Document:

syn_ex1011-80331.htm

    Exhibit
10.11

     

    Recording
Requested by and

    when
Recorded Mail to:

    

    ACCESS
BUSINESS FINANCE, L.L.C.

    14205 S.
E. 36th Street, Suite 350

    
      Bellevue,
WA  98006

      Attn:  Douglas
L. McDonald

    

    
      

       

      
        
          

        

      

    

    Loan No.
SYNT01

     

    DEED
OF TRUST, ASSIGNMENT OF RENTS AND LEASES,

    AND
SECURITY AGREEMENT

     

    THIS
DOCUMENT CONSTITUTES A FIXTURE FILING

    IN
ACCORDANCE WITH ORS §79.0502(3)

     

    LINE
OF CREDIT TRUST DEED

     

    This
Deed of Trust constitutes a line of credit instrument under ORS
86.155.  The maximum principal amount to be advanced is $2,000,000 and
the maturity date is on or before June 15, 2007, subject to annual
renewals.

     

    Tax
Parcel Nos. 11S3W7CB-2618 and 11S3W7CB-2626

     

    THIS DEED
OF TRUST, ASSIGNMENT OF RENTS AND LEASES, AND SECURITY AGREEMENT (“Deed of
Trust”) is dated June 15 and is given by Grantor SYNTHETECH, INC.,
an Oregon corporation, 1290 Industrial Way, Albany, Oregon 97322 (“Grantor”
or “Borrower”).  The
Trustee is FIRST AMERICAN TITLE INSURANCE COMPANY OF OREGON whose mailing
address is 1700 SW Fourth Avenue, Portland, Oregon 97201-5512.  The
Beneficiary is ACCESS BUSINESS FINANCE, L.L.C., a Washington limited liability
company (“Beneficiary”
or “Lender”),
whose mailing address is 14205 S. E. 36th Street, Suite 350, Bellevue,
WA  98006.

     

    For purposes of Article 9 of
the Uniform Commercial Code, this Deed of Trust constitutes a security agreement
and a financing statement, with Grantor being the Debtor and Lender being the
Secured Party.

     

    This Deed
of Trust secures a revolving line of credit, and Borrower may borrow, repay and
reborrow thereunder to the extent and subject to the terms provided in the “Loan
and Security Agreement” dated the same as this Deed of
Trust.  Reductions of the principal balance of the Loan secured
hereby, even down to zero, shall not satisfy or release this Deed of Trust,
which shall remain in full force and effect notwithstanding such repayments of
principal.

     

    
      
        DEED
OF TRUST

        
        

      

      
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    In
consideration of the loan described below, Grantor hereby irrevocably GRANTS,
TRANSFERS, CONVEYS and ASSIGNS to Trustee, IN TRUST, WITH POWER OF SALE, all of
Grantor’s present and future estate, right, title, claim, and interest,
either in law or in
equity, in and to the following property (“Property”):

     

    
      	
              A.  

            	
              The
      real property described on Exhibit A, all
      rights to the alleys, streets and roads adjoining or abutting the real
      property, all easements, access, air and development rights, minerals and
      oil, gas and other hydrocarbon substances, water, water rights and water
      stock, and all other rights, hereditaments, privileges, and appurtenances
      now or hereafter belonging or in any way appertaining to such real
      property (“Land”).

            

    

     

    
      	
              B.  

            	
              All
      buildings, improvements and tenements now or hereafter located on the Land
      (“Improvements”),
      including without limitation all fixtures and articles of property
      attached to, or used or adapted for use in the ownership, development,
      operation or maintenance of the Land and Improvements (whether such items
      are leased, owned, or subject to any title-retaining or security
      instrument); all heating, cooling, air-conditioning, ventilating,
      refrigerating, plumbing, generating, power, lighting, laundry,
      maintenance, incinerating, lifting, cleaning, fire prevention and
      extinguishing, security and access control, cooking, gas, electric and
      communication fixtures, equipment and apparatus; all engines, motors,
      conduits, pipes, pumps, tanks, ducts, compressors, boilers, water heaters
      and furnaces; all ranges, stoves, disposals, refrigerators and other
      appliances; all escalators and elevators, baths, sinks, all cabinets,
      partitions, mantels, built-in mirrors, window shades, blinds, screens,
      awnings, storm doors, windows and sash; all carpeting, underpadding, floor
      covering, paneling, and draperies; all furnishings of public spaces, halls
      and lobbies; and all shrubbery and plants.  All such items shall
      be deemed part of the Land and not severable wholly or in part without
      material injury to the freehold.

            

    

     

    
      	
              C.  

            	
              All
      of the present and future rents, revenues, issues, profits and income of
      the Land and Improvements, and all present and future leases and other
      agreements for the occupancy or use of all or any part of the Land and
      Improvements, including without limitation all cash or security deposits,
      advance rentals and deposits or payments of similar nature, and all
      guarantees of tenants’ or occupants’ performance under such leases and
      agreements.

            

    

     

    
      	
              D.  

            	
              All
      tangible and intangible personal property now or hereafter used or
      acquired in connection with the ownership, development, operation or
      maintenance of the Land and Improvements, including without limitation all
      furniture, furnishings, equipment, supplies, and other goods, wherever
      located, whether in the possession of Grantor, warehousemen, bailee, or
      any other person; all site plans, plats, architectural plans,
      specifications, work drawings, surveys, engineering reports, test borings,
      market surveys, and other similar work products; all permits, licenses,
      franchises, and trade names; all contract rights (including without
      limitation all architectural, construction, engineering, consulting, and
      management contracts, all insurance policies, and all performance,
      payment, completion and other surety bonds); and all claims, causes of
      action, warranties, accounts receivable, escrow accounts, insurance
      policies, deposits (including tax, insurance and other reserves),
      instruments, documents of title, general intangibles, and business
      records.

            

    

     

    
      
        DEED
OF TRUST

        
        

      

      
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              E.  

            	
              All
      present and future monetary deposits given to any public or private
      utility with respect to utility services furnished to the Land or the
      Improvements.

            

    

     

    
      	
              F.  

            	
              All
      proceeds (including claims and demands therefor) of the conversion,
      voluntary or involuntary, of any of the foregoing into cash or liquidated
      claims, including without limitation the insurance proceeds and
      condemnation awards.

            

    

     

    
      	
              G.  

            	
              All proceeds of the
      foregoing.

            

    

     

    
      	
               
      

            	
              TO
      SECURE THE FOLLOWING (“Secured
      Obligations”):

            

    

     

    (1) Repayment
of a line of credit loan (the “Loan”) in
the maximum principal amount of TWO MILLION and no/100 DOLLARS ($2,000,000.00),
with interest thereon, evidenced by and subject to the terms and provisions of a
“Loan and Security Agreement” dated the same as this Deed of Trust (“Loan
Agreement”) between Borrower and Lender, including any and all
modifications, extensions, renewals and replacements thereof.  The
maturity date of the Loan is June 15, 2007, subject to annual renewals as
provided in the Loan Agreement.

     

    (2) Payment of all other sums which
are or which may become owing under the Loan Documents, including without
limitation, all sums advanced to protect the security of this Deed of Trust,
together with interest thereon as herein provided;

     

    (3) Performance
of all other obligations of Borrower and/or Grantor hereunder and under the other Loan
Documents.

     

    As used
herein, the term “Loan
Documents” means the Loan Agreement, this Deed of Trust, and all related
documents and instruments (except the Indemnity Agreement
described hereinafter), and any and all modifications, extensions, renewals and
replacements thereof.  Borrower is also executing a Hazardous
Substance Indemnity (“Indemnity
Agreement”) for the benefit of Lender in connection with the Loan,
however, Borrower’s obligations thereunder are not secured by this Deed of
Trust.  In the event of any inconsistency between this Deed of Trust
and the Loan Agreement, the terms hereof shall be controlling as necessary to
create, preserve and/or maintain a valid lien on the Property, otherwise the
provisions of the Loan Agreement shall be controlling.

     

    The
indebtedness secured by this Deed of Trust may be indexed, adjusted, renewed or
renegotiated.

     

    GRANTOR
HEREBY REPRESENTS, WARRANTS, COVENANTS AND AGREES AS FOLLOWS:

     

    
      
        DEED
OF TRUST

        
        

      

      
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    ARTICLE
1

    TITLE
AND USE

     

    1.1           Warranty
of Title.  Grantor warrants, represents, covenants and agrees
as follows:  (a) Grantor holds marketable title to the Property
with the full right and power to grant, convey and assign the
Property.  (b) The Property is free from liens, encumbrances,
exceptions and other charges of any kind whatsoever, except for the Permitted
Exceptions.  (c) No other lien or encumbrance, whether superior
or inferior to this Deed of Trust, shall be created or suffered to be created by
Grantor without the prior written consent of Lender.  (d) No
default on the part of Grantor or any other person exists under any of the
Permitted Exceptions and all of the Permitted Exceptions are in full force and
effect and in good standing, without modification.  (e) Complete
and current copies of the Permitted Exceptions have been furnished to Lender,
and none of them have been or will be modified by Grantor without Lender’s prior
written consent.  (f) Grantor shall fully comply with all the
terms of the Permitted Exceptions and shall deliver to Lender a copy of all
notices delivered in connection with the Permitted
Exceptions.  (g) Lender has the right to contact the other
parties to the Permitted Exceptions to confirm the status thereof, and Grantor
shall, from time to time, at the request of Lender, request of such parties a
certificate confirming such information regarding the Permitted Exceptions as
Lender may request.  (h) Grantor shall forever warrant and defend
the Property unto Lender against all claims and demands of any other person
whatsoever, subject only to non-delinquent taxes and assessments and the
Permitted Exceptions.  As used in this Deed of Trust, “Permitted
Exceptions” means
the exceptions to title to the Property set out in Schedule B of the policy of
title insurance issued to Lender with respect to this Deed of
Trust.

     

    1.2           Business
Use; Commercial Loan.  Grantor represents and covenants that:
(a) the Property is and shall be used for commercial purposes only, and (b) the
Property is not now and at all times during the term of this Deed of Trust the
Property will not be used for residential or consumer purposes, so that at no
time will this Deed of Trust be a “residential trust deed” as defined in ORS
§86.705.

     

    1.3           Hazardous
Substances.

     

    (a)           Representations and
Warranties.  Grantor represents and warrants to Lender, to the
best of its knowledge after due inquiry and inspection, that: there is no
asbestos in the construction, repair or maintenance of any Improvements; no
Hazardous Substance is currently being generated, processed, stored,
transported, handled or disposed of on, under or in the Property, except in
accordance with all applicable laws; neither Grantor nor any other person or
entity has ever caused or permitted any Hazardous Substance to be generated,
processed, stored, transported, handled or disposed of, on, under or in the
Property, except in compliance with all applicable laws; there is no actual or
alleged violation with respect to the Property of any federal, state or local
statute, ordinance, rule, regulation or other law pertaining to Hazardous
Substances; and, there is no action or proceeding pending before or appealable
from any court, quasi-judicial body or administrative agency relating to
Hazardous Substances affecting or alleged to be affecting the
Property.

     

    (b)           Covenant.  Grantor
covenants and agrees that Hazardous Substances will not be generated, processed,
stored, transported, handled or disposed of on the Property by any person or
entity, except in accordance with all applicable laws.

     

    (c)           Definition.  “Hazardous
Substance” means any underground storage tank (whether empty, filled or
partially filled with any substance) and any substance which now or hereafter
becomes regulated under any federal, state or local statute, ordinance, rule,
regulation or other law relating to environmental protection, contamination or
cleanup, or public health and safety.

     

    
      
        DEED
OF TRUST

        
        

      

      
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    (d)           Notification;
Cleanup.  Grantor shall immediately notify Lender if Grantor
becomes aware of any Hazardous Substance problem or liability with respect to the Property, any actual or
alleged violation with respect to the
Property of any federal, state or local
statute, ordinance, rule, regulation or other law pertaining to Hazardous
Substances, or any lien or action with respect to any of the
foregoing.  Grantor shall, at its sole expense, take all actions as
may be necessary or advisable for the cleanup of Hazardous Substances with
respect to the Property, including without limitation, all removal, containment
and remedial actions in accordance with all applicable laws and in all events in
a manner satisfactory to Lender, and shall further pay or cause to be paid ail
cleanup, administrative and enforcement costs of governmental agencies if
obligated to do so by contract or by law

     

    (e)           Right of
Entry.  Lender is hereby authorized to enter the Property, including the
interior of any structures, at reasonable times, and after reasonable notice,
for the purpose of inspecting the Property to determine Grantor’s compliance
with this Section.

     

    (f)           Indemnification.  Grantor
shall jointly and severally defend, protect, hold harmless, and indemnify Lender
and its affiliates and their shareholders, directors, officers, employees,
attorneys, and agents from and against any and all claims, demands, penalties,
fees, liens, damages, losses, expenses, and liabilities which Lender may incur
before the Loan has been repaid and this Deed of Trust has been released as a
lien upon the Property, and which arise out of or in any way connected with any
alleged or actual past or future presence on or under the Property of any
Hazardous Substance from any cause whatsoever; it being intended that Grantor
shall be strictly liable without regard to any fault by Grantor.

