Document:

ex41.htm

    
      EXHIBIT
4.1

      

       

       

       

       

       

      SUN HEALTHCARE GROUP,
INC.

       

      DEFERRED COMPENSATION
PLAN

       

      - PLAN DOCUMENT
-

      

       

      

       

      

       

      

       

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SECTION
1     INTRODUCTION

       

      
        	
                1.1  

              	
                Adoption
      of Plan and Purpose

              

      

       

      This Plan
is an unfunded, nonqualified deferred compensation plan.  With the
consent of the Employer (as defined in subsection 2.16) the plan may be adopted
by executing the Adoption Agreement (as defined in subsection 2.3) in the form
attached hereto.  The Plan contains certain variable features which
the Employer has specified in the Adoption Agreement.  Only those
variable features specified by the Employer in the Adoption Agreement will be
applicable to the Employer.

       

      The
purpose of the Plan is to provide certain supplemental benefits under the Plan
to a select group of management or highly compensated Employees of the Employer
(in accordance with Sections 201, 301 and 401 of ERISA), Members of the Board(s)
of the Employer, or Other Service Providers to the Employer (as defined below),
and to allow such Employees, Board Members or Other Service Providers the
opportunity to defer a portion of their salaries, bonuses and other
compensation, subject to the terms of the Plan.  Participants (and
their Beneficiaries) shall have only those rights to payments as set forth in
the Plan and shall be considered general, unsecured creditors of the Employer
with respect to any such rights.  The Plan is designed to comply with
the American Jobs Creation Act of 2004 (the “Jobs Act”) and Code Section
409A.  It is intended that the Plan be interpreted according to a good
faith interpretation of the Jobs Act and Code Section 409A, and consistent with
published IRS guidance, including proposed and final IRS regulations under Code
Section 409A. Treatment of amounts in the Plan under any transition rules
provided under all IRS and other guidance in connection with the Jobs Act or
Code Section 409A shall be expressly authorized hereunder in accordance with
procedures developed by the Administrator.  In the event of any
inconsistency between the terms of the Plan and the Jobs Act or Code Section
409A (and regulations thereunder), the terms of the Jobs Act and Code Section
409A (and the regulations thereunder) shall control.  The Plan is
intended to constitute an account balance plan (as defined in Treasury
Regulation Section 1.409A-1(c)).

       

      By
becoming a Participant and making deferrals under this Plan, each Participant
agrees to be bound by the provisions of the Plan and the determinations of the
Employer and the Administrator hereunder.

       

      
        	
                1.2  

              	
                Adoption
      of the Plan

              

      

       

      The
Employer may adopt the Plan by completing and signing the Adoption Agreement in
the form attached hereto.

       

      
        	
                1.3  

              	
                Plan
      Year

              

      

       

      The Plan
is administered on the basis of a Plan Year, as defined in subsection
2.27.

       

      
        	
                1.4  

              	
                Plan
      Administration

              

      

       

      The plan
shall be administered by a plan administrator (the “Administra­tor,” as that
term is defined in Section 3(16)(A) of ERISA) designated by the Employer in the
Adoption Agreement.  The Administrator has full discretionary
authority to construe and interpret the 

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

        provisions
of the Plan and make factual deter­minations thereunder, including the power
to determine the rights or eligibility of em­ployees or participants and any
other persons, and the amounts of their benefits under the plan, and to remedy
ambiguities, inconsistencies or omissions, and such determina­tions shall be
binding on all parties.  The Administrator from time to time may adopt
such rules and regulations as may be necessary or desirable for the proper and
efficient administration of the Plan and as are consistent with the terms of the
Plan.  The admin­istrator may delegate all or any part of its
powers, rights, and duties under the Plan to such person or persons as it may
deem advisable, and may engage agents to provide cer­tain administrative
services with respect to the Plan.  Any notice or document relating to
the Plan which is to be filed with the Administrator may be delivered, or mailed
by registered or certified mail, postage pre-paid, to the Administrator, or to
any designated representative of the Administrator, in care of the Employer, at
its principal office.

      

       

      SECTION
2     DEFINITIONS

       

      
        	
                2.1  

              	
                Account

              

      

       

      “Account”
means all notional accounts and subaccounts maintained for a Participant in
order to reflect his interest under the Plan, as described in Section
6.

       

      
        	
                2.2  

              	
                Administrator

              

      

       

      “Administrator”
means the individual or individuals (if any) delegated authority by the Employer
to administer the Plan, as defined in subsection 1.4.

       

      
        	
                2.3  

              	
                Adoption
      Agreement

              

      

       

      “Adoption
Agreement” shall mean the form executed by the Employer and attached hereto,
which Agreement shall constitute a part of the Plan.

       

      
        	
                2.4  

              	
                Beneficiary

              

      

       

      “Beneficiary”
means the person or persons to whom a deceased Participant’s benefits are
payable under subsection 9.5.

       

      
        	
                2.5  

              	
                Board

              

      

       

      “Board”
means the Board of Directors of the Employer (if applicable), as from time to
time constituted.

       

      
        	
                2.6  

              	
                Board
      Member

              

      

       

      “Board
Member” means a member of the Board.

       

      
        	
                2.7  

              	
                Bonus

              

      

       

      “Bonus”
(also referred to herein as a “Non-Performance-Based Bonus) means an award of
cash that is not a Performance-Based Bonus (as defined in subsection 2.25) that
is payable to 

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

        an
Employee (or Board Member or Other Service Provider, as applicable) in a given
year, with respect to the immediately preceding Bonus performance period, which
may or may not be contingent upon the achievement of specified performance
goals.

      

       

      
        	
                2.8  

              	
                Code

              

      

       

      “Code”
means the Internal Revenue Code of 1986, as amended.  Reference to a
specific section of the Code shall include such section, any valid regulation
promulgated thereunder, and any comparable provision of any future legislation
amending, supplementing, or superseding such section.

       

      
        	
                2.9  

              	
                Compensation

              

      

       

      “Compensation”
shall mean the amount of a Participant’s remuneration from the Employer
designated in the Adoption Agreement.   Notwithstanding the
foregoing, the Compensation of an Other Service Provider (as defined in
subsection 2.22) shall mean his remuneration from the Employer pursuant to an
agreement to provide services to the Employer.   With respect to
any Participant who is a Member of the Board (if applicable), “Compensation”
means all cash remuneration which, absent a deferral election under the Plan,
would have otherwise been received by the Board Member in the taxable year,
payable to the Board Member for service on the Board and on Board committees,
including any cash payable for attendance at Board meetings and Board committee
meetings, but not including any amounts constituting reimbursements of expenses
to Board Members.   To the extent the Employer has designated
“401(k) Refunds” in the Adoption Agreement (and to the extent elected by the
Participant), an amount equal to the Participant’s “401(k) Refund” shall be
deferred from the Participant’s Compensation otherwise payable to the
Participant in the next subsequent Compensation pay period (or such later pay
period in the same calendar year as the Administrator determines shall be
administratively feasible), and shall be credited to the Participant’s
Compensation Deferral Account in accordance with subsection 4.1.  For
purposes of this subsection, “401(k) Refund” means any amount distributed to the
applicable Participant from the Employer’s qualified retirement plan intended to
comply with Section 401(k) of the Code that is in excess of the maximum deferral
for the prior calendar year allowable under such qualified retirement
plan.   Notwithstanding the foregoing, the definition of
compensation for purposes of determining key employees under subsection 9.3 of
the Plan shall be determined solely in accordance with subsection
9.3.  To the extent not otherwise designated by the Employer in a
separate document forming part of the Plan, Compensation payable after December
31 of a given year solely for services performed during the Employer’s final
payroll period containing December 31, is treated as Compensation payable for
services performed in the subsequent year in which the non-deferred portion of
the payroll payment is actually made.

       

      
        	
                2.10  

              	
                Compensation
      Deferrals

              

      

       

      “Compensation
Deferrals” means the amounts credited to a Participant’s Compensation Deferral
Account pursuant to the Participant’s election made in accordance with
subsection 4.1.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        	
                2.11  

              	
                Deferral
      Election

              

      

       

      “Deferral
Election” means an election by a Participant to make Compensation Deferrals or
Performance-Based Bonus Deferrals in accordance with Section 4.

       

      
        	
                2.12  

              	
                Disability

              

      

       

      “Disability”
for purposes of this Plan shall mean the occurrence of an event as a result of
which the Participant is considered disabled, as designated by the Employer in
the Adoption Agreement.

       

      
        	
                2.13  

              	
                Effective
      Date

              

      

       

      “Effective
Date” means the Effective Date of the Plan, as indicated in the Adoption
Agreement.

       

      
        	
                2.14  

              	
                Eligible
      Individual

              

      

       

      “Eligible
Individual” means each Board Member, Other Service Provider, or Employee of an
Employer who satisfies the eligibility requirements set forth in the Adoption
Agreement, for the period during which he is determined by the Employer to
satisfy such requirements.

       

      
        	
                2.15  

              	
                Employee

              

      

       

      “Employee”
means a person who is employed by an Employer and is treated and/or classified
by the Employer as a common law employee for purposes of wage withholding for
Federal income taxes.  If a person is not considered to be an Employee
of the Employer in accordance with the preceding sentence, a subsequent
determination by the Employer, any governmental agency, or a court that the
person is a common law employee of the Employer, even if such determination is
applicable to prior years, will not have a retroactive effect for purposes of
eligibility to participate in the Plan.

       

      
        	
                2.16  

              	
                Employer

              

      

       

      “Employer”
means the business entity designated in the Adoption Agreement, and its
successors and assigns unless otherwise herein provided, or any other
corporation or business organization which, with the consent of the Employer, or
its successors or assigns, assumes the Employer’s obligations hereunder, and any
affiliate or subsidiary of the Employer, as defined in Subsections 414(b) and
(c) of the Code and Section 1.409A-1(h) of the Treasury
Regulations.

       

      
        	
                2.17  

              	
                Employer
      Contributions

              

      

       

      “Employer
Contributions” means the amounts other than Matching Contributions that are
credited to a Participant’s Employer Contributions Account under the Plan by the
Employer in accordance with subsection 4.4.

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        	
                2.18  

              	
                ERISA

              

      

       

      “ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.  Reference to a specific section of ERISA shall include such
section, any valid regulation promulgated thereunder, and any comparable
provision of any future legislation amending, supplementing, or superseding such
section.

       

      
        	
                2.19  

              	
                Fiscal
      Year Compensation

              

      

       

      “Fiscal
Year Compensation” means Compensation relating to a period of service
coextensive with one or more consecutive non-calendar-year fiscal years of the
Employer, where no amount of such Compensation is paid or payable during the
service period.  For example, a Bonus based upon a service period of
two consecutive fiscal years payable after the completion of the second fiscal
year would be “Fiscal Year Compensation,” but periodic salary payments or
Bonuses based on service periods other than the Employer’s fiscal year would not
be Fiscal Year Compensation.

       

      
        	
                2.20  

              	
                Investment
      Funds

              

      

       

      “Investment
Funds” means the notional funds or other investment vehicles designated pursuant
to subsection 5.1.

       

      
        	
                2.21  

              	
                Matching
      Contributions

              

      

       

      “Matching
Contributions” means the amounts credited to a Participant’s Employer
Contribution Account under the Plan by the Employer that are based on the amount
of Participant Deferrals made by the Participant under the Plan, or that are
based upon such other formula as designated by the Employer in the Adoption
Agreement, in accordance with subsection 4.3.

       

      
        	
                2.22  

              	
                Other
      Service Providers

              

      

       

      “Other
Service Providers” shall mean independent contractors, consultants, or other
similar providers of services to the Employer, other than Employees and Board
Members.  To the extent that an Other Service Provider is unrelated to
the Employer and satisfies the other requirements under Treasury Regulation
Section 1.409A-1(f)(2)(i), as described therein and in Code Section 409A and
other applicable regulations, guidance, etc. thereunder, the provisions of such
guidance shall not apply.  To the extent that an Other Service
Provider uses an accrual method of accounting for a given taxable year, amounts
deferred under the Plan in such taxable year shall not be subject to Code
Section 409A and other applicable guidance thereunder, notwithstanding any
provision of the Plan to the contrary.

       

      
        	
                2.23  

              	
                Participant

              

      

       

      “Participant”
means an Eligible Individual who meets the requirements of Section 3 and elects
to make Compensation Deferrals pursuant to Section 4, or who receives Employer
Contributions or Matching Contributions pursuant to subsection 4.3 or
4.4.  A Participant shall cease being a Participant in accordance with
subsection 3.2 herein.

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        	
                2.24  

              	
                Participant
      Deferrals

              

      

       

      “Participant
Deferrals” means all amounts deferred by a Participant under this Plan,
including Participant Compensation Deferrals and Participant Performance-Based
Bonus Deferrals.

       

      
        	
                2.25  

              	
                Performance-Based
      Bonus

              

      

       

      “Performance-Based
Bonus” generally means Compensation where the amount of, or entitlement to, the
compensation is contingent on the satisfaction of previously established
organizational or individual performance criteria relating to a performance
period of at least 12 consecutive months in which the Eligible Individual
performs services, pursuant to rules described in Treasury Regulation Section
1.409A-1(e).

       

      
        	
                2.26  

              	
                Performance-Based
      Bonus Deferrals

              

      

       

      “Performance-Based
Bonus Deferrals” means the amounts credited to a Participant’s
Compensation  Deferral Account from the Participant’s
Performance-Based Bonus pursuant
to the Participant’s election made in accordance with subsection
4.2.

       

      
        	
                2.27  

              	
                Plan
      Year

              

      

       

      “Plan
Year” means each 12-month period specified in the Adoption Agreement, on the
basis of which the Plan is administered.

       

      
        	
                2.28  

              	
                Retirement

              

      

       

      “Retirement”
for purposes of this Plan means the Participant’s Termination Date, as defined
in subsection 2.30, after attaining any age and/or service minimums with respect
to Retirement or Early Retirement as designated by the Employer in the Adoption
Agreement.

       

      
        	
                2.29  

              	
                Spouse

              

      

       

      “Spouse”
means the person to whom a Participant is legally married under applicable state
law at the earlier of the date of the Participant’s death or the date payment of
the Participant’s benefits commenced and who is living on the date of the
Participant’s death.

       

      
        	
                2.30  

              	
                Termination
      Date

              

      

       

      “Termination
Date” means (i) with respect to an Employee Participant, the Participant’s
separation from service (within the meaning of Section 409A of the Code and the
regulations, notices and other guidance thereunder, including death or
separation following Disability) with the Employer, and any subsidiary or
affiliate of the Employer as defined in Sections 414(b) and (c) of the Code
and Section 1.409A-1(h) of the Treasury Regulations; (ii) with respect to a
Board Member Participant, the Participant’s resignation or removal from the
Board (for any reason, including death or following Disability); and (iii) with
respect to any Other Service Provider, the expiration of all agreements to
provide services to the Employer (for any reason, including death or following
Disability).  The date that an Employee’s performance of services for
all the 

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

        Employers
is reduced to a level less than 20% of the average level of services performed
in the preceding 36-month period, shall be considered a Termination Date, and
the performance of services at a level of 50% or more of the average level of
services performed in the preceding 36-month period shall not be considered a
Termination Date, based on the parties’ reasonable expectations as of the
applicable date. A Participant’s Termination Date shall not be deemed to have
occurred if the Employee’s average level of service performed in the preceding
36-month period drops below 50% but not less than 20%, unless the Employer: (i)
has designated in a writing forming part of the Plan that a level between 20%
and 50% will be deemed to trigger a Termination Date, and (ii) such writing was
in place at or prior to the time of the Participant’s Deferral Election
..  If such designation is subsequently changed, the change must comply
with the rules regarding subsequent deferrals and the acceleration of payments
described in Code Section 409A and the regulations, notices, rulings and other
guidance thereunder.  If a Participant is both a Board Member
Participant and an Employee Participant, “Termination Date” means the date the
Participant satisfies both criteria (i) and (ii) above.

      

       

      
        	
                2.31  

              	
                Valuation
      Date

              

      

       

      “Valuation
Date” means the last day of each Plan Year and any other date that the Employer,
in its sole discretion, designates as a Valuation Date, as of which the value of
an Investment Fund is adjusted for notional deferrals, contributions,
distributions, gains, losses, or expenses.

       

      
        	
                2.32  

              	
                Other
      Definitions

              

      

       

      Other
defined terms used in the Plan shall have the meanings given such terms
elsewhere in the Plan.

       

      SECTION
3     ELIGIBILITY AND PARTICIPATION

       

      
        	
                3.1  

              	
                Eligibility

              

      

       

      Each
Eligible Individual on the Effective Date of the Plan shall be eligible to
become a Participant by properly making a Deferral Election on a timely basis as
described in Section 4, or, if applicable and eligible as designated by the
Employer in the Adoption Agreement, by receiving a Matching Contribution or
other Employer Contribution under the Plan.  Each other Eligible
Individual may become a Participant by making a Deferral Election on a timely
basis as described in Section 4 or, if applicable and eligible as designated by
the Employer in the Adoption Agreement, by receiving a Matching Contribution or
other Employer Contribution under the Plan.  Each Eligible
Individual’s decision to become a Participant by making a Deferral Election
shall be entirely voluntary.  The Employer may require the Participant
to complete any necessary forms or other information as it deems necessary or
advisable prior to permitting the Eligible Individual to commence participation
in the Plan.

