Exhibit
10.18
WAIVER OF RIGHTS AGREEMENT
This
Waiver of Rights
Agreement (the "AGREEMENT") is made and entered into
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this October
25, 2006, to be effective as of July 31, 2006 (the
"EFFECTIVE
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DATE"), by
and between PEDIATRIC PROSTHETICS, INC., an Idaho corporation
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("PEDIATRIC") and AJW PARTNERS, INC., AJW PARTNERS, LLC, AJW
OFFSHORE, LTD., AJW
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QUALIFIED PARTNERS,
LLC AND NEW MILLENNIUM CAPITAL PARTNERS, II, LLC
(collectively the
"PURCHASERS"),
each individually a
"PARTY" and collectively
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the "PARTIES."
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W I T N E S S E T H:
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WHEREAS, pursuant to a
Securities Purchase Agreement entered into with the
Purchasers on
May 30, 2006 (the "CLOSING" and the "PURCHASE AGREEMENT"),
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Pediatric agreed
to sell the Purchasers an aggregate of
$1,500,000 in three
tranches of Callable
Secured Convertible Notes (the "NOTES"), of which $600,000
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in Notes were sold on May 30, 2006, with
the remaining $900,000 in Notes to be
sold in subsequent tranches when Pediatric meets certain filing and
effectiveness goals
as set forth in the Purchase Agreement, as well as
50,000,000 Warrants
to purchase shares of Pediatric's common stock (the
"WARRANTS");
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WHEREAS, Pediatric
agreed to register the shares of common stock which the
Notes are convertible into and the shares of common stock which the
Warrants are
exercisable for (the "UNDERLYING SECURITIES"), pursuant to a
Registration Rights
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Agreement (the
"RIGHTS AGREEMENT") entered into with the Purchasers at the
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Closing;
WHEREAS, pursuant
to Section 4(c) of the Purchase Agreement,
Pediatric
agreed to timely file all of its required reports with the
Securities and
Exchange Commission
(the "COMMISSION" and the "TIMELY FILING
REQUIREMENTS");
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pursuant to Section
4(n) of the Purchase Agreement, Pediatric agreed to use its
best efforts
to obtain shareholders consent on or before
August 15, 2006, to
increase its authorized shares of common stock (the "SHAREHOLDER
APPROVAL"); and
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pursuant to
Section 2(a) of the Rights Agreement, Pediatric
agreed to file a
registration statement
with the Commission (the "REGISTRATION STATEMENT")
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covering the
Underlying Securities
no later than sixty (60) days from the date
of the Closing (July 31, 2006, the "FILING DATE") and to obtain
effectiveness of
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such Registration
Statement pursuant to Section 3(a) of the Rights Agreement no
later than
one hundred and forty-five (145) days
from the date of the Closing
(October 22, 2006, the
"EFFECTIVENESS DATE"), which Timely Filing Requirements,
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Filing Date
and Effectiveness Date were not met by Pediatric and which
Shareholder Approval
has not been obtained (the "DEFAULTS");
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WHEREAS, the
Parties now desire to
enter into this Agreement to waive the
Defaults.
NOW,
THEREFORE,
in consideration for the promises and pledges
contained
below and other good and valuable
consideration, which consideration Pediatric
and the Purchasers acknowledge receipt of, and the premises and the
mutual
covenants, agreements,
and considerations
herein contained, the Parties hereto
agree as follows:
<PAGE>
1. WAIVER
OF THE DEFAULTS.
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