Common use of Waivers and Amendment Clause in Contracts

Waivers and Amendment. (a) Each Purchaser hereby waives compliance by the Company with the obligations imposed by Section 4.13 of the Purchase Agreement regarding such Purchaser’s right to participate in the purchase of the New Debentures, as well as any advance made to the Company prior to the Closing that is either repaid from the proceeds or is given as full or partial consideration by the New Purchasers under the Additional Issuance Agreement. This Waiver shall not effect the rights set forth in Section 4.13 with respect to future financing after the issuance of the Additional Debentures and related Warrants. (b) Each Purchaser hereby waives the Company’s compliance with the restrictions imposed by Section 4.14 of the Purchase Agreement with respect to (i) the issuance of the New Debentures and New Warrants under this Additional Issuance Agreement, and acknowledges that issuances of additional New Debentures and New Warrants will not constitute transactions which result in an adjustment of the respective conversion or exercise prices of the Debentures or Warrants. Notwithstanding the foregoing, this Waiver shall not have any effect and the Company expressly acknowledges that its proposed issuance of shares of common stock, warrants and any future issuances of securities shall continue to be subject to the anti-dilution provisions of the Debentures and Warrants. (c) The “Termination Date” of all common stock purchase warrants held by each Holder (whether Short Term, Long Term or otherwise) (collectively, the “Warrants”) shall be extended to the later of the date set forth therein as the “Termination Date” and December 28, 2012 and the Warrants shall be exercisable immediately. Additionally, the Warrants are hereby amended such that they are exercisable via the “cashless exercise” provisions of Section 2(c) at any time notwithstanding whether or not there then exists and effective registration statement. As a result of the forgoing, the Short and Long Term warrants are hereafter identical and represent a single class of securities and the Company acknowledges that, for purposes of Rule 144, the date that the holding period begins to run for Warrant Shares is the date that such securities were purchased by the Holder. (d) Any holder may request from the Company, and the Company shall deliver to the Holder within 5 Trading Days, an amended and restated Debenture or Warrant reflecting the terms of this Amendment.

Waivers and Amendment. (a) Each Purchaser hereby waives compliance by the Company with the obligations imposed by Section 4.13 of the Purchase Agreement regarding such Purchaser’s right to participate in the purchase of the New Debentures, as well as any advance made to the Company prior to the Closing that is either repaid from the proceeds or is given as full or partial consideration by the New Purchasers under the Additional Issuance Agreement. This Waiver shall not effect the rights set forth in Section 4.13 with respect to future financing after the issuance of the up to $600,000 Additional Debentures and related Warrants.on or before January 31, 2007 (b) Each Purchaser hereby waives the Company’s compliance with the restrictions imposed by Section 4.14 of the Purchase Agreement with respect to (i) the issuance of the New Debentures and New Warrants under this the Additional Issuance Agreement, (ii) issuances, for the purposes of financing the Company’s operations of Common Stock, Warrants and Convertible Securities, provided such securities are not Variable Rate Securities and (iii) an issuances of debentures and warrants on the same terms and conditions as the issuance of Debentures and Warrants under the Additional Issuance Agreement. Each Purchaser acknowledges that issuances of additional New Debentures and New Warrants will not constitute transactions which result in an adjustment of the respective conversion or exercise prices of the Debentures or Warrants. Notwithstanding the foregoing, this Waiver shall not have any effect and the Company expressly acknowledges that its proposed issuance of shares of common stock, warrants and any future issuances of securities shall continue to be subject to the anti-dilution provisions of the Debentures and Warrants. (c) The “Termination Date” of all common stock purchase warrants held by each Holder (whether Short Term, Long Term or otherwise) (collectively, the “Warrants”) shall be extended to the later of the date set forth therein as the “Termination Date” and December 28, 2012 and the Warrants shall be exercisable immediately. Additionally, the Warrants are hereby amended such that they are exercisable via the “cashless exercise” provisions of Section 2(c) at any time notwithstanding whether or not there then exists and effective registration statement. As a result of the forgoing, the Short and Long Term warrants are hereafter identical and represent a single class of securities and the Company acknowledges that, for purposes of Rule 144, the date that the holding period begins to run for Warrant Shares is the date that such securities were purchased by the Holder. (d) Any holder may request from Each Purchaser hereby waives the Company’s compliance with the negative covenants imposed by Sections 7(a), 7(b) and 7(e) of the Company Debenture regarding the Company’s agreement not to create indebtedness and liens and to enter into agreements with respect thereto, provided such waiver shall deliver not diminish the Company’s obligation to refrain from granting security interests superior to or pari passu to the Holder within 5 Trading Dayssecurity interest granted to the holders of the Debentures, an except for additional Debentures. (e) The Debentures are hereby amended by removing the phrase “January 1, 2007, upon a redemption event pursuant to Section 6(a)” in the first sentence of Section 2(a) and restated Debenture or Warrant reflecting replacing such phrase with “January 1, 2007 (provided that interest due on January 1, 2007 and July 1, 2007 upon principal outstanding on such date shall be added to the terms of this Amendmentprincipal outstanding and shall thereafter bear interest at the rate set forth herein), upon a redemption event pursuant to Section 6(a)”.

