Document:

_

Exhibit 10.2

PROMISSORY NOTE

		
	$______________.00

	_________  , 2009

 Wellington, Florida

FOR VALUE RECEIVED, The QUANTUM GROUP, INC., a Nevada corporation (“Quantum” or the “Borrower”) promises to pay to the order of          (“Lender”) the principal sum of ________________ Thousand and no/100ths Dollars ($_____________.00) (the “Obligation”). No interest shall accrue during the term of this Note, except as otherwise provided herein. In lieu of interest hereon, Borrower hereby promises to pay to Lender the principal sum of _________________________ and _____/100ths Dollars ($___________.__) as payment in full (the “Principal Payment” or “Principal”). The difference between the Obligation and the Principal Payment shall be treated as “original issue discount” and be reported as interest income over the term of this Note. 

1.

Maturity Date. The Principal Payment shall be due and payable on __________, 2009 (the “Maturity Date”). In the event the Obligation has not been paid in full by such Maturity Date, the Obligation, plus interest accruing from the date hereof through the date of payment at the rate of Fifteen Percent (15%), compounded monthly and on the basis of a 360-day year of twelve 30-day months, in arrears, on a proportionate basis, shall thereafter be payable Sixty (60) days after demand for payment by the Lender. 

2.

Prepayment.   Borrower shall prepay any or all amounts due under this Note at the closing of any public or private financing for which the Company receives gross proceeds of at least $2,000,000.

3.

Method of Payment.  Any payment hereunder shall be made by certified or bank cashier’s check unless Lender has provided Borrower with appropriate wire instructions, in which event, the payment shall be made by wire transfer of “same day” funds.  

4.

Default.  In the event of an occurrence of any event of default specified below, the Principal Payment shall become immediately due and payable without notice, except as specified below:

(a)

Borrower files a petition to take advantage of any insolvency act; makes an assignment for the benefit of its creditors; commences a proceeding for the appointment of a receiver, trustee, liquidator or conservator of itself of a whole or any substantial part of its property; files a petition or answer seeking reorganization or arrangement or similar relief under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state.

(b)

A court of competent jurisdiction enters an order, judgment or decree appointing a custodian, receiver, trustee, liquidator or conservator of Borrower or of the whole or any substantial part of its properties, or approves a petition filed against Borrower seeking reorganization or arrangement or similar relief under the federal bankruptcy laws or any other applicable law or statute of the Untied States of America or any state; or if, under the provisions of any other law for the relief or aid of debtors, a court of competent jurisdiction assumes custody or control of Borrower or of the whole or any substantial part of its properties; or there is commenced against Borrower any proceeding for any of the foregoing relief and such proceeding or petition remains undismissed for a period of 30 days; or if Borrower by any act indicates its consent to or approval of any such proceeding or petition.

Page 2

(c)

If (i) any judgment remaining unpaid, unstayed or undismissed for a period of 60 days is rendered against Borrower which by itself or together with all other such judgments rendered against Borrower remaining unpaid, unstayed or undismissed for a period of 60 days, is in excess of $50,000, or (ii) there is any attachment or execution against Borrower’s properties remaining unstayed or undismissed for a period of 60 days which by itself or together with all other attachments and executions against Borrower’s properties remaining unstayed or undismissed for a period of 60 days is for an amount in excess of $50,000.

5.

Successors and Assigns.  The Note is transferable and assignable by Lender or any subsequent assignee. All covenants, agreements and undertakings in the Note by or on behalf of any of the parties shall bind and inure to the benefit of the respective successors and assigns of the parties whether so expressed or not. 

6.

Notices.  Any and all notices, requests, consents and demands required or permitted to be given hereunder shall be in writing and shall be deemed given and received (i) upon personal delivery, (ii) upon the first business day following the receipt of confirmation of facsimile transmission to the telefax number or e-mail address listed below, or (iii) upon the first business day after deposit with an overnight courier for next morning delivery, or (iv) upon the third business day after deposit in the United States mail, by certified or registered mail, postage prepaid.

If to the Lender:

					
	 
	 

	 
	 

	 
	 

	 
	Attn:  

	 

	 
	Telephone:

	 

	 
	Facsimile:  

	 

	 
	E-Mail:  

	 

	 
	 
	 

If to the Borrower:

The Quantum Group, Inc.

3420 Fairlane Farms Road, Suite C

Wellington, Florida 33414

Attn:  Donald B. Cohen

Telephone:  (561) 798-988

Facsimile:  (561) 828-0454

E-Mail:  

Any party may change by notice the address to which notices to that party are to be addressed by notifying all of the other parties are provided above.

 

7.

Waiver/Amendment.  Borrower hereby waives presentment for payment, demand, protest and notice of protest for nonpayment of the Note and consents to any extension or postponement of the time of payment or any other indulgence. The Note may only be amended or modified by written agreement signed by Borrower and the Lender.

Page 3

8.

Expenses.  In any action or proceeding for breach of the Note, including nonpayment, the prevailing party in any such dispute shall be entitled to recover all reasonable costs and attorney fees incurred in connection with such action. In addition, Lender shall be entitled to recover from Borrower all reasonable costs of collection, including without limitation, legal fees and expenses incurred in any bankruptcy and/or state insolvency proceeding.

9.

Choice of Law.  The Note shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Florida.  The parties agree that venue for any suit, action, proceeding or litigation arising out of or in relation to this Note will be in any federal or state court in the state of Florida having subject matter jurisdiction, and the parties hereby submit to the jurisdiction of that Court. 

10.

