Document:

GUARANTY

    

    THIS
      GUARANTY (“Guaranty”)
      is
      executed as of March 31, 2006, by LIGHTSTONE HOLDINGS, LLC, a Delaware limited
      liability company ("Guarantor”),
      for
      the benefit of WACHOVIA BANK, NATIONAL ASSOCIATION (“Lender”).

    

    A. LVP
      ST.
      AUGUSTINE OUTLETS LLC, a Delaware limited liability company (the “Borrower”)
      is
      indebted to Lender with respect to a loan (“Loan”)
      pursuant to that certain promissory note dated of even date herewith, payable
      to
      the order of Lender in the original principal amount of TWENTY-SEVEN
      MILLION
      TWO HUNDRED FIFTY THOUSAND MILLION AND 00/100 DOLLARS ($27,250,000)
      (together with all renewals, modifications, increases and extensions thereof,
      collectively, the “Note”),
      which
      is secured by the liens and security interests created by that certain Note
      and
      Mortgage Modification Agreement Evidencing Renewal Promissory Note Including
      Future Advance and Amended and Restated Mortgage, Security Agreement and Fixture
      Filing (the “Security
      Instrument”),
      between Lender and Borrower, dated of even date herewith and further evidenced,
      secured or governed by the other Loan Documents (as defined in the Security
      Instrument); and

    

    B. Lender
      is
      not willing to make the Loan, or otherwise extend credit, to Borrower unless
      Guarantor unconditionally guarantees payment and performance to Lender of the
      Guaranteed Obligations (as hereinafter defined); and

    

    C. Guarantor
      is the owner of a direct or indirect interest in Borrower, and Guarantor will
      directly benefit from Lender’s making the Loan to Borrower.

    

    NOW,
      THEREFORE, as an inducement to Lender to make the Loan to Borrower thereunder,
      and to extend such additional credit as Lender may from time to time agree
      to
      extend under the Loan Documents, and for other good and valuable consideration,
      the receipt and legal sufficiency of which are hereby acknowledged, the parties
      do hereby agree as follows:

    

    ARTICLE
      I

    NATURE
      AND SCOPE OF GUARANTY

    

    Section
      1.1 Guaranty
      of Obligation.
      Guarantor hereby absolutely, irrevocably and unconditionally guarantees to
      Lender (and its successors and assigns) the payment and performance of the
      Guaranteed Obligations as and when the same shall be due and payable, whether
      upon demand by Lender or by lapse of time, by acceleration of maturity or
      otherwise. Guarantor hereby absolutely, irrevocably and unconditionally
      covenants and agrees that Guarantor is liable for the Guaranteed Obligations
      as
      a primary obligor, and that Guarantor shall fully perform each and every term
      and provision hereof.

    

    Section
      1.2 Definition
      of Guaranteed Obligations.
      As used
      herein, the term “Guaranteed
      Obligations”
shall
      be deemed to include, and Guarantor shall be liable for, and shall indemnify,
      defend and hold Lender harmless from and against, any and all Losses (as
      hereinafter defined) incurred or suffered by Lender and/or any of its affiliates
      and arising out of or in connection with the matters listed below:

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (a) fraud
      or
      intentional misrepresentation or failure to disclose a material fact or any
      untrue statement of a material fact or omission to state a material fact in
      any
      the written materials and/or information provided to Lender or any of its
      affiliates in all cases by or on behalf of Borrower or Guarantor or any of
      their
      Affiliates in connection with the Security Instrument, the Note or the other
      Loan Documents;

    

    (b) the
      misappropriation by Borrower, Guarantor or any of their Affiliates of any tenant
      security deposits or Rent received by Borrower (or received by its Partners)
      (i)
      more than one (1) month in advance of the due date thereof (other than Rents
      deemed to be "additional rents" under Leases) or (ii) after the occurrence
      of an
      Event of Default and not either delivered to Lender (or Lender's agent) or
      applied to ordinary and necessary expenses of owning and operating the Property;
      

    

    (c) the
      misapplication or conversion by Borrower, Guarantor or any of their Affiliates
      of Loss Proceeds to the extent actually paid by the insurer;

    

    (d) any
      arson
      or physical waste to or of the Property or damage to the Property in each case
      resulting from the intentional acts or intentional omissions of Borrower or
      any
      Affiliate of Borrower;

    

    (e) Borrower’s
      failure to comply with the provisions of Sections
      2.02(g), 16.01 or 16.02,
      inclusive, of the Security Instrument;

    

    (f) the
      exercise of any right or remedy under any federal, state or local forfeiture
      laws resulting in the loss or impairment of the lien of the Security Instrument,
      or the priority thereof, against the Property;

    

    (g) any
      claims, actions or proceedings initiated by Borrower (or any Affiliate of
      Borrower) alleging that the relationship of Borrower and Lender is that of
      joint
      venturers, partners, tenants in common, joint tenants or any relationship other
      than that of debtor and creditor; or

    

    (h) Borrower's
      failure to pay any valid taxes, assessments, mechanic's liens, materialmen's
      liens or other liens which could create liens on any portion of the Property
      superior to the lien or security title of the Security Instrument or the other
      Loan Documents, except, (1) with respect to any such taxes or assessments,
      to
      the extent that funds have been deposited with Lender pursuant to the terms
      of
      the Security Instrument specifically for the applicable taxes or assessments
      and
      not applied by Lender to pay such taxes and (2) to the extent that there is
      insufficient available cash flow at any time to enable Borrower to pay all
      operating expenses (including taxes and assessments) then due and payable,
      necessary property improvement expenditures and amounts due and payable under
      the Loan Documents (as demonstrated to the reasonable satisfaction of Lender)
      and Borrower applies all available cash flow to the payment of any one or more
      of the foregoing items.

    

    
      
         

      

      
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    In
      addition, in the event (i) any proceeding, action, petition or filing under
      the
      Bankruptcy Code, or any similar state or federal law now or hereafter in effect
      relating to bankruptcy, reorganization or insolvency, or the arrangement or
      adjustment of debts of Borrower shall be filed by, consented to or acquiesced
      in
      by Borrower or Guarantor, or filed against Borrower by any Affiliate (as defined
      in the Security Instrument) of either Borrower or Guarantor, or if Borrower
      or
      Guarantor or any Affiliate of either of them shall institute any proceeding
      for
      Borrower’s dissolution or liquidation, or Borrower shall make an assignment for
      the benefit of creditors, (ii) of a Transfer in violation of the provisions
      of
      Article IX of the Security Instrument, or (iii) Borrower or any Affiliate
      contests or interferes with Lender’s enforcement of its rights and remedies
      hereunder or under the Loan documents by asserting any defense (x) as to the
      validity of the obligations under the Loan Documents or in any way relating
      to
      the structure of the Company or the enforceability of Lender’s rights and
      remedies under the Loan Documents, or (y) for the purpose of delaying, hindering
      or impairing Lender’s rights and remedies under the Loan Documents (provided
      that if any such Person obtains a non-appealable order successfully asserting
      a
      Contest, Guarantor shall have no liability under this clause (iii)), then the
      Guaranteed Obligations shall also include the unpaid balance of the
      Debt.

    

    For
      purposes of this Guaranty, the term “Losses”
      includes any and all claims, suits, liabilities (including, without limitation,
      strict liabilities), actions, proceedings, obligations, debts, actual damages,
      actual losses, actual costs, actual expenses, diminutions in value, fines,
      penalties, charges, fees, expenses, judgments, awards, amounts paid in
      settlement, punitive damages of whatever kind or nature (including but not
      limited to reasonable attorneys’ fees and other costs of defense).

    

    Section
      1.3 Nature
      of Guaranty.
      This
      Guaranty is an irrevocable, absolute, continuing guaranty of payment and
      performance, is joint and several and is not a guaranty of collection. This
      Guaranty shall continue to be effective with respect to any Guaranteed
      Obligations arising or created after any attempted revocation by Guarantor
      and
      after (if Guarantor is a natural Person) Guarantor’s death (in which event this
      Guaranty shall be binding upon Guarantor’s estate and Guarantor’s legal
      representatives and heirs). The obligations of Guarantor under this Guaranty
      shall survive any foreclosure proceeding, any foreclosure sale and delivery
      of
      any deed in lieu of foreclosure, and any release of record of the Security
      Instrument. The fact that at any time or from time to time the Guaranteed
      Obligations may be increased or reduced shall not release or discharge the
      obligation of Guarantor to Lender with respect to the Guaranteed Obligations.
      This Guaranty may be enforced by Lender and any subsequent holder of the Note
      and shall not be discharged by the assignment or negotiation of all or part
      of
      the Note.

    

    Section
      1.4 Guaranteed
      Obligations Not Reduced by Offset.
      The
      Guaranteed Obligations and the liabilities and obligations of Guarantor to
      Lender hereunder shall not be reduced, discharged or released because or by
      reason of any existing or future offset, claim or defense of Borrower, or any
      other Person, against Lender or against payment of the Guaranteed Obligations,
      whether such offset, claim or defense arises in connection with the Guaranteed
      Obligations (or the transactions creating the Guaranteed Obligations) or
      otherwise.

    

    Section
      1.5 Payment
      by Guarantor.
      If all
      or any part of the Guaranteed Obligations shall not be punctually paid when
      due,
      whether at maturity or earlier by acceleration or otherwise, Guarantor shall,
      immediately upon demand by Lender, and without presentment, protest, notice
      of
      protest, notice of non-payment, notice of intention to accelerate the maturity,
      notice of acceleration of the maturity, or any other notice whatsoever, pay
      in
      lawful money of the United States of America, the amount due on the Guaranteed
      Obligations to Lender at Lender’s address as set forth herein. Such demand(s)
      may be made at any time coincident with or after the time for payment of all
      or
      part of the Guaranteed Obligations, and may be made from time to time with
      respect to the same or different items of Guaranteed Obligations. Such demand
      shall be deemed made, given and received in accordance with the notice
      provisions hereof.

    

    
      
         

      

      
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    Section
      1.6 No
      Duty to Pursue Others.
      It
      shall not be necessary for Lender (and Guarantor hereby waives any rights which
      Guarantor may have to require Lender), in order to enforce this Guaranty against
      Guarantor, first to (i) institute suit or exhaust its remedies against Borrower
      or others liable on the Loan or the Guaranteed Obligations or any other Person,
      (ii) enforce Lender’s rights against any collateral which shall ever have been
      given to secure the Loan, (iii) enforce Lender’s rights against any other
      guarantors of the Guaranteed Obligations, (iv) join Borrower or any others
      liable on the Guaranteed Obligations in any action seeking to enforce this
      Guaranty, (v) exhaust any remedies available to Lender against any collateral
      which shall ever have been given to secure the Loan, or (vi) resort to any
      other
      means of obtaining payment of the Guaranteed Obligations. Lender shall not
      be
      required to mitigate damages or take any other action to reduce, collect or
      enforce the Guaranteed Obligations.

