Exhibit 4.2.12
WARRANT AGREEMENT
BETWEEN
STRATUS SERVICES GROUP, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
DATED AS OF JULY 14, 2004
WARRANT AGREEMENT
This Agreement, dated as of July 14, 2004, is between Stratus Services
Group, Inc., a Delaware corporation (the "Company") and American Stock Transfer
& Trust Company, a New York corporation (the "Warrant Agent").
The Company, at or about the time that it is entering into this
Agreement, proposes to (i) issue and sell to public investors up to 12,500,000
Units (together with the additional units issuable as provided herein, the
"Units"), with each Unit consisting of one share of common stock, $0.04 par
value, of the Company and one warrant (collectively, the "Warrants") and (ii)
issue up to 32,040,000 Warrants to holders of its Series E Preferred Stock in
connection with an exchange offer it is making to the holders of its Series E
Preferred Stock and upon the conversion of the shares of Series I Preferred
Stock, if any, issued in such exchange offer. Each Warrant is exercisable to
purchase one share of Common Stock upon the terms and conditions and subject to
adjustment in certain circumstances, all as set forth in this Agreement.
The Company wishes to retain the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, transfer, exchange and replacement of the certificates evidencing the
Warrants to be issued under this Agreement (the "Warrant Certificates") and the
exercise of the Warrants.
The Company and the Warrant Agent wish to enter into this Agreement to
set forth the terms and conditions of the Warrants and the rights of the holders
thereof ("Warrantholders") and to set forth the respective rights and
obligations of the Company and the Warrant Agent. Each Warrantholder is an
intended beneficiary of this Agreement with respect to the rights of
Warrantholders herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company appoints the Warrant Agent to
act as agent for the Company in accordance with the instructions in
this Agreement and the Warrant Agent accepts such appointment.
2. Date, Denomination and Execution of Warrant Certificates.
(a) The Warrant Certificates (and the Form of Election to Purchase
and the Form of Assignment to be printed on the reverse
thereof) shall be in registered form only and shall be
substantially of the tenor and purport recited in Exhibit A
hereto, and may have such letters, numbers or other marks of
identification or designation and such legends, summaries or
endorsements printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to
comply with any law, or with any rule or regulation made
pursuant thereto, or with any rule or regulation of any stock
exchange on which the Common Stock or the Warrants may be
listed or any automated quotation system, or to conform to
usage. Each Warrant Certificate shall entitle the registered
holder thereof, subject to the provisions of this Agreement
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and of the Warrant Certificate, to purchase, on or after July
14, 2005 and on or before the close of business on January 14,
2007 (the "Expiration Date"), one fully paid and
non-assessable share of Common Stock for each Warrant
evidenced by such Warrant Certificate for $0.76. The exercise
price of the Warrants (the "Exercise Price") is subject to
adjustments as provided in Section 6 hereof. Each Warrant
Certificate shall be dated the date on which the Warrant Agent
receives valid issuance instructions from the Company or a
transferring holder of a Warrant Certificate or, if such
instructions specify another date, such other date.
(b) For purposes of this Agreement, the term "close of business"
on any given date shall mean 5:00 p.m., Eastern time, on such
date; provided, however, that if such date is not a business
day, it shall mean 5:00 p.m., Eastern time, on the next
succeeding business day. For purposes of this Agreement, the
term "business day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in New York,
New York or in the State in which the Warrant Agent maintains
the principal office in which it conducts business related to
the Warrants are authorized or obligated by law to be closed.
(c) Each Warrant Certificate shall be executed on behalf of the
Company by the Chairman of the Board or its President or a
Vice President, either manually or by facsimile signature
printed thereon, which shall be attested by the Secretary or
an Assistant Secretary of the Company, either manually or by
facsimile signature. Each Warrant Certificate shall be
countersigned by the Warrant Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of
the Company who shall have signed any Warrant Certificate
shall cease to be such officer of the Company before
countersignature by the Warrant Agent and issue and delivery
thereof by the Company, such Warrant Certificate,
nevertheless, may be countersigned by the Warrant Agent,
issued and delivered with the same force and effect as though
the person who signed such Warrant Certificate had not ceased
to be such officer of the Company.
3. Subsequent Issue of Warrant Certificates. Subsequent to their original
issuance, no Warrant Certificates shall be reissued except (i) Warrant
Certificates issued upon transfer thereof in accordance with Section 4
hereof, (ii) Warrant Certificates issued upon any combination, split-up
or exchange of Warrant Certificates pursuant to Section 4 hereof, (iii)
Warrant Certificates issued in replacement of mutilated, destroyed,
lost or stolen Warrant Certificates pursuant to Section 5 hereof, (iv)
Warrant Certificates issued upon the partial exercise of Warrant
Certificates pursuant to Section 7 hereof, and (v) Warrant Certificates
issued to reflect any adjustment or change in the Exercise Price or the
number or kind of shares purchasable thereunder pursuant to Section 22
hereof. The Warrant Agent is hereby irrevocably authorized to
countersign and deliver, in accordance with the provisions of said
Sections 4, 5, 7 and 22, the new Warrant Certificates required for
purposes thereof, and the Company, whenever required by the Warrant
Agent, will supply the Warrant Agent with Warrant Certificates duly
executed on behalf of the Company for such purposes.
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4. Transfers and Exchanges of Warrant Certificates.
(a) The Warrant Agent will keep or cause to be kept books for
registration of ownership and transfer of the Warrant
Certificates issued hereunder. Such registers shall show the
names and addresses of the respective holders of the Warrant
Certificates and the kind and number of Warrants evidenced by
each such Warrant Certificate.
(b) The Warrant Agent shall, from time to time, register the
transfer of any outstanding Warrants upon the books to be
maintained by the Warrant Agent for that purpose, upon
surrender of the Warrant Certificate evidencing such Warrants,
with the Form of Assignment duly filled in and executed with
such signature guaranteed by an eligible institution and such
supporting documentation as the Warrant Agent or the Company
may reasonably require, to the Warrant Agent at its stock
transfer office in New York, New York at any time on or before
the Expiration Date of such Warrant, and upon payment to the
Warrant Agent for the account of the Company of an amount
equal to any applicable transfer tax. Payment of the amount of
such tax may be made in cash, or by certified or official bank
check, payable in lawful money of the United States of America
to the order of the Company.
