ex10-8.htm


    Exhibit
10.8

     

    THIRD
WAIVER OF RIGHTS AGREEMENT

    


    This Third Waiver of Rights Agreement
(the “Agreement”)
is made and entered into on June ___, 2008 (the “Effective
Date”), by and between Pediatric
Prosthetics, Inc., an Idaho corporation (“Pediatric”)
and AJW
Partners, Inc., AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners,
LLC and New Millennium Capital Partners, II, LLC (collectively the “Purchasers”),
each individually a “Party”
and collectively the “Parties.”

    


    W I T N E S S E T H:

    


    WHEREAS, pursuant to a
Securities Purchase Agreement entered into with the Purchasers on May 30, 2006
(the “Closing”
and the “Purchase
Agreement”), Pediatric agreed to sell the Purchasers an aggregate of
$1,500,000 in three tranches of Callable Secured Convertible Notes (the “Notes”),
all of which have been sold to date.  Additionally, pursuant to the
Purchase Agreement and in connection with the sale of the Notes, Pediatric
granted 50,000,000 Warrants to purchase shares of Pediatric’s common stock at
$0.10 per share to the Purchasers (the “Warrants”
or “Warrant
Agreements”);

    


    WHEREAS, the Parties have
previously entered into a Waiver of Rights Agreement dated October 25, 2006 (the
“Waiver
Agreement”) and a Second Waiver of Rights Agreement on or around April
17, 2007 (the “Second
Waiver Agreement”), to amend certain of the documents entered into by the
Parties at the Closing, including the Rights Agreement, which Waiver Agreement
and Second Waiver Agreement shall not be affected by the terms and conditions of
this Agreement;

    


    WHEREAS, Pediatric and one of
the Purchasers, New Millennium Capital Partners, II, LLC (“New
Millennium”), desire to enter into a Securities Purchase Agreement,
pursuant to which New Millennium will purchase $150,000 in Notes (the “New
Notes”) and be granted 20,000,000 warrants by Pediatric (the “New
Warrants”) to purchase shares of common stock at an exercise price of
$0.001 per share (the “New
Funding”);

    


    WHEREAS, pursuant to Section
1.6(d) of the Notes, in the event Pediatric issues or sells any shares of common
stock or grants any convertible securities for consideration per share less than
the Notes, such Note conversion price will reset to such lower value (the “Note
Anti-Dilution Right”);

    


    WHEREAS, pursuant to Section
4(a) of the Warrants, in the event Pediatric issues or sells any shares of
common stock or grants any convertible securities for consideration per share
less than the Warrants, such Warrant exercise price will reset to such lower
value (the “Warrant
Anti-Dilution Right”); and

    


    WHEREAS, the Purchasers desire
to waive any and all anti-dilution rights and other rights provided pursuant to
the Purchase Agreement or related agreements, and/or any rights associated with
the Notes or Warrants in order to encourage Pediatric to enter into the New
Funding, pursuant to and in connection with the terms of this
Agreement.

    


    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:

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	 	
                1.

              	
                Waiver of the
      Anti-Dilution Provisions of the Notes and
  Warrants.

              
	 	 
      	 
      
	 	 
      	
                The
      Purchasers agree to waive the Note Anti-Dilution Right and the Warrant
      Anti-Dilution right in connection with Pediatric’s entry into the New
      Funding.  Furthermore, the Purchasers agree to waive any
      anti-dilution or reset rights they may have whatsoever in connection with
      the Purchase Agreement, Notes, Warrants or any document related to the
      Closing (or any additional funding contemplated by the Closing) in
      connection with the sale of the New Notes and New Warrants and/or the
      subsequent conversion of the New Notes and/or exercise of the New
      Warrants.  The Purchasers further agree that there will be no
      affect on the conversion prices of the Notes or the exercise prices of the
      Warrants, or any other provision of the Purchase Agreement or any other
      document or agreement entered into in connection therewith (including any
      additional fundings contemplated by the Closing) as a result of the New
      Funding and/or any subsequent conversion of the New Notes and/or exercise
      of the New Warrants.

              
	 	 
      	 
      
	 	 
      	
                Each
      of the Purchasers individually confirms that it will receive valid
      consideration in connection with the Company’s New
  Funding.

              
	 	 
      	 
      
	 	
                2.

              	
                Approval of the New
      Funding.

              
	 	 
      	 
      
	 	
                 

              	
                Each
      of the Purchasers individually agrees that it approves of and consents to
      the New Funding and the issuance of the New Notes and New Warrants, and
      agrees to waive any notice requirement, right of first refusal, potential
      event of default caused by or other funding right whatsoever provided by
      the Purchase Agreement or any agreement or document entered into in
      connection with and/or pursuant to the Purchase Agreement (including any
      additional fundings) relating to or from the New
  Funding.

