Document:

EXHIBIT
10.16

     

    VPP
SUBSIDIARY GUARANTEE

     

    VPP
SUBSIDIARY GUARANTEE, dated as of July 31, 2009 (this “Guarantee”), made by each
of the signatories hereto (together with any other entity that may become a
party hereto as provided herein, the “Guarantors”), in favor of the purchasers
signatory (together with their permitted assigns, the “Purchasers”) to that
certain VPP Debenture Securities Purchase Agreement, dated as of the date
hereof, between Capital
Growth Systems, Inc., a Florida corporation (the “Company”) and the
Purchasers.

     

    WITNESSETH:

     

    WHEREAS,
pursuant to that certain VPP Debenture Securities Purchase Agreement, dated as
of the date hereof, by and between the Company and the Purchasers (the “Purchase
Agreement”), the Company has agreed to sell and issue to the Purchasers, and the
Purchasers have agreed to purchase from the Company the Company’s VPP Original
Issue Discount Secured Convertible Debentures, due November 30, 2011 (the
“Debentures”), subject to the terms and conditions set forth therein;
and

     

    WHEREAS,
each Guarantor will directly benefit from the extension of credit to the Company
represented by the issuance of the Debentures; and

     

    NOW,
THEREFORE, in consideration of the premises and to induce the Purchasers to
enter into the Purchase Agreement and to carry out the transactions contemplated
thereby, each Guarantor hereby agrees with the Purchasers as
follows:

     

    1.           Definitions.  Unless
otherwise defined herein, terms defined in the Purchase Agreement and used
herein shall have the meanings given to them in the Purchase Agreement. The
words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import
when used in this Guarantee shall refer to this Guarantee as a whole and not to
any particular provision of this Guarantee, and Section and Schedule references
are to this Guarantee unless otherwise specified. The meanings given to terms
defined herein shall be equally applicable to both the singular and plural forms
of such terms.  The following terms shall have the following
meanings:

     

    “Guarantee”
means this VPP Subsidiary Guarantee, as the same may be amended, supplemented or
otherwise modified from time to time.

     

    “Obligations”
means, in addition to all other costs and expenses of collection incurred by
Purchasers in enforcing any of such Obligations and/or this Guarantee, all of
the liabilities and obligations (primary, secondary, direct, contingent, sole,
joint or several) due or to become due, or that are now or may be hereafter
contracted or acquired, or owing to, of the Company or any Guarantor to the
Purchasers, including, without limitation, all obligations under this Guarantee,
the Debentures and any other instruments, agreements or other documents executed
and/or delivered in connection herewith or therewith, in each case, whether now
or hereafter existing, voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with others,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from any of the Purchasers as a
preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to
time.  Without limiting the generality of the foregoing, the term
“Obligations” shall include, without limitation: (i) principal of, and interest
on the Debentures and the loans extended pursuant thereto; (ii) any and all
other fees, indemnities, costs, obligations and liabilities of the Company or
any Guarantor from time to time under or in connection with this Guarantee, the
Debentures and any other instruments, agreements or other documents executed
and/or delivered in connection herewith or therewith; and (iii) all amounts
(including but not limited to post-petition interest) in respect of the
foregoing that would be payable but for the fact that the obligations to pay
such amounts are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Company or any
Guarantor.

     

    
      
         

      

      
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    2.           Guarantee.

     

    (a)           Guarantee.

     

    (i)           The
Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantee to the Purchasers and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations.

     

    (ii)          Anything
herein or in any other Transaction Document to the contrary notwithstanding, the
maximum liability of each Guarantor hereunder and under the other Transaction
Documents shall in no event exceed the amount which can be guaranteed by such
Guarantor under applicable federal and state laws, including laws relating to
the insolvency of debtors, fraudulent conveyance or transfer or laws affecting
the rights of creditors generally (after giving effect to the right of
contribution established in Section
2(b)).

     

    (iii)         Each
Guarantor agrees that the Obligations may at any time and from time to time
exceed the amount of the liability of such Guarantor hereunder without impairing
the guarantee contained in this Section 2 or
affecting the rights and remedies of the Purchasers hereunder.

     

    (iv)         The
guarantee contained in this Section 2 shall
remain in full force and effect until all the Obligations and the obligations of
each Guarantor under the guarantee contained in this Section 2 shall have
been satisfied by indefeasible payment in full.

     

    (v)      
   No payment made by the Company, any of the Guarantors, any
other guarantor or any other Person or received or collected by the Purchasers
from the Company, any of the Guarantors, any other guarantor or any other Person
by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of any Guarantor hereunder which shall, notwithstanding any such
payment (other than any payment made by such Guarantor in respect of the
Obligations or any payment received or collected from such Guarantor in respect
of the Obligations), remain liable for the Obligations up to the maximum
liability of such Guarantor hereunder until the Obligations are indefeasibly
paid in full.

     

    (vi)         Notwithstanding
anything to the contrary in this Guarantee, with respect to any defaulted
non-monetary Obligations the specific performance of which by the Guarantors is
not reasonably possible (e.g. the issuance of the Company's Common Stock), the
Guarantors shall only be liable for making the Purchasers whole on a monetary
basis for the Company's failure to perform such Obligations in accordance with
the Transaction Documents.

