Document:

Amended & Restated Security Agreement dated July 29, 2003

 Exhibit 10.2 
  
 AMENDED AND RESTATED SECURITY AGREEMENT 
  
 THIS SECURITY AGREEMENT (“Agreement”) is made and entered into as of the 29th day of July, 2003 by
Healthcare Holdings, Inc., a Nevada corporation (“Debtor”), in favor of LTC Properties, Inc., a Maryland corporation (“Secured Party”), with reference to the following facts and circumstances. 
  
 A. Secured Party has agreed to amend and restate a Promissory Note (the
“Note”) to Debtor, which Note is evidenced by that certain Amended and Restated Promissory Note of even date herewith executed by Debtor in favor of Secured Party (the “Note”). 
  
 B. To secure its obligations under the Loan, Debtor has agreed, among other
things, to grant Secured Party a continuing security interest in all assets of Maker, whether heretofore or hereafter acquired. 
  
 NOW, THEREFORE, IN CONSIDERATION of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Debtor and Secured Party hereby agree as follows: 
  
 1. Grant
of Security Interest. As security for Debtor’s due and punctual performance of the Obligations (as hereinafter defined), Debtor hereby pledges with and delivers to Secured Party the Collateral (as hereinafter defined), and grants, assigns,
transfers and conveys to Secured Party a continuing security interest in all of Debtor’s right, title and interest in and to the Collateral. 
  
 2. Obligations. This Agreement, and Debtor’s pledge of and grant to Secured Party of a security interest in and to the Collateral, is made to
secure: (i) due and punctual performance of Debtor’s obligation to make any and all payments when and as due under the Note, and any other note or instrument executed by Debtor and payable to Secured Party which recites that it is secured
hereby, including any and all amendments, modifications, renewals, extensions, substitutions or replacements hereof or thereof, including any future advances which are made pursuant to the terms of the Note or any such note or instrument and the
performance and discharge of each and every obligation of Debtor set forth in the Note or any such note or notes; (ii) payment of all other sums, with interest thereon, herein or in the Note, or any such note or notes, or any part thereof; (iii)
due, prompt and complete observance and performance of each and every obligation, covenant and agreement of Debtor contained herein, in the Note, or in any other instrument executed by Debtor for the purpose of further securing the indebtedness
evidenced by the Note, or such note or notes, or any part thereof (collectively, the “Obligations”). 
  
 3. Collateral. As used herein, the term “Collateral” shall collectively and severally mean all assets of Maker, including, but not
limited to the following: 
  
 (a) 1,452,794 shares of Assisted
Living Concepts, Inc. (“ALF”) common stock. 
  
 (b)
Accounts. All accounts, general intangibles, chattel paper, instruments (as defined in the California Uniform Commercial Code (the “Code”)), and other obligations of any kind, now owned or held or hereafter acquired by the Debtor,
including, without limitation, insurance claims, insurance settlement proceeds, tax refund claims and tax refunds arising out of or in connection with the sale or lease of goods or the rendering of services, and all rights in and to all security
agreements, leases, and other contracts securing or otherwise relating to any such accounts, general intangibles, chattel paper, instruments or obligations, and all books and records relating to any of the foregoing (any and all of the foregoing
being the “Accounts”); 
  
 (c)
Instruments. All notes and other instruments and any instrument which constitutes a part of chattel paper, and other evidences of indebtedness in which the Debtor now or hereafter has any interest, to the extent of that interest; 

 
 (d) Documents. All documents (as defined in the Code) in which the
Debtor now or hereafter has any interest, to the extent of that interest; 
  

 1 

 (e) Chattel Paper. All chattel paper in which the Debtor now or hereafter has any interest;

  
 (f) General Intangibles. All General Intangibles (as
hereinafter defined) in which the Debtor now or hereafter has any interest, to the extent of that interest. “General Intangibles” means any “general intangibles,” as such term is defined in the Code, and shall
include, without limitation, (i) all patents, patent applications, trademarks, trademark registrations, trade names and trademark applications; (ii) license agreements with any other party, whether the Debtor is a licensor or licenses under any such
license agreement, and the right to prepare for sale, sell and advertise for sale all inventory now or hereafter covered by such licenses; (iii) all of the Debtor’s books, records and files, including computer software and tapes and all other
forms of electronic information storage; (iv) copyrights and other rights in intellectual property; (v) interests in partnerships, joint ventures and other business associations; (vi) licenses and permits; (vii) trade secrets, proprietary or
confidential information, customer lists, inventions (whether or not patented or patentable), technical information, procedures, designs, knowledge, know-how, software, data bases, data, skill, expertise, experience, processes, models, drawings,
materials and records, and goodwill; (viii) claims in or under insurance policies, including unearned premiums; (ix) uncertificated securities; (x) deposit accounts; (xi) rights to receive tax refunds and other payments; (xii) rights of
indemnification; and (xiii) all of the Debtor’s rights under any warranties or guaranties of any kind, including equipment, machinery or services; 
  
 (g) Contracts. All of the Debtor’s rights under all contracts undertakings or agreements (other than rights evidenced by chattel paper,
documents or instruments) in or under which the Debtor may now or hereafter have any right, title or interest, including, without limitation, with respect to an Account, any agreement relating to the terms of payment or the terms of performance
thereof; 
  
 (h) Money and Other Personal Property. All
money (as defined in the Code) and all other goods and personal property in which the Debtor has any interest, to the extent of that interest, whether now or hereafter owned or existing, leased, consigned by or to or acquired by the Debtor and
wherever located; and 
  
 (i) Stock. All of the outstanding
capital stock of Debtor and its subsidiaries now formed or to be formed. 
  
 (j) Proceeds and Products. All proceeds and products of the foregoing (including, without limitation, cash proceeds and noncash proceeds resulting from the sale or other voluntary or involuntary disposition
thereof or any other realization in respect thereof) and including, but not limited to, all property of any type that is acquired with any cash proceeds, and all guarantees, insurance and rights against sureties the Debtor may have in connection
therewith and all proceeds and products relating thereto or therefrom, and all the Debtor’s right, title and interest in and to additions, accessions, replacements and substitutions to and for the foregoing, and all documents, ledger sheets and
files of the Debtor relating thereto. The term “proceeds” as used herein shall include, without limitation, all accounts, chattel paper, deposit accounts, instruments, equipment, inventory, documents, general intangibles and other
proceeds that arise from the sale, lease, transfer or other use or disposition of any kind of any of the Collateral described in the foregoing paragraphs (a) through (j), inclusive, or proceeds, and all proceeds of any type described above acquired
with cash proceeds. 
  
