CONSENT, WAIVER AND AMENDMENT AGREEMENT (Convertible Debentures)
Exhibit
10.9
(Convertible
Debentures)
This
Consent, Waiver and Amendment Agreement (this “Agreement”) is entered into as of
July 19, 2007, by and between each of the undersigned purchasers, acting
individually (individually a “Purchaser” and collectively the “Purchasers”), and
Viking Systems, Inc., a Delaware corporation (the “Company”).
Pursuant
to a securities purchase agreement dated February 24, 2007 among the Company
and
the Purchasers (the “Purchase Agreement”), the Purchasers were issued secured
convertible debentures (the “Debentures”) and warrants (the “Warrants”) to
purchase shares of Common Stock, par value $.001 per share (the “Common Stock”)
and in the individual amounts set forth below such Purchaser’s name on the
signature pages to the Purchase Agreement;
The
Debenture offering was for a maximum of $6,000,000 of the Debentures of which
approximately $5,376,533 has been received by the Company. The $6,000,000
maximum was established in late November 2006. The $6,000,000 Debenture maximum
assumed the Debenture would close in early January 2007. In February 2007,
discussions were held with a number of Debenture Purchasers regarding the
need
to increase the Debenture maximum to off-set the two month delay in closing
and
to address other changes in the business plans of the Company that were impacted
by, and not anticipated in, the final Debenture agreements. Since the initial
close of the Debenture offering, the Company has been actively seeking
additional funds from other interested investors.
The
Company is in need of additional capital and the Company believes that the
balance of the $6,000,000 is now available, together with additional funds
required by the Company to fund its operations. The Company desires to obtain
the consent of the Purchasers to increase the maximum Debenture offering
to
$8,000,000 from $6,000,000 (an additional $2,623,467).
The
Company and Purchasers desire to amend certain terms of the Transaction
Documents and waive certain provisions and other matters contained in the
Transaction Documents.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for good and valuable consideration the receipt and adequacy of which
are
hereby acknowledged, the Purchasers and the Company agree as
follows:
ARTICLE
I
DEFINITIONS
Section
1. Definitions.
Capitalized terms not defined in this Agreement shall have the meanings ascribed
to such terms in the Purchase Agreement.
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ARTICLE
II
AMENDMENTS
AND OTHER AGREEMENTS
Section
2.1 Consent
to Increased Financing.
Each
Purchaser, severally and not jointly with the other Purchasers, hereby consents
to the Company consummating the issuance of up to $8,000,000 principal amount
(including $5,376,533 already issued) of 8% Secured Convertible Debentures
and
Warrants on the terms and conditions substantially as set forth in the
Transaction Documents. Each Purchaser agrees that Section 4.13 (Participation
in
Future Financing) and Section 4.14 (Subsequent Equity Sales) of the Purchase
Agreement and Section 7 (Negative Covenants) of the Debenture document are
specifically amended to enable the Company to sell up to $2,623,467 of
additional Debentures without compliance with the terms set forth in those
sections.
Section
2.2 Effect on Transaction Documents. The
foregoing consents and waivers are given solely in respect of the transactions
described herein. Except as expressly set forth herein, all of the terms
and
conditions of the Transaction Documents shall continue in full force and
effect
after the execution of this Agreement, and shall not be in any way changed,
modified or superseded by the terms set forth herein. This Agreement shall
not
constitute a novation or satisfaction and accord of any Transaction
Document.
Section
2.3. Conditions
to Purchasers Obligations.
The
respective obligations of the Purchasers hereunder and the effectiveness
of the
consents, waivers and amendments set forth herein are subject to written
approval of the Holders of not less than 76% of the outstanding principal
amount
of the Debentures.
ARTICLE
III
MISCELLANEOUS
Section
3.1 Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be made in accordance with the provisions of the
Purchase Agreement.
Section
3.2 Survival.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
permitted assigns of each of the parties; provided however that no party
may
assign this Agreement or the obligations and rights of such party hereunder
without the prior written consent of the other parties hereto.
Section
3.3 Execution.
This
Agreement may be executed in two or more counterparts, all of which when
taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered
to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation
of the
party executing (or on whose behalf such signature is executed) with the
same
force and effect as if such facsimile signature page were an original
thereof.
Section
3.4 Severability.
If any
provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and
the
parties will attempt to agree upon a valid and enforceable provision that
is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
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Section
3.5 Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be determined pursuant to the Governing Law provision
of
the Purchase Agreement.
Section
3.6 Entire
Agreement.
The
Agreement, together with the exhibits and schedules thereto, contain the
entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with
respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.
Section
3.7 Construction.
The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.
Section
3.8 Independent
Nature of Purchasers’ Obligations and Rights.
The
obligations of each Purchaser hereunder are several and not joint with the
obligations of any other Purchasers hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert with respect
to
such obligations or the transactions contemplated by this Agreement. Each
Purchaser shall be entitled to protect and enforce its rights, including
without
limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in
any
proceeding for such purpose.
Section
3.9 Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s
obligations hereunder, by written notice to the other parties, if the
transactions contemplated hereunder are not effective on or before July 31,
2007.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
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VIKING
SYSTEMS, INC.
|
|
|
By:__________________________________________
Name:
Title:
|
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[PURCHASER
SIGNATURE PAGES TO VKSY
AMENDMENT
AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed
by their respective authorized signatories as of the date first indicated
above.
Name
of
Purchaser: ________________________________________________________
Signature
of Authorized Signatory of Purchaser:
__________________________________
Name
of
Authorized Signatory:
____________________________________________________
Title
of
Authorized Signatory:
_____________________________________________________
Email
Address of
Purchaser:________________________________________________
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