STOCK PURCHASE WARRANT
EXHIBIT
4.3
NEITHER
THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY OTHER
APPLICABLE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES
LAWS. NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE
HEREOF MAY BE SOLD, PLEDGED, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED
OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT
OR IN A TRANSACTION THAT IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF
THE
SECURITIES ACT.
No.
WTPB