Document:

EX-10.1

EXHIBIT 10.1

ASSIGNMENT AGREEMENT

     This ASSIGNMENT AGREEMENT (this “Agreement”), dated as of January 31st, 2009, is by
and between Care Investment Trust Inc., a Maryland corporation (the “Seller”) and CIT Healthcare
LLC, a Delaware Limited Liability Company (the “Buyer”). Capitalized terms used, but not otherwise
defined herein, shall have the meanings ascribed to such terms in the Mortgage Purchase Agreement
entered into by and between Seller and Buyer on September 30, 2008 (the “Mortgage Purchase
Agreement”).

W I T N E S S E T H:

     WHEREAS, Seller desires to assign, convey and transfer all of its right, title and interest to
the assets set forth on Schedule 1 hereto (collectively, the “Assets”) to Buyer in exchange
for a cash payment of $22,541,978.41, which constitutes the Sale Price as finally determined
pursuant to the Mortgage Purchase Agreement;

     NOW, THEREFORE, in consideration for the foregoing and other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto (each a “Party” and collectively
the “Parties”) agree as follows:

     Section 1. Transfer of the Assets. On the terms and subject to the conditions of this
Agreement and in consideration of the receipt by Seller of the Sale Price for such Assets from
Buyer, Seller hereby transfers, assigns, conveys and delivers to Buyer all right, title and
interest in and to the Assets as of the date hereof (the “Closing Date”).

     Section 2. Payment for the Assets. On the terms and subject to the conditions of this
Agreement and in consideration for the transfer of the Assets, Buyer has paid the Sale Price to
Seller and/or its designee by wire transfer in immediately available funds in accordance with the
instructions set forth on Schedule 2 hereto.

     Section 3. Closing Allocations.

          (a) Payments Belonging to Seller. Seller is entitled to (i) all payments of principal
on the Assets, as well as any prepayment penalty or premium associated therewith, that are due on
or before the Closing Date and that are collected on or before the Closing Date, (ii) all payments
of principal on the Assets, as well as any prepayment penalty or premium associated therewith, that
are due on or before the Closing Date and that are collected after that date, and (iii) all
payments of interest that represent interest accruing on the Assets through and including the day
prior to the Closing Date. If and to the extent any such payments are received by Buyer, Buyer will
remit such payments to Seller promptly upon receipt thereof. Notwithstanding its status as owner of
the Assets after the Closing, Buyer will not waive or forgive (or otherwise forbear from the
enforcement and collection of) such payments that inure to the benefit of Seller as provided
herein.

 

 

          (b) Payments Belonging to Buyer. Buyer is entitled to (i) all payments of principal on
the Assets, as well as any prepayment penalty or premium associated therewith, that are due after
the Closing Date and are collected by Seller on or prior to the Closing Date, (ii) all payments of
principal on the Assets, as well as any prepayment penalty or premium associated therewith, that
are due after the Closing Date and are collected after the Closing Date, and (iii) all payments of
interest that represent interest accruing on the Assets on and after the Closing Date and that are
collected after the Closing Date. If and to the extent any such payments are received by Seller,
Seller will remit such payments to Buyer promptly upon receipt thereof.

          (c) Unfunded Commitment. In the event that CLC RE, LLC (the “Borrower”)
requests a term loan after the Closing Date in accordance with Section 4.2(a)(ii) of the Financing
Agreement described on Schedule 1 (the “Financing Agreement”), Buyer shall determine
whether to fund such term loan in its sole discretion. Within three (3) Business Days of any date
on which Buyer notifies Seller in writing that Buyer has made a term loan available to the Borrower
pursuant to Section 4.2(a)(ii) of the Financing Agreement, Seller shall pay to Buyer by wire
transfer in immediately available funds to the account designated by Buyer an amount equal to the
product of (i) 0.165 and (ii) the principal amount of such term loan funded by Buyer (less the
applicable Earn Out Fee as defined in the Financing Agreement).

     Section 4. Deliveries at Closing.

