Document:

<PAGE>

                                                                    EXHIBIT 4(c)
                                                                    ------------

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR FOREIGN JURISDICTION AND
MAY NOT BE OFFERED OR SOLD WITHOUT COMPLIANCE WITH APPLICABLE FEDERAL, STATE OR
FOREIGN SECURITIES LAWS. THIS SECURITY IS ALSO SUBJECT TO RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT,
DATED AS OF MARCH 7, 2002, A COPY OF WHICH MAY BE OBTAINED FROM FRONTSTEP, INC.

No. [ ]
$[     ]

                                 FRONTSTEP, INC.

                    10.0% Subordinated Note due May 10, 2004

         Frontstep, Inc., an Ohio corporation (together with its successors and
assigns, the "ISSUER"), for value received hereby promises to pay to [ ]
(together with its successors, transferees and assigns, the "HOLDER") the
principal sum of [ ] (the "PRINCIPAL AMOUNT") by wire transfer of immediately
available funds to the Holder's account (the "BANK ACCOUNT") at a bank in the
United States specified by the Holder from time to time, in lawful money of the
United States together with interest thereon calculated from the date hereof in
accordance with the provisions of this Note.

         This Note was issued pursuant to the Securities Purchase Agreement (the
"SECURITIES PURCHASE AGREEMENT"), dated as of March 7, 2002 among the Issuer,
and certain other parties listed on the signature pages thereto. Unless the
context otherwise requires, as used herein, "NOTE" means any of the 10.0%
Subordinated Notes issued pursuant to the Securities Purchase Agreement and any
other similar Subordinated Notes issued by the Issuer in exchange for, or to
effect a transfer of, any Note and "NOTES" means all such Notes in the
aggregate.

         This Note shall bear interest, commencing March 7, 2002, at a rate per
annum (the "INTEREST RATE") equal to 10.0%. Further, the Issuer shall pay
interest on any overdue Principal Amount at a rate per annum equal to 14.0% (the
"OVERDUE RATE"), and interest on overdue installments of interest, to the extent
lawful, at the Overdue Rate. Interest on this Note will be calculated on the
basis of a 360-day year of twelve 30-day months.

         Notwithstanding anything herein to the contrary, the interest or any
amount deemed to be interest payable by the Issuer with respect to this Note
shall

<PAGE>

not exceed the maximum amount permitted by applicable law and, to the extent
that any payments in excess of such permitted amount are received by the Holder,
such excess shall be considered payments in respect of the principal amount of
this Note. All sums paid or agreed to be paid to the Holder for the use,
forbearance or retention of the indebtedness of the Issuer to the Holder shall,
to the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of such indebtedness until payment in full of
the principal so that the interest on account of such indebtedness shall not
exceed the maximum amount permitted by applicable law.

         Section 1.1. CERTAIN TERMS DEFINED. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Note shall have the respective meanings specified
below. All accounting terms used herein and not expressly defined shall have the
meanings given to them in accordance with U.S. generally accepted accounting
principles, and the term "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean
such accounting principles which are generally accepted as of the date hereof.
The terms defined in this Section 1.1 include the plural as well as the
singular.

         "ACCELERATION NOTICE" shall have the meaning set forth in Section 5.1.

         "AFFILIATE" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "control" when used with
respect to any Person means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized by law to close.

         "CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's capital stock whether now outstanding or issued after the date of this
Note, including without limitation, with respect to the Issuer, the Common
Shares and the Preferred Shares.

         "COMMON SHARES" means any and all shares of common stock, without par
value, of the Issuer.

         "DEBT" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes, or other similar instruments,
(iii) all obligations of such Person in respect of letters of credit or other
similar instruments (or reimbursement obligations with respect thereto), except
letters of credit or other similar instruments issued to secure payment of Trade
Payables,

                                       2
<PAGE>

(iv) all obligations of such Person to pay the deferred purchase price of
property or services, except Trade Payables, (v) all obligations of such Person
as lessee under capital leases, (vi) all Debt of others secured by a Lien on any
asset of such Person, whether or not such Debt is assumed by such Person and
(vii) all Debt of others Guaranteed by such Person.

         "DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.

         "DEFAULT NOTICE" shall have the meaning set forth in Section 6.2.

         "EVENT OF DEFAULT" means any event or condition specified as such in
Section 5.1 which shall have continued for the period of time, if any, therein
designated.

         "GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation of such other Person (whether arising
by virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation for
the payment thereof or to protect such obligee against loss in respect thereof
(in whole or in part), provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "GUARANTEE" used as a verb has a corresponding meaning.

         "HOLDERS" shall have the meaning set forth in Section 9.2.

         "LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Note, the Issuer shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capitalized lease or
other title retention agreement relating to such asset.

         "NASD" means the National Association of Securities Dealers, Inc., and
its successors.

         "NOTICE OF DEFAULT" shall have the meaning set forth in Section 5.1(c).

                                       3
<PAGE>

         "PERSON" means any individual or a corporation, partnership, limited
liability company, association, trust, or any other entity or organization
including a government or political subdivision or an agency or instrumentality
thereof.

         "PREFERRED SHARES" means any and all shares of preferred stock, without
par value, of the Issuer.

         "SENIOR DEBT" means the Debt of the Issuer to Foothill Capital
Corporation outstanding at any time.

         "TRADE PAYABLES" means accounts payable or any other indebtedness or
monetary obligations to trade creditors created or assumed by the Issuer in the
ordinary course of business in connection with the obtaining of materials or
services.

         Section 2.  PAYMENT OF PRINCIPAL AND INTEREST.

         Section 2.1. SCHEDULED PAYMENT OF PRINCIPAL. The Issuer shall pay the
Principal Amount, together with all accrued and unpaid interest thereon, if any,
in cash to the Holder of this Note on May 10, 2004.

         Section 2.2. PAYMENT OF INTEREST. The Issuer shall pay interest on this
Note quarterly in arrears, on March 31, June 30, September 30, and December 31
(unless such day is not a Business Day, in which event on the next succeeding
Business Day) (each an "INTEREST PAYMENT DATE") of each year in which this Note
remains outstanding, commencing with March 31, 2002, on the unpaid Principal
Amount outstanding in lawful money of the United States at the Interest Rate, or
Overdue Rate, as the case may be, as set forth above, by wire transfer of
immediately available funds, to the Bank Account, from the most recent Interest
Payment Date to which interest has been paid in full on this Note, or if no
interest has been paid on this Note, from the date hereof, until payment in full
of the Principal Amount has been made.

         Section 2.3. PREPAYMENT. With the consent of the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding, the Issuer
may prepay the Notes in whole or in part without penalty or fee; provided,
however, that such consent may not be unreasonably withheld.

         Section 2.4. PAYMENT OBLIGATIONS ABSOLUTE AND UNCONDITIONAL. No
provision of this Note shall alter or impair the obligations of the Issuer,
which are absolute and unconditional, to pay the Principal Amount of and
interest on this Note at the place, times, and rate, and in the currency, herein
prescribed.

         Section 2.5. PRO RATA PAYMENT. The Issuer agrees that any payments to
the Holders of the Notes (whether for principal, interest or otherwise) shall be
made PRO RATA among all such Holders based upon the aggregate unpaid Principal
Amount of the Notes held by each such Holder. If any Holder of a Note obtains

                                       4
<PAGE>

any payment (whether voluntary, involuntary, by application of offset or
otherwise) of principal or interest on such Note in excess of such Holder's PRO
RATA share of payments obtained by all Holders of the Notes, such Holder shall
make such payments to the other Holders of the Notes as is necessary to cause
such Holders to share the excess payment ratably among each of them as provided
in this Section.

         Section 3.1 HOLDER PUT RIGHT. (a) If the Convertible Closing (as
defined in the Securities Purchase Agreement) has not occurred, and is not
reasonably expected to occur, on or before August 31, 2002, then at the election
of a majority in aggregate principal amount of the Notes then outstanding, all
of the Notes shall be redeemed in whole, but not in part, by the Issuer on
August 31, 2002 (the "REDEMPTION DATE"), upon not less than 5 days' prior
written notice to the Issuer, at a redemption price equal to 100% of the
Principal Amount (the "REDEMPTION PRICE"), plus any accrued and unpaid interest
through but not including the Redemption Date.

         (b) With respect to any redemption of this Note pursuant to this
Section 3.1, at least 5 days before the Redemption Date, the Holders of a
majority in aggregate principal amount of the Notes then outstanding shall
deliver a notice requesting redemption to the Issuer. The notice shall state:

                  (i) the names and addresses of the Holders along with wire
transfer instructions setting forth the Bank Account for each Holder into which
payment is to be made;

                  (ii) that the Holder of a Note will surrender such Note to the
Issuer as promptly as practicable after the Redemption Price plus any accrued
and unpaid interest through but not including the Redemption Date on such Note
has been deposited in the Bank Account of such Holder; and

                  (iii) that, unless the Issuer defaults in making the
redemption payment, interest on the Notes shall cease to accrue on and after the
Redemption Date and the only remaining right of the Holders is to receive
payment of the Redemption Price plus accrued interest through but not including
the Redemption Date.

         (c) Once the notice requesting redemption has been sent, this Note
becomes due and payable on the Redemption Date and at the Redemption Price and
the Holder of this Note shall be deemed to have requested prepayment of this
Note without penalty or fee.

         (d) At or prior to 12:00 noon on the Redemption Date, the Issuer shall
deposit in the Bank Account of the Holder of this Note the Redemption Price of
this Note plus accrued interest through but not including the Redemption Date.

                                       5
<PAGE>

         (e) If notice requesting redemption has been given in the manner
provided above, this Note shall become due and payable on the Redemption Date at
the Redemption Price stated therein, together with accrued interest to such
Redemption Date, and on and after such date (unless the Issuer shall default in
the payment of this Note at the Redemption Price and accrued interest to the
Redemption Date, in which case the principal, until paid, shall bear interest
from the Redemption Date at the Overdue Rate) this Note shall cease to accrue
interest.

         Section 4.  COVENANTS.

         The Issuer agrees that, so long as any amount payable under this Note
remains unpaid:

         Section 4.1. INFORMATION. The Issuer will deliver to the Holder, within
three Business Days after any executive officer of the Issuer obtains knowledge
of any Default, if such Default is then continuing, a certificate of the chief
financial officer or the chief accounting officer of the Issuer setting forth
the details thereof and the action which the Issuer is taking or proposes to
take with respect thereto.

         Section 4.2. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The
Issuer will preserve, renew and keep in full force and effect its corporate
existence and its rights, privileges and franchises necessary or desirable in
the normal conduct of its business.

         Section 5.  EVENTS OF DEFAULT AND REMEDIES.