 4. Delivery of Collateral.
Concurrently with the execution and delivery of this Agreement, Debtor shall deliver to Secured Party debentures and all stock certificates representing the Collateral set forth in Section 3 above. Debtor agrees to deliver to Secured Party stock
certificates representing all the outstanding shares of any subsidiaries owned by Debtor and formed hereafter. 
  
 5. Declaration of Trust. If Debtor shall become entitled to receive or shall receive any goods, instruments, documents, accounts, general
intangibles or other property of any kind or nature delivered to Debtor on account of or in connection with Debtor’s ownership of the Collateral, Debtor shall accept and hold the same as Secured Party’s agent, in trust for Secured Party,
and shall forthwith, without notice or demand, endorse, transfer and deliver the same to Secured Party, accompanied, where necessary or appropriate, by assignments duly executed in blank, to be held by Secured Party as part of the Collateral.

  
 6. Powers of Secured Party. Debtor appoints Secured
Party its true attorney-in-fact to perform any of the following powers, which are coupled with an interest, are irrevocable until termination of this Agreement and 
  

 2 

 may be exercised from time to time by Secured Party’s officers, employees or agents, or any of them, whether or not
an Event of Default has occurred: (i) to liquidate any certificate of deposit pledged to Secured Party hereunder prior to its maturity date and to apply the proceeds thereof to payment of the Obligations or hold such proceeds as part of the
Collateral, notwithstanding the fact that such liquidation may give rise to penalties for early withdrawals of funds; (ii) to sell, exchange or otherwise dispose of any portion of the Collateral if Secured Party deems such transaction reasonably
necessary to preserve the value of its security interest, and to apply the proceeds thereof to payment of the Obligations, to hold such proceeds as part of the Collateral or to use such proceeds to purchase similar items of Collateral that Secured
Party, in its sole discretion, deems necessary or advisable to preserve the value of its security interest; (iii) to notify any person obligated on any security, instrument or other document subject to this Agreement of Secured Party’s rights
hereunder; (iv) to collect by legal proceedings or otherwise all dividends, interest, principal or other sums now or hereafter payable upon or on account of the Collateral; (v) to enter into any extension, reorganization, deposit, merger or
consolidation agreement, or any other agreement relating to or affecting the Collateral or proceeds, and in connection therewith to deposit or surrender control of the Collateral, accept other property in exchange for the Collateral, and do and
perform such acts and things as Secured Party may deem proper, and any money or property received in exchange for the Collateral may be applied to the Obligations or held by Secured Party under this Agreement; (vi) to make any compromise or
settlement Secured Party deems necessary, desirable or proper in respect of the Collateral; (vii) to insure, process and preserve the Collateral; and (viii) to perform any obligation of Debtor under this Agreement, in Debtor’s name or
otherwise. To effect the purposes of this Agreement, or otherwise upon instructions of Debtor, Secured Party may cause the Collateral to be transferred to Secured Party’s name or the name of Secured Party’s nominee. 
  
 7. Secured Party’s Care and Delivery of Collateral. Secured
Party’s obligation with respect to Collateral in its possession shall be strictly limited to the duty to exercise reasonable care in the custody and preservation of such Collateral, and such duty shall not include any obligation to ascertain or
to initiate any action with respect to or to inform Debtor of maturity dates, conversion, call, or exchange rights, or offers to purchase the Collateral, or any similar matters, notwithstanding the Secured Party’s knowledge of the same. Secured
Party shall have no duty to take any steps necessary to preserve the rights of Debtor against prior parties, or to initiate any action to protect against the possibility of a decline in the market value of the Collateral. Secured Party shall not be
obligated to take any action with respect to the Collateral requested by Debtor unless such request is made in writing, and Secured Party determines, in its sole discretion, that the requested actions would not unreasonably jeopardize the value of
the Collateral as security for the Obligations. Secured Party may at any time deliver the Collateral, or any part thereof, to Debtor, and the receipt thereof by Debtor shall be a complete and full acquittance for the Collateral and proceeds so
delivered, and Secured Party shall thereafter be discharged from any liability or responsibility therefor. 
  
 8. Representations and Warranties. Debtor represents and warrants to Secured Party as follows: 
  
 (a) Debtor is a Nevada corporation, duly incorporated, validly existing and
in good standing under the laws of the State of the State of Nevada. Debtor is qualified to do business as a foreign corporation in every state in which Debtor is required to be so qualified. 
  
 (b) Debtor has all requisite capacity and power to execute, deliver and
perform its obligations under this Agreement. This Agreement has been duly and validly executed and delivered by Debtor, and constitutes a valid and binding obligation of Debtor, enforceable in accordance with its terms. 
  
 (c) Debtor owns the Collateral free and clear of all liens, claims,
encumbrances, security interests or equities, other than the security interest created hereby. 
  
 (d) Debtor has not sold, transferred, assigned or conveyed the Collateral, or any portion thereof, to any person other than Secured Party. 
  

 3 

 9. Covenants and Agreements of Debtor. Debtor covenants and agrees with Secured Party that from
the date hereof and until payment and satisfaction in full of each and all of the Obligations, unless Secured Party shall otherwise consent in writing, Debtor will: 
  
 (a) Duly observe and perform each and every term and condition of any and all agreements, instruments and documents relating
to the Collateral, and diligently protect and enforce its rights under all such agreements. 
  
 (b) Give Secured Party ten (10) days prior written notice before changing its principal residence or place of business or moving its books and records to a location other than that set forth in Section 17 hereof.

  
 (c) Not sell, lease, assign, transfer, convey, pledge,
hypothecate, mortgage or further encumber any of the Collateral, provided that Debtor may sell Inventory in the ordinary course of business. 
  
 (d) Promptly pay or otherwise cause to be discharged any lien, charge, security interest or other encumbrance that may attach to the Collateral, or any
portion thereof, other than pursuant to this Agreement. 
  
 (e)
Promptly notify Secured Party of any attachment or other legal process levied against any of the Collateral and any information received by Debtor relating to the Collateral, or to other persons obligated in connection therewith, and of any
threatened or filed claims or proceedings, that might in any way affect or impair Secured Party’s security interest in the Collateral or the rights and remedies of Secured Party with respect thereto. 
  
