Document:

LOAN
      AGREEMENT

    

    This
      LOAN
      AGREEMENT is entered into as of October 20, 2008 between Sea Change Group,
      LLC,
      a New York limited liability company (“LENDER”) with its chief executive office
      located at 60 East 42nd
      Street
      New York, NY 10165 and Innopump, Inc., a Nevada corporation
      (Borrower),
      with its
      chief executive office located at 60 East 42nd
      Street
      New York, NY 10165.

    

    STATEMENT
      OF FACTS

    

    
      	 	
              1)

            	
              The
                LENDER, at the request and for the benefit of Borrower has entered
                into on
                the date hereof, a Loan and Security Agreement with JBCP-24 LLC (“Funding
                Source”) pursuant to which LENDER will obtain from the Funding Source a
                loan in the principal amount of
                $3,445,750.

            

    

    

    
      	 	
              2)

            	
              In
                order to obtain the consent of Gerhard Brugger to certain of the
                transactions contemplated by the above Loan and Security Agreement,
                the
                LENDER has entered into a Cash Collateral Agreement with the Funding
                Source pursuant to which $895,750 of the proceeds of the loan from
                the
                Funding Source will be held in a Cash Collateral Account. The Cash
                Collateral Account will secure certain payment obligations of LENDER
                to
                Gerhard Brugger pursuant to the License Agreement dated as of January
                1,
                2003 between LENDER and Gerhard
                Brugger.

            

    

    

    
      	 	
              3)

            	
              This
                Loan Agreement between Borrower and LENDER is entered into to provide
                to
                Borrower funds to enable Borrower to continue to exploit its agreement
                with LENDER and pursue its business plan acknowledging that the amounts
                being paid hereunder provide no excess to LENDER but only such funds
                as
                will enable LENDER to fully discharge its obligations (including
                expenses)
                under the Loan and Security
                Agreement.

            

    

    

    The
      parties agree as follows

    

    1.
      DEFINITIONS AND CONSTRUCTION

    

    1.1.
      Statement
      of Facts.
      The
      Statement of Facts set forth above is incorporated in and is hereby made a
      part
      of this Agreement.

    

    1.2.
      Terms.
      As used
      in this Agreement, the following terms shall have the following
      meanings:

    

    (a)
      Advances
      means
      all loans, advances and other financial accommodations by LENDER to or on
      account of the Borrower, including those under this Agreement.

    

    (b)
      Agreement
      means
      collectively this Loan Agreement, any concurrent or subsequent rider to this
      Loan Agreement, and any extensions, supplements, amendments, addenda or
      modifications to or in connection with this Loan Agreement or any such
      rider.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)
      Authorized
      Officer means
      any
      officer or other representative of Borrower authorized in a writing delivered
      to
      LENDER by an authorized representative of the Borrower to transact business
      with
      LENDER.

    

    (d)
      LENDER
      has
      the
      meaning set forth in the first paragraph above and includes Lender’s successors
      and assigns.

    

    (e)
      LENDER
      Expenses
      means
      all of the following: costs and expenses (whether taxes, assessments, insurance
      premiums or otherwise) required to be paid by Borrower under any of the Loan
      Documents which are paid or advanced by LENDER; filing, recording, publication,
      appraisal and search fees paid or incurred by LENDER in connection with LENDER's
      transactions with Borrower; actual costs and expenses incurred by LENDER in
      the
      disbursement or collection of funds to or from Borrower or its account debtors;
      charges resulting from the dishonor of checks; actual reasonable costs and
      reasonable expenses incurred by LENDER to correct any default or enforce any
      provision of the Loan Documents, and actual reasonable costs and reasonable
      expenses incurred by LENDER in enforcing or defending the Loan Documents or
      otherwise exercising its rights and remedies upon the existence of an Event
      of
      Default, including, but not limited to, actual reasonable costs and reasonable
      expenses incurred in connection with any proceeding, suit, enforcement of
      judgment, or appeal; and LENDER's reasonable attorneys' fees and expenses,
      incurred in advising, structuring, drafting, reviewing, administering, amending,
      modifying, terminating, enforcing, defending, or otherwise representing LENDER
      concerning the Loan Documents or the Obligations; and all costs, expenses and
      obligations (exclusive of any facility, closing and collateral monitoring fees
      which are being replaced by the facility, monitoring and commitment fees payable
      by Borrower hereunder) of LENDER incurred in obtaining from JBCP-24 LLC the
      funds it is advancing to Borrower pursuant to this Agreement.

    

    (f)
      Business
      Day
      means
      any day which is not a Saturday, Sunday, or other day on which banks in the
      State of New York are authorized or required to close.

    

    (g)
      Code
      means
      the
      New York Uniform Commercial Code, as amended or revised from time to
      time.

    

    (h)
      Daily
      Balance
      means
      the amount of the Obligations owed at the end of a given day.

    

    (i)
      Deposit
      Account
      shall
      have the meaning ascribed to such term in the Code.

    

    (j)
      Documents
      shall
      have the meaning ascribed to such term in the Code.

    

    (k)
      ERISA
      means
      the
      Employee Retirement Income Security Act of 1974, as amended, and the regulations
      thereunder.

    

    (l)
      ERISA
      Affiliate
      means
      each trade or business (whether or not incorporated and whether or not foreign)
      which is or may hereafter become a member of a group of which Borrower is a
      member and which is treated as a single employer under ERISA Section 4001(b)
      (1), or IRC Section 414.

     

    
      
         

      

      
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    (m)
      Event
      of Default
      means
      the events specified in Section 8, below.

    

    (n)
      Insolvency
      Proceeding
      means
      any proceeding commenced by or against any person or entity under any provision
      of the federal Bankruptcy Code, as amended, or under any other state or federal
      insolvency law, including assignments for the benefit of creditors, formal
      or
      informal moratoria, compositions, or extensions generally with its
      creditors.

    

    (o)
      Instruments
      shall
      have the meaning ascribed to such term in the Code.

    

    (p)
      IRC
      means
      the
      Internal Revenue Code of 1986, as amended, and the regulations
      thereunder.

    

    (q)
      Loan
      Documents
      means,
      collectively, this Agreement, any Note and any other agreement entered into
      between Borrower and LENDER or by Borrower in favor of LENDER relating to or
      in
      connection with this Agreement or the Obligations, as each of same may be
      amended, modified, renewed, extended or substituted from time to
      time.

    

    (r)
      Multiemployer
      Plan means
      a
multiemployer
      plan as
      defined in ERISA Sections 3(37) or 4001(a) (3) or IRC Section
      414(f).

    

    (s)
      Note
      means
      the promissory note made by Borrower to the order of LENDER concurrently
      herewith in the original principal amount of Three
      Million Four Hundred Forty Five Thousand Seven Hundred Fifty Dollars
      ($3,445,750).

    

    (t)
      Obligations
      means
      all loans, Advances, debts, liabilities (including all interest and amounts
      and
      fees charged to the Obligations pursuant to any agreement authorizing LENDER
      to
      charge the Obligations), obligations, lease payments, guaranties, covenants,
      and
      duties owing by Borrower to LENDER of any kind and description (whether pursuant
      to or evidenced by the Loan Documents or by any other agreement between LENDER
      and Borrower, and irrespective of whether for the payment of money), whether
      made or incurred prior to, on, or after the Termination Date, direct or
      indirect, absolute or contingent, due or to become due, now existing or
      hereafter arising, including any debt, liability or obligation owing from
      Borrower to others which LENDER may obtain by assignment or otherwise, and
      all
      interest thereon and all reasonable actual expenses of LENDER.

    

    (u)
      Plan
      means
      any plan described in ERISA Section 3(2) maintained for employees of Borrower
      or
      any ERISA Affiliate, other than a Multiemployer Plan.

    

    (v)
      Term
      means
      the period from the date of the execution and delivery by LENDER of this
      Agreement through and including the later of (a) the Termination Date and (b)
      the payment and performance in full of the Obligations.

    

    (w)
      Termination
      Date
      means
      (a) June 29, 2009 or (b) if earlier terminated by LENDER pursuant to section
      9.1
      hereof, the date of such termination.

     

    
      
         

      

      
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    1.3.
      Construction.
      Unless
      the context of this Agreement clearly requires otherwise, references to the
      plural include the singular and to the singular include the plural. The words
      hereof,
      herein, hereby, hereunder,
      and
      similar terms in this Agreement refer to this Agreement as a whole and not
      to
      any particular provision of this Agreement. Section, subsection, clause and
      exhibit references are to this Agreement unless otherwise specified. Words
      importing a particular gender mean and include every other gender.

    

    1.4.
      Accounting
      Terms. All
      accounting terms not specifically defined herein shall be construed in
      accordance with generally accepted accounting principles (GAAP) as consistently
      applied. When used herein, the term financial statements shall include the
      notes
      and schedules thereto.

    

    1.5.
      Exhibits.
      All
      of
      the exhibits, addenda or riders attached to this Agreement shall be deemed
      incorporated herein by reference.

    

    1.6.
      Code.
      Any
      terms used in this Agreement which are defined in the Code shall be construed
      and defined as set forth in the Code, unless otherwise defined
      herein.

    

    1.7.
      Materially.
      Material
      and materially
      shall
      mean an amount in excess of Fifty Thousand Dollars ($50,000.00) to the extent
      it
      can be monetarily quantified.

    

    2.
      ADVANCES AND TERMS OF PAYMENT

    

    2.1.
      Term
      Loan.
      LENDER
      has on the date hereof extended a Term Loan Advance in the principal amount
      of
      Three Million Four Hundred Forty Five Thousand Seven Hundred Fifty Dollars
      ($3,445,750), as evidenced by the Note. Such Advance shall be repayable in
      accordance with the provisions of the Note. All principal and any and all
      accrued and unpaid interest, fees charges and expenses shall be due and payable
      upon the Termination Date. Unless otherwise expressly permitted by LENDER in
      writing there shall be no prepayments permitted of the principal balance of
      the
      term loan.

    

    2.2.
      Interest.

    

    (a)
      Except
      where specified to the contrary in the Loan Documents interest shall accrue
      on
      the Daily Balance of the Obligations at the monthly rate (calculated on the
      basis of a thirty day month) of One and Eighty Three Hundredths of One Percent
      (1.83%) per month. Interest shall be paid to LENDER in arrears on the first
      day
      of each month by cash check or wire transfer or at the option of the Borrower
      may be paid in kind (“PIK”) on the first day of each month (if no cash interest
      payment is received by the LENDER from the Borrower on the first day of any
      month, other than on the Termination Date LENDER shall presume that the
      Borrower’s interest payment shall be a PIK payment and shall be added to the
      principal amount of the Note at the first day of each month when interest is
      to
      be paid). Interest as provided for herein shall continue to accrue until the
      Obligations are paid in full.

     

    
      
         

      

      
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    (b)
      In no
      event shall interest on the Obligations exceed the highest lawful rate in effect
      from time to time. It is not the intention of the parties hereto to make an
      agreement which violates any applicable state or federal usury laws. In no
      event
      shall Borrower pay or LENDER accept or charge any interest which, together
      with
      any other charges upon the principal or any portion thereof, exceeds the maximum
      lawful rate of interest allowable under any applicable state or federal usury
      laws. Should any provision of this Agreement or any existing or future Notes
      or
      Loan Documents between the parties be construed to require the payment of
      interest or any other fees or charges which could be construed as interest
      which, together with any other charges upon the principal or any portion thereof
      and any other fees or charges which could be construed as interest, exceeds
      the
      maximum lawful rate of interest, then any such excess shall be applied to the
      remaining principal balance of the Obligations, if any, and the remainder
      refunded to Borrower.

    

    (c)
      Notwithstanding the foregoing, for purposes of this Agreement, it is the
      intention of Borrower and LENDER that “interest” shall mean, and be limited to,
      any payment to LENDER which compensates it for extending credit to Borrower,
      for
      making available to Borrower the credit facility under the Note during the
      term
      of this Agreement and for any default or breach by Borrower of a condition
      upon
      which credit was extended. Borrower and LENDER agree that, for the sole purpose
      of calculating the “interest” paid by Borrower to LENDER, it is the intention of
      Borrower and LENDER that interest shall mean and include, and be expressly
      limited to, any interest accrued on the aggregate outstanding balance of the
      Obligations during the term hereof pursuant to Sections 2.2(A) and 2.2(B);
      and
      any Facility Fee and Closing Fee, and other fees charged to Borrower during
      the
      term hereof. Borrower and LENDER further agree that it is their intention that
      the following fees shall not constitute “interest”: any servicing fees, any
      examination fees, any attorney fees incurred by LENDER, any premiums or
      commissions attributable to insurance guaranteeing repayment, finders’ fees,
      credit report fees, appraisal fees or fees for document preparation or
      notarization. 

    

    2.3.
      Crediting
      Payments. Notwithstanding
      anything to the contrary contained herein, payments received by LENDER after
      11:00 a.m. Eastern time shall be deemed to have been received by LENDER as
      of
      the opening of business on the immediately following Business Day.

    

    2.4.
      Facility
      Fee. In
      consideration of LENDER’s entering into this Agreement, Borrower shall pay
      LENDER a facility fee (the Facility
      Fee)
      of
$400,000,
      which
      shall be payable by the Borrower upon the Termination Date. The Facility Fee
      shall be deemed to have been fully earned upon the execution hereof for the
      entire Initial Term, but which shall not bear interest unless payment thereof
      is
      past due.

