Document:

Summary 1

    EXHIBIT
      10.1

    

    SUMMARY
      OF TALK AMERICA HOLDINGS, INC. 2005 EXECUTIVE OFFICER AND MANAGEMENT BONUS
      PROGRAM

    (as
      amended as of February 14, 2006)

    

    Purpose:
      To
      provide further incentive to achieve the performance goals of Talk America
      Holdings, Inc. (the “Company”) in 2005.

    

    Participants:
      Executive officers of the Company and other management employees of the Company
      and its subsidiaries, in each case as may be designated by the Compensation
      Committee, who are employees of the Company or one of its subsidiaries as of
      the
      end of the Company’s 2005 fiscal year.

    

    Performance
      Goals:
      The
      Company’s Lines on Network at the end of 2005 and EBITDA as included in the
      Company’s Operating Plan for the year ending December 31, 2005 as such Operating
      Plan was in effect as of the date of approval of this bonus program by the
      Compensation Committee, as such performance goals may be adjusted to reflect
      such subsequent events as the Compensation Committee may, in its discretion,
      deem appropriate.

    

    Basic
      Bonus:
      Payable
      to participants in the amount of the individual participant target levels if
      either the Lines on Network or EBITDA performance goal is met.

    

    Supplemental
      Bonus:

    

    (a)
      If
      the performance goal Lines on Network is exceeded, an additional bonus at a
      rate
      equal to 2.5% of the basic bonus for each 1,000 lines on network over the
      performance goal Lines on Network.

    

    (b)
      If
      the performance goal EBITDA is exceeded, an additional bonus at a rate equal
      to
      5% of the basic bonus for each $1 million of EBITDA over the performance goal
      EBITDA.

    

    (c)
      In
      determining the amount of any supplemental bonus that may be payable, any
      achievement shortfall as against either performance goal will also be taken
      into
      account and the Lines on Network performance goal and the EBITDA performance
      goal will each be weighted at 50% in such calculation.

    

    (d)
      An
      additional bonus at a rate equal to 20% of the basic bonus. (added by February
      14, 2006 amendment)

    

    Participant
      Target Levels (expressed as percentage of base salary):

    

    (a)
      CEO
& President - 50%

    

    (b)
      Other
      Executive Officers - 40%

    

    (c)
      Other
      Management Employees - 40% to 10%, in all cases as determined by the
      Compensation Committee.

    

    Compensation
      Committee Discretion:
      The
      Compensation Committee retains complete discretion to determine all matters
      regarding participation in the bonus program, the construction of the terms
      thereof, the administration thereof and the payment of any bonuses thereunder,
      including, without limitation, all determinations as to achievement of the
      performance goals and the calculation of any bonus amounts, and all bonuses
      payable pursuant to the bonus program shall be subject to approval by the
      Compensation Committee.

    

    No
      Employment Rights:
      The
      bonus program shall not constitute inducement or consideration for the
      employment of any person or the service of any person and participation in
      the
      bonus program shall not give any person any right to be retained in the service
      of the Company or any subsidiary of the Company.Summary 2

    EXHIBIT
      10.2

    

    SUMMARY
      OF TALK AMERICA HOLDINGS, INC. 2006 EXECUTIVE OFFICER AND MANAGEMENT BONUS
      PROGRAM

    

    Purpose:
      To
      provide further incentive to achieve the performance goals of Talk America
      Holdings, Inc. (the “Company”) in 2006.

    

    Participants:
      Executive officers of the Company and other management employees of the Company
      and its subsidiaries, in each case as may be designated by the Compensation
      Committee, who are employees of the Company or one of its subsidiaries as of
      the
      end of the Company’s 2006 fiscal year.

    

    Performance
      Goals:
      The
      Company’s Total Revenue and EBITDA, each as included in the Company’s Operating
      Plan for the year ending December 31, 2006 as such Operating Plan was in effect
      as of the date of approval of this bonus program by the Compensation Committee,
      as such performance goals may be adjusted to reflect such subsequent events
      as
      the Compensation Committee may, in its discretion, deem
      appropriate.

    

    Basic
      Bonus:
      Payable
      to participants in the amount of the individual participant target levels if
      either the Total Revenue or EBITDA performance goal is met.

    

    Supplemental
      Bonus:

    

    (a)
      If
      the performance goal Total Revenue is exceeded, an additional bonus at a rate
      equal to 5% of the basic bonus for each $1 million of Total Revenue over the
      performance goal Total Revenue.

    

    (b)
      If
      the performance goal EBITDA is exceeded, an additional bonus at a rate equal
      to
      5% of the basic bonus for each $1 million of EBITDA over the performance goal
      EBITDA.

    

    (c)
      In
      determining the amount of any supplemental bonus that may be payable, any
      achievement shortfall as against either performance goal will also be taken
      into
      account and the Total Revenue performance goal and the EBITDA
      performance goal will each be weighted at 50% in such calculation.

    

    Participant
      Target Levels (expressed as percentage of base salary):

    

    (a)
      CEO
& President - 50%

    

    (b)
      Other
      Executive Officers - 40%

    

    (c)
      Other
      Management Employees - 40% to 10%, in all cases as determined by the
      Compensation Committee.

    

    Compensation
      Committee Discretion:
      The
      Compensation Committee retains complete discretion to determine all matters
      regarding participation in the bonus program, the construction of the terms
      thereof, the administration thereof and the payment of any bonuses thereunder,
      including, without limitation, all determinations as to achievement of the
      performance goals and the calculation of any bonus amounts, and all bonuses
      payable pursuant to the bonus program shall be subject to approval by the
      Compensation Committee.