       

      
        	
                3.2  

              	
                Cessation
      of Participation

              

      

       

      If a
Termination Date occurs with respect to a Participant, or if a Participant
otherwise ceases to be an Eligible Individual, no further Compensation
Deferrals, Performance-Based Bonus Deferrals, Matching Contributions or other
Employer Contributions shall be credited to

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

        the
Participant’s Accounts after the end of the then-current Plan Year or
performance period applicable to Performance-Based Bonuses , unless he is again
determined to be an Eligible Individual, but the balance credited to his
Accounts shall continue to be adjusted for notional investment gains and losses
under the terms of the Plan and shall be distributed to him at the time and
manner set forth in Section 9.  An Employee, Board Member or Other
Service Provider shall cease to be a Participant after his Termination Date or
other loss of eligibility as soon as his entire Account balance has been
distributed.

      

       

      
        	
                3.3  

              	
                Eligibility
      for Matching or Employer
Contributions

              

      

       

      An
Employee Participant who has satisfied the requirements necessary to become an
Eligible Individual with respect to Matching Contributions as specified in the
Adoption Agreement, and who has made a Compensation Deferral election pursuant
to subsection 4.1 herein or who has satisfied such other criteria as specified
in the Adoption Agreement, shall be eligible to receive Matching Contributions
described in subsection 4.3.  An Employee Participant who has
satisfied the requirements necessary to become an Eligible Individual with
respect to Employer Contributions other than Matching Contributions as specified
in the Adoption Agreement, shall be eligible to receive Employer Contributions
described in subsection 4.4.

       

      SECTION
4     DEFERRALS AND CONTRIBUTIONS

       

      
        	
                4.1  

              	
                Compensation
      Deferrals Other Than Performance-Based Bonus
  Deferrals

              

      

       

      Each Plan
Year, an Eligible Individual may elect to defer receipt of no less than the
minimum and no greater than the maximum percentage or amount selected by the
Employer in the Adoption Agreement with respect to each type of Compensation
(other than Performance-Based Bonuses) earned with respect to pay periods
beginning on and after the effective date of the election; provided, however,
that Compensation earned prior to the date the Participant satisfies the
eligibility requirements of Section 3 shall not be eligible for deferral
under this Plan. Except as otherwise provided in this subsection, a
Participant’s Deferral Election for a Plan Year under this subsection must be
made not later than December 31 of the preceding Plan Year (or such earlier date
as determined by the Administrator) with respect to Compensation (other than
Performance-Based Bonuses) earned in pay periods beginning on or after the
following January 1 in accordance with rules established by the
Administrator.

       

      An
Employee, Board Member or Other Service Provider who first becomes an Eligible
Individual during a Plan Year (by virtue of a promotion, Compensation increase,
commencement of employment with the Employer, commencement of Board service,
execution of an agreement to provide services to an Employer, or any other
reason) shall be provided enrollment documents (including Deferral Election
forms) as soon as administratively feasible following such initial notification
of eligibility.  Such Eligible Individual
must make his Deferral Elections within 30 days after first becoming an Eligible
Individual, with respect to his Compensation (other than Performance-Based
Bonuses) earned on or after the effective date of the Deferral Election
(provided, however, that if such Eligible Individual is participating in any
other account balance plan maintained by the Employer or any member of the
Employer’s “controlled group” (as defined in subsections 414(b) and (c) of the
Code), such Eligible Individual must make his Compensation Deferral Election no
later than December 31 of the preceding Plan Year (or such 

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

        earlier
date as determined by the Administrator), or he may not elect to make
Compensation Deferrals for that initial Plan Year).  If an Eligible
Individual does not elect to make Compensation Deferrals during that initial
30-day period, he may not later elect to make Compensation Deferrals for that
year under this subsection.  In the event that an Eligible Individual
first becomes eligible during a Plan Year with respect to which Fiscal Year
Compensation is payable, such Eligible Individual must make his Fiscal Year
Compensation Deferral Election on or before the end of the fiscal year of the
Employer immediately preceding the first fiscal year in which any services are
performed for which the Fiscal Year Compensation is payable.

      

       

      In the
case of an Employee, Board Member or Other Service Provider who is rehired (or
who recommences Board Service or recommences providing services to an Employer
as an Other Service Provider) after having previously been an Eligible
Individual, the phrase “first becomes an Eligible Individual” in the first
sentence of the preceding paragraph shall be interpreted to apply only where the
Eligible Individual either (i) previously received payment of his total Account
balances under the Plan, or (ii) did not previously receive payment of his total
Account balances under the Plan, but is rehired (or recommences Board Service or
recommences providing services to an Employer as an Other Service Provider) at
least 24 months after his last day as a previously Eligible Individual prior to
again becoming such an Eligible Individual.  In all other cases such
rehired Employee, Board Member or Other Service Provider may not elect to make
Compensation Deferrals until the next date determined by the Administrator with
respect to Compensation earned after the following January
1.  Similarly, in the case of an Employee who recommences status as an
Eligible Individual for any other reason after having previously lost his status
as an Eligible Individual (due to Compensation fluctuations, transfer from an
ineligible location or job classification, or otherwise), the phrase “first
becomes an Eligible Individual” shall be interpreted to apply only where the
Eligible Individual either:  (i) previously received payment of his
total Account balances under the Plan, or (ii) did not previously receive
payment of his total Account balances under the Plan, but regains his status as
an Eligible Individual at least 24 months after his last day as a previously
Eligible Individual prior to again becoming such an Eligible
Individual.  In all other cases such Re-Eligible Participant may not
elect to make Compensation Deferrals until the next date determined by the
Administrator with respect to Compensation earned after the following January
1.

       

      An
election to make Compensation Deferrals under this subsection 4.1 shall remain
in effect through the last pay period commencing in the calendar year to which
the election applies (except as provided in Section 2.9 or subsection 4.5),
shall apply with respect to the applicable type of Compensation (other than
Performance-Based Bonuses) to which the Deferral Election relates earned for pay
periods commencing in the applicable calendar year to which the election
applies, and shall be irrevocable (provided, however, that a Participant making
a Deferral Election under this subsection may change his election at any time
prior to December 31 of the year preceding the year for which the Deferral
Election is applicable, subject to rules established by the
Administrator).   If a Participant fails to make a Compensation
Deferral election for a given Plan Year, such Participant’s Compensation
Deferral Election for that Plan Year shall be deemed to be zero; provided,
however, that if the Employer has elected in the Adoption Agreement that a
Participant’s Compensation Deferral Election shall be “evergreen”, then such
Participant’s Compensation Deferral Election shall be deemed to be identical to
the most recent 

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

        applicable
Deferral Election on file with the Administrator with respect to the applicable
type of Compensation.

      

       

      Compensation
Deferrals shall be credited to the Participant’s Compensation Deferral Account
as soon as administratively feasible after such amounts would have been payable
to the Participant.

       

      
        	
                4.2  

              	
                Performance-Based
      Bonus Deferrals

              

      

       

      Each Plan
Year, an Eligible Individual may elect to defer receipt of no less than the
minimum and no greater than the maximum percentage or amount selected by the
Employer in the Adoption Agreement with respect to Performance-Based Bonuses
earned with respect to the performance period for which the
Performance-Based  Bonus is earned; provided, however, that the
Eligible Individual performed services continuously from a date no later than
the date upon which the performance criteria are established through a date no
earlier than the date upon which the Eligible Individual makes a
Performance-Based Bonus Deferral Election; and further provided that in no event
may an election to defer Performance-Based Bonuses be made after such Bonuses
have become readily ascertainable.  Except as otherwise provided in
this subsection, a Participant’s Performance-Based Bonus Deferral Election under
this subsection must be made not later than six months (or such earlier date as
determined by the Administrator) prior to the end of the performance
period.

       

      An
Employee, Board Member or Other Service Provider who first becomes an Eligible
Individual during a Plan Year (by virtue of a promotion, Compensation increase,
commencement of employment with the Employer, commencement of Board service,
execution of an agreement to provide services to an Employer, or any other
reason) shall be provided enrollment documents (including Deferral Election
forms) as soon as administratively feasible following such initial notification
of eligibility.  Such Eligible Individual
must make his Performance-Based Bonus Deferral Election within 30 days after
first becoming an Eligible Individual (provided, however, that if such Eligible
Individual is participating in any other account balance plan maintained by the
Employer or any member of the Employer’s “controlled group” (as defined in
subsections 414(b) and (c) of the Code), such Eligible Individual must perform
services continuously from a date no later than the date upon which the
performance criteria are established, and must make his Performance-Based Bonus
Deferral Election no later than six months (or such earlier date as determined
by the Administrator) prior to the end of the performance period and at a time
when the Performance-Based Bonus is not readily ascertainable, or he may not
elect to make Performance-Based Bonus Deferrals for such initial Plan
Year).  In the case of a Deferral Election in the first year of
eligibility that is made after the beginning of the Performance-Based Bonus
performance period, the Deferral Election will apply to the portion of the
Performance-Based Bonus equal to the total amount of the Performance-Based Bonus
for the performance period multiplied by the ratio of the number of days
remaining in the performance period after the effective date of the Deferral
Election over the total number of days in the Performance Period.  If
such an Eligible Individual does not elect to make a Performance-Based Bonus
Deferral during that initial 30-day period, he may not later elect to make a
Performance-Based Bonus Deferral for that performance period under this
subsection.  Rules relating to the timing of elections to make a
Performance-Based Bonus Deferral with respect to an Employee, Board Member or
Other Service Provider who becomes an Eligible Individual (due to rehire or
other 

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

        similar
event) after having previously been an Eligible Individual shall be applied in a
manner similar to rules described applicable to rehired and other Re-Eligible
Participants in subsection 4.1 above.

      

       

      An
election to make Performance-Based Bonus Deferrals under this subsection 4.2
shall remain in effect through the end of the performance period to which the
election applies (except as provided in subsection 4.5), and shall be
irrevocable (provided, however, that as long as the Performance-Based Bonus is
not readily ascertainable, a Participant making a Performance-Based Bonus
Deferral Election under this subsection (other than a Participant who first
becomes an Eligible Individual and who makes his Deferral Election after the
beginning of the performance period and within 30 days after first becoming an
Eligible Individual) may change his election at any time prior to the first day
of the six-month period ending on the last day of the performance period for
which the Performance-Based Bonus Deferral Election is applicable, subject to
rules established by the Administrator).   If a Participant fails
to make a Performance-Based Bonus Deferral Election for a given performance
period, such Participant’s Performance-Based Bonus Deferral Election for that
performance period shall be deemed to be zero; provided, however, that if the
Employer has elected in the Adoption Agreement that a Participant’s
Performance-Based Deferral Election shall be “evergreen”, then such
Participant’s Performance-Based Bonus Deferral Election shall be deemed to be
identical to the most recent applicable Performance-Based Bonus Deferral
Election on file with the Administrator.

       

      Performance-Based
Bonus Deferrals shall be credited to the Participant’s
Compensation  Deferral Account as soon as administratively feasible
after such amounts would have been payable to the Participant.

       

      
        	
                4.3  

              	
                Matching
      Contributions

              

      

       

      Matching
Contributions shall be discretionary from year to year, shall be determined in
accordance with the formula specified in the Adoption Agreement, and shall be
credited to the Employer Contribution Accounts of Participants who have
satisfied the eligibility requirements for Matching Contributions specified in
the Adoption Agreement.  Matching Contributions under this Plan shall
be credited to such Participants’ Employer Contribution Accounts as soon as
administratively feasible after the Applicable Period selected in the Adoption
Agreement, but only with respect to Participants eligible to receive such
Matching Contributions as described in the Adoption Agreement.

       

      
        	
                4.4  

              	
                Other
      Employer Contributions

              

      

       

      Employer
Contributions other than Matching Contributions shall be discretionary from year
to year, and shall be credited to the Employer Contribution Accounts of
Participants who have satisfied the eligibility requirements for Employer
Contributions, all as determined by the Employer and documented in writing, and
such writings will form part of the Plan, as specified in the Adoption
Agreement.  Employer Contributions under this Plan shall be credited
to such Participants’ Employer Contributions Accounts as soon as
administratively feasible.

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      
        	
                4.5  

              	
                No
      Election Changes During Plan Year

              

      

       

      A
Participant shall not be permitted to change or revoke his Deferral Elections
(except as otherwise described in subsections 4.1 and 4.2), except that, if a
Participant’s status changes such that he becomes ineligible for the Plan, the
Participant’s Deferrals under the Plan shall cease as described in subsection
3.2.  Notwithstanding
the foregoing, in the event the Employer maintains a qualified plan designed to
comply with the requirements of Code Section 401(k) that requires the cessation
of all deferrals in the event of a hardship withdrawal under such plan, the
Participant’s Deferrals under this Plan shall cease and be cancelled as soon as
administratively feasible upon notification to the Administrator that the
participant has taken such a hardship withdrawal.  Notwithstanding the
foregoing, if the Employer has elected in the Adoption Agreement to permit
Unforeseeable Emergency Withdrawals pursuant to subsection 9.8, the
Participant’s Deferrals under this Plan shall cease and be cancelled as soon as
administratively feasible upon approval by the Administrator of a Participant’s
properly submitted request for an Unforeseeable Emergency Withdrawal under
subsection 9.8.

       

      
        	
                4.6  

              	
                Crediting
      of Deferrals

              

      

       

      The
amount of deferrals pursuant to subsections 4.1 and 4.2 shall be credited to the
Participant’s Accounts as of a date determined to be administratively feasible
by the Administrator.

       

      
        	
                4.7  

              	
                Reduction
      of Deferrals or Contributions

              

      

       

      Any
Participant Deferrals or Employer Contributions to be credited to a
Participant’s Account under this Section may be reduced by an amount equal to
the Federal, state, local or foreign income, payroll, or other taxes required to
be withheld on such deferrals or contributions .  A Participant shall
be entitled only to the net amount of such deferral or contribution (as adjusted
from time to time pursuant to the terms of the Plan).

       

      SECTION
5     NOTIONAL INVESTMENTS

       

      
        	
                5.1  

              	
                Investment
      Funds

              

      

       

      The
Employer may designate, in its discretion, one or more Investment Funds for the
notional investment of Participants’ Accounts.  The Employer, in its
discretion, may from time to time establish new Investment Funds or eliminate
existing Investment Funds.  The Investment Funds are for recordkeeping
purposes only and do not allow Participants to direct any Employer assets
(including, if applicable, the assets of any trust related to the
Plan).  Each Participant’s Accounts shall be adjusted pursuant to the
Participant’s notional investment elections made in accordance with this Section
5, except as otherwise determined by the Employer or Administrator in their sole
discretion.

       

      
        	
                5.2  

              	
                Investment
      Fund Elections

              

      

       

      The
Employer shall have full discretion in the direction of notional investments of
Participants’ Accounts under the Plan; provided, however, that if the Employer
so elects in the Adoption Agreement, each Participant may elect from among the
Investment Funds for the 

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

        notional
investment of such of his Accounts as are permitted under the Adoption Agreement
from time to time in accordance with procedures established by the
Employer.  The Administrator, in its discretion, may adopt (and may
modify from time to time) such rules and procedures as it deems necessary or
appropriate to implement the notional investment of the Participant’s
Accounts.  Such procedures may differ among Participants or classes of
Participants, as determined by the Employer or the Administrator in its
discretion.  The Employer or Administrator may limit, delay or
restrict the notional investment of certain Participants’ Accounts, or restrict
allocation or reallocation into specified notional investment options, in
accordance with rules established in order to comply with Employer policy and
applicable law,  to minimize regulated filings and disclosures, or
under any other circumstances in the discretion of the Employer.  Any
deferred amounts subject to a Participant’s investment election that must be so
limited, delayed or restricted under such circumstances may be notionally
invested in an Investment Fund designated by the Administrator, or may be
credited with earnings at a rate determined by the Administrator, which rate may
be zero.  A Participant’s notional investment election shall remain in
effect until later changed in accordance with the rules of the
Administrator.  If a Participant does not make a notional investment
election, all deferrals by the Participant and contributions on his behalf will
be deemed to be notionally invested in the Investment Fund designated by the
Employer for such purpose, or, at the Employer’s election, may remain uninvested
until such time as the Administrator receives proper direction, or may be
credited with earnings at a rate determined by the Administrator or Employer,
which rate may be zero.

      

       

      
        	
                5.3  

              	
                Investment
      Fund Transfers

              

      

       

      A
Participant may elect that all or a part of his notional interest in an
Investment Fund shall be transferred to one or more of the other Investment
Funds.  A Participant may make such notional Investment Fund transfers
in accordance with rules established from time to time by the Employer or the
Administrator, and in accordance with subsection 5.2.

       

      SECTION
6     ACCOUNTING

       

      
        	
                6.1  

              	
                Individual
      Accounts

              

      

       

      Bookkeeping
Accounts shall be maintained under the Plan in the name of each Participant, as
applicable, along with any subaccounts under such Accounts deemed necessary or
advisable from time to time, including a subaccount for each Plan Year that a
Participant’s Deferral Election is in effect.  Each such subaccount
shall reflect (i) the amount of the Participant’s Deferral during that year, any
Matching Contributions or Employer Contributions credited during that year, and
the notional gains, losses, expenses, appreciation and depreciation attributable
thereto.

       

      Rules and procedures may be established
relating to the maintenance, adjustment, and liquidation of Participants’
Accounts, the crediting of deferrals and contributions and the notional gains,
losses, expenses, appreciation, and depreciation attributable thereto, as are
considered necessary or advisable.

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      
        	
                6.2  

              	
                Adjustment
      of Accounts

              

      

       

      Pursuant
to rules established by the Employer,  Participants’ Accounts will be
adjusted on each Valuation Date, except as provided in Section 9, to reflect the
notional value of the various Investment Funds as of such date, including
adjustments to reflect any deferrals and contributions, notional transfers
between Investment Funds, and notional gains, losses, expenses, appreciation, or
depreciation with respect to such Accounts since the previous Valuation
Date.  The “value” of an Investment Fund at any Valuation Date may be
based on the fair market value of the Investment Fund, as determined by the
Administrator in its sole discretion.

