Document:

Exhibit 4.2

    THIS
SENIOR SECURED PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY
AND NOT FOR DISTRIBUTION AND MAY BE TRANSFERRED OR OTHERWISE DISPOSED OF ONLY IN
COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND
APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY
PROMISSORY NOTE ISSUED IN EXCHANGE FOR THIS SECURED PROMISSORY
NOTE.

    

    THIS
NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”). PURSUANT TO TREASURY
REGULATION §1.1275-3(b)(1), VINCENT COLANGELO, A REPRESENTATIVE OF THE BORROWERS
HEREOF WILL, BEGINNING TEN (10) DAYS AFTER THE ISSUE DATE OF THIS NOTE, PROMPTLY
MAKE AVAILABLE TO THE HOLDER UPON REQUEST THE INFORMATION DESCRIBED IN TREASURY
REGULATION §1.1275-3(b)(1)(i). VINCENT COLANGELO MAY BE REACHED AT TELEPHONE
NUMBER (954) 389-8300.

    

    SENIOR
SECURED PROMISSORY NOTE

     

    
      	
              Original
      Issuance Date: April 15, 2009

            	
              Original
      Principal Amount: $3,851,374.58

            

    

     

    FOR VALUE
RECEIVED, upon the terms and subject to the conditions set forth in this senior
secured promissory note (this “Note”), MDWERKS, INC., a Delaware corporation
with its principal place of business at 1020 NW 6th Street, Suite I, Deerfield
Beach, FL 33442, and XENI FINANCIAL SERVICES, CORP., a Florida corporation with
its principal place of business at 1020 NW 6th Street, Suite I, Deerfield Beach,
FL 33442 (each a “Borrower” and collectively the “Borrowers”), jointly and
severally, absolutely and unconditionally promise to pay to the order of VICIS
CAPITAL MASTER FUND, a sub-trust of Vicis Capital Series Master Trust, a unit
trust organized and existing under the laws of the Cayman Islands, or registered
assigns (the “Payee” or “Holder”), when due, whether upon the Maturity Date (as
defined below), acceleration or otherwise (in each case in accordance with the
terms hereof), the amount set out above as the Original Principal Amount or so
much thereof as may from time to time be outstanding hereunder (without
deduction for the original issue discount taken by the Holder pursuant to
Article I of the Loan and Securities Purchase Agreement of even date herewith
between the Borrowers and the Holder (the “Loan Agreement”)) and accrued
interest thereon as hereinafter provided.  This Note is issued in
connection with the Loan Agreement, all terms of which are incorporated herein
by this reference and hereby made a part of this Note. Capitalized terms not
defined herein shall have the meanings ascribed to them in the Loan
Agreement.

    

    ARTICLE
I

     PAYMENT
OF PRINCIPAL AND INTEREST; METHOD OF PAYMENT; MATURITY DATE

     

    1.1           Payment of Principal.
Commencing on October 15, 2009, the Borrowers shall pay to the Holder monthly
payments of principal in the amount of Forty Thousand Dollars
($40,000).  All oustanding principal, interest and fees and charges of
any kind under the Note shall become due and payable on October 15, 2011 (the
“Maturity Date”).  Payment of the principal of this Note (and any
interest accrued thereon) shall be made in U.S. dollars in immediately available
funds.

     

    1.2           Payment of Interest.
Interest on the principal under this Note shall accrue at the rate of thirteen
percent (13%) per annum (the “Stated Interest Rate”) commencing on the date
hereof, and shall be computed on the basis of a 360-day year comprised of twelve
(12) thirty (30) day months and shall be payable monthly in cash on the first
(1st) day of each month, in arrears, commencing October 15,
2009.  Interest shall be paid in U.S. dollars in immediately available
funds.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    1.3           Payment on Non-Business
Days. If the outstanding principal or accrued but unpaid interest under
this Note becomes due and payable on a Saturday, Sunday or public holiday under
the laws of the State of New York, the due date hereof shall be extended to the
next succeeding full business day and interest shall be payable at the rate of
thirteen (13%) percent per annum during such extension. All payments received by
the Holder shall be applied first to the payment of all accrued interest payable
hereunder.

     

    1.4           Late Fee. In the
event any payment of principal or interest or both shall remain unpaid for a
period of ten (10) days or more after the due date thereof, a one-time late
charge equivalent to five percent (5%) of each unpaid amount shall be
charged.

     

    1.5           Adjustment of Stated
Interest Rate.

     

     (a)           After
an Event of Default and acceleration of the Maturity Date by the Holder the
Stated Interest Rate shall be adjusted to a rate of eighteen percent (18%) per
annum, subject to the limitations of applicable law.

     

     (b)           Regardless
of any other provision of this Note or other Transaction Document (as defined in
the Loan Agreement), if for any reason the interest paid should exceed the
maximum lawful interest, the interest paid shall be deemed reduced to, and shall
be, such maximum lawful interest, and (i) the amount which would be excessive
interest shall be deemed applied to the reduction of the principal balance of
this Note and not to the payment of interest, and (ii) if the loan evidenced by
this Note has been or is thereby paid in full, the excess shall be returned to
the party paying same, such application to the principal balance of this Note or
the refunding of excess to be a complete settlement and acquittance
thereof.

     

    1.6           Prepayment. This Note
may be prepaid at any time, without premium or penalty, in whole or in part,
together with accrued interest to the date of such prepayment on the portion
prepaid.

     

    ARTICLE
II

    SECURITY
AND SENIORITY

     

    2.1           Security
Interests.  All of the obligations of the Borrowers under the
Note and Loan Agreement are secured by (a) an unconditional guaranty executed by
each of the Subsidiaries (as defined in the Loan Agreement) pursuant to those
certain Guaranty Agreements (as defined in the Loan Agreement), (b) a lien on
all the assets, tangible and intangible, of the Borrowers now existing or
hereinafter acquired granted pursuant to the Security Agreement and Collateral
Assignment (as such terms are defined in the Loan Agreement), and (c) the other
Transaction Documents.

     

    ARTICLE
III

    MISCELLANEOUS

     

    3.1           Default. Upon the
occurrence of any one or more of the Events of Default specified or referred to
in the Loan Agreement all amounts then remaining unpaid on this Note may be
declared to be immediately due and payable as provided in the Loan
Agreement.

     

    3.2           Collection Costs.
Should all or any part of the indebtedness represented by this Note be collected
by action at law, or in bankruptcy, insolvency, receivership or other court
proceedings, or should this Note be placed in the hands of attorneys for
collection after default, the Borrowers, jointly and severally, hereby promise
to pay to the Holder, upon demand by the Holder at any time, in addition to the
outstanding principal and all (if any) other amounts payable on or in respect of
this Note, all court costs and reasonable attorneys' fees and other reasonable,
third-party collection charges and expenses incurred or sustained by the
Holder.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    3.3           Rights Cumulative.
The rights, powers and remedies given to the Payee under this Note shall be in
addition to all rights, powers and remedies given to it by virtue of the Loan
Agreement, any document or instrument executed in connection therewith, or any
statute or rule of law.