    

    No
      Employment Rights:
      The
      bonus program shall not constitute inducement or consideration for the
      employment of any person or the service of any person and participation in
      the
      bonus program shall not give any person any right to be retained in the service
      of the Company or any subsidiary of the Company.Summary 3

    EXHIBIT
      10.3

    

    SUMMARY
      OF 2006 SUPPLEMENTAL INCENTIVE COMPENSATION PLAN

    

    On
      February 16, 2006, the Compensation Committee of the Board of Directors of
      Talk
      America Holdings, Inc. (the “Company”) approved and adopted a 2006 supplemental
      incentive compensation plan for a limited number of employees of the Company
      and
      its subsidiaries who are designated as participants by the Company’s chief
      executive officer. Under this plan, the participating employees are organized
      in
      groups on a cross-functional basis and charged with the responsibility for
      improving and monitoring operational areas identified by management, such as:
      customer satisfaction, general and administrative expenses, gross margin,
      products and services, and sales and marketing. Incentive compensation under
      this plan is based upon the achievement of certain operational performance
      measures to be established by the Company’s chief executive officer. Maximum
      2006 incentive compensation per employee for each cross-function team is $4,000
      per six-month period, with an aggregate six-month cap of $8,000. The Company’s
      executive officers, other than its Chief Executive Officer and President, are
      entitled to participate in this incentive plan.Unassociated Document

    EXHIBIT
      4.1

     

    THE
      SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES
      HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS
      AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K), OR (III)
      THE
      COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT
      SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES
      ACT
      OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

     

    SUBJECT
      TO THE PROVISIONS OF SECTION 8(b) HEREOF, THIS WARRANT SHALL BE VOID AFTER
      5:00
      P.M. EASTERN TIME ON FEBRUARY __, 2011 (the “EXPIRATION DATE”).

     

    No.
      WA2006-_

     

    CAPRIUS,
      INC.

     

    SERIES
      A WARRANT TO PURCHASE _________ SHARES OF

    COMMON
      STOCK, PAR VALUE $0.01 PER SHARE

     

    For
      VALUE
      RECEIVED, ____________________________________ (“Warrantholder”),
      is
      entitled to purchase, subject to the provisions of this Warrant, from Caprius,
      Inc., a Delaware corporation (the “Company”),
      at
      any time from and after the date hereof (the “Initial
      Exercise Date”)
      and
      not later than 5:00 P.M., Eastern time, on the Expiration Date (as defined
      above), at an exercise price per share equal to $1.50 (the exercise price in
      effect being herein called the “Warrant
      Price”),
                
      shares
      (“Warrant
      Shares”)
      of the
      Company’s Common Stock, par value $0.01 per share (“Common
      Stock”).
      The
      number of Warrant Shares purchasable upon exercise of this Warrant and the
      Warrant Price shall be subject to adjustment from time to time as described
      herein.

     

    This
      Warrant is one of a series (the “Series
      A”)
      of
      Warrants initially issued for an aggregate of         
      shares
      of Common
      Stock as
      part of a private placement by the Company of          
      shares
      of Series D Convertible Preferred Stock, the Series A Warrants and Series B
      Warrants for the purchase of _____ shares of Common Stock, pursuant to a
      Purchase Agreement, dated as of February 14, 2006, among the Company and the
      purchasers signatory thereto (the “Purchase
      Agreement”).

     

    Section
      1.  Registration.
      The
      Company shall maintain books for the transfer and registration of the Warrant.
      Upon the initial issuance of this Warrant, the Company shall issue and register
      the Warrant in the name of the Warrantholder.

     

    Section
      2.  Transfers.
      As
      provided herein, this Warrant may be transferred only pursuant to a registration
      statement filed under the Securities Act of 1933, as amended (the “Securities
      Act”),
      or an
      exemption from such registration. Subject to such restrictions, the Company
      shall transfer this Warrant from time to time upon the books to be maintained
      by
      the Company for that purpose, upon surrender thereof for transfer properly
      endorsed or 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    accompanied
      by appropriate instructions for transfer and such other documents as may be
      reasonably required by the Company, including, if required by the Company,
      an
      opinion of its counsel to the effect that such transfer is exempt from the
      registration requirements of the Securities Act, to establish that such transfer
      is being made in accordance with the terms hereof, and a new Warrant shall
      be
      issued to the transferee and the surrendered Warrant shall be canceled by the
      Company.

     

