EXTENSION AND CONVERSION AGREEMENT

This Agreement made as of this 7 ^th day of July, 2008 between Arkados Group, Inc., formerly CDKnet.com, Inc., a Delaware corporation (the “Company”) having a principal place of business at 220 Old New Brunswick Road, Suite 202, Piscataway, NJ 08854, and the holder of the Company’s outstanding 6% Convertible Subordinated Notes due June 30, 2008 (the “Notes”) that has executed this Agreement on Schedule I hereto.  Such holder is referred to herein as the “Lender”.

WHEREAS, the Company issued $1,066,500 of the principal of the Notes;

WHEREAS,  principal and interest on the Notes, as previously amended, was due on June 30, 2008 and the Company’s failure to pay principal and interest by July 7, 2008, absent this Agreement becoming effective, would constitute an “Event of Default” as defined in the Notes;

WHEREAS, the Lender deems it in its best interest to enter into this Agreement to facilitate capital raising activities by the Company; and

WHEREAS, Lender is willing to release the Company from its obligation to repay the principal amount of the Notes held by each Lender upon the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the terms, conditions and agreements contained in this Agreement, the parties agree as follows:

1.            EXTENSION, FORBEARANCE AND WAIVER .

(a)            Extension .  The Lender hereby agrees to amend the Notes to extend the “Maturity Date” defined in the Notes to June 30, 2009 (the “Extension”).  Such amendment will be effective upon the execution of this Agreement by the holders of $711,000 of the principal amount of the Notes.

(b)            Forbearance .  The Lender agrees to refrain from exercising any rights as creditor arising from the Notes and related security purchase agreements and warrants (the “Ancillary Documents”) until the Maturity Date of the Notes, as modified by this Agreement.

(c)            Waiver .  The Lender agrees to waive (i) any and all prior defaults on the Notes and Ancillary Documents; and (ii) any right to mandatory redemption of the Notes pursuant to Section 4(c) thereof.

2.            ISSUANCE OF SECURITIES .

(a)           In exchange for a portion of the Notes, the Lender agrees to accept in full satisfaction of the Company’s obligation to repay 25% of the principal and interest due on the

Notes, that number of restricted shares of the Company’s common stock (“Shares”) determined by dividing 25% of principal and interest of the Note as of June 30, 2008 by $0.35.

For example, the holder of $100 principal of the Notes, assuming the Notes have been outstanding for three full years, the interest accrued on the Notes would be $18, the total of principal and interest would be $118, the holder would receive 85 Shares and the Note would continue to represent $75 of principal and $13.50 accrued and unpaid interest.

In order to receive the Shares, the Lender must surrender the original Note to the Company so that the Company can endorse the Note with the adjusted principal and interest outstanding.  The Company agrees to issue certificates representing the Shares and a return the endorsed Note representing the balance that is not exchanged within five business days after receiving the Notes, properly endorsed for transfer to the Company.

(b)           Certificates, representing the Shares, in due and proper form, representing the shares will be registered in the name of the Lender and bear a legend substantially in the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.  THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THESE SHARES UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT”.

(c)           Notwithstanding the restricted nature of the Shares upon issuance, the Company, at its sole cost and expense, will provide an opinion of counsel to its transfer agent to the effect that the Shares may be transferred without registration pursuant to the exemption set forth in Rule 144, provided the Lender can provide a representation letter to the transfer agent substantially in the form annexed hereto as Exhibit A.

3.            LENDER’S REPRESENTATIONS AND WARRANTIES .

The Lender hereby acknowledges, represents and warrants to, and agrees with, the  Company as follows:

(a)           The Lender has the authority and power, corporate and otherwise, is acquiring the shares for his own account as principal, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof, in whole or in part, and no other person has a direct or indirect beneficial interest in such shares.

(b)           The Lender acknowledges its understanding that the exchange of Shares for 25% of the Notes is intended to be exempt from  registration under the Act by virtue of

Sections 3(a)(10) and 4(2) of the Securities Act of 1933, as amended (the “Act”) and the provisions of Regulation D thereunder.

(c)           The Lender has the financial ability to bear the economic risk of his investment, has ad