WAIVER
September 19, 2005
Reference is hereby made to that certain Security and Purchase Agreement
dated as of November 9, 2004 (the "Closing Date") by and among Laurus Master
Fund, Ltd. ("Laurus"), Xxxxxx Equipment, Inc. (the "Company), Xxxxxx Ventures,
Inc. and the other subsidiaries of the Company named therein or which thereafter
become a party thereto (as such agreement may be amended, restated, supplemented
and modified from time to time the "Security Agreement") and (b) the Ancillary
Agreements (as defined in the Security Agreement) (the Security Agreement and
the Ancillary Agreements, as each may be amended, restated, supplemented and
modified from time to time, the "Agreements"). Capitalized terms used but not
defined herein shall have the meanings given them in the Agreements.
WHEREAS, on the date hereof, the Registration Statement (as defined in the
Registration Rights Agreement) has not been declared effective by the Commission
as required pursuant to Section 2(b)(ii) of the Registration Rights Agreement
and as a result thereof, the Company owes Laurus certain liquidated damages (the
"LIQUIDATED DAMAGES") as determined in accordance with Section 2(b) of the
Registration Rights Agreement; and
WHEREAS, the Company has failed to pay to Laurus the Liquidated Damages to
Laurus, when due; and
WHEREAS, Laurus has agreed to waive on the terms and conditions set forth
herein (the "Waiver") (i) the Events of Default that may have occurred and be
continuing as a result of the failure by the Company to pay to Laurus the
Liquidated Damages when due; and, (ii) the Liquidated Damages that have accrued
from and after the Closing Date until October 15, 2005;
NOW, THEREFORE, in consideration of the above, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Laurus hereby waives (i) any Event of Default that may have arisen
prior to the date hereof under the Agreements solely as a result of the failure
by the Company to pay to Laurus the Liquidated Damages as determined pursuant to
Section 2(b) of the Registration Rights Agreement; and (ii) the Liquidated
Damages that have accrued and are due and payable to Laurus by the Company from
the Closing Date up to and including the date hereof, and any Liquidated Damages
that may accrue from the date hereof up to and including October 15, 2005.
2. The waiver set forth herein shall be effective as of the date hereof
when each of the Company and Laurus shall have executed and the Company shall
have delivered to Laurus its respective counterpart to this Waiver.
3. The Company hereby represents and warrants to Laurus that (i) no Event
of Default exists on the date hereof, after giving effect to this Waiver, (ii)
on the date hereof, after giving effect to this Waiver, all representations,
warranties and covenants made by the Company in connection with the Agreements
are true, correct and complete and (iii) on the date hereof, after giving effect
to this Waiver, all of the Company's and its Subsidiaries' covenant requirements
have been met.
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4. Except as expressly described above, this Waiver shall not constitute
(a) a modification or an alteration of any of the terms, conditions or covenants
of the Agreements all of which remain in full force and effect, or (b) a waiver,
release or limitation upon Laurus' exercise of any of its rights and remedies
thereunder, all of which are hereby expressly reserved. This Waiver shall not
relieve or release the Company in any way from any of its duties, obligations,
covenants or agreements under the Agreements or from the consequences of any
events of default thereunder, except as expressly described above.
5. This Waiver shall be governed by and construed under the laws of the
State of New York as applied to agreements among New York residents entered into
and to be performed entirely within New York. Provisions hereof shall inure to
the benefit of, and be binding upon, the successors, assigns, heirs, executors,
and administrators of the parties hereto. This Waiver and Consent constitutes
the full and entire understanding and agreement between the parties with regard
to the subjects hereof. This Waiver and Consent may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be
signed by their respective representatives thereunto duly authorized, all as of
the date first written above.
COMPANY:
XXXXXX EQUIPMENT, INC.
By: XXXXX XXXXX
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Name: Xxxxx Xxxxx
Title: Chairman
LAURUS MASTER FUND, LTD.
By: XXXXX GRIN
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Name: Xxxxx Grin
Title: Fund Manager
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