    Section
      3.  Exercise
      of Warrant.
      (a)  Exercise.
      Subject
      to the provisions hereof, the Warrantholder may exercise this Warrant in whole
      or in part at any time from and after the Initial Exercise Date and not later
      than 5:00 P.M., Eastern time, on the Expiration Date upon surrender of the
      Warrant, together with delivery of the duly executed Warrant Exercise Form
      attached hereto as Appendix A and payment by cash, certified check or wire
      transfer of funds (or,
      in
      certain circumstances, by cashless exercise as provided in subsection (b) below)
      for
      the
      aggregate Warrant Price for that number of Warrant Shares then being purchased,
      to the Company during normal business hours on any business day at the Company’s
      principal executive offices (or such other office or agency of the Company
      as it
      may designate by notice to the Warrantholder). The Warrant Shares so purchased
      shall be deemed to be issued to the Warrantholder or the Warrantholder’s
      designee, as the record owner of such shares, as of the close of business on
      the
      date on which this Warrant shall have been duly surrendered (or evidence of
      loss, theft or destruction thereof and security or indemnity satisfactory to
      the
      Company), the Warrant Price shall have been paid and the completed Warrant
      Exercise Form shall have been delivered. Certificates for the Warrant Shares
      so
      purchased, representing the aggregate number of shares specified in the Warrant
      Exercise Form, shall be delivered to the Warrantholder within a reasonable
      time,
      not exceeding three (3) business days, after this Warrant shall have been so
      exercised (the “Warrant
      Share Delivery Date”).
      The
      certificates so delivered shall be in such denominations as may be requested
      by
      the Warrantholder and shall be registered in the name of the Warrantholder
      or
      such other name as shall be designated by the Warrantholder. The Company shall
      pay to the Warrantholder, in cash, as partial liquidated damages and not as
      a
      penalty, for each $1,000 of Warrant Shares to be issued (based on the Market
      Price (as defined herein) of the Common Stock on the date the Warrants together
      with the executed Warrant Exercise Form are received for exercise by the
      Company’s transfer agent), $15 per business day for each business day after the
      Warrant Share Delivery Date until such certificate is delivered, provided,
      however, that the certificate for the Warrant Shares is to be registered in
      the
      name of the Warrantholder. Nothing herein shall limit the Warrantholder’s right
      to pursue actual damages for the Company’s failure to deliver certificates
      representing any Warrant Shares, and the Warrantholder shall have the right
      to
      pursue all remedies available to it at law or in equity including, without
      limitation, a decree or specific performance and/or injunctive relief. If this
      Warrant shall have been exercised only in part, then, unless this Warrant has
      expired, the Company shall, at its expense, at the time of delivery of such
      certificates, within four (4) business days of exercise, deliver to the
      Warrantholder a new Warrant representing the number of shares with respect
      to
      which this Warrant shall not then have been exercised. As used herein, “business
      day” means a day, other than a Saturday or Sunday, on which banks in New York
      City are open for the general transaction of business. Each exercise hereof
      shall constitute the re-affirmation by the Warrantholder that the
      representations and warranties contained in Section 5 of the Purchase Agreement
      (as defined below) are true and correct in all material respects with respect
      to
      the Warrantholder as of the time of such exercise.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    (b)  Cashless
      Exercise.
      (i)
      Notwithstanding any other provision contained herein to the contrary, the
      Warrantholder may elect to receive, without the payment by the Warrantholder
      of
      the aggregate Warrant Price in respect of the shares of Common Stock to be
      acquired, shares of Common Stock equal to the value of this Warrant or any
      portion hereof by the surrender of this Warrant (or such portion of this Warrant
      being so exercised) together with the Net Issue Election Notice annexed hereto
      as Appendix B duly executed, at the office of the Company. The Net Issue
      Election Notice must be received by the Company not more than five (5) business
      days after the date the election is made. Thereupon, the Company shall issue
      to
      the Warrantholder such number of fully paid, validly issued and nonassessable
      shares of Common Stock as is computed using the following formula:

     

     

    X
      =
Y
      (A -
      B)

            
      A

     

    where 

     

    X
      = the
      number of shares of Common Stock which the Warrantholder has then requested
      be
      issued to the Warrantholder;

     

    Y
      = the
      total
      number of shares of Common Stock covered by this Warrant which the Warrantholder
      has surrendered at such time for cashless exercise (including both shares to
      be
      issued to the Warrantholder and shares to be canceled as payment
      therefor);

     

    A
      = the
      average closing “Market Price” of one share of Common Stock for the five (5)
      consecutive business days preceding the date the net issue election is made;
      and

     

    B
      = the
      Warrant Price in effect under this Warrant at the time the net issue election
      is
      made.

     

    (ii)
      For
      the purposes of this Agreement, “Market
      Price”
as
      of a
      particular date (the “Valuation
      Date”)
      shall
      mean the following: (a) if the Common Stock is then listed on a national stock
      exchange, the closing sale price of one share of Common Stock on such exchange
      on the last trading day prior to the Valuation Date; (b) if the Common Stock
      is
      then quoted on The Nasdaq Stock Market, Inc. (“Nasdaq”),
      the
      National Association of Securities Dealers, Inc. OTC Bulletin Board (the
“Bulletin
      Board”)
      or
      such similar exchange or association, the closing sale price of one share of
      Common Stock on Nasdaq, the Bulletin Board or such other exchange or association
      on the last trading day prior to the Valuation Date or, if no such closing
      sale
      price is available, the average of the high bid and the low asked price quoted
      thereon on the last trading day prior to the Valuation Date; or (c) if the
      Common Stock is not then listed on a national stock exchange or quoted on
      Nasdaq, the Bulletin Board or such other exchange or association, the fair
      market value of one share of Common Stock as of the Valuation Date, shall be
      determined in good faith by the Board of Directors of the Company and the
      Warrantholder. If the Common Stock is not then listed on a national securities
      exchange, the Bulletin Board or such other exchange or association, the Board
      of
      Directors of the Company shall respond promptly, in writing, to an inquiry
      by
      the Warrantholder prior to the exercise hereunder as to the fair market value
      of
      a share of Common Stock as determined by the Board of Directors of the Company.
      In the event that the Board of Directors of the Company and the Warrantholder
      are

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    unable
      to
      agree upon the fair market value, the Company and the Warrantholder shall
      jointly select an appraiser, who is experienced in such matters. The decision
      of
      such appraiser shall be final and conclusive, and the cost of such appraiser
      shall be borne equally by the Company and the Warrantholder. Such adjustment
      shall be made successively whenever such a payment date is fixed.