    

    2.5.
      Commitment
      Fee. Borrower
      shall pay LENDER fee of $250,000
      (the
Commitment
      Fee)
      which
      shall be payable by the Borrower on the Termination Date. The Commitment Fee
      shall be deemed to have been fully earned upon the execution hereof for the
      entire Initial Term,  but
      which
      shall not bear interest unless payment thereof is past due and which fee shall
      be payable as follows:  One Hundred Twenty Five Thousand Dollars ($125,000)
      shall be payable within one week following the execution of this Agreement
      and
      One Hundred Twenty Five Thousand Dollars ($125,000) shall be payable within
      two
      weeks following the execution of this Agreement.

     

    
      
         

      

      
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    2.6.
      Monitoring
      Fee. Borrower
      shall pay lender in kind a Monitoring Fee in the amount of One
      Hundred Thousand Dollars ($100,000)
      per
      month for 5 consecutive months on the first day of each month commencing
      November 1, 2008 and ending on March 1, 2009. The fee shall be charged to the
      principal balance out standing to LENDER from Borrower and shall be paid in
      cash
      on the Termination Date. Such fees shall not bear interest unless payment
      thereof is past due. 

    

    3.
      TERM

    

    3.1.
      Term.
      This
      Agreement shall become effective upon execution by LENDER and continue in full
      force through the Term. The Note and this Agreement may not be prepaid or
      terminated by the Borrower prior to March 31, 2009 after which date the Note
      may, at the option of the Borrower, be prepaid by the Borrower in whole or
      in
      part without penalty. In addition, LENDER shall have the right to terminate
      this
      Agreement and demand repayment of the Note, immediately at any time upon the
      occurrence of an Event of Default. No such termination shall relieve or
      discharge Borrower of its duties, Obligations and covenants hereunder until
      all
      Obligations have been paid and performed in full. On the Termination Date of
      this Agreement, the Obligations shall be immediately due and payable in full.
      

     

    4.
      REPRESENTATIONS
      AND WARRANTIES AND COVENANTS
      Borrower
      represents and warrants to LENDER, and covenants, the following and
      acknowledges:

    

    4.1.
      Relocation
      of Chief Executive Office. The
      chief
      executive office of Borrower and the location of all books and records of
      Borrower is at the address indicated on the first page of this Agreement and
      Borrower will not, without thirty (30) days' prior written notice to LENDER
      relocate such office.

    

    4.2.
      Due
      Organization and Qualification.  Borrower
      is, and shall at
      all
      times hereafter, be a corporation duly incorporated and existing under the
      laws
      of the state of its incorporation as set forth on the first page hereof, and
      Borrower is, and shall at all times hereafter be, qualified and licensed to
      do
      business and is in good standing in any state in which the conduct of its
      business or its ownership of assets requires that it be so qualified.

    

    4.3.
      Actual
      and Fictitious Name. Borrower’s
      exact name is set forth on the first page hereof and Borrower has not changed
      its name within the last five (5) years. Borrower is conducting its business
      under the trade or fictitious name(s) “Versadial”, and no others. Borrower has
      complied with the fictitious name laws of all jurisdictions in which compliance
      is required in connection with its use of such name(s).

    

    4.4.
      Permits
      and Licenses. Borrower
      holds all licenses, permits, franchises, approvals and consents required for
      the
      conduct of its business and the ownership and operation of its assets. There
      has
      been and there is no claim, suit or other action disputing Borrower’s interests
      in any of the foregoing or in the case of licenses any underlying patents or
      trademarks which are the subject of any such license. 

    

    4.5.
      Due
      Authorization. Borrower
      has the right and power and is duly authorized to enter into the Loan Documents
      to which it is a party.

     

    
      
         

      

      
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    4.6.
      Compliance
      with Organizational Documents. The execution
      by Borrower of the Loan Documents to which it is a party does not constitute
      a
      breach of any provision contained in Borrower's articles of incorporation and
      by-laws, nor does it constitute an event of default under any material agreement
      to which Borrower is now or may hereafter become a party.

    

    4.7.
      Litigation.
      There
      are
      no actions, proceedings or claims pending by or against Borrower, whether or
      not
      before any court or administrative agency and Borrower has no knowledge or
      notice of any pending, threatened or imminent litigation, governmental
      investigations, or claims, complaints, actions, or prosecutions involving
      Borrower. If any such actions, proceedings or claims presently exist or arise
      during the Term, Borrower shall promptly notify LENDER in writing and shall,
      from time to time, notify LENDER of all material events relating
      thereto.

    

    4.8.
      Accuracy
      of Information and No Material Adverse Change in Financial Statements.
All
      information furnished by Borrower to LENDER, and all statements made by Borrower
      to LENDER, including, without limitation, information set forth in any loan
      application and client profile are true, accurate and complete in all respects
      and do not contain any material misstatement of fact or omit to state any
      material facts necessary to make the statements or information contained therein
      not materially misleading. All financial statements relating to
      Borrower which have been or may hereafter be delivered to LENDER (i) have been
      prepared in accordance with GAAP; (ii) fairly present Borrower's financial
      condition as of the date thereof and Borrower's results of operations for the
      period then ended; and (iii) disclose all contingent obligations of Borrower.
      In
      addition no material adverse change in the financial condition of Borrower
      has
      occurred since the date of the most recent of such financial
      statements.

    

    4.9.
      Solvency.
      Excluding
      obligations which may be owed by the Borrower under that certain sublicense
      agreement between Lender and the Borrower, the Borrower is now, and shall be
      at
      all times through the Term, solvent and able to pay its debts (including trade
      debts) as they mature.

    

    4.10.
      ERISA.
      Neither
      Borrower or any ERISA Affiliate, nor any Plan is or has been in violation of
      any
      of the provisions of ERISA, any of the qualification requirements of IRC Section
      401(a), or any of the published interpretations thereof. No lien upon the assets
      of Borrower has arisen with respect to any Plan. No prohibited
      transaction within
      the meaning of ERISA Section 406 or IRC Section 4975(c) has occurred with
      respect to any Plan. Neither Borrower nor any ERISA Affiliate has incurred
      any
      withdrawal liability with respect to any Multiemployer Plan. Borrower and each
      ERISA Affiliate have made all contributions required to be made by them to
      any
      Plan or Multiemployer Plan when due. There is no accumulated funding deficiency
      in any Plan, whether or not waived.

     

    
      
         

      

      
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    4.11.
      Environmental
      Laws and Hazardous Materials. Borrower
      has complied, and at all times through the Term will comply, with all
      Environmental Laws. Borrower has not and will not cause or permit any Hazardous
      Materials to be located, incorporated, generated, stored, manufactured,
      transported to or from, released, disposed of, or used at, upon, under, or
      within any premises at which Borrower conducts its business, or in connection
      with Borrower's business. To the best of Borrower's knowledge, no prior owner
      or
      operator of any premises at which Borrower conducts its business has caused
      or
      permitted any of the above to occur at, upon, under, or within any of the
      premises. Borrower will not permit any lien to be filed against its assets
      under
      any Environmental Law, and will promptly notify LENDER of any proceeding,
      inquiry or claim relating to any alleged violation of any Environmental Law,
      or
      any alleged loss, damage or injury resulting from any Hazardous Material. LENDER
      shall have the right to join and participate in, as a party if it so elects,
      any
      legal or administrative proceeding initiated with respect to any Hazardous
      Material or in connection with any Environmental Law. "Hazardous Material"
      includes without limitation any substance, material, emission, or waste which
      is
      or hereafter becomes regulated or classified as a hazardous substance, hazardous
      material, toxic substance or solid waste under any Environmental Law, asbestos,
      petroleum products, urea formaldehyde, polychlorinated biphenyls (PCBs), radon,
      and any other hazardous or toxic substance, material, emission or waste.
      Environmental Law means the Comprehensive Environmental Response, Compensation,
      and Liability Act of 1980, as amended, the Resource Conservation and Recovery
      Act of 1976, the Hazardous Materials Transportation Act, the Toxic Substances
      Control Act, the regulations pertaining to such statutes, and any other safety,
      health or environmental statutes, laws, regulations or ordinances of the United
      States or of any state, county or municipality in which Borrower conducts its
      business.

    

    4.12.
      Tax
      Compliance. Borrower
      has filed all tax returns required to be filed by it and has paid all taxes
      due
      and payable on said returns and on any assessment made against it or its
      assets.

    

    4.13.
      Reliance
      by LENDER; Cumulative. Each
      warranty, representation and agreement contained in this Agreement shall be
      conclusively presumed to have been relied on by LENDER regardless of any
      investigation made or information possessed by LENDER. The warranties,
      representations and agreements set forth herein shall be cumulative and in
      addition to any and all other warranties, representations and agreements which
      Borrower shall now or hereafter give, or cause to be given, to
      LENDER.

    

    4.14.
      Use
      of Proceeds. The
      proceeds of the Advance will be used by Borrower for the purposes set forth
      on
      Schedule 4.14 annexed hereto and use thereof shall be deemed to be in compliance
      with this Agreement. 

    

    4.15.
      Borrower’s
      Deposit Account. The
      deposit account listed on Schedule 4.15 hereof is a deposit account belonging
      to
      the Borrower.   

     

    5.
      AFFIRMATIVE COVENANTS: Borrower
      covenants and acknowledges that during the Term Borrower shall comply with
      all
      of the following:

     

    
      
         

      

      
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    5.1.
      Financial
      Statements, Reports, Certificates. Borrower shall
      deliver to LENDER: (a) as soon as available, but in any event within thirty
      (30)
      days after the end of each month during the Term, a balance sheet and profit
      and
      loss statement prepared by Borrower covering Borrower's operations during such
      period; and (b) as soon as available, but in any event within one hundred twenty
      (120) days after the end of each of Borrower's fiscal years, financial
      statements of Borrower for each such fiscal period, prepared on a review basis
      by independent certified public accountants acceptable to LENDER (Borrower’s
      present accounting firm being presently acceptable to LENDER). Such financial
      statements shall include a balance sheet and profit and loss statement, and
      the
      accountants' management letter, if any, and shall be prepared in accordance
      with
      GAAP. Together with the above, Borrower shall also deliver any other report
      reasonably requested by LENDER relating to the financial condition of Borrower
      and a certificate signed by its chief executive or chief financial officer
      on
      behalf of the Borrower, to the effect that all reports, statements or computer
      prepared information of any kind or nature delivered or caused to be delivered
      to LENDER under this Section fairly present its financial condition in all
      material respects and that to the best of his knowledge there exists on the
      date
      of delivery of such certificate to LENDER no condition or event which
      constitutes an Event of Default.

    

    5.2.
      Tax
      Returns, Receipts. Borrower
      shall deliver to LENDER copies of each of its future federal income tax returns,
      and any amendments thereto, within thirty (30) days of the filing thereof.
      Borrower further shall promptly deliver to LENDER, upon request, satisfactory
      evidence of Borrower's payment of all withholding and other taxes required
      to be
      paid by it.

    

    5.3.
      Taxes.
      All
      Federal, state and local assessments and taxes, whether real, personal or
      otherwise, due or payable by, or imposed, levied or assessed against Borrower
      or
      any of its assets or in connection with Borrower's business shall hereafter
      be
      paid in full, before they become delinquent or before the expiration of any
      extension period, unless contested in good faith and properly reserved for
      and
      any lien resulting therefrom is subordinate to the LENDER’s liens hereunder or
      secured by a bond issued for the LENDER’s benefit by an insurer acceptable to
      the LENDER in its good faith discretion. Borrower shall make due and timely
      payment or deposit of all federal, state and local taxes, assessments or
      contributions required of it by law, and will execute and deliver to LENDER,
      on
      demand, appropriate certificates attesting to the payment or deposit
      thereof.

     

    5.4.
      LENDER
      Expenses. Borrower shall
      immediately and without demand reimburse LENDER for all LENDER Expenses and
      Borrower hereby authorizes the payment of such LENDER Expenses. 

    

    5.5.
      Compliance
      With Law. Borrower
      shall comply, in all material respects, with the requirements of all applicable
      laws, rules, regulations and orders of governmental authorities relating to
      Borrower and the conduct of its business.

    

    5.6.
      Accounting
      System. Borrower
      at all times hereafter shall maintain a standard and modern system of accounting
      in accordance with GAAP with ledger and account cards or computer tapes, disks,
      printouts and records pertaining to its business containing such information
      as
      may from time to time be requested by LENDER.

     

    6.
      NEGATIVE COVENANTS
      Borrower
      covenants and acknowledges that other than as may be expressly set forth to
      the
      contrary on the schedule 4.14 for the use of proceeds, during the Term Borrower
      shall not undertake any of the following:

     

    
      
         

      

      
        -
          9
          -

        
          

        

      

      
         

      

    

    6.1.
      Extraordinary
      Transactions and Disposal of Assets. (A) Enter
      into any transaction not in the ordinary and
      usual
      course of its business as conducted on the date hereof, including but not
      limited to the sale, lease, disposal, movement, relocation or transfer, whether
      by sale or otherwise, of any of its assets; (B) consent to any amendment or
      modification or termination of the License Agreement (C) grant any new
      sublicense with respect to, the intellectual property which is the subject
      of
      the Sublicense Agreement between LENDER and Borrower, (D) incur (i) any
      indebtedness for borrowed money or purchase money indebtedness for Equipment,
      or
      (ii) any other indebtedness outside the ordinary and usual course of its
      business as conducted on the date hereof; (D) make any advance or loan to any
      third party; or (D) grant a lien on any of its assets except in favor of
      LENDER.