    

    Section
      1.7 Waivers.
      Guarantor agrees to the provisions of the Loan Documents, and hereby waives
      notice of (i) any loans or advances made by Lender to Borrower, (ii) acceptance
      of this Guaranty, (iii) any amendment or extension of the Note or of any other
      Loan Documents, (iv) the execution and delivery by Borrower and Lender of any
      other loan or credit agreement or of Borrower’s execution and delivery of any
      promissory notes or other documents arising under the Loan Documents or in
      connection with the Property, (v) the occurrence of any breach by Borrower
      or
      Event of Default, (vi) Lender’s transfer or disposition of the Guaranteed
      Obligations, or any part thereof, (vii) sale or foreclosure (or posting or
      advertising for sale or foreclosure) of any collateral for the Guaranteed
      Obligations, (viii) protest, proof of non-payment or default by Borrower, or
      (ix)
      any
      other action at any time taken or omitted by Lender, and, generally, all demands
      and notices of every kind in connection with this Guaranty, the Loan Documents,
      any documents or agreements evidencing, securing or relating to any of the
      Guaranteed Obligations.

    

    Section
      1.8 Payment
      of Expenses.
      In the
      event that Guarantor should breach or fail to timely perform any provisions
      of
      this Guaranty, Guarantor shall, immediately upon demand by Lender, pay Lender
      all costs and expenses (including court costs and reasonable attorneys’ fees)
      incurred by Lender in the enforcement hereof or the preservation of Lender’s
      rights hereunder. The covenant contained in this section shall survive the
      payment and performance of the Guaranteed Obligations.

    

    Section
      1.9 Effect
      of Bankruptcy.
      In the
      event that, pursuant to any insolvency, bankruptcy, reorganization, receivership
      or other debtor relief law, or any judgment, order or decision thereunder,
      Lender must rescind or restore any payment, or any part thereof, received by
      Lender in satisfaction of the Guaranteed Obligations, as set forth herein,
      any
      prior release or discharge from the terms of this Guaranty given to Guarantor
      by
      Lender shall be without effect, and this Guaranty shall remain in full force
      and
      effect. It is the intention of Borrower and Guarantor that Guarantor’s
      obligations hereunder shall not be discharged except by Guarantor’s performance
      of such obligations and then only to the extent of such
      performance.

    

    
      
         

      

      
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    Section
      1.10 Deferral
      of Rights of Subrogation, Reimbursement and Contribution.

    

    (a) Notwithstanding
      any payment or payments made by Guarantor hereunder, unless and until payment
      in
      full of the Debt (and including interest accruing on the Note after the
      commencement of a proceeding by or against Borrower under the Bankruptcy Code
      which interest the parties agree shall remain a claim that is prior and superior
      to any claim of Guarantor notwithstanding any contrary practice, custom or
      ruling in cases under the Bankruptcy Code) Guarantor will not assert or exercise
      any right of Lender or of Guarantor against Borrower to recover the amount
      of
      any payment made by Guarantor to Lender by way of subrogation, reimbursement,
      contribution, indemnity, or otherwise arising by contract or operation of law,
      and Guarantor shall not have any right of recourse to or any claim against
      assets or property of Borrower.

    

    (b) Until
      payment in full of the Debt (and including interest accruing on the Note after
      the commencement of a proceeding by or against Borrower under the Bankruptcy
      Code which interest the parties agree shall remain a claim that is prior and
      superior to any claim of Guarantor notwithstanding any contrary practice, custom
      or ruling in cases under the Bankruptcy Code), Guarantor agrees not to accept
      any payment or satisfaction of any kind of indebtedness of Borrower to Guarantor
      and hereby assigns such indebtedness to Lender, including the right to file
      proof of claim and to vote thereon in connection with any such proceeding under
      the Bankruptcy Code, including the right to vote on any plan of reorganization.
      If any amount of the type more particularly described in the first sentence
      of
      this Section 1.10(b) shall nevertheless be paid to Guarantor by Borrower prior
      to payment in full of all sums owed to Lender under the Loan Documents (the
      “Obligations”),
      such
      amount shall be held in trust for the benefit of Lender and shall forthwith
      be
      paid to Lender to be credited and applied to the Guaranteed Obligations, whether
      matured or unmatured.

    

    (c) The
      provisions of this Section 1.10 shall survive the termination of this Guaranty,
      and any satisfaction and discharge of Borrower by virtue of any payment, court
      order or any applicable law.

    

    Section
      1.11 Intentionally
      Omitted.

    

    Section
      1.12 “Borrower”.
      The
      term “Borrower”
as
      used
      herein shall include any new or successor corporation, association, partnership
      (general or limited), joint venture, limited liability company, trust or other
      individual or organization formed as a result of any merger, reorganization,
      sale, transfer, devise, gift or bequest of Borrower or any interest in
      Borrower.

    

    
      
         

      

      
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    ARTICLE
      2

    EVENTS
      AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING GUARANTOR’S
      OBLIGATIONS

    

    Guarantor
      hereby consents and agrees to each of the following, and agrees that Guarantor’s
      obligations under this Guaranty shall not be released, diminished, impaired,
      reduced or adversely affected by any of the following, and waives any common
      law, equitable, statutory or other rights (including without limitation rights
      to notice) which Guarantor might otherwise have as a result of or in connection
      with any of the following:

    

    Section
      2.1 Modifications.
      Any
      renewal, extension, increase, modification, alteration or rearrangement of
      all
      or any part of the Guaranteed Obligations, Note, Loan Documents, or other
      document, instrument, contract or understanding between Borrower and Lender,
      or
      any other parties, pertaining to the Guaranteed Obligations or any failure
      of
      Lender to notify Guarantor of any such action.

    

    Section
      2.2 Adjustment.
      Any
      adjustment, indulgence, forbearance or compromise that might be granted or
      given
      by Lender to Borrower or any Guarantor.

    

    Section
      2.3 Condition
      of Borrower or Guarantor.
      The
      insolvency, bankruptcy, arrangement, adjustment, composition, liquidation,
      disability, dissolution or lack of power of Borrower, Guarantor or any other
      Person at any time liable for the payment of all or part of the Guaranteed
      Obligations; or any dissolution of Borrower or Guarantor, or any sale, lease
      or
      transfer of any or all of the assets of Borrower or Guarantor, or any changes
      in
      the shareholders, partners or members of Borrower or Guarantor; or any
      reorganization of Borrower or Guarantor.

    

    Section
      2.4 Invalidity
      of Guaranteed Obligations.
      The
      invalidity, illegality or unenforceability of all or any part of the Guaranteed
      Obligations, or any document or agreement executed in connection with the
      Guaranteed Obligations, for any reason whatsoever, including without limitation
      the fact that (i) the Guaranteed Obligations, or any part thereof, exceed the
      amount permitted by law, (ii) the act of creating the Guaranteed Obligations
      or
      any part thereof, is ultra vires, (iii) the officers or representatives
      executing the Note or the other Loan Documents or otherwise creating the
      Guaranteed Obligations acted in excess of their authority, (iv) the Guaranteed
      Obligations violate applicable usury laws, (v) Borrower has valid defenses,
      claims or offsets (whether at law, in equity or by agreement) which render
      the
      Guaranteed Obligations wholly or partially uncollectible from Borrower, (vi)
      the
      creation, performance or repayment of the Guaranteed Obligations (or the
      execution, delivery and performance of any document or instrument representing
      part of the Guaranteed Obligations or executed in connection with the Guaranteed
      Obligations, or given to secure the repayment of the Guaranteed Obligations)
      is
      illegal, uncollectible or unenforceable, or (vii) the Note or any of the other
      Loan Documents have been forged or otherwise are irregular or not genuine or
      authentic, it being agreed that Guarantor shall remain liable hereon regardless
      of whether Borrower or any other Person be found not liable on the Guaranteed
      Obligations or any part thereof for any reason.

    

    Section
      2.5 Release
      of Obligors.
      Any
      full or partial release of the liability of Borrower on the Guaranteed
      Obligations, or any part thereof, or of any co-guarantors, or any other Person
      or entity now or hereafter liable, whether directly or indirectly, jointly,
      severally, or jointly and severally, to pay, perform, guarantee or assure the
      payment of the Guaranteed Obligations, or any part thereof, it being recognized,
      acknowledged and agreed by Guarantor that Guarantor may be required to pay
      the
      Guaranteed Obligations in full without assistance or support of any other
      Person, and Guarantor has not been induced to enter into this Guaranty on the
      basis of a contemplation, belief, understanding or agreement that other parties
      will be liable to pay or perform the Guaranteed Obligations, or that Lender
      will
      look to other parties to pay or perform the Guaranteed Obligations.

    

    
      
         

      

      
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    Section
      2.6 Other
      Collateral.
      The
      taking or accepting of any other security, collateral or guaranty, or other
      assurance of payment, for all or any part of the Guaranteed
      Obligations.

    

    Section
      2.7 Release
      of Collateral.
      Any
      release, surrender, exchange, subordination, deterioration, waste, loss or
      impairment (including without limitation negligent, willful, unreasonable or
      unjustifiable impairment) of any collateral, property or security, at any time
      existing in connection with, or assuring or securing payment of, all or any
      part
      of the Guaranteed Obligations.

    

    Section
      2.8 Care
      and Diligence.
      The
      failure of Lender or any other Person to exercise diligence or reasonable care
      in the preservation, protection, enforcement, sale or other handling or
      treatment of all or any part of such collateral, property or security, including
      but not limited to any neglect, delay, omission, failure or refusal of Lender
      (i) to take or prosecute any action for the collection of any of the Guaranteed
      Obligations, (ii) to foreclose, or initiate any action to foreclose, or, once
      commenced, prosecute to completion any action to foreclose upon any security
      therefor, or (iii) to take or prosecute any action in connection with any
      instrument or agreement evidencing or securing all or any part of the Guaranteed
      Obligations.

    

    Section
      2.9 Unenforceability.
      The
      fact that any collateral, security, security interest or lien contemplated
      or
      intended to be given, created or granted as security for the repayment of the
      Guaranteed Obligations, or any part thereof, shall not be properly perfected
      or
      created, or shall prove to be unenforceable or subordinate to any other security
      interest or lien, it being recognized and agreed by Guarantor that Guarantor
      is
      not entering into this Guaranty in reliance on, or in contemplation of the
      benefits of, the validity, enforceability, collectibility or value of any of
      the
      collateral for the Guaranteed Obligations.

