indenture,O
and,O
those,O
terms,O
made,O
a,O
part,O
of,O
the,O
Indenture,O
by,O
the,O
Trust,I-LEGISLATION/ACT
Indenture,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
For,O
definitions,O
of,O
certain,O
capitalized,O
terms,O
used,O
in,O
the,O
following,O
summary,O
",",O
see,O
Certain,O
Definitions,O
.,O
,O
In,O
this,O
description,O
",",O
the,O
word,O
Company,O
refers,O
only,O
to,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
not,O
to,O
its,O
subsidiaries,O
.,O
,O
The,O
form,O
and,O
terms,O
of,O
the,O
Series,O
A,O
and,O
Series,O
B,O
notes,O
are,O
identical,O
",",O
except,O
that,O
:,O
,O
The,O
Series,O
B,O
notes,O
:,O
,O
The,O
Series,O
B,O
notes,O
are,O
guaranteed,O
by,O
all,O
of,O
our,O
operative,O
domestic,O
Subsidiaries,O
as,O
of,O
the,O
Issue,O
Date,O
.,O
,O
Under,O
the,O
circumstances,O
described,O
below,O
under,O
the,O
caption,O
—Limitation,O
on,O
Unrestricted,O
Subsidiaries,O
",",O
we,O
will,O
be,O
permitted,O
to,O
designate,O
certain,O
of,O
our,O
subsidiaries,O
as,O
Unrestricted,O
Subsidiaries,O
.,O
,O
Our,O
Unrestricted,O
Subsidiaries,O
will,O
not,O
be,O
subject,O
to,O
any,O
of,O
the,O
restrictive,O
covenants,O
in,O
the,O
Indenture,O
and,O
will,O
not,O
guarantee,O
the,O
Series,O
B,O
notes,O
.,O
,O
Each,O
Guarantee,O
of,O
the,O
Series,O
B,O
notes,O
:,O
,O
The,O
Series,O
B,O
notes,O
issued,O
in,O
this,O
exchange,O
offer,O
will,O
mature,O
on,O
March,O
15,O
",",O
2018,O
",",O
will,O
be,O
issued,O
in,O
up,O
to,O
$,O
"210,000,000",O
aggregate,O
principal,O
amount,O
",",O
subject,O
to,O
the,O
Company,O
s,O
ability,O
to,O
issue,O
additional,O
Series,O
B,O
notes,O
of,O
the,O
same,O
series,O
as,O
the,O
Series,O
B,O
notes,O
",",O
and,O
will,O
be,O
unsecured,O
senior,O
subordinated,O
obligations,O
of,O
the,O
Company,O
.,O
,O
As,O
described,O
in,O
The,O
Exchange,O
Offer,O
",",O
we,O
have,O
agreed,O
to,O
exchange,O
all,O
of,O
our,O
$,O
210.0,O
million,O
outstanding,O
Series,O
A,O
notes,O
for,O
$,O
210.0,O
million,O
of,O
Series,O
B,O
notes,O
.,O
,O
Each,O
Series,O
B,O
note,O
will,O
bear,O
interest,O
at,O
the,O
rate,O
of,O
9.0,O
%,O
per,O
annum,O
from,O
the,O
date,O
of,O
its,O
issuance,O
or,O
from,O
the,O
most,O
recent,O
interest,O
payment,O
date,O
to,O
which,O
interest,O
has,O
been,O
paid,O
on,O
the,O
Series,O
A,O
notes,O
accepted,O
for,O
exchange,O
",",O
payable,O
semiannually,O
in,O
arrears,O
on,O
March,O
15,O
and,O
September,O
15,O
in,O
each,O
year,O
",",O
commencing,O
September,O
15,O
",",O
2010,O
",",O
to,O
the,O
person,O
in,O
whose,O
name,O
the,O
Series,O
B,O
note,O
(,O
or,O
any,O
predecessor,O
Series,O
B,O
note,O
),O
is,O
registered,O
at,O
the,O
close,O
of,O
business,O
on,O
the,O
March,O
1,O
or,O
September,O
1,O
next,O
preceding,O
such,O
interest,O
payment,O
date,O
.,O
,O
Interest,O
will,O
be,O
computed,O
on,O
the,O
basis,O
of,O
a,O
360-day,O
year,O
comprised,O
of,O
twelve,O
30-day,O
months,O
.,O
,O
(,O
Sections,O
202,O
",",O
301,O
and,O
309,O
),O
Interest,O
will,O
cease,O
to,O
accrue,O
on,O
a,O
Series,O
B,O
note,O
upon,O
its,O
maturity,O
",",O
redemption,O
or,O
repurchase,O
by,O
us,O
on,O
the,O
terms,O
and,O
subject,O
to,O
the,O
conditions,O
specified,O
in,O
the,O
Indenture,O
.,O
,O
If,O
any,O
interest,O
payment,O
date,O
",",O
maturity,O
date,O
",",O
redemption,O
date,O
or,O
purchase,O
date,O
of,O
a,O
Series,O
B,O
note,O
falls,O
on,O
a,O
day,O
that,O
is,O
not,O
a,O
business,O
day,O
",",O
the,O
required,O
payment,O
of,O
principal,O
and,O
interest,O
will,O
be,O
made,O
on,O
the,O
next,O
succeeding,O
business,O
day,O
as,O
if,O
made,O
on,O
the,O
date,O
that,O
the,O
payment,O
was,O
due,O
and,O
no,O
interest,O
will,O
accrue,O
on,O
that,O
payment,O
for,O
the,O
period,O
from,O
and,O
after,O
that,O
interest,O
payment,O
date,O
",",O
maturity,O
date,O
",",O
redemption,O
date,O
or,O
purchase,O
date,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
to,O
the,O
date,O
of,O
that,O
payment,O
on,O
the,O
next,O
succeeding,O
business,O
day,O
.,O
,O
We,O
may,O
from,O
time,O
to,O
time,O
",",O
without,O
notice,O
to,O
or,O
the,O
consent,O
of,O
the,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
",",O
create,O
and,O
issue,O
further,O
notes,O
ranking,O
equally,O
with,O
the,O
Series,O
B,O
notes,O
in,O
all,O
respects,O
",",O
subject,O
to,O
the,O
limitations,O
described,O
under,O
the,O
caption,O
Certain,O
Covenants,O
Limitation,O
on,O
Indebtedness,O
.,O
,O
The,O
total,O
amount,O
of,O
Series,O
B,O
notes,O
which,O
may,O
be,O
issued,O
under,O
the,O
Indenture,O
is,O
unlimited,O
.,O
,O
Any,O
further,O
notes,O
may,O
be,O
consolidated,O
and,O
form,O
a,O
single,O
series,O
with,O
the,O
Series,O
B,O
notes,O
",",O
vote,O
together,O
with,O
the,O
Series,O
B,O
notes,O
and,O
have,O
the,O
same,O
terms,O
as,O
to,O
status,O
",",O
redemption,O
or,O
otherwise,O
as,O
the,O
Series,O
B,O
notes,O
.,O
,O
References,O
to,O
Series,O
B,O
notes,O
in,O
this,O
Description,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Notes,I-MISCELLANEOUS
include,O
these,O
additional,O
notes,O
if,O
they,O
are,O
in,O
the,O
same,O
series,O
",",O
unless,O
the,O
context,O
requires,O
otherwise,O
.,O
,O
Principal,O
of,O
",",O
premium,O
",",O
if,O
any,O
",",O
and,O
interest,O
on,O
the,O
Series,O
B,O
notes,O
will,O
be,O
payable,O
",",O
and,O
the,O
Series,O
B,O
notes,O
will,O
be,O
exchangeable,O
and,O
transferable,O
",",O
at,O
the,O
office,O
or,O
agency,O
of,O
the,O
Company,O
in,O
The,O
City,O
of,O
New,O
York,O
maintained,O
for,O
such,O
purposes,O
(,O
which,O
initially,O
will,O
be,O
the,O
corporate,O
trust,O
office,O
of,O
the,O
Trustee,O
),O
;,O
provided,O
",",O
however,O
",",O
that,O
payment,O
of,O
interest,O
may,O
be,O
made,O
at,O
the,O
option,O
of,O
the,O
Company,O
by,O
check,O
mailed,O
to,O
the,O
Person,O
entitled,O
thereto,O
as,O
shown,O
on,O
the,O
security,O
register,O
.,O
,O
(,O
Sections,O
301,O
",",O
305,O
and,O
1002,O
),O
The,O
Series,O
B,O
notes,O
will,O
be,O
issued,O
only,O
in,O
fully,O
registered,O
form,O
without,O
coupons,O
",",O
in,O
denominations,O
of,O
$,O
"2,000",O
and,O
any,O
integral,O
multiple,O
of,O
$,O
"1,000",O
.,O
,O
(,O
Section,O
302,O
),O
No,O
service,O
charge,O
will,O
be,O
made,O
for,O
any,O
registration,O
of,O
transfer,O
",",O
exchange,O
or,O
redemption,O
of,O
Series,O
B,O
notes,O
",",O
except,O
in,O
certain,O
circumstances,O
for,O
any,O
tax,O
or,O
other,O
governmental,O
charge,O
that,O
may,O
be,O
imposed,O
in,O
connection,O
therewith,O
.,O
,O
Payment,O
of,O
the,O
Series,O
B,O
notes,O
will,O
be,O
guaranteed,O
by,O
the,O
Guarantors,O
",",O
jointly,O
and,O
severally,O
",",O
fully,O
and,O
unconditionally,O
",",O
on,O
a,O
senior,O
subordinated,O
basis,O
.,O
,O
The,O
Guarantors,O
are,O
comprised,O
of,O
all,O
of,O
the,O
direct,O
and,O
indirect,O
operative,O
domestic,O
Restricted,O
Subsidiaries,O
of,O
the,O
Company,O
on,O
the,O
Issue,O
Date,O
.,O
,O
Substantially,O
all,O
of,O
the,O
Company,O
s,O
operations,O
are,O
conducted,O
through,O
these,O
subsidiaries,O
.,O
,O
In,O
addition,O
",",O
if,O
any,O
Restricted,O
Subsidiary,O
of,O
the,O
Company,O
becomes,O
a,O
guarantor,O
or,O
obligor,O
in,O
respect,O
of,O
any,O
other,O
Indebtedness,O
of,O
the,O
Company,O
or,O
any,O
of,O
the,O
Restricted,O
Subsidiaries,O
",",O
the,O
Company,O
shall,O
cause,O
such,O
Restricted,O
Subsidiary,O
to,O
enter,O
into,O
a,O
supplemental,O
indenture,O
pursuant,O
to,O
which,O
such,O
Restricted,O
Subsidiary,O
shall,O
agree,O
to,O
guarantee,O
the,O
Company,O
s,O
obligations,O
under,O
the,O
Series,O
B,O
notes,O
.,O
,O
If,O
the,O
Company,O
defaults,O
in,O
payment,O
of,O
the,O
principal,O
of,O
",",O
premium,O
",",O
if,O
any,O
",",O
or,O
interest,O
on,O
the,O
Series,O
B,O
notes,O
",",O
each,O
of,O
the,O
Guarantors,O
will,O
be,O
unconditionally,O
",",O
jointly,O
and,O
severally,O
obligated,O
to,O
duly,O
and,O
punctually,O
pay,O
the,O
same,O
.,O
,O
of,O
the,O
United,I-LEGISLATION/ACT
States,I-LEGISLATION/ACT
Bankruptcy,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
or,O
any,O
comparable,O
provision,O
of,O
state,O
law,O
.,O
,O
By,O
virtue,O
of,O
this,O
limitation,O
",",O
a,O
Guarantor,O
s,O
obligations,O
under,O
its,O
Guarantee,O
could,O
be,O
significantly,O
less,O
than,O
amounts,O
payable,O
with,O
respect,O
to,O
the,O
notes,O
",",O
or,O
a,O
Guarantor,O
may,O
have,O
effectively,O
no,O
obligation,O
under,O
its,O
Guarantee,O
.,O
,O
See,O
Risk,O
Factors,O
Risks,O
Related,O
to,O
the,O
Series,O
B,O
Notes,O
.,O
,O
The,O
guarantees,O
may,O
not,O
be,O
enforceable,O
because,O
of,O
fraudulent,O
conveyance,O
laws,O
.,O
,O
Each,O
Guarantor,O
that,O
makes,O
a,O
payment,O
or,O
distribution,O
under,O
its,O
Guarantee,O
shall,O
be,O
entitled,O
to,O
a,O
contribution,O
from,O
any,O
other,O
Guarantor,O
in,O
a,O
pro,O
rata,O
amount,O
based,O
on,O
the,O
net,O
assets,O
of,O
each,O
Guarantor,O
determined,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
.,O
,O
Notwithstanding,O
the,O
foregoing,O
",",O
in,O
certain,O
circumstances,O
a,O
Guarantee,O
of,O
a,O
Guarantor,O
may,O
be,O
released,O
pursuant,O
to,O
the,O
provisions,O
of,O
subsection,O
(,O
c,O
),O
under,O
Certain,O
Covenants,O
Limitation,O
on,O
Issuances,O
of,O
Guarantees,O
of,O
and,O
Pledges,O
for,O
Indebtedness,O
.,O
,O
The,O
Company,O
also,O
may,O
",",O
at,O
any,O
time,O
",",O
cause,O
a,O
Restricted,O
Subsidiary,O
to,O
become,O
a,O
Guarantor,O
by,O
executing,O
and,O
delivering,O
a,O
supplemental,O
indenture,O
providing,O
for,O
the,O
guarantee,O
of,O
payment,O
of,O
the,O
Series,O
B,O
notes,O
by,O
such,O
Restricted,O
Subsidiary,O
on,O
the,O
basis,O
provided,O
in,O
the,O
Indenture,O
.,O
,O
The,O
Series,O
B,O
notes,O
will,O
be,O
subject,O
to,O
redemption,O
at,O
any,O
time,O
on,O
or,O
after,O
March,O
15,O
",",O
2014,O
at,O
the,O
option,O
of,O
the,O
Company,O
",",O
in,O
whole,O
or,O
in,O
part,O
",",O
on,O
not,O
less,O
than,O
30,O
nor,O
more,O
than,O
60,O
days,O
prior,O
notice,O
",",O
in,O
amounts,O
of,O
$,O
"1,000",O
or,O
an,O
integral,O
multiple,O
thereof,O
",",O
at,O
the,O
following,O
redemption,O
prices,O
(,O
expressed,O
as,O
percentages,O
of,O
the,O
principal,O
amount,O
),O
",",O
if,O
redeemed,O
during,O
the,O
12-month,O
period,O
beginning,O
March,O
15,O
of,O
the,O
years,O
indicated,O
below,O
:,O
,O
and,O
thereafter,O
at,O
100,O
%,O
of,O
the,O
principal,O
amount,O
",",O
in,O
each,O
case,O
",",O
together,O
with,O
accrued,O
and,O
unpaid,O
interest,O
",",O
if,O
any,O
",",O
to,O
the,O
redemption,O
date,O
(,O
subject,O
to,O
the,O
rights,O
of,O
holders,O
of,O
record,O
on,O
relevant,O
record,O
dates,O
to,O
receive,O
interest,O
due,O
on,O
an,O
interest,O
payment,O
date,O
),O
.,O
,O
At,O
any,O
time,O
and,O
from,O
time,O
to,O
time,O
on,O
or,O
prior,O
to,O
March,O
15,O
",",O
2014,O
",",O
the,O
Company,O
may,O
redeem,O
all,O
or,O
a,O
part,O
of,O
the,O
Series,O
B,O
notes,O
",",O
upon,O
not,O
less,O
than,O
15,O
nor,O
more,O
than,O
60,O
days,O
notice,O
",",O
at,O
a,O
redemption,O
price,O
equal,O
to,O
100,O
%,O
of,O
the,O
principal,O
amount,O
of,O
the,O
Series,O
B,O
notes,O
redeemed,O
",",O
plus,O
the,O
Applicable,O
Premium,O
as,O
of,O
",",O
and,O
accrued,O
and,O
unpaid,O
interest,O
",",O
if,O
any,O
",",O
to,O
the,O
redemption,O
date,O
(,O
subject,O
to,O
the,O
rights,O
of,O
holders,O
of,O
record,O
on,O
relevant,O
record,O
dates,O
to,O
receive,O
interest,O
due,O
on,O
an,O
interest,O
payment,O
date,O
),O
.,O
,O
If,O
less,O
than,O
all,O
of,O
the,O
Series,O
B,O
notes,O
are,O
to,O
be,O
redeemed,O
",",O
the,O
Trustee,O
shall,O
select,O
the,O
Series,O
B,O
notes,O
or,O
portions,O
of,O
them,O
to,O
be,O
redeemed,O
in,O
compliance,O
with,O
the,O
requirements,O
of,O
the,O
principal,O
national,O
security,O
exchange,O
",",O
if,O
any,O
",",O
on,O
which,O
the,O
Series,O
B,O
notes,O
are,O
listed,O
.,O
,O
to,O
the,O
procedures,O
of,O
The,I-BUSINESS
Depository,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
or,O
any,O
other,O
Depositary,O
),O
.,O
,O
(,O
Sections,O
203,O
",",O
1101,O
",",O
1104,O
",",O
1105,O
and,O
1107,O
),O
,O
The,O
Series,O
B,O
notes,O
will,O
not,O
be,O
entitled,O
to,O
the,O
benefit,O
of,O
any,O
sinking,O
fund,O
.,O
,O
If,O
a,O
Change,O
of,O
Control,O
shall,O
occur,O
at,O
any,O
time,O
",",O
then,O
each,O
holder,O
of,O
Series,O
B,O
notes,O
shall,O
have,O
the,O
right,O
to,O
require,O
that,O
the,O
Company,O
purchase,O
such,O
holder,O
s,O
Series,O
B,O
notes,O
in,O
whole,O
or,O
in,O
part,O
in,O
integral,O
multiples,O
of,O
$,O
"1,000",O
",",O
at,O
a,O
purchase,O
price,O
(,O
the,O
Change,O
of,O
Control,O
Purchase,O
Price,O
),O
in,O
cash,O
in,O
an,O
amount,O
equal,O
to,O
101,O
%,O
of,O
the,O
aggregate,O
principal,O
amount,O
of,O
such,O
Series,O
B,O
notes,O
",",O
plus,O
accrued,O
and,O
unpaid,O
interest,O
",",O
if,O
any,O
",",O
to,O
the,O
date,O
of,O
purchase,O
(,O
the,O
Change,O
of,O
Control,O
Purchase,O
Date,O
),O
",",O
pursuant,O
to,O
the,O
offer,O
described,O
below,O
(,O
the,O
Change,O
of,O
Control,O
Offer,O
),O
and,O
in,O
accordance,O
with,O
the,O
other,O
procedures,O
set,O
forth,O
in,O
the,O
Indenture,O
.,O
,O
Within,O
30,O
days,O
of,O
any,O
Change,O
of,O
Control,O
",",O
or,O
at,O
the,O
Company,O
s,O
option,O
",",O
prior,O
to,O
such,O
Change,O
of,O
Control,O
but,O
after,O
it,O
is,O
publicly,O
announced,O
",",O
the,O
Company,O
shall,O
notify,O
the,O
Trustee,O
and,O
give,O
written,O
notice,O
of,O
the,O
Change,O
of,O
Control,O
to,O
each,O
holder,O
of,O
Series,O
B,O
notes,O
",",O
by,O
first-class,O
mail,O
",",O
postage,O
prepaid,O
",",O
at,O
his,O
address,O
appearing,O
in,O
the,O
security,O
register,O
.,O
,O
The,O
notice,O
will,O
state,O
",",O
among,O
other,O
things,O
",",O
,O
If,O
a,O
Change,O
of,O
Control,O
Offer,O
is,O
made,O
",",O
there,O
can,O
be,O
no,O
assurance,O
that,O
the,O
Company,O
will,O
have,O
available,O
funds,O
sufficient,O
or,O
be,O
able,O
to,O
obtain,O
financing,O
to,O
pay,O
the,O
Change,O
of,O
Control,O
Purchase,O
Price,O
for,O
all,O
or,O
any,O
of,O
the,O
Series,O
B,O
notes,O
that,O
might,O
be,O
delivered,O
by,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
seeking,O
to,O
accept,O
the,O
Change,O
of,O
Control,O
Offer,O
.,O
,O
The,O
failure,O
of,O
the,O
Company,O
to,O
make,O
or,O
consummate,O
the,O
Change,O
of,O
Control,O
Offer,O
or,O
pay,O
the,O
Change,O
of,O
Control,O
Purchase,O
Price,O
when,O
due,O
will,O
give,O
the,O
Trustee,O
and,O
the,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
the,O
rights,O
described,O
under,O
the,O
caption,O
—Events,O
of,O
Default,O
.,O
,O
In,O
addition,O
to,O
the,O
obligations,O
of,O
the,O
Company,O
under,O
the,O
Indenture,O
with,O
respect,O
to,O
the,O
Series,O
B,O
notes,O
and,O
our,O
indentures,O
governing,O
our,O
other,O
outstanding,O
notes,O
in,O
the,O
event,O
of,O
a,O
Change,O
of,O
Control,O
",",O
all,O
of,O
the,O
Company,O
s,O
Indebtedness,O
under,O
any,O
Inventory,O
Facility,O
",",O
any,O
Credit,O
Facility,O
and,O
certain,O
Mortgage,O
Loans,O
",",O
leases,O
and,O
interest,O
rate,O
swap,O
arrangements,O
also,O
contain,O
an,O
event,O
of,O
default,O
upon,O
a,O
Change,O
of,O
Control,O
as,O
defined,O
therein,O
which,O
obligates,O
the,O
Company,O
to,O
repay,O
amounts,O
outstanding,O
under,O
such,O
indebtedness,O
upon,O
an,O
acceleration,O
of,O
the,O
Indebtedness,O
issued,O
thereunder,O
.,O
,O
termination,O
or,O
nonrenewal,O
of,O
one,O
or,O
more,O
of,O
the,O
Company,O
s,O
franchise,O
agreements,O
or,O
its,O
other,O
agreements,O
with,O
the,O
Manufacturers,O
.,O
,O
The,O
term,O
all,O
or,O
substantially,O
all,O
as,O
used,O
in,O
the,O
definition,O
of,O
Change,O
of,O
Control,O
has,O
not,O
been,O
interpreted,O
under,O
New,I-LOCATION
York,I-LOCATION
law,O
",",O
the,O
governing,O
law,O
of,O
the,O
Indenture,O
",",O
to,O
represent,O
a,O
specific,O
quantitative,O
test,O
.,O
,O
As,O
a,O
consequence,O
",",O
in,O
the,O
event,O
the,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
elected,O
to,O
exercise,O
their,O
rights,O
under,O
the,O
Indenture,O
and,O
the,O
Company,O
elected,O
to,O
contest,O
such,O
election,O
",",O
there,O
could,O
be,O
no,O
assurance,O
as,O
to,O
how,O
a,O
court,O
interpreting,O
New,I-LOCATION
York,I-LOCATION
law,O
would,O
interpret,O
the,O
phrase,O
.,O
,O
The,O
existence,O
of,O
a,O
holder,O
s,O
right,O
to,O
require,O
the,O
Company,O
to,O
repurchase,O
the,O
holder,O
s,O
Series,O
B,O
notes,O
upon,O
a,O
Change,O
of,O
Control,O
may,O
deter,O
a,O
third,O
party,O
from,O
acquiring,O
the,O
Company,O
in,O
a,O
transaction,O
which,O
constitutes,O
a,O
Change,O
of,O
Control,O
.,O
,O
The,O
provisions,O
of,O
the,O
Indenture,O
will,O
not,O
afford,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
the,O
right,O
to,O
require,O
the,O
Company,O
to,O
repurchase,O
the,O
Series,O
B,O
notes,O
in,O
the,O
event,O
of,O
a,O
highly,O
leveraged,O
transaction,O
or,O
certain,O
transactions,O
with,O
the,O
Company,O
s,O
management,O
or,O
its,O
Affiliates,O
",",O
including,O
a,O
reorganization,O
",",O
restructuring,O
",",O
merger,O
or,O
similar,O
transaction,O
(,O
including,O
",",O
in,O
certain,O
circumstances,O
",",O
an,O
acquisition,O
of,O
the,O
Company,O
by,O
management,O
or,O
its,O
Affiliates,O
),O
involving,O
the,O
Company,O
that,O
may,O
adversely,O
affect,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
",",O
unless,O
such,O
transaction,O
is,O
a,O
transaction,O
defined,O
as,O
a,O
Change,O
of,O
Control,O
.,O
,O
A,O
transaction,O
involving,O
the,O
Company,O
s,O
management,O
or,O
its,O
Affiliates,O
",",O
or,O
a,O
transaction,O
involving,O
a,O
recapitalization,O
of,O
the,O
Company,O
",",O
will,O
only,O
result,O
in,O
a,O
Change,O
of,O
Control,O
if,O
it,O
is,O
the,O
type,O
of,O
transaction,O
specified,O
by,O
such,O
definition,O
.,O
,O
The,O
Company,O
will,O
comply,O
with,O
the,O
applicable,O
tender,O
offer,O
rules,O
",",O
including,O
Rule,O
14e-1,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
and,O
any,O
other,O
applicable,O
securities,O
laws,O
or,O
regulations,O
in,O
connection,O
with,O
a,O
Change,O
of,O
Control,O
Offer,O
.,O
,O
To,O
the,O
extent,O
that,O
provisions,O
of,O
any,O
securities,O
laws,O
or,O
regulations,O
conflict,O
with,O
the,O
provisions,O
of,O
this,O
covenant,O
",",O
the,O
Company,O
shall,O
comply,O
with,O
the,O
applicable,O
securities,O
laws,O
and,O
regulations,O
and,O
shall,O
not,O
be,O
deemed,O
to,O
have,O
breached,O
its,O
obligations,O
under,O
this,O
covenant,O
by,O
virtue,O
thereof,O
.,O
,O
The,O
Company,O
will,O
not,O
be,O
required,O
to,O
make,O
a,O
Change,O
of,O
Control,O
Offer,O
upon,O
or,O
in,O
anticipation,O
of,O
a,O
Change,O
of,O
Control,O
if,O
a,O
third,O
party,O
makes,O
the,O
Change,O
of,O
Control,O
Offer,O
in,O
the,O
manner,O
",",O
at,O
the,O
time,O
and,O
otherwise,O
in,O
compliance,O
with,O
the,O
requirements,O
described,O
in,O
the,O
Indenture,O
applicable,O
to,O
a,O
Change,O
of,O
Control,O
Offer,O
made,O
by,O
the,O
Company,O
and,O
purchases,O
all,O
Series,O
B,O
notes,O
validly,O
tendered,O
and,O
not,O
withdrawn,O
under,O
such,O
Change,O
of,O
Control,O
Offer,O
.,O
,O
You,O
should,O
note,O
that,O
case,O
law,O
suggests,O
that,O
",",O
in,O
the,O
event,O
that,O
incumbent,O
directors,O
are,O
replaced,O
as,O
a,O
result,O
of,O
a,O
contested,O
election,O
",",O
the,O
Company,O
may,O
nevertheless,O
avoid,O
triggering,O
a,O
Change,O
of,O
Control,O
under,O
a,O
clause,O
similar,O
to,O
this,O
provision,O
if,O
the,O
outgoing,O
directors,O
were,O
to,O
approve,O
the,O
new,O
directors,O
for,O
the,O
purpose,O
of,O
such,O
Change,O
of,O
Control,O
clause,O
.,O
,O
The,O
payment,O
of,O
the,O
principal,O
of,O
",",O
premium,O
",",O
if,O
any,O
",",O
and,O
interest,O
on,O
",",O
the,O
Series,O
B,O
notes,O
will,O
be,O
subordinated,O
",",O
as,O
set,O
forth,O
in,O
the,O
Indenture,O
",",O
in,O
right,O
of,O
payment,O
",",O
to,O
the,O
prior,O
payment,O
in,O
full,O
of,O
all,O
Senior,O
Indebtedness,O
.,O
,O
The,O
Series,O
B,O
notes,O
will,O
be,O
senior,O
subordinated,O
indebtedness,O
of,O
the,O
Company,O
ranking,O
pari,O
passu,O
with,O
all,O
other,O
existing,O
and,O
future,O
senior,O
subordinated,O
indebtedness,O
of,O
the,O
Company,O
and,O
senior,O
to,O
all,O
existing,O
and,O
future,O
Subordinated,O
Indebtedness,O
of,O
the,O
Company,O
.,O
,O
other,O
acquisition,O
of,O
or,O
in,O
respect,O
of,O
",",O
the,O
Series,O
B,O
notes,O
unless,O
and,O
until,O
such,O
default,O
shall,O
have,O
been,O
cured,O
or,O
waived,O
or,O
shall,O
have,O
ceased,O
to,O
exist,O
or,O
such,O
Designated,O
Senior,O
Indebtedness,O
shall,O
have,O
been,O
discharged,O
or,O
paid,O
in,O
full,O
after,O
which,O
the,O
Company,O
shall,O
resume,O
making,O
any,O
and,O
all,O
required,O
payments,O
in,O
respect,O
of,O
the,O
Series,O
B,O
notes,O
",",O
including,O
any,O
missed,O
payments,O
.,O
,O
Upon,O
the,O
occurrence,O
and,O
during,O
the,O
continuance,O
of,O
any,O
non-payment,O
default,O
or,O
non-payment,O
event,O
of,O
default,O
with,O
respect,O
to,O
any,O
Designated,O
Senior,O
Indebtedness,O
pursuant,O
to,O
which,O
the,O
maturity,O
thereof,O
may,O
then,O
be,O
accelerated,O
immediately,O
(,O
a,O
Non-payment,O
Default,O
),O
and,O
after,O
the,O
receipt,O
by,O
the,O
Trustee,O
and,O
the,O
Company,O
from,O
a,O
Senior,O
Representative,O
of,O
written,O
notice,O
of,O
such,O
Non-payment,O
Default,O
",",O
no,O
payment,O
(,O
other,O
than,O
payments,O
previously,O
made,O
or,O
set,O
aside,O
pursuant,O
to,O
the,O
provisions,O
described,O
under,O
—Defeasance,O
or,O
Covenant,O
Defeasance,O
of,O
Indenture,O
),O
or,O
distribution,O
of,O
any,O
assets,O
of,O
the,O
Company,O
of,O
any,O
kind,O
or,O
character,O
(,O
excluding,O
Permitted,O
Junior,O
Payments,O
),O
may,O
be,O
made,O
by,O
the,O
Company,O
or,O
any,O
Subsidiary,O
on,O
account,O
of,O
the,O
principal,O
of,O
",",O
premium,O
",",O
if,O
any,O
",",O
or,O
interest,O
on,O
",",O
the,O
Series,O
B,O
notes,O
or,O
on,O
account,O
of,O
the,O
purchase,O
",",O
redemption,O
",",O
defeasance,O
or,O
other,O
acquisition,O
of,O
",",O
or,O
in,O
respect,O
of,O
",",O
the,O
Series,O
B,O
notes,O
for,O
the,O
period,O
specified,O
below,O
(,O
the,O
Payment,O
Blockage,O
Period,O
),O
.,O
,O
The,O
Payment,O
Blockage,O
Period,O
shall,O
commence,O
upon,O
the,O
receipt,O
of,O
notice,O
of,O
the,O
Non-payment,O
Default,O
by,O
the,O
Trustee,O
and,O
the,O
Company,O
from,O
a,O
Senior,O
Representative,O
and,O
shall,O
end,O
on,O
the,O
earliest,O
of,O
:,O
,O
After,O
the,O
occurrence,O
of,O
any,O
of,O
the,O
dates,O
set,O
forth,O
in,O
clauses,O
(,O
i,O
),O
",",O
(,O
ii,O
),O
or,O
(,O
iii,O
),O
",",O
the,O
Company,O
will,O
promptly,O
resume,O
making,O
any,O
and,O
all,O
required,O
payments,O
in,O
respect,O
of,O
the,O
Series,O
B,O
notes,O
",",O
including,O
any,O
missed,O
payments,O
.,O
,O
In,O
no,O
event,O
will,O
a,O
Payment,O
Blockage,O
Period,O
extend,O
beyond,O
179,O
days,O
from,O
the,O
date,O
of,O
the,O
receipt,O
by,O
the,O
Company,O
and,O
the,O
Trustee,O
of,O
the,O
notice,O
initiating,O
such,O
Payment,O
Blockage,O
Period,O
(,O
such,O
179-day,O
period,O
referred,O
to,O
as,O
the,O
Initial,O
Period,O
),O
.,O
,O
Any,O
number,O
of,O
notices,O
of,O
Non-payment,O
Defaults,O
may,O
be,O
given,O
during,O
the,O
Initial,O
Period,O
;,O
provided,O
that,O
during,O
any,O
period,O
of,O
365,O
consecutive,O
days,O
only,O
one,O
Payment,O
Blockage,O
Period,O
",",O
during,O
which,O
payment,O
of,O
principal,O
of,O
",",O
premium,O
",",O
if,O
any,O
",",O
or,O
interest,O
on,O
",",O
the,O
Series,O
B,O
notes,O
may,O
not,O
be,O
made,O
",",O
may,O
commence,O
and,O
the,O
duration,O
of,O
such,O
period,O
may,O
not,O
exceed,O
179,O
days,O
.,O
,O
No,O
Non-payment,O
Default,O
with,O
respect,O
to,O
Designated,O
Senior,O
Indebtedness,O
that,O
existed,O
or,O
was,O
continuing,O
on,O
the,O
date,O
of,O
the,O
commencement,O
of,O
any,O
Payment,O
Blockage,O
Period,O
will,O
be,O
",",O
or,O
can,O
be,O
",",O
made,O
the,O
basis,O
for,O
the,O
commencement,O
of,O
a,O
second,O
Payment,O
Blockage,O
Period,O
",",O
whether,O
or,O
not,O
within,O
a,O
period,O
of,O
365,O
consecutive,O
days,O
",",O
unless,O
such,O
default,O
has,O
been,O
cured,O
or,O
waived,O
for,O
a,O
period,O
of,O
not,O
less,O
than,O
90,O
consecutive,O
days,O
.,O
,O
If,O
the,O
Company,O
fails,O
to,O
make,O
any,O
payment,O
on,O
the,O
Series,O
B,O
notes,O
when,O
due,O
or,O
within,O
any,O
applicable,O
grace,O
period,O
",",O
whether,O
or,O
not,O
on,O
account,O
of,O
the,O
payment,O
blockage,O
provisions,O
referred,O
to,O
above,O
",",O
such,O
failure,O
would,O
constitute,O
an,O
Event,O
of,O
Default,O
under,O
the,O
Indenture,O
and,O
would,O
enable,O
the,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
to,O
accelerate,O
the,O
maturity,O
thereof,O
.,O
,O
See,O
Events,O
of,O
Default,O
.,O
,O
previously,O
made,O
pursuant,O
to,O
the,O
provisions,O
described,O
under,O
—Defeasance,O
or,O
Covenant,O
Defeasance,O
of,O
Indenture,O
),O
.,O
,O
By,O
reason,O
of,O
such,O
subordination,O
",",O
in,O
the,O
event,O
of,O
liquidation,O
or,O
insolvency,O
",",O
creditors,O
of,O
the,O
Company,O
who,O
are,O
holders,O
of,O
Senior,O
Indebtedness,O
may,O
recover,O
more,O
",",O
ratably,O
",",O
than,O
the,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
.,O
,O
Funds,O
which,O
would,O
be,O
otherwise,O
payable,O
to,O
the,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
will,O
be,O
paid,O
to,O
the,O
holders,O
of,O
the,O
Senior,O
Indebtedness,O
to,O
the,O
extent,O
necessary,O
to,O
pay,O
the,O
Senior,O
Indebtedness,O
in,O
full,O
and,O
the,O
Company,O
may,O
be,O
unable,O
to,O
meet,O
its,O
obligations,O
fully,O
with,O
respect,O
to,O
the,O
Series,O
B,O
notes,O
.,O
,O
Each,O
Guarantee,O
of,O
a,O
Guarantor,O
will,O
be,O
an,O
unsecured,O
senior,O
subordinated,O
obligation,O
of,O
such,O
Guarantor,O
",",O
ranking,O
pari,O
passu,O
with,O
",",O
or,O
senior,O
in,O
right,O
of,O
payment,O
to,O
",",O
all,O
other,O
existing,O
and,O
future,O
Indebtedness,O
of,O
such,O
Guarantor,O
that,O
is,O
expressly,O
subordinated,O
to,O
Senior,O
Guarantor,O
Indebtedness,O
.,O
,O
The,O
Indebtedness,O
evidenced,O
by,O
the,O
Guarantees,O
will,O
be,O
subordinated,O
to,O
Senior,O
Guarantor,O
Indebtedness,O
to,O
substantially,O
the,O
same,O
extent,O
as,O
the,O
Series,O
B,O
notes,O
are,O
subordinated,O
to,O
Senior,O
Indebtedness,O
and,O
during,O
any,O
period,O
when,O
payment,O
on,O
the,O
Series,O
B,O
notes,O
is,O
blocked,O
by,O
Designated,O
Senior,O
Indebtedness,O
",",O
payment,O
on,O
the,O
Guarantees,O
is,O
similarly,O
blocked,O
.,O
,O
Senior,O
Indebtedness,O
means,O
the,O
principal,O
of,O
",",O
premium,O
",",O
if,O
any,O
",",O
and,O
interest,O
(,O
including,O
interest,O
",",O
to,O
the,O
extent,O
allowable,O
",",O
accruing,O
after,O
the,O
filing,O
of,O
a,O
petition,O
initiating,O
any,O
proceeding,O
under,O
any,O
state,O
",",O
federal,O
or,O
foreign,O
bankruptcy,O
law,O
),O
on,O
any,O
Indebtedness,O
of,O
the,O
Company,O
(,O
other,O
than,O
as,O
otherwise,O
provided,O
in,O
this,O
definition,O
),O
",",O
whether,O
outstanding,O
on,O
the,O
Issue,O
Date,O
or,O
thereafter,O
created,O
",",O
incurred,O
or,O
assumed,O
",",O
and,O
whether,O
at,O
any,O
time,O
owing,O
",",O
actually,O
or,O
contingent,O
",",O
unless,O
",",O
in,O
the,O
case,O
of,O
any,O
particular,O
Indebtedness,O
",",O
the,O
instrument,O
creating,O
or,O
evidencing,O
the,O
same,O
or,O
pursuant,O
to,O
which,O
the,O
same,O
is,O
outstanding,O
expressly,O
provides,O
that,O
such,O
Indebtedness,O
shall,O
not,O
be,O
senior,O
in,O
right,O
of,O
payment,O
to,O
the,O
Series,O
B,O
notes,O
.,O
,O
Designated,O
Senior,O
Indebtedness,O
means,O
(,O
i,O
),O
all,O
Senior,O
Indebtedness,O
under,O
any,O
Inventory,O
Facility,O
",",O
any,O
Mortgage,O
Loans,O
or,O
any,O
Credit,O
Facility,O
and,O
(,O
ii,O
),O
any,O
other,O
Senior,O
Indebtedness,O
which,O
at,O
the,O
time,O
of,O
determination,O
has,O
an,O
aggregate,O
principal,O
amount,O
outstanding,O
of,O
at,O
least,O
$,O
25.0,O
million,O
and,O
which,O
is,O
specifically,O
designated,O
in,O
the,O
instrument,O
evidencing,O
such,O
Senior,O
Indebtedness,O
or,O
the,O
agreement,O
under,O
which,O
such,O
Senior,O
Indebtedness,O
arises,O
as,O
Designated,O
Senior,O
Indebtedness,O
by,O
the,O
Company,O
.,O
,O
Senior,O
Guarantor,O
Indebtedness,O
means,O
the,O
principal,O
of,O
",",O
premium,O
",",O
if,O
any,O
",",O
and,O
interest,O
(,O
including,O
interest,O
",",O
to,O
the,O
extent,O
allowable,O
",",O
accruing,O
after,O
the,O
filing,O
of,O
a,O
petition,O
initiating,O
any,O
proceeding,O
under,O
any,O
state,O
",",O
federal,O
or,O
foreign,O
bankruptcy,O
law,O
),O
on,O
any,O
Indebtedness,O
of,O
any,O
Guarantor,O
(,O
other,O
than,O
as,O
otherwise,O
provided,O
in,O
this,O
definition,O
),O
",",O
whether,O
outstanding,O
on,O
the,O
Issue,O
Date,O
or,O
thereafter,O
created,O
",",O
incurred,O
or,O
assumed,O
",",O
and,O
whether,O
at,O
any,O
time,O
owing,O
",",O
actually,O
or,O
contingent,O
",",O
unless,O
",",O
in,O
the,O
case,O
of,O
any,O
particular,O
Indebtedness,O
",",O
the,O
instrument,O
creating,O
or,O
evidencing,O
the,O
same,O
or,O
pursuant,O
to,O
which,O
the,O
same,O
is,O
outstanding,O
expressly,O
provides,O
that,O
such,O
Indebtedness,O
shall,O
not,O
be,O
senior,O
in,O
right,O
of,O
payment,O
to,O
any,O
Guarantee,O
.,O
,O
The,O
Indenture,O
contains,O
",",O
among,O
others,O
",",O
the,O
following,O
covenants,O
:,O
,O
Limitation,O
on,O
Indebtedness,O
.,O
,O
The,O
Company,O
will,O
not,O
",",O
and,O
will,O
not,O
cause,O
or,O
permit,O
any,O
of,O
its,O
Restricted,O
Subsidiaries,O
to,O
",",O
create,O
",",O
issue,O
",",O
incur,O
",",O
assume,O
",",O
guarantee,O
or,O
otherwise,O
in,O
any,O
manner,O
become,O
directly,O
or,O
indirectly,O
liable,O
for,O
the,O
payment,O
of,O
or,O
otherwise,O
incur,O
",",O
contingently,O
or,O
otherwise,O
(,O
collectively,O
",",O
incur,O
),O
",",O
any,O
Indebtedness,O
(,O
including,O
any,O
Acquired,O
Indebtedness,O
),O
",",O
unless,O
such,O
Indebtedness,O
is,O
incurred,O
by,O
the,O
Company,O
or,O
any,O
Guarantor,O
or,O
constitutes,O
Acquired,O
Indebtedness,O
of,O
a,O
Restricted,O
Subsidiary,O
and,O
",",O
in,O
each,O
case,O
",",O
the,O
Company,O
s,O
Consolidated,O
Fixed,O
Charge,O
Coverage,O
Ratio,O
for,O
the,O
most,O
recent,O
four,O
full,O
fiscal,O
quarters,O
for,O
which,O
financial,O
statements,O
are,O
available,O
immediately,O
preceding,O
the,O
incurrence,O
of,O
such,O
Indebtedness,O
taken,O
as,O
one,O
period,O
is,O
at,O
least,O
equal,O
to,O
or,O
greater,O
than,O
2.00:1,O
.,O
,O
Notwithstanding,O
the,O
foregoing,O
",",O
the,O
Company,O
and,O
",",O
to,O
the,O
extent,O
specifically,O
set,O
forth,O
below,O
",",O
the,O
Restricted,O
Subsidiaries,O
may,O
incur,O
each,O
and,O
all,O
of,O
the,O
following,O
(,O
collectively,O
",",O
the,O
Permitted,O
Indebtedness,O
),O
:,O
,O
For,O
purposes,O
of,O
determining,O
compliance,O
with,O
this,O
Limitation,O
on,O
Indebtedness,O
covenant,O
",",O
in,O
the,O
event,O
that,O
an,O
item,O
of,O
Indebtedness,O
meets,O
the,O
criteria,O
of,O
more,O
than,O
one,O
of,O
the,O
types,O
of,O
Indebtedness,O
permitted,O
by,O
this,O
covenant,O
",",O
the,O
Company,O
in,O
its,O
sole,O
discretion,O
shall,O
classify,O
or,O
reclassify,O
such,O
item,O
of,O
Indebtedness,O
and,O
only,O
be,O
required,O
to,O
include,O
the,O
amount,O
of,O
such,O
Indebtedness,O
as,O
one,O
of,O
such,O
types,O
.,O
,O
The,O
Company,O
may,O
also,O
divide,O
and,O
classify,O
such,O
item,O
of,O
Indebtedness,O
in,O
more,O
than,O
one,O
of,O
the,O
types,O
of,O
Indebtedness,O
described,O
above,O
.,O
,O
Accrual,O
of,O
interest,O
",",O
accretion,O
or,O
amortization,O
of,O
original,O
issue,O
discount,O
and,O
the,O
payment,O
of,O
interest,O
on,O
any,O
Indebtedness,O
in,O
the,O
form,O
of,O
additional,O
Indebtedness,O
with,O
the,O
same,O
terms,O
",",O
and,O
the,O
payment,O
of,O
dividends,O
on,O
any,O
Redeemable,O
Capital,O
Stock,O
or,O
Preferred,O
Stock,O
in,O
the,O
form,O
of,O
additional,O
shares,O
of,O
the,O
same,O
class,O
of,O
Redeemable,O
Capital,O
Stock,O
or,O
Preferred,O
Stock,O
will,O
not,O
be,O
deemed,O
to,O
be,O
an,O
incurrence,O
of,O
Indebtedness,O
for,O
purposes,O
of,O
this,O
covenant,O
provided,O
",",O
in,O
each,O
such,O
case,O
",",O
that,O
the,O
amount,O
thereof,O
as,O
accrued,O
over,O
time,O
is,O
included,O
in,O
the,O
Consolidated,O
Fixed,O
Charge,O
Coverage,O
Ratio,O
of,O
the,O
Company,O
.,O
,O
Limitation,O
on,O
Restricted,O
Payments,O
.,O
,O
(,O
a,O
),O
The,O
Company,O
will,O
not,O
",",O
and,O
will,O
not,O
cause,O
or,O
permit,O
any,O
Restricted,O
Subsidiary,O
to,O
",",O
directly,O
or,O
indirectly,O
:,O
,O
(,O
b,O
),O
Notwithstanding,O
the,O
foregoing,O
",",O
and,O
in,O
the,O
case,O
of,O
clauses,O
(,O
ii,O
),O
through,O
(,O
iv,O
),O
below,O
",",O
so,O
long,O
as,O
no,O
Default,O
or,O
Event,O
of,O
Default,O
is,O
continuing,O
or,O
would,O
arise,O
therefrom,O
",",O
the,O
foregoing,O
provisions,O
shall,O
not,O
prohibit,O
the,O
following,O
actions,O
(,O
each,O
of,O
clauses,O
(,O
i,O
),O
through,O
(,O
iv,O
),O
and,O
(,O
vii,O
),O
through,O
(,O
xiii,O
),O
being,O
referred,O
to,O
as,O
a,O
Permitted,O
Payment,O
),O
:,O
,O
Limitation,O
on,O
Transactions,O
with,O
Affiliates,O
.,O
,O
provided,O
",",O
however,O
",",O
that,O
this,O
provision,O
shall,O
not,O
apply,O
to,O
:,O
,O
Limitation,O
on,O
Liens,O
.,O
,O
The,O
Company,O
will,O
not,O
",",O
and,O
will,O
not,O
cause,O
or,O
permit,O
any,O
Restricted,O
Subsidiary,O
to,O
",",O
directly,O
or,O
indirectly,O
",",O
(,O
1,O
),O
create,O
",",O
incur,O
or,O
affirm,O
any,O
Lien,O
of,O
any,O
kind,O
securing,O
any,O
Pari,O
Passu,O
Indebtedness,O
or,O
Subordinated,O
Indebtedness,O
",",O
including,O
any,O
assumption,O
",",O
guarantee,O
or,O
other,O
liability,O
with,O
respect,O
thereto,O
by,O
any,O
Restricted,O
Subsidiary,O
",",O
upon,O
any,O
property,O
or,O
assets,O
(,O
including,O
any,O
intercompany,O
notes,O
),O
of,O
the,O
Company,O
or,O
any,O
Restricted,O
Subsidiary,O
owned,O
on,O
the,O
Issue,O
Date,O
or,O
acquired,O
after,O
the,O
Issue,O
Date,O
",",O
or,O
(,O
2,O
),O
assign,O
or,O
convey,O
any,O
right,O
to,O
receive,O
any,O
income,O
or,O
profits,O
from,O
such,O
Liens,O
",",O
unless,O
the,O
Series,O
B,O
notes,O
or,O
a,O
Guarantee,O
in,O
the,O
case,O
of,O
Liens,O
of,O
a,O
Guarantor,O
are,O
directly,O
secured,O
equally,O
and,O
ratably,O
with,O
(,O
or,O
",",O
in,O
the,O
case,O
of,O
Subordinated,O
Indebtedness,O
",",O
prior,O
or,O
senior,O
thereto,O
",",O
with,O
the,O
same,O
relative,O
priority,O
as,O
the,O
Series,O
B,O
notes,O
shall,O
have,O
with,O
respect,O
to,O
such,O
Subordinated,O
Indebtedness,O
),O
the,O
obligation,O
or,O
liability,O
secured,O
by,O
such,O
Lien,O
except,O
for,O
Liens,O
:,O
,O
provided,O
",",O
however,O
",",O
that,O
in,O
the,O
case,O
of,O
clauses,O
(,O
A,O
),O
and,O
(,O
B,O
),O
",",O
any,O
such,O
Lien,O
only,O
extends,O
to,O
the,O
assets,O
that,O
were,O
subject,O
to,O
such,O
Lien,O
securing,O
such,O
Indebtedness,O
prior,O
to,O
the,O
related,O
acquisition,O
by,O
the,O
Company,O
or,O
its,O
Restricted,O
Subsidiaries,O
.,O
,O
Notwithstanding,O
the,O
foregoing,O
",",O
any,O
Lien,O
securing,O
the,O
Series,O
B,O
notes,O
granted,O
pursuant,O
to,O
this,O
covenant,O
shall,O
be,O
automatically,O
and,O
unconditionally,O
released,O
and,O
discharged,O
upon,O
the,O
release,O
by,O
the,O
holder,O
or,O
holders,O
of,O
the,O
Pari,O
Passu,O
Indebtedness,O
or,O
Subordinated,O
Indebtedness,O
described,O
above,O
of,O
their,O
Lien,O
on,O
the,O
property,O
or,O
assets,O
of,O
the,O
Company,O
or,O
any,O
Restricted,O
Subsidiary,O
(,O
including,O
any,O
deemed,O
release,O
upon,O
payment,O
in,O
full,O
of,O
all,O
obligations,O
under,O
such,O
Indebtedness,O
),O
",",O
at,O
such,O
time,O
as,O
the,O
holder,O
or,O
holders,O
of,O
all,O
such,O
Pari,O
Passu,O
Indebtedness,O
or,O
Subordinated,O
Indebtedness,O
also,O
release,O
their,O
Lien,O
on,O
the,O
property,O
or,O
assets,O
of,O
the,O
Company,O
or,O
such,O
Restricted,O
Subsidiary,O
",",O
or,O
upon,O
any,O
sale,O
",",O
exchange,O
or,O
transfer,O
to,O
any,O
Person,O
not,O
an,O
Affiliate,O
of,O
the,O
Company,O
of,O
the,O
property,O
or,O
assets,O
secured,O
by,O
such,O
Lien,O
",",O
or,O
of,O
all,O
of,O
the,O
Capital,O
Stock,O
held,O
by,O
the,O
Company,O
or,O
any,O
Restricted,O
Subsidiary,O
in,O
",",O
or,O
all,O
or,O
substantially,O
all,O
the,O
assets,O
of,O
",",O
any,O
Restricted,O
Subsidiary,O
creating,O
such,O
Lien,O
.,O
,O
Limitation,O
on,O
Sale,O
of,O
Assets,O
.,O
,O
(,O
a,O
),O
The,O
Company,O
will,O
not,O
",",O
and,O
will,O
not,O
cause,O
or,O
permit,O
any,O
of,O
its,O
Restricted,O
Subsidiaries,O
to,O
",",O
directly,O
or,O
indirectly,O
",",O
consummate,O
an,O
Asset,O
Sale,O
unless,O
(,O
i,O
),O
at,O
least,O
75,O
%,O
of,O
the,O
consideration,O
from,O
such,O
Asset,O
Sale,O
consists,O
of,O
:,O
,O
(,O
ii,O
),O
the,O
Company,O
or,O
such,O
Restricted,O
Subsidiary,O
receives,O
consideration,O
at,O
the,O
time,O
of,O
such,O
Asset,O
Sale,O
at,O
least,O
equal,O
to,O
the,O
Fair,O
Market,O
Value,O
of,O
the,O
shares,O
or,O
assets,O
subject,O
to,O
such,O
Asset,O
Sale,O
(,O
as,O
determined,O
by,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Company,O
and,O
evidenced,O
in,O
a,O
board,O
resolution,O
),O
;,O
provided,O
that,O
any,O
notes,O
or,O
other,O
obligations,O
received,O
by,O
the,O
Company,O
or,O
any,O
such,O
Restricted,O
Subsidiary,O
from,O
any,O
transferee,O
of,O
assets,O
from,O
the,O
Company,O
or,O
such,O
Restricted,O
Subsidiary,O
that,O
are,O
converted,O
by,O
the,O
Company,O
or,O
such,O
Restricted,O
Subsidiary,O
into,O
cash,O
at,O
Fair,O
Market,O
Value,O
within,O
30,O
days,O
after,O
receipt,O
shall,O
be,O
deemed,O
to,O
be,O
cash,O
for,O
purposes,O
of,O
this,O
provision,O
.,O
,O
then,O
the,O
Company,O
or,O
a,O
Restricted,O
Subsidiary,O
may,O
within,O
365,O
days,O
of,O
the,O
Asset,O
Sale,O
invest,O
the,O
Net,O
Cash,O
Proceeds,O
in,O
Replacement,O
Assets,O
.,O
,O
The,O
amount,O
of,O
such,O
Net,O
Cash,O
Proceeds,O
not,O
used,O
or,O
invested,O
within,O
365,O
days,O
of,O
the,O
Asset,O
Sale,O
as,O
set,O
forth,O
in,O
this,O
paragraph,O
constitutes,O
Excess,O
Proceeds,O
.,O
,O
(,O
c,O
),O
When,O
the,O
aggregate,O
amount,O
of,O
Excess,O
Proceeds,O
exceeds,O
$,O
25.0,O
million,O
or,O
more,O
",",O
the,O
Company,O
will,O
apply,O
the,O
Excess,O
Proceeds,O
to,O
the,O
repayment,O
of,O
the,O
Series,O
B,O
notes,O
and,O
any,O
other,O
Pari,O
Passu,O
Indebtedness,O
outstanding,O
with,O
similar,O
provisions,O
requiring,O
the,O
Company,O
to,O
make,O
an,O
offer,O
to,O
purchase,O
such,O
Indebtedness,O
with,O
the,O
proceeds,O
from,O
any,O
Asset,O
Sale,O
as,O
follows,O
:,O
,O
However,O
",",O
in,O
no,O
event,O
will,O
the,O
Company,O
be,O
required,O
to,O
make,O
a,O
Pari,O
Passu,O
Offer,O
in,O
a,O
Pari,O
Passu,O
Debt,O
Amount,O
exceeding,O
the,O
principal,O
amount,O
of,O
such,O
Pari,O
Passu,O
Indebtedness,O
plus,O
the,O
amount,O
of,O
any,O
premium,O
required,O
to,O
be,O
paid,O
to,O
repurchase,O
such,O
Pari,O
Passu,O
Indebtedness,O
.,O
,O
The,O
offer,O
price,O
for,O
the,O
Series,O
B,O
notes,O
will,O
be,O
payable,O
in,O
cash,O
in,O
an,O
amount,O
equal,O
to,O
100,O
%,O
of,O
the,O
principal,O
amount,O
of,O
the,O
Series,O
B,O
notes,O
plus,O
accrued,O
and,O
unpaid,O
interest,O
",",O
if,O
any,O
",",O
to,O
the,O
date,O
(,O
the,O
Offer,O
Date,O
),O
such,O
Offer,O
is,O
consummated,O
(,O
the,O
Offered,O
Price,O
),O
",",O
in,O
accordance,O
with,O
the,O
procedures,O
set,O
forth,O
in,O
the,O
Indenture,O
.,O
,O
Amount,O
",",O
the,O
Company,O
may,O
use,O
any,O
remaining,O
Excess,O
Proceeds,O
for,O
general,O
corporate,O
purposes,O
.,O
,O
If,O
the,O
aggregate,O
principal,O
amount,O
of,O
Series,O
B,O
notes,O
and,O
Pari,O
Passu,O
Indebtedness,O
surrendered,O
by,O
holders,O
thereof,O
exceeds,O
the,O
amount,O
of,O
Excess,O
Proceeds,O
",",O
the,O
Trustee,O
shall,O
select,O
the,O
Series,O
B,O
notes,O
to,O
be,O
purchased,O
on,O
a,O
pro,O
rata,O
basis,O
.,O
,O
Upon,O
the,O
completion,O
of,O
the,O
purchase,O
of,O
all,O
the,O
Series,O
B,O
notes,O
tendered,O
pursuant,O
to,O
an,O
Offer,O
and,O
the,O
completion,O
of,O
a,O
Pari,O
Passu,O
Offer,O
",",O
the,O
amount,O
of,O
Excess,O
Proceeds,O
",",O
if,O
any,O
",",O
shall,O
be,O
reset,O
at,O
zero,O
.,O
,O
(,O
d,O
),O
If,O
the,O
Company,O
becomes,O
obligated,O
to,O
make,O
an,O
Offer,O
pursuant,O
to,O
clause,O
(,O
c,O
),O
above,O
",",O
the,O
Series,O
B,O
notes,O
and,O
the,O
Pari,O
Passu,O
Indebtedness,O
shall,O
be,O
purchased,O
by,O
the,O
Company,O
",",O
at,O
the,O
option,O
of,O
the,O
holders,O
thereof,O
",",O
in,O
whole,O
or,O
in,O
part,O
in,O
integral,O
multiples,O
of,O
$,O
"1,000",O
",",O
on,O
a,O
date,O
that,O
is,O
not,O
earlier,O
than,O
30,O
days,O
and,O
not,O
later,O
than,O
60,O
days,O
from,O
the,O
date,O
the,O
notice,O
of,O
the,O
Offer,O
is,O
given,O
to,O
holders,O
",",O
or,O
such,O
later,O
date,O
as,O
may,O
be,O
necessary,O
for,O
the,O
Company,O
to,O
comply,O
with,O
the,O
requirements,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
(,O
e,O
),O
The,O
Indenture,O
will,O
provide,O
that,O
the,O
Company,O
will,O
comply,O
with,O
the,O
applicable,O
tender,O
offer,O
rules,O
",",O
including,O
Rule,O
14e-1,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
and,O
any,O
other,O
applicable,O
securities,O
laws,O
or,O
regulations,O
in,O
connection,O
with,O
an,O
Offer,O
.,O
,O
Limitation,O
on,O
Issuances,O
of,O
Guarantees,O
of,O
and,O
Pledges,O
for,O
Indebtedness,O
.,O
,O
(,O
a,O
),O
The,O
Company,O
will,O
not,O
cause,O
or,O
permit,O
any,O
Restricted,O
Subsidiary,O
",",O
other,O
than,O
a,O
Guarantor,O
",",O
directly,O
or,O
indirectly,O
",",O
to,O
secure,O
the,O
payment,O
of,O
any,O
Senior,O
Indebtedness,O
of,O
the,O
Company,O
and,O
the,O
Company,O
will,O
not,O
",",O
and,O
will,O
not,O
permit,O
any,O
Restricted,O
Subsidiary,O
to,O
",",O
pledge,O
any,O
intercompany,O
notes,O
representing,O
obligations,O
of,O
any,O
Restricted,O
Subsidiary,O
(,O
other,O
than,O
a,O
Guarantor,O
),O
to,O
secure,O
the,O
payment,O
of,O
any,O
Senior,O
Indebtedness,O
unless,O
in,O
each,O
case,O
such,O
Restricted,O
Subsidiary,O
executes,O
and,O
delivers,O
a,O
supplemental,O
indenture,O
to,O
the,O
Indenture,O
providing,O
for,O
a,O
guarantee,O
of,O
payment,O
of,O
the,O
Series,O
B,O
notes,O
by,O
such,O
Restricted,O
Subsidiary,O
within,O
30,O
days,O
.,O
,O
The,O
guarantee,O
shall,O
be,O
on,O
the,O
same,O
terms,O
as,O
the,O
guarantee,O
of,O
the,O
Senior,O
Indebtedness,O
(,O
if,O
a,O
guarantee,O
of,O
Senior,O
Indebtedness,O
is,O
granted,O
by,O
any,O
such,O
Restricted,O
Subsidiary,O
),O
except,O
that,O
the,O
guarantee,O
of,O
the,O
Series,O
B,O
notes,O
need,O
not,O
be,O
secured,O
and,O
shall,O
be,O
subordinated,O
to,O
the,O
claims,O
against,O
such,O
Restricted,O
Subsidiary,O
in,O
respect,O
of,O
Senior,O
Indebtedness,O
to,O
the,O
same,O
extent,O
as,O
the,O
Series,O
B,O
notes,O
are,O
subordinated,O
to,O
Senior,O
Indebtedness,O
of,O
the,O
Company,O
under,O
the,O
Indenture,O
.,O
,O
interest,O
in,O
or,O
guarantee,O
by,O
such,O
Restricted,O
Subsidiary,O
(,O
including,O
any,O
deemed,O
release,O
upon,O
payment,O
in,O
full,O
of,O
all,O
obligations,O
under,O
such,O
Indebtedness,O
),O
.,O
,O
Limitation,O
on,O
Senior,O
Subordinated,O
Indebtedness,O
.,O
,O
The,O
Company,O
will,O
not,O
",",O
and,O
will,O
not,O
permit,O
or,O
cause,O
any,O
Guarantor,O
to,O
",",O
directly,O
or,O
indirectly,O
",",O
create,O
",",O
incur,O
",",O
issue,O
",",O
assume,O
",",O
guarantee,O
or,O
otherwise,O
in,O
any,O
manner,O
become,O
directly,O
or,O
indirectly,O
liable,O
for,O
or,O
with,O
respect,O
to,O
or,O
otherwise,O
permit,O
to,O
exist,O
any,O
Indebtedness,O
that,O
is,O
subordinate,O
in,O
right,O
of,O
payment,O
to,O
any,O
Indebtedness,O
of,O
the,O
Company,O
or,O
such,O
Guarantor,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
unless,O
such,O
Indebtedness,O
is,O
also,O
pari,O
passu,O
with,O
the,O
Series,O
B,O
notes,O
or,O
the,O
Guarantee,O
of,O
such,O
Guarantor,O
or,O
subordinated,O
in,O
right,O
of,O
payment,O
to,O
the,O
Series,O
B,O
notes,O
or,O
such,O
Guarantee,O
at,O
least,O
to,O
the,O
same,O
extent,O
as,O
the,O
Series,O
B,O
notes,O
or,O
such,O
Guarantee,O
are,O
subordinated,O
in,O
right,O
of,O
payment,O
to,O
Senior,O
Indebtedness,O
or,O
such,O
Guarantor,O
s,O
Senior,O
Guarantor,O
Indebtedness,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
as,O
set,O
forth,O
in,O
the,O
Indenture,O
.,O
,O
The,O
Indenture,O
does,O
not,O
treat,O
(,O
i,O
),O
unsecured,O
Indebtedness,O
as,O
subordinated,O
or,O
junior,O
to,O
secured,O
Indebtedness,O
merely,O
because,O
it,O
is,O
unsecured,O
or,O
(,O
ii,O
),O
Senior,O
Indebtedness,O
as,O
subordinated,O
or,O
junior,O
to,O
any,O
other,O
Senior,O
Indebtedness,O
merely,O
because,O
it,O
has,O
a,O
junior,O
priority,O
with,O
respect,O
to,O
the,O
same,O
collateral,O
.,O
,O
Limitation,O
on,O
Subsidiary,O
Preferred,O
Stock,O
.,O
,O
Limitation,O
on,O
Dividends,O
and,O
Other,O
Payment,O
Restrictions,O
Affecting,O
Subsidiaries,O
.,O
,O
Limitation,O
on,O
Unrestricted,O
Subsidiaries,O
.,O
,O
The,O
Company,O
may,O
designate,O
after,O
the,O
Issue,O
Date,O
any,O
Subsidiary,O
as,O
an,O
Unrestricted,O
Subsidiary,O
under,O
the,O
Indenture,O
(,O
a,O
Designation,O
),O
only,O
if,O
:,O
,O
(,O
a,O
),O
no,O
Default,O
shall,O
have,O
occurred,O
and,O
be,O
continuing,O
at,O
the,O
time,O
of,O
or,O
after,O
giving,O
effect,O
to,O
such,O
Designation,O
;,O
,O
on,O
Restricted,O
Payments,O
above,O
in,O
an,O
amount,O
(,O
the,O
Designation,O
Amount,O
),O
equal,O
to,O
the,O
greater,O
of,O
(,O
1,O
),O
the,O
net,O
book,O
value,O
of,O
the,O
Company,O
s,O
interest,O
in,O
such,O
Subsidiary,O
calculated,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
or,O
(,O
2,O
),O
the,O
Fair,O
Market,O
Value,O
of,O
the,O
Company,O
s,O
interest,O
in,O
such,O
Subsidiary,O
as,O
determined,O
in,O
good,O
faith,O
by,O
the,O
Company,O
s,O
Board,O
of,O
Directors,O
;,O
,O
(,O
c,O
),O
the,O
Company,O
would,O
be,O
permitted,O
under,O
the,O
Indenture,O
to,O
incur,O
$,O
1.00,O
of,O
additional,O
Indebtedness,O
(,O
other,O
than,O
Permitted,O
Indebtedness,O
),O
pursuant,O
to,O
the,O
covenant,O
described,O
under,O
—Limitation,O
on,O
Indebtedness,O
at,O
the,O
time,O
of,O
such,O
Designation,O
(,O
assuming,O
the,O
effectiveness,O
of,O
such,O
Designation,O
),O
;,O
,O
(,O
d,O
),O
such,O
Unrestricted,O
Subsidiary,O
does,O
not,O
own,O
any,O
Capital,O
Stock,O
in,O
any,O
Restricted,O
Subsidiary,O
of,O
the,O
Company,O
which,O
is,O
not,O
simultaneously,O
being,O
designated,O
an,O
Unrestricted,O
Subsidiary,O
;,O
,O
(,O
f,O
),O
such,O
Unrestricted,O
Subsidiary,O
is,O
not,O
a,O
party,O
to,O
any,O
agreement,O
",",O
contract,O
",",O
arrangement,O
or,O
understanding,O
at,O
such,O
time,O
with,O
the,O
Company,O
or,O
any,O
Restricted,O
Subsidiary,O
unless,O
the,O
terms,O
of,O
any,O
such,O
agreement,O
",",O
contract,O
",",O
arrangement,O
or,O
understanding,O
are,O
no,O
less,O
favorable,O
to,O
the,O
Company,O
or,O
such,O
Restricted,O
Subsidiary,O
than,O
those,O
that,O
might,O
be,O
obtained,O
at,O
the,O
time,O
from,O
Persons,O
who,O
are,O
not,O
Affiliates,O
of,O
the,O
Company,O
or,O
",",O
in,O
the,O
event,O
such,O
condition,O
is,O
not,O
satisfied,O
",",O
the,O
value,O
of,O
such,O
agreement,O
",",O
contract,O
",",O
arrangement,O
or,O
understanding,O
to,O
such,O
Unrestricted,O
Subsidiary,O
shall,O
be,O
deemed,O
a,O
Restricted,O
Payment,O
.,O
,O
In,O
the,O
event,O
of,O
any,O
such,O
Designation,O
",",O
the,O
Company,O
shall,O
be,O
deemed,O
to,O
have,O
made,O
an,O
Investment,O
constituting,O
a,O
Restricted,O
Payment,O
pursuant,O
to,O
the,O
covenant,O
—Limitation,O
on,O
Restricted,O
Payments,O
for,O
all,O
purposes,O
of,O
the,O
Indenture,O
in,O
the,O
Designation,O
Amount,O
.,O
,O
The,O
Indenture,O
will,O
also,O
provide,O
that,O
the,O
Company,O
shall,O
not,O
and,O
shall,O
not,O
cause,O
or,O
permit,O
any,O
Restricted,O
Subsidiary,O
to,O
at,O
any,O
time,O
(,O
x,O
),O
provide,O
credit,O
support,O
for,O
",",O
or,O
subject,O
any,O
of,O
its,O
property,O
or,O
assets,O
",",O
other,O
than,O
the,O
Capital,O
Stock,O
of,O
any,O
Unrestricted,O
Subsidiary,O
",",O
to,O
the,O
satisfaction,O
of,O
",",O
any,O
Indebtedness,O
of,O
any,O
Unrestricted,O
Subsidiary,O
",",O
including,O
any,O
undertaking,O
",",O
agreement,O
or,O
instrument,O
evidencing,O
such,O
Indebtedness,O
",",O
(,O
other,O
than,O
Permitted,O
Investments,O
in,O
Unrestricted,O
Subsidiaries,O
),O
or,O
(,O
y,O
),O
be,O
directly,O
or,O
indirectly,O
liable,O
for,O
any,O
Indebtedness,O
of,O
any,O
Unrestricted,O
Subsidiary,O
.,O
,O
For,O
purposes,O
of,O
the,O
foregoing,O
",",O
the,O
Designation,O
of,O
a,O
Subsidiary,O
of,O
the,O
Company,O
as,O
an,O
Unrestricted,O
Subsidiary,O
shall,O
be,O
deemed,O
to,O
be,O
the,O
Designation,O
of,O
all,O
of,O
the,O
Subsidiaries,O
of,O
such,O
Subsidiary,O
.,O
,O
The,O
Company,O
may,O
revoke,O
any,O
Designation,O
of,O
a,O
Subsidiary,O
as,O
an,O
Unrestricted,O
Subsidiary,O
(,O
a,O
Revocation,O
),O
if,O
:,O
,O
All,O
Designations,O
and,O
Revocations,O
must,O
be,O
evidenced,O
by,O
a,O
resolution,O
of,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Company,O
delivered,O
to,O
the,O
Trustee,O
certifying,O
compliance,O
with,O
the,O
foregoing,O
provisions,O
.,O
,O
Provision,O
of,O
Financial,O
Statements,O
.,O
,O
Whether,O
or,O
not,O
the,O
Company,O
is,O
subject,O
to,O
Section,O
13,O
(,O
a,O
),O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
the,O
Company,O
and,O
each,O
Guarantor,O
(,O
to,O
the,O
extent,O
such,O
Guarantor,O
would,O
be,O
required,O
if,O
subject,O
to,O
Section,O
13,O
(,O
a,O
),O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
will,O
",",O
to,O
the,O
extent,O
permitted,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
,O
file,O
with,O
the,O
Commission,O
the,O
annual,O
reports,O
",",O
quarterly,O
reports,O
and,O
other,O
documents,O
which,O
the,O
Company,O
and,O
such,O
Guarantor,O
would,O
have,O
been,O
required,O
to,O
file,O
with,O
the,O
Commission,O
pursuant,O
to,O
Sections,O
13,O
(,O
a,O
),O
or,O
15,O
(,O
d,O
),O
if,O
the,O
Company,O
or,O
such,O
Guarantor,O
were,O
so,O
subject,O
.,O
,O
The,O
documents,O
are,O
to,O
be,O
filed,O
with,O
the,O
Commission,O
on,O
or,O
prior,O
to,O
the,O
date,O
(,O
the,O
Required,O
Filing,O
Date,O
),O
by,O
which,O
the,O
Company,O
and,O
such,O
Guarantor,O
would,O
have,O
been,O
required,O
so,O
to,O
file,O
such,O
documents,O
if,O
the,O
Company,O
and,O
such,O
Guarantor,O
were,O
so,O
subject,O
.,O
,O
(,O
y,O
),O
if,O
filing,O
such,O
documents,O
by,O
the,O
Company,O
and,O
such,O
Guarantor,O
with,O
the,O
Commission,O
is,O
not,O
permitted,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
promptly,O
upon,O
written,O
request,O
and,O
payment,O
of,O
the,O
reasonable,O
cost,O
of,O
duplication,O
and,O
delivery,O
",",O
supply,O
copies,O
of,O
such,O
documents,O
to,O
any,O
prospective,O
holder,O
at,O
the,O
Company,O
s,O
cost,O
.,O
,O
If,O
any,O
Guarantor,O
s,O
financial,O
statements,O
would,O
be,O
required,O
to,O
be,O
included,O
in,O
the,O
financial,O
statements,O
filed,O
or,O
delivered,O
pursuant,O
to,O
the,O
Indenture,O
if,O
the,O
Company,O
were,O
subject,O
to,O
Section,O
13,O
(,O
a,O
),O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
the,O
Company,O
shall,O
include,O
such,O
Guarantor,O
s,O
financial,O
statements,O
in,O
any,O
filing,O
or,O
delivery,O
pursuant,O
to,O
the,O
Indenture,O
.,O
,O
The,O
Indenture,O
also,O
provides,O
that,O
",",O
so,O
long,O
as,O
any,O
of,O
the,O
Series,O
A,O
notes,O
remain,O
outstanding,O
",",O
the,O
Company,O
will,O
make,O
available,O
to,O
any,O
prospective,O
purchaser,O
of,O
Series,O
A,O
notes,O
or,O
beneficial,O
owner,O
of,O
Series,O
A,O
notes,O
in,O
connection,O
with,O
any,O
sale,O
thereof,O
the,O
information,O
required,O
by,O
Rule,O
144A,O
(,O
d,O
),O
(,O
4,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
until,O
such,O
time,O
as,O
the,O
Company,O
has,O
either,O
exchanged,O
the,O
Series,O
A,O
notes,O
for,O
securities,O
identical,O
in,O
all,O
material,O
respects,O
which,O
have,O
been,O
registered,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
or,O
until,O
such,O
time,O
as,O
the,O
holders,O
thereof,O
have,O
disposed,O
of,O
such,O
Series,O
A,O
notes,O
pursuant,O
to,O
an,O
effective,O
registration,O
statement,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
The,O
Indenture,O
also,O
contains,O
covenants,O
with,O
respect,O
to,O
the,O
following,O
matters,O
:,O
,O
and,O
its,O
Restricted,O
Subsidiaries,O
on,O
a,O
Consolidated,O
basis,O
to,O
any,O
other,O
Person,O
or,O
group,O
of,O
Persons,O
",",O
unless,O
at,O
the,O
time,O
and,O
after,O
giving,O
effect,O
thereto,O
:,O
,O
assets,O
of,O
the,O
Guarantor,O
and,O
its,O
Restricted,O
Subsidiaries,O
on,O
a,O
Consolidated,O
basis,O
to,O
any,O
other,O
Person,O
or,O
group,O
of,O
Persons,O
(,O
other,O
than,O
the,O
Company,O
or,O
any,O
Guarantor,O
),O
",",O
unless,O
at,O
the,O
time,O
and,O
after,O
giving,O
effect,O
thereto,O
:,O
,O
However,O
",",O
the,O
foregoing,O
limitations,O
do,O
not,O
apply,O
to,O
any,O
Guarantor,O
whose,O
Guarantee,O
of,O
the,O
Series,O
B,O
notes,O
is,O
unconditionally,O
released,O
and,O
discharged,O
in,O
accordance,O
with,O
paragraph,O
(,O
c,O
),O
under,O
the,O
provisions,O
of,O
Certain,O
Covenants,O
Limitation,O
on,O
Issuances,O
of,O
Guarantees,O
of,O
and,O
Pledges,O
for,O
Indebtedness,O
.,O
,O
In,O
the,O
event,O
of,O
any,O
transaction,O
described,O
in,O
and,O
complying,O
with,O
the,O
conditions,O
listed,O
in,O
the,O
two,O
immediately,O
preceding,O
subsections,O
in,O
which,O
the,O
Company,O
or,O
any,O
Guarantor,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
is,O
not,O
the,O
continuing,O
corporation,O
",",O
the,O
successor,O
Person,O
formed,O
or,O
remaining,O
or,O
to,O
which,O
such,O
transfer,O
",",O
sale,O
",",O
assignment,O
",",O
conveyance,O
",",O
lease,O
or,O
other,O
transaction,O
is,O
made,O
shall,O
succeed,O
to,O
",",O
and,O
be,O
substituted,O
for,O
",",O
and,O
may,O
exercise,O
every,O
right,O
and,O
power,O
of,O
",",O
the,O
Company,O
or,O
such,O
Guarantor,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
under,O
the,O
Indenture,O
",",O
the,O
Series,O
B,O
notes,O
and/or,O
the,O
related,O
Guarantees,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
and,O
the,O
Company,O
or,O
any,O
Guarantor,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
shall,O
be,O
discharged,O
from,O
all,O
obligations,O
and,O
covenants,O
under,O
the,O
Indenture,O
and,O
the,O
Series,O
B,O
notes,O
or,O
its,O
Guarantee,O
",",O
as,O
the,O
case,O
may,O
be,O
.,O
,O
Nothing,O
in,O
this,O
covenant,O
shall,O
prohibit,O
a,O
merger,O
or,O
consolidation,O
of,O
the,O
Company,O
or,O
any,O
of,O
the,O
Guarantors,O
into,O
an,O
Affiliate,O
organized,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
solely,O
for,O
the,O
purpose,O
of,O
changing,O
the,O
entity,O
s,O
jurisdiction,O
of,O
organization,O
.,O
,O
An,O
Event,O
of,O
Default,O
will,O
occur,O
under,O
the,O
Indenture,O
if,O
:,O
,O
(,O
b,O
),O
there,O
shall,O
be,O
a,O
default,O
in,O
the,O
performance,O
or,O
breach,O
of,O
the,O
provisions,O
described,O
in,O
—Consolidation,O
",",O
Merger,O
",",O
Sale,O
of,O
Assets,O
;,O
,O
(,O
d,O
),O
the,O
Company,O
shall,O
have,O
failed,O
to,O
consummate,O
a,O
Change,O
of,O
Control,O
Offer,O
in,O
accordance,O
with,O
the,O
provisions,O
of,O
—Purchase,O
of,O
Series,O
B,O
Notes,O
Upon,O
a,O
Change,O
of,O
Control,O
;,O
,O
(,O
b,O
),O
the,O
Company,O
or,O
any,O
Significant,O
Restricted,O
Subsidiary,O
consents,O
to,O
the,O
entry,O
of,O
a,O
decree,O
or,O
order,O
for,O
relief,O
in,O
respect,O
of,O
the,O
Company,O
or,O
such,O
Significant,O
Restricted,O
Subsidiary,O
in,O
an,O
involuntary,O
case,O
or,O
proceeding,O
under,O
any,O
applicable,O
Bankruptcy,O
Law,O
or,O
to,O
the,O
commencement,O
of,O
any,O
bankruptcy,O
or,O
insolvency,O
case,O
or,O
proceeding,O
against,O
it,O
;,O
,O
(,O
c,O
),O
the,O
Company,O
or,O
any,O
Significant,O
Restricted,O
Subsidiary,O
files,O
a,O
petition,O
or,O
answer,O
or,O
consent,O
seeking,O
reorganization,O
or,O
relief,O
under,O
any,O
applicable,O
federal,O
or,O
state,O
law,O
;,O
,O
(,O
e,O
),O
the,O
Company,O
or,O
any,O
Significant,O
Restricted,O
Subsidiary,O
takes,O
any,O
corporate,O
action,O
in,O
furtherance,O
of,O
any,O
such,O
actions,O
in,O
this,O
paragraph,O
(,O
8,O
),O
.,O
,O
If,O
an,O
Event,O
of,O
Default,O
(,O
other,O
than,O
as,O
specified,O
in,O
clauses,O
(,O
7,O
),O
and,O
(,O
8,O
),O
of,O
the,O
prior,O
paragraph,O
),O
shall,O
occur,O
and,O
be,O
continuing,O
with,O
respect,O
to,O
the,O
Indenture,O
",",O
the,O
Trustee,O
or,O
the,O
holders,O
of,O
not,O
less,O
than,O
25,O
%,O
in,O
aggregate,O
principal,O
amount,O
of,O
the,O
Series,O
B,O
notes,O
then,O
outstanding,O
may,O
",",O
and,O
the,O
Trustee,O
at,O
the,O
request,O
of,O
such,O
holders,O
shall,O
",",O
declare,O
all,O
unpaid,O
principal,O
of,O
",",O
premium,O
",",O
if,O
any,O
",",O
and,O
accrued,O
interest,O
on,O
all,O
Series,O
B,O
notes,O
to,O
be,O
due,O
and,O
payable,O
immediately,O
",",O
by,O
a,O
notice,O
in,O
writing,O
to,O
the,O
Company,O
(,O
and,O
to,O
the,O
Trustee,O
if,O
given,O
by,O
the,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
),O
.,O
,O
Upon,O
any,O
such,O
declaration,O
",",O
such,O
principal,O
",",O
premium,O
",",O
if,O
any,O
",",O
and,O
interest,O
shall,O
become,O
due,O
and,O
payable,O
immediately,O
.,O
,O
If,O
an,O
Event,O
of,O
Default,O
specified,O
in,O
clause,O
(,O
7,O
),O
or,O
(,O
8,O
),O
of,O
the,O
prior,O
paragraph,O
occurs,O
and,O
is,O
continuing,O
",",O
then,O
all,O
the,O
Series,O
B,O
notes,O
shall,O
ipso,O
facto,O
become,O
and,O
be,O
due,O
and,O
payable,O
immediately,O
in,O
an,O
amount,O
equal,O
to,O
the,O
principal,O
amount,O
of,O
the,O
Series,O
B,O
notes,O
",",O
together,O
with,O
accrued,O
and,O
unpaid,O
interest,O
",",O
if,O
any,O
",",O
to,O
the,O
date,O
the,O
Series,O
B,O
notes,O
become,O
due,O
and,O
payable,O
",",O
without,O
any,O
declaration,O
or,O
other,O
act,O
on,O
the,O
part,O
of,O
the,O
Trustee,O
or,O
any,O
holder,O
.,O
,O
Thereupon,O
",",O
the,O
Trustee,O
may,O
",",O
at,O
its,O
discretion,O
",",O
proceed,O
to,O
protect,O
and,O
enforce,O
the,O
rights,O
of,O
the,O
holders,O
of,O
Series,O
B,O
notes,O
by,O
appropriate,O
judicial,O
proceedings,O
.,O
,O
After,O
a,O
declaration,O
of,O
acceleration,O
",",O
but,O
before,O
a,O
judgment,O
or,O
decree,O
for,O
payment,O
of,O
the,O
money,O
due,O
has,O
been,O
obtained,O
by,O
the,O
Trustee,O
",",O
the,O
holders,O
of,O
a,O
majority,O
in,O
aggregate,O
principal,O
amount,O
of,O
Series,O
B,O
notes,O
outstanding,O
by,O
written,O
notice,O
to,O
the,O
Company,O
and,O
the,O
Trustee,O
",",O
may,O
rescind,O
and,O
annul,O
such,O
declaration,O
and,O
its,O
consequences,O
if,O
:,O
,O
The,O
holders,O
of,O
not,O
less,O
than,O
a,O
majority,O
in,O
aggregate,O
principal,O
amount,O
of,O
the,O
Series,O
B,O
notes,O
outstanding,O
may,O
on,O
behalf,O
of,O
the,O
holders,O
of,O
all,O
outstanding,O
Series,O
B,O
notes,O
waive,O
any,O
existing,O
or,O
past,O
default,O
under,O
the,O
Indenture,O
and,O
its,O
consequences,O
",",O
except,O
a,O
default,O
(,O
i,O
),O
in,O
the,O
payment,O
of,O
the,O
principal,O
of,O
",",O
premium,O
",",O
if,O
any,O
",",O
or,O
interest,O
on,O
any,O
Series,O
B,O
note,O
",",O
which,O
may,O
only,O
be,O
waived,O
with,O
the,O
consent,O
of,O
each,O
holder,O
of,O
Series,O
B,O
notes,O
affected,O
or,O
(,O
ii,O
),O
in,O
respect,O
of,O
a,O
covenant,O
or,O
provision,O
which,O
under,O
the,O
Indenture,O
can,O
not,O
be,O
modified,O
or,O
amended,O
without,O
the,O
consent,O
of,O
the,O
holder,O
of,O
each,O
Series,O
B,O
note,O
affected,O
by,O
such,O
modification,O
or,O
amendment,O
.,O
,O
Such,O
limitations,O
do,O
not,O
",",O
however,O
",",O
apply,O
to,O
a,O
suit,O
instituted,O
by,O
a,O
holder,O
of,O
a,O
Series,O
B,O
note,O
for,O
the,O
enforcement,O
of,O
the,O
payment,O
of,O
the,O
principal,O
of,O
",",O
premium,O
",",O
if,O
any,O
",",O
or,O
interest,O
on,O
such,O
Series,O
B,O
note,O
on,O
or,O
after,O
the,O
respective,O
due,O
dates,O
expressed,O
in,O
such,O
Series,O
B,O
note,O
.,O
,O
The,O
Company,O
is,O
required,O
to,O
notify,O
the,O
Trustee,O
within,O
five,O
business,O
days,O
of,O
the,O
occurrence,O
of,O
any,O
Default,O
.,O
,O
The,O
Company,O
is,O
required,O
to,O
deliver,O
to,O
the,O
Trustee,O
",",O
on,O
or,O
before,O
a,O
date,O
not,O
more,O
than,O
60,O
days,O
after,O
the,O
end,O
of,O
each,O
fiscal,O
quarter,O
and,O
not,O
more,O
than,O
120,O
days,O
after,O
the,O
end,O
of,O
each,O
fiscal,O
year,O
",",O
a,O
written,O
statement,O
as,O
to,O
compliance,O
with,O
the,O
Indenture,O
",",O
including,O
whether,O
or,O
not,O
any,O
Default,O
has,O
occurred,O
.,O
,O
(,O
Section,O
1020,O
),O
The,O
Trustee,O
is,O
under,O
no,O
obligation,O
to,O
exercise,O
any,O
of,O
the,O
rights,O
or,O
powers,O
vested,O
in,O
it,O
by,O
the,O
Indenture,O
at,O
the,O
request,O
or,O
direction,O
of,O
any,O
of,O
the,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
unless,O
such,O
holders,O
offer,O
to,O
the,O
Trustee,O
security,O
or,O
indemnity,O
satisfactory,O
to,O
the,O
Trustee,O
against,O
the,O
costs,O
",",O
expenses,O
and,O
liabilities,O
which,O
might,O
be,O
incurred,O
thereby,O
.,O
,O
The,O
Trust,I-LEGISLATION/ACT
Indenture,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
contains,O
limitations,O
on,O
the,O
rights,O
of,O
the,O
Trustee,O
",",O
should,O
it,O
become,O
a,O
creditor,O
of,O
the,O
Company,O
or,O
any,O
Guarantor,O
",",O
if,O
any,O
",",O
to,O
obtain,O
payment,O
of,O
claims,O
in,O
certain,O
cases,O
or,O
to,O
realize,O
on,O
certain,O
property,O
received,O
by,O
it,O
in,O
respect,O
of,O
any,O
such,O
claims,O
",",O
as,O
security,O
or,O
otherwise,O
.,O
,O
The,O
Trustee,O
is,O
permitted,O
to,O
engage,O
in,O
other,O
transactions,O
",",O
provided,O
that,O
if,O
it,O
acquires,O
any,O
conflicting,O
interest,O
it,O
must,O
eliminate,O
such,O
conflict,O
upon,O
the,O
occurrence,O
of,O
an,O
Event,O
of,O
Default,O
or,O
else,O
resign,O
.,O
,O
No,O
director,O
",",O
officer,O
",",O
employee,O
",",O
member,O
",",O
partner,O
or,O
stockholder,O
of,O
the,O
Company,O
or,O
any,O
Guarantor,O
",",O
as,O
such,O
",",O
will,O
have,O
any,O
liability,O
for,O
any,O
obligations,O
of,O
the,O
Company,O
or,O
the,O
Guarantors,O
under,O
the,O
Series,O
B,O
notes,O
",",O
the,O
Indenture,O
",",O
the,O
Guarantees,O
",",O
or,O
for,O
any,O
claim,O
based,O
on,O
",",O
in,O
respect,O
of,O
",",O
or,O
by,O
reason,O
of,O
",",O
such,O
obligations,O
or,O
their,O
creation,O
.,O
,O
Each,O
holder,O
of,O
Series,O
B,O
notes,O
by,O
accepting,O
a,O
Series,O
B,O
note,O
waives,O
and,O
releases,O
all,O
such,O
liability,O
.,O
,O
The,O
waiver,O
and,O
release,O
are,O
part,O
of,O
the,O
consideration,O
for,O
issuance,O
of,O
the,O
Series,O
B,O
notes,O
.,O
,O
The,O
waiver,O
may,O
not,O
be,O
effective,O
to,O
waive,O
liabilities,O
under,O
the,O
federal,O
securities,O
laws,O
.,O
,O
The,O
Company,O
may,O
",",O
at,O
its,O
option,O
and,O
at,O
any,O
time,O
",",O
elect,O
to,O
have,O
the,O
obligations,O
of,O
the,O
Company,O
",",O
any,O
Guarantor,O
and,O
any,O
other,O
obligor,O
upon,O
the,O
Series,O
B,O
notes,O
discharged,O
with,O
respect,O
to,O
the,O
outstanding,O
Series,O
B,O
notes,O
(,O
defeasance,O
),O
.,O
,O
In,O
addition,O
",",O
the,O
Company,O
may,O
",",O
at,O
its,O
option,O
and,O
at,O
any,O
time,O
",",O
elect,O
to,O
have,O
the,O
obligations,O
of,O
the,O
Company,O
and,O
any,O
Guarantor,O
released,O
with,O
respect,O
to,O
certain,O
covenants,O
that,O
are,O
described,O
in,O
the,O
Indenture,O
(,O
covenant,O
defeasance,O
),O
and,O
thereafter,O
any,O
omission,O
to,O
comply,O
with,O
such,O
obligations,O
shall,O
not,O
constitute,O
a,O
Default,O
or,O
an,O
Event,O
of,O
Default,O
with,O
respect,O
to,O
the,O
Series,O
B,O
notes,O
.,O
,O
In,O
the,O
event,O
covenant,O
defeasance,O
occurs,O
",",O
certain,O
events,O
(,O
not,O
including,O
non-payment,O
",",O
bankruptcy,O
and,O
insolvency,O
events,O
),O
described,O
under,O
Events,O
of,O
Default,O
will,O
no,O
longer,O
constitute,O
an,O
Event,O
of,O
Default,O
with,O
respect,O
to,O
the,O
Series,O
B,O
notes,O
.,O
,O
(,O
Sections,O
401,O
",",O
402,O
and,O
403,O
),O
,O
In,O
order,O
to,O
exercise,O
either,O
defeasance,O
or,O
covenant,O
defeasance,O
",",O
,O
and,O
the,O
Company,O
or,O
any,O
Guarantor,O
has,O
irrevocably,O
deposited,O
or,O
caused,O
to,O
be,O
deposited,O
with,O
the,O
Trustee,O
as,O
trust,O
funds,O
in,O
trust,O
an,O
amount,O
in,O
United,I-LOCATION
States,I-LOCATION
dollars,O
sufficient,O
to,O
pay,O
and,O
discharge,O
the,O
entire,O
Indebtedness,O
on,O
the,O
Series,O
B,O
notes,O
not,O
theretofore,O
delivered,O
to,O
the,O
Trustee,O
for,O
cancellation,O
",",O
including,O
the,O
principal,O
of,O
",",O
premium,O
",",O
if,O
any,O
",",O
and,O
accrued,O
interest,O
on,O
such,O
Series,O
B,O
notes,O
at,O
such,O
Maturity,O
",",O
Stated,O
Maturity,O
or,O
redemption,O
date,O
;,O
,O
Modifications,O
and,O
amendments,O
of,O
the,O
Indenture,O
may,O
be,O
made,O
by,O
the,O
Company,O
",",O
each,O
Guarantor,O
",",O
if,O
any,O
",",O
and,O
the,O
Trustee,O
with,O
the,O
consent,O
of,O
the,O
holders,O
of,O
not,O
less,O
than,O
a,O
majority,O
in,O
aggregate,O
principal,O
amount,O
of,O
the,O
Series,O
B,O
notes,O
then,O
outstanding,O
(,O
including,O
consents,O
obtained,O
in,O
connection,O
with,O
a,O
tender,O
offer,O
or,O
exchange,O
offer,O
for,O
Series,O
B,O
notes,O
),O
;,O
provided,O
",",O
however,O
",",O
that,O
no,O
such,O
modification,O
or,O
amendment,O
may,O
",",O
without,O
the,O
consent,O
of,O
the,O
holder,O
of,O
each,O
outstanding,O
Series,O
B,O
note,O
affected,O
thereby,O
:,O
,O
Notwithstanding,O
the,O
foregoing,O
",",O
without,O
the,O
consent,O
of,O
any,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
",",O
the,O
Company,O
",",O
any,O
Guarantor,O
",",O
any,O
other,O
obligor,O
under,O
the,O
Series,O
B,O
notes,O
and,O
the,O
Trustee,O
may,O
modify,O
or,O
amend,O
the,O
Indenture,O
:,O
,O
The,O
holders,O
of,O
a,O
majority,O
in,O
aggregate,O
principal,O
amount,O
of,O
the,O
Series,O
B,O
notes,O
outstanding,O
may,O
waive,O
compliance,O
with,O
certain,O
restrictive,O
covenants,O
and,O
provisions,O
of,O
the,O
Indenture,O
.,O
,O
The,O
Indenture,O
",",O
the,O
Series,O
B,O
notes,O
and,O
any,O
Guarantee,O
will,O
be,O
governed,O
by,O
",",O
and,O
construed,O
in,O
accordance,O
with,O
",",O
the,O
laws,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
New,I-LOCATION
York,I-LOCATION
",",O
without,O
giving,O
effect,O
to,O
the,O
conflicts,O
of,O
law,O
principles,O
thereof,O
.,O
,O
The,O
Indenture,O
contains,O
certain,O
limitations,O
on,O
the,O
rights,O
of,O
the,O
Trustee,O
",",O
should,O
it,O
become,O
a,O
creditor,O
of,O
the,O
Company,O
",",O
to,O
obtain,O
payment,O
of,O
claims,O
in,O
certain,O
cases,O
",",O
or,O
to,O
realize,O
on,O
certain,O
property,O
received,O
in,O
respect,O
of,O
any,O
such,O
claim,O
as,O
security,O
or,O
otherwise,O
.,O
,O
The,O
Trustee,O
will,O
be,O
permitted,O
to,O
engage,O
in,O
other,O
transactions,O
;,O
however,O
",",O
if,O
it,O
acquires,O
any,O
conflicting,O
interest,O
it,O
must,O
eliminate,O
such,O
conflict,O
within,O
90,O
days,O
",",O
apply,O
to,O
the,O
Commission,O
for,O
permission,O
to,O
continue,O
as,O
Trustee,O
with,O
such,O
conflict,O
or,O
resign,O
as,O
Trustee,O
.,O
,O
(,O
Sections,O
608,O
and,O
611,O
),O
,O
The,O
holders,O
of,O
a,O
majority,O
in,O
principal,O
amount,O
of,O
the,O
then,O
outstanding,O
Series,O
B,O
notes,O
will,O
have,O
the,O
right,O
to,O
direct,O
the,O
time,O
",",O
method,O
and,O
place,O
of,O
conducting,O
any,O
proceeding,O
for,O
exercising,O
any,O
remedy,O
available,O
to,O
the,O
Trustee,O
",",O
subject,O
to,O
certain,O
exceptions,O
.,O
,O
The,O
Indenture,O
provides,O
that,O
in,O
case,O
an,O
Event,O
of,O
Default,O
occurs,O
",",O
which,O
has,O
not,O
been,O
cured,O
",",O
the,O
Trustee,O
will,O
be,O
required,O
",",O
in,O
the,O
exercise,O
of,O
its,O
power,O
",",O
to,O
use,O
the,O
degree,O
of,O
care,O
of,O
a,O
prudent,O
man,O
in,O
the,O
conduct,O
of,O
his,O
own,O
affairs,O
.,O
,O
Subject,O
to,O
such,O
provisions,O
",",O
the,O
Trustee,O
will,O
be,O
under,O
no,O
obligation,O
to,O
exercise,O
any,O
of,O
its,O
rights,O
or,O
powers,O
under,O
the,O
Indenture,O
at,O
the,O
request,O
of,O
any,O
holder,O
of,O
Series,O
B,O
notes,O
unless,O
such,O
holder,O
shall,O
have,O
offered,O
to,O
the,O
Trustee,O
security,O
and,O
indemnity,O
satisfactory,O
to,O
it,O
against,O
any,O
loss,O
",",O
liability,O
or,O
expense,O
.,O
,O
(,O
Sections,O
512,O
",",O
601,O
and,O
603,O
),O
,O
The,O
Trustee,O
is,O
also,O
the,O
trustee,O
under,O
the,O
indentures,O
governing,O
the,O
8.625,O
%,O
Notes,O
",",O
our,O
4.25,O
%,O
Convertible,O
Senior,O
Subordinated,O
Notes,O
due,O
2015,O
and,O
our,O
5.0,O
%,O
Convertible,O
Senior,O
Notes,O
due,O
2029,O
.,O
,O
We,O
may,O
establish,O
banking,O
or,O
other,O
relationships,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
with,O
the,O
Trustee,O
and,O
its,O
affiliates,O
.,O
,O
8.625,O
%,O
Notes,O
means,O
our,O
8.625,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2013,O
.,O
,O
Acquired,O
Indebtedness,O
means,O
:,O
,O
in,O
each,O
case,O
",",O
other,O
than,O
Indebtedness,O
incurred,O
in,O
connection,O
with,O
",",O
or,O
in,O
contemplation,O
of,O
",",O
such,O
Person,O
becoming,O
a,O
Restricted,O
Subsidiary,O
or,O
such,O
acquisition,O
",",O
as,O
the,O
case,O
may,O
be,O
.,O
,O
Acquired,O
Indebtedness,O
shall,O
be,O
deemed,O
to,O
be,O
incurred,O
on,O
the,O
date,O
of,O
the,O
related,O
acquisition,O
of,O
assets,O
from,O
any,O
Person,O
or,O
the,O
date,O
the,O
acquired,O
Person,O
becomes,O
a,O
Restricted,O
Subsidiary,O
",",O
as,O
the,O
case,O
may,O
be,O
.,O
,O
Affiliate,O
means,O
",",O
with,O
respect,O
to,O
any,O
specified,O
Person,O
:,O
,O
For,O
the,O
purposes,O
of,O
this,O
definition,O
",",O
control,O
when,O
used,O
with,O
respect,O
to,O
any,O
specified,O
Person,O
means,O
the,O
power,O
to,O
direct,O
the,O
management,O
and,O
policies,O
of,O
such,O
Person,O
",",O
directly,O
or,O
indirectly,O
",",O
whether,O
through,O
ownership,O
of,O
voting,O
securities,O
",",O
by,O
contract,O
or,O
otherwise,O
;,O
and,O
the,O
terms,O
controlling,O
and,O
controlled,O
have,O
meanings,O
correlative,O
to,O
the,O
foregoing,O
.,O
,O
Applicable,O
Premium,O
means,O
",",O
with,O
respect,O
to,O
any,O
note,O
on,O
any,O
redemption,O
date,O
",",O
the,O
greater,O
of,O
:,O
,O
Asset,O
Sale,O
means,O
any,O
sale,O
",",O
issuance,O
",",O
conveyance,O
",",O
transfer,O
",",O
lease,O
or,O
other,O
disposition,O
",",O
including,O
",",O
without,O
limitation,O
",",O
by,O
way,O
of,O
merger,O
",",O
consolidation,O
or,O
sale,O
and,O
leaseback,O
transaction,O
(,O
collectively,O
",",O
a,O
transfer,O
),O
",",O
directly,O
or,O
indirectly,O
",",O
in,O
one,O
or,O
a,O
series,O
of,O
related,O
transactions,O
",",O
of,O
:,O
,O
For,O
the,O
purposes,O
of,O
this,O
definition,O
",",O
the,O
term,O
Asset,O
Sale,O
shall,O
not,O
include,O
any,O
transfer,O
of,O
properties,O
and,O
assets,O
:,O
,O
Average,O
Life,O
to,O
Stated,O
Maturity,O
means,O
",",O
as,O
of,O
the,O
date,O
of,O
determination,O
with,O
respect,O
to,O
any,O
Indebtedness,O
",",O
the,O
quotient,O
obtained,O
by,O
dividing,O
(,O
i,O
),O
the,O
sum,O
of,O
the,O
products,O
of,O
(,O
a,O
),O
the,O
number,O
of,O
years,O
from,O
the,O
date,O
of,O
determination,O
to,O
the,O
date,O
or,O
dates,O
of,O
each,O
successive,O
scheduled,O
principal,O
payment,O
of,O
such,O
Indebtedness,O
multiplied,O
by,O
(,O
b,O
),O
the,O
amount,O
of,O
each,O
such,O
principal,O
payment,O
by,O
(,O
ii,O
),O
the,O
sum,O
of,O
all,O
such,O
principal,O
payments,O
.,O
,O
Bankruptcy,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
means,O
Title,O
11,O
",",O
United,I-LEGISLATION/ACT
States,I-LEGISLATION/ACT
Bankruptcy,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1978,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
or,O
any,O
similar,O
United,I-LOCATION
States,I-LOCATION
federal,O
or,O
state,O
law,O
or,O
foreign,O
law,O
relating,O
to,O
the,O
bankruptcy,O
",",O
insolvency,O
",",O
receivership,O
",",O
winding,O
up,O
",",O
liquidation,O
",",O
reorganization,O
or,O
relief,O
of,O
debtors,O
or,O
any,O
amendment,O
to,O
",",O
succession,O
to,O
or,O
change,O
in,O
any,O
such,O
law,O
.,O
,O
Board,O
of,O
Directors,O
means,O
:,O
,O
Capital,O
Lease,O
Obligation,O
of,O
any,O
Person,O
means,O
any,O
obligation,O
of,O
such,O
Person,O
and,O
its,O
Subsidiaries,O
on,O
a,O
Consolidated,O
basis,O
under,O
any,O
capital,O
lease,O
of,O
real,O
or,O
personal,O
property,O
which,O
",",O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
",",O
is,O
required,O
to,O
be,O
recorded,O
as,O
a,O
capitalized,O
lease,O
obligation,O
on,O
the,O
books,O
of,O
the,O
lessee,O
.,O
,O
Capital,O
Stock,O
of,O
any,O
Person,O
means,O
any,O
and,O
all,O
shares,O
",",O
interests,O
",",O
participations,O
",",O
rights,O
in,O
or,O
other,O
equivalents,O
",",O
however,O
designated,O
",",O
of,O
such,O
Person,O
s,O
capital,O
stock,O
or,O
other,O
equity,O
interests,O
whether,O
now,O
outstanding,O
or,O
issued,O
after,O
the,O
Issue,O
Date,O
",",O
including,O
limited,O
liability,O
company,O
interests,O
",",O
partnership,O
interests,O
(,O
whether,O
general,O
or,O
limited,O
),O
",",O
any,O
other,O
interest,O
or,O
participation,O
that,O
confers,O
on,O
a,O
Person,O
that,O
right,O
to,O
receive,O
a,O
share,O
of,O
the,O
profits,O
and,O
losses,O
of,O
",",O
or,O
distributions,O
of,O
assets,O
of,O
(,O
other,O
than,O
a,O
distribution,O
in,O
respect,O
of,O
Indebtedness,O
),O
",",O
the,O
issuing,O
Person,O
",",O
including,O
any,O
Preferred,O
Stock,O
and,O
any,O
rights,O
(,O
other,O
than,O
debt,O
securities,O
convertible,O
into,O
Capital,O
Stock,O
),O
",",O
warrants,O
or,O
options,O
exchangeable,O
for,O
or,O
convertible,O
into,O
such,O
Capital,O
Stock,O
.,O
,O
Change,O
of,O
Control,O
means,O
the,O
occurrence,O
of,O
any,O
of,O
the,O
following,O
events,O
:,O
,O
Commission,O
means,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
as,O
from,O
time,O
to,O
time,O
constituted,O
",",O
created,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
or,O
if,O
at,O
any,O
time,O
after,O
the,O
execution,O
of,O
the,O
Indenture,O
such,O
Commission,O
is,O
not,O
existing,O
and,O
performing,O
the,O
duties,O
now,O
assigned,O
to,O
it,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
Trust,I-LEGISLATION/ACT
Indenture,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
then,O
the,O
body,O
performing,O
such,O
duties,O
at,O
such,O
time,O
.,O
,O
Commodity,O
Price,O
Protection,O
Agreement,O
means,O
any,O
forward,O
contract,O
",",O
commodity,O
swap,O
",",O
commodity,O
option,O
or,O
other,O
similar,O
financial,O
agreement,O
or,O
arrangement,O
relating,O
to,O
",",O
or,O
the,O
value,O
of,O
which,O
is,O
dependent,O
upon,O
",",O
fluctuations,O
in,O
commodity,O
prices,O
.,O
,O
Company,O
means,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
corporation,O
incorporated,O
under,O
the,O
laws,O
of,O
Delaware,I-LOCATION
",",O
until,O
a,O
successor,O
Person,O
shall,O
have,O
become,O
such,O
pursuant,O
to,O
the,O
applicable,O
provisions,O
of,O
the,O
Indenture,O
",",O
and,O
thereafter,O
Company,O
shall,O
mean,O
such,O
successor,O
Person,O
.,O
,O
Consolidated,O
Fixed,O
Charge,O
Coverage,O
Ratio,O
of,O
any,O
Person,O
means,O
",",O
for,O
any,O
period,O
",",O
the,O
ratio,O
of,O
:,O
,O
Consolidated,O
Income,O
Tax,O
Expense,O
of,O
any,O
Person,O
means,O
",",O
for,O
any,O
period,O
",",O
the,O
provision,O
for,O
federal,O
",",O
state,O
",",O
local,O
and,O
foreign,O
income,O
taxes,O
of,O
such,O
Person,O
and,O
its,O
Consolidated,O
Restricted,O
Subsidiaries,O
for,O
such,O
period,O
as,O
determined,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
.,O
,O
but,O
excluding,O
",",O
in,O
the,O
case,O
of,O
(,O
a,O
),O
",",O
(,O
b,O
),O
and,O
(,O
c,O
),O
",",O
the,O
amortization,O
or,O
write-off,O
of,O
deferred,O
financing,O
costs,O
",",O
any,O
non-cash,O
interest,O
expense,O
under,O
the,O
Series,O
A,O
and,O
Series,O
B,O
notes,O
or,O
refinancings,O
thereof,O
or,O
derivatives,O
related,O
thereto,O
and,O
non-cash,O
imputed,O
interest,O
related,O
to,O
disposition,O
accruals,O
.,O
,O
Consolidated,O
Net,O
Income,O
(,O
Loss,O
),O
of,O
any,O
Person,O
means,O
",",O
for,O
any,O
period,O
",",O
the,O
Consolidated,O
net,O
income,O
(,O
or,O
loss,O
),O
of,O
such,O
Person,O
and,O
its,O
Restricted,O
Subsidiaries,O
for,O
such,O
period,O
on,O
a,O
Consolidated,O
basis,O
as,O
determined,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
",",O
adjusted,O
",",O
to,O
the,O
extent,O
included,O
in,O
calculating,O
such,O
net,O
income,O
(,O
or,O
loss,O
),O
",",O
by,O
excluding,O
",",O
without,O
duplication,O
",",O
,O
Consolidated,O
Non-cash,O
Charges,O
of,O
any,O
Person,O
means,O
",",O
for,O
any,O
period,O
",",O
the,O
aggregate,O
depreciation,O
",",O
amortization,O
and,O
other,O
non-cash,O
charges,O
of,O
such,O
Person,O
and,O
its,O
Subsidiaries,O
on,O
a,O
Consolidated,O
basis,O
for,O
such,O
period,O
",",O
as,O
determined,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
",",O
excluding,O
any,O
non-cash,O
charge,O
which,O
requires,O
an,O
accrual,O
or,O
reserve,O
for,O
cash,O
charges,O
for,O
any,O
future,O
period,O
.,O
,O
Consolidated,O
Tangible,O
Assets,O
of,O
any,O
Person,O
means,O
(,O
a,O
),O
all,O
amounts,O
that,O
would,O
be,O
shown,O
as,O
assets,O
on,O
a,O
Consolidated,O
balance,O
sheet,O
of,O
such,O
Person,O
and,O
its,O
Restricted,O
Subsidiaries,O
prepared,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
",",O
less,O
(,O
b,O
),O
the,O
amount,O
thereof,O
constituting,O
goodwill,O
and,O
other,O
intangible,O
assets,O
as,O
calculated,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
.,O
,O
Consolidation,O
means,O
",",O
with,O
respect,O
to,O
any,O
Person,O
",",O
the,O
consolidation,O
of,O
the,O
accounts,O
of,O
such,O
Person,O
and,O
each,O
of,O
its,O
Subsidiaries,O
if,O
and,O
to,O
the,O
extent,O
the,O
accounts,O
of,O
such,O
Person,O
and,O
each,O
of,O
its,O
Subsidiaries,O
would,O
normally,O
be,O
consolidated,O
with,O
those,O
of,O
such,O
Person,O
",",O
all,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
.,O
,O
The,O
term,O
Consolidated,O
shall,O
have,O
a,O
similar,O
meaning,O
.,O
,O
Continuing,O
Directors,O
means,O
",",O
as,O
of,O
any,O
date,O
of,O
determination,O
",",O
any,O
member,O
of,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Company,O
who,O
:,O
,O
Credit,O
Facility,O
means,O
",",O
collectively,O
",",O
(,O
i,O
),O
the,O
Amended,O
and,O
Restated,O
Credit,O
Agreement,O
dated,O
January,O
15,O
",",O
2010,O
among,O
the,O
Company,O
",",O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
as,O
administrative,O
agent,O
",",O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
as,O
Swing,O
Line,O
Lender,O
",",O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
DCFS,I-BUSINESS
USA,I-BUSINESS
LLC,I-BUSINESS
",",O
BMW,I-BUSINESS
Financial,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
Toyota,I-BUSINESS
Motor,I-BUSINESS
Credit,I-BUSINESS
Corporation,I-BUSINESS
",",O
JPMorgan,I-BUSINESS
Chase,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
Wachovia,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
",",O
Comerica,I-BUSINESS
Bank,I-BUSINESS
and,O
World,I-BUSINESS
Omni,I-BUSINESS
Financial,I-BUSINESS
Corp.,I-BUSINESS
",",O
as,O
Lenders,O
and,O
Wells,I-BUSINESS
Fargo,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
and,O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
as,O
LC,O
issuers,O
and,O
(,O
ii,O
),O
whether,O
or,O
not,O
the,O
credit,O
agreement,O
referred,O
to,O
in,O
clause,O
(,O
i,O
),O
remains,O
outstanding,O
",",O
if,O
designated,O
by,O
the,O
Company,O
in,O
writing,O
to,O
the,O
Trustee,O
to,O
be,O
included,O
in,O
the,O
definition,O
of,O
Credit,O
Facility,O
",",O
one,O
or,O
more,O
(,O
A,O
),O
debt,O
facilities,O
or,O
commercial,O
paper,O
facilities,O
",",O
providing,O
for,O
revolving,O
credit,O
loans,O
",",O
term,O
loans,O
",",O
securitization,O
financings,O
(,O
including,O
through,O
the,O
sale,O
of,O
receivables,O
to,O
lenders,O
or,O
to,O
special,O
purpose,O
entities,O
formed,O
to,O
borrow,O
from,O
lenders,O
against,O
such,O
receivables,O
),O
or,O
letters,O
of,O
credit,O
",",O
(,O
B,O
),O
debt,O
securities,O
",",O
indentures,O
or,O
other,O
forms,O
of,O
debt,O
financing,O
(,O
including,O
convertible,O
or,O
exchangeable,O
debt,O
instruments,O
or,O
bank,O
guarantees,O
or,O
bankers,O
acceptances,O
),O
",",O
or,O
(,O
C,O
),O
instruments,O
or,O
agreements,O
evidencing,O
any,O
other,O
Indebtedness,O
",",O
in,O
each,O
case,O
",",O
with,O
the,O
same,O
or,O
different,O
borrowers,O
",",O
guarantors,O
or,O
issuers,O
or,O
lenders,O
or,O
group,O
of,O
lenders,O
",",O
and,O
",",O
in,O
the,O
case,O
of,O
(,O
i,O
),O
and,O
(,O
ii,O
),O
",",O
each,O
as,O
from,O
time,O
to,O
time,O
amended,O
",",O
supplemented,O
",",O
restated,O
",",O
amended,O
and,O
restated,O
",",O
waived,O
",",O
replaced,O
(,O
whether,O
or,O
not,O
upon,O
termination,O
",",O
and,O
whether,O
with,O
the,O
original,O
lenders,O
or,O
otherwise,O
),O
",",O
restructured,O
",",O
refunded,O
",",O
refinanced,O
or,O
otherwise,O
modified,O
from,O
time,O
to,O
time,O
",",O
including,O
any,O
agreement,O
or,O
indenture,O
extending,O
the,O
maturity,O
thereof,O
",",O
refinancing,O
",",O
replacing,O
or,O
otherwise,O
restructuring,O
all,O
or,O
any,O
portion,O
of,O
the,O
Indebtedness,O
under,O
such,O
agreement,O
or,O
agreements,O
or,O
indenture,O
or,O
indentures,O
or,O
any,O
successor,O
or,O
replacement,O
agreement,O
or,O
agreements,O
or,O
indenture,O
or,O
indentures,O
or,O
increasing,O
the,O
amount,O
loaned,O
or,O
issued,O
thereunder,O
or,O
altering,O
the,O
maturity,O
thereof,O
),O
.,O
,O
Currency,O
Hedging,O
Agreements,O
means,O
one,O
or,O
more,O
of,O
the,O
following,O
agreements,O
which,O
shall,O
be,O
entered,O
into,O
by,O
one,O
or,O
more,O
financial,O
institutions,O
:,O
foreign,O
exchange,O
contracts,O
",",O
currency,O
swap,O
agreements,O
or,O
other,O
similar,O
agreements,O
or,O
arrangements,O
designed,O
to,O
protect,O
against,O
the,O
fluctuations,O
in,O
currency,O
values,O
.,O
,O
Default,O
means,O
any,O
event,O
which,O
is,O
",",O
or,O
after,O
notice,O
or,O
passage,O
of,O
any,O
time,O
or,O
both,O
would,O
be,O
",",O
an,O
Event,O
of,O
Default,O
.,O
,O
Designated,O
Noncash,O
Consideration,O
means,O
the,O
Fair,O
Market,O
Value,O
of,O
non-cash,O
consideration,O
received,O
by,O
the,O
Company,O
or,O
any,O
of,O
its,O
Restricted,O
Subsidiaries,O
in,O
connection,O
with,O
an,O
Asset,O
Sale,O
that,O
is,O
so,O
designated,O
pursuant,O
to,O
an,O
officer,O
s,O
certificate,O
",",O
setting,O
forth,O
the,O
basis,O
of,O
the,O
valuation,O
.,O
,O
The,O
aggregate,O
Fair,O
Market,O
Value,O
of,O
the,O
Designated,O
Noncash,O
Consideration,O
",",O
taken,O
together,O
with,O
the,O
Fair,O
Market,O
Value,O
at,O
the,O
time,O
of,O
receipt,O
of,O
all,O
other,O
Designated,O
Noncash,O
Consideration,O
received,O
to,O
the,O
date,O
thereof,O
and,O
then,O
held,O
by,O
the,O
Company,O
or,O
a,O
Restricted,O
Subsidiary,O
",",O
may,O
not,O
exceed,O
$,O
25.0,O
million,O
in,O
the,O
aggregate,O
outstanding,O
at,O
any,O
one,O
time,O
(,O
with,O
the,O
Fair,O
Market,O
Value,O
being,O
measured,O
at,O
the,O
time,O
received,O
and,O
without,O
giving,O
effect,O
to,O
subsequent,O
changes,O
in,O
value,O
),O
.,O
,O
Disinterested,O
Director,O
means,O
",",O
with,O
respect,O
to,O
any,O
transaction,O
or,O
series,O
of,O
related,O
transactions,O
",",O
a,O
member,O
of,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Company,O
who,O
does,O
not,O
have,O
any,O
material,O
direct,O
or,O
indirect,O
financial,O
interest,O
in,O
or,O
with,O
respect,O
to,O
such,O
transaction,O
or,O
series,O
of,O
related,O
transactions,O
.,O
,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
means,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
or,O
any,O
successor,O
statute,O
",",O
and,O
the,O
rules,O
and,O
regulations,O
promulgated,O
by,O
the,O
Commission,O
thereunder,O
.,O
,O
Fair,O
Market,O
Value,O
means,O
",",O
with,O
respect,O
to,O
any,O
asset,O
or,O
property,O
",",O
the,O
sale,O
value,O
that,O
would,O
be,O
obtained,O
in,O
an,O
arm,O
s-length,O
free,O
market,O
transaction,O
between,O
an,O
informed,O
and,O
willing,O
seller,O
under,O
no,O
compulsion,O
to,O
sell,O
and,O
an,O
informed,O
and,O
willing,O
buyer,O
under,O
no,O
compulsion,O
to,O
buy,O
.,O
,O
Fair,O
Market,O
Value,O
shall,O
be,O
determined,O
by,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Company,O
acting,O
in,O
good,O
faith,O
and,O
shall,O
be,O
evidenced,O
by,O
a,O
resolution,O
of,O
the,O
Board,O
of,O
Directors,O
.,O
,O
Generally,I-LEGISLATION/ACT
Accepted,I-LEGISLATION/ACT
Accounting,I-LEGISLATION/ACT
Principles,I-LEGISLATION/ACT
or,O
GAAP,I-LEGISLATION/ACT
means,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
consistently,O
applied,O
",",O
which,O
(,O
i,O
),O
for,O
the,O
purpose,O
of,O
determining,O
compliance,O
with,O
the,O
covenants,O
contained,O
in,O
the,O
Indenture,O
were,O
in,O
effect,O
as,O
of,O
the,O
Issue,O
Date,O
and,O
(,O
ii,O
),O
for,O
purposes,O
of,O
complying,O
with,O
the,O
reporting,O
requirements,O
contained,O
in,O
the,O
Indenture,O
are,O
in,O
effect,O
from,O
time,O
to,O
time,O
.,O
,O
Guarantee,O
means,O
the,O
guarantee,O
by,O
any,O
Guarantor,O
of,O
the,O
Company,O
s,O
Indenture,O
Obligations,O
.,O
,O
Guaranteed,O
Debt,O
of,O
any,O
Person,O
means,O
",",O
without,O
duplication,O
",",O
all,O
Indebtedness,O
of,O
any,O
other,O
Person,O
referred,O
to,O
in,O
the,O
definition,O
of,O
Indebtedness,O
guaranteed,O
directly,O
or,O
indirectly,O
in,O
any,O
manner,O
by,O
such,O
Person,O
",",O
or,O
in,O
effect,O
guaranteed,O
directly,O
or,O
indirectly,O
by,O
such,O
Person,O
through,O
an,O
agreement,O
:,O
,O
provided,O
that,O
the,O
term,O
guarantee,O
shall,O
not,O
include,O
endorsements,O
for,O
collection,O
or,O
deposit,O
",",O
in,O
either,O
case,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
.,O
,O
Guarantor,O
means,O
any,O
Subsidiary,O
which,O
is,O
a,O
guarantor,O
of,O
the,O
Series,O
B,O
notes,O
",",O
including,O
any,O
Person,O
that,O
is,O
required,O
to,O
execute,O
a,O
guarantee,O
of,O
the,O
Series,O
B,O
notes,O
pursuant,O
to,O
Certain,O
Covenants,O
Limitation,O
on,O
Liens,O
or,O
Limitation,O
on,O
Issuance,O
of,O
Guarantees,O
of,O
and,O
Pledges,O
for,O
Indebtedness,O
covenant,O
until,O
a,O
successor,O
replaces,O
such,O
party,O
pursuant,O
to,O
the,O
applicable,O
provisions,O
of,O
the,O
Indenture,O
and,O
",",O
thereafter,O
",",O
shall,O
mean,O
such,O
successor,O
.,O
,O
Indebtedness,O
means,O
",",O
with,O
respect,O
to,O
any,O
Person,O
",",O
without,O
duplication,O
",",O
,O
For,O
purposes,O
hereof,O
",",O
the,O
maximum,O
fixed,O
repurchase,O
price,O
of,O
any,O
Redeemable,O
Capital,O
Stock,O
which,O
does,O
not,O
have,O
a,O
fixed,O
repurchase,O
price,O
shall,O
be,O
calculated,O
in,O
accordance,O
with,O
the,O
terms,O
of,O
such,O
Redeemable,O
Capital,O
Stock,O
as,O
if,O
such,O
Redeemable,O
Capital,O
Stock,O
were,O
purchased,O
on,O
any,O
date,O
on,O
which,O
Indebtedness,O
shall,O
be,O
required,O
to,O
be,O
determined,O
pursuant,O
to,O
the,O
Indenture,O
",",O
and,O
if,O
such,O
price,O
is,O
based,O
upon,O
",",O
or,O
measured,O
by,O
",",O
the,O
Fair,O
Market,O
Value,O
of,O
such,O
Redeemable,O
Capital,O
Stock,O
",",O
such,O
Fair,O
Market,O
Value,O
to,O
be,O
determined,O
in,O
good,O
faith,O
by,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
issuer,O
of,O
such,O
Redeemable,O
Capital,O
Stock,O
.,O
,O
Indenture,O
Obligations,O
means,O
the,O
obligations,O
of,O
the,O
Company,O
and,O
any,O
other,O
obligor,O
under,O
the,O
Indenture,O
or,O
under,O
the,O
Series,O
B,O
notes,O
",",O
including,O
any,O
Guarantor,O
",",O
to,O
pay,O
principal,O
of,O
",",O
premium,O
",",O
if,O
any,O
",",O
and,O
interest,O
when,O
due,O
and,O
payable,O
and,O
any,O
post-petition,O
interest,O
",",O
and,O
all,O
other,O
amounts,O
due,O
or,O
to,O
become,O
due,O
under,O
or,O
in,O
connection,O
with,O
the,O
Indenture,O
",",O
the,O
Series,O
B,O
notes,O
and,O
the,O
performance,O
of,O
all,O
other,O
obligations,O
to,O
the,O
Trustee,O
and,O
the,O
holders,O
under,O
the,O
Indenture,O
and,O
the,O
Series,O
B,O
notes,O
",",O
according,O
to,O
the,O
respective,O
terms,O
thereof,O
.,O
,O
Interest,O
Rate,O
Agreements,O
means,O
one,O
or,O
more,O
of,O
the,O
following,O
agreements,O
which,O
shall,O
be,O
entered,O
into,O
by,O
one,O
or,O
more,O
financial,O
institutions,O
:,O
interest,O
rate,O
protection,O
agreements,O
(,O
including,O
",",O
without,O
limitation,O
",",O
interest,O
rate,O
swaps,O
",",O
caps,O
",",O
floors,O
",",O
collars,O
and,O
similar,O
agreements,O
),O
and/or,O
other,O
types,O
of,O
interest,O
rate,O
hedging,O
agreements,O
from,O
time,O
to,O
time,O
.,O
,O
Inventory,O
Facility,O
means,O
(,O
i,O
),O
the,O
Syndicated,O
New,O
and,O
Used,O
Vehicle,O
Floorplan,O
Credit,O
Agreement,O
dated,O
January,O
15,O
",",O
2010,O
among,O
the,O
Company,O
",",O
as,O
Used,O
Vehicle,O
Borrower,O
",",O
certain,O
Subsidiaries,O
of,O
the,O
Company,O
",",O
as,O
New,O
Vehicle,O
Borrowers,O
",",O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
as,O
Administrative,O
Agent,O
",",O
New,O
Vehicle,O
Swing,O
Line,O
Lender,O
and,O
Used,O
Vehicle,O
Swing,O
Line,O
Lender,O
",",O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
as,O
Revolving,O
Administrative,O
Agent,O
(,O
in,O
its,O
capacity,O
as,O
collateral,O
agent,O
),O
",",O
Bank,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
JPMorgan,I-BUSINESS
Chase,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
N.A.,I-BUSINESS
",",O
Wachovia,I-BUSINESS
Bank,I-BUSINESS
",",I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
",",O
and,O
Comerica,I-BUSINESS
Bank,I-BUSINESS
as,O
Lenders,O
",",O
(,O
ii,O
),O
any,O
agreement,O
with,O
one,O
or,O
more,O
of,O
DCFS,I-BUSINESS
USA,I-BUSINESS
LLC,I-BUSINESS
",",O
Ford,I-BUSINESS
Motor,I-BUSINESS
Credit,I-BUSINESS
Company,I-BUSINESS
LLC,I-BUSINESS
",",O
GMAC,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
formally,O
known,O
as,O
General,I-BUSINESS
Motors,I-BUSINESS
Acceptance,I-BUSINESS
Corporation,I-BUSINESS
),O
",",O
BMW,I-BUSINESS
Financial,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Toyota,I-BUSINESS
Motor,I-BUSINESS
Credit,I-BUSINESS
Corporation,I-BUSINESS
and,O
World,I-BUSINESS
Omni,I-BUSINESS
Financial,I-BUSINESS
Corp.,I-BUSINESS
.,O
,O
Subsidiary,O
incurs,O
Indebtedness,O
",",O
the,O
net,O
proceeds,O
of,O
which,O
are,O
used,O
to,O
purchase,O
",",O
finance,O
or,O
refinance,O
vehicles,O
and/or,O
vehicle,O
parts,O
and,O
supplies,O
",",O
each,O
as,O
may,O
be,O
amended,O
",",O
substituted,O
",",O
refinanced,O
or,O
replaced,O
from,O
time,O
to,O
time,O
with,O
another,O
Inventory,O
Facility,O
.,O
,O
Investment,O
means,O
",",O
with,O
respect,O
to,O
any,O
Person,O
",",O
directly,O
or,O
indirectly,O
",",O
any,O
advance,O
",",O
loan,O
",",O
including,O
guarantees,O
",",O
or,O
other,O
extension,O
of,O
credit,O
or,O
capital,O
contribution,O
to,O
(,O
by,O
means,O
of,O
any,O
transfer,O
of,O
cash,O
or,O
other,O
property,O
to,O
others,O
or,O
any,O
payment,O
for,O
property,O
or,O
services,O
for,O
the,O
account,O
or,O
use,O
of,O
others,O
),O
(,O
but,O
for,O
clarity,O
purposes,O
excluding,O
trade,O
receivables,O
and,O
prepaid,O
expenses,O
",",O
in,O
each,O
case,O
arising,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
),O
",",O
or,O
any,O
purchase,O
",",O
acquisition,O
or,O
ownership,O
by,O
such,O
Person,O
of,O
any,O
Capital,O
Stock,O
",",O
bonds,O
",",O
notes,O
",",O
debentures,O
or,O
other,O
securities,O
issued,O
or,O
owned,O
by,O
any,O
other,O
Person,O
and,O
all,O
other,O
items,O
that,O
would,O
be,O
classified,O
as,O
investments,O
on,O
a,O
balance,O
sheet,O
prepared,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
.,O
,O
Issue,O
Date,O
means,O
the,O
original,O
issue,O
date,O
of,O
the,O
Series,O
A,O
notes,O
under,O
the,O
Indenture,O
.,O
,O
Lien,O
means,O
any,O
mortgage,O
or,O
deed,O
of,O
trust,O
",",O
charge,O
",",O
pledge,O
",",O
lien,O
(,O
statutory,O
or,O
otherwise,O
),O
",",O
privilege,O
",",O
security,O
interest,O
",",O
assignment,O
",",O
deposit,O
",",O
arrangement,O
",",O
easement,O
",",O
hypothecation,O
",",O
claim,O
",",O
preference,O
",",O
priority,O
or,O
other,O
encumbrance,O
upon,O
or,O
with,O
respect,O
to,O
any,O
property,O
of,O
any,O
kind,O
(,O
including,O
any,O
conditional,O
sale,O
",",O
capital,O
lease,O
or,O
other,O
title,O
retention,O
agreement,O
",",O
any,O
leases,O
in,O
the,O
nature,O
thereof,O
",",O
and,O
any,O
agreement,O
to,O
give,O
any,O
security,O
interest,O
),O
",",O
real,O
or,O
personal,O
",",O
movable,O
or,O
immovable,O
",",O
now,O
owned,O
or,O
hereafter,O
acquired,O
.,O
,O
A,O
Person,O
will,O
be,O
deemed,O
to,O
own,O
subject,O
to,O
a,O
Lien,O
any,O
property,O
which,O
it,O
has,O
acquired,O
or,O
holds,O
subject,O
to,O
the,O
interest,O
of,O
a,O
vendor,O
or,O
lessor,O
under,O
any,O
conditional,O
sale,O
agreement,O
",",O
Capital,O
Lease,O
Obligation,O
or,O
other,O
title,O
retention,O
agreement,O
.,O
,O
Manufacturer,O
means,O
a,O
vehicle,O
manufacturer,O
which,O
is,O
a,O
party,O
to,O
a,O
dealership,O
franchise,O
agreement,O
with,O
the,O
Company,O
or,O
any,O
Restricted,O
Subsidiary,O
.,O
,O
Maturity,O
means,O
",",O
when,O
used,O
with,O
respect,O
to,O
the,O
Series,O
B,O
notes,O
",",O
the,O
date,O
on,O
which,O
the,O
principal,O
of,O
the,O
Series,O
B,O
notes,O
becomes,O
due,O
and,O
payable,O
as,O
therein,O
provided,O
or,O
as,O
provided,O
in,O
the,O
Indenture,O
",",O
whether,O
at,O
Stated,O
Maturity,O
",",O
the,O
Offer,O
Date,O
or,O
the,O
redemption,O
date,O
and,O
whether,O
by,O
declaration,O
of,O
acceleration,O
",",O
Offer,O
in,O
respect,O
of,O
Excess,O
Proceeds,O
",",O
Change,O
of,O
Control,O
Offer,O
in,O
respect,O
of,O
a,O
Change,O
of,O
Control,O
",",O
call,O
for,O
redemption,O
or,O
otherwise,O
.,O
,O
Mortgage,O
Loans,O
mean,O
(,O
i,O
),O
Indebtedness,O
of,O
the,O
Company,O
or,O
a,O
Subsidiary,O
secured,O
solely,O
by,O
Liens,O
on,O
real,O
property,O
used,O
by,O
a,O
Subsidiary,O
of,O
the,O
Company,O
for,O
the,O
operation,O
of,O
a,O
vehicle,O
dealership,O
",",O
collision,O
repair,O
business,O
or,O
a,O
business,O
ancillary,O
thereto,O
",",O
together,O
with,O
related,O
real,O
property,O
rights,O
",",O
improvements,O
",",O
fixtures,O
(,O
other,O
than,O
trade,O
fixtures,O
),O
",",O
insurance,O
payments,O
",",O
leases,O
and,O
rents,O
related,O
thereto,O
and,O
proceeds,O
thereof,O
and,O
(,O
ii,O
),O
revolving,O
real,O
estate,O
acquisition,O
and,O
construction,O
lines,O
of,O
credit,O
and,O
related,O
mortgage,O
refinancing,O
facilities,O
of,O
the,O
Company,O
",",O
each,O
as,O
may,O
be,O
amended,O
",",O
renewed,O
",",O
extended,O
",",O
substituted,O
",",O
refinanced,O
",",O
restructured,O
",",O
replaced,O
",",O
supplemented,O
or,O
otherwise,O
modified,O
from,O
time,O
to,O
time,O
",",O
including,O
",",O
without,O
limitation,O
",",O
any,O
successive,O
renewals,O
",",O
extensions,O
",",O
substitutions,O
",",O
refinancings,O
",",O
restructurings,O
",",O
replacements,O
",",O
supplementations,O
or,O
other,O
modifications,O
of,O
the,O
foregoing,O
.,O
,O
Pari,O
Passu,O
Indebtedness,O
means,O
(,O
a,O
),O
any,O
Indebtedness,O
of,O
the,O
Company,O
that,O
is,O
pari,O
passu,O
in,O
right,O
of,O
payment,O
to,O
the,O
Series,O
B,O
notes,O
(,O
including,O
without,O
limitation,O
",",O
the,O
8.625,O
%,O
Notes,O
while,O
outstanding,O
and,O
the,O
Company,O
s,O
4.25,O
%,O
Convertible,O
Senior,O
Subordinated,O
Notes,O
due,O
2015,O
while,O
outstanding,O
),O
",",O
and,O
(,O
b,O
),O
with,O
respect,O
to,O
any,O
Guarantee,O
",",O
Indebtedness,O
which,O
ranks,O
pari,O
passu,O
in,O
right,O
of,O
payment,O
to,O
such,O
Guarantee,O
(,O
including,O
without,O
limitation,O
",",O
the,O
Guarantee,O
with,O
respect,O
to,O
the,O
8.625,O
%,O
Notes,O
while,O
outstanding,O
),O
.,O
,O
Permitted,O
Holders,O
means,O
:,O
,O
Permitted,O
Investment,O
means,O
:,O
,O
In,O
connection,O
with,O
any,O
assets,O
or,O
property,O
contributed,O
or,O
transferred,O
to,O
any,O
Person,O
as,O
an,O
Investment,O
",",O
such,O
property,O
and,O
assets,O
shall,O
be,O
equal,O
to,O
the,O
Fair,O
Market,O
Value,O
at,O
the,O
time,O
of,O
Investment,O
.,O
,O
Permitted,O
Junior,O
Payment,O
means,O
any,O
payment,O
or,O
other,O
distribution,O
to,O
the,O
holders,O
of,O
the,O
Series,O
A,O
or,O
Series,O
B,O
notes,O
of,O
securities,O
of,O
the,O
Company,O
or,O
any,O
other,O
entity,O
that,O
are,O
equity,O
securities,O
(,O
other,O
than,O
Preferred,O
Stock,O
or,O
Redeemable,O
Capital,O
Stock,O
),O
or,O
are,O
subordinated,O
in,O
right,O
of,O
payment,O
to,O
all,O
Senior,O
Indebtedness,O
to,O
substantially,O
the,O
same,O
extent,O
as,O
",",O
or,O
to,O
a,O
greater,O
extent,O
than,O
",",O
the,O
holders,O
of,O
the,O
Indenture,O
Obligations,O
are,O
so,O
subordinated,O
.,O
,O
Person,O
means,O
any,O
individual,O
",",O
corporation,O
",",O
limited,O
liability,O
company,O
",",O
partnership,O
",",O
joint,O
venture,O
",",O
association,O
",",O
joint-stock,O
company,O
",",O
trust,O
",",O
unincorporated,O
organization,O
or,O
government,O
or,O
any,O
agency,O
or,O
political,O
subdivision,O
thereof,O
.,O
,O
of,O
assets,O
upon,O
any,O
voluntary,O
or,O
involuntary,O
liquidation,O
or,O
dissolution,O
of,O
such,O
Person,O
",",O
over,O
the,O
Capital,O
Stock,O
of,O
any,O
other,O
class,O
in,O
such,O
Person,O
.,O
,O
(,O
B,O
),O
the,O
Indebtedness,O
secured,O
thereby,O
shall,O
be,O
with,O
recourse,O
solely,O
to,O
the,O
assets,O
so,O
purchased,O
or,O
acquired,O
or,O
constructed,O
",",O
any,O
additions,O
and,O
accessions,O
thereto,O
and,O
any,O
proceeds,O
therefrom,O
.,O
,O
Qualified,O
Capital,O
Stock,O
of,O
any,O
Person,O
means,O
any,O
and,O
all,O
Capital,O
Stock,O
of,O
such,O
Person,O
other,O
than,O
Redeemable,O
Capital,O
Stock,O
.,O
,O
Redeemable,O
Capital,O
Stock,O
means,O
any,O
Capital,O
Stock,O
that,O
",",O
either,O
by,O
its,O
terms,O
or,O
by,O
the,O
terms,O
of,O
any,O
security,O
into,O
which,O
it,O
is,O
convertible,O
or,O
exchangeable,O
(,O
at,O
the,O
option,O
of,O
the,O
holders,O
thereof,O
),O
",",O
,O
Registration,O
Rights,O
Agreement,O
means,O
the,O
Registration,O
Rights,O
Agreement,O
relating,O
to,O
the,O
Series,O
A,O
notes,O
",",O
dated,O
as,O
of,O
issue,O
date,O
of,O
the,O
Series,O
A,O
notes,O
",",O
among,O
the,O
Company,O
",",O
the,O
Guarantors,O
and,O
the,O
Initial,O
Purchasers,O
party,O
thereto,O
.,O
,O
Replacement,O
Assets,O
means,O
properties,O
and,O
assets,O
(,O
other,O
than,O
cash,O
or,O
any,O
Capital,O
Stock,O
or,O
other,O
security,O
),O
that,O
will,O
be,O
used,O
in,O
a,O
business,O
of,O
the,O
Company,O
or,O
its,O
Restricted,O
Subsidiaries,O
existing,O
on,O
the,O
Issue,O
Date,O
or,O
in,O
a,O
business,O
reasonably,O
related,O
thereto,O
.,O
,O
Restricted,O
Subsidiary,O
means,O
any,O
Subsidiary,O
of,O
the,O
Company,O
that,O
has,O
not,O
been,O
designated,O
by,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Company,O
by,O
a,O
board,O
resolution,O
delivered,O
to,O
the,O
Trustee,O
as,O
an,O
Unrestricted,O
Subsidiary,O
pursuant,O
to,O
and,O
in,O
compliance,O
with,O
the,O
covenant,O
described,O
under,O
Certain,O
Covenants,O
Limitation,O
on,O
Unrestricted,O
Subsidiaries,O
.,O
,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
means,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
or,O
any,O
successor,O
statute,O
",",O
and,O
the,O
rules,O
and,O
regulations,O
promulgated,O
by,O
the,O
Commission,O
thereunder,O
.,O
,O
year,O
or,O
(,O
ii,O
),O
is,O
or,O
are,O
the,O
owner,O
(,O
s,O
),O
of,O
more,O
than,O
five,O
percent,O
of,O
the,O
Consolidated,O
assets,O
of,O
the,O
Company,O
and,O
its,O
Restricted,O
Subsidiaries,O
as,O
at,O
the,O
end,O
of,O
such,O
fiscal,O
year,O
",",O
all,O
as,O
calculated,O
in,O
accordance,O
with,O
GAAP,I-LEGISLATION/ACT
and,O
as,O
shown,O
on,O
the,O
Consolidated,O
financial,O
statements,O
of,O
the,O
Company,O
and,O
its,O
Restricted,O
Subsidiaries,O
for,O
such,O
fiscal,O
year,O
.,O
,O
Stated,O
Maturity,O
means,O
",",O
when,O
used,O
with,O
respect,O
to,O
any,O
Indebtedness,O
or,O
any,O
installment,O
of,O
interest,O
thereon,O
",",O
the,O
dates,O
specified,O
in,O
such,O
Indebtedness,O
as,O
the,O
fixed,O
date,O
on,O
which,O
the,O
principal,O
of,O
such,O
Indebtedness,O
or,O
such,O
installment,O
of,O
interest,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
is,O
due,O
and,O
payable,O
.,O
,O
Subordinated,O
Indebtedness,O
means,O
Indebtedness,O
of,O
the,O
Company,O
or,O
a,O
Guarantor,O
subordinated,O
in,O
right,O
of,O
payment,O
to,O
the,O
Series,O
B,O
notes,O
or,O
the,O
Guarantee,O
of,O
such,O
Guarantor,O
",",O
as,O
the,O
case,O
may,O
be,O
.,O
,O
Subsidiary,O
of,O
a,O
Person,O
means,O
:,O
,O
Temporary,O
Cash,O
Investments,O
means,O
:,O
,O
Treasury,O
Rate,O
means,O
",",O
as,O
of,O
any,O
redemption,O
date,O
",",O
the,O
yield,O
to,O
maturity,O
as,O
of,O
such,O
redemption,O
date,O
of,O
United,I-GOVERNMENT
States,I-GOVERNMENT
Treasury,I-GOVERNMENT
securities,O
with,O
a,O
constant,O
maturity,O
(,O
as,O
compiled,O
and,O
published,O
in,O
the,O
most,O
recent,O
Federal,I-MISCELLANEOUS
Reserve,I-MISCELLANEOUS
Statistical,I-MISCELLANEOUS
Release,I-MISCELLANEOUS
H.15,O
(,O
519,O
),O
that,O
has,O
become,O
publicly,O
available,O
at,O
least,O
two,O
business,O
days,O
prior,O
to,O
the,O
redemption,O
date,O
(,O
or,O
if,O
such,O
Statistical,O
Release,O
is,O
no,O
longer,O
published,O
",",O
any,O
publicly,O
available,O
source,O
of,O
similar,O
market,O
data,O
),O
),O
most,O
nearly,O
equal,O
to,O
the,O
period,O
from,O
the,O
redemption,O
date,O
to,O
March,O
15,O
",",O
2014,O
;,O
provided,O
",",O
however,O
",",O
that,O
if,O
the,O
period,O
from,O
the,O
redemption,O
date,O
to,O
March,O
15,O
",",O
2014,O
is,O
less,O
than,O
one,O
year,O
",",O
the,O
weekly,O
average,O
yield,O
on,O
actually,O
traded,O
United,I-GOVERNMENT
States,I-GOVERNMENT
Treasury,I-GOVERNMENT
securities,O
adjusted,O
to,O
a,O
constant,O
maturity,O
of,O
one,O
year,O
will,O
be,O
used,O
.,O
,O
Trust,I-LEGISLATION/ACT
Indenture,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
means,O
the,O
Trust,I-LEGISLATION/ACT
Indenture,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1939,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
or,O
any,O
successor,O
statute,O
.,O
,O
Unrestricted,O
Subsidiary,O
means,O
any,O
Subsidiary,O
of,O
the,O
Company,O
(,O
other,O
than,O
a,O
Guarantor,O
),O
designated,O
as,O
such,O
pursuant,O
to,O
and,O
in,O
compliance,O
with,O
the,O
covenant,O
described,O
under,O
Certain,O
Covenants,O
Limitation,O
on,O
Unrestricted,O
Subsidiaries,O
.,O
,O
provided,O
that,O
notwithstanding,O
the,O
foregoing,O
any,O
Unrestricted,O
Subsidiary,O
may,O
guarantee,O
the,O
Series,O
B,O
notes,O
.,O
,O
Voting,O
Stock,O
of,O
a,O
Person,O
means,O
Capital,O
Stock,O
of,O
such,O
Person,O
of,O
the,O
class,O
or,O
classes,O
pursuant,O
to,O
which,O
the,O
holders,O
thereof,O
have,O
the,O
general,O
voting,O
power,O
under,O
ordinary,O
circumstances,O
to,O
elect,O
at,O
least,O
a,O
majority,O
of,O
the,O
Board,O
of,O
Directors,O
of,O
such,O
Person,O
(,O
irrespective,O
of,O
whether,O
or,O
not,O
at,O
the,O
time,O
Capital,O
Stock,O
of,O
any,O
other,O
class,O
or,O
classes,O
shall,O
have,O
or,O
might,O
have,O
voting,O
power,O
by,O
reason,O
of,O
the,O
happening,O
of,O
any,O
contingency,O
),O
.,O
,O
Wholly,O
Owned,O
Restricted,O
Subsidiary,O
means,O
a,O
Restricted,O
Subsidiary,O
all,O
the,O
Capital,O
Stock,O
of,O
which,O
(,O
other,O
than,O
directors,O
qualifying,O
shares,O
and,O
shares,O
of,O
Capital,O
Stock,O
of,O
a,O
Restricted,O
Subsidiary,O
which,O
a,O
Manufacturer,O
requires,O
to,O
be,O
held,O
by,O
another,O
Person,O
and,O
which,O
Capital,O
Stock,O
",",O
together,O
with,O
any,O
related,O
contractual,O
arrangements,O
",",O
has,O
no,O
significant,O
economic,O
value,O
with,O
respect,O
to,O
distributions,O
of,O
profits,O
or,O
losses,O
in,O
ordinary,O
circumstances,O
),O
is,O
owned,O
by,O
the,O
Company,O
or,O
another,O
Wholly,O
Owned,O
Restricted,O
Subsidiary,O
(,O
other,O
than,O
directors,O
qualifying,O
shares,O
),O
.,O
,O
The,O
Series,O
B,O
notes,O
will,O
be,O
represented,O
by,O
one,O
or,O
more,O
global,O
notes,O
in,O
registered,O
form,O
without,O
interest,O
coupons,O
attached,O
(,O
collectively,O
",",O
the,O
Global,O
notes,O
),O
.,O
,O
Except,O
as,O
set,O
forth,O
below,O
",",O
all,O
the,O
notes,O
will,O
be,O
exchanged,O
in,O
registered,O
",",O
global,O
form,O
in,O
minimum,O
denominations,O
of,O
$,O
"1,000",O
and,O
integral,O
multiples,O
of,O
$,O
"1,000",O
in,O
excess,O
thereof,O
.,O
,O
Global,O
notes,O
will,O
be,O
deposited,O
upon,O
issuance,O
with,O
the,O
Trustee,O
as,O
custodian,O
for,O
The,I-BUSINESS
Depository,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
(,O
DTC,I-BUSINESS
),O
in,O
New,I-LOCATION
York,I-LOCATION
",",O
New,I-LOCATION
York,I-LOCATION
",",O
and,O
registered,O
in,O
the,O
name,O
of,O
DTC,I-BUSINESS
or,O
its,O
nominee,O
",",O
in,O
each,O
case,O
for,O
credit,O
to,O
an,O
account,O
of,O
a,O
direct,O
or,O
indirect,O
participant,O
in,O
DTC,I-BUSINESS
as,O
described,O
below,O
.,O
,O
Except,O
as,O
set,O
forth,O
below,O
",",O
Global,O
notes,O
may,O
be,O
transferred,O
only,O
to,O
another,O
nominee,O
of,O
DTC,I-BUSINESS
or,O
to,O
a,O
successor,O
of,O
DTC,I-BUSINESS
or,O
its,O
nominee,O
",",O
in,O
whole,O
and,O
not,O
in,O
part,O
.,O
,O
Except,O
in,O
the,O
limited,O
circumstances,O
described,O
below,O
",",O
beneficial,O
interests,O
in,O
Global,O
notes,O
may,O
not,O
be,O
exchanged,O
for,O
notes,O
in,O
certificated,O
form,O
and,O
owners,O
of,O
beneficial,O
interests,O
in,O
Global,O
notes,O
will,O
not,O
be,O
entitled,O
to,O
receive,O
physical,O
delivery,O
of,O
notes,O
in,O
certificated,O
form,O
.,O
,O
See,O
Exchange,O
of,O
Global,O
notes,O
for,O
Certificated,O
Notes,O
.,O
,O
Transfers,O
of,O
beneficial,O
interests,O
in,O
the,O
Global,O
notes,O
will,O
be,O
subject,O
to,O
the,O
applicable,O
rules,O
and,O
procedures,O
of,O
DTC,I-BUSINESS
and,O
its,O
direct,O
or,O
indirect,O
participants,O
",",O
including,O
",",O
if,O
applicable,O
",",O
those,O
of,O
Euroclear,I-BUSINESS
and,O
Clearstream,I-BUSINESS
",",O
which,O
may,O
change,O
from,O
time,O
to,O
time,O
.,O
,O
The,O
following,O
description,O
of,O
the,O
operations,O
and,O
procedures,O
of,O
DTC,I-BUSINESS
",",O
Euroclear,O
and,O
Clearstream,I-BUSINESS
is,O
provided,O
solely,O
as,O
a,O
matter,O
of,O
convenience,O
.,O
,O
These,O
operations,O
and,O
procedures,O
are,O
solely,O
within,O
the,O
control,O
of,O
the,O
respective,O
settlement,O
systems,O
and,O
are,O
subject,O
to,O
changes,O
by,O
them,O
.,O
,O
Neither,O
we,O
nor,O
the,O
Trustee,O
have,O
any,O
responsibility,O
for,O
these,O
operations,O
and,O
procedures,O
and,O
urges,O
investors,O
to,O
contact,O
the,O
system,O
or,O
their,O
participants,O
directly,O
to,O
discuss,O
these,O
matters,O
.,O
,O
DTC,I-BUSINESS
has,O
advised,O
us,O
that,O
DTC,I-BUSINESS
is,O
a,O
limited-purpose,O
trust,O
company,O
organized,O
under,O
the,O
laws,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
New,I-LOCATION
York,I-LOCATION
",",O
a,O
banking,O
organization,O
within,O
the,O
meaning,O
of,O
the,O
New,I-LEGISLATION/ACT
York,I-LEGISLATION/ACT
Banking,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
",",O
a,O
member,O
of,O
the,O
Federal,I-GOVERNMENT
Reserve,I-GOVERNMENT
System,I-GOVERNMENT
",",O
a,O
clearing,O
corporation,O
within,O
the,O
meaning,O
of,O
the,O
New,I-LEGISLATION/ACT
York,I-LEGISLATION/ACT
Uniform,I-LEGISLATION/ACT
Commercial,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
and,O
a,O
clearing,O
agency,O
registered,O
pursuant,O
to,O
the,O
provisions,O
of,O
Section,O
17A,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
DTC,I-BUSINESS
was,O
created,O
to,O
hold,O
securities,O
for,O
its,O
participating,O
organizations,O
(,O
collectively,O
",",O
the,O
Participants,O
),O
and,O
to,O
facilitate,O
the,O
clearance,O
and,O
settlement,O
of,O
transactions,O
in,O
those,O
securities,O
between,O
Participants,O
through,O
electronic,O
book-entry,O
changes,O
in,O
accounts,O
of,O
its,O
Participants,O
.,O
,O
The,O
Participants,O
include,O
securities,O
brokers,O
and,O
dealers,O
(,O
including,O
the,O
initial,O
purchasers,O
),O
",",O
banks,O
",",O
trust,O
companies,O
",",O
clearing,O
corporations,O
and,O
certain,O
other,O
organizations,O
.,O
,O
Access,O
to,O
DTC,I-BUSINESS
s,O
system,O
is,O
also,O
available,O
to,O
other,O
entities,O
such,O
as,O
banks,O
",",O
brokers,O
",",O
dealers,O
",",O
trust,O
companies,O
clearing,O
corporations,O
and,O
certain,O
other,O
organizations,O
that,O
clear,O
through,O
or,O
maintain,O
a,O
custodial,O
relationship,O
with,O
a,O
Participant,O
",",O
either,O
directly,O
or,O
indirectly,O
(,O
collectively,O
",",O
the,O
Indirect,O
Participants,O
),O
.,O
,O
Persons,O
who,O
are,O
not,O
Participants,O
may,O
beneficially,O
own,O
securities,O
held,O
by,O
or,O
on,O
behalf,O
of,O
DTC,I-BUSINESS
only,O
through,O
the,O
Participants,O
or,O
the,O
Indirect,O
Participants,O
.,O
,O
The,O
ownership,O
interests,O
in,O
",",O
and,O
transfers,O
of,O
ownership,O
interests,O
in,O
",",O
each,O
security,O
held,O
by,O
or,O
on,O
behalf,O
of,O
DTC,I-BUSINESS
are,O
recorded,O
on,O
the,O
records,O
of,O
the,O
Participants,O
and,O
Indirect,O
Participants,O
.,O
,O
DTC,I-BUSINESS
has,O
also,O
advised,O
us,O
that,O
",",O
pursuant,O
to,O
procedures,O
established,O
by,O
it,O
:,O
,O
Investors,O
in,O
the,O
Global,O
notes,O
who,O
are,O
Participants,O
in,O
DTC,I-BUSINESS
s,O
system,O
may,O
hold,O
their,O
interests,O
directly,O
through,O
DTC,I-BUSINESS
.,O
,O
Investors,O
in,O
the,O
Global,O
notes,O
who,O
are,O
not,O
Participants,O
may,O
hold,O
their,O
interests,O
therein,O
indirectly,O
through,O
organizations,O
that,O
are,O
Participants,O
in,O
such,O
system,O
.,O
,O
All,O
interests,O
in,O
a,O
Global,O
Note,O
may,O
be,O
subject,O
to,O
the,O
procedures,O
and,O
requirements,O
of,O
DTC,I-BUSINESS
.,O
,O
Interests,O
in,O
a,O
Global,O
Note,O
held,O
through,O
Euroclear,I-BUSINESS
or,O
Clearstream,I-BUSINESS
may,O
be,O
subject,O
to,O
the,O
procedures,O
and,O
requirements,O
of,O
those,O
systems,O
as,O
well,O
.,O
,O
The,O
laws,O
of,O
some,O
states,O
require,O
that,O
certain,O
persons,O
take,O
physical,O
delivery,O
in,O
definitive,O
form,O
of,O
securities,O
that,O
they,O
own,O
and,O
the,O
ability,O
to,O
transfer,O
beneficial,O
interests,O
in,O
a,O
Global,O
Note,O
to,O
Persons,O
that,O
are,O
subject,O
to,O
those,O
requirements,O
will,O
be,O
limited,O
to,O
that,O
extent,O
.,O
,O
Because,O
DTC,I-BUSINESS
can,O
act,O
only,O
on,O
behalf,O
of,O
Participants,O
",",O
which,O
in,O
turn,O
act,O
on,O
behalf,O
of,O
Indirect,O
Participants,O
",",O
the,O
ability,O
of,O
a,O
person,O
having,O
beneficial,O
interests,O
in,O
a,O
Global,O
Note,O
to,O
pledge,O
those,O
interests,O
to,O
Persons,O
that,O
do,O
not,O
participate,O
in,O
the,O
DTC,I-BUSINESS
system,O
",",O
or,O
otherwise,O
take,O
actions,O
in,O
respect,O
of,O
those,O
interests,O
",",O
may,O
be,O
affected,O
by,O
the,O
lack,O
of,O
a,O
physical,O
certificate,O
evidencing,O
those,O
interests,O
.,O
,O
So,O
long,O
as,O
DTC,I-BUSINESS
or,O
its,O
nominee,O
is,O
the,O
registered,O
owner,O
or,O
Holder,O
of,O
the,O
Series,O
B,O
notes,O
",",O
DTC,I-BUSINESS
or,O
such,O
nominee,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
will,O
be,O
considered,O
the,O
sole,O
owner,O
or,O
Holder,O
of,O
the,O
Series,O
B,O
Notes,O
represented,O
by,O
Global,O
notes,O
for,O
all,O
purposes,O
under,O
the,O
Indenture,O
.,O
,O
No,O
beneficial,O
owner,O
of,O
an,O
interest,O
in,O
the,O
Global,O
notes,O
will,O
be,O
able,O
to,O
transfer,O
that,O
interest,O
except,O
in,O
accordance,O
with,O
DTC,I-BUSINESS
s,O
procedures,O
",",O
in,O
addition,O
to,O
those,O
provided,O
for,O
under,O
the,O
Indenture,O
with,O
respect,O
to,O
the,O
Global,O
notes,O
.,O
,O
Payments,O
in,O
respect,O
of,O
the,O
principal,O
of,O
and,O
premium,O
",",O
interest,O
and,O
additional,O
interest,O
",",O
if,O
any,O
",",O
on,O
a,O
Global,O
note,O
registered,O
in,O
the,O
name,O
of,O
DTC,I-BUSINESS
or,O
its,O
nominee,O
will,O
be,O
payable,O
to,O
DTC,I-BUSINESS
in,O
its,O
capacity,O
as,O
the,O
registered,O
Holder,O
under,O
the,O
Indenture,O
.,O
,O
Under,O
the,O
terms,O
of,O
each,O
Indenture,O
",",O
we,O
and,O
the,O
Trustee,O
will,O
treat,O
the,O
Persons,O
in,O
whose,O
names,O
Series,O
B,O
notes,O
",",O
including,O
Global,O
notes,O
",",O
are,O
registered,O
as,O
the,O
owners,O
of,O
such,O
Series,O
B,O
notes,O
for,O
the,O
purpose,O
of,O
receiving,O
payments,O
and,O
for,O
all,O
other,O
purposes,O
.,O
,O
Consequently,O
",",O
neither,O
we,O
",",O
the,O
Trustee,O
nor,O
any,O
agent,O
of,O
either,O
of,O
us,O
or,O
the,O
Trustee,O
has,O
or,O
will,O
have,O
any,O
responsibility,O
or,O
liability,O
for,O
:,O
,O
We,O
expect,O
that,O
DTC,I-BUSINESS
or,O
its,O
nominee,O
",",O
upon,O
receipt,O
of,O
any,O
payment,O
of,O
principal,O
",",O
premium,O
(,O
if,O
any,O
),O
and,O
interest,O
(,O
including,O
additional,O
interest,O
",",O
if,O
any,O
),O
on,O
the,O
Global,O
notes,O
",",O
will,O
credit,O
Participants,O
accounts,O
with,O
payments,O
with,O
an,O
amount,O
proportionate,O
to,O
its,O
beneficial,O
ownership,O
of,O
an,O
interest,O
in,O
the,O
principal,O
amount,O
of,O
the,O
relevant,O
security,O
as,O
shown,O
on,O
the,O
records,O
of,O
DTC,O
or,O
its,O
nominee,O
.,O
,O
We,O
expect,O
that,O
payments,O
by,O
the,O
Participants,O
and,O
the,O
Indirect,O
Participants,O
to,O
the,O
beneficial,O
owners,O
of,O
Series,O
B,O
notes,O
will,O
be,O
governed,O
by,O
standing,O
instructions,O
and,O
customary,O
practices,O
and,O
will,O
be,O
the,O
responsibility,O
of,O
the,O
Participants,O
or,O
the,O
Indirect,O
Participants,O
and,O
will,O
not,O
be,O
the,O
responsibility,O
of,O
DTC,O
",",O
the,O
Trustee,O
or,O
us,O
.,O
,O
Neither,O
we,O
nor,O
the,O
Trustee,O
will,O
be,O
liable,O
for,O
any,O
delay,O
by,O
DTC,I-BUSINESS
or,O
any,O
of,O
its,O
Participants,O
in,O
identifying,O
the,O
beneficial,O
owners,O
of,O
any,O
Series,O
B,O
notes,O
",",O
and,O
we,O
and,O
the,O
Trustee,O
may,O
conclusively,O
rely,O
on,O
and,O
will,O
be,O
protected,O
in,O
relying,O
on,O
instructions,O
from,O
DTC,I-BUSINESS
or,O
its,O
nominee,O
for,O
all,O
purposes,O
.,O
,O
Transfers,O
between,O
Participants,O
in,O
DTC,I-BUSINESS
will,O
be,O
effected,O
in,O
accordance,O
with,O
DTC,I-BUSINESS
s,O
procedures,O
",",O
and,O
will,O
be,O
settled,O
in,O
same-day,O
funds,O
and,O
transfers,O
between,O
participants,O
in,O
Euroclear,I-BUSINESS
and,O
Clearstream,I-BUSINESS
will,O
be,O
effected,O
in,O
accordance,O
with,O
their,O
respective,O
rules,O
and,O
operating,O
procedures,O
.,O
,O
Subject,O
to,O
compliance,O
with,O
the,O
transfer,O
restrictions,O
applicable,O
to,O
the,O
notes,O
described,O
herein,O
and,O
set,O
forth,O
in,O
the,O
Indenture,O
",",O
cross-market,O
transfers,O
between,O
the,O
Participants,O
",",O
on,O
the,O
one,O
hand,O
",",O
and,O
Euroclear,I-BUSINESS
or,O
Clearstream,I-BUSINESS
participants,O
",",O
on,O
the,O
other,O
hand,O
",",O
will,O
be,O
effected,O
through,O
DTC,I-BUSINESS
in,O
accordance,O
with,O
DTC,I-BUSINESS
s,O
rules,O
on,O
behalf,O
of,O
Euroclear,I-BUSINESS
or,O
Clearstream,I-BUSINESS
",",O
as,O
the,O
case,O
may,O
be,O
",",O
by,O
their,O
respective,O
depositaries,O
;,O
however,O
",",O
such,O
cross-market,O
transactions,O
will,O
require,O
delivery,O
of,O
instructions,O
to,O
Euroclear,I-BUSINESS
or,O
Clearstream,I-BUSINESS
",",O
as,O
the,O
case,O
may,O
be,O
",",O
by,O
the,O
counterparty,O
in,O
such,O
system,O
in,O
accordance,O
with,O
the,O
rules,O
and,O
procedures,O
and,O
within,O
the,O
established,O
deadlines,O
(,O
Brussels,I-MISCELLANEOUS
time,I-MISCELLANEOUS
),O
of,O
such,O
system,O
.,O
,O
settlement,O
on,O
its,O
behalf,O
by,O
delivering,O
or,O
receiving,O
interests,O
in,O
the,O
relevant,O
Global,O
Note,O
from,O
DTC,I-BUSINESS
",",O
and,O
making,O
or,O
receiving,O
payment,O
in,O
accordance,O
with,O
normal,O
procedures,O
for,O
same-day,O
funds,O
settlement,O
applicable,O
to,O
DTC,I-BUSINESS
.,O
,O
Euroclear,I-BUSINESS
participants,O
and,O
Clearstream,I-BUSINESS
participants,O
may,O
not,O
deliver,O
instructions,O
directly,O
to,O
the,O
depositories,O
for,O
Euroclear,I-BUSINESS
or,O
Clearstream,I-BUSINESS
.,O
,O
DTC,I-BUSINESS
has,O
advised,O
us,O
that,O
it,O
will,O
take,O
any,O
action,O
permitted,O
to,O
be,O
taken,O
by,O
a,O
Holder,O
of,O
Series,O
B,O
notes,O
only,O
at,O
the,O
direction,O
of,O
one,O
or,O
more,O
Participants,O
to,O
whose,O
account,O
DTC,I-BUSINESS
has,O
credited,O
the,O
interests,O
in,O
the,O
Global,O
notes,O
and,O
only,O
in,O
respect,O
of,O
the,O
portion,O
of,O
the,O
aggregate,O
principal,O
amount,O
of,O
the,O
Series,O
B,O
notes,O
as,O
to,O
which,O
that,O
Participant,O
or,O
those,O
Participants,O
has,O
or,O
have,O
given,O
the,O
relevant,O
direction,O
.,O
,O
However,O
",",O
if,O
there,O
is,O
an,O
Event,O
of,O
Default,O
under,O
the,O
Series,O
B,O
notes,O
",",O
DTC,I-BUSINESS
reserves,O
the,O
right,O
to,O
exchange,O
the,O
Global,O
notes,O
for,O
legended,O
Series,O
B,O
notes,O
in,O
certificated,O
form,O
",",O
and,O
to,O
distribute,O
such,O
Series,O
B,O
notes,O
to,O
its,O
Participants,O
.,O
,O
Although,O
DTC,I-BUSINESS
",",O
Euroclear,I-BUSINESS
and,O
Clearstream,I-BUSINESS
have,O
agreed,O
to,O
the,O
foregoing,O
procedures,O
in,O
order,O
to,O
facilitate,O
transfers,O
of,O
interests,O
in,O
Global,O
notes,O
among,O
Participants,O
",",O
they,O
are,O
under,O
no,O
obligation,O
to,O
perform,O
those,O
procedures,O
",",O
and,O
may,O
discontinue,O
or,O
change,O
those,O
procedures,O
at,O
any,O
time,O
.,O
,O
Neither,O
we,O
",",O
the,O
Trustee,O
nor,O
any,O
of,O
their,O
respective,O
agents,O
will,O
have,O
any,O
responsibility,O
for,O
the,O
performance,O
by,O
DTC,I-BUSINESS
",",O
Euroclear,I-BUSINESS
",",O
Clearstream,I-BUSINESS
or,O
their,O
respective,O
Participants,O
or,O
Indirect,O
Participants,O
of,O
their,O
respective,O
obligations,O
under,O
the,O
rules,O
and,O
procedures,O
governing,O
their,O
operations,O
.,O
,O
A,O
Global,O
Note,O
is,O
exchangeable,O
for,O
a,O
Certificated,O
Note,O
of,O
the,O
same,O
series,O
if,O
:,O
,O
In,O
addition,O
",",O
beneficial,O
interests,O
in,O
a,O
Global,O
Note,O
may,O
be,O
exchanged,O
for,O
Certificated,O
Notes,O
upon,O
prior,O
written,O
notice,O
given,O
to,O
the,O
Trustee,O
by,O
or,O
on,O
behalf,O
of,O
DTC,I-BUSINESS
in,O
accordance,O
with,O
the,O
Indenture,O
.,O
,O
In,O
all,O
cases,O
",",O
Certificated,O
Notes,O
delivered,O
in,O
exchange,O
for,O
any,O
Global,O
Note,O
or,O
beneficial,O
interests,O
in,O
a,O
Global,O
Note,O
will,O
be,O
registered,O
in,O
the,O
names,O
",",O
and,O
issued,O
in,O
any,O
approved,O
denominations,O
",",O
requested,O
by,O
or,O
on,O
behalf,O
of,O
the,O
depositary,O
(,O
in,O
accordance,O
with,O
its,O
customary,O
procedures,O
),O
and,O
will,O
bear,O
the,O
applicable,O
restrictive,O
legend,O
referred,O
to,O
in,O
the,O
Indenture,O
",",O
unless,O
that,O
legend,O
is,O
not,O
required,O
by,O
applicable,O
law,O
.,O
,O
Certificated,O
Notes,O
may,O
not,O
be,O
exchangeable,O
for,O
beneficial,O
interests,O
in,O
any,O
Global,O
note,O
unless,O
the,O
transferor,O
first,O
delivers,O
to,O
the,O
Trustee,O
a,O
written,O
certificate,O
(,O
in,O
the,O
form,O
provided,O
in,O
the,O
Indenture,O
),O
to,O
the,O
effect,O
that,O
the,O
transfer,O
will,O
comply,O
with,O
the,O
appropriate,O
transfer,O
restrictions,O
applicable,O
to,O
the,O
Series,O
B,O
notes,O
being,O
transferred,O
.,O
,O
We,O
will,O
make,O
payments,O
in,O
respect,O
of,O
Series,O
B,O
notes,O
represented,O
by,O
Global,O
notes,O
",",O
(,O
including,O
payments,O
of,O
principal,O
",",O
premium,O
",",O
if,O
any,O
",",O
and,O
interest,O
and,O
additional,O
interest,O
",",O
if,O
any,O
),O
by,O
wire,O
transfer,O
of,O
immediately,O
available,O
funds,O
to,O
the,O
accounts,O
specified,O
by,O
the,O
DTC,I-BUSINESS
or,O
its,O
nominee,O
.,O
,O
We,O
will,O
make,O
all,O
payments,O
of,O
principal,O
of,O
and,O
premium,O
",",O
if,O
any,O
",",O
and,O
interest,O
and,O
additional,O
interest,O
",",O
if,O
any,O
",",O
on,O
Certificated,O
Notes,O
by,O
wire,O
transfer,O
of,O
immediately,O
available,O
funds,O
to,O
the,O
accounts,O
specified,O
by,O
the,O
Holders,O
of,O
the,O
Certificated,O
Notes,O
or,O
",",O
if,O
no,O
account,O
is,O
specified,O
",",O
by,O
mailing,O
a,O
check,O
to,O
each,O
Holder,O
s,O
registered,O
address,O
.,O
,O
The,O
following,O
summary,O
describes,O
the,O
material,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
consequences,O
and,O
",",O
in,O
the,O
case,O
of,O
a,O
holder,O
that,O
is,O
a,O
non-U.S.,I-MISCELLANEOUS
holder,O
(,O
as,O
defined,O
below,O
),O
",",O
the,O
United,I-LOCATION
States,I-LOCATION
federal,O
estate,O
tax,O
consequences,O
",",O
of,O
purchasing,O
",",O
owning,O
and,O
disposing,O
of,O
the,O
Series,O
B,O
notes,O
.,O
,O
This,O
summary,O
applies,O
to,O
you,O
only,O
if,O
you,O
acquire,O
the,O
Series,O
B,O
notes,O
in,O
exchange,O
for,O
Series,O
A,O
notes,O
that,O
you,O
acquired,O
for,O
a,O
price,O
equal,O
to,O
the,O
issue,O
price,O
of,O
the,O
Series,O
A,O
notes,O
.,O
,O
The,O
issue,O
price,O
of,O
the,O
Series,O
A,O
notes,O
is,O
the,O
first,O
price,O
at,O
which,O
a,O
substantial,O
amount,O
of,O
the,O
Series,O
A,O
notes,O
was,O
sold,O
other,O
than,O
to,O
bond,O
houses,O
",",O
brokers,O
",",O
or,O
similar,O
persons,O
or,O
organizations,O
acting,O
in,O
the,O
capacity,O
of,O
underwriters,O
",",O
placement,O
agents,O
or,O
wholesalers,O
.,O
,O
This,O
summary,O
deals,O
only,O
with,O
Series,O
B,O
notes,O
held,O
as,O
capital,O
assets,O
(,O
generally,O
",",O
investment,O
property,O
),O
and,O
does,O
not,O
deal,O
with,O
special,O
tax,O
situations,O
such,O
as,O
:,O
dealers,O
",",O
broker-dealers,O
and,O
traders,O
in,O
securities,O
or,O
currencies,O
;,O
United,I-LOCATION
States,I-LOCATION
holders,O
(,O
as,O
defined,O
below,O
),O
whose,O
functional,O
currency,O
is,O
not,O
the,O
United,I-LOCATION
States,I-LOCATION
dollar,O
;,O
persons,O
holding,O
Series,O
B,O
notes,O
as,O
part,O
of,O
a,O
hedge,O
",",O
straddle,O
",",O
synthetic,O
security,O
",",O
conversion,O
",",O
constructive,O
sale,O
or,O
other,O
integrated,O
transaction,O
;,O
persons,O
that,O
mark,O
to,O
market,O
their,O
securities,O
;,O
individual,O
retirement,O
and,O
other,O
tax,O
deferred,O
