Document:

NEITHER
THE ISSUANCE AND
SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES
INTO WHICH THESE
SECURITIES ARE CONVERTIBLE HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN
EFFECTNE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR (B) AN OPINION OF
COUNSEL (WHICH COUNSEL SHALL BE SELECTED
BY THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT  SECURED BY THE SECURITIES.

 

	Principal
    Amount: $10,000.00	Issue
    Date: July 25,
    2014

 

 

CONVERTIBLE
PROMISSORY NOTE

 

FOR
VALUE RECEIVED, WELL
POWER, INC., a Nevada
corporation (hereinafter called
the "Borrower"),
hereby promises to
pay to the
order of Melvyn Maller,
or registered assigns (the "Holder")
the sum of $10,000.00 together
with any interest as set forth herein,
on July 25, 2015 (the "Maturity Date"),
and to pay interest on the unpaid principal balance hereof at the rate
of eight percent (8%) (the "Interest
Rate") per annum
from the date hereof (the "Issue Date") until the same becomes
due and payable, whether at maturity or upon acceleration or by
prepayment or otherwise. Subject to Section 1.8 below, this Note may be prepaid
in whole or in part at any time. Any amount of principal
or interest on this Note which
is not paid when due shall bear interest at
the lower of the rate of eighteen percent
(18%) per annum or the highest interest rate
permitted by law from the
due date thereof until
the same is paid (the
"Default Interest Rate"). Interest
shall commence accruing on the
Issue Date, shall be computed on the
basis of a 365-day year and the actual number
of days elapsed. All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share
(the "Common Stock") in accordance with the
terms hereof) shall be made in lawful
money of the United
States of America. All payments shall
be made at such address as the Holder shall
hereafter give to the Borrower by written notice made
in accordance with the provisions of this Note. Whenever any amount expressed
to be due by the terms of this Note is due on any day which is not a business day, the same
shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment
date which is not the
date on which this Note is paid
in full, the extension of the due date thereof shall not be taken
into account for purposes of determining the amount of interest due on such date. As used
in this Note, the term
"business day" shall mean any day other than a Saturday, Sunday or a day
on which commercial banks in
the city of New York, New York are authorized or required by law or executive order to remain closed. Delivery of this
Note is subject to Holder's execution of Holder's representations set forth as Exhibit
B.

 

This
Note is free
from all taxes, liens, claims
and encumbrances with
respect to the issue thereof
and shall not
be subject to
preemptive rights or other
similar rights of shareholders of the
Borrower and will not
impose personal liability upon the holder
thereof.

 

The
following terms shall apply to
this Note:

 

ARTICLE
I 

CONVERSION
RIGHTS

 

1.1              
Conversion Right. The Holder
shall have the right
from time to
time, and at
any time the Note
is still outstanding, to convert
all or any part of the outstanding and unpaid principal and
interest on this Note into fully
paid and non-assessable shares of Common
Stock, as such Common Stock exists on the
Issue Date, or any shares
of capital stock or other securities
of the Borrower into which such
Common Stock shall hereafter be changed
or reclassified at the conversion price (the "Conversion Price")
determined as provided herein (a "Conversion");
provided, however, that in no event shall the Holder be entitled to convert
any portion of this Note in excess of that
portion of this Note upon
conversion of which the
sum of (1) the number of shares
of Common Stock beneficially owned by the Holder and
its affiliates (other than shares of Common Stock which may
be deemed beneficially owned through the ownership of the unconverted portion
of the Note or the unexercised or unconverted portion of
any other security of the Borrower
subject to a limitation on conversion or exercise analogous to
the limitations contained herein) and (2) the
number of shares of Common Stock issuable upon the conversion of the portion
of this Note with respect to
which the determination of this proviso
is being made, would result in beneficial ownership
by the Holder and its affiliates of more
than 4.99% of the outstanding shares of Common Stock. For purposes of the
proviso to the immediately preceding
sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange
Act"), and Regulations 13D-G thereunder, except
as otherwise provided in
clause (1) of such proviso, provided,
further, however, that the
limitations on conversion may be
waived by the Holder upon, at the
election of the Holder, not less than 61
days' prior notice to
the Borrower, and the provisions of the conversion limitation shall continue
to apply until such 61st day (or
such later date, as determined by the Holder,
as may be specified
in such notice of
waiver). The number of shares of
Common Stock to be
issued upon each conversion of this Note shall be
determined by dividing the Conversion Amount
(as defined below) by the applicable Conversion
Price then in effect on the date
specified in the notice of
conversion, in the form attached
hereto as Exhibit A (the "Notice
of Conversion"), delivered to the Borrower by the Holder
in accordance with Section 1.4 below; provided that
the Notice of Conversion is submitted
by facsimile (or by other means
resulting in, or reasonably expected
to result in, notice)
to the Borrower before 5:00 p.m., New York,
New York time on such
conversion date (the "Conversion Date"). The term "Conversion Amount" means, with respect to any conversion
of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Borrower's
option, accrued and unpaid interest, if any, on
such principal amount at the interest
rates provided in this Note to the Conversion
Date, provided, however, that the
Company shall have the right to pay any
or all interest in cash.

 

    	 

    	 

    

 

1.2              
Conversion Price.

 

(a)               
Calculation of Conversion
Price. The conversion
price (the "Conversion
Price") shall
equal the lower of
(i) $.09 or (ii) the Variable
Conversion Price (as defined herein)(subject
to equitable adjustments for stock splits, stock dividends or rights offerings by the
Borrower  relating to the Borrower's securities or the securities of any subsidiary
of the Borrower, combinations, recapitalization, reclassifications, extraordinary
distributions and similar events). The "Variable Conversion Price" shall
mean 50% multiplied by the Market Price
(as defined herein)(representing a discount rate
of 50%). "Market Price" means the
lowest individual daily VWAP (as
defined below) for the Common Stock during
the ten (10) Trading Day period ending
one Trading Day prior
to the date the Conversion Notice is received by the Holder
from the Borrower (the "Conversion
Date"). "VWAP" means the
volume weighted average price (the aggregate
sales price of all trades of
Common Stock during a Trading Day
divided by the
total number of
shares of Common Stock traded during such Trading
Day) of the Common Stock during a Trading Day as reported on Bloomberg, L.P.,
Quotestream, or other applicable service.

 

1.3              
Authorized Shares. The Borrower
covenants that during
the period the conversion
right exists, the
Borrower will reserve
from its authorized
and unissued Common Stock a sufficient
number of shares, free from preemptive rights, to provide for the issuance of Common Stock
upon the full conversion of this Note. The
Borrower is required at all times to have authorized and reserved five times the number
of shares that is actually issuable upon full conversion of the Nate (based on the Conversion
Price of the Nate in effect from time to time) (the "Reserved Amount"). The
Borrower represents that upon issuance, such shares will be duly and
validly issued, fully paid and non-assessable.
In addition, if the Borrower shall
issue any securities or make any change
to its capital structure which would change the number of shares of Common Stock into
which the Note shall be convertible at the then current Conversion Price, the Borrower shall
at the same time make proper
provision so that
thereafter there shall be a sufficient
number of shares
of Common Stock authorized and reserved, free from preemptive rights, for conversion
of the outstanding Note. The Borrower (i) acknowledges that it has irrevocably instructed
its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note (in the form attached hereto
as Exhibit C), and (ii) agrees that its issuance
of this Note shall constitute full authority to its officers and agents
who are charged with the duty of
executing stock certificates to
execute and issue the necessary certificates
for shares of Common Stock in accordance with the terms and conditions of this Note.

 

1.4                
Method of
Conversion.

 

(a)                   
Mechanics of Conversion.
Subject to Section
1.1, this Note
may be converted by
the Holder in
whole or in
part at any
time from time to
time after the
Issue Date, by (A) submitting to
the Borrower a Notice of Conversion
(by facsimile or other reasonable means of communication dispatched
on the Conversion Date prior
to 5:00 p.m., New York, New York time) and
(B) subject to Section 1.4(b), surrendering this
Note at the principal office of the
Borrower.

 

(b)                   
Surrender of Note
upon Conversion. Notwithstanding
anything to the contrary
set forth herein,
upon conversion of
this Note in accordance with
the terms hereof, the Holder shall
not be required to
physically surrender this Note to
the Borrower unless the entire unpaid principal
amount of this Note is so converted. The
Holder and the Borrower shall maintain
records showing the principal amount
so converted and the dates of such conversions or shall use
such other method, reasonably satisfactory
to the Holder and
the Borrower, so as not to require physical
surrender of this Nate upon
each such conversion. In
the event of any
dispute or discrepancy, such records of
the Borrower shall, prima facie, be controlling
and determinative in the absence of manifest error. Notwithstanding the foregoing,
if any portion of this Note is converted as aforesaid, the Holder
may not transfer this Note unless the
Holder first physically surrenders this
Note to the Borrower, whereupon the
Borrower will forthwith issue and deliver upon the
order of the Holder a new Note of like tenor, registered
as the Holder (upon payment by the
Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid principal
amount of this Note. The Holder
and any assignee, by
acceptance of this Note, acknowledge
and agree that, by reason
of the provisions of this paragraph, following conversion of
a portion of this Note, the unpaid
and unconverted principal amount of this
Note represented by this Note may be less
than the amount stated on the face hereof.