         Section 5.1. EVENT OF DEFAULT DEFINED; ACCELERATION OF MATURITY; WAIVER
OF DEFAULT. In case one or more of the following events ("EVENTS OF DEFAULT")
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be 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) shall have occurred and be continuing:

         (a) default in the payment of any interest upon any of the Notes as and
when the same shall become due and payable, and continuance of such default for
a period of three days; or

         (b) default in the payment of all or any part of the principal of any
of the Notes as and when the same shall become due and payable; or

         (c) failure on the part of the Issuer duly to observe or perform any
other of the covenants or agreements on the part of the Issuer contained in the
Notes for a period of 15 days after the date on which written notice specifying
such failure, stating that such notice is a "NOTICE OF DEFAULT" hereunder and
demanding that the Issuer remedy the same, shall have been given by registered
or certified mail, return receipt requested, to the Issuer; or

                                       6
<PAGE>

         (d) any acceleration of the maturity of any Debt of the Issuer or any
of its subsidiaries having a principal amount greater than $1,000,000; or

         (e) a final and non-appealable judgment or order (not covered by
insurance) for the payment of money shall be rendered against the Issuer or any
of its subsidiaries in excess of $1,000,000 in the aggregate for all such
judgments or orders (treating any deductibles, self insurance or retention as
not so covered), and such judgment or order shall continue unsatisfied for a
period of 60 days; or

         (f) a court having jurisdiction shall enter a decree or order for
relief in respect of the Issuer in an involuntary case under applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of the Issuer or for any substantial part of the property
of the Issuer or ordering the winding up or liquidation of the affairs of the
Issuer, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or

         (g) the Issuer shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Issuer or for any substantial part of the property of the Issuer, or the
Issuer shall make any general assignment for the benefit of creditors; or

         (h) the consummation of the consolidation or merger of the Issuer into
or with any other entity or entities which results in the exchange of
outstanding shares of the Issuer for securities or other consideration issued or
paid or caused to be issued or paid by any such entity or Affiliate thereof
(other than (x) a merger solely for the purpose of reincorporating the Issuer in
a different jurisdiction or (y) a consolidation or merger in which the Issuer is
the surviving entity and in which the Issuer's Capital Stock outstanding
immediately prior to such merger or consolidation are exchanged or converted
into or constitute more than 50% of the Issuer's voting power after such
consolidation or merger); (ii) the sale or transfer by the Issuer of all or
substantially all of its assets otherwise than to one or more Subsidiaries; or
(iii) a transaction or series of transactions in which a person or group of
persons (as defined in Rule 13d-5(b)1) of the Exchange Act), acquires beneficial
ownership (as determined in accordance with Rule 13d-3 of the Exchange Act) of
more than 50% of the voting power of the Issuer;

         then, and in each and every such case (other than an Event of Default
specified in Sections 5.1(f), 5.1(g) or 5.1(h) hereof), the Holders of at least
a majority in aggregate principal amount of the Notes then outstanding, by
notice in writing to the Issuer (the "ACCELERATION NOTICE"), may declare the
entire principal amount of the Notes and the interest accrued thereon to be due
and payable immediately, and upon any such declaration the same shall become
immediately due and payable; PROVIDED that if an Event of Default specified in
Section 5.1(f),

                                       7
<PAGE>

5.1(g) or 5.1(h) occurs, the principal amount of and accrued interest on the
Notes shall become and be immediately due and payable without any declaration or
other act on the part of any Holder.

         Section 5.2. POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER OF DEFAULT. No right or remedy herein conferred upon or reserved to any
Holder is intended to be exclusive of any other right or remedy, and every right
and remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

         No delay or omission of any Holder to exercise any right or power
accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right or power or shall be construed to be a waiver of any such
Event of Default or an acquiescence therein; and every power and remedy given by
the Notes or by law may be exercised from time to time, and as often as shall be
deemed expedient, by any Holder.

         Section 5.3. WAIVER OF PAST DEFAULTS. The Holders of the Notes may
waive, in accordance with Section 7.1, any past Default or Event of Default
hereunder and its consequences. In the case of any such waiver, the Issuer and
the Holders of the Notes shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.

         Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of the Notes; but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereon.

         Section 6.  SUBORDINATION.

         Section 6.1. NOTES SUBORDINATED TO SENIOR DEBT. The Issuer covenants
and agrees and each Holder, by his acceptance hereof likewise covenants and
agrees, that all Notes shall be issued subject to the provisions of Section 6 of
this Note; and each person holding any Note, whether upon original issue or upon
transfer, assignment or exchange thereof accepts and agrees that the payment of
the principal amount of and interest on the Notes by the Issuer shall, to the
extent and in the manner herein set forth, be subordinated and junior in right
of payment, to the prior payment in full of Senior Debt.

         Section 6.2. NO PAYMENT ON NOTES IN CERTAIN CIRCUMSTANCES. (a) If any
default in the payment of any principal of or interest on any Senior Debt when
due and payable, whether at maturity, upon any redemption, by declaration or

                                       8
<PAGE>

otherwise, occurs and is continuing, no payment shall be made by the Issuer with
respect to the principal of or interest on the Notes or to acquire any of the
Notes for cash or property other than conversion of the Notes into Common Shares
in accordance with Section 8.1 hereof.

         (b) If any event of default (other than a default in payment of the
principal of or interest on any Senior Debt) occurs and is continuing (or if
such an event of default would occur upon any payment with respect to the Notes)
with respect to any Senior Debt, as such event of default is defined in such
Senior Debt, permitting the holders thereof to accelerate the maturity thereof
and if the holder or holders or a representative of such holder or holders gives
written notice of the event of default to the Issuer (a "DEFAULT NOTICE"), then,
unless and until such event of default has been cured or waived or has ceased to
exist, the Issuer shall not be obligated to, and shall not, (x) make any payment
of or with respect to the principal of or interest on the Notes or (y) acquire
any of the Notes for cash or property or otherwise other than conversion of the
Notes into Common Shares in accordance with Section 8.1 hereof. After the event
of default described in such Default Notice has been cured or waived or ceases
to exist, the Issuer shall, subject to Section 6.2(a), promptly pay to the
Holders of the Notes all sums which the Issuer would have been obligated to pay
from the date of the Default Notice but for this Section 6.2(b).

         (c) Notwithstanding the foregoing, in the event that any payment in
cash shall be received by any Holder when such payment is prohibited by Section
6.2(a) or 6.2(b), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Debt or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Debt may have been issued, as their
respective interests may appear, but only to the extent of the amounts then due
and owing on the Senior Debt, if any.

         Section 6.3 Payment Over of Proceeds Upon Dissolution, Etc. (a) Upon
any payment or distribution of assets of the Issuer of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution or
winding-up or total or partial liquidation or reorganization of the Issuer,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due or to become due upon all Senior Debt shall
first be paid in full, or such payment duly provided for, before any payment is
made on account of the principal of or interest on the Notes, or any acquisition
of the Notes for cash or property is made other than conversion of the Notes
into Common Shares in accordance with Section 8.1 hereof. Upon any such
dissolution, winding-up, liquidation or reorganization, any payment or
distribution of assets of the Issuer of any kind or character, whether in cash,
property or securities, to which the Holders of the Notes would be entitled,
except for the provisions hereof, other than conversion of the Notes into Common
Shares in accordance with Section 8.1 hereof, shall be paid by the Issuer or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or

                                       9
<PAGE>

distribution, or by the Holders of the Notes if received by them, directly to
the holders of Senior Debt (pro rata to such holders on the basis of the
respective amounts of Senior Debt held by such holders) or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Senior Debt remaining
unpaid until all such Senior Debt has been paid in full after giving effect to
any concurrent payment, distribution or provision therefor to or for the holders
of Senior Debt.

         (b) Notwithstanding the foregoing, in the event that any payment or
distribution of assets of the Issuer of any kind or character, whether in cash,
property or securities, other than conversion of the Notes into Common Shares in
accordance with Section 8.1 hereof, shall be received by any Holder when such
payment or distribution is prohibited by Section 6.3(a), such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Senior Debt (pro rata to such holders on the
basis of the respective amount of Senior Debt held by such holders) or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of Senior Debt
remaining unpaid until all such Senior Debt has been paid in full, after giving
effect to any concurrent payment, distribution or provision therefor to or for
the holders of such Senior Debt.

         (c) For purposes of Section 6 of this Note, the words "CASH, PROPERTY
OR SECURITIES" shall not be deemed to include (x) shares of stock of the Issuer
as reorganized or readjusted, (y) any payment or distribution of securities of
the Issuer or any other Issuer authorized by an order or decree giving effect,
and stating in such order or decree that effect is given, to the subordination
of the Notes to the Senior Debt, and made by a court of competent jurisdiction
in a reorganization proceeding under any applicable bankruptcy, insolvency or
other similar law, or (z) securities of the Issuer or any other Issuer provided
for by a plan of reorganization or readjustment which are subordinated, to at
least the same extent as the Notes, to the payment of all Senior Debt then
outstanding; provided that (i) if a new Issuer results from such reorganization
or readjustment, such Issuer assumes the Senior Debt and (ii) the rights of the
holders of the Senior Debt are not, without the consent of such holders, altered
by such reorganization or readjustment. Notwithstanding anything to the contrary
in this Section 6, (i) a court referred to in clause (x) above may give effect,
and state that it is giving effect to the subordination of the Notes in an order
or decree which authorizes the payment in full of Senior Debt in assets other
than cash or cash equivalents and (ii) any assets which the holders of the Notes
are permitted to receive in accordance with the provisions of this Section 6
shall not be subject to any claim by or on behalf of the holders of Senior Debt.

         6.4. Subrogation. Subject to the payment in full of all Senior Debt,
the Holders of the Notes shall be subrogated to the rights of the holders of
Senior

                                       10
<PAGE>

Debt to receive payments or distributions of cash, property or securities of the
Issuer applicable to the Senior Debt until the principal amount of and interest
on the Notes shall be paid in full; and, for the purposes of such subrogation,
(a) no payments or distributions to the holders of the Senior Debt of any cash,
property or securities to which the Holders of the Notes would be entitled
except for the provisions of Section 6 of this Note, and no payment over
pursuant to the provisions of Section 6 of this Note to the holders of Senior
Debt by the Holders of the Notes shall, as between the Issuer, its creditors
other than holders of Senior Debt, and the Holders of the Notes, be deemed to be
a payment by the Issuer to or on account of the Senior Debt, and (b) no payment
or distributions of cash, property or securities to or for the benefit of the
Holders of the Notes pursuant to the subrogation provision of Section 6, which
would otherwise have been paid to the holders of Senior Debt shall, as between
the Issuer, its creditors other than holders of Senior Debt, and the Holders of
the Notes, be deemed to be a payment by the Issuer to or for the account of the
Holders of the Notes. It is understood that the provisions of this Section are
and are intended solely for the purpose of defining the relative rights of the
Holders of the Notes, on the one hand, and the holders of the Senior Debt, on
the other hand.

         If any payment or distribution to which the Holders of the Notes would
otherwise have been entitled but for the provisions of this Section 6, shall
have been applied, pursuant to the provisions of this Section 6, to the payment
of all amounts payable under Senior Debt, then and in such case, the Holders of
the Notes shall be entitled to receive from the holders of such Senior Debt any
payments or distributions received by such holders of Senior Debt in excess of
the amount required to make payment in full of such Senior Debt.

         Section 6.5. OBLIGATIONS OF ISSUER UNCONDITIONAL. Nothing contained in
Section 6.1 or elsewhere in the Notes is intended to or shall impair, as between
the Issuer and the Holders of the Notes, the obligation of the Issuer, which is
absolute and unconditional, to pay to the Holders of the Notes the principal
amount of and interest on the Notes as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders of the Notes and creditors of the Issuer other
than the holders of the Senior Debt, nor shall anything herein or therein
prevent any Holder from exercising all remedies otherwise permitted by
applicable law upon default under this Note, subject to the rights, if any,
under Section 6 of the holders of the Senior Debt in respect of cash, property
or securities of the Issuer received upon the exercise of any such remedy.

         Without limiting the generality of the foregoing, nothing contained in
Section 6 will restrict the right of the Holders of the Notes to take any action
to declare the Notes to be due and payable prior to their stated maturity
pursuant to Section 5.1 or to pursue any rights or remedies hereunder.

         Section 6.6. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT. Upon any payment or distribution of assets of the Issuer referred to in

                                       11
<PAGE>

Section 6, the Holders of the Notes shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which bankruptcy,
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other person making such payment or distribution, delivered to the
Holders of the Notes, for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Debt and other
indebtedness of the Issuer, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
Section 6 of this Note.