accounts,O
;,O
regulated,O
investment,O
companies,O
;,O
real,O
estate,O
investment,O
trusts,O
;,O
certain,O
United,I-LOCATION
States,I-LOCATION
expatriates,O
;,O
financial,O
institutions,O
(,O
including,O
banks,O
),O
;,O
insurance,O
companies,O
;,O
controlled,O
foreign,O
corporations,O
",",O
foreign,O
personal,O
holding,O
companies,O
and,O
passive,O
foreign,O
investment,O
companies,O
and,O
shareholders,O
of,O
such,O
foreign,O
corporations,O
;,O
entities,O
that,O
are,O
tax-exempt,O
for,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
purposes,O
;,O
and,O
pass-through,O
entities,O
",",O
including,O
partnerships,O
and,O
entities,O
and,O
arrangements,O
classified,O
as,O
partnerships,O
for,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
purposes,O
",",O
and,O
beneficial,O
owners,O
of,O
pass-through,O
entities,O
.,O
,O
If,O
a,O
partnership,O
(,O
or,O
other,O
entity,O
classified,O
as,O
a,O
partnership,O
for,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
purposes,O
),O
is,O
the,O
beneficial,O
owner,O
of,O
the,O
Series,O
B,O
notes,O
",",O
the,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
treatment,O
of,O
a,O
partner,O
in,O
the,O
partnership,O
will,O
generally,O
depend,O
on,O
the,O
status,O
of,O
the,O
partner,O
",",O
the,O
activities,O
of,O
the,O
partnership,O
and,O
certain,O
determinations,O
made,O
at,O
the,O
partner,O
level,O
.,O
,O
If,O
you,O
are,O
a,O
partnership,O
holding,O
Series,O
B,O
notes,O
or,O
a,O
partner,O
in,O
such,O
a,O
partnership,O
",",O
you,O
should,O
consult,O
your,O
own,O
tax,O
advisor,O
regarding,O
the,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
consequences,O
of,O
purchasing,O
",",O
owning,O
and,O
disposing,O
of,O
the,O
Series,O
B,O
notes,O
.,O
,O
This,O
summary,O
does,O
not,O
discuss,O
all,O
of,O
the,O
aspects,O
of,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
and,O
estate,O
taxation,O
that,O
may,O
be,O
relevant,O
to,O
you,O
in,O
light,O
of,O
your,O
particular,O
investment,O
or,O
other,O
circumstances,O
.,O
,O
In,O
addition,O
",",O
this,O
summary,O
does,O
not,O
discuss,O
any,O
United,I-LOCATION
States,I-LOCATION
state,O
or,O
local,O
income,O
or,O
foreign,O
income,O
",",O
gift,O
",",O
alternative,O
minimum,O
or,O
other,O
tax,O
consequences,O
.,O
,O
This,O
summary,O
is,O
based,O
on,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
and,O
estate,O
tax,O
law,O
",",O
including,O
the,O
provisions,O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1986,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
),O
",",O
regulations,O
promulgated,O
thereunder,O
",",O
administrative,O
rulings,O
and,O
judicial,O
authority,O
",",O
all,O
as,O
in,O
effect,O
as,O
of,O
the,O
date,O
of,O
this,O
prospectus,O
.,O
,O
Subsequent,O
developments,O
in,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
and,O
estate,O
tax,O
law,O
",",O
including,O
changes,O
in,O
law,O
or,O
differing,O
interpretations,O
",",O
which,O
may,O
be,O
applied,O
retroactively,O
",",O
could,O
have,O
a,O
material,O
effect,O
on,O
the,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
and,O
estate,O
tax,O
consequences,O
of,O
purchasing,O
",",O
owning,O
and,O
disposing,O
of,O
Series,O
B,O
notes,O
as,O
set,O
forth,O
in,O
this,O
summary,O
.,O
,O
We,O
have,O
not,O
requested,O
",",O
and,O
do,O
not,O
intend,O
to,O
request,O
",",O
a,O
ruling,O
from,O
the,O
U.S.,I-GOVERNMENT
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
(,O
the,O
IRS,I-GOVERNMENT
),O
with,O
respect,O
to,O
any,O
of,O
the,O
U.S.,I-LOCATION
federal,O
income,O
or,O
estate,O
tax,O
consequences,O
described,O
below,O
.,O
,O
There,O
can,O
be,O
no,O
assurance,O
that,O
the,O
IRS,I-GOVERNMENT
will,O
not,O
disagree,O
with,O
or,O
challenge,O
any,O
of,O
the,O
conclusions,O
set,O
forth,O
herein,O
.,O
,O
Before,O
you,O
decide,O
whether,O
to,O
participate,O
in,O
the,O
exchange,O
offer,O
",",O
you,O
should,O
consult,O
your,O
own,O
tax,O
advisor,O
regarding,O
the,O
particular,O
United,I-LOCATION
States,I-LOCATION
federal,O
",",O
state,O
and,O
local,O
and,O
foreign,O
income,O
and,O
other,O
tax,O
consequences,O
of,O
acquiring,O
",",O
owning,O
and,O
disposing,O
of,O
the,O
Series,O
B,O
notes,O
that,O
may,O
be,O
applicable,O
to,O
you,O
.,O
,O
THIS,O
SUMMARY,O
IS,O
NOT,O
INTENDED,O
TO,O
BE,O
USED,O
",",O
WAS,O
NOT,O
WRITTEN,O
TO,O
BE,O
USED,O
",",O
AND,O
CAN,O
NOT,O
BE,O
USED,O
",",O
BY,O
YOU,O
FOR,O
THE,O
PURPOSE,O
OF,O
AVOIDING,O
PENALTIES,O
UNDER,O
THE,O
U.S.,I-LOCATION
FEDERAL,O
TAX,O
LAWS,O
THAT,O
MAY,O
BE,O
IMPOSED,O
UPON,O
YOU,O
.,O
,O
THIS,O
SUMMARY,O
WAS,O
WRITTEN,O
IN,O
CONNECTION,O
WITH,O
THE,O
PROMOTION,O
OR,O
MARKETING,O
OF,O
THE,O
SERIES,O
B,O
NOTES,O
.,O
,O
YOU,O
SHOULD,O
SEEK,O
ADVICE,O
BASED,O
ON,O
YOUR,O
PARTICULAR,O
CIRCUMSTANCES,O
FROM,O
AN,O
INDEPENDENT,O
TAX,O
ADVISOR,O
.,O
,O
An,O
exchange,O
of,O
Series,O
A,O
notes,O
for,O
Series,O
B,O
notes,O
pursuant,O
to,O
the,O
exchange,O
offer,O
will,O
not,O
be,O
a,O
taxable,O
event,O
for,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
purposes,O
",",O
and,O
the,O
Series,O
B,O
notes,O
will,O
be,O
treated,O
for,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
purposes,O
as,O
a,O
continuation,O
of,O
the,O
Series,O
A,O
notes,O
in,O
the,O
hands,O
of,O
a,O
United,I-LOCATION
States,I-LOCATION
holder,O
or,O
a,O
Non-U.S.,I-MISCELLANEOUS
.,O
,O
As,O
a,O
result,O
",",O
for,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
purposes,O
",",O
(,O
1,O
),O
a,O
holder,O
will,O
not,O
recognize,O
any,O
gain,O
or,O
loss,O
on,O
the,O
exchange,O
",",O
(,O
2,O
),O
a,O
holder,O
s,O
holding,O
period,O
for,O
a,O
Series,O
B,O
note,O
will,O
include,O
the,O
holding,O
period,O
for,O
the,O
Series,O
A,O
note,O
and,O
(,O
3,O
),O
a,O
holder,O
s,O
adjusted,O
tax,O
basis,O
of,O
the,O
Series,O
B,O
note,O
will,O
be,O
the,O
same,O
as,O
the,O
holder,O
s,O
adjusted,O
tax,O
basis,O
of,O
the,O
Series,O
A,O
note,O
.,O
,O
The,O
following,O
summary,O
applies,O
to,O
you,O
only,O
if,O
you,O
are,O
a,O
United,I-LOCATION
States,I-LOCATION
holder,O
(,O
as,O
defined,O
below,O
),O
.,O
,O
A,O
United,I-LOCATION
States,I-LOCATION
holder,O
is,O
a,O
beneficial,O
owner,O
of,O
a,O
Series,O
B,O
note,O
or,O
Series,O
B,O
notes,O
who,O
or,O
which,O
is,O
for,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
purposes,O
:,O
,O
Interest,O
on,O
your,O
Series,O
B,O
notes,O
will,O
be,O
taxed,O
as,O
ordinary,O
interest,O
income,O
.,O
,O
You,O
generally,O
will,O
recognize,O
taxable,O
gain,O
or,O
loss,O
upon,O
the,O
sale,O
",",O
redemption,O
",",O
retirement,O
or,O
other,O
taxable,O
disposition,O
of,O
your,O
Series,O
B,O
notes,O
equal,O
to,O
the,O
difference,O
",",O
if,O
any,O
",",O
between,O
:,O
,O
Your,O
gain,O
or,O
loss,O
generally,O
will,O
be,O
capital,O
gain,O
or,O
loss,O
.,O
,O
This,O
capital,O
gain,O
or,O
loss,O
will,O
be,O
long-term,O
capital,O
gain,O
or,O
loss,O
if,O
at,O
the,O
time,O
of,O
the,O
sale,O
or,O
other,O
taxable,O
disposition,O
your,O
holding,O
period,O
for,O
the,O
Series,O
B,O
notes,O
is,O
more,O
than,O
one,O
year,O
.,O
,O
Long-term,O
capital,O
gain,O
of,O
non-corporate,O
taxpayers,O
is,O
currently,O
subject,O
to,O
a,O
reduced,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
rate,O
.,O
,O
In,O
general,O
",",O
backup,O
withholding,O
at,O
a,O
rate,O
of,O
28,O
%,O
(,O
which,O
rate,O
will,O
increase,O
to,O
31,O
%,O
for,O
taxable,O
years,O
beginning,O
on,O
or,O
after,O
January,O
1,O
",",O
2011,O
),O
may,O
apply,O
:,O
,O
if,O
you,O
are,O
a,O
non-corporate,O
United,I-LOCATION
States,I-LOCATION
holder,O
and,O
fail,O
to,O
provide,O
a,O
correct,O
taxpayer,O
identification,O
number,O
or,O
otherwise,O
comply,O
with,O
applicable,O
requirements,O
of,O
the,O
backup,O
withholding,O
rules,O
.,O
,O
The,O
backup,O
withholding,O
tax,O
is,O
not,O
an,O
additional,O
tax,O
and,O
any,O
amounts,O
withheld,O
under,O
the,O
backup,O
withholding,O
rules,O
from,O
a,O
payment,O
to,O
you,O
may,O
be,O
credited,O
against,O
your,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
liability,O
or,O
may,O
entitle,O
you,O
to,O
a,O
refund,O
",",O
provided,O
that,O
the,O
required,O
information,O
is,O
timely,O
furnished,O
to,O
the,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
.,O
,O
The,O
following,O
summary,O
applies,O
to,O
you,O
if,O
you,O
are,O
a,O
beneficial,O
owner,O
of,O
a,O
Series,O
B,O
note,O
and,O
you,O
are,O
not,O
a,O
United,I-LOCATION
States,I-LOCATION
holder,O
(,O
as,O
defined,O
above,O
),O
nor,O
a,O
partnership,O
(,O
or,O
other,O
entity,O
classified,O
as,O
a,O
partnership,O
for,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
purposes,O
),O
(,O
a,O
non-U.S.,I-MISCELLANEOUS
.,O
,O
An,O
individual,O
may,O
",",O
subject,O
to,O
exceptions,O
",",O
be,O
deemed,O
to,O
be,O
a,O
resident,O
alien,O
",",O
as,O
opposed,O
to,O
a,O
non-resident,O
alien,O
",",O
by,O
among,O
other,O
ways,O
being,O
present,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
:,O
,O
Resident,O
aliens,O
are,O
subject,O
to,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
as,O
if,O
they,O
were,O
United,I-LOCATION
States,I-LOCATION
citizens,O
.,O
,O
Under,O
current,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
laws,O
",",O
and,O
subject,O
to,O
the,O
discussion,O
below,O
",",O
United,I-LOCATION
States,I-LOCATION
federal,O
withholding,O
tax,O
will,O
not,O
apply,O
to,O
payments,O
by,O
us,O
or,O
our,O
paying,O
agent,O
(,O
in,O
its,O
capacity,O
as,O
such,O
),O
of,O
principal,O
of,O
and,O
interest,O
on,O
your,O
Series,O
B,O
notes,O
under,O
the,O
portfolio,O
interest,O
exception,O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
",",O
provided,O
that,O
in,O
the,O
case,O
of,O
interest,O
:,O
,O
The,O
applicable,O
Treasury,I-LEGISLATION/ACT
regulations,I-LEGISLATION/ACT
provide,O
alternative,O
methods,O
for,O
satisfying,O
the,O
certification,O
requirement,O
described,O
in,O
this,O
section,O
.,O
,O
If,O
you,O
are,O
a,O
foreign,O
partnership,O
or,O
a,O
foreign,O
trust,O
",",O
you,O
should,O
consult,O
your,O
own,O
tax,O
advisor,O
regarding,O
your,O
status,O
under,O
these,O
Treasury,I-LEGISLATION/ACT
regulations,I-LEGISLATION/ACT
and,O
the,O
certification,O
requirements,O
applicable,O
to,O
you,O
.,O
,O
If,O
you,O
can,O
not,O
satisfy,O
the,O
requirements,O
of,O
the,O
portfolio,O
interest,O
exception,O
described,O
above,O
",",O
payments,O
of,O
interest,O
made,O
to,O
you,O
will,O
be,O
subject,O
to,O
30,O
%,O
United,I-LOCATION
States,I-LOCATION
federal,O
withholding,O
tax,O
unless,O
you,O
provide,O
us,O
or,O
our,O
paying,O
agent,O
with,O
a,O
properly,O
executed,O
(,O
1,O
),O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
Form,B-MISCELLANEOUS
W-8ECI,I-MISCELLANEOUS
(,O
or,O
other,O
applicable,O
form,O
),O
stating,O
that,O
interest,O
paid,O
on,O
your,O
Series,O
B,O
notes,O
is,O
not,O
subject,O
to,O
withholding,O
tax,O
because,O
it,O
is,O
effectively,O
connected,O
with,O
your,O
conduct,O
of,O
a,O
trade,O
or,O
business,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
or,O
(,O
2,O
),O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
Form,B-MISCELLANEOUS
W-8BEN,I-MISCELLANEOUS
(,O
or,O
other,O
applicable,O
form,O
),O
claiming,O
an,O
exemption,O
from,O
or,O
reduction,O
in,O
this,O
withholding,O
tax,O
under,O
an,O
applicable,O
income,O
tax,O
treaty,O
.,O
,O
Except,O
for,O
the,O
possible,O
application,O
of,O
United,I-LOCATION
States,I-LOCATION
federal,O
withholding,O
tax,O
(,O
see,O
Non-U.S.,I-MISCELLANEOUS
Holders,O
United,I-LOCATION
States,I-LOCATION
Federal,O
Withholding,O
Tax,O
above,O
),O
and,O
backup,O
withholding,O
tax,O
(,O
see,O
Non-U.S.,I-MISCELLANEOUS
Holders,O
Backup,O
Withholding,O
and,O
Information,O
Reporting,O
below,O
),O
",",O
you,O
generally,O
will,O
not,O
have,O
to,O
pay,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
on,O
payments,O
of,O
principal,O
of,O
and,O
interest,O
on,O
your,O
Series,O
B,O
notes,O
",",O
or,O
on,O
any,O
gain,O
or,O
accrued,O
interest,O
realized,O
from,O
the,O
sale,O
",",O
redemption,O
",",O
retirement,O
at,O
maturity,O
or,O
other,O
disposition,O
of,O
your,O
Series,O
B,O
notes,O
unless,O
:,O
,O
If,O
you,O
are,O
engaged,O
in,O
a,O
trade,O
or,O
business,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
and,O
interest,O
or,O
gain,O
in,O
respect,O
of,O
your,O
Series,O
B,O
notes,O
is,O
effectively,O
connected,O
with,O
the,O
conduct,O
of,O
your,O
trade,O
or,O
business,O
and,O
",",O
if,O
an,O
income,O
tax,O
treaty,O
applies,O
",",O
you,O
maintain,O
a,O
United,I-LOCATION
States,I-LOCATION
permanent,O
establishment,O
to,O
which,O
the,O
interest,O
or,O
gain,O
is,O
generally,O
attributable,O
",",O
you,O
may,O
be,O
subject,O
to,O
United,I-LOCATION
States,I-LOCATION
income,O
tax,O
on,O
a,O
net,O
basis,O
on,O
the,O
interest,O
or,O
gain,O
(,O
although,O
interest,O
is,O
exempt,O
from,O
the,O
withholding,O
tax,O
discussed,O
in,O
the,O
preceding,O
paragraphs,O
provided,O
that,O
you,O
provide,O
a,O
properly,O
executed,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
Form,B-MISCELLANEOUS
W-8ECI,I-MISCELLANEOUS
(,O
or,O
other,O
applicable,O
form,O
),O
on,O
or,O
before,O
any,O
payment,O
date,O
to,O
claim,O
the,O
exemption,O
),O
.,O
,O
In,O
addition,O
",",O
if,O
you,O
are,O
a,O
foreign,O
corporation,O
",",O
you,O
may,O
be,O
subject,O
to,O
a,O
branch,O
profits,O
tax,O
equal,O
to,O
30,O
%,O
of,O
your,O
effectively,O
connected,O
earnings,O
and,O
profits,O
for,O
the,O
taxable,O
year,O
",",O
as,O
adjusted,O
for,O
certain,O
items,O
",",O
unless,O
a,O
lower,O
rate,O
applies,O
to,O
you,O
under,O
a,O
United,I-LOCATION
States,I-LOCATION
income,O
tax,O
treaty,O
with,O
your,O
country,O
of,O
residence,O
.,O
,O
For,O
this,O
purpose,O
",",O
you,O
must,O
include,O
interest,O
or,O
gain,O
on,O
your,O
Series,O
B,O
notes,O
in,O
the,O
earnings,O
and,O
profits,O
subject,O
to,O
the,O
branch,O
profits,O
tax,O
if,O
these,O
amounts,O
are,O
effectively,O
connected,O
with,O
the,O
conduct,O
of,O
your,O
United,I-LOCATION
States,I-LOCATION
trade,O
or,O
business,O
.,O
,O
If,O
you,O
are,O
an,O
individual,O
and,O
are,O
not,O
a,O
United,I-LOCATION
States,I-LOCATION
citizen,O
or,O
a,O
resident,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
(,O
as,O
specially,O
defined,O
for,O
United,I-LOCATION
States,I-LOCATION
federal,O
estate,O
tax,O
purposes,O
),O
at,O
the,O
time,O
of,O
your,O
death,O
",",O
your,O
Series,O
B,O
notes,O
will,O
generally,O
not,O
be,O
subject,O
to,O
the,O
United,I-LOCATION
States,I-LOCATION
federal,O
estate,O
tax,O
",",O
unless,O
",",O
at,O
the,O
time,O
of,O
your,O
death,O
:,O
,O
Under,O
current,O
Treasury,I-LEGISLATION/ACT
regulations,I-LEGISLATION/ACT
",",O
backup,O
withholding,O
and,O
information,O
reporting,O
will,O
not,O
apply,O
to,O
payments,O
made,O
by,O
us,O
or,O
our,O
paying,O
agent,O
(,O
in,O
its,O
capacity,O
as,O
such,O
),O
to,O
you,O
if,O
you,O
have,O
provided,O
the,O
required,O
certification,O
that,O
you,O
are,O
a,O
non-U.S.,I-MISCELLANEOUS
holder,O
as,O
described,O
in,O
Non-U.S.,I-MISCELLANEOUS
Holders,O
United,I-LOCATION
States,I-LOCATION
Federal,O
Withholding,O
Tax,O
above,O
",",O
and,O
provided,O
that,O
neither,O
we,O
nor,O
our,O
paying,O
agent,O
has,O
actual,O
knowledge,O
that,O
you,O
are,O
a,O
United,I-LOCATION
States,I-LOCATION
holder,O
(,O
as,O
described,O
in,O
—United,I-LOCATION
States,I-LOCATION
Holders,O
above,O
),O
.,O
,O
We,O
or,O
our,O
paying,O
agent,O
may,O
",",O
however,O
",",O
report,O
payments,O
of,O
interest,O
on,O
Series,O
B,O
the,O
notes,O
.,O
,O
The,O
gross,O
proceeds,O
from,O
the,O
disposition,O
of,O
your,O
Series,O
B,O
notes,O
may,O
be,O
subject,O
to,O
information,O
reporting,O
and,O
backup,O
withholding,O
tax,O
at,O
a,O
rate,O
of,O
28,O
%,O
(,O
which,O
rate,O
will,O
increase,O
to,O
31,O
%,O
for,O
taxable,O
years,O
beginning,O
on,O
or,O
after,O
January,O
1,O
",",O
2011,O
),O
.,O
,O
If,O
you,O
sell,O
your,O
Series,O
B,O
notes,O
outside,O
the,O
United,I-LOCATION
States,I-LOCATION
through,O
a,O
non-U.S.,I-MISCELLANEOUS
office,O
of,O
a,O
non-U.S.,I-MISCELLANEOUS
broker,O
and,O
the,O
sales,O
proceeds,O
are,O
paid,O
to,O
you,O
outside,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
then,O
the,O
U.S.,I-LOCATION
backup,O
withholding,O
and,O
information,O
reporting,O
requirements,O
generally,O
will,O
not,O
apply,O
to,O
that,O
payment,O
.,O
,O
information,O
reporting,O
",",O
but,O
not,O
backup,O
withholding,O
",",O
will,O
apply,O
to,O
a,O
payment,O
of,O
sales,O
proceeds,O
",",O
even,O
if,O
that,O
payment,O
is,O
made,O
outside,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
if,O
you,O
sell,O
your,O
Series,O
B,O
notes,O
through,O
a,O
non-U.S.,I-MISCELLANEOUS
office,O
of,O
a,O
broker,O
that,O
:,O
,O
unless,O
the,O
broker,O
has,O
documentary,O
evidence,O
in,O
its,O
files,O
that,O
you,O
are,O
a,O
non-U.S.,I-MISCELLANEOUS
person,O
and,O
certain,O
other,O
conditions,O
are,O
met,O
or,O
you,O
otherwise,O
establish,O
an,O
exemption,O
.,O
,O
If,O
you,O
receive,O
payments,O
of,O
the,O
proceeds,O
of,O
a,O
sale,O
of,O
your,O
Series,O
B,O
notes,O
to,O
or,O
through,O
a,O
U.S.,I-LOCATION
office,O
of,O
a,O
broker,O
",",O
the,O
payment,O
is,O
subject,O
to,O
both,O
U.S.,I-LOCATION
backup,O
withholding,O
and,O
information,O
reporting,O
unless,O
you,O
provide,O
an,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
Form,B-MISCELLANEOUS
W-8BEN,I-MISCELLANEOUS
certifying,O
that,O
you,O
are,O
a,O
non-U.S.,I-MISCELLANEOUS
person,O
or,O
you,O
otherwise,O
establish,O
an,O
exemption,O
.,O
,O
The,O
backup,O
withholding,O
tax,O
is,O
not,O
an,O
additional,O
tax,O
and,O
any,O
amounts,O
withheld,O
under,O
the,O
backup,O
withholding,O
rules,O
from,O
a,O
payment,O
to,O
you,O
may,O
be,O
credited,O
against,O
your,O
United,I-LOCATION
States,I-LOCATION
federal,O
income,O
tax,O
liability,O
or,O
may,O
entitle,O
you,O
to,O
a,O
refund,O
",",O
provided,O
that,O
the,O
required,O
information,O
is,O
timely,O
furnished,O
to,O
the,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
.,O
,O
You,O
should,O
consult,O
your,O
own,O
tax,O
advisor,O
regarding,O
application,O
of,O
backup,O
withholding,O
in,O
your,O
particular,O
circumstance,O
and,O
the,O
availability,O
of,O
and,O
procedure,O
for,O
obtaining,O
an,O
exemption,O
from,O
backup,O
withholding,O
under,O
current,O
Treasury,I-LEGISLATION/ACT
regulations,I-LEGISLATION/ACT
.,O
,O
Recently,O
enacted,O
legislation,O
regarding,O
foreign,O
account,O
tax,O
compliance,O
",",O
effective,O
for,O
payments,O
made,O
after,O
December,O
31,O
",",O
2012,O
",",O
imposes,O
a,O
withholding,O
tax,O
of,O
30,O
%,O
on,O
interest,O
and,O
gross,O
proceeds,O
from,O
the,O
disposition,O
of,O
certain,O
debt,O
instruments,O
paid,O
to,O
certain,O
foreign,O
entities,O
unless,O
various,O
information,O
reporting,O
and,O
certain,O
other,O
requirements,O
are,O
satisfied,O
.,O
,O
You,O
are,O
encouraged,O
to,O
consult,O
your,O
own,O
tax,O
advisors,O
regarding,O
the,O
possible,O
implications,O
of,O
this,O
new,O
legislation,O
on,O
your,O
investment,O
in,O
the,O
Series,O
B,O
notes,O
.,O
,O
Each,O
broker-dealer,O
that,O
receives,O
Series,O
B,O
notes,O
for,O
its,O
own,O
account,O
for,O
Series,O
A,O
notes,O
pursuant,O
to,O
this,O
exchange,O
offer,O
must,O
acknowledge,O
that,O
it,O
will,O
deliver,O
a,O
prospectus,O
in,O
connection,O
with,O
any,O
resale,O
of,O
Series,O
B,O
notes,O
.,O
,O
This,O
prospectus,O
",",O
as,O
it,O
may,O
be,O
amended,O
or,O
supplemented,O
from,O
time,O
to,O
time,O
",",O
may,O
be,O
used,O
by,O
a,O
broker-dealer,O
in,O
connection,O
with,O
resales,O
of,O
Series,O
B,O
notes,O
received,O
in,O
exchange,O
for,O
Series,O
A,O
notes,O
where,O
the,O
Series,O
A,O
notes,O
were,O
acquired,O
as,O
a,O
result,O
of,O
market-making,O
activities,O
or,O
other,O
trading,O
activities,O
.,O
,O
We,O
will,O
allow,O
broker-dealers,O
and,O
other,O
persons,O
",",O
if,O
any,O
",",O
subject,O
to,O
prospectus,O
delivery,O
requirements,O
to,O
use,O
this,O
prospectus,O
",",O
as,O
amended,O
or,O
supplemented,O
",",O
in,O
connection,O
with,O
any,O
such,O
resales,O
subject,O
to,O
limitations,O
set,O
forth,O
in,O
the,O
Registration,O
Rights,O
Agreement,O
.,O
,O
Any,O
broker-dealers,O
required,O
to,O
use,O
this,O
prospectus,O
and,O
any,O
amendments,O
or,O
supplements,O
to,O
this,O
prospectus,O
for,O
resales,O
of,O
the,O
Series,O
B,O
notes,O
must,O
notify,O
us,O
of,O
this,O
fact,O
by,O
checking,O
the,O
box,O
on,O
the,O
letter,O
of,O
transmittal,O
requesting,O
additional,O
copies,O
of,O
these,O
documents,O
.,O
,O
In,O
addition,O
",",O
we,O
agreed,O
for,O
a,O
period,O
of,O
90,O
days,O
from,O
March,O
12,O
",",O
2010,O
",",O
the,O
date,O
of,O
the,O
offering,O
memorandum,O
distributed,O
in,O
connection,O
with,O
the,O
sale,O
of,O
the,O
Series,O
A,O
notes,O
",",O
not,O
to,O
directly,O
or,O
indirectly,O
offer,O
",",O
sell,O
",",O
grant,O
any,O
options,O
to,O
purchase,O
or,O
otherwise,O
dispose,O
of,O
any,O
debt,O
securities,O
or,O
any,O
securities,O
convertible,O
into,O
or,O
exchangeable,O
for,O
any,O
debt,O
securities,O
other,O
than,O
in,O
connection,O
with,O
this,O
exchange,O
offer,O
.,O
,O
We,O
will,O
not,O
receive,O
any,O
proceeds,O
from,O
any,O
sale,O
of,O
Series,O
B,O
notes,O
by,O
broker-dealers,O
.,O
,O
Series,O
B,O
notes,O
received,O
by,O
broker-dealers,O
for,O
their,O
own,O
account,O
pursuant,O
to,O
this,O
exchange,O
offer,O
may,O
be,O
sold,O
from,O
time,O
to,O
time,O
in,O
one,O
or,O
more,O
transactions,O
in,O
the,O
over-the-counter,O
market,O
",",O
in,O
negotiated,O
transactions,O
",",O
through,O
the,O
writing,O
of,O
options,O
on,O
the,O
Series,O
B,O
notes,O
or,O
a,O
combination,O
of,O
these,O
methods,O
of,O
resale,O
",",O
at,O
market,O
prices,O
prevailing,O
at,O
the,O
time,O
of,O
resale,O
",",O
at,O
prices,O
related,O
to,O
prevailing,O
market,O
prices,O
or,O
at,O
negotiated,O
prices,O
.,O
,O
Any,O
resale,O
may,O
be,O
made,O
directly,O
to,O
purchasers,O
or,O
to,O
or,O
through,O
broker,O
or,O
dealers,O
who,O
receive,O
compensation,O
in,O
the,O
form,O
of,O
commissions,O
or,O
concessions,O
from,O
a,O
broker-dealer,O
and/or,O
the,O
purchasers,O
of,O
Series,O
B,O
notes,O
.,O
,O
Any,O
broker-dealer,O
that,O
resells,O
Series,O
B,O
notes,O
that,O
were,O
received,O
by,O
it,O
for,O
its,O
own,O
account,O
pursuant,O
to,O
this,O
exchange,O
offer,O
and,O
any,O
broker,O
or,O
dealer,O
that,O
participates,O
in,O
a,O
distribution,O
of,O
the,O
Series,O
B,O
notes,O
may,O
be,O
deemed,O
to,O
be,O
an,O
underwriter,O
within,O
the,O
meaning,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
and,O
any,O
profit,O
on,O
any,O
such,O
resale,O
of,O
Series,O
B,O
notes,O
and,O
any,O
commissions,O
or,O
concessions,O
received,O
by,O
any,O
such,O
persons,O
may,O
be,O
deemed,O
to,O
be,O
underwriting,O
compensation,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
The,O
letter,O
of,O
transmittal,O
states,O
that,O
by,O
acknowledging,O
that,O
it,O
will,O
deliver,O
and,O
by,O
delivering,O
a,O
prospectus,O
",",O
a,O
broker-dealer,O
will,O
not,O
be,O
deemed,O
to,O
admit,O
that,O
it,O
is,O
an,O
underwriter,O
within,O
the,O
meaning,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
We,O
have,O
agreed,O
to,O
pay,O
all,O
expenses,O
incidental,O
to,O
the,O
exchange,O
offer,O
other,O
than,O
commissions,O
and,O
concessions,O
of,O
any,O
broker,O
or,O
dealer,O
and,O
will,O
indemnify,O
holders,O
of,O
the,O
Series,O
B,O
notes,O
",",O
including,O
broker-dealers,O
",",O
against,O
certain,O
liabilities,O
",",O
including,O
liabilities,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
The,O
validity,O
of,O
the,O
securities,O
issuable,O
under,O
this,O
prospectus,O
will,O
be,O
passed,O
upon,O
for,O
Sonic,I-BUSINESS
by,O
Moore,I-BUSINESS
&,I-BUSINESS
Van,I-BUSINESS
Allen,I-BUSINESS
PLLC,I-BUSINESS
",",O
Charlotte,I-LOCATION
",",O
North,I-LOCATION
Carolina,I-LOCATION
.,O
,O
The,O
consolidated,O
financial,O
statements,O
of,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
as,O
of,O
and,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
and,O
2008,O
appearing,O
in,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
s,O
Annual,O
Report,O
(,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
),O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
",",O
and,O
the,O
effectiveness,O
of,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
s,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
of,O
December,O
31,O
",",O
2009,O
",",O
have,O
been,O
audited,O
by,O
Ernst,I-BUSINESS
&,I-BUSINESS
Young,I-BUSINESS
LLP,I-BUSINESS
",",O
independent,O
registered,O
public,O
accounting,O
firm,O
",",O
as,O
set,O
forth,O
in,O
their,O
reports,O
thereon,O
",",O
included,O
therein,O
",",O
and,O
incorporated,O
herein,O
by,O
reference,O
.,O
,O
Such,O
consolidated,O
financial,O
statements,O
are,O
incorporated,O
herein,O
by,O
reference,O
in,O
reliance,O
upon,O
such,O
reports,O
given,O
on,O
the,O
authority,O
of,O
such,O
firm,O
as,O
experts,O
in,O
accounting,O
and,O
auditing,O
.,O
,O
The,O
consolidated,O
statements,O
of,O
income,O
",",O
stockholders,O
equity,O
and,O
cash,O
flows,O
of,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
subsidiaries,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2007,O
",",O
incorporated,O
by,O
reference,O
in,O
this,O
prospectus,O
have,O
been,O
audited,O
by,O
Deloitte,I-BUSINESS
&,I-BUSINESS
Touche,I-BUSINESS
LLP,I-BUSINESS
",",O
an,O
independent,O
registered,O
public,O
accounting,O
firm,O
",",O
as,O
stated,O
in,O
their,O
report,O
(,O
which,O
report,O
expresses,O
an,O
unqualified,O
opinion,O
and,O
includes,O
explanatory,O
paragraphs,O
regarding,O
the,O
adoption,O
of,O
the,O
updated,O
provisions,O
of,O
Income,I-LEGISLATION/ACT
Taxes,I-LEGISLATION/ACT
in,I-LEGISLATION/ACT
the,I-LEGISLATION/ACT
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Codification,I-LEGISLATION/ACT
(,O
ASC,I-LEGISLATION/ACT
),O
as,O
of,O
January,O
1,O
",",O
2007,O
",",O
the,O
adoption,O
of,O
the,O
updated,O
provisions,O
of,O
Debt,I-MISCELLANEOUS
with,I-MISCELLANEOUS
Conversion,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Other,I-MISCELLANEOUS
Options,I-MISCELLANEOUS
in,O
the,O
ASC,I-LEGISLATION/ACT
and,O
for,O
the,O
adoption,O
of,O
the,O
updated,O
provisions,O
of,O
Earnings,I-MISCELLANEOUS
Per,I-MISCELLANEOUS
Share,I-MISCELLANEOUS
in,O
the,O
ASC,I-LEGISLATION/ACT
),O
appearing,O
in,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
s,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
.,O
,O
Such,O
consolidated,O
statements,O
of,O
income,O
",",O
stockholders,O
equity,O
and,O
cash,O
flows,O
have,O
been,O
so,O
incorporated,O
in,O
reliance,O
upon,O
the,O
report,O
of,O
such,O
firm,O
given,O
upon,O
their,O
authority,O
as,O
experts,O
in,O
accounting,O
and,O
auditing,O
.,O
,O
We,O
file,O
annual,O
",",O
quarterly,O
and,O
current,O
reports,O
",",O
proxy,O
statements,O
and,O
other,O
information,O
with,O
the,O
SEC,I-GOVERNMENT
(,O
File,O
No.,O
You,O
may,O
read,O
and,O
copy,O
these,O
reports,O
",",O
proxy,O
statements,O
and,O
other,O
information,O
at,O
the,O
SEC,I-GOVERNMENT
s,O
Public,O
Reference,O
Room,O
at,O
100,O
F,I-LOCATION
Street,I-LOCATION
",",O
N.E.,I-LOCATION
",",O
Washington,I-LOCATION
",",I-LOCATION
D.C,I-LOCATION
.,I-LOCATION
,O
You,O
may,O
obtain,O
information,O
on,O
the,O
operation,O
of,O
the,O
SEC,I-GOVERNMENT
s,O
Public,O
Reference,O
Room,O
by,O
calling,O
the,O
SEC,I-GOVERNMENT
at,O
l-800-SEC-0330,O
.,O
,O
Copies,O
may,O
be,O
obtained,O
from,O
the,O
SEC,I-GOVERNMENT
by,O
paying,O
the,O
required,O
fees,O
.,O
,O
The,O
SEC,I-GOVERNMENT
maintains,O
an,O
internet,I-MISCELLANEOUS
website,O
that,O
contains,O
reports,O
",",O
proxy,O
and,O
information,O
statements,O
and,O
other,O
information,O
regarding,O
us,O
and,O
other,O
issuers,O
that,O
file,O
electronically,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
The,O
SEC,I-GOVERNMENT
s,O
website,O
is,O
http,O
:,O
//www.sec.gov,O
.,O
,O
Information,O
that,O
we,O
file,O
with,O
the,O
SEC,I-GOVERNMENT
may,O
also,O
be,O
read,O
and,O
copied,O
at,O
the,O
offices,O
of,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
at,O
20,O
Broad,I-LOCATION
Street,I-LOCATION
",",O
New,I-LOCATION
York,I-LOCATION
",",O
New,O
York,O
10005,O
.,O
,O
In,O
addition,O
",",O
you,O
may,O
access,O
all,O
of,O
such,O
filings,O
on,O
our,O
website,O
at,O
http,O
:,O
//www.sonicautomotive.com,O
.,O
,O
The,O
information,O
set,O
forth,O
on,O
our,O
website,O
is,O
not,O
part,O
of,O
this,O
prospectus,O
.,O
,O
This,O
prospectus,O
incorporates,O
by,O
reference,O
information,O
we,O
file,O
with,O
the,O
SEC,I-GOVERNMENT
",",O
which,O
means,O
that,O
we,O
can,O
disclose,O
important,O
information,O
to,O
you,O
by,O
referring,O
to,O
documents,O
we,O
have,O
previously,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
without,O
including,O
such,O
information,O
in,O
this,O
prospectus,O
.,O
,O
The,O
information,O
incorporated,O
by,O
reference,O
is,O
considered,O
to,O
be,O
part,O
of,O
this,O
prospectus,O
",",O
and,O
information,O
that,O
we,O
file,O
later,O
with,O
the,O
SEC,I-GOVERNMENT
will,O
automatically,O
update,O
and,O
supersede,O
this,O
information,O
.,O
,O
We,O
incorporate,O
by,O
reference,O
the,O
documents,O
listed,O
below,O
and,O
any,O
future,O
documents,O
we,O
file,O
with,O
the,O
SEC,I-GOVERNMENT
under,O
Sections,O
13,O
(,O
a,O
),O
",",O
13,O
(,O
c,O
),O
",",O
14,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
until,O
we,O
terminate,O
this,O
offering,O
:,O
,O
(,O
1,O
),O
Our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
fiscal,O
year,O
ended,O
December,O
31,O
",",O
2009,O
;,O
,O
(,O
3,O
),O
Our,O
Current,O
Reports,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filed,O
on,O
January,O
22,O
",",O
2010,O
",",O
February,O
26,O
",",O
2010,O
and,O
March,O
15,O
",",O
2010,O
*,O
.,O
,O
We,O
will,O
provide,O
upon,O
request,O
a,O
free,O
copy,O
of,O
any,O
or,O
all,O
of,O
the,O
documents,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
(,O
excluding,O
exhibits,O
to,O
such,O
documents,O
unless,O
such,O
exhibits,O
are,O
specifically,O
incorporated,O
by,O
reference,O
),O
.,O
,O
Written,O
or,O
telephone,O
requests,O
should,O
be,O
directed,O
to,O
Mr.,O
,O
All,O
certificates,O
for,O
Series,O
A,O
notes,O
being,O
tendered,O
",",O
executed,O
Letters,O
of,O
Transmittal,O
and,O
any,O
other,O
required,O
documents,O
should,O
be,O
sent,O
to,O
the,O
Exchange,O
Agent,O
at,O
the,O
address,O
below,O
.,O
,O
All,O
questions,O
and,O
requests,O
for,O
assistance,O
and,O
requests,O
for,O
additional,O
copies,O
of,O
the,O
prospectus,O
",",O
the,O
Letter,O
of,O
Transmittal,O
and,O
any,O
other,O
required,O
documents,O
should,O
be,O
directed,O
to,O
the,O
Exchange,O
Agent,O
.,O
,O
Sonic,I-BUSINESS
s,O
Bylaws,O
effectively,O
provide,O
that,O
Sonic,O
shall,O
",",O
to,O
the,O
full,O
extent,O
permitted,O
by,O
Section,O
145,O
of,O
the,O
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
the,I-LEGISLATION/ACT
State,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Delaware,I-LEGISLATION/ACT
",",O
as,O
amended,O
from,O
time,O
to,O
time,O
(,O
Section,O
145,O
),O
",",O
indemnify,O
all,O
persons,O
whom,O
it,O
may,O
indemnify,O
pursuant,O
thereto,O
.,O
,O
In,O
addition,O
",",O
Sonic,I-BUSINESS
s,O
Certificate,O
of,O
Incorporation,O
eliminates,O
personal,O
liability,O
of,O
its,O
directors,O
to,O
the,O
full,O
extent,O
permitted,O
by,O
Section,O
102,O
(,O
b,O
),O
(,O
7,O
),O
of,O
the,O
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
the,I-LEGISLATION/ACT
State,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Delaware,I-LEGISLATION/ACT
",",O
as,O
amended,O
from,O
time,O
to,O
time,O
(,O
Section,O
102,O
(,O
b,O
),O
(,O
7,O
),O
),O
.,O
,O
Section,O
145,O
permits,O
a,O
corporation,O
to,O
indemnify,O
its,O
directors,O
and,O
officers,O
against,O
expenses,O
(,O
including,O
attorney,O
s,O
fees,O
),O
",",O
judgments,O
",",O
fines,O
and,O
amounts,O
paid,O
in,O
settlements,O
actually,O
and,O
reasonably,O
incurred,O
by,O
them,O
in,O
connection,O
with,O
any,O
action,O
",",O
suit,O
or,O
proceeding,O
brought,O
by,O
a,O
third,O
party,O
if,O
such,O
directors,O
or,O
officers,O
acted,O
in,O
good,O
faith,O
and,O
in,O
a,O
manner,O
they,O
reasonably,O
believed,O
to,O
be,O
in,O
or,O
not,O
opposed,O
to,O
the,O
best,O
interests,O
of,O
the,O
corporation,O
and,O
",",O
with,O
respect,O
to,O
any,O
criminal,O
action,O
or,O
proceeding,O
",",O
had,O
no,O
reason,O
to,O
believe,O
their,O
conduct,O
was,O
unlawful,O
.,O
,O
In,O
a,O
derivative,O
action,O
",",O
indemnification,O
may,O
be,O
made,O
only,O
for,O
expenses,O
actually,O
and,O
reasonably,O
incurred,O
by,O
directors,O
and,O
officers,O
in,O
connection,O
with,O
the,O
defense,O
or,O
settlement,O
of,O
an,O
action,O
or,O
suit,O
and,O
only,O
with,O
respect,O
to,O
a,O
matter,O
as,O
to,O
which,O
they,O
shall,O
have,O
acted,O
in,O
good,O
faith,O
and,O
in,O
a,O
manner,O
they,O
reasonably,O
believed,O
to,O
be,O
in,O
or,O
not,O
opposed,O
to,O
the,O
best,O
interests,O
of,O
the,O
corporation,O
",",O
except,O
that,O
no,O
indemnification,O
shall,O
be,O
made,O
if,O
such,O
person,O
shall,O
have,O
been,O
adjudged,O
liable,O
to,O
the,O
corporation,O
",",O
unless,O
and,O
only,O
to,O
the,O
extent,O
that,O
the,O
court,O
in,O
which,O
the,O
action,O
or,O
suit,O
was,O
brought,O
shall,O
determine,O
upon,O
application,O
that,O
the,O
defendant,O
officers,O
or,O
directors,O
are,O
reasonably,O
entitled,O
to,O
indemnity,O
for,O
such,O
expenses,O
despite,O
such,O
adjudication,O
of,O
liability,O
.,O
,O
Section,O
102,O
(,O
b,O
),O
(,O
7,O
),O
provides,O
that,O
a,O
corporation,O
may,O
eliminate,O
or,O
limit,O
the,O
personal,O
liability,O
of,O
a,O
director,O
to,O
the,O
corporation,O
or,O
its,O
stockholders,O
for,O
monetary,O
damages,O
for,O
breach,O
of,O
fiduciary,O
duty,O
as,O
a,O
director,O
",",O
provided,O
that,O
such,O
provision,O
shall,O
not,O
eliminate,O
or,O
limit,O
the,O
liability,O
of,O
a,O
director,O
(,O
i,O
),O
for,O
any,O
breach,O
of,O
the,O
director,O
s,O
duty,O
of,O
loyalty,O
to,O
the,O
corporation,O
or,O
its,O
stockholders,O
",",O
(,O
ii,O
),O
for,O
acts,O
or,O
omissions,O
not,O
in,O
good,O
faith,O
or,O
which,O
involve,O
intentional,O
misconduct,O
or,O
a,O
knowing,O
violation,O
of,O
law,O
",",O
(,O
iii,O
),O
for,O
willful,O
or,O
negligent,O
conduct,O
in,O
paying,O
dividends,O
or,O
repurchasing,O
stock,O
out,O
of,O
other,O
than,O
lawfully,O
available,O
funds,O
or,O
(,O
iv,O
),O
for,O
any,O
transaction,O
from,O
which,O
the,O
director,O
derived,O
an,O
improper,O
personal,O
benefit,O
.,O
,O
No,O
such,O
provision,O
shall,O
eliminate,O
or,O
limit,O
the,O
liability,O
of,O
a,O
director,O
for,O
any,O
act,O
or,O
omission,O
occurring,O
prior,O
to,O
the,O
date,O
when,O
such,O
provision,O
becomes,O
effective,O
.,O
,O
Sonic,O
maintains,O
insurance,O
against,O
liabilities,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
for,O
the,O
benefit,O
of,O
its,O
officers,O
and,O
directors,O
.,O
,O
Insofar,O
as,O
indemnification,O
for,O
liabilities,O
arising,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
may,O
be,O
permitted,O
to,O
directors,O
",",O
officers,O
or,O
persons,O
controlling,O
the,O
registrant,O
pursuant,O
to,O
the,O
foregoing,O
provisions,O
",",O
the,O
registrant,O
has,O
been,O
informed,O
that,O
in,O
the,O
opinion,O
of,O
the,O
SEC,I-GOVERNMENT
such,O
indemnification,O
is,O
against,O
public,O
policy,O
as,O
expressed,O
in,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
is,O
therefore,O
unenforceable,O
.,O
,O
The,O
following,O
documents,O
are,O
filed,O
as,O
exhibits,O
to,O
this,O
Registration,O
Statement,O
",",O
including,O
those,O
exhibits,O
incorporated,O
herein,O
by,O
reference,O
to,O
a,O
prior,O
filing,O
of,O
Sonic,I-BUSINESS
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
or,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
as,O
indicated,O
in,O
parenthesis,O
:,O
,O
Each,O
of,O
the,O
undersigned,O
registrants,O
hereby,O
undertakes,O
:,O
,O
Insofar,O
as,O
indemnification,O
for,O
liabilities,O
arising,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
may,O
be,O
permitted,O
to,O
directors,O
",",O
officers,O
and,O
controlling,O
persons,O
of,O
the,O
registrants,O
pursuant,O
to,O
the,O
foregoing,O
provisions,O
",",O
or,O
otherwise,O
",",O
the,O
registrants,O
have,O
been,O
advised,O
that,O
in,O
the,O
opinion,O
of,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
such,O
indemnification,O
is,O
against,O
public,O
policy,O
as,O
expressed,O
in,O
the,O
Act,O
and,O
is,O
",",O
therefore,O
",",O
unenforceable,O
.,O
,O
incurred,O
or,O
paid,O
by,O
a,O
director,O
",",O
officer,O
or,O
controlling,O
person,O
of,O
the,O
registrant,O
in,O
the,O
successful,O
defense,O
of,O
any,O
action,O
",",O
suit,O
or,O
proceeding,O
),O
is,O
asserted,O
by,O
such,O
director,O
",",O
officer,O
or,O
controlling,O
person,O
in,O
connection,O
with,O
the,O
securities,O
being,O
registered,O
",",O
the,O
registrants,O
will,O
",",O
unless,O
in,O
the,O
opinion,O
of,O
their,O
counsel,O
the,O
matter,O
has,O
been,O
settled,O
by,O
controlling,O
precedent,O
",",O
submit,O
to,O
a,O
court,O
of,O
appropriate,O
jurisdiction,O
the,O
question,O
of,O
whether,O
such,O
indemnification,O
by,O
them,O
is,O
against,O
public,O
policy,O
as,O
expressed,O
in,O
the,O
Act,O
and,O
will,O
be,O
governed,O
by,O
the,O
final,O
adjudication,O
of,O
such,O
issue,O
.,O
,O
The,O
undersigned,O
registrants,O
hereby,O
undertake,O
to,O
respond,O
to,O
requests,O
for,O
information,O
that,O
is,O
incorporated,O
by,O
reference,O
into,O
this,O
prospectus,O
pursuant,O
to,O
Item,O
4,O
",",O
10,O
(,O
b,O
),O
",",O
11,O
",",O
or,O
13,O
of,O
this,O
form,O
",",O
within,O
one,O
business,O
day,O
of,O
receipt,O
of,O
such,O
request,O
",",O
and,O
to,O
send,O
the,O
incorporated,O
documents,O
by,O
first,O
class,O
mail,O
or,O
other,O
equally,O
prompt,O
means,O
.,O
,O
This,O
includes,O
information,O
contained,O
in,O
documents,O
filed,O
subsequent,O
to,O
the,O
effective,O
date,O
of,O
the,O
registration,O
statement,O
through,O
the,O
date,O
of,O
responding,O
to,O
the,O
request,O
.,O
,O
The,O
undersigned,O
registrants,O
hereby,O
undertake,O
to,O
supply,O
by,O
means,O
of,O
a,O
post-effective,O
amendment,O
all,O
information,O
concerning,O
a,O
transaction,O
",",O
and,O
the,O
company,O
being,O
acquired,O
involved,O
therein,O
",",O
that,O
was,O
not,O
the,O
subject,O
of,O
and,O
included,O
in,O
the,O
registration,O
statement,O
when,O
it,O
became,O
effective,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
SONIC,I-BUSINESS
AUTOMOTIVE,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
Each,O
of,O
the,O
undersigned,O
directors,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrant,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
Chairman,O
",",O
Chief,O
Executive,O
Officer,O
and,O
Director,O
(,O
principal,O
executive,O
officer,O
),O
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
Vice,O
Chairman,O
and,O
Chief,O
Financial,O
Officer,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
/s/,O
Robert,I-PERSON
Heller,I-PERSON
H,I-PERSON
.,I-PERSON
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
AVALON,I-BUSINESS
FORD,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
CASA,I-BUSINESS
FORD,I-BUSINESS
OF,I-BUSINESS
HOUSTON,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
AUTO,I-BUSINESS
FACTORY,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
BEVERLY,I-BUSINESS
HILLS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
CAPITOL,I-BUSINESS
F,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
CAPITOL,I-BUSINESS
N,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
CONCORD,I-BUSINESS
H,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
CONCORD,I-BUSINESS
N,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
CONCORD,I-BUSINESS
T,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
DUBLIN,I-BUSINESS
N,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
DUBLIN,I-BUSINESS
VWD,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
HOLDING,I-BUSINESS
CORP.,I-BUSINESS
,O
FAA,I-BUSINESS
MARIN,I-BUSINESS
F,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
MARIN,I-BUSINESS
LR,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
POWAY,I-BUSINESS
G,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
POWAY,I-BUSINESS
H,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
POWAY,I-BUSINESS
T,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
SAN,I-BUSINESS
BRUNO,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
SANTA,I-BUSINESS
MONICA,I-BUSINESS
V,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
SERRAMONTE,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
SERRAMONTE,I-BUSINESS
H,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
SERRAMONTE,I-BUSINESS
L,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
STEVENS,I-BUSINESS
CREEK,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FAA,I-BUSINESS
TORRANCE,I-BUSINESS
CPJ,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FORT,I-BUSINESS
MILL,I-BUSINESS
FORD,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FRANCISCAN,I-BUSINESS
MOTORS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
FRONTIER,I-BUSINESS
OLDSMOBILE-CADILLAC,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
HMC,I-BUSINESS
FINANCE,I-BUSINESS
ALABAMA,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
L,I-BUSINESS
DEALERSHIP,I-BUSINESS
GROUP,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
ROYAL,I-BUSINESS
MOTOR,I-BUSINESS
COMPANY,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
AL,I-BUSINESS
HC1,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
AL,I-BUSINESS
HC2,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
LONG,I-BUSINESS
BEACH,I-BUSINESS
B,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
MD,I-BUSINESS
HC1,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
MONROVIA,I-BUSINESS
B,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
NC,I-BUSINESS
HC2,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
OH,I-BUSINESS
HC1,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
OK,I-BUSINESS
HC1,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
VA,I-BUSINESS
HC1,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SANTA,I-BUSINESS
CLARA,I-BUSINESS
IMPORTED,I-BUSINESS
CARS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
AUTOMOTIVE,I-BUSINESS
1495,I-BUSINESS
AUTOMALL,I-BUSINESS
DRIVE,I-BUSINESS
",",I-BUSINESS
,O
SONIC,I-BUSINESS
AUTOMOTIVE,I-BUSINESS
2424,I-BUSINESS
LAURENS,I-BUSINESS
RD.,I-BUSINESS
",",I-BUSINESS
,O
SONIC,I-BUSINESS
AUTOMOTIVE,I-BUSINESS
2752,I-BUSINESS
LAURENS,I-BUSINESS
RD.,I-BUSINESS
",",I-BUSINESS
,O
SONIC,I-BUSINESS
AUTOMOTIVE,I-BUSINESS
3700,I-BUSINESS
WEST,I-BUSINESS
BROAD,I-BUSINESS
STREET,I-BUSINESS
",",I-BUSINESS
,O
SONIC,I-BUSINESS
AUTOMOTIVE,I-BUSINESS
4000,I-BUSINESS
WEST,I-BUSINESS
BROAD,I-BUSINESS
STREET,I-BUSINESS
",",I-BUSINESS
,O
SONIC,I-BUSINESS
BUENA,I-BUSINESS
PARK,I-BUSINESS
H,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
CALABASAS,I-BUSINESS
A,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
CALABASAS,I-BUSINESS
M,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
CALABASAS,I-BUSINESS
V,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
CAPITOL,I-BUSINESS
IMPORTS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
CARSON,I-BUSINESS
F,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
CARSON,I-BUSINESS
LM,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
COAST,I-BUSINESS
CADILLAC,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
DOWNEY,I-BUSINESS
CADILLAC,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
ESTORE,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
FORT,I-BUSINESS
MILL,I-BUSINESS
CHRYSLER,I-BUSINESS
JEEP,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
FORT,I-BUSINESS
MILL,I-BUSINESS
DODGE,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
FREMONT,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
HARBOR,I-BUSINESS
CITY,I-BUSINESS
H,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
MANHATTAN,I-BUSINESS
FAIRFAX,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
MASSEY,I-BUSINESS
CHEVROLET,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
NEWSOME,I-BUSINESS
CHEVROLET,I-BUSINESS
WORLD,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
NEWSOME,I-BUSINESS
OF,I-BUSINESS
FLORENCE,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
NORTH,I-BUSINESS
CHARLESTON,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
NORTH,I-BUSINESS
CHARLESTON,I-BUSINESS
DODGE,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
RIVERSIDE,I-BUSINESS
AUTO,I-BUSINESS
FACTORY,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
SANTA,I-BUSINESS
MONICA,I-BUSINESS
M,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
SANTA,I-BUSINESS
MONICA,I-BUSINESS
S,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
SATURN,I-BUSINESS
OF,I-BUSINESS
SILICON,I-BUSINESS
VALLEY,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
SERRAMONTE,I-BUSINESS
I,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
STEVENS,I-BUSINESS
CREEK,I-BUSINESS
B,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
TYSONS,I-BUSINESS
CORNER,I-BUSINESS
H,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
TYSONS,I-BUSINESS
CORNER,I-BUSINESS
INFINITI,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
WALNUT,I-BUSINESS
CREEK,I-BUSINESS
M,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
WEST,I-BUSINESS
COVINA,I-BUSINESS
T,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
WILLIAMS,I-BUSINESS
CADILLAC,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
WILSHIRE,I-BUSINESS
CADILLAC,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
STEVENS,I-BUSINESS
CREEK,I-BUSINESS
CADILLAC,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
VILLAGE,I-BUSINESS
IMPORTED,I-BUSINESS
CARS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
Each,O
of,O
the,O
undersigned,O
directors,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrants,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
President,O
and,O
Director,O
(,O
principal,O
executive,O
officer,O
),O
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Director,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
FIRSTAMERICA,I-BUSINESS
AUTOMOTIVE,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
Each,O
of,O
the,O
undersigned,O
directors,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrant,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
Chairman,O
",",O
Chief,O
Executive,O
Officer,O
and,O
Director,O
(,O
principal,O
executive,O
officer,O
),O
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Director,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
MOUNTAIN,I-BUSINESS
STATES,I-BUSINESS
MOTORS,I-BUSINESS
CO.,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
FL,I-BUSINESS
HC1,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
FL,I-BUSINESS
HC2,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
FL,I-BUSINESS
HC3,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
FL,I-BUSINESS
HC4,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
FL,I-BUSINESS
HC5,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
FL,I-BUSINESS
HC6,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SAI,I-BUSINESS
FL,I-BUSINESS
HC7,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
AUTOMOTIVE,I-BUSINESS
1720,I-BUSINESS
MASON,I-BUSINESS
AVE.,I-BUSINESS
",",I-BUSINESS
MABRY,I-BUSINESS
",",I-BUSINESS
FL,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
DENVER,I-BUSINESS
T,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
DENVER,I-BUSINESS
VOLKSWAGEN,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
ENGLEWOOD,I-BUSINESS
M,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
LLOYD,I-BUSINESS
NISSAN,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
LLOYD,I-BUSINESS
PONTIAC,I-BUSINESS
CADILLAC,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
LONE,I-BUSINESS
TREE,I-BUSINESS
CADILLAC,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
MASSEY,I-BUSINESS
PONTIAC,I-BUSINESS
BUICK,I-BUSINESS
GMC,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
SANFORD,I-BUSINESS
CADILLAC,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
SHOTTENKIRK,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
SOUTH,I-BUSINESS
CADILLAC,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
Z,I-BUSINESS
MANAGEMENT,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
Each,O
of,O
the,O
undersigned,O
directors,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrants,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
President,O
and,O
Director,O
(,O
principal,O
executive,O
officer,O
),O
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Director,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
SONIC,I-BUSINESS
AUTOMOTIVE,I-BUSINESS
9103,I-BUSINESS
E.,I-BUSINESS
INDEPENDENCE,I-BUSINESS
",",I-BUSINESS
,O
SONIC,I-BUSINESS
LS,I-BUSINESS
CHEVROLET,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
Each,O
of,O
the,O
undersigned,O
managers,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrants,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
President,O
and,O
Manager,O
(,O
principal,O
executive,O
officer,O
),O
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Manager,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
Each,O
of,O
the,O
undersigned,O
managers,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrants,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys,O
in,O
fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post,O
effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys,O
in,O
fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys,O
in,O
fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
Chief,O
Executive,O
Officer,O
and,O
Manager,O
(,O
principal,O
executive,O
officer,O
),O
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
/s/,O
David,I-PERSON
P,I-PERSON
.,I-PERSON
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Manager,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
FRANK,I-BUSINESS
PARRA,I-BUSINESS
AUTOPLEX,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
MASSEY,I-BUSINESS
CADILLAC,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
MASSEY,I-BUSINESS
CADILLAC,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
AGENCY,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
CAPITOL,I-BUSINESS
CADILLAC,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
OF,I-BUSINESS
TEXAS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
PHILPOTT,I-BUSINESS
MOTORS,I-BUSINESS
",",I-BUSINESS
LTD.,I-BUSINESS
,O
SONIC,I-BUSINESS
ADVANTAGE,I-BUSINESS
PA,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SONIC,I-BUSINESS
AUTOMOTIVE,I-BUSINESS
3401,I-BUSINESS
N.,I-BUSINESS
MAIN,I-BUSINESS
",",I-BUSINESS
TX,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SONIC,I-BUSINESS
AUTOMOTIVE,I-BUSINESS
4701,I-BUSINESS
I,I-BUSINESS
10,I-BUSINESS
EAST,I-BUSINESS
",",I-BUSINESS
TX,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SONIC,I-BUSINESS
AUTOMOTIVE,I-BUSINESS
5221,I-BUSINESS
I,I-BUSINESS
10,I-BUSINESS
EAST,I-BUSINESS
",",I-BUSINESS
TX,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SONIC,I-BUSINESS
AUTOMOTIVE,I-BUSINESS
OF,I-BUSINESS
TEXAS,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
.,I-BUSINESS
,O
SONIC,I-BUSINESS
CADILLAC,I-BUSINESS
D,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SONIC,I-BUSINESS
CAMP,I-BUSINESS
FORD,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SONIC,I-BUSINESS
CARROLLTON,I-BUSINESS
V,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SONIC,I-BUSINESS
FORT,I-BUSINESS
WORTH,I-BUSINESS
T,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SONIC,I-BUSINESS
HOUSTON,I-BUSINESS
LR,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
.,I-BUSINESS
,O
SONIC,I-BUSINESS
HOUSTON,I-BUSINESS
V,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SONIC,I-BUSINESS
LUTE,I-BUSINESS
RILEY,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SONIC,I-BUSINESS
MASSEY,I-BUSINESS
CADILLAC,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SONIC,I-BUSINESS
READING,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SONIC,I-BUSINESS
RICHARDSON,I-BUSINESS
F,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SONIC,I-BUSINESS
SAM,I-BUSINESS
WHITE,I-BUSINESS
NISSAN,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SONIC,I-BUSINESS
UNIVERSITY,I-BUSINESS
PARK,I-BUSINESS
A,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SRE,I-BUSINESS
TEXAS,I-BUSINESS
1,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SRE,I-BUSINESS
TEXAS,I-BUSINESS
2,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SRE,I-BUSINESS
TEXAS,I-BUSINESS
3,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SRE,I-BUSINESS
TEXAS,I-BUSINESS
4,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SRE,I-BUSINESS
TEXAS,I-BUSINESS
5,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SRE,I-BUSINESS
TEXAS,I-BUSINESS
6,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SRE,I-BUSINESS
TEXAS,I-BUSINESS
7,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SRE,I-BUSINESS
TEXAS,I-BUSINESS
8,I-BUSINESS
",",I-BUSINESS
L.P.,I-BUSINESS
,O
SONIC,I-BUSINESS
OKEMOS,I-BUSINESS
IMPORTS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
PLYMOUTH,I-BUSINESS
CADILLAC,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
Each,O
of,O
the,O
undersigned,O
directors,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrants,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-GOVERNMENT
Act,I-GOVERNMENT
of,I-GOVERNMENT
1933,I-GOVERNMENT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
President,O
and,O
Director,O
(,O
principal,O
executive,O
officer,O
),O
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Director,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
FORT,I-BUSINESS
MYERS,I-BUSINESS
COLLISION,I-BUSINESS
CENTER,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
SAI,B-BUSINESS
ORLANDO,I-BUSINESS
CS,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
SONIC,B-BUSINESS
AUTOMOTIVE,I-BUSINESS
1720,I-BUSINESS
MASON,I-BUSINESS
AVE.,I-BUSINESS
",",I-BUSINESS
,O
Each,O
of,O
the,O
undersigned,O
managers,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrants,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
President,O
and,O
Manager,O
(,O
principal,O
executive,O
officer,O
),O
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Manager,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
Each,O
of,O
the,O
undersigned,O
managers,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrants,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
Chief,O
Executive,O
Officer,O
(,O
principal,O
executive,O
officer,O
),O
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Manager,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
FAA,I-BUSINESS
LAS,I-BUSINESS
VEGAS,I-BUSINESS
H,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
SONIC,I-BUSINESS
RESOURCES,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
Each,O
of,O
the,O
undersigned,O
directors,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrants,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
Chairman,O
and,O
Chief,O
Executive,O
Officer,O
(,O
principal,O
executive,O
officer,O
),O
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Director,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
SONIC,I-BUSINESS
AUTOMOTIVE,I-BUSINESS
OF,I-BUSINESS
NEVADA,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
entities,O
as,O
General,O
Partner,O
:,O
,O
Each,O
of,O
the,O
undersigned,O
directors,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrant,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
Chief,O
Executive,O
Officer,O
and,O
Director,O
(,O
principal,O
executive,O
officer,O
),O
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Director,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
Each,O
of,O
the,O
undersigned,O
managers,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrants,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
President,O
(,O
principal,O
executive,O
officer,O
),O
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Manager,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
Each,O
of,O
the,O
undersigned,O
managers,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrant,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
President,O
(,O
principal,O
executive,O
officer,O
),O
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Manager,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
Each,O
of,O
the,O
undersigned,O
managers,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrants,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
Chairman,O
and,O
Chief,O
Executive,O
Officer,O
(,O
principal,O
executive,O
officer,O
),O
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Manager,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
Each,O
of,O
the,O
undersigned,O
managers,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrants,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
President,O
and,O
Manager,O
(,O
principal,O
executive,O
officer,O
),O
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Manager,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
Each,O
of,O
the,O
undersigned,O
governors,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrants,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
President,O
and,O
Governor,O
(,O
principal,O
executive,O
officer,O
),O
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Governor,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
HIGHWAY,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
SONIC,B-BUSINESS
AUTOMOTIVE,I-BUSINESS
OF,I-BUSINESS
CHATTANOOGA,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
SONIC,B-BUSINESS
AUTOMOTIVE,I-BUSINESS
OF,I-BUSINESS
NASHVILLE,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
SONIC,B-BUSINESS
2185,I-BUSINESS
CHAPMAN,I-BUSINESS
RD.,I-BUSINESS
",",I-BUSINESS
,O
Each,O
of,O
the,O
undersigned,O
governors,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrants,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-LEGISLATION/ACT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
President,O
(,O
principal,O
executive,O
officer,O
),O
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Governor,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
Each,O
of,O
the,O
undersigned,O
managers,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrants,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-PERSON
P.,I-PERSON
Cosper,I-PERSON
and,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Bruton,I-PERSON
Smith,I-PERSON
O,I-PERSON
.,I-PERSON
,O
Chief,O
Executive,O
Officer,O
and,O
Manager,O
(,O
principal,O
executive,O
officer,O
),O
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Manager,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
city,O
of,O
Charlotte,I-LOCATION
",",O
state,O
of,O
North,I-LOCATION
Carolina,I-LOCATION
",",O
on,O
March,O
25,O
",",O
2010,O
.,O
,O
Each,O
of,O
the,O
undersigned,O
governors,O
and,O
officers,O
of,O
the,O
above,O
named,O
Registrants,O
",",O
by,O
his,O
execution,O
hereof,O
",",O
hereby,O
constitutes,O
and,O
appoints,O
David,I-LOCATION
P.,I-LOCATION
Cosper,I-LOCATION
and,O
Stephen,I-LOCATION
K.,I-LOCATION
Coss,I-LOCATION
",",O
and,O
each,O
of,O
them,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
to,O
do,O
any,O
and,O
all,O
acts,O
and,O
things,O
for,O
him,O
",",O
and,O
in,O
his,O
name,O
",",O
place,O
and,O
stead,O
",",O
to,O
execute,O
and,O
sign,O
any,O
and,O
all,O
amendments,O
(,O
including,O
post-effective,O
amendments,O
),O
and,O
supplements,O
to,O
such,O
Registration,O
Statement,O
and,O
any,O
additional,O
registration,O
statement,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
and,O
file,O
the,O
same,O
",",O
together,O
with,O
all,O
exhibits,O
and,O
schedules,O
thereto,O
and,O
all,O
other,O
documents,O
in,O
connection,O
therewith,O
",",O
with,O
the,O
SEC,I-GOVERNMENT
and,O
with,O
such,O
state,O
securities,O
authorities,O
as,O
may,O
be,O
appropriate,O
",",O
granting,O
unto,O
said,O
attorneys-in-fact,O
",",O
and,O
each,O
of,O
them,O
",",O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
",",O
necessary,O
or,O
advisable,O
to,O
be,O
done,O
in,O
and,O
about,O
the,O
premises,O
",",O
as,O
fully,O
and,O
to,O
all,O
intents,O
and,O
purposes,O
as,O
the,O
undersigned,O
might,O
or,O
could,O
do,O
in,O
person,O
",",O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
the,O
acts,O
of,O
said,O
attorneys-in-fact,O
and,O
agents,O
",",O
or,O
any,O
of,O
them,O
",",O
which,O
they,O
may,O
lawfully,O
do,O
in,O
the,O
premises,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
Registration,O
Statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Scott,I-PERSON
Smith,I-PERSON
B,I-PERSON
.,I-PERSON
,O
President,O
and,O
Manager,O
(,O
principal,O
executive,O
officer,O
),O
,O
Vice,O
President,O
",",O
Treasurer,O
and,O
Manager,O
(,O
principal,O
financial,O
and,O
accounting,O
officer,O
),O
,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Re,O
:,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
Registration,O
Statement,O
on,O
Form,I-MISCELLANEOUS
S-4,I-MISCELLANEOUS
(,O
Reg,O
.,O
,O
to,O
),O
(,O
the,O
Form,I-MISCELLANEOUS
S-4,I-MISCELLANEOUS
),O
,O
We,O
have,O
acted,O
as,O
counsel,O
for,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
corporation,O
(,O
the,O
Company,O
),O
",",O
and,O
the,O
subsidiaries,O
of,O
the,O
Company,O
named,O
as,O
co-registrants,O
in,O
the,O
Form,I-MISCELLANEOUS
S-4,I-MISCELLANEOUS
(,O
the,O
Guarantors,O
and,O
together,O
with,O
the,O
Company,O
",",O
the,O
Issuers,O
),O
",",O
in,O
connection,O
with,O
the,O
registration,O
by,O
the,O
Company,O
and,O
the,O
Guarantors,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
of,O
the,O
offer,O
and,O
issuance,O
of,O
up,O
to,O
$,O
"210,000,000",O
aggregate,O
principal,O
amount,O
of,O
the,O
Company,O
s,O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2018,O
",",O
Series,O
B,O
with,O
guarantees,O
(,O
the,O
Exchange,O
Notes,O
),O
to,O
be,O
offered,O
by,O
the,O
Issuers,O
in,O
exchange,O
for,O
a,O
like,O
principal,O
amount,O
of,O
the,O
Company,O
s,O
issued,O
and,O
outstanding,O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2018,O
",",O
Series,O
A,O
(,O
the,O
Original,O
Notes,O
),O
.,O
,O
The,O
Exchange,O
Notes,O
are,O
to,O
be,O
issued,O
under,O
an,O
existing,O
Indenture,O
dated,O
March,O
12,O
",",O
2010,O
(,O
the,O
Indenture,O
),O
among,O
the,O
Issuers,O
and,O
U.S.,I-BUSINESS
Bank,I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
",",O
as,O
trustee,O
(,O
the,O
Trustee,O
),O
",",O
which,O
is,O
an,O
exhibit,O
to,O
the,O
Form,I-MISCELLANEOUS
S-4,I-MISCELLANEOUS
.,O
,O
We,O
have,O
examined,O
originals,O
or,O
copies,O
",",O
certified,O
or,O
otherwise,O
identified,O
to,O
our,O
satisfaction,O
",",O
of,O
(,O
i,O
),O
the,O
Amended,O
and,O
Restated,O
Certificate,O
of,O
Incorporation,O
and,O
Bylaws,O
of,O
the,O
Company,O
",",O
(,O
ii,O
),O
the,O
Indenture,O
",",O
and,O
(,O
iii,O
),O
such,O
other,O
certificates,O
",",O
instruments,O
and,O
documents,O
as,O
we,O
considered,O
appropriate,O
for,O
purposes,O
of,O
the,O
opinions,O
hereafter,O
expressed,O
.,O
,O
In,O
all,O
such,O
examinations,O
and,O
for,O
purposes,O
of,O
rendering,O
these,O
opinions,O
",",O
we,O
have,O
assumed,O
the,O
authenticity,O
of,O
all,O
original,O
and,O
certified,O
documents,O
and,O
conformity,O
to,O
original,O
or,O
certified,O
documents,O
of,O
all,O
copies,O
submitted,O
to,O
us,O
as,O
conformed,O
or,O
facsimile,O
",",O
electronic,O
or,O
photostatic,O
copies,O
.,O
,O
As,O
to,O
various,O
questions,O
of,O
fact,O
relevant,O
to,O
the,O
opinions,O
expressed,O
herein,O
",",O
we,O
have,O
relied,O
upon,O
",",O
and,O
assume,O
the,O
accuracy,O
of,O
",",O
representations,O
and,O
warranties,O
contained,O
in,O
the,O
Indenture,O
",",O
which,O
includes,O
the,O
form,O
of,O
the,O
Exchange,O
Notes,O
",",O
and,O
any,O
instruments,O
related,O
thereto,O
and,O
oral,O
or,O
written,O
statements,O
and,O
other,O
information,O
of,O
or,O
from,O
public,O
officials,O
",",O
officers,O
or,O
representatives,O
of,O
the,O
Company,O
",",O
the,O
Guarantors,O
and,O
others,O
",",O
and,O
assume,O
compliance,O
on,O
the,O
part,O
of,O
all,O
parties,O
to,O
the,O
Indenture,O
and,O
the,O
Exchange,O
Notes,O
",",O
and,O
the,O
instruments,O
related,O
thereto,O
with,O
the,O
covenants,O
and,O
agreements,O
contained,O
therein,O
.,O
,O
With,O
your,O
permission,O
",",O
all,O
assumptions,O
and,O
statements,O
of,O
reliance,O
herein,O
have,O
been,O
made,O
without,O
any,O
independent,O
investigation,O
or,O
verification,O
on,O
our,O
part,O
except,O
to,O
the,O
extent,O
otherwise,O
expressly,O
stated,O
",",O
and,O
we,O
express,O
no,O
opinion,O
with,O
respect,O
to,O
the,O
subject,O
matter,O
or,O
accuracy,O
of,O
such,O
assumptions,O
or,O
items,O
relied,O
upon,O
.,O
,O
In,O
addition,O
",",O
we,O
reviewed,O
such,O
questions,O
of,O
law,O
as,O
we,O
considered,O
appropriate,O
.,O
,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Commission,O
(,O
the,O
Commission,O
),O
;,O
(,O
ii,O
),O
the,O
Indenture,O
will,O
have,O
been,O
qualified,O
under,O
the,O
Trust,I-LEGISLATION/ACT
Indenture,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1939,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
(,O
iii,O
),O
the,O
Exchange,O
Notes,O
will,O
be,O
issued,O
and,O
sold,O
in,O
compliance,O
with,O
applicable,O
federal,O
and,O
state,O
securities,O
laws,O
in,O
exchange,O
for,O
the,O
Original,O
Notes,O
in,O
the,O
manner,O
and,O
in,O
accordance,O
with,O
the,O
terms,O
stated,O
in,O
the,O
Form,I-MISCELLANEOUS
S-4,I-MISCELLANEOUS
;,O
(,O
iv,O
),O
the,O
Exchange,O
Notes,O
will,O
be,O
duly,O
authorized,O
",",O
executed,O
and,O
delivered,O
by,O
the,O
parties,O
thereto,O
in,O
substantially,O
the,O
form,O
reviewed,O
by,O
us,O
and,O
in,O
accordance,O
with,O
the,O
provisions,O
of,O
the,O
Indenture,O
;,O
(,O
v,O
),O
the,O
Exchange,O
Notes,O
will,O
be,O
duly,O
authenticated,O
by,O
the,O
Trustee,O
in,O
the,O
manner,O
provided,O
in,O
the,O
Indenture,O
;,O
(,O
vi,O
),O
each,O
person,O
who,O
signed,O
the,O
Indenture,O
had,O
",",O
and,O
each,O
person,O
who,O
will,O
sign,O
the,O
Exchange,O
Notes,O
will,O
have,O
",",O
the,O
legal,O
capacity,O
and,O
authority,O
to,O
do,O
so,O
and,O
the,O
Indenture,O
has,O
been,O
duly,O
authorized,O
",",O
executed,O
and,O
delivered,O
by,O
the,O
parties,O
thereto,O
(,O
other,O
than,O
the,O
Issuers,O
),O
;,O
(,O
vii,O
),O
the,O
Issuers,O
are,O
and,O
will,O
continue,O
to,O
be,O
validly,O
existing,O
and,O
in,O
good,O
standing,O
under,O
the,O
laws,O
of,O
their,O
respective,O
jurisdictions,O
of,O
organization,O
",",O
have,O
the,O
power,O
and,O
authority,O
to,O
enter,O
into,O
and,O
perform,O
their,O
obligations,O
under,O
the,O
Exchange,O
Notes,O
and,O
to,O
consummate,O
the,O
transactions,O
contemplated,O
thereby,O
;,O
(,O
viii,O
),O
the,O
Indenture,O
constitutes,O
the,O
legal,O
",",O
valid,O
binding,O
obligation,O
of,O
the,O
Trustee,O
and,O
(,O
ix,O
),O
all,O
signatures,O
are,O
genuine,O
.,O
,O
Based,O
upon,O
the,O
foregoing,O
and,O
subject,O
to,O
the,O
limitations,O
",",O
qualifications,O
and,O
assumptions,O
set,O
forth,O
herein,O
",",O
we,O
are,O
of,O
the,O
opinion,O
that,O
the,O
Exchange,O
Notes,O
",",O
when,O
issued,O
by,O
the,O
Issuers,O
",",O
will,O
constitute,O
valid,O
and,O
legally,O
binding,O
obligations,O
of,O
the,O
Issuers,O
",",O
enforceable,O
against,O
the,O
Issuers,O
in,O
accordance,O
with,O
their,O
terms,O
.,O
,O
The,O
opinions,O
expressed,O
herein,O
are,O
limited,O
to,O
matters,O
governed,O
by,O
the,O
laws,O
of,O
the,O
States,I-LOCATION
of,I-LOCATION
North,I-LOCATION
Carolina,I-LOCATION
and,O
New,I-LOCATION
York,I-LOCATION
",",O
the,O
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
the,I-LEGISLATION/ACT
State,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Delaware,I-LEGISLATION/ACT
(,O
including,O
the,O
applicable,O
provisions,O
of,O
the,O
Delaware,I-LEGISLATION/ACT
Constitution,I-LEGISLATION/ACT
",",O
and,O
the,O
reported,O
cases,O
interpreting,O
those,O
laws,O
),O
",",O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
the,O
applicable,O
business,O
corporation,O
",",O
limited,O
liability,O
company,O
or,O
limited,O
partnership,O
laws,O
of,O
the,O
States,I-LOCATION
of,I-LOCATION
Alabama,I-LOCATION
",",O
Arizona,I-LOCATION
",",O
California,I-LOCATION
",",O
Colorado,I-LOCATION
",",O
Florida,I-LOCATION
",",O
Georgia,I-LOCATION
",",O
Hawaii,I-LOCATION
",",O
Maryland,I-LOCATION
",",O
Michigan,I-LOCATION
",",O
Nevada,I-LOCATION
",",O
Ohio,I-LOCATION
",",O
Oklahoma,I-LOCATION
",",O
South,I-LOCATION
Carolina,I-LOCATION
",",O
Tennessee,I-LOCATION
",",O
Texas,I-LOCATION
and,O
Virginia,I-LOCATION
",",O
as,O
currently,O
in,O
effect,O
and,O
no,O
opinion,O
is,O
expressed,O
with,O
respect,O
to,O
any,O
other,O
laws,O
or,O
any,O
effect,O
that,O
such,O
other,O
laws,O
may,O
have,O
on,O
the,O
opinions,O
expressed,O
herein,O
.,O
,O
Except,O
with,O
respect,O
to,O
the,O
opinions,O
provided,O
herein,O
",",O
we,O
do,O
not,O
purport,O
to,O
be,O
expert,O
with,O
respect,O
to,O
the,O
laws,O
of,O
the,O
States,I-LOCATION
of,I-LOCATION
Alabama,I-LOCATION
",",O
Arizona,I-LOCATION
",",O
California,I-LOCATION
",",O
Colorado,I-LOCATION
",",O
Florida,I-LOCATION
",",O
Georgia,I-LOCATION
",",O
Hawaii,I-LOCATION
",",O
Maryland,I-LOCATION
",",O
Michigan,I-LOCATION
",",O
Nevada,I-LOCATION
",",O
Ohio,I-LOCATION
",",O
Oklahoma,I-LOCATION
",",O
Tennessee,I-LOCATION
",",O
Texas,I-LOCATION
and,O
Virginia,I-LOCATION
and,O
our,O
opinions,O
with,O
respect,O
to,O
the,O
laws,O
of,O
such,O
states,O
are,O
based,O
solely,O
upon,O
our,O
reading,O
of,O
the,O
texts,O
of,O
the,O
relevant,O
corporate,O
",",O
limited,O
liability,O
company,O
and,O
limited,O
partnership,O
statutes,O
.,O
,O
The,O
opinions,O
expressed,O
herein,O
are,O
limited,O
to,O
the,O
matters,O
stated,O
herein,O
",",O
and,O
no,O
opinion,O
is,O
implied,O
or,O
may,O
be,O
inferred,O
beyond,O
the,O
matters,O
expressly,O
stated,O
herein,O
.,O
,O
We,O
express,O
no,O
opinion,O
as,O
to,O
:,O
,O
(,O
i,O
),O
the,O
legality,O
",",O
validity,O
",",O
binding,O
effect,O
or,O
enforceability,O
of,O
any,O
provision,O
of,O
the,O
Indenture,O
or,O
the,O
Exchange,O
Notes,O
relating,O
to,O
indemnification,O
or,O
contribution,O
or,O
exculpation,O
;,O
,O
(,O
ii,O
),O
the,O
legality,O
",",O
validity,O
",",O
binding,O
effect,O
or,O
enforceability,O
of,O
any,O
provision,O
of,O
the,O
Indenture,O
or,O
the,O
Exchange,O
Notes,O
:,O
,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
including,O
judicial,O
decisions,O
),O
",",O
except,O
to,O
the,O
extent,O
that,O
such,O
a,O
Waiver,O
is,O
effective,O
under,O
",",O
and,O
is,O
not,O
prohibited,O
by,O
or,O
void,O
or,O
invalid,O
under,O
",",O
provisions,O
of,O
applicable,O
law,O
(,O
including,O
judicial,O
decisions,O
),O
;,O
,O
(,O
B,O
),O
related,O
to,O
(,O
I,O
),O
forum,O
selection,O
or,O
submission,O
to,O
jurisdiction,O
(,O
including,O
",",O
without,O
limitation,O
",",O
any,O
waiver,O
of,O
any,O
objection,O
to,O
venue,O
in,O
any,O
court,O
or,O
of,O
any,O
objection,O
that,O
a,O
court,O
is,O
an,O
inconvenient,O
forum,O
),O
to,O
the,O
extent,O
that,O
the,O
legality,O
",",O
validity,O
",",O
binding,O
effect,O
or,O
enforceability,O
of,O
any,O
such,O
provision,O
is,O
to,O
be,O
determined,O
by,O
any,O
court,O
other,O
than,O
a,O
court,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
New,I-LOCATION
York,I-LOCATION
",",O
or,O
(,O
II,O
),O
choice,O
of,O
governing,O
law,O
to,O
the,O
extent,O
that,O
the,O
legality,O
",",O
validity,O
",",O
binding,O
effect,O
or,O
enforceability,O
of,O
any,O
such,O
provision,O
is,O
to,O
be,O
determined,O
by,O
any,O
court,O
other,O
than,O
a,O
court,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
New,I-LOCATION
York,I-LOCATION
or,O
a,O
federal,O
district,O
court,O
sitting,O
in,O
the,O
State,I-LOCATION
of,I-LOCATION
New,I-LOCATION
York,I-LOCATION
",",O
in,O
each,O
case,O
",",O
applying,O
the,O
choice,O
of,O
law,O
principles,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
New,I-LOCATION
York,I-LOCATION
;,O
,O
(,O
C,O
),O
specifying,O
that,O
provisions,O
thereof,O
may,O
be,O
waived,O
only,O
in,O
writing,O
",",O
to,O
the,O
extent,O
that,O
an,O
oral,O
agreement,O
or,O
an,O
implied,O
agreement,O
by,O
trade,O
practice,O
or,O
course,O
of,O
conduct,O
has,O
been,O
created,O
that,O
modifies,O
any,O
provision,O
of,O
such,O
agreement,O
;,O
,O
(,O
D,O
),O
purporting,O
to,O
give,O
any,O
person,O
or,O
entity,O
the,O
power,O
to,O
accelerate,O
obligations,O
without,O
any,O
notice,O
to,O
the,O
obligor,O
;,O
,O
(,O
iii,O
),O
the,O
legality,O
",",O
validity,O
",",O
binding,O
effect,O
or,O
enforceability,O
of,O
any,O
Waiver,O
in,O
the,O
guarantees,O
insofar,O
as,O
it,O
relates,O
to,O
causes,O
or,O
circumstances,O
that,O
would,O
operate,O
as,O
a,O
discharge,O
or,O
release,O
of,O
",",O
or,O
defense,O
available,O
to,O
",",O
the,O
Company,O
or,O
any,O
Guarantor,O
as,O
a,O
matter,O
of,O
law,O
(,O
including,O
judicial,O
decisions,O
),O
",",O
except,O
to,O
the,O
extent,O
such,O
Waiver,O
is,O
effective,O
under,O
and,O
is,O
not,O
prohibited,O
by,O
or,O
void,O
or,O
invalid,O
under,O
applicable,O
law,O
(,O
including,O
judicial,O
decisions,O
),O
.,O
,O
The,O
opinion,O
expressed,O
herein,O
is,O
subject,O
to,O
the,O
following,O
:,O
,O
(,O
i,O
),O
bankruptcy,O
",",O
insolvency,O
",",O
reorganization,O
",",O
moratorium,O
(,O
or,O
other,O
related,O
judicial,O
doctrines,O
),O
and,O
other,O
laws,O
now,O
or,O
hereafter,O
in,O
effect,O
affecting,O
creditors,O
rights,O
and,O
remedies,O
generally,O
;,O
,O
(,O
iii,O
),O
the,O
application,O
of,O
any,O
applicable,O
fraudulent,O
conveyance,O
",",O
fraudulent,O
transfer,O
",",O
fraudulent,O
obligation,O
",",O
or,O
preferential,O
transfer,O
law,O
or,O
any,O
law,O
governing,O
the,O
distribution,O
of,O
assets,O
of,O
any,O
person,O
now,O
or,O
hereafter,O
in,O
effect,O
affecting,O
creditors,O
rights,O
and,O
remedies,O
generally,O
.,O
,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
liabilities,O
of,O
the,O
Guarantors,O
",",O
might,O
not,O
be,O
enforceable,O
under,O
circumstances,O
and,O
in,O
the,O
event,O
of,O
actions,O
that,O
change,O
the,O
essential,O
nature,O
of,O
the,O
terms,O
and,O
conditions,O
of,O
the,O
guaranteed,O
obligations,O
;,O
,O
(,O
v,O
),O
we,O
express,O
no,O
opinion,O
as,O
to,O
whether,O
the,O
guarantees,O
or,O
Article,O
Thirteen,O
of,O
the,O
Indenture,O
would,O
be,O
deemed,O
by,O
a,O
court,O
of,O
competent,O
jurisdiction,O
to,O
be,O
within,O
the,O
authorized,O
corporate,O
power,O
of,O
any,O
Guarantor,O
;,O
,O
(,O
vii,O
),O
the,O
qualification,O
that,O
certain,O
provisions,O
of,O
the,O
Indenture,O
or,O
the,O
Exchange,O
Notes,O
or,O
any,O
other,O
instruments,O
defining,O
the,O
rights,O
of,O
holders,O
thereof,O
may,O
be,O
unenforceable,O
in,O
whole,O
or,O
in,O
part,O
",",O
but,O
the,O
inclusion,O
of,O
such,O
provisions,O
does,O
not,O
affect,O
the,O
validity,O
as,O
against,O
the,O
Company,O
or,O
any,O
of,O
the,O
Guarantors,O
of,O
the,O
Indenture,O
or,O
the,O
Exchange,O
Notes,O
or,O
any,O
other,O
instruments,O
defining,O
the,O
rights,O
of,O
holders,O
thereof,O
as,O
a,O
whole,O
",",O
and,O
the,O
Indenture,O
or,O
the,O
Exchange,O
Notes,O
or,O
any,O
other,O
instruments,O
defining,O
the,O
rights,O
of,O
holders,O
thereof,O
and,O
the,O
laws,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
New,I-LOCATION
York,I-LOCATION
contain,O
adequate,O
provisions,O
for,O
enforcing,O
payment,O
of,O
the,O
obligations,O
governed,O
or,O
secured,O
thereby,O
",",O
subject,O
to,O
the,O
other,O
qualifications,O
contained,O
in,O
this,O
letter,O
.,O
,O
The,O
opinions,O
expressed,O
herein,O
are,O
given,O
as,O
of,O
the,O
date,O
hereof,O
",",O
and,O
we,O
undertake,O
no,O
obligation,O
to,O
supplement,O
this,O
letter,O
if,O
any,O
applicable,O
laws,O
change,O
after,O
the,O
date,O
hereof,O
or,O
if,O
we,O
become,O
aware,O
of,O
any,O
facts,O
that,O
might,O
change,O
the,O
opinions,O
expressed,O
herein,O
or,O
for,O
any,O
other,O
reason,O
.,O
,O
No,O
opinion,O
may,O
be,O
inferred,O
or,O
implied,O
beyond,O
the,O
matters,O
expressly,O
contained,O
herein,O
.,O
,O
We,O
do,O
not,O
find,O
it,O
necessary,O
for,O
purposes,O
of,O
this,O
opinion,O
",",O
and,O
accordingly,O
we,O
do,O
not,O
purport,O
to,O
cover,O
herein,O
",",O
the,O
application,O
of,O
the,O
securities,O
or,O
Blue,O
Sky,O
laws,O
of,O
the,O
various,O
states,O
to,O
the,O
offer,O
and,O
sale,O
of,O
the,O
Exchange,O
Notes,O
.,O
,O
We,O
hereby,O
consent,O
to,O
the,O
filing,O
of,O
this,O
opinion,O
as,O
an,O
exhibit,O
to,O
the,O
Form,I-MISCELLANEOUS
S-4,I-MISCELLANEOUS
and,O
to,O
the,O
reference,O
to,O
this,O
firm,O
under,O
the,O
caption,O
Legal,O
Matters,O
in,O
the,O
prospectus,O
and,O
Legal,O
Matters,O
in,O
any,O
prospectus,O
or,O
prospectus,O
supplement,O
forming,O
part,O
of,O
the,O
Form,I-MISCELLANEOUS
S-4,I-MISCELLANEOUS
.,O
,O
In,O
giving,O
such,O
consent,O
",",O
we,O
do,O
not,O
hereby,O
admit,O
that,O
we,O
are,O
in,O
the,O
category,O
of,O
such,O
persons,O
whose,O
consent,O
is,O
required,O
under,O
Section,O
7,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
or,O
the,O
rules,O
and,O
regulations,O
of,O
the,O
Commission,O
promulgated,O
thereunder,O
.,O
,O
Very,O
truly,O
yours,O
",",O
,O
[,O
FORM,O
OF,O
OPINION,O
],O
,O
We,O
consent,O
to,O
the,O
reference,O
to,O
our,O
firm,O
under,O
the,O
caption,O
Experts,O
in,O
this,O
Registration,O
Statement,O
(,O
Form,I-MISCELLANEOUS
S-4,I-MISCELLANEOUS
),O
and,O
related,O
Prospectus,O
of,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
for,O
the,O
registration,O
of,O
$,O
210,O
million,O
of,O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2018,O
",",O
Series,O
B,O
and,O
the,O
related,O
Guarantees,O
of,O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2018,O
",",O
Series,O
B,O
and,O
to,O
the,O
incorporation,O
by,O
reference,O
therein,O
of,O
our,O
reports,O
dated,O
February,O
24,O
",",O
2010,O
",",O
with,O
respect,O
to,O
the,O
consolidated,O
financial,O
statements,O
as,O
of,O
and,O
for,O
the,O
years,O
ended,O
December,O
31,O
",",O
2009,O
and,O
2008,O
and,O
the,O
effectiveness,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
of,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
included,O
in,O
its,O
Annual,O
Report,O
(,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
),O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
",",O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
.,O
,O
We,O
consent,O
to,O
the,O
incorporation,O
by,O
reference,O
in,O
this,O
Registration,O
Statement,O
on,O
Form,I-MISCELLANEOUS
S-4,I-MISCELLANEOUS
of,O
our,O
report,O
dated,O
February,O
29,O
",",O
2008,O
(,O
May,O
28,O
",",O
2009,O
as,O
to,O
the,O
third,O
and,O
fourth,O
paragraphs,O
under,O
the,O
Recent,O
Accounting,O
Pronouncements,O
heading,O
in,O
Note,O
1,O
",",O
the,O
fourth,O
paragraph,O
under,O
the,O
Dispositions,O
heading,O
in,O
Note,O
2,O
",",O
the,O
first,O
and,O
second,O
paragraphs,O
in,O
Note,O
7,O
and,O
the,O
fifth,O
paragraph,O
in,O
Note,O
9,O
),O
(,O
February,O
24,O
",",O
2010,O
as,O
to,O
the,O
first,O
paragraph,O
under,O
the,O
Reclassifications,O
heading,O
in,O
Note,O
1,O
),O
relating,O
to,O
the,O
2007,O
consolidated,O
statements,O
of,O
income,O
",",O
stockholders,O
equity,O
",",O
and,O
cash,O
flows,O
(,O
including,O
retrospective,O
adjustments,O
to,O
the,O
2007,O
consolidated,O
financial,O
statements,O
and,O
financial,O
statement,O
disclosures,O
),O
of,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
which,O
report,O
expresses,O
an,O
unqualified,O
opinion,O
and,O
includes,O
explanatory,O
paragraphs,O
regarding,O
the,O
adoption,O
of,O
the,O
updated,O
provisions,O
of,O
Income,I-MISCELLANEOUS
Taxes,I-MISCELLANEOUS
in,O
the,O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Codification,I-LEGISLATION/ACT
(,O
ASC,I-LEGISLATION/ACT
),O
as,O
of,O
January,O
1,O
",",O
2007,O
",",O
the,O
adoption,O
of,O
the,O
updated,O
provisions,O
of,O
Debt,I-MISCELLANEOUS
with,I-MISCELLANEOUS
Conversion,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Other,I-MISCELLANEOUS
Options,I-MISCELLANEOUS
in,O
the,O
ASC,I-LEGISLATION/ACT
and,O
for,O
the,O
adoption,O
of,O
the,O
updated,O
provisions,O
of,O
Earnings,I-MISCELLANEOUS
Per,I-MISCELLANEOUS
Share,I-MISCELLANEOUS
in,O
the,O
ASC,I-LEGISLATION/ACT
),O
",",O
appearing,O
in,O
the,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
of,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2009,O
",",O
and,O
to,O
the,O
reference,O
to,O
us,O
under,O
the,O
heading,O
Experts,O
in,O
the,O
Prospectus,O
",",O
which,O
is,O
part,O
of,O
this,O
Registration,O
Statement,O
.,O
,O
*,O
The,O
principal,O
executive,O
office,O
of,O
all,O
of,O
the,O
additional,O
obligors,O
is,O
6415,O
Idlewild,I-LOCATION
Road,I-LOCATION
",",O
Suite,O
109,O
",",O
Charlotte,I-LOCATION
",",O
North,I-LOCATION
Carolina,I-LOCATION
28212,O
.,O
,O
Their,O
telephone,O
number,O
is,O
(,O
704,O
),O
566-2400,O
.,O
,O
*,O
Incorporated,O
by,O
reference,O
to,O
Exhibit,O
25.1,O
to,O
Amendment,O
No.,O
2,O
to,O
registration,O
statement,O
on,O
S-4,I-MISCELLANEOUS
",",O
Registration,O
Number,O
333-128217,O
filed,O
on,O
November,O
15,O
",",O
2005,O
.,O
,O
*,O
*,O
Incorporated,O
by,O
reference,O
to,O
Exhibit,O
25.1,O
to,O
registration,O
statement,O
on,O
S-4,I-MISCELLANEOUS
",",O
Registration,O
Number,O
333-159463,O
filed,O
on,O
August,O
21,O
",",O
2009,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Trust,I-LEGISLATION/ACT
Indenture,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1939,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
the,O
Trustee,O
",",O
U.S.,I-BUSINESS
BANK,I-BUSINESS
NATIONAL,I-BUSINESS
ASSOCIATION,I-BUSINESS
",",O
a,O
national,O
banking,O
association,O
organized,O
and,O
existing,O
under,O
the,O
laws,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
of,I-LOCATION
America,I-LOCATION
",",O
has,O
duly,O
caused,O
this,O
statement,O
of,O
eligibility,O
and,O
qualification,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
all,O
in,O
the,O
City,I-LOCATION
of,I-LOCATION
St.,I-LOCATION
Paul,I-LOCATION
",",O
State,I-LOCATION
of,I-LOCATION
Minnesota,I-LOCATION
on,O
the,O
23rd,O
of,O
March,O
2010,O
.,O
,O
In,O
accordance,O
with,O
Section,O
321,O
(,O
b,O
),O
of,O
the,O
Trust,I-LEGISLATION/ACT
Indenture,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1939,I-LEGISLATION/ACT
",",O
the,O
undersigned,O
",",O
U.S.,I-BUSINESS
BANK,I-BUSINESS
NATIONAL,I-BUSINESS
ASSOCIATION,I-BUSINESS
hereby,O
consents,O
that,O
reports,O
of,O
examination,O
of,O
the,O
undersigned,O
by,O
Federal,O
",",O
State,O
",",O
Territorial,O
or,O
District,O
authorities,O
may,O
be,O
furnished,O
by,O
such,O
authorities,O
to,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
upon,O
its,O
request,O
therefor,O
.,O
,O
To,O
the,O
best,O
of,O
the,O
undersigned,O
s,O
determination,O
",",O
as,O
of,O
the,O
date,O
hereof,O
",",O
the,O
above,O
financial,O
information,O
is,O
true,O
and,O
correct,O
.,O
,O
THE,O
EXCHANGE,O
OFFER,O
WILL,O
EXPIRE,O
AT,O
5:00,O
P.M.,O
NEW,I-MISCELLANEOUS
YORK,I-MISCELLANEOUS
CITY,I-MISCELLANEOUS
TIME,I-MISCELLANEOUS
",",O
ON,O
",",O
2010,O
",",O
UNLESS,O
EXTENDED,O
(,O
THE,O
EXPIRATION,O
DATE,O
),O
.,O
,O
TENDERS,O
MAY,O
BE,O
WITHDRAWN,O
PRIOR,O
TO,O
5:00,O
P.M.,O
",",O
NEW,I-MISCELLANEOUS
YORK,I-MISCELLANEOUS
CITY,I-MISCELLANEOUS
TIME,I-MISCELLANEOUS
",",O
ON,O
THE,O
EXPIRATION,O
DATE,O
.,O
,O
DELIVERY,O
OF,O
THIS,O
INSTRUMENT,O
TO,O
AN,O
ADDRESS,O
OTHER,O
THAN,O
AS,O
SET,O
FORTH,O
ABOVE,O
",",O
OR,O
TRANSMISSION,O
OF,O
INSTRUCTIONS,O
VIA,O
FACSIMILE,O
OTHER,O
THAN,O
AS,O
SET,O
FORTH,O
ABOVE,O
",",O
WILL,O
NOT,O
CONSTITUTE,O
A,O
VALID,O
DELIVERY,O
.,O
,O
The,O
undersigned,O
acknowledges,O
receipt,O
of,O
the,O
Prospectus,O
",",O
dated,O
",",O
2010,O
(,O
the,O
Prospectus,O
),O
",",O
of,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
corporation,O
(,O
the,O
Company,O
),O
",",O
and,O
this,O
Letter,O
of,O
Transmittal,O
(,O
this,O
Letter,O
),O
",",O
which,O
together,O
constitute,O
the,O
offer,O
(,O
the,O
Exchange,O
Offer,O
),O
to,O
exchange,O
an,O
aggregate,O
principal,O
amount,O
of,O
up,O
to,O
$,O
"210,000,000",O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
Due,O
2018,O
",",O
Series,O
B,O
(,O
the,O
New,O
Notes,O
),O
for,O
an,O
equal,O
principal,O
amount,O
of,O
the,O
outstanding,O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
Due,O
2018,O
",",O
Series,O
A,O
(,O
the,O
Old,O
Notes,O
),O
.,O
,O
For,O
each,O
Old,O
Note,O
accepted,O
for,O
exchange,O
",",O
the,O
holder,O
of,O
such,O
Old,O
Note,O
will,O
receive,O
a,O
New,O
Note,O
having,O
a,O
principal,O
amount,O
at,O
maturity,O
equal,O
to,O
that,O
of,O
the,O
surrendered,O
Old,O
Note,O
.,O
,O
The,O
New,O
Notes,O
will,O
bear,O
interest,O
at,O
a,O
rate,O
equal,O
to,O
9.0,O
%,O
per,O
annum,O
.,O
,O
Interest,O
on,O
the,O
New,O
Notes,O
is,O
payable,O
semiannually,O
",",O
commencing,O
September,O
15,O
",",O
2010,O
",",O
on,O
March,O
15,O
and,O
September,O
15,O
of,O
each,O
year,O
(,O
each,O
",",O
an,O
Interest,O
Payment,O
Date,O
),O
and,O
shall,O
accrue,O
from,O
March,O
12,O
",",O
2010,O
",",O
or,O
from,O
the,O
most,O
recent,O
Interest,O
Payment,O
Date,O
with,O
respect,O
to,O
the,O
Old,O
Notes,O
to,O
which,O
interest,O
was,O
paid,O
or,O
for,O
which,O
interest,O
was,O
duly,O
provided,O
.,O
,O
The,O
New,O
Notes,O
will,O
mature,O
on,O
March,O
15,O
",",O
2018,O
.,O
,O
Holders,O
of,O
New,O
Notes,O
will,O
not,O
be,O
and,O
",",O
upon,O
consummation,O
of,O
the,O
Exchange,O
Offer,O
",",O
holders,O
of,O
Old,O
Notes,O
will,O
no,O
longer,O
be,O
",",O
entitled,O
to,O
(,O
i,O
),O
the,O
right,O
to,O
receive,O
additional,O
interest,O
",",O
if,O
any,O
or,O
(,O
ii,O
),O
certain,O
other,O
rights,O
intended,O
for,O
holders,O
of,O
Old,O
Notes,O
",",O
in,O
either,O
case,O
",",O
under,O
a,O
Registration,O
Rights,O
Agreement,O
dated,O
as,O
of,O
March,O
12,O
",",O
2010,O
by,O
and,O
among,O
the,O
Company,O
",",O
the,O
guarantors,O
named,O
therein,O
and,O
Banc,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
Securities,I-BUSINESS
LLC,I-BUSINESS
",",O
as,O
representative,O
of,O
several,O
initial,O
purchasers,O
identified,O
therein,O
.,O
,O
The,O
Exchange,O
Offer,O
shall,O
be,O
deemed,O
consummated,O
upon,O
the,O
occurrence,O
of,O
the,O
delivery,O
by,O
the,O
Company,O
to,O
the,O
Registrar,O
under,O
the,O
Indenture,O
of,O
New,O
Notes,O
in,O
the,O
same,O
aggregate,O
principal,O
amount,O
as,O
the,O
aggregate,O
principal,O
amount,O
of,O
Old,O
Notes,O
that,O
are,O
tendered,O
by,O
holders,O
thereof,O
pursuant,O
to,O
the,O
Exchange,O
Offer,O
.,O
,O
The,O
Company,O
reserves,O
the,O
right,O
",",O
in,O
its,O
sole,O
discretion,O
",",O
(,O
i,O
),O
to,O
delay,O
accepting,O
any,O
Old,O
Notes,O
",",O
(,O
ii,O
),O
to,O
extend,O
the,O
Exchange,O
Offer,O
",",O
in,O
which,O
event,O
the,O
term,O
Expiration,O
Date,O
shall,O
mean,O
the,O
latest,O
time,O
and,O
date,O
to,O
which,O
the,O
Exchange,O
Offer,O
is,O
extended,O
",",O
(,O
iii,O
),O
if,O
the,O
Commission,O
does,O
not,O
declare,O
the,O
Registration,O
Statement,O
effective,O
",",O
to,O
terminate,O
the,O
Exchange,O
Offer,O
",",O
by,O
giving,O
oral,O
or,O
written,O
notice,O
of,O
such,O
delay,O
",",O
extension,O
",",O
or,O
termination,O
to,O
the,O
Exchange,O
Agent,O
",",O
and,O
(,O
iv,O
),O
to,O
amend,O
the,O
terms,O
of,O
the,O
Exchange,O
Offer,O
in,O
any,O
manner,O
.,O
,O
If,O
the,O
Exchange,O
Offer,O
is,O
amended,O
in,O
a,O
manner,O
determined,O
by,O
the,O
Company,O
to,O
constitute,O
a,O
material,O
change,O
",",O
the,O
Company,O
will,O
promptly,O
disclose,O
such,O
amendments,O
by,O
means,O
of,O
a,O
prospectus,O
supplement,O
that,O
will,O
be,O
distributed,O
to,O
the,O
registered,O
holders,O
of,O
the,O
Old,O
Notes,O
.,O
,O
Modifications,O
of,O
the,O
Exchange,O
Offer,O
",",O
including,O
but,O
not,O
limited,O
to,O
(,O
i,O
),O
extension,O
of,O
the,O
period,O
during,O
which,O
the,O
Exchange,O
Offer,O
is,O
open,O
and,O
(,O
ii,O
),O
satisfaction,O
of,O
the,O
conditions,O
set,O
forth,O
under,O
the,O
caption,O
The,O
Exchange,O
Offer—Conditions,O
in,O
the,O
Prospectus,O
",",O
may,O
require,O
that,O
at,O
least,O
ten,O
(,O
10,O
),O
business,O
days,O
remain,O
in,O
the,O
Exchange,O
Offer,O
.,O
,O
In,O
order,O
to,O
extend,O
the,O
Exchange,O
Offer,O
",",O
the,O
Company,O
will,O
notify,O
the,O
Exchange,O
Agent,O
of,O
any,O
extension,O
",",O
amendment,O
",",O
non-acceptance,O
or,O
termination,O
by,O
oral,O
or,O
written,O
notice,O
and,O
will,O
make,O
a,O
public,O
announcement,O
thereof,O
",",O
each,O
prior,O
to,O
9:00,O
a.m.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
the,O
next,O
business,O
day,O
after,O
the,O
previously,O
scheduled,O
Expiration,O
Date,O
.,O
,O
This,O
Letter,O
must,O
be,O
completed,O
and,O
delivered,O
by,O
a,O
holder,O
of,O
Old,O
Notes,O
if,O
:,O
(,O
i,O
),O
certificates,O
are,O
to,O
be,O
forwarded,O
herewith,O
or,O
(,O
ii,O
),O
tenders,O
are,O
to,O
be,O
made,O
by,O
book-entry,O
transfer,O
to,O
the,O
account,O
maintained,O
by,O
the,O
Exchange,O
Agent,O
at,O
The,I-BUSINESS
Depository,I-BUSINESS
Trust,I-BUSINESS
Company,I-BUSINESS
(,O
DTC,I-BUSINESS
or,O
the,O
Book-Entry,O
Transfer,O
Facility,O
),O
pursuant,O
to,O
the,O
procedures,O
set,O
forth,O
in,O
The,I-MISCELLANEOUS
Exchange,I-MISCELLANEOUS
Offer—Book-Entry,I-MISCELLANEOUS
Transfer,I-MISCELLANEOUS
section,O
of,O
the,O
Prospectus,O
.,O
,O
Holders,O
of,O
Old,O
Notes,O
whose,O
Old,O
Notes,O
are,O
not,O
immediately,O
available,O
",",O
or,O
who,O
are,O
unable,O
to,O
deliver,O
their,O
Old,O
Notes,O
or,O
confirmation,O
of,O
the,O
book-entry,O
tender,O
of,O
their,O
Old,O
Notes,O
into,O
the,O
Exchange,O
Agent,O
s,O
account,O
at,O
the,O
Book-Entry,O
Transfer,O
Facility,O
(,O
a,O
Book-Entry,O
Confirmation,O
),O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
and,O
all,O
other,O
documents,O
required,O
by,O
this,O
Letter,O
to,O
the,O
Exchange,O
Agent,O
on,O
or,O
prior,O
to,O
the,O
Expiration,O
Date,O
",",O
must,O
tender,O
their,O
Old,O
Notes,O
according,O
to,O
the,O
guaranteed,O
delivery,O
procedures,O
set,O
forth,O
in,O
The,I-MISCELLANEOUS
Exchange,I-MISCELLANEOUS
Offer—Guaranteed,I-MISCELLANEOUS
Delivery,I-MISCELLANEOUS
Procedures,I-MISCELLANEOUS
section,O
of,O
the,O
Prospectus,O
.,O
,O
See,O
Instruction,O
1,O
to,O
this,O
Letter,O
.,O
,O
Delivery,O
of,O
documents,O
to,O
the,O
Book,O
Entry,O
Transfer,O
Facility,O
does,O
not,O
constitute,O
delivery,O
to,O
the,O
Exchange,O
Agent,O
.,O
,O
Tenders,O
by,O
book-entry,O
transfer,O
may,O
also,O
be,O
made,O
by,O
delivering,O
an,O
Agent,O
s,O
Message,O
in,O
lieu,O
of,O
this,O
Letter,O
.,O
,O
The,O
term,O
Agent,O
s,O
Message,O
means,O
a,O
message,O
transmitted,O
by,O
the,O
Book-Entry,O
Transfer,O
Facility,O
and,O
received,O
by,O
the,O
Exchange,O
Agent,O
and,O
forming,O
a,O
part,O
of,O
a,O
Book-Entry,O
Confirmation,O
",",O
which,O
states,O
that,O
the,O
Book-Entry,O
Transfer,O
Facility,O
has,O
received,O
an,O
express,O
acknowledgement,O
from,O
the,O
tendering,O
participant,O
",",O
which,O
acknowledgement,O
states,O
that,O
such,O
participant,O
has,O
received,O
and,O
agrees,O
to,O
be,O
bound,O
by,O
this,O
Letter,O
and,O
the,O
Company,O
may,O
enforce,O
this,O
Letter,O
against,O
such,O
participant,O
.,O
,O
The,O
undersigned,O
has,O
completed,O
the,O
appropriate,O
boxes,O
below,O
and,O
signed,O
this,O
Letter,O
to,O
indicate,O
the,O
action,O
the,O
undersigned,O
desires,O
to,O
take,O
with,O
respect,O
to,O
the,O
Exchange,O
Offer,O
.,O
,O
If,O
the,O
undersigned,O
is,O
not,O
a,O
broker-dealer,O
",",O
the,O
undersigned,O
represents,O
that,O
it,O
is,O
not,O
engaged,O
in,O
",",O
and,O
does,O
not,O
intend,O
to,O
engage,O
in,O
",",O
a,O
distribution,O
of,O
New,O
Notes,O
.,O
,O
If,O
the,O
undersigned,O
is,O
a,O
broker-dealer,O
holding,O
Old,O
Notes,O
that,O
will,O
receive,O
New,O
Notes,O
",",O
the,O
undersigned,O
represents,O
that,O
the,O
Old,O
Notes,O
to,O
be,O
exchanged,O
for,O
the,O
New,O
Notes,O
were,O
acquired,O
for,O
its,O
own,O
account,O
as,O
a,O
result,O
of,O
market-making,O
activities,O
or,O
other,O
trading,O
activities,O
",",O
and,O
the,O
undersigned,O
acknowledges,O
that,O
it,O
will,O
deliver,O
a,O
prospectus,O
meeting,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
in,O
connection,O
with,O
any,O
resale,O
of,O
such,O
New,O
Notes,O
received,O
in,O
respect,O
of,O
such,O
Old,O
Notes,O
pursuant,O
to,O
this,O
exchange,O
offer,O
;,O
however,O
",",O
by,O
so,O
acknowledging,O
and,O
by,O
delivering,O
such,O
a,O
prospectus,O
in,O
connection,O
with,O
the,O
exchange,O
of,O
Old,O
Notes,O
",",O
the,O
undersigned,O
will,O
not,O
be,O
deemed,O
to,O
admit,O
that,O
it,O
is,O
an,O
underwriter,O
within,O
the,O
meaning,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
.,O
,O
List,O
below,O
the,O
Old,O
Notes,O
to,O
which,O
this,O
Letter,O
relates,O
.,O
,O
If,O
the,O
space,O
provided,O
below,O
is,O
inadequate,O
",",O
the,O
Note,O
numbers,O
and,O
principal,O
amount,O
of,O
Old,O
Notes,O
should,O
be,O
listed,O
on,O
a,O
separate,O
signed,O
schedule,O
affixed,O
hereto,O
.,O
,O
IF,O
DELIVERED,O
BY,O
BOOK-ENTRY,O
TRANSFER,O
",",O
COMPLETE,O
THE,O
FOLLOWING,O
:,O
,O
Ladies,O
and,O
Gentlemen,O
:,O
,O
Upon,O
the,O
terms,O
and,O
subject,O
to,O
the,O
conditions,O
of,O
the,O
Exchange,O
Offer,O
",",O
the,O
undersigned,O
hereby,O
tenders,O
to,O
the,O
Company,O
the,O
aggregate,O
principal,O
amount,O
of,O
Old,O
Notes,O
indicated,O
above,O
.,O
,O
Subject,O
to,O
",",O
and,O
effective,O
upon,O
",",O
the,O
acceptance,O
for,O
exchange,O
of,O
the,O
Old,O
Notes,O
tendered,O
hereby,O
",",O
the,O
undersigned,O
hereby,O
sells,O
",",O
assigns,O
and,O
transfers,O
to,O
",",O
or,O
upon,O
the,O
order,O
of,O
",",O
the,O
Company,O
all,O
right,O
",",O
title,O
and,O
interest,O
in,O
and,O
to,O
such,O
Old,O
Notes,O
as,O
are,O
being,O
tendered,O
hereby,O
.,O
,O
The,O
undersigned,O
hereby,O
irrevocably,O
constitutes,O
and,O
appoints,O
the,O
Exchange,O
Agent,O
as,O
the,O
undersigned,O
s,O
true,O
and,O
lawful,O
agent,O
and,O
attorney-in-fact,O
with,O
respect,O
to,O
such,O
tendered,O
Old,O
Notes,O
",",O
with,O
full,O
power,O
of,O
substitution,O
",",O
among,O
other,O
things,O
",",O
to,O
cause,O
the,O
Old,O
Notes,O
to,O
be,O
assigned,O
",",O
transferred,O
and,O
exchanged,O
.,O
,O
The,O
undersigned,O
hereby,O
represents,O
and,O
warrants,O
that,O
the,O
undersigned,O
has,O
full,O
power,O
and,O
authority,O
to,O
tender,O
",",O
sell,O
",",O
assign,O
and,O
transfer,O
the,O
Old,O
Notes,O
tendered,O
hereby,O
",",O
and,O
to,O
acquire,O
the,O
New,O
Notes,O
issuable,O
upon,O
the,O
exchange,O
of,O
such,O
tendered,O
Old,O
Notes,O
",",O
and,O
that,O
the,O
Company,O
will,O
acquire,O
good,O
and,O
unencumbered,O
title,O
thereto,O
",",O
free,O
and,O
clear,O
of,O
all,O
liens,O
",",O
restrictions,O
",",O
charges,O
and,O
encumbrances,O
and,O
not,O
subject,O
to,O
any,O
adverse,O
claim,O
when,O
the,O
same,O
are,O
accepted,O
by,O
the,O
Company,O
.,O
,O
The,O
undersigned,O
hereby,O
further,O
represents,O
that,O
any,O
New,O
Notes,O
acquired,O
in,O
exchange,O
for,O
Old,O
Notes,O
tendered,O
hereby,O
will,O
have,O
been,O
acquired,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
of,O
the,O
person,O
receiving,O
such,O
New,O
Notes,O
",",O
whether,O
or,O
not,O
such,O
person,O
is,O
the,O
undersigned,O
",",O
that,O
neither,O
the,O
holder,O
of,O
such,O
Old,O
Notes,O
nor,O
any,O
such,O
other,O
person,O
is,O
engaged,O
in,O
",",O
or,O
intends,O
to,O
engage,O
in,O
",",O
a,O
distribution,O
of,O
such,O
New,O
Notes,O
",",O
or,O
has,O
an,O
arrangement,O
or,O
understanding,O
with,O
any,O
person,O
to,O
participate,O
in,O
the,O
distribution,O
of,O
such,O
New,O
Notes,O
or,O
in,O
the,O
exchange,O
offer,O
for,O
the,O
purpose,O
of,O
distributing,O
the,O
New,O
Notes,O
",",O
is,O
not,O
a,O
broker-dealer,O
tendering,O
Old,O
Notes,O
acquired,O
directly,O
from,O
the,O
Company,O
for,O
its,O
own,O
account,O
and,O
that,O
neither,O
the,O
holder,O
of,O
such,O
Old,O
Notes,O
nor,O
any,O
such,O
other,O
person,O
is,O
an,O
affiliate,O
",",O
as,O
defined,O
in,O
Rule,O
405,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
of,O
the,O
Company,O
or,O
",",O
if,O
such,O
holder,O
or,O
any,O
such,O
other,O
person,O
is,O
an,O
affiliate,O
",",O
that,O
such,O
holder,O
or,O
any,O
such,O
other,O
person,O
will,O
comply,O
with,O
the,O
registration,O
and,O
prospectus,O
delivery,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
to,O
the,O
extent,O
applicable,O
.,O
,O
The,O
undersigned,O
acknowledges,O
that,O
this,O
Exchange,O
Offer,O
is,O
being,O
made,O
in,O
reliance,O
on,O
interpretations,O
by,O
the,O
staff,O
of,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
the,O
Commission,O
),O
",",O
as,O
set,O
forth,O
in,O
no-action,O
letters,O
issued,O
to,O
third,O
parties,O
",",O
that,O
the,O
New,O
Notes,O
issued,O
in,O
exchange,O
for,O
the,O
Old,O
Notes,O
pursuant,O
to,O
the,O
Exchange,O
Offer,O
may,O
be,O
offered,O
for,O
resale,O
",",O
resold,O
and,O
otherwise,O
transferred,O
by,O
holders,O
thereof,O
(,O
other,O
than,O
any,O
such,O
holder,O
that,O
is,O
an,O
affiliate,O
of,O
the,O
Company,O
within,O
the,O
meaning,O
of,O
Rule,O
405,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
without,O
compliance,O
with,O
the,O
registration,O
and,O
prospectus,O
delivery,O
provisions,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
provided,O
that,O
such,O
holders,O
are,O
not,O
broker-dealers,O
",",O
such,O
New,O
Notes,O
are,O
acquired,O
in,O
the,O
ordinary,O
course,O
of,O
such,O
holders,O
business,O
and,O
such,O
holders,O
are,O
not,O
engaged,O
in,O
",",O
and,O
do,O
not,O
intend,O
to,O
engage,O
in,O
",",O
a,O
distribution,O
of,O
such,O
New,O
Notes,O
and,O
have,O
no,O
arrangement,O
with,O
any,O
person,O
to,O
participate,O
in,O
the,O
distribution,O
of,O
such,O
New,O
Notes,O
.,O
,O
However,O
",",O
the,O
Commission,O
has,O
not,O
considered,O
the,O
Exchange,O
Offer,O
in,O
the,O
context,O
of,O
a,O
no-action,O
letter,O
and,O
there,O
can,O
be,O
no,O
assurance,O
that,O
the,O
staff,O
of,O
the,O
Commission,O
would,O
make,O
a,O
similar,O
determination,O
with,O
respect,O
to,O
the,O
Exchange,O
Offer,O
as,O
in,O
other,O
circumstances,O
.,O
,O
If,O
a,O
holder,O
of,O
Old,O
Notes,O
is,O
an,O
affiliate,O
of,O
the,O
Company,O
",",O
or,O
is,O
engaged,O
in,O
or,O
intends,O
to,O
engage,O
in,O
a,O
distribution,O
of,O
the,O
New,O
Notes,O
or,O
has,O
any,O
arrangement,O
or,O
understanding,O
with,O
respect,O
to,O
the,O
distribution,O
of,O
the,O
New,O
Notes,O
to,O
be,O
acquired,O
pursuant,O
to,O
the,O
Exchange,O
Offer,O
",",O
such,O
holder,O
could,O
not,O
rely,O
on,O
the,O
applicable,O
interpretations,O
of,O
the,O
staff,O
of,O
the,O
Commission,O
and,O
must,O
comply,O
with,O
the,O
registration,O
and,O
prospectus,O
delivery,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
in,O
connection,O
with,O
any,O
resale,O
transaction,O
.,O
,O
By,O
tendering,O
Old,O
Notes,O
pursuant,O
to,O
the,O
Exchange,O
Offer,O
and,O
executing,O
this,O
Letter,O
",",O
a,O
holder,O
of,O
Old,O
Notes,O
which,O
is,O
a,O
broker-dealer,O
represents,O
and,O
agrees,O
",",O
consistent,O
with,O
certain,O
interpretive,O
letters,O
issued,O
by,O
the,O
staff,O
of,O
the,O
Division,O
of,O
Corporation,O
Finance,O
of,O
the,O
Commission,O
to,O
third,O
parties,O
",",O
and,O
",",O
whether,O
or,O
not,O
it,O
is,O
also,O
an,O
affiliate,O
of,O
the,O
Company,O
or,O
any,O
of,O
the,O
guarantors,O
within,O
the,O
meaning,O
of,O
Rule,O
405,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
that,O
such,O
Old,O
Notes,O
held,O
by,O
the,O
broker-dealer,O
are,O
held,O
only,O
as,O
a,O
nominee,O
or,O
that,O
the,O
Old,O
Notes,O
to,O
be,O
exchanged,O
for,O
the,O
New,O
Notes,O
were,O
acquired,O
by,O
it,O
for,O
its,O
own,O
account,O
as,O
a,O
result,O
of,O
market-making,O
activities,O
or,O
other,O
trading,O
activities,O
and,O
acknowledges,O
that,O
it,O
will,O
deliver,O
a,O
prospectus,O
meeting,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
in,O
connection,O
with,O
any,O
resale,O
of,O
such,O
New,O
Notes,O
received,O
in,O
respect,O
of,O
such,O
Old,O
Notes,O
pursuant,O
to,O
this,O
exchange,O
offer,O
;,O
however,O
",",O
by,O
so,O
acknowledging,O
and,O
by,O
delivering,O
such,O
a,O
prospectus,O
in,O
connection,O
with,O
the,O
exchange,O
of,O
Old,O
Notes,O
",",O
the,O
undersigned,O
will,O
not,O
be,O
deemed,O
to,O
admit,O
that,O
it,O
is,O
an,O
underwriter,O
within,O
the,O
meaning,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
The,O
undersigned,O
will,O
",",O
upon,O
request,O
",",O
execute,O
and,O
deliver,O
any,O
additional,O
documents,O
reasonably,O
deemed,O
by,O
the,O
Company,O
to,O
be,O
necessary,O
or,O
desirable,O
to,O
complete,O
the,O
sale,O
",",O
assignment,O
and,O
transfer,O
of,O
the,O
Old,O
Notes,O
tendered,O
hereby,O
.,O
,O
the,O
undersigned,O
and,O
shall,O
not,O
be,O
affected,O
by,O
",",O
and,O
shall,O
survive,O
",",O
the,O
death,O
or,O
incapacity,O
of,O
the,O
undersigned,O
.,O
,O
This,O
tender,O
may,O
be,O
withdrawn,O
only,O
in,O
accordance,O
with,O
the,O
procedures,O
set,O
forth,O
in,O
The,I-MISCELLANEOUS
Exchange,I-MISCELLANEOUS
Offer—Withdrawal,I-MISCELLANEOUS
Rights,I-MISCELLANEOUS
section,O
of,O
the,O
Prospectus,O
.,O
,O
The,O
undersigned,O
acknowledges,O
that,O
tenders,O
of,O
Old,O
Notes,O
pursuant,O
to,O
any,O
one,O
of,O
the,O
procedures,O
described,O
in,O
The,O
Exchange,O
Offer—Procedures,O
for,O
Tendering,O
in,O
the,O
Prospectus,O
and,O
in,O
the,O
instructions,O
hereto,O
will,O
",",O
upon,O
the,O
Company,O
s,O
acceptance,O
for,O
exchange,O
of,O
such,O
tendered,O
Old,O
Notes,O
",",O
constitute,O
a,O
binding,O
agreement,O
between,O
the,O
undersigned,O
and,O
the,O
Company,O
upon,O
the,O
terms,O
and,O
subject,O
to,O
the,O
conditions,O
of,O
the,O
Exchange,O
Offer,O
.,O
,O
The,O
undersigned,O
recognizes,O
that,O
",",O
under,O
certain,O
circumstances,O
set,O
forth,O
in,O
the,O
Prospectus,O
",",O
the,O
Company,O
may,O
not,O
be,O
required,O
to,O
accept,O
for,O
exchange,O
any,O
of,O
the,O
Old,O
Notes,O
tendered,O
hereby,O
.,O
,O
Unless,O
otherwise,O
indicated,O
herein,O
in,O
the,O
box,O
entitled,O
Special,O
Issuance,O
Instructions,O
below,O
",",O
please,O
deliver,O
the,O
New,O
Notes,O
(,O
and,O
",",O
if,O
applicable,O
",",O
a,O
substitute,O
Old,O
Note,O
representing,O
the,O
remaining,O
principal,O
balance,O
of,O
any,O
Old,O
Note,O
exchanged,O
only,O
in,O
part,O
),O
in,O
the,O
name,O
of,O
the,O
undersigned,O
or,O
",",O
in,O
the,O
case,O
of,O
a,O
book-entry,O
delivery,O
of,O
Old,O
Notes,O
",",O
please,O
credit,O
the,O
account,O
indicated,O
above,O
maintained,O
at,O
the,O
Book-Entry,O
Transfer,O
Facility,O
.,O
,O
Similarly,O
",",O
unless,O
otherwise,O
indicated,O
under,O
the,O
box,O
entitled,O
Special,O
Delivery,O
Instructions,O
below,O
",",O
please,O
send,O
the,O
New,O
Notes,O
(,O
and,O
",",O
if,O
applicable,O
",",O
a,O
substitute,O
Old,O
Note,O
representing,O
the,O
remaining,O
principal,O
balance,O
of,O
any,O
Old,O
Note,O
exchanged,O
only,O
in,O
part,O
),O
to,O
the,O
undersigned,O
at,O
the,O
address,O
shown,O
above,O
in,O
the,O
box,O
entitled,O
Description,O
of,O
Old,O
Notes,O
.,O
,O
All,O
authority,O
herein,O
conferred,O
or,O
agreed,O
to,O
be,O
conferred,O
in,O
this,O
Letter,O
shall,O
survive,O
the,O
death,O
or,O
incapacity,O
of,O
the,O
undersigned,O
and,O
any,O
obligation,O
of,O
the,O
undersigned,O
hereunder,O
shall,O
be,O
binding,O
upon,O
the,O
heirs,O
",",O
executors,O
",",O
administrators,O
",",O
personal,O
representatives,O
",",O
trustees,O
in,O
bankruptcy,O
",",O
legal,O
representatives,O
",",O
successors,O
and,O
assigns,O
of,O
the,O
undersigned,O
.,O
,O
Except,O
as,O
stated,O
in,O
the,O
Prospectus,O
",",O
this,O
tender,O
is,O
irrevocable,O
.,O
,O
The,O
undersigned,O
",",O
by,O
completing,O
the,O
box,O
entitled,O
Description,O
of,O
Old,O
Notes,O
on,O
page,O
3,O
and,O
signing,O
this,O
Letter,O
",",O
will,O
be,O
deemed,O
to,O
have,O
tendered,O
the,O
Old,O
Notes,O
as,O
set,O
forth,O
in,O
such,O
box,O
on,O
page,O
3,O
.,O
,O
To,O
be,O
completed,O
ONLY,O
if,O
Notes,O
for,O
Old,O
Notes,O
not,O
exchanged,O
and/or,O
New,O
Notes,O
are,O
to,O
be,O
issued,O
in,O
the,O
name,O
of,O
and,O
sent,O
to,O
someone,O
other,O
than,O
the,O
person,O
(,O
s,O
),O
whose,O
signature,O
(,O
s,O
),O
appear,O
(,O
s,O
),O
on,O
this,O
Letter,O
on,O
page,O
7,O
",",O
or,O
if,O
Old,O
Notes,O
delivered,O
by,O
book-entry,O
transfer,O
which,O
are,O
not,O
accepted,O
for,O
exchange,O
are,O
to,O
be,O
returned,O
by,O
credit,O
to,O
an,O
account,O
maintained,O
at,O
the,O
Book-Entry,O
Transfer,O
Facility,O
other,O
than,O
the,O
account,O
indicated,O
above,O
.,O
,O
Issue,O
New,O
Notes,O
and/or,O
Old,O
Notes,O
to,O
:,O
,O
(,O
Complete,O
accompanying,O
Substitute,I-MISCELLANEOUS
Form,I-MISCELLANEOUS
W-9,I-MISCELLANEOUS
),O
,O
Credit,O
unexchanged,O
Old,O
Notes,O
delivered,O
by,O
book-entry,O
transfer,O
to,O
the,O
Book-Entry,O
Transfer,O
Facility,O
account,O
set,O
forth,O
below,O
.,O
,O
To,O
be,O
completed,O
ONLY,O
if,O
Notes,O
or,O
Old,O
Notes,O
not,O
exchanged,O
and/or,O
New,O
Notes,O
are,O
to,O
be,O
sent,O
to,O
someone,O
other,O
than,O
the,O
person,O
(,O
s,O
),O
whose,O
signature,O
(,O
s,O
),O
appear,O
(,O
s,O
),O
on,O
this,O
Letter,O
above,O
or,O
to,O
such,O
person,O
(,O
s,O
),O
at,O
an,O
address,O
other,O
than,O
shown,O
in,O
the,O
box,O
entitled,O
Description,O
of,O
Old,O
Notes,O
on,O
this,O
Letter,O
above,O
.,O
,O
IMPORTANT,O
:,O
THIS,O
LETTER,O
OR,O
A,O
FACSIMILE,O
HEREOF,O
(,O
TOGETHER,O
WITH,O
THE,O
OLD,O
NOTES,O
AND,O
ALL,O
OTHER,O
REQUIRED,O
DOCUMENTS,O
OR,O
THE,O
NOTICE,O
OF,O
GUARANTEED,O
DELIVERY,O
),O
",",O
OR,O
A,O
BOOK-ENTRY,O
CONFIRMATION,O
",",O
AS,O
THE,O
CASE,O
MAY,O
BE,O
",",O
MUST,O
BE,O
RECEIVED,O
BY,O
THE,O
EXCHANGE,O
AGENT,O
PRIOR,O
TO,O
5:00,O
P.M.,O
",",O
NEW,I-MISCELLANEOUS
YORK,I-MISCELLANEOUS
TIME,I-MISCELLANEOUS
",",O
ON,O
THE,O
EXPIRATION,O
DATE,O
.,O
,O
If,O
a,O
holder,O
is,O
tendering,O
any,O
Old,O
Notes,O
",",O
this,O
letter,O
must,O
be,O
signed,O
by,O
the,O
registered,O
holder,O
(,O
s,O
),O
or,O
DTC,I-BUSINESS
participant,O
(,O
s,O
),O
exactly,O
as,O
the,O
name,O
(,O
s,O
),O
appear,O
(,O
s,O
),O
on,O
the,O
Note,O
(,O
s,O
),O
for,O
the,O
Old,O
Notes,O
or,O
by,O
any,O
person,O
(,O
s,O
),O
authorized,O
to,O
become,O
registered,O
holder,O
(,O
s,O
),O
by,O
endorsements,O
and,O
documents,O
transmitted,O
herewith,O
.,O
,O
If,O
signature,O
is,O
by,O
a,O
trustee,O
",",O
executor,O
",",O
administrator,O
",",O
guardian,O
",",O
officer,O
or,O
other,O
person,O
acting,O
in,O
a,O
fiduciary,O
or,O
representative,O
capacity,O
",",O
please,O
provide,O
the,O
following,O
information,O
.,O
,O
See,O
Instruction,O
3,O
.,O
,O
Delivery,O
of,O
this,O
Letter,O
and,O
Old,O
Notes,O
;,O
Guaranteed,O
Delivery,O
Procedures,O
.,O
,O
This,O
Letter,O
must,O
be,O
completed,O
by,O
holders,O
of,O
Old,O
Notes,O
either,O
if,O
certificates,O
are,O
to,O
be,O
forwarded,O
herewith,O
or,O
if,O
tenders,O
are,O
to,O
be,O
made,O
pursuant,O
to,O
the,O
procedures,O
for,O
delivery,O
by,O
book-entry,O
transfer,O
set,O
forth,O
in,O
The,I-MISCELLANEOUS
Exchange,I-MISCELLANEOUS
Offer—Book-Entry,I-MISCELLANEOUS
Transfer,I-MISCELLANEOUS
section,O
of,O
the,O
Prospectus,O
.,O
,O
Certificates,O
for,O
all,O
physically,O
tendered,O
Old,O
Notes,O
",",O
or,O
Book-Entry,O
Confirmation,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
as,O
well,O
as,O
a,O
properly,O
completed,O
and,O
duly,O
executed,O
Letter,O
(,O
or,O
manually,O
signed,O
facsimile,O
thereof,O
),O
",",O
with,O
any,O
required,O
signature,O
guarantees,O
",",O
and,O
any,O
other,O
documents,O
required,O
by,O
this,O
Letter,O
",",O
must,O
be,O
received,O
by,O
the,O
Exchange,O
Agent,O
at,O
its,O
address,O
set,O
forth,O
herein,O
on,O
or,O
prior,O
to,O
the,O
Expiration,O
Date,O
",",O
or,O
the,O
tendering,O
holder,O
must,O
comply,O
with,O
the,O
guaranteed,O
delivery,O
procedures,O
set,O
forth,O
below,O
.,O
,O
Old,O
Notes,O
tendered,O
hereby,O
must,O
be,O
in,O
denominations,O
of,O
principal,O
amount,O
of,O
$,O
"1,000",O
or,O
any,O
integral,O
multiple,O
thereof,O
.,O
,O
Holders,O
who,O
tender,O
their,O
Old,O
Notes,O
by,O
delivering,O
an,O
Agent,O
s,O
Message,O
do,O
not,O
need,O
to,O
submit,O
this,O
Letter,O
.,O
,O
Holders,O
whose,O
Old,O
Notes,O
are,O
not,O
immediately,O
available,O
or,O
who,O
can,O
not,O
deliver,O
their,O
Old,O
Notes,O
or,O
a,O
Book-Entry,O
Confirmation,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
and,O
all,O
other,O
required,O
documents,O
to,O
the,O
Exchange,O
Agent,O
on,O
or,O
prior,O
to,O
the,O
Expiration,O
Date,O
",",O
may,O
tender,O
their,O
Old,O
Notes,O
pursuant,O
to,O
the,O
guaranteed,O
delivery,O
procedures,O
set,O
forth,O
in,O
The,O
Exchange,O
Offer—Guaranteed,O
Delivery,O
Procedures,O
section,O
of,O
the,O
Prospectus,O
.,O
,O
Pursuant,O
to,O
such,O
procedures,O
",",O
(,O
i,O
),O
such,O
tender,O
must,O
be,O
made,O
by,O
or,O
through,O
an,O
Eligible,O
Institution,O
(,O
as,O
defined,O
below,O
),O
and,O
a,O
Notice,O
of,O
Guaranteed,O
Delivery,O
in,O
the,O
Form,O
of,O
Exhibit,O
99.2,O
to,O
the,O
Registration,O
Statement,O
of,O
which,O
the,O
Prospectus,O
forms,O
a,O
part,O
",",O
a,O
copy,O
of,O
which,O
may,O
be,O
obtained,O
from,O
the,O
Exchange,O
Agent,O
(,O
a,O
Notice,O
of,O
Guaranteed,O
Delivery,O
),O
",",O
must,O
be,O
properly,O
completed,O
and,O
duly,O
executed,O
by,O
such,O
holder,O
",",O
(,O
ii,O
),O
on,O
or,O
prior,O
to,O
5:00,O
P.M.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
the,O
Expiration,O
Date,O
",",O
the,O
Exchange,O
Agent,O
must,O
receive,O
from,O
such,O
Eligible,O
Institution,O
a,O
properly,O
completed,O
and,O
duly,O
executed,O
Letter,O
and,O
Notice,O
of,O
Guaranteed,O
Delivery,O
",",O
substantially,O
in,O
the,O
form,O
provided,O
by,O
the,O
Company,O
(,O
by,O
facsimile,O
transmission,O
",",O
mail,O
or,O
hand,O
delivery,O
),O
",",O
setting,O
forth,O
the,O
name,O
and,O
address,O
of,O
the,O
holder,O
of,O
Old,O
Notes,O
",",O
the,O
certificate,O
number,O
or,O
numbers,O
of,O
the,O
tendered,O
Old,O
Notes,O
and,O
the,O
principal,O
amount,O
of,O
Old,O
Notes,O
tendered,O
",",O
stating,O
that,O
the,O
tender,O
is,O
being,O
made,O
thereby,O
and,O
guaranteeing,O
that,O
within,O
three,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
(,O
NYSE,I-BUSINESS
),O
trading,O
days,O
after,O
the,O
Expiration,O
Date,O
",",O
the,O
certificates,O
for,O
all,O
physically,O
tendered,O
Old,O
Notes,O
",",O
in,O
proper,O
form,O
for,O
transfer,O
",",O
or,O
a,O
Book-Entry,O
Confirmation,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
as,O
well,O
as,O
all,O
other,O
documents,O
required,O
by,O
this,O
Letter,O
will,O
be,O
deposited,O
by,O
the,O
Eligible,O
Institution,O
with,O
the,O
Exchange,O
Agent,O
",",O
and,O
(,O
iii,O
),O
the,O
certificates,O
for,O
all,O
physically,O
tendered,O
Old,O
Notes,O
",",O
in,O
proper,O
form,O
for,O
transfer,O
",",O
or,O
a,O
Book-Entry,O
Confirmation,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
as,O
well,O
as,O
all,O
other,O
documents,O
required,O
by,O
this,O
Letter,O
(,O
properly,O
completed,O
and,O
duly,O
executed,O
),O
",",O
must,O
be,O
received,O
by,O
the,O
Exchange,O
Agent,O
within,O
three,O
NYSE,I-BUSINESS
trading,O
days,O
after,O
the,O
Expiration,O
Date,O
.,O
,O
The,O
method,O
of,O
delivery,O
of,O
this,O
Letter,O
",",O
certificates,O
for,O
the,O
Old,O
Notes,O
or,O
a,O
Book-Entry,O
Confirmation,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
and,O
all,O
other,O
required,O
documents,O
is,O
at,O
the,O
election,O
and,O
risk,O
of,O
the,O
tendering,O
holders,O
",",O
but,O
the,O
delivery,O
will,O
be,O
deemed,O
made,O
only,O
when,O
actually,O
received,O
or,O
confirmed,O
by,O
the,O
Exchange,O
Agent,O
.,O
,O
If,O
Old,O
Notes,O
are,O
sent,O
by,O
mail,O
",",O
it,O
is,O
recommended,O
that,O
the,O
mailing,O
be,O
made,O
by,O
registered,O
mail,O
",",O
properly,O
insured,O
",",O
with,O
return,O
receipt,O
requested,O
",",O
and,O
that,O
such,O
mailing,O
be,O
made,O
sufficiently,O
in,O
advance,O
of,O
the,O
Expiration,O
Date,O
to,O
permit,O
delivery,O
to,O
the,O
Exchange,O
Agent,O
prior,O
to,O
5:00,O
p.m.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
the,O
Expiration,O
Date,O
.,O
,O
Instead,O
of,O
delivery,O
by,O
mail,O
",",O
it,O
is,O
recommended,O
that,O
the,O
holder,O
use,O
an,O
overnight,O
or,O
hand,O
delivery,O
service,O
.,O
,O
In,O
all,O
cases,O
",",O
sufficient,O
time,O
should,O
be,O
allowed,O
for,O
timely,O
delivery,O
.,O
,O
See,O
The,O
Exchange,O
Offer,O
section,O
of,O
the,O
Prospectus,O
.,O
,O
Partial,O
Tenders,O
(,O
Not,O
Applicable,O
to,O
Holders,O
of,O
Old,O
Notes,O
Who,O
Tender,O
by,O
Book-entry,O
Transfer,O
),O
.,O
,O
If,O
less,O
than,O
the,O
entire,O
principal,O
amount,O
of,O
any,O
submitted,O
Old,O
Note,O
is,O
to,O
be,O
tendered,O
",",O
the,O
tendering,O
holder,O
(,O
s,O
),O
should,O
fill,O
in,O
the,O
aggregate,O
principal,O
amount,O
to,O
be,O
tendered,O
in,O
the,O
box,O
above,O
entitled,O
Description,O
of,O
Old,O
Notes,O
Principal,O
Amount,O
Tendered,O
.,O
,O
A,O
reissued,O
Note,O
representing,O
the,O
balance,O
of,O
nontendered,O
principal,O
of,O
any,O
submitted,O
Old,O
Notes,O
will,O
be,O
sent,O
to,O
such,O
tendering,O
holder,O
",",O
unless,O
otherwise,O
provided,O
in,O
the,O
appropriate,O
box,O
on,O
this,O
Letter,O
",",O
promptly,O
after,O
the,O
Expiration,O
Date,O
.,O
,O
THE,O
ENTIRE,O
PRINCIPAL,O
AMOUNT,O
OF,O
ANY,O
OLD,O
NOTES,O
DELIVERED,O
TO,O
THE,O
EXCHANGE,O
AGENT,O
WILL,O
BE,O
DEEMED,O
TO,O
HAVE,O
BEEN,O
TENDERED,O
UNLESS,O
OTHERWISE,O
INDICATED,O
.,O
,O
Signatures,O
on,O
this,O
Letter,O
;,O
Bond,O
Powers,O
and,O
Endorsement,O
;,O
Guarantee,O
of,O
Signatures,O
.,O
,O
the,O
Notes,O
without,O
any,O
change,O
whatsoever,O
.,O
,O
If,O
this,O
Letter,O
is,O
signed,O
by,O
a,O
participant,O
in,O
DTC,I-BUSINESS
",",O
the,O
signature,O
must,O
correspond,O
with,O
the,O
name,O
as,O
it,O
appears,O
on,O
the,O
security,O
position,O
listing,O
as,O
the,O
owner,O
of,O
the,O
Old,O
Notes,O
.,O
,O
If,O
any,O
tendered,O
Old,O
Notes,O
are,O
owned,O
of,O
record,O
by,O
two,O
or,O
more,O
joint,O
owners,O
",",O
all,O
such,O
owners,O
must,O
sign,O
this,O
Letter,O
.,O
,O
If,O
any,O
tendered,O
Old,O
Notes,O
are,O
registered,O
in,O
different,O
names,O
on,O
several,O
Old,O
Notes,O
",",O
it,O
will,O
be,O
necessary,O
to,O
complete,O
",",O
sign,O
and,O
submit,O
as,O
many,O
separate,O
copies,O
of,O
this,O
Letter,O
as,O
there,O
are,O
different,O
registrations,O
of,O
Old,O
Notes,O
.,O
,O
When,O
this,O
Letter,O
is,O
signed,O
by,O
the,O
registered,O
holder,O
of,O
the,O
Old,O
Notes,O
specified,O
herein,O
and,O
tendered,O
hereby,O
",",O
no,O
endorsements,O
of,O
the,O
submitted,O
Old,O
Notes,O
or,O
separate,O
bond,O
powers,O
are,O
required,O
.,O
,O
If,O
",",O
however,O
",",O
the,O
New,O
Notes,O
are,O
to,O
be,O
issued,O
",",O
or,O
any,O
untendered,O
Old,O
Notes,O
are,O
to,O
be,O
reissued,O
",",O
to,O
a,O
person,O
other,O
than,O
the,O
registered,O
holder,O
",",O
then,O
endorsements,O
of,O
any,O
Old,O
Notes,O
transmitted,O
hereby,O
or,O
separate,O
bond,O
powers,O
are,O
required,O
.,O
,O
Signatures,O
on,O
such,O
Old,O
Notes,O
or,O
bond,O
power,O
must,O
be,O
guaranteed,O
by,O
an,O
Eligible,O
Institution,O
.,O
,O
If,O
this,O
Letter,O
is,O
signed,O
by,O
a,O
person,O
other,O
than,O
the,O
registered,O
holder,O
of,O
any,O
Old,O
Notes,O
specified,O
herein,O
",",O
such,O
Notes,O
must,O
be,O
endorsed,O
or,O
accompanied,O
by,O
appropriate,O
bond,O
powers,O
",",O
in,O
either,O
case,O
signed,O
exactly,O
as,O
the,O
name,O
of,O
the,O
registered,O
holder,O
appears,O
on,O
the,O
Old,O
Notes,O
(,O
or,O
security,O
position,O
listing,O
),O
and,O
the,O
signatures,O
on,O
such,O
Old,O
Notes,O
or,O
bond,O
power,O
must,O
be,O
guaranteed,O
by,O
an,O
Eligible,O
Institution,O
.,O
,O
If,O
this,O
Letter,O
or,O
any,O
Old,O
Notes,O
or,O
bond,O
powers,O
are,O
signed,O
by,O
trustees,O
",",O
executors,O
",",O
administrators,O
",",O
guardians,O
",",O
attorneys-in-fact,O
",",O
officers,O
of,O
corporations,O
or,O
others,O
acting,O
in,O
a,O
fiduciary,O
or,O
representative,O
capacity,O
",",O
such,O
persons,O
should,O
so,O
indicate,O
when,O
signing,O
",",O
and,O
",",O
unless,O
waived,O
by,O
the,O
Company,O
",",O
must,O
submit,O
proper,O
evidence,O
satisfactory,O
to,O
the,O
Company,O
of,O
their,O
authority,O
to,O
so,O
act,O
.,O
,O
Endorsements,O
on,O
Old,O
Notes,O
or,O
signatures,O
on,O
bond,O
powers,O
required,O
by,O
this,O
Instruction,O
3,O
must,O
be,O
guaranteed,O
by,O
a,O
firm,O
or,O
other,O
entity,O
identified,O
in,O
Rule,O
17Ad-15,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
as,O
an,O
eligible,O
guarantor,O
institution,O
",",O
including,O
(,O
as,O
such,O
terms,O
are,O
defined,O
therein,O
),O
(,O
i,O
),O
a,O
bank,O
",",O
(,O
ii,O
),O
broker,O
",",O
dealer,O
",",O
municipal,O
securities,O
broker,O
or,O
dealer,O
or,O
government,O
securities,O
broker,O
or,O
dealer,O
",",O
(,O
iii,O
),O
credit,O
union,O
",",O
(,O
iv,O
),O
a,O
national,O
securities,O
exchange,O
",",O
registered,O
securities,O
association,O
or,O
clearing,O
agency,O
",",O
or,O
(,O
v,O
),O
a,O
savings,O
association,O
that,O
is,O
a,O
participant,O
in,O
a,O
Securities,O
Transfer,O
Association,O
(,O
an,O
Eligible,O
Institution,O
),O
.,O
,O
Signatures,O
on,O
this,O
Letter,O
need,O
not,O
be,O
guaranteed,O
by,O
an,O
Eligible,O
Institution,O
",",O
provided,O
the,O
Old,O
Notes,O
are,O
tendered,O
:,O
(,O
i,O
),O
by,O
a,O
registered,O
holder,O
of,O
Old,O
Notes,O
(,O
which,O
term,O
",",O
for,O
purposes,O
of,O
the,O
Exchange,O
Offer,O
",",O
includes,O
any,O
participant,O
in,O
the,O
Book-Entry,O
Transfer,O
Facility,O
system,O
whose,O
name,O
appears,O
on,O
a,O
security,O
position,O
listing,O
as,O
the,O
holder,O
of,O
such,O
Old,O
Notes,O
),O
tendered,O
who,O
has,O
not,O
completed,O
the,O
box,O
entitled,O
Special,O
Issuance,O
Instructions,O
or,O
Special,O
Delivery,O
Instructions,O
on,O
this,O
Letter,O
",",O
or,O
(,O
ii,O
),O
for,O
the,O
account,O
of,O
an,O
Eligible,O
Institution,O
.,O
,O
Special,O
Issuance,O
and,O
Delivery,O
Instructions,O
.,O
,O
Tendering,O
holders,O
of,O
Old,O
Notes,O
should,O
indicate,O
in,O
the,O
applicable,O
box,O
the,O
name,O
and,O
address,O
to,O
which,O
New,O
Notes,O
issued,O
pursuant,O
to,O
the,O
Exchange,O
Offer,O
and/or,O
substitute,O
Notes,O
evidencing,O
Old,O
Notes,O
not,O
exchanged,O
are,O
to,O
be,O
issued,O
or,O
sent,O
",",O
if,O
different,O
from,O
the,O
name,O
or,O
address,O
of,O
the,O
person,O
signing,O
this,O
Letter,O
.,O
,O
In,O
the,O
case,O
of,O
issuance,O
in,O
a,O
different,O
name,O
",",O
the,O
employer,O
identification,O
or,O
social,O
security,O
number,O
of,O
the,O
person,O
named,O
must,O
also,O
be,O
indicated,O
.,O
,O
A,O
holder,O
of,O
Old,O
Notes,O
tendering,O
Old,O
Notes,O
by,O
book-entry,O
transfer,O
may,O
request,O
that,O
Old,O
Notes,O
not,O
exchanged,O
be,O
credited,O
to,O
such,O
account,O
maintained,O
at,O
the,O
Book-Entry,O
Transfer,O
Facility,O
as,O
such,O
holder,O
of,O
Old,O
Notes,O
may,O
designate,O
hereon,O
.,O
,O
If,O
no,O
such,O
instructions,O
are,O
given,O
",",O
such,O
Old,O
Notes,O
not,O
exchanged,O
will,O
be,O
returned,O
to,O
the,O
name,O
or,O
address,O
of,O
the,O
person,O
signing,O
this,O
Letter,O
.,O
,O
Tax,O
Identification,O
Number,O
.,O
,O
Federal,O
income,O
tax,O
law,O
generally,O
requires,O
that,O
a,O
tendering,O
holder,O
whose,O
Old,O
Notes,O
are,O
accepted,O
for,O
exchange,O
must,O
provide,O
the,O
Company,O
(,O
as,O
payor,O
),O
with,O
such,O
Holder,O
s,O
correct,O
Taxpayer,O
Identification,O
Number,O
(,O
TIN,O
),O
on,O
Substitute,I-MISCELLANEOUS
Form,I-MISCELLANEOUS
W-9,I-MISCELLANEOUS
below,O
",",O
which,O
",",O
in,O
the,O
case,O
of,O
a,O
tendering,O
holder,O
who,O
is,O
an,O
individual,O
",",O
is,O
his,O
or,O
her,O
social,O
security,O
number,O
.,O
,O
If,O
the,O
Company,O
is,O
not,O
provided,O
with,O
the,O
current,O
TIN,O
or,O
an,O
adequate,O
basis,O
for,O
an,O
exemption,O
",",O
such,O
tendering,O
holder,O
may,O
be,O
subject,O
to,O
a,O
$,O
50,O
penalty,O
imposed,O
by,O
the,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
.,O
,O
In,O
addition,O
",",O
delivery,O
of,O
New,O
Notes,O
to,O
such,O
tendering,O
holder,O
may,O
be,O
subject,O
to,O
backup,O
withholding,O
in,O
an,O
amount,O
equal,O
to,O
28,O
%,O
of,O
all,O
reportable,O
payments,O
made,O
after,O
the,O
exchange,O
.,O
,O
If,O
withholding,O
results,O
in,O
an,O
overpayment,O
of,O
taxes,O
",",O
a,O
refund,O
may,O
be,O
obtained,O
.,O
,O
Exempt,O
holders,O
of,O
Old,O
Notes,O
(,O
including,O
",",O
among,O
others,O
",",O
all,O
corporations,O
and,O
certain,O
foreign,O
individuals,O
),O
are,O
not,O
subject,O
to,O
these,O
backup,O
withholding,O
and,O
reporting,O
requirements,O
.,O
,O
Exempt,O
holders,O
",",O
other,O
than,O
foreign,O
individuals,O
",",O
should,O
furnish,O
their,O
TIN,O
",",O
write,O
Exempt,O
on,O
the,O
face,O
of,O
the,O
Substitute,I-MISCELLANEOUS
Form,I-MISCELLANEOUS
W-9,I-MISCELLANEOUS
and,O
sign,O
",",O
date,O
and,O
return,O
the,O
form,O
to,O
the,O
Exchange,O
Agent,O
.,O
,O
See,O
the,O
enclosed,O
Guidelines,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Certification,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Taxpayer,I-MISCELLANEOUS
identification,I-MISCELLANEOUS
Number,I-MISCELLANEOUS
on,O
Substitute,I-MISCELLANEOUS
Form,I-MISCELLANEOUS
W-9,I-MISCELLANEOUS
(,O
the,O
W-9,I-MISCELLANEOUS
Guidelines,I-MISCELLANEOUS
),O
for,O
additional,O
instructions,O
.,O
,O
withholding,O
",",O
such,O
holder,O
must,O
give,O
the,O
Exchange,O
Agent,O
a,O
completed,O
Form,I-MISCELLANEOUS
W-8,I-MISCELLANEOUS
Certificate,B-MISCELLANEOUS
of,I-MISCELLANEOUS
Foreign,I-MISCELLANEOUS
Status,I-MISCELLANEOUS
",",O
a,O
form,O
of,O
which,O
is,O
included,O
on,O
page,O
13,O
.,O
,O
To,O
prevent,O
backup,O
withholding,O