     

    (c)  Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Exercise.
      In
      addition to any other rights available to the Holder, if the Company fails
      to
      cause its transfer agent to transmit to the Holder a certificate or certificates
      representing the Warrant Shares pursuant to an exercise on or before the Warrant
      Share Delivery Date, and if after such date the Holder is required by its broker
      to purchase (in an open market transaction or otherwise) shares of Common Stock
      to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
      the Holder anticipated receiving upon such exercise (a “Buy-In”),
      then
      the Company shall (1) pay in cash to the Holder the amount by which (x) the
      Holder’s total purchase price (including brokerage commissions, if any) for the
      shares of Common Stock so purchased exceeds (y) the amount obtained by
      multiplying (A) the number of Warrant Shares that the Company was required
      to
      deliver to the Holder in connection with the exercise at issue times (B) the
      price at which the sell order giving rise to such purchase obligation was
      executed, and (2) at the option of the Holder, either reinstate the portion
      of
      the Warrant and equivalent number of Warrant Shares for which such exercise
      was
      not honored or deliver to the Holder the number of shares of Common Stock that
      would have been issued had the Company timely complied with its exercise and
      delivery obligations hereunder. For example, if the Holder purchases Common
      Stock having a total purchase price of $11,000 to cover a Buy-In with respect
      to
      an attempted exercise of shares of Common Stock with an aggregate sale price
      giving rise to such purchase obligation of $10,000, under clause (1) of the
      immediately preceding sentence, the Company shall be required to pay the Holder
      $1,000. The Holder shall provide the Company written notice indicating the
      amounts payable to the Holder in respect of the Buy-In and, upon request of
      the
      Company, evidence of the amount of such loss. Nothing herein shall limit a
      Holder’s right to pursue any other remedies available to it hereunder, at law or
      in equity including, without limitation, a decree of specific performance and/or
      injunctive relief with respect to the Company’s failure to timely deliver
      certificates representing shares of Common Stock upon exercise of the Warrant
      as
      required pursuant to the terms hereof.

     

    (d)  Exercise
      Limitations.
      The
      Company shall not effect any exercise of this Warrant, and a Holder shall not
      have the right to exercise any portion of this Warrant, pursuant to this Section
      or otherwise, to the extent that after giving effect to such issuance after
      exercise as set forth on the applicable Warrant Exercise Form, such Holder
      (together with such Holder’s Affiliates, and any other person or entity acting
      as a group together with such Holder or any of such Holder’s Affiliates), as set
      forth on the applicable Warrant Exercise Form, would beneficially own in excess
      of the Beneficial Ownership Limitation (as defined below), excluding any Holder
      which, together with its affiliates, is a beneficial owner of more than 5%
      of
      the Company’s Common Stock (calculated in accordance with Section 13(d) of the
      Securities Exchange Act of 1934, as amended (the “Exchange
      Act”)
      and
      the rule and regulations thereunder) immediately prior to the Initial Exercise
      Date.  For purposes of the foregoing sentence, the number of shares of
      Common Stock beneficially owned by such Holder and its Affiliates shall include
      the number of

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

     shares
      of Common Stock issuable upon exercise of this Warrant with respect to which
      such determination is being made, but shall exclude the number of shares of
      Common Stock which would be issuable upon (A) exercise of the remaining,
      nonexercised portion of this Warrant beneficially owned by such Holder or any
      of
      its Affiliates and (B) exercise or conversion of the unexercised or nonconverted
      portion of any other securities of the Company (including, without limitation,
      any other Preferred Stock or Warrants) subject to a limitation on conversion
      or
      exercise analogous to the limitation contained herein beneficially owned by
      such
      Holder or any of its Affiliates.  Except as set forth in the preceding
      sentence, for purposes of this Section, beneficial ownership shall be calculated
      in accordance with Section 13(d) of the Exchange Act and the rules and
      regulations promulgated thereunder, it being acknowledged by a Holder that
      the
      Company is not representing to such Holder that such calculation is in
      compliance with Section 13(d) of the Exchange Act and such Holder is solely
      responsible for any schedules required to be filed in accordance therewith.
      To
      the extent that the limitation contained in this Section applies, the
      determination of whether this Warrant is exercisable (in relation to other
      securities owned by such Holder together with any Affiliates) and of which
      a
      portion of this Warrant is exercisable shall be in the sole discretion of a
      Holder, and the submission of a Warrant Exercise Form shall be deemed to be
      each
      Holder’s determination of whether this Warrant is exercisable (in relation to
      other securities owned by such Holder together with any Affiliates) and of
      which
      portion of this Warrant is exercisable, in each case subject to such aggregate
      percentage limitation, and the Company shall have no obligation to verify or
      confirm the accuracy of such determination. In addition, a determination as
      to
      any group status as contemplated above shall be determined in accordance with
      Section 13(d) of the Exchange Act and the rules and regulations promulgated
      thereunder. For purposes of this Section in determining the number of
      outstanding shares of Common Stock, a Holder may rely on the number of
      outstanding shares of Common Stock as reflected in (x) the Company’s most recent
      Form 10-QSB or Form 10-KSB, as the case may be, (y) a more recent public
      announcement by the Company or (z) any other notice by the Company or the
      Company’s Transfer Agent setting forth the number of shares of Common Stock
      outstanding.  Upon the written or oral request of a Holder, the Company
      shall within two (2) Trading Days confirm orally and in writing to such Holder
      the number of shares of Common Stock then outstanding.  In any case, the
      number of outstanding shares of Common Stock shall be determined after giving
      effect to the conversion or exercise of securities of the Company, including
      this Warrant, by such Holder or its Affiliates since the date as of which such
      number of outstanding shares of Common Stock was reported. The “Beneficial
      Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock
      outstanding immediately after giving effect to the issuance of shares of Common
      Stock issuable upon exercise of this Warrant. The Beneficial Ownership
      Limitation provisions of this Section 3(d) may be waived by such Holder, at
      the
      election of such Holder, upon not less than sixty-one (61) days’ prior notice to
      the Company to change the Beneficial Ownership Limitation to 9.99% of the number
      of shares of the Common Stock outstanding immediately after giving effect to
      the
      issuance of shares of Common Stock upon exercise of this Warrant, and the
      provisions of this Section 3(d) shall continue to apply. Upon such a change
      by a
      Holder of the Beneficial Ownership Limitation from such 4.99% limitation to
      such
      9.99% limitation, the Beneficial Ownership Limitation may not be further waived
      by such Holder. The provisions of this paragraph shall be construed and
      implemented in a manner otherwise than in strict conformity with the terms
      of
      this Section 3(d) to correct this paragraph (or any portion hereof) which may
      be
      defective or inconsistent with the intended Beneficial Ownership Limitation
      herein contained or to make changes or supplements necessary or