       

      
        	
                6.3  

              	
                Accounting
      Methods

              

      

       

      The
accounting methods or formulae to be used under the Plan for purposes of
monitoring Participants’ Accounts, including the calculation and crediting of
notional gains, losses, expenses, appreciation, or depreciation, shall be
determined by the Administrator in its sole discretion.  The
accounting methods or formulae selected by the Administrator may be revised from
time to time.

       

      
        	
                6.4  

              	
                Statement
      of Account

              

      

       

      At such
times and in such manner as determined by the Administrator, but at least
annually, each Participant will be furnished with a statement reflecting the
condition of his Accounts.

       

      SECTION
7     VESTING

       

      A
Participant shall be fully vested at all times in his Compensation Deferral
Account (if applicable).  A Participant shall be vested in his
Matching Contributions and/or Employer Contributions (if applicable), in
accordance with the vesting schedule elected by the Employer under the Adoption
Agreement.  Vesting Years of Service shall be determined in accordance
with the election made by the Employer in the Adoption
Agreement.  Amounts in a Participant’s Accounts that are not vested
upon the Participant’s Termination Date  shall be
forfeited.

       

      If a
Participant has a Termination Date with the Employer as a result of the
Participant’s Misconduct (as defined by the Employer in the Adoption Agreement),
or if the Participant engages in Competition with the Employer (as defined by
the Employer in the Adoption Agreement), and the Employer has so elected in the
Adoption Agreement, the Participant shall forfeit all amounts allocated to his
or her Matching Contribution Account and/or Employer Contribution Accounts (if
applicable).

       

      Neither
the Administrator nor the Employer in any way guarantee the Participant’s
Account balance from loss or depreciation.  Notwithstanding any
provision of the Plan to the contrary, the Participant’s Account balance is
subject to Section 8.

       

      Vesting
Years of Service in the event of the rehire of a Participant shall be
reinstated.

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      SECTION
8     FUNDING

       

      No
Participant or other person shall acquire by reason of the Plan any right in or
title to any assets, funds, or property of the Employer whatsoever, including,
without limiting the generality of the foregoing, any specific funds, assets, or
other property of the Employer.  Benefits under the Plan are unfunded
and unsecured.  A Participant shall have only an unfunded, unsecured
right to the amounts, if any, payable hereunder to that
Participant.  The Employer’s obligations under this Plan are not
secured or funded in any manner, even if the Employer elects to establish a
trust with respect to the Plan.  Even though benefits provided under
the Plan are not funded, the Employer may establish a trust to assist in the
payment of benefits.  All investments under this Plan are notional and
do not obligate the Employer (or its delegates) to invest the assets of the
Employer or of any such trust in a similar manner.

       

      SECTION
9     DISTRIBUTION OF ACCOUNTS

       

      
        	
                9.1  

              	
                Distribution
      of Accounts 

              

      

       

      A
Participant’s vested Account balances shall be distributed to the Participant
upon the first to occur of the Participant’s Termination Date, Disability or a
Change in Control of the Employer, to the extent that each such event is
designated as a payment event by the Employer in the Adoption Agreement. To the
extent designated by the Employer in the Adoption Agreement, a Participant may
elect one time and form of payment that will apply if the Participant’s
Termination Date occurs as a result of Retirement or Early Retirement, and
another time and form of payment that will apply if the Participant’s
Termination Date occurs for any other reason, however the time and form of
payment for Retirement and Early Retirement must be the same.  In
addition, to the extent designated by the Employer in the Adoption Agreement, if
distribution of the Participant’s vested Account balances is triggered by the
Participant’s Termination Date or Disability, the Participant may elect to have
any unpaid amounts become payable in a single lump sum payment upon an
intervening Change in Control of the Employer that occurs before the
Participant’s entire vested Account balances is paid.

       

       The
Participant’s vested Account balances shall be distributed to the Participant
(or, in the case of the Participant’s death, to the Participant’s Beneficiary),
in the form of a single lump sum payment, or, if subsection 9.2 applies, in the
form of installment payments as designated by the Employer in the Adoption
Agreement.  Subject to subsection 9.3 hereof, distribution of a
Participant’s Accounts shall be made within the 90-day period following the
occurrence of a distribution event  (provided, however, that if
calculation of the amount of the payment is not administratively practicable due
to events beyond the control of the Participant, the payment will be made as
soon as administratively practicable for the Administrator to make such
payment).    Notwithstanding any provision of the Plan to
the contrary, for purposes of this subsection, a Participant’s Accounts shall be
valued as of a Valuation Date as soon as administratively feasible preceding the
date such distribution is made, in accordance with rules established by the
Administrator.  A Participant’s Accounts may be offset by any amounts
owed by the Participant to the Employer, but such offset shall not occur in
excess of or prior to the date distribution of the amount would otherwise be
made to the Participant.

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      Notwithstanding
the foregoing, to the extent designated by the Employer in the Adoption
Agreement, a Participant may elect, in accordance with this subsection, a
distribution date for his Compensation Deferral Accounts that is prior to either
his Termination Date, Disability or a Change in Control  (an
“In-Service Distribution”).  A Participant’s election of an In-Service
Distribution date must: (i) be made at the time of his Deferral Election for a
Plan Year; and (ii) apply only to amounts deferred pursuant to that election,
and any earnings, gains, losses, appreciation, and depreciation credited thereto
or debited therefrom with respect to such amounts.  The Employer may
limit the number of In-Service Distribution dates permitted for Participants to
elect under the Plan. Payments made pursuant to an In-Service Distribution
election shall be made in a lump sum or installments, to the extent elected by
the Employer in the Adoption Agreement.  Each such payment pursuant to
an In-Service Distribution election shall be made as soon as administratively
feasible following January 1 of the calendar year in which the payment was
elected to be made, but in no event later than the end of the calendar year in
which the payment was elected to be made (provided, however, that if calculation
of the amount of the payment is not administratively practicable due to events
beyond the control of the Participant, the payment will be made as soon as
administratively practicable for the Administrator to make such
payment).  For purposes of such payment, the value of the
Participant’s Accounts for the applicable Plan Year shall be determined as of a
Valuation Date preceding the date that such distribution is made, in accordance
with rules established by the Administrator.  In the event a
Participant’s Termination Date occurs (or, if elected by the Employer in the
Adoption Agreement, in the event Disability or a Change in Control of the
Employer occurs) prior to the date the Participant had previously elected to
have an In-Service Distribution payment made to him, such amount shall be paid
to the Participant under the rules applicable for payment on Termination of
Employment (or, if elected by the Employer in the Adoption Agreement, for
payment on Disability or a Change in Control) in accordance with this subsection
9.1 and subsection 9.2.  In addition, to the extent designated by the
Employer in the Adoption Agreement, if distribution of the Participant’s vested
Account balances is triggered by an In-Service Distribution Election, the
Participant may elect to have any unpaid amounts become payable in a single lump
sum payment upon an intervening Change in Control of the Employer that occurs
before the Participant’s entire vested Account balances attributable to the
In-Service Distribution election is paid.

       

      To the
extent elected by the Employer in the Adoption Agreement, Participants whose
Termination Date has not yet occurred may elect to defer payment of any
In-Service Distribution (whether paid in a lump sum or installments), provided
that such election is made in accordance with procedures established by the
Administrator, and further provided that any such election must be made no later
than 12 calendar months prior to the first originally elected In-Service
Distribution Date (which for these purposes shall be January 1 of the calendar
year in which the payment was elected to be made).  Participants may
elect any deferred payment date, but such date must be no fewer than five years
from the first original In-Service Distribution Date (which for these purposes
shall be January 1 of the calendar year in which the payment was elected to be
made).

       

      
        	
                9.2  

              	
                Installment
      Distributions 

              

      

       

      To the
extent elected by the Employer in the Adoption Agreement, upon a Termination
Date or Disability, a Participant may elect to receive payments from his
Accounts in the form of 

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

        a single
lump sum, as described in Section 9.1, or in annual  installments
over a period elected by the Employer in the Adoption Agreement.  To
the extent a Participant fails to make an election, the Participant shall be
deemed to have elected to receive his distribution for that Plan Year in the
form of a single lump sum.  To the extent elected by the Employer in
the Adoption Agreement, a Participant may make a separate election with respect
to his Performance-Based Bonus Deferrals for each year (as adjusted for gains
and losses thereon) that provides for a different method of distribution from
the method of distribution he elects with respect to his Compensation Deferrals
(as adjusted for gains and losses thereon) for that year.  The
Participant’s Employer Contributions Account attributable to such year, if any
(as adjusted for gains and losses thereon), shall be distributed in the same
manner as his Compensation Deferral Account for such year (and if no election
has been made for the Compensation Deferral Account for such year, in a single
lump sum payment triggered by the Termination Date).

      

       

      
        	
                (a)  

              	
                Installment
      Elections.  A Participant will be required to make his
      distribution election in accordance with the deferral election timing and
      other requirements of Section 4 .

              

      

       

      
        	
                (b)  

              	
                Installment
      Payments.  The first installment payment
      shall  be made within the 90-day period following the
      Participant’s Termination Date or, if elected by the Employer in the
      Adoption Agreement, Disability (provided, however, that if calculation of
      the amount of the payment is not administratively practicable due to
      events beyond the control of the Participant, the payment will be made as
      soon as administratively practicable for the Administrator to make such
      payment).  Succeeding payments shall generally be made as soon
      as administratively practicable following  January 1 of each
      succeeding calendar year following the calendar year in which the
      Participant’s Termination Date or, if elected by the Employer in the
      Adoption Agreement, Disability occurs , but in no event later than the end
      of each succeeding calendar year (provided, however, that if calculation
      of the amount of the payment is not administratively practicable due to
      events beyond the control of the Participant, the payment will be made as
      soon as administratively practicable for the Administrator to make such
      payment). The amount to be distributed in each installment payment shall
      be determined by dividing the value of the Participant’s Accounts being
      paid in installments as of a Valuation Date preceding the date of each
      distribution by the number of installment payments remaining to be made,
      in accordance with rules established by the Administrator.  In
      the event of the death of the Participant prior to the full payment of his
      Accounts being paid in installments, payments will continue to be made to
      his Beneficiary in the same manner and at the same time as would have been
      payable to the Participant.

              

      

       

      To the
extent elected by the Employer in the Adoption Agreement, Participants who have
elected payment in installments may make a subsequent election to elect payment
of that amount in the form of a lump sum or in a different number of installment
payments (but no fewer than the minimum number, and not to exceed the maximum
number of installments elected by the Employer in the Adoption Agreement), if
payment of installments with respect to that year’s deferrals has not yet
commenced.  Such election must be made in accordance with procedures
established by the Administrator, and any such election must not take effect
until at least 12 

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

        months
after the date on which the election is made and must be made no later than 12
calendar months prior to the originally elected payment date of the first
installment (which for these purposes shall be the first day on which payment
could be made).  The new payment date for the installments with
respect to which such election is made must be deferred to a date no fewer than
five years from the date the first such installment payment would otherwise have
been made (which for these purposes shall be the first day on which payment
could be made).  .  Participants will be permitted to make
such a change only once with respect to any year’s Deferral
Elections.

      

       

      
        	
                9.3  

              	
                Key
      Employees

              

      

       

      Notwithstanding
anything herein to the contrary, and subject to Code Section 409A, except in the
case of the Participant’s death, payment under the Plan shall not be made or
commence as a result of the Participant’s Termination Date to any Participant
who is a key employee (defined below) before the date that is not less than six
months after the Participant’s Termination Date.  For this purpose, a
key employee is a “specified employee” as defined in Treasury Regulation Section
1.409A-1(i).  In the event amounts are payable to a key employee in
installments in accordance with subsection 9.2, the first installment shall be
delayed by six months, with all other installment payments payable as originally
scheduled.  To the extent not otherwise designated by the Employer in
a separate document forming a part of the Plan applicable to all its
nonqualified deferred compensation plans, the identification date for
determining the Employer’s key employees is each December 31 (and the new key
employee list is updated and effective each subsequent April 1).  To
the extent not otherwise designated by the Employer in a separate document
forming a part of the Plan, the definition of compensation used to determine key
employee status shall be determined under Treasury Regulation Section
1.415(c)-2(a).  This subsection 9.3 is applicable only with respect to
Employers whose stock is publicly traded on an “established securities market”
(as defined in Treasury Regulation Section 1.409A-1(k)), and is not applicable
to privately held Employers unless and until such Employers become publicly
traded as defined in the Treasury regulations.

       

      
        	
                9.4  

              	
                Mandatory
      Cash-Outs of Small Amounts

              

      

       

      If the
value of a Participant’s total Accounts at his Termination Date (or his death or
other applicable distribution date) or at any time thereafter, together with the
value of the Participant’s accounts under any other account balance plan
maintained by the Employer or any member of the Employer’s “controlled group”
(as defined in subsections 414(b) and (c) of the Code), is equal to or less than
such amount as stated in the Adoption Agreement (which amount shall not exceed
the limit described in Section 402(g)(1)(B) of the Code from time to time), the
Accounts will be paid to the Participant (or, in the event of his death, his
Beneficiary) in a single lump sum, notwithstanding any election by the
Participant otherwise.  Payments made under this subsection 9.4 shall
be made as soon as administratively practicable once the value of the Accounts
reaches the applicable threshold.

       

      
        	
                9.5  

              	
                Designation
      of Beneficiary

              

      

       

      Each
Participant from time to time may designate any individual, trust, charity or
other person or persons to whom the value of the Participant’s Accounts (plus
any applicable Survivor Benefit, if elected by the Employer in the Adoption
Agreement) will be paid in the event the

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

        Participant
dies before receiving the value of all of his Accounts.  A Beneficiary
designation must be made in the manner required by the Administrator for this
purpose.  Primary and secondary Beneficiaries are permitted. A married
participant designating a Beneficiary other than his Spouse must obtain the
consent of his Spouse to such designation (in accordance with rules determined
by the Administrator). Payments to the Participant’s Beneficiary(ies) shall be
made in accordance with subsection 9.1, 9.2  or 9.4, as applicable,
after the Administrator has received proper notification of the Participant’s
death.

      

       

      A
Beneficiary designation will be effective only when the Beneficiary designation
is filed with the Administrator while the Participant is alive, and a subsequent
Beneficiary designation will cancel all of the Participant’s Beneficiary
designations previously filed with the Administrator.  Any designation
or revocation of a Beneficiary shall be effective  only if it is
received by the Administrator.  Once received, such designation shall
be effective as of the date the designation was executed, but without prejudice
to the Administrator on account of any payment made before the change is
recorded by the Administrator.  If a Beneficiary dies before payment
of the Participant’s Accounts have been made, the Participant’s Accounts shall
be distributed in accordance with the Participant’s Beneficiary designation and
pursuant to rules established by the Administrator.  If a deceased
Participant failed to designate a Beneficiary, or if the designated Beneficiary
predeceases the Participant, the value of the Participant’s Accounts shall be
payable to the Participant’s Spouse or, if there is none, to the Participant’s
estate, or in accordance with such other equitable procedures as determined by
the Administrator.

       

      
        	
                9.6  

              	
                Reemployment

              

      

       

      If a
former Participant is rehired by an Employer, or any affiliate or subsidiary of
the Employer described in Section 414(b) and (c) of the Code and Treasury
Regulation Section 1.409A-1(h), regardless of whether he is rehired as an
Eligible Individual (with respect to an Employee Participant), or a former
Participant returns to service as a Board member, any payments being made to
such Participant hereunder by virtue of his previous Termination Date shall
continue to be made to him without regard to such
rehire.    If a former Participant is rehired by the
Employer (with respect to an Employee Participant) or returns to service as a
Board member, and in either case any payments to be made to the Participant by
virtue of his previous Termination Date have not been made or commenced, any
payments being made to such Participant hereunder by virtue of his previous
Termination Date shall continue to be made to him without regard to such rehire
or return to service.  See subsections 4.1 and 4.2 of the Plan for
special rules applicable to deferral elections for rehired or Re-Eligible
Participants.

       

      
        	
                9.7  

              	
                Special
      Distribution Rules

              

      

       

      Except as
otherwise provided herein and in Section 12, Account balances of Participants in
this Plan shall not be distributed earlier than the applicable date or dates
described in this Section 9.  Notwithstanding the foregoing, in the
case of payments:  (i) the deduction for which would be limited or
eliminated by the application of Section 162(m) of the Code; (ii) that would
violate securities or other applicable laws; or (iii) that would jeopardize the
ability of the Employer to continue as a going concern in accordance with Code
Section 409A and the regulations thereunder, deferral of such payments may be
made by the Employer at the Employer’s discretion, so long as the Employer
treats all payments to similarly situated

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

        Participants
in a reasonably consistent basis. In the case of a payment described in (i)
above, the payment must be deferred either to a date in the first year in which
the Employer or Administrator reasonably anticipates that a payment of such
amount would not result in a limitation of a deduction with respect to the
payment of such amount under Section 162(m), or the year in which the
Participant’s Termination Date occurs.  In the case of a payment
described in (ii) or (iii) above, payment will be made at the earliest date at
which the Employer or Administrator reasonably anticipates that the payment
would not jeopardize the ability of the Employer to continue as a going concern
in accordance with Code Section 409A and the regulations thereunder, or the
payment would not result in a violation of securities or other applicable
laws.  Payments intended to pay employment taxes or payments made as a
result of income inclusion of an amount in a Participant’s Accounts as a result
of a failure to satisfy Section 409A of the Code shall be permitted at the
Employer or Administrator’s discretion at any time and to the extent provided in
Treasury Regulations under Section 409A of the Code  and any
applicable subsequent guidance.  “Employment taxes” shall include
Federal Insurance Contributions Act (FICA) tax imposed under Sections 3101,
3121(a) and 3121(v)(2) of the Code on compensation deferred under the Plan (the
“FICA Amount”), the income tax imposed under Section 3401 of the Code or
corresponding provisions of applicable state, local or foreign tax laws on the
FICA Amount, and to pay the additional income tax under Section 3401 of the Code
or corresponding provisions of applicable state, local or foreign tax laws
attributable to the pyramiding Section 3401 wages and
taxes.    With respect to a subchapter S corporation, a
distribution may be accelerated to avoid a nonallocation year under Code Section
409(p) with respect to a subchapter S corporation in the discretion of the
Employer or Administrator, provided that the amount distributed does not exceed
125 percent of the minimum amount of distribution necessary to avoid the
occurrence of a nonallocation year, in accordance with Treasury Regulation
Section 1.409A-3(j)(4)(x).