",",O
each,O
tendering,O
holder,O
of,O
Old,O
Notes,O
must,O
provide,O
its,O
correct,O
TIN,O
by,O
completing,O
the,O
Substitute,I-MISCELLANEOUS
Form,I-MISCELLANEOUS
W-9,I-MISCELLANEOUS
on,O
page,O
12,O
",",O
certifying,O
",",O
under,O
penalties,O
of,O
perjury,O
",",O
that,O
the,O
TIN,O
provided,O
is,O
correct,O
(,O
or,O
that,O
such,O
holder,O
is,O
awaiting,O
a,O
TIN,O
),O
",",O
and,O
that,O
(,O
i,O
),O
the,O
holder,O
is,O
exempt,O
from,O
backup,O
withholding,O
",",O
(,O
ii,O
),O
the,O
holder,O
has,O
not,O
been,O
notified,O
by,O
the,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
that,O
such,O
holder,O
is,O
subject,O
to,O
a,O
backup,O
withholding,O
as,O
a,O
result,O
of,O
a,O
failure,O
to,O
report,O
all,O
interest,O
or,O
dividends,O
or,O
(,O
iii,O
),O
the,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
has,O
notified,O
the,O
holder,O
that,O
such,O
holder,O
is,O
no,O
longer,O
subject,O
to,O
backup,O
withholding,O
.,O
,O
If,O
the,O
tendering,O
holder,O
of,O
Old,O
Notes,O
is,O
a,O
nonresident,O
alien,O
or,O
foreign,O
entity,O
not,O
subject,O
to,O
backup,O
withholding,O
",",O
such,O
holder,O
must,O
give,O
the,O
Exchange,O
Agent,O
a,O
completed,O
Form,I-MISCELLANEOUS
W-8,I-MISCELLANEOUS
",",O
Certificate,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Foreign,I-MISCELLANEOUS
Status,I-MISCELLANEOUS
.,O
,O
These,O
forms,O
may,O
be,O
obtained,O
from,O
the,O
Exchange,O
Agent,O
.,O
,O
If,O
the,O
Old,O
Notes,O
are,O
in,O
more,O
than,O
one,O
name,O
or,O
are,O
not,O
in,O
the,O
name,O
of,O
the,O
actual,O
owner,O
",",O
such,O
holder,O
should,O
consult,O
the,O
W-9,I-MISCELLANEOUS
Guidelines,I-MISCELLANEOUS
for,O
information,O
on,O
which,O
TIN,O
to,O
report,O
.,O
,O
If,O
such,O
holder,O
does,O
not,O
have,O
a,O
TIN,O
",",O
such,O
holder,O
should,O
consult,O
the,O
W-9,I-MISCELLANEOUS
Guidelines,I-MISCELLANEOUS
for,O
instructions,O
on,O
applying,O
for,O
a,O
TIN,O
",",O
check,O
the,O
box,O
in,O
Part,O
2,O
of,O
the,O
Substitute,I-MISCELLANEOUS
Form,I-MISCELLANEOUS
W-9,I-MISCELLANEOUS
and,O
write,O
applied,O
for,O
in,O
lieu,O
of,O
its,O
TIN,O
.,O
,O
Note,O
:,O
checking-this,O
box,O
and,O
writing,O
applied,O
for,O
on,O
the,O
form,O
means,O
that,O
such,O
holder,O
has,O
already,O
applied,O
for,O
a,O
TIN,O
or,O
that,O
such,O
holder,O
intends,O
to,O
apply,O
for,O
one,O
in,O
the,O
near,O
future,O
.,O
,O
If,O
the,O
box,O
in,O
Part,O
2,O
of,O
the,O
Substitute,I-MISCELLANEOUS
Form,I-MISCELLANEOUS
W-9,I-MISCELLANEOUS
is,O
checked,O
",",O
the,O
Exchange,O
Agent,O
will,O
retain,O
28,O
%,O
of,O
reportable,O
payments,O
made,O
to,O
a,O
holder,O
during,O
the,O
60-day,O
period,O
following,O
the,O
date,O
of,O
the,O
Substitute,I-MISCELLANEOUS
Form,I-MISCELLANEOUS
W-9,I-MISCELLANEOUS
.,O
,O
If,O
the,O
holder,O
furnishes,O
the,O
Exchange,O
Agent,O
with,O
his,O
or,O
her,O
TIN,O
within,O
60,O
days,O
of,O
the,O
Substitute,I-MISCELLANEOUS
Form,I-MISCELLANEOUS
W-9,I-MISCELLANEOUS
",",O
the,O
Exchange,O
Agent,O
will,O
remit,O
such,O
amounts,O
retained,O
during,O
such,O
60-day,O
to,O
such,O
holder,O
and,O
no,O
further,O
amounts,O
will,O
be,O
retained,O
or,O
withheld,O
from,O
payments,O
made,O
to,O
the,O
holder,O
thereafter,O
.,O
,O
If,O
",",O
however,O
",",O
such,O
holder,O
does,O
not,O
provide,O
its,O
TIN,O
to,O
the,O
Exchange,O
Agent,O
within,O
such,O
60-day,O
period,O
",",O
the,O
Exchange,O
Agent,O
will,O
remit,O
such,O
previously,O
withheld,O
amounts,O
to,O
the,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
as,O
backup,O
withholding,O
and,O
will,O
withhold,O
28,O
%,O
of,O
all,O
reportable,O
payments,O
to,O
the,O
holder,O
thereafter,O
until,O
such,O
holder,O
furnishes,O
its,O
TIN,O
to,O
the,O
Exchange,O
Agent,O
.,O
,O
The,O
Company,O
will,O
pay,O
all,O
transfer,O
taxes,O
",",O
if,O
any,O
",",O
applicable,O
to,O
the,O
exchange,O
of,O
Old,O
Notes,O
pursuant,O
to,O
the,O
Exchange,O
Offer,O
.,O
,O
If,O
",",O
however,O
",",O
New,O
Notes,O
and/or,O
substitute,O
Old,O
Notes,O
not,O
exchanged,O
are,O
to,O
be,O
delivered,O
to,O
",",O
or,O
are,O
to,O
be,O
registered,O
or,O
issued,O
in,O
the,O
name,O
of,O
",",O
any,O
person,O
other,O
than,O
the,O
registered,O
holder,O
of,O
the,O
Old,O
Notes,O
tendered,O
hereby,O
",",O
or,O
if,O
tendered,O
Old,O
Notes,O
are,O
registered,O
in,O
the,O
name,O
of,O
any,O
person,O
other,O
than,O
the,O
person,O
signing,O
this,O
Letter,O
",",O
or,O
if,O
a,O
transfer,O
tax,O
is,O
imposed,O
for,O
any,O
reason,O
other,O
than,O
the,O
exchange,O
of,O
Old,O
Notes,O
pursuant,O
to,O
the,O
Exchange,O
Offer,O
",",O
the,O
amount,O
of,O
any,O
such,O
transfer,O
taxes,O
(,O
whether,O
imposed,O
on,O
the,O
registered,O
holder,O
or,O
any,O
other,O
persons,O
),O
will,O
be,O
payable,O
by,O
the,O
tendering,O
holder,O
.,O
,O
If,O
satisfactory,O
evidence,O
of,O
payment,O
of,O
such,O
taxes,O
or,O
exemption,O
therefrom,O
is,O
not,O
submitted,O
herewith,O
",",O
the,O
amount,O
of,O
such,O
transfer,O
taxes,O
will,O
be,O
billed,O
directly,O
to,O
such,O
tendering,O
holder,O
.,O
,O
EXCEPT,O
AS,O
PROVIDED,O
IN,O
THIS,O
INSTRUCTION,O
6,O
",",O
IT,O
IS,O
NOT,O
NECESSARY,O
FOR,O
TRANSFER,O
TAX,O
STAMPS,O
TO,O
BE,O
AFFIXED,O
TO,O
THE,O
OLD,O
NOTES,O
SPECIFIED,O
IN,O
THIS,O
LETTER,O
.,O
,O
Waiver,O
of,O
Conditions,O
.,O
,O
The,O
Company,O
reserves,O
the,O
absolute,O
right,O
to,O
waive,O
satisfaction,O
of,O
any,O
or,O
all,O
conditions,O
enumerated,O
in,O
the,O
Prospectus,O
.,O
,O
No,O
Conditional,O
Tenders,O
.,O
,O
No,O
alternative,O
",",O
conditional,O
",",O
irregular,O
or,O
contingent,O
tenders,O
will,O
be,O
accepted,O
.,O
,O
All,O
tendering,O
holders,O
of,O
Old,O
Notes,O
",",O
by,O
execution,O
of,O
this,O
Letter,O
",",O
shall,O
waive,O
any,O
right,O
to,O
receive,O
notice,O
of,O
the,O
acceptance,O
of,O
their,O
Old,O
Notes,O
for,O
exchange,O
.,O
,O
Neither,O
the,O
Company,O
",",O
the,O
Exchange,O
Agent,O
nor,O
any,O
other,O
person,O
is,O
obligated,O
to,O
give,O
notice,O
of,O
any,O
defect,O
or,O
irregularity,O
with,O
respect,O
to,O
any,O
tender,O
of,O
Old,O
Notes,O
nor,O
shall,O
any,O
of,O
them,O
incur,O
any,O
liability,O
for,O
failure,O
to,O
give,O
any,O
such,O
notice,O
.,O
,O
Mutilated,O
",",O
Lost,O
",",O
Stolen,O
or,O
Destroyed,O
Old,O
Notes,O
.,O
,O
Any,O
holder,O
whose,O
Old,O
Notes,O
have,O
been,O
mutilated,O
",",O
lost,O
",",O
stolen,O
or,O
destroyed,O
should,O
contact,O
the,O
Exchange,O
Agent,O
at,O
the,O
address,O
indicated,O
above,O
for,O
further,O
instructions,O
.,O
,O
This,O
Letter,O
and,O
related,O
documents,O
can,O
not,O
be,O
processed,O
until,O
the,O
procedures,O
for,O
replacing,O
mutilated,O
",",O
lost,O
",",O
stolen,O
or,O
destroyed,O
certificates,O
have,O
been,O
followed,O
.,O
,O
Tenders,O
of,O
Old,O
Notes,O
may,O
be,O
withdrawn,O
at,O
any,O
time,O
prior,O
to,O
5:00,O
P.M.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
times,I-MISCELLANEOUS
",",O
on,O
the,O
Expiration,O
Date,O
.,O
,O
For,O
a,O
withdrawal,O
of,O
a,O
tender,O
of,O
Old,O
Notes,O
to,O
be,O
effective,O
",",O
a,O
written,O
notice,O
of,O
withdrawal,O
must,O
be,O
received,O
by,O
the,O
Exchange,O
Agent,O
at,O
the,O
address,O
on,O
page,O
1,O
prior,O
to,O
5:00,O
P.M.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
the,O
Expiration,O
Date,O
.,O
,O
register,O
the,O
transfer,O
of,O
such,O
Old,O
Notes,O
in,O
the,O
name,O
of,O
the,O
person,O
withdrawing,O
the,O
tender,O
and,O
(,O
v,O
),O
specifying,O
the,O
name,O
in,O
which,O
such,O
Old,O
Notes,O
are,O
registered,O
",",O
if,O
different,O
from,O
that,O
of,O
the,O
Depositor,O
.,O
,O
If,O
Old,O
Notes,O
have,O
been,O
tendered,O
pursuant,O
to,O
the,O
procedure,O
for,O
book-entry,O
transfer,O
set,O
forth,O
in,O
The,I-MISCELLANEOUS
Exchange,I-MISCELLANEOUS
Offer—Book-Entry,I-MISCELLANEOUS
Transfer,I-MISCELLANEOUS
section,O
of,O
the,O
Prospectus,O
",",O
any,O
notice,O
of,O
withdrawal,O
must,O
specify,O
the,O
name,O
and,O
number,O
of,O
the,O
account,O
at,O
the,O
Book-Entry,O
Transfer,O
Facility,O
to,O
be,O
credited,O
with,O
the,O
withdrawn,O
Old,O
Notes,O
and,O
otherwise,O
comply,O
with,O
the,O
procedures,O
of,O
such,O
facility,O
.,O
,O
All,O
questions,O
as,O
to,O
the,O
validity,O
",",O
form,O
and,O
eligibility,O
(,O
including,O
time,O
of,O
receipt,O
),O
of,O
such,O
notices,O
will,O
be,O
determined,O
by,O
the,O
Company,O
",",O
whose,O
determination,O
shall,O
be,O
final,O
and,O
binding,O
on,O
all,O
parties,O
.,O
,O
Any,O
Old,O
Notes,O
so,O
withdrawn,O
will,O
be,O
deemed,O
not,O
to,O
have,O
been,O
validly,O
tendered,O
for,O
exchange,O
for,O
purposes,O
of,O
the,O
Exchange,O
Offer,O
and,O
no,O
New,O
Notes,O
will,O
be,O
issued,O
with,O
respect,O
thereto,O
unless,O
the,O
Old,O
Notes,O
so,O
withdrawn,O
are,O
validly,O
retendered,O
.,O
,O
Any,O
Old,O
Notes,O
that,O
have,O
been,O
tendered,O
for,O
exchange,O
but,O
which,O
are,O
not,O
exchanged,O
for,O
any,O
reason,O
will,O
be,O
returned,O
to,O
the,O
holder,O
thereof,O
without,O
cost,O
to,O
such,O
holder,O
(,O
or,O
",",O
in,O
the,O
case,O
of,O
Old,O
Notes,O
tendered,O
by,O
book-entry,O
transfer,O
into,O
the,O
Exchange,O
Agent,O
s,O
account,O
at,O
the,O
Book-Entry,O
Transfer,O
Facility,O
pursuant,O
to,O
the,O
book-entry,O
transfer,O
procedures,O
set,O
forth,O
in,O
The,O
Exchange,O
Offer—Book-Entry,O
Transfer,O
section,O
of,O
the,O
Prospectus,O
",",O
such,O
Old,O
Notes,O
will,O
be,O
credited,O
to,O
an,O
account,O
maintained,O
with,O
the,O
Book-Entry,O
Transfer,O
Facility,O
for,O
the,O
Old,O
Notes,O
),O
as,O
soon,O
as,O
practicable,O
after,O
withdrawal,O
",",O
rejection,O
of,O
tender,O
or,O
termination,O
of,O
the,O
Exchange,O
Offer,O
.,O
,O
Properly,O
withdrawn,O
Old,O
Notes,O
may,O
be,O
retendered,O
by,O
following,O
the,O
procedures,O
described,O
above,O
at,O
any,O
time,O
on,O
or,O
prior,O
to,O
5:00,O
P.M.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
the,O
Expiration,O
Date,O
.,O
,O
Requests,O
for,O
Assistance,O
or,O
Additional,O
Copies,O
.,O
,O
Questions,O
relating,O
to,O
the,O
procedure,O
for,O
tendering,O
",",O
as,O
well,O
as,O
requests,O
for,O
additional,O
copies,O
of,O
the,O
Prospectus,O
",",O
this,O
Letter,O
",",O
the,O
Notice,O
of,O
Guaranteed,O
Delivery,O
and,O
other,O
related,O
documents,O
",",O
should,O
be,O
directed,O
to,O
the,O
Exchange,O
Agent,O
",",O
at,O
the,O
address,O
and,O
telephone,O
number,O
indicated,O
on,O
page,O
1,O
.,O
,O
All,O
other,O
questions,O
should,O
be,O
addressed,O
to,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
6415,O
Idlewild,I-LOCATION
Rd.,I-LOCATION
",",O
Suite,O
109,O
",",O
Charlotte,I-LOCATION
",",O
North,I-LOCATION
Carolina,I-LOCATION
28212,O
",",O
,O
Attention,O
:,O
Stephen,I-PERSON
K.,I-PERSON
Coss,I-PERSON
.,O
,O
I,O
certify,O
under,O
penalties,O
of,O
perjury,O
that,O
a,O
taxpayer,O
identification,O
number,O
has,O
not,O
been,O
issued,O
to,O
me,O
",",O
and,O
either,O
(,O
a,O
),O
I,O
have,O
mailed,O
or,O
delivered,O
an,O
application,O
to,O
receive,O
a,O
taxpayer,O
identification,O
number,O
to,O
the,O
appropriate,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
Center,I-GOVERNMENT
or,O
Social,I-GOVERNMENT
Security,I-GOVERNMENT
Administration,I-GOVERNMENT
Office,I-GOVERNMENT
or,O
(,O
b,O
),O
I,O
intend,O
to,O
mail,O
or,O
deliver,O
an,O
application,O
in,O
the,O
near,O
future,O
.,O
,O
I,O
understand,O
that,O
if,O
I,O
do,O
not,O
provide,O
a,O
taxpayer,O
identification,O
number,O
by,O
the,O
time,O
of,O
the,O
exchange,O
",",O
twenty-eight,O
percent,O
(,O
28,O
%,O
),O
of,O
all,O
reportable,O
payments,O
made,O
to,O
me,O
thereafter,O
will,O
be,O
withheld,O
until,O
I,O
provide,O
a,O
taxpayer,O
identification,O
number,O
.,O
,O
This,O
Notice,O
of,O
Guaranteed,O
Delivery,O
",",O
or,O
one,O
substantially,O
equivalent,O
to,O
this,O
form,O
",",O
must,O
be,O
used,O
to,O
accept,O
the,O
Exchange,O
Offer,O
of,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
Company,O
),O
made,O
pursuant,O
to,O
the,O
Prospectus,O
",",O
dated,O
",",O
2010,O
(,O
the,O
Prospectus,O
),O
",",O
and,O
the,O
enclosed,O
Letter,O
of,O
Transmittal,O
(,O
the,O
Letter,O
of,O
Transmittal,O
),O
if,O
Old,O
Notes,O
are,O
not,O
immediately,O
available,O
or,O
if,O
the,O
procedure,O
for,O
book-entry,O
transfer,O
can,O
not,O
be,O
completed,O
on,O
a,O
timely,O
basis,O
or,O
time,O
will,O
not,O
permit,O
all,O
documents,O
required,O
by,O
the,O
Letter,O
of,O
Transmittal,O
to,O
reach,O
U.S.,I-BUSINESS
Bank,I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
",",O
as,O
exchange,O
agent,O
(,O
the,O
Exchange,O
Agent,O
),O
prior,O
to,O
5:00,O
P.M.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
the,O
Expiration,O
Date,O
of,O
the,O
Exchange,O
Offer,O
.,O
,O
This,O
Notice,O
of,O
Guaranteed,O
Delivery,O
may,O
be,O
delivered,O
or,O
transmitted,O
by,O
facsimile,O
transmission,O
",",O
mail,O
",",O
overnight,O
or,O
hand,O
delivery,O
to,O
the,O
Exchange,O
Agent,O
as,O
set,O
forth,O
below,O
.,O
,O
In,O
addition,O
",",O
in,O
order,O
to,O
utilize,O
the,O
guaranteed,O
delivery,O
procedure,O
to,O
tender,O
Old,O
Notes,O
pursuant,O
to,O
the,O
Exchange,O
Offer,O
",",O
a,O
completed,O
",",O
signed,O
and,O
dated,O
Letter,O
of,O
Transmittal,O
(,O
or,O
facsimile,O
thereof,O
),O
must,O
also,O
be,O
received,O
by,O
the,O
Exchange,O
Agent,O
on,O
or,O
prior,O
to,O
5:00,O
P.M.,O
",",O
New,I-MISCELLANEOUS
York,I-MISCELLANEOUS
City,I-MISCELLANEOUS
time,I-MISCELLANEOUS
",",O
on,O
the,O
Expiration,O
Date,O
.,O
,O
Capitalized,O
terms,O
not,O
defined,O
herein,O
are,O
defined,O
in,O
the,O
Prospectus,O
.,O
,O
Delivery,O
of,O
this,O
instrument,O
to,O
an,O
address,O
other,O
than,O
as,O
set,O
forth,O
above,O
",",O
or,O
transmission,O
of,O
instructions,O
via,O
facsimile,O
other,O
than,O
as,O
set,O
forth,O
above,O
",",O
will,O
not,O
constitute,O
a,O
valid,O
delivery,O
.,O
,O
Ladies,O
and,O
Gentlemen,O
:,O
,O
Upon,O
the,O
terms,O
and,O
conditions,O
set,O
forth,O
in,O
the,O
Prospectus,O
and,O
the,O
accompanying,O
Letter,O
of,O
Transmittal,O
",",O
the,O
undersigned,O
hereby,O
tenders,O
to,O
the,O
Company,O
the,O
principal,O
amount,O
of,O
Old,O
Notes,O
set,O
forth,O
below,O
",",O
pursuant,O
to,O
the,O
guaranteed,O
delivery,O
procedure,O
described,O
in,O
The,O
Exchange,O
Offer—Guaranteed,O
Delivery,O
Procedures,O
section,O
of,O
the,O
Prospectus,O
.,O
,O
The,O
undersigned,O
",",O
a,O
firm,O
that,O
is,O
a,O
member,O
firm,O
of,O
a,O
registered,O
national,O
securities,O
exchange,O
or,O
of,O
the,O
Financial,I-BUSINESS
Industry,I-BUSINESS
Regulatory,I-BUSINESS
Authority,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
commercial,O
bank,O
or,O
trust,O
company,O
having,O
an,O
office,O
correspondent,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
or,O
any,O
eligible,O
guarantor,O
institution,O
within,O
the,O
meaning,O
of,O
Rule,O
17Ad-15,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
hereby,O
guarantees,O
to,O
deliver,O
to,O
the,O
Exchange,O
Agent,O
",",O
at,O
its,O
address,O
set,O
forth,O
above,O
",",O
the,O
Old,O
Notes,O
described,O
above,O
",",O
in,O
proper,O
form,O
for,O
transfer,O
",",O
together,O
with,O
a,O
properly,O
completed,O
and,O
duly,O
executed,O
Letter,O
of,O
Transmittal,O
(,O
or,O
facsimile,O
thereof,O
),O
",",O
with,O
any,O
required,O
signature,O
guarantees,O
",",O
and,O
any,O
other,O
documents,O
required,O
by,O
the,O
Letter,O
of,O
Transmittal,O
within,O
three,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
trading,O
days,O
after,O
the,O
Expiration,O
Date,O
.,O
,O
To,O
Our,O
Clients,O
:,O
,O
We,O
are,O
enclosing,O
herewith,O
a,O
Prospectus,O
",",O
dated,O
",",O
2010,O
of,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
a,O
related,O
Letter,O
of,O
Transmittal,O
relating,O
to,O
the,O
offer,O
(,O
the,O
Exchange,O
Offer,O
),O
by,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
Company,O
),O
to,O
exchange,O
up,O
to,O
$,O
"210,000,000",O
aggregate,O
principal,O
amount,O
of,O
its,O
new,O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2018,O
",",O
Series,O
B,O
(,O
the,O
New,O
Notes,O
),O
",",O
which,O
have,O
been,O
registered,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
for,O
up,O
to,O
$,O
"210,000,000",O
aggregate,O
principal,O
amount,O
of,O
its,O
new,O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2018,O
",",O
Series,O
A,O
(,O
the,O
Old,O
Notes,O
),O
upon,O
the,O
terms,O
and,O
subject,O
to,O
the,O
conditions,O
set,O
forth,O
in,O
the,O
Prospectus,O
",",O
dated,O
",",O
2010,O
",",O
and,O
the,O
related,O
Letter,O
of,O
Transmittal,O
.,O
,O
PLEASE,O
NOTE,O
THAT,O
THE,O
EXCHANGE,O
OFFER,O
WILL,O
EXPIRE,O
AT,O
5:00,O
P.M.,O
",",O
NEW,I-MISCELLANEOUS
YORK,I-MISCELLANEOUS
CITY,I-MISCELLANEOUS
TIME,I-MISCELLANEOUS
",",O
ON,O
",",O
2010,O
",",O
UNLESS,O
EXTENDED,O
BY,O
THE,O
COMPANY,O
IN,O
ITS,O
SOLE,O
DISCRETION,O
.,O
,O
THE,O
EXCHANGE,O
OFFER,O
IS,O
NOT,O
CONDITIONED,O
UPON,O
ANY,O
MINIMUM,O
NUMBER,O
OF,O
OLD,O
NOTES,O
BEING,O
TENDERED,O
.,O
,O
We,O
are,O
the,O
holder,O
of,O
record,O
of,O
Old,O
Notes,O
held,O
by,O
us,O
for,O
your,O
account,O
.,O
,O
A,O
tender,O
of,O
such,O
Old,O
Notes,O
can,O
be,O
made,O
only,O
by,O
us,O
as,O
the,O
record,O
holder,O
and,O
pursuant,O
to,O
your,O
instructions,O
.,O
,O
The,O
Letter,O
of,O
Transmittal,O
is,O
furnished,O
to,O
you,O
for,O
your,O
information,O
only,O
and,O
can,O
not,O
be,O
used,O
by,O
you,O
to,O
tender,O
Old,O
Notes,O
held,O
by,O
us,O
for,O
your,O
account,O
.,O
,O
We,O
request,O
instructions,O
as,O
to,O
whether,O
you,O
wish,O
to,O
tender,O
any,O
or,O
all,O
of,O
the,O
Old,O
Notes,O
held,O
by,O
us,O
for,O
your,O
account,O
pursuant,O
to,O
the,O
terms,O
and,O
conditions,O
of,O
the,O
Exchange,O
Offer,O
.,O
,O
Please,O
so,O
instruct,O
us,O
by,O
completing,O
",",O
executing,O
and,O
returning,O
to,O
us,O
the,O
enclosed,O
Instruction,O
to,O
Registered,O
Holder,O
from,O
Beneficial,O
Owner,O
enclosed,O
herewith,O
.,O
,O
We,O
urge,O
you,O
to,O
read,O
carefully,O
the,O
Prospectus,O
and,O
the,O
Letter,O
of,O
Transmittal,O
before,O
instructing,O
us,O
to,O
tender,O
your,O
Old,O
Notes,O
.,O
,O
We,O
also,O
request,O
that,O
you,O
confirm,O
with,O
such,O
instruction,O
form,O
that,O
we,O
may,O
on,O
your,O
behalf,O
make,O
the,O
representations,O
contained,O
in,O
the,O
Letter,O
of,O
Transmittal,O
.,O
,O
Pursuant,O
to,O
the,O
Letter,O
of,O
Transmittal,O
",",O
each,O
holder,O
of,O
Old,O
Notes,O
will,O
represent,O
to,O
the,O
Company,O
that,O
(,O
i,O
),O
that,O
any,O
New,O
Notes,O
acquired,O
in,O
exchange,O
for,O
Old,O
Notes,O
tendered,O
in,O
the,O
Exchange,O
Offer,O
hereby,O
will,O
have,O
been,O
acquired,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
of,O
the,O
person,O
receiving,O
such,O
New,O
Notes,O
",",O
whether,O
or,O
not,O
such,O
person,O
is,O
the,O
undersigned,O
",",O
(,O
ii,O
),O
neither,O
the,O
holder,O
of,O
such,O
Old,O
Notes,O
nor,O
any,O
such,O
other,O
person,O
is,O
engaged,O
in,O
",",O
or,O
intends,O
to,O
engage,O
in,O
",",O
a,O
distribution,O
of,O
such,O
New,O
Notes,O
",",O
or,O
has,O
an,O
arrangement,O
or,O
understanding,O
with,O
any,O
person,O
to,O
participate,O
in,O
the,O
distribution,O
of,O
such,O
New,O
Notes,O
or,O
in,O
the,O
exchange,O
offer,O
for,O
the,O
purpose,O
of,O
distributing,O
the,O
New,O
Notes,O
",",O
is,O
not,O
a,O
broker-dealer,O
tendering,O
Old,O
Notes,O
acquired,O
directly,O
from,O
the,O
Company,O
for,O
its,O
own,O
account,O
",",O
and,O
(,O
iii,O
),O
neither,O
the,O
holder,O
of,O
such,O
Old,O
Notes,O
nor,O
any,O
such,O
other,O
person,O
is,O
an,O
affiliate,O
",",O
as,O
defined,O
in,O
Rule,O
405,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
of,O
the,O
Company,O
or,O
",",O
if,O
such,O
holder,O
or,O
any,O
such,O
other,O
person,O
is,O
an,O
affiliate,O
",",O
that,O
such,O
holder,O
or,O
any,O
such,O
other,O
person,O
will,O
comply,O
with,O
the,O
registration,O
and,O
prospectus,O
delivery,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
to,O
the,O
extent,O
applicable,O
.,O
,O
If,O
the,O
tendering,O
holder,O
is,O
a,O
broker-dealer,O
(,O
whether,O
or,O
not,O
it,O
is,O
also,O
an,O
affiliate,O
of,O
the,O
Company,O
or,O
any,O
of,O
the,O
guarantors,O
within,O
the,O
meaning,O
of,O
Rule,O
405,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
it,O
must,O
also,O
represent,O
that,O
such,O
Old,O
Notes,O
held,O
by,O
the,O
broker-dealer,O
are,O
held,O
only,O
as,O
a,O
nominee,O
or,O
that,O
the,O
Old,O
Notes,O
to,O
be,O
exchanged,O
for,O
the,O
New,O
Notes,O
were,O
acquired,O
by,O
it,O
as,O
a,O
result,O
of,O
market-making,O
activities,O
or,O
other,O
trading,O
activities,O
and,O
acknowledge,O
that,O
it,O
will,O
deliver,O
a,O
prospectus,O
meeting,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
in,O
connection,O
with,O
any,O
resale,O
of,O
such,O
New,O
Notes,O
issued,O
in,O
the,O
Exchange,O
Offer,O
.,O
,O
By,O
so,O
acknowledging,O
and,O
by,O
delivering,O
a,O
prospectus,O
meeting,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
a,O
broker-dealer,O
will,O
not,O
be,O
deemed,O
to,O
admit,O
that,O
it,O
is,O
an,O
underwriter,O
within,O
the,O
meaning,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Very,O
truly,O
yours,O
",",O
,O
To,O
Registered,O
Holders,O
:,O
,O
We,O
are,O
enclosing,O
herewith,O
the,O
material,O
listed,O
below,O
relating,O
to,O
the,O
offer,O
(,O
the,O
Exchange,O
Offer,O
),O
by,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
Company,O
),O
to,O
exchange,O
up,O
to,O
$,O
"210,000,000",O
aggregate,O
principal,O
amount,O
of,O
its,O
new,O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2018,O
",",O
Series,O
B,O
(,O
the,O
New,O
Notes,O
),O
",",O
which,O
have,O
been,O
registered,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,O
1933,O
",",O
as,O
amended,O
(,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
for,O
up,O
to,O
$,O
"210,000,000",O
aggregate,O
principal,O
amount,O
of,O
its,O
new,O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2018,O
",",O
Series,O
A,O
(,O
the,O
Old,O
Notes,O
),O
upon,O
the,O
terms,O
and,O
subject,O
to,O
the,O
conditions,O
set,O
forth,O
in,O
the,O
Prospectus,O
",",O
dated,O
",",O
2010,O
",",O
and,O
the,O
related,O
Letter,O
of,O
Transmittal,O
.,O
,O
Enclosed,O
herewith,O
are,O
copies,O
of,O
the,O
following,O
documents,O
:,O
,O
WE,O
URGE,O
YOU,O
TO,O
CONTACT,O
YOUR,O
CLIENTS,O
PROMPTLY,O
.,O
,O
PLEASE,O
NOTE,O
THAT,O
THE,O
EXCHANGE,O
OFFER,O
WILL,O
EXPIRE,O
AT,O
5:00,O
P.M.,O
",",O
NEW,I-MISCELLANEOUS
YORK,I-MISCELLANEOUS
CITY,I-MISCELLANEOUS
TIME,I-MISCELLANEOUS
",",O
ON,O
",",O
2010,O
",",O
UNLESS,O
EXTENDED,O
.,O
,O
The,O
Exchange,O
Offer,O
is,O
not,O
conditioned,O
upon,O
any,O
minimum,O
number,O
of,O
Old,O
Notes,O
being,O
tendered,O
.,O
,O
Pursuant,O
to,O
the,O
Letter,O
of,O
Transmittal,O
",",O
each,O
holder,O
of,O
Old,O
Notes,O
will,O
represent,O
to,O
the,O
Company,O
that,O
(,O
i,O
),O
any,O
New,O
Notes,O
acquired,O
in,O
exchange,O
for,O
Old,O
Notes,O
tendered,O
in,O
the,O
Exchange,O
Offer,O
hereby,O
will,O
have,O
been,O
acquired,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
of,O
the,O
person,O
receiving,O
such,O
New,O
Notes,O
",",O
whether,O
or,O
not,O
such,O
person,O
is,O
the,O
undersigned,O
",",O
(,O
ii,O
),O
neither,O
the,O
holder,O
of,O
such,O
Old,O
Notes,O
nor,O
any,O
such,O
other,O
person,O
is,O
engaged,O
in,O
",",O
or,O
intends,O
to,O
engage,O
in,O
",",O
a,O
distribution,O
of,O
such,O
New,O
Notes,O
",",O
or,O
has,O
an,O
arrangement,O
or,O
understanding,O
with,O
any,O
person,O
to,O
participate,O
in,O
the,O
distribution,O
of,O
such,O
New,O
Notes,O
or,O
in,O
the,O
exchange,O
offer,O
for,O
the,O
purpose,O
of,O
distributing,O
the,O
New,O
Notes,O
",",O
is,O
not,O
a,O
broker-dealer,O
tendering,O
Old,O
Notes,O
acquired,O
directly,O
from,O
the,O
Company,O
for,O
its,O
own,O
account,O
",",O
and,O
(,O
iii,O
),O
neither,O
the,O
holder,O
of,O
such,O
Old,O
Notes,O
nor,O
any,O
such,O
other,O
person,O
is,O
an,O
affiliate,O
",",O
as,O
defined,O
in,O
Rule,O
405,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
of,O
the,O
Company,O
or,O
",",O
if,O
such,O
holder,O
or,O
any,O
such,O
other,O
person,O
is,O
an,O
affiliate,O
",",O
that,O
such,O
holder,O
or,O
any,O
such,O
other,O
person,O
will,O
comply,O
with,O
the,O
registration,O
and,O
prospectus,O
delivery,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
to,O
the,O
extent,O
applicable,O
.,O
,O
the,O
Exchange,O
Offer,O
.,O
,O
By,O
so,O
acknowledging,O
and,O
by,O
delivering,O
a,O
prospectus,O
meeting,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
a,O
broker-dealer,O
will,O
not,O
be,O
deemed,O
to,O
admit,O
that,O
it,O
is,O
an,O
underwriter,O
within,O
the,O
meaning,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
The,O
enclosed,O
Instruction,O
to,O
Registered,O
Holder,O
from,O
Beneficial,O
Owner,O
contains,O
an,O
authorization,O
by,O
the,O
beneficial,O
owner,O
of,O
the,O
Old,O
Notes,O
for,O
you,O
to,O
make,O
the,O
foregoing,O
representations,O
.,O
,O
The,O
Company,O
will,O
not,O
pay,O
any,O
fee,O
or,O
commission,O
to,O
any,O
broker,O
or,O
dealer,O
or,O
to,O
any,O
other,O
persons,O
(,O
other,O
than,O
the,O
exchange,O
agent,O
for,O
the,O
Exchange,O
Offer,O
),O
in,O
connection,O
with,O
the,O
solicitation,O
of,O
tenders,O
of,O
Old,O
Notes,O
pursuant,O
to,O
the,O
Exchange,O
Offer,O
.,O
,O
Holders,O
who,O
tender,O
their,O
Old,O
Notes,O
for,O
New,O
Notes,O
will,O
not,O
be,O
obligated,O
to,O
pay,O
any,O
transfer,O
taxes,O
in,O
connection,O
with,O
the,O
exchange,O
",",O
except,O
as,O
otherwise,O
provided,O
in,O
Instruction,O
5,O
of,O
the,O
enclosed,O
Letter,O
of,O
Transmittal,O
.,O
,O
Any,O
inquiries,O
you,O
may,O
have,O
with,O
respect,O
to,O
the,O
Exchange,O
Offer,O
may,O
be,O
addressed,O
to,O
",",O
and,O
additional,O
copies,O
of,O
the,O
enclosed,O
materials,O
may,O
be,O
obtained,O
from,O
",",O
the,O
Exchange,O
Agent,O
",",O
U.S.,I-BUSINESS
Bank,I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
",",O
in,O
the,O
manner,O
set,O
forth,O
below,O
.,O
,O
Very,O
truly,O
yours,O
",",O
,O
SONIC,I-BUSINESS
AUTOMOTIVE,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
NOTHING,O
CONTAINED,O
HEREIN,O
OR,O
IN,O
THE,O
ENCLOSED,O
DOCUMENTS,O
SHALL,O
CONSTITUTE,O
YOU,O
THE,O
AGENT,O
OF,O
THE,O
COMPANY,O
OR,O
THE,O
EXCHANGE,O
AGENT,O
",",O
OR,O
AUTHORIZE,O
YOU,O
TO,O
USE,O
ANY,O
DOCUMENT,O
OR,O
MAKE,O
ANY,O
STATEMENT,O
ON,O
THEIR,O
BEHALF,O
IN,O
CONNECTION,O
WITH,O
THE,O
EXCHANGE,O
OFFER,O
OTHER,O
THAN,O
THE,O
DOCUMENTS,O
ENCLOSED,O
HEREWITH,O
AND,O
THE,O
STATEMENTS,O
CONTAINED,O
THEREIN,O
.,O
,O
To,O
Registered,O
Holder,O
:,O
,O
The,O
undersigned,O
hereby,O
acknowledges,O
receipt,O
of,O
the,O
Prospectus,O
dated,O
",",O
2010,O
(,O
the,O
Prospectus,O
),O
of,O
Sonic,I-BUSINESS
Automotive,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
Company,O
),O
",",O
and,O
the,O
accompanying,O
Letter,O
of,O
Transmittal,O
(,O
the,O
Letter,O
of,O
Transmittal,O
),O
",",O
which,O
constitute,O
the,O
Company,O
s,O
offer,O
(,O
the,O
Exchange,O
Offer,O
),O
to,O
exchange,O
up,O
to,O
$,O
"210,000,000",O
aggregate,O
principal,O
amount,O
of,O
its,O
new,O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2018,O
",",O
Series,O
B,O
(,O
the,O
New,O
Notes,O
),O
",",O
which,O
have,O
been,O
registered,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
for,O
up,O
to,O
$,O
"210,000,000",O
aggregate,O
principal,O
amount,O
of,O
its,O
new,O
9.0,O
%,O
Senior,O
Subordinated,O
Notes,O
due,O
2018,O
",",O
Series,O
A,O
(,O
the,O
Old,O
Notes,O
),O
upon,O
the,O
terms,O
and,O
subject,O
to,O
the,O
conditions,O
set,O
forth,O
in,O
the,O
Prospectus,O
and,O
the,O
Letter,O
of,O
Transmittal,O
.,O
,O
Capitalized,O
terms,O
used,O
but,O
not,O
defined,O
herein,O
have,O
the,O
meanings,O
ascribed,O
to,O
them,O
in,O
the,O
Prospectus,O
.,O
,O
This,O
will,O
instruct,O
you,O
",",O
the,O
registered,O
holder,O
",",O
as,O
to,O
the,O
action,O
to,O
be,O
taken,O
by,O
you,O
relating,O
to,O
the,O
Exchange,O
Offer,O
with,O
respect,O
to,O
the,O
Old,O
Notes,O
held,O
by,O
you,O
for,O
the,O
account,O
of,O
the,O
undersigned,O
.,O
,O
The,O
aggregate,O
face,O
amount,O
of,O
the,O
Old,O
Notes,O
held,O
by,O
you,O
for,O
the,O
account,O
of,O
the,O
undersigned,O
is,O
$,O
.,O
,O
With,O
respect,O
to,O
the,O
Exchange,O
Offer,O
",",O
the,O
undersigned,O
hereby,O
instructs,O
you,O
(,O
check,O
appropriate,O
box,O
),O
:,O
,O
If,O
the,O
undersigned,O
instructs,O
you,O
to,O
tender,O
Old,O
Notes,O
held,O
by,O
you,O
for,O
the,O
account,O
of,O
the,O
undersigned,O
",",O
it,O
is,O
understood,O
that,O
you,O
are,O
authorized,O
to,O
make,O
",",O
on,O
behalf,O
of,O
the,O
undersigned,O
(,O
and,O
the,O
undersigned,O
",",O
by,O
its,O
signature,O
below,O
",",O
hereby,O
makes,O
to,O
you,O
),O
",",O
the,O
representations,O
and,O
warranties,O
contained,O
in,O
the,O
Letter,O
of,O
Transmittal,O
that,O
are,O
to,O
be,O
made,O
with,O
respect,O
to,O
the,O
undersigned,O
as,O
a,O
beneficial,O
owner,O
",",O
including,O
but,O
not,O
limited,O
to,O
the,O
representations,O
",",O
that,O
(,O
i,O
),O
that,O
any,O
New,O
Notes,O
acquired,O
in,O
exchange,O
for,O
Old,O
Notes,O
tendered,O
in,O
the,O
Exchange,O
Offer,O
hereby,O
will,O
have,O
been,O
acquired,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
of,O
the,O
person,O
receiving,O
such,O
New,O
Notes,O
",",O
whether,O
or,O
not,O
such,O
person,O
is,O
the,O
undersigned,O
",",O
(,O
ii,O
),O
neither,O
the,O
holder,O
of,O
such,O
Old,O
Notes,O
nor,O
any,O
such,O
other,O
person,O
is,O
engaged,O
in,O
",",O
or,O
intends,O
to,O
engage,O
in,O
",",O
a,O
distribution,O
of,O
such,O
New,O
Notes,O
",",O
or,O
has,O
an,O
arrangement,O
or,O
understanding,O
with,O
any,O
person,O
to,O
participate,O
in,O
the,O
distribution,O
of,O
such,O
New,O
Notes,O
or,O
in,O
the,O
exchange,O
offer,O
for,O
the,O
purpose,O
of,O
distributing,O
the,O
New,O
Notes,O
",",O
is,O
not,O
a,O
broker-dealer,O
tendering,O
Old,O
Notes,O
acquired,O
directly,O
from,O
the,O
Company,O
for,O
its,O
own,O
account,O
",",O
(,O
iii,O
),O
neither,O
the,O
holder,O
of,O
such,O
Old,O
Notes,O
nor,O
any,O
such,O
other,O
person,O
is,O
an,O
affiliate,O
",",O
as,O
defined,O
in,O
Rule,O
405,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
of,O
the,O
Company,O
or,O
",",O
if,O
such,O
holder,O
or,O
any,O
such,O
other,O
person,O
is,O
an,O
affiliate,O
",",O
that,O
such,O
holder,O
or,O
any,O
such,O
other,O
person,O
will,O
comply,O
with,O
the,O
registration,O
and,O
prospectus,O
delivery,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
to,O
the,O
extent,O
applicable,O
and,O
(,O
iv,O
),O
if,O
the,O
tendering,O
holder,O
is,O
a,O
broker-dealer,O
(,O
whether,O
or,O
not,O
it,O
is,O
also,O
an,O
affiliate,O
of,O
the,O
Company,O
or,O
any,O
of,O
the,O
guarantors,O
within,O
the,O
meaning,O
of,O
Rule,O
405,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
it,O
must,O
also,O
represent,O
that,O
such,O
Old,O
Notes,O
held,O
by,O
the,O
broker-dealer,O
are,O
held,O
only,O
as,O
a,O
nominee,O
or,O
that,O
the,O
Old,O
Notes,O
to,O
be,O
exchanged,O
for,O
the,O
New,O
Notes,O
were,O
acquired,O
by,O
it,O
as,O
a,O
result,O
of,O
market-making,O
activities,O
or,O
other,O
trading,O
activities,O
and,O
acknowledge,O
that,O
it,O
will,O
deliver,O
a,O
prospectus,O
meeting,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
in,O
connection,O
with,O
any,O
resale,O
of,O
such,O
New,O
Notes,O
issued,O
in,O
the,O
Exchange,O
Offer,O
.,O
,O
By,O
so,O
acknowledging,O
and,O
by,O
delivering,O
a,O
prospectus,O
meeting,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
a,O
broker-dealer,O
will,O
not,O
be,O
deemed,O
to,O
admit,O
that,O
it,O
is,O
an,O
underwriter,O
within,O
the,O
meaning,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
-DOCSTART-,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
(,O
1,O
),O
has,O
filed,O
all,O
reports,O
required,O
to,O
be,O
filed,O
by,O
Section,O
13,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
during,O
the,O
preceding,O
12,O
months,O
(,O
or,O
for,O
such,O
shorter,O
period,O
that,O
the,O
registrant,O
was,O
required,O
to,O
file,O
such,O
reports,O
),O
",",O
and,O
(,O
2,O
),O
has,O
been,O
subject,O
to,O
such,O
filing,O
requirements,O
for,O
the,O
past,O
90,O
days,O
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
has,O
submitted,O
electronically,O
and,O
posted,O
on,O
its,O
corporate,O
Web,O
site,O
",",O
if,O
any,O
",",O
every,O
Interactive,O
Data,O
File,O
required,O
to,O
be,O
submitted,O
and,O
posted,O
pursuant,O
to,O
Rule,O
405,O
of,O
Regulation,I-LEGISLATION/ACT
S-T,I-LEGISLATION/ACT
(,O
§,O
232.405,O
of,O
this,O
chapter,O
),O
during,O
the,O
preceding,O
12,O
months,O
(,O
or,O
for,O
such,O
shorter,O
period,O
that,O
the,O
registrant,O
was,O
required,O
to,O
submit,O
and,O
post,O
such,O
files,O
),O
.,O
,O
Yes,O
o,O
No,O
o,O
The,O
registrant,O
is,O
not,O
yet,O
subject,O
to,O
this,O
requirement,O
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
large,O
accelerated,O
filer,O
",",O
an,O
accelerated,O
filer,O
",",O
a,O
non-accelerated,O
filer,O
",",O
or,O
a,O
smaller,O
reporting,O
company,O
.,O
,O
See,O
the,O
definitions,O
of,O
“,O
large,O
accelerated,O
filed,O
",",O
”,O
“,O
accelerated,O
filer,O
”,O
and,O
“,O
smaller,O
reporting,O
company,O
”,O
in,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
shell,O
company,O
(,O
as,O
defined,O
in,O
Rule,O
12b-2,O
of,O
the,O
Act,O
),O
.,O
,O
Indicate,O
the,O
number,O
of,O
shares,O
outstanding,O
of,O
each,O
of,O
the,O
issuer,O
’,O
s,O
classes,O
of,O
common,O
stock,O
",",O
as,O
of,O
the,O
latest,O
practicable,O
date,O
.,O
,O
The,O
number,O
of,O
shares,O
of,O
the,O
registrant,O
’,O
s,O
common,O
stock,O
",",O
$,O
0.001,O
par,O
value,O
per,O
share,O
",",O
outstanding,O
as,O
of,O
May,O
16,O
",",O
2011,O
was,O
"839,526,530",O
.,O
,O
Part,O
I,O
",",O
Item,O
1,O
.,O
,O
During,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
in,O
conjunction,O
with,O
the,O
issuance,O
of,O
the,O
convertible,O
notes,O
",",O
debt,O
discounts,O
in,O
the,O
amount,O
of,O
$,O
"61,896",O
were,O
recorded,O
.,O
,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
“,O
Company,O
'',O
),O
was,O
incorporated,O
in,O
September,O
2007,O
under,O
the,O
laws,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
California,I-LOCATION
.,O
,O
On,O
February,O
3,O
",",O
2010,O
",",O
FormulaWon,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
public,O
company,O
",",O
acquired,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
in,O
a,O
reverse,O
merger,O
.,O
,O
was,O
renamed,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
In,O
connection,O
with,O
the,O
reverse,O
acquisition,O
and,O
recapitalization,O
",",O
all,O
share,O
and,O
per,O
share,O
amounts,O
of,O
Reach,I-BUSINESS
have,O
been,O
retroactively,O
adjusted,O
to,O
reflect,O
the,O
legal,O
capital,O
structure,O
of,O
FormulaWon,I-BUSINESS
pursuant,O
to,O
Financial,I-GOVERNMENT
Accounting,I-GOVERNMENT
Standards,I-GOVERNMENT
Board,I-GOVERNMENT
(,O
“,O
FASB,I-GOVERNMENT
”,O
),O
Accounting,I-LEGISLATION/ACT
Standards,I-LEGISLATION/ACT
Codification,I-LEGISLATION/ACT
(,O
“,O
ASC,I-LEGISLATION/ACT
”,O
),O
805-40-45-1,O
.,O
,O
The,O
Company,O
extends,O
corporate,O
brands,O
through,O
the,O
use,O
of,O
mobile,O
applications,O
and,O
social,O
gaming,O
.,O
,O
The,O
Company,O
was,O
initially,O
formed,O
to,O
assist,O
publishers,O
and,O
advertisers,O
in,O
reaching,O
younger,O
generations,O
though,O
internet,I-MISCELLANEOUS
and,O
mobile,O
instant,O
messaging,O
platforms,O
.,O
,O
In,O
2010,O
",",O
the,O
Company,O
expanded,O
its,O
business,O
model,O
and,O
developed,O
its,O
first,O
Facebook,I-BUSINESS
game,O
and,O
celebrity,O
application,O
.,O
,O
It,O
also,O
launched,O
several,O
retail,O
space,O
applications,O
.,O
,O
With,O
the,O
change,O
in,O
focus,O
",",O
the,O
Company,O
migrated,O
from,O
an,O
instant,O
messaging,O
Bot,O
company,O
to,O
a,O
full-service,O
mobile,O
application,O
developer,O
and,O
marketer,O
.,O
,O
In,O
2011,O
",",O
the,O
Company,O
introduced,O
a,O
new,O
revenue,O
venture,O
in,O
the,O
form,O
of,O
an,O
online,O
auction,O
website,O
called,O
bid4babygear.com,O
",",O
where,O
customers,O
can,O
purchase,O
childcare,O
and,O
related,O
items,O
through,O
a,O
bidding,O
process,O
.,O
,O
The,O
accompanying,O
unaudited,O
condensed,O
consolidated,O
financial,O
statements,O
of,O
the,O
Company,O
have,O
been,O
prepared,O
in,O
accordance,O
with,O
the,O
rules,O
and,O
regulations,O
of,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
for,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
.,O
,O
Accordingly,O
",",O
certain,O
information,O
and,O
footnote,O
disclosures,O
",",O
normally,O
included,O
in,O
financial,O
statements,O
prepared,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
",",O
have,O
been,O
condensed,O
or,O
omitted,O
pursuant,O
to,O
such,O
rules,O
and,O
regulations,O
.,O
,O
In,O
the,O
opinion,O
of,O
management,O
",",O
these,O
financial,O
statements,O
reflect,O
all,O
normal,O
recurring,O
and,O
other,O
adjustments,O
necessary,O
for,O
a,O
fair,O
presentation,O
",",O
and,O
to,O
make,O
the,O
financial,O
statements,O
not,O
misleading,O
.,O
,O
These,O
financial,O
statements,O
should,O
be,O
read,O
in,O
conjunction,O
with,O
the,O
audited,O
consolidated,O
financial,O
statements,O
included,O
in,O
its,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
Operating,O
results,O
for,O
interim,O
periods,O
are,O
not,O
necessarily,O
indicative,O
of,O
operating,O
results,O
for,O
an,O
entire,O
fiscal,O
year,O
or,O
any,O
other,O
future,O
periods,O
.,O
,O
The,O
consolidated,O
financial,O
statements,O
include,O
the,O
assets,O
",",O
liabilities,O
and,O
operating,O
results,O
of,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
its,O
wholly-owned,O
subsidiary,O
",",O
Reach,I-BUSINESS
Messaging,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
All,O
significant,O
intercompany,O
accounts,O
and,O
transactions,O
have,O
been,O
eliminated,O
in,O
consolidation,O
.,O
,O
The,O
preparation,O
of,O
financial,O
statements,O
in,O
conformity,O
with,O
U.S.,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
requires,O
management,O
to,O
make,O
estimates,O
and,O
assumptions,O
that,O
affect,O
the,O
amounts,O
reported,O
in,O
the,O
financial,O
statements,O
and,O
accompanying,O
notes,O
.,O
,O
Making,O
estimates,O
requires,O
management,O
to,O
exercise,O
significant,O
judgment,O
.,O
,O
It,O
is,O
at,O
least,O
reasonably,O
possible,O
that,O
the,O
estimate,O
of,O
the,O
effect,O
of,O
a,O
condition,O
",",O
situation,O
or,O
set,O
of,O
circumstances,O
that,O
existed,O
at,O
the,O
date,O
of,O
the,O
financial,O
statements,O
",",O
which,O
management,O
considered,O
in,O
formulating,O
its,O
estimate,O
could,O
change,O
in,O
the,O
near,O
term,O
due,O
to,O
one,O
or,O
more,O
future,O
confirming,O
events,O
.,O
,O
Accordingly,O
",",O
the,O
actual,O
results,O
could,O
differ,O
significantly,O
from,O
our,O
estimates,O
.,O
,O
Such,O
estimates,O
and,O
assumptions,O
impact,O
",",O
among,O
others,O
",",O
the,O
valuation,O
allowance,O
for,O
deferred,O
tax,O
assets,O
",",O
due,O
to,O
continuing,O
and,O
expected,O
future,O
losses,O
.,O
,O
The,O
Company,O
operates,O
in,O
an,O
industry,O
that,O
is,O
subject,O
to,O
intense,O
competition,O
and,O
change,O
in,O
consumer,O
demand,O
.,O
,O
The,O
Company,O
's,O
operations,O
are,O
subject,O
to,O
significant,O
risk,O
and,O
uncertainties,O
including,O
financial,O
and,O
operational,O
risks,O
including,O
the,O
potential,O
risk,O
of,O
business,O
failure,O
.,O
,O
Also,O
",",O
see,O
Note,O
3,O
regarding,O
going,O
concern,O
matters,O
.,O
,O
The,O
Company,O
minimizes,O
its,O
credit,O
risk,O
associated,O
with,O
cash,O
by,O
periodically,O
evaluating,O
the,O
credit,O
quality,O
of,O
its,O
primary,O
financial,O
institution,O
.,O
,O
The,O
balance,O
",",O
at,O
times,O
",",O
may,O
exceed,O
federally,O
insured,O
limits,O
.,O
,O
The,O
United,I-GOVERNMENT
States,I-GOVERNMENT
Congress,I-GOVERNMENT
has,O
temporarily,O
increased,O
the,O
Federal,I-GOVERNMENT
Deposit,I-GOVERNMENT
Insurance,I-GOVERNMENT
Corporation,I-GOVERNMENT
(,O
FDIC,I-GOVERNMENT
),O
deposit,O
insurance,O
from,O
$,O
"100,000",O
to,O
$,O
"250,000",O
per,O
depositor,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
",",O
respectively,O
",",O
the,O
cash,O
balance,O
did,O
not,O
exceed,O
the,O
federally,O
insured,O
limits,O
.,O
,O
Accounts,O
receivable,O
represents,O
trade,O
obligations,O
from,O
customers,O
that,O
are,O
subject,O
to,O
trade,O
collection,O
terms,O
.,O
,O
The,O
Company,O
periodically,O
evaluates,O
the,O
collectability,O
of,O
its,O
accounts,O
receivable,O
and,O
considers,O
the,O
need,O
to,O
establish,O
an,O
allowance,O
for,O
doubtful,O
accounts,O
based,O
upon,O
historical,O
collection,O
experience,O
and,O
specific,O
customer,O
information,O
.,O
,O
Accordingly,O
",",O
the,O
actual,O
amounts,O
could,O
vary,O
from,O
the,O
recorded,O
allowances,O
.,O
,O
The,O
Company,O
does,O
not,O
charge,O
interest,O
on,O
past,O
due,O
receivables,O
.,O
,O
Receivables,O
are,O
determined,O
to,O
be,O
past,O
due,O
based,O
on,O
payment,O
terms,O
of,O
original,O
invoices,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
",",O
the,O
Company,O
did,O
not,O
record,O
an,O
allowance,O
for,O
doubtful,O
accounts,O
.,O
,O
Property,O
and,O
equipment,O
are,O
stated,O
at,O
cost,O
.,O
,O
Depreciation,O
is,O
calculated,O
on,O
a,O
straight-line,O
basis,O
over,O
the,O
estimated,O
useful,O
lives,O
of,O
the,O
related,O
assets,O
",",O
which,O
is,O
five,O
years,O
.,O
,O
Generally,O
",",O
all,O
forms,O
of,O
share-based,O
payments,O
",",O
including,O
stock,O
option,O
grants,O
",",O
restricted,O
stock,O
grants,O
and,O
stock,O
appreciation,O
rights,O
",",O
are,O
measured,O
at,O
their,O
fair,O
value,O
on,O
the,O
awards,O
’,O
grant,O
dates,O
",",O
and,O
are,O
based,O
on,O
the,O
estimated,O
number,O
of,O
awards,O
that,O
are,O
ultimately,O
expected,O
to,O
vest,O
.,O
,O
Share-based,O
payment,O
awards,O
issued,O
to,O
non-employees,O
for,O
services,O
rendered,O
are,O
recorded,O
at,O
either,O
the,O
fair,O
value,O
of,O
the,O
services,O
rendered,O
or,O
the,O
fair,O
value,O
of,O
the,O
share-based,O
payment,O
",",O
whichever,O
is,O
more,O
readily,O
determinable,O
.,O
,O
The,O
expense,O
resulting,O
from,O
share-based,O
payments,O
is,O
recorded,O
as,O
a,O
component,O
of,O
general,O
and,O
administrative,O
expense,O
.,O
,O
In,O
accordance,O
with,O
accounting,O
guidance,O
under,O
FASB,I-GOVERNMENT
ASC,B-LEGISLATION/ACT
260,O
",",O
“,O
Earnings,I-MISCELLANEOUS
per,I-MISCELLANEOUS
Share,I-MISCELLANEOUS
",",O
”,O
basic,O
earnings,O
per,O
share,O
(,O
“,O
EPS,O
”,O
),O
is,O
computed,O
by,O
dividing,O
net,O
loss,O
available,O
to,O
common,O
stockholders,O
by,O
the,O
weighted,O
average,O
number,O
of,O
common,O
shares,O
outstanding,O
during,O
the,O
period,O
",",O
excluding,O
the,O
effects,O
of,O
any,O
potentially,O
dilutive,O
securities,O
.,O
,O
Diluted,O
EPS,O
gives,O
effect,O
to,O
the,O
dilutive,O
potential,O
of,O
shares,O
of,O
common,O
stock,O
outstanding,O
during,O
the,O
period,O
including,O
stock,O
options,O
or,O
warrants,O
",",O
using,O
the,O
treasury,O
stock,O
method,O
(,O
by,O
using,O
the,O
average,O
stock,O
price,O
for,O
the,O
period,O
to,O
determine,O
the,O
number,O
of,O
shares,O
assumed,O
to,O
be,O
purchased,O
from,O
the,O
exercise,O
of,O
stock,O
options,O
or,O
warrants,O
),O
",",O
and,O
convertible,O
debt,O
or,O
convertible,O
preferred,O
stock,O
",",O
using,O
the,O
if-converted,O
method,O
.,O
,O
Diluted,O
EPS,O
excludes,O
the,O
dilutive,O
potential,O
of,O
shares,O
of,O
common,O
stock,O
if,O
their,O
effect,O
is,O
anti-dilutive,O
.,O
,O
The,O
computation,O
of,O
basic,O
and,O
diluted,O
loss,O
per,O
share,O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
and,O
2010,O
is,O
equivalent,O
since,O
the,O
Company,O
reported,O
a,O
net,O
loss,O
and,O
the,O
effect,O
of,O
any,O
common,O
stock,O
equivalents,O
would,O
be,O
anti-dilutive,O
.,O
,O
For,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
and,O
2010,O
",",O
there,O
were,O
approximately,O
749,O
million,O
and,O
701,O
million,O
shares,O
",",O
respectively,O
",",O
excluded,O
from,O
the,O
calculation,O
because,O
they,O
were,O
anti-dilutive,O
.,O
,O
In,O
August,O
2010,O
",",O
the,O
Company,O
executed,O
a,O
5-1,O
forward,O
Stock,O
Split,O
",",O
all,O
share,O
and,O
per,O
share,O
amounts,O
have,O
been,O
retrospectively,O
restated,O
.,O
,O
The,O
Company,O
records,O
revenue,O
when,O
all,O
of,O
the,O
following,O
have,O
occurred,O
:,O
(,O
1,O
),O
persuasive,O
evidence,O
of,O
an,O
arrangement,O
exists,O
",",O
(,O
2,O
),O
the,O
product,O
is,O
delivered,O
",",O
(,O
3,O
),O
the,O
sales,O
price,O
to,O
the,O
customer,O
is,O
fixed,O
or,O
determinable,O
",",O
and,O
(,O
4,O
),O
collectability,O
of,O
the,O
related,O
customer,O
receivable,O
is,O
reasonably,O
assured,O
.,O
,O
There,O
is,O
no,O
stated,O
right,O
of,O
return,O
for,O
products,O
.,O
,O
Hosting,O
revenue,O
is,O
recognized,O
monthly,O
.,O
,O
Hosting,O
services,O
are,O
invoiced,O
to,O
customers,O
at,O
the,O
beginning,O
of,O
the,O
month,O
following,O
the,O
month,O
services,O
are,O
provided,O
.,O
,O
Advertising,O
and,O
sponsorships,O
on,O
owned,O
Internet,I-MISCELLANEOUS
properties,O
are,O
sold,O
on,O
a,O
cost,O
per,O
action,O
(,O
``,O
CPA,O
'',O
),O
basis,O
and,O
invoiced,O
to,O
the,O
customer,O
monthly,O
based,O
on,O
the,O
number,O
and,O
price,O
per,O
action,O
at,O
the,O
end,O
of,O
each,O
month,O
.,O
,O
Marketing,O
support,O
revenue,O
is,O
generated,O
as,O
a,O
result,O
of,O
the,O
media,O
and,O
marketing,O
services,O
provided,O
to,O
support,O
customer,O
Internet,I-MISCELLANEOUS
marketing,O
activities,O
.,O
,O
When,O
a,O
sales,O
arrangement,O
contains,O
multiple,O
elements,O
",",O
such,O
as,O
software,O
development,O
services,O
",",O
support,O
and,O
maintenance,O
",",O
revenue,O
is,O
allocated,O
to,O
each,O
element,O
based,O
on,O
its,O
relative,O
fair,O
value,O
.,O
,O
When,O
the,O
fair,O
value,O
of,O
an,O
undelivered,O
element,O
can,O
not,O
be,O
determined,O
",",O
the,O
Company,O
defers,O
revenue,O
for,O
the,O
delivered,O
elements,O
until,O
the,O
undelivered,O
elements,O
are,O
delivered,O
.,O
,O
Payments,O
received,O
in,O
advance,O
of,O
provision,O
of,O
services,O
are,O
deferred,O
until,O
earned,O
.,O
,O
Revenue,O
from,O
auction,O
sales,O
is,O
recognized,O
when,O
the,O
risks,O
of,O
ownership,O
and,O
title,O
pass,O
to,O
the,O
customer,O
",",O
which,O
is,O
generally,O
upon,O
shipment,O
of,O
the,O
products,O
.,O
,O
If,O
and,O
when,O
defective,O
products,O
are,O
returned,O
",",O
the,O
Company,O
exchanges,O
them,O
or,O
provides,O
a,O
credit,O
to,O
the,O
customer,O
.,O
,O
The,O
returned,O
products,O
are,O
shipped,O
back,O
to,O
the,O
supplier,O
and,O
the,O
Company,O
receives,O
a,O
credit,O
or,O
exchange,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
",",O
there,O
was,O
no,O
allowance,O
for,O
auction,O
sales,O
returns,O
.,O
,O
Cost,O
of,O
revenue,O
represents,O
costs,O
directly,O
related,O
to,O
the,O
administration,O
of,O
the,O
Company,O
’,O
s,O
auction,O
website,O
.,O
,O
Other,O
costs,O
of,O
revenue,O
include,O
hosting,O
",",O
advertising,O
customization,O
and,O
programming,O
.,O
,O
Research,O
and,O
development,O
costs,O
related,O
to,O
both,O
future,O
and,O
present,O
products,O
are,O
charged,O
to,O
operations,O
as,O
incurred,O
.,O
,O
For,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
and,O
2010,O
",",O
the,O
Company,O
incurred,O
$,O
"27,094",O
and,O
$,O
"66,467",O
",",O
respectively,O
",",O
of,O
research,O
and,O
development,O
costs,O
.,O
,O
The,O
Company,O
accounts,O
for,O
convertible,O
notes,O
payable,O
and,O
warrants,O
in,O
accordance,O
with,O
FASB,I-GOVERNMENT
ASC,B-LEGISLATION/ACT
815,O
",",O
Derivatives,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Hedgings,I-MISCELLANEOUS
.,O
,O
This,O
standard,O
requires,O
that,O
the,O
conversion,O
feature,O
of,O
convertible,O
debt,O
be,O
separated,O
from,O
the,O
host,O
contract,O
and,O
presented,O
as,O
a,O
derivative,O
instrument,O
if,O
certain,O
conditions,O
are,O
met,O
.,O
,O
FASB,I-GOVERNMENT
ASC,B-LEGISLATION/ACT
815,O
was,O
also,O
analyzed,O
to,O
determine,O
whether,O
the,O
debt,O
instrument,O
is,O
to,O
be,O
considered,O
a,O
conventional,O
convertible,O
debt,O
instrument,O
and,O
classified,O
in,O
stockholders,O
',O
equity,O
.,O
,O
The,O
convertible,O
notes,O
payable,O
were,O
evaluated,O
and,O
determined,O
not,O
to,O
be,O
conventionally,O
convertible,O
and,O
",",O
therefore,O
",",O
because,O
of,O
non-fixed,O
conversion,O
price,O
terms,O
under,O
the,O
associated,O
debt,O
agreement,O
",",O
the,O
embedded,O
conversion,O
option,O
was,O
bifurcated,O
and,O
has,O
been,O
accounted,O
for,O
as,O
a,O
derivative,O
liability,O
instrument,O
.,O
,O
The,O
accounting,O
guidance,O
also,O
requires,O
that,O
the,O
conversion,O
feature,O
be,O
recorded,O
at,O
fair,O
value,O
for,O
each,O
reporting,O
period,O
with,O
changes,O
in,O
fair,O
value,O
recorded,O
in,O
the,O
consolidated,O
statements,O
of,O
operations,O
.,O
,O
A,O
Black-Scholes,I-MISCELLANEOUS
valuation,O
calculation,O
was,O
applied,O
to,O
the,O
conversion,O
feature,O
at,O
issuance,O
date,O
and,O
report,O
date,O
.,O
,O
The,O
Company,O
considers,O
it,O
to,O
be,O
a,O
level,O
2,O
type,O
instrument,O
in,O
accordance,O
with,O
FASB,I-GOVERNMENT
ASC,B-LEGISLATION/ACT
820-10,O
“,O
Fair,I-MISCELLANEOUS
value,I-MISCELLANEOUS
Measurements,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Disclosures,I-MISCELLANEOUS
”,O
as,O
the,O
inputs,O
needed,O
to,O
estimate,O
the,O
value,O
are,O
observable,O
either,O
directly,O
or,O
indirectly,O
.,O
,O
The,O
issuance,O
date,O
valuation,O
was,O
used,O
for,O
the,O
effective,O
debt,O
discount,O
that,O
these,O
instruments,O
represent,O
.,O
,O
The,O
debt,O
discount,O
is,O
amortized,O
over,O
the,O
nine-month,O
life,O
of,O
the,O
debt,O
using,O
the,O
effective,O
interest,O
method,O
.,O
,O
The,O
reporting,O
date,O
valuation,O
was,O
used,O
to,O
record,O
the,O
fair,O
value,O
of,O
the,O
instrument,O
at,O
the,O
end,O
of,O
the,O
reporting,O
period,O
with,O
any,O
difference,O
from,O
prior,O
period,O
calculations,O
reflected,O
in,O
the,O
consolidated,O
statement,O
of,O
operations,O
.,O
,O
In,O
January,O
2010,O
",",O
the,O
FASB,I-GOVERNMENT
issued,O
updated,O
guidance,O
to,O
amend,O
the,O
disclosure,O
requirements,O
related,O
to,O
recurring,O
and,O
nonrecurring,O
fair,O
value,O
measurements,O
.,O
,O
This,O
update,O
requires,O
new,O
disclosures,O
on,O
significant,O
transfers,O
of,O
assets,O
and,O
liabilities,O
between,O
Level,O
1,O
and,O
Level,O
2,O
of,O
the,O
fair,O
value,O
hierarchy,O
(,O
including,O
the,O
reasons,O
for,O
these,O
transfers,O
),O
and,O
the,O
reasons,O
for,O
any,O
transfers,O
in,O
or,O
out,O
of,O
Level,O
3,O
.,O
,O
This,O
update,O
also,O
requires,O
a,O
reconciliation,O
of,O
recurring,O
Level,O
3,O
measurements,O
about,O
purchases,O
",",O
sales,O
",",O
issuances,O
and,O
settlements,O
on,O
a,O
gross,O
basis,O
.,O
,O
In,O
addition,O
to,O
these,O
new,O
disclosure,O
requirements,O
",",O
this,O
update,O
clarifies,O
certain,O
existing,O
disclosure,O
requirements,O
.,O
,O
For,O
example,O
",",O
this,O
update,O
clarifies,O
that,O
reporting,O
entities,O
are,O
required,O
to,O
provide,O
fair,O
value,O
measurement,O
disclosures,O
for,O
each,O
class,O
of,O
assets,O
and,O
liabilities,O
rather,O
than,O
each,O
major,O
category,O
of,O
assets,O
and,O
liabilities,O
.,O
,O
This,O
update,O
also,O
clarifies,O
the,O
requirement,O
for,O
entities,O
to,O
disclose,O
information,O
about,O
both,O
the,O
valuation,O
techniques,O
and,O
inputs,O
used,O
in,O
estimating,O
Level,O
2,O
and,O
Level,O
3,O
fair,O
value,O
measurements,O
.,O
,O
This,O
update,O
became,O
effective,O
for,O
the,O
Company,O
with,O
the,O
interim,O
and,O
annual,O
reporting,O
period,O
beginning,O
January,O
1,O
",",O
2010,O
",",O
except,O
for,O
the,O
requirement,O
to,O
provide,O
the,O
Level,O
3,O
activity,O
of,O
purchases,O
",",O
sales,O
",",O
issuances,O
",",O
and,O
settlements,O
on,O
a,O
gross,O
basis,O
",",O
which,O
became,O
effective,O
for,O
the,O
Company,O
with,O
the,O
interim,O
and,O
annual,O
reporting,O
period,O
beginning,O
January,O
1,O
",",O
2011,O
.,O
,O
The,O
Company,O
will,O
not,O
be,O
required,O
to,O
provide,O
the,O
amended,O
disclosures,O
for,O
any,O
previous,O
periods,O
presented,O
for,O
comparative,O
purposes,O
.,O
,O
Other,O
than,O
requiring,O
additional,O
disclosures,O
",",O
adoption,O
of,O
this,O
update,O
did,O
not,O
have,O
a,O
material,O
effect,O
on,O
the,O
Company,O
's,O
financial,O
statements,O
.,O
,O
Management,O
does,O
not,O
believe,O
that,O
any,O
other,O
recently,O
issued,O
",",O
but,O
not,O
yet,O
effective,O
accounting,O
standards,O
",",O
if,O
adopted,O
",",O
will,O
have,O
a,O
material,O
effect,O
on,O
the,O
Company,O
’,O
s,O
financial,O
statements,O
.,O
,O
As,O
reflected,O
in,O
the,O
accompanying,O
financial,O
statements,O
",",O
the,O
Company,O
had,O
a,O
net,O
loss,O
and,O
net,O
cash,O
used,O
in,O
operations,O
of,O
$,O
"288,885",O
and,O
$,O
"210,393",O
",",O
respectively,O
",",O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
.,O
,O
The,O
Company,O
had,O
an,O
accumulated,O
deficit,O
of,O
$,O
"5,082,225",O
at,O
March,O
31,O
",",O
2011,O
.,O
,O
The,O
ability,O
of,O
the,O
Company,O
to,O
continue,O
its,O
operations,O
is,O
dependent,O
on,O
management,O
's,O
plans,O
",",O
which,O
include,O
the,O
raising,O
of,O
capital,O
through,O
debt,O
and/or,O
equity,O
markets,O
with,O
some,O
additional,O
funding,O
from,O
other,O
traditional,O
financing,O
sources,O
",",O
including,O
term,O
loans,O
and,O
notes,O
",",O
until,O
such,O
time,O
that,O
funds,O
provided,O
by,O
operations,O
are,O
sufficient,O
to,O
fund,O
working,O
capital,O
requirements,O
.,O
,O
The,O
Company,O
may,O
need,O
to,O
incur,O
additional,O
liabilities,O
with,O
related,O
parties,O
to,O
sustain,O
the,O
Company,O
’,O
s,O
existence,O
.,O
,O
The,O
Company,O
will,O
require,O
additional,O
funding,O
to,O
finance,O
the,O
growth,O
of,O
its,O
current,O
and,O
expected,O
future,O
operations,O
as,O
well,O
as,O
to,O
achieve,O
its,O
strategic,O
objectives,O
.,O
,O
The,O
Company,O
believes,O
its,O
current,O
available,O
cash,O
along,O
with,O
anticipated,O
revenues,O
may,O
be,O
insufficient,O
to,O
meet,O
its,O
cash,O
needs,O
for,O
the,O
near,O
future,O
.,O
,O
There,O
can,O
be,O
no,O
assurance,O
that,O
financing,O
will,O
be,O
available,O
in,O
amounts,O
or,O
terms,O
acceptable,O
to,O
the,O
Company,O
",",O
if,O
at,O
all,O
.,O
,O
Further,O
restraining,O
the,O
Company,O
’,O
s,O
ability,O
to,O
raise,O
debt,O
financing,O
is,O
a,O
covenant,O
with,O
three,O
current,O
debtholders,O
against,O
the,O
further,O
use,O
of,O
debt,O
financing,O
.,O
,O
Because,O
of,O
the,O
net,O
losses,O
and,O
negative,O
working,O
capital,O
position,O
",",O
the,O
Company,O
’,O
s,O
independent,O
auditors,O
",",O
in,O
their,O
report,O
on,O
the,O
Company,O
’,O
s,O
financial,O
statements,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
expressed,O
substantial,O
doubt,O
about,O
the,O
Company,O
’,O
s,O
ability,O
to,O
continue,O
as,O
a,O
going,O
concern,O
.,O
,O
The,O
accompanying,O
financial,O
statements,O
have,O
been,O
prepared,O
on,O
a,O
going,O
concern,O
basis,O
",",O
which,O
contemplates,O
the,O
realization,O
of,O
assets,O
and,O
the,O
satisfaction,O
of,O
liabilities,O
in,O
the,O
normal,O
course,O
of,O
business,O
.,O
,O
These,O
accompanying,O
financial,O
statements,O
do,O
not,O
include,O
any,O
adjustments,O
relating,O
to,O
the,O
recovery,O
of,O
the,O
recorded,O
assets,O
or,O
the,O
classification,O
of,O
the,O
liabilities,O
that,O
might,O
be,O
necessary,O
should,O
the,O
Company,O
be,O
unable,O
to,O
continue,O
as,O
a,O
going,O
concern,O
.,O
,O
In,O
response,O
to,O
these,O
problems,O
",",O
management,O
is,O
seeking,O
additional,O
equity,O
financing,O
and,O
assessing,O
business,O
markets,O
and,O
related,O
opportunities,O
so,O
that,O
revenues,O
can,O
be,O
generated,O
.,O
,O
The,O
Company,O
applies,O
the,O
accounting,O
guidance,O
under,O
FASB,I-GOVERNMENT
ASC,B-LEGISLATION/ACT
820-10,O
",",O
“,O
Fair,I-MISCELLANEOUS
Value,I-MISCELLANEOUS
Measurements,I-MISCELLANEOUS
”,O
",",O
as,O
well,O
as,O
certain,O
related,O
FASB,I-GOVERNMENT
staff,O
positions,O
.,O
,O
This,O
guidance,O
defines,O
fair,O
value,O
as,O
the,O
price,O
that,O
would,O
be,O
received,O
from,O
selling,O
an,O
asset,O
or,O
paid,O
to,O
transfer,O
a,O
liability,O
in,O
an,O
orderly,O
transaction,O
between,O
market,O
participants,O
at,O
the,O
measurement,O
date,O
.,O
,O
When,O
determining,O
the,O
fair,O
value,O
measurements,O
for,O
assets,O
and,O
liabilities,O
required,O
to,O
be,O
recorded,O
at,O
fair,O
value,O
",",O
the,O
Company,O
considers,O
the,O
principal,O
or,O
most,O
advantageous,O
market,O
in,O
which,O
it,O
would,O
transact,O
business,O
and,O
considers,O
assumptions,O
that,O
marketplace,O
participants,O
would,O
use,O
when,O
pricing,O
the,O
asset,O
or,O
liability,O
",",O
such,O
as,O
inherent,O
risk,O
",",O
transfer,O
restrictions,O
",",O
and,O
risk,O
of,O
nonperformance,O
.,O
,O
The,O
guidance,O
also,O
establishes,O
a,O
fair,O
value,O
hierarchy,O
for,O
measurements,O
of,O
fair,O
value,O
as,O
follows,O
:,O
,O
●,O
Level,O
1,O
–,O
quoted,O
market,O
prices,O
in,O
active,O
markets,O
for,O
identical,O
assets,O
or,O
liabilities,O
.,O
,O
●,O
Level,O
2,O
-inputs,O
other,O
than,O
Level,O
1,O
that,O
are,O
observable,O
",",O
either,O
directly,O
or,O
indirectly,O
",",O
such,O
as,O
quoted,O
prices,O
in,O
active,O
markets,O
for,O
similar,O
assets,O
or,O
liabilities,O
",",O
quoted,O
prices,O
for,O
identical,O
or,O
similar,O
assets,O
or,O
liabilities,O
in,O
markets,O
that,O
are,O
not,O
active,O
",",O
or,O
other,O
inputs,O
that,O
are,O
observable,O
or,O
can,O
be,O
corroborated,O
by,O
observable,O
market,O
data,O
for,O
substantially,O
the,O
full,O
term,O
of,O
the,O
assets,O
or,O
liabilities,O
.,O
,O
●,O
Level,O
3,O
–,O
unobservable,O
inputs,O
that,O
are,O
supported,O
by,O
little,O
or,O
no,O
market,O
activity,O
and,O
that,O
are,O
significant,O
to,O
the,O
fair,O
value,O
of,O
the,O
assets,O
or,O
liabilities,O
.,O
,O
The,O
carrying,O
amounts,O
reported,O
in,O
the,O
balance,O
sheet,O
for,O
accounts,O
payable,O
and,O
accrued,O
expenses,O
",",O
and,O
short,O
term,O
convertible,O
notes,O
payable,O
are,O
the,O
approximate,O
fair,O
value,O
based,O
on,O
the,O
short-term,O
maturity,O
of,O
these,O
instruments,O
.,O
,O
For,O
long,O
term,O
convertible,O
notes,O
payable,O
",",O
the,O
carrying,O
value,O
approximates,O
fair,O
value,O
.,O
,O
Other,O
assets,O
consisted,O
of,O
the,O
following,O
as,O
of,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
:,O
,O
The,O
Company,O
has,O
entered,O
into,O
several,O
debt,O
agreements,O
.,O
,O
For,O
all,O
of,O
the,O
following,O
convertible,O
debt,O
agreements,O
",",O
the,O
conversion,O
price,O
shall,O
be,O
adjusted,O
in,O
the,O
event,O
of,O
a,O
stock,O
split,O
or,O
similar,O
recapitalization,O
of,O
the,O
outstanding,O
shares,O
.,O
,O
Also,O
",",O
the,O
right,O
to,O
convert,O
is,O
limited,O
such,O
that,O
the,O
holder,O
of,O
the,O
note,O
may,O
not,O
convert,O
into,O
shares,O
if,O
such,O
conversion,O
would,O
cause,O
such,O
holder,O
’,O
s,O
beneficial,O
ownership,O
of,O
the,O
Company,O
’,O
s,O
shares,O
to,O
exceed,O
certain,O
percentages,O
of,O
the,O
total,O
outstanding,O
shares,O
of,O
the,O
Company,O
.,O
,O
On,O
October,O
1,O
",",O
2010,O
",",O
the,O
Company,O
entered,O
into,O
a,O
debt,O
agreement,O
with,O
four,O
noteholders,O
for,O
the,O
purchase,O
and,O
sale,O
of,O
convertible,O
promissory,O
notes,O
in,O
the,O
aggregate,O
principal,O
amount,O
of,O
$,O
"363,706",O
due,O
October,O
1,O
",",O
2013,O
.,O
,O
The,O
debt,O
accrues,O
interest,O
at,O
a,O
rate,O
of,O
5,O
%,O
per,O
annum,O
",",O
which,O
is,O
due,O
and,O
payable,O
with,O
the,O
principal,O
amount,O
.,O
,O
As,O
of,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
",",O
accrued,O
interest,O
was,O
$,O
"9,123",O
and,O
$,O
"4,639",O
",",O
respectively,O
.,O
,O
The,O
debt,O
is,O
convertible,O
at,O
a,O
conversion,O
price,O
of,O
$,O
0.002,O
per,O
share,O
.,O
,O
The,O
outstanding,O
debt,O
at,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
was,O
$,O
"113,706",O
and,O
$,O
"88,706",O
",",O
respectively,O
",",O
which,O
included,O
a,O
debt,O
discount,O
in,O
the,O
amount,O
of,O
$,O
"250,000",O
and,O
$,O
"275,000",O
",",O
respectively,O
.,O
,O
On,O
February,O
10,O
",",O
2011,O
",",O
the,O
Company,O
entered,O
into,O
a,O
debt,O
agreement,O
with,O
a,O
noteholder,O
for,O
the,O
purchase,O
and,O
sale,O
of,O
a,O
convertible,O
promissory,O
note,O
in,O
the,O
principal,O
amount,O
of,O
$,O
"50,000",O
due,O
February,O
10,O
",",O
2014,O
.,O
,O
During,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
$,O
"25,000",O
of,O
principal,O
was,O
repaid,O
.,O
,O
The,O
debt,O
accrues,O
interest,O
at,O
a,O
rate,O
of,O
5,O
%,O
per,O
annum,O
",",O
which,O
is,O
due,O
and,O
payable,O
with,O
the,O
principal,O
amount,O
.,O
,O
As,O
of,O
March,O
31,O
",",O
2011,O
",",O
accrued,O
interest,O
was,O
$,O
236,O
.,O
,O
The,O
debt,O
is,O
convertible,O
at,O
a,O
conversion,O
price,O
of,O
$,O
0.002,O
per,O
share,O
.,O
,O
The,O
outstanding,O
debt,O
at,O
March,O
31,O
",",O
2011,O
was,O
$,O
"1,562",O
",",O
which,O
included,O
a,O
debt,O
discount,O
in,O
the,O
amount,O
of,O
$,O
"23,438",O
.,O
,O
On,O
March,O
8,O
",",O
2011,O
",",O
the,O
Company,O
entered,O
into,O
a,O
debt,O
agreement,O
with,O
a,O
noteholder,O
for,O
the,O
purchase,O
and,O
sale,O
of,O
a,O
convertible,O
promissory,O
note,O
in,O
the,O
principal,O
amount,O
of,O
$,O
"27,500",O
due,O
on,O
December,O
8,O
",",O
2011,O
.,O
,O
The,O
debt,O
accrues,O
interest,O
at,O
a,O
rate,O
of,O
8,O
%,O
per,O
annum,O
",",O
which,O
is,O
due,O
and,O
payable,O
with,O
the,O
principal,O
amount,O
.,O
,O
As,O
of,O
March,O
31,O
",",O
2011,O
",",O
accrued,O
interest,O
was,O
$,O
139,O
.,O
,O
The,O
principal,O
and,O
accrued,O
interest,O
are,O
convertible,O
(,O
beginning,O
180,O
days,O
following,O
the,O
date,O
of,O
issuance,O
),O
at,O
the,O
election,O
of,O
the,O
note,O
holder,O
into,O
shares,O
of,O
the,O
Company,O
’,O
s,O
common,O
stock,O
at,O
a,O
conversion,O
price,O
initially,O
equal,O
to,O
55,O
%,O
of,O
the,O
average,O
of,O
the,O
three,O
lowest,O
trading,O
prices,O
during,O
the,O
10-day,O
period,O
prior,O
to,O
conversion,O
.,O
,O
The,O
note,O
may,O
be,O
prepaid,O
at,O
any,O
time,O
",",O
subject,O
to,O
advance,O
notice,O
to,O
the,O
holder,O
and,O
an,O
opportunity,O
to,O
convert,O
the,O
note,O
into,O
shares,O
of,O
common,O
stock,O
prior,O
to,O
repayment,O
and,O
with,O
a,O
pre-payment,O
penalty,O
.,O
,O
Due,O
to,O
the,O
fluctuating,O
conversion,O
price,O
associated,O
with,O
this,O
note,O
",",O
a,O
derivative,O
liability,O
was,O
calculated,O
for,O
the,O
embedded,O
derivative,O
associated,O
with,O
the,O
convertible,O
debt,O
.,O
,O
The,O
Company,O
computed,O
the,O
fair,O
value,O
of,O
the,O
conversion,O
feature,O
at,O
the,O
commitment,O
date,O
",",O
based,O
on,O
the,O
following,O
management,O
assumptions,O
:,O
,O
The,O
fair,O
value,O
of,O
the,O
embedded,O
conversion,O
option,O
on,O
the,O
commitment,O
date,O
was,O
$,O
"11,896",O
.,O
,O
The,O
Company,O
recorded,O
a,O
related,O
debt,O
discount,O
of,O
$,O
"11,896",O
",",O
which,O
is,O
amortized,O
over,O
the,O
life,O
of,O
the,O
debt,O
.,O
,O
For,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
the,O
Company,O
amortized,O
$,O
996,O
of,O
debt,O
discount,O
.,O
,O
At,O
March,O
31,O
",",O
2011,O
the,O
Company,O
remeasured,O
the,O
derivative,O
liability,O
and,O
recorded,O
a,O
fair,O
value,O
of,O
$,O
"29,860",O
.,O
,O
As,O
a,O
result,O
of,O
the,O
remeasurement,O
",",O
the,O
Company,O
recorded,O
a,O
change,O
in,O
fair,O
value,O
associated,O
with,O
this,O
derivative,O
liability,O
as,O
an,O
expense,O
totaling,O
$,O
"17,964",O
for,O
the,O
period,O
ended,O
March,O
31,O
",",O
2011,O
.,O
,O
The,O
following,O
management,O
assumptions,O
were,O
considered,O
:,O
,O
In,O
January,O
2011,O
",",O
the,O
Company,O
contractually,O
agreed,O
to,O
issue,O
"500,000",O
shares,O
of,O
common,O
stock,O
to,O
two,O
individuals,O
for,O
serving,O
on,O
the,O
Board,O
of,O
Directors,O
having,O
a,O
fair,O
value,O
of,O
$,O
"10,000",O
(,O
$,O
0.02/share,O
),O
",",O
based,O
upon,O
the,O
closing,O
stock,O
price,O
on,O
the,O
date,O
of,O
grant,O
.,O
,O
As,O
of,O
March,O
31,O
",",O
2011,O
",",O
the,O
Company,O
expensed,O
this,O
stock,O
issuance,O
as,O
a,O
component,O
of,O
general,O
and,O
administrative,O
expense,O
.,O
,O
As,O
of,O
March,O
31,O
",",O
2011,O
",",O
these,O
shares,O
have,O
not,O
yet,O
been,O
issued,O
.,O
,O
In,O
February,O
2011,O
",",O
the,O
Company,O
sold,O
"30,000,000",O
shares,O
of,O
common,O
stock,O
for,O
$,O
"150,000",O
(,O
$,O
0.005/share,O
),O
.,O
,O
Per,O
the,O
terms,O
of,O
the,O
agreement,O
",",O
the,O
Company,O
was,O
required,O
to,O
pay,O
$,O
"25,000",O
of,O
an,O
outstanding,O
convertible,O
note,O
",",O
$,O
500,O
in,O
fees,O
and,O
$,O
"75,000",O
to,O
an,O
investor,O
relations,O
firm,O
out,O
of,O
the,O
$,O
"150,000",O
received,O
.,O
,O
In,O
connection,O
with,O
this,O
issuance,O
",",O
the,O
Company,O
issued,O
"30,000,000",O
penny,O
warrants,O
that,O
expire,O
in,O
February,O
2014,O
.,O
,O
From,O
time,O
to,O
time,O
",",O
the,O
Company,O
may,O
become,O
involved,O
in,O
various,O
lawsuits,O
and,O
legal,O
proceedings,O
",",O
which,O
arise,O
in,O
the,O
ordinary,O
course,O
of,O
business,O
.,O
,O
However,O
",",O
litigation,O
is,O
subject,O
to,O
inherent,O
uncertainties,O
",",O
and,O
an,O
adverse,O
result,O
in,O
these,O
or,O
other,O
matters,O
may,O
arise,O
from,O
time,O
to,O
time,O
that,O
may,O
harm,O
its,O
business,O
.,O
,O
The,O
Company,O
is,O
currently,O
not,O
aware,O
of,O
any,O
such,O
legal,O
proceedings,O
or,O
claims,O
that,O
they,O
believe,O
will,O
have,O
",",O
individually,O
or,O
in,O
the,O
aggregate,O
",",O
a,O
material,O
adverse,O
effect,O
on,O
its,O
business,O
",",O
financial,O
condition,O
or,O
operating,O
results,O
.,O
,O
During,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
the,O
Company,O
used,O
consulting,O
services,O
provided,O
by,O
the,O
CEO,O
’,O
s,O
wife,O
and,O
incurred,O
approximately,O
$,O
"10,300",O
for,O
consulting,O
fees,O
.,O
,O
On,O
April,O
27,O
",",O
2011,O
",",O
the,O
Company,O
entered,O
into,O
a,O
financing,O
agreement,O
with,O
three,O
(,O
3,O
),O
investors,O
for,O
the,O
purchase,O
and,O
sale,O
of,O
senior,O
convertible,O
promissory,O
notes,O
in,O
an,O
aggregate,O
principal,O
amount,O
of,O
$,O
"200,000",O
.,O
,O
The,O
notes,O
accrue,O
interest,O
at,O
5,O
%,O
per,O
annum,O
",",O
which,O
is,O
due,O
and,O
payable,O
with,O
the,O
principal,O
amount,O
of,O
$,O
"200,000",O
on,O
October,O
25,O
",",O
2011,O
.,O
,O
Principal,O
and,O
accrued,O
interest,O
are,O
convertible,O
at,O
the,O
election,O
of,O
the,O
note,O
holder,O
into,O
shares,O
of,O
the,O
Company,O
’,O
s,O
common,O
stock,O
at,O
a,O
conversion,O
price,O
initially,O
equal,O
to,O
$,O
0.002,O
per,O
share,O
.,O
,O
The,O
conversion,O
price,O
shall,O
be,O
adjusted,O
in,O
the,O
event,O
of,O
a,O
stock,O
split,O
or,O
similar,O
recapitalization,O
of,O
the,O
outstanding,O
shares,O
.,O
,O
The,O
note,O
may,O
be,O
prepaid,O
at,O
any,O
time,O
",",O
subject,O
to,O
advance,O
notice,O
to,O
the,O
holder,O
and,O
an,O
opportunity,O
to,O
convert,O
the,O
note,O
into,O
shares,O
of,O
common,O
stock,O
prior,O
to,O
repayment,O
.,O
,O
The,O
right,O
to,O
convert,O
is,O
limited,O
such,O
that,O
the,O
holder,O
of,O
the,O
note,O
may,O
not,O
convert,O
into,O
shares,O
if,O
such,O
conversion,O
would,O
cause,O
such,O
holder,O
’,O
s,O
beneficial,O
ownership,O
of,O
the,O
Company,O
’,O
s,O
shares,O
to,O
exceed,O
9.9,O
%,O
of,O
the,O
total,O
outstanding,O
shares,O
of,O
the,O
Company,O
.,O
,O
In,O
connection,O
with,O
these,O
notes,O
",",O
each,O
investor,O
received,O
two,O
warrants,O
to,O
purchase,O
an,O
aggregate,O
of,O
the,O
number,O
of,O
shares,O
issuable,O
upon,O
full,O
conversion,O
of,O
the,O
principal,O
amount,O
of,O
the,O
Notes,O
(,O
up,O
to,O
an,O
aggregate,O
",",O
including,O
the,O
Warrant,O
shares,O
and,O
the,O
conversion,O
shares,O
",",O
of,O
"200,000,000",O
shares,O
),O
.,O
,O
These,O
notes,O
also,O
provide,O
that,O
the,O
Company,O
will,O
not,O
incur,O
additional,O
financing,O
related,O
debt,O
.,O
,O
Part,O
I,O
",",O
Item,O
2,O
.,O
,O
Management,O
’,O
s,O
Discussion,O
and,O
Analysis,O
of,O
Financial,O
Condition,O
and,O
Results,O
of,O
Operations,O
.,O
,O
The,O
following,O
discussion,O
and,O
analysis,O
should,O
be,O
read,O
in,O
conjunction,O
with,O
our,O
financial,O
statements,O
and,O
notes,O
thereto,O
",",O
included,O
elsewhere,O
in,O
this,O
Quarterly,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
(,O
“,O
Report,O
”,O
),O
.,O
,O
Except,O
for,O
the,O
historical,O
information,O
contained,O
in,O
this,O
Report,O
",",O
the,O
following,O
discussion,O
contains,O
certain,O
forward-looking,O
statements,O
that,O
involve,O
risks,O
and,O
uncertainties,O
",",O
such,O
as,O
statements,O
of,O
our,O
plans,O
",",O
objectives,O
",",O
expectations,O
and,O
intentions,O
.,O
,O
Our,O
actual,O
results,O
may,O
differ,O
materially,O
from,O
the,O
results,O
discussed,O
in,O
the,O
forward-looking,O
statements,O
as,O
a,O
result,O
of,O
certain,O
factors,O
including,O
",",O
but,O
not,O
limited,O
to,O
",",O
those,O
discussed,O
in,O
the,O
section,O
of,O
this,O
Report,O
titled,O
“,O
Risk,O
Factors,O
”,O
",",O
as,O
well,O
as,O
other,O
factors,O
",",O
some,O
of,O
which,O
will,O
be,O
outside,O
of,O
our,O
control,O
.,O
,O
You,O
are,O
cautioned,O
not,O
to,O
place,O
undue,O
reliance,O
on,O
these,O
forward-looking,O
statements,O
",",O
which,O
relate,O
only,O
to,O
events,O
as,O
of,O
the,O
date,O
on,O
which,O
the,O
statements,O
are,O
made,O
.,O
,O
We,O
undertake,O
no,O
obligation,O
to,O
publicly,O
revise,O
these,O
forward-looking,O
statements,O
to,O
reflect,O
events,O
or,O
circumstances,O
that,O
arise,O
after,O
the,O
date,O
hereof,O
.,O
,O
You,O
should,O
refer,O
to,O
and,O
carefully,O
review,O
the,O
information,O
in,O
future,O
documents,O
we,O
file,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
“,O
Company,O
'',O
or,O
“,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
”,O
),O
has,O
not,O
generated,O
sufficient,O
revenue,O
so,O
it,O
intends,O
to,O
report,O
its,O
plan,O
of,O
operation,O
below,O
.,O
,O
The,O
ability,O
of,O
the,O
Company,O
to,O
achieve,O
its,O
business,O
objectives,O
is,O
contingent,O
upon,O
its,O
success,O
in,O
raising,O
additional,O
capital,O
until,O
adequate,O
revenues,O
are,O
realized,O
from,O
operations,O
.,O
,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
extends,O
corporate,O
brands,O
through,O
the,O
use,O
of,O
mobile,O
applications,O
and,O
social,O
gaming,O
.,O
,O
The,O
Company,O
contracted,O
with,O
Waste,I-BUSINESS
Management,I-BUSINESS
to,O
build,O
its,O
first,O
Facebook,I-BUSINESS
game,O
:,O
Oceanopolis,I-MISCELLANEOUS
.,O
,O
It,O
gave,O
Waste,I-BUSINESS
Management,I-BUSINESS
a,O
vehicle,O
to,O
extend,O
their,O
recycling,O
message,O
to,O
a,O
much,O
younger,O
demographic,O
than,O
they,O
had,O
previously,O
been,O
able,O
to,O
reach,O
.,O
,O
The,O
game,O
launched,O
in,O
November,O
2010,O
and,O
quickly,O
surpassed,O
"100,000",O
users,O
.,O
,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
is,O
currently,O
developing,O
its,O
first,O
game,O
app,O
(,O
versus,O
a,O
Facebook-based,I-MISCELLANEOUS
game,O
),O
",",O
which,O
is,O
expected,O
to,O
launch,O
in,O
Q2,O
2011,O
.,O
,O
During,O
2010,O
and,O
into,O
2011,O
",",O
Reach,I-BUSINESS
Messaging,I-BUSINESS
's,O
focus,O
has,O
migrated,O
from,O
an,O
Instant,O
Messaging,O
Bot,O
company,O
into,O
a,O
full-service,O
mobile,O
application,O
(,O
“,O
app,O
”,O
),O
developer,O
and,O
marketer,O
.,O
,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
's,O
approach,O
is,O
threefold,O
:,O
,O
The,O
first,O
market,O
vertical,O
that,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
entered,O
was,O
the,O
retail,O
space,O
(,O
i.e.,O
malls,O
and,O
life,O
style,O
centers,O
),O
with,O
its,O
June,O
2010,O
launch,O
of,O
its,O
Mall,I-MISCELLANEOUS
Buddy,I-MISCELLANEOUS
platform,O
.,O
,O
The,O
Mall,I-MISCELLANEOUS
Buddy,I-MISCELLANEOUS
platform,O
enables,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
to,O
develop,O
and,O
launch,O
a,O
retail,O
app,O
for,O
a,O
low,O
cost,O
and,O
can,O
complete,O
the,O
application,O
in,O
approximately,O
two,O
weeks,O
(,O
compared,O
to,O
6,O
weeks,O
for,O
most,O
competitors,O
),O
.,O
,O
As,O
of,O
May,O
15,O
",",O
2011,O
",",O
Reach,I-BUSINESS
Messaging,I-BUSINESS
has,O
launched,O
21,O
retail,O
apps,O
.,O
,O
The,O
Mall,I-MISCELLANEOUS
Buddy,I-MISCELLANEOUS
app,O
is,O
a,O
mobile,O
app,O
that,O
runs,O
on,O
smart,O
phones,O
and,O
mobile,O
devices,O
such,O
as,O
",",O
iPhone,I-MISCELLANEOUS
",",O
Android,I-MISCELLANEOUS
",",O
iPad,I-MISCELLANEOUS
and,O
other,O
popular,O
platforms,O
.,O
,O
It,O
is,O
developed,O
and,O
customized,O
to,O
the,O
needs,O
of,O
an,O
individual,O
mall,O
or,O
town,O
center,O
as,O
compared,O
to,O
a,O
generic,O
shopping,O
aggregator,O
.,O
,O
The,O
Mall,I-MISCELLANEOUS
Buddy,I-MISCELLANEOUS
app,O
benefits,O
the,O
mall,O
management,O
",",O
the,O
shopper,O
and,O
the,O
individual,O
merchants/venues,O
.,O
,O
The,O
Mall,I-MISCELLANEOUS
Buddy,I-MISCELLANEOUS
app,O
is,O
a,O
compelling,O
and,O
feature-rich,O
shopping,O
application,O
.,O
,O
It,O
is,O
frequently,O
enhanced,O
with,O
additional,O
features,O
to,O
offer,O
a,O
valuable,O
and,O
entertaining,O
experience,O
to,O
the,O
end-users,O
.,O
,O
In,O
order,O
to,O
acquire,O
these,O
clients,O
",",O
Reach,O
Messaging,O
had,O
to,O
incur,O
the,O
initial,O
costs,O
related,O
to,O
the,O
development,O
of,O
the,O
platform,O
",",O
however,O
in,O
return,O
the,O
Company,O
is,O
now,O
able,O
to,O
establish,O
a,O
footprint,O
in,O
the,O
retail,O
app,O
space,O
and,O
anticipates,O
generating,O
additional,O
revenue,O
through,O
its,O
‘,O
back-end,O
’,O
ad,O
solution,O
.,O
,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
is,O
currently,O
in,O
discussions,O
with,O
several,O
major,O
mall,O
management,O
companies,O
to,O
provide,O
mobile,O
app,O
solutions,O
for,O
an,O
upfront,O
fee,O
",",O
as,O
well,O
as,O
receiving,O
a,O
share,O
of,O
the,O
recurring,O
revenue,O
.,O
,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
projects,O
to,O
launch,O
20,O
-,O
30,O
new,O
retail,O
apps,O
by,O
mid-Q3,O
2011,O
.,O
,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
entered,O
its,O
second,O
vertical,O
in,O
September,O
2010,O
",",O
when,O
it,O
finished,O
development,O
and,O
launched,O
its,O
Celebrity,I-MISCELLANEOUS
App,I-MISCELLANEOUS
platform,O
.,O
,O
The,O
Celebrity,I-MISCELLANEOUS
App,I-MISCELLANEOUS
platform,O
enables,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
to,O
develop,O
and,O
launch,O
a,O
celebrity,O
app,O
for,O
a,O
low,O
cost,O
and,O
complete,O
the,O
design,O
in,O
approximately,O
3,O
weeks,O
(,O
compared,O
to,O
8,O
weeks,O
for,O
most,O
competitors,O
),O
.,O
,O
Users,O
of,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
’,O
s,O
Celebrity,I-MISCELLANEOUS
Apps,I-MISCELLANEOUS
get,O
official,O
news,O
first,O
and,O
will,O
be,O
clued,O
in,O
to,O
the,O
celebrity,O
’,O
s,O
latest,O
Twitter,I-BUSINESS
and,O
Facebook,I-BUSINESS
posts,O
.,O
,O
They,O
can,O
also,O
create,O
and,O
share,O
images,O
of,O
themselves,O
hangin,O
',O
with,O
the,O
celebrity,O
",",O
enter,O
a,O
celebrity,O
look-a-like,O
contest,O
",",O
or,O
submit,O
photos,O
for,O
a,O
``,O
hot,O
or,O
not,O
'',O
contest,O
.,O
,O
In,O
addition,O
",",O
those,O
with,O
the,O
Celebrity,I-MISCELLANEOUS
App,I-MISCELLANEOUS
can,O
check,O
out,O
freshly,O
updated,O
exclusive,O
photo,O
galleries,O
and,O
videos,O
of,O
the,O
celebrity,O
",",O
take,O
fan,O
polls,O
and,O
quizzes,O
and,O
receive,O
celeb,O
wild,O
quotes,O
",",O
tips,O
and,O
facts,O
.,O
,O
In,O
February,O
2011,O
",",O
Reach,I-BUSINESS
Messaging,I-BUSINESS
and,O
Velti,I-BUSINESS
launched,O
the,O
official,O
‘,O
Paris,I-MISCELLANEOUS
Hilton,I-MISCELLANEOUS
’,O
app,O
.,O
,O
This,O
Celebrity,I-MISCELLANEOUS
App,I-MISCELLANEOUS
is,O
projected,O
to,O
generate,O
"350,000",O
downloads,O
annually,O
and,O
received,O
much,O
buzz,O
on,O
network,O
television,O
and,O
other,O
media,O
.,O
,O
Since,O
the,O
Paris,I-MISCELLANEOUS
Hilton,I-MISCELLANEOUS
launch,O
",",O
Reach,I-BUSINESS
Messaging,I-BUSINESS
has,O
also,O
launched,O
the,O
Michaele,I-MISCELLANEOUS
Salahi,I-MISCELLANEOUS
Celebrity,I-MISCELLANEOUS
App,I-MISCELLANEOUS
and,O
is,O
in,O
talks,O
with,O
several,O
athletes,O
",",O
TV,O
stars,O
and,O
artists,O
to,O
release,O
their,O
Celebrity,I-MISCELLANEOUS
Apps,I-MISCELLANEOUS
.,O
,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
anticipates,O
this,O
will,O
become,O
a,O
significant,O
source,O
of,O
revenue,O
for,O
the,O
next,O
several,O
years,O
.,O
,O
Third,O
",",O
Reach,I-BUSINESS
Messaging,I-BUSINESS
is,O
devoloping,O
additional,O
app,O
platforms,O
for,O
certain,O
other,O
market,O
segments,O
including,O
hospitality,O
(,O
restaurant,O
and,O
vineyards,O
),O
",",O
local,O
advertising,O
and,O
health,O
and,O
fitness,O
.,O
,O
In,O
December,O
2010,O
",",O
Reach,I-BUSINESS
Messaging,I-BUSINESS
launched,O
its,O
turnkey,O
proprietary,O
advertising,O
solution,O
for,O
mobile,O
ad,O
publishers,O
that,O
it,O
refers,O
to,O
as,O
an,O
Interactive,O
Ad,O
Curtain,O
.,O
,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
believes,O
that,O
its,O
new,O
",",O
proprietary,O
mobile,O
ad,O
technology,O
is,O
able,O
to,O
provide,O
publishers,O
with,O
a,O
better,O
return,O
on,O
investment,O
than,O
existing,O
platforms,O
such,O
as,O
AdMob,I-MISCELLANEOUS
and,O
iAd,I-MISCELLANEOUS
.,O
,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
offers,O
Software,O
Development,O
Kits,O
(,O
SDK,O
’,O
s,O
),O
that,O
allow,O
its,O
technology,O
to,O
be,O
used,O
for,O
mobile,O
applications,O
developed,O
for,O
both,O
the,O
iPhone,I-MISCELLANEOUS
and,O
the,O
Android,I-MISCELLANEOUS
and,O
",",O
unlike,O
existing,O
ad,O
platforms,O
",",O
does,O
not,O
charge,O
publishers,O
any,O
fees,O
for,O
``,O
house,O
'',O
or,O
proprietary,O
ads,O
that,O
they,O
run,O
about,O
their,O
companies,O
.,O
,O
Perhaps,O
the,O
most,O
significant,O
feature,O
of,O
the,O
Company,O
's,O
Interactive,O
Ad,O
Curtain,O
mobile,O
ad,O
technology,O
is,O
that,O
it,O
allows,O
readers,O
to,O
``,O
share,O
'',O
ads,O
via,O
email,O
and,O
social,O
media,O
outlets,O
such,O
as,O
Facebook,I-BUSINESS
and,O
Twitter,I-BUSINESS
.,O
,O
In,O
February,O
2011,O
",",O
Reach,I-BUSINESS
Messaging,I-BUSINESS
signed,O
its,O
first,O
two,O
customers,O
licensing,O
this,O
ad,O
technology,O
for,O
a,O
licensing,O
fee,O
and,O
recurring,O
revenue,O
share,O
.,O
,O
To,O
summarize,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
’,O
s,O
principal,O
products,O
and,O
services,O
and,O
their,O
status,O
:,O
,O
Mall,I-MISCELLANEOUS
Buddy,I-MISCELLANEOUS
:,O
As,O
of,O
May,O
15,O
",",O
2011,O
the,O
Company,O
has,O
signed,O
21,O
retail,O
apps,O
which,O
are,O
available,O
for,O
download,O
in,O
the,O
iTunes,I-MISCELLANEOUS
Store,I-MISCELLANEOUS
including,O
:,O
Reston,I-LOCATION
Town,I-LOCATION
Center,I-LOCATION
",",O
Leesburg,I-LOCATION
Premium,I-LOCATION
Outlets,I-LOCATION
",",O
Dulles,I-LOCATION
Town,I-LOCATION
Center,I-LOCATION
",",O
King,I-LOCATION
of,I-LOCATION
Prussia,I-LOCATION
and,O
Tysons,I-LOCATION
Galleria,I-LOCATION
.,O
,O
These,O
apps,O
have,O
been,O
downloaded,O
over,O
"50,000",O
times,O
.,O
,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
is,O
in,O
discussions,O
to,O
develop,O
an,O
additional,O
20,O
-,O
30,O
retail,O
apps,O
in,O
2011,O
.,O
,O
Celebrity,I-MISCELLANEOUS
Apps,I-MISCELLANEOUS
:,O
The,O
Paris,I-MISCELLANEOUS
Hilton,I-MISCELLANEOUS
launch,O
gave,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
visibility,O
in,O
this,O
market,O
segment,O
.,O
,O
As,O
of,O
May,O
15,O
",",O
2011,O
there,O
have,O
been,O
over,O
"5,500",O
downloads,O
",",O
and,O
in,O
the,O
first,O
two,O
weeks,O
after,O
the,O
launch,O
there,O
were,O
over,O
"5,000",O
downloads,O
.,O
,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
anticipates,O
building,O
20,O
new,O
celebrity,O
apps,O
in,O
2011,O
.,O
,O
Interactive,O
Ad,O
Curtain,O
:,O
As,O
of,O
May,O
15,O
",",O
2011,O
",",O
the,O
Company,O
has,O
signed,O
and,O
executed,O
two,O
license,O
agreements,O
.,O
,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
anticipates,O
entering,O
into,O
20,O
to,O
40,O
additional,O
agreements,O
in,O
2011,O
.,O
,O
The,O
Company,O
earns,O
a,O
development,O
fee,O
to,O
create,O
mobile,O
apps,O
.,O
,O
It,O
also,O
earns,O
recurring,O
revenue,O
from,O
apps,O
using,O
its,O
interactive,O
ad,O
curtain,O
",",O
from,O
download,O
fees,O
for,O
the,O
premium,O
apps,O
built,O
",",O
and,O
from,O
app,O
upgrades,O
.,O
,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
intends,O
to,O
earn,O
additional,O
revenue,O
through,O
its,O
launch,O
of,O
local,O
ad,O
deal,O
apps,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
the,O
results,O
of,O
our,O
operations,O
for,O
the,O
periods,O
indicated,O
:,O
,O
For,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
our,O
net,O
revenue,O
decreased,O
approximately,O
16,O
%,O
to,O
$,O
"32,493",O
from,O
$,O
"38,851",O
for,O
the,O
quarter,O
ended,O
March,O
31,O
",",O
2010,O
.,O
,O
We,O
had,O
$,O
"11,250",O
of,O
revenue,O
generated,O
from,O
application,O
development,O
for,O
the,O
quarter,O
ended,O
March,O
31,O
",",O
2011,O
compared,O
to,O
$,O
"23,500",O
for,O
the,O
quarter,O
ended,O
March,O
31,O
",",O
2010,O
.,O
,O
The,O
reason,O
for,O
the,O
decline,O
was,O
the,O
change,O
in,O
our,O
business,O
model,O
from,O
the,O
development,O
of,O
Facebook,I-BUSINESS
games,O
to,O
app,O
development,O
",",O
and,O
the,O
completion,O
of,O
one,O
large,O
development,O
contract,O
.,O
,O
We,O
generated,O
$,O
"15,000",O
in,O
hosting,O
revenue,O
for,O
the,O
3,O
months,O
ended,O
March,O
31,O
",",O
2010,O
and,O
no,O
revenue,O
for,O
the,O
same,O
period,O
in,O
2011,O
.,O
,O
Hosting,O
revenue,O
is,O
a,O
periodic,O
fee,O
charged,O
to,O
host,O
and,O
maintain,O
a,O
partner,O
’,O
s,O
server,O
and,O
content,O
related,O
to,O
the,O
Bot,O
properties,O
",",O
a,O
business,O
that,O
we,O
have,O
phased,O
out,O
of,O
our,O
on-going,O
business,O
plan,O
.,O
,O
Our,O
revenue,O
from,O
Auctions,O
",",O
which,O
represents,O
the,O
sale,O
of,O
certain,O
products,O
through,O
an,O
online,O
auction,O
website,O
",",O
increased,O
100,O
%,O
from,O
$,O
"21,191",O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
compared,O
to,O
no,O
revenue,O
for,O
the,O
same,O
period,O
in,O
2010,O
.,O
,O
This,O
represents,O
a,O
new,O
business,O
that,O
we,O
are,O
now,O
pursuing,O
.,O
,O
Our,O
cost,O
of,O
revenue,O
was,O
$,O
"20,610",O
for,O
the,O
quarter,O
ended,O
March,O
31,O
",",O
2011,O
",",O
compared,O
with,O
$,O
0,O
for,O
the,O
quarter,O
ended,O
March,O
31,O
",",O
2010,O
.,O
,O
This,O
is,O
due,O
to,O
the,O
change,O
in,O
our,O
business,O
to,O
the,O
Auction,O
business,O
which,O
has,O
higher,O
direct,O
costs,O
associated,O
with,O
the,O
business,O
.,O
,O
We,O
incurred,O
operating,O
expenses,O
of,O
$,O
"222,444",O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
;,O
a,O
decrease,O
of,O
approximately,O
49,O
%,O
compared,O
to,O
$,O
"439,555",O
incurred,O
in,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2010,O
.,O
,O
Selling,O
",",O
general,O
and,O
administrative,O
expenses,O
were,O
$,O
"195,350",O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
compared,O
to,O
$,O
"373,088",O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2010,O
.,O
,O
Our,O
expenses,O
have,O
decreased,O
due,O
mainly,O
to,O
a,O
reduction,O
in,O
our,O
management,O
staff,O
.,O
,O
Research,O
and,O
development,O
expenses,O
were,O
$,O
"27,094",O
during,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
a,O
decrease,O
of,O
$,O
39K,O
or,O
59,O
%,O
",",O
as,O
compared,O
to,O
$,O
"66,467",O
for,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2010,O
.,O
,O
The,O
decrease,O
is,O
due,O
to,O
our,O
change,O
in,O
business,O
model,O
",",O
and,O
the,O
need,O
for,O
fewer,O
employees,O
and,O
outside,O
contractors,O
to,O
perform,O
development,O
services,O
.,O
,O
Our,O
net,O
loss,O
decreased,O
from,O
$,O
"402,154",O
for,O
the,O
quarter,O
ended,O
March,O
31,O
",",O
2010,O
compared,O
to,O
a,O
net,O
loss,O
of,O
$,O
"288,885",O
for,O
the,O
quarter,O
ended,O
March,O
31,O
",",O
2011,O
.,O
,O
The,O
significant,O
decrease,O
of,O
net,O
loss,O
was,O
mainly,O
attributable,O
to,O
the,O
change,O
of,O
overhead,O
through,O
the,O
reduction,O
of,O
management,O
and,O
staff,O
personnel,O
.,O
,O
The,O
Company,O
had,O
cash,O
and,O
cash,O
equivalents,O
of,O
$,O
"46,794",O
and,O
$,O
"68,181",O
and,O
at,O
March,O
31,O
",",O
2011,O
and,O
December,O
31,O
",",O
2010,O
",",O
respectively,O
.,O
,O
During,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
the,O
Company,O
used,O
$,O
"210,393",O
of,O
cash,O
in,O
operating,O
activities,O
.,O
,O
The,O
net,O
loss,O
of,O
$,O
"288,885",O
was,O
offset,O
by,O
a,O
non-cash,O
charge,O
for,O
compensation,O
expense,O
of,O
$,O
"10,000",O
and,O
a,O
$,O
"52,558",O
non-cash,O
charge,O
for,O
the,O
amortization,O
of,O
debt,O
discount,O
.,O
,O
During,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2010,O
",",O
the,O
Company,O
used,O
$,O
"180,121",O
of,O
cash,O
in,O
operating,O
activities,O
.,O
,O
The,O
net,O
loss,O
for,O
the,O
period,O
of,O
$,O
"402,154",O
was,O
offset,O
by,O
$,O
"189,090",O
relating,O
to,O
share,O
based,O
payments,O
.,O
,O
Cash,O
used,O
in,O
operating,O
activities,O
included,O
$,O
"30,544",O
for,O
accounts,O
receivable,O
and,O
$,O
"2,399",O
for,O
prepaid,O
expenses,O
.,O
,O
During,O
the,O
period,O
ending,O
March,O
31,O
",",O
2011,O
the,O
Company,O
invested,O
$,O
"10,494",O
in,O
website,O
development,O
and,O
other,O
fixed,O
assets,O
.,O
,O
There,O
were,O
no,O
investing,O
activities,O
in,O
the,O
three,O
month,O
period,O
ending,O
March,O
31,O
",",O
2010,O
.,O
,O
For,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
$,O
"149,500",O
was,O
generated,O
from,O
the,O
issuance,O
of,O
common,O
stock,O
for,O
cash,O
and,O
there,O
was,O
$,O
"50,000",O
net,O
generated,O
from,O
the,O
issuance,O
of,O
convertible,O
notes,O
",",O
compared,O
to,O
$,O
"365,000",O
in,O
cash,O
provided,O
by,O
financing,O
activities,O
for,O
the,O
three,O
month,O
period,O
ended,O
March,O
31,O
",",O
2010,O
.,O
,O
The,O
Company,O
has,O
no,O
outstanding,O
off-balance,O
sheet,O
arrangements,O
.,O
,O
The,O
preparation,O
of,O
our,O
financial,O
statements,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
in,I-LEGISLATION/ACT
the,I-LEGISLATION/ACT
United,I-LEGISLATION/ACT
States,I-LEGISLATION/ACT
(,O
“,O
U.S.,I-LEGISLATION/ACT
GAAP,I-LEGISLATION/ACT
”,O
),O
requires,O
management,O
to,O
make,O
judgments,O
",",O
assumptions,O
and,O
estimates,O
that,O
affect,O
the,O
amounts,O
reported,O
.,O
,O
A,O
critical,O
accounting,O
estimate,O
is,O
an,O
assumption,O
about,O
highly,O
uncertain,O
matters,O
and,O
could,O
have,O
a,O
material,O
effect,O
on,O
the,O
consolidated,O
financial,O
statements,O
if,O
another,O
",",O
also,O
reasonable,O
",",O
amount,O
were,O
used,O
or,O
a,O
change,O
in,O
the,O
estimate,O
is,O
reasonably,O
likely,O
from,O
period,O
to,O
period,O
.,O
,O
We,O
base,O
our,O
assumptions,O
on,O
historical,O
experience,O
and,O
on,O
other,O
estimates,O
that,O
we,O
believe,O
are,O
reasonable,O
under,O
the,O
circumstances,O
.,O
,O
Actual,O
results,O
could,O
differ,O
significantly,O
from,O
these,O
estimates,O
.,O
,O
There,O
were,O
no,O
changes,O
in,O
accounting,O
policies,O
or,O
significant,O
changes,O
in,O
accounting,O
estimates,O
from,O
the,O
2010,O
fiscal,O
year,O
.,O
,O
Revenue,O
Recognition,O
–,O
The,O
Company,O
records,O
sales,O
when,O
all,O
of,O
the,O
following,O
have,O
occurred,O
:,O
(,O
1,O
),O
persuasive,O
evidence,O
of,O
an,O
arrangement,O
exists,O
",",O
(,O
2,O
),O
the,O
product,O
is,O
delivered,O
",",O
(,O
3,O
),O
the,O
sales,O
price,O
to,O
the,O
customer,O
is,O
fixed,O
or,O
determinable,O
",",O
and,O
(,O
4,O
),O
collectability,O
of,O
the,O
related,O
customer,O
receivable,O
is,O
reasonably,O
assured,O
.,O
,O
In,O
addition,O
",",O
certain,O
revenue,O
contracts,O
are,O
classified,O
as,O
multiple,O
deliverables,O
when,O
:,O
(,O
1,O
),O
the,O
delivered,O
item,O
has,O
value,O
on,O
a,O
standalone,O
basis,O
",",O
(,O
2,O
),O
objective,O
and,O
reliable,O
evidence,O
exists,O
of,O
the,O
fair,O
value,O
on,O
the,O
undelivered,O
items,O
",",O
and,O
(,O
3,O
),O
delivery,O
or,O
performance,O
of,O
the,O
undelivered,O
items,O
must,O
be,O
probable,O
and,O
substantially,O
within,O
the,O
vendor,O
's,O
control,O
.,O
,O
There,O
is,O
no,O
stated,O
right,O
of,O
return,O
for,O
products,O
.,O
,O
Hosting,O
revenue,O
is,O
recognized,O
monthly,O
.,O
,O
Hosting,O
services,O
are,O
invoiced,O
to,O
customers,O
at,O
the,O
beginning,O
of,O
the,O
month,O
following,O
the,O
month,O
services,O
are,O
provided,O
.,O
,O
Advertising,O
and,O
sponsorships,O
on,O
owned,O
Internet,I-MISCELLANEOUS
properties,O
are,O
sold,O
on,O
a,O
cost,O
per,O
action,O
(,O
``,O
CPA,O
'',O
),O
basis,O
and,O
invoiced,O
to,O
the,O
customer,O
monthly,O
based,O
on,O
the,O
number,O
and,O
price,O
per,O
action,O
at,O
the,O
end,O
of,O
each,O
month,O
.,O
,O
Marketing,O
support,O
revenue,O
is,O
generated,O
as,O
a,O
result,O
of,O
the,O
media,O
and,O
marketing,O
services,O
provided,O
to,O
support,O
customer,O
Internet,I-MISCELLANEOUS
marketing,O
activities,O
.,O
,O
When,O
a,O
sales,O
arrangement,O
contains,O
multiple,O
elements,O
",",O
such,O
as,O
software,O
development,O
services,O
",",O
support,O
and,O
maintenance,O
",",O
revenue,O
is,O
allocated,O
to,O
each,O
element,O
based,O
on,O
its,O
relative,O
fair,O
value,O
.,O
,O
When,O
the,O
fair,O
value,O
of,O
an,O
undelivered,O
element,O
can,O
not,O
be,O
determined,O
",",O
the,O
Company,O
defers,O
revenue,O
for,O
the,O
delivered,O
elements,O
until,O
the,O
undelivered,O
elements,O
are,O
delivered,O
.,O
,O
Payments,O
received,O
in,O
advance,O
of,O
provision,O
of,O
services,O
are,O
deferred,O
until,O
earned,O
.,O
,O
Revenue,O
from,O
auction,O
sales,O
is,O
recognized,O
when,O
the,O
risks,O
of,O
ownership,O
and,O
title,O
pass,O
to,O
the,O
customer,O
",",O
which,O
is,O
generally,O
upon,O
shipment,O
of,O
the,O
products,O
.,O
,O
If,O
and,O
when,O
defective,O
products,O
are,O
returned,O
",",O
the,O
Company,O
exchanges,O
them,O
or,O
provides,O
a,O
credit,O
to,O
the,O
customer,O
.,O
,O
The,O
returned,O
products,O
are,O
shipped,O
back,O
to,O
the,O
supplier,O
and,O
the,O
Company,O
receives,O
a,O
credit,O
or,O
exchange,O
.,O
,O
Allowance,O
for,O
Doubtful,O
Accounts,O
–,O
The,O
Company,O
’,O
s,O
accounts,O
receivables,O
are,O
customer,O
obligations,O
due,O
under,O
trade,O
terms,O
",",O
carried,O
at,O
their,O
face,O
value,O
.,O
,O
The,O
Company,O
determines,O
its,O
allowance,O
for,O
doubtful,O
accounts,O
based,O
on,O
the,O
evaluation,O
of,O
the,O
aging,O
of,O
its,O
accounts,O
receivable,O
and,O
on,O
a,O
customer-by-customer,O
analysis,O
.,O
,O
Since,O
inception,O
",",O
the,O
Company,O
has,O
had,O
seven,O
customers,O
.,O
,O
All,O
customers,O
have,O
paid,O
their,O
invoices,O
timely,O
.,O
,O
The,O
Company,O
did,O
not,O
record,O
an,O
allowance,O
as,O
of,O
March,O
31,O
",",O
2011,O
or,O
December,O
31,O
",",O
2010,O
.,O
,O
Convertible,O
Notes,O
Payable,O
and,O
Derivative,O
Liabilities,O
-,O
The,O
Company,O
accounts,O
for,O
convertible,O
notes,O
payable,O
and,O
warrants,O
in,O
accordance,O
with,O
FASB,I-GOVERNMENT
ASC,B-LEGISLATION/ACT
815,O
",",O
Derivatives,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Hedgings,I-MISCELLANEOUS
.,O
,O
This,O
standard,O
requires,O
that,O
the,O
conversion,O
feature,O
of,O
convertible,O
debt,O
be,O
separated,O
from,O
the,O
host,O
contract,O
and,O
presented,O
as,O
a,O
derivative,O
instrument,O
if,O
certain,O
conditions,O
are,O
met,O
.,O
,O
FASB,I-GOVERNMENT
ASC,B-LEGISLATION/ACT
815,O
was,O
also,O
analyzed,O
to,O
determine,O
whether,O
the,O
debt,O
instrument,O
is,O
to,O
be,O
considered,O
a,O
conventional,O
convertible,O
debt,O
instrument,O
and,O
classified,O
in,O
stockholders,O
',O
equity,O
.,O
,O
The,O
convertible,O
notes,O
payable,O
were,O
evaluated,O
and,O
determined,O
not,O
to,O
be,O
conventionally,O
convertible,O
and,O
",",O
therefore,O
",",O
because,O
of,O
non-fixed,O
conversion,O
price,O
terms,O
under,O
the,O
associated,O
debt,O
agreement,O
",",O
the,O
embedded,O
conversion,O
option,O
was,O
bifurcated,O
and,O
has,O
been,O
accounted,O
for,O
as,O
a,O
derivative,O
liability,O
instrument,O
.,O
,O
The,O
accounting,O
guidance,O
also,O
requires,O
that,O
the,O
conversion,O
feature,O
be,O
recorded,O
at,O
fair,O
value,O
for,O
each,O
reporting,O
period,O
with,O
changes,O
in,O
fair,O
value,O
recorded,O
in,O
the,O
consolidated,O
statements,O
of,O
operations,O
.,O
,O
A,O
Black-Scholes,O
valuation,O
calculation,O
was,O
applied,O
to,O
the,O
conversion,O
feature,O
at,O
issuance,O
date,O
and,O
report,O
date,O
.,O
,O
The,O
Company,O
considers,O
it,O
to,O
be,O
a,O
level,O
2,O
type,O
instrument,O
in,O
accordance,O
with,O
FASB,I-GOVERNMENT
ASC,B-LEGISLATION/ACT
820-10,O
“,O
Fair,I-MISCELLANEOUS
value,I-MISCELLANEOUS
Measurements,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Disclosures,I-MISCELLANEOUS
”,O
as,O
the,O
inputs,O
needed,O
to,O
estimate,O
the,O
value,O
are,O
observable,O
either,O
directly,O
or,O
indirectly,O
.,O
,O
The,O
issuance,O
date,O
valuation,O
was,O
used,O
for,O
the,O
effective,O
debt,O
discount,O
that,O
these,O
instruments,O
represent,O
.,O
,O
The,O
debt,O
discount,O
is,O
amortized,O
over,O
the,O
nine-month,O
life,O
of,O
the,O
debt,O
using,O
the,O
effective,O
interest,O
method,O
.,O
,O
The,O
reporting,O
date,O
valuation,O
was,O
used,O
to,O
record,O
the,O
fair,O
value,O
of,O
the,O
instrument,O
at,O
the,O
end,O
of,O
the,O
reporting,O
period,O
with,O
any,O
difference,O
from,O
prior,O
period,O
calculations,O
reflected,O
in,O
the,O
consolidated,O
statement,O
of,O
operations,O
.,O
,O
Part,O
I,O
",",O
Item,O
3,O
.,O
,O
Quantitative,O
and,O
Qualitative,O
Disclosures,O
about,O
Market,O
Risk,O
.,O
,O
As,O
a,O
smaller,O
reporting,O
company,O
",",O
we,O
are,O
not,O
required,O
to,O
provide,O
this,O
disclosure,O
.,O
,O
Part,O
I,O
",",O
Item,O
4,O
.,O
,O
Controls,O
and,O
Procedures,O
.,O
,O
Regulations,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
require,O
public,O
companies,O
to,O
maintain,O
“,O
disclosure,O
controls,O
and,O
procedures,O
",",O
”,O
which,O
are,O
defined,O
to,O
mean,O
a,O
company,O
’,O
s,O
controls,O
and,O
other,O
procedures,O
that,O
are,O
designed,O
to,O
ensure,O
that,O
information,O
required,O
to,O
be,O
disclosed,O
in,O
the,O
reports,O
that,O
it,O
files,O
or,O
submits,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
is,O
recorded,O
",",O
processed,O
",",O
summarized,O
and,O
reported,O
",",O
within,O
the,O
time,O
periods,O
specified,O
in,O
the,O
SEC,I-GOVERNMENT
’,O
s,O
rules,O
and,O
forms,O
.,O
,O
We,O
conducted,O
an,O
evaluation,O
",",O
with,O
the,O
participation,O
of,O
our,O
Chief,O
Executive,O
Officer,O
",",O
of,O
the,O
effectiveness,O
of,O
the,O
design,O
and,O
operation,O
of,O
our,O
disclosure,O
controls,O
and,O
procedures,O
as,O
of,O
the,O
period,O
covered,O
by,O
this,O
Report,O
.,O
,O
Based,O
on,O
that,O
evaluation,O
",",O
our,O
Chief,O
Executive,O
Officer,O
has,O
concluded,O
that,O
as,O
of,O
March,O
31,O
",",O
2011,O
",",O
our,O
disclosure,O
controls,O
and,O
procedures,O
were,O
not,O
effective,O
at,O
the,O
reasonable,O
assurance,O
level,O
due,O
to,O
the,O
material,O
weaknesses,O
described,O
below,O
.,O
,O
A,O
material,O
weakness,O
is,O
a,O
control,O
deficiency,O
(,O
within,O
the,O
meaning,O
of,O
the,O
Public,I-GOVERNMENT
Company,I-GOVERNMENT
Accounting,I-GOVERNMENT
Oversight,I-GOVERNMENT
Board,I-GOVERNMENT
(,I-GOVERNMENT
PCAOB,I-GOVERNMENT
),I-GOVERNMENT
Auditing,B-LEGISLATION/ACT
Standard,I-LEGISLATION/ACT
No.,O
2,O
),O
or,O
combination,O
of,O
control,O
deficiencies,O
that,O
result,O
in,O
more,O
than,O
a,O
remote,O
likelihood,O
that,O
a,O
material,O
misstatement,O
of,O
the,O
annual,O
or,O
interim,O
financial,O
statements,O
will,O
not,O
be,O
prevented,O
or,O
detected,O
.,O
,O
Management,O
has,O
identified,O
the,O
following,O
four,O
material,O
weaknesses,O
in,O
our,O
disclosure,O
controls,O
and,O
procedures,O
:,O
,O
We,O
do,O
not,O
have,O
written,O
documentation,O
of,O
our,O
internal,O
control,O
policies,O
and,O
procedures,O
.,O
,O
Written,O
documentation,O
of,O
key,O
internal,O
controls,O
over,O
financial,O
reporting,O
is,O
a,O
requirement,O
of,O
Section,O
404,O
of,O
the,O
Sarbanes-Oxley,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Management,O
evaluated,O
the,O
impact,O
of,O
our,O
failure,O
to,O
have,O
written,O
documentation,O
of,O
our,O
internal,O
controls,O
and,O
procedures,O
on,O
our,O
assessment,O
of,O
our,O
disclosure,O
controls,O
and,O
procedures,O
and,O
has,O
concluded,O
that,O
the,O
control,O
deficiency,O
that,O
resulted,O
represented,O
a,O
material,O
weakness,O
.,O
,O
We,O
do,O
not,O
have,O
sufficient,O
segregation,O
of,O
duties,O
within,O
accounting,O
functions,O
",",O
which,O
is,O
a,O
basic,O
internal,O
control,O
.,O
,O
Due,O
to,O
our,O
size,O
and,O
nature,O
",",O
segregation,O
of,O
all,O
conflicting,O
duties,O
may,O
not,O
always,O
be,O
possible,O
and,O
may,O
not,O
be,O
economically,O
feasible,O
.,O
,O
However,O
",",O
to,O
the,O
extent,O
possible,O
",",O
the,O
initiation,O
of,O
transactions,O
",",O
the,O
custody,O
of,O
assets,O
and,O
the,O
recording,O
of,O
transactions,O
should,O
be,O
performed,O
by,O
separate,O
individuals,O
.,O
,O
Management,O
evaluated,O
the,O
impact,O
of,O
our,O
failure,O
to,O
have,O
segregation,O
of,O
duties,O
on,O
our,O
assessment,O
of,O
our,O
disclosure,O
controls,O
and,O
procedures,O
and,O
has,O
concluded,O
that,O
the,O
control,O
deficiency,O
that,O
resulted,O
represented,O
a,O
material,O
weakness,O
.,O
,O
We,O
do,O
not,O
have,O
review,O
and,O
supervision,O
procedures,O
for,O
financial,O
reporting,O
functions,O
.,O
,O
The,O
review,O
and,O
supervision,O
function,O
of,O
internal,O
control,O
relates,O
to,O
the,O
accuracy,O
of,O
financial,O
information,O
reported,O
.,O
,O
The,O
failure,O
to,O
review,O
and,O
supervise,O
could,O
allow,O
the,O
reporting,O
of,O
inaccurate,O
or,O
incomplete,O
financial,O
information,O
.,O
,O
Due,O
to,O
our,O
size,O
and,O
nature,O
",",O
review,O
and,O
supervision,O
may,O
not,O
always,O
be,O
possible,O
or,O
economically,O
feasible,O
.,O
,O
Management,O
evaluated,O
the,O
impact,O
of,O
our,O
significant,O
number,O
of,O
audit,O
adjustments,O
and,O
has,O
concluded,O
that,O
the,O
control,O
deficiency,O
that,O
resulted,O
represented,O
a,O
material,O
weakness,O
.,O
,O
We,O
do,O
not,O
currently,O
have,O
a,O
qualified,O
person,O
serving,O
as,O
Chief,O
Financial,O
Officer,O
.,O
,O
To,O
address,O
these,O
material,O
weaknesses,O
",",O
management,O
performed,O
additional,O
analyses,O
and,O
other,O
procedures,O
to,O
ensure,O
that,O
the,O
financial,O
statements,O
included,O
herein,O
fairly,O
present,O
",",O
in,O
all,O
material,O
respects,O
",",O
our,O
financial,O
position,O
",",O
results,O
of,O
operations,O
and,O
cash,O
flows,O
for,O
the,O
periods,O
presented,O
.,O
,O
During,O
the,O
three,O
months,O
ended,O
March,O
31,O
",",O
2011,O
",",O
the,O
Company,O
has,O
not,O
made,O
any,O
changes,O
to,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
Part,O
II,O
",",O
Item,O
1,O
.,O
,O
Part,O
II,O
",",O
Item,O
1A,O
.,O
,O
The,O
information,O
to,O
be,O
reported,O
under,O
this,O
item,O
has,O
not,O
changed,O
since,O
it,O
was,O
disclosed,O
in,O
the,O
previously,O
filed,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
",",O
dated,O
April,O
15,O
",",O
2011,O
.,O
,O
Part,O
II,O
",",O
Item,O
2,O
.,O
,O
Unregistered,O
Sales,O
of,O
Equity,O
Securities,O
and,O
Use,O
of,O
Proceeds,O
.,O
,O
Part,O
II,O
",",O
Item,O
3,O
.,O
,O
Part,O
II,O
",",O
Item,O
4,O
.,O
,O
Part,O
II,O
",",O
Item,O
5,O
.,O
,O
Part,O
II,O
",",O
Item,O
6,O
.,O
,O
The,O
following,O
exhibits,O
are,O
filed,O
herewith,O
or,O
incorporated,O
by,O
reference,O
:,O
,O
*,O
Filed,O
herewith,O
.,O
,O
In,O
accordance,O
with,O
Section,O
13,O
or,O
15,O
(,O
d,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
caused,O
this,O
Report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
.,O
,O
REACH,I-BUSINESS
MESSAGING,I-BUSINESS
HOLDINGS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
.,O
,O
I,O
",",O
Shane,I-PERSON
Gau,I-PERSON
",",O
certify,O
that,O
:,O
,O
In,O
connection,O
with,O
the,O
Quarterly,O
Report,O
of,O
Reach,I-BUSINESS
Messaging,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
“,O
Company,O
”,O
),O
on,O
Form,I-MISCELLANEOUS
10-Q,I-MISCELLANEOUS
for,O
the,O
period,O
ended,O
March,O
31,O
",",O
2011,O
",",O
as,O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
on,O
the,O
date,O
hereof,O
(,O
the,O
“,O
Report,O
”,O
),O
",",O
I,O
",",O
Shane,I-PERSON
Gau,I-PERSON
",",O
Chief,O
Executive,O
Officer,O
of,O
the,O
Company,O
",",O
certify,O
to,O
my,O
knowledge,O
and,O
in,O
my,O
capacity,O
as,O
an,O
officer,O
of,O
the,O
Company,O
",",O
pursuant,O
to,O
18,O
U.S.C.,I-LEGISLATION/ACT
Section,O
1350,O
",",O
as,O
adopted,O
pursuant,O
to,O
Section,O
906,O
of,O
the,O
Sarbanes-Oxley,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
2002,I-LEGISLATION/ACT
",",O
that,O
:,O
,O
A,O
certification,O
furnished,O
pursuant,O
to,O
this,O
Item,O
will,O
not,O
be,O
deemed,O
“,O
filed,O
”,O
for,O
purposes,O
of,O
section,O
18,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
15,O
U.S.C.,I-LEGISLATION/ACT
78r,O
),O
",",O
or,O
otherwise,O
subject,O
to,O
the,O
liability,O
of,O
that,O
section,O
.,O
,O
Such,O
certification,O
will,O
not,O
be,O
deemed,O
to,O
be,O
incorporated,O
by,O
reference,O
into,O
any,O
filing,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
or,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
except,O
to,O
the,O
extent,O
that,O
the,O
registrant,O
specifically,O
incorporates,O
it,O
by,O
reference,O
.,O
,O
-DOCSTART-,O
,O
Prospectus,O
Supplement,O
No.,O
10,O
Filed,O
Pursuant,O
to,O
Rule,O
424,O
(,O
b,O
),O
(,O
3,O
),O
Registration,O
Nos,O
.,O
,O
Check,O
the,O
appropriate,O
box,O
below,O
if,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filing,O
is,O
intended,O
to,O
simultaneously,O
satisfy,O
the,O
filing,O
obligation,O
of,O
the,O
registrants,O
under,O
any,O
of,O
the,O
following,O
provisions,O
(,O
see,O
General,O
Instruction,O
A.2,O
.,O
,O
On,O
January,O
7,O
",",O
2010,O
",",O
Energy,I-BUSINESS
Future,I-BUSINESS
Holdings,I-BUSINESS
Corp.,I-BUSINESS
issued,O
a,O
press,O
release,O
announcing,O
the,O
pricing,O
of,O
a,O
private,O
offering,O
of,O
$,O
500,O
million,O
principal,O
amount,O
of,O
10.0,O
%,O
senior,O
secured,O
notes,O
due,O
2020,O
(,O
the,O
Notes,O
),O
.,O
,O
A,O
copy,O
of,O
this,O
press,O
release,O
is,O
filed,O
as,O
Exhibit,O
99.1,O
.,O
,O
The,O
press,O
release,O
shall,O
not,O
constitute,O
an,O
offer,O
to,O
sell,O
",",O
or,O
the,O
solicitation,O
of,O
an,O
offer,O
to,O
buy,O
",",O
any,O
of,O
the,O
Notes,O
",",O
nor,O
shall,O
there,O
be,O
any,O
sale,O
of,O
the,O
Notes,O
in,O
any,O
state,O
in,O
which,O
such,O
offer,O
",",O
solicitation,O
or,O
sale,O
would,O
be,O
unlawful,O
prior,O
to,O
registration,O
or,O
qualification,O
under,O
the,O
securities,O
laws,O
of,O
such,O
state,O
.,O
,O
The,O
Notes,O
have,O
not,O
been,O
registered,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
(,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
or,O
any,O
state,O
securities,O
laws,O
and,O
may,O
not,O
be,O
offered,O
or,O
sold,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
absent,O
registration,O
or,O
an,O
applicable,O
exemption,O
from,O
registration,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
applicable,O
state,O
securities,O
laws,O
.,O
,O
The,O
Notes,O
will,O
be,O
offered,O
inside,O
the,O
United,I-LOCATION
States,I-LOCATION
only,O
to,O
qualified,O
institutional,O
buyers,O
in,O
reliance,O
on,O
Rule,O
144A,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
to,O
persons,O
outside,O
the,O
United,I-LOCATION
States,I-LOCATION
in,O
reliance,O
on,O
Regulation,I-LEGISLATION/ACT
S,I-LEGISLATION/ACT
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
thereunto,O
duly,O
authorized,O
.,O
,O
Exhibit,O
99.1,O
News,O
Release,O
FOR,O
IMMEDIATE,O
RELEASE,O
DALLAS,I-LOCATION
January,O
7,O
",",O
2010,O
Energy,I-BUSINESS
Future,I-BUSINESS
Holdings,I-BUSINESS
Corp.,I-BUSINESS
(,O
EFH,I-BUSINESS
Corp.,I-BUSINESS
),O
,O
announced,O
today,O
that,O
it,O
has,O
priced,O
a,O
private,O
offering,O
of,O
$,O
500,O
million,O
principal,O
amount,O
of,O
10.0,O
%,O
senior,O
secured,O
notes,O
due,O
2020,O
(,O
the,O
Notes,O
),O
.,O
,O
The,O
offering,O
is,O
expected,O
to,O
close,O
on,O
or,O
about,O
January,O
12,O
",",O
2010,O
",",O
subject,O
to,O
customary,O
closing,O
conditions,O
.,O
,O
intends,O
to,O
use,O
the,O
net,O
proceeds,O
from,O
the,O
offering,O
for,O
general,O
or,O
other,O
corporate,O
purposes,O
",",O
which,O
may,O
include,O
",",O
without,O
limitation,O
",",O
working,O
capital,O
needs,O
",",O
investment,O
in,O
business,O
initiatives,O
",",O
capital,O
expenditures,O
and,O
prepayment,O
or,O
repurchase,O
of,O
outstanding,O
indebtedness,O
of,O
EFH,I-BUSINESS
Corp.,I-BUSINESS
and/or,O
its,O
subsidiaries,O
.,O
,O
This,O
press,O
release,O
shall,O
not,O
constitute,O
an,O
offer,O
to,O
sell,O
",",O
or,O
the,O
solicitation,O
of,O
an,O
offer,O
to,O
buy,O
",",O
any,O
of,O
the,O
securities,O
described,O
herein,O
",",O
nor,O
shall,O
there,O
be,O
any,O
sale,O
of,O
these,O
securities,O
in,O
any,O
state,O
in,O
which,O
such,O
offer,O
",",O
solicitation,O
or,O
sale,O
would,O
be,O
unlawful,O
prior,O
to,O
registration,O
or,O
qualification,O
under,O
the,O
securities,O
laws,O
of,O
such,O
state,O
.,O
,O
The,O
securities,O
to,O
be,O
offered,O
have,O
not,O
been,O
registered,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
(,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
or,O
any,O
state,O
securities,O
laws,O
and,O
may,O
not,O
be,O
offered,O
or,O
sold,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
absent,O
registration,O
or,O
an,O
applicable,O
exemption,O
from,O
registration,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
applicable,O
state,O
securities,O
laws,O
.,O
,O
The,O
securities,O
will,O
be,O
offered,O
inside,O
the,O
United,I-LOCATION
States,I-LOCATION
only,O
to,O
qualified,O
institutional,O
buyers,O
in,O
reliance,O
on,O
Rule,O
144A,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
to,O
persons,O
outside,O
the,O
United,I-LOCATION
States,I-LOCATION
in,O
reliance,O
on,O
Regulation,I-LEGISLATION/ACT
S,I-LEGISLATION/ACT
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
This,O
notice,O
is,O
being,O
issued,O
pursuant,O
to,O
Rule,O
135c,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
About,O
EFH,I-BUSINESS
Corp.,I-BUSINESS
is,O
a,O
Dallas-based,I-MISCELLANEOUS
energy,O
holding,O
company,O
",",O
with,O
a,O
portfolio,O
of,O
competitive,O
and,O
regulated,O
energy,O
subsidiaries,O
",",O
primarily,O
in,O
Texas,I-LOCATION
",",O
including,O
TXU,I-BUSINESS
Energy,I-BUSINESS
",",O
Luminant,I-BUSINESS
and,O
Oncor,I-BUSINESS
.,O
,O
TXU,I-BUSINESS
Energy,I-BUSINESS
is,O
a,O
competitive,O
retailer,O
that,O
provides,O
electricity,O
and,O
related,O
services,O
to,O
more,O
than,O
2,O
million,O
electricity,O
customers,O
in,O
Texas,I-LOCATION
.,O
,O
Luminant,I-BUSINESS
is,O
a,O
competitive,O
power,O
generation,O
business,O
",",O
including,O
mining,O
",",O
wholesale,O
marketing,O
and,O
trading,O
",",O
construction,O
and,O
development,O
operations,O
.,O
,O
Luminant,I-BUSINESS
has,O
over,O
"17,500",O
MW,O
of,O
generation,O
in,O
Texas,I-LOCATION
",",O
including,O
"2,300",O
MW,O
fueled,O
by,O
nuclear,O
power,O
and,O
"7,200",O
MW,O
fueled,O
by,O
coal,O
.,O
,O
An,O
additional,O
800,O
MW,O
of,O
coal-fueled,O
generation,O
capacity,O
is,O
under,O
construction,O
and,O
expected,O
to,O
begin,O
commercial,O
operation,O
in,O
2010,O
.,O
,O
Luminant,I-BUSINESS
is,O
also,O
the,O
largest,O
purchaser,O
of,O
wind-generated,O
electricity,O
in,O
Texas,I-LOCATION
and,O
fifth,O
largest,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
Oncor,I-BUSINESS
is,O
a,O
regulated,O
electric,O
distribution,O
and,O
transmission,O
business,O
that,O
uses,O
superior,O
asset,O
management,O
skills,O
to,O
provide,O
reliable,O
electricity,O
delivery,O
to,O
consumers,O
.,O
,O
Oncor,I-BUSINESS
operates,O
the,O
largest,O
distribution,O
and,O
transmission,O
system,O
in,O
Texas,I-LOCATION
",",O
providing,O
power,O
to,O
three,O
million,O
electric,O
delivery,O
points,O
over,O
more,O
than,O
"102,000",O
miles,O
of,O
distribution,O
and,O
"14,000",O
miles,O
of,O
transmission,O
lines,O
.,O
,O
While,O
Oncor,I-BUSINESS
is,O
a,O
subsidiary,O
of,O
EFH,I-BUSINESS
Corp.,I-BUSINESS
",",O
Oncor,I-BUSINESS
reports,O
to,O
a,O
separate,O
and,O
independent,O
board,O
.,O
,O
Forward,O
Looking,O
Statements,O
This,O
press,O
release,O
contains,O
forward-looking,O
statements,O
",",O
which,O
are,O
subject,O
to,O
various,O
risks,O
and,O
uncertainties,O
that,O
could,O
cause,O
actual,O
results,O
to,O
differ,O
materially,O
from,O
management,O
s,O
current,O
projections,O
",",O
forecasts,O
",",O
estimates,O
and,O
expectations,O
.,O
,O
All,O
statements,O
",",O
other,O
than,O
statements,O
of,O
historical,O
facts,O
",",O
that,O
are,O
included,O
in,O
this,O
press,O
release,O
that,O
address,O
activities,O
",",O
events,O
or,O
developments,O
that,O
EFH,I-BUSINESS
Corp.,I-BUSINESS
expects,O
or,O
anticipates,O
to,O
occur,O
in,O
the,O
future,O
",",O
including,O
the,O
private,O
placement,O
of,O
senior,O
secured,O
notes,O
(,O
often,O
",",O
but,O
not,O
always,O
",",O
through,O
the,O
use,O
of,O
words,O
or,O
phrases,O
such,O
as,O
will,O
likely,O
result,O
",",O
are,O
expected,O
to,O
",",O
will,O
continue,O
",",O
is,O
anticipated,O
",",O
estimated,O
",",O
projection,O
",",O
target,O
",",O
goal,O
",",O
objective,O
and,O
outlook,O
),O
",",O
are,O
forward-looking,O
statements,O
.,O
,O
Although,O
EFH,I-BUSINESS
Corp.,I-BUSINESS
believes,O
that,O
in,O
making,O
any,O
such,O
forward-looking,O
statement,O
its,O
expectations,O
are,O
based,O
on,O
reasonable,O
assumptions,O
",",O
any,O
such,O
forward-looking,O
statement,O
involves,O
uncertainties,O
and,O
is,O
qualified,O
in,O
its,O
entirety,O
by,O
reference,O
to,O
the,O
discussion,O
of,O
risk,O
factors,O
in,O
EFH,I-BUSINESS
Corp.,I-BUSINESS
s,O
reports,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
(,O
including,O
the,O
sections,O
entitled,O
Risk,O
Factors,O
",",O
Management,O
s,O
Discussion,O
and,O
Analysis,O
of,O
Financial,O
Condition,O
and,O
Results,O
of,O
Operations,O
and,O
Forward-Looking,O
Statements,O
contained,O
therein,O
),O
.,I-MISCELLANEOUS
,O
-DOCSTART-,O
,O
Before,O
you,O
invest,O
",",O
you,O
may,O
want,O
to,O
review,O
the,O
fund,O
's,O
prospectus,O
",",O
which,O
contains,O
more,O
information,O
about,O
the,O
fund,O
and,O
its,O
risks,O
.,O
,O
You,O
can,O
find,O
the,O
fund,O
's,O
prospectus,O
",",O
Statement,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Additional,I-MISCELLANEOUS
Information,I-MISCELLANEOUS
(,O
SAI,I-MISCELLANEOUS
),O
and,O
other,O
information,O
about,O
the,O
fund,O
online,O
at,O
https,O
:,O
//www.dws-investments.com/mutualpros,O
.,O
,O
You,O
can,O
also,O
get,O
this,O
information,O
at,O
no,O
cost,O
by,O
e-mailing,O
a,O
request,O
to,O
inquiry.info,O
@,O
dws.com,O
",",O
calling,O
(,O
800,O
),O
621-1048,O
(,O
A,O
",",O
B,O
",",O
C,O
),O
",",O
(,O
800,O
),O
730-1313,O
(,O
INST,O
),O
and,O
(,O
800,O
),O
728-3337,O
(,O
S,O
),O
or,O
asking,O
your,O
financial,O
advisor,O
.,O
,O
The,O
prospectus,O
and,O
SAI,I-MISCELLANEOUS
",",O
both,O
dated,O
February,O
1,O
",",O
2011,O
",",O
as,O
revised,O
April,O
15,O
",",O
2011,O
",",O
as,O
may,O
be,O
supplemented,O
from,O
time,O
to,O
time,O
",",O
are,O
incorporated,O
by,O
reference,O
into,O
this,O
Summary,O
Prospectus,O
.,O
,O
The,O
fund,O
seeks,O
high,O
current,O
income,O
",",O
liquidity,O
and,O
security,O
of,O
principal,O
.,O
,O
These,O
are,O
the,O
fees,O
and,O
expenses,O
you,O
may,O
pay,O
when,O
you,O
buy,O
and,O
hold,O
shares,O
.,O
,O
You,O
may,O
qualify,O
for,O
sales,O
charge,O
discounts,O
if,O
you,O
and,O
your,O
immediate,O
family,O
invest,O
",",O
or,O
agree,O
to,O
invest,O
in,O
the,O
future,O
",",O
at,O
least,O
$,O
"100,000",O
in,O
DWS,I-BUSINESS
funds,O
.,O
,O
More,O
information,O
about,O
these,O
and,O
other,O
discounts,O
is,O
available,O
from,O
your,O
financial,O
professional,O
and,O
in,O
Choosing,O
a,O
Share,O
Class,O
in,O
the,O
prospectus,O
(,O
p,O
.,O
,O
66,O
),O
and,O
Purchase,O
and,O
Redemption,O
of,O
Shares,O
in,O
the,O
fund,O
's,O
SAI,I-MISCELLANEOUS
(,O
p.,O
II-17,O
),O
.,O
,O
SHAREHOLDER,O
FEES,O
(,O
paid,O
directly,O
from,O
your,O
investment,O
),O
,O
A,O
B,O
C,O
INST,O
S,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
-,O
,O
Maximum,O
sales,O
charge,O
(,O
load,O
),O
imposed,O
on,O
purchases,O
",",O
as,O
%,O
of,O
offering,O
price,O
2.75,O
None,O
None,O
None,O
None,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
Maximum,O
deferred,O
sales,O
charge,O
(,O
load,O
),O
",",O
as,O
%,O
of,O
redemption,O
proceeds,O
None,O
(,O
),O
4.00,O
1.00,O
None,O
None,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
,O
ANNUAL,O
FUND,O
OPERATING,O
EXPENSES,O
(,O
expenses,O
that,O
you,O
pay,O
each,O
year,O
as,O
a,O
%,O
of,O
the,O
value,O
of,O
your,O
investment,O
),O
,O
A,O
B,O
C,O
INST,O
S,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
,O
Management,O
fee,O
0.32,O
0.32,O
0.32,O
0.32,O
0.32,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
Distribution/service,O
(,O
12b-1,O
),O
fees,O
0.23,O
0.99,O
1.00,O
None,O
None,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
Other,O
expenses,O
0.25,O
0.41,O
0.24,O
0.19,O
0.30,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
TOTAL,O
ANNUAL,O
FUND,O
OPERATING,O
EXPENSES,O
0.80,O
1.72,O
1.56,O
0.51,O
0.62,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
,O
This,O
Example,O
is,O
intended,O
to,O
help,O
you,O
compare,O
the,O
cost,O
of,O
investing,O
in,O
the,O
fund,O
with,O
the,O
cost,O
of,O
investing,O
in,O
other,O
mutual,O
funds,O
.,O
,O
The,O
Example,O
assumes,O
that,O
you,O
invest,O
$,O
"10,000",O
in,O
the,O
fund,O
for,O
the,O
time,O
periods,O
indicated,O
and,O
then,O
redeem,O
all,O
of,O
your,O
shares,O
at,O
the,O
end,O
of,O
those,O
periods,O
.,O
,O
The,O
Example,O
also,O
assumes,O
that,O
your,O
investment,O
has,O
a,O
5,O
%,O
return,O
each,O
year,O
and,O
that,O
the,O
fund,O
's,O
operating,O
expenses,O
remain,O
the,O
same,O
.,O
,O
Although,O
your,O
actual,O
costs,O
may,O
be,O
higher,O
or,O
lower,O
",",O
based,O
on,O
these,O
assumptions,O
your,O
costs,O
would,O
be,O
:,O
,O
YEARS,O
A,O
B,O
C,O
INST,O
S,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
,O
1,O
$,O
354,O
$,O
575,O
$,O
259,O
$,O
52,O
$,O
63,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
-,O
--,O
-,O
3,O
523,O
842,O
493,O
164,O
199,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
-,O
--,O
-,O
5,O
707,O
"1,133",O
850,O
285,O
346,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
-,O
--,O
-,O
10,O
"1,238",O
"1,561",O
"1,856",O
640,O
774,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
-,O
--,O
-,O
,O
You,O
would,O
pay,O
the,O
following,O
expenses,O
if,O
you,O
did,O
not,O
redeem,O
your,O
shares,O
:,O
,O
YEARS,O
A,O
B,O
C,O
INST,O
S,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
,O
1,O
$,O
354,O
$,O
175,O
$,O
159,O
$,O
52,O
$,O
63,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
-,O
--,O
-,O
3,O
523,O
542,O
493,O
164,O
199,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
-,O
--,O
-,O
5,O
707,O
933,O
850,O
285,O
346,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
-,O
--,O
-,O
10,O
"1,238",O
"1,561",O
"1,856",O
640,O
774,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
-,O
--,O
-,O
,O
Class,O
B,O
converts,O
to,O
Class,O
A,O
after,O
six,O
years,O
;,O
the,O
Example,O
for,O
Class,O
B,O
reflects,O
Class,O
A,O
fees,O
after,O
the,O
conversion,O
.,O
,O
The,O
fund,O
pays,O
transaction,O
costs,O
",",O
such,O
as,O
commissions,O
",",O
when,O
it,O
buys,O
and,O
sells,O
securities,O
(,O
or,O
``,O
turns,O
over,O
'',O
its,O
portfolio,O
),O
.,O
,O
A,O
higher,O
portfolio,O
turnover,O
may,O
indicate,O
higher,O
transaction,O
costs,O
and,O
may,O
mean,O
higher,O
taxes,O
if,O
you,O
are,O
investing,O
in,O
a,O
taxable,O
account,O
.,O
,O
These,O
costs,O
are,O
not,O
reflected,O
in,O
annual,O
fund,O
operating,O
expenses,O
or,O
in,O
the,O
expense,O
example,O
",",O
and,O
can,O
affect,O
the,O
fund,O
's,O
performance,O
.,O
,O
Portfolio,O
turnover,O
rate,O
for,O
fiscal,O
year,O
2010,O
:,O
186,O
%,O
.,O
,O
Under,O
normal,O
circumstances,O
",",O
the,O
fund,O
invests,O
at,O
least,O
80,O
%,O
of,O
net,O
assets,O
",",O
plus,O
the,O
amount,O
of,O
any,O
borrowings,O
for,O
investment,O
purposes,O
",",O
in,O
securities,O
backed,O
by,O
the,O
full,O
faith,O
and,O
credit,O
of,O
the,O
US,O
government,O
",",O
including,O
related,O
repurchase,O
agreements,O
(,O
the,O
``,O
80,O
%,O
test,O
'',O
),O
.,O
,O
Within,O
the,O
80,O
%,O
test,O
",",O
the,O
fund,O
invests,O
principally,O
in,O
Ginnie,I-GOVERNMENT
Maes,I-GOVERNMENT
(,O
mortgage-backed,O
securities,O
issued,O
or,O
guaranteed,O
by,O
the,O
Government,I-GOVERNMENT
National,I-GOVERNMENT
Mortgage,I-GOVERNMENT
Association,I-GOVERNMENT
(,O
GNMA,I-GOVERNMENT
),O
),O
",",O
,O
but,O
may,O
also,O
invest,O
in,O
US,I-GOVERNMENT
Treasuries,I-GOVERNMENT
and,O
other,O
securities,O
that,O
are,O
backed,O
by,O
the,O
full,O
faith,O
and,O
credit,O
of,O
the,O
US,I-LOCATION
government,O
.,O
,O
Outside,O
the,O
80,O
%,O
test,O
",",O
the,O
fund,O
may,O
also,O
invest,O
in,O
other,O
debt,O
and,O
mortgage-backed,O
securities,O
",",O
including,O
securities,O
that,O
are,O
issued,O
by,O
US,I-LOCATION
government,O
agencies,O
or,O
instrumentalities,O
but,O
are,O
not,O
backed,O
by,O
the,O
full,O
faith,O
and,O
credit,O
of,O
the,O
US,I-LOCATION
government,O
.,O
,O
In,O
deciding,O
which,O
types,O
of,O
government,O
bonds,O
to,O
buy,O
and,O
sell,O
",",O
portfolio,O
management,O
first,O
considers,O
the,O
relative,O
attractiveness,O
of,O
US,I-GOVERNMENT
Treasuries,I-GOVERNMENT
compared,O
to,O
other,O
US,I-LOCATION
government,O
and,O
agency,O
securities,O
and,O
then,O
determines,O
allocations,O
.,O
,O
Their,O
decisions,O
are,O
generally,O
based,O
on,O
a,O
number,O
of,O
factors,O
",",O
including,O
changes,O
in,O
supply,O
and,O
demand,O
within,O
the,O
bond,O
market,O
.,O
,O
In,O
choosing,O
individual,O
bonds,O
",",O
portfolio,O
management,O
reviews,O
each,O
bond,O
's,O
fundamentals,O
",",O
compares,O
the,O
yields,O
of,O
shorter,O
maturity,O
bonds,O
to,O
those,O
of,O
longer,O
maturity,O
bonds,O
and,O
uses,O
technical,O
analysis,O
to,O
project,O
prepayment,O
rates,O
and,O
other,O
factors,O
that,O
could,O
affect,O
a,O
bond,O
's,O
attractiveness,O
.,O
,O
Portfolio,O
management,O
may,O
also,O
adjust,O
the,O
duration,O
(,O
a,O
measure,O
of,O
sensitivity,O
to,O
interest,O
rate,O
movements,O
),O
of,O
the,O
fund,O
's,O
portfolio,O
",",O
based,O
upon,O
their,O
analysis,O
.,O
,O
GLOBAL,O
TACTICAL,O
ASSET,O
ALLOCATION,O
OVERLAY,O
STRATEGY,O
.,O
,O
In,O
addition,O
to,O
the,O
fund,O
's,O
policy,O
of,O
investing,O
at,O
least,O
80,O
%,O
of,O
its,O
assets,O
in,O
securities,O
backed,O
by,O
the,O
full,O
faith,O
and,O
credit,O
of,O
the,O
US,I-LOCATION
government,O
",",O
portfolio,O
management,O
seeks,O
to,O
enhance,O
returns,O
by,O
employing,O
a,O
global,O
tactical,O
asset,O
allocation,O
(,O
GTAA,O
),O
overlay,O
strategy,O
.,O
,O
This,O
strategy,O
attempts,O
to,O
take,O
advantage,O
of,O
inefficiencies,O
within,O
global,O
bond,O
and,O
currency,O
markets,O
.,O
,O
The,O
strategy,O
is,O
implemented,O
through,O
the,O
use,O
of,O
derivatives,O
",",O
which,O
are,O
contracts,O
or,O
other,O
instruments,O
whose,O
value,O
is,O
based,O
on,O
",",O
for,O
example,O
",",O
indices,O
",",O
currencies,O
or,O
securities,O
.,O
,O
The,O
strategy,O
primarily,O
uses,O
exchange-traded,O
futures,O
contracts,O
and,O
over-the-counter,O
forward,O
currency,O
contracts,O
.,O
,O
Outside,O
of,O
the,O
GTAA,O
strategy,O
",",O
portfolio,O
management,O
generally,O
may,O
use,O
futures,O
contracts,O
",",O
interest,O
rate,O
swaps,O
",",O
total,O
return,O
swaps,O
and,O
options,O
on,O
interest,O
rate,O
swaps,O
",",O
and,O
futures,O
contracts,O
",",O
which,O
are,O
types,O
of,O
derivatives,O
(,O
a,O
contract,O
whose,O
value,O
is,O
based,O
on,O
",",O
for,O
example,O
",",O
indices,O
",",O
currencies,O
or,O
securities,O
),O
",",O
for,O
duration,O
management,O
(,O
i.e.,O
",",O
reducing,O
or,O
increasing,O
the,O
sensitivity,O
of,O
the,O
fund,O
's,O
portfolio,O
to,O
interest,O
rate,O
changes,O
),O
.,O
,O
In,O
addition,O
",",O
portfolio,O
management,O
generally,O
may,O
use,O
options,O
on,O
US,I-LOCATION
government,O
agency,O
mortgage-backed,O
to-be-announced,O
securities,O
to,O
enhance,O
potential,O
gain,O
.,O
,O
The,O
fund,O
may,O
also,O
use,O
various,O
types,O
of,O
derivatives,O
(,O
i,O
),O
for,O
hedging,O
purposes,O
;,O
(,O
ii,O
),O
for,O
risk,O
management,O
;,O
(,O
iii,O
),O
for,O
non-hedging,O
purposes,O
to,O
seek,O
to,O
enhance,O
potential,O
gains,O
;,O
or,O
(,O
iv,O
),O
as,O
a,O
substitute,O
for,O
direct,O
investment,O
in,O
a,O
particular,O
asset,O
class,O
or,O
to,O
keep,O
cash,O
on,O
hand,O
to,O
meet,O
shareholder,O
redemptions,O
.,O
,O
The,O
fund,O
may,O
lend,O
securities,O
(,O
up,O
to,O
one-third,O
of,O
total,O
assets,O
),O
to,O
approved,O
institutions,O
.,O
,O
There,O
are,O
several,O
risk,O
factors,O
that,O
could,O
hurt,O
the,O
fund,O
's,O
performance,O
",",O
cause,O
you,O
to,O
lose,O
money,O
or,O
cause,O
the,O
fund,O
's,O
performance,O
to,O
trail,O
that,O
of,O
other,O
investments,O
.,O
,O
The,O
fund,O
may,O
not,O
achieve,O
its,O
investment,O
objective,O
",",O
and,O
is,O
not,O
intended,O
to,O
be,O
a,O
complete,O
investment,O
program,O
.,O
,O
An,O
investment,O
in,O
the,O
fund,O
is,O
not,O
a,O
deposit,O
of,O
a,O
bank,O
and,O
is,O
not,O
insured,O
or,O
guaranteed,O
by,O
the,O
Federal,I-GOVERNMENT
Deposit,I-GOVERNMENT
Insurance,I-GOVERNMENT
Corporation,I-GOVERNMENT
or,O
any,O
other,O
governmental,O
agency,O
.,O
,O
INTEREST,O
RATE,O
RISK,O
.,O
,O
When,O
interest,O
rates,O
rise,O
",",O
prices,O
of,O
debt,O
securities,O
generally,O
decline,O
.,O
,O
The,O
longer,O
the,O
duration,O
of,O
the,O
fund,O
's,O
debt,O
securities,O
",",O
the,O
more,O
sensitive,O
it,O
will,O
be,O
to,O
interest,O
rate,O
changes,O
.,O
,O
(,O
As,O
a,O
general,O
rule,O
",",O
a,O
1,O
%,O
rise,O
in,O
interest,O
rates,O
means,O
a,O
1,O
%,O
fall,O
in,O
value,O
for,O
every,O
year,O
of,O
duration,O
.,O
),O
,O
Risks,O
associated,O
with,O
derivatives,O
include,O
the,O
risk,O
that,O
the,O
derivative,O
is,O
not,O
well,O
correlated,O
with,O
the,O
security,O
",",O
index,O
or,O
currency,O
to,O
which,O
it,O
relates,O
;,O
the,O
risk,O
that,O
derivatives,O
may,O
result,O
in,O
losses,O
or,O
missed,O
opportunities,O
;,O
the,O
risk,O
that,O
the,O
fund,O
will,O
be,O
unable,O
to,O
sell,O
the,O
derivative,O
because,O
of,O
an,O
illiquid,O
secondary,O
market,O
;,O
the,O
risk,O
that,O
a,O
counterparty,O
is,O
unwilling,O
or,O
unable,O
to,O
meet,O
its,O
obligation,O
;,O
and,O
the,O
risk,O
that,O
the,O
derivative,O
transaction,O
could,O
expose,O
the,O
fund,O
to,O
the,O
effects,O
of,O
leverage,O
",",O
which,O
could,O
increase,O
the,O
fund,O
's,O
exposure,O
to,O
the,O
market,O
and,O
magnify,O
potential,O
losses,O
.,O
,O
The,O
success,O
of,O
the,O
GTAA,O
strategy,O
depends,O
",",O
in,O
part,O
",",O
on,O
portfolio,O
management,O
's,O
ability,O
to,O
analyze,O
the,O
correlation,O
between,O
various,O
global,O
markets,O
and,O
asset,O
classes,O
.,O
,O
If,O
portfolio,O
management,O
's,O
correlation,O
analysis,O
proves,O
to,O
be,O
incorrect,O
",",O
losses,O
to,O
the,O
fund,O
may,O
be,O
significant,O
and,O
may,O
substantially,O
exceed,O
the,O
intended,O
level,O
of,O
market,O
exposure,O
for,O
the,O
GTAA,O
strategy,O
.,O
,O
As,O
part,O
of,O
the,O
GTAA,O
strategy,O
",",O
the,O
fund,O
will,O
be,O
exposed,O
to,O
the,O
risks,O
of,O
non-US,I-MISCELLANEOUS
currency,O
markets,O
",",O
and,O
global,O
bond,O
markets,O
.,O
,O
Foreign,O
currency,O
rates,O
may,O
fluctuate,O
significantly,O
over,O
short,O
periods,O
of,O
time,O
for,O
a,O
number,O
of,O
reasons,O
",",O
including,O
changes,O
in,O
interest,O
rates,O
and,O
economic,O
or,O
political,O
developments,O
in,O
the,O
US,O
or,O
abroad,O
.,O
,O
Global,O
bond,O
markets,O
may,O
also,O
fluctuate,O
for,O
the,O
same,O
or,O
similar,O
reasons,O
.,O
,O
As,O
a,O
result,O
",",O
the,O
fund,O
's,O
exposure,O
to,O
foreign,O
currencies,O
and,O
global,O
bond,O
markets,O
could,O
cause,O
lower,O
returns,O
or,O
even,O
losses,O
to,O
the,O
fund,O
.,O
,O
Although,O
portfolio,O
management,O
seeks,O
to,O
limit,O
these,O
risks,O
through,O
the,O
aggregation,O
of,O
various,O
long,O
and,O
short,O
positions,O
",",O
there,O
can,O
be,O
no,O
assurance,O
that,O
they,O
will,O
be,O
able,O
to,O
do,O
so,O
.,O
,O
SECURITY,O
SELECTION,O
RISK,O
.,O
,O
The,O
securities,O
in,O
the,O
fund,O
's,O
portfolio,O
may,O
decline,O
in,O
value,O
.,O
,O
Portfolio,O
management,O
could,O
be,O
wrong,O
in,O
its,O
analysis,O
of,O
industries,O
",",O
companies,O
",",O
economic,O
trends,O
",",O
the,O
relative,O
attractiveness,O
of,O
different,O
securities,O
or,O
other,O
matters,O
.,O
,O
The,O
fund,O
's,O
performance,O
could,O
be,O
hurt,O
if,O
an,O
issuer,O
of,O
a,O
debt,O
security,O
suffers,O
an,O
adverse,O
change,O
in,O
financial,O
condition,O
that,O
results,O
in,O
a,O
payment,O
default,O
",",O
security,O
downgrade,O
or,O
inability,O
to,O
meet,O
a,O
financial,O
obligation,O
.,O
,O
A,O
financial,O
institution,O
or,O
other,O
counterparty,O
with,O
whom,O
the,O
fund,O
does,O
business,O
",",O
or,O
that,O
underwrites,O
",",O
distributes,O
or,O
guarantees,O
any,O
investments,O
or,O
contracts,O
that,O
the,O
fund,O
owns,O
or,O
is,O
otherwise,O
exposed,O
to,O
",",O
may,O
decline,O
in,O
financial,O
health,O
and,O
become,O
unable,O
to,O
honor,O
its,O
commitments,O
.,O
,O
This,O
could,O
cause,O
losses,O
for,O
the,O
fund,O
or,O
could,O
delay,O
the,O
return,O
or,O
delivery,O
of,O
collateral,O
or,O
other,O
assets,O
to,O
the,O
fund,O
.,O
,O
In,O
certain,O
situations,O
",",O
it,O
may,O
be,O
difficult,O
or,O
impossible,O
to,O
sell,O
an,O
investment,O
in,O
an,O
orderly,O
fashion,O
at,O
an,O
acceptable,O
price,O
.,O
,O
PREPAYMENT,O
AND,O
EXTENSION,O
RISK,O
.,O
,O
When,O
interest,O
rates,O
fall,O
",",O
issuers,O
of,O
high,O
interest,O
debt,O
obligations,O
may,O
pay,O
off,O
the,O
debts,O
earlier,O
than,O
expected,O
(,O
prepayment,O
risk,O
),O
",",O
and,O
the,O
fund,O
may,O
have,O
to,O
reinvest,O
the,O
proceeds,O
at,O
lower,O
yields,O
.,O
,O
When,O
interest,O
rates,O
rise,O
",",O
issuers,O
of,O
lower,O
interest,O
debt,O
obligations,O
may,O
pay,O
off,O
the,O
debts,O
later,O
than,O
expected,O
(,O
extension,O
risk,O
),O
",",O
thus,O
keeping,O
the,O
fund,O
's,O
assets,O
tied,O
up,O
in,O
lower,O
interest,O
debt,O
obligations,O
.,O
,O
Ultimately,O
",",O
any,O
unexpected,O
behavior,O
in,O
interest,O
rates,O
could,O
increase,O
the,O
volatility,O
of,O
the,O
fund,O
's,O
share,O
price,O
and,O
yield,O
and,O
could,O
hurt,O
fund,O
performance,O
.,O
,O
Prepayments,O
could,O
also,O
create,O
capital,O
gains,O
tax,O
liability,O
in,O
some,O
instances,O
.,O
,O
If,O
market,O
conditions,O
make,O
it,O
difficult,O
to,O
value,O
some,O
investments,O
",",O
the,O
fund,O
may,O
value,O
these,O
investments,O
using,O
more,O
subjective,O
methods,O
",",O
such,O
as,O
fair,O
value,O
pricing,O
.,O
,O
In,O
such,O
cases,O
",",O
the,O
value,O
determined,O
for,O
an,O
investment,O
could,O
be,O
different,O
than,O
the,O
value,O
realized,O
upon,O
such,O
investment,O
's,O
sale,O
.,O
,O
As,O
a,O
result,O
",",O
you,O
could,O
pay,O
more,O
than,O
the,O
market,O
value,O
when,O
buying,O
fund,O
shares,O
or,O
receive,O
less,O
than,O
the,O
market,O
value,O
when,O
selling,O
fund,O
shares,O
.,O
,O
SECURITIES,O
LENDING,O
RISK,O
.,O
,O
Any,O
decline,O
in,O
the,O
value,O
of,O
a,O
portfolio,O
security,O
that,O
occurs,O
while,O
the,O
security,O
is,O
out,O
on,O
loan,O
is,O
borne,O
by,O
the,O
fund,O
",",O
and,O
will,O
adversely,O
affect,O
performance,O
.,O
,O
Also,O
",",O
there,O
may,O
be,O
delays,O
in,O
recovery,O
of,O
securities,O
loaned,O
or,O
even,O
a,O
loss,O
of,O
rights,O
in,O
the,O
collateral,O
should,O
the,O
borrower,O
of,O
the,O
securities,O
fail,O
financially,O
while,O
holding,O
the,O
security,O
.,O
,O
How,O
a,O
fund,O
's,O
returns,O
vary,O
from,O
year,O
to,O
year,O
can,O
give,O
an,O
idea,O
of,O
its,O
risk,O
;,O
so,O
can,O
comparing,O
fund,O
performance,O
to,O
overall,O
market,O
performance,O
(,O
as,O
measured,O
by,O
an,O
appropriate,O
market,O
index,O
),O
.,O
,O
Past,O
performance,O
may,O
not,O
indicate,O
future,O
results,O
.,O
,O
All,O
performance,O
figures,O
below,O
assume,O
that,O
dividends,O
were,O
reinvested,O
.,O
,O
For,O
more,O
recent,O
performance,O
figures,O
",",O
go,O
to,O
www.dws-investments.com,O
(,O
the,O
Web,O
site,O
does,O
not,O
form,O
a,O
part,O
of,O
this,O
prospectus,O
),O
or,O
call,O
the,O
phone,O
number,O
for,O
your,O
share,O
class,O
included,O
in,O
this,O
prospectus,O
.,O
,O
CALENDAR,O
YEAR,O
TOTAL,O
RETURNS,O
(,O
%,O
),O
(,O
Class,O
A,O
),O
,O
These,O
year-by-year,O
returns,O
do,O
not,O
include,O
sales,O
charges,O
",",O
and,O
would,O
be,O
lower,O
if,O
they,O
did,O
.,O
,O
Returns,O
for,O
other,O
classes,O
were,O
different,O
and,O
are,O
not,O
shown,O
here,O
.,O
,O
[,O
BAR,O
GRAPHIC,O
OMITTED,O
HERE,O
],O
,O
[,O
BAR,O
GRAPHIC,O
DATA,O
],O
,O
AVERAGE,O
ANNUAL,O
TOTAL,O
RETURNS,O
(,O
For,O
periods,O
ended,O
12/31/2010,O
expressed,O
as,O
a,O
%,O
),O
,O
After-tax,O
returns,O
(,O
which,O
are,O
shown,O
only,O
for,O
Class,O
A,O
and,O
would,O
be,O
different,O
for,O
other,O
classes,O
),O
reflect,O
the,O
historical,O
highest,O
individual,O
federal,O
income,O
tax,O
rates,O
",",O
but,O
do,O
not,O
reflect,O
any,O
state,O
or,O
local,O
taxes,O
.,O
,O
Your,O
actual,O
after-tax,O
returns,O
may,O
be,O
different,O
.,O
,O
After-tax,O
returns,O
are,O
not,O
relevant,O
to,O
shares,O
held,O
in,O
an,O
IRA,O
",",O
401,O
(,O
k,O
),O
or,O
other,O
tax-advantaged,O
investment,O
plan,O
.,O
,O
Index,O
comparison,O
for,O
Class,O
S,O
shares,O
began,O
on,O
7/31/2005,O
.,O
,O
CLASS,O
1,O
5,O
10,O
INCEPTION,O
YEAR,O
YEARS,O
YEARS,O
SINCE,O
INCEPTION,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
,O
CLASS,O
A,O
before,O
tax,O
10/1/1979,O
3.21,O
5.09,O
4.87,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
After,O
tax,O
on,O
distributions,O
(,O
),O
1.70,O
3.33,O
3.10,O
-,O
After,O
tax,O
on,O
distribu-,O
tions,O
and,O
sale,O
of,O
fund,O
shares,O
2.08,O
3.30,O
3.09,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
CLASS,O
B,O
before,O
tax,O
5/31/1994,O
2.31,O
4.60,O
4.61,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
CLASS,O
C,O
before,O
tax,O
5/31/1994,O
5.43,O
4.86,O
4.33,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
INST,O
CLASS,O
before,O
tax,O
7/3/1995,O
6.40,O
5.92,O
5.40,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
BARCLAYS,I-MISCELLANEOUS
CAPITAL,I-MISCELLANEOUS
GNMA,I-MISCELLANEOUS
INDEX,I-MISCELLANEOUS
(,O
reflects,O
no,O
deduction,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
6.67,O
6.29,O
5.86,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
CLASS,O
S,O
before,O
tax,O
7/29/2005,O
6.44,O
5.88,O
-,O
5.63,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
BARCLAYS,I-MISCELLANEOUS
CAPITAL,I-MISCELLANEOUS
GNMA,I-MISCELLANEOUS
INDEX,I-MISCELLANEOUS
(,O
reflects,O
no,O
deduction,O
for,O
fees,O
",",O
expenses,O
or,O
taxes,O
),O
6.67,O
6.29,O
-,O
6.08,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
,O
Deutsche,I-BUSINESS
Investment,I-BUSINESS
Management,I-BUSINESS
Americas,I-BUSINESS
Inc.,I-BUSINESS
,O
WILLIAM,I-PERSON
CHEPOLIS,I-PERSON
",",O
CFA,O
",",O
MANAGING,O
DIRECTOR,O
.,O
,O
Portfolio,O
Manager,O
of,O
the,O
fund,O
.,O
,O
Joined,O
the,O
fund,O
in,O
2002,O
.,O
,O
JOHN,I-PERSON
D.,I-PERSON
RYAN,I-PERSON
",",O
DIRECTOR,O
.,O
,O
Portfolio,O
Manager,O
of,O
the,O
fund,O
.,O
,O
Joined,O
the,O
fund,O
in,O
2010,O
.,O
,O
OHN,I-PERSON
CHOE,I-PERSON
",",O
CFA,O
",",O
ASSISTANT,O
VICE,O
PRESIDENT,O
.,O
,O
Portfolio,O
Manager,O
of,O
the,O
fund,O
.,O
,O
Joined,O
the,O
fund,O
in,O
2010,O
.,O
,O
QS,I-BUSINESS
Investors,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
QS,I-BUSINESS
Investors,I-BUSINESS
),O
,O
ROBERT,I-PERSON
WANG,I-PERSON
",",O
HEAD,O
OF,O
PORTFOLIO,O
MANAGEMENT,O
AND,O
TRADING,O
",",O
QS,I-BUSINESS
INVESTORS,I-BUSINESS
.,I-BUSINESS
,O
Portfolio,O
Manager,O
of,O
the,O
fund,O
.,O
,O
Joined,O
the,O
fund,O
in,O
2008,O
.,O
,O
THOMAS,I-PERSON
PICCIOCHI,I-PERSON
",",O
HEAD,O
OF,O
GLOBAL,O
TACTICAL,O
ASSET,O
ALLOCATION,O
PORTFOLIO,O
MANAGEMENT,O
AND,O
TRADING,O
",",O
QS,I-BUSINESS
INVESTORS,I-BUSINESS
.,I-BUSINESS
,O
Portfolio,O
Manager,O
of,O
the,O
fund,O
.,O
,O
Joined,O
the,O
fund,O
in,O
2008,O
.,O
,O
MINIMUM,O
INITIAL,O
INVESTMENT,O
(,O
$,O
),O
,O
AUTOMATIC,O
UGMAS/,O
INVESTMENT,O
NON-IRA,O
IRAS,O
UTMAS,O
PLANS,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
,O
A,O
B,O
C,O
"1,000",O
500,O
"1,000",O
500,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
-,O
--,O
--,O
-,O
--,O
-,O
INST,O
"1,000,000",O
,O
,O
,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
S,O
"2,500",O
"1,000",O
"1,000",O
"1,000",O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
--,O
-,O
,O
For,O
participants,O
in,O
certain,O
fee-based,O
and,O
wrap,O
programs,O
offered,O
through,O
certain,O
financial,O
intermediaries,O
approved,O
by,O
the,O
Advisor,O
",",O
there,O
is,O
no,O
minimum,O
initial,O
investment,O
for,O
Class,O
A,O
",",O
B,O
",",O
C,O
and,O
S,O
shares,O
and,O
no,O
minimum,O
additional,O
investment,O
for,O
Class,O
A,O
and,O
S,O
shares,O
.,O
,O
Institutional,O
Class,O
shares,O
also,O
have,O
no,O
additional,O
investment,O
minimum,O
.,O
,O
The,O
minimum,O
additional,O
investment,O
for,O
all,O
other,O
instances,O
is,O
$,O
50,O
.,O
,O
For,O
existing,O
Class,O
B,O
shareholders,O
",",O
the,O
minimum,O
initial,O
investment,O
for,O
Class,O
A,O
and,O
C,O
shares,O
is,O
$,O
50,O
.,O
,O
MAIL,O
First,O
Investment,O
DWS,I-BUSINESS
Investments,I-BUSINESS
",",O
PO,O
Box,O
219356,O
Kansas,I-LOCATION
City,I-LOCATION
",",O
MO,I-LOCATION
64121-9356,O
Additional,O
Investments,O
DWS,I-BUSINESS
Investments,I-BUSINESS
",",O
PO,O
Box,O
219154,O
Kansas,I-LOCATION
City,I-LOCATION
",",O
MO,I-LOCATION
64121-9154,O
Exchanges,I-BUSINESS
and,I-BUSINESS
DWS,I-BUSINESS
Investments,I-BUSINESS
",",O
PO,O
Box,O
219557,O
Redemptions,O
Kansas,I-LOCATION
City,I-LOCATION
",",O
MO,I-LOCATION
64121-9557,O
EXPEDITED,O
MAIL,O
DWS,I-BUSINESS
Investments,I-BUSINESS
",",O
210,O
West,I-LOCATION
10th,I-LOCATION
Street,I-LOCATION
Kansas,B-LOCATION
City,I-LOCATION
",",O
MO,I-LOCATION
64105-1614,O
WEB,O
SITE,O
www.dws-investments.com,O
TELEPHONE,O
Class,O
A,O
",",O
B,O
or,O
C,O
shares,O
:,O
(,O
800,O
),O
621-1048,O
Class,O
S,O
shares,O
:,O
(,O
800,O
),O
728-3337,O
M,O
-,O
F,O
8,O
a.m.,O
-,O
8,O
p.m.,O
ET,I-MISCELLANEOUS
Institutional,O
Class,O
shares,O
:,O
(,O
800,O
),O
730-1313,O
M,O
-,O
F,O
8,O
a.m.,O
-,O
6,O
p.m.,O
ET,I-MISCELLANEOUS
TDD,O
LINE,O
(,O
800,O
),O
972-3006,O
",",O
M,O
-,O
F,O
8,O
a.m.,O
-,O
8,O
p.m.,O
You,O
can,O
buy,O
or,O
sell,O
shares,O
of,O
the,O
fund,O
on,O
any,O
business,O
day,O
at,O
our,O
web,O
site,O
",",O
by,O
mail,O
",",O
or,O
by,O
telephone,O
.,O
,O
The,O
fund,O
is,O
generally,O
open,O
on,O
days,O
when,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
is,O
open,O
for,O
regular,O
trading,O
.,O
,O
Class,O
B,O
shares,O
are,O
closed,O
to,O
new,O
purchases,O
",",O
except,O
for,O
exchanges,O
and,O
the,O
reinvestment,O
of,O
dividends,O
or,O
other,O
distributions,O
.,O
,O
Institutional,O
Class,O
shares,O
are,O
generally,O
available,O
only,O
to,O
qualified,O
institutions,O
.,O
,O
Class,O
S,O
shares,O
are,O
only,O
available,O
to,O
a,O
limited,O
group,O
of,O
investors,O
.,O
,O
The,O
fund,O
's,O
distributions,O
are,O
generally,O
taxable,O
to,O
you,O
as,O
ordinary,O
income,O
or,O
capital,O
gains,O
",",O
except,O
when,O
your,O
investment,O
is,O
in,O
an,O
IRA,O
",",O
401,O
(,O
k,O
),O
",",O
or,O
other,O
tax-deferred,O
investment,O
plan,O
.,O
,O
If,O
you,O
purchase,O
the,O
fund,O
through,O
a,O
broker-dealer,O
or,O
other,O
financial,O
intermediary,O
(,O
such,O
as,O
a,O
bank,O
),O
",",O
the,O
fund,O
and,O
its,O
related,O
companies,O
may,O
pay,O
the,O
intermediary,O
for,O
the,O
sale,O
of,O
fund,O
shares,O
and,O
related,O
services,O
.,O
,O
the,O
fund,O
over,O
another,O
investment,O
.,O
,O
Ask,O
your,O
salesperson,O
or,O
visit,O
your,O
financial,O
intermediary,O
's,O
web,O
site,O
for,O
more,O
information,O
.,O
,O
-DOCSTART-,O
,O
UNITED,I-GOVERNMENT
STATES,I-GOVERNMENT
SECURITIES,I-GOVERNMENT
AND,I-GOVERNMENT
EXCHANGE,I-GOVERNMENT
COMMISSION,I-GOVERNMENT
Washington,I-BUSINESS
",",I-BUSINESS
D.C,I-BUSINESS
.,I-BUSINESS
,O
UBS,I-BUSINESS
Juniper,I-BUSINESS
Crossover,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
L.L.C.,I-BUSINESS
(,O
Exact,O
name,O
of,O
registrant,O
as,O
specified,O
in,O
charter,O
),O
,O
299,O
Park,I-LOCATION
Avenue,I-LOCATION
",",O
29th,O
Floor,O
New,I-LOCATION
York,I-LOCATION
",",O
NY,I-LOCATION
10171,O
(,O
Address,O
of,O
principal,O
executive,O
offices,O
),O
(,O
Zip,O
code,O
),O
,O
James,I-PERSON
M.,I-PERSON
Hnilo,I-PERSON
",",O
Esq,O
.,O
,O
UBS,I-BUSINESS
Alternative,I-BUSINESS
and,I-BUSINESS
Quantitative,I-BUSINESS
Investments,I-BUSINESS
LLC,I-BUSINESS
One,O
North,I-LOCATION
Wacker,I-LOCATION
Drive,I-LOCATION
",",O
32nd,O
Floor,O
Chicago,I-LOCATION
",",O
Illinois,I-LOCATION
60606,O
(,O
Name,O
and,O
address,O
of,O
agent,O
for,O
service,O
),O
,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
is,O
to,O
be,O
used,O
by,O
management,O
investment,O
companies,O
",",O
other,O
than,O
small,O
business,O
investment,O
companies,O
registered,O
on,O
Form,I-MISCELLANEOUS
N-5,I-MISCELLANEOUS
(,O
Sections,O
239.24,O
and,O
274.5,O
of,O
this,O
chapter,O
),O
",",O
to,O
file,O
reports,O
with,O
the,O
Commission,O
",",O
not,O
later,O
than,O
60,O
days,O
after,O
the,O
close,O
of,O
the,O
first,O
and,O
third,O
fiscal,O
quarters,O
",",O
pursuant,O
to,O
rule,O
30b1-5,O
under,O
the,O
Investment,I-MISCELLANEOUS
Company,I-MISCELLANEOUS
Act,I-MISCELLANEOUS
of,I-MISCELLANEOUS
1940,I-MISCELLANEOUS
(,O
17,O
CFR,I-MISCELLANEOUS
270.30b1-5,O
),O
.,O
,O
The,O
Commission,O
may,O
use,O
the,O
information,O
provided,O
on,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
in,O
its,O
regulatory,O
",",O
disclosure,O
review,O
",",O
inspection,O
",",O
and,O
policymaking,O
roles,O
.,O
,O
A,O
registrant,O
is,O
required,O
to,O
disclose,O
the,O
information,O
specified,O
by,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
",",O
and,O
the,O
Commission,O
will,O
make,O
this,O
information,O
public,O
.,O
,O
A,O
registrant,O
is,O
not,O
required,O
to,O
respond,O
to,O
the,O
collection,O
of,O
information,O
contained,O
in,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
unless,O
the,O
Form,O
displays,O
a,O
currently,O
valid,O
Office,I-GOVERNMENT
of,I-GOVERNMENT
Management,I-GOVERNMENT
and,I-GOVERNMENT
Budget,I-GOVERNMENT
(,O
``,O
OMB,I-GOVERNMENT
'',O
),O
control,O
number,O
.,O
,O
Please,O
direct,O
comments,O
concerning,O
the,O
accuracy,O
of,O
the,O
information,O
collection,O
burden,O
estimate,O
and,O
any,O
suggestions,O
for,O
reducing,O
the,O
burden,O
to,O
the,O
Secretary,O
",",O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
100,O
F,I-LOCATION
Street,I-LOCATION
",",O
NE,I-LOCATION
",",O
Washington,I-LOCATION
",",I-LOCATION
DC,I-LOCATION
20549,O
.,O
,O
The,O
OMB,I-GOVERNMENT
has,O
reviewed,O
this,O
collection,O
of,O
information,O
under,O
the,O
clearance,O
requirements,O
of,O
44,O
U.S.C.,I-LEGISLATION/ACT
SCHEDULE,O
OF,O
INVESTMENTS,O
.,O
,O
UBS,I-BUSINESS
JUNIPER,I-BUSINESS
CROSSOVER,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
L.L.C.,I-BUSINESS
,O
SHARES,O
FAIR,O
VALUE,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
,O
INVESTMENTS,O
IN,O
SECURITIES,O
(,O
75.21,O
%,O
),O
,O
COMMON,O
STOCK,O
(,O
12.33,O
%,O
),O
PATIENT,O
MONITORING,O
EQUIPMENT,O
(,O
12.33,O
%,O
),O
"129,785",O
Insulet,O
Corp.,O
,O
*,O
$,O
"2,676,167",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
TOTAL,O
COMMON,O
STOCK,O
(,O
Cost,O
$,O
"1,240,901",O
),O
"2,676,167",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
PREFERRED,O
STOCKS,O
(,O
62.70,O
%,O
),O
DRUG,O
DISCOVERY/DRUG,O
DEVELOPMENT,O
(,O
45.60,O
%,O
),O
"2,888",O
Acceleron,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Common,O
*,O
",",O
(,O
a,O
),O
"7,753",O
"558,964",O
Acceleron,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Series,O
B,O
*,O
",",O
(,O
a,O
),O
"1,500,651",O
"86,977",O
Acceleron,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Series,O
C,O
*,O
",",O
(,O
a,O
),O
"233,507",O
"11,624",O
Acceleron,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Series,O
D,O
*,O
",",O
(,O
a,O
),O
"31,207",O
"52,413",O
Acceleron,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Series,O
E,O
*,O
",",O
(,O
a,O
),O
"140,713",O
"162,312",O
Cerimon,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
*,O
",",O
(,O
a,O
),O
"21,669",O
"165,997",O
Cerimon,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Series,O
A,O
*,O
",",O
(,O
a,O
),O
"23,524",O
"1,574,345",O
ChemoCentryx,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Series,O
B,O
*,O
",",O
(,O
a,O
),O
"4,434,703",O
"242,674",O
ChemoCentryx,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Series,O
C,O
*,O
",",O
(,O
a,O
),O
"683,578",O
"1,300",O
superDimension,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
",",O
Series,O
B,O
*,O
",",O
(,O
a,O
),O
"649,520",O
"13,016",O
superDimension,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
",",O
Series,O
C-1,O
*,O
",",O
(,O
a,O
),O
"167,091",O
"134,026",O
superDimension,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
",",O
Series,O
C-2,O
*,O
",",O
(,O
a,O
),O
"1,720,537",O
"7,369",O
superDimension,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
",",O
Series,O
E-1,O
*,O
",",O
(,O
a,O
),O
"157,918",O
"6,029",O
superDimension,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
",",O
Series,O
E-2,O
*,O
",",O
(,O
a,O
),O
"129,201",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
"9,901,572",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
MEDICAL,O
-,O
BIOMEDICAL/GENETICS,O
(,O
4.17,O
%,O
),O
"316,091",O
Macrogenics,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Series,O
A,O
*,O
",",O
(,O
a,O
),O
"97,851",O
"982,489",O
Macrogenics,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Series,O
B,O
*,O
",",O
(,O
a,O
),O
"304,145",O
"1,504,459",O
Macrogenics,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Series,O
C,O
*,O
",",O
(,O
a,O
),O
"465,728",O
"121,182",O
Macrogenics,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Series,O
D,O
*,O
",",O
(,O
a,O
),O
"37,514",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
"905,238",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
RESEARCH,O
PRODUCT/TECHNOLOGY,O
PLATFORM,O
(,O
12.93,O
%,O
),O
"376,770",O
Amnis,I-BUSINESS
Corp.,I-BUSINESS
",",O
Series,O
C-1,O
*,O
",",O
(,O
a,O
),O
"196,869",O
"2,438,743",O
Amnis,I-BUSINESS
Corp.,I-BUSINESS
",",O
Series,O
C-2,O
*,O
",",O
(,O
a,O
),O
"1,274,289",O
"140,462",O
Amnis,I-BUSINESS
Corp.,I-BUSINESS
",",O
Series,O
D,O
*,O
",",O
(,O
a,O
),O
"126,565",O
"827,267",O
Supernus,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Series,O
A,O
*,O
",",O
(,O
a,O
),O
"1,211,202",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
"2,808,925",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
TOTAL,O
PREFERRED,O
STOCKS,O
(,O
Cost,O
$,O
"13,225,523",O
),O
"13,615,735",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
WARRANTS,O
(,O
0.18,O
%,O
),O
DRUG,O
DISCOVERY/DRUG,O
DEVELOPMENT,O
(,O
0.18,O
%,O
),O
"55,979",O
Acceleron,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
$,O
1.47,O
",",O
06/10/20,O
*,O
",",O
(,O
a,O
),O
"40,000",O
"1,842",O
superDimension,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
",",O
Series,O
E1,O
",",O
$,O
21.43,O
",",O
06/29/20,O
*,O
",",O
(,O
a,O
),O
--,O
"1,507",O
superDimension,I-BUSINESS
",",I-BUSINESS
Ltd.,I-BUSINESS
",",O
Series,O
E2,O
",",O
$,O
21.43,O
",",O
06/29/20,O
*,O
",",O
(,O
a,O
),O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
"40,000",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
MEDICAL,O
-,O
BIOMEDICAL/GENETICS,O
(,O
0.00,O
%,O
),O
"9,089",O
Macrogenics,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
$,O
0.65,O
",",O
09/24/18,O
*,O
",",O
(,O
a,O
),O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
TOTAL,O
WARRANTS,O
(,O
Cost,O
$,O
--,O
),O
"40,000",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
TOTAL,O
INVESTMENTS,O
IN,O
SECURITIES,O
(,O
Cost,O
$,O
"14,466,424",O
),O
"16,331,902",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
,O
UBS,I-BUSINESS
JUNIPER,I-BUSINESS
CROSSOVER,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
L.L.C.,I-BUSINESS
,O
TOTAL,O
INVESTMENTS,O
IN,O
SECURITIES,O
--,O
75.21,O
%,O
$,O
"16,331,902",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
OTHER,O
ASSETS,O
IN,O
EXCESS,O
OF,O
OTHER,O
LIABILITIES,O
--,O
24.79,O
%,O
"5,382,774",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
TOTAL,O
MEMBERS,O
',O
CAPITAL,O
--,O
100.00,O
%,O
$,O
"21,714,676",O
================,O
,O
Percentages,O
shown,O
represent,O
a,O
percentage,O
of,O
members,O
',O
capital,O
as,O
of,O
March,O
31,O
",",O
2011,O
.,O
,O
--,O
--,O
--,O
--,O
--,O
*,O
Non-income,O
producing,O
security,O
.,O
,O
(,O
a,O
),O
Private,O
investment,O
valued,O
at,O
fair,O
value,O
.,O
,O
The,O
fair,O
value,O
of,O
private,O
investments,O
amounted,O
to,O
$,O
"13,655,735",O
which,O
represented,O
62.88,O
%,O
of,O
the,O
members,O
',O
capital,O
at,O
March,O
31,O
",",O
2011,O
.,O
,O
The,O
following,O
is,O
a,O
summary,O
of,O
the,O
inputs,O
used,O
in,O
valuing,O
the,O
Fund,O
's,O
investments,O
at,O
fair,O
value,O
.,O
,O
The,O
inputs,O
or,O
methodology,O
used,O
for,O
valuing,O
securities,O
are,O
not,O
necessarily,O
an,O
indication,O
of,O
the,O
risk,O
associated,O
with,O
investing,O
in,O
those,O
securities,O
.,O
,O
TOTAL,O
FAIR,O
VALUE,O
AT,O
DESCRIPTION,O
MARCH,O
31,O
",",O
2011,O
LEVEL,O
1,O
LEVEL,O
2,O
LEVEL,O
3,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
,O
Investments,O
in,O
Securities,O
Common,O
Stock,O
Patient,O
Monitoring,O
Equipment,O
$,O
"2,676,167",O
$,O
"2,676,167",O
$,O
--,O
$,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
TOTAL,O
COMMON,O
STOCK,O
"2,676,167",O
"2,676,167",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
Preferred,O
Stocks,O
Drug,O
Discovery/Drug,O
Development,O
"9,901,572",O
--,O
--,O
"9,901,572",O
Medical,O
-,O
Biomedical/Genetics,O
"905,238",O
--,O
--,O
"905,238",O
Research,O
Product/Technology,O
Platform,O
"2,808,925",O
--,O
--,O
"2,808,925",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
TOTAL,O
PREFERRED,O
STOCKS,O
"13,615,735",O
--,O
--,O
"13,615,735",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
Warrants,O
Drug,O
Discovery/Drug,O
Development,O
"40,000",O
--,O
--,O
"40,000",O
Medical,O
-,O
Biomedical/Genetics,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
TOTAL,O
WARRANTS,O
"40,000",O
--,O
--,O
"40,000",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
TOTAL,O
INVESTMENTS,O
IN,O
SECURITIES,O
$,O
"16,331,902",O
$,O
"2,676,167",O
$,O
--,O
$,O
"13,655,735",O
==============,O
============,O
=========,O
=============,O
TOTAL,O
ASSETS,O
$,O
"16,331,902",O
$,O
"2,676,167",O
$,O
--,O
$,O
"13,655,735",O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
,O
UBS,I-BUSINESS
JUNIPER,I-BUSINESS
CROSSOVER,I-BUSINESS
FUND,I-BUSINESS
",",I-BUSINESS
L.L.C.,I-BUSINESS
,O
The,O
following,O
is,O
a,O
reconciliation,O
of,O
assets,O
in,O
which,O
significant,O
unobservable,O
inputs,O
(,O
Level,O
3,O
),O
were,O
used,O
in,O
determining,O
fair,O
value,O
:,O
,O
CHANGE,O
IN,O
BALANCE,O
AS,O
OF,O
ACCRUED,O
UNREALIZED,O
TRANSFERS,O
IN,O
DECEMBER,O
31,O
",",O
DISCOUNTS,O
REALIZED,O
GAIN/,O
APPRECIATION/,O
AND/OR,O
OUT,O
OF,O
BALANCE,O
AS,O
OF,O
DESCRIPTION,O
2010,O
/PREMIUMS,O
(,O
LOSS,O
),O
DEPRECIATION,O
PURCHASES,O
SALES,O
LEVEL,O
3,O
MARCH,O
31,O
",",O
2011,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
ENDING,O
BALANCE,O
$,O
"14,435,506",O
$,O
--,O
$,O
--,O
$,O
(,O
"781,344",O
),O
$,O
"1,573",O
$,O
--,O
$,O
--,O
$,O
"13,655,735",O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
-,O
--,O
--,O
--,O
--,O
--,O
--,O
--,O
,O
Net,O
change,O
in,O
unrealized,O
appreciation/,O
(,O
depreciation,O
),O
on,O
Level,O
3,O
assets,O
still,O
held,O
as,O
of,O
March,O
31,O
",",O
2011,O
is,O
$,O
(,O
"781,344",O
),O
.,O
,O
The,O
Fund,O
values,O
its,O
investments,O
at,O
fair,O
value,O
",",O
in,O
accordance,O
with,O
U.S.,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
(,O
``,O
GAAP,I-LEGISLATION/ACT
'',O
),O
",",O
which,O
is,O
the,O
price,O
that,O
would,O
be,O
received,O
to,O
sell,O
an,O
asset,O
or,O
paid,O
to,O
transfer,O
a,O
liability,O
in,O
an,O
orderly,O
transaction,O
between,O
market,O
participants,O
at,O
the,O
measurement,O
date,O
.,O
,O
Various,O
inputs,O
are,O
used,O
in,O
determining,O
the,O
fair,O
value,O
of,O
the,O
Fund,O
's,O
investments,O
which,O
are,O
summarized,O
in,O
the,O
three,O
broad,O
levels,O
listed,O
below,O
.,O
,O
LEVEL,O
1,O
--,O
quoted,O
prices,O
in,O
active,O
markets,O
for,O
identical,O
securities,O
.,O
,O
LEVEL,O
2,O
--,O
other,O
significant,O
observable,O
inputs,O
(,O
including,O
quoted,O
prices,O
for,O
similar,O
securities,O
",",O
interest,O
rates,O
",",O
prepayment,O
spreads,O
",",O
credit,O
risk,O
",",O
etc,O
.,O
),O
,O
LEVEL,O
3,O
--,O
significant,O
unobservable,O
inputs,O
(,O
including,O
the,O
Fund,O
's,O
own,O
assumptions,O
and,O
indicative,O
non-binding,O
broker,O
quotes,O
.,O
),O
,O
The,O
Fund,O
recognizes,O
transfers,O
into,O
and,O
out,O
of,O
the,O
levels,O
indicated,O
above,O
at,O
the,O
end,O
of,O
the,O
reporting,O
period,O
.,O
,O
There,O
were,O
no,O
such,O
transfers,O
for,O
the,O
period,O
ended,O
March,O
31,O
",",O
2011,O
.,O
,O
Please,O
refer,O
to,O
the,O
December,O
31,O
",",O
2010,O
financial,O
statements,O
for,O
full,O
disclosure,O
on,O
the,O
Fund,O
's,O
portfolio,O
valuation,O
methodology,O
.,O
,O
CONTROLS,O
AND,O
PROCEDURES,O
.,O
,O
(,O
a,O
),O
The,O
registrant,O
's,O
principal,O
executive,O
and,O
principal,O
financial,O
officers,O
",",O
or,O
persons,O
performing,O
similar,O
functions,O
",",O
have,O
concluded,O
that,O
the,O
registrant,O
's,O
disclosure,O
controls,O
and,O
procedures,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
c,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
``,O
1940,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
'',O
),O
(,O
17,O
CFR,I-LEGISLATION/ACT
270.30a-3,O
(,O
c,O
),O
),O
),O
are,O
effective,O
",",O
as,O
of,O
a,O
date,O
within,O
90,O
days,O
of,O
the,O
filing,O
date,O
of,O
the,O
report,O
that,O
includes,O
the,O
disclosure,O
required,O
by,O
this,O
paragraph,O
",",O
based,O
on,O
their,O
evaluation,O
of,O
these,O
controls,O
and,O
procedures,O
required,O
by,O
Rule,O
30a-3,O
(,O
b,O
),O
under,O
the,O
1940,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17,O
CFR,I-LEGISLATION/ACT
270.30a-3,O
(,O
b,O
),O
),O
and,O
Rules,O
13a-15,O
(,O
b,O
),O
or,O
15d-15,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
17,O
CFR,I-LEGISLATION/ACT
240.13a-15,O
(,O
b,O
),O
or,O
240.15d-15,O
(,O
b,O
),O
),O
.,O
,O
(,O
b,O
),O
There,O
were,O
no,O
changes,O
in,O
the,O
registrant,O
's,O
internal,O
control,O
over,O
financial,O
reporting,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
d,O
),O
under,O
the,O
1940,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17,O
CFR,I-LEGISLATION/ACT
270.30a-3,O
(,O
d,O
),O
),O
that,O
occurred,O
during,O
the,O
registrant,O
's,O
last,O
fiscal,O
quarter,O
that,O
have,O
materially,O
affected,O
",",O
or,O
are,O
reasonably,O
likely,O
to,O
materially,O
affect,O
",",O
the,O
registrant,O
's,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
Certifications,O
pursuant,O
to,O
Rule,O
30a-2,O
(,O
a,O
),O
under,O
the,O
1940,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
Section,O
302,O
of,O
the,O
Sarbanes-Oxley,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
2002,I-LEGISLATION/ACT
are,O
attached,O
hereto,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
and,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
",",O
the,O
registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
.,O
,O
(,O
Registrant,O
),O
UBS,I-BUSINESS
Juniper,I-BUSINESS
Crossover,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
L.L.C.,I-BUSINESS
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
and,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
",",O
this,O
report,O
has,O
been,O
signed,O
below,O
by,O
the,O
following,O
persons,O
on,O
behalf,O
of,O
the,O
registrant,O
and,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
.,O
,O
*,O
Print,O
the,O
name,O
and,O
title,O
of,O
each,O
signing,O
officer,O
under,O
his,O
or,O
her,O
signature,O
.,O
,O
I,O
",",O
William,I-PERSON
Ferri,I-PERSON
",",O
certify,O
that,O
:,O
,O
I,O
have,O
reviewed,O
this,O
report,O
on,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
of,O
UBS,I-BUSINESS
Juniper,I-BUSINESS
Crossover,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
L.L.C.,I-BUSINESS
.,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
this,O
report,O
does,O
not,O
contain,O
any,O
untrue,O
statement,O
of,O
a,O
material,O
fact,O
or,O
omit,O
to,O
state,O
a,O
material,O
fact,O
necessary,O
to,O
make,O
the,O
statements,O
made,O
",",O
in,O
light,O
of,O
the,O
circumstances,O
under,O
which,O
such,O
statements,O
were,O
made,O
",",O
not,O
misleading,O
with,O
respect,O
to,O
the,O
period,O
covered,O
by,O
this,O
report,O
;,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
the,O
schedules,O
of,O
investments,O
included,O
in,O
this,O
report,O
fairly,O
present,O
in,O
all,O
material,O
respects,O
the,O
investments,O
of,O
the,O
registrant,O
as,O
of,O
the,O
end,O
of,O
the,O
fiscal,O
quarter,O
for,O
which,O
the,O
report,O
is,O
filed,O
;,O
,O
The,O
registrant,O
's,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
are,O
responsible,O
for,O
establishing,O
and,O
maintaining,O
disclosure,O
controls,O
and,O
procedures,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
c,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
),O
and,O
internal,O
control,O
over,O
financial,O
reporting,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
d,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
),O
for,O
the,O
registrant,O
and,O
have,O
:,O
,O
(,O
a,O
),O
Designed,O
such,O
disclosure,O
controls,O
and,O
procedures,O
",",O
or,O
caused,O
such,O
disclosure,O
controls,O
and,O
procedures,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
ensure,O
that,O
material,O
information,O
relating,O
to,O
the,O
registrant,O
",",O
including,O
its,O
consolidated,O
subsidiaries,O
",",O
is,O
made,O
known,O
to,O
us,O
by,O
others,O
within,O
those,O
entities,O
",",O
particularly,O
during,O
the,O
period,O
in,O
which,O
this,O
report,O
is,O
being,O
prepared,O
;,O
,O
(,O
b,O
),O
Designed,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
or,O
caused,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
provide,O
reasonable,O
assurance,O
regarding,O
the,O
reliability,O
of,O
financial,O
reporting,O
and,O
the,O
preparation,O
of,O
financial,O
statements,O
for,O
external,O
purposes,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
;,O
,O
The,O
registrant,O
's,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
have,O
disclosed,O
to,O
the,O
registrant,O
's,O
auditors,O
and,O
the,O
audit,O
committee,O
of,O
the,O
registrant,O
's,O
board,O
of,O
directors,O
(,O
or,O
persons,O
performing,O
the,O
equivalent,O
functions,O
),O
:,O
,O
(,O
b,O
),O
Any,O
fraud,O
",",O
whether,O
or,O
not,O
material,O
",",O
that,O
involves,O
management,O
or,O
other,O
employees,O
who,O
have,O
a,O
significant,O
role,O
in,O
the,O
registrant,O
's,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
I,O
",",O
Robert,I-PERSON
Aufenanger,I-PERSON
",",O
certify,O
that,O
:,O
,O
I,O
have,O
reviewed,O
this,O
report,O
on,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
of,O
UBS,I-BUSINESS
Juniper,I-BUSINESS
Crossover,I-BUSINESS
Fund,I-BUSINESS
",",I-BUSINESS
L.L.C.,I-BUSINESS
.,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
this,O
report,O
does,O
not,O
contain,O
any,O
untrue,O
statement,O
of,O
a,O
material,O
fact,O
or,O
omit,O
to,O
state,O
a,O
material,O
fact,O
necessary,O
to,O
make,O
the,O
statements,O
made,O
",",O
in,O
light,O
of,O
the,O
circumstances,O
under,O
which,O
such,O
statements,O
were,O
made,O
",",O
not,O
misleading,O
with,O
respect,O
to,O
the,O
period,O
covered,O
by,O
this,O
report,O
;,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
the,O
schedules,O
of,O
investments,O
included,O
in,O
this,O
report,O
fairly,O
present,O
in,O
all,O
material,O
respects,O
the,O
investments,O
of,O
the,O
registrant,O
as,O
of,O
the,O
end,O
of,O
the,O
fiscal,O
quarter,O
for,O
which,O
the,O
report,O
is,O
filed,O
;,O
,O
The,O
registrant,O
's,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
are,O
responsible,O
for,O
establishing,O
and,O
maintaining,O
disclosure,O
controls,O
and,O
procedures,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
c,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
),O
and,O
internal,O
control,O
over,O
financial,O
reporting,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
d,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
),O
for,O
the,O
registrant,O
and,O
have,O
:,O
,O
(,O
a,O
),O
Designed,O
such,O
disclosure,O
controls,O
and,O
procedures,O
",",O
or,O
caused,O
such,O
disclosure,O
controls,O
and,O
procedures,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
ensure,O
that,O
material,O
information,O
relating,O
to,O
the,O
registrant,O
",",O
including,O
its,O
consolidated,O
subsidiaries,O
",",O
is,O
made,O
known,O
to,O
us,O
by,O
others,O
within,O
those,O
entities,O
",",O
particularly,O
during,O
the,O
period,O
in,O
which,O
this,O
report,O
is,O
being,O
prepared,O
;,O
,O
(,O
b,O
),O
Designed,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
or,O
caused,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
provide,O
reasonable,O
assurance,O
regarding,O
the,O
reliability,O
of,O
financial,O
reporting,O
and,O
the,O
preparation,O
of,O
financial,O
statements,O
for,O
external,O
purposes,O
in,O
accordance,O
with,O
generally,I-MISCELLANEOUS
accepted,I-MISCELLANEOUS
accounting,I-MISCELLANEOUS
principles,I-MISCELLANEOUS
;,O
,O
The,O
registrant,O
's,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
have,O
disclosed,O
to,O
the,O
registrant,O
's,O
auditors,O
and,O
the,O
audit,O
committee,O
of,O
the,O
registrant,O
's,O
board,O
of,O
directors,O
(,O
or,O
persons,O
performing,O
the,O
equivalent,O
functions,O
),O
:,O
,O
(,O
b,O
),O
Any,O
fraud,O
",",O
whether,O
or,O
not,O
material,O
",",O
that,O
involves,O
management,O
or,O
other,O
employees,O
who,O
have,O
a,O
significant,O
role,O
in,O
the,O
registrant,O
's,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
-DOCSTART-,O
,O
Approximate,O
date,O
of,O
commencement,O
of,O
proposed,O
sale,O
to,O
the,O
public,O
:,O
From,O
time,O
to,O
time,O
after,O
the,O
effective,O
date,O
of,O
this,O
Registration,O
Statement,O
.,O
,O
If,O
the,O
only,O
securities,O
being,O
registered,O
on,O
this,O
Form,O
are,O
to,O
be,O
offered,O
pursuant,O
to,O
dividend,O
or,O
interest,O
reinvestment,O
plans,O
",",O
please,O
check,O
the,O
following,O
box,O
.,O
,O
If,O
any,O
of,O
the,O
securities,O
being,O
registered,O
on,O
this,O
Form,O
are,O
to,O
be,O
offered,O
on,O
a,O
delayed,O
or,O
continuous,O
basis,O
pursuant,O
to,O
Rule,O
415,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
other,O
than,O
securities,O
offered,O
only,O
in,O
connection,O
with,O
dividend,O
or,O
interest,O
reinvestment,O
plans,O
",",O
check,O
the,O
following,O
box,O
.,O
,O
If,O
this,O
Form,O
is,O
filed,O
to,O
register,O
additional,O
securities,O
for,O
an,O
offering,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
please,O
check,O
the,O
following,O
box,O
and,O
list,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
registration,O
statement,O
number,O
of,O
the,O
earlier,O
effective,O
registration,O
statement,O
for,O
the,O
same,O
offering,O
.,O
,O
If,O
this,O
Form,O
is,O
a,O
post-effective,O
amendment,O
filed,O
pursuant,O
to,O
Rule,O
462,O
(,O
c,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
check,O
the,O
following,O
box,O
and,O
list,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
registration,O
statement,O
number,O
of,O
the,O
earlier,O
effective,O
registration,O
statement,O
for,O
the,O
same,O
offering,O
.,O
,O
If,O
this,O
Form,O
is,O
a,O
registration,O
statement,O
pursuant,O
to,O
General,I-MISCELLANEOUS
Instruction,I-MISCELLANEOUS
I.D.,I-MISCELLANEOUS
or,O
a,O
post-effective,O
amendment,O
thereto,O
that,O
shall,O
become,O
effective,O
upon,O
filing,O
with,O
the,O
Commission,O
pursuant,O
to,O
Rule,O
462,O
(,O
e,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
check,O
the,O
following,O
box,O
.,O
,O
If,O
this,O
Form,O
is,O
a,O
post-effective,O
amendment,O
to,O
a,O
registration,O
statement,O
filed,O
pursuant,O
to,O
General,I-MISCELLANEOUS
Instruction,I-MISCELLANEOUS
I.D.,I-MISCELLANEOUS
filed,O
to,O
register,O
additional,O
securities,O
or,O
additional,O
classes,O
of,O
securities,O
pursuant,O
to,O
Rule,O
413,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
check,O
the,O
following,O
box,O
.,O
,O
Indicate,O
by,O
check,O
mark,O
whether,O
the,O
registrant,O
is,O
a,O
large,O
accelerated,O
filer,O
",",O
an,O
accelerated,O
filer,O
",",O
a,O
non-accelerated,O
filer,O
",",O
or,O
a,O
smaller,O
reporting,O
company,O
.,O
,O
See,O
the,O
definitions,O
of,O
large,O
accelerated,O
filer,O
",",O
accelerated,O
filer,O
and,O
smaller,O
reporting,O
company,O
in,O
Rule,O
12b-2,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
This,O
Registration,O
Statement,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
(,O
Registration,O
No.,O
333-169901,O
),O
of,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Partners,I-BUSINESS
LP,I-BUSINESS
(,O
the,O
Company,O
),O
",",O
Regency,I-BUSINESS
Energy,I-BUSINESS
Finance,I-BUSINESS
Corp.,I-BUSINESS
and,O
the,O
Company,O
s,O
subsidiary,O
guarantor,O
registrants,O
(,O
the,O
Registration,O
Statement,O
),O
is,O
being,O
amended,O
to,O
(,O
i,O
),O
add,O
Regency,I-BUSINESS
Midstream,I-BUSINESS
LLC,I-BUSINESS
and,O
Regency,I-BUSINESS
Texas,I-BUSINESS
Pipeline,I-BUSINESS
LLC,I-BUSINESS
",",O
each,O
subsidiaries,O
of,O
the,O
Company,O
",",O
as,O
co-registrants,O
that,O
are,O
",",O
or,O
may,O
potentially,O
be,O
",",O
guarantors,O
of,O
some,O
or,O
all,O
of,O
the,O
debt,O
securities,O
with,O
respect,O
to,O
which,O
offers,O
and,O
sales,O
are,O
registered,O
under,O
this,O
Registration,O
Statement,O
",",O
(,O
ii,O
),O
to,O
reflect,O
the,O
name,O
change,O
of,O
Regency,I-BUSINESS
Zephyr,I-BUSINESS
LLC,I-BUSINESS
to,O
Zephyr,I-BUSINESS
Gas,I-BUSINESS
Services,I-BUSINESS
LLC,I-BUSINESS
and,O
(,O
iii,O
),O
to,O
reflect,O
the,O
name,O
change,O
and,O
conversion,O
of,O
Gulf,I-BUSINESS
States,I-BUSINESS
Transmission,I-BUSINESS
Corporation,I-BUSINESS
to,O
Gulf,I-BUSINESS
States,I-BUSINESS
Transmission,I-BUSINESS
LLC,I-BUSINESS
.,O
,O
No,O
changes,O
or,O
additions,O
are,O
being,O
made,O
hereby,O
to,O
the,O
base,O
prospectus,O
that,O
already,O
forms,O
a,O
part,O
of,O
the,O
Registration,O
Statement,O
.,O
,O
Accordingly,O
",",O
such,O
base,O
prospectus,O
is,O
being,O
omitted,O
from,O
this,O
filing,O
.,O
,O
Other,O
Expenses,O
of,O
Issuance,O
and,O
Distribution,O
.,O
,O
The,O
following,O
sets,O
forth,O
the,O
expenses,O
in,O
connection,O
with,O
the,O
issuance,O
and,O
distribution,O
of,O
the,O
securities,O
being,O
registered,O
hereby,O
",",O
other,O
than,O
underwriting,O
discounts,O
and,O
commissions,O
.,O
,O
All,O
amounts,O
set,O
forth,O
below,O
",",O
other,O
than,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
SEC,I-GOVERNMENT
),O
registration,O
fee,O
",",O
are,O
estimates,O
.,O
,O
Indemnification,O
of,O
Directors,O
and,O
Officers,O
.,O
,O
Under,O
our,O
partnership,O
agreement,O
",",O
in,O
most,O
circumstances,O
",",O
we,O
will,O
indemnify,O
the,O
following,O
persons,O
",",O
to,O
the,O
fullest,O
extent,O
permitted,O
by,O
law,O
",",O
from,O
and,O
against,O
all,O
losses,O
",",O
claims,O
",",O
damages,O
or,O
similar,O
events,O
:,O
,O
Any,O
indemnification,O
under,O
these,O
provisions,O
will,O
only,O
be,O
out,O
of,O
our,O
assets,O
.,O
,O
We,O
also,O
have,O
indemnification,O
agreements,O
with,O
our,O
executive,O
officers,O
and,O
directors,O
.,O
,O
Pursuant,O
to,O
such,O
indemnification,O
agreements,O
",",O
we,O
have,O
agreed,O
to,O
indemnify,O
our,O
executive,O
officers,O
and,O
directors,O
against,O
certain,O
liabilities,O
.,O
,O
Unless,O
it,O
otherwise,O
agrees,O
",",O
our,O
general,O
partner,O
will,O
not,O
be,O
personally,O
liable,O
for,O
",",O
or,O
have,O
any,O
obligation,O
to,O
contribute,O
or,O
loan,O
funds,O
or,O
assets,O
to,O
us,O
to,O
enable,O
us,O
to,O
effectuate,O
",",O
indemnification,O
.,O
,O
We,O
may,O
purchase,O
insurance,O
against,O
liabilities,O
asserted,O
against,O
and,O
expenses,O
incurred,O
by,O
persons,O
for,O
our,O
activities,O
",",O
regardless,O
of,O
whether,O
we,O
would,O
have,O
the,O
power,O
to,O
indemnify,O
the,O
person,O
against,O
liabilities,O
under,O
our,O
partnership,O
agreement,O
.,O
,O
Delaware,O
limited,O
partnership,O
to,O
indemnify,O
and,O
hold,O
harmless,O
any,O
partner,O
or,O
other,O
persons,O
from,O
and,O
against,O
all,O
claims,O
and,O
demands,O
whatsoever,O
.,O
,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Finance,I-BUSINESS
Corp.,I-BUSINESS
,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Finance,I-BUSINESS
Corp.,I-BUSINESS
(,O
Regency,I-BUSINESS
Finance,I-BUSINESS
),O
is,O
a,O
Delaware,I-LOCATION
corporation,O
.,O
,O
Section,O
145,O
(,O
a,O
),O
of,O
the,O
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
the,I-LEGISLATION/ACT
State,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Delaware,I-LEGISLATION/ACT
(,O
the,O
DGCL,I-LEGISLATION/ACT
),O
provides,O
that,O
a,O
corporation,O
may,O
indemnify,O
any,O
person,O
who,O
was,O
or,O
is,O
a,O
party,O
or,O
is,O
threatened,O
to,O
be,O
made,O
a,O
party,O
to,O
any,O
threatened,O
",",O
pending,O
or,O
completed,O
action,O
",",O
suit,O
or,O
proceeding,O
",",O
whether,O
civil,O
",",O
criminal,O
",",O
administrative,O
or,O
investigative,O
(,O
other,O
than,O
an,O
action,O
by,O
or,O
in,O
the,O
right,O
of,O
the,O
corporation,O
),O
by,O
reason,O
of,O
the,O
fact,O
that,O
the,O
person,O
is,O
or,O
was,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
the,O
corporation,O
",",O
or,O
is,O
or,O
was,O
serving,O
at,O
the,O
request,O
of,O
the,O
corporation,O
as,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
another,O
corporation,O
",",O
partnership,O
",",O
joint,O
venture,O
",",O
trust,O
or,O
other,O
enterprise,O
",",O
against,O
expenses,O
(,O
including,O
attorneys,O
fees,O
),O
",",O
judgments,O
",",O
fines,O
and,O
amounts,O
paid,O
in,O
settlement,O
actually,O
and,O
reasonably,O
incurred,O
by,O
the,O
person,O
in,O
connection,O
with,O
such,O
action,O
",",O
suit,O
or,O
proceeding,O
if,O
the,O
person,O
acted,O
in,O
good,O
faith,O
and,O
in,O
a,O
manner,O
the,O
person,O
reasonably,O
believed,O
to,O
be,O
in,O
or,O
not,O
opposed,O
to,O
the,O
best,O
interests,O
of,O
the,O
corporation,O
",",O
and,O
",",O
with,O
respect,O
to,O
any,O
criminal,O
action,O
or,O
proceeding,O
",",O
had,O
no,O
reasonable,O
cause,O
to,O
believe,O
the,O
person,O
s,O
conduct,O
was,O
unlawful,O
.,O
,O
Section,O
145,O
(,O
b,O
),O
of,O
the,O
DGCL,I-LEGISLATION/ACT
provides,O
that,O
a,O
corporation,O
may,O
indemnify,O
any,O
person,O
who,O
was,O
or,O
is,O
a,O
party,O
or,O
is,O
threatened,O
to,O
be,O
made,O
a,O
party,O
to,O
any,O
threatened,O
",",O
pending,O
or,O
completed,O
action,O
or,O
suit,O
by,O
or,O
in,O
the,O
right,O
of,O
the,O
corporation,O
to,O
procure,O
a,O
judgment,O
in,O
its,O
favor,O
by,O
reason,O
of,O
the,O
fact,O
that,O
the,O
person,O
is,O
or,O
was,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
the,O
corporation,O
",",O
or,O
is,O
or,O
was,O
serving,O
at,O
the,O
request,O
of,O
the,O
corporation,O
as,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
another,O
corporation,O
",",O
partnership,O
",",O
joint,O
venture,O
",",O
trust,O
or,O
other,O
enterprise,O
against,O
expenses,O
(,O
including,O
attorneys,O
fees,O
),O
actually,O
and,O
reasonably,O
incurred,O
by,O
the,O
person,O
in,O
connection,O
with,O
the,O
defense,O
or,O
settlement,O
of,O
such,O
action,O
or,O
suit,O
if,O
the,O
person,O
acted,O
in,O
good,O
faith,O
and,O
in,O
a,O
manner,O
the,O
person,O
reasonably,O
believed,O
to,O
be,O
in,O
or,O
not,O
opposed,O
to,O
the,O
best,O
interests,O
of,O
the,O
corporation,O
and,O
except,O
that,O
no,O
indemnification,O
will,O
be,O
made,O
in,O
respect,O
of,O
any,O
claim,O
",",O
issue,O
or,O
matter,O
as,O
to,O
which,O
such,O
person,O
has,O
been,O
adjudged,O
to,O
be,O
liable,O
to,O
the,O
corporation,O
unless,O
and,O
only,O
to,O
the,O
extent,O
that,O
the,O
Court,O
of,O
Chancery,O
or,O
the,O
court,O
in,O
which,O
such,O
action,O
or,O
suit,O
was,O
brought,O
determines,O
upon,O
application,O
that,O
",",O
despite,O
the,O
adjudication,O
of,O
liability,O
but,O
in,O
view,O
of,O
all,O
the,O
circumstances,O
of,O
the,O
case,O
",",O
such,O
person,O
is,O
fairly,O
and,O
reasonably,O
entitled,O
to,O
indemnity,O
for,O
such,O
expenses,O
which,O
the,O
Court,O
of,O
Chancery,O
or,O
such,O
other,O
court,O
deems,O
proper,O
.,O
,O
To,O
the,O
extent,O
that,O
a,O
present,O
or,O
former,O
director,O
or,O
officer,O
of,O
a,O
corporation,O
has,O
been,O
successful,O
on,O
the,O
merits,O
or,O
otherwise,O
in,O
defense,O
of,O
any,O
action,O
",",O
suit,O
or,O
proceeding,O
referred,O
to,O
in,O
subsections,O
(,O
a,O
),O
and,O
(,O
b,O
),O
of,O
Section,O
145,O
of,O
the,O
DGCL,I-LEGISLATION/ACT
",",O
or,O
in,O
defense,O
of,O
any,O
claim,O
",",O
issue,O
or,O
matter,O
therein,O
",",O
such,O
person,O
will,O
be,O
indemnified,O
against,O
expenses,O
(,O
including,O
attorneys,O
fees,O
),O
actually,O
and,O
reasonably,O
incurred,O
by,O
such,O
person,O
in,O
connection,O
therewith,O
.,O
,O
Any,O
indemnification,O
under,O
subsections,O
(,O
a,O
),O
and,O
(,O
b,O
),O
of,O
Section,O
145,O
of,O
the,O
DGCL,I-LEGISLATION/ACT
(,O
unless,O
ordered,O
by,O
a,O
court,O
),O
will,O
be,O
made,O
by,O
the,O
corporation,O
only,O
as,O
authorized,O
in,O
the,O
specific,O
case,O
upon,O
a,O
determination,O
that,O
indemnification,O
of,O
the,O
present,O
or,O
former,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
is,O
proper,O
in,O
the,O
circumstances,O
because,O
the,O
person,O
has,O
met,O
the,O
applicable,O
standard,O
of,O
conduct,O
set,O
forth,O
in,O
subsections,O
(,O
a,O
),O
and,O
(,O
b,O
),O
of,O
Section,O
145,O
.,O
,O
Such,O
determination,O
will,O
be,O
made,O
",",O
with,O
respect,O
to,O
a,O
person,O
who,O
is,O
a,O
director,O
or,O
officer,O
at,O
the,O
time,O
of,O
such,O
determination,O
",",O
(,O
1,O
),O
by,O
a,O
majority,O
vote,O
of,O
the,O
directors,O
who,O
are,O
not,O
parties,O
to,O
such,O
action,O
",",O
suit,O
or,O
proceeding,O
",",O
even,O
though,O
less,O
than,O
a,O
quorum,O
",",O
or,O
(,O
2,O
),O
by,O
a,O
committee,O
of,O
such,O
directors,O
designated,O
by,O
majority,O
vote,O
of,O
such,O
directors,O
",",O
even,O
though,O
less,O
than,O
a,O
quorum,O
",",O
or,O
(,O
3,O
),O
if,O
there,O
are,O
no,O
such,O
directors,O
",",O
or,O
if,O
such,O
directors,O
so,O
direct,O
",",O
by,O
independent,O
legal,O
counsel,O
in,O
a,O
written,O
opinion,O
",",O
or,O
(,O
4,O
),O
by,O
the,O
stockholders,O
.,O
,O
Expenses,O
(,O
including,O
attorneys,O
fees,O
),O
incurred,O
by,O
an,O
officer,O
or,O
director,O
in,O
defending,O
any,O
civil,O
",",O
criminal,O
",",O
administrative,O
or,O
investigative,O
action,O
",",O
suit,O
or,O
proceeding,O
may,O
be,O
paid,O
by,O
the,O
corporation,O
in,O
advance,O
of,O
the,O
final,O
disposition,O
of,O
such,O
action,O
",",O
suit,O
or,O
proceeding,O
upon,O
receipt,O
of,O
an,O
undertaking,O
by,O
or,O
on,O
behalf,O
of,O
such,O
director,O
or,O
officer,O
to,O
repay,O
such,O
amount,O
if,O
it,O
is,O
ultimately,O
determined,O
that,O
such,O
person,O
is,O
not,O
entitled,O
to,O
be,O
indemnified,O
by,O
the,O
corporation,O
as,O
authorized,O
in,O
this,O
section,O
.,O
,O
Such,O
expenses,O
(,O
including,O
attorneys,O
fees,O
),O
incurred,O
by,O
former,O
directors,O
and,O
officers,O
or,O
other,O
employees,O
and,O
agents,O
may,O
be,O
so,O
paid,O
upon,O
such,O
terms,O
and,O
conditions,O
",",O
if,O
any,O
",",O
as,O
the,O
corporation,O
deems,O
appropriate,O
.,O
,O
The,O
indemnification,O
and,O
advancement,O
of,O
expenses,O
provided,O
by,O
",",O
or,O
granted,O
pursuant,O
to,O
",",O
Section,O
145,O
will,O
not,O
be,O
deemed,O
exclusive,O
of,O
any,O
other,O
rights,O
to,O
which,O
those,O
seeking,O
indemnification,O
or,O
advancement,O
of,O
expenses,O
may,O
be,O
entitled,O
under,O
any,O
bylaw,O
",",O
agreement,O
",",O
vote,O
of,O
stockholders,O
or,O
disinterested,O
directors,O
or,O
otherwise,O
",",O
both,O
as,O
to,O
action,O
in,O
such,O
person,O
s,O
official,O
capacity,O
and,O
as,O
to,O
action,O
in,O
another,O
capacity,O
while,O
holding,O
such,O
office,O
.,O
,O
Section,O
145,O
of,O
the,O
DGCL,I-LEGISLATION/ACT
also,O
empowers,O
a,O
corporation,O
to,O
purchase,O
and,O
maintain,O
insurance,O
on,O
behalf,O
of,O
any,O
person,O
who,O
is,O
or,O
was,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
the,O
corporation,O
",",O
or,O
is,O
or,O
was,O
serving,O
at,O
the,O
request,O
of,O
the,O
corporation,O
as,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
another,O
corporation,O
",",O
partnership,O
",",O
joint,O
venture,O
",",O
trust,O
or,O
other,O
enterprise,O
against,O
any,O
liability,O
asserted,O
against,O
such,O
person,O
and,O
incurred,O
by,O
such,O
person,O
in,O
any,O
such,O
capacity,O
",",O
,O
or,O
arising,O
out,O
of,O
such,O
person,O
s,O
status,O
as,O
such,O
",",O
whether,O
or,O
not,O
the,O
corporation,O
would,O
have,O
the,O
power,O
to,O
indemnify,O
such,O
person,O
against,O
such,O
liability,O
under,O
Section,O
145,O
.,O
,O
Regency,I-BUSINESS
Finance,I-BUSINESS
s,O
certificate,O
of,O
incorporation,O
and,O
bylaws,O
provide,O
that,O
current,O
and,O
former,O
directors,O
and,O
officers,O
",",O
or,O
directors,O
and,O
officers,O
serving,O
at,O
the,O
request,O
of,O
Regency,I-BUSINESS
Finance,I-BUSINESS
in,O
additional,O
capacities,O
",",O
will,O
be,O
indemnified,O
to,O
the,O
fullest,O
extent,O
permitted,O
under,O
the,O
DGCL,I-LEGISLATION/ACT
.,O
,O
Regency,I-BUSINESS
Finance,I-BUSINESS
may,O
also,O
indemnify,O
any,O
employee,O
or,O
agent,O
to,O
the,O
fullest,O
extent,O
permitted,O
by,O
the,O
DGCL,I-LEGISLATION/ACT
.,O
,O
Pueblo,I-BUSINESS
Holdings,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
Pueblo,I-BUSINESS
Holdings,I-BUSINESS
),O
is,O
a,O
Delaware,I-LOCATION
corporation,O
.,O
,O
The,O
indemnification,O
provisions,O
of,O
the,O
DGCL,I-LEGISLATION/ACT
described,O
in,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Finance,I-BUSINESS
Corp.,I-BUSINESS
above,O
also,O
relate,O
to,O
the,O
directors,O
and,O
officers,O
of,O
Pueblo,I-BUSINESS
Holdings,I-BUSINESS
.,O
,O
Pueblo,I-BUSINESS
Holdings,I-BUSINESS
s,O
certificate,O
of,O
incorporation,O
and,O
bylaws,O
provide,O
generally,O
that,O
each,O
person,O
who,O
was,O
or,O
is,O
made,O
a,O
party,O
or,O
is,O
threatened,O
to,O
be,O
made,O
a,O
party,O
to,O
or,O
is,O
involved,O
in,O
any,O
action,O
",",O
suit,O
or,O
proceeding,O
",",O
whether,O
civil,O
",",O
criminal,O
",",O
administrative,O
or,O
investigative,O
",",O
by,O
reason,O
of,O
the,O
fact,O
that,O
such,O
person,O
is,O
the,O
legal,O
representative,O
of,O
",",O
is,O
or,O
was,O
or,O
has,O
agreed,O
to,O
be,O
become,O
a,O
director,O
or,O
officer,O
of,O
Pueblo,O
Holdings,O
or,O
otherwise,O
is,O
or,O
was,O
serving,O
or,O
has,O
agreed,O
to,O
serve,O
as,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
will,O
be,O
indemnified,O
and,O
held,O
harmless,O
to,O
the,O
fullest,O
extent,O
of,O
the,O
DGCL,I-LEGISLATION/ACT
.,O
,O
Each,O
of,O
CDM,I-BUSINESS
Resource,I-BUSINESS
Management,I-BUSINESS
LLC,I-BUSINESS
",",O
FrontStreet,I-BUSINESS
Hugoton,I-BUSINESS
LLC,I-BUSINESS
",",O
Regency,I-BUSINESS
Field,I-BUSINESS
Services,I-BUSINESS
LLC,I-BUSINESS
",",O
Regency,I-BUSINESS
Gas,I-BUSINESS
Marketing,I-BUSINESS
LLC,I-BUSINESS
",",O
Regency,I-BUSINESS
Gas,I-BUSINESS
Utility,I-BUSINESS
LLC,I-BUSINESS
",",O
Regency,I-BUSINESS
Haynesville,I-BUSINESS
Instrastate,I-BUSINESS
Gas,I-BUSINESS
LLC,I-BUSINESS
",",O
Regency,I-BUSINESS
Liquids,I-BUSINESS
Pipeline,I-BUSINESS
LLC,I-BUSINESS
",",O
Regency,I-BUSINESS
Midcontinent,I-BUSINESS
Express,I-BUSINESS
LLC,I-BUSINESS
",",O
Regency,I-BUSINESS
Midcontinent,I-BUSINESS
Express,I-BUSINESS
Pipeline,I-BUSINESS
I,I-BUSINESS
LLC,I-BUSINESS
",",O
Regency,I-BUSINESS
Midstream,I-BUSINESS
LLC,I-BUSINESS
",",O
Regency,I-BUSINESS
OLP,I-BUSINESS
GP,I-BUSINESS
LLC,I-BUSINESS
",",O
Regency,I-BUSINESS
Texas,I-BUSINESS
Pipeline,I-BUSINESS
LLC,I-BUSINESS
",",O
WGP-KHC,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
and,O
Zephry,I-BUSINESS
Gas,I-BUSINESS
Services,I-BUSINESS
LLC,I-BUSINESS
is,O
a,O
Delaware,I-LOCATION
limited,O
liability,O
company,O
(,O
each,O
",",O
a,O
Delaware,I-LOCATION
LLC,O
),O
.,O
,O
Section,O
18-108,O
of,O
the,O
Delaware,I-LEGISLATION/ACT
Limited,I-LEGISLATION/ACT
Liability,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
provides,O
that,O
a,O
limited,O
liability,O
company,O
may,O
",",O
subject,O
to,O
such,O
standards,O
and,O
restrictions,O
",",O
if,O
any,O
",",O
as,O
are,O
set,O
forth,O
in,O
its,O
limited,O
liability,O
company,O
agreement,O
",",O
and,O
has,O
the,O
power,O
to,O
",",O
indemnify,O
and,O
hold,O
harmless,O
any,O
member,O
or,O
manager,O
or,O
other,O
person,O
from,O
and,O
against,O
any,O
and,O
all,O
claims,O
and,O
demands,O
whatsoever,O
.,O
,O
The,O
limited,O
liability,O
company,O
agreement,O
of,O
each,O
Delaware,I-LOCATION
LLC,O
contains,O
indemnification,O
provisions,O
that,O
generally,O
provide,O
that,O
such,O
Delaware,I-LOCATION
LLC,O
will,O
indemnify,O
any,O
person,O
against,O
any,O
losses,O
",",O
damages,O
",",O
claims,O
or,O
liabilities,O
to,O
which,O
they,O
may,O
become,O
subject,O
or,O
which,O
the,O
Delaware,I-LOCATION
LLC,O
may,O
incur,O
as,O
a,O
result,O
of,O
being,O
or,O
having,O
been,O
a,O
member,O
",",O
director,O
or,O
officer,O
of,O
the,O
Delaware,I-LOCATION
LLC,O
or,O
an,O
officer,O
",",O
director,O
",",O
stockholder,O
",",O
manager,O
",",O
member,O
or,O
partner,O
of,O
the,O
Delaware,I-LOCATION
LLC,O
s,O
member,O
",",O
or,O
while,O
serving,O
in,O
a,O
similar,O
capacity,O
at,O
the,O
request,O
of,O
the,O
Delaware,I-LOCATION
LLC,O
",",O
and,O
may,O
advance,O
to,O
them,O
or,O
reimburse,O
them,O
for,O
expenses,O
incurred,O
in,O
connection,O
therewith,O
.,O
,O
Regency,I-BUSINESS
Gas,I-BUSINESS
Services,I-BUSINESS
LP,I-BUSINESS
(,O
RGSLP,I-BUSINESS
),O
is,O
a,O
Delaware,I-LOCATION
limited,O
partnership,O
.,O
,O
Section,O
17-108,O
of,O
the,O
Delaware,I-LEGISLATION/ACT
Revised,I-LEGISLATION/ACT
Uniform,I-LEGISLATION/ACT
Limited,I-LEGISLATION/ACT
Partnership,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
empowers,O
a,O
Delaware,I-LOCATION
limited,O
partnership,O
to,O
indemnify,O
and,O
hold,O
harmless,O
any,O
partner,O
or,O
other,O
persons,O
from,O
and,O
against,O
all,O
claims,O
and,O
demands,O
whatsoever,O
.,O
,O
The,O
RGSLP,I-BUSINESS
limited,O
partnership,O
agreement,O
provides,O
that,O
RGSLP,I-BUSINESS
will,O
indemnify,O
the,O
general,O
partner,O
",",O
each,O
affiliate,O
of,O
the,O
general,O
partner,O
",",O
each,O
officer,O
of,O
RGSLP,I-BUSINESS
and,O
each,O
officer,O
",",O
director,O
",",O
stockholder,O
",",O
manager,O
",",O
member,O
",",O
representative,O
of,O
the,O
management,O
committee,O
and,O
partner,O
of,O
the,O
general,O
partner,O
or,O
any,O
of,O
its,O
affiliates,O
",",O
and,O
if,O
so,O
determined,O
by,O
the,O
general,O
partner,O
",",O
each,O
employee,O
of,O
the,O
general,O
partner,O
or,O
any,O
of,O
its,O
affiliates,O
",",O
against,O
any,O
claim,O
",",O
loss,O
",",O
damage,O
",",O
liability,O
",",O
or,O
expense,O
(,O
including,O
attorneys,O
fees,O
),O
suffered,O
or,O
incurred,O
by,O
reason,O
of,O
",",O
arising,O
from,O
or,O
related,O
to,O
the,O
operations,O
of,O
RGSLP,I-BUSINESS
.,O
,O
Gulf,I-BUSINESS
States,I-BUSINESS
Transmission,I-BUSINESS
LLC,I-BUSINESS
(,O
Gulf,I-BUSINESS
States,I-BUSINESS
),O
is,O
a,O
Louisiana,I-LOCATION
limited,O
liability,O
company,O
.,O
,O
manager,O
for,O
the,O
amount,O
of,O
a,O
financial,O
benefit,O
received,O
by,O
a,O
member,O
or,O
manager,O
to,O
which,O
he,O
is,O
not,O
entitled,O
or,O
for,O
an,O
intentional,O
violation,O
of,O
a,O
criminal,O
law,O
.,O
,O
The,O
limited,O
liability,O
company,O
agreement,O
of,O
Gulf,I-BUSINESS
States,I-BUSINESS
contains,O
indemnification,O
provisions,O
that,O
generally,O
provide,O
that,O
Gulf,I-BUSINESS
States,I-BUSINESS
will,O
indemnify,O
any,O
person,O
against,O
any,O
losses,O
",",O
damages,O
",",O
claims,O
or,O
liabilities,O
to,O
which,O
they,O
may,O
become,O
subject,O
or,O
which,O
Gulf,I-BUSINESS
States,I-BUSINESS
may,O
incur,O
as,O
a,O
result,O
of,O
being,O
or,O
having,O
been,O
a,O
member,O
",",O
director,O
or,O
officer,O
of,O
Gulf,I-BUSINESS
States,I-BUSINESS
or,O
an,O
officer,O
",",O
director,O
",",O
stockholder,O
",",O
manager,O
",",O
member,O
or,O
partner,O
of,O
Gulf,I-BUSINESS
States,I-BUSINESS
member,O
",",O
or,O
while,O
serving,O
in,O
a,O
similar,O
capacity,O
at,O
the,O
request,O
of,O
Gulf,I-BUSINESS
States,I-BUSINESS
",",O
and,O
may,O
advance,O
to,O
them,O
or,O
reimburse,O
them,O
for,O
expenses,O
incurred,O
in,O
connection,O
therewith,O
.,O
,O
Pueblo,I-BUSINESS
Midstream,I-BUSINESS
Gas,I-BUSINESS
Corporation,I-BUSINESS
(,O
PMGC,I-BUSINESS
),O
is,O
a,O
Texas,I-LOCATION
corporation,O
.,O
,O
Sections,O
8.101,O
and,O
8.102,O
of,O
the,O
Texas,I-LEGISLATION/ACT
Business,I-LEGISLATION/ACT
Organizations,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
(,O
TBOC,I-LEGISLATION/ACT
),O
provide,O
that,O
any,O
governing,O
person,O
",",O
former,O
governing,O
person,O
or,O
delegate,O
of,O
a,O
Texas,I-LOCATION
enterprise,O
may,O
be,O
indemnified,O
against,O
judgments,O
and,O
reasonable,O
expenses,O
actually,O
incurred,O
by,O
the,O
person,O
in,O
connection,O
with,O
a,O
proceeding,O
",",O
in,O
which,O
he,O
was,O
",",O
is,O
",",O
or,O
is,O
threatened,O
to,O
be,O
made,O
a,O
respondent,O
if,O
:,O
(,O
i,O
),O
he,O
acted,O
in,O
good,O
faith,O
",",O
(,O
ii,O
),O
he,O
reasonably,O
believed,O
(,O
a,O
),O
in,O
the,O
case,O
of,O
conduct,O
in,O
the,O
person,O
s,O
official,O
capacity,O
",",O
that,O
the,O
person,O
s,O
conduct,O
was,O
in,O
the,O
enterprise,O
s,O
best,O
interests,O
or,O
(,O
b,O
),O
in,O
any,O
other,O
case,O
",",O
that,O
the,O
person,O
s,O
conduct,O
was,O
not,O
opposed,O
to,O
the,O
enterprise,O
s,O
best,O
interests,O
",",O
and,O
(,O
iii,O
),O
in,O
the,O
case,O
of,O
a,O
criminal,O
proceeding,O
",",O
he,O
did,O
not,O
have,O
reasonable,O
cause,O
to,O
believe,O
that,O
his,O
conduct,O
was,O
unlawful,O
.,O
,O
In,O
connection,O
with,O
any,O
proceeding,O
in,O
which,O
the,O
person,O
is,O
(,O
x,O
),O
found,O
liable,O
because,O
the,O
person,O
improperly,O
received,O
a,O
personal,O
benefit,O
or,O
(,O
y,O
),O
found,O
liable,O
to,O
the,O
enterprise,O
",",O
indemnification,O
is,O
limited,O
to,O
reasonable,O
expenses,O
actually,O
incurred,O
by,O
the,O
person,O
in,O
connection,O
with,O
the,O
proceeding,O
and,O
will,O
not,O
include,O
a,O
judgment,O
",",O
penalty,O
",",O
fine,O
",",O
or,O
an,O
excise,O
or,O
similar,O
tax,O
.,O
,O
Indemnification,O
may,O
not,O
be,O
made,O
in,O
relation,O
to,O
a,O
proceeding,O
in,O
which,O
the,O
person,O
has,O
been,O
found,O
liable,O
for,O
willful,O
or,O
intentional,O
misconduct,O
in,O
the,O
performance,O
of,O
the,O
person,O
s,O
duty,O
to,O
the,O
enterprise,O
",",O
breach,O
of,O
the,O
person,O
s,O
duty,O
of,O
loyalty,O
owed,O
to,O
the,O
enterprise,O
or,O
an,O
act,O
or,O
omission,O
not,O
committed,O
in,O
good,O
faith,O
that,O
constitutes,O
a,O
breach,O
of,O
a,O
duty,O
owed,O
by,O
the,O
person,O
to,O
the,O
enterprise,O
.,O
,O
To,O
limit,O
indemnification,O
",",O
liability,O
must,O
be,O
established,O
by,O
an,O
order,O
and,O
all,O
appeals,O
of,O
the,O
order,O
must,O
be,O
exhausted,O
or,O
foreclosed,O
by,O
law,O
.,O
,O
PMGC,I-BUSINESS
s,O
bylaws,O
generally,O
provides,O
that,O
PMGC,I-BUSINESS
will,O
indemnify,O
its,O
present,O
and,O
former,O
directors,O
",",O
officers,O
",",O
employees,O
or,O
agents,O
",",O
or,O
any,O
person,O
who,O
",",O
while,O
serving,O
in,O
such,O
capacity,O
",",O
serves,O
as,O
a,O
director,O
",",O
officer,O
",",O
partner,O
",",O
venturer,O
",",O
proprietor,O
",",O
trustee,O
",",O
employee,O
",",O
agent,O
or,O
similar,O
functionary,O
of,O
another,O
corporation,O
",",O
partnership,O
",",O
joint,O
venture,O
or,O
similar,O
entity,O
at,O
PMGC,I-BUSINESS
s,O
request,O
.,O
,O
Indemnitees,O
are,O
entitled,O
to,O
advancement,O
of,O
expenses,O
and,O
indemnification,O
to,O
the,O
fullest,O
extent,O
permitted,O
by,O
Article,O
2.02-1,O
of,O
the,O
Texas,I-LEGISLATION/ACT
Business,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
as,O
codified,O
and,O
succeeded,O
by,O
the,O
TBOC,I-LEGISLATION/ACT
.,O
,O
(,O
a,O
),O
See,O
the,O
Exhibit,O
Index,O
on,O
the,O
page,O
immediately,O
preceding,O
the,O
exhibits,O
for,O
a,O
list,O
of,O
exhibits,O
filed,O
as,O
part,O
of,O
this,O
Post-Effective,O
Amendment,O
No.,O
1,O
to,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
",",O
which,O
Exhibit,O
Index,O
is,O
incorporated,O
herein,O
by,O
reference,O
.,O
,O
(,O
b,O
),O
Financial,O
Statement,O
Schedules,O
.,O
,O
(,O
a,O
),O
The,O
undersigned,O
registrants,O
hereby,O
undertake,O
:,O
,O
(,O
1,O
),O
To,O
file,O
",",O
during,O
any,O
period,O
in,O
which,O
offers,O
or,O
sales,O
are,O
being,O
made,O
",",O
a,O
post-effective,O
amendment,O
to,O
this,O
registration,O
statement,O
:,O
,O
(,O
i,O
),O
To,O
include,O
any,O
prospectus,O
required,O
by,O
section,O
10,O
(,O
a,O
),O
(,O
3,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
;,O
,O
(,O
ii,O
),O
To,O
reflect,O
in,O
the,O
prospectus,O
any,O
facts,O
or,O
events,O
arising,O
after,O
the,O
effective,O
date,O
of,O
the,O
registration,O
statement,O
(,O
or,O
the,O
most,O
recent,O
post-effective,O
amendment,O
thereof,O
),O
which,O
",",O
individually,O
or,O
in,O
the,O
aggregate,O
",",O
represent,O
a,O
fundamental,O
change,O
in,O
the,O
information,O
set,O
forth,O
in,O
the,O
registration,O
statement,O
.,O
,O
(,O
iii,O
),O
to,O
include,O
any,O
material,O
information,O
with,O
respect,O
to,O
the,O
plan,O
of,O
distribution,O
not,O
previously,O
disclosed,O
in,O
the,O
registration,O
statement,O
or,O
any,O
material,O
change,O
to,O
such,O
information,O
in,O
the,O
registration,O
statement,O
;,O
,O
Provided,O
",",O
however,O
",",O
that,O
paragraphs,O
(,O
a,O
),O
(,O
1,O
),O
(,O
i,O
),O
",",O
(,O
a,O
),O
(,O
1,O
),O
(,O
ii,O
),O
and,O
(,O
a,O
),O
(,O
1,O
),O
(,O
iii,O
),O
do,O
not,O
apply,O
if,O
the,O
registration,O
statement,O
is,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
and,O
the,O
information,O
required,O
to,O
be,O
included,O
in,O
a,O
post-effective,O
amendment,O
by,O
those,O
paragraphs,O
is,O
contained,O
in,O
reports,O
filed,O
with,O
or,O
furnished,O
to,O
the,O
Commission,O
by,O
the,O
registrants,O
pursuant,O
to,O
section,O
13,O
or,O
section,O
15,O
(,O
d,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
that,O
are,O
incorporated,O
by,O
reference,O
in,O
the,O
registration,O
statement,O
",",O
or,O
is,O
contained,O
in,O
a,O
form,O
of,O
prospectus,O
filed,O
pursuant,O
to,O
Rule,O
424,O
(,O
b,O
),O
that,O
is,O
part,O
of,O
the,O
registration,O
statement,O
.,O
,O
(,O
2,O
),O
That,O
",",O
for,O
the,O
purpose,O
of,O
determining,O
any,O
liability,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
each,O
such,O
post-effective,O
amendment,O
shall,O
be,O
deemed,O
to,O
be,O
a,O
new,O
registration,O
statement,O
relating,O
to,O
the,O
securities,O
offered,O
therein,O
",",O
and,O
the,O
offering,O
of,O
such,O
securities,O
at,O
that,O
time,O
shall,O
be,O
deemed,O
to,O
be,O
the,O
initial,O
bona,O
fide,O
offering,O
thereof,O
.,O
,O
(,O
3,O
),O
To,O
remove,O
from,O
registration,O
by,O
means,O
of,O
a,O
post-effective,O
amendment,O
any,O
of,O
the,O
securities,O
being,O
registered,O
which,O
remain,O
unsold,O
at,O
the,O
termination,O
of,O
the,O
offering,O
.,O
,O
(,O
4,O
),O
That,O
",",O
for,O
the,O
purpose,O
of,O
determining,O
liability,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
to,O
any,O
purchaser,O
:,O
,O
(,O
ii,O
),O
Each,O
prospectus,O
required,O
to,O
be,O
filed,O
pursuant,O
to,O
Rule,O
424,O
(,O
b,O
),O
(,O
2,O
),O
",",O
(,O
b,O
),O
(,O
5,O
),O
or,O
(,O
b,O
),O
(,O
7,O
),O
as,O
part,O
of,O
a,O
registration,O
statement,O
in,O
reliance,O
on,O
Rule,O
430B,O
relating,O
to,O
an,O
offering,O
made,O
pursuant,O
to,O
Rule,O
415,O
(,O
a,O
),O
(,O
1,O
),O
(,O
i,O
),O
",",O
(,O
vii,O
),O
or,O
(,O
x,O
),O
for,O
the,O
purpose,O
of,O
providing,O
the,O
information,O
required,O
by,O
section,O
10,O
(,O
a,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
shall,O
be,O
deemed,O
to,O
be,O
part,O
of,O
and,O
included,O
in,O
the,O
registration,O
statement,O
as,O
of,O
the,O
earlier,O
of,O
the,O
date,O
such,O
form,O
of,O
prospectus,O
is,O
first,O
used,O
after,O
effectiveness,O
or,O
the,O
date,O
of,O
the,O
first,O
contract,O
of,O
sale,O
of,O
securities,O
in,O
the,O
offering,O
described,O
in,O
the,O
prospectus,O
.,O
,O
As,O
provided,O
in,O
Rule,O
430B,O
",",O
for,O
liability,O
purposes,O
of,O
the,O
issuer,O
and,O
any,O
person,O
that,O
is,O
at,O
that,O
date,O
an,O
underwriter,O
",",O
such,O
date,O
shall,O
be,O
deemed,O
to,O
be,O
a,O
new,O
effective,O
date,O
of,O
the,O
registration,O
statement,O
relating,O
to,O
the,O
securities,O
in,O
the,O
registration,O
statement,O
to,O
which,O
the,O
prospectus,O
relates,O
",",O
and,O
the,O
offering,O
of,O
such,O
securities,O
at,O
that,O
time,O
shall,O
be,O
deemed,O
to,O
be,O
the,O
initial,O
bona,O
fide,O
offering,O
thereof,O
.,O
,O
Provided,O
",",O
however,O
",",O
that,O
no,O
statement,O
made,O
in,O
a,O
registration,O
statement,O
or,O
prospectus,O
that,O
is,O
part,O
of,O
the,O
registration,O
statement,O
or,O
made,O
in,O
a,O
document,O
incorporated,O
or,O
deemed,O
incorporated,O
by,O
reference,O
into,O
the,O
registration,O
statement,O
or,O
prospectus,O
that,O
is,O
part,O
of,O
the,O
registration,O
statement,O
will,O
",",O
as,O
to,O
a,O
purchaser,O
with,O
a,O
time,O
of,O
contract,O
of,O
sale,O
prior,O
to,O
such,O
effective,O
date,O
",",O
supersede,O
or,O
modify,O
any,O
statement,O
that,O
was,O
made,O
in,O
the,O
registration,O
statement,O
or,O
prospectus,O
that,O
was,O
part,O
of,O
the,O
registration,O
statement,O
or,O
made,O
in,O
any,O
such,O
document,O
immediately,O
prior,O
to,O
such,O
effective,O
date,O
.,O
,O
(,O
5,O
),O
That,O
",",O
for,O
the,O
purpose,O
of,O
determining,O
liability,O
of,O
the,O
registrants,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
to,O
any,O
purchaser,O
in,O
the,O
initial,O
distribution,O
of,O
the,O
securities,O
",",O
the,O
undersigned,O
registrants,O
undertake,O
that,O
in,O
a,O
primary,O
offering,O
of,O
securities,O
of,O
the,O
undersigned,O
registrants,O
pursuant,O
to,O
this,O
registration,O
statement,O
",",O
regardless,O
of,O
the,O
underwriting,O
method,O
used,O
to,O
sell,O
the,O
securities,O
to,O
the,O
purchaser,O
",",O
if,O
the,O
securities,O
are,O
offered,O
or,O
sold,O
to,O
such,O
purchaser,O
by,O
means,O
of,O
any,O
of,O
the,O
following,O
communications,O
",",O
each,O
of,O
the,O
undersigned,O
registrants,O
will,O
be,O
a,O
seller,O
to,O
the,O
purchaser,O
and,O
will,O
be,O
considered,O
to,O
offer,O
or,O
sell,O
such,O
securities,O
to,O
such,O
purchaser,O
:,O
,O
(,O
i,O
),O
Any,O
preliminary,O
prospectus,O
or,O
prospectus,O
of,O
the,O
undersigned,O
registrants,O
relating,O
to,O
the,O
offering,O
required,O
to,O
be,O
filed,O
pursuant,O
to,O
Rule,O
424,O
;,O
,O
(,O
ii,O
),O
Any,O
free,O
writing,O
prospectus,O
relating,O
to,O
the,O
offering,O
prepared,O
by,O
or,O
on,O
behalf,O
of,O
the,O
undersigned,O
registrants,O
or,O
used,O
or,O
referred,O
to,O
by,O
such,O
undersigned,O
registrants,O
;,O
,O
(,O
iv,O
),O
Any,O
other,O
communication,O
that,O
is,O
an,O
offer,O
in,O
the,O
offering,O
made,O
by,O
the,O
undersigned,O
registrants,O
to,O
the,O
purchaser,O
.,O
,O
(,O
b,O
),O
The,O
undersigned,O
registrants,O
hereby,O
undertake,O
that,O
",",O
for,O
purposes,O
of,O
determining,O
any,O
liability,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
each,O
filing,O
of,O
the,O
registrants,O
annual,O
report,O
pursuant,O
to,O
section,O
13,O
(,O
a,O
),O
or,O
section,O
15,O
(,O
d,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
and,O
",",O
where,O
applicable,O
",",O
each,O
filing,O
of,O
an,O
employee,O
benefit,O
plan,O
s,O
annual,O
report,O
pursuant,O
to,O
section,O
15,O
(,O
d,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
that,O
is,O
incorporated,O
by,O
reference,O
in,O
the,O
registration,O
statement,O
shall,O
be,O
deemed,O
to,O
be,O
a,O
new,O
registration,O
statement,O
relating,O
to,O
the,O
securities,O
offered,O
therein,O
",",O
and,O
the,O
offering,O
of,O
such,O
securities,O
at,O
that,O
time,O
shall,O
be,O
deemed,O
to,O
be,O
the,O
initial,O
bona,O
fide,O
offering,O
thereof,O
.,O
,O
(,O
c,O
),O
To,O
file,O
an,O
application,O
for,O
the,O
purpose,O
of,O
determining,O
the,O
eligibility,O
of,O
the,O
trustee,O
under,O
subsection,O
(,O
a,O
),O
of,O
Section,O
310,O
of,O
the,O
Trust,I-LEGISLATION/ACT
Indenture,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
Act,O
),O
in,O
accordance,O
with,O
the,O
rules,O
and,O
regulations,O
prescribed,O
by,O
the,O
SEC,I-GOVERNMENT
under,O
Section,O
305,O
(,O
b,O
),O
(,O
2,O
),O
of,O
the,O
Act,O
.,O
,O
(,O
d,O
),O
Insofar,O
as,O
indemnification,O
for,O
liabilities,O
arising,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
may,O
be,O
permitted,O
to,O
directors,O
",",O
officers,O
and,O
controlling,O
persons,O
of,O
the,O
registrants,O
pursuant,O
to,O
the,O
foregoing,O
provisions,O
",",O
or,O
otherwise,O
",",O
the,O
registrants,O
have,O
been,O
advised,O
that,O
in,O
the,O
opinion,O
of,O
the,O
SEC,I-GOVERNMENT
such,O
indemnification,O
is,O
against,O
public,O
policy,O
as,O
expressed,O
in,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
is,O
",",O
therefore,O
",",O
unenforceable,O
.,O
,O
In,O
the,O
event,O
that,O
a,O
claim,O
for,O
indemnification,O
against,O
such,O
liabilities,O
(,O
other,O
than,O
the,O
payment,O
by,O
the,O
registrants,O
of,O
expenses,O
incurred,O
or,O
paid,O
by,O
a,O
director,O
",",O
officer,O
or,O
controlling,O
person,O
of,O
the,O
registrants,O
in,O
the,O
successful,O
defense,O
of,O
any,O
action,O
",",O
suit,O
or,O
proceeding,O
),O
is,O
asserted,O
by,O
such,O
director,O
",",O
officer,O
or,O
controlling,O
person,O
in,O
connection,O
with,O
the,O
securities,O
being,O
registered,O
",",O
the,O
registrants,O
will,O
",",O
unless,O
in,O
the,O
opinion,O
of,O
its,O
counsel,O
the,O
matter,O
has,O
been,O
settled,O
by,O
controlling,O
precedent,O
",",O
submit,O
to,O
a,O
court,O
of,O
appropriate,O
jurisdiction,O
the,O
question,O
whether,O
such,O
indemnification,O
by,O
it,O
is,O
against,O
public,O
policy,O
as,O
expressed,O
in,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
will,O
be,O
governed,O
by,O
the,O
final,O
adjudication,O
of,O
such,O
issue,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
registrant,O
certifies,O
that,O
it,O
has,O
reasonable,O
grounds,O
to,O
believe,O
that,O
it,O
meets,O
all,O
of,O
the,O
requirements,O
for,O
filing,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
and,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
City,I-LOCATION
of,I-LOCATION
Dallas,I-LOCATION
",",O
State,I-LOCATION
of,I-LOCATION
Texas,I-LOCATION
",",O
on,O
May,O
23,O
",",O
2011,O
.,O
,O
KNOW,O
ALL,O
PERSONS,O
BY,O
THESE,O
PRESENTS,O
",",O
that,O
each,O
person,O
whose,O
signature,O
appears,O
below,O
hereby,O
constitutes,O
and,O
appoints,O
Michael,I-PERSON
J.,I-PERSON
Bradley,I-PERSON
and,O
Paul,I-PERSON
M.,I-PERSON
Jolas,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
any,O
of,O
whom,O
may,O
act,O
without,O
the,O
joinder,O
of,O
the,O
other,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
with,O
full,O
power,O
of,O
substitution,O
and,O
resubstitution,O
for,O
him,O
in,O
any,O
and,O
all,O
capacities,O
",",O
to,O
sign,O
any,O
or,O
all,O
amendments,O
or,O
post-effective,O
amendments,O
to,O
this,O
Registration,O
Statement,O
",",O
or,O
any,O
Registration,O
Statement,O
for,O
the,O
same,O
offering,O
that,O
is,O
to,O
be,O
effective,O
upon,O
filing,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
and,O
to,O
file,O
the,O
same,O
",",O
with,O
exhibits,O
hereto,O
and,O
other,O
documents,O
in,O
connection,O
therewith,O
or,O
in,O
connection,O
with,O
the,O
registration,O
of,O
the,O
securities,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
granting,O
unto,O
such,O
attorneys-in-fact,O
and,O
agents,O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
and,O
necessary,O
in,O
connection,O
with,O
such,O
matters,O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
that,O
such,O
attorneys-in-fact,O
and,O
agents,O
or,O
his,O
substitutes,O
may,O
do,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
registration,O
statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
indicated,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
registrant,O
certifies,O
that,O
it,O
has,O
reasonable,O
grounds,O
to,O
believe,O
that,O
it,O
meets,O
all,O
of,O
the,O
requirements,O
for,O
filing,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
and,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
City,I-LOCATION
of,I-LOCATION
Dallas,I-LOCATION
",",O
State,I-LOCATION
of,I-LOCATION
Texas,I-LOCATION
",",O
on,O
May,O
23,O
",",O
2011,O
.,O
,O
REGENCY,I-BUSINESS
ENERGY,I-BUSINESS
FINANCE,I-BUSINESS
CORP.,I-BUSINESS
KNOW,O
ALL,O
PERSONS,O
BY,O
THESE,O
PRESENTS,O
",",O
that,O
each,O
person,O
whose,O
signature,O
appears,O
below,O
hereby,O
constitutes,O
and,O
appoints,O
Michael,I-PERSON
J.,I-PERSON
Bradley,I-PERSON
and,O
Paul,I-PERSON
M.,I-PERSON
Jolas,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
any,O
of,O
whom,O
may,O
act,O
without,O
the,O
joinder,O
of,O
the,O
other,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
with,O
full,O
power,O
of,O
substitution,O
and,O
resubstitution,O
for,O
him,O
in,O
any,O
and,O
all,O
capacities,O
",",O
to,O
sign,O
any,O
or,O
all,O
amendments,O
or,O
post-effective,O
amendments,O
to,O
this,O
Registration,O
Statement,O
",",O
or,O
any,O
Registration,O
Statement,O
for,O
the,O
same,O
offering,O
that,O
is,O
to,O
be,O
effective,O
upon,O
filing,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
and,O
to,O
file,O
the,O
same,O
",",O
with,O
exhibits,O
hereto,O
and,O
other,O
documents,O
in,O
connection,O
therewith,O
or,O
in,O
connection,O
with,O
the,O
registration,O
of,O
the,O
securities,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
granting,O
unto,O
such,O
attorneys-in-fact,O
and,O
agents,O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
and,O
necessary,O
in,O
connection,O
with,O
such,O
matters,O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
that,O
such,O
attorneys-in-fact,O
and,O
agents,O
or,O
his,O
substitutes,O
may,O
do,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
registration,O
statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
indicated,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
registrant,O
certifies,O
that,O
it,O
has,O
reasonable,O
grounds,O
to,O
believe,O
that,O
it,O
meets,O
all,O
of,O
the,O
requirements,O
for,O
filing,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
and,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
City,I-LOCATION
of,I-LOCATION
Dallas,I-LOCATION
",",O
State,I-LOCATION
of,I-LOCATION
Texas,I-LOCATION
",",O
on,O
May,O
23,O
",",O
2011,O
.,O
,O
KNOW,O
ALL,O
PERSONS,O
BY,O
THESE,O
PRESENTS,O
",",O
that,O
each,O
person,O
whose,O
signature,O
appears,O
below,O
hereby,O
constitutes,O
and,O
appoints,O
Michael,I-PERSON
J.,I-PERSON
Bradley,I-PERSON
and,O
Paul,I-PERSON
M.,I-PERSON
Jolas,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
any,O
of,O
whom,O
may,O
act,O
without,O
the,O
joinder,O
of,O
the,O
other,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
with,O
full,O
power,O
of,O
substitution,O
and,O
resubstitution,O
for,O
him,O
in,O
any,O
and,O
all,O
capacities,O
",",O
to,O
sign,O
any,O
or,O
all,O
amendments,O
or,O
post-effective,O
amendments,O
to,O
this,O
Registration,O
Statement,O
",",O
or,O
any,O
Registration,O
Statement,O
for,O
the,O
same,O
offering,O
that,O
is,O
to,O
be,O
effective,O
upon,O
filing,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
and,O
to,O
file,O
the,O
same,O
",",O
with,O
exhibits,O
hereto,O
and,O
other,O
documents,O
in,O
connection,O
therewith,O
or,O
in,O
connection,O
with,O
the,O
registration,O
of,O
the,O
securities,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
granting,O
unto,O
such,O
attorneys-in-fact,O
and,O
agents,O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
and,O
necessary,O
in,O
connection,O
with,O
such,O
matters,O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
that,O
such,O
attorneys-in-fact,O
and,O
agents,O
or,O
his,O
substitutes,O
may,O
do,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
registration,O
statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
indicated,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
registrants,O
(,O
each,O
",",O
a,O
Corporate,O
Guarantor,O
),O
certify,O
that,O
they,O
have,O
reasonable,O
grounds,O
to,O
believe,O
that,O
they,O
meet,O
all,O
of,O
the,O
requirements,O
for,O
filing,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
and,O
have,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
their,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
City,I-LOCATION
of,I-LOCATION
Dallas,I-LOCATION
",",O
State,I-LOCATION
of,I-LOCATION
Texas,I-LOCATION
",",O
on,O
May,O
23,O
",",O
2011,O
.,O
,O
PUEBLO,I-BUSINESS
HOLDINGS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
KNOW,O
ALL,O
PERSONS,O
BY,O
THESE,O
PRESENTS,O
",",O
that,O
each,O
person,O
whose,O
signature,O
appears,O
below,O
hereby,O
constitutes,O
and,O
appoints,O
Michael,I-PERSON
J.,I-PERSON
Bradley,I-PERSON
and,O
Paul,I-PERSON
M.,I-PERSON
Jolas,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
any,O
of,O
whom,O
may,O
act,O
without,O
the,O
joinder,O
of,O
the,O
other,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
with,O
full,O
power,O
of,O
substitution,O
and,O
resubstitution,O
for,O
him,O
in,O
any,O
and,O
all,O
capacities,O
",",O
to,O
sign,O
any,O
or,O
all,O
amendments,O
or,O
post-effective,O
amendments,O
to,O
this,O
Registration,O
Statement,O
",",O
or,O
any,O
Registration,O
Statement,O
for,O
the,O
same,O
offering,O
that,O
is,O
to,O
be,O
effective,O
upon,O
filing,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
and,O
to,O
file,O
the,O
same,O
",",O
with,O
exhibits,O
hereto,O
and,O
other,O
documents,O
in,O
connection,O
therewith,O
or,O
in,O
connection,O
with,O
the,O
registration,O
of,O
the,O
securities,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
granting,O
unto,O
such,O
attorneys-in-fact,O
and,O
agents,O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
and,O
necessary,O
in,O
connection,O
with,O
such,O
matters,O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
that,O
such,O
attorneys-in-fact,O
and,O
agents,O
or,O
his,O
substitutes,O
may,O
do,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
registration,O
statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
indicated,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
registrants,O
(,O
each,O
",",O
a,O
LLC,O
Guarantor,O
),O
certify,O
that,O
they,O
have,O
reasonable,O
grounds,O
to,O
believe,O
that,O
they,O
meet,O
all,O
of,O
the,O
requirements,O
for,O
filing,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
and,O
have,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
their,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
City,I-LOCATION
of,I-LOCATION
Dallas,I-LOCATION
",",O
State,I-LOCATION
of,I-LOCATION
Texas,I-LOCATION
",",O
on,O
May,O
23,O
",",O
2011,O
.,O
,O
KNOW,O
ALL,O
PERSONS,O
BY,O
THESE,O
PRESENTS,O
",",O
that,O
each,O
person,O
whose,O
signature,O
appears,O
below,O
hereby,O
constitutes,O
and,O
appoints,O
Michael,I-PERSON
J.,I-PERSON
Bradley,I-PERSON
and,O
Paul,I-PERSON
M.,I-PERSON
Jolas,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
any,O
of,O
whom,O
may,O
act,O
without,O
the,O
joinder,O
of,O
the,O
other,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
with,O
full,O
power,O
of,O
substitution,O
and,O
resubstitution,O
for,O
him,O
in,O
any,O
and,O
all,O
capacities,O
",",O
to,O
sign,O
any,O
or,O
all,O
amendments,O
or,O
post-effective,O
amendments,O
to,O
this,O
Registration,O
Statement,O
",",O
or,O
any,O
Registration,O
Statement,O
for,O
the,O
same,O
offering,O
that,O
is,O
to,O
be,O
effective,O
upon,O
filing,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
and,O
to,O
file,O
the,O
same,O
",",O
with,O
exhibits,O
hereto,O
and,O
other,O
documents,O
in,O
connection,O
therewith,O
or,O
in,O
connection,O
with,O
the,O
registration,O
of,O
the,O
securities,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
granting,O
unto,O
such,O
attorneys-in-fact,O
and,O
agents,O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
and,O
necessary,O
in,O
connection,O
with,O
such,O
matters,O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
that,O
such,O
attorneys-in-fact,O
and,O
agents,O
or,O
his,O
substitutes,O
may,O
do,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
registration,O
statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
indicated,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
registrant,O
(,O
the,O
JV,O
),O
certifies,O
that,O
it,O
has,O
reasonable,O
grounds,O
to,O
believe,O
that,O
it,O
meets,O
all,O
of,O
the,O
requirements,O
for,O
filing,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
and,O
has,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
City,I-LOCATION
of,I-LOCATION
Dallas,I-LOCATION
",",O
State,I-LOCATION
of,I-LOCATION
Texas,I-LOCATION
",",O
on,O
May,O
23,O
",",O
2011,O
.,O
,O
KNOW,O
ALL,O
PERSONS,O
BY,O
THESE,O
PRESENTS,O
",",O
that,O
each,O
person,O
whose,O
signature,O
appears,O
below,O
hereby,O
constitutes,O
and,O
appoints,O
Michael,I-PERSON
J.,I-PERSON
Bradley,I-PERSON
and,O
Paul,I-PERSON
M.,I-PERSON
Jolas,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
any,O
of,O
whom,O
may,O
act,O
without,O
the,O
joinder,O
of,O
the,O
other,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
with,O
full,O
power,O
of,O
substitution,O
and,O
resubstitution,O
for,O
him,O
in,O
any,O
and,O
all,O
capacities,O
",",O
to,O
sign,O
any,O
or,O
all,O
amendments,O
or,O
post-effective,O
amendments,O
to,O
this,O
Registration,O
Statement,O
",",O
or,O
any,O
Registration,O
Statement,O
for,O
the,O
same,O
offering,O
that,O
is,O
to,O
be,O
effective,O
upon,O
filing,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
and,O
to,O
file,O
the,O
same,O
",",O
with,O
exhibits,O
hereto,O
and,O
other,O
documents,O
in,O
connection,O
therewith,O
or,O
in,O
connection,O
with,O
the,O
registration,O
of,O
the,O
securities,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
granting,O
unto,O
such,O
attorneys-in-fact,O
and,O
agents,O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
and,O
necessary,O
in,O
connection,O
with,O
such,O
matters,O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
that,O
such,O
attorneys-in-fact,O
and,O
agents,O
or,O
his,O
substitutes,O
may,O
do,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
registration,O
statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
indicated,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
the,O
registrant,O
certifies,O
that,O
it,O
has,O
reasonable,O
grounds,O
to,O
believe,O
that,O
it,O
meets,O
all,O
of,O
the,O
requirements,O
for,O
filing,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
and,O
have,O
duly,O
caused,O
this,O
registration,O
statement,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
",",O
in,O
the,O
City,I-LOCATION
of,I-LOCATION
Dallas,I-LOCATION
",",O
State,I-LOCATION
of,I-LOCATION
Texas,I-LOCATION
",",O
on,O
May,O
23,O
",",O
2011,O
.,O
,O
KNOW,O
ALL,O
PERSONS,O
BY,O
THESE,O
PRESENTS,O
",",O
that,O
each,O
person,O
whose,O
signature,O
appears,O
below,O
hereby,O
constitutes,O
and,O
appoints,O
Michael,I-PERSON
J.,I-PERSON
Bradley,I-PERSON
and,O
Paul,I-PERSON
M.,I-PERSON
Jolas,I-PERSON
",",O
and,O
each,O
of,O
them,O
",",O
any,O
of,O
whom,O
may,O
act,O
without,O
the,O
joinder,O
of,O
the,O
other,O
",",O
as,O
his,O
true,O
and,O
lawful,O
attorneys-in-fact,O
and,O
agents,O
",",O
with,O
full,O
power,O
of,O
substitution,O
and,O
resubstitution,O
for,O
him,O
in,O
any,O
and,O
all,O
capacities,O
",",O
to,O
sign,O
any,O
or,O
all,O
amendments,O
or,O
post-effective,O
amendments,O
to,O
this,O
Registration,O
Statement,O
",",O
or,O
any,O
Registration,O
Statement,O
for,O
the,O
same,O
offering,O
that,O
is,O
to,O
be,O
effective,O
upon,O
filing,O
pursuant,O
to,O
Rule,O
462,O
(,O
b,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
and,O
to,O
file,O
the,O
same,O
",",O
with,O
exhibits,O
hereto,O
and,O
other,O
documents,O
in,O
connection,O
therewith,O
or,O
in,O
connection,O
with,O
the,O
registration,O
of,O
the,O
securities,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
granting,O
unto,O
such,O
attorneys-in-fact,O
and,O
agents,O
full,O
power,O
and,O
authority,O
to,O
do,O
and,O
perform,O
each,O
and,O
every,O
act,O
and,O
thing,O
requisite,O
and,O
necessary,O
in,O
connection,O
with,O
such,O
matters,O
and,O
hereby,O
ratifying,O
and,O
confirming,O
all,O
that,O
such,O
attorneys-in-fact,O
and,O
agents,O
or,O
his,O
substitutes,O
may,O
do,O
or,O
cause,O
to,O
be,O
done,O
by,O
virtue,O
hereof,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
this,O
registration,O
statement,O
has,O
been,O
signed,O
by,O
the,O
following,O
persons,O
in,O
the,O
capacities,O
indicated,O
on,O
the,O
dates,O
indicated,O
:,O
,O
Ladies,O
and,O
Gentlemen,O
:,O
,O
We,O
have,O
acted,O
as,O
special,O
counsel,O
to,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Partners,I-BUSINESS
LP,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
limited,O
partnership,O
(,O
the,O
Partnership,O
),O
",",O
Regency,I-BUSINESS
Energy,I-BUSINESS
Finance,I-BUSINESS
Corp.,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
corporation,O
(,O
Regency,I-BUSINESS
Finance,I-BUSINESS
and,O
",",O
together,O
with,O
the,O
Partnership,O
",",O
the,O
Issuers,O
),O
",",O
and,O
the,O
entities,O
listed,O
on,O
Schedule,I-MISCELLANEOUS
I,I-MISCELLANEOUS
hereto,O
(,O
collectively,O
",",O
the,O
Guarantors,O
),O
",",O
in,O
connection,O
with,O
the,O
filing,O
on,O
the,O
date,O
hereof,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
the,O
Commission,O
),O
of,O
Post-Effective,O
Amendment,O
No.,O
1,O
(,O
the,O
Amendment,O
),O
to,O
the,O
registration,O
statement,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
(,O
File,O
No.,O
333-169901,O
),O
(,O
the,O
Registration,O
Statement,O
),O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Act,O
),O
.,O
,O
You,O
have,O
provided,O
us,O
with,O
a,O
draft,O
of,O
the,O
Amendment,O
in,O
the,O
form,O
in,O
which,O
it,O
will,O
be,O
filed,O
.,O
,O
The,O
Registration,O
Statement,O
registers,O
the,O
offering,O
and,O
sale,O
of,O
(,O
i,O
),O
one,O
or,O
more,O
series,O
of,O
the,O
Issuers,O
debt,O
securities,O
(,O
the,O
Debt,O
Securities,O
),O
to,O
be,O
issued,O
pursuant,O
to,O
an,O
Indenture,O
to,O
be,O
entered,O
into,O
among,O
the,O
Issuers,O
",",O
the,O
Guarantors,O
and,O
U.S.,I-BUSINESS
Bank,I-BUSINESS
National,I-BUSINESS
Association,I-BUSINESS
",",O
as,O
trustee,O
",",O
a,O
form,O
of,O
which,O
is,O
attached,O
as,O
Exhibit,O
4.3,O
to,O
the,O
Registration,O
Statement,O
",",O
and,O
one,O
or,O
more,O
supplemental,O
indentures,O
thereto,O
(,O
collectively,O
",",O
the,O
Indenture,O
),O
;,O
and,O
(,O
ii,O
),O
guarantees,O
of,O
the,O
Debt,O
Securities,O
(,O
the,O
Guarantees,O
),O
by,O
the,O
Guarantors,O
.,O
,O
The,O
Debt,O
Securities,O
and,O
the,O
Guarantees,O
are,O
collectively,O
referred,O
to,O
as,O
the,O
Securities,O
.,O
,O
This,O
opinion,O
is,O
being,O
furnished,O
in,O
connection,O
with,O
the,O
requirements,O
of,O
Item,O
601,O
(,O
b,O
),O
(,O
5,O
),O
of,O
Regulation,I-LEGISLATION/ACT
S-K,I-LEGISLATION/ACT
under,O
the,O
Act,O
",",O
and,O
no,O
opinion,O
is,O
expressed,O
herein,O
as,O
to,O
any,O
matter,O
pertaining,O
to,O
the,O
contents,O
of,O
the,O
Amendment,O
",",O
Registration,O
Statement,O
or,O
related,O
prospectus,O
",",O
other,O
than,O
as,O
expressly,O
stated,O
herein,O
with,O
respect,O
to,O
the,O
issue,O
of,O
the,O
Securities,O
.,O
,O
As,O
such,O
counsel,O
",",O
we,O
have,O
examined,O
such,O
matters,O
of,O
fact,O
and,O
questions,O
of,O
law,O
as,O
we,O
have,O
considered,O
appropriate,O
for,O
purposes,O
of,O
this,O
letter,O
.,O
,O
factual,O
matters,O
without,O
having,O
independently,O
verified,O
such,O
factual,O
matters,O
.,O
,O
We,O
are,O
opining,O
herein,O
as,O
to,O
the,O
internal,O
laws,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
New,I-LOCATION
York,I-LOCATION
",",O
and,O
we,O
express,O
no,O
opinion,O
with,O
respect,O
to,O
the,O
applicability,O
thereto,O
",",O
or,O
the,O
effect,O
thereon,O
",",O
of,O
the,O
laws,O
of,O
any,O
other,O
jurisdiction,O
",",O
or,O
as,O
to,O
any,O
matters,O
of,O
municipal,O
laws,O
or,O
the,O
laws,O
of,O
any,O
local,O
agencies,O
within,O
any,O
state,O
.,O
,O
Subject,O
to,O
the,O
foregoing,O
and,O
the,O
other,O
matters,O
set,O
forth,O
herein,O
",",O
it,O
is,O
our,O
opinion,O
that,O
",",O
as,O
of,O
the,O
date,O
hereof,O
",",O
when,O
the,O
Indenture,O
has,O
been,O
duly,O
authorized,O
by,O
all,O
necessary,O
corporate,O
",",O
limited,O
liability,O
company,O
or,O
limited,O
partnership,O
action,O
",",O
as,O
applicable,O
",",O
of,O
the,O
Issuers,O
and,O
the,O
Guarantors,O
and,O
duly,O
executed,O
and,O
delivered,O
",",O
and,O
when,O
the,O
specific,O
terms,O
of,O
a,O
particular,O
Debt,O
Security,O
and,O
Guarantee,O
have,O
been,O
duly,O
established,O
in,O
accordance,O
with,O
the,O
terms,O
of,O
the,O
Indenture,O
and,O
authorized,O
by,O
all,O
necessary,O
corporate,O
",",O
limited,O
liability,O
company,O
or,O
limited,O
partnership,O
action,O
",",O
as,O
applicable,O
",",O
of,O
the,O
Issuers,O
and,O
the,O
Guarantors,O
",",O
and,O
such,O
Debt,O
Security,O
and,O
such,O
Guarantee,O
have,O
been,O
duly,O
executed,O
",",O
authenticated,O
",",O
issued,O
and,O
delivered,O
against,O
payment,O
therefor,O
in,O
accordance,O
with,O
the,O
terms,O
of,O
the,O
Indenture,O
and,O
in,O
the,O
manner,O
contemplated,O
by,O
the,O
Registration,O
Statement,O
and/or,O
the,O
applicable,O
prospectus,O
and,O
by,O
such,O
corporate,O
",",O
limited,O
liability,O
company,O
or,O
limited,O
partnership,O
action,O
",",O
as,O
applicable,O
(,O
i,O
),O
such,O
Debt,O
Security,O
will,O
be,O
a,O
legally,O
valid,O
and,O
binding,O
obligation,O
of,O
each,O
Issuer,O
",",O
enforceable,O
against,O
such,O
Issuer,O
in,O
accordance,O
with,O
its,O
terms,O
;,O
and,O
(,O
ii,O
),O
such,O
Guarantee,O
will,O
be,O
a,O
legally,O
valid,O
and,O
binding,O
obligation,O
of,O
such,O
Guarantor,O
",",O
enforceable,O
against,O
such,O
Guarantor,O
in,O
accordance,O
with,O
its,O
terms,O
.,O
,O
Our,O
opinions,O
are,O
subject,O
to,O
:,O
(,O
i,O
),O
the,O
effect,O
of,O
bankruptcy,O
",",O
insolvency,O
",",O
reorganization,O
",",O
preference,O
",",O
fraudulent,O
transfer,O
",",O
moratorium,O
or,O
other,O
similar,O
laws,O
relating,O
to,O
or,O
affecting,O
the,O
rights,O
and,O
remedies,O
of,O
creditors,O
;,O
(,O
ii,O
),O
the,O
effect,O
of,O
general,O
principles,O
of,O
equity,O
",",O
whether,O
considered,O
in,O
a,O
proceeding,O
in,O
equity,O
or,O
at,O
law,O
(,O
including,O
the,O
possible,O
unavailability,O
of,O
specific,O
performance,O
or,O
injunctive,O
relief,O
),O
",",O
concepts,O
of,O
materiality,O
",",O
reasonableness,O
",",O
good,O
faith,O
and,O
fair,O
dealing,O
",",O
and,O
the,O
discretion,O
of,O
the,O
court,O
before,O
which,O
a,O
proceeding,O
is,O
brought,O
;,O
and,O
(,O
iii,O
),O
the,O
invalidity,O
under,O
certain,O
circumstances,O
under,O
law,O
or,O
court,O
decisions,O
of,O
provisions,O
providing,O
for,O
the,O
indemnification,O
of,O
or,O
contribution,O
to,O
a,O
party,O
with,O
respect,O
to,O
a,O
liability,O
where,O
such,O
indemnification,O
or,O
contribution,O
is,O
contrary,O
to,O
public,O
policy,O
.,O
,O
claim,O
with,O
respect,O
to,O
a,O
security,O
denominated,O
in,O
other,O
than,O
U.S.,I-LOCATION
dollars,O
(,O
or,O
a,O
judgment,O
in,O
respect,O
of,O
such,O
a,O
claim,O
),O
be,O
converted,O
into,O
U.S.,I-LOCATION
dollars,O
at,O
a,O
rate,O
of,O
exchange,O
at,O
a,O
particular,O
date,O
",",O
to,O
the,O
extent,O
applicable,O
law,O
otherwise,O
provides,O
",",O
and,O
(,O
q,O
),O
the,O
severability,O
",",O
if,O
invalid,O
",",O
of,O
provisions,O
to,O
the,O
foregoing,O
effect,O
.,O
,O
With,O
your,O
consent,O
",",O
we,O
have,O
assumed,O
(,O
i,O
),O
that,O
the,O
Indenture,O
",",O
the,O
Debt,O
Securities,O
and,O
the,O
Guarantees,O
(,O
collectively,O
",",O
the,O
Documents,O
),O
will,O
be,O
governed,O
by,O
the,O
internal,O
laws,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
New,I-LOCATION
York,I-LOCATION
",",O
(,O
ii,O
),O
that,O
each,O
of,O
the,O
Documents,O
will,O
be,O
duly,O
authorized,O
",",O
executed,O
and,O
delivered,O
by,O
the,O
parties,O
thereto,O
",",O
(,O
iii,O
),O
that,O
each,O
of,O
the,O
Documents,O
will,O
constitute,O
legally,O
valid,O
and,O
binding,O
obligations,O
of,O
the,O
parties,O
thereto,O
other,O
than,O
the,O
Issuers,O
and,O
the,O
Guarantors,O
",",O
enforceable,O
against,O
each,O
of,O
them,O
in,O
accordance,O
with,O
their,O
respective,O
terms,O
",",O
and,O
(,O
iv,O
),O
that,O
the,O
status,O
of,O
each,O
of,O
the,O
Documents,O
as,O
legally,O
valid,O
and,O
binding,O
obligations,O
of,O
the,O
parties,O
will,O
not,O
be,O
affected,O
by,O
any,O
(,O
a,O
),O
breaches,O
of,O
",",O
or,O
defaults,O
under,O
",",O
agreements,O
or,O
instruments,O
",",O
(,O
b,O
),O
violations,O
of,O
statutes,O
",",O
rules,O
",",O
regulations,O
or,O
court,O
or,O
governmental,O
orders,O
",",O
or,O
(,O
c,O
),O
failures,O
to,O
obtain,O
required,O
consents,O
",",O
approvals,O
or,O
authorizations,O
from,O
",",O
or,O
to,O
make,O
required,O
registrations,O
",",O
declarations,O
or,O
filings,O
with,O
",",O
governmental,O
authorities,O
.,O
,O
This,O
opinion,O
is,O
for,O
your,O
benefit,O
in,O
connection,O
with,O
the,O
Registration,O
Statement,O
and,O
may,O
be,O
relied,O
upon,O
by,O
you,O
and,O
by,O
persons,O
entitled,O
to,O
rely,O
upon,O
it,O
pursuant,O
to,O
the,O
applicable,O
provisions,O
of,O
the,O
Act,O
.,O
,O
We,O
consent,O
to,O
your,O
filing,O
this,O
opinion,O
as,O
an,O
exhibit,O
to,O
the,O
Registration,O
Statement,O
and,O
to,O
the,O
reference,O
to,O
our,O
firm,O
contained,O
in,O
the,O
base,O
prospectus,O
under,O
the,O
heading,O
Legal,O
Matters,O
.,O
,O
In,O
giving,O
such,O
consent,O
",",O
we,O
do,O
not,O
thereby,O
admit,O
that,O
we,O
are,O
in,O
the,O
category,O
of,O
persons,O
whose,O
consent,O
is,O
required,O
under,O
Section,O
7,O
of,O
the,O
Act,O
or,O
the,O
rules,O
and,O
regulations,O
of,O
the,O
Commission,O
thereunder,O
.,O
,O
The,O
Partners,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Partners,I-BUSINESS
LP,I-BUSINESS
:,O
,O
We,O
consent,O
to,O
the,O
use,O
of,O
our,O
reports,O
dated,O
February,O
18,O
",",O
2011,O
",",O
with,O
respect,O
to,O
the,O
consolidated,O
balance,O
sheets,O
of,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Partners,I-BUSINESS
LP,I-BUSINESS
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
and,O
the,O
related,O
consolidated,O
statements,O
of,O
operations,O
",",O
comprehensive,O
income,O
(,O
loss,O
),O
",",O
cash,O
flows,O
",",O
and,O
partners,O
capital,O
and,O
noncontrolling,O
interest,O
for,O
the,O
period,O
from,O
May,O
26,O
",",O
2010,O
to,O
December,O
31,O
",",O
2010,O
",",O
the,O
period,O
from,O
January,O
1,O
",",O
2010,O
to,O
May,O
25,O
",",O
2010,O
",",O
and,O
the,O
years,O
ended,O
December,O
31,O
",",O
2009,O
and,O
2008,O
",",O
and,O
the,O
effectiveness,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
incorporated,O
herein,O
by,O
reference,O
",",O
and,O
to,O
the,O
reference,O
to,O
our,O
firm,O
under,O
the,O
heading,O
Experts,O
in,O
the,O
prospectus,O
",",O
as,O
amended,O
.,O
,O
Our,O
report,O
dated,O
February,O
18,O
",",O
2011,O
",",O
on,O
the,O
effectiveness,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
contains,O
an,O
explanatory,O
paragraph,O
that,O
states,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Partners,I-BUSINESS
LP,I-BUSINESS
acquired,O
Zephyr,I-BUSINESS
Gas,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
LP,I-BUSINESS
on,O
September,O
1,O
",",O
2010,O
",",O
and,O
management,O
excluded,O
from,O
its,O
assessment,O
of,O
the,O
effectiveness,O
of,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Partners,I-BUSINESS
LP,I-BUSINESS
s,O
internal,O
control,O
over,O
financial,O
reporting,O
as,O
of,O
December,O
31,O
",",O
2010,O
",",O
Zephyr,I-BUSINESS
Gas,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
LP,I-BUSINESS
s,O
internal,O
control,O
over,O
financial,O
reporting,O
associated,O
with,O
total,O
assets,O
of,O
$,O
"220,584,000",O
and,O
total,O
revenues,O
of,O
$,O
"13,662,000",O
included,O
in,O
the,O
consolidated,O
financial,O
statements,O
of,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Partners,I-BUSINESS
LP,I-BUSINESS
and,O
subsidiaries,O
at,O
December,O
31,O
",",O
2010,O
and,O
for,O
the,O
period,O
from,O
September,O
1,O
",",O
2010,O
to,O
December,O
31,O
",",O
2010,O
.,O
,O
Our,O
audit,O
of,O
internal,O
control,O
over,O
financial,O
reporting,O
of,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Partners,I-BUSINESS
LP,I-BUSINESS
also,O
excluded,O
an,O
evaluation,O
of,O
the,O
internal,O
control,O
over,O
financial,O
reporting,O
of,O
Zephyr,I-BUSINESS
Gas,I-BUSINESS
Services,I-BUSINESS
",",I-BUSINESS
LP,I-BUSINESS
.,I-BUSINESS
,O
The,O
Partners,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Partners,I-BUSINESS
LP,I-BUSINESS
:,O
,O
We,O
consent,O
to,O
the,O
use,O
of,O
our,O
report,O
dated,O
February,O
18,O
",",O
2011,O
",",O
with,O
respect,O
to,O
the,O
consolidated,O
balance,O
sheets,O
of,O
RIGS,I-BUSINESS
Haynesville,I-BUSINESS
Partnership,I-BUSINESS
Co,I-BUSINESS
.,I-BUSINESS
,O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
2009,O
",",O
and,O
the,O
related,O
consolidated,O
statements,O
of,O
income,O
",",O
cash,O
flows,O
",",O
and,O
partners,O
capital,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
and,O
for,O
the,O
period,O
from,O
March,O
18,O
",",O
2009,O
to,O
December,O
31,O
",",O
2009,O
",",O
and,O
the,O
related,O
statements,O
of,O
income,O
",",O
cash,O
flows,O
",",O
and,O
member,O
s,O
interest,O
of,O
Regency,I-BUSINESS
Intrastate,I-BUSINESS
Gas,I-BUSINESS
LLC,I-BUSINESS
for,O
the,O
period,O
from,O
January,O
1,O
",",O
2009,O
to,O
March,O
17,O
",",O
2009,O
",",O
incorporated,O
herein,O
by,O
reference,O
.,O
,O
We,O
hereby,O
consent,O
to,O
the,O
incorporation,O
by,O
reference,O
in,O
this,O
Post-Effective,O
Amendment,O
No.,O
1,O
to,O
the,O
Registration,O
Statement,O
on,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
of,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Partners,I-BUSINESS
LP,I-BUSINESS
and,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Finance,I-BUSINESS
Corp.,I-BUSINESS
of,O
our,O
report,O
dated,O
February,O
15,O
",",O
2011,O
relating,O
to,O
the,O
financial,O
statements,O
of,O
Midcontinent,I-BUSINESS
Express,I-BUSINESS
Pipeline,I-BUSINESS
LLC,I-BUSINESS
",",O
which,O
appears,O
in,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Partners,I-BUSINESS
LP,I-BUSINESS
s,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
We,O
consent,O
to,O
the,O
incorporation,O
by,O
reference,O
in,O
Post-Effective,O
Amendment,O
No.,O
1,O
to,O
the,O
Registration,O
Statement,O
(,O
Form,I-MISCELLANEOUS
S-3,I-MISCELLANEOUS
No.,O
333-169901,O
),O
of,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Partner,I-BUSINESS
LP,I-BUSINESS
and,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Finance,I-BUSINESS
Corp.,I-BUSINESS
of,O
our,O
report,O
dated,O
February,O
28,O
",",O
2011,O
",",O
with,O
respect,O
to,O
the,O
consolidated,O
financial,O
statements,O
of,O
LDH,I-BUSINESS
Energy,I-BUSINESS
Asset,I-BUSINESS
Holdings,I-BUSINESS
LLC,I-BUSINESS
",",O
included,O
in,O
Exhibit,O
99.2,O
of,O
Regency,I-BUSINESS
Energy,I-BUSINESS
Partner,I-BUSINESS
LP,I-BUSINESS
s,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K/A,I-MISCELLANEOUS
dated,O
May,O
20,O
",",O
2011,O
",",O
filed,O
with,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
.,O
,O
-DOCSTART-,O
,O
Filed,O
by,O
the,O
Registrant,O
þ,O
Filed,O
by,O
a,O
Party,O
other,O
than,O
the,O
Registrant,O
o,O
Check,O
the,O
appropriate,O
box,O
:,O
,O
Payment,O
of,O
Filing,O
Fee,O
(,O
Check,O
the,O
appropriate,O
box,O
),O
:,O
,O
To,O
Our,O
Stockholders,O
:,O
,O
You,O
are,O
cordially,O
invited,O
to,O
attend,O
the,O
2011,O
Annual,O
Meeting,O
of,O
Stockholders,O
of,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
The,O
annual,O
meeting,O
will,O
be,O
held,O
at,O
the,O
Sheraton,I-BUSINESS
Parsippany,I-BUSINESS
Hotel,I-BUSINESS
located,O
at,O
199,O
Smith,I-LOCATION
Road,I-LOCATION
",",O
Parsippany,I-LOCATION
",",O
New,I-LOCATION
Jersey,I-LOCATION
on,O
May,O
13,O
",",O
2011,O
at,O
9:00,O
a.m.,O
.,O
,O
In,O
connection,O
with,O
the,O
annual,O
meeting,O
",",O
we,O
have,O
prepared,O
a,O
Notice,O
of,O
Annual,O
Meeting,O
of,O
Stockholders,O
",",O
a,O
proxy,O
statement,O
",",O
and,O
our,O
2010,O
Annual,O
Report,O
to,O
Stockholders,O
",",O
which,O
provides,O
detailed,O
information,O
relating,O
to,O
our,O
activities,O
and,O
operating,O
performance,O
.,O
,O
This,O
year,O
we,O
are,O
pleased,O
to,O
be,O
taking,O
advantage,O
of,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
rules,O
that,O
allow,O
companies,O
to,O
furnish,O
their,O
proxy,O
materials,O
over,O
the,O
Internet,I-MISCELLANEOUS
.,O
,O
On,O
or,O
about,O
April,O
1,O
",",O
2011,O
",",O
we,O
mailed,O
to,O
our,O
stockholders,O
a,O
Notice,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Internet,I-MISCELLANEOUS
Availability,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Proxy,I-MISCELLANEOUS
Materials,I-MISCELLANEOUS
containing,O
instructions,O
on,O
how,O
to,O
access,O
our,O
proxy,O
materials,O
online,O
.,O
,O
This,O
Notice,O
and,O
the,O
proxy,O
statement,O
describe,O
the,O
matters,O
to,O
come,O
before,O
the,O
annual,O
meeting,O
.,O
,O
During,O
the,O
annual,O
meeting,O
",",O
we,O
will,O
also,O
review,O
the,O
activities,O
of,O
the,O
past,O
year,O
and,O
items,O
of,O
general,O
interest,O
about,O
the,O
company,O
.,O
,O
We,O
appreciate,O
your,O
continued,O
interest,O
and,O
support,O
as,O
a,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
We,O
hope,O
that,O
you,O
will,O
be,O
able,O
to,O
attend,O
the,O
annual,O
meeting,O
in,O
person,O
and,O
we,O
look,O
forward,O
to,O
seeing,O
you,O
.,O
,O
For,O
your,O
convenience,O
",",O
we,O
are,O
also,O
offering,O
a,O
webcast,O
of,O
the,O
annual,O
meeting,O
.,O
,O
The,O
webcast,O
will,O
be,O
available,O
by,O
accessing,O
www.watson.com,O
shortly,O
before,O
the,O
annual,O
meeting,O
time,O
.,O
,O
You,O
may,O
also,O
listen,O
to,O
a,O
replay,O
of,O
the,O
webcast,O
on,O
our,O
website,O
for,O
thirty,O
days,O
after,O
the,O
end,O
of,O
the,O
annual,O
meeting,O
.,O
,O
You,O
may,O
vote,O
your,O
shares,O
in,O
person,O
at,O
the,O
annual,O
meeting,O
.,O
,O
Whether,O
or,O
not,O
you,O
plan,O
to,O
attend,O
the,O
annual,O
meeting,O
",",O
you,O
may,O
also,O
vote,O
your,O
shares,O
:,O
(,O
i,O
),O
by,O
accessing,O
the,O
Internet,I-MISCELLANEOUS
site,O
described,O
in,O
the,O
Notice,O
provided,O
to,O
you,O
",",O
(,O
ii,O
),O
by,O
calling,O
the,O
toll-free,O
telephone,O
number,O
listed,O
at,O
the,O
Internet,I-MISCELLANEOUS
site,O
(,O
or,O
",",O
depending,O
on,O
the,O
voting,O
process,O
used,O
by,O
your,O
broker,O
or,O
nominee,O
",",O
pursuant,O
to,O
the,O
instructions,O
on,O
the,O
notice,O
",",O
proxy,O
card,O
or,O
voting,O
instruction,O
form,O
they,O
provide,O
to,O
you,O
),O
or,O
(,O
iii,O
),O
by,O
requesting,O
a,O
paper,O
copy,O
of,O
the,O
proxy,O
materials,O
and,O
marking,O
",",O
dating,O
and,O
signing,O
a,O
proxy,O
card,O
and,O
returning,O
it,O
in,O
the,O
accompanying,O
postage,O
paid,O
envelope,O
as,O
quickly,O
as,O
possible,O
.,O
,O
Your,O
vote,O
is,O
important,O
!,O
,O
Notice,O
of,O
Annual,O
Meeting,O
of,O
Stockholders,O
:,O
,O
You,O
are,O
hereby,O
notified,O
that,O
the,O
2011,O
Annual,O
Meeting,O
of,O
Stockholders,O
(,O
the,O
Meeting,O
),O
of,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
Company,O
),O
will,O
be,O
held,O
at,O
Sheraton,I-BUSINESS
Parsippany,I-BUSINESS
Hotel,I-BUSINESS
located,O
at,O
199,O
Smith,I-LOCATION
Road,I-LOCATION
",",O
Parsippany,I-LOCATION
",",O
New,I-LOCATION
Jersey,I-LOCATION
at,O
9:00,O
a.m.,O
local,O
time,O
",",O
on,O
May,O
13,O
",",O
2011,O
",",O
for,O
the,O
following,O
purposes,O
:,O
,O
To,O
elect,O
Michael,I-PERSON
J.,I-PERSON
Fedida,I-PERSON
",",O
Albert,I-PERSON
F.,I-PERSON
Hummel,I-PERSON
",",O
Catherine,I-PERSON
M.,I-PERSON
Klema,I-PERSON
and,O
Anthony,I-PERSON
Selwyn,I-PERSON
Tabatznik,I-PERSON
as,O
members,O
of,O
the,O
Board,O
of,O
Directors,O
to,O
hold,O
office,O
until,O
the,O
2014,O
Annual,O
Meeting,O
or,O
until,O
each,O
of,O
their,O
respective,O
successors,O
is,O
duly,O
elected,O
and,O
qualified,O
.,O
,O
To,O
approve,O
an,O
amendment,O
and,O
restatement,O
of,O
the,O
Company,O
s,O
articles,O
of,O
incorporation,O
to,O
provide,O
for,O
the,O
declassification,O
of,O
the,O
Board,O
of,O
Directors,O
and,O
to,O
delete,O
certain,O
provisions,O
from,O
the,O
articles,O
of,O
incorporation,O
.,O
,O
To,O
approve,O
the,O
Fourth,I-MISCELLANEOUS
Amendment,I-MISCELLANEOUS
and,I-MISCELLANEOUS
Restatement,I-MISCELLANEOUS
of,I-MISCELLANEOUS
the,I-MISCELLANEOUS
2001,I-MISCELLANEOUS
Incentive,I-MISCELLANEOUS
Award,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
.,O
,O
To,O
take,O
an,O
advisory,O
(,O
nonbinding,O
),O
vote,O
to,O
approve,O
Named,O
Executive,O
Officer,O
compensation,O
.,O
,O
To,O
take,O
an,O
advisory,O
(,O
nonbinding,O
),O
vote,O
on,O
the,O
frequency,O
of,O
future,O
advisory,O
votes,O
to,O
approve,O
Named,O
Executive,O
Officer,O
compensation,O
.,O
,O
To,O
ratify,O
the,O
appointment,O
of,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
as,O
the,O
Company,O
s,O
independent,O
registered,O
public,O
accounting,O
firm,O
for,O
the,O
fiscal,O
year,O
ending,O
December,O
31,O
",",O
2011,O
.,O
,O
To,O
transact,O
such,O
other,O
business,O
as,O
may,O
properly,O
come,O
before,O
the,O
Meeting,O
or,O
any,O
adjournment,O
thereof,O
.,O
,O
The,O
Board,O
of,O
Directors,O
has,O
fixed,O
the,O
close,O
of,O
business,O
on,O
March,O
18,O
",",O
2011,O
as,O
the,O
record,O
date,O
for,O
the,O
determination,O
of,O
stockholders,O
entitled,O
to,O
notice,O
of,O
and,O
to,O
vote,O
at,O
the,O
Meeting,O
.,O
,O
Only,O
stockholders,O
of,O
record,O
at,O
the,O
close,O
of,O
business,O
on,O
March,O
18,O
",",O
2011,O
will,O
be,O
entitled,O
to,O
notice,O
of,O
and,O
to,O
vote,O
at,O
the,O
Meeting,O
or,O
any,O
adjournment,O
thereof,O
.,O
,O
Your,O
attention,O
is,O
directed,O
to,O
the,O
attached,O
proxy,O
statement,O
for,O
more,O
complete,O
information,O
regarding,O
the,O
matters,O
to,O
be,O
acted,O
upon,O
at,O
the,O
Meeting,O
.,O
,O
You,O
may,O
vote,O
your,O
shares,O
in,O
person,O
at,O
the,O
Meeting,O
.,O
,O
Whether,O
or,O
not,O
you,O
plan,O
to,O
attend,O
the,O
Meeting,O
",",O
you,O
may,O
also,O
vote,O
your,O
shares,O
:,O
(,O
i,O
),O
by,O
accessing,O
the,O
Internet,I-MISCELLANEOUS
site,O
described,O
in,O
the,O
Notice,O
provided,O
to,O
you,O
",",O
(,O
ii,O
),O
by,O
calling,O
the,O
toll-free,O
telephone,O
number,O
listed,O
at,O
the,O
Internet,I-MISCELLANEOUS
site,O
(,O
or,O
",",O
depending,O
on,O
the,O
voting,O
process,O
used,O
by,O
your,O
broker,O
or,O
nominee,O
",",O
pursuant,O
to,O
the,O
instructions,O
on,O
the,O
notice,O
",",O
proxy,O
card,O
or,O
voting,O
instruction,O
form,O
they,O
provide,O
to,O
you,O
),O
",",O
or,O
(,O
iii,O
),O
by,O
requesting,O
a,O
paper,O
copy,O
of,O
the,O
proxy,O
materials,O
and,O
marking,O
",",O
dating,O
and,O
signing,O
a,O
proxy,O
card,O
and,O
returning,O
it,O
in,O
the,O
accompanying,O
postage,O
paid,O
envelope,O
as,O
quickly,O
as,O
possible,O
.,O
,O
This,O
proxy,O
statement,O
and,O
the,O
accompanying,O
proxy,O
are,O
furnished,O
to,O
stockholders,O
of,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
Watson,I-BUSINESS
",",O
the,O
Company,O
",",O
we,O
",",O
us,O
and,O
our,O
),O
in,O
connection,O
with,O
the,O
solicitation,O
of,O
proxies,O
by,O
our,O
Board,O
of,O
Directors,O
for,O
use,O
at,O
the,O
2011,O
Annual,O
Meeting,O
of,O
Stockholders,O
(,O
the,O
Meeting,O
),O
to,O
be,O
held,O
at,O
the,O
Sheraton,I-BUSINESS
Parsippany,I-BUSINESS
Hotel,I-BUSINESS
located,O
at,O
199,O
Smith,I-LOCATION
Road,I-LOCATION
",",O
Parsippany,I-LOCATION
",",O
New,I-LOCATION
Jersey,I-LOCATION
at,O
9:00,O
a.m.,O
local,O
time,O
on,O
May,O
13,O
",",O
2011,O
for,O
the,O
purposes,O
set,O
forth,O
in,O
the,O
accompanying,O
Notice,O
of,O
Annual,O
Meeting,O
of,O
Stockholders,O
.,O
,O
Directions,O
to,O
the,O
Meeting,O
can,O
be,O
viewed,O
at,O
www.starwoodhotels.com,O
.,O
,O
In,O
connection,O
with,O
the,O
Meeting,O
",",O
we,O
have,O
prepared,O
a,O
Notice,O
of,O
Annual,O
Meeting,O
of,O
Stockholders,O
",",O
a,O
proxy,O
statement,O
",",O
and,O
our,O
2010,O
Annual,O
Report,O
to,O
Stockholders,O
",",O
which,O
provides,O
detailed,O
information,O
relating,O
to,O
our,O
activities,O
and,O
operating,O
performance,O
.,O
,O
This,O
year,O
we,O
are,O
pleased,O
to,O
be,O
taking,O
advantage,O
of,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
(,O
SEC,I-GOVERNMENT
),O
rules,O
that,O
allow,O
companies,O
to,O
furnish,O
their,O
proxy,O
materials,O
over,O
the,O
Internet,I-MISCELLANEOUS
.,O
,O
On,O
April,O
1,O
",",O
2011,O
",",O
we,O
mailed,O
to,O
our,O
stockholders,O
a,O
Notice,O
Regarding,O
the,O
Availability,O
of,O
Proxy,O
Materials,O
(,O
the,O
Notice,O
),O
containing,O
instructions,O
on,O
how,O
to,O
access,O
our,O
proxy,O
materials,O
online,O
.,O
,O
Brokers,O
and,O
other,O
nominees,O
who,O
hold,O
shares,O
on,O
behalf,O
of,O
beneficial,O
owners,O
will,O
be,O
sending,O
their,O
own,O
similar,O
Notice,O
.,O
,O
We,O
believe,O
electronic,O
delivery,O
will,O
expedite,O
the,O
receipt,O
of,O
materials,O
",",O
while,O
lowering,O
costs,O
and,O
reducing,O
the,O
environmental,O
impact,O
of,O
our,O
Meeting,O
by,O
reducing,O
printing,O
and,O
mailing,O
of,O
full,O
sets,O
of,O
materials,O
.,O
,O
If,O
you,O
receive,O
a,O
Notice,O
by,O
mail,O
",",O
you,O
will,O
not,O
receive,O
a,O
printed,O
copy,O
of,O
the,O
materials,O
",",O
unless,O
you,O
specifically,O
request,O
one,O
.,O
,O
However,O
",",O
the,O
Notice,O
contains,O
instructions,O
on,O
how,O
to,O
receive,O
a,O
paper,O
copy,O
of,O
the,O
materials,O
by,O
mail,O
",",O
by,O
telephone,O
or,O
electronically,O
.,O
,O
If,O
you,O
have,O
received,O
paper,O
copies,O
of,O
these,O
materials,O
",",O
a,O
proxy,O
card,O
will,O
also,O
be,O
enclosed,O
.,O
,O
Whether,O
or,O
not,O
you,O
plan,O
to,O
attend,O
the,O
Meeting,O
",",O
we,O
encourage,O
you,O
to,O
vote,O
your,O
shares,O
.,O
,O
You,O
may,O
vote,O
:,O
,O
•,O
via,O
Internet,I-MISCELLANEOUS
;,O
,O
•,O
by,O
telephone,O
;,O
,O
•,O
in,O
person,O
at,O
the,O
Meeting,O
.,O
,O
If,O
you,O
plan,O
to,O
attend,O
the,O
Meeting,O
in,O
person,O
",",O
you,O
must,O
provide,O
proof,O
of,O
share,O
ownership,O
",",O
such,O
as,O
an,O
account,O
statement,O
",",O
and,O
a,O
form,O
of,O
personal,O
identification,O
in,O
order,O
to,O
be,O
admitted,O
to,O
the,O
Meeting,O
.,O
,O
Stockholders,O
of,O
record,O
at,O
the,O
close,O
of,O
business,O
on,O
March,O
18,O
",",O
2011,O
(,O
the,O
record,O
date,O
),O
are,O
entitled,O
to,O
notice,O
of,O
and,O
to,O
vote,O
at,O
the,O
Meeting,O
.,O
,O
On,O
such,O
date,O
",",O
there,O
were,O
outstanding,O
"126,400,372",O
shares,O
of,O
our,O
common,O
stock,O
",",O
par,O
value,O
$,O
0.0033,O
per,O
share,O
.,O
,O
In,O
deciding,O
all,O
questions,O
",",O
each,O
holder,O
of,O
common,O
stock,O
shall,O
be,O
entitled,O
to,O
one,O
vote,O
",",O
in,O
person,O
or,O
by,O
proxy,O
",",O
for,O
each,O
share,O
held,O
on,O
the,O
record,O
date,O
.,O
,O
Important,O
Notice,O
Regarding,O
the,O
Availability,O
of,O
Proxy,O
Materials,O
for,O
the,O
Stockholder,O
Meeting,O
to,O
Be,O
Held,O
on,O
May,O
13,O
",",O
2011,O
.,O
,O
This,O
proxy,O
statement,O
and,O
our,O
2010,O
Annual,O
Report,O
to,O
Stockholders,O
and,O
the,O
means,O
to,O
vote,O
by,O
Internet,I-MISCELLANEOUS
are,O
available,O
on,O
our,O
website,O
at,O
www.watson.com/proxy2011,O
and,O
at,O
www.proxyvote.com,O
.,O
,O
Our,O
website,O
also,O
contains,O
the,O
following,O
documents,O
:,O
the,O
Notice,O
of,O
Annual,O
Meeting,O
of,O
Stockholders,O
",",O
this,O
proxy,O
statement,O
and,O
proxy,O
card,O
sample,O
",",O
and,O
the,O
2010,O
Annual,O
Report,O
to,O
Stockholders,O
.,O
,O
You,O
are,O
encouraged,O
to,O
review,O
all,O
of,O
the,O
important,O
information,O
contained,O
in,O
the,O
proxy,O
materials,O
before,O
voting,O
.,O
,O
The,O
method,O
of,O
voting,O
by,O
proxy,O
differs,O
for,O
shares,O
held,O
as,O
a,O
record,O
holder,O
and,O
shares,O
held,O
in,O
street,O
name,O
.,O
,O
If,O
you,O
hold,O
your,O
shares,O
of,O
common,O
stock,O
as,O
a,O
record,O
holder,O
and,O
you,O
are,O
viewing,O
this,O
proxy,O
statement,O
on,O
the,O
Internet,I-MISCELLANEOUS
",",O
you,O
may,O
vote,O
by,O
submitting,O
a,O
proxy,O
over,O
the,O
Internet,I-MISCELLANEOUS
by,O
following,O
the,O
instructions,O
on,O
the,O
website,O
referred,O
to,O
in,O
the,O
Notice,O
previously,O
mailed,O
to,O
you,O
.,O
,O
If,O
you,O
hold,O
your,O
shares,O
of,O
common,O
stock,O
as,O
a,O
record,O
holder,O
and,O
you,O
are,O
reviewing,O
a,O
paper,O
copy,O
of,O
this,O
proxy,O
statement,O
",",O
you,O
may,O
vote,O
by,O
completing,O
",",O
dating,O
and,O
signing,O
the,O
proxy,O
card,O
that,O
was,O
included,O
with,O
the,O
proxy,O
statement,O
and,O
promptly,O
returning,O
it,O
in,O
the,O
preaddressed,O
",",O
postage-paid,O
envelope,O
provided,O
to,O
you,O
",",O
or,O
otherwise,O
mailing,O
it,O
to,O
us,O
.,O
,O
You,O
may,O
also,O
vote,O
by,O
attending,O
the,O
Meeting,O
and,O
voting,O
in,O
person,O
.,O
,O
If,O
you,O
hold,O
your,O
shares,O
of,O
common,O
stock,O
in,O
street,O
name,O
",",O
which,O
means,O
your,O
shares,O
are,O
held,O
of,O
record,O
by,O
a,O
broker,O
",",O
bank,O
or,O
nominee,O
",",O
you,O
will,O
receive,O
a,O
Notice,O
from,O
your,O
broker,O
",",O
bank,O
or,O
other,O
nominee,O
that,O
includes,O
instructions,O
on,O
how,O
to,O
vote,O
your,O
shares,O
.,O
,O
Your,O
broker,O
",",O
bank,O
or,O
nominee,O
may,O
allow,O
you,O
to,O
deliver,O
your,O
voting,O
instructions,O
over,O
the,O
Internet,I-MISCELLANEOUS
and,O
may,O
also,O
permit,O
you,O
to,O
submit,O
your,O
voting,O
instructions,O
by,O
telephone,O
.,O
,O
In,O
addition,O
",",O
you,O
may,O
request,O
paper,O
copies,O
of,O
the,O
proxy,O
statement,O
and,O
proxy,O
card,O
from,O
your,O
broker,O
",",O
bank,O
or,O
nominee,O
by,O
following,O
the,O
instructions,O
on,O
the,O
Notice,O
provided,O
by,O
your,O
broker,O
",",O
bank,O
or,O
nominee,O
.,O
,O
If,O
you,O
hold,O
your,O
shares,O
in,O
street,O
name,O
",",O
you,O
will,O
need,O
to,O
obtain,O
a,O
legal,O
proxy,O
from,O
your,O
bank,O
",",O
broker,O
or,O
nominee,O
in,O
order,O
for,O
you,O
to,O
vote,O
in,O
person,O
at,O
the,O
Meeting,O
.,O
,O
Your,O
vote,O
is,O
very,O
important,O
.,O
,O
Accordingly,O
",",O
please,O
submit,O
your,O
proxy,O
whether,O
or,O
not,O
you,O
plan,O
to,O
attend,O
the,O
Meeting,O
in,O
person,O
.,O
,O
You,O
should,O
vote,O
your,O
proxy,O
even,O
if,O
you,O
plan,O
to,O
attend,O
the,O
Meeting,O
.,O
,O
If,O
you,O
properly,O
give,O
your,O
proxy,O
and,O
submit,O
it,O
to,O
us,O
in,O
time,O
to,O
vote,O
",",O
one,O
of,O
the,O
individuals,O
named,O
as,O
your,O
proxy,O
will,O
vote,O
your,O
shares,O
as,O
you,O
have,O
directed,O
.,O
,O
The,O
Internet,I-MISCELLANEOUS
and,O
telephone,O
voting,O
facilities,O
will,O
close,O
at,O
11:59,O
p.m.,O
Eastern,I-MISCELLANEOUS
Time,I-MISCELLANEOUS
on,O
May,O
12,O
",",O
2011,O
.,O
,O
Stockholders,O
who,O
vote,O
through,O
the,O
Internet,I-MISCELLANEOUS
or,O
telephone,O
should,O
be,O
aware,O
that,O
they,O
may,O
incur,O
costs,O
to,O
access,O
the,O
Internet,I-MISCELLANEOUS
",",O
such,O
as,O
usage,O
charges,O
from,O
telephone,O
companies,O
or,O
Internet,I-MISCELLANEOUS
service,O
providers,O
",",O
and,O
that,O
these,O
costs,O
must,O
be,O
borne,O
by,O
the,O
stockholder,O
.,O
,O
A,O
stockholder,O
of,O
record,O
may,O
revoke,O
his,O
or,O
her,O
proxy,O
in,O
one,O
of,O
four,O
ways,O
at,O
any,O
time,O
before,O
the,O
proxy,O
is,O
voted,O
at,O
the,O
Meeting,O
.,O
,O
The,O
stockholder,O
may,O
send,O
a,O
notice,O
in,O
writing,O
",",O
with,O
a,O
date,O
later,O
than,O
the,O
date,O
of,O
the,O
proxy,O
",",O
to,O
our,O
Secretary,O
revoking,O
the,O
proxy,O
.,O
,O
The,O
stockholder,O
may,O
attend,O
the,O
Meeting,O
and,O
vote,O
in,O
person,O
.,O
,O
Attendance,O
at,O
the,O
Meeting,O
will,O
not,O
",",O
by,O
itself,O
",",O
revoke,O
a,O
proxy,O
.,O
,O
The,O
stockholder,O
may,O
execute,O
a,O
proxy,O
",",O
relating,O
to,O
the,O
same,O
shares,O
",",O
with,O
a,O
later,O
date,O
and,O
deliver,O
it,O
to,O
our,O
Secretary,O
before,O
the,O
voting,O
at,O
the,O
Meeting,O
.,O
,O
The,O
stockholder,O
may,O
submit,O
another,O
proxy,O
by,O
telephone,O
or,O
the,O
Internet,I-MISCELLANEOUS
(,O
your,O
latest,O
telephone,O
or,O
Internet,I-MISCELLANEOUS
voting,O
instructions,O
will,O
be,O
followed,O
),O
.,O
,O
Any,O
such,O
notices,O
and,O
new,O
proxies,O
that,O
are,O
sent,O
by,O
mail,O
should,O
be,O
sent,O
to,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Corporate,O
Secretary,O
",",O
Morris,I-LOCATION
Corporate,I-LOCATION
Center,I-LOCATION
III,I-LOCATION
",",O
400,O
Interpace,I-LOCATION
Parkway,I-LOCATION
",",O
Parsippany,I-LOCATION
",",O
NJ,I-LOCATION
07054,O
.,O
,O
Persons,O
who,O
hold,O
their,O
shares,O
through,O
a,O
bank,O
",",O
brokerage,O
firm,O
or,O
other,O
nominee,O
",",O
may,O
revoke,O
their,O
proxy,O
by,O
following,O
the,O
requirements,O
of,O
their,O
bank,O
or,O
broker,O
",",O
or,O
may,O
vote,O
in,O
person,O
at,O
the,O
Meeting,O
by,O
obtaining,O
a,O
legal,O
proxy,O
from,O
their,O
bank,O
or,O
broker,O
.,O
,O
We,O
have,O
retained,O
the,O
services,O
of,O
a,O
proxy,O
solicitation,O
firm,O
",",O
The,I-BUSINESS
Proxy,I-BUSINESS
Advisory,I-BUSINESS
Group,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
Proxy,I-BUSINESS
Advisory,I-BUSINESS
),O
",",O
to,O
solicit,O
proxies,O
for,O
the,O
Meeting,O
from,O
our,O
stockholders,O
.,O
,O
We,O
will,O
bear,O
the,O
entire,O
cost,O
of,O
solicitation,O
of,O
our,O
and,O
Proxy,I-BUSINESS
Advisory,I-BUSINESS
s,O
solicitations,O
",",O
including,O
the,O
payment,O
of,O
fees,O
of,O
approximately,O
$,O
"14,000",O
to,O
Proxy,I-BUSINESS
Advisory,I-BUSINESS
for,O
their,O
services,O
",",O
and,O
the,O
cost,O
of,O
preparation,O
",",O
assembly,O
",",O
printing,O
and,O
mailing,O
of,O
this,O
proxy,O
statement,O
