First Amendment to Subsidiary Guarantee dated April 30, 2008 between registrant and CAMOFI Master LDC

 

 

AMENDMENT  NO. 1, dated as of April 30, 2008 (this “Amendment”), to the Subsidiary Guarantee, dated as of March 31, 2006, made by each of the Guarantors, in favor of the Purchasers under the Purchase Agreement (the “Subsidiary Guarantee”).

 

 

WHEREAS, on March 31, 2006, the Company and the Purchasers entered into a loan transaction pursuant to which the Purchasers made a loan to the Company in the original aggregate principal amount of $5,000,000, which loan was evidenced by the Transaction Documents, including without limitation, the Notes;

 

WHEREAS, subsequent to March 31, 2006, from time to time the Company requested that changes be made to certain provisions included in the Transaction Documents, and the Purchasers agreed to make such changes;

 

WHEREAS, among other things, pursuant to a letter agreement dated March 22, 2007 between the Company and the Purchasers (the “March 2007 Letter Agreement”), the Maturity Date of the Notes was extended from January 1, 2008, to January 1, 2009;

 

WHEREAS, in partial consideration of the Purchasers agreeing to make the changes requested by the Company, pursuant to a letter agreement dated September 28, 2007 between the Company and the Purchasers (the “September 2007 Letter Agreement”), the aggregate principal amount outstanding on the Notes was increased by $250,000 to $5,250,000;

 

WHEREAS, in subsequent discussions the Company and the Secured Parties verbally agreed to further changes to the terms of the Notes, including further extensions of the Maturity Date and increases in the aggregate principal amount of the Notes;

 

WHEREAS, the parties now desire to amend the Subsidiary Guarantee to memorialize the (i) extension of the Maturity Date provided for in the March 2007 Letter Agreement, (ii) increase in the aggregate principal amount outstanding on the Notes provided for in the March 2007 Letter Agreement, (iii) subsequent verbal discussions between the Company and the Secured Parties, and (iv) the fact that such additional obligation on the Notes is intended to be included in the Obligations under the Subsidiary Guarantee.

 

 

1)   Definitions. Capitalized terms used and not defined herein shall have the meanings ascribed to them in the Subsidiary Guarantee and in the Purchase Agreement.

 

2)   Amendments.  (i) The reference to “Senior Secured Convertible Notes due January 1, 2008” in the first “Whereas” clause of the Subsidiary Guarantee shall be changed to “Senior Secured Convertible Notes due January 1, 2010 in the original aggregate principal amount of $6,051,250”;

 

(ii)   the term “Notes” in the first “Whereas” clause of the Subsidiary Guarantee shall mean the Senior Secured Convertible Notes in the aggregate principal amount of $6,051,250; and

 

(iii)  any reference to “Security Agreement” in the Subsidiary Guarantee shall mean the Security Agreement as amended to date.

 

3)    Conditions to Effectiveness.  This Amendment shall be effective as of the date first written above, but shall not become effective as of such date until this Amendment has been duly executed by the Company and the Holders.

 

4)   Continuing Effect of Subsidiary Guarantee.  Except as expressly amended hereby, the Subsidiary Guarantee shall remain unchanged and in full force and effect.

 

5)  Execution in Counterparts.  This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same agreement.  Delivery of an executed counterpart of this Amendment by facsimile shall be equally as effective as delivery of an original executed counterpart of this Amendment.

 

6)  Governing Law.  This Amendment will be governed by, and construed in accordance with, the laws of the state of New York applicable to contracts executed in and to be performed entirely within that state, without reference to conflicts of laws provisions.

 

 

[Signature page follows]

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.