 

(c)                    
Payment of Taxes. The Borrower
shall not be
required to pay
any tax which may
be payable in
respect of any transfer involved in
the issue and delivery of shares of Common Stock or other securities or property on
conversion of this Note in a name other
than that of the Holder (or in street name), and the Borrower shall not be required
to issue or deliver any such shares or other
securities or property unless and until the person or persons
(other than the Holder or the custodian
in whose street name such shares are
to be held for the
Holder's account) requesting the issuance thereof shall have paid to the
Borrower the amount of
any such tax or shall have established
to the satisfaction of the Borrower that such tax has been paid.

 

(d)                   
Delivery of Common
Stock upon Conversion.
Upon receipt by
the Borrower from the
Holder of a
facsimile transmission (or other
reasonable means of communication) of a Notice of Conversion meeting
the requirements for conversion as provided in this Section 1.4, the Borrower
shall issue and deliver or cause to be
issued and delivered to or upon the order of the
Holder certificates for the Common Stock
issuable upon such conversion within three (3)
business days after such receipt (and, solely
in the case of conversion of the entire unpaid
principal amount hereof, surrender of this Note)
(such second business day being hereinafter referred
to as the "Deadline") in accordance
with the terms hereof.

 

(e)                    
Obligation of Borrower
to Deliver Common
Stock. Upon receipt
by the Borrower of
a Notice of
Conversion, the Holder
shall be deemed to be the
holder of record of the Common Stock issuable upon
such conversion, the outstanding principal
amount and the amount of accrued and unpaid interest
on this Note shall be reduced to reflect such conversion, and, unless the
Borrower defaults on its obligations under
this Article I, all rights with respect to
the portion of this Note being so converted
shall forthwith terminate except the right to
receive the Common Stock or other securities, cash or other assets, as herein provided,
on such conversion. If the Holder shall have
given a Notice of Conversion as provided herein, the
Borrower's obligation to issue and deliver the
certificates for Common Stock shall
be absolute and unconditional, irrespective
of the absence of any action by the Holder
to enforce the same, any waiver or consent with respect to
any provision thereof, the recovery of any judgment against any person or any
action to enforce the same, any failure
or delay in the enforcement of any other obligation of the Borrower to the holder
of record, or any setoff, counterclaim, recoupment, limitation or
termination, or any breach or alleged breach by the Holder of any
obligation to the Borrower, and irrespective of
any other circumstance which might otherwise limit such obligation of the Borrower
to the Holder in connection with such conversion. The Conversion Date specified in
the Notice of Conversion shall be the
Conversion Date so long
as the Notice of Conversion is received by the Borrower
before 5:00 p.m., New York, New
York time, on such date.

 

    	2

    	 

    

 

(f)                    
Delivery of Common
Stock by Electronic Transfer.
In lieu of delivering physical certificates
representing the Common Stock
issuable upon conversion, provided
the Borrower's transfer agent is participating in
the Depository Trust  Company ("DTC")
Fast Automated Securities Transfer ("FAST") program, upon
request of the Holder and its compliance with the provisions contained in Section
1.1 and in this Section
1.4, the Borrower shall use its best efforts
to cause its transfer agent to electronically
transmit the Common Stock issuable upon conversion to
the Holder by crediting the account
of Holder's Prime Broker with DTC through its
Deposit Withdrawal Agent Commission ("DWAC")
system.

 

(g)                   
Failure to Deliver
Common Stock Prior to
Deadline. Without in
any way limiting the
Holder's right to
pursue other remedies, including
actual damages and/or equitable relief,
the parties agree that if delivery of
the Common Stock issuable upon conversion of
this Note is more
than three (3) business days after the Deadline (other
than a failure due to the circumstances described in Section 1.3
above, which failure shall be governed by such Section)
the Borrower shall pay to the Holder
$100 per day in cash, for each day beyond
the Deadline that the Borrower fails to deliver
such Common Stock. Such cash amount shall be paid to Holder by the fifth day of
the month following the month in
which it has accrued or, at the option of
the Holder (by written notice to
the Borrower by the first day
of the month following the month in which it has
accrued), shall be added to
the principal amount of this Note,
in which event interest shall accrue thereon in accordance with
the terms of this Note and such additional
principal amount shall be convertible into Common Stock in accordance with the
terms of this Note. In addition,
the Conversion Price for the conversion underlying
the delivery of Common Stock that was delayed
more than three
(3) business days after the Deadline shall be adjusted to the lower of
(i) the Conversion Price as of
such Conversion Notice Date and (ii) the
Conversion Price if the Conversion Notice was received on the date
that the Conversion Shares are actually received by the Holder.

 

1.5Concerning
the Shares.  The
shares of Common
Stock issuable upon
conversion of this Note
may not be
sold or transferred
unless (i) such shares are sold pursuant
to an effective registration statement under the Act or (ii)
the Borrower or its transfer agent shall have been furnished with an opinion
of counsel (which opinion shall be in
form, substance and scope customary for
opinions of counsel in comparable transactions)
to the effect that the shares to
be sold or transferred may be sold or transferred
pursuant to an exemption from
such registration or (iii) such
shares are sold or transferred pursuant
to Rule 144 under the Act (or a successor
rule) ("Rule 144") or (iv) such shares
are transferred to an "affiliate" (as defined in Rule 144)
of the Borrower who agrees to
sell or otherwise transfer the shares
only in accordance with this Section 1.5 and who
is an Accredited Investor (as defined
under the Act). Subject to
the removal provisions set forth below, until such time as
the shares of Common Stock issuable
upon conversion of this Note have been
registered under the
Act or otherwise may be
sold pursuant to Rule 144 without any restriction as to
the number of securities as of a
particular date that can then be
immediately sold, each certificate
for shares of
Common Stock issuable upon conversion of this Note that has not
been so included in an effective registration statement or
that has not been sold pursuant to
an effective registration statement
or an exemption that permits removal
of the legend, shall bear a legend substantially
in the following form, as appropriate:

 

"NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT ECURED BY THE SECURITIES."

 

The
legend set forth
above shall be
removed and the
Borrower shall issue
to the Holder
a new certificate therefore
free of any
transfer legend if
(i) the Borrower
or its transfer
agent shall have received an opinion of counsel, in form, substance and scope
customary for opinions of counsel in comparable
transactions, to the effect that
a public sale or
transfer of such Common Stock
may be made without registration under
the Act and
the shares are so sold
or transferred, (ii) such
Holder provides the Borrower or
its transfer agent
with reasonable assurances that the
Common Stock issuable upon conversion
of this Note (to
the extent such securities
are deemed to have been acquired
on the same date) can be sold
pursuant to Rule 144 or (iii)
in the case of the Common Stock
issuable upon conversion of this
Note, such security
is registered for
sale by the Holder under an
effective registration statement filed under
the Act or otherwise
may be sold pursuant
to Rule 144 without any restriction as
to the number
of securities as of a particular
date that can then be immediately sold.

 

1.6              
Effect of Certain
Events.

 

(a)                
Effect of Merger,
Consolidation, Etc. At the
option of the Holder,
the sale, conveyance or
disposition of all
or substantially all
of the assets of the Borrower,
the effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of the voting
power of the Borrower is disposed of, or the consolidation, merger or other
business combination of the Borrower with
or into any other
Person (as defined below)
or Persons when the Borrower is
not the survivor shall either: (i) be
deemed to be an Event
of Default (as defined in Article II) pursuant to which the Borrower shall
be required to pay to the Holder upon the consummation of and as a condition to such transaction
an amount equal to the Default Amount (as defined in Article II)
or (ii) be treated
pursuant to Section l.6(b) hereof.
"Person" shall mean any individual, corporation, limited
liability company, partnership, association, trust or other entity or organization.