    

    6.2.
      Change
      Name, etc. Change
      its name, business structure, jurisdiction of incorporation or formation as
      applicable, or identity, or add any new fictitious name.

    

    6.3.
      Merge,
      Acquire.
      Merge,
      acquire, or consolidate with or into any other business
      organization.

    

    6.4.
      Guaranty.
      Guaranty
      or otherwise become in any way liable with respect to the obligations of any
      third party, except by endorsement of instruments or items of payment for
      deposit to the account of Borrower for negotiation and delivery to
      LENDER.

    

    6.5.
      Restructure.
      Make
      any
      material change in its financial structure or business operations.

    

    6.6.
      Prepayments.
      Prepay
      any existing indebtedness owing to any third party other than trade
      payables.

    

    6.7.
      Loans
      and Advances. Other
      than as may be otherwise expressly set forth in Schedule 6.7 hereof,
      make any
      loans, advances or extensions of credit to any officer, director, executive
      employee or shareholder of Borrower (or any relative of any of the foregoing),
      or to any entity which is a subsidiary of, related to, affiliated with or has
      common shareholders, officers or directors with Borrower. 

    

    6.8.
      Accounting
      Methods. Modify
      or
      change its method of accounting or enter into, modify or terminate any agreement
      presently existing or at any time hereafter entered into with any third party
      for the preparation or storage of Borrower's records of Accounts and financial
      condition without said party agreeing to provide LENDER with information
      regarding Borrower’s business or Borrower's financial condition. Other than with
      respect to Borrower’s attorneys, Borrower waives the right to assert a
      confidential relationship, if any, it may have with any such third party in
      connection with any information requested by LENDER hereunder, and agrees that
      LENDER may contact any such party directly in order to obtain such
      information.

    

    6.9.
      Business
      Suspension.
      Suspend
      or go out of business.

    

    7.
      EVENTS OF DEFAULT
      The
      occurrence and continuance of any one or more of the following events shall
      constitute an Event of Default by Borrower hereunder:

    
      
         

      

      
        -
          10
          -

        
          

        

      

      
         

      

    

     

    7.1.
      Failure
      to Pay. Borrower's
      failure to pay when due and payable, or when declared due and payable, any
      portion of the Obligations (whether principal, interest, taxes, LENDER Expenses,
      or otherwise);

    

    7.2.
      Failure
      to Perform.
      Borrower's failure in any material manner to perform, keep or observe any term,
      provision, condition, representation, warranty, covenant or agreement contained
      in this Agreement, in any of the Loan Documents or in any other present or
      future agreement between Borrower and LENDER;

    

    7.3.
      Misrepresentation.
      Any
      misstatement or misrepresentation of a nature now or hereafter exists in any
      warranty, representation, statement, aging or report made to LENDER by, Borrower
      or any officer, employee, agent or director thereof which is of a material
      nature or which otherwise adversely affects Lender’s interests, rights or
      remedies, or if any such warranty, representation, statement, aging or report
      is
      withdrawn by such person;

    

    7.4.
      Material
      Adverse Change. There
      is
      a material adverse change in Borrower's business or financial
      condition;

    

    7.5.
      Material
      Impairment. There
      is
      a material impairment of the prospect of repayment of the
      Obligations;

    

    7.6.
      Levy
      or Attachment. Any
      material portion of Borrower's assets is attached, seized, subjected to a writ
      or distress warrant or is levied upon, or comes into the possession of any
      judicial officer or assignee;

    

    7.7.
      Insolvency
      by Borrower. An
      Insolvency Proceeding is commenced by Borrower;

    

    7.8.
      Insolvency
      Against Borrower. (A) An
      Insolvency Proceeding is commenced against Borrower or (B) an order for relief
      under the Bankruptcy Code, or similar order in any other Insolvency proceeding
      is entered against Borrower;

    

    7.9.
      Injunction
      Against Borrower. Borrower
      is enjoined, restrained or in any way prevented
      by court order from continuing to conduct all or any material part of its
      business;

    

    7.10.
      Government
      Lien. A
      notice
      of lien, levy or assessment is filed of record with respect to any of Borrower's
      assets by the United States Government, or any department, agency or
      instrumentality thereof, or by any state, county, municipal or other
      governmental agency, or any taxes or debts owing at any time hereafter to any
      one or more of such entities becomes a lien, whether choate or otherwise, upon
      any of Borrower's assets and the same is not paid on the payment date
      thereof;

    

    7.11.
      Judgment.
      Judgments
      in the aggregate at any time out standing in excess of $100,000 are entered
      against Borrower;

    

    7.12.
      Default
      to Third Party. There
      is
      a default which continues beyond any applicable grace period in any agreement
      to
      which Borrower is a party or by which binds Borrower or any of their assets,
      the
      cancellation of which would have a material adverse effect upon the business
      or
      prospects of the Borrower;

    
      
         

      

      
        -
          11
          -

        
          

        

      

      
         

      

    

    7.13.
      ERISA
      Violation. A
      prohibited
      transaction within
      the meaning of ERISA Section 406 or IRC Section 1975(c) shall occur with respect
      to a Plan which could have a material adverse effect on the financial condition
      of Borrower; any lien upon the assets of Borrower in connection with any Plan
      shall arise; Borrower or any ERISA Affiliate shall completely or partially
      withdraw from a Multiemployer Plan and such withdrawal could, in the opinion
      of
      LENDER, have a material adverse effect on the financial condition of Borrower.
      Borrower or any of its ERISA Affiliates shall fail to make full payment when
      due
      of all amounts which Borrower or any of its ERISA Affiliates may be required
      to
      pay to any Plan or any Multiemployer Plan as one or more contributions thereto;
      Borrower or any of its ERISA Affiliates creates or permits the creation of
      any
      accumulated funding deficiency, whether or not waived; the voluntary or
      involuntary termination of any Plan which termination could, in the opinion
      of
      LENDER, have a material adverse effect on the financial condition of Borrower
      or
      Borrower shall fail to notify LENDER promptly and in any event within ten (l0)
      days of the occurrence of an event which constitutes an Event of Default under
      this clause or would constitute an Event of Default upon the exercise of
      LENDER's judgment; or

    

    7.14.
      The
      occurrence of any event which constitutes a default of, or breach under, any
      agreements between Fursa Master Global Event Driven Fund, L.P. and/or Versadial,
      Inc. or Borrower. that, in and of itself, or through the passage of time or
      the
      giving of notice or both, would give rise to the right of Fursa Master Global
      Event Driven Fund, L.P. to exercise any rights or remedies against any of the
      assets of Versadial, Inc. and/or Borrower.  

    

    7.15.
      Notwithstanding anything contained in this Section to the contrary, LENDER
      shall
      refrain from exercising its rights and remedies and an Event of Default shall
      not be deemed to have occurred by reason of (A) the occurrence of any of the
      events set forth in Sections 7.6, 7.10, 7.11 or 7.13 hereof if, within fifteen
      (15) days from the date thereof, the same is released, discharged, dismissed,
      bonded against or satisfied; or (B) the occurrence of an event under section
      7.8(A) hereof if it is discharged within thirty (30) days; or (C) the occurrence
      of an event under section 7.9 hereof if it is discharged within fifteen (15)
      days. 

    

    8.
      LENDER'S RIGHTS AND REMEDIES

    

    8.1.
      Rights
      and Remedies. Upon
      the
      occurrence and existence of an Event of Default, LENDER may, at its election,
      without notice of such election and without demand, do any one or more of the
      following:

    

    (a)
      Declare all Obligations, whether evidenced by the Loan Documents or otherwise,
      immediately due and payable in full (except that upon the occurrence of an
      Event
      of Default under Section 7.8B) all Obligations shall automatically become
      due).

    
      
         

      

      
        -
          12
          -

        
          

        

      

      
         

      

    

    (b)
      Cease
      advancing money or extending credit to or for the benefit of Borrower under
      the
      Loan Documents or under any other agreement between Borrower and
      LENDER;

    

    (c)
      Terminate this Agreement as to any future liability or obligation of LENDER,
      but
      without affecting LENDER's rights and without affecting the
      Obligations;

    

    8.2.
      Cumulative
      Rights and Remedies.
      In
      addition to the foregoing, LENDER shall have all rights and remedies provided
      by
      law (including those set forth in the Code) and any rights and remedies
      contained in any Loan Documents and all such rights and remedies shall be
      cumulative.

    

    8.3.
      No
      Waiver.
      No delay
      on the part of LENDER in exercising any right, power or privilege under any
      Loan
      Document shall operate as a waiver, nor shall any single or partial exercise
      of
      any right, power or privilege under such Loan Documents or otherwise, preclude
      other or further exercise of any such right, power or privilege.

    

    9.
      WAIVERS

    

    9.1.
      Demand,
      Protest. Borrower
      waives demand, protest, notice of protest, notice of default or dishonor, notice
      of payment and nonpayment, notice of any default, notice of intention to
      accelerate, notice of acceleration, and notice of nonpayment at maturity.
      Borrower hereby consents to any extensions of time of payment or partial payment
      at, before or after the Termination Date.

    

    9.2.
      Limitation
      of Damages. In
      any
      action or other proceeding against LENDER under this Agreement or relating
      to
      the transactions between LENDER and Borrower, Borrower waives the right to
      seek
      any consequential or punitive damages.

    

    10.
      NOTICES

    

    10.1.
      Unless otherwise provided herein, all consents, waivers, notices or demands
      by
      any party relating to the Loan Documents shall be in writing and (except for
      financial statements and other informational documents which may be sent by
      first-class mail, postage prepaid) shall be telecopied (followed up by a
      mailing), personally delivered or sent by registered or certified mail, postage
      prepaid, return receipt requested, or by receipted overnight delivery service
      to
      Borrower or to LENDER, as the case may be, at their addresses set forth
      below

    

    If to Borrower:                                                               Innopump,
      Inc.

    60
      East
      42nd
      Street

    New
      York,
      NY 10165

    Attention:
      Geoffrey Donaldson

    Phone#
      212-808-0607

    Fax#
      212-808-0113

    

    If
      to
      Lender:                                                               Sea
      Change Group, LLC

    
      
         

      

      
        -
          13
          -

        
          

        

      

      
         

      

    

    60
      East
      42nd
      Street

    New
      York,
      NY 10165

    Attention:
      Geoffrey Donaldson

    Phone#
      212-808-0607

    Fax#
      212-808-0113

    

    With
      a copy to (which shall

    not
      constitute notice)  

    

    Robert
      Barandes, Esq.

    Beckman,
      Lieberman & Barandes LLP

    116
      John
      Street, Suite 1313

    New
      York,
      NY 10038

    Phone :
      (212) 608-3500

    Fax :
      (212) 608-9687

    Email :
      rbarandes@blbllp.com  

    

    10.2.
      Any
      party may change the address at which it is to receive notices hereunder by
      notice in writing in the foregoing manner given to the other. All notices or
      demands sent in accordance with this Section shall be deemed received on the
      earlier of the date of actual receipt or five (5) calendar days after the
      deposit thereof in the mail or on the date telecommunicated if
      telecopied.

    

    11.
      DESTRUCTION OF BORROWER'S DOCUMENTS

    

    11.1.
      All
      documents, schedules, invoices, agings or other papers delivered to LENDER
      may
      be destroyed or otherwise disposed of by LENDER four (4) months after they
      are
      delivered to or received by LENDER, unless Borrower requests, in writing, the
      return of the said documents, schedules. invoices or other papers and makes
      arrangements, at Borrower's expense, for their return.

    

    12.
      GENERAL PROVISIONS

    

    12.1.
      Effectiveness.
      This
      Agreement shall be binding and deemed effective when executed by Borrower and
      executed and delivered by LENDER.

    

    12.2.
      Successors
      and Assigns. This
      Agreement shall bind and inure to the benefit of the respective successors
      and
      assigns of each of the parties; provided,
      however, that
      Borrower may not assign this Agreement or any rights hereunder and any
      prohibited assignment shall be absolutely void. No consent to an assignment
      by
      LENDER shall release Borrower from its Obligations. Without notice to or the
      consent of Borrower, LENDER may assign this Agreement and its rights and duties
      hereunder and LENDER reserves the right to sell, assign, transfer, negotiate
      or
      grant participations in all or any part of, or any interest in LENDER's rights
      and benefits hereunder. In connection therewith, LENDER may disclose all
      documents and information which LENDER now or hereafter may have relating to
      Borrower or Borrower's business. Borrower hereby consents to, and authorizes
      LENDER to, prepare and distribute a "tombstone", to issue a press release,
      or
      otherwise disseminate information to newspapers, trade journals, and other
      sources, describing the nature of, and closing of the credit facilities provided
      for herein, which may include Borrower's name as well as other general
      information about Borrower and the credit facilities. Borrower
      and LENDER do not intend any of the benefits of the Loan Documents to inure
      to
      any third party, and no third party shall be a third party beneficiary hereof
      or
      thereof.