     

    1.4           No Claim,
Offset or Defense.  Grantor acknowledges and agrees that: (i)
no offset or defense exists to
enforcement of the Loan Documents, and the Loan Documents are enforceable in
accordance with their respective terms; and (ii) no claims by Grantor exist against
Lender in connection with the making of the Loan and
the transactions
contemplated by the
Loan Documents, or, if any such claims exist, they are hereby unconditionally
and irrevocably waived, relinquished,
and forever discharged.

     

    ARTICLE
2

    GRANTOR’S
COVENANTS

     

    2.1           Payment
and Performance of Secured Obligations.  Borrower shall pay
when due all sums which are now or which
may become owing
under the Loan Documents, and shall pay and perform all other Secured
Obligations in accordance with their
terms.

     

    2.2           Payment
of Taxes, Utilities, Liens and Charges.

     

    (a)           Taxes and
Assessments.  Except as they may otherwise be paid from
reserves under Article
3, Grantor shall pay when due all taxes and assessments (including
without limitation, nongovernmental levies or assessments such as maintenance
charges, owner association dues, charges or fees, and levies and other charges
arising from covenants, conditions or restrictions) levied, assessed or charged
against or with respect to the Property or this Deed of Trust.  If
required by Lender, Grantor shall pay all costs and expenses of a tax monitoring
and verification service in order to verify to Lender that Grantor is in
compliance with this Section.  Upon request, Grantor shall promptly
furnish to Lender all notices of amounts due under this subparagraph and all
receipts evidencing such payments.

     

    
      
        DEED
OF TRUST

        
        

      

      
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    (b)           Utilities.  Grantor
shall pay when due
all utility charges and assessments for services furnished the
Property.

     

    (c)           Labor and
Materials.  Grantor shall pay when due the claims of all
persons supplying labor or materials to or in connection with the
Property.

     

    (d)           Liens and Charges. Grantor
shall promptly discharge any lien, encumbrance, or other charge, whether
superior or inferior to this Deed of Trust, which may be claimed against the
Property; provided that Grantor shall have the right to contest the amount or
validity in whole or in part of any lien, encumbrance or other charge against
the Property by appropriate proceedings conducted in good faith and with due
diligence, in which event Grantor, upon prior written notice to Lender, may
postpone or defer payment of such lien, encumbrance or other charge so long as
such proceedings shall operate to prevent the collection of the lien,
encumbrance or other charge, and provided that neither the Property nor any part
thereof will, by reason of such postponement or deferment, be in danger of being
forfeited or lost, and that Grantor, before the date such lien, encumbrance or
other charge, becomes delinquent, gives such reasonable security as may be
requested by Lender to ensure payment thereof and prevent any forfeiture or loss
of the Property or any part thereof.

     

    (e)           Taxes, Assessments and Other Charges
Imposed on Lender.  If, at any time after the date of this Deed
of Trust, any law is enacted or changed (including any interpretation thereof)
which subjects Lender to any increase in any tax (except federal income taxes),
assessment, or other charge, in any form measured by or based on any portion of
the indebtedness secured by this Deed of Trust, Grantor shall pay such increased
amount to Lender on demand; provided that if any such payment would be unlawful,
Lender may declare all accrued interest and the entire principal balance of the
Loan immediately due and payable.

     

    2.3           Insurance.

     

    (a)           Coverages
Required.  Grantor shall keep the following insurance coverages
in effect with respect to the Property:

     

    (i)           Insurance
against loss by fire and the hazards now or hereafter embraced by the standard
“All Risk” form of insurance, in an amount equal at all times to the full
insurable value of the Improvements, which during construction of the
Improvements shall be in the “Builder’s Risk” form.  All such
insurance coverage shall contain a “replacement cost endorsement” without
reduction for depreciation, and shall also contain loss of rents and/or business
interruption insurance coverage, a fluctuating value indorsement with a waiver
of the co-insurance clause (or an agreed amount indorsement with an inflation
guard endorsement), and shall contain such other indorsements as Lender may
reasonably request.  All such indorsements shall be in form and
substance satisfactory to Lender.

     

    
      
        DEED
OF TRUST

        
        

      

      
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    (ii)           Comprehensive
public liability insurance against claims for bodily injury, death or property
damage occurring on, in or about the Property in amounts and on terms acceptable
to the Lender.

     

    (iii)           Flood
insurance in an amount satisfactory to Lender and on terms satisfactory to
Lender if the Property is located in a designated flood hazard
area.

     

    (iv)           Insurance
against such similar or other hazards, casualties, liabilities and
contingencies, in such forms and amounts, as Lender may from time to time
reasonably require.

     

    (b)           Policies.  Each
insurance policy will be in a company and form acceptable to
Lender.  Each hazard insurance policy will include a Form 438BFU or
equivalent mortgagee endorsement in favor of and in form acceptable to
Lender.  All required policies will provide for at least ten (10)
days’ written notice to Lender prior to the effective date of any cancellation
or material amendment, which term shall include any reduction in the scope or
limits of coverage.  Grantor shall furnish to Lender the original of
each required insurance policy, or a certified copy thereof together with a
certificate of insurance setting forth the coverage, the limits of liability,
the carrier, the policy number and the expiration date.  As security
for the Secured Obligations, Grantor hereby assigns to Lender all required
insurance policies, together with all proceeds thereof, rights thereto and all
unearned premiums returnable upon cancellation.

     

    (c)           Payment;
Renewals.  Grantor shall promptly furnish to Lender all renewal
notices relating to insurance policies.  Except as the same may
otherwise be paid from reserves under Article 3, Grantor
shall pay all premiums on insurance policies directly to the
carrier.  At least thirty (30) days prior to the expiration date of
each such policy, Grantor shall furnish to Lender a renewal policy in a form
acceptable to Lender, together with evidence that the renewal premium has been
paid.

     

    (d)           Application of Insurance
Proceeds.  In the event of any loss, Grantor shall give prompt
written notice thereof to the insurance carrier and Lender.  Grantor
hereby authorizes Lender as Grantor’s attorney-in-fact to make proof of loss, to
adjust and compromise any claim, to commence, appear in and prosecute, in
Lender’s or Grantor’s name, any action relating to any claim, and to collect and
receive insurance proceeds; provided, however, that Lender shall have no
obligation to do so.  Lender shall apply any insurance proceeds
received by it hereunder first to the payment of the costs and expenses incurred
in the collection of the proceeds and then, in its absolute discretion and
without regard to the adequacy of its security, to:

     

    (i)           The
payment of the Secured Obligations, whether then due and payable or
not.  Any such application of proceeds to principal on the Loan shall
be without the imposition of any prepayment fee otherwise payable under the Loan
Documents, but shall not extend or postpone the due dates of the installment
payments under the Loan Documents, or change the amounts thereof;
or

     

    (ii)           The
reimbursement of Grantor, under Lender prescribed disbursement control
procedures, for the cost of restoration or repair of the
Property.  Lender may, at its option, condition the reimbursement on
Lender’s approval of the plans and specifications of the reconstruction,
contractor’s cost estimates, architect’s certificates, waivers of liens, sworn
statements of mechanics and materialmen, and such other evidence of costs,
percentage completion of construction, application of payments and satisfaction
of liens as Lender may reasonably require.

     

    
      
        DEED
OF TRUST

        
        

      

      
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    Except to
the extent that insurance proceeds are applied to payment of the Secured
Obligations, nothing herein contained shall be deemed to excuse Grantor from
restoring, repairing or maintaining the Property as provided in Section 2.4,
regardless of whether or not there are insurance proceeds available or whether
any such proceeds are sufficient in amount.

     

    (e)           Transfer of
Title.  If the Property is sold pursuant to Article 8 or if
Lender otherwise acquires title to the Property, Lender shall have all of the
right, title and interest of Grantor in and to any insurance policies and
unearned premiums thereon and in and to the proceeds resulting from any damage
to the Property prior to such sale or
acquisition.

     

    (f)           Notice
Under ORS 746.201 — WARNING.

     

    Unless
Borrower provides Lender with evidence of insurance coverage as required by this
Deed of Trust, Lender may purchase insurance at Borrower’s expense to protect
Lender’s interest.  This insurance may, but need not, also protect
Borrower’s interest.  If the Property is damaged, the coverage
purchased by Lender may not pay any claim made by Borrower or any claim made
against Borrower.  Borrower may later cancel the coverage obtained by
Lender by providing evidence that it has provided the insurance coverage
required by this Deed of Trust.

     

    Borrower
is responsible for the cost of any insurance obtained by Lender.  The
cost of that insurance may be added to the Obligations secured by this Deed of
Trust.  If the cost is added the Secondary Rate will apply to the
added amount.  The effective date of coverage may be the date
Borrower’s prior coverage lapsed or the date Borrower failed to provide proof of
coverage.

     

    The
coverage purchased by Lender may be considerably more expensive than insurance
Borrower may be able to obtain on its own and may not satisfy the need for
property damage coverage or any mandatory liability insurance requirements
imposed by applicable law.

     

    2.4           Preservation
and Maintenance of Property; Right of Entry.

     

    (a)           Preservation and
Maintenance.  Grantor represents and warrants that the
Improvements are free from damage caused by fire or other
casualty.  Grantor shall (i) not commit or suffer any waste or permit
any impairment or deterioration of the Property, (ii) not abandon the Property,
(iii) restore or repair promptly and in a good and workmanlike manner all or any
part of the Property to the equivalent of its original condition, or such other
condition as Lender may approve in writing, in the event of any damage, injury
or loss thereto, whether or not insurance proceeds are available to cover in
whole or in part the costs of such restoration or repair, (iv) keep the
Property, including improvements, fixtures, equipment, machinery and appliances
thereon, in good condition and repair and shall replace fixtures, equipment,
machinery and appliances of the Property when necessary to keep such items in
good condition and repair, and (v) generally operate and maintain the
Property in a commercially reasonable manner..

     

    
      
        DEED
OF TRUST

        
        

      

      
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    (b)           Alterations.  None
of the Improvements shall be structurally altered,
removed or demolished, in whole or in part, without Lender’s prior written
consent, nor shall any fixture or chattel covered by this Deed of Trust and
adapted to the use
and enjoyment of the Property be removed at any time without like consent
unless actually
replaced by an article of equal suitability which is owned by Grantor free and
clear of any lien
or security interest.

     

    (c)           Right of
Entry.  Lender is hereby authorized to enter the Property,
including the interior of any structures, at reasonable times and after
reasonable notice, for the purpose of inspecting the Property to determine
Grantor’s compliance with this Section.

     

    2.5           Parking.  If
any part of any vehicle parking areas included within the Property is
taken by condemnation, and before any parking areas are diminished for any other
reason, Grantor shall take all actions as are necessary to provide substitute
parking facilities in kind, size and location as necessary to comply with all
governmental zoning and other regulations and all leases.  Before
making any contract for substitute parking facilities, Grantor shall furnish to
Lender satisfactory assurance of completion thereof free of liens and in
conformity with all government zoning, and other regulations.

     

    2.6           Use of
Property.  Grantor shall comply with all laws, ordinances,
regulations and requirements of any governmental body, and all other covenants,
conditions and restrictions applicable to the Property, and pay all fees and
charges in connection therewith.  Unless required by applicable law or
unless Lender has otherwise agreed in writing, Grantor shall not allow changes
in the use for which all or any part of the Property was intended at the time
this Deed of Trust was executed.  Grantor shall not initiate or
acquiesce in a change in the zoning classification of the Property without
Lender’s prior written consent.

     

    2.7           Condemnation.

     

    (a)           Proceedings.  Grantor
shall promptly notify Lender of any action or proceeding relating to any
condemnation or other taking (including without limitation any change in the
grade of the Property), whether direct or indirect, of the Property or part
thereof or interest therein, and Grantor shall appear in and prosecute any such
action or proceeding unless otherwise directed by Lender in
writing.  Grantor authorizes Lender, at Lender’s option, as
attorney-in-fact for Grantor, to commence, appear in and prosecute, in Lender’s
or Grantor’s name, any action or proceeding relating to any such condemnation or
other taking, and to settle or compromise any claim in connection with such
condemnation or other taking.  All awards, payments, damages, direct,
consequential and otherwise, claims, and proceeds thereof, in connection with
any such condemnation or other taking, or for conveyances in lieu of
condemnation, are hereby assigned to Lender, and all proceeds of any such
awards, payments, damages or claims shall be paid to Lender.

     

    (b)           Application of Condemnation
Proceeds.  Lender shall apply any such proceeds in the
manner and
upon the terms and
conditions set forth in Section 2.3(d) relating to the application of
insurance proceeds.