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    desirable
      to properly give effect to such limitation. The limitations contained in this
      paragraph shall apply to a successor holder of this Warrant.

     

    Section
      4.  Compliance
      with the Securities Act of 1933.
      Except
      as provided in the Purchase Agreement, the Company may cause the legend set
      forth on the first page of this Warrant to be set forth on each Warrant or
      similar legend on any security issued or issuable upon exercise of this Warrant,
      unless counsel for the Company is of the opinion as to any such security that
      such legend is unnecessary.

     

    Section
      5.  Payment
      of Taxes.
      The
      Company will pay any documentary stamp taxes attributable to the initial
      issuance of Warrant Shares issuable upon the exercise of the Warrant; provided,
      however, that the Company shall not be required to pay any tax or taxes which
      may be payable in respect of any transfer involved in the issuance or delivery
      of any certificates for Warrant Shares in a name other than that of the
      Warrantholder in respect of which such shares are issued, and in such case,
      the
      Company shall not be required to issue or deliver any certificate for Warrant
      Shares or any Warrant until the person requesting the same has paid to the
      Company the amount of such tax or has established to the Company’s reasonable
      satisfaction that such tax has been paid. The Warrantholder shall be responsible
      for income taxes due under federal, state or other law, if any such tax is
      due.

     

    Section
      6.  Mutilated
      or Missing Warrants.
      In case
      this Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall
      issue in exchange and substitution of and upon cancellation of the mutilated
      Warrant, or in lieu of and substitution for the Warrant lost, stolen or
      destroyed, a new Warrant of like tenor and for the purchase of a like number
      of
      Warrant Shares, but only upon receipt of evidence reasonably satisfactory to
      the
      Company of such loss, theft or destruction of the Warrant, and with respect
      to a
      lost, stolen or destroyed Warrant, reasonable indemnity or bond with respect
      thereto, if requested by the Company.

     

    Section
      7.  Reservation
      of Common Stock.
      The
      Company hereby represents and warrants that there have been reserved, and the
      Company shall at all applicable times keep reserved until issued (if necessary)
      as contemplated by this Section 7, out of the authorized and unissued shares
      of
      Common Stock, sufficient shares to provide for the exercise of the rights of
      purchase represented by this Warrant. The Company agrees that all Warrant Shares
      issued upon due exercise of the Warrant shall be, at the time of delivery of
      the
      certificates for such Warrant Shares, duly authorized, validly issued, fully
      paid and non-assessable shares of Common Stock of the Company.

     

    Section
      8.  Adjustments.
      Subject
      and pursuant to the provisions of this Section 8, the Warrant Price and number
      of Warrant Shares subject to this Warrant shall be subject to adjustment from
      time to time as set forth hereinafter.

     

    (a)  Notwithstanding
      the initial Warrant Price of $1.50 per share (the “Initial
      Warrant Price”)
      in the
      event that during the 2006 calendar year the Company and its Subsidiaries do
      not
      receive bona fide purchase orders, commitments, contracts or lease arrangements
      (provided that such purchase orders, commitments, contracts or lease
      arrangements are not terminable at the election of the other party)
      (collectively “Orders”)
      from
      customers, including distributors, for 150 Sterimed or Sterimed Junior Units
      (the “Units”)
      (the
“Milestone
      Amount”),
      

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    as
      of
      January 1, 2007, the Initial Warrant Price shall be reduced by $0.05 for each
      block of ten Units under the Milestone Amount, up to a maximum reduction of
      $0.75, which amounts are subject to adjustment pursuant to Subsections (b)
      and
      (c) of this Section 8. For example, should only 128 Units be subject Orders,
      as
      of January 1, 2007, the Initial Warrant Price would be reduced by $.15 to $1.35
      per share, subject to calculation by reason of any adjustment prior to January
      1, 2007 under this Section 8. For purposes of calculating the Units under this
      Subsection, at least 15 Units must be the Sterimed, and if at least 15 Sterimeds
      are subject to Orders, each additional Order for the Sterimed shall count as
      the
      equivalent of two Sterimed Juniors. The calculation of Orders shall not be
      subject to the principles followed by the Company in recognition of revenues
      for
      its financial reporting.