     

    3.4           No Waivers. Any
forbearance, failure or delay by the Payee in exercising any right, power or
remedy under this Note, the Loan Agreement, any documents or instruments
executed in connection therewith or otherwise available to the Payee shall not
be deemed to be a waiver of such right, power or remedy, nor shall any single or
partial exercise of any right, power or remedy preclude the further exercise
thereof.

     

    3.5           Amendments in
Writing. No modification or waiver of any provision of this Note, the
Loan Agreement or any documents or instruments executed in connection therewith
shall be effective unless it shall be in writing and signed by all parties, and
any such modification or waiver shall apply only in the specific instance for
which given.

     

    3.6           Governing Law. This
Note and the rights and obligations of the parties hereto, shall be governed,
construed and interpreted according to the laws of the State of New York,
wherein it was negotiated and executed. IN ANY LAWSUIT IN CONNECTION WITH THIS
NOTE, THE HOLDER AND THE UNDERSIGNED CONSENT AND AGREE THAT THE STATE AND
FEDERAL COURTS WHICH SIT IN THE STATE OF NEW YORK, COUNTY OF NEW YORK SHALL HAVE
EXCLUSIVE JURISDICTION OF ALL CONTROVERSIES AND DISPUTES ARISING HEREUNDER. THE
HOLDER AND EACH OF THE BORROWERS WAIVES THE RIGHT IN ANY LITIGATION ARISING
HEREUNDER (WHETHER OR NOT ARISING OUT OF OR RELATING TO THIS NOTE) TO TRIAL BY
JURY.

     

    3.7           Successors. The term
“Payee” and “Holder” as used herein shall be deemed to include the Payee and its
successors, endorsees and assigns.

     

    3.8           Notices. All notices,
demands or other communications given hereunder shall be in given in accordance
with Section 12.6 of the Loan Agreement.

     

    3.9           Certain
Waivers.  Except as otherwise specifically provided herein, the
Borrowers and all others that may become liable for all or any part of the
obligations evidenced by this Note, hereby waive presentment, demand, notice of
nonpayment, protest and all other demands’ and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, and do hereby
consent to any number of renewals of extensions of the time or payment hereof
and agree that any such renewals or extensions may be made without notice to any
such persons and without affecting their liability herein and do further consent
to the release of any person liable hereon, all without affecting the liability
of the other persons, firms or the Borrowers liable for the payment of this
Note.

     

    3.10         Mutilated, Lost, Stolen or
Destroyed Notes. In case this Note shall be mutilated, lost, stolen or
destroyed, upon the written request of Holder, the Borrowers shall issue and
deliver in exchange and substitution for and upon cancellation of the mutilated
Note, or in lieu of and substitution for the Note, mutilated, lost, stolen or
destroyed, a new Note of like tenor and representing an equivalent right or
interest, but only upon receipt of evidence satisfactory to the Borrowers of
such loss, theft or destruction and an indemnity also satisfactory to
it.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    3.11            Transfer and
Assignment. The Holder may transfer or assign this Note, including,
without limitation, pursuant to the sale of participation rights in the Loan,
without the consent of the Borrowers. The Borrowers may not transfer or assign
this Note or their obligations hereunder without the consent of the
Holder.

     

    3.12           Issue Taxes. The
Borrowers shall pay any and all issue and other taxes, excluding federal, state
or local income taxes, that may be payable in respect of any issue or delivery
of this Note pursuant thereto.

     

                IN
WITNESS WHEREOF, each of MDWERKS, INC. and XENI FINANCIAL SERVICES, CORP. has
caused this Note to be executed by its authorized officer and to be dated as of
the Original Issuance Date above.

     

    
      	 
      	
              MDWERKS,
      INC.

                

            
	 
      	
              By:  

            	
                /s/
      David M. Barnes

            
	 
      	 
      	
              Name:  

            	
              David
      M. Barnes

            
	 
      	 
      	
              Title:  

            	
              Chief
      Executive Officer

            

    

    

    
      	 
      	
              XENI
      FINANCIAL SERVICES, CORP.

                

            
	 
      	
              By:  

            	
                /s/
      David M. Barnes

            
	 
      	 
      	
              Name:  

            	
              David
      M. Barnes

            
	 
      	 
      	
              Title:  

            	
              Chief
      Executive Officer

            

    

    
      
         

      

      
        4Exhibit 4.3

    NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS WARRANT NOR THE
SECURITIES INTO WHICH THIS WARRANT IS EXERCISABLE HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
(I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.

     

    MDWERKS,
INC.

     

    SERIES
K WARRANT TO PURCHASE COMMON STOCK

     

    Warrant
No.: W-K-1

     

    Number of
Shares of Common Stock:         2,550,000       

     

    Date of
Issuance: April 15, 2009 (“ISSUANCE DATE”)

     

    MDWERKS,
INC., a Delaware corporation (the “COMPANY”), hereby certifies that, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, VICIS CAPITAL MASTER FUND, a sub-trust of Vicis Capital Series
Master Trust, a unit trust organized and existing under the laws of the Cayman
Islands (the “LENDER”), the registered holder hereof or its permitted assigns
(the “HOLDER”), is entitled, subject to the terms set forth below, to purchase
from the Company, at the Exercise Price (as defined below) then in effect, upon
surrender of this Warrant to Purchase Common Stock (including any warrants to
purchase Common Stock issued in exchange, transfer or replacement hereof, the
“WARRANT”), at any time or times on or after the date hereof, but not after
11:59 p.m., New York Time, on the Expiration Date (as defined below), Two
Million Five Hundred Fifty Thousand (2,550,000) fully paid nonassessable shares
of Common Stock (as defined below) (the “WARRANT SHARES”). Except as otherwise
defined herein, capitalized terms in this Warrant shall have the meanings set
forth in Section 15 hereof or the Securities Purchase Agreement (as defined
below).  This Warrant is the Warrant to purchase Common Stock issued
pursuant to the Loan and Securities Purchase Agreement dated April 15, 2009 (the
“SUBSCRIPTION DATE”), between the Company, Xeni Financial Services, Corp., a
Florida corporation, and the Lender (the “SECURITIES PURCHASE
AGREEMENT”).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1.           EXERCISE
OF WARRANT.