(c) Upon receipt of a Warrant Certificate, with the Form of
Assignment duly filled in and executed, accompanied by payment
of an amount equal to any applicable transfer tax, the Warrant
Agent shall promptly cancel the surrendered Warrant
Certificate and countersign and deliver to the transferee a
new Warrant Certificate for the number of full Warrants
transferred to such transferee; provided, however, that in
case the registered holder of any Warrant Certificate shall
elect to transfer fewer than all of the Warrants evidenced by
such Warrant Certificate, the Warrant Agent in addition shall
promptly countersign and deliver to such registered holder a
new Warrant Certificate or Certificates for the number of full
Warrants not so transferred.
(d) Any Warrant Certificate or Certificates may be exchanged at
the option of the holder thereof for another Warrant
Certificate or Certificates of different denominations, of
like tenor and representing in the aggregate the same kind and
number of Warrants, upon surrender of such Warrant Certificate
or Certificates, with the Form of Assignment duly filled in
and executed, to the Warrant Agent, at any time or from time
to time after the close of business on the date hereof and
prior to the close of business on the Expiration Date relating
to such Warrant. The Warrant Agent shall promptly cancel the
surrendered Warrant Certificate and deliver the new Warrant
Certificate pursuant to the provisions of this Section.
5. Mutilated, Destroyed, Lost or Stolen Warrant Certificates. Upon receipt
by the Company and the Warrant Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of
any Warrant Certificate, and in the case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and
reimbursement to them of all reasonable expenses incidental thereto,
and, in the case of mutilation, upon surrender and cancellation of the
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Warrant Certificate, the Warrant Agent shall countersign and deliver a
new Warrant Certificate of like tenor for the same kind and number of
Warrants.
6. Adjustments of Number and Kind of Shares Purchasable and Exercise
Price. The number and kind of securities or other property purchasable
upon exercise of a Warrant shall be subject to adjustment from time to
time upon the occurrence, after the date hereof, of any of the
following events:
(a) In case the Company shall (1) pay a dividend in, or make a
distribution of, shares of capital stock on its outstanding
Common Stock, (2) subdivide its outstanding shares of Common
Stock into a greater number of such shares or (3) combine its
outstanding shares of Common Stock into a smaller number of
such shares, the total number of shares of Common Stock
purchasable upon the exercise of each Warrant outstanding
immediately prior thereto shall be adjusted so that the holder
of any Warrant Certificate thereafter surrendered for exercise
shall be entitled to receive at the same aggregate Exercise
Price the number of shares of capital stock (of one or more
classes) which such holder would have owned or have been
entitled to receive immediately following the happening of any
of the events described above had such Warrant been exercised
in full immediately prior to the record date with respect to
such event. Any adjustment made pursuant to this Subsection
shall, in the case of a stock dividend or distribution, become
effective as of the record date therefore and, in the case of
a subdivision or combination, be made as of the effective date
thereof. If, as a result of an adjustment made pursuant to
this Subsection, the holder of any Warrant Certificate
thereafter surrendered for exercise shall become entitled to
receive shares of two or more classes of capital stock of the
Company, the Board of Directors of the Company (whose
determination shall be conclusive and shall be evidenced by a
Board resolution filed with the Warrant Agent) shall determine
the allocation of the adjusted Exercise Price between or among
shares of such classes of capital stock.
(b) In the event of a capital reorganization or a reclassification
of the Common Stock (except as provided in Subsection (a)
above or Subsection (d) below), any Warrantholder, upon
exercise of Warrants, shall be entitled to receive, in
substitution for the Common Stock to which he would have
become entitled upon exercise immediately prior to such
reorganization or reclassification, the shares (of any class
or classes) or other securities or property of the Company (or
cash) that he would have been entitled to receive at the same
aggregate Exercise Price upon such reorganization or
reclassification if such Warrants had been exercised
immediately prior to the record date with respect to such
event; and in any such case, appropriate provision (as
determined by the Board of Directors of the Company, whose
determination shall be conclusive and shall be evidenced by a
certified Board resolution filed with the Warrant Agent) shall
be made for the application of this Section 6 with respect to
the rights and interests thereafter of the Warrantholders
(including but not limited to the allocation of the Exercise
Price between or among shares of classes of capital stock), to
the end that this Section 6 (including the adjustments of the
number of shares of Common Stock or other securities
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purchasable and the Exercise Price thereof) shall thereafter
be reflected, as nearly as reasonably practicable, in all
subsequent exercises of the Warrants for any shares or
securities or other property (or cash) thereafter deliverable
upon the exercise of the Warrants.
(c) Whenever the number of shares of Common Stock or other
securities purchasable upon exercise of a Warrant is adjusted
as provided in this Section 6, the Company will promptly file
with the Warrant Agent a certificate signed by a Chairman or
co-Chairman of the Board or the President or a Vice President
of the Company and by the Treasurer or Chief Financial Officer
or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Company setting forth the number and kind of
securities or other property purchasable upon exercise of a
Warrant, as so adjusted, stating that such adjustments in the
number or kind of shares or other securities or property
conform to the requirements of this Section 6, and setting
forth a brief statement of the facts accounting for such
adjustments. Promptly after receipt of such certificate, the
Company, or the Warrant Agent at the Company's request, will
deliver, by first-class, postage prepaid mail, a brief summary
thereof (to be supplied by the Company) to the registered
holders of the outstanding Warrant Certificates; provided,
however, that failure to file or to give any notice required
under this Subsection, or any defect therein, shall not affect
the legality or validity of any such adjustments under this
Section 6; and provided, further, that, where appropriate,
such notice may be given in advance and included as part of
the notice required to be given pursuant to Section 12 hereof.
(d) In case of any consolidation of the Company with, or merger of
the Company into, another corporation (other than a
consolidation or merger which does not result in any
reclassification or change of the outstanding Common Stock),
or in case of any sale or conveyance to another corporation of
the property of the Company as an entirety or substantially as
an entirety, the corporation formed by such consolidation or
merger or the corporation which shall have acquired such
assets, as the case may be, shall execute and deliver to the
Warrant Agent a supplemental warrant agreement providing that
the holder of each Warrant then outstanding shall have the
right thereafter (until the expiration of such Warrant) to
receive, upon exercise of such Warrant, solely the kind and
amount of shares of stock and other securities and property
(or cash) receivable upon such consolidation, merger, sale or
transfer by a holder of the number of shares of Common Stock
of the Company for which such Warrant might have been
exercised immediately prior to such consolidation, merger,
sale or transfer. Such supplemental warrant agreement shall
provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided in this
Section. The above provision of this Subsection shall
similarly apply to successive consolidations, mergers, sales
or transfers.
The Warrant Agent shall not be under any responsibility to
determine the correctness of any provision contained in any
such supplemental warrant agreement relating to either the
kind or amount of shares of stock or securities or property
(or cash) purchasable by holders of Warrant Certificates upon
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the exercise of their Warrants after any such consolidation,
merger, sale or transfer or of any adjustment to be made with
respect thereto, but subject to the provisions of Section 20
hereof, may accept as conclusive evidence of the correctness
of any such provisions, and shall be protected in relying
upon, a certificate of a firm of independent certified public
accountants (who may be the accountants regularly employed by
the Company) with respect thereto.
(e) Irrespective of any adjustments in the number or kind of
shares issuable upon exercise of Warrants, Warrant
Certificates theretofore or thereafter issued may continue to
express the same price and number and kind of shares as are
stated in the similar Warrant Certificates initially issuable
pursuant to this Warrant Agreement.
(f) The Company may retain a firm of independent public
accountants of recognized standing, which may be the firm
regularly retained by the Company, selected by the Board of
Directors of the Company or the Executive Committee of said
Board, to make any computation required under this Section,
and a certificate signed by such firm shall, in the absence of
fraud or gross negligence, be conclusive evidence of the
correctness of any computation made under this Section.
(g) For the purpose of this Section, the term "Common Stock" shall
mean (i) the Common Stock or (ii) any other class of stock
resulting from successive changes or reclassifications of such
Common Stock consisting solely of changes in par value, or
from par value to no par value, or from no par value to par
value. In the event that any time as a result of an adjustment
made pursuant to this Section, the holder of any Warrant
thereafter surrendered for exercise shall become entitled to
receive any shares of capital stock of the Company other than
shares of Common stock, thereafter the number of such other
shares so receivable upon exercise of any Warrant shall be
subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions
with respect to the Common Stock contained in this Section,
and all other provisions of this Agreement, with respect to
the Common Stock, shall apply on like terms to any such other
shares.
(h) The Company may, from time to time and to the extent permitted
by law, reduce the Exercise Price of the Warrants by any
amount for a period of not less than 20 days. If the Company
so reduces the Exercise Price of such Warrants, it will give
not less than 15 days' notice of such decrease, which notice
may be in the form of a press release, and shall take such
other steps as may be required under applicable law in
connection with any offers or sales of securities at the
reduced price.
7. Exercise and Redemption of Warrants. Unless the Warrants have been
redeemed as provided in this Section 7, the registered holder of any
Warrant Certificate may exercise the Warrants evidenced thereby, in
whole at any time or in part from time to time at or prior to the close
of business on the Expiration Date relating to such Warrant, subject to
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the provisions of Section 8, at which time the Warrant Certificates
shall be and become wholly void and of no value. Warrants may be
exercised by their holders or redeemed by the Company as follows:
(a) Exercise of Warrants shall be accomplished upon surrender of
the Warrant Certificate evidencing such Warrants, with the
Form of Election to Purchase on the reverse side thereof duly
filled in and executed, to the Warrant Agent at its stock
transfer office in New York, New York, together with payment
to the Warrant Agent on behalf of the Company of the Exercise
Price (as of the date of such surrender) of the Warrants then
being exercised and an amount equal to any applicable transfer
tax and, if requested by the Company, any other taxes or
governmental charges which the Company may be required by law
to collect in respect of such exercise. Payment of the
Exercise Price and other amounts may be made by wire transfer
of good funds, or by certified or bank cashier's check,
payable in lawful money of the United States of America to the
order of the Company. No adjustment shall be made for any cash
dividends, whether paid or declared, on any securities
issuable upon exercise of a Warrant.
(b) Upon receipt of a Warrant Certificate, with the Form of
Election to Purchase duly filled in and executed, accompanied
by payment of the Exercise Price of the Warrants being
exercised (and of an amount equal to any applicable taxes or
government charges as aforesaid), the Warrant Agent shall
promptly request from the Transfer Agent with respect to the
securities to be issued and deliver to or upon the order of
the registered holder of such Warrant Certificate, in such
name or names as such registered holder may designate, a
certificate or certificates for the number of full shares of
the securities to be purchased, together with cash made
available by the Company pursuant to Section 8 hereof in
respect of any fraction of a share of such securities
otherwise issuable upon such exercise. If the Warrant is then
exercisable to purchase property other than securities, the
Company shall take appropriate steps to cause such property to
be delivered to or upon the order of the registered holder of
such Warrant Certificate. In addition, if it is required by
law and upon instruction by the Company, the Warrant Agent
will deliver to each Warrantholder a prospectus which complies
with the provisions of Section 9 of the Securities Act of 1933
and the Company agrees to supply Warrant Agent with sufficient
number of prospectuses to effectuate that purpose.
(c) In case the registered holder of any Warrant Certificate shall
exercise fewer than all of the Warrants evidenced by such
Warrant Certificate, the Warrant Agent shall promptly
countersign and deliver to the registered holder of such
Warrant Certificate, or to his duly authorized assigns, a new
Warrant Certificate or Certificates evidencing the number of
Warrants that were not so exercised.
(d) Each person in whose name any certificate for securities is
issued upon the exercise of Warrants shall for all purposes be
deemed to have become the holder of record of the securities
represented thereby as of, and such certificate shall be
dated, the date upon which the Warrant Certificate was duly
surrendered in proper form and payment of the Exercise Price
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(and of any applicable taxes or other governmental charges)
was made; provided, however, that if the date of such
surrender and payment is a date on which the stock transfer
books of the Company are closed, such person shall be deemed
to have become the record holder of such shares as of, and the
certificate for such shares shall be dated, the next
succeeding business day on which the stock transfer books of
the Company are open (whether before, on or after the
Expiration Date relating to such Warrant) and the Warrant
Agent shall be under no duty to deliver the certificates for
such shares until such date. The Company covenants and agrees
that it shall not cause its stock transfer books to be closed
for a period of more than 20 consecutive business days except
upon consolidation, merger, sale of all or substantially all
of its assets, dissolution or liquidation or as otherwise
provided by law.