         Section 6.7. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
THE ISSUER OR HOLDERS OF SENIOR DEBT. No right of any present or future holders
of any Senior Debt to enforce subordination as provided herein will at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
the Issuer or by any act or failure to act, in good faith, by any such holder,
or by any noncompliances by the Issuer with the terms of this Note, regardless
of any knowledge thereof which any such holder may have or otherwise be charged
with. The holders of Senior Debt may extend, renew, modify or amend the terms of
the Senior Debt or any security therefor and release, sell or exchange such
security and otherwise deal freely with the Issuer, all without affecting the
liabilities and obligations of the Holders of the Notes.

         Section 6.8. SECTION 6 NOT TO PREVENT EVENTS OF DEFAULT. The failure to
make a payment on account of principal of or interest on the Notes by reason of
any provision of Section 6 will not be construed as preventing the occurrence of
an Event of Default.

         Section 7.1. MODIFICATION OF NOTES. Any provision of this Note may be
amended or, subject to Section 5, waived with the written consent of the Issuer
and the Holders of at least a majority in aggregate principal amount of the
Notes then outstanding; PROVIDED that no such amendment or waiver shall (a)
extend the final maturity of any Note, or reduce the principal amount thereof,
or reduce the rate or extend the time of payment of interest thereon, or reduce
any amount payable on the conversion thereof, amend or waive Section 5.1, or
impair or affect the rights of any Holder to institute suit for the payment
thereof or adversely affect the ranking of the Notes with respect to the
outstanding Debt of the Issuer, in each such case, without the consent of each
Holder of each Note so affected, (b) reduce the aforesaid percentage of Holders
of the Notes, the consent of the Holders of the Notes of which is required for
any such amendment or waiver, without the consent of the Holders of all Notes
then outstanding, or (c) modify the terms of the Notes so as to affect adversely
the rights of any holder of Senior Debt at the time outstanding to the benefits
of subordination hereunder without the consent of such holder; and for such
purposes the following modifications to the terms of this Note or, as
applicable, the Securities Purchase Agreement, shall be deemed to adversely
affect the rights of the holders of the Senior Debt: (i) shortening the maturity
date of the principal amount of this Note; (ii) increasing the interest rate
under this Note; (iii) increasing the principal amount of the Notes

                                       12
<PAGE>

issued under the Securities Purchase Agreement; (iv) modifying the required
prepayments under this Note; and (v) amending the events constituting Defaults
under this Note in a manner adverse to the Company or the holders of the Senior
Debt. The Issuer shall promptly notify all of the Holders of the Notes after the
making of any amendment or waiver pursuant to this Section 7.1.

         Section 8.1. CONVERSION. (a) After the Convertible Closing (as defined
in the Securities Purchase Agreement), the Principal Amount of this Note shall
be convertible at any time and from time to time, in whole or in part (such
amount, the "CONVERTIBLE AMOUNT") at the option of the Holder hereof and upon
notice to the Issuer as set forth below, into fully paid and nonassessable
Common Shares at the Conversion Rate (as defined below). The initial conversion
price per Common Share will be 80% of the Daily Price per Common Share for the
ten (10) consecutive trading days immediately preceding the two consecutive
trading days immediately prior to the day of the Company Shareholder Meeting (as
defined in the Securities Purchase Agreement) and shall be subject to adjustment
as provided for herein (the "CONVERSION PRICE"). The number of Common Shares
deliverable upon conversion of each $1,000 Convertible Amount of the Notes,
adjusted as hereinafter provided, is referred to herein as the "CONVERSION
RATE". The initial Conversion Rate shall be equal to the quotient resulting from
dividing $1000 by the Conversion Price.

         (b) The Conversion Price (and the corresponding Conversion Rate) shall
be subject to adjustment from time to time as follows:

                  (i) In case the Issuer shall at any time after the date of the
Convertible Closing (A) pay a dividend in Common Shares or make a distribution
in Common Shares, (B) subdivide or split its outstanding Common Shares, (C)
combine or reclassify its outstanding Common Shares into a smaller number of
Common Shares, (D) issue by reclassification of its Common Shares other
securities of the Issuer (including any such reclassification in connection with
a consolidation or merger in which the Issuer is the continuing corporation), or
(E) consolidate with, or merge with or into, any other Person, then in each such
case the Conversion Rate in effect at the time of the record date for any such
dividend or distribution or of the effective date of any such subdivision,
split, combination, consolidation, merger or reclassification shall be
proportionately adjusted so that the conversion of the Note after such time
shall entitle the Holder to receive the kind and aggregate number of Common
Shares or other securities of the Issuer (or shares of any security into which
such Common Shares have been combined, consolidated, merged, converted or
reclassified pursuant to clause (C), (D), or (E) above) which, if this Note had
been converted immediately prior to such time, such Holder would have owned upon
such conversion and been entitled to receive by virtue of such dividend,
distribution, subdivision, split, combination, consolidation, merger or
reclassification, assuming for purposes of this subsection 8.1(b)(i) that such
Holder (x) is not a Person with which the Issuer consolidated or into which the
Issuer merged or which merged into the Issuer or to which such

                                       13
<PAGE>

recapitalization, sale or transfer was made, as the case may be ("CONSTITUENT
PERSON") and (y) failed to exercise any rights of election as to the kind or
amount of securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, recapitalization, sale or
transfer (provided, that if the kind or amount of securities, cash and other
property receivable upon such reclassification, change, consolidation, merger,
recapitalization, sale or transfer is not the same for each Common Share of the
Issuer held immediately prior to such reclassification, change, consolidation,
merger, recapitalization, sale or transfer by other than a constituent person
and in respect of which such rights of election shall not have been exercised
("NON-ELECTING SHARE"), then for the purpose of this Section 8.1(b)(i) the kind
and amount of securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, recapitalization, sale or
transfer by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). Such adjustment
shall be made successively whenever any event listed above shall occur.

                  (ii) In case the Issuer shall issue or sell any Common Shares
(other than Common Shares issued (1) pursuant to the Issuer's non-qualified
stock option plans for officers, directors or key employees, or pursuant to any
similar Common Share related employee compensation plan of the Issuer approved
by the Issuer's Board of Directors, (2) in connection with a merger or
consolidation with or other acquisition of, another Person or the acquisition of
the assets of another Person, other than any such transaction that constitutes a
Change in Control Liquidation Event (as such term is defined in the Issuer's
Amended and Restated Articles of Incorporation) or (3) upon exercise or
conversion of any security the issuance of which caused an adjustment under
Section 8.1(b)(iii) or (iv) hereof) without consideration or for a consideration
per share less than the Conversion Price (the "ISSUE PRICE"), the Conversion
Price to be in effect after such issuance or sale shall be determined by
multiplying the Conversion Price in effect immediately prior to such issuance or
sale by a fraction, the numerator of which shall be the sum of (x) the number of
Common Shares outstanding immediately prior to the time of such issuance or sale
multiplied by the Issue Price and (y) the aggregate consideration, if any, to be
received by the Issuer upon such issuance or sale, and the denominator of which
shall be the product of the aggregate number of Common Shares outstanding
immediately after such issuance or sale and the Conversion Price. In case any
portion of the consideration to be received by the Issuer shall be in a form
other than cash, the fair market value of such noncash consideration shall be
utilized in the foregoing computation. Such fair market value shall be
determined by the Board of Directors of the Issuer; provided that if Holders of
50% or more of the outstanding aggregate principal amount of the Notes shall
object to any such determination, the Board of Directors of the Issuer shall
retain an independent appraiser reasonably satisfactory to a majority of such
Holders to determine such fair market value. Such Holders shall be notified
promptly of any consideration other than cash to be received by the Issuer and
furnished with a description of the

                                       14
<PAGE>

consideration and the fair market value thereof, as determined by the Board of
Directors of the Issuer.

                  (iii) In case the Issuer shall fix a record date for the
issuance of rights, options or warrants to the holders of Common Shares or other
securities entitling such holders to subscribe for or purchase for a period
expiring within 60 days of such record date Common Shares (or securities
convertible into Common Shares) at a price per Common Share (or having a
conversion price per Common Share, if a security convertible into Common Shares)
less than the Conversion Price on such record date, the maximum number of Common
Shares issuable upon exercise of such rights, options or warrants (or conversion
of such convertible securities) shall be deemed to have been issued and
outstanding as of such record date and the Conversion Price shall be adjusted
pursuant to paragraph (b)(ii) hereof, as though such maximum number of Common
Shares had been so issued for an aggregate consideration payable by the holders
of such rights, options, warrants or convertible securities prior to their
receipt of such Common Shares. In case any portion of such consideration shall
be in a form other than cash, the fair market value of such noncash
consideration shall be determined as set forth in Section 8(b)(ii) hereof. Such
adjustment shall be made successively whenever such record date is fixed; and in
the event that such rights, options or warrants are not so issued or expire
unexercised, or in the event of a change in the number of Common Shares to which
the holders of such rights, options or warrants are entitled (other than
pursuant to adjustment provisions therein comparable to those contained in this
Section 8(b)), the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such record date had not been fixed, in
the former event, or the Conversion Price which would then be in effect if such
holder had initially been entitled to such changed number of Common Shares, in
the latter event.

                  (iv) In case the Issuer shall issue rights, options (other
than options issued pursuant to a plan described in Section 8(b)(ii)) or
warrants entitling the holders thereof to subscribe for or purchase Common
Shares (or securities convertible into Common Shares) or shall issue convertible
securities, and the price per Common Share of such rights, options, warrants or
convertible securities (including, in the case of rights, options or warrants,
the price at which they may be exercised) is less than the Conversion Price, the
maximum number of Common Shares issuable upon exercise of such rights, options
or warrants or upon conversion of such convertible securities shall be deemed to
have been issued and outstanding as of the date of such sale or issuance, and
the Conversion Price shall be adjusted pursuant to Section 8(b)(ii) hereof as
though such maximum number of Common Shares had been so issued for an aggregate
consideration equal to the aggregate consideration paid for such rights,
options, warrants or convertible securities and the aggregate consideration
payable by the holders of such rights, options, warrants or convertible
securities prior to their receipt of such Common Shares. In case any portion of
such consideration shall be in a form other than cash, the fair market value of
such noncash consideration

                                       15
<PAGE>

shall be determined as set forth in Section 8(b)(ii) hereof. Such adjustment
shall be made successively whenever such rights, options, warrants or
convertible securities are issued; and in the event that such rights, options or
warrants expire unexercised, or in the event of a change in the number of Common
Shares to which the holders of such rights, options, warrants or convertible
securities are entitled (other than pursuant to adjustment provisions therein
comparable to those contained in this Section 8(b)), the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such rights, options, warrants or convertible securities had not been issued, in
the former event, or the Conversion Price which would then be in effect if such
holders had initially been entitled to such changed number of Common Shares, in
the latter event. No adjustment of the Conversion Price shall be made pursuant
to this Section 8(b)(iv) to the extent that the Conversion Price shall have been
adjusted pursuant to Section 8(b)(iii) upon the setting of any record date
relating to such rights, options, warrants or convertible securities and such
adjustment fully reflects the number of Common Shares to which the holders of
such rights, options, warrants or convertible securities are entitled and the
price payable therefor.