      

       

      
        	
                9.8  

              	
                Distribution
      on Account of Unforeseeable
Emergency

              

      

       

      If
elected by the Employer in the Adoption Agreement, if a
Participant  incurs a severe financial hardship of the type described
below, he may request an Unforeseeable Emergency Withdrawal, provided that the
withdrawal is necessary in light of severe financial needs of the Participant
..  To the extent elected by the Employer in the Adoption Agreement,
the ability to apply for an Unforeseeable Emergency Withdrawal may be restricted
to Participants whose Termination Date has not yet occurred.  Such a
withdrawal shall not exceed the amount required (including anticipated taxes on
the withdrawal) to meet the severe financial need and not reasonably available
from other resources of the Participant (including reimbursement or compensation
by insurance, cessation of deferrals under this Plan for the remainder of the
Plan Year, and liquidation of the Participant’s assets, to the extent
liquidation itself would not cause severe financial hardship).  Each
such withdrawal election shall be made at such time and in such manner as the
Administrator shall determine, and shall be effective in accordance with such
rules as the Administrator shall establish and publish from time to
time.  Severe financial needs are limited to amounts necessary
for:

       

      
        	
                (a)  

              	
                A
      sudden unexpected illness or accident incurred by the Participant, his
      Spouse, Beneficiary or dependents (as defined in Code Section
      152(a)).

              

      

       

      
        	
                (b)  

              	
                Uninsured
      casualty loss pertaining to property owned by the
    Participant.

              

      

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      
        	
                (c)  

              	
                Other
      similar extraordinary and unforeseeable circumstances involving an
      uninsured loss arising from an event outside the control of the
      Participant.

              

      

       

      Withdrawals
of amounts under this subsection shall be paid to the Participant in a lump sum
as soon as administratively feasible following receipt of the appropriate forms
and information required by and acceptable to the Administrator.

       

      
        	
                9.9  

              	
                Distribution
      Upon Change in Control

              

      

       

      In the
event of the occurrence of a Change in Control of the Employer or a member of
the Employer’s controlled group (as designated by the Employer in the Adoption
Agreement, and to the extent certified by the Administrator that a Change in
Control has occurred, which certification shall be strictly ministerial and not
involve any discretionary authority), distributions shall be made to
Participants to the extent elected by the Employer in the Adoption Agreement, in
the form elected by the Participants as if a Termination Date had occurred with
respect to each Participant, or as otherwise specified by the Employer in the
Adoption Agreement.   The Change in Control shall relate
to:  (i)  the corporation for whom the Participant is
performing services at the time of the Change in Control event; (ii) the
corporation that is liable for the payment from the Plan to the Participant (or
all corporations so liable if more than one corporation is liable); (iii) a
corporation that is a majority shareholder of a corporation described in (i) or
(ii) above; or (iv) any corporation in a chain of corporations in which each
such corporation is a majority shareholder of another corporation in the chain,
ending in a corporation described in (i) or (ii) above, as elected by the
Employer in the Adoption Agreement.  A “majority shareholder” for
these purposes is a shareholder owning more than 50% of the total fair market
value and total voting power of such corporation.  Attribution rules
described in section 318(a) of the Code apply to determine stock
ownership.  Stock underlying a vested option  is considered
owned by the individual who holds the
vested  option.  Notwithstanding the foregoing, if a vested
option is exercisable for stock that is not substantially vested (as defined in
section 1.83-3(b) and (j) of the Code), the stock underlying the option is not
treated as owned by the individual who holds the
option.    To the extent designated by the Employer in the
Adoption Agreement, the Change in Control shall occur upon the date that: (v) a
person or “Group” (as defined in Treasury Regulation Sections
1.409A-3(i)(5)(v)(B) and (vi)(D)) acquires more than 50% of the total fair
market value or voting power of stock of the corporation designated in (i)
through (iv) above; (vi) a person or Group acquires ownership (“effective
control”) of stock of the corporation with at least 30% of the total voting
power of the corporation designated in (i) through (iv) above and as further
limited by Treasury Regulation Section 1.409A-3(i)(5)(vi)); (vii) a majority of
the board of directors of any corporation designated in (i) through (iv) above
for which no other corporation is a majority shareholder is replaced during any
12-month period by directors whose appointment or election is not endorsed by a
majority of the board as constituted prior to the appointment or election; or
(viii) a person or Group acquires assets from the corporation designated in (i)
through (iv) above having a total fair market value of at least 40% of the value
of all assets of the corporation immediately prior to such acquisition; as
designated by the Employer in the Adoption Agreement.

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      An
increase in the percentage of stock owned by any one person, or persons acting
as a Group, as a result of a transaction in which the corporation acquires its
stock in exchange for property will be treated as an acquisition of stock for
purposes of this subsection.  For purposes of (v) through (viii)
above, a Change in Control shall be further limited in accordance with Treasury
Regulation Sections 1.409A-3(i)(5)(v), (vi) and (vii).  Supplemental Survivor Death
Benefit

       

      A supplemental survivor death benefit
shall be paid to the Beneficiary of an eligible Participant who has satisfied
the following criteria prior to his death:  

       

      
        	
                (a)  

              	
                The
      Participant is eligible to participate in the Plan and, at the time of his
      death, had a current Account balance (regardless of whether or not the
      Participant actually was making Compensation Deferrals at the time of his
      death);

              

      

       

      
        	
                (b)  

              	
                The
      Participant was an active Employee with the Employer at the time of his
      death;

              

      

       

      
        	
                (c)  

              	
                The
      Participant completed and submitted an insurance application to the
      Administrator; and

              

      

       

      
        	
                (d)  

              	
                The
      Employer subsequently purchased an insurance policy on the life of the
      Participant, with a death benefit payable,  which policy is in
      effect at the time of the Participant’s
death.

              

      

       

      Notwithstanding
any provision of this Plan or any other document to the contrary, the
supplemental survivor death benefit payable pursuant to this
Subsection 9.10 shall be paid only if an insurance policy has been issued
on the Participant’s life and such policy is in force at the time of the
Participant’s death and the Employer shall have no obligation with respect to
the payment of the supplemental survivor death benefit, or to maintain an
insurance policy for any Participants.

       

      SECTION
10     GENERAL PROVISIONS

       

      
        	
                10.1  

              	
                Interests
      Not Transferable

              

      

       

      The
interests of persons entitled to benefits under the Plan are not subject to
their debts or other obligations and, except as may be required by the tax
withholding provisions of the Code or any state’s income tax act, may not be
voluntarily or involuntarily sold, transferred, alienated, assigned, or
encumbered; provided, however, that a Participant’s interest in the Plan may be
transferable pursuant to a qualified domestic relations order, as defined in
Section 414(p) of the Code to the extent designated by the Employer in the
Adoption Agreement.

       

      
        	
                10.2  

              	
                Employment
      Rights

              

      

       

      The Plan
does not constitute a contract of employment, and participation in the Plan
shall not give any Employee the right to be retained in the employ of an
Employer, nor any right or claim to any benefit under the Plan, unless such
right or claim has specifically accrued under the 

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

        terms of
the Plan.  The Employer expressly reserves the right to discharge any
Employee at any time.

      

       

      
        	
                10.3  

              	
                Litigation
      by Participants or Other Persons

              

      

       

      If a
legal action begun against the Administrator (or any member or former member
thereof), an Employer, or any person or persons to whom an Employer or the
Administrator has delegated all or part of its duties hereunder, by or on behalf
of any person results adversely to that person, or if a legal action arises
because of conflicting claims to a Participant’s or other person’s benefits, the
cost to the Administrator (or any member or former member thereof), the Employer
or any person or persons to whom the Employer or the Administrator has delegated
all or part of its duties hereunder of defending the action may be charged to
the extent permitted by law to the sums, if any, which were involved in the
action or were payable to the Participant or other person
concerned.

       

      
        	
                10.4

              	
                Indemnification

              

      

       

      To the
extent permitted by law, the Employer shall indemnify each member of the
Administrator committee, and any other employee or member of the Board with
duties under the Plan, against losses and expenses (including any amount paid in
settlement) reasonably incurred by such person in connection with any claims
against such person by reason of such person’s conduct in the performance of
duties under the Plan, except in relation to matters as to which such person has
acted fraudulently or in bad faith in the performance of
duties.  Notwithstanding the foregoing, the Employer shall not
indemnify any person for any expense incurred through any settlement or
compromise of any action unless the Employer consents in writing to the
settlement or compromise.

       

      
        	
                10.5  

              	
                Evidence

              

      

       

      Evidence
required of anyone under the Plan may be by certificate, affidavit, document, or
other information which the person acting on it considers pertinent and
reliable, and signed, made, or presented by the proper party or
parties.

       

      
        	
                10.6  

              	
                Waiver
      of Notice

              

      

       

      Any
notice required under the Plan may be waived by the person entitled to such
notice.

       

      
        	
                10.7  

              	
                Controlling
      Law

              

      

       

      Except to
the extent superseded by laws of the United States, the laws of the state
indicated by the Employer in the Adoption Agreement shall be controlling in all
matters relating to the Plan.

       

      
        	
                10.8  

              	
                Statutory
      References

              

      

       

      Any
reference in the Plan to a Code section or a section of ERISA, or to a section
of any other Federal law, shall include any comparable section or sections of
any future legislation that amends, supplements, or supersedes that
section.

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      
        	
                10.9  

              	
                Severability

              

      

       

      In case
any provision of the Plan shall be held illegal or invalid for any reason, such
illegality or invalidity shall not affect the remaining provisions of the Plan,
and the Plan shall be construed and enforced as if such illegal and invalid
provision had never been set forth in the Plan.

       

      
        	
                10.10  

              	
                Action
      By the Employer or the
Administrator

              

      

       

      Any
action required or permitted to be taken by the Employer under the Plan shall be
by resolution of its Board of Directors (which term shall include any similar
governing body for any Employer that is not a corporation), by resolution or
other action of a duly authorized committee of its Board of Directors, or by
action of a person or persons authorized by resolution of its Board of Directors
or such committee.  Any action required or permitted to be taken by
the Administrator under the Plan shall be by resolution or other action of the
Administrator or by a person or persons duly authorized by the
Administrator.

       

      
        	
                10.11  

              	
                Headings
      and Captions

              

      

       

      The
headings and captions contained in this Plan are inserted only as a matter of
convenience and for reference, and in no way define, limit, enlarge, or describe
the scope or intent of the Plan, nor in any way shall affect the construction of
any provision of the Plan.

       

      
        	
                10.12  

              	
                Gender
      and Number

              

      

       

      Where the
context permits, words in the masculine gender shall include the feminine and
neuter genders, the singular shall include the plural, and the plural shall
include the singular.

       

      
        	
                10.13  

              	
                Examination
      of Documents

              

      

       

      Copies of
the Plan and any amendments thereto are on file at the office of the Employer
where they may be examined by any Participant or other person entitled to
benefits under the Plan during normal business hours.

       

      
        	
                10.14  

              	
                Elections

              

      

       

      Each
election or request required or permitted to be made by a Participant (or a
Participant’s Spouse or Beneficiary) shall be made in accordance with the rules
and procedures established by the Employer or Administrator and shall be
effective as determined by the Administrator.  The Administrator’s
rules and procedures may address, among other things, the method and timing of
any elections or requests required or permitted to be made by a Participant (or
a Participant’s Spouse or Beneficiary).  All elections under the Plan
shall comply with the requirements of the Uniformed Services Employment and
Reemployment Rights Act of 1994, as amended (“USERRA”).

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      
        	
                10.15  

              	
                Manner
      of Delivery

              

      

       

      Each
notice or statement provided to a Participant shall be delivered in any manner
established by the Administrator and in accordance with applicable law,
including, but not limited to, electronic delivery.

       

      
        	
                10.16  

              	
                Facility
      of Payment

              

      

       

      When a
person entitled to benefits under the Plan is a minor, under legal disability,
or is in any way incapacitated so as to be unable to manage his financial
affairs, the Administrator may cause the benefits to be paid to such person’s
guardian or legal representative.  If no guardian or legal
representative has been appointed, or if the Administrator so determines in its
sole discretion, payment may be made to any person as custodian for such
individual under any applicable state law, or to the legal representative of
such person for such person’s benefit, or the Administrator may direct the
application of such benefits for the benefit of such person.  Any
payment made in accordance with the preceding sentence shall be a full and
complete discharge of any liability for such payment under the
Plan.

       

      
        	
                10.17  

              	
                Missing
      Persons

              

      

       

      The
Employer and the Administrator shall not be required to search for or locate a
Participant, Spouse, or Beneficiary.  Each Participant, Spouse, and
Beneficiary must file with the Administrator, from time to time, in writing the
Participant’s, Spouse’s, or Beneficiary’s post office address and each change of
post office address.  Any communication, statement, or notice
addressed to a Participant, Spouse, or Beneficiary at the last post office
address filed with the Administrator, or if no address is filed with the
Administrator, then in the case of a Participant, at the Participant’s last post
office address as shown on the Employer’s records, shall be considered a
notification for purposes of the Plan and shall be binding on the Participant
and the Participant’s Spouse and Beneficiary for all purposes of the
Plan.

       

      If the
Administrator is unable to locate the Participant, Spouse, or Beneficiary to
whom a Participant’s Accounts are payable, the Participant’s Accounts shall be
frozen as of the date on which distribution would have been completed under the
terms of the Plan, and no further notional investment returns shall be credited
thereto.

       

      If a
Participant whose Accounts were frozen (or his Beneficiary) files a claim for
distribution of the Accounts within 7 years after the date the Accounts are
frozen, and if the Administrator or Employer determines that such claim is
valid, then the frozen balance that has become payable shall be paid by the
Employer to the Participant or Beneficiary in a lump sum cash payment as soon as
practicable thereafter.  If the Administrator notifies a Participant,
Spouse, or Beneficiary of the provisions of this Subsection, and the
Participant, Spouse, or Beneficiary fails to claim the Participant’s, Spouse’s,
or Beneficiary’s benefits or make such person’s whereabouts known to the
Administrator within 7 years after the date the Accounts are frozen, the
benefits of the Participant, Spouse, or Beneficiary may be disposed of, to the
extent permitted by applicable law, by one or more of the following
methods:

       

      
        	
                (a)  

              	
                By
      retaining such benefits in the
Plan.

              

      

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

      
        	
                (b)  

              	
                By
      paying such benefits to a court of competent jurisdiction for judicial
      determination of the right thereto.

              

      

       

      
        	
                (c)  

              	
                By
      forfeiting such benefits in accordance with procedures established by the
      Administrator.  If a Participant, Spouse, or Beneficiary is
      subsequently located, such benefits may be restored (without adjustment)
      to the Participant, Spouse, or Beneficiary under the
  Plan.

              

      

       

      
        	
                (d)  

              	
                By
      any equitable manner permitted by law under rules adopted by the
      Administrator.

              

      

       

      
        	
                10.18  

              	
                Recovery
      of Benefits

              

      

       

      In the
event a Participant, Spouse, or Beneficiary receives a benefit payment from the
Plan that is in excess of the benefit payment that should have been made to such
Participant, Spouse, or Beneficiary, or in the event a person other than a
Participant, Spouse, or Beneficiary receives an erroneous payment from the Plan,
the Administrator or Employer shall have the right, on behalf of the Plan, to
recover the amount of the excess or erroneous payment from the
recipient.  To the extent permitted under applicable law, the
Administrator or Employer may, at its option, deduct the amount of such excess
or erroneous payment from any future benefits payable to the applicable
Participant, Spouse, or Beneficiary.

       

      
        	
                10.19  

              	
                Effect
      on Other Benefits

              

      

       

      Except as
otherwise specifically provided under the terms of any other employee benefit
plan of the Employer, a Participant’s participation in this Plan shall not
affect the benefits provided under such other employee benefit
plan.

       

      
        	
                10.20  

              	
                Tax
      and Legal Effects

              

      

       

      The
Employer, the Administrator, and their representatives and delegates do not in
any way guarantee the tax treatment of benefits for any Participant, Spouse, or
Beneficiary, and the Employer, the Administrator, and their representatives and
delegates do not in any way guarantee or assume any responsibility or liability
for the legal, tax, or other implications or effects of the Plan.  In
the event of any legal, tax, or other change that may affect the Plan, the
Employer may, in its sole discretion, take any actions it deems necessary or
desirable as a result of such change.

       

      SECTION
11     THE ADMINISTRATOR

       

      
        	
                11.1  

              	
                Information
      Required by Administrator

              

      

       

      Each
person entitled to benefits under the Plan must file with the Administrator from
time to time in writing such person’s mailing address and each change of mailing
address.  Any communication, statement, or notice addressed to any
person at the last address filed with the Administrator will be binding upon
such person for all purposes of the Plan.  Each person entitled to
benefits under the Plan also shall furnish the Administrator with such
documents, evidence, data, or information as the Administrator considers
necessary or desirable for the 

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

        purposes
of administering the Plan.  The Employer shall furnish the
Administrator with such data and information as the Administrator may deem
necessary or desirable in order to administer the Plan.  The records
of the Employer as to an Employee’s or Participant’s period of employment or
membership on the Board, termination of employment or membership and the reason
therefor, leave of absence, reemployment, and Compensation will be conclusive on
all persons unless determined to the Administrator’s or Employer’s satisfaction
to be incorrect.

