Document:

Unassociated Document

    OMNIBUS
      AMENDMENT AND CONSENT 

    

    OMNIBUS
      AMENDMENT AND CONSENT EFFECTIVE AS OF November 30, 2006 (this “Omnibus
      Amendment and Consent”)
      by and
      among Acura Pharmaceuticals, Inc. (the “Company”),
      and
      Acura Pharmaceutical Technologies, Inc. and the following lenders (“Lenders”):
      Galen
      Partners III, L.P. (as agent for the other lenders (“Agent”)
      and as
      a lender itself), Galen Partners International, III, L.P., Galen Employee Fund
      III, L.P., Care Capital Offshore Investments II, LP, Care Capital Investments
      II, LP, Essex Woodlands Health Ventures V, L.P. (the foregoing Lenders, being
      the “VC
      Lenders”),
      Dennis
      Adams, George E. Boudreau, Michael Weisbrot, Susan Weisbrot; and the following
      persons with respect to Sections 5, 6, 7, and 8: John E. Heppe Jr. and Peter
      Steiglitz (“Additional
      Watson Holders”).

    

    Capitalized
      terms used herein and not defined herein have the meanings set forth in the
      Subordination Agreement dated as of January 31, 2006 among the Lenders, the
      Company and others (the “Subordination
      Agreement”).

    

    R
      E C I T A L S

    

    WHEREAS
      the
      Company and one or more Lenders have entered into the June 2005 Loan Agreement,
      the September 2005 Loan Agreement, the November 2005 Loan Agreement and the
      January 2006 Loan Agreement (collectively, the “Loan
      Agreements”)
      and
      such other agreements, notes and instruments executed in connection with such
      loan agreements (collectively, the “Loan
      Documents”);
      and

    

    WHEREAS,
      the
      Company and certain Lenders and the Additional Watson Holders are parties to
      the
      Watson Note (as defined in the Subordination Agreement); and

    

    WHEREAS,
      the
      loans extended pursuant to the Loan Agreements are due to mature on December
      1,
      2006 (the “Original
      Maturity Date”);
      

    

    WHEREAS,
      pursuant
      to Section 1(a) of the Omnibus Amendment dated August 16, 2006 among the parties
      hereto (the “August
      2006 Omnibus Amendment”),
      Section 5.12 was added to each Loan Agreement to grant the Lenders a the right
      to convert their Notes under certain circumstances into equity securities of
      the
      Company (the “August
      2006 Rollover Right”);

    

    WHEREAS,
      pursuant to Section 7 of the Omnibus Amendment dated October 20, 2006 among
      the
      parties hereto (the “October
      2006 Omnibus Amendment”)
      certain Lenders agreed to accept the next interest payment due under the Loan
      Agreements in the form of common stock of the Company (the “Common
      Stock Interest Payment”);
      and

    

    WHEREAS,
      the
      Company and the Lenders wish to extend the Original Maturity Date, replace
      the
      August 2006 Rollover Right with a substitute rollover right and amend the terms
      of the Common Stock Interest Payment.

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants herein contained, the parties mutually
      agree as follows:

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    1.
       Amendments:

    

    
      	 	
              (a)

            	
              The
                January 2006 Loan Agreement is amended by adding thereto Schedule
                1.3
                attached hereto and by deleting Section 1.1 in its entirety and replacing
                same with the following:

            

    

    

     

    “1.1
      TERM LOAN

     

    On
      the terms and subject to the conditions of this Agreement, each Lender severally
      agrees to make to the Company on the Closing Date a term loan (each, a
“Loan”)
      in
      a principal amount equal to such Lender’s initial Commitment. The Lenders shall
      make additional Loans commencing November 2006, as set forth in Section 1.3,
      and
      may, in their sole and absolute discretion, make additional Loans to the Company
      as provided in Section 1.3 hereof. The Company and the Lenders acknowledge
      and
      agree that no Lender is under any obligation to make any Loan in excess of
      its
      respective Commitment. No amounts paid or prepaid with respect to any Loan
      may
      be reborrowed.”

     

    ;and
      by
      amending and restating the definition of Commitment in Article XVI as
      follows;

     

    ““Commitment”
      means, with respect to each Lender, the commitment of such Lender to make such
      Loan hereunder. The initial amount of the Commitment of each of Essex, Care
      Capital and Galen is set forth opposite its signature hereto. The additional
      mandatory Commitments of the Lenders are set forth in Section 1.3. The
      Commitment of each Additional Lender and/or any additional Commitment of Essex,
      Care Capital and/or Galen will be set forth opposite its signature on the
      Joinder Agreement to which it is a party.”

     

    ;
      and by
      replacing Section 1.3 thereof with the following 

     

    “1.3 CLOSING

     

    The
      initial closing (the “Closing”)
      at
      which the Loans from Essex, Care Capital and Galen shall be disbursed to the
      Company will take place at the offices of St. John & Wayne, L.L.C., Two Penn
      Plaza East, Newark, New Jersey 07105 upon the satisfaction of the conditions
      to
      Closing set forth in this Agreement on the date hereof, or such other place,
      time and date as shall be mutually agreed to by the Company and the Lenders.
      Each Lender agrees to fund additional Loans (“Mandatory Loans”) upon the
      Company’s written request during the months and in the percentage of the monthly
      amount specified next to each Lender’s name on Schedule 1.3 attached hereto. The
      Company will provide each Lender at least ten days notice of the date of the
      Closing of a Mandatory Loan (which date shall be binding on all parties), and
      the amount of Lender’s funding Commitment (based on the Lender’s commitment
      percentage set forth on Schedule 1.3). Any amounts not borrowed by the Company
      during any month may be borrowed by the Company from the Lenders (and will
      be
      funded by the Lenders according to each Lender’s commitment percentage) in
      succeeding months until the earlier of (i) the date advanced to the Company
      under this Agreement, or (ii) March 31, 2007. The Company and the Lenders
      acknowledge and agree that additional Loans (“Non-Mandatory Loans”) may be
      funded to the Company by any one or more of Galen, Care Capital, Essex and
      any
      Additional Lender pursuant to the terms of this Agreement on one or more Closing
      Dates; provided,
      however,
      that (i) the aggregate principal amount of the Non-Mandatory Loans shall not
      exceed $1,000,000 without the prior written consent of any two (2) of Essex,
      Care Capital and Galen,(ii) no such Additional Lender may participate without
      the prior written consent of any two (2) of Essex, Care Capital and Galen,
      and
      (iii) no Lender is under any obligation to fund any Loan other than its
      respective Commitment. Upon the funding of any additional Loans (whether
      Mandatory Loans or Non-Mandatory Loans), under this Agreement, the Company
      and
      each Lender and/or Additional Lender making a Loan shall be required to execute
      a Joinder Agreement, which Joinder Agreement shall specify the Commitment of
      such Lender and/or Additional Lender. Any Additional Lender executing a Joinder
      Agreement shall be deemed a “Lender” for all purposes of this Agreement. On the
      date of a Closing (each a “Closing
      Date”),
      the Company shall deliver to each Lender at such Closing a Note, dated the
      applicable Closing Date, in the principal amount equal to such Lender’s
      Commitment or, in the event Galen, Care Capital and/or Essex shall make an
      additional Loan hereunder, the Company shall issue to such Lender an additional
      Note dated the applicable Closing Date in the principal amount equal to such
      Lender’s additional Commitment. The Company shall deliver the foregoing Notes
      against receipt by the Company from each Lender of an amount equal to the
      Commitment of such Lender, in each case by wire transfer in immediately
      available funds in U.S. dollars to an account designated by the Company.
      Notwithstanding anything to the contrary herein, no Lender shall be required
      in
      any circumstances to make Mandatory Loans (x) in an aggregate amount that
      exceeds the aggregate amount of such Lender’s committed amount set forth on
      Schedule 1.3, or (y) at any time after the occurrence and during the continuance
      of an Event of Default (including, for such purposes, after any event, fact
      or
      occurrence that, with the passage of time or giving of notice, would become
      an
      Event of Default) .”;
      and

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

       

    

    
      	 	
              (b)

            	
              Each
                of the June 2005 Loan Agreement, the September 2005 Loan Agreement,
                the
                November 2005 Loan Agreement and the January 2006 Loan Agreement
                is
                amended as follows:

            

    

    

    
      	 	
              (i)

            	
              Section
                2.1 is amended to replace “December 1, 2006” with “March 31, 2007 (or such
                later date as may be agreed to by Lenders holding not less than 66
                2/3% of
                the outstanding principal amount of the Loans)”; and
                

            

    

    

    
      	 	
              (ii)

            	
              Section
                5.12 is hereby deleted in its entirety and replaced with the
                following:

            

    

    

    5.12. ROLLOVER
      RIGHT

     