    

    Section
      2.10 Offset.
      The
      Note, the Guaranteed Obligations and the liabilities and obligations of
      Guarantor to Lender hereunder, shall not be reduced, discharged or released
      because of or by reason of any existing or future right of offset, claim or
      defense of Borrower against Lender, or any other Person, or against payment
      of
      the Guaranteed Obligations, whether such right of offset, claim or defense
      arises in connection with the Guaranteed Obligations (or the transactions
      creating the Guaranteed Obligations) or otherwise.

    

    Section
      2.11 Merger.
      The
      reorganization, merger or consolidation of Borrower into or with any other
      corporation or entity.

    

    
      
         

      

      
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    Section
      2.12 Preference.
      Any
      payment by Borrower to Lender is held to constitute a preference under
      bankruptcy laws, or for any reason Lender is required to refund such payment
      or
      pay such amount to Borrower or someone else.

    

    Section
      2.13 Other
      Actions Taken or Omitted.
      Any
      other action taken or omitted to be taken with respect to the Loan Documents,
      the Guaranteed Obligations, or the security and collateral therefor, whether
      or
      not such action or omission prejudices Guarantor or increases the likelihood
      that Guarantor will be required to pay the Guaranteed Obligations pursuant
      to
      the terms hereof, it is the unambiguous and unequivocal intention of Guarantor
      that Guarantor shall be obligated to pay the Guaranteed Obligations when due,
      notwithstanding any occurrence, circumstance, event, action, or omission
      whatsoever, whether or not contemplated, and whether or not otherwise or
      particularly described herein, which obligation shall be deemed satisfied only
      upon the full and final payment and satisfaction of the Guaranteed
      Obligations.

    

    ARTICLE
      3

    REPRESENTATIONS
      AND WARRANTIES

    

    To
      induce
      Lender to enter into the Loan Documents and extend credit to Borrower, Guarantor
      represents and warrants to Lender as follows:

    

    Section
      3.1 Benefit.
      Guarantor is an Affiliate of Borrower, is the owner of a direct or indirect
      interest in Borrower, and has received, or will receive, direct or indirect
      benefit from the making of this Guaranty with respect to the Guaranteed
      Obligations.

    

    Section
      3.2 Familiarity
      and Reliance.
      Guarantor is familiar with, and has independently reviewed books and records
      regarding, the financial condition of Borrower and is familiar with the value
      of
      any and all collateral intended to be created as security for the payment of
      the
      Note or Guaranteed Obligations; provided, however, Guarantor is not relying
      on
      such financial condition or the collateral as an inducement to enter into this
      Guaranty.

    

    Section
      3.3 No
      Representation by Lender.
      Neither
      Lender nor any other Person has made any representation, warranty or statement
      to Guarantor in order to induce Guarantor to execute this Guaranty.

    

    Section
      3.4 Guarantor’s
      Financial Condition.
      As of
      the date hereof, and after giving effect to this Guaranty and the contingent
      obligation evidenced hereby, Guarantor is, and will be, Solvent.

    

    Section
      3.5 Legality.
      The
      execution, delivery and performance by Guarantor of this Guaranty and the
      consummation of the transactions contemplated hereunder do not, and will not,
      contravene or conflict with any law, statute or regulation whatsoever to which
      Guarantor is subject or constitute a default (or an event which with notice
      or
      lapse of time or both would constitute a default) under, or result in the breach
      of, any indenture, mortgage, deed of trust, charge, lien, or any contract,
      agreement or other instrument to which Guarantor is a party or which may be
      applicable to Guarantor. This Guaranty is a legal and binding obligation of
      Guarantor and is enforceable in accordance with its terms, except as limited
      by
      bankruptcy, insolvency or other laws of general application relating to the
      enforcement of creditors’ rights.

    

    
      
         

      

      
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    Section
      3.6 Survival.
      All
      representations and warranties made by Guarantor herein shall survive the
      execution hereof.

    

    Section
      3.7 Review
      of Documents.
      Guarantor has examined the Note and all of the Loan Documents.

    

    Section
      3.8 Litigation.
      Except
      as otherwise disclosed to Lender, there are no proceedings pending or, so far
      as
      Guarantor knows, threatened before any court or administrative agency which,
      if
      decided adversely to Guarantor, would materially adversely affect the financial
      condition of Guarantor or the authority of Guarantor to enter into, or the
      validity or enforceability of, this Guaranty.

    

    Section
      3.9 Tax
      Returns.
      Guarantor
      has filed all required federal, state and local tax returns and has paid all
      taxes as shown on such returns as they have become due. No claims have been
      assessed and are unpaid with respect to such taxes.

    

    ARTICLE
      4

    SUBORDINATION
      OF CERTAIN INDEBTEDNESS

    

    Section
      4.1 Subordination
      of All Guarantor Claims.
      As
      used
      herein, the term “Guarantor
      Claims”
shall
      mean all debts and liabilities of Borrower to Guarantor, whether such debts
      and
      liabilities now exist or are hereafter incurred or arise, or whether the
      obligations of Borrower thereon are direct, contingent, primary, secondary,
      several, joint and several, or otherwise, and irrespective of whether such
      debts
      or liabilities be evidenced by note, contract, open account, or otherwise,
      and
      irrespective of the Person or Persons in whose favor such debts or liabilities
      may, at their inception, have been, or may hereafter be created, or the manner
      in which they have been or may hereafter be acquired by Guarantor. The Guarantor
      Claims shall include, without limitation, all rights and claims of Guarantor
      against Borrower (arising as a result of subrogation or otherwise) as a result
      of Guarantor’s payment of all or a portion of the Guaranteed Obligations to the
      extent the provisions of Section
      1.10
      hereof
      are unenforceable. Upon the occurrence and during the continuance of a Default,
      Guarantor shall not receive or collect, directly or indirectly, from Borrower
      or
      any other Person any amount upon the Guarantor Claims.

    

    Section
      4.2 Claims
      in Bankruptcy.
      In
      the
      event of receivership, bankruptcy, reorganization, arrangement, debtor’s relief,
      or other insolvency proceedings involving Guarantor as debtor, Lender shall
      have
      the right to prove its claim in any such proceeding so as to establish its
      rights hereunder and receive directly from the receiver, trustee or other court
      custodian dividends and payments which would otherwise be payable upon Guarantor
      Claims. Guarantor hereby assigns such dividends and payments to Lender. Should
      Lender receive, for application upon the Guaranteed Obligations, any such
      dividend or payment which is otherwise payable to Guarantor, and which, as
      between Borrower and Guarantor, shall constitute a credit upon the Guarantor
      Claims, then upon payment to Lender in full of the Guaranteed Obligations,
      Guarantor shall become subrogated to the rights of Lender to the extent that
      such payments to Lender on the Guarantor Claims have contributed toward the
      liquidation of the Guaranteed Obligations, and such subrogation shall be with
      respect to that portion of the Guaranteed Obligations which would have been
      unpaid if Lender had not received dividends or payments upon the Guarantor
      Claims.

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    Section
      4.3 Payments
      Held in Trust.
      In
      the
      event that, notwithstanding anything to the contrary in this Guaranty, Guarantor
      should receive any funds, payment, claim or distribution which is prohibited
      by
      this Guaranty, Guarantor agrees to hold in trust for Lender an amount equal
      to
      the amount of all funds, payments, claims or distributions so received, and
      agrees that it shall have absolutely no dominion over the amount of such funds,
      payments, claims or distributions so received except to pay them promptly to
      Lender, and Guarantor covenants promptly to pay the same to Lender.

    

    Section
      4.4 Liens
      Subordinate.
      Guarantor
      agrees that any liens, security interests, judgment liens, charges or other
      encumbrances upon Borrower’s assets securing payment of the Guarantor Claims
      shall be and remain inferior and subordinate to any liens, security interests,
      judgment liens, charges or other encumbrances upon Borrower’s assets securing
      payment of the Guaranteed Obligations, regardless of whether such encumbrances
      in favor of Guarantor or Lender presently exist or are hereafter created or
      attach. Without the prior written consent of Lender, Guarantor shall not (i)
      exercise or enforce any creditor’s right it may have against Borrower, or (ii)
      foreclose, repossess, sequester or otherwise take steps or institute any action
      or proceedings (judicial or otherwise, including without limitation the
      commencement of, or joinder in, any liquidation, bankruptcy, rearrangement,
      debtor’s relief or insolvency proceeding) to enforce any liens, mortgages, deeds
      of trust, security interests, collateral rights, judgments or other encumbrances
      on assets of Borrower held by Guarantor.

    

    ARTICLE
      5

    MISCELLANEOUS

    

    Section
      5.1 No
      Waiver; Remedies Cumulative.
      No
      failure or delay on the part of Lender in exercising any right, remedy, power
      or
      privilege hereunder or under the other Loan Documents and no course of dealing
      between Guarantor and Lender shall operate as a waiver thereof, nor shall any
      single or partial exercise of any right, remedy, power or privilege hereunder
      or
      under the other Loan Documents preclude any other or further exercise thereof
      or
      the exercise of any other right, remedy, power or privilege hereunder or
      thereunder. The rights and remedies provided herein and in the other Loan
      Documents are cumulative and not exclusive of any rights or remedies provided
      by
      law. The giving of notice to or demand on Guarantor which notice or demand
      is
      not required hereunder or under the other Loan Documents shall not entitle
      Guarantor to any other or further notice or demand in similar or other
      circumstances or constitute a waiver of the rights, remedies, powers or
      privileges of Lender in any circumstances not requiring notice or
      demand.

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

       

    

    Section
      5.2 Notices.
      All
      notices, requests and other communications to any party hereunder or under
      the
      Note shall be given in the manner set forth in Article XI of the Security
      Instrument, and to each addressee at the address set forth below:

     

    
      	
              Guarantor:

            	Lightstone Holdings, LLC,
              a
              Delaware limited liability company
              326
                Third Street

              Lakewood,
                New Jersey 08701

              Angela
                Olsen

              Facsimile
                No.: 732-782-0357

               

            
	
              With
                a copy to:

            	
              Herrick
                Feinstein LLP

              2
                Park Avenue 

              New
                York, New York 10016 

              Attention:
                Sheldon Chanales, Esq.

              Facsimile:
                (212) 545-3313

               

            
	
              Lender:

            	Wachovia Bank, National
              Association
              Commercial
                Real Estate Services

              8739
                Research Drive URP - 4, NC 1075

              Charlotte,
                North Carolina 28262

              Facsimile
                No.: (704) 374-6435

               

            
	
              With
                a copy to: 

            	Winston & Strawn LLP
              200
                Park Avenue

              New
                York, New York 10166 

              Attn:
                Corey A. Tessler, Esq.