       Optional Equity Conversion. The Lender will have the right to convert any or all of the Principal Payment at Lenders discretion for Common Shares of Borrower at a price of $0.50 per share by notifying the Borrower in writing at any time prior to date of Maturity. All Common Shares will issue as 144 restricted shares as the term is defined by the Securities and Exchange Commission.  

WITH RESPECT TO ANY CLAIM OR ACTION ARISING UNDER THIS NOTE, BORROWER HEREBY (A) IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL OR STATE COURTS LOCATED IN THE STATE OF FLORIDA (B) IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE BROUGHT IN ANY SUCH COURT, IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER IRREVOCABLY WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH CLAIM, SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY. 

***SIGNATURE ON FOLLOWING PAGE***

Page 4

IN WITNESS WHEREOF, the Note has been executed and delivered on the date specified on the first page hereof by the duly authorized representative of Borrower.

			
	 
	“BORROWER”

	 
	 

	 
	The Quantum Group, Inc.

a Nevada corporation

	 
	 

	 
	 
	 

	 
	By:  

	 

	 
	 
	 

	 
	Its:

	 

		
	Accepted:

	 

	“LENDER”

	 
	 

	Name:

	 

	 
	 

	By:  

	 

	 
	 

	Its:Exhibit
4.1

    

    Share
Incentive Plan, as Amended and Restated as of May 14, 2009.

    

    CHINA
SUNERGY CO., LTD.

     

    SHARE
INCENTIVE PLAN

     

    ARTICLE
1

     

    PURPOSE

     

    The
purpose of the China Sunergy Co., Ltd. Share Incentive Plan (the “Plan”) is to promote
the success and enhance the value of China Sunergy Co., Ltd., a company formed
under the laws of the Cayman Islands (the “Company”) by linking
the personal interests of the members of the Board, Employees, and Consultants
to those of Company shareholders and by providing such individuals with an
incentive for outstanding performance to generate superior returns to Company
shareholders.  The Plan is further intended to provide flexibility to
the Company in its ability to motivate, attract, and retain the services of
members of the Board, Employees, and Consultants upon whose judgment, interest,
and special effort the successful conduct of the Company’s operation is largely
dependent.

     

    ARTICLE
2

     

    DEFINITIONS
AND CONSTRUCTION

     

    Wherever
the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise.  The singular
pronoun shall include the plural where the context so indicates.

     

    2.1           “Applicable Laws”
means the legal requirements relating to the Plan and the Awards under
applicable provisions of the corporate, securities, tax and other laws, rules,
regulations and government orders, and the rules of any applicable stock
exchange or national market system, of any jurisdiction applicable to Awards
granted to residents therein.

     

    2.2           “Award” means an
Option award granted to a Participant pursuant to the Plan.

     

    2.3           “Award Agreement”
means any written agreement, contract, or other instrument or document
evidencing an Award, including through electronic medium.

     

    2.4           “Board” means the
Board of Directors of the Company.

     

    2.5           “Change in
Control” means a change in
ownership or control of the Company after the Registration Date effected through
either of the following transactions:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (a)           the
direct or indirect acquisition by any person or related group of persons (other
than an acquisition from or by the Company or by a Company-sponsored employee
benefit plan or by a person that directly or indirectly controls, is controlled
by, or is under common control with, the Company) of beneficial ownership
(within the meaning of Rule 13d-3 of the Exchange Act) of securities
possessing more than fifty percent (50%) of the total combined voting power of
the Company’s outstanding securities pursuant to a tender or exchange offer made
directly to the Company’s shareholders which a majority of the Incumbent Board
(as defined below) who are not affiliates or associates of the offeror under
Rule 12b-2 promulgated under the Exchange Act do not recommend such
shareholders accept, or

     

    (b)           the
individuals who, as of the Effective Date, are members of the Board (the
“Incumbent Board”), cease for any reason to constitute at least fifty percent
(50%) of the Board; provided that if the election, or nomination for election by
the Company’s shareholders, of any new member of the Board is approved by a vote
of at least fifty percent (50%) of the Incumbent Board, such new member of the
Board shall be considered as a member of the Incumbent Board.

     

    2.6           “Code” means the
Internal Revenue Code of 1986 of the United States, as amended.

     

    2.7           “Committee” means the
committee of the Board described in Article 8.

     

    2.8           “Consultant” means any
consultant or adviser if: (a) the consultant or adviser renders bona fide
services to a Service Recipient; (b) the services rendered by the consultant or
adviser are not in connection with the offer or sale of securities in a
capital-raising transaction and do not directly or indirectly promote or
maintain a market for the Company’s securities; and (c) the consultant or
adviser is a natural person who has contracted directly with the Service
Recipient to render such services.

     

    2.9           “control” (including
the terms “controlled
by” and “under
common control with”) means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by contract or
otherwise.

     

    2.10         “Corporate
Transaction” means any of the following transactions, provided, however,
that the Committee shall determine under (d) and (e) whether multiple
transactions are related, and its determination shall be final, binding and
conclusive:

     

    (a)           an
amalgamation, arrangement or consolidation or scheme of arrangement in which the
Company is not the surviving entity, except for a transaction the principal
purpose of which is to change the jurisdiction in which the Company is
incorporated;

     

    (b)           the
sale, transfer or other disposition of all or substantially all of the assets of
the Company;

     

    (c)           the
complete liquidation or dissolution of the Company;

     

    (d)           any
reverse takeover or series of related transactions culminating in a reverse
takeover (including, but not limited to, a tender offer followed by a reverse
takeover) in which the Company is the surviving entity but (A) the Ordinary
Shares outstanding immediately prior to such takeover are converted or exchanged
by virtue of the takeover into other property, whether in the form of
securities, cash or otherwise, or (B) in which securities possessing more
than fifty percent (50%) of the total combined voting power of the Company’s
outstanding securities are transferred to a person or persons different from
those who held such securities immediately prior to such takeover or the initial
transaction culminating in such takeover, but excluding any such transaction or
series of related transactions that the Committee determines shall not be a
Corporate Transaction; or

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (e)           acquisition
in a single or series of related transactions by any person or related group of
persons (other than the Company or by a Company-sponsored employee benefit plan)
of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act)
of securities possessing more than fifty percent (50%) of the total combined
voting power of the Company’s outstanding securities but excluding any such
transaction or series of related transactions that the Committee determines
shall not be a Corporate Transaction.

     

    2.11         “Disability” means that the health
status of the Participant falls within the definition of long-term disability
under the Service Recipient’s  long-term disability insurance program,
as it may be amended from time to time, to which the Participant provides
services regardless of whether the Participant is covered by such
policy.  If the Service Recipient to which the Participant provides
service does not have a long-term disability plan in place, “Disability” means
that a Participant is unable to carry out the responsibilities and functions of
the position held by the Participant by reason of any medically determinable
physical or mental impairment for a period of not less than ninety (90)
consecutive days.  A Participant will not be considered to have
incurred a Disability unless he or she furnishes proof of such impairment
sufficient to satisfy the Committee in its discretion.

     

    2.12         “Effective Date” shall
have the meaning set forth in Section 9.1.

     

    2.13         “Employee” means any
person, including an officer or member of the Board of the Company, any
Subsidiary of the Company, who is in the employ of a Service Recipient, subject
to the control and direction of the Service Recipient as to both the work to be
performed and the manner and method of performance.  The payment of a
director’s fee by a Service Recipient shall not be sufficient to constitute
“employment” by the Service Recipient.

     

    2.14         “Exchange Act” means
the Securities Exchange Act of 1934 of the United States, as
amended.

     

    2.15         “Fair Market Value”
means, as of any date, the value of Shares determined as follows:

     

    (a)           If
the Shares are listed on one or more established stock exchanges or national
market systems, its Fair Market Value shall be the average closing sales price
for such shares (or the closing bid, if no sales were reported) for the five
trading days as quoted on the principal exchange or system on which the Shares
are listed (as determined by the Committee) immediately prior to the date of
determination (or, if no closing sales price or closing bid was reported for
such days, on the last five trading days such closing sales price or closing bid
was reported), as reported in The Wall Street Journal or such other source as
the Committee deems reliable;

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (b)           If
the Shares are regularly quoted on an automated quotation system (including the
OTC Bulletin Board) or by a recognized securities dealer, its Fair Market Value
shall be the average closing sales price for such shares as quoted on such
system or by such securities dealer for the five trading days immediately prior
to the date of determination, but if selling prices are not reported, the Fair
Market Value of an Ordinary Share shall be the mean between the high bid and low
asked prices for the Ordinary Shares on such days prior to the date of
determination (or, if no such prices were reported on such days, on the last
five days such prices were reported), as reported in The Wall Street Journal or
such other source as the Committee deems reliable; or

     

    (c)           In
the absence of an established market for the Shares of the type described in (a)
and (b), above, the Fair Market Value thereof shall be determined by the
Committee in good faith and in its discretion by reference to (i) the placing
price of the latest private placement of the Shares and the development of the
Company’s business operations and the general economic and market conditions
since such latest private placement, (ii) other third party transactions
involving Shares and the development of the company’s business operation and the
general economic and market conditions since such sale, (iii) an independent
valuation of the Shares, or (iii) such other methodologies or information as the
Committee determines to be indicative of Fair Market Value.

     

    2.16         “Independent Director”
means a member of the Board who is not an Employee of the Company.

     

    2.17         “Initial Public
Offering” means the initial offering of the Company’s Ordinary Shares to
the public on a reputable share exchange or national market system as approved
by the Board.

     

    2.18         “Option” means a right
granted to a Participant pursuant to Article 5 of the Plan to purchase a
specified number of Shares at a specified price during specified time
periods.

     

    2.19         “Participant” means a
person who, as a member of the Board, Consultant or Employee, has been granted
an Award pursuant to the Plan.

     

    2.20         “Plan” means this
China Sunergy Co., Ltd. Share Incentive Award Plan, as it may be amended from
time to time.

     

    2.21         “Related Entity” means
any business, corporation, partnership, limited liability company or other
entity in which the Company or a Subsidiary of the Company holds a substantial
ownership interest, directly or indirectly but which is not a Subsidiary and
which the Board by a majority of not less than three quarters of the entire
Board designates as a Related Entity for purposes of the Plan.

     

    2.22         “Securities Act” means
the Securities Act of 1933 of the United States, as amended.

     

    2.23         “Service Recipient”
means the Company, any Subsidiary of the Company or any Related Entity to which
a Participant provides services as an Employee, Consultant or as a
Director.

     

    2.24         “Share” means the
ordinary shares of the Company, par value $0.0001 per share, and such other
securities of the Company that may be substituted for Shares pursuant to Article
7.

     

    2.25         “Subsidiary” means any
corporation or other entity of which a majority of the outstanding voting shares
or voting power is beneficially owned directly or indirectly by the
Company.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    ARTICLE
3

     

    SHARES
SUBJECT TO THE PLAN

     

    3.1           Number of
Shares.

     

    (a)           Subject
to the provisions of Article 7 and Section 3.1(b), the maximum aggregate number
of Shares which may be issued pursuant to all Awards is 2,500,000.

     

    (b)           To
the extent that an Award terminates, expires, or lapses for any reason, any
Shares subject to the Award shall again be available for the grant of an Award
pursuant to the Plan.  To the extent permitted by Applicable Law,
Shares issued in assumption of, or in substitution for, any outstanding awards
of any entity acquired in any form of business combination by the Company or any
Subsidiary of the Company shall not be counted against Shares available for
grant pursuant to the Plan.

     

    3.2           Shares
Distributed.  Any Shares distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Shares, treasury Shares
(subject to applicable law) or Shares purchased on the open
market.  Additionally, in the discretion of the Committee, American
Depository Shares in an amount equal to the number of Shares which otherwise
would be distributed pursuant to an Award may be distributed in lieu of Shares
in settlement of any Award.  If the number of Shares represented by an
American Depository Share is other than on a one-to-one basis, the limitations
of Section 3.1 shall be adjusted to reflect the distribution of American
Depository Shares in lieu of Shares.

     

    ARTICLE
4

     

    ELIGIBILITY
AND PARTICIPATION

     

    4.1           Eligibility.
Employees, Consultants, all members of the Board and candidates of members of
the Board are eligible to participate in this Plan, provided that a candidate of
member of the Board shall not be entitled to exercise any Award before he
becomes a member of the Board.

     

    4.2           Participation.  Subject
to the provisions of the Plan, the Committee may, from time to time, select from
among all eligible individuals, those to whom Awards shall be granted and shall
determine the nature and amount of each Award.  No individual shall
have any right to be granted an Award pursuant to this Plan.

     

    4.3           Jurisdictions.  In
order to assure the viability of Awards granted to Participants employed in
various jurisdictions, the Committee may provide for such special terms as it
may consider necessary or appropriate to accommodate differences in local law,
tax policy, or custom applicable in the jurisdiction in which the Participant
resides or is employed.  Moreover, the Committee may approve such
supplements to, or amendments, restatements, or alternative versions of, the
Plan as it may consider necessary or appropriate for such purposes without
thereby affecting the terms of the Plan as in effect for any other purpose;
provided, however, that
no such supplements, amendments, restatements, or alternative versions shall
increase the share limitations contained in Section 3.1 of the Plan.
Notwithstanding the foregoing, the Committee may not take any actions hereunder,
and no Awards shall be granted, that would violate any Applicable
Laws.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    ARTICLE
5

     

    OPTIONS

     

    5.1          
General.  The
Committee is authorized to grant Options to Participants on the following terms
and conditions:

     

    (a)           Exercise
Price.  The exercise price per Share subject to an Option shall
be determined by the Committee and set forth in the Award Agreement which may be
a fixed price or a variable price related to the Fair Market Value of the
Shares; provided, however, that no Option may be granted to an individual
subject to taxation in the United State at less than the Fair Market Value on
the date of grant. The exercise price per Share subject to an Option may be
adjusted in the absolute discretion of the Committee, the determination of which
shall be final, binding and conclusive. For the avoidance of doubt, to the
extent not prohibited by Applicable Law or any exchange rule, a repricing of
Options mentioned in the preceding sentence shall be effective without the
approval of the Company’s shareholders or the approval of the Participants.
Notwithstanding the foregoing, the exercise price per Share subject to an Option
shall not be increased without the approval of the Participants.

     

    (b)           Time and Conditions of
Exercise.  The Committee shall determine the time or times at
which an Option may be exercised in whole or in part, including exercise prior
to vesting; provided
that the term of any Option granted under the Plan shall not exceed ten
years.  The Committee shall also determine any conditions, if any,
that must be satisfied before all or part of an Option may be
exercised.

     

    (c)           Payment.  The
Committee shall determine the methods by which the exercise price of an Option
may be paid, the form of payment, including, without limitation, to the extent
permitted by the Applicable Laws, (i)  cash or check denominated in
U.S. Dollars, (ii) cash or check in Chinese Renminbi, (iii) cash or check
denominated in any other local currency as approved by the Committee, (iv)
Shares held for such period of time as may be required by the Committee in order
to avoid adverse financial accounting consequences and having a Fair Market
Value on the date of delivery equal to the aggregate exercise price of the
Option or exercised portion thereof, (v) after the Shares are listed on a
regulated securities exchange or are otherwise publicly traded  the
delivery of a notice that the Participant has placed a market sell order with a
broker with respect to Shares then issuable upon exercise of the Option, and
that the broker has been directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction of the Option exercise
price; provided that
payment of such proceeds is then made to the Company upon settlement of such
sale, or (vi) any combination of the foregoing.  Notwithstanding any
other provision of the Plan to the contrary, no Participant who is a member of
the Board or an “executive officer” of the Company within the meaning of Section
13(k) of the Exchange Act shall be permitted to pay the exercise price of an
Option in any method which would violate Section 13(k) of the Exchange
Act.

     

    (d)           Evidence of
Grant.  All Options shall be evidenced by an Award Agreement
between the Company and the Participant.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    ARTICLE
6

     

    PROVISIONS
APPLICABLE TO AWARDS

     

    6.1           Award
Agreement.  Awards under the Plan shall be evidenced by Award
Agreements that set forth the terms, conditions and limitations for each Award
which may include the term of an Award, the provisions applicable in the event
the Participant’s employment or service terminates, and the Company’s authority
to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an
Award.  Each Award Agreement shall be in the standard form set forth
in Annex A to this Plan.  Any Award Agreement may include such
additional provisions not inconsistent with the terms set forth in the standard
form as may be specified by the Committee.  Variation from or waiver
of any terms set forth in the standard form shall be approved by the Board by at
least a three quarters majority of the entire Board.

