AMENDMENTTO DEBENTURES, AGREEMENT AND WAIVER

 

1.

Incorporation of Preliminary Statements. The Recitals set forth above by this reference hereto are hereby incorporated into this Agreement.

 

2.

Waiver of Interest Payments.   Each September 2007 Purchaser, severally and not jointly with the other September 2007 Purchasers, hereby waives the Company’s obligation to pay the interest payments which would otherwise be due on October 1, 2008 and January 1, 2009 with respect to the September 2007 Debenture (collectively, the “September 2007 Waived Interest Payments”).

 

3.

Amendment to Monthly Redemption Date of the September 2007 Debentures.  The definition of “Monthly Redemption Date” in Section 1 of the September 2007 Debenture is hereby deleted and replaced in its entirety with the following:

 

4.

Increase to Outstanding Principal Amount of Debentures.  The outstanding principal amount of each September 2007 Debenture is hereby increased to an amount equal to 115% of the sum of (i) the outstanding principal amount of such September 2007 Debenture immediately prior hereto, plus (ii) an amount equal to the additional amount of interest that would have accrued on the September 2007 Debenture from July 1, 2008 through December 31, 2008 (the “New September 2007 Principal Amount”).

 

5.

Amendment to Monthly Redemption Amount of the September 2007 Debentures.  The definition of “Monthly Redemption Amount” in Section 1 the September 2007 Debenture is hereby amended to mean the New September 2007 Principal Amount (as defined above), divided by sixteen (16), plus accrued but unpaid interest, liquidated damages and any other amounts then owing to the Holder in respect of this Debenture.  The new Monthly Redemption Amount for each of the Purchasers, respectively, is set forth on Schedule 5 attached hereto.

 

6.

Tolling of Interest Accrual.  In consideration of the terms hereof, no interest shall accrue on the September 2007 Debentures after July 1, 2008 until January 1, 2008, at which time interest shall commence to accrue on the Amended September 2007 Debentures in accordance with their terms.

 

7.

Exempt Issuance. Each Purchaser, severally and not jointly with the other Purchasers, hereby agrees that the issuance by the Company of the New Securities shall constitute an “Exempt Issuance” pursuant to the Purchase Agreement.

 

8.

Waiver. To the extent any of the above described actions or issuances would constitute an Event of Default under the Debentures, each Purchaser hereby waives any such Events of Default relating solely to the actions or issuances set forth in this Agreement and each Purchaser hereby withdraws any notice or demand to the contrary.

 

9.

Representations and Warranties of the Company.  The Company hereby makes to the Purchasers the following representations and warranties:

 

a.

Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, its board of directors or its stockholders in connection therewith.  This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

b.

Issuance of the Securities.  The Securities are duly authorized and duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The shares underlying the Securities, when issued in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the shares underlying the Securities.

 

c.

No Conflicts.  The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien (except as contemplated by the Security Documents with respect to the Debentures) upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other material instrument (evidencing a Company or Subsidiary debt or otherwise) or other material understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

 

d.

Equal Consideration.  Except as set forth in this Agreement, no consideration has been offered or paid to any person to amend or consent to a waiver, modification, forbearance or otherwise of any provision of any of the Transaction Documents.

a Nevada corporation

Name:  Peter Berry

Title:  Chief Executive Officer, President

a Cayman Islands exempted company

Name:  Eric Swartz

Title:  Director

 

Name:  Adam Epstein

Title: Principal

Name:  Adam Epstein

Title:  Principal

Name:  Adam Epstein

Title:   Principal

 

 

 

 

 

 

 

BridgePointe Master Fund Ltd.

 

 

 

 

 

 

 

 

 

 

Enable Growth Partners LP

 

 

 

 

 

 

 

 

 

 

Enable Opportunity Partners LP

 

 

 

 

 

 

 

 

 

 

Pierce Diversified Strategy Master Fund LLC, Ena

 

 

 

 

 

 

 

 

 

 

Totals