      

       

      
        	
                11.2  

              	
                Uniform
      Application of Rules

              

      

       

      The
Administrator shall administer the Plan on a reasonable basis.  Any
rules, procedures, or regulations established by the Administrator shall be
applied uniformly to all persons similarly situated.

       

      
        	
                11.3  

              	
                Review
      of Benefit Determinations

              

      

       

      Benefits will be paid to Participants
and their beneficiaries without the necessity of formal
claims.  Participants or their beneficiaries, however, may make a
written request to the Administrator for any Plan benefits to which they may be
entitled.  Participants’ written request for Plan benefits will be
considered a claim for Plan benefits, and will be subject to a full and fair
review.  If the claim is wholly or partially denied, the Administrator
will furnish the claimant with a written notice of this denial.  This
written notice will be provided to the claimant within 90 days after the receipt
of the claim by the Administrator.  If notice of the denial of a claim
is not furnished to the claimant in accordance with the above within 90 days,
the claim will be deemed denied.  The claimant will then be permitted
to proceed to the review stage described in the following
paragraphs.

       

      Upon the denial of the claim for
benefits, the claimant may file a claim for review, in writing, with the
Administrator.  The claim for review must be filed no later than 60
days after the claimant has received written notification of the denial of the
claim for benefits or, if no written denial of the claim was provided, no later
than 60 days after the deemed denial of the claim.  The claimant may
review all pertinent documents relating to the denial of the claim and submit
any issues and comments, in writing, to the Administrator.  If the
claim is denied, the Administrator must provide the claimant with written notice
of this denial within 60 days after the Administrator’s receipt of the
claimant’s written claim for review.  The Administrator’s decision on
the claim for review will be communicated to the claimant in writing and will
include specific references to the pertinent Plan provisions on which the
decision was based.  If the Administrator’s decision on review is not
furnished to the claimant within the time limitations described above, the claim
will be deemed denied on review.  If the claim for Plan benefits is
finally denied by the Administrator (or deemed denied), then the claimant may
bring suit in federal court.  The claimant may not commence a suit in
a court of law or equity for benefits under the Plan until the Plan’s claim
process and appeal rights have been exhausted and the Plan benefits requested in
that appeal have been denied in whole or in part.  However, the
claimant may only bring a suit in court if it is filed within 90 days after the
date of the final denial of the claim by the Administrator.

      

      With
respect to claims for benefits payable as a result of a Participant being
determined to be disabled, the Administrator will provide the claimant with
notice of the status of his claim 

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

        for
disability benefits under the Plan within a reasonable period of time after a
complete claim has been filed, but no later than 45 days after receipt of the
claim for benefits.  The Administrator may request an additional
30-day extension if special circumstances warrant by notifying the claimant of
the extension before the expiration of the initial 45-day period.  If
a decision still cannot be made within this 30-day extension period due to
circumstances outside the Plan’s control, the time period may be extended for an
additional 30 days, in which case the claimant will be notified before the
expiration of the original 30-day extension.

      

       

      If the claimant has not submitted
sufficient information to the Administrator to process his disability benefit
claim, he will be notified of the incomplete claim and given 45 days to submit
additional information.  This will extend the time in which the
Administrator has to respond to the claim from the date the notice of
insufficient information is sent to the claimant until the date the claimant
responds to the request.  If the claimant does not submit the
requested missing information to the Administrator within 45 days of the date of
the request, the claim will be denied.

       

      If a disability benefit claim is
denied, the claimant will receive a notice which will include: (i) the specific
reasons for the denial, (ii) reference to the specific Plan provisions upon
which the decision is based, (iii) a description of any additional information
the claimant might be required to provide with an explanation of why it is
needed, and (iv) an explanation of the Plan’s claims review and appeal
procedures, and (v) a statement regarding the claimant’s right to bring a civil
action under Section 502(a) of ERISA following a denial on appeal.

       

      The claimant may appeal a denial of a
disability benefit claim by filing a written request with the Administrator
within 180 days of the claimant’s receipt of the initial denial
notice.  In connection with the appeal, the claimant may request that
the Plan provide him, free of charge, copies of all documents, records and other
information relevant to the claim.  The claimant may also submit
written comments, records, documents and other information relevant to his
appeal, whether or not such documents were submitted in connection with the
initial claim. The Administrator may consult with medical or vocational experts
in connection with deciding the claimant’s claim for benefits.

       

      The Administrator will conduct a full
and fair review of the documents and evidence submitted and will ordinarily
render a decision on the disability benefit claim no later than 45 days after
receipt of the request for review on appeal.  If there are special
circumstances, the decision will be made as soon as possible, but not later than
90 days after receipt of the request for review on appeal.  If such an
extension of time is needed, the claimant will be notified in writing prior to
the end of the first 45-day period.  The Administrator’s final written
decision will set forth: (i) the specific reasons for the decision, (ii)
references to the specific Plan provisions on which the decision is based, (iii)
a statement that the claimant is entitled to receive, upon request and free of
charge, access to and copies of all documents, records and other information
relevant to the benefit claim, and (iv) a statement regarding the claimant’s
right to bring a civil action under Section 502(a) of ERISA following a denial
on appeal.  The Administrator’s decision made in good faith will be
final and binding.

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

       

      
        	
                11.4  

              	
                Administrator’s
      Decision Final

              

      

       

      Benefits
under the Plan will be paid only if the Administrator decides in its sole
discretion that a Participant or Beneficiary (or other claimant) is entitled to
them.  Subject to applicable law, any interpretation of the provisions
of the Plan and any decisions on any matter within the discretion of the
Administrator made by the Administrator or its delegate in good faith shall be
binding on all persons.  A misstatement or other mistake of fact shall
be corrected when it becomes known and the Administrator shall make such
adjustment on account thereof as it considers equitable and
practicable.

       

      SECTION
12     AMENDMENT AND TERMINATION

       

      While the
Employer expects and intends to continue the Plan, the Employer and the
Administrator each reserve the right to amend the Plan at any time and for any
reason, including the right to amend this Section 12 and the Plan termination
rules herein; provided, however, that each Participant will be entitled to the
amount credited to his Accounts immediately prior to such
amendment.  The power to amend the Plan includes (without limitation)
the power to change the Plan provisions regarding eligibility, contributions,
notional investments, vesting, and distribution forms, and timing of payments,
including changes applicable to benefits accrued prior to the effective date of
any such amendment; provided, however, that amendments to the Plan (other than
amendments relating to Plan termination) generally shall not cause the Plan to
provide for acceleration of distributions in violation of Section 409A of the
Code and applicable regulations thereunder.

       

      The
Employer reserves the right to terminate the Plan at any time and for any
reason; provided, however, that each Participant will be entitled to the amount
credited to his Accounts immediately prior to such termination (but such
Accounts shall  not be adjusted for future notional income, losses,
expenses, appreciation and depreciation).

       

      In the
event that the Plan is terminated pursuant to this Section 12, the balances in
affected Participants’ Accounts shall be distributed at the time and in the
manner set forth in Section 9.  Notwithstanding the foregoing, if the
Plan and all other account balance plans maintained by the Employer or any
member of the Employer’s “controlled group” (as defined in subsections 414(b)
and (c) of the Code) are terminated other than in connection with a downturn in
financial health, the Employer and the Administrator reserve the right to make
all such distributions within the second twelve-month period commencing with the
date of termination of the Plan; provided, however, that no such distribution
will be made during the first twelve-month period following such date of Plan
termination other than those that would otherwise be payable under Section 9
absent the termination of the Plan.  In the event of such a Plan
termination due to a Change in Control of the Employer, distributions shall be
made within 12 months of the date of termination of the Plan.

      
        
           

        

        
          29

          
            

          

        

        
           

        

      

      

      

      

      

      

      

      

      SUN HEALTHCARE GROUP,
INC.

       

      DEFERRED COMPENSATION
PLAN

       

      ADOPTION
AGREEMENT

       

      

      

      

      

      

      

      

      

       

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

      ADOPTION
AGREEMENT

      

       

      ADOPTION
OF PLAN -- [Select
one]

       

      
        	 x	
                Adoption
      - The undersigned Sun
      Healthcare Group, Inc.  (the “Employer”) hereby adopts as a
      Nonqualified Deferred Compensation Plan for the individuals identified in
      Item 5 herein the form of Plan known as the Nonqualified Supplemental
      Deferred Compensation Plan.

              

      

       

      
        	 o	
                Amendment
      of Previous Nonqualified Deferred Compensation Plan
      –  With “Grandfathered” Amounts -      
      (the “Employer”) previously has adopted a Nonqualified Deferred
      Compensation Plan, known as the      
      [enter name
      of previous plan], and the execution of this Adoption
      Agree­ment constitutes an amendment to that Plan, effective only for
      Deferrals, Contributions, earnings, gains, losses, depreciation and
      appreciation vested and credited thereto or debited therefrom on and after
      the Effective Date listed in Section 2 below, or, if otherwise determined
      by the Employer, on and after January 1, 2005 with respect to Plan
      provisions required under Section 409A of the Internal Revenue Code and
      the regulations thereunder.  All other amounts in the plan shall
      be subject to the provisions of the previous plan
      document.  This option is appropriate if the previous plan
      contains grandfathered amounts not subject to Section 409A of the Internal
      Revenue Code.  Grandfathered amounts were contributed to the
      plan prior to January 1, 2005 under the terms of the plan in effect prior
      to October 4, 2004, and those plan terms have not since been materially
      modified.  Grandfathered amounts and earnings will be
      administered under the terms of the prior plan
  document.

              

      

       

      
        	 o	
                Restatement
      of Previous Nonqualified Deferred Compensation Plan –        (the “Employer”) previously has
      adopted a Nonqualified Deferred Compensation Plan, known as the
           
      [enter name of previous plan], and the execution of this
      Adoption Agree­ment constitutes a restatement of that Plan, effective
      as of the Effective Date listed in Section 2 below for all funds under the
      Plan.  This option is appropriate if the previous plan does not
      contain “grandfathered” amounts (see description above), or if Employer
      wishes to apply Section 409A rules to all amounts in the plan (even
      pre-2005 amounts), or if previous plan has been materially modified and
      thus become subject to Section
409A.

              

      

       

      NAME
OF PLAN

       

      The name
of this Plan as adopted by the Employer is the [enter name of
Plan] The Sun
Healthcare Group, Inc. Deferred Compensation Plan (the
“Plan”).

       

      INDIVIDUALIZED
PLAN INFORMATION

       

      With
respect to the variable features contained in the Plan, the Employer hereby
makes the following selections granted under the provisions of the
Plan:

       

      
        	
                1.

              	
                Adopting Entity.  The
      Employer adopts the Plan as:

              

      

       

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

      List type
of business entity (corporation, partnership, controlled group of corporations,
etc.) Corporation

       

      List each
Employer adopting the Plan and Employer Identification Number
(EIN):

      

      
        
          	
                  Name
      of Employer:

                	
                  Sun Healthcare Group, Inc.

                	
                  EIN:

                	
                  85-0410612

                
	
                  Name
      of Employer:

                	
                       

                	
                  EIN:

                	
                       

                
	
                  Name
      of Employer:

                	
                       

                	
                  EIN:

                	
                       

                
	
                  Name
      of Employer:

                	
                       

                	
                  EIN:

                	
                       

                
	
                  Name
      of Employer:

                	
                       

                	
                  EIN:

                	
                       

                

        

      

      (attach
additional lists as necessary)

       

      The
adopting Employers and the Employer are referred to herein collectively as the
“Employer.”

       

      Select
state of controlling law (see Section 10.7 of Plan Document):

       

      o      State of
incorporation;  _____

       

      x    State of
domicile          California

       

      

       

      
        	
                2.

              	
                Effective
      Date.  The “Effective Date” of the adoption of this Plan,
      this Plan

              

      

       

      
        	
                 
      

              	
                amendment
      or this Plan restatement is [enter
      date]
      April 1, 2009.

              

      

       

      
        	
                3.

              	
                Plan
      Year.  The “Plan year” of the Plan shall be [select
      one]:

              

      

       

      
        
        

      

      
        	
              	 x	
                      
                  the
      calendar year.

                

              

      

       

      
        	
                 
      

              	 o	
                the
      fiscal year or other 12- month period ending on the last day of      
      [specify
      month].

              

      

       

      
        	
                 
      

              	 x	
                a
      short Plan year beginning on April 1, 2009 and ending on December 31,
      2009; and thereafter the Plan year shall be as indicated in (a) or (b)
      above.

              

      

       

      

       

      
        	
                4.

              	
                Plan
      Administrator.  The “Administrator” of the Plan is The Deferred
      Compensation Committee

              

      

       

       [fill in the
name(s) of the individual(s) or job title(s) or entity (such as a committee)
that is (are) responsible for administra­tion of the Plan], and such
other person(s) or entity as the Employer shall appoint from time to
time.

       

      

       

      
        	
                5.

              	
                Eligible
      Individuals.  The following shall be eligible to
      participate in the Plan:  [select all
      that apply – do not list individual
  names]:

              

      

       

      
        	
                 
      

              	x	
                A
      select group of management or highly-compensated Employees as designated
      by the Employer in separate resolutions or
  agreements;

              

      

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      
        
        

      

       

      
        
          	 	x	      
                  Employee
      Board Members;

                
	 	 	 
	
                   
      

                	x	
                  Non-Employee
      Board Members;

                

        

      

       

      
        	
                 
      

              	o	
                Other
      Service Providers (i.e., independent contractors, consultants,
      etc.)

              

      

       

      
        	
                 
      

              	x	
                Employees
      or other Service Providers above the following Compensation
      threshold:  [enter
      dollar amount]  $ 110,000
      ;

              

      

       

      
        	
                 
      

              	o	
                Employees
      with the following job titles:  [enter job
      title(s); for example, “Vice President and above”] ______   

              

      

       

      
        	
                 
      

              	o	
                Other:
      [enter
      description] ________

              

      

       

      

       

      
        	
                6.

              	
                Eligibility
      Timing.  Eligibility timing selected below shall apply
      uniformly to all Participant Deferrals (including Performance-Based Bonus
      Deferrals), as well as Employer Matching Contributions and Other Employer
      Contributions, unless otherwise indicated.  If the Employer
      wishes to provide for separate eligibility rules for different types of
      Compensation (for example, Salary vs. Bonus), or for types of
      Contributions (for example, Employer Matching Contributions vs.
      Participant Deferrals), mark “Other” below and attach exhibits as
      necessary [select
      one]:

              

      

       

      
        	
              	x 	
                

                  Eligible
      immediately upon properly completed designation by the Plan administrator
      or Employer;

                

              

      

       

      
        	
                 
      

              	o	
                Eligible
      after the following period of employment, Board service, etc. [enter
      number of days, months or years, for example, 90 days]
      _____ ;

              

      

       

      
        	
                 
      

              	o	
                Other  [enter
      description]:_____ 

              

      

       

      

       

      
        	
                7.

              	
                Types and Amounts of
      Participant Deferrals [select all
      that apply and enter minimum and
      maximum percentages in increments of one percent (for example, Salary
      minimum 0% maximum 100%).   Note that no Deferral election
      can reduce a Participant’s
      Compensation below the amount necessary to satisfy required withholding
      for FICA/Medicare/income
taxes.]:

              

      

       

      
        	
                 
      

              	x	
                Salary
      [select
      one]:

              

      

      

      
        
        

      

      
        
          	 	x  percentage
      [enter
      minimum
      5% and
      maximum 80%]
	
                   
      

                	
                      
      or

                

        

      

      
        	
                 
      

              	
                o   fixed
      dollar amount  [enter
      minimum $____________].

              

      

      

      
        	
                 
      

              	x	
                Non-Performance-Based
      Bonus [select
      one]:

              

      

      

      
        	
                 
      

              	
                x  percentage
      [enter
      minimum
      5% and
      maximum 100%]

              

      

      
        	
                 
      

              	
                    
      or

              

      

      
        	
                 
      

              	
                o  fixed
      dollar amount  [enter
      minimum $     ].

              

      

      

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	x	
                Performance-Based
      Bonus [select one
      and enter performance period (for example, 12-month period ending each
      March 31 ]: performance period from_____       
      to      .

              

      

      

      
        	
                 
      

              	
                x  percentage
      [enter
      minimum
      5% and
      maximum 100%]

              

      

      
        
          	
                   
      

                	
                      
      or

                
	 	      
                  o  fixed
      dollar amount  [enter
      minimum $     ].

                

        

      

      
        
        

      

      

      
        	
                 
      

              	
                x

              	
                Commissions
      [select
      one]:

              

      

      

      
        	
                 
      

              	
                x   percentage
      [enter
      minimum
      5% and,
      maximum 100%]

              

      

      
        	
                 
      

              	
                    
      or

              

      

      
        	
                 
      

              	
                o  fixed
      dollar amount  [enter
      minimum $     ].

              

      

      

      
        	
                 
      

              	x	
                Board
      of Directors Fees/Retainer (note – should not include expense
      reimbursements):

              

      

      

      
        	
                 
      

              	
                x  percentage
      [enter
      minimum
      5% and,
      maximum 100%]

              

      

      
        	
                 
      

              	
                    
      or

              

      

      
        	
                 
      

              	
                o  fixed
      dollar amount  [enter
      minimum $     ].