     

    6.2          
Limits on
Transfer.  No right or interest of a Participant in any Award
may be pledged, encumbered, or hypothecated to or in favor of any party other
than the Company or a Subsidiary, or shall be subject to any lien, obligation,
or liability of such Participant to any other party other than the Company or a
Subsidiary.  Except as otherwise provided by the Committee, no Award
shall be assigned, transferred, or otherwise disposed of by a Participant other
than by will or the laws of descent and distribution.  The Committee
by express provision in the Award or an amendment thereto may permit an Award to
be transferred to, exercised by and paid to certain persons or entities related
to the Participant, including but not limited to members of the Participant’s
family, charitable institutions, or trusts or other entities whose beneficiaries
or beneficial owners are members of the Participant’s family and/or charitable
institutions, or to such other persons or entities as may be expressly approved
by the unanimous approval of the Committee, pursuant to such conditions and
procedures as the Committee may establish in such approval.  Any
permitted transfer shall be subject to the condition that the Committee receive
evidence satisfactory to it that the transfer is being made for estate and/or
tax planning purposes (or to a “blind trust” in connection with the
Participant’s termination of employment or service with the Company or a
Subsidiary to assume a position with a governmental, charitable, educational or
similar non-profit institution) and on a basis consistent with the Company’s
lawful issue of securities.

     

    6.3           Beneficiaries.  Notwithstanding
Section 6.2, a Participant may, in the manner determined by the Committee,
designate a beneficiary to exercise the rights of the Participant and to receive
any distribution with respect to any Award upon the Participant’s
death.  A beneficiary, legal guardian, legal representative, or other
person claiming any rights pursuant to the Plan is subject to all terms and
conditions of the Plan and any Award Agreement applicable to the Participant,
except to the extent the Plan and Award Agreement otherwise provide, and to any
additional restrictions deemed necessary or appropriate by the
Committee.  If the Participant is married and resides in a community
property state, a designation of a person other than the Participant’s spouse as
his or her beneficiary with respect to more than 50% of the Participant’s
interest in the Award shall not be effective without the prior written consent
of the Participant’s spouse.  If no beneficiary has been designated or
survives the Participant, payment shall be made to the person entitled thereto
pursuant to the Participant’s will or the laws of descent and
distribution.  Subject to the foregoing, a beneficiary designation may
be changed or revoked by a Participant at any time provided the change or
revocation is filed with the Committee.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    6.4           Share
Certificates.  Notwithstanding anything herein to the contrary,
the Company shall not be required to issue or deliver any certificates
evidencing shares of Share pursuant to the exercise of any Award, unless and
until the Board has determined, with advice of counsel, that the issuance and
delivery of such certificates is in compliance with all Applicable Laws,
regulations of governmental authorities and, if applicable, the requirements of
any exchange on which the Shares are listed or traded.  All Share
certificates delivered pursuant to the Plan are subject to any stop-transfer
orders and other restrictions as the Committee deems necessary or advisable to
comply all Applicable Laws, and the rules of any national securities exchange or
automated quotation system on which the Shares are listed, quoted, or
traded.  The Committee may place legends on any Share certificate to
reference restrictions applicable to the Share.  In addition to the
terms and conditions provided herein, the Board may require that a Participant
make such reasonable covenants, agreements, and representations as the Board, in
its discretion, deems advisable in order to comply with any such laws,
regulations, or requirements. The Committee shall have the right to require any
Participant to comply with any timing or other restrictions with respect to the
settlement or exercise of any Award, including a window-period limitation, as
may be imposed in the discretion of the Committee.

     

    6.5           Paperless
Administration.  Subject to Applicable Laws, the Committee may
make Awards, provide applicable disclosure and procedures for exercise of Awards
by an internet website or interactive voice response system for the paperless
administration of Awards.

     

    6.6           Foreign
Currency.  A Participant may be required to provide evidence
that any currency used to pay the exercise price of any Award was acquired and
taken out of the jurisdiction in which the Participant resides in accordance
with Applicable Laws, including foreign exchange control laws and
regulations.  In the event the exercise price for an Award is paid in
Chinese Renminbi or other foreign currency, as permitted by the Committee, the
amount payable will be determined by conversion from U.S. dollars at the
official rate promulgated by the People’s Bank of China for Chinese Renminbi, or
for jurisdictions other than the Peoples Republic of China, the exchange rate as
selected by the Committee on the date of exercise.

     

    ARTICLE
7

     

    CHANGES
IN CAPITAL STRUCTURE

     

    7.1           Adjustments.  In
the event of any dividend, share split, combination or exchange of Shares,
amalgamation, arrangement or consolidation, spin-off, recapitalization or other
distribution (other than normal cash dividends) of Company assets to its
shareholders, or any other change affecting the shares of Shares or the share
price of a Share, the Committee shall make such proportionate and equitable
adjustments to (a) the aggregate number and type of shares that may be issued
under the Plan (including, but not limited to, adjustments of the limitations in
Section 3.1); (b) the terms and conditions of any outstanding Awards (including,
without limitation, any applicable performance targets or criteria with respect
thereto); and/or (c) the grant or exercise price per share for any outstanding
Awards under the Plan, as determined by the Committee.