Waivers and Amendment. (aSection 8(b) Each Purchaser of the Amended Loan Agreement is deleted, and the following paragraph is hereby waives compliance substituted in its place: So long as the Agent has authority pursuant to Section 11(a), no amendment, modification, termination, or waiver of any provision of this Amended Loan Agreement or any Loan Document to which any Pledgor is a party, nor consent to any departure by any Pledgor from this Amended Loan Agreement or any Loan Document to which it is a party, shall in any event be effective unless the same shall be in writing and signed by the Company with Agent, and then such waiver or consent shall be effective only in the obligations imposed specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by Section 4.13 the Agent and the Requisite Lenders of the Purchase Agreement regarding such Purchaser’s right to participate in the purchase affected Second Amended and Restated Note, do any of the New Debentures, as well as any advance made to the Company prior to the Closing that is either repaid from the proceeds or is given as full or partial consideration by the New Purchasers under the Additional Issuance Agreement. This Waiver shall not effect the rights set forth in Section 4.13 with respect to future financing after the issuance of the Additional Debentures and related Warrants. (b) Each Purchaser hereby waives the Company’s compliance with the restrictions imposed by Section 4.14 of the Purchase Agreement with respect to following: (i) reduce the issuance principal of, or interest on, such Requisite Lenders’ Second Amended and Restated Notes, or any fees hereunder, or modify any provisions relating to conversion of the New Debentures Requisite Lenders’ Second Amended and New Warrants Restated Notes, or any other economic terms of the Requisite Lenders’ Second Amended and Restated Notes; (ii) change any date fixed for any payment of principal of, or interest on, the Requisite Lenders’ Second Amended and Restated Notes or any fees thereunder or hereunder; (iii) change the percentage of the unpaid principal amount of the Requisite Lenders’ Second Amended and Restated Notes which shall be required for the Lenders or any of them to take action hereunder; or (iv) amend, modify or waive any provision of this Section, and provided further that no amendment, waiver, or consent shall, unless in writing and signed by the Agent in addition to the Lenders required above to take such action, affect the rights, duties or liabilities of the Agent under this Additional Issuance AgreementAmended Loan Agreement or any of the Loan Documents. After the Agent’s authority terminates pursuant to Section 11(a), neither this Amended Loan Agreement or any Loan Document, nor any term hereof, may be amended, waived or terminated except by a written instrument signed by the Pledgors and the Requisite Lenders (as defined in Section 2.18(b) of Exhibit C hereto), and acknowledges that issuances of additional New Debentures and New Warrants will not constitute transactions which result in an adjustment of the respective conversion any such amendment, waiver or exercise prices of the Debentures or Warrantstermination shall be binding on all Lenders. Notwithstanding the foregoing, this Waiver each Lender shall not have the right, without the consent of the other Lenders, to agree to any effect modification or amendment to its Warrants or Amended and Restated Note, but such Lender shall give prompt written notice of the Company expressly acknowledges that its proposed issuance of shares of common stock, warrants and any future issuances of securities shall continue to be subject same to the anti-dilution provisions of the Debentures other Lenders and Warrants. (c) The “Termination Date” of all common stock purchase warrants held by each Holder (whether Short Term, Long Term or otherwise) (collectively, the “Warrants”) shall be extended to the later of the date set forth therein as the “Termination Date” and December 28, 2012 and the Warrants shall be exercisable immediately. Additionally, the Warrants are hereby amended such that they are exercisable via the “cashless exercise” provisions of Section 2(c) at any time notwithstanding whether or not there then exists and effective registration statement. As a result of the forgoing, the Short and Long Term warrants are hereafter identical and represent a single class of securities and the Company acknowledges that, for purposes of Rule 144, the date that the holding period begins to run for Warrant Shares is the date that such securities were purchased by the Holder. (d) Any holder may request from the CompanyAgent, and the Company Borrower, on request of any other Lender shall deliver enter into the same modification or amendment with such other Lender as to the Holder within 5 Trading Days, an amended its Warrants or Second Amended and restated Debenture or Warrant reflecting the terms of this AmendmentRestated Note.