",",O
the,O
proxy,O
and,O
any,O
additional,O
information,O
furnished,O
to,O
stockholders,O
.,O
,O
In,O
addition,O
to,O
the,O
use,O
of,O
the,O
mail,O
",",O
proxies,O
may,O
be,O
solicited,O
on,O
our,O
behalf,O
by,O
our,O
directors,O
",",O
officers,O
and,O
employees,O
",",O
who,O
will,O
receive,O
no,O
additional,O
consideration,O
for,O
such,O
services,O
.,O
,O
Upon,O
request,O
",",O
Brokers,O
",",O
custodians,O
",",O
nominees,O
and,O
other,O
stockholders,O
of,O
record,O
may,O
forward,O
copies,O
of,O
the,O
Notice,O
",",O
and,O
if,O
requested,O
",",O
the,O
proxy,O
statement,O
and,O
other,O
soliciting,O
materials,O
to,O
persons,O
for,O
whom,O
they,O
hold,O
shares,O
of,O
our,O
common,O
stock,O
and,O
to,O
request,O
authority,O
for,O
the,O
exercise,O
of,O
proxies,O
.,O
,O
We,O
will,O
reimburse,O
brokers,O
",",O
custodians,O
and,O
nominees,O
for,O
their,O
reasonable,O
expenses,O
.,O
,O
At,O
the,O
close,O
of,O
business,O
on,O
March,O
18,O
",",O
2011,O
",",O
"126,400,372",O
shares,O
of,O
our,O
common,O
stock,O
were,O
outstanding,O
and,O
entitled,O
to,O
vote,O
.,O
,O
Votes,O
cast,O
by,O
proxy,O
(,O
including,O
through,O
the,O
Internet,I-MISCELLANEOUS
or,O
by,O
telephone,O
),O
or,O
in,O
person,O
at,O
the,O
Meeting,O
will,O
be,O
tabulated,O
by,O
the,O
election,O
inspector,O
appointed,O
for,O
the,O
Meeting,O
who,O
will,O
determine,O
whether,O
or,O
not,O
a,O
quorum,O
is,O
present,O
.,O
,O
The,O
presence,O
",",O
in,O
person,O
or,O
by,O
proxy,O
",",O
of,O
the,O
holders,O
of,O
a,O
majority,O
of,O
our,O
common,O
stock,O
outstanding,O
and,O
entitled,O
to,O
vote,O
at,O
a,O
meeting,O
of,O
stockholders,O
is,O
necessary,O
in,O
order,O
to,O
constitute,O
a,O
quorum,O
for,O
the,O
conduct,O
of,O
business,O
at,O
the,O
Meeting,O
.,O
,O
Brokers,O
or,O
other,O
nominees,O
who,O
hold,O
shares,O
of,O
common,O
stock,O
in,O
street,O
name,O
for,O
a,O
beneficial,O
owner,O
of,O
those,O
shares,O
typically,O
have,O
the,O
authority,O
to,O
vote,O
in,O
their,O
discretion,O
on,O
routine,O
proposals,O
when,O
they,O
have,O
not,O
received,O
instructions,O
from,O
beneficial,O
owners,O
.,O
,O
However,O
",",O
brokers,O
are,O
not,O
allowed,O
to,O
exercise,O
their,O
voting,O
discretion,O
with,O
respect,O
to,O
the,O
approval,O
of,O
matters,O
that,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
(,O
the,O
NYSE,I-BUSINESS
),O
determines,O
to,O
be,O
non-routine,O
",",O
without,O
specific,O
instructions,O
from,O
the,O
beneficial,O
owner,O
.,O
,O
If,O
a,O
proxy,O
is,O
received,O
but,O
marked,O
abstention,O
or,O
if,O
a,O
broker,O
indicates,O
on,O
the,O
proxy,O
that,O
it,O
does,O
not,O
have,O
discretionary,O
authority,O
as,O
to,O
certain,O
shares,O
to,O
vote,O
on,O
a,O
particular,O
matter,O
and,O
has,O
not,O
been,O
instructed,O
on,O
how,O
to,O
vote,O
(,O
i.e.,O
broker,O
non-votes,O
),O
",",O
those,O
shares,O
will,O
be,O
considered,O
as,O
present,O
and,O
entitled,O
to,O
vote,O
for,O
purposes,O
of,O
determining,O
the,O
presence,O
of,O
a,O
quorum,O
.,O
,O
Under,O
NYSE,I-BUSINESS
rules,O
",",O
the,O
ratification,O
of,O
accountants,O
is,O
generally,O
considered,O
to,O
be,O
a,O
routine,O
proposal,O
",",O
and,O
therefore,O
",",O
your,O
broker,O
can,O
vote,O
on,O
Proposal,O
No.,O
6,O
without,O
instructions,O
from,O
you,O
.,O
,O
However,O
",",O
with,O
respect,O
to,O
the,O
other,O
proposals,O
",",O
all,O
of,O
which,O
deal,O
with,O
non-routine,O
matters,O
",",O
your,O
broker,O
will,O
not,O
be,O
able,O
to,O
vote,O
your,O
shares,O
without,O
specific,O
instructions,O
from,O
you,O
.,O
,O
A,O
properly,O
submitted,O
proxy,O
(,O
including,O
through,O
the,O
Internet,I-MISCELLANEOUS
or,O
by,O
telephone,O
),O
that,O
is,O
received,O
before,O
the,O
polls,O
are,O
closed,O
at,O
the,O
Meeting,O
and,O
that,O
is,O
not,O
revoked,O
will,O
be,O
voted,O
in,O
the,O
manner,O
directed,O
by,O
the,O
stockholder,O
submitting,O
the,O
proxy,O
.,O
,O
If,O
no,O
direction,O
is,O
made,O
",",O
such,O
proxy,O
will,O
be,O
voted,O
:,O
,O
As,O
of,O
the,O
date,O
of,O
this,O
proxy,O
statement,O
",",O
the,O
Board,O
of,O
Directors,O
knows,O
of,O
no,O
other,O
business,O
that,O
will,O
be,O
presented,O
for,O
consideration,O
at,O
the,O
Meeting,O
.,O
,O
the,O
proxy,O
holders,O
named,O
in,O
the,O
enclosed,O
form,O
of,O
proxy,O
to,O
take,O
such,O
actions,O
as,O
shall,O
be,O
in,O
accordance,O
with,O
their,O
best,O
judgment,O
.,O
,O
The,O
enclosed,O
proxy,O
gives,O
each,O
of,O
Paul,I-PERSON
M.,I-PERSON
Bisaro,I-PERSON
and,O
David,I-PERSON
A.,I-PERSON
Buchen,I-PERSON
discretionary,O
authority,O
to,O
vote,O
your,O
shares,O
in,O
accordance,O
with,O
his,O
best,O
judgment,O
with,O
respect,O
to,O
all,O
additional,O
matters,O
that,O
might,O
come,O
before,O
the,O
Meeting,O
.,O
,O
In,O
an,O
effort,O
to,O
reduce,O
printing,O
costs,O
and,O
postage,O
fees,O
",",O
we,O
have,O
adopted,O
a,O
practice,O
approved,O
by,O
the,O
SEC,I-GOVERNMENT
called,O
householding,O
.,O
,O
Under,O
this,O
practice,O
",",O
stockholders,O
who,O
have,O
the,O
same,O
address,O
and,O
last,O
name,O
will,O
receive,O
only,O
one,O
copy,O
of,O
the,O
Notice,O
and,O
",",O
upon,O
request,O
",",O
our,O
proxy,O
materials,O
",",O
unless,O
one,O
or,O
more,O
of,O
these,O
stockholders,O
notifies,O
us,O
that,O
he,O
or,O
she,O
wishes,O
to,O
receive,O
individual,O
copies,O
.,O
,O
If,O
you,O
share,O
an,O
address,O
with,O
another,O
stockholder,O
and,O
prefer,O
to,O
receive,O
separate,O
copies,O
of,O
the,O
Notice,O
or,O
our,O
proxy,O
materials,O
",",O
please,O
mail,O
your,O
request,O
to,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Investor,O
Relations,O
",",O
Morris,I-LOCATION
Corporate,I-LOCATION
Center,I-LOCATION
III,I-LOCATION
",",O
400,O
Interpace,I-LOCATION
Parkway,I-LOCATION
",",O
Parsippany,I-LOCATION
",",O
NJ,I-LOCATION
07054,O
.,O
,O
Information,O
on,O
our,O
website,O
",",O
other,O
than,O
our,O
proxy,O
statement,O
and,O
form,O
of,O
proxy,O
",",O
is,O
not,O
part,O
of,O
the,O
proxy,O
soliciting,O
material,O
and,O
is,O
not,O
incorporated,O
into,O
this,O
proxy,O
statement,O
by,O
reference,O
.,O
,O
If,O
you,O
need,O
assistance,O
in,O
submitting,O
your,O
proxy,O
or,O
have,O
questions,O
regarding,O
the,O
Meeting,O
",",O
please,O
contact,O
our,O
investor,O
relations,O
department,O
at,O
1-973-355-8488,O
or,O
info,O
@,O
watson.com,O
or,O
write,O
to,O
:,O
Investor,O
Relations,O
",",O
at,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Morris,I-LOCATION
Corporate,I-LOCATION
Center,I-LOCATION
III,I-LOCATION
",",O
400,O
Interpace,I-LOCATION
Parkway,I-LOCATION
",",O
Parsippany,I-LOCATION
",",O
NJ,I-LOCATION
07054,O
.,O
,O
Under,O
our,O
bylaws,O
",",O
the,O
Board,O
of,O
Directors,O
must,O
consist,O
of,O
between,O
seven,O
and,O
fifteen,O
directors,O
",",O
with,O
the,O
exact,O
number,O
determined,O
by,O
the,O
Board,O
of,O
Directors,O
.,O
,O
The,O
Board,O
of,O
Directors,O
has,O
set,O
the,O
current,O
number,O
of,O
authorized,O
directors,O
at,O
eleven,O
.,O
,O
There,O
are,O
no,O
vacant,O
positions,O
on,O
the,O
Board,O
of,O
Directors,O
.,O
,O
Our,O
articles,O
of,O
incorporation,O
provide,O
that,O
the,O
Board,O
of,O
Directors,O
will,O
be,O
divided,O
into,O
three,O
classes,O
.,O
,O
One,O
class,O
is,O
elected,O
each,O
year,O
for,O
a,O
three-year,O
term,O
",",O
expiring,O
at,O
our,O
annual,O
meeting,O
of,O
stockholders,O
.,O
,O
If,O
the,O
amendment,O
and,O
restatement,O
of,O
our,O
articles,O
of,O
incorporation,O
is,O
approved,O
",",O
directors,O
elected,O
after,O
this,O
year,O
s,O
Meeting,O
will,O
be,O
elected,O
annually,O
for,O
one-year,O
terms,O
expiring,O
at,O
the,O
next,O
succeeding,O
annual,O
meeting,O
.,O
,O
Accordingly,O
",",O
when,O
the,O
terms,O
of,O
our,O
Class,O
II,O
",",O
Class,O
III,O
and,O
Class,O
I,O
directors,O
expire,O
in,O
2012,O
",",O
2013,O
and,O
2014,O
",",O
respectively,O
",",O
they,O
will,O
stand,O
for,O
election,O
annually,O
",",O
rather,O
than,O
every,O
three,O
years,O
.,O
,O
At,O
the,O
Meeting,O
",",O
four,O
directors,O
",",O
who,O
will,O
comprise,O
the,O
Class,O
I,O
directors,O
",",O
are,O
to,O
be,O
elected,O
to,O
serve,O
until,O
the,O
2014,O
Annual,O
Meeting,O
or,O
until,O
their,O
successors,O
are,O
duly,O
elected,O
and,O
qualified,O
.,O
,O
Based,O
upon,O
the,O
recommendation,O
of,O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
",",O
the,O
Board,O
of,O
Directors,O
has,O
nominated,O
Michael,I-PERSON
J.,I-PERSON
Fedida,I-PERSON
",",O
Albert,I-PERSON
F.,I-PERSON
Hummel,I-PERSON
",",O
Catherine,I-PERSON
M.,I-PERSON
Klema,I-PERSON
and,O
Anthony,I-PERSON
Selwyn,I-PERSON
Tabatznik,I-PERSON
for,O
reelection,O
as,O
Class,O
I,O
directors,O
.,O
,O
Our,O
Class,O
II,O
directors,O
",",O
Jack,I-PERSON
Michelson,I-PERSON
",",O
Ronald,I-PERSON
R.,I-PERSON
Taylor,I-PERSON
and,O
Andrew,I-PERSON
L.,I-PERSON
Turner,I-PERSON
",",O
are,O
scheduled,O
to,O
serve,O
as,O
directors,O
until,O
the,O
2012,O
Annual,O
Meeting,O
.,O
,O
Our,O
Class,O
III,O
directors,O
",",O
Paul,I-PERSON
M.,I-PERSON
Bisaro,I-PERSON
",",O
Christopher,I-PERSON
W.,I-PERSON
Bodine,I-PERSON
",",O
Michel,I-PERSON
J.,I-PERSON
Feldman,I-PERSON
and,O
Fred,I-PERSON
G.,I-PERSON
Weiss,I-PERSON
are,O
scheduled,O
to,O
serve,O
as,O
directors,O
until,O
the,O
2013,O
Annual,O
Meeting,O
.,O
,O
Information,O
about,O
the,O
nominees,O
for,O
director,O
and,O
our,O
directors,O
whose,O
term,O
of,O
office,O
will,O
continue,O
after,O
the,O
Meeting,O
is,O
set,O
forth,O
in,O
the,O
following,O
paragraphs,O
and,O
is,O
based,O
on,O
information,O
provided,O
to,O
us,O
as,O
of,O
March,O
2,O
",",O
2011,O
.,O
,O
Class,O
I,O
Director,O
Nominees,O
for,O
Election,O
at,O
the,O
Meeting,O
:,O
,O
Michael,I-PERSON
J.,I-PERSON
Fedida,I-PERSON
",",O
age,O
64,O
",",O
a,O
registered,O
pharmacist,O
",",O
has,O
served,O
for,O
the,O
past,O
27,O
years,O
as,O
an,O
officer,O
and,O
director,O
of,O
several,O
retail,O
pharmacies,O
wholly,O
or,O
partially,O
owned,O
by,O
him,O
",",O
including,O
J,I-BUSINESS
&,I-BUSINESS
J,I-BUSINESS
State,I-BUSINESS
Street,I-BUSINESS
Pharmacy,I-BUSINESS
from,O
2009,O
to,O
present,O
",",O
J,I-BUSINESS
&,I-BUSINESS
J,I-BUSINESS
Saint,I-BUSINESS
Michael,I-BUSINESS
s,I-BUSINESS
Pharmacy,I-BUSINESS
from,O
2005,O
to,O
present,O
;,O
J,I-BUSINESS
&,I-BUSINESS
J,I-BUSINESS
Pharmacy,I-BUSINESS
and,O
Classic,I-BUSINESS
Pharmacy,I-BUSINESS
from,O
1987,O
to,O
present,O
;,O
Perfect,I-BUSINESS
Pharmacy,I-BUSINESS
from,O
1980,O
to,O
2000,O
;,O
and,O
Phoster,I-BUSINESS
Pharmacy,I-BUSINESS
from,O
1985,O
to,O
2000,O
.,O
,O
Fedida,I-PERSON
has,O
been,O
a,O
director,O
of,O
Arbor,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
pediatric,O
pharmaceutical,O
company,O
",",O
since,O
March,O
2010,O
.,O
,O
Fedida,I-PERSON
served,O
on,O
the,O
Board,O
of,O
Directors,O
of,O
Circa,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
Circa,I-BUSINESS
),O
",",O
from,O
1988,O
to,O
1995,O
",",O
at,O
which,O
time,O
Circa,I-BUSINESS
was,O
acquired,O
by,O
us,O
.,O
,O
Fedida,I-PERSON
was,O
a,O
Director,O
of,O
Bradley,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
specialty,O
pharmaceutical,O
company,O
",",O
from,O
April,O
2004,O
to,O
February,O
21,O
",",O
2008,O
.,O
,O
The,O
Board,O
concluded,O
that,O
Mr.,O
Fedida,I-PERSON
should,O
serve,O
as,O
a,O
director,O
because,O
of,O
his,O
decades,O
of,O
experience,O
as,O
a,O
practicing,O
pharmacist,O
and,O
manager,O
of,O
a,O
number,O
of,O
pharmacy,O
businesses,O
",",O
which,O
help,O
him,O
to,O
bring,O
the,O
perspective,O
of,O
pharmacists,O
and,O
customers,O
to,O
the,O
deliberations,O
of,O
the,O
Board,O
.,O
,O
Albert,I-PERSON
F.,I-PERSON
Hummel,I-PERSON
",",O
age,O
66,O
",",O
has,O
been,O
our,O
director,O
since,O
March,O
1986,O
",",O
except,O
for,O
a,O
period,O
from,O
July,O
1991,O
to,O
October,O
1991,O
.,O
,O
Hummel,I-PERSON
has,O
been,O
President,O
of,O
Pentech,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
development,O
stage,O
pharmaceutical,O
company,O
",",O
since,O
July,O
1998,O
and,O
CEO,O
and,O
Director,O
of,O
Cobrek,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
private,O
venture-,O
backed,O
pharmaceutical,O
research,O
and,O
development,O
firm,O
and,O
an,O
affiliate,O
of,O
Pentech,I-BUSINESS
",",O
since,O
May,O
2008,O
.,O
,O
Since,O
November,O
2005,O
",",O
Mr.,O
Hummel,I-PERSON
has,O
been,O
a,O
director,O
for,O
Obagi,I-BUSINESS
Medical,I-BUSINESS
Products,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
specialty,O
pharmaceutical,O
company,O
focused,O
on,O
the,O
aesthetic,O
and,O
therapeutic,O
skin,O
health,O
markets,O
.,O
,O
Hummel,I-PERSON
was,O
appointed,O
interim,O
President,O
and,O
Chief,O
Executive,O
Officer,O
of,O
Obagi,I-BUSINESS
on,O
October,O
8,O
",",O
2010,O
.,O
,O
Hummel,I-PERSON
served,O
as,O
a,O
partner,O
in,O
Affordable,I-BUSINESS
Residential,I-BUSINESS
Communities,I-BUSINESS
",",O
a,O
property,O
management,O
firm,O
",",O
from,O
January,O
1994,O
through,O
March,O
2006,O
.,O
,O
The,O
Board,O
concluded,O
that,O
Mr.,O
Hummel,I-PERSON
should,O
serve,O
on,O
the,O
Board,O
because,O
he,O
brings,O
extensive,O
capital,O
markets,O
and,O
strategic,O
planning,O
experience,O
to,O
our,O
Board,O
.,O
,O
Catherine,I-PERSON
M.,I-PERSON
Klema,I-PERSON
",",O
age,O
52,O
",",O
is,O
currently,O
President,O
of,O
Nettleton,I-BUSINESS
Advisors,I-BUSINESS
LLC,I-BUSINESS
",",O
a,O
consulting,O
firm,O
established,O
by,O
Ms.,O
Klema,I-PERSON
in,O
2001,O
.,O
,O
Klema,I-PERSON
served,O
as,O
Managing,O
Director,O
",",O
Healthcare,O
Investment,O
Banking,O
",",O
at,O
SG,I-BUSINESS
Cowen,I-BUSINESS
Securities,I-BUSINESS
from,O
1997,O
to,O
2001,O
.,O
,O
While,O
at,O
SG,I-BUSINESS
Cowen,I-BUSINESS
",",O
Ms.,O
Klema,I-PERSON
had,O
advised,O
us,O
on,O
investment,O
banking,O
matters,O
.,O
,O
Klema,I-PERSON
also,O
served,O
as,O
Managing,O
Director,O
",",O
Healthcare,O
Investment,O
Banking,O
",",O
at,O
Furman,I-BUSINESS
Selz,I-BUSINESS
LLC,I-BUSINESS
from,O
1994,O
until,O
1997,O
",",O
and,O
was,O
employed,O
by,O
Lehman,I-BUSINESS
Brothers,I-BUSINESS
from,O
1987,O
until,O
1994,O
.,O
,O
Klema,I-PERSON
has,O
been,O
a,O
director,O
of,O
Pharmaceutical,I-BUSINESS
Product,I-BUSINESS
Development,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
global,O
contract,O
research,O
organization,O
",",O
since,O
2000,O
.,O
,O
The,O
Board,O
concluded,O
that,O
Ms.,O
Klema,I-PERSON
s,O
qualifications,O
for,O
service,O
on,O
our,O
Board,O
include,O
her,O
background,O
in,O
healthcare,O
investment,O
banking,O
and,O
her,O
knowledge,O
of,O
the,O
business,O
of,O
pharmaceutical,O
research,O
and,O
development,O
.,O
,O
Anthony,I-PERSON
Selwyn,I-PERSON
Tabatznik,I-PERSON
",",O
age,O
63,O
",",O
was,O
a,O
founder,O
of,O
the,O
Arrow,I-BUSINESS
Group,I-BUSINESS
",",O
an,O
international,O
group,O
of,O
generic,O
pharmaceutical,O
companies,O
",",O
and,O
served,O
as,O
a,O
director,O
of,O
the,O
parent,O
company,O
of,O
the,O
Arrow,I-BUSINESS
Group,I-BUSINESS
from,O
2003,O
through,O
our,O
acquisition,O
of,O
the,O
Arrow,I-BUSINESS
Group,I-BUSINESS
in,O
2009,O
.,O
,O
Tabatznik,I-PERSON
was,O
also,O
a,O
founder,O
of,O
another,O
international,O
group,O
of,O
generic,O
pharmaceutical,O
companies,O
",",O
originally,O
known,O
as,O
the,O
Generic,I-BUSINESS
Group,I-BUSINESS
BV,I-BUSINESS
",",O
which,O
started,O
operations,O
in,O
the,O
early,O
1980s,O
and,O
which,O
",",O
following,O
its,O
purchase,O
by,O
Merck,I-BUSINESS
KGaA,I-BUSINESS
in,O
1994,O
",",O
became,O
known,O
as,O
the,O
Merck,I-BUSINESS
Generics,I-BUSINESS
Group,I-BUSINESS
BV,I-BUSINESS
.,O
,O
Tabatznik,I-PERSON
served,O
as,O
a,O
director,O
of,O
Merck,I-BUSINESS
Generics,I-BUSINESS
Group,I-BUSINESS
BV,I-BUSINESS
until,O
1999,O
.,O
,O
The,O
Board,O
concluded,O
that,O
Mr.,O
Tabatznik,I-PERSON
should,O
serve,O
on,O
the,O
Board,O
because,O
of,O
his,O
lengthy,O
experience,O
as,O
the,O
founder,O
of,O
numerous,O
successful,O
generic,O
pharmaceutical,O
businesses,O
",",O
including,O
the,O
Arrow,I-BUSINESS
Group,I-BUSINESS
",",O
as,O
well,O
as,O
his,O
global,O
perspective,O
on,O
our,O
industry,O
.,O
,O
The,O
Board,O
of,O
Directors,O
knows,O
of,O
no,O
reason,O
why,O
any,O
of,O
the,O
foregoing,O
nominees,O
will,O
be,O
unavailable,O
to,O
serve,O
",",O
but,O
in,O
the,O
event,O
of,O
any,O
such,O
unavailability,O
",",O
the,O
proxies,O
received,O
will,O
be,O
voted,O
for,O
such,O
substitute,O
nominees,O
as,O
the,O
Board,O
of,O
Directors,O
may,O
recommend,O
.,O
,O
Persons,O
nominated,O
to,O
serve,O
on,O
our,O
Board,O
of,O
Directors,O
in,O
an,O
uncontested,O
election,O
must,O
receive,O
a,O
greater,O
number,O
of,O
votes,O
cast,O
FOR,O
than,O
votes,O
cast,O
AGAINST,O
in,O
order,O
to,O
be,O
elected,O
",",O
or,O
re-elected,O
",",O
to,O
the,O
Board,O
of,O
Directors,O
.,O
,O
Accordingly,O
",",O
abstentions,O
will,O
not,O
affect,O
the,O
outcome,O
of,O
the,O
election,O
of,O
directors,O
.,O
,O
Proxies,O
can,O
not,O
be,O
voted,O
for,O
a,O
greater,O
number,O
of,O
persons,O
or,O
different,O
persons,O
than,O
the,O
nominees,O
named,O
.,O
,O
Please,O
note,O
that,O
if,O
your,O
broker,O
holds,O
your,O
common,O
stock,O
in,O
street,O
name,O
",",O
your,O
broker,O
will,O
not,O
vote,O
your,O
shares,O
on,O
the,O
election,O
of,O
directors,O
",",O
and,O
broker,O
non-votes,O
will,O
result,O
",",O
unless,O
you,O
provide,O
your,O
voting,O
instructions,O
over,O
the,O
internet,I-MISCELLANEOUS
",",O
by,O
telephone,O
or,O
mail,O
as,O
directed,O
in,O
the,O
Notice,O
sent,O
to,O
you,O
by,O
your,O
broker,O
.,O
,O
Broker,O
non-votes,O
will,O
not,O
affect,O
the,O
outcome,O
of,O
the,O
election,O
of,O
directors,O
.,O
,O
The,O
Board,O
of,O
Directors,O
unanimously,O
recommends,O
a,O
vote,O
FOR,O
the,O
election,O
of,O
Michael,I-PERSON
J.,I-PERSON
Fedida,I-PERSON
",",O
Albert,I-PERSON
F.,I-PERSON
Hummel,I-PERSON
",",O
Catherine,I-PERSON
M.,I-PERSON
Klema,I-PERSON
and,O
Anthony,I-PERSON
Selwyn,I-PERSON
Tabatznik,I-PERSON
.,O
,O
Class,O
II,O
Directors,O
whose,O
Terms,O
Expire,O
at,O
the,O
2012,O
Annual,O
Meeting,O
:,O
,O
Jack,I-PERSON
Michelson,I-PERSON
",",O
age,O
76,O
",",O
was,O
our,O
consultant,O
from,O
February,O
2001,O
to,O
June,O
2003,O
.,O
,O
Michelson,I-PERSON
served,O
for,O
24,O
years,O
as,O
an,O
officer,O
of,O
G.D.,I-BUSINESS
Searle,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",O
a,O
pharmaceutical,O
company,O
",",O
as,O
the,O
Corporate,O
Vice,O
President,O
and,O
President,O
",",O
Technical,O
Operations,O
from,O
1993,O
to,O
2001,O
;,O
Senior,O
Vice,O
President,O
of,O
Technical,O
Operations,O
from,O
1981,O
to,O
1993,O
;,O
and,O
Vice,O
President,O
of,O
Production,O
and,O
Engineering,O
from,O
1977,O
to,O
1981,O
.,O
,O
The,O
Board,O
concluded,O
that,O
Mr.,O
Michelson,I-PERSON
should,O
serve,O
as,O
a,O
member,O
of,O
our,O
Board,O
because,O
of,O
his,O
deep,O
knowledge,O
of,O
the,O
operational,O
",",O
technical,O
and,O
regulatory,O
aspects,O
of,O
our,O
business,O
.,O
,O
Ronald,I-PERSON
R.,I-PERSON
Taylor,I-PERSON
",",O
age,O
63,O
",",O
has,O
been,O
President,O
of,O
Tamarack,I-BUSINESS
Bay,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
a,O
private,O
consulting,O
firm,O
",",O
since,O
2001,O
.,O
,O
Taylor,I-PERSON
has,O
been,O
a,O
director,O
of,O
Red,I-BUSINESS
Lion,I-BUSINESS
Hotels,I-BUSINESS
Corporation,I-BUSINESS
",",O
a,O
hotel,O
operating,O
company,O
",",O
since,O
1998,O
and,O
a,O
director,O
of,O
ResMed,I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
medical,O
device,O
manufacturer,O
",",O
since,O
2005,O
.,O
,O
Venture,I-BUSINESS
Capital,I-BUSINESS
(,I-BUSINESS
Enterprise,I-BUSINESS
),I-BUSINESS
",",O
a,O
venture,O
capital,O
firm,O
",",O
from,O
April,O
2001,O
until,O
September,O
2002,O
",",O
and,O
was,O
formerly,O
a,O
general,O
partner,O
of,O
Enterprise,O
from,O
April,O
1998,O
to,O
March,O
2001,O
.,O
,O
Taylor,I-PERSON
was,O
also,O
a,O
consultant,O
to,O
Cardinal,I-BUSINESS
Health,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
provider,O
of,O
healthcare,O
products,O
and,O
services,O
",",O
from,O
May,O
1996,O
to,O
May,O
2002,O
.,O
,O
The,O
Board,O
concluded,O
that,O
Mr.,O
Taylor,I-PERSON
s,O
qualifications,O
to,O
serve,O
on,O
our,O
Board,O
of,O
Directors,O
include,O
his,O
experience,O
as,O
a,O
founder,O
of,O
a,O
successful,O
business,O
and,O
his,O
expertise,O
in,O
evaluating,O
and,O
investing,O
in,O
healthcare,O
companies,O
.,O
,O
Andrew,I-PERSON
L.,I-PERSON
Turner,I-PERSON
",",O
age,O
64,O
",",O
was,O
appointed,O
as,O
the,O
Chairman,O
of,O
our,O
Board,O
in,O
May,O
2008,O
.,O
,O
He,O
also,O
serves,O
as,O
Manager,O
and,O
Chief,O
Executive,O
Officer,O
of,O
Trinity,I-BUSINESS
Health,I-BUSINESS
Systems,I-BUSINESS
",",O
an,O
owner,O
of,O
senior,O
housing,O
properties,O
founded,O
by,O
Mr.,O
Turner,I-PERSON
in,O
2009,O
.,O
,O
Turner,I-PERSON
has,O
also,O
been,O
a,O
director,O
of,O
The,I-BUSINESS
Sports,I-BUSINESS
Club,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
an,O
upscale,O
workout,O
company,O
",",O
since,O
September,O
1994,O
.,O
,O
Turner,I-PERSON
has,O
been,O
a,O
director,O
of,O
Streamline,I-BUSINESS
Health,I-BUSINESS
Solutions,I-BUSINESS
",",O
a,O
provider,O
of,O
software,O
for,O
document,O
solutions,O
in,O
hospitals,O
",",O
since,O
2007,O
.,O
,O
The,O
Board,O
concluded,O
that,O
Mr.,O
Turner,I-PERSON
s,O
primary,O
qualifications,O
for,O
service,O
on,O
our,O
Board,O
include,O
his,O
extensive,O
experience,O
as,O
a,O
healthcare,O
entrepreneur,O
and,O
his,O
deep,O
knowledge,O
of,O
our,O
Company,O
and,O
business,O
.,O
,O
Class,O
III,O
Directors,O
whose,O
Terms,O
Expire,O
at,O
the,O
2013,O
Annual,O
Meeting,O
:,O
,O
Paul,I-PERSON
M.,I-PERSON
Bisaro,I-PERSON
",",O
age,O
50,O
",",O
has,O
served,O
as,O
our,O
President,O
and,O
Chief,O
Executive,O
Officer,O
and,O
on,O
our,O
Board,O
of,O
Directors,O
since,O
2007,O
.,O
,O
Prior,O
to,O
joining,O
us,O
",",O
Mr.,O
Bisaro,I-PERSON
was,O
President,O
",",O
Chief,O
Operating,O
Officer,O
and,O
a,O
member,O
of,O
the,O
Board,O
of,O
Directors,O
of,O
Barr,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
global,O
specialty,O
pharmaceutical,O
company,O
(,O
Barr,I-BUSINESS
),O
",",O
from,O
1999,O
to,O
2007,O
.,O
,O
Between,O
1992,O
and,O
1999,O
",",O
Mr.,O
Bisaro,I-PERSON
served,O
as,O
General,O
Counsel,O
of,O
Barr,I-BUSINESS
and,O
from,O
1997,O
to,O
1999,O
served,O
in,O
various,O
additional,O
capacities,O
including,O
Senior,O
Vice,O
President,O
—,O
Strategic,O
Business,O
Development,O
of,O
Barr,I-BUSINESS
.,O
,O
Prior,O
to,O
joining,O
Barr,I-BUSINESS
",",O
he,O
was,O
associated,O
with,O
the,O
law,O
firm,O
Winston,I-BUSINESS
&,I-BUSINESS
Strawn,I-BUSINESS
and,O
a,O
predecessor,O
firm,O
",",O
Bishop,I-BUSINESS
",",I-BUSINESS
Cook,I-BUSINESS
",",I-BUSINESS
Purcell,I-BUSINESS
and,I-BUSINESS
Reynolds,I-BUSINESS
from,O
1989,O
to,O
1992,O
.,O
,O
Bisaro,I-PERSON
received,O
his,O
undergraduate,O
degree,O
in,O
General,O
Studies,O
from,O
the,O
University,I-BUSINESS
of,I-BUSINESS
Michigan,I-BUSINESS
in,O
1983,O
and,O
a,O
Juris,O
Doctor,O
from,O
Catholic,I-BUSINESS
University,I-BUSINESS
of,I-BUSINESS
America,I-BUSINESS
in,O
Washington,I-LOCATION
",",I-LOCATION
D.C,I-LOCATION
.,I-LOCATION
,O
The,O
Board,O
concluded,O
that,O
Mr.,O
Bisaro,I-PERSON
should,O
serve,O
on,O
the,O
Board,O
because,O
of,O
his,O
experience,O
as,O
a,O
senior,O
executive,O
in,O
our,O
industry,O
",",O
his,O
knowledge,O
of,O
our,O
Company,O
and,O
its,O
day-to-day,O
operations,O
and,O
his,O
strong,O
strategic,O
vision,O
for,O
the,O
Company,O
.,O
,O
Bodine,I-PERSON
",",O
age,O
55,O
",",O
retired,O
from,O
CVS,I-BUSINESS
Caremark,I-BUSINESS
in,O
January,O
2009,O
after,O
24,O
years,O
with,O
CVS,I-BUSINESS
.,O
,O
Prior,O
to,O
his,O
retirement,O
",",O
Mr.,O
Bodine,I-PERSON
served,O
as,O
President,O
",",O
Healthcare,O
Services,O
of,O
CVS,I-BUSINESS
Caremark,I-BUSINESS
Corporation,I-BUSINESS
",",O
where,O
he,O
was,O
responsible,O
for,O
strategy,O
",",O
business,O
development,O
",",O
trade,O
relations,O
",",O
sales,O
and,O
account,O
management,O
",",O
pharmacy,O
merchandising,O
",",O
marketing,O
",",O
information,O
technology,O
and,O
Minute,I-MISCELLANEOUS
Clinic,I-MISCELLANEOUS
.,O
,O
Prior,O
to,O
the,O
merger,O
of,O
CVS,I-BUSINESS
Corporation,I-BUSINESS
and,O
Caremark,I-BUSINESS
Rx,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
in,O
March,O
2007,O
",",O
Mr.,O
Bodine,I-PERSON
served,O
for,O
several,O
years,O
as,O
Executive,O
Vice,O
President,O
—,O
Merchandising,O
and,O
Marketing,O
of,O
CVS,I-BUSINESS
Corporation,I-BUSINESS
.,O
,O
Bodine,I-PERSON
has,O
also,O
been,O
active,O
in,O
the,O
pharmaceutical,O
industry,O
serving,O
on,O
a,O
number,O
of,O
boards,O
and,O
committees,O
",",O
including,O
the,O
Healthcare,I-BUSINESS
Leadership,I-BUSINESS
Council,I-BUSINESS
",",O
RI,I-BUSINESS
Quality,I-BUSINESS
Institute,I-BUSINESS
",",O
National,I-BUSINESS
Retail,I-BUSINESS
Federation,I-BUSINESS
",",O
National,I-BUSINESS
Association,I-BUSINESS
of,I-BUSINESS
Chain,I-BUSINESS
Drug,I-BUSINESS
Stores,I-BUSINESS
(,O
NACDS,I-BUSINESS
),O
",",O
and,O
the,O
NACDS,I-BUSINESS
Pharmacy,I-BUSINESS
Affairs,I-BUSINESS
and,I-BUSINESS
Leadership,I-BUSINESS
Committees,I-BUSINESS
.,O
,O
The,O
Board,O
concluded,O
that,O
Mr.,O
Bodine,I-PERSON
should,O
serve,O
on,O
the,O
Board,O
because,O
of,O
his,O
extensive,O
industry,O
experience,O
and,O
knowledge,O
of,O
the,O
needs,O
and,O
operations,O
of,O
our,O
major,O
customers,O
.,O
,O
Michel,I-PERSON
J.,I-PERSON
Feldman,I-PERSON
",",O
age,O
68,O
",",O
is,O
a,O
member,O
of,O
the,O
law,O
firm,O
of,O
Seyfarth,I-BUSINESS
Shaw,I-BUSINESS
LLP,I-BUSINESS
",",O
where,O
he,O
has,O
practiced,O
since,O
October,O
2003,O
.,O
,O
Feldman,I-PERSON
was,O
a,O
member,O
of,O
the,O
law,O
firm,O
of,O
D,I-BUSINESS
Ancona,I-BUSINESS
&,I-BUSINESS
Pflaum,I-BUSINESS
LLC,I-BUSINESS
",",O
where,O
he,O
practiced,O
from,O
June,O
1991,O
to,O
October,O
2003,O
.,O
,O
Effective,O
October,O
2003,O
",",O
D,I-BUSINESS
Ancona,I-BUSINESS
&,I-BUSINESS
Pflaum,I-BUSINESS
LLC,I-BUSINESS
merged,O
with,O
Seyfarth,I-BUSINESS
Shaw,I-BUSINESS
LLP,I-BUSINESS
.,O
,O
Feldman,I-PERSON
is,O
also,O
a,O
certified,O
public,O
accountant,O
(,O
inactive,O
),O
.,O
,O
The,O
Board,O
concluded,O
that,O
Mr.,O
Feldman,I-PERSON
s,O
qualifications,O
as,O
a,O
member,O
of,O
our,O
Board,O
of,O
Directors,O
include,O
his,O
legal,O
expertise,O
",",O
business,O
experience,O
and,O
more,O
than,O
25,O
years,O
of,O
service,O
as,O
a,O
Director,O
of,O
our,O
Company,O
.,O
,O
Fred,I-PERSON
G.,I-PERSON
Weiss,I-PERSON
",",O
age,O
69,O
",",O
has,O
been,O
the,O
managing,O
director,O
of,O
FGW,I-BUSINESS
Associates,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
consulting,O
firm,O
",",O
since,O
1997,O
.,O
,O
Weiss,I-PERSON
served,O
as,O
Vice,O
President,O
",",O
Planning,O
",",O
Investment,O
and,O
Development,O
of,O
Warner-Lambert,I-BUSINESS
from,O
1983,O
to,O
1996,O
and,O
prior,O
to,O
that,O
served,O
as,O
Vice,O
President,O
and,O
Treasurer,O
of,O
Warner-Lambert,I-BUSINESS
from,O
1979,O
to,O
1983,O
",",O
where,O
he,O
was,O
involved,O
in,O
both,O
strategic,O
planning,O
and,O
corporate,O
development,O
.,O
,O
Weiss,I-PERSON
is,O
also,O
an,O
Independent,O
Vice-Chairman,O
of,O
the,O
Board,O
and,O
Chairman,O
of,O
the,O
Audit,O
Committee,O
of,O
numerous,O
BlackRock-sponsored,I-MISCELLANEOUS
mutual,O
funds,O
.,O
,O
In,O
this,O
capacity,O
",",O
and,O
pursuant,O
to,O
BlackRock,I-BUSINESS
s,O
policies,O
",",O
Mr.,O
Weiss,I-PERSON
has,O
oversight,O
responsibility,O
for,O
finance,O
and,O
accounting,O
matters,O
",",O
and,O
has,O
no,O
responsibility,O
for,O
",",O
or,O
discretion,O
concerning,O
",",O
any,O
of,O
BlackRock,I-BUSINESS
s,O
equity,O
investment,O
decisions,O
.,O
,O
Weiss,I-PERSON
has,O
been,O
a,O
Director,O
of,O
the,O
Michael,I-BUSINESS
J.,I-BUSINESS
Fox,I-BUSINESS
Foundation,I-BUSINESS
for,I-BUSINESS
Parkinson,I-BUSINESS
s,I-BUSINESS
Research,I-BUSINESS
since,O
2000,O
.,O
,O
The,O
Board,O
concluded,O
that,O
Mr.,O
Weiss,I-PERSON
is,O
qualified,O
to,O
serve,O
as,O
a,O
member,O
of,O
our,O
Board,O
of,O
Directors,O
because,O
of,O
",",O
among,O
other,O
factors,O
",",O
his,O
financial,O
expertise,O
and,O
experience,O
in,O
strategic,O
planning,O
and,O
corporate,O
development,O
.,O
,O
Our,O
Board,O
of,O
Directors,O
has,O
adopted,O
Corporate,O
Governance,O
Guidelines,O
.,O
,O
These,O
guidelines,O
address,O
the,O
make-up,O
and,O
functioning,O
of,O
the,O
Board,O
of,O
Directors,O
and,O
its,O
committees,O
",",O
which,O
include,O
determining,O
director,O
independence,O
",",O
criteria,O
for,O
Board,O
membership,O
",",O
and,O
authority,O
to,O
retain,O
independent,O
advisors,O
.,O
,O
Our,O
Board,O
of,O
Directors,O
has,O
also,O
adopted,O
a,O
Code,O
of,O
Conduct,O
",",O
which,O
applies,O
to,O
all,O
of,O
our,O
Board,O
members,O
and,O
all,O
of,O
our,O
officers,O
and,O
employees,O
.,O
,O
The,O
code,O
sets,O
forth,O
and,O
summarizes,O
certain,O
of,O
our,O
policies,O
related,O
to,O
legal,O
compliance,O
and,O
honest,O
and,O
ethical,O
business,O
practices,O
.,O
,O
The,O
code,O
is,O
intended,O
to,O
comply,O
with,O
the,O
standards,O
set,O
forth,O
in,O
Section,O
303A.10,O
of,O
the,O
NYSE,I-BUSINESS
s,O
Listed,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Manual,I-LEGISLATION/ACT
and,O
SEC,I-GOVERNMENT
rules,O
and,O
regulations,O
.,O
,O
Any,O
amendments,O
to,O
",",O
or,O
waivers,O
from,O
",",O
provisions,O
of,O
the,O
Code,O
of,O
Conduct,O
that,O
apply,O
to,O
our,O
directors,O
or,O
executive,O
officers,O
",",O
including,O
our,O
Chief,O
Executive,O
Officer,O
and,O
Chief,O
Financial,O
Officer,O
and,O
persons,O
performing,O
similar,O
functions,O
",",O
will,O
be,O
promptly,O
posted,O
on,O
our,O
website,O
at,O
http,O
:,O
//www.watson.com,O
.,O
,O
You,O
can,O
find,O
links,O
to,O
our,O
Corporate,O
Governance,O
Guidelines,O
and,O
our,O
Code,O
of,O
Conduct,O
under,O
the,O
Investors,O
section,O
of,O
our,O
website,O
at,O
http,O
:,O
//www.watson.com,O
.,O
,O
Copies,O
of,O
these,O
materials,O
are,O
available,O
to,O
stockholders,O
without,O
charge,O
upon,O
request,O
sent,O
to,O
Investor,O
Relations,O
at,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Morris,I-LOCATION
Corporate,I-LOCATION
Center,I-LOCATION
III,I-LOCATION
",",O
400,O
Interpace,I-LOCATION
Parkway,I-LOCATION
",",O
Parsippany,I-LOCATION
",",O
NJ,I-LOCATION
07054,O
.,O
,O
On,O
an,O
annual,O
basis,O
our,O
Board,O
of,O
Directors,O
reviews,O
the,O
independence,O
of,O
all,O
directors,O
and,O
affirmatively,O
makes,O
a,O
determination,O
as,O
to,O
the,O
independence,O
of,O
each,O
director,O
.,O
,O
For,O
a,O
director,O
to,O
be,O
considered,O
independent,O
",",O
the,O
Board,O
must,O
determine,O
that,O
the,O
director,O
does,O
not,O
have,O
any,O
direct,O
or,O
indirect,O
material,O
relationship,O
with,O
Watson,I-BUSINESS
.,O
,O
To,O
assist,O
in,O
making,O
this,O
determination,O
",",O
the,O
Board,O
has,O
adopted,O
independence,O
guidelines,O
",",O
which,O
are,O
designed,O
to,O
conform,O
to,O
",",O
or,O
be,O
more,O
exacting,O
than,O
",",O
the,O
independence,O
requirements,O
set,O
forth,O
in,O
the,O
listing,O
standards,O
of,O
the,O
NYSE,I-BUSINESS
.,O
,O
You,O
may,O
find,O
these,O
guidelines,O
on,O
our,O
website,O
at,O
www.watson.com,O
.,O
,O
In,O
addition,O
to,O
applying,O
these,O
guidelines,O
",",O
the,O
Board,O
considers,O
any,O
and,O
all,O
additional,O
relevant,O
facts,O
and,O
circumstances,O
in,O
making,O
an,O
independence,O
determination,O
.,O
,O
Our,O
Board,O
has,O
determined,O
that,O
at,O
least,O
a,O
majority,O
of,O
its,O
directors,O
has,O
no,O
direct,O
or,O
indirect,O
material,O
relationship,O
with,O
us,O
(,O
other,O
than,O
as,O
our,O
director,O
),O
and,O
such,O
directors,O
are,O
independent,O
within,O
the,O
meaning,O
of,O
the,O
independence,O
standards,O
promulgated,O
by,O
the,O
SEC,I-GOVERNMENT
and,O
the,O
NYSE,I-BUSINESS
.,O
,O
Specifically,O
",",O
on,O
March,O
3,O
",",O
2011,O
",",O
the,O
Board,O
determined,O
",",O
based,O
on,O
our,O
Director,O
Independence,O
Standards,O
and,O
the,O
NYSE,I-BUSINESS
standards,O
for,O
independence,O
",",O
that,O
Christopher,I-PERSON
W.,I-PERSON
Bodine,I-PERSON
",",O
Michael,I-PERSON
Fedida,I-PERSON
",",O
Michel,I-PERSON
Feldman,I-PERSON
",",O
Albert,I-PERSON
Hummel,I-PERSON
",",O
Catherine,I-PERSON
Klema,I-PERSON
",",O
Jack,I-PERSON
Michelson,I-PERSON
",",O
Ronald,I-PERSON
Taylor,I-PERSON
",",O
Andrew,I-PERSON
Turner,I-PERSON
and,O
Fred,I-PERSON
Weiss,I-PERSON
",",O
or,O
nine,O
out,O
of,O
our,O
eleven,O
directors,O
",",O
have,O
no,O
relationship,O
with,O
us,O
that,O
would,O
interfere,O
with,O
the,O
exercise,O
of,O
independent,O
judgment,O
and,O
are,O
independent,O
directors,O
.,O
,O
Bisaro,I-PERSON
was,O
determined,O
to,O
be,O
not,O
independent,O
",",O
because,O
he,O
is,O
our,O
President,O
and,O
Chief,O
Executive,O
Officer,O
.,O
,O
Tabatznik,I-PERSON
was,O
determined,O
to,O
be,O
not,O
independent,O
because,O
of,O
the,O
fact,O
that,O
",",O
among,O
other,O
things,O
",",O
he,O
served,O
as,O
an,O
employee,O
of,O
the,O
Arrow,I-BUSINESS
Group,I-BUSINESS
prior,O
to,O
our,O
acquisition,O
of,O
the,O
Arrow,I-BUSINESS
Group,I-BUSINESS
in,O
2009,O
and,O
he,O
is,O
a,O
party,O
to,O
a,O
consulting,O
agreement,O
with,O
us,O
.,O
,O
Tabatznik,I-PERSON
is,O
no,O
longer,O
an,O
employee,O
of,O
the,O
Arrow,I-BUSINESS
Group,I-BUSINESS
.,O
,O
The,O
relationships,O
and,O
transactions,O
reviewed,O
by,O
the,O
Board,O
included,O
the,O
following,O
:,O
,O
Bodine,I-PERSON
s,O
service,O
as,O
an,O
employee,O
of,O
CVS,I-BUSINESS
Caremark,I-BUSINESS
Corporation,I-BUSINESS
",",O
a,O
customer,O
of,O
the,O
Company,O
",",O
through,O
January,O
of,O
2009,O
",",O
including,O
as,O
Special,O
Advisor,O
to,O
the,O
Chief,O
Executive,O
Officer,O
of,O
CVS,I-BUSINESS
Caremark,I-BUSINESS
Corporation,I-BUSINESS
from,O
July,O
29,O
",",O
2008,O
and,O
",",O
prior,O
to,O
that,O
",",O
as,O
Executive,O
Vice,O
President,O
of,O
CVS,I-BUSINESS
Caremark,I-BUSINESS
Corporation,I-BUSINESS
and,O
President,O
—,O
Caremark,I-BUSINESS
Pharmacy,I-BUSINESS
Services,I-BUSINESS
;,O
,O
Fedida,I-PERSON
s,O
ownership,O
of,O
pharmacies,O
that,O
from,O
time,O
to,O
time,O
purchase,O
pharmaceuticals,O
from,O
Anda,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
one,O
of,O
our,O
subsidiaries,O
that,O
is,O
a,O
wholesaler,O
distributor,O
;,O
,O
Klema,I-PERSON
s,O
directorship,O
with,O
Pharmaceutical,I-BUSINESS
Product,I-BUSINESS
Development,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
contract,O
research,O
organization,O
that,O
has,O
provided,O
services,O
for,O
us,O
in,O
the,O
past,O
;,O
,O
Hummel,I-PERSON
s,O
service,O
as,O
a,O
director,O
and,O
President,O
of,O
Pentech,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
development,O
stage,O
pharmaceutical,O
company,O
engaged,O
in,O
the,O
development,O
and,O
commercialization,O
of,O
pharmaceutical,O
products,O
in,O
the,O
areas,O
of,O
urology,O
and,O
the,O
central,O
nervous,O
system,O
.,O
,O
The,O
Board,O
has,O
determined,O
that,O
these,O
transactions,O
were,O
made,O
in,O
the,O
ordinary,O
course,O
",",O
were,O
below,O
the,O
thresholds,O
set,O
forth,O
in,O
our,O
director,O
independence,O
standards,O
and,O
did,O
not,O
affect,O
the,O
independence,O
of,O
the,O
directors,O
involved,O
.,O
,O
We,O
schedule,O
regular,O
executive,O
sessions,O
in,O
which,O
non-management,O
directors,O
meet,O
without,O
management,O
participation,O
.,O
,O
The,O
Chairman,O
of,O
the,O
Board,O
",",O
Mr.,O
Turner,I-PERSON
",",O
presides,O
at,O
these,O
meetings,O
.,O
,O
We,O
also,O
schedule,O
regular,O
executive,O
sessions,O
in,O
which,O
only,O
independent,O
directors,O
meet,O
.,O
,O
Any,O
interested,O
party,O
",",O
including,O
any,O
stockholder,O
",",O
wishing,O
to,O
contact,O
the,O
Board,O
of,O
Directors,O
",",O
the,O
presiding,O
director,O
of,O
the,O
non-management,O
director,O
meetings,O
",",O
or,O
any,O
other,O
individual,O
director,O
may,O
do,O
so,O
in,O
writing,O
by,O
sending,O
a,O
letter,O
to,O
:,O
,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
400,O
Interpace,I-LOCATION
Parkway,I-LOCATION
",",O
,O
Our,O
Corporate,O
Secretary,O
reviews,O
all,O
such,O
written,O
correspondence,O
and,O
regularly,O
forwards,O
to,O
the,O
Board,O
of,O
Directors,O
a,O
summary,O
of,O
all,O
correspondence,O
and,O
copies,O
of,O
correspondence,O
that,O
",",O
in,O
the,O
opinion,O
of,O
the,O
Corporate,O
Secretary,O
",",O
deal,O
with,O
the,O
functions,O
of,O
the,O
Board,O
of,O
Directors,O
or,O
its,O
committees,O
",",O
or,O
that,O
the,O
Corporate,O
Secretary,O
otherwise,O
determines,O
requires,O
Board,O
attention,O
.,O
,O
The,O
Board,O
of,O
Directors,O
has,O
determined,O
that,O
having,O
an,O
independent,O
director,O
serve,O
as,O
Chairman,O
of,O
the,O
Board,O
is,O
in,O
the,O
best,O
interest,O
of,O
stockholders,O
at,O
this,O
time,O
.,O
,O
We,O
separate,O
the,O
roles,O
of,O
Chief,O
Executive,O
Officer,O
and,O
Chairman,O
of,O
the,O
Board,O
in,O
recognition,O
of,O
the,O
differences,O
between,O
the,O
two,O
roles,O
.,O
,O
The,O
CEO,O
is,O
responsible,O
for,O
setting,O
the,O
strategic,O
direction,O
for,O
the,O
Company,O
and,O
the,O
day,O
to,O
day,O
leadership,O
and,O
performance,O
of,O
the,O
Company,O
",",O
while,O
the,O
Chairman,O
of,O
the,O
Board,O
provides,O
guidance,O
to,O
the,O
CEO,O
and,O
sets,O
the,O
agenda,O
for,O
Board,O
meetings,O
and,O
presides,O
over,O
meetings,O
of,O
the,O
full,O
Board,O
.,O
,O
We,O
also,O
believe,O
that,O
this,O
structure,O
ensures,O
a,O
greater,O
role,O
for,O
the,O
independent,O
directors,O
in,O
the,O
oversight,O
of,O
the,O
Company,O
and,O
active,O
participation,O
of,O
the,O
independent,O
directors,O
in,O
setting,O
agendas,O
and,O
establishing,O
priorities,O
and,O
procedures,O
for,O
the,O
work,O
of,O
the,O
Board,O
.,O
,O
We,O
also,O
believe,O
that,O
this,O
leadership,O
structure,O
is,O
preferred,O
by,O
a,O
significant,O
number,O
of,O
our,O
stockholders,O
.,O
,O
The,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
considers,O
director,O
candidates,O
from,O
diverse,O
sources,O
",",O
including,O
suggestions,O
from,O
stockholders,O
.,O
,O
From,O
time,O
to,O
time,O
",",O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
may,O
engage,O
a,O
third,O
party,O
for,O
a,O
fee,O
to,O
assist,O
in,O
identifying,O
potential,O
director,O
candidates,O
.,O
,O
The,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
looks,O
for,O
candidates,O
who,O
represent,O
a,O
diverse,O
mix,O
of,O
backgrounds,O
and,O
experiences,O
that,O
will,O
enhance,O
the,O
quality,O
of,O
the,O
board,O
s,O
deliberations,O
and,O
decisions,O
.,O
,O
The,O
backgrounds,O
and,O
qualifications,O
of,O
the,O
directors,O
",",O
considered,O
as,O
a,O
group,O
",",O
should,O
provide,O
a,O
significant,O
composite,O
mix,O
of,O
experience,O
",",O
knowledge,O
and,O
abilities,O
that,O
will,O
allow,O
the,O
Board,O
to,O
fulfill,O
its,O
responsibilities,O
.,O
,O
Specifically,O
",",O
this,O
committee,O
seeks,O
candidates,O
who,O
(,O
a,O
),O
bring,O
not,O
only,O
direct,O
experience,O
",",O
but,O
also,O
a,O
variety,O
of,O
experience,O
and,O
background,O
",",O
both,O
professionally,O
and,O
personally,O
",",O
(,O
b,O
),O
will,O
represent,O
the,O
balanced,O
",",O
best,O
interests,O
of,O
the,O
stockholders,O
as,O
a,O
whole,O
rather,O
than,O
special,O
interest,O
groups,O
or,O
constituencies,O
",",O
(,O
c,O
),O
have,O
a,O
reputation,O
for,O
integrity,O
and,O
(,O
d,O
),O
satisfy,O
the,O
independence,O
requirements,O
of,O
the,O
NYSE,I-BUSINESS
",",O
our,O
Director,O
Independence,O
Standards,O
and,O
applicable,O
law,O
.,O
,O
The,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
s,O
goal,O
is,O
to,O
have,O
a,O
diverse,O
",",O
balanced,O
and,O
engaged,O
board,O
whose,O
members,O
possess,O
the,O
skills,O
and,O
background,O
necessary,O
to,O
maximize,O
stockholder,O
value,O
in,O
a,O
manner,O
consistent,O
with,O
all,O
legal,O
requirements,O
and,O
the,O
highest,O
ethical,O
standards,O
.,O
,O
should,O
be,O
considered,O
by,O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
in,O
the,O
director,O
identification,O
and,O
nomination,O
process,O
.,O
,O
This,O
committee,O
does,O
not,O
assign,O
specific,O
weights,O
to,O
particular,O
criteria,O
and,O
no,O
particular,O
criterion,O
is,O
necessarily,O
applicable,O
to,O
all,O
prospective,O
nominees,O
.,O
,O
The,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
s,O
Charter,O
and,O
our,O
Corporate,O
Governance,O
Guidelines,O
",",O
which,O
are,O
published,O
on,O
our,O
website,O
at,O
http,O
:,O
//www.watson.com,O
under,O
the,O
Investors,O
section,O
",",O
set,O
forth,O
in,O
further,O
detail,O
the,O
criteria,O
that,O
guide,O
this,O
committee,O
in,O
assessing,O
potential,O
candidates,O
for,O
the,O
Board,O
of,O
Directors,O
.,O
,O
In,O
determining,O
whether,O
to,O
recommend,O
a,O
director,O
for,O
re-election,O
",",O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
considers,O
the,O
director,O
s,O
contributions,O
to,O
the,O
Board,O
and,O
the,O
committees,O
on,O
which,O
such,O
person,O
serves,O
",",O
participation,O
in,O
and,O
attendance,O
at,O
meetings,O
",",O
and,O
any,O
changes,O
in,O
employment,O
status,O
",",O
health,O
",",O
community,O
activity,O
or,O
other,O
factors,O
that,O
may,O
affect,O
the,O
director,O
s,O
continuing,O
contributions,O
to,O
the,O
Board,O
.,O
,O
The,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
evaluates,O
each,O
individual,O
in,O
the,O
context,O
of,O
the,O
Board,O
as,O
a,O
whole,O
",",O
with,O
the,O
objective,O
of,O
recommending,O
a,O
group,O
that,O
can,O
best,O
perpetuate,O
the,O
success,O
of,O
the,O
business,O
and,O
represent,O
stockholder,O
interests,O
through,O
the,O
exercise,O
of,O
sound,O
judgment,O
using,O
its,O
diversity,O
of,O
experience,O
in,O
these,O
various,O
areas,O
.,O
,O
The,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
initially,O
evaluates,O
a,O
candidate,O
for,O
nomination,O
to,O
the,O
Board,O
based,O
on,O
information,O
supplied,O
by,O
the,O
party,O
recommending,O
the,O
candidate,O
and,O
any,O
additional,O
public,O
information,O
that,O
may,O
be,O
available,O
.,O
,O
If,O
the,O
initial,O
evaluation,O
is,O
favorable,O
",",O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
gathers,O
additional,O
information,O
on,O
the,O
candidate,O
s,O
qualifications,O
",",O
availability,O
",",O
probable,O
level,O
of,O
interest,O
and,O
any,O
potential,O
conflicts,O
of,O
interest,O
.,O
,O
If,O
the,O
subsequent,O
evaluation,O
is,O
also,O
favorable,O
",",O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
contacts,O
the,O
candidate,O
directly,O
to,O
better,O
determine,O
each,O
party,O
s,O
level,O
of,O
interest,O
in,O
pursuing,O
the,O
candidacy,O
and,O
checks,O
the,O
candidate,O
s,O
references,O
.,O
,O
If,O
",",O
after,O
discussions,O
and,O
meetings,O
",",O
the,O
candidate,O
and,O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
establish,O
a,O
mutual,O
interest,O
in,O
pursuing,O
the,O
candidacy,O
",",O
the,O
committee,O
will,O
make,O
a,O
final,O
recommendation,O
to,O
the,O
Board,O
to,O
nominate,O
the,O
candidate,O
for,O
election,O
by,O
the,O
stockholders,O
(,O
or,O
to,O
select,O
the,O
candidate,O
to,O
fill,O
a,O
vacancy,O
",",O
as,O
applicable,O
),O
.,O
,O
The,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
employs,O
the,O
same,O
process,O
for,O
evaluating,O
all,O
candidates,O
",",O
including,O
those,O
properly,O
submitted,O
by,O
stockholders,O
and,O
will,O
consider,O
stockholder,O
recommendations,O
of,O
candidates,O
on,O
the,O
same,O
basis,O
as,O
it,O
considers,O
all,O
other,O
candidates,O
.,O
,O
Stockholders,O
wishing,O
to,O
recommend,O
a,O
director,O
candidate,O
for,O
consideration,O
by,O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
may,O
do,O
so,O
by,O
sending,O
the,O
candidate,O
s,O
name,O
",",O
biographical,O
information,O
and,O
qualifications,O
",",O
together,O
with,O
a,O
consent,O
in,O
writing,O
signed,O
by,O
the,O
recommended,O
nominee,O
that,O
he,O
or,O
she,O
is,O
willing,O
to,O
be,O
considered,O
as,O
a,O
nominee,O
and,O
",",O
if,O
nominated,O
and,O
elected,O
",",O
he,O
or,O
she,O
will,O
serve,O
as,O
a,O
director,O
",",O
to,O
the,O
Chair,O
of,O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
in,O
care,O
of,O
the,O
Corporate,O
Secretary,O
",",O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Morris,I-LOCATION
Corporate,I-LOCATION
Center,I-LOCATION
III,I-LOCATION
",",O
400,O
Interpace,I-LOCATION
Parkway,I-LOCATION
",",O
Parsippany,I-LOCATION
",",O
NJ,I-LOCATION
07054,O
.,O
,O
The,O
submission,O
of,O
a,O
recommendation,O
by,O
a,O
stockholder,O
in,O
compliance,O
with,O
these,O
procedures,O
does,O
not,O
guarantee,O
the,O
selection,O
of,O
the,O
stockholder,O
s,O
candidate,O
or,O
the,O
inclusion,O
of,O
the,O
candidate,O
in,O
our,O
proxy,O
statement,O
.,O
,O
However,O
",",O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
will,O
consider,O
any,O
such,O
candidate,O
in,O
accordance,O
with,O
the,O
procedures,O
and,O
guidelines,O
as,O
described,O
above,O
and,O
as,O
set,O
forth,O
in,O
the,O
Charter,O
of,O
our,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
and,O
in,O
our,O
Corporate,O
Governance,O
Guidelines,O
.,O
,O
During,O
the,O
fiscal,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
the,O
Board,O
of,O
Directors,O
held,O
eight,O
meetings,O
and,O
executed,O
one,O
unanimous,O
written,O
consent,O
in,O
lieu,O
of,O
a,O
meeting,O
.,O
,O
Each,O
director,O
attended,O
at,O
least,O
75,O
percent,O
of,O
the,O
combined,O
total,O
of,O
(,O
i,O
),O
all,O
Board,O
of,O
Directors,O
and,O
(,O
ii,O
),O
all,O
meetings,O
of,O
committees,O
of,O
which,O
the,O
director,O
was,O
a,O
member,O
.,O
,O
We,O
do,O
not,O
have,O
a,O
policy,O
with,O
regard,O
to,O
board,O
members,O
attendance,O
at,O
annual,O
meetings,O
.,O
,O
All,O
members,O
of,O
the,O
Board,O
attended,O
our,O
2010,O
Annual,O
Meeting,O
of,O
Stockholders,O
.,O
,O
Weiss,I-PERSON
attended,O
by,O
telephone,O
.,O
,O
The,O
Board,O
of,O
Directors,O
has,O
created,O
four,O
standing,O
committees,O
:,O
the,O
Audit,O
Committee,O
",",O
the,O
Compensation,O
Committee,O
",",O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
and,O
the,O
Regulatory,O
Compliance,O
Committee,O
.,O
,O
The,O
Board,O
of,O
Directors,O
has,O
adopted,O
a,O
charter,O
for,O
each,O
of,O
the,O
four,O
committees,O
.,O
,O
A,O
copy,O
is,O
also,O
available,O
to,O
stockholders,O
upon,O
request,O
sent,O
to,O
Investor,O
Relations,O
at,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Morris,I-LOCATION
Corporate,I-LOCATION
Center,I-LOCATION
III,I-LOCATION
",",O
400,O
Interpace,I-LOCATION
Parkway,I-LOCATION
",",O
Parsippany,I-LOCATION
",",O
NJ,I-LOCATION
07054,O
.,O
,O
We,O
have,O
an,O
Audit,O
Committee,O
currently,O
composed,O
of,O
Michel,I-PERSON
J.,I-PERSON
Feldman,I-PERSON
",",O
Albert,I-PERSON
F.,I-PERSON
Hummel,I-PERSON
",",O
Ronald,I-PERSON
R.,I-PERSON
Taylor,I-PERSON
and,O
Fred,I-PERSON
G.,I-PERSON
Weiss,I-PERSON
.,O
,O
Catherine,I-PERSON
M.,I-PERSON
Klema,I-PERSON
served,O
on,O
this,O
Committee,O
until,O
May,O
2010,O
",",O
when,O
she,O
was,O
succeeded,O
by,O
Mr.,O
,O
All,O
other,O
members,O
of,O
the,O
Audit,O
Committee,O
served,O
as,O
such,O
throughout,O
fiscal,O
year,O
2010,O
.,O
,O
Weiss,I-PERSON
serves,O
as,O
the,O
Chairman,O
of,O
the,O
Audit,O
Committee,O
.,O
,O
All,O
of,O
the,O
members,O
of,O
the,O
Audit,O
Committee,O
have,O
been,O
determined,O
by,O
the,O
Board,O
of,O
Directors,O
to,O
be,O
independent,O
and,O
meet,O
the,O
audit,O
committee,O
independence,O
requirements,O
of,O
the,O
NYSE,I-BUSINESS
listing,O
standards,O
and,O
SEC,I-GOVERNMENT
Rule,O
10A-3,O
.,O
,O
The,O
Board,O
of,O
Directors,O
has,O
determined,O
that,O
all,O
of,O
the,O
current,O
members,O
of,O
the,O
Audit,O
Committee,O
qualify,O
as,O
audit,O
committee,O
financial,O
experts,O
within,O
the,O
meaning,O
of,O
the,O
SEC,I-GOVERNMENT
rules,O
",",O
and,O
are,O
financially,O
literate,O
as,O
required,O
under,O
the,O
NYSE,I-BUSINESS
listing,O
standards,O
.,O
,O
The,O
functions,O
of,O
the,O
Audit,O
Committee,O
and,O
its,O
activities,O
during,O
fiscal,O
2010,O
are,O
described,O
below,O
under,O
the,O
heading,O
Report,O
of,O
the,O
Audit,O
Committee,O
.,O
,O
The,O
Audit,O
Committee,O
is,O
directly,O
responsible,O
for,O
the,O
engagement,O
",",O
compensation,O
and,O
oversight,O
of,O
the,O
work,O
of,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
(,O
including,O
resolution,O
of,O
disagreements,O
",",O
if,O
any,O
",",O
between,O
management,O
and,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
regarding,O
financial,O
reporting,O
),O
for,O
the,O
purpose,O
of,O
preparing,O
or,O
issuing,O
an,O
audit,O
report,O
or,O
related,O
work,O
.,O
,O
During,O
the,O
fiscal,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
the,O
Audit,O
Committee,O
met,O
five,O
times,O
and,O
executed,O
one,O
unanimous,O
written,O
consent,O
in,O
lieu,O
of,O
a,O
meeting,O
.,O
,O
The,O
Board,O
of,O
Directors,O
and,O
Audit,O
Committee,O
will,O
take,O
appropriate,O
action,O
",",O
including,O
reviewing,O
and,O
reassessing,O
the,O
adequacy,O
of,O
the,O
Audit,O
Committee,O
charter,O
annually,O
and,O
periodically,O
",",O
as,O
appropriate,O
",",O
and,O
as,O
conditions,O
dictate,O
.,O
,O
We,O
have,O
a,O
Compensation,O
Committee,O
currently,O
composed,O
of,O
Christopher,I-PERSON
W.,I-PERSON
Bodine,I-PERSON
",",O
Michael,I-PERSON
J.,I-PERSON
Fedida,I-PERSON
",",O
Catherine,I-PERSON
M.,I-PERSON
Klema,I-PERSON
and,O
Ronald,I-PERSON
R.,I-PERSON
Taylor,I-PERSON
.,O
,O
Klema,I-PERSON
and,O
Mr.,O
Taylor,I-PERSON
were,O
members,O
of,O
the,O
Compensation,O
Committee,O
throughout,O
fiscal,O
year,O
2010,O
.,O
,O
Weiss,I-PERSON
served,O
on,O
this,O
Committee,O
until,O
May,O
2010,O
",",O
when,O
he,O
was,O
succeeded,O
by,O
Messrs.,O
Bodine,I-PERSON
and,O
Fedida,I-PERSON
.,O
,O
Taylor,I-PERSON
serves,O
as,O
the,O
Chairman,O
of,O
the,O
Compensation,O
Committee,O
.,O
,O
All,O
of,O
the,O
members,O
of,O
the,O
Compensation,O
Committee,O
have,O
been,O
determined,O
by,O
the,O
Board,O
of,O
Directors,O
to,O
be,O
independent,O
and,O
meet,O
the,O
independence,O
requirements,O
of,O
the,O
NYSE,I-BUSINESS
listing,O
standards,O
.,O
,O
Our,O
Board,O
has,O
determined,O
that,O
all,O
current,O
Compensation,O
Committee,O
members,O
qualify,O
as,O
non-employee,O
directors,O
within,O
the,O
meaning,O
of,O
Section,O
16,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
as,O
outside,O
directors,O
within,O
the,O
meaning,O
of,O
Section,O
162,O
(,O
m,O
),O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
(,O
IRC,I-LEGISLATION/ACT
),O
.,O
,O
The,O
primary,O
purpose,O
of,O
the,O
Compensation,O
Committee,O
is,O
to,O
review,O
",",O
approve,O
and,O
evaluate,O
director,O
compensation,O
and,O
senior,O
executive,O
compensation,O
plans,O
",",O
policies,O
and,O
programs,O
for,O
us,O
.,O
,O
The,O
Compensation,O
Committee,O
engaged,O
F.W.,I-BUSINESS
Cook,I-BUSINESS
",",O
an,O
independent,O
compensation,O
consulting,O
firm,O
",",O
to,O
advise,O
the,O
Compensation,O
Committee,O
during,O
the,O
2010,O
fiscal,O
year,O
.,O
,O
Cook,I-BUSINESS
reported,O
directly,O
to,O
the,O
Compensation,O
Committee,O
and,O
the,O
Compensation,O
Committee,O
retains,O
the,O
right,O
to,O
terminate,O
or,O
replace,O
the,O
consultant,O
at,O
any,O
time,O
.,O
,O
Cook,I-BUSINESS
conducted,O
an,O
annual,O
review,O
of,O
our,O
total,O
compensation,O
program,O
for,O
our,O
executive,O
officers,O
and,O
advised,O
the,O
Compensation,O
Committee,O
on,O
such,O
compensation,O
matters,O
as,O
requested,O
by,O
the,O
Compensation,O
Committee,O
.,O
,O
Cook,I-BUSINESS
did,O
not,O
provide,O
other,O
services,O
to,O
the,O
Company,O
in,O
2010,O
.,O
,O
Additional,O
information,O
on,O
the,O
Compensation,O
Committee,O
s,O
processes,O
and,O
procedures,O
for,O
consideration,O
of,O
executive,O
compensation,O
",",O
including,O
the,O
role,O
of,O
our,O
chief,O
executive,O
officer,O
",",O
are,O
addressed,O
in,O
the,O
Compensation,O
Discussion,O
and,O
Analysis,O
beginning,O
on,O
page,O
15,O
.,O
,O
The,O
Compensation,O
Committee,O
met,O
five,O
times,O
and,O
executed,O
two,O
unanimous,O
written,O
consents,O
in,O
lieu,O
of,O
meetings,O
during,O
the,O
fiscal,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
We,O
have,O
a,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
currently,O
composed,O
of,O
Christopher,I-PERSON
W.,I-PERSON
Bodine,I-PERSON
",",O
Catherine,I-PERSON
M.,I-PERSON
Klema,I-PERSON
",",O
Jack,I-PERSON
Michelson,I-PERSON
and,O
Fred,I-PERSON
G.,I-PERSON
Weiss,I-PERSON
.,O
,O
Klema,I-PERSON
and,O
Mr.,O
Weiss,I-PERSON
served,O
as,O
members,O
of,O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
throughout,O
fiscal,O
year,O
2010,O
.,O
,O
Taylor,I-PERSON
served,O
on,O
this,O
Committee,O
until,O
May,O
2010,O
",",O
when,O
he,O
was,O
succeeded,O
by,O
Messrs.,O
Bodine,I-PERSON
and,O
Michelson,I-PERSON
.,O
,O
the,O
Chairperson,O
of,O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
.,O
,O
All,O
of,O
the,O
members,O
of,O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
have,O
been,O
determined,O
by,O
the,O
Board,O
of,O
Directors,O
to,O
be,O
independent,O
and,O
meet,O
the,O
independence,O
requirements,O
of,O
the,O
NYSE,I-BUSINESS
listing,O
standards,O
.,O
,O
The,O
key,O
functions,O
of,O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
are,O
to,O
identify,O
and,O
present,O
qualified,O
candidates,O
to,O
the,O
Board,O
of,O
Directors,O
for,O
election,O
or,O
re-election,O
as,O
directors,O
of,O
the,O
Board,O
and,O
Board,O
of,O
Directors,O
committees,O
",",O
ensure,O
that,O
the,O
size,O
and,O
composition,O
of,O
the,O
Board,O
of,O
Directors,O
",",O
its,O
committees,O
",",O
and,O
our,O
Charter,O
and,O
Bylaws,O
are,O
structured,O
in,O
a,O
way,O
that,O
best,O
serves,O
our,O
practices,O
and,O
objectives,O
",",O
develop,O
and,O
recommend,O
to,O
the,O
Board,O
of,O
Directors,O
a,O
set,O
of,O
corporate,O
governance,O
guidelines,O
and,O
principles,O
and,O
periodically,O
review,O
and,O
recommend,O
changes,O
to,O
such,O
guidelines,O
and,O
principles,O
as,O
deemed,O
appropriate,O
",",O
and,O
oversee,O
the,O
evaluation,O
of,O
the,O
Board,O
of,O
Directors,O
and,O
senior,O
management,O
.,O
,O
The,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
met,O
two,O
times,O
during,O
the,O
fiscal,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
We,O
have,O
a,O
Regulatory,O
Compliance,O
Committee,O
currently,O
composed,O
of,O
Michael,I-PERSON
J.,I-PERSON
Fedida,I-PERSON
",",O
Michel,I-PERSON
J.,I-PERSON
Feldman,I-PERSON
",",O
Albert,I-PERSON
F.,I-PERSON
Hummel,I-PERSON
and,O
Jack,I-PERSON
Michelson,I-PERSON
.,O
,O
Each,O
was,O
a,O
member,O
of,O
the,O
Regulatory,O
Compliance,O
Committee,O
throughout,O
fiscal,O
year,O
2010,O
.,O
,O
Michelson,I-PERSON
serves,O
as,O
the,O
Chairman,O
of,O
the,O
Regulatory,O
Compliance,O
Committee,O
.,O
,O
The,O
primary,O
purpose,O
of,O
the,O
Regulatory,O
Compliance,O
Committee,O
is,O
to,O
assist,O
the,O
Board,O
of,O
Directors,O
with,O
the,O
Board,O
s,O
oversight,O
responsibilities,O
regarding,O
our,O
compliance,O
with,O
applicable,O
regulatory,O
requirements,O
related,O
to,O
product,O
safety,O
and,O
quality,O
and,O
environmental,O
",",O
health,O
and,O
safety,O
matters,O
.,O
,O
The,O
Regulatory,O
Compliance,O
Committee,O
met,O
two,O
times,O
and,O
executed,O
one,O
unanimous,O
written,O
consent,O
in,O
lieu,O
of,O
a,O
meeting,O
during,O
the,O
fiscal,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
The,O
Compensation,O
Committee,O
of,O
our,O
Board,O
of,O
Directors,O
is,O
responsible,O
for,O
establishing,O
",",O
implementing,O
and,O
continually,O
monitoring,O
our,O
adherence,O
to,O
our,O
compensation,O
philosophy,O
for,O
our,O
executive,O
officers,O
",",O
including,O
Paul,I-PERSON
M.,I-PERSON
Bisaro,I-PERSON
",",O
our,O
chief,O
executive,O
officer,O
.,O
,O
The,O
Compensation,O
Committee,O
seeks,O
to,O
ensure,O
that,O
the,O
total,O
compensation,O
paid,O
to,O
our,O
executive,O
officers,O
is,O
fair,O
",",O
reasonable,O
and,O
competitive,O
.,O
,O
Throughout,O
this,O
proxy,O
statement,O
",",O
references,O
to,O
our,O
Named,O
Executive,O
Officers,O
refer,O
to,O
Paul,I-PERSON
M.,I-PERSON
Bisaro,I-PERSON
",",O
our,O
President,O
and,O
Chief,O
Executive,O
Officer,O
",",O
R.,I-PERSON
Todd,I-PERSON
Joyce,I-PERSON
",",O
our,O
Executive,O
Vice,O
President,O
and,O
Chief,O
Financial,O
Officer,O
",",O
G.,I-PERSON
Frederick,I-PERSON
Wilkinson,I-PERSON
",",O
our,O
Executive,O
Vice,O
President,O
",",O
Global,O
Brands,O
",",O
Robert,I-PERSON
A.,I-PERSON
Stewart,I-PERSON
",",O
our,O
Executive,O
Vice,O
President,O
",",O
Global,O
Operations,O
",",O
and,O
David,I-PERSON
A.,I-PERSON
Buchen,I-PERSON
",",O
our,O
Executive,O
Vice,O
President,O
",",O
General,O
Counsel,O
and,O
Secretary,O
.,O
,O
2010,O
was,O
a,O
year,O
of,O
continued,O
success,O
",",O
with,O
the,O
Company,O
achieving,O
a,O
number,O
of,O
key,O
business,O
objectives,O
and,O
net,O
revenue,O
and,O
non-GAAP,I-MISCELLANEOUS
earnings,O
per,O
share,O
growth,O
",",O
respectively,O
",",O
of,O
27.7,O
percent,O
and,O
12.5,O
percent,O
during,O
the,O
year,O
.,O
,O
Our,O
record,O
of,O
effectively,O
executing,O
our,O
plans,O
and,O
realizing,O
our,O
financial,O
and,O
business,O
objectives,O
continues,O
from,O
2009,O
",",O
during,O
which,O
we,O
achieved,O
",",O
respectively,O
",",O
net,O
revenue,O
and,O
non-GAAP,I-MISCELLANEOUS
earnings,O
per,O
share,O
growth,O
of,O
10.2,O
percent,O
and,O
23.1,O
percent,O
;,O
and,O
2008,O
",",O
during,O
which,O
we,O
achieved,O
",",O
respectively,O
",",O
net,O
revenue,O
and,O
non-GAAP,I-MISCELLANEOUS
earnings,O
per,O
share,O
growth,O
of,O
1.6,O
percent,O
and,O
6.9,O
percent,O
.,O
,O
These,O
successes,O
have,O
occurred,O
as,O
we,O
have,O
fundamentally,O
expanded,O
and,O
reshaped,O
our,O
Company,O
on,O
a,O
global,O
basis,O
",",O
including,O
through,O
the,O
acquisition,O
of,O
the,O
Arrow,I-BUSINESS
Group,I-BUSINESS
in,O
December,O
2009,O
.,O
,O
We,O
believe,O
that,O
the,O
structure,O
and,O
implementation,O
of,O
our,O
compensation,O
programs,O
for,O
senior,O
executives,O
",",O
including,O
our,O
Named,O
Executive,O
Officers,O
",",O
has,O
helped,O
to,O
contribute,O
to,O
our,O
achieving,O
strong,O
performance,O
.,O
,O
In,O
designing,O
and,O
implementing,O
compensation,O
programs,O
for,O
our,O
Named,O
Executive,O
Officers,O
",",O
our,O
primary,O
objectives,O
are,O
to,O
:,O
,O
The,O
Compensation,O
Committee,O
regularly,O
and,O
systematically,O
evaluates,O
individual,O
",",O
departmental,O
",",O
segment,O
and,O
corporate,O
performance,O
to,O
determine,O
the,O
proper,O
structure,O
and,O
mix,O
of,O
executive,O
compensation,O
to,O
support,O
key,O
financial,O
and,O
strategic,O
business,O
objectives,O
while,O
setting,O
executive,O
compensation,O
at,O
levels,O
the,O
Compensation,O
Committee,O
believes,O
are,O
competitive,O
relative,O
to,O
our,O
peer,O
companies,O
.,O
,O
In,O
addition,O
",",O
the,O
Compensation,O
Committee,O
believes,O
that,O
the,O
mix,O
and,O
design,O
of,O
the,O
elements,O
of,O
executive,O
compensation,O
do,O
not,O
encourage,O
management,O
to,O
assume,O
excessive,O
risks,O
.,O
,O
During,O
2010,O
we,O
continued,O
to,O
allocate,O
a,O
significant,O
percentage,O
of,O
our,O
total,O
compensation,O
to,O
annual,O
cash,O
incentives,O
and,O
long-term,O
equity,O
incentives,O
.,O
,O
Some,O
of,O
the,O
highlights,O
of,O
our,O
2010,O
compensation,O
program,O
include,O
",",O
among,O
other,O
things,O
:,O
,O
We,O
discuss,O
each,O
of,O
these,O
actions,O
below,O
.,O
,O
Objectives,O
of,O
Named,O
Executive,O
Officer,O
Compensation,O
Program,O
.,O
,O
The,O
Compensation,O
Committee,O
s,O
primary,O
objectives,O
with,O
respect,O
to,O
Named,O
Executive,O
Officer,O
compensation,O
are,O
to,O
:,O
,O
To,O
these,O
ends,O
the,O
Compensation,O
Committee,O
believes,O
that,O
the,O
most,O
effective,O
executive,O
compensation,O
program,O
is,O
one,O
that,O
(,O
i,O
),O
links,O
a,O
significant,O
portion,O
of,O
an,O
executive,O
s,O
total,O
compensation,O
to,O
the,O
achievement,O
of,O
specific,O
individual,O
and,O
corporate,O
performance,O
goals,O
",",O
including,O
annual,O
and,O
long-term,O
strategic,O
goals,O
and,O
(,O
ii,O
),O
provides,O
such,O
compensation,O
in,O
a,O
mix,O
of,O
both,O
cash,O
and,O
equity-based,O
compensation,O
such,O
that,O
our,O
executives,O
continue,O
to,O
have,O
the,O
creation,O
of,O
short-,O
and,O
long-term,O
stockholder,O
value,O
as,O
key,O
objectives,O
.,O
,O
The,O
Compensation,O
Committee,O
evaluates,O
individual,O
",",O
departmental,O
",",O
segment,O
and,O
corporate,O
performance,O
to,O
determine,O
the,O
proper,O
mix,O
of,O
executive,O
total,O
compensation,O
with,O
the,O
goal,O
of,O
setting,O
executive,O
total,O
compensation,O
at,O
levels,O
the,O
Compensation,O
Committee,O
believes,O
are,O
competitive,O
relative,O
to,O
the,O
total,O
compensation,O
paid,O
to,O
similarly,O
situated,O
executives,O
of,O
our,O
peer,O
companies,O
.,O
,O
As,O
a,O
result,O
of,O
our,O
compensation,O
objectives,O
outlined,O
above,O
",",O
we,O
allocate,O
a,O
significant,O
percentage,O
of,O
our,O
total,O
compensation,O
to,O
annual,O
cash,O
incentives,O
and,O
long-term,O
equity,O
incentives,O
.,O
,O
We,O
have,O
no,O
pre-established,O
policy,O
or,O
target,O
for,O
the,O
allocation,O
between,O
either,O
cash,O
and,O
non-cash,O
or,O
short-term,O
and,O
long-term,O
incentive,O
compensation,O
.,O
,O
Rather,O
",",O
the,O
Compensation,O
Committee,O
continually,O
reviews,O
many,O
factors,O
",",O
as,O
discussed,O
more,O
fully,O
below,O
",",O
to,O
determine,O
the,O
appropriate,O
level,O
and,O
mix,O
of,O
incentive,O
compensation,O
.,O
,O
To,O
implement,O
the,O
objectives,O
above,O
",",O
our,O
fiscal,O
2010,O
compensation,O
for,O
our,O
Named,O
Executive,O
Officers,O
consisted,O
primarily,O
of,O
the,O
following,O
components,O
(,O
in,O
addition,O
to,O
the,O
retirement,O
",",O
health,O
and,O
welfare,O
plans,O
and,O
programs,O
in,O
which,O
all,O
of,O
our,O
full-time,O
U.S.,I-LOCATION
employees,O
participate,O
and,O
limited,O
perquisites,O
),O
:,O
,O
Compensation,O
Best,O
Practices,O
.,O
,O
The,O
Compensation,O
Committee,O
designs,O
our,O
compensation,O
program,O
to,O
motivate,O
our,O
Named,O
Executive,O
Officers,O
to,O
achieve,O
short-and,O
long-term,O
financial,O
and,O
strategic,O
goals,O
",",O
in,O
addition,O
to,O
increasing,O
stockholder,O
value,O
",",O
without,O
encouraging,O
excessive,O
risk-taking,O
.,O
,O
The,O
Compensation,O
Committee,O
",",O
with,O
the,O
assistance,O
of,O
our,O
senior,O
management,O
and,O
external,O
advisors,O
including,O
F.W.,I-BUSINESS
Cook,I-BUSINESS
",",O
the,O
Compensation,O
Committee,O
s,O
compensation,O
consultant,O
",",O
regularly,O
evaluates,O
and,O
modifies,O
our,O
compensation,O
programs,O
in,O
an,O
effort,O
to,O
incorporate,O
best,O
practices,O
.,O
,O
In,O
2010,O
",",O
we,O
retained,O
a,O
number,O
of,O
key,O
practices,O
and,O
plan,O
design,O
elements,O
we,O
believe,O
represent,O
compensation,O
best,O
practices,O
",",O
including,O
:,O
,O
In,O
2011,O
",",O
we,O
have,O
continued,O
to,O
adapt,O
and,O
modify,O
our,O
compensation,O
programs,O
for,O
our,O
Named,O
Executive,O
Officers,O
and,O
others,O
in,O
order,O
to,O
support,O
our,O
business,O
objectives,O
and,O
increase,O
shareholder,O
value,O
while,O
managing,O
risk,O
.,O
,O
New,O
aspects,O
of,O
our,O
compensation,O
programs,O
for,O
our,O
Named,O
Executive,O
Officers,O
in,O
2011,O
include,O
:,O
,O
We,O
discuss,O
each,O
of,O
these,O
changes,O
below,O
.,O
,O
On,O
an,O
annual,O
basis,O
",",O
in,O
concert,O
with,O
our,O
chief,O
executive,O
officer,O
",",O
our,O
Named,O
Executive,O
Officers,O
engage,O
in,O
a,O
process,O
whereby,O
they,O
each,O
set,O
individual,O
",",O
departmental,O
and,O
company-wide,O
goals,O
for,O
the,O
year,O
to,O
come,O
.,O
,O
Following,O
the,O
completion,O
of,O
our,O
fiscal,O
year,O
",",O
our,O
Named,O
Executive,O
Officers,O
are,O
formally,O
required,O
to,O
assess,O
whether,O
these,O
goals,O
were,O
achieved,O
and,O
to,O
set,O
values,O
to,O
express,O
the,O
extent,O
to,O
which,O
the,O
Named,O
Executive,O
Officer,O
believes,O
his,O
or,O
her,O
goals,O
were,O
met,O
.,O
,O
Our,O
chief,O
executive,O
officer,O
reviews,O
and,O
discusses,O
these,O
self-assessments,O
with,O
each,O
of,O
our,O
Named,O
Executive,O
Officers,O
and,O
",",O
with,O
the,O
assistance,O
of,O
our,O
human,O
resources,O
department,O
",",O
makes,O
recommendations,O
to,O
the,O
Compensation,O
Committee,O
concerning,O
compensation,O
of,O
the,O
Named,O
Executive,O
Officers,O
.,O
,O
recommendations,O
in,O
its,O
discretion,O
.,O
,O
Our,O
Human,O
Resources,O
department,O
also,O
works,O
closely,O
with,O
the,O
Compensation,O
Committee,O
and,O
management,O
to,O
ensure,O
that,O
the,O
Compensation,O
Committee,O
is,O
provided,O
with,O
appropriate,O
information,O
upon,O
which,O
to,O
base,O
its,O
decisions,O
and,O
communicate,O
those,O
decisions,O
to,O
management,O
for,O
implementation,O
.,O
,O
The,O
Compensation,O
Committee,O
engaged,O
Frederic,I-BUSINESS
W.,I-BUSINESS
Cook,I-BUSINESS
&,I-BUSINESS
Co.,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Cook,I-BUSINESS
),O
",",O
an,O
independent,O
global,O
executive,O
compensation,O
consulting,O
firm,O
",",O
to,O
advise,O
the,O
committee,O
on,O
matters,O
related,O
to,O
chief,O
executive,O
officer,O
and,O
other,O
executive,O
compensation,O
with,O
respect,O
to,O
2010,O
.,O
,O
In,O
this,O
capacity,O
",",O
F.W.,I-BUSINESS
Cook,I-BUSINESS
conducted,O
a,O
benchmark,O
review,O
of,O
our,O
compensation,O
program,O
for,O
our,O
Named,O
Executive,O
Officers,O
and,O
provided,O
the,O
Compensation,O
Committee,O
with,O
relevant,O
market,O
data,O
and,O
structuring,O
alternatives,O
to,O
consider,O
when,O
making,O
compensation,O
decisions,O
.,O
,O
Working,O
with,O
F.W.,I-BUSINESS
Cook,I-BUSINESS
",",O
the,O
Compensation,O
Committee,O
compared,O
the,O
elements,O
of,O
our,O
total,O
compensation,O
program,O
against,O
programs,O
provided,O
for,O
similarly,O
situated,O
executives,O
at,O
peer,O
companies,O
",",O
as,O
discussed,O
more,O
fully,O
below,O
.,O
,O
The,O
Compensation,O
Committee,O
generally,O
assesses,O
the,O
competitiveness,O
of,O
our,O
total,O
target,O
and,O
actual,O
direct,O
compensation,O
(,O
salary,O
",",O
bonus,O
and,O
equity,O
),O
for,O
our,O
Named,O
Executive,O
Officers,O
and,O
other,O
senior,O
executives,O
by,O
comparing,O
these,O
amounts,O
with,O
the,O
total,O
direct,O
compensation,O
paid,O
to,O
similarly,O
situated,O
executives,O
of,O
our,O
peer,O
companies,O
.,O
,O
In,O
February,O
2010,O
",",O
F.W.,I-BUSINESS
Cook,I-BUSINESS
conducted,O
a,O
competitive,O
pay,O
assessment,O
of,O
the,O
compensation,O
of,O
our,O
Named,O
Executive,O
Officers,O
.,O
,O
The,O
assessments,O
were,O
performed,O
using,O
benchmarks,O
from,O
compensation,O
data,O
reported,O
in,O
the,O
then-most,O
recent,O
proxy,O
statements,O
of,O
the,O
following,O
thirteen,O
(,O
13,O
),O
peer,O
group,O
companies,O
:,O
,O
Biogen,I-BUSINESS
Idec,I-BUSINESS
Inc.,I-BUSINESS
(,O
Biogen,I-BUSINESS
),O
",",O
Cephalon,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
Cephalon,I-BUSINESS
),O
",",O
Endo,I-BUSINESS
Pharmaceuticals,I-BUSINESS
Inc.,I-BUSINESS
(,O
Endo,I-BUSINESS
),O
",",O
Forest,I-BUSINESS
Laboratories,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Genzyme,I-BUSINESS
Corporation,I-BUSINESS
(,O
Genzyme,I-BUSINESS
),O
Hospira,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
King,I-BUSINESS
Pharmaceutical,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Medicis,I-BUSINESS
Pharmaceutical,I-BUSINESS
Corp.,I-BUSINESS
(,O
Medicis,I-BUSINESS
),O
",",O
Mylan,I-BUSINESS
Laboratories,I-BUSINESS
Inc.,I-BUSINESS
",",O
Perrigo,I-BUSINESS
Company,I-BUSINESS
Valeant,I-BUSINESS
Pharmaceuticals,I-BUSINESS
International,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
Warner,I-BUSINESS
Chilcott,I-BUSINESS
PLC,I-BUSINESS
(,O
Warner,I-BUSINESS
),O
,O
Since,O
the,O
assessment,O
of,O
compensation,O
performed,O
by,O
Towers,I-BUSINESS
Perrin,I-BUSINESS
",",O
our,O
former,O
independent,O
compensation,O
advisor,O
",",O
in,O
January,O
2009,O
",",O
we,O
added,O
Biogen,I-BUSINESS
",",O
Cephalon,I-BUSINESS
",",O
Endo,I-BUSINESS
and,O
Genzyme,I-BUSINESS
to,O
our,O
peer,O
group,O
based,O
on,O
our,O
selection,O
criteria,O
of,O
public,O
companies,O
competing,O
primarily,O
in,O
the,O
pharmaceutical,O
sector,O
that,O
had,O
between,O
50,O
%,O
and,O
200,O
%,O
of,O
our,O
revenue,O
or,O
our,O
market,O
capitalization,O
at,O
the,O
time,O
of,O
the,O
study,O
.,O
,O
Also,O
since,O
the,O
2009,O
compensation,O
assessment,O
",",O
we,O
deleted,O
Barr,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
Biovail,I-BUSINESS
Corporation,I-BUSINESS
from,O
our,O
peer,O
group,O
because,O
compensation,O
data,O
for,O
these,O
companies,O
is,O
no,O
longer,O
available,O
as,O
a,O
result,O
of,O
their,O
acquisition,O
by,O
Teva,I-BUSINESS
Pharmaceutical,I-BUSINESS
Industries,I-BUSINESS
Ltd.,I-BUSINESS
and,O
Valeant,I-BUSINESS
Pharmaceuticals,I-BUSINESS
International,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
respectively,O
.,O
,O
We,O
also,O
deleted,O
K-V,I-BUSINESS
Pharmaceutical,I-BUSINESS
Company,I-BUSINESS
and,O
Par,I-BUSINESS
Pharmaceutical,I-BUSINESS
Companies,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
because,O
they,O
did,O
not,O
meet,O
either,O
the,O
revenue,O
or,O
market,O
capitalization,O
criteria,O
.,O
,O
Except,O
for,O
Medicis,I-BUSINESS
",",O
the,O
peer,O
companies,O
met,O
either,O
the,O
revenue,O
or,O
market,O
capitalization,O
criteria,O
.,O
,O
Medicis,I-BUSINESS
fell,O
below,O
these,O
criteria,O
but,O
our,O
Compensation,O
Committee,O
retained,O
Medicis,I-BUSINESS
in,O
our,O
peer,O
group,O
in,O
order,O
to,O
get,O
additional,O
data,O
points,O
for,O
comparison,O
and,O
because,O
F.W.,I-BUSINESS
Cook,I-BUSINESS
and,O
the,O
Compensation,O
Committee,O
considered,O
Medicis,I-BUSINESS
to,O
be,O
very,O
similar,O
to,O
us,O
in,O
terms,O
of,O
business,O
model,O
and,O
scope,O
of,O
operations,O
.,O
,O
The,O
Compensation,O
Committee,O
does,O
not,O
rely,O
exclusively,O
on,O
peer,O
company,O
comparisons,O
and,O
considers,O
an,O
individual,O
s,O
experience,O
and,O
market,O
factors,O
on,O
a,O
case-by-case,O
basis,O
.,O
,O
In,O
assessing,O
competitiveness,O
",",O
F.W.,I-BUSINESS
Cook,I-BUSINESS
generally,O
considered,O
if,O
a,O
Named,O
Executive,O
Officer,O
s,O
target,O
compensation,O
was,O
within,O
",",O
above,O
or,O
below,O
the,O
range,O
of,O
competitive,O
market,O
practices,O
.,O
,O
That,O
competitive,O
range,O
was,O
defined,O
as,O
:,O
each,O
of,O
(,O
a,O
),O
base,O
salary,O
",",O
(,O
b,O
),O
",",O
target,O
total,O
cash,O
compensation,O
and,O
(,O
c,O
),O
target,O
total,O
direct,O
compensation,O
being,O
within,O
plus,O
or,O
minus,O
15,O
%,O
of,O
the,O
50th,O
percentile,O
of,O
the,O
peer,O
group,O
.,O
,O
Stewart,I-PERSON
was,O
not,O
employed,O
in,O
his,O
current,O
position,O
as,O
the,O
Company,O
s,O
Executive,O
Vice,O
President,O
",",O
Global,O
Operations,O
at,O
the,O
time,O
that,O
F.W.,I-BUSINESS
Cook,I-BUSINESS
performed,O
its,O
compensation,O
analysis,O
in,O
February,O
2010,O
.,O
,O
As,O
a,O
result,O
",",O
the,O
compensation,O
consultant,O
s,O
analysis,O
did,O
not,O
include,O
Mr.,O
Cook,I-PERSON
s,O
February,O
2010,O
study,O
indicated,O
that,O
target,O
compensation,O
for,O
our,O
Named,O
Executive,O
Officers,O
compared,O
to,O
the,O
competitive,O
range,O
as,O
shown,O
in,O
the,O
following,O
table,O
:,O
,O
Base,O
salary,O
provides,O
our,O
Named,O
Executive,O
Officers,O
with,O
a,O
degree,O
of,O
financial,O
certainty,O
and,O
stability,O
.,O
,O
In,O
setting,O
base,O
salaries,O
and,O
determining,O
merit,O
increases,O
for,O
our,O
Named,O
Executive,O
Officers,O
the,O
Compensation,O
Committee,O
takes,O
into,O
account,O
a,O
variety,O
of,O
factors,O
",",O
including,O
:,O
,O
With,O
regard,O
to,O
individual,O
and,O
team,O
performance,O
",",O
the,O
Compensation,O
Committee,O
relies,O
to,O
a,O
large,O
extent,O
on,O
our,O
chief,O
executive,O
officer,O
s,O
evaluation,O
of,O
each,O
other,O
Named,O
Executive,O
Officer,O
s,O
individual,O
performance,O
.,O
,O
are,O
typically,O
reviewed,O
annually,O
as,O
part,O
of,O
our,O
performance,O
review,O
process,O
as,O
well,O
as,O
upon,O
a,O
promotion,O
or,O
other,O
change,O
in,O
job,O
responsibility,O
.,O
,O
Merit,O
based,O
increases,O
to,O
the,O
salaries,O
of,O
our,O
Named,O
Executive,O
Officers,O
are,O
based,O
on,O
the,O
Compensation,O
Committee,O
s,O
and,O
the,O
chief,O
executive,O
officer,O
s,O
assessment,O
of,O
the,O
individual,O
s,O
performance,O
and,O
market,O
conditions,O
.,O
,O
After,O
taking,O
into,O
consideration,O
(,O
a,O
),O
the,O
factors,O
listed,O
above,O
",",O
(,O
b,O
),O
the,O
F.W.,I-BUSINESS
Cook,I-BUSINESS
competitive,O
pay,O
assessment,O
from,O
February,O
2010,O
",",O
(,O
c,O
),O
the,O
recommendations,O
from,O
our,O
chief,O
executive,O
officer,O
in,O
the,O
case,O
of,O
the,O
other,O
Named,O
Executive,O
Officers,O
",",O
in,O
2010,O
",",O
the,O
Compensation,O
Committee,O
did,O
not,O
change,O
Mr.,O
Bisaro,I-PERSON
s,O
base,O
salary,O
and,O
increased,O
Mr.,O
Wilkinson,I-PERSON
s,O
base,O
salary,O
by,O
2,O
%,O
",",O
Mr.,O
Joyce,I-PERSON
s,O
base,O
salary,O
by,O
5.89,O
%,O
and,O
Mr.,O
Buchen,I-PERSON
s,O
base,O
salary,O
by,O
2,O
%,O
.,O
,O
Joyce,I-PERSON
s,O
increase,O
reflected,O
the,O
increased,O
responsibilities,O
he,O
assumed,O
from,O
his,O
recent,O
promotion,O
to,O
become,O
our,O
Chief,O
Financial,O
Officer,O
.,O
,O
Stewart,I-PERSON
s,O
base,O
salary,O
was,O
increased,O
by,O
the,O
Compensation,O
Committee,O
from,O
$,O
"450,000",O
to,O
$,O
"500,000",O
effective,O
July,O
28,O
",",O
2010,O
in,O
conjunction,O
with,O
his,O
promotion,O
from,O
our,O
Senior,O
Vice,O
President,O
",",O
Global,O
Operations,O
to,O
our,O
Executive,O
Vice,O
President,O
",",O
Global,O
Operations,O
.,O
,O
In,O
establishing,O
his,O
base,O
salary,O
",",O
the,O
Compensation,O
Committee,O
considered,O
Mr.,O
Stewart,I-PERSON
s,O
then,O
current,O
compensation,O
prior,O
to,O
his,O
promotion,O
",",O
the,O
information,O
contained,O
in,O
the,O
February,O
2010,O
F.W.,I-BUSINESS
Cook,I-BUSINESS
report,O
regarding,O
competitive,O
market,O
practices,O
for,O
compensation,O
of,O
other,O
executives,O
with,O
similar,O
responsibilities,O
in,O
our,O
peer,O
group,O
",",O
and,O
the,O
nature,O
of,O
the,O
roles,O
and,O
responsibilities,O
Mr.,O
Stewart,I-PERSON
would,O
be,O
expected,O
to,O
assume,O
.,O
,O
The,O
purpose,O
of,O
our,O
annual,O
cash,O
incentive,O
program,O
is,O
to,O
provide,O
cash,O
compensation,O
on,O
an,O
annual,O
basis,O
that,O
is,O
at-risk,O
and,O
contingent,O
on,O
the,O
achievement,O
of,O
measurable,O
annual,O
individual,O
",",O
departmental,O
",",O
business,O
and,O
strategic,O
objectives,O
and,O
corporate,O
and,O
segment,O
financial,O
goals,O
.,O
,O
These,O
cash,O
incentives,O
are,O
intended,O
to,O
link,O
a,O
substantial,O
portion,O
of,O
executive,O
compensation,O
to,O
our,O
performance,O
and,O
provide,O
executive,O
officers,O
with,O
a,O
competitive,O
level,O
of,O
compensation,O
if,O
they,O
achieve,O
their,O
objectives,O
.,O
,O
Each,O
year,O
",",O
the,O
Compensation,O
Committee,O
adopts,O
guidelines,O
pursuant,O
to,O
which,O
it,O
calculates,O
the,O
annual,O
cash,O
incentive,O
awards,O
available,O
to,O
our,O
Named,O
Executive,O
Officers,O
",",O
subject,O
to,O
the,O
Compensation,O
Committee,O
s,O
oversight,O
and,O
modification,O
.,O
,O
The,O
Compensation,O
Committee,O
believes,O
that,O
our,O
annual,O
incentive,O
program,O
provides,O
our,O
Named,O
Executive,O
Officers,O
with,O
a,O
team,O
incentive,O
to,O
both,O
enhance,O
our,O
financial,O
performance,O
and,O
perform,O
at,O
the,O
highest,O
level,O
.,O
,O
The,O
terms,O
of,O
these,O
programs,O
are,O
not,O
contained,O
in,O
a,O
formal,O
written,O
plan,O
.,O
,O
The,O
Compensation,O
Committee,O
met,O
in,O
February,O
2010,O
to,O
discuss,O
the,O
annual,O
cash,O
incentive,O
program,O
for,O
Mr.,O
Bisaro,I-PERSON
for,O
fiscal,O
year,O
2010,O
.,O
,O
At,O
this,O
meeting,O
",",O
the,O
Compensation,O
Committee,O
reviewed,O
the,O
then-most,O
recent,O
F.W.,I-BUSINESS
Cook,I-BUSINESS
competitive,O
pay,O
assessment,O
for,O
its,O
chief,O
executive,O
officer,O
from,O
February,O
2010,O
",",O
which,O
reflects,O
the,O
fact,O
that,O
the,O
average,O
bonus,O
payment,O
for,O
chief,O
executive,O
officers,O
of,O
companies,O
in,O
our,O
peer,O
group,O
in,O
that,O
assessment,O
was,O
approximately,O
120,O
%,O
of,O
their,O
base,O
salary,O
.,O
,O
Bisaro,I-PERSON
s,O
target,O
bonus,O
has,O
historically,O
been,O
set,O
at,O
approximately,O
100,O
%,O
of,O
his,O
salary,O
and,O
the,O
Compensation,O
Committee,O
determined,O
that,O
this,O
continued,O
to,O
be,O
an,O
appropriate,O
amount,O
on,O
the,O
basis,O
of,O
the,O
F.W.,I-BUSINESS
Cook,I-BUSINESS
competitive,O
pay,O
assessment,O
",",O
the,O
Compensation,O
Committee,O
s,O
ability,O
to,O
adjust,O
Mr.,O
Bisaro,I-PERSON
s,O
target,O
bonus,O
to,O
reflect,O
his,O
performance,O
",",O
and,O
the,O
opportunities,O
provided,O
to,O
Mr.,O
Bisaro,I-PERSON
from,O
time,O
to,O
time,O
to,O
earn,O
a,O
special,O
bonus,O
in,O
certain,O
instances,O
.,O
,O
The,O
Compensation,O
Committee,O
also,O
considered,O
our,O
historical,O
and,O
projected,O
revenues,O
and,O
Adjusted,O
EBITDA,O
relative,O
to,O
the,O
appropriate,O
cash,O
incentives,O
for,O
Mr.,O
Bisaro,I-PERSON
to,O
achieve,O
those,O
projections,O
.,O
,O
For,O
the,O
purpose,O
of,O
measuring,O
Corporate,O
Financial,O
Performance,O
",",O
Adjusted,O
EBITDA,O
meant,O
our,O
earnings,O
before,O
interest,O
",",O
taxes,O
",",O
depreciation,O
and,O
amortization,O
",",O
adjusted,O
for,O
share-based,O
compensation,O
",",O
acquisition,O
or,O
licensing,O
related,O
charges,O
",",O
restructuring,O
charges,O
",",O
litigation,O
gains,O
or,O
losses,O
",",O
charges,O
associated,O
with,O
our,O
global,O
supply,O
chain,O
initiative,O
",",O
non-cash,O
charges,O
",",O
gains,O
or,O
losses,O
on,O
debt,O
repurchase,O
",",O
gains,O
or,O
losses,O
on,O
sales,O
of,O
operating,O
assets,O
or,O
securities,O
and,O
such,O
other,O
special,O
items,O
as,O
determined,O
at,O
the,O
discretion,O
of,O
our,O
Board,O
of,O
Directors,O
.,O
,O
The,O
Adjusted,O
EBITDA,O
targets,O
for,O
Mr.,O
Bisaro,I-PERSON
are,O
pre-established,O
by,O
the,O
Compensation,O
Committee,O
at,O
the,O
commencement,O
of,O
the,O
year,O
and,O
are,O
the,O
same,O
targets,O
as,O
established,O
for,O
the,O
Corporate,O
Financial,O
Performance,O
measure,O
under,O
our,O
annual,O
cash,O
bonus,O
program,O
for,O
our,O
other,O
executive,O
officers,O
.,O
,O
A,O
reconciliation,O
of,O
Adjusted,O
EBITDA,O
to,O
net,O
income,O
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
can,O
be,O
found,O
on,O
our,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
furnished,O
to,O
the,O
SEC,I-GOVERNMENT
on,O
February,O
15,O
",",O
2011,O
.,O
,O
Based,O
on,O
the,O
factors,O
above,O
",",O
the,O
Compensation,O
Committee,O
adopted,O
an,O
annual,O
cash,O
incentive,O
program,O
pursuant,O
to,O
which,O
Mr.,O
Bisaro,I-PERSON
was,O
eligible,O
to,O
receive,O
a,O
target,O
cash,O
bonus,O
of,O
$,O
1,O
million,O
",",O
of,O
which,O
$,O
"700,000",O
was,O
based,O
upon,O
our,O
financial,O
performance,O
in,O
2010,O
as,O
measured,O
by,O
Adjusted,O
EBITDA,O
against,O
pre-established,O
targets,O
",",O
and,O
$,O
"300,000",O
was,O
at,O
the,O
discretion,O
of,O
the,O
Compensation,O
Committee,O
",",O
taking,O
into,O
account,O
Mr.,O
Bisaro,I-PERSON
s,O
success,O
in,O
2010,O
in,O
:,O
,O
The,O
$,O
"300,000",O
objective-based,O
portion,O
of,O
Mr.,O
Bisaro,I-PERSON
s,O
target,O
cash,O
bonus,O
was,O
subject,O
to,O
further,O
adjustment,O
by,O
the,O
Compensation,O
Committee,O
of,O
between,O
0,O
%,O
and,O
150,O
%,O
based,O
on,O
its,O
assessment,O
of,O
Mr.,O
Bisaro,I-PERSON
s,O
individual,O
performance,O
.,O
,O
The,O
Compensation,O
Committee,O
does,O
not,O
assign,O
a,O
specific,O
weight,O
to,O
any,O
given,O
goal,O
and,O
also,O
considers,O
other,O
relevant,O
factors,O
in,O
its,O
sole,O
discretion,O
in,O
making,O
awards,O
under,O
the,O
program,O
.,O
,O
In,O
March,O
2011,O
",",O
the,O
Compensation,O
Committee,O
evaluated,O
Mr.,O
Bisaro,I-PERSON
s,O
performance,O
under,O
the,O
measures,O
above,O
.,O
,O
Based,O
on,O
our,O
actual,O
Adjusted,O
EBITDA,O
for,O
2010,O
of,O
$,O
838.2,O
million,O
",",O
compared,O
to,O
target,O
Adjusted,O
EBITDA,O
of,O
$,O
788.3,O
million,O
",",O
and,O
the,O
Compensation,O
Committee,O
s,O
evaluation,O
of,O
Mr.,O
Bisaro,I-PERSON
s,O
achievement,O
of,O
the,O
goals,O
above,O
",",O
the,O
Compensation,O
Committee,O
awarded,O
a,O
cash,O
incentive,O
bonus,O
totaling,O
$,O
1.1,O
million,O
to,O
Mr.,O
Bisaro,I-PERSON
for,O
performance,O
in,O
2010,O
of,O
which,O
$,O
"775,000",O
was,O
based,O
on,O
the,O
Company,O
s,O
financial,O
performance,O
as,O
measured,O
by,O
Adjusted,O
EBITDA,O
",",O
and,O
$,O
"325,000",O
was,O
based,O
on,O
his,O
individual,O
performance,O
.,O
,O
The,O
Compensation,O
Committee,O
revised,O
the,O
annual,O
cash,O
incentive,O
program,O
for,O
Mr.,O
Bisaro,I-PERSON
for,O
fiscal,O
year,O
2011,O
.,O
,O
Specifically,O
",",O
under,O
the,O
2011,O
program,O
",",O
Mr.,O
Bisaro,I-PERSON
will,O
be,O
eligible,O
to,O
receive,O
a,O
target,O
cash,O
bonus,O
of,O
$,O
1.2,O
million,O
based,O
upon,O
our,O
financial,O
performance,O
in,O
2011,O
as,O
measured,O
by,O
Adjusted,O
EBITDA,O
.,O
,O
Bisaro,I-PERSON
s,O
actual,O
bonus,O
with,O
respect,O
to,O
2011,O
will,O
be,O
further,O
subject,O
to,O
adjustment,O
by,O
the,O
Compensation,O
Committee,O
to,O
be,O
between,O
0,O
%,O
and,O
150,O
%,O
of,O
the,O
$,O
1.2,O
million,O
target,O
amount,O
based,O
on,O
the,O
Compensation,O
Committee,O
s,O
assessment,O
of,O
Mr.,O
Bisaro,I-PERSON
s,O
success,O
in,O
implementing,O
the,O
following,O
strategic,O
goals,O
for,O
2011,O
:,O
,O
The,O
Compensation,O
Committee,O
will,O
determine,O
whether,O
and,O
to,O
what,O
extent,O
a,O
bonus,O
will,O
be,O
paid,O
to,O
Mr.,O
Bisaro,I-PERSON
for,O
fiscal,O
year,O
2011,O
after,O
the,O
end,O
of,O
2011,O
.,O
,O
Pursuant,O
to,O
Mr.,O
Bisaro,I-PERSON
s,O
employment,O
agreement,O
with,O
the,O
Company,O
",",O
in,O
the,O
event,O
of,O
a,O
significant,O
restatement,O
of,O
the,O
Company,O
s,O
financial,O
statements,O
(,O
other,O
than,O
due,O
to,O
a,O
change,O
in,O
generally,O
accepted,O
accounting,O
rules,O
or,O
their,O
interpretation,O
by,O
the,O
Company,O
s,O
auditors,O
",",O
or,O
as,O
a,O
result,O
of,O
events,O
the,O
Board,O
determines,O
were,O
beyond,O
Mr.,O
Bisaro,I-PERSON
s,O
control,O
and,O
responsibility,O
),O
occurring,O
at,O
any,O
time,O
up,O
to,O
three,O
years,O
following,O
the,O
termination,O
of,O
Mr.,O
Bisaro,I-PERSON
s,O
employment,O
with,O
the,O
Company,O
",",O
the,O
Board,O
will,O
review,O
all,O
compensation,O
that,O
was,O
made,O
to,O
the,O
Executive,O
on,O
the,O
basis,O
of,O
having,O
met,O
or,O
exceeded,O
specific,O
performance,O
targets,O
for,O
performance,O
periods,O
beginning,O
after,O
January,O
1,O
",",O
2007,O
which,O
occur,O
during,O
the,O
restatement,O
period,O
.,O
,O
To,O
the,O
extent,O
permitted,O
by,O
applicable,O
law,O
",",O
the,O
board,O
will,O
seek,O
to,O
recoup,O
from,O
Mr.,O
Bisaro,I-PERSON
the,O
amount,O
by,O
which,O
his,O
incentive,O
compensation,O
for,O
the,O
relevant,O
period,O
exceeded,O
the,O
lower,O
payment,O
he,O
would,O
have,O
received,O
based,O
on,O
the,O
restated,O
financial,O
results,O
on,O
a,O
net,O
after-tax,O
basis,O
",",O
plus,O
a,O
reasonable,O
rate,O
of,O
interest,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
Board,O
shall,O
not,O
seek,O
to,O
recoup,O
incentive,O
compensation,O
paid,O
more,O
than,O
three,O
(,O
3,O
),O
years,O
before,O
the,O
date,O
such,O
restatement,O
is,O
disclosed,O
.,O
,O
The,O
foregoing,O
would,O
apply,O
to,O
amounts,O
received,O
by,O
Mr.,O
Bisaro,I-PERSON
in,O
the,O
form,O
of,O
both,O
his,O
annual,O
cash,O
incentive,O
award,O
and,O
his,O
performance-based,O
equity,O
awards,O
.,O
,O
The,O
Compensation,O
Committee,O
met,O
in,O
February,O
2010,O
to,O
discuss,O
the,O
annual,O
cash,O
incentive,O
program,O
for,O
each,O
of,O
our,O
Named,O
Executive,O
Officers,O
",",O
other,O
than,O
our,O
chief,O
executive,O
officer,O
",",O
for,O
fiscal,O
year,O
2010,O
.,O
,O
At,O
this,O
meeting,O
",",O
the,O
Compensation,O
Committee,O
reviewed,O
the,O
then-most,O
recent,O
F.W.,I-BUSINESS
Cook,I-BUSINESS
competitive,O
pay,O
assessment,O
for,O
our,O
Named,O
Executive,O
Officers,O
(,O
other,O
than,O
the,O
chief,O
executive,O
officer,O
),O
from,O
February,O
2010,O
.,O
,O
Based,O
on,O
this,O
review,O
",",O
the,O
Compensation,O
Committee,O
established,O
2010,O
annual,O
cash,O
bonus,O
targets,O
for,O
each,O
of,O
our,O
Named,O
Executive,O
Officers,O
",",O
other,O
than,O
our,O
chief,O
executive,O
officer,O
",",O
expressed,O
as,O
a,O
percentage,O
of,O
such,O
Named,O
Executive,O
Officer,O
s,O
base,O
salary,O
.,O
,O
The,O
resulting,O
target,O
bonus,O
percentages,O
were,O
:,O
50,O
%,O
for,O
Mr.,O
Joyce,I-PERSON
;,O
60,O
%,O
for,O
Mr.,O
Wilkinson,I-PERSON
;,O
50,O
%,O
for,O
Mr.,O
Stewart,I-PERSON
;,O
and,O
50,O
%,O
for,O
Mr.,O
Buchen,I-PERSON
",",O
which,O
are,O
the,O
same,O
percentages,O
in,O
place,O
for,O
the,O
2009,O
bonus,O
program,O
.,O
,O
Stewart,I-PERSON
s,O
target,O
bonus,O
percentage,O
increased,O
from,O
50,O
%,O
to,O
60,O
%,O
effective,O
July,O
28,O
",",O
2010,O
in,O
connection,O
with,O
his,O
promotion,O
to,O
Executive,O
Vice,O
President,O
",",O
Global,O
Operations,O
.,O
,O
We,O
determined,O
the,O
target,O
annual,O
cash,O
incentive,O
award,O
for,O
Mr.,O
Stewart,I-PERSON
in,O
his,O
new,O
position,O
by,O
reference,O
to,O
factors,O
including,O
(,O
i,O
),O
the,O
F.W.,I-BUSINESS
Cook,I-BUSINESS
competitive,O
pay,O
assessment,O
",",O
(,O
ii,O
),O
his,O
compensation,O
history,O
and,O
the,O
need,O
to,O
offer,O
market,O
competitive,O
compensation,O
packages,O
to,O
recruit,O
and,O
retain,O
him,O
and,O
(,O
iii,O
),O
the,O
nature,O
of,O
the,O
roles,O
and,O
responsibilities,O
he,O
would,O
be,O
expected,O
to,O
assume,O
.,O
,O
The,O
bonus,O
actually,O
paid,O
to,O
these,O
Named,O
Executive,O
Officers,O
depended,O
primarily,O
on,O
our,O
financial,O
performance,O
in,O
2010,O
as,O
measured,O
by,O
pre-established,O
Adjusted,O
EBITDA,O
targets,O
",",O
which,O
we,O
refer,O
to,O
as,O
Corporate,O
Financial,O
Performance,O
.,O
,O
Because,O
their,O
responsibilities,O
relate,O
to,O
the,O
Company,O
as,O
a,O
whole,O
rather,O
than,O
a,O
particular,O
business,O
segment,O
",",O
the,O
actual,O
bonus,O
for,O
each,O
of,O
our,O
Named,O
Executive,O
Officers,O
other,O
than,O
Mr.,O
Wilkinson,I-PERSON
is,O
based,O
on,O
Corporate,O
Financial,O
Performance,O
",",O
without,O
reference,O
to,O
the,O
performance,O
of,O
a,O
specific,O
business,O
segment,O
.,O
,O
Accordingly,O
",",O
the,O
initial,O
adjustment,O
to,O
the,O
target,O
bonus,O
for,O
each,O
of,O
our,O
Named,O
Executive,O
Officers,O
other,O
than,O
Mr.,O
Wilkinson,I-PERSON
is,O
made,O
on,O
the,O
basis,O
of,O
a,O
multiple,O
reflecting,O
only,O
Corporate,O
Financial,O
Performance,O
.,O
,O
In,O
the,O
case,O
of,O
Mr.,O
Wilkinson,I-PERSON
",",O
however,O
",",O
50,O
%,O
of,O
his,O
bonus,O
opportunity,O
is,O
based,O
on,O
our,O
overall,O
Corporate,O
Financial,O
Performance,O
and,O
50,O
%,O
is,O
based,O
on,O
the,O
contribution,O
of,O
the,O
Global,O
Brands,O
business,O
segment,O
which,O
he,O
leads,O
",",O
which,O
we,O
refer,O
to,O
as,O
Segment,O
Contribution,O
.,O
,O
Accordingly,O
",",O
his,O
target,O
bonus,O
amount,O
is,O
first,O
adjusted,O
by,O
a,O
blended,O
multiple,O
reflecting,O
",",O
on,O
a,O
50-50,O
basis,O
",",O
actual,O
corporate,O
financial,O
performance,O
and,O
the,O
financial,O
performance,O
of,O
the,O
Global,O
Brands,O
segment,O
.,O
,O
The,O
final,O
bonus,O
payable,O
to,O
each,O
Named,O
Executive,O
Officer,O
is,O
then,O
subject,O
to,O
further,O
adjustment,O
",",O
based,O
on,O
a,O
multiplier,O
of,O
0,O
%,O
to,O
150,O
%,O
of,O
the,O
target,O
bonus,O
opportunity,O
to,O
reflect,O
the,O
evaluation,O
of,O
the,O
individual,O
performance,O
of,O
the,O
Named,O
Executive,O
Officer,O
during,O
2010,O
as,O
determined,O
by,O
our,O
chief,O
executive,O
officer,O
based,O
on,O
the,O
executive,O
s,O
achievements,O
during,O
2010,O
",",O
which,O
we,O
refer,O
to,O
as,O
Individual,O
Performance,O
.,O
,O
Our,O
chief,O
executive,O
officer,O
s,O
evaluation,O
of,O
each,O
Named,O
Executive,O
Officer,O
s,O
Individual,O
Performance,O
is,O
based,O
on,O
a,O
combination,O
of,O
subjective,O
and,O
objective,O
performance,O
measures,O
relating,O
to,O
overall,O
corporate,O
and,O
segment,O
performance,O
.,O
,O
No,O
specific,O
weight,O
is,O
assigned,O
to,O
any,O
of,O
these,O
measures,O
.,O
,O
Corporate,O
Financial,O
Performance,O
.,O
,O
The,O
Compensation,O
Committee,O
measures,O
Corporate,O
Financial,O
Performance,O
through,O
Adjusted,O
EBITDA,O
",",O
which,O
it,O
believes,O
is,O
the,O
best,O
indicator,O
of,O
such,O
performance,O
because,O
it,O
facilitates,O
analysis,O
by,O
management,O
and,O
investors,O
in,O
evaluating,O
the,O
Company,O
s,O
financial,O
performance,O
and,O
comparing,O
it,O
against,O
companies,O
in,O
its,O
peer,O
group,O
.,O
,O
Adjusted,O
EBITDA,O
milestones,O
necessary,O
for,O
full,O
or,O
partial,O
funding,O
of,O
the,O
annual,O
incentive,O
award,O
for,O
Corporate,O
Financial,O
Performance,O
.,O
,O
Based,O
on,O
the,O
Company,O
s,O
2010,O
actual,O
Adjusted,O
EBITDA,O
of,O
$,O
838.2,O
million,O
and,O
target,O
Adjusted,O
EBITDA,O
of,O
$,O
788.3,O
million,O
",",O
annual,O
incentive,O
awards,O
for,O
Corporate,O
Financial,O
Performance,O
were,O
funded,O
at,O
110.6,O
%,O
of,O
target,O
bonus,O
opportunity,O
.,O
,O
Between,O
threshold,O
and,O
maximum,O
funding,O
were,O
intermediate,O
levels,O
of,O
funding,O
that,O
were,O
generally,O
proportionate,O
to,O
corresponding,O
Adjusted,O
EBITDA,O
milestones,O
.,O
,O
The,O
contribution,O
to,O
our,O
overall,O
corporate,O
financial,O
performance,O
by,O
our,O
Global,O
Generics,O
",",O
Global,O
Brands,O
and,O
Distribution,O
business,O
segments,O
is,O
given,O
significant,O
weight,O
in,O
determining,O
the,O
overall,O
cash,O
incentive,O
award,O
available,O
to,O
members,O
of,O
these,O
business,O
segments,O
",",O
including,O
Mr.,O
.,O
,O
This,O
weighting,O
recognizes,O
that,O
each,O
business,O
segment,O
has,O
its,O
own,O
measures,O
of,O
performance,O
and,O
achievement,O
that,O
may,O
differ,O
from,O
overall,O
corporate,O
measures,O
or,O
from,O
the,O
measures,O
used,O
by,O
our,O
other,O
segments,O
.,O
,O
The,O
Compensation,O
Committee,O
believes,O
that,O
using,O
these,O
relative,O
measures,O
of,O
performance,O
is,O
key,O
to,O
specifically,O
rewarding,O
the,O
performance,O
of,O
our,O
executives,O
in,O
these,O
segments,O
.,O
,O
For,O
the,O
purpose,O
of,O
measuring,O
Segment,O
Contribution,O
",",O
Adjusted,O
Contribution,O
meant,O
a,O
business,O
segment,O
s,O
contribution,O
to,O
our,O
operating,O
profit,O
as,O
reported,O
in,O
our,O
filings,O
with,O
the,O
SEC,I-GOVERNMENT
adjusted,O
for,O
any,O
reconciling,O
item,O
of,O
the,O
relevant,O
segment,O
that,O
was,O
excluded,O
in,O
determining,O
Adjusted,O
EBITDA,O
.,O
,O
The,O
calculation,O
of,O
the,O
Adjusted,O
Contribution,O
of,O
our,O
Distribution,O
business,O
segment,O
is,O
subject,O
to,O
an,O
additional,O
adjustment,O
to,O
reflect,O
its,O
sale,O
of,O
the,O
Company,O
s,O
products,O
.,O
,O
In,O
determining,O
the,O
portion,O
of,O
a,O
Named,O
Executive,O
Officer,O
s,O
annual,O
incentive,O
award,O
attributable,O
to,O
Adjusted,O
Contribution,O
",",O
the,O
Compensation,O
Committee,O
uses,O
a,O
performance,O
grid,O
that,O
establishes,O
threshold,O
",",O
target,O
and,O
maximum,O
contribution,O
levels,O
for,O
each,O
of,O
our,O
business,O
segments,O
",",O
which,O
has,O
the,O
same,O
payout,O
ratios,O
in,O
the,O
grid,O
above,O
under,O
Corporate,O
Financial,O
Performance,O
.,O
,O
The,O
Target,O
Adjusted,O
Contribution,O
level,O
in,O
2010,O
was,O
set,O
above,O
actual,O
Adjusted,O
Contribution,O
in,O
fiscal,O
2009,O
for,O
the,O
Generic,O
business,O
segment,O
.,O
,O
For,O
our,O
Branded,O
business,O
segment,O
",",O
the,O
Target,O
Adjusted,O
Contribution,O
level,O
in,O
2010,O
was,O
set,O
below,O
the,O
actual,O
Adjusted,O
Contribution,O
in,O
fiscal,O
2009,O
for,O
the,O
Global,O
Brands,O
business,O
segment,O
.,O
,O
This,O
decrease,O
in,O
the,O
Target,O
Contribution,O
level,O
assigned,O
for,O
the,O
Global,O
Brands,O
business,O
segment,O
was,O
based,O
primarily,O
on,O
the,O
anticipated,O
decline,O
in,O
revenues,O
from,O
the,O
loss,O
of,O
the,O
Ferrlecit®,I-MISCELLANEOUS
,O
product,O
as,O
a,O
result,O
of,O
the,O
expiration,O
of,O
our,O
distribution,O
rights,O
for,O
Ferrlecit®,I-MISCELLANEOUS
,O
on,O
December,O
31,O
",",O
2009,O
.,O
,O
Based,O
on,O
the,O
Global,O
Brands,O
business,O
segment,O
s,O
actual,O
Adjusted,O
Contribution,O
in,O
2010,O
of,O
$,O
103.9,O
million,O
and,O
target,O
2010,O
Adjusted,O
Contribution,O
of,O
$,O
113.7,O
million,O
",",O
the,O
portion,O
of,O
Mr.,O
Wilkinson,I-PERSON
s,O
annual,O
incentive,O
award,O
based,O
on,O
the,O
financial,O
performance,O
of,O
the,O
Global,O
Brands,O
business,O
segment,O
was,O
funded,O
at,O
79.7,O
%,O
of,O
target,O
bonus,O
opportunity,O
.,O
,O
The,O
Compensation,O
Committee,O
also,O
recognizes,O
that,O
Individual,O
Performance,O
is,O
a,O
key,O
element,O
to,O
consider,O
in,O
determining,O
the,O
overall,O
cash,O
incentive,O
award,O
available,O
to,O
an,O
executive,O
.,O
,O
To,O
this,O
end,O
",",O
our,O
chief,O
executive,O
officer,O
reviews,O
the,O
performance,O
of,O
each,O
of,O
our,O
executive,O
officers,O
on,O
the,O
basis,O
of,O
specific,O
objective,O
and,O
subjective,O
factors,O
and,O
",",O
with,O
the,O
assistance,O
of,O
our,O
human,O
resources,O
department,O
",",O
makes,O
recommendations,O
to,O
the,O
Compensation,O
Committee,O
concerning,O
compensation,O
of,O
the,O
Named,O
Executive,O
Officers,O
",",O
including,O
with,O
respect,O
to,O
adjustments,O
to,O
their,O
target,O
cash,O
bonus,O
payments,O
.,O
,O
In,O
2010,O
",",O
such,O
adjustment,O
to,O
reflect,O
Individual,O
Performance,O
could,O
have,O
been,O
a,O
multiplier,O
ranging,O
from,O
0,O
%,O
to,O
150,O
%,O
of,O
a,O
Named,O
Executive,O
Officer,O
s,O
target,O
bonus,O
in,O
determining,O
the,O
annual,O
cash,O
incentive,O
award,O
due,O
to,O
each,O
of,O
our,O
Named,O
Executive,O
Officers,O
.,O
,O
While,O
the,O
Compensation,O
Committee,O
considers,O
these,O
recommendations,O
in,O
determining,O
annual,O
cash,O
incentive,O
awards,O
",",O
it,O
may,O
modify,O
any,O
such,O
recommendations,O
at,O
its,O
discretion,O
.,O
,O
In,O
March,O
2011,O
",",O
the,O
Compensation,O
Committee,O
awarded,O
cash,O
bonuses,O
in,O
accordance,O
with,O
the,O
objective,O
results,O
and,O
factors,O
discussed,O
above,O
to,O
Mr.,O
Joyce,I-PERSON
of,O
$,O
"273,765",O
",",O
Mr.,O
Wilkinson,I-PERSON
of,O
$,O
"398,057",O
",",O
Mr.,O
Stewart,I-PERSON
of,O
$,O
"414,750",O
",",O
and,O
Mr.,O
Buchen,I-PERSON
of,O
$,O
"330,195",O
.,O
,O
Our,O
2011,O
cash,O
incentive,O
award,O
program,O
is,O
substantially,O
similar,O
to,O
our,O
2010,O
program,O
",",O
but,O
features,O
financial,O
targets,O
and,O
thresholds,O
for,O
Adjusted,O
EBITDA,O
and,O
segment,O
contribution,O
based,O
on,O
our,O
2011,O
operating,O
plan,O
as,O
approved,O
by,O
our,O
Board,O
of,O
Directors,O
.,O
,O
Meeting,O
and,O
exceeding,O
these,O
targets,O
will,O
require,O
consistent,O
and,O
superior,O
performance,O
by,O
us,O
",",O
each,O
of,O
our,O
business,O
segments,O
and,O
our,O
Named,O
Executive,O
Officers,O
.,O
,O
The,O
Compensation,O
Committee,O
awarded,O
Mr.,O
Bisaro,I-PERSON
a,O
special,O
bonus,O
of,O
$,O
"400,000",O
for,O
his,O
efforts,O
in,O
expanding,O
our,O
international,O
operations,O
including,O
the,O
integration,O
of,O
the,O
Arrow,I-BUSINESS
Group,I-BUSINESS
.,O
,O
Our,O
Named,O
Executive,O
Officers,O
generally,O
receive,O
equity,O
based,O
grants,O
when,O
they,O
join,O
us,O
",",O
upon,O
promotions,O
and,O
generally,O
thereafter,O
as,O
part,O
of,O
the,O
Compensation,O
Committee,O
s,O
determination,O
of,O
the,O
executive,O
officers,O
annual,O
total,O
compensation,O
on,O
annual,O
dates,O
scheduled,O
in,O
advance,O
.,O
,O
Annual,O
equity,O
grants,O
are,O
determined,O
in,O
the,O
first,O
quarter,O
of,O
each,O
calendar,O
year,O
.,O
,O
All,O
equity,O
awards,O
are,O
approved,O
before,O
or,O
on,O
the,O
date,O
of,O
grant,O
.,O
,O
In,O
determining,O
the,O
size,O
of,O
equity-based,O
grants,O
",",O
the,O
Compensation,O
Committee,O
considers,O
the,O
number,O
of,O
shares,O
available,O
under,O
the,O
Amended,I-MISCELLANEOUS
Restated,I-MISCELLANEOUS
2001,I-MISCELLANEOUS
Incentive,I-MISCELLANEOUS
Award,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
of,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
Incentive,O
Award,O
Plan,O
),O
",",O
the,O
potential,O
dilutive,O
impact,O
of,O
such,O
grants,O
on,O
our,O
stockholders,O
",",O
the,O
individual,O
s,O
position,O
with,O
us,O
",",O
the,O
appropriate,O
allocation,O
of,O
such,O
grants,O
based,O
on,O
individual,O
and,O
corporate,O
performance,O
",",O
and,O
the,O
level,O
of,O
grants,O
awarded,O
by,O
our,O
peers,O
.,O
,O
The,O
Compensation,O
Committee,O
believes,O
that,O
equity-based,O
awards,O
provide,O
a,O
valuable,O
tool,O
for,O
aligning,O
the,O
interests,O
of,O
management,O
with,O
our,O
stockholders,O
and,O
focusing,O
management,O
s,O
attention,O
on,O
our,O
long-term,O
growth,O
.,O
,O
In,O
addition,O
",",O
the,O
Compensation,O
Committee,O
believes,O
that,O
equity-based,O
awards,O
are,O
essential,O
to,O
attract,O
and,O
retain,O
the,O
talented,O
professionals,O
and,O
managers,O
needed,O
for,O
our,O
continued,O
success,O
.,O
,O
In,O
order,O
to,O
better,O
align,O
the,O
interests,O
of,O
our,O
Board,O
and,O
management,O
with,O
those,O
of,O
our,O
stockholders,O
in,O
a,O
fair,O
and,O
reasonable,O
manner,O
",",O
as,O
well,O
as,O
to,O
implement,O
what,O
we,O
believe,O
is,O
a,O
corporate,O
governance,O
best,O
practice,O
",",O
we,O
have,O
also,O
adopted,O
stock,O
ownership,O
guidelines,O
for,O
our,O
senior,O
executives,O
and,O
directors,O
",",O
which,O
are,O
effective,O
commencing,O
in,O
2011,O
.,O
,O
Our,O
ownership,O
guidelines,O
require,O
our,O
(,O
i,O
),O
directors,O
to,O
hold,O
stock,O
in,O
the,O
Company,O
in,O
an,O
amount,O
at,O
least,O
equal,O
in,O
value,O
to,O
four,O
times,O
their,O
annual,O
base,O
director,O
s,O
fee,O
",",O
(,O
ii,O
),O
chief,O
executive,O
officer,O
to,O
hold,O
stock,O
in,O
the,O
Company,O
in,O
an,O
amount,O
at,O
least,O
equal,O
in,O
value,O
to,O
four,O
times,O
his,O
base,O
salary,O
;,O
(,O
iii,O
),O
executive,O
vice,O
presidents,O
(,O
including,O
Messrs.,O
Wilkinson,I-PERSON
",",O
Joyce,I-PERSON
",",O
Buchen,I-PERSON
and,O
Stewart,I-PERSON
),O
to,O
hold,O
stock,O
in,O
the,O
Company,O
in,O
an,O
amount,O
at,O
least,O
equal,O
in,O
value,O
to,O
twice,O
their,O
base,O
salary,O
and,O
(,O
iv,O
),O
senior,O
vice,O
presidents,O
to,O
hold,O
stock,O
in,O
the,O
Company,O
in,O
an,O
amount,O
at,O
least,O
equal,O
in,O
value,O
to,O
their,O
base,O
salary,O
.,O
,O
Under,O
our,O
guidelines,O
",",O
vested,O
and,O
unvested,O
restricted,O
stock,O
",",O
as,O
well,O
as,O
shares,O
of,O
stock,O
actually,O
owned,O
by,O
a,O
director,O
or,O
an,O
executive,O
",",O
are,O
included,O
in,O
the,O
calculation,O
.,O
,O
After,O
further,O
considering,O
the,O
cost,O
and,O
dilutive,O
impact,O
of,O
our,O
long,O
term,O
equity,O
awards,O
",",O
the,O
marginal,O
retention,O
value,O
we,O
were,O
achieving,O
through,O
our,O
stock,O
options,O
and,O
market,O
trends,O
relating,O
to,O
long-term,O
incentive,O
compensation,O
",",O
the,O
Compensation,O
Committee,O
revised,O
our,O
approach,O
to,O
long-term,O
equity,O
compensation,O
in,O
2007,O
.,O
,O
This,O
revised,O
approach,O
",",O
which,O
remained,O
in,O
effect,O
through,O
2010,O
",",O
had,O
two,O
key,O
components,O
.,O
,O
First,O
",",O
the,O
Compensation,O
Committee,O
shifted,O
our,O
annual,O
long-term,O
equity,O
awards,O
away,O
from,O
a,O
mix,O
of,O
options,O
and,O
restricted,O
stock,O
to,O
restricted,O
stock,O
awards,O
only,O
.,O
,O
Second,O
",",O
the,O
Compensation,O
Committee,O
split,O
our,O
restricted,O
stock,O
awards,O
into,O
two,O
classes,O
:,O
(,O
1,O
),O
Time,O
Awards,O
that,O
are,O
based,O
on,O
individual,O
and,O
corporate,O
performance,O
factors,O
and,O
(,O
2,O
),O
Performance,O
Awards,O
pursuant,O
to,O
which,O
each,O
Named,O
Executive,O
Officer,O
has,O
the,O
right,O
to,O
receive,O
a,O
number,O
of,O
shares,O
of,O
restricted,O
stock,O
granted,O
after,O
year,O
end,O
based,O
on,O
our,O
performance,O
against,O
the,O
same,O
Adjusted,O
EBITDA,O
targets,O
upon,O
which,O
our,O
annual,O
cash,O
incentive,O
compensation,O
program,O
is,O
based,O
.,O
,O
Any,O
restricted,O
stock,O
issued,O
pursuant,O
to,O
a,O
Performance,O
Award,O
vests,O
on,O
the,O
same,O
basis,O
as,O
the,O
Time,O
Awards,O
.,O
,O
The,O
Compensation,O
Committee,O
may,O
",",O
in,O
the,O
future,O
",",O
adjust,O
this,O
mix,O
of,O
award,O
types,O
or,O
approve,O
different,O
award,O
types,O
as,O
part,O
of,O
our,O
overall,O
long-term,O
equity,O
incentive,O
program,O
.,O
,O
Commencing,O
in,O
2011,O
",",O
we,O
have,O
further,O
developed,O
our,O
approach,O
to,O
equity,O
compensation,O
by,O
",",O
among,O
other,O
things,O
",",O
(,O
i,O
),O
granting,O
awards,O
based,O
on,O
fixed,O
dollar,O
value,O
rather,O
than,O
fixed,O
share,O
guidelines,O
and,O
(,O
ii,O
),O
linking,O
the,O
number,O
of,O
shares,O
actually,O
earned,O
even,O
more,O
strongly,O
to,O
financial,O
performance,O
and,O
the,O
creation,O
of,O
long-term,O
shareholder,O
value,O
.,O
,O
For,O
more,O
information,O
",",O
see,O
the,O
discussion,O
under,O
Changes,I-MISCELLANEOUS
in,I-MISCELLANEOUS
the,I-MISCELLANEOUS
Company,I-MISCELLANEOUS
s,I-MISCELLANEOUS
Long-Term,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
Incentive,I-MISCELLANEOUS
Program,I-MISCELLANEOUS
on,O
page,O
26,O
.,O
,O
As,O
part,O
of,O
our,O
total,O
compensation,O
program,O
the,O
Compensation,O
Committee,O
generally,O
grants,O
shares,O
of,O
restricted,O
stock,O
to,O
our,O
Named,O
Executive,O
Officers,O
on,O
an,O
annual,O
basis,O
(,O
the,O
Time,O
Awards,O
),O
.,O
,O
Each,O
Named,O
Executive,O
Officer,O
is,O
entitled,O
to,O
a,O
grant,O
of,O
Time,O
Award,O
shares,O
within,O
a,O
range,O
that,O
varies,O
in,O
accordance,O
with,O
the,O
Named,O
Executive,O
Officer,O
s,O
position,O
of,O
responsibility,O
with,O
us,O
.,O
,O
The,O
Compensation,O
Committee,O
determines,O
the,O
specific,O
number,O
of,O
Time,O
Awards,O
to,O
be,O
granted,O
to,O
each,O
Named,O
Executive,O
Officer,O
based,O
on,O
our,O
performance,O
and,O
the,O
Compensation,O
Committee,O
s,O
evaluation,O
of,O
each,O
officer,O
s,O
individual,O
performance,O
",",O
taking,O
into,O
consideration,O
the,O
recommendation,O
of,O
our,O
chief,O
executive,O
officer,O
.,O
,O
In,O
recognition,O
of,O
their,O
performance,O
in,O
fiscal,O
2009,O
",",O
the,O
Compensation,O
Committee,O
awarded,O
Time,O
Awards,O
of,O
restricted,O
stock,O
in,O
February,O
2010,O
in,O
the,O
following,O
amounts,O
:,O
Mr.,O
Bisaro,I-PERSON
received,O
"36,850",O
restricted,O
shares,O
",",O
Mr.,O
Joyce,I-PERSON
received,O
"5,000",O
restricted,O
shares,O
",",O
Mr.,O
Wilkinson,I-PERSON
received,O
"9,000",O
restricted,O
shares,O
",",O
Mr.,O
,O
in,O
connection,O
with,O
his,O
joining,O
the,O
Company,O
in,O
November,O
",",O
2009,O
),O
and,O
Mr.,O
Buchen,I-PERSON
received,O
"7,500",O
restricted,O
shares,O
.,O
,O
The,O
amounts,O
of,O
these,O
grants,O
represent,O
Time,O
Award,O
dollar,O
values,O
based,O
mainly,O
on,O
peer,O
company,O
group,O
compensation,O
data,O
prepared,O
by,O
F.W,I-BUSINESS
.,I-BUSINESS
,O
The,O
Company,O
provides,O
performance-based,O
annual,O
equity,O
incentive,O
awards,O
to,O
our,O
chief,O
executive,O
officer,O
under,O
a,O
compensation,O
program,O
administered,O
by,O
the,O
Compensation,O
Committee,O
and,O
for,O
our,O
executive,O
officers,O
under,O
the,O
2010,I-MISCELLANEOUS
Senior,I-MISCELLANEOUS
Executive,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
Compensation,I-MISCELLANEOUS
Program,I-MISCELLANEOUS
.,O
,O
Under,O
these,O
programs,O
",",O
our,O
senior,O
executive,O
officers,O
",",O
including,O
our,O
Named,O
Executive,O
Officers,O
",",O
are,O
eligible,O
to,O
receive,O
an,O
award,O
of,O
shares,O
of,O
restricted,O
stock,O
based,O
on,O
the,O
Company,O
s,O
performance,O
during,O
the,O
fiscal,O
year,O
as,O
measured,O
by,O
Adjusted,O
EBITDA,O
.,O
,O
The,O
target,O
number,O
of,O
restricted,O
shares,O
to,O
be,O
awarded,O
to,O
a,O
Named,O
Executive,O
Officer,O
s,O
under,O
a,O
Performance,O
Award,O
is,O
equal,O
to,O
his,O
or,O
her,O
actual,O
Time,O
Share,O
award,O
granted,O
in,O
the,O
fiscal,O
year,O
for,O
which,O
performance,O
is,O
being,O
measured,O
.,O
,O
The,O
actual,O
number,O
of,O
restricted,O
shares,O
issued,O
by,O
the,O
Compensation,O
Committee,O
can,O
range,O
from,O
0,O
%,O
to,O
150,O
%,O
of,O
the,O
target,O
under,O
the,O
Performance,O
Award,O
for,O
each,O
of,O
our,O
Named,O
Executive,O
Officers,O
based,O
upon,O
our,O
financial,O
performance,O
for,O
the,O
fiscal,O
year,O
using,O
the,O
same,O
Adjusted,O
EBITDA,O
calculation,O
used,O
by,O
the,O
Compensation,O
Committee,O
in,O
determining,O
our,O
annual,O
cash,O
incentive,O
payouts,O
to,O
such,O
Named,O
Executive,O
Officer,O
.,O
,O
In,O
March,O
2011,O
",",O
the,O
Compensation,O
Committee,O
determined,O
our,O
financial,O
performance,O
in,O
2010,O
as,O
measured,O
by,O
Adjusted,O
EBITDA,O
resulted,O
in,O
a,O
payout,O
of,O
110.6,O
%,O
of,O
the,O
target,O
issuance,O
.,O
,O
Our,O
shares,O
of,O
restricted,O
stock,O
(,O
including,O
Time,O
Awards,O
and,O
shares,O
issued,O
pursuant,O
to,O
Performance,O
Awards,O
),O
generally,O
have,O
restrictions,O
on,O
resale,O
that,O
lapse,O
on,O
the,O
second,O
and,O
fourth,O
anniversaries,O
of,O
the,O
grant,O
date,O
.,O
,O
On,O
each,O
of,O
those,O
dates,O
50,O
%,O
of,O
the,O
total,O
award,O
s,O
restrictions,O
on,O
resale,O
lapse,O
",",O
contingent,O
on,O
the,O
continued,O
employment,O
with,O
us,O
by,O
the,O
Named,O
Executive,O
Officer,O
during,O
the,O
restriction,O
period,O
.,O
,O
In,O
the,O
future,O
",",O
the,O
Compensation,O
Committee,O
may,O
adjust,O
the,O
restrictions,O
on,O
resale,O
to,O
which,O
our,O
restricted,O
stock,O
is,O
subject,O
.,O
,O
The,O
Compensation,O
Committee,O
will,O
determine,O
whether,O
and,O
to,O
what,O
extent,O
Performance,O
Awards,O
will,O
be,O
awarded,O
for,O
fiscal,O
year,O
2011,O
after,O
the,O
end,O
of,O
2011,O
.,O
,O
No,O
equity,O
awards,O
were,O
granted,O
to,O
any,O
of,O
our,O
Named,O
Executive,O
Officers,O
in,O
2010,O
in,O
connection,O
with,O
hiring,O
or,O
promotion,O
.,O
,O
Prior,O
to,O
2008,O
",",O
we,O
awarded,O
stock,O
options,O
with,O
an,O
exercise,O
price,O
equal,O
to,O
the,O
last,O
closing,O
price,O
of,O
our,O
common,O
stock,O
on,O
the,O
NYSE,I-BUSINESS
on,O
the,O
day,O
of,O
the,O
award,O
grant,O
",",O
in,O
accordance,O
with,O
the,O
terms,O
of,O
our,O
Incentive,O
Award,O
Plan,O
.,O
,O
These,O
options,O
generally,O
have,O
a,O
term,O
of,O
10,O
years,O
and,O
generally,O
are,O
subject,O
to,O
a,O
four-year,O
ratable,O
vesting,O
schedule,O
.,O
,O
Vesting,O
rights,O
cease,O
upon,O
termination,O
of,O
employment,O
(,O
except,O
in,O
the,O
case,O
of,O
a,O
qualifying,O
termination,O
in,O
connection,O
with,O
a,O
change-in-control,O
",",O
in,O
which,O
case,O
vesting,O
rights,O
accelerate,O
upon,O
termination,O
of,O
employment,O
),O
and,O
exercise,O
rights,O
generally,O
cease,O
ninety,O
(,O
90,O
),O
days,O
after,O
the,O
date,O
of,O
termination,O
",",O
except,O
in,O
the,O
case,O
of,O
death,O
(,O
subject,O
to,O
a,O
one,O
year,O
limitation,O
),O
",",O
disability,O
or,O
retirement,O
(,O
see,O
Continued,I-MISCELLANEOUS
Vesting,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Equity,I-MISCELLANEOUS
Awards,I-MISCELLANEOUS
—,O
below,O
),O
.,O
,O
Prior,O
to,O
the,O
exercise,O
of,O
an,O
option,O
",",O
the,O
holder,O
has,O
no,O
rights,O
as,O
a,O
stockholder,O
with,O
respect,O
to,O
the,O
shares,O
subject,O
to,O
such,O
option,O
",",O
including,O
voting,O
rights,O
and,O
the,O
right,O
to,O
receive,O
dividends,O
or,O
dividend,O
equivalents,O
.,O
,O
We,O
did,O
not,O
grant,O
any,O
options,O
to,O
any,O
Named,O
Executive,O
Officers,O
in,O
2009,O
or,O
2010,O
.,O
,O
We,O
believe,O
the,O
term,O
and,O
vesting,O
schedule,O
of,O
our,O
stock,O
options,O
",",O
and,O
the,O
vesting,O
schedule,O
for,O
our,O
restricted,O
stock,O
awards,O
",",O
provide,O
additional,O
incentive,O
to,O
management,O
to,O
remain,O
with,O
the,O
Company,O
and,O
to,O
focus,O
on,O
long-term,O
growth,O
and,O
corporate,O
financial,O
performance,O
.,O
,O
The,O
Compensation,O
Committee,O
believes,O
it,O
is,O
important,O
to,O
recognize,O
tenured,O
service,O
to,O
us,O
",",O
to,O
encourage,O
retention,O
and,O
to,O
facilitate,O
retirement,O
planning,O
through,O
the,O
continued,O
vesting,O
of,O
some,O
or,O
all,O
unvested,O
equity,O
for,O
those,O
employees,O
that,O
have,O
met,O
pre-established,O
age,O
and,O
service,O
requirements,O
.,O
,O
This,O
continued,O
vesting,O
is,O
intended,O
to,O
reward,O
such,O
employees,O
for,O
their,O
long,O
service,O
to,O
the,O
Company,O
and,O
to,O
provide,O
an,O
incentive,O
for,O
executives,O
nearing,O
retirement,O
to,O
continue,O
to,O
make,O
decisions,O
that,O
are,O
in,O
the,O
long-term,O
interest,O
of,O
stockholders,O
.,O
,O
employment,O
terminates,O
with,O
the,O
Company,O
(,O
other,O
than,O
termination,O
for,O
cause,O
),O
",",O
provided,O
that,O
such,O
employee,O
is,O
(,O
i,O
),O
at,O
least,O
sixty,O
years,O
of,O
age,O
at,O
the,O
time,O
of,O
termination,O
from,O
the,O
Company,O
and,O
(,O
ii,O
),O
has,O
at,O
least,O
ten,O
years,O
of,O
consecutive,O
service,O
to,O
the,O
Company,O
as,O
a,O
full-time,O
employee,O
at,O
the,O
time,O
of,O
termination,O
.,O
,O
Commencing,O
in,O
2011,O
",",O
the,O
Compensation,O
Committee,O
",",O
with,O
the,O
advice,O
and,O
assistance,O
of,O
F.W.,I-BUSINESS
Cook,I-BUSINESS
and,O
senior,O
management,O
",",O
adopted,O
changes,O
in,O
the,O
design,O
of,O
our,O
long-term,O
equity,O
incentive,O
program,O
designed,O
to,O
",",O
among,O
other,O
things,O
",",O
transition,O
from,O
a,O
system,O
of,O
granting,O
equity,O
awards,O
according,O
to,O
fixed,O
share,O
number,O
guidelines,O
to,O
a,O
system,O
of,O
granting,O
awards,O
according,O
to,O
fixed,O
dollar,O
value,O
guidelines,O
for,O
the,O
equity,O
awarded,O
.,O
,O
We,O
shifted,O
to,O
fixed,O
dollar,O
awards,O
to,O
create,O
better,O
alignment,O
between,O
the,O
intended,O
target,O
value,O
of,O
awards,O
and,O
the,O
value,O
actually,O
delivered,O
on,O
the,O
grant,O
date,O
.,O
,O
Our,O
new,O
equity,O
incentive,O
program,O
also,O
places,O
a,O
strong,O
emphasis,O
on,O
earning,O
awards,O
based,O
on,O
pre-established,O
performance,O
criteria,O
for,O
our,O
senior,O
executives,O
by,O
linking,O
the,O
number,O
of,O
shares,O
that,O
they,O
can,O
earn,O
to,O
not,O
only,O
our,O
Adjusted,O
EBITDA,O
performance,O
",",O
but,O
also,O
to,O
our,O
relative,O
stock,O
price,O
performance,O
over,O
a,O
three,O
year,O
period,O
.,O
,O
Use,O
of,O
these,O
measures,O
balances,O
operational,O
and,O
market,O
performance,O
and,O
ensures,O
that,O
performance,O
against,O
each,O
measure,O
has,O
a,O
significant,O
effect,O
on,O
earned,O
compensation,O
.,O
,O
This,O
mix,O
focuses,O
the,O
executive,O
on,O
the,O
Company,O
s,O
strategic,O
business,O
goal,O
of,O
cash,O
generation,O
as,O
well,O
as,O
the,O
Company,O
s,O
performance,O
compared,O
to,O
a,O
broad,O
index,O
of,O
companies,O
.,O
,O
Prior,O
to,O
2011,O
",",O
the,O
equity,O
awards,O
granted,O
to,O
our,O
senior,O
management,O
",",O
including,O
our,O
Named,O
Executive,O
Officers,O
",",O
were,O
comprised,O
of,O
50,O
%,O
Time,O
Awards,O
and,O
50,O
%,O
Performance,O
Awards,O
.,O
,O
Beginning,O
in,O
2011,O
",",O
our,O
senior,O
management,O
will,O
receive,O
equity,O
awards,O
of,O
an,O
aggregate,O
target,O
dollar,O
value,O
based,O
on,O
dollar,O
value,O
guidelines,O
reflecting,O
peer,O
company,O
group,O
compensation,O
data,O
prepared,O
by,O
F.W.,I-BUSINESS
Cook,I-BUSINESS
",",O
subject,O
to,O
adjustment,O
for,O
individual,O
performance,O
.,O
,O
In,O
the,O
case,O
of,O
each,O
of,O
our,O
Named,O
Executive,O
Officers,O
",",O
the,O
aggregate,O
dollar,O
value,O
of,O
their,O
equity,O
award,O
will,O
be,O
allocated,O
in,O
equal,O
amounts,O
among,O
three,O
types,O
of,O
grants,O
:,O
(,O
i,O
),O
time-vested,O
individual,O
performance-based,O
restricted,O
stock,O
",",O
(,O
ii,O
),O
one-year,O
Company,O
performance-based,O
restricted,O
stock,O
and,O
(,O
iii,O
),O
three-year,O
Company,O
performance-based,O
restricted,O
stock,O
.,O
,O
We,O
discuss,O
each,O
of,O
these,O
types,O
of,O
grants,O
below,O
.,O
,O
Time-vested,O
individual,O
performance-based,O
restricted,O
stock,O
awards,O
granted,O
in,O
2011,O
are,O
similar,O
to,O
the,O
Time,O
Awards,O
described,O
above,O
.,O
,O
The,O
actual,O
number,O
of,O
shares,O
granted,O
will,O
be,O
determined,O
on,O
the,O
basis,O
of,O
the,O
Company,O
s,O
closing,O
stock,O
price,O
on,O
the,O
day,O
the,O
grants,O
are,O
determined,O
by,O
the,O
Compensation,O
Committee,O
.,O
,O
Once,O
granted,O
",",O
the,O
awards,O
will,O
vest,O
based,O
solely,O
on,O
continued,O
service,O
with,O
the,O
Company,O
",",O
with,O
50,O
%,O
vesting,O
on,O
each,O
of,O
the,O
second,O
and,O
fourth,O
anniversaries,O
of,O
the,O
grant,O
date,O
.,O
,O
Adjusted,O
EBITDA,O
Performance,O
Award,O
.,O
,O
The,O
one-year,O
Company,O
performance,O
restricted,O
stock,O
grant,O
(,O
the,O
Adjusted,O
EBITDA,O
Performance,O
Award,O
),O
is,O
similar,O
to,O
the,O
Performance,O
Awards,O
granted,O
in,O
2010,O
.,O
,O
The,O
Adjusted,O
EBITDA,O
Performance,O
Award,O
are,O
earned,O
based,O
on,O
Adjusted,O
EBITDA,O
performance,O
against,O
target,O
during,O
2011,O
.,O
,O
The,O
number,O
of,O
shares,O
that,O
can,O
be,O
earned,O
may,O
range,O
from,O
0,O
%,O
to,O
150,O
%,O
of,O
the,O
target,O
",",O
depending,O
on,O
performance,O
(,O
with,O
linear,O
interpolation,O
between,O
performance,O
levels,O
),O
as,O
follows,O
:,O
,O
Once,O
earned,O
",",O
Adjusted,O
EBITDA,O
Performance,O
Awards,O
will,O
continue,O
to,O
be,O
subject,O
to,O
time,O
based,O
vesting,O
of,O
50,O
%,O
on,O
each,O
of,O
the,O
second,O
and,O
fourth,O
anniversaries,O
of,O
the,O
beginning,O
of,O
the,O
1-year,O
performance,O
period,O
(,O
which,O
equates,O
to,O
one,O
and,O
three,O
years,O
following,O
the,O
conclusion,O
of,O
the,O
1-year,O
performance,O
period,O
",",O
respectively,O
),O
.,O
,O
TSR,O
Performance,O
Award,O
.,O
,O
The,O
performance,O
metric,O
for,O
the,O
three-year,O
Company,O
performance,O
restricted,O
stock,O
awards,O
(,O
TSR,O
Performance,O
Awards,O
),O
will,O
be,O
the,O
Company,O
s,O
relative,O
Total,O
Shareholder,O
Return,O
(,O
TSR,O
),O
for,O
the,O
3-year,O
performance,O
period,O
from,O
January,O
2011,O
through,O
December,O
2013,O
against,O
the,O
Company,O
s,O
peer,O
company,O
group,O
as,O
identified,O
in,O
the,O
Company,O
s,O
annual,O
proxy,O
statement,O
in,O
the,O
year,O
in,O
which,O
the,O
award,O
is,O
granted,O
.,O
,O
of,O
its,O
peer,O
company,O
group,O
during,O
the,O
relevant,O
period,O
.,O
,O
Earned,O
TSR,O
Performance,O
Awards,O
would,O
vest,O
at,O
the,O
end,O
of,O
the,O
3-year,O
performance,O
period,O
and,O
would,O
be,O
settled,O
as,O
soon,O
as,O
administratively,O
feasible,O
thereafter,O
.,O
,O
The,O
number,O
of,O
shares,O
that,O
may,O
be,O
earned,O
may,O
range,O
from,O
0,O
%,O
to,O
150,O
%,O
of,O
the,O
target,O
",",O
depending,O
on,O
performance,O
(,O
with,O
linear,O
interpolation,O
between,O
performance,O
levels,O
),O
as,O
follows,O
:,O
,O
To,O
ensure,O
tax,O
deductibility,O
of,O
the,O
awards,O
under,O
IRC,I-LEGISLATION/ACT
Section,O
162,O
(,O
m,O
),O
",",O
the,O
performance,O
goals,O
for,O
each,O
year,O
s,O
award,O
are,O
required,O
to,O
be,O
established,O
within,O
the,O
first,O
90,O
days,O
of,O
the,O
performance,O
period,O
.,O
,O
The,O
Compensation,O
Committee,O
s,O
decision,O
with,O
regard,O
to,O
performance,O
metrics,O
affects,O
only,O
the,O
current,O
year,O
awards,O
",",O
and,O
may,O
be,O
changed,O
for,O
future,O
awards,O
.,O
,O
We,O
provide,O
our,O
Named,O
Executive,O
Officers,O
with,O
perquisites,O
and,O
other,O
personal,O
benefits,O
that,O
we,O
and,O
the,O
Compensation,O
Committee,O
believe,O
have,O
a,O
business,O
purpose,O
",",O
are,O
reasonable,O
and,O
consistent,O
with,O
our,O
overall,O
compensation,O
program,O
and,O
better,O
enable,O
us,O
to,O
attract,O
and,O
retain,O
superior,O
employees,O
for,O
key,O
positions,O
.,O
,O
The,O
Compensation,O
Committee,O
believes,O
these,O
benefits,O
and,O
perquisites,O
provide,O
a,O
more,O
tangible,O
incentive,O
with,O
a,O
greater,O
perceived,O
value,O
than,O
an,O
equivalent,O
amount,O
of,O
cash,O
compensation,O
.,O
,O
The,O
Compensation,O
Committee,O
periodically,O
reviews,O
the,O
levels,O
of,O
perquisites,O
and,O
other,O
personal,O
benefits,O
provided,O
to,O
our,O
Named,O
Executive,O
Officers,O
.,O
,O
The,O
Named,O
Executive,O
Officers,O
are,O
provided,O
with,O
a,O
monthly,O
car,O
allowance,O
",",O
mandatory,O
annual,O
physical,O
exams,O
",",O
financial,O
planning,O
assistance,O
and,O
participation,O
in,O
the,O
plans,O
and,O
programs,O
described,O
below,O
under,O
the,O
heading,O
Other,I-MISCELLANEOUS
Benefits,I-MISCELLANEOUS
—,I-MISCELLANEOUS
Generally,I-MISCELLANEOUS
Available,I-MISCELLANEOUS
Benefits,I-MISCELLANEOUS
.,O
,O
Upon,O
relocation,O
",",O
Named,O
Executive,O
Officers,O
may,O
receive,O
",",O
at,O
the,O
discretion,O
of,O
the,O
Compensation,O
Committee,O
",",O
relocation,O
benefits,O
pursuant,O
to,O
applicable,O
Company,O
policies,O
.,O
,O
In,O
2010,O
",",O
Messrs.,O
Joyce,I-PERSON
and,O
Stewart,I-PERSON
received,O
such,O
relocation,O
benefits,O
.,O
,O
Joyce,I-PERSON
s,O
relocation,O
was,O
in,O
connection,O
with,O
his,O
promotion,O
to,O
the,O
Company,O
s,O
Senior,O
Vice,O
President,O
and,O
Chief,O
Financial,O
Officer,O
.,O
,O
Stewart,I-PERSON
s,O
relocation,O
was,O
in,O
connection,O
with,O
his,O
being,O
hired,O
by,O
the,O
Company,O
in,O
2009,O
.,O
,O
In,O
each,O
instance,O
",",O
the,O
Company,O
believes,O
that,O
providing,O
such,O
relocation,O
benefits,O
(,O
i,O
),O
is,O
consistent,O
with,O
market,O
practices,O
and,O
(,O
ii,O
),O
supports,O
its,O
goal,O
of,O
fostering,O
cohesion,O
and,O
communication,O
among,O
its,O
senior,O
executives,O
.,O
,O
The,O
car,O
allowance,O
is,O
intended,O
to,O
cover,O
expenses,O
related,O
to,O
the,O
lease,O
",",O
purchase,O
",",O
insurance,O
and,O
maintenance,O
of,O
a,O
vehicle,O
.,O
,O
It,O
is,O
provided,O
in,O
recognition,O
of,O
the,O
need,O
to,O
have,O
executive,O
officers,O
visit,O
customers,O
",",O
business,O
partners,O
and,O
other,O
stakeholders,O
in,O
order,O
to,O
fulfill,O
their,O
job,O
responsibilities,O
.,O
,O
The,O
mandatory,O
annual,O
physical,O
exams,O
are,O
required,O
to,O
monitor,O
the,O
physical,O
health,O
of,O
our,O
executives,O
and,O
to,O
discover,O
potential,O
health,O
issues,O
that,O
could,O
interfere,O
with,O
their,O
duties,O
at,O
the,O
company,O
.,O
,O
The,O
financial,O
planning,O
assistance,O
covers,O
expenses,O
resulting,O
from,O
financial,O
",",O
estate,O
and,O
tax,O
planning,O
.,O
,O
We,O
believe,O
that,O
it,O
is,O
in,O
its,O
best,O
interest,O
for,O
the,O
executives,O
to,O
have,O
professional,O
assistance,O
in,O
managing,O
their,O
total,O
compensation,O
so,O
that,O
they,O
can,O
focus,O
their,O
full,O
attention,O
on,O
growing,O
and,O
managing,O
the,O
business,O
.,O
,O
We,O
provide,O
the,O
following,O
benefits,O
to,O
our,O
Named,O
Executive,O
Officers,O
generally,O
on,O
the,O
same,O
basis,O
as,O
the,O
benefits,O
provided,O
to,O
all,O
employees,O
:,O
,O
Our,O
Named,O
Executive,O
Officers,O
",",O
in,O
addition,O
to,O
certain,O
other,O
U.S.-based,I-MISCELLANEOUS
eligible,O
management,O
level,O
employees,O
",",O
are,O
entitled,O
to,O
participate,O
in,O
our,O
Executive,O
Deferred,O
Compensation,O
Plan,O
.,O
,O
We,O
believe,O
that,O
",",O
because,O
the,O
Company,O
does,O
not,O
offer,O
a,O
defined,O
benefit,O
pension,O
plan,O
",",O
such,O
a,O
deferred,O
compensation,O
arrangement,O
should,O
be,O
included,O
as,O
a,O
component,O
of,O
a,O
market,O
competitive,O
compensation,O
program,O
to,O
assist,O
participants,O
in,O
planning,O
and,O
saving,O
for,O
their,O
retirement,O
.,O
,O
Pursuant,O
to,O
our,O
Executive,O
Deferred,O
Compensation,O
Plan,O
",",O
eligible,O
employees,O
may,O
defer,O
from,O
1,O
%,O
to,O
80,O
%,O
of,O
their,O
salary,O
and,O
from,O
1,O
%,O
to,O
80,O
%,O
of,O
their,O
annual,O
cash,O
incentive,O
award,O
",",O
if,O
any,O
.,O
,O
We,O
match,O
50,O
%,O
of,O
the,O
first,O
2,O
%,O
an,O
employee,O
defers,O
in,O
accordance,O
with,O
this,O
Plan,O
.,O
,O
Vesting,O
of,O
the,O
matched,O
amount,O
is,O
based,O
on,O
an,O
employee,O
s,O
years,O
of,O
service,O
with,O
us,O
.,O
,O
If,O
an,O
employee,O
has,O
been,O
with,O
us,O
for,O
less,O
than,O
one,O
year,O
",",O
none,O
of,O
the,O
matched,O
amount,O
is,O
vested,O
.,O
,O
Vesting,O
thereafter,O
occurs,O
33,O
%,O
per,O
year,O
",",O
such,O
that,O
employees,O
who,O
have,O
been,O
with,O
us,O
for,O
more,O
than,O
3,O
years,O
are,O
100,O
%,O
vested,O
in,O
the,O
matched,O
amount,O
.,O
,O
All,O
contributions,O
to,O
our,O
Executive,O
Deferred,O
Compensation,O
Plan,O
have,O
a,O
guaranteed,O
fixed,O
interest,O
rate,O
of,O
return,O
.,O
,O
This,O
guaranteed,O
rate,O
is,O
adjusted,O
annually,O
based,O
on,O
the,O
Prime,O
interest,O
rate,O
published,O
in,O
the,O
Wall,I-MISCELLANEOUS
Street,I-MISCELLANEOUS
Journal,I-MISCELLANEOUS
on,O
the,O
first,O
business,O
day,O
of,O
November,O
2009,O
for,O
the,O
2010,O
plan,O
year,O
.,O
,O
In,O
2010,O
the,O
guaranteed,O
interest,O
rate,O
was,O
3.25,O
%,O
.,O
,O
Termination,O
of,O
each,O
of,O
our,O
Named,O
Executive,O
Officer,O
s,O
employment,O
can,O
occur,O
at,O
any,O
time,O
with,O
or,O
without,O
cause,O
",",O
or,O
by,O
reason,O
of,O
death,O
or,O
disability,O
.,O
,O
Additionally,O
",",O
each,O
Named,O
Executive,O
Officer,O
may,O
voluntarily,O
resign,O
at,O
any,O
time,O
with,O
or,O
without,O
good,O
reason,O
.,O
,O
Pursuant,O
to,O
each,O
of,O
our,O
Named,O
Executive,O
Officer,O
s,O
respective,O
employment,O
agreement,O
or,O
other,O
terms,O
of,O
employment,O
",",O
in,O
the,O
event,O
of,O
termination,O
of,O
employment,O
without,O
cause,O
",",O
or,O
if,O
the,O
Named,O
Executive,O
Officer,O
resigns,O
for,O
good,O
reason,O
",",O
we,O