              Facsimile
                No.: (212) 294-4700

            

    

    

    or
      such
      other address as Guarantor or Lender shall hereafter specify by not less than
      ten (10) days prior written notice as provided herein; provided, however, that
      notwithstanding any provision of this Section to the contrary, such notice
      of
      change of address shall be deemed given only upon actual receipt thereof.
      Rejection or other refusal to accept or the inability to deliver because of
      changed addresses of which no notice was given as herein required shall be
      deemed to be receipt of the notice, demand, statement, request or
      consent.

    

    Section
      5.3 Governing
      Law; Jurisdiction.
      This
      Guaranty shall be governed by and construed in accordance with the laws of
      the
      State of New York and the applicable laws of the United States of America.
      Guarantor hereby irrevocably submits to the jurisdiction of any court of
      competent jurisdiction located in the State of New York in connection with
      any
      proceeding out of or relating to this Guaranty.

    

    Section
      5.4 Invalid
      Provisions.
      If any
      provision of this Guaranty is held to be invalid, illegal or unenforceable
      in
      any respect, this Guaranty shall be construed without such
      provision.

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    Section
      5.5 Amendments.
      The
      terms of this Guaranty, together with the terms of the other Loan Documents,
      constitute the entire understanding and agreement of the parties hereto and
      supersede all prior agreements, understandings and negotiations between
      Guarantor and Lender with respect to the Guaranteed Obligations. This Guaranty,
      and any provisions hereof, may not be modified, amended, waived, extended,
      changed, discharged or terminated orally or by any act on the part of Guarantor
      or Lender, but only by an agreement in writing signed by the party against
      whom
      enforcement of any modification, amendment, waiver, extension, change, discharge
      or termination is sought.

    

    Section
      5.6 Parties
      Bound; Assignment.
      This
      Guaranty shall be binding upon and inure to the benefit of the parties hereto
      and their respective successors, assigns and legal representatives; provided,
      however, that Guarantor may not, without the prior written consent of Lender,
      assign any of its rights, powers, duties or obligations hereunder.

    

    Section
      5.7 Headings;
      Construction Of Documents; Definitions.
      The
      headings and captions of various sections of this Guaranty are for convenience
      of reference only and are not to be construed as defining or limiting, in any
      way, the scope or intent of the provisions hereof. Guarantor acknowledges that
      it was represented by competent counsel in connection with the negotiation
      and
      drafting of this Guaranty and the other Loan Documents and that neither this
      Guaranty nor the other Loan Documents shall be subject to the principle of
      construing the meaning against the Person who drafted same. All capitalized
      terms not otherwise defined herein shall have the meanings set forth in the
      Security Instrument.

    

    Section
      5.8 Recitals.
      The
      recital and introductory paragraphs hereof are a part hereof, form a basis
      for
      this Guaranty and shall be considered prima
      facie
      evidence
      of the facts and documents referred to therein.

    

    Section
      5.9 Counterparts.
      To
      facilitate execution, this Guaranty may be executed in as many counterparts
      as
      may be convenient or required. It shall not be necessary that the signature
      or
      acknowledgment of, or on behalf of, each party, or that the signature of all
      Persons required to bind any party, or the acknowledgment of such party, appear
      on each counterpart. All counterparts shall collectively constitute a single
      instrument. It shall not be necessary in making proof of this Guaranty to
      produce or account for more than a single counterpart containing the respective
      signatures of, or on behalf of, and the respective acknowledgments of, each
      of
      the parties hereto. Any signature or acknowledgment page to any counterpart
      may
      be detached from such counterpart without impairing the legal effect of the
      signatures or acknowledgments thereon and thereafter attached to another
      counterpart identical thereto except having attached to it additional signature
      or acknowledgment pages.

    

    Section
      5.10 Cumulative
      Rights.
      The
      rights of Lender under this Guaranty shall be separate, distinct and cumulative
      and none shall be given effect to the exclusion of the others. No act of Lender
      shall be construed as an election to proceed under any one provision herein
      to
      the exclusion of any other provision. Lender shall not be limited exclusively
      to
      the rights and remedies herein stated but shall be entitled, subject to the
      terms of this Guaranty, to every right and remedy now or hereafter afforded
      by
      law.

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    Section
      5.11 Waiver
      Of Counterclaim And Right To Trial By Jury.
      GUARANTOR HEREBY WAIVES THE RIGHT TO ASSERT A COUNTERCLAIM, OTHER THAN A
      COMPULSORY COUNTERCLAIM, IN ANY ACTION OR PROCEEDING BROUGHT AGAINST IT BY
      LENDER OR ITS AGENTS, AND WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING
      BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER OR IN ANY COUNTERCLAIM
      GUARANTOR MAY BE PERMITTED TO ASSERT HEREUNDER OR WHICH MAY BE ASSERTED BY
      LENDER OR ITS AGENTS AGAINST GUARANTOR, OR IN ANY MATTERS WHATSOEVER ARISING
      OUT
      OF OR IN ANY WAY CONNECTED WITH THIS GUARANTY, THE DEBT OR THE GUARANTEED
      OBLIGATIONS.

    

    Section
      5.12 State
      Specific Provisions.
      Notwithstanding anything contained herein to the contrary:

    

    (a) This
      Guaranty guarantees an indebtedness payable in the State of Florida and shall
      be
      governed by and construed in accordance with the laws of that state. Guarantor
      hereby acknowledges that all amounts payable under this Guaranty are payable
      in
      the State of Florida and therefor Guarantor is subject to the personal
      jurisdiction of the courts of competent jurisdiction of said state for the
      enforcement of this Guaranty. Guarantor waives any and all personal rights
      under
      the laws of said state to object to jurisdiction within said state in the event
      of litigation arising under or by reason of this Guaranty.

    

    Nothing
      contained herein, however, shall prevent Lender from bringing any action or
      exercising any rights against any security and against Guarantor personally,
      and
      against any property of Guarantor, within any other state. Initiating such
      proceeding or taking such action in any other state by Lender shall in no event
      constitute an implied waiver of the agreement contained herein that the laws
      of
      the State of Florida shall govern the rights and obligations of Guarantor and
      Lender hereunder or of the submission herein made by Guarantor to personal
      jurisdiction within the State of Florida.

    

    (b) Nothing
      herein shall be deemed to obligate any Guarantor to pay any sum of interest
      which exceeds the maximum rate of interest which such Guarantor may lawfully
      be
      required to pay under the laws of the state which govern this instrument or
      under the applicable laws for regulations of the United States of America,
      in
      the event of conflict between state law and the laws and regulations of the
      United States of America, then the laws and regulations of the United States
      of
      America shall govern. Notwithstanding any other provision herein contained
      in
      this Guaranty or in any instrument evidencing this indebtedness, the limitation
      imposed by this paragraph shall control and limit the obligations of Guarantor
      to pay sums of interest guaranteed by this instrument. In the event any
      Guarantor shall pay any sum of interest pursuant to this Guaranty which exceeds
      such maximum rate, such overcharge shall be applied in reduction of any other
      sum for which such Guarantor is obligated hereunder, if such sum is then due
      and
      payable, or shall be refunded to such Guarantor at the election of the Lender.
      

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, Guarantor has duly executed this Guaranty under seal as of
      the
      day and year first above written.

    

    

     

    
      	
              WITNESSES:

            	 	
              GUARANTOR:

            
	 	 	 	 
	 	 	
              LIGHTSTONE
                HOLDINGS LLC, a Delaware limited liability company

            
	/s/
              Joy DeVita	 	 	 
	Signature	 	By:	/s/
              David Lichtenstein
	 	 	 	 
	Joy
              DeVita	 	 	 
	Print Name	 	 	 
	 	 	 	 
	/s/
              Dina Berg	 	 	 
	Signature	 	 	 
	 	 	 	 
	Dina
              Berg	 	 	 
	
              Print
                Name

            	 	 	 

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    STATE
      OF
New
      Jersey

    

    COUNTY
      OF
Ocean

    

    The
      foregoing instrument was acknowledged before me this ___ day of March, 2006
      by
      ___________________, the ____________________ and duly authorized agent of
      LIGHTSTONE HOLDINGS, LLC, a _________________ limited liability company. He
      is
      personally known to me or has produced _________________________ as
      identification.

    

    

    
      	 	
              /s/
                Anna E. Waddy

              Notary
                Public

              

              Print
                Name: Anna
                Waddy

            

    

    

    My
      Commission Expires: 12/22/2010AZUR
      HOLDINGS, INC.

    2006
      FLEXIBLE STOCK PLAN

    ------------------------

    

    TABLE
      OF
      CONTENTS

     

    

      
        	
                1.
                  NAME AND PURPOSE 

              	 
	
                1.1.
                  Name 

              	
                1

              
	
                1.2.
                  Purpose 

              	
                1

              
	 	
                 

              
	
                2.
                  DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION 

              	
                 

              
	
                2.1.
                  General Definitions 

              	
                1

              
	
                2.1.1.
                  Affiliate 

              	
                1

              
	
                2.1.2.
                  Agreement 

              	
                1

              
	
                2.1.3.
                  Azur 

              	
                 

              
	
                2.1.4.
                  Benefit 

              	
                1

              
	
                2.1.5.
                  Board of directors 

              	
                1

              
	
                2.1.6.
                  Cash Award 

              	
                1

              
	
                2.1.7.
                  Change of Control 

              	
                1

              
	
                2.1.8.
                  Code 

              	
                3

              
	
                2.1.9.
                  Committee 

              	
                3

              
	
                2.1.10.Common
                  stock 

              	
                3

              
	
                2.1.11
                  Consultant

              	
                3

              
	
                2.1.12.
                  Effective Date 

              	
                4

              
	
                2.1.13.
                  Employee 

              	
                4

              
	
                2.1.14.
                  Employer 

              	
                4

              
	
                2.1.15.
                  Exchange Act 

              	
                4

              
	
                2.1.16.
                  Fair Market Value 

              	
                4

              
	
                2.1.17.
                  Fiscal Year 

              	
                4

              
	
                2.1.18.
                  ISO 

              	
                4

              
	
                2.1.19.
                  NQSO 

              	
                4

              
	
                2.1.20.
                  Option 

              	
                4

              
	
                2.1.21.
                  Other Stock Based Award 

              	
                4

              
	
                2.1.22.
                  Parent 

              	
                4

              
	
                2.1.23.
                  Participant 

              	
                5

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                2.1.24.
                  Performance Based Compensation 

              	
                5

              
	
                2.1.25.
                  Performance Share 

              	
                5

              
	
                2.1.26.
                  Plan 

              	
                5

              
	