          (a) Seller has delivered to Buyer as of the date hereof or, with respect to the Transfer
Instruments (as defined below) and the books and records described in clause (3) below, will
deliver to Buyer promptly after the date hereof:

               (1) with respect to each of the Assets identified on Schedule 1 hereto, such endorsements,
assignment and assumption agreements and other instruments of transfer, all in the form
satisfactory to Buyer, as may be required to vest good title in and to the Assets in Buyer
(“Transfer Instruments”), executed by Seller and each other required party other than Buyer;

               (2) copies of any approvals or consents required under the underlying loan documents more
particularly described on Schedule 1 hereto in order to consummate the transfers herein
contemplated. Schedule 1 identifies each Asset that requires a consent in connection with the
transaction herein contemplated; and

               (3) any books and records with respect to each of the Assets identified on Schedule 1 hereto.

          (b) Buyer has delivered to Seller and/or its designee as of the date hereof:

               (1) the Sale Price by wire transfer of immediately available funds in accordance with the
instructions set forth on Schedule 2 hereto; and

 

 

               (2) to the extent applicable, counterparts of the Transfer Instruments executed by Buyer.

     Section 5. Representations and Warranties of Seller. Seller hereby represents and
warrants to Buyer, as follows:

          (a) Seller is a corporation duly organized, validly existing and in good standing under the
laws of the State of Maryland.

          (b) Seller has the full power and authority to enter into and consummate all transactions
contemplated by this Agreement, has duly authorized the execution, delivery and performance of this
Agreement, and has duly executed and delivered this Agreement.

          (c) This Agreement, assuming due authorization, execution and delivery by Buyer, constitutes a
valid, legal and binding obligation of Seller, enforceable against Seller in accordance with the
terms hereof, subject to (A) applicable bankruptcy insolvency, reorganization, moratorium and other
laws affecting the enforcement of creditors’ rights generally, (B) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in equity or at law and (C)
public policy considerations underlying the securities laws, to the extent that such public policy
considerations limit the enforceability of the provisions of this Agreement that purport to provide
indemnification for securities laws liabilities.

          (d) The execution and delivery by Seller of this Agreement and its performance of, and
compliance with, the terms of this Agreement will not conflict with or constitute a breach,
violation, or default under (1) its certificate of incorporation or bylaws, (2) any law, any order
or decree of any court or arbiter, or any order, regulation or demand of any federal, state or
local government or regulatory authority, which violation is likely to affect materially and
adversely either the ability of Seller to perform its obligations under this Agreement or the
financial condition of Seller or (3) any indenture, loan or credit agreement, or any other
agreement, contract, instrument, mortgage, lien, lease, permit, authorization, order, writ,
judgment, injunction or decree to which Seller is a party or by which any Asset is bound or
affected; the consummation of the transactions contemplated by this Agreement will not result in
the cancellation, modification or termination of, or the acceleration of, or the creation of any
charges, claims, conditions, options, assignments, preemptive rights, rights of first refusal,
security interests, hypothecations, encumbrances, mortgages, liens or pledges (collectively,
“Liens”) on the Assets pursuant to any agreement, license, lease, understanding, contract,
indenture, mortgage, instrument, promise, undertaking or other commitment or obligation
(“Contracts”) under which Seller or any Asset is subject to or bound.

          (e) Seller has not dealt with any person that may be entitled to any commission or
compensation in connection with the transfer of the Assets. Seller or the obligor on the promissory
note or notes related to each Asset (the “Obligor”) has paid any and all amounts due to any such
person, and Buyer shall have no responsibility for any payments due any such person.

 

 

          (f) As of the date of this Agreement, all of the Assets as described on Schedule 1 hereto are
owned by Seller and Seller has good title to all of the Assets, free and clear of all Liens.

          (g) There are no Contracts with any other person or entity to sell, transfer, assign or in any
manner create a Lien on, the Assets, or to not sell, transfer or assign the Assets to Buyer.

          (h) No consents or approvals, other than those that have been obtained, are required for the
transfer of the Assets in accordance with the terms of this Agreement.

          (i) The Transfer Instruments are sufficient to convey to Buyer all right, title and interest
in the Assets in all relevant jurisdictions, except to the extent that a recording or other filing
is required to transfer such Asset.

          (j) To the best of Seller’s knowledge, there is no material default, breach, violation or
event of acceleration existing under any Asset and no event that, with the passage of time, or with
notice and the expiration of any grace or cure period, would constitute a material default, breach,
violation or event of acceleration thereunder.