will,O
provide,O
the,O
Named,O
Executive,O
Officer,O
with,O
severance,O
compensation,O
and,O
benefits,O
",",O
including,O
a,O
lump,O
sum,O
severance,O
payment,O
(,O
based,O
on,O
a,O
multiple,O
of,O
the,O
executive,O
officer,O
s,O
salary,O
and,O
",",O
in,O
the,O
case,O
of,O
Messrs.,O
Bisaro,I-PERSON
",",O
Joyce,I-PERSON
and,O
Buchen,I-PERSON
",",O
their,O
bonus,O
),O
",",O
continued,O
group,O
health,O
insurance,O
benefits,O
for,O
two,O
years,O
and,O
(,O
other,O
than,O
with,O
respect,O
to,O
Mr.,O
Bisaro,I-PERSON
),O
outplacement,O
services,O
for,O
certain,O
periods,O
subsequent,O
to,O
the,O
executive,O
officer,O
s,O
termination,O
.,O
,O
The,O
severance,O
benefits,O
are,O
designed,O
to,O
retain,O
our,O
executive,O
officers,O
by,O
providing,O
them,O
with,O
security,O
in,O
the,O
event,O
of,O
a,O
termination,O
of,O
employment,O
without,O
cause,O
or,O
resignation,O
for,O
good,O
reason,O
.,O
,O
In,O
addition,O
to,O
the,O
severance,O
benefits,O
discussed,O
above,O
",",O
if,O
we,O
experience,O
a,O
change-in-control,O
",",O
and,O
if,O
a,O
Named,O
Executive,O
Officer,O
is,O
terminated,O
without,O
cause,O
or,O
resigns,O
for,O
good,O
reason,O
within,O
ninety,O
(,O
90,O
),O
days,O
prior,O
to,O
or,O
up,O
to,O
twenty-four,O
(,O
24,O
),O
months,O
following,O
such,O
change-in-control,O
",",O
our,O
employment,O
agreements,O
with,O
our,O
Named,O
Executive,O
Officers,O
provide,O
for,O
the,O
immediate,O
vesting,O
of,O
any,O
unvested,O
options,O
and,O
restricted,O
stock,O
held,O
by,O
such,O
Named,O
Executive,O
Officer,O
.,O
,O
The,O
benefits,O
are,O
only,O
payable,O
upon,O
a,O
double,O
trigger,O
—,O
there,O
must,O
be,O
a,O
change-in-control,O
and,O
a,O
termination,O
or,O
resignation,O
for,O
good,O
reason,O
.,O
,O
We,O
believe,O
this,O
approach,O
to,O
be,O
in,O
our,O
best,O
interests,O
in,O
that,O
it,O
(,O
1,O
),O
provides,O
a,O
retention,O
incentive,O
to,O
our,O
Named,O
Executive,O
Officers,O
who,O
may,O
be,O
faced,O
with,O
the,O
potential,O
of,O
job,O
loss,O
following,O
a,O
change-in-control,O
and,O
(,O
2,O
),O
affords,O
any,O
successor,O
entity,O
the,O
opportunity,O
to,O
retain,O
any,O
or,O
all,O
Named,O
Executive,O
Officers,O
following,O
such,O
a,O
change-in-control,O
.,O
,O
In,O
the,O
event,O
of,O
a,O
termination,O
as,O
a,O
result,O
of,O
a,O
change-in-control,O
of,O
the,O
Company,O
",",O
each,O
of,O
Messrs.,O
Bisaro,I-PERSON
",",O
Joyce,I-PERSON
and,O
Buchen,I-PERSON
is,O
also,O
entitled,O
to,O
receive,O
a,O
gross-up,O
payment,O
to,O
compensate,O
for,O
any,O
excise,O
tax,O
imposed,O
on,O
the,O
Named,O
Executive,O
Officer,O
under,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
(,O
the,O
IRC,I-LEGISLATION/ACT
),O
.,O
,O
Each,O
of,O
these,O
executives,O
employment,O
agreements,O
were,O
entered,O
into,O
prior,O
to,O
2010,O
",",O
and,O
none,O
were,O
amended,O
in,O
2010,O
.,O
,O
Section,O
162,O
(,O
m,O
),O
of,O
the,O
IRC,I-LEGISLATION/ACT
provides,O
a,O
$,O
"1,000,000",O
deduction,O
limit,O
on,O
compensation,O
paid,O
to,O
the,O
reporting,O
executives,O
of,O
publicly,O
held,O
corporations,O
",",O
unless,O
the,O
compensation,O
qualifies,O
as,O
performance,O
based,O
compensation,O
based,O
on,O
certain,O
performance,O
",",O
disclosure,O
",",O
stockholder,O
approval,O
and,O
other,O
requirements,O
being,O
met,O
.,O
,O
The,O
options,O
granted,O
under,O
the,O
Incentive,O
Award,O
Plan,O
generally,O
comply,O
with,O
these,O
performance-based,O
compensation,O
requirements,O
.,O
,O
We,O
have,O
not,O
historically,O
designed,O
our,O
long-term,O
equity,O
incentives,O
and,O
our,O
annual,O
cash,O
incentive,O
award,O
programs,O
to,O
comply,O
with,O
the,O
performance-based,O
compensation,O
requirements,O
.,O
,O
We,O
periodically,O
review,O
the,O
potential,O
consequences,O
of,O
Section,O
162,O
(,O
m,O
),O
and,O
may,O
structure,O
the,O
performance-based,O
portion,O
of,O
our,O
executive,O
compensation,O
to,O
comply,O
with,O
certain,O
exemptions,O
of,O
Section,O
162,O
(,O
m,O
),O
.,O
,O
However,O
",",O
we,O
reserve,O
the,O
right,O
to,O
use,O
our,O
judgment,O
to,O
authorize,O
compensation,O
payments,O
that,O
do,O
not,O
comply,O
with,O
the,O
exemptions,O
of,O
Section,O
162,O
(,O
m,O
),O
when,O
we,O
believe,O
that,O
such,O
payments,O
are,O
appropriate,O
and,O
in,O
the,O
best,O
interests,O
of,O
our,O
stockholders,O
.,O
,O
Section,O
409A,O
of,O
the,O
IRC,I-LEGISLATION/ACT
requires,O
that,O
nonqualified,O
deferred,O
compensation,O
be,O
deferred,O
and,O
paid,O
under,O
plans,O
or,O
arrangements,O
that,O
satisfy,O
the,O
requirements,O
of,O
the,O
statute,O
with,O
respect,O
to,O
the,O
timing,O
of,O
deferral,O
elections,O
",",O
timing,O
of,O
payments,O
and,O
certain,O
other,O
matters,O
.,O
,O
Failure,O
to,O
satisfy,O
these,O
requirements,O
can,O
expose,O
employees,O
and,O
other,O
service,O
providers,O
to,O
accelerated,O
income,O
tax,O
liabilities,O
and,O
penalty,O
taxes,O
and,O
interest,O
on,O
their,O
vested,O
compensation,O
under,O
such,O
plans,O
.,O
,O
Accordingly,O
",",O
as,O
a,O
general,O
matter,O
",",O
it,O
is,O
our,O
intention,O
to,O
design,O
and,O
administer,O
our,O
compensation,O
and,O
benefits,O
plans,O
and,O
arrangements,O
for,O
all,O
of,O
our,O
employees,O
and,O
other,O
service,O
providers,O
",",O
including,O
the,O
Named,O
Executive,O
Officers,O
",",O
so,O
that,O
they,O
are,O
either,O
exempt,O
from,O
",",O
or,O
satisfy,O
the,O
requirements,O
of,O
",",O
Section,O
409A,O
.,O
,O
With,O
respect,O
to,O
our,O
compensation,O
and,O
benefit,O
plans,O
that,O
are,O
subject,O
to,O
Section,O
409A,O
",",O
in,O
accordance,O
Section,O
409A,O
and,O
regulatory,O
guidance,O
issued,O
by,O
the,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
(,O
IRS,I-GOVERNMENT
),O
",",O
we,O
are,O
currently,O
operating,O
such,O
plans,O
in,O
compliance,O
with,O
Section,O
409A,O
based,O
upon,O
our,O
good,O
faith,O
",",O
reasonable,O
interpretation,O
of,O
the,O
statute,O
and,O
the,O
IRS,I-GOVERNMENT
s,O
regulatory,O
guidance,O
.,O
,O
Sections,O
280G,O
and,O
4999,O
of,O
the,O
IRC,I-LEGISLATION/ACT
impose,O
certain,O
adverse,O
tax,O
consequences,O
on,O
compensation,O
treated,O
as,O
excess,O
parachute,O
payments,O
.,O
,O
An,O
executive,O
is,O
treated,O
as,O
having,O
received,O
excess,O
parachute,O
payments,O
if,O
he,O
receives,O
compensatory,O
payments,O
or,O
benefits,O
that,O
are,O
contingent,O
on,O
a,O
change-in-control,O
",",O
and,O
the,O
aggregate,O
amount,O
of,O
such,O
payments,O
and,O
benefits,O
equal,O
or,O
exceeds,O
three,O
times,O
the,O
executive,O
s,O
base,O
amount,O
.,O
,O
The,O
portion,O
of,O
the,O
payments,O
and,O
benefits,O
in,O
excess,O
of,O
one,O
times,O
base,O
amount,O
are,O
treated,O
as,O
excess,O
parachute,O
payments,O
and,O
are,O
subject,O
to,O
a,O
20,O
%,O
excise,O
tax,O
",",O
in,O
addition,O
to,O
any,O
applicable,O
federal,O
income,O
and,O
employment,O
taxes,O
.,O
,O
Also,O
",",O
our,O
compensation,O
deduction,O
in,O
respect,O
of,O
the,O
executive,O
s,O
excess,O
parachute,O
payments,O
is,O
disallowed,O
.,O
,O
If,O
we,O
were,O
to,O
be,O
subject,O
to,O
a,O
change-in-control,O
",",O
certain,O
amounts,O
received,O
by,O
our,O
executives,O
(,O
for,O
example,O
",",O
amounts,O
attributable,O
to,O
the,O
accelerated,O
vesting,O
of,O
stock,O
options,O
),O
could,O
be,O
excess,O
parachute,O
payments,O
under,O
Sections,O
280G,O
and,O
4999,O
of,O
the,O
IRC,I-LEGISLATION/ACT
.,O
,O
As,O
discussed,O
below,O
under,O
Potential,O
Payments,O
Upon,O
Termination,O
or,O
Change-in-Control,O
",",O
we,O
provide,O
certain,O
of,O
our,O
executive,O
officers,O
with,O
tax,O
gross,O
up,O
payments,O
in,O
the,O
event,O
of,O
a,O
change-in-control,O
",",O
but,O
did,O
not,O
enter,O
into,O
any,O
such,O
agreements,O
in,O
2010,O
.,O
,O
The,O
Board,O
s,O
role,O
in,O
the,O
Company,O
s,O
risk,O
oversight,O
process,O
includes,O
receiving,O
regular,O
reports,O
from,O
members,O
of,O
senior,O
management,O
on,O
areas,O
of,O
material,O
risk,O
to,O
the,O
Company,O
",",O
including,O
operational,O
",",O
financial,O
",",O
legal,O
and,O
regulatory,O
",",O
and,O
strategic,O
and,O
reputational,O
risks,O
.,O
,O
The,O
full,O
Board,O
(,O
or,O
the,O
appropriate,O
committee,O
in,O
the,O
case,O
of,O
risks,O
that,O
are,O
under,O
the,O
purview,O
of,O
a,O
particular,O
committee,O
),O
receives,O
these,O
reports,O
from,O
the,O
appropriate,O
risk,O
owner,O
within,O
the,O
organization,O
to,O
enable,O
it,O
to,O
understand,O
our,O
risk,O
identification,O
",",O
risk,O
management,O
and,O
risk,O
mitigation,O
strategies,O
.,O
,O
during,O
the,O
next,O
Board,O
meeting,O
.,O
,O
This,O
enables,O
the,O
Board,O
and,O
its,O
committees,O
to,O
coordinate,O
their,O
oversight,O
of,O
risk,O
and,O
identify,O
risk,O
interrelationships,O
.,O
,O
Pursuant,O
to,O
its,O
charter,O
",",O
the,O
Audit,O
Committee,O
is,O
responsible,O
for,O
discussing,O
with,O
management,O
the,O
Company,O
s,O
major,O
areas,O
of,O
financial,O
risk,O
exposure,O
",",O
and,O
reviewing,O
the,O
Company,O
s,O
risk,O
assessment,O
and,O
risk,O
management,O
policies,O
.,O
,O
The,O
Compensation,O
Committee,O
",",O
with,O
the,O
assistance,O
of,O
senior,O
management,O
and,O
our,O
independent,O
compensation,O
consultant,O
",",O
reviewed,O
the,O
elements,O
of,O
employee,O
compensation,O
to,O
determine,O
whether,O
any,O
portion,O
of,O
employee,O
compensation,O
encouraged,O
excessive,O
risk,O
taking,O
.,O
,O
Among,O
other,O
things,O
",",O
it,O
considered,O
the,O
following,O
:,O
,O
Based,O
on,O
the,O
above,O
",",O
we,O
have,O
determined,O
that,O
risks,O
arising,O
from,O
these,O
policies,O
and,O
practices,O
for,O
our,O
employees,O
are,O
not,O
reasonably,O
likely,O
to,O
have,O
a,O
material,O
adverse,O
effect,O
on,O
the,O
Company,O
.,O
,O
In,O
addition,O
",",O
the,O
Compensation,O
Committee,O
believes,O
that,O
the,O
mix,O
and,O
design,O
of,O
the,O
elements,O
of,O
executive,O
compensation,O
do,O
not,O
encourage,O
management,O
to,O
assume,O
excessive,O
risks,O
.,O
,O
The,O
Compensation,O
Committee,O
of,O
Watson,I-BUSINESS
has,O
reviewed,O
and,O
discussed,O
the,O
Compensation,O
Discussion,O
and,O
Analysis,O
required,O
by,O
Item,O
402,O
(,O
b,O
),O
of,O
Regulation,I-LEGISLATION/ACT
S-K,I-LEGISLATION/ACT
with,O
management,O
and,O
",",O
based,O
on,O
such,O
review,O
and,O
discussions,O
",",O
the,O
Compensation,O
Committee,O
recommended,O
to,O
the,O
Board,O
that,O
the,O
Compensation,O
Discussion,O
and,O
Analysis,O
be,O
included,O
in,O
this,O
proxy,O
statement,O
and,O
our,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
fiscal,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
certain,O
information,O
regarding,O
the,O
annual,O
and,O
long-term,O
compensation,O
for,O
services,O
rendered,O
to,O
the,O
Company,O
in,O
all,O
capacities,O
for,O
the,O
fiscal,O
year,O
ended,O
December,O
31,O
",",O
2010,O
of,O
our,O
Named,O
Executive,O
Officers,O
.,O
,O
For,O
purposes,O
of,O
determining,O
the,O
three,O
most,O
highly,O
compensated,O
executive,O
officers,O
",",O
the,O
amounts,O
shown,O
in,O
column,O
(,O
g,O
),O
below,O
were,O
excluded,O
.,O
,O
The,O
following,O
table,O
provides,O
information,O
about,O
equity,O
and,O
non-equity,O
awards,O
granted,O
to,O
Named,O
Executive,O
Officers,O
for,O
2010,O
:,O
,O
The,O
following,O
table,O
sets,O
forth,O
the,O
outstanding,O
equity,O
awards,O
for,O
the,O
Company,O
s,O
Named,O
Executive,O
Officers,O
at,O
December,O
31,O
",",O
2010,O
:,O
,O
The,O
following,O
table,O
sets,O
forth,O
certain,O
information,O
with,O
respect,O
to,O
each,O
Named,O
Executive,O
Officer,O
concerning,O
the,O
vesting,O
of,O
stock,O
awards,O
during,O
the,O
fiscal,O
year,O
ended,O
December,O
31,O
",",O
2010,O
:,O
,O
The,O
following,O
table,O
sets,O
forth,O
the,O
executive,O
contributions,O
",",O
employer,O
matches,O
",",O
earnings,O
",",O
withdrawals/distributions,O
and,O
account,O
balances,O
",",O
where,O
applicable,O
",",O
for,O
the,O
Named,O
Executive,O
Officers,O
in,O
the,O
Executive,O
Deferred,O
Compensation,O
Plan,O
(,O
the,O
Deferred,O
Plan,O
),O
",",O
an,O
unfunded,O
",",O
unsecured,O
deferred,O
compensation,O
plan,O
.,O
,O
Each,O
of,O
our,O
Named,O
Executive,O
Officers,O
is,O
party,O
to,O
an,O
employment,O
agreement,O
or,O
arrangement,O
pursuant,O
to,O
which,O
he,O
is,O
entitled,O
to,O
certain,O
payments,O
and,O
benefits,O
in,O
the,O
event,O
of,O
(,O
i,O
),O
an,O
involuntary,O
termination,O
without,O
cause,O
",",O
(,O
ii,O
),O
the,O
resignation,O
of,O
the,O
executive,O
for,O
good,O
reason,O
or,O
(,O
iii,O
),O
a,O
qualifying,O
termination,O
in,O
connection,O
with,O
a,O
change-in-control,O
.,O
,O
With,O
certain,O
exceptions,O
footnoted,O
in,O
the,O
table,O
that,O
follows,O
",",O
these,O
agreements,O
generally,O
provide,O
that,O
under,O
these,O
circumstances,O
our,O
Named,O
Executive,O
Officers,O
are,O
entitled,O
to,O
receive,O
:,O
,O
(,O
1,O
),O
lump,O
sum,O
cash,O
payments,O
ranging,O
from,O
between,O
24,O
and,O
36,O
months,O
of,O
the,O
executive,O
s,O
then,O
base,O
salary,O
;,O
,O
(,O
2,O
),O
with,O
certain,O
exceptions,O
",",O
a,O
multiple,O
of,O
the,O
executive,O
s,O
annual,O
bonus,O
",",O
which,O
",",O
depending,O
on,O
the,O
executive,O
and,O
the,O
type,O
of,O
termination,O
",",O
as,O
noted,O
in,O
the,O
table,O
below,O
",",O
may,O
be,O
determined,O
on,O
the,O
basis,O
of,O
such,O
executive,O
s,O
target,O
bonus,O
or,O
the,O
greater,O
of,O
target,O
bonus,O
or,O
such,O
executive,O
s,O
prior,O
year,O
actual,O
bonus,O
.,O
,O
Joyce,I-PERSON
and,O
Buchen,I-PERSON
(,O
as,O
well,O
as,O
Mr.,O
Bisaro,I-PERSON
",",O
but,O
only,O
in,O
the,O
case,O
of,O
a,O
termination,O
without,O
cause,O
or,O
for,O
good,O
reason,O
),O
are,O
also,O
entitled,O
to,O
a,O
prorated,O
bonus,O
for,O
the,O
year,O
in,O
which,O
the,O
termination,O
occurs,O
;,O
,O
(,O
4,O
),O
for,O
the,O
Named,O
Executive,O
Officers,O
other,O
than,O
Mr.,O
Bisaro,I-PERSON
",",O
outplacement,O
services,O
for,O
one,O
year,O
with,O
a,O
nationally,O
recognized,O
service,O
selected,O
by,O
us,O
.,O
,O
Unless,O
we,O
determine,O
that,O
any,O
severance,O
payments,O
should,O
be,O
delayed,O
in,O
consideration,O
of,O
Section,O
409A,O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revise,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1986,I-LEGISLATION/ACT
",",O
cash,O
payments,O
are,O
to,O
be,O
paid,O
within,O
30,O
days,O
of,O
termination,O
.,O
,O
In,O
the,O
event,O
of,O
a,O
qualifying,O
termination,O
in,O
connection,O
with,O
a,O
change-in-control,O
",",O
a,O
Named,O
Executive,O
Officer,O
is,O
entitled,O
to,O
accelerated,O
vesting,O
with,O
respect,O
to,O
all,O
of,O
his,O
stock,O
equity,O
awards,O
.,O
,O
Such,O
executive,O
is,O
entitled,O
to,O
exercise,O
any,O
vested,O
options,O
for,O
a,O
period,O
of,O
90,O
days,O
following,O
termination,O
;,O
provided,O
that,O
the,O
terms,O
of,O
certain,O
option,O
awards,O
permit,O
executives,O
with,O
at,O
least,O
five,O
years,O
of,O
service,O
to,O
the,O
Company,O
as,O
of,O
the,O
date,O
of,O
any,O
such,O
termination,O
to,O
exercise,O
such,O
options,O
for,O
up,O
to,O
one,O
year,O
following,O
termination,O
.,O
,O
Pursuant,O
to,O
their,O
respective,O
employment,O
agreements,O
or,O
arrangements,O
",",O
each,O
of,O
our,O
Named,O
Executive,O
Officers,O
",",O
other,O
than,O
Messrs.,O
Wilkinson,I-PERSON
and,O
Stewart,I-PERSON
",",O
is,O
also,O
entitled,O
to,O
receive,O
a,O
tax,O
gross-up,O
payment,O
to,O
compensate,O
him,O
for,O
any,O
excise,O
taxes,O
payable,O
with,O
respect,O
to,O
the,O
payments,O
and,O
benefits,O
made,O
under,O
his,O
employment,O
agreement,O
in,O
the,O
event,O
of,O
a,O
qualifying,O
termination,O
in,O
connection,O
with,O
a,O
change-in-control,O
.,O
,O
If,O
any,O
of,O
Messrs.,O
Bisaro,I-PERSON
",",O
Joyce,I-PERSON
or,O
Buchen,I-PERSON
breaches,O
a,O
non-solicitation,O
provision,O
of,O
his,O
employment,O
agreement,O
applicable,O
",",O
then,O
any,O
severance,O
payments,O
or,O
other,O
benefits,O
being,O
provided,O
to,O
such,O
Named,O
Executive,O
Officer,O
will,O
immediately,O
cease,O
.,O
,O
In,O
accordance,O
with,O
the,O
requirements,O
of,O
the,O
rules,O
of,O
the,O
SEC,I-GOVERNMENT
",",O
the,O
table,O
below,O
indicates,O
the,O
amount,O
of,O
compensation,O
payable,O
by,O
us,O
to,O
each,O
Named,O
Executive,O
Officer,O
upon,O
(,O
i,O
),O
an,O
involuntary,O
termination,O
without,O
cause,O
;,O
(,O
ii,O
),O
the,O
resignation,O
of,O
the,O
executive,O
for,O
good,O
reason,O
;,O
or,O
(,O
iii,O
),O
a,O
qualifying,O
termination,O
in,O
connection,O
with,O
a,O
change-in-control,O
.,O
,O
The,O
amounts,O
assume,O
that,O
such,O
termination,O
was,O
effective,O
as,O
of,O
December,O
31,O
",",O
2010,O
and,O
thus,O
includes,O
amounts,O
earned,O
through,O
such,O
date,O
and,O
are,O
only,O
estimates,O
of,O
the,O
amounts,O
that,O
would,O
actually,O
be,O
paid,O
to,O
such,O
executives,O
upon,O
their,O
termination,O
.,O
,O
The,O
definitions,O
of,O
change-in-control,O
",",O
cause,O
and,O
good,O
reason,O
and,O
descriptions,O
of,O
the,O
payments,O
and,O
benefits,O
appear,O
after,O
the,O
table,O
.,O
,O
The,O
table,O
does,O
not,O
include,O
certain,O
amounts,O
that,O
the,O
Named,O
Executive,O
Officer,O
is,O
entitled,O
to,O
receive,O
under,O
certain,O
plans,O
or,O
arrangements,O
that,O
do,O
not,O
discriminate,O
in,O
scope,O
",",O
terms,O
or,O
operation,O
",",O
in,O
favor,O
of,O
our,O
Named,O
Executive,O
Officers,O
and,O
that,O
are,O
generally,O
available,O
to,O
all,O
salaried,O
employees,O
",",O
such,O
as,O
payment,O
of,O
accrued,O
vacation,O
.,O
,O
The,O
table,O
also,O
does,O
not,O
include,O
the,O
accrued,O
and,O
vested,O
accounts,O
of,O
the,O
executive,O
under,O
our,O
Deferred,O
Plan,O
.,O
,O
These,O
amounts,O
are,O
generally,O
distributed,O
to,O
our,O
executives,O
upon,O
a,O
termination,O
of,O
employment,O
",",O
regardless,O
of,O
the,O
reason,O
",",O
in,O
accordance,O
with,O
his,O
or,O
her,O
election,O
under,O
the,O
applicable,O
plan,O
.,O
,O
The,O
accrued,O
and,O
vested,O
amounts,O
under,O
the,O
Deferred,O
Plan,O
are,O
set,O
forth,O
in,O
the,O
table,O
under,O
Nonqualified,O
Deferred,O
Compensation,O
on,O
page,O
38,O
.,O
,O
Bisaro,I-PERSON
and,O
Joyce,I-PERSON
",",O
a,O
change-in-control,O
generally,O
means,O
(,O
i,O
),O
a,O
sale,O
of,O
assets,O
representing,O
50,O
%,O
or,O
more,O
of,O
our,O
net,O
book,O
value,O
and,O
fair,O
market,O
value,O
;,O
(,O
ii,O
),O
our,O
liquidation,O
or,O
dissolution,O
;,O
(,O
iii,O
),O
a,O
merger,O
",",O
consolidation,O
or,O
other,O
transaction,O
involving,O
us,O
after,O
the,O
completion,O
of,O
which,O
our,O
stockholders,O
before,O
the,O
transaction,O
represent,O
less,O
than,O
50,O
%,O
of,O
the,O
voting,O
power,O
of,O
our,O
stockholders,O
following,O
the,O
transaction,O
;,O
(,O
iv,O
),O
the,O
acquisition,O
by,O
a,O
person,O
or,O
group,O
of,O
more,O
than,O
50,O
%,O
of,O
the,O
combined,O
voting,O
power,O
of,O
Watson,I-BUSINESS
;,O
or,O
(,O
v,O
),O
the,O
replacement,O
of,O
the,O
majority,O
of,O
our,O
incumbent,O
directors,O
by,O
individuals,O
not,O
approved,O
by,O
a,O
majority,O
of,O
our,O
incumbent,O
Board,O
.,O
,O
Buchen,I-PERSON
",",O
Wilkinson,I-PERSON
and,O
Stewart,I-PERSON
",",O
a,O
change-in-control,O
generally,O
means,O
(,O
i,O
),O
a,O
sale,O
of,O
assets,O
representing,O
50,O
%,O
or,O
more,O
of,O
our,O
net,O
book,O
value,O
and,O
fair,O
market,O
value,O
;,O
(,O
ii,O
),O
our,O
liquidation,O
or,O
dissolution,O
;,O
(,O
iii,O
),O
a,O
merger,O
",",O
consolidation,O
or,O
other,O
transaction,O
involving,O
us,O
after,O
the,O
completion,O
of,O
which,O
our,O
stockholders,O
before,O
the,O
transaction,O
represent,O
less,O
than,O
60,O
%,O
of,O
the,O
voting,O
power,O
of,O
our,O
stockholders,O
following,O
the,O
transaction,O
;,O
(,O
iv,O
),O
the,O
acquisition,O
by,O
a,O
person,O
or,O
group,O
of,O
more,O
than,O
30,O
%,O
of,O
the,O
combined,O
voting,O
of,O
Watson,I-BUSINESS
;,O
or,O
(,O
v,O
),O
the,O
replacement,O
of,O
the,O
majority,O
of,O
our,O
incumbent,O
directors,O
by,O
individuals,O
not,O
approved,O
by,O
a,O
majority,O
of,O
our,O
incumbent,O
Board,O
.,O
,O
Bisaro,I-PERSON
",",O
a,O
qualifying,O
termination,O
means,O
",",O
within,O
90,O
days,O
before,O
or,O
within,O
12,O
months,O
following,O
a,O
change-in-control,O
",",O
(,O
i,O
),O
we,O
terminate,O
Mr.,O
Bisaro,I-PERSON
other,O
than,O
for,O
cause,O
or,O
(,O
ii,O
),O
Mr.,O
Bisaro,I-PERSON
terminates,O
his,O
employment,O
with,O
us,O
for,O
good,O
reason,O
.,O
,O
Joyce,I-PERSON
and,O
Buchen,I-PERSON
",",O
a,O
qualifying,O
termination,O
means,O
",",O
within,O
90,O
days,O
before,O
or,O
within,O
24,O
months,O
following,O
a,O
change-in-control,O
",",O
(,O
i,O
),O
we,O
terminate,O
the,O
executive,O
other,O
than,O
for,O
cause,O
or,O
(,O
ii,O
),O
the,O
executive,O
terminates,O
his,O
employment,O
with,O
us,O
for,O
good,O
reason,O
.,O
,O
Wilkinson,I-PERSON
and,O
Stewart,I-PERSON
",",O
a,O
qualifying,O
termination,O
means,O
",",O
within,O
12,O
months,O
following,O
a,O
change-in-control,O
",",O
(,O
i,O
),O
we,O
terminate,O
the,O
executive,O
other,O
than,O
for,O
cause,O
or,O
(,O
ii,O
),O
the,O
executive,O
terminates,O
his,O
employment,O
with,O
us,O
for,O
good,O
reason,O
.,O
,O
Bisaro,I-PERSON
",",O
a,O
termination,O
for,O
good,O
reason,O
means,O
that,O
Mr.,O
.,O
,O
with,O
",",O
or,O
materially,O
impair,O
his,O
ability,O
to,O
perform,O
",",O
the,O
duties,O
customarily,O
assigned,O
to,O
a,O
President,O
and,O
Chief,O
Executive,O
Officer,O
;,O
(,O
v,O
),O
we,O
changed,O
our,O
reporting,O
structures,O
such,O
that,O
he,O
reports,O
to,O
someone,O
other,O
than,O
the,O
Board,O
of,O
Directors,O
;,O
(,O
vi,O
),O
we,O
materially,O
breached,O
our,O
obligations,O
under,O
his,O
employment,O
agreement,O
;,O
(,O
vii,O
),O
we,O
failed,O
to,O
obtain,O
an,O
assumption,O
of,O
his,O
employment,O
agreement,O
by,O
any,O
successor,O
or,O
assignee,O
;,O
or,O
(,O
viii,O
),O
we,O
cause,O
him,O
to,O
commit,O
fraud,O
or,O
expose,O
him,O
to,O
criminal,O
liability,O
.,O
,O
Buchen,I-PERSON
",",O
a,O
termination,O
for,O
good,O
reason,O
generally,O
means,O
that,O
he,O
has,O
terminated,O
his,O
employment,O
with,O
us,O
because,O
of,O
(,O
i,O
),O
a,O
material,O
reduction,O
in,O
his,O
then,O
existing,O
annual,O
base,O
salary,O
",",O
(,O
ii,O
),O
a,O
material,O
reduction,O
in,O
the,O
package,O
of,O
benefits,O
and,O
incentives,O
",",O
taken,O
as,O
a,O
whole,O
",",O
provided,O
to,O
him,O
or,O
(,O
iii,O
),O
a,O
material,O
diminution,O
of,O
his,O
duties,O
",",O
responsibilities,O
",",O
authority,O
",",O
or,O
reporting,O
structure,O
;,O
(,O
iv,O
),O
a,O
request,O
that,O
he,O
materially,O
relocate,O
such,O
that,O
the,O
distance,O
of,O
his,O
one-way,O
commute,O
is,O
increased,O
by,O
more,O
than,O
thirty-five,O
(,O
35,O
),O
miles,O
;,O
(,O
v,O
),O
we,O
materially,O
breached,O
our,O
obligations,O
under,O
his,O
employment,O
agreement,O
;,O
or,O
(,O
vi,O
),O
we,O
failed,O
to,O
obtain,O
the,O
assumption,O
of,O
his,O
employment,O
agreement,O
by,O
any,O
successor,O
or,O
assign,O
.,O
,O
Joyce,I-PERSON
",",O
a,O
termination,O
for,O
good,O
reason,O
means,O
that,O
he,O
has,O
terminated,O
his,O
employment,O
with,O
us,O
because,O
(,O
i,O
),O
after,O
a,O
change-in-control,O
",",O
(,O
a,O
),O
of,O
a,O
material,O
reduction,O
of,O
his,O
then,O
existing,O
annual,O
base,O
salary,O
",",O
(,O
b,O
),O
of,O
a,O
material,O
reduction,O
in,O
his,O
package,O
of,O
benefits,O
and,O
incentives,O
",",O
taken,O
as,O
a,O
whole,O
",",O
(,O
c,O
),O
of,O
a,O
material,O
diminution,O
of,O
his,O
duties,O
and,O
responsibilities,O
",",O
taken,O
as,O
a,O
whole,O
",",O
or,O
(,O
d,O
),O
a,O
requirement,O
that,O
he,O
relocate,O
such,O
that,O
the,O
distance,O
of,O
his,O
one-way,O
commute,O
is,O
increased,O
by,O
more,O
than,O
thirty-five,O
(,O
35,O
),O
miles,O
;,O
(,O
ii,O
),O
we,O
materially,O
breached,O
our,O
obligations,O
under,O
his,O
employment,O
agreement,O
;,O
or,O
(,O
iii,O
),O
we,O
failed,O
to,O
obtain,O
the,O
assumption,O
of,O
his,O
employment,O
agreement,O
by,O
any,O
successor,O
or,O
assign,O
.,O
,O
Wilkinson,I-PERSON
and,O
Stewart,I-PERSON
",",O
a,O
termination,O
for,O
good,O
reason,O
means,O
that,O
such,O
executive,O
has,O
terminated,O
his,O
employment,O
with,O
us,O
because,O
(,O
i,O
),O
after,O
a,O
change-in-control,O
",",O
(,O
a,O
),O
there,O
is,O
a,O
material,O
reduction,O
of,O
his,O
then,O
existing,O
annual,O
base,O
salary,O
or,O
(,O
b,O
),O
the,O
Company,O
decides,O
to,O
relocate,O
his,O
principal,O
work,O
site,O
such,O
that,O
his,O
one-way,O
commuting,O
distance,O
increases,O
by,O
more,O
than,O
50,O
miles,O
;,O
or,O
(,O
ii,O
),O
in,O
the,O
absence,O
of,O
a,O
change-of-control,O
",",O
the,O
Company,O
decides,O
to,O
relocate,O
his,O
principal,O
work,O
site,O
such,O
that,O
his,O
one-way,O
commuting,O
distance,O
increases,O
by,O
more,O
than,O
50,O
miles,O
.,O
,O
Bisaro,I-PERSON
",",O
a,O
termination,O
for,O
cause,O
means,O
that,O
we,O
have,O
terminated,O
Mr.,O
Bisaro,I-PERSON
because,O
(,O
i,O
),O
his,O
fraud,O
",",O
misrepresentation,O
embezzlement,O
or,O
other,O
act,O
of,O
material,O
misconduct,O
against,O
us,O
;,O
(,O
ii,O
),O
his,O
gross,O
neglect,O
",",O
willful,O
malfeasance,O
or,O
gross,O
misconduct,O
in,O
connection,O
with,O
this,O
employment,O
;,O
(,O
iii,O
),O
his,O
conviction,O
or,O
plea,O
of,O
guilty,O
or,O
nolo,O
contendere,O
to,O
a,O
felony,O
or,O
other,O
crime,O
involving,O
moral,O
turpitude,O
;,O
(,O
iv,O
),O
his,O
willful,O
and,O
knowing,O
violations,O
of,O
any,O
rules,O
or,O
regulations,O
of,O
any,O
governmental,O
body,O
material,O
to,O
our,O
business,O
;,O
(,O
v,O
),O
his,O
failure,O
to,O
cooperate,O
",",O
if,O
requested,O
by,O
the,O
Board,O
",",O
with,O
any,O
internal,O
or,O
external,O
investigation,O
or,O
inquiry,O
into,O
our,O
business,O
practices,O
;,O
or,O
(,O
vi,O
),O
his,O
substantial,O
and,O
willful,O
failure,O
to,O
render,O
services,O
in,O
accordance,O
with,O
the,O
terms,O
of,O
his,O
employment,O
agreement,O
.,O
,O
For,O
the,O
remainder,O
of,O
the,O
Named,O
Executive,O
Officers,O
",",O
a,O
termination,O
for,O
cause,O
means,O
that,O
we,O
have,O
terminated,O
the,O
executive,O
because,O
of,O
(,O
i,O
),O
the,O
executive,O
s,O
conviction,O
for,O
any,O
felony,O
;,O
or,O
(,O
ii,O
),O
the,O
executive,O
s,O
gross,O
misconduct,O
",",O
material,O
violation,O
of,O
our,O
policies,O
",",O
or,O
material,O
breach,O
of,O
the,O
executive,O
s,O
duties,O
to,O
us,O
",",O
which,O
the,O
executive,O
fails,O
to,O
correct,O
within,O
thirty,O
(,O
30,O
),O
days,O
after,O
the,O
executive,O
is,O
given,O
written,O
notice,O
by,O
our,O
chief,O
executive,O
officer,O
or,O
another,O
designated,O
officer,O
.,O
,O
In,O
the,O
case,O
of,O
Messrs.,O
Wilkinson,I-PERSON
and,O
Stewart,I-PERSON
cause,O
also,O
includes,O
their,O
unsatisfactory,O
performance,O
of,O
their,O
duties,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
information,O
regarding,O
outstanding,O
options,O
and,O
shares,O
reserved,O
for,O
future,O
issuance,O
under,O
the,O
Watson,I-BUSINESS
s,O
equity,O
compensation,O
plans,O
as,O
of,O
December,O
31,O
",",O
2010,O
:,O
,O
As,O
of,O
December,O
31,O
",",O
2010,O
there,O
were,O
"3,076,043",O
stock,O
options,O
outstanding,O
with,O
a,O
weighted,O
average,O
exercise,O
price,O
of,O
$,O
36.63,O
and,O
a,O
weighted,O
average,O
term,O
of,O
3.2,O
years,O
.,O
,O
Also,O
",",O
as,O
of,O
this,O
date,O
there,O
were,O
"2,317,895",O
restricted,O
shares,O
outstanding,O
.,O
,O
Shareholder,O
Proposal,O
No.,O
3,O
",",O
if,O
approved,O
",",O
will,O
increase,O
the,O
number,O
of,O
shares,O
available,O
for,O
future,O
equity,O
grants,O
from,O
"5,241,885",O
to,O
"8,241,885",O
(,O
"3,000,000",O
additional,O
shares,O
),O
retroactive,O
to,O
January,O
1,O
",",O
2011,O
.,O
,O
Except,O
for,O
Mr.,O
Tabatznik,I-PERSON
",",O
all,O
members,O
of,O
the,O
Board,O
of,O
Directors,O
who,O
are,O
not,O
full-time,O
employees,O
of,O
the,O
Company,O
received,O
a,O
director,O
s,O
fee,O
of,O
$,O
"50,000",O
and,O
a,O
grant,O
of,O
"5,000",O
shares,O
of,O
our,O
restricted,O
stock,O
",",O
vesting,O
over,O
one,O
year,O
",",O
for,O
2010,O
.,O
,O
In,O
addition,O
",",O
in,O
2010,O
directors,O
were,O
paid,O
$,O
"2,000",O
for,O
each,O
Board,O
of,O
Directors,O
meeting,O
personally,O
attended,O
and,O
$,O
"1,000",O
for,O
each,O
meeting,O
attended,O
telephonically,O
.,O
,O
Directors,O
(,O
other,O
than,O
Mr.,O
Tabatznik,I-PERSON
),O
were,O
also,O
paid,O
$,O
"1,500",O
for,O
each,O
Committee,O
meeting,O
personally,O
attended,O
and,O
$,O
"1,000",O
for,O
each,O
Committee,O
meeting,O
attended,O
telephonically,O
.,O
,O
Andrew,I-PERSON
L.,I-PERSON
Turner,I-PERSON
received,O
an,O
additional,O
annual,O
fee,O
of,O
$,O
"75,000",O
as,O
our,O
nonexecutive,O
Chairman,O
of,O
the,O
Board,O
.,O
,O
Additionally,O
",",O
the,O
Chairman,O
of,O
each,O
of,O
the,O
Regulatory,O
Compliance,O
Committee,O
and,O
the,O
Nominating,O
and,O
Corporate,O
Governance,O
Committee,O
received,O
an,O
additional,O
annual,O
fee,O
of,O
$,O
"7,000",O
.,O
,O
The,O
Chairman,O
of,O
each,O
of,O
the,O
Audit,O
Committee,O
and,O
the,O
Compensation,O
Committee,O
received,O
an,O
additional,O
annual,O
fee,O
of,O
$,O
"10,000",O
.,O
,O
All,O
directors,O
were,O
reimbursed,O
for,O
expenses,O
incurred,O
in,O
connection,O
with,O
attending,O
Board,O
of,O
Directors,O
and,O
Committee,O
meetings,O
.,O
,O
Michel,I-PERSON
J.,I-PERSON
Feldman,I-PERSON
s,O
law,O
firm,O
receives,O
his,O
director,O
s,O
fees,O
.,O
,O
Our,O
Chief,O
Executive,O
Officer,O
does,O
not,O
receive,O
additional,O
compensation,O
for,O
his,O
service,O
as,O
a,O
director,O
.,O
,O
The,O
following,O
table,O
sets,O
forth,O
the,O
annual,O
compensation,O
to,O
each,O
person,O
who,O
served,O
as,O
a,O
non-employee,O
director,O
during,O
2010,O
:,O
,O
The,O
following,O
table,O
sets,O
forth,O
",",O
as,O
of,O
March,O
18,O
",",O
2011,O
",",O
the,O
name,O
",",O
address,O
(,O
where,O
required,O
),O
and,O
beneficial,O
ownership,O
of,O
each,O
person,O
(,O
including,O
any,O
group,O
as,O
defined,O
in,O
Section,O
13,O
(,O
d,O
),O
(,O
3,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
known,O
by,O
us,O
to,O
be,O
the,O
beneficial,O
owner,O
of,O
more,O
than,O
5,O
%,O
of,O
our,O
common,O
stock,O
:,O
,O
The,O
following,O
table,O
sets,O
forth,O
",",O
as,O
of,O
March,O
18,O
",",O
2011,O
",",O
the,O
amount,O
of,O
common,O
stock,O
beneficially,O
owned,O
by,O
each,O
of,O
the,O
directors,O
(,O
including,O
nominees,O
),O
and,O
Named,O
Executive,O
Officers,O
",",O
and,O
by,O
all,O
of,O
our,O
directors,O
and,O
executive,O
officers,O
(,O
including,O
Named,O
Executive,O
Officers,O
),O
as,O
a,O
group,O
.,O
,O
No,O
individual,O
director,O
",",O
nominee,O
or,O
Named,O
Executive,O
Officer,O
beneficially,O
owned,O
more,O
than,O
1,O
%,O
of,O
Watson,I-BUSINESS
s,O
common,O
stock,O
.,O
,O
The,O
total,O
beneficial,O
ownership,O
by,O
directors,O
and,O
executive,O
officers,O
as,O
a,O
group,O
represented,O
less,O
than,O
2,O
%,O
of,O
outstanding,O
shares,O
.,O
,O
Unless,O
otherwise,O
indicated,O
in,O
the,O
footnotes,O
to,O
this,O
table,O
and,O
pursuant,O
to,O
applicable,O
community,O
property,O
laws,O
",",O
we,O
believe,O
the,O
persons,O
named,O
in,O
this,O
table,O
have,O
sole,O
voting,O
and,O
investment,O
power,O
with,O
respect,O
to,O
all,O
shares,O
of,O
common,O
stock,O
reflected,O
in,O
this,O
table,O
.,O
,O
March,O
18,O
",",O
2011,O
",",O
"126,400,372",O
shares,O
of,O
our,O
common,O
stock,O
were,O
issued,O
and,O
outstanding,O
.,O
,O
No,O
shares,O
have,O
been,O
pledged,O
as,O
security,O
by,O
any,O
of,O
our,O
executive,O
officers,O
.,O
,O
Our,O
articles,O
of,O
incorporation,O
provide,O
that,O
the,O
Board,O
of,O
Directors,O
will,O
be,O
divided,O
into,O
three,O
classes,O
.,O
,O
One,O
class,O
is,O
elected,O
each,O
year,O
for,O
a,O
three-year,O
term,O
",",O
expiring,O
at,O
our,O
annual,O
meeting,O
of,O
stockholders,O
.,O
,O
There,O
are,O
currently,O
four,O
Class,O
I,O
directors,O
",",O
three,O
Class,O
II,O
directors,O
and,O
four,O
Class,O
III,O
directors,O
.,O
,O
In,O
light,O
of,O
recent,O
developments,O
in,O
corporate,O
governance,O
",",O
the,O
Board,O
of,O
Directors,O
carefully,O
reviewed,O
the,O
advantages,O
and,O
disadvantages,O
of,O
having,O
a,O
classified,O
board,O
of,O
directors,O
.,O
,O
As,O
a,O
result,O
of,O
this,O
review,O
",",O
the,O
Board,O
of,O
Directors,O
has,O
determined,O
that,O
a,O
classified,O
board,O
of,O
directors,O
is,O
no,O
longer,O
in,O
the,O
best,O
interests,O
of,O
the,O
Company,O
and,O
its,O
stockholders,O
.,O
,O
The,O
Board,O
of,O
Directors,O
believes,O
that,O
all,O
directors,O
should,O
be,O
equally,O
accountable,O
at,O
all,O
times,O
for,O
the,O
Company,O
s,O
performance,O
and,O
subject,O
each,O
year,O
to,O
the,O
opinions,O
of,O
our,O
stockholders,O
regarding,O
their,O
performance,O
as,O
a,O
director,O
.,O
,O
On,O
January,O
18,O
",",O
2011,O
",",O
the,O
Board,O
of,O
Directors,O
unanimously,O
approved,O
",",O
subject,O
to,O
stockholder,O
approval,O
at,O
the,O
Meeting,O
",",O
the,O
amendment,O
and,O
restatement,O
of,O
our,O
articles,O
of,O
incorporation,O
for,O
the,O
purpose,O
of,O
eliminating,O
the,O
current,O
three-tiered,O
classification,O
of,O
the,O
Board,O
of,O
Directors,O
.,O
,O
If,O
the,O
amendment,O
and,O
restatement,O
of,O
our,O
articles,O
of,O
incorporation,O
is,O
approved,O
",",O
the,O
current,O
classification,O
system,O
will,O
be,O
phased,O
out,O
over,O
three,O
years,O
:,O
,O
(,O
i,O
),O
the,O
directors,O
elected,O
at,O
the,O
Meeting,O
will,O
serve,O
for,O
a,O
three-year,O
term,O
and,O
stand,O
for,O
election,O
at,O
our,O
2014,O
Annual,O
Meeting,O
",",O
for,O
a,O
one-year,O
term,O
;,O
,O
(,O
ii,O
),O
the,O
directors,O
previously,O
elected,O
at,O
our,O
2010,O
Annual,O
Meeting,O
will,O
serve,O
out,O
their,O
current,O
three-year,O
term,O
and,O
will,O
stand,O
for,O
election,O
at,O
our,O
2013,O
Annual,O
Meeting,O
",",O
for,O
a,O
one-year,O
term,O
;,O
,O
(,O
iv,O
),O
all,O
other,O
directors,O
who,O
may,O
be,O
appointed,O
after,O
the,O
Meeting,O
would,O
be,O
appointed,O
for,O
an,O
initial,O
term,O
ending,O
at,O
the,O
next,O
Annual,O
Meeting,O
.,O
,O
If,O
the,O
amendment,O
and,O
restatement,O
of,O
our,O
articles,O
of,O
incorporation,O
is,O
not,O
approved,O
",",O
the,O
Board,O
of,O
Directors,O
will,O
remain,O
classified,O
.,O
,O
In,O
addition,O
to,O
providing,O
for,O
the,O
declassification,O
of,O
the,O
Board,O
of,O
Directors,O
",",O
the,O
amendment,O
and,O
restatement,O
of,O
our,O
articles,O
of,O
incorporation,O
also,O
provides,O
for,O
the,O
deletion,O
of,O
certain,O
provisions,O
of,O
our,O
articles,O
of,O
incorporation,O
",",O
including,O
provisions,O
related,O
to,O
the,O
non-assessability,O
of,O
fully,O
paid,O
capital,O
stock,O
",",O
the,O
name,O
and,O
address,O
of,O
the,O
incorporator,O
and,O
the,O
perpetual,O
existence,O
of,O
the,O
Company,O
.,O
,O
We,O
believe,O
these,O
deleted,O
provisions,O
are,O
no,O
longer,O
necessary,O
in,O
our,O
articles,O
of,O
incorporation,O
.,O
,O
The,O
text,O
of,O
the,O
proposed,O
amendment,O
and,O
restatement,O
of,O
our,O
articles,O
of,O
incorporation,O
is,O
attached,O
to,O
this,O
Proxy,O
Statement,O
as,O
Appendix,O
A,O
.,O
,O
The,O
affirmative,O
vote,O
of,O
the,O
holders,O
of,O
a,O
majority,O
of,O
the,O
outstanding,O
shares,O
of,O
common,O
stock,O
entitled,O
to,O
vote,O
is,O
required,O
to,O
approve,O
the,O
foregoing,O
amendment,O
and,O
restatement,O
of,O
our,O
articles,O
of,O
incorporation,O
.,O
,O
The,O
Board,O
of,O
Directors,O
believes,O
that,O
the,O
proposed,O
amendment,O
and,O
restatement,O
of,O
our,O
articles,O
of,O
incorporation,O
is,O
in,O
the,O
best,O
interests,O
of,O
the,O
Company,O
and,O
its,O
stockholders,O
and,O
",",O
therefore,O
",",O
unanimously,O
recommends,O
a,O
vote,O
FOR,O
this,O
proposal,O
.,O
,O
We,O
are,O
asking,O
our,O
stockholders,O
to,O
approve,O
the,O
Fourth,I-LEGISLATION/ACT
Amendment,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Restatement,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
the,I-LEGISLATION/ACT
2001,I-LEGISLATION/ACT
Incentive,I-LEGISLATION/ACT
Award,I-LEGISLATION/ACT
Plan,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Watson,I-LEGISLATION/ACT
Pharmaceuticals,I-LEGISLATION/ACT
",",I-LEGISLATION/ACT
Inc.,I-LEGISLATION/ACT
(,O
the,O
(,O
the,O
Restated,O
Plan,O
),O
.,O
,O
On,O
March,O
2,O
",",O
2011,O
",",O
our,O
Compensation,O
Committee,O
and,O
our,O
Board,O
or,O
Directors,O
unanimously,O
approved,O
the,O
Restated,O
Plan,O
",",O
subject,O
to,O
Stockholder,O
approval,O
at,O
the,O
Meeting,O
.,O
,O
The,O
material,O
amendments,O
reflected,O
in,O
the,O
Restated,O
Plan,O
:,O
,O
In,O
2007,O
",",O
our,O
stockholders,O
approved,O
the,O
adoption,O
of,O
the,O
Second,I-LEGISLATION/ACT
Amendment,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Restatement,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
the,I-LEGISLATION/ACT
2001,I-LEGISLATION/ACT
Incentive,I-LEGISLATION/ACT
Award,I-LEGISLATION/ACT
Plan,I-LEGISLATION/ACT
",",O
which,O
authorized,O
us,O
to,O
issue,O
up,O
to,O
"19,728,333",O
shares,O
of,O
our,O
common,O
stock,O
pursuant,O
to,O
awards,O
under,O
the,O
Incentive,O
Award,O
Plan,O
.,O
,O
As,O
of,O
December,O
31,O
",",O
2010,O
",",O
there,O
were,O
"5,241,885",O
shares,O
remaining,O
available,O
for,O
grant,O
or,O
issuance,O
under,O
the,O
Incentive,O
Award,O
Plan,O
.,O
,O
Upon,O
stockholder,O
approval,O
of,O
the,O
Amendment,O
",",O
the,O
aggregate,O
number,O
of,O
shares,O
that,O
will,O
remain,O
available,O
for,O
issuance,O
under,O
the,O
Incentive,O
Award,O
Plan,O
after,O
December,O
31,O
",",O
2010,O
will,O
be,O
equal,O
to,O
"8,241,885",O
.,O
,O
If,O
our,O
stockholders,O
approve,O
the,O
proposed,O
increase,O
in,O
authorized,O
shares,O
",",O
such,O
approval,O
will,O
be,O
considered,O
approval,O
of,O
the,O
Incentive,O
Award,O
Plan,O
",",O
as,O
amended,O
",",O
for,O
purposes,O
of,O
Section,O
162,O
(,O
m,O
),O
and,O
Section,O
422,O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1986,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Code,O
),O
.,O
,O
If,O
the,O
proposed,O
increase,O
is,O
not,O
approved,O
by,O
the,O
stockholders,O
",",O
the,O
Incentive,O
Award,O
Plan,O
(,O
as,O
in,O
effect,O
immediately,O
prior,O
to,O
the,O
adoption,O
of,O
the,O
increase,O
),O
will,O
remain,O
in,O
full,O
force,O
and,O
effect,O
.,O
,O
By,O
seeking,O
stockholder,O
approval,O
of,O
the,O
Restated,O
Plan,O
",",O
the,O
Company,O
is,O
seeking,O
approval,O
of,O
the,O
material,O
terms,O
of,O
performance,O
criteria,O
under,O
the,O
Restated,O
Plan,O
for,O
purposes,O
of,O
Section,O
162,O
(,O
m,O
),O
of,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
.,O
,O
Stockholder,O
approval,O
of,O
such,O
terms,O
would,O
preserve,O
the,O
Company,O
s,O
ability,O
to,O
deduct,O
compensation,O
associated,O
with,O
future,O
performance-based,O
awards,O
made,O
under,O
the,O
Restated,O
Plan,O
under,O
Section,O
162,O
(,O
m,O
),O
.,O
,O
Section,O
162,O
(,O
m,O
),O
limits,O
the,O
deductions,O
a,O
publicly-held,O
company,O
can,O
claim,O
for,O
compensation,O
in,O
excess,O
of,O
$,O
1,O
million,O
paid,O
in,O
a,O
given,O
year,O
to,O
its,O
chief,O
executive,O
officer,O
and,O
its,O
three,O
other,O
most,O
highly-compensated,O
executive,O
officers,O
(,O
other,O
than,O
its,O
chief,O
financial,O
officer,O
),O
(,O
these,O
officers,O
are,O
generally,O
referred,O
to,O
as,O
the,O
Covered,O
Employees,O
),O
.,O
,O
Performance-based,O
compensation,O
that,O
meets,O
certain,O
requirements,O
is,O
not,O
counted,O
against,O
the,O
$,O
1,O
million,O
deductibility,O
cap,O
.,O
,O
Stock,O
options,O
and,O
stock,O
appreciation,O
rights,O
qualify,O
as,O
performance-based,O
compensation,O
if,O
they,O
are,O
granted,O
at,O
an,O
exercise,O
price,O
equal,O
to,O
the,O
fair,O
market,O
value,O
of,O
our,O
common,O
stock,O
on,O
the,O
date,O
of,O
grant,O
.,O
,O
Other,O
awards,O
that,O
the,O
Company,O
may,O
grant,O
under,O
the,O
Restated,O
Plan,O
may,O
qualify,O
as,O
performance-based,O
compensation,O
if,O
the,O
payment,O
",",O
retention,O
or,O
vesting,O
of,O
the,O
award,O
is,O
subject,O
to,O
the,O
achievement,O
during,O
a,O
performance,O
period,O
of,O
performance,O
goals,O
selected,O
by,O
the,O
Compensation,O
Committee,O
.,O
,O
The,O
Compensation,O
Committee,O
retains,O
the,O
discretion,O
to,O
set,O
the,O
level,O
of,O
performance,O
for,O
a,O
given,O
performance,O
measure,O
under,O
a,O
performance-based,O
award,O
.,O
,O
For,O
such,O
awards,O
to,O
qualify,O
as,O
performance-based,O
compensation,O
",",O
the,O
shareholders,O
must,O
approve,O
the,O
material,O
terms,O
of,O
the,O
performance,O
criteria,O
every,O
five,O
years,O
.,O
,O
For,O
a,O
discussion,O
of,O
the,O
performance,O
criteria,O
for,O
which,O
approval,O
is,O
being,O
sought,O
",",O
please,O
see,O
the,O
discussion,O
under,O
Performance-Based,O
Awards,O
below,O
.,O
,O
If,O
the,O
Restated,O
Plan,O
is,O
not,O
approved,O
",",O
its,O
provisions,O
will,O
not,O
become,O
effective,O
.,O
,O
In,O
that,O
case,O
",",O
the,O
Third,I-LEGISLATION/ACT
Amendment,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Restatement,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
the,I-LEGISLATION/ACT
2001,I-LEGISLATION/ACT
Incentive,I-LEGISLATION/ACT
Award,I-LEGISLATION/ACT
Plan,I-LEGISLATION/ACT
as,O
in,O
existence,O
prior,O
to,O
its,O
amendment,O
and,O
restatement,O
in,O
March,O
2011,O
will,O
continue,O
in,O
effect,O
.,O
,O
The,O
Restated,O
Plan,O
is,O
not,O
subject,O
to,O
the,O
provisions,O
of,O
ERISA,I-LEGISLATION/ACT
",",O
and,O
is,O
not,O
a,O
qualified,O
plan,O
under,O
Section,O
401,O
(,O
a,O
),O
of,O
the,O
Code,O
.,O
,O
The,O
principal,O
features,O
of,O
the,O
Restated,O
Plan,O
are,O
summarized,O
below,O
",",O
but,O
the,O
summary,O
is,O
qualified,O
in,O
its,O
entirety,O
by,O
reference,O
to,O
the,O
Restated,O
Plan,O
and,O
the,O
various,O
award,O
agreements,O
used,O
thereunder,O
.,O
,O
The,O
proposed,O
Restated,O
Plan,O
is,O
attached,O
as,O
Appendix,O
B,O
to,O
this,O
proxy,O
statement,O
.,O
,O
The,O
following,O
is,O
a,O
general,O
summary,O
under,O
current,O
law,O
of,O
the,O
material,O
federal,O
income,O
tax,O
consequences,O
to,O
an,O
employee,O
",",O
director,O
or,O
consultant,O
granted,O
an,O
award,O
under,O
the,O
Restated,O
Plan,O
.,O
,O
This,O
summary,O
deals,O
with,O
the,O
general,O
federal,O
income,O
tax,O
principles,O
that,O
apply,O
and,O
is,O
provided,O
for,O
general,O
information,O
only,O
.,O
,O
Alternative,O
minimum,O
tax,O
and,O
other,O
kinds,O
of,O
taxes,O
",",O
such,O
as,O
state,O
",",O
local,O
and,O
foreign,O
income,O
taxes,O
and,O
federal,O
employment,O
taxes,O
",",O
are,O
not,O
discussed,O
.,O
,O
Tax,O
laws,O
are,O
complex,O
and,O
subject,O
to,O
change,O
and,O
may,O
vary,O
depending,O
on,O
individual,O
circumstances,O
and,O
from,O
locality,O
to,O
locality,O
.,O
,O
The,O
foregoing,O
summary,O
with,O
respect,O
to,O
federal,O
income,O
taxation,O
is,O
not,O
intended,O
to,O
be,O
complete,O
and,O
does,O
not,O
take,O
into,O
account,O
federal,O
employment,O
tax,O
or,O
state,O
",",O
local,O
or,O
foreign,O
tax,O
implications,O
.,O
,O
Because,O
the,O
grant,O
of,O
awards,O
under,O
the,O
Restated,O
Plan,O
is,O
subject,O
to,O
the,O
discretion,O
of,O
the,O
Administrator,O
",",O
the,O
number,O
of,O
awards,O
that,O
may,O
be,O
granted,O
to,O
employees,O
and,O
directors,O
under,O
the,O
Restated,O
Plan,O
for,O
the,O
upcoming,O
year,O
can,O
not,O
be,O
determined,O
at,O
this,O
time,O
.,O
,O
Future,O
option,O
exercise,O
prices,O
under,O
the,O
Restated,O
Plan,O
are,O
also,O
not,O
determinable,O
because,O
they,O
will,O
be,O
based,O
upon,O
the,O
fair,O
market,O
value,O
of,O
shares,O
of,O
our,O
common,O
stock,O
on,O
the,O
grant,O
date,O
.,O
,O
However,O
",",O
for,O
the,O
sake,O
of,O
illustration,O
",",O
the,O
following,O
sets,O
forth,O
the,O
grants,O
that,O
such,O
individuals,O
received,O
under,O
the,O
predecessor,O
plan,O
to,O
the,O
Fourth,I-LEGISLATION/ACT
Amendment,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Restatement,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
the,I-LEGISLATION/ACT
2001,I-LEGISLATION/ACT
Incentive,I-LEGISLATION/ACT
Award,I-LEGISLATION/ACT
Plan,I-LEGISLATION/ACT
in,O
March,O
",",O
2011,O
(,O
excluding,O
the,O
settlement,O
in,O
March,O
2011,O
of,O
any,O
2010,O
Performance,O
Awards,O
),O
:,O
,O
In,O
order,O
to,O
approve,O
the,O
proposed,O
Restated,O
Plan,O
:,O
(,O
i,O
),O
greater,O
than,O
50,O
%,O
in,O
interest,O
of,O
all,O
securities,O
entitled,O
to,O
vote,O
on,O
the,O
proposal,O
must,O
cast,O
a,O
vote,O
on,O
the,O
proposal,O
",",O
and,O
(,O
ii,O
),O
a,O
majority,O
of,O
such,O
votes,O
cast,O
must,O
vote,O
for,O
the,O
Amendment,O
.,O
,O
Votes,O
for,O
and,O
against,O
and,O
abstentions,O
count,O
as,O
votes,O
cast,O
",",O
while,O
broker,O
non-votes,O
do,O
not,O
count,O
as,O
votes,O
cast,O
.,O
,O
All,O
outstanding,O
shares,O
",",O
including,O
broker,O
non-votes,O
",",O
count,O
as,O
shares,O
entitled,O
to,O
vote,O
.,O
,O
Thus,O
",",O
the,O
total,O
sum,O
of,O
votes,O
for,O
",",O
plus,O
votes,O
against,O
",",O
plus,O
abstentions,O
",",O
which,O
is,O
referred,O
to,O
as,O
the,O
NYSE,I-BUSINESS
Votes,O
Cast,O
",",O
must,O
be,O
greater,O
than,O
50,O
%,O
of,O
the,O
total,O
outstanding,O
shares,O
of,O
our,O
common,O
stock,O
.,O
,O
Once,O
satisfied,O
",",O
the,O
number,O
of,O
votes,O
for,O
the,O
proposal,O
must,O
be,O
greater,O
than,O
50,O
%,O
of,O
NYSE,I-BUSINESS
Votes,O
Cast,O
.,O
,O
Thus,O
",",O
abstentions,O
have,O
the,O
same,O
affect,O
as,O
a,O
vote,O
against,O
the,O
proposal,O
.,O
,O
Brokers,O
do,O
not,O
have,O
discretionary,O
authority,O
to,O
vote,O
shares,O
on,O
this,O
proposal,O
without,O
direction,O
from,O
the,O
beneficial,O
owner,O
.,O
,O
Thus,O
",",O
broker,O
non-votes,O
will,O
likely,O
result,O
on,O
this,O
proposal,O
and,O
broker,O
non-votes,O
could,O
impair,O
our,O
ability,O
to,O
satisfy,O
the,O
requirement,O
that,O
votes,O
cast,O
represent,O
over,O
50,O
%,O
of,O
our,O
outstanding,O
shares,O
of,O
our,O
common,O
stock,O
.,O
,O
The,O
Board,O
of,O
Directors,O
unanimously,O
recommends,O
a,O
vote,O
FOR,O
approval,O
of,O
the,O
proposed,O
Fourth,I-LEGISLATION/ACT
Amended,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Restated,I-LEGISLATION/ACT
2001,I-LEGISLATION/ACT
Incentive,I-LEGISLATION/ACT
Award,I-LEGISLATION/ACT
Plan,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
Watson,I-LEGISLATION/ACT
Pharmaceuticals,I-LEGISLATION/ACT
",",I-LEGISLATION/ACT
Inc.,I-LEGISLATION/ACT
.,O
,O
The,O
recently,O
enacted,O
Dodd-Frank,I-LEGISLATION/ACT
Wall,I-LEGISLATION/ACT
Street,I-LEGISLATION/ACT
Reform,I-LEGISLATION/ACT
and,I-LEGISLATION/ACT
Consumer,I-LEGISLATION/ACT
Protection,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
2010,I-LEGISLATION/ACT
(,O
the,O
Dodd-Frank,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
enables,O
our,O
stockholders,O
to,O
vote,O
to,O
approve,O
",",O
on,O
an,O
advisory,O
(,O
non-binding,O
),O
basis,O
",",O
the,O
compensation,O
of,O
our,O
Named,O
Executive,O
Officers,O
as,O
disclosed,O
in,O
this,O
Proxy,O
Statement,O
in,O
accordance,O
with,O
the,O
SEC,I-GOVERNMENT
s,O
rules,O
.,O
,O
We,O
are,O
asking,O
our,O
stockholders,O
to,O
provide,O
advisory,O
approval,O
of,O
the,O
compensation,O
of,O
our,O
Named,O
Executive,O
Officers,O
(,O
which,O
consist,O
of,O
our,O
Chief,O
Executive,O
Officer,O
",",O
Chief,O
Financial,O
Officer,O
and,O
our,O
next,O
three,O
highest,O
paid,O
executives,O
),O
",",O
as,O
such,O
compensation,O
is,O
described,O
in,O
the,O
Compensation,O
Discussion,O
and,O
Analysis,O
section,O
",",O
the,O
tabular,O
disclosure,O
regarding,O
such,O
compensation,O
and,O
the,O
accompanying,O
narrative,O
disclosure,O
set,O
forth,O
in,O
this,O
Proxy,O
Statement,O
",",O
beginning,O
on,O
page,O
15,O
.,O
,O
Our,O
executive,O
compensation,O
programs,O
are,O
designed,O
to,O
enable,O
us,O
to,O
attract,O
",",O
motivate,O
and,O
retain,O
executive,O
talent,O
",",O
who,O
are,O
critical,O
to,O
our,O
success,O
.,O
,O
These,O
programs,O
link,O
compensation,O
to,O
the,O
achievement,O
of,O
pre-established,O
corporate,O
financial,O
performance,O
objectives,O
and,O
other,O
key,O
objectives,O
within,O
each,O
executive,O
s,O
area,O
of,O
responsibility,O
and,O
provide,O
long-term,O
incentive,O
compensation,O
that,O
focuses,O
our,O
executives,O
efforts,O
on,O
building,O
stockholder,O
value,O
by,O
aligning,O
their,O
interests,O
with,O
those,O
of,O
our,O
stockholders,O
.,O
,O
The,O
following,O
is,O
a,O
summary,O
of,O
some,O
of,O
the,O
key,O
points,O
of,O
our,O
executive,O
compensation,O
program,O
.,O
,O
We,O
urge,O
our,O
stockholders,O
to,O
review,O
the,O
Compensation,O
Discussion,O
and,O
Analysis,O
section,O
of,O
this,O
Proxy,O
Statement,O
and,O
executive-related,O
compensation,O
tables,O
for,O
more,O
information,O
.,O
,O
Our,O
board,O
believes,O
that,O
the,O
information,O
provided,O
above,O
and,O
within,O
the,O
Compensation,O
Discussion,O
and,O
Analysis,O
section,O
of,O
this,O
Proxy,O
Statement,O
demonstrates,O
that,O
our,O
executive,O
compensation,O
program,O
was,O
designed,O
appropriately,O
and,O
is,O
working,O
to,O
ensure,O
that,O
management,O
s,O
interests,O
are,O
aligned,O
with,O
our,O
stockholders,O
interests,O
to,O
support,O
long-term,O
value,O
creation,O
.,O
,O
The,O
following,O
resolution,O
will,O
be,O
submitted,O
for,O
a,O
stockholder,O
vote,O
at,O
the,O
Meeting,O
:,O
,O
RESOLVED,O
",",O
that,O
the,O
stockholders,O
of,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
approve,O
",",O
on,O
an,O
advisory,O
basis,O
",",O
the,O
compensation,O
of,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
s,O
Named,O
Executive,O
Officers,O
",",O
as,O
disclosed,O
in,O
the,O
Compensation,O
Discussion,O
and,O
Analysis,O
",",O
compensation,O
tables,O
and,O
narrative,O
discussion,O
set,O
forth,O
in,O
this,O
Proxy,O
Statement,O
.,O
,O
The,O
say-on-pay,O
vote,O
is,O
advisory,O
",",O
and,O
therefore,O
not,O
binding,O
on,O
the,O
Company,O
",",O
the,O
Compensation,O
Committee,O
or,O
our,O
board,O
.,O
,O
However,O
",",O
the,O
Compensation,O
Committee,O
will,O
consider,O
the,O
outcome,O
of,O
the,O
vote,O
in,O
deciding,O
whether,O
to,O
take,O
any,O
action,O
as,O
a,O
result,O
of,O
the,O
vote,O
and,O
when,O
making,O
future,O
compensation,O
decisions,O
for,O
Named,O
Executive,O
Officers,O
.,O
,O
Our,O
Board,O
of,O
Directors,O
recommends,O
that,O
stockholders,O
vote,O
FOR,O
adoption,O
of,O
the,O
resolution,O
approving,O
the,O
compensation,O
of,O
the,O
Company,O
s,O
Named,O
Executive,O
Officers,O
",",O
as,O
described,O
in,O
the,O
Compensation,O
Discussion,O
and,O
Analysis,O
section,O
and,O
the,O
related,O
tabular,O
and,O
narrative,O
disclosure,O
set,O
forth,O
in,O
this,O
proxy,O
statement,O
.,O
,O
The,O
Dodd-Frank,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
also,O
enables,O
our,O
stockholders,O
to,O
indicate,O
how,O
frequently,O
they,O
believe,O
we,O
should,O
seek,O
an,O
advisory,O
vote,O
on,O
the,O
compensation,O
of,O
our,O
Named,O
Executive,O
Officers,O
.,O
,O
We,O
are,O
seeking,O
an,O
advisory,O
",",O
non-binding,O
determination,O
from,O
our,O
stockholders,O
as,O
to,O
the,O
frequency,O
with,O
which,O
stockholders,O
would,O
have,O
an,O
opportunity,O
to,O
provide,O
an,O
advisory,O
approval,O
of,O
our,O
executive,O
compensation,O
program,O
.,O
,O
We,O
are,O
providing,O
stockholders,O
the,O
option,O
of,O
selecting,O
a,O
frequency,O
of,O
one,O
",",O
two,O
or,O
three,O
years,O
",",O
or,O
abstaining,O
.,O
,O
While,O
we,O
will,O
continue,O
to,O
monitor,O
developments,O
in,O
this,O
area,O
",",O
the,O
Board,O
currently,O
plans,O
to,O
seek,O
an,O
advisory,O
vote,O
on,O
executive,O
compensation,O
every,O
year,O
.,O
,O
We,O
believe,O
that,O
this,O
frequency,O
is,O
appropriate,O
because,O
it,O
will,O
enable,O
our,O
stockholders,O
to,O
vote,O
",",O
on,O
an,O
advisory,O
basis,O
",",O
on,O
the,O
most,O
recent,O
executive,O
compensation,O
information,O
that,O
is,O
presented,O
in,O
our,O
proxy,O
statement,O
",",O
leading,O
to,O
a,O
more,O
meaningful,O
and,O
coherent,O
communication,O
between,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
and,O
our,O
stockholders,O
on,O
the,O
compensation,O
of,O
our,O
Named,O
Executive,O
Officers,O
.,O
,O
The,O
Board,O
s,O
determination,O
was,O
further,O
based,O
on,O
the,O
premise,O
that,O
this,O
recommendation,O
could,O
be,O
modified,O
in,O
future,O
years,O
if,O
it,O
becomes,O
apparent,O
that,O
an,O
annual,O
frequency,O
vote,O
is,O
not,O
meaningful,O
",",O
is,O
burdensome,O
or,O
is,O
more,O
frequent,O
than,O
recommended,O
by,O
best,O
corporate,O
governance,O
practices,O
.,O
,O
We,O
will,O
consider,O
stockholders,O
to,O
have,O
expressed,O
a,O
non-binding,O
preference,O
for,O
the,O
frequency,O
that,O
receives,O
the,O
highest,O
number,O
of,O
favorable,O
votes,O
.,O
,O
Due,O
to,O
the,O
non-binding,O
nature,O
of,O
this,O
preference,O
",",O
the,O
Board,O
may,O
decide,O
that,O
it,O
is,O
in,O
the,O
best,O
interests,O
of,O
our,O
stockholders,O
and,O
the,O
Company,O
to,O
hold,O
a,O
non-binding,O
",",O
advisory,O
vote,O
on,O
the,O
compensation,O
of,O
our,O
Named,O
Executive,O
Officers,O
more,O
or,O
less,O
frequently,O
than,O
the,O
option,O
preferred,O
by,O
our,O
stockholders,O
.,O
,O
Our,O
Board,O
of,O
Directors,O
recommends,O
that,O
stockholders,O
vote,O
FOR,O
1,O
Year,O
as,O
the,O
frequency,O
for,O
which,O
stockholders,O
shall,O
have,O
an,O
advisory,O
vote,O
on,O
the,O
compensation,O
of,O
the,O
Company,O
s,O
Named,O
Executive,O
Officers,O
as,O
described,O
in,O
the,O
Compensation,O
Discussion,O
and,O
Analysis,O
section,O
and,O
the,O
related,O
tabular,O
and,O
narrative,O
disclosure,O
set,O
forth,O
in,O
the,O
proxy,O
statement,O
.,O
,O
The,O
firm,O
of,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
has,O
audited,O
our,O
consolidated,O
financial,O
statements,O
since,O
our,O
inception,O
and,O
the,O
Board,O
of,O
Directors,O
recommends,O
that,O
the,O
stockholders,O
ratify,O
the,O
appointment,O
of,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
to,O
audit,O
our,O
consolidated,O
financial,O
statements,O
for,O
the,O
fiscal,O
year,O
ending,O
December,O
31,O
",",O
2011,O
.,O
,O
Representatives,O
of,O
that,O
firm,O
are,O
expected,O
to,O
be,O
present,O
at,O
the,O
Meeting,O
with,O
the,O
opportunity,O
to,O
make,O
a,O
statement,O
if,O
they,O
desire,O
to,O
do,O
so,O
and,O
are,O
expected,O
to,O
be,O
available,O
to,O
respond,O
to,O
appropriate,O
questions,O
from,O
stockholders,O
.,O
,O
We,O
have,O
been,O
informed,O
by,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
that,O
neither,O
the,O
firm,O
nor,O
any,O
of,O
its,O
members,O
or,O
their,O
associates,O
has,O
any,O
direct,O
financial,O
interest,O
or,O
material,O
indirect,O
financial,O
interest,O
in,O
us,O
or,O
our,O
affiliates,O
.,O
,O
Stockholder,O
ratification,O
of,O
the,O
appointment,O
of,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
as,O
our,O
independent,O
registered,O
public,O
accounting,O
firm,O
is,O
not,O
required,O
by,O
our,O
Bylaws,O
or,O
otherwise,O
.,O
,O
However,O
",",O
the,O
Board,O
of,O
Directors,O
is,O
submitting,O
the,O
appointment,O
of,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
to,O
the,O
stockholders,O
entitled,O
to,O
vote,O
at,O
the,O
Meeting,O
for,O
ratification,O
as,O
a,O
matter,O
of,O
good,O
corporate,O
practice,O
.,O
,O
If,O
the,O
stockholders,O
fail,O
to,O
ratify,O
the,O
appointment,O
",",O
the,O
Audit,O
Committee,O
will,O
reconsider,O
whether,O
or,O
not,O
to,O
retain,O
that,O
firm,O
.,O
,O
Even,O
if,O
the,O
appointment,O
is,O
ratified,O
",",O
the,O
Audit,O
Committee,O
in,O
its,O
discretion,O
may,O
direct,O
the,O
appointment,O
of,O
a,O
different,O
independent,O
registered,O
public,O
accounting,O
firm,O
at,O
any,O
time,O
during,O
the,O
year,O
if,O
it,O
determines,O
that,O
such,O
a,O
change,O
would,O
be,O
in,O
our,O
best,O
interests,O
and,O
in,O
the,O
best,O
interests,O
of,O
our,O
stockholders,O
.,O
,O
In,O
order,O
to,O
ratify,O
the,O
selection,O
of,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
as,O
the,O
Company,O
s,O
independent,O
registered,O
public,O
accounting,O
firm,O
for,O
the,O
fiscal,O
year,O
ending,O
December,O
31,O
",",O
2011,O
",",O
the,O
affirmative,O
vote,O
of,O
a,O
majority,O
of,O
the,O
stock,O
voting,O
in,O
person,O
or,O
by,O
proxy,O
on,O
this,O
proposal,O
is,O
required,O
.,O
,O
Abstentions,O
",",O
which,O
do,O
not,O
represent,O
voting,O
power,O
",",O
will,O
have,O
no,O
effect,O
on,O
this,O
proposal,O
.,O
,O
The,O
ratification,O
of,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
is,O
a,O
matter,O
on,O
which,O
a,O
broker,O
or,O
other,O
nominee,O
has,O
discretionary,O
voting,O
authority,O
",",O
and,O
thus,O
",",O
broker,O
non-votes,O
will,O
not,O
result,O
from,O
this,O
proposal,O
.,O
,O
The,O
Board,O
of,O
Directors,O
unanimously,O
recommends,O
a,O
vote,O
FOR,O
ratification,O
of,O
the,O
appointment,O
of,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
as,O
our,O
independent,O
registered,O
public,O
accounting,O
firm,O
for,O
2011,O
.,O
,O
The,O
aggregate,O
fees,O
billed,O
by,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
",",O
our,O
independent,O
registered,O
public,O
accounting,O
firm,O
",",O
in,O
fiscal,O
years,O
2010,O
and,O
2009,O
were,O
as,O
follows,O
:,O
,O
Audit,O
Fees,O
include,O
professional,O
services,O
rendered,O
in,O
connection,O
with,O
the,O
annual,O
audits,O
of,O
our,O
financial,O
statements,O
and,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
the,O
review,O
of,O
the,O
financial,O
statements,O
included,O
in,O
our,O
Form,I-MISCELLANEOUS
10-Qs,I-MISCELLANEOUS
covering,O
quarterly,O
periods,O
during,O
the,O
related,O
year,O
and,O
for,O
Sarbanes-Oxley,I-LEGISLATION/ACT
advisory,O
time,O
.,O
,O
Additionally,O
",",O
Audit,O
Fees,O
include,O
other,O
services,O
that,O
only,O
an,O
independent,O
registered,O
public,O
accounting,O
firm,O
can,O
reasonably,O
provide,O
",",O
such,O
as,O
services,O
associated,O
with,O
SEC,I-GOVERNMENT
registration,O
statements,O
or,O
other,O
documents,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
Audit-Related,O
Fees,O
include,O
accounting,O
consultations,O
and,O
review,O
procedures,O
related,O
to,O
accounting,O
",",O
financial,O
reporting,O
or,O
disclosure,O
matters,O
not,O
classified,O
as,O
Audit,O
Fees,O
.,O
,O
Tax,O
Fees,O
include,O
tax,O
compliance,O
for,O
our,O
foreign,O
subsidiaries,O
",",O
tax,O
advice,O
in,O
connection,O
with,O
certain,O
acquisitions,O
and,O
other,O
tax,O
advice,O
and,O
tax,O
planning,O
services,O
.,O
,O
Tax,O
Fees,O
in,O
2010,O
include,O
$,O
"1,100,000",O
for,O
tax,O
advice,O
provided,O
in,O
connection,O
with,O
the,O
integration,O
of,O
recent,O
international,O
acquisitions,O
and,O
$,O
"250,000",O
for,O
services,O
provided,O
in,O
connection,O
with,O
an,O
IRS,I-GOVERNMENT
audit,O
",",O
transfer,O
pricing,O
and,O
other,O
tax,O
compliance,O
.,O
,O
Tax,O
Fees,O
in,O
2009,O
include,O
$,O
"650,000",O
for,O
services,O
in,O
connection,O
with,O
the,O
Arrow,I-BUSINESS
Acquisition,I-BUSINESS
and,O
$,O
"143,200",O
for,O
services,O
provided,O
in,O
connection,O
with,O
the,O
IRS,I-GOVERNMENT
audit,O
.,O
,O
All,O
Other,O
Fees,O
in,O
2010,O
and,O
2009,O
include,O
subscription,O
fees,O
for,O
an,O
accounting,O
and,O
auditing,O
research,O
reference,O
tool,O
.,O
,O
The,O
Audit,O
Committee,O
believes,O
that,O
the,O
provision,O
of,O
all,O
non-audit,O
services,O
rendered,O
is,O
compatible,O
with,O
maintaining,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
s,O
independence,O
.,O
,O
The,O
Audit,O
Committee,O
approved,O
all,O
audit,O
and,O
non-audit,O
services,O
provided,O
by,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
in,O
2010,O
.,O
,O
The,O
Audit,O
Committee,O
has,O
adopted,O
a,O
policy,O
to,O
pre-approve,O
all,O
audit,O
and,O
certain,O
permissible,O
non-audit,O
services,O
provided,O
by,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
.,O
,O
Pre-approval,O
is,O
generally,O
provided,O
for,O
up,O
to,O
one,O
year,O
",",O
and,O
any,O
pre-approval,O
is,O
detailed,O
as,O
to,O
type,O
of,O
services,O
to,O
be,O
provided,O
by,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
and,O
the,O
estimated,O
fees,O
related,O
to,O
these,O
services,O
.,O
,O
During,O
the,O
approval,O
process,O
",",O
the,O
Audit,O
Committee,O
considers,O
the,O
impact,O
of,O
the,O
types,O
of,O
services,O
and,O
the,O
related,O
fees,O
on,O
the,O
independence,O
of,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
.,O
,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
and,O
management,O
are,O
required,O
to,O
periodically,O
report,O
to,O
the,O
full,O
Audit,O
Committee,O
regarding,O
the,O
extent,O
of,O
services,O
provided,O
by,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
",",O
in,O
accordance,O
with,O
the,O
pre-approval,O
policy,O
and,O
the,O
fees,O
for,O
the,O
services,O
performed,O
.,O
,O
During,O
the,O
year,O
",",O
circumstances,O
may,O
arise,O
when,O
it,O
may,O
become,O
necessary,O
to,O
engage,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
for,O
additional,O
services,O
not,O
contemplated,O
in,O
the,O
pre-approval,O
.,O
,O
In,O
those,O
instances,O
",",O
the,O
Audit,O
Committee,O
requires,O
specific,O
pre-approval,O
by,O
the,O
Audit,O
Committee,O
or,O
its,O
delegate,O
",",O
the,O
Audit,O
Committee,O
chair,O
",",O
before,O
engaging,O
PricewaterhouseCoopers,I-BUSINESS
LLP,I-BUSINESS
for,O
such,O
services,O
.,O
,O
The,O
following,O
Report,O
of,O
the,O
Audit,O
Committee,O
does,O
not,O
constitute,O
soliciting,O
material,O
and,O
should,O
not,O
be,O
deemed,O
filed,O
or,O
incorporated,O
by,O
reference,O
into,O
any,O
other,O
Company,O
filing,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
or,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
except,O
to,O
the,O
extent,O
we,O
specifically,O
incorporate,O
this,O
Report,O
by,O
reference,O
therein,O
.,O
,O
The,O
primary,O
function,O
of,O
the,O
Audit,O
Committee,O
is,O
to,O
assist,O
the,O
Board,O
of,O
Directors,O
in,O
fulfilling,O
its,O
oversight,O
of,O
:,O
,O
Additionally,O
",",O
the,O
Audit,O
Committee,O
serves,O
as,O
an,O
independent,O
and,O
objective,O
party,O
that,O
:,O
,O
The,O
Audit,O
Committee,O
Charter,O
describes,O
in,O
greater,O
detail,O
the,O
full,O
responsibilities,O
of,O
the,O
Audit,O
Committee,O
",",O
and,O
is,O
available,O
under,O
the,O
Investors,O
section,O
of,O
our,O
website,O
at,O
http,O
:,O
//www.watson.com,O
.,O
,O
The,O
Audit,O
Committee,O
reviews,O
the,O
Audit,O
Committee,O
Charter,O
annually,O
prior,O
to,O
Watson,I-BUSINESS
s,O
Annual,O
Stockholders,O
Meeting,O
and,O
at,O
such,O
other,O
times,O
as,O
deemed,O
appropriate,O
by,O
the,O
Audit,O
Committee,O
.,O
,O
The,O
Audit,O
Committee,O
schedules,O
its,O
meetings,O
and,O
implements,O
procedures,O
designed,O
to,O
ensure,O
that,O
during,O
the,O
course,O
of,O
each,O
fiscal,O
year,O
it,O
devotes,O
appropriate,O
attention,O
to,O
each,O
of,O
the,O
matters,O
assigned,O
to,O
it,O
under,O
the,O
Audit,O
Committee,O
Charter,O
.,O
,O
To,O
this,O
end,O
",",O
the,O
Audit,O
Committee,O
met,O
each,O
quarter,O
",",O
and,O
five,O
times,O
in,O
total,O
",",O
during,O
2010,O
.,O
,O
In,O
addition,O
to,O
the,O
foregoing,O
",",O
the,O
Audit,O
Committee,O
makes,O
itself,O
available,O
to,O
Watson,I-BUSINESS
and,O
its,O
internal,O
and,O
external,O
auditors,O
during,O
the,O
course,O
of,O
the,O
year,O
to,O
discuss,O
any,O
issues,O
believed,O
by,O
such,O
parties,O
to,O
warrant,O
the,O
attention,O
of,O
the,O
Audit,O
Committee,O
.,O
,O
In,O
carrying,O
out,O
its,O
responsibilities,O
",",O
the,O
Audit,O
Committee,O
acts,O
in,O
an,O
oversight,O
capacity,O
.,O
,O
Management,O
has,O
the,O
primary,O
responsibility,O
for,O
the,O
financial,O
reporting,O
process,O
",",O
including,O
the,O
system,O
of,O
internal,O
controls,O
",",O
and,O
for,O
preparation,O
of,O
consolidated,O
financial,O
statements,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
.,O
,O
Watson,I-BUSINESS
s,O
independent,O
registered,O
public,O
accounting,O
firm,O
is,O
responsible,O
for,O
auditing,O
those,O
financial,O
statements,O
and,O
expressing,O
an,O
opinion,O
as,O
to,O
their,O
conformity,O
with,O
generally,I-MISCELLANEOUS
accepted,I-MISCELLANEOUS
accounting,I-MISCELLANEOUS
principles,I-MISCELLANEOUS
.,O
,O
In,O
performing,O
its,O
oversight,O
responsibilities,O
in,O
connection,O
with,O
Watson,I-BUSINESS
s,O
2010,O
audit,O
",",O
the,O
Audit,O
Committee,O
has,O
:,O
,O
Based,O
on,O
the,O
review,O
and,O
discussions,O
above,O
",",O
the,O
Audit,O
Committee,O
has,O
recommended,O
that,O
the,O
Board,O
of,O
Directors,O
include,O
the,O
audited,O
consolidated,O
financial,O
statements,O
in,O
Watson,I-BUSINESS
s,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
year,O
ended,O
December,O
31,O
",",O
2010,O
.,O
,O
Section,O
16,O
(,O
a,O
),O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
requires,O
our,O
directors,O
and,O
officers,O
",",O
and,O
persons,O
who,O
own,O
more,O
than,O
10,O
%,O
of,O
a,O
registered,O
class,O
of,O
our,O
equity,O
securities,O
to,O
file,O
with,O
the,O
SEC,I-GOVERNMENT
reports,O
of,O
ownership,O
and,O
changes,O
in,O
ownership,O
of,O
our,O
common,O
stock,O
and,O
our,O
other,O
equity,O
securities,O
.,O
,O
Officers,O
",",O
directors,O
and,O
greater-than-10,O
%,O
stockholders,O
are,O
required,O
by,O
SEC,I-GOVERNMENT
regulations,O
to,O
furnish,O
us,O
with,O
copies,O
of,O
all,O
Section,O
16,O
(,O
a,O
),O
forms,O
they,O
file,O
.,O
,O
Based,O
solely,O
on,O
review,O
of,O
the,O
copies,O
of,O
such,O
reports,O
furnished,O
to,O
us,O
or,O
written,O
representations,O
that,O
no,O
other,O
reports,O
were,O
required,O
",",O
we,O
believe,O
that,O
during,O
the,O
2010,O
fiscal,O
year,O
all,O
filing,O
requirements,O
applicable,O
to,O
our,O
officers,O
",",O
directors,O
and,O
greater-than-10,O
%,O
beneficial,O
owners,O
were,O
complied,O
with,O
and,O
all,O
filings,O
were,O
timely,O
filed,O
.,O
,O
We,O
review,O
all,O
relationships,O
and,O
transactions,O
in,O
which,O
we,O
and,O
our,O
directors,O
and,O
executive,O
officers,O
or,O
their,O
immediate,O
family,O
members,O
are,O
participants,O
to,O
determine,O
whether,O
such,O
persons,O
have,O
a,O
direct,O
or,O
indirect,O
material,O
interest,O
.,O
,O
Pursuant,O
to,O
our,O
written,O
Related,O
Person,O
Transaction,O
Policies,O
and,O
Procedures,O
",",O
our,O
legal,O
department,O
is,O
primarily,O
responsible,O
for,O
the,O
implementation,O
of,O
processes,O
and,O
controls,O
to,O
obtain,O
information,O
from,O
the,O
directors,O
and,O
executive,O
officers,O
with,O
respect,O
to,O
related,O
person,O
transactions,O
and,O
for,O
then,O
determining,O
",",O
based,O
on,O
the,O
facts,O
and,O
circumstances,O
",",O
whether,O
we,O
or,O
a,O
related,O
person,O
has,O
a,O
direct,O
or,O
indirect,O
material,O
interest,O
in,O
the,O
transaction,O
.,O
,O
In,O
determining,O
whether,O
a,O
proposed,O
transaction,O
is,O
a,O
related,O
person,O
transaction,O
",",O
our,O
legal,O
department,O
assesses,O
:,O
,O
(,O
i,O
),O
the,O
related,O
person,O
s,O
relationship,O
to,O
us,O
;,O
,O
(,O
ii,O
),O
the,O
related,O
person,O
s,O
interest,O
in,O
the,O
transaction,O
;,O
,O
(,O
iii,O
),O
the,O
material,O
facts,O
of,O
the,O
proposed,O
transaction,O
",",O
including,O
the,O
proposed,O
aggregate,O
value,O
of,O
such,O
transaction,O
or,O
",",O
in,O
the,O
case,O
of,O
indebtedness,O
",",O
the,O
amount,O
of,O
principal,O
that,O
would,O
be,O
involved,O
;,O
,O
(,O
iv,O
),O
the,O
benefits,O
to,O
us,O
of,O
the,O
proposed,O
transaction,O
;,O
,O
(,O
vi,O
),O
whether,O
the,O
proposed,O
transaction,O
is,O
on,O
terms,O
that,O
are,O
comparable,O
to,O
the,O
terms,O
available,O
to,O
an,O
unrelated,O
third,O
party,O
or,O
to,O
employees,O
generally,O
.,O
,O
If,O
our,O
legal,O
department,O
determines,O
that,O
the,O
proposed,O
transaction,O
is,O
a,O
related,O
person,O
transaction,O
",",O
the,O
proposed,O
transaction,O
is,O
submitted,O
to,O
our,O
Nominating,O
and,O
Corporation,O
Governance,O
Committee,O
for,O
consideration,O
.,O
,O
The,O
Nominating,O
and,O
Corporation,O
Governance,O
Committee,O
may,O
only,O
approve,O
or,O
ratify,O
those,O
transactions,O
that,O
are,O
in,O
",",O
or,O
are,O
not,O
inconsistent,O
with,O
",",O
our,O
best,O
interests,O
and,O
the,O
best,O
interests,O
of,O
our,O
stockholders,O
",",O
as,O
the,O
Nominating,O
and,O
Corporation,O
Governance,O
Committee,O
determines,O
in,O
good,O
faith,O
.,O
,O
As,O
required,O
under,O
SEC,I-GOVERNMENT
rules,O
",",O
we,O
disclose,O
in,O
our,O
proxy,O
statement,O
any,O
related,O
person,O
transactions,O
determined,O
to,O
be,O
directly,O
or,O
indirectly,O
material,O
to,O
us,O
or,O
a,O
related,O
person,O
.,O
,O
No,O
reportable,O
transactions,O
occurred,O
in,O
2010,O
",",O
except,O
as,O
described,O
below,O
.,O
,O
On,O
December,O
2,O
",",O
2009,O
",",O
we,O
acquired,O
Arrow,I-BUSINESS
No,I-BUSINESS
.,O
,O
as,O
part,O
of,O
our,O
acquisition,O
of,O
the,O
Arrow,I-BUSINESS
Group,I-BUSINESS
.,O
,O
7,O
had,O
an,O
existing,O
lease,O
for,O
a,O
four,O
story,O
office,O
building,O
in,O
London,I-LOCATION
with,O
Jacques,I-BUSINESS
Ltd.,I-BUSINESS
.,O
,O
The,O
lease,O
is,O
for,O
our,O
premises,O
at,O
7,O
Cavendish,I-LOCATION
Square,I-LOCATION
in,O
London,I-LOCATION
",",O
provides,O
for,O
an,O
annual,O
rental,O
payment,O
of,O
"£291,915",O
and,O
has,O
a,O
term,O
which,O
expires,O
in,O
2016,O
(,O
with,O
an,O
option,O
to,O
extend,O
for,O
an,O
additional,O
ten,O
years,O
),O
.,O
,O
Tabatznik,I-PERSON
",",O
who,O
is,O
one,O
of,O
our,O
directors,O
",",O
may,O
be,O
deemed,O
to,O
have,O
an,O
indirect,O
",",O
non-controlling,O
discretionary,O
beneficial,O
interest,O
in,O
Jacques,I-BUSINESS
Ltd.,I-BUSINESS
.,O
,O
We,O
expect,O
to,O
hold,O
the,O
2012,O
Annual,O
Meeting,O
of,O
Stockholders,O
on,O
May,O
11,O
",",O
2012,O
.,O
,O
Under,O
Rule,O
14a-8,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
stockholder,O
proposals,O
to,O
be,O
included,O
in,O
the,O
proxy,O
statement,O
for,O
the,O
2012,O
Annual,O
Meeting,O
of,O
Stockholders,O
must,O
be,O
received,O
by,O
our,O
Secretary,O
at,O
its,O
principal,O
executive,O
offices,O
no,O
later,O
than,O
December,O
2,O
",",O
2011,O
and,O
must,O
comply,O
with,O
the,O
requirements,O
of,O
Rule,O
14a-8,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
.,O
,O
In,O
addition,O
",",O
our,O
Bylaws,O
provide,O
that,O
rather,O
than,O
including,O
a,O
proposal,O
in,O
our,O
proxy,O
statement,O
as,O
discussed,O
above,O
",",O
a,O
stockholder,O
may,O
commence,O
his,O
or,O
her,O
own,O
proxy,O
solicitation,O
for,O
the,O
2012,O
Annual,O
Meeting,O
of,O
Stockholders,O
or,O
may,O
seek,O
to,O
nominate,O
a,O
candidate,O
for,O
election,O
as,O
a,O
director,O
.,O
,O
Additionally,O
",",O
a,O
stockholder,O
may,O
propose,O
business,O
for,O
consideration,O
at,O
such,O
meeting,O
by,O
delivering,O
written,O
notice,O
to,O
our,O
Secretary,O
at,O
our,O
principal,O
executive,O
offices,O
not,O
less,O
than,O
seventy,O
(,O
70,O
),O
days,O
nor,O
more,O
than,O
ninety,O
(,O
90,O
),O
days,O
prior,O
to,O
the,O
first,O
anniversary,O
of,O
the,O
preceding,O
year,O
s,O
annual,O
meeting,O
.,O
,O
Accordingly,O
",",O
the,O
stockholder,O
must,O
provide,O
written,O
notice,O
to,O
our,O
Secretary,O
no,O
earlier,O
than,O
February,O
13,O
",",O
2012,O
and,O
no,O
later,O
than,O
March,O
4,O
",",O
2012,O
in,O
order,O
to,O
provide,O
timely,O
notice,O
.,O
,O
Such,O
notice,O
must,O
contain,O
information,O
required,O
in,O
our,O
Bylaws,O
.,O
,O
As,O
of,O
the,O
date,O
of,O
this,O
proxy,O
statement,O
",",O
the,O
Board,O
of,O
Directors,O
knows,O
of,O
no,O
other,O
business,O
that,O
will,O
be,O
presented,O
for,O
consideration,O
at,O
the,O
Meeting,O
.,O
,O
If,O
other,O
proper,O
matters,O
are,O
presented,O
at,O
the,O
Meeting,O
",",O
however,O
",",O
it,O
is,O
the,O
intention,O
of,O
the,O
proxy,O
holders,O
named,O
in,O
the,O
enclosed,O
form,O
of,O
proxy,O
to,O
take,O
such,O
actions,O
as,O
shall,O
be,O
in,O
accordance,O
with,O
their,O
best,O
judgment,O
.,O
,O
Section,O
1.1,O
The,O
name,O
of,O
the,O
Corporation,O
is,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
Section,O
2.1,O
The,O
purpose,O
of,O
the,O
corporation,O
is,O
to,O
engage,O
in,O
any,O
lawful,O
act,O
or,O
activity,O
for,O
which,O
a,O
corporation,O
may,O
be,O
organized,O
under,O
the,O
Nevada,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
.,O
,O
Section,O
3.1,O
The,O
Corporation,O
is,O
authorized,O
to,O
issue,O
a,O
total,O
of,O
Five,O
Hundred,O
and,O
Two,O
Million,O
Five,O
Hundred,O
Thousand,O
(,O
"502,500,000",O
),O
shares,O
of,O
stock,O
",",O
Five,O
Hundred,O
Million,O
(,O
"500,000,000",O
),O
shares,O
of,O
which,O
shall,O
be,O
classified,O
as,O
common,O
stock,O
",",O
$,O
.0033,O
par,O
value,O
per,O
share,O
",",O
and,O
Two,O
Million,O
Five,O
Hundred,O
Thousand,O
(,O
"2,500,000",O
),O
shares,O
of,O
which,O
shall,O
be,O
classified,O
as,O
preferred,O
stock,O
",",O
no,O
par,O
value,O
per,O
share,O
.,O
,O
The,O
holders,O
of,O
both,O
classes,O
of,O
stock,O
shall,O
not,O
be,O
entitled,O
to,O
exercise,O
cumulative,O
voting,O
or,O
preemptive,O
rights,O
.,O
,O
Section,O
3.2,O
The,O
voting,O
powers,O
",",O
designations,O
",",O
preferences,O
",",O
limitation,O
",",O
restrictions,O
",",O
relative,O
rights,O
and,O
distinguishing,O
designation,O
in,O
respect,O
of,O
the,O
shares,O
of,O
the,O
preferred,O
stock,O
shall,O
be,O
as,O
stated,O
in,O
the,O
resolution,O
or,O
resolutions,O
providing,O
for,O
the,O
issuance,O
of,O
such,O
preferred,O
stock,O
adopted,O
or,O
to,O
be,O
adopted,O
by,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Corporation,O
pursuant,O
to,O
the,O
authority,O
hereby,O
expressly,O
vested,O
in,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Corporation,O
by,O
these,O
Amended,O
and,O
Restated,O
Articles,O
of,O
Incorporation,O
.,O
,O
Section,O
4.1,O
The,O
members,O
of,O
the,O
governing,O
board,O
shall,O
be,O
called,O
directors,O
of,O
the,O
Corporation,O
.,O
,O
The,O
number,O
of,O
directors,O
of,O
the,O
Corporation,O
shall,O
be,O
as,O
set,O
forth,O
in,O
the,O
By-Laws,O
of,O
the,O
Corporation,O
.,O
,O
Commencing,O
with,O
the,O
2012,O
annual,O
meeting,O
of,O
the,O
stockholders,O
of,O
the,O
Corporation,O
",",O
the,O
directors,O
whose,O
terms,O
expire,O
on,O
or,O
after,O
the,O
2012,O
meeting,O
shall,O
be,O
elected,O
annually,O
for,O
terms,O
expiring,O
at,O
the,O
next,O
succeeding,O
annual,O
meeting,O
.,O
,O
Directors,O
elected,O
at,O
the,O
2009,O
annual,O
meeting,O
of,O
stockholders,O
shall,O
hold,O
office,O
until,O
the,O
2012,O
annual,O
meeting,O
of,O
stockholders,O
;,O
directors,O
elected,O
at,O
the,O
2010,O
annual,O
meeting,O
of,O
stockholders,O
shall,O
hold,O
office,O
until,O
the,O
2013,O
annual,O
meeting,O
of,O
stockholders,O
and,O
directors,O
elected,O
at,O
the,O
2011,O
annual,O
meeting,O
shall,O
hold,O
office,O
until,O
the,O
2014,O
annual,O
meeting,O
of,O
stockholders,O
.,O
,O
A,O
director,O
shall,O
hold,O
office,O
until,O
his,O
successor,O
shall,O
be,O
elected,O
and,O
qualified,O
",",O
subject,O
",",O
however,O
",",O
to,O
prior,O
death,O
",",O
resignation,O
",",O
retirement,O
",",O
disqualification,O
or,O
removal,O
from,O
office,O
.,O
,O
The,O
annual,O
meeting,O
of,O
stockholders,O
shall,O
be,O
held,O
each,O
year,O
on,O
a,O
date,O
and,O
at,O
a,O
time,O
designated,O
by,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Corporation,O
.,O
,O
Section,O
4.2,O
Subject,O
to,O
the,O
rights,O
",",O
if,O
any,O
",",O
of,O
holders,O
of,O
any,O
series,O
of,O
Preferred,O
Stock,O
then,O
outstanding,O
",",O
any,O
vacancy,O
on,O
the,O
Board,O
of,O
Directors,O
that,O
results,O
from,O
an,O
increase,O
in,O
the,O
number,O
of,O
directors,O
or,O
by,O
reason,O
of,O
the,O
vacancy,O
may,O
be,O
filled,O
by,O
a,O
majority,O
of,O
the,O
Board,O
of,O
Directors,O
then,O
in,O
office,O
",",O
provided,O
that,O
a,O
quorum,O
is,O
present,O
",",O
and,O
any,O
other,O
vacancy,O
occurring,O
in,O
the,O
Board,O
of,O
Directors,O
may,O
be,O
filled,O
by,O
a,O
majority,O
of,O
the,O
directors,O
then,O
in,O
office,O
",",O
even,O
if,O
less,O
than,O
a,O
quorum,O
.,O
,O
Section,O
5.1,O
No,O
director,O
or,O
officer,O
of,O
the,O
Corporation,O
shall,O
be,O
personally,O
liable,O
to,O
the,O
Corporation,O
or,O
its,O
stockholders,O
for,O
monetary,O
damages,O
for,O
breach,O
of,O
fiduciary,O
duty,O
as,O
a,O
director,O
or,O
officer,O
",",O
except,O
for,O
liability,O
(,O
a,O
),O
for,O
acts,O
or,O
omissions,O
which,O
involve,O
intentional,O
misconduct,O
",",O
fraud,O
or,O
a,O
knowing,O
violation,O
of,O
law,O
;,O
or,O
(,O
b,O
),O
the,O
payment,O
of,O
distributions,O
in,O
violation,O
of,O
Section,O
78.300,O
of,O
the,O
Nevada,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
law,I-LEGISLATION/ACT
.,O
,O
Section,O
5.2,O
Any,O
repeal,O
or,O
modification,O
of,O
this,O
Article,O
V,O
by,O
the,O
stockholders,O
of,O
the,O
Corporation,O
shall,O
be,O
prospective,O
only,O
",",O
and,O
shall,O
not,O
adversely,O
affect,O
any,O
right,O
or,O
protection,O
of,O
a,O
director,O
or,O
officer,O
of,O
the,O
Corporation,O
existing,O
at,O
the,O
time,O
of,O
such,O
repeal,O
or,O
modification,O
.,O
,O
Section,O
6.1,O
To,O
the,O
extent,O
not,O
prohibited,O
by,O
law,O
",",O
the,O
Corporation,O
shall,O
indemnify,O
any,O
person,O
who,O
was,O
or,O
is,O
a,O
party,O
or,O
is,O
threatened,O
to,O
be,O
made,O
a,O
party,O
to,O
any,O
threatened,O
",",O
pending,O
or,O
completed,O
action,O
",",O
suit,O
or,O
proceeding,O
",",O
whether,O
civil,O
",",O
criminal,O
",",O
administrative,O
or,O
investigative,O
",",O
except,O
an,O
action,O
by,O
or,O
in,O
the,O
right,O
of,O
the,O
Corporation,O
",",O
by,O
reason,O
of,O
the,O
fact,O
that,O
he,O
is,O
or,O
was,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
the,O
Corporation,O
",",O
or,O
is,O
or,O
was,O
serving,O
at,O
the,O
request,O
of,O
the,O
Corporation,O
as,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
another,O
corporation,O
",",O
partnership,O
",",O
joint,O
venture,O
",",O
trust,O
or,O
other,O
enterprise,O
",",O
against,O
expenses,O
",",O
including,O
attorneys,O
fees,O
",",O
judgments,O
",",O
fines,O
and,O
amounts,O
paid,O
in,O
settlement,O
actually,O
and,O
reasonably,O
incurred,O
by,O
him,O
in,O
connection,O
with,O
the,O
action,O
",",O
suit,O
or,O
proceeding,O
if,O
he,O
acted,O
in,O
good,O
faith,O
and,O
in,O
a,O
manner,O
which,O
he,O
reasonably,O
believed,O
to,O
be,O
in,O
or,O
not,O
opposed,O
to,O
the,O
best,O
interests,O
of,O
the,O
Corporation,O
",",O
and,O
",",O
with,O
respect,O
to,O
any,O
criminal,O
action,O
or,O
proceeding,O
",",O
has,O
no,O
reasonable,O
cause,O
to,O
believe,O
his,O
conduct,O
was,O
unlawful,O
.,O
,O
The,O
termination,O
of,O
any,O
action,O
",",O
suit,O
or,O
proceeding,O
by,O
judgment,O
",",O
order,O
",",O
settlement,O
",",O
conviction,O
",",O
or,O
upon,O
a,O
plea,O
nolo,O
contendere,O
or,O
its,O
equivalent,O
",",O
does,O
not,O
",",O
of,O
itself,O
",",O
create,O
a,O
presumption,O
that,O
the,O
person,O
did,O
not,O
act,O
in,O
good,O
faith,O
and,O
in,O
a,O
manner,O
which,O
he,O
reasonably,O
believed,O
to,O
be,O
in,O
or,O
not,O
opposed,O
to,O
the,O
best,O
interests,O
of,O
the,O
Corporation,O
",",O
and,O
that,O
",",O
with,O
respect,O
to,O
any,O
criminal,O
action,O
or,O
proceeding,O
",",O
he,O
had,O
reasonable,O
cause,O
to,O
believe,O
that,O
his,O
conduct,O
was,O
unlawful,O
.,O
,O
Section,O
6.2,O
To,O
the,O
extent,O
not,O
prohibited,O
by,O
law,O
",",O
the,O
Corporation,O
shall,O
indemnify,O
any,O
person,O
who,O
was,O
or,O
is,O
a,O
party,O
or,O
is,O
threatened,O
to,O
be,O
made,O
a,O
party,O
to,O
any,O
threatened,O
",",O
pending,O
or,O
completed,O
action,O
or,O
suit,O
by,O
or,O
in,O
the,O
right,O
of,O
the,O
Corporation,O
to,O
procure,O
a,O
judgment,O
in,O
its,O
favor,O
by,O
reason,O
of,O
the,O
fact,O
that,O
he,O
is,O
or,O
was,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
the,O
Corporation,O
",",O
or,O
is,O
or,O
was,O
serving,O
at,O
the,O
request,O
of,O
the,O
Corporation,O
as,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
another,O
corporation,O
",",O
partnership,O
",",O
joint,O
venture,O
",",O
trust,O
or,O
other,O
enterprise,O
against,O
expenses,O
",",O
including,O
amounts,O
paid,O
in,O
settlement,O
and,O
attorneys,O
fees,O
actually,O
and,O
reasonably,O
incurred,O
by,O
him,O
in,O
connection,O
with,O
the,O
defense,O
or,O
settlement,O
of,O
the,O
action,O
or,O
suit,O
if,O
he,O
acted,O
in,O
good,O
faith,O
and,O
in,O
a,O
manner,O
which,O
he,O
reasonably,O
believed,O
to,O
be,O
in,O
or,O
not,O
opposed,O
to,O
the,O
best,O
interests,O
of,O
the,O
Corporation,O
.,O
,O
Indemnification,O
may,O
not,O
be,O
made,O
for,O
any,O
claim,O
issue,O
or,O
matter,O
as,O
to,O
which,O
such,O
a,O
person,O
has,O
been,O
adjudged,O
by,O
a,O
court,O
of,O
competent,O
jurisdiction,O
",",O
after,O
exhaustion,O
of,O
all,O
appeals,O
therefrom,O
to,O
be,O
liable,O
to,O
the,O
Corporation,O
or,O
for,O
amounts,O
paid,O
in,O
settlement,O
to,O
the,O
Corporation,O
",",O
unless,O
and,O
only,O
to,O
the,O
extent,O
that,O
the,O
court,O
in,O
which,O
the,O
action,O
or,O
suit,O
was,O
brought,O
or,O
other,O
court,O
of,O
competent,O
jurisdiction,O
determines,O
upon,O
application,O
that,O
in,O
view,O
of,O
all,O
the,O
circumstances,O
of,O
the,O
case,O
",",O
the,O
person,O
is,O
fairly,O
and,O
reasonably,O
entitled,O
to,O
indemnity,O
for,O
such,O
expenses,O
as,O
the,O
court,O
deems,O
proper,O
",",O
all,O
subject,O
to,O
the,O
restrictions,O
set,O
forth,O
in,O
Section,O
78.751,O
of,O
the,O
Nevada,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
.,O
,O
Section,O
6.3,O
To,O
the,O
extent,O
that,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
the,O
Corporation,O
has,O
been,O
successful,O
on,O
the,O
merits,O
or,O
otherwise,O
in,O
defense,O
of,O
any,O
action,O
",",O
suit,O
or,O
proceeding,O
referred,O
to,O
in,O
Sections,O
6.1,O
and,O
6.2,O
of,O
Article,O
VI,O
",",O
or,O
in,O
defense,O
of,O
any,O
claim,O
",",O
issue,O
or,O
matter,O
therein,O
",",O
he,O
must,O
be,O
indemnified,O
by,O
the,O
Corporation,O
against,O
expenses,O
",",O
including,O
attorneys,O
fees,O
",",O
actually,O
and,O
reasonably,O
incurred,O
by,O
him,O
in,O
connection,O
with,O
the,O
defense,O
.,O
,O
opinion,O
if,O
a,O
majority,O
vote,O
of,O
a,O
quorum,O
consisting,O
of,O
directors,O
who,O
were,O
not,O
parties,O
to,O
the,O
act,O
",",O
suit,O
or,O
proceeding,O
so,O
orders,O
;,O
or,O
(,O
d,O
),O
independent,O
legal,O
counsel,O
in,O
a,O
written,O
opinion,O
if,O
a,O
quorum,O
consisting,O
of,O
directors,O
who,O
were,O
not,O
parties,O
to,O
the,O
act,O
",",O
suit,O
or,O
proceeding,O
can,O
not,O
be,O
obtained,O
.,O
,O
Section,O
6.5,O
The,O
Corporation,O
shall,O
",",O
from,O
time,O
to,O
time,O
",",O
reimburse,O
or,O
advance,O
to,O
any,O
director,O
or,O
officer,O
or,O
other,O
person,O
entitled,O
to,O
indemnification,O
hereunder,O
the,O
funds,O
necessary,O
for,O
payment,O
of,O
expenses,O
",",O
including,O
attorneys,O
fees,O
and,O
disbursements,O
",",O
incurred,O
in,O
connection,O
with,O
any,O
proceeding,O
",",O
in,O
advance,O
of,O
the,O
final,O
disposition,O
of,O
such,O
proceeding,O
;,O
provided,O
",",O
however,O
",",O
that,O
",",O
if,O
required,O
by,O
the,O
Nevada,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
",",O
such,O
expenses,O
incurred,O
by,O
or,O
on,O
behalf,O
of,O
any,O
director,O
or,O
officer,O
may,O
be,O
paid,O
in,O
advance,O
of,O
the,O
final,O
disposition,O
of,O
the,O
action,O
",",O
suit,O
or,O
proceeding,O
only,O
upon,O
receipt,O
of,O
an,O
undertaking,O
by,O
or,O
on,O
behalf,O
of,O
the,O
director,O
or,O
officer,O
to,O
repay,O
the,O
amount,O
if,O
it,O
is,O
ultimately,O
determined,O
by,O
a,O
court,O
of,O
competent,O
jurisdiction,O
that,O
he,O
is,O
not,O
entitled,O
to,O
be,O
indemnified,O
by,O
the,O
Corporation,O
.,O
,O
The,O
provisions,O
of,O
this,O
Section,O
6.5,O
do,O
not,O
affect,O
any,O
rights,O
to,O
advancement,O
of,O
expenses,O
to,O
which,O
corporate,O
personnel,O
other,O
than,O
directors,O
or,O
officers,O
may,O
be,O
entitled,O
under,O
any,O
contract,O
or,O
otherwise,O
by,O
law,O
.,O
,O
Section,O
6.6,O
The,O
indemnification,O
and,O
advancement,O
of,O
expenses,O
authorized,O
in,O
or,O
ordered,O
by,O
a,O
court,O
pursuant,O
to,O
this,O
Article,O
VI,O
does,O
not,O
exclude,O
any,O
other,O
rights,O
to,O
which,O
a,O
person,O
seeking,O
indemnification,O
or,O
advancement,O
of,O
expenses,O
may,O
be,O
entitled,O
under,O
these,O
Amended,O
and,O
Restated,O
Articles,O
of,O
Incorporation,O
",",O
or,O
any,O
By-Laws,O
",",O
agreement,O
",",O
vote,O
of,O
stockholders,O
or,O
disinterested,O
directors,O
or,O
otherwise,O
",",O
for,O
either,O
an,O
action,O
in,O
his,O
official,O
capacity,O
or,O
an,O
action,O
in,O
another,O
capacity,O
while,O
holding,O
his,O
office,O
",",O
except,O
that,O
indemnification,O
",",O
unless,O
ordered,O
by,O
a,O
court,O
pursuant,O
to,O
Section,O
6.2,O
or,O
for,O
the,O
advancement,O
of,O
expenses,O
made,O
pursuant,O
to,O
Section,O
6.5,O
",",O
may,O
not,O
be,O
made,O
to,O
or,O
on,O
behalf,O
of,O
any,O
director,O
or,O
officer,O
if,O
a,O
final,O
adjudication,O
establishes,O
that,O
his,O
acts,O
or,O
omissions,O
involved,O
intentional,O
misconduct,O
",",O
fraud,O
or,O
a,O
knowing,O
violation,O
of,O
the,O
law,O
and,O
was,O
material,O
to,O
the,O
cause,O
of,O
action,O
(,O
b,O
),O
continues,O
as,O
to,O
a,O
person,O
who,O
has,O
ceased,O
to,O
be,O
a,O
director,O
or,O
officer,O
(,O
or,O
other,O
person,O
indemnified,O
hereunder,O
),O
and,O
shall,O
inure,O
to,O
the,O
benefit,O
of,O
the,O
heirs,O
",",O
executors,O
and,O
administrators,O
of,O
such,O
person,O
.,O
,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
Nevada,I-LOCATION
corporation,O
",",O
adopted,O
the,O
2001,I-MISCELLANEOUS
Incentive,I-MISCELLANEOUS
Award,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Watson,I-MISCELLANEOUS
Pharmaceuticals,I-MISCELLANEOUS
",",I-MISCELLANEOUS
Inc.,I-MISCELLANEOUS
(,O
the,O
Plan,O
),O
",",O
effective,O
as,O
of,O
February,O
12,O
",",O
2001,O
(,O
the,O
Effective,O
Date,O
),O
",",O
for,O
the,O
benefit,O
of,O
its,O
eligible,O
Employees,O
",",O
Consultants,O
and,O
Directors,O
.,O
,O
The,O
Plan,O
was,O
subsequently,O
amended,O
effective,O
as,O
of,O
May,O
16,O
",",O
2001,O
",",O
May,O
19,O
",",O
2003,O
",",O
and,O
August,O
4,O
",",O
2003,O
",",O
May,O
13,O
",",O
2005,O
",",O
and,O
November,O
3,O
",",O
2006,O
.,O
,O
The,O
Plan,O
was,O
amended,O
and,O
restated,O
in,O
its,O
entirety,O
to,O
provide,O
for,O
certain,O
additional,O
types,O
of,O
awards,O
to,O
eligible,O
Employees,O
",",O
Consultants,O
and,O
Directors,O
",",O
effective,O
as,O
of,O
May,O
4,O
",",O
2007,O
.,O
,O
The,O
Plan,O
was,O
subsequently,O
amended,O
and,O
restated,O
effective,O
as,O
of,O
May,O
7,O
",",O
2010,O
to,O
add,O
Section,O
3.6,O
",",O
titled,O
Foreign,I-MISCELLANEOUS
Holders,I-MISCELLANEOUS
",",O
which,O
sets,O
forth,O
certain,O
provisions,O
related,O
to,O
for,O
awards,O
that,O
may,O
be,O
made,O
to,O
eligible,O
Employees,O
",",O
Consultants,O
and,O
Directors,O
outside,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
The,O
Plan,O
is,O
hereby,O
subsequently,O
amended,O
and,O
restated,O
to,O
increase,O
the,O
number,O
of,O
shares,O
available,O
for,O
awards,O
under,O
the,O
Plan,O
and,O
to,O
make,O
certain,O
other,O
administrative,O
changes,O
in,O
terms,O
.,O
,O
This,O
amendment,O
and,O
restatement,O
of,O
the,O
Plan,O
is,O
effective,O
as,O
of,O
March,O
2,O
",",O
2011,O
",",O
subject,O
to,O
the,O
approval,O
of,O
this,O
amendment,O
and,O
restatement,O
of,O
the,O
Plan,O
by,O
the,O
stockholders,O
of,O
the,O
Company,O
.,O
,O
If,O
this,O
amendment,O
and,O
restatement,O
of,O
the,O
Plan,O
is,O
not,O
so,O
approved,O
",",O
this,O
amendment,O
and,O
restatement,O
of,O
the,O
Plan,O
shall,O
be,O
,O
and,O
void,O
and,O
of,O
no,O
further,O
force,O
and,O
effect,O
",",O
and,O
the,O
Plan,O
(,O
as,O
in,O
effect,O
prior,O
to,O
such,O
amendment,O
and,O
restatement,O
),O
shall,O
continue,O
in,O
full,O
force,O
and,O
effect,O
in,O
accordance,O
with,O
the,O
terms,O
and,O
conditions,O
thereof,O
.,O
,O
The,O
purposes,O
of,O
the,O
Plan,O
are,O
as,O
follows,O
:,O
,O
(,O
1,O
),O
To,O
provide,O
an,O
additional,O
incentive,O
for,O
Directors,O
",",O
key,O
Employees,O
and,O
Consultants,O
(,O
as,O
such,O
terms,O
are,O
defined,O
below,O
),O
to,O
further,O
the,O
growth,O
",",O
development,O
and,O
financial,O
success,O
of,O
the,O
Company,O
by,O
personally,O
benefiting,O
through,O
the,O
ownership,O
of,O
Company,O
stock,O
and/or,O
rights,O
which,O
recognize,O
such,O
growth,O
",",O
development,O
and,O
financial,O
success,O
.,O
,O
(,O
2,O
),O
To,O
enable,O
the,O
Company,O
to,O
obtain,O
and,O
retain,O
the,O
services,O
of,O
Directors,O
",",O
key,O
Employees,O
and,O
Consultants,O
considered,O
essential,O
to,O
the,O
long,O
range,O
success,O
of,O
the,O
Company,O
by,O
offering,O
them,O
an,O
opportunity,O
to,O
own,O
stock,O
in,O
the,O
Company,O
and/or,O
rights,O
which,O
will,O
reflect,O
the,O
growth,O
",",O
development,O
and,O
financial,O
success,O
of,O
the,O
Company,O
.,O
,O
Wherever,O
the,O
following,O
terms,O
are,O
used,O
in,O
the,O
Plan,O
they,O
shall,O
have,O
the,O
meanings,O
specified,O
below,O
",",O
unless,O
the,O
context,O
clearly,O
indicates,O
otherwise,O
.,O
,O
The,O
singular,O
pronoun,O
shall,O
include,O
the,O
plural,O
where,O
the,O
context,O
so,O
indicates,O
.,O
,O
Administrator,O
shall,O
mean,O
the,O
entity,O
that,O
conducts,O
the,O
general,O
administration,O
of,O
the,O
Plan,O
as,O
provided,O
herein,O
.,O
,O
With,O
reference,O
to,O
the,O
administration,O
of,O
the,O
Plan,O
with,O
respect,O
to,O
Awards,O
granted,O
to,O
Independent,O
Directors,O
",",O
the,O
term,O
Administrator,O
shall,O
refer,O
to,O
the,O
Board,O
.,O
,O
With,O
reference,O
to,O
the,O
administration,O
of,O
the,O
Plan,O
with,O
respect,O
to,O
any,O
other,O
Award,O
",",O
the,O
term,O
Administrator,O
shall,O
refer,O
to,O
the,O
Committee,O
unless,O
the,O
Board,O
has,O
assumed,O
the,O
authority,O
for,O
administration,O
of,O
the,O
Plan,O
generally,O
as,O
provided,O
in,O
Section,O
11.1,O
.,O
,O
With,O
reference,O
to,O
the,O
duties,O
of,O
the,O
Committee,O
under,O
the,O
Plan,O
which,O
have,O
been,O
delegated,O
to,O
one,O
or,O
more,O
persons,O
pursuant,O
to,O
Section,O
11.5,O
",",O
the,O
term,O
Administrator,O
shall,O
refer,O
to,O
such,O
person,O
(,O
s,O
),O
unless,O
the,O
Committee,O
or,O
the,O
Board,O
has,O
revoked,O
such,O
delegation,O
.,O
,O
Award,O
shall,O
mean,O
an,O
Option,O
",",O
a,O
Restricted,O
Stock,O
award,O
",",O
a,O
Restricted,O
Stock,O
Unit,O
award,O
",",O
a,O
Dividend,O
Equivalents,O
award,O
",",O
a,O
Deferred,O
Stock,O
award,O
",",O
a,O
Stock,O
Payment,O
award,O
or,O
a,O
Stock,O
Appreciation,O
Right,O
",",O
which,O
may,O
be,O
awarded,O
or,O
granted,O
under,O
the,O
Plan,O
(,O
collectively,O
",",O
Awards,O
),O
.,O
,O
Award,O
Agreement,O
shall,O
mean,O
a,O
written,O
or,O
electronic,O
agreement,O
executed,O
by,O
an,O
authorized,O
officer,O
of,O
the,O
Company,O
and,O
the,O
Holder,O
which,O
shall,O
contain,O
such,O
terms,O
and,O
conditions,O
with,O
respect,O
to,O
an,O
Award,O
as,O
the,O
Administrator,O
shall,O
determine,O
",",O
consistent,O
with,O
the,O
Plan,O
.,O
,O
Award,O
Limit,O
shall,O
mean,O
five,O
hundred,O
thousand,O
(,O
"500,000",O
),O
shares,O
of,O
Common,O
Stock,O
",",O
as,O
adjusted,O
pursuant,O
to,O
Section,O
12.3,O
;,O
provided,O
",",O
however,O
",",O
that,O
each,O
share,O
of,O
Common,O
Stock,O
subject,O
to,O
an,O
Award,O
shall,O
be,O
counted,O
as,O
one,O
share,O
against,O
the,O
Award,O
Limit,O
.,O
,O
Board,O
shall,O
mean,O
the,O
Board,O
of,O
Directors,O
of,O
the,O
Company,O
.,O
,O
Change,O
in,O
Control,O
shall,O
mean,O
the,O
occurrence,O
of,O
any,O
of,O
the,O
following,O
:,O
,O
(,O
a,O
),O
a,O
sale,O
of,O
assets,O
representing,O
fifty,O
percent,O
(,O
50,O
%,O
),O
or,O
more,O
of,O
the,O
net,O
book,O
value,O
and,O
of,O
the,O
fair,O
market,O
value,O
of,O
the,O
Company,O
s,O
consolidated,O
assets,O
(,O
in,O
a,O
single,O
transaction,O
or,O
in,O
a,O
series,O
of,O
related,O
transactions,O
),O
;,O
,O
(,O
b,O
),O
a,O
liquidation,O
or,O
dissolution,O
of,O
the,O
Company,O
;,O
,O
(,O
c,O
),O
a,O
merger,O
or,O
consolidation,O
involving,O
the,O
Company,O
or,O
any,O
subsidiary,O
of,O
the,O
Company,O
after,O
the,O
completion,O
of,O
which,O
:,O
(,O
i,O
),O
in,O
the,O
case,O
of,O
a,O
merger,O
(,O
other,O
than,O
a,O
triangular,O
merger,O
),O
or,O
a,O
consolidation,O
involving,O
the,O
Company,O
",",O
the,O
stockholders,O
of,O
the,O
Company,O
immediately,O
prior,O
to,O
the,O
completion,O
of,O
such,O
merger,O
or,O
consolidation,O
beneficially,O
own,O
(,O
within,O
the,O
meaning,O
of,O
Rule,O
13d-3,O
promulgated,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
or,O
comparable,O
successor,O
rules,O
),O
",",O
directly,O
or,O
indirectly,O
",",O
outstanding,O
voting,O
securities,O
representing,O
less,O
than,O
sixty,O
percent,O
(,O
60,O
%,O
),O
of,O
the,O
combined,O
voting,O
power,O
of,O
the,O
surviving,O
entity,O
in,O
such,O
merger,O
or,O
consolidation,O
",",O
and,O
(,O
ii,O
),O
in,O
the,O
case,O
of,O
a,O
triangular,O
merger,O
involving,O
the,O
Company,O
or,O
a,O
subsidiary,O
of,O
the,O
Company,O
",",O
the,O
stockholders,O
of,O
the,O
Company,O
immediately,O
prior,O
to,O
the,O
completion,O
of,O
such,O
merger,O
beneficially,O
own,O
(,O
within,O
the,O
meaning,O
of,O
Rule,O
13d-3,O
promulgated,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
or,O
comparable,O
successor,O
rules,O
),O
",",O
directly,O
or,O
indirectly,O
",",O
outstanding,O
voting,O
securities,O
representing,O
less,O
than,O
sixty,O
percent,O
(,O
60,O
%,O
),O
of,O
the,O
combined,O
voting,O
power,O
of,O
the,O
surviving,O
entity,O
in,O
such,O
merger,O
and,O
less,O
than,O
sixty,O
percent,O
(,O
60,O
%,O
),O
of,O
the,O
combined,O
voting,O
power,O
of,O
the,O
parent,O
of,O
the,O
surviving,O
entity,O
in,O
such,O
merger,O
;,O
,O
(,O
e,O
),O
in,O
the,O
event,O
that,O
the,O
individuals,O
who,O
",",O
as,O
of,O
the,O
Effective,O
Date,O
",",O
are,O
members,O
of,O
the,O
Board,O
(,O
the,O
Incumbent,O
Board,O
),O
",",O
cease,O
for,O
any,O
reason,O
to,O
constitute,O
at,O
least,O
fifty,O
percent,O
(,O
50,O
%,O
),O
of,O
the,O
Board,O
;,O
provided,O
",",O
that,O
if,O
the,O
election,O
",",O
or,O
nomination,O
for,O
election,O
by,O
the,O
Company,O
s,O
stockholders,O
",",O
of,O
any,O
new,O
member,O
of,O
the,O
Board,O
is,O
approved,O
by,O
a,O
vote,O
of,O
at,O
least,O
fifty,O
percent,O
(,O
50,O
%,O
),O
of,O
the,O
Incumbent,O
Board,O
",",O
such,O
new,O
member,O
of,O
the,O
Board,O
shall,O
be,O
considered,O
as,O
a,O
member,O
of,O
the,O
Incumbent,O
Board,O
.,O
,O
Code,O
shall,O
mean,O
the,O
Internal,I-LEGISLATION/ACT
Revenue,I-LEGISLATION/ACT
Code,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1986,I-LEGISLATION/ACT
",",O
as,O
amended,O
.,O
,O
Committee,O
shall,O
mean,O
the,O
Compensation,O
Committee,O
of,O
the,O
Board,O
",",O
or,O
another,O
committee,O
or,O
subcommittee,O
of,O
the,O
Board,O
",",O
appointed,O
as,O
provided,O
in,O
Section,O
11.1,O
.,O
,O
Common,O
Stock,O
shall,O
mean,O
the,O
common,O
stock,O
of,O
the,O
Company,O
",",O
par,O
value,O
$,O
0.0033,O
per,O
share,O
.,O
,O
Company,O
shall,O
mean,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
Nevada,I-LOCATION
corporation,O
.,O
,O
Consultant,O
shall,O
mean,O
any,O
consultant,O
or,O
adviser,O
if,O
:,O
(,O
a,O
),O
the,O
consultant,O
or,O
adviser,O
renders,O
bona,O
fide,O
services,O
to,O
the,O
Company,O
;,O
(,O
b,O
),O
the,O
services,O
rendered,O
by,O
the,O
consultant,O
or,O
adviser,O
are,O
not,O
in,O
connection,O
with,O
the,O
offer,O
or,O
sale,O
of,O
securities,O
in,O
a,O
capital-raising,O
transaction,O
and,O
do,O
not,O
directly,O
or,O
indirectly,O
promote,O
or,O
maintain,O
a,O
market,O
for,O
the,O
Company,O
s,O
securities,O
;,O
and,O
(,O
c,O
),O
the,O
consultant,O
or,O
adviser,O
is,O
a,O
natural,O
person,O
who,O
has,O
contracted,O
directly,O
with,O
the,O
Company,O
to,O
render,O
such,O
services,O
.,O
,O
Deferred,O
Stock,O
shall,O
mean,O
rights,O
to,O
receive,O
Common,O
Stock,O
awarded,O
under,O
Section,O
8.4,O
of,O
the,O
Plan,O
.,O
,O
Director,O
shall,O
mean,O
a,O
member,O
of,O
the,O
Board,O
.,O
,O
Dividend,O
Equivalent,O
shall,O
mean,O
a,O
right,O
to,O
receive,O
the,O
equivalent,O
value,O
(,O
in,O
cash,O
or,O
Common,O
Stock,O
),O
of,O
dividends,O
paid,O
on,O
Common,O
Stock,O
",",O
awarded,O
under,O
Section,O
8.2,O
of,O
the,O
Plan,O
.,O
,O
DRO,O
shall,O
mean,O
a,O
domestic,O
relations,O
order,O
as,O
defined,O
by,O
the,O
Code,O
or,O
Title,O
I,O
of,O
the,O
Employee,I-LEGISLATION/ACT
Retirement,I-LEGISLATION/ACT
Income,I-LEGISLATION/ACT
Security,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1974,I-LEGISLATION/ACT
",",O
as,O
amended,O
",",O
or,O
the,O
rules,O
thereunder,O
.,O
,O
Employee,O
shall,O
mean,O
any,O
officer,O
or,O
other,O
employee,O
(,O
as,O
defined,O
in,O
accordance,O
with,O
Section,O
3401,O
(,O
c,O
),O
of,O
the,O
Code,O
),O
of,O
the,O
Company,O
",",O
or,O
of,O
any,O
corporation,O
which,O
is,O
a,O
Subsidiary,O
.,O
,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
shall,O
mean,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
as,O
amended,O
.,O
,O
Fair,O
Market,O
Value,O
means,O
",",O
as,O
of,O
any,O
date,O
",",O
the,O
value,O
of,O
a,O
share,O
of,O
Common,O
Stock,O
determined,O
as,O
follows,O
:,O
,O
(,O
a,O
),O
If,O
the,O
Common,O
Stock,O
is,O
listed,O
on,O
any,O
established,O
stock,O
exchange,O
(,O
such,O
as,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
",",O
the,O
NASDAQ,I-MISCELLANEOUS
Global,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
and,O
the,O
NASDAQ,I-MISCELLANEOUS
Global,I-MISCELLANEOUS
Select,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
),O
or,O
any,O
national,O
market,O
system,O
",",O
including,O
without,O
limitation,O
any,O
market,O
system,O
of,O
The,I-MISCELLANEOUS
NASDAQ,I-MISCELLANEOUS
Stock,I-MISCELLANEOUS
Market,I-MISCELLANEOUS
",",O
the,O
value,O
of,O
a,O
share,O
of,O
Common,O
Stock,O
shall,O
be,O
the,O
closing,O
sales,O
price,O
for,O
a,O
share,O
of,O
Common,O
Stock,O
as,O
quoted,O
on,O
such,O
exchange,O
or,O
system,O
for,O
such,O
date,O
",",O
or,O
if,O
there,O
is,O
no,O
closing,O
sales,O
price,O
for,O
a,O
share,O
of,O
Common,O
Stock,O
on,O
the,O
date,O
in,O
question,O
",",O
the,O
closing,O
sales,O
price,O
for,O
a,O
share,O
of,O
Common,O
Stock,O
on,O
the,O
last,O
preceding,O
date,O
for,O
which,O
such,O
quotation,O
exists,O
",",O
as,O
reported,O
in,O
The,I-MISCELLANEOUS
Wall,I-MISCELLANEOUS
Street,I-MISCELLANEOUS
Journal,I-MISCELLANEOUS
or,O
such,O
other,O
source,O
as,O
the,O
Administrator,O
deems,O
reliable,O
;,O
,O
(,O
c,O
),O
If,O
the,O
Common,O
Stock,O
is,O
neither,O
listed,O
on,O
an,O
established,O
stock,O
exchange,O
or,O
a,O
national,O
market,O
system,O
nor,O
regularly,O
quoted,O
by,O
a,O
recognized,O
securities,O
dealer,O
",",O
the,O
value,O
of,O
a,O
share,O
of,O
Common,O
Stock,O
shall,O
be,O
established,O
by,O
the,O
Administrator,O
in,O
good,O
faith,O
.,O
,O
Holder,O
shall,O
mean,O
a,O
person,O
who,O
has,O
been,O
granted,O
or,O
awarded,O
an,O
Award,O
.,O
,O
Incentive,O
Stock,O
Option,O
shall,O
mean,O
an,O
option,O
which,O
conforms,O
to,O
the,O
applicable,O
provisions,O
of,O
Section,O
422,O
of,O
the,O
Code,O
and,O
which,O
is,O
designated,O
as,O
an,O
Incentive,O
Stock,O
Option,O
by,O
the,O
Administrator,O
.,O
,O
Independent,O
Director,O
shall,O
mean,O
a,O
member,O
of,O
the,O
Board,O
who,O
is,O
not,O
an,O
Employee,O
.,O
,O
Full,O
Value,O
Award,O
shall,O
mean,O
any,O
Award,O
other,O
than,O
an,O
Option,O
or,O
Stock,O
Appreciation,O
Right,O
.,O
,O
Non-Qualified,O
Stock,O
Option,O
shall,O
mean,O
an,O
Option,O
which,O
is,O
not,O
designated,O
as,O
an,O
Incentive,O
Stock,O
Option,O
by,O
the,O
Administrator,O
.,O
,O
Option,O
shall,O
mean,O
a,O
stock,O
option,O
granted,O
under,O
Article,O
IV,O
of,O
the,O
Plan,O
.,O
,O
An,O
Option,O
granted,O
under,O
the,O
Plan,O
shall,O
",",O
as,O
determined,O
by,O
the,O
Administrator,O
",",O
be,O
either,O
a,O
Non-Qualified,O
Stock,O
Option,O
or,O
an,O
Incentive,O
Stock,O
Option,O
;,O
provided,O
",",O
however,O
",",O
that,O
Options,O
granted,O
to,O
Independent,O
Directors,O
and,O
Consultants,O
shall,O
be,O
Non-Qualified,O
Stock,O
Options,O
.,O
,O
from,O
operations,O
;,O
(,O
xv,O
),O
expenses,O
;,O
(,O
xvi,O
),O
working,O
capital,O
;,O
(,O
xvii,O
),O
earnings,O
per,O
share,O
;,O
(,O
xviii,O
),O
adjusted,O
earnings,O
per,O
share,O
;,O
(,O
xix,O
),O
price,O
per,O
share,O
of,O
Common,O
Stock,O
;,O
(,O
xx,O
),O
regulatory,O
body,O
approval,O
for,O
commercialization,O
of,O
a,O
product,O
;,O
(,O
xxi,O
),O
implementation,O
or,O
completion,O
of,O
critical,O
projects,O
;,O
(,O
xxii,O
),O
market,O
share,O
;,O
and,O
(,O
xxiii,O
),O
economic,O
value,O
",",O
any,O
of,O
which,O
may,O
be,O
measured,O
either,O
in,O
absolute,O
terms,O
or,O
as,O
compared,O
to,O
any,O
incremental,O
increase,O
or,O
decrease,O
or,O
as,O
compared,O
to,O
results,O
of,O
a,O
peer,O
group,O
or,O
to,O
market,O
performance,O
indicators,O
or,O
indices,O
.,O
,O
(,O
b,O
),O
The,O
Committee,O
may,O
",",O
in,O
its,O
sole,O
discretion,O
",",O
provide,O
that,O
one,O
or,O
more,O
objectively,O
determinable,O
adjustments,O
shall,O
be,O
made,O
to,O
one,O
or,O
more,O
of,O
the,O
Performance,O
Criteria,O
.,O
,O
Such,O
adjustments,O
may,O
include,O
one,O
or,O
more,O
of,O
the,O
following,O
:,O
(,O
i,O
),O
items,O
related,O
to,O
a,O
change,O
in,O
accounting,O
principle,O
;,O
(,O
ii,O
),O
items,O
relating,O
to,O
financing,O
activities,O
;,O
(,O
iii,O
),O
expenses,O
for,O
restructuring,O
or,O
productivity,O
initiatives,O
;,O
(,O
iv,O
),O
other,O
non-operating,O
items,O
;,O
(,O
v,O
),O
items,O
related,O
to,O
acquisitions,O
;,O
(,O
vi,O
),O
items,O
attributable,O
to,O
the,O
business,O
operations,O
of,O
any,O
entity,O
acquired,O
by,O
the,O
Company,O
during,O
an,O
applicable,O
performance,O
period,O
;,O
(,O
vii,O
),O
items,O
related,O
to,O
the,O
disposal,O
of,O
a,O
business,O
or,O
segment,O
of,O
a,O
business,O
;,O
(,O
viii,O
),O
items,O
related,O
to,O
discontinued,O
operations,O
that,O
do,O
not,O
qualify,O
as,O
a,O
segment,O
of,O
a,O
business,O
under,O
generally,O
accepted,O
accounting,O
standards,O
;,O
(,O
ix,O
),O
items,O
attributable,O
to,O
any,O
stock,O
dividend,O
",",O
stock,O
split,O
",",O
combination,O
or,O
exchange,O
of,O
stock,O
occurring,O
during,O
an,O
applicable,O
performance,O
period,O
;,O
(,O
x,O
),O
any,O
other,O
items,O
of,O
significant,O
income,O
or,O
expense,O
which,O
are,O
determined,O
to,O
be,O
appropriate,O
adjustments,O
;,O
(,O
xi,O
),O
items,O
relating,O
to,O
unusual,O
or,O
extraordinary,O
corporate,O
transactions,O
",",O
events,O
or,O
developments,O
",",O
(,O
xii,O
),O
items,O
related,O
to,O
amortization,O
of,O
acquired,O
intangible,O
assets,O
;,O
(,O
xiii,O
),O
items,O
that,O
are,O
outside,O
the,O
scope,O
of,O
the,O
Company,O
s,O
core,O
",",O
on-going,O
business,O
activities,O
;,O
(,O
xiv,O
),O
items,O
related,O
to,O
acquired,O
in-process,O
research,O
and,O
development,O
;,O
(,O
xv,O
),O
items,O
relating,O
to,O
changes,O
in,O
tax,O
laws,O
;,O
(,O
xvi,O
),O
items,O
relating,O
to,O
major,O
licensing,O
or,O
partnership,O
arrangements,O
;,O
(,O
xvii,O
),O
items,O
relating,O
to,O
asset,O
impairment,O
charges,O
;,O
(,O
xviii,O
),O
items,O
relating,O
to,O
gains,O
or,O
losses,O
for,O
litigation,O
",",O
arbitration,O
and,O
contractual,O
settlements,O
;,O
or,O
(,O
xix,O
),O
items,O
relating,O
to,O
any,O
other,O
unusual,O
or,O
nonrecurring,O
events,O
or,O
changes,O
in,O
applicable,O
laws,O
",",O
accounting,O
principles,O
or,O
business,O
conditions,O
.,O
,O
For,O
all,O
Awards,O
intended,O
to,O
qualify,O
as,O
performance-based,O
compensation,O
as,O
described,O
in,O
Section,O
162,O
(,O
m,O
),O
(,O
4,O
),O
(,O
C,O
),O
of,O
the,O
Code,O
",",O
such,O
determinations,O
shall,O
be,O
made,O
within,O
the,O
time,O
prescribed,O
by,O
",",O
and,O
otherwise,O
in,O
compliance,O
with,O
",",O
Section,O
162,O
(,O
m,O
),O
of,O
the,O
Code,O
.,O
,O
Plan,O
shall,O
mean,O
the,O
2001,I-MISCELLANEOUS
Incentive,I-MISCELLANEOUS
Award,I-MISCELLANEOUS
Plan,I-MISCELLANEOUS
of,I-MISCELLANEOUS
Watson,I-MISCELLANEOUS
Pharmaceuticals,I-MISCELLANEOUS
",",I-MISCELLANEOUS
Inc.,I-MISCELLANEOUS
",",O
as,O
amended,O
.,O
,O
Restricted,O
Stock,O
shall,O
mean,O
Common,O
Stock,O
awarded,O
under,O
Article,O
VII,O
of,O
the,O
Plan,O
.,O
,O
Restricted,O
Stock,O
Units,O
shall,O
mean,O
rights,O
to,O
receive,O
Common,O
Stock,O
awarded,O
under,O
Section,O
8.5,O
of,O
the,O
Plan,O
.,O
,O
Rule,O
16b-3,O
shall,O
mean,O
Rule,O
16b-3,O
promulgated,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
as,O
such,O
Rule,O
may,O
be,O
amended,O
from,O
time,O
to,O
time,O
.,O
,O
Section,O
162,O
(,O
m,O
),O
Participant,O
shall,O
mean,O
any,O
key,O
Employee,O
designated,O
by,O
the,O
Administrator,O
as,O
a,O
key,O
Employee,O
whose,O
compensation,O
for,O
the,O
fiscal,O
year,O
in,O
which,O
the,O
key,O
Employee,O
is,O
so,O
designated,O
or,O
a,O
future,O
fiscal,O
year,O
may,O
be,O
subject,O
to,O
the,O
limit,O
on,O
deductible,O
compensation,O
imposed,O
by,O
Section,O
162,O
(,O
m,O
),O
of,O
the,O
Code,O
.,O
,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
shall,O
mean,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1933,I-LEGISLATION/ACT
",",O
as,O
amended,O
.,O
,O
Stock,O
Appreciation,O
Right,O
shall,O
mean,O
a,O
stock,O
appreciation,O
right,O
granted,O
under,O
Article,O
IX,O
of,O
the,O
Plan,O
.,O
,O
Stock,O
Payment,O
shall,O
mean,O
:,O
(,O
a,O
),O
a,O
payment,O
in,O
the,O
form,O
of,O
shares,O
of,O
Common,O
Stock,O
",",O
or,O
(,O
b,O
),O
an,O
option,O
or,O
other,O
right,O
to,O
purchase,O
shares,O
of,O
Common,O
Stock,O
",",O
as,O
part,O
of,O
a,O
deferred,O
compensation,O
arrangement,O
",",O
made,O
in,O
lieu,O
of,O
all,O
or,O
any,O
portion,O
of,O
the,O
compensation,O
",",O
including,O
without,O
limitation,O
",",O
salary,O
",",O
bonuses,O
and,O
commissions,O
",",O
that,O
otherwise,O
would,O
become,O
payable,O
to,O
a,O
key,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
in,O
cash,O
",",O
awarded,O
under,O
Section,O
8.3,O
of,O
the,O
Plan,O
.,O
,O
Subsidiary,O
shall,O
mean,O
any,O
corporation,O
in,O
an,O
unbroken,O
chain,O
of,O
corporations,O
beginning,O
with,O
the,O
Company,O
if,O
each,O
of,O
the,O
corporations,O
other,O
than,O
the,O
last,O
corporation,O
in,O
the,O
unbroken,O
chain,O
then,O
owns,O
stock,O
possessing,O
fifty,O
percent,O
(,O
50,O
%,O
),O
or,O
more,O
of,O
the,O
total,O
combined,O
voting,O
power,O
of,O
all,O
classes,O
of,O
stock,O
in,O
one,O
of,O
the,O
other,O
corporations,O
in,O
such,O
chain,O
.,O
,O
Substitute,O
Award,O
shall,O
mean,O
an,O
Option,O
granted,O
under,O
this,O
Plan,O
upon,O
the,O
assumption,O
of,O
",",O
or,O
in,O
substitution,O
for,O
",",O
outstanding,O
equity,O
awards,O
previously,O
granted,O
by,O
a,O
company,O
or,O
other,O
entity,O
in,O
connection,O
with,O
a,O
corporate,O
transaction,O
",",O
such,O
as,O
a,O
merger,O
",",O
combination,O
",",O
consolidation,O
or,O
acquisition,O
of,O
property,O
or,O
stock,O
;,O
provided,O
",",O
,O
however,O
",",O
that,O
in,O
no,O
event,O
shall,O
the,O
term,O
Substitute,O
Award,O
be,O
construed,O
to,O
refer,O
to,O
an,O
award,O
made,O
in,O
connection,O
with,O
the,O
cancellation,O
and,O
repricing,O
of,O
an,O
Option,O
.,O
,O
Termination,O
of,O
Consultancy,O
shall,O
mean,O
the,O
time,O
when,O
the,O
engagement,O
of,O
a,O
Holder,O
as,O
a,O
Consultant,O
to,O
the,O
Company,O
or,O
a,O
Subsidiary,O
is,O
terminated,O
for,O
any,O
reason,O
",",O
with,O
or,O
without,O
cause,O
",",O
including,O
",",O
but,O
not,O
by,O
way,O
of,O
limitation,O
",",O
by,O
resignation,O
",",O
discharge,O
",",O
death,O
or,O
retirement,O
",",O
but,O
excluding,O
terminations,O
where,O
there,O
is,O
a,O
simultaneous,O
commencement,O
of,O
employment,O
with,O
the,O
Company,O
or,O
any,O
Subsidiary,O
",",O
or,O
any,O
parent,O
thereof,O
.,O
,O
The,O
Administrator,O
",",O
in,O
its,O
absolute,O
discretion,O
",",O
shall,O
determine,O
the,O
effect,O
of,O
all,O
matters,O
and,O
questions,O
relating,O
to,O
Termination,O
of,O
Consultancy,O
",",O
including,O
",",O
but,O
not,O
by,O
way,O
of,O
limitation,O
",",O
the,O
question,O
of,O
whether,O
a,O
Termination,O
of,O
Consultancy,O
resulted,O
from,O
a,O
discharge,O
for,O
good,O
cause,O
",",O
and,O
all,O
questions,O
of,O
whether,O
a,O
particular,O
leave,O
of,O
absence,O
constitutes,O
a,O
Termination,O
of,O
Consultancy,O
.,O
,O
Notwithstanding,O
any,O
other,O
provision,O
of,O
the,O
Plan,O
",",O
the,O
Company,O
or,O
any,O
Subsidiary,O
has,O
an,O
absolute,O
and,O
unrestricted,O
right,O
to,O
terminate,O
a,O
Consultant,O
s,O
service,O
at,O
any,O
time,O
for,O
any,O
reason,O
whatsoever,O
",",O
with,O
or,O
without,O
cause,O
",",O
except,O
to,O
the,O
extent,O
expressly,O
provided,O
otherwise,O
in,O
writing,O
.,O
,O
Termination,O
of,O
Directorship,O
shall,O
mean,O
the,O
time,O
when,O
a,O
Holder,O
who,O
is,O
an,O
Independent,O
Director,O
ceases,O
to,O
be,O
a,O
Director,O
for,O
any,O
reason,O
",",O
including,O
",",O
but,O
not,O
by,O
way,O
of,O
limitation,O
",",O
a,O
termination,O
by,O
resignation,O
",",O
removal,O
",",O
failure,O
to,O
be,O
elected,O
",",O
death,O
or,O
retirement,O
.,O
,O
The,O
Board,O
",",O
in,O
its,O
sole,O
and,O
absolute,O
discretion,O
",",O
shall,O
determine,O
the,O
effect,O
of,O
all,O
matters,O
and,O
questions,O
relating,O
to,O
Termination,O
of,O
Directorship,O
with,O
respect,O
to,O
Independent,O
Directors,O
.,O
,O
Termination,O
of,O
Employment,O
shall,O
mean,O
the,O
time,O
when,O
the,O
employee-employer,O
relationship,O
between,O
a,O
Holder,O
and,O
the,O
Company,O
or,O
any,O
Subsidiary,O
is,O
terminated,O
for,O
any,O
reason,O
",",O
with,O
or,O
without,O
cause,O
",",O
including,O
",",O
but,O
not,O
by,O
way,O
of,O
limitation,O
",",O
a,O
termination,O
by,O
resignation,O
",",O
discharge,O
",",O
death,O
",",O
disability,O
or,O
retirement,O
;,O
but,O
excluding,O
:,O
(,O
a,O
),O
terminations,O
where,O
there,O
is,O
a,O
simultaneous,O
reemployment,O
or,O
continuing,O
employment,O
of,O
a,O
Holder,O
by,O
the,O
Company,O
or,O
any,O
Subsidiary,O
",",O
or,O
any,O
parent,O
thereof,O
",",O
(,O
b,O
),O
at,O
the,O
discretion,O
of,O
the,O
Administrator,O
",",O
terminations,O
which,O
result,O
in,O
a,O
temporary,O
severance,O
of,O
the,O
employee-employer,O
relationship,O
",",O
and,O
(,O
c,O
),O
at,O
the,O
discretion,O
of,O
the,O
Administrator,O
",",O
terminations,O
which,O
are,O
followed,O
by,O
the,O
simultaneous,O
establishment,O
of,O
a,O
consulting,O
relationship,O
by,O
the,O
Company,O
or,O
a,O
Subsidiary,O
",",O
or,O
any,O
parent,O
thereof,O
",",O
with,O
the,O
former,O
employee,O
.,O
,O
The,O
Administrator,O
",",O
in,O
its,O
absolute,O
discretion,O
",",O
shall,O
determine,O
the,O
effect,O
of,O
all,O
matters,O
and,O
questions,O
relating,O
to,O
Termination,O
of,O
Employment,O
",",O
including,O
",",O
but,O
not,O
by,O
way,O
of,O
limitation,O
",",O
the,O
question,O
of,O
whether,O
a,O
Termination,O
of,O
Employment,O
resulted,O
from,O
a,O
discharge,O
for,O
good,O
cause,O
",",O
and,O
all,O
questions,O
of,O
whether,O
a,O
particular,O
leave,O
of,O
absence,O
constitutes,O
a,O
Termination,O
of,O
Employment,O
;,O
provided,O
",",O
however,O
",",O
that,O
",",O
with,O
respect,O
to,O
Incentive,O
Stock,O
Options,O
",",O
unless,O
otherwise,O
determined,O
by,O
the,O
Administrator,O
in,O
its,O
discretion,O
",",O
a,O
leave,O
of,O
absence,O
",",O
change,O
in,O
status,O
from,O
an,O
employee,O
to,O
an,O
independent,O
contractor,O
or,O
other,O
change,O
in,O
the,O
employee-employer,O
relationship,O
shall,O
constitute,O
a,O
Termination,O
of,O
Employment,O
if,O
",",O
and,O
to,O
the,O
extent,O
that,O
",",O
such,O
leave,O
of,O
absence,O
",",O
change,O
in,O
status,O
or,O
other,O
change,O
interrupts,O
employment,O
for,O
the,O
purposes,O
of,O
Section,O
422,O
(,O
a,O
),O
(,O
2,O
),O
of,O
the,O
Code,O
and,O
the,O
then,O
applicable,O
regulations,O
and,O
revenue,O
rulings,O
under,O
said,O
Section,O
.,O
,O
Shares,O
Subject,O
to,O
Plan,O
.,O
,O
(,O
a,O
),O
The,O
shares,O
of,O
stock,O
subject,O
to,O
Awards,O
shall,O
be,O
Common,O
Stock,O
.,O
,O
Subject,O
to,O
adjustment,O
as,O
provided,O
in,O
Section,O
12.3,O
",",O
the,O
aggregate,O
number,O
of,O
such,O
shares,O
of,O
Common,O
Stock,O
which,O
may,O
be,O
issued,O
pursuant,O
to,O
Awards,O
under,O
the,O
Plan,O
after,O
December,O
31,O
",",O
2010,O
shall,O
not,O
exceed,O
"8,241,885",O
shares,O
.,O
,O
The,O
shares,O
of,O
Common,O
Stock,O
issuable,O
upon,O
exercise,O
of,O
such,O
Options,O
or,O
rights,O
or,O
upon,O
any,O
such,O
Awards,O
may,O
be,O
either,O
previously,O
authorized,O
but,O
unissued,O
shares,O
or,O
treasury,O
shares,O
.,O
,O
The,O
aggregate,O
number,O
of,O
shares,O
of,O
Common,O
Stock,O
available,O
for,O
issuance,O
under,O
the,O
Plan,O
pursuant,O
to,O
this,O
Section,O
2.1,O
shall,O
be,O
reduced,O
by,O
one,O
share,O
for,O
each,O
share,O
of,O
Common,O
Stock,O
subject,O
to,O
each,O
Award,O
granted,O
under,O
the,O
Plan,O
after,O
December,O
31,O
",",O
2010,O
.,O
,O
(,O
b,O
),O
The,O
maximum,O
number,O
of,O
shares,O
which,O
may,O
be,O
subject,O
to,O
Awards,O
granted,O
under,O
the,O
Plan,O
to,O
any,O
individual,O
in,O
any,O
fiscal,O
year,O
of,O
the,O
Company,O
shall,O
not,O
exceed,O
the,O
Award,O
Limit,O
.,O
,O
To,O
the,O
extent,O
required,O
by,O
Section,O
162,O
(,O
m,O
),O
of,O
the,O
Code,O
",",O
shares,O
subject,O
to,O
Awards,O
which,O
are,O
canceled,O
continue,O
to,O
be,O
counted,O
against,O
the,O
Award,O
Limit,O
.,O
,O
Stock,O
subject,O
to,O
the,O
Award,O
(,O
including,O
on,O
payment,O
in,O
shares,O
on,O
exercise,O
of,O
a,O
Stock,O
Appreciation,O
Right,O
),O
",",O
such,O
shares,O
shall,O
",",O
to,O
the,O
extent,O
of,O
such,O
cancellation,O
",",O
forfeiture,O
",",O
expiration,O
",",O
cash,O
settlement,O
or,O
termination,O
",",O
will,O
again,O
be,O
available,O
for,O
Awards,O
;,O
(,O
b,O
),O
shares,O
of,O
Common,O
Stock,O
that,O
have,O
been,O
issued,O
in,O
connection,O
with,O
any,O
Award,O
(,O
e.g.,O
",",O
Restricted,O
Stock,O
),O
that,O
is,O
canceled,O
",",O
forfeited,O
",",O
or,O
settled,O
in,O
cash,O
such,O
that,O
those,O
shares,O
are,O
returned,O
to,O
the,O
Company,O
",",O
such,O
shares,O
",",O
to,O
the,O
extent,O
of,O
such,O
cancellation,O
",",O
forfeiture,O
",",O
or,O
cash,O
settlement,O
will,O
again,O
be,O
available,O
for,O
Awards,O
;,O
and,O
(,O
c,O
),O
shares,O
of,O
Common,O
Stock,O
are,O
withheld,O
or,O
surrendered,O
in,O
payment,O
of,O
the,O
exercise,O
price,O
or,O
taxes,O
relating,O
to,O
any,O
Award,O
",",O
the,O
shares,O
tendered,O
or,O
withheld,O
will,O
again,O
be,O
available,O
for,O
available,O
for,O
Awards,O
;,O
provided,O
",",O
however,O
",",O
that,O
",",O
no,O
shares,O
shall,O
become,O
available,O
pursuant,O
to,O
this,O
Section,O
2.2,O
to,O
the,O
extent,O
that,O
(,O
x,O
),O
the,O
transaction,O
resulting,O
in,O
the,O
return,O
of,O
shares,O
occurs,O
more,O
than,O
ten,O
years,O
after,O
the,O
date,O
of,O
the,O
most,O
recent,O
shareholder,O
approval,O
of,O
the,O
Plan,O
",",O
or,O
(,O
y,O
),O
such,O
return,O
of,O
shares,O
would,O
constitute,O
a,O
material,O
revision,O
of,O
the,O
Plan,O
subject,O
to,O
stockholder,O
approval,O
under,O
then,O
applicable,O
rules,O
of,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
(,O
or,O
any,O
other,O
applicable,O
exchange,O
or,O
quotation,O
system,O
),O
.,O
,O
In,O
addition,O
",",O
in,O
the,O
case,O
of,O
any,O
Award,O
granted,O
in,O
substitution,O
for,O
an,O
award,O
of,O
a,O
company,O
or,O
business,O
acquired,O
by,O
the,O
Company,O
or,O
an,O
Affiliate,O
",",O
shares,O
of,O
Common,O
Stock,O
issued,O
or,O
issuable,O
in,O
connection,O
with,O
such,O
substitute,O
Award,O
shall,O
not,O
be,O
counted,O
against,O
the,O
number,O
of,O
shares,O
reserved,O
under,O
the,O
Plan,O
",",O
but,O
shall,O
be,O
available,O
under,O
the,O
Plan,O
by,O
virtue,O
of,O
the,O
Company,O
s,O
assumption,O
of,O
the,O
plan,O
or,O
arrangement,O
of,O
the,O
acquired,O
company,O
or,O
business,O
.,O
,O
Notwithstanding,O
the,O
provisions,O
of,O
this,O
Section,O
2.2,O
",",O
no,O
shares,O
of,O
Common,O
Stock,O
may,O
again,O
be,O
optioned,O
",",O
granted,O
or,O
awarded,O
if,O
such,O
action,O
would,O
cause,O
an,O
Incentive,O
Stock,O
Option,O
to,O
fail,O
to,O
qualify,O
as,O
an,O
incentive,O
stock,O
option,O
under,O
Section,O
422,O
of,O
the,O
Code,O
.,O
,O
Each,O
Award,O
shall,O
be,O
evidenced,O
by,O
an,O
Award,O
Agreement,O
.,O
,O
Award,O
Agreements,O
evidencing,O
Awards,O
intended,O
to,O
qualify,O
as,O
performance-based,O
compensation,O
as,O
described,O
in,O
Section,O
162,O
(,O
m,O
),O
(,O
4,O
),O
(,O
C,O
),O
of,O
the,O
Code,O
shall,O
contain,O
such,O
terms,O
and,O
conditions,O
as,O
may,O
be,O
necessary,O
to,O
meet,O
the,O
applicable,O
provisions,O
of,O
Section,O
162,O
(,O
m,O
),O
of,O
the,O
Code,O
.,O
,O
Award,O
Agreements,O
evidencing,O
Incentive,O
Stock,O
Options,O
shall,O
contain,O
such,O
terms,O
and,O
conditions,O
as,O
may,O
be,O
necessary,O
to,O
meet,O
the,O
applicable,O
provisions,O
of,O
Section,O
422,O
of,O
the,O
Code,O
.,O
,O
Provisions,O
Applicable,O
to,O
Section,O
162,O
(,O
m,O
),O
Participants,O
.,O
,O
(,O
a,O
),O
The,O
Committee,O
",",O
in,O
its,O
discretion,O
",",O
may,O
determine,O
whether,O
an,O
Award,O
is,O
to,O
qualify,O
as,O
performance-based,O
compensation,O
as,O
described,O
in,O
Section,O
162,O
(,O
m,O
),O
(,O
4,O
),O
(,O
C,O
),O
of,O
the,O
Code,O
.,O
,O
(,O
b,O
),O
Notwithstanding,O
anything,O
in,O
the,O
Plan,O
to,O
the,O
contrary,O
",",O
the,O
Committee,O
may,O
grant,O
any,O
Award,O
to,O
a,O
Section,O
162,O
(,O
m,O
),O
Participant,O
",",O
including,O
a,O
Restricted,O
Stock,O
award,O
",",O
a,O
Restricted,O
Stock,O
Unit,O
award,O
",",O
a,O
Dividend,O
Equivalent,O
award,O
",",O
a,O
Deferred,O
Stock,O
award,O
or,O
a,O
Stock,O
Payment,O
award,O
",",O
the,O
restrictions,O
with,O
respect,O
to,O
which,O
lapse,O
upon,O
the,O
attainment,O
of,O
performance,O
goals,O
which,O
are,O
related,O
to,O
one,O
or,O
more,O
of,O
the,O
Performance,O
Criteria,O
and,O
any,O
Award,O
described,O
in,O
Article,O
VIII,O
that,O
vests,O
or,O
becomes,O
exercisable,O
or,O
payable,O
upon,O
the,O
attainment,O
of,O
performance,O
goals,O
which,O
are,O
related,O
to,O
one,O
or,O
more,O
of,O
the,O
Performance,O
Criteria,O
.,O
,O
(,O
c,O
),O
To,O
the,O
extent,O
necessary,O
to,O
comply,O
with,O
the,O
performance-based,O
compensation,O
requirements,O
of,O
Section,O
162,O
(,O
m,O
),O
(,O
4,O
),O
(,O
C,O
),O
of,O
the,O
Code,O
",",O
with,O
respect,O
to,O
any,O
Award,O
granted,O
under,O
Articles,O
VII,O
and,O
VIII,O
which,O
may,O
be,O
granted,O
to,O
one,O
or,O
more,O
Section,O
162,O
(,O
m,O
),O
Participants,O
",",O
no,O
later,O
than,O
ninety,O
(,O
90,O
),O
days,O
following,O
the,O
commencement,O
of,O
any,O
fiscal,O
year,O
in,O
question,O
or,O
any,O
other,O
designated,O
fiscal,O
period,O
or,O
period,O
of,O
service,O
(,O
or,O
such,O
other,O
time,O
as,O
may,O
be,O
required,O
or,O
permitted,O
by,O
Section,O
162,O
(,O
m,O
),O
of,O
the,O
Code,O
),O
",",O
the,O
Committee,O
shall,O
",",O
in,O
writing,O
",",O
(,O
i,O
),O
designate,O
one,O
or,O
more,O
Section,O
162,O
(,O
m,O
),O
Participants,O
",",O
(,O
ii,O
),O
select,O
the,O
Performance,O
Criteria,O
applicable,O
to,O
the,O
fiscal,O
year,O
or,O
other,O
designated,O
fiscal,O
period,O
or,O
period,O
of,O
service,O
",",O
(,O
iii,O
),O
establish,O
the,O
various,O
performance,O
targets,O
",",O
in,O
terms,O
of,O
an,O
objective,O
formula,O
or,O
standard,O
",",O
and,O
amounts,O
of,O
such,O
Awards,O
",",O
as,O
applicable,O
",",O
which,O
may,O
be,O
earned,O
for,O
such,O
fiscal,O
year,O
or,O
other,O
designated,O
fiscal,O
period,O
or,O
period,O
of,O
service,O
",",O
and,O
(,O
iv,O
),O
specify,O
the,O
relationship,O
between,O
Performance,O
Criteria,O
and,O
the,O
performance,O
targets,O
and,O
the,O
amounts,O
of,O
such,O
Awards,O
",",O
as,O
applicable,O
",",O
to,O
be,O
earned,O
by,O
each,O
Section,O
162,O
(,O
m,O
),O
Participant,O
for,O
such,O
fiscal,O
year,O
or,O
other,O
designated,O
fiscal,O
period,O
or,O
period,O
of,O
service,O
.,O
,O
Following,O
the,O
completion,O
of,O
each,O
fiscal,O
year,O
or,O
other,O
designated,O
fiscal,O
period,O
or,O
period,O
of,O
service,O
",",O
the,O
Committee,O
shall,O
certify,O
in,O
writing,O
whether,O
the,O
applicable,O
performance,O
targets,O
have,O
been,O
achieved,O
for,O
such,O
fiscal,O
year,O
or,O
other,O
designated,O
fiscal,O
period,O
or,O
period,O
of,O
service,O
.,O
,O
relevant,O
to,O
the,O
assessment,O
of,O
individual,O
or,O
corporate,O
performance,O
for,O
the,O
fiscal,O
year,O
or,O
other,O
designated,O
fiscal,O
period,O
or,O
period,O
of,O
service,O
.,O
,O
(,O
d,O
),O
Furthermore,O
",",O
notwithstanding,O
any,O
other,O
provision,O
of,O
the,O
Plan,O
",",O
any,O
Award,O
which,O
is,O
granted,O
to,O
a,O
Section,O
162,O
(,O
m,O
),O
Participant,O
and,O
is,O
intended,O
to,O
qualify,O
as,O
performance-based,O
compensation,O
as,O
described,O
in,O
Section,O
162,O
(,O
m,O
),O
(,O
4,O
),O
(,O
C,O
),O
of,O
the,O
Code,O
shall,O
be,O
subject,O
to,O
any,O
additional,O
limitations,O
set,O
forth,O
in,O
Section,O
162,O
(,O
m,O
),O
of,O
the,O
Code,O
(,O
including,O
any,O
amendment,O
to,O
Section,O
162,O
(,O
m,O
),O
of,O
the,O
Code,O
),O
or,O
any,O
regulations,O
or,O
rulings,O
issued,O
thereunder,O
that,O
are,O
requirements,O
for,O
qualification,O
as,O
performance-based,O
compensation,O
as,O
described,O
in,O
Section,O
162,O
(,O
m,O
),O
(,O
4,O
),O
(,O
C,O
),O
of,O
the,O
Code,O
",",O
and,O
the,O
Plan,O
shall,O
be,O
deemed,O
amended,O
to,O
the,O
extent,O
necessary,O
to,O
conform,O
to,O
such,O
requirements,O
.,O
,O
Limitations,O
Applicable,O
to,O
Section,O
16,O
Persons,O
.,O
,O
Notwithstanding,O
any,O
other,O
provision,O
of,O
the,O
Plan,O
",",O
the,O
Plan,O
",",O
and,O
any,O
Award,O
granted,O
or,O
awarded,O
to,O
any,O
individual,O
who,O
is,O
then,O
subject,O
to,O
Section,O
16,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
shall,O
be,O
subject,O
to,O
any,O
additional,O
limitations,O
set,O
forth,O
in,O
any,O
applicable,O
exemptive,O
rule,O
under,O
Section,O
16,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
including,O
any,O
amendment,O
to,O
Rule,O
16b-3,O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
that,O
are,O
requirements,O
for,O
the,O
application,O
of,O
such,O
exemptive,O
rule,O
.,O
,O
To,O
the,O
extent,O
permitted,O
by,O
