EXHIBITS 10.1
Modification and Waiver
Agreement
This Modification and Waiver
Agreement (“Agreement”) dated as of December 6,
2005 is entered into by and among BlastGard International, Inc., a
Colorado corporation (the “Company”) and the
subscribers identified on the signature page hereto (each a
“Subscriber” and collectively “Subscribers”
or the “Parties”).
WHEREAS, the Company and the
Subscribers are parties to Subscription Agreements
(“Subscription Agreements”) dated December 2, 2004
relating to an aggregate investment of $1,420,000 by Subscribers in
secured notes (“Notes”) convertible into Common Stock
of the Company and Common Stock Purchase Warrants
(“Warrants”); and
WHEREAS, the Company is in default
of material terms of the Transaction Documents and the Subscribers
may elect to exercise their rights to accelerate the Maturity Date
of the Notes and foreclose on the Collateral under the Security
Agreement; and
WHEREAS, the Company and Subscribers
desire to restructure the terms of the Transaction Documents to
their mutual benefit.
NOW THEREFORE, in consideration of
the mutual covenants and other agreements contained in this
Agreement, the Company and the Subscribers hereby agree as
follows:
1. All the capitalized terms
employed herein shall have the meanings attributed to them in the
Subscription Agreements and the documents and agreements delivered
therewith (“Transaction Documents”).
2. Section 1.2 contained in
Article I of the Note is amended as follows:
(a) The Company will pay the
principal amounts and interest payments due through
December 31, 2005 (as described on Schedule A) with shares of
the Company’s Common Stock.
(b) Such shares of Common Stock
shall be valued at a per share value of $0.50 per share.
3. Not later than seven business
days after the Company receives an executed copy of this Agreement
signed by all Subscribers, the Company will deliver an aggregate of
314,294 shares of Common Stock (in the amounts designated on
Schedule A hereto) to Subscribers (“Additional
Shares”). The Additional Shares will contain the legend set
forth in Section 4(e) of the Subscription Agreement. For the
benefit of the parties hereto, the Company hereby makes all the
representations, warranties, covenants undertakings and
indemnifications contained in the Transaction Documents, as if such
representations were made by the Company as of this date. The
Subscribers hereby make all of the representations, warranties,
covenants, indemnifications and undertakings contained in the
Transaction Documents as if such representations were made by the
Subscribers as of this date. The Company represents that the
Additional Shares are fully paid and non-assessable. The
Subscribers are granted the rights described in Sections 11.1(ii)
of the Subscription Agreement in relation to the Additional
Shares.
4. The issuance of such Shares of
Common Stock shall not trigger the anti-dilution protection
described in Section 2.1(c).D of the Note.
5. The Company acknowledges that for
purposes of Rule 144(d)(3)(i) of the 1933 Act, the holding period
of the Additional Shares shall tack back to the Closing Date of
December 2, 2004.
6. The Subscribers waive exercise of
the remedies and ri