    
      
         

      

      
        -
          14
          -

        
          

        

      

      
         

      

    

    12.3.
      Section
      Headings. Headings
      and numbers have been set forth herein for convenience only.

    

    12.4.
      Interpretation.
      Neither
      this Agreement nor any uncertainty or ambiguity herein shall be construed or
      resolved against LENDER or Borrower, whether under any rule of construction
      or
      otherwise. On the contrary, this Agreement has been reviewed by each party
      and
      shall be construed and interpreted according to the ordinary meaning of the
      words used so as to fairly accomplish the purposes and intentions of the parties
      hereto.

    

    12.5.
      Severability
      of Provisions. Each
      provision of this Agreement shall be severable from every other provision of
      this Agreement for the purpose of determining the legal enforceability of such
      provision.

    

    12.6.
      Amendments in Writing. This
      Agreement cannot be changed or terminated orally. This Agreement supersedes
      all
      prior agreements, understandings and negotiations, if any, all of which are
      merged into this Agreement. THIS
      AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL
      AGREEMENT BETWEEN THE PARTIES REGARDING THE SUBJECT MATTER HEREIN AND THEREIN,
      AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
      ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
      BETWEEN THE PARTIES.

    

    12.7.
      Counterparts
      and Facsimile Signatures. This
      Agreement may be executed in any number of counterparts each of which, when
      executed and delivered, shall be deemed to be an original and all of which,
      when
      taken together, shall constitute but one and the same Agreement. Any signature
      to a Loan Document delivered by a party via telecopy transmission or other
      electronic means shall be deemed to be an original signature.

    

    12.8.
      Indemnification.
      Borrower
      hereby indemnifies, protects, defends and saves harmless LENDER and any member,
      officer, director, official, agent, employee and attorney of LENDER, and their
      respective heirs, successors and assigns (collectively, the "Indemnified
      Parties"), from and against any and all losses, damages, expenses or liabilities
      of any kind or nature other than arising from their gross negligence of willful
      misconduct and from any suits, claims or demands, including reasonable counsel
      fees incurred in investigating or defending such claim, suffered by any of
      them
      and caused by, relating to, arising out of, resulting from, or in any way
      connected with the Loan Documents and the transactions contemplated therein
      (unless caused by the gross negligence or willful misconduct of the Indemnified
      Parties) including, without limitation: (a) losses, damages, expenses or
      liabilities sustained by LENDER in connection with any environmental cleanup
      or
      other remedy required or mandated by any Environmental Law pertaining to the
      Borrower’s premises; (b) any untrue statement of a material fact contained in
      information submitted to LENDER by Borrower or the omission of any material
      fact
      necessary to be stated therein in order to make such statement not misleading
      or
      incomplete in any material manner; (c) the failure of Borrower to perform any
      obligations required to be performed by Borrower under the Loan Documents;
      and
      (d) the ownership, construction, occupancy, operations, use and maintenance
      of
      any of Borrower's assets. The provisions of this Section shall survive
      termination of this Agreement and the other Loan Documents.

    
      
         

      

      
        -
          15
          -

        
          

        

      

      
         

      

    

    13.
      CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

    

    13.1.
      THE
      VALIDITY OF THE LOAN DOCUMENTS, THEIR CONSTRUCTION, INTERPRETATION, AND
      ENFORCEMENT AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER,
      GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
      OF
      NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE PARTIES AGREE
      THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THE LOAN DOCUMENTS
      SHALL BE TRIED AND LITIGATED ONLY IN THE STATE COURTS LOCATED IN THE COUNTY
      OF
      NEW YORK, STATE OF NEW YORK, THE FEDERAL COURTS LOCATED IN THE SOUTHERN DISTRICT
      OF NEW YORK, OR AT THE SOLE OPTION OF LENDER, IN ANY OTHER COURT IN WHICH LENDER
      SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
      JURISDICTION OVER THE MATTER IN CONTROVERSY. BORROWER
      AND LENDER EACH WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, THE RIGHT
      TO A TRIAL BY JURY
      IN ANY
      PROCEEDING UNDER THE LOAN DOCUMENTS OR RELATING TO THE DEALINGS OF BORROWER
      AND
      LENDER AND ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF "FORUM NON
      CONVENIENS" OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
      ACCORDANCE WITH THIS SECTION.

    

    REMAINDER
      OF THIS PAGE INTENTIONALLY LEFT BLANK

    

    Borrower
      and LENDER have executed and delivered this Agreement at New York as of the
      date
      first above written.

    

    
      	
              INNOPUMP,
                INC.

            
	
              a
                Nevada corporation

            
	 
	
              Signed by:

            	
              /s/ Geoffrey Donaldson

            
	
              Print Name:Geoffrey Donaldson

            
	
              Title/Capacity:President

            

    

    
      
         

      

      
        -
          16
          -

        
          

        

      

      
         

      

    

    

    
      	
              SEA
                CHANGE GROUP, LLC,

            
	
              a
                New York limited liability company

            
	 
	
              Signed by:

            	
              /s/ Geoffrey Donaldson

            
	
              Print Name:
                Geoffrey Donaldson

            
	
              Capacity:
                Managing Member

            

    

    
      
         

      

      
        -
          17
          -

        
          

        

      

      
         

      

    

    Schedule
      5.16

    

    USE
      OF
      PROCEEDS OF LOAN ADVANCE

    

    Per
      approved transmissions and payment instructions 

    with
      balance applied to general overhead and working capital

    
      
         

      

      
        -
          18
          -

        
          

        

      

      
         

      

    

    Schedule
      5.20

    

    Deposit
      Account of Borrower

    

    Innopump,
      Inc. d/b/a/ Versadial

    305
      Madison Avenue, Suite 4510

    New
      York,
      NY 10165

    

    Account
      # 39610447

    

    Bank
      Name, address, and Wire Transfer Instructions:

     

    
      
        	
                Citibank

              
	
                460
                  Park Avenue

              
	
                New
                  York, New York 10022

              

      

    

     

    ABA
      #
      021000089

    
      
         

      

      
        -
          19
          -EXHIBIT 10.1

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  

HIGHBURY FINANCIAL INC.
   
2008 EQUITY INCENTIVE PLAN
   
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
   
  
  
  
  
  
   
 

HIGHBURY FINANCIAL INC. 

TABLE OF CONTENTS 

		 	
		 	Page
	1.
Purpose
	 	 	1	 
	2.
Definitions
	 	 	1	 
	3.
Term of the Plan
	 	 	6	 
	4.
Stock Subject to the Plan
	 	 	6	 
	5.
Administration
	 	 	7	 
	6.
Authorization of Grants
	 	 	7	 
	7.
Specific Terms of Awards
	 	 	8	 
	8.
Adjustment Provisions
	 	 	13	 
	9.
Change of Control
	 	 	15	 
	10.
Settlement of Awards
	 	 	15	 
	11.
Reservation of Stock
	 	 	17	 
	12.
Limitation of Rights in Stock; No Special Service Rights
	 	 	17	 
	13.
Unfunded Status of Plan
	 	 	17	 
	14.
Nonexclusivity of the Plan
	 	 	17	 
	15.
Termination and Amendment of the Plan
	 	 	18	 
	16.
Notices and Other Communications
	 	 	18	 
	17.
Governing Law
	 	 	18	 

i

HIGHBURY FINANCIAL INC. 

2008 EQUITY INCENTIVE PLAN 

1. Purpose 

This Plan is intended to encourage ownership of Stock by employees, executive officers, consultants and directors of the Company and its Affiliates and to provide additional incentive for them to promote the success of the Company’s business through the grant of Awards of or pertaining to shares of the Company’s Stock. The Plan is intended to be an incentive stock option plan within the meaning of Section 422 of the Code, but not all Awards are required to be Incentive Options. 

2. Definitions 

As used in this Plan, the following terms shall have the following meanings: 

2.1. Accelerate, Accelerated, and Acceleration, means: (a) when used with respect to an Option or Stock Appreciation Right, that as of the time of reference the Option or Stock Appreciation Right will become exercisable with respect to some or all of the shares of Stock for which it was not then otherwise exercisable by its terms; (b) when used with respect to Restricted Stock or Restricted Stock Units, that the Risk of Forfeiture otherwise applicable to the Stock or Units shall expire with respect to some or all of the shares of Restricted Stock or Units then still otherwise subject to the Risk of Forfeiture; and (c) when used
with respect to Performance Stock Units or Performance Units, that the applicable Performance Goals shall be deemed to have been met as to some or all of the Units. 

2.2. Affiliate means any corporation, partnership, limited liability company, business trust, or other entity controlling, controlled by or under common control with the Company. 

2.3. Anniversary Date means the last day of each full calendar year following the adoption of the Plan by the Board. 

2.4. Award means any grant or sale pursuant to the Plan of Options, Stock Appreciation Rights, Performance Units, Restricted Stock, Restricted Stock Units (including Performance Stock Units), or Stock Grants. 

2.5. Award Agreement means an agreement between the Company and the recipient of an Award, setting forth the terms and conditions of the Award. 

2.6. Base Shares means, as of each Anniversary Date, the sum of (i) the Initial Shares, including warrants to purchase Stock issued and outstanding as of September 30, 2008 that are exercised after such Anniversary Date and on or before the last day of the applicable Performance Period, and (ii) the aggregate number of Burn Rate Shares determined for all years prior to, but not including the year of, such Anniversary Date. 

2.7. Board means the Company’s Board of Directors. 

2.8. Burn Rate has the meaning set forth in RiskMetrics Group’s “ISS Governance Services — US Corporate Governance Policy — 2008 Updates,” dated November 19, 2007, and shall be calculated in a manner consistent with the policy set forth in such publication, as modified from time to time by RiskMetrics Group or its successor. 

2.9. “Burn Rate Cap” for any calendar year means the least of (i) the Burn Rate equal to the mean plus one standard deviation for non-Russell 3000 diversified financial companies published by RiskMetrics Group for 2008, as adjusted for full value awards based on the historical volatility of the Company’s Stock price, (i.e., 4.855%), (ii) the Burn Rate equal to the mean plus one standard deviation for diversified financial companies meeting the Russell 3000 or non-Russell 3000 criteria, as applicable, published by RiskMetrics Group (or any successor) for any other year of the Plan, as adjusted for full value awards, and (iii)
any lower Burn Rate recommended by the President and Chief Executive Officer of the Company and approved by the Committee. 

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2.10. Burn Rate Shares means, as of each Anniversary Date, that number of shares of Stock equal to the product of (i) the Burn Rate Cap applicable to the year in which such Anniversary Date falls, and (ii) the Base Shares determined as of such Anniversary Date, but taking into account all Initial Shares, including warrants to purchase Stock issued and outstanding as of September 30, 2008 that are exercised after such Anniversary Date and on or before the last day of the applicable Performance Period. 

2.11. “CAGR” means the compound annual growth rate in Cash Net Income per Share over a Performance Period, expressed as a percentage in accordance with the following formula, where X is the number of years in the Performance Period: 

the Xth root of (Cash Net Income per Share for the Xth year of the Performance Period divided by the Cash Net Income per Share for the calendar year immediately prior to beginning of the Performance Period) minus 1. 

2.12. “Cash Net Income per Share” shall mean, with respect to any year during a Performance Period, the quotient obtained by dividing (i) net income before amortization, intangible-related deferred taxes, affiliate depreciation and other non-cash expenses (including, without limitation, any charges related to the Plan or any other equity-based or cash-based incentive compensation plan of the Company), as determined by the Committee based on the audited financial statements of the Company for such year, by (ii) the daily weighted average number of shares of Stock outstanding during such year, determined on a diluted basis using the
treasury stock method to determine the number of common share equivalents issuable pursuant to any dilutive securities, excluding any shares of Stock issued or issuable pursuant to Awards granted under the Plan or under any other equity-based compensation plan of the Company. 

2.13. Cause means the Participant’s (i) refusal or neglect to perform substantially his employment-related duties, (ii) theft, fraud, embezzlement, falsification of Company, subsidiary or client documents, misappropriation of funds or other assets of the Company or any of its subsidiaries, willful misconduct, or breach of fiduciary duty or duty of loyalty, (iii) conviction of or entering a plea of guilty or nolo contendere to a crime constituting a felony, or willful violation of any law, rule or regulation (other than a traffic violation or similar offense or violation outside of the course of employment which in no way adversely
affects the Company, any of its subsidiaries or their reputation or the ability of the Participant to perform his employment-related duties or to represent the Company or any of its subsidiaries), (iv) breach of any written covenant or agreement with the Company or any of its subsidiaries not to disclose any information pertaining to the Company or any of its subsidiaries or not to compete or interfere with the Company or any of its subsidiaries, or (v) refusal or failure to implement any lawful instruction issued by the Board. 