 (f) Defend the Collateral against all claims, liens, security interests,
demands and other encumbrances of third parties at any time claiming an interest in the Collateral that is adverse to Secured Party’s interest in the Collateral hereunder. 
  
 (g) Notify Secured Party in the event of any occurrence that may materially or adversely affect the security interest of
Secured Party in the Collateral. 
  
 (h) At the request of Secured
Party, execute and permit to be filed one or more financing statements, and amendments thereto, under the California Uniform Commercial Code and any other applicable state’s Uniform Commercial Code naming Debtor as debtor and Secured Party as
secured party and indicating therein the types or describing the Collateral. 
  
 (i) Not, without the prior written consent of Secured Party, execute, file or authorize or permit to be filed in any jurisdiction or with any governmental authority any financing or similar statement relating to the
Collateral, or any portion thereof, in which any person other than Secured Party is named as a secured party thereunder. 
  
 (j) Reimburse Secured Party upon demand for any costs and fees, including reasonable attorneys’ fees and accountants’ fees and other expenses,
incurred in collecting any sums payable by Debtor under any of the Obligations secured hereby, enforcing any term or provision of this Agreement or otherwise in the collection of the Collateral and the preparation and enforcement of any agreement
relating thereto. 
  
 (k) Upon request of Secured Party, furnish
within ten (10) days thereafter to Secured Party or to any proposed assignee of Secured Party, a written statement in form satisfactory to Secured Party, duly acknowledged, certifying the amount of the principal and interest then owing under the
obligations and liabilities set forth in the Note, and stating that no claims, offsets or defenses exist with respect to the Note, this Agreement or any of the Loan Documents of any nature whatsoever. 
  
 (l) Execute and deliver to Secured Party any and all further agreements,
instruments, or documents and take any and all such further action as Secured Party, in its sole discretion, may deem necessary or advisable in order to evidence, effectuate, perfect, protect, maintain, or realize upon Secured Party’s security
interest in the Collateral or the priority thereof. 
  

 4 

 10. Events of Default. The occurrence of any of the following shall constitute an “Event of
Default” hereunder: 
  
 (a) Failure to make prompt and
punctual payment or performance when due of any of the Obligations, including without limitation, any Event of Default under the Note. 
  
 (b) Any representation or warranty herein, in the Note, or in any other instrument executed by Debtor in connection with its obligations hereunder, proves
materially false or misleading in any way. 
  
 (c) Breach of any
covenant or promise contained herein or in any other instrument executed by Debtor in connection with its obligations hereunder. 
  
 (d) Debtor becomes insolvent, generally is not paying its debts as such debts become due, or makes an assignment for the benefit of creditors. 

 
 (e) Any case is commenced by or against Debtor, under any bankruptcy,
reorganization, arrangement, readjustment of debt or moratorium law or similar statute if, with respect to a case commenced against Debtor, such case is not dismissed within sixty (60) days. 
  
 (f) Any writ of attachment, garnishment, execution or other legal process is
issued against any property of Debtor, if such writ, garnishment, execution or other process is not fully vacated within sixty (60) days. 
  
 (g) Debtor seeks, consents to, acquiesces in or fails to cause to be vacated or stayed within sixty (60) days (or vacated within sixty (60) days of any
such stay) the appointment of a receiver, trustee or conservator of all or any substantial portion of Debtor’s property. 
  
 11. Secured Party’s Remedies. If an Event of Default or Change of Control (as defined in the Note) occurs hereunder, then, Secured Party may,
at its option, but is not required to, do any one or more of the following without demand or notice to Debtor: 
  
 (a) Declare all of the Obligations immediately due and payable in full, notwithstanding the terms of any other writing or evidence of debt; 
  
 (b) Transfer the Collateral into Secured Party’s name or that of its
nominee; 
  
 (c) From time to time, proceed with the foreclosure
of Secured Party’s security interest and sale of the Collateral, or any portion of it, in any manner permitted by law or provided for herein; 
  
 (d) Take possession of and retain the Collateral in satisfaction of the Obligations; or 
  
 (e) Exercise any and all remedies of a secured party under the California Uniform Commercial Code or as otherwise provided
by law. 
  
 12. Application of Proceeds. After the
occurrence of an Event of Default, all income and distributions with respect to the Collateral and all proceeds from any sale of the Collateral pursuant hereto shall be applied as follows: 
  
 (a) First, in such order as Secured Party shall in its sole discretion
determine, (i) to the payment of all costs and expenses incurred by Secured Party in connection with any sale of the Collateral, including, without limitation, all court costs and the reasonable fees and expenses of counsel for Secured Party in
connection therewith; and (ii) the payment of any and all other costs and expenses paid or incurred by Secured Party in connection with this Agreement or otherwise in connection with the Obligations or the exercise of any right or remedy hereunder;

  

 5 

 (b) Second, to the payment of interest on the Obligations; 
  
 (c) Third, to the payment or satisfaction of the Obligations; and 

 
 (d) Fourth, any amounts remaining after the foregoing applications shall
be remitted to Debtor or as a court of competent jurisdiction may otherwise direct. 
  
 13. Power of Attorney. 
  
 (a) Debtor does hereby irrevocably make, constitute and appoint Secured Party or any of its officers or designees its true and lawful attorney-in-fact with full power in the name of Secured Party or Debtor to receive, open and dispose of
all mail relating to the Collateral addressed to Debtor (provided, however, that Secured Party shall provide Debtor with a copy of any mail so received), and to endorse any notes, checks, drafts, money orders or other evidence of payment relating to
the Collateral that may come into the possession of Secured Party, and to do any and all other acts necessary or proper to carry out the intent of this Agreement, and Debtor hereby ratifies and confirms all that Secured Party or its substitutes
shall properly do by virtue hereof; 
  
 (b) Debtor does hereby
further irrevocably make, constitute and appoint Secured Party or any of its officers or designees its true and lawful attorney-in-fact in the name of Secured Party or Debtor, (i) to enforce all Debtor’s rights under and pursuant to all
agreements with respect to the Collateral, all for the sole benefit of Secured Party, and to enter into such other agreements as may be necessary to protect Secured Party’s rights and interest in and to the Collateral; (ii) to enter into and
perform such agreements as may be necessary in order to carry out the terms, covenants and conditions of this Agreement that are required to be observed or performed by Debtor; (iii) to execute such other and further pledges and assignments of the
Collateral as Secured Party may reasonably require for the purpose of protecting, maintaining or enforcing the security interest granted to the Secured Party herein; and (iv) to do any and all other things necessary or proper to carry out the
intention of this Agreement; and Debtor ratifies and confirms all that Secured Party as such attorney-in-fact or its substitutes shall properly do by virtue of this power of attorney; and 
  
 (c) Each of the foregoing appointments shall be deemed coupled with an interest and irrevocable. 
  