     

    (a)           Mechanics of
Exercise. Subject to the terms and conditions hereof (including, without
limitation, the limitations set forth in Section 1(f)), this Warrant may be
exercised by the Holder on any day on or after the date hereof, in whole or in
part, by (i) delivery of a written notice, in the form attached hereto as
Exhibit A (the
“EXERCISE NOTICE”), of the Holder’s election to exercise this Warrant and
(ii) (A) payment to the Company of an amount equal to the applicable
Exercise Price multiplied by the number of Warrant Shares as to which this
Warrant is being exercised (the “AGGREGATE EXERCISE PRICE”) in cash or by wire
transfer of immediately available funds or (B) by notifying the Company
that this Warrant is being exercised pursuant to a Cashless Exercise (as defined
in Section 1(d)). The Holder shall not be required to deliver the original
Warrant in order to affect an exercise hereunder. Execution and delivery of the
Exercise Notice with respect to less than all of the Warrant Shares shall have
the same effect as cancellation of the original Warrant and issuance of a new
Warrant evidencing the right to purchase the remaining number of Warrant Shares.
On or before the first (1st) Business Day following the date on which the
Company has received each of the Exercise Notice and the Aggregate Exercise
Price (or notice of a Cashless Exercise) (the “EXERCISE DELIVERY DOCUMENTS”),
the Company shall transmit by facsimile an acknowledgment of confirmation of
receipt of the Exercise Delivery Documents to the Holder and the Company’s
transfer agent (the “TRANSFER AGENT”). On or before the third (3rd) Business Day
following the date on which the Company has received all of the Exercise
Delivery Documents (the “SHARE DELIVERY DATE”), the Company shall
(X) provided that the Transfer Agent is participating in The Depository
Trust Company (“DTC”) Fast Automated Securities Transfer Program, credit such
aggregate number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account with
DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the
Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and dispatch by overnight courier to the address as
specified in the Exercise Notice, a certificate, registered in the Company’s
share register in the name of the Holder or its designee, for the number of
shares of Common Stock to which the Holder is entitled pursuant to such
exercise. Upon delivery of the Exercise Delivery Documents, the Holder shall be
deemed for all corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date such Warrant Shares are credited to the Holder’s DTC
account or the date of delivery of the certificates evidencing such Warrant
Shares as the case may be. If this Warrant is submitted in connection with any
exercise pursuant to this Section 1(a) and the number of Warrant Shares
represented by this Warrant submitted for exercise is greater than the number of
Warrant Shares being acquired upon an exercise, then the Company shall as soon
as practicable and in no event later than three (3) Business Days after any
exercise and at its own expense, issue, a new Warrant (in accordance with
Section 7(d)) representing the right to purchase the number of Warrant
Shares purchasable immediately prior to such exercise under this Warrant, less
the number of Warrant Shares with respect to which this Warrant is exercised. No
fractional shares of Common Stock are to be issued upon the exercise of this
Warrant, but rather the number of shares of Common Stock to be issued shall be
rounded up to the nearest whole number. The Company shall pay stamp and similar
taxes which may be payable with respect to the issuance and delivery of Warrant
Shares upon exercise of this Warrant. The Company shall not be required,
however, to pay any transfer tax or similar charge imposed in connection with
the issuance and delivery of Warrant shares in any name other than that of the
Holder.

     

    (b)           Exercise Price. For
purposes of this Warrant, “EXERCISE PRICE” means $0.35 subject to adjustment as
provided herein.

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

    (c)           Company’s Failure to Timely
Deliver Securities.

     

    (i)           The
Company understands that a delay in the delivery of the shares of Common Stock
upon exercise of this Warrant beyond the Share Delivery Date could result in
economic loss to the Holder. If the Company fails to deliver to the Holder such
shares via DWAC or a certificate or certificates pursuant to this Section by the
Share Delivery Date, the Company shall pay to the Holder, in cash, as partial
liquidated damages and not as a penalty, for each $500 of Warrant Shares (based
on the closing price of the Common Stock reported by the principal Trading
Market on the date such securities are submitted to the Company’s transfer
agent), $10 per Trading Day (increasing to $15 per Trading Day five (5) Trading
Days after such damages have begun to accrue and increasing to $20 per Trading
Day ten (10) Trading Days after such damages have begun to accrue) for each
Trading Day after the Share Delivery Date until such Common Stock certificate is
delivered. Nothing herein shall limit a Holder’s right to pursue actual damages
for the Company’s failure to deliver certificates, and the Holder shall have the
right to pursue all remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief.
Notwithstanding anything to the contrary contained herein, the Holder shall be
entitled to withdraw an Exercise Notice, and upon such withdrawal the Company
shall only be obligated to pay the liquidated damages accrued in accordance with
this Section through the date the Exercise Notice is withdrawn. Notwithstanding
the foregoing, the Holder shall not be entitled to the damages set forth herein
for the delay in the delivery of the shares of Common Stock upon exercise of
this Warrant, if such delay is due to causes which are beyond the reasonable
control of the Company, including, but not limited to, acts of God, acts of
civil or military authority, fire, flood, earthquake, hurricane, riot, war,
terrorism, sabotage and/or governmental action, provided that the Company: (i)
gives the Holder prompt notice of each such cause; and (ii) uses reasonable
efforts to correct such failure or delay in its performance.

     

    (ii)           In
addition to any other rights available to the Holder, if the Company fails to
cause its transfer agent to transmit to the Holder a certificate or certificates
representing the shares of Common Stock issuable upon exercise of the Warrant on
or before the Share Delivery Date, and if after such date the Holder is required
by its broker to purchase (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Holder of the shares of
Common Stock issuable upon exercise of the Warrant which the Holder anticipated
receiving upon such exercise (a “BUY-IN”), then the Company shall (1) pay in
cash to the Holder the amount by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (A) the number of
shares of Common Stock issuable upon exercise of the Warrant that the Company
was required to deliver to the Holder in connection with the conversion at issue
times (B) the price at which the sell order giving rise to such purchase
obligation was executed, and (2) at the option of the Holder, either reinstate
the portion of the Warrant and equivalent number of shares of Common Stock for
which such conversion was not honored or deliver to the Holder the number of
shares of Common Stock that would have been issued had the Company timely
complied with its conversion and delivery obligations hereunder. For example, if
the Holder purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted conversion of shares of Common Stock
with an aggregate sale price giving rise to such purchase obligation of $10,000,
under clause (1) of the immediately preceding sentence the Company shall be
required to pay the Holder $1,000. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of the Buy-In,
together with applicable confirmations and other evidence reasonably requested
by the Company. Nothing herein shall limit a Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver certificates representing
shares of Common Stock upon exercise of the Warrant as required pursuant to the
terms hereof.

     

    (d)           Cashless Exercise.
Notwithstanding anything contained herein to the contrary, commencing on October
15, 2009, if, at the time of exercise of this Warrant, a Registration Statement
(as defined in the Registration Rights Agreement) covering the Warrant Shares
that are the subject of the Exercise Notice (the “UNAVAILABLE WARRANT SHARES”)
is not available for the resale of such Unavailable Warrant Shares, the Holder
may, in its sole discretion, exercise this Warrant in whole or in part and, in
lieu of making the cash payment otherwise contemplated to be made to the Company
upon such exercise in payment of the Aggregate Exercise Price, elect instead to
receive upon such exercise the “Net Number” of shares of Common Stock determined
according to the following formula (a “CASHLESS EXERCISE”):

     

    
      
        
          	 
      	
                  Net
      Number =

                	
                  (A
      x B) - (A x C)

                	 
      
	 
      	 
      	
                  B

                	 
      

        

      

    

     

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

    For
purposes of the foregoing formula:

    

    
      	 
      	
              A

            	
              =

            	
              the
      total number of shares with respect to which this Warrant is then being
      exercised.