2.14. Change of Control means the occurrence of any of the following after the date of the adoption of the Plan by the Board: 

(a) a Transaction (as defined in Section 8.4), unless securities possessing more than 50% of the total combined voting power of the survivor’s or acquiror’s outstanding securities (or the securities of any parent thereof) are held by a person or persons who held securities possessing more than 50% of the total combined voting power of the Company’s outstanding securities immediately prior to that transaction, or 

(b) any person or group of persons (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended and in effect from time to time) directly or indirectly acquires, including but not limited to by means of a merger or consolidation, beneficial ownership (determined pursuant to Securities and Exchange Commission Rule 13d-3 promulgated under the said Exchange Act) of securities possessing more than 20% 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 stockholders that the Board does not recommend such stockholders
accept, other than (i) the Company or an Affiliate, (ii) an employee benefit plan of the Company or any of its Affiliates, (iii) a 

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trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, or (iv) an underwriter temporarily holding securities pursuant to an offering of such securities, or 

(c) over a period of 36 consecutive months or less, there is a change in the composition of the Board such that a majority of the Board members (rounded up to the next whole number, if a fraction) ceases, by reason of one or more proxy contests for the election of Board members or otherwise, to be composed of individuals who either (i) have been Board members continuously since the beginning of that period, or (ii) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in the preceding clause (i) who were still in office at the time that election or nomination was
approved by the Board; or 

(d) a majority of the Board votes in favor of a decision that a Change of Control has occurred. 

2.15. Code means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto, and any regulations issued from time to time thereunder. 

2.16. Committee means the Compensation Committee of the Board, which in general is responsible for the administration of the Plan, as provided in Section 5 of this Plan. For any period during which no such committee is in existence “Committee” shall mean the “outside directors,” within the meaning of applicable Internal Revenue Service regulations under Section 162 of the Code, of the Board, and all authority and responsibility assigned to the Committee under the Plan shall be exercised, if at all, by such outside director or directors of the Board. 

2.17. Company means Highbury Financial Inc., a corporation organized under the laws of the State of Delaware. 

2.18. Covered Employee means an employee who is a “covered employee” within the meaning of Section 162(m) of the Code. 

2.19. Disability means a total and permanent disability that causes a Participant to be eligible to receive long term disability benefits under the long term disability plan maintained by the Company. If the Company does not maintain a long term disability plan, Disability means a permanent and total disability as defined in Section 22(e)(3) of the Code. In the event of a dispute, the determination whether a Participant has suffered a Disability shall be made by the Committee in its sole discretion and may be supported by the advice of a physician competent in the area to which such Disability relates. 

2.20. Final Shares means the number of Base Shares determined as of the Anniversary Date that is the last day of the last Performance Period to expire under this Plan, plus the number of Burn Rate Shares calculated as of such Anniversary Date. 

2.21. GAAP means generally acceptable accounting principles as used in the United States. 

2.22. Good Reason means the occurrence of any of the following conditions arising without the consent of the Participant which are not cured by the Company within thirty (30) days following written notice thereof by the Participant to the Company, which is given to the Company within ninety (90) days following the initial existence of the condition: 

(a) A material diminution in the Participant’s base compensation or in the Participant’s opportunity to earn incentive compensation. 

(b) A material diminution in the Participant’s authority, duties, or responsibilities. 

(c) A material diminution in the authority, duties, or responsibilities of the supervisor to whom the Participant is required to report, including a requirement that the Participant, if such Participant is a member of the Board, report to a corporate officer instead of reporting directly to the Board. 

(d) A material change in the geographic location at which the Participant must perform the services. 

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(e) Any other action or inaction that constitutes a material breach by the Company of an employment agreement, if any, between the Company and the Participant. 

2.23. Grant Date means the date as of which an Option is granted, as determined under Section 7.1(a). 

2.24. Incentive Option means an Option which by its terms is to be treated as an “incentive stock option” within the meaning of Section 422 of the Code. 

2.25. Initial Shares, as determined as of any date, means (i) that number of shares of Stock issued and outstanding as of September 30, 2008 plus (ii) that number of warrants to purchase Stock issued and outstanding as of September 30, 2008 that have been exercised as of the last day of the applicable Performance Period. 

2.26. Market Value means the value of a share of Stock on a particular date determined by such methods or procedures as may be established by the Committee. Unless otherwise determined by the Committee, the Market Value of a share of Stock as of any date is: (i) if the Stock is listed on any national securities exchange, the closing price for the Stock as reported on the primary national securities exchange on which the Stock is then listed for that date or, if no closing price is reported for that date, the closing price on the next preceding date for which a closing price was reported; (ii) if the Stock is not listed on any national
securities exchange but is traded in the over-the-counter market bulletin board or pink sheets on a last sale basis, the closing sale price reported on such date, or, if there is no such sale on that date then on the last preceding date on which such a sale was reported; and (iii) if the Stock is not listed on an exchange or traded in the over-the-counter market, or representative quotes are not otherwise available, the amount determined by the Board in good faith to be the fair market value per share of Stock on such date, on a fully diluted basis. 

2.27. Nonstatutory Option means any Option that is not an Incentive Option. 

2.28. Option means an option to purchase shares of Stock. 

2.29. Optionee means a Participant to whom an Option shall have been granted under the Plan. 

2.30. Participant means any holder of an outstanding Award under the Plan. 

2.31. Performance Criteria means the criteria that the Committee selects for purposes of establishing the Performance Goal or Performance Goals for a Participant for a Performance Period, which may be measured on a GAAP or non-GAAP basis, as determined by the Committee. The Performance Criteria used to establish Performance Goals are limited to: (i) EBITDA, defined as earnings before interest, taxes, depreciation, amortization and other non-cash expenses (including, without limitation, any charges related to the Plan or any other equity-based or cash-based incentive compensation plan of the Company), (ii) “cash net income,” defined
as net income before amortization, intangible-related deferred taxes, affiliate depreciation and other non-cash expenses (including, without limitation, any charges related to the Plan or any other equity-based or cash-based incentive compensation plan of the Company), (iii) cash flow (before or after dividends), (iv) cash net income (as defined above) per share, calculated based on diluted average shares of Stock outstanding for any measurement period using the treasury stock method to determine the number of common share equivalents issuable pursuant to any dilutive securities, excluding any shares of Stock issued or issuable pursuant to Awards under the Plan or under any other equity-based compensation plan of the Company, (v) stock price, (vi) return on equity, (vii) stockholder return or total stockholder return, (viii) return on capital (including, without limitation, return on total capital or return on invested capital), (ix) return on investment, (x) return on assets or net
assets, (xi) market capitalization, (xii) economic value added, (xiii) debt leverage (debt to capital), (xiv) revenue, (xv) sales or net sales, (xvi) backlog, (xvii) income, pre-tax income or net income, (xviii) operating income or pre-tax profit, (xix) operating profit, net operating profit or economic profit, (xx) gross margin, operating margin or profit margin, (xxi) return on operating revenue or return on operating assets, (xxii) cash from operations, (xxiii) operating ratio, (xxiv) operating revenue, (xxv) market share improvement, (xxvi) general and administrative expenses and (xxvii) customer service. 

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2.32. Performance Goals means, for a Performance Period, the written goal or goals established by the Committee for the Performance Period based upon the Performance Criteria. The Performance Goals may be expressed in terms of overall Company performance or the performance of a division, business unit, subsidiary, or an individual, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit or Affiliate, either individually, alternatively or in any combination, and measured either quarterly, annually or cumulatively over a period of years, on an absolute basis or relative to a
pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by the Committee. The Committee will, in the manner and within the time prescribed by Section 162(m) of the Code in the case of Qualified Performance-Based Awards, objectively define the manner of calculating the Performance Goal or Goals it selects to use for such Performance Period for such Participant. To the extent consistent with Section 162(m) of the Code (in the case of Qualified Performance-Based Awards), the Committee may appropriately adjust any evaluation of performance against a Performance Goal to exclude any of the following events that occurs during a performance period: (i) asset write-downs, (ii) litigation, claims, judgments or settlements, (iii) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, (iv) accruals for reorganization and restructuring programs and (v) any extraordinary,
unusual, non-recurring or non-comparable items (A) as described in Accounting Principles Board Opinion No. 30, (B) as described in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s Annual Report to stockholders for the applicable year, or (C) publicly announced by the Company in a press release or conference call relating to the Company’s results of operations or financial condition for a completed quarterly or annual fiscal period. 

2.33. Performance Period means the one or more periods of time, which may be of varying and overlapping durations, selected by the Committee, over which the attainment of one or more Performance Goals or other business objectives will be measured for purposes of determining a Participant’s right to, and the payment of, a Qualified Performance-Based Award. No Performance Period may be of more than ten (10) years’ duration. 

2.34. Performance Stock Unit means a Restricted Stock Unit that is awarded pursuant to a Qualified Performance-Based Award and which shall be settled, at the option of the Participant, in cash or shares of Stock or a combination thereof. 

2.35. Performance Unit means a right granted to a Participant under Section 7.5, to receive cash, Stock or other Awards, the payment of which is contingent on achieving Performance Goals or other business objectives established by the Committee. 

2.36. Plan means this 2008 Equity Incentive Plan of the Company, as amended from time to time, and including any attachments or addenda hereto. 

2.37. Qualified Performance-Based Awards means Awards intended to qualify as “performance-based compensation” under Section 162(m) of the Code. 

2.38. Restricted Stock means a grant or sale of shares of Stock to a Participant subject to a Risk of Forfeiture. 

2.39. Restricted Stock Units means rights to receive shares of Stock at the close of a Restriction Period, subject to a Risk of Forfeiture. 

2.40. Restriction Period means the period of time, established by the Committee in connection with an Award of Restricted Stock or Restricted Stock Units, during which the shares of Restricted Stock or Restricted Stock Units are subject to a Risk of Forfeiture described in the applicable Award Agreement. 

2.41. Risk of Forfeiture means a limitation on the right of the Participant to retain Restricted Stock or Restricted Stock Units, including a right of the Company to reacquire shares of Restricted Stock at less than their then Market Value, arising because of the occurrence or non-occurrence of specified events or conditions. 

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2.42. “Russell 3000” means the Russell 3000 Index as published by Russell Investments. In the event the Russell 3000 Index is not published for the ten days preceding a relevant determination, the Committee may select a different basis for determining the Burn Rate Cap. 

2.43. Stock means common stock, par value $0.0001 per share, of the Company, and such other securities as may be substituted for Stock pursuant to Section 8. 

2.44. Stock Appreciation Right means a right to receive any excess in the Market Value of shares of Stock (except as otherwise provided in Section 7.2(c)) over a specified exercise price. 

2.45. Stock Grant means the grant of shares of Stock not subject to restrictions or other forfeiture conditions. 

2.46. Ten Percent Owner means a person who owns, or is deemed within the meaning of Section 422(b)(6) of the Code to own, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company (or any parent or subsidiary corporations of the Company, as defined in Sections 424(e) and (f), respectively, of the Code). Whether a person is a Ten Percent Owner shall be determined with respect to an Option based on the facts existing immediately prior to the Grant Date of the Option. 

3. Term of the Plan 

Unless the Plan shall have been earlier terminated by the Board, Awards may be granted under this Plan at any time in the period commencing on the date of adoption of the Plan by the Board and ending immediately prior to the tenth anniversary of the earlier of the adoption of the Plan by the Board and approval of the Plan by the Company’s stockholders. Awards granted pursuant to the Plan within that period shall not expire solely by reason of the termination of the Plan. Awards of Incentive Options granted prior to stockholder approval of the Plan are expressly conditioned upon such approval, but in the event of the failure of the stockholders
to approve the Plan shall thereafter and for all purposes be deemed to constitute Nonstatutory Options. 

4. Stock Subject to the Plan 

4.1. Awards Other Than Qualified Performance-Based Awards.  The number of shares of Stock issued or issuable pursuant to Awards of Options (including Incentive Options), Stock Appreciation Rights, Restricted Stock, Restricted Stock Units or Performance Units that are not intended to qualify as Qualified Performance-Based Awards shall not exceed 10% multiplied by the sum of (a) and (b), where: 

(a) is that number of shares of Stock issued and outstanding as of September 30, 2008, and 

(b) is the lesser of (i) that number of warrants to purchase Stock that were issued and outstanding as of September 30, 2008, and (ii) that number of warrants to purchase Stock that were issued and outstanding as of September 30, 2008 and that have been exercised as of the determination date. 

4.2. Qualified Performance-Based Awards.  The number of shares of Stock issued or issuable pursuant to Qualified Performance-Based Awards under the Plan shall not exceed the Final Shares minus (i) the Initial Shares, determined as of the Anniversary Date that is the last day of the last Performance Period to expire under this Plan, and (ii) the number of shares of Stock, if any, that, as of the last day of the last Performance Period to expire under this Plan, have been issued pursuant to Awards described in Section 4.1 or are subject to outstanding Awards described in Section 4.1. The number of shares of Stock issued or
issuable pursuant to Qualified Performance-Based Awards under the Plan shall also be subject to reduction if the CAGR for all Performance Periods under the Plan is less than 30%. 