          (k) To Seller’s knowledge, each property related to an Asset is in all material respects in
compliance with, and lawfully used, operated and occupied under, applicable zoning and building
laws or regulations, and Seller has not received notification from any governmental authority that
any such property fails to comply with such laws or regulations, is being used, operated or
occupied unlawfully or has failed to obtain or maintain any inspection, license or certificates
material to the operation of such property.

          (l) To the best of Seller’s knowledge, there are no actions, suits or proceedings pending, or
known to be threatened, before any court, administrative agency or arbitrator concerning an Asset
or the applicable collateral securing the Asset (the “Collateral”) that might materially and
adversely affect (1) title to such Asset, (2) the validity or enforceability thereof, (3) the value
of the Collateral as security for the Asset or (4) the marketability of such Collateral.

          (m) The information set forth on Schedule 1 hereto is true and accurate in all material
respects.

     Section 6. Representations and Warranties of Buyer. Buyer hereby represents and
warrants to Seller as follows:

          (a) Buyer is duly organized, validly existing and in good standing under the laws of the State
of Delaware.

          (b) Buyer has the full power and authority to enter into and consummate all transactions
contemplated by this Agreement, has duly authorized the execution, delivery and performance of this
Agreement and has duly executed and delivered this Agreement.

 

 

          (c) This Agreement, assuming due authorization, execution and delivery by Seller, constitutes
a valid, legal and binding obligation of Buyer, enforceable against Buyer in accordance with the
terms hereof, subject to (A) applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors’ rights generally, (B) general principles of
equity, regardless of whether such enforcement is considered in a proceeding in equity or at law
and (C) public policy considerations underlying the securities laws, to the extent that such public
policy considerations limit the enforceability of the provisions of this Agreement that purport to
provide indemnification for securities laws liabilities.

          (d) Buyer is not in violation of, and its execution and delivery of this Agreement and its
performance of, and compliance with, the terms of this Agreement will not constitute a violation
of, any law, any order or decree of any court or arbiter, or any order, regulation or demand of any
federal, state or local governmental or regulatory authority, which violation, in Buyer’s good
faith and reasonable judgment, is likely to affect materially and adversely either the ability of
Buyer to perform its obligations under this Agreement or the financial condition of Buyer.

     Section 7. Survival of Representations, Warranties and Covenants. All representations,
warranties and covenants contained in this Agreement shall survive the Closing for a period of
twelve (12) months after the Closing Date.

     Section 8. Remedies After Closing Upon Breach of Representations and Warranties Made by
Seller.

          (a) Opportunity to Cure. If, within twelve (12) months after the Closing, there is a
breach of any of the representations and warranties in Section 5 made by Seller regarding the
characteristics of any Asset, and such breach materially and adversely affects the value of such
Asset (a “Material Breach”), Buyer will promptly notify Seller in writing of the Material Breach
after Buyer first gains knowledge of such breach but in any event, no later than twelve (12) months
after the Closing; provided, however, that the failure to give such notice shall
not affect Buyer’s rights under this Section 8 except to the extent that Seller is actually
prejudiced thereby. Each such notice must describe the asserted Material Breach in reasonable
detail, and must also indicate the amount Buyer in good faith estimates the value of the affected
Asset has been diminished as a result of such asserted Material Breach (the “Diminution in Value”).
Seller may then elect in its sole and absolute discretion to either pay to Buyer the Diminution in
Value, or attempt to cure or correct such asserted Material Breach in all material respects within
the applicable Permitted Cure Period (as defined below).

     For purposes of the foregoing, and subject to the following paragraph, the “Permitted Cure
Period” applicable to any Material Breach in respect of an Asset will be the 90-day period
immediately following receipt by Seller of written notice of such Material Breach. If such Material
Breach cannot be corrected or cured in all material respects within such 90-day period, but it is
reasonably likely that such Material Breach can be corrected or cured and Seller is diligently
attempting to effect such correction or

 

 

cure, then the applicable Permitted Cure Period will be extended for an additional 90 days.

     Section 9. Indemnity.

          (a) Indemnification by Seller. Seller hereby agrees to indemnify and hold Buyer
harmless from and against any and all damage, expense, loss, cost, claim or liability (each a
“Claim”) suffered or incurred by Buyer as a result of any of the following:

               (1) any untruth or inaccuracy in, or any breach of, any of the representations or warranties
made by Seller in Section 5 of this Agreement; or

               (2) any breach of, or failure to perform, any agreement of Seller contained in this Agreement.