     

    (b)  If
      the
      Company shall, at any time or from time to time while this Warrant is
      outstanding, pay a dividend or make a distribution on its Common Stock in shares
      of Common Stock, subdivide its outstanding shares of Common Stock into a greater
      number of shares or combine its outstanding shares of Common Stock into a
      smaller number of shares or issue by reclassification of its outstanding shares
      of Common Stock any shares of its capital stock (including any such
      reclassification in connection with a consolidation or merger in which the
      Company is the continuing corporation), then the number of Warrant Shares
      purchasable upon exercise of the Warrant and the Warrant Price in effect
      immediately prior to the date upon which such change shall become effective,
      shall be adjusted by the Company so that the Warrantholder thereafter exercising
      the Warrant shall be entitled to receive the number of shares of Common Stock
      or
      other capital stock which the Warrantholder would have received if the Warrant
      had been exercised immediately prior to such event upon payment of a Warrant
      Price that has been adjusted to reflect a fair allocation of the economics
      of
      such event to the Warrantholder. Such adjustments shall be made successively
      whenever any event listed above shall occur.

     

    (c)  If
      any
      capital reorganization, reclassification of the capital stock of the Company,
      consolidation or merger of the Company with another corporation in which the
      Company is not the survivor, or sale, transfer or other disposition of all
      or
      substantially all of the Company’s assets to another corporation shall be
      effected, then, as a condition of such reorganization, reclassification,
      consolidation, merger, sale, transfer or other disposition, lawful and adequate
      provision shall be made whereby each Warrantholder shall thereafter have the
      right to purchase and receive upon the basis and upon the terms and conditions
      herein specified and in lieu of the Warrant Shares immediately theretofore
      issuable upon exercise of the Warrant, such shares of stock, securities or
      assets as would have been issuable or payable with respect to or in exchange
      for
      a number of Warrant Shares equal to the number of Warrant Shares immediately
      theretofore issuable upon exercise of the Warrant, had such reorganization,
      reclassification, consolidation, merger, sale, transfer or other disposition
      not
      taken place, and in any such case appropriate provision shall be made with
      respect to the rights and interests of each Warrantholder to the end that the
      provisions hereof (including, without limitation, provision for adjustment
      of
      the Warrant Price) shall thereafter be applicable, as nearly equivalent as
      may
      be practicable in relation to any shares of stock, securities or assets
      thereafter deliverable upon the exercise hereof. The Company shall not effect
      any such consolidation, merger, sale, transfer or other disposition unless
      prior
      to or simultaneously with the consummation thereof the successor corporation
      (if
      other than the Company) resulting from such consolidation or merger, or the
      corporation purchasing or otherwise acquiring such assets or other appropriate
      corporation or entity shall assume the obligation to deliver to the
      Warrantholder, at the last address of the Warrantholder

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

     

    appearing
      on the books of the Company, such shares of stock, securities or assets as,
      in
      accordance with the foregoing provisions, the Warrantholder may be entitled
      to
      purchase, and the other obligations under this Warrant. The provisions of this
      subsection (c) shall similarly apply to successive reorganizations,
      reclassifications, consolidations, mergers, sales, transfers or other
      dispositions. Notwithstanding the provisions of the subsection (c), in the
      event
      that holders of Common Stock receive only cash for their shares of Common Stock
      as a result of any such reorganization, reclassification, consolidation, merger,
      sale, transfer or other disposition, not later than one business day after
      the
      effective date of such reorganization, reclassification, consolidation, merger,
      sale, transfer or other disposition, the Warrantholder shall be entitled to
      receive in full satisfaction of its rights under this Warrant an amount in
      cash
      (the “Spread”)
      equal
      to (x) the difference between (A) the per share cash to be received by holders
      of Common Stock in connection with such reorganization, reclassification,
      consolidation, merger, sale, transfer or other disposition and (B) the Warrant
      Price in effect immediately prior to the effective date of such reorganization,
      reclassification, consolidation, merger, sale, transfer or other disposition,
      multiplied by (y) the number of shares of Common Stock for which this Warrant
      is
      exercisable immediately prior to the effective date of such reorganization,
      reclassification, consolidation, merger, sale, transfer or other disposition.
      Upon payment in full of the Spread to the Warrantholder as provided above,
      this
      Warrant shall expire and be of no further force and effect. In the event that
      the Spread is not a positive number, no amount shall be payable to the
      Warrantholder as a result of such reorganization, reclassification,
      consolidation, merger, sale, transfer or other disposition, and this Warrant
      shall expire and be of no further force and effect as of the effective date
      of
      such reorganization, reclassification, consolidation, merger, sale, transfer
      or
      other disposition.

     

    (d)  In
      case
      the Company shall fix a record date for the making of a distribution to all
      holders of Common Stock (including any such distribution made in connection
      with
      a consolidation or merger in which the Company is the continuing corporation)
      of
      evidences of indebtedness or assets (other than cash dividends or cash
      distributions payable out of consolidated earnings or earned surplus or
      dividends or distributions referred to in Section 8(b)), or subscription rights
      or warrants, the Warrant Price to be in effect after such record date shall
      be
      determined by multiplying the Warrant Price in effect immediately prior to
      such
      record date by a fraction, the numerator of which shall be the total number
      of
      shares of Common Stock outstanding multiplied by the Market Price per share
      of
      Common Stock immediately prior to such payment date, less the fair market value
      (as determined by the Company’s Board of Directors in good faith) of said assets
      or evidences of indebtedness so distributed, or of such subscription rights
      or
      warrants, and the denominator of which shall be the total number of shares
      of
      Common Stock outstanding multiplied by such Market Price per share of Common
      Stock immediately prior to such payment date.