            
	 
      	 
      	 
      	 
      
	 
      	
              B

            	
              =

            	
              the
      Closing Sale Price of the shares of Common Stock (as reported by
      Bloomberg) on the date immediately preceding the date of the Exercise
      Notice.

            
	 
      	 
      	 
      	 
      
	 
      	
              C

            	
              =

            	
              the
      Exercise Price then in effect for the applicable Warrant Shares at the
      time of such exercise.

            

    

     

    (e)           Disputes. In the case
of a dispute as to the determination of the Exercise Price or the arithmetic
calculation of the Warrant Shares, the Company shall promptly issue to the
Holder the number of Warrant Shares that are not disputed and resolve such
dispute in accordance with Section 12.

     

    (f)           Limitations on
Exercises.

     

    (i)           Notwithstanding
anything to the contrary set forth in this Warrant, at no time may a Holder of
this Warrant exercise this Warrant to the extent that after giving effect to
such exercise, the Holder (together with the Holder’s affiliates) would
beneficially own (as determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and the rules thereunder) in excess
of 4.99% of the number of shares of Common Stock outstanding immediately after
giving effect to such exercise; provided, however, that upon a Holder of this
Warrant providing the Company with sixty-one (61) days notice (the “WAIVER
NOTICE”) that such Holder would like to waive this Section with regard to any or
all shares of Common Stock issuable upon exercise of this Warrant, this Section
will be of no force or effect with regard to all or a portion of the Warrant
referenced in the Waiver Notice.

     

    (ii)           Notwithstanding
anything to the contrary set forth in this Warrant, at no time may a Holder of
this Warrant exercise this Warrant to the extent that after giving effect to
such exercise, the Holder (together with the Holder’s affiliates) would
beneficially own (as determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and the rules thereunder) in excess
of 9.99% of the number of shares of Common Stock outstanding immediately after
giving effect to such exercise; provided, however, that upon a Holder of this
Warrant providing the Company with a Waiver Notice that such Holder would like
to waive this Section with regard to any or all shares of Common Stock issuable
upon exercise of the Warrant, this Section shall be of no force or effect with
regard to all or a portion of the Warrant referenced in the Waiver
Notice.

     

    (iii)           Notwithstanding
anything to the contrary set forth in this Warrant, at no time may a Holder of
this Warrant exercise this Warrant to the extent that the issuance of shares of
Common Stock upon such exercise would exceed the aggregate number of shares of
Common Stock which the Company may issue upon exercise of this Warrant without
breaching the Company’s obligations under the rules or regulation of the
principal exchange upon which shares of the Company’s Common Stock are traded.
In such an event, the Company covenants to promptly as possible seek to obtain
the necessary shareholder or other approvals necessary to issue the shares of
Common Stock upon the exercise of this Warrant.

    
      
         

      

      
        - 4
-

        
          

        

      

      
         

      

    

    (g)           Insufficient Authorized
Shares. If at any time while any of the Warrants remain outstanding the
Company does not have a sufficient number of authorized and unreserved shares of
Common Stock (an “AUTHORIZED SHARE FAILURE”) to satisfy its obligation to
reserve for issuance upon exercise of the Warrants at least a number of shares
of Common Stock equal to 100% of the number of shares of Common Stock as shall
from time to time be necessary to effect the exercise of all of the Warrants
then outstanding (the “REQUIRED RESERVE AMOUNT”), then the Company shall
immediately take all action necessary to increase the Company’s authorized
shares of Common Stock to an amount sufficient to allow the Company to reserve
the Required Reserve Amount for the Warrants then outstanding. Without limiting
the generality of the foregoing sentence, as soon as practicable after the date
of the occurrence of an Authorized Share Failure, but in no event later than
ninety (90) days after the occurrence of such Authorized Share Failure, the
Company shall hold a meeting of its stockholders for the approval of an increase
in the number of authorized shares of Common Stock. In connection with such
meeting, the Company shall provide each stockholder with a proxy statement and
shall use its reasonable best efforts to solicit its stockholders’ approval of
such increase in authorized shares of Common Stock and to cause its board of
directors to recommend to the stockholders that they approve such
proposal.

     

    (h)           Redemption. Except as
otherwise explicitly provided for herein, this Warrant is not redeemable or
callable by the Company at any time.

     

    2.           ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.

     

    The
Exercise Price and the number of Warrant Shares shall be adjusted from time to
time as follows:

     

    (a)           Adjustment upon Issuance of
shares of Common Stock. If and whenever on or after the Subscription Date
the Company issues or sells, or in accordance with this Section 2 is deemed
to have issued or sold, any shares of Common Stock (including the issuance or
sale of shares of Common Stock owned or held by or for the account of the
Company, but excluding shares of Common Stock which are Excluded Securities or
are deemed to have been issued by the Company in connection with any Excluded
Securities) for a consideration per share (the “NEW ISSUANCE PRICE”) less than a
price (the “APPLICABLE PRICE”) equal to the Exercise Price in effect immediately
prior to such issue or sale or deemed issuance or sale (the foregoing a
“DILUTIVE ISSUANCE”), then immediately after such Dilutive Issuance, the
Exercise Price then in effect shall be reduced to an amount equal to the New
Issuance Price. Upon each such adjustment of the Exercise Price hereunder, the
number of Warrant Shares shall be adjusted to the number of shares of Common
Stock determined by multiplying the Exercise Price in effect immediately prior
to such adjustment by the number of Warrant Shares acquirable upon exercise of
this Warrant immediately prior to such adjustment and dividing the product
thereof by the Exercise Price resulting from such adjustment. For purposes of
determining the adjusted Exercise Price under this Section 2(a), the
following shall be applicable:

     

    (i)           Issuance of Options.
If the Company in any manner grants any Options and the lowest price per share
for which one share of Common Stock is issuable upon the exercise of any such
Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price,
then such shares of Common Stock (underlying such Option shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
granting or sale of such Option for such price per share. For purposes of this
Section 2(a)(i), the “lowest price per share for which one share of Common
Stock is issuable upon exercise of such Options or upon conversion, exercise or
exchange of such Convertible Securities” shall be equal to the sum of the lowest
amounts of consideration (if any) received or receivable by the Company with
respect to any one share of Common Stock upon the granting or sale of the
Option, upon exercise of the Option and upon conversion, exercise or exchange of
any Convertible Security issuable upon exercise of such Option. No further
adjustment of the Exercise Price or number of Warrant Shares shall be made upon
the actual issuance of such shares of Common Stock or of such Convertible
Securities upon the exercise of such Options or upon the actual issuance of such
shares of Common Stock upon conversion, exercise or exchange of such Convertible
Securities.