(e) The Warrants outstanding at the time of a redemption may be
redeemed at the option of the Company, in whole or in part on
a pro-rata basis, by giving not less than 30 days prior notice
as provided in Section 7(f) below, which notice may not be
given before, but may be given at any time after, the last
reported sale price of the Common Stock on the principal
exchange or quotation system on which it is then traded or
quoted has equaled or exceeded $1.33 per share (subject to
appropriate adjustments as provided herein) on each of twenty
(20) consecutive trading days that occur subsequent to the one
year anniversary of the date of this Warrant Agreement;
provided, however, that the Company may not exercise its right
to redeem the Warrants if it is not then in compliance with
Section 9 of this Agreement. The price at which Warrants may
be redeemed (the "Redemption Price") is $.08 per Warrant
(subject to appropriate adjustments as provided herein). On
and after the redemption date the holders of record of
redeemed Warrants shall be entitled to payment of the
Redemption Price upon surrender of such redeemed Warrants to
the Company at the office of the Warrant Agent designated for
that purpose.
(f) Notice of redemption of Warrants shall be given at least 30
days prior to the redemption date by mailing a copy of such
notice to the Warrant Agent and to all of the holders of
record of Warrants at their respective addresses appearing on
the books or transfer records of the Company or such other
address designated in writing by the holder of record to the
Warrant Agent not less than 40 days prior to the redemption
date.
(g) From and after the redemption date, all rights of the
Warrantholders (except the right to receive the Redemption
Price) shall terminate, but only if (i) no later than one day
prior to the redemption date the Company shall have
irrevocably deposited with the Warrant Agent as paying agent a
sufficient amount to pay on the redemption date the Redemption
Price for all Warrants called for redemption and (ii) the
notice of redemption shall have stated the name and address of
the Warrant Agent and the intention of the Company to deposit
such amount with the Warrant Agent no later than one day prior
to the redemption date.
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(h) On the Redemption Date, the Warrant Agent shall pay to the
holders of record of redeemed Warrants all monies received by
the Warrant Agent for the redemption of Warrants to which the
holders of record of such redeemed Warrants who shall have
surrendered their Warrants are entitled. The Warrant Agent
shall have no obligation to pay for the redemption of the
Warrants except to the extent that funds for such payment have
been provided to it by the Company.
(i) Any amounts deposited with the Warrant Agent that are not
required for redemption of Warrants may be withdrawn by the
Company. Any amounts deposited with the Warrant Agent that
shall be unclaimed after six months after the redemption date
shall be redelivered back to the Company, and thereafter the
holders of the Warrants called for redemption or which such
funds were deposited shall look solely to the Company for
payment. The Company shall be entitled to the interest, if
any, on funds deposited with the Warrant Agent and the holders
of redeemed Warrants shall have no right to any such interest.
At the instruction of the Company, the Warrant Agent shall
deposit or invest any and all funds deposited with it by the
Company in connection with any redemption in federally
insured, interest bearing accounts with the financial
institution or institutions typically used by the Warrant
Agent for such purpose, and the Warrant Agent shall have no
liability with respect to the performance of any such
investments other than, in the case of funds deposited in
accounts maintained by the Warrant Agent, the liability of the
Warrant Agent to its depositors in such accounts, generally.
(j) If the Company fails to make a sufficient deposit with the
Warrant Agent as provided above, the holder of any Warrants
called for redemption may at the option of the holder (i) by
notice to the Company declare the notice of redemption a
nullity as to such holder, or (ii) maintain an action against
the Company for the Redemption Price. If the holder brings
such an action, the Company will pay reasonable attorneys'
fees of the holder. If the holder fails to bring an action
against the Company for the Redemption Price within 60 days
after the redemption date, the holder shall be deemed to have
elected to declare the notice of redemption to be a nullity as
to such holder and such notice shall be without any force or
effect as to such holder. Except as otherwise specifically
provided in this Section 7(j), a notice of redemption, once
mailed by the Company as provided in Section 7(f) shall be
irrevocable.
8. Fractional Interests. The Company shall not be required to issue any
Warrant Certificate evidencing a fraction of a Warrant or to issue
fractions of shares of securities on the exercise of the Warrants. If
any fraction (calculated to the nearest one-hundredth) of a Warrant or
a share of securities would, except for the provisions of this Section,
be issuable on the exercise of any Warrant, the Company shall, at its
option, either purchase such fraction for an amount in cash equal to
the current value of such fraction computed on the basis of the closing
market price (as quoted on the OTC Bulletin Board or other principal
quotation system or exchange on which the Common Stock is quoted or
traded) on the trading day immediately preceding the day upon which
such Warrant Certificate was surrendered for exercise in accordance
with Section 7 hereof or issue the required fractional Warrant or
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share. By accepting a Warrant Certificate, the holder thereof expressly
waives any right to receive a Warrant Certificate evidencing any
fraction of a Warrant or to receive any fractional share of securities
upon exercise of a Warrant, except as expressly provided in this
Section 8.
9. Reservation and Registration of Equity Securities. The Company
covenants that it will at all times reserve and keep available, free
from any preemptive rights, out of its authorized and unissued equity
securities, solely for the purpose of issue upon exercise of the
Warrants, such number of shares of equity securities of the Company as
shall then be issuable upon the exercise of all outstanding Warrants
("Equity Securities"). The Company covenants that all Equity Securities
which shall be so issuable shall, upon such issue, be duly authorized,
validly issued, fully paid and non-assessable.
The Company covenants that if any equity securities, required to be
reserved for the purpose of issue upon exercise of the Warrants
hereunder, require registration with or approval of any governmental
authority under any federal or state law before such shares may be
issued upon exercise of Warrants, the Company will use all commercially
reasonable efforts to cause such securities to be duly registered, or
approved, as the case may be, and, to the extent practicable, take all
such action in anticipation of and prior to the exercise of the
Warrants, including, without limitation, filing or maintaining an
appropriate registration statement, necessary to permit a public
offering of the securities underlying the Warrants at any and all times
during the term of this Agreement, provided, however, that in no event
shall such securities be issued, and the Company is authorized to
refuse to honor the exercise of any Warrant, if such exercise would
result in the opinion of the Company's Board of Directors, upon advice
of counsel, in the violation of any law.