     

    (e)  An
      adjustment to the Warrant Price shall become effective immediately after the
      payment date in the case of each dividend or distribution and immediately after
      the effective date of each other event which requires an
      adjustment.

     

    (f)  In
      the
      event that, as a result of an adjustment made pursuant to this Section 8, the
      Warrantholder shall become entitled to receive any shares of capital stock
      of
      the Company other than shares of Common Stock, the number of such other shares
      so receivable upon exercise of this Warrant shall be subject thereafter to
      adjustment from time to time in a manner and on

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

     

     terms
      as nearly equivalent as practicable to the provisions with respect to the
      Warrant Shares contained in this Warrant.

     

    Section
      9.  Fractional
      Interest.
      The
      Company shall not be required to issue fractions of Warrant Shares upon the
      exercise of this Warrant. If any fractional share of Common Stock would, except
      for the provisions of the first sentence of this Section 9, be deliverable
      upon
      such exercise, the Company, in lieu of delivering such fractional share, shall
      pay to the exercising Warrantholder an amount in cash equal to the Market Price
      of such fractional share of Common Stock on the date of exercise.

     

    Section
      10.  Benefits.
      Nothing
      in this Warrant shall be construed to give any person, firm or corporation
      (other than the Company and the Warrantholder) any legal or equitable right,
      remedy or claim, it being agreed that this Warrant shall be for the sole and
      exclusive benefit of the Company and the Warrantholder.

     

    Section
      11.  Notices
      to Warrantholder.
      Upon
      the happening of any event requiring an adjustment of the Warrant Price, the
      Company shall promptly give written notice thereof to the Warrantholder at
      the
      address appearing in the records of the Company, stating the adjusted Warrant
      Price and the adjusted number of Warrant Shares resulting from such event and
      setting forth in reasonable detail the method of calculation and the facts
      upon
      which such calculation is based. Failure to give such notice to the
      Warrantholder or any defect therein shall not affect the legality or validity
      of
      the subject adjustment.

     

    Section
      12.  Identity
      of Transfer Agent.
      The
      Transfer Agent for the Common Stock is American Stock Transfer & Trust
      Company. Upon the appointment of any subsequent transfer agent for the Common
      Stock or other shares of the Company’s capital stock issuable upon the exercise
      of the rights of purchase represented by the Warrant, the Company will mail
      to
      the Warrantholder a statement setting forth the name and address of such
      transfer agent.

     

    Section
      13.  Notices.
      Unless
      otherwise provided, any notice required or permitted under this Warrant shall
      be
      given in writing and shall be deemed effectively given as hereinafter described
      (i) if given by personal delivery, then such notice shall be deemed given upon
      such delivery, (ii) if given by telex or facsimile, then such notice shall
      be
      deemed given upon receipt of confirmation of complete transmittal, (iii) if
      given by mail, then such notice shall be deemed given upon the earlier of (A)
      receipt of such notice by the recipient or (B) three (3) days after such notice
      is deposited in first class mail, postage prepaid, and (iv) if given by an
      internationally recognized overnight air courier, then such notice shall be
      deemed given one (1) business day after delivery to such carrier. All notices
      shall be addressed as follows: if to the Warrantholder, at its address as set
      forth in the Company’s books and records and, if to the Company, at the address
      as follows, or at such other address as the Warrantholder or the Company may
      designate by ten (10) days’ advance written notice to the other:

     

    If
      to the
      Company:

     

    Caprius,
      Inc.

    One
      University Plaza

    Hackensack,
      NJ 07601

    Attention:
      George Aaron, President

    Fax:
      (201) 342-0991

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

     

    With
      a
      copy to:

     

    Thelen
      Reid & Priest LLP

    875
      Third
      Avenue

    New
      York,
      NY 10022

    Attention:
      Bruce A. Rich, Esq.

    Fax:
      (212) 603-2001

     

    Section
      14.  Registration
      Rights.
      The
      initial Warrantholder is entitled to the benefit of certain registration rights
      with respect to the shares of Common Stock issuable upon the exercise of this
      Warrant as provided in the Registration Rights Agreement entered into in
      connection with the closing of the Purchase Agreement, and any subsequent
      Warrantholder may be entitled to such rights.

     

    Section
      15.  Successors.
      All the
      covenants and provisions hereof by or for the benefit of the Warrantholder
      shall
      bind and inure to the benefit of its respective successors and assigns
      hereunder. 

     

    Section
      16.  Governing
      Law; Consent to Jurisdiction; Waiver of Jury Trial.
      This
      Warrant shall be governed by, and construed in accordance with, the internal
      laws of the State of New York, without reference to the choice of law provisions
      thereof. The Company and, by accepting this Warrant, the Warrantholder, each
      irrevocably submits to the exclusive jurisdiction of the courts of the State
      of
      New York located in New York County and the United States District Court for
      the
      Southern District of New York for the purpose of any suit, action, proceeding
      or
      judgment relating to or arising out of this Warrant and the transactions
      contemplated hereby. Service of process in connection with any such suit, action
      or proceeding may be served on each party hereto anywhere in the world by the
      same methods as are specified for the giving of notices under this Warrant.
      The
      Company and, by accepting this Warrant, the Warrantholder, each irrevocably
      consents to the jurisdiction of any such court in any such suit, action or
      proceeding and to the laying of venue in such court. The Company and, by
      accepting this Warrant, the Warrantholder, each irrevocably waives any objection
      to the laying of venue of any such suit, action or proceeding brought in such
      courts and irrevocably waives any claim that any such suit, action or proceeding
      brought in any such court has been brought in an inconvenient forum.
EACH
      OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES
      ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS
      WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
      WAIVER.