                  (v) In case the Issuer shall fix a record date for the making
of a dividend or distribution to holders of Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Issuer is the continuing corporation) of evidences of indebtedness, cash, assets
or other property (other than dividends payable in Common Shares or rights,
options or warrants referred to in, and for which an adjustment is made pursuant
to, Section 8(b)(iii) hereof), the Conversion Price to be in effect after such
record date shall be determined by multiplying the Conversion Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Current Market Price Per Common Share (as defined below) on such
record date, less the fair market value (determined as set forth in Section
8(b)(ii) hereof) of the portion of the cash, assets, other property or evidence
of indebtedness so to be distributed which is applicable to one Common Share,
and the denominator of which shall be such Current Market Price Per Common
Share. Such adjustments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such record date had not been fixed.

                  (vi) For the purpose of any computation under Section 8(b)
hereof, on any determination date, the "CURRENT MARKET PRICE PER COMMON SHARE"
shall be deemed to be the average (weighted by daily trading volume) of the
Daily Prices (as defined below) per Common Share for the 20 consecutive trading
days immediately prior to such date. "DAILY Price" means (1) if the Common
Shares then are listed and traded on the New York Stock Exchange, Inc. ("NYSE"),
the closing price per share on such day as reported on the NYSE Composite
Transactions Tape; (2) if the Common Shares then are not listed and traded on
the NYSE, the closing price per share on such day as reported by the

                                       16
<PAGE>

principal national securities exchange on which the shares are listed and
traded; (3) if the Common Shares then are not listed and traded on any such
securities exchange, the last reported sale price per share on such day on the
NASDAQ National Market; or (4) if the shares of such class of Common Shares then
are not traded on the NASDAQ Stock Market, the average of the highest reported
bid and lowest reported asked price per share on such day as reported by NASDAQ.
If on any determination date the Common Shares are not quoted by any such
organization, the Current Market Price Per Common Share shall be the fair market
value per share of such shares on such determination date as determined by the
Board of Directors of the Issuer. If Holders of 50% or more of the outstanding
aggregate principal amount of the Notes shall object to any determination by the
Board of Directors of the Issuer of the Current Market Price Per Common Share,
the Current Market Price Per Common Share shall be the fair market value per
Common Share as determined by an independent appraiser retained by the Issuer at
its expense and reasonably acceptable to such Holders. For purposes of any
computation under this Section 8(b), the number of Common Shares outstanding at
any given time shall not include shares owned or held by or for the account of
the Issuer.

                  (vii) All calculations under this Section 8(b) shall be made
to the nearest one tenth of a cent or to the nearest hundredth of a share, as
the case may be.

                  (viii) In the event that, at any time as a result of the
provisions of this Section 8(b), the Holder of this Note upon subsequent
conversion shall become entitled to receive any shares of Capital Stock of the
Issuer other than Common Shares, the number of such other shares so receivable
upon conversion of this Note shall thereafter be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions contained herein.

                  (ix) If the Issuer shall take a record of the Holders of
Common Shares for the purpose of entitling them to receive a dividend or other
distribution (which results in an adjustment to the Conversion Price under the
terms hereof) and shall, thereafter and before such dividend or distribution is
paid or delivered to shareholders entitled thereto, legally abandon its plan to
pay or deliver such dividend or distribution, then any adjustment made to the
Conversion Price and number of Common Shares purchasable upon conversion of the
Notes by reason of the taking of such record shall be reversed, and any
subsequent adjustments, based thereon, shall be recomputed.

         (c) (i) In order to exercise the conversion privilege, the Holder of
the Note to be converted shall surrender the Note, with a written notice to the
Issuer that such Holder elects to exercise its conversion privilege, and stating
the Convertible Amount of Notes which the Holder seeks to convert. The date of

                                       17
<PAGE>

receipt of the Note or Notes by the Issuer shall be the conversion date (the
"CONVERSION DATE").

                  (ii) As promptly as practicable (but no later than three
Business Days) after the Conversion Date, the Issuer shall issue and shall
deliver to such Holder, or on the Holder's written order to the Holder's
permitted transferee in accordance with the terms of the Amended and Restated
Investor Rights Agreement, a certificate or certificates for the whole number of
Common Shares issuable upon the conversion of such Note or Notes in accordance
with the provisions of this Section 8.1.

                  (iii) In the case where only part of a Note is converted, the
Issuer shall execute and deliver (at its own expense) a new Note of any
authorized denomination as requested by a Holder in an aggregate principal
amount equal to and in exchange for the unconverted portion of the Principal
Amount of the Note so surrendered.

                  (iv) The Issuer shall make a cash payment equal to all accrued
and unpaid interest on the Principal Amount so surrendered for conversion (other
than interest payments payable to a holder of record on a prior Interest Payment
Date) to the Conversion Date.

                  (v) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the Notes to be
converted shall have been surrendered to the Issuer, and the person in whose
name or names any certificate or certificates for Common Shares shall be
issuable upon such conversion shall be deemed to have become the holder of
record of the Common Shares represented thereby on such date and such conversion
shall be into a number of Common Shares resulting from applying the Conversion
Rate in effect at such time on such date. All Common Shares delivered upon
conversion of the Notes will upon delivery be duly and validly issued and fully
paid and non-assessable, free of all Liens and charges and not subject to any
preemptive rights. Upon the surrender of any Notes for conversion, such Notes or
part thereof so converted shall no longer be deemed to be outstanding and all
rights of a Holder with respect to such Notes or part thereof so converted
including the rights, if any, to receive interest, notices and consent rights
shall immediately terminate on the Conversion Date except the right to receive
the Common Shares and other amounts payable pursuant to this Section 8.1. Any
Notes or part thereof so converted shall be retired and cancelled.

         (d) (i) The Issuer covenants that it will at all times during which the
Notes shall be outstanding reserve and keep available, free from preemptive
rights, such number of its authorized but unissued Common Shares as shall from
time to time be required for the purpose of effecting conversions of outstanding
Notes.

                                       18
<PAGE>

                  (ii) Prior to the delivery of any securities which the Issuer
shall be obligated to deliver upon conversion of the Notes, the Issuer shall
comply with all applicable federal and state laws and regulations which require
action to be taken by the Issuer.

         (e) The Issuer will pay any and all documentary stamp or similar issue
or transfer taxes payable in respect of the issue or delivery of Common Shares
on conversion of the Notes pursuant hereto; provided that the Issuer shall not
be required to pay any tax which may be payable in respect of any transfer
involved in the issue or delivery of Common Shares in a name other than that of
the Holder of the Notes to be converted and no such issue or delivery shall be
made unless and until the person requesting such issue or delivery has paid to
the Issuer the amount of any such tax or has established, to the satisfaction of
the Issuer, that such tax has been paid.

         (f) If the conversion is in connection with an underwritten offering of
securities registered pursuant to the Securities Act of 1933, as amended, the
conversion may, at the option of any Holder tendering Notes for conversion, be
conditioned upon the closing with the underwriter of the sale of securities
pursuant to such offering, in which event the Holders entitled to receive the
Common Shares issuable upon such conversion of the Notes shall not be deemed to
have converted such Notes until immediately prior to the closing of the sale of
securities in such offering.

         (g) No fractional Common Shares shall be issued upon conversion of the
Notes. In lieu of fractional shares, the Issuer shall pay cash equal to such
fraction multiplied by the Daily Price for Common Shares on the trading day
immediately preceding the related Conversion Date.

         (h) Upon the occurrence of each adjustment or readjustment of the
Conversion Rate pursuant to this Section 8.1, the Issuer at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and furnish to each Holder of Notes outstanding a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based and shall file a copy of such
certificate with its corporate records. The Issuer shall, upon the reasonable
written request of any Holder of Notes, furnish or cause to be furnished to such
Holders a similar certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Rate then in effect, and (iii) the number of
Common Shares and the amount, if any, of other property which then would be
received upon the conversion of the Notes. Despite such adjustment or
readjustment, the form of each or all Notes, if the same shall reflect the
initial or any subsequent Conversion Rate, need not be changed in order for the
adjustments or readjustments to be valid in accordance with the provisions of
this Note, which shall control.

                                       19
<PAGE>

         (i) The Issuer will not, by amendment of its Articles of Incorporation
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Issuer, but will at all times in good faith assist
in the carrying out of all the provisions of this Section 8.1 and in the taking
of all such action as may be necessary or appropriate in order to protect the
conversion rights of the Holders of the Notes against impairment to the extent
required hereunder. Nothing in this Section 8.1 shall affect the continued
accrual of interest on the outstanding Notes in accordance with the terms of
this Note.

         (j) Notwithstanding anything to the contrary contained in this Section
8.1, prior to shareholder approval of the issuance of the Convertible Notes (as
defined in the Securities Purchase Agreement) as contemplated under Section 5.06
of the Securities Purchase Agreement and as required under applicable NASDAQ
rules, this Note shall not be convertible and no adjustment shall be made to the
Conversion Price which would increase the number of Common Shares issuable upon
conversion of this Note to the extent that such issuance would cause the Company
to violate its obligation to obtain such prior shareholder approval.

         Section 9. MISCELLANEOUS

         Section 9.1. TRANSFER RESTRICTIONS. This Note is transferable and
assignable to one or more purchasers, provided that such transfer or assignment
is made in compliance with the Securities Act of 1933, as amended, and any
applicable state and foreign securities laws and in compliance with Article 2 of
the Amended and Restated Investor Rights Agreement. The Issuer agrees to issue
from time to time a replacement Note or Notes in the form hereof and in such
denominations as the Holder may request to facilitate such transfers and
assignments upon surrender of the Note or Notes being transferred. In addition,
after delivery of an indemnity in form and substance reasonably satisfactory to
the Issuer, the Issuer also agrees to issue a replacement Note if this Note has
been lost, stolen, mutilated or destroyed.

         Section 9.2. REGISTRATION. The Issuer shall keep at its principal
office a register (the "REGISTER") in which shall be entered the name and
address of the registered holder of this Note and particulars of this Note and
of all transfers of this Note. References to the "HOLDERS" shall mean the
Persons listed in the Register as the payees of the Notes unless any payee shall
have presented a Note to the Issuer for transfer and the transferee shall have
been entered in the Register as a subsequent holder, in which case the term
shall mean such subsequent holder. The ownership of this Note shall be proven by
the Register. For the purpose of paying interest and principal on this Note, the
Issuer shall be entitled to rely on the name and address in the Register and
notwithstanding anything to the contrary contained in this Note, no Event of
Default shall occur under Section 5.1(a) or (b)

                                       20
<PAGE>

if payment of interest and principal is made in accordance with the name and
address and particulars contained in the Register.

         Section 9.3. GOVERNING LAW. This Note shall be deemed to be a contract
under the laws of the State of Ohio, and for all purposes shall be construed in
accordance with the laws of said State, except as may otherwise be required by
mandatory provisions of law.

         Section 9.4. WAIVER OF PRESENTMENT, ACCEPTANCE. The parties hereto,
including all guarantors or endorsers, hereby waive presentment, demand, notice,
protest and all other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this Note, except as specifically
provided herein. The Holder of this Note by acceptance hereof agrees to be bound
by the provisions of the Notes which are expressly binding on the Holder.

         Section 9.5. SECTION HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.

                                       21
<PAGE>

         IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.

Dated: [     ], 2002

                                       FRONTSTEP, INC.
                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:

                                       22<PAGE>
                                                                   EXHIBIT 10.23

[EXECUTIVE BENEFIT SERVICES, INC. LOGO]

                     THE EXECUTIVE NONQUALIFIED EXCESS PLAN
                                GM OFFSHORE, INC.