 14. Private Sale. 
  
 (a) Debtor recognizes that Secured Party may be unable to effect a public
sale of all or part of the Collateral. Debtor may, at its sole discretion, consent to a private sale even though such sale may be at prices and upon terms less favorable than if the Collateral were sold at public sales. Debtor agrees that consented
private sales will be deemed to have been made in a commercially reasonable manner. 
  
 (b) Debtor recognizes that a sale, public or private, of the Collateral may not be able to be effected and Secured Party or its assignee are hereby expressly authorized at their election to retain the Collateral until
a sale can be effected. Until such sale, Secured Party or its assignee may elect to hold the Collateral and be treated as the owner thereof, and shall be entitled to collect all income thereon. 
  
 (c) The purchaser or purchasers at any public or private sale of the
Collateral shall take the Collateral free of any right or equity of redemption in Debtor, which rights and equities Debtor hereby expressly waives. 
  
 (d) Debtor agrees that written notice mailed to Debtor ten (10) business days prior to the date of public sale consented to by a Secured Party of the
Collateral or ten (10) business days prior to the date after which private sale consented to by a Secured Party or any other disposition of the Collateral consented to by a Secured Party will be made shall constitute reasonable notice for such
sales. 
  
 15. Financing Statements and Payment Directions.
To the extent permitted by law, Debtor hereby authorizes Secured Party to file any amendments to or continuations of any financing statement filed with regard to 
  

 6 

 the Collateral without the signature of Debtor. Debtor further authorizes Secured Party upon an Event of Default to
notify any account custodian of the Collateral that all sums payable to Debtor relating to the Collateral shall be paid directly to Secured Party. 
  
 16. Termination. Upon satisfaction in full of all of the Obligations, and the satisfaction of all additional costs and expenses of Secured Party as
provided herein, this Agreement shall terminate and Secured Party shall deliver to Debtor, at Debtor’s expense, such of the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to this Agreement; provided that if
Secured Party is required to return any amounts received by Secured Party on account of the Obligations, the security interests provided hereunder shall reattach. 
  
 17. Notices. Any notice or other communication required or permitted to be given under this Agreement shall be in
writing and sent by United States mail, registered or certified mail, postage prepaid, return receipt requested, and addressed as follows: 
  

	 If to Debtor:
	  	 Healthcare Holdings, Inc.
 7610 N.
Stemmons Fwy, Suite 500
 Dallas, TX 75247
 Attention:
President

		
	 with a copy to:
	  	 Healthcare Holdings, Inc.
 7610 N.
Stemmons Fwy, Suite 500
 Dallas, TX 75247
 Attention: Legal
Department 

		
	 If to Secured Party:
	  	 LTC Properties, Inc.
 22917 Pacific Coast
Hwy, Suite 350
 Malibu, California 90265
 Attention: Chief
Financial Officer 

		
	 with a copy to:
	  	 LTC Properties, Inc.
 22917 Pacific Coast
Hwy, Suite 350
 Malibu, California 90265
 Attention: Legal
Department

  
 or such other address
as either party may from time to time specify in writing to the other in the manner aforesaid. If personally delivered, such notices or other communications shall be deemed delivered upon delivery. If sent by United States mail, registered or
certified mail, postage prepaid, return receipt requested, such notices or other communications shall be deemed delivered upon delivery or refusal to accept delivery as indicated on the return receipt. 
  
 18. Survival of Representations. All covenants, agreements or
representations and warranties made herein and in any documents delivered pursuant hereto shall survive the execution hereof. 
  
 19. Assignments. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and
assigns of such party, and all covenants, promises and agreements by or on behalf of Debtor contained in this Agreement shall bind and inure to the benefit of the successors and assigns of Secured Party and Debtor. 
  
 20. California Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of California, without regard to conflict of laws principles. 
  
 21. No Implied Waivers by Secured Party. Neither any failure nor any delay on the part of Secured Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any other right, power or privilege. The rights, remedies and benefits of Secured Party herein expressly specified
are cumulative and not exclusive of any other 
  

 7 

 rights, remedies or benefits that Secured Party may have at law, in equity, by statute or otherwise. Without limiting the
generality of the foregoing, Secured Party shall have all rights and remedies of a secured party under Division 9 of the California Uniform Commercial Code, as it may be amended or superseded from time to time. 
  
 22. Modifications and Waivers. 
  
 (a) No modification, amendment or waiver of any provision of this Agreement,
nor consent to any departure of Debtor herefrom, shall in any event be effective unless the same shall be in writing and signed by Secured Party, and then such waiver or consent shall be effective only in the specific instance and for the purpose
for which given. 
  
 (b) No notice or demand on Debtor in any case
shall entitle Debtor to any other or further notice or demand in the same, similar or other circumstances. 
  
 (c) Debtor hereby waives presentment, notice of dishonor and protest of all instruments included in or evidencing the liability of Debtor in respect of
the Obligations or the Collateral and any and all other notices and demands whatsoever, whether or not relating to such instruments. 
  
 (d) The Obligations shall not be affected by (i) the failure of Secured Party to assert any claim or demand or to enforce any right or remedy against
Debtor; (ii) any extension or renewal thereof; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Agreement or of any other agreement; or (iv) the release of any collateral held by Secured Party for the
Obligations or any of them. 
  
 23. Severability. In case
any one or more of the provisions contained in this Agreement should be determined by a court of law to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby. 
  
 24. Service
of Process. 
  
 (a) Debtor hereby irrevocably submits itself
to the jurisdiction of the state courts of the State of California and to the jurisdiction of the United States District Court for the Central District of California, for the purpose of any suit, action or other proceedings arising out of or based
upon this Agreement or the subject matter hereof brought by Secured Party or its successors or assigns. 
  
 (b) Debtor hereby waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that
it is not subject personally to the jurisdiction of the above named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court. 
  
 (c) Debtor hereby waives any right to jury trial and any offsets or counterclaims in any such action, suit or proceeding (other than compulsory
counterclaims). 
  
 (d) Debtor hereby consents to service of
process by registered mail at the address to which notices are to be given. Debtor agrees that its submission to jurisdiction and its consent to service of process by mail is made for the express benefit of Secured Party. 
  