     

    2.8           Protection
of Lender’s Security.  Grantor shall give notice to Lender of
and shall appear in and defend any action or proceeding that may affect the
Property, the interests of Lender or Trustee therein, or the rights or remedies
of Lender or Trustee under the Loan Documents.  If any such action or
proceeding is commenced, or Grantor fails to perform any obligation under the
Loan Documents, Lender or Trustee may, at their option, make any appearances,
disburse any sums, make any entries upon the Property, and take any actions as
may be necessary or desirable to protect or enforce the security of this Deed of
Trust, remedy any failure by Borrower or Grantor to perform its obligations
under the Loan Documents (and without waiving such default), or otherwise
protect Lender’s or Trustee’s interests.  Grantor shall pay all
losses, damages, fees, costs, and expenses incurred by Lender and Trustee in
taking such actions; including without limitation reasonable legal
fees.

     

    
      
        DEED
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    2.9           Reimbursement
of Lender’s and Trustee’s Expenses.  All amounts disbursed by
Lender and Trustee
pursuant to Section 2.8 or any
other provision of this Deed of Trust, with
interest thereon, shall be additional indebtedness secured by this Deed of
Trust.  All such amounts shall be immediately due and payable and bear
interest from the
date of disbursement at the lesser of the default rate under the Loan Documents,
or the maximum rate
permitted by law.

     

    2.10           Books and
Records; Financial Information.  Grantor shall keep and
maintain at Grantor’s address stated above, or such other place as Lender may
approve in writing, books of accounts and records adequate to reflect correctly
the results of the operation of the Property, and copies of all written
contracts, leases and other instruments which affect the
Property.  Such, books, records, contracts, leases and other
instruments shall be subject to examination, inspection and copying at any
reasonable time by Lender.  Grantor shall furnish to Lender within
thirty (30) days after Lender’s request, a rent roll for the Property, certified
by Grantor, showing the name of each tenant, the space occupied, the lease expiration date,
the monthly rent, the date to which rent has been paid, and any deposit Grantor
is holding, and such other financial statements and financial information
related to Grantor and/or the Property as Lender may request from time to
time.

     

    ARTICLE
3

    RESERVES

     

    3.1           Deposits.  If
required by Lender, Grantor shall, at the time of making each monthly
installment payment under the Loan Documents, deposit with Lender a sum, as
estimated by Lender, equal to the taxes and special assessments next due on the
Property, and the premiums that will next become due on insurance policies as
may be required under this Deed of Trust, less all sums already deposited
therefor, divided by the number of months to elapse before two (2) months prior
to the date when such taxes, special assessments and premiums will become
delinquent.  Lender may require Grantor to deposit with Lender, in
advance, such other sums for other taxes, assessments, premiums, charges and
impositions in connection with Grantor or the Property as Lender reasonably
deems necessary to protect Lender’s interests (“Other
Impositions”).  Such sums for Other Impositions shall be
deposited in a lump sum or in periodic installments, at Lender’s
option.  If required by Lender, Grantor shall promptly deliver to
Lender all bills and notices with respect to any taxes, assessments, premiums
and Other Impositions.  Unless Grantor and Lender otherwise agree in
writing, Lender shall not be required to pay Grantor any interest, earnings or
profits on any sums deposited with Lender.  All sums deposited with
Lender under this Section 3.1 are
hereby pledged as security for the Secured Obligations.

     

    3.2           Application
of Deposits.  All such deposited sums shall be held by Lender
and applied in such order as Lender elects to pay such taxes, assessments,
premiums and Other Impositions or, upon any Event of Default, may be applied in
whole or in part, to the Secured Obligations.  The arrangement
provided for in this Article 3 is solely
for the added protection of Lender and entails no responsibility on Lender’s
part beyond the allowing of due credit, without interest, for the sums actually
received by it.  Upon any assignment of this Deed of Trust by Lender,
any funds on hand shall be turned over to the assignee and any responsibility of
Lender with respect thereto shall terminate.  Each transfer of the
Property in accordance with Article 4 below shall
automatically transfer to the transferee all rights of Grantor with respect to
any funds deposited hereunder.  Upon payment in full of the Secured
Obligations, Lender shall promptly refund to Grantor the remaining balance of
any deposits then held by Lender.

     

    
      
        DEED
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    3.3           Adjustments
to Deposits.  If the total deposits held by Lender exceeds the
amount deemed necessary by Lender to provide for the payment of such taxes,
assessments, premiums and Other Impositions, such excess shall, provided there
is no Event of Default or any event which would constitute an Event of Default
if not cured within the time allowed, be credited by Lender on the next due
installment or installments of such deposits.  If at any time the
total deposits held by Lender are less than the amount deemed necessary by
Lender to provide for the payment of such taxes, assessments, premiums and Other
Impositions, Grantor shall promptly deposit the deficiency with Lender after
receipt of written demand from Lender.

     

    3.4           Conditional
Waiver.  Notwithstanding the foregoing, Beneficiary shall not
require the payment of reserves as provided in this Article until a delinquency
occurs in the payment of such taxes, assessments, premium and Other Impositions,
or the occurrence
of an Event of Default.

     

    ARTICLE
4

    RESTRICTIONS
ON TRANSFER OR ENCUMBRANCE

     

    To the
maximum extent permitted by applicable law, all Secured Obligations shall become
immediately due and payable in full in the event the Property or any part
thereof or interest therein is encumbered, sold (by contract or otherwise),
conveyed, or otherwise transferred by Grantor; or if there is any change in the
ownership or control of any of 30% or more of Grantor’s stock if Grantor is a
corporation, the ownership or control of any general partnership interest in
Grantor if Grantor is a partnership, the ownership of any beneficial interests
in Grantor if Grantor is not otherwise a natural person or persons, and the
ownership of stock, any general partnership interest, or any other beneficial
interest in any corporation, partnership or other entity that has an ownership
interest in Grantor.  The failure to pay all Secured Obligations as
required in this Section shall constitute an Event of Default
hereunder.

     

    ARTICLE
5

    UNIFORM COMMERCIAL CODE
SECURITY AGREEMENT

     

    5.1           Grant to
Lender.  This Deed of Trust constitutes a security agreement
pursuant to the Uniform Commercial Code with respect
to:

     

    (a)           Any
of the Property which, under applicable law, is not real property or effectively
made part of the real property by the provisions of this Deed of Trust;
and

     

    
      
        DEED
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    (b)           Any
and all other property now or hereafter described on any Uniform Commercial Code
Financing Statement
naming Grantor as Debtor and Lender as Secured Party and affecting property in
any way connected with the use and enjoyment of the Property (any and all such
other property constituting Property for purposes of this Deed of Trust); and
Grantor hereby grants Lender a security interest in all property described in
clauses (a) and (b) above as security for the Secured
Obligations.  Grantor and Lender agree, however, that neither the
foregoing grant of a security interest nor the filing of any such
financing statement shall be construed as limiting the parties’ stated intention
that everything used in connection with the production of income from the Property, or adapted
for use therein, or which is described or reflected in this Deed of Trust, is
and at all times shall be regarded as part of the Land.   A
photographic copy or other reproduction of this Deed of Trust or any financing
statement is sufficient as a financing statement and may be filed as
such.

     

    5.2           Lender’s
Rights and Remedies.  With respect to the property subject to
the foregoing security interest, Lender shall have all of the rights and
remedies of a secured party under the Uniform Commercial Code, and as provided
herein, including without limitation the right to cause such Property to be sold
by Trustee under the power of sale granted by this Deed of Trust, and as
provided by law.  In exercising its remedies, Lender may proceed
against the items of real property and any items of personal property separately
or together and in any order whatsoever without in any way affecting the
availability of Lender’s remedies.  Upon demand by Lender following an
Event of Default hereunder, Grantor will assemble any items of personal property
and make them available to Lender at the Property.  Lender shall give
Grantor at least five (5) days’ prior written notice of the time and place of
any public sale or other disposition of such Property or of the time of or after
which any private sale or any other intended disposition is to be made. Any person permitted by
law to purchase at any such sale may do so.  Such
Property may be sold at any one or more public or private sales as permitted by
applicable law.

     

    5.3           Filing of
Financing Statement.  Grantor warrants and represents to Lender
that the name and address of Grantor set out on the first page of this Deed of
Trust are complete and accurate, and Grantor authorizes Lender to file a
financing statement describing all personal property collateral included within
the Property.

     

    ARTICLE
6

    ASSIGNMENT
OF RENTS AND LEASES; LEASES OF PROPERTY;

    APPOINTMENT
OF RECEIVER, LENDER IN POSSESSION

     

    6.1           Assignment
of Rents and Leases. As an absolute
assignment and not as additional security for the Secured Obligations, Grantor
hereby absolutely and unconditionally assigns and transfers to Lender all right,
title and interest of Grantor in and to: any and all present and future leases,
subleases, and other agreements for the occupancy or use of all
or any part of the Property, and any and all extensions, renewals and
replacements thereof (“Leases”);
all cash or security deposits, advance rentals and deposits of a similar nature
under the Leases; any and all Lease guarantees; and all rents, issues, profits
and revenues (“Rents”)
now due or which may become due or to which Grantor may now or shall hereafter become entitled or may demand or claim
(including Rents coming due during any redemption period), arising or issuing
from or out of any and all Leases, including without limitation minimum,
additional, percentage and deficiency rents and liquidated damages.

     

    
      
        DEED
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    6.2           Collection
of Rents.  Prior to any Event of Default hereunder, Grantor
shall have a license to, and shall, collect and receive all Rents of the
Property as trustee for the benefit of Lender and Grantor, apply the Rents so
collected first to the payment of taxes, assessments and other charges on the
Property prior to delinquency, second to the cost of insurance, maintenance and
repairs required by the terms of this Deed of Trust, third to the costs of
discharging any obligation or liability of Grantor under the Leases, and fourth to
the Secured Obligations, with the balance, if any, to the account of Grantor
provided there is no Event of Default.  Upon delivery of written
notice by Lender to Grantor of an Event of Default hereunder and stating that
Lender exercises its rights to the Rents, and without the
necessity of Lender entering upon and taking and maintaining full control of the
Property in person, by agent or by a court-appointed receiver, Lender shall
immediately be entitled to possession of all Rents from the Property as the same become due and
payable including without limitation Rents then due and unpaid, and all such
Rents shall immediately upon delivery of such notice be held by Grantor as
trustee for the benefit of Lender
only.  Upon delivery of such written notice by Lender, Grantor hereby
agrees to direct each tenant or occupant of the Property to pay all Rents to
Lender on Lender’s written demand therefor, without any liability on the part of said tenant or
occupant to inquire further as to the existence of a default by
Grantor.  Grantor hereby authorizes Lender as Grantor’s
attorney-in-fact to make such direction to tenants and occupants upon Grantor’s
failure to do so as required herein.  Payments made to Lender by
tenants or occupants shall, as to such tenants and occupants, be in discharge of
the payors’
obligations to Grantor.  Lender may exercise, in Lender’s or Grantor’s
name, all rights and remedies available to Grantor with respect to collection of
Rents.  Nothing herein contained shall be construed as obligating
Lender to
perform any of
Grantor’s obligations under any of the Leases.

     

    6.3           Grantor’s
Representations and Warranties.  Grantor hereby represents and
warrants to Lender that Grantor has not executed and will
not execute any other assignment of said Leases or Rents, that Grantor has not
performed and will not perform any acts and has not
executed and will not execute any instrument which would prevent Lender from
exercising its rights under this Article 6, and that
at the time of
execution of this Deed of Trust there has been no anticipation or prepayment of
any of the Rents of
the Property for more than two (2) months prior to the due dates
thereof.  Grantor further represents and warrants to Lender that all existing Leases
are in good standing and there is no default thereunder, whether by Grantor or
lessee, and that, to Grantor’s knowledge, there is no event or condition
which, with notice
or the passage of time or both, would be a default
thereunder.  Grantor shall execute and deliver to Lender such further
assignments of
rents and leases of the Property as Lender may from time to time
request.

     

    6.4           Leases of
the Property.  Grantor shall comply with and observe
Grantor’s obligations as landlord under all Leases and will do all that is
necessary to preserve all Leases in force and free from any right of
counterclaim, defense or setoff.  At Lender’s request, Grantor shall
furnish Lender with executed copies of all Leases now existing or hereafter made
and all Leases hereafter entered into will be on a form and in substance
satisfactory to Lender.  All commercial Leases will specifically
provide that the tenant attorns to any person succeeding to the interest of
Grantor upon any foreclosure of this Deed of Trust or conveyance in lieu
thereof, such attornment shall be in such form as Lender may approve and shall
provide that Tenant shall not have the right of set off or defense to payment of
rents for any event or act that occurred prior to such successor obtaining title
to Grantor’s interest except to the extent such event or act is continuing at
the time such successor obtains such title. Tenant shall also agree to
execute such further evidences of attornment as Lender may from time to time
request.  Without Lender’s written consent, Grantor shall not collect
or accept payment of any Rents of the Property more than two (2) months prior to
the due dates thereof.