              

      

      

      
        	
                 
      

              	x	
                Other
      Service Provider Fees or other earned income from the
      Employer:

              

      

      

      
        	
                 
      

              	
                x  percentage
      [enter
      minimum
      5% and,
      maximum 100%]

              

      

      
        	
                 
      

              	
                    
      or

              

      

      
        	
                 
      

              	
                o  fixed
      dollar amount  [enter
      minimum $     ].

              

      

      

      
        	
                 
      

              	x	
                401(k)
      Refund (amount deferred
      from Participant’s regular Compensation equal in value to any refund paid
      to Participant in that year resulting from excess deferrals in Employer’s
      401(k) plan – see Subsection 2.9 of Plan document for
      definition.)

              

      

       

      
        	
                 
      

              	o	
                Other
      [enter
      description]: _______ 

              

      

       

      

       

      
        	
                8.

              	
                Definition of Compensation for Purposes of
      Making Plan Contributions [select
      one]:

              

      

       

      
        	
                 
      

              	x	
                Same
      definition of Compensation as in Employer’s 401(k) or other applicable
      qualified retirement plan, earned while the Participant is an Eligible
      Individual, as determined by the
Employer.

              

      

       

      
        	
                 
      

              	o	
                Participant’s
      total wages, salary, commissions, overtime, bonus, etc. for a given year
      which the Employer is required to report on Form W-2 or other appropriate
      form, (or, in the case of Board members, Board fees and retainer only, but
      not including expense reimbursements)(or, in the case of Other Service
      Providers, the Participant’s total remuneration from the Employer for a
      given year pursuant to the agreement to provide services to the Employer),
      earned while the Participant is an Eligible Individual as determined by
      the Employer.

              

      

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	o	
                Other
      [enter
      description]:_______

              

      

       

      
        	
                9.

              	
                Evergreen:  Participant’s
      Deferral Elections will be “evergreen” (i.e., will continue indefinitely
      until the Participant’s Termination Date unless changed by the Participant
      – so each year the Participant will be deemed to have the same Deferral
      Election in place as the prior year unless actively changed by the
      Participant during the open enrollment period ending no later than
      December 31 prior to the effective Plan year or, in the case of certain
      Performance-Based Bonuses, no less than 6 months prior to the end of the
      applicable performance period). [select all
      that apply]:

              

      

       

       

      
        	
                  x  

              	
                  For
      all types of Compensation
Deferrals.

              

      

       

      
        	
                  o 

              	
                  For
      Salary Deferrals only -- other types of Deferrals are renewed each
      year.

              

      

       

      
        	
                 o  

              	
                  For
      Performance-Based Bonus only -- other types of Deferrals are renewed each
      year.

              

      

       

      
        	
                      
                    o 

                

              	
                  Other:
      [specify]_______
      

              

      

       

      

       

      
        	
                10.

              	
                Employer Contributions
      [select all
      that apply]:.

              

      

       

      
        	
                 
      

              	 o	
                (a)

              	
                No
      Employer Contributions.

              

      

       

      
        	
                 
      

              	 x	
                (b)

              	
                Matching
      Contributions on all Participant Compensation Deferrals [also complete
      Items 11 through 14 ].

              	
                 

              

      

       

      
        	
                 
      

              	 o	
                (c)

              	
                Matching
      Contributions on certain types of Compensation Deferrals (for example,
      Matching Contributions on Participant Performance-Based Bonus
      Deferrals, etc.) [attach
      explanation describing which types of deferrals
      will be matched and also complete Items 11 through
      14]

              	
                 

              	
                 

              	
                 

              

      

       

      
        	
                 
      

              	 x	
                (d)

              	
                Employer
      Contributions other than Matching Contributions [complete
      Item
      15]  (amount or formula for determining and allocating
      such contributions
      should be documented in writing when determined, and such writings
      will form part of the Plan).

              	
                 

              	
                 

              	
                 

              

      

       

      

       

      
        	
                11.

              	
                Amount of Matching Contribution
      on Participant Compensation
      Deferrals.  If the Employer has specified in Item 10(b)
      or (c) that it will make Matching Contributions on behalf of Participants
      based on their Compensation Deferrals, such Matching Contributions will be
      in an amount determined as follows for the applicable period selected in
      Item 13 below:  [Select
      (a), (b), (c), (d) or (e) below – if Employer has indicated in 10(c) above
      that Matching Contributions will be made on certain types of Participant
      Compensation Deferrals and if Employer wishes for  different
      Matching formulas to be used for different types of Participant
      Compensation Deferrals, Employer should attach additional copies of this
      Item 11 completed for each type of Participant Compensation Deferral that
      is matched. ]

              

      

       

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	 o	
                (a)

              	
                     % of the
      Compensation Deferrals made by each Participant during the applicable
      period.

              

      

       

      
        	
                 
      

              	 o	
                (b)

              	
                At
      a percentage determined from time to time in the discretion of the
      Employer of each Participant’s Compensation Deferrals for the applicable
      period (percentage should be documented in writing when determined, and
      such writings will form part of the
plan).

              

      

       

      [Optional:  If
11(a) or (b) above is selected, the Employer may also specify here that it will
not match Compensation Deferrals in excess of   $      or      % of each
Participant’s Compensation during the applicable period —specify   either a dollar amount
or a whole percentage.  If no limit is entered here, the
assumption is that 100% of the Participant’s Compensation Deferrals will be
matched at the applicable percentage.]

       

      
        	
                 
      

              	 o	
                (c)

              	
                     % of the
      portion of each Participant’s Compensation Deferral Contributions during
      the applicable period which does not exceed      % of the
      Participant’s Compensation for such period; plus      % of the
      portion, if any, of each Participant’s Compensation Deferral Contributions
      during the applicable period which exceeds      % but does
      not exceed      % of the
      Participant’s Compensation for such
period.

              

      

       

      [Note:  Example for 11(c)
above – select this option if Employer wants to match different percentages and
different levels of deferral – for example, 100% of the first 3% of compensation
deferred, and 50% of the next 2%]

       

      
        	
                 
      

              	 o	
                (d)

              	
                     % of the
      Compensation of each Participant who made Compensation Deferral
      Contributions during the applicable period of at least      % of
      Compensation.

              

      

       

      
        	
                 
      

              	 x	
                (e)

              	
                Other:  [describe]
      Match
      formula is up to 25% up the maximum of the first 6% deferred offset by
      matching contributions to the Sun Healthcare Group, Inc. 401(k)
      Plan.

              

      

       

      

       

      
        	
                12.

              	
                Applicable Period for Matching
      Contributions.  Employer Matching Contributions elected
      under Item 10(b) or (c) shall be allocated and credited to eligible
      Participants’ Accounts as soon as administratively feasible after the end
      of each “Applicable Period” after the amounts have been determined by the
      Employer.  For purposes of determining a Participant’s share of
      Matching Contributions under Item 10, the Applicable Period shall
      be  [Select
      one]:

              

      

       

      
        	
                 
      

              	x	
                the
      Plan Year.

              

      

       

      
        	
                 
      

              	o	
                the
      payroll period.

              

      

       

      
        	
                 
      

              	o	
                other
      (specify calendar month, Plan year quarter, etc.)_______
  .

              

      

       

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

      
        
          	
                  13.

                	
                  Employees Eligible to Receive
      Employer Matching Contributions.  Matching Contributions
      made for each Plan Year (if applicable)  shall be allocated and
      credited to the Accounts of the following Participants: [Select one
      if applicable]

                

        

      

       

      
        	
                 
      

              	 o	
                Participants
      who were employed by the Employer (or, in the case of non-Employee Board
      Members, served on the Board) during that Plan Year, or, in the case of
      Other Service Providers, who provided services to the Employer during that
      Plan Year.

              

      

       

      
        	
                 
      

              	 o	
                Participants
      who were employed by the Employer (or, in the case of non-Employee Board
      Members, served on the Board) on the last day of the Plan Year, or, in the
      case of Other Service Providers, who provided services to the Employer on
      the last day of the Plan Year.

              

      

       

      
        	
                 
      

              	 x	
                Participants
      who were employed by the Employer (or, in the case of non-Employee Board
      Members, served on the Board) on the last day of the Plan Year or who
      retired, died or were Disabled during the Plan Year, or, in the case of
      Other Service Providers, who provided services to the Employer on the last
      day of the Plan Year or who died or were Disabled during the Plan
      Year.  [If this
      option is selected, complete Item 30 -- definition of
      “Disability”.]

              

      

       

      14.           Vesting Schedule of Employer Matching
Contributions.  If Matching Contributionsare made to the Plan,
select the rate at which such Contributions will vest [select
one]:

      

      
        
          	
                   
      

                	x	
                  Immediate
      100% vesting for all Participants.

                
	 	 	 
	 	o	      
                  “Cliff”
      vesting (0%  up to cliff; 100% after cliff) [select
      one]:

                

        

      

       

      
        
        

      

      
        	
                  o  

              	
                  1
      year cliff (less than 1 year 0%; 1 or more years
  100%)

              

      

       

      
        	
                  o  

              	
                  2
      year cliff (less than 2 years 0%; 2 or more years
  100%)

              

      

       

      
        	
                  o  

              	
                   Other
      cliff (enter
      number of years:  less than       years 0%;
            or
      more years 100%)

              

      

       

      
        	
                 
      

              	o	
                “Graded”
      vesting  [enter
      vesting percentages]:

              

      

       

      1
year       %                              
  6 years        %                                11
years      %

       

      2 years
     %                                7
years        %                                12
years      %

       

      3 years
     %                                8
years        %                                13
years      %

       

      4 years
     %                                9
years        %                                14
years      %

       

      5 years
     %                                10
years      %                                15
years      %

       

      
        	
                 
      

              	o	
                Other
      vesting schedule: [describe
      schedule – subject to approval]
     

              

      

       

      
        	
                15.

              	
                Vesting Schedule of Employer
      Contributions (Other Than Matching Contributions).  If
      Employer Contributions (other than Matching Contributions) are made to the
      Plan, select the rate at which such Contributions will vest [select
      one]:

              

      

      

      
        	
                 
      

              	o	
                Immediate
      100% vesting for all Participants.

              

      

       

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	o	
                “Cliff”
      vesting (0%  up to cliff; 100% after cliff) [select
      one]:

              

      

       

      
        	
                  o  

              	
                  1
      year cliff (less than 1 year 0%; 1 or more years
  100%)

              

      

       

      
        	
                  o  

              	
                  2
      year cliff (less than 2 years 0%; 2 or more years
  100%)

              

      

       

      
        	
                o  

              	
                  Other
      cliff (enter
      number of years:  less than       years 0%;
            or
      more years 100%)

              

      

       

      
        	
                 
      

              	o	
                “Graded”
      vesting  [enter
      vesting percentages]:

              

      

       

      1
year       %                    
            6
years        %                                11
years      %

       

      2 years
     %                                7
years        %                                12
years      %

       

      3 years
     %                                8
years        %                                13
years      %

       

      4 years
     %                                9
years        %                                14
years      %

       

      5 years
     %                                10
years      %                                15
years      %

       

        x      Other
vesting schedule: [describe
schedule – subject to approval]  Determined at the time the
contribution will be made

      

       

      
        	
                16.

              	
                Vesting
      Years.  A “Vesting Year” described above for purposes of
      determining vesting under the Plan shall be computed in accordance
      with:  [select one
      – if this is an amendment or restatement of a prior plan, definition from
      prior plan will override this
  definition.]

              

      

       

      
        	
                 
      

              	 x	
                Years
      of service (12-consecutive-month periods) with the Employer since date of
      hire (or date of commencement of Board
service).

              

      

       

      
        	
                 
      

              	o	
                Years
      of participation in the Plan (12-consecutive-month period between date
      Participant enters Plan and anniversary of such date) (if this is an
      amendment or restatement of a prior Plan, years of participation in prior
      plan will be included) (additional fees will apply if this item is
      selected).

              

      

       

      

       

      
        
          	
                   
      17.

                	
                  Full Vesting Upon Occurrence of
      Specific Event.  [select all
      that apply]

                

        

      

       

      
        	
                 
      

              	x	
                100%
      vesting upon Normal Retirement [describe
      criteria such as age (can be partial year), years of service with the
      Employer (must be whole years of service), or years of participation in
      the Plan (must be whole years of
  participation)]

              

      

       

      
        	
                 
      

              	
                 Attainment of Age
      65

              

      

       

      
        	
                 
      

              	x	
                100%
      vesting upon Early Retirement [describe
      criteria such as age (must be whole years), years of service with the
      Employer (must be whole years of service), or years of participation in
      the Plan (must be whole years of
  participation)]

              

      

       

      
        	
                 
      

              	
                 The later of the date
      Participant attains age 55 or the date Participant completes 5 years of
      Vesting Service

              

      

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	x	
                100%
      vesting upon Death.

              

      

       

      
        	
                 
      

              	x	
                100%
      vesting upon Disability [complete
      Item 30 – definition of
“Disability”].

              

      

       

      
        	
                 
      

              	x	
                100%
      vesting upon Change in Control of the Employer [complete
      Items 28 and29 – definition of “Change in
  Control”]

              

      

       

      
        	
                 
      

              	o	
                100%
      vesting upon occurrence of other event:  [describe
      event] _____

              

      

      

       

      
        	
                18.

              	
                Service Before Plan’s
      Establishment Excluded.  Years of service earned prior to
      establishment of the Plan shall be disregarded for purposes of determining
      vesting under the Plan:

              

      

       

       o     Yes
(this may be elected only if this is the establishment of a new
Plan).

       

       x      No.

       

       

      
        	
                19.

              	
                Forfeitures for Misconduct or
      Violation of Non-Compete.  Participants terminating
      employment prior to becoming 100% vested will forfeit the forfeitable
      percentage of their Accounts as indicated in accordance with the vesting
      schedule selected in Items 14 and/or 15.  Participants may also
      forfeit 100% of their Matching and Employer Contribution Accounts (if
      applicable) under the following circumstances:  [select any
      that apply]:

              

      

       

      
        	
              	o	
                Misconduct
      (termination for Cause). [if
      selected, the definition of Misconductor Cause
      should be documented in writing, and such writings will form part
      of the
      Plan]

              

      

       

      
        	
                 
      

              	o	
                Engaging
      in competition with the Employer.  [if
      selected, the definition of engaging in competition should be documented
      in writing, and such writing will form part of the
      Plan]

              

      

      

       

      
        	
                20.

              	
                Employer Stock as Deemed
      Investment Option.  If Employer stock will be a deemed
      investment option, indicate below how shares are to be
      tracked:  [select
      one]

              

      

       

      
        	
                 
      

              	o	
                Partial
      and whole shares.

              

      

       

      
        	
                 
      

              	o	
                Unitized
      fund.

              

      

       

       

      
        	
                21.

              	
                In-Service
      Distributions.  If the Employer elects below, the Plan
      will allow distributions of Participant Deferral Contributions to be made
      to Participants while they are still employed (“In-Service
      Distributions”), if they elect a fixed distribution date during the
      regular election period.    [Select
      one
      – note that In-Service Distributions of Employer Contributions is not
      permitted]

              

      

       

      
        	
                 
      

              	o	
                No,
      In-Service Distributions will not be
permitted.

              

      

       

      
        	
                 
      

              	x	
                Yes,
      In-Service Distributions will be permitted.  [select one
      ].

              

      

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

      

       

      
        	
                 
      

              	
                [Note
      – if “Yes” is elected above and the Plan will allow In-Service
      Distributions, please indicate if Participant will be permitted to make a
      “pushback” subsequent election to defer the original distribution date at
      least five years in accordance with Plan provisions (see subsection 9.1 of
      Plan document – note that election must be made 12 months prior to
      original distribution date and election will not take effect for 12
      months)    x Yes   o No
      ]

              

      

       

       

      
        	
                22.

              	
                Unforeseeable
      Emergency  Distributions Dates.  If the
      Employer elects below, the Plan will allow distributions to be made to
      Participants while they are still employed if they meet the criteria for
      an unforeseeable emergency financial hardship (“Unforeseeable Emergency
      Distributions”).  Both Participant Deferral Contributions and
      Vested Employer Contributions can be distributed in the event of an
      eligible Unforeseeable Emergency Distribution event. [Select
      one]

              

      

       

      
        	
                 
      

              	o 	
                No,
      Unforeseeable Emergency Distributions will not be
    permitted.

              

      

       

      
        	
                 
      

              	x	
                Yes,
      Unforeseeable Emergency Distributions will be permitted.  [select one
      below].

              

      

       

      
        	
                  o  

              	
                  For
      active Participants only.

              

      

       

      
        	
                  x  

              	
                  For
      active Participants, terminated Participants and
      Beneficiaries.

              

      

       

      

       

      
        	
                23.

              	
                Form of Distributions (at Termination
      of Employment, Death, or In-Service Distributions).  Distributions
      will be made to Participants upon Termination of Employment with the
      Employer, Death of the Participant, or as an In-Service Distribution if
      elected by the Employer in Item 21, as follows [select
      one]

              

      

       

      
        	
                 
      

              	o	
                Lump
      sum only.

              

      

       

      
        	
                 
      

              	x	
                Lump
      sum unless installments elected, but can only receive installments if
      Participant meets the following criteria [select all
      that apply– if item not selected below, then Participants in that category
      will receive lump sum only]:

              

      

       

      
        	
                 
      

              	
                x  Retirement
      [describe
      criteria such as age (can be partial year), years of service with the
      Employer (must be whole years of service), or years of participation in
      the Plan (must be whole years of participation)] Criteria consistent
      with the 401(k) Plan, to be
provided

              

      

       

      
        	
                 
      

              	
                x  Early
      Retirement [describe
      criteria such as age (must be whole years), years of service with the
      Employer (must be whole years of service), or years of participation in
      the Plan (must be whole years of participation)] Criteria consistent
      with the 401(k) Plan, to be
provided

              

      

       

      
        	
                 
      

              	
                o Termination
      (other than for Misconduct, Cause or Violation of
    Non-Compete)

              

      

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	 o	
                Lump
      sum unless installments elected, and Participant may receive installments
      regardless of reason for Termination of
  Employment.