 (e) Final judgment against Debtor in any such action, suit or proceeding
shall be conclusive, and may be enforced in other jurisdictions (i) by suit, action or proceeding on the judgment, a certified or true copy of which shall be conclusive evidence of the fact and of the amount of any indebtedness or liability of
Debtor therein described; or (ii) in any other manner permitted by applicable law, provided, however, that Secured Party may at its option bring suit, or institute other judicial proceedings against any of Debtor’s assets in any state or
federal court of the United States or of any country or place where such assets may be found. 
  

 8 

 25. Indemnity and Reimbursement of Secured Party. 
  
 (a) Debtor agrees (i) to indemnify and hold harmless Secured Party, to the
fullest extent permitted by law, from and against any and all claims, demands, losses, judgments and liabilities (including liabilities for penalties) arising out of, resulting from or relating to any of the Collateral, this Agreement or the
administration, enforcement, exercise or defense of any right or remedy granted to Secured Party herein; and (ii) to reimburse Secured Party for all costs and expenses, including legal fees and disbursements, incurred after the date hereof and
arising out of, resulting from or relating to any of the Collateral, this Agreement or the administration, enforcement, exercise or defense of any right or remedy granted to Secured Party herein. The foregoing indemnity includes any reasonable costs
incurred by Secured Party in connection with any litigation relating to the Collateral whether or not Secured Party shall be a party to such litigation, including, but not limited to, the reasonable fees and disbursements of counsel to Secured Party
and any out-of-pocket costs incurred by Secured Party in appearing as a witness or in otherwise complying with legal process served upon it. In no event shall Secured Party be liable to Debtor for any matter or thing in connection with this
Agreement other than to account for moneys actually received by it in accordance with the terms hereof. 
  
 (b) If Debtor shall fail to do any act or thing that it has covenanted to do hereunder or under any of the Loan Documents or any representation of
warranty of Debtor to Secured Party shall have been breached, Secured Party may, but shall not be obligated to, do the same or cause it to be done or remedy any such breach and there shall be added to the Obligations hereunder the cost of such
expense incurred by Secured Party in so doing, and any and all amounts expended by Secured Party in taking any such action shall be repayable to it upon its demand therefor and shall bear interest at the applicable interest rate under the Note from
the date such amounts are expended to the date of repayment. 
  
 26. Captions. The captions in this Agreement are inserted only as a matter of convenience and for reference and shall not be deemed to define, limit, enlarge, or describe the scope of this Agreement or the relationship of the
parties, and shall not affect this Agreement or the construction of any provisions herein. 
  
 27. Pronouns. Whenever the context so requires, the masculine shall include the feminine and the neuter, and the singular shall include the plural, and conversely. 
  
 28. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument. 
  
 29. Joint and Several Obligations. Whenever Debtor comprises one or more persons or entities, the obligations and promises set forth herein shall
be joint and several undertakings of each of the persons or entities executing this Agreement as Debtor, and Secured Party may proceed hereunder against any one or more of said persons or entities without waiving its right to proceed against any of
the others. 
  
 [Remainder of Page Intentionally Left Blank]

  

 9 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

  

	DEBTOR:
	
	 HEALTHCARE HOLDINGS, INC.,
 a Nevada corporation

		
	 By:
	 	         /s/    KIMBERLY
DAUGHERTY

	Name:	 	Kimberly Daugherty
	Its:	 	Senior Vice President

  

		
	 By:
	 	         /s/    ANDREW
KERR

	Name:	 	Andrew Kerr
	Its:	 	President and Chief Financial Officer

  

	SECURED PARTY:
	
	 LTC PROPERTIES, INC.,
 a Maryland corporation

		
	 By:
	 	 /s/    WENDY
SIMPSON        

	Name:	 	Wendy Simpson
	Its:	 	Vice Chairman and Chief Financial Officer

  
  

		
	 By:
	 	 /s/    ALEX
CHAVEZ        

	Name:	 	Alex Chavez
	Its:	 	Sr. Vice President and Treasurer

  
  

 10Non-Qualified Stock Option Plan

 Exhibit 10.1
 PEMCO AVIATION GROUP,
INC.
NONQUALIFIED STOCK OPTION PLAN
As Amended and Restated by the Board of Directors 
of Pemco Aviation Group, Inc. on May 14, 2003
 Section 1.  Purpose. The purpose of the PEMCO AVIATION GROUP, INC. (the “Company”) Nonqualified Stock Option Plan
(the “Plan”) is to provide incentives for selected persons to promote the financial success and progress of the Company by granting such persons awards (“Awards”) of incentives in the form of options to purchase shares of the
Company’s Common Stock (“Options”), stock appreciation rights (“SARs”), and Common Stock of the Company (“Stock Grants”). An Award may consist of one or a combination of such incentives and may be made at any time
or from time to time.
 Section 2.  General Provisions.
 A.  Administration. The Plan shall be administered by the Compensation Committee, which shall be comprised of two or more
independent outside directors appointed by the Board of Directors (the “Committee”). Notwithstanding the foregoing, if it would be consistent with all applicable laws, including, without limitation, Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (“Rule 16b-3”), and the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations promulgated thereunder (including, without limitation, the regulations relating to
Section 162(m) of the Code), then the Plan may be administered by the Board of Directors, and if so administered all subsequent references to the Committee shall refer to the Board of Directors. Any action of the Committee shall be taken by majority
vote or the unanimous written consent of the Committee members.
 B.  Authority of the Committee. Subject to other provisions of the Plan, and with a view towards furtherance of its purpose, the Committee shall have sole authority and absolute discretion:
 1.  to construe and interpret the Plan;
 2.  to define the terms used herein;
 3.  to prescribe, amend and rescind rules and regulations relating to the Plan;
 4.  to determine the persons to whom Awards are granted;
 5.  to determine the
time or times at which Awards shall be granted;
 6.  to determine the number of shares subject to each Award;
 
