Exhibit 10.27

 

AGREEMENT AND WAIVER

 

Reference is hereby made to the Note Purchase Agreement dated May 1, 2017 (the
“Agreement”) by and between Arkados Group, Inc., a Delaware corporation (the
“Company”), and the undersigned entities (collectively, “AIP”). All capitalized
terms used but not defined herein shall have the meanings set forth in the
Agreement.

 

WHEREAS, on May 1, 2017 (the “Closing Date”), the Company and AIP completed a
financing transaction pursuant to which the Company raised capital by issuing
(i) secured convertible promissory notes (the “Notes”) in the aggregate
principal amount of $2,500,000 and (ii) warrants to purchase shares of Company
common stock to AIP and its affiliated entities in accordance with the terms of
the Agreement;

 

WHEREAS, in connection with entering into the Agreement, the Company also
entered into a registration rights agreement of the same date (the “Registration
Rights Agreement”) with AIP with respect to the registration of the shares of
Company common stock issuable upon conversion of the Notes (the “Conversion
Shares”) and exercise of the warrants (the “Warrant Shares” and together with
the Conversion Shares, the “Registrable Securities”), and pursuant to the terms
of the Registration Rights Agreement agreed to file a registration statement on
Form S-1 (the “Registration Statement”) by July 15, 2017 (the “Initial Filing
Date”) with the Securities and Exchange Commission to register the Registrable
Securities for resale to the public;

 

WHEREAS, failure to file the Registration Statement by the Initial Filing Date
constitutes an “Event of Default” under Section 9.1(c) of the Agreement (“First
Default”), and the Company failed to file the Registration Statement by the
Initial Filing Date and is thus, as of July 16, 2017, in default of the
Agreement;

 

WHEREAS, failure to issue 2,500,000 Warrants (as defined in the Agreement) at
Closing as required by Section 3.1(p) of the Agreement constitutes an “Event of
Default” under Section 9.1(c) of the Agreement (“Second Default”), and the
Company failed to issue such Warrants and is thus, as of May 1, 2017, in default
of the Agreement; and

 

WHEREAS, Section 9.6 of the Agreement gives the Majority Holders the power to
instruct the Security Agent waive the Events of Default.

 

NOW THEREFORE, the parties agree as follows:

 

1.            The Majority Holders hereby waive, and instruct the Security Agent
to waive, the First Default referenced in the recitals, subject to terms below.
The Majority Holders hereby waive, and instruct the Security Agent to waive, the
Second Default through, but not beyond, September 1, 2017.

 

2.            Arkados Group, Inc. hereby agrees to issue 150,000 additional
shares of its common stock, par value $0.0001 per share, to the Holders, to be
issued in four certificates as follows (the “Waiver Fee”):

  

AIP Private Capital Inc. 7,059 AIP Canadian Enhanced Income Class 59,912 AIP
Global Macro Class 15,971 AIP Global Macro Fund LP 67,059

 

 

 

 

3.            Except as explicitly stated in this Agreement and Waiver, the
terms and conditions of the Agreement remain in full force and effect. Without
limiting the foregoing:

 

(a)       The parties hereby agree that the conversion price set forth in
Section 6.1(a) of the Agreement shall be $0.60 per share in lieu of $0.80 per
share, provided that antidilution provision of Section 6.1(d) remains in effect;

 

(b)       Section 8.1(s) shall apply for periods beginning September 1, 2017;
and

 

(c)       If the Warrants (as defined in the Agreement) are not issued to the
Security Agent on behalf of the Holders by September 1, 2017, a new Event of
Default shall occur.

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement and Waiver
effective as of as of August 29, 2017.

 

  ARKADOS GROUP, INC.,         By: /s/Terrence DeFranco   Name: Terrence De
Franco   Title:   CEO         AIP ASSET MANAGEMENT INC.,
as Security Agent       By: /s/Jay Bala   Name: Jay Bala, CFA   Title:
  President

 

Agreement and Waiver

2 

August 29, 2017 

 

 

  AIP PRIVATE CAPITAL INC.,   as a Holder         By: /s/Alex Kanayev   Name:
Alex Kanayev   Title:   Managing Partner         AIP CANADIAN ENHANCED INCOME
CLASS,   as a Holder         By: /s/Jay Bala   Name: Jay Bala, CFA   Title:
  Portfolio Manager         AIP GLOBAL MACRO FUND, LP,   as a Holder       By:
/s/Jay Bala   Name: Jay Bala, CFA   Title:   Portfolio Manager         AIP
GLOBAL MACRO CLASS,   as a Holder         By: /s/Jay Bala   Name: Jay Bala, CFA
  Title:   Portfolio Manager

 

Agreement and Waiver

3 

August 29, 2017