Document:

GUARANTY
      AGREEMENT

     

    THIS
      GUARANTY AGREEMENT (this “Guaranty”)
      is
      made as of September 28, 2007, by and between PATIENT
      PAYMENT SOLUTIONS, INC.,
      a
      Florida corporation (“Debtor”),
      and
      VICIS CAPITAL MASTER FUND (“Vicis”),
      a
      series
      of the Vicis Capital Master Trust, a trust formed under the laws of the Cayman
      Islands.

     

    RECITALS

     

    A. Debtor
      is
      either a direct or an indirect wholly-owned subsidiary of MDwerks,
      Inc., a
      Delaware corporation (“Issuer”).
      

     

    B. Pursuant
      to a Securities Purchase Agreement of even date herewith by and between Vicis
      and Issuer (as amended or modified from time to time, the “Securities
      Purchase Agreement”),
      Issuer has issued to Vicis and Vicis has purchased from Issuer $2,000,000 in
      shares of the Issuer’s Series B Convertible Preferred Stock, par value $.001 per
      share (the “Preferred
      Shares”).

     

    C. It
      is a
      condition precedent to Vicis’s acquisition of the Preferred Shares that
      Guarantor execute and deliver to Vicis a guaranty in the form hereof. This
      is
      the Guaranty Agreement referred to in the Securities Purchase
      Agreement.

     

    AGREEMENTS

     

    In
      consideration of the recitals and for other good and valuable consideration,
      the
      receipt and sufficiency of which are hereby acknowledged, Guarantor hereby
      agrees with Vicis as follows:

     

    ARTICLE
      I

    DEFINITIONS

     

    When
      used
      in this Guaranty, capitalized terms shall have the meanings specified in the
      Securities Purchase Agreement, the preamble, the recitals and as
      follows:

     

    Event
      of Default.
“Event
      of Default” shall have the meaning specified in the Securities Purchase
      Agreement.

     

    Guaranty.
      “Guaranty” shall mean this Guaranty, as the same shall be amended from time to
      time in accordance with the terms hereof.

     

    Law.
      “Law”
      shall mean any federal, state, local or other law, rule, regulation or
      governmental requirement of any kind, and the rules, regulations,
      interpretations and orders promulgated thereunder.

     

    Obligations.
      “Obligations” shall mean (a) the redemption of, and payment of dividends on, the
      Preferred Shares, and any renewal, extension or refinancing thereof; and (b)
      all
      debts, liabilities, obligations, covenants and agreements of Issuer and Debtor
      contained in the Transaction Documents.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Person.
      “Person”
      shall mean and include an individual, partnership, corporation, trust,
      unincorporated association and any unit, department or agency of
      government.

     

    ARTICLE
      II

    THE
      GUARANTY

     

    2.1 The
      Guaranty.
      Guarantor, for itself, its successors and assigns, hereby unconditionally and
      absolutely guarantees to Vicis the full and complete payment and performance
      when due (whether at stated maturity, by acceleration or otherwise) of each
      of
      the Obligations. This is a guaranty of payment and performance and not of
      collection.

     

    2.2 Waivers
      and Consents.
      

     

    (a) Guarantor
      acknowledges that the obligations undertaken herein involve the guaranty of
      obligations of a Person other than Guarantor and, in full recognition of that
      fact, Guarantor consents and agrees that Vicis may, to the extent permitted
      under the Transaction Documents, at any time and from time to time, without
      notice or demand, and without affecting the enforceability or continuing
      effectiveness hereof: (i) supplement, modify, amend, extend, renew, accelerate
      or otherwise change the time for payment or the other terms of the Obligations
      or any part thereof, including without limitation any decrease of the principal
      amount thereof or the rate(s) of interest thereon; (ii) supplement, modify,
      amend or waive, or enter into or give any agreement, approval or consent with
      respect to, the Obligations or any part thereof, or any of the Transaction
      Documents or any additional security or guaranties, or any condition, covenant,
      default, remedy, right, representation or term thereof or thereunder; (iii)
      accept new or additional instruments, documents or agreements in exchange for
      or
      relative to any of the Transaction Documents or the Obligations or any part
      thereof; (iv) accept partial payments on the Obligations; (v) receive and hold
      additional security or guaranties for the Obligations or any part thereof;
      (vi)
      release, reconvey, terminate, waive, abandon, fail to perfect, subordinate,
      exchange, substitute, transfer and/or enforce any security or guaranties, and
      apply any security and direct the order or manner of sale thereof as Vicis
      in
      its sole and absolute discretion may determine; (vii) release any Person from
      any personal liability with respect to the Obligations or any part thereof;
      (viii) settle, release on terms satisfactory to Vicis or by operation of
      applicable Law or otherwise, liquidate or enforce any Obligations and any
      security or guaranty in any manner, consent to the transfer of any security
      and
      bid and purchase at any sale; and/or (ix) consent to the merger, change or
      any
      other restructuring or termination of the corporate existence of Issuer or
      any
      other Person, and correspondingly restructure the Obligations, and any such
      merger, change, restructuring or termination shall not affect the liability
      of
      Guarantor or the continuing effectiveness hereof, or the enforceability hereof
      with respect to all or any part of the Obligations.

     

    (b) Upon
      the
      occurrence and during the continuance of any Event of Default, Vicis may enforce
      this Guaranty independently of any other remedy, guaranty or security Vicis
      at
      any time may have or hold in connection with the Obligations, and it shall
      not
      be necessary for Vicis to marshal assets in favor of Issuer, any other guarantor
      of the Obligations or any other Person or to proceed upon or against and/or
      exhaust any security or remedy before proceeding to enforce this Guaranty.
      Guarantor expressly waives any right to require Vicis, upon the occurrence
      and
      during the continuance of an Event of Default, to marshal assets in favor of
      Issuer or any other Person or to proceed against Issuer or any other guarantor
      of the Obligations or any collateral provided by any Person, and agrees that
      Vicis may proceed against any obligor and/or the collateral in such order as
      it
      shall determine in its sole and absolute discretion. Vicis may file a separate
      action or actions against Guarantor, whether action is brought or prosecuted
      with respect to any security or against any other Person, or whether any other
      Person is joined in any such action or actions. Guarantor agrees that Vicis
      and
      Issuer may deal with each other in connection with the Obligations or otherwise,
      or alter any contracts or agreements now or hereafter existing between them,
      in
      any manner whatsoever, all without in any way altering or affecting the security
      of this Guaranty.