     

    
      
        DEED
OF TRUST

        
        

      

      
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    6.5           Lender in
Possession; Appointment of Receiver.  Upon any Event of Default
hereunder, Lender may, in person, by agent or by a court-appointed receiver,
regardless of the adequacy of Lender’s security, enter upon and take and
maintain full control of the Property in order to perform all acts necessary and
appropriate for the operation and maintenance thereof in the same manner and to
the same extent as Grantor could do the same, including without limitation the
execution, enforcement, cancellation and modification of Leases, the collection
of all Rents of the Property, the removal and eviction of tenants and other
occupants, the making of alterations and repairs to the Property, and the
execution and termination of contracts providing for management or maintenance
of the Property, all on such terms as are deemed best by Lender to protect the
security of this Deed of Trust.  From and after the occurrence of any
such Event of Default, if any owner of the Property shall occupy the Property or
part thereof such owner shall pay to Lender in advance on the first day of each
month a reasonable rental for the space so occupied, and upon failure so to do
Lender shall be entitled to remove such owner from the Property by any
appropriate action or proceedings.  Following an Event of Default
hereunder, Lender shall be entitled (regardless of the adequacy of Lender’s
security) to the appointment of a receiver, Grantor hereby consenting to the
appointment of such receiver.  Said receiver may serve without bond
and may be Lender or an employee of Lender.  The receiver shall have,
in addition to all the rights and powers customarily given to and exercised by
such receivers, all the rights and  powers granted to Lender in this
Article. Lender or the receiver shall be entitled to receive a reasonable fee
for so managing the Property.

     

    6.6           Application
of Rents.  All Rents collected subsequent to delivery of
written notice by Lender to Grantor of an Event of Default hereunder may be
applied first to the costs, if any, of taking control of and managing the
Property and collecting the Rents, including without limitation attorneys’ fees,
receiver’s fees, premiums on receiver’s bonds, costs of maintenance and repairs
to the Property, premiums on insurance policies, taxes, assessments and other
charges on the Property, and the costs of discharging any obligation or
liability of Grantor under the Leases, and then to the Secured
Obligations.  Lender or the receiver shall be liable to account only
for those Rents actually received.  Lender shall not be liable to
Grantor, anyone claiming under or through Grantor or anyone having an interest
in the Property by reason of anything done or left undone by Lender under this
Article.

     

    6.7           Deficiencies.  To
the extent, if any, that the costs of taking control of and managing the
Property, collecting the Rents, and discharging obligations and liabilities of
Grantor under the Leases, exceed the Rents of the Property, the excess sums
expended for such purposes shall be indebtedness secured by this Deed of
Trust.  Such excess sums shall be payable upon demand by Lender and
shall bear interest from the date of disbursement at the greater of the default
rate under the Loan Documents, or the maximum rate permitted by
law.

     

    6.8           Lender
Not Mortgagee in Possession.  Nothing herein shall constitute
Lender a “mortgagee in possession” prior to its actual entry upon and taking
possession of the Property.  Entry upon and taking possession by a
receiver shall not constitute possession by Lender.

     

    
      
        DEED
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    6.9           Enforcement.  Lender
may enforce this
assignment without first resorting to or exhausting any security or collateral
for the Secured Obligations.

     

    6.10           Prior
Rights.  If Lender has approved a prior deed of trust or
mortgage as part of the approved Permitted Exceptions on the Property, then
Lender’s rights under this Article shall be subject to and subordinate to the
rights, if any, of the lender(s) holding such prior rights under such prior
lien(s), to the extent such rights are legally valid, enforceable and enforced
by such lender(s).

     

    ARTICLE
7

    EVENTS
OF DEFAULT

     

    7.1           Events of
Default.  Any one or more of the following is an Event of
Default hereunder:

     

    (a)           Failure
to make any payment when due under the Loan Agreement, this Deed of Trust, or
any of the other Loan Documents.

     

    (b)           Failure
to pay all Secured Obligations in full as required under Article
4.

     

    (c)           Failure
to perform any other covenant, agreement or obligation under this Deed of Trust
(other than the payment of money) if not cured within the time allowed, if
any.

     

    (d)           Occurrence
of an Event of Default under the Loan Agreement or any of the other Loan
Documents, the Indemnity Agreement and/or any of the Permitted Exceptions that
is not cured within the applicable cure period (if any) set forth
therein.

     

    (e)           Grantor
or any trustee of Grantor files a petition in bankruptcy or for an arrangement,
reorganization or any other form of debtor relief, or such a petition is filed
against Grantor or any trustee of Grantor and the petition is not dismissed
within forty-five (45) days after filing.

     

    (f)           A
decree or order is entered for the appointment of a trustee, receiver or
liquidator for Grantor or Grantor’s property, and such decree or order is not
vacated within forty-five (45) days after the date of entry.

     

    (g)           Grantor
commences any proceeding for dissolution or liquidation, or any such proceeding
is commenced against Grantor and the proceeding is not dismissed within
forty-five (45) days after the date of commencement.

     

    (h)           Grantor
makes an assignment for the benefit of its creditors, or admits in writing its
inability to pay its debts generally as they become due.

     

    (i)           There
is an attachment, execution or other judicial seizure of any portion of
Grantor’s assets and such seizure is not discharged within ten (10)
days.

     

    (j)           Any
representation or disclosure made to Lender by Grantor or any guarantor in
connection with the Secured Obligations proves to be materially false or
misleading when made, whether or not that representation or disclosure is
expressly set forth in the Loan Documents.

     

    
      
        DEED
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    (k)           A
default occurs under any other indebtedness now or hereafter owing to Lender on
which Grantor or any obligor under the Loan Agreement or any guarantor of the
Loan is a maker or a guarantor, and such default is not cured within the
applicable cure period if any, under the instrument(s) evidencing such
indebtedness.

     

    (l)           A
default occurs under any lien encumbering the Property, or under any obligation
which is secured by a lien encumbering the Property.

     

    7.2           Inapplicability
of Cure Periods.  All cure periods provided in this Deed of
Trust or the other Loan Documents shall be
inapplicable if, in Lender’s reasonable judgment, the default is not capable of
being cured within the time allowed, or a delay in
Lender’s enforcement of its rights and remedies may result in a material
impairment of its
security.

     

    7.3           Form of
Notice.  At Lender’s option, any written notice of default
given to Grantor under Section 7.1 may be
given in the form of a statutory notice of default under the laws of the state
in which the Property is located pertaining to nonjudicial foreclosures of trust
deeds, or any other form as Lender may elect.

     

    ARTICLE
8

    REMEDIES

     

    8.1           Acceleration
Upon Default: Additional Remedies.  Upon any Event of Default, Lender
may, at its
option and without
notice to or demand upon Grantor, exercise any one or more of the following
actions:

     

    (a)           Declare
all the Secured Obligations immediately due and payable.

     

    (b)           Bring
a court action to enforce the provisions of this Deed of Trust or any of
the other Loan
Documents.

     

    (c)           Foreclose
this Deed of Trust as a mortgage.

     

    (d)           Cause any or all of the
Property to be sold under the power of sale granted by this Deed of
Trust in any manner
permitted by applicable
law.

     

    (e)           Elect
to exercise its rights with respect to the Leases and the Rents.

     

    (f)           Exercise
any or all of the other rights and remedies under this Deed of Trust and the
other Loan Documents.

     

    (g)           Exercise
any other right or remedy available under law or in equity.

     

    8.2           Exercise
of Power of Sale.  For any sale under the power of sale granted
by this Deed of Trust, Lender or Trustee shall record and give all notices
required by law and then, upon the expiration of such time as is required by
law, Trustee may sell the Property upon any terms and conditions specified by
Lender and permitted by applicable law.  Trustee may postpone any sale
by public announcement at the time and place noticed for the sale.  If
the Property includes several lots or parcels, Lender in its discretion may
designate their order of sale or may elect to sell all of them as an
entirety.  The Property, real, personal and mixed, may be sold in one
parcel.  To the extent any of the Property sold by the Trustee is
personal property, then Trustee shall be acting
as the agent of the Lender in selling such
Property.  Any person permitted by law to do so may purchase at
any sale.  Upon
any sale, Trustee will execute and deliver to the purchaser or purchasers a deed
or deeds conveying the Property sold, but without any covenant or warranty,
express or implied, and the recitals in the Trustee’s deed showing that the sale
was conducted in compliance with all the requirements of law shall be prima
facie evidence of such compliance and conclusive evidence thereof in favor of bona fide
purchasers and encumbrances for value.

     

    
      
        DEED
OF TRUST

        
        

      

      
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    8.3           Application
of Sale Proceeds. Except as may
otherwise be required by law, the proceeds of any sale
under this Deed of Trust will be applied in the following priority:

     

    First:  Payment of
the costs and expenses of the sale, including without limitation Trustee’s fees,
legal fees and disbursements, title charges and transfer taxes, and payment of
all expenses, liabilities and advances of Trustee, together with interest on all
advances made by Trustee from date of disbursement at the applicable interest
rate under the Loan Documents from time to time or at the maximum rate permitted
to be charged by Trustee under the applicable law if that is less.

     

    Second:  Payment of
all sums expended by Lender under the terms of this Deed of Trust and not yet
repaid, together with interest on such sums from date of disbursement at the
applicable interest rate under the Loan Documents from time to time or the
maximum rate permitted by applicable law if that is less.

     

    Third:   Payment
of all other Secured Obligations in any order that the Lender
chooses.

     

    Fourth:  The
remainder, if any, to the person or persons legally entitled to it.

     

    8.4           Waiver of
Order of Sale and Marshalling.  Lender shall have the right to
determine the order in which any or all portions of the secured indebtedness are
satisfied from the proceeds realized upon the exercise of any remedies provided
herein.  Grantor, any party who consents to this Deed of Trust and any
party who now or hereafter acquires a security interest in the Property and who
has actual or constructive notice hereof, hereby waives any and all right to
require marshalling of assets in connection with the exercise of any of the
remedies permitted by applicable law or provided herein, or to direct the order
in which any of the Property will be sold in the event of any sale under this
Deed of Trust.

     

    8.5           Non-Waiver
of Defaults.  The entering upon and taking possession of the
Property, the collection of Rents or the proceeds of fire and other insurance
policies or compensation or awards for any taking or damage of the Property, and
the application or release thereof as herein provided, shall not cure or waive
any default or notice of default hereunder or invalidate any act done pursuant
to such notice.

     

    8.6           Expenses
During Redemption Period.  If this Deed of Trust is foreclosed
through court action and the Property sold at a foreclosure sale, the Purchaser
may during any redemption period allowed, make such repairs or alterations on
the Property as may be reasonably necessary for the proper operation, care,
preservation, protection and insuring thereof.  Any sums so paid
together with interest thereon from the time of such expenditure at the greater
of the default rate under the Loan Documents, or the maximum rate permitted by
law, shall be added to and become a part of the amount required to be paid for
redemption from such sale.

     

    
      
        DEED
OF TRUST

        
        

      

      
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    8.7           Foreclosure
Subject to Tenancies.  Lender shall have the right at its
option to foreclose this Deed of Trust subject to the rights of any tenant or
tenants of the Property.

     

    8.8           Evasion
of Prepayment Terms.  If any Event of Default has occurred, a
tender of payment of the indebtedness secured hereby at any time prior to or at
a judicial or non-judicial foreclosure sale of the Property by Grantor, or
anyone on behalf of Grantor, shall constitute an evasion of any prepayment terms
of the Loan Documents and shall constitute a voluntary prepayment thereunder and
any such tender shall include any prepayment premium required under the Loan
Documents.

     

    8.9           Remedies
Cumulative.  To the extent permitted by law, every right and
remedy provided in this Deed of Trust is distinct and cumulative to all other
rights or remedies under this Deed of Trust or afforded by law or equity or any
other agreement between Lender and Grantor, and may be exercised concurrently,
independently or successively, in any order whatsoever.  Lender may
exercise any of its rights and remedies at its option without regard to the adequacy of its
security.

     

    8.10           Lender’s
and Trustee’s Expenses.  Grantor shall pay all of Lender’s and
Trustee’s expenses incurred in any efforts to enforce any terms of
this Deed of Trust, whether or not any suit is filed, including without
limitation legal fees and disbursements, foreclosure costs, appraisal fees,
environmental site assessment expenses, and title charges, including without
limitation, costs and expenses incurred in any bankruptcy, reorganization,
liquidation, receivership, or similar proceeding.  All such sums, with
interest thereon, shall be additional indebtedness of Grantor secured by this
Deed of Trust.  Such sums shall be immediately due
and payable and shall bear interest from the
date of disbursement at the lesser of the default rate under the
Loan Documents, or the maximum rate permitted by law.

     

    ARTICLE
9

    GENERAL

     

    9.1           No
Offset.  Grantor’s obligation to timely pay and perform all
obligations under the Loan, this Deed of Trust, and the other Loan Documents
shall be absolute and unconditional and shall not be affected by any event or
circumstance, including without limitation any setoff, counterclaim, abatement,
suspension, recoupment, deduction, defense or any other right that Grantor or
any guarantor may have or claim against Lender or any other person or
entity.  The foregoing shall not constitute a waiver of any claim or
demand which Grantor or any guarantor may have in damages or otherwise against
Lender or any other person or entity; provided that Grantor shall maintain a
separate action thereon.