     

    Section
      17.  No
      Rights as Stockholder.
      Prior
      to the exercise of this Warrant in accordance with Section 3 hereof, the
      Warrantholder shall not have or exercise any rights as a stockholder of the
      Company by virtue of its ownership of this Warrant.

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

     

    Section
      18.  Amendment;
      Waiver; Reduction of Warrant Price.
      Any
      term of this Warrant may be amended or waived (including the adjustment
      provisions included in Section 8 of this Warrant) upon the written consent
      of
      the Company and the holders of Series A Warrants representing at least 66%
      of
      the number of shares of Common Stock then subject to all outstanding
      Series A Warrants, which consent shall be binding on all holders of
      Series A Warrants; provided
      that (x)
      any such amendment or waiver must apply to all Series A Warrants; and (y) the
      number of Warrant Shares subject to this Warrant, the Warrant Price and the
      Expiration Date may not be amended, and the right to exercise this Warrant
      may
      not be altered or waived, without the written consent of the Warrantholder.
      Notwithstanding the proviso in the immediately preceding sentence, to the extent
      permitted by applicable law, the Company from time to time may unilaterally
      reduce the Warrant Price by any amount so long as (i) the period during which
      such reduction is in effect is at least twenty (20) days, (ii) the reduction
      is
      irrevocable during such period and (iii) the Company's Board of Directors shall
      have made a determination that such reduction would be in the best interests
      of
      the Company. Whenever the Warrant Price is reduced pursuant to the preceding
      sentence, the Company shall mail or cause to be mailed to the Warrantholder
      a
      notice of the reduction at least five (5) days prior to the date the reduced
      Warrant Price is to take effect, which notice shall state the reduced Warrant
      Price and the period during which it will be in effect.

     

    Section
      19.  Section
      Headings.
      The
      section headings in this Warrant are for the convenience of the Company and
      the
      Warrantholder and in no way alter, modify, amend, limit or restrict the
      provisions hereof.

     

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, as
      of
      the __th
      day of
      February, 2006.

     

    
      	 	
              CAPRIUS,
                INC.

            
	 	
              By:
                /s/

            	
              Jonathan
                Jods

            
	 	 	
              Jonathan
                Jods

              Chief
                Financial Officer

            

    

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

    

    APPENDIX
      A

    CAPRIUS,
      INC.

    WARRANT
      EXERCISE FORM

     

    To
      Caprius, Inc.:

     

    The
      undersigned hereby irrevocably elects to exercise the right of purchase
      represented by the within Warrant (“Warrant”) for, and to purchase thereunder by
      the payment of the Warrant Price and surrender of the Warrant, _______________
      shares of Common Stock (“Warrant Shares”) provided for therein, and requests
      that certificates for the Warrant Shares be issued as follows: 

     

    
      	 
	
              Name

            
	
              Address

            
	 
	
              Federal
                Tax ID or Social Security No.

            

    

    

    
      	
              and
                delivered by

            	
              (certified
                mail to the above address, or 

              (electronically
                (provide DWAC Instructions:__________________), or

            
	 	 
	 	
              (other  (specify):

            
	 	 	
              ).

            

    

    

     

    and,
      if
      the number of Warrant Shares shall not be all the Warrant Shares purchasable
      upon exercise of the Warrant, that a new Warrant for the balance of the Warrant
      Shares purchasable upon exercise of this Warrant be registered in the name
      of
      the undersigned Warrantholder or the undersigned’s Assignee as below indicated
      and delivered to the address stated below.

     

    Dated:
      ___________________, ____

     

    
      	 	
              Signature:

            	 
	
              Note:
                The signature must correspond with the name of the Warrantholder
                as
                written on the first page of the Warrant in every particular, without
                alteration or enlargement or any change whatever, unless the Warrant
                has
                been assigned.

            	 	 
	 	 	
              Name
                (please print)

            
	 	 	 
	 	 	 
	 	 	
              Address

            
	 	 	 
	 	 	
              Federal
                Tax ID or Social Security No.

              Social
                Security No.

            
	 	 	 
	 	 	
              Assignee:

            
	 	 	 
	 	 	 
	 	 	 

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    APPENDIX
      B

    CAPRIUS,
      INC.

    NET
      ISSUE
      ELECTION NOTICE

    To:
      Caprius, Inc.

     

    
      	
              Date:[

            	 	
              ]

            
	 	 	 

    

    The
      undersigned hereby elects under Section
      3(b)
      of this
      Warrant to surrender the right to purchase [____________] shares of Common
      Stock
      pursuant to this Warrant and hereby requests the issuance of [_____________]
      shares of Common Stock. The certificate(s) for the shares issuable upon such
      net
      issue election shall be issued in the name of the undersigned or as otherwise
      indicated below.

     

    
      	 
	 
	
              Signature

            
	 
	
              Name
                for Registration

            
	 
	
              Mailing
                Address

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