     

    
      
        
        

      

      
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    (c) The
      rights of Vicis hereunder shall be reinstated and revived, and the
      enforceability of this Guaranty shall continue, with respect to any amount
      at
      any time paid on account of the Obligations which thereafter shall be required
      to be restored or returned by Vicis upon the bankruptcy, insolvency or
      reorganization of any Person, all as though such amount had not been paid.
      The
      rights of Vicis created or granted herein and the enforceability of this
      Guaranty shall remain effective at all times to guarantee the full amount of
      all
      the Obligations even though the Obligations, including any part thereof or
      any
      other security or guaranty therefor, may be or hereafter may become invalid
      or
      otherwise unenforceable as against Issuer or any other guarantor of the
      Obligations and whether or not Issuer or any other guarantor of the Obligations
      shall have any personal liability with respect thereto.

     

    (d) To
      the
      extent permitted by applicable law, Guarantor expressly waives any and all
      defenses now or hereafter arising or asserted by reason of: (i) any disability
      or other defense of Issuer or any other guarantor for the Obligations with
      respect to the Obligations (other than full payment and performance of all
      of
      the Obligations); (ii) the unenforceability or invalidity of any security for
      or
      guaranty of the Obligations or the lack of perfection or continuing perfection
      or failure of priority of any security for the Obligations; (iii) the
      cessation for any cause whatsoever of the liability of Issuer or any other
      guarantor of the Obligations (other than by reason of the full payment and
      performance of all Obligations); (iv) any failure of Vicis to marshal assets
      in
      favor of Issuer or any other Person; (v) any failure of Vicis to give notice
      of
      sale or other disposition of collateral to Issuer or any other Person liable
      for
      the Obligations or any defect in any notice that may be given in connection
      with
      any sale or disposition of collateral; (vi) any failure of Vicis to comply
      with
      applicable Laws in connection with the sale or other disposition of any
      collateral or other security for any Obligation, including, without limitation,
      any failure of Vicis to conduct a commercially reasonable sale or other
      disposition of any collateral or other security for any Obligation; (vii) any
      act or omission of Vicis or others that directly or indirectly results in or
      aids the discharge or release of Issuer or any other guarantor of the
      Obligations, or of any security or guaranty therefor by operation of Law or
      otherwise; (viii) any failure of Vicis to file or enforce a claim in any
      bankruptcy or other proceeding with respect to any Person; (ix) the election
      by
      Vicis, in any bankruptcy proceeding of any Person, of the application or
      non-application of Section 1111(b)(2) of the United States Bankruptcy Code;
      (x)
      any extension of credit or the grant of any lien under Section 364 of the United
      States Bankruptcy Code; (xi) any use of collateral under Section 363 of the
      United States Bankruptcy Code; (xii) any agreement or stipulation with respect
      to the provision of adequate protection in any bankruptcy proceeding of any
      Person; (xiii) the avoidance of any lien or security interest in favor of Vicis
      for any reason; (xiv) any bankruptcy, insolvency, reorganization, arrangement,
      readjustment of debt, liquidation or dissolution proceeding commenced by or
      against any Person, including without limitation any discharge of, or bar or
      stay against collecting, all or any of the Obligations (or any interest thereon)
      in or as a result of any such proceeding; or (xv) any action taken by Vicis
      that
      is authorized by this Section or any other provision of any Transaction
      Document. Until all of the Obligations have been paid in full, Guarantor
      expressly waives all presentments, demands for payment or performance, notices
      of nonpayment or nonperformance, protests, notices of protest, notices of
      dishonor and all other notices or demands of any kind or nature whatsoever
      with
      respect to the Obligations, and all notices of acceptance of this Guaranty
      or of
      the existence, creation or incurrence of new or additional
      Obligations.

     

    
      
        
        

      

      
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    2.3 Condition
      of Issuer.
      Guarantor represents and warrants to Vicis that it has established adequate
      means of obtaining from Issuer, on a continuing basis, financial and other
      information pertaining to the business, operations and condition (financial
      and
      otherwise) of Issuer and its assets and properties. Guarantor hereby expressly
      waives and relinquishes any duty on the part of Vicis (should any such duty
      exist) to disclose to Guarantor any matter, fact or thing related to the
      business, operations or condition (financial or otherwise) of Issuer or its
      assets or properties, whether now known or hereafter known by Vicis during
      the
      life of this Guaranty. With respect to any of the Obligations, Vicis need not
      inquire into the powers of Issuer or agents acting or purporting to act on
      its
      behalf, and all Obligations made or created in good faith reliance upon the
      professed exercise of such powers shall be guaranteed hereby.

     

    2.4 Continuing
      Guaranty.
      This is
      a continuing guaranty and shall remain in full force and effect as to all of
      the
      Obligations until all amounts owing by Issuer to Vicis on the Obligations shall
      have been paid in full.

     

    2.5 Subrogation;
      Subordination.
      Guarantor expressly subordinates and postpones any claim for reimbursement,
      contribution, indemnity or subrogation which Guarantor may have against Issuer
      as a guarantor of the Obligations and any other legal or equitable claim against
      Issuer arising out of the payment of the Obligations by Guarantor or from the
      proceeds of any collateral for this Guaranty, until all amounts owing to Vicis
      under the Obligations shall have been paid in full. In furtherance, and not
      in
      limitation, of the foregoing waiver, until all amounts owing to Vicis under
      the
      Obligations shall have been paid in full, Guarantor hereby agrees that no
      payment by Guarantor pursuant to this Guaranty shall constitute Guarantor a
      creditor of Issuer. Until all amounts owing to Vicis under the Obligations
      shall
      have been paid in full, Guarantor shall not seek any reimbursement from Issuer
      in respect of payments made by Guarantor in connection with this Guaranty,
      or in
      respect of amounts realized by Vicis in connection with any collateral for
      the
      Obligations, and Guarantor expressly subordinates and postpones any right to
      enforce any remedy that Vicis now has or hereafter may have against any other
      Person and waives the benefit of, or any right to participate in, any collateral
      now or hereafter held by Vicis. No claim which any Guarantor may have against
      any other guarantor of any of the Obligations or against Issuer, to the extent
      not subordinated and postponed pursuant to this Section, shall be enforced
      nor
      any payment accepted until the Obligations are paid in full.