     

    9.2           Application
of Payments.  Except as applicable law or this Deed of Trust
may otherwise provide, all payments received by Lender on the Loan or this Deed
of Trust shall be applied by Lender in the following order of priority: Lender’s
and Trustee’s expenses incurred in any efforts to enforce any terms of this Deed
of Trust; interest payable on advances made to protect the security of this Deed
of Trust; principal of such advances; amounts payable to Lender by Grantor under
Article 3 for
reserves; interest and late charges payable on the Loan; principal of the Loan;
and any other Secured Obligations in such order as Lender, at its option, may
determine; provided, however, that Lender may, at its option, apply any such
payments received to interest or principal prior to applying such payments to
interest on and principal of advances made to protect the security of this Deed
of Trust.

     

    
      
        DEED
OF TRUST

        
        

      

      
        Page 18 of
24

        
          

        

      

      
        
        

      

    

    9.3           Reconveyance.  Upon
payment of all sums secured by this Deed of Trust, Lender shall request Trustee
to reconvey the Property and shall surrender this Deed of Trust and all notes
evidencing indebtedness secured by this Deed of Trust to
Trustee.  Trustee shall reconvey this Property without warranty to the
person or persons legally entitled thereto.  The grantee in any
reconveyance may be described as the “person or persons legally entitled
thereto,” and the recitals therein of any matters or facts shall be conclusive
proof of the truthfulness thereof.  Such person or persons shall pay
Trustee’s reasonable costs incurred in so reconveying the Property.

     

    9.4           Successor
Trustee.  In accordance with
applicable law, Lender may from time to time appoint a successor trustee to any
Trustee appointed hereunder.  Without conveyance of the Property, the
successor trustee shall succeed to all the title, power and duties
conferred upon the Trustee herein and by applicable law.

     

    9.5           Lenders
Powers.  Without affecting the liability of any person for
payment or performance of the Secured Obligations or any of Lender’s rights or
remedies, Lender, at its option, may extend the time for payment of the
indebtedness secured hereby or any part thereof, reduce payment thereon, release
anyone liable on any of said indebtedness, accept a renewal note or notes
therefor, modify the terms and time of payment of the indebtedness, release the
lien of this Deed of Trust on any part of the Property, take or release other or
additional security, release or reconvey or cause to be released or reconveyed
all or any part of the Property, or consent and/or cause Trustee to consent to
the making of any map or plat of the Property, consent or cause Trustee to
consent to the granting of any easement or creating any restriction on the
Property or join or cause Trustee to join in any subordination or other
agreement affecting this Deed of Trust or the lien or charge
hereof.  Grantor shall pay Lender a reasonable service charge,
together with such title insurance premiums and attorneys’ fees as may be
incurred at Lender’s option, for any such action if taken at Grantor’s
request.

     

    9.6           Subrogation.  Lender
shall be subrogated for further security to the lien, although released of
record, of any and all encumbrances discharged, in whole or in part, by the
proceeds of the Loan or any other indebtedness secured hereby.

     

    9.7           Limitation
On Interest and Charges.  Interest, fees and charges collected
or to be collected in connection with the indebtedness secured
hereby shall not exceed the maximum, if any, permitted by any applicable
law.  If any such law is interpreted so that said interest, fees
and/or charges would exceed any such maximum and Grantor is entitled to the
benefit of such law, then such interest, fees and/or charges shall be reduced by
the amount necessary to reduce the same to the permitted maximum, and any sums
already paid to Lender which exceeded the permitted maximum will be
refunded.  Lender may choose to make the refund either by treating the
payments, to the extent of the excess, as prepayments of principal or by making
a direct payment to the person(s) entitled thereto.  No prepayment
premium shall be assessed on prepayments under this Section.  The
provisions of this Section shall control over any inconsistent provision of this
Deed of Trust or any other Loan Documents.

     

    
      
        DEED
OF TRUST

        
        

      

      
        Page 19 of
24

        
          

        

      

      
        
        

      

    

    9.8           Additional
Documents: Power of Attorney.  Grantor, from time to time,
shall execute, acknowledge and deliver to Lender upon request, and hereby
irrevocably appoints Lender its attorney-in-fact to execute, acknowledge,
deliver and if appropriate file and record, such security agreements,
assignments for security purposes, assignments absolute, financing statements,
affidavits, certificates and other documents, in form and substance satisfactory
to Lender, as Lender may request in order to perfect, preserve, continue, extend
or maintain the assignments herein contained, the lien and security interest
under this Deed of Trust, and the priority thereof.  Grantor shall pay
to Lender upon request therefor all costs and expenses incurred in connection
with the preparation, execution, recording and filing of any such
document.

     

    9.9           Waiver of
Statute of Limitations.  To the full extent Grantor may do so,
Grantor hereby waives the right to assert any statute of limitations as a
defense to the enforcement of the lien of this Deed of Trust or to any, action
brought to enforce the Loan Documents or any other obligation secured by this
Deed of Trust.

     

    9.10           Forbearance
By Lender Not a Waiver.  Any forbearance by Lender in
exercising any right or remedy hereunder, or otherwise afforded by applicable
law, shall not be a waiver of or preclude the exercise of any right or remedy,
and no waiver by Lender of any particular default shall constitute a waiver of
any other default or of any similar default in the future.  Without
limiting the generality of the foregoing, the acceptance by Lender of payment of
any sum secured by this Deed of Trust after the due date thereof shall not be a
waiver of Lender’s right to either require prompt payment when due of all other
sums so secured or to declare a default for failure to make prompt
payment.  The procurement of insurance or the payment of taxes or
other liens or charges by Lender shall not be a waiver of Lender’s right to
accelerate the maturity of the indebtedness secured by this Deed of Trust, nor
shall Lender’s receipt of any awards, proceeds or damages under Sections 2.3 and 2.7
hereof operate to cure or waive any default in payment of sums secured by this
Deed of Trust.

     

    9.11           Waiver of
Jury Trial.  LENDER AND GRANTOR WAIVE ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS DEED
OF TRUST AND THE OTHER LOAN DOCUMENTS OR OTHERWISE RELATING THERETO OR ARISING
FROM THE LENDING RELATIONSHIP SECURED HEREBY, AND EACH AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY.

     

    9.12           Modifications
and Waivers.  This Deed of Trust cannot be waived, changed,
discharged or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of any waiver, change, discharge or
termination is sought.

     

    9.13           Notice.  Any
notice to Grantor under this Deed of Trust shall be to the address noted above or
such other address
as may be designated by Grantor in writing and shall be deemed to have been
given on the date delivered in the case of personal delivery or, if mailed,
three (3) days after the postmark
thereof.

     

    
      
        DEED
OF TRUST

        
        

      

      
        Page 20 of
24

        
          

        

      

      
        
        

      

    

    9.14           Governing
Law; Venue.
This Deed of Trust and all other Loan Documents shall be construed,
enforced and otherwise governed exclusively by the laws of the State of
Washington to the greatest extent possible, except that matters relating to the
validity and enforcement of the lien of the Deed of Trust shall be governed by
the laws of the State of Oregon (the “Property
State”) to the extent necessary.  Grantor agrees that to the
fullest extent permitted by law, Washington law shall apply to all actions,
defenses and remedies including without limitation the existence and calculation
of any deficiency judgment upon foreclosure of any of the Deed of Trust, and
that the courts of the State of Washington, at Lender’s sole and exclusive
election, shall have exclusive jurisdiction of all actions, proceedings,
defenses or remedies arising out of the execution or enforcement of this Deed of
Trust or any of the other Loan Documents.  Grantor consents to
personal jurisdiction in the courts of Washington and the Property State, as
provided herein.  Grantor waives any objection based upon forum non conveniens or
similar arguments.

     

    9.15           Severability:
Captions. If any provision or clause of this Deed of Trust conflicts with
applicable law, such conflicts shall not affect other provisions or clauses
hereof which can be given effect without the conflicting provision, and to this
end the provisions
hereof are declared
to be severable.  The captions and headings of
the paragraphs and articles of this Deed of Trust are for
convenience only and are not to be used to interpret or define the provisions
hereof.

     

    9.16           Definitions.  As
used herein: the term “Grantor”
means the Grantor herein named, together with any subsequent owner of the
Property or any part thereof or interest therein; the
term “Trustee”
means the Trustee
herein named, together with any successor Trustee; and the term “Lender”
means the Lender herein named, together with any subsequent owner or
holder of the Loan or any interest therein, including pledges, assignees and
participants.

     

    9.17           Successors
and Assigns Joint and Several Liability; Agents.  This Deed
of Trust shall bind
and inure to the benefit of the parties hereto and their respective heirs,
devisees, legatees, administrators, executors, successors and assigns, subject
to the provisions of Article 4
hereof.  Each person executing this Deed of Trust as Grantor shall be
jointly and severally liable for all obligations of Grantor
hereunder.  In exercising any rights hereunder or taking actions
provided for herein, Lender and Trustee may act through their respective employees,
agents or independent contractors as authorized by Lender and
Trustee.

     

    9.18           Number:
Gender.  This Deed of Trust shall be construed so that wherever
applicable the use of the singular number shall include the plural number, and
vice versa, and the use of any gender shall be applicable to all
genders.

     

    9.19           Time.  Time
is of the essence in connection with all obligations of Grantor
herein.

     

    9.20           Attorney
Fees.  As used in this Deed of Trust and the Loan Documents,
“legal fees” and “attorney fees” shall include without limitation attorney fees
incurred at or in preparation for any trial, appeal or review or in any
proceeding under any present or future federal bankruptcy act or state
receivership law, and any appeal therefrom.

     

    9.21           Entire
Agreement.  This Deed of Trust together with the other Loan
Documents constitute the entire understanding and agreement of Grantor and
Lender with respect to the Secured Obligations.  The Loan Documents
supercede all prior negotiations, discussions, and agreements with respect to
the Secured Obligations, may not be contradicted by evidence of any alleged oral
agreement, and may not be amended, modified, rescinded or terminated in any
manner except by a written agreement signed by Grantor and Lender.

     

    
      
        DEED
OF TRUST

        
        

      

      
        Page 21 of
24

        
          

        

      

      
        
        

      

    

    9.22           Request
for Notice.  Grantor hereby requests that a copy of any notice
of default and notice of sale hereunder be mailed to it at its address set forth
at the beginning of this Deed of Trust.

    
      

       

      OREGON
WARNING:  THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED
IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND
REGULATIONS.  BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON
ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR
COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS
ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS
30.930.

       

      UNDER
OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY LENDER CONCERNING
LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR
HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER’S RESIDENCE, MUST BE IN
WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY LENDER TO BE
ENFORCEABLE.

    

     

    IN
WITNESS WHEREOF, Grantor has executed and delivered this Deed of
Trust.

     

    
      
        	 	SYNTHETECH,
      INC., an Oregon corporation	 
	 	 	 	 
	 	 	 	 
	
                 

              	
                By:
      

              	 	 
	 	 	 	 
	 	name: 	 	 
	 	 	 	 
	 	title:	 	 

      

    

     

     

    
      	STATE
      OF OREGON	)
	 	) SS
	COUNTY OF
      __________ 	)

    

     

                                                                    

    The
foregoing instrument is acknowledged before me this June _____, 2006, by
_____________________________, the ___________________ of SYNTHETECH, INC., an
Oregon corporation, on its behalf.

     

    

    
      
        	 	 	 	 
	 	 	Notary
      Public for the State of Oregon,	 
	 	 	My
      Commission Expires: __________________	 
	 	 	 	 

                                                                 

    

     

    
      
        DEED
OF TRUST

      

      
        Page 22 of
24

        
          

        

      

      
        
        

      

    

    EXHIBIT
A

    TO

    DEED
OF TRUST

     

    Legal
Description

     

    The
Property is situated in Linn County, State of Oregon, and is legally described
as follows:

     

    PARCEL
I:

     

    BEGINNING
AT THE MOST NORTHERLY CORNER OF LOT 4, BLOCK 1 OF THE SUPPLEMENTAL PLAT TO MARY
B. INDUSTRIAL SUBDIVISION IN, ALBANY, LINN COUNTY, OREGON; AND RUNNING THENCE
SOUTH 38°54’35” WEST A DISTANCE OF 220.17 FEET; THENCE SOUTH 51°05’25” EAST
174.58 FEET TO THE WESTERLY RIGHT-OF-WAY OF INDUSTRIAL WAY; THENCE NORTHEASTERLY
ALONG A 442.39 FOOT RADIUS CURVE LEFT (THE LONG CHORD OF WHICH BEARS NORTH
04°08’31” EAST 77.61 FEET) A DISTANCE OF 77.71 FEET; THENCE NORTH 00°53’25” WEST
203.59 FEET TO THE TRUE PLACE OF BEGINNING.