10. Reduction of Conversion Price Below Par Value. Before taking any action
that would cause an adjustment pursuant to Section 6 hereof reducing
the portion of the Exercise Price required to purchase one share of
capital stock below the then par value (if any) of a share of such
capital stock, the Company will use its best efforts to take any
corporate action which, in the opinion of its counsel, may be necessary
in order that the Company may validly and legally issue fully paid and
non-assessable shares of such capital stock.
11. Payment of Taxes. The Company covenants and agrees that it will pay
when due and payable any and all federal and state documentary stamp
and other original issue taxes which may be payable in respect of the
original issuance of the Warrant Certificates, or any shares of Common
Stock or other securities upon the exercise of Warrants. The Company
shall not, however, be required (a) to pay any tax which may be payable
in respect of any transfer involved in the transfer and delivery of
Warrant Certificates or the issuance or delivery of certificates for
Common Stock or other securities in a name other than that of the
registered holder of the Warrant Certificate surrendered for purchase
or (b) to issue or deliver any certificate for shares of Common Stock
or other securities upon the exercise of any Warrant Certificate until
any such tax shall have been paid, all such tax being payable by the
holder of such Warrant Certificate at the time of surrender.
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12. Notice of Certain Corporate Action. In case the Company after the date
hereof shall propose (a) to offer to the holders of Common Stock,
generally, rights to subscribe to or purchase any additional shares of
any class of its capital stock, any evidences of its indebtedness or
assets, or any other rights or options or (b) to effect any
reclassification of Common Stock (other than a reclassification
involving merely the subdivision or combination of outstanding shares
of Common Stock) or any capital reorganization, or any consolidation or
merger to which the Company is a party and for which approval of any
stockholders of the Company is required, or any sale, transfer or other
disposition of its property and assets substantially as an entirety, or
the liquidation, voluntary or involuntary dissolution or winding-up of
the Company, then, in each such case, the Company shall file with the
Warrant Agent and the Company, or the Warrant Agent on its behalf,
shall mail (by first-class, postage prepaid mail) to all registered
holders of the Warrant Certificates notice of such proposed action,
which notice shall specify the date on which the books of the Company
shall close or a record be taken for such offer of rights or options,
or the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition, liquidation,
voluntary or involuntary dissolution or winding-up shall take place or
commence, as the case may be, and which shall also specify any record
date for determination of holders of Common Stock entitled to vote
thereon or participate therein and shall set forth such facts with
respect thereto as shall be reasonably necessary to indicate any
adjustments in the Exercise Price and the number or kind of shares or
other securities purchasable upon exercise of Warrants which will be
required as a result of such action. Such notice shall be filed and
mailed in the case of any action covered by clause (a) above, at least
ten days prior to the record date for determining holders of the Common
Stock for purposes of such action or, if a record is not to be taken,
the date as of which the holders of shares of Common Stock of record
are to be entitled to such offering; and, in the case of any action
covered by clause (b) above, at least 20 days prior to the earlier of
the date on which such reclassification, reorganization, consolidation,
merger, sale, transfer, other disposition, liquidation, voluntary or
involuntary dissolution or winding-up is expected to become effective
and the date on which it is expected that holders of shares of Common
Stock of record on such date shall be entitled to exchange their shares
for securities or other property deliverable upon such
reclassification, reorganization, consolidation, merger, sale,
transfer, other disposition, liquidation, voluntary or involuntary
dissolution or winding-up.
Failure to give any such notice or any defect therein shall not affect
the legality or validity of any transaction listed in this Section 12.
13. Disposition of Proceeds on Exercise of Warrant Certificate, etc. The
Warrant Agent shall account promptly to the Company with respect to
Warrants exercised and concurrently pay to the Company all moneys
received by the Warrant Agent for the purchase of securities or other
property through the exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement available for
inspection by Warrantholders during normal business hours at its stock
transfer office. Copies of this Agreement may be obtained upon written
request addressed to the Warrant Agent at its stock transfer office in
New York, New York.
12
14. Warrantholder Not Deemed a Stockholder. No Warrantholder, as such,
shall be entitled to vote, receive dividends or be deemed the holder of
Common Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Warrants represented thereby
for any purpose whatever, nor shall anything contained herein or in any
Warrant Certificate be construed to confer upon any Warrantholder, as
such, any of the rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereto, or to give or withhold consent to
any corporate action (whether upon any recapitalization, issuance of
stock, reclassification of stock, change of par value or change of
stock to no par value, consolidation, merger, conveyance or otherwise),
or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 12 hereof), or to receive
dividend or subscription rights, or otherwise, until such Warrant
Certificate shall have been exercised in accordance with the provisions
hereof and the receipt of the Exercise Price and any other amounts
payable upon such exercise by the Warrant Agent.
15. Right of Action. All rights of action in respect to this Agreement are
vested in the respective registered holders of the Warrant
Certificates; and any registered holder of any Warrant Certificate,
without the consent of the Warrant Agent or of any other holder of a
Warrant Certificate, may, in his own behalf for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding
against the Company suitable to enforce, or otherwise in respect of,
his right to exercise the Warrants evidenced by such Warrant
Certificate, for the purchase of shares of the Common Stock in the
manner provided in the Warrant Certificate and in this Agreement.
16. Agreement with Holders of Warrant Certificates. Every holder of a
Warrant Certificate by accepting the same consents and agrees with the
Company, the Warrant Agent and with every other holder of a Warrant
Certificate that:
(a) the Warrant Certificates are transferable on the registry
books of the Warrant Agent only upon the terms and conditions
set forth in this Agreement; and
(b) the Company and the Warrant Agent may deem and treat the
person in whose name the Warrant Certificate is registered as
the absolute owner of the Warrant (notwithstanding any
notation of ownership or other writing thereon made by anyone
other than the Company or the Warrant Agent) for all purposes
whatever and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary.
17. Cancellation of Warrant Certificates. In the event that the Company
shall purchase or otherwise acquire any Warrant Certificate or
Certificates after the issuance thereof, such Warrant Certificate or
Certificates shall thereupon be delivered to the Warrant Agent and be
canceled by it and retired. The Warrant Agent shall also cancel any
Warrant Certificate delivered to it for exercise, in whole or in part,
or delivered to it for transfer, split-up, combination or exchange.
Warrant Certificates so canceled shall be maintained in accordance with
the regulations of the Securities and Exchange Commission.
13
18. Concerning the Warrant Agent. The Company agrees to pay to the Warrant
Agent from time to time, on demand of the Warrant Agent, reasonable
compensation for all services rendered by it hereunder and also its
reasonable expenses, including counsel fees, and other disbursements
incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Warrant Agent for, and to hold it harmless
against, any loss, liability or expense (including the reasonable fees
and expenses of a single counsel to the Warrant Agent), incurred
without gross negligence, bad faith or willful misconduct on the part
of the Warrant Agent, arising out of or in connection with the
acceptance and administration of this Agreement.
19. Merger or Consolidation or Change of Name of Warrant Agent. Any
corporation into which the Warrant Agent may be merged or with which it
may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any
corporation succeeding to the corporate trust business of the Warrant
Agent, shall be the successor to the Warrant Agent hereunder without
the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor warrant agent under the
provisions of Section 21 hereof. In case at the time such successor to
the Warrant Agent shall succeed to the agency created by this
Agreement, any of the Warrant Certificates shall have been
countersigned but not delivered, any such successor to the Warrant
Agent may adopt the countersignature of the original Warrant Agent and
deliver such Warrant Certificates so countersigned; and in case at that
time any of the Warrant Certificates shall not have been countersigned,
any successor to the Warrant Agent may countersign such Warrant
Certificates either in the name of the predecessor Warrant Agent or in
the name of the successor Warrant Agent; and in all such cases such
Warrant Certificates shall have the full force provided in the Warrant
Certificates and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrant Certificates shall have been
countersigned but not delivered, the Warrant Agent may adopt the
countersignature under its prior name and deliver Warrant Certificates
so countersigned; and in case at that time any of the Warrant
Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in
its changed name; and in all such cases such Warrant Certificates shall
have the full force provided in the Warrant Certificates and in this
Agreement.
20. Duties of Warrant Agent. The Warrant Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Warrant
Certificates, by their acceptance thereof, shall be bound:
(a) The Warrant Agent may consult with counsel satisfactory to it
(who may be counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and
protection to the Warrant Agent as to any action taken,
suffered or omitted by it in good faith and in accordance with
such opinion; provided, however, that the Warrant Agent shall
14
have exercised reasonable case in the selection of such
counsel. Fees and expenses of such counsel, to the extent
reasonable, shall be paid by the Company.
(b) Whenever in the performance of its duties under this
Agreement, the Warrant Agent shall deem it necessary or
desirable that any fact or matter be proved or established by
the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be
conclusively proved and established by the Company prior to
taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by a Chairman
or co-Chairman of the Board or the President or a Vice
President or the Secretary of the Company and delivered to the
Warrant Agent; and such certificate shall be full
authorization to the Warrant Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Warrant Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Warrant Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this
Agreement or in the Warrant Certificates (except its
countersignature on the Warrant Certificates and such
statements or recitals as describe the Warrant Agent or action
taken or to be taken by it) or be required to verify the same,
but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the
Warrant Agent) or in respect of the validity or execution of
any Warrant Certificate (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in
any Warrant Certificate; nor shall it be responsible for the
making of any change in the number of shares of Common Stock
for which a Warrant is exercisable required under the
provisions of Section 6 or responsible for the manner, method
or amount of any such change or the ascertaining of the
existence of facts that would require any such adjustment or
change (except with respect to the exercise of Warrant
Certificates after actual notice of any adjustment of the
Exercise Price); nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization
or reservation of any shares of Common Stock to be issued
pursuant to this Agreement or any Warrant Certificate or as to
whether any shares of Common Stock will, when issued, be
validly issued, fully paid and non-assessable.
(f) The Warrant Agent shall be under no obligation to institute
any action, suit or legal proceeding or take any other action
likely to involve expense unless the Company or one or more
15
registered holders of Warrant Certificates shall furnish the
Warrant Agent with reasonable security and indemnity for any
costs and expenses which may be incurred. All rights of action
under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of
the Warrants or the production thereof at any trial or other
proceeding relative thereto, and any such action, suit or
proceeding instituted by the Warrant Agent shall be brought in
its name as Warrant Agent, and any recovery of judgment shall
be for the ratable benefit of the registered holders of the
Warrant Certificates, as their respective rights or interests
may appear.
(g) The Warrant Agent and any stockholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of
the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to or
otherwise act as fully and freely as though it were not
Warrant Agent under this Agreement. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity
for the Company or for any other legal entity.
(h) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties
hereunder from a Chairman or co-Chairman of the Board or
President or a Vice President or the Secretary of the Company,
and to apply to such officers for advice or instructions in
connection with the Warrant Agent's duties, and it shall not
be liable for any action taken or suffered or omitted by it in
good faith in accordance with instructions of any such
officer.
(i) The Warrant Agent will not be responsible for any failure of
the Company to comply with any of the covenants contained in
this Agreement or in the Warrant Certificates to be complied
with by the Company.
(j) The Warrant Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys, agents or
employees and the Warrant Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any
such attorneys, agents or employees or for any loss to the
Company resulting from such neglect or misconduct; provided,
however, that reasonable care shall have been exercised in the
selection and continued employment of such attorneys, agents
and employees.
(k) The Warrant Agent will not incur any liability or
responsibility to the Company or to any holder of any Warrant
Certificate for any action taken, or any failure to take
action, in reliance on any notice, resolution, waiver,
consent, order, certificate or other paper, document or
instrument reasonably believed by the Warrant Agent to be
genuine and to have been signed, sent or presented by the
proper party or parties.
16
(l) The Warrant Agent will act hereunder solely as agent of the
Company in a ministerial capacity, and its duties will be
determined solely by the provisions hereof. The Warrant Agent
will not be liable for anything which it may do or refrain
from doing in connection with this Agreement except for its
own gross negligence, bad faith or willful misconduct.