    Each
      Lender shall have the one-time right (the “Rollover
      Right”)
      on
      the terms provided below, to purchase, through the conversion of all or any
      portion of such Lender’s Notes (including principal and accrued and unpaid
      interest), securities of the Company, on the first to occur of a Third-Party
      Investor Financing, a Conversion Change of Control Transaction or the Maturity
      Date (each a “Material
      Event”)
      after the date hereof, under the terms and conditions set forth in this Section
      5.12. Any portion of such Notes which are not so converted pursuant to this
      Section 5.12 shall become immediately due and payable simultaneously with such
      Material Event. 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (a) Simultaneous
      with the completion of an equity financing pursuant to which the Company issues
      its common stock or other equity securities of the Company and, after the
      effectiveness thereof, the Company will have cumulatively received at least
      $8
      million in gross proceeds from equity financings after the date hereof
      (including all equity financings after the date hereof, including such final
      financing which causes the aggregate cumulative proceeds to exceed $8 million,
      but expressly excluding the principal and interest under the Notes for which
      a
      Lender’s Rollover Right is exercised) from unaffiliated, thirty-party investors
      (a “Third-Party Investor Financing”) other than (i) issuances of options or
      restricted stock units to employees, consultants or directors, (ii) interest
      on
      debt payable in common stock or (iii) pursuant to the conversion of warrants,
      options, restricted stock units or other convertible securities outstanding
      on
      the date hereof, each Lender may convert all or any portion (except as provided
      below) of its Notes, at the option of such Lender, under either (but not both
      or
      a combination of each) of the following: 

     

    (i)
      into the same equity securities as are issued in such Third-Party Investor
      Financing on the same terms as provided in such Third-Party Investor Financing
      (but at the average price of all equity securities sold that have combined
      to
      exceed the cumulative $8 million in proceeds), or 

     

    (ii)
      (A) for Notes issued in or prior to November 2005 (the “June to November 2005
      Bridge Notes”), convert such Notes into Common Stock at a price of $0.20 per
      share, (B) for Notes issued after November 2005 and in or prior to May 2006
      (the
“January to May 2006 Bridge Notes”), convert such Notes into Common Stock at a
      price of $0.225 per share; (C) for Notes issued after May 2006 and in or prior
      to October 2006 (the “June to October 2006 Bridge Notes”), convert such Notes
      into Common Stock at a price of $0.25 per share;
      and
(D)
      for other Notes issued or to be issued under the Loan Agreement dated January
      31, 2006 (the “Future Bridge Notes”), convert such Notes into the Common Stock
      at a conversion price equal to the lesser of (X) 80% of the average of the
      closing bid and asked prices of the Common Stock for the twenty (20) trading
      days immediately preceding the public announcement of the Third-Party Investor
      Financing, (Y) the average price of the equity securities sold that have
      combined to exceed the cumulative $8 million in proceeds, and (Z) $0.44 per
      share; provided that a Lender choosing this option must convert all (and not
      less than all) of its Notes pursuant to this option.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (b) Simultaneous
      with the completion of the first Conversion Change of Control Transaction to
      occur after the date hereof, each Lender may, at the option of such Lender
      convert all (and not less than all) of its Notes as follows, (i) for the June
      to
      November 2005 Bridge Notes, convert such Notes into Common Stock at a price
      of
      $0.20 per share, (ii) for the January to May 2006 Bridge Notes, convert such
      Notes into Common Stock at a price of $0.225 per share; (iii) for the June
      to
      October 2006 Bridge Notes, convert such Notes into Common Stock at a price
      of
      $0.25 per share;
      and
(iv)
      for the Future Bridge Notes convert such Notes into Common Stock at a price
      equal to 80% of the value per fully diluted share of the Company’s common stock
      provided in the Conversion Change of Control Transaction; provided, however,
      that if such Conversion Change of Control Transaction is a transaction of the
      type described in subsection (D) or (E) of the definition of Conversion Change
      of Control Transaction below, each Lender’s Future Bridge Notes will be
      convertible, at the option of such Lender, into Common Stock at a price equal
      to
      the lesser of (X) 80% of the average closing bid and asked prices of the Common
      Stock for the twenty (20) trading days immediately preceding the public
      announcement of such Conversion Change of Control Transaction; and (Y) $0.44
      per
      share. For purposes hereof, a Conversion Change of Control Transaction shall
      mean any
      of the following in one or a series of related transactions:(A) the acquisition
      (other than solely from the Company) by any individual, entity or group (within
      the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act)
      other than the Company, any Subsidiary, any Lender or its Affiliates or GCE
      Holdings, LLC or its Affiliates, of the beneficial ownership (within the meaning
      of Rule 13d-3 promulgated under the Securities Exchange Act) of more than
      sixty-six and 2/3 percent (66.66%) of the combined voting power of the then
      outstanding voting securities of the Company entitled to vote generally in
      the
      election of directors (the “Voting Securities”); (B) a merger, consolidation,
      share exchange, recapitalization, business combination or similar combination
      involving the Company or its capital stock (a "Business
      Combination"),
      other than a Business Combination in which more than thirty-three and 1/3
      percent (33.33%) of the combined voting power of the outstanding voting
      securities of the surviving or resulting entity immediately following the
      Business Combination is held by the persons who, immediately prior to the
      Business Combination, were the holders of the Voting Securities; (C) a sale
      or
      other transfer (other than license) of all or substantially all of the Company’s
      assets (measured by the value or earning power of the assets); (D) the license
      or similar agreement by the Company to a third party of all or substantially
      all
      rights in and to the Company’s Aversion® technology and, as a result of such
      transaction, all or substantially all of the Company’s activities consist of
      monitoring such arrangements and collecting fees and payments due thereunder;
      or
      (E) a liquidation or dissolution of the Company.

     

    (c) At
      the Maturity Date (as the same may be extended pursuant to Section 2.2 hereof)
      each
      Lender may, at the option of such Lender, convert all (and not less than all)
      of
      its Notes as follows, (i) for the June to November 2005 Bridge Notes, convert
      such Notes into Common Stock at a price of $0.20 per share, (ii) for the January
      to May 2006 Bridge Notes, convert such Notes into Common Stock at a price of
      $0.225 per share; (iii) for the June to October 2006 Bridge Notes, convert
      such
      Notes into Common Stock at a price of $0.25 per share;
      and
(iv)
      for the Future Bridge Notes convert such Notes into Common Stock at the lesser
      of (X) 80% of the average of the closing bid and asked prices of the Common
      Stock for the twenty (20) trading days immediately preceding the Maturity Date
      and (Y) $0.44 per share.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (d) The
      Company shall give each Lender written notice (a “Material
      Event Notice”)
      of
      the first Material Event to occur after the date hereof, which notice shall
      be
      provided not later than 20 days prior to the closing of said transaction (or,
      in
      the case of the Maturity Date, the Maturity Date) and describe the material
      terms of such transaction, (or, in the case of the Maturity Date, state the
      Maturity Date), the proposed closing date and the principal amount and interest
      accrued on the Lender’s outstanding Notes.

     

    (e) Each
      Lender may exercise its Rollover Right with respect to the first Material Event
      to occur after the date hereof by (i) providing written notice to the Company
      exercising such Rollover Right, and (ii) surrendering such Lender’s applicable
      Notes, in each case not later than five (5) days prior to the effectiveness
      of
      the Material Event (the “Rollover
      Right Exercise Period”).
      If the material terms of the actual Material Event differ in any material
      respect from those specified in the Material Event Notice, each Lender shall
      be
      given the opportunity change the conversion election they had made under the
      prior terms (including to elect to convert if they previously did not do
      so).

     

    (f) Upon
      a Lender’s timely exercise of the Rollover Right pursuant to Section 5.12(e)
      above, the issuance of the Company’s equity securities upon conversion of such
      Lender’s Notes in the applicable Material Event shall occur simultaneous with
      the closing of such Material Event (or, in the case of the Maturity Date, on
      the
      Maturity Date). 

     

    (g) Subject
      to the last sentence of Section 5.12(e), and provided that the Company has
      complied with the terms of this Section 5.12, the Rollover Right provided in
      this Section 5.12 shall apply solely to the first Material Event occurring
      after
      the date hereof, and shall terminate upon the earlier of (i) the expiration
      of
      the Rollover Right Exercise Period (if not exercised by such Lender pursuant
      to
      Section 5.12(e)) and (ii) the closing of the first Material Event (or, in the
      case of the Maturity Date, the Maturity Date) occurring after the date
      hereof.

     

    

    
      	 	
              (c)

            	
              Each
                of the June 2005 Notes, the September 2005 Notes, the November 2005
                Notes
                and the January 2006 Notes (collectively, the “Notes”) (and each of the
                forms of such Notes attached to the June 2005 Loan Agreement, the
                September 2005 Loan Agreement, the November 2005 Loan Agreement and
                the
                January 2006 Loan Agreement) is amended
                by:

            

    

    

    (i)
      deleting Section 1.3 of each Note in its entirety and replacing it with the
      following: 

     

    The
      Company may not prepay the principal amount of this Note, or
      any interest thereon, in whole or in part, at any time without the prior written
      consent of Holder. Any permitted prepayment of principal shall be without
      penalty or premium and shall be accompanied by a payment of all interest accrued
      and unpaid on the portion of the principal amount being prepaid. In addition,
      this Note is subject to mandatory prepayment as provided in the Loan
      Agreement.

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    (ii)
      replacing the words December 1, 2006, wherever they appear therein with “March
      31, 2007 (or such later date as may be agreed to by Lenders holding not less
      than 66 2/3% of the outstanding principal amount of the Loans)”;
      and

    

    (iii) appending
      the following additional section to such note:

    

    “References
      to Loan Agreement.
      References to the Loan Agreement in this Note shall mean references to the
      Loan
      Agreement, as amended, and as the same may be further amended, supplemented
      or
      modified from time to time.”

