(C)
GAFFNEY WILL BE PAID IN FULL ON THE CLOSING DATE, AS SET FORTH IN
SECTION 3 ABOVE, NOTWITHSTANDING THE FACT THAT THE NOTES HELD BY THE NOTEHOLDERS
WILL NOT BE PAID IN THE SAME PROPORTIONAL AMOUNT; AND
(D)
ASSUMING THE CLOSING DATE OCCURS ON JUNE 30, 2010, THE CLOSING
PAYMENT AMOUNT WILL BE APPLIED AS FOLLOWS: $2,393,795.18 SHALL BE PAID TO BRAND,
$299,224.40
SHALL BE PAID TO COUSE, $299,224.39 SHALL BE PAID TO J. COUSE AND $63,515.18
SHALL BE PAID TO GAFFNEY.
BRAND'S NOTE WILL ALSO BE REDUCED BY $450,000 IN
CONNECTION WITH RECEIPT OF THE SHARES (AS PROVIDED IN SECTION 8).
SUCH PAYMENTS
WILL BE APPLIED FIRST TO ALL ACCRUED AND UNPAID INTEREST AND THE BALANCE OF SUCH
PAYMENTS WILL BE APPLIED TO OUTSTANDING PRINCIPAL; AND THE REMAINING OUTSTANDING
PRINCIPAL BALANCE UNDER THE NOTES WILL BE $2,186,607.32 ON THE NOTE HELD BY
BRAND AND $329,575.92 ON THE NOTE HELD BY COUSE AND $329,575.91 ON THE NOTE HELD
BY J. COUSE.
8.
ISSUANCE OF STOCK AS PARTIAL PAYMENT OF NOTE HELD BY BRAND.
ON
THE CLOSING DATE, PARENT SHALL ISSUE TO CHARLES BRAND THAT NUMBER OF SHARES OF
ITS COMMON STOCK (THE "SHARES") THAT EQUAL THE QUOTIENT OF $450,000 DIVIDED BY
115% OF THE VOLUME WEIGHTED AVERAGE PER SHARE PRICE FOR SUCH COMMON STOCK FOR
THE THREE DAYS CONSISTING OF THE DATE OF PUBLIC ANNOUNCEMENT OF THE 2010
PURCHASE AGREEMENT AND THE TWO TRADING DAYS IMMEDIATELY THEREAFTER, PURSUANT TO
THE TERMS AND CONDITIONS OF THE STOCK ISSUANCE AGREEMENT SUBSTANTIALLY IN THE
FORM ATTACHED HERETO AS EXHIBIT C AS IT MAY BE MODIFIED PRIOR TO THE CLOSING
DATE BY MUTUAL AGREEMENT OF THE PARTIES THERETO.
9.
INCREASE IN LONG-TERM FEDERAL CAPITAL GAINS TAX RATE.
SECTION 2.7 OF THE 2008 PURCHASE AGREEMENT PROVIDES, IN SUMMARY, THAT IF THERE
IS AN INCREASE IN THE FEDERAL LONG-TERM CAPITAL GAINS TAX RATE FROM THE THEN
CURRENT RATE OF 15% AFTER AUGUST 20, 2008, AND, AS A RESULT OF SUCH INCREASE, A
NOTEHOLDER IS REQUIRED TO PAY MORE FEDERAL LONG-TERM CAPITAL GAINS TAXES ON
GAINS RELATING TO PAYMENTS ON THE NOTES, EEC SHALL PAY TO SUCH NOTEHOLDER AN
AMOUNT EQUAL TO SUCH ADDITIONAL FEDERAL CAPITAL GAINS TAXES ACTUALLY PAID BY
SUCH NOTEHOLDER ATTRIBUTABLE TO THE CAPITAL GAINS TAX RATE INCREASE UP TO AND
INCLUDING A RATE OF 25%.
EEC HEREBY CONFIRMS THAT EEC IS OBLIGATED UNDER EACH
AND EVERY PROVISION OF SECTION 2.7 OF THE 2008 PURCHASE AGREEMENT UNTIL ALL
NOTES ARE PAID IN FULL, INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO THE
PAYMENT OF TAXES ON THE CAPITAL GAINS INCREASE PAYMENT (AS THAT TERM IS DEFINED
IN THE 2008 PURCHASE AGREEMENT).
10.
PARENT GUARANTY.
PARENT HEREBY CONFIRMS THAT IT HAS PROVIDED THE
PARENT GUARANTY AND IS AND WILL CONTINUE TO BE OBLIGATED UNDER THE PARENT
GUARANTY UNTIL ALL NOTES ARE PAID IN FULL.
11.
TAX.
EEC SHALL OBTAIN FROM BALLARD SPAHR, LLP ON OR BEFORE THE
CLOSING DATE, AN OPINION THAT MORE LIKELY THAN NOT THE MODIFICATIONS
CONTEMPLATED BY THE AMENDMENT NO. 2 AS