21. Change of Warrant Agent. The Warrant Agent may resign and be discharged
from its duties under this Agreement upon 30 days' prior notice in
writing mailed, by registered or certified mail, to the Company. The
Company may remove the Warrant Agent or any successor warrant agent
upon 30 days' prior notice in writing, mailed to the Warrant Agent or
successor warrant agent, as the case may be, by registered or certified
mail. If the Warrant Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a
successor to the Warrant Agent and shall, within 15 days following such
appointment, give notice thereof in writing to each registered holder
of the Warrant Certificates. If the Company shall fail to make such
appointment within a period of 15 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent, then the
Company agrees to perform the duties of the Warrant Agent hereunder
until a successor Warrant Agent is appointed. After appointment and
execution of a copy of this Agreement in effect at that time, the
successor Warrant Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as
Warrant Agent without further act or deed; but the former Warrant Agent
shall deliver and transfer to the successor Warrant Agent, within a
reasonable time, any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Failure to give any notice provided for in
this Section, however, or any defect therein shall not affect the
legality or validity of the resignation or removal of the Warrant Agent
or the appointment of the successor warrant agent, as the case may be.
22. Issuance of New Warrant Certificates. Notwithstanding any of the
provisions of this Agreement or the several Warrant Certificates to the
contrary, the Company may, at its option, issue new Warrant
Certificates in such form as may be approved by its Board of Directors
to reflect any adjustment or change in the Exercise Price or the number
or kind of shares purchasable under the several Warrant Certificates
made in accordance with the provisions of this Agreement.
23. Notices. Notice or demand pursuant to this Agreement to be given or
made on the Company by the Warrant Agent or by the registered holder of
any Warrant Certificate shall be sufficiently given or made if sent by
first-class or registered mail, postage prepaid, addressed (until
another address is filed in writing by the Company with the Warrant
Agent) as follows:
Stratus Services Group, Inc.
000 Xxxxx Xxxx, 0xx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Financial Officer
17
Subject to the provisions of Section 21, any notice pursuant to this
Agreement to be given or made by the company or by the holder of any
Warrant Certificate to or on the Warrant Agent shall be sufficiently
given or made if sent by first-class or registered mail, postage
prepaid, addressed (until another address is filed in writing by the
Warrant Agent with the Company) as follows:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Any notice or demand authorized to be given or made to the registered
holder of any Warrant Certificate under this Agreement shall be
sufficiently given or made if sent by first-class or registered mail,
postage prepaid, to the last address of such holder as it shall appear
on the registers maintained by the Warrant Agent.
24. Modification of Agreement. The Warrant Agent may, without the consent
or concurrence of the Warrantholders, by supplemental agreement or
otherwise, concur with the Company in making any changes or corrections
in this Agreement that the Warrant Agent shall have been advised by
counsel (who may be counsel for the Company) are necessary or desirable
to cure any ambiguity or to correct any defective or inconsistent
provision or clerical omission or mistake or manifest error herein
contained, or to make any other provisions in regard to matters or
questions arising hereunder and which shall not be inconsistent with
the provisions of the Warrant Certificates and which shall not
adversely affect the interests of the Warrantholders. As of the date
hereof, this Agreement contains the entire and only agreement,
understanding, representation, condition, warranty or covenant between
the parties hereto with respect to the matters herein, supersedes any
and all other agreements between the parties hereto relating to such
matters, and may be modified or amended only by a written agreement
signed by both parties hereto pursuant to the authority granted by the
first sentence of this Section.
25. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and
inure to the benefit of their respective successors and assigns
hereunder.
26. Delaware Contract. This Agreement and each Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be construed in accordance
with the laws of said State.
27. Termination. This Agreement shall terminate as of the close of business
on the Expiration Date, or such earlier date upon which all Warrants
shall have been exercised or redeemed, except that the Warrant Agent
shall account to the Company as to all Warrants outstanding and all
cash held by it as of the close of business on the Expiration Date. The
provisions of Sections 18 and 20 of this Agreement shall survive the
termination of this Agreement.
18
28. Benefits of this Agreement. Nothing in this Agreement or in the Warrant
Certificates shall be construed to give to any person or corporation
other than the Company, the Warrant Agent, and their respective
successors and assigns hereunder and the registered holders of the
Warrant Certificates any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Warrant Agent, their respective
successors and assigns hereunder and the registered holders of the
Warrant Certificates.
29. Descriptive Headings. The descriptive headings of the several Sections
of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions
hereof.
30. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts
shall together constitute one and the same instrument.
Remainder of page intentionally left blank; signature page follows)
19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
STRATUS SERVICES GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: CEO
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ Xxxxxxx Xxxxx
----------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
20
EXHIBIT A
VOID AFTER 5 P.M. EASTERN TIME ON January 14, 2007
WARRANTS TO PURCHASE COMMON STOCK
__________ Warrants
W - STRATUS SERVICES GROUP, INC.
CUSIP __________
THIS CERTIFIES THAT
or registers assigns, is the registered holder of the number of Warrants
("Warrants") set forth above. Each Warrant, unless and until redeemed by the
Company as provided in the Warrant Agreement, hereinafter more fully described
(the " Warrant Agreement") entitles the holder thereof to purchase from Stratus
Services Group, Inc., a corporation incorporated under the laws of the State of
Delaware ("Company"), subject to the terms and conditions set forth hereinafter
and in the Warrant Agreement, at any time on or after July 14, 2005 and before
the close of business on January 14, 2007 ("Expiration Date"), one fully paid
and non-assessable share of Common Stock, $0.04 par value, of the Company
("Common Stock") upon presentation and surrender of this Warrant Certificate,
with the instructions for the registration and delivery of Common Stock filled
in, at the stock transfer office in New York, New York, of American Stock
Transfer & Trust Company, Warrant Agent of the Company ("Warrant Agent") or of
its successor warrant agent or, if there be no successor warrant agent, at the
corporate offices of the Company, and upon payment of the Exercise Price (as
defined in the Warrant Agreement) and any applicable taxes paid either in cash,
or by certified or official bank check, payable in lawful money of the United
States of America to the order of the Company. Each Warrant initially entitles
the holder to purchase one share of Common Stock for $0.76 (subject to
appropriate adjustments as provided in the Warrant Agreement). The number and
kind of securities or other property for which the Warrants are exercisable are
subject to adjustment in certain events, such as mergers, splits, stock
dividends, splits and the like, to prevent dilution. The Company may redeem any
or all outstanding and unexercised warrants by giving not less than 30 days
prior notice at any time after the last reported sale price of the Common Stock
on the principal exchange on which it is traded has equaled or exceeded $1.33
per share (subject to appropriate adjustments as provided in the Warrant
Agreement) on each of twenty (20) consecutive trading days subsequent to July
14, 2005. The Redemption Price is $0.08 (subject to appropriate adjustments as
provided in the Warrant Agreement) per Warrant. All Warrants not theretofore
exercised will expire on the Expiration Date.