              
	 	 
      	 
      
	 	
                3.

              	
                Conditions
      of Effectiveness.

              
	 	 
      	 
      
	 	 
      	
                This
      Amendment shall become effective upon execution by each of the Parties
      hereto.

              
	 	 
      	 
      
	 	
                4.

              	
                Additional
      Funding.

              
	 	 
      	 
      
	 	 
      	
                Each
      of the Purchasers also agrees and understands that New Millennium and
      Pediatric currently anticipate entering into additional Securities
      Purchase Agreements for the sale of additional Notes and/or Warrants in
      the future, and as such, each of the Purchasers agrees to waive any and
      all rights waived and/or to give any and all approvals provided in
      Sections 1 and 2 above, in connection with any future fundings by and
      between New Millennium and/or any of the other Purchasers and Pediatric,
      without the need for the re-approval of such funding and/or waiver of such
      rights waived above.

              


      

    

     

    


     

    


     

    


     

    


     

    


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              5.

            	
              Miscellaneous.

            


    

     

     

    
      
        	 	
                (1)

              	
                Assignment.  All
      of the terms, provisions and conditions of this Agreement shall be binding
      upon and shall inure to the benefit of and be enforceable by the Parties
      hereto and their respective successors and permitted
    assigns.

              
	 	 
      	 
      
	 	
                (2)

              	
                Applicable
      Law.  This Agreement shall be construed in
      accordance with and governed by the laws of the State of Texas, excluding
      any provision of this Agreement which would require the use of the laws of
      any other jurisdiction.

              
	 	 
      	 
      
	 	
                (3)

              	
                Entire Agreement,
      Amendments and Waivers.  This Agreement
      constitutes the entire agreement of the Parties hereto and expressly
      supersedes all prior and contemporaneous understandings and commitments,
      whether written or oral, with respect to the subject matter
      hereof.  No variations, modifications, changes or extensions of
      this Agreement or any other terms hereof shall be binding upon any Party
      hereto unless set forth in a document duly executed by such Party or an
      authorized agent or such Party.

              
	 	 
      	 
      
	 	
                (4)

              	
                 Waiver. 
      No failure on the part of any Party to enforce any provisions of this
      Agreement will act as a waiver of the right to enforce that
      provision.

              
	 	 
      	 
      
	 	
                (5)

              	
                Section
      Headings.  Section headings are for convenience only
      and shall not define or limit the provisions of this
      Agreement.

              
	 	 
      	 
      
	 	
                (6)

              	
                Construction.  The
      Parties acknowledge that each of them has had the benefit of legal counsel
      of its own choice and has been afforded an opportunity to review this
      Agreement with its legal counsel and that this Agreement shall be
      construed as if jointly drafted by the parties hereto.

              
	 	 
      	 
      
	 	
                (7)

              	
                Authority.  Each
      Party has all requisite power and authority, corporate or otherwise, to
      enter into and affect the transactions contemplated by this
      Agreement.

              
	 	 
      	 
      
	 	
                (8)

              	
                Effect of Facsimile
      and Photocopied Signatures. This Agreement may be executed in
      several counterparts, each of which is an original.  It shall
      not be necessary in making proof of this Agreement or any counterpart
      hereof to produce or account for any of the other
      counterparts.  A copy of this Agreement signed by one Party and
      faxed to another Party shall be deemed to have been executed and delivered
      by the signing Party as though an original.  A photocopy of this
      Agreement shall be effective as an original for all
    purposes.

              


      



     

    


     

    


     

    


     

    


     

    


     

    


     

    


    


    


    [Remainder
of page left intentionally blank.  Signature page
follows.]

     

     

     

     

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

     

     

     

               This
Agreement has been executed by the Parties on the date first written above, with
an Effective Date as provided above.

    


    


    Pediatric Prosthetics,
Inc.

    


    


    /s/
Linda putback-bean

    Linda
Putback-Bean

    Chief
Executive Officer

    


    


    Purchasers:

    


    


    AJW
Partners, LLC

    By:  SMS
Group, LLC

     

    /s/
Corey S. Ribotsky

    Corey S.
Ribotsky

    Manager

     

    AJW
Offshore, Ltd.

    By:  First
Street Manager II, LLC

    


    /s/
Corey S. Ribotsky

    Corey S.
Ribotsky

    Manager

    


    


    AJW
Qualified Partners, LLC

     

    By:  AJW
Manager, LLC

     

    /s/
Corey S. Ribotsky

    Corey S.
Ribotsky

    Manager

    


    


    New Millennium Capital
Partners, II, LLC

     

    By:  First
Street Manager II, LLC

     

    /s/
Corey S. Ribotsky

    Corey S.
Ribotsky

    Manager

     

     

     

     

     

    
      
        
        

      

      
        -4-