    
      
         

      

      
        - 5
-

        
          

        

      

      
         

      

    

    (ii)           Issuance of Convertible
Securities. If the Company in any manner issues or sells any Convertible
Securities and the lowest price per share for which one share of Common Stock is
issuable upon the conversion, exercise or exchange thereof is less than the
Applicable Price, then such shares of Common Stock issuable upon conversion of
such Convertible Securities shall be deemed to be outstanding and to have been
issued and sold by the Company at the time of the issuance or sale of such
Convertible Securities for such price per share. For the purposes of this
Section 2(a)(ii), the “lowest price per share for which one share of Common
Stock is issuable upon the conversion, exercise or exchange” shall be equal to
the sum of the lowest amounts of consideration (if any) received or receivable
by the Company with respect to one share of Common Stock upon the issuance or
sale of the Convertible Security and upon conversion, exercise or exchange of
such Convertible Security. No further adjustment of the Exercise Price or number
of Warrant Shares shall be made upon the actual issuance of such shares of
Common Stock upon conversion, exercise or exchange of such Convertible
Securities, and if any such issue or sale of such Convertible Securities is made
upon exercise of any Options for which adjustment of this Warrant has been or is
to be made pursuant to other provisions of this Section 2(a), no further
adjustment of the Exercise Price or number of Warrant Shares shall be made by
reason of such issue or sale. A change that permits the holder of an Option or
Convertible Security to utilize a cashless exercise feature shall not be deemed
to decrease the consideration payable by the holder solely by reason of the fact
that the cashless exercise feature would result in a reduction in cash
consideration receivable by the Company.

     

    (iii)           Change in Option Price or
Rate of Conversion. If the purchase price provided for in any Options,
the additional consideration, if any, payable upon the issue, conversion,
exercise or exchange of any Convertible Securities, or the rate at which any
Convertible Securities are convertible into or exercisable or exchangeable for
shares of Common Stock increases or decreases at any time, the Exercise Price
and the number of Warrant Shares in effect at the time of such increase or
decrease shall be adjusted to the Exercise Price and the number of Warrant
Shares which would have been in effect at such time had such Options or
Convertible Securities provided for such increased or decreased purchase price,
additional consideration or increased or decreased conversion rate, as the case
may be, at the time initially granted, issued or sold. For purposes of this
Section 2(a)(iii), if the terms of any Option or Convertible Security that
was outstanding as of the date of issuance of this Warrant are increased or
decreased in the manner described in the immediately preceding sentence, then
such Option or Convertible Security and the shares of Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have
been issued as of the date of such increase or decrease. No adjustment pursuant
to this Section 2(a) shall be made if such adjustment would result in an
increase of the Exercise Price then in effect or a decrease in the number of
Warrant Shares. A change that permits the holder of an Option or Convertible
Security to utilize a cashless exercise feature shall not be deemed to decrease
the consideration payable by the holder solely by reason of the fact that the
cashless exercise feature would result in a reduction in cash consideration
receivable by the Company.

     

    (iv)           Calculation of Consideration
Received. If any Option is issued in connection with the issue or sale of
other securities of the Company, together comprising one integrated transaction
in which no specific consideration is allocated to such Options by the parties
thereto, the Options will be deemed to have been issued for a consideration of
$0.01. If any Common Stock, Options or Convertible Securities are issued or sold
or deemed to have been issued or sold for cash, the consideration received
therefor will be deemed to be the gross amount paid by the purchaser of such
Common Stock, Options, or Convertible Securities, before any commissions,
discounts, fees or expenses. If any Common Stock, Options or Convertible
Securities are issued to the owners of the non-surviving entity in connection
with any merger in which the Company is the surviving entity, the amount of
consideration therefor will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to
such Common Stock, Options or Convertible Securities, as the case may be. If any
Common Stock, Options or Convertible Securities are issued or sold or deemed to
have been issued or sold for non-cash consideration, the consideration received
therefore will be deemed to be the fair value of such non-cash consideration as
determined in good faith by the Board of Directors of the
Company.

    
      
         

      

      
        - 6
-

        
          

        

      

      
         

      

    

    (v)           Record Date. If the
Company takes a record of the holders of shares of Common Stock for the purpose
of entitling them (A) to receive a dividend or other distribution payable in
shares of Common Stock, Options or in Convertible Securities or (B) to subscribe
for or purchase shares of Common Stock, Options or Convertible Securities, then
such record date will be deemed to be the date of the issue or sale of the
shares of Common Stock deemed to have been issued or sold upon the declaration
of such dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may
be.

     

    (b)           Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding,
(i) pays a stock dividend on its Common Stock or otherwise makes a distribution
on any class of capital stock that is payable in shares of Common Stock, (ii)
subdivides outstanding shares of Common Stock into a larger number of shares, or
(iii) combines outstanding shares of Common Stock into a smaller number of
shares, then in each such case the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such event.
Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.

     

    (c)           Fundamental
Transactions. If, at any time while this Warrant is outstanding there is
a Fundamental Transaction, then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the same amount and kind of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of the number of shares of Common Stock then
issuable upon exercise in full of this Warrant (the “ALTERNATE CONSIDERATION”).
For purposes of any such conversion, the determination of the Exercise Price
shall be appropriately adjusted to apply to such Alternate Consideration based
on the amount of Alternate Consideration issuable in respect of one share of
Common Stock in such Fundamental Transaction, and the Company shall apportion
the Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of Warrant following such Fundamental Transaction.
The terms of any agreement pursuant to which a Fundamental Transaction is
effected shall include terms requiring any such successor or surviving entity to
comply with the provisions of this paragraph (c) and insuring that the Common
Stock (or any such replacement security) will be similarly adjusted upon any
subsequent transaction analogous to a Fundamental Transaction.

     

    (d)           Other Events. If any
event occurs of the type contemplated by the provisions of this Section 2
but not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom stock rights or
other rights with equity features), then the Company’s Board of Directors in
good faith will make an appropriate adjustment in the Conversion Price so as to
be equitable under the circumstances and otherwise protect the rights of the
Holder; provided that no such adjustment will increase the Exercise Price as
otherwise determined pursuant to this Section 7.3.

    
      
         

      

      
        - 7
-

        
          

        

      

      
         

      

    

    3.           RIGHTS
UPON DISTRIBUTION OF ASSETS.

     

    If the Company shall declare or make
any dividend or other distribution of its assets (or rights to acquire its
assets) to holders of shares of Common Stock, by way of return of capital or
otherwise (including, without limitation, any distribution of cash, stock or
other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a “DISTRIBUTION”), at any time after the issuance of this
Warrant, then, in each such case, the Exercise Price in effect immediately prior
to the close of business on the record date fixed for the determination of
holders of shares of Common Stock entitled to receive the Distribution shall be
reduced, effective as of the close of business on such record date, to a price
determined by multiplying such Exercise Price by a fraction of which (i) the
numerator shall be the Exercise Price on such record date minus the value of the
Distribution (as determined in good faith by the Company’s Board of Directors)
applicable to one share of Common Stock, and (ii) the denominator shall be the
Exercise Price on such record date.

     

    4.           PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.

     

    (a)           Purchase Rights. In
addition to any adjustments pursuant to Section 2 above, if at any time the
Company grants, issues or sells any Options, Convertible Securities or rights to
purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “PURCHASE RIGHTS”), then the
Holder will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which the Holder could have acquired if
the Holder had held the proportionate number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of
shares of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.

     

    (b)           Redemption Right. No
sooner than fifteen (15) days nor later than ten (10) days prior to the
consummation of a Change of Control, but not prior to the public announcement of
such Change of Control, the Company shall deliver written notice thereof via
facsimile and overnight courier to the Holder (a “CHANGE IN CONTROL NOTICE”). At
any time during the period beginning after the Holder’s receipt of a Change of
Control Notice and ending ten (10) Trading Days after the consummation of such
Change of Control, the Holder may require the Company to redeem all or any
portion of this Warrant by delivering written notice thereof (“CHANGE IN CONTROL
REDEMPTION NOTICE”) to the Company, which Change of Control Redemption Notice
shall indicate the amount the Holder is electing to be redeemed. Any such
redemption shall be in cash in the amount equal to the value of the remaining
unexercised portion of this Warrant on the date of such consummation, which
value shall be determined by use of the Black Scholes Option Pricing Model
reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate
for a period equal to the remaining term of this Warrant as of such date of
request and (B) an expected volatility equal to the greater of 60% and the 100
day volatility obtained from the HVT function on Bloomberg.

     

    5.           NONCIRCUMVENTION.

     

    The
Company hereby covenants and agrees that the Company will not, by amendment of
its Certificate of Incorporation, Bylaws or through any reorganization, transfer
of assets, consolidation, merger, scheme of arrangement, dissolution, issue or
sale of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, and will at all
times in good faith carry out all the provisions of this Warrant and take all
action as may be required to protect the rights of the Holder. Without limiting
the generality of the foregoing, the Company (i) shall not increase the par
value of any shares of Common Stock receivable upon the exercise of this Warrant
above the Exercise Price then in effect, (ii) shall take all such actions as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock upon the exercise of
this Warrant, and (iii) shall, so long as any of the Warrants are outstanding,
take all action necessary to reserve and keep available out of its authorized
and unissued shares of Common Stock, solely for the purpose of effecting the
exercise of the Warrants, 100% of the number of shares of Common Stock as shall
from time to time be necessary to effect the exercise of the Warrants then
outstanding (without regard to any limitations on exercise).

    
      
         

      

      
        - 8
-

        
          

        

      

      
         

      

    

    6.           WARRANT
HOLDER NOT DEEMED A STOCKHOLDER.

     

    Except as
otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive
dividends or be deemed the holder of share capital of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in such Person’s capacity as the Holder of this Warrant,
any of the rights of a stockholder of the Company or any right to vote, give or
withhold consent to any corporate action (whether any reorganization, issue of
stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
which such Person is then entitled to receive upon the due exercise of this
Warrant. In addition, nothing contained in this Warrant shall be construed as
imposing any liabilities on the Holder to purchase any securities (upon exercise
of this Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 6, the Company shall provide the Holder with
copies of the same notices and other information given to the stockholders of
the Company generally, contemporaneously with the giving thereof to the
stockholders.

     

    7.           REISSUANCE
OF WARRANTS.

     

    (a)           Transfer of Warrant.
If this Warrant is to be transferred, the Holder shall surrender this Warrant to
the Company, whereupon the Company will issue promptly following satisfaction of
the transfer provisions contained in the Securities Purchase Agreement and
deliver upon the order of the Holder a new Warrant (in accordance with
Section 7(d)), in the name of the validly registered assignee or
transferee, representing the right to purchase the number of Warrant Shares
being transferred by the Holder and, if less then the total number of Warrant
Shares then underlying this Warrant is being transferred, a new Warrant (in
accordance with Section 7(d)) to the Holder representing the right to
purchase the number of Warrant Shares not being transferred.

     

    (b)           Lost, Stolen or Mutilated
Warrant. Upon receipt by the Company of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant,
and, in the case of loss, theft or destruction, of any indemnification
undertaking by the Holder to the Company in customary form and, in the case of
mutilation, upon surrender and cancellation of this Warrant, the Company shall
execute and deliver to the Holder a new Warrant (in accordance with
Section 7(d)) representing the right to purchase the Warrant Shares then
underlying this Warrant.

     

    (c)           Exchangeable for Multiple
Warrants. This Warrant is exchangeable, upon the surrender hereof by the
Holder at the principal office of the Company, for a new Warrant or Warrants (in
accordance with Section 7(d)) representing in the aggregate the right to
purchase the number of Warrant Shares then underlying this Warrant, and each
such new Warrant will represent the right to purchase such portion of such
Warrant Shares as is designated by the Holder at the time of such surrender;
provided, however, that no Warrants for fractional shares of Common Stock shall
be given.

    
      
         

      

      
        - 9
-

        
          

        

      

      
         

      

    

    (d)           Issuance of New
Warrants. Whenever the Company is required to issue a new Warrant
pursuant to the terms of this Warrant, such new Warrant (i) shall be of like
tenor with this Warrant, (ii) shall represent, as indicated on the face of such
new Warrant, the right to purchase the Warrant Shares then underlying this
Warrant (or in the case of a new Warrant being issued pursuant to
Section 7(a) or Section 7(c), the Warrant Shares designated by the
Holder which, when added to the number of shares of Common Stock underlying the
other new Warrants issued in connection with such issuance, does not exceed the
number of Warrant Shares then underlying this Warrant), (iii) shall have an
issuance date, as indicated on the face of such new Warrant which is the same as
the Issuance Date, and (iv) shall have the same rights and conditions as this
Warrant.

     

    8.           NOTICES.

     

    Whenever
notice is required to be given under this Warrant, unless otherwise provided
herein, such notice shall be given in accordance with Section 12.6 of the
Securities Purchase Agreement. The Company shall provide the Holder with prompt
written notice of all actions taken pursuant to this Warrant, including in
reasonable detail a description of such action and the reason therefore. Without
limiting the generality of the foregoing, the Company will give written notice
to the Holder (i) immediately upon any adjustment of the Exercise Price, setting
forth in reasonable detail, and certifying, the calculation of such adjustment
and (ii) at least fifteen (15) days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or
distribution upon the shares of Common Stock, (B) with respect to any grants,
issuances or sales of any Options, Convertible Securities or rights to purchase
stock, warrants, securities or other property to holders of shares of Common
Stock or (C) for determining rights to vote with respect to any Fundamental
Transaction, dissolution or liquidation, provided in each case that such
information shall be made known to the public prior to or in conjunction with
such notice being provided to the Holder.

