WAIVER AND AMENDMENT TO SECURITIES PURCHASE AGREEMENT AND DEBENTURE
EXHIBIT
99.21
WAIVER
AND AMENDMENT
THIS
WAIVER AND AMENDMENT, dated as of date executed by the Company (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, Xxxxxxx Xxxxxxxx Family Limited Partnership (“Typaldos LP”),
Xxxxxxx Xxxxxxxx, individually (“Typaldos”), Xxxxxxx X. Xxxxxx
(“Xxxxxx”), Xxxxxxx Vendome (“Vendome” and, together with Typaldos
LP, Typaldos and Xxxxxx, the “New Purchasers”), Bushido Capital Master
Fund, LP (“Bushido”), Xxxxxx Diversified Strategy Master Fund, LLC –
Series BUS (“Xxxxxx”), Xxxxxxxxx Xxxxxxxx, individually (“K
Typaldos”), Xxxxxxx X. Xxxxxx (“Xxxxxx”), Xxxx X. Xxxxxxxxx
(“Xxxxxxxxx”) and Crucian Transition, Inc. (“Crucian”)
are entering into a Tenth Additional Issuance Agreement, (the “Additional
Issuance Agreement”), for the purchase by the New Purchasers of an aggregate
of $905,000 of the New Debentures and 851,765 New Warrants (as such terms are
defined in the Tenth Additional Issuance Agreement) pursuant to the Purchase
Agreement, 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.
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 and Amendment.
(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. This Waiver shall not
effect the rights set forth in Section 4.13 with respect to future financing
after the issuance of the Additional Debentures and related
Warrants.
(b) Each
Purchaser hereby waives the Company’s compliance with the restrictions imposed
by Section 4.14 of the Purchase Agreement with respect to (i) the issuance
of
the New Debentures and
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New
Warrants under this Additional Issuance Agreement, and acknowledges that
issuances of additional New Debentures and New Warrants will not constitute
transactions which result in an adjustment of the respective conversion or
exercise prices of the Debentures or
Warrants. Notwithstanding the foregoing, this Waiver shall
not have any effect and the Company expressly acknowledges that its proposed
issuance of shares of common stock, warrants and any future issuances of
securities shall continue to be subject to the anti-dilution provisions of
the
Debentures and Warrants.
(c) The
“Termination Date” of all common stock purchase warrants held by each Holder
(whether Short Term, Long Term or otherwise) (collectively, the
“Warrants”) shall be extended to the later of the date set forth therein as the
“Termination Date” and December 28, 2012 and the Warrants shall be exercisable
immediately. Additionally, the Warrants are hereby amended such that
they are exercisable via the “cashless exercise” provisions of Section 2(c) at
any time notwithstanding whether or not there then exists and effective
registration statement. As a result of the forgoing, the Short and
Long Term warrants are hereafter identical and represent a single class of
securities and the Company acknowledges that, for purposes of Rule 144, the
date
that the holding period begins to run for Warrant Shares is the date that such
securities were purchased by the Holder.
(d) Any
holder may request from the Company, and the Company shall deliver to the Holder
within 5 Trading Days, an amended and restated Debenture or Warrant reflecting
the terms of this Amendment.
2. Acknowledgement
and Amendment. Each Purchaser hereby acknowledges and agrees
that:
(a) 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,
as
amended (the “Registration Rights Agreement”), the shares of Common Stock
underlying the New Debenture 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; and
(b) The
Inter-Creditor and Waiver Agreement, dated as of June 30, 2006, is hereby
amended so that the term “New Creditors” includes each Purchaser that is
signatory to the Tenths Additional Issuance Agreement and the term “New
Debentures” (as defined in the Inter-Creditor and Waiver Agreement) includes the
Debentures held by such signatories.
3. 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
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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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SIGNATURE
PAGE TO WAIVER AND AMENDMENT
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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/
Xxxxxxx
Xxxx-Xxxxx
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By:
_________________________
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Xxxxxxx
Xxxx-Xxxxx
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Xxxxxx X. Xxxxx
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Chief
Financial Officer
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Partner
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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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