          (b) Indemnification by Buyer. Buyer hereby agrees to indemnify and hold Seller
harmless from and against any and all Claims suffered or incurred by Seller as a result of any of
the following:

               (1) any untruth or inaccuracy in, or any breach of, any of the representations or warranties
made by Buyer in Section 6 of this Agreement; or

               (2) any breach of, or failure to perform, any agreement of Buyer contained in this Agreement.

          (c) Scope of Indemnity. Notwithstanding anything to the contrary otherwise provided in
this Agreement:

               (1) except in the case of fraud, the indemnification set forth in Sections 9(a) and 9(b) shall
be limited to an amount equal to the value of the Sale Price received by Seller on the date hereof;
and

               (2) the indemnification set forth in Sections 9(a) and 9(b) shall only extend to any Claim
which arises within twelve (12) months following the Closing.

          (d) Notice. To the extent that a Claim is asserted by a third party, the party hereto
seeking indemnification pursuant to Section 9(a) or 9(b) (“Indemnitee”) shall give prompt written
notice to the party hereto from whom indemnification is sought (“Indemnitor”) as to the assertion
of any Claim, or the commencement of any Claim. Subject to Section 9(c)(2), the omission of
Indemnitee to notify Indemnitor of any such Claim shall not relieve Indemnitor from any liability
in respect of such Claim that it may have to Indemnitee on account of this Agreement,
provided, however, that Indemnitor shall be relieved of liability to the extent
that the failure so to notify (a) shall have caused prejudice to the defense of such Claim, or (b)
shall have materially increased the costs or liability of Indemnitor by reason of the inability or
failure of Indemnitor (because of the lack of prompt notice from Indemnitee) to be involved in any
investigations or negotiations regarding any such Claim. In case any such Claim shall be asserted
or

 

 

commenced against Indemnitee and it shall notify Indemnitor thereof, Indemnitor shall be
entitled to participate in the negotiation or administration thereof and, to the extent it may
wish, to assume the defense thereof with counsel reasonably satisfactory to Indemnitee, and, after
notice from Indemnitor to Indemnitee of its election so to assume the defense thereof, which notice
shall be given within fifteen (15) calendar days of its receipt of such notice from Indemnitee,
Indemnitor will not be liable to Indemnitee hereunder for any legal or other expenses subsequently
incurred by Indemnitee in connection with the defense thereof other than reasonable costs of
investigation. Indemnitor shall not settle any Claim in any manner that does not completely relieve
Indemnitee of liability for such Claim, without the written consent of Indemnitee, which consent
shall not be unreasonably withheld or delayed.

     Section 10. Expenses. Except as otherwise provided in the Mortgage Purchase Agreement,
all reasonable costs and expenses incurred in connection with this Agreement and the transactions
contemplated hereby (including reasonable attorneys fees and expenses) shall be paid by each of the
respective parties with respect to their own costs and expenses.

     Section 11 Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including facsimile or similar writing) and shall be given,

     If to Seller:

Care Investment Trust Inc.

c/o CIT Healthcare LLC

505 Fifth Avenue, 6th Floor

New York, New York 10017

Attention: Chief Financial Officer

Facsimile No.: (212) 771-9317

     If to Buyer:

CIT Healthcare LLC

505 Fifth Avenue, 6th Floor

New York, New York 10017

Attention: President

Facsimile No.: (212) 771-9317

     Section 12. Further Assurances. From time to time following the Closing, Seller shall
execute and/or deliver, or cause to be executed and/or delivered, to Buyer such other documents or
instruments of conveyance and transfer as Buyer may reasonably request or as may be otherwise
necessary to more effectively convey and transfer to, and vest in Buyer the Assets, or in order to
fully effectuate and to implement the purposes, terms and provisions of this Agreement.

     Section 13 Entire Agreement: No Other Representations. This Agreement and the Mortgage
Purchase Agreement, along with all exhibits, schedules and annexes thereto, constitute the entire
agreement among the Parties with respect to the subject

 

 

matter hereof, and supersede all other prior agreements and understandings, both written and oral,
between the Parties, with respect to the subject matter hereof.

