WAIVER AND AMENDMENT TO SECURITIES PURCHASE AGREEMENT AND DEBENTURE
EXHIBIT
99.6
WAIVER
AND AMENDMENT
THIS
WAIVER AND AMENDMENT, dated
as
of October 24, 2006 (the “Waiver”),
to
the Securities Purchase Agreement, dated as of December 28, 2005, as amended
(the “Purchase
Agreement”),
and
the 6% Secured Convertible Debenture due December 28, 2008 (the “Debenture”)
is by
and among Arkados Group, Inc. (formerly XXXXXX.XXX, Inc.), a Delaware
corporation (the “Company”),
and
the purchasers signatory hereto (each such purchaser, a “Purchaser”
and,
collectively, the “Purchasers”).
Capitalized
terms used and not otherwise defined herein that are defined in the Purchase
Agreement shall have the meanings given such terms in the Purchase
Agreement.
RECITALS
The
Company and certain purchasers are entering into an Second Additional Issuance
Agreement, dated as of October 24, 2006 (the “Additional
Issuance Agreement”),
for
the purchase by the New Purchasers of an aggregate of $500,000 of the New
Debentures and New Warrants (as such terms are defined in the Second Additional
Issuance Agreement) pursuant to the Securities Purchase Agreement, dated as
of
June 30, 2006, between the Company and the New Purchasers.
Subject
to the terms and conditions of this Waiver, the Company has requested, and
the
Purchasers have agreed, to waive compliance with Sections 4.13 and 4.14 of
the
Purchase Agreement and Sections 7(a), 7(b) and 7(e) of the Debenture;
and
Subject
to the terms and conditions of this Waiver, the Company has requested, and
the
Purchasers have agreed, to amend the definition of Exempt Issuance contained
in
Section 1.1 of the Purchase Agreement.
Subject
to the terms and conditions of this Waiver, the Company has requested, and
the
Purchasers have agreed, to acknowledge that the New Underlying Shares (as such
term is defined in the Additional Issuance Agreement) shall be included on
the
Registration Statement registering the Debentures and Warrants of the
Purchasers.
Accordingly,
in consideration of the premises and of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1.
Waivers.
(a) Each
Purchaser hereby waives compliance by the Company with the obligations imposed
by Section 4.13 of the Purchase Agreement regarding such Purchaser’s right to
participate in the purchase of the New Debentures, as well as any advance made
to the Company prior to the Closing that is either repaid from the proceeds
or
is given as full or partial consideration by the New Purchasers under the
Additional Issuance Agreement.
(b) Each
Purchaser hereby waives the Company’s compliance with the restrictions imposed
by Section 4.14 of the Purchase Agreement with respect to the issuance of the
New Debentures and New Warrants under the Additional Issuance Agreement and
each
Purchaser acknowledges that such issuance will not constitute a transaction
which results in an adjustment of the respective conversion or exercise prices
of the Debentures or Warrants.
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(d) Each
Purchaser hereby waives the Company’s compliance with the negative covenants
imposed by Sections 7(a), 7(b) and 7(e) of the Debenture regarding the Company’s
agreement not to create indebtedness and liens and to enter into agreements
with
respect thereto.
2. Amendment. The
Purchasers and the Company hereby agree to amend the definition of “Exempt
Issuance” set forth in Section 1.1 of the Purchase Agreement by inserting at the
end of such definition, after the words and numbers “by February 8, 2007” as
follows:
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“or
(h) 300,000 options with an exercise price of $0.85 per share and
a 5 year
term issued to Xxxxx Xxxxxxxx, a key consultant, pursuant to an option
plan adopted by a majority of the non-employee members of the Board
of
Directors, which options shall vest on the six month anniversary
of the
date of grant.”
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3.
Acknowledgement.
Each
Purchaser hereby acknowledges and agrees that, for purposes of Section 6(b)
of
the Registration Rights Agreement, dated as of December 28, 2005, between the
Company and the Purchasers signatory thereto (the “Registration
Rights Agreement”),
the
shares of Common Stock underlying the New Debentures and New Warrants shall
be
deemed Registrable Securities which may be included as securities in the
Company’s initial Registration Statement, on the same terms as the Purchasers’
Registrable Securities.
4. Miscellaneous.
THIS
WAIVER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS.
This
Waiver shall constitute a Transaction Document.
Except
as
expressly waived and/or amended hereby, the Purchase Agreement and the
Debentures shall remain in full force and effect in accordance with the terms
thereof. This Waiver is limited specifically to the matters set forth above
and
does not constitute directly or by implication an amendment or waiver of any
other provisions of the Purchase Agreement or Debentures or of any Event of
Default or default which may occur or may have occurred under the Purchase
Agreement or Debentures.
This
Waiver may be executed in one or more counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute
but one Waiver.
[SIGNATURE
PAGE FOLLOWS]
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BUSHIDO
CAPITAL MASTER FUND, L.P.
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By: Bushido
Capital Partners, Ltd., its General Partner
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By:
/s/
Xxxx Xxxxxxx
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By:
/s/
Xxxxx
Xxxxxx
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Xxxx
Xxxxxxx
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Xxxxx
Xxxxxx
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Chief
Financial Officer
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President
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GAMMA
OPPORTUNITY CAPITAL PARTNERS, LP CLASS A
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GAMMA
OPPORTUNITY CAPITAL PARTNERS, LP CLASS C
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By:
/s/
Xxxxxxxx X. Xxxxxx
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By:/s/
Xxxxxxxx X. Xxxxxx
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Xxxxxxxx
X. Xxxxxx
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Xxxxxxxx
X. Xxxxxx
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President
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President
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CARGO
HOLDINGS LLC
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By:
/s/
Xxxxx Xxxxxxxx
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Xxxxx
Xxxxxxxx
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Member
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By:
/s/
Gennaro Vendome
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Gennaro
Vendome
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Member
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