     

    ALSO:

     

    BEGINNING
AT A POINT WHICH IS SOUTH 38°54’35” WEST, 220.17 FEET FROM THE MOST NORTHERLY
CORNER OF LOT 4, BLOCK 1, OF THE SUPPLEMENTAL PLAT TO MARY D. INDUSTRIAL
SUBDIVISION IN ALBANY, LINN COUNTY, OREGON; AND RUNNING THENCE SOUTH 38°54’35”
WEST, A DISTANCE OF 100 FEET; THENCE SOUTH 51°05’25” EAST, TO A POINT ON THE
WESTERLY RIGHT-OF-WAY OF INDUSTRIAL WAY; THENCE NORTHERLY ALONG A 442.39 FOOT
RADIUS CURVE LEFT (THE LONG CHORD OF WHICH BEARS NORTH 23°05’55” EAST 212.93
FEET) TO A POINT WHICH IS SOUTH 51°05’25” SOUTH OF THE PLACE OF BEGINNING;
THENCE NORTH 51°05’25” WEST 174.58 FEET TO THE TRUE POINT OF
BEGINNING.

     

    PARCEL
II:

     

    BEGINNING
AT THE MOST WESTERLY CORNER OF LOT 4, BLOCK 1 OF THE SUPPLEMENTAL PLAT TO MARY
B. INDUSTRIAL, SUBDIVISION IN ALBANY, LINN COUNTY, OREGON; AND RUNNING THENCE
SOUTH 51°05’25” EAST A DISTANCE OF 232.83 FEET TO THE WESTERLY RIGHT-OF-WAY OF
INDUSTRIAL WAY; THENCE NORTH 38°54’35” EAST 173.31 FEET; THENCE NORTHEASTERLY
ALONG A 442.39 FOOT RADIUS CURVE LEFT (THE LONG CHORD OF WHICH BEARS NORTH
37°58’02” EAST 14.55 FEET) A DISTANCE OF 14.55 FEET; THENCE NORTH 51°05’25” WEST
232.59 FEET; THENCE SOUTH 38°54’35” WEST 187.87 FEET TO THE TRUE PLACE OF
BEGINNING.

     

    
      
        DEED
OF TRUST

      

      
        Page 23 of
24

        
          

        

      

      
        
        

      

    

    PARCEL
III:

     

    BEGINNING
AT A POINT WHICH IS SOUTH 38°54’35” WEST, 220.17 FEET FROM THE MOST NORTHERLY
CORNER OF LOT 4, BLOCK 1 OF THE SUPPLEMENTAL PLAT TO MARY B. INDUSTRIAL
SUBDIVISION IN ALBANY, LINN COUNTY, OREGON; AND RUNNING THENCE SOUTH 38°54’35”
WEST, A DISTANCE OF 204.87 FEET; THENCE SOUTH 51°05’25” EAST, 232.59 FEET TO THE
WESTERLY RIGHT-OF-WAY OF INDUSTRIAL WAY; THENCE NORTHEASTERLY ALONG A 442.39
FOOT RADIUS CURVE LEFT (THE LONG CHORD OF WHICH BEARS NORTH 23°05’58” EAST,
212.93 FEET) A DISTANCE OF 215.04 FEET; THENCE NORTH 51°05’25” WEST, 174.58 FEET
TO THE TRUE POINT OF BEGINNING.

     

    SAVE AND
EXCEPT THAT PORTION CONVEYED BY DEED RECORDED AUGUST 2, 1982 IN MICROFILM VOLUME
317, PAGE 427 DESCRIBED AS FOLLOWS:

     

    BEGINNING
AT A POINT WHICH IS SOUTH 38°54’35” WEST, 220.17 FEET FROM THE MOST NORTHERLY
CORNER OF LOT 4, BLOCK 1, OF THE SUPPLEMENTAL PART TO MARY D. INDUSTRIAL
SUBDIVISION IN ALBANY, LINN COUNTY, OREGON; AND RUNNING THENCE SOUTH 38°54’35”
WEST, A DISTANCE OF 100 FEET, THENCE SOUTH 51°05’25” EAST, TO A POINT ON THE
WESTERLY RIGHT-OF-WAY OF INDUSTRIAL WAY; THENCE NORTHERLY ALONG A 442.39 FOOT
RADIUS CURVE LEFT (THE LONG CHORD OF WHICH BEARS NORTH 23°05’55” EAST, 212.93
FEET), TO A POINT WHICH IS SOUTH 51°05’25” SOUTH OF THE PLACE OF BEGINNING,
THENCE NORTH 51°05’25” WEST 174.58 FEET TO THE TRUE POINT OF
BEGINNING.

     

    EXCEPTING
THEREFROM THAT PORTION OF SAID LAND DESCRIBED IN THE DEDICATION DEED TO THE CITY
OF ALBANY, RECORDED OCTOBER 17, 1994 IN VOLUME 0720, PAGE 739.

     

    PARCEL
IV:

     

    PARCEL 2,
PARTITION PLAT 1991-32, RECORD OF PARTITION PLATS, LINN COUNTY,
OREGON.

    
 

     

     

     

     

     

     

     

     

     

    
      

       

      DEED OF
TRUST

    

    Page 24 of
24fs80608ex10i_alliance.htm

    
      

      

       

      ALLIANCE
RECOVERY CORPORATION

      EQUITY INCENTIVE
PLAN

      

      1.           Purpose. The purpose
of the plan is to provide incentives to attract, retain and motivate eligible
persons whose present and potential contributions are important to the success
of ALLIANCE RECOVERY CORPORATION a Delaware corporation (the “Company”), and its
Subsidiaries and Affiliates, by offering them an opportunity to participate in
the Company’s future performance through awards of Options and Restricted Stock.
Capitalized terms not defined in the text are defined in Section
22.

      

      2.           Shares Subject to the Plan;
Per-Person Award Limitation.

      

      2.1  Number of Shares
Available. Subject to Sections 2.2 and 17, the total number of Shares
reserved and available for grant and issuance pursuant to the Plan shall be Five
Million (5,000,000) Shares. Subject to Sections 2.2 and 17, Shares shall again
be available for grant and issuance in connection with future Awards under the
Plan that: (a) are subject to issuance upon exercise of an Option but cease to
be subject to such Option for any reason other than exercise of such Option; (b)
are subject to an Award granted hereunder but are forfeited; or (c) are subject
to an Award that otherwise terminates without Shares being issued. Subject to
Sections 2.2 and 17, in no event shall the aggregate number of Shares that may
be issued pursuant to incentive stock options exceed Five Million (5,000,000)
Shares.

      

      2.2  Adjustment of Shares.
In the event that the number of outstanding Shares is changed by a stock
dividend, recapitalization, stock split, reverse stock split, subdivision or
similar change in the capital structure of the Company without consideration,
then: (a) the number of Shares reserved for issuance under the Plan; (b) the
Exercise Prices of and number of Shares subject to outstanding Options; and (c)
the number of Shares subject to other outstanding Awards shall be
proportionately adjusted, subject to any required action by the Board or the
shareholders of the Company and in compliance with applicable securities
laws.

      

      2.3  Individual Award
Limitation. Notwithstanding any other provision in this Plan, and in
addition to any requirements of this Plan, the maximum number of Shares granted
hereunder to any one Participant may not exceed twenty percent (20%) of the
total Shares subject to the Plan (subject to adjustments as provided in Sections
2.2 and 17 hereof).

      

      3.    Eligibility.

      

      3.1  General.
All  Awards set forth herein may be granted to employees, officers,
directors,  consultants and advisors of the Company or any Parent,
Subsidiary or Affiliate of the Company, provided such consultants and advisors
render bona fide services not in connection with the offer and sale of
securities in a capital-raising transaction. A person may be granted more than
one Award under the Plan.

      

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      4.    Administration.

      

      4.1  Compensation
Committee. The Plan shall be administered by a committee ("Committee")
appointed by the Company's Board of Directors. The membership of the Committee
shall be constituted so as to comply at all times with the then applicable
requirements for “outside directors” of Rule 16b-3 promulgated under the
Exchange Act and Section 162(m) of the Code. Any determination made by the
Committee with respect to any Award shall be made in its sole discretion at the
time of grant of the Award or, unless in contravention of any express term of
the Plan or Award, at any later time, and such determination shall be final and
binding on the Company and all persons having an interest in any Award under the
Plan.

      

      4.2  Committee Authority.
Subject to the general purposes, terms and conditions of the Board, the
Committee shall have full power to implement and carry out the Plan. The
Committee may delegate to one or more officers of the Company the authority to
make recommendations to grant an Award under the Plan to Participants who are
not Insiders of the Company. The Committee shall have the authority
to:

      

      
        	
                 
      

              	
                (a)

              	
                construe
      and interpret the Plan, any Award Agreement and any other agreement or
      document executed pursuant to the
Plan;

              

      

      
        	
                 
      

              	
                (b)

              	
                recommend
      to the Board amendments to the rules and regulations relating to the
      Plan;

              

      

      
        	
                 
      

              	
                (c)

              	
                select
      the persons to receive Awards;

              

      

      
        	
                 
      

              	
                (d)

              	
                determine
      the form and terms of Awards;

              

      

      
        	
                 
      

              	
                (e)

              	
                determine
      the number of Shares or other consideration subject to
    Awards;

              

      

      
        	
                 
      

              	
                (f)

              	
                determine
      whether Awards will be granted singly, in combination, in tandem with, in
      replacement of, or as alternatives to, other Awards under the Plan or any
      other incentive or compensation plan of the Company or any Parent,
      Subsidiary or Affiliate of the
Company;

              

      

      
        	
                 
      

              	
                (g)

              	
                determine
      the granting of certain waivers of Plan or Award
    conditions;

              

      

      
        	
                 
      

              	
                (h)

              	
                determine
      the conditions concerning the vesting, exercisability and payment of
      Awards;

              

      

      
        	
                 
      

              	
                (i)

              	
                recommend
      to the Board such matters so as to correct any defect, supply any
      omission, or reconcile any inconsistency in the Plan, any Award or any
      Award Agreement;

              

      

      
        	
                 
      

              	
                (j)

              	
                determine
      whether an Award has been earned;
and

              

      

      
        	
                 
      

              	
                (k)

              	
                make
      all other determinations necessary or advisable for the administration of
      the Plan.

              

      

      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      4.3  Exchange Act
Requirements. If the Company is subject to the Exchange Act, the Company
will take appropriate steps to comply with the disinterested director
requirements of Section 16(b) of the Exchange Act, including but not limited to,
the appointment by the Board of a committee consisting of not less than two
persons (who are members of the Board), each of whom is a Disinterested
Person.

      

      4.4  Address of Committee.
The Committee’s address to which any correspondence or notifications may be sent
or given is:

      

      ALLIANCE
RECOVERY CORPORATION

      1000 N.W.
St.

      Suite
1200

      Wilmington,
DE 19801

      Attention:
Chief Executive Officer

      

      5.    Options. The
Committee may grant Options to eligible persons and shall determine whether such
Options shall be Incentive Stock Options within the meaning of the Code (“ISO”)
or Nonqualified Stock Options (“NQSO”), the number of Shares subject to the
Option, the Exercise Price of the Option, the period during which the Option may
be exercised, and all other terms and conditions of the Option, subject to the
following:

      

      5.1  Form of Option Grant.
Each Option granted under the Plan shall be evidenced by an Award Agreement
which shall expressly identify the Option as an ISO or NQSO (“Stock Option
Agreement”), and be in such form and contain such provisions (which need not be
the same for each Participant) as the Committee shall from time to time approve,
and which shall comply with and be subject to the terms and conditions of the
Plan.

      

      5.2  Date of Grant. The
date of grant of an Option shall be the date on which the Committee makes the
determination to grant such Option, unless otherwise specified by the Committee.
The Stock Option Agreement and a copy of the Plan will be delivered to the
Participant within a reasonable time after the granting of the
Option.

      

      5.3  Exercise Period.
Options shall be exercisable within the times or upon the events determined by
the Committee as set forth in the Stock Option Agreement; provided, however,
that no Option shall be exercisable after the expiration of ten (10) years from
the date the Option is granted, and provided further that no Option granted to a
person who directly or by attribution owns more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or any Parent
or Subsidiary of the Company (“Ten Percent Shareholder”) shall be exercisable
after the expiration of five (5) years from the date the Option is granted. The
Committee also may provide for the Options to become exercisable at one time or
from time to time, periodically or otherwise, in such number or percentage as
the Committee determines.

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      
 

      5.4  Exercise Price. The
Exercise Price shall be determined by the Committee when the Option is granted
and may be not less than the par value of a Share on the date of grant provided
that: (i) the Exercise Price of an ISO shall be not less than one hundred
percent (100%) of the Fair Market Value of the Shares on the date of grant; (ii)
the Exercise Price of any ISO granted to a Ten Percent Shareholder shall not be
less than one hundred ten percent (110%) of the Fair Market Value of the Shares
on the date of grant; and (iii) the Exercise Price of any option granted that
the Committee intends to qualify under Section 162(m) of the Code, shall not be
less than one hundred percent (100%) of the Fair Market Value of the Shares on
the date of grant. Payment for the Shares purchased may be made in accordance
with Section 7 of the Plan.