                2.1.27.
                  Reload Option 

              	
                5

              
	
                2.1.28.
                  Restricted Stock 

              	
                5

              
	
                2.1.29.
                  Rule 16b-3 

              	
                5

              
	
                2.1.30.
                  SEC 

              	
                5

              
	
                2.1.31.
                  Share 

              	
                5

              
	
                2.1.32.
                  SAR 

              	
                5

              
	
                2.1.33.
                  Subsidiary 

              	
                5

              
	
                2.2.
                  Other Definitions 

              	
                6

              
	
                2.3.
                  Conflicts 

              	
                6

              
	 	
                 

              
	
                3.
                  COMMON STOCK 

              	
                 

              
	
                3.1.
                  Number of Shares 

              	
                6

              
	
                3.2.
                  Reusage 

              	
                6

              
	
                3.3.
                  Adjustments 

              	
                6

              
	 	
                 

              
	
                4.
                  ELIGIBILITY 

              	
                 

              
	
                4.1.
                  Determined By Committee 

              	
                6

              
	
                4.2.
                  Consultants

              	
                7

              
	
                 

              	
                 

              
	
                5.
                  ADMINISTRATION 

              	
                 

              
	
                5.1.
                  Committee 

              	
                7

              
	
                5.2.
                  Authority 

              	
                7

              
	
                5.3.
                  Delegation 

              	
                8

              
	
                5.4.
                  Determination 

              	
                8

              
	 	
                 

              
	
                6.
                  AMENDMENT 

              	
                 

              
	
                6.1.
                  Power of Board of directors 

              	
                8

              
	
                6.2.
                  Limitation 

              	
                8

              
	 	
                 

              
	
                7.
                  TERM AND TERMINATION 

              	
                 

              
	
                7.1.
                  Term 

              	
                9

              
	
                7.2.
                  Termination 

              	
                9

              
	 	
                 

              
	
                8.
                  MODIFICATION OR TERMINATION OF BENEFITS 

              	
                 

              
	
                8.1.
                  General 

              	
                9

              
	
                8.2.
                  Committee's Right 

              	
                9

              
	 	
                 

              
	
                9.
                  CHANGE OF CONTROL 

              	
                 

              
	
                9.1.
                  Vesting and Payment 

              	
                9

              
	
                9.2.
                  Other Action 

              	
                10

              
	 	
                 

              
	
                10.
                  AGREEMENTS AND CERTAIN BENEFITS 

              	
                 

              
	
                10.1.
                  Grant Evidenced by Agreement 

              	
                10

              
	
                10.2.
                  Provisions of Agreement 

              	
                10

              
	
                10.3.
                  Transferability 

              	
                11

              
	 	
                 

              
	
                11.
                  REPLACEMENT AND TANDEM AWARDS 

              	
                 

              
	
                11.1.
                  Replacement 

              	
                11

              
	
                11.2.
                  Tandem Awards 

              	
                11

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 	
                 

              
	
                12.
                  PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING 

              	 
	
                12.1.
                  Payment 

              	
                11

              
	
                12.2.
                  Dividend Equivalents .

              	
                11

              
	
                12.3.
                  Deferral .

              	
                11

              
	
                12.4.
                  Withholding .

              	
                12

              
	 	
                 

              
	 	 
	
                13.
                  OPTIONS 

              	
                 

              
	
                13.1.
                  Types of Options 

              	
                12

              
	
                13.3.
                  Other Requirements for ISOs 

              	
                12

              
	
                13.4.
                  NQSOs 

              	
                12

              
	
                13.5.
                  Determination by Committee 

              	
                12

              
	 	
                 

              
	
                14.
                  SARS 

              	
                 

              
	
                14.1.
                  Grant and Payment 

              	
                12

              
	
                14.2.
                  Grant of Tandem Award 

              	
                12

              
	
                14.3.
                  ISO Tandem Award 

              	
                12

              
	
                14.4.
                  Payment of Award 

              	
                13

              
	 	
                 

              
	
                15.
                  ANNUAL LIMITATIONS 

              	
                 

              
	
                15.1.
                  Limitation on Options and SARs 

              	
                13

              
	
                15.2.
                  Computations 

              	
                13

              
	 	
                 

              
	
                16.
                  RESTRICTED STOCK AND PERFORMANCE SHARES 

              	
                 

              
	
                16.1.
                  Restricted Stock 

              	
                13

              
	
                16.2.
                  Cost of Restricted Stock 

              	
                13

              
	
                16.3.
                  Non-Transferability 

              	
                13

              
	
                16.4.
                  Performance Shares 

              	
                13

              
	
                16.5.
                  Grant 

              	
                14

              
	 	
                 

              
	
                17.
                  CASH 

              	
                 

              
	
                17.1.
                  Grant .

              	
                14

              
	
                17.2.
                  Rule 16b-3 

              	
                14

              
	
                17.3.
                  Restrictions 

              	
                14

              
	 	 
	
                18.
                  OTHER STOCK BASED AWARDS AND OTHER BENEFITS 

              	 
	
                18.1.
                  Other Stock Based Awards 

              	
                14

              
	
                18.2.
                  Other Benefits 

              	
                14

              
	 	
                 

              
	
                19.
                  MISCELLANEOUS PROVISIONS 

              	
                 

              
	
                19.1.
                  Underscored References 

              	
                14

              
	
                19.2.
                  Number and Gender 

              	
                14

              
	
                19.3.
                  Unfunded Status of Plan 

              	
                14

              
	
                19.4.
                  Termination of Employment 

              	
                15

              
	
                19.5.
                  Designation of Beneficiary 

              	
                15

              
	
                19.6.
                  Governing Law 

              	
                15

              
	
                19.7.
                  Purchase for Investment 

              	
                15

              
	
                19.8.
                  No Employment Contract 

              	
                15

              
	
                19.9.
                  No Effect on Other Benefits 

              	
                15

              

      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    AZUR
      HOLDINGS, INC.

    2006
      FLEXIBLE STOCK PLAN

    

    

    1.
      NAME
      AND PURPOSE

    

    1.1
      Name.
      The
      name of this Plan is the "Azur Holdings, Inc. 2006 Flexible Stock
      Plan."

    

    1.2
      Purpose.
      Azur
      Holdings, Inc. (“Azur”)
      has
      established this Plan to attract, retain, motivate and reward Employees and
      other individuals, to encourage ownership of Azur's common stock by Employees,
      Consultants and other individuals, and to promote and further the best interests
      of Azur by granting cash and other awards. This Plan is intended to be "Broadly
      Based" (as such term is used for purposes of rules promulgated by The National
      Association of Securities Dealers). 

    

    2.
      DEFINITIONS OF CERTAIN TERMS AND RULES OF CONSTRUCTION

    

    2.1
      General
      Definitions.
      The
      following words and phrases, when used in this Plan, unless otherwise
      specifically defined or unless the context clearly otherwise requires, shall
      have the following respective meanings:

     

        2.1.1
      Affiliate
      means
      a
      Parent or Subsidiary of Azur.

    

        2.1.2  Agreement means
      the
      document which evidences the grant of any Benefit under the Plan and which
      sets
      forth the Benefit and the terms, conditions and provisions of, and restrictions
      relating to, such Benefit. 

    

        2.1.3 
      Azur
      means
      Azur Holdings, Inc.

    

        2.1.4
      Benefit
      means
      any benefit granted to a Participant under the Plan.

    

        2.1.5
      Board
      of Directors
      means
      the board of directors of Azur.

    

        2.1.6
      Cash
      Award
      means a
      Benefit payable in the form of cash. 

    

        2.1.7
      Change
      of Control
      means
      the occurrence of any of the following:

     

        (a)
      An
      acquisition of any common stock or other voting securities of Azur entitled
      to
      vote generally for the election of directors (the "Voting
      Securities")
      by any
      "Person" or "Group" (as each such term is used for purposes of Section 13(d)
      or
      14(d) of the Exchange Act), immediately after which such Person or Group, as
      the
      case may be, has "Beneficial
      Ownership"
      (within
      the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than
      20%
      of the then outstanding shares of Common Stock or the combined voting power
      of
      Azur's then outstanding Voting Securities; provided,
      however,
      that in
      determining whether a “Change of Control” has occurred, shares of Common Stock
      or Voting Securities that are acquired in a Non-Control Acquisition (as defined
      below) shall not constitute an acquisition which would cause a Change of
      Control. A "Non-Control
      Acquisition"
      shall
      mean an acquisition by (i) Azur, (ii) any Subsidiary or (iii) any employee
      benefit plan maintained by or any Subsidiary, including a trust forming part
      of
      any such plan (an "Employee
      Benefit Plan");

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

        (b)
      When,
      during any 2-year period, individuals who, at the beginning of such 2-year
      period, constitute the Board of Directors (the "Incumbent
      Board of Directors"),
      cease
      for any reason to constitute at least 50% of the members of the Board of
      Directors; provided, however, that (i) if the election or nomination for
      election by Azur's shareholders of any new director was approved by a vote
      of at
      least two-thirds of the Incumbent Board of Directors, such new director shall,
      for purposes hereof, be deemed to be a member of the Incumbent Board of
      Directors, and (ii) no individual shall be deemed to be a member of the
      Incumbent Board of Directors if such individual initially assumed office as
      a
      result of either an actual or threatened "Election
      Contest"
      (as
      described in Rule 14a-11 promulgated under the Exchange Act) or other actual
      or
      threatened solicitation of proxies or consents by or on behalf of a Person
      or
      Group other than the Board of Directors (a "Proxy
      Contest")
      including by reason of any agreement intended to avoid or settle any Election
      Contest or Proxy Contest;

     

        (c)
      The
      consummation of:

    

        (i)
      a merger,
      consolidation or reorganization involving Azur or any Subsidiary, unless the
      merger, consolidation or reorganization is a Non-Control Transaction. A
      "Non-Control Transaction" shall mean a merger, consolidation or reorganization
      of Azur or any Subsidiary where: (A) the shareholders of Azur (or such
      Subsidiary, as the case may be) who immediately prior to the merger,
      consolidation or reorganization owned, directly or indirectly, at least 50%
      of
      the combined voting power of the outstanding Voting Securities of Azur or such
      Subsidiary immediately following such merger, consolidation or reorganization,
      own at least 50% of the combined voting power of the outstanding voting
      securities of the corporation resulting from such merger, consolidation or
      reorganization (the "Surviving
      Corporation"),
      in
      substantially the same proportions as their ownership of the Common Stock or
      Voting Securities, as the case may be, immediately prior to the merger,
      consolidation or reorganization; (B) the individuals who were members of the
      Incumbent Board of Directors immediately prior to the execution of the agreement
      providing for the merger, consolidation or reorganization constitute at least
      two-thirds of the members of the board of directors of the Surviving
      Corporation, or a corporation beneficially owning, directly or indirectly,
      a
      majority of the outstanding voting securities of the Surviving Corporation,
      and
      (C) no Person or Group, other than (1) Azur, (2) any Subsidiary, (3) any
      Employee Benefit Plan or (4) any other Person or Group who, immediately prior
      to
      the merger, consolidation or reorganization, had Beneficial Ownership of not
      less than 20% of the outstanding Voting Securities or Common Stock, has
      Beneficial Ownership of 20% or more of the combined voting power of the
      Surviving Corporation's outstanding voting securities or common
      stock;

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (d)
      A
      complete liquidation or dissolution of Azur; or

    

    (e)
      The
      sale or other disposition of all or substantially all of the assets of Azur
      to
      any Person (other than a transfer to a Subsidiary).