                                  PLAN DOCUMENT

                                       (C) 2000 EXECUTIVE BENEFIT SERVICES, INC.
                                           434 FAYETTEVILLE STREET, SUITE 1160
                                           RALEIGH, NC  27601
<PAGE>

                                 TABLE OF CONTENTS

                     THE EXECUTIVE NONQUALIFIED EXCESS PLAN
<TABLE>
<CAPTION>
                                                                          Page
                                                                          ----
<S>     <C>                                                                 <C>
Section 1. Purpose...........................................................1

Section 2. Definitions.......................................................1
  2.1  "Accrued Benefit".....................................................1
  2.2  "Active Participant"..................................................1
  2.3  "Adoption Agreement"..................................................1
  2.4  "Adjustment Date".....................................................1
  2.5  "Beneficiary".........................................................2
  2.6  "Board"...............................................................2
  2.7  "College Education Account" ..........................................2
  2.8  "Committee"...........................................................2
  2.9  "Compensation"........................................................2
  2.10 "Deferred Compensation Account".......................................2
  2.11 "Dependent Subaccount"................................................2
  2.12 "Disability"..........................................................2
  2.13 "Effective Date"......................................................3
  2.14 "Eligible Dependent"..................................................3
  2.15 "Employee"............................................................3
  2.16 "Employer"............................................................3
  2.17 "Employer Matching Credits"...........................................3
  2.18 "Employer Performance Incentive Credits"..............................3
  2.19 "Independent Contractor"..............................................4
  2.20 "Normal Retirement Age"...............................................4
  2.21 "Participant".........................................................4
  2.22 "Participating Employer"..............................................4
  2.23 "Plan"................................................................4
  2.24 "Plan Administrator"..................................................4
  2.25 "Plan Year"...........................................................5
  2.26 "Qualified Distribution Event"........................................5
  2.27 "Retire" of "Retirement"..............................................5
  2.28 "Salary Deferral Agreement"...........................................5
  2.29 "Salary Deferral Credits".............................................5
  2.30 "Service".............................................................5
  2.31 "Sponsor".............................................................5
  2.32 "Spouse" or "Surviving Spouse"........................................5
  2.33 "Trust"...............................................................5
  2.34 "Trustee" ............................................................5
  2.35 "Years of Service"....................................................5
</TABLE>
<PAGE>
<TABLE>
<S>     <C>                                                                 <C>
Section 3. Credits to Deferred Compensation Account..........................6
  3.1  Salary Deferral Credits...............................................6
  3.2  Employer Matching Credits.............................................7
  3.3  Employer Performance Incentive Credits................................7

Section 4. Qualifiying Distribution Events...................................7
  4.1  Death of a Participant................................................7
  4.2  Disability............................................................7
  4.3  Termination of Service................................................7
  4.4  Retirement............................................................8

Section 5. In-Service Withdrawals............................................8
  5.1  Regular In-Service Withdrawals....................................... 8
  5.2  Financial Hardship Withdrawals....................................... 9
  5.3  "Haircut" Withdrawals................................................10
  5.4  College Education Withdrawals........................................10

Section 6. Qualified Distribution Events Payment Options....................11
  6.1  Payment Options..................................................... 11
  6.2  Prepayment.......................................................... 11
  6.3  Benefit Exchange.....................................................12

Section 7. Vesting..........................................................12

Section 8. Account; Deemed Investment; Adjustment of Accounts...............12
  8.1  Account............................................................. 12
  8.2  Deemed Investments...................................................12
  8.3  Adjustments to Deferred  Compensation Accounts.......................13

Section 9 Administration by Committee.......................................13
  9.1  Membership of Committee..............................................13
  9.2  Committee officers; Subcommittee.....................................13
  9.3  Committee meetings...................................................14
  9.4  Transaction of business..............................................14
  9.5  Committee records....................................................14
  9.6  Establishment of rules...............................................14
  9.7  Conflicts of interest................................................14
  9.8  Correction of errors.................................................14
  9.9  Authority to interpret Plan..........................................15
  9.10 Third party advisors.................................................15
  9.11 Compensation of members..............................................15
  9.12 Expense reimbursement................................................15
  9.13 Indemnification......................................................15

Section 10. Contractual Liability; Trust....................................16
  10.1 Contractual Liability............................................... 16
  10.2 Trust............................................................... 16
</TABLE>
<PAGE>
<TABLE>
<S>                                                                        <C>
Section 11. Allocation of Responsibilities..................................16
  11.1 Board................................................................17
  11.2 Committee............................................................17
  11.3 Plan Administrator...................................................17

Section 12. Benefits Not Assignable; Facility of Payments...................18
  12.1 Benefits not assignable..............................................18
  12.2 Payments to minors and others........................................18

Section 13. Beneficiary.....................................................18

Section 14. Amendment and Termination of Plan...............................19

Section 15. Communication to Participants...................................19

Section 16. Claims Procedure................................................19
   16.1 Filing of a claim for benefits......................................19
   16.2 Notification to claimant of decision................................20
   16.3 Procedure for review................................................20
   16.4 Decision on review..................................................20
   16.5 Action by authorized representative of claimant.....................21

Section 17. Miscellaneous Provisions........................................21
  17.1 Set off..............................................................21
  17.2 Notices..............................................................21
  17.3 Lost distributees....................................................22
  17.4 Reliance on data.....................................................22
  17.5 Receipt and release for payments.....................................22
  17.6 Headings.............................................................22
  17.7 Continuation of employment...........................................22
  17.8 Merger or consolidation..............................................23
  17.9 Construction.........................................................23
</TABLE>
<PAGE>
                     THE EXECUTIVE NONQUALIFIED EXCESS PLAN

            SECTION 1. PURPOSE:

            By execution of the Adoption Agreement, the Employer has adopted the
Plan set forth herein to provide a means by which certain management Employees
and Independent Contractors of the Employer may elect to defer receipt of
current Compensation from the Employer in order to provide Retirement and other
benefits on behalf of such Employees and Independent Contractors. The Plan is
not intended to be a tax-qualified retirement plan under Section 401(a) of the
Internal Revenue Code (the "Code"). The Plan is intended to be an unfunded plan
maintained primarily for the purpose of providing deferred compensation benefits
for a select group of management or highly compensated Employees under Sections
201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act
of 1974.

            SECTION 2. DEFINITIONS:

            As used in the Plan, including this Section 2, references to one
gender shall include the other and, unless otherwise indicated by the context:

            2.1 "ACCRUED BENEFIT" shall mean, with respect to each Participant,
the balance credited to his Deferred Compensation Account.

            2.2 "ACTIVE PARTICIPANT" shall mean, with respect to any day or
date, a Participant who is in Service on such day or date; provided, that a
Participant who is in Service shall cease to be an Active Participant
immediately upon a determination by the Committee that the Participant has
ceased to be an Employee or Independent Contractor.

            2.3 "ADOPTION AGREEMENT" shall mean the written agreement pursuant
to which the Employer adopts the Plan. The Adoption Agreement is a part of the
Plan as applied to the Employer.

            2.4 "ADJUSTMENT DATE" shall mean the date designated in the Adoption
Agreement for crediting the amount of any Salary Deferral Credits, Employer
Matching Credits and Employer Performance Incentive Credits to each Deferred
Compensation Account.

                                       1
<PAGE>
            2.5 "BENEFICIARY" shall mean the person, persons, entity or entities
designated or determined pursuant to the provisions of Section 13 of the Plan.

            2.6 "BOARD" shall mean the Board of Directors of the Employer, if
the Employer is a corporation. If the Employer is not a corporation, "Board"
shall mean the Employer.

            2.7 "COLLEGE EDUCATION ACCOUNT" shall mean the separate account to
be kept for each Participant and to be divided into one or more Dependent
Subaccounts, as described in Section 5.4.

            2.8 "COMMITTEE" shall mean the administrative committee provided for
in Section 9.

            2.9 "COMPENSATION" shall have the meaning designated in the Adoption
Agreement.

            2.10 "DEFERRED COMPENSATION ACCOUNT" shall mean the separate account
to be kept for each Participant, as described in Sections 3 and 8. To the extent
applicable, the Deferred Compensation Account may be credited with Salary
Deferral Credits, Employer Matching Credits and Employer Performance Incentive
Credits.

            2.11 "DEPENDENT SUBACCOUNT" shall mean each separate subaccount to
be kept for each Participant as part of his College Education Account, as
described in Section 5.4. To the extent applicable, each Dependent Subaccount
may be credited with Salary Deferral Credits, Employer Matching Credits, and
Employer Performance Incentive Credits.

            2.12 "DISABILITY" shall mean the inability of a Participant to
perform his regular duties with the Employer or any other duties which the
Employer is willing to assign to him by reason of any medically determinable
physical or mental impairment that can be expected to result in death or to be
of long continued or indefinite duration. The determination of the existence or
nonexistence of Disability shall be made by the Committee in a nondiscriminatory
manner pursuant to an examination by a medical doctor selected or approved by
the Committee.

                                       2
<PAGE>
            2.13 "EFFECTIVE DATE" shall be the date designated in the Adoption
Agreement as of which the Plan first becomes effective.

            2.14 "ELIGIBLE DEPENDENT" shall mean any child (including any
legally adopted child) of a Participant who has not attained age 18 and who the
Participant designates as an Eligible Dependent in his Salary Deferral
Agreement; provided, however, that the Committee in its discretion may approve
the designation of an individual other than the child of a Participant as an
Eligible Dependent.

            2.15 "EMPLOYEE" shall mean an individual in the Service of the
Employer if the relationship between the individual and the Employer is the
legal relationship of employer and employee and if the individual is a highly
compensated or management employee of the Employer. An individual shall cease to
be an Employee upon the first to occur of the following: (i) the Employee's
termination of Service; or (ii) a determination by the Committee that the
Employee no longer meets the eligibility requirements for participation in the
Plan.

            2.16 "EMPLOYER" shall mean the Employer identified in the Adoption
Agreement, and any Participating Employer which adopts this Plan. The Employer
may be a corporation, a partnership or sole proprietorship. All references
herein to the Employer shall be applied separately to each such Employer as if
the Plan were solely the Plan of that Employer.

            2.17 "EMPLOYER MATCHING CREDITS" shall mean the amounts credited to
the Participant's Deferred Compensation Account by the Employer pursuant to the
provisions of Section 3.2.

            2.18 "EMPLOYER PERFORMANCE INCENTIVE CREDITS" shall mean the amounts
credited to the Participant's Deferred Compensation Account by the Employer
pursuant to the provisions of Section 3.3.

            2.19 "INDEPENDENT CONTRACTOR" shall mean an individual in the
Service of the Employer if the relationship between the individual and the
Employer is not the legal relationship of employer and employee. An individual
shall cease to be an Independent

                                       3
<PAGE>
Contractor upon the termination of the Independent Contractor's Service. An
Independent Contractor shall include a director of the Employer who is not an
Employee.

            2.20 "NORMAL RETIREMENT AGE" of a Participant shall mean the age
designated in the Adoption Agreement. The "Normal Retirement Date" of a
Participant shall mean the date the Participant attains his Normal Retirement
Age.

            2.21 "PARTICIPANT" shall mean with respect to any Plan Year an
Employee or Independent Contractor who has been designated by the Committee as a
Participant and who has entered the Plan or who has an Accrued Benefit under the
Plan. An Employee or Independent Contractor designated by the Committee as a
Participant who has not otherwise entered the Plan shall enter the Plan and
become a Participant as of the date determined by the Committee. A Participant
who separates from Service with the Employer and who later returns to Service
will not be eligible to defer Compensation under the Plan except upon
satisfaction of such terms and conditions as the Committee shall establish upon
the Participant's return to Service, whether or not the Participant shall have
an Accrued Benefit remaining under the Plan on the date of his return to
Service.

            2.22 "PARTICIPATING EMPLOYER" shall mean any trade or business
(whether or not incorporated) which adopts this Plan with the consent of the
Employer identified in the Adoption Agreement.

