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                    <p>&nbsp;</p>
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                    <p>&nbsp;</p>
                </td>

                <td valign="top" width="90%">
                    <p align="justify">&nbsp;</p>
                </td>
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            <tr>
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                    <p>&nbsp;</p>
                </td>

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                    <p>&nbsp;</p>
                </td>

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                    <p align="justify"><font size="2">The Series D Preferred Stock votes together with the Common Stock on an as-converted basis, and the vote of a majority of the shares of the Series D Preferred Stock is required to approve, among other things, (i) any issuance of capital stock senior to or pari passu with the Series D Preferred Stock; (ii) any increase in the number of authorized shares of Series D Preferred Stock; (iii) any dividends or payments on equity securities; (iv)
                    any amendment to the Company’s Certificate of Incorporation, By-laws or other governing documents that would result in an adverse change to the rights, preferences, or privileges of the Series D Preferred Stock; (v) any material deviation from the annual budget approved by the Board of Directors; and (vi) entering into any material contract not contemplated by the annual budget approved by the Board of Directors.</font></p>
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            <tr>
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                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p align="justify">&nbsp;</p>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p align="justify"><font size="2">So long as at least 25% of the shares of Series D Preferred Stock issued at closing are outstanding, the holders of the Series D Preferred Stock as a class will have the right to designate two members of the Company’s Board of Directors, and so long as at least 15% but less than 25% of the shares of Series D Preferred Stock issued at the closing are outstanding, the holders of the Series D Preferred Stock will have the right to
                    designate one member of the Board of Directors. Additionally, the holders of Series D Preferred Stock have the right to designate two non-voting observers to the Company’s Board of Directors.</font></p>
                </td>
            </tr>

            <tr>
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                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p align="justify">&nbsp;</p>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p align="justify"><font size="2">At the request of the holders of a majority of the shares of Common Stock issuable upon conversion of the Series D Preferred Stock and exercise of the Warrants, if ever, the Company will be required to file a registration statement with the SEC to register the resale of such shares of Common Stock under the Securities Act of 1933, as amended.</font></p>
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            <tr>
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                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p align="justify">&nbsp;</p>
                </td>
            </tr>

            <tr>
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                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p align="justify"><font size="2">Upon closing of the financing, UCC became entitled to a closing fee of $325,000, half of which was paid upon the closing and the balance of which will be paid in six monthly installments beginning January 1, 2010. The Company also reimbursed UCC for its fees and expenses in the amount of $250,000. Additionally, the Company entered into a management consulting agreement with UCC under which UCC provides the Company with management advisory
                    services and the Company pays UCC a fee of $125,000 per year for such services. Such fee will be reduced to $62,500 per year if the holders of the Series D Preferred Stock no longer have the right to nominate two directors and UCC no longer owns at least 40% of the Common Stock purchased by it at closing (assuming conversion of Series D Preferred Stock and exercise of Warrants held by it). The management consulting agreement will terminate when the holders of the Series D
                    Preferred Stock no longer have the right to nominate any directors and UCC no longer owns at least 20% of the Common Stock purchased by it at closing (assuming conversion of Series D Preferred Stock and exercise of Warrants held by it).</font></p>
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                    <p>&nbsp;</p>
                </td>

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                    <p>&nbsp;</p>
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                <td valign="top">
                    <p align="justify">&nbsp;</p>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p align="justify"><font size="2">Planned and Pro Forma Accounting:</font></p>
                </td>
            </tr>

            <tr>
                <td valign="top">
                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p align="justify">&nbsp;</p>
                </td>
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            <tr>
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                    <p>&nbsp;</p>
                </td>

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                    <p>&nbsp;</p>
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                    <p align="justify"><font size="2">The Company’s accounting for the financing will initially be reflected in its quarterly report for the period ended December 31, 2009. However, the Company has preliminarily evaluated the financial instruments issued under current accounting standards and has reached the following preliminary conclusions regarding classification and measurement of the financial instruments:</font></p>
                </td>
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            <tr>
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                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p align="justify">&nbsp;</p>
                </td>
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            <tr>
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                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p>&nbsp;</p>
                </td>