    

    
      	
            	(d)	
              In
                the event a Replacement Note (as hereinafter defined) is issued pursuant
                to Section 4 hereof, then in such Replacement Note the words “Secured
                Promissory Note” shall be replaced with “Amended and Restated Promissory
                Secured Note” and the following section shall be appended thereto:
                 

            

    

    

    “Amended
      and Restated Secured Promissory Note.
      This Amended and Restated Secured Promissory Note issued by the Company in
      favor
      of the Payee amends and restates in its entirety, and is issued by the Company
      in replacement of and substitution for a Secured Promissory Note of identical
      principal amount issued to Payee pursuant to the Loan Agreement(the “Original
      Note”). The Company and the Payee acknowledge and agree that upon the execution
      delivery of this Amended and Restated Secured Promissory Note, the Original
      Note
      shall be null and void and of no further legal force or effect.
“

    

    The
      form
      of such Replacement Note shall be also be attached to the applicable Loan
 Agreement
      as an acceptable form of note to be issued pursuant thereto.

    

    2. References
      to Loan Documents:
      Any
      reference to any Loan Document in any other Loan Document shall mean the Loan
      Document, as amended hereby. 

    

    3.
       Attachment
      to All Notes:
      The
      Lenders covenant to give a copy of this Omnibus Amendment and Consent to any
      purchaser of the June 2005 Notes, the September 2005 Notes, the November 2005
      Notes or the January 2006 Notes prior to the actual purchase and to attach
      a
      copy of this Omnibus Amendment and Consent to any of such notes where the
      undersigned is the named payee or holder.

    

    4. Amended
      and Restated Notes. 
      Upon
      request of the Company, each Lender agrees to deliver to the Company any of
      the
      June 2005 Notes, the September 2005 Notes, the November 2005 Notes or the
      January 2006 Notes issued to them, in exchange for an amended and restated
      Note
      (the “Replacement
      Note”)
      incorporating the amendments set forth in this Omnibus Amendment and Consent.
      

    

    5. Subordination
      Agreement.  Each
      Lender and Additional Watson Holder agrees to the provisions of this Omnibus
      Amendment and Consent, including without limitation, to the amendments to the
      June 2005, September 2005 Notes, the November 2005 Notes and the January 2006
      Notes and acknowledges that the Subordination Agreement shall remain in full
      force and effect .

     

    6.  Notes
      and Agreements Not Assigned. The
      undersigned Lenders and Additional Watson Holders acknowledge that they have
      not
      transferred, conveyed or assigned any of the Watson Note, the June 2005 Notes,
      the September 2005 Notes, the November 2005 Notes or the January 2006 Notes
      issued to them and the undersigned Lenders and Additional Watson Holders
      acknowledge that they have not assigned any rights under the Loan Documents
      or
      under the Subordination Agreement.

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    7.  Interest
      Payable to Lenders in Stock; Prepayments. Notwithstanding
      anything in the Loan Documents to the contrary (except as set forth in Section
      5.12 thereof), the Company (a) may, at the Company’s option, in full payment of
      all payments of interest on the Notes to the undersigned Lenders  (“Interest
      Due”)
      make
      payment of the Interest Due in such number of shares of Common Stock of the
      Company equal to the quotient of the Interest Due such Lender, divided by the
      average of the closing bid and asked price of the Company’s Common Stock for the
      five (5) trading days immediately preceding the due date of such Interest Due,
      as reported by the Nasdaq OTCBB, and (b) may not prepay the principal amount
      of
      any Note, or any interest thereon, in whole or in part, at any time without
      the
      prior written consent of the holder thereof. 

    

    8.
       Counterparts:
      This
      Omnibus Amendment and Consent may be executed in one or more counterparts and
      by
      different parties hereto in separate counterparts, including by facsimile,
      each
      of which when so executed and delivered shall be deemed an original, but all
      such counterparts together shall constitute but one and the same instrument.
      

    

    

    9.
       Governing
      Law:
      THIS
      OMNIBUS AMENDMENT AND CONSENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
      HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF
      THE
      STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
      LAWS.

    

    

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, each of the Parties have caused this Omnibus Amendment and
      Consent to be duly executed and delivered as of the day and year first above
      written.

    

    ACURA
      PHARMACEUTICALS, INC.

    

    By: /s/
      Peter A. Clemens  

    Name:
      Peter A. Clemens

    Title:
      Sr. Vice President and CFO

     

    
 

    ACURA
      PHARMACEUTICAL

    TECHNOLOGIES
      , INC.

     

    By: /s/
      Peter A. Clemens  

    Name:
      Peter A. Clemens

    Title:
      Sr. Vice President and CFO

    

    

    

    
      	
              LENDER
                AND AGENT:

              GALEN
                PARTNERS III, L.P.

              By:
                Claudius, L.L.C., General Partner

              610
                Fifth Avenue, 5th
                Fl.

              New
                York, New York 10019

               

               

              /s/
                Bruce Wesson 

              By:
                Bruce Wesson

              Its:
                General Partner

            	
              LENDER:

              CARE
                CAPITAL OFFSHORE INVESTMENTS II, LP

              By:
                Care Capital II, LLC, as general partner

              47
                Hulfish Street, Suite 310

              Princeton,
                NJ 08542

               

               

              By:
                 /s/
                David Ramsay  

              By:
                David R. Ramsay

              Its:
                Authorized Signatory

            
	 	 
	
              LENDER:

              GALEN
                PARTNERS INTERNATIONAL, III, L.P.

              By:
                Claudius, L.L.C., General Partner

              610
                Fifth Avenue, 5th
                Floor

              New
                York, New York 10020

               

              /s/
                Bruce Wesson 

              By:
                Bruce Wesson

              Its:
                General Partner 

               

            	
              LENDER:

              CARE
                CAPITAL INVESTMENTS II, LP

              By:
                Care Capital II, LLC, as general partner

              47
                Hulfish St., Suite 310

              Princeton,
                NJ 08542

               

              By:
                 /s/
                David Ramsay 

              Name:
                David R. Ramsay

              Title:
                Authorized Signatory

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	
              LENDER:

              GALEN
                EMPLOYEE FUND III, L.P.

              By:
                Wesson Enterprises, Inc.

              610
                Fifth Avenue, 5th
                Floor

              New
                York, New York 10020

               

               

              /s/
                Bruce F. Wesson 

              By:
                Bruce F. Wesson

              Its:
                General Partner

            	
              LENDER:

              ESSEX
                WOODLANDS HEALTH 

              VENTURES
                V, L.P.

              190
                South LaSalle Street, Suite 2800

              Chicago,
                IL 60603

               

               

              /s/
                Immanuel Thangaraj  

              By:
                Immanuel Thangaraj

              Its:
                Managing Director

            
	 	 
	
              LENDER:

              MICHAEL
                WEISBROT

              1136
                Rock Creek Road

              Gladwyne,
                Pennsylvania 19035

               

               

              /s/
                Michael Weisbrot 

            	
              LENDER:

              SUSAN
                WEISBROT

              1136
                Rock Creek Road

              Gladwyne,
                Pennsylvania 19035

               

               

              /s/
                Susan Weisbrot  

               

            
	 	 
	
              LENDER:

              DENNIS
                ADAMS

              120
                Kynlyn Road

              Radnor,
                Pennsylvania 19312

               

              /s/
                Dennis Adams  

               

            	
              LENDER:

              GEORGE
                E. BOUDREAU

              222
                Elbow Lane

              Haverford,
                PA 19041

               

              /s/
                George Boudreau 

            
	 	 
	
              ADDITIONAL
                WATSON HOLDER:

              PETER
                STIEGLITZ

              RJ
                Palmer LLC

              156
                West 56th Street, 5th Floor

              New
                York, New York 10019

               

              /s/
                Peter Stieglitz 

               

            	
              ADDITIONAL
                WATSON HOLDER:

              JOHN
                E. HEPPE, JR. 

              237
                W. Montgomery Avenue

              Haverford,
                Pennsylvania 19041

               

               

              /s/
                John Heppe   

               

            

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
      1.3

    Funding
      Schedule of $ 2,000,000 in Bridge Loans

    

    
      	
              Lender
                Name

            	
              Month
                Commitment to be Funded

            	
              Commitment
                Amount

            	
              Percentage
                of Commitment

            
	
              GALEN
                PARTNERS III, L.P.

            	
              November
                2006

            	
              $203,014.61

            	
              30.452191%

            
	
              GALEN
                PARTNERS INTERNATIONAL, III, L.P.

            	
              $18,376.31

            	
              2.756447%

            
	
              GALEN
                EMPLOYEE FUND III, L.P.

            	
              $
                831.31

            	
              0.124696%

            
	
              ESSEX
                WOODLANDS HEALTH VENTURES V, L.P.

            	
              $222,222.20

            	
              33.33333%

            
	
              CARE
                CAPITAL INVESTMENTS II, LP

            	
              $207,955.53

            	
              31.19333%

            
	
              CARE
                CAPITAL OFFSHORE INVESTMENTS II, LP

            	
              $14,266.67

            	
              2.14000%

            
	
              TOTAL
                FOR NOVEMBER 2006

            	
              $666,666.67

            	 
	
              GALEN
                PARTNERS III, L.P.

