CONSENT AND WAIVER
Exhibit
99.3
This
CONSENT AND WAIVER (this “Consent
and Waiver”)
is
dated as of November 6, 2008, by and between MDWERKS, INC., a Delaware
corporation (the “Company”),
and
VICIS CAPITAL MASTER FUND (the “Consenting
Holder”),
a
series of the Vicis Capital Master Trust, a trust formed under the laws of
the
Cayman Islands.
WITNESSETH
WHEREAS,
the Consenting Holder is the sole holder of (i) shares of Series B Convertible
Preferred Stock of the Company (the “Series
B Preferred Stock”),
and
(ii) a warrant to purchase an aggregate of 53,333,334 shares of the Company’s
common stock, $.001 par value per share (the “Common
Stock”),
at an
exercise price of $0.75 per share subject to adjustment (the “Series
H Warrant”).
WHEREAS,
Section 7.3 of the Amended and Restated Certificate of Designations Designating
the Series B Convertible Preferred Stock (the “COD”)
provides for adjustment of the Conversion Price (as defined in the COD) upon
certain issuances of Common Stock at a price less than the Applicable Price
or,
Options or Convertible Securities (each as defined in the COD) for which the
Common Stock is issuable at a price less than the Applicable Price;
WHEREAS,
Section 2(a) of the Series H Warrant provides for adjustment of the exercise
price and number of Warrant Shares (as defined in the Series H Warrant) upon
certain issuances of Common Stock at a price less than the Applicable Price
or,
Options or Convertible Securities (each as defined in the Series H Warrant)
for
which common stock is issuable at a price less than the Applicable
Price;
WHEREAS,
Gottbetter Capital Master, Ltd. (In Liquidation) (“Gottbetter”)
is the
holder of that certain Amended and Restated Secured Convertible Promissory
Note
originally issued by the Company on October 19, 2006, in the original principal
amount of $2,500,000, and amended and restated on September 28, 2007, and
further amended as of March 1, 2008 and as of the date hereof (the
“Note”);
WHEREAS,
pursuant to an amendment to the Note, dated the date hereof, the Company and
Gottbetter have agreed to reduce the Conversion Price (as defined in the Note)
to $0.303 per share (such reduction in the Conversion Price under the Note
is
hereinafter referred to as the “Note
Conversion Price Reduction”)
for a
one-time conversion of $433,333.33 principal amount of the Note into shares
of
Common Stock, such conversion to occur on the date hereof;
WHEREAS,
the Consenting Holder desires to consent to the Note Conversion Price
Reduction;
WHEREAS,
the Consenting Holder desires to waive (i) any anti-dilution adjustments to
which the Consenting Holder may be entitled under the COD, the Series H Warrant
or otherwise as a result of the Note Conversion Price Reduction, and (iii)
any
potential breach of any representations, warranties, covenants or agreements
that restrict the Company’s ability to effect the Note Conversion Price
Reduction, to the extent such breach results, in whole or in part, from the
Note
Conversion Price Reduction; and
WHEREAS,
in consideration for the Consenting Holder’s agreement to this Consent and
Waiver, the Company has agreed to pay to the Consenting Holder a waiver fee
of
Two Hundred Fifty Thousand Dollars ($250,000.00) and issue to Holder a five-year
Series H Warrant to purchase one million shares of Common Stock of the Company
at an exercise price of Seventy Five Cents ($0.75) per share, a form of which
is
attached hereto as Exhibit
A
(the
“Waiver Warrant”).
NOW,
THEREFORE, in consideration of the mutual promises of the parties hereto and
of
the mutual benefits to be gained by the performance thereof, and for other
good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledge, the parties hereto hereby agree as follows:
1. The
Consenting Holder hereby consents to
the
Note
Conversion Price Reduction and, irrevocably and for an unlimited duration,
hereby waives (i) any potential breach of covenants, representations, warranties
or agreements, that restrict the Company’s ability to effect the Note Conversion
Price Reduction, to the extent such breach results from the Note Conversion
Price Reduction; (ii) any adjustments to the Exercise Price (as defined in
the
Series H Warrant) or number of shares to which the Consenting Holder is entitled
upon exercise of the Series H Warrant; and (iii) any adjustments to the
Conversion Price or number of shares to which the Consenting Holder is entitled
upon conversion of the Series B Preferred Stock to the extent such adjustment
otherwise would result from the Note Conversion Price Reduction; provided that,
such Note Conversion Price Reduction and any issuance of securities related
thereto is in accordance with the terms of that certain Amendment No. 2 to
the
MDwerks, Inc., First Amended and Restated Senior Secured Convertible Note,
a
form of which is attached hereto as Exhibit
B.
2. In
consideration for the Consenting Holder’s agreement to this Consent and Waiver,
the Company hereby agrees, upon execution of this Consent and Waiver to pay
to
the Consenting Holder a waiver fee of Two Hundred Fifty Thousand Dollars
($250,000.00), by wire transfer of immediately available funds to an account
designated in writing by the Consenting Holder and to deliver to the Consenting
Holder the Waiver Warrant.
3. This
Consent and Waiver shall be construed and enforced in accordance with the laws
of the State of New York.
4. This
Consent and Waiver may be executed in two counterparts, both of which shall
together constitute a single agreement. A facsimile or other electronic
transmission of an executed counterpart signature page shall be deemed to
constitute an original executed counterpart signature page.
[SIGNATURE
PAGE FOLLOWS]
2
IN
WITNESS WHEREOF, the parties hereto have duly executed this Consent and Waiver
as of the day and year first above written.
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By:
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/s/
Xxxxxx X. Xxxx
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Name:
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Xxxxxx
X. Xxxx
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Title:
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Chief
Executive Officer
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VICIS
CAPITAL MASTER FUND
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By:
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Vicis
Capital LLC
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By:
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/s/
Xxxxx Xxxxxxxx
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Name:
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Xxxxx
Xxxxxxxx
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Title:
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Managing
Director
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