     

    (b)           Right of
Contribution.  Subject to Section 2(c), each
Guarantor hereby agrees that to the extent that a Guarantor shall have paid more
than its proportionate share of any payment made hereunder, such Guarantor shall
be entitled to seek and receive contribution from and against any other
Guarantor hereunder which has not paid its proportionate share of such payment.
Each Guarantor's right of contribution shall be subject to the terms and
conditions of Section
2(c). The provisions of this Section 2(b) shall in
no respect limit the obligations and liabilities of any Guarantor to the
Purchasers and each Guarantor shall remain liable to the Purchasers for the full
amount guaranteed by such Guarantor hereunder.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)           No
Subrogation.  Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Purchasers, no Guarantor shall be entitled to be subrogated to any of the rights
of the Purchasers against the Company or any other Guarantor or any collateral
security or guarantee or right of offset held by the Purchasers for the payment
of the Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the Company or any other Guarantor in respect
of payments made by such Guarantor hereunder, until all amounts owing to the
Purchasers by the Company on account of the Obligations are indefeasibly paid in
full. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by such Guarantor in trust for the
Purchasers, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Purchasers in the exact
form received by such Guarantor (duly indorsed by such Guarantor to the
Purchasers, if required), to be applied against the Obligations, whether matured
or unmatured, in such order as the Purchasers may determine.

     

    (d)           Amendments, Etc. With
Respect to the Obligations.  Each Guarantor shall remain
obligated hereunder notwithstanding that, without any reservation of rights
against any Guarantor and without notice to or further assent by any Guarantor,
any demand for payment of any of the Obligations made by the Purchasers may be
rescinded by the Purchasers and any of the Obligations continued, and the
Obligations, or the liability of any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Purchasers, and the Purchase Agreement and the other Transaction Documents
and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Purchasers may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Purchasers for the payment
of the Obligations may be sold, exchanged, waived, surrendered or released. The
Purchasers shall have no obligation to protect, secure, perfect or insure any
Lien at any time held by them as security for the Obligations or for the
guarantee contained in this Section 2 or any
property subject thereto.

     

    (e)           Guarantee Absolute and
Unconditional.  Each Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and notice of
or proof of reliance by the Purchasers upon the guarantee contained in this
Section 2 or
acceptance of the guarantee contained in this Section 2; the
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon the guarantee contained in this Section 2; and all
dealings between the Company and any of the Guarantors, on the one hand, and the
Purchasers, on the other hand, likewise shall be conclusively presumed to have
been had or consummated in reliance upon the guarantee contained in this Section 2. Each
Guarantor waives to the extent permitted by law diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon the Company or
any of the Guarantors with respect to the Obligations. Each Guarantor
understands and agrees that the guarantee contained in this Section 2 shall be
construed as a continuing, absolute and unconditional guarantee of payment and
performance without regard to (a) the validity or enforceability of the Purchase
Agreement or any other Transaction Document, any of the Obligations or any other
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Purchasers, (b) any
defense, set-off or counterclaim (other than a defense of payment or performance
or fraud by Purchasers) which may at any time be available to or be asserted by
the Company or any other Person against the Purchasers, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Company
or such Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Company for the Obligations, or of such
Guarantor under the guarantee contained in this Section 2, in
bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, the
Purchasers may, but shall be under no obligation to, make a similar demand on or
otherwise pursue such rights and remedies as they may have against the Company,
any other Guarantor or any other Person or against any collateral security or
guarantee for the Obligations or any right of offset with respect thereto, and
any failure by the Purchasers to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Company, any other
Guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Company, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Purchasers against any Guarantor. For the purposes hereof, “demand” shall
include the commencement and continuance of any legal proceedings.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (f)           Reinstatement.  The
guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Obligations is rescinded or must
otherwise be restored or returned by the Purchasers upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Company or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.

     

    (g)           Payments.  Each
Guarantor hereby guarantees that payments hereunder will be paid to the
Purchasers without set-off or counterclaim in U.S. dollars at the address set
forth or referred to in the Signature Pages to the Purchase
Agreement.

     

    3.           Representations and
Warranties.  Each Guarantor hereby makes the following
representations and warranties to Purchasers as of the date hereof:

     

    (a)           Organization and
Qualification.  The Guarantor is a corporation or limited liability company, duly incorporated
or organized, validly existing and in good standing under the laws of the
applicable jurisdiction set forth on Schedule 1, with the
requisite corporate power and authority to own and use its properties and assets
and to carry on its business as currently conducted. The Guarantor has no
subsidiaries other than those identified as such on the Disclosure Schedules to
the Purchase Agreement. The Guarantor is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which the nature
of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not, individually or in the aggregate, (x) adversely
affect the legality, validity or enforceability of any of this Guaranty in any
material respect, (y) have a material adverse effect on the results of
operations, assets, prospects, or financial condition of the Guarantor or (z)
adversely impair in any material respect the Guarantor's ability to perform
fully on a timely basis its obligations under this Guaranty (a “Material Adverse
Effect”).