            	
              December
                2006

            	
              $203,014.61

            	
              30.452191%

            
	
              GALEN
                PARTNERS INTERNATIONAL, III, L.P.

            	
              $18,376.31

            	
              2.756447%

            
	
              GALEN
                EMPLOYEE FUND III, L.P.

            	
              $
                831.31

            	
              0.124696%

            
	
              ESSEX
                WOODLANDS HEALTH VENTURES V, L.P.

            	
              $222,222.20

            	
              33.33333%

            
	
              CARE
                CAPITAL INVESTMENTS II, LP

            	
              $207,955.53

            	
              31.19333%

            
	
              CARE
                CAPITAL OFFSHORE INVESTMENTS II, LP

            	
              $14,266.67

            	
              2.14000%

            
	
              TOTAL
                FOR DECEMBER 2006

            	
              $666,666.67

            	 
	
              GALEN
                PARTNERS III, L.P.

            	
              January
                2007

            	
              $203,014.61

            	
              30.452191%

            
	
              GALEN
                PARTNERS INTERNATIONAL, III, L.P.

            	
              $18,376.31

            	
              2.756447%

            
	
              GALEN
                EMPLOYEE FUND III, L.P.

            	
              $
                831.31

            	
              0.124696%

            
	
              ESSEX
                WOODLANDS HEALTH VENTURES V, L.P.

            	
              $222,222.20

            	
              33.33333%

            
	
              CARE
                CAPITAL INVESTMENTS II, LP

            	
              $207,955.53

            	
              31.19333%

            
	
              CARE
                CAPITAL OFFSHORE INVESTMENTS II, LP

            	
              $14,266.67

            	
              2.14000%

            
	
              TOTAL
                FOR JANUARY 2007

            	
              $666,666.67EXHIBIT
        10.1

      2006
        Equity Incentive Plan

    

    

    

    ORION
      ETHANOL, INC.

    

    2006
      EQUITY INCENTIVE PLAN

    

    

    
      	
              1.

            	
              Purposes
                of the Plan.
                The purposes of this Plan are: to attract and retain the best available
                personnel for positions of substantial responsibility, to provide
                additional incentive to Employees, Directors and Consultants, and
                to
                promote the success of the Company's business. The Plan permits the
                grant
                of Incentive Stock Options, Nonstatutory Stock Options, Restricted
                Stock,
                Restricted Stock Units, Stock Appreciation Rights, Performance Units
                and
                Performance Shares. The
                Administrator may only award or grant those Awards that either comply
                with
                the applicable requirements of Code Section 409A, or do not result
                in the
                deferral of compensation within the meaning of Code Section
                409A.

            

    

    

    
      	2.	
              Definitions.
                As used herein, the following definitions will
                apply:

            

    

    

    “Administrator”
means
      the Board or any of its Committees as will be administering the Plan, in
      accordance with Section 4.

    

    “Applicable
      Laws”
means
      the requirements relating to the administration of equity-based awards under
      U.S. state corporate laws, U.S. federal and state securities laws, the Code,
      any
      stock exchange or quotation system on which the Common Stock is listed or quoted
      and the applicable laws of any foreign country or jurisdiction where Awards
      are,
      or will be, granted under the Plan.

    

    “Award”
means,
      individually or collectively, a grant under the Plan of Options, SARs,
      Restricted Stock, Restricted Stock Units, Performance Units or Performance
      Shares.

    

    “Award
      Agreement”
means
      the written or electronic agreement setting forth the terms and provisions
      applicable to each Award granted under the Plan. The Award Agreement is subject
      to the terms and conditions of the Plan.

    

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

    

    “Change
      in Control”
means
      the occurrence of any of the following events:

    

    (i) Any
      “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
      becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act),
      directly or indirectly, of securities of the Company representing fifty percent
      (50%) or more of the total voting power represented by the Company's then
      outstanding voting securities; provided however, that for purposes of this
      subsection (i) any acquisition of securities directly from the Company shall
      not
      constitute a Change in Control; or

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

      
        
          EXHIBIT
            10.1

          2006
            Equity Incentive Plan

           

        

      

    

    (ii) The
      consummation of the sale or disposition by the Company of all or substantially
      all of the Company's assets;

    

    (iii) A
      change
      in the composition of the Board occurring within a two-year period, as a result
      of which fewer than a majority of the directors are Incumbent Directors.
“Incumbent Directors” means directors who either (A) are Directors as of the
      effective date of the Plan, or (B) are elected, or nominated for election,
      to
      the Board with the affirmative votes of at least a majority of the Incumbent
      Directors at the time of such election or nomination (but will not include
      an
      individual whose election or nomination is in connection with an actual or
      threatened proxy contest relating to the election of directors to the Company);
      or

    

    (iv) The
      consummation of a merger or consolidation of the Company with any other
      corporation, other than a merger or consolidation which would result in the
      voting securities of the Company outstanding immediately prior thereto
      continuing to represent (either by remaining outstanding or by being converted
      into voting securities of the surviving entity or its parent) at least fifty
      percent (50%) of the total voting power represented by the voting securities
      of
      the Company or such surviving entity or its parent outstanding immediately
      after
      such merger or consolidation.

    

    “Code”
means
      the Internal Revenue Code of 1986, as amended. Any reference to a section of
      the
      Code herein will be a reference to any successor or amended section of the
      Code.

    

    “Committee”
means
      a
      committee of Directors or of other individuals satisfying Applicable Laws
      appointed by the Board in accordance with Section 4 hereof.

    

    “Common
      Stock”
means
      the common stock of the Company.

    

    “Company”
means
      Orion Ethanol, Inc., a Nevada corporation, or any successor
      thereto.

    

    “Consultant”
means
      any person, including an advisor, engaged by the Company or a Parent or
      Subsidiary to render services to such entity.

    

    “Director”
means
      a
      member of the Board.

    

    “Disability”
means
      total and permanent disability as defined in Section 22(e)(3) of the Code,
      provided that in the case of Awards other than ISOs, the Administrator in its
      discretion may determine whether a permanent and total disability exists in
      accordance with uniform and non-discriminatory standards adopted by the
      Administrator from time to time.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

      
        
           

          EXHIBIT
            10.1

          2006
            Equity Incentive Plan

           

        

      

    

    “Employee”
means
      any person, including Officers and Directors, employed by the Company or any
      Parent or Subsidiary of the Company. Neither service as a Director nor payment
      of a director's fee by the Company will be sufficient to constitute "employment"
      by the Company.

    

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

    

    “Fair
      Market Value”
means,
      as of any date, the value of Common Stock determined as follows:

    

    (i) If
      the
      Common Stock is listed on any established stock exchange or a national market
      system, including without limitation the Nasdaq National Market or the Nasdaq
      SmallCap Market of the Nasdaq Stock Market, its Fair Market Value will be the
      closing sales price for such stock (or the closing bid, if no sales were
      reported) as quoted on such exchange or system on the day of determination,
      as
      reported in The Wall Street Journal or such other source as the Administrator
      deems reliable;

    

    (ii) If
      the
      Common Stock is regularly quoted by a recognized securities dealer but selling
      prices are not reported, the Fair Market Value of a Share will be the mean
      between the high bid and low asked prices for the Common Stock on the day of
      determination, as reported in The Wall Street Journal or such other source
      as
      the Administrator deems reliable; or

    

    (iii) In
      the
      absence of an established market for the Common Stock, the Fair Market Value
      will be determined in good faith by the Administrator.

    

    “Fiscal
      Year”
means
      the fiscal year of the Company.

    

    “Grant
      Date”
means,
      for all purposes, the date on which the Administrator makes the determination
      granting such Award, or such other later date as is determined by the
      Administrator. Notice of the determination will be provided to each Participant
      within a reasonable time after the date of such grant.

    

    “ISO”
means
      an Option that by its terms qualifies and is otherwise intended to qualify
      as an
      incentive stock option within the meaning of Section 422 of the Code and the
      regulations promulgated thereunder.

    

    “NSO”
means
      an Option that by its terms does not qualify or is not intended to qualify
      as an
      ISO.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

      
        
           

          EXHIBIT
            10.1

          2006
            Equity Incentive Plan

           

        

      

    

    “Officer”
means
      a
      person who is an officer of the Company within the meaning of Section 16 of
      the
      Exchange Act and the rules and regulations promulgated thereunder.

    

    “Option”
means
      a
      stock option granted pursuant to the Plan.

    

    “Optioned
      Stock”
means
      the Common Stock subject to an Award.

    

    “Parent”
means
      a
“parent corporation,” whether now or hereafter existing, as defined in Section
      424(e) of the Code.

    

    “Participant”
means
      the holder of an outstanding Award.

    

    “Performance
      Share”
means
      an Award denominated in Shares which may be earned in whole or in part upon
      attainment of performance goals or other vesting criteria as the Administrator
      may determine pursuant to Section 10.

    

    “Performance
      Unit”
means
      an Award which may be earned in whole or in part upon attainment of performance
      goals or other vesting criteria as the Administrator may determine and which
      may
      be settled for cash, Shares or other securities or a combination of the
      foregoing pursuant to Section 10.