     

    7.2           Acceleration upon a Change
of Control.  Except as may otherwise be provided in any Award
Agreement or any other written agreement entered into by and between the Company
and a Participant, if a Change of Control occurs and a Participant’s Awards are
not converted, assumed, or replaced by a successor, such Awards shall become
fully exercisable and all forfeiture restrictions on such Awards shall
lapse.  Upon, or in anticipation of, a Change of Control, the
Committee may in its sole discretion provide for (i) any and all Awards
outstanding hereunder to terminate at a specific time in the future and shall
give each Participant the right to exercise such Awards during a period of time
as the Committee shall determine, (ii) either the purchase of any Award for an
amount of cash equal to the amount that could have been attained upon the
exercise of such Award or realization of the Participant’s rights had such Award
been currently exercisable or payable or fully vested (and, for the avoidance of
doubt, if as of such date the Committee determines in good faith that no amount
would have been attained upon the exercise of such Award or realization of the
Participant’ s rights, then such Award may be terminated by the Company without
payment), (iii) the replacement of such Award with other rights or property
selected by the Committee in its sole discretion the assumption of or
substitution of such Award by the successor or surviving corporation, or a
parent or subsidiary thereof, with appropriate adjustments as to the number and
kind of Shares and prices, or (iv) provide for payment of Awards in cash based
on the value of Shares on the date of the Change of Control.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    7.3           Outstanding Awards –
Corporate Transactions.  In the event of a Corporate
Transaction, each Award will terminate upon the consummation of the Corporate
Transaction, unless the Award is assumed by the successor entity or parent
thereof in connection with the Corporate Transaction.  Except as
provided otherwise in an individual Award Agreement, in the event of a Corporate
Transaction and:

     

    (a)           the
Award either is (x)  assumed by the successor entity or parent thereof or
replaced with a comparable Award (as determined by the Committee) with respect
to shares of the capital shares of the successor entity or parent thereof or
(y)  replaced with a cash incentive program of the successor entity which
preserves the compensation element of such Award existing at the time of the
Corporate Transaction and provides for subsequent payout in accordance with the
same vesting schedule applicable to such Award, then such Award (if assumed),
the replacement Award (if replaced), or the cash incentive program automatically
shall become fully vested, exercisable and payable and be released from any
restrictions on transfer (other than transfer restrictions applicable to
Options) and repurchase or forfeiture rights, immediately upon termination of
the Participant’s employment or service with all Service Recipient within twelve
(12) months of the Corporate Transaction without cause; and

     

    (b)           For
each Award that is neither assumed nor replaced, such portion of the Award shall
automatically become fully vested and exercisable and be released from any
repurchase or forfeiture rights (other than repurchase rights exercisable at
Fair Market Value) for all of the Shares at the time represented by such portion
of the Award, immediately prior to the specified effective date of such
Corporate Transaction.

     

    7.4           Outstanding Awards – Other
Changes.  In the event of any other change in the
capitalization of the Company or corporate change other than those specifically
referred to in this Article 7, the Committee may, in its absolute discretion,
make such adjustments in the number and class of shares subject to Awards
outstanding on the date on which such change occurs and in the per share grant
or exercise price of each Award as the Committee may consider appropriate to
prevent dilution or enlargement of rights.

     

    7.5           No Other
Rights.  Except as expressly provided in the Plan, no
Participant shall have any rights by reason of any subdivision or consolidation
of Shares of any class, the payment of any dividend, any increase or decrease in
the number of shares of any class or any dissolution, liquidation, merger, or
consolidation of the Company or any other corporation.  Except as
expressly provided in the Plan or pursuant to action of the Committee under the
Plan, no issuance by the Company of shares of any class, or securities
convertible into shares of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number of shares subject to an Award
or the grant or exercise price of any Award.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    ARTICLE
8

     

    ADMINISTRATION

     

    8.1           Committee.  The
Plan shall be administered by the Compensation Committee appointed by the Board;
provided, however that the Compensation Committee may delegate to a committee
the authority to grant or amend Awards to Participants other than Independent
Directors and executive officers of the Company (such committee being the
“Committee”).  The Committee shall consist of at least two individuals
who are officers and/or directors of the Company.  Reference to the
Committee shall refer to the Board if the Compensation Committee has not been
appointed, or ceases to exist and the Board does not appoint a successor
Committee.  Notwithstanding the foregoing, the full Board, acting by
majority of its members in office shall conduct the general administration of
the Plan if required by Applicable Law, and with respect to Awards granted to
Independent Directors and executive officers of the Company and for purposes of
such Awards the term “Committee” as used in the Plan shall be deemed to refer to
the Board.  Notwithstanding the foregoing, following the Initial
Public Offering, the Committee shall consist solely of two or more members of
the Board each of whom is a Non-Employee Director and an “independent director”
under the rules of the principal securities market on which Shares are
traded.  Notwithstanding the foregoing, the full Board, acting by a
majority of its members in office, shall conduct the general administration of
the Plan with respect to all Awards granted to Independent Directors and for
purposes of such Awards the term “Committee” as used in this Plan shall be
deemed to refer to the Board.

     

    8.2           Action by the
Committee.  A majority of the Committee shall constitute a
quorum.  The acts of a majority of the members present at any meeting
at which a quorum is present, and acts approved in writing by a majority of the
Committee in lieu of a meeting, shall be deemed the acts of the
Committee.  Each member of the Committee is entitled to, in good
faith, rely or act upon any report or other information furnished to that member
by any officer or other employee of the Company or any Subsidiary, the Company’s
independent certified public accountants, or any executive compensation
consultant or other professional retained by the Company to assist in the
administration of the Plan.  No member of the Committee may act as to
matters under the Plan specifically relating to such member.  The
Company will bear the expenses in relation to the administration and execution
of the Plan.