     

    (b)           Authorization;
Enforcement.  The Guarantor has the requisite corporate or
limited liability company power and authority to enter into and to consummate
the transactions contemplated by this Guaranty, and otherwise to carry out its
obligations hereunder. The execution and delivery of this Guaranty by the
Guarantor and the consummation by it of the transactions contemplated hereby
have been duly authorized by all requisite corporate or limited liability
company action on the part of the Guarantor. This Guaranty has been duly
executed and delivered by the Guarantor and constitutes the valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, creditors' rights and
remedies or by other equitable principles of general application.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)           No
Conflicts.  The execution, delivery and performance of this
Guaranty by the Guarantor and the consummation by the Guarantor of the
transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of its Certificate of Incorporation, By-laws or other
organizational documents or (ii) conflict with, constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Guarantor
is a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Guarantor is subject (including Federal and State
securities laws and regulations), or by which any material property or asset of
the Guarantor is bound or affected, except in the case of each of clauses (ii)
and (iii), such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as could not, individually or in the aggregate,
have or result in a Material Adverse Effect. The business of the Guarantor is
not being conducted in violation of any law, ordinance or regulation of any
governmental authority, except for violations which, individually or in the
aggregate, do not have a Material Adverse Effect.

     

    (d)           Consents and
Approvals.  The Guarantor is not required to obtain any
consent, waiver, authorization or order of, or make any filing or registration
with, any court or other federal, state, local, foreign or other governmental
authority or other person in connection with the execution, delivery and
performance by the Guarantor of this Guaranty.

     

    (e)           Purchase
Agreement.  The representations and warranties of the Company
set forth in the Purchase Agreement as they relate to such Guarantor, each of
which is hereby incorporated herein by reference, are true and correct as of
each time such representations are deemed to be made pursuant to such Purchase
Agreement, and the Purchasers shall be entitled to rely on each of them as if
they were fully set forth herein, provided that each reference in each such
representation and warranty to the Company's knowledge shall, for the purposes
of this Section
3, be deemed to be a reference to such Guarantor's
knowledge.

     

    (f)           Foreign
Law.  Each Guarantor has consulted with appropriate foreign
legal counsel with respect to any of the above representations for which
non-U.S. law is applicable. Such foreign counsel have advised each applicable
Guarantor that such counsel knows of no reason why any of the above
representations would not be true and accurate. Such foreign counsel were
provided with copies of this VPP Subsidiary Guarantee and the Transaction
Documents prior to rendering their advice.

     

    4.           Covenants.

     

    (a)           Each
Guarantor covenants and agrees with the Purchasers that, from and after the date
of this Guarantee until the Obligations shall have been indefeasibly paid in
full, such Guarantor shall take, and/or shall refrain from taking, as the case
may be, each commercially reasonable action that is necessary to be taken or not
taken, as the case may be, so that no Event of Default (as defined in the
Debentures) is caused by the failure to take such action or to refrain from
taking such action by such Guarantor.

     

    (b)           So
long as any of the Obligations are outstanding, unless Purchasers holding at
least 67% of the aggregate principal amount of the then outstanding Debentures
shall otherwise consent in writing, each Guarantor will not directly or
indirectly on or after the date of this Guarantee:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (i)           other
than Permitted Indebtedness, enter into, create, incur, assume or suffer to
exist any indebtedness for borrowed money of any kind, including but not limited
to, a guarantee, on or with respect to any of its property or assets now owned
or hereafter acquired or any interest therein or any income or profits
therefrom;

     

    (ii)          other
than Permitted Liens, enter into, create, incur, assume or suffer to exist any
liens of any kind, on or with respect to any of its property or assets now owned
or hereafter acquired or any interest therein or any income or profits
therefrom;

     

    (iii)         amend
its certificate of incorporation, bylaws or other charter documents so as to
adversely affect any rights of any Purchaser;

     

    (iv)         repay,
repurchase or offer to repay, repurchase or otherwise acquire more than a de
minimis number of shares of its securities or debt obligations;

     

    (v)          pay
cash dividends on any equity securities of the Company, provided that nothing contained herein shall prohibit
the payment of intracompany dividends in the ordinary course of business
consistent with past practice to any parent owning 100% of the equity securities
of the Guarantor;

     

    (vi)         enter
into any transaction with any Affiliate of the Guarantor which would be required
to be disclosed in any public filing of the Company with the Commission, unless
such transaction is made on an arm’s-length basis and expressly approved by a
majority of the disinterested directors of the Company (even if less than a
quorum otherwise required for board approval); or

     

    (vii)        enter
into any agreement with respect to any of the foregoing.

     

    5.           Miscellaneous.

     

    (a)           Amendments in
Writing.  None of the terms or provisions of this Guarantee may
be waived, amended, supplemented or otherwise modified except in writing by the
Purchasers holding 67% or more in principal amount of the Debentures then
outstanding.

     

    (b)           Notices.  All
notices, requests and demands to or upon the Purchasers or any Guarantor
hereunder shall be effected in the manner provided for in the Purchase
Agreement, provided that any such notice, request or demand to or upon any
Guarantor shall be addressed to such Guarantor at its notice address set forth
on Schedule
5(b).

     

    (c)           No Waiver By Course Of
Conduct; Cumulative Remedies.  The Purchasers shall not by any
act (except by a written instrument pursuant to Section 5(a)), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any default under the Transaction Documents
or Event of Default. No failure to exercise, nor any delay in exercising, on the
part of the Purchasers, any right, power or privilege hereunder shall operate as
a waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Purchasers of any right
or remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Purchasers would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (d)          Enforcement Expenses;
Indemnification.