applicable,O
law,O
",",O
the,O
Plan,O
and,O
Awards,O
granted,O
or,O
awarded,O
hereunder,O
shall,O
be,O
deemed,O
amended,O
to,O
the,O
extent,O
necessary,O
to,O
conform,O
to,O
such,O
applicable,O
exemptive,O
rule,O
.,O
,O
In,O
consideration,O
of,O
the,O
granting,O
of,O
an,O
Award,O
under,O
the,O
Plan,O
",",O
the,O
Holder,O
shall,O
agree,O
",",O
in,O
the,O
Award,O
Agreement,O
",",O
to,O
remain,O
in,O
the,O
employ,O
of,O
(,O
or,O
to,O
consult,O
for,O
or,O
to,O
serve,O
as,O
an,O
Independent,O
Director,O
of,O
",",O
as,O
applicable,O
),O
the,O
Company,O
or,O
any,O
Subsidiary,O
for,O
a,O
period,O
of,O
at,O
least,O
one,O
year,O
(,O
or,O
such,O
shorter,O
period,O
as,O
may,O
be,O
fixed,O
in,O
the,O
Award,O
Agreement,O
or,O
by,O
action,O
of,O
the,O
Administrator,O
following,O
grant,O
of,O
the,O
Award,O
),O
after,O
the,O
Award,O
is,O
granted,O
(,O
or,O
",",O
in,O
the,O
case,O
of,O
an,O
Independent,O
Director,O
",",O
until,O
the,O
next,O
annual,O
meeting,O
of,O
stockholders,O
of,O
the,O
Company,O
),O
.,O
,O
Nothing,O
in,O
the,O
Plan,O
or,O
in,O
any,O
Award,O
Agreement,O
hereunder,O
shall,O
confer,O
upon,O
any,O
Holder,O
any,O
right,O
to,O
continue,O
in,O
the,O
employ,O
of,O
",",O
or,O
as,O
a,O
Consultant,O
for,O
",",O
the,O
Company,O
or,O
any,O
Subsidiary,O
",",O
or,O
as,O
a,O
Director,O
of,O
the,O
Company,O
",",O
or,O
shall,O
interfere,O
with,O
or,O
restrict,O
in,O
any,O
way,O
the,O
rights,O
of,O
the,O
Company,O
and,O
any,O
Subsidiary,O
",",O
which,O
are,O
hereby,O
expressly,O
reserved,O
",",O
to,O
discharge,O
any,O
Holder,O
at,O
any,O
time,O
for,O
any,O
reason,O
whatsoever,O
",",O
with,O
or,O
without,O
cause,O
",",O
except,O
to,O
the,O
extent,O
expressly,O
provided,O
otherwise,O
in,O
a,O
written,O
employment,O
agreement,O
between,O
the,O
Holder,O
and,O
the,O
Company,O
and,O
any,O
Subsidiary,O
.,O
,O
Notwithstanding,O
any,O
provision,O
of,O
the,O
Plan,O
to,O
the,O
contrary,O
",",O
in,O
order,O
to,O
comply,O
with,O
the,O
laws,O
in,O
other,O
countries,O
in,O
which,O
the,O
Company,O
and,O
any,O
Subsidiary,O
of,O
the,O
Company,O
operate,O
or,O
have,O
Employees,O
",",O
Independent,O
Directors,O
or,O
Consultants,O
",",O
or,O
in,O
order,O
to,O
comply,O
with,O
the,O
requirements,O
of,O
any,O
foreign,O
stock,O
exchange,O
or,O
applicable,O
laws,O
",",O
the,O
Administrator,O
",",O
in,O
its,O
sole,O
discretion,O
",",O
shall,O
have,O
the,O
power,O
and,O
authority,O
to,O
:,O
(,O
a,O
),O
determine,O
which,O
Subsidiaries,O
shall,O
be,O
covered,O
by,O
the,O
Plan,O
;,O
(,O
b,O
),O
determine,O
which,O
Employees,O
",",O
Independent,O
Directors,O
or,O
Consultants,O
outside,O
the,O
United,I-LOCATION
States,I-LOCATION
are,O
eligible,O
to,O
participate,O
in,O
the,O
Plan,O
;,O
(,O
c,O
),O
modify,O
the,O
terms,O
and,O
conditions,O
of,O
any,O
Award,O
granted,O
to,O
Employees,O
",",O
Independent,O
Directors,O
or,O
Consultants,O
outside,O
the,O
United,I-LOCATION
States,I-LOCATION
to,O
comply,O
with,O
applicable,O
foreign,O
laws,O
or,O
listing,O
requirements,O
of,O
any,O
such,O
foreign,O
stock,O
exchange,O
;,O
(,O
d,O
),O
establish,O
subplans,O
and,O
modify,O
exercise,O
procedures,O
and,O
other,O
terms,O
and,O
procedures,O
",",O
to,O
the,O
extent,O
such,O
actions,O
may,O
be,O
necessary,O
or,O
advisable,O
(,O
any,O
such,O
subplans,O
and/or,O
modifications,O
shall,O
be,O
attached,O
to,O
the,O
Plan,O
as,O
appendices,O
),O
;,O
provided,O
",",O
however,O
",",O
that,O
no,O
such,O
subplans,O
and/or,O
modifications,O
shall,O
increase,O
the,O
share,O
limitations,O
contained,O
in,O
Article,O
II,O
or,O
expand,O
the,O
classes,O
of,O
persons,O
to,O
whom,O
Awards,O
may,O
be,O
granted,O
under,O
the,O
Plan,O
;,O
and,O
(,O
e,O
),O
take,O
any,O
action,O
",",O
before,O
or,O
after,O
an,O
Award,O
is,O
made,O
",",O
that,O
it,O
deems,O
advisable,O
to,O
obtain,O
approval,O
or,O
comply,O
with,O
any,O
necessary,O
local,O
governmental,O
regulatory,O
exemptions,O
or,O
approvals,O
or,O
listing,O
requirements,O
of,O
any,O
such,O
foreign,O
stock,O
exchange,O
.,O
,O
Notwithstanding,O
the,O
foregoing,O
",",O
the,O
Administrator,O
may,O
not,O
take,O
any,O
actions,O
hereunder,O
",",O
and,O
no,O
Awards,O
shall,O
be,O
granted,O
",",O
that,O
would,O
violate,O
the,O
Code,O
",",O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
or,O
any,O
other,O
securities,O
law,O
or,O
governing,O
statute,O
or,O
any,O
other,O
applicable,O
law,O
.,O
,O
Any,O
Employee,O
or,O
Consultant,O
selected,O
by,O
the,O
Administrator,O
pursuant,O
to,O
Section,O
4.4,O
(,O
a,O
),O
(,O
i,O
),O
shall,O
be,O
eligible,O
to,O
be,O
granted,O
an,O
Option,O
.,O
,O
Each,O
Independent,O
Director,O
of,O
the,O
Company,O
shall,O
be,O
eligible,O
to,O
be,O
granted,O
Options,O
at,O
the,O
times,O
and,O
in,O
the,O
manner,O
set,O
forth,O
in,O
Section,O
4.5,O
.,O
,O
Disqualification,O
for,O
Stock,O
Ownership,O
.,O
,O
No,O
person,O
may,O
be,O
granted,O
an,O
Incentive,O
Stock,O
Option,O
under,O
the,O
Plan,O
if,O
such,O
person,O
",",O
at,O
the,O
time,O
the,O
Incentive,O
Stock,O
Option,O
is,O
granted,O
",",O
owns,O
stock,O
possessing,O
more,O
than,O
10,O
%,O
of,O
the,O
total,O
combined,O
voting,O
power,O
of,O
all,O
classes,O
of,O
stock,O
of,O
the,O
Company,O
or,O
any,O
then,O
existing,O
Subsidiary,O
or,O
parent,O
corporation,O
(,O
within,O
the,O
meaning,O
of,O
Section,O
422,O
of,O
the,O
Code,O
),O
unless,O
such,O
Incentive,O
Stock,O
Option,O
conforms,O
to,O
the,O
applicable,O
provisions,O
of,O
Section,O
422,O
of,O
the,O
Code,O
.,O
,O
Qualification,O
of,O
Incentive,O
Stock,O
Options,O
.,O
,O
No,O
Incentive,O
Stock,O
Option,O
shall,O
be,O
granted,O
to,O
any,O
person,O
who,O
is,O
not,O
an,O
Employee,O
.,O
,O
Granting,O
of,O
Options,O
to,O
Employees,O
and,O
Consultants,O
.,O
,O
(,O
a,O
),O
The,O
Administrator,O
shall,O
from,O
time,O
to,O
time,O
",",O
in,O
its,O
absolute,O
discretion,O
",",O
and,O
",",O
subject,O
to,O
applicable,O
limitations,O
of,O
the,O
Plan,O
:,O
,O
(,O
i,O
),O
Determine,O
which,O
Employees,O
are,O
key,O
Employees,O
and,O
select,O
from,O
among,O
the,O
key,O
Employees,O
or,O
Consultants,O
(,O
including,O
Employees,O
or,O
Consultants,O
who,O
have,O
previously,O
received,O
Awards,O
under,O
the,O
Plan,O
),O
such,O
of,O
them,O
as,O
in,O
its,O
opinion,O
should,O
be,O
granted,O
Options,O
;,O
,O
(,O
ii,O
),O
Subject,O
to,O
the,O
Award,O
Limit,O
",",O
determine,O
the,O
number,O
of,O
shares,O
to,O
be,O
subject,O
to,O
such,O
Options,O
granted,O
to,O
the,O
selected,O
key,O
Employees,O
or,O
Consultants,O
;,O
,O
(,O
iv,O
),O
Determine,O
the,O
terms,O
and,O
conditions,O
of,O
such,O
Options,O
",",O
consistent,O
with,O
the,O
Plan,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
terms,O
and,O
conditions,O
of,O
Options,O
intended,O
to,O
qualify,O
as,O
performance-based,O
compensation,O
as,O
described,O
in,O
Section,O
162,O
(,O
m,O
),O
(,O
4,O
),O
(,O
C,O
),O
of,O
the,O
Code,O
shall,O
include,O
",",O
but,O
not,O
be,O
limited,O
to,O
",",O
such,O
terms,O
and,O
conditions,O
as,O
may,O
be,O
necessary,O
to,O
meet,O
the,O
applicable,O
provisions,O
of,O
Section,O
162,O
(,O
m,O
),O
of,O
the,O
Code,O
.,O
,O
(,O
b,O
),O
Upon,O
the,O
selection,O
of,O
a,O
key,O
Employee,O
or,O
Consultant,O
to,O
be,O
granted,O
an,O
Option,O
",",O
the,O
Administrator,O
shall,O
instruct,O
the,O
Secretary,O
of,O
the,O
Company,O
to,O
issue,O
the,O
Option,O
and,O
may,O
impose,O
such,O
conditions,O
on,O
the,O
grant,O
of,O
the,O
Option,O
as,O
it,O
deems,O
appropriate,O
.,O
,O
(,O
c,O
),O
Any,O
Incentive,O
Stock,O
Option,O
granted,O
under,O
the,O
Plan,O
may,O
be,O
modified,O
by,O
the,O
Administrator,O
",",O
with,O
the,O
consent,O
of,O
the,O
Holder,O
",",O
to,O
disqualify,O
such,O
Option,O
from,O
treatment,O
as,O
an,O
incentive,O
stock,O
option,O
under,O
Section,O
422,O
of,O
the,O
Code,O
.,O
,O
Granting,O
of,O
Options,O
to,O
Independent,O
Directors,O
.,O
,O
The,O
Board,O
shall,O
from,O
time,O
to,O
time,O
",",O
in,O
its,O
absolute,O
discretion,O
",",O
and,O
subject,O
to,O
applicable,O
limitations,O
of,O
the,O
Plan,O
:,O
,O
(,O
a,O
),O
Select,O
from,O
among,O
the,O
Independent,O
Directors,O
(,O
including,O
Independent,O
Directors,O
who,O
have,O
previously,O
received,O
Options,O
under,O
the,O
Plan,O
),O
such,O
of,O
them,O
as,O
in,O
its,O
opinion,O
should,O
be,O
granted,O
Options,O
;,O
,O
(,O
c,O
),O
Determine,O
the,O
terms,O
and,O
conditions,O
of,O
such,O
Options,O
",",O
consistent,O
with,O
the,O
Plan,O
.,O
,O
All,O
the,O
foregoing,O
Option,O
grants,O
authorized,O
by,O
this,O
Section,O
4.5,O
are,O
subject,O
to,O
stockholder,O
approval,O
of,O
the,O
Plan,O
.,O
,O
Options,O
in,O
Lieu,O
of,O
Cash,O
Compensation,O
.,O
,O
Options,O
may,O
be,O
granted,O
under,O
the,O
Plan,O
to,O
Employees,O
and,O
Consultants,O
in,O
lieu,O
of,O
cash,O
bonuses,O
which,O
would,O
otherwise,O
be,O
payable,O
to,O
such,O
Employees,O
and,O
Consultants,O
",",O
and,O
to,O
Independent,O
Directors,O
in,O
lieu,O
of,O
directors,O
fees,O
which,O
would,O
otherwise,O
be,O
payable,O
to,O
such,O
Independent,O
Directors,O
",",O
pursuant,O
to,O
such,O
policies,O
which,O
may,O
be,O
adopted,O
by,O
the,O
Administrator,O
from,O
time,O
to,O
time,O
.,O
,O
The,O
price,O
per,O
share,O
of,O
the,O
shares,O
subject,O
to,O
each,O
Option,O
granted,O
to,O
Employees,O
",",O
Independent,O
Directors,O
and,O
Consultants,O
shall,O
be,O
set,O
by,O
the,O
Administrator,O
;,O
provided,O
",",O
however,O
",",O
that,O
:,O
,O
(,O
a,O
),O
In,O
the,O
case,O
of,O
Options,O
intended,O
to,O
qualify,O
as,O
performance-based,O
compensation,O
as,O
described,O
in,O
Section,O
162,O
(,O
m,O
),O
(,O
4,O
),O
(,O
C,O
),O
of,O
the,O
Code,O
",",O
such,O
price,O
shall,O
not,O
be,O
less,O
than,O
100,O
%,O
of,O
the,O
Fair,O
Market,O
Value,O
of,O
a,O
share,O
of,O
Common,O
Stock,O
on,O
the,O
date,O
the,O
Option,O
is,O
granted,O
;,O
,O
(,O
b,O
),O
In,O
the,O
case,O
of,O
Incentive,O
Stock,O
Options,O
such,O
price,O
shall,O
not,O
be,O
less,O
than,O
100,O
%,O
of,O
the,O
Fair,O
Market,O
Value,O
of,O
a,O
share,O
of,O
Common,O
Stock,O
on,O
the,O
date,O
the,O
Option,O
is,O
granted,O
(,O
or,O
the,O
date,O
the,O
Option,O
is,O
modified,O
",",O
extended,O
or,O
renewed,O
for,O
purposes,O
of,O
Section,O
424,O
(,O
h,O
),O
of,O
the,O
Code,O
),O
;,O
,O
(,O
d,O
),O
In,O
the,O
case,O
of,O
Non-Qualified,O
Stock,O
Options,O
",",O
such,O
price,O
shall,O
not,O
be,O
less,O
than,O
100,O
%,O
of,O
the,O
Fair,O
Market,O
Value,O
of,O
a,O
share,O
of,O
Common,O
Stock,O
on,O
the,O
date,O
the,O
Option,O
is,O
granted,O
.,O
,O
The,O
term,O
of,O
an,O
Option,O
granted,O
to,O
an,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
shall,O
be,O
set,O
by,O
the,O
Administrator,O
in,O
its,O
discretion,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
term,O
shall,O
not,O
be,O
more,O
than,O
ten,O
(,O
10,O
),O
years,O
from,O
the,O
date,O
the,O
Option,O
is,O
granted,O
",",O
or,O
five,O
(,O
5,O
),O
years,O
from,O
the,O
date,O
the,O
Option,O
is,O
granted,O
if,O
the,O
Option,O
is,O
an,O
Incentive,O
Stock,O
Option,O
granted,O
to,O
an,O
individual,O
then,O
owning,O
(,O
within,O
the,O
meaning,O
of,O
Section,O
424,O
(,O
d,O
),O
of,O
the,O
Code,O
),O
more,O
than,O
10,O
%,O
of,O
the,O
total,O
combined,O
voting,O
power,O
of,O
all,O
classes,O
of,O
stock,O
of,O
the,O
Company,O
or,O
any,O
Subsidiary,O
Corporation,O
or,O
parent,O
corporation,O
thereof,O
(,O
as,O
defined,O
in,O
Section,O
424,O
(,O
e,O
),O
of,O
the,O
Code,O
),O
.,O
,O
Except,O
as,O
limited,O
by,O
requirements,O
of,O
Section,O
422,O
of,O
the,O
Code,O
and,O
regulations,O
and,O
rulings,O
thereunder,O
applicable,O
to,O
Incentive,O
Stock,O
Options,O
",",O
the,O
Administrator,O
may,O
extend,O
the,O
term,O
of,O
any,O
outstanding,O
Option,O
in,O
connection,O
with,O
any,O
Termination,O
of,O
Employment,O
",",O
Termination,O
of,O
Directorship,O
or,O
Termination,O
of,O
Consultancy,O
of,O
the,O
Holder,O
up,O
to,O
a,O
maximum,O
of,O
ten,O
(,O
10,O
),O
years,O
from,O
the,O
date,O
the,O
Option,O
is,O
granted,O
",",O
or,O
amend,O
any,O
other,O
term,O
or,O
condition,O
of,O
such,O
Option,O
relating,O
to,O
such,O
a,O
Termination,O
of,O
Employment,O
",",O
Termination,O
of,O
Directorship,O
or,O
Termination,O
of,O
Consultancy,O
.,O
,O
Notwithstanding,O
any,O
of,O
the,O
forgoing,O
",",O
in,O
the,O
event,O
the,O
term,O
of,O
an,O
Option,O
would,O
expire,O
at,O
a,O
time,O
when,O
trading,O
in,O
shares,O
of,O
the,O
Common,O
Stock,O
by,O
Holder,O
is,O
prohibited,O
by,O
law,O
or,O
the,O
Company,O
s,O
insider,O
trading,O
policy,O
",",O
the,O
term,O
of,O
such,O
Option,O
shall,O
automatically,O
be,O
extended,O
",",O
subject,O
to,O
a,O
maximum,O
of,O
ten,O
(,O
10,O
),O
years,O
from,O
the,O
date,O
the,O
Option,O
is,O
granted,O
and,O
any,O
requirements,O
of,O
Section,O
422,O
of,O
the,O
Code,O
",",O
to,O
the,O
30th,O
day,O
following,O
the,O
expiration,O
of,O
any,O
applicable,O
trading,O
prohibition,O
.,O
,O
(,O
a,O
),O
The,O
period,O
during,O
which,O
the,O
right,O
to,O
exercise,O
",",O
in,O
whole,O
or,O
in,O
part,O
",",O
an,O
Option,O
granted,O
to,O
an,O
Employee,O
",",O
Independent,O
Director,O
or,O
a,O
Consultant,O
vests,O
in,O
the,O
Holder,O
shall,O
be,O
set,O
by,O
the,O
Administrator,O
and,O
the,O
Administrator,O
may,O
determine,O
that,O
an,O
Option,O
may,O
not,O
be,O
exercised,O
in,O
whole,O
or,O
in,O
part,O
for,O
a,O
specified,O
period,O
after,O
it,O
is,O
granted,O
.,O
,O
At,O
any,O
time,O
after,O
grant,O
of,O
an,O
Option,O
",",O
the,O
Administrator,O
may,O
",",O
in,O
its,O
sole,O
and,O
absolute,O
discretion,O
and,O
subject,O
to,O
whatever,O
terms,O
and,O
conditions,O
it,O
selects,O
",",O
accelerate,O
the,O
period,O
during,O
which,O
an,O
Option,O
granted,O
to,O
an,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
vests,O
.,O
,O
(,O
b,O
),O
No,O
portion,O
of,O
an,O
Option,O
granted,O
to,O
an,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
which,O
is,O
unexercisable,O
at,O
Termination,O
of,O
Employment,O
",",O
Termination,O
of,O
Directorship,O
or,O
Termination,O
of,O
Consultancy,O
",",O
as,O
applicable,O
",",O
shall,O
thereafter,O
become,O
exercisable,O
",",O
except,O
as,O
may,O
be,O
otherwise,O
provided,O
by,O
the,O
Administrator,O
either,O
in,O
the,O
Award,O
Agreement,O
or,O
by,O
action,O
of,O
the,O
Administrator,O
following,O
the,O
grant,O
of,O
the,O
Option,O
.,O
,O
Company,O
and,O
any,O
Subsidiary,O
or,O
parent,O
corporation,O
thereof,O
",",O
within,O
the,O
meaning,O
of,O
Section,O
424,O
of,O
the,O
Code,O
",",O
exceeds,O
$,O
"100,000",O
",",O
the,O
Options,O
shall,O
be,O
treated,O
as,O
Non-Qualified,O
Stock,O
Options,O
to,O
the,O
extent,O
required,O
by,O
Section,O
422,O
of,O
the,O
Code,O
.,O
,O
The,O
rule,O
set,O
forth,O
in,O
the,O
preceding,O
sentence,O
shall,O
be,O
applied,O
by,O
taking,O
Options,O
and,O
other,O
incentive,O
stock,O
options,O
into,O
account,O
in,O
the,O
order,O
in,O
which,O
they,O
were,O
granted,O
.,O
,O
For,O
purposes,O
of,O
this,O
Section,O
5.3,O
(,O
c,O
),O
",",O
the,O
fair,O
market,O
value,O
of,O
stock,O
shall,O
be,O
determined,O
as,O
of,O
the,O
time,O
the,O
Option,O
or,O
other,O
incentive,O
stock,O
options,O
with,O
respect,O
to,O
such,O
stock,O
is,O
granted,O
.,O
,O
Notwithstanding,O
the,O
foregoing,O
provisions,O
of,O
this,O
Article,O
V,O
to,O
the,O
contrary,O
",",O
in,O
the,O
case,O
of,O
an,O
Option,O
that,O
is,O
a,O
Substitute,O
Award,O
",",O
the,O
price,O
per,O
share,O
of,O
the,O
shares,O
subject,O
to,O
such,O
Option,O
may,O
be,O
less,O
than,O
the,O
Fair,O
Market,O
Value,O
per,O
share,O
on,O
the,O
date,O
of,O
grant,O
",",O
provided,O
",",O
that,O
the,O
excess,O
of,O
:,O
(,O
a,O
),O
the,O
aggregate,O
Fair,O
Market,O
Value,O
(,O
as,O
of,O
the,O
date,O
such,O
Substitute,O
Award,O
is,O
granted,O
),O
of,O
the,O
shares,O
subject,O
to,O
the,O
Substitute,O
Award,O
",",O
over,O
(,O
b,O
),O
the,O
aggregate,O
exercise,O
price,O
thereof,O
",",O
does,O
not,O
exceed,O
the,O
excess,O
of,O
:,O
(,O
c,O
),O
the,O
aggregate,O
fair,O
market,O
value,O
(,O
as,O
of,O
the,O
time,O
immediately,O
preceding,O
the,O
transaction,O
giving,O
rise,O
to,O
the,O
Substitute,O
Award,O
",",O
such,O
fair,O
market,O
value,O
to,O
be,O
determined,O
by,O
the,O
Committee,O
),O
of,O
the,O
shares,O
of,O
the,O
predecessor,O
entity,O
that,O
were,O
subject,O
to,O
the,O
grant,O
assumed,O
or,O
substituted,O
for,O
by,O
the,O
Company,O
",",O
over,O
(,O
d,O
),O
the,O
aggregate,O
exercise,O
price,O
of,O
such,O
shares,O
.,O
,O
Substitution,O
of,O
Stock,O
Appreciation,O
Rights,O
.,O
,O
The,O
Administrator,O
may,O
provide,O
in,O
the,O
Award,O
Agreement,O
evidencing,O
the,O
grant,O
of,O
an,O
Option,O
that,O
the,O
Administrator,O
",",O
in,O
its,O
sole,O
discretion,O
",",O
shall,O
have,O
the,O
right,O
to,O
substitute,O
a,O
Stock,O
Appreciation,O
Right,O
for,O
such,O
Option,O
at,O
any,O
time,O
prior,O
to,O
or,O
upon,O
exercise,O
of,O
such,O
Option,O
",",O
subject,O
to,O
the,O
provisions,O
of,O
Section,O
9.2,O
;,O
provided,O
",",O
that,O
such,O
Stock,O
Appreciation,O
Right,O
shall,O
be,O
exercisable,O
with,O
respect,O
to,O
the,O
same,O
number,O
of,O
shares,O
of,O
Common,O
Stock,O
for,O
which,O
such,O
substituted,O
Option,O
would,O
have,O
been,O
exercisable,O
and,O
at,O
the,O
Option,O
exercise,O
price,O
per,O
share,O
.,O
,O
An,O
exercisable,O
Option,O
may,O
be,O
exercised,O
in,O
whole,O
or,O
in,O
part,O
.,O
,O
However,O
",",O
an,O
Option,O
shall,O
not,O
be,O
exercisable,O
with,O
respect,O
to,O
fractional,O
shares,O
and,O
the,O
Administrator,O
may,O
require,O
that,O
",",O
by,O
the,O
terms,O
of,O
the,O
Option,O
",",O
a,O
partial,O
exercise,O
be,O
with,O
respect,O
to,O
a,O
minimum,O
number,O
of,O
shares,O
.,O
,O
Manner,O
of,O
Exercise,O
.,O
,O
All,O
or,O
a,O
portion,O
of,O
an,O
exercisable,O
Option,O
shall,O
be,O
deemed,O
exercised,O
upon,O
delivery,O
of,O
all,O
of,O
the,O
following,O
to,O
the,O
Secretary,O
of,O
the,O
Company,O
",",O
or,O
such,O
other,O
person,O
or,O
entity,O
designated,O
by,O
the,O
Board,O
",",O
or,O
his,O
",",O
her,O
or,O
its,O
office,O
",",O
as,O
applicable,O
:,O
,O
(,O
a,O
),O
A,O
written,O
(,O
or,O
electronic,O
),O
notice,O
complying,O
with,O
the,O
applicable,O
rules,O
established,O
by,O
the,O
Administrator,O
stating,O
that,O
the,O
Option,O
",",O
or,O
a,O
portion,O
thereof,O
",",O
is,O
exercised,O
.,O
,O
The,O
notice,O
shall,O
be,O
signed,O
by,O
the,O
Holder,O
or,O
other,O
person,O
then,O
entitled,O
to,O
exercise,O
the,O
Option,O
or,O
such,O
portion,O
of,O
the,O
Option,O
;,O
,O
(,O
b,O
),O
Such,O
representations,O
and,O
documents,O
as,O
the,O
Administrator,O
",",O
in,O
its,O
absolute,O
discretion,O
",",O
deems,O
necessary,O
or,O
advisable,O
to,O
effect,O
compliance,O
with,O
all,O
applicable,O
provisions,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
and,O
any,O
other,O
federal,O
or,O
state,O
securities,O
laws,O
or,O
regulations,O
.,O
,O
The,O
Administrator,O
may,O
",",O
in,O
its,O
absolute,O
discretion,O
",",O
also,O
take,O
whatever,O
additional,O
actions,O
it,O
deems,O
appropriate,O
to,O
effect,O
such,O
compliance,O
including,O
",",O
without,O
limitation,O
",",O
placing,O
legends,O
on,O
share,O
certificates,O
and,O
issuing,O
stop-transfer,O
notices,O
to,O
agents,O
and,O
registrars,O
;,O
,O
(,O
d,O
),O
Full,O
cash,O
payment,O
to,O
the,O
Secretary,O
of,O
the,O
Company,O
for,O
the,O
shares,O
with,O
respect,O
to,O
which,O
the,O
Option,O
",",O
or,O
portion,O
thereof,O
",",O
is,O
exercised,O
.,O
,O
order,O
with,O
a,O
broker,O
with,O
respect,O
to,O
shares,O
of,O
Common,O
Stock,O
then,O
issuable,O
upon,O
exercise,O
of,O
the,O
Option,O
",",O
and,O
that,O
the,O
broker,O
has,O
been,O
directed,O
to,O
pay,O
a,O
sufficient,O
portion,O
of,O
the,O
net,O
proceeds,O
of,O
the,O
sale,O
to,O
the,O
Company,O
in,O
satisfaction,O
of,O
the,O
Option,O
exercise,O
price,O
",",O
provided,O
",",O
that,O
payment,O
of,O
such,O
proceeds,O
is,O
then,O
made,O
to,O
the,O
Company,O
upon,O
settlement,O
of,O
such,O
sale,O
;,O
or,O
(,O
v,O
),O
allow,O
payment,O
through,O
any,O
combination,O
of,O
the,O
consideration,O
provided,O
in,O
the,O
foregoing,O
paragraphs,O
(,O
i,O
),O
",",O
(,O
ii,O
),O
",",O
(,O
iii,O
),O
and,O
(,O
iv,O
),O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
payment,O
in,O
the,O
manner,O
prescribed,O
in,O
the,O
preceding,O
paragraphs,O
shall,O
not,O
be,O
permitted,O
to,O
the,O
extent,O
that,O
the,O
Administrator,O
determines,O
that,O
payment,O
in,O
such,O
manner,O
shall,O
result,O
in,O
an,O
extension,O
or,O
maintenance,O
of,O
credit,O
",",O
an,O
arrangement,O
for,O
the,O
extension,O
of,O
credit,O
",",O
or,O
a,O
renewal,O
or,O
an,O
extension,O
of,O
credit,O
in,O
the,O
form,O
of,O
a,O
personal,O
loan,O
to,O
or,O
for,O
any,O
Director,O
or,O
executive,O
officer,O
of,O
the,O
Company,O
that,O
is,O
prohibited,O
by,O
Section,O
13,O
(,O
k,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
or,O
other,O
applicable,O
law,O
.,O
,O
Conditions,O
to,O
Issuance,O
of,O
Stock,O
Certificates,O
.,O
,O
The,O
Company,O
shall,O
not,O
be,O
required,O
to,O
issue,O
or,O
deliver,O
any,O
certificate,O
or,O
certificates,O
for,O
shares,O
of,O
stock,O
purchased,O
upon,O
the,O
exercise,O
of,O
any,O
Option,O
or,O
portion,O
thereof,O
prior,O
to,O
fulfillment,O
of,O
all,O
of,O
the,O
following,O
conditions,O
:,O
,O
(,O
a,O
),O
The,O
admission,O
of,O
such,O
shares,O
to,O
listing,O
on,O
all,O
stock,O
exchanges,O
on,O
which,O
such,O
class,O
of,O
stock,O
is,O
then,O
listed,O
;,O
,O
(,O
b,O
),O
The,O
completion,O
of,O
any,O
registration,O
or,O
other,O
qualification,O
of,O
such,O
shares,O
under,O
any,O
state,O
or,O
federal,O
law,O
",",O
or,O
under,O
the,O
rulings,O
or,O
regulations,O
of,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
or,O
any,O
other,O
governmental,O
regulatory,O
body,O
which,O
the,O
Administrator,O
shall,O
",",O
in,O
its,O
absolute,O
discretion,O
",",O
deem,O
necessary,O
or,O
advisable,O
;,O
,O
(,O
c,O
),O
The,O
obtaining,O
of,O
any,O
approval,O
or,O
other,O
clearance,O
from,O
any,O
state,O
or,O
federal,O
governmental,O
agency,O
which,O
the,O
Administrator,O
shall,O
",",O
in,O
its,O
absolute,O
discretion,O
",",O
determine,O
to,O
be,O
necessary,O
or,O
advisable,O
;,O
,O
(,O
e,O
),O
The,O
receipt,O
by,O
the,O
Company,O
of,O
full,O
payment,O
for,O
such,O
shares,O
",",O
including,O
payment,O
of,O
any,O
applicable,O
withholding,O
tax,O
",",O
which,O
in,O
the,O
discretion,O
of,O
the,O
Administrator,O
may,O
be,O
in,O
the,O
form,O
of,O
consideration,O
used,O
by,O
the,O
Holder,O
to,O
pay,O
for,O
such,O
shares,O
under,O
Section,O
6.2,O
(,O
d,O
),O
.,O
,O
Rights,O
as,O
Stockholders,O
.,O
,O
Holders,O
shall,O
not,O
be,O
",",O
nor,O
have,O
any,O
of,O
the,O
rights,O
or,O
privileges,O
of,O
",",O
stockholders,O
of,O
the,O
Company,O
in,O
respect,O
of,O
any,O
shares,O
purchasable,O
upon,O
the,O
exercise,O
of,O
any,O
part,O
of,O
an,O
Option,O
unless,O
and,O
until,O
certificates,O
representing,O
such,O
shares,O
have,O
been,O
issued,O
by,O
the,O
Company,O
to,O
such,O
Holders,O
.,O
,O
Ownership,O
and,O
Transfer,O
Restrictions,O
.,O
,O
The,O
Administrator,O
",",O
in,O
its,O
absolute,O
discretion,O
",",O
may,O
impose,O
such,O
restrictions,O
on,O
the,O
ownership,O
and,O
transferability,O
of,O
the,O
shares,O
purchasable,O
upon,O
the,O
exercise,O
of,O
an,O
Option,O
as,O
it,O
deems,O
appropriate,O
.,O
,O
Any,O
such,O
restriction,O
shall,O
be,O
set,O
forth,O
in,O
the,O
respective,O
Award,O
Agreement,O
and,O
may,O
be,O
referred,O
to,O
on,O
the,O
certificates,O
evidencing,O
such,O
shares,O
.,O
,O
The,O
Holder,O
shall,O
give,O
the,O
Company,O
prompt,O
notice,O
of,O
any,O
disposition,O
of,O
shares,O
of,O
Common,O
Stock,O
acquired,O
by,O
exercise,O
of,O
an,O
Incentive,O
Stock,O
Option,O
within,O
(,O
a,O
),O
two,O
years,O
from,O
the,O
date,O
of,O
granting,O
(,O
including,O
the,O
date,O
the,O
Option,O
is,O
modified,O
",",O
extended,O
or,O
renewed,O
for,O
purposes,O
of,O
Section,O
424,O
(,O
h,O
),O
of,O
the,O
Code,O
),O
such,O
Option,O
to,O
such,O
Holder,O
",",O
or,O
(,O
b,O
),O
one,O
year,O
after,O
the,O
transfer,O
of,O
such,O
shares,O
to,O
such,O
Holder,O
.,O
,O
Additional,O
Limitations,O
on,O
Exercise,O
of,O
Options,O
.,O
,O
Holders,O
may,O
be,O
required,O
to,O
comply,O
with,O
any,O
timing,O
or,O
other,O
restrictions,O
with,O
respect,O
to,O
the,O
settlement,O
or,O
exercise,O
of,O
an,O
Option,O
",",O
including,O
a,O
window-period,O
limitation,O
",",O
as,O
may,O
be,O
imposed,O
in,O
the,O
discretion,O
of,O
the,O
Administrator,O
.,O
,O
Subject,O
to,O
the,O
Award,O
Limit,O
",",O
Restricted,O
Stock,O
may,O
be,O
awarded,O
to,O
any,O
Employee,O
whom,O
the,O
Administrator,O
determines,O
is,O
a,O
key,O
Employee,O
",",O
or,O
any,O
Independent,O
Director,O
or,O
any,O
Consultant,O
",",O
whom,O
the,O
Administrator,O
determines,O
should,O
receive,O
such,O
an,O
Award,O
.,O
,O
Award,O
of,O
Restricted,O
Stock,O
.,O
,O
(,O
a,O
),O
The,O
Administrator,O
may,O
from,O
time,O
to,O
time,O
",",O
in,O
its,O
absolute,O
discretion,O
:,O
,O
(,O
ii,O
),O
Determine,O
the,O
purchase,O
price,O
",",O
if,O
any,O
",",O
and,O
other,O
terms,O
and,O
conditions,O
applicable,O
to,O
such,O
Restricted,O
Stock,O
",",O
consistent,O
with,O
the,O
Plan,O
.,O
,O
(,O
b,O
),O
The,O
Administrator,O
shall,O
establish,O
the,O
purchase,O
price,O
",",O
if,O
any,O
",",O
and,O
form,O
of,O
payment,O
for,O
Restricted,O
Stock,O
;,O
provided,O
",",O
however,O
",",O
that,O
such,O
purchase,O
price,O
shall,O
be,O
no,O
less,O
than,O
the,O
par,O
value,O
of,O
the,O
Common,O
Stock,O
to,O
be,O
purchased,O
",",O
unless,O
otherwise,O
permitted,O
by,O
applicable,O
state,O
law,O
.,O
,O
In,O
all,O
cases,O
",",O
legal,O
consideration,O
shall,O
be,O
required,O
for,O
each,O
issuance,O
of,O
Restricted,O
Stock,O
.,O
,O
(,O
c,O
),O
Upon,O
the,O
selection,O
of,O
an,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
to,O
be,O
awarded,O
Restricted,O
Stock,O
",",O
the,O
Administrator,O
shall,O
instruct,O
the,O
Secretary,O
of,O
the,O
Company,O
to,O
issue,O
such,O
Restricted,O
Stock,O
and,O
may,O
impose,O
such,O
conditions,O
on,O
the,O
issuance,O
of,O
such,O
Restricted,O
Stock,O
as,O
it,O
deems,O
appropriate,O
.,O
,O
Rights,O
as,O
Stockholders,O
.,O
,O
Subject,O
to,O
Section,O
7.4,O
",",O
upon,O
delivery,O
of,O
the,O
shares,O
of,O
Restricted,O
Stock,O
to,O
the,O
escrow,O
holder,O
pursuant,O
to,O
Section,O
7.7,O
",",O
the,O
Holder,O
shall,O
have,O
",",O
unless,O
otherwise,O
provided,O
by,O
the,O
Administrator,O
",",O
all,O
the,O
rights,O
of,O
a,O
stockholder,O
with,O
respect,O
to,O
said,O
shares,O
",",O
subject,O
to,O
the,O
restrictions,O
in,O
his,O
or,O
her,O
Award,O
Agreement,O
",",O
including,O
the,O
right,O
to,O
receive,O
all,O
dividends,O
and,O
other,O
distributions,O
paid,O
or,O
made,O
with,O
respect,O
to,O
the,O
shares,O
;,O
provided,O
",",O
however,O
",",O
that,O
",",O
in,O
the,O
discretion,O
of,O
the,O
Administrator,O
",",O
any,O
dividends,O
or,O
distributions,O
with,O
respect,O
to,O
the,O
Common,O
Stock,O
shall,O
be,O
subject,O
to,O
the,O
restrictions,O
set,O
forth,O
in,O
Section,O
7.4,O
.,O
,O
In,O
addition,O
",",O
with,O
respect,O
to,O
a,O
share,O
of,O
Restricted,O
Stock,O
with,O
performance-based,O
vesting,O
",",O
dividends,O
which,O
are,O
paid,O
prior,O
to,O
vesting,O
shall,O
only,O
be,O
paid,O
out,O
to,O
the,O
Holder,O
to,O
the,O
extent,O
that,O
the,O
performance-based,O
vesting,O
conditions,O
are,O
subsequently,O
satisfied,O
and,O
the,O
share,O
of,O
Restricted,O
Stock,O
vests,O
.,O
,O
All,O
shares,O
of,O
Restricted,O
Stock,O
issued,O
under,O
the,O
Plan,O
(,O
including,O
any,O
shares,O
received,O
by,O
Holders,O
thereof,O
with,O
respect,O
to,O
shares,O
of,O
Restricted,O
Stock,O
as,O
a,O
result,O
of,O
stock,O
dividends,O
",",O
stock,O
splits,O
or,O
any,O
other,O
form,O
of,O
recapitalization,O
),O
shall,O
",",O
in,O
the,O
terms,O
of,O
each,O
individual,O
Award,O
Agreement,O
",",O
be,O
subject,O
to,O
such,O
restrictions,O
as,O
the,O
Administrator,O
shall,O
provide,O
",",O
which,O
restrictions,O
may,O
include,O
",",O
without,O
limitation,O
",",O
restrictions,O
concerning,O
voting,O
rights,O
and,O
transferability,O
and,O
restrictions,O
based,O
on,O
duration,O
of,O
employment,O
",",O
directorship,O
or,O
consultancy,O
with,O
the,O
Company,O
",",O
or,O
any,O
Subsidiary,O
",",O
or,O
any,O
parent,O
thereof,O
",",O
Company,O
performance,O
and,O
individual,O
performance,O
",",O
or,O
any,O
one,O
or,O
more,O
of,O
the,O
Performance,O
Criteria,O
or,O
other,O
specific,O
performance,O
criteria,O
determined,O
appropriate,O
by,O
the,O
Administrator,O
.,O
,O
By,O
action,O
taken,O
after,O
the,O
Restricted,O
Stock,O
is,O
issued,O
",",O
the,O
Administrator,O
may,O
",",O
on,O
such,O
terms,O
and,O
conditions,O
as,O
it,O
may,O
determine,O
to,O
be,O
appropriate,O
",",O
and,O
except,O
with,O
respect,O
to,O
shares,O
of,O
Restricted,O
Stock,O
granted,O
to,O
Section,O
162,O
(,O
m,O
),O
Participants,O
",",O
remove,O
any,O
or,O
all,O
of,O
the,O
restrictions,O
imposed,O
by,O
the,O
terms,O
of,O
the,O
Award,O
Agreement,O
.,O
,O
Restricted,O
Stock,O
may,O
not,O
be,O
sold,O
or,O
encumbered,O
until,O
all,O
restrictions,O
are,O
terminated,O
or,O
expire,O
.,O
,O
If,O
no,O
consideration,O
was,O
paid,O
by,O
the,O
Holder,O
upon,O
issuance,O
",",O
a,O
Holder,O
s,O
rights,O
in,O
unvested,O
Restricted,O
Stock,O
shall,O
lapse,O
",",O
and,O
such,O
Restricted,O
Stock,O
shall,O
be,O
surrendered,O
to,O
the,O
Company,O
without,O
consideration,O
",",O
upon,O
Termination,O
of,O
Employment,O
",",O
Termination,O
of,O
Directorship,O
",",O
or,O
Termination,O
of,O
Consultancy,O
",",O
as,O
applicable,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
Administrator,O
in,O
its,O
sole,O
and,O
absolute,O
discretion,O
may,O
provide,O
that,O
such,O
rights,O
shall,O
not,O
lapse,O
in,O
the,O
event,O
of,O
a,O
Termination,O
of,O
Employment,O
",",O
Termination,O
of,O
Directorship,O
or,O
Termination,O
of,O
Consultancy,O
",",O
as,O
applicable,O
",",O
following,O
a,O
change,O
of,O
ownership,O
or,O
control,O
(,O
within,O
the,O
meaning,O
of,O
Treasury,I-LEGISLATION/ACT
Regulation,I-LEGISLATION/ACT
Section,O
1.162-27,O
(,O
e,O
),O
(,O
2,O
),O
(,O
v,O
),O
or,O
any,O
successor,O
regulation,O
thereto,O
),O
of,O
the,O
Company,O
or,O
because,O
of,O
the,O
Holder,O
s,O
death,O
or,O
disability,O
;,O
and,O
",",O
provided,O
",",O
further,O
",",O
except,O
with,O
respect,O
to,O
shares,O
of,O
Restricted,O
Stock,O
granted,O
to,O
Section,O
162,O
(,O
m,O
),O
Participants,O
that,O
is,O
intended,O
to,O
qualify,O
as,O
performance-based,O
compensation,O
as,O
described,O
in,O
Section,O
162,O
(,O
m,O
),O
(,O
4,O
),O
(,O
C,O
),O
of,O
the,O
Code,O
",",O
the,O
Administrator,O
in,O
its,O
sole,O
and,O
absolute,O
discretion,O
may,O
provide,O
that,O
no,O
such,O
lapse,O
or,O
surrender,O
shall,O
occur,O
in,O
the,O
event,O
of,O
a,O
Termination,O
of,O
Employment,O
",",O
Termination,O
of,O
Directorship,O
",",O
or,O
Termination,O
of,O
Consultancy,O
",",O
as,O
applicable,O
",",O
without,O
cause,O
or,O
following,O
any,O
Change,O
in,O
Control,O
or,O
because,O
of,O
the,O
Holder,O
s,O
retirement,O
",",O
or,O
otherwise,O
.,O
,O
Repurchase,O
of,O
Restricted,O
Stock,O
.,O
,O
restrictions,O
under,O
the,O
Award,O
Agreement,O
immediately,O
upon,O
a,O
Termination,O
of,O
Employment,O
",",O
Termination,O
of,O
Directorship,O
",",O
or,O
Termination,O
of,O
Consultancy,O
",",O
as,O
applicable,O
",",O
at,O
a,O
cash,O
price,O
per,O
share,O
equal,O
to,O
the,O
price,O
paid,O
by,O
the,O
Holder,O
for,O
such,O
Restricted,O
Stock,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
Administrator,O
in,O
its,O
sole,O
and,O
absolute,O
discretion,O
may,O
provide,O
that,O
no,O
such,O
right,O
of,O
repurchase,O
shall,O
exist,O
in,O
the,O
event,O
of,O
a,O
Termination,O
of,O
Employment,O
",",O
Termination,O
of,O
Directorship,O
or,O
Termination,O
of,O
Consultancy,O
",",O
as,O
applicable,O
",",O
following,O
a,O
change,O
of,O
ownership,O
or,O
control,O
(,O
within,O
the,O
meaning,O
of,O
Treasury,I-LEGISLATION/ACT
Regulation,I-LEGISLATION/ACT
Section,O
1.162-27,O
(,O
e,O
),O
(,O
2,O
),O
(,O
v,O
),O
or,O
any,O
successor,O
regulation,O
thereto,O
),O
of,O
the,O
Company,O
or,O
because,O
of,O
the,O
Holder,O
s,O
death,O
or,O
disability,O
;,O
and,O
",",O
provided,O
",",O
further,O
",",O
that,O
",",O
except,O
with,O
respect,O
to,O
shares,O
of,O
Restricted,O
Stock,O
granted,O
to,O
Section,O
162,O
(,O
m,O
),O
Participants,O
that,O
is,O
intended,O
to,O
qualify,O
as,O
performance-based,O
compensation,O
as,O
described,O
in,O
Section,O
162,O
(,O
m,O
),O
(,O
4,O
),O
(,O
C,O
),O
of,O
the,O
Code,O
",",O
the,O
Administrator,O
in,O
its,O
sole,O
and,O
absolute,O
discretion,O
may,O
provide,O
that,O
no,O
such,O
right,O
of,O
repurchase,O
shall,O
exist,O
in,O
the,O
event,O
of,O
a,O
Termination,O
of,O
Employment,O
",",O
Termination,O
of,O
Directorship,O
",",O
or,O
Termination,O
of,O
Consultancy,O
",",O
as,O
applicable,O
",",O
without,O
cause,O
or,O
following,O
any,O
Change,O
in,O
Control,O
or,O
because,O
of,O
the,O
Holder,O
s,O
retirement,O
",",O
or,O
otherwise,O
.,O
,O
The,O
Secretary,O
of,O
the,O
Company,O
or,O
such,O
other,O
escrow,O
holder,O
as,O
the,O
Administrator,O
may,O
appoint,O
shall,O
retain,O
physical,O
custody,O
of,O
each,O
certificate,O
representing,O
Restricted,O
Stock,O
until,O
all,O
of,O
the,O
restrictions,O
imposed,O
under,O
the,O
Award,O
Agreement,O
with,O
respect,O
to,O
the,O
shares,O
evidenced,O
by,O
such,O
certificate,O
expire,O
or,O
shall,O
have,O
been,O
removed,O
.,O
,O
In,O
order,O
to,O
enforce,O
the,O
restrictions,O
imposed,O
upon,O
shares,O
of,O
Restricted,O
Stock,O
hereunder,O
",",O
the,O
Administrator,O
shall,O
cause,O
a,O
legend,O
or,O
legends,O
to,O
be,O
placed,O
on,O
certificates,O
representing,O
all,O
shares,O
of,O
Restricted,O
Stock,O
that,O
are,O
still,O
subject,O
to,O
restrictions,O
under,O
Award,O
Agreements,O
",",O
which,O
legend,O
or,O
legends,O
shall,O
make,O
appropriate,O
reference,O
to,O
the,O
conditions,O
imposed,O
thereby,O
.,O
,O
Section,O
83,O
(,O
b,O
),O
Election,O
.,O
,O
If,O
a,O
Holder,O
makes,O
an,O
election,O
under,O
Section,O
83,O
(,O
b,O
),O
of,O
the,O
Code,O
",",O
or,O
any,O
successor,O
section,O
thereto,O
",",O
to,O
be,O
taxed,O
with,O
respect,O
to,O
the,O
Restricted,O
Stock,O
as,O
of,O
the,O
date,O
of,O
transfer,O
of,O
the,O
Restricted,O
Stock,O
rather,O
than,O
as,O
of,O
the,O
date,O
or,O
dates,O
upon,O
which,O
the,O
Holder,O
would,O
otherwise,O
be,O
taxable,O
under,O
Section,O
83,O
(,O
a,O
),O
of,O
the,O
Code,O
",",O
the,O
Holder,O
shall,O
deliver,O
a,O
copy,O
of,O
such,O
election,O
to,O
the,O
Company,O
immediately,O
after,O
filing,O
such,O
election,O
with,O
the,O
Internal,I-GOVERNMENT
Revenue,I-GOVERNMENT
Service,I-GOVERNMENT
.,O
,O
Subject,O
to,O
the,O
Award,O
Limit,O
",",O
one,O
or,O
more,O
Dividend,O
Equivalent,O
awards,O
",",O
Deferred,O
Stock,O
awards,O
",",O
Stock,O
Payment,O
awards,O
",",O
and/or,O
Restricted,O
Stock,O
Unit,O
awards,O
may,O
be,O
granted,O
to,O
any,O
Employee,O
whom,O
the,O
Administrator,O
determines,O
is,O
a,O
key,O
Employee,O
",",O
or,O
any,O
Independent,O
Director,O
or,O
any,O
Consultant,O
",",O
whom,O
the,O
Administrator,O
determines,O
should,O
receive,O
such,O
an,O
Award,O
.,O
,O
(,O
a,O
),O
Any,O
key,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
selected,O
by,O
the,O
Administrator,O
may,O
be,O
granted,O
Dividend,O
Equivalents,O
based,O
on,O
the,O
dividends,O
declared,O
on,O
the,O
Common,O
Stock,O
",",O
to,O
be,O
credited,O
as,O
of,O
dividend,O
payment,O
dates,O
",",O
during,O
the,O
period,O
between,O
the,O
date,O
an,O
Award,O
is,O
granted,O
",",O
and,O
the,O
date,O
such,O
Award,O
vests,O
",",O
is,O
exercised,O
",",O
is,O
distributed,O
",",O
terminates,O
or,O
expires,O
",",O
as,O
determined,O
by,O
the,O
Administrator,O
.,O
,O
Such,O
Dividend,O
Equivalents,O
shall,O
be,O
converted,O
to,O
cash,O
or,O
additional,O
shares,O
of,O
Common,O
Stock,O
by,O
such,O
formula,O
and,O
at,O
such,O
time,O
and,O
subject,O
to,O
such,O
limitations,O
as,O
may,O
be,O
determined,O
by,O
the,O
Administrator,O
.,O
,O
In,O
addition,O
",",O
Dividend,O
Equivalents,O
with,O
respect,O
to,O
an,O
Award,O
with,O
performance-based,O
vesting,O
that,O
are,O
based,O
on,O
dividends,O
paid,O
prior,O
to,O
the,O
vesting,O
of,O
such,O
Award,O
shall,O
only,O
be,O
paid,O
out,O
to,O
the,O
Holder,O
to,O
the,O
extent,O
that,O
the,O
performance-based,O
vesting,O
conditions,O
are,O
subsequently,O
satisfied,O
and,O
the,O
Award,O
vests,O
.,O
,O
(,O
b,O
),O
Notwithstanding,O
the,O
foregoing,O
",",O
no,O
Dividend,O
Equivalents,O
shall,O
be,O
payable,O
with,O
respect,O
to,O
Options,O
or,O
Stock,O
Appreciation,O
Rights,O
.,O
,O
Any,O
key,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
selected,O
by,O
the,O
Administrator,O
may,O
receive,O
Stock,O
Payments,O
in,O
the,O
manner,O
determined,O
from,O
time,O
to,O
time,O
by,O
the,O
Administrator,O
.,O
,O
performance,O
criteria,O
determined,O
appropriate,O
by,O
the,O
Administrator,O
",",O
determined,O
on,O
the,O
date,O
such,O
Stock,O
Payment,O
is,O
made,O
or,O
on,O
any,O
date,O
thereafter,O
.,O
,O
Any,O
key,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
selected,O
by,O
the,O
Administrator,O
may,O
be,O
granted,O
an,O
award,O
of,O
Deferred,O
Stock,O
in,O
the,O
manner,O
determined,O
from,O
time,O
to,O
time,O
by,O
the,O
Administrator,O
.,O
,O
The,O
number,O
of,O
shares,O
of,O
Deferred,O
Stock,O
shall,O
be,O
determined,O
by,O
the,O
Administrator,O
and,O
may,O
be,O
based,O
upon,O
the,O
Performance,O
Criteria,O
or,O
other,O
specific,O
performance,O
criteria,O
determined,O
to,O
be,O
appropriate,O
by,O
the,O
Administrator,O
",",O
in,O
each,O
case,O
on,O
a,O
specified,O
date,O
or,O
dates,O
or,O
over,O
any,O
period,O
or,O
periods,O
determined,O
by,O
the,O
Administrator,O
.,O
,O
Common,O
Stock,O
underlying,O
a,O
Deferred,O
Stock,O
award,O
shall,O
not,O
be,O
issued,O
until,O
the,O
Deferred,O
Stock,O
award,O
shall,O
have,O
vested,O
",",O
pursuant,O
to,O
a,O
vesting,O
schedule,O
or,O
performance,O
criteria,O
set,O
by,O
the,O
Administrator,O
.,O
,O
The,O
Administrator,O
shall,O
specify,O
the,O
distribution,O
dates,O
applicable,O
to,O
each,O
Deferred,O
Stock,O
award,O
which,O
shall,O
be,O
no,O
earlier,O
than,O
the,O
vesting,O
dates,O
or,O
events,O
of,O
the,O
award,O
and,O
may,O
be,O
determined,O
at,O
the,O
election,O
of,O
the,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
.,O
,O
Unless,O
otherwise,O
provided,O
by,O
the,O
Administrator,O
",",O
a,O
Holder,O
of,O
Deferred,O
Stock,O
shall,O
have,O
no,O
rights,O
as,O
a,O
Company,O
stockholder,O
with,O
respect,O
to,O
such,O
Deferred,O
Stock,O
until,O
such,O
time,O
as,O
the,O
Award,O
has,O
vested,O
and,O
the,O
Common,O
Stock,O
underlying,O
the,O
Award,O
has,O
been,O
issued,O
.,O
,O
Restricted,O
Stock,O
Units,O
.,O
,O
Any,O
key,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
selected,O
by,O
the,O
Administrator,O
may,O
be,O
granted,O
an,O
award,O
of,O
Restricted,O
Stock,O
Units,O
in,O
the,O
manner,O
determined,O
from,O
time,O
to,O
time,O
by,O
the,O
Administrator,O
.,O
,O
The,O
Administrator,O
is,O
authorized,O
to,O
make,O
awards,O
of,O
Restricted,O
Stock,O
Units,O
in,O
such,O
amounts,O
and,O
subject,O
to,O
such,O
terms,O
and,O
conditions,O
as,O
determined,O
by,O
the,O
Administrator,O
.,O
,O
The,O
Administrator,O
shall,O
specify,O
the,O
date,O
or,O
dates,O
on,O
which,O
the,O
Restricted,O
Stock,O
Units,O
shall,O
become,O
fully,O
vested,O
and,O
nonforfeitable,O
",",O
and,O
may,O
specify,O
such,O
conditions,O
to,O
vesting,O
as,O
it,O
deems,O
appropriate,O
",",O
and,O
may,O
specify,O
that,O
such,O
Restricted,O
Stock,O
Units,O
become,O
fully,O
vested,O
and,O
nonforfeitable,O
pursuant,O
to,O
the,O
satisfaction,O
of,O
one,O
or,O
more,O
Performance,O
Criteria,O
or,O
other,O
specific,O
performance,O
goals,O
as,O
the,O
Administrator,O
determines,O
to,O
be,O
appropriate,O
at,O
the,O
time,O
of,O
the,O
grant,O
of,O
the,O
Restricted,O
Stock,O
Units,O
or,O
thereafter,O
",",O
in,O
each,O
case,O
on,O
a,O
specified,O
date,O
or,O
dates,O
or,O
over,O
any,O
period,O
or,O
periods,O
determined,O
by,O
the,O
Administrator,O
.,O
,O
The,O
Administrator,O
shall,O
specify,O
the,O
distribution,O
dates,O
applicable,O
to,O
each,O
award,O
of,O
Restricted,O
Stock,O
Units,O
which,O
shall,O
be,O
no,O
earlier,O
than,O
the,O
vesting,O
dates,O
or,O
events,O
of,O
the,O
award,O
and,O
may,O
be,O
determined,O
at,O
the,O
election,O
of,O
the,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
;,O
provided,O
that,O
",",O
except,O
as,O
otherwise,O
determined,O
by,O
the,O
Administrator,O
",",O
set,O
forth,O
in,O
any,O
applicable,O
Award,O
Agreement,O
",",O
and,O
subject,O
to,O
compliance,O
with,O
Section,O
409A,O
of,O
the,O
Code,O
",",O
in,O
no,O
event,O
shall,O
the,O
maturity,O
date,O
relating,O
to,O
each,O
Restricted,O
Stock,O
Unit,O
occur,O
following,O
the,O
later,O
of,O
(,O
a,O
),O
the,O
15th,O
day,O
of,O
the,O
third,O
month,O
following,O
the,O
end,O
of,O
calendar,O
year,O
in,O
which,O
the,O
Restricted,O
Stock,O
Unit,O
vests,O
;,O
or,O
(,O
b,O
),O
the,O
15th,O
day,O
of,O
the,O
third,O
month,O
following,O
the,O
end,O
of,O
the,O
Company,O
s,O
fiscal,O
year,O
in,O
which,O
the,O
Restricted,O
Stock,O
Unit,O
vests,O
.,O
,O
On,O
the,O
distribution,O
dates,O
",",O
the,O
Company,O
shall,O
transfer,O
to,O
the,O
Holder,O
one,O
unrestricted,O
",",O
fully,O
transferable,O
share,O
of,O
Common,O
Stock,O
for,O
each,O
Restricted,O
Stock,O
Unit,O
scheduled,O
to,O
be,O
paid,O
out,O
on,O
such,O
date,O
and,O
not,O
previously,O
forfeited,O
",",O
or,O
in,O
the,O
sole,O
discretion,O
of,O
the,O
Administrator,O
",",O
an,O
amount,O
in,O
cash,O
equal,O
to,O
the,O
Fair,O
Market,O
Value,O
of,O
such,O
shares,O
on,O
the,O
maturity,O
date,O
or,O
a,O
combination,O
of,O
cash,O
and,O
Common,O
Stock,O
as,O
determined,O
by,O
the,O
Administrator,O
.,O
,O
The,O
Administrator,O
shall,O
specify,O
the,O
purchase,O
price,O
",",O
if,O
any,O
",",O
to,O
be,O
paid,O
by,O
the,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
to,O
the,O
Company,O
for,O
such,O
shares,O
of,O
Common,O
Stock,O
to,O
be,O
distributed,O
pursuant,O
to,O
the,O
Restricted,O
Stock,O
Unit,O
award,O
.,O
,O
The,O
term,O
of,O
a,O
Dividend,O
Equivalent,O
award,O
",",O
Deferred,O
Stock,O
award,O
",",O
Stock,O
Payment,O
award,O
and/or,O
Restricted,O
Stock,O
Unit,O
award,O
shall,O
be,O
set,O
by,O
the,O
Administrator,O
in,O
its,O
discretion,O
.,O
,O
Exercise,O
or,O
Purchase,O
Price,O
.,O
,O
The,O
Administrator,O
may,O
establish,O
the,O
exercise,O
or,O
purchase,O
price,O
of,O
shares,O
of,O
Deferred,O
Stock,O
",",O
shares,O
distributed,O
as,O
a,O
Stock,O
Payment,O
award,O
or,O
shares,O
distributed,O
pursuant,O
to,O
a,O
Restricted,O
Stock,O
Unit,O
award,O
;,O
provided,O
",",O
however,O
",",O
that,O
such,O
price,O
shall,O
not,O
be,O
less,O
than,O
the,O
par,O
value,O
of,O
a,O
share,O
of,O
Common,O
Stock,O
",",O
unless,O
otherwise,O
permitted,O
by,O
applicable,O
state,O
law,O
.,O
,O
Exercise,O
upon,O
Termination,O
of,O
Employment,O
",",O
Termination,O
of,O
Consultancy,O
or,O
Termination,O
of,O
Directorship,O
.,O
,O
A,O
Dividend,O
Equivalent,O
award,O
",",O
Deferred,O
Stock,O
award,O
",",O
Stock,O
Payment,O
award,O
and/or,O
Restricted,O
Stock,O
Unit,O
award,O
is,O
distributable,O
only,O
while,O
the,O
Holder,O
is,O
an,O
Employee,O
",",O
Consultant,O
or,O
Independent,O
Director,O
",",O
as,O
applicable,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
Administrator,O
in,O
its,O
sole,O
and,O
absolute,O
discretion,O
may,O
provide,O
that,O
the,O
Dividend,O
Equivalent,O
award,O
",",O
Deferred,O
Stock,O
award,O
",",O
Stock,O
Payment,O
award,O
and/or,O
Restricted,O
Stock,O
Unit,O
award,O
may,O
be,O
distributed,O
subsequent,O
to,O
a,O
Termination,O
of,O
Employment,O
",",O
Termination,O
of,O
Directorship,O
or,O
Termination,O
of,O
Consultancy,O
following,O
a,O
change,O
of,O
control,O
or,O
ownership,O
(,O
within,O
the,O
meaning,O
of,O
Section,O
1.162-27,O
(,O
e,O
),O
(,O
2,O
),O
(,O
v,O
),O
or,O
any,O
successor,O
regulation,O
thereto,O
),O
of,O
the,O
Company,O
.,O
,O
Form,O
of,O
Payment,O
.,O
,O
Payment,O
of,O
the,O
amount,O
determined,O
under,O
Section,O
8.2,O
above,O
shall,O
be,O
in,O
cash,O
",",O
in,O
Common,O
Stock,O
or,O
a,O
combination,O
of,O
both,O
",",O
as,O
determined,O
by,O
the,O
Administrator,O
.,O
,O
To,O
the,O
extent,O
any,O
payment,O
under,O
this,O
Article,O
VIII,O
is,O
effected,O
in,O
Common,O
Stock,O
",",O
it,O
shall,O
be,O
made,O
subject,O
to,O
satisfaction,O
of,O
all,O
provisions,O
of,O
Section,O
6.3,O
.,O
,O
Grant,O
of,O
Stock,O
Appreciation,O
Rights,O
.,O
,O
A,O
Stock,O
Appreciation,O
Right,O
may,O
be,O
granted,O
to,O
any,O
key,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
selected,O
by,O
the,O
Administrator,O
.,O
,O
A,O
Stock,O
Appreciation,O
Right,O
may,O
be,O
granted,O
:,O
(,O
a,O
),O
in,O
connection,O
and,O
simultaneously,O
with,O
the,O
grant,O
of,O
an,O
Option,O
",",O
(,O
b,O
),O
with,O
respect,O
to,O
a,O
previously,O
granted,O
Option,O
",",O
or,O
(,O
c,O
),O
independent,O
of,O
an,O
Option,O
.,O
,O
A,O
Stock,O
Appreciation,O
Right,O
shall,O
be,O
subject,O
to,O
such,O
terms,O
and,O
conditions,O
not,O
inconsistent,O
with,O
the,O
Plan,O
as,O
the,O
Administrator,O
shall,O
impose,O
and,O
shall,O
be,O
evidenced,O
by,O
an,O
Award,O
Agreement,O
.,O
,O
Coupled,O
Stock,O
Appreciation,O
Rights,O
.,O
,O
(,O
a,O
),O
A,O
Coupled,O
Stock,O
Appreciation,O
Right,O
(,O
CSAR,O
),O
shall,O
be,O
related,O
to,O
a,O
particular,O
Option,O
and,O
shall,O
be,O
exercisable,O
only,O
when,O
and,O
to,O
the,O
extent,O
the,O
related,O
Option,O
is,O
exercisable,O
.,O
,O
(,O
b,O
),O
A,O
CSAR,O
may,O
be,O
granted,O
to,O
the,O
Holder,O
for,O
no,O
more,O
than,O
the,O
number,O
of,O
shares,O
subject,O
to,O
the,O
simultaneously,O
or,O
previously,O
granted,O
Option,O
to,O
which,O
it,O
is,O
coupled,O
.,O
,O
(,O
c,O
),O
A,O
CSAR,O
shall,O
entitle,O
the,O
Holder,O
(,O
or,O
other,O
person,O
entitled,O
to,O
exercise,O
the,O
Option,O
pursuant,O
to,O
the,O
Plan,O
),O
to,O
surrender,O
to,O
the,O
Company,O
unexercised,O
a,O
portion,O
of,O
the,O
Option,O
to,O
which,O
the,O
CSAR,O
relates,O
(,O
to,O
the,O
extent,O
then,O
exercisable,O
pursuant,O
to,O
its,O
terms,O
),O
and,O
to,O
receive,O
from,O
the,O
Company,O
in,O
exchange,O
therefor,O
an,O
amount,O
determined,O
by,O
multiplying,O
the,O
difference,O
obtained,O
by,O
subtracting,O
the,O
Option,O
exercise,O
price,O
from,O
the,O
Fair,O
Market,O
Value,O
of,O
a,O
share,O
of,O
Common,O
Stock,O
on,O
the,O
date,O
of,O
exercise,O
of,O
the,O
CSAR,O
by,O
the,O
number,O
of,O
shares,O
of,O
Common,O
Stock,O
with,O
respect,O
to,O
which,O
the,O
CSAR,O
shall,O
have,O
been,O
exercised,O
",",O
subject,O
to,O
any,O
limitations,O
the,O
Administrator,O
may,O
impose,O
.,O
,O
Independent,O
Stock,O
Appreciation,O
Rights,O
.,O
,O
(,O
a,O
),O
An,O
Independent,O
Stock,O
Appreciation,O
Right,O
(,O
ISAR,O
),O
shall,O
be,O
unrelated,O
to,O
any,O
Option,O
and,O
shall,O
have,O
a,O
term,O
set,O
by,O
the,O
Administrator,O
provided,O
",",O
however,O
",",O
that,O
the,O
term,O
shall,O
not,O
be,O
more,O
than,O
ten,O
(,O
10,O
),O
years,O
from,O
the,O
date,O
the,O
ISAR,O
is,O
granted,O
.,O
,O
An,O
ISAR,O
shall,O
be,O
exercisable,O
in,O
such,O
installments,O
as,O
the,O
Administrator,O
may,O
determine,O
.,O
,O
An,O
ISAR,O
shall,O
cover,O
such,O
number,O
of,O
shares,O
of,O
Common,O
Stock,O
as,O
the,O
Administrator,O
may,O
determine,O
.,O
,O
The,O
exercise,O
price,O
per,O
share,O
of,O
Common,O
Stock,O
subject,O
to,O
each,O
ISAR,O
shall,O
be,O
set,O
by,O
the,O
Administrator,O
;,O
provided,O
",",O
that,O
such,O
exercise,O
price,O
per,O
share,O
shall,O
not,O
be,O
less,O
than,O
100,O
%,O
of,O
the,O
Fair,O
Market,O
Value,O
of,O
a,O
share,O
of,O
Common,O
Stock,O
on,O
the,O
date,O
the,O
ISAR,O
is,O
granted,O
.,O
,O
An,O
ISAR,O
is,O
exercisable,O
only,O
while,O
the,O
Holder,O
is,O
an,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
;,O
provided,O
",",O
that,O
the,O
Administrator,O
may,O
determine,O
that,O
the,O
ISAR,O
may,O
be,O
exercised,O
subsequent,O
to,O
Termination,O
of,O
Employment,O
",",O
Termination,O
of,O
Directorship,O
or,O
Termination,O
of,O
Consultancy,O
without,O
cause,O
",",O
or,O
following,O
a,O
Change,O
in,O
Control,O
of,O
the,O
Company,O
",",O
or,O
because,O
of,O
the,O
Holder,O
s,O
retirement,O
",",O
death,O
or,O
disability,O
",",O
or,O
otherwise,O
.,O
,O
Notwithstanding,O
any,O
of,O
the,O
forgoing,O
",",O
in,O
the,O
event,O
the,O
term,O
of,O
an,O
ISAR,O
would,O
expire,O
at,O
a,O
time,O
when,O
trading,O
in,O
shares,O
of,O
the,O
Common,O
Stock,O
by,O
Holder,O
is,O
prohibited,O
by,O
law,O
or,O
the,O
Company,O
s,O
insider,O
trading,O
policy,O
",",O
the,O
term,O
of,O
such,O
ISAR,O
shall,O
automatically,O
be,O
extended,O
",",O
subject,O
to,O
a,O
maximum,O
of,O
ten,O
(,O
10,O
),O
years,O
from,O
the,O
date,O
the,O
ISAR,O
is,O
granted,O
",",O
to,O
the,O
30th,O
day,O
following,O
the,O
expiration,O
of,O
any,O
applicable,O
trading,O
prohibition,O
.,O
,O
(,O
b,O
),O
An,O
ISAR,O
shall,O
entitle,O
the,O
Holder,O
(,O
or,O
other,O
person,O
entitled,O
to,O
exercise,O
the,O
ISAR,O
pursuant,O
to,O
the,O
Plan,O
),O
to,O
exercise,O
all,O
or,O
a,O
specified,O
portion,O
of,O
the,O
ISAR,O
(,O
to,O
the,O
extent,O
then,O
exercisable,O
pursuant,O
to,O
its,O
terms,O
),O
and,O
to,O
receive,O
from,O
the,O
Company,O
an,O
amount,O
determined,O
by,O
multiplying,O
the,O
difference,O
obtained,O
by,O
subtracting,O
the,O
exercise,O
price,O
per,O
share,O
of,O
the,O
ISAR,O
from,O
the,O
Fair,O
Market,O
Value,O
of,O
a,O
share,O
of,O
Common,O
Stock,O
on,O
the,O
date,O
of,O
exercise,O
of,O
the,O
ISAR,O
by,O
the,O
number,O
of,O
shares,O
of,O
Common,O
Stock,O
with,O
respect,O
to,O
which,O
the,O
ISAR,O
shall,O
have,O
been,O
exercised,O
",",O
subject,O
to,O
any,O
limitations,O
the,O
Administrator,O
may,O
impose,O
.,O
,O
Payment,O
and,O
Limitations,O
on,O
Exercise,O
.,O
,O
combination,O
of,O
both,O
",",O
as,O
determined,O
by,O
the,O
Administrator,O
.,O
,O
To,O
the,O
extent,O
such,O
payment,O
is,O
effected,O
in,O
Common,O
Stock,O
it,O
shall,O
be,O
made,O
subject,O
to,O
satisfaction,O
of,O
all,O
provisions,O
of,O
Section,O
6.3,O
above,O
pertaining,O
to,O
Options,O
.,O
,O
(,O
b,O
),O
Holders,O
of,O
Stock,O
Appreciation,O
Rights,O
may,O
be,O
required,O
to,O
comply,O
with,O
any,O
timing,O
or,O
other,O
restrictions,O
with,O
respect,O
to,O
the,O
settlement,O
or,O
exercise,O
of,O
a,O
Stock,O
Appreciation,O
Right,O
",",O
including,O
a,O
window-period,O
limitation,O
",",O
as,O
may,O
be,O
imposed,O
in,O
the,O
discretion,O
of,O
the,O
Administrator,O
.,O
,O
Awards,O
subject,O
to,O
Code,O
Section,O
409A,O
.,O
,O
Any,O
Award,O
that,O
constitutes,O
",",O
or,O
provides,O
for,O
",",O
a,O
deferral,O
of,O
compensation,O
subject,O
to,O
Section,O
409A,O
of,O
the,O
Code,O
(,O
a,O
Section,O
409A,O
Award,O
),O
shall,O
satisfy,O
the,O
requirements,O
of,O
Section,O
409A,O
of,O
the,O
Code,O
and,O
this,O
Article,O
X,O
",",O
to,O
the,O
extent,O
applicable,O
.,O
,O
The,O
Award,O
Agreement,O
with,O
respect,O
to,O
a,O
Section,O
409A,O
Award,O
shall,O
incorporate,O
the,O
terms,O
and,O
conditions,O
required,O
by,O
Section,O
409A,O
of,O
the,O
Code,O
and,O
this,O
Article,O
X,O
.,O
,O
Distributions,O
under,O
a,O
Section,O
409A,O
Award,O
.,O
,O
(,O
a,O
),O
Subject,O
to,O
subsection,O
(,O
b,O
),O
",",O
any,O
shares,O
of,O
Common,O
Stock,O
",",O
cash,O
or,O
other,O
property,O
or,O
amounts,O
to,O
be,O
paid,O
or,O
distributed,O
upon,O
the,O
grant,O
",",O
issuance,O
",",O
vesting,O
",",O
exercise,O
or,O
payment,O
of,O
a,O
Section,O
409A,O
Award,O
shall,O
be,O
distributed,O
in,O
accordance,O
with,O
the,O
requirements,O
of,O
Section,O
409A,O
(,O
a,O
),O
(,O
2,O
),O
of,O
the,O
Code,O
",",O
and,O
shall,O
not,O
be,O
distributed,O
earlier,O
than,O
:,O
,O
(,O
i,O
),O
the,O
Holder,O
s,O
separation,O
from,O
service,O
",",O
as,O
determined,O
by,O
the,O
Secretary,O
of,O
the,O
Treasury,I-GOVERNMENT
",",O
,O
(,O
ii,O
),O
the,O
date,O
the,O
Holder,O
becomes,O
disabled,O
",",O
,O
(,O
iii,O
),O
the,O
Holder,O
s,O
death,O
",",O
,O
(,O
iv,O
),O
a,O
specified,O
time,O
(,O
or,O
pursuant,O
to,O
a,O
fixed,O
schedule,O
),O
specified,O
under,O
the,O
Award,O
Agreement,O
at,O
the,O
date,O
of,O
the,O
deferral,O
of,O
such,O
compensation,O
",",O
,O
(,O
vi,O
),O
the,O
occurrence,O
of,O
an,O
unforeseeable,O
emergency,O
with,O
respect,O
to,O
the,O
Holder,O
.,O
,O
(,O
b,O
),O
In,O
the,O
case,O
of,O
a,O
Holder,O
who,O
is,O
a,O
specified,O
employee,O
",",O
the,O
requirement,O
of,O
paragraph,O
(,O
a,O
),O
(,O
i,O
),O
shall,O
be,O
met,O
only,O
if,O
the,O
distributions,O
with,O
respect,O
to,O
the,O
Section,O
409A,O
Award,O
may,O
not,O
be,O
made,O
before,O
the,O
date,O
which,O
is,O
six,O
months,O
after,O
the,O
Holder,O
s,O
separation,O
from,O
service,O
(,O
or,O
",",O
if,O
earlier,O
",",O
the,O
date,O
of,O
the,O
Holder,O
s,O
death,O
),O
.,O
,O
For,O
purposes,O
of,O
this,O
subsection,O
(,O
b,O
),O
",",O
a,O
Holder,O
shall,O
be,O
a,O
specified,O
employee,O
if,O
such,O
Holder,O
is,O
a,O
key,O
employee,O
(,O
as,O
defined,O
in,O
Section,O
416,O
(,O
i,O
),O
of,O
the,O
Code,O
without,O
regard,O
to,O
paragraph,O
(,O
5,O
),O
thereof,O
),O
of,O
a,O
corporation,O
any,O
stock,O
of,O
which,O
is,O
publicly,O
traded,O
on,O
an,O
established,O
securities,O
market,O
or,O
otherwise,O
",",O
as,O
determined,O
under,O
Section,O
409A,O
(,O
a,O
),O
(,O
2,O
),O
(,O
B,O
),O
(,O
i,O
),O
of,O
the,O
Code,O
and,O
the,O
Treasury,I-LEGISLATION/ACT
Regulations,I-LEGISLATION/ACT
thereunder,O
.,O
,O
(,O
c,O
),O
The,O
requirement,O
of,O
paragraph,O
(,O
a,O
),O
(,O
vi,O
),O
shall,O
be,O
met,O
only,O
if,O
",",O
as,O
determined,O
under,O
Treasury,I-LEGISLATION/ACT
Regulations,I-LEGISLATION/ACT
under,O
Section,O
409A,O
(,O
a,O
),O
(,O
2,O
),O
(,O
B,O
),O
(,O
ii,O
),O
of,O
the,O
Code,O
",",O
the,O
amounts,O
distributed,O
with,O
respect,O
to,O
the,O
unforeseeable,O
emergency,O
do,O
not,O
exceed,O
the,O
amounts,O
necessary,O
to,O
satisfy,O
such,O
unforeseeable,O
emergency,O
plus,O
amounts,O
necessary,O
to,O
pay,O
taxes,O
reasonably,O
anticipated,O
as,O
a,O
result,O
of,O
the,O
distribution,O
",",O
after,O
taking,O
into,O
account,O
the,O
extent,O
to,O
which,O
such,O
unforeseeable,O
emergency,O
is,O
or,O
may,O
be,O
relieved,O
through,O
reimbursement,O
or,O
compensation,O
by,O
insurance,O
or,O
otherwise,O
or,O
by,O
liquidation,O
of,O
the,O
Holder,O
s,O
assets,O
(,O
to,O
the,O
extent,O
the,O
liquidation,O
of,O
such,O
assets,O
would,O
not,O
itself,O
cause,O
severe,O
financial,O
hardship,O
),O
.,O
,O
(,O
d,O
),O
For,O
purposes,O
of,O
this,O
Section,O
",",O
the,O
terms,O
specified,O
therein,O
shall,O
have,O
the,O
respective,O
meanings,O
ascribed,O
thereto,O
under,O
Section,O
409A,O
of,O
the,O
Code,O
and,O
the,O
Treasury,I-LEGISLATION/ACT
Regulations,I-LEGISLATION/ACT
thereunder,O
.,O
,O
Prohibition,O
on,O
Acceleration,O
of,O
Benefits,O
.,O
,O
The,O
time,O
or,O
schedule,O
of,O
any,O
distribution,O
or,O
payment,O
of,O
any,O
shares,O
of,O
Common,O
Stock,O
",",O
cash,O
or,O
other,O
property,O
or,O
amounts,O
under,O
a,O
Section,O
409A,O
Award,O
shall,O
not,O
be,O
accelerated,O
",",O
except,O
as,O
otherwise,O
permitted,O
under,O
Section,O
409A,O
(,O
a,O
),O
(,O
3,O
),O
of,O
the,O
Code,O
and,O
the,O
Treasury,I-LEGISLATION/ACT
Regulations,I-LEGISLATION/ACT
thereunder,O
.,O
,O
Elections,O
under,O
Section,O
409A,O
Awards,O
.,O
,O
(,O
a,O
),O
Any,O
deferral,O
election,O
provided,O
under,O
or,O
with,O
respect,O
to,O
an,O
Award,O
to,O
any,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
",",O
or,O
to,O
the,O
Holder,O
of,O
a,O
Section,O
409A,O
Award,O
",",O
shall,O
satisfy,O
the,O
requirements,O
of,O
Section,O
409A,O
(,O
a,O
),O
(,O
4,O
),O
(,O
B,O
),O
of,O
the,O
Code,O
",",O
to,O
the,O
extent,O
applicable,O
",",O
and,O
",",O
except,O
as,O
otherwise,O
permitted,O
under,O
paragraph,O
(,O
i,O
),O
or,O
(,O
ii,O
),O
",",O
any,O
such,O
deferral,O
election,O
with,O
respect,O
to,O
compensation,O
for,O
services,O
performed,O
during,O
a,O
taxable,O
year,O
shall,O
be,O
made,O
not,O
later,O
than,O
the,O
close,O
of,O
the,O
preceding,O
taxable,O
year,O
",",O
or,O
at,O
such,O
other,O
time,O
as,O
provided,O
in,O
Treasury,I-LEGISLATION/ACT
Regulations,I-LEGISLATION/ACT
.,O
,O
(,O
i,O
),O
In,O
the,O
case,O
of,O
the,O
first,O
year,O
in,O
which,O
an,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
",",O
or,O
the,O
Holder,O
",",O
becomes,O
eligible,O
to,O
participate,O
in,O
the,O
Plan,O
",",O
any,O
such,O
deferral,O
election,O
may,O
be,O
made,O
with,O
respect,O
to,O
services,O
to,O
be,O
performed,O
subsequent,O
to,O
the,O
election,O
with,O
thirty,O
(,O
30,O
),O
days,O
after,O
the,O
date,O
the,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
",",O
or,O
the,O
Holder,O
",",O
becomes,O
eligible,O
to,O
participate,O
in,O
the,O
Plan,O
",",O
as,O
provided,O
under,O
Section,O
409A,O
(,O
a,O
),O
(,O
4,O
),O
(,O
B,O
),O
(,O
ii,O
),O
of,O
the,O
Code,O
.,O
,O
(,O
ii,O
),O
In,O
the,O
case,O
of,O
any,O
performance-based,O
compensation,O
based,O
on,O
services,O
performed,O
by,O
an,O
Employee,O
",",O
Independent,O
Director,O
or,O
Consultant,O
",",O
or,O
the,O
Holder,O
",",O
over,O
a,O
period,O
of,O
at,O
least,O
twelve,O
(,O
12,O
),O
months,O
",",O
any,O
such,O
deferral,O
election,O
may,O
be,O
made,O
no,O
later,O
than,O
six,O
months,O
before,O
the,O
end,O
of,O
the,O
period,O
",",O
as,O
provided,O
under,O
Section,O
409A,O
(,O
a,O
),O
(,O
4,O
),O
(,O
B,O
),O
(,O
iii,O
),O
of,O
the,O
Code,O
.,O
,O
(,O
b,O
),O
In,O
the,O
event,O
that,O
a,O
Section,O
409A,O
Award,O
permits,O
",",O
under,O
a,O
subsequent,O
election,O
by,O
the,O
Holder,O
of,O
such,O
Section,O
409A,O
Award,O
",",O
a,O
delay,O
in,O
a,O
distribution,O
or,O
payment,O
of,O
any,O
shares,O
of,O
Common,O
Stock,O
",",O
cash,O
or,O
other,O
property,O
or,O
amounts,O
under,O
such,O
Section,O
409A,O
Award,O
",",O
or,O
a,O
change,O
in,O
the,O
form,O
of,O
distribution,O
or,O
payment,O
",",O
such,O
subsequent,O
election,O
shall,O
satisfy,O
the,O
requirements,O
of,O
Section,O
409A,O
(,O
a,O
),O
(,O
4,O
),O
(,O
C,O
),O
of,O
the,O
Code,O
",",O
and,O
:,O
,O
(,O
i,O
),O
such,O
subsequent,O
election,O
may,O
not,O
take,O
effect,O
until,O
at,O
least,O
twelve,O
(,O
12,O
),O
months,O
after,O
the,O
date,O
on,O
which,O
the,O
election,O
is,O
made,O
",",O
,O
(,O
iii,O
),O
in,O
the,O
case,O
such,O
subsequent,O
election,O
relates,O
to,O
a,O
distribution,O
or,O
payment,O
described,O
in,O
Section,O
10.2,O
(,O
a,O
),O
(,O
iv,O
),O
",",O
such,O
election,O
may,O
not,O
be,O
made,O
less,O
than,O
twelve,O
(,O
12,O
),O
months,O
prior,O
to,O
the,O
date,O
of,O
the,O
first,O
scheduled,O
distribution,O
or,O
payment,O
under,O
Section,O
10.2,O
(,O
a,O
),O
(,O
iv,O
),O
.,O
,O
Compliance,O
in,O
Form,O
and,O
Operation,O
.,O
,O
A,O
Section,O
409A,O
Award,O
",",O
and,O
any,O
election,O
under,O
or,O
with,O
respect,O
to,O
such,O
Section,O
409A,O
Award,O
",",O
shall,O
comply,O
in,O
form,O
and,O
operation,O
with,O
the,O
requirements,O
of,O
Section,O
409A,O
of,O
the,O
Code,O
and,O
the,O
Treasury,I-LEGISLATION/ACT
Regulations,I-LEGISLATION/ACT
thereunder,O
.,O
,O
The,O
Compensation,O
Committee,O
(,O
or,O
another,O
committee,O
or,O
a,O
subcommittee,O
of,O
the,O
Board,O
assuming,O
the,O
functions,O
of,O
the,O
Committee,O
under,O
the,O
Plan,O
),O
shall,O
consist,O
solely,O
of,O
two,O
or,O
more,O
Independent,O
Directors,O
appointed,O
by,O
and,O
holding,O
office,O
at,O
the,O
pleasure,O
of,O
the,O
Board,O
",",O
each,O
of,O
whom,O
is,O
both,O
a,O
non-employee,O
director,O
as,O
defined,O
by,O
Rule,O
16b-3,O
",",O
an,O
outside,O
director,O
for,O
purposes,O
of,O
Section,O
162,O
(,O
m,O
),O
of,O
the,O
Code,O
and,O
an,O
independent,O
director,O
under,O
the,O
rules,O
of,O
any,O
securities,O
exchange,O
or,O
automated,O
quotation,O
system,O
on,O
which,O
the,O
Shares,O
are,O
listed,O
",",O
quoted,O
or,O
traded,O
.,O
,O
Appointment,O
of,O
Committee,O
members,O
shall,O
be,O
effective,O
upon,O
acceptance,O
of,O
appointment,O
.,O
,O
Committee,O
members,O
may,O
resign,O
at,O
any,O
time,O
by,O
delivering,O
written,O
notice,O
to,O
the,O
Board,O
.,O
,O
Vacancies,O
in,O
the,O
Committee,O
may,O
be,O
filled,O
by,O
the,O
Board,O
.,O
,O
Duties,O
and,O
Powers,O
of,O
Committee,O
.,O
,O
It,O
shall,O
be,O
the,O
duty,O
of,O
the,O
Committee,O
to,O
conduct,O
the,O
general,O
administration,O
of,O
the,O
Plan,O
in,O
accordance,O
with,O
its,O
provisions,O
.,O
,O
The,O
Committee,O
shall,O
have,O
the,O
power,O
to,O
interpret,O
the,O
Plan,O
and,O
the,O
Award,O
Agreements,O
",",O
and,O
to,O
adopt,O
such,O
rules,O
for,O
the,O
administration,O
",",O
interpretation,O
and,O
application,O
of,O
the,O
Plan,O
as,O
are,O
consistent,O
therewith,O
",",O
to,O
interpret,O
",",O
amend,O
or,O
revoke,O
any,O
such,O
rules,O
and,O
to,O
amend,O
any,O
Award,O
Agreement,O
provided,O
that,O
the,O
rights,O
or,O
obligations,O
of,O
the,O
Holder,O
of,O
the,O
Award,O
that,O
is,O
the,O
subject,O
of,O
any,O
such,O
Award,O
Agreement,O
are,O
not,O
affected,O
adversely,O
.,O
,O
Any,O
such,O
grant,O
or,O
award,O
under,O
the,O
Plan,O
need,O
not,O
be,O
the,O
same,O
with,O
respect,O
to,O
each,O
Holder,O
.,O
,O
Any,O
such,O
interpretations,O
and,O
rules,O
with,O
respect,O
to,O
Incentive,O
Stock,O
Options,O
shall,O
be,O
consistent,O
with,O
the,O
provisions,O
of,O
Section,O
422,O
of,O
the,O
Code,O
.,O
,O
In,O
its,O
absolute,O
discretion,O
",",O
the,O
Board,O
may,O
at,O
any,O
time,O
and,O
from,O
time,O
to,O
time,O
exercise,O
any,O
and,O
all,O
rights,O
and,O
duties,O
of,O
the,O
Committee,O
under,O
the,O
Plan,O
except,O
with,O
respect,O
to,O
matters,O
which,O
under,O
Rule,O
16b-3,O
or,O
Section,O
162,O
(,O
m,O
),O
of,O
the,O
Code,O
",",O
or,O
any,O
regulations,O
or,O
rules,O
issued,O
thereunder,O
",",O
are,O
required,O
to,O
be,O
determined,O
in,O
the,O
sole,O
discretion,O
of,O
the,O
Committee,O
.,O
,O
Notwithstanding,O
the,O
foregoing,O
",",O
the,O
full,O
Board,O
",",O
acting,O
by,O
a,O
majority,O
of,O
its,O
members,O
in,O
office,O
",",O
shall,O
conduct,O
the,O
general,O
administration,O
of,O
the,O
Plan,O
with,O
respect,O
to,O
Awards,O
granted,O
to,O
Independent,O
Directors,O
.,O
,O
Majority,O
Rule,O
;,O
Unanimous,O
Written,O
Consent,O
.,O
,O
The,O
Committee,O
shall,O
act,O
by,O
a,O
majority,O
of,O
its,O
members,O
in,O
attendance,O
at,O
a,O
meeting,O
at,O
which,O
a,O
quorum,O
is,O
present,O
or,O
by,O
a,O
memorandum,O
or,O
other,O
written,O
instrument,O
signed,O
by,O
all,O
members,O
of,O
the,O
Committee,O
.,O
,O
Compensation,O
;,O
Professional,O
Assistance,O
;,O
Good,O
Faith,O
Actions,O
.,O
,O
Members,O
of,O
the,O
Committee,O
shall,O
receive,O
such,O
compensation,O
",",O
if,O
any,O
",",O
for,O
their,O
services,O
as,O
members,O
as,O
may,O
be,O
determined,O
by,O
the,O
Board,O
.,O
,O
All,O
expenses,O
and,O
liabilities,O
which,O
members,O
of,O
the,O
Committee,O
incur,O
in,O
connection,O
with,O
the,O
administration,O
of,O
the,O
Plan,O
shall,O
be,O
borne,O
by,O
the,O
Company,O
.,O
,O
The,O
Committee,O
may,O
",",O
with,O
the,O
approval,O
of,O
the,O
Board,O
",",O
employ,O
attorneys,O
",",O
consultants,O
",",O
accountants,O
",",O
appraisers,O
",",O
brokers,O
or,O
other,O
persons,O
.,O
,O
The,O
Committee,O
",",O
the,O
Company,O
and,O
the,O
Company,O
s,O
officers,O
and,O
Directors,O
shall,O
be,O
entitled,O
to,O
rely,O
upon,O
the,O
advice,O
",",O
opinions,O
or,O
valuations,O
of,O
any,O
such,O
persons,O
.,O
,O
All,O
actions,O
taken,O
and,O
all,O
interpretations,O
and,O
determinations,O
made,O
by,O
the,O
Committee,O
or,O
the,O
Board,O
in,O
good,O
faith,O
shall,O
be,O
final,O
and,O
binding,O
upon,O
all,O
Holders,O
",",O
the,O
Company,O
and,O
all,O
other,O
interested,O
persons,O
.,O
,O
No,O
members,O
of,O
the,O
Committee,O
or,O
Board,O
shall,O
be,O
personally,O
liable,O
for,O
any,O
action,O
",",O
determination,O
or,O
interpretation,O
made,O
in,O
good,O
faith,O
with,O
respect,O
to,O
the,O
Plan,O
or,O
Awards,O
",",O
and,O
all,O
members,O
of,O
the,O
Committee,O
and,O
the,O
Board,O
shall,O
be,O
fully,O
protected,O
by,O
the,O
Company,O
in,O
respect,O
of,O
any,O
such,O
action,O
",",O
determination,O
or,O
interpretation,O
.,O
,O
Delegation,O
of,O
Authority,O
to,O
Grant,O
Awards,O
.,O
,O
The,O
Committee,O
may,O
",",O
but,O
need,O
not,O
",",O
delegate,O
from,O
time,O
to,O
time,O
some,O
or,O
all,O
of,O
its,O
authority,O
to,O
grant,O
Awards,O
under,O
the,O
Plan,O
to,O
a,O
committee,O
consisting,O
of,O
one,O
or,O
more,O
members,O
of,O
the,O
Committee,O
or,O
of,O
one,O
or,O
more,O
officers,O
of,O
the,O
Company,O
",",O
to,O
the,O
extent,O
permitted,O
by,O
applicable,O
state,O
law,O
and,O
rules,O
of,O
any,O
securities,O
exchange,O
or,O
automated,O
quotation,O
system,O
on,O
which,O
the,O
Shares,O
are,O
listed,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
Committee,O
may,O
not,O
delegate,O
its,O
authority,O
to,O
grant,O
Awards,O
to,O
individuals,O
:,O
(,O
a,O
),O
who,O
are,O
subject,O
on,O
the,O
date,O
of,O
the,O
grant,O
to,O
the,O
reporting,O
rules,O
under,O
Section,O
16,O
(,O
a,O
),O
of,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
",",O
(,O
b,O
),O
who,O
are,O
Section,O
162,O
(,O
m,O
),O
Participants,O
",",O
or,O
(,O
c,O
),O
who,O
are,O
officers,O
of,O
the,O
Company,O
who,O
are,O
delegated,O
authority,O
by,O
the,O
Committee,O
hereunder,O
.,O
,O
Any,O
delegation,O
hereunder,O
shall,O
be,O
subject,O
to,O
the,O
restrictions,O
and,O
limits,O
that,O
the,O
Committee,O
specifies,O
at,O
the,O
time,O
of,O
such,O
delegation,O
of,O
authority,O
and,O
may,O
be,O
rescinded,O
at,O
any,O
time,O
by,O
the,O
Committee,O
.,O
,O
At,O
all,O
times,O
",",O
any,O
committee,O
appointed,O
under,O
this,O
Section,O
11.5,O
shall,O
serve,O
in,O
such,O
capacity,O
at,O
the,O
pleasure,O
of,O
the,O
Committee,O
.,O
,O
Transferability,O
of,O
Awards,O
.,O
,O
(,O
a,O
),O
Except,O
as,O
otherwise,O
provided,O
in,O
Section,O
12.1,O
(,O
b,O
),O
:,O
,O
(,O
i,O
),O
No,O
Award,O
under,O
the,O
Plan,O
may,O
be,O
sold,O
",",O
pledged,O
",",O
assigned,O
or,O
transferred,O
in,O
any,O
manner,O
other,O
than,O
by,O
will,O
or,O
the,O
laws,O
of,O
descent,O
and,O
distribution,O
or,O
",",O
subject,O
to,O
the,O
consent,O
of,O
the,O
Administrator,O
",",O
pursuant,O
to,O
a,O
DRO,O
",",O
unless,O
and,O
until,O
such,O
Award,O
has,O
been,O
exercised,O
",",O
or,O
the,O
shares,O
underlying,O
such,O
Award,O
have,O
been,O
issued,O
",",O
and,O
all,O
restrictions,O
applicable,O
to,O
such,O
shares,O
have,O
lapsed,O
;,O
,O
(,O
iii,O
),O
During,O
the,O
lifetime,O
of,O
the,O
Holder,O
",",O
only,O
the,O
Holder,O
may,O
exercise,O
an,O
Option,O
or,O
other,O
Award,O
(,O
or,O
any,O
portion,O
thereof,O
),O
granted,O
to,O
him,O
under,O
the,O
Plan,O
",",O
unless,O
it,O
has,O
been,O
disposed,O
of,O
pursuant,O
to,O
a,O
DRO,O
;,O
after,O
the,O
death,O
of,O
the,O
Holder,O
",",O
any,O
exercisable,O
portion,O
of,O
an,O
Option,O
or,O
other,O
Award,O
may,O
",",O
prior,O
to,O
the,O
time,O
when,O
such,O
portion,O
becomes,O
unexercisable,O
under,O
the,O
Plan,O
or,O
the,O
applicable,O
Award,O
Agreement,O
",",O
be,O
exercised,O
by,O
his,O
personal,O
representative,O
or,O
by,O
any,O
person,O
empowered,O
to,O
do,O
so,O
under,O
the,O
deceased,O
Holder,O
s,O
will,O
or,O
under,O
the,O
then,O
applicable,O
laws,O
of,O
descent,O
and,O
distribution,O
.,O
,O
(,O
b,O
),O
Notwithstanding,O
Section,O
12.1,O
(,O
a,O
),O
",",O
the,O
Administrator,O
",",O
in,O
its,O
sole,O
discretion,O
",",O
may,O
determine,O
to,O
permit,O
a,O
Holder,O
to,O
transfer,O
a,O
Non-Qualified,O
Stock,O
Option,O
to,O
any,O
one,O
or,O
more,O
Permitted,O
Transferees,O
(,O
as,O
defined,O
below,O
),O
",",O
subject,O
to,O
the,O
following,O
terms,O
and,O
conditions,O
:,O
(,O
i,O
),O
a,O
Non-Qualified,O
Stock,O
Option,O
transferred,O
to,O
a,O
Permitted,O
Transferee,O
shall,O
not,O
be,O
assignable,O
or,O
transferable,O
by,O
the,O
Permitted,O
Transferee,O
other,O
than,O
by,O
will,O
or,O
the,O
laws,O
of,O
descent,O
and,O
distribution,O
;,O
(,O
ii,O
),O
any,O
Non-Qualified,O
Stock,O
Option,O
which,O
is,O
transferred,O
to,O
a,O
Permitted,O
Transferee,O
shall,O
continue,O
to,O
be,O
subject,O
to,O
all,O
the,O
terms,O
and,O
conditions,O
of,O
the,O
Non-Qualified,O
Stock,O
Option,O
as,O
applicable,O
to,O
the,O
original,O
Holder,O
(,O
other,O
than,O
the,O
ability,O
to,O
further,O
transfer,O
the,O
Non-Qualified,O
Stock,O
Option,O
),O
;,O
and,O
(,O
iii,O
),O
the,O
Holder,O
and,O
the,O
Permitted,O
Transferee,O
shall,O
execute,O
any,O
and,O
all,O
documents,O
requested,O
by,O
the,O
Administrator,O
",",O
including,O
",",O
without,O
limitation,O
documents,O
to,O
(,O
A,O
),O
confirm,O
the,O
status,O
of,O
the,O
transferee,O
as,O
a,O
Permitted,O
Transferee,O
",",O
(,O
B,O
),O
satisfy,O
any,O
requirements,O
for,O
an,O
exemption,O
for,O
the,O
transfer,O
under,O
applicable,O
federal,O
and,O
state,O
securities,O
laws,O
and,O
(,O
C,O
),O
evidence,O
the,O
transfer,O
.,O
,O
For,O
purposes,O
of,O
this,O
Section,O
12.1,O
(,O
b,O
),O
",",O
Permitted,O
Transferee,O
shall,O
mean,O
",",O
with,O
respect,O
to,O
a,O
Holder,O
",",O
any,O
child,O
",",O
stepchild,O
",",O
grandchild,O
",",O
parent,O
",",O
stepparent,O
",",O
grandparent,O
",",O
spouse,O
",",O
former,O
spouse,O
",",O
sibling,O
",",O
niece,O
",",O
nephew,O
",",O
mother-in-law,O
",",O
father-in-law,O
",",O
son-in-law,O
",",O
daughter-in-law,O
",",O
brother-in-law,O
",",O
or,O
sister-in-law,O
",",O
including,O
adoptive,O
relationships,O
",",O
any,O
person,O
sharing,O
the,O
Holder,O
s,O
household,O
(,O
other,O
than,O
a,O
tenant,O
or,O
employee,O
),O
",",O
a,O
trust,O
in,O
which,O
these,O
persons,O
(,O
or,O
the,O
Holder,O
),O
control,O
the,O
management,O
of,O
assets,O
",",O
and,O
any,O
other,O
entity,O
in,O
which,O
these,O
persons,O
(,O
or,O
the,O
Holder,O
),O
own,O
more,O
than,O
fifty,O
percent,O
of,O
the,O
voting,O
interests,O
",",O
or,O
any,O
other,O
transferee,O
specifically,O
approved,O
by,O
the,O
Administrator,O
after,O
taking,O
into,O
account,O
any,O
state,O
or,O
federal,O
tax,O
or,O
securities,O
laws,O
applicable,O
to,O
transferable,O
Non-Qualified,O
Stock,O
Options,O
.,O
,O
Amendment,O
",",O
Suspension,O
or,O
Termination,O
of,O
the,O
Plan,O
.,O
,O
Except,O
as,O
otherwise,O
provided,O
in,O
this,O
Section,O
12.2,O
",",O
the,O
Plan,O
may,O
be,O
wholly,O
or,O
partially,O
amended,O
or,O
otherwise,O
modified,O
",",O
suspended,O
or,O
terminated,O
at,O
any,O
time,O
or,O
from,O
time,O
to,O
time,O
by,O
the,O
Board,O
.,O
,O
However,O
",",O
without,O
approval,O
of,O
the,O
Company,O
s,O
stockholders,O
given,O
within,O
twelve,O
(,O
12,O
),O
months,O
before,O
or,O
after,O
the,O
action,O
by,O
the,O
Board,O
",",O
no,O
action,O
of,O
the,O
Board,O
may,O
",",O
except,O
as,O
provided,O
in,O
Section,O
12.3,O
",",O
(,O
i,O
),O
increase,O
the,O
limits,O
imposed,O
in,O
Section,O
2.1,O
on,O
the,O
maximum,O
number,O
of,O
shares,O
which,O
may,O
be,O
issued,O
under,O
the,O
Plan,O
",",O
or,O
the,O
maximum,O
number,O
of,O
shares,O
which,O
may,O
be,O
granted,O
or,O
issued,O
as,O
Restricted,O
Stock,O
awards,O
",",O
Restricted,O
Stock,O
Unit,O
awards,O
",",O
Dividend,O
Equivalent,O
awards,O
",",O
Deferred,O
Stock,O
awards,O
",",O
or,O
Stock,O
Payment,O
awards,O
",",O
(,O
ii,O
),O
expand,O
the,O
classes,O
of,O
persons,O
to,O
whom,O
Awards,O
may,O
be,O
granted,O
under,O
the,O
Plan,O
",",O
or,O
(,O
iii,O
),O
reduce,O
the,O
exercise,O
price,O
per,O
share,O
of,O
any,O
outstanding,O
Option,O
or,O
Stock,O
Appreciation,O
Right,O
granted,O
under,O
the,O
Plan,O
",",O
or,O
(,O
iv,O
),O
cancel,O
any,O
Option,O
or,O
Stock,O
Appreciation,O
Right,O
in,O
exchange,O
for,O
cash,O
or,O
another,O
Award,O
.,O
,O
No,O
amendment,O
",",O
suspension,O
or,O
termination,O
of,O
the,O
Plan,O
shall,O
",",O
without,O
the,O
consent,O
of,O
the,O
Holder,O
",",O
alter,O
or,O
impair,O
any,O
rights,O
or,O
obligations,O
under,O
any,O
Award,O
theretofore,O
granted,O
or,O
awarded,O
",",O
unless,O
the,O
Award,O
itself,O
otherwise,O
expressly,O
so,O
provides,O
.,O
,O
No,O
Awards,O
may,O
be,O
granted,O
or,O
awarded,O
during,O
any,O
period,O
of,O
suspension,O
or,O
after,O
termination,O
of,O
the,O
Plan,O
",",O
and,O
in,O
no,O
event,O
may,O
any,O
Award,O
be,O
granted,O
under,O
the,O
Plan,O
after,O
the,O
first,O
to,O
occur,O
of,O
the,O
following,O
events,O
:,O
,O
(,O
b,O
),O
The,O
expiration,O
of,O
ten,O
(,O
10,O
),O
years,O
from,O
the,O
date,O
this,O
fourth,O
amendment,O
and,O
restatement,O
of,O
the,O
Plan,O
is,O
approved,O
by,O
the,O
Company,O
s,O
stockholders,O
under,O
Section,O
12.4,O
.,O
,O
Changes,O
in,O
Common,O
Stock,O
or,O
Assets,O
of,O
the,O
Company,O
",",O
Acquisition,O
or,O
Liquidation,O
of,O
the,O
Company,O
and,O
Other,O
Corporate,O
Events,O
.,O
,O
(,O
a,O
),O
Subject,O
to,O
Section,O
12.3,O
(,O
e,O
),O
",",O
in,O
the,O
event,O
that,O
the,O
Administrator,O
determines,O
that,O
any,O
dividend,O
or,O
other,O
distribution,O
(,O
whether,O
in,O
the,O
form,O
of,O
cash,O
",",O
Common,O
Stock,O
",",O
other,O
securities,O
or,O
other,O
property,O
),O
",",O
recapitalization,O
",",O
reclassification,O
",",O
stock,O
split,O
",",O
reverse,O
stock,O
split,O
",",O
reorganization,O
",",O
merger,O
",",O
consolidation,O
",",O
split-up,O
",",O
spin-off,O
",",O
combination,O
",",O
repurchase,O
",",O
liquidation,O
",",O
dissolution,O
",",O
or,O
sale,O
",",O
transfer,O
",",O
exchange,O
or,O
other,O
disposition,O
of,O
all,O
or,O
substantially,O
all,O
of,O
the,O
assets,O
of,O
the,O
Company,O
",",O
or,O
exchange,O
of,O
Common,O
Stock,O
or,O
other,O
securities,O
of,O
the,O
Company,O
",",O
issuance,O
of,O
warrants,O
or,O
other,O
rights,O
to,O
purchase,O
Common,O
Stock,O
or,O
other,O
securities,O
of,O
the,O
Company,O
",",O
or,O
other,O
similar,O
corporate,O
transaction,O
or,O
event,O
affects,O
the,O
Common,O
Stock,O
",",O
then,O
the,O
Administrator,O
shall,O
equitably,O
adjust,O
any,O
or,O
all,O
of,O
the,O
following,O
in,O
order,O
to,O
prevent,O
dilution,O
or,O
enlargement,O
of,O
the,O
benefits,O
or,O
potential,O
benefits,O
intended,O
to,O
be,O
made,O
available,O
under,O
the,O
Plan,O
or,O
with,O
respect,O
to,O
an,O
Award,O
:,O
,O
(,O
i,O
),O
The,O
number,O
and,O
kind,O
of,O
shares,O
of,O
Common,O
Stock,O
(,O
or,O
other,O
securities,O
or,O
property,O
),O
with,O
respect,O
to,O
which,O
Awards,O
may,O
be,O
granted,O
or,O
awarded,O
(,O
including,O
",",O
but,O
not,O
limited,O
to,O
",",O
adjustments,O
of,O
the,O
limitations,O
in,O
Section,O
2.1,O
on,O
the,O
maximum,O
number,O
and,O
kind,O
of,O
shares,O
which,O
may,O
be,O
issued,O
under,O
the,O
Plan,O
",",O
and,O
the,O
maximum,O
number,O
and,O
kind,O
of,O
shares,O
which,O
may,O
be,O
granted,O
or,O
issued,O
as,O
Restricted,O
Stock,O
awards,O
",",O
Restricted,O
Stock,O
Unit,O
awards,O
",",O
Dividend,O
Equivalent,O
awards,O
",",O
Deferred,O
Stock,O
awards,O
or,O
Stock,O
Payment,O
awards,O
",",O
adjustments,O
of,O
the,O
Award,O
Limit,O
",",O
and,O
adjustments,O
of,O
the,O
manner,O
in,O
which,O
shares,O
subject,O
to,O
Full,O
Value,O
Awards,O
will,O
be,O
counted,O
),O
;,O
,O
(,O
iii,O
),O
The,O
grant,O
or,O
exercise,O
price,O
with,O
respect,O
to,O
any,O
Award,O
.,O
,O
(,O
b,O
),O
Subject,O
to,O
Sections,O
12.3,O
(,O
c,O
),O
and,O
12.3,O
(,O
e,O
),O
",",O
in,O
the,O
event,O
of,O
any,O
transaction,O
or,O
event,O
described,O
in,O
Section,O
12.3,O
(,O
a,O
),O
or,O
any,O
unusual,O
or,O
nonrecurring,O
transactions,O
or,O
events,O
affecting,O
the,O
Company,O
",",O
any,O
affiliate,O
of,O
the,O
Company,O
",",O
or,O
the,O
financial,O
statements,O
of,O
the,O
Company,O
or,O
any,O
affiliate,O
",",O
or,O
of,O
changes,O
in,O
applicable,O
laws,O
",",O
regulations,O
or,O
accounting,O
principles,O
",",O
the,O
Administrator,O
",",O
in,O
its,O
sole,O
and,O
absolute,O
discretion,O
",",O
and,O
on,O
such,O
terms,O
and,O
conditions,O
as,O
it,O
deems,O
appropriate,O
",",O
either,O
by,O
the,O
terms,O
of,O
the,O
Award,O
or,O
by,O
action,O
taken,O
prior,O
to,O
the,O
occurrence,O
of,O
such,O
transaction,O
or,O
event,O
and,O
either,O
automatically,O
or,O
upon,O
the,O
Holder,O
s,O
request,O
",",O
is,O
hereby,O
authorized,O
to,O
take,O
any,O
one,O
or,O
more,O
of,O
the,O
following,O
actions,O
whenever,O
the,O
Administrator,O
determines,O
that,O
such,O
action,O
is,O
appropriate,O
in,O
order,O
to,O
prevent,O
dilution,O
or,O
enlargement,O
of,O
the,O
benefits,O
or,O
potential,O
benefits,O
intended,O
to,O
be,O
made,O
available,O
under,O
the,O
Plan,O
or,O
with,O
respect,O
to,O
any,O
Award,O
under,O
the,O
Plan,O
",",O
to,O
facilitate,O
such,O
transactions,O
or,O
events,O
or,O
to,O
give,O
effect,O
to,O
such,O
changes,O
in,O
laws,O
",",O
regulations,O
or,O
principles,O
:,O
,O
(,O
i,O
),O
To,O
provide,O
for,O
either,O
the,O
purchase,O
of,O
any,O
such,O
Award,O
for,O
an,O
amount,O
of,O
cash,O
equal,O
to,O
the,O
amount,O
that,O
could,O
have,O
been,O
attained,O
upon,O
the,O
exercise,O
of,O
such,O
Award,O
or,O
realization,O
of,O
the,O
Holder,O
s,O
rights,O
had,O
such,O
Award,O
been,O
currently,O
exercisable,O
or,O
payable,O
or,O
fully,O
vested,O
or,O
the,O
replacement,O
of,O
such,O
Award,O
with,O
other,O
rights,O
or,O
property,O
selected,O
by,O
the,O
Administrator,O
in,O
its,O
sole,O
discretion,O
;,O
,O
(,O
ii,O
),O
To,O
provide,O
that,O
the,O
Award,O
can,O
not,O
vest,O
",",O
be,O
exercised,O
or,O
become,O
payable,O
after,O
such,O
event,O
;,O
,O
(,O
iii,O
),O
To,O
provide,O
that,O
such,O
Award,O
shall,O
be,O
exercisable,O
as,O
to,O
all,O
shares,O
covered,O
thereby,O
",",O
notwithstanding,O
anything,O
to,O
the,O
contrary,O
in,O
Section,O
5.3,O
or,O
the,O
provisions,O
of,O
such,O
Award,O
;,O
,O
(,O
v,O
),O
To,O
make,O
adjustments,O
in,O
the,O
number,O
and,O
type,O
of,O
shares,O
of,O
Common,O
Stock,O
(,O
or,O
other,O
securities,O
or,O
property,O
),O
subject,O
to,O
outstanding,O
Awards,O
",",O
and/or,O
in,O
the,O
terms,O
and,O
conditions,O
of,O
(,O
including,O
the,O
grant,O
",",O
exercise,O
or,O
purchase,O
price,O
),O
",",O
and,O
the,O
criteria,O
included,O
in,O
",",O
outstanding,O
options,O
",",O
rights,O
and,O
awards,O
and,O
options,O
",",O
rights,O
and,O
awards,O
which,O
may,O
be,O
granted,O
in,O
the,O
future,O
.,O
,O
(,O
vi,O
),O
To,O
provide,O
that,O
",",O
for,O
a,O
specified,O
period,O
of,O
time,O
prior,O
to,O
such,O
event,O
",",O
the,O
restrictions,O
imposed,O
under,O
an,O
Award,O
Agreement,O
upon,O
some,O
or,O
all,O
shares,O
of,O
Restricted,O
Stock,O
",",O
Restricted,O
Stock,O
Units,O
or,O
Deferred,O
Stock,O
may,O
be,O
terminated,O
",",O
and,O
",",O
in,O
the,O
case,O
of,O
Restricted,O
Stock,O
",",O
some,O
or,O
all,O
shares,O
of,O
such,O
Restricted,O
Stock,O
may,O
cease,O
to,O
be,O
subject,O
to,O
repurchase,O
under,O
Section,O
7.5,O
or,O
forfeiture,O
under,O
Section,O
7.4,O
after,O
such,O
event,O
.,O
,O
(,O
c,O
),O
Notwithstanding,O
any,O
other,O
provision,O
of,O
the,O
Plan,O
",",O
in,O
the,O
event,O
of,O
a,O
Change,O
in,O
Control,O
",",O
each,O
outstanding,O
Award,O
shall,O
remain,O
outstanding,O
",",O
or,O
shall,O
be,O
assumed,O
or,O
an,O
equivalent,O
award,O
substituted,O
by,O
the,O
successor,O
corporation,O
",",O
or,O
a,O
parent,O
or,O
subsidiary,O
of,O
the,O
successor,O
corporation,O
.,O
,O
In,O
the,O
event,O
that,O
the,O
successor,O
corporation,O
",",O
or,O
a,O
parent,O
or,O
subsidiary,O
of,O
the,O
successor,O
corporation,O
",",O
with,O
respect,O
to,O
the,O
Change,O
in,O
Control,O
transaction,O
refuses,O
to,O
assume,O
or,O
substitute,O
for,O
the,O
Award,O
",",O
the,O
Holder,O
shall,O
have,O
the,O
right,O
to,O
exercise,O
the,O
Award,O
as,O
to,O
all,O
of,O
the,O
shares,O
subject,O
thereto,O
",",O
including,O
shares,O
as,O
to,O
which,O
such,O
Award,O
otherwise,O
would,O
not,O
be,O
exercisable,O
",",O
and,O
the,O
Holder,O
shall,O
have,O
the,O
right,O
to,O
vest,O
in,O
",",O
and,O
received,O
a,O
distribution,O
of,O
",",O
such,O
Award,O
",",O
with,O
respect,O
to,O
all,O
of,O
the,O
shares,O
subject,O
thereto,O
.,O
,O
If,O
an,O
Award,O
becomes,O
exercisable,O
in,O
lieu,O
of,O
assumption,O
or,O
substitution,O
by,O
the,O
successor,O
corporation,O
",",O
or,O
a,O
parent,O
or,O
subsidiary,O
corporation,O
",",O
with,O
respect,O
to,O
a,O
Change,O
in,O
Control,O
transaction,O
",",O
the,O
Administrator,O
shall,O
notify,O
the,O
Holder,O
that,O
the,O
Award,O
shall,O
be,O
fully,O
exercisable,O
for,O
a,O
period,O
of,O
not,O
less,O
than,O
fifteen,O
(,O
15,O
),O
days,O
from,O
the,O
date,O
of,O
such,O
notice,O
prior,O
to,O
the,O
Change,O
in,O
Control,O
transaction,O
",",O
and,O
the,O
Award,O
shall,O
terminate,O
upon,O
the,O
expiration,O
of,O
such,O
period,O
.,O
,O
For,O
purposes,O
of,O
this,O
Section,O
12.3,O
(,O
c,O
),O
",",O
the,O
Award,O
shall,O
be,O
assumed,O
",",O
or,O
an,O
equivalent,O
award,O
shall,O
be,O
substituted,O
for,O
such,O
Award,O
",",O
if,O
",",O
following,O
the,O
Change,O
in,O
Control,O
transaction,O
",",O
the,O
Award,O
or,O
substituted,O
award,O
confers,O
on,O
the,O
Holder,O
the,O
right,O
to,O
purchase,O
or,O
receive,O
",",O
for,O
each,O
share,O
subject,O
to,O
the,O
Award,O
immediately,O
prior,O
to,O
the,O
Change,O
in,O
Control,O
transaction,O
",",O
the,O
consideration,O
(,O
whether,O
in,O
stock,O
",",O
cash,O
",",O
or,O
other,O
securities,O
or,O
property,O
",",O
or,O
a,O
combination,O
thereof,O
),O
received,O
or,O
to,O
be,O
received,O
for,O
each,O
share,O
of,O
Common,O
Stock,O
in,O
the,O
Change,O
in,O
Control,O
transaction,O
on,O
the,O
effective,O
date,O
of,O
the,O
Change,O
in,O
Control,O
transaction,O
(,O
and,O
if,O
holders,O
of,O
shares,O
of,O
Common,O
Stock,O
were,O
offered,O
a,O
choice,O
of,O
consideration,O
",",O
the,O
type,O
of,O
consideration,O
chosen,O
by,O
the,O
holders,O
of,O
a,O
majority,O
of,O
the,O
outstanding,O
shares,O
of,O
Common,O
Stock,O
),O
;,O
provided,O
",",O
however,O
",",O
that,O
",",O
if,O
such,O
consideration,O
received,O
in,O
the,O
Change,O
in,O
Control,O
transaction,O
was,O
not,O
solely,O
common,O
stock,O
of,O
the,O
successor,O
corporation,O
or,O
its,O
parent,O
",",O
the,O
Administrator,O
may,O
",",O
with,O
the,O
consent,O
of,O
the,O
successor,O
corporation,O
or,O
its,O
parent,O
",",O
provide,O
for,O
the,O
consideration,O
to,O
be,O
received,O
upon,O
the,O
exercise,O
",",O
vesting,O
or,O
distribution,O
of,O
the,O
assumed,O
Award,O
or,O
substituted,O
award,O
",",O
for,O
each,O
share,O
subject,O
to,O
the,O
Award,O
",",O
to,O
be,O
solely,O
common,O
stock,O
of,O
the,O
successor,O
corporation,O
or,O
its,O
parent,O
equal,O
in,O
fair,O
market,O
value,O
to,O
the,O
per,O
share,O
consideration,O
received,O
by,O
the,O
holders,O
of,O
Common,O
Stock,O
in,O
the,O
Change,O
in,O
Control,O
transaction,O
.,O
,O
(,O
d,O
),O
Subject,O
to,O
Sections,O
12.3,O
(,O
e,O
),O
",",O
3.2,O
and,O
3.3,O
",",O
the,O
Administrator,O
may,O
",",O
in,O
its,O
discretion,O
",",O
include,O
such,O
further,O
provisions,O
and,O
limitations,O
in,O
any,O
Award,O
or,O
Award,O
Agreement,O
as,O
it,O
may,O
deem,O
equitable,O
and,O
in,O
the,O
best,O
interests,O
of,O
the,O
Company,O
.,O
,O
(,O
e,O
),O
With,O
respect,O
to,O
Awards,O
which,O
are,O
granted,O
to,O
Section,O
162,O
(,O
m,O
),O
Participants,O
and,O
are,O
intended,O
to,O
qualify,O
as,O
performance-based,O
compensation,O
under,O
Section,O
162,O
(,O
m,O
),O
(,O
4,O
),O
(,O
C,O
),O
",",O
no,O
adjustment,O
or,O
action,O
described,O
in,O
this,O
Section,O
12.3,O
or,O
in,O
any,O
other,O
provision,O
of,O
the,O
Plan,O
shall,O
be,O
authorized,O
to,O
the,O
extent,O
that,O
such,O
adjustment,O
or,O
action,O
would,O
cause,O
such,O
Award,O
to,O
fail,O
to,O
so,O
qualify,O
under,O
Section,O
162,O
(,O
m,O
),O
(,O
4,O
),O
(,O
C,O
),O
",",O
or,O
any,O
successor,O
provisions,O
thereto,O
",",O
unless,O
the,O
Administrator,O
determines,O
that,O
the,O
Award,O
should,O
not,O
so,O
qualify,O
.,O
,O
No,O
adjustment,O
or,O
action,O
described,O
in,O
this,O
Section,O
12.3,O
or,O
in,O
any,O
other,O
provision,O
of,O
the,O
Plan,O
shall,O
be,O
authorized,O
to,O
the,O
extent,O
that,O
such,O
adjustment,O
or,O
action,O
would,O
cause,O
the,O
Plan,O
to,O
violate,O
Section,O
422,O
(,O
b,O
),O
(,O
1,O
),O
of,O
the,O
Code,O
.,O
,O
Furthermore,O
",",O
no,O
such,O
adjustment,O
or,O
action,O
shall,O
be,O
authorized,O
to,O
the,O
extent,O
such,O
adjustment,O
or,O
action,O
would,O
result,O
in,O
short-swing,O
profits,O
liability,O
under,O
Section,O
16,O
or,O
violate,O
the,O
exemptive,O
conditions,O
of,O
Rule,O
16b-3,O
unless,O
the,O
Administrator,O
determines,O
that,O
the,O
Award,O
is,O
not,O
to,O
comply,O
with,O
such,O
exemptive,O
conditions,O
.,O
,O
The,O
number,O
of,O
shares,O
of,O
Common,O
Stock,O
subject,O
to,O
any,O
Award,O
shall,O
always,O
be,O
rounded,O
to,O
the,O
next,O
whole,O
number,O
.,O
,O
(,O
f,O
),O
The,O
existence,O
of,O
the,O
Plan,O
",",O
the,O
Award,O
Agreement,O
and,O
the,O
Awards,O
granted,O
hereunder,O
shall,O
not,O
affect,O
or,O
restrict,O
in,O
any,O
way,O
the,O
right,O
or,O
power,O
of,O
the,O
Company,O
or,O
the,O
shareholders,O
of,O
the,O
Company,O
to,O
make,O
or,O
authorize,O
any,O
adjustment,O
",",O
recapitalization,O
",",O
reorganization,O
or,O
other,O
change,O
in,O
the,O
Company,O
s,O
capital,O
structure,O
or,O
its,O
business,O
",",O
any,O
merger,O
or,O
consolidation,O
of,O
the,O
Company,O
",",O
any,O
issue,O
of,O
stock,O
or,O
of,O
options,O
",",O
warrants,O
or,O
rights,O
to,O
purchase,O
stock,O
or,O
of,O
bonds,O
",",O
debentures,O
",",O
preferred,O
or,O
prior,O
preference,O
stocks,O
whose,O
rights,O
are,O
superior,O
to,O
or,O
affect,O
the,O
Common,O
Stock,O
or,O
the,O
rights,O
thereof,O
or,O
which,O
are,O
convertible,O
into,O
or,O
exchangeable,O
for,O
Common,O
Stock,O
",",O
or,O
the,O
dissolution,O
or,O
liquidation,O
of,O
the,O
company,O
",",O
or,O
any,O
sale,O
or,O
transfer,O
of,O
all,O
or,O
any,O
part,O
of,O
its,O
assets,O
or,O
business,O
",",O
or,O
any,O
other,O
corporate,O
act,O
or,O
proceeding,O
",",O
whether,O
of,O
a,O
similar,O
character,O
or,O
otherwise,O
.,O
,O
(,O
h,O
),O
No,O
action,O
shall,O
be,O
taken,O
under,O
this,O
Section,O
12.3,O
which,O
shall,O
cause,O
an,O
Award,O
to,O
fail,O
to,O
comply,O
with,O
Section,O
409A,O
of,O
the,O
Code,O
or,O
the,O
Treasury,I-LEGISLATION/ACT
Regulations,I-LEGISLATION/ACT
thereunder,O
",",O
to,O
the,O
extent,O
applicable,O
to,O
such,O
Award,O
.,O
,O
Approval,O
of,O
Plan,O
by,O
Stockholders,O
.,O
,O
The,O
Plan,O
will,O
be,O
submitted,O
for,O
the,O
approval,O
of,O
the,O
Company,O
s,O
stockholders,O
within,O
twelve,O
(,O
12,O
),O
months,O
after,O
the,O
date,O
of,O
the,O
Board,O
s,O
initial,O
adoption,O
of,O
the,O
Plan,O
.,O
,O
Awards,O
may,O
be,O
granted,O
or,O
awarded,O
prior,O
to,O
such,O
stockholder,O
approval,O
",",O
provided,O
",",O
that,O
such,O
Awards,O
shall,O
not,O
be,O
exercisable,O
nor,O
shall,O
such,O
Awards,O
vest,O
prior,O
to,O
the,O
time,O
when,O
the,O
Plan,O
is,O
approved,O
by,O
the,O
stockholders,O
",",O
and,O
provided,O
further,O
",",O
that,O
if,O
such,O
approval,O
has,O
not,O
been,O
obtained,O
at,O
the,O
end,O
of,O
said,O
twelve-month,O
period,O
",",O
all,O
Awards,O
previously,O
granted,O
or,O
awarded,O
under,O
the,O
Plan,O
shall,O
thereupon,O
be,O
canceled,O
and,O
become,O
,O
and,O
void,O
.,O
,O
In,O
addition,O
",",O
if,O
the,O
Board,O
determines,O
that,O
Awards,O
other,O
than,O
Options,O
or,O
Stock,O
Appreciation,O
Rights,O
which,O
may,O
be,O
granted,O
to,O
Section,O
162,O
(,O
m,O
),O
Participants,O
should,O
continue,O
to,O
be,O
eligible,O
to,O
qualify,O
as,O
performance-based,O
compensation,O
under,O
Section,O
162,O
(,O
m,O
),O
(,O
4,O
),O
(,O
C,O
),O
of,O
the,O
Code,O
",",O
the,O
Performance,O
Criteria,O
must,O
be,O
disclosed,O
to,O
and,O
approved,O
by,O
the,O
Company,O
s,O
stockholders,O
no,O
later,O
than,O
the,O
first,O
stockholder,O
meeting,O
that,O
occurs,O
in,O
the,O
fifth,O
year,O
following,O
the,O
year,O
in,O
which,O
the,O
Company,O
s,O
stockholders,O
previously,O
approved,O
the,O
Plan,O
",",O
as,O
amended,O
and,O
restated,O
to,O
include,O
the,O
Performance,O
Criteria,O
.,O
,O
The,O
Company,O
shall,O
be,O
entitled,O
to,O
require,O
payment,O
in,O
cash,O
or,O
deduction,O
from,O
other,O
compensation,O
payable,O
to,O
each,O
Holder,O
of,O
any,O
sums,O
required,O
by,O
federal,O
",",O
state,O
or,O
local,O
tax,O
law,O
to,O
be,O
withheld,O
with,O
respect,O
to,O
the,O
grant,O
",",O
issuance,O
",",O
vesting,O
",",O
exercise,O
or,O
payment,O
of,O
any,O
Award,O
.,O
,O
The,O
Administrator,O
may,O
in,O
its,O
discretion,O
and,O
in,O
satisfaction,O
of,O
the,O
foregoing,O
requirement,O
allow,O
such,O
Holder,O
to,O
elect,O
to,O
have,O
the,O
Company,O
withhold,O
shares,O
of,O
Common,O
Stock,O
otherwise,O
issuable,O
under,O
such,O
Award,O
(,O
or,O
allow,O
the,O
return,O
of,O
shares,O
of,O
Common,O
Stock,O
),O
having,O
a,O
Fair,O
Market,O
Value,O
equal,O
to,O
the,O
sums,O
required,O
to,O
be,O
withheld,O
.,O
,O
Notwithstanding,O
any,O
other,O
provision,O
of,O
the,O
Plan,O
",",O
the,O
number,O
of,O
shares,O
of,O
Common,O
Stock,O
which,O
may,O
be,O
withheld,O
with,O
respect,O
to,O
the,O
issuance,O
",",O
vesting,O
",",O
exercise,O
or,O
payment,O
of,O
any,O
Award,O
(,O
or,O
which,O
may,O
be,O
repurchased,O
from,O
the,O
Holder,O
of,O
such,O
Award,O
within,O
six,O
months,O
after,O
such,O
shares,O
of,O
Common,O
Stock,O
were,O
acquired,O
by,O
the,O
Holder,O
from,O
the,O
Company,O
),O
in,O
order,O
to,O
satisfy,O
the,O
Holder,O
s,O
federal,O
and,O
state,O
income,O
and,O
payroll,O
tax,O
liabilities,O
with,O
respect,O
to,O
the,O
issuance,O
",",O
vesting,O
",",O
exercise,O
or,O
payment,O
of,O
the,O
Award,O
shall,O
be,O
limited,O
to,O
the,O
number,O
of,O
shares,O
which,O
have,O
a,O
Fair,O
Market,O
Value,O
on,O
the,O
date,O
of,O
withholding,O
or,O
repurchase,O
equal,O
to,O
the,O
aggregate,O
amount,O
of,O
such,O
liabilities,O
based,O
on,O
the,O
minimum,O
statutory,O
withholding,O
rates,O
for,O
federal,O
and,O
state,O
tax,O
income,O
and,O
payroll,O
tax,O
purposes,O
that,O
are,O
applicable,O
to,O
such,O
supplemental,O
taxable,O
income,O
.,O
,O
Prohibition,O
on,O
Repricing,O
.,O
,O
Subject,O
to,O
Section,O
12.3,O
",",O
the,O
Administrator,O
shall,O
not,O
",",O
without,O
the,O
approval,O
of,O
the,O
stockholders,O
of,O
the,O
Company,O
",",O
(,O
i,O
),O
authorize,O
the,O
amendment,O
of,O
any,O
outstanding,O
Option,O
or,O
Stock,O
Appreciation,O
Right,O
to,O
reduce,O
its,O
price,O
per,O
share,O
",",O
or,O
(,O
ii,O
),O
cancel,O
any,O
Option,O
or,O
Stock,O
Appreciation,O
Right,O
in,O
exchange,O
for,O
cash,O
or,O
another,O
Award,O
.,O
,O
Subject,O
to,O
Section,O
14.2,O
",",O
the,O
Administrator,O
shall,O
have,O
the,O
authority,O
",",O
without,O
the,O
approval,O
of,O
the,O
stockholders,O
of,O
the,O
Company,O
",",O
to,O
amend,O
any,O
outstanding,O
Award,O
to,O
increase,O
the,O
price,O
per,O
share,O
or,O
to,O
cancel,O
and,O
replace,O
an,O
Award,O
with,O
the,O
grant,O
of,O
an,O
Award,O
having,O
a,O
price,O
per,O
share,O
that,O
is,O
greater,O
than,O
or,O
equal,O
to,O
the,O
price,O
per,O
share,O
of,O
the,O
original,O
Award,O
.,O
,O
Pursuant,O
to,O
its,O
general,O
authority,O
to,O
determine,O
the,O
terms,O
and,O
conditions,O
applicable,O
to,O
Awards,O
and,O
the,O
Award,O
Agreements,O
under,O
the,O
Plan,O
",",O
the,O
Administrator,O
shall,O
have,O
the,O
right,O
to,O
provide,O
",",O
in,O
the,O
terms,O
of,O
Awards,O
made,O
under,O
the,O
Plan,O
",",O
or,O
to,O
require,O
a,O
Holder,O
to,O
agree,O
by,O
separate,O
written,O
instrument,O
",",O
that,O
:,O
(,O
a,O
),O
(,O
i,O
),O
any,O
proceeds,O
",",O
gains,O
or,O
other,O
economic,O
benefit,O
actually,O
or,O
constructively,O
received,O
by,O
the,O
Holder,O
upon,O
any,O
receipt,O
or,O
exercise,O
of,O
the,O
Award,O
",",O
or,O
upon,O
the,O
receipt,O
or,O
resale,O
of,O
any,O
Common,O
Stock,O
underlying,O
the,O
Award,O
",",O
must,O
be,O
paid,O
to,O
the,O
Company,O
",",O
and,O
(,O
ii,O
),O
the,O
Award,O
shall,O
terminate,O
and,O
any,O
unexercised,O
portion,O
of,O
the,O
Award,O
(,O
whether,O
or,O
not,O
vested,O
),O
shall,O
be,O
forfeited,O
",",O
if,O
(,O
b,O
),O
(,O
i,O
),O
a,O
Termination,O
of,O
Employment,O
",",O
Termination,O
of,O
Directorship,O
or,O
Termination,O
of,O
Consultancy,O
occurs,O
prior,O
to,O
a,O
specified,O
date,O
",",O
or,O
within,O
a,O
specified,O
time,O
period,O
following,O
receipt,O
or,O
exercise,O
of,O
the,O
Award,O
",",O
or,O
(,O
ii,O
),O
the,O
Holder,O
at,O
any,O
time,O
",",O
or,O
during,O
a,O
specified,O
time,O
period,O
",",O
engages,O
in,O
any,O
activity,O
in,O
competition,O
with,O
the,O
Company,O
",",O
or,O
which,O
is,O
inimical,O
",",O
contrary,O
or,O
harmful,O
to,O
the,O
interests,O
of,O
the,O
Company,O
",",O
as,O
further,O
defined,O
by,O
the,O
Administrator,O
or,O
(,O
iii,O
),O
the,O
Holder,O
incurs,O
a,O
Termination,O
of,O
Employment,O
",",O
Termination,O
of,O
Directorship,O
or,O
Termination,O
of,O
Consultancy,O
for,O
cause,O
(,O
as,O
such,O
term,O
is,O
defined,O
in,O
the,O
sole,O
and,O
absolute,O
discretion,O
of,O
the,O
Committee,O
",",O
or,O
as,O
set,O
forth,O
in,O
a,O
written,O
agreement,O
relating,O
to,O
such,O
Award,O
between,O
the,O
Company,O
and,O
the,O
Holder,O
),O
.,O
,O
Effect,O
of,O
Plan,O
upon,O
Options,O
and,O
Compensation,O
Plans,O
.,O
,O
The,O
adoption,O
of,O
the,O
Plan,O
shall,O
not,O
affect,O
any,O
other,O
compensation,O
or,O
incentive,O
plans,O
in,O
effect,O
for,O
the,O
Company,O
or,O
any,O
Subsidiary,O
.,O
,O
rights,O
or,O
awards,O
otherwise,O
than,O
under,O
the,O
Plan,O
in,O
connection,O
with,O
any,O
proper,O
corporate,O
purpose,O
including,O
but,O
not,O
by,O
way,O
of,O
limitation,O
",",O
the,O
grant,O
or,O
assumption,O
of,O
options,O
in,O
connection,O
with,O
the,O
acquisition,O
by,O
purchase,O
",",O
lease,O
",",O
merger,O
",",O
consolidation,O
or,O
otherwise,O
",",O
of,O
the,O
business,O
",",O
stock,O
or,O
assets,O
of,O
any,O
corporation,O
",",O
partnership,O
",",O
limited,O
liability,O
company,O
",",O
firm,O
or,O
association,O
.,O
,O
Compliance,O
with,O
Laws,O
.,O
,O
The,O
Plan,O
",",O
the,O
granting,O
and,O
vesting,O
of,O
Awards,O
under,O
the,O
Plan,O
and,O
the,O
issuance,O
and,O
delivery,O
of,O
shares,O
of,O
Common,O
Stock,O
and,O
the,O
payment,O
of,O
money,O
under,O
the,O
Plan,O
or,O
under,O
Awards,O
granted,O
or,O
awarded,O
hereunder,O
are,O
subject,O
to,O
compliance,O
with,O
all,O
applicable,O
federal,O
and,O
state,O
laws,O
",",O
rules,O
and,O
regulations,O
(,O
including,O
but,O
not,O
limited,O
to,O
state,O
and,O
federal,O
securities,O
law,O
and,O
federal,O
margin,O
requirements,O
),O
and,O
to,O
such,O
approvals,O
by,O
any,O
listing,O
",",O
regulatory,O
or,O
governmental,O
authority,O
as,O
may,O
",",O
in,O
the,O
opinion,O
of,O
counsel,O
for,O
the,O
Company,O
",",O
be,O
necessary,O
or,O
advisable,O
in,O
connection,O
therewith,O
.,O
,O
Any,O
securities,O
delivered,O
under,O
the,O
Plan,O
shall,O
be,O
subject,O
to,O
such,O
restrictions,O
",",O
and,O
the,O
person,O
acquiring,O
such,O
securities,O
shall,O
",",O
if,O
requested,O
by,O
the,O
Company,O
",",O
provide,O
such,O
assurances,O
and,O
representations,O
to,O
the,O
Company,O
as,O
the,O
Company,O
may,O
deem,O
necessary,O
or,O
desirable,O
to,O
assure,O
compliance,O
with,O
all,O
applicable,O
legal,O
requirements,O
.,O
,O
To,O
the,O
extent,O
permitted,O
by,O
applicable,O
law,O
",",O
the,O
Plan,O
and,O
Awards,O
granted,O
or,O
awarded,O
hereunder,O
shall,O
be,O
deemed,O
amended,O
to,O
the,O
extent,O
necessary,O
to,O
conform,O
to,O
such,O
laws,O
",",O
rules,O
and,O
regulations,O
.,O
,O
Titles,O
are,O
provided,O
herein,O
for,O
convenience,O
only,O
and,O
are,O
not,O
to,O
serve,O
as,O
a,O
basis,O
for,O
interpretation,O
or,O
construction,O
of,O
the,O
Plan,O
.,O
,O
The,O
Plan,O
and,O
any,O
agreements,O
hereunder,O
shall,O
be,O
administered,O
",",O
interpreted,O
and,O
enforced,O
under,O
the,O
internal,O
laws,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
California,I-LOCATION
without,O
regard,O
to,O
conflicts,O
of,O
laws,O
thereof,O
.,O
,O
I,O
hereby,O
certify,O
that,O
the,O
foregoing,O
amendment,O
and,O
restatement,O
of,O
the,O
Plan,O
was,O
duly,O
adopted,O
by,O
the,O
Board,O
of,O
Directors,O
of,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
on,O
March,O
2,O
",",O
2011,O
.,O
,O
Executed,O
on,O
this,O
2nd,O
day,O
of,O
March,O
",",O
2011,O
.,O
,O
I,O
hereby,O
certify,O
that,O
the,O
Plan,O
asam,O
ended,O
and,O
restated,O
hereby,O
was,O
approved,O
by,O
the,O
stockholders,O
of,O
Watson,I-BUSINESS
Pharmaceuticals,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
on,O
",",O
2011,O
.,O
,O
Executed,O
on,O
this,O
day,O
of,O
",",O
2011,O
.,O
,O
WATSON,I-BUSINESS
PHARMACEUTICALS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
.,O
,O
VOTE,O
BY,O
INTERNET,I-MISCELLANEOUS
-,O
www.proxyvote.com,O
Use,O
the,O
Internet,I-MISCELLANEOUS
to,O
transmit,O
your,O
voting,O
instructions,O
and,O
for,O
electronic,O
delivery,O
of,O
information,O
up,O
until,O
11:59,O
P.M.,O
Eastern,I-MISCELLANEOUS
Time,I-MISCELLANEOUS
the,O
day,O
before,O
the,O
cut-off,O
date,O
or,O
meeting,O
date,O
.,O
,O
Have,O
your,O
proxy,O
card,O
in,O
hand,O
when,O
you,O
access,O
the,O
web,O
site,O
and,O
follow,O
the,O
instructions,O
to,O
obtain,O
your,O
records,O
and,O
to,O
create,O
an,O
electronic,O
voting,O
instruction,O
form,O
.,O
,O
ELECTRONIC,O
DELIVERY,O
OF,O
FUTURE,O
PROXY,O
MATERIALS,O
If,O
you,O
would,O
like,O
to,O
reduce,O
the,O
costs,O
incurred,O
by,O
our,O
company,O
in,O
mailing,O
proxy,O
materials,O
",",O
you,O
can,O
consent,O
to,O
receiving,O
all,O
future,O
proxy,O
statements,O
",",O
proxy,O
cards,O
and,O
annual,O
reports,O
electronically,O
via,O
e-mail,O
or,O
the,O
Internet,I-MISCELLANEOUS
.,O
,O
To,O
sign,O
up,O
for,O
electronic,O
delivery,O
",",O
please,O
follow,O
the,O
instructions,O
above,O
to,O
vote,O
using,O
the,O
Internet,I-MISCELLANEOUS
and,O
",",O
when,O
prompted,O
",",O
indicate,O
that,O
you,O
agree,O
to,O
receive,O
or,O
access,O
proxy,O
materials,O
electronically,O
in,O
future,O
years,O
.,O
,O
VOTE,O
BY,O
PHONE,O
-,O
1-800-690-6903,O
Use,O
any,O
touch-tone,O
telephone,O
to,O
transmit,O
your,O
voting,O
instructions,O
up,O
until,O
11:59,O
P.M.,O
Eastern,I-MISCELLANEOUS
Time,I-MISCELLANEOUS
the,O
day,O
before,O
the,O
cut-off,O
date,O
or,O
meeting,O
date,O
.,O
,O
Have,O
your,O
proxy,O
card,O
in,O
hand,O
when,O
you,O
call,O
and,O
then,O
follow,O
the,O
instructions,O
.,O
,O
VOTE,O
BY,O
MAIL,O
Mark,O
",",O
sign,O
and,O
date,O
your,O
proxy,O
card,O
and,O
return,O
it,O
in,O
the,O
postage-paid,O
envelope,O
we,O
have,O
provided,O
or,O
return,O
it,O
to,O
Vote,O
Processing,O
",",O
c/o,O
Broadridge,I-BUSINESS
",",O
51,O
Mercedes,I-LOCATION
Way,I-LOCATION
",",O
Edgewood,I-LOCATION
",",O
NY,I-LOCATION
11717,O
.,O
,O
WATSON,I-BUSINESS
PHARMACEUTICALS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
Please,O
sign,O
exactly,O
as,O
your,O
name,O
(,O
s,O
),O
appear,O
(,O
s,O
),O
hereon,O
.,O
,O
When,O
signing,O
as,O
attorney,O
",",O
executor,O
",",O
administrator,O
",",O
or,O
other,O
fiduciary,O
",",O
please,O
give,O
full,O
title,O
as,O
such,O
.,O
,O
Joint,O
owners,O
should,O
each,O
sign,O
personally,O
.,O
,O
All,O
holders,O
must,O
sign,O
.,O
,O
If,O
a,O
corporation,O
or,O
partnership,O
",",O
please,O
sign,O
in,O
full,O
corporate,O
or,O
partnership,O
name,O
",",O
by,O
authorized,O
officer,O
.,O
,O
The,O
undersigned,O
hereby,O
appoints,O
Paul,I-PERSON
M.,I-PERSON
Bisaro,I-PERSON
and,O
David,I-PERSON
A.,I-PERSON
Buchen,I-PERSON
",",O
or,O
either,O
of,O
them,O
",",O
as,O
proxies,O
with,O
full,O
power,O
of,O
substitution,O
",",O
and,O
authorizes,O
them,O
to,O
represent,O
and,O
to,O
vote,O
on,O
behalf,O
of,O
the,O
undersigned,O
all,O
shares,O
which,O
the,O
undersigned,O
would,O
be,O
entitled,O
to,O
vote,O
if,O
personally,O
present,O
at,O
the,O
2011,O
Annual,O
Meeting,O
of,O
Stockholders,O
of,O
WATSON,I-BUSINESS
PHARMACEUTICALS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
to,O
be,O
held,O
on,O
May,O
13,O
",",O
2011,O
",",O
and,O
any,O
adjournments,O
or,O
postponements,O
thereof,O
",",O
with,O
respect,O
to,O
the,O
following,O
as,O
designated,O
on,O
the,O
reverse,O
side,O
.,O
,O
WATSON,I-BUSINESS
PHARMACEUTICALS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
WATSON,I-BUSINESS
PHARMACEUTICALS,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
You,O
are,O
receiving,O
this,O
communication,O
because,O
you,O
hold,O
shares,O
in,O
the,O
above,O
named,O
company,O
.,O
,O
This,O
is,O
not,O
a,O
ballot,O
.,O
,O
You,O
can,O
not,O
use,O
this,O
notice,O
to,O
vote,O
these,O
shares,O
.,O
,O
This,O
communication,O
presents,O
only,O
an,O
overview,O
of,O
the,O
more,O
complete,O
proxy,O
materials,O
that,O
are,O
available,O
to,O
you,O
on,O
the,O
Internet,I-MISCELLANEOUS
.,O
,O
You,O
may,O
view,O
the,O
proxy,O
materials,O
online,O
at,O
www.proxyvote.com,O
or,O
easily,O
request,O
a,O
paper,O
copy,O
(,O
see,O
reverse,O
side,O
),O
.,O
,O
We,O
encourage,O
you,O
to,O
access,O
and,O
review,O
all,O
of,O
the,O
important,O
information,O
contained,O
in,O
the,O
proxy,O
materials,O
before,O
voting,O
.,O
,O
See,O
the,O
reverse,O
side,O
of,O
this,O
notice,O
to,O
obtain,O
proxy,O
materials,O
and,O
voting,O
instructions,O
.,O
,O
How,O
to,O
View,O
Online,O
:,O
,O
Have,O
the,O
information,O
that,O
is,O
printed,O
in,O
the,O
box,O
marked,O
by,O
the,O
arrow,O
è,O
XXXX,O
XXXX,O
XXXX,O
(,O
located,O
on,O
the,O
following,O
page,O
),O
and,O
visit,O
:,O
www.proxyvote.com,O
.,O
,O
How,O
to,O
Request,O
and,O
Receive,O
a,O
PAPER,O
or,O
E-MAIL,O
Copy,O
:,O
,O
If,O
you,O
want,O
to,O
receive,O
a,O
paper,O
or,O
e-mail,O
copy,O
of,O
these,O
documents,O
",",O
you,O
must,O
request,O
one,O
.,O
,O
There,O
is,O
NO,O
charge,O
for,O
requesting,O
a,O
copy,O
.,O
,O
Please,O
choose,O
one,O
of,O
the,O
following,O
methods,O
to,O
make,O
your,O
request,O
:,O
,O
*,O
If,O
requesting,O
materials,O
by,O
e-mail,O
",",O
please,O
send,O
a,O
blank,O
e-mail,O
with,O
the,O
information,O
that,O
is,O
printed,O
in,O
the,O
box,O
marked,O
by,O
the,O
arrow,O
è,O
XXXX,O
XXXX,O
XXXX,O
(,O
located,O
on,O
the,O
following,O
page,O
),O
in,O
the,O
subject,O
line,O
.,O
,O
Requests,O
",",O
instructions,O
and,O
other,O
inquiries,O
sent,O
to,O
this,O
e-mail,O
address,O
will,O
NOT,O
be,O
forwarded,O
to,O
your,O
investment,O
advisor,O
.,O
,O
Please,O
make,O
the,O
request,O
as,O
instructed,O
above,O
on,O
or,O
before,O
April,O
29,O
",",O
2011,O
to,O
facilitate,O
timely,O
delivery,O
.,O
,O
Vote,O
In,O
Person,O
:,O
Many,O
shareholder,O
meetings,O
have,O
attendance,O
requirements,O
including,O
",",O
but,O
not,O
limited,O
to,O
",",O
the,O
possession,O
of,O
an,O
attendance,O
ticket,O
issued,O
by,O
the,O
entity,O
holding,O
the,O
meeting,O
.,O
,O
Please,O
check,O
the,O
meeting,O
materials,O
for,O
any,O
special,O
requirements,O
for,O
meeting,O
attendance,O
.,O
,O
At,O
the,O
meeting,O
",",O
you,O
will,O
need,O
to,O
request,O
a,O
ballot,O
to,O
vote,O
these,O
shares,O
.,O
,O
Vote,O
By,O
Internet,I-MISCELLANEOUS
:,O
To,O
vote,O
now,O
by,O
Internet,I-MISCELLANEOUS
",",O
go,O
to,O
www.proxyvote.com,O
.,O
,O
Have,O
the,O
information,O
that,O
is,O
printed,O
in,O
the,O
box,O
marked,O
by,O
the,O
arrow,O
è,O
XXXX,O
XXXX,O
XXXX,O
available,O
and,O
follow,O
the,O
instructions,O
.,O
,O
Vote,O
By,O
Mail,O
:,O
You,O
can,O
vote,O
by,O
mail,O
by,O
requesting,O
a,O
paper,O
copy,O
of,O
the,O
materials,O
",",O
which,O
will,O
include,O
a,O
proxy,O
card,O
.,O
,O
The,O
Board,O
of,O
Directors,O
recommends,O
you,O
vote,O
FOR,O
the,O
following,O
proposals,O
:,O
,O
The,O
Board,O
of,O
Directors,O
recommends,O
you,O
vote,O
1,O
year,O
on,O
the,O
following,O
proposal,O
:,O
,O
The,O
Board,O
of,O
Directors,O
recommends,O
you,O
vote,O
FOR,O
the,O
following,O
proposal,O
:,O
,O
NOTE,O
:,O
Such,O
other,O
business,O
as,O
may,O
properly,O
come,O
before,O
the,O
meeting,O
or,O
any,O
adjournment,O
thereof,O
will,O
also,O
be,O
transacted,O
.,O
,O
-DOCSTART-,O
,O
Filed,O
by,O
the,O
Registrant,O
x,O
Filed,O
by,O
a,O
Party,O
other,O
than,O
the,O
Registrant,O
Check,O
the,O
appropriate,O
box,O
:,O
,O
Confidential,O
",",O
for,O
Use,O
of,O
the,O
Commission,O
Only,O
(,O
as,O
permitted,O
by,O
Rule,O
14a-6,O
(,O
e,O
),O
(,O
2,O
),O
),O
,O
(,O
Name,O
of,O
Registrant,O
as,O
Specified,O
In,O
Its,O
Charter,O
),O
,O
(,O
Name,O
of,O
Person,O
(,O
s,O
),O
Filing,O
Proxy,O
Statement,O
",",O
if,O
other,O
than,O
the,O
Registrant,O
),O
,O
Payment,O
of,O
Filing,O
Fee,O
(,O
Check,O
the,O
appropriate,O
box,O
),O
:,O
,O
Fee,O
computed,O
on,O
table,O
below,O
per,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
Rules,O
14a-6,O
(,O
i,O
),O
(,O
4,O
),O
and,O
0-11,O
.,O
,O
Title,O
of,O
each,O
class,O
of,O
securities,O
to,O
which,O
transaction,O
applies,O
:,O
,O
Aggregate,O
number,O
of,O
securities,O
to,O
which,O
transaction,O
applies,O
:,O
,O
Per,O
unit,O
price,O
or,O
other,O
underlying,O
value,O
of,O
transaction,O
computed,O
pursuant,O
to,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
Rule,O
0-11,O
(,O
Set,O
forth,O
the,O
amount,O
on,O
which,O
the,O
filing,O
fee,O
is,O
calculated,O
and,O
state,O
how,O
it,O
was,O
determined,O
),O
:,O
,O
Proposed,O
maximum,O
aggregate,O
value,O
of,O
transaction,O
:,O
,O
Fee,O
paid,O
previously,O
with,O
preliminary,O
materials,O
.,O
,O
Check,O
box,O
if,O
any,O
part,O
of,O
the,O
fee,O
is,O
offset,O
as,O
provided,O
by,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
Rule,O
0-11,O
(,O
a,O
),O
(,O
2,O
),O
and,O
identify,O
the,O
filing,O
for,O
which,O
the,O
offsetting,O
fee,O
was,O
paid,O
previously,O
.,O
,O
Identify,O
the,O
previous,O
filing,O
by,O
registration,O
statement,O
number,O
",",O
or,O
the,O
Form,O
or,O
Schedule,O
and,O
the,O
date,O
of,O
its,O
filing,O
.,O
,O
Form,O
",",O
Schedule,O
or,O
Registration,O
Statement,O
No.,O
New,I-LOCATION
York,I-LOCATION
",",O
NY,I-LOCATION
and,O
Irvine,I-LOCATION
",",O
CA,I-LOCATION
",",O
April,O
18,O
",",O
2011,O
—,O
In,O
connection,O
with,O
the,O
previously,O
announced,O
agreements,O
to,O
acquire,O
Epicor,I-BUSINESS
Software,I-BUSINESS
Corporation,I-BUSINESS
(,O
Nasdaq,I-BUSINESS
:,O
EPIC,I-BUSINESS
),O
and,O
Activant,I-BUSINESS
Group,I-BUSINESS
Inc.,I-BUSINESS
",",O
Element,I-BUSINESS
Merger,I-BUSINESS
Sub,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
Element,I-BUSINESS
),O
",",O
Eagle,I-BUSINESS
Parent,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
Eagle,I-BUSINESS
),O
and,O
Epicor,I-BUSINESS
today,O
announced,O
that,O
the,O
waiting,O
periods,O
under,O
the,O
Hart-Scott-Rodino,I-LEGISLATION/ACT
Antitrust,I-LEGISLATION/ACT
Improvements,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1976,I-LEGISLATION/ACT
",",O
as,O
amended,O
(,O
the,O
HSR,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
),O
",",O
with,O
respect,O
to,O
the,O
acquisitions,O
of,O
each,O
of,O
Epicor,I-BUSINESS
and,O
Activant,I-BUSINESS
have,O
been,O
early,O
terminated,O
.,O
,O
Element,I-BUSINESS
and,O
Eagle,I-BUSINESS
are,O
newly,O
formed,O
corporations,O
and,O
are,O
wholly,O
owned,O
by,O
funds,O
advised,O
by,O
Apax,I-BUSINESS
Partners,I-BUSINESS
",",O
one,O
of,O
the,O
world,O
s,O
leading,O
private,O
equity,O
firms,O
with,O
a,O
strong,O
heritage,O
of,O
technology,O
investment,O
.,O
,O
The,O
early,O
terminations,O
under,O
the,O
HSR,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
for,O
both,O
Epicor,I-BUSINESS
and,O
Activant,I-BUSINESS
satisfy,O
the,O
only,O
antitrust,O
conditions,O
to,O
the,O
previously,O
announced,O
cash,O
tender,O
offer,O
to,O
acquire,O
all,O
of,O
the,O
outstanding,O
shares,O
of,O
Epicor,I-BUSINESS
s,O
common,O
stock,O
for,O
$,O
12.50,O
net,O
per,O
share,O
in,O
cash,O
",",O
without,O
interest,O
and,O
less,O
any,O
applicable,O
withholding,O
taxes,O
.,O
,O
The,O
tender,O
offer,O
is,O
scheduled,O
to,O
expire,O
at,O
midnight,O
",",O
Los,I-LOCATION
Angeles,I-LOCATION
time,O
",",O
on,O
Friday,O
",",O
May,O
6,O
",",O
2011,O
",",O
unless,O
extended,O
or,O
earlier,O
terminated,O
.,O
,O
Epicor,I-BUSINESS
s,O
board,O
of,O
directors,O
unanimously,O
recommends,O
that,O
Epicor,I-BUSINESS
stockholders,O
tender,O
their,O
shares,O
into,O
the,O
tender,O
offer,O
.,O
,O
The,O
closing,O
of,O
the,O
tender,O
offer,O
remains,O
subject,O
to,O
other,O
conditions,O
",",O
including,O
the,O
tender,O
of,O
at,O
least,O
74.51,O
%,O
of,O
the,O
outstanding,O
shares,O
of,O
Epicor,I-BUSINESS
(,O
less,O
any,O
shares,O
subject,O
to,O
non-tender,O
and,O
support,O
agreements,O
entered,O
into,O
with,O
Element,I-BUSINESS
and,O
Eagle,I-BUSINESS
),O
",",O
the,O
receipt,O
of,O
debt,O
financing,O
",",O
the,O
satisfaction,O
or,O
waiver,O
of,O
certain,O
conditions,O
to,O
the,O
acquisition,O
of,O
Activant,I-BUSINESS
by,O
Eagle,I-BUSINESS
and,O
other,O
customary,O
closing,O
conditions,O
.,O
,O
As,O
previously,O
announced,O
",",O
Eagle,I-BUSINESS
also,O
intends,O
to,O
acquire,O
Activant,I-BUSINESS
",",O
a,O
leading,O
technology,O
provider,O
of,O
business,O
management,O
software,O
solutions,O
for,O
mid-market,O
retail,O
and,O
wholesale,O
distribution,O
businesses,O
.,O
,O
Eagle,I-BUSINESS
intends,O
to,O
integrate,O
Activant,I-BUSINESS
and,O
Epicor,I-BUSINESS
to,O
create,O
one,O
of,O
the,O
largest,O
global,O
providers,O
of,O
enterprise,O
applications,O
focused,O
on,O
the,O
manufacturing,O
",",O
distribution,O
",",O
services,O
and,O
retail,O
sectors,O
.,O
,O
Following,O
completion,O
of,O
the,O
acquisitions,O
",",O
the,O
integrated,O
company,O
will,O
be,O
named,O
Epicor,I-BUSINESS
Software,I-BUSINESS
Corporation,I-BUSINESS
and,O
will,O
no,O
longer,O
be,O
a,O
publicly,O
traded,O
company,O
.,O
,O
The,O
information,O
agent,O
for,O
the,O
tender,O
offer,O
is,O
BNY,I-BUSINESS
Mellon,I-BUSINESS
Shareowner,I-BUSINESS
Services,I-BUSINESS
.,O
,O
The,O
Dealer,O
Manager,O
for,O
the,O
tender,O
offer,O
is,O
Jefferies,I-BUSINESS
&,I-BUSINESS
Company,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
.,O
,O
About,O
Apax,I-BUSINESS
Partners,I-BUSINESS
Apax,B-BUSINESS
Partners,I-BUSINESS
is,O
one,O
of,O
the,O
world,O
s,O
leading,O
private,O
equity,O
investment,O
groups,O
.,O
,O
It,O
operates,O
across,O
the,O
United,I-LOCATION
States,I-LOCATION
",",O
Europe,I-LOCATION
and,O
Asia,I-LOCATION
and,O
has,O
more,O
than,O
30,O
years,O
of,O
investing,O
experience,O
.,O
,O
Funds,O
under,O
the,O
advice,O
and,O
management,O
of,O
Apax,I-BUSINESS
Partners,I-BUSINESS
globally,O
total,O
around,O
$,O
40,O
billion,O
.,O
,O
These,O
Funds,O
provide,O
long-term,O
equity,O
financing,O
to,O
build,O
and,O
strengthen,O
world-class,O
companies,O
.,O
,O
Apax,I-BUSINESS
Partners,I-BUSINESS
Funds,I-BUSINESS
invest,O
in,O
companies,O
across,O
its,O
global,O
sectors,O
of,O
Tech,O
&,O
Telecom,O
",",O
Retail,O
&,O
Consumer,O
",",O
Media,O
",",O
Healthcare,O
and,O
Financial,O
&,O
Business,O
Services,O
.,O
,O
For,O
more,O
information,O
visit,O
:,O
www.apax.com,O
.,O
,O
About,O
Epicor,I-BUSINESS
Software,I-BUSINESS
Corporation,I-BUSINESS
Epicor,B-BUSINESS
Software,I-BUSINESS
is,O
a,O
global,O
leader,O
delivering,O
business,O
software,O
solutions,O
to,O
the,O
manufacturing,O
",",O
distribution,O
",",O
retail,O
",",O
hospitality,O
and,O
services,O
industries,O
.,O
,O
With,O
"20,000",O
customers,O
in,O
over,O
150,O
countries,O
",",O
Epicor,I-BUSINESS
provides,O
integrated,O
enterprise,O
resource,O
planning,O
(,O
ERP,O
),O
",",O
customer,O
relationship,O
management,O
(,O
CRM,O
),O
",",O
supply,O
chain,O
management,O
(,O
SCM,O
),O
",",O
human,O
capital,O
management,O
(,O
HCM,O
),O
and,O
enterprise,O
retail,O
software,O
solutions,O
that,O
enable,O
companies,O
to,O
drive,O
increased,O
efficiency,O
and,O
improve,O
profitability,O
.,O
,O
Founded,O
in,O
1984,O
",",O
Epicor,I-BUSINESS
takes,O
pride,O
in,O
more,O
than,O
25,O
years,O
of,O
technology,O
innovation,O
delivering,O
business,O
solutions,O
that,O
provide,O
the,O
scalability,O
and,O
flexibility,O
businesses,O
need,O
to,O
build,O
competitive,O
advantage,O
.,O
,O
Epicor,I-BUSINESS
provides,O
a,O
comprehensive,O
range,O
of,O
services,O
with,O
a,O
single,O
point,O
of,O
accountability,O
that,O
promotes,O
rapid,O
return,O
on,O
investment,O
and,O
low,O
total,O
cost,O
of,O
ownership,O
",",O
whether,O
operating,O
business,O
on,O
a,O
local,O
",",O
regional,O
or,O
global,O
scale,O
.,O
,O
Epicor,I-BUSINESS
s,O
worldwide,O
headquarters,O
are,O
located,O
in,O
Irvine,I-LOCATION
",",O
California,I-LOCATION
with,O
offices,O
and,O
affiliates,O
around,O
the,O
world,O
.,O
,O
For,O
more,O
information,O
",",O
visit,O
www.epicor.com,O
.,O
,O
About,O
Activant,I-BUSINESS
Solutions,I-BUSINESS
Inc.,I-BUSINESS
,O
Activant,I-BUSINESS
Solutions,I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
wholly,O
owned,O
subsidiary,O
of,O
Activant,I-BUSINESS
Group,I-BUSINESS
Inc.,I-BUSINESS
",",O
is,O
a,O
leading,O
technology,O
provider,O
of,O
business,O
management,O
solutions,O
serving,O
mid-market,O
retails,O
and,O
distributors,O
.,O
,O
Activant,I-BUSINESS
provides,O
customers,O
with,O
industry-specific,O
software,O
",",O
professional,O
services,O
",",O
content,O
",",O
supply,O
chain,O
connectivity,O
",",O
and,O
analytics,O
.,O
,O
Founded,O
in,O
1972,O
",",O
Activant,I-BUSINESS
is,O
the,O
established,O
technology,O
leader,O
in,O
the,O
automotive,O
aftermarket,O
",",O
hard,O
goods,O
retailers,O
",",O
lumber,O
and,O
building,O
materials,O
dealers,O
",",O
industrial,O
",",O
electrical,O
and,O
plumbing,O
supply,O
houses,O
.,O
,O
In,O
addition,O
Activant,I-BUSINESS
has,O
recently,O
become,O
a,O
major,O
force,O
in,O
the,O
broader,O
spectrum,O
of,O
specialty,O
retailing,O
having,O
been,O
selected,O
the,O
#,O
1,O
mid-market,O
software,O
vendor,O
by,O
Retail,O
Info,O
Systems,O
News,O
.,O
,O
Activant,I-BUSINESS
s,O
systems,O
are,O
designed,O
to,O
help,O
customers,O
increase,O
sales,O
",",O
boost,O
productivity,O
",",O
operate,O
more,O
cost-efficiently,O
",",O
improve,O
inventory,O
turns,O
and,O
enhance,O
trading,O
partner,O
relationships,O
.,O
,O
Activant,I-BUSINESS
has,O
operations,O
in,O
California,I-LOCATION
",",O
Texas,I-LOCATION
",",O
Colorado,I-LOCATION
",",O
Illinois,I-LOCATION
",",O
Pennsylvania,I-LOCATION
",",O
South,I-LOCATION
Carolina,I-LOCATION
",",O
Canada,I-LOCATION
",",O
Ireland,I-LOCATION
and,O
the,O
United,I-LOCATION
Kingdom,I-LOCATION
.,O
,O
For,O
more,O
information,O
",",O
please,O
visit,O
www.activant.com,O
.,O
,O
Notice,O
to,O
Investors,O
This,O
release,O
is,O
neither,O
an,O
offer,O
to,O
purchase,O
nor,O
a,O
solicitation,O
of,O
an,O
offer,O
to,O
sell,O
securities,O
.,O
,O
Element,I-BUSINESS
and,O
Eagle,I-BUSINESS
filed,O
a,O
tender,O
offer,O
statement,O
on,O
Schedule,I-MISCELLANEOUS
TO,I-MISCELLANEOUS
with,O
the,O
SEC,I-GOVERNMENT
.,O
,O
Investors,O
and,O
Epicor,I-BUSINESS
shareholders,O
are,O
strongly,O
advised,O
to,O
read,O
the,O
tender,O
offer,O
statement,O
(,O
including,O
an,O
offer,O
to,O
purchase,O
",",O
letter,O
of,O
transmittal,O
and,O
related,O
tender,O
offer,O
documents,O
),O
and,O
the,O
related,O
solicitation/recommendation,O
statement,O
on,O
Schedule,I-MISCELLANEOUS
14D-9,I-MISCELLANEOUS
filed,O
by,O
Epicor,I-BUSINESS
with,O
the,O
SEC,I-GOVERNMENT
",",O
and,O
any,O
amendments,O
thereto,O
",",O
because,O
they,O
contain,O
important,O
information,O
.,O
,O
These,O
documents,O
are,O
available,O
at,O
no,O
charge,O
on,O
the,O
SEC,I-GOVERNMENT
s,O
website,O
at,O
www.sec.gov,O
.,O
,O
Forward,O
Looking,O
Statements,O
This,O
release,O
contains,O
certain,O
statements,O
which,O
constitute,O
forward-looking,O
statements,O
under,O
the,O
Private,I-LEGISLATION/ACT
Securities,I-LEGISLATION/ACT
Litigation,I-LEGISLATION/ACT
Reform,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1995,I-LEGISLATION/ACT
.,O
,O
These,O
forward-looking,O
statements,O
include,O
statements,O
regarding,O
expected,O
completion,O
of,O
the,O
transaction,O
",",O
expected,O
revenues,O
",",O
market,O
share,O
",",O
business,O
model,O
",",O
sales,O
pipelines,O
and,O
opportunities,O
",",O
competitive,O
advantage,O
and,O
other,O
statements,O
that,O
are,O
not,O
historical,O
fact,O
.,O
,O
These,O
forward-looking,O
statements,O
are,O
based,O
on,O
currently,O
available,O
competitive,O
",",O
financial,O
and,O
economic,O
data,O
together,O
with,O
management,O
s,O
views,O
and,O
assumptions,O
regarding,O
future,O
events,O
and,O
business,O
performance,O
as,O
of,O
the,O
time,O
the,O
statements,O
are,O
made,O
and,O
are,O
subject,O
to,O
risks,O
and,O
uncertainties,O
.,O
,O
Actual,O
results,O
may,O
differ,O
materially,O
from,O
those,O
currently,O
anticipated,O
due,O
to,O
a,O
number,O
of,O
risks,O
and,O
uncertainties,O
",",O
including,O
uncertainties,O
as,O
to,O
how,O
many,O
of,O
Epicor,I-BUSINESS
stockholders,O
will,O
tender,O
their,O
stock,O
in,O
the,O
offer,O
;,O
the,O
possibility,O
that,O
competing,O
offers,O
will,O
be,O
made,O
;,O
and,O
the,O
possibility,O
that,O
various,O
closing,O
conditions,O
for,O
the,O
transaction,O
may,O
not,O
be,O
satisfied,O
or,O
waived,O
and,O
risks,O
and,O
uncertainties,O
relating,O
to,O
these,O
matters,O
that,O
are,O
discussed,O
in,O
documents,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
by,O
Epicor,I-BUSINESS
",",O
as,O
well,O
as,O
the,O
tender,O
offer,O
documents,O
to,O
be,O
filed,O
by,O
Eagle,I-BUSINESS
and,O
Element,I-BUSINESS
and,O
the,O
solicitation/recommendation,O
statement,O
filed,O
by,O
Epicor,I-BUSINESS
.,O
,O
Except,O
as,O
required,O
by,O
law,O
",",O
none,O
of,O
Epicor,I-BUSINESS
",",O
Element,I-BUSINESS
and,O
Eagle,I-BUSINESS
and,O
their,O
respective,O
affiliates,O
undertake,O
any,O
obligation,O
to,O
revise,O
or,O
update,O
publicly,O
any,O
forward-looking,O
statements,O
.,O
,O
Additional,O
Information,O
about,O
the,O
Merger,O
and,O
Where,O
to,O
Find,O
It,O
In,O
connection,O
with,O
the,O
potential,O
transaction,O
referred,O
to,O
in,O
this,O
press,O
release,O
",",O
Epicor,I-BUSINESS
may,O
file,O
a,O
proxy,O
statement,O
with,O
the,O
SEC,I-GOVERNMENT
related,O
to,O
the,O
approval,O
of,O
the,O
merger,O
agreement,O
by,O
Epicor,I-BUSINESS
s,O
stockholders,O
.,O
,O
Additionally,O
",",O
Epicor,I-BUSINESS
will,O
file,O
other,O
relevant,O
materials,O
with,O
the,O
SEC,I-GOVERNMENT
in,O
connection,O
with,O
the,O
proposed,O
acquisition,O
of,O
Epicor,I-BUSINESS
by,O
Element,I-BUSINESS
and,O
Eagle,I-BUSINESS
pursuant,O
to,O
the,O
terms,O
of,O
the,O
merger,O
agreement,O
.,O
,O
The,O
materials,O
to,O
be,O
filed,O
by,O
Epicor,I-BUSINESS
with,O
the,O
SEC,I-GOVERNMENT
may,O
be,O
obtained,O
free,O
of,O
charge,O
at,O
the,O
SEC,I-GOVERNMENT
s,O
web,O
site,O
at,O
www.sec.gov,O
.,O
,O
Investors,O
and,O
stockholders,O
also,O
may,O
obtain,O
free,O
copies,O
of,O
the,O
proxy,O
statement,O
from,O
Epicor,I-BUSINESS
by,O
contacting,O
Epicor,I-BUSINESS
s,O
Investor,O
Relations,O
using,O
the,O
contact,O
information,O
stated,O
above,O
.,O
,O
Investors,O
and,O
security,O
holders,O
of,O
Epicor,I-BUSINESS
are,O
urged,O
to,O
read,O
the,O
proxy,O
statement,O
and,O
the,O
other,O
relevant,O
materials,O
when,O
they,O
become,O
available,O
before,O
making,O
any,O
voting,O
or,O
investment,O
decision,O
with,O
respect,O
to,O
the,O
proposed,O
merger,O
because,O
they,O
will,O
contain,O
important,O
information,O
about,O
the,O
merger,O
and,O
the,O
parties,O
to,O
the,O
merger,O
.,O
,O
Epicor,I-BUSINESS
and,O
its,O
respective,O
directors,O
",",O
executive,O
officers,O
and,O
other,O
members,O
of,O
their,O
management,O
and,O
employees,O
",",O
under,O
the,O
SEC,I-GOVERNMENT
rules,O
",",O
may,O
be,O
deemed,O
to,O
be,O
participants,O
in,O
the,O
solicitation,O
of,O
proxies,O
of,O
Epicor,I-BUSINESS
s,O
stockholders,O
in,O
connection,O
with,O
the,O
proposed,O
merger,O
.,O
,O
Investors,O
and,O
security,O
holders,O
may,O
obtain,O
more,O
detailed,O
information,O
regarding,O
the,O
names,O
",",O
affiliations,O
and,O
interests,O
of,O
certain,O
of,O
Epicor,I-BUSINESS
s,O
executive,O
officers,O
and,O
directors,O
in,O
the,O
solicitation,O
by,O
reading,O
Epicor,I-BUSINESS
s,O
proxy,O
statement,O
for,O
its,O
2010,O
annual,O
meeting,O
of,O
stockholders,O
",",O
the,O
Annual,O
Report,O
on,O
Form,I-MISCELLANEOUS
10-K,I-MISCELLANEOUS
for,O
the,O
fiscal,O
year,O
ended,O
December,O
31,O
",",O
2010,O
",",O
and,O
the,O
proxy,O
statement,O
and,O
other,O
relevant,O
materials,O
which,O
may,O
be,O
filed,O
with,O
the,O
SEC,I-GOVERNMENT
in,O
connection,O
with,O
the,O
merger,O
when,O
and,O
if,O
they,O
become,O
available,O
.,O
,O
Information,O
concerning,O
the,O
interests,O
of,O
Epicor,I-BUSINESS
s,O
participants,O
in,O
the,O
solicitation,O
",",O
which,O
may,O
",",O
in,O
some,O
cases,O
",",O
be,O
different,O
than,O
those,O
of,O
Epicor,I-BUSINESS
s,O
stockholders,O
generally,O
",",O
will,O
be,O
set,O
forth,O
in,O
the,O
proxy,O
statement,O
relating,O
to,O
the,O
merger,O
when,O
it,O
becomes,O
available,O
.,O
,O
-DOCSTART-,O
,O
Registrant,O
's,O
telephone,O
number,O
",",O
including,O
area,O
code,O
:,O
,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
is,O
to,O
be,O
used,O
by,O
management,O
investment,O
companies,O
other,O
than,O
small,O
business,O
investment,O
companies,O
registered,O
on,O
Form,I-MISCELLANEOUS
N-5,I-MISCELLANEOUS
(,O
§§,O
239.24,O
and,O
274.5,O
of,O
this,O
chapter,O
),O
",",O
to,O
file,O
reports,O
with,O
the,O
Commission,O
",",O
not,O
later,O
than,O
60,O
days,O
after,O
the,O
close,O
of,O
the,O
first,O
and,O
third,O
fiscal,O
quarters,O
",",O
pursuant,O
to,O
Rule,O
30b1-5,O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
(,O
17,O
CFR,I-LEGISLATION/ACT
270.30b1-5,O
),O
.,O
,O
The,O
Commission,O
may,O
use,O
the,O
information,O
provided,O
on,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
in,O
its,O
regulatory,O
",",O
disclosure,O
review,O
",",O
inspection,O
",",O
and,O
policymaking,O
roles,O
.,O
,O
A,O
registrant,O
is,O
required,O
to,O
disclose,O
the,O
information,O
specified,O
by,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
",",O
and,O
the,O
Commission,O
will,O
make,O
this,O
information,O
public,O
.,O
,O
A,O
registrant,O
is,O
not,O
required,O
to,O
respond,O
to,O
the,O
collection,O
of,O
information,O
contained,O
in,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
