CONSENT AND WAIVER
Exhibit
99.2
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
GOTTBETTER CAPITAL MASTER, LTD. (in liquidation) (the “Consenting
Holder”),
a
Cayman Islands company.
WITNESSETH
WHEREAS,
the Consenting Holder is the sole holder of (i) a warrant, issued by the Company
on October 19, 2006, to purchase an aggregate of 187,500 shares of the Company’s
common stock, $0.001 par value per share (the “Common
Stock”),
at an
exercise price of $2.25 per share, subject to adjustment (the “October
Series D Warrant”);
(ii)
a warrant, issued by the Company on November 9, 2006, to purchase an aggregate
of 187,500 shares of the Company’s Common Stock, at an exercise price of $2.25
per share, subject to adjustment (the “November
Series D Warrant”);
and
(ii) a warrant, issued by the Company on September 27, 2007, to purchase an
aggregate of 500,000 shares of the Company’s Common Stock, at an exercise price
of $2.25 per share, subject to adjustment (the “September
Series D Warrant”
and,
collectively with the October Series D Warrant and the November Series D
Warrant, the “Series
D Warrants”);
WHEREAS,
the Consenting Holder is the sole holder of (i) a warrant, issued by the Company
on October 19, 2006, to purchase an aggregate of 187,500 shares of the Company’s
Common Stock, originally at an exercise price of $3.25 per share (and
subsequently reduced to $2.25 per share), subject to further adjustment (the
“October
Series E Warrant”);
and
(ii) a warrant, issued by the Company on November 9, 2006, to purchase an
aggregate of 187,500 shares of the Company’s Common Stock, originally at an
exercise price of $3.25 per share (and subsequently reduced to $2.25 per share),
subject to further adjustment (the “November
Series E Warrant”
and
collectively, with the October Series E Warrant, the “Series
E Warrants”);
WHEREAS,
the Consenting Holder is the sole holder of a warrant, issued by the Company
on
March 31, 2008, to purchase an aggregate of 1,000,000 shares of the Company’s
Common Stock, at an exercise price of $0.75 per share subject to adjustment
(the
“Series
I Warrant”
and
collectively, with the Series D Warrants and the Series E Warrants, the
“Warrants”);
WHEREAS,
Section 2(a) of the Warrants provides for adjustment of the exercise price
and
number of Warrant Shares (as defined in the Warrants) upon certain issuances
of
Common Stock at a price less than Applicable Price (as defined in the Warrants),
or Options or Convertible Securities (each as defined in the Warrants) for
which
Common Stock is issuable at a price less than the Applicable Price;
WHEREAS,
the Consenting Holder is the holder of that certain Amended and Restated
Convertible Promissory Note originally issued by the Company (the “Borrower”) on
November 9, 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 (the “November
Note”);
1
WHEREAS,
Section 7 of the November Note provides for adjustment of the Conversion Price
(as defined in the November Note) upon certain issuances of Common Stock at
a
price less than the Applicable Price (as defined in the November Note) or,
Options or Convertible Securities for which Common Stock is issuable at a price
less than the Applicable Price;
WHEREAS,
the Consenting Holder is the holder of that certain Amended and Restated
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 “October
Note”);
WHEREAS,
pursuant to an amendment to the October Note, dated the date hereof, the Company
and Consenting Holder 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, on the date hereof, of $433,333.33 Conversion Amount (as
defined in the October Note) of the Note into 1,430,143 shares of Common
Stock;
WHEREAS,
the Consenting Holder desires to consent to the Note Conversion Price
Reduction;
WHEREAS,
the Company desires to issue to Vicis Capital Master Fund, a sub-trust of Vicis
Capital Series Master Trust (“Vicis”) a Series H Warrant to purchase one million
(1,000,000) shares of Common Stock of the Company at an exercise price of $0.75
per share (the “Vicis Series H Warrant”);
WHEREAS,
the Consenting Holder desires to waive (i) any anti-dilution adjustments arising
from the Note Conversion Price Reduction and the conversion of the October
Note
on the date hereof and to which the Consenting Holder may be entitled under
the
Warrants, the October Note, the November Note or otherwise, (ii) any
anti-dilution adjustments arising form the issuance of the Vicis Series H
Warrant and the exercise thereof and to which the Consenting Holder may be
entitled under the Warrants, the October Note, the November Note or otherwise
and (iii) any potential breach of any representations, warranties, covenants
or
agreements that restrict the Company’s ability to (A) effect the Note Conversion
Price Reduction, to the extent such breach results, in whole or in part, from
the Note Conversion Price Reduction or the conversion of the October Note on
the
date hereof and (B) issue the Vicis Series H Warrant and issue shares of Common
Stock upon the exercise of the Vicis Series H Warrant;
WHEREAS,
the Consenting holder desires to waive, for the period commencing on the date
hereof and terminating at 5:00 pm New York City time on the tenth Business
Day
(as defined in the October Note and the November Note) following the date hereof
(the “Waiver Period”), the payment of principal in the amount of $69,444.44 that
became due on November 1, 2008 under the October Note and the payment of
principal in the amount of $69,444.44 that became due on November 1, 2008 under
the November Note; and
2
WHEREAS,
in consideration for the Consenting Holder’s agreement to this Consent and
Waiver, the Company has agreed that, for a period of twelve months after the
date hereof, it will not consummate any subdivisions in its shares of Common
Stock.
