SET FORTH HEREIN.
(J)
THE BUYER(S) (BEING THE HOLDERS OF ALL OF THE OUTSTANDING 6%
DEBENTURES) ACKNOWLEDGES THAT THE REVERSE STOCK SPLIT OF THE COMMON STOCK
EFFECTED BY THE COMPANY ON FEBRUARY 13, 2007 RESULTED IN A NORMAL ADJUSTMENT OF
THE 6% DEBENTURES PURSUANT TO CLAUSE 3(C)(II)(C) THEREOF AND OF THE 6% DEBENTURE
WARRANTS PURSUANT TO SECTION 8(D) THEREOF.
(K)
THE COMPANY ACKNOWLEDGES THAT THE SHARES ISSUABLE PURSUANT TO
CERTAIN OF THE 6% DEBENTURE WARRANTS ARE NOT SUBJECT TO AN EFFECTIVE
REGISTRATION STATEMENT AND,
3
THEREFORE, THE HOLDERS THEREOF HAVE THE RIGHT OF CASHLESS EXERCISE AS PROVIDED
IN SECTION 2(A)(II) OF THE 6% DEBENTURE WARRANTS.
(L)
NOTHING IN THIS SECTION 1 WAIVES THE RIGHT OF THE BUYER(S)
HEREAFTER TO ENFORCE TERMS OF THE INVESTOR REGISTRATION RIGHTS AGREEMENT IN
ACCORDANCE WITH THE TERMS THEREOF (AS MODIFIED BY THESE WAIVERS) UPON AT LEAST
60 DAYS NOTICE TO THE COMPANY.
2.
OTHER AGREEMENTS
(A)
ADJUSTMENT TO WARRANTS.
THE BUYER(S) HOLD WARRANTS TO ACQUIRE
3,000,000 (750,000 POST-SPLIT) SHARES OF THE COMPANY'S COMMON STOCK EXERCISABLE
THROUGH MAY 2009 AT $1.75 ($7.00 POST-SPLIT) PER SHARE, AND 3,000,000 (750,000
POST-SPLIT) SHARES OF THE COMMON STOCK EXERCISABLE THROUGH MAY 2009 AT $2.00
($8.00 POST-SPLIT) PER SHARE.
THE COMPANY AGREES THAT, UPON THE FIRST
CONVERSION BY THE BUYER(S) OF ANY 6% DEBENTURE WHETHER PURSUANT TO PARAGRAPH
2(C) OR OTHERWISE, THE EXERCISE PRICE OF THOSE WARRANTS WILL BE AUTOMATICALLY
ADJUSTED TO THE AVERAGE OF THE TWO LOWEST DAILY VWAPS OF THE COMMON STOCK DURING
THE FIVE TRADING DAYS PRIOR TO SUCH CONVERSION (AS THOSE TERMS ARE DEFINED IN
THE 6% DEBENTURE) TO THE EXTENT THAT THE AVERAGE OF THE TWO LOWEST DAILY VWAPS
ARE IN FACT LOWER THAN THE EXERCISE PRICE AT THE TIME OF CONVERSION.
(B)
ADDITIONAL FINANCING.
THE BUYER(S) AGREE THAT IF THE COMPANY DOES
NOT RAISE $2,000,000 (AS CONTEMPLATED IN SECTION 1(H), ABOVE) BY APRIL 6, 2007:
(I)
THE BUYER(S) WILL (NOT LATER THAN APRIL 12, 2007)
"FILL-THE-GAP" AND PROVIDE FUNDS TO THE COMPANY IN AN AMOUNT EQUAL TO THE
DIFFERENCE (BUT NOT GREATER THAN $1,000,000) BETWEEN $2,000,000 AND THE AMOUNT
RAISED BY THE COMPANY; OR
(II)
THE BUYER(S) WILL WAIVE THEIR RIGHT OF FIRST REFUSAL (AS IN
SECTION 1(H), ABOVE) AND ANY DILUTION ADJUSTMENT (AS IN SECTION 1(I), ABOVE) FOR
OTHER ACCREDITED INVESTORS WHO ACTUALLY PURCHASE SECURITIES ON TERMS IDENTICAL
IN ALL MATERIAL RESPECTS TO THOSE OFFERED BY THE COMPANY WHO PROVIDE THE FUNDS
TO "FILL-THE-GAP" BY NOT LATER THAN APRIL 12, 2007.
IF THE PURCHASERS DO NOT
ACTUALLY MAKE THE INVESTMENT, THE BUYER(S) WILL PROVIDE FUNDS TO THE COMPANY
(BUT NOT GREATER THAN $1,000,000 INCLUSIVE OF PARAGRAPH 2(B)(I), ABOVE) NOT
LATER THAN 4:00 PM EASTERN TIME ON APRIL 12, 2007.
3.
GOVERNING LAW: MISCELLANEOUS.
(A)
GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.
THE PARTIES FURTHER AGREE THAT
ANY ACTION BETWEEN THEM SHALL BE HEARD IN THE UNITED STATES DISTRICT COURT FOR