unless,O
the,O
Form,O
displays,O
a,O
currently,O
valid,O
Office,I-GOVERNMENT
of,I-GOVERNMENT
Management,I-GOVERNMENT
and,I-GOVERNMENT
Budget,I-GOVERNMENT
(,O
``,O
OMB,I-GOVERNMENT
'',O
),O
control,O
number,O
.,O
,O
Please,O
direct,O
comments,O
concerning,O
the,O
accuracy,O
of,O
the,O
information,O
collection,O
burden,O
estimate,O
and,O
any,O
suggestions,O
for,O
reducing,O
the,O
burden,O
to,O
Secretary,O
",",O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
450,O
Fifth,I-LOCATION
Street,I-LOCATION
",",O
NW,I-LOCATION
",",O
Washington,I-LOCATION
",",I-LOCATION
DC,I-LOCATION
20549-0609,O
.,O
,O
The,O
OMB,I-GOVERNMENT
has,O
reviewed,O
this,O
collection,O
of,O
information,O
under,O
the,O
clearance,O
requirements,O
of,O
44,O
U.S.C.,I-LEGISLATION/ACT
,O
Schedule,O
of,O
Investments,O
.,O
,O
January,O
31,O
",",O
2010,O
(,O
Unaudited,O
),O
,O
Investments,O
in,O
shares,O
of,O
other,O
open-end,O
investment,O
companies,O
held,O
by,O
New,I-MISCELLANEOUS
Century,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
Portfolio,I-MISCELLANEOUS
",",O
New,I-MISCELLANEOUS
Century,I-MISCELLANEOUS
Balanced,I-MISCELLANEOUS
Portfolio,I-MISCELLANEOUS
",",O
New,I-MISCELLANEOUS
Century,I-MISCELLANEOUS
Opportunistic,I-MISCELLANEOUS
Portfolio,I-MISCELLANEOUS
",",O
New,I-MISCELLANEOUS
Century,I-MISCELLANEOUS
International,I-MISCELLANEOUS
Portfolio,I-MISCELLANEOUS
and,O
New,I-MISCELLANEOUS
Century,I-MISCELLANEOUS
Alternative,I-MISCELLANEOUS
Strategies,I-MISCELLANEOUS
Portfolio,I-MISCELLANEOUS
(,O
the,O
“,O
Portfolios,O
”,O
),O
are,O
valued,O
at,O
their,O
net,O
asset,O
value,O
as,O
reported,O
by,O
such,O
companies,O
.,O
,O
The,O
Portfolios,O
may,O
also,O
invest,O
in,O
closed-end,O
investment,O
companies,O
",",O
exchange-traded,O
funds,O
",",O
and,O
to,O
a,O
certain,O
extent,O
",",O
directly,O
in,O
securities,O
.,O
,O
Investments,O
in,O
closed-end,O
investment,O
companies,O
",",O
exchange-traded,O
funds,O
and,O
direct,O
investments,O
in,O
securities,O
are,O
valued,O
at,O
market,O
prices,O
",",O
as,O
described,O
in,O
the,O
paragraph,O
below,O
.,O
,O
The,O
net,O
asset,O
value,O
as,O
reported,O
by,O
open-end,O
investment,O
companies,O
may,O
be,O
based,O
on,O
fair,O
value,O
pricing,O
;,O
to,O
understand,O
the,O
fair,O
value,O
pricing,O
process,O
used,O
by,O
such,O
co,O
mpanies,O
",",O
consult,O
their,O
most,O
current,O
prospectus,O
.,O
,O
Investments,O
in,O
securities,O
traded,O
on,O
a,O
national,O
securities,O
exchange,O
or,O
included,O
in,O
NASDAQ,I-BUSINESS
are,O
generally,O
valued,O
at,O
the,O
last,O
reported,O
sales,O
price,O
",",O
the,O
closing,O
price,O
or,O
the,O
official,O
closing,O
price,O
;,O
and,O
securities,O
traded,O
in,O
the,O
over-the-counter,O
market,O
and,O
listed,O
securities,O
for,O
which,O
no,O
sale,O
is,O
reported,O
on,O
that,O
date,O
are,O
valued,O
at,O
the,O
last,O
reported,O
bid,O
price,O
.,O
,O
It,O
is,O
expected,O
that,O
fixed,O
income,O
securities,O
will,O
ordinarily,O
be,O
traded,O
in,O
the,O
over-the-counter,O
market,O
.,O
,O
When,O
market,O
quotations,O
are,O
not,O
readily,O
available,O
",",O
fixed,O
income,O
securities,O
may,O
be,O
valued,O
on,O
the,O
basis,O
of,O
prices,O
provided,O
by,O
an,O
independent,O
pricing,O
service,O
.,O
,O
Other,O
assets,O
and,O
securities,O
for,O
which,O
no,O
quotations,O
are,O
readily,O
available,O
or,O
for,O
which,O
quotations,O
the,O
Advisor,O
believes,O
do,O
not,O
reflect,O
market,O
value,O
are,O
valued,O
at,O
their,O
fair,O
value,O
as,O
determined,O
in,O
good,O
faith,O
by,O
the,O
Advisor,O
unde,O
r,O
the,O
procedures,O
established,O
by,O
the,O
Board,O
of,O
Trustees,O
.,O
,O
Short-term,O
investments,O
may,O
be,O
valued,O
at,O
amortized,O
cost,O
which,O
approximates,O
market,O
value,O
.,O
,O
Accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
in,O
the,O
United,I-LOCATION
States,I-LOCATION
(,O
“,O
GAAP,I-LEGISLATION/ACT
”,O
),O
establish,O
a,O
single,O
authoritative,O
definition,O
of,O
fair,O
value,O
",",O
set,O
out,O
a,O
framework,O
for,O
measuring,O
fair,O
value,O
and,O
require,O
additional,O
disclosures,O
about,O
fair,O
value,O
measurements,O
.,O
,O
Various,O
inputs,O
are,O
used,O
in,O
determining,O
the,O
value,O
of,O
the,O
Portfolios,O
’,O
investments,O
.,O
,O
These,O
inputs,O
are,O
summarized,O
in,O
the,O
three,O
broad,O
levels,O
listed,O
below,O
:,O
,O
The,O
inputs,O
or,O
methodology,O
used,O
for,O
valuing,O
securities,O
are,O
not,O
necessarily,O
an,O
indication,O
of,O
the,O
risks,O
associated,O
with,O
investing,O
in,O
those,O
securities,O
.,O
,O
The,O
following,O
is,O
a,O
summary,O
of,O
the,O
inputs,O
used,O
to,O
value,O
the,O
Portfolios,O
’,O
investments,O
as,O
of,O
January,O
31,O
",",O
2010,O
by,O
security,O
type,O
.,O
,O
NOTES,O
TO,O
SCHEDULES,O
OF,O
INVESTMENTS,O
(,O
Continued,O
),O
,O
Refer,O
to,O
each,O
respective,O
Portfolio,O
’,O
s,O
Schedule,O
of,O
Investments,O
for,O
a,O
listing,O
of,O
the,O
securities,O
valued,O
using,O
Level,O
1,O
and,O
Level,O
2,O
inputs,O
.,O
,O
Investment,O
transactions,O
are,O
recorded,O
on,O
a,O
trade,O
date,O
basis,O
.,O
,O
Gains,O
and,O
losses,O
on,O
securities,O
sold,O
are,O
determined,O
on,O
a,O
specific,O
identification,O
method,O
.,O
,O
The,O
following,O
information,O
is,O
computed,O
on,O
a,O
tax,O
basis,O
for,O
each,O
item,O
as,O
of,O
January,O
31,O
",",O
2010,O
:,O
,O
Controls,O
and,O
Procedures,O
.,O
,O
(,O
a,O
),O
Based,O
on,O
their,O
evaluation,O
of,O
the,O
registrant,O
’,O
s,O
disclosure,O
controls,O
and,O
procedures,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
c,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
),O
as,O
of,O
a,O
date,O
within,O
90,O
days,O
of,O
the,O
filing,O
date,O
of,O
this,O
report,O
",",O
the,O
registrant,O
’,O
s,O
principal,O
executive,O
officer,O
and,O
principal,O
financial,O
officer,O
have,O
concluded,O
that,O
such,O
disclosure,O
controls,O
and,O
procedures,O
are,O
reasonably,O
designed,O
and,O
are,O
operating,O
effectively,O
to,O
ensure,O
that,O
material,O
information,O
relating,O
to,O
the,O
registrant,O
",",O
including,O
its,O
consolidated,O
subsidiaries,O
",",O
is,O
made,O
known,O
to,O
them,O
by,O
others,O
within,O
those,O
entities,O
",",O
particularly,O
during,O
the,O
period,O
in,O
which,O
this,O
report,O
is,O
being,O
prepared,O
",",O
and,O
that,O
such,O
information,O
is,O
recorded,O
",",O
processed,O
",",O
summarized,O
",",O
and,O
reported,O
on,O
a,O
timely,O
basis,O
.,O
,O
(,O
b,O
),O
There,O
were,O
no,O
changes,O
in,O
the,O
registrant,O
’,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
d,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
),O
that,O
occurred,O
during,O
the,O
registrant,O
’,O
s,O
last,O
fiscal,O
quarter,O
that,O
have,O
materially,O
affected,O
",",O
or,O
are,O
reasonably,O
likely,O
to,O
materially,O
affect,O
",",O
the,O
registrant,O
’,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
and,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
",",O
the,O
registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
",",O
thereunto,O
duly,O
authorized,O
.,O
,O
By,O
(,O
Signature,O
and,O
Title,O
),O
*,O
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
and,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
",",O
this,O
report,O
has,O
been,O
signed,O
below,O
by,O
the,O
following,O
persons,O
on,O
behalf,O
of,O
the,O
registrant,O
and,O
in,O
the,O
capacities,O
and,O
on,O
the,O
dates,O
indicated,O
.,O
,O
By,O
(,O
Signature,O
and,O
Title,O
),O
*,O
,O
By,O
(,O
Signature,O
and,O
Title,O
),O
*,O
,O
Print,O
the,O
name,O
and,O
title,O
of,O
each,O
signing,O
officer,O
under,O
his,O
or,O
her,O
signature,O
.,O
,O
I,O
",",O
Wayne,I-PERSON
M.,I-PERSON
Grzecki,I-PERSON
",",O
certify,O
that,O
:,O
,O
I,O
have,O
reviewed,O
this,O
report,O
on,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
of,O
New,I-MISCELLANEOUS
Century,I-MISCELLANEOUS
Portfolios,I-MISCELLANEOUS
;,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
this,O
report,O
does,O
not,O
contain,O
any,O
untrue,O
statement,O
of,O
a,O
material,O
fact,O
or,O
omit,O
to,O
state,O
a,O
material,O
fact,O
necessary,O
to,O
make,O
the,O
statements,O
made,O
",",O
in,O
light,O
of,O
the,O
circumstances,O
under,O
which,O
such,O
statements,O
were,O
made,O
",",O
not,O
misleading,O
with,O
respect,O
to,O
the,O
period,O
covered,O
by,O
this,O
report,O
;,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
the,O
schedules,O
of,O
investments,O
included,O
in,O
this,O
report,O
fairly,O
present,O
in,O
all,O
material,O
respects,O
the,O
investments,O
of,O
the,O
registrant,O
as,O
of,O
the,O
end,O
of,O
the,O
fiscal,O
quarter,O
for,O
which,O
the,O
report,O
is,O
filed,O
;,O
,O
The,O
registrant,O
’,O
s,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
are,O
responsible,O
for,O
establishing,O
and,O
maintaining,O
disclosure,O
controls,O
and,O
procedures,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
c,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
),O
and,O
internal,O
control,O
over,O
financial,O
reporting,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
d,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
),O
for,O
the,O
registrant,O
and,O
have,O
:,O
,O
(,O
a,O
),O
Designed,O
such,O
disclosure,O
controls,O
and,O
procedures,O
",",O
or,O
caused,O
such,O
disclosure,O
controls,O
and,O
procedures,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
ensure,O
that,O
material,O
information,O
relating,O
to,O
the,O
registrant,O
",",O
including,O
its,O
consolidated,O
subsidiaries,O
",",O
is,O
made,O
known,O
to,O
us,O
by,O
others,O
within,O
those,O
entities,O
",",O
particularly,O
during,O
the,O
period,O
in,O
which,O
this,O
report,O
is,O
being,O
prepared,O
;,O
,O
(,O
b,O
),O
Designed,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
or,O
caused,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
provide,O
reasonable,O
assurance,O
regarding,O
the,O
reliability,O
of,O
financial,O
reporting,O
and,O
the,O
preparation,O
of,O
financial,O
statements,O
for,O
external,O
purposes,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
;,O
,O
The,O
registrant,O
’,O
s,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
have,O
disclosed,O
to,O
the,O
registrant,O
’,O
s,O
auditors,O
and,O
the,O
audit,O
committee,O
of,O
the,O
registrant,O
’,O
s,O
board,O
of,O
directors,O
(,O
or,O
persons,O
performing,O
the,O
equivalent,O
functions,O
),O
:,O
,O
(,O
b,O
),O
Any,O
fraud,O
",",O
whether,O
or,O
not,O
material,O
",",O
that,O
involves,O
management,O
or,O
other,O
employees,O
who,O
have,O
a,O
significant,O
role,O
in,O
the,O
registrant,O
’,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
I,O
",",O
Nicole,I-PERSON
M.,I-PERSON
Tremblay,I-PERSON
",",O
certify,O
that,O
:,O
,O
I,O
have,O
reviewed,O
this,O
report,O
on,O
Form,I-MISCELLANEOUS
N-Q,I-MISCELLANEOUS
of,O
New,I-MISCELLANEOUS
Century,I-MISCELLANEOUS
Portfolios,I-MISCELLANEOUS
;,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
this,O
report,O
does,O
not,O
contain,O
any,O
untrue,O
statement,O
of,O
a,O
material,O
fact,O
or,O
omit,O
to,O
state,O
a,O
material,O
fact,O
necessary,O
to,O
make,O
the,O
statements,O
made,O
",",O
in,O
light,O
of,O
the,O
circumstances,O
under,O
which,O
such,O
statements,O
were,O
made,O
",",O
not,O
misleading,O
with,O
respect,O
to,O
the,O
period,O
covered,O
by,O
this,O
report,O
;,O
,O
Based,O
on,O
my,O
knowledge,O
",",O
the,O
schedules,O
of,O
investments,O
included,O
in,O
this,O
report,O
fairly,O
present,O
in,O
all,O
material,O
respects,O
the,O
investments,O
of,O
the,O
registrant,O
as,O
of,O
the,O
end,O
of,O
the,O
fiscal,O
quarter,O
for,O
which,O
the,O
report,O
is,O
filed,O
;,O
,O
The,O
registrant,O
’,O
s,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
are,O
responsible,O
for,O
establishing,O
and,O
maintaining,O
disclosure,O
controls,O
and,O
procedures,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
c,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
),O
and,O
internal,O
control,O
over,O
financial,O
reporting,O
(,O
as,O
defined,O
in,O
Rule,O
30a-3,O
(,O
d,O
),O
under,O
the,O
Investment,I-LEGISLATION/ACT
Company,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1940,I-LEGISLATION/ACT
),O
for,O
the,O
registrant,O
and,O
have,O
:,O
,O
(,O
a,O
),O
Designed,O
such,O
disclosure,O
controls,O
and,O
procedures,O
",",O
or,O
caused,O
such,O
disclosure,O
controls,O
and,O
procedures,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
ensure,O
that,O
material,O
information,O
relating,O
to,O
the,O
registrant,O
",",O
including,O
its,O
consolidated,O
subsidiaries,O
",",O
is,O
made,O
known,O
to,O
us,O
by,O
others,O
within,O
those,O
entities,O
",",O
particularly,O
during,O
the,O
period,O
in,O
which,O
this,O
report,O
is,O
being,O
prepared,O
;,O
,O
(,O
b,O
),O
Designed,O
such,O
internal,O
control,O
over,O
financial,O
reporting,O
",",O
or,O
caused,O
such,O
control,O
over,O
financial,O
reporting,O
to,O
be,O
designed,O
under,O
our,O
supervision,O
",",O
to,O
provide,O
reasonable,O
assurance,O
regarding,O
the,O
reliability,O
of,O
financial,O
reporting,O
and,O
the,O
preparation,O
of,O
financial,O
statements,O
for,O
external,O
purposes,O
in,O
accordance,O
with,O
generally,I-LEGISLATION/ACT
accepted,I-LEGISLATION/ACT
accounting,I-LEGISLATION/ACT
principles,I-LEGISLATION/ACT
;,O
,O
The,O
registrant,O
’,O
s,O
other,O
certifying,O
officer,O
(,O
s,O
),O
and,O
I,O
have,O
disclosed,O
to,O
the,O
registrant,O
’,O
s,O
auditors,O
and,O
the,O
audit,O
committee,O
of,O
the,O
registrant,O
’,O
s,O
board,O
of,O
directors,O
(,O
or,O
persons,O
performing,O
the,O
equivalent,O
functions,O
),O
:,O
,O
(,O
b,O
),O
Any,O
fraud,O
",",O
whether,O
or,O
not,O
material,O
",",O
that,O
involves,O
management,O
or,O
other,O
employees,O
who,O
have,O
a,O
significant,O
role,O
in,O
the,O
registrant,O
’,O
s,O
internal,O
control,O
over,O
financial,O
reporting,O
.,O
,O
-DOCSTART-,O
,O
Check,O
the,O
appropriate,O
box,O
below,O
if,O
the,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
filing,O
is,O
intended,O
to,O
simultaneously,O
satisfy,O
the,O
filing,O
obligation,O
of,O
the,O
registrant,O
under,O
any,O
of,O
the,O
following,O
provisions,O
(,O
see,O
General,O
Instruction,O
A.2,O
.,O
,O
o,O
Written,O
communications,O
pursuant,O
to,O
Rule,O
425,O
under,O
the,O
Securities,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17,O
CFR,I-LEGISLATION/ACT
230.425,O
),O
,O
Soliciting,O
material,O
pursuant,O
to,O
Rule,O
14a-12,O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17,O
CFR,I-LEGISLATION/ACT
240.14a-12,O
),O
,O
Pre-commencement,O
communications,O
pursuant,O
to,O
Rule,O
14d-2,O
(,O
b,O
),O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17,O
CFR,I-LEGISLATION/ACT
240.14d-2,O
(,O
b,O
),O
),O
,O
Pre-commencement,O
communications,O
pursuant,O
to,O
Rule,O
13e-4,O
(,O
c,O
),O
under,O
the,O
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
(,O
17,O
CFR,I-LEGISLATION/ACT
240.13e-4,O
(,O
c,O
),O
),O
,O
Amendments,O
to,O
Articles,O
of,O
Incorporation,O
or,O
Bylaws,O
;,O
Change,O
in,O
Fiscal,O
Year,O
.,O
,O
On,O
May,O
18,O
",",O
2011,O
",",O
the,O
Board,O
of,O
Directors,O
(,O
the,O
“,O
Board,O
”,O
),O
of,O
Wilhelmina,I-BUSINESS
International,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
(,O
the,O
“,O
Company,O
”,O
),O
approved,O
amendments,O
to,O
and,O
a,O
restatement,O
of,O
the,O
Company,O
’,O
s,O
Restated,O
Bylaws,O
(,O
as,O
amended,O
and,O
restated,O
",",O
the,O
“,O
Bylaws,O
”,O
),O
",",O
which,O
were,O
effective,O
immediately,O
upon,O
such,O
approval,O
by,O
the,O
Board,O
.,O
,O
The,O
amendments,O
update,O
the,O
following,O
provisions,O
of,O
the,O
Bylaws,O
:,O
,O
Advance,O
Notice,O
of,O
Nominations,O
and,O
Stockholder,O
Proposals,O
:,O
The,O
advance,O
notice,O
provisions,O
of,O
the,O
Bylaws,O
relating,O
to,O
stockholder,O
nominations,O
for,O
the,O
election,O
of,O
directors,O
and,O
submission,O
of,O
stockholder,O
proposals,O
were,O
updated,O
.,O
,O
With,O
respect,O
to,O
an,O
annual,O
meeting,O
of,O
stockholders,O
",",O
the,O
amendments,O
generally,O
provide,O
that,O
a,O
stockholder,O
of,O
record,O
of,O
the,O
Company,O
must,O
deliver,O
notice,O
of,O
a,O
nomination,O
or,O
other,O
business,O
proposal,O
to,O
the,O
Company,O
’,O
s,O
Secretary,O
not,O
earlier,O
than,O
the,O
120th,O
day,O
and,O
not,O
later,O
than,O
the,O
90th,O
day,O
prior,O
to,O
the,O
anniversary,O
of,O
the,O
preceding,O
year,O
’,O
s,O
annual,O
meeting,O
.,O
,O
In,O
the,O
event,O
that,O
the,O
date,O
of,O
the,O
annual,O
meeting,O
is,O
advanced,O
by,O
more,O
than,O
30,O
days,O
or,O
delayed,O
by,O
more,O
than,O
60,O
days,O
from,O
the,O
anniversary,O
date,O
of,O
the,O
preceding,O
year,O
’,O
s,O
annual,O
meeting,O
",",O
notice,O
by,O
the,O
stockholder,O
must,O
be,O
so,O
delivered,O
not,O
earlier,O
than,O
the,O
120th,O
day,O
prior,O
to,O
such,O
annual,O
meeting,O
and,O
not,O
later,O
than,O
the,O
close,O
of,O
business,O
on,O
the,O
later,O
of,O
the,O
90th,O
day,O
prior,O
to,O
such,O
annual,O
meeting,O
or,O
the,O
tenth,O
day,O
following,O
the,O
day,O
on,O
which,O
public,O
announcement,O
of,O
the,O
date,O
of,O
such,O
meeting,O
is,O
first,O
made,O
.,O
,O
With,O
respect,O
to,O
a,O
special,O
meeting,O
of,O
stockholders,O
",",O
notice,O
by,O
the,O
stockholder,O
of,O
a,O
nomination,O
or,O
other,O
business,O
proposal,O
must,O
be,O
delivered,O
by,O
the,O
close,O
of,O
business,O
on,O
the,O
seventh,O
day,O
following,O
the,O
date,O
on,O
which,O
public,O
announcement,O
of,O
the,O
date,O
of,O
such,O
meeting,O
is,O
first,O
made,O
.,O
,O
The,O
revised,O
advance,O
notice,O
provisions,O
of,O
the,O
Bylaws,O
also,O
provide,O
that,O
the,O
notice,O
to,O
the,O
Company,O
by,O
the,O
record,O
stockholder,O
submitting,O
the,O
nomination,O
or,O
other,O
business,O
proposal,O
must,O
contain,O
certain,O
additional,O
information,O
",",O
including,O
the,O
name,O
and,O
address,O
of,O
any,O
beneficial,O
owner,O
on,O
whose,O
behalf,O
the,O
nomination,O
or,O
other,O
business,O
proposal,O
is,O
being,O
made,O
and,O
the,O
class,O
and,O
number,O
of,O
shares,O
of,O
stock,O
of,O
the,O
Company,O
owned,O
beneficially,O
and,O
of,O
record,O
by,O
the,O
nominating,O
or,O
proposing,O
stockholder,O
and,O
any,O
such,O
beneficial,O
owner,O
.,O
,O
In,O
the,O
case,O
of,O
a,O
business,O
proposal,O
for,O
consideration,O
at,O
a,O
meeting,O
",",O
the,O
notice,O
to,O
the,O
Company,O
must,O
include,O
",",O
among,O
other,O
things,O
",",O
the,O
text,O
of,O
the,O
proposal,O
to,O
be,O
introduced,O
(,O
including,O
the,O
text,O
of,O
any,O
resolutions,O
proposed,O
for,O
consideration,O
and,O
",",O
in,O
the,O
event,O
such,O
proposal,O
is,O
to,O
amend,O
the,O
Bylaws,O
",",O
the,O
text,O
of,O
the,O
proposed,O
amendment,O
),O
",",O
the,O
reasons,O
for,O
introducing,O
the,O
proposal,O
and,O
any,O
material,O
interest,O
of,O
the,O
stockholder,O
in,O
the,O
proposal,O
.,O
,O
Notice,O
:,O
The,O
Bylaws,O
were,O
amended,O
to,O
clarify,O
procedures,O
with,O
respect,O
to,O
notice,O
to,O
directors,O
.,O
,O
The,O
revised,O
Bylaws,O
now,O
expressly,O
provide,O
that,O
notices,O
to,O
directors,O
pursuant,O
to,O
the,O
Company,O
’,O
s,O
Certificate,O
of,O
Incorporation,O
",",O
the,O
Bylaws,O
or,O
applicable,O
law,O
may,O
also,O
be,O
delivered,O
by,O
facsimile,O
or,O
email,O
.,O
,O
Fiscal,O
Year,O
:,O
In,O
order,O
to,O
conform,O
with,O
the,O
Company,O
’,O
s,O
current,O
practice,O
of,O
adhering,O
to,O
a,O
December,O
31,O
fiscal,O
year,O
end,O
",",O
the,O
Bylaws,O
were,O
corrected,O
to,O
state,O
that,O
the,O
Company,O
’,O
s,O
fiscal,O
year,O
ends,O
on,O
December,O
31,O
.,O
,O
The,O
foregoing,O
summary,O
is,O
qualified,O
in,O
its,O
entirety,O
by,O
reference,O
to,O
the,O
full,O
Amended,O
and,O
Restated,O
Bylaws,O
",",O
a,O
copy,O
of,O
which,O
is,O
attached,O
as,O
Exhibit,O
3.2,O
to,O
this,O
Current,O
Report,O
on,O
Form,I-MISCELLANEOUS
8-K,I-MISCELLANEOUS
and,O
is,O
incorporated,O
herein,O
by,O
reference,O
.,O
,O
Financial,O
Statements,O
and,O
Exhibits,O
.,O
,O
3.2,O
Amended,O
and,O
Restated,O
Bylaws,O
of,O
Wilhelmina,I-BUSINESS
International,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Pursuant,O
to,O
the,O
requirements,O
of,O
the,O
Securities,I-LEGISLATION/ACT
Exchange,I-LEGISLATION/ACT
Act,I-LEGISLATION/ACT
of,I-LEGISLATION/ACT
1934,I-LEGISLATION/ACT
",",O
the,O
Registrant,O
has,O
duly,O
caused,O
this,O
report,O
to,O
be,O
signed,O
on,O
its,O
behalf,O
by,O
the,O
undersigned,O
hereunto,O
duly,O
authorized,O
.,O
,O
WILHELMINA,I-BUSINESS
INTERNATIONAL,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
The,O
registered,O
office,O
shall,O
be,O
in,O
the,O
City,I-LOCATION
of,I-LOCATION
Wilmington,I-LOCATION
",",O
County,I-LOCATION
of,I-LOCATION
New,I-LOCATION
Castle,I-LOCATION
",",O
State,I-LOCATION
of,I-LOCATION
Delaware,I-LOCATION
.,O
,O
The,O
Corporation,O
may,O
also,O
have,O
offices,O
at,O
such,O
other,O
places,O
both,O
within,O
and,O
without,O
the,O
State,I-LOCATION
of,I-LOCATION
Delaware,I-LOCATION
as,O
the,O
board,O
of,O
directors,O
may,O
from,O
time,O
to,O
time,O
determine,O
or,O
the,O
business,O
of,O
the,O
Corporation,O
may,O
require,O
.,O
,O
The,O
annual,O
meeting,O
shall,O
be,O
held,O
on,O
the,O
date,O
and,O
at,O
the,O
time,O
fixed,O
",",O
from,O
time,O
to,O
time,O
",",O
by,O
the,O
directors,O
",",O
provided,O
that,O
the,O
first,O
annual,O
meeting,O
shall,O
be,O
held,O
on,O
a,O
date,O
within,O
thirteen,O
months,O
after,O
the,O
organization,O
of,O
the,O
Corporation,O
",",O
and,O
each,O
successive,O
annual,O
meeting,O
shall,O
be,O
held,O
on,O
a,O
date,O
within,O
thirteen,O
months,O
after,O
the,O
date,O
of,O
the,O
preceding,O
annual,O
meeting,O
.,O
,O
A,O
special,O
meeting,O
shall,O
be,O
held,O
on,O
the,O
date,O
and,O
at,O
the,O
time,O
fixed,O
by,O
the,O
directors,O
.,O
,O
All,O
meetings,O
of,O
the,O
stockholders,O
for,O
the,O
election,O
of,O
directors,O
shall,O
be,O
held,O
at,O
such,O
place,O
either,O
within,O
or,O
without,O
the,O
State,I-LOCATION
of,I-LOCATION
Delaware,I-LOCATION
as,O
shall,O
be,O
designated,O
from,O
time,O
to,O
time,O
by,O
the,O
board,O
of,O
directors,O
and,O
stated,O
in,O
the,O
notice,O
of,O
the,O
meeting,O
.,O
,O
Meetings,O
of,O
stockholders,O
for,O
any,O
other,O
purpose,O
may,O
be,O
held,O
at,O
such,O
time,O
and,O
place,O
",",O
within,O
or,O
without,O
the,O
State,I-LOCATION
of,I-LOCATION
Delaware,I-LOCATION
",",O
as,O
shall,O
be,O
stated,O
in,O
the,O
notice,O
of,O
the,O
meetings,O
or,O
in,O
a,O
duly,O
executed,O
waiver,O
of,O
notice,O
thereof,O
.,O
,O
Annual,O
meetings,O
may,O
be,O
called,O
by,O
the,O
directors,O
or,O
by,O
any,O
officer,O
instructed,O
by,O
the,O
directors,O
to,O
call,O
the,O
meeting,O
.,O
,O
Special,O
meetings,O
may,O
be,O
called,O
only,O
as,O
provided,O
by,O
Section,O
10.1,O
of,O
Article,O
X,O
of,O
these,O
Bylaws,O
.,O
,O
Written,O
notice,O
of,O
all,O
meetings,O
shall,O
be,O
given,O
",",O
stating,O
the,O
place,O
",",O
date,O
and,O
hour,O
of,O
the,O
meeting,O
and,O
stating,O
the,O
place,O
within,O
the,O
city,O
or,O
other,O
municipality,O
or,O
community,O
at,O
which,O
the,O
list,O
of,O
stockholders,O
of,O
the,O
Corporation,O
may,O
be,O
examined,O
.,O
,O
The,O
notice,O
of,O
an,O
annual,O
meeting,O
shall,O
state,O
that,O
the,O
meeting,O
is,O
called,O
for,O
the,O
election,O
of,O
directors,O
and,O
for,O
the,O
transaction,O
of,O
other,O
business,O
that,O
may,O
properly,O
come,O
before,O
the,O
meeting,O
and,O
shall,O
",",O
if,O
any,O
other,O
action,O
which,O
could,O
be,O
taken,O
at,O
a,O
special,O
meeting,O
is,O
to,O
be,O
taken,O
at,O
such,O
annual,O
meeting,O
",",O
state,O
the,O
purpose,O
or,O
purposes,O
.,O
,O
The,O
notice,O
of,O
a,O
special,O
meeting,O
shall,O
in,O
all,O
instances,O
state,O
the,O
purpose,O
or,O
purposes,O
for,O
which,O
the,O
meeting,O
is,O
called,O
.,O
,O
The,O
notice,O
of,O
any,O
meeting,O
shall,O
also,O
include,O
",",O
or,O
be,O
accompanied,O
by,O
",",O
any,O
additional,O
statements,O
",",O
information,O
or,O
documents,O
prescribed,O
by,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
.,O
,O
Except,O
as,O
otherwise,O
provided,O
by,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
",",O
a,O
copy,O
of,O
the,O
notice,O
of,O
any,O
meeting,O
shall,O
be,O
given,O
",",O
personally,O
or,O
by,O
mail,O
",",O
not,O
less,O
than,O
ten,O
days,O
nor,O
more,O
than,O
sixty,O
days,O
before,O
the,O
date,O
of,O
the,O
meeting,O
",",O
unless,O
the,O
lapse,O
of,O
the,O
prescribed,O
period,O
of,O
time,O
shall,O
have,O
been,O
waived,O
",",O
and,O
directed,O
to,O
each,O
stockholder,O
at,O
his,O
record,O
address,O
or,O
at,O
such,O
other,O
address,O
that,O
he,O
may,O
have,O
furnished,O
by,O
request,O
in,O
writing,O
to,O
the,O
Secretary,O
of,O
the,O
Corporation,O
.,O
,O
Notice,O
by,O
mail,O
shall,O
be,O
deemed,O
to,O
be,O
given,O
when,O
deposited,O
",",O
with,O
postage,O
thereon,O
prepaid,O
",",O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
mail,O
.,O
,O
If,O
a,O
meeting,O
is,O
adjourned,O
to,O
another,O
time,O
",",O
not,O
more,O
than,O
thirty,O
days,O
hence,O
",",O
and/or,O
to,O
another,O
place,O
",",O
and,O
if,O
an,O
announcement,O
of,O
the,O
adjourned,O
time,O
and/or,O
place,O
is,O
made,O
at,O
the,O
meeting,O
",",O
it,O
shall,O
not,O
be,O
necessary,O
to,O
give,O
notice,O
of,O
the,O
adjourned,O
meeting,O
unless,O
the,O
directors,O
",",O
after,O
adjournment,O
",",O
fix,O
a,O
new,O
record,O
date,O
for,O
the,O
adjourned,O
meeting,O
.,O
,O
Notice,O
need,O
not,O
be,O
given,O
to,O
any,O
stockholder,O
who,O
submits,O
a,O
written,O
waiver,O
signed,O
by,O
him,O
or,O
her,O
before,O
or,O
after,O
the,O
time,O
stated,O
therein,O
.,O
,O
Attendance,O
of,O
a,O
stockholder,O
at,O
a,O
meeting,O
of,O
stockholders,O
shall,O
constitute,O
a,O
waiver,O
of,O
notice,O
of,O
such,O
meeting,O
",",O
except,O
when,O
the,O
stockholder,O
attends,O
the,O
meeting,O
for,O
the,O
express,O
purpose,O
of,O
objecting,O
",",O
at,O
the,O
beginning,O
of,O
the,O
meeting,O
",",O
to,O
the,O
transaction,O
of,O
any,O
business,O
because,O
the,O
meeting,O
is,O
not,O
lawfully,O
called,O
or,O
convened,O
.,O
,O
Neither,O
the,O
business,O
to,O
be,O
transacted,O
at,O
",",O
nor,O
the,O
purpose,O
of,O
",",O
any,O
regular,O
or,O
special,O
meeting,O
of,O
the,O
stockholders,O
need,O
be,O
specified,O
in,O
any,O
written,O
waiver,O
of,O
notice,O
.,O
,O
Business,O
transacted,O
at,O
any,O
special,O
meeting,O
of,O
stockholders,O
shall,O
be,O
limited,O
to,O
the,O
purposes,O
stated,O
in,O
the,O
notice,O
.,O
,O
The,O
officer,O
who,O
has,O
charge,O
of,O
the,O
stock,O
ledger,O
of,O
the,O
Corporation,O
shall,O
prepare,O
and,O
make,O
",",O
at,O
least,O
ten,O
days,O
before,O
every,O
meeting,O
of,O
stockholders,O
",",O
a,O
complete,O
list,O
of,O
the,O
stockholders,O
",",O
arranged,O
in,O
alphabetical,O
order,O
",",O
and,O
showing,O
the,O
address,O
of,O
each,O
stockholder,O
and,O
the,O
number,O
of,O
shares,O
registered,O
in,O
the,O
name,O
of,O
each,O
stockholder,O
.,O
,O
Such,O
list,O
shall,O
be,O
open,O
to,O
the,O
examination,O
of,O
any,O
stockholder,O
",",O
for,O
any,O
purpose,O
germane,O
to,O
the,O
meeting,O
",",O
during,O
ordinary,O
business,O
hours,O
",",O
for,O
a,O
period,O
of,O
at,O
least,O
ten,O
days,O
prior,O
to,O
the,O
meeting,O
",",O
either,O
at,O
a,O
place,O
within,O
the,O
city,O
or,O
other,O
municipality,O
or,O
community,O
where,O
the,O
meeting,O
is,O
to,O
be,O
held,O
",",O
which,O
place,O
shall,O
be,O
specified,O
in,O
the,O
notice,O
of,O
the,O
meeting,O
",",O
or,O
if,O
not,O
so,O
specified,O
",",O
at,O
the,O
place,O
where,O
the,O
meeting,O
is,O
to,O
be,O
held,O
.,O
,O
The,O
list,O
shall,O
also,O
be,O
produced,O
and,O
kept,O
at,O
the,O
time,O
and,O
place,O
of,O
the,O
meeting,O
during,O
the,O
whole,O
time,O
thereof,O
",",O
and,O
may,O
be,O
inspected,O
by,O
any,O
stockholder,O
who,O
is,O
present,O
.,O
,O
The,O
stock,O
ledger,O
shall,O
be,O
the,O
only,O
evidence,O
as,O
to,O
who,O
are,O
the,O
stockholders,O
entitled,O
to,O
examine,O
the,O
stock,O
ledger,O
",",O
the,O
list,O
required,O
by,O
this,O
section,O
or,O
the,O
books,O
of,O
the,O
Corporation,O
",",O
or,O
to,O
vote,O
at,O
any,O
meeting,O
of,O
stockholders,O
.,O
,O
Meetings,O
of,O
the,O
stockholders,O
shall,O
be,O
presided,O
over,O
by,O
one,O
of,O
the,O
following,O
officers,O
in,O
the,O
order,O
of,O
seniority,O
and,O
if,O
present,O
and,O
acting,O
:,O
the,O
Chairperson,O
of,O
the,O
Board,O
",",O
if,O
any,O
",",O
the,O
Vice-Chairperson,O
of,O
the,O
Board,O
",",O
if,O
any,O
",",O
the,O
Chief,O
Executive,O
Officer,O
",",O
the,O
President,O
",",O
a,O
Vice,O
President,O
",",O
or,O
",",O
if,O
none,O
of,O
the,O
foregoing,O
is,O
in,O
office,O
and,O
present,O
and,O
acting,O
",",O
by,O
a,O
chairperson,O
to,O
be,O
chosen,O
by,O
the,O
stockholders,O
.,O
,O
The,O
Secretary,O
of,O
the,O
Corporation,O
",",O
or,O
in,O
his,O
absence,O
",",O
an,O
Assistant,O
Secretary,O
",",O
shall,O
act,O
as,O
secretary,O
of,O
every,O
meeting,O
",",O
but,O
if,O
neither,O
the,O
Secretary,O
nor,O
an,O
Assistant,O
Secretary,O
is,O
present,O
",",O
the,O
chairperson,O
of,O
the,O
meeting,O
shall,O
appoint,O
a,O
secretary,O
of,O
the,O
meeting,O
.,O
,O
Every,O
stockholder,O
may,O
authorize,O
another,O
person,O
or,O
persons,O
to,O
act,O
for,O
him,O
by,O
proxy,O
in,O
all,O
matters,O
in,O
which,O
a,O
stockholder,O
is,O
entitled,O
to,O
participate,O
",",O
whether,O
by,O
waiving,O
notice,O
of,O
any,O
meeting,O
",",O
voting,O
or,O
participating,O
at,O
a,O
meeting,O
",",O
or,O
expressing,O
consent,O
or,O
dissent,O
without,O
a,O
meeting,O
.,O
,O
Every,O
proxy,O
must,O
be,O
signed,O
by,O
the,O
stockholder,O
or,O
by,O
his,O
attorney-in-fact,O
.,O
,O
No,O
proxy,O
shall,O
be,O
voted,O
or,O
acted,O
upon,O
after,O
three,O
years,O
from,O
its,O
date,O
unless,O
such,O
proxy,O
provides,O
for,O
a,O
longer,O
period,O
.,O
,O
A,O
duly,O
executed,O
proxy,O
shall,O
be,O
irrevocable,O
if,O
it,O
means,O
that,O
it,O
is,O
irrevocable,O
and,O
",",O
if,O
",",O
and,O
only,O
as,O
long,O
as,O
",",O
it,O
is,O
coupled,O
with,O
an,O
interest,O
sufficient,O
in,O
law,O
to,O
support,O
an,O
irrevocable,O
power,O
.,O
,O
A,O
proxy,O
may,O
be,O
made,O
irrevocable,O
regardless,O
of,O
whether,O
the,O
interest,O
with,O
which,O
it,O
is,O
coupled,O
is,O
an,O
interest,O
in,O
the,O
stock,O
itself,O
or,O
an,O
interest,O
in,O
the,O
Corporation,O
generally,O
.,O
,O
The,O
directors,O
",",O
in,O
advance,O
of,O
any,O
meeting,O
",",O
may,O
",",O
but,O
need,O
not,O
",",O
appoint,O
one,O
or,O
more,O
inspectors,O
of,O
election,O
to,O
act,O
at,O
the,O
meeting,O
or,O
any,O
adjournment,O
thereof,O
.,O
,O
If,O
an,O
inspector,O
or,O
inspectors,O
are,O
not,O
appointed,O
",",O
the,O
person,O
presiding,O
at,O
the,O
meeting,O
may,O
",",O
but,O
need,O
not,O
",",O
appoint,O
one,O
or,O
more,O
inspectors,O
.,O
,O
In,O
case,O
any,O
person,O
who,O
may,O
be,O
appointed,O
as,O
an,O
inspector,O
fails,O
to,O
appear,O
or,O
act,O
",",O
the,O
vacancy,O
may,O
be,O
filled,O
by,O
appointment,O
made,O
by,O
the,O
directors,O
in,O
advance,O
of,O
the,O
meeting,O
or,O
at,O
the,O
meeting,O
by,O
the,O
person,O
presiding,O
thereat,O
.,O
,O
Each,O
inspector,O
",",O
if,O
any,O
",",O
before,O
entering,O
upon,O
the,O
discharge,O
of,O
his,O
duties,O
",",O
shall,O
take,O
and,O
sign,O
an,O
oath,O
faithfully,O
to,O
execute,O
the,O
duties,O
of,O
inspectors,O
at,O
such,O
meeting,O
with,O
strict,O
impartiality,O
and,O
according,O
to,O
the,O
best,O
of,O
his,O
ability,O
.,O
,O
The,O
inspectors,O
",",O
if,O
any,O
",",O
shall,O
determine,O
the,O
number,O
of,O
shares,O
of,O
stock,O
outstanding,O
and,O
the,O
voting,O
power,O
of,O
each,O
",",O
the,O
shares,O
of,O
stock,O
represented,O
at,O
the,O
meeting,O
",",O
the,O
existence,O
of,O
a,O
quorum,O
",",O
the,O
validity,O
and,O
effect,O
of,O
proxies,O
",",O
and,O
shall,O
receive,O
votes,O
",",O
ballots,O
or,O
consents,O
",",O
hear,O
and,O
determine,O
all,O
challenges,O
and,O
questions,O
arising,O
in,O
connection,O
with,O
the,O
right,O
to,O
vote,O
",",O
count,O
and,O
tabulate,O
all,O
votes,O
",",O
ballots,O
or,O
consents,O
",",O
determine,O
the,O
result,O
",",O
and,O
do,O
such,O
acts,O
as,O
are,O
proper,O
to,O
conduct,O
the,O
election,O
or,O
vote,O
with,O
fairness,O
to,O
all,O
stockholders,O
.,O
,O
On,O
request,O
of,O
the,O
person,O
presiding,O
at,O
the,O
meeting,O
",",O
the,O
inspector,O
or,O
inspectors,O
",",O
if,O
any,O
",",O
shall,O
make,O
a,O
report,O
in,O
writing,O
of,O
any,O
challenge,O
",",O
question,O
or,O
matter,O
determined,O
by,O
him,O
",",O
her,O
or,O
them,O
and,O
execute,O
a,O
certificate,O
of,O
any,O
fact,O
so,O
found,O
.,O
,O
The,O
holders,O
of,O
a,O
Majority,O
of,O
the,O
outstanding,O
shares,O
of,O
stock,O
entitled,O
to,O
vote,O
at,O
the,O
meeting,O
",",O
present,O
in,O
person,O
or,O
represented,O
by,O
proxy,O
",",O
shall,O
constitute,O
a,O
quorum,O
at,O
a,O
meeting,O
of,O
stockholders,O
for,O
the,O
transaction,O
of,O
any,O
business,O
.,O
,O
The,O
stockholders,O
present,O
may,O
adjourn,O
the,O
meeting,O
despite,O
the,O
absence,O
of,O
a,O
quorum,O
.,O
,O
When,O
a,O
quorum,O
is,O
present,O
at,O
any,O
meeting,O
",",O
the,O
vote,O
of,O
the,O
holders,O
of,O
a,O
majority,O
of,O
the,O
stock,O
having,O
voting,O
power,O
present,O
in,O
person,O
or,O
represented,O
by,O
proxy,O
shall,O
decide,O
any,O
question,O
brought,O
before,O
such,O
meeting,O
",",O
unless,O
the,O
question,O
is,O
one,O
upon,O
which,O
",",O
by,O
express,O
provision,O
of,O
the,O
statutes,O
or,O
of,O
the,O
Certificate,O
of,O
Incorporation,O
",",O
a,O
different,O
vote,O
is,O
required,O
",",O
in,O
which,O
case,O
such,O
express,O
provision,O
shall,O
govern,O
and,O
control,O
the,O
decision,O
of,O
such,O
question,O
.,O
,O
The,O
business,O
of,O
the,O
Corporation,O
shall,O
be,O
managed,O
by,O
its,O
board,O
of,O
directors,O
",",O
which,O
may,O
exercise,O
all,O
such,O
powers,O
of,O
the,O
Corporation,O
and,O
do,O
all,O
such,O
lawful,O
acts,O
and,O
things,O
as,O
are,O
not,O
by,O
statute,O
or,O
by,O
the,O
Certificate,O
of,O
Incorporation,O
or,O
by,O
these,O
Bylaws,O
directed,O
or,O
required,O
to,O
be,O
exercised,O
or,O
done,O
by,O
the,O
stockholders,O
.,O
,O
The,O
use,O
of,O
the,O
phrase,O
“,O
whole,O
board,O
of,O
directors,O
”,O
herein,O
refers,O
to,O
the,O
total,O
number,O
of,O
directors,O
that,O
the,O
Corporation,O
would,O
have,O
if,O
there,O
were,O
no,O
vacancies,O
.,O
,O
A,O
director,O
need,O
not,O
be,O
a,O
stockholder,O
",",O
a,O
citizen,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
or,O
a,O
resident,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
Delaware,I-LOCATION
.,O
,O
Except,O
as,O
otherwise,O
fixed,O
by,O
or,O
pursuant,O
to,O
the,O
provisions,O
of,O
Article,O
IV,O
of,O
the,O
Certificate,O
of,O
Incorporation,O
relating,O
to,O
the,O
rights,O
of,O
the,O
holders,O
of,O
any,O
class,O
or,O
series,O
of,O
stock,O
having,O
a,O
preference,O
over,O
the,O
Common,O
Stock,O
as,O
to,O
dividends,O
or,O
upon,O
liquidation,O
to,O
elect,O
additional,O
directors,O
under,O
specified,O
circumstances,O
",",O
the,O
number,O
of,O
the,O
directors,O
of,O
the,O
Corporation,O
shall,O
be,O
fixed,O
from,O
time,O
to,O
time,O
by,O
the,O
board,O
of,O
directors,O
",",O
but,O
shall,O
not,O
be,O
less,O
than,O
three,O
.,O
,O
Directors,O
shall,O
be,O
elected,O
at,O
each,O
annual,O
meeting,O
of,O
stockholders,O
of,O
the,O
Corporation,O
and,O
each,O
director,O
shall,O
hold,O
office,O
until,O
the,O
annual,O
meeting,O
of,O
stockholders,O
next,O
succeeding,O
said,O
director,O
’,O
s,O
election,O
",",O
and,O
until,O
said,O
director,O
’,O
s,O
successor,O
is,O
elected,O
and,O
qualified,O
",",O
or,O
until,O
the,O
earlier,O
of,O
said,O
director,O
’,O
s,O
death,O
",",O
resignation,O
or,O
removal,O
.,O
,O
Advance,O
notice,O
of,O
stockholder,O
nominations,O
for,O
the,O
election,O
of,O
directors,O
shall,O
be,O
given,O
in,O
the,O
manner,O
provided,O
in,O
Section,O
3.16,O
of,O
this,O
Article,O
III,O
of,O
these,O
Bylaws,O
.,O
,O
Except,O
as,O
otherwise,O
provided,O
for,O
or,O
fixed,O
by,O
or,O
pursuant,O
to,O
the,O
provisions,O
of,O
Article,O
IV,O
of,O
the,O
Certificate,O
of,O
Incorporation,O
relating,O
to,O
the,O
rights,O
of,O
the,O
holders,O
of,O
any,O
class,O
or,O
series,O
of,O
stock,O
having,O
a,O
preference,O
over,O
the,O
Common,O
Stock,O
as,O
to,O
dividends,O
or,O
upon,O
liquidation,O
to,O
elect,O
directors,O
under,O
specified,O
circumstances,O
",",O
newly,O
created,O
directorships,O
resulting,O
from,O
any,O
increase,O
in,O
the,O
number,O
of,O
directors,O
and,O
any,O
vacancies,O
on,O
the,O
board,O
of,O
directors,O
resulting,O
from,O
death,O
",",O
resignation,O
",",O
disqualification,O
",",O
removal,O
or,O
other,O
cause,O
shall,O
be,O
filled,O
by,O
the,O
affirmative,O
vote,O
of,O
a,O
majority,O
of,O
the,O
remaining,O
directors,O
then,O
in,O
office,O
",",O
even,O
though,O
less,O
than,O
a,O
quorum,O
of,O
the,O
board,O
of,O
directors,O
.,O
,O
Any,O
director,O
elected,O
in,O
accordance,O
with,O
the,O
preceding,O
sentence,O
shall,O
hold,O
office,O
until,O
the,O
next,O
annual,O
meeting,O
of,O
the,O
stockholders,O
of,O
the,O
Corporation,O
and,O
until,O
such,O
director,O
’,O
s,O
successor,O
shall,O
have,O
been,O
duly,O
elected,O
and,O
qualified,O
.,O
,O
No,O
decrease,O
in,O
the,O
number,O
of,O
directors,O
constituting,O
the,O
board,O
of,O
directors,O
shall,O
shorten,O
the,O
term,O
of,O
any,O
incumbent,O
director,O
.,O
,O
Subject,O
to,O
the,O
rights,O
of,O
any,O
class,O
or,O
series,O
of,O
stock,O
having,O
a,O
preference,O
over,O
the,O
Common,O
Stock,O
as,O
to,O
dividends,O
or,O
upon,O
liquidation,O
to,O
elect,O
directors,O
under,O
specified,O
circumstances,O
",",O
any,O
director,O
may,O
be,O
removed,O
from,O
office,O
",",O
with,O
or,O
without,O
cause,O
",",O
only,O
by,O
the,O
affirmative,O
vote,O
of,O
the,O
holders,O
of,O
at,O
least,O
sixty-six,O
and,O
two-thirds,O
percent,O
(,O
66-2/3,O
%,O
),O
of,O
the,O
voting,O
power,O
of,O
all,O
the,O
shares,O
of,O
the,O
Corporation,O
entitled,O
to,O
vote,O
generally,O
in,O
the,O
election,O
of,O
directors,O
",",O
voting,O
together,O
as,O
a,O
single,O
class,O
.,O
,O
The,O
board,O
of,O
directors,O
shall,O
choose,O
from,O
among,O
the,O
directors,O
a,O
Chairperson,O
of,O
the,O
Board,O
and,O
a,O
Vice-Chairperson,O
of,O
the,O
Board,O
.,O
,O
Unless,O
otherwise,O
provided,O
in,O
the,O
resolution,O
choosing,O
him,O
or,O
her,O
",",O
the,O
Chairperson,O
of,O
the,O
Board,O
and,O
the,O
Vice-Chairperson,O
of,O
the,O
Board,O
shall,O
be,O
chosen,O
for,O
a,O
term,O
that,O
shall,O
continue,O
until,O
the,O
meeting,O
of,O
the,O
board,O
of,O
directors,O
following,O
the,O
next,O
annual,O
meeting,O
of,O
stockholders,O
and,O
until,O
his,O
or,O
her,O
successor,O
shall,O
have,O
been,O
chosen,O
and,O
qualified,O
.,O
,O
The,O
Chairperson,O
of,O
the,O
Board,O
shall,O
preside,O
at,O
all,O
meetings,O
of,O
stockholders,O
and,O
directors,O
.,O
,O
The,O
Vice-Chairperson,O
of,O
the,O
Board,O
shall,O
preside,O
at,O
meetings,O
of,O
stockholders,O
and,O
directors,O
if,O
the,O
Chairperson,O
of,O
the,O
Board,O
is,O
absent,O
or,O
unable,O
to,O
serve,O
as,O
chairperson,O
at,O
any,O
such,O
meeting,O
.,O
,O
Meetings,O
shall,O
be,O
held,O
at,O
such,O
time,O
as,O
the,O
board,O
of,O
directors,O
shall,O
fix,O
",",O
except,O
that,O
the,O
first,O
meeting,O
of,O
a,O
newly,O
elected,O
board,O
of,O
directors,O
shall,O
be,O
held,O
as,O
soon,O
after,O
its,O
election,O
as,O
the,O
directors,O
may,O
conveniently,O
assemble,O
.,O
,O
Meetings,O
shall,O
be,O
held,O
at,O
such,O
place,O
within,O
or,O
without,O
the,O
State,I-LOCATION
of,I-LOCATION
Delaware,I-LOCATION
as,O
shall,O
be,O
fixed,O
by,O
the,O
board,O
of,O
directors,O
.,O
,O
No,O
call,O
shall,O
be,O
required,O
for,O
regular,O
meetings,O
for,O
which,O
the,O
time,O
and,O
place,O
have,O
been,O
fixed,O
.,O
,O
Special,O
meetings,O
may,O
be,O
called,O
by,O
or,O
at,O
the,O
direction,O
of,O
the,O
Chairperson,O
of,O
the,O
Board,O
",",O
if,O
any,O
",",O
the,O
Vice-Chairperson,O
of,O
the,O
Board,O
",",O
if,O
any,O
",",O
of,O
the,O
President,O
",",O
or,O
of,O
the,O
Secretary,O
on,O
the,O
written,O
request,O
of,O
any,O
two,O
directors,O
.,O
,O
Notice,O
of,O
special,O
meetings,O
stating,O
the,O
place,O
",",O
date,O
and,O
hour,O
of,O
the,O
meeting,O
shall,O
be,O
given,O
to,O
each,O
director,O
either,O
by,O
mail,O
not,O
less,O
than,O
forty-eight,O
(,O
48,O
),O
hours,O
before,O
the,O
date,O
of,O
the,O
meeting,O
",",O
by,O
telephone,O
or,O
telegraph,O
upon,O
not,O
less,O
than,O
twenty-four,O
(,O
24,O
),O
hours,O
’,O
notice,O
before,O
the,O
date,O
of,O
the,O
meeting,O
",",O
or,O
on,O
such,O
shorter,O
notice,O
as,O
the,O
person,O
or,O
persons,O
calling,O
such,O
meeting,O
may,O
deem,O
necessary,O
or,O
appropriate,O
in,O
the,O
circumstances,O
.,O
,O
No,O
notice,O
shall,O
be,O
required,O
for,O
regular,O
meetings,O
for,O
which,O
the,O
time,O
and,O
place,O
have,O
been,O
fixed,O
.,O
,O
Notice,O
need,O
not,O
be,O
given,O
to,O
any,O
director,O
or,O
to,O
any,O
member,O
of,O
a,O
committee,O
of,O
directors,O
who,O
submits,O
a,O
written,O
waiver,O
of,O
notice,O
signed,O
by,O
him,O
before,O
or,O
after,O
the,O
time,O
stated,O
therein,O
.,O
,O
Attendance,O
of,O
any,O
such,O
person,O
at,O
a,O
meeting,O
shall,O
constitute,O
a,O
waiver,O
of,O
notice,O
of,O
such,O
meeting,O
",",O
except,O
when,O
he,O
attends,O
a,O
meeting,O
for,O
the,O
express,O
purpose,O
of,O
objecting,O
",",O
at,O
the,O
beginning,O
of,O
the,O
meeting,O
",",O
to,O
the,O
transaction,O
of,O
any,O
business,O
because,O
the,O
meeting,O
is,O
not,O
lawfully,O
called,O
or,O
convened,O
.,O
,O
Neither,O
the,O
business,O
to,O
be,O
transacted,O
at,O
",",O
nor,O
the,O
purpose,O
of,O
",",O
any,O
regular,O
or,O
special,O
meeting,O
of,O
the,O
directors,O
need,O
be,O
specified,O
in,O
any,O
notice,O
or,O
written,O
waiver,O
of,O
notice,O
.,O
,O
A,O
majority,O
of,O
the,O
whole,O
board,O
of,O
directors,O
shall,O
constitute,O
a,O
quorum,O
except,O
when,O
a,O
vacancy,O
or,O
vacancies,O
prevents,O
such,O
majority,O
",",O
whereupon,O
a,O
majority,O
of,O
the,O
directors,O
in,O
office,O
shall,O
constitute,O
a,O
quorum,O
",",O
provided,O
that,O
such,O
majority,O
shall,O
constitute,O
at,O
least,O
one,O
third,O
of,O
the,O
whole,O
board,O
of,O
directors,O
.,O
,O
A,O
majority,O
of,O
the,O
directors,O
present,O
",",O
whether,O
or,O
not,O
a,O
quorum,O
is,O
present,O
",",O
may,O
adjourn,O
a,O
meeting,O
to,O
another,O
time,O
and,O
place,O
.,O
,O
Except,O
as,O
otherwise,O
specifically,O
provided,O
herein,O
or,O
in,O
the,O
Certificate,O
of,O
Incorporation,O
",",O
and,O
except,O
as,O
otherwise,O
provided,O
by,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
",",O
the,O
vote,O
of,O
the,O
majority,O
of,O
the,O
directors,O
present,O
at,O
a,O
meeting,O
at,O
which,O
a,O
quorum,O
is,O
present,O
shall,O
be,O
the,O
act,O
of,O
the,O
board,O
of,O
directors,O
.,O
,O
The,O
quorum,O
and,O
voting,O
provisions,O
herein,O
stated,O
shall,O
not,O
be,O
construed,O
as,O
conflicting,O
with,O
any,O
provisions,O
of,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
or,O
these,O
Bylaws,O
which,O
govern,O
a,O
meeting,O
of,O
directors,O
held,O
to,O
fill,O
vacancies,O
and,O
newly,O
created,O
directorships,O
in,O
the,O
board,O
of,O
directors,O
or,O
action,O
of,O
disinterested,O
directors,O
.,O
,O
Any,O
member,O
or,O
members,O
of,O
the,O
board,O
of,O
directors,O
",",O
or,O
of,O
any,O
committee,O
designated,O
by,O
the,O
board,O
of,O
directors,O
",",O
may,O
participate,O
in,O
a,O
meeting,O
of,O
the,O
board,O
of,O
directors,O
",",O
or,O
any,O
such,O
committee,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
by,O
means,O
of,O
conference,O
telephone,O
or,O
similar,O
communications,O
equipment,O
by,O
means,O
of,O
which,O
all,O
persons,O
participating,O
in,O
the,O
meeting,O
can,O
hear,O
each,O
other,O
.,O
,O
The,O
Chairperson,O
of,O
the,O
Board,O
",",O
if,O
any,O
and,O
if,O
present,O
and,O
acting,O
",",O
shall,O
preside,O
at,O
all,O
meetings,O
.,O
,O
Otherwise,O
",",O
the,O
Vice-Chairperson,O
of,O
the,O
Board,O
",",O
if,O
any,O
and,O
if,O
present,O
and,O
acting,O
",",O
or,O
the,O
President,O
",",O
if,O
present,O
and,O
acting,O
",",O
or,O
any,O
other,O
director,O
chosen,O
by,O
the,O
board,O
of,O
directors,O
",",O
shall,O
preside,O
.,O
,O
Any,O
action,O
required,O
or,O
permitted,O
to,O
be,O
taken,O
at,O
any,O
meeting,O
of,O
the,O
board,O
of,O
directors,O
or,O
any,O
committee,O
thereof,O
may,O
be,O
taken,O
without,O
a,O
meeting,O
if,O
all,O
members,O
of,O
the,O
board,O
or,O
committee,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
consent,O
thereto,O
in,O
writing,O
",",O
and,O
the,O
writing,O
or,O
writings,O
are,O
filed,O
with,O
the,O
minutes,O
of,O
proceedings,O
of,O
the,O
board,O
or,O
committee,O
.,O
,O
The,O
board,O
of,O
directors,O
may,O
",",O
by,O
resolution,O
passed,O
by,O
a,O
majority,O
of,O
the,O
whole,O
board,O
of,O
directors,O
",",O
designate,O
one,O
or,O
more,O
committees,O
",",O
each,O
committee,O
to,O
consist,O
of,O
one,O
or,O
more,O
of,O
the,O
directors,O
of,O
the,O
Corporation,O
.,O
,O
The,O
board,O
of,O
directors,O
may,O
designate,O
one,O
or,O
more,O
directors,O
as,O
alternate,O
members,O
of,O
any,O
committee,O
",",O
who,O
may,O
replace,O
any,O
absent,O
or,O
disqualified,O
member,O
at,O
any,O
meeting,O
of,O
the,O
committee,O
.,O
,O
In,O
the,O
absence,O
or,O
disqualification,O
of,O
any,O
member,O
of,O
any,O
such,O
committee,O
or,O
committees,O
",",O
the,O
member,O
or,O
members,O
thereof,O
present,O
at,O
any,O
meeting,O
and,O
not,O
disqualified,O
from,O
voting,O
",",O
whether,O
or,O
not,O
he,O
",",O
she,O
or,O
they,O
constitute,O
a,O
quorum,O
",",O
may,O
unanimously,O
appoint,O
another,O
member,O
of,O
the,O
board,O
of,O
directors,O
to,O
act,O
at,O
the,O
meeting,O
in,O
the,O
place,O
of,O
any,O
such,O
absent,O
or,O
disqualified,O
member,O
.,O
,O
Any,O
such,O
committee,O
",",O
to,O
the,O
extent,O
provided,O
in,O
the,O
resolution,O
of,O
the,O
board,O
of,O
directors,O
",",O
shall,O
have,O
and,O
may,O
exercise,O
the,O
powers,O
and,O
authority,O
of,O
the,O
board,O
of,O
directors,O
in,O
the,O
management,O
of,O
the,O
business,O
and,O
affairs,O
of,O
the,O
Corporation,O
with,O
the,O
exception,O
of,O
any,O
authority,O
the,O
delegation,O
of,O
which,O
is,O
prohibited,O
by,O
Section,O
141,O
of,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
",",O
and,O
may,O
authorize,O
the,O
seal,O
of,O
the,O
Corporation,O
to,O
be,O
affixed,O
to,O
all,O
papers,O
that,O
may,O
require,O
it,O
.,O
,O
The,O
directors,O
may,O
be,O
paid,O
their,O
expenses,O
",",O
if,O
any,O
",",O
of,O
attendance,O
at,O
each,O
meeting,O
of,O
the,O
board,O
of,O
directors,O
and,O
may,O
be,O
paid,O
a,O
fixed,O
sum,O
for,O
attendance,O
at,O
each,O
meeting,O
of,O
the,O
board,O
of,O
directors,O
and/or,O
a,O
stated,O
salary,O
or,O
other,O
compensation,O
as,O
director,O
.,O
,O
No,O
such,O
payment,O
shall,O
preclude,O
any,O
director,O
from,O
serving,O
the,O
Corporation,O
in,O
any,O
other,O
capacity,O
and,O
receiving,O
compensation,O
therefor,O
.,O
,O
Members,O
of,O
special,O
or,O
standing,O
committees,O
may,O
be,O
allowed,O
like,O
compensation,O
for,O
attending,O
committee,O
meetings,O
.,O
,O
Subject,O
to,O
the,O
rights,O
of,O
holders,O
of,O
any,O
class,O
or,O
series,O
of,O
stock,O
having,O
a,O
preference,O
over,O
the,O
Common,O
Stock,O
as,O
to,O
dividends,O
or,O
upon,O
liquidation,O
",",O
nominations,O
for,O
the,O
election,O
of,O
directors,O
may,O
be,O
made,O
by,O
the,O
board,O
of,O
directors,O
or,O
a,O
proxy,O
committee,O
appointed,O
by,O
the,O
board,O
of,O
directors,O
or,O
by,O
any,O
stockholder,O
of,O
record,O
entitled,O
to,O
vote,O
in,O
the,O
election,O
of,O
directors,O
.,O
,O
However,O
",",O
any,O
stockholder,O
of,O
record,O
entitled,O
to,O
vote,O
in,O
the,O
election,O
of,O
directors,O
may,O
nominate,O
directors,O
only,O
if,O
written,O
notice,O
of,O
such,O
stockholder,O
’,O
s,O
intent,O
to,O
make,O
such,O
nomination,O
or,O
nominations,O
has,O
been,O
given,O
",",O
either,O
by,O
personal,O
delivery,O
or,O
by,O
United,I-LOCATION
States,I-LOCATION
mail,O
",",O
postage,O
prepaid,O
",",O
to,O
the,O
Secretary,O
of,O
the,O
Corporation,O
at,O
the,O
principal,O
office,O
of,O
the,O
Corporation,O
(,O
i,O
),O
with,O
respect,O
to,O
an,O
election,O
to,O
be,O
held,O
at,O
an,O
annual,O
meeting,O
of,O
stockholders,O
",",O
not,O
less,O
than,O
90,O
days,O
nor,O
more,O
than,O
120,O
days,O
prior,O
to,O
the,O
first,O
anniversary,O
of,O
the,O
preceding,O
year,O
’,O
s,O
annual,O
meeting,O
;,O
provided,O
",",O
however,O
",",O
that,O
in,O
the,O
event,O
that,O
the,O
date,O
of,O
the,O
annual,O
meeting,O
is,O
advanced,O
by,O
more,O
than,O
30,O
days,O
or,O
delayed,O
by,O
more,O
than,O
60,O
days,O
from,O
such,O
anniversary,O
date,O
",",O
notice,O
by,O
the,O
stockholder,O
must,O
be,O
so,O
delivered,O
not,O
earlier,O
than,O
the,O
120th,O
day,O
prior,O
to,O
such,O
annual,O
meeting,O
and,O
not,O
later,O
than,O
the,O
close,O
of,O
business,O
on,O
the,O
later,O
of,O
the,O
90th,O
day,O
prior,O
to,O
such,O
annual,O
meeting,O
or,O
the,O
tenth,O
day,O
following,O
the,O
day,O
on,O
which,O
public,O
announcement,O
of,O
the,O
date,O
of,O
such,O
meeting,O
is,O
first,O
made,O
",",O
and,O
(,O
ii,O
),O
with,O
respect,O
to,O
an,O
election,O
to,O
be,O
held,O
at,O
a,O
special,O
meeting,O
of,O
stockholders,O
called,O
for,O
the,O
purpose,O
of,O
electing,O
directors,O
",",O
the,O
close,O
of,O
business,O
on,O
the,O
seventh,O
day,O
following,O
the,O
date,O
on,O
which,O
public,O
announcement,O
of,O
the,O
date,O
of,O
such,O
meeting,O
is,O
first,O
made,O
.,O
,O
Each,O
such,O
notice,O
shall,O
set,O
forth,O
(,O
a,O
),O
the,O
name,O
and,O
address,O
of,O
the,O
stockholder,O
who,O
intends,O
to,O
make,O
the,O
nomination,O
",",O
of,O
the,O
beneficial,O
owner,O
",",O
if,O
any,O
",",O
on,O
whose,O
behalf,O
the,O
nomination,O
is,O
made,O
and,O
of,O
the,O
person,O
or,O
persons,O
to,O
be,O
nominated,O
;,O
(,O
b,O
),O
the,O
class,O
and,O
number,O
of,O
shares,O
of,O
stock,O
of,O
the,O
Corporation,O
which,O
are,O
owned,O
beneficially,O
and,O
of,O
record,O
by,O
such,O
stockholder,O
and,O
such,O
beneficial,O
owner,O
;,O
(,O
c,O
),O
a,O
representation,O
that,O
the,O
stockholder,O
is,O
a,O
holder,O
of,O
record,O
of,O
stock,O
of,O
the,O
Corporation,O
and,O
intends,O
to,O
appear,O
in,O
person,O
or,O
by,O
proxy,O
at,O
the,O
meeting,O
to,O
nominate,O
the,O
person,O
or,O
persons,O
specified,O
in,O
the,O
notice,O
;,O
(,O
d,O
),O
a,O
description,O
of,O
all,O
arrangements,O
or,O
understandings,O
between,O
the,O
stockholder,O
and,O
each,O
nominee,O
and,O
any,O
other,O
person,O
or,O
person,O
(,O
naming,O
such,O
person,O
or,O
persons,O
),O
pursuant,O
to,O
which,O
the,O
nomination,O
or,O
nominations,O
are,O
to,O
be,O
made,O
by,O
the,O
stockholder,O
;,O
(,O
e,O
),O
such,O
other,O
information,O
regarding,O
each,O
nominee,O
proposed,O
by,O
such,O
stockholder,O
as,O
would,O
be,O
required,O
to,O
be,O
included,O
in,O
a,O
proxy,O
statement,O
filed,O
pursuant,O
to,O
the,O
proxy,O
rules,O
of,O
the,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
",",O
had,O
the,O
nominee,O
been,O
nominated,O
or,O
intended,O
to,O
be,O
nominated,O
",",O
by,O
the,O
board,O
of,O
directors,O
;,O
and,O
(,O
f,O
),O
the,O
written,O
consent,O
of,O
each,O
nominee,O
to,O
serve,O
as,O
a,O
director,O
of,O
the,O
Corporation,O
if,O
so,O
elected,O
.,O
,O
The,O
chairperson,O
of,O
the,O
meeting,O
may,O
refuse,O
to,O
acknowledge,O
the,O
nomination,O
of,O
any,O
person,O
not,O
made,O
in,O
compliance,O
with,O
the,O
foregoing,O
procedure,O
.,O
,O
Any,O
stockholder,O
of,O
record,O
entitled,O
to,O
vote,O
in,O
the,O
election,O
of,O
directors,O
may,O
submit,O
proposals,O
for,O
business,O
to,O
be,O
considered,O
by,O
the,O
stockholders,O
of,O
the,O
Corporation,O
at,O
any,O
meeting,O
of,O
stockholders,O
if,O
written,O
notice,O
of,O
such,O
stockholder,O
’,O
s,O
intent,O
to,O
submit,O
such,O
proposal,O
or,O
proposals,O
has,O
been,O
given,O
",",O
either,O
by,O
personal,O
delivery,O
or,O
by,O
United,I-LOCATION
States,I-LOCATION
mail,O
",",O
postage,O
prepaid,O
",",O
to,O
the,O
Secretary,O
of,O
the,O
Corporation,O
at,O
the,O
principal,O
office,O
of,O
the,O
Corporation,O
(,O
i,O
),O
with,O
respect,O
to,O
any,O
proposal,O
to,O
be,O
introduced,O
at,O
an,O
annual,O
meeting,O
of,O
stockholders,O
",",O
not,O
less,O
than,O
90,O
days,O
nor,O
more,O
than,O
120,O
days,O
prior,O
to,O
the,O
first,O
anniversary,O
of,O
the,O
preceding,O
year,O
’,O
s,O
annual,O
meeting,O
;,O
provided,O
",",O
however,O
",",O
that,O
in,O
the,O
event,O
that,O
the,O
date,O
of,O
the,O
annual,O
meeting,O
is,O
advanced,O
by,O
more,O
than,O
30,O
days,O
or,O
delayed,O
by,O
more,O
than,O
60,O
days,O
from,O
such,O
anniversary,O
date,O
",",O
notice,O
by,O
the,O
stockholder,O
must,O
be,O
so,O
delivered,O
not,O
earlier,O
than,O
the,O
120th,O
day,O
prior,O
to,O
such,O
annual,O
meeting,O
and,O
not,O
later,O
than,O
the,O
close,O
of,O
business,O
on,O
the,O
later,O
of,O
the,O
90th,O
day,O
prior,O
to,O
such,O
annual,O
meeting,O
or,O
the,O
tenth,O
day,O
following,O
the,O
day,O
on,O
which,O
public,O
announcement,O
of,O
the,O
date,O
of,O
such,O
meeting,O
is,O
first,O
made,O
",",O
and,O
(,O
ii,O
),O
with,O
respect,O
to,O
any,O
proposal,O
to,O
be,O
introduced,O
at,O
a,O
special,O
meeting,O
of,O
stockholders,O
",",O
the,O
close,O
of,O
business,O
on,O
the,O
seventh,O
day,O
following,O
the,O
date,O
on,O
which,O
public,O
announcement,O
of,O
the,O
date,O
of,O
such,O
meeting,O
is,O
first,O
made,O
.,O
,O
Each,O
such,O
notice,O
shall,O
set,O
forth,O
(,O
a,O
),O
the,O
name,O
and,O
address,O
of,O
the,O
stockholder,O
who,O
intends,O
to,O
introduce,O
the,O
proposal,O
and,O
of,O
the,O
beneficial,O
owner,O
",",O
if,O
any,O
",",O
on,O
whose,O
behalf,O
the,O
proposal,O
is,O
to,O
be,O
introduced,O
;,O
(,O
b,O
),O
the,O
text,O
of,O
the,O
proposal,O
to,O
be,O
introduced,O
(,O
including,O
the,O
text,O
of,O
any,O
resolutions,O
proposed,O
for,O
consideration,O
and,O
in,O
the,O
event,O
such,O
proposal,O
is,O
to,O
amend,O
these,O
Bylaws,O
",",O
the,O
text,O
of,O
the,O
proposed,O
amendment,O
),O
",",O
the,O
reasons,O
for,O
introducing,O
the,O
proposal,O
at,O
the,O
meeting,O
and,O
any,O
material,O
interest,O
of,O
the,O
stockholder,O
in,O
the,O
proposal,O
;,O
(,O
c,O
),O
the,O
class,O
and,O
number,O
of,O
shares,O
of,O
stock,O
of,O
the,O
Corporation,O
which,O
are,O
owned,O
beneficially,O
and,O
of,O
record,O
by,O
such,O
stockholder,O
and,O
such,O
beneficial,O
owner,O
;,O
and,O
(,O
d,O
),O
a,O
representation,O
that,O
the,O
stockholder,O
is,O
a,O
holder,O
of,O
record,O
of,O
stock,O
of,O
the,O
Corporation,O
and,O
intends,O
to,O
appear,O
in,O
person,O
or,O
by,O
proxy,O
at,O
the,O
meeting,O
to,O
introduce,O
the,O
proposal,O
or,O
proposals,O
specified,O
in,O
the,O
notice,O
.,O
,O
The,O
chairperson,O
of,O
the,O
meeting,O
may,O
refuse,O
to,O
acknowledge,O
the,O
introduction,O
of,O
any,O
stockholder,O
proposal,O
not,O
made,O
in,O
compliance,O
with,O
the,O
foregoing,O
procedure,O
.,O
,O
Whenever,O
",",O
under,O
the,O
provisions,O
of,O
the,O
statutes,O
or,O
of,O
the,O
Certificate,O
of,O
Incorporation,O
or,O
of,O
these,O
Bylaws,O
",",O
notice,O
is,O
required,O
to,O
be,O
given,O
to,O
any,O
director,O
or,O
stockholder,O
",",O
it,O
shall,O
not,O
be,O
construed,O
to,O
mean,O
personal,O
notice,O
",",O
but,O
such,O
notice,O
may,O
be,O
given,O
in,O
writing,O
",",O
by,O
mail,O
",",O
addressed,O
to,O
such,O
director,O
or,O
stockholder,O
",",O
at,O
his,O
address,O
as,O
it,O
appears,O
on,O
the,O
records,O
of,O
the,O
Corporation,O
",",O
with,O
postage,O
thereon,O
prepaid,O
",",O
and,O
such,O
notice,O
shall,O
be,O
deemed,O
to,O
be,O
given,O
at,O
the,O
time,O
when,O
the,O
same,O
shall,O
be,O
deposited,O
in,O
the,O
United,I-LOCATION
States,I-LOCATION
mail,O
.,O
,O
Notice,O
to,O
directors,O
may,O
also,O
be,O
given,O
by,O
telegram,O
",",O
facsimile,O
or,O
electronic,O
mail,O
.,O
,O
Whenever,O
any,O
notice,O
is,O
required,O
to,O
be,O
given,O
under,O
the,O
provisions,O
of,O
the,O
statutes,O
or,O
of,O
the,O
Certificate,O
of,O
Incorporation,O
or,O
of,O
these,O
Bylaws,O
",",O
a,O
waiver,O
thereof,O
in,O
writing,O
",",O
signed,O
by,O
the,O
person,O
or,O
persons,O
entitled,O
to,O
said,O
notice,O
",",O
whether,O
before,O
or,O
after,O
the,O
time,O
stated,O
therein,O
",",O
shall,O
be,O
deemed,O
equivalent,O
thereto,O
.,O
,O
The,O
officers,O
of,O
the,O
Corporation,O
shall,O
consist,O
of,O
a,O
Chief,O
Executive,O
Officer,O
",",O
a,O
President,O
",",O
a,O
Secretary,O
",",O
a,O
Treasurer,O
",",O
and,O
",",O
if,O
deemed,O
necessary,O
",",O
expedient,O
or,O
desirable,O
by,O
the,O
board,O
of,O
directors,O
",",O
an,O
Executive,O
Vice,O
President,O
",",O
one,O
or,O
more,O
other,O
Vice,O
Presidents,O
",",O
one,O
or,O
more,O
Assistant,O
Secretaries,O
",",O
one,O
or,O
more,O
Assistant,O
Treasurers,O
",",O
and,O
such,O
other,O
officers,O
with,O
such,O
titles,O
as,O
the,O
resolution,O
of,O
the,O
board,O
of,O
directors,O
choosing,O
them,O
shall,O
designate,O
.,O
,O
Any,O
number,O
of,O
offices,O
may,O
be,O
held,O
by,O
the,O
same,O
person,O
",",O
as,O
the,O
directors,O
may,O
determine,O
.,O
,O
Unless,O
otherwise,O
provided,O
in,O
the,O
resolution,O
choosing,O
him,O
or,O
her,O
",",O
each,O
officer,O
shall,O
be,O
chosen,O
for,O
a,O
term,O
that,O
shall,O
continue,O
until,O
the,O
meeting,O
of,O
the,O
board,O
of,O
directors,O
following,O
the,O
next,O
annual,O
meeting,O
of,O
stockholders,O
and,O
until,O
his,O
or,O
her,O
successor,O
shall,O
have,O
been,O
chosen,O
and,O
qualified,O
.,O
,O
All,O
officers,O
of,O
the,O
Corporation,O
shall,O
have,O
such,O
authority,O
and,O
perform,O
such,O
duties,O
in,O
the,O
management,O
and,O
operation,O
of,O
the,O
Corporation,O
as,O
shall,O
be,O
prescribed,O
in,O
the,O
resolutions,O
of,O
the,O
board,O
of,O
directors,O
designating,O
and,O
choosing,O
such,O
officers,O
and,O
prescribing,O
their,O
authority,O
and,O
duties,O
",",O
and,O
shall,O
have,O
such,O
additional,O
authority,O
and,O
duties,O
as,O
are,O
incident,O
to,O
their,O
office,O
except,O
to,O
the,O
extent,O
that,O
such,O
resolutions,O
may,O
be,O
inconsistent,O
therewith,O
.,O
,O
The,O
Secretary,O
or,O
an,O
Assistant,O
Secretary,O
of,O
the,O
Corporation,O
shall,O
record,O
all,O
of,O
the,O
proceedings,O
of,O
all,O
meetings,O
and,O
actions,O
in,O
writing,O
of,O
stockholders,O
",",O
directors,O
and,O
committees,O
of,O
directors,O
",",O
and,O
shall,O
exercise,O
such,O
additional,O
authority,O
and,O
perform,O
such,O
additional,O
duties,O
as,O
the,O
board,O
of,O
directors,O
shall,O
assign,O
to,O
him,O
or,O
her,O
.,O
,O
Any,O
officer,O
may,O
be,O
removed,O
",",O
with,O
or,O
without,O
cause,O
",",O
by,O
the,O
board,O
of,O
directors,O
.,O
,O
Any,O
vacancy,O
in,O
any,O
office,O
may,O
be,O
filled,O
by,O
the,O
board,O
of,O
directors,O
.,O
,O
The,O
Chief,O
Executive,O
Officer,O
shall,O
be,O
the,O
head,O
of,O
the,O
Corporation,O
and,O
shall,O
have,O
general,O
and,O
active,O
supervision,O
of,O
the,O
business,O
of,O
the,O
Corporation,O
and,O
shall,O
see,O
that,O
all,O
orders,O
and,O
resolutions,O
of,O
the,O
board,O
of,O
directors,O
are,O
carried,O
into,O
effect,O
and,O
shall,O
be,O
responsible,O
to,O
the,O
board,O
of,O
directors,O
for,O
the,O
execution,O
of,O
such,O
duties,O
and,O
powers,O
.,O
,O
The,O
Chief,O
Executive,O
Officer,O
shall,O
",",O
in,O
the,O
absence,O
or,O
inability,O
to,O
act,O
of,O
the,O
Chairperson,O
of,O
the,O
Board,O
and,O
Vice-Chairperson,O
of,O
the,O
Board,O
",",O
assume,O
and,O
carry,O
out,O
all,O
responsibilities,O
set,O
forth,O
with,O
respect,O
to,O
such,O
Chairperson,O
of,O
the,O
Board,O
and,O
Vice-Chairperson,O
of,O
the,O
Board,O
.,O
,O
The,O
President,O
shall,O
be,O
the,O
chief,O
operating,O
officer,O
of,O
the,O
Corporation,O
.,O
,O
The,O
President,O
shall,O
",",O
in,O
the,O
absence,O
or,O
inability,O
to,O
act,O
of,O
the,O
Chief,O
Executive,O
Officer,O
",",O
assume,O
and,O
carry,O
out,O
all,O
responsibilities,O
set,O
forth,O
with,O
respect,O
to,O
such,O
Chief,O
Executive,O
Officer,O
.,O
,O
The,O
Chief,O
Executive,O
Officer,O
or,O
the,O
President,O
shall,O
execute,O
bonds,O
",",O
mortgages,O
and,O
other,O
contracts,O
requiring,O
a,O
seal,O
",",O
under,O
the,O
seal,O
of,O
the,O
Corporation,O
",",O
except,O
where,O
required,O
or,O
permitted,O
by,O
law,O
to,O
be,O
otherwise,O
signed,O
and,O
executed,O
and,O
except,O
where,O
the,O
signing,O
and,O
execution,O
thereof,O
shall,O
be,O
expressly,O
delegated,O
by,O
the,O
board,O
of,O
directors,O
to,O
some,O
other,O
officer,O
or,O
agent,O
of,O
the,O
Corporation,O
.,O
,O
Executive,O
Vice,O
Presidents,O
",",O
Senior,O
Vice,O
Presidents,O
",",O
Vice,O
Presidents,O
and,O
Assistant,O
Vice,O
Presidents,O
shall,O
have,O
duties,O
and,O
powers,O
as,O
the,O
board,O
of,O
directors,O
may,O
designate,O
.,O
,O
The,O
Secretary,O
shall,O
attend,O
all,O
meetings,O
of,O
the,O
board,O
of,O
directors,O
and,O
all,O
meetings,O
of,O
the,O
stockholders,O
and,O
record,O
all,O
the,O
proceedings,O
of,O
the,O
meetings,O
of,O
the,O
Corporation,O
and,O
of,O
the,O
board,O
of,O
directors,O
in,O
a,O
book,O
to,O
be,O
kept,O
for,O
that,O
purpose,O
and,O
shall,O
perform,O
like,O
duties,O
for,O
the,O
standing,O
committees,O
when,O
required,O
.,O
,O
The,O
Secretary,O
shall,O
give,O
",",O
or,O
cause,O
to,O
be,O
given,O
",",O
notice,O
of,O
all,O
meetings,O
of,O
the,O
stockholders,O
and,O
special,O
meetings,O
of,O
the,O
board,O
of,O
directors,O
",",O
and,O
shall,O
perform,O
such,O
other,O
duties,O
as,O
may,O
be,O
prescribed,O
by,O
the,O
board,O
of,O
directors,O
or,O
President,O
",",O
under,O
whose,O
supervision,O
the,O
Secretary,O
shall,O
be,O
.,O
,O
The,O
Secretary,O
shall,O
have,O
custody,O
of,O
the,O
corporate,O
seal,O
of,O
the,O
Corporation,O
and,O
the,O
Secretary,O
",",O
or,O
an,O
Assistant,O
Secretary,O
",",O
shall,O
have,O
authority,O
to,O
affix,O
the,O
same,O
to,O
any,O
instrument,O
requiring,O
it,O
",",O
and,O
when,O
so,O
affixed,O
",",O
it,O
may,O
be,O
attested,O
by,O
his,O
or,O
her,O
signature,O
or,O
by,O
the,O
signature,O
of,O
such,O
assistant,O
.,O
,O
The,O
board,O
of,O
directors,O
may,O
give,O
general,O
authority,O
to,O
any,O
other,O
officer,O
to,O
affix,O
the,O
seal,O
of,O
the,O
Corporation,O
and,O
to,O
attest,O
the,O
affixing,O
by,O
his,O
or,O
her,O
signature,O
.,O
,O
The,O
Assistant,O
Secretary,O
",",O
or,O
if,O
there,O
be,O
more,O
than,O
one,O
",",O
the,O
Assistant,O
Secretaries,O
in,O
the,O
order,O
determined,O
by,O
the,O
board,O
of,O
directors,O
",",O
shall,O
",",O
in,O
the,O
absence,O
or,O
disability,O
of,O
the,O
Secretary,O
",",O
perform,O
the,O
duties,O
and,O
exercise,O
the,O
powers,O
of,O
the,O
Secretary,O
and,O
shall,O
perform,O
such,O
other,O
duties,O
and,O
have,O
such,O
other,O
powers,O
as,O
the,O
board,O
of,O
directors,O
may,O
from,O
time,O
to,O
time,O
prescribe,O
.,O
,O
The,O
Treasurer,O
shall,O
have,O
the,O
custody,O
of,O
the,O
corporate,O
funds,O
and,O
securities,O
and,O
shall,O
deposit,O
all,O
monies,O
and,O
other,O
valuable,O
effects,O
in,O
the,O
name,O
and,O
to,O
the,O
credit,O
of,O
the,O
Corporation,O
in,O
such,O
depositories,O
as,O
may,O
be,O
designated,O
by,O
the,O
board,O
of,O
directors,O
.,O
,O
The,O
Treasurer,O
shall,O
have,O
the,O
authority,O
to,O
invest,O
the,O
normal,O
funds,O
of,O
the,O
Corporation,O
in,O
the,O
purchase,O
and,O
acquisition,O
of,O
investments,O
and,O
to,O
sell,O
and,O
otherwise,O
dispose,O
of,O
these,O
investments,O
upon,O
such,O
terms,O
as,O
the,O
Treasurer,O
may,O
deem,O
desirable,O
and,O
advantageous,O
",",O
and,O
shall,O
",",O
upon,O
request,O
",",O
render,O
to,O
the,O
President,O
and,O
the,O
directors,O
an,O
accounting,O
of,O
all,O
such,O
normal,O
investment,O
transactions,O
.,O
,O
The,O
Treasurer,O
shall,O
disburse,O
the,O
funds,O
of,O
the,O
Corporation,O
as,O
may,O
be,O
ordered,O
by,O
the,O
board,O
of,O
directors,O
",",O
taking,O
proper,O
vouchers,O
for,O
such,O
disbursements,O
",",O
and,O
shall,O
render,O
to,O
the,O
President,O
and,O
the,O
board,O
of,O
directors,O
",",O
at,O
its,O
regular,O
meetings,O
",",O
or,O
when,O
the,O
board,O
of,O
directors,O
so,O
requires,O
",",O
an,O
account,O
of,O
all,O
his,O
transactions,O
as,O
Treasurer,O
and,O
of,O
the,O
financial,O
condition,O
of,O
the,O
Corporation,O
.,O
,O
If,O
required,O
by,O
the,O
board,O
of,O
directors,O
",",O
the,O
Treasurer,O
shall,O
give,O
the,O
Corporation,O
a,O
bond,O
(,O
which,O
shall,O
be,O
renewed,O
every,O
six,O
years,O
),O
in,O
such,O
sum,O
and,O
with,O
such,O
surety,O
or,O
sureties,O
as,O
shall,O
be,O
satisfactory,O
to,O
the,O
board,O
of,O
directors,O
for,O
the,O
faithful,O
performance,O
of,O
the,O
duties,O
of,O
his,O
or,O
her,O
office,O
and,O
for,O
the,O
restoration,O
to,O
the,O
Corporation,O
",",O
in,O
case,O
of,O
his,O
death,O
",",O
resignation,O
",",O
retirement,O
or,O
removal,O
from,O
office,O
",",O
of,O
all,O
books,O
",",O
papers,O
",",O
vouchers,O
",",O
money,O
and,O
other,O
property,O
of,O
whatever,O
kind,O
in,O
his,O
possession,O
or,O
under,O
his,O
control,O
belonging,O
to,O
the,O
Corporation,O
.,O
,O
The,O
Assistant,O
Treasurer,O
",",O
or,O
if,O
there,O
shall,O
be,O
more,O
than,O
one,O
",",O
the,O
Assistant,O
Treasurers,O
in,O
the,O
order,O
determined,O
by,O
the,O
board,O
of,O
directors,O
",",O
shall,O
",",O
in,O
the,O
absence,O
or,O
disability,O
of,O
the,O
Treasurer,O
",",O
perform,O
the,O
duties,O
and,O
exercise,O
the,O
powers,O
of,O
the,O
Treasurer,O
and,O
shall,O
perform,O
such,O
other,O
duties,O
and,O
have,O
such,O
other,O
powers,O
as,O
the,O
board,O
of,O
directors,O
may,O
from,O
time,O
to,O
time,O
prescribe,O
.,O
,O
The,O
controller,O
shall,O
keep,O
the,O
Corporation,O
’,O
s,O
accounting,O
records,O
and,O
shall,O
prepare,O
accounting,O
reports,O
of,O
the,O
operating,O
results,O
as,O
required,O
by,O
the,O
board,O
of,O
directors,O
and,O
governmental,O
authorities,O
.,O
,O
The,O
controller,O
shall,O
establish,O
systems,O
of,O
internal,O
control,O
and,O
accounting,O
procedures,O
for,O
the,O
protection,O
of,O
the,O
Corporation,O
’,O
s,O
assets,O
and,O
funds,O
.,O
,O
Every,O
holder,O
of,O
stock,O
in,O
the,O
Corporation,O
shall,O
be,O
entitled,O
to,O
have,O
a,O
certificate,O
signed,O
by,O
",",O
or,O
in,O
the,O
name,O
of,O
the,O
Corporation,O
by,O
",",O
the,O
Chief,O
Executive,O
Officer,O
",",O
or,O
the,O
President,O
or,O
a,O
Vice,O
President,O
",",O
and,O
by,O
the,O
Secretary,O
or,O
an,O
Assistant,O
Secretary,O
",",O
or,O
by,O
the,O
Treasurer,O
or,O
an,O
Assistant,O
Treasurer,O
of,O
the,O
Corporation,O
",",O
certifying,O
the,O
number,O
of,O
shares,O
owned,O
by,O
him,O
in,O
the,O
Corporation,O
.,O
,O
All,O
certificates,O
shall,O
also,O
be,O
signed,O
by,O
a,O
transfer,O
agent,O
and,O
by,O
a,O
registrar,O
.,O
,O
All,O
signatures,O
that,O
appear,O
on,O
the,O
certificate,O
may,O
be,O
facsimile,O
including,O
",",O
without,O
limitation,O
",",O
signatures,O
of,O
officers,O
of,O
the,O
Corporation,O
or,O
the,O
signatures,O
of,O
the,O
stock,O
transfer,O
agent,O
or,O
registrar,O
.,O
,O
In,O
case,O
any,O
officer,O
",",O
transfer,O
agent,O
or,O
registrar,O
who,O
has,O
signed,O
or,O
whose,O
facsimile,O
signature,O
has,O
been,O
placed,O
upon,O
a,O
certificate,O
shall,O
have,O
ceased,O
to,O
be,O
such,O
officer,O
",",O
transfer,O
agent,O
or,O
registrar,O
before,O
such,O
certificate,O
is,O
issued,O
",",O
it,O
may,O
be,O
issued,O
by,O
the,O
Corporation,O
with,O
the,O
same,O
effect,O
as,O
if,O
such,O
person,O
were,O
such,O
officer,O
",",O
transfer,O
agent,O
or,O
registrar,O
at,O
the,O
date,O
of,O
issue,O
.,O
,O
If,O
the,O
Corporation,O
shall,O
be,O
authorized,O
to,O
issue,O
more,O
than,O
one,O
class,O
of,O
stock,O
or,O
more,O
than,O
one,O
series,O
of,O
any,O
class,O
",",O
the,O
designations,O
",",O
preferences,O
and,O
relative,O
",",O
participating,O
",",O
optional,O
or,O
other,O
special,O
rights,O
of,O
each,O
class,O
of,O
stock,O
or,O
series,O
thereof,O
and,O
the,O
qualifications,O
",",O
limitations,O
or,O
restrictions,O
of,O
such,O
preferences,O
and/or,O
rights,O
shall,O
be,O
set,O
forth,O
in,O
full,O
or,O
summarized,O
on,O
the,O
face,O
or,O
back,O
of,O
the,O
certificate,O
which,O
the,O
Corporation,O
shall,O
issue,O
to,O
represent,O
such,O
class,O
or,O
series,O
of,O
stock,O
;,O
provided,O
",",O
however,O
",",O
that,O
except,O
as,O
otherwise,O
provided,O
in,O
Section,O
202,O
of,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
",",O
in,O
lieu,O
of,O
the,O
foregoing,O
requirements,O
",",O
there,O
may,O
be,O
set,O
forth,O
on,O
the,O
face,O
or,O
back,O
of,O
the,O
certificate,O
which,O
the,O
Corporation,O
shall,O
issue,O
to,O
represent,O
such,O
class,O
or,O
series,O
of,O
stock,O
",",O
a,O
statement,O
that,O
the,O
Corporation,O
will,O
furnish,O
without,O
charge,O
",",O
to,O
each,O
stockholder,O
who,O
so,O
requests,O
",",O
the,O
designations,O
",",O
preferences,O
and,O
relative,O
",",O
participating,O
",",O
optional,O
or,O
other,O
special,O
rights,O
of,O
each,O
class,O
of,O
stock,O
or,O
series,O
thereof,O
and,O
the,O
qualifications,O
",",O
limitations,O
or,O
restrictions,O
of,O
such,O
preferences,O
and/or,O
rights,O
.,O
,O
The,O
board,O
of,O
directors,O
may,O
direct,O
a,O
new,O
certificate,O
or,O
certificates,O
to,O
be,O
issued,O
in,O
place,O
of,O
any,O
certificate,O
or,O
certificates,O
theretofore,O
issued,O
by,O
the,O
Corporation,O
alleged,O
to,O
have,O
been,O
lost,O
",",O
stolen,O
or,O
destroyed,O
",",O
upon,O
the,O
making,O
of,O
an,O
affidavit,O
of,O
that,O
fact,O
by,O
the,O
person,O
claiming,O
the,O
certificate,O
of,O
stock,O
to,O
be,O
lost,O
",",O
stolen,O
or,O
destroyed,O
.,O
,O
When,O
authorizing,O
such,O
issue,O
of,O
a,O
new,O
certificate,O
or,O
certificates,O
",",O
the,O
board,O
of,O
directors,O
may,O
",",O
in,O
its,O
discretion,O
and,O
as,O
a,O
condition,O
precedent,O
to,O
the,O
issuance,O
thereof,O
",",O
require,O
the,O
owner,O
of,O
such,O
lost,O
",",O
stolen,O
or,O
destroyed,O
certificate,O
or,O
certificates,O
",",O
or,O
his,O
legal,O
representative,O
",",O
to,O
advertise,O
the,O
same,O
in,O
such,O
manner,O
as,O
it,O
shall,O
require,O
and/or,O
to,O
give,O
the,O
Corporation,O
a,O
bond,O
in,O
such,O
sum,O
as,O
it,O
may,O
direct,O
as,O
indemnity,O
against,O
any,O
claim,O
that,O
may,O
be,O
made,O
against,O
the,O
Corporation,O
with,O
respect,O
to,O
the,O
certificate,O
alleged,O
to,O
have,O
been,O
lost,O
",",O
stolen,O
or,O
destroyed,O
.,O
,O
Transfers,O
of,O
stock,O
shall,O
be,O
made,O
on,O
the,O
books,O
of,O
the,O
Corporation,O
only,O
by,O
direction,O
of,O
the,O
person,O
named,O
in,O
the,O
certificate,O
or,O
such,O
person,O
’,O
s,O
attorney,O
",",O
lawfully,O
constituted,O
in,O
writing,O
",",O
and,O
only,O
upon,O
the,O
surrender,O
of,O
the,O
certificate,O
therefor,O
and,O
a,O
written,O
assignment,O
of,O
the,O
shares,O
evidenced,O
thereby,O
",",O
which,O
certificate,O
shall,O
be,O
cancelled,O
before,O
the,O
new,O
certificate,O
is,O
issued,O
.,O
,O
In,O
order,O
that,O
the,O
Corporation,O
may,O
determine,O
the,O
stockholders,O
entitled,O
to,O
notice,O
of,O
or,O
to,O
vote,O
at,O
any,O
meeting,O
of,O
stockholders,O
or,O
any,O
adjournment,O
thereof,O
",",O
or,O
to,O
express,O
consent,O
to,O
corporate,O
action,O
in,O
writing,O
without,O
a,O
meeting,O
",",O
or,O
entitled,O
to,O
receive,O
payment,O
of,O
any,O
dividend,O
or,O
other,O
distribution,O
or,O
allotment,O
of,O
any,O
rights,O
",",O
or,O
entitled,O
to,O
exercise,O
any,O
rights,O
in,O
respect,O
of,O
any,O
change,O
",",O
conversion,O
or,O
exchange,O
of,O
stock,O
or,O
for,O
the,O
purpose,O
of,O
any,O
other,O
lawful,O
action,O
",",O
the,O
board,O
of,O
directors,O
may,O
fix,O
",",O
in,O
advance,O
",",O
a,O
record,O
date,O
",",O
which,O
record,O
date,O
shall,O
not,O
precede,O
the,O
date,O
upon,O
which,O
the,O
resolution,O
fixing,O
the,O
record,O
date,O
is,O
adopted,O
and,O
shall,O
not,O
be,O
less,O
than,O
ten,O
days,O
",",O
nor,O
more,O
than,O
sixty,O
days,O
prior,O
to,O
the,O
date,O
of,O
the,O
meeting,O
or,O
any,O
other,O
action,O
.,O
,O
If,O
no,O
record,O
date,O
is,O
fixed,O
",",O
the,O
record,O
date,O
for,O
determining,O
stockholders,O
for,O
any,O
such,O
purpose,O
shall,O
be,O
the,O
close,O
of,O
business,O
on,O
the,O
day,O
on,O
which,O
the,O
board,O
of,O
directors,O
adopts,O
the,O
resolution,O
relating,O
thereto,O
.,O
,O
A,O
determination,O
of,O
stockholders,O
of,O
record,O
entitled,O
to,O
notice,O
of,O
or,O
to,O
vote,O
at,O
a,O
meeting,O
of,O
stockholders,O
shall,O
apply,O
to,O
any,O
adjournment,O
of,O
the,O
meeting,O
;,O
provided,O
",",O
however,O
",",O
that,O
the,O
board,O
of,O
directors,O
may,O
fix,O
a,O
new,O
record,O
date,O
for,O
the,O
adjourned,O
meeting,O
.,O
,O
In,O
order,O
that,O
the,O
Corporation,O
may,O
determine,O
the,O
stockholders,O
entitled,O
to,O
consent,O
to,O
corporate,O
action,O
in,O
writing,O
without,O
a,O
meeting,O
",",O
the,O
board,O
of,O
directors,O
may,O
fix,O
a,O
record,O
date,O
",",O
which,O
record,O
date,O
shall,O
not,O
precede,O
the,O
date,O
upon,O
which,O
the,O
resolution,O
fixing,O
the,O
record,O
date,O
is,O
adopted,O
by,O
the,O
board,O
of,O
directors,O
",",O
and,O
which,O
date,O
shall,O
not,O
be,O
more,O
than,O
ten,O
days,O
after,O
the,O
date,O
upon,O
which,O
the,O
resolution,O
fixing,O
the,O
record,O
date,O
is,O
adopted,O
by,O
the,O
board,O
of,O
directors,O
.,O
,O
If,O
no,O
record,O
date,O
has,O
been,O
fixed,O
by,O
the,O
board,O
of,O
directors,O
",",O
the,O
record,O
date,O
for,O
determining,O
the,O
stockholders,O
entitled,O
to,O
consent,O
to,O
corporate,O
action,O
in,O
writing,O
without,O
a,O
meeting,O
",",O
when,O
no,O
prior,O
action,O
by,O
the,O
board,O
of,O
directors,O
is,O
required,O
by,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
",",O
shall,O
be,O
the,O
first,O
date,O
on,O
which,O
a,O
signed,O
written,O
consent,O
setting,O
forth,O
the,O
action,O
taken,O
or,O
proposed,O
to,O
be,O
taken,O
is,O
delivered,O
to,O
the,O
Corporation,O
by,O
delivery,O
to,O
its,O
registered,O
office,O
in,O
the,O
State,I-LOCATION
of,I-LOCATION
Delaware,I-LOCATION
",",O
its,O
principal,O
place,O
of,O
business,O
or,O
an,O
officer,O
or,O
agent,O
of,O
the,O
Corporation,O
having,O
custody,O
of,O
the,O
book,O
in,O
which,O
proceedings,O
of,O
meetings,O
of,O
stockholders,O
are,O
recorded,O
.,O
,O
Delivery,O
made,O
to,O
the,O
Corporation,O
’,O
s,O
registered,O
office,O
shall,O
be,O
by,O
hand,O
or,O
by,O
certified,O
or,O
registered,O
mail,O
",",O
return,O
receipt,O
requested,O
.,O
,O
If,O
no,O
record,O
date,O
has,O
been,O
fixed,O
by,O
the,O
board,O
of,O
directors,O
and,O
prior,O
action,O
by,O
the,O
board,O
of,O
directors,O
is,O
required,O
by,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
",",O
the,O
record,O
date,O
for,O
determining,O
stockholders,O
entitled,O
to,O
consent,O
to,O
corporate,O
action,O
in,O
writing,O
without,O
a,O
meeting,O
shall,O
be,O
at,O
the,O
close,O
of,O
business,O
on,O
the,O
day,O
on,O
which,O
the,O
board,O
of,O
directors,O
adopts,O
the,O
resolution,O
taking,O
such,O
prior,O
action,O
.,O
,O
The,O
Corporation,O
shall,O
be,O
entitled,O
to,O
recognize,O
the,O
exclusive,O
right,O
of,O
a,O
person,O
registered,O
on,O
its,O
books,O
as,O
the,O
owner,O
of,O
shares,O
to,O
receive,O
dividends,O
",",O
and,O
to,O
vote,O
as,O
such,O
owner,O
",",O
and,O
to,O
hold,O
liable,O
for,O
calls,O
and,O
assessments,O
a,O
person,O
registered,O
on,O
its,O
books,O
as,O
the,O
owner,O
of,O
shares,O
",",O
and,O
shall,O
not,O
be,O
bound,O
to,O
recognize,O
any,O
equitable,O
or,O
other,O
claim,O
to,O
or,O
interest,O
in,O
such,O
share,O
or,O
shares,O
on,O
the,O
part,O
of,O
any,O
other,O
person,O
",",O
whether,O
or,O
not,O
it,O
shall,O
have,O
express,O
or,O
other,O
notice,O
thereof,O
",",O
except,O
as,O
otherwise,O
provided,O
by,O
the,O
laws,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
Delaware,I-LOCATION
.,O
,O
As,O
used,O
herein,O
in,O
respect,O
of,O
the,O
right,O
to,O
notice,O
of,O
a,O
meeting,O
of,O
stockholders,O
or,O
a,O
waiver,O
thereof,O
or,O
to,O
participate,O
or,O
vote,O
thereat,O
or,O
to,O
consent,O
or,O
dissent,O
in,O
writing,O
in,O
lieu,O
of,O
a,O
meeting,O
",",O
as,O
the,O
case,O
may,O
be,O
",",O
the,O
term,O
“,O
share,O
”,O
or,O
“,O
shares,O
”,O
or,O
“,O
share,O
of,O
stock,O
”,O
or,O
“,O
shares,O
of,O
stock,O
”,O
or,O
“,O
stockholder,O
”,O
or,O
“,O
stockholders,O
”,O
refers,O
to,O
an,O
outstanding,O
share,O
or,O
shares,O
of,O
stock,O
and,O
to,O
a,O
holder,O
or,O
holders,O
of,O
record,O
of,O
outstanding,O
shares,O
of,O
stock,O
when,O
the,O
Corporation,O
is,O
authorized,O
to,O
issue,O
only,O
one,O
class,O
of,O
shares,O
of,O
stock,O
",",O
and,O
said,O
reference,O
is,O
also,O
intended,O
to,O
include,O
any,O
outstanding,O
share,O
or,O
shares,O
of,O
stock,O
and,O
any,O
holder,O
or,O
holders,O
of,O
record,O
of,O
outstanding,O
shares,O
of,O
stock,O
of,O
any,O
class,O
upon,O
which,O
or,O
upon,O
whom,O
the,O
Certificate,O
of,O
Incorporation,O
confers,O
such,O
rights,O
where,O
there,O
are,O
two,O
or,O
more,O
classes,O
or,O
series,O
of,O
shares,O
of,O
stock,O
or,O
upon,O
which,O
or,O
upon,O
whom,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
confers,O
such,O
rights,O
",",O
notwithstanding,O
that,O
the,O
Certificate,O
of,O
Incorporation,O
may,O
provide,O
for,O
more,O
than,O
one,O
class,O
or,O
series,O
of,O
shares,O
of,O
stock,O
",",O
one,O
or,O
more,O
of,O
which,O
are,O
limited,O
or,O
denied,O
such,O
rights,O
thereunder,O
;,O
provided,O
",",O
however,O
",",O
that,O
no,O
such,O
right,O
shall,O
vest,O
in,O
the,O
event,O
of,O
an,O
increase,O
or,O
a,O
decrease,O
in,O
the,O
authorized,O
number,O
of,O
shares,O
of,O
stock,O
of,O
any,O
class,O
or,O
series,O
which,O
is,O
otherwise,O
denied,O
voting,O
rights,O
under,O
the,O
provisions,O
of,O
the,O
Certificate,O
of,O
Incorporation,O
",",O
except,O
as,O
any,O
provision,O
of,O
law,O
may,O
otherwise,O
require,O
.,O
,O
Dividends,O
upon,O
the,O
capital,O
stock,O
of,O
the,O
Corporation,O
",",O
subject,O
to,O
the,O
provisions,O
of,O
the,O
Certificate,O
of,O
Incorporation,O
",",O
if,O
any,O
",",O
may,O
be,O
declared,O
by,O
the,O
board,O
of,O
directors,O
at,O
any,O
regular,O
or,O
special,O
meeting,O
",",O
pursuant,O
to,O
law,O
.,O
,O
Dividends,O
may,O
be,O
paid,O
in,O
cash,O
",",O
in,O
property,O
or,O
in,O
shares,O
of,O
the,O
capital,O
stock,O
",",O
subject,O
to,O
the,O
provisions,O
of,O
the,O
Certificate,O
of,O
Incorporation,O
.,O
,O
Before,O
payment,O
of,O
any,O
dividend,O
",",O
there,O
may,O
be,O
set,O
aside,O
out,O
of,O
any,O
funds,O
of,O
the,O
Corporation,O
available,O
for,O
dividends,O
such,O
sum,O
or,O
sums,O
as,O
the,O
directors,O
from,O
time,O
to,O
time,O
",",O
in,O
their,O
absolute,O
discretion,O
",",O
think,O
proper,O
as,O
a,O
reserve,O
or,O
reserves,O
to,O
meet,O
contingencies,O
",",O
or,O
for,O
equalizing,O
dividends,O
",",O
or,O
for,O
repairing,O
or,O
maintaining,O
any,O
property,O
of,O
the,O
Corporation,O
",",O
or,O
for,O
such,O
other,O
purpose,O
as,O
the,O
directors,O
shall,O
think,O
conducive,O
to,O
the,O
interest,O
of,O
the,O
Corporation,O
",",O
and,O
the,O
directors,O
may,O
modify,O
or,O
abolish,O
any,O
such,O
reserve,O
in,O
the,O
manner,O
in,O
which,O
it,O
was,O
created,O
.,O
,O
The,O
board,O
of,O
directors,O
shall,O
present,O
at,O
each,O
annual,O
meeting,O
and,O
at,O
any,O
special,O
meeting,O
of,O
the,O
stockholders,O
when,O
called,O
for,O
by,O
vote,O
of,O
the,O
stockholders,O
a,O
full,O
and,O
clear,O
statement,O
of,O
the,O
business,O
and,O
condition,O
of,O
the,O
Corporation,O
.,O
,O
All,O
checks,O
or,O
demands,O
for,O
money,O
and,O
notes,O
of,O
the,O
Corporation,O
shall,O
be,O
signed,O
by,O
such,O
officer,O
or,O
officers,O
or,O
such,O
other,O
person,O
or,O
persons,O
as,O
the,O
board,O
of,O
directors,O
may,O
from,O
time,O
to,O
time,O
designate,O
.,O
,O
The,O
corporate,O
seal,O
shall,O
be,O
in,O
such,O
form,O
as,O
the,O
board,O
of,O
directors,O
shall,O
prescribe,O
.,O
,O
The,O
fiscal,O
year,O
of,O
the,O
Corporation,O
shall,O
end,O
on,O
December,O
31,O
.,O
,O
The,O
Corporation,O
shall,O
indemnify,O
any,O
person,O
who,O
was,O
or,O
is,O
a,O
party,O
or,O
is,O
threatened,O
to,O
be,O
made,O
a,O
party,O
to,O
any,O
threatened,O
",",O
pending,O
or,O
completed,O
action,O
",",O
suit,O
or,O
proceeding,O
",",O
whether,O
civil,O
",",O
criminal,O
",",O
administrative,O
or,O
investigative,O
(,O
other,O
than,O
an,O
action,O
by,O
or,O
in,O
the,O
right,O
of,O
the,O
Corporation,O
),O
by,O
reason,O
of,O
the,O
fact,O
that,O
such,O
person,O
is,O
or,O
was,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
the,O
Corporation,O
",",O
or,O
is,O
or,O
was,O
serving,O
at,O
the,O
request,O
of,O
the,O
Corporation,O
as,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
another,O
corporation,O
",",O
partnership,O
",",O
joint,O
venture,O
",",O
trust,O
or,O
other,O
enterprise,O
",",O
against,O
expenses,O
(,O
including,O
attorneys,O
’,O
fees,O
),O
",",O
judgments,O
",",O
fines,O
and,O
amounts,O
paid,O
in,O
settlement,O
actually,O
and,O
reasonably,O
incurred,O
by,O
such,O
person,O
in,O
connection,O
with,O
such,O
action,O
",",O
suit,O
or,O
proceeding,O
if,O
such,O
person,O
acted,O
in,O
good,O
faith,O
and,O
in,O
a,O
manner,O
such,O
person,O
reasonably,O
believed,O
to,O
be,O
in,O
or,O
not,O
opposed,O
to,O
the,O
best,O
interests,O
of,O
the,O
Corporation,O
",",O
and,O
with,O
respect,O
to,O
any,O
criminal,O
action,O
or,O
proceeding,O
",",O
had,O
no,O
reasonable,O
cause,O
to,O
believe,O
such,O
person,O
’,O
s,O
conduct,O
was,O
unlawful,O
.,O
,O
The,O
termination,O
of,O
any,O
action,O
",",O
suit,O
or,O
proceeding,O
by,O
judgment,O
",",O
order,O
",",O
settlement,O
",",O
conviction,O
or,O
upon,O
a,O
plea,O
of,O
nolo,O
contendere,O
or,O
its,O
equivalent,O
shall,O
not,O
",",O
of,O
itself,O
",",O
create,O
a,O
presumption,O
that,O
the,O
person,O
did,O
not,O
act,O
in,O
good,O
faith,O
and,O
in,O
a,O
manner,O
that,O
such,O
person,O
reasonably,O
believed,O
to,O
be,O
in,O
or,O
not,O
opposed,O
to,O
the,O
best,O
interests,O
of,O
the,O
Corporation,O
",",O
and,O
with,O
respect,O
to,O
any,O
criminal,O
action,O
or,O
proceeding,O
",",O
had,O
reasonable,O
cause,O
to,O
believe,O
that,O
such,O
person,O
’,O
s,O
conduct,O
was,O
unlawful,O
.,O
,O
The,O
Corporation,O
shall,O
indemnify,O
any,O
person,O
who,O
was,O
or,O
is,O
a,O
party,O
or,O
is,O
threatened,O
to,O
be,O
made,O
a,O
party,O
to,O
any,O
threatened,O
",",O
pending,O
or,O
completed,O
action,O
or,O
suit,O
by,O
or,O
in,O
the,O
right,O
of,O
the,O
Corporation,O
to,O
procure,O
a,O
judgment,O
in,O
its,O
favor,O
by,O
reason,O
of,O
the,O
fact,O
that,O
such,O
person,O
is,O
or,O
was,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
the,O
Corporation,O
",",O
or,O
is,O
or,O
was,O
serving,O
at,O
the,O
request,O
of,O
the,O
Corporation,O
as,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
another,O
corporation,O
",",O
partnership,O
",",O
joint,O
venture,O
",",O
trust,O
or,O
other,O
enterprise,O
against,O
expenses,O
(,O
including,O
attorneys,O
’,O
fees,O
),O
actually,O
and,O
reasonably,O
incurred,O
by,O
such,O
person,O
in,O
connection,O
with,O
the,O
defense,O
or,O
settlement,O
of,O
such,O
action,O
or,O
suit,O
if,O
such,O
person,O
acted,O
in,O
good,O
faith,O
and,O
in,O
a,O
manner,O
such,O
person,O
reasonably,O
believed,O
to,O
be,O
in,O
or,O
not,O
opposed,O
to,O
the,O
best,O
interests,O
of,O
the,O
Corporation,O
and,O
except,O
that,O
no,O
indemnification,O
shall,O
be,O
made,O
in,O
respect,O
of,O
any,O
claim,O
",",O
issue,O
or,O
matter,O
as,O
to,O
which,O
such,O
person,O
shall,O
have,O
been,O
adjudged,O
to,O
be,O
liable,O
to,O
the,O
Corporation,O
unless,O
and,O
only,O
to,O
the,O
extent,O
that,O
the,O
Court,I-COURT
of,I-COURT
Chancery,I-COURT
of,I-COURT
the,I-COURT
State,I-COURT
of,I-COURT
Delaware,I-COURT
or,O
the,O
court,O
in,O
which,O
such,O
action,O
or,O
suit,O
was,O
brought,O
shall,O
determine,O
upon,O
application,O
that,O
",",O
despite,O
the,O
adjudication,O
of,O
liability,O
",",O
but,O
in,O
view,O
of,O
all,O
the,O
circumstances,O
of,O
the,O
case,O
",",O
such,O
person,O
is,O
fairly,O
and,O
reasonably,O
entitled,O
to,O
indemnity,O
for,O
such,O
expenses,O
which,O
the,O
Court,I-COURT
of,I-COURT
Chancery,I-COURT
or,O
such,O
other,O
court,O
shall,O
deem,O
proper,O
.,O
,O
To,O
the,O
extent,O
that,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
the,O
Corporation,O
has,O
been,O
successful,O
on,O
the,O
merits,O
or,O
otherwise,O
in,O
defense,O
of,O
any,O
action,O
",",O
suit,O
or,O
proceeding,O
referred,O
to,O
in,O
Sections,O
8.1,O
and,O
8.2,O
of,O
this,O
Article,O
VIII,O
",",O
or,O
in,O
defense,O
of,O
any,O
claim,O
",",O
issue,O
or,O
matter,O
therein,O
",",O
such,O
person,O
shall,O
be,O
indemnified,O
against,O
expenses,O
(,O
including,O
attorneys,O
’,O
fees,O
),O
actually,O
and,O
reasonably,O
incurred,O
by,O
such,O
person,O
in,O
connection,O
therewith,O
.,O
,O
For,O
purposes,O
of,O
determining,O
the,O
reasonableness,O
of,O
any,O
such,O
expenses,O
",",O
a,O
certification,O
to,O
such,O
effect,O
by,O
any,O
member,O
of,O
the,O
Bar,I-BUSINESS
of,I-BUSINESS
the,I-BUSINESS
State,I-BUSINESS
of,I-BUSINESS
Delaware,I-BUSINESS
",",O
which,O
member,O
of,O
the,O
Bar,O
may,O
have,O
acted,O
as,O
counsel,O
to,O
any,O
such,O
director,O
",",O
officer,O
or,O
employee,O
",",O
shall,O
be,O
binding,O
upon,O
the,O
Corporation,O
unless,O
the,O
Corporation,O
establishes,O
that,O
the,O
certification,O
was,O
made,O
in,O
bad,O
faith,O
.,O
,O
Any,O
indemnification,O
under,O
Sections,O
8.1,O
and,O
8.2,O
of,O
this,O
Article,O
VIII,O
(,O
unless,O
ordered,O
by,O
a,O
court,O
),O
shall,O
be,O
made,O
by,O
the,O
Corporation,O
only,O
as,O
authorized,O
in,O
the,O
specific,O
case,O
upon,O
a,O
determination,O
that,O
indemnification,O
of,O
the,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
is,O
proper,O
in,O
the,O
circumstances,O
because,O
any,O
such,O
person,O
has,O
met,O
the,O
applicable,O
standard,O
of,O
conduct,O
set,O
forth,O
in,O
Sections,O
8.1,O
and,O
8.2,O
of,O
this,O
Article,O
VIII,O
.,O
,O
Such,O
determination,O
shall,O
be,O
made,O
(,O
1,O
),O
by,O
the,O
board,O
of,O
directors,O
",",O
by,O
a,O
majority,O
vote,O
of,O
a,O
quorum,O
consisting,O
of,O
directors,O
who,O
were,O
not,O
parties,O
to,O
such,O
action,O
",",O
suit,O
or,O
proceeding,O
",",O
or,O
(,O
2,O
),O
if,O
such,O
a,O
quorum,O
is,O
not,O
obtainable,O
",",O
or,O
even,O
if,O
obtainable,O
",",O
a,O
quorum,O
of,O
disinterested,O
directors,O
so,O
directs,O
",",O
by,O
independent,O
legal,O
counsel,O
in,O
a,O
written,O
opinion,O
",",O
or,O
(,O
3,O
),O
by,O
the,O
stockholders,O
.,O
,O
Expenses,O
(,O
including,O
attorneys,O
’,O
fees,O
),O
incurred,O
by,O
an,O
officer,O
",",O
director,O
",",O
employee,O
or,O
agent,O
of,O
the,O
Corporation,O
in,O
defending,O
any,O
civil,O
",",O
criminal,O
",",O
administrative,O
or,O
investigative,O
action,O
",",O
suit,O
or,O
proceeding,O
",",O
shall,O
be,O
paid,O
by,O
the,O
Corporation,O
in,O
advance,O
of,O
the,O
final,O
disposition,O
of,O
such,O
action,O
",",O
suit,O
or,O
proceeding,O
upon,O
receipt,O
of,O
an,O
undertaking,O
by,O
or,O
on,O
behalf,O
of,O
such,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
to,O
repay,O
such,O
amount,O
if,O
it,O
shall,O
ultimately,O
be,O
determined,O
that,O
any,O
such,O
person,O
is,O
not,O
entitled,O
to,O
be,O
indemnified,O
by,O
the,O
Corporation,O
as,O
authorized,O
by,O
this,O
Article,O
VIII,O
.,O
,O
The,O
indemnification,O
and,O
advancement,O
of,O
expenses,O
provided,O
by,O
",",O
or,O
granted,O
pursuant,O
to,O
",",O
the,O
other,O
sections,O
of,O
this,O
Article,O
VIII,O
shall,O
not,O
be,O
deemed,O
exclusive,O
of,O
any,O
other,O
rights,O
to,O
which,O
any,O
person,O
seeking,O
indemnification,O
or,O
advancement,O
of,O
expenses,O
may,O
be,O
entitled,O
under,O
any,O
bylaw,O
",",O
agreement,O
",",O
vote,O
of,O
stockholders,O
or,O
disinterested,O
directors,O
or,O
otherwise,O
",",O
both,O
as,O
to,O
action,O
in,O
such,O
person,O
’,O
s,O
official,O
capacity,O
and,O
as,O
to,O
action,O
in,O
another,O
capacity,O
while,O
holding,O
such,O
office,O
.,O
,O
The,O
Corporation,O
may,O
but,O
shall,O
not,O
be,O
required,O
to,O
purchase,O
and,O
maintain,O
insurance,O
on,O
behalf,O
of,O
any,O
person,O
who,O
is,O
or,O
was,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
the,O
Corporation,O
",",O
or,O
is,O
or,O
was,O
serving,O
at,O
the,O
request,O
of,O
the,O
Corporation,O
as,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
another,O
corporation,O
",",O
partnership,O
",",O
joint,O
venture,O
",",O
trust,O
or,O
other,O
enterprise,O
",",O
against,O
any,O
liability,O
asserted,O
against,O
such,O
person,O
and,O
incurred,O
by,O
such,O
person,O
in,O
any,O
capacity,O
",",O
or,O
arising,O
out,O
of,O
such,O
person,O
’,O
s,O
status,O
as,O
such,O
",",O
whether,O
or,O
not,O
the,O
Corporation,O
would,O
have,O
the,O
power,O
to,O
indemnify,O
such,O
person,O
against,O
such,O
liability,O
under,O
this,O
Article,O
VIII,O
.,O
,O
For,O
purposes,O
of,O
this,O
Article,O
VIII,O
",",O
references,O
to,O
“,O
the,O
Corporation,O
”,O
shall,O
include,O
",",O
in,O
addition,O
to,O
the,O
resulting,O
corporation,O
",",O
any,O
constituent,O
corporation,O
(,O
including,O
any,O
constituent,O
of,O
a,O
constituent,O
),O
absorbed,O
in,O
a,O
consolidation,O
or,O
merger,O
which,O
",",O
if,O
its,O
separate,O
existence,O
had,O
continued,O
",",O
would,O
have,O
had,O
power,O
and,O
authority,O
to,O
indemnify,O
its,O
directors,O
",",O
officers,O
and,O
employees,O
or,O
agents,O
",",O
so,O
that,O
any,O
person,O
who,O
is,O
or,O
was,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
such,O
constituent,O
corporation,O
",",O
or,O
is,O
or,O
was,O
serving,O
at,O
the,O
request,O
of,O
such,O
constituent,O
corporation,O
as,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
another,O
corporation,O
",",O
partnership,O
",",O
joint,O
venture,O
",",O
trust,O
or,O
other,O
enterprise,O
",",O
shall,O
stand,O
in,O
the,O
same,O
position,O
under,O
this,O
Article,O
VIII,O
with,O
respect,O
to,O
the,O
resulting,O
or,O
surviving,O
corporation,O
as,O
such,O
person,O
would,O
have,O
with,O
respect,O
to,O
such,O
constituent,O
corporation,O
if,O
its,O
separate,O
existence,O
had,O
continued,O
.,O
,O
For,O
purposes,O
of,O
this,O
Article,O
VIII,O
",",O
references,O
to,O
“,O
other,O
enterprises,O
”,O
shall,O
include,O
employee,O
benefit,O
plans,O
;,O
references,O
to,O
“,O
fines,O
”,O
shall,O
include,O
any,O
excise,O
taxes,O
assessed,O
on,O
a,O
person,O
with,O
respect,O
to,O
any,O
employee,O
benefit,O
plan,O
;,O
and,O
references,O
to,O
“,O
serving,O
at,O
the,O
request,O
of,O
the,O
Corporation,O
”,O
shall,O
include,O
any,O
service,O
as,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
the,O
Corporation,O
which,O
imposes,O
duties,O
on,O
",",O
or,O
involves,O
services,O
by,O
",",O
such,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
with,O
respect,O
to,O
an,O
employee,O
benefit,O
plan,O
",",O
its,O
participants,O
or,O
beneficiaries,O
",",O
and,O
a,O
person,O
who,O
acted,O
in,O
good,O
faith,O
and,O
in,O
a,O
manner,O
such,O
person,O
reasonably,O
believed,O
to,O
be,O
in,O
the,O
interest,O
of,O
the,O
participants,O
and,O
beneficiaries,O
of,O
an,O
employee,O
benefit,O
plan,O
shall,O
be,O
deemed,O
to,O
have,O
acted,O
in,O
a,O
manner,O
“,O
not,O
opposed,O
to,O
the,O
best,O
interests,O
of,O
the,O
Corporation,O
”,O
as,O
referred,O
to,O
in,O
this,O
Article,O
VIII,O
.,O
,O
The,O
indemnification,O
and,O
advancement,O
of,O
expenses,O
provided,O
by,O
",",O
or,O
granted,O
pursuant,O
to,O
",",O
this,O
Article,O
VIII,O
shall,O
",",O
unless,O
otherwise,O
provided,O
when,O
authorized,O
or,O
ratified,O
",",O
continue,O
as,O
to,O
a,O
person,O
who,O
has,O
ceased,O
to,O
be,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
and,O
shall,O
inure,O
to,O
the,O
benefit,O
of,O
the,O
heirs,O
",",O
executors,O
and,O
administrators,O
of,O
such,O
a,O
person,O
.,O
,O
This,O
Article,O
VIII,O
shall,O
be,O
interpreted,O
and,O
construed,O
to,O
accord,O
",",O
as,O
a,O
matter,O
of,O
right,O
",",O
to,O
any,O
person,O
who,O
is,O
or,O
was,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
the,O
Corporation,O
or,O
is,O
or,O
was,O
serving,O
at,O
the,O
request,O
of,O
the,O
Corporation,O
as,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
another,O
corporation,O
",",O
partnership,O
",",O
joint,O
venture,O
",",O
trust,O
or,O
other,O
enterprise,O
",",O
the,O
full,O
measure,O
of,O
indemnification,O
and,O
advancement,O
of,O
expenses,O
permitted,O
by,O
Section,O
145,O
of,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
.,O
,O
Any,O
person,O
seeking,O
indemnification,O
or,O
advancement,O
of,O
expenses,O
by,O
virtue,O
of,O
such,O
person,O
being,O
or,O
having,O
been,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
the,O
Corporation,O
may,O
seek,O
to,O
enforce,O
the,O
provisions,O
of,O
this,O
Article,O
VIII,O
by,O
an,O
action,O
in,O
law,O
or,O
equity,O
in,O
any,O
court,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
or,O
any,O
state,O
or,O
political,O
subdivision,O
thereof,O
having,O
jurisdiction,O
of,O
the,O
parties,O
.,O
,O
Without,O
limitation,O
of,O
the,O
foregoing,O
",",O
it,O
is,O
specifically,O
recognized,O
that,O
remedies,O
available,O
at,O
law,O
may,O
not,O
be,O
adequate,O
if,O
the,O
effect,O
thereof,O
is,O
to,O
impose,O
delay,O
on,O
the,O
immediate,O
realization,O
by,O
any,O
such,O
person,O
of,O
the,O
rights,O
conferred,O
by,O
this,O
Article,O
VIII,O
.,O
,O
Any,O
costs,O
incurred,O
by,O
any,O
person,O
in,O
enforcing,O
the,O
provisions,O
of,O
this,O
Article,O
VIII,O
shall,O
be,O
an,O
indemnifiable,O
expense,O
in,O
the,O
same,O
manner,O
and,O
to,O
the,O
same,O
extent,O
as,O
other,O
indemnifiable,O
expenses,O
under,O
this,O
Article,O
VIII,O
.,O
,O
No,O
amendment,O
",",O
modification,O
or,O
repeal,O
of,O
this,O
Article,O
VIII,O
shall,O
have,O
the,O
effect,O
of,O
or,O
be,O
construed,O
to,O
limit,O
or,O
adversely,O
affect,O
any,O
claim,O
to,O
indemnification,O
or,O
advancement,O
of,O
expenses,O
made,O
by,O
any,O
person,O
who,O
is,O
or,O
was,O
a,O
director,O
",",O
officer,O
",",O
employee,O
or,O
agent,O
of,O
the,O
Corporation,O
with,O
respect,O
to,O
any,O
statement,O
of,O
facts,O
that,O
existed,O
prior,O
to,O
the,O
date,O
of,O
such,O
amendment,O
",",O
modification,O
or,O
repeal,O
.,O
,O
Accordingly,O
",",O
any,O
amendment,O
",",O
modification,O
or,O
repeal,O
of,O
this,O
Article,O
VIII,O
shall,O
be,O
deemed,O
to,O
have,O
prospective,O
application,O
only,O
and,O
shall,O
not,O
be,O
applied,O
retroactively,O
.,O
,O
Subject,O
to,O
the,O
provisions,O
of,O
the,O
Certificate,O
of,O
Incorporation,O
",",O
these,O
Bylaws,O
may,O
be,O
altered,O
",",O
amended,O
or,O
repealed,O
at,O
any,O
regular,O
meeting,O
of,O
the,O
stockholders,O
(,O
or,O
at,O
any,O
special,O
meeting,O
thereof,O
duly,O
called,O
for,O
that,O
purpose,O
),O
by,O
a,O
majority,O
vote,O
of,O
the,O
shares,O
represented,O
and,O
entitled,O
to,O
vote,O
at,O
such,O
meeting,O
;,O
provided,O
that,O
in,O
the,O
notice,O
of,O
such,O
special,O
meeting,O
notice,O
of,O
such,O
purpose,O
shall,O
be,O
given,O
.,O
,O
Subject,O
to,O
the,O
laws,O
of,O
the,O
State,I-LOCATION
of,I-LOCATION
Delaware,I-LOCATION
",",O
the,O
Certificate,O
of,O
Incorporation,O
and,O
these,O
Bylaws,O
",",O
the,O
board,O
of,O
directors,O
may,O
by,O
majority,O
vote,O
of,O
those,O
present,O
at,O
any,O
meeting,O
at,O
which,O
a,O
quorum,O
is,O
present,O
amend,O
these,O
Bylaws,O
",",O
or,O
enact,O
such,O
other,O
Bylaws,O
as,O
in,O
their,O
judgment,O
may,O
be,O
advisable,O
for,O
the,O
regulation,O
of,O
the,O
conduct,O
of,O
the,O
affairs,O
of,O
the,O
Corporation,O
",",O
except,O
that,O
Sections,O
3.1,O
",",O
3.2,O
",",O
3.3,O
and,O
3.13,O
of,O
Article,O
III,O
and,O
Articles,O
IX,O
and,O
X,O
of,O
the,O
Bylaws,O
may,O
be,O
amended,O
only,O
by,O
the,O
affirmative,O
vote,O
of,O
the,O
holders,O
of,O
at,O
least,O
sixty-six,O
and,O
two-thirds,O
percent,O
(,O
66-2/3,O
%,O
),O
of,O
the,O
voting,O
power,O
of,O
all,O
the,O
shares,O
of,O
the,O
Corporation,O
entitled,O
to,O
vote,O
generally,O
in,O
the,O
election,O
of,O
directors,O
",",O
voting,O
together,O
as,O
a,O
single,O
class,O
.,O
,O
Any,O
action,O
required,O
or,O
permitted,O
to,O
be,O
taken,O
by,O
the,O
stockholders,O
of,O
the,O
Corporation,O
must,O
be,O
effected,O
at,O
a,O
duly,O
called,O
annual,O
or,O
special,O
meeting,O
of,O
such,O
holders,O
and,O
may,O
not,O
be,O
effected,O
by,O
any,O
consent,O
in,O
writing,O
by,O
such,O
holders,O
",",O
except,O
that,O
an,O
amendment,O
to,O
the,O
Certificate,O
of,O
Incorporation,O
of,O
the,O
Corporation,O
in,O
order,O
to,O
change,O
the,O
name,O
of,O
the,O
Corporation,O
may,O
be,O
approved,O
without,O
a,O
meeting,O
",",O
by,O
consent,O
in,O
writing,O
of,O
the,O
holders,O
of,O
the,O
outstanding,O
stock,O
of,O
the,O
Corporation,O
having,O
not,O
less,O
than,O
the,O
minimum,O
number,O
of,O
votes,O
that,O
would,O
be,O
necessary,O
to,O
approve,O
such,O
amendment,O
at,O
a,O
meeting,O
at,O
which,O
all,O
shares,O
entitled,O
to,O
vote,O
thereon,O
were,O
present,O
and,O
voted,O
pursuant,O
to,O
the,O
provisions,O
of,O
Section,O
228,O
of,O
the,O
Delaware,I-LEGISLATION/ACT
General,I-LEGISLATION/ACT
Corporation,I-LEGISLATION/ACT
Law,I-LEGISLATION/ACT
.,O
,O
Except,O
as,O
otherwise,O
required,O
by,O
law,O
and,O
subject,O
to,O
the,O
rights,O
of,O
the,O
holders,O
of,O
any,O
class,O
or,O
series,O
of,O
stock,O
having,O
a,O
preferences,O
over,O
the,O
Common,O
Stock,O
as,O
to,O
dividends,O
or,O
upon,O
liquidation,O
",",O
special,O
meetings,O
of,O
stockholders,O
of,O
the,O
Corporation,O
may,O
be,O
called,O
only,O
by,O
the,O
board,O
of,O
directors,O
pursuant,O
to,O
a,O
resolution,O
approved,O
by,O
a,O
majority,O
of,O
the,O
entire,O
board,O
of,O
directors,O
.,O
,O
I,O
HEREBY,O
CERTIFY,O
that,O
the,O
foregoing,O
is,O
a,O
full,O
",",O
true,O
and,O
correct,O
copy,O
of,O
the,O
Bylaws,O
of,O
Wilhelmina,I-BUSINESS
International,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
",",O
a,O
Delaware,I-LOCATION
corporation,O
",",O
as,O
in,O
effect,O
on,O
the,O
date,O
hereof,O
.,O
,O
WITNESS,O
my,O
hand,O
and,O
seal,O
of,O
the,O
Corporation,O
.,O
,O
SECRETARY,O
of,O
WILHELMINA,I-BUSINESS
INTERNATIONAL,I-BUSINESS
",",I-BUSINESS
INC.,I-BUSINESS
,O
-DOCSTART-,O
,O
BlackRock,I-BUSINESS
Funds,I-BUSINESS
II,I-BUSINESS
BlackRock,B-BUSINESS
High,I-BUSINESS
Yield,I-BUSINESS
Bond,I-BUSINESS
Portfolio,I-BUSINESS
BlackRock,B-BUSINESS
Shares,O
SUMMARY,O
PROSPECTUS,O
|,O
JANUARY,O
28,O
",",O
2010,O
This,O
Prospectus,O
contains,O
information,O
you,O
should,O
know,O
before,O
investing,O
",",O
including,O
information,O
about,O
risks,O
.,O
,O
Please,O
read,O
it,O
before,O
you,O
invest,O
and,O
keep,O
it,O
for,O
future,O
reference,O
.,O
,O
Before,O
you,O
invest,O
",",O
you,O
may,O
want,O
to,O
review,O
the,O
Fund,O
s,O
prospectus,O
",",O
which,O
contains,O
more,O
information,O
about,O
the,O
Fund,O
and,O
its,O
risks,O
.,O
,O
You,O
can,O
find,O
the,O
Fund,O
s,O
prospectus,O
and,O
other,O
information,O
about,O
the,O
Fund,O
",",O
including,O
the,O
Fund,O
s,O
statement,O
of,O
additional,O
information,O
and,O
shareholder,O
report,O
",",O
online,O
at,O
http,O
:,O
//www.blackrock.com/prospectus,O
.,O
,O
You,O
can,O
also,O
get,O
this,O
information,O
at,O
no,O
cost,O
by,O
calling,O
(,O
800,O
),O
441-7762,O
or,O
by,O
sending,O
an,O
e-mail,O
request,O
to,O
prospectus.request,O
@,O
blackrock.com,O
",",O
or,O
from,O
your,O
financial,O
professional,O
.,O
,O
The,O
Fund,O
s,O
prospectus,O
and,O
statement,O
of,O
additional,O
information,O
",",O
both,O
dated,O
January,O
28,O
",",O
2010,O
",",O
are,O
incorporated,O
by,O
reference,O
into,O
this,O
Summary,O
Prospectus,O
.,O
,O
The,O
Securities,I-GOVERNMENT
and,I-GOVERNMENT
Exchange,I-GOVERNMENT
Commission,I-GOVERNMENT
has,O
not,O
approved,O
or,O
disapproved,O
these,O
securities,O
or,O
passed,O
upon,O
the,O
adequacy,O
of,O
this,O
Prospectus,O
.,O
,O
Any,O
representation,O
to,O
the,O
contrary,O
is,O
a,O
criminal,O
offense,O
.,O
,O
Summary,O
Prospectus,O
Key,O
Facts,O
About,O
BlackRock,I-BUSINESS
High,I-BUSINESS
Yield,I-BUSINESS
Bond,I-BUSINESS
Portfolio,I-BUSINESS
Investment,O
Objective,O
The,O
investment,O
objective,O
of,O
the,O
BlackRock,I-BUSINESS
High,I-BUSINESS
Yield,I-BUSINESS
Bond,I-BUSINESS
Portfolio,I-BUSINESS
(,O
the,O
High,I-BUSINESS
Yield,I-BUSINESS
Fund,I-BUSINESS
or,O
the,O
Fund,O
),O
is,O
to,O
seek,O
to,O
maximize,O
total,O
return,O
",",O
consistent,O
with,O
income,O
generation,O
and,O
prudent,O
investment,O
management,O
.,O
,O
Fees,O
and,O
Expenses,O
of,O
the,O
Fund,O
This,O
table,O
describes,O
the,O
fees,O
and,O
expenses,O
that,O
you,O
may,O
pay,O
if,O
you,O
buy,O
and,O
hold,O
shares,O
of,O
the,O
Fund,O
.,O
,O
Example,O
:,O
This,O
Example,O
is,O
intended,O
to,O
help,O
you,O
compare,O
the,O
cost,O
of,O
investing,O
in,O
the,O
Fund,O
with,O
the,O
cost,O
of,O
investing,O
in,O
other,O
mutual,O
funds,O
.,O
,O
The,O
Example,O
assumes,O
that,O
you,O
invest,O
$,O
"10,000",O
in,O
the,O
Fund,O
for,O
the,O
time,O
periods,O
indicated,O
and,O
then,O
redeem,O
all,O
of,O
your,O
shares,O
at,O
the,O
end,O
of,O
those,O
periods,O
.,O
,O
The,O
Example,O
also,O
assumes,O
that,O
your,O
investment,O
has,O
a,O
5,O
%,O
return,O
each,O
year,O
and,O
that,O
the,O
Fund,O
s,O
operating,O
expenses,O
remain,O
the,O
same,O
.,O
,O
Although,O
your,O
actual,O
costs,O
may,O
be,O
higher,O
or,O
lower,O
",",O
based,O
on,O
these,O
assumptions,O
your,O
costs,O
would,O
be,O
:,O
,O
Portfolio,O
Turnover,O
:,O
The,O
Fund,O
pays,O
transaction,O
costs,O
",",O
such,O
as,O
commissions,O
",",O
when,O
it,O
buys,O
and,O
sells,O
securities,O
(,O
or,O
turns,O
over,O
its,O
portfolio,O
),O
.,O
,O
A,O
higher,O
portfolio,O
turnover,O
may,O
indicate,O
higher,O
transaction,O
costs,O
and,O
may,O
result,O
in,O
higher,O
taxes,O
when,O
shares,O
are,O
held,O
in,O
a,O
taxable,O
account,O
.,O
,O
These,O
costs,O
",",O
which,O
are,O
not,O
reflected,O
in,O
annual,O
fund,O
operating,O
expenses,O
or,O
in,O
the,O
example,O
",",O
affect,O
the,O
Fund,O
s,O
performance,O
.,O
,O
During,O
the,O
most,O
recent,O
fiscal,O
year,O
",",O
the,O
Fund,O
s,O
portfolio,O
turnover,O
rate,O
was,O
99,O
%,O
of,O
the,O
average,O
value,O
of,O
its,O
portfolio,O
.,O
,O
Principal,O
Investment,O
Strategies,O
of,O
the,O
Fund,O
The,O
High,I-BUSINESS
Yield,I-BUSINESS
Fund,I-BUSINESS
invests,O
primarily,O
in,O
non-investment,O
grade,O
bonds,O
with,O
maturities,O
of,O
ten,O
years,O
or,O
less,O
.,O
,O
The,O
High,I-BUSINESS
Yield,I-BUSINESS
Fund,I-BUSINESS
normally,O
invests,O
at,O
least,O
80,O
%,O
of,O
its,O
assets,O
in,O
high,O
yield,O
bonds,O
.,O
,O
The,O
high,O
yield,O
securities,O
(,O
commonly,O
called,O
junk,O
bonds,O
),O
acquired,O
by,O
the,O
High,I-BUSINESS
Yield,I-BUSINESS
Fund,I-BUSINESS
will,O
generally,O
be,O
in,O
the,O
lower,O
rating,O
categories,O
of,O
the,O
major,O
rating,O
agencies,O
(,O
BB,O
or,O
lower,O
by,O
Standard,I-BUSINESS
&,I-BUSINESS
Poor,I-BUSINESS
s,I-BUSINESS
or,O
Ba,O
or,O
lower,O
by,O
Moody,I-BUSINESS
s,I-BUSINESS
),O
or,O
will,O
be,O
determined,O
by,O
the,O
High,I-BUSINESS
Yield,I-BUSINESS
Fund,I-BUSINESS
management,O
team,O
to,O
be,O
of,O
similar,O
quality,O
.,O
,O
Split,O
rated,O
bonds,O
will,O
be,O
considered,O
to,O
have,O
the,O
higher,O
credit,O
rating,O
.,O
,O
The,O
High,I-BUSINESS
Yield,I-BUSINESS
Fund,I-BUSINESS
may,O
invest,O
up,O
to,O
10,O
%,O
of,O
its,O
assets,O
in,O
non-dollar,O
denominated,O
bonds,O
of,O
issuers,O
located,O
outside,O
of,O
the,O
United,I-LOCATION
States,I-LOCATION
.,O
,O
The,O
High,I-BUSINESS
Yield,I-BUSINESS
Fund,I-BUSINESS
s,O
investment,O
in,O
non-dollar,O
denominated,O
bonds,O
may,O
be,O
on,O
a,O
currency,O
hedged,O
or,O
unhedged,O
basis,O
.,O
,O
To,O
add,O
additional,O
diversification,O
",",O
the,O
management,O
team,O
can,O
invest,O
in,O
a,O
wide,O
range,O
of,O
securities,O
including,O
corporate,O
bonds,O
",",O
mezzanine,O
investments,O
",",O
collateralized,O
bond,O
obligations,O
",",O
bank,O
loans,O
and,O
mortgage-backed,O
and,O
asset-backed,O
securities,O
.,O
,O
The,O
High,I-BUSINESS
Yield,I-BUSINESS
Fund,I-BUSINESS
can,O
also,O
invest,O
",",O
to,O
the,O
extent,O
consistent,O
with,O
its,O
investment,O
goal,O
",",O
in,O
non-U.S.,I-MISCELLANEOUS
and,O
emerging,O
market,O
securities,O
and,O
currencies,O
.,O
,O
The,O
High,I-BUSINESS
Yield,I-BUSINESS
Fund,I-BUSINESS
may,O
invest,O
in,O
securities,O
of,O
any,O
rating,O
",",O
and,O
may,O
invest,O
up,O
to,O
10,O
%,O
of,O
its,O
assets,O
(,O
measured,O
at,O
the,O
time,O
of,O
investment,O
),O
in,O
distressed,O
securities,O
that,O
are,O
in,O
default,O
or,O
the,O
issuers,O
of,O
which,O
are,O
in,O
bankruptcy,O
.,O
,O
The,O
High,I-BUSINESS
Yield,I-BUSINESS
Fund,I-BUSINESS
may,O
buy,O
or,O
sell,O
options,O
or,O
futures,O
on,O
a,O
security,O
or,O
an,O
index,O
of,O
securities,O
",",O
or,O
enter,O
into,O
credit,O
default,O
swaps,O
and,O
interest,O
rate,O
or,O
foreign,O
currency,O
transactions,O
",",O
including,O
swaps,O
(,O
collectively,O
",",O
commonly,O
known,O
as,O
derivatives,O
),O
.,O
,O
The,O
High,I-BUSINESS
Yield,I-BUSINESS
Fund,I-BUSINESS
may,O
seek,O
to,O
obtain,O
market,O
exposure,O
to,O
the,O
securities,O
in,O
which,O
it,O
primarily,O
invests,O
by,O
entering,O
into,O
a,O
series,O
of,O
purchase,O
and,O
sale,O
contracts,O
or,O
by,O
using,O
other,O
investment,O
techniques,O
(,O
such,O
as,O
reverse,O
repurchase,O
agreements,O
or,O
dollar,O
rolls,O
),O
.,O
,O
The,O
High,I-BUSINESS
Yield,I-BUSINESS
Fund,I-BUSINESS
may,O
engage,O
in,O
active,O
and,O
frequent,O
trading,O
of,O
portfolio,O
securities,O
to,O
achieve,O
its,O
primary,O
investment,O
strategies,O
.,O
,O
Principal,O
Risks,O
of,O
Investing,O
in,O
the,O
Fund,O
Risk,O
is,O
inherent,O
in,O
all,O
investing,O
.,O
,O
The,O
value,O
of,O
your,O
investment,O
in,O
the,O
Fund,O
",",O
as,O
well,O
as,O
the,O
amount,O
of,O
return,O
you,O
receive,O
on,O
your,O
investment,O
",",O
may,O
fluctuate,O
significantly,O
from,O
day,O
to,O
day,O
and,O
over,O
time,O
.,O
,O
You,O
may,O
lose,O
part,O
or,O
all,O
of,O
your,O
investment,O
in,O
the,O
Fund,O
or,O
your,O
investment,O
may,O
not,O
perform,O
as,O
well,O
as,O
other,O
similar,O
investments,O
.,O
,O
The,O
following,O
is,O
a,O
summary,O
description,O
of,O
certain,O
risks,O
of,O
investing,O
in,O
the,O
Fund,O
.,O
,O
Bank,O
Loan,O
Risk,O
—,O
The,O
market,O
for,O
bank,O
loans,O
may,O
not,O
be,O
highly,O
liquid,O
and,O
a,O
Fund,O
may,O
have,O
difficulty,O
selling,O
them,O
.,O
,O
These,O
investments,O
expose,O
a,O
Fund,O
to,O
the,O
credit,O
risk,O
of,O
both,O
the,O
financial,O
institution,O
and,O
the,O
underlying,O
borrower,O
.,O
,O
Call,O
Risk,O
—,O
Call,O
risk,O
is,O
the,O
risk,O
that,O
",",O
during,O
a,O
period,O
of,O
falling,O
interest,O
rates,O
",",O
the,O
issuer,O
may,O
redeem,O
a,O
security,O
by,O
repaying,O
it,O
early,O
",",O
which,O
may,O
reduce,O
the,O
Fund,O
s,O
income,O
if,O
the,O
proceeds,O
are,O
reinvested,O
at,O
lower,O
interest,O
rates,O
.,O
,O
Collateralized,O
Bond,O
Obligation,O
Risk,O
—,O
The,O
pool,O
of,O
high,O
yield,O
securities,O
underlying,O
collateralized,O
bond,O
obligations,O
is,O
typically,O
separated,O
in,O
groupings,O
called,O
tranches,O
representing,O
different,O
degrees,O
of,O
credit,O
quality,O
.,O
,O
The,O
higher,O
quality,O
tranches,O
have,O
greater,O
degrees,O
of,O
protection,O
and,O
pay,O
lower,O
interest,O
rates,O
.,O
,O
The,O
lower,O
tranches,O
",",O
with,O
greater,O
risk,O
",",O
pay,O
higher,O
interest,O
rates,O
.,O
,O
Credit,O
Risk,O
—,O
Credit,O
risk,O
refers,O
to,O
the,O
possibility,O
that,O
the,O
issuer,O
of,O
a,O
security,O
will,O
not,O
be,O
able,O
to,O
make,O
payments,O
of,O
interest,O
and,O
principal,O
when,O
due,O
.,O
,O
Changes,O
in,O
an,O
issuer,O
s,O
credit,O
rating,O
or,O
the,O
market,O
s,O
perception,O
of,O
an,O
issuer,O
s,O
creditworthiness,O
may,O
also,O
affect,O
the,O
value,O
of,O
the,O
Fund,O
s,O
investment,O
in,O
that,O
issuer,O
.,O
,O
Derivatives,O
Risk,O
—,O
The,O
Fund,O
s,O
use,O
of,O
derivatives,O
may,O
reduce,O
the,O
Fund,O
s,O
returns,O
and/or,O
increase,O
volatility,O
.,O
,O
Volatility,O
is,O
defined,O
as,O
the,O
characteristic,O
of,O
a,O
security,O
",",O
an,O
index,O
or,O
a,O
market,O
to,O
fluctuate,O
significantly,O
in,O
price,O
within,O
a,O
short,O
time,O
period,O
.,O
,O
A,O
risk,O
of,O
the,O
Fund,O
s,O
use,O
of,O
derivatives,O
is,O
that,O
the,O
fluctuations,O
in,O
their,O
values,O
may,O
not,O
correlate,O
perfectly,O
with,O
the,O
overall,O
securities,O
markets,O
.,O
,O
Distressed,O
Securities,O
Risk,O
—,O
Distressed,O
securities,O
are,O
speculative,O
and,O
involve,O
substantial,O
risks,O
in,O
addition,O
to,O
the,O
risks,O
of,O
investing,O
in,O
junk,O
bonds,O
.,O
,O
The,O
Fund,O
will,O
generally,O
not,O
receive,O
interest,O
payments,O
on,O
the,O
distressed,O
securities,O
and,O
may,O
incur,O
costs,O
to,O
protect,O
its,O
investment,O
.,O
,O
In,O
addition,O
",",O
distressed,O
securities,O
involve,O
the,O
substantial,O
risk,O
that,O
principal,O
will,O
not,O
be,O
repaid,O
.,O
,O
Distressed,O
securities,O
and,O
any,O
securities,O
received,O
in,O
an,O
exchange,O
for,O
such,O
securities,O
may,O
be,O
subject,O
to,O
restrictions,O
on,O
resale,O
.,O
,O
Dollar,O
Rolls,O
Risk,O
—,O
Dollar,O
rolls,O
involve,O
the,O
risk,O
that,O
the,O
market,O
value,O
of,O
the,O
securities,O
that,O
the,O
Fund,O
is,O
committed,O
to,O
buy,O
may,O
decline,O
below,O
the,O
price,O
of,O
the,O
securities,O
the,O
Fund,O
has,O
sold,O
.,O
,O
These,O
transactions,O
may,O
involve,O
leverage,O
.,O
,O
Emerging,O
Markets,O
Risk,O
—,O
Emerging,O
markets,O
are,O
riskier,O
than,O
more,O
developed,O
markets,O
because,O
they,O
tend,O
to,O
develop,O
unevenly,O
and,O
may,O
never,O
fully,O
develop,O
.,O
,O
Investments,O
in,O
emerging,O
markets,O
may,O
be,O
considered,O
speculative,O
.,O
,O
Emerging,O
markets,O
are,O
more,O
likely,O
to,O
experience,O
hyperinflation,O
and,O
currency,O
devaluations,O
",",O
which,O
adversely,O
affect,O
returns,O
to,O
U.S.,I-LOCATION
.,O
,O
In,O
addition,O
",",O
many,O
emerging,O
securities,O
markets,O
have,O
far,O
lower,O
trading,O
volumes,O
and,O
less,O
liquidity,O
than,O
developed,O
markets,O
.,O
,O
Foreign,O
Securities,O
Risk,O
—,O
Foreign,O
investments,O
often,O
involve,O
special,O
risks,O
not,O
present,O
in,O
U.S.,I-LOCATION
investments,O
that,O
can,O
increase,O
the,O
chances,O
that,O
the,O
Fund,O
will,O
lose,O
money,O
.,O
,O
These,O
risks,O
include,O
:,O
,O
High,O
Portfolio,O
Turnover,O
Risk,O
—,O
The,O
Fund,O
may,O
engage,O
in,O
active,O
and,O
frequent,O
trading,O
of,O
its,O
portfolio,O
securities,O
.,O
,O
High,O
portfolio,O
turnover,O
(,O
more,O
than,O
100,O
%,O
),O
may,O
result,O
in,O
increased,O
transaction,O
costs,O
to,O
the,O
Fund,O
",",O
including,O
brokerage,O
commissions,O
",",O
dealer,O
mark-ups,O
and,O
other,O
transaction,O
costs,O
on,O
the,O
sale,O
of,O
the,O
securities,O
and,O
on,O
reinvestment,O
in,O
other,O
securities,O
.,O
,O
The,O
sale,O
of,O
Fund,O
portfolio,O
securities,O
may,O
result,O
in,O
the,O
realization,O
and,O
distribution,O
to,O
shareholders,O
of,O
higher,O
capital,O
gains,O
or,O
losses,O
as,O
compared,O
to,O
a,O
fund,O
with,O
less,O
active,O
trading,O
policies,O
.,O
,O
Given,O
the,O
frequency,O
of,O
sales,O
",",O
such,O
gain,O
or,O
loss,O
will,O
likely,O
be,O
short-term,O
capital,O
gain,O
or,O
loss,O
and,O
would,O
increase,O
an,O
investor,O
s,O
tax,O
liability,O
unless,O
shares,O
are,O
held,O
through,O
a,O
tax-deferred,O
or,O
exempt,O
vehicle,O
.,O
,O
These,O
effects,O
of,O
higher,O
than,O
normal,O
portfolio,O
turnover,O
may,O
adversely,O
affect,O
Fund,O
performance,O
.,O
,O
Interest,O
Rate,O
Risk,O
—,O
Interest,O
rate,O
risk,O
is,O
the,O
risk,O
that,O
prices,O
of,O
bonds,O
and,O
other,O
fixed-income,O
securities,O
will,O
increase,O
as,O
interest,O
rates,O
fall,O
",",O
and,O
decrease,O
as,O
interest,O
rates,O
rise,O
.,O
,O
Junk,O
Bonds,O
Risk,O
—,O
Although,O
junk,O
bonds,O
generally,O
pay,O
higher,O
rates,O
of,O
interest,O
than,O
investment,O
grade,O
bonds,O
",",O
junk,O
bonds,O
are,O
high,O
risk,O
investments,O
that,O
may,O
cause,O
income,O
and,O
principal,O
losses,O
for,O
the,O
Fund,O
.,O
,O
Leverage,O
Risk,O
—,O
Some,O
transactions,O
may,O
give,O
rise,O
to,O
a,O
form,O
of,O
leverage,O
.,O
,O
These,O
transactions,O
may,O
include,O
",",O
among,O
others,O
",",O
derivatives,O
",",O
and,O
may,O
expose,O
the,O
Fund,O
to,O
greater,O
risk,O
and,O
increase,O
its,O
costs,O
.,O
,O
To,O
mitigate,O
leverage,O
risk,O
",",O
the,O
Fund,O
management,O
team,O
will,O
segregate,O
liquid,O
assets,O
on,O
the,O
books,O
of,O
the,O
Fund,O
or,O
otherwise,O
cover,O
the,O
transactions,O
.,O
,O
The,O
use,O
of,O
leverage,O
may,O
cause,O
the,O
Fund,O
to,O
liquidate,O
portfolio,O
positions,O
when,O
it,O
may,O
not,O
be,O
advantageous,O
to,O
do,O
so,O
to,O
satisfy,O
its,O
obligations,O
or,O
to,O
meet,O
segregation,O
requirements,O
.,O
,O
Increases,O
and,O
decreases,O
in,O
the,O
value,O
of,O
the,O
Fund,O
s,O
portfolio,O
will,O
be,O
magnified,O
when,O
the,O
Fund,O
uses,O
leverage,O
.,O
,O
Liquidity,O
Risk,O
—,O
Liquidity,O
risk,O
refers,O
to,O
the,O
possibility,O
that,O
it,O
may,O
be,O
difficult,O
or,O
impossible,O
to,O
sell,O
certain,O
positions,O
at,O
an,O
acceptable,O
price,O
.,O
,O
Market,O
Risk,O
and,O
Selection,O
Risk,O
—,O
Market,O
risk,O
is,O
the,O
risk,O
that,O
one,O
or,O
more,O
markets,O
in,O
which,O
the,O
Fund,O
invests,O
will,O
go,O
down,O
in,O
value,O
",",O
including,O
the,O
possibility,O
that,O
the,O
markets,O
will,O
go,O
down,O
sharply,O
and,O
unpredictably,O
.,O
,O
Selection,O
risk,O
is,O
the,O
risk,O
that,O
the,O
securities,O
selected,O
by,O
Fund,O
management,O
will,O
underperform,O
the,O
markets,O
",",O
the,O
relevant,O
indices,O
or,O
the,O
securities,O
selected,O
by,O
other,O
funds,O
with,O
similar,O
investment,O
objectives,O
and,O
investment,O
strategies,O
.,O
,O
This,O
means,O
you,O
may,O
lose,O
money,O
.,O
,O
Mezzanine,O
Securities,O
Risk,O
—,O
Mezzanine,O
securities,O
carry,O
the,O
risk,O
that,O
the,O
issuer,O
will,O
not,O
be,O
able,O
to,O
meet,O
its,O
obligations,O
and,O
that,O
the,O
equity,O
securities,O
purchased,O
with,O
the,O
mezzanine,O
investments,O
may,O
lose,O
value,O
.,O
,O
Mortgage-,O
and,O
Asset-Backed,O
Securities,O
Risks,O
—,O
Mortgage-,O
and,O
asset-backed,O
securities,O
represent,O
interests,O
in,O
pools,O
of,O
mortgages,O
or,O
other,O
assets,O
",",O
including,O
consumer,O
loans,O
or,O
receivables,O
held,O
in,O
trust,O
.,O
,O
Mortgage-backed,O
securities,O
are,O
subject,O
to,O
prepayment,O
risk,O
and,O
extension,O
risk,O
.,O
,O
Prepayment,O
risk,O
is,O
the,O
risk,O
that,O
",",O
when,O
interest,O
rates,O
fall,O
",",O
certain,O
types,O
of,O
obligations,O
will,O
be,O
paid,O
off,O
by,O
the,O
obligor,O
more,O
quickly,O
than,O
originally,O
anticipated,O
and,O
the,O
Fund,O
may,O
have,O
to,O
invest,O
the,O
proceeds,O
in,O
securities,O
with,O
lower,O
yields,O
.,O
,O
Extension,O
risk,O
is,O
the,O
risk,O
that,O
",",O
when,O
interest,O
rates,O
rise,O
",",O
certain,O
obligations,O
will,O
be,O
paid,O
off,O
by,O
the,O
obligor,O
more,O
slowly,O
than,O
anticipated,O
causing,O
the,O
value,O
of,O
these,O
securities,O
to,O
fall,O
.,O
,O
Small,O
movements,O
in,O
interest,O
rates,O
(,O
both,O
increases,O
and,O
decreases,O
),O
may,O
quickly,O
and,O
significantly,O
reduce,O
the,O
value,O
of,O
certain,O
mortgage-backed,O
securities,O
.,O
,O
These,O
securities,O
also,O
are,O
subject,O
to,O
risk,O
of,O
default,O
on,O
the,O
underlying,O
mortgage,O
",",O
particularly,O
during,O
periods,O
of,O
economic,O
downturn,O
.,O
,O
Repurchase,O
Agreements,O
",",O
Purchase,O
and,O
Sale,O
Contracts,O
Risks,O
—,O
If,O
the,O
other,O
party,O
to,O
a,O
repurchase,O
agreement,O
or,O
purchase,O
and,O
sale,O
contract,O
defaults,O
on,O
its,O
obligation,O
under,O
the,O
agreement,O
",",O
the,O
Fund,O
may,O
suffer,O
delays,O
and,O
incur,O
costs,O
or,O
lose,O
money,O
in,O
exercising,O
its,O
rights,O
under,O
the,O
agreement,O
.,O
,O
If,O
the,O
seller,O
fails,O
to,O
repurchase,O
the,O
security,O
in,O
either,O
situation,O
and,O
the,O
market,O
value,O
of,O
the,O
security,O
declines,O
",",O
the,O
Fund,O
may,O
lose,O
money,O
.,O
,O
Reverse,O
Repurchase,O
Agreements,O
Risk,O
—,O
Reverse,O
repurchase,O
agreements,O
involve,O
the,O
sale,O
of,O
securities,O
held,O
by,O
the,O
Fund,O
with,O
an,O
agreement,O
to,O
repurchase,O
the,O
securities,O
at,O
an,O
agreed-upon,O
price,O
",",O
date,O
and,O
interest,O
payment,O
.,O
,O
Reverse,O
repurchase,O
agreements,O
involve,O
the,O
risk,O
that,O
the,O
other,O
party,O
may,O
fail,O
to,O
return,O
the,O
securities,O
in,O
a,O
timely,O
manner,O
or,O
at,O
all,O
.,O
,O
The,O
Fund,O
could,O
lose,O
money,O
if,O
it,O
is,O
unable,O
to,O
recover,O
the,O
securities,O
and,O
the,O
value,O
of,O
the,O
collateral,O
held,O
by,O
the,O
Fund,O
",",O
including,O
the,O
value,O
of,O
the,O
investments,O
made,O
with,O
cash,O
collateral,O
",",O
is,O
less,O
than,O
the,O
value,O
of,O
securities,O
.,O
,O
These,O
events,O
could,O
also,O
trigger,O
adverse,O
tax,O
consequences,O
to,O
the,O
Fund,O
.,O
,O
Performance,O
Information,O
The,O
information,O
shows,O
you,O
how,O
the,O
Fund,O
s,O
performance,O
has,O
varied,O
year,O
by,O
year,O
and,O
provides,O
some,O
indication,O
of,O
the,O
risks,O
of,O
investing,O
in,O
the,O
Fund,O
.,O
,O
The,O
table,O
compares,O
the,O
Fund,O
s,O
performance,O
to,O
that,O
of,O
the,O
Barclays,I-MISCELLANEOUS
Capital,I-MISCELLANEOUS
U.S.,I-MISCELLANEOUS
Corporate,I-MISCELLANEOUS
High,I-MISCELLANEOUS
Yield,I-MISCELLANEOUS
2,I-MISCELLANEOUS
%,I-MISCELLANEOUS
Issuer,I-MISCELLANEOUS
Capped,I-MISCELLANEOUS
Index,I-MISCELLANEOUS
.,O
,O
As,O
with,O
all,O
such,O
investments,O
",",O
past,O
performance,O
(,O
before,O
and,O
after,O
taxes,O
),O
is,O
not,O
an,O
indication,O
of,O
future,O
results,O
.,O
,O
Sales,O
charges,O
are,O
not,O
reflected,O
in,O
the,O
bar,O
chart,O
.,O
,O
If,O
they,O
were,O
",",O
returns,O
would,O
be,O
less,O
than,O
those,O
shown,O
.,O
,O
However,O
",",O
the,O
table,O
includes,O
all,O
applicable,O
fees,O
and,O
sales,O
charges,O
.,O
,O
Updated,O
information,O
on,O
the,O
Fund,O
s,O
performance,O
can,O
be,O
obtained,O
by,O
visiting,O
http,O
:,O
//www.blackrock.com/funds,O
or,O
can,O
be,O
obtained,O
by,O
phone,O
at,O
800-882-0052,O
.,O
,O
During,O
the,O
period,O
shown,O
in,O
the,O
bar,O
chart,O
",",O
the,O
highest,O
return,O
for,O
a,O
quarter,O
was,O
17.16,O
%,O
(,O
quarter,O
ended,O
June,O
30,O
",",O
2009,O
),O
and,O
the,O
lowest,O
return,O
for,O
a,O
quarter,O
was,O
20.79,O
%,O
(,O
quarter,O
ended,O
December,O
31,O
",",O
2008,O
),O
.,O
,O
After-tax,O
returns,O
are,O
calculated,O
using,O
the,O
historical,O
highest,O
individual,O
federal,O
marginal,O
income,O
tax,O
rates,O
and,O
do,O
not,O
reflect,O
the,O
impact,O
of,O
state,O
and,O
local,O
taxes,O
.,O
,O
Actual,O
after-tax,O
returns,O
depend,O
on,O
the,O
investor,O
s,O
tax,O
situation,O
and,O
may,O
differ,O
from,O
those,O
shown,O
",",O
and,O
the,O
after-tax,O
returns,O
shown,O
are,O
not,O
relevant,O
to,O
investors,O
who,O
hold,O
their,O
shares,O
through,O
tax-deferred,O
arrangements,O
such,O
as,O
401,O
(,O
k,O
),O
plans,O
or,O
individual,O
retirement,O
accounts,O
.,O
,O
Investment,O
Manager,O
The,O
Fund,O
s,O
investment,O
manager,O
is,O
BlackRock,I-BUSINESS
Advisors,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
(,O
BlackRock,I-BUSINESS
),O
.,O
,O
The,O
Fund,O
s,O
sub-adviser,O
is,O
BlackRock,I-BUSINESS
Financial,I-BUSINESS
Management,I-BUSINESS
",",I-BUSINESS
Inc.,I-BUSINESS
,O
Where,O
applicable,O
",",O
BlackRock,I-BUSINESS
refers,O
also,O
to,O
the,O
Fund,O
s,O
sub-adviser,O
.,O
,O
Purchase,O
and,O
Sale,O
of,O
Fund,O
Shares,O
You,O
may,O
purchase,O
or,O
redeem,O
shares,O
of,O
the,O
Fund,O
each,O
day,O
the,O
New,I-BUSINESS
York,I-BUSINESS
Stock,I-BUSINESS
Exchange,I-BUSINESS
(,O
NYSE,I-BUSINESS
),O
is,O
open,O
.,O
,O
To,O
purchase,O
or,O
sell,O
shares,O
you,O
should,O
contact,O
your,O
financial,O
intermediary,O
or,O
financial,O
professional,O
",",O
or,O
",",O
if,O
you,O
hold,O
your,O
shares,O
through,O
the,O
Fund,O
",",O
you,O
should,O
contact,O
the,O
Fund,O
by,O
phone,O
at,O
(,O
800,O
),O
537-4942,O
",",O
by,O
mail,O
(,O
c/o,O
BlackRock,I-BUSINESS
Funds,I-BUSINESS
",",O
P.O,O
.,O
,O
Box,O
9819,O
",",O
Providence,I-LOCATION
",",O
Rhode,I-LOCATION
Island,I-LOCATION
02940-8019,O
),O
",",O
or,O
by,O
the,O
Internet,I-MISCELLANEOUS
at,O
www.blackrock.com/funds,O
.,O
,O
The,O
Fund,O
s,O
initial,O
and,O
subsequent,O
investment,O
minimums,O
generally,O
are,O
as,O
follows,O
",",O
although,O
the,O
Fund,O
may,O
reduce,O
or,O
waive,O
the,O
minimums,O
in,O
some,O
cases,O
:,O
,O
Tax,O
Information,O
The,O
Fund,O
s,O
dividends,O
and,O
distributions,O
may,O
be,O
subject,O
to,O
federal,O
income,O
taxes,O
and,O
may,O
be,O
taxed,O
as,O
ordinary,O
income,O
or,O
capital,O
gains,O
",",O
unless,O
you,O
are,O
a,O
tax-exempt,O
investor,O
or,O
are,O
investing,O
through,O
a,O
retirement,O
plan,O
",",O
in,O
which,O
case,O
you,O
may,O
be,O
subject,O
to,O
federal,O
income,O
tax,O
upon,O
withdrawal,O
from,O
such,O
tax,O
deferred,O
arrangements,O
.,O
,O
Payments,O
to,O
Broker/Dealers,O
and,O
Other,O
Financial,O
Intermediaries,O
If,O
you,O
purchase,O
shares,O
of,O
the,O
Fund,O
through,O
a,O
broker-dealer,O
or,O
other,O
financial,O
intermediary,O
",",O
the,O
Fund,O
and,O
BlackRock,I-BUSINESS
Investments,I-BUSINESS
",",I-BUSINESS
LLC,I-BUSINESS
",",O
the,O
Fund,O
s,O
distributor,O
",",O
or,O
its,O
affiliates,O
may,O
pay,O
the,O
intermediary,O
for,O
the,O
sale,O
of,O
Fund,O
shares,O
and,O
other,O
services,O
.,O
,O
These,O
payments,O
may,O
create,O
a,O
conflict,O
of,O
interest,O
by,O
influencing,O
the,O
broker-dealer,O
or,O
other,O
financial,O
intermediary,O
and,O
your,O
individual,O
financial,O
professional,O
to,O
recommend,O
the,O
Fund,O
over,O
another,O
investment,O
.,O
,O
Ask,O
your,O
individual,O
financial,O
professional,O
or,O
visit,O
your,O
financial,O
intermediary,O
s,O
website,O
for,O
more,O
information,O
.,O
,O
The,O
Fund,O
s,O
prospectus,O
and,O
statement,O
of,O
additional,O
information,O
",",O
both,O
dated,O
January,O
28,O
",",O
2010,O
",",O
are,O
incorporated,O
by,O
reference,O
into,O
this,O
Summary,O
Prospectus,O
.,O
,O