CONSENT, WAIVER AND AMENDMENT AGREEMENT
(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.
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