    

    “Period
      of Restriction”
means
      the period during which the transfer of Shares of Restricted Stock are subject
      to restrictions and therefore, the Shares are subject to a substantial risk
      of
      forfeiture. Such restrictions may be based on the passage of time, the
      achievement of target levels of performance, or the occurrence of other events
      as determined by the Administrator.

    

    “Plan”
means
      this 2006 Equity Incentive Plan.

    

    “Restricted
      Stock”
means
      Shares issued pursuant to a Restricted Stock award under Section 7.

    

    “Restricted
      Stock Unit”
means
      a
      bookkeeping entry representing an amount equal to the Fair Market Value of
      one
      Share, granted pursuant to Section 8. Each Restricted Stock Unit represents
      an
      unfunded and unsecured obligation of the Company.

    

    “Rule
      16b-3”
means
      Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect
      when
      discretion is being exercised with respect to the Plan.

    

    “Section
      16(b)”
means
      Section 16(b) of the Exchange Act.

    

    “Service
      Provider”
means
      an Employee, Director or Consultant.

    

    “Share”
means
      a
      share of the Common Stock, as adjusted in accordance with Section
      13.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

      
        
           

          EXHIBIT
            10.1

          2006
            Equity Incentive Plan

           

        

      

    

    “Stock
      Appreciation Right”
or
      “SAR” means an Award, granted alone or in connection with an Option, that
      pursuant to Section 9 is designated as a Stock Appreciation Right.

    

    “Subsidiary”
means
      a
      "subsidiary corporation", whether now or hereafter existing, as defined in
      Section 424(f) of the Code.

    

    “Ten
      Percent Owner”
means
      any Service Provider who is, on the grant date of an ISO, the owner of Shares
      (determined with application of ownership attribution rules of Code Section
      424(d)) possessing more than 10% of the total combined voting power of all
      classes of stock of the Company or any of its Subsidiaries.

    

    
      	3.	
              Stock
                Subject to the Plan.

            

    

    

    
      	 	
              (a)

            	
              Stock
                Subject to the Plan.
                Subject to the provisions of Section 13, the maximum aggregate number
                of
                Shares that may be issued under the Plan under the Plan is fifteen
                million
                (15,000,000) Shares. The Shares may be authorized, but unissued,
                or
                reacquired Common Stock.

            

    

    

    
      	 	
              (b)

            	
              Lapsed
                Awards.
                If an Award expires or becomes unexercisable without having been
                exercised
                in full or, with respect to Restricted Stock, Restricted Stock Units,
                Performance Shares or Performance Units, is forfeited in whole or
                in part
                to the Company, the unpurchased Shares (or for Awards other than
                Options
                and SARs, the forfeited or unissued Shares) which were subject to
                the
                Award will become available for future grant or sale under the Plan
                (unless the Plan has terminated). With respect to SARs, only Shares
                actually issued pursuant to an SAR will cease to be available under
                the
                Plan; all remaining Shares subject to the SARs will remain available
                for
                future grant or sale under the Plan (unless the Plan has terminated).
                Shares that have actually been issued under the Plan under any Award
                will
                not be returned to the Plan and will not become available for future
                distribution under the Plan; provided, however, that if Shares issued
                pursuant to Awards of Restricted Stock, Restricted Stock Units,
                Performance Shares or Performance Units are forfeited to the Company,
                such
                Shares will become available for future grant under the Plan. Shares
                withheld by the Company to pay the exercise price of an Award or
                used to
                satisfy tax withholding obligations with respect to an Award will
                become
                available for future grant or sale under the Plan. To the extent
                an Award
                under the Plan is paid out in cash rather than Shares, such cash
                payment
                will not result in reducing the number of Shares available for issuance
                under the Plan. 

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      
         

        EXHIBIT
          10.1

        2006
          Equity Incentive Plan

         

      

    

    
      	 	
              (c)

            	
              Limitations

            

    

     

    (i) Subject
      to the provisions of Section 13, not more than an aggregate of 15,000,000 Shares
      shall be available for issuance pursuant to grants of Restricted Stock under
      the
      Plan.

    

    (ii) Subject
      to the provisions of Section 13, not more than 2,000,000 Shares (or for Awards
      denominated in cash, the Fair Market Value of 2,000,000 Shares on the Grant
      Date), may be made subject to Awards under the Plan to any individual
      Participant in the aggregate in any one fiscal year of the Company, such
      limitation to be applied in a manner consistent with the requirements of, and
      only to the extent required for compliance with, the exclusion from the
      limitation on deductibility of compensation under Code Section
      162(m).

    

    (iii) Subject
      to the provisions of Section 13, to the extent consistent with Section 424
      of
      the Code, not more than an aggregate of 5,000,000 Shares may be issued under
      ISOs.

    

    
      	 	
              (d)

            	
              Share
                Reserve.
                The Company, during the term of this Plan, will at all times reserve
                and
                keep available such number of Shares as will be sufficient to satisfy
                the
                requirements of the Plan.

            

    

    

    
      	4.	
              Administration
                of the Plan.

            

    

    

    
      	 	
              (a)

            	
              Procedure.
                The Plan shall be administered by the Board or a committee or committees
                (including subcommittees) appointed by, and consisting of two or
                more
                members of, the Board. If
                and so long as the Common Stock is registered under Section 12(b)
                or 12(g)
                of the Exchange Act, the Board shall consider in selecting the Plan
                Administrator and the membership of any committee acting as Plan
                Administrator the provisions regarding (a) “outside directors” as
                contemplated by Section 162(m) of the Code; (b) “nonemployee directors” as
                contemplated by Rule 16b-3 under the Exchange Act; and (c) “independent
                directors” as contemplated by the listing requirements for any stock
                exchange on which Shares are listed. The
                Board may delegate the responsibility for administering the Plan
                with
                respect to designated classes of eligible Participants to different
                committees consisting of two or more members of the Board, subject
                to such
                limitations as the Board or the Plan Administrator deems appropriate.
                Committee members shall serve for such term as the Board may determine,
                subject to removal by the Board at any time. To the extent consistent
                with
                Applicable Laws, the Board may authorize one or more senior executive
                officers of the Company to grant Awards to designated classes of
                eligible
                employees within the limits prescribed by the
                Board.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      
         

        EXHIBIT
          10.1

        2006
          Equity Incentive Plan

      

    

     

    
      	 	
              (b)

            	
              Powers
                of the Administrator.
                Subject to the provisions of the Plan, and in the case of a Committee,
                subject to the specific duties delegated by the Board to such Committee,
                the Administrator will have the authority, in its
                discretion:

            

    

    

    (i) to
      determine the Fair Market Value;

    

    (ii) to
      select
      the Service Providers to whom Awards may be granted hereunder;

    

    
      
        (iii)
          to
          determine the number of Shares to be covered by each Award granted hereunder;
          

      

    

     

    (iv) to
      approve forms of agreement for use under the Plan;

    

    (v) to
      determine the terms and conditions, not inconsistent with the terms of the
      Plan,
      of any Award granted hereunder. Such terms and conditions include, but are
      not
      limited to, the exercise price, the time or times when Awards may be exercised
      (which may be based on performance criteria), any vesting acceleration or waiver
      of forfeiture restrictions, and any restriction or limitation regarding any
      Award or the Shares relating thereto, based in each case on such factors as
      the
      Administrator will determine; 

    

    (vi) to
      construe and interpret the terms of the Plan and Awards granted pursuant to
      the
      Plan, including the right to construe disputed or doubtful Plan and Award
      provisions; 

    

    (vii) to
      prescribe, amend and rescind rules and regulations relating to the Plan;

    

    (viii) to
      modify
      or amend each Award (subject to Section 17(c)), including the discretionary
      authority to extend the post-termination exercisability period of Awards, to
      the
      extent that such period can be extended without causing an award to become
      subject to Code Section 409A;

    

    (ix) to
      allow
      Participants to satisfy withholding tax obligations in such manner as prescribed
      in Section 14;

    

    (x) to
      authorize any person to execute on behalf of the Company any instrument required
      to effect the grant of an Award previously granted by the Administrator;
      and

    

    (xi) to
      make
      all other determinations deemed necessary or advisable for administering the
      Plan.

    

    
      	
            	(c)	
              Effect
                of Administrator's Decision.
                The Administrator's decisions, determinations and interpretations
                will be
                final and binding on all Participants and any other holders of Awards.
                Any
                decision or action taken or to be taken by the Administrator, arising
                out
                of or in connection with the construction, administration, interpretation
                and effect of the Plan and of its rules and regulations, shall, to
                the
                maximum extent permitted by applicable law, be within its absolute
                discretion (except as otherwise specifically provided herein) and
                shall be
                final, binding and conclusive upon the Company, all Participants
                and any
                person claiming under or through any
                Participant.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      
         

        EXHIBIT
          10.1

        2006
          Equity Incentive Plan

      

    

     

    
      	
              5.

            	
              Eligibility.
                NSOs, Restricted Stock, Restricted Stock Units, SARs, Performance
                Units
                and Performance Shares may be granted to Service Providers. ISOs
                may be
                granted only to Employees.

            

    

    

    
      	6.	
              Stock
                Options.

            

    

    

    (a) Grants.
      Subject
      to the terms and provisions of the Plan, Options may be granted to Service
      Providers at any time as determined by the Administrator in its sole discretion.
      For purposes of the foregoing sentence, Service Providers shall include
      prospective employees or consultants to whom options are granted in connection
      with written offers of employment or engagement of services, respectively,
      with
      the Company; provided that no option granted to a prospective employee or
      consultant may be exercised prior to the commencement of employment or services
      with the Company. The Administrator may grant ISOs, NSOs or any combination
      of
      the two.