     

    8.3           Authority of
Committee.  Subject to any specific designation in the Plan,
the Committee has the exclusive power, authority and discretion to:

     

    (a)           Designate
Participants to receive Awards;

     

    (b)           Determine
the type or types of Awards to be granted to each Participant;

     

    (c)           Determine
the number of Awards to be granted and the number of Shares to which an Award
will relate;

     

    (d)           Determine
the terms and conditions of any Award granted pursuant to the Plan, including,
but not limited to, the exercise price, grant price, or purchase price, any
restrictions or limitations on the Award, any schedule for lapse of forfeiture
restrictions or restrictions on the exercisability of an Award, and
accelerations or waivers thereof, any provisions related to non-competition and
recapture of gain on an Award, based in each case on such considerations as the
Committee in its sole discretion determines;

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (e)           Determine
whether, to what extent, and pursuant to what circumstances an Award may be
settled in, or the exercise price of an Award may be paid in, cash, Shares,
other Awards, or other property, or an Award may be canceled, forfeited, or
surrendered;

     

    (f)           Prescribe
the form of each Award Agreement, which need not be identical for each
Participant;

     

    (g)           Decide
all other matters that must be determined in connection with an
Award;

     

    (h)           Establish,
adopt, or revise any rules and regulations as it may deem necessary or advisable
to administer the Plan;

     

    (i)           Interpret
the terms of, and any matter arising pursuant to, the Plan or any Award
Agreement;

     

    (j)           Reduce
the exercise price per Share subject to an Option; and

     

    (k)           Make
all other decisions and determinations that may be required pursuant to the Plan
or as the Committee deems necessary or advisable to administer the
Plan.

     

    8.4           Decisions
Binding.  The Committee’s interpretation of the Plan, any
Awards granted pursuant to the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.  Benefits will be paid only if the
Committee determines, in its discretion, that the claimant is entitled to
them.

     

    ARTICLE
9

     

    EFFECTIVE
AND EXPIRATION DATE

     

    9.1           Effective
Date.  The Plan is effective as of the date the Plan is
approved by the Company’s shareholders (the “Effective
Date”).  The Plan will be deemed to be approved by the
shareholders if it receives the affirmative vote of the holders of a majority of
the share capital of the Company present or represented and entitled to vote at
a meeting duly held in accordance with the applicable provisions of the
Company’s Memorandum of Association and Articles of Association.

     

    9.2           Expiration
Date.  The Plan will expire on, and no Award may be granted
pursuant to the Plan after, the tenth anniversary of the Effective
Date.  Any Awards that are outstanding on the tenth anniversary of the
Effective Date shall remain in force according to the terms of the Plan and the
applicable Award Agreement.

     

    ARTICLE
10

     

    AMENDMENT,
MODIFICATION, AND TERMINATION

     

    10.1         Amendment, Modification, And
Termination.  With the approval of the Board, at any time and
from time to time, the Committee may terminate, amend or modify the Plan; provided, however, that (a)
to the extent necessary and desirable to comply with Applicable Laws, or stock
exchange rules, the Company shall obtain shareholder approval of any Plan
amendment in such a manner and to such a degree as required, and (b) shareholder
approval is required for any amendment to the Plan that (i) increases the number
of Shares available under the Plan (other than any adjustment as provided by
Article 7), (ii) permits the Committee to grant Options with an exercise price
that is below Fair Market Value on the date of grant, (iii) permits the
Committee to extend the term of the Plan or the exercise period for an Option
beyond ten years from the date of grant, or (iv) results in a material increase
in benefits or a change in eligibility requirements.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    10.2         Awards Previously
Granted.  Except with respect to amendments made pursuant to
Section 10.1, no termination, amendment, or modification of the Plan shall
adversely affect in any material way any Award previously granted pursuant to
the Plan without the prior written consent of the Participant.

     

    ARTICLE
11

     

    GENERAL
PROVISIONS

     

    11.1         No Rights to
Awards.  No Participant, employee, or other person shall have
any claim to be granted any Award pursuant to the Plan, and neither the Company
nor the Committee is obligated to treat Participants, employees, and other
persons uniformly.

     

    11.2         No Shareholders
Rights.  No Award gives the Participant any of the rights of a
Shareholder of the Company unless and until Shares are in fact issued to such
person in connection with such Award.

     

    11.3         Taxes.  No
Shares shall be delivered under the Plan to any Participant until such
Participant has made arrangements acceptable to the Committee for the
satisfaction of any income and employment tax withholding obligations under
Applicable Laws.  The Company or any Subsidiary shall have the
authority and the right to deduct or withhold, or require a Participant to remit
to the Company, an amount sufficient to satisfy federal, state, local and
foreign taxes (including the Participant’s payroll tax obligations) required or
permitted by law to be withheld with respect to any taxable event concerning a
Participant arising as a result of this Plan.  The Committee may in
its discretion and in satisfaction of the foregoing requirement allow a
Participant to elect to have the Company withhold Shares otherwise issuable
under an Award (or allow the return of Shares) having a Fair Market Value equal
to the sums required to be withheld.  Notwithstanding any other
provision of the Plan, the number of Shares which may be withheld with respect
to the issuance, vesting, exercise or payment of any Award (or which may be
repurchased from the Participant of such Award after such Shares were acquired
by the Participant from the Company) in order to satisfy the Participant’s
federal, state, local and foreign income and payroll tax liabilities with
respect to the issuance, vesting, exercise or payment of the Award shall, unless
specifically approved by the Committee, be limited to the number of Shares which
have a Fair Market Value on the date of withholding or repurchase equal to the
aggregate amount of such liabilities based on the minimum statutory withholding
rates for federal, state, local and foreign income tax and payroll tax purposes
that are applicable to such supplemental taxable income.

