Document:

22122
      20th
      Ave. SE,
      Suite 161

    Bothell,
      WA 98021

    Telephone
      425.424.3324

     

    Dear
      Chris:

     

    It
      has
      been a pleasure meeting you over the last few weeks. The Board is extremely
      impressed with your qualifications and enthusiasm, and are confident that
      you
      will be
      a great addition to our growing team. Accordingly, we are pleased to offer
      you a
      full-time employment position with Neah Power. This letter serves as our formal
      offer, combined with the employee non-disclosure and intellectual property
      assignment letter, which together specify the terms and conditions of you
      employment with Neah power, and
      when
      signed/accepted by you, shall serve as your binding employment agreement. Your
      employment, as with all employees at Neah Power, is on an "at-will" basis,
      meaning that either you or Neah Power can terminate the relationship at any
      time
      with or without Cause
      (as
      defined below) or notice. Any statements to the contrary are not authorized
      and
      may not be relied upon.

     

    We
      offer
      you the position of Chief Operating Officer of Neah Power Systems, Inc.
      reporting to me, President and CEO, with an office located in Bothell,
      Washington, and
      an
      effective start date of September 15, 2007. Your annual base salary will be
      two
      hundred and twenty-five thousand dollars ($225,000,00). In the event you are
      terminated for
      any
      reason other than for Cause or the winding down of Neah's operations, you will
      receive six (6) months severance pay based on your then-rnrreut Ilse salary.
      In
      the
      event
      of a Change in Control Transaction (as defined below) and you are not offered
      a
      similar role/position at a similar compensation, you will receive a lump-sum
      severance payment equal to six (6) months of your then-current base salary.
      In
      order for you to receive your severance payment you will need to release any
      claims that you may have against Neah Power, its successor, and their respective
      officers, directors and employees. You will also be eligible to receive two
      million two hundred fifty thousand (2,250,000) stock options pursuant to the
      attached Stock Option Agreement, which options are subject to (a) the terms
      of
      Neah Power's Stock Option Plan, as modified from time to time, and (b) approval
      by the plan administrator and the Board of Directors. In the event of a sale
      of
the
      company or a change of control (defined as sale or merger of the company)
      these
      options
      shall immediately vest.

     

    Bonus:
      In
      addition to the base compensation, you shall be entitled to receive a bonus
      equal to 50% of your base compensation upon completion of the following
      milestones;

    1)
      Completion of the 45 watt prototype in approximate form factor of Ba
      5590
      with

    2)
      Establishment of a manufacturing partner

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      
        

      

    

    22122
      20th
      Ave. SE,
      Suite 161

    Bothell,
      WA 98021

    Telephone
      425.424.3324

     

    3) Completion
      of ONR contracts

    4) Establishment
      of material strategic OEM/Military relationships acceptable to the
      Board.

    5) The
      company successfully raising a minimum additional 5 million dollars

     

    For
      purposes of this offer, "Cause"
      means:
      fraud, misappropriation or embezzlement on the part of you; your dishonest
      or
      fraudulent conduct; the indictment of you for a felony; or your willful
      misconduct
      or gross neglect of duties, including your refusal to comply in any material
      respect with the legal directives of Neah Power (or its successor), its
      executive management or the Board of Directors.

     

    For
      purposes of this offer "Change
      in Control Transaction" shall
      mean a sale, conveyance,
      or
      other
      disposal of all or substantially all
      of
      Neah Power's
      property or business,
      a merger into or consolidation of Neah Power with or into any other corporation
      (other
      than wholly owned subsidiary corporation) or any other transaction or series
      of
      related transactions in which more than fifty percent (50%) of the voting power
      of Neah Power is disposed of.

     

    Your
      base
      salary includes pay for eight recognized holidays; namely, Memorial Day,
      Independence Day, Labor Day, Thanksgiving Day, Day after Thanksgiving, Christmas
      Eve Day, Christmas Day, and New Year's Day. Paid Time Off
      ("PTO"), or combined vacation and sick leave, will accrue at a
      rate of 6.15 hours per pay period, which amount is equal to 160.0 hours of
      PTO
      accrued per year; where only 25% of PTO can be carried over to another year
      and
      then must be used by June 30th
      of
      that
      new year. We would like you to note, however, that upon termination of your
      employment with us, with or without Cause, only 25% of your accrued (but unpaid)
      PTO will be paid to you.