     Section 14 Severability. The provisions of this Agreement shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this Agreement, or the
application thereof to any person or entity or any circumstance, is invalid or unenforceable (a) a
suitable and equitable provision shall be substituted therefor in order to carry out, so far as may
be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b)
the remainder of this Agreement and the application of such provision to other persons or entities
or circumstances shall not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.

     Section 15 Interpretation. The section references and headings herein are for
convenience of reference only, do not constitute part of this Agreement and shall not be deemed to
limit or otherwise affect any of the provisions hereof.

     Section 16 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto and their respective successors and permitted assigns. No Party
may assign any of its rights or delegate any of its duties or obligations under this Agreement,
provided that Buyer may, upon written notice to Seller, delegate its duties or obligations
hereunder to any Affiliate or Affiliates of Buyer, and provided further that Buyer shall have the
right to assign its rights under this agreement with respect to any Asset to any purchaser of such
Asset from Buyer.

     Section 17 Counterparts; Facsimile Signatures. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original but all of which shall
constitute one instrument. The Parties may execute this Agreement by the facsimile exchange of
executed signature pages.

     Section 18 Enforcement; No Joint Venture or Partnership; No Third Party Beneficiaries.

          (a) If any suit, action or other legal proceeding is brought to enforce any provision of this
Agreement, the Party ultimately prevailing in such action or proceeding shall be entitled to
recover the reasonable costs (including legal fees and expenses) of bringing or defending such
action or proceeding.

          (b) Seller and Buyer intend that the relationships created hereunder be solely that of
purchaser and seller. Nothing herein or therein is intended to create a joint venture, partnership,
tenancy in common, or joint tenancy relationship between Buyer, on the one hand, and Seller, on the
other hand.

          (c) This Agreement is solely for the benefit of Seller and Buyer and their respective
successors and permitted assigns and nothing contained in this Agreement shall be deemed to confer
upon anyone other than the Seller and Buyer and

 

 

their respective successors and permitted assigns any right to insist upon or to enforce the
performance or observance of any of the obligations contained herein or therein.

     Section 19 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
INTERNAL SUBSTANTIVE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF. EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR ANY DISTRICT WITHIN
SUCH STATE FOR THE PURPOSE OF ANY ACTION OR JUDGMENT RELATING TO OR ARISING OUT OF THIS AGREEMENT
OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND TO THE LAYING OF VENUE IN SUCH COURT.

     Section 20 Waiver of Jury Trial. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

     IN WITNESS WHEREOF, each of the parties hereto have executed this Assignment Agreement as of
the date first written above.

	 	 	 	 	 
	 	CARE INVESTMENT TRUST INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	CIT HEALTHCARE LLC

 	 
	 	By:  	  	 
	 	 	Name:  	Steven Warden 	 
	 	 	Title:  	President 	 
	 

 

 

SCHEDULE 1

	 	 	 	 	 	 
	 
	 	ASSET

	 	 	CONSENT	 
	 	That certain mortgage loan in the
original principal amount of
$28,711,000 made by the lenders
under that certain Financing
Agreement dated as of March 2, 2007
(the “Financing Agreement”), by and
among CIT Healthcare LLC, as agent,
CLC RE, LLC, a Virginia limited
liability company, as borrower, and
the lenders party thereto as
lenders.

	 	 	Consent of CIT Healthcare LLC, as
agent under the Financing AgreementEX-10.7

Exhibit 10.7

DIAMOND MANAGEMENT & TECHNOLOGY CONSULTANTS, INC.

2000 STOCK OPTION PLAN

As Amended As of December 31, 2008

     1. Purpose. The Diamond Management & Technology Consultants, Inc. 2000 Stock Option
Plan (the “Plan”) is intended to promote the long-term success of Diamond Management & Technology
Consultants, Inc. (the “Company”) and its stockholders by strengthening the Company’s ability to
attract and retain highly competent executives and other selected employees, and to provide a means
to encourage stock ownership and proprietary interest in the Company. The Company intends that
Awards granted pursuant to the Plan be exempt from or comply with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”),and the regulations thereunder (collectively “Section
409A”), including any amendments or replacements of such section, and the Plan shall be so
administered and construed.