 

(b)                
Adjustment Due to
Merger, Consolidation, Etc.
If, at any
time when this Note
is issued and
outstanding and prior
to conversion of all of the Note, there shall be any merger,
consolidation, exchange of shares, recapitalization, reorganization, or other
similar event, as a result of which shares
of Common Stock of the Borrower shall be changed
into the same or
a different number of shares of another
class or classes of stock or securities of the Borrower or another entity, or in case
of any sale or conveyance of all or substantially all of the assets of the Borrower
other than in connection with a plan of complete liquidation of the Borrower, then
the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms
and conditions specified herein and in lieu of the shares of Common Stock immediately
theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in
such transaction had this Note been converted in
full immediately prior
to such transaction (without regard to
any limitations on conversion set forth
herein), and in any such case appropriate provisions
shall be made with respect to the rights and interests of the Holder of this Note
to the end that the provisions hereof (including, without limitation, provisions for
adjustment of the
Conversion Price and of the number of shares issuable upon conversion of
the Note) shall thereafter be applicable,
as nearly as may be practicable in relation to any securities or assets thereafter
deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in
this Section l.6(b) unless (a) it first
gives, to the extent practicable,
thirty (30) days prior written notice
(but in any event at least fifteen
(15) days prior written notice) of the record
date of the special meeting of shareholders to approve, or if there is no such record
date, the consummation of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event
or sale of assets (during which time the Holder shall
be entitled to convert this Note) and (b) the resulting successor or acquiring entity
(if not the Borrower) assumes by written
instrument the obligations of this Section l.6(b). The above provisions shall similarly
apply to successive
consolidations, mergers, sales, transfers or
share exchanges.

 

    	3

    	 

    

 

(c)                
Adjustment Due to
Distribution. If the
Borrower shall declare
or make any
distribution of its assets
(or rights to acquire
its assets) to holders of Common
Stock as a dividend, stock repurchase, by way
of return of capital
or otherwise (including any dividend or distribution to the Borrower's shareholders
in cash or shares (or rights to acquire
shares) of capital stock of a subsidiary (i.e., a spin-off)) (a "Distribution"),
then the Holder of this Note shall be entitled, upon any conversion of this Note after
the date of record for determining shareholders entitled to such Distribution,
to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock
issuable upon such conversion had such Holder been the holder of such shares of Common
Stock on the record date for the determination
of shareholders entitled to such Distribution.

 

(d)                
Notice of Adjustments.
Upon the occurrence
of each adjustment
or readjustment of the
Conversion Price as
a result of the events
described in this Section 1.6, the Borrower,
at its expense, shall promptly compute
such adjustment or readjustment and prepare and furnish to the Holder of a
certificate setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Borrower shall, upon the
written request at any time of the Holder,
furnish to such Holder a like certificate setting forth
(i) such adjustment or readjustment,
(ii) the Conversion Price
at the time in effect and (iii) the
number of shares of Common Stock and
the amount, if any, of other securities
or property which at the time would be received upon conversion of the Note.

 

1.7              
Status as Shareholder.
Upon submission of a
Notice of Conversion
by a Holder, (i)
the shares covered
thereby shall be deemed converted
into shares of Common Stock and (ii) the Holder's rights as a Holder
of such converted portion of this
Note shall cease and terminate, excepting only the right to receive certificates
for such shares of Common Stock and to any remedies provided herein or otherwise available
at law or in equity
to such Holder because of a failure by
the Borrower to comply with the terms of
this Note. Notwithstanding the foregoing, if a Holder has not received certificates
for all shares of Common Stock prior to the tenth (10th) business day after the expiration of
the Deadline with respect to a conversion
of any portion of this Note for any
reason, then (unless the Holder otherwise elects to retain its
status as a holder of Common Stock
by so notifying the
Borrower) the Holder shall regain the rights of a
Holder of this Note with respect to
such unconverted portions of this Note
and the Borrower shall, as soon as practicable, return such unconverted Note to the
Holder or, if the Note has not been surrendered, adjust its records
to reflect that such portion of this Note
has not been converted. In all cases,
the Holder shall retain all of its rights
and remedies (including, without limitation, (i) the right to receive Conversion
Default Payments pursuant to Section 1.3
to the extent required thereby for such Conversion
Default and any subsequent Conversion
Default and (ii) the right to have the
Conversion Price with respect
to subsequent conversions
determined in accordance with
Section 1.3) for the Borrower's
failure to convert
this Note.

 

1.8              
Prepayment.  Notwithstanding anything
to the contrary
contained in this
Note, the Borrower shall
have the right,
exercisable on not
less than ten (10)
Trading Days prior written notice to the Holder
of the Note to prepay the outstanding Note (principal and accrued interest),
in full or in part. Notwithstanding the
preceding sentence, the Holder shall have the opportunity to convert the outstanding
principal and interest on the Note pursuant to this Agreement at any time prior to payment by the Borrower on such principal and
interest.

 

ARTICLE
II

EVENTS
OF DEFAULT

 

If
any of the
following events of
default (each, an
"Event of
Default") shall
occur:

 

2.1              
Failure to Pay
Principal or Interest.
The Borrower fails
to pay the principal hereof
or interest thereon when
due on this
Note, whether at
maturity, upon acceleration or otherwise.

 

2.2              
Conversion and the
Shares. The Borrower
fails to issue
shares of Common Stock
to the Holder (or
announces or threatens in writing
that it will not honor its obligation
to do so) upon exercise by the Holder of the
conversion rights of the Holder in accordance
with the terms of this Note, fails
to transfer or cause its transfer agent
to transfer (issue)(electronically or in certificated form)
any certificate for shares
of Common Stock issued to the Holder
upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower
directs its transfer agent not
to transfer or delays, impairs, and/or hinders
its transfer agent in transferring (or
issuing)(electronically or in certificated form) any certificate
for shares of Common Stock to
be issued to the Holder upon conversion of
or otherwise pursuant to this Note as and when required by this Note, or fails to
remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders
its transfer agent from removing) any restrictive
legend (or to withdraw any stop transfer instructions
in respect thereof) on any certificate for any shares of
Common Stock issued to the
Holder upon conversion of or otherwise
pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does
not intend to honor the obligations described in this paragraph) and any such
failure shall continue uncured (or any written announcement, statement or threat not
to honor its obligations shall not be rescinded in
writing) for three (3) business
days after the Holder shall have delivered a Notice
of Conversion.

 

2.3              
Breach of Covenants.
The Borrower breaches any material
covenant or other material
term or condition
contained in this
Note and such
breach continues for a period of ten (10) days after written notice thereof
to the Borrower from the Holder.

 

2.4              
Breach of Representations
and Warranties. Any representation
or warranty of the
Borrower made herein
or in any
agreement, statement or certificate
given in writing pursuant hereto or in
connection herewith, shall be false
or misleading in any material respect
when made and the breach of which has (or with
the passage of time will have)
a material adverse effect on the rights of
the Holder with
respect to this
Note.

 

2.5              
Receiver or Trustee.
The Borrower or
any subsidiary of
the Borrower shall make
an assignment for
the benefit of
creditors, or apply for or consent
to the appointment of a receiver or
trustee for it
or for a substantial part of its
property or business, or such a receiver
or trustee shall otherwise be appointed.

 

2.6              
Judgments. Any money
judgment, writ or
similar process shall
be entered or filed
against the Borrower
or any subsidiary
of the Borrower or
any of its property or other
assets for more than $50,000, and
shall remain unvacated, unbonded or unstayed for a period of twenty (20) days
unless otherwise consented to by the Holder, which consent will not be unreasonably
withheld.

 

2.7              
Bankruptcy. Bankruptcy, insolvency,
reorganization or liquidation proceedings
or other proceedings, voluntary
or involuntary, for relief
under any bankruptcy
law or any
law for the relief
of debtors shall be instituted
by or against the Borrower or
any subsidiary of
the Borrower.

 

    	4

    	 

    

 

2.8              
Delisting of Common
Stock. The Borrower
shall fail to
maintain the listing
of the Common Stock
on at least
one of the
OTCBB or an
equivalent replacement exchange, the Nasdaq
National Market, the Nasdaq SmallCap Market, the New York
Stock Exchange, or the American Stock Exchange.

 

2.9              
Failure to Comply
with the Exchange
Act. The Borrower
shall fail to
comply with the reporting
requirements of the
Exchange Act; and/or
the Borrower shall cease
to be subject to the reporting requirements
of the Exchange Act.

 

2.10           
Liquidation. Any dissolution,
liquidation, or winding
up of Borrower
or any substantial portion
of its business.

 

2.11           
Cessation of Operations.
Any cessation of operations
by Borrower or
Borrower admits it is
otherwise generally unable
to pay its
debts as such debts
become due, provided, however, that any disclosure of the Borrower's ability
to continue as a "going concern" shall not be an admission that the Borrower cannot
pay its debts as they become due.

 

2.12           
Maintenance of Assets.
The failure by
Borrower to maintain
any material intellectual property rights,
personal, real property or
other assets which are necessary to conduct
its business (whether now or in the
future).