              

      

       

      
        	
                 
      

              	
                [Note
      – if Installments are elected above, please indicate if Participant will
      be permitted to make a subsequent election to change the number of
      installments in accordance with Plan provisions (see subsection 9.2 of
      Plan document)  x   Yes  o  No
      ]

              

      

       

      

       

      24.           Distribution Upon
Disability.  If the Employer selects below, the Plan will allow
dis-tributions to be made to Participants upon Disability but while they are
still employedif they meet the criteria for Disability in Item 30
below.  The form of distribution will be the same as for Termination
of Employment.

       

      
        	
                 
      o

              	
                No,
      distribution upon Disability will not be
  permitted.

              

      

       

      
        	
                 
      x

              	
                Yes,
      distributions upon Disability will be permitted.  [complete
      Item 30 – definition of
“Disability”].

              

      

       

      

       

      
        	
                25.

              	
                Distributions Upon Change in
      Control:  If Employer elects below, distributions will be
      made to Participants upon Change in Control of the Employer (without a
      termination of employment of the Participant), as follows [select
      one, and complete Items 27 and 28 below (definition of “Change in
      Control”) ]

              

      

       

      
        	
                 
      

              	 o	
                No,
      Distributions upon Change in Control will not be
  permitted.

              

      

       

      
        	
                 
      

              	 x	
                Yes,
      Distributions upon Change in Control will be permitted, in a lump sum
      only.

              

      

       

      
        	
                 
      

              	 o	
                Yes,
      Distributions upon Change in Control will be permitted, in a lump sum or
      in installments as elected by the Participant [complete
      Item 23].

              

      

       

       

      
        	
                26.

              	
                Length of Installments (if
      Installment Distributions permitted in Item 23
      and/or Item 25 above)  [indicate
      length below]:

              

      

       

      
        	
                 
      

              	
                Retirement
      Annual installments over no fewer than 2 [enter
      minimum number of years – must be at least 2] and no more than
      15 years
      at Participant’s election [enter
      maximum number of years].

              

      

       

      
        	
                 
      

              	
                In-Service
      Annual installments over no fewer than 2 [enter
      minimum number of years] and no more than 5 years at
      Participant’s election [enter
      maximum number of years].

              

      

       

       

      
        	
                27.

              	
                “Change in Control” – Dates of
      Distribution.  Distributions upon a Change in Control
      shall occur upon the date that [select all
      that apply – see Subsection 9.9 of the Plan document for more
      details]:

              

      

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	 x	
                A
      person or group acquires more than 50% of the total fair market value or
      voting power of the stock of the corporation (select definition of
      “corporation” in Item 28 below), unless such acquisition is by an entity
      whose stock is owned by shareholders who, immediately prior to such
      acquisition, owned more than 50% of the total fair market value or voting
      power of the stock of the
corporation.

              

      

       

      
        	
                 
      

              	 o	
                A
      person or group acquires ownership of stock of the corporation with at
      least 30% of the total voting power of the corporation (select definition
      of “corporation” in Item 28 below).

              

      

       

      
        	
                 
      

              	 o	
                A
      person or group acquires assets from the corporation having a total fair
      market value of at least 40% of the value of all assets of the corporation
      immediately prior to such acquisition.  (select definition of
      “corporation” in Item 28 below).

              

      

       

      
        	
                 
      

              	 x	
                For
      a corporation for which no other corporation is a majority shareholder, a
      majority of the corporation’s board of directors is replaced during any
      12-month period by directors whose appointment or election is not endorsed
      by a majority of the board as constituted prior to the appointment or
      election (select definition of “corporation” in Item 28
      below).

              

      

       

      
        	
                28.

              	
                “Change in Control” – Which
      Corporation the Change Relates.  Distributions upon a
      Change in Control shall be made only if the Change in Control relates to
      the corporation selected below:  [select all
      that apply]:  

              

      

       

      
        	
                 
      

              	 o	
                (a)

              	
                The
      corporation for whom the Participant is performing services at the time
      of the Change In Control event.

              	
                 

              

      

       

      
        	
                 
      

              	 o	
                (b)

              	
                The
      corporation liable for payments from the Plan to the
      Participant.

              

      

       

      
        	
                 
      

              	 x	
                (c)

              	
                A
      corporation that is a majority shareholder of a corporation described
      in
      (a) or (b) above.

              	
                 

              

      

       

      
        	
                 
      

              	 o	
                (d)

              	
                Any
      corporation in the chain of corporations in which each corporation is
      a majority shareholder of another corporation in the chain, ending in
      a
      corporation described in (a) or (b) above.

              	
                 

              	
                 

              

      

       

      
        	
                29.

              	
                Definition of “Disability.” A
      Participant shall be considered “Disabled” if [select
      one]:

              

      

       

      
        	
                 
      

              	 o	
                by
      reason of any medically determinable physical or mental impairment which
      can be expected to result in death or can be expected to last for a
      continuous period of at least 12 months, the Participant is receiving
      income replacement benefits for at least 3 months under accident and
      health plans of the Employer;

              

      

       

      
        	
                 
      

              	 o	
                the
      Participant is unable to engage in any substantial gainful activity by
      reason of any medically determinable physical or mental impairment that
      can be expected to result in death or can be expected to last for a
      continuous period of not less than 12
months;

              

      

       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	 o	
                the
      Participant is deemed to be totally disabled by the Social Security
      Administration;

              

      

       

      
        	
                 
      

              	 x	
                the
      Participant is determined to be disabled in accordance with a disability
      insurance program, provided that the definition of disability under such
      disability insurance program complies with the requirements of one of the
      three preceding definitions above.

              

      

       

      
        	
                30.

              	
                Distributions to “Key
      Employees” -- Investment.  In order to comply with
      Internal Revenue Code Section 409A, distributions to “key employees” (see
      subsection 9.3 of the Plan Document for definition) of publicly traded
      companies made due to employment termination cannot be made within 6
      months of the employment termination date.  If distribution to a
      key employee must be delayed to comply with this 6-month rule, indicate
      below how Account balances of such a Participant will be invested during
      the period of delay [select
      one]:

              

      

       

      
        	
                 
      

              	 o	
                Valued
      as of most recent Valuation Date and held at the Employer without
      allocation of additional gains or losses after such Valuation
      Date  until payment can be
made.

              

      

       

      
        	
                 
      

              	 x	
                Remain
      invested as if termination date had not occurred, then valued as of most
      recent Valuation Date and
distributed.

              

      

       

      
        	
                31.

              	
                QDRO
      Distributions.  The Employer may elect whether
      distributions from a Participant’s Account shall be permitted upon receipt
      by the Plan Administrator of a Qualified Domestic Relations Order relating
      to a marital dissolution or separation that provides for payment of all or
      a portion of a Participant’s Accounts to an alternate payee (spouse,
      former spouse, children, etc.).  [Indicate
      below whether QDRO distributions will be
  permitted]:

              

      

       

      
        	
                 
      

              	 o	
                No,
      QDRO Distributions will not be
permitted.

              

      

       

      
        	
                 
      

              	 x	
                Yes,
      QDRO Distributions will be
permitted.

              

      

       

      
 

       

      
        	
                32.

              	
                Additional Survivor Death
      Benefit from Life Insurance.  In the event that life
      insurance is utilized as a funding vehicle for the Plan, the Employer may
      wish to provide additional Survivor Benefit from the following
      options:  [select
      one]

              

      

       

      
        	
                 
      

              	 x	
                No
      additional Survivor Benefit offered, but rather Participant’s vested
      Account balance.

              

      

       

      
        	
                 
      

              	 o	
                Face
      value of life insurance policy of Participant, if
  any.

              

      

       

      
        	
                 
      

              	 o	
                Greater
      of (a) face value of life insurance policy of Participant, if any, or (b)
      Participant’s vested Account
balance.

              

      

       

      
        	
                 
      

              	 o	
                Other:
      [enter
      amount or formula]_______ 

              

      

       

       

      33.           Payment of Plan
Expenses.  Plan expenses may be paid as follows: [select
one]

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	 x	
                Directly
      by the Employer.

              

      

       

      
        	
                 
      

              	 o	
                Deducted
      from the Participant accounts and Plan’s trust or other custodial account
      (mutual fund plans only, if
applicable).

              

      

       

      34.           “De Minimis” Small Amount
Cashouts.  If selected by the Employer, Participantaccount
balances that do not exceed a certain threshold amount will be
automaticallycashed out upon the Participant‘s Termination of Employment, Death,
other distribution event or any time thereafter, as provided below [select one]

       

      
        	
                  x  

              	
                Yes,
      amounts that do not exceed a threshold dollar amount will automatically be
      cashed out [enter
      dollar amount, not to exceed the IRS 402(g) limit  for a given
      year ($15,500 for 2007 and 2008) [enter
      amount] $ Current year IRS
      402(g) limit

              

      

       

      
        	
                  o  

              	
                No,
      no “de minimis” small amounts will be cashed
  out.

              

      

       

       

      
-14-NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: February 27, 2009 

Original Conversion Price (subject to adjustment herein): $0.50 

$2,000,000.00

9.0% CONVERTIBLE DEBENTURE

DUE FEBRUARY 26, 2014 

          FOR VALUE RECEIVED, the Jesup & Lamont, Inc., a Florida corporation (the “Company”), with its principal place of business at
2170 West State Road 434, Suite 100, Longwood, Florida 32779, promises to pay to Legent Group, LLC or its registered assigns (the “Holder”), or shall have paid pursuant to the
terms hereunder, the principal sum of $2,000,000.00 on February 26, 2014 (the “Maturity Date”) or such earlier date as this Debenture is required or permitted to be repaid as
provided hereunder, and to pay interest to the Holder on the aggregate then unconverted and outstanding principal amount of this Debenture in accordance with the provisions hereof.  This Debenture is subject to the following additional provisions:

           Section 1.     Definitions.  For the purposes hereof, in addition to the terms defined elsewhere in this Debenture,
(a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings: 

          “Alternate Consideration” shall have the meaning set forth in Section 5(e).

          “Bankruptcy Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in
Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating
to the Company or any Significant Subsidiary thereof; (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement; (c) the Company or any
Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the Company or any Significant Subsidiary thereof suffers any appointment of any
custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment; (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of
creditors; (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (g) the Company or any Significant Subsidiary thereof, by any act
or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing. 

          “Buy-In” shall have the meaning set forth in Section 4(d)(v).

          “Change of Control Transaction” means the occurrence after the date hereof of any of (i) the Company merges into or consolidates
with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than 66% of the aggregate voting power of
the Company or the successor entity of such transaction, or (ii) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to such transaction own less than 66% of
the aggregate voting power of the acquiring entity immediately after the transaction, or (iii) a replacement at one time or within a three year period of more than one-half of the members of the Company’s board of directors which is not
approved by a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the board of directors was
approved by a majority of the members of the board of directors who are members on the date hereof), or (iv) the execution by the Company of an agreement to which the Company is

2

a party or by which it is bound, providing for any of the events set forth in clauses (i) through (iii) above. 

          “Conversion Date” shall have the meaning set forth in Section 4(a). 

          “Conversion Price” shall have the meaning set forth in Section 4(b).

          “Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Debenture in accordance with
the terms hereof. 

          “Debenture Register” shall have the meaning set forth in Section 2(c).

          “EBITDA” means, for the applicable period, the net income (or net loss) of the Company and its consolidated Subsidiaries,
determined in accordance with GAAP, consistently applied, plus (i) any provision for (or less any benefit from) income taxes, (ii) any deduction for interest expense, net of interest income, and (iii) depreciation and amortization expense. All
determinations of the components of EBITDA shall be derived from the Company’s most recently filed Form 10-Q or Form 10-K, as applicable. 

          “Equity Conditions” means, during the period in question, (i) the Company shall have duly honored all conversions and redemptions
scheduled to occur or occurring by virtue of one or more Notices of Conversion of the Holder, if any, (ii) the Company shall have paid all liquidated damages and other amounts owing to the Holder in respect of this Debenture, (iii) there is an
effective Registration Statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the shares issuable pursuant to the Transaction Documents (and the Company believes, in good faith, that such
effectiveness of the Registration Statement will continue uninterrupted for the foreseeable future), (iv) the Common Stock is trading on a Trading Market and all of the shares issuable pursuant to the Transaction Documents are listed or quoted for
trading on such Trading Market (and the Company believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted for the foreseeable future), (v) there is a sufficient number of authorized but unissued and
otherwise unreserved shares of Common Stock for the issuance of all of the shares issuable pursuant to the Transaction Documents, (vi) there is no existing Event of Default or no existing event or occurrence which, with the passage of time or the
giving of notice, would constitute an Event of Default, (vii) the issuance of the shares in question to the Holder would not violate the limitations set forth in Section 4(c) herein,
(viii) there has been no public announcement of a pending or proposed Fundamental Transaction or Change of Control Transaction that has not been consummated and (ix) the Holder is not in possession of any information provided by the Company that
constitutes, or may constitute, material non-public information. 

          “Event of Default” shall have the meaning set forth in Section 8.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

3

          “Fundamental Transaction” shall have the meaning set forth in Section 5(e).

          “Interest Payment Date” shall have the meaning set forth in Section 2(a). 

          “Late Fees” shall have the meaning set forth in Section 2(d). 

          “Mandatory Default Amount” means the sum of 125% of the then outstanding principal amount of this Debenture, plus all accrued and
unpaid interest hereon and all other amounts, costs, expenses and liquidated damages due in respect of this Debenture. 

          “New York Courts” shall have the meaning set forth in Section 10(d). 

          “Notice of Conversion” shall have the meaning set forth in Section 4(a).

          “Original Issue Date” means the date of the first issuance of the Debentures, regardless of any transfers of any Debenture and
regardless of the number of instruments which may be issued to evidence such Debentures. 

          “Permitted Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other
governmental charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the
management of the Company) have been established in accordance with GAAP; and (b) Liens imposed by law which were incurred in the ordinary course of the Company’s business, such as carriers’, warehousemen’s and mechanics’ Liens,
statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate materially detract from the value of such property or assets or materially
impair the use thereof in the operation of the business of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future
the forfeiture or sale of the property or asset subject to such Lien. 

           “Person” means an individual, corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 

          “Purchase Agreement” means the Securities Purchase Agreement, dated as of February 27, 2009, among the Company and the original
Holders, as amended, modified or supplemented from time to time in accordance with its terms. 

          “Registration Statement” means a registration statement that registers the resale of all Conversion Shares of the Holder, names
such Holder as a “selling stockholder” therein. 

4

          “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 

          “Share Delivery Date” shall have the meaning set forth in Section 4(d).

          “Subsidiary” shall
  have the meaning set forth in the Purchase Agreement.

           “Threshold Period” shall have the meaning set forth in Section 6.

          “Trading Day” means a day on which the principal Trading Market is open for business. 

          “Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in
question: the American Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange. 

          “Transaction Documents” shall have the meaning set forth in the Purchase Agreement. 

Section 2.      Interest and Payment. 

          a)       Payment
of Interest. The Company shall pay interest in
cash to the Holder on the aggregate then unconverted  and outstanding principal
amount of this Debenture at the rate of 9.0% per annum, payable quarterly on
January 1, April 1, July 1 and October 1, beginning on the first such date after
the Original Issue Date, on each Conversion Date (as to that  principal amount
then being converted), on each Optional Redemption Date (as to that principal
amount then being redeemed) and on the Maturity Date (each such date, an “Interest
Payment Date”) (if any Interest Payment Date
is not a Business Day, then the applicable payment shall be due on the next succeeding
Business Day). At the Company’s option, interest during the first year of
this Debenture may be paid in  shares of its Common Stock, which shall be valued
at the average closing price for the five Trading Days prior to the end of the
quarter for which interest is due. After the first year, all interest payments
shall be made in cash. 

          b)       RESERVED. 

          c)      Interest Calculations. Except as otherwise provided in Section 2(a), interest shall be calculated on the
basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on the Original Issue Date until payment in full of the principal sum, together with all accrued and unpaid interest, liquidated damages and
other amounts which may become due hereunder, has been made. Interest shall cease to accrue with respect to any principal amount converted, provided that the Company actually delivers the Conversion Shares within the time period required by Section
4(d)(ii) herein. Interest hereunder will be paid to the Person in whose name 

5

this Debenture is registered on the records of the Company regarding registration and transfers of this Debenture (the “Debenture Register”). 

          d)      Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an
interest rate equal to the lesser of 20% per annum or the maximum rate permitted by applicable law (“Late Fees”) which shall accrue daily from the date such interest is due
hereunder through and including the date of payment in full. 

          e)      Prepayment.  Except as otherwise set forth in this Debenture, the Company may not prepay any portion of the
principal amount of this Debenture without the prior written consent of the Holder. 

          f)       Acceleration of Maturity Date. The Holder may accelerate the Maturity Date if
the Company has not been and is not profitable during the last two full fiscal quarters preceding the third year anniversary of this Debenture. 

Section 3.      Registration of Transfers and Exchanges.

          a)      Different
Denominations. This Debenture is exchangeable for
an equal aggregate principal amount of  Debentures of different authorized denominations,
as requested by the Holder surrendering the same. No service charge will be payable
for such registration of transfer or exchange. 

          b)      Investment Representations. This Debenture has been issued subject to certain investment representations of
the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.

          c)      Reliance on Debenture Register. Prior to due presentment for transfer to the Company of this Debenture, the
Company and any agent of the Company may treat the Person in whose name this Debenture is duly registered on the Debenture Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or
not this Debenture is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary. 