     

    (i)           Each
Guarantor agrees to pay, or reimburse the Purchasers for, all its costs and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section
2 or otherwise enforcing or preserving any rights under this Guarantee
and the other Transaction Documents to which such Guarantor is a party,
including, without limitation, the reasonable fees and disbursements of counsel
to the Purchasers.

     

    (ii)          Each
Guarantor agrees to pay, and to save the Purchasers harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be
payable in connection with any of the transactions contemplated by this
Guarantee.

     

    (iii)         Each
Guarantor agrees to pay, and to save the Purchasers harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Guarantee to the extent the Company would be required to do so pursuant to the
Purchase Agreement.

     

    (iv)         The
agreements in this Section shall survive repayment of the Obligations and all
other amounts payable under the Purchase Agreement and the other Transaction
Documents.

     

    (e)           Successor and
Assigns.  This Guarantee shall be binding upon the successors
and assigns of each Guarantor and shall inure to the benefit of the Purchasers
and their respective successors and assigns; provided that no Guarantor may
assign, transfer or delegate any of its rights or obligations under this
Guarantee without the prior written consent of the Purchasers.

     

    (f)           Set-Off.  Each
Guarantor hereby irrevocably authorizes the Purchasers at any time and from time
to time while an Event of Default under any of the Transaction Documents shall
have occurred and be continuing, without notice to such Guarantor or any other
Guarantor, any such notice being expressly waived by each Guarantor, to set-off
and appropriate and apply any and all deposits, credits, indebtedness or claims,
in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the Purchasers to
or for the credit or the account of such Guarantor, or any part thereof in such
amounts as the Purchasers may elect, against and on account of the obligations
and liabilities of such Guarantor to the Purchasers hereunder and claims of
every nature and description of the Purchasers against such Guarantor, in any
currency, whether arising hereunder, under the Purchase Agreement, any other
Transaction Document or otherwise, as the Purchasers may elect, whether or not
the Purchasers have made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The Purchasers shall
notify such Guarantor promptly of any such set-off and the application made by
the Purchasers of the proceeds thereof, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of the Purchasers under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Purchasers may have.

     

    (g)           Counterparts.  This
Guarantee may be executed by one or more of the parties to this Guarantee on any
number of separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (h)           Severability.  Any
provision of this Guarantee which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

     

    (i)           Section
Headings.  The Section headings used in this Guarantee are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

     

    (j)           Integration.  This
Guarantee and the other Transaction Documents represent the agreement of the
Guarantors and the Purchasers with respect to the subject matter hereof and
thereof, and there are no promises, undertakings, representations or warranties
by the Purchasers relative to subject matter hereof and thereof not expressly
set forth or referred to herein or in the other Transaction
Documents.

     

    (k)           Governing
Laws.  All questions concerning the construction, validity,
enforcement and interpretation of this Guarantee shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law
thereof.  Each of the Company and the Guarantors agree that all
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Guarantee (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the City of New York, Borough of Manhattan.
Each of the Company and the Guarantors hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the City of
New York, Borough of Manhattan for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such proceeding is improper. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such proceeding 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 Guarantee 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 manner permitted by law.  Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or
relating to this Guarantee or the transactions contemplated hereby.

     

    (l)           Acknowledgements.  Each
Guarantor hereby acknowledges that:

     

    (i)           it
has been advised by counsel in the negotiation, execution and delivery of this
Guarantee and the other Transaction Documents to which it is a
party;

     

    (ii)          the
Purchasers have no fiduciary relationship with or duty to any Guarantor arising
out of or in connection with this Guarantee or any of the other Transaction
Documents, and the relationship between the Guarantors, on the one hand, and the
Purchasers, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and

     

    (iii)         no
joint venture is created hereby or by the other Transaction Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Guarantors and the Purchasers.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (m)          Additional
Guarantors.  The Company shall cause each of its subsidiaries
formed or acquired on or subsequent to the date hereof to become a Guarantor for
all purposes of this Guarantee by executing and delivering an Assumption
Agreement in the form of Annex 1
hereto.

     

    (n)           Release of
Guarantors.  Each Guarantor will be released from all liability
hereunder concurrently with the indefeasible repayment in full of all amounts
owed under the Purchase Agreement, the Debentures and the other Transaction
Documents.

     

    (o)           Seniority.  Except
as set forth in Schedule 3.1(ff) of the Purchase Agreement, the Obligations of
each of the Guarantors hereunder rank senior in priority to any other
Indebtedness (as defined in the Purchase Agreement) of such
Guarantor.

     

    (p)           Waiver of Jury
Trial.  EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS
HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY
COUNTERCLAIM THEREIN.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly
executed and delivered as of the date first above written.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            	
                                                                                    20/20 Technologies, Inc.

                                                                                  	 
      	
                                                                                    Magenta netLogic,
Limited

                                                                                  
	 
      	 
      	 
      
	
                                                                                    By:

                                                                                  	
                                                                                    /s/
      Patrick Shutt

                                                                                  	 
      	
                                                                                    By:

                                                                                  	
                                                                                    /s/
      Patrick Shutt

                                                                                  
	
                                                                                    Name:

                                                                                  	
                                                                                    Patrick
      Shutt

                                                                                  	 
      	
                                                                                    Name:

                                                                                  	
                                                                                    Patrick
      Shutt

                                                                                  
	
                                                                                    Title:

                                                                                  	
                                                                                    CEO

                                                                                  	 
      	
                                                                                    Title:

                                                                                  	
                                                                                    CEO

                                                                                  
	 
      	 
      	 
      	 
      	 
      
	
                                                                                    Global Capacity Group, Inc.

