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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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Due to the f
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