4.3. Application of Limitations.  For purposes of applying the foregoing limitations, (a) if any Option or Stock Appreciation Right expires, terminates, or is cancelled for any reason without having been exercised in full, or if any other Award is forfeited by the recipient or repurchased at less than its Market Value, the shares not purchased by the Optionee or which are forfeited by the recipient or repurchased shall again be available for Awards to be granted under the Plan and (b) if any Option is exercised by delivering previously owned shares in payment of the exercise price therefor, only the net number of shares, that is, the
number of shares issued minus the number received by the Company in payment of the exercise price, shall be considered to 

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have been issued pursuant to an Award granted under the Plan. In addition, settlement of any Award shall not count against the foregoing limitations except to the extent settled in the form of Stock. Shares of Stock issued pursuant to the Plan may be either authorized but unissued shares or shares held by the Company in its treasury. 

5. Administration 

The Plan shall be administered by the Committee; provided, however, that at any time and on any one or more occasions the Board may itself exercise any of the powers and responsibilities assigned the Committee under the Plan and when so acting shall have the benefit of all of the provisions of the Plan pertaining to the Committee’s exercise of its authorities hereunder; and provided further that the Committee may delegate to the President and Chief Executive Officer the authority to grant Awards hereunder to employees who are not Covered Employees and to consultants in accordance with such guidelines as the Committee shall set
forth at any time or from time to time. Subject to the provisions of the Plan, the Committee shall have complete authority, in its discretion, to make or to select the manner of making all determinations with respect to each Award to be granted by the Company under the Plan including the employee, executive officer, consultant or director to receive the Award and the form of Award. In making such determinations, the Committee may take into account the nature of the services rendered by the respective employees, executive officers, consultants, and directors, their present and potential contributions to the success of the Company and its Affiliates, and such other factors as the Committee in its discretion shall deem relevant. Subject to the provisions of the Plan, the Committee shall also have complete authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, to determine the terms and provisions of the respective Award Agreements (which
need not be identical), and to make all other determinations necessary or advisable for the administration of the Plan. The Committee’s determinations made in good faith on matters referred to in the Plan shall be final, binding and conclusive on all persons having or claiming any interest under the Plan or an Award made pursuant hereto. 

6. Authorization of Grants 

6.1. Eligibility.  The Committee may grant from time to time and at any time prior to the termination of the Plan one or more Awards, either alone or in combination with any other Awards, to any employee or executive officer of or consultant to one or more of the Company and its Affiliates or to any non-employee member of the Board or of any board of directors (or similar governing authority) of any Affiliate. However, only employees of the Company, and of any parent or subsidiary corporations of the Company, as defined in Sections 424(e) and (f), respectively, of the Code, shall be eligible for the grant of an Incentive Option.
Further, in no event shall the number of shares of Stock covered by Options or other Awards granted to any one person in any one calendar year exceed 50% of the aggregate number of shares of Stock subject to the Plan. 

6.2. General Terms of Awards.  Each grant of an Award shall be subject to all applicable terms and conditions of the Plan (including but not limited to any specific terms and conditions applicable to that type of Award set out in the following Section), and such other terms and conditions, not inconsistent with the terms of the Plan, as the Committee may prescribe. No prospective Participant shall have any rights with respect to an Award, unless and until such Participant shall have complied with the applicable terms and conditions of such Award (including if applicable delivering a fully executed copy of any agreement evidencing an
Award to the Company). 

6.3. Effect of Termination of Employment, Etc. 

(a) Except as set forth in Section 6.3(b) and (c) with respect to Performance Stock Units, unless the Committee shall provide otherwise with respect to any Award, if the Participant’s employment or other association with the Company and its Affiliates ends for any reason, including because of the Participant’s employer ceasing to be an Affiliate, (i) any outstanding Option or Stock Appreciation Right of the Participant shall cease to be exercisable in any respect not later than ninety (90) days following that event and, for the period it remains exercisable following that event, shall be exercisable only to the extent exercisable at the
date of that event, and (ii) any other outstanding Award of the Participant shall be forfeited or otherwise subject to return to or repurchase by the Company on the terms specified in the 

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applicable Award Agreement. Military or sick leave or other bona fide leave shall not be deemed a termination of employment or other association, provided that it does not exceed the longer of ninety (90) days or the period during which the absent Participant’s reemployment rights, if any, are guaranteed by statute or by contract. 

(b) In the case of Performance Stock Units, in the event that the Participant’s employment or other association with the Company and all its Affiliates terminates before the end of a Performance Period other than within the twenty-four (24) month period following a Change of Control due to (i) voluntary termination without Good Reason, or (ii) involuntary termination for Cause, all Performance Stock Units shall be forfeited and cancelled effective as of the date on which the Participant’s employment or other association with the Company terminates (the “Termination Date”). 

(c) In the case of Performance Stock Units, subject to more favorable terms set forth in the applicable Award Agreement, in the event that the Participant’s employment or other association with the Company and all its Affiliates terminates before the end of a Performance Period due to (A) termination for any reason within twenty-four (24) months following a Change of Control, (B) Disability, (C) death, (D) involuntary termination without Cause or (E) voluntary termination for Good Reason: 

(i) the Participant shall, upon the Termination Date, immediately forfeit that fraction of the Performance Stock Units that is equal to the quotient of (A) the number of days in the Performance Period remaining after the Termination Date, and (B) the total number of days in the Performance Period; and 

(ii) following the end of the Performance Period, and subject to the achievement of the applicable Performance Goal or Goals within the applicable Performance Period, as determined by the Committee, the Participant shall be entitled to receive settlement of his remaining Performance Stock Units as set forth in the Award Agreement. 

6.4. Non-Transferability of Awards.  Except as otherwise provided in this Section 6.4, Awards shall not be transferable, and no Award or interest therein may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. All of a Participant’s rights in any Award may be exercised during the life of the Participant only by the Participant or the Participant’s legal representative. However, the Committee may, at or after the grant of an Award of a Nonstatutory Option, or shares of Restricted Stock, provide that such Award may be transferred by
the recipient to a family member; provided, however, that any such transfer is without payment of any consideration whatsoever and that no transfer shall be valid unless first approved by the Committee, acting in its sole discretion. For this purpose, “family member” means any child, stepchild, grandchild, parent, stepparent, spouse or sibling, including adoptive relationships, a trust in which the foregoing persons have more than fifty (50) percent of the beneficial interests, a foundation in which the foregoing persons (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than fifty (50) percent of the voting interests. 

7. Specific Terms of Awards 

7.1. Options. 

(a) Date of Grant.  The granting of an Option shall take place at the time specified in the Award Agreement. Only if expressly so provided in the applicable Award Agreement shall the Grant Date be the date on which the Award Agreement shall have been duly executed and delivered by the Company and the Optionee. 

(b) Exercise Price.  The price at which shares of Stock may be acquired under each Incentive Option shall be not less than 100% of the Market Value of Stock on the Grant Date, or not less than 110% of the Market Value of Stock on the Grant Date if the Optionee is a Ten Percent Owner. The price at which shares may be acquired under each Nonstatutory Option shall not be so limited solely by reason of this Section. 

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(c) Option Period.  No Incentive Option may be exercised on or after the tenth anniversary of the Grant Date, or on or after the fifth anniversary of the Grant Date if the Optionee is a Ten Percent Owner. The Option period under each Nonstatutory Option shall not be so limited solely by reason of this Section. 

(d) Exercisability.  An Option may be immediately exercisable or become exercisable in such installments, cumulative or non-cumulative, as the Committee may determine. In the case of an Option not otherwise immediately exercisable in full, the Committee may Accelerate such Option in whole or in part at any time; provided, however, that in the case of an Incentive Option, any such Acceleration of the Option would not cause the Option to fail to comply with the provisions of Section 422 of the Code or the Optionee consents to the Acceleration. 

(e) Method of Exercise.  An Option may be exercised by the Optionee giving written notice, in the manner provided in Section 16, specifying the number of shares with respect to which the Option is then being exercised. The notice shall be accompanied by payment in the form of cash or check payable to the order of the Company in an amount equal to the exercise price of the shares to be purchased or, subject in each instance to the Committee’s approval, acting in its sole discretion, and to such conditions, if any, as the Committee may deem necessary to avoid adverse accounting effects to the Company, 

(i) by delivery to the Company of shares of Stock having a Market Value equal to the exercise price of the shares to be purchased, or 

(ii) by surrender of the Option as to all or part of the shares of Stock for which the Option is then exercisable in exchange for shares of Stock having an aggregate Market Value equal to the difference between (1) the aggregate Market Value of shares underlying the surrendered portion of the Option, and (2) the aggregate exercise price under the Option for the surrendered portion of the Option, or 

(iii) unless prohibited by applicable law, by delivery to the Company of the Optionee’s executed promissory note in the principal amount equal to the exercise price of the shares to be purchased and otherwise in such form as the Committee shall have approved. 

If the Stock is traded on an established market, payment of any exercise price may also be made through and under the terms and conditions of any formal cashless exercise program authorized by the Company entailing the sale of the Stock subject to an Option in a brokered transaction (other than to the Company). Receipt by the Company of such notice and payment in any authorized or combination of authorized means shall constitute the exercise of the Option. Within thirty (30) days thereafter but subject to the remaining provisions of the Plan, the Company shall deliver or cause to be delivered to the Optionee or his agent a certificate or certificates
for the number of shares then being purchased. Such shares shall be fully paid and nonassessable. 

(f) Limit on Incentive Option Characterization.  An Incentive Option shall be considered to be an Incentive Option only to the extent that the number of shares of Stock for which the Option first becomes exercisable in a calendar year do not have an aggregate Market Value (as of the date of the grant of the Option) in excess of the “current limit.” The current limit for any Optionee for any calendar year shall be $100,000 minus the aggregate Market Value at the date of grant of the number of shares of Stock available for purchase for the first time in the same year under each other Incentive Option previously
granted to the Optionee under the Plan, and under each other incentive stock option previously granted to the Optionee under any other incentive stock option plan of the Company and its Affiliates, after December 31, 1986. Any shares of Stock which would cause the foregoing limit to be violated shall be deemed to have been granted under a separate Nonstatutory Option, otherwise identical in its terms to those of the Incentive Option. 

(g) Notification of Disposition.  Each person exercising any Incentive Option granted under the Plan shall be deemed to have covenanted with the Company to report to the Company any disposition of such shares prior to the expiration of the holding periods specified by Section 422(a)(1) of the Code and, if and to the extent that the realization of income in such a disposition imposes upon the Company federal, 

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state, local or other withholding tax requirements, or any such withholding is required to secure for the Company an otherwise available tax deduction, to remit to the Company an amount in cash sufficient to satisfy those requirements. 

7.2. Stock Appreciation Rights. 

(a) Tandem or Stand-Alone.  Stock Appreciation Rights may be granted in tandem with an Option (at or, in the case of a Nonstatutory Option, after, the award of the Option), or alone and unrelated to an Option. Stock Appreciation Rights in tandem with an Option shall terminate to the extent that the related Option is exercised, and the related Option shall terminate to the extent that the tandem Stock Appreciation Rights are exercised. 

(b) Exercise Price.  Stock Appreciation Rights shall have an exercise price of not less than fifty percent (50%) of the Market Value of the Stock on the date of the grant of the Award, or in the case of Stock Appreciation Rights in tandem with Options, the exercise price of the related Option. 

(c) Other Terms.  Except as the Committee may deem inappropriate or inapplicable in the circumstances, Stock Appreciation Rights shall be subject to terms and conditions substantially similar to those applicable to a Nonstatutory Option. In addition, an Stock Appreciation Right related to an Option which can only be exercised during limited periods following a Change of Control may entitle the Participant to receive an amount based upon the highest price paid or offered for Stock in any transaction relating to the Change of Control or paid during the thirty (30) day period immediately preceding the occurrence of the Change of
Control in any transaction reported in the stock market in which the Stock is normally traded. 

7.3. Restricted Stock. 

(a) Purchase Price.  Shares of Restricted Stock shall be issued under the Plan for such consideration, in cash, other property or services, or any combination thereof, as is determined by the Committee. 

(b) Issuance of Certificates.  Each Participant receiving a Restricted Stock Award, subject to subsection (c) below, shall be issued a stock certificate in respect of such shares of Restricted Stock. Such certificate shall be registered in the name of such Participant, and, if applicable, shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Award substantially in the following form: 

The transferability of this certificate and the shares represented by this certificate are subject to the terms and conditions of the Highbury Financial Inc. 2008 Equity Incentive Plan and an Award Agreement entered into by the registered owner and Highbury Financial Inc. Copies of such Plan and Agreement are on file in the offices of Highbury Financial Inc. 

(c) Escrow of Shares.  The Committee may require that the stock certificates evidencing shares of Restricted Stock be held in custody by a designated escrow agent (which may but need not be the Company) until the restrictions thereon shall have lapsed, and that the Participant deliver a stock power, endorsed in blank, relating to the Stock covered by such Award. 

(d) Restrictions and Restriction Period.  During the Restriction Period applicable to shares of Restricted Stock, such shares shall be subject to limitations on transferability and a Risk of Forfeiture arising on the basis of such conditions related to the performance of services, Company or Affiliate performance or otherwise as the Committee may determine and provide for in the applicable Award Agreement. Any such Risk of Forfeiture may be waived or terminated, or the Restriction Period shortened, at any time by the Committee on such basis as it deems appropriate. 