    

    9.           AMENDMENT
AND WAIVER.

     

    Except as
otherwise provided herein, the provisions of this Warrant may be amended and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the Holder; provided that no such action may increase the exercise
price of any Warrant or decrease the number of shares or class of stock
obtainable upon exercise of any Warrant without the written consent of the
Holder. No such amendment shall be effective to the extent that it applies to
less than all of the holders of the Warrants then outstanding.

     

    10.           GOVERNING
LAW.

     

    This
Warrant shall be governed by and construed and enforced in accordance with, and
all questions concerning the construction, validity, interpretation and
performance of this Warrant shall be governed by, the internal laws of the State
of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York.

     

    11.           CONSTRUCTION;
HEADINGS.

     

    This
Warrant shall be deemed to be jointly drafted by the Company and the Lender and
shall not be construed against any person as the drafter hereof. The headings of
this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant.

    
      
         

      

      
        - 10
-

        
          

        

      

      
         

      

    

    12.           DISPUTE
RESOLUTION.

     

    In the
case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall submit the
disputed determinations or arithmetic calculations via facsimile within two
Business Days of receipt of the Exercise Notice giving rise to such dispute, as
the case may be, to the Holder. If the Holder and the Company are unable to
agree upon such determination or calculation of the Exercise Price or the
Warrant Shares within three Business Days of such disputed determination or
arithmetic calculation being submitted to the Holder, then the Company shall,
within two Business Days submit via facsimile (a) the disputed determination of
the Exercise Price to an independent, reputable investment bank selected by the
Company and approved by the Holder (such approval not to be unreasonably
withheld or delayed) or (b) the disputed arithmetic calculation of the Warrant
Shares to the Company’s independent, outside accountant. The Company shall cause
at its expense the investment bank or the accountant, as the case may be, to
perform the determinations or calculations and notify the Company and the Holder
of the results no later than ten Business Days from the time it receives the
disputed determinations or calculations. Such investment bank’s or accountant’s
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.

     

    13.           REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.

     

    The
remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant and the other Transaction Documents,
at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder right
to pursue actual damages for any failure by the Company to comply with the terms
of this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at law
for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the holder of this Warrant shall
be entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.

     

    14.           TRANSFER.

     

    This
Warrant may be offered for sale, sold, transferred or assigned without the
consent of the Company, except as may otherwise be required by the Securities
Purchase Agreement.

     

    15.           CERTAIN
DEFINITIONS.

     

                For
purposes of this Warrant, the following terms shall have the following
meanings:

     

    (a)           “APPROVED
STOCK PLAN” means any employee benefit plan which has been approved by the Board
of Directors of the Company, pursuant to which the Company’s securities may be
issued to any employee, consultant, officer or director for services provided to
the Company.

     

    (b)            “BLOOMBERG”
means Bloomberg Financial Markets.

     

    (c)           “BUSINESS
DAY” means any day other than Saturday, Sunday or other day on which commercial
banks in The City of New York are authorized or required by law to remain
closed.

    
      
         

      

      
        - 11
-

        
          

        

      

      
         

      

    

    (d)           “CHANGE
OF CONTROL” means any Fundamental Transaction other than (i) any reorganization,
recapitalization or reclassification of the Common Stock in which holders of the
Company’s voting power immediately prior to such reorganization,
recapitalization or reclassification continue after such reorganization,
recapitalization or reclassification to hold publicly-traded securities and,
directly or indirectly, the voting power of the surviving entity or entities
necessary to elect a majority of the members of the board of directors (or their
equivalent if other than a corporation) of such entity or entities, or (ii)
pursuant to a migratory merger effected solely for the purpose of changing the
jurisdiction of incorporation of the Company or (iii) any transaction that might
otherwise be a Fundamental Transaction but which the Holder agrees in writing
shall not be deemed to be a Fundamental Transaction for purposes of this
Warrant.

     

    (e)           “CLOSING
BID PRICE” and “CLOSING SALE PRICE” means, for any security as of any date, the
last closing bid price and last closing trade price, respectively, for such
security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the
closing bid price or the closing trade price, as the case may be, then the last
bid price or last trade price, respectively, of such security prior to 4:00
p.m., New York Time, as reported by Bloomberg, or, if the Principal Market is
not the principal securities exchange or trading market for such security, the
last closing bid price or last trade price, respectively, of such security on
the principal securities exchange or trading market where such security is
listed or traded as reported by Bloomberg, or if the foregoing do not apply, the
last closing bid price or last trade price, respectively, of such security in
the over-the-counter market on the electronic bulletin board for such security
as reported by Bloomberg, or, if no closing bid price or last trade price,
respectively, is reported for such security by Bloomberg, the average of the bid
prices, or the ask prices, respectively, of any market makers for such security
as reported in the “pink sheets” by Pink Sheets LLC (formerly the National
Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price
cannot be calculated for a security on a particular date on any of the foregoing
bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of
such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree
upon the fair market value of such security, then such dispute shall be resolved
pursuant to Section 12. All such determinations to be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar
transaction during the applicable calculation period.

     

    (f)           “COMMON
STOCK” means (i) the Company’s shares of Common Stock, par value $0.001 per
share, and (ii) any share capital into which such Common Stock shall have been
changed or any share capital resulting from a reclassification of such Common
Stock.

     

    (g)           “CONVERTIBLE
SECURITIES” means any stock or securities (other than Options) directly or
indirectly convertible into or exercisable or exchangeable for shares of Common
Stock.

     

    (h)           “ELIGIBLE
MARKET” means the Principal Market, The New York Stock Exchange, Inc., the
Nasdaq National Market, the Nasdaq Capital Market or the American Stock
Exchange.

    
      
         

      

      
        - 12
-

        
          

        

      

      
         

      

    