     

        Notwithstanding
      the
      foregoing, a “Change of Control” shall not be deemed to have occurred solely
      because any Person or Group (the "Subject
      Person")
      acquired Beneficial Ownership of more than the permitted amount of the then
      outstanding Voting Securities or Common Stock of Azur as a result of an
      acquisition of Voting Securities or Common Stock by Azur, which, by reducing
      the
      number of shares of Voting Securities or Common Stock then outstanding,
      increases the proportional number of shares beneficially owned by the Subject
      Person; provided, however, that if a Change of Control would have occurred
      (but
      for the operation of this sentence) as a result of the acquisition of Voting
      Securities or common stock by Azur, and after such acquisition by Azur, the
      Subject Person becomes the beneficial owner of any additional shares of Voting
      Securities or common stock, which increases the percentage of the then
      outstanding shares of Voting Securities or common stock beneficially owned
      by
      the Subject Person, then a Change of Control shall be deemed to have
      occurred

    

        2.1.8
      Code
      means
      The Internal Revenue Code of 1986, as amended. Any reference to the Code
      includes the regulations promulgated pursuant to the Code.

    

        2.1.9
      Committee
      means
      the committee described in Section 5.1.

    

        2.1.10
      Common
      Stock
      means
      Azur's common stock, par value $.0001 per share.

     

        2.1.11
      Consultant
      means a
      person engaged to provide consulting or advisory services (other than as an
      Employee or a member of the Board) to Azur or an Affiliate of Azur provided
      that
      the identity of such person, the nature of such services or the entity to which
      such services are provided would not preclude Azur from offering or selling
      securities to such person pursuant to the Plan in reliance on registration
      on a
      Registration Statement on Form S-8 under the Securities Act (a “Form
      S-8”).

     

    
      
        
        

      

      
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        2.1.12
      Effective
      Date
      means
      April 13, 2006.

    

        2.1.13
      Employee
      means
      any person employed by the Employer.

    

        2.1.14
      Employer
      means
      Azur and all Affiliates.

    

        2.1.15
      Exchange
      Act
      means
      the Securities Exchange Act of 1934, as amended.

    

        2.1.16
      Fair
      Market Value
      means
      with respect to a share of the Azur’s Common Stock on any date, the amount equal
      to (i) the closing bid price per share as published by a national securities
      exchange on which shares of Common Stock (or other units of the security) are
      traded (an "Exchange") on such date or, if there is no bid for Common Stock
      on
      such date, the bid price on such Exchange at the close of trading on the next
      earlier date or, (ii) if shares of Common Stock are not listed on a
      national securities exchange on such date, the closing bid price per share
      as
      published on the National Association of Securities Dealers Automatic Quotation
      System ("NASDAQ") National Market System if the shares are quoted on such system
      on such date, or (iii) the closing bid price in the over-the-counter market
      at
      the close of trading on such date if the shares are not traded on an exchange
      or
      listed on the NASDAQ National Market System, or (iv) if the Common Stock is
      not
      traded on a national securities exchange or in the over-the-counter market,
      the
      fair market value of a share of Common Stock on such date as determined in
      good
      faith by the Committee. 

    

        2.1.17
      Fiscal
      Year
      means
      the taxable year of Azur which is the calendar year.

    

        2.1.18
      ISO
      means an
      Incentive Stock Option as defined in Section 422 of the Code.

    

        2.1.19
      NQSO
      means a
      non-qualified stock Option, which is an Option that does not qualify as an
      ISO.

    

        2.1.20
      Option
      means an
      option to purchase Shares granted under the Plan.

    

        2.1.21
      Other
      Stock Based Award
      means an
      award under Section 18 that is valued in whole or in part by reference to,
      or
      otherwise based on, common stock.

    

        2.1.22
      Parent
      means
      any corporation (other than Azur or a Subsidiary) in an unbroken chain of
      corporations ending with Azur, if, at the time of the grant of an Option or
      other Benefit, each of the corporations (other than Azur) owns stock possessing
      50% or more of the total combined voting power of all classes of stock in one
      of
      the other corporations in such chain.

     

    
      
        
        

      

      
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        2.1.23
Participant
      means an
      individual who is granted a Benefit under the Plan. Benefits may be granted
      only
      to Employees, members of the Board of directors, employees and owners of
      entities which are not Affiliates but which have a direct or indirect ownership
      interest in an Employer or in which an Employer has a direct or indirect
      ownership interest, individuals who, and employees and owners of entities which,
      are customers and suppliers of an Employer, individuals who, and employees
      and
      owners of entities which, render services to an Employer, and individuals who,
      and employees and owners of entities, which have ownership or business
      affiliations with any individual or entity previously described.

    

        2.1.24
      Performance
      Based Compensation
      means
      compensation which meets the requirements of Section 162(m)(4)(C) of the Code.
      

    

        2.1.25
      Performance
      Share
      means a
      Share awarded to a Participant under Section 16.4 of this Plan.

    

        2.1.26
      Plan
      means
      this Azur Holdings, Inc. 2006 Flexible Stock Plan and all amendments and
      supplements thereto.

    

        2.1.27
      Reload
      Option
      means an
      Option to purchase the number of Shares used by a Participant to exercise an
      Option and to satisfy any withholding requirement incident to the exercise
      of
      such Option.

    

        2.1.28
      Restricted
      Stock
      means
      shares issued under Section 16.1 of this Plan.

    

        2.1.29
      Rule
      16b-3
      means
      Rule 16b-3 promulgated by the SEC under the Exchange Act, as the same may be
      amended from time to time, or any successor rule in effect from time to
      time.

    

        2.1.30
      SEC
      means
      the Securities and Exchange Commission.

    

        2.1.31
      Securities
      Act
      means
      the Securities Act of 1933, as amended.

    

        2.1.32
      Share
      means a
      share of Common Stock.

    

        2.1.33
      SAR
      means a
      stock appreciation right, which is the right to receive an amount equal to
      the
      appreciation, if any, in the Fair Market Value of a Share from the date of
      the
      grant of the right to the date of its payment.

    

        2.1.34
      Stock
      Award
      means
      any right granted under the Plan, including an Option, a stock bonus and a
      right
      to acquire restricted stock.

    

        2.1.35 Subsidiary
      means
      any corporation, other than Azur, in an unbroken chain of corporations beginning
      with Azur if, at the time of grant of an Option or other Benefit, each of the
      corporations, other than the last corporation in the unbroken chain, owns stock
      possessing 50% or more of the total combined voting power of all classes of
      stock in one of the other corporations in such chain.

     

    
      
        
        

      

      
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    2.2
      Other
      Definitions.
      In
      addition to the above definitions, certain words and phrases used in this Plan
      and any Agreement hereunder may be defined in other portions of this Plan or
      in
      such Agreement.

    

    2.3
      Conflicts.
      In the
      case of any conflict in the terms of this Plan relating to a Benefit, the
      provisions in the section of this Plan which specifically grants such Benefit
      shall control those in any other section of this Plan. In the case of any
      conflict between the terms of this Plan relating to a Benefit and the terms
      of
      an Agreement relating to a Benefit, the terms of this Plan shall
      control.

    

    3.
      COMMON
      STOCK

    

    3.1
      Number
      of Shares.
      The
      number of Shares which may be issued or sold or for which Options, SARs or
      Performance Shares may be granted under the Plan shall be Ten Million
      (10,000,000) Shares, plus an annual increase, effective as of the first day
      of
      each calendar year, commencing with 2007, equal to Ten Percent (10%) of the
      number of outstanding Shares as of the first day of such calendar year, but
      in
      no event more than Twenty Million (20,000,000) Shares in the aggregate. Such
      Shares may be authorized, but unissued Shares, Shares held in the treasury,
      or
      both. The full number of Shares available may be used for any type of Option
      or
      other Benefit.

    

    3.2
      Reuse
      of Shares.
      If an
      Option or SAR expires or is terminated, surrendered, or canceled without having
      been fully exercised, if Restricted Shares or Performance Shares are forfeited,
      or if any other grant results in any Shares not being issued, the Shares covered
      by such Option or SAR, grant of Restricted Shares, Performance Shares or other
      grant, as the case may be, shall again be available for use under the Plan.
      Any
      Shares which are used as full or partial payment to Azur upon exercise of an
      Option or for any other Benefit that requires a payment to Azur shall be
      available for purposes of the Plan.

    

    3.3
      Adjustments.
      If
      there is any change in the Common Stock by reason of any stock dividend,
      spin-off, split-up, spin-out, recapitalization, merger, consolidation,
      reorganization, combination or exchange of shares, or otherwise, the number
      of
      SARs and number and class of shares available for Options and grants of
      Restricted Stock, Performance Shares and Other Stock Based Awards and the number
      of Shares subject to outstanding Options, SARs, grants of Restricted Stock
      which
      are not vested, grants of Performance Shares which are not vested, and Other
      Stock Based Awards, and the price thereof, as applicable, shall be appropriately
      adjusted by the Committee.

    

    4.
      ELIGIBILITY

    

    4.1
      Determined
      By Committee.
      The
      Participants and the Benefits they receive under this Plan shall be determined
      solely by the Committee. In making its determinations, the Committee shall
      consider past, present and expected future contributions of Participants and
      potential Participants to the Employer, including, without limitation, the
      performance of, or the refraining from the performance of, services. Unless
      specifically provided otherwise herein, all determinations of the Committee
      in
      connection with this Plan or an Agreement shall be made in its sole
      discretion.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    4.2
      Consultants.