     

    
      
        
        

      

      
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    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES OF GUARANTOR

     

    Guarantor
      hereby represents and warrants to Vicis as follows:

     

    3.1 Authorization.
      Guarantor is a corporation duly and validly organized and existing under the
      laws of the State of Florida, has the corporate power to own its owned assets
      and properties and to carry on its business, and is duly licensed or qualified
      to do business in all jurisdictions in which failure to do so would have a
      material adverse effect on its business or financial condition. The making,
      execution, delivery and performance of this Guaranty, and compliance with its
      terms, have been duly authorized by all necessary corporate action of
      Guarantor.

     

    3.2 Enforceability.
      This
      Guaranty is the legal, valid and binding obligation of Guarantor, enforceable
      against Guarantor in accordance with its terms, except
      (i) as limited by general equitable principles and applicable bankruptcy,
      insolvency, reorganization, moratorium and other laws of general application
      affecting enforcement of creditors’ rights generally, (ii) as limited by laws
      relating to the availability of specific performance, injunctive relief or
      other
      equitable remedies and (iii) insofar as indemnification and contribution
      provisions may be limited by applicable law.

     

    3.3 Absence
      of Conflicting Obligations.
      The
      making, execution, delivery and performance of this Guaranty, and compliance
      with its terms, do not violate any existing provision of Law; the articles
      of
      incorporation or bylaws of Guarantor; or any material agreement or instrument
      to
      which Guarantor is a party or by which it or any of its assets is
      bound.

     

    3.4 Consideration
      for Guaranty.
      Guarantor acknowledges and agrees with Vicis that but for the execution and
      delivery of this Guaranty by Guarantor, Vicis would not have acquired the
      Preferred Shares. Guarantor acknowledges and agrees that the proceeds of the
      sale of the Preferred Shares will result in significant benefit to Guarantor,
      which is either a direct or an indirect wholly-owned subsidiary of Issuer and
      or
      intended beneficiary of such proceeds.

     

    ARTICLE
      IV

    COVENANTS
      OF THE GUARANTOR

     

    4.1 Actions
      by Guarantor.
      Guarantor shall not take or permit any act, or omit to take any act, that would:
      (a) cause Issuer to breach any of the Obligations; (b) intentionally impair
      the
      ability of Issuer to perform any of the Obligations; or (c) cause an Event
      of
      Default under the Securities Purchase Agreement.

     

    4.2 Reporting
      Requirements.
      To the
      extent not disclosed by Issuer in reports required to be filed with the
      Commission pursuant to the Exchange Act, Guarantor shall furnish, or cause
      to be
      furnished, to Vicis such information respecting the business, assets and
      financial condition of Guarantor as Vicis may reasonably request in
      writing.

     

    
      
        
        

      

      
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    ARTICLE
      V

    MISCELLANEOUS

     

    5.1 Expenses
      and Attorneys’ Fees.
      Guarantor shall pay all reasonable fees and expenses incurred by Vicis,
      including the reasonable, documented fees of counsel, in connection with the
      protection or enforcement of its rights under this Guaranty, including without
      limitation the protection and enforcement of such rights in any bankruptcy,
      reorganization or insolvency proceeding involving Issuer or Guarantor, both
      before and after judgment.

     

    5.2 Revocation.
      This is
      a continuing guaranty and shall remain in full force and effect until Vicis
      receives written notice of revocation signed by Guarantor. Upon revocation
      by
      written notice, this Guaranty shall continue in full force and effect as to
      all
      Obligations contracted for or incurred before revocation, and as to them Vicis
      shall have the rights provided by this Guaranty as if no revocation had
      occurred. Any renewal, extension, or increase in the interest rate(s) of any
      such Obligation, whether made before or after revocation, shall constitute
      an
      Obligation contracted for or incurred before revocation. Obligations contracted
      for or incurred before revocation shall also include credit extended after
      revocation pursuant to commitments made before revocation.

     

    5.3 Assignability;
      Successors.
      Guarantor’s rights and liabilities under this Guaranty are not assignable or
      delegable, in whole or in part, without the prior written consent of Vicis.
      The
      provisions of this Guaranty shall be binding upon Guarantor, its successors
      and
      permitted assigns and shall inure to the benefit of Vicis, its successors and
      assigns.

     

    5.4 Survival;
      Termination.
      All
      agreements, representations and warranties made herein or in any document
      delivered pursuant to this Guaranty shall survive the execution and delivery
      of
      this Guaranty and the delivery of any such document. This
      Guaranty automatically shall terminate upon the satisfaction of the Obligations,
      whether by Issuer, Guarantor or any other Person, and thereafter Guarantor
      shall
      have no further liability or obligations hereunder. Upon the termination of
      this
      Guaranty, Vicis shall execute and deliver to Guarantor an acknowledgment of
      the
      termination of this Guaranty and a release of Guarantor from all claims of
      any
      nature arising under this Guaranty.

     

    5.5 Governing
      Law.
      This
      Guaranty and the documents issued pursuant to this Guaranty shall be governed
      by, and construed and interpreted in accordance with, the Laws of the State
      of
      New York applicable to contracts made and wholly performed within such
      state.

     

    5.6 Execution;
      Headings.
      This
      Guaranty may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid and binding obligation of
      the
      party executing (or on whose behalf such signature is executed) with the same
      force and effect as if such facsimile signature page were an original thereof.
      The article and section headings in this Guaranty are inserted for convenience
      of reference only and shall not constitute a part hereof.

     

    
      
        
        

      

      
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    5.7 Notices.
      All
      notices, requests and demands to or upon Vicis or Guarantor (to be delivered
      care of Issuer) shall be delivered in the manner set forth in Section 12.6
      of
      the Securities Purchase Agreement.

     

    5.8 Amendment.
      No
      amendment of this Guaranty shall be effective unless in writing and signed
      by
      Guarantor and Vicis.

     

    5.9 Severability.
      Any
      provision of this Guaranty that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions of this Guaranty in such jurisdiction or affecting the validity
      or
      enforceability of any provision in any other jurisdiction.

     

    5.10 Taxes.
      If any
      transfer or documentary taxes, assessments or charges levied by any governmental
      authority shall be payable by reason of the execution, delivery or recording
      of
      this Guaranty, Guarantor shall pay all such taxes, assessments and charges,
      including interest and penalties, and hereby indemnifies Vicis against any
      liability therefor.

     

    5.11 WAIVER
      OF RIGHT TO JURY TRIAL.
      EACH
      OF
      THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
      ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF ANY
      CONTROVERSY THAT MAY ARISE UNDER THIS GUARANTY.

     

    5.12 SUBMISSION
      TO JURISDICTION; SERVICE OF PROCESS.
      

     

    (a) EACH
      OF
      THE PARTIES TO THIS GUARANTY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS
      TO
      THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED THE STATE
      AND
      COUNTY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
      RELATING TO THIS GUARANTY. EACH OF THE PARTIES TO THIS GUARANTY IRREVOCABLY
      WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT SUCH PARTY
      MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
      BROUGHT IN ANY SUCH COURTS AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN
      ANY
      SUCH COURTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     

    (b) EACH
      OF
      THE PARTIES TO THIS GUARANTY HEREBY CONSENTS TO SERVICE OF PROCESS BY NOTICE
      IN
      THE MANNER SPECIFIED IN SECTION 12.6 OF THE SECURITIES PURCHASE AGREEMENT
      AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
      SUCH PARTY MAY NOW OR HEREAFTER HAVE TO SERVICE OF PROCESS IN SUCH
      MANNER..

    

    (signature
      page follows)

    

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF the undersigned has executed this Guaranty as of the day and
      year first above written.

    
      	 	 	 
	 	PATIENT
              PAYMENT
              SOLUTIONS, INC.
	 
 	 
 	 
 
	
            	By:  	/s/ Howard
              B.
              Katz 
	 	
              
Name: Howard
              B. Katz
	 	Title: Chief
              Executive Officer

    

     

    Signature
      Page to Guaranty

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ACCEPTANCE
      BY VICIS

     

    This
      Guaranty Agreement is accepted by Vicis Capital Master Fund.

    
      	 	 	 
	 	VICIS
              CAPITAL
              MASTER FUND
	 	 	 
	 	By:	Vicis Capital LLC
	 
 	 
 	 
 
	
            	By:  	/s/ Keith
              W.
              Hughes
	 	
              
Name:
              Keith W. Hughes
	 	Title:
              Chief Financial Officer

    

     

    
      Acceptance
        Page to GuarantySECURITY
      AGREEMENT

     

    THIS
      SECURITY AGREEMENT (this “Security
      Agreement”)
      is
      made as of September 28, 2007, by and between MDWERKS, INC., a Delaware
      corporation (“Debtor”),
      and
      VICIS CAPITAL MASTER FUND (“Vicis”),
      a
      series
      of the Vicis Capital Master Trust, a trust formed under the laws of the Cayman
      Islands.

     

    RECITALS

     

    A. Pursuant
      to a Securities Purchase Agreement of even date herewith by and between Vicis
      and Debtor (as amended or modified from time to time, the “Securities
      Purchase Agreement”),
      Debtor has issued to Vicis and Vicis has purchased from Debtor $2,000,000 in
      shares of the Debtor’s Series B Convertible Preferred Stock, par value $.001 per
      share (the “Preferred
      Shares”).

     

    B. It
      is a
      condition precedent to Vicis’s acquisition of the Preferred Shares that the
      Debtor execute and deliver to Vicis a security agreement in the form hereof
      to
      secure its obligations under the Preferred Shares. This is the Security
      Agreement referred to in the Securities Purchase Agreement.

     

    AGREEMENTS

     

    In
      consideration of the Recitals and for other good and valuable consideration,
      the
      receipt and sufficiency of which are hereby acknowledged, Debtor hereby agrees
      with Vicis as follows:

     

    ARTICLE
      I

    DEFINITIONS

     

    Capitalized
      terms used herein but not defined herein shall have the respective meanings
      given to them in the Securities Purchase Agreement. Terms not otherwise defined
      herein and defined in the UCC shall have, unless the context otherwise requires,
      the meanings set forth in the UCC as in effect on the date hereof (except that
      the term “document” shall only have the meaning set forth in the UCC for
      purposes of clause (d) of the definition of Collateral). When used in this
      Security Agreement, the following terms shall have the following
      meanings:

     

    Accounts.
      “Accounts” shall mean all accounts, including without limitation all rights to
      payment for goods sold or services rendered that are not evidenced by
      instruments or chattel paper, whether or not earned by performance, and any
      associated rights thereto.

     

    Collateral.
      “Collateral” shall mean, subject to any limitations or qualifications set forth
      in Section 2.1 hereof, all personal properties and assets of Debtor, wherever
      located, whether tangible or intangible, and whether now owned or hereafter
      acquired or arising, including without limitation:

     

    (a)  all
      Inventory and documents relating to Inventory;

     

    (b)  all
      Accounts and documents relating to Accounts;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)  all
      equipment, fixtures and other goods, including without limitation machinery,
      furniture and trade fixtures;

     

    (d)  all
      general intangibles (including without limitation payment intangibles, software,
      customer lists, sales records and other business records, contract rights,
      causes of action, and licenses, permits, franchises, patents, copyrights,
      trademarks, and goodwill of the business in which the trademark is used, trade
      names, or rights to any of the foregoing), promissory notes, contract rights,
      chattel paper, documents, letter-of-credit rights and instruments;

     

    (e)  [intentionally
      omitted];

     

    (f)  (i)
      all
      deposit accounts and (ii) all cash and cash equivalents deposited with or
      delivered to Vicis from time to time and pledged as additional security for
      the
      Obligations;

     

    (g)  all
      investment property;

     

    (h)  all
      commercial tort claims; and

     

    (i)  all
      additions and accessions to, all spare and repair parts, special tools,
      equipment and replacements for, and all supporting obligations, proceeds and
      products of, any and all of the foregoing assets described in Sections (a)
      through (h), inclusive, above.

     

    Notwithstanding
      the foregoing, “Collateral” shall not include (i) any general intangibles
      or other rights arising under any contracts, instruments, licenses or other
      documents to the extent that the grant of a lien or the Security Interest
      therein would (A) result in a breach of the terms of, or constitute a default
      under, such contract, instrument, license, agreement or other document (other
      than to the extent that any such term would be rendered ineffective pursuant
      to
      Section 9-406, 9-407 or 9-408 of the UCC or any successor provision of the
      UCC
      of any relevant jurisdiction or other applicable law) or (B) give any other
      party to such contract, instrument, license or other document the right to
      terminate its obligations thereunder pursuant to a valid and enforceable
      provision (including without limitation in connection with the operation of
      Section 9-406, 9-407 or 9-408 of the UCC or any other applicable law), (ii)
      any
      personal property (including motor vehicles) in respect of which perfection
      of a
      lien or security interest is not either (A) governed by the UCC or (B)
      accomplished by appropriate evidence of the lien being recorded in the United
      States Copyright Office or the United States Patent and Trademark Office, or
      (iii) any property subject to any pledge agreement.

     

    Event
      of Default.“Event
      of Default” shall have the meaning specified in the Securities Purchase
      Agreement.

     

    Inventory.
      “Inventory” shall mean all inventory, including without limitation all goods
      held for sale, lease or demonstration or to be furnished under contracts of
      service, goods leased to others, trade-ins and repossessions, raw materials,
      work in process and materials used or consumed in Debtor’s business, including,
      without limitation, goods in transit, wheresoever located, whether now owned
      or
      hereafter acquired by Debtor, and shall include such property the sale or other
      disposition of which has given rise to Accounts and which has been returned
      to
      or repossessed or stopped in transit by Debtor.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    Obligations.
      “Obligations” shall mean (a) the redemption of, and payment of dividends on, the
      Preferred Shares, and any renewal, extension or refinancing thereof; and (b)
      all
      debts, liabilities, obligations, covenants and agreements of Debtor contained
      in
      the Transaction Documents.

     

    Person.
      “Person” shall mean and include an individual, partnership, corporation, trust,
      unincorporated association and any unit, department or agency of
      government.

     

    Security
      Agreement.
      “Security Agreement” shall mean this Security Agreement, together with the
      schedules attached hereto, as the same may be amended, supplemented or otherwise
      modified from time to time in accordance with the terms hereof.

     

    Security
      Interest.
      “Security Interest” shall mean the security interest of Vicis in the Collateral
      granted by Debtor pursuant to this Security Agreement.

     

    UCC.
      “UCC”
      shall mean the Uniform Commercial Code as adopted in Delaware and in effect
      from
      time to time.

     

    ARTICLE
      II

    THE
      SECURITY INTEREST; REPRESENTATIONS AND WARRANTIES

     

    2.1  The
      Security Interest.
      

     

    (a) To
      secure
      the full and complete payment and performance when due (whether at stated
      maturity, by acceleration, or otherwise) of each of the Obligations, Debtor
      hereby grants to Vicis, subject to Section 2.1(b) hereof, a second-priority,
      subordinated security interest in all of Debtor’s right, title and interest in
      and to the Collateral.

     

    (b) Notwithstanding
      Section 2.1(a) above, Vicis hereby agrees that, in the event that Debtor and/or
      any of its subsidiaries should incur any Permitted Senior Indebtedness in
      accordance with the terms of the Securities Purchase Agreement, Vicis, at the
      option or discretion of the lender extending the financing facility underlying
      the Permitted Senior Indebtedness, will, within a reasonable time after notice
      thereof, release or expressly subordinate to such lender Vicis’s Security
      Interest, if any, in Accounts, security interests in client assets, loan
      documents, reserve accounts and the proceeds thereof, in each case to the extent
      that any of the foregoing secures Debtor’s or any of its subsidiaries’
obligations under any Permitted Senior Indebtedness.

     

    2.2  Representations
      and Warranties.
      Debtor
      hereby represents and warrants to Vicis that:

     

    (a)  The
      records of Debtor with respect to the Collateral are presently located only
      at
      the address(es) listed on Schedule
      1
      attached
      to this Security Agreement.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (b)  The
      Collateral is presently located only at the location(s) listed on Schedule 1
      attached
      to this Security Agreement.

     

    (c)  The
      chief
      executive office and chief place(s) of business of Debtor are presently located
      at the address(es) listed on Schedule
      1
      to this
      Security Agreement.

     

    (d)  Debtor
      is
      a Delaware corporation and its exact legal name is set forth in the definition
      of “Debtor” in the introductory paragraph of this Security Agreement. The
      organization identification number of Debtor is listed on Schedule
      1
      to this
      Security Agreement.

     

    (e)  All
      of
      Debtor’s present patents and trademarks, if any, including those that have been
      registered with, or for which an application for registration has been filed
      in,
      the United States Patent and Trademark Office are listed on Schedule
      2
      attached
      to this Security Agreement. All of Debtor’s present copyrights registered with,
      or for which an application for registration has been filed in, the United
      States Copyright Office or any similar office or agency of any state or any
      other country are listed on Schedule
      2
      attached
      to this Security Agreement.

     

    (f)  Debtor
      has good title to, or valid leasehold interest in, all of the Collateral, and
      there are no Liens on any of the Collateral except Permitted Liens.

     

    2.3  Authorization
      to File Financing Statements.
      Debtor
      hereby irrevocably
      authorizes Vicis at any time and from time to time to file in any UCC
      jurisdiction any initial financing statements and amendments thereto that (a)
      indicate the Collateral (i) as all assets of Debtor or words of similar effect,
      regardless of whether any particular asset comprised in the Collateral falls
      within the scope of Article 9 of the UCC or such other jurisdiction, or (ii)
      as
      being of an equal or lesser scope or with greater detail, and (b) contain any
      other information required by part 5 of Article 9 of the UCC for the sufficiency
      of filing office acceptance of any financing statement or amendment, including
      whether Debtor is an organization, the type of organization and any state or
      federal organization identification number issued to Debtor. Debtor agrees
      to
      furnish any such information to Vicis promptly upon written request.

     

    ARTICLE
      III

    AGREEMENTS
      OF DEBTOR

     

    From
      and
      after the date of this Security Agreement, and until all of the Obligations
      are
      paid in full, Debtor shall:

     

    3.1  Sale
      of Collateral.  Not
      sell, lease, transfer or otherwise dispose of Collateral or any interest
      therein, except as provided for in the Securities Purchase Agreement and for
      sales of Inventory in the ordinary course of business.

     

    3.2  Maintenance
      of Security Interest.  

     

    (a)  At
      the
      expense of Debtor, defend the Security Interest against any and all claims
      of
      any Person adverse to Vicis (but only to the extent the claim of such adverse
      Person is subordinate or junior to the interest of Vicis) and take such action
      and execute such financing statements and other documents as Vicis may from
      time
      to time reasonably request in writing to maintain the perfected status of the
      Security Interest. Debtor shall not further encumber or grant a security
      interest in any of the Collateral except as provided for in the Securities
      Purchase Agreement.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (b)  Debtor
      further agrees to take any other commercially reasonable action reasonably
      requested in writing by Vicis if necessary to ensure the attachment, perfection
      and second priority of, and the ability of Vicis to enforce its security
      interest in any and all of the Collateral including, without limitation, (i)
      executing, delivering and, where appropriate, filing financing statements and
      amendments relating thereto under the UCC, to the extent, if any, that Debtor’s
      signature thereon is required therefor, (ii) complying with any provision
      of any statute, regulation or treaty of the United States as to any Collateral
      if compliance with such provision is a condition to attachment, perfection
      or
      priority of, or ability of Vicis to enforce, its security interest in such
      Collateral, (iii) taking all actions required by any earlier versions of the
      UCC
      (to the extent applicable) or by other law, as applicable in any relevant UCC
      jurisdiction, or by other law as applicable in any foreign jurisdiction, and
      (iv) obtaining waivers from landlords where any material portion of the tangible
      Collateral is located in form and substance reasonably satisfactory to Vicis.
      

     

    3.3  Locations.
      Give
      Vicis at least thirty (30) days prior written notice of Debtor’s intention to
      relocate the tangible Collateral (other than Inventory in transit) or any of
      the
      records relating to the Collateral from the locations listed on Schedule
      1
      attached
      to this Security Agreement, in which event Schedule
      1
      shall be
      deemed amended to include the new location. Any additional filings or refilings
      requested in writing by Vicis as a result of any such relocation in order to
      maintain the Security Interest in such Collateral shall be at Debtor’s
      expense.

     

    3.4  Insurance.
      Maintain insurance (including, without limitation, commercial general liability
      and property insurance) with respect to the Collateral consisting of tangible
      personal property in such amounts, against such risks, in such form and with
      responsible and reputable insurance companies or associations as is required
      by
      any governmental authority having jurisdiction with respect thereto or as is
      carried generally in accordance with sound business practice by companies in
      similar businesses similarly situated. Debtor will obtain lender’s loss payable
      endorsements on applicable insurance policies in favor of Vicis and will provide
      to Vicis certificates of such insurance or copies thereof. Debtor shall use
      commercially reasonable efforts to cause each insurer to agree, by endorsement
      on the policy or policies or certificates of insurance issued by it or by
      independent instrument furnished to Vicis, that such insurer will give thirty
      (30) days written notice to Vicis before such policy will be altered or
      canceled. No settlement of any insurance claim shall be made without Vicis’s
      prior consent, which consent will not be unreasonably withheld, conditioned
      or
      delayed. In the event of any insured loss, Debtor shall promptly notify Vicis
      thereof in writing, and, after an Event of Default shall have occurred and
      be
      continuing, Debtor hereby authorizes and directs any insurer concerned to make
      payment of such loss directly to Vicis as its interest may appear. Vicis is
      authorized, in the name and on behalf of Debtor, to make proof of loss and
      to
      adjust, compromise and collect, in such manner and amounts as it reasonably
      shall determine, all claims under all policies; and Debtor agrees to sign,
      on
      written demand of Vicis, all receipts, vouchers, releases and other instruments
      which may be necessary in aid of this authorization. After an Event of Default
      shall have occurred and be continuing, the proceeds of any insurance from loss,
      theft, or damage to the Collateral shall be held in a segregated account
      established by Vicis and disbursed and applied at the discretion of Vicis,
      either in reduction of the Obligations or applied toward the repair, restoration
      or replacement of the Collateral.

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    3.5  Name;
      Legal Status.
      (a)
      Without providing at least 30 days prior written notice to Vicis, Debtor will
      not change its name, its place of business or, if more than one, chief executive
      office, or its mailing address or organizational identification number if it
      has
      one, (b) if Debtor does not have an organizational identification number and
      later obtains one, Debtor shall forthwith notify Vicis of such organizational
      identification number, and (c) Debtor will not change its type of organization
      or jurisdiction of organization.

     

    ARTICLE
      IV

    RIGHTS
      AND REMEDIES

     

    4.1  Right
      to Cure.
      In case
      of failure by Debtor after receipt of written notice from Vicis to procure
      or
      maintain insurance, or to pay any fees, assessments, charges or taxes (subject
      to Debtor’s right to contest in good faith, such assessments, charges or taxes)
      arising with respect to the Collateral, Vicis shall have the right, but shall
      not be obligated, to effect such insurance or pay such fees, assessments,
      charges or taxes, as the case may be, and, in that event, the cost thereof
      shall
      be payable by Debtor to Vicis immediately upon demand, together with interest
      at
      an annual rate of 8% from the date of disbursement by Vicis to the date of
      payment by Debtor. If Vicis effects any insurance on behalf of Debtor, Debtor
      thereafter may cancel such insurance so effected after providing Vicis with
      evidence that Debtor has obtained insurance as required by this Security
      Agreement.

     

    4.2  Rights
      of Parties.
      Upon
      the occurrence and during the continuance of an Event of Default, in addition
      to
      all the rights and remedies provided in the Transaction Documents or in
      Article 9 of the UCC and any other applicable law, Vicis may (but is under
      no obligation so to do):

     

    (a)  require
      Debtor to assemble the Collateral at a place designated by Vicis, which is
      reasonably convenient to the parties; and

     

    (b)  take
      physical possession of Inventory and other tangible Collateral and of Debtor’s
      records pertaining to all Collateral that are necessary to properly administer
      and control the Collateral or the handling and collection of Collateral, and
      sell, lease or otherwise dispose of the Collateral in a commercially reasonable
      manner in whole or in part, at public or private sale, on or off the premises
      of
      Debtor; and

     

    (c)  collect
      any and all money due or to become due and enforce in Debtor’s name all rights
      with respect to the Collateral; and

     

    (d)  settle,
      adjust or compromise any dispute with respect to any Account; and

     

    (e)  receive
      and open mail addressed to Debtor; and

     

    (f)  on
      behalf
      of Debtor, endorse checks, notes, drafts, money orders, instruments or other
      evidences of payment.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    4.3  Power
      of Attorney.
      Upon
      the occurrence and during the continuance of an Event of Default, Debtor does
      hereby constitute and appoint Vicis as Debtor’s true and lawful attorney with
      full power of substitution for Debtor in Debtor’s name, place and stead for the
      purposes of performing any obligation of Debtor under this Security Agreement
      and taking any action and executing any instrument which Vicis may deem
      necessary to perform any obligation of Debtor under this Security Agreement,
      which appointment is irrevocable and coupled with an interest, and shall not
      terminate until the Obligations are paid in full.

     

    4.4  Right
      to Collect Accounts.
      Upon
      the occurrence and during the continuance of an Event of Default, and without
      limiting Debtor’s obligations under the Transaction Documents: (a) Debtor
      authorizes Vicis to notify any and all debtors on the Accounts to make payment
      directly to Vicis (or to such place as Vicis may direct); (b) Debtor agrees,
      on
      written notice from Vicis, to deliver to Vicis promptly after receipt thereof,
      in the form in which received (together with all necessary endorsements), all
      payments received by Debtor on account of any Account; and (c) Vicis may, at
      its
      option, apply all such payments against the Obligations or remit all or part
      of
      such payments to Debtor.

     

    4.5  Reasonable
      Notice.
      Written
      notice, when required by law, sent in accordance with the provisions of Section
      12.6 of the Securities Purchase Agreement and given at least ten (10) business
      days (counting the day of sending) before the date of a proposed disposition
      of
      the Collateral shall be reasonable notice.

     

    4.6  Limitation
      on Duties Regarding Collateral.  The
      sole duty of Vicis with respect to the custody, safekeeping and physical
      preservation of the Collateral in its possession, under Section 9-207 of the
      UCC
      or otherwise, shall be to deal with it in the same manner as Vicis deals with
      similar property for its own account. Neither Vicis nor any of its directors,
      officers, employees or agents, shall be liable for failure to demand, collect
      or
      realize upon any of the Collateral or for any delay in doing so or shall be
      under any obligation to sell or otherwise dispose of any Collateral upon the
      request of Debtor or otherwise.

     

    4.7  Lock
      Box; Collateral Account.
      This
      Section 4.7 shall be effective only upon the occurrence and during the
      continuance of an Event of Default. If Vicis so requests in writing, Debtor
      will
      direct each of its debtors on the Accounts to make payments due under the
      relevant Account or chattel paper directly to a special lock box to be under
      the
      control of Vicis. Debtor hereby authorizes and directs Vicis to deposit into
      a
      special collateral account to be established and maintained by Vicis all checks,
      drafts and cash payments received in said lock box. All deposits in said
      collateral account shall constitute proceeds of Collateral and shall not
      constitute payment of any Obligation until so applied. At its option, Vicis
      may,
      at any time, apply finally collected funds on deposit in said collateral account
      to the payment of the Obligations, in the order of application set forth in
      Section 4.8, or permit Debtor to withdraw all or any part of the balance on
      deposit in said collateral account. If a collateral account is so established,
      Debtor agrees that it will promptly deliver to Vicis, for deposit into said
      collateral account, all payments on Accounts and chattel paper received by
      it.
      All such payments shall be delivered to Vicis in the form received (except
      for
      Debtor’s endorsement where necessary). Until so deposited, all payments on
      Accounts and chattel paper received by Debtor shall be held in trust by Debtor
      for and as the property of Vicis and shall not be commingled with any funds
      or
      property of Debtor.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    4.8  Application
      of Proceeds.
      Vicis
      shall apply the proceeds resulting from any sale or disposition of the
      Collateral in the following order:

     

    (a)  to
      the
      reasonable costs of any sale or other disposition;

     

    (b)  to
      the
      reasonable expenses incurred by Vicis in connection with any sale or other
      disposition, including attorneys’ fees;

     

    (c)  to
      the
      payment of the Obligations then due and owing in any order selected by Vicis
      in
      a commercially reasonable manner; and

     

    (d)  to
      Debtor.

     

    4.9  Other
      Remedies.
      No
      remedy herein conferred upon Vicis is intended to be exclusive of any other
      remedy, and each and every such remedy shall be cumulative and shall be in
      addition to every other remedy given under this Security Agreement and the
      Transaction Documents now or hereafter existing at law or in equity or by
      statute or otherwise. No failure or delay on the part of Vicis in exercising
      any
      right or remedy hereunder shall operate as a waiver thereof nor shall any single
      or partial exercise of any right hereunder preclude other or further exercise
      thereof or the exercise of any other right or remedy.

     

    ARTICLE
      V

    MISCELLANEOUS

     

    5.1  Expenses
      and Attorneys’ Fees.
      Debtor
      shall pay all reasonable fees and expenses incurred by Vicis, including the
      reasonable fees of counsel, in connection with the preparation, administration
      and amendment of this Security Agreement and the protection, administration
      and
      enforcement of the rights of Vicis under this Security Agreement or with respect
      to the Collateral, including without limitation the protection and enforcement
      of such rights in any bankruptcy. 

     

    5.2  Setoff.
      Debtor
      agrees that, upon the occurrence and during the continuance of an Event of
      Default, Vicis shall have all rights of setoff and bankers’ lien provided by
      applicable law.

     

    5.3  Assignability;
      Successors.
      Debtor’s rights and liabilities under this Security Agreement are not assignable
      or delegable, in whole or in part, without the prior written consent of Vicis.
      The provisions of this Security Agreement shall inure to the benefit of and
      be
      binding upon the successors and assigns of the parties.

     

    5.4  Survival.
      All
      agreements, representations and warranties made in this Security Agreement
      or in
      any document delivered pursuant to this Security Agreement shall survive the
      execution and delivery of this Security Agreement, and the delivery of any
      such
      document.

     

    5.5  Governing
      Law.
      This
      Security Agreement shall be governed by, and construed and interpreted in
      accordance with, the laws of the State of New York applicable to contracts
      made
      and wholly performed within such state.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    5.6  Execution;
      Headings.
      This
      Security Agreement may be executed in two or more counterparts, all of which
      when taken together shall be considered one and the same agreement and shall
      become effective when counterparts have been signed by each party and delivered
      to the other party, it being understood that both parties need not sign the
      same
      counterpart. In the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid and binding obligation of
      the
      party executing (or on whose behalf such signature is executed) with the same
      force and effect as if such facsimile signature page were an original
      thereof.
      The
      article and section headings in this Security Agreement are inserted for
      convenience of reference only and shall not constitute a part
      hereof.

     

    5.7  Notices.
      All
      communications or notices required or permitted by this Security Agreement
      shall
      be given to Debtor in accordance with Section 12.6 of the Securities Purchase
      Agreement.

     

    5.8  Amendment.
      No
      amendment of this Security Agreement shall be effective unless in writing and
      signed by Debtor and Vicis.

     

    5.9  Severability.
      Any
      provision of this Security Agreement which is prohibited or unenforceable in
      any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions of this Security Agreement in such jurisdiction or affecting the
      validity or enforceability of any provision in any other
      jurisdiction.

     

    5.10  WAIVER
      OF RIGHT TO JURY TRIAL.
      EACH
      OF
      THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
      ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF ANY
      CONTROVERSY THAT MAY ARISE UNDER THIS SECURITY AGREEMENT.

     

    5.11  Submission
      to Jurisdiction.
      

     

    (a) EACH
      OF
      THE PARTIES TO THIS SECURITY AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY
      SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED
      THE STATE AND COUNTY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING
      OUT OF OR RELATING TO THIS SECURITY AGREEMENT. EACH OF THE PARTIES TO THIS
      SECURITY AGREEMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
      ANY OBJECTION THAT SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
      VENUE OF ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURTS AND ANY CLAIM THAT
      ANY
      SUCH PROCEEDING BROUGHT IN ANY SUCH COURTS HAS BEEN BROUGHT IN AN INCONVENIENT
      FORUM.

    

    (b) EACH
      OF
      THE PARTIES TO THIS SECURITY AGREEMENT HEREBY CONSENTS TO SERVICE OF PROCESS
      BY
      NOTICE IN THE MANNER SPECIFIED IN SECTION 12.6 OF THE SECURITIES PURCHASE
      AGREEMENT AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
      OBJECTION SUCH PARTY MAY NOW OR HEREAFTER HAVE TO SERVICE OF PROCESS IN SUCH
      MANNER.

     

    (signature
      page follows)

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, this Security Agreement has been executed as of the day and
      year first above written.

     

    
      	 	 	 
	 	MDWERKS, INC.
	 
 	 
 	 
 
	
            	By:  	/s/ Howard
              B.
              Katz 
	 	
              

              Name:
                Howard B. Katz

              Title:
                Chief Executive Officer

            

    

     

    
      	 	 	 
	 	
              VICIS CAPITAL MASTER FUND

               

              
                 

                By:
                  Vicis Capital LLC

              

            
	 
 	 
 	 
 
	
            	By:  	/s/
              Keith W. Hughes  
	 	
              

              
                Name:
                  Keith W. Hughes

                Title:
                  Chief Financial
                  Officer

              

            

    

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    SCHEDULE
      1 TO SECURITY AGREEMENT

     

    Locations
      of Collateral

     

    
      
        	Organizational ID:	3684247 (Delaware)
	 	 
	TIN: 	33-1095411

      

    

     

    Address
      of Debtor’s records of Collateral and chief executive office:

    

    1020
      NW
      6th
      Street

    Suite
      I

    Deerfield
      Beach, FL 33442

    

    Collateral
      Locations:

    

    1020
      NW
      6th
      Street

    Suite
      I

    Deerfield
      Beach, FL 33442

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    SCHEDULE
      2 TO SECURITY AGREEMENT

     

    Intellectual
      Property

     

    Organizational
      ID:

    MDwerks,
      Inc.

    33-1095411

    

    Patents

     

    US
      Patent
      Application 10/121615 was filed by Donald Beasley and Jacob Nudel on 4/15/2002.
      On 3/22/2006, an Office Action was mailed to the Company from the US Patent
      and
      Trademark Office indicating a non-final rejection of claims. On 7/12/06
      Management and counsel met with the US Patent and Trademark Office (USPTO)
      examiner to review the issues and try to obtain an agreement regarding amendment
      of the claims. On 9/21/06, the Company filed an amendment to the claims
      according to the discussion on 7/12/06. On 11/27/06, an Office Action was mailed
      to the Company objecting to the amendment filed on 9/21/06 because some claims
      were identified as “canceled” instead of “withdrawn”, and also objecting to the
      ink color quality of the amendment. On 12/21/06, the Company responded to the
      11/27/06 Office Action by redesignating the claims as requested, and by pointing
      out that the amendment was submitted electronically to the PTO, and that the
      problem with the ink color quality was a USPTO issue. On 3/20/2007, an Office
      Action was mailed to the Company objecting to the amendment filed on 12/21/06
      because some claims were identified as “previously presented” instead of
“original”. On 4/3/2007, the Company responded to the 3/20/2007 Office Action by
      redesignating the claims as requested. The Company is awaiting a response from
      the USPTO to the 4/3/2007 filing. 

    

    An
      assignment assigning the patent application from inventors Donald Beasley and
      Jacob Nudel to MDwerks.com Corp. was filed with the USPTO. An assignment
      assigning the patent application from MEDWerks.com Corp. to MEDWerks, LLC was
      also filed with the USPTO. An assignment then assigning the application from
      MEDWerks, LLC to MDwerks, Inc. has also been filed with the USPTO.

    

    Trademarks

     

    US
      Trademark Application 10/78/621234 was filed for the name “MDWERKS” by Xeni
      Medical Systems, Inc. on 5/5/2005. The
      trademark was published for opposition in the Official Gazette on July 3, 2007.
      If no opposition is filed within the time specified by law, the US
      Patent
      and Trademark Office
      may
      issue a Notice of Allowance.

    

    Xeni
      Medical Systems, Inc. intends to transfer the Trademark ownership to MDwerks,
      Inc. following receipt of the Notice of Allowance.

    

    Copyrights

     

    None.

     

    
      
         

      

      
        12

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