                <td valign="top">
                    <p align="justify"><font size="2">The Preferred Stock is a hybrid financial instrument that embodies the risks and rewards typically associated with both equity and debt instruments. Accordingly, the Company is required to evaluate the features of this contract to determine its nature as either an equity-type contract or a debt-type contract. The Company’s preliminary conclusions are that the Preferred Stock is generally more akin to a debt-type contract, principally
                    due to its redemption features. As a result, the embedded conversion feature and those other features that have risks associated with debt require bifurcation and classification in liabilities as a compound embedded derivative financial instrument. The principal accounting concept requires bifurcation in these instances when the embedded feature and the host contracts have risks that are not clearly and closely related. Certain exemptions to this rule, such as the
                    traditional conventional convertible exemption and the common-indexed exemption were not available to the Company because the Preferred Stock is not indexed, as that term is defined, to the Company’s common stock. Accordingly, the conversion feature, along with certain other features that have risks of equity, will require bifurcation and classification in liabilities as a compound embedded derivative financial instrument. Derivative financial instruments are required
                    to be measured at fair value both at inception and an ongoing basis. While the Company has not yet completed the valuation of the compound embedded derivative, the Company intends to utilize the Monte Carlo Simulation technique, because that model affords the flexibility to incorporate all of the assumptions that market participants would likely consider in determining the value for purposes of trading the hybrid contract. Further, due to the redemption feature, the Company
                    will be required to carry the host Preferred Stock outside of stockholders’ equity; generally referred to as the mezzanine and any discount resulting from the initial allocation will require accretion through charges to retained earnings, using the effective method, over the period from issuance to the redemption date.</font></p>
                </td>
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        </tbody></table>
<table>
<tbody><tr>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
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<tr>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
<td>
<p><font>The Series D Preferred Stock votes together with the Common Stock on an as-converted basis, and the vote of a majority of the shares of the Series D Preferred Stock is required to approve, among other things, (i) any issuance of capital stock senior to or pari passu with the Series D Preferred Stock; (ii) any increase in the number of authorized shares of Series D Preferred Stock; (iii) any dividends or payments on equity securities; (iv)
                    any amendment to the Company’s Certificate of Incorporation, By-laws or other governing documents that would result in an adverse change to the rights, preferences, or privileges of the Series D Preferred Stock; (v) any material deviation from the annual budget approved by the Board of Directors; and (vi) entering into any material contract not contemplated by the annual budget approved by the Board of Directors.</font></p>
</td>
</tr>
<tr>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
</tr>
<tr>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
<td>
<p><font>So long as at least 25% of the shares of Series D Preferred Stock issued at closing are outstanding, the holders of the Series D Preferred Stock as a class will have the right to designate two members of the Company’s Board of Directors, and so long as at least 15% but less than 25% of the shares of Series D Preferred Stock issued at the closing are outstanding, the holders of the Series D Preferred Stock will have the right to
                    designate one member of the Board of Directors. Additionally, the holders of Series D Preferred Stock have the right to designate two non-voting observers to the Company’s Board of Directors.</font></p>
</td>
</tr>
<tr>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
</tr>
<tr>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
<td>
<p><font>At the request of the holders of a majority of the shares of Common Stock issuable upon conversion of the Series D Preferred Stock and exercise of the Warrants, if ever, the Company will be required to file a registration statement with the SEC to register the resale of such shares of Common Stock under the Securities Act of 1933, as amended.</font></p>
</td>
</tr>
<tr>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
</tr>
<tr>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
<td>
<p><font>Upon closing of the financing, UCC became entitled to a closing fee of $325,000, half of which was paid upon the closing and the balance of which will be paid in six monthly installments beginning January 1, 2010. The Company also reimbursed UCC for its fees and expenses in the amount of $250,000. Additionally, the Company entered into a management consulting agreement with UCC under which UCC provides the Company with management advisory
                    services and the Company pays UCC a fee of $125,000 per year for such services. Such fee will be reduced to $62,500 per year if the holders of the Series D Preferred Stock no longer have the right to nominate two directors and UCC no longer owns at least 40% of the Common Stock purchased by it at closing (assuming conversion of Series D Preferred Stock and exercise of Warrants held by it). The management consulting agreement will terminate when the holders of the Series D
                    Preferred Stock no longer have the right to nominate any directors and UCC no longer owns at least 20% of the Common Stock purchased by it at closing (assuming conversion of Series D Preferred Stock and exercise of Warrants held by it).</font></p>
</td>
</tr>
<tr>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
</tr>
<tr>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
<td>
<p><font>Planned and Pro Forma Accounting:</font></p>
</td>
</tr>
<tr>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
</tr>
<tr>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
<td>
<p><font>The Company’s accounting for the financing will initially be reflected in its quarterly report for the period ended December 31, 2009. However, the Company has preliminarily evaluated the financial instruments issued under current accounting standards and has reached the following preliminary conclusions regarding classification and measurement of the financial instruments:</font></p>
</td>
</tr>
<tr>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
</tr>
<tr>
<td>
<p> </p>
</td>
<td>
<p> </p>
</td>
<td>
<p><font>The Preferred Stock is a hybrid financial instrument that embodies the risks and rewards typically associated with both equity and debt instruments. Accordingly, the Company is required to evaluate the features of this contract to determine its nature as either an equity-type contract or a debt-type contract. The Company’s preliminary conclusions are that the Preferred Stock is generally more akin to a debt-type contract, principally
                    due to its redemption features. As a result, the embedded conversion feature and those other features that have risks associated with debt require bifurcation and classification in liabilities as a compound embedded derivative financial instrument. The principal accounting concept requires bifurcation in these instances when the embedded feature and the host contracts have risks that are not clearly and closely related. Certain exemptions to this rule, such as the
                    traditional conventional convertible exemption and the common-indexed exemption were not available to the Company because the Preferred Stock is not indexed, as that term is defined, to the Company’s common stock. Accordingly, the conversion feature, along with certain other features that have risks of equity, will require bifurcation and classification in liabilities as a compound embedded derivative financial instrument. Derivative financial instruments are required
                    to be measured at fair value both at inception and an ongoing basis. While the Company has not yet completed the valuation of the compound embedded derivative, the Company intends to utilize the Monte Carlo Simulation technique, because that model affords the flexibility to incorporate all of the assumptions that market participants would likely consider in determining the value for purposes of trading the hybrid contract. Further, due to the redemption feature, the Company
                    will be required to carry the host Preferred Stock outside of stockholders’ equity; generally referred to as the mezzanine and any discount resulting from the initial allocation will require accretion through charges to retained earnings, using the effective method, over the period from issuance to the redemption date.</font></p>
</td>
</tr>
</tbody></table>