            2.23 "PLAN" shall mean The Executive Nonqualified Excess Plan, as
herein set out or as duly amended. The name of the Plan as applied to the
Employer shall be designated in the Adoption Agreement.

            2.24 "PLAN ADMINISTRATOR" shall mean the person designated in the
Adoption Agreement. If the Plan Administrator designated in the Adoption
Agreement is unable to serve, the Employer shall be the Plan Administrator.

            2.25 "PLAN YEAR" shall mean the twelve-month period ending on the
last day of the month designated in the Adoption Agreement.

                                       4
<PAGE>
            2.26 "QUALIFYING DISTRIBUTION EVENT" shall mean the Participant's
Retirement or the termination of Participant's Service with the Employer for any
reason, including as a result of his death or Disability.

            2.27 "RETIRE" OR "RETIREMENT" shall mean Retirement within the
meaning of Section 4.4.

            2.28 "SALARY DEFERRAL AGREEMENT" shall mean a written agreement
entered into between a Participant and the Employer pursuant to the provisions
of Section 3.

            2.29 "SALARY DEFERRAL CREDITS" shall mean the amounts credited to
the Participant's Deferred Compensation Account by the Employer pursuant to the
provisions of Section 3.

            2.30 "SERVICE" shall mean employment by the Employer as an Employee.
If the Participant is an Independent Contractor, "Service" shall mean the period
during which the contractual relationship exists between the Employer and the
Participant.

            2.31 "SPONSOR" shall mean Executive Benefit Services, Inc.

            2.32 "SPOUSE" or "SURVIVING SPOUSE" shall mean, except as otherwise
provided in the Plan, the legally married spouse or surviving spouse of a
Participant.

            2.33 "TRUST" shall mean the trust fund established pursuant to
Section 10.2, if designated by the Employer in the Adoption Agreement.

            2.34 "TRUSTEE" shall mean the trustee, if any, named in the
agreement establishing the Trust and such successor or additional trustee as may
be named pursuant to the terms of the agreement establishing the Trust.

            2.35 "YEARS OF SERVICE" shall mean each Plan Year of Service
completed by the Participant. For vesting purposes, Years of Service shall be
calculated from the date designated in the Adoption Agreement.

                                       5
<PAGE>
            SECTION 3. CREDITS TO DEFERRED COMPENSATION ACCOUNT:

            3.1 SALARY DEFERRAL CREDITS: To the extent provided in the Adoption
Agreement, each Active Participant may elect, by entering into a Salary Deferral
Agreement with the Employer, to reduce his Compensation from the Employer by a
dollar amount or percentage specified in the Salary Deferral Agreement. The
amount of the Participant's Salary Reduction Credit shall be credited by the
Employer to the Deferred Compensation Account maintained for the Participant
pursuant to Section 8. The following special provisions shall apply with respect
to the Salary Deferral Credits of a Participant:

            3.1.1 The Employer shall credit to the Participant's Deferred
      Compensation Account on each Adjustment Date an amount equal to the total
      Salary Reduction Credit for the period ending on such Adjustment Date.

            3.1.2 An election pursuant to Section 3.1 shall be made by the
      Participant by executing and delivering a Salary Deferral Agreement to the
      Committee. The Salary Deferral Agreement shall become effective with
      respect to such Participant as of the first full payroll period commencing
      on or immediately following the January 1 which occurs after the date such
      Salary Deferral Agreement is received by the Committee; provided, that a
      Participant who first becomes a Participant in the Plan during a Plan Year
      may enter into a Salary Deferral Agreement to be effective as of the first
      payroll period next following the date he enters the Plan. A Participant's
      election shall continue in effect, unless earlier modified by the
      Participant, until the Service of the Participant is terminated, or, if
      earlier, until the Participant ceases to be an Active Participant under
      the Plan.

            3.1.3 A Participant may unilaterally modify a Salary Deferral
      Agreement (either to increase or decrease the portion of his future
      Compensation which is subject to salary deferral within the percentage
      limits set forth in Section 3.1) by providing a written modification of
      the Salary Deferral Agreement to the Employer. The modification shall
      become effective as of the first full payroll period commencing on or
      immediately following the January 1 which occurs after the date such
      written modification is received by the Committee. The Participant may
      terminate the Salary Deferral Agreement effective as of the date
      designated in the Adoption Agreement.

            3.1.4 The Committee may from time to time establish policies or
      rules governing the manner in which Salary Deferral Credits may be made.

                                       6
<PAGE>
            3.2 EMPLOYER MATCHING CREDITS: If designated by the Employer in the
Adoption Agreement, as of each Adjustment Date, the Employer shall cause the
Committee to credit to the Deferred Compensation Account of each Participant an
Employer matching credit in accordance with the Adoption Agreement.

            3.3 EMPLOYER PERFORMANCE INCENTIVE CREDITS: If designated by the
Employer in the Adoption Agreement, the Employer may credit to the Plan for such
Plan Year any amount as the Board in its discretion shall determine. The
Committee shall have the discretion to credit the Deferred Compensation Account
of each Active Participant an amount of the Employer Performance Incentive
Credit for the Plan Year as directed by the Employer.

            SECTION 4. QUALIFYING DISTRIBUTION EVENTS:

            4.1 DEATH OF A PARTICIPANT: If a Participant dies while in Service,
the Employer shall pay a benefit to the Participant's Beneficiary in the amount
designated in the Adoption Agreement. Payment of such benefit shall be made by
the Employer pursuant to Section 6. If a Participant dies following his
Retirement or termination of Service for any reason, including Disability, and
before all payments to him under the Plan have been made, the balance of the
Participant's vested Accrued Benefit shall be paid by the Employer to the
Participant's Beneficiary pursuant to Section 6, and such balance shall be
determined as of the commencement date of the payments.

            4.2 DISABILITY: If a Participant suffers a Disability while in
Service prior to his Normal Retirement Date, he shall terminate Service with the
Employer as of the date of the establishment of his Disability, whereupon he
shall commence receiving payment of his vested Accrued Benefit, determined as of
the commencement date of the payments. Such benefit shall be paid by the
Employer as provided in Section 6.

            4.3 TERMINATION OF SERVICE: If the Service of a Participant with the
Employer shall be terminated for any reason other than Retirement, Disability or
death, his vested Accrued Benefit shall be paid to him by the Employer as
provided in Section 6, and such

                                       7
<PAGE>
Accrued Benefit shall be determined as of the commencement date of the payments.
If a Participant's Accrued Benefit is not fully vested at his termination of
employment, he shall forfeit that portion of his Accrued Benefit that is not
fully vested. If he subsequently returns to Service with the Employer, he shall
be treated as a new Participant for purposes of determining the vested portion
of his Accrued Benefit.

            4.4 RETIREMENT:

            4.4.1 NORMAL RETIREMENT: A Participant who is in Service shall be
      eligible to Retire from Service at his Normal Retirement Date and commence
      receiving payment of his Accrued Benefit, determined as of the
      commencement date of the payments. Payment of such benefit shall be made
      by the Employer pursuant to Section 6.

            4.4.2 EARLY RETIREMENT: If so designated by the Employer in the
      Adoption Agreement, and subject to the requirements for early retirement
      set forth therein, a Participant may elect early retirement effective on
      any date prior to his Normal Retirement Date by filing 30 days' written
      notice with the Committee before such date. The Participant shall commence
      receiving payment of his Accrued Benefit determined as of the commencement
      date of the payments. Such benefit shall be paid by the Employer as
      provided in Section 6.

            4.4.3 DELAYED RETIREMENT: If a Participant shall remain in Service
      following his Normal Retirement Date, his Retirement date shall be the
      date he actually terminates Service for reasons other than death or
      Disability, whereupon he shall commence receiving payment of his Accrued
      Benefit, determined as of the commencement date of the payments. Payment
      of such benefit shall be made by the Employer pursuant to Section 6.
      During the period that such Participant remains in Service pursuant to
      this Section 4.4.3, he shall continue to be a Participant for each Plan
      Year in which he meets the requirements therefor. If an Employee or
      Independent Contractor not otherwise a Participant becomes eligible to
      enter the Plan following his Normal Retirement Date, the provisions of
      this Section 4.4.3 shall apply in determining his Retirement date.

            SECTION 5. IN-SERVICE WITHDRAWALS:

            5.1 REGULAR IN-SERVICE WITHDRAWALS: If the Employer designates in
the Adoption Agreement that regular in-Service withdrawals shall be permitted
under the Plan, a Participant may make an irrevocable election in the Salary
Deferral Agreement to withdraw a

                                       8
<PAGE>
designated amount of the Salary Deferral Credit, plus deemed investment of gains
or losses, from his Deferred Compensation Account at the specified time or times
designated by the Participant in the Salary Deferral Agreement.

            5.2 FINANCIAL HARDSHIP WITHDRAWALS: A distribution of the Deferred
Compensation Account may be made to a Participant on account of financial
hardship, subject to the following provisions:

            5.2.1 A Participant may, at any time prior to his Retirement or
      termination of Service for any reason, including Disability, make
      application to the Committee to receive a distribution in a lump sum of
      all or a portion of the total vested amount credited to his Deferred
      Compensation Account (determined as of the date the distribution, if any,
      is made under this Section 5.2) because of an unforeseeable emergency that
      results in severe financial hardship to the Participant. A distribution
      because of an unforeseeable emergency shall not exceed the amount required
      to meet the immediate financial need created by the unforeseeable
      emergency and not otherwise reasonably available from other resources of
      the Participant. Examples of an unforeseeable emergency shall include but
      shall not be limited to those financial needs arising on account of a
      sudden or unexpected illness or accident of the Participant or of a
      dependent of the Participant, loss of the Participant's property due to
      casualty, or other similar extraordinary and unforeseeable circumstances
      arising as a result of events beyond the control of the Participant.

            5.2.2 The Participant's request for a distribution on account of
      financial hardship must be made in writing to the Committee. The request
      must specify the nature of the financial hardship, the total amount
      requested to be distributed from the Deferred Compensation Account, and
      the total amount of the actual expense incurred or to be incurred on
      account of financial hardship.

            5.2.3 If a distribution under this Section 5.2 is approved by the
      Committee, such distribution will be made as soon as practicable following
      the date it is approved. The processing of the request shall be completed
      as soon as practicable from the date on which the Committee receives the
      properly completed written request for a distribution on account of a
      financial hardship. If a Participant's termination of Service occurs after
      a request is approved in accordance with this Section 5.2.3, but prior to
      distribution of the full amount approved, the approval of the request
      shall be automatically null and void and the benefits which the
      Participant is entitled to receive under the Plan shall be distributed in
      accordance with the applicable distribution provisions of the Plan. Only
      one financial hardship distribution shall be made within any Plan Year.

                                       9
<PAGE>
            5.2.4 The Committee may from time to time adopt additional policies
      or rules governing the manner in which such distributions may be made so
      that the Plan may be conveniently administered.

            5.3 "HAIRCUT" WITHDRAWALS: If the Employer designates in the
Adoption Agreement that "haircut" withdrawals shall be permitted under the Plan,
a Participant in Service may at his option make one or more withdrawals from his
Deferred Compensation Account by written request to the Committee; provided,
however, that a Participant who requests a withdrawal under this Section 5.3
shall incur a penalty (the "haircut") equal to a percentage (not less than 10%),
as designated by the Employer in the Adoption Agreement, of the amount
withdrawn, and this penalty shall be forfeited from the Deferred Compensation
Account of the Participant notwithstanding the provisions of Section 7.