                                                                                  	 
      	
                                                                                    CentrePath, Inc.

                                                                                  
	 
      	 
      	 
      	 
      	 
      
	
                                                                                    By:

                                                                                  	
                                                                                    /s/
      Patrick Shutt

                                                                                  	 
      	
                                                                                    By:

                                                                                  	
                                                                                    /s/
      Patrick Shutt

                                                                                  
	
                                                                                    Name:

                                                                                  	
                                                                                    Patrick
      Shutt

                                                                                  	 
      	
                                                                                    Name:

                                                                                  	
                                                                                    Patrick
      Shutt

                                                                                  
	
                                                                                    Title:

                                                                                  	
                                                                                    CEO

                                                                                  	 
      	
                                                                                    Title:

                                                                                  	
                                                                                    CEO

                                                                                  
	 
      	 
      	 
      	 
      	 
      
	
                                                                                    Nexvu Technologies, LLC

                                                                                  	 
      	
                                                                                    FNS
      2007, INC.

                                                                                  
	 
      	 
      	 
      	 
      	 
      
	
                                                                                    By:

                                                                                  	
                                                                                    /s/
      Patrick Shutt

                                                                                  	 
      	
                                                                                    By:

                                                                                  	
                                                                                    /s/
      Patrick Shutt

                                                                                  
	
                                                                                    Name:

                                                                                  	
                                                                                    Patrick
      Shutt

                                                                                  	 
      	
                                                                                    Name:

                                                                                  	
                                                                                    Patrick
      Shutt

                                                                                  
	
                                                                                    Title:

                                                                                  	
                                                                                    CEO

                                                                                  	 
      	
                                                                                    Title:

                                                                                  	
                                                                                    CEO

                                                                                  
	 
      	 
      	 
      	 
      	 
      
	
                                                                                    20/20
      TECHNOLOGIES I, LLC

                                                                                  	 
      	 
      
	 
      	 
      	 
      
	
                                                                                    By:

                                                                                  	
                                                                                    /s/ Patrick Shutt

                                                                                  	 
      	 
      
	
                                                                                    Name:

                                                                                  	
                                                                                    Patrick
      Shutt

                                                                                  	 
      	 
      
	
                                                                                    Title:

                                                                                  	
                                                                                    CEO

                                                                                  	 
      	 
      

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      
        
          	
                  GLOBAL
      CAPACITY DIRECT, LLC

                
	 
      
	
                  By:

                	
                  /s/ Patrick Shutt

                
	 
      	
                  Name:  Patrick
      Shutt

                  Title:  CEO

                

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    GUARANTORS

     

    The
following are the names, notice addresses and jurisdiction of organization of
each Guarantor.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  	
                                                          Guarantor Name/Notice
    Address

                                                        	 	
                                                          Jurisdiction
      of

                                                          Organization

                                                        	 	
                                                          Company

                                                          Owned
      by

                                                          Percentage

                                                        	 
	 
      	 	 
      	 	 	 
	
                                                          20/20 Technologies, Inc.

                                                          200 S. Wacker, Suite 1650

                                                          Chicago, Illinois 60606

                                                        	 	
                                                          Delaware

                                                        	 	 	100	%
	 	 	 	 	 	 	 
	
                                                          20/20 Technologies I, LLC

                                                          200 S. Wacker, Suite 1650

                                                          Chicago, Illinois 60606

                                                        	 	
                                                          Delaware

                                                        	 	 	100	%(1)
	 	 	 	 	 	 	 
	
                                                          Magenta netLogic, Limited

                                                          Lissadel Street

                                                          Salford

                                                          Greater Manchester, UK M6
    6AP

                                                        	 	
                                                          UK

                                                        	 	 	100	%(2)
	 	 	 	 	 	 	 
	
                                                          Global Capacity Group, Inc.

                                                          730 N. Post Oak Road

                                                          Houston, Texas 77024

                                                        	 	
                                                          Texas

                                                        	 	 	100	%
	 	 	 	 	 	 	 
	
                                                          CentrePath, Inc.

                                                          265 Winter Street

                                                          Waltham,
    Mass.  02451

                                                        	 	
                                                          Delaware

                                                        	 	 	100	%
	
                                                          FNS 2000, Inc.

                                                          200
      S. Wacker, Suite 1650

                                                          Chicago,
      Illinois 60606

                                                        	 	
                                                          Delaware

                                                        	 	 	100	%
	
                                                          Nexvu Technologies, LLC

                                                          200 S. Wacker, Suite 1650

                                                          Chicago, Illinois 60606

                                                        	 	
                                                          Delaware

                                                        	 	 	100	%
	 	 	 	 	 	 	 
	
                                                          Global Capacity Direct, LLC

                                                          200 S. Wacker, Suite 1650

                                                          Chicago, Illinois 60606

                                                        	 	
                                                          Delaware

                                                        	 	 	100	%
	 	 	 	 	 	 	 
	
                                                            (1) Owned 100% by 20/20 Technologies,
      Inc.