     2. Term. The Plan shall become effective upon the date (the “Effective Date”) it is
approved by the affirmative vote of the holders of a majority of the securities of the Company
present or represented, and entitled to vote at a meeting of stockholders of the Company and shall
terminate at the close of business on the tenth anniversary of the Effective Date unless terminated
earlier under Section 14. After termination of the Plan, no future awards may be granted, but
previously granted awards shall remain outstanding in accordance with their applicable terms and
conditions and the terms and conditions of the Plan.

     3. Plan Administration. The Company’s Management Committee, as constituted from time
to time, or any other committee appointed by the Board (the “Committee”), shall be responsible for
administering the Plan. Except as otherwise provided in the Plan, the Committee shall have full
and exclusive power to interpret the Plan and to adopt such rules, regulations and guidelines for
carrying out the Plan as it may deem necessary or proper, and such power shall be executed in the
best interests of the Company and in keeping with the objectives of the Plan. The interpretation
and construction of any provision of the Plan or any option or right granted hereunder and all
determinations by the Committee in each case shall be final, binding and conclusive with respect to
all interested parties.

     4. Eligibility. Any employee of the Company shall be eligible to receive one or more
awards under the Plan. Directors of the Company who are not employed by the Company will be
considered “employees” eligible to receive awards under the Plan, but only for purposes of
nonqualified stock options. Consultants of the Company qualifying as “employees” within the meaning
of Form S-8 under the Securities Act of 1933, as amended (the “Securities Act”), shall also be
eligible to receive awards under the Plan. “Company” includes any entity that is directly or
indirectly controlled by the Company or any entity in which the Company has a significant equity
interest, as determined by the Committee.

     5. Shares of Common Stock Subject to the Plan. Subject to the provisions of Section
6 of the Plan, the aggregate number of shares of Common Stock, $0.001 par value, of the Company
(“Stock”) which may be transferred to participants under the Plan shall be 8,500,000 shares. The
aggregate number of shares of Stock that may be granted in the form of incentive stock options
(“ISO’s”) intended to comply with Section 422 of the Code, shall be 8,500,000. Unless otherwise
determined by the Committee, the aggregate number of shares of Stock that may be covered by awards
granted to any single individual under the Plan shall not exceed 50,000 shares per fiscal year of
the Company.

     Shares subject to awards under the Plan which expire, terminate, or are canceled prior to
exercise or, in the case of awards granted under Section 8.3, do not vest, shall thereafter be
available for the granting of other awards. Shares which have been exchanged by a participant as
full or partial payment to the Company in connection with any award under the Plan also shall
thereafter be available for the granting of other awards. In instances where a stock appreciation
right (“SAR”) or other award is settled in cash, the shares covered by such award shall remain
available for issuance under the Plan. Likewise, the payment of cash dividends and dividend
equivalents paid in cash in conjunction with outstanding awards shall not be counted against the
shares available for issuance.

Page 1

 

 

     Any shares of Stock issued under the Plan may consist in whole or in part of authorized and
unissued shares or of treasury shares, and no fractional shares shall be issued under the Plan.
Cash may be paid in lieu of any fractional shares in settlements of awards under the Plan.

     6. Adjustments. In the event of any stock dividend, stock split, combination or
exchange of shares, merger, consolidation, spin-off, recapitalization or other distribution (other
than normal cash dividends) of Company assets to stockholders, or any other change affecting shares
of Stock or share price, such proportionate adjustments, if any, as the Committee in its discretion
may deem appropriate to reflect such change shall be made with respect to (1) the aggregate number
of shares of Stock that may be issued under the Plan; (2) each outstanding award made under the
Plan; and (3) the exercise price per share for any outstanding stock options, SARs or similar
awards under the Plan.

     7. Fair Market Value. “Fair Market Value,” for all purposes of the Plan, shall mean
the average of the closing price of a share of Stock on the NASDAQ National Market System for the
ten trading days immediately preceding the date of grant. When granting a Stock Option or SAR, the
Company will identify the recipient and the number and class of shares that are subject to the
Stock Option or SAR before the beginning of the ten day period.