(e) Rights Pending Lapse of Risk of Forfeiture or Forfeiture of Award.  Except as otherwise provided in the Plan or the applicable Award Agreement, at all times prior to lapse of any Risk of Forfeiture applicable to, or forfeiture of, an Award of Restricted Stock, the Participant shall have all of the rights of a stockholder of the Company, including the right to vote, and the right to receive any dividends with respect to, the shares of Restricted Stock. The Committee, as determined at the time of Award, may 

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permit or require the payment of cash dividends to be deferred and, if the Committee so determines, reinvested in additional Restricted Stock to the extent shares are available under Section 4. 

(f) Lapse of Restrictions.  If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock, the certificates for such shares shall be delivered to the Participant promptly if not theretofore so delivered. 

7.4. Restricted Stock Units. 

(a) Character.  Each Restricted Stock Unit shall entitle the recipient to a share of Stock (or cash equivalent, in the case of Performance Stock Units) at the close of such Restriction Period as the Committee may establish and subject to a Risk of Forfeiture arising on the basis of such conditions relating to the performance of services, Company or Affiliate performance or otherwise as the Committee may determine and provide for in the applicable Award Agreement. Any such Risk of Forfeiture may be waived or terminated, or the Restriction Period shortened, at any time by the Committee on such basis as it deems appropriate. 

(b) Form and Timing of Payment.  Payment of earned Restricted Stock Units shall be made in shares of Stock in a single lump sum following the close of the applicable Restriction Period; provided, however, that payment of Performance Stock Units shall be made, at the option of the Participant, in shares of Stock or in cash or a combination thereof. At the discretion of the Committee, Participants may be entitled to receive payments equivalent to any dividends declared with respect to Stock referenced in grants of Restricted Stock Units but only following the close of the applicable Restriction Period and then only if the underlying
Stock shall have been earned. Unless the Committee shall provide otherwise, any such dividend equivalents shall be paid, if at all, without interest or other earnings. 

7.5. Performance Units. 

(a) Character.  Each Performance Unit shall entitle the recipient to the value of a specified number of shares of Stock, over the initial value for such number of shares, if any, according to a formula established by the Committee at the time of grant, at the close of a specified Performance Period to the extent specified business objectives, including but not limited to Performance Goals, shall have been achieved. 

(b) Earning of Performance Units.  The Committee shall set Performance Goals or other business objectives in its discretion which, depending on the extent to which they are met within the applicable Performance Period, will determine the number of shares of Stock into which Performance Units will be converted or the value that will be paid to the Participant. After the applicable Performance Period has ended, the holder of Performance Units shall be entitled to receive the number of shares of Stock or the payout of the value of the Performance Units earned by the Participant over the Performance Period, determined as a function of
the extent to which the corresponding Performance Goals or other business objectives have been achieved. 

(c) Form and Timing of Payment.  Payment of earned Performance Units shall be made in a single lump sum following the close of the applicable Performance Period. At the discretion of the Committee, Participants may be entitled to receive any dividends declared with respect to Stock which have been earned in connection with grants of Performance Units which have been earned, but not yet distributed to Participants. The Committee may permit or, if it so provides at grant require, a Participant to defer such Participant’s receipt of the payment of cash or the delivery of Stock that would otherwise be due to such Participant by
virtue of the satisfaction of any requirements or goals with respect to Performance Units. If any such deferral election is required or permitted, the Committee shall establish rules and procedures for such payment deferrals. 

7.6. Stock Grants.  Stock Grants shall be awarded solely in recognition of significant contributions to the success of the Company or its Affiliates, in lieu of compensation otherwise already due and in such other limited circumstances as the Committee deems appropriate. Stock Grants shall be made without forfeiture conditions of any kind. 

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7.7. Qualified Performance-Based Awards. 

(a) Purpose.  The purpose of this Section 7.7 is to provide the Committee the ability to qualify Awards as “performance-based compensation” under Section 162(m) of the Code. If the Committee, in its discretion, decides to grant an Award as a Qualified Performance-Based Award, the provisions of this Section 7.7 will control over any contrary provision contained in the Plan. In the course of granting any Award, the Committee may specifically designate the Award as intended to qualify as a Qualified Performance-Based Award. However, no Award shall be considered to have failed to qualify as a Qualified Performance-Based Award
solely because the Award is not expressly designated as a Qualified Performance-Based Award, if the Award otherwise satisfies the provisions of this Section 7.7 and the requirements of Section 162(m) of the Code and the regulations promulgated thereunder applicable to “performance-based compensation.” 

(b) Authority.  All grants of Awards intended to qualify as Qualified Performance-Based Awards and determination of terms applicable thereto shall be made by the Committee or, if not all of the members thereof qualify as “outside directors” within the meaning of applicable IRS regulations under Section 162 of the Code, a subcommittee of the Committee consisting of such of the members of the Committee as do so qualify. Any action by such a subcommittee shall be considered the action of the Committee for purposes of the Plan. 

(c) Applicability.  This Section 7.7 will apply only to those Covered Employees, or to those persons who the Committee determines are reasonably likely to become Covered Employees in the period covered by an Award, selected by the Committee to receive Qualified Performance-Based Awards. The Committee may, in its discretion, grant Awards to Covered Employees that do not satisfy the requirements of this Section 7.7. 

(d) Discretion of Committee with Respect to Qualified Performance-Based Awards.  Options may be granted as Qualified Performance-Based Awards in accordance with Section 7.1, except that the exercise price of any Option intended to qualify as a Qualified Performance-Based Award shall in no event be less that the Market Value of the Stock on the date of grant. Each Award intended to qualify as a Qualified Performance-Based Award, such as Restricted Stock, Restricted Stock Units (including Performance Stock Units), or Performance Units, shall be subject to satisfaction of one or more Performance Goals. The Committee will have full
discretion to select the length of any applicable Restriction Period or Performance Period, the kind and/or level of the applicable Performance Goal, and whether the Performance Goal is to apply to the Company, a subsidiary of the Company or any division or business unit or to the individual. Any Performance Goal or Goals applicable to Qualified Performance-Based Awards shall be objective, shall be established not later than the earlier of ninety (90) days after the beginning of any applicable Performance Period or the expiration of twenty five percent (25%) of the Performance Period, provided that the achievement of targeted goals under the selected Performance Criteria for the Performance Period is substantially uncertain at such time (or at such other date as may be required or permitted for “performance-based compensation” under Section 162(m) of the Code) and shall otherwise meet the requirements of Section 162(m) of the Code, including the requirement that the
outcome of the Performance Goal or Goals be substantially uncertain (as defined in the regulations under Section 162(m) of the Code) at the time established. 

(e) Payment of Qualified Performance-Based Awards.  A Participant will be eligible to receive payment under a Qualified Performance-Based Award which is subject to achievement of a Performance Goal or Goals only if the applicable Performance Goal or Goals are achieved within the applicable Performance Period, as determined by the Committee. 

(f) Maximum Award Payable.  The maximum Qualified Performance-Based Award payment to any one Participant under the Plan for a Performance Period is 50% of the total number of shares of Stock issuable under the Plan pursuant to Qualified Performance-Based Awards, as set forth in Section 4.2 above, or, if the Qualified Performance-Based Award is paid in cash, 50% of the total number of shares of Stock issuable under the Plan pursuant to Qualified Performance-Based Awards, as set forth in Section 4.2, multiplied by the Market Value of the Stock as of the date the Qualified Performance-Based Award is paid. 

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(g) Limitation on Adjustments for Certain Events.  No adjustment of any Qualified Performance-Based Award pursuant to Section 8 shall be made except on such basis, if any, as will not cause such Award to provide other than “performance-based compensation” within the meaning of Section 162(m) of the Code. 

7.8. Awards to Participants Outside the United States.  The Committee may modify the terms of any Award under the Plan granted to a Participant who is, at the time of grant or during the term of the Award, resident or primarily employed outside of the United States in any manner deemed by the Committee to be necessary or appropriate in order that the Award shall conform to laws, regulations, and customs of the country in which the Participant is then resident or primarily employed, or so that the value and other benefits of the Award to the Participant, as affected by foreign tax laws and other restrictions applicable as a result of
the Participant’s residence or employment abroad, shall be comparable to the value of such an Award to a Participant who is resident or primarily employed in the United States. The Committee may establish supplements to, or amendments, restatements, or alternative versions of the Plan for the purpose of granting and administrating any such modified Award. No such modification, supplement, amendment, restatement or alternative version may increase the share limit of Section 4. 

8. Adjustment Provisions 

8.1. Adjustment for Corporate Actions.  All of the share numbers set forth in the Plan reflect the capital structure of the Company as of September 30, 2008. If subsequent to that date the outstanding shares of Stock (or any other securities covered by the Plan by reason of the prior application of this Section) are increased, decreased, or exchanged for a different number or kind of shares or other securities, or if additional shares or new or different shares or other securities are distributed with respect to shares of Stock, as a result of a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse
stock split, or other similar distribution with respect to such shares of Stock, an appropriate and proportionate adjustment will be made in (i) the maximum numbers and kinds of shares provided in Section 4, (ii) the numbers and kinds of shares or other securities subject to the then outstanding Awards, (iii) the exercise price for each share or other unit of any other securities subject to then outstanding Options and Stock Appreciation Rights (without change in the aggregate purchase price as to which such Options or Rights remain exercisable), and (iv) the repurchase price of each share of Restricted Stock then subject to a Risk of Forfeiture in the form of a Company repurchase right. 

8.2. Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events.  In the event of any corporate action not specifically covered by the preceding Section, including but not limited to an extraordinary cash distribution on Stock, a corporate separation or other reorganization or liquidation, the Committee shall make such adjustment of outstanding Awards and their terms, if any, as it, in its sole discretion, deems equitable and appropriate in the circumstances. The Committee shall make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring
events (including, without limitation, the events described in this Section) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles, if and to the extent the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. 

8.3. Related Matters.  Any adjustment in Awards made pursuant to Section 8.1 or 8.2 shall be determined and made, if at all, by the Committee, acting in its sole discretion, and shall include any correlative modification of terms, including of Option exercise prices, rates of vesting or exercisability, Risks of Forfeiture, applicable repurchase prices for Restricted Stock, and Performance Goals and other financial objectives which the Committee may deem necessary or appropriate so as to ensure the rights of the Participants in their respective Awards are not substantially diminished nor enlarged as a result of the adjustment and
corporate action other than as expressly contemplated in this Section 8. No fraction of a share shall be purchasable or deliverable upon exercise, but in the event any adjustment hereunder of the number of shares covered by an Award shall cause such number to include a fraction of a share, such number of shares shall be adjusted to the nearest smaller whole number of shares. No adjustment of an Option exercise price per share pursuant to this Section 8 shall result in an exercise price which is less than the par value of the Stock. 

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8.4. Transactions. 

(a) Definition of Transaction.  In this Section 8.4, “Transaction” means (1) any merger or consolidation of the Company with or into another entity as a result of which all of the Stock of the Company is converted into or exchanged for the right to receive cash, securities or other property or is cancelled, (2) any exchange of all of the Stock of the Company for cash, securities or other property, (3) any sale, transfer, or other disposition of all or substantially all of the Company’s assets to one or more other persons in a single transaction or series of related transactions or (4) any liquidation or
dissolution of the Company. 

(b) Treatment of Options and Stock Appreciation Rights.  In a Transaction, the Committee may take any one or more of the following actions as to all or any (or any portion of) outstanding Options and Stock Appreciation Rights (together, “Rights”). 

(1) Provide that such Rights shall be assumed, or substantially equivalent rights shall be provided in substitution therefor, by the acquiring or succeeding entity (or an affiliate thereof). 

(2) Upon written notice to the holders, provide that the holders’ unexercised Rights will terminate immediately prior to the consummation of such Transaction unless exercised within a specified period following the date of such notice. 

(3) Provide that outstanding Rights shall become exercisable in whole or in part prior to or upon the Transaction. 

(4) Provide for cash payments, net of applicable tax withholdings, to be made to holders equal to the excess, if any, of (A) the acquisition price times the number of shares of Stock subject to a Right (to the extent the exercise price does not exceed the acquisition price) over (B) the aggregate exercise price for all such shares of Stock subject to the Right, in exchange for the termination of such Right. For this purpose, “acquisition price” means the amount of cash, and market value of any other consideration, received in payment for a share of Stock surrendered in a Transaction. 

(5) Provide that, in connection with a liquidation or dissolution of the Company, Rights shall convert into the right to receive liquidation proceeds net of the exercise price thereof and any applicable tax withholdings. 

(6) Any combination of the foregoing. 

For purposes of paragraph (1) above, a Right shall be considered assumed, or a substantially equivalent right shall be considered to have been provided in substitution therefore, if following consummation of the Transaction the Right confers the right to purchase or receive the value of, for each share of Stock subject to the Right immediately prior to the consummation of the Transaction, the consideration (whether cash, securities or other property) received as a result of the Transaction by holders of Stock for each share of Stock held immediately prior to the consummation of the Transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding shares of Stock); provided, however, that if the consideration received as a result of the Transaction is not solely common stock (or its equivalent) of the acquiring or succeeding entity (or an affiliate thereof), the Committee may provide for the consideration to be received upon the exercise of Right to consist of or be based on solely common stock (or its equivalent) of the acquiring or succeeding entity (or an affiliate thereof) equivalent in value to the per share consideration received by holders of outstanding shares of Stock as a result of the Transaction. 