 Page 34

 7.  to determine all of the other terms and conditions of the Options, SARs, and Stock Grants awarded hereunder;
and
 8.   to make all other determinations necessary or advisable for the administration of the Plan and to do everything necessary or
appropriate to administer the Plan.
 All decisions, determinations and interpretations made by the Committee shall be binding and conclusive on all participants in
the Plan and on their legal representatives, heirs and beneficiaries.
 C.  Maximum Number of Shares Subject to the
Plan. The maximum aggregate number of shares of Common Stock subject to the Plan shall be 2,000,000, subject to adjustment as provided in Section 2.G of the Plan. The Common Stock subject to the Plan may be divided among the
various types of Awards as the Committee determines in its sole discretion from time to time. For purposes of calculating the maximum number of shares of Common Stock which may be issued under the Plan, (a) all shares underlying an Option (including
the shares, if any, withheld for tax withholding requirements) shall be counted when cash is used as full payment for shares issued upon exercise of the Option; (b) in the case of net exercise of an Option, only the net shares issued (including the
shares, if any, withheld for tax withholding requirements) shall be counted when shares of Common Stock are used as full or partial payment for shares issued upon exercise of an Option; (c) all shares underlying an SAR (including the shares, if any,
withheld for tax withholding requirements) shall be counted upon exercise of an SAR; and (d) all shares issued pursuant to a Stock Grant (including the shares, if any, withheld for tax withholding requirements) shall be counted when the shares are
no longer subject to any conditions, such as a vesting schedule, and certificates representing such shares have been issued and delivered. If any Options or SARs granted under the Plan expire or terminate for any reason before they have been
exercised, the shares subject to such Options or SARs shall again be available under the Plan.
 D.  Eligibility
and Participation. Subject to the terms of the Plan, Awards may be granted to such employees, officers, directors, consultants and independent contractors of the Company or any Parent, Subsidiary or Affiliate of the Company,
as defined below, as the Committee may select from time to time in its sole discretion. Employees of the Company are eligible to receive Awards for no more than an aggregate of 500,000 shares of the Company’s Common Stock per employee under the
Plan. If any Options or SARs granted to an employee expire unexercised or terminate before vesting, they shall not be included in the foregoing maximum aggregate of 500,000 shares per employee. The Committee, in its sole discretion, shall determine
the number of shares of the Company’s Common Stock covered by any Award made to executive officers or other employees under the Plan. Grants to non-employee directors of the Company may only be made pursuant to formula grants in the manner and
amounts set forth in Section 7 hereof, provided that, if, and to the extent that, the Committee or the Board of Directors could exercise authority to
 
 Page 35

 determine the amount, price and timing of grants hereunder to its members, consistent with all applicable laws, including, without limitation
Rule 16b-3, grants to non-employee directors may be made by the Committee or the Board of Directors as permitted by law. Notwithstanding anything in the Plan to the contrary, to the extent permitted by law, the Committee or the Board of Directors
may grant Awards under the Plan to such employees, officers, directors, consultants and independent contractors of the Company or any Parent, Subsidiary or Affiliate of the Company in such amounts and on such terms and conditions as the Committee or
the Board of Directors may determine to reflect such individuals’ relative contributions to the Company (to the extent not already reflected by a previous Award) during the applicable year on a prorated basis in the event that (a) the
Company or its shareholders enter into an agreement to dispose of all or substantially all of the assets or stock of the Company by means of a sale, merger or other reorganization, liquidation, or otherwise, (b) any such individual ceases
during such year to serve the Company or any Parent, Subsidiary or Affiliate of the Company as an employee, officer, director, consultant or independent contractor for any reason, or (c) any other instance or circumstance that the Committee or
the Board of Directors deems advisable; provided, however, that in no event shall any employee of the Company be eligible to receive more than the foregoing maximum aggregate of 500,000 shares. A person may be granted more than one Award under the
Plan. As used in the Plan, the following terms shall have the following meanings:
 1.  “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time of the granting of an Award, each of such corporations other than the Company
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.
 2.  “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of granting of an Award, 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.
 3.  “Affiliate” means any corporation that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with, another corporation, where “control” (including the terms “controlled by” and “under common control with”) means the possession, direct or
indirect, of the power to cause the direction of the management and policies of the corporation, whether through the ownership of voting securities, by contract or otherwise.
 4.  “Common Stock” means shares of the Company’s $.0001 par value common stock, or such other shares as are substituted pursuant to
Section 2.G hereof.
 E.  Effective Date of Plan. The Plan was adopted by the Company
on September 8, 1989 and has been amended thereafter from time to time.
 
 Page 36

 F.  Termination and Amendment of Plan. The Plan shall terminate on
September 8, 2009. No Options, SARs, or Stock Grants shall be granted under the Plan after that date. Subject to the limitation contained in Section 2.H of the Plan, the Board or the Committee may at any time amend or revise the terms of the Plan,
including the form and substance of the Options, SARs, and Stock Grants granted hereunder, provided that no such amendment or revision shall (i) increase the maximum aggregate number of shares that may be issued pursuant to Awards granted under
the Plan, except as permitted under Section 2.G of the Plan; or (ii) effect any change to the Plan which is required to be approved by shareholders by law, including without limitation the regulations promulgated under Section 162(m) of the
Code.
 G.  Adjustments. If the outstanding shares of Common Stock are increased,
decreased, changed into or exchanged for a different number or kind of shares or securities through merger, consolidation, combination, exchange of shares, reorganization, recapitalization, reclassification, stock dividend, stock split or reverse
stock split, an appropriate and proportionate adjustment shall be made in the maximum number and kind of shares as to which Options, SARs, and Stock Grants may be granted under the Plan. A corresponding adjustment shall be made to the number or kind
of shares allocated to unexercised Options and SARs, or portions thereof, and to unvested Options, SARs, and Stock Grants granted prior to any such change. Any such adjustment in outstanding Options or SARs shall be made without change in the
aggregate purchase price applicable to the unexercised portion of such Options or SARs, but with a corresponding adjustment in the price for each share covered by the Options or SARs.
 H.   Prior Options and Obligations. No amendment, suspension or termination of the Plan shall, without the consent of the person who has received
an Award, alter or impair any of that person’s Options or obligations under any Award granted under the Plan prior to that amendment, suspension or termination.
 I.  Privileges of Stock Ownership. Notwithstanding the exercise of any Option or SAR, or the receipt of any Stock Grant, granted pursuant to the terms of the
Plan, no person shall have any of the rights or privileges of a shareholder of the Company with respect to any shares of stock until certificates representing such shares have been issued and delivered. No shares shall be required to be issued and
delivered upon exercise of any Option or SAR, or pursuant to a Stock Grant, until there has been compliance with all of the requirements of law and of all regulatory agencies having jurisdiction over the issuance and delivery of the
securities.
 J.  Reservation of Shares of Common Stock. During the term of the Plan, the
Company will at all times reserve and keep available such number of shares of its Common Stock as shall be sufficient to satisfy the requirements of the Plan. In addition, the Company will from time to time, as is necessary to accomplish the
purposes of the Plan, seek or obtain from any regulatory agency having jurisdiction any requisite authority in order to issue shares of common stock hereunder. The inability of the Company to obtain from any regulatory agency having jurisdiction the
authority deemed by the Company’s
 