    

        (i)
      A
      Consultant shall not be eligible for the grant of a Stock Award if, at the
      time
      of grant, a Form S-8 is not available to register either the offer or the sale
      of the Shares to such Consultant because of the nature of the services that
      the
      Consultant is providing to the Company, or because the Consultant is not a
      natural person, or as otherwise provided by the rules governing the use of
      Form
      S-8, unless the Company determines both (i) that such grant (A) shall be
      registered in another manner under the Securities Act (e.g., on a Form S-3
      Registration Statement) or (B) does not require registration under the
      Securities Act in order to comply with the requirements of the Securities Act,
      if applicable, and (ii) that such grant complies with the securities laws of
      all
      other relevant jurisdictions.

    

        (ii)
      Form S-8
      generally is available to consultants and advisors only if (i) they are natural
      persons; (ii) they provide bona fide services to the issuer, its parents, its
      majority-owned subsidiaries; and (iii) the services are not in connection with
      the offer or sale of securities in a capital-raising transaction, and do not
      directly or indirectly promote or maintain a market for the issuer's
      securities.

    

    5.
      ADMINISTRATION

    

    5.1
      Committee.
      This
      Plan shall be administered by the Committee. The Committee shall consist of
      the
      Board of Directors, unless the Board of Directors appoints a Committee of two
      or
      more but less than all of the Board of Directors. If the Committee does not
      include the entire Board of Directors, then it shall serve at the pleasure
      of
      the entire Board of Directors, which may from time to time appoint members
      in
      substitution for members previously appointed and fill vacancies, however
      caused, in the Committee. The Committee may select one of its members as its
      Chairman and shall hold its meetings at such times and places as it may
      determine. A majority of its members shall constitute a quorum. All
      determinations of the Committee made at a meeting at which a quorum is present
      shall be made by a majority of its members present at the meeting. Any decision
      or determination reduced to writing and signed by a majority of the members
      shall be fully as effective as if it had been made by a majority vote at a
      meeting duly called and held.

    

    5.2
      Authority.
      Subject
      to the terms of this Plan, the Committee shall have discretionary authority
      to:

    

    (a)
      determine the individuals to whom Benefits are granted, the type and amounts
      of
      Benefits to be granted and the date of issuance and duration of all such
      grants;

    

    (b)
      determine the terms, conditions and provisions of, and restrictions relating
      to,
      each Benefit granted;

    

    (c)
      interpret and construe this Plan and all Agreements;

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (d)
      prescribe, amend and rescind rules and regulations of Azur relating to this
      Plan;

    

    (e)
      determine the content and form of all Agreements;

    

    (f)
      determine all questions relating to Benefits under this Plan;

    

    (g)
      maintain accounts, records and ledgers relating to Benefits;

    

    (h)
      maintain records concerning its decisions and proceedings;

    

    (i)
      employ agents, attorneys, accountants or other persons for such purposes as
      the
      Committee considers necessary or desirable;

    

    (j)
      take,
      at any time, any action described in Section 9.1 or permitted by Section 9.2(a),
      irrespective of whether any Change of Control has occurred or is
      imminent;

    

    (k)
      determine, except to the extent otherwise provided in this Plan, whether and
      the
      extent to which Benefits under this Plan will be structured to conform to the
      requirements applicable to Performance-Based Compensation, and to take such
      action, establish such procedures, and impose such restrictions at the time
      such
      Benefits are granted as the Committee determines to be necessary or appropriate
      to conform to such requirements; and

    

    (l)
      do
      and perform all acts which it may deem necessary or appropriate for the
      administration of this Plan and carry out the purposes of this
      Plan.

    

    5.3
      Delegation.
      Except
      as required by Rule 16b-3 with respect to grants of Options, Stock Appreciation
      Awards, Performance Shares, Other Stock Based Awards, or other Benefits to
      individuals who are subject to Section 16 of the Exchange Act or as otherwise
      required for compliance with Rule 16b-3 or other applicable law, the Committee
      may delegate all or any part of its authority under this Plan to any Employee,
      Employees or committee.

    

    5.4
      Determinations
      of the Committee.
      All
      determinations of the Committee shall be final.

    

    6.
      AMENDMENT

    

    6.1
      Power
      of Board of Directors.
      Except
      as hereinafter provided, the Board of Directors shall have the sole right and
      power to amend this Plan at any time and from time to time.

     

    
      
        
        

      

      
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    6.2
      Limitation.
      The
      Board of Directors may not amend this Plan without approval of the shareholders
      of Azur:

    

    (a)
      in a
      manner which would cause Options which are intended to qualify as ISOs to fail
      to qualify;

    

    (b)
      in a
      manner which would cause this Plan to fail to meet the requirements of Rule
      16b-3; or

    

    (c)
      in a
      manner which would violate applicable law.

    

    

    7.
      TERM
      AND TERMINATION

    

    7.1
      Term.
      This
      Plan shall commence as of the Effective Date and, subject to the terms of the
      Plan, including those requiring approval by the shareholders of Azur and those
      limiting the period over which ISOs or any other Benefits may be granted, shall
      continue in full force and effect until terminated.

    

    7.2
      Termination.
      This
      Plan may be terminated at any time by the Board of Directors.

    

    8.
      MODIFICATION OR TERMINATION OF BENEFITS

    

    8.1
      General.
      Subject
      to the provisions of Section 8.2, the amendment or termination of this Plan
      shall not adversely affect a Participant's right to any Benefit granted prior
      to
      such amendment or termination.

    

    8.2
      Committee's
      Right.
      Any
      Benefit granted may be converted, modified, forfeited or canceled, in whole
      or
      in part, by the Committee if and to the extent permitted in this Plan or any
      applicable Agreement or with the consent of the Participant to whom such Benefit
      was granted. Except as may be provided in an Agreement, the Committee may,
      in
      its sole discretion, in whole or in part, waive any restrictions or conditions
      applicable to, or accelerate the vesting of, any Benefit.

    

    9.
      CHANGE
      OF CONTROL

    

    9.1
      Vesting
      and Payment.
      In the
      event of a Change of Control:

    

    (a)
      all
      outstanding Options shall become fully exercisable, except to the extent that
      the right to exercise the Option is subject to restrictions established in
      connection with an SAR that is issued in tandem with the Option;

    

    (b)
      all
      outstanding SARs shall become immediately payable, except to the extent that
      the
      right to exercise the SAR is subject to restrictions established in connection
      with an Option that is issued in tandem with the SAR;

    

    (c)
      all
      Shares of Restricted Stock shall become fully vested;

     

    
      
        
        

      

      
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    (d)
      all
      Performance Shares shall be deemed to be fully earned and shall be paid out
      in
      such manner as determined by the Committee; and

    

    (e)
      all
      Cash Awards, Other Stock Based Awards and other Benefits shall become fully
      vested and/or earned and paid out in such manner as is determined by the
      Committee.

    

    9.2
      Other
      Action.
      In the
      event of a Change of Control, the Committee, in its sole discretion, may, in
      addition to the provisions of Section 9.1 above and to the extent not
      inconsistent therewith:

    

    (a)
      provide for the purchase of any Benefit for an amount of cash equal to the
      amount which could have been attained upon the exercise or realization of such
      Benefit;

    

    (b)
      make
      such adjustment to the Benefits then outstanding as the Committee deems
      appropriate to reflect such transaction or change; and/or

    

    (c)
      cause
      the Benefits then outstanding to be assumed, or new Benefits substituted
      therefor, by the surviving corporation in such change.

    

    

    10.
      AGREEMENTS AND CERTAIN BENEFITS

    

    10.1
      Grant
      Evidenced by Agreement.
      The
      grant of any Benefit under this Plan may be evidenced by an Agreement which
      shall describe the specific Benefit granted and the terms and conditions of
      the
      Benefit. The granting of any Benefit shall be subject to, and conditioned upon,
      the recipient's execution of any Agreement required by the Committee. Except
      as
      otherwise provided in an Agreement, all capitalized terms used in the Agreement
      shall have the same meaning as in this Plan and the Agreement shall be subject
      to all of the terms of this Plan.

    

    10.2
      Provisions
      of Agreement.
      Each
      Agreement shall contain such provisions that the Committee shall determine
      to be
      necessary, desirable or appropriate for the Benefit granted which may include,
      but not necessarily be limited to, the following with respect to any Benefit:
      description of the type of Benefit; the Benefit's duration; its transferability;
      if an Option, the exercise price, the exercise period and the person or persons
      who may exercise the Option; the effect upon such Benefit of the Participant's
      death, disability, changes of duties or termination of employment; the Benefit's
      conditions; when, if, and how any Benefit may be forfeited, converted into
      another Benefit, modified, exchanged for another Benefit, or replaced; and
      the
      restrictions on any Shares purchased or granted under this Plan.

     

    
      
        
        

      

      
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    10.3
      Transferability.
      Unless
      otherwise specified in an Agreement or permitted by the Committee, each Benefit
      granted shall be not transferable other than by will or the laws of descent
      and
      distribution and shall be exercisable during a Participant's lifetime only
      by
      him or her.

    

    11.
      REPLACEMENT AND TANDEM AWARDS

    

    11.1
      Replacement.
      The
      Committee may permit a Participant to elect to surrender a Benefit in exchange
      for a new Benefit.

    

    11.2
      Tandem
      Awards.
      Awards
      may be granted by the Committee in tandem; however, no Benefit may be granted
      in
      tandem with an ISO, except SARs.

    

    12.
      PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING

    

    12.1
      Payment.
      Upon
      the exercise of an Option or, in the case of any other Benefit that requires
      a
      payment by a Participant to Azur, the amount due Azur is to be
      paid:

    

    (a)
      in
      cash, including by means of a so-called "cashless exercise" of an
      Option;

    

    (b)
      by
      the surrender of all or part of a Benefit (including the Benefit being
      exercised);

    

    (c)
      by
      the tender to Azur of Shares owned by the optionee and registered in his or
      her
      name having a Fair Market Value equal to the amount due to Azur;

    

    (d)
      in
      other property, rights and credits deemed acceptable by the Committee, including
      the Participant's promissory note;

    

    (e)
      by
      any combination of the payment methods specified in (a), b), (c) and (d)
      above.

    

    Notwithstanding,
      the foregoing, any method of payment other than (a) may be used only with the
      consent of the Committee or if and to the extent so provided in an Agreement.
      The proceeds of the sale of Shares purchased pursuant to an Option and any
      payment to Azur for other Benefits shall be added to the general funds of Azur
      or to the Shares held in treasury, as the case may be, and used for the
      corporate purposes of Azur, as the Board of Directors shall
      determine.

    

    12.2
      Dividend
      Equivalents.
      Grants
      of Benefits in Shares or Share equivalents may include dividend equivalent
      payments or dividend credit rights.

    

    12.3
      Deferral.
      The
      right to receive any Benefit under this Plan may, at the request of the
      Participant, be deferred for such period and upon such terms as the Committee
      shall determine, which may include crediting of interest on deferrals of cash
      and crediting of dividends on deferrals denominated in Shares.