                                                            (2) Owned 100% by 20/20 Technologies
      I, LLC

                                                        	 	
                                                          __________

                                                        	 	
                                                          __________Exhibit
10.1

    

    COLFAX
CORPORATION

    

    ANNUAL
INCENTIVE PLAN

    

    Subject
to approval of the Plan by shareholders, Colfax Corporation, a Delaware
corporation (the “Company”) hereby adopts the terms of its Annual Incentive Plan
(the “Plan”), as follows:

    

    1.           PURPOSE

    

    The Plan
is intended to enhance the Company’s and its Affiliates’ (as defined herein)
ability to attract and retain highly qualified officers and key employees, and
to motivate such persons to serve the Company and its Affiliates. Remuneration
payable under the Plan is intended to constitute “qualified performance-based
compensation” for purposes of Section 162(m) of the Internal Revenue Code of
1986, as amended and Section 1.162-27 of the Treasury Regulations thereunder and
the Plan shall be construed consistently with this purpose.

    

    2.           DEFINITIONS

    

    For
purposes of interpreting the Plan and related documents the following
definitions shall apply:

    

    2.1           “
Affiliate ” means, with
respect to the Company, any company or other trade or business that is
controlled by the Company within the meaning of Rule 405 of Regulation C under
the Securities Act, including, without limitation, any Subsidiary.

    

    2.2           “
Annual Incentive Award ”
means a bonus payable subject to attainment of performance goals over a
Performance Period of up to one year (the Company’s fiscal year, unless
otherwise specified by the Committee).

    

    2.3           “
Board ” means the Board
of Directors of the Company.

    

    2.4           “
Cause ” means, as
determined by the Board and unless otherwise provided in an applicable agreement
with the Company: (i) gross negligence or willful misconduct in connection with
the performance of duties; (ii) conviction of a criminal offense (other than
minor traffic offenses); or (iii) material breach of any term of any employment,
consulting or other services, confidentiality, intellectual property or
non-competition agreements, if any, between the Participant and the Company or
any Affiliate of the Company.

    

    2.5           “
Code ” means the
Internal Revenue Code of 1986, as now in effect or as hereafter
amended.

    

    2.6           “
Committee ” means the
Compensation Committee of the Board, which shall be comprised of not less than
three directors of Colfax, each of whom shall qualify in all respects as an
“outside director” for purpose of Code Section 162(m) and Section 1.162-27(e)(3)
of the Regulations.

    

    2.7           “
Company ” means Colfax
Corporation.

    

    2.8           “
Participant ” means,
with respect to a Performance Period, each eligible office or key employee
designated by the Committee to receive an annual bonus payment contingent of
achievement of specified performance goals.

    

    2.9           “
Performance Measure s”
means measures as described in Section 5.1.4 on which the performance goals are
based and which are approved by the Company’s shareholders pursuant to this Plan
in order to qualify Annual Incentive Awards as performance-based compensation
under Section 162(m).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.10           “
Performance Period ”
means the period of time during which the performance goals must be met in order
to determine the degree of payout and/or vesting with respect to an Annual
Incentive Award.

    

    2.11           “
Plan ” means this Colfax
Corporation Annual Incentive Plan.

    

    2.12           “
Stock ” means the common
stock, per value $0.001 per share of the Company; provided, however, that to the
extent an annual bonus payment made pursuant to this Plan is paid in Stock, the
number of shares of Stock so delivered shall be drawn solely from Stock
available for awards under the Colfax Corporation 2008 Omnibus Incentive
Plan.

    

    2.13           “
Subsidiary ” means any
subsidiary corporation of the Company within the meaning of Section 424(f) of
the Code.

    

    3.           ADMINISTRATION
OF THE PLAN

    

    3.1.           Committee.

    

    The Plan
shall be administered by the Committee.  The Committee shall have the
authority to establish and administer the performance goal and to certify the
attainment of the performance goals as described in Section 5.2
below.  The Committee shall have the full power and authority to
construe, interpret and administer the Plan and shall have the exclusive right
to make awards under the Plan and to exercise negative discretion pursuant to
Section 5.1.3 below.  The Committee may take action at a meeting or by
written consent in accordance with the Company’s bylaws.  The
performance goals may be ratified by the Board.

    

    In
administering the Plan, the Committee may at its option employ compensation
consultants, accountants and counsel and other persons to assist or render
advice to the Committee, all at the expense of the Company.  Any
determinations made by the Committee in connection with the Plan shall be final
and binding on the Company, its Affiliates, Subsidiaries and their respective
stockholders and each Participant in the Plan.

    

    3.2.           Deferral
Arrangement.

    

    The Board
may permit or require the deferral of any award payment into a deferred
compensation arrangement, subject to such rules and procedures as it may
establish, which may include provisions for the payment or crediting of interest
or earnings.  Any such deferrals shall be made in a manner that
complies with Code Section 409A.

    

    4.           ELIGIBILITY

    

    Eligibility
under this Plan is limited to eligible executives designated by the Committee,
in its discretion.  Upon such designation for a Performance Period,
the executive shall become a “Participant” under the Plan.

    

    5.           ANNUAL
INCENTIVE AWARDS

    

    5.1.           Granting
Annual Incentive Awards.

    

    The
Committee may grant an Annual Incentive Award to each Participant.  In
doing so, the Committee shall establish the performance goals applicable to
determination of each such Participant’s Annual Incentive Award.  The
maximum Annual Incentive Award payable to a Participant under this Plan for a
fiscal year shall be $3,000,000.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    5.1.1.             Performance
Goals Generally.