 Page 37

 counsel to be necessary to the lawful issuance of any Award or shares of its stock hereunder shall relieve the Company of any and all
liability with respect to the nonissuance of the Award or the shares of Common Stock as to which the requisite authority shall not have been obtained.
 K.  Tax Withholding. The exercise of any Option or SAR, and the receipt of any Stock Grant, is subject to the condition that if at any time the Company shall determine, in its
discretion, that the satisfaction of withholding tax or other withholding obligations under any state or federal law is necessary or desirable as a condition of, or in connection with, such exercise or delivery or purchase of shares pursuant
thereto, then in such event, the exercise of an Option or SAR, or the receipt of a Stock Grant, shall not be effective unless such withholding shall have been effected or obtained in a manner acceptable to the Company.
 L.  Fair Market Value. The “fair market value” of the Common Stock means if there is an established
market for the Company’s Common Stock on a stock exchange, in an over-the-counter market or otherwise, the mean of the highest and lowest quoted selling prices on the date upon which an Option or SAR is granted or (b) if there were no such
sales on such date, then in accordance with Treasury Regulation Section 20.2031-2 or successor regulations.
 Section 3.  Options.
 A.  Option Price. The option price for shares
acquired pursuant to the exercise of any Option, in whole or in part, shall be determined by the Committee at the time of the grant of the Option. Such option price may be less than the fair market value of the Company’s Common Stock on the
date of grant, but in no event shall the option price be less than fifty percent (50%) of the fair market value of the Common Stock on the date of grant. The foregoing notwithstanding, the option price of Options granted to officers or directors
shall be 100% of the fair market value of the Company’s Common Stock on the date of grant.
 B.  Exercise of
Options. Each Option shall be exercisable in one or more installments during its term, and the right to exercise may be cumulative, as determined by the Committee. No Option may be exercised for a fraction of a share of
Common Stock. The option price shall be paid at the time of exercise of the Option in cash or shares of the Company’s Common Stock, or in a combination thereof. If permitted by the Committee, payment may also be made by delivering a properly
executed notice together with irrevocable instructions to a broker to promptly deliver to the Company the amount of sale or loan proceeds attributable to the purchased shares needed to pay the exercise price. If any portion of the purchase price at
the time of exercise is paid in shares of Common Stock, those shares shall be tendered at their fair market value on the date of exercise. The Committee may also permit a participant to effect a net exercise of an Option without tendering any shares
of the Company’s Common Stock as payment for the Option. In such an event, the participant will be deemed to have paid for the exercise of the Option with
 
 Page
38

 shares of the Company’s stock and shall receive from the Company a number of shares equal to the difference between the shares that
would have been tendered and the number of Options exercised. The Committee may in its discretion and subject to ratification by the entire Board of Directors, loan one or more participants all or a portion of the exercise price, together with the
amount of any tax liability incurred by the participant as a result of the exercise of the Option, for up to three (3) years with interest payable at the prime rate quoted in the Wall Street Journal on the date of exercise. Non-employee directors
may receive such loans for the exercise of their Options without Committee approval or Board ratification.
 C.  Acceleration of Options. Notwithstanding the first sentence of Section 3.B of the Plan, if the Company or its shareholders enter into an agreement to dispose of all or substantially all of the assets or stock of
the Company by means of a sale, merger or other reorganization, liquidation, or otherwise, any Option granted pursuant to the Plan shall become immediately exercisable with respect to the full number of shares subject to that Option during the
period commencing as of the date of the agreement to dispose of all or substantially all of the assets or stock of the Company and ending when the disposition of assets or stock contemplated by that agreement is consummated or the Option is
otherwise terminated in accordance with its provisions or the provisions of the Plan, whichever occurs first; provided that no Option shall be immediately exercisable under this Section on account of any agreement of merger or other reorganization
where the shareholders of the Company immediately before the consummation of the transaction will own at least 50% of the total combined voting power of all classes of stock entitled to vote of the surviving entity (whether the Company or some other
entity) immediately after the consummation of the transaction. In the event the transaction contemplated by the agreement referred to in this Section is not consummated, but rather is terminated, canceled or expires, the Options granted
pursuant to the Plan shall thereafter be treated as if that agreement had never been entered into.
 D.  Written
Notice Required. Any Option granted pursuant to the Plan shall be exercised when written notice of that exercise has been given to the Company at its principal office by the person entitled to exercise the Option and full
payment for the shares with respect to which the Option is exercised has been received by the Company.
 Section 4.  Reload
Options. Concurrently with the award of Options under the Plan, the Committee may authorize reload options (“Reload Options”) to purchase, for cash or shares, the number of shares of Common Stock used to exercise
the underlying Option.
 A.  Reload Option Amendment. Each notice evidencing the grant of
an Option shall state whether the Committee has authorized Reload Options with respect to the underlying Option. Upon the exercise of an underlying Option, the Reload Option will be evidenced by an amendment to the notice of grant of the underlying
Option. Reload Options shall be subject to the terms and conditions in the underlying option agreement and shall be subject to the terms and conditions set forth in the Plan.
 
