Pursuant to the Ninth Amendment to Credit Agreement, the Senior Lender agreed to provide the Company with a $5.0 million non-revolving line of credit (the "New Line of Credit"), which may be drawn upon at any time prior to April 30, 2011. Advances under the New Line of Credit do not bear interest (unless an event of default occurs, in which case the interest rate would be 10% per annum) and mature on April 30, 2011. Advances under the New Line of Credit are secured by substantially all of the Company's assets. Upon execution of the New Line of Credit, the Company requested an advance of $2.5 million against the $5.0 million available under the New Line of Credit. The Senior Lender is obligated to fund the advance within 5 business days. The foregoing summary of the Ninth Amendment to Credit Agreement and terms of the non-revolving line of credit is qualified in its entirety by the full text of the Ninth Amendment to Credit Agreement and the Non-Revolving Promissory Note issued thereunder, copies of which are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively.

Pursuant to the terms of the Forbearance Agreement, the Senior Lender agreed to forbear from accelerating the maturity date for any portion of the Senior Debt Amount (as defined in Item 2.04 of this Current Report) and from exercising any of its rights and remedies with respect to the Senior Debt Amount until April 30, 2011 (the "Forbearance Period"); provided, however, that the Forbearance Period expires immediately if the Registrant defaults under the Forbearance Agreement or upon the commencement of a voluntary bankruptcy, insolvency, reorganization or similar proceeding or the commencement of any similar non-voluntary case or proceeding that remains undismissed or stayed for more than 30 days. Under the Forbearance Agreement, the Company is precluded from using the proceeds from the New Line of Credit to pay any portion of the Bridge Notes (described in Item 2.04 of this Current Report). The foregoing description of the Forbearance Agreement in qualified in its entirety by the full text of the Forbearance Agreement, a copy of which is attached hereto as Exhibit 10.3.

The default in payment of the amount due under the Bridge Notes constitutes an Event of Default under the Credit Agreement between the Company and its Senior Lender and a certain term note issued thereunder (which note is referred to in the Company's financial statements as "Term Note B"). The Event of Default under the Credit Agreement constitutes an Event of Default under three separate convertible promissory notes issued by the Company to the Senior Lender (the "Convertible Notes," which are refered to in the Company's financial statements as "Convertible Note 1," Convertible Note 2" and "Convertible Note 3"), as amended, and a certain term note (referred to in the Company's financial statements as the "Consent Fee Note") issued by the Company to its Senior Lender. As of January 3, 2011, the total amount of principal and interest owing to the Senior Lender under the Credit Agreement, Term Note B, the Convertible Notes and the Consent Fee Note was approximately $20.6 million ("Senior Debt Amount"). Pursuant to the terms of the Credit Agreement, Term Note B, the Convertible Notes and the Consent Fee Note, upon the occurrence of an Event of Default, the Senior Lender has the right to declare the entire Senior Debt Amount immediately due and payable. As disclosed under Item 1.01 above, pursuant to the Forbearance Agreement, the Senior Lender has agreed not to accelerate any portion of the Senior Debt Amount and to forbear from exercising any rights and remedies related thereto as long as the Forbearance Agreement remains in effect.

Upon execution of the Ninth Amendment to Credit Agreement, the Company issued the Senior Lender a three-year common stock purchase warrant (the "Lender Warrant") entitling the Senior Lender to purchase 5,555,555 shares of the Company's common stock at an exercise price of $0.45 per share. The Lender Warrant expires on January 3, 2014, contains standard and customary anti-dilution provisions for stock splits, stock dividends and similar corporate transactions and may be exercised on a cashless basis unless the shares underlying the Lender Warrant at the time of exercise are covered by an effective resale registration statement, in which case it must be exercised for cash. The foregoing description of the Lender Warrant is qualified in its entirety by reference to the complete terms of such Lender Warrant, the form of which is filed herewith as Exhibit 4.1, which are incorporated herein by reference.

In connection with the agreements to extend the maturity date of the Bridge Notes to April 30, 2011, on December 31, 2010, the Company issued to each of the Bridge Note holders that agreed to extend a warrant to purchase shares of the Company's common stock at an exercise price $0.67 per share (the "Extension Warrants"). The aggregate number of shares subject to the Extension Warrants is 26,850.   The Extension Warrants expire on December 31, 2015, contain standard and customary anti-dilution provisions for stock splits, stock dividends and similar corporate transactions and may be exercised on a cashless basis unless the shares underlying the Extension Warrants at the time of exercise are covered by an effective resale registration statement, in which case they must be exercised for cash. The foregoing description of the Extension Warrants is qualified in its entirety by reference to the complete terms of such Extension Warrants, the form of which is filed herewith as Exhibit 4.2, which are incorporated herein by reference.

The Lender Warrant and Extension Warrants were issued to "accredited investors" in transactions exempt from registration pursuant to Rule 506 of Regulation D of the Securities Act and similar exemptions under applicable state securities laws. The sale of the securities did not involve a public offering and was made without general solicitation or general advertising. The recipients of the Lender Warrant and Extension Warrant have represented that they are accredited investors, as that term is defined in Regulation D, and that they have acquired the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof.