AMENDMENT AGREEMENT
EXHIBIT
99.1
THIS AMENDMENT AGREEMENT (this “Amendment”) is
entered into as of April 2, 2008 by and among Arkados Group, Inc. (formerly
XXXXXX.XXX, Inc., a Delaware corporation the “Company”) and each of
the other parties set forth on the signature page herein (each a “Holder” and
collectively, the “Holders”).
WHEREAS, the Company previously entered
into a Securities Purchase Agreement dated, December 28, 2005 (the “First Purchase
Agreement”), as amended on February 1, 2006, February 24, 2006, March 31,
2006, September 26, 2006, October 28, 2006, November 30, 2006, June 8, 2007,
February 28, 2007, March 6, 2007, May 2, 2007, May 30, 2007, May 31, 2007,
December 6, 2007 and December 15, 2007 whereby the Company issued and sold to
certain Holders the Company’s 6% Secured Convertible Debentures due December 28,
2008 (the “First
Debentures”) as follows:
|
(a)
|
$2,000,000
principal amount of First Debentures on December 28,
2005,
|
|
(b)
|
$375,884.38
principal amount of First Debentures on February 1,
2006,
|
|
(c)
|
$500,000
principal amount of First Debentures on February 24, 2006
and
|
|
|
(d)
|
$500,000
principal amount of First Debentures on March 31,
2006,
|
for an
aggregate principal amount of all First Debentures issued equal to
$3,375,884.38.
WHEREAS, the Company previously entered
into a Securities Purchase Agreement dated, June 30, 2005 (the “Second Purchase
Agreement” and together with the First Purchase Agreement, the “Purchase
Agreements”), as amended on September 26, 2006, October 28, 2006,
November 30, 2006, June 8, 2007, February 28, 2007, March 6, 2007, May 2, 2007,
May 30, 2007, May 31, 2007, December 6. 2007 and December 28, 2008 whereby the
Company issued and sold to certain Holders the Company’s 6% Secured Convertible
Debentures due December 28, 2008 (the “Second Debentures”
and together with the First Debentures, the “Debentures”) as
follows:
|
(a)
|
$1,773,470.83
principal amount of Second Debentures on June 30,
2006,
|
|
(b)
|
$250,000
principal amount of Second Debentures on September 26,
2006,
|
|
(c)
|
$250,000
principal amount of Second Debentures on October 28,
2006,
|
|
|
(d)
|
$400,000
principal amount of Second Debentures on November 30,
2006,
|
|
|
(e)
|
$288,000
principal amount of Second Debentures on June 8,
2007,
|
|
|
(f)
|
$327,000
principal amount of Second Debentures on February 28,
2007,
|
|
|
(g)
|
$20,000
principal amount of Second Debentures on March 6,
2007,
|
|
|
(h)
|
$150,000
principal amount of Second Debentures on May 7,
2007,
|
|
|
(i)
|
$610,000
principal amount of Second Debentures on May 30,
2007,
|
|
|
(j)
|
$500,000
principal amount of Second Debentures on May 31, 2007,
and
|
|
|
(k)
|
$855,000
principal amount of Second Debentures on December 15,
2007,
|
for an
aggregate principal amount of all Second Debentures issued equal to
$5,234,470.83.
WHEREAS,
the Company has proposed certain waivers by the Holders to the Debentures in
exchange for the issuance of additional principal amounts of the Debentures
(“Additional Principal”) to the Holders equal to 10% principal
outstanding as of March 31, 2008 (including the conversion of interest due
January 1, 2008 into principal as set forth below) .
NOW THEREFORE, for and in consideration
of the above recitals, the parties to this Amendment hereby agree as
follows:
1. Definitions. All
initially capitalized, undefined terms used herein shall have the meanings
ascribed to such terms in each of the respective Purchase Agreements or the
respective Debentures and the other agreements entered into in connection
therewith.
2. Waiver of Certain Provisions
by Holders. Each Holder, severally and not jointly with the
other Holders, hereby waives each Event of Default (as defined in the respective
Debentures) solely as a result of the Company’s failure to pay interest to the
Holders on January 1, 2008.
3. Amendments to the
Debentures.
a) The
following text is hereby deleted from Section 2(a) of each of the
Debentures:
“(provided
that interest due on January 1, 2007, July 1, 2007 and January 1, 2008 upon
principal outstanding on such date shall be added to the principal outstanding
and shall thereafter bear interest at the rate set forth herein, and further
provided that if the Company raised at least $2 million of equity financing
during the period beginning on December 1, 2007 and ending March 3, 2008, on
each Interest Payment Date thereafter interest due on upon principal outstanding
on such date shall be added to the principal outstanding and shall thereafter
bear interest at the rate set forth herein)”
b) The first
sentence of Section 2(a) of each of the Debentures is hereby amended to
add:
“(provided
that interest due on January 1, 2007, July 1, 2007 and January 1, 2008 upon
principal outstanding on such date shall be added to the principal outstanding
and shall thereafter bear interest at the rate set forth herein)”;
c) The first
paragraph of each of the Debentures is hereby amended to add:
“The
obligations represented by this Debenture are secured by and the holder hereof
is entitled to the benefits of a security interest in the assets of the Company
granted pursuant to the Security Agreement”.
2
|
4.
|
Issuance of Debentures
Representing the Additional Principal. In consideration
for such waivers set forth in this Amendment, the Company, subject to the
execution of this Amendment by the Holders of not less than 60% of the
principal outstanding on the Debentures as of January 31, 2008, shall
issue and deliver Debentures representing the Additional Principal in the
form annexed hereto as Exhibit A to the Holders that have accepted this
Agreement and in the principal amounts set forth in Schedule I
hereto. If this Amendment is initially not executed by the
holders of 100% of the principal amount of the Debentures, the Company
will issue and deliver Debentures representing the Additional Principal to
any Holder that subsequently executes this
amendment.
|
|
5.
|
Amended and Restated
Debentures. Any Holder may request from the Company, and
the Company shall deliver to the Holder within 5 Trading Days, an amended
and restated Debenture reflecting the terms of this
Amendment.
|
|
6.
|
Counterparts. This
Amendment may be executed in any number of counterparts with the same
effect as if all of the parties had signed the same
document. All counterparts shall be construed together and
shall constitute one and the same instrument. In the event that any
signature is delivered by facsimile transmission or by e-mail delivery of
a “.pdf” format data file, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original
thereof.
|
|
7.
|
Construction and
Notices. This Amendment and the rights and obligations
of the parties hereunder shall be construed in accordance with and
governed pursuant to the terms of each of the Purchase
Agreements.
|
|
8.
|
Full Force and Effect
of Purchase Agreements. Except as expressly set forth
herein, all of the terms and conditions of the Purchase Agreements and the
Debentures shall continue in full force and effect after the execution of
this Amendment, and shall not be in any way changed, modified or
superseded by the terms set forth herein and the provisions of this
Amendment, if not expressly set forth herein, shall otherwise be subject
to the provisions of the Purchase
Agreements.
|
|
9.
|
Obligations
Several. The obligations of each Holder under this
Amendment are several and not joint with the obligations of any other
Holder, and no Holder shall be responsible in any way for the performance
of the obligations of any other Holder under this
Amendment. Nothing contained herein or in this Amendment, and
no action taken by any Holder pursuant thereto, shall be deemed to
constitute the Holders as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Holders are
in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this
Amendment. Each Holder shall be entitled to independently
protect and enforce its rights, including without limitation the rights
arising out of this Amendment, and it shall not be necessary for any other
Holder to be joined as an additional party in any proceeding for such
purpose. Each Holder has been represented by its own separate
legal counsel in their review and negotiation of this
Amendment. The Company has elected to provide all Holders with
the same terms under this Amendment for
the
|
3
|
|
convenience
of the Company and not because it was required or requested to do so by
the Holders.
|
IN WITNESS WHEREOF, each party has
executed this Amendment as of the date first written above.
By:
Name: Xxxxxxx
Xxxx-Xxxxx
Title: Chief
Financial Officer
[SIGNATURE
PAGES CONTINUE]
4
Bushido
Capital Master Fund, LP
Signature of Authorized Signatory of
Bushido:
Name of
Authorized Signatory: Xxxxxx X.
Xxxxx
Title of
Authorized Signatory: Partner, Bushido Capital
Partners, Ltd., its General Partner
[SIGNATURE
PAGES CONTINUE]
5
Gamma
Opportunity Capital Partners, LP Class A
Signature of Authorized Signatory of
Gamma Class A:
Name of
Authorized Signatory: Xxxxxxxx X.
Xxxxxx
Title of
Authorized Signatory: President
Gamma
Opportunity Capital Partners, LP Class C
Signature
of Authorized Signatory of Gamma Class C:
Name of
Authorized Signatory: Xxxxxxxx X.
Xxxxxx
Title of
Authorized Signatory: President
Crucian
Transition, Inc.
Signature
of Authorized signatory for Crucian:
Name of
Authorized Signatory: Xxxxxxxx
X. Xxxxxx
Title of
Authorized Signatory: President
[SIGNATURE
PAGES CONTINUE]
6
Xxxxxx
Diversified Strategy Master Fund, LLC – Series BUS
Signature of Authorized Signatory of
Xxxxxx:
Name of
Authorized Signatory: Xxxxxx
Xxxxxxxx
Title of
Authorized Signatory: Attorney-In-Fact
[SIGNATURE
PAGES CONTINUE]
7
Xxxxxxx
Xxxxxxxx Family Limited Partnership
Signature of Authorized signatory
for Typaldos LP: /s/ Xxxxx
Xxxxxxxx
Name of
Authorized Signatory: Xxxxx Xxxxxxxx
Title of
Authorized Signatory: Managing Partner
Xxxxxxx
Xxxxxxxx:
Xxxxxxx
Xxxxxxxx:
Cargo
Holdings, LLC
Signature
of Authorized Signatory of Cargo:
Name of
Authorized Signatory: Xxxxx Xxxxxxxx
Title of
Authorized Signatory: Member
Signature
of Authorized Signatory of Cargo:
Name of
Authorized Signatory: Gennaro Vendome
Title of
Authorized Signatory: Member
[SIGNATURE
PAGES CONTINUE]
8
Xxxxxxx
X. Xxxxxx:
Xxxx
X. Xxxxxxxxx:
Gennaro
Vendome:
Xxxxxxx
X. Xxxxxx:
[SIGNATURE
PAGES CONTINUE]
9
TRANSFEREE
HOLDERS:
BCMF
Trustees, LLC
Signature of Authorized Signatory of
BCMF Trustees, LLC:
Name of
Authorized Signatory:
Title of
Authorized Signatory:
ACM
SPV LLC
Signature of Authorized Signatory of
ACM SPV LLC:
Name of
Authorized Signatory: Xxxxxxx
Xxxx
Title of
Authorized Signatory: Managing Member of ACM SPV
Management LLC, its
Investment
Manager
CFRR
Holdings, LLC
Signature of Authorized Signatory of
CFRR Holdings, LLC:
Name of
Authorized Signatory:
Title of
Authorized Signatory:
XXXXX
XXXXXX:
Xxxxx
Xxxxxx, individually
[LAST
SIGNATURE PAGE]
10
SCHEDULE
I
|
Holder
|
Principal
12/31/2008
|
Interest
from
7/1/07
thru 1/1/2008 |
Total
Outstanding
(P+I) 1/1/2008 |
Interest
Penalty
at
10% 3/31/2008 |
Principal
4/1/2008
|
|||||||||||||||
|
Bushido
Capital Master Fund
Attn:
Xxxxxx X Xxxxx
000
Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
|
$ | 1,210,643.38 | $ | 38,750.91 | $ | 1,330,447.86 | $ | 133,044.79 | $ | 1,463,492.65 | ||||||||||
|
BCMF
Trustees c/o Bushido Capital
Attn:
Xxxxxx X Xxxxx
000
Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
|
1,968,208.00 | 62,999.44 | 2,162,980.76 | 216,298.08 | 2,379,278.83 | |||||||||||||||
|
ACM
SPV LLC
Attn:
Xxxxxxxxx Xxxxxxxxxx
000
Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
xxxxxxxxxxx@xxxxxxxxxxx.xxx
Tel.
000-000-0000
Fax.
000-000-0000
|
395,255.00 | 12,651.53 | 434,369.21 | 43,436.92 | 477,806.14 | |||||||||||||||
|
Xxxxx
Xxxxxx c/o Xxxxx Xxxxxx
CFRR
Holdings, LLC
Attn:
Xxxxx Xxxxxxx
000
Xxxxxxx Xxxxxx, Xxxxx 000
Xxx
Xxxx, XX 00000
(212)
838-0777
|
21,808.00 | 698.04 | 23,966.09 | 2,396.61 | 26,362.70 | |||||||||||||||
|
CFRR
Holdings, LLC
Attn:
Xxxxx Xxxxxxx
000
Xxxxxxx Xxxxxx, Xxxxx 000
Xxx
Xxxx, XX 00000
xxxxxxx@xxxxxxxxxxx.xxx
Tel
000-000-0000
|
29,970.00 | 959.30 | 32,935.84 | 3,293.58 | 36,229.43 | |||||||||||||||
i
|
Cargo
Holdings LLC
c/o
Xxxxxx X. Xxxxxxxxxxx
0000
Xxxxxxxx, Xxxxx 0000
Xxx
Xxxx, Xxx Xxxx 00000
|
500,000.00 | 16,147.82 | 554,408.65 | 55,440.87 | 609,849.52 | |||||||||||||||
|
Gamma
Opportunities Capital Partners, LP Class A
1967
Longwood – Xxxx Xxxx Xxxx
Xxxxxxxx,
XX 00000
|
500,000.00 | 16,384.73 | 562,542.23 | 56,254.22 | 618,796.45 | |||||||||||||||
|
Gamma
Opportunities Capital Partners, LP Class C
1967
Longwood – Xxxx Xxxx Xxxx
Xxxxxxxx,
XX 00000
|
500,000.00 | 16,384.73 | 562,542.23 | 56,254.22 | 618,796.45 | |||||||||||||||
|
Xxxxxx
Diversified Strategy Master Fund LLC Series Bus
Attn:
Xxxxxx X Xxxxx
000
Xxxx 0xx Xxxxxx, Xx 'h Floor
Xxx
Xxxx, XX 00000
xxxxx@xxxxxxxxxxxxxx.xxx
Tel:
000-000-0000
|
1,000,000.00 | 31,608.12 | 1,085,212.28 | 108,521.23 | 1,193,733.51 | |||||||||||||||
|
Xxxxxxx
Xxxxxxxx Family Limited Partnership
00
Xxxx 00xx Xxxxxx, XXX
Xxx
Xxxx, XX 00000
|
1,562,576.71 | 48,050.00 | 1,649,716.79 | 164,971.68 | 1,814,688.47 | |||||||||||||||
|
Xxxxxxx
Xxxxxxxx
00
Xxxx 00xx Xxxxxx, XXX
Xxx
Xxxx, XX 00000
|
1,215,000.00 | 15,674.26 | 1,253,371.72 | 125,337.17 | 1,378,708.90 | |||||||||||||||
|
Xxxxxxx
Xxxxxxxx
000
Xx. Xxxxx Xxx, xxxxxxxxx #0
Xxxxxxxx,
Xxx Xxxx 00000
|
115,000.00 | 3,490.83 | 119,851.66 | 11,985.17 | 131,836.82 | |||||||||||||||
|
Crucian
Transition, Inc.
c/o
Bushido Capital Master Fund, LP
000
Xxxx 00xx Xxxxxx, 00 xx Xxxxx
Xxx
Xxxx, XX 00000
|
20,000.00 | 610.90 | 20,974.23 | 2,097.42 | 23,071.66 |
ii
|
Xxxx
X. Xxxxxxxxx
000
Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx
Xxxx, XX 00000
|
18,000.00 | 542.79 | 18,635.79 | 1,863.58 | 20,499.37 | |||||||||||||||
|
Xxxxxxx
X. Xxxxxx
000
Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx
Xxxx, XX 00000
|
27,000.00 | 814.19 | 27,953.69 | 2,795.37 | 30,749.05 | |||||||||||||||
|
Xxxxxxx
X. Xxxxxx
0000
Xxxxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
|
180,000.00 | 4,121.08 | 187,046.08 | 18,704.61 | 205,750.69 | |||||||||||||||
|
Gennaro
Vendome
000
Xxxx 00xx Xxxxxx,
Xxx
Xxxx, XX 00000
|
20,000.00 | 53.33 | 20,053.33 | 2,005.33 | 22,058.67 | |||||||||||||||
| $ | 9,283,461.09 | $ | 269,941.99 | $ | 10,047,008.45 | $ | 1,004,700.84 | $ | 11,051,709.29 | |||||||||||
iii
EXHIBIT
A