 Page 39

 B.  Reload Option Price. The option price per share of Common Stock
deliverable upon exercise of a Reload Option shall be the fair market value of a share of Common Stock on the date of exercise of the underlying Option.
 C.  Term and Exercise. Each Reload Option is fully exercisable from the date of exercise of the underlying Option and shall remain exercisable for the remaining term of the underlying
Option. Reload Options may be exercised in the same manner as the underlying Options in accordance with the Plan.
 D.  Termination of Employment. No additional Reload Options shall be granted to participants in the Plan when an Option or Reload Option is exercised pursuant to the terms of the Plan following termination of the
participant’s employment or the cessation of the participant’s service to the Company as a director, consultant or independent contractor.
 Section 5.
Stock Appreciation Rights. The Committee may, from time to time in its sole discretion, grant SARs in addition to or in conjunction with Options granted hereunder, either at the time of the grant of the
Options or at any subsequent time during the term of the Options. Subject to the terms of the Plan, the Committee shall determine and designate the recipients of SARs, the dates SARs are granted, the number of shares subject to SARs, the duration of
each SAR, and whether SARs are alternative to any previously or contemporaneously granted Option or Reload Option (“Related Options”). SARs shall be subject to the terms and conditions and evidenced by agreements in the form determined
from time to time by the Committee.
 A.  Value of SARs. SARs shall entitle their holders
to receive a number of shares of the Company’s Common Stock equal to (i) the excess of the fair market value of a share of the Company’s Common Stock on the date of exercise over a specified price fixed by the Committee, which price may
not be less than 100% of the fair market value of a share of Common Stock on the date of the grant, multiplied by (ii) the number of shares as to which the holder is exercising the SAR.
 B.  Duration. The term of an SAR granted as an alternative to an Option will be the same as the term of its Related Option; upon exercise of the
SAR, the Related Option will terminate, and upon exercise of the Related Option, the SAR will terminate. The term of an SAR granted in addition to and separately from any Option shall be specified by the Committee at the time such SAR is
granted.
 C.  Exercise of SARs. SARs may be exercised according to their terms by
providing written notice to the Company at any time prior to the expiration of the SAR. No SAR may be exercised for a fraction of a share of Common Stock. If the SAR is alternative to an Option, the Related Option shall be deemed terminated to the
extent the SAR is exercised.
 Section 6.  Stock Grants. The Committee may, from time to time in its sole
discretion, grant shares of the Company’s Common Stock under the Plan. Such Stock Grants may be awarded with or without conditions, such as vesting schedules or performance requirements.
 
 Page 40

 Recipients of Stock Grants will not be required to pay for the acquisition of the Company’s Common Stock but will be subject to tax consequences and
resale restrictions.
 Section 7.  Grants to Outside Directors. On the same date in 2001 and each year
thereafter on which the Committee makes its annual grant of Options to the Company’s officers and other key employees, each director who is not an employee of the Company shall be granted an Option for 20,000 shares of Common Stock, without
further action by the Committee. The exercise price for Options granted to outside directors under this Section shall be 100% of the fair market value of the Common Stock on the date of grant. Each Option granted in accordance with this Section
shall include authorization for a Reload Option in accordance with Section 4 of the Plan.
 Section 8.  Terms and Conditions May
Differ. The terms and conditions of Awards granted under the Plan may differ as the Committee shall in its discretion determine so long as all Awards satisfy the requirements of the Plan.
 Section 9.  Duration of Options and SARs. Each Option and each SAR granted pursuant to the Plan shall expire on the date
determined by the Committee which shall be not later than ten years after the date of grant and shall be subject to early termination as provided in the Plan. Subject to the foregoing, Options granted
to outside directors pursuant to Section 7 hereof shall be fully vested on the date of grant and shall be exercisable for a period of ten years.
 Section
10.  Limitations on Acquiring Voting Stock. No Award may be granted to persons who are not officers or directors of the Company if such Award would cause that person to hold, beneficially or
of record, in excess of 5% of the outstanding voting stock of the Company.
 Section 11.  Compliance with Securities
Laws. Shares of Common Stock shall not be issued with respect to any Award granted under the Plan unless the issuance and delivery of the shares pursuant thereto shall comply with all relevant provisions of state and federal
law, including without limitation the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder and the requirements of any stock exchange upon which the shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance. Further, each recipient of an Award hereunder shall consent to the imposition of a legend on the certificate representing the shares of Common Stock issued hereunder restricting
the transferability of such shares as required by law, the Award, or by the Plan.
 Section 12.  Employment. Each recipient of an Award, if requested by the Committee, must agree in writing as a condition of the granting of his or her Award, to remain in the employ of the Company or to remain as a consultant to the Company, or any of its
Subsidiaries, following the date of the granting of that Award for a period or periods specified by the Committee, which period(s) shall in no event exceed an aggregate of four years. Nothing in the Plan or in any Award granted hereunder shall
confer upon any Award recipient any right to continued employment or retainer by the Company or any of its Subsidiaries, or limit in any way the right of the Company or any Subsidiary at any time to terminate or alter the terms of that employment or
consulting arrangement.
 
 Page 41

 Section 13.  Rights Upon Termination of Employment, Director, Consultant or Independent Contractor
Status. If an Award recipient ceases to be employed by the Company or ceases to serve as a director, consultant or independent contractor of the Company, or any Subsidiary, for any reason other than death or retirement, his
or her Award shall terminate one year from the date of the Award recipient ceases to be employed by or serve as a director, consultant or independent contractor of the Company; provided that the Committee may, in its discretion, allow Options and
SARs to remain exercisable (to the extent exercisable on the date of termination of employment or retainer) for up to one additional year for each year of service to the Company by the Award recipient (up to a maximum of five years after the date of
termination), unless the Option, SAR, or the Plan otherwise provides for earlier termination; and provided further that, for purposes of determining when a director no longer serves the Company, the period during which post-retirement or similar
benefits are paid to the director by the Company shall be deemed to be continued service.
 Section 14.  Rights Upon
Death. Except as otherwise limited by the Committee at the time of the grant of an Option or SAR, if the recipient dies while he or she is an employee, director or consultant of the Company or any Subsidiary, his or her
Options and SARs shall remain exercisable for one year after the date of death, unless the Options, SARs, or the Plan otherwise provide for earlier termination. During such exercise period after death, Options and SARs may be fully exercised, to the
extent that they remain unexercised on the date of the recipient’s death, by the person or persons to whom the recipient’s rights to the Options or SARs shall pass by will or by laws of descent and distribution.
 Section 15.  Waiver of Vesting Restrictions in the Event of Retirement. Notwithstanding any provision of the Plan, in the event
an Award recipient retires as an employee or director of the Company, or any Subsidiary, the Committee shall have the discretion to waive any vesting restrictions on the retiree’s Options, SARs, or Stock Grants.
 Section 16.  Awards Not Transferable. Awards granted pursuant to the Plan may not be sold, pledged, assigned or transferred in
any manner otherwise than by will or the laws of descent and distribution. During the lifetime of the Award recipient, Options and SARs may only be exercised by that recipient or by his or her guardian or legal representative.
 Section 17.  Reports to Shareholders. Upon written request, the Company shall furnish to each Award recipient a copy of its
most recent Form 10-K Annual Report and each quarterly report to shareholders issued since the end of the Company’s most recent fiscal year.
 
 Page 42

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}]]