     8. Awards. Except as otherwise provided in this Section 8, the Committee shall
determine the type or types of award(s) to be made to each participant and the number of shares of
Stock subject to each such award, and any other terms, conditions and limitations applicable to
such award. Awards may be granted singly, in combination or in tandem. Awards also may be made in
combination or in tandem with, in replacement of, as alternatives to or as the payment form for
grants or rights under any other compensation plan or individual contract or agreement of the
Company including those of any acquired entity. The types of awards that may be granted under the
Plan are:

     8.1 Stock Options. A stock option is a right to purchase a specified number of
shares of Stock during a specified period. A stock option may be in the form of an ISO which
complies with Section 422 of the Code. The purchase price per share for each stock option
shall be not less than 100% of Fair Market Value on the date of grant; except that the
Committee may set the purchase price per share for an award not intended to be an ISO at less
than 100% of Fair Market Value on the date of grant. The price at which shares may be
purchased under a stock option shall be paid in full by the optionee at the time of the
exercise in cash or such other method permitted by the Committee, including (1) tendering
shares; (2) authorizing a third party to sell the shares (or a sufficient portion thereof)
acquired upon exercise of a stock option and assigning the delivery to the Company of a
sufficient amount of the sale proceeds to pay for all the shares acquired through such
exercise; or (3) any combination of the above.

     8.2 SARs. A SAR is a right to receive a payment, in cash and/or shares, equal
to the excess of the Fair Market Value of a specified number of shares of Stock on the date
the SAR is exercised over the Fair Market Value on the date the SAR was granted as set forth
in the applicable award agreement; except that if a SAR is granted retroactively in tandem
with or in substitution for a stock option, the designated Fair Market Value set forth in the
award agreement shall be no lower than the Fair Market Value of a share for such tandem or
replaced stock option.

     8.3 Stock Awards. A stock award is a grant made or denominated in shares or
units equivalent in value to shares. All or part of any stock award may be subject to
conditions and restrictions as set forth in the applicable award agreement, which may be
based on continuous service with the Company or the achievement of performance goals related
to profits, profit growth, profit-related return ratios, cash flow or total stockholder
return, where such goals may be stated in absolute terms or relative to comparable companies.

     9. Deferrals and Settlements. Payment of awards may be in the form of cash, stock,
other awards or combinations thereof as shall be determined at the time of grant, and with such
restrictions as may be imposed in the award agreement. The Committee also may require or permit
participants to elect to defer the issuance of shares or the settlement of awards in cash under
such rules and procedures as it may establish under the Plan Such rules will be maintained in a
separate written document.. Payments of awards shall be made as soon as administratively
possible following the vest date, but in no event later than 60 days following the vest date.

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          9.1 Delayed Payment. Notwithstanding anything to the contrary in the award agreement
or the Plan, if an Award is subject to Section 409A, in no event will payment upon Separation from
Service, as defined in Section 409A, be made to a Specified Employee, as defined in the Policy for
Identifying Specified Employees, prior to the date which is six months after Separation from
Service

     10. No Acceleration of Distributions. Notwithstanding anything to the contrary herein,
this Plan does not permit the acceleration of the time or schedule of any distribution under this
Plan pursuant to any Award subject to Section 409A, except as provided by Section 409A.

     11. Transferability and Exercisability. Awards granted under the Plan shall not be
transferable or assignable other than (1) by will or the laws of descent and distribution; (2) by
gift or other transfer of an award to any trust or estate in which the original award recipient or
such recipient’s spouse or other immediate relative has a substantial beneficial interest, or to a
spouse or other immediate relative, provided that any such transfer is permitted by Rule 16b-3
under the Securities Exchange Act of 1934, as amended, as in effect when such transfer occurs and
the Board does not rescind this provision prior to such transfer; or (3) pursuant to a domestic
relations order (as defined by the Code). However, any award so transferred shall continue to be
subject to all the terms and conditions contained in the instrument evidencing such award.

     12. Award Agreements. Awards under the Plan shall be evidenced by agreements as
approved by the Committee that set forth the terms, conditions and limitations for each award,
which may include the term of an award (except that in no event shall the term of any ISO exceed a
period of ten years from the date of its grant), the provisions applicable in the event the
participant’s employment terminates, and the Committee’s authority to amend, modify, suspend,
cancel or rescind any award. The Committee need not require the execution of any such agreement,
in which case acceptance of the award by the participant shall constitute agreement to the terms of
the award.