 

2.13           
Financial Statement Restatement.
The restatement of any
financial statements filed by
the Borrower with
the Securities and
Exchange Commission ("SEC")
for any date or period from two years prior to
the Issue Date of this Note and until this
Note is no longer outstanding, if the result of such restatement
would, by comparison to
the unrestated financial statement,
have constituted a material adverse effect
on the rights of the Holder with respect
to this Note.

 

2.14           
Replacement of Transfer
Agent. In the
event that the
Borrower proposes to replace
its transfer agent,
the Borrower fails to
provide, prior to
the effective date of such replacement,
a fully executed Irrevocable Transfer Agent Instructions in a form attached hereto as Exhibit C (including but not limited to
the provision to irrevocably reserve shares of Common Stock in the Reserved
Amount) signed by the successor
transfer agent to Borrower
and the Borrower.

 

2.15           
Failure to Accept
Opinion of Holder.
Borrower's failure to
accept the opinion of
counsel provided by
the Holder for
no good cause with
respect to the transfer of Securities
pursuant to an exemption from registration, such as Rule 144 or Regulation
S.

 

2.16           
Holder's Rights upon
Event of Default.
Upon the occurrence
and continuance of any
Event of Default,
Holder in its
sole and absolute
discretion shall have the
right to declare all unpaid interest
and principal immediately due
and payable and exercise all
other legal rights in connection therewith,
without presentment, demand, or protest, all
of which are hereby expressly waived.

 

ARTICLE
III

MISCELLANEOUS

 

3.1              
Failure or Indulgence
Not Waiver. No
failure or delay
on the part
of the Holder in
the exercise of
any power, right
or privilege hereunder shall operate as a waiver
thereof, nor shall any single
or partial exercise
of any such power, right or
privilege preclude other or
further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

3.2              
Notices. All notices,
demands, requests, consents,
approvals, and other communications
required or permitted hereunder
shall be in writing
and, unless otherwise specified
herein, shall be (i) personally served,
(ii) deposited in the
mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable
air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as
such party shall have specified most
recently by written notice. Any notice or other communication required or permitted
to be given hereunder shall be deemed effective (a) upon hand delivery or delivery
by facsimile, with accurate confirmation generated by
the transmitting facsimile machine, at the address or number designated below
(if delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following
the date of mailing by express
courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications
shall be:

 

If
to
the Borrower,
to: Well Power,
Inc.

Attn:
Dan M. Patience

11111
Katy Freeway, Suite
# 910

Houston,
TX 77079

 

If
to
the Holder:
Melvyn Maller

17402
Citronia Street

Northridge,
CA 91325

 

    	5

    	 

    

 

3.3              
Amendments. This Note
and any provision
hereof may only
be amended by
an instrument in writing
signed by the Borrower
and the Holder. The
term "Note" and all reference
thereto, as used throughout this instrument, shall
mean this instrument as originally
executed, or if later amended or supplemented,
then as so amended
or supplemented.

 

3.4              
Assignability. This Note
shall be binding
upon the Borrower
and its successors and
assigns, and shall
inure to be
the benefit of
the Holder and its successors
and assigns. Each transferee of this Note
must be an "accredited investor" (as
defined in Rule 501(a) of the 1933
Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged
as collateral in connection with a bona fide
margin account or other lending arrangement.

 

3.5              
Cost of Collection.
If default is
made in the
payment of this
Note, the Borrower shall
pay the Holder hereof costs of collection,
including reasonable attorneys' fees.

 

3.6              
Governing Law. This
Note shall be
governed by and
construed in accordance with
the laws of
the State of
California without regard
to principles of
conflicts of laws. Any action brought
by either party against the other concerning the transactions contemplated
by this Note shall be brought only in the state courts of California
or in the federal courts located in the state and county of Los Angeles. The parties to this Note hereby irrevocably waive
any objection to jurisdiction and venue of any action instituted hereunder and shall
not assert any defense based
on lack of jurisdiction or venue or based upon forum non conveniens. The
Borrower and Holder waive trial by jury. The prevailing party
shall be entitled to recover from the other party its reasonable
attorney's fees and costs. In the event
that any provision of this Note or any
other agreement delivered in connection herewith is invalid
or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed
inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not
affect the validity or enforceability of any other provision of any agreement. Each
party hereby irrevocably waives personal service of process and consents to
process being served in
any suit, action or proceeding
in connection with this Agreement
or any other Transaction Document by mailing
a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery)
to such party at the address in
effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process
 and notice thereof. Nothing contained herein
shall be deemed to limit in any
way any right to serve process in any
other manner permitted by law.

 

3.7              
Certain Amounts. Whenever
pursuant to this
Note the Borrower
is required to pay
an amount in
excess of the
outstanding principal amount (or the portion thereof
required to be paid at that time) plus accrued
and unpaid interest plus in the
case of Default, interest on such interest, the Borrower and the
Holder agree that the actual damages to the
Holder from the receipt of cash payment on this Note may
be difficult to determine and the amount to
be so paid by the Borrower represents
stipulated damages and not a penalty and
is intended to compensate the
Holder in part for loss of the opportunity to
convert this Note and to
earn a return from the sale of
shares of Common Stock acquired upon conversion
of this Note at a price in excess of the price paid for such
shares pursuant to this Note. The Borrower and the Holder
hereby agree that such amount of stipulated damages is not plainly
disproportionate to the possible
loss to the Holder from the receipt of
a cash payment without
the opportunity to convert this Note into shares of Common
Stock.

 

3.8              
Preservation of Personal
Information. To the
extent not in
violation of applicable laws,
Borrower shall take
all reasonable steps to protect the personal information
of Holder (such as Holder's name and address) from publicity and shall refrain from including such information in filings
with the SEC. In any case, Borrower shall inform Holder (or Holder's representative) prior to any required publishing
of Holder's personal information.

 

3.9              
Notice of Corporate
Events. Except as
otherwise provided below,
the Holder of this
Note shall have
no rights as a
Holder of Common Stock unless and only to the extent
that it converts this Note into
Common Stock.

 

3.10           
Remedies. The Borrower
acknowledges that a
breach by it
of its obligations hereunder
will cause irreparable harm
to the Holder, by vitiating the intent and
purpose of the transaction contemplated
hereby. Accordingly, the Borrower acknowledges that the
remedy at law for a breach of its obligations under this Note will be inadequate
and agrees, in the event of a breach or threatened breach by the Borrower of the provisions
of this Note, that the Holder shall be entitled, in addition to all
other available remedies at law
or in equity, and in addition to the penalties
assessable herein, to an injunction or injunctions restraining,
preventing or curing any breach of this
Note and to enforce specifically
the terms and provisions thereof,
without the necessity of showing economic loss and without any bond or other
security being required.

 

(Signature
page immediately follows)

 

    	6

    	 

    

 

IN
WITNESS WHEREOF, Borrower
has caused this
Note to be
signed in its
name by its duly
authorized officer as
of Issue Date.

 

 

"BORROWER":

 

Well
Power, Inc.

a
Nevada corporation

By:
/s/ Dan Patience

Name:
Dan Patience

Title:
President

 

    	7SnowEmploymentAgreement

Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AGREEMENT (the “Agreement”) is dated as of the 26th day of August by and between Team Health, Inc., a Tennessee corporation (the “Company”), and Michael D. Snow (“Employee”).
WITNESSETH:

WHEREAS, the Company desires to continue to employ Employee pursuant to the terms of this Agreement; 

WHEREAS, Employee desires to be so employed pursuant to the terms of this Agreement; and
WHEREAS, the Company and Employee desire to amend and restate Employee’s prior Employment Agreement with the Company, dated as of April 18, 2013 (the “Prior Agreement”), as reflected in this Agreement.
NOW THEREFORE, based upon these premises, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree upon the terms and conditions of Employee’s employment with the Company that are set forth herein,
1.    Effectiveness/Employment and Term. 
1.1    This Agreement constitutes a binding obligation of the parties as of the date hereof; provided that notwithstanding any other provision of this Agreement, the operative provisions of this Agreement shall become effective as of September 1, 2014 (the “Effective Date”).
1.2    The Company agrees to employ Employee and Employee agrees to be employed by the Company pursuant to the terms of this Agreement, and for the term of this Agreement, as the President and Chief Executive Officer of the Company and of Team Health Holdings, Inc. (“Holdings”), reporting to the Board of Directors of Holdings (the “Board”) to perform the duties assigned to Employee by the Board. The term of this Agreement shall be for a period of three (3) years commencing with the Effective Date, subject to earlier termination pursuant to this Agreement. Thereafter, this Agreement shall automatically renew for successive one (1) year terms unless sooner terminated pursuant to Section 6 of this Agreement. 
2.    Duties. Employee will perform all duties customarily incident to Employee’s position and such duties that are properly assigned to from time to time by the Board.  Employee shall devote Employee’s entire business time, attention and effort to the affairs of the Company and shall use Employee’s reasonable best efforts to promote the interests and success of the Company, and shall cooperate fully with the Board in the advancement of the best interests of the Company; provided, however, that Employee may serve on corporate, civic or charitable boards or committees, deliver lectures, fulfill speaking engagements, or manage personal investments, provided that such activities do not individually or in the aggregate significantly interfere with, or are otherwise not inconsistent with, the performance of Employee’s duties under this Agreement. Nothing herein shall prevent Employee from engaging in certain passive investments so long as the same do not require Employee’s 