      

      5.5  Method of Exercise.
Options may be exercised only by delivery to the Company of a written stock
option exercise agreement (the “Exercise Agreement”) in a form approved by the
Committee (which need not be the same for each Participant), stating the number
of Shares being purchased, the restrictions imposed on the Shares, if any, and
such representations and agreements regarding Participant’s investment intent
and access to information and other matters, if any, as may be required or
desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price for the number of Shares being
purchased.

      

      5.6  Termination. Unless
otherwise set forth in the Stock Option Agreement, the exercise of an Option
shall be subject to the following:

      

      
        	
                 
      

              	
                (a)
      If the Participant is Terminated for any reason except death or
      Disability, then Participant may exercise such Participant’s Options only
      to the extent that such Options would have been exercisable upon the
      Termination Date no later than three (3) months after the Termination Date
      (or such shorter time period as may be specified in the Stock Option
      Agreement), but in any event, no later than the expiration date of the
      Options.

              

      

      

      
        	
                 
      

              	
                (b)
      If the Participant is terminated because of death or Disability (or the
      Participant dies within three (3) months of such termination), then
      Participant’s Options may be exercised only to the extent that such
      Options would have been exercisable by Participant on the Termination Date
      and must be exercised by Participant (or Participant’s legal
      representative or authorized assignee) no later than twelve (12) months
      after the Termination Date (or such shorter time period as may be
      specified in the Stock Option Agreement), but in any event no later than
      the expiration date of the Options; provided, however, that in the event
      of termination due to Disability other than as defined in Section 22(e)(3)
      of the Code, any ISO that remains exercisable after ninety (90) days after
      the date of termination shall be deemed a
NQSO.

              

      

      

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      5.7  Limitations on
Exercise. The Committee may specify a reasonable minimum number of Shares
that may be purchased on any exercise of an Option, provided that such minimum
number will not prevent Participant from exercising the Option for the full
number of Shares for which it is then exercisable.

       

      5.8  Modification, Extension or
Renewal. The Committee may modify, extend or renew outstanding Options
and authorize the grant of new Options in substitution therefore, provided that
any such action may not without the written consent of Participant, impair any
of Participant’s rights under any Option previously granted. Any outstanding ISO
that is modified, extended, renewed or otherwise altered shall be treated in
accordance with Section 424(h) of the Code. The Committee may reduce the
Exercise Price of outstanding Options without the consent of Participants
affected by a written notice to them; provided, however, that the Exercise Price
may not be reduced below the minimum Exercise Price that would be permitted
under Section 5.4 of the Plan for Options granted on the date the action is
taken to reduce the Exercise Price.

      

      5.9  No Disqualification.
Notwithstanding any other provision in the Plan, no term of the Plan relating to
ISOs shall be interpreted, amended or altered, nor shall any discretion or
authority granted under the Plan be exercised, so as to disqualify the Plan
under Section 422 of the Code or, without the consent of the Participant
affected, to disqualify any ISO under Section 422 of the Code.

      

      6.    Restricted Stock. A
Restricted Stock Award is an offer by the Company to sell to an eligible person
Shares that are subject to restrictions. The Committee shall determine to whom
an offer will be made, the number of Shares the person may purchase, the price
to be paid (the “Purchase Price”), the restrictions to which the Shares shall be
subject, and all other terms and conditions of the Restricted Stock Award,
subject to the following:

      

      6.1  Form of Restricted Stock
Award. All purchases under a Restricted Stock Award made pursuant to the
Plan shall be evidenced by an Award Agreement (“Restricted Stock Purchase
Agreement”) that shall be in such form (which need not be the same for each
Participant) as the Committee, shall from time to time approve, and shall comply
with and be subject to the terms and conditions of the Plan. The offer of
Restricted Stock shall be accepted by the Participant’s execution and delivery
of the Restricted Stock Purchase Agreement and full payment for the shares to
the Company within thirty (30) days from the date the Restricted Stock Purchase
Agreement is delivered to the person. If such person does not execute and
deliver the Restricted Stock Purchase Agreement along with full payment for the
Shares to the Company within thirty (30) days, then the offer shall terminate,
unless otherwise determined by the Committee.

      

      6.2  Purchase Price. The
Purchase Price of Shares sold pursuant to a Restricted Stock Award shall be
determined by the Committee on the date the Restricted Stock Award is granted
but shall in no event less than the par value of the Shares. Payment of the
Purchase Price may be made in accordance with Section 7 of the
Plan.

       

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      
 

      6.3  Restrictions.
Restricted Stock Awards shall be subject to such restrictions as the Committee
may impose. The Committee may provide for the lapse of such restrictions in
installments and may accelerate or waive such restrictions, in whole or in part,
based on length of service, performance or such other factors or criteria as the
Committee may determine. Restricted Stock Awards that the Committee intends to
qualify under Code section 162(m) shall be subject to a performance-based goal.
Restrictions on such stock shall lapse based on one (1) or more of the following
performance goals: stock price, market share, sales increases, earning per
share, return on equity, cost reductions, or any other similar performance
measure established by the Committee. Such performance measures shall be
established by the Committee, in writing, no later than the earlier of: (a)
ninety (90) days after the commencement of the performance period with respect
to which the Restricted Stock award is made; and (b) the date as of which
twenty-five percent (25%) of such performance period has elapsed.

      

      7.    Payment For Share
Purchases.

      

      7.1  Payment. Payment for
Shares purchased pursuant to the Plan may be made in cash (by check) or, where
expressly approved for the Participant by the Committee and where permitted by
law:

      

      
        	
                 
      

              	
                (a)
      by cancellation of indebtedness of the Company to the
      Participant;

              

      

      

      
        	
                 
      

              	
                (b)
      by transfer of Shares that either (1) have been owned by Participant for
      more than six (6) months and have been paid for within the meaning of SEC
      Rule 144; or (2) were obtained by Participant in the public
      market;

              

      

      

      
        	
                 
      

              	
                (c)
      by waiver of compensation due or accrued to Participant for services
      rendered;

              

      

      

      
        	
                 
      

              	
                (d)
      by tender of property;

              

      

      

      
        	
                 
      

              	
                (e)
      with a promissory note in favor of the Company, which such note shall (1)
      provide for full recourse to the maker, (2) be collateralized by the
      pledge of the Shares that the Optionee purchases upon exercise of the
      Option, (3) bear interest at the prime rate of the Company’s principal
      lender, and (4) contain such other terms as the Committee in its sole
      discretion shall reasonably
require;

              

      

      

      
        	
                 
      

              	
                (f)
      by a “cashless exercise” in which Shares which would otherwise be
      delivered upon exercise of the Option may be used to satisfy the payment
      of the exercise price of the Option, in accordance with the following
      formula:

              

      

       

      X = Y (A-B)

      
        	
                 
      

              	
                A

              

      

      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      Where:

      X = the
number of Shares to be issued to Optionee.

      Y = the
number of Shares purchasable under the amount of the Option being
exercised

      A = the
per Share Fair Market Value

      
        	
                 
      

              	
                B =
      the per Share Exercise Price of the
Option

              

      

      

      
        	
                 
      

              	
                (g)
      with respect only to purchases upon exercise of an Option, and provided
      that a public market for the Company’s stock
  exists:

              

      

      

      
        	
                 
      

              	
                (1)
      through a “same day sale” commitment from Participant and a broker-dealer
      that is a member of the National Association of Securities Dealers (an
      “NASD Dealer”) whereby the Participant irrevocably elects to exercise the
      Option and to sell a portion of the Shares so purchased to pay for the
      Exercise Price, and whereby the NASD Dealer irrevocably commits upon
      receipt of such Shares to forward the Exercise Price directly to the
      Company; or

              

      

      

      
        	
                 
      

              	
                (2)
      through a “margin” commitment from Participant and an NASD Dealer whereby
      Participant irrevocably elects to exercise the Option and to pledge the
      Shares so purchased to the NASD Dealer in a margin account as security for
      a loan from the NASD Dealer in the amount of the Exercise Price, and
      whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
      forward the exercise price directly to the Company;
  or

              

      

      
        	
                 
      

              	
                 

              	
                

                  (h)
      by any combination of the
foregoing.

                

              

      

      

      If the
Exercise Price or purchase price is paid in whole or in part with Shares, or
through the withholding of Shares issuable upon exercise of the Option, the
value of the Shares surrendered or withheld shall be their Fair Market Value on
the date the Option is exercised.

      

      8.    Withholding
Taxes.

      

      8.1  Withholding
Generally. Whenever Shares are to be issued in satisfaction of Awards
granted under the Plan, the Company may require the Participant to remit to the
Company an amount sufficient to satisfy federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
Shares. Whenever, under the Plan, payments in satisfaction of Awards are to be
made in cash, such payment shall be net of an amount sufficient to satisfy
federal, state, and local withholding tax requirements

       

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

       

      8.2  Stock Withholding.
When, under applicable tax laws, a Participant incurs tax liability in
connection with the exercise or vesting of any Award that is subject to tax
withholding and the Participant is obligated to pay the Company the amount
required to be withheld, the Committee may allow the Participant to satisfy the
minimum withholding tax obligation by electing to have the Company withhold from
the Shares to be issued that number of Shares having a Fair Market Value equal
to the minimum amount required to be withheld, determined on the date that the
amount of tax to be withheld is to be determined (the “Tax Date”). All elections
by a Participant to have Shares withheld for this purpose shall be made in
writing in a form acceptable to the Committee and shall be subject to the
following restrictions:

      

      
        	
                 
      

              	
                (a)
      the election must be made on or prior to the applicable Tax
      Date;

              

      

      

      
        	
                 
      

              	
                (b)
      once made, then except as provided below, the election shall be
      irrevocable as to the particular Shares as to which the election is
      made;

              

      

      

      
        	
                 
      

              	
                (c)
      all elections shall be subject to the consent or disapproval of
      the         Committee;

              

      

      

      
        	
                 
      

              	
                (d)
      if the Participant is an Insider and if the Company is subject to Section
      1 6(b) of the Exchange Act: (1) the election may not be made within six
      (6) months of the date of grant of the Award, except as otherwise
      permitted by SEC Rule 1 6b-3(e) under the Exchange Act, and (2) either (A)
      the election to use stock withholding must be irrevocably made at least
      six (6) months prior to the Tax Date (although such election may be
      revoked at any time at least six (6) months prior to the Tax Date) or (B)
      the exercise of the Option or election to use stock withholding must be
      made in the ten (10) day period beginning on the third day following the
      release of the Company’s quarterly or annual summary statement of sales or
      earnings; and

              

      

      

      
        	
                 
      

              	
                (e)
      in the event that the Tax Date is deferred until six (6) months after the
      delivery of Shares under Section 83(b) of the Code, the Participant shall
      receive the full number of Shares with respect to which the exercise
      occurs, but such Participant shall be unconditionally obligated to tender
      back to the Company the proper number of Shares on the Tax
      Date.

              

      

      

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      9.           
Privileges of Stock
Ownership. No Participant shall have any of the rights of a shareholder
with respect to any Shares until the Shares are issued to the Participant. After
Shares are issued to the Participant, the Participant shall be a shareholder and
have all the rights of a shareholder with respect to such Shares, including the
right to vote and receive all dividends or other distributions made or paid with
respect to such Shares; provided, that if such Shares are Restricted Stock, then
any new, additional or different securities the Participant may become entitled
to receive with respect to such Shares by virtue of a stock dividend, stock
split or any other change in the corporate or capital structure of the Company
shall be subject to the same restrictions as the Restricted Stock.

      

      10.           Transferability.
Awards granted under the Plan, and any interest therein, shall not be
transferable or assignable by Participant, and may not be made subject to
execution, attachment or similar process, otherwise than by will or by the laws
of descent and distribution or as consistent with the specific Plan and Award
Agreement provisions relating thereto. During the lifetime of the Participant an
Award shall be exercisable only by the Participant, and any elections with
respect to an Award, may be made only by the Participant.

      

      11.           Restrictions on
Shares. At the discretion of the Committee, the Company may reserve to
itself and/or its assignee(s) in the Award Agreement a right of first refusal to
purchase all Shares that a Participant (or a subsequent transferee) may propose
to transfer to a third party.

      

      12.           Certificates. All
certificates for Shares or other securities delivered under the Plan shall be
subject to such stock transfer orders, legends and other restrictions as the
Committee may deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed.

      

      13.    Escrow; Pledge of
Shares. To enforce any restrictions on a Participant’s Shares, the
Committee may require the Participant to deposit all certificates representing
Shares, together with stock powers or other instruments of transfer approved by
the Committee, appropriately endorsed in blank, with the Company or an agent
designated by the Company to hold in escrow until such restrictions have lapsed
or terminated, and the Committee may cause a legend or legends referencing such
restrictions to be placed on the certificates.

      

      14.    Exchange and Buy out of
Awards. The Committee, may, at any time or from time to time, authorize
the Company, with the consent of the respective Participants, to issue new
Awards in exchange for the

      
        	
                13.  

              	 

      

      

      surrender
and cancellation of any or all outstanding Awards. The Company may at any time
buy from a Participant an Award previously granted with payment in cash, Shares
(including Restricted Stock) or other consideration, based on such terms and
conditions as the Company and the Participant shall agree.

