Index: lams_central/web/lams_authoring.swf
===================================================================
diff -u -rc41b98701f4bbfe9e71e5653ac295ea5c1edf5c3 -rc865453cba19c7f353a91ba411144403c914703c
Binary files differ
Index: lams_central/web/lams_authoring_library.swf
===================================================================
diff -u -rc41b98701f4bbfe9e71e5653ac295ea5c1edf5c3 -rc865453cba19c7f353a91ba411144403c914703c
Binary files differ
Index: lams_flash/src/central/flash/org/lamsfoundation/lams/authoring/cv/CanvasController.as
===================================================================
diff -u -rc41b98701f4bbfe9e71e5653ac295ea5c1edf5c3 -rc865453cba19c7f353a91ba411144403c914703c
--- lams_flash/src/central/flash/org/lamsfoundation/lams/authoring/cv/CanvasController.as	(.../CanvasController.as)	(revision c41b98701f4bbfe9e71e5653ac295ea5c1edf5c3)
+++ lams_flash/src/central/flash/org/lamsfoundation/lams/authoring/cv/CanvasController.as	(.../CanvasController.as)	(revision c865453cba19c7f353a91ba411144403c914703c)
@@ -180,7 +180,7 @@
 							if (ca._x > optionalOnCanvas[i].getVisibleWidth() || 
 								ca._x < -ca.getVisibleWidth() ||
 								ca._y < -ca.getVisibleHeight() - sequenceActivity.yCoord ||
-								ca._y > optionalOnCanvas[i].getVisibleHeight() - sequenceActivity.yCoord) {
+								ca._y > optionalOnCanvas[i].getVisibleHeight()) {
 								
 								ca.activity.xCoord = (_xmouse - _canvasModel.getPosition().x) - (_canvasModel.getCanvas().taWidth/2);
 								ca.activity.yCoord = (_ymouse - _canvasModel.getPosition().y) - (_canvasModel.getCanvas().taHeight/2);
Index: lams_flash/src/central/flash/org/lamsfoundation/lams/authoring/cv/CanvasModel.as
===================================================================
diff -u -rc41b98701f4bbfe9e71e5653ac295ea5c1edf5c3 -rc865453cba19c7f353a91ba411144403c914703c
--- lams_flash/src/central/flash/org/lamsfoundation/lams/authoring/cv/CanvasModel.as	(.../CanvasModel.as)	(revision c41b98701f4bbfe9e71e5653ac295ea5c1edf5c3)
+++ lams_flash/src/central/flash/org/lamsfoundation/lams/authoring/cv/CanvasModel.as	(.../CanvasModel.as)	(revision c865453cba19c7f353a91ba411144403c914703c)
@@ -413,6 +413,8 @@
 			fromActivity = _cv.ddm.getActivityByUIID(transitionObj.into.fromUIID);
 		} else if(transitionObj.into == null && transitionObj.out != null) {
 			ComplexActivity(sequence).firstActivityUIID = transitionObj.out.toUIID
+		} else if(transitionObj.out == null && transitionObj.into == null) {
+			ComplexActivity(sequence).firstActivityUIID = null;
 		}
 		
 		_cv.ddm.removeTransitionByConnection(ca.activity.activityUIID);