(c) Treatment of Restricted Stock and Other Awards.  As to outstanding Awards other than Options or Stock Appreciation Rights, upon the occurrence of a Transaction other than a liquidation or dissolution of the Company which is not part of another form of Transaction, the repurchase and other rights of the Company under each such Award shall inure to the benefit of the Company’s successor and shall, unless the Committee determines otherwise, apply to the cash, securities or other property which the Stock was converted into or exchanged for pursuant to such Transaction in the same manner and to the same extent as they applied to
the Award. Upon the occurrence of a Transaction involving a liquidation or dissolution 

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of the Company which is not part of another form of Transaction, except to the extent specifically provided to the contrary in the instrument evidencing any Award or any other agreement between a Participant and the Company, all Risks of Forfeiture and Performance Goals, where otherwise applicable to any such Awards, shall automatically be deemed terminated or satisfied, as applicable. 

(d) Related Matters.  In taking any of the actions permitted under this Section 8.4, the Committee shall not be obligated to treat all Awards, all Awards held by a Participant, or all Awards of the same type, identically. Any determinations required to carry out the foregoing provisions of this Section 8.4, including but not limited to the market value of other consideration received by holders of Stock in a Transaction and whether substantially equivalent Rights have been substituted, shall be made by the Committee acting in its sole discretion. 

9. Change of Control 

Except as otherwise provided below, upon the occurrence of a Change of Control: 

(a) any and all Options and Stock Appreciation Rights not already exercisable in full and not based on the achievement of Performance Goals shall Accelerate with respect to 100% of the shares for which such Options or Stock Appreciation Rights are not then exercisable; 

(b) any Risk of Forfeiture applicable to Restricted Stock and Restricted Stock Units which is not based on achievement of Performance Goals shall lapse with respect to 100% of the Restricted Stock and Restricted Stock Units still subject to such Risk of Forfeiture immediately prior to the Change of Control; and 

(c) all outstanding Awards of Restricted Stock and Restricted Stock Units conditioned on the achievement of Performance Goals or other business objectives and the target payout opportunities attainable under outstanding Performance Units shall be deemed to have been satisfied as of the effective date of the Change of Control as to a pro rata number of shares based on the assumed achievement of all relevant Performance Goals or objectives and the length of time within the Performance Period which has elapsed prior to the Change of Control. All such Awards of Performance Units and Restricted Stock Units shall be paid to the extent earned to
Participants in accordance with their terms within thirty (30) days following the effective date of the Change of Control. 

None of the foregoing shall apply, however, (i) in the case of a Qualified Performance-Based Award specifically designated as such by the Committee at the time of grant (except to the extent that such Award would continue to qualify as qualified performance based compensation as described in Section 162(m)(4)(C) of the Code and applicable guidance thereunder), (ii) in the case of any Award pursuant to an Award Agreement requiring other or additional terms upon a Change of Control (or similar event), or (iii) if specifically prohibited under applicable laws, or by the rules and regulations of any governing governmental agencies or national securities
exchanges. 

10. Settlement of Awards 

10.1. In General.  Options and Restricted Stock shall be settled in accordance with their terms. All other Awards may be settled in cash, Stock, or other Awards, or a combination thereof, as determined by the Committee at or after grant and subject to any contrary Award Agreement; provided however that Performance Stock Units shall be settled in cash, shares of Stock, or a combination thereof at the election of the Participant. The Committee may not require settlement of any Award in Stock pursuant to the immediately preceding sentence to the extent issuance of such Stock would be prohibited or unreasonably delayed by reason
of any other provision of the Plan. 

10.2. Violation of Law.  Notwithstanding any other provision of the Plan or the relevant Award Agreement, if, at any time, in the reasonable opinion of the Company, the issuance of shares of Stock covered by an Award may constitute a violation of law, then the Company may delay such issuance and the delivery of a certificate for such shares until (i) approval shall have been obtained from such governmental agencies, other than the Securities and Exchange Commission, as may be required under any applicable law, rule, or regulation and (ii) in the case where such issuance would constitute a violation of a law administered by or a
regulation of the Securities and Exchange Commission, one of the following conditions shall have been satisfied: 

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(a) the shares are at the time of the issue of such shares effectively registered under the Securities Act of 1933; or 

(b) the Company shall have determined, on such basis as it deems appropriate (including an opinion of counsel in form and substance satisfactory to the Company) that the sale, transfer, assignment, pledge, encumbrance or other disposition of such shares or such beneficial interest, as the case may be, does not require registration under the Securities Act of 1933, as amended or any applicable State securities laws. 

The Company shall make all reasonable efforts to bring about the occurrence of said events. 

10.3. Corporate Restrictions on Rights in Stock.  Any Stock to be issued pursuant to Awards granted under the Plan shall be subject to all restrictions upon the transfer thereof which may be now or hereafter imposed by the charter, certificate or articles, and by-laws, of the Company. 

10.4. Investment Representations.  The Company shall be under no obligation to issue any shares covered by any Award unless the shares to be issued pursuant to Awards granted under the Plan have been effectively registered under the Securities Act of 1933, as amended, or the Participant shall have made such written representations to the Company (upon which the Company believes it may reasonably rely) as the Company may deem necessary or appropriate for purposes of confirming that the issuance of such shares will be exempt from the registration requirements of that Act and any applicable state securities laws and otherwise in
compliance with all applicable laws, rules and regulations, including but not limited to that the Participant is acquiring the shares for his or her own account for the purpose of investment and not with a view to, or for sale in connection with, the distribution of any such shares. 

10.5. Registration.  If the Company shall deem it necessary or desirable to register under the Securities Act of 1933, as amended or other applicable statutes any shares of Stock issued or to be issued pursuant to Awards granted under the Plan, or to qualify any such shares of Stock for exemption from the Securities Act of 1933, as amended or other applicable statutes, then the Company shall take such action at its own expense. The Company may require from each recipient of an Award, or each holder of shares of Stock acquired pursuant to the Plan, such information in writing for use in any registration statement, prospectus,
preliminary prospectus or offering circular as is reasonably necessary for that purpose and may require reasonable indemnity to the Company and its officers and directors from that holder against all losses, claims, damage and liabilities arising from use of the information so furnished and caused by any untrue statement of any material fact therein or caused by the omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made. In addition, the Company may require of any such person that he or she agree that, without the prior written consent of the Company or the managing underwriter in any public offering of shares of Stock, he or she will not sell, make any short sale of, loan, grant any option for the purchase of, pledge or otherwise encumber, or otherwise dispose of, any shares of Stock during the 180 day period commencing on the effective date of the
registration statement relating to the underwritten public offering of securities. Without limiting the generality of the foregoing provisions of this Section 10.5, if in connection with any underwritten public offering of securities of the Company the managing underwriter of such offering requires that the Company’s directors and officers enter into a lock-up agreement containing provisions that are more restrictive than the provisions set forth in the preceding sentence, then (a) each holder of shares of Stock acquired pursuant to the Plan (regardless of whether such person has complied or complies with the provisions of clause (b) below) shall be bound by, and shall be deemed to have agreed to, the same lock-up terms as those to which the Company’s directors and officers are required to adhere; and (b) at the request of the Company or such managing underwriter, each such person shall execute and deliver a lock-up agreement in form and substance equivalent to that which is
required to be executed by the Company’s directors and officers. 

10.6. Placement of Legends; Stop Orders; Etc.  Each share of Stock to be issued pursuant to Awards granted under the Plan may bear a reference to the investment representation made in accordance with Section 10.4 in addition to any other applicable restriction under the Plan, the terms of the Award and that no registration statement has been filed with the Securities and Exchange Commission in respect to such shares of Stock. All certificates for shares of Stock or other securities delivered under the Plan shall be subject to such stock transfer orders and other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of any stock exchange upon which the Stock is then listed, and any applicable 

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federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. 

10.7. Tax Withholding.  Whenever shares of Stock are issued or to be issued pursuant to Awards granted under the Plan, the Company shall have the right to require the recipient to remit to the Company an amount sufficient to satisfy federal, state, local or other withholding tax requirements if, when, and to the extent required by law (whether so required to secure for the Company an otherwise available tax deduction or otherwise) prior to the delivery of any certificate or certificates for such shares. The obligations of the Company under the Plan shall be conditional on satisfaction of all such withholding obligations and the
Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the recipient of an Award. However, in such cases Participants may elect, subject to the approval of the Committee, acting in its sole discretion, to satisfy an applicable withholding requirement, in whole or in part, by having the Company withhold shares to satisfy their tax obligations. Participants may only elect to have Shares withheld having a Market Value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction. All elections shall be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Committee deems appropriate. 

11. Reservation of Stock 

The Company shall at all times during the term of the Plan and any outstanding Awards granted hereunder reserve or otherwise keep available such number of shares of Stock as will be sufficient to satisfy the requirements of the Plan (if then in effect) and the Awards and shall pay all fees and expenses necessarily incurred by the Company in connection therewith. 

12. Limitation of Rights in Stock; No Special Service Rights 

A Participant shall not be deemed for any purpose to be a stockholder of the Company with respect to any of the shares of Stock subject to an Award, unless and until a certificate shall have been issued therefor and delivered to the Participant or his agent. Any Stock to be issued pursuant to Awards granted under the Plan shall be subject to all restrictions upon the transfer thereof which may be now or hereafter imposed by the Certificate of Incorporation and the By-laws of the Company. Nothing contained in the Plan or in any Award Agreement shall confer upon any recipient of an Award any right with respect to the continuation of his or her
employment or other association with the Company (or any Affiliate), or interfere in any way with the right of the Company (or any Affiliate), subject to the terms of any separate employment or consulting agreement or provision of law or corporate articles or by-laws to the contrary, at any time to terminate such employment or consulting agreement or to increase or decrease, or otherwise adjust, the other terms and conditions of the recipient’s employment or other association with the Company and its Affiliates. 

13. Unfunded Status of Plan 

The Plan is intended to constitute an “unfunded” plan for incentive compensation, and the Plan is not intended to constitute a plan subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended. With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Stock or payments with respect to Options, Stock
Appreciation Rights and other Awards hereunder, provided, however, that the existence of such trusts or other arrangements is consistent with the unfunded status of the Plan. 

14. Nonexclusivity of the Plan 

Neither the adoption of the Plan by the Board nor the submission of the Plan to the stockholders of the Company shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including without limitation, the granting of stock options and restricted stock other than under the Plan, and such arrangements may be either applicable generally or only in specific cases. 

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15. Termination and Amendment of the Plan 

15.1. Termination or Amendment of the Plan.  The Board may at any time terminate the Plan or make such modifications to the Plan as it shall deem advisable. Unless the Board otherwise expressly provides, no termination or amendment of the Plan shall affect the terms of any Award outstanding on the date of such termination or amendment. 

15.2. Termination or Amendment of Outstanding Awards.  The Committee may amend the terms of any Award theretofore granted, prospectively or retroactively, provided that the Award as amended is consistent with the terms of the Plan. Also within the limitations of the Plan, the Committee may modify, extend or assume outstanding Awards or may accept the cancellation of outstanding Awards or of outstanding stock options or other equity-based compensation awards granted by another issuer in return for the grant of new Awards for the same or a different number of shares and on the same or different terms and conditions (including but not
limited to the exercise price of any Option). Furthermore, the Committee may at any time (a) offer to buy out for a payment in cash or cash equivalents an Award previously granted or (b) authorize the recipient of an Award to elect to cash out an Award previously granted, in either case at such time and based upon such terms and conditions as the Committee shall establish. 

15.3. Limitations on Amendments, Etc.  No amendment or modification of the Plan by the Board, or of an outstanding Award by the Committee, shall impair the rights (including, without limitation, the terms of any Performance Goal or Performance Period under any Qualified Performance-Based Award) of the recipient of any Award outstanding on the date of such amendment or modification or such Award, as the case may be, without the Participant’s consent; provided, however, that no such consent shall be required if the Board or Committee, as the case may be, determines in its sole discretion and prior to the date of any Change
of Control that such amendment or alteration either is required or advisable in order for the Company, the Plan or the Award to satisfy any law or regulation, including without limitation the provisions of Section 409A of the Code. No Option may be amended or modified to effect the repricing of such Option without the approval of the stockholders of the Company. 

16. Notices and Other Communications 

Any notice, demand, request or other communication hereunder to any party shall be deemed to be sufficient if contained in a written instrument delivered in person or duly sent by first class registered, certified or overnight mail, postage prepaid, or telecopied with a confirmation copy by regular, certified or overnight mail, addressed or telecopied, as the case may be, (i) if to the recipient of an Award, at his or her residence address last filed with the Company and (ii) if to the Company, at its principal place of business, addressed to the attention of its Treasurer, or to such other address or telecopier number, as the case may be, as the
addressee may have designated by notice to the addressor. All such notices, requests, demands and other communications shall be deemed to have been received: (i) in the case of personal delivery, on the date of such delivery; (ii) in the case of mailing, when received by the addressee; and (iii) in the case of facsimile transmission, when confirmed by facsimile machine report. 

17. Governing Law 

The Plan and all Award Agreements and actions taken thereunder shall be governed, interpreted and enforced in accordance with the laws of the State of Delaware, without regard to the conflict of laws principles thereof. 

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