       

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      
 

      15.    Securities Law and Other
Regulatory Compliance. An Award shall not be effective unless such Award
is in compliance with all applicable federal and state securities laws, rules
and regulations of any governmental body, and the requirements of any stock
exchange or automated quotation system upon which the Shares may then be listed,
as they are in effect on the date of grant of the Award and also on the date of
exercise or other Issuance. Notwithstanding any other provision in the Plan, the
Company shall have no obligation to issue or deliver certificates for Shares
under the Plan prior to: (a) obtaining any approvals from governmental agencies
that the Company determines are necessary or advisable, and/or (b) completion of
any registration or other qualification of such shares under any state or
federal law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company shall be under no obligation to register the
Shares with the SEC or to effect compliance with the registration, qualification
or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company shall have no liability for any
inability or failure to do so.

      

      16.    No Obligation to
Employ. Nothing in the Plan or any Award granted under the Plan shall
confer or be deemed to confer on any Participant any right to continue in the
employ of, or to continue any other relationship with, the Company or any
Parent, Subsidiary or Affiliate of the Company or limit in any way the right of
the Company or any Parent, Subsidiary or Affiliate of the Company to terminate
Participant’s employment or other relationship at any time, with or without
cause.

      

      17.    Corporate
Transactions.

      

      17.1  Assumption or Replacement of
Awards by Successor. In the event of (a) a merger or consolidation in
which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the shareholders of the company and the Awards granted
under the Plan are assumed or replaced by the successor corporation, which
assumption shall be binding on all Participants); (b) a dissolution or
liquidation of the Company; (c) the sale of substantially all of the assets of
the Company; or (d) any other transaction which qualifies as a “corporate
transaction” under Section 424(a) of the Code wherein the shareholders of the
Company give up all of their equity interest in the Company (except for the
acquisition, sale or transfer of all or substantially all of the outstanding
shares of the Company), all outstanding Awards may, to the extent permitted by
applicable law, be replaced by the successor corporation (if any) with Awards of
equivalent value, which replacement shall be binding on all Participants. In the
alternative, substantially similar consideration may be provided to Participants
as was provided to shareholders (after taking into account the existing
provisions of the Awards). The successor corporation may also issue, in place of
outstanding Shares of the Company held by the Participant, substantially similar
shares or other property subject to repurchase restrictions no less favorable to
the Participant.

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      
 

      17.2  Other Treatment of
Awards. Subject to any greater rights granted to Participants under the
foregoing provisions of this Section 17, in the event of the occurrence of any
transaction described in Section 17.1, any outstanding Awards shall be treated
as provided in the applicable agreement or plan of merger, consolidation,
dissolution, liquidation, sale of assets or other “corporate
transaction.”

      

      17.3  Assumption of Awards by the
Company. The Company, from time to time, also may grant Awards identical
to awards granted by another company, whether in connection with an acquisition
of such other company or otherwise, by granting an Award under the Plan in
replacement of such other company’s award. Such replacement shall be permissible
if the holder of the replaced award would have been eligible to be granted an
Award under the Plan if the other company had applied the rules of the Plan to
such grant. In the event the Company grants Awards identical to an award granted
by another company, the terms and conditions of such award shall remain
unchanged (except that the exercise price and the number and nature of Shares
issuable upon exercise of any such option will be adjusted approximately
pursuant to Section 424(a) of the Code).

      

      18.           Adoption and Shareholder
Approval. The Plan shall become effective on the date that it is adopted
by the Board (the “Effective Date”). The Plan shall be approved by the
shareholders of the Company (excluding Shares issued pursuant to this Plan),
consistent with applicable laws, within twelve months before or after the
Effective Date. Upon the Effective Date, the Committee may grant Awards pursuant
to the Plan; provided, however, that: (a) no Option may be exercised prior to
initial shareholder approval of the Plan; (b) no Option granted pursuant to an
increase in the number of Shares approved by the Board shall be exercised prior
to the time such increase has been approved by the shareholders of the Company;
and in the event that shareholder approval is not obtained within the time
period provided herein, all Awards granted hereunder shall be canceled, any
Shares issued pursuant to any Award shall be canceled and any purchase of Shares
hereunder shall be rescinded. After the Company becomes subject to Section 16(b)
of the Exchange Act, the Company will comply with the requirements of Rule 16b-3
(or its successor), as amended, with respect to shareholder
approval.

       

      19.           Term of Plan. The
Plan will terminate ten (10) years from the Effective Date or, if earlier, the
date of shareholder approval of the Plan.

      

      20.           Amendment or Termination of
Plan. The Board may at any time terminate or amend the Plan in any
respect, including without limitation amendment of any form of Award Agreement
or instrument to be executed pursuant to the Plan; provided, however, that: (a)
the Board shall not, without the approval of the shareholders of the Company,
amend the Plan in any manner that requires such shareholder approval pursuant to
the Code or the regulations promulgated thereunder as such provisions apply to
ISO plans or pursuant to the Exchange Act or Rule 16b-3 (or its successor), as
amended, thereunder; and (b) no outstanding Award shall be deemed effected by
such amendment without the advance written consent of the Participant(s) holding
such outstanding Award(s) at the time of the proposed termination or
amendment.

       

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      
 

      21.    Nonexclusivity of the Plan.
Neither the adoption of the Plan by the Board, the submission of the Plan
to the shareholders of the Company for approval, nor any provision of the Plan
shall be construed as creating any limitations on the power of the Board to
adopt such additional compensation arrangements as it may deem desirable,
including, without limitation, the granting of stock options and bonuses
otherwise than under the Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.

      

      22.    Definitions. As used
in the Plan, the following terms shall have the following meanings:

       

      “Affiliate”
means any corporation that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
another corporation, where “control” (including the terms “controlled by” and
“under common control with”) means the possession, direct or indirect, of the
power to cause the direction of the management and policies of the corporation,
whether through the ownership of voting securities, by contract or
otherwise.

      

      “Award”
means any award under the Plan, including any Option or Restricted
Stock.

      

      “Award Agreement” means, with respect
to each Award, the signed written agreement between the Company and the
Participant setting forth the terms and conditions of the Award.

      

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

      

      “Code” means the Internal Revenue Code
of 1986, as amended.

      

      “Committee” means a committee appointed
by the Company's Compensation Committee (said Compensation Committee itself
being first appointed by the Company's Board).

      

      “Company” means ALLIANCE RECOVERY
CORPORATION, a Delaware corporation, or any successor company.

      

      “Disability” means a disability,
whether temporary or permanent, partial or total, as determined by the
Committee.

      

      “Disinterested Person” means a director
who has not, during the period that person is a member of the Committee and for
one (1) year prior to service as a member of the Committee, been granted or
awarded equity securities pursuant to the Plan or any other plan of the Company
or any Parent, Subsidiary or Affiliate of the Company, except in accordance with
the requirements set forth in Rule 16b-3(c)(2)(I) (and any successor regulation
thereto) as promulgated by the SEC under Section 16(b) of the Exchange Act, as
such rule is amended from time to time and as interpreted by the
SEC.

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      
 

      “Exchange Act” means the Securities
Exchange Act of 1934, as amended.

      

      “Exercise Price” means the price at
which a holder of an Option may purchase the Shares issuable upon exercise of
the Option.

      

      “Fair Market Value” means, as of any
date, the value of a share of the Company’s Common Stock determined as
follows:

      

      
        	
                 
      

              	
                (a)
      if such Common Stock is then quoted on the Nasdaq market, its last
      reported sale price on the Nasdaq market or, if no such reported sale
      takes place on such date, the average of the closing bid and asked
      prices;

              

      

      

      
        	
                 
      

              	
                (b)
      if such Common Stock is publicly traded and is then listed on a national
      securities exchange, the last reported sale price or, if no such reported
      sale takes place on such date, the average of the closing bid and asked
      prices on the principal national securities exchange on which the Common
      Stock is listed or admitted to
trading;

              

      

      

      
        	
                 
      

              	
                (c)
      if such Common Stock is publicly traded but is not quoted on a Nasdaq
      market nor listed or admitted to trading on a national securities
      exchange, the average of the closing bid and asked prices on such date, as
      reported by The Wall Street Journal, for the over-the-counter market;
      or

              

      

      

      
        	
                 
      

              	
                (d)
      if none of the foregoing is applicable, by the Board of Directors of the
      Company in good faith.

              

      

      

      “Insider” means an officer or director
of the Company or any other person whose transactions in the Company’s Common
Stock are subject to Section 16 of the Exchange Act.

      

      “Option” means an award of an option to
purchase Shares pursuant to Section 5.

      

      “Parent” means any corporation (other
than the Company) in an unbroken chain of corporations ending with the Company,
if at the time of the granting of an Award under the Plan, each of such
corporations other than the Company owns stock possessing fifty percent (50%),
or more, of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

      

      “Participant” means a person who
receives an Award under the Plan.

       

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      
 

      “Plan” means this Alliance Recovery
Corporation Equity Incentive Plan, as amended from time to time.

      

      “Restricted
Stock Award” means an award of Shares pursuant to Section

      

      “SEC”
means the Securities and Exchange Commission.

      

      “Securities
Act” means the Securities Act of 1933, as amended.

      

      “Shares”
means shares of the Company’s Common Stock reserved for issuance under the Plan,
as adjusted pursuant to Sections 2 and 17, and any successor
security.

      

      “Subsidiary”
means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time of granting of the
Award, each of the corporations other than the last corporation in the unbroken
chain owns stock possessing fifty percent (50%), or more, of the total combined
voting power of all classes of stock in one of the other corporations in such
claim.

      

      “Termination”
or “Terminated” means, for purposes of the Plan with respect to a Participant,
that the Participant has ceased to provide services as an employee, director,
consultant or advisor, to the Company or a Parent, Subsidiary or Affiliate of
the Company, except in the case of sick leave, military leave, or any other
leave of absence approved by the Committee, provided, that such leave is for a
period of not more than ninety (90) days, or reinstatement upon the expiration
of such leave is guaranteed by contract or statute. The Committee shall have
sole discretion to determine whether a Participant has ceased to provide
services and the effective date on which the Participant ceased to provide
services (the “Termination Date”).

       

       

      
 

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      

      

      EXERCISE
NOTICE

      

      ALLIANCE
RECOVERY CORPORATION

      1000 N.W.
St

      Suite
1200

      Wilmington,
DE 19801

      

      Attention:
Stock Option Plan Administrator

      

      1.    Exercise of Option.
Effective as of today, ___________, ____, the undersigned ("Participant") hereby
elects to exercise Participant's option to purchase ________ shares of the
Common Stock (the "Shares") of Alliance
Recovery Corporation (the "Company") under and
pursuant to the Alliance Recovery Corporation Equity Incentive Plan (the "Plan") and the Stock
Option Agreement dated June 5, 2008 (the "Option
Agreement").

      

      2.    Delivery of Payment.
Purchaser herewith delivers to the Company the full purchase price of the
Shares, as set forth in the Option Agreement.

      

      3.    Representations of
Participant. Participant acknowledges that Participant has received, read
and understood the Plan and the Option Agreement and agrees to abide by and be
bound by their terms and conditions.

      

      4.    Rights as
Shareholder. Until the issuance of the Shares (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights
as a shareholder shall exist with respect to the Optioned Stock, notwithstanding
the exercise of the Option. The Shares shall be issued to the Participant as
soon as practicable after the Option is exercised.

      

      5.    Tax Consultation.
Participant understands that Participant may suffer adverse tax consequences as
a result of Participant's purchase or disposition of the Shares. Participant
represents that Participant has consulted with any tax consultants Participant
deems advisable in connection with the purchase or disposition of the Shares and
that Participant is not relying on the Company for any tax advice.

      

      6.           Successors and
Assigns. The Company may assign any of its rights under this Exercise
Notice to single or multiple assignees, and this Exercise Notice shall inure to
the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Exercise Notice shall be binding
upon Participant and his or her heirs, executors, administrators, successors and
assigns.

       

       

      
        
          
          

        

        
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      7.    Withholding Taxes.
There may be a regular federal income tax liability upon the exercise of this
Option. Participant will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the Fair
Market Value of the Shares on the date of exercise over the Exercise Price. If
Participant is an employee, the Company will be required to withhold from
Participant’s compensation or collect from Participant and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.

       

      8.    Governing Law. This
Exercise Notice is governed by the internal substantive laws of the state of
Delaware.

      

      9.    Entire Agreement. The
Plan and Option Agreement are incorporated herein by reference. This Exercise
Notice, the Plan, the Option Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Participant
with respect to the subject matter hereof, and may not be modified adversely to
the Participant's interest except by means of a writing signed by the Company
and Participant.

      

      Submitted
by:                                                                              Accepted
by:

       

      

      PARTICIPANT                                                                           ALLIANCE
RECOVERY CORPORATION

      

      ________________________________                            By:
________________________________

      Signature

      

      ________________________________                            Title:
_______________________________

      Print
Name

      

      

      16

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