INTENT OF THE COMPANY TO PREPAY
A PORTION OF THE SALARY CONTINUATION IN A LUMP SUM PAYMENT DEPENDING ON THE
THEN-CURRENT LIQUIDITY OF THE COMPANY AND CASH POSITION COMPANY AT THE TIME, AT
THE COMPANY'S DISCRETION.
(B)
INSURANCE BENEFITS.
THE COMPANY SHALL CONTINUE TO PAY THE
PREMIUMS FOR MEDICAL AND OTHER INSURANCE BENEFITS CURRENTLY IN PLACE FOR THE
EXECUTIVE, INCLUDING FOR CONTINUED HEALTH INSURANCE COVERAGE FOR EXECUTIVE AND
HIS CURRENTLY INSURED DEPENDENTS FOR ELEVEN MONTHS FOLLOWING THE RESIGNATION
DATE, PROVIDED THAT EXECUTIVE MAKES A TIMELY ELECTION TO CONTINUE SUCH COVERAGE
UNDER COBRA.
IN ADDITION, IF EXECUTIVE, DESPITE GOOD FAITH, DILIGENT EFFORTS TO
OBTAIN EMPLOYMENT, HAS NOT BECOME EMPLOYED IN A POSITION THAT PROVIDES HEALTH
INSURANCE BENEFITS BY MAY 31, 2006, THE COMPANY SHALL CONTINUE TO PAY THE ABOVE
HEALTH INSURANCE PREMIUMS FOR EXECUTIVE UNTIL THE EARLIER OF (I) THE EXPIRATION
OF AN ADDITIONAL SIX-MONTH PERIOD OR (II) EXECUTIVE'S ACCEPTANCE OF EMPLOYMENT.
AFTER SUCH PERIOD, EXECUTIVE MAY CONTINUE HIS HEALTH INSURANCE COVERAGE AT HIS
OWN EXPENSE IF AND FOR SO LONG AS SUCH COVERAGE MAY BE PERMITTED UNDER COBRA.
(C)
ADDITIONAL PAYMENT.
IN LIEU OF ADDITIONAL AMOUNTS UNDER
EXECUTIVE'S EMPLOYMENT AGREEMENT, THE COMPANY SHALL PAY EXECUTIVE AN AMOUNT
EQUAL TO FIFTY PERCENT (50%) OF EXECUTIVE'S BASE SALARY ON THE RESIGNATION DATE,
LESS LEGALLY REQUIRED WITHHOLDINGS, WHICH SHALL BE PAID IN EQUAL INSTALLMENTS ON
REGULARLY SCHEDULED PAYDAYS COMMENCING AFTER THE RESIGNATION DATE FOR A PERIOD
OF SIX MONTHS.
THE COMPANY MAY ELECT TO PREPAY ANY PORTION OF THE BONUS
COMPENSATION IN A LUMP SUM PAYMENT AT ANY TIME IN ITS SOLE DISCRETION.
(D)
LEASE REIMBURSEMENT.
THE COMPANY WILL REIMBURSE EXECUTIVE FOR
MONTHLY LEASE PAYMENTS AND UTILITIES AND SIMILAR RELATED EXPENSES UNDER THAT
CERTAIN LEASE AGREEMENT FOR AN APARTMENT USED BY COMPANY PERSONNEL LOCATED AT
601 WEST 57TH STREET, NEW YORK, NEW YORK FOR THE REMAINDER OF THE CURRENT TERM.
(E)
EQUIPMENT.
EXECUTIVE SHALL BE ENTITLED TO RETAIN THE PERSONAL
EQUIPMENT LISTED ON THE ATTACHED SCHEDULE A, AND TO THE EXTENT THAT THE COMPANY
HAS ANY OWNERSHIP RIGHTS TO SUCH EQUIPMENT, THE COMPANY HEREBY TRANSFERS AND
ASSIGNS SUCH RIGHTS TO EXECUTIVE.
(g)
Cessation of Board Fees.
Effective on the Resignation Date, all
board of director fees shall terminate.
3.
OPTIONS.
THE COMPANY SHALL ISSUE TO EXECUTIVE ON THE RESIGNATION
DATE AN OPTION AGREEMENT UNDER THE 2005 STOCK INCENTIVE PLAN FOR THE PURCHASE OF
UP TO 1,320,000 SHARES OF THE COMPANY'S COMMON STOCK AT AN EXERCISE PRICE EQUAL
TO THE LOWER OF THE AVERAGE CLOSING PRICE OF THE COMMON STOCK AS REPORTED ON THE
OTC BULLETIN BOARD DURING JUNE, 2005, OR $.58; PROVIDED, THAT IF THE AVERAGE OF
THE CLOSING BID AND ASKED PRICES OF THE COMMON STOCK ON THE RESIGNATION DATE
(THE "FMV") IS HIGHER THAN THE LOWER AMOUNT ABOVE, THE EXERCISE PRICE SHALL BE
THE LOWER OF THE FMV AND THE OTHER AMOUNT ABOVE.
4.
PUBLICITY.
THE PARTIES AGREE, AS PART OF THE AGREEMENT, TO
MUTUAL NON-DISPARAGEMENT PROVISIONS.
EACH PARTY AGREES THAT IT OR HE WILL NOT
DISPARAGE OR TALK NEGATIVELY ABOUT