    

    The
performance goals for Annual Incentive Awards shall consist of one or more
business criteria and a targeted level or levels of performance with respect to
each of such criteria, as specified by the Committee consistent with this
Section 5.1.  Performance goals shall be objective and shall otherwise
meet the requirements of Code Section 162(m) and regulations thereunder
including the requirement that the level or levels of performance targeted by
the Committee result in the achievement of performance goals being
“substantially uncertain.”  The Committee may determine that such
Awards shall be granted and/or settled upon achievement of any one performance
goal or that two or more of the performance goals must be achieved as a
condition to grant and/or settlement of such Annual Incentive
Awards.  Performance goals may differ for Annual Incentive Awards
granted to any one Participant or to different Participants.

    

    5.1.2.             Timing
For Establishing Performance Goals.

    

    Performance
goals shall be established not later than 90 days after the beginning of any
Performance Period applicable to the Annual Incentive Awards, or at such other
date as may be required or permitted for “performance-based compensation” under
Code Section 162(m).

    

    5.1.3.             Settlement
of Awards; Other Terms.

    

    Settlement
of Annual Incentive Awards shall be in cash, Stock or other property, in the
discretion of the Committee.  The Committee may, in its discretion,
reduce the amount of a settlement otherwise to be made in connection with an
Annual Incentive Award.  The Committee shall specify the circumstances
in which Annual Incentive Awards shall be paid or forfeited in the event of
termination of service by the Participant prior to the end of a Performance
Period or settlement of awards.

    

    5.1.4.             Performance
Measures.

    

    The
performance goals established by the Committee shall be based on one or more of
the following Performance Measures:

    

    
      	
               
      

            	
              (a)

            	
              net earnings or net
      income;

            

    

    

    
      	
               
      

            	
              (b)

            	
              operating
      earnings;

            

    

    

    
      	
               
      

            	
              (c)

            	
              pretax
      earnings;

            

    

    

    
      	
               
      

            	
              (d)

            	
              earnings per
      share;

            

    

    

    
      	
               
      

            	
              (e)

            	
              share price, including growth
      measures and total stockholder
return;

            

    

    

    
      	
               
      

            	
              (f)

            	
              earnings before interest and
      taxes;

            

    

    

    
      	
               
      

            	
              (g)

            	
              earnings before interest, taxes,
      depreciation and/or
amortization;

            

    

    

    
      	
               
      

            	
              (h)

            	
              sales or revenue growth, whether
      in general, by type of product or service, or by type of
      customer;

            

    

    

    
      	
               
      

            	
              (i)

            	
              gross or operating
      margins;

            

    

    

    
      	
               
      

            	
              (j)

            	
              return measures, including return
      on assets, capital, investment, equity, sales or
      revenue;

            

    

    

    
      	
               
      

            	
              (k)

            	
              cash flow, including operating
      cash flow, free cash flow, cash flow return on equity and cash flow return
      on investment;

            

    

    

    
      	
               
      

            	
              (l)

            	
              productivity
      ratios;

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (m)

            	
              expense
      targets;

            

    

    

    
      	
               
      

            	
              (n)

            	
              market
    share;

            

    

    

    
      	
               
      

            	
              (o)

            	
              financial ratios as provided in
      credit agreements of the Company and its
    subsidiaries;

            

    

    

    
      	
               
      

            	
              (p)

            	
              working capital
      targets;

            

    

    

    
      	
               
      

            	
              (q)

            	
              completion of acquisitions of
      business or companies;

            

    

    

    
      	
               
      

            	
              (r)

            	
              completion of divestitures and
      asset sales; and

            

    

    

    
      	
               
      

            	
              (s)

            	
              any combination of any of the
      foregoing business criteria.

            

    

    

    Any
Performance Measure(s) may be used to measure the performance of the Company,
Subsidiary, and/or Affiliate as a whole or any business unit of the Company,
Subsidiary, and/or Affiliate or any combination thereof, as the Committee may
deem appropriate, or any of the above Performance Measures as compared to the
performance of a group of comparator companies, or published or special index
that the Committee, in its sole discretion, deems appropriate, or the Company
may select Performance Measure (e) above as compared to various stock market
indices.

    

    5.1.5.             Evaluation
of Performance.

    

    The
Committee may provide with respect to Annual Incentive Awards that any
evaluation of performance may include or exclude any of the following events
that occur during a Performance Period: (a) asset write-downs; (b) litigation or
claim judgments or settlements; (c) the effect of changes in tax laws,
accounting principles, or other laws or provisions affecting reported results;
(d) any reorganization and restructuring programs; (e) extraordinary
nonrecurring items as described in Accounting Principles Board Opinion No. 30
and/or in management’s discussion and analysis of financial condition and
results of operations appearing in the Company’s annual report to shareholders
for the applicable year; (f) acquisitions or divestitures; and (g) foreign
exchange gains and losses.

    

    5.1.6.             Adjustment
of Performance-Based Compensation.

    

    The
Committee shall retain the discretion to adjust any Awards downward, either on a
formula or discretionary basis, or any combination as the Committee
determines.  Annual Incentive Awards may not be adjusted upward from
the level of performance achieved.