    

    (b) Limitations.
      Each
      Option will be designated in the Award Agreement as either an ISO or an NSO.
      Notwithstanding such designation, to the extent that the aggregate Fair Market
      Value of the Shares with respect to which ISOs are exercisable for the first
      time by the Participant during any calendar year (under all plans of the Company
      and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000),
      Options will be treated as NSOs. For purposes of this Section 6(a), ISOs will
      be
      taken into account in the order in which they were granted. The Fair Market
      Value of the Shares will be determined as of the time the Option with respect
      to
      such Shares is granted.

    

    (c) Exercise
      Price.
      The per
      Share exercise price for the Shares to be issued pursuant to exercise of an
      Option will be no less than the Fair Market Value per Share on the Grant Date,
      except that in the case of an ISO granted to a Ten Percent Owner, the per Share
      exercise price will be no less than one hundred ten percent (110%) of the Fair
      Market Value per Share on the Grant Date.

    

    (d) Term
      of Options.
      The
      term of each Option will be stated in the Award Agreement. Unless terminated
      sooner in accordance with the remaining provisions of this Section 6, each
      Option shall expire either ten (10) years after the Grant Date, or after a
      shorter term as may be fixed by the Board. In the case of an ISO granted to
      a
      Ten Percent Owner, the maximum term of the ISO will be five (5) years from
      the
      Grant Date or such shorter term as may be provided in the Award
      Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

      
        
           

          EXHIBIT
            10.1

          2006
            Equity Incentive Plan

           

        

      

    

    (e) Exercise
      Date.
      Each
      Award Agreement shall specify how and when shares covered by a Stock Option
      may
      be purchased. The Award Agreement may specify waiting periods, the dates on
      which Options become exercisable or “vested” and, subject to the termination
      provisions of this section, exercise periods. The Administrator may accelerate
      the exercisability of any Option or portion thereof. 

     

    (f) Exercise
      of Option.
      Any
      Option granted hereunder will be exercisable according to the terms of the
      Plan
      and at such times and under such conditions as determined by the Administrator
      and set forth in the Award Agreement. An Option may not be exercised for a
      fraction of a Share. An Option will be deemed exercised when the Company
      receives: (i) notice of exercise (in such form as the Administrator specify
      from
      time to time) from the person entitled to exercise the Option, and (ii) full
      payment for the Shares with respect to which the Option is exercised (together
      with an applicable withholding taxes). Full payment may consist of any
      consideration and method of payment authorized by the Administrator and
      permitted by the Award Agreement and the Plan (together with an applicable
      withholding taxes). Shares issued upon exercise of an Option will be issued
      in
      the name of the Participant or, if requested by the Participant, in the name
      of
      the Participant and his or her spouse. Until the Shares are issued (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 stockholder will exist with respect to the Optioned Stock,
      notwithstanding the exercise of the Option. The Company will issue (or cause
      to
      be issued) such Shares promptly after the Option is exercised. No adjustment
      will be made for a dividend or other right for which the record date is prior
      to
      the date the Shares are issued, except as provided in Section 13.

    

    (g) Form
      of Consideration.
      The
      Administrator will determine the acceptable form of consideration for exercising
      an Option, including the method of payment. In the case of an ISO, the
      Administrator will determine the acceptable form of consideration at the time
      of
      grant. Such consideration may consist entirely of: 

     

    (i) cash;

    

    (ii) check;
      

    

    (iii) to
      the
      extent not prohibited by Section 402 of the Sarbanes-Oxley Act of 2002, a
      promissory note; 

    

    (iv) other
      Shares, provided Shares have a Fair Market Value on the date of surrender equal
      to the aggregate exercise price of the Shares as to which said Option will
      be
      exercised; 

    

    (v) to
      the
      extent not prohibited by Section 402 of the Sarbanes-Oxley Act of 2002,
      consideration received by the Company under a cashless exercise program;

    

    (vi) any
      combination of the foregoing methods of payment; or 

    

    (vii) such
      other consideration and method of payment for the issuance of Shares to the
      extent permitted by Applicable Laws.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

      
        
           

          EXHIBIT
            10.1

          2006
            Equity Incentive Plan

        

      

    

     

    
      	
            	(h)	
              Termination
                of Options.
                An Option may terminate prior to the end of the term specified in
                an Award
                Agreement as follows:

            

    

     

    (i) Termination
      of Relationship as a Service Provider.
      If a
      Participant ceases to be a Service Provider, other than upon the Participant's
      death or Disability, the Participant may exercise his or her Option within
      such
      period of time as is specified in the Award Agreement to the extent that the
      Option is vested on the date of termination (but in no event later than the
      expiration of the term of such Option as set forth in the Award Agreement).
      In
      the absence of a specified time in the Award Agreement, the Option will remain
      exercisable for three (3) months following the Participant's termination. Unless
      otherwise provided by the Administrator, if on the date of termination the
      Participant is not vested as to his or her entire Option, the Shares covered
      by
      the unvested portion of the Option will be forfeited and revert to the Plan.
      If
      after termination the Participant does not exercise his or her Option within
      the
      time specified by the Administrator, the Option will terminate, and the Shares
      covered by such Option will be forfeited and revert to the Plan.

    

    (ii) Disability
      of Participant.
      If a
      Participant ceases to be a Service Provider as a result of the Participant's
      Disability, the Participant may exercise his or her Option within such period
      of
      time as is specified in the Award Agreement to the extent the Option is vested
      on the date of termination (but in no event later than the expiration of the
      term of such Option as set forth in the Award Agreement). In the absence of
      a
      specified time in the Award Agreement, the Option will remain exercisable for
      twelve (12) months following the Participant's termination. Unless otherwise
      provided by the Administrator, if on the date of termination the Participant
      is
      not vested as to his or her entire Option, the Shares covered by the unvested
      portion of the Option will be forfeited and revert to the Plan. If after
      termination the Participant does not exercise his or her Option within the
      time
      specified herein, the Option will terminate, and the Shares covered by such
      Option will be forfeited and revert to the Plan.

    

    (iii) Death
      of Participant.
      If a
      Participant dies while a Service Provider, the Option may be exercised following
      the Participant's death within such period of time as is specified in the Award
      Agreement to the extent that the Option is vested on the date of death (but
      in
      no event may the option be exercised later than the expiration of the term
      of
      such Option as set forth in the Award Agreement), by the Participant's
      designated beneficiary, provided such beneficiary has been designated prior
      to
      Participant's death in a form acceptable to the Administrator. If no such
      beneficiary has been designated by the Participant, then such Option may be
      exercised by the personal representative of the Participant's estate or by
      the
      person(s) to whom the Option is transferred pursuant to the Participant's will
      or in accordance with the laws of descent and distribution. In the absence
      of a
      specified time in the Award Agreement, the Option will remain exercisable for
      twelve (12) months following Participant's death. Unless otherwise provided
      by
      the Administrator, if at the time of death Participant is not vested as to
      his
      or her entire Option, the Shares covered by the unvested portion of the Option
      will be forfeited and revert to the Plan. If the Option is not so exercised
      within the time specified herein, the Option will terminate, and the Shares
      covered by such Option will be forfeited and revert to the Plan.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

      
         

        EXHIBIT
          10.1

        2006
          Equity Incentive Plan

      

    

     

    
      	7.	
              Restricted
                Stock.

            

    

    

    
      
        (a)
          Grant.
          Subject
          to the terms and provisions of the Plan, the Administrator, at any time
          and from
          time to time, may grant Shares of Restricted Stock to Service Providers
          in such
          amounts as the Administrator, in its sole discretion, will
          determine.

      

    

    

    
      
        (b)
          Restricted
          Stock Agreement.
          Each
          Award of Restricted Stock will be evidenced by an Award Agreement that
          will
          specify the Period of Restriction, the number of Shares granted, and such
          other
          terms and conditions as the Administrator, in its sole discretion, will
          determine. Unless the Administrator determines otherwise, the Company as
          escrow
          agent will hold Shares of Restricted Stock until the restrictions on such
          Shares
          have lapsed.

      

    

    

    
      (c)
        Transferability.
        Except
        as provided in this Section, Shares of Restricted Stock may not be sold,
        transferred, pledged, assigned, or otherwise alienated or hypothecated until
        the
        end of the applicable Period of Restriction.

    

    

    
      (d)
        Period
        of Restriction.
        The
        Administrator, in its sole discretion, may impose such conditions on the
        vesting
        of Shares of Restricted Stock as it may deem advisable or appropriate, including
        but not limited to, achievement of Company-wide, business unit, or individual
        goals (including, but not limited to, continued employment), or any other
        basis
        determined by the Administrator in its discretion. All restrictions imposed
        on
        Restricted Stock shall lapse and the Period of Restriction shall end upon
        the
        satisfaction of vesting conditions imposed by the Administrator. The
        Administrator may, in its discretion, also provide for such complete or partial
        exceptions to an employment restriction as it deems equitable.