            5.4 COLLEGE EDUCATION WITHDRAWALS: A Participant may elect in the
Salary Deferral Agreement for a designated percentage or dollar amount of the
Salary Deferral Credits to be credited to a College Education Account to be used
to fund the college education of the Participant's Eligible Dependent or
Eligible Dependents. The College Education Account shall be divided into
Dependent Subaccounts for each of the Participant's Eligible Dependents, and the
Participant may designate in the Salary Deferral Agreement the percentage or
dollar amount of each Salary Deferral Credit to be credited to each Dependent
Subaccount; provided, however, that the minimum credit that a Participant may
elect to make to any Dependent Subaccount is $1,000. In the absence of a clear
designation, all credits made to the College Education Subaccount shall be
equally allocated to each Dependent Subaccount. As soon as practicable after an
Eligible Dependent of the Participant attains age 18, the Employer shall pay to
the Participant the balance in the Dependent Subaccount with respect to such
Eligible Dependent in annual installments over a period of four, five or six
years, as designated by the Participant in the

                                       10
<PAGE>
Salary Deferral Agreement. The following special provisions shall apply with
respect to the Dependent Subaccounts:

            5.4.1 The Dependent Subaccounts shall be established, adjusted for
      payments, credited with Salary Deferral Credits, Employer Matching
      Credits, and Employer Performance Incentive Credits, and credited or
      debited for deemed investment gains or losses in the same manner and at
      the same time as such adjustments are made to the Deferred Compensation
      Account under Section 8 and in accordance with the rules and elections in
      effect under Section 8.

            5.4.2 Notwithstanding any provision in this Section 5 to the
      contrary, if Participant incurs a Qualifying Distribution Event prior to
      the date on which the entire balance of his College Education Account has
      been distributed to him, then the balance in the College Education Account
      on the date of the Qualifying Distribution Event shall be combined with
      the Participant's Deferred Compensation Account and distributed to him in
      the same manner and at the same time as his Deferred Compensation Account
      is distributed to him under Section 6 and in accordance with the rules and
      elections in effect under Section 6.

            SECTION 6. QUALIFYING DISTRIBUTION EVENTS PAYMENT OPTIONS:

            6.1 PAYMENT OPTIONS: The Employer shall designate in the Adoption
Agreement the payment options available upon a Qualifying Distribution Event.
Upon a Participant's entry into the Plan, the Participant shall elect among
these designated payment options the method under which his vested Accrued
Benefit or, in the event of his death, any benefit payable as a result, will be
distributed; provided, however, that the Participant may change the method of
payment with the consent of the Committee by filing a written election with the
Committee at least one year prior to the commencement date of the payments.

            6.2 PREPAYMENT: Notwithstanding any other provisions of this Plan,
if a Participant or any other person (a "recipient") is entitled to receive
payments under the Plan, the Committee in its sole discretion may direct the
Employer to prepay all or any part of the payments remaining to be made to or on
behalf of the recipient, or to shorten the payment period. The amount of such
prepayment shall be in full satisfaction of the Employer's obligations hereunder
to the recipient and to all persons claiming under or through the recipient with
respect to the payments being prepaid. In the event of a partial prepayment, the
Committee shall

                                       11
<PAGE>
designate which installments are being prepaid and, if applicable, the accounts
of the Participant from which such prepayments shall be debited. The Committee's
determinations under this Section 6.2 shall be final and conclusive upon all
parties claiming benefits under this Plan.

            6.3 BENEFIT EXCHANGE: Notwithstanding any other provisions of this
Plan, the Employer and the Participant may enter into an agreement under which,
in lieu of the payment of the Participant's vested Accrued Benefit upon a
Qualifying Distribution Event, the Participant's vested Accrued Benefit will be
exchanged for another nonqualified benefit in accordance with rules established
by the Committee.

            SECTION 7. VESTING:

            A Participant shall be fully vested (that is, nonforfeitable) in the
portion of his Deferred Compensation Account attributable to Salary Deferral
Credits, and all income, gains and losses attributable thereto. A Participant
shall become fully vested in the portion of his Deferred Compensation Account
attributable to Employer Matching Credits, Employer Performance Incentive
Credits, and income, gains and losses attributable thereto, on the first to
occur of: (i) normal Retirement; (ii) Early Retirement; (iii) death while in
Service; or (iv) in accordance with the vesting schedule and provisions
designated by the Employer in the Adoption Agreement.

            SECTION 8. ACCOUNT; DEEMED INVESTMENT; ADJUSTMENT OF ACCOUNTS:

            8.1 ACCOUNT: The Committee shall establish a book reserve account,
entitled the "Deferred Compensation Account," on behalf of each Participant.
Such account shall be adjusted pursuant to the provisions of Section 8.3.

            8.2 DEEMED INVESTMENTS: The Deferred Compensation Account of a
Participant shall be credited with an investment return determined as if the
account were invested in one or more investment funds made available by the
Committee. The Participant shall elect the investment funds in which his
Deferred Compensation Account shall be deemed to be invested. Such election
shall be made in the manner prescribed by the Committee and shall take effect
upon the entry of the Participant into the Plan. The investment election of the
Participant

                                       12
<PAGE>
shall remain in effect until a new election is made by the Participant. In the
event the Participant fails for any reason to make an effective election of the
investment return to be credited to his account, the investment return shall be
determined by the Committee.

            8.3 ADJUSTMENTS TO DEFERRED COMPENSATION ACCOUNTS: With respect to
each Participant who has a Deferred Compensation Account under the Plan, the
amount credited to such account shall be adjusted by the following debits and
credits, at the times and in the order stated:

            8.3.1 The Deferred Compensation Account shall be debited each
      business day with the total amount of any payments made from such account
      since the last preceding business day to him or for his benefit.

            8.3.2 The Deferred Compensation Account shall be credited on each
      Adjustment Date with the total amount of any Salary Deferral Credits,
      Employer Matching Credits and Employer Performance Incentive Credits to
      such account since the last preceding Adjustment Date.

            8.3.3 The Deferred Compensation Account shall be credited or debited
      on each day securities are traded on a national stock exchange with the
      amount of deemed investment gain or loss resulting from the performance of
      the investment funds elected by the Participant in accordance with Section
      8.2. The amount of such deemed investment gain or loss shall be determined
      by the Committee and such determination shall be final and conclusive upon
      all concerned.

            SECTION 9. ADMINISTRATION BY COMMITTEE:

            9.1 MEMBERSHIP OF COMMITTEE: The Committee shall consist of at least
three individuals who shall be appointed by the Board to serve at the pleasure
of the Board. Any member of the Committee may resign, and his successor, if any,
shall be appointed by the Board. The Committee shall be responsible for the
general administration and interpretation of the Plan and for carrying out its
provisions, except to the extent all or any of such obligations are specifically
imposed on the Board.

            9.2 COMMITTEE OFFICERS; SUBCOMMITTEE: The members of the Committee
shall elect a Chairman and may elect an acting Chairman. They shall also elect a
Secretary and may elect an acting Secretary, either of whom may be but need not
be a member of the

                                       13
<PAGE>
Committee. The Committee may appoint from its membership such subcommittees with
such powers as the Committee shall determine, and may authorize one or more of
its members or any agent to execute or deliver any instruments or to make any
payment on behalf of the Committee.

            9.3 COMMITTEE MEETINGS: The Committee shall hold such meetings upon
such notice, at such places and at such intervals as it may from time to time
determine. Notice of meetings shall not be required if notice is waived in
writing by all the members of the Committee at the time in office, or if all
such members are present at the meeting.

            9.4 TRANSACTION OF BUSINESS: A majority of the members of the
Committee at the time in office shall constitute a quorum for the transaction of
business. All resolutions or other actions taken by the Committee at any meeting
shall be by vote of a majority of those present at any such meeting and entitled
to vote. Resolutions may be adopted or other action taken without a meeting upon
written consent thereto signed by all of the members of the Committee.

            9.5 COMMITTEE RECORDS: The Committee shall maintain full and
complete records of its deliberations and decisions. The minutes of its
proceedings shall be conclusive proof of the facts of the operation of the Plan.

            9.6 ESTABLISHMENT OF RULES: Subject to the limitations of the Plan,
the Committee may from time to time establish rules or by-laws for the
administration of the Plan and the transaction of its business.

            9.7 CONFLICTS OF INTEREST: No individual member of the Committee
shall have any right to vote or decide upon any matter relating solely to
himself or to any of his rights or benefits under the Plan (except that such
member may sign unanimous written consent to resolutions adopted or other action
taken without a meeting), except relating to the terms of his Salary Deferral
Agreement.

            9.8 CORRECTION OF ERRORS: The Committee may correct errors and, so
far as practicable, may adjust any benefit or credit or payment accordingly. The
Committee may in its discretion waive any notice requirements in the Plan;
provided, that a waiver of notice in one or

                                       14
<PAGE>
more cases shall not be deemed to constitute a waiver of notice in any other
case. With respect to any power or authority which the Committee has discretion
to exercise under the Plan, such discretion shall be exercised in a
nondiscriminatory manner.

            9.9 AUTHORITY TO INTERPRET PLAN: Subject to the claims procedure set
forth in Section 16, the Plan Administrator and the Committee shall have the
duty and discretionary authority to interpret and construe the provisions of the
Plan and to decide any dispute which may arise regarding the rights of
Participants hereunder, including the discretionary authority to construe the
Plan and to make determinations as to eligibility and benefits under the Plan.
Determinations by the Plan Administrator and the Committee shall apply uniformly
to all persons similarly situated and shall be binding and conclusive upon all
interested persons.

            9.10 THIRD PARTY ADVISORS: The Committee may engage an attorney,
accountant, actuary or any other technical advisor on matters regarding the
operation of the Plan and to perform such other duties as shall be required in
connection therewith, and may employ such clerical and related personnel as the
Committee shall deem requisite or desirable in carrying out the provisions of
the Plan. The Committee shall from time to time, but no less frequently than
annually, review the financial condition of the Plan and determine the financial
and liquidity needs of the Plan. The Committee shall communicate such needs to
the Employer so that its policies may be appropriately coordinated to meet such
needs.

            9.11  COMPENSATION OF MEMBERS:  No fee or compensation shall be
paid to any member of the Committee for his Service as such.

            9.12 EXPENSE REIMBURSEMENT: The Committee shall be entitled to
reimbursement by the Employer for its reasonable expenses properly and actually
incurred in the performance of its duties in the administration of the Plan.

            9.13 INDEMNIFICATION: No member of the Committee shall be personally
liable by reason of any contract or other instrument executed by him or on his
behalf as a member of the Committee nor for any mistake of judgment made in good
faith, and the Employer shall indemnify and hold harmless, directly from its own
assets (including the proceeds of any

                                       15
<PAGE>
insurance policy the premiums for which are paid from the Employer's own
assets), each member of the Committee and each other officer, employee, or
director of the Employer to whom any duty or power relating to the
administration or interpretation of the Plan may be delegated or allocated,
against any unreimbursed or uninsured cost or expense (including any sum paid in
settlement of a claim with the prior written approval of the Board) arising out
of any act or omission to act in connection with the Plan unless arising out of
such person's own fraud, bad faith, willful misconduct or gross negligence.

            SECTION 10. CONTRACTUAL LIABILITY; TRUST:

            10.1 CONTRACTUAL LIABILITY: The obligation of the Employer to make
payments hereunder shall constitute a contractual liability of the Employer to
the Participant. Such payments shall be made from the general funds of the
Employer, and the Employer shall not be required to establish or maintain any
special or separate fund, or otherwise to segregate assets to assure that such
payments shall be made, and the Participant shall not have any interest in any
particular assets of the Employer by reason of its obligations hereunder. To the
extent that any person acquires a right to receive payment from the Employer,
such right shall be no greater than the right of an unsecured creditor of the
Employer.