    

    5.1.7.
              Board
Discretion.

    

    In the
event that applicable tax and/or securities laws change to permit Board
discretion to alter the governing Performance Measures without obtaining
shareholder approval of such changes, the Board shall have sole discretion to
make such changes without obtaining shareholder approval provided the exercise
of such discretion does not violate Code Section 409A. In addition, in the event
that the Committee determines that it is advisable to grant Awards that shall
not qualify as performance-based compensation under Section 162(m), the
Committee may make such grants without satisfying the requirements of Code
Section 162(m) and grant and/or settlement on Performance Measures other than
those set forth in Section 5.1.4.

    

    5.2.           Determination
of Annual Incentive Award.

    

    Payment
of a Participant’s Annual Incentive Award, if any, is subject to certification
by the Committee that the performance goals have been satisfied to a particular
extent and any other material terms and conditions for the earning and payment
of the Annual Incentive Award have been satisfied.  The amount of
payment shall be further subject to the Committee’s right, in its sole
discretion, to reduce the Annual Incentive Award amount as so
determined.  The Committee’s determination is final and binding and
the Participant shall have no right to receive the amount by which the Annual
Incentive Award potential was reduced from the amount designated as payable upon
achievement of the performance goals at a particular level.  In no
event shall an Annual Incentive Award be paid to a Participant unless and until
the Plan has been approved by the Company’s stockholders in the manner and to
the extent required by Section 162(m).

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    6.           GENERAL
PROVISIONS

    

    6.1.           Disclaimer
of Rights.

    

    No
provision in the Plan or in any Annual Incentive Award shall be construed to
confer upon any individual the right to remain in the employ or service of the
Company or any Affiliate, or to interfere in any way with any contractual or
other right or authority of the Company either to increase or decrease the
compensation or other payments to any individual at any time, or to terminate
any employment or other relationship between any individual and the
Company.  The obligation of the Company to pay any benefits pursuant
to this Plan shall be interpreted as a contractual obligation to pay only those
amounts described herein, in the manner and under the conditions prescribed
herein.  The Plan shall in no way be interpreted to require the
Company to transfer any amounts to a third party trustee or otherwise hold any
amounts in trust or escrow for payment to any Participant under the terms of the
Plan.

    

    6.2.           Nonexclusivity
of the Plan.

    

    Neither
the adoption of the Plan nor the submission of the Plan to the stockholders of
the Company for approval shall be construed as creating any limitations upon the
right and authority of the Board to adopt such other incentive compensation
arrangements (which arrangements may be applicable either generally to a class
or classes of individuals or specifically to a particular individual or
particular individuals) as the Board in its discretion determines
desirable.

    

    6.3.           Withholding
Taxes.

    

    The
Company or an Affiliate, as the case may be, shall have the right to deduct from
payments of any kind otherwise due to a Participant any federal, state, or local
taxes of any kind required by law to be withheld with respect to the vesting of
or other lapse of restrictions applicable to an Award or upon the issuance of
any shares of Stock, if any, pursuant to an award.

    

    6.4.           Captions.

    

    The use
of captions in this Plan or any Award Agreement is for the convenience of
reference only and shall not affect the meaning of any provision of the Plan or
such Award Agreement.

    

    6.5.           Other
Provisions.

    

    Each
Award granted under the Plan may contain such other terms and conditions not
inconsistent with the Plan as may be determined by the Board, in its sole
discretion.

    

    6.6.           Number
and Gender.

    

    With
respect to words used in this Plan, the singular form shall include the plural
form, the masculine gender shall include the feminine gender, etc., as the
context requires.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    6.7.           Severability.

    

    If any
provision of the Plan or any Award Agreement shall be determined to be illegal
or unenforceable by any court of law in any jurisdiction, the remaining
provisions hereof and thereof shall be severable and enforceable in accordance
with their terms, and all provisions shall remain enforceable in any other
jurisdiction.

    

    6.8.           Governing
Law.

    

    The
validity and construction of this Plan and the instruments evidencing the Awards
hereunder shall be governed by the laws of the State of Delaware, other than any
conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Plan and the instruments evidencing the
Awards granted hereunder to the substantive laws of any other
jurisdiction.

    

    6.9.           Section
409A of the Code.

    

    The Board
intends to comply with Section 409A of the Code (“Section 409A”), or an
exemption to Section 409A, with regard to awards hereunder that constitute or
otherwise would constitute nonqualified deferred compensation within the meaning
of Section 409A.  To the extent that the Board determines that a
Participant would be subject to the additional 20% tax imposed on certain
nonqualified deferred compensation plans pursuant to Section 409A as a result of
any provision of any Award granted under this Plan, such provision shall be
deemed amended to the minimum extent necessary to avoid application of such
additional tax.  The nature of any such amendment shall be determined
by the Board.

    

    6.10           Amendment
and Termination.

    

    The Board
shall have the right to amend, modify, suspend or terminate the Plan from time
to time, but no such amendment, modification, suspension or termination shall,
without prior approval of the Company’s stockholders, alter the business
criteria on which the performance goals are based, increase the dollar maximum
for an annual bonus under Section 5.1 or materially modify the requirements
regarding eligibility for participation in the Plan, nor shall any such
amendment, modification or termination impair, without the consent of the
Participant affected, any Annual Incentive Award payment that has been certified
and approved by the Committee prior to the effective date of the amendment,
modification, suspension or termination.

    
      
         

      

      
        6

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