     

    
      
        
        

      

      
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    12.4
      Withholding
      Tax.
      Azur
      may, at the time any distribution is made under this Plan, whether in cash
      or in
      Shares, or at the time any Option is exercised, withhold from such distribution
      or Shares issuable upon the exercise of an Option any amount necessary to
      satisfy Federal, state and local income and/or other tax withholding
      requirements with respect to such distribution or exercise of such Options.
      In
      addition, the Committee or Azur may require a participant to tender to Azur
      cash
      and/or Shares in the amount necessary to comply with any such withholding
      requirements.

    

    13.
      OPTIONS

    

    13.1
      Types
      of Options.
      It is
      intended that both ISOs and NQSOs, which may be Reload Options, may be granted
      by the Committee under this Plan.

    

    13.2
      Grant
      of ISOs and Option Price.
      Each
      ISO must be granted to an Employee and exercised within ten (10) years from
      the
      earlier of: (i) the date of adoption by the Board of Directors, or (ii) the
      Effective Date. The purchase price for Shares under any ISO shall be no less
      than the Fair Market Value of the Shares at the time the Option is
      granted.

    

    13.3
      Other
      Requirements for ISOs.
      The
      terms of each Option which is intended to qualify as an ISO shall meet all
      requirements of Section 422 of the Code.

     

    13.4
      NQSOs.
      The
      terms of each NQSO shall provide that such Option will not be treated as an
      ISO.
      The purchase price for Shares under any NQSO shall be no less than 85% of the
      Fair Market Value of the Shares at the time the Option is granted.

    

    13.5
      Determination
      by Committee.
      Except
      as otherwise provided in Section 13.1 through Section 13.4, the terms of all
      Options shall be determined by the Committee.

    

    14.
      SARS

    

    14.1
      Grant
      and Payment.
      The
      Committee may grant SARs. Upon electing to receive payment of a SAR, a
      Participant shall receive payment in cash, in Shares or in any combination
      of
      cash and Shares, as the Committee shall determine.

    

    14.2
      Grant
      of Tandem Award.
      The
      Committee may grant SARs in tandem with an Option, in which case the exercise
      of
      the Option shall cause a correlative reduction in the value of the SARs which
      were granted in tandem with the Option; and the payment of SARs shall cause
      a
      correlative reduction of the Shares issuable under such Option.

    

    14.3
      ISO
      Tandem Award.
      When
      SARs are granted in tandem with an ISO, the SARs shall have such terms and
      conditions as shall be required for the ISO to qualify as an ISO.

     

    
      
        
        

      

      
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    14.4
      Payment
      of Award.
      SARs
      shall be paid by Azur to a Participant, to the extent payment is elected by
      the
      Participant (and is otherwise due and payable), as soon as practicable after
      the
      date on which such election is made.

    

    15.
      ANNUAL LIMITATIONS

    

    15.1
      Limitation
      on Options and SARs.
      The
      number of (a) Shares covered by Options where the purchase price is no less
      than
      the Fair Market Value of the Shares on the date of grant plus (b) SARs which
      may
      be granted to any Participant in any Fiscal Year shall not exceed Five Million
      (5,000,000).

    

    15.2
      Computations.
      For
      purposes of Section 15.1: (i) Shares covered by an Option that is canceled
      shall
      count against the maximum, and, if the exercise price under an Option is
      reduced, the transaction shall be treated as a cancellation of the Option and
      a
      grant of a new Option; and (ii) SARs covered by a grant of SARs that is canceled
      shall count against the maximum, and, if the Fair Market Value of a Share on
      which the appreciation under a grant of SARs will be calculated is reduced,
      the
      transaction will be treated as a cancellation of the SARs and a new grant of
      SARs.

    

    16.
      RESTRICTED STOCK AND PERFORMANCE SHARES

    

    16.1
      Restricted
      Stock.
      The
      Committee may grant Benefits in Shares available under Section 3.1 of this
      Plan
      as Restricted Stock. Shares of Restricted Stock shall be issued and delivered
      at
      the time of the grant or as otherwise determined by the Committee, but shall
      be
      subject to forfeiture unless provided otherwise in the applicable Agreement
      or
      this Plan. Each certificate representing Shares of Restricted Stock shall bear
      a
      legend referring to this Plan and the risk of forfeiture of the Shares and
      stating that such Shares are nontransferable until all restrictions have been
      satisfied and such legend has been removed. At the discretion of the Committee,
      the grantee may or may not be entitled to full voting and dividend rights with
      respect to all shares of Restricted Stock from the date of grant.

    

    16.2
      Cost
      of Restricted Stock.
      Unless
      otherwise determined by the Committee, grants of Shares of Restricted Stock
      shall be made at a per Share cost to the Participant equal to the aggregate
      par
      value of such Shares.

    

    16.3
      Non-Transferability.
      Shares
      of Restricted Stock shall not be transferable until after the removal of the
      legend referred to in Section 16.1 with respect to such Shares.

    

    16.4
      Performance
      Shares.
      Performance Shares are the right of an individual to whom a grant of such Shares
      is made to receive Shares or cash equal to the Fair Market Value of such Shares
      at a future date in accordance with the terms and conditions of such grant.
      The
      terms and conditions of Performance Shares shall be determined by the Committee,
      in its sole discretion, but generally are expected to be based substantially
      upon the attainment of targeted profit and/or performance
      objectives.

     

    
      
        
        

      

      
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    16.5
      Grant.
      The
      Committee may grant an award of Performance Shares. The number of Performance
      Shares and the terms and conditions of the grant shall be set forth in the
      applicable Agreement.

    

    17.
      CASH
      AWARDS 

    

    17.1
      Grant.
      The
      Committee may grant Cash Awards at such times and (subject to Section 17.2)
      in
      such amounts as it deems appropriate.

    

    17.2
      Rule
      16b-3.
      The
      amount of any Cash Award in any Fiscal Year to any Participant who is subject
      to
      Section 16 of the Exchange Act shall not exceed the greater of $100,000 or
      100%
      of his or her cash compensation (excluding any Cash Award under this Section
      17.2) for such Fiscal Year.

    

    17.3
      Restrictions.
      Cash
      Awards may be subject or not subject to conditions (such as an investment
      requirement), restricted or non-restricted, vested or subject to forfeiture
      and
      may be payable currently or in the future or both.

    

    18.
      OTHER
      STOCK BASED AWARDS AND OTHER BENEFITS

    

    18.1
      Other
      Stock Based Awards.
      The
      Committee shall have the right to grant other Stock Based Awards which may
      include, without limitation: (i) the grant of Shares based upon certain
      conditions; (ii) the payment of cash based on the performance of the Common
      Stock; (iii) and the grant of securities convertible into Shares.

    

    18.2
      Other
      Benefits.
      The
      Committee shall have the right to provide other types of Benefits under this
      Plan in addition to those specifically listed if the Committee believes that
      such Benefits would further the purposes for which this Plan was
      established.

    

    19.
      MISCELLANEOUS PROVISIONS

    

    19.1
      Underscored
      References.
      The
      underscored references contained in this Plan are included only for convenience,
      and they shall not be construed as a part of this Plan or in any respect
      affecting or modifying its provisions.

    

    19.2
      Number
      and Gender.
      The
      masculine and neuter, wherever used in this Plan, shall refer to either the
      masculine, neuter or feminine; and, unless the context otherwise requires,
      the
      singular shall include the plural and the plural the singular.

     

    19.3
      Unfunded
      Status of Plan.
      This
      Plan is intended to constitute an "unfunded" plan for incentive and deferred
      compensation. With respect to any payments or deliveries of Shares not yet
      made
      to a Participant by Azur, nothing contained herein shall give any rights that
      are greater than those of a general creditor of Azur. The Committee may
      authorize the creation of trusts or other arrangements to meet the obligations
      created under the Plan to deliver Shares or payments hereunder consistent with
      the foregoing.

     

    
      
        
        

      

      
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    19.4
      Termination
      of Employment.
      If the
      employment of a Participant by Azur terminates for any reason, except as
      otherwise provided in an Agreement, all unexercised, deferred, and unpaid
      Benefits may be exercisable or paid only in accordance with the rules
      established by the Committee. These rules may provide, as the Committee may
      deem
      appropriate, for the expiration, forfeiture, continuation, or acceleration
      of
      the vesting of all or part of the Benefits.

    

    19.5
      Designation
      of Beneficiary.
      A
      Participant may file with the Committee a written designation of a beneficiary
      or beneficiaries (subject to such limitations as to the classes and number
      of
      beneficiaries and contingent beneficiaries as the Committee may from time to
      time prescribe) to exercise, in the event of the death of the Participant,
      an
      Option, or to receive, in such event, any Benefits. The Committee reserves
      the
      right to review and approve beneficiary designations. A Participant may from
      time to time revoke or change any such designation of beneficiary and any
      designation of beneficiary under this Plan shall be controlling over any other
      disposition, testamentary or otherwise; provided,
      however,
      that if
      the Committee shall be in doubt as to the right of any such beneficiary to
      exercise any Option or to receive any Benefit, the Committee may determine
      to
      recognize only an exercise by the legal representative of the recipient, in
      which case Azur, the Committee and the members thereof shall not be under any
      further liability to anyone.

    

    19.6
      Governing
      Law.
      This
      Plan shall be construed and administered in accordance with the laws of the
      State of Delaware without regard to any conflicts of laws
      principles.

    

    19.7
      Purchase
      for Investment.
      The
      Committee may require each person purchasing Shares pursuant to an Option or
      other award under the Plan to represent to and agree with Azur in writing that
      such person is acquiring the Shares for investment and without a view to
      distribution or resale. The certificates for such Shares may include any legend
      which the Committee deems appropriate to reflect any restrictions on transfer.
      All certificates for Shares delivered under this Plan shall be subject to such
      stop transfer orders and other restrictions as the Committee may deem advisable
      under applicable laws, rules and regulations, and the Committee may cause one
      or
      more legend(s) to be put on any such certificates to make appropriate
      reference(s) to such restrictions.

    

    19.8
      No
      Employment Contract.
      Neither
      the adoption of this Plan nor the grant of any Benefit hereunder shall confer
      upon any Employee any right to continued employment by the Employer, nor shall
      this Plan or any Benefit hereunder interfere in any way with the right of the
      Employer to terminate the employment of any of its Employees at any
      time.

    

    19.9
      No
      Effect on Other Benefits.
      The
      receipt of Benefits under this Plan shall have no effect on any benefits to
      which a Participant may be entitled from the Employer, under another plan or
      otherwise, or preclude a Participant from receiving any such
      benefits.

     

    
      
        
        

      

      
        15

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