Waivers and Amendment. (a) Each Purchaser hereby waives compliance by the Company with the obligations imposed by Section 4.13 of the Purchase Agreement regarding such Purchaser’s right to participate in the purchase of the New Debentures, as well as any advance made to the Company prior to the Closing that is either repaid from the proceeds or is given as full or partial consideration by the New Purchasers under the Additional Issuance Agreement. This Waiver shall not effect the rights set forth in Section 4.13 with respect to future financing after the issuance of the Additional Debentures and related Warrants. (b) Each Purchaser hereby waives the Company’s compliance with the restrictions imposed by Section 4.14 of the Purchase Agreement with respect to (i) the issuance of the New Debentures and New Warrants under this the Additional Issuance Agreement, (ii) the issuance of 240,000 options under the Company’s 2004 Stock Option Plan (“Plan Options”) to R▇▇▇▇ ▇▇▇▇▇, principal of a consulting firm, exercisable for four years at $0.40 per share which vest 40,000 on the first of each month commencing March 1, 2007; and (iii) 300,000 Plan Options to J▇▇▇▇ ▇▇▇▇▇▇▇ exercisable for seven years at an exercise price of $0.405. Each Purchaser acknowledges that issuances of additional New Debentures Debentures, Warrants and New Warrants the Plan Options will not constitute transactions which result in an adjustment of the respective conversion or exercise prices of the Debentures or Warrants. Notwithstanding the foregoing, this Waiver shall not have any effect and the Company expressly acknowledges that its proposed issuance of shares of common stock, warrants and any future issuances of securities shall continue to be subject to the anti-dilution provisions of the Debentures and Warrants. (c) The Purchasers hereby agree to amend and restate the definition of “Termination DateExempt Issuance” of all common stock purchase warrants held by each Holder (whether Short Term, Long Term or otherwise) (collectively, the “Warrants”) shall be extended to the later set forth in Section 1.1 of the date set forth therein Purchase Agreement to read as the “Termination Date” and December 28, 2012 and the Warrants shall be exercisable immediately. Additionally, the Warrants are hereby amended such that they are exercisable via the “cashless exercise” provisions of Section 2(c) at any time notwithstanding whether or not there then exists and effective registration statement. As a result of the forgoing, the Short and Long Term warrants are hereafter identical and represent a single class of securities and the Company acknowledges that, for purposes of Rule 144, the date that the holding period begins to run for Warrant Shares is the date that such securities were purchased by the Holder. (d) Any holder may request from the Company, and the Company shall deliver to the Holder within 5 Trading Days, an amended and restated Debenture or Warrant reflecting the terms of this Amendment.follows in its entirety:

Waivers and Amendment. (a) Each Purchaser hereby waives compliance by the Company with the obligations imposed by Section 4.13 of the Purchase Agreement regarding such Purchaser’s right to participate in the purchase of the New DebenturesDebenture, as well as any advance made to the Company prior to the Closing that is either repaid from the proceeds or is given as full or partial consideration by the New Purchasers under the Additional Issuance this Agreement. This Waiver shall not effect the rights set forth in Section 4.13 with respect to future financing after the issuance of the Additional Debentures and related Warrantsfinancing. (b) Each Purchaser hereby waives the Company’s compliance with the restrictions imposed by Section 4.14 of the Purchase Agreement with respect to (i) the issuance of the New Debentures and New Warrants under this the Additional Issuance Agreement, (ii) the issuance of 240,000 options under the Company’s 2004 Stock Option Plan (“Plan Options”) to R▇▇▇▇ ▇▇▇▇▇, principal of a consulting firm, exercisable for four years at $0.40 per share which vest 40,000 on the first of each month commencing March 1, 2007; and (iii) 300,000 Plan Options to J▇▇▇▇ ▇▇▇▇▇▇▇ exercisable for seven years at an exercise price of $0.405. Each Purchaser acknowledges that issuances of additional New Debentures Debentures, Warrants and New Warrants the Plan Options will not constitute transactions which result in an adjustment of the respective conversion or exercise prices of the Debentures or Warrants. Notwithstanding the foregoing, this Waiver shall not have any effect and the Company expressly acknowledges that its proposed issuance of shares of common stock, warrants and any future issuances of securities shall continue to be subject to the anti-dilution provisions of the Debentures and Warrants. (c) The Purchasers hereby agree to amend and restate the definition of “Termination Date” Exempt Issuance set forth in Section 1.1 of all common stock purchase warrants held by each Holder the Purchase Agreement to read as follows in its entirety: ‘Exempt Issuance’ means the issuance of (whether Short Terma) shares of Common Stock or options to employees, Long Term officers, directors or otherwise) bona fide consultants of the Company (collectively, the “Warrants”) shall be extended including shares of Common Stock issued pursuant to the later exercise of such options) pursuant to any stock or option plan duly adopted by a majority of the date set forth therein as the “Termination Date” and