Exhibit 10.20
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND IS TRANSFERABLE ONLY UPON THE CONDITIONS SPECIFIED HEREIN.
PROMISSORY NOTE
$50,000.00 March 28, 2006
- ---------- ----------------
FOR VALUE RECEIVED, the undersigned, Pediatric Prosthetics, Inc. ("Maker"),
hereby promises to pay to the order of PETER KERTES AND RENEE KERTES JOINT AND
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SEVERALLY ("Payee"), at 16400 NE 31 AVE, N MIAMI BEACH, FL, the principal sum of
- --------- ----------------------------------
FIFTY THOUSAND and no/100 Dollars ($50,000.00), in lawful money in United States
- -------------- ---------
of America, which shall be legal tender, in payment of all debts and dues,
public and private, at the time of payment, bearing interest and payable as
provided herein.
Interest on the unpaid balance of this Note shall accrue at a rate per
annum equal to 12%; provided, however, that such interest shall not exceed the
Maximum Rate as hereinafter defined. All past-due principal and interest shall
bear interest at the maximum rate permitted by applicable law. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The principal amount and accrued interest of this Note shall be due and
payable on September 29, 2006. The Note may be renewed for additional thirty day
periods at the option of the holder. INTEREST PAYMENTS WILL BE MADE QUARTERLY.
-----------------------------------------
This Note may be prepaid in whole or in part, at any time and from time to
time, without premium or penalty.
If any payment of principal or interest on this Note shall become due on a
Saturday, Sunday or any other day on which national banks are not open for
business, such payment shall be made on the next succeeding business day.
This Note shall be binding upon and inure to the benefit of the Payee named
herein and Payee's respective successors and assigns. Each holder of this Note,
by accepting the same, agrees to and shall be bound by all of the provisions of
this Note. Payee may assign this Note or any of its rights, interests or
obligations to this Note without the prior written approval of Maker.
The indebtedness evidenced by this Note is unsecured and subordinate and
junior in right of payment to the prior payment in full of all senior
indebtedness (however defined in any debt instrument).
No provision of this Note shall alter or impair the obligation of Maker to
pay the principal of and interest on this Note at the times, places and rates,
and in the coin or currency, herein prescribed.
Notwithstanding anything to the contrary in this Note or any other
agreement entered into in connection herewith, whether now existing or hereafter
arising and whether written or oral, it is agreed that the aggregate of all
interest and any other charges constituting interest, or adjudicated as
constituting interest, and contracted for, chargeable or receivable under this
Note or otherwise in connection with this loan transaction, shall under no
circumstances exceed the Maximum Rate. In the event the maturity of this Note is
accelerated by reason of an Event of Default under this Note, other agreement
entered into in connection herewith or therewith, by voluntary prepayment by
Maker or otherwise, then earned interest may never include more than the Maximum
Rate, computed from the dates of each advance of the loan proceeds outstanding
until payment. If from any circumstance any holder of this Note shall ever
receive interest or any other charges constituting interest, or adjudicated as
constituting interest, the amount, if any, which would exceed the Maximum Rate
shall be applied to the reduction of the principal amount owing on this Note,
and not to the payment of interest; or if such excessive interest exceeds the
unpaid balance of principal hereof, the amount of such excessive interest that
exceeds the unpaid balance of principal hereof shall be refunded to Maker. In
determining whether or not the interest paid or payable exceeds the Maximum
Rate, to the extent permitted by applicable law (i) any nonprincipal payment
shall be characterized as an expense, fee or premium rather than as interest;
and (ii) all interest at any time contracted for, charged, received or preserved
in connection herewith shall be amortized, prorated, allocated and spread in
equal parts during the period of the full stated term of this Note. The term
"Maximum Rate" shall mean the maximum rate of interest allowed by applicable
federal or state law.
Except as provided herein, Maker and any sureties, guarantors and endorsers
of this Note jointly and severally waive demand, presentment, notice of
nonpayment or dishonor, notice of intent to accelerate, notice of acceleration,
diligence in collecting, grace, notice and protest, and consent to all
extensions without notice for any period or periods of time and partial
payments, before or after maturity, without prejudice to the holder. The holder
shall similarly have the right to deal in any way, at any time, with one or more
of the foregoing parties without notice to any other party, and to grant any
such party any extensions of time for payment of any of said indebtedness, or to
grant any other indulgences or forbearance whatsoever, without notice to any
other party and without in any way affecting the personal liability of any party
hereunder. If any efforts are made to collect or enforce this Note or any
installment due hereunder, the undersigned agrees to pay all collection costs
and fees, including reasonable attorney's fees.
This Note shall be construed and enforced under and in accordance with the
laws of the State of Texas.
IN WITNESS WHEREOF, Maker has duly executed this Note as of the day and
year first above written.
PEDIATRIC PROSTHETICS, INC.
By:/s/ Kenneth W. Bean
----------------------------
Its:VICE PRESIDENT OPERATIONS
---------------------------
Printed Name:KENNETH W. BEAN
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Pediatric Prosthetics, Inc.
March 28, 2006
Mr. Peter Kertes, and Renee Kertes
16400 NE 31 Avenue
North Miami Beach, FL 33160
dear sir:
Please accept this letter as a commitment from Pediatric Prosthetics Inc., to
repay your group's loan of $50,000 to Pediatric Prosthetics Inc.(The Company),
by means of a conversion to restricted common shares of the company's stock. The
conversion rate is to be $.035 (three and one/half cents') per restricted common
share.
The conversion to restricted stock, shall be executed immediately after clearing
comments and acceptance of our 10SB by the SEC.
The conversion of $50,000 will require delivery to you of 1,428,571 shares of
restricted common stock, (one million four hundred twenty eight thousand five
hundred and seventy one shares).
As soon as you receive notice of the Company's desire to convert the debt to
equity, we will mutually agree upon the terms of the warrants that will be
issued to your group simultaneously with the conversion. We agree to that the
Company will in addition issue 1,428,571 warrants to your group, convertible at
your discretion into l,428,571 restricted shares of common stock no later than
24 months after issuance, at the price of $.045 (four and one/half cents) per
share.
We will move to begin our SB2 registration immediately upon successfully
concluding acceptance of our SB 10
Best regards
/s/ Kenneth W. Bean
- ------------------------
Kenneth W. Bean
VP Operations
Director
12926 Willowchase * Houston, TX 77070 * Phone: 281-897-11O8
Toll Free: 1-866-582-0966
PEDIATRIC PROSTHETICS, INC.
WARRANT AGREEMENT
-----------------
Date: February 6, 2007
To Whom It May Concern:
PEDIATRIC PROSTHETICS, INC. (the "Company"), for value received, hereby agrees
to issue common stock purchase warrants entitling PETER AND RENEE KERTES
("Holder") and their assigns to purchase an aggregate of 1,428,571 shares of the
Company's common stock ("Common Stock"). Such warrant is evidenced by a warrant
certificate in the form attached hereto as Schedule 1 (such instrument being
hereinafter referred to as a "Warrant," and such Warrant and all instruments
hereafter issued in replacement, substitution, combination or subdivision
thereof being hereinafter collectively referred to as the "Warrant"). The
Warrant is issued to Holder in connection with Holder's loan to the Company of
$50,000. The number of shares of Common Stock purchasable upon exercise of the
Warrant is subject to adjustment as provided in Section 5 below. The Warrant
will be exercisable by the Warrant Holder (as defined below) as to all or any
lesser number of shares of Common Stock covered thereby, at an initial purchase
price of US $0.045 per share (the "Purchase Price"), subject to adjustment as
provided in Section 5 below, for the exercise period defined in Section 3(a)
below. The term "Warrant Holder" refers to the person whose name appears on the
signature page of this agreement and any transferee or transferees of any of
them permitted by Section 2(a) below. This Warrant evidences the original grant
of the Warrant to the Holder pursuant to a letter agreement to the Holder dated
March 28, 2006, and as such, the "Effective Date" of this Warrant is March 28,
2006.
1. REPRESENTATIONS AND WARRANTIES.
--------------------------------
The Company represents and warrants to you as follows:
(a) CORPORATE AND OTHER ACTION. The Company has all requisite
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power and authority (corporate and other), and has taken all
necessary corporate action, to authorize, execute, deliver and
perform this Warrant Agreement, to execute, issue, sell and
deliver the Warrant and a certificate or certificates evidencing
the Warrant, to authorize and reserve for issue and, upon payment
from time to time of the Purchase Price, to issue, sell and
deliver, the shares of the Common Stock issuable upon exercise of
the Warrant ("Shares"), and to perform all of its obligations
under this Warrant Agreement and the Warrant. The Shares, when
issued in accordance with this Warrant Agreement, will be duly
authorized and validly issued and outstanding, fully paid and
nonassessable and free of all liens, claims, encumbrances and
preemptive rights. This Warrant Agreement and, when issued, each
Warrant issued pursuant hereto, has been or will be duly executed
and delivered by the Company and is or will be a legal, valid and
binding agreement of the Company, enforceable in accordance with
its terms. No authorization, approval, consent or other order of
any governmental entity, regulatory authority or other third
party is required for such authorization, execution, delivery,
performance, issue or sale.
(b) NO VIOLATION. The execution and delivery of this Warrant
------------
Agreement, the consummation of the transactions herein
contemplated and the compliance with the terms and provisions of
this Warrant Agreement and of the Warrant will not conflict with,
or result in a breach of, or constitute a default or an event
permitting acceleration under, any statute, the Articles of
Incorporation or Bylaws of the Company or any indenture,
mortgage, deed of trust, note, bank loan, credit agreement,
franchise, license, lease, permit, or any other agreement,
understanding, instrument, judgment, decree, order, statute, rule
or regulation to which the Company is a party or by which it is
bound.
2. TRANSFER.
--------
(a) TRANSFERABILITY OF WARRANT. You agree that the Warrant is
----------------------------
being acquired as an investment and not with a view to
distribution thereof and that the Warrant may not be transferred,
sold, assigned or hypothecated except as provided herein. You
further acknowledge that the Warrant may not be transferred,
sold, assigned or hypothecated unless pursuant to a registration
statement that has become effective under the Securities Act of
1933, as amended (the "Act"), setting forth the terms of such
offering and other pertinent data with respect thereto, or unless
you have provided the Company with an acceptable opinion from
acceptable counsel that such registration is not required.
Certificates representing the Warrant shall bear an appropriate
legend. Notwithstanding the foregoing, any request to transfer
the Warrant must be accompanied by the Form of Assignment and
Transfer attached hereto as Schedule 2 executed by the Warrant
Holder.
(b) REGISTRATION OF SHARES. You agree not to make any sale or
------------------------
other disposition of the Shares except pursuant to a registration
statement which has become effective under the Act, setting forth
the terms of such offering, the underwriting discount and
commissions and any other pertinent data with respect thereto,
unless you have provided the Company with an acceptable opinion
of counsel acceptable to the Company that such registration is
not required. Certificates representing the Shares, which are not
registered as provided in this Section 2, shall bear an
appropriate legend and be subject to a "stop-transfer" order.
3. EXERCISE OF WARRANT, PARTIAL EXERCISE.
-----------------------------------------
(a) EXERCISE PERIOD. The Warrants granted to Holder in this
----------------
Warrant shall expire and all rights hereunder shall be
extinguished on May 22, 2008.
(b) EXERCISE IN FULL. Subject to Section 3(a), a Warrant may be
------------------
exercised in full by the Warrant Holder by surrender of the
Warrant, with the Form of Subscription attached hereto as
Schedule 3 executed by such Warrant Holder, to the Company,
accompanied by payment as determined by 3(d) below, in the amount
obtained by multiplying the number of Shares represented by the
respective Warrant by the Purchase Price per share (after giving
effect to any adjustments as provided in Section 5 below).
(c) PARTIAL EXERCISE. Subject to Section 3(a), each Warrant may
-----------------
be exercised in part by the Warrant Holder by surrender of the
Warrant, with the Form of Subscription attached hereto as
Schedule 3 at the end thereof duly executed by such Warrant
Holder, in the manner and at the place provided in Section 3(b)
above, accompanied by payment as determined by 3(d) below, in
amount obtained by multiplying the number of Shares designated by
the Warrant Holder in the Form of Subscription attached hereto as
Schedule 3 to the Warrant by the Purchase Price per share (after
giving effect to any adjustments as provided in Section 5 below).
Upon any such partial exercise, the Company at its expense will
forthwith issue and deliver to or upon the order of the Warrant
Holder a new Warrant of like tenor, in the name of the Warrant
Holder subject to Section 2(a), calling in the aggregate for the
purchase of the number of Shares equal to the number of such
Shares called for on the face of the respective Warrant (after
giving effect to any adjustment herein as provided in Section 5
below) minus the number of such Shares designated by the Warrant
Holder in the aforementioned form of subscription.
(d) PAYMENT OF PURCHASE PRICE. The Purchase Price may be made by
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any of the following or a combination thereof, at the election of
the Warrant Holder:
(i) in cash;
(ii) by wire transfer; or
(iii) by certified or cashier's check, or money order.
4. DELIVERY OF STOCK CERTIFICATES ON EXERCISE.
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Any exercise of the Warrant pursuant to Section 3 shall be deemed
to have been effected immediately prior to the close of business on
the date on which the Warrant together with the Form of Subscription
and the payment for the aggregate Purchase Price shall have been
received by the Company. At such time, the person or persons in whose
name or names any certificate or certificates representing the Shares
or Other Securities (as defined below) shall be issuable upon such
exercise shall be deemed to have become the holder or holders of
record of the Shares or Other Securities so purchased. As soon as
practicable after the exercise of any Warrant in full or in part, and
in any event within Ten (10) business days thereafter, the Company at
its expense (including the payment by it of any applicable issue
taxes) will cause to be issued in the name of, and delivered to the
purchasing Warrant Holder, a certificate or certificates representing
the number of fully paid and nonassessable shares of Common Stock or
Other Securities to which such Warrant Holder shall be entitled upon
such exercise, plus in lieu of any fractional share to which such
Warrant Holder would otherwise be entitled, cash in an amount
determined pursuant to Section 6(e). The term "Other Securities"
refers to any stock (other than Common Stock), other securities or
assets (including cash) of the Company or any other person (corporate
or otherwise) which the Warrant Holder at any time shall be entitled
to receive, or shall have received, upon the exercise of the Warrant,
in lieu of or in addition to Common Stock, or which at any time shall
be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 5
below or otherwise.
5. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES PURCHASABLE.
---------------------------------------------------------------------
The Purchase Price and the number of Shares are subject to
adjustment from time to time as set forth in this Section 5.
(a) In case the Company shall at any time after the date of this
Warrant Agreement (i) declare a dividend on the Common Stock in
shares of its capital stock, (ii) subdivide the outstanding
Common Stock, (iii) combine the outstanding Common Stock into a
smaller number of Common Stock, or (iv) issue any shares of its
capital stock by reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), then
in each case the Purchase Price, and the number and kind of
Shares receivable upon exercise, in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination, or reclassification shall be
proportionately adjusted so that the holder of any Warrant
exercised after such time shall be entitled to receive the
aggregate number and kind of Shares which, if such Warrant had
been exercised immediately prior to such record date, he would
have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination, or
reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur.
(b) No adjustment in the Purchase Price shall be required if
such adjustment is less than US $0.01; provided, however, that
any adjustments which by reason of this subsection (b) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this
Section 5 shall be made to the nearest cent or to the nearest
one-thousandth of a share, as the case may be.
(c) Upon each adjustment of the Purchase Price as a result of
the calculations made in subsection (a) of this Section 5, the
Warrant outstanding prior to the making of the adjustment in the
Purchase Price shall thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of Shares (calculated
to the nearest thousandth) obtained by (i) multiplying the number
of Shares purchasable upon exercise of the Warrant immediately
prior to adjustment of the number of Shares by the Purchase Price
in effect prior to adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
6. FURTHER COVENANTS OF THE COMPANY.
------------------------------------
(a) DILUTION OR IMPAIRMENTS. The Company will not, by amendment
-------------------------
of its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger or
dissolution, avoid or seek to avoid the observance or performance
of any of the terms of the Warrant or of this Warrant Agreement,
but will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the
Warrant Holder against dilution or other impairment. Without
limiting the generality of the foregoing, the Company:
(i) shall at all times reserve and keep available, solely
for issuance and delivery upon the exercise of the Warrant,
all shares of Common Stock (or Other Securities) from time
to time issuable upon the exercise of the Warrant and shall
take all necessary actions to ensure that the par value per
share, if any, of the Common Stock (or Other Securities) is
at all times equal to or less than the then effective
Purchase Price per share; and
(ii) will take all such action as may be necessary or
appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common
Stock or Other Securities upon the exercise of the Warrant
from time to time outstanding.
(b) TITLE TO STOCK. All Shares delivered upon the exercise of
---------------
the Warrant shall be validly issued, fully paid and
nonassessable; each Warrant Holder shall, upon such delivery,
receive good and marketable title to the Shares, free and clear
of all voting and other trust arrangements, liens, encumbrances,
equities and claims whatsoever; and the Company shall have paid
all taxes, if any, in respect of the issuance thereof.
(c) EXCHANGE OF WARRANT. Subject to Section 2(a) hereof, upon
---------------------
surrender for exchange of any Warrant to the Company, the Company
at its expense will promptly issue and deliver to or upon the
order of the holder thereof a new Warrant or like tenor, in the
name of such holder or as such holder (upon payment by such
Warrant holder of any applicable transfer taxes) may direct,
calling in the aggregate for the purchase of the number of Shares
called for on the face of the Warrant surrendered. The Warrant
and all rights thereunder are transferable in whole or in part
upon the books of the Company by the registered holder thereof,
subject to the provisions of Section 2(a), in person or by duly
authorized attorney, upon surrender of the Warrant, duly
endorsed, at the principal office of the Company.
(d) REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
------------------------
satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss,
theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in
the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Company, at the expense of the Warrant
Holder, will execute and deliver, in lieu thereof, a new Warrant
of like tenor.
(e) FRACTIONAL SHARES. No fractional Shares are to be issued
------------------
upon the exercise of any Warrant, but the Company shall round any
fraction of a share to the nearest whole Share.
7. OTHER WARRANT HOLDERS: HOLDERS OF SHARES.
---------------------------------------------
The Warrant is issued upon the following terms, to all of which
each Warrant Holder by the taking thereof consents and agrees: (a) any
person who shall become a transferee, within the limitations on
transfer imposed by Section 2(a) hereof, of a Warrant properly
endorsed shall take such Warrant subject to the provisions of Section
2(a) hereof and thereupon shall be authorized to represent himself,
herself or itself as absolute owner thereof and, subject to the
restrictions contained in this Warrant Agreement, shall be empowered
to transfer absolute title by endorsement and delivery thereof to a
permitted bona fide purchaser for value; (b) any person who shall
become a holder or owner of Shares shall take such shares subject to
the provisions of Section 2(b) hereof; (c) each prior taker or owner
waives and renounces all of his equities or rights in such Warrant in
favor of each such permitted bona fide purchaser, and each such
permitted bona fide purchaser shall acquire absolute title thereto and
to all rights presented thereby; and (d) until such time as the
respective Warrant is transferred on the books of the Company, the
Company may treat the registered holder thereof as the absolute owner
thereof for all purposes, notwithstanding any notice to the contrary.
8. MISCELLANEOUS.
-------------
All notices, certificates and other communications from or at the
request of the Company to any Warrant Holder shall be mailed by first
class, registered or certified mail, postage prepaid, to such address
as may have been furnished to the Company in writing by such Warrant
Holder, or, until an address is so furnished, to the address of the
last holder of such Warrant who has so furnished an address to the
Company, except as otherwise provided herein. This Warrant Agreement
and any of the terms hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or
termination is sought. This Warrant Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of
Texas. The headings in this Warrant Agreement are for purposes of
reference only and shall not limit or otherwise affect any of the
terms hereof. This Warrant Agreement, together with the forms of
instruments annexed hereto as schedules, constitutes the full and
complete agreement of the parties hereto with respect to the subject
matter hereof. For purposes of this Warrant Agreement, a faxed
signature shall constitute an original signature.
IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to be executed
on this 18th day of December 2006, in Houston, Texas, by its proper corporate
officers, thereunto duly authorized.
PEDIATRIC PROSTHETICS, INC.
-----------------------------
By: /s/ Kenneth W. Bean
---------------------------
Kenneth W. Bean,
Vice President
SCHEDULE 1
WARRANT
-------
THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER: (A) THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), IN
RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN SECTIONS 3 AND 4 OF
SUCH ACT AND REGULATION S PROMULGATED THEREUNDER; OR (B) ANY STATE SECURITIES
LAWS IN RELIANCE UPON APPLICABLE EXEMPTIONS THEREUNDER. THIS WARRANT MAY NOT BE
EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON UNLESS REGISTERED UNDER THE ACT OR
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THIS WARRANT MUST BE ACQUIRED
FOR INVESTMENT ONLY FOR THE ACCOUNT OF THE INVESTOR, AND NEITHER THE WARRANT NOR
THE UNDERLYING STOCK MAY BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE PROVISIONS
OF REGULATION S AND OTHER LAWS OR PURSUANT TO REGISTRATION UNDER THE ACT OR AN
AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS INVOLVING THIS
WARRANT OR THE SECURITIES TO BE ISSUED UPON ITS EXERCISE MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE ACT.
To Purchase 1,428,571 Shares
of Common Stock
PEDIATRIC PROSTHETICS, INC.
This certifies that, for value received, the hereafter named registered owner is
entitled, subject to the terms and conditions of this Warrant, until the
expiration date, to purchase the number of shares (the "Shares") set forth above
of the common stock ("Common Stock"), of PEDIATRIC PROSTHETICS, INC. (the
"Company") from the Company at the purchase price per share hereafter set forth
below, on delivery of this Warrant to the Company with the exercise form duly
executed and payment of the purchase price (in cash or by certified or bank
cashier's check payable to the order of the Company) for each Share purchased.
This Warrant is subject to the terms of the Warrant Agreement between the
parties thereto dated as of December 18, 2006, with an Effective Date of March
28, 2006, the terms of which are hereby incorporated herein. Reference is
hereby made to such Warrant Agreement for a further statement of the rights of
the holder of this Warrant, including, but not limited to the expiration dates
of this Warrant as described in Section 3 of the Warrant Agreement.
Registered Owner: Peter and Renee Kertes Date: February 6, 2007
------------------------- -------------------
Purchase Price
Per Share: US $0.045
Expiration Date: Subject to Section 3(a) of the Warrant Agreement, May 22,
2008, 5:00 p.m. Central Standard Time.
WITNESS the signature of the Company's authorized officer:
PEDIATRIC PROSTHETICS, INC.
-----------------------------
By: /s/ Kenneth W. Bean
-----------------------------------
Kenneth W. Bean, Vice President
SCHEDULE 2
FORM OF ASSIGNMENT AND TRANSFER
-------------------------------
For value received, the undersigned hereby sells, assigns and transfers unto
__________________________________ the right represented by the enclosed Warrant
to purchase _________________ shares of Common Stock of PEDIATRIC PROSTHETICS,
INC. to which the enclosed Warrant relates, and appoints Attorney to transfer
such right on the books of PEDIATRIC PROSTHETICS, INC. with full power of
substitution in the premises.
The undersigned represents and warrants that the transfer of the enclosed
Warrant is permitted by the terms of the Warrant Agreement pursuant to which the
enclosed Warrant has been issued, and the transferee hereof, by his, her or its
acceptance of this Agreement, represents and warrants that he, she or it is
familiar with the terms of said Warrant Agreement and agrees to be bound by the
terms thereof with the same force and effect as if a signatory thereto.
Dated:
------------
-------------------------------------------------------
(Signature must conform in all respects to name of
holder as specified on the face of the enclosed
Warrant)
-------------------------------------------------------
(Address)
Signed in the presence of:
- -----------------------------------------
SCHEDULE 3
FORM OF SUBSCRIPTION
--------------------
(To be signed only upon exercise of Warrant)
To PEDIATRIC PROSTHETICS, INC.:
The undersigned, the holder of the enclosed Warrant, hereby irrevocably elects
to exercise the purchase right represented by such Warrant for, and to purchase
thereunder, * shares of Common Stock of PEDIATRIC PROSTHETICS,
INC. and herewith makes payment of US $_______________ therefore, and requests
that the certificate or certificates for such shares be issued in the name of
and delivered to the undersigned.
The undersigned hereby certifies that the undersigned is not a U.S. person and
the warrant is not being exercised on behalf of a U.S. person, or, if
applicable, the undersigned has attached an opinion of counsel to the effect
that the warrant and the securities to be delivered upon exercise thereof have
been registered under the Securities Act of 1933, as amended or are exempt from
registration thereunder.
Dated:
---------------
--------------------------------------------------
(Signature must conform in all respects to
name of holder as specified on the face of the
enclosed Warrant)
--------------------------------------------------
(Address)
- --------------------------------
(*) Insert here the number of shares called for on the face of the Warrant or,
in the case of a partial exercise, the portion thereof as to which the
Warrant is being exercised, in either case without making any adjustment
for additional Common Stock or any other stock or other securities or
property which, pursuant to the adjustment provisions of the Warrant
Agreement pursuant to which the Warrant was granted, may be delivered upon
exercise.