            10.2 TRUST: If so designated in Section 2.34 of the Adoption
Agreement, the Employer may establish a Trust with the Trustee, pursuant to such
terms and conditions as are set forth in the Trust Agreement. The Trust, if and
when established, is intended to be treated as a grantor trust for purposes of
the Code. The establishment of the Trust is not intended to cause Participants
to realize current income on amounts contributed thereto, and the Trust shall be
so interpreted and administered.

            SECTION 11. ALLOCATION OF RESPONSIBILITIES:

            The persons responsible for the Plan and the duties and
responsibilities allocated to each are as follows:

                                       16
<PAGE>
            11.1  BOARD:

                  (i)   To amend the Plan;

                  (ii)  To appoint and remove members of the Committee; and

                  (iii) To terminate the Plan.

            11.2  COMMITTEE:

                  (i)   To designate Participants;

                  (ii)  To interpret the provisions of the Plan and to determine
            the rights of the Participants under the Plan, except to the extent
            otherwise provided in Section 16 relating to claims procedure;

                  (iii) To administer the Plan in accordance with its terms,
            except to the extent powers to administer the Plan are specifically
            delegated to another person or persons as provided in the Plan;

                  (iv)  To account for the Accrued Benefits of Participants; and

                  (v)   To direct the Employer in the payment of benefits.

            11.3  PLAN ADMINISTRATOR:

                  (i)   To file such reports as may be required with the United
            States Department of Labor, the Internal Revenue Service and any
            other government agency to which reports may be required to be
            submitted from time to time; and

                  (ii)  To administer the claims procedure to the
            extent provided in Section 16.

                                       17
<PAGE>
            SECTION 12. BENEFITS NOT ASSIGNABLE; FACILITY OF PAYMENTS:

            12.1 BENEFITS NOT ASSIGNABLE: No portion of any benefit credited or
paid under the Plan with respect to any Participant shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt so to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same shall be void, nor shall
any portion of such benefit be in any manner payable to any assignee, receiver
or any one trustee, or be liable for his debts, contracts, liabilities,
engagements or torts.

            12.2 PAYMENTS TO MINORS AND OTHERS: If any individual entitled to
receive a payment under the Plan shall be physically, mentally or legally
incapable of receiving or acknowledging receipt of such payment, the Committee,
upon the receipt of satisfactory evidence of his incapacity and satisfactory
evidence that another person or institution is maintaining him and that no
guardian or committee has been appointed for him, may cause any payment
otherwise payable to him to be made to such person or institution so maintaining
him. Payment to such person or institution shall be in full satisfaction of all
claims by or through the Participant to the extent of the amount thereof.

            SECTION 13. BENEFICIARY:

            The Participant's beneficiary shall be the person or persons
designated by the Participant on the beneficiary designation form provided by
and filed with the Committee or its designee. If the Participant does not
designate a beneficiary, the beneficiary shall be his Surviving Spouse. If the
Participant does not designate a beneficiary and has no Surviving Spouse, the
beneficiary shall be the Participant's estate. The designation of a beneficiary
may be changed or revoked only by filing a new beneficiary designation form with
the Committee or its designee. If a beneficiary (the "primary beneficiary") is
receiving or is entitled to receive payments under the Plan and dies before
receiving all of the payments due him, the balance to which he is entitled shall
be paid to the contingent beneficiary, if any, named in the Participant's
current beneficiary designation form. If there is no contingent beneficiary, the
balance shall be paid to the estate of the primary beneficiary. Any beneficiary
may disclaim all or any part of any

                                       18
<PAGE>
benefit to which such beneficiary shall be entitled hereunder by filing a
written disclaimer with the Committee before payment of such benefit is to be
made. Such a disclaimer shall be made in a form satisfactory to the Committee
and shall be irrevocable when filed. Any benefit disclaimed shall be payable
from the Plan in the same manner as if the beneficiary who filed the disclaimer
had died on the date of such filing.

            SECTION 14. AMENDMENT AND TERMINATION OF PLAN:

            The Board may amend any provision of the Plan or terminate the Plan
at any time; provided, that in no event shall such amendment or termination
reduce any Participant's Accrued Benefit as of the date of such amendment or
termination, nor shall any such amendment affect the terms of the Plan relating
to the payment of such Accrued Benefit.

            Notwithstanding the foregoing, the Plan shall be terminated upon the
occurrence of one or more of the events designated in the Adoption Agreement.
Upon the occurrence of a termination event, the Accrued Benefit of each
Participant shall become fully vested and payable to the Participant in a lump
sum.

            SECTION 15. COMMUNICATION TO PARTICIPANTS:

            The Employer shall make a copy of the Plan available for inspection
by Participants and their beneficiaries during reasonable hours at the principal
office of the Employer.

            SECTION 16. CLAIMS PROCEDURE:

            The following claims procedure shall apply with respect to the Plan:

            16.1 FILING OF A CLAIM FOR BENEFITS: If a Participant or beneficiary
(the "claimant") believes that he is entitled to benefits under the Plan which
are not being paid to him or which are not being accrued for his benefit, he
shall file a written claim therefor with the Plan Administrator. In the event
the Plan Administrator shall be the claimant, all actions which are required to
be taken by the Plan Administrator pursuant to this Section 16 shall be taken
instead by another member of the Committee designated by the Committee.

                                       19
<PAGE>
            16.2 NOTIFICATION TO CLAIMANT OF DECISION: Within 90 days after
receipt of a claim by the Plan Administrator (or within 180 days if special
circumstances require an extension of time), the Plan Administrator shall notify
the claimant of his decision with regard to the claim. In the event of such
special circumstances requiring an extension of time, there shall be furnished
to the claimant prior to expiration of the initial 90-day period written notice
of the extension, which notice shall set forth the special circumstances and the
date by which the decision shall be furnished. If such claim shall be wholly or
partially denied, notice thereof shall be in writing and worded in a manner
calculated to be understood by the claimant, and shall set forth: (i) the
specific reason or reasons for the denial; (ii) specific reference to pertinent
provisions of the Plan on which the denial is based; (iii) a description of any
additional material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is necessary; and
(iv) an explanation of the procedure for review of the denial. If the Plan
Administrator fails to notify the claimant of the decision in timely manner, the
claim shall be deemed denied as of the close of the initial 90-day period (or
the close of the extension period, if applicable).

            16.3 PROCEDURE FOR REVIEW: Within 60 days following receipt by the
claimant of notice denying his claim, in whole or in part, or, if such notice
shall not be given, within 60 days following the latest date on which such
notice could have been timely given, the claimant shall appeal denial of the
claim by filing a written application for review with the Committee. Following
such request for review, the Committee shall fully and fairly review the
decision denying the claim. Prior to the decision of the Committee, the claimant
shall be given an opportunity to review pertinent documents and to submit issues
and comments in writing.

            16.4 DECISION ON REVIEW: The decision on review of a claim denied in
whole or in part by the Plan Administrator shall be made in the following
manner:

            16.4.1 Within 60 days following receipt by the Committee of the
      request for review (or within 120 days if special circumstances require an
      extension of time), the Committee shall notify the claimant in writing of
      its decision with regard to the claim. In the event of such special
      circumstances requiring

                                       20
<PAGE>
      an extension of time, written notice of the extension shall be furnished
      to the claimant prior to the commencement of the extension. If the
      decision on review is not furnished in a timely manner, the claim shall be
      deemed denied as of the close of the initial 60-day period (or the close
      of the extension period, if applicable).

            16.4.2 With respect to a claim that is denied in whole or in part,
      the decision on review shall set forth specific reasons for the decision,
      shall be written in a manner calculated to be understood by the claimant,
      and shall cite specific references to the pertinent Plan provisions on
      which the decision is based.

            16.4.3 The decision of the Committee shall be final and conclusive.

            16.5 ACTION BY AUTHORIZED REPRESENTATIVE OF CLAIMANT: All actions
set forth in this Section 16 to be taken by the claimant may likewise be taken
by a representative of the claimant duly authorized by him to act in his behalf
on such matters. The Plan Administrator and the Committee may require such
evidence as either may reasonably deem necessary or advisable of the authority
to act of any such representative.

            SECTION 17. MISCELLANEOUS PROVISIONS:

            17.1 SET OFF: Notwithstanding any other provision of this Plan, the
Employer may reduce the amount of any payment otherwise payable to or on behalf
of a Participant hereunder by the amount of any loan, cash advance, extension of
credit or other obligation of the Participant to the Employer that is then due
and payable, and the Participant shall be deemed to have consented to such
reduction.

            17.2 NOTICES: Each Participant who is not in Service and each
beneficiary shall be responsible for furnishing the Committee or its designee
with his current address for the mailing of notices and benefit payments. Any
notice required or permitted to be given to such Participant or beneficiary
shall be deemed given if directed to such address and mailed by regular United
States mail, first class, postage prepaid. If any check mailed to such address
is returned as undeliverable to the addressee, mailing of checks will be
suspended until the Participant or beneficiary furnishes the proper address.
This provision shall not be construed as requiring the mailing of any notice or
notification otherwise permitted to be given by posting or by other publication.

                                       21
<PAGE>
            17.3 LOST DISTRIBUTEES: A benefit shall be deemed forfeited if the
Plan Administrator is unable to locate the Participant or beneficiary to whom
payment is due on or before the fifth anniversary of the date payment is to be
made or commence; provided, that the deemed investment rate of return pursuant
to Section 8.2 shall cease to be applied to the Participant's account following
the first anniversary of such date; provided further, however, that such benefit
shall be reinstated if a valid claim is made by or on behalf of the Participant
or beneficiary for all or part of the forfeited benefit.

            17.4 RELIANCE ON DATA: The Employer, the Committee and the Plan
Administrator shall have the right to rely on any data provided by the
Participant or by any beneficiary. Representations of such data shall be binding
upon any party seeking to claim a benefit through a Participant, and the
Employer, the Committee and the Plan Administrator shall have no obligation to
inquire into the accuracy of any representation made at any time by a
Participant or beneficiary.

            17.5 RECEIPT AND RELEASE FOR PAYMENTS: Subject to the provisions of
Section 17.1, any payment made from the Plan to or with respect to any
Participant or beneficiary, or pursuant to a disclaimer by a beneficiary, shall,
to the extent thereof, be in full satisfaction of all claims hereunder against
the Plan and the Employer with respect to the Plan. The recipient of any payment
from the Plan may be required by the Committee, as a condition precedent to such
payment, to execute a receipt and release with respect thereto in such form as
shall be acceptable to the Committee.

            17.6 HEADINGS: The headings and subheadings of the Plan have been
inserted for convenience of reference and are to be ignored in any construction
of the provisions hereof.

            17.7 CONTINUATION OF EMPLOYMENT: The establishment of the Plan shall
not be construed as conferring any legal or other rights upon any Employee or
any persons for continuation of employment, nor shall it interfere with the
right of the Employer to discharge any Employee or to deal with him without
regard to the effect thereof under the Plan.

                                       22
<PAGE>
            17.8 MERGER OR CONSOLIDATION: No employer-party to the Plan shall
consolidate or merge into or with another corporation or entity, or transfer all
or substantially all of its assets to another corporation, partnership, trust or
other entity (a "Successor Entity") unless such Successor Entity shall assume
the rights, obligations and liabilities of the employer-party under the Plan and
upon such assumption, the Successor Entity shall become obligated to perform the
terms and conditions of the Plan.

            17.9 CONSTRUCTION: The Employer shall designate in the Adoption
Agreement the state according to whose laws the provisions of the Plan shall be
construed and enforced, except to the extent that such laws are superseded by
ERISA.

                                       23

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}]]