     13. Acceleration and Settlement of Awards. The Committee shall have the discretion,
exercisable at any time before a sale, merger, consolidation, reorganization, liquidation or change
of control of the Company, as defined by Section 409A, to provide for the acceleration of vesting
and for settlement, including cash payment of an award granted under the Plan, upon or immediately
before the effectiveness of such event. However, the granting of awards under the Plan shall in no
way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its
capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all
or any portion of its businesses or assets.

     14. Plan Amendment. The Plan may be amended by the Committee as it deems necessary or
appropriate better to achieve the purposes of the Plan, except that no such amendment shall be made
without the approval of the Company’s stockholders that would increase the number of shares
available for issuance in accordance with Sections 5 and 6 of the Plan. The Board may suspend the
Plan or terminate the Plan at any time; provided, that no such action shall adversely affect any
outstanding benefit. Any shares authorized under Section 5 (or any amendment thereof) with respect
to which no award is granted prior to termination of the Plan, or with respect to which an award is
terminated, forfeited or canceled after termination of the Plan, shall automatically be transferred
to any subsequent stock incentive plan or similar plan for employees of the Company.

     15. Tax Withholding. The Company shall have the right to deduct from any settlement
of an award made under the Plan, including the delivery or vesting of shares, a sufficient amount
to cover withholding of any taxes required by law, or to take such other action as may be necessary
to satisfy any such withholding obligations. The Committee may, in its discretion and subject to
such rules as it may adopt, permit participants to use shares to satisfy required tax withholding
and such shares shall be valued at the Fair Market Value as of the settlement date of the
applicable award.

     16. Registration of Shares. Notwithstanding any other provision of the Plan, the
Company shall not be obligated to offer or sell any shares unless such shares are at that time
effectively registered or exempt from registration under the Securities Act and the offer and sale
of such shares are otherwise in compliance with all applicable federal and state securities laws
and the requirements of any stock exchange or similar agency on which the Company’s securities may
then be listed or quoted. The Company shall have no obligation to register the shares under the
federal securities laws or take any other steps as may be necessary to enable the shares to be
offered and sold under federal or other securities laws. Prior to receiving shares a Plan
participant may be required to furnish

Page 3

 

 

representations or undertakings deemed appropriate by the Company to enable the offer and sale of
the shares or subsequent transfers of any interest in such shares to comply with the Securities Act
and other applicable securities laws. Certificates evidencing shares shall bear any legend
required by, or useful for the purposes of compliance with, applicable securities laws, this Plan
or award agreements.

     17. Other Benefit and Compensation Programs. Unless otherwise specifically determined
by the Committee, settlements of awards received by participants under the Plan shall not be deemed
a part of a participant’s regular, recurring compensation for purposes of calculating payments or
benefits from any Company benefit plan or severance program. Further, the Company may adopt other
compensation programs, plans or arrangements as it deems appropriate or necessary.

     18. Unfunded Plan. Unless otherwise determined by the Committee, the Plan shall be
unfunded and shall not create (or be construed to create) a trust or a separate fund or funds. The
Plan shall not establish any fiduciary relationship between the Company and any participant or
other person. To the extent any person holds any rights by virtue of an award granted under the
Plan, such rights shall be no greater than the rights of an unsecured general creditor of the
Company.

     19. Use of Proceeds. The cash proceeds received by the Company from the issuance of
shares pursuant to awards under the Plan shall constitute general funds of the Company.

     20. Regulatory Approvals. The implementation of the Plan, the granting of any award
under the Plan, and the issuance of shares upon the exercise or settlement of any award shall be
subject to the Company’s procurement of all approvals and permits required by regulatory
authorities having jurisdiction over the Plan, the awards granted under it or the shares issued
pursuant to it.

     21. Employment Rights. The Plan does not constitute a contract of employment and
participation in the Plan will not give a participant the right to continue in the employ of the
Company on a full-time, part-time or any other basis. Participation in the Plan will not give any
participant any right or claim to any benefit under the Plan, unless such right or claim has
specifically accrued under the terms of the Plan.

     22. Governing Law. The validity, construction and effect of the Plan and any actions
taken or relating to the Plan shall be determined in accordance with the laws of the State of
Illinois and applicable federal law.

     23. Successors and Assigns. The Plan shall be binding on all successors and assigns
of a participant, including, without limitation, the estate of such participant and the executor,
administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative
of the participant’s creditors.

Page 4

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