AND SIMILARLY IN
THE FUTURE IN CONNECTION WITH THE AMOUNT OF WARRANT SHARES PURCHASABLE UPON
EXERCISE OF THE EXISTING WARRANTS AND ADDITIONAL WARRANTS FOR ANY OTHER
REDUCTION OF THE EXERCISE PRICE OF THE EXISTING WARRANTS OR ADDITIONAL WARRANTS
WHICH IS A RESULT OF THE APPLICATION OF SECTION 3.4 OF THE EXISTING WARRANTS OR
SECTION 3.4 OF THE ADDITIONAL WARRANTS.
10.
EXTENSION OF EXPIRATION DATE OF WARRANTS.
THE EXPIRATION DATE OF ANY EXISTING WARRANTS SHALL BE EXTENDED AS OF THE
AMENDMENT EFFECTIVE DATE TO DECEMBER 31, 2011.
11.
ADDITIONAL WARRANTS.
(A)
ON THE AMENDMENT EFFECTIVE DATE, THE
BORROWER WILL ISSUE AND DELIVER ADDITIONAL WARRANTS TO THE HOLDERS AS OUTLINED
ON EXHIBIT C ATTACHED HERETO EQUAL TO 25% OF THE AMOUNT OF WARRANT SHARES
ISSUABLE TO EACH HOLDER IMMEDIATELY FOLLOWING THE DATE OF THIS AGREEMENT.
THE
ADDITIONAL WARRANTS SHALL BE ISSUED SUBJECT TO THE TERMS OF THE FORM WARRANT AND
THE SUBSCRIPTION AGREEMENT; PROVIDED, HOWEVER, THAT, ANY TERMS OF THE
FORM WARRANT AND THE SUBSCRIPTION AGREEMENT TO THE CONTRARY NOTWITHSTANDING, THE
PER SHARE PURCHASE PRICE OF THE SHARES OF COMMON STOCK ISSUABLE PURSUANT TO THE
ADDITIONAL WARRANTS SHALL BE $0.80, SUBJECT TO ADJUSTMENT AS DESCRIBED THEREIN.
(B)
THE ADDITIONAL WARRANTS SHALL BE EXERCISABLE
ON A CASHLESS BASIS THROUGH THE EXPIRATION DATE OF THE ADDITIONAL WARRANTS AND
SUBJECT TO PIGGYBACK REGISTRATION RIGHTS; PROVIDED, THAT, IF AN EXISTING
REGISTRATION STATEMENT DOES NOT PROVIDE FOR THE REGISTRATION OF A SUFFICIENT
NUMBER OF REGISTRABLE SECURITIES, AND ANY TERMS OF THE ADDITIONAL WARRANTS TO
THE CONTRARY NOTWITHSTANDING, BORROWER SHALL NOT BE REQUIRED HEREUNDER OR
PURSUANT TO THE TERMS OF THE ADDITIONAL WARRANTS TO OBTAIN AN EFFECTIVE
REGISTRATION STATEMENT OR A POST-EFFECTIVE AMENDMENT TO ANY EXISTING
REGISTRATION STATEMENT WITH RESPECT TO THE ADDITIONAL WARRANTS OR SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE THEREOF.
4
(C)
THE EXPIRATION DATE OF THE ADDITIONAL WARRANTS SHALL BE AUGUST 20,
2013.
12.
ADDITIONAL COVENANTS. THE FOLLOWING COVENANTS SHALL BE ADDED TO
SECTION 9 OF THE SUBSCRIPTION AGREEMENT.
(A)
AS OF THE DATE OF THIS AGREEMENT AND UNTIL THE EARLIER OF
(I) JUNE 30, 2010 AND (II) THE DATE THAT 50% OF THE INITIAL AGGREGATE PRINCIPAL
AMOUNT OF THE NOTES IS NO LONGER OUTSTANDING AND HAS BEEN REDEEMED BY THE
COMPANY PURSUANT TO THE TERMS OF SUCH NOTES AND THIS AGREEMENT (SUCH EARLIER
DATE, THE "ACCRUAL TERMINATION DATE"), THE COMPANY SHALL (I) NOT PAY CASH
RETAINERS OR MAKE ANY OTHER CASH PAYMENTS TO THE BOARD OF DIRECTORS EXCEPT
MEETING FEES FOR UP TO FOUR (4) MEETINGS OF THE BOARD OF DIRECTORS PER YEAR AND
MEETING FEES FOR ANY MEETINGS OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
(THE "BOARD PAYMENTS") AND THE COMPANY SHALL REVISE THE PAYMENT SCHEDULE AND
METHODS OF PAYMENT FOR ALL BOARD PAYMENTS AND (II) USE COMMERCIALLY REASONABLE
EFFORTS TO MINIMIZE THE COST OF HOLDING MEETINGS OF THE BOARD OF DIRECTOR,
INCLUDING PROVIDING FOR TELEPHONIC MEETINGS OF THE BOARD OF DIRECTORS RATHER
THAN IN-PERSON QUARTERLY MEETINGS OF THE BOARD OF DIRECTORS. ALL BOARD PAYMENTS
SHALL ACCRUE UNTIL THE