    

    

    
      (e)
        Removal
        of Restrictions.
        Except
        as otherwise provided in this Section, Shares of Restricted Stock covered
        by
        each Restricted Stock grant made under the Plan will be released from escrow
        as
        soon as practicable after the last day of the Period of Restriction or at
        such
        other time as the Administrator may determine. The Administrator, in its
        discretion, may accelerate the time at which any restrictions will lapse
        or be
        removed.

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

      
         

        EXHIBIT
          10.1

        2006
          Equity Incentive Plan

         

      

    

    (f) Voting
      Rights.
      During
      the Period of Restriction, Service Providers holding Shares of Restricted Stock
      granted hereunder may exercise full voting rights with respect to those Shares,
      unless the Administrator determines otherwise.

    

    (g) Dividends
      and Other Distributions.
      During
      the Period of Restriction, Service Providers holding Shares of Restricted Stock
      will be entitled to receive all dividends and other distributions paid with
      respect to such Shares, unless the Administrator determines otherwise. If any
      such dividends or distributions are paid in Shares, the Shares will be subject
      to the same restrictions on transferability and forfeitability as the Shares
      of
      Restricted Stock with respect to which they were paid.

    

    (h) Return
      of Restricted Stock to Company.
      On the
      date set forth in the Award Agreement, the Restricted Stock for which
      restrictions have not lapsed will be forfeited and revert to the Company and
      again will become available for grant under the Plan.

    

    
      	8.	
              Restricted
                Stock Units.

            

    

    

    (a) Grant.
      Subject
      to the terms and provisions of the Plan, the Administrator, at any time and
      from
      time to time, may grant Restricted Stock Units to Service Providers in such
      amounts as the Administrator, in its sole discretion, will determine.

    

    (b) Vesting
      Criteria and Other Terms.
      The
      Administrator shall set vesting criteria in its discretion, which, depending
      on
      the extent to which the criteria are met, will determine the number of
      Restricted Stock Units that will be paid out to the Participant. The
      Administrator may set vesting criteria based upon the achievement of
      Company-wide, business unit, or individual goals (including, but not limited
      to,
      continued employment), or any other basis determined by the Administrator in
      its
      discretion. The Administrator will determine the other terms, conditions, and
      restrictions related to the grant, including the number of Restricted Stock
      Units and the form of payout, which, subject to Section 8(d), may be left to
      the
      discretion of the Administrator.

    

    (c) Earning
      Restricted Stock Units.
      Upon
      satisfaction of the applicable vesting conditions, the Participant shall be
      entitled to receive a payout at such time as the Administrator determines.
      At
      any time after the grant of Restricted Stock Units, the Administrator, in its
      sole discretion, may reduce or waive any vesting criteria that must be met
      to
      receive a payout.

    

    (d) Form
      and Timing of Payment.
      Payment
      of earned Restricted Stock Units shall be made as soon as practicable after
      the
      date(s) determined by the Administrator and set forth in the Award Agreement.
      The Administrator, in its sole discretion, may pay earned Restricted Stock
      Units
      in cash, Shares, or a combination thereof. Restricted Stock Units that are
      fully
      paid in cash will not reduce the number of Shares available for issuance under
      the Plan.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

      
         

        EXHIBIT
          10.1

        2006
          Equity Incentive Plan

         

      

    

    (e) Cancellation.
      On the
      date set forth in the Award Agreement, all unearned Restricted Stock Units
      shall
      be forfeited to the Company. 

    

    
      	9.	
              Stock
                Appreciation Rights.

            

    

    

    (a) Grant
      of SARs.
      Subject
      to the terms and conditions of the Plan, SARs may be granted to Service
      Providers at any time and from time to time as will be determined by the
      Administrator, in its sole discretion.

    

    (b) Number
      of Shares.
      The
      Administrator will have complete discretion to determine the number of SARs
      granted to any Service Provider.

    

    (c) Exercise
      Price and Other Terms.
      The per
      Share exercise price for the exercise of an SAR will be no less than the Fair
      Market Value per Share on the Grant Date. The Administrator, subject to the
      provisions of the Plan, will have complete discretion to determine the other
      terms and conditions of SARs granted under the Plan.

    

    (d) Award
      Agreement.
      Each
      SAR grant will be evidenced by an Award Agreement that will specify the exercise
      price, the term of the SAR, the conditions of exercise, and such other terms
      and
      conditions as the Administrator, in its sole discretion, will
      determine.

    

    (e) Expiration
      of SARs.
      An SAR
      granted under the Plan will expire upon the date determined by the
      Administrator, in its sole discretion, and set forth in the Award Agreement.
      

    

    (f) Payment
      of SAR Amount.
      Upon
      exercise of an SAR, a Participant will be entitled to receive payment from
      the
      Company in an amount determined by multiplying:

    

    (i) The
      difference between the Fair Market Value of a Share on the date of exercise
      over
      the exercise price; times 

    

    (ii) The
      number of Shares with respect to which the SAR is exercised.

    

    (g) Form
      of Payment.
      At the
      discretion of the Administrator, the payment upon SAR exercise may be in cash,
      in Shares of equivalent value, or in some combination thereof.

    

    
      	10.	
              Performance
                Units and Performance Shares.

            

    

    

    (a) Grant
      of Performance Units and Performance Shares.
      Performance Units or Performance Shares may be granted to Service Providers
      at
      any time and from time to time, as will be determined by the Administrator,
      in
      its sole discretion. The Administrator will have complete discretion in
      determining the number of Performance Units and Performance Shares granted
      to
      each Participant. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

      
         

        EXHIBIT
          10.1

        2006
          Equity Incentive Plan

         

      

    

    (b) Value
      of Performance Units and Shares.
      Each
      Performance Unit will have an initial value that is established by the
      Administrator on or before the Grant Date. Each Performance Share will have
      an
      initial value equal to the Fair Market Value of a Share on the Grant
      Date.

    

    (c) Performance
      Objectives and Other Terms.
      The
      Administrator will set performance objectives or other vesting provisions
      (including, without limitation, continued status as a Service Provider) in
      its
      discretion which, depending on the extent to which they are met, will determine
      the number or value of Performance Units or Performance Shares that will be
      paid
      out to the Service Providers. The time period during which the performance
      objectives or other vesting provisions must be met will be called the
“Performance Period.” Each Award of Performance Units or Performance Shares will
      be evidenced by an Award Agreement that will specify the Performance Period,
      and
      such other terms and conditions as the Administrator, in its sole discretion,
      will determine. The Administrator may set performance objectives based upon
      the
      achievement of Company-wide, divisional, or individual goals, applicable federal
      or state securities laws, or any other basis determined by the Administrator
      in
      its discretion.

    

    (d) Earning
      of Performance Units and Shares.
      After
      the applicable Performance Period has ended, the holder of Performance Units
      or
      Performance Shares will be entitled to receive a payout of the number of
      Performance Units or Performance Shares earned by the Participant over the
      Performance Period, to be determined as a function of the extent to which the
      corresponding performance objectives or other vesting provisions have been
      achieved.

    

    (e) Form
      and Timing of Payment of Performance Units or Shares.
      Payment
      of earned Performance Units or Performance Shares will be made as soon as
      practicable after the expiration of the applicable Performance Period. The
      Administrator, in its sole discretion, may pay earned Performance Units and
      Performance Shares in the form of cash, in Shares (which have an aggregate
      Fair
      Market Value equal to the value of the earned Performance Units or Performance
      Shares at the close of the applicable Performance Period) or in a combination
      thereof.

    

    (f) Cancellation
      of Performance Units and Performance Shares.
      On the
      date set forth in the Award Agreement, all unearned or unvested Performance
      Units or Performance Shares will be forfeited to the Company, and again will
      be
      available for grant under the Plan.

    

    
      	
              11.

            	
              Leaves
                of Absence/Transfer Between Locations.
                

            

    

    

    
      	 	
              Unless
                the Administrator provides otherwise or as required by Applicable
                Law,
                vesting of Awards granted hereunder will be suspended during any
                unpaid
                leave of absence. An Employee will not cease to be an Employee in the case
                of (i) any leave of absence approved by the Company or (ii) transfers
                between locations of the Company or between the Company, its Parent,
                or
                any Subsidiary. For purposes of ISOs, no such leave may exceed ninety
                (90)
                days, unless reemployment upon expiration of such leave is guaranteed
                by
                statute or contract. If reemployment upon expiration of a leave of
                absence
                approved by the Company is not so guaranteed, then three (3) months
                following the ninety-first (91st) day of such leave any ISO held
                by the
                Participant will cease to be treated as an ISO and will be treated
                for tax
                purposes as an NSO.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
       

      EXHIBIT
        10.1

      2006
        Equity Incentive Plan

    

     

    
      	
              12.

            	
              Transferability
                of Awards.
                

            

    

    

    
      	 	
              Unless
                determined otherwise by the Administrator, an Award may not be sold,
                pledged, assigned, hypothecated, transferred, or disposed of in any
                manner
                other than by will or by the laws of descent or distribution and
                may be
                exercised, during the lifetime of the Participant, only by the
                Participant. If the Administrator makes an Award transferable, such
                Award
                will contain such additional terms and conditions as the Administrator
                deems appropriate. 