     

    You
      will
      of course be eligible to participate in Neah Power's healthcare plan available
      to employees similarly situated while Neah Power employs you. Neah Power's
      plan
      currently consists of Regence Blue Shield for Medical, Delta Dental, and Vision
      Service Plan for Vision.

     

    By
      signing below you acknowledge that you are not relying on any promises that
      are
      not set out in this offer letter (including the attached stock option agreement)
      and the employee non-disclosure and intellectual property assignment letter
      in
      deciding whether to accept our offer of employment. This letter and the terms
      of
      your employment are governed
      by the internal laws of the State of Washington, without giving effect to the
      principles of conflicts of law thereof. The parties agree that in the even
      of
      any dispute arising between Neah Power and you in connection with this
      employment agreement, such
      disputes shall be finally settled by arbitration to be conducted in the county
      and state
      of the
      principal office of Neah Power at the time of the dispute in accordance with
      the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        

      

    

    22122
      20th
      Ave.
SE,
      Suite
      161

    Bothell,
      WA 98021

    Telephone
      425.424.3324

     

    rules
      of
      the
      American Arbitration Association
      (“AAA”)
applying
      the laws of Washington.
      Disputes
      shall not be
      resolved
      in any other
      form
      or
      venue.

     

    Again,
      we
are
      confident that
      with
      your enthusiasm
      and
      outstanding qualifications you
      will
      not
      only excel at your position, but
      also
will
      also
      significantly contribute to
      the
      realization of
      our
vision.
      If you have any questions whatsoever
      regarding
      any
      terms
      or
conditions
      of
      your
      employment with us, please contact me directly so
      that
      I
      can address them. We
      look
      forward to
      having
you
      become
      a
member
      of
      our
      team,
      and
we
      extend
      our
      best
      wishes for
      your
      success!

     

    Sincerely
      yours,

     

    Paul
      Abramowitz

    President
      and CEO

    Neah
      Power
      Systems, Inc.

     

    I
      hereby
      acknowledge that I have carefully
      read
      this letter
      and
      agree
      to abide
      by
      its
      terms
      and
      conditions in
      consideration
      of
      my
employment
      with Neah Power
      Systems,
      Inc.MDWERKS,
      INC.

    CONVERTIBLE
      NOTE

    

    
      	
               

            	
               

            
	
              Issuance
                Date: August 31, 2007

            	
              Original
                Principal Amount: U.S. $250,000

            

    

    

    FOR
      VALUE
      RECEIVED, MDwerks, Inc., a Delaware corporation (the “Company”),
      hereby
      promises to pay to Vicis Capital Master Fund or its registered assigns
      (“Holder”)
      the
      amount set out above as the Original Principal Amount (as may be reduced
      pursuant to the terms hereof pursuant to redemption, conversion or otherwise,
      the “Principal”)
      when
      due, whether upon the Maturity Date (as defined below), and to pay interest
      (“Interest”)
      on any
      outstanding Principal at a rate per annum equal to the Interest Rate (as defined
      below), from the date set out above as the Issuance Date (the “Issuance
      Date”)
      until
      the same becomes due and payable. 

    

    1. PAYMENTS
      OF PRINCIPAL AND INTEREST; MATURITY; PREPAYMENT.

    

    (a)
      On
      October 1, 2007 (the “Maturity
      Date”),
      the
      Company shall pay to the Holder an amount equal to the Principal plus accrued
      Interest thereon in cash in accordance with Section 8 of this Note.

    

    (b)
      Maker,
      at
      its option, may prepay all or any part of the outstanding principal amount
      of
      this Note and accrued interest thereon through the date of prepayment without
      penalty.

    

    2. INTEREST;
      INTEREST RATE.
      Interest on this Note shall commence accruing on the Issuance Date at the rate
      of 8% per annum and shall be computed on the basis of a 360-day year and actual
      days elapsed and shall be payable in arrears.

    

    3. CONVERSION
      OF NOTE.
      Upon
      the initial closing of the sale of units consisting of (i) one share of Series
      B
      Preferred Stock of the Company (“Series B Preferred Stock”), (ii) an
      accompanying warrant to purchase shares 150 shares of Common Stock of the
      Company at a price of $2.25 per share (a “$2.25 Warrant”) and (iii) an
      accompanying warrant to purchase 100 shares of Common Stock of the Company
      at a
      price of $2.50 per share (a “$2.50 Warrant” and, collectively, with the $2.25
      Warrant and the Series B Preferred Stock, a “Unit”), this Note shall be
      automatically converted into the number of Units determined by dividing the
      amount of Principal outstanding under this Note plus accrued Interest thereon
      by
      the price per Unit at which such Units are sold to Holder. Upon such conversion,
      the Company shall deliver to Holder the securities constituting the Units into
      which this Note is converted and Holder shall surrender this Note to the Company
      for cancellation.

    

    4. RIGHTS
      UPON EVENT OF DEFAULT.

    

    (a) Event
      of Default.
       Each of the following events shall constitute an “Event of
      Default”:

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (i) the
      Company's failure to pay to the Holder any amount of Principal (including,
      without limitation, any redemption or make-whole payments), Interest, or other
      amounts when and as due under this Note;

    

    (ii) the
      Company or any of its Subsidiaries, pursuant to or within the meaning of Title
      11, U.S. Code, or any similar Federal, foreign or state law for the relief
      of
      debtors (collectively, “Bankruptcy
      Law”),
      (A)
      commences a voluntary case, (B) consents to the entry of an order for relief
      against it in an involuntary case, (C) consents to the appointment of a
      receiver, trustee, assignee, liquidator or similar official
      (a
“Custodian”),
      (D)
      makes a general assignment for the benefit of its creditors or (E) admits in
      writing that it is generally unable to pay its debts as they become due;
      or

    

    (iii) a
      court
      of competent jurisdiction enters an order or decree under any Bankruptcy Law
      that (A) is for relief against the Company or any of its Subsidiaries in an
      involuntary case, (B) appoints a Custodian of the Company or any of its
      Subsidiaries or (C) orders the liquidation of the Company or any of its
      Subsidiaries.

    

    (b)
      Upon
      the
      occurrence of an Event of Default, the Holder may, at its option, declare the
      entire amount of principal and accrued interest on this Note immediately due
      and
      payable by written notice delivered to the Maker, in which event the Maker
      shall
      immediately pay to the Holder the entire unpaid principal balance of this Note
      together with accrued interest thereon. In addition to the payment of principal
      and interest on this Note, upon the occurrence of an Event of Default, Maker
      shall reimburse Holder for all of Holder’s costs and expenses, including
      attorney fees and disbursements, incurred by Holder in enforcing the provisions
      of this Note. Upon the occurrence of an Event of Default Interest shall accrue
      at the rate of the lesser of 12% per annum, or the maximum rate of interest
      per
      annum permitted by applicable law. 

    

    5. PAYMENT
      OF COLLECTION, ENFORCEMENT AND OTHER COSTS.
      If (a)
      this Note is placed in the hands of an attorney for collection or enforcement
      or
      is collected or enforced through any legal proceeding or the Holder otherwise
      takes action to collect amounts due under this Note or to enforce the provisions
      of this Note or (b) there occurs any bankruptcy, reorganization, receivership
      of
      the Company or other proceedings affecting Company creditors' rights and
      involving a claim under this Note, then the Company shall pay the reasonable
      costs incurred by the Holder for such collection, enforcement or action or
      in
      connection with such bankruptcy, reorganization, receivership or other
      proceeding, including, but not limited to, attorneys' fees and
      disbursements.

    

    6. CONSTRUCTION;
      HEADINGS.
      The
      headings of this Note are for convenience of reference and shall not form part
      of, or affect the interpretation of, this Note.

    

    7. FAILURE
      OR INDULGENCE NOT WAIVER.
      No
      failure or delay on the part of the Holder in the exercise of any power, right
      or privilege hereunder shall operate as a waiver thereof, nor shall any single
      or partial exercise of any such power, right or privilege preclude other or
      further exercise thereof or of any other right, power or privilege.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    8. NOTICES;
      PAYMENTS.
      

    

    (a)
      All
      notices and other communications made pursuant to the provisions of or in
      connection with this Note shall be in writing and shall be deemed to have been
      duly made when delivered personally or by express mail or courier or when sent
      by facsimile transmission
      with confirmation received:

    

    (i)
      If to
      the Holder, to Vicis Capital Master Fund, c/o Vicis Capital, LLC, 126 E.
      56th
      Street,
      7th
      Floor,
      New York, NY 10022, or to such other address as the Holder may give notice
      of to
      the Maker from time to time; or

    

    (ii)
      If
      to the Maker, 1020 NW 6th Street, Suite I, Deerfield Beach, FL 33442, or to
      such
      other address as the Maker may give notice of to the Holder from time to
      time.

    

    (b)
      Whenever any payment of cash is to be made by the Company to Holder pursuant
      to
      this Note, such payment shall be made in lawful money of the United States
      of
      America by a check drawn on the account of the Company and sent via overnight
      courier service to Holder at such address as previously provided to the Company
      in writing; provided that the Holder may elect to receive a payment of cash
      via
      wire transfer of immediately available funds by providing the Company with
      prior
      written notice setting out such request and the Holder's wire transfer
      instructions.  Whenever any amount expressed to be due by the terms of this
      Note is due on any day which is not a Business Day, the same shall instead
      be
      due on the next succeeding day which is a Business Day and, in the case of
      any
      Interest Date which is not the date on which
      this
      Note is paid in full, the extension of the due date thereof shall not be taken
      into account for purposes of determining the amount of Interest due on such
      date.  

    

    9. CANCELLATION.
      After
      all Principal, accrued Interest and other amounts at any time owed on this
      Note
      has been paid in full, or this note is converted pursuant to Section 3 of this
      Note, this Note shall automatically be deemed canceled, shall be surrendered
      to
      the Company for cancellation and shall not be reissued.

    

    10. WAIVER
      OF NOTICE.
      To the
      extent permitted by law, the Company hereby waives demand, notice, protest
      and
      all other demands and notices in connection with the delivery, acceptance,
      performance, default or enforcement of this Note.

    

    11. GOVERNING
      LAW.
      This
      Note shall be construed and enforced in accordance with, and all questions
      concerning the construction, validity, interpretation and performance of this
      Note shall be governed by, the internal laws of the State of Florida, without
      giving effect to any choice of law or conflict of law provision or rule (whether
      of the State of Florida or any other jurisdictions) that would cause the
      application of the laws of any jurisdictions other than the State of Florida.
        In the event that any provision of this Note is invalid or unenforceable
      under any applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform with such statute or rule of law. Any such provision which
      may prove invalid or unenforceable under any law shall not affect the validity
      or enforceability of any other provision of this Note. 

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    12. SUBORDINATION.
      The
      obligations of the Company under this Note are expressly subordinated to the
      obligations of the Company and its Subsidiaries in connection with (i) that
      certain promissory note, dated October 19, 2006, issued by the Company to
      Gottbetter Capital Master, Limited (“Gottbetter”) in the original principal
      amount of $2,500,000 and (ii) that certain promissory note, dated November
      9,
      2006, issued by the Company to Gottbetter in the original principal amount of
      $2,500,000 (the indebtedness evidenced by each of such notes is hereinafter
      referred to as “Permitted Senior Indebtedness”). By acceptance of this note,
      Holder agrees that it shall promptly execute and deliver (i) such agreements,
      documents and instruments as may be reasonably requested by holders of Permitted
      Senior Indebtedness, expressly confirming the subordination of the Company’s
      obligations under this Note to those of the holders of Permitted Senior
      Indebtedness and (ii) such intercreditor agreements as may be reasonably
      requested by holders of Permitted Senior Indebtedness relating to customary
      intercreditor arrangements including, but not limited to, standstill agreements
      and the right to cure defaults under this Note.

    

    

    IN
      WITNESS WHEREOF, the Company has caused this Note to be duly executed as of
      the
      Issuance Date set out above.

    

    
      	 	 	 
	 	
              
                MDWERKS,
                  INC.

              

            
	 
 	 
 	 
 
	 	By:  	/s/ Howard B. Katz
	 	
              

              Name: Howard
                Katz

            
	 	
              Title: Chief
                Executive Officer

            

    

    
 

    
      
        
        

      

      
        8

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