management efforts, are passive, are not inconsistent with Employee’s duties hereunder and are not prohibited by the restrictive covenants of Section 7.
3.    Compensation.
3.1    Salary. Commencing on the Effective Date, Employee shall receive an annualized base salary of $900,000 per year, payable biweekly. On an annual basis, the Board may review Employee’s total compensation and may, in its sole discretion, increase Employee’s base salary from time to time without the necessity of further action to amend this Agreement. Employee’s base salary as in effect at any time is hereinafter referred to as the “Base Salary”.
3.2    Bonus. For each fiscal year of the Company, Employee will be eligible to earn a bonus payment based on performance, determined in accordance with Exhibit A (the “Bonus”). The Bonus, if any, shall be paid to Employee within two and one-half (2.5) months after the end of the applicable fiscal year, or at such time as similar bonuses are paid to other similarly situated employees of Company.
3.3.    Taxes and Other Applicable Deductions. From all compensation paid to Employee, the Company shall withhold all applicable sums for all state, federal and local taxes, and such other amounts as are necessary and applicable or agreed to by Employee.
3.4     Equity Interest Incentives. Employee shall be eligible to receive awards as a participant in the Team Health Holdings, Inc. Amended and Restated 2009 Stock Incentive Plan (the “Plan”), subject to the terms of the Plan and the approval and sole discretion of the Board and, if applicable, subject to compliance with any Executive Stock Ownership Guidelines as approved by the Board.  
3.5    Sign-On Award.  On the Effective Date, the Company will pay to Employee a cash lump sum sign-on bonus in the amount of $50,000.
4.    Employee Benefits. In addition to Employee’s Base Salary, Employee shall be entitled to all standard benefits normally provided by the Company to its similarly situated executive officers, which may be sponsored, developed or established by the Company from time to time in the sole discretion of the Company. Such benefits shall also include, to the extent the Company owns or leases on a full-time basis an aircraft for business use, reasonable personal use of such aircraft; provided, that such use does not interfere with bona-fide business of the Company. For purposes of this Section, reasonable use shall include up to forty (40) hours of flight time per calendar year (and on a pro-rata basis for the portion of 2014 for which the Employee is employed as the Chief Executive Officer of the Company), with unused hours forfeited at the end of each applicable year. Employee shall not be entitled to any remuneration for unused hours hereunder upon termination of employment or otherwise.
5.    Business Expenses. The Company will reimburse Employee (within sixty (60) days following submission by Employee to the Company of appropriate supporting documentation) for Employee’s usual and customary business expenses incurred in the course of Employee’s employment in accordance with the Company’s applicable policies and procedures, including expenditure limits and substantiation requirements, in effect from time to time regarding reimbursement of expenses incurred by similar situated employees of the Company; provided claims for such reimbursement (accompanied by supporting documentation) are submitted to the Company within ninety (90) days following the date such claims are incurred.

6.    Termination. Notwithstanding any other provision of this Agreement, the provisions of this Section 6 shall exclusively govern Employee’s rights to termination payments and benefits under this Agreement upon termination of employment with the Company. 
6.1    Mutual Agreement/Resignation without Good Reason/Death or Disability. Employee’s employment shall terminate upon the occurrence of either of the following events:
(a)    The Company and Employee shall mutually agree to termination in writing or Employee shall resign without Good Reason; provided that Employee shall be obligated to give the Company at least ninety (90) days advance written notice of any resignation without Good Reason. Upon Employee’s termination of employment due to mutual agreement, or the resignation of employment by Employee without Good Reason (as defined herein), the Company will pay to Employee the amount of any unpaid Base Salary owed through the date of termination, and shall reimburse Employee for any unreimbursed expenses pursuant to Section 5 for expenses incurred in the performance of Employee’s duties hereunder prior to termination.
(b)    The death of Employee or termination by the Company due to Employee’s Disability. Disability for purposes of this Agreement shall be the inability of Employee to materially perform Employee’s duties hereunder due to a physical or mental condition for a period of ninety (90) consecutive days, as reasonably determined by the Board in good faith. Upon Employee’s termination of employment for death or disability, Company will pay to Employee the amount of any unpaid Base Salary owed through the date of termination, and shall reimburse Employee for any unreimbursed expenses pursuant to Section 5 for expenses incurred in the performance of Employee’s duties hereunder prior to termination. 
6.2    Termination for Cause. Employee’s employment may be terminated by the Company for “Cause” upon the occurrence of any of the following events:
(a)    Employee’s conviction of or the entering of a guilty plea or plea of no contest with respect to a felony, the equivalent thereof, or any other crime involving fraud, dishonesty or moral turpitude which in the reasonable judgment of the Company is materially detrimental to the Company or materially affects Employee's ability to perform Employee’s duties pursuant to this Agreement;
(b)    Employee’s intentional neglect of or material inattention to Employee’s duties;
(c)     Employee commits an intentional and material act (i) to defraud the Company or its affiliates, or (ii) of embezzlement or dishonesty against the Company or its affiliates; 
(d)    Employee willfully impedes or endeavors to influence, obstruct or impede or fails to materially cooperate with an investigation authorized by the Company, a self-regulatory organization or a governmental department or agency; or
(e)    Employee’s failure to maintain his family primary residence in Knoxville, TN or the immediate vicinity thereof or Employee’s material breach of this Agreement;

provided, however, that no event described under clauses (b) or (e) above shall constitute “Cause” unless the Company first notifies Employee of such event and the event, if capable of being cured, remains uncured for more than ten (10) days following the date of such notice. 

Upon the Company’s termination of employment for Cause or upon termination of employment due to death or disability, Company will pay to Employee the amount of any unpaid Base Salary owed through the date of termination, and shall reimburse Employee for any unreimbursed expenses pursuant to Section 5 for expenses incurred in the performance of Employee’s duties hereunder prior to termination, and Company will have no other liability to Employee hereunder. Such termination shall be without prejudice to any other remedy to which the Company may be entitled, either by law, or in equity, or under the terms of this Agreement.
6.3    Termination Without Cause. The Company may terminate the Employee’s employment without Cause immediately at any time upon written notice to Employee.  In the event that the Company terminates Employee’s employment without Cause, Company will pay to Employee the amount of any unpaid Base Salary owed through the date of termination, and shall reimburse Employee for any un-reimbursed expenses pursuant to Section 5 for expenses incurred in the performance of Employee’s duties hereunder prior to termination. In addition, Employee shall be entitled to the severance compensation and rights described in Section 6.5(a). 
6.4    Termination for Good Reason. Employee may voluntarily resign Employee’s employment for “Good Reason” upon the occurrence of any of the following:
(a)    The assignment to Employee of duties that represent a substantial adverse alteration in the nature or status of Employee’s responsibilities. 
(b)    Any reduction in Employee’s annual Base Salary (other than across the board reduction of similarly situated employees of the Company). 
(c)    Employee’s required relocation to a place of business more than fifty (50) miles away from Employee’s current place of business.
(d)    Any material breach by the Company of this Agreement or any other agreement with, or obligation to or for the benefit of, Employee, including but not limited to any stock option or stock incentive plan, in each case that is adverse to Employee.
Notwithstanding the foregoing, no event shall constitute Good Reason unless and until Employee shall have notified the Company in writing describing the event which constitutes Good Reason and then only if the Company shall fail to cure such event within thirty (30) days following its receipt of such written notice; provided, further, that “Good Reason” shall cease to exist for an event on the 60th day following the later of its occurrence or Employee’s knowledge thereof, unless Employee has given the Company written notice thereof prior to such date.
Upon Employee’s termination of employment for Good Reason, Company will pay to Employee the amount of any unpaid Base Salary owed through the date of termination, and shall reimburse Employee for any un-reimbursed expenses pursuant to Section 5 for expenses incurred in the performance of Employee’s duties hereunder prior to termination. In addition, Employee shall be entitled to the severance compensation and rights described in Section 6.5(a).
6.5    Severance Compensation and Other Obligations.
(a)    If Employee’s employment is terminated by the Company without Cause or by Employee for Good Reason, then, subject to Employee’s continued compliance with the provisions of Section 7 and 8 of this Agreement, and provided Employee has signed a standard release of claims 

in favor of the Company and its Related Companies, the Company shall provide to Employee the following:
(i)    Employee will receive an amount equal to two (2) times Employee’s Base Salary, payable in bi-weekly installments over a two year period, beginning on the date of termination.
(ii)    Employee will receive an amount equal to two (2) times the average annual Bonuses paid to Employee pursuant to Section 3.2 of this Agreement for the two most recently completed Performance  Periods (as defined in Exhibit A), payable in bi-weekly installments over a two year period, beginning on the date of termination. 