            

    

    

    
      	13.	
              Adjustments;
                Dissolution or Liquidation; Merger or Change in Control.

            

    

    

    (a) Adjustments.
      In the
      event that any dividend or other distribution (whether in the form of cash,
      Shares, other securities, or other property), recapitalization, stock split,
      reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
      combination, repurchase, or exchange of Shares or other securities of the
      Company, or other change in the corporate structure of the Company affecting
      the
      Shares occurs, the Administrator, in order to prevent diminution or enlargement
      of the benefits or potential benefits intended to be made available under the
      Plan, shall adjust the number and class of Shares that may be delivered under
      the Plan and/or the number, class, and price of Shares covered by each
      outstanding Award, the numerical Share limit in Section 3. 

    

    (b) Dissolution
      or Liquidation.
      In the
      event of the proposed dissolution or liquidation of the Company, the
      Administrator will notify each Participant as soon as practicable prior to
      the
      effective date of such proposed transaction. To the extent it has not been
      previously exercised, an Award will terminate immediately prior to the
      consummation of such proposed action.

    

    (c) Change
      in Control.
      In the
      event of a merger or Change in Control, any or all outstanding Awards may be
      assumed or replaced by the successor corporation, which assumption or
      replacement shall be binding on all Participants. In the alternative, the
      successor corporation may substitute equivalent Awards or provide substantially
      similar consideration to Participants as was provided to stockholders (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. 

    

    In
      the
      event that the successor corporation does not assume or substitute for the
      Award, unless the Administrator provides otherwise, the Participant will fully
      vest in and have the right to exercise all of his or her outstanding Options
      and
      SARs, including Shares as to which such Awards would not otherwise be vested
      or
      exercisable, all restrictions on Restricted Stock and Restricted Stock Units
      will lapse, and, with respect to Performance Shares and Performance Units,
      all
      Performance Goals or other vesting criteria will be deemed achieved at target
      levels and all other terms and conditions met. In addition, if an Option or
      SAR
      is not assumed or substituted in the event of a Change in Control, the
      Administrator will notify the Participant in writing or electronically that
      the
      Option or SAR will be exercisable for a period of time determined by the
      Administrator in its sole discretion, and the Option or SAR will terminate
      upon
      the expiration of such period.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

      
         

        EXHIBIT
          10.1

        2006
          Equity Incentive Plan

         

      

    

    For
      the
      purposes of this subsection (c), an Award will be considered assumed if,
      following the Change in Control, the Award confers the right to purchase or
      receive, for each Share subject to the Award immediately prior to the Change
      in
      Control, the consideration (whether stock, cash, or other securities or
      property) or, in the case of an SAR upon the exercise of which the Administrator
      determines to pay cash or a Performance Share or Performance Unit which the
      Administrator can determine to pay in cash, the fair market value of the
      consideration received in the merger or Change in Control by holders of Common
      Stock for each Share held on the effective date of the transaction (and if
      holders were offered a choice of consideration, the type of consideration chosen
      by the holders of a majority of the outstanding Shares); provided, however,
      that
      if such consideration received in the Change in Control is not solely common
      stock of the successor corporation or its Parent, the Administrator may, with
      the consent of the successor corporation, provide for the consideration to
      be
      received upon the exercise of an Option or SAR or upon the payout of a
      Restricted Stock Unit, Performance Share or Performance Unit, for each Share
      subject to such Award (or in the case of Restricted Stock Units and Performance
      Units, the number of implied shares determined by dividing the value of the
      Restricted Stock Units and Performance Units, as applicable, by the per share
      consideration received by holders of Common Stock in the Change in Control),
      to
      be solely common stock of the successor corporation or its Parent equal in
      fair
      market value to the per share consideration received by holders of Common Stock
      in the Change in Control.

    
       

        Notwithstanding
          anything in this Section 13(c) to the contrary, an Award that vests, is
          earned
          or paid-out upon the satisfaction of one or more performance goals will
          not be
          considered assumed if the Company or its successor modifies any of such
          performance goals without the Participant's consent; provided, however,
          a
          modification to such performance goals only to reflect the successor
          corporation's post-Change in Control corporate structure will not be deemed
          to
          invalidate an otherwise valid Award assumption.

      

    

    

    
      	14.	
              Tax
                Withholding.

            

    

    

    (a) Withholding
      Requirements.
      Prior
      to the delivery of any Shares or cash pursuant to an Award (or exercise
      thereof), the Company will have the power and the right to deduct or withhold,
      or require a Participant to remit to the Company, an amount sufficient to
      satisfy federal, state, local, foreign or other taxes (including the
      Participant's FICA obligation) required to be withheld with respect to such
      Award (or exercise thereof).

    

    
      
         

      

      
         

        
          

        

      

      
         

      

      
         

        EXHIBIT
          10.1

        2006
          Equity Incentive Plan

         

      

    

    (b) Withholding
      Arrangements.
      The
      Administrator, in its sole discretion and pursuant to such procedures as it
      may
      specify from time to time, may permit a Participant to satisfy such tax
      withholding obligation, in whole or in part by (without limitation) (i) paying
      cash, (ii) electing to have the Company withhold otherwise deliverable cash
      or
      Shares having a Fair Market Value equal to the amount required to be withheld,
      or (iii) delivering to the Company already-owned Shares having a Fair Market
      Value equal to the amount required to be withheld. The amount of the withholding
      requirement will be deemed to include any amount which the Administrator agrees
      may be withheld at the time the election is made. The Fair Market Value of
      the
      Shares to be withheld or delivered will be determined as of the date that the
      taxes are required to be withheld.

    

    
      	
              15.

            	
              No
                Effect on Employment or Service.
                

            

      	 	 

    

    
      	 	
              Neither
                the Plan nor any Award will confer upon a Participant any right with
                respect to continuing the Participant's relationship as a Service
                Provider
                with the Company, nor will they interfere in any way with the
                Participant's right or the Company's right to terminate such relationship
                at any time, with or without cause, to the extent permitted by Applicable
                Laws.

            

    

    

    
      	16.	
              Term
                of Plan.
                

            

    

    

    
      	 	
              The
                Plan was adopted by the Board on November 28, 2006. The Plan shall
                become
                effective upon approval by stockholders of the Company, consistent
                with
                applicable laws. The Plan will terminate ten years following the
                earlier
                of (i) the date it was adopted by the Board or (ii) the date it
                became effective upon approval by stockholders of the Company, unless
                sooner terminated by the Board pursuant to Section 17.
                

            

    

    

    
      	17.	
              Amendment
                and Termination of the Plan.

            

    

    

    (a) Amendment
      and Termination.
      The
      Board may at any time amend, alter, suspend or terminate the Plan.

    

    (b) Stockholder
      Approval.
      The
      Company will obtain stockholder approval of any Plan amendment to the extent
      necessary and desirable to comply with Applicable Laws.

    

    (c) Effect
      of Amendment or Termination.
      No
      amendment, alteration, suspension or termination of the Plan will impair the
      rights of any Participant, unless mutually agreed otherwise between the
      Participant and the Administrator, which agreement must be in writing and signed
      by the Participant and the Company. Termination of the Plan will not affect
      the
      Administrator's ability to exercise the powers granted to it hereunder with
      respect to Awards granted under the Plan prior to the date of such
      termination.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

      
         

        EXHIBIT
          10.1

        2006
          Equity Incentive Plan

      

    

     

    
      	18.	
              Conditions
                Upon Issuance of Shares.

            

    

    

    (a) Legal
      Compliance.
      Shares
      will not be issued pursuant to the exercise of an Award unless the exercise
      of
      such Award and the issuance and delivery of such Shares will comply with
      Applicable Laws and will be further subject to the approval of counsel for
      the
      Company with respect to such compliance.

    

    (b) Investment
      Representations.
      As a
      condition to the exercise of an Award, the Company may require the person
      exercising such Award to represent and warrant at the time of any such exercise
      that the Shares are being purchased only for investment and without any present
      intention to sell or distribute such Shares if, in the opinion of counsel for
      the Company, such a representation is required.

    

    
      	19.	
              Inability
                to Obtain Authority.
                

            

    

    

    
      	 	
              The
                inability of the Company to obtain authority from any regulatory
                body
                having jurisdiction, which authority is deemed by the Company's counsel
                to
                be necessary to the lawful issuance and sale of any Shares hereunder,
                will
                relieve the Company of any liability in respect of the failure to
                issue or
                sell such Shares as to which such requisite authority will not have
                been
                obtained.

            

    

    

    
      	
              20.

            	
              Repricing
                Prohibited; Exchange And Buyout Of Awards.
                The repricing of Options or SARs is prohibited without prior stockholder
                approval. The Administrator may authorize the Company, with prior
                stockholder approval and the consent of the respective Participants,
                to
                issue new Option or SAR Awards in exchange for the surrender and
                cancellation of any or all outstanding Awards. The Administrator
                may at
                any time buy from a Participant an Option previously granted with
                payment
                in cash, Shares or other consideration, based on such terms and conditions
                as the Administrator and the Participant shall
                agree.

            

    

    

    
      	
              21.

            	
              Governing
                Law.
                The Plan and all Agreements shall be construed in accordance with
                and
                governed by the laws of the State of
                Nevada.

            

    

    

    
      	
              22.

            	
              Effective
                Date.
                The
                Plan’s effective date is the date on which it is adopted by the
                Board,
                so
                long as it is approved by the Company’s shareholders at any time within 12
                months of such adoption.

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