December 28, 2012 and the Warrants shall be exercisable immediately. Additionally, the Warrants are hereby amended such that they are exercisable via the “cashless exercise” provisions of Section 2(c) at any time notwithstanding whether or not there then exists and effective registration statement. As a result non-employee members of the forgoing, the Short and Long Term warrants are hereafter identical and represent a single class Board of securities and Directors of the Company acknowledges thator a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or securities exercisable or exchangeable for purposes or convertible into shares of Rule 144, Common Stock issued and outstanding on the date that the holding period begins to run for Warrant Shares is the date of this Agreement, provided that such securities were purchased by have not been amended since the Holder. date of this Agreement to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued in lieu of cash payments for engineering or design services, materials, production management or similar services, provided that such securities are not and will not be registered on a registration statement, or (d) Any holder may request from securities issued pursuant to acquisitions or strategic transactions approved by a majority of the Companydisinterested directors, and provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company shall deliver and in which the Company receives benefits in addition to the Holder within 5 Trading Daysinvestment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an amended and restated Debenture or Warrant reflecting the terms of this Amendmententity whose primary business is investing in securities.”

Waivers and Amendment. (a) Each Purchaser hereby waives compliance by the Company with the obligations imposed by Section 4.13 of the Purchase Agreement regarding such Purchaser’s right to participate in the purchase of the New DebenturesDebenture, as well as any advance made to the Company prior to the Closing that is either repaid from the proceeds or is given as full or partial consideration by the New Purchasers under the Additional Issuance this Agreement. This Waiver shall not effect the rights set forth in Section 4.13 with respect to future financing after the issuance of the up to $600,000 Additional Debentures and related Warrants(including the $288,000 of New Debenture purchased hereunder) on or before January 31, 2007. (b) Each Purchaser hereby waives the Company’s compliance with the restrictions imposed by Section 4.14 of the Purchase Agreement with respect to (i) the issuance of the New Debentures Debenture and New Warrants under this Additional Issuance Agreement, (ii) issuances, for the purposes of financing the Company’s operations of Common Stock, Warrants and Convertible Securities, provided such securities are not Variable Rate Securities and (iii) an issuances of debentures and warrants on the same terms and conditions as the issuance of Debentures and Warrants under this Agreement. Each Purchaser acknowledges that issuances of additional New Debentures and New Warrants will not constitute transactions which result in an adjustment of the respective conversion or exercise prices of the Debentures or Warrants. Notwithstanding the foregoing, this Waiver shall not have any effect and the Company expressly acknowledges that its proposed issuance of shares of common stock, warrants and any future issuances of securities shall continue to be subject to the anti-dilution provisions of the Debentures and Warrants. (c) The “Termination Date” of all common stock purchase warrants held by each Holder (whether Short Term, Long Term or otherwise) (collectively, the “Warrants”) shall be extended to the later of the date set forth therein as the “Termination Date” and December 28, 2012 and the Warrants shall be exercisable immediately. Additionally, the Warrants are hereby amended such that they are exercisable via the “cashless exercise” provisions of Section 2(c) at any time notwithstanding whether or not there then exists and effective registration statement. As a result of the forgoing, the Short and Long Term warrants are hereafter identical and represent a single class of securities and the Company acknowledges that, for purposes of Rule 144, the date that the holding period begins to run for Warrant Shares is the date that such securities were purchased by the Holder. (d) Any holder may request from Each Purchaser hereby waives the Company’s compliance with the negative covenants imposed by Sections 7(a), 7(b) and 7(e) of the Company Debenture regarding the Company’s agreement not to create indebtedness and liens and to enter into agreements with respect thereto, provided such waiver shall deliver not diminish the Company’s obligation to refrain from granting security interests superior to or pari passu to the Holder within 5 Trading Dayssecurity interest granted to the holders of the Debentures, an except for additional Debenture. (e) The Debentures are hereby amended by removing the phrase “January 1, 2007, upon a redemption event pursuant to Section 6(a)” in the first sentence of Section 2(a) and restated Debenture or Warrant reflecting replacing such phrase with “January 1, 2007 (provided that interest due on January 1, 2007 and July1, 2007 upon principal outstanding on such date shall be added to the terms of this Amendmentprincipal outstanding and shall thereafter bear interest at the rate set forth herein), upon a redemption event pursuant to Section 6(a)”.