     

    11.4         No Right to Employment or
Services.  Nothing in the Plan or any Award Agreement shall
interfere with or limit in any way the right of the Service Recipient to
terminate any Participant’s employment or services at any time, nor confer upon
any Participant any right to continue in the employ or service of any Service
Recipient.

     

    11.5         Unfunded Status of
Awards.  The Plan is intended to be an “unfunded” plan for
incentive compensation.  With respect to any payments not yet made to
a Participant pursuant to an Award, nothing contained in the Plan or any Award
Agreement shall give the Participant any rights that are greater than those of a
general creditor of the Company or any Subsidiary.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    11.6         Indemnification.  To
the extent allowable pursuant to applicable law, each member of the Committee or
of the Board shall be indemnified and held harmless by the Company from any
loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by such member in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action or failure to act pursuant to the Plan and
against and from any and all amounts paid by him or her in satisfaction of
judgment in such action, suit, or proceeding against him or her; provided he or she gives the
Company an opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own
behalf.  The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
pursuant to the Company’s Memorandum of Association and Articles of Association,
as a matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.

     

    11.7         Relationship to other
Benefits.  No payment pursuant to the Plan shall be taken into
account in determining any benefits pursuant to any pension, retirement,
savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Subsidiary except to the extent otherwise expressly provided in
writing in such other plan or an agreement thereunder.

     

    11.8         Expenses.  The
expenses of administering the Plan shall be borne by the Company and its
Subsidiaries.

     

    11.9         Titles and
Headings.  The titles and headings of the Sections in the Plan
are for convenience of reference only and, in the event of any conflict, the
text of the Plan, rather than such titles or headings, shall
control.

     

    11.10       Fractional
Shares.  No fractional shares of Share shall be issued and the
Committee shall determine, in its discretion, whether cash shall be given in
lieu of fractional shares or whether such fractional shares shall be eliminated
by rounding up or down as appropriate.

     

    11.11       Limitations Applicable to
Section 16 Persons.  Notwithstanding any other provision of the
Plan, the Plan, and any Award granted or awarded to any Participant who is then
subject to Section 16 of the Exchange Act, shall be subject to any additional
limitations set forth in any applicable exemptive rule under Section 16 of the
Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that
are requirements for the application of such exemptive rule.  To the
extent permitted by applicable law, the Plan and Awards granted or awarded
hereunder shall be deemed amended to the extent necessary to conform to such
applicable exemptive rule.

     

    11.12       Government and Other
Regulations.  The obligation of the Company to make payment of
awards in Share or otherwise shall be subject to all Applicable Laws, rules, and
regulations, and to such approvals by government agencies as may be
required.  The Company shall be under no obligation to register any of
the Shares paid pursuant to the Plan under the Securities Act or any other
similar law in any applicable jurisdiction.  If the Shares paid
pursuant to the Plan may in certain circumstances be exempt from registration
pursuant to the Securities Actor other Applicable Laws the Company may restrict
the transfer of such shares in such manner as it deems advisable to ensure the
availability of any such exemption.

     

    11.13       Governing
Law.  The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the Cayman Islands.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    11.14       Section
409A.  To the extent that the Committee determines that any
Award granted under the Plan is or may become subject to Section 409A of the
Code, the Award Agreement evidencing such Award shall incorporate the terms and
conditions required by Section 409A of the Code.  To the extent
applicable, the Plan and the Award Agreements shall be interpreted in accordance
with Section 409A of the Code and the U.S. Department of Treasury regulations
and other interpretative guidance issued thereunder, including without
limitation any such regulation or other guidance that may be issued after the
Effective Date.  Notwithstanding any provision of the Plan to the
contrary, in the event that following the Effective Date the Committee
determines that any Award may be subject to Section 409A of the Code and related
Department of Treasury guidance (including such Department of Treasury guidance
as may be issued after the Effective Date), the Committee may adopt such
amendments to the Plan and the applicable Award agreement or adopt other
policies and procedures (including amendments, policies and procedures with
retroactive effect), or take any other actions, that the Committee determines is
necessary or appropriate to (a) exempt the Award from Section 409A of the Code
and /or preserve the intended tax treatment of the benefits provided with
respect to the Award, or (b) comply with the requirements of Section 409A of the
Code and related U.S. Department of Treasury guidance.

     

    11.15       Appendices.  The
Committee may approve such supplements, amendments or appendices to the Plan as
it may consider necessary or appropriate for purposes of compliance with
applicable laws or otherwise and such supplements, amendments or appendices
shall be considered a part of the Plan; provided, however, that no such
supplements shall increase the share limitations contained in Sections 3.1 and
3.3 of the Plan.

     

    *  *  *  *  *

     

    I hereby
certify that the foregoing Plan was duly (i) adopted by the Board of Directors
of the Company on April 24, 2007; (ii) approved by the shareholders of Company
on April 24, 2007, (iii) and amended by the Board of the Company on May 14,
2009.

     

    *  *  *  *  *

     

    Executed
on this 14th  day
of May, 2009.

                       

    
      
        	
                /s/Tingxiu Lu

              
	
                Chairman
      of the Board

              

      

    

    
      
         

      

      
        14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00160-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00160-of-00352.parquet"}]]