Section 4.      Conversion. 

          a)      Voluntary Conversion. At any time after the date that is the 6 month anniversary of the Original Issue Date
until this Debenture is no longer outstanding, this Debenture shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time.  The Holder shall effect conversions by delivering
to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (a “Notice of Conversion”),
specifying therein the principal amount of this Debenture to be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”).  If no
Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of

6

Conversion is deemed delivered hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender this Debenture to the Company unless the entire principal amount of this Debenture, plus all
accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture in an amount equal to the applicable conversion. The Holder and the Company shall
maintain records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within 1 Business Day of delivery of such Notice of Conversion. In the event of any
dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Debenture, acknowledge and agree that, by
reason of the provisions of this paragraph, following conversion of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture may be less than the amount stated on the face hereof.

          b)      Conversion Price.  The initial conversion price in effect on the Closing Date shall be equal to $0.50,
which is 100% of the closing price on the day preceding the Closing Date, subject to adjustment as herein provided (the “Conversion Price”). 

          c)      INTENTIONALLY LEFT BLANK 

          d)      Mechanics of Conversion. 

          i.      Conversion Shares Issuable Upon Conversion of Principal Amount.  The number of shares of Common Stock
issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted by (y) the then Conversion Price. 

          ii.      Delivery of Certificate Upon Conversion. Not later than three Trading Days after each Conversion Date (the
“Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates representing the Conversion Shares which, on or after
the Effective Date, shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement) representing the number of shares of Common Stock being acquired upon the conversion of this
Debenture and (B) a bank check in the amount of accrued and unpaid interest. On or after the Effective Date, the Company shall use its best efforts to deliver any certificate or certificates required to be delivered by the Company under this Section
4 electronically through the Depository Trust Company or another established clearing corporation performing similar functions.

          iii.      Failure to Deliver Certificates.  If, in the case of any Notice of Conversion, such certificate or
certificates are not delivered to or as directed by the applicable Holder by the third Trading Day after the Conversion Date, the Holder shall be entitled to elect by written notice to the Company at any time on

7

or before its receipt of such certificate or certificates, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Debenture delivered to the Company and the Holder shall promptly
return the Common Stock certificates representing the principal amount of this Debenture tendered for conversion to the Company.

          iv.      Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the
Conversion Shares upon conversion of this Debenture in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision
hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the
Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such
Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Company of any such action the
Company may have against the Holder. In the event the Holder of this Debenture shall elect to convert any or all of the outstanding principal amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone
associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Debenture
shall have been sought and obtained, and the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Debenture, which is subject to the injunction, which bond shall remain in effect
until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent that such Holder obtains judgment. In the absence of such injunction, the Company shall issue Conversion
Shares or, if applicable, cash, upon a properly noticed conversion.  If the Company fails for any reason to deliver to the Holder such certificate(s) pursuant to Section 4(d)(ii) by the third Trading Day after the Conversion Date, the Company shall
pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $1000 of principal amount being converted, $10 per Trading Day (increasing to $20 per Trading Day 5 Trading Days after such damages have begun to accrue)
for each Trading Day after such third Trading Day until such certificates are delivered.  Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 8 hereof for the Company’s
failure to deliver Conversion Shares within the period specified herein and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or
injunctive relief.  The exercise of any such rights shall not

8

prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law. 

          v.      Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other
rights available to the Holder, if the Company fails for any reason to deliver to the Holder such certificate(s) by the Share Delivery Date pursuant to Section 4(d)(ii), and if after such Share Delivery Date the Holder is required by its brokerage
firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares which the Holder was entitled
to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies available
to or elected by the Holder) the amount by which (x) the Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that
such Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the
Holder, either reissue (if surrendered) this Debenture in a principal amount equal to the principal amount of the attempted conversion or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had
timely complied with its delivery requirements under Section 4(d)(ii).  For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Debenture with
respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Company shall be
required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein
shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to
timely deliver certificates representing shares of Common Stock upon conversion of this Debenture as required pursuant to the terms hereof. 

          vi.      Reservation of Shares Issuable Upon Conversion. The Company covenants that it shall at all times reserve
and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Debenture as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons
other than the Holder (and the other holders of the Debentures), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth

9

in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 5) upon the conversion of the outstanding principal amount of this Debenture. The Company covenants that all shares of Common
Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable and, if the Registration Statement is then effective under the Securities Act, shall be registered for public sale in accordance with
such Registration Statement. 

          vii.      Fractional Shares. Upon a conversion hereunder the Company shall not be required to issue stock
certificates representing a fraction of a share of Common Stock, but may if otherwise permitted, make a cash payment in respect of any final fraction of a share based on the Closing Price at such time. If the Company elects not, or is unable, to
make such a cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, 1 whole share of Common Stock. 

          viii.      Transfer Taxes.  The issuance of certificates for shares of the Common Stock on conversion of this
Debenture shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that the Company shall not be required to pay any tax that
may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Debenture so converted and the Company shall not be required to issue or deliver
such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. 

Section 5.      Certain Adjustments. 

          a)      Stock Dividends and Stock Splits. If the Company, at any time while this Debenture is outstanding: (A) pays
a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by
the Company upon conversion of, or payment of interest on, the Debentures); (B) subdivides outstanding shares of Common Stock into a larger number of shares; (C) combines (including by way of a reverse stock split) outstanding shares of Common Stock
into a smaller number of shares; or (D) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any
adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive

10

such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. 

          b)      RESERVED. 

          c)      Subsequent Rights Offerings.  If the Company, at any time while the Debenture is outstanding, shall issue
rights, options or warrants to all holders of Common Stock (and not to Holders) entitling them to subscribe for or purchase shares of Common Stock at a price per share that is lower than the Closing Price on the record date referenced below, then
the Conversion Price shall be multiplied by a fraction of which the denominator shall be the number of shares of the Common Stock outstanding on the date of issuance of such rights or warrants plus the number of additional shares of Common Stock
offered for subscription or purchase, and of which the numerator shall be the number of shares of the Common Stock outstanding on the date of issuance of such rights or warrants plus the number of shares which the aggregate offering price of the
total number of shares so offered (assuming delivery to the Company in full of all consideration payable upon exercise of such rights, options or warrants) would purchase at such Closing Price. Such adjustment shall be made whenever such rights or
warrants are issued, and shall become effective immediately after the record date for the determination of stockholders entitled to receive such rights, options or warrants.

          d)      Pro Rata Distributions. If the Company, at any time while this Debenture is outstanding, distributes to all
holders of Common Stock (and not to the Holders) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security, then in each such case the Conversion Price shall be
adjusted by multiplying such Conversion Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the Closing Price determined
as of the record date mentioned above, and of which the numerator shall be such Closing Price on such record date less the then fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable
to 1 outstanding share of the Common Stock as determined by the Board of Directors of the Company in good faith. In either case the adjustments shall be described in a statement delivered to the Holder describing the portion of assets or evidences
of indebtedness so distributed or such subscription rights applicable to 1 share of Common Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above.

          e)      Fundamental Transaction. If, at any time while this Debenture is outstanding, (A) the Company effects any
merger or consolidation of the Company with or into another Person, (B) the Company effects any sale of all or substantially all of its assets in one transaction or a series of related transactions, (C) any tender offer or exchange offer (whether by
the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (D) the Company effects any reclassification of the 

11

Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental
Transaction”), then, upon any subsequent conversion of this Debenture, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to
the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of 1 share of Common Stock (the “Alternate Consideration”). For purposes of any such conversion, the determination of the Conversion Price shall
be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of 1 share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price
among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Debenture following such Fundamental Transaction.  To the extent necessary to effectuate the
foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new debenture consistent with the foregoing provisions and evidencing the Holder’s right to convert such
debenture into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 5(e) and
insuring that this Debenture (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. 

          f)      Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest
1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury
shares of the Company) issued and outstanding. 

          g)      Notice to the Holder. 

          i.      Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this
Section 5, the Company shall promptly mail to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

          ii.      Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other
distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting 

12

to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is
converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each
office or agency maintained for the purpose of conversion of this Debenture, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Debenture Register, at least 20 calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the
holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be
specified in such notice. The Holder is entitled to convert this Debenture during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice.

          Section 6.      Intentionally omitted. 

          Section 7.      Negative Covenants. As long as any portion of this Debenture remains outstanding, the Company
shall not, and shall not permit any of its subsidiaries (whether or not a Subsidiary on the Original Issue Date) to, directly or indirectly: 

          a)      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; 

          b)      amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially and
adversely affects any rights of the Holder; 

          c)      pay cash dividends or distributions on any equity securities of the Company other than regularly scheduled dividends on shares of the
Company’s various series of preferred stock which are issued and outstanding on or after the Closing Date; 

13

          d)      dispose of any material amount of the assets of the Company in one transaction or series of related transactions outside the ordinary course
of business; 

          e)      enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing 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 

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

Section 8.      Events of Default.

          a)      “Event of Default” means, wherever used herein, any of the following
events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or
governmental body): 

          i.      any default in the payment of (A) the principal amount of any Debenture or (B) interest, liquidated damages and other amounts owing to a
Holder on any Debenture, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B)
above, is not cured within 30 Trading Days; 

          ii.      the Company shall fail to observe or perform any other covenant or agreement contained in the Debentures (other than a breach by the
Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (xi) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) 30 Trading Days after
notice of such failure sent by the Holder or by any other Holder and (B) 35 Trading Days after the Company has become or should have become aware of such failure; 

          iii.      a default or event of default (subject to a 30 Trading Day grace or cure period) shall occur under (A) any of the Transaction Documents or
(B) any other material agreement, lease, document or instrument to which the Company or any Subsidiary is obligated (and not covered by clause (vi) below); 

          iv.      any representation or warranty made in this Debenture, any other Transaction Document, any written statement pursuant hereto or thereto, or
any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made, which is not cured, if possible to cure, within
the

14

earlier to occur of (A) 30 Trading Days after notice of such breach of a representation or warrant sent by the Holder or by any other Holder and (B) 35 Trading Days after the Company has become or should have become aware of such
breach of a representation or warrant; 

          v.       the Company or any Significant Subsidiary shall be subject to a Bankruptcy Event; 

          vi.      the
Company or any Subsidiary shall default on any of its obligations under any mortgage,
credit agreement or other facility, indenture  agreement, factoring agreement
or other instrument under which there may be issued, or by which there may be
secured or evidenced, any indebtedness for borrowed money or money due under
any long term leasing or factoring arrangement that (a)  involves an obligation
greater than $150,000, whether such indebtedness now exists or shall hereafter
be created, and (b) results in such indebtedness becoming or being declared due
and payable prior to the date on which it would otherwise  become due and payable;

          vii.      the
Common Stock shall not be eligible for listing or quotation for trading on a
Trading Market and shall not be eligible to resume  listing or quotation for
trading thereon within five Trading Days; 

          viii.     the
Company shall be a party to any Change of Control Transaction or Fundamental
Transaction or shall agree to sell or dispose of all or  in excess of 33% of
its assets in one transaction or a series of related transactions (whether or
not such asset sale or disposition would constitute a Change of Control Transaction); 

          ix.      a
Registration Statement shall not have been declared effective by the Commission
on or prior to the 270th calendar day after the Closing  Date; provided, that
it shall not be an Event of Default if such failure to obtain effectiveness is
primarily the result of issues relating to the SEC Guidance;

          x.       any monetary judgment, writ or similar final process shall be entered or filed against the Company, any Subsidiary or any of their
respective property or other assets for more than $150,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45 calendar days. 

          b) Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this
Debenture, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory Default
Amount.  Commencing 5 days after the occurrence of any Event of Default that results in the eventual acceleration of this Debenture, the interest

15

rate on this Debenture shall accrue at an interest rate equal to the lesser of 20% per annum or the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly
surrender this Debenture to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the
Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law.  Such acceleration may be rescinded and annulled by Holder at any
time prior to payment hereunder and the Holder shall have all rights as a holder of the Debenture until such time, if any, as the Holder receives full payment pursuant to this Section 8(b).  No such rescission or annulment shall affect any
subsequent Event of Default or impair any right consequent thereon. 

Section 9.     Assignment. 

          Holder may assign this Debenture and his rights and obligations hereunder, provided that such assignment is made to one or more accredited investors in compliance with the Securities Act. 

Section 10.   Miscellaneous.

          a)      Notices.
Any and all notices or other communications or deliveries to be provided by the
Holder hereunder,  including, without limitation, any Notice of Conversion, shall
be in writing and delivered personally, by facsimile, or sent by a nationally
recognized overnight courier service, addressed to the Company, at the address
set forth above, facsimile  number 407-551-4886, Attention: Alan
Weichselbaum or such other facsimile number or
address as the Company may specify for such purpose by notice to the Holder delivered
in accordance with  this Section 10. Any and all notices or other communications
or deliveries to be provided by the Company hereunder shall be in writing and
delivered personally, by facsimile, or sent by a nationally recognized overnight
courier service addressed to  each Holder at the facsimile number or address
of such Holder appearing on the books of the Company, or if no such facsimile
number or address appears, at the principal place of business of the Holder.
Any notice or other communication or  deliveries hereunder shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile number specified
in this Section 10 prior to 5:30 p.m. (New York  City time), (ii) the date immediately
following the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number specified in this Section 10 between 5:30
p.m. (New York City time) and 11:59 p.m. (New York  City time) on any date, (iii)
the second Business Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given. 

16

          b)     Absolute Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Debenture at the time, place, and rate, and in the coin or currency, herein
prescribed.  This Debenture is a direct debt obligation of the Company.  This Debenture ranks pari passu with all other Debentures
now or hereafter issued under the terms set forth herein.

          c)       Lost or Mutilated Debenture.  If this Debenture shall be mutilated, lost, stolen or destroyed, the Company
shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution for a lost, stolen or destroyed Debenture, a new Debenture for the principal amount of this Debenture so
mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof, reasonably satisfactory to the Company. 

          d)     Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this
Debenture 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 conflict of laws thereof.  Each party agrees that all legal proceedings concerning the
interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be
commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or
inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or 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 Debenture and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable 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 Debenture or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Debenture, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding. 

17

          e)     Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Debenture shall not
operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture. The failure of the Company or the Holder to insist upon strict adherence to any term of this Debenture on one
or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture. Any waiver by the Company or the Holder must be in writing.

          f)     Severability.  If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this
Debenture shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed
interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company
from paying all or any portion of the principal of or interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture, and the Company
(to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impeded the execution of any power herein granted to the Holder, but
will suffer and permit the execution of every such as though no such law has been enacted. 

          g)    Next
Business Day. Whenever any payment or other obligation
hereunder shall be due on a day other than a  Business Day, such payment shall
be made on the next succeeding Business Day. 

          h)     Headings.
The headings contained herein are for convenience only, do not constitute a part
of this  Debenture and shall not be deemed to limit or affect any of the provisions
hereof. 

          i)     Assumption.
Any successor to the Company or any surviving entity in a Fundamental Transaction
shall (i)  assume, prior to such Fundamental Transaction, all of the obligations
of the Company under this Debenture and the other Transaction Documents pursuant
to written agreements in form and substance satisfactory to the Holder (such
approval not to be  unreasonably withheld or delayed) and (ii) issue to the Holder
a new debenture of such successor entity evidenced by a written instrument substantially
similar in form and substance to this Debenture, including, without limitation,
having a  principal amount and interest rate equal to the principal amount and
the interest rate of this Debenture and having similar ranking to this Debenture,
which shall be satisfactory to the Holder (any such approval not to be unreasonably
withheld or  delayed). The provisions of this Section 10(i) shall apply similarly
and equally to

18

  successive Fundamental Transactions and
      shall be applied without regard to any limitations of this Debenture. 

*********************

 

 

 

 

 

19

          IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by a duly authorized officer as of the date first above indicated. 

  	 
	JESUP & LAMONT,
            INC. 
	 	 
	 	 
	By:	                                                                                

	 	Name: Steve Rabinovici, 
	 	Title:         Chairman 

 

 

 

 

20

ANNEX A

NOTICE OF CONVERSION

 The undersigned hereby elects to convert principal under the 9.0% Convertible Debenture due February 26, 2014 of Jesup & Lamont, Inc., a Florida corporation (the “Company”), into shares of common stock, par value $0.01 per share (the “Common Stock”), of the Company according to the conditions hereof, as of the date written
below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably
requested by the Company in accordance therewith.  No fee will be charged to the holder for any conversion, except for such transfer taxes, if any. 

 By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts specified under Section 4 of this Debenture, as determined in
accordance with Section 13(d) of the Exchange Act. 

 The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock.

	
Conversion calculations:		 		 	
	 		                  	
Date to Effect Conversion:	
	 	 	 
	 		 		
Principal Amount of Debenture to be Converted:	
	 	 	 
	 		 		
Number of shares of Common Stock to be issued:	
	 	 	 
	 	
	 	 	Signature: 

	 	 	 
	 		 		
Name:	
	 	 	 
	 		 		
Address:	

21

Schedule 1

CONVERSION SCHEDULE

The 9.0% Convertible Debentures due on February 26, 2014 in the aggregate principal amount of $2,000,000.00 are issued by Jesup & Lamont, Inc..  This Conversion Schedule reflects conversions made under Section 4 of the
above referenced Debenture. 

Dated:

	 		 		 	 	
	 		 		Aggregate 	 	
	 	 		Principal 	 	
	 	 	Amount 	 	
	Date of Conversion 
	Amount of 
	Remaining 	
      Company Attest 

	(or for first entry, 	
Conversion		Subsequent to 
	 	
	
Original Issue Date)		 		Conversion		 	
	 		 		(or original		 	
	 		 		Principal		 	
	 		 		
Amount)		 	
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

22

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