(iii)    In order to reimburse Employee for Employee’s expenses associated with continued medical benefits coverage, payment to Employee of an aggregate amount equal to twenty-four (24) months of premiums for Company group medical benefits available to Employee and Employee’s family that were in force for Employee and Employee’s family immediately prior to termination.  The amount of such premiums shall be equal to the monthly premium set for those medical benefits pursuant to the continuation of medical coverage under section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”) and sections 601 through 608, inclusive, of ERISA (collectively, “COBRA”) at the time of Employee’s termination.  These payments shall be made by Company to Employee regardless of the COBRA continuation coverage actually in effect or the premiums actually paid for such coverage, and shall be payable in bi-weekly  installments, beginning on the date of termination. Employee understands and acknowledges that the payments specified by this Section 6.5(a)(iii) shall be made subject to all income, withholding and other employment taxes and Employee is solely responsible for all income, employment and other taxes that may be imposed thereon.

(iv)    Employee will receive any unpaid Bonus earned for all prior completed Performance Periods.  Additionally, Employee will receive a pro rata Bonus for the Performance Period in which Employee’s termination occurred, based on actual performance for the full Performance Period (and any exercise of negative discretion applied in a manner consistent with such negative discretion applied to other senior executives) multiplied by a fraction, the numerator of which is the number of days Employee was employed during the Performance Period through the date of termination and the denominator of which is 365, and paid to Employee when such bonuses are paid to other senior executives.
7.    Restricted Activities.
7.1    Preliminary Statement. Employee acknowledges that by virtue of Employee’s duties under this Agreement, Employee shall become aware of various sensitive and confidential information, and shall develop contacts and relationships which Employee otherwise would not have had access to or developed. Employee further acknowledges that such information and relationships would give Employee an unfair competitive advantage should Employee compete with the Company. Employee further acknowledges that the Company has certain subsidiaries and business divisions (collectively, the “Related Companies”) and that Employee may also become aware of certain confidential information relating to the Related Companies and will develop certain contacts and relationships with clients or customers of the Related Companies which would give Employee an unfair competitive advantage if Employee should compete with the Related Companies. Accordingly, Employee agrees that Employee shall not, directly or indirectly, whether alone or as a partner, officer, director, investor, employee, agent, member or shareholder of any other entity or corporation, without 

the prior written consent of the Company, violate any of the covenants (the “Covenants”) set forth in this Section 7. For purposes of this Agreement, the term “business division” shall mean any person or entity which controls, is controlled by, or is under common control with the Company or a Related Company.
7.2    Covenant Not to Divulge Confidential Information. During the term of Employee’s employment with the Company, whether pursuant to this Agreement or otherwise, and after termination of Employee’s employment with the Company, Employee shall not (i) use any Confidential Information of or concerning the Company or the Related Companies except for the Company’s benefit or (ii) disclose or divulge to any third party any Confidential Information relating to the Company or the Related Companies, except as otherwise required by law. “Confidential Information” shall mean information concerning the Company or any Related Company, whether written or oral, which Employee is or becomes aware of and which has not been publicly disclosed. Information shall not be deemed “publicly disclosed” if disclosed by Employee in violation of this Agreement or as a result of such information being disclosed to employees or agents of the Company or any Related Company. 
7.3.    Covenant Not to Compete or Interfere with Business Relationships. During the term of Employee’s employment with the Company, whether pursuant to this Agreement or otherwise, and continuing for a period of two (2) years after termination of Employee’s employment with the Company  Employee shall not engage in any activity competitive with or adverse to the Company or any Related Company described in this Section 7.3. 
(a)    Employee shall not solicit or hire (for Employee or on behalf of a third party) any person who is then, or during the term of this Agreement was, an employee or contractor (including, without limitation, any contract physicians) of the Company or any Related Company. Contract physicians shall include those physicians with whom the Company or any Related Company then has a contract, or which have actively been recruited by the Company or any Related Company within one hundred eighty (180) days prior to termination of this Agreement.
(b)    Employee shall not induce or attempt to induce any person or entity doing business with the Company or any Related Company, to terminate such relationship, or engage in any other activity detrimental to any Related Company. Specifically, Employee shall not solicit or contract with (a) any then current client of the Company or any Related Company, (b) any client with which the Company or any Related Company previously did business during the one (1) year period immediately prior to termination of Employee’s employment with the Company, or (c) any prospective client of the Company or any Related Company which the Company or a Related Company was “actively seeking” to do business with within the one (1) year period immediately before termination of Employee’s employment with the Company. (For purposes of this Agreement, the Company or a Related Company will be deemed to have been “actively seeking” to do business with a prospective client if the Company or a Related Company did any of the following: (A) met with the administration of such prospective client, (B) submitted a response to a Request for Proposal (“RFP”) or other formal proposal from such prospective client, or (C) made any other written response to a request, solicitation, or initial discussion by or with such prospective client.)
(c)    Employee shall not be employed by nor have any financial relationship with any entity which directly or indirectly performs any competitive activity which Employee is individually prohibited from performing under the terms of this Agreement.

(d)    Notwithstanding the restrictions specified in this Section 7, nothing herein shall be construed to prohibit Employee from: (i) owning, solely as a passive investment, the securities of an entity which are publicly traded on a national or regional stock exchange or on the over-the-counter market or investing through a private equity fund in securities of an entity that is not publicly traded, provided that Employee (A) is not a controlling person or, or a member of a group which controls, such entity and (B) does not, directly or indirectly, own 5% or more of any class of securities of such entity; or (ii) owning, solely as a passive investment, the securities of an entity which are not publicly traded provided that such entity is not engaged in a principal business of providing emergency room services to hospitals.
Except as specifically provided herein, Employee is free to engage in any business activity, not otherwise prohibited by this Agreement, in any geographic location.
7.4    Construction. For purposes of this Section 7, the term “then” shall mean at the time of Employee’s engagement in the applicable conduct. The Covenants are essential elements of this Agreement, and but for Employee’s agreement to comply with the Covenants, the Company would not have entered into this Agreement. The Covenant shall be construed as independent of any other provisions in this Agreement. Except as provided in Section 7.6 below, the existence of any claim or cause of action of Employee against the Company or any Related Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement of any of the Covenants. The period of time during which Employee is prohibited from engaging in the business practices described in the Covenants shall be extended by any length of time during which Employee is in breach of the Covenants. The Company and Employee agree that the Covenants are appropriate and reasonable when considered in light of the nature and extent of the business conducted by the Company. However, if a court of competent jurisdiction determines that any portion of the Covenants, including without limitation, the specific time period, scope or geographical area, is unreasonable or against public policy, then such Covenants shall be considered divisible as to time, scope, and geographical area and the maximum time period, scope or geographical area which is determined to be reasonable and not against public policy shall be enforced.
7.5    Remedies. The parties agree that if Employee breaches any Covenant, the Company or the Related Companies, as applicable, will suffer irreparable damages and Employee will receive a benefit for which Employee had not paid. Employee agrees that (i) damages at law will be difficult to measure and an insufficient remedy to the Company or a Related Company in the event that Employee violates the terms of this Section 7 and (ii) the Company and the Related Companies shall be entitled, upon application to a court of competent jurisdiction, to obtain injunctive relief to enforce the provisions of this Section 7 without the necessity of posting a bond or proving actual damages, which injunctive relief shall be in addition to any other rights or remedies available to the Company or the Related Companies. No remedy shall be exclusive of any other, and neither application for nor obtaining injunctive or other relief shall preclude any other remedy available, including money damages and reasonable attorneys’ fees. Employee agrees to pay the Company or the Related Companies all costs and expenses incurred by the Company or the Related Companies relating to the enforcement of the terms of this Section 7, including reasonable attorneys’ fees, both at trial and in appellate proceedings. Employee acknowledges and agrees that the Related Companies are intended beneficiaries of the Covenants and shall have the same rights and remedies as the Company to enforce the Covenants.
7.6    Limitation on Enforcement. In the event the Company materially breaches this Agreement by failing to meet a payment obligation hereunder (as defined below), and Employee is not in breach of this Agreement, then Employee shall no longer be bound by the Covenants. For purposes of this Agreement, “materially breaches this Agreement by failing to meet a payment obligation 

hereunder” shall mean (i) the Company has failed to meet a payment obligation hereunder (and likewise failed to cure such nonpayment within thirty (30) days following notice from Employee) and (ii) the Company did not have a good faith basis to not pay the disputed payment to Employee. If the Company has a good faith dispute regarding the amount owed to Employee, such dispute shall be submitted to arbitration pursuant to Section 20 herein. If a good faith dispute does exist regarding any payment obligation, the Company shall only be deemed to have materially breached this Agreement by failing to meet a payment obligation hereunder if, after the amount to be paid is determined by an arbitrator, the Company does not pay such amount awarded by the arbitrator within thirty (30) days after the arbitrator’s decision.
8.    Inventions and Intellectual Property. Employee acknowledges that all developments, including, without limitation, inventions, patentable or otherwise, discoveries, improvements, patents, trade secrets, designs, reports, computer software, flow charts and diagrams, procedures, data, documentation, ideas and writings and applications thereof relating to the present or planned business of the Company or any Related Company that, alone or jointly with others, Employee may conceive, create, make, develop, reduce to practice or acquire during the term of this Agreement (collectively, the “Developments”) are works made for hire and shall remain the sole and exclusive property of the Company, and Employee hereby assigns to the Company all of Employee’s right, title and interest in and to all such Developments. All related items, including, but not limited to, memoranda, notes, lists, charts, drawings, records, files, computer software, programs, source and programming narratives and other documentation (and all copies thereof) made or compiled by Employee, or made available to Employee, concerning the business or planned business of the Company or any Related Company shall be the property of the Company and shall be delivered to the Company promptly upon the termination of this Agreement. The provisions of this Section 8 shall survive the termination of this Agreement.
9.    Key Man Insurance. The Company shall have the option to purchase a key man disability and/or life insurance policy regarding Employee which names the Company or its designee as beneficiary. Employee agrees to cooperate with the Company in obtaining such policies including, without limitation, submitting to a reasonably requested medical examination.
10.    Death. If Employee dies before the date on which all amounts owing to the Employee hereunder are paid in full, the Company and Holdings, as the case may be, shall pay to Employee’s estate (or such other recipient as designated from time to time by Employee in writing) such remaining amounts when and as such amounts were otherwise payable to Employee. After receiving the payments provided under this Section 10, Employee and Employee’s estate shall have no further rights against the Company for compensation under this Agreement.
11.    Assignment and Binding Effect. Employee may not sell, assign, transfer, or otherwise convey any of Employee’s rights or delegate any of Employee’s duties under this Agreement without the prior written consent of the Company. Otherwise, this Agreement shall be binding upon and inure, to the benefit of the parties and their successors, assigns, heirs, representatives and beneficiaries.
12.    Entire Agreement and Modification. This Agreement sets forth the entire understanding of the parties with respect to the subject matter hereof, supersedes all existing agreements between them concerning such subject matter, and may be modified only by a written instrument duly executed by both parties.
13.    Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any waiver must be in 

writing. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. 
14.    Governing Law and Venue and Limitations Period. Tennessee law shall govern the rights and obligations under this Agreement, without giving effect to any conflict of laws principles that would require application of the laws of any other jurisdiction. In the event litigation is necessary, such legal action shall be commenced only in a court, of competent jurisdiction in Knox County, Tennessee; litigation commenced other than in Knox County, Tennessee shall be subject to being dismissed, stayed or having venue transferred to Knox County at the option of the party not commencing said litigation. The parties further waive all objections and defenses to litigation being conducted in Knox County, Tennessee, based upon venue or under the doctrine of forum non conveniens. Legal proceedings for breach of this Agreement shall be commenced within twelve (12) months of any alleged breach or thereafter be barred.
15.    Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, or first class mail, to the addresses below, or hand-delivered to the party to whom it is to be given. Any party may change such address by written notice to the other party. Any notice or other communication given by certified mail or first class mail shall be deemed given two (2) days after mailing thereof, except for a notice changing a party’s address which shall be deemed given at the time of receipt thereof.

		
	If to the Company:
	Team Health, Inc.

265 Brookview Centre Way
Suite 400
Knoxville, Tennessee 37919
Attention: General Counsel 
 
		
	With a copy to: 
	Team Health, Inc.

265 Brookview Centre Way
Suite 400
Knoxville, Tennessee 37919
Attention: Human Resources Vice President 

If to Employee:    
Address on File With Human Resources
    
Notwithstanding anything herein to the contrary, if actual written notice is received, regardless, of the means of transmittal, such notice shall be deemed to be acceptable and effective as proper notice under this Section 15.
16.    Severability. Except as otherwise provided in Section 7.4, in the event that any provision in this Agreement shall be found by a court, arbitrator, referee or governmental authority of competent jurisdiction to be invalid, illegal or unenforceable, such provision shall be construed and enforced as if it had been narrowly drawn so as not to be invalid, illegal or unenforceable, and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be effected or impaired thereby, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. 

17.    Headings. The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.
18.    Confidentiality. Subject to any requirements to publicly disclose this Agreement, during the term of this Agreement and thereafter, Employee shall not disclose any terms or information pertaining to any provision of this Agreement to any person or entity without the prior written consent of the Company, with the exception of Employee’s tax, legal or accounting advisors for legitimate business purposes of Employee, or as otherwise required by law.
19.    Enforcement Costs. Subject to the provisions of Section 7.5 herein, if any legal action or other proceeding is brought, for the enforcement of any of the terms or conditions of this Agreement, or because of an alleged dispute, breach, or default, in connection with any of the provisions of this Agreement the prevailing party in such action shall be entitled to recover from the non-prevailing party the costs it incurred in such action including, but not limited to, reasonable attorneys’ fees (including costs and fees incurred on appeal), in addition to any other relief to which such party may be entitled.
20.    Survival. Termination of this Agreement shall not terminate any continuing obligation(s) of the parties under this Agreement, and the parties hereby agree that such obligation(s) shall survive termination, unless the context of the obligation(s) requires otherwise. 
21.    Name or Ownership Change. This Agreement shall continue in full force and effect in the event of a change in the name or ownership of the Company.
22.    Compliance with other Agreements. Employee represents and warrants that the execution of this Agreement and Employee’s performance of Employee’s obligations hereunder will not conflict with, or result in a breach of any provision of, or result in the termination of, or constitute a default under, any agreement to which Employee is a party or by which Employee is or may be bound. 
23.    No Rule of Construction. This Agreement shall be construed to be neither against nor in favor of any party hereto based upon any party’s role in drafting this Agreement, but rather in accordance with the fair meaning hereof.
24.    Indemnification.
24.1    General. The Company agrees that if Employee is made a party or is threatened to be made a party to any claim, action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that Employee is or was a trustee, director, officer, member, shareholder, partner, employee or agent of the Company or any of its Related Companies or is or was serving at the request of the Company or any of its business divisions as a trustee, director, officer, member, shareholder, partner, employee or agent of another corporation or a partnership, joint venture, limited liability company, trust or other entity, including without limitation, service with respect to employee benefit plans, whether or not the basis for such Proceeding is alleged action in an official capacity while serving as a trustee, director, officer, member, shareholder, partner, employee, agent or otherwise, Employee shall be indemnified and held harmless by the Company to the fullest extent authorized by law, as the same exists or may hereafter be amended, against all Expenses (as defined herein) incurred or suffered by Employee in connection therewith, and such indemnification shall continue as to Employee even if he has ceased to be a trustee, director, officer, member, shareholder, partner or agent of, or is no longer employed by, the Company or any of its Related Companies and shall inure to the benefit of Employee’s heirs, executors and administrators; provided, however, that except with respect to proceedings to enforce rights to indemnification under this Agreement, the 

Company shall indemnify Employee in connection with a Proceeding (or part thereof) initiated by Employee only if such Proceeding (or part thereof) was authorized by the Board of Directors of the Company.  It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of Expenses where the undertaking required pursuant to this Agreement, if any, has been tendered to the Company) that the claimant has not met the standards of conduct which make it permissible under the Tennessee General Corporation Act for the Company to indemnify the claimant for the amount claimed but the burden of such defense shall be on the Company.
24.2    Expenses. As used in this Section 24, “Expenses” shall include, without limitation, damages, losses, judgments, liabilities, fines, penalties, excise taxes, settlements, costs, attorneys’ fees, accountants’ fees, disbursements and costs of attachment or similar bonds, costs of investigations, and any expenses of establishing a right to indemnification under this Agreement.
24.3    Enforcement. If a claim or request under this Section 24 is not paid by the Company, or on its behalf, within thirty (30) days after a written claim or request has been received by the Company, Employee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim or request and, if successful in whole or in part, Employee shall also be entitled to be paid the costs and expenses, including, without limitation, attorneys’ fees, or prosecuting such suit, together with prejudgment interest.
24.4    Partial Indemnification. If Employee is entitled to indemnification by the Company for some or a portion of any Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Employee for the portion of such Expenses to which Employee is entitled.
24.5    Advances of Expenses. Expenses incurred by Employee in connection with any Proceeding shall be paid by the Company in advance upon Employee’s request that the Company pay such Expenses, but only in the event that Employee shall have delivered in writing to the Company (i) an undertaking to reimburse the Company for Expenses with respect to which Employee is not entitled to indemnification, and (ii) a statement of Employee’s good faith belief that the standard of conduct necessary for indemnification by the Company has been met.
24.6    Notice of Claim. Employee shall give the Company notice of any claim made against Employee for which indemnification will or could be sought under this Agreement. In addition, Employee shall give the Company such information and cooperation as it may reasonably require and as shall be within Employee’s power and at such times and places as are convenient for Employee.
24.7    Defense of Claim. With respect to any Proceeding (except any criminal or regulatory Proceeding) as to which Employee notifies the Company of the commencement thereof: (i) the Company will be entitled to participate in such Proceeding at its own expense; (ii) except as otherwise provided below, to the extent it so desires, the Company will be entitled to assume the defense thereof, with counsel satisfactory to Employee, which in the Company’s discretion may be regular counsel to the Company and may be counsel to other officers and directors of the Company or any subsidiary thereof (Employee also shall have the right to employ Employee’s own counsel in such action, suit or Proceeding if Employee reasonably concludes that failure to do so would involve a conflict of interest between the Company and Employee, and under such circumstances the fees and expenses of such counsel shall be at the expense of the Company.); and (iii) the Company shall not be liable to indemnify Employee under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent, such consent not to be unreasonably withheld. The Company shall not settle any action or claim in any manner that would impose any penalty that would not be paid directly or 

indirectly by the Company or result in any limitation on, or reporting requirements to third parties by, Employee without Employee’s prior written consent. Neither the Company nor Employee will unreasonably withhold or delay their respective consent to any proposed settlement. A party from which consent to settle is requested shall respond to such request no later than five (5) days, unless for good cause, but in no event less than thirty (30) days. A party’s response shall either consent or set forth in reasonable detail the basis on which consent is withheld. A party failing to timely respond as provided herein shall be deemed to have consented to such proposed settlement.
24.8    Non-Exclusivity. The right to indemnification and the payment of expenses incurred in defending a Proceeding in advance of its final disposition conferred in this Section 24 shall not be exclusive of any right that Employee may have or hereafter may acquire under any statute or certificate of incorporation or bylaws of the Company or any subsidiary thereof, agreement, vote of shareholders or disinterested directors or trustees or otherwise.
 25. Compliance With IRC 409A.
25.1    Application of Section 409A. To the extent of any compliance issues or ambiguous terms, this Agreement shall be construed in such a manner so as to comply with the requirements of Section 409A of the Code, and the rules set forth in this Section 25.1 shall apply with respect to any payments that may be subject to Section 409A of the Code notwithstanding any other provision of this Agreement.
25.2    Timing of Payments.  Notwithstanding the applicable provisions of this Agreement regarding the timing of payments, any payment due hereunder which is contingent upon receipt of the Release described in Section 6.5 shall be made, if at all, in accordance with this Section 25.2, and only if Employee has delivered to the Company a properly executed Release for which all legally mandated revocation rights of the Employee have expired prior to the sixtieth (60th) day following the date of termination.  Any such payment shall be made after receipt of such executed and irrevocable Release within such sixty (60) period, unless otherwise scheduled to be made after such period pursuant to the terms of this Agreement; provided, however, if the sixty (60) day period for such payments begins in one taxable year of Employee and ends in a second taxable year of Employee, any payments otherwise payable within such sixty (60) day period will be made in the second taxable year.  Any payments due after such sixty (60) period shall be payable in accordance with their regularly scheduled payment date.  All payments hereunder are subject to any required delay pursuant to Section 25.3, if applicable. If the Company does not receive a properly executed Release, for which all rights of revocation have lapsed, prior to the time specified in this Section 25.2, Employee shall forfeit all rights to any payments under Section 6.5 of this Agreement which are contingent on such Release.
25.3    “Specified Employee” Delay in Payment.  Notwithstanding anything herein to the contrary, (i) if at the time of Employee’s termination of employment with the Company Employee is a “specified employee” as defined in Section 409A of the Code and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Employee) until the date that is six months following Employee’s termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code) and (ii) if any other payments of money or other benefits due to Employee hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such 

payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board, that does not cause such an accelerated or additional tax. The Company shall consult with Employee in good faith regarding the implementation of the provisions of this Section 25; provided that neither the Company nor any of its employees or representatives shall have any liability to Employee with respect to thereto. For purposes of Section 409A of the Code, the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments and references herein to Employee’s termination of employment shall refer to Employee’s “separation from service” within the meaning of the default provisions of Treas. Reg. § 1.409A-1(h).
25.4    Expenses; In-Kind Benefits.  To the extent that reimbursements or other in-kind benefits under this Agreement constitute nonqualified deferred compensation, (i) all expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Employee, (ii) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (ii) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.
26.    Effect of Termination. Any termination of the Employee’s employment with the Company shall automatically be deemed to be a simultaneous resignation of all other positions and titles the Employee holds with the Company, Holdings or any of their business divisions, whether as an officer, director, fiduciary, administrator or otherwise.
27.    Section 280G. In the event that part or all of the consideration, compensation or benefits to be paid to Employee under this Agreement together with the aggregate present value of payments, consideration, compensation and benefits under all other plans, arrangements and agreements applicable to Employee (collectively, the “Total Payments”) constitute “excess parachute payments” under Section 280G(b) of the Code subject to an excise tax under Section 4999 of the Code, then the Total Payments to be made to Employee shall be reduced, but only to the extent Employee would retain a greater amount on an after-tax basis than he would retain absent such reduction, such that the value of the Total Payments that Employee is entitled to receive shall be $1 less than the maximum amount which Employee may receive without becoming subject to the excise tax or resulting in a disallowance of a deduction of the payment of such amount by the Company under Section 280G.  For purposes of this Section 27, the determination of whichever amount is greater on an after-tax basis shall be (i) based on maximum federal, state and local income and employment tax rates and the tax that would be imposed on Employee pursuant to Section 4999 and (ii) made at Company expense by independent accountants selected by the Company. If the determination made pursuant to this Section 27 results in a reduction of the payments that would otherwise be paid to Employee, such reduction in payments due under this Agreement shall be first applied to reduce any cash severance payments that Employee would otherwise be entitled to receive hereunder and shall thereafter be applied to reduce other payments and benefits in a manner that would not result in subjecting Employee to additional taxation under Section 409A of the Code.

[SIGNATURES ON NEXT PAGE]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
COMPANY:
TEAM HEALTH, INC.

By:  /s/    H. Lynn Massingale, M.D.    
Its:  Executive Chairman

EMPLOYEE:  

/s/   Michael D. Snow    
      MICHAEL D. SNOW

Exhibit “A”

Management Incentive Plan

During each fiscal year of the Company (each a “Performance Period”), Employee shall be entitled to participate in an Annual Management Incentive Plan (the “Bonus Plan”) determined from time to time by the Board or designated Compensation Committee of the Board (“the Committee”), referred hereinafter as the “Administrator” of the Bonus Plan.   

For purposes of the Bonus Plan, commencing with Performance Periods in 2015 and beyond, Employee’s Target Annual Bonus opportunity for each Performance Period will be equal to one hundred percent (100%) of Employee’s Base Salary at the time the performance goals for the relevant Performance Period are set. In respect of the Annual Bonus for 2014, the regular Target Annual Bonus opportunity will be equal to seventy percent (70%) of Employee’s Base Salary as in effect at the time the performance goals for 2014 were initially set.  Employee will be eligible to receive an additional bonus in respect of the period from the Effective Date of this Agreement through December 31, 2014 (reflecting the portion of the year for which Employee served as Chief Executive Officer), with a target amount equal to $270,000, based on such performance goals as the Board or the Committee may establish.  Unless otherwise determined by the Administrator, or except as specifically provided in Section 6.5 (“Severance Compensation”) of this Employment Agreement, Employee shall not be entitled to the payment of any bonuses under the Bonus Plan with respect to a Performance Period in the event of the termination of Employee’s employment with the Company for any reason prior to the last day of the applicable Performance Period.  Bonus payments, if earned, shall be paid to Employee no later than two and one-half (2.5) months following the Performance Period to which such bonus relates, or at such time as similar bonuses are paid to other similarly situated employees of Company.

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