    (i)           “EXCLUDED
SECURITIES” means (i) any Common Stock and/or Options (and the Common Stock
issuable pursuant to such Options) issued or issuable: (A) in connection
with any Approved Stock Plan up to a maximum of ten percent (10%) of the Common
Stock outstanding at the time of issuance of such Common Stock and/or Options
(provided that securities issued in connection with an Approved Stock Plan that
are outstanding as of the Issuance Date and shares of Common Stock issuable
pursuant to exercise or conversion of such outstanding securities shall not be
included for purposes of calculating the maximum of ten percent (10%)) or
(B) upon conversion or exercise of any Options or Convertible Securities
which are outstanding on the Issuance Date; provided, such options or
Convertible Securities are disclosed on Schedule 3.4(b) of the Securities
Purchase Agreement or the Company’s filings with the Securities and Exchange
Commission; provided further, that the terms of such Options or Convertible
Securities are not amended, modified or changed on or after the Issuance Date to
lower the conversion or exercise price thereof and so long as the number of
shares of Common Stock underlying such securities is not otherwise increased;
(ii) any shares of Common Stock issued in an underwritten public offering
in which the gross cash proceeds to the Company (before underwriting discounts,
commissions and fees) are at least $10,000,000; (iii) Options (and the
Common Stock issuable pursuant thereto) issued to medical practices that are
customers of the Company in good standing to acquire up to a maximum of 250,000
shares of Common Stock per practice with an exercise or conversion price at or
above the Closing Sale Price on the day of issuance; (iv) up to 250,000 shares
of Common Stock (or options exercisable for up to 250,000 shares of Common Stock
with an exercise price at or above the Closing Sale Price on the day of
issuance) as consideration for strategic acquisitions up to a maximum of 250,000
shares of Common Stock per acquisition; (v) up to 250,000 shares of Common Stock
(or securities convertible into or exercisable for up to 250,000 shares of
Common Stock with an exercise price at or above the Closing Sale Price on the
day of issuance) per year to third parties in connection with investor relations
and public relations efforts of the Company; (vi) up to 250,000 shares of Common
Stock, options, or warrants to be issued to Rodman & Renshaw (or their
designees) as consideration for securing a line of credit or similar financing
for the Company or its subsidiaries; and (vii) up to 2,000,000 shares of Common
Stock to be issued to Medical Solutions Management Inc. and or Orthosupply
Management, Inc., their respective affiliates or designees in connection with
the acquisition by the Corporation of that certain Management Agreement, dated
April 30, 2007, by and between Orthosupply Management, Inc. and Deutsche Medical
Services, Inc. (the “DMSI Contract Acquisition”).

     

    (j)           “EXPIRATION
DATE” means the date one hundred twenty months after the Issuance Date or, if
such date falls on a day other than a Business Day or on which trading does not
take place on the Principal Market (a “HOLIDAY”), the next date that is not a
Holiday.

     

    (k)           “FUNDAMENTAL
TRANSACTION” means that the Company shall, directly or indirectly, in one or
more related transactions, (i) consolidate or merge with or into (whether or not
the Company is the surviving corporation) another Person, or (ii) sell, assign,
transfer, convey or otherwise dispose of all or substantially all of the
properties or assets of the Company to another Person, or (iii) allow another
Person to make a purchase, tender or exchange offer that is accepted by the
holders of more than the 50% of either the outstanding shares of Common Stock
(not including any shares of Common Stock held by the Person or Persons making
or party to, or associated or affiliated with the Persons making or party to,
such purchase, tender or exchange offer), or (iv) consummate a stock purchase
agreement or other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of arrangement) with
another Person whereby such other Person acquires more than the 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or associated or
affiliated with the other Persons making or party to, such stock purchase
agreement or other business combination), (v) reorganize, recapitalize or
reclassify its Common Stock (other than a forward or reverse stock split), or
(vi) any “person” or “group” (as these terms are used for purposes of Sections
13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
50% of the aggregate ordinary voting power represented by issued and outstanding
Common Stock.

     

    (l)           “OPTIONS”
means any rights, warrants or options to subscribe for or purchase shares of
Common Stock or Convertible Securities.

     

    (m)           “PARENT
ENTITY” of a Person means an entity that, directly or indirectly, controls the
applicable Person and whose common stock or equivalent equity security is quoted
or listed on an Eligible Market, or, if there is more than one such Person or
Parent Entity, the Person or Parent Entity with the largest public market
capitalization as of the date of consummation of the Fundamental
Transaction.

    
      
         

      

      
        - 13
-

        
          

        

      

      
         

      

    

     

    (n)           “PERSON”
means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency thereof.

     

    (o)           “PRINCIPAL
MARKET” means the Over-the-Counter Bulletin Board.

     

    (p)            “REGISTRATION
RIGHTS AGREEMENT” means that certain registration rights agreement by and among
the Company and the Buyers.

     

    (q)           “SUCCESSOR
ENTITY” means the Person (or, if so elected by the Holder, the Parent Entity)
formed by, resulting from or surviving any Fundamental Transaction or the Person
(or, if so elected by the Holder, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.

     

    
      [Signature page
follows]

    

    
      
         

      

      
        - 14
-

        
          

        

      

      
         

      

    

    

    IN
WITNESS WHEREOF, the Company has caused this Series K Warrant to Purchase Common
Stock to be duly executed as of the Issuance Date set out above.

    

    
      	 
      	 
      	 
      	 
      
	 
      	
              MDWERKS,
      INC.

                

            
	 
      	
              By:  

            	
                /s/
      David M. Barnes

            
	 
      	 
      	
              Name:  

            	
              David
      M. Barnes

            
	 
      	 
      	
              Title:  

            	
              Chief
      Executive Officer

            

    

     

    
      
         

      

      
        - 15
-

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    EXERCISE
NOTICE

    TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

    WARRANT
TO PURCHASE COMMON STOCK

    

    MDWERKS,
INC.

    

         The
undersigned holder hereby exercises the right to purchase
                                        
of the shares of Common Stock (“Warrant Shares”) of MDwerks,
Inc., a Delaware corporation (the “Company”), evidenced by the
attached Series K Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms
used herein and not otherwise defined shall have the respective meanings set
forth in the Warrant.

    

         1. Form
of Exercise Price. The Holder intends that payment of the Exercise Price shall
be made as:

                                  
a “Cash Exercise” with respect to
                    
Warrant Shares; and/or

                                  
a “Cashless Exercise” with respect to
                    
Warrant Shares.

    

         2. Payment
of Exercise Price. In the event that the holder has elected a Cash Exercise with
respect to some or all of the Warrant Shares to be issued pursuant hereto, the
holder shall pay the Aggregate Exercise Price in the sum of $
                      to
the Company in accordance with the terms of the Warrant.

    

         3. Delivery
of Warrant Shares. The Company shall deliver to the holder
                    
Warrant Shares in accordance with the terms of the Warrant.

    

    Date:
                          ,
          

    

    
      
        
          
            
              
                
                  	 
      	 
      	 
      
	
                          Name
      of Registered Holder

                        	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                          By:

                        	 
      	 
      	 
      	 
      
	

                          Name:

                          Title: 

                        	 
      	 
      

                

              

            

          

        

      

    

    
      
         

      

      
        - 16
-

        
          

        

      

      
         

      

    

    

    ACKNOWLEDGMENT

    

    The
Company hereby acknowledges this Exercise Notice and hereby directs Corporate
Stock Transfer to issue the above indicated number of shares of Common Stock in
accordance with the Transfer Agent Instructions dated April 9, 2009 from the
Company and acknowledged and agreed to by Corporate Stock Transfer.

    

    
      	 
      	 
      	 
      	 
      
	 
      	
              MDWERKS,
      INC.

                

            
	 
      	
              By:  

            	
                

            
	 
      	 
      	
              Name:  

            	 
      
	 
      	 
      	
              Title:  

            	 
      

    

     

    
      
         

      

      
        - 17
-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]