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
acknowledged, 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 or the conversion of the October Note on the date hereof; (ii)
any adjustments to the Exercise Price (as defined in the Warrants) or number
of
shares to which the Consenting Holder is entitled upon exercise of the Warrants;
and (iii) any adjustments to the Conversion Price or number of shares to which
the Consenting Holder is entitled upon conversion of the November Note or the
October Note to the extent such adjustment otherwise would result from the
Note
Conversion Price Reduction or the conversion of the October Note on the date
hereof.
2. The
Consenting Holder hereby consents to the issuance of the Vicis Series H Warrant
and the shares of Common Stock to be issued upon exercise thereof, 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 issue the Vicis Series H Warrant and issue shares of Common
Stock upon the exercise thereof, to the extent such breach results from the
issuance of the Vicis Series H Warrant or the issuance of shares of Common
Stock
upon exercise thereof; (ii) any adjustments to the Exercise Price (as defined
in
the Warrants) or number of shares to which the Consenting Holder is entitled
upon exercise of the Warrants; and (iii) any adjustments to the Conversion
Price
or number of shares to which the Consenting Holder is entitled upon conversion
of the November Note or the October Note to the extent such adjustment otherwise
would result from the issuance of the Vicis Series H Warrant or the issuance
of
shares of Common Stock upon exercise thereof.
3. The
Consenting Holder hereby irrevocably and unconditionally waives, for the
duration of the Waiver Period, the obligation of the Company (i) to pay
$69,444.44 of principal that became due on November 1, 2008 under the October
Note and (ii) to pay $69,444.44 of principal that became due on November 1,
2008
under the November Note.
4. In
consideration for the Consenting Holder’s agreement to this Consent and Waiver,
the Company hereby agrees, that for a period of 365 days from the date hereof,
the Company will not, without the prior written consent of the Consenting
Holder, effect any subdivision of the outstanding shares of the Company’s Common
Stock.
3
5. The
Company acknowledges and agrees that irreparable damages would result to the
Consenting Holder if the provisions of Section 4 of this Consent and Waiver
were
not complied with in accordance with the specific terms or otherwise breached,
and agrees that the Consenting Holder shall be entitled, to any appropriate
legal, equitable or other remedy, including injunctive relief, in respect of
any
failure to comply with the provisions of Section 3 of this Consent and Waiver
and the Company waives the securing or posting of any bond in connection with
such remedy. If the Consenting Holder is successful in enforcing its rights,
the
Company shall be responsible for all reasonable fees incurred by the Consenting
Holder in the enforcement of its rights.
6. This
Consent and Waiver shall be construed and enforced in accordance with the laws
of the State of New York.
7. The
parties agree that any claim relating to this Consent and Waiver shall be
brought solely in the state or federal courts in New York and all objections
to
personal jurisdiction, venue and forum non conveniens in any action, suit or
proceeding so commenced are hereby expressly waived by all parties hereto.
The
parties waive personal service of any and all process on each of them and
consent that all such service of process shall be made in the manner, to the
party and at the address set forth on the signature page, and service so made
shall be complete as stated in such section.
8. ALL
PARTIES HERETO, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY, WAIVE AND FOREVER RELINQUISH THE RIGHT TO A
TRIAL
BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY
RELATING TO THIS CONSENT AND WAIVER, ANY CONDUCT, ACT OR OMISSION OF ANY OTHER
PARTY HERETO OR ANY OF THEIR RESPECTIVE EMPLOYEES, AGENTS OR ATTORNEYS, OR
ANY
AFFILIATE OR ANY OTHER PERSONS ASSOCIATED WITH SUCH PARTY, IN EACH OF THE
FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
9. This
Consent and Waiver may be executed in two or more counterparts, 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 TO IMMEDIATELY FOLLOW THIS PAGE]
4
IN
WITNESS WHEREOF, the parties hereto have duly executed this Amendment, 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:
Xxxxxx X. Xxxx
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Title:
Chief Executive Officer
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Address:
MDwerks, Inc.
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0000
XX 0xx
Xxxxxx – Xxxxx X
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Xxxxxxxxx
Xxxxx, XX 00000
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Attention:
Xxxxxx X. Xxxx
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Facsimile
(000) 000-0000
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GOTTBETTER
CAPITAL MASTER, LTD.
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(IN
LIQUIDATION)
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By:
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/s/
Xxxxxx Xxxxxxxx
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Name:
Xxxxxx Xxxxxxxx
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Title:
Joint Liquidator
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Address:
Gottbetter Capital Master, Ltd. (In Voluntary
Liquidation)
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c/o
Deloitte & Touche
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Citrus
Grove
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X.X.
Xxx 0000 XX
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Xxxxx
Xxxxxx XX0-0000
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Cayman
Islands
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Attention:
Xxxxxx Xxxxxxxx, Co-Liquidator
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Facsimile:
(000) 000-0000
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[VICIS ACKNOWLEDGEMENT TO IMMEDIATELY FOLLOW THIS PAGE]
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5
Vicis
Capital Master Fund (“Vicis”) acknowledges and agrees that this Consent and
Waiver shall be binding upon and enforceable against Vicis, as the assignee
of
the Securities Purchase Agreement, dated October 19, 2006, by and among the
Company and Consenting Holder, the October Note, the November Note, the Series
D
Warrants and the Series E Warrants.
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Acknowledged
and Agreed:
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Dated:
November 6, 2008
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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:
Xxxxx Xxxxxxxx
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Title:
Managing Director
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Address:
Vicis Capital Master Fund
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c/o
Vicis Capital LLC
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000
Xxxx Xxxxxx
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00xx
Xxxxx
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Xxx
Xxxx, XX 00000
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Attn:
Xxxxx Xxxxxxxx
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Facsimile:
(000) 000-0000
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6