This Warrant Certificate is subject to all of the terms, provisions and
conditions of the Warrant Agreement, dated as of July 14, 2004, between the
Company and the Warrant Agent, to all of which terms, provisions and conditions
the registered holder of this Warrant Certificate consents by acceptance hereof.
The Warrant Agreement is incorporated herein by reference and made a part hereof
and reference is made to the Warrant Agreement for a full description of the
rights, limitations of rights, obligations, duties and immunities of the Warrant
Agent, the Company and the holders of the Warrant Certificates. Copies of the
Warrant Agreement are available for inspection at the stock transfer office of
the Warrant Agent or may be obtained upon written request addressed to the
Company at Stratus Services Group, Inc., 000 Xxxxx Xxxx, 0xx Xxxxx, Xxxxxxxxx,
Xxx Xxxxxx 00000, Attention: Chief Financial Officer.
The Company shall not be required upon the exercise of the Warrants
evidenced by this Warrant Certificate to issue fractions of Warrants, Common
Stock or other securities, but shall make adjustment therefore in cash on the
basis of the current market value of any fractional interest as provided in the
Warrant Agreement.
In certain cases, the sale of securities by the Company upon exercise
of Warrants would violate the securities laws of the United States, certain
states thereof or other jurisdictions. The Company has agreed to use all
commercially reasonable efforts to cause a registration statement to continue to
be effective during the term of the Warrants with respect to such sales under
the Securities Act of 1933, and to take such action under the laws of various
states as may be required to cause the sale of securities upon exercise to be
lawful. However, the Company will not be required to honor the exercise of
Warrants if, in the opinion of the Board of Directors, upon advice of counsel,
the sale of securities upon such exercise would be unlawful. In certain cases,
the Company may, but is not required to, purchase Warrants submitted for
exercise for a cash price equal to the difference between the market price of
the securities obtainable upon such exercise and the exercise price of such
Warrants.
This Warrant Certificate, with or without other Certificates, upon
surrender to the Warrant Agent, any successor warrant agent or, in the absence
of any successor warrant agent, at the corporate offices of the Company, may be
exchanged for another Warrant Certificate or Certificates evidencing in the
aggregate the same number of Warrants as the Warrant Certificate or Certificates
so surrendered. If the Warrants evidenced by this Warrant Certificate shall be
exercised in part, the holder hereof shall be entitled to receive upon surrender
hereof another Warrant Certificate or Certificates evidencing the number of
Warrants not so exercised.
No holder of this Warrant Certificate, as such, shall be entitled to
vote, receive dividends or be deemed the holder of Common Stock or any other
securities of the Company which may at any time be issuable on the exercise
hereof for any purpose whatever, nor shall anything contained in the Warrant
Agreement or herein be construed to confer upon the holder of this Warrant
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof or give or withhold consent to any corporate
action (whether upon any matter submitted to stockholders at any meeting
thereof, or give or withhold consent to any merger, recapitalization, issuance
of stock, reclassification of stock, change of par value or change of stock to
no par value, consolidation, conveyance or otherwise) or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Warrant Agreement) or to receive dividends or subscription rights or otherwise
until the Warrants evidenced by this Warrant Certificate shall have been
exercised and the Common Stock purchasable upon the exercise thereof shall have
become deliverable as provided in the Warrant Agreement.
If this Warrant Certificate shall be surrendered for exercise within
any period during which the transfer books for the Company's Common Stock or
other class of stock purchasable upon the exercise of the Warrants evidenced by
this Warrant Certificate are closed for any purpose, the Company shall not be
2
required to make delivery of certificates for shares purchasable upon such
transfer until the date of the reopening of said transfer books.
Every holder of this Warrant Certificate by accepting the same consents
and agrees with the Company, the Warrant Agent, and with every other holder of a
Warrant Certificate that:
(a) this Warrant Certificate is transferable on the registry books
of the Warrant Agent only upon the terms and conditions set
forth in the Warrant Agreement, and
(b) the Company and the Warrant Agent may deem and treat the
person in whose name this Warrant Certificate is registered as
the absolute owner hereof (notwithstanding any notation of
ownership or other writing thereon made by anyone other than
the Company or the Warrant Agent) for all purposes whatever
and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary. The Company shall not
be required to issue or deliver any certificate for shares of
Common Stock or other securities upon the exercise of Warrants
evidenced by this Warrant Certificate until any tax which may
be payable in respect thereof by the holder of this Warrant
Certificate pursuant to the Warrant Agreement shall have been
paid, such tax being payable the holder of this Warrant
Certificate at the time of surrender.
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
(Remainder of page intentionally left blank; signature page follows)
3
WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.
Dated: _______________
ATTEST: Stratus Services Group, Inc.
By:
------------------------------------ ---------------------------------
Name: Name:
Title: Secretary Title:
Countersigned:
By:
--------------------------------
(Authorized Officer)
4
================================================================================
[TO BE PRINTED ON BACK OF CERTIFICATE]
FORM OF ELECTION TO PURCHASE
The undersigned holder hereby exercises the right to purchase __________ of the
shares of common stock (the "Warrant Shares") of STRATUS SERVICES GROUP, INC., a
Delaware corporation (the "Company"), evidenced by the attached Warrant (the
"Warrant"). Capitalized terms used herein and not otherwise defined have the
respective meanings set forth in the Warrant.
1. Payment of Warrant Exercise Price. The holder has paid in connection
with this exercise the sum of $_________ to the Company in accordance
with the terms of the Warrant.
2. Delivery of Warrant Shares. The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.
Dated: ____________________
----------------------------------
(Name of Registered Holder)
By:
----------------------------------
Name:
Title:
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
__________, Federal Identification No. __________, a warrant to purchase
__________ shares of the common stock of STRATUS SERVICES GROUP, INC., a
Delaware corporation, represented by warrant certificate no. _______, standing
in the name of the undersigned on the books of said corporation. The undersigned
does hereby irrevocably constitute and appoint __________, attorney to transfer
the warrants of said corporation, with full power of substitution in the
premises.
Dated: ____________________
----------------------------------
(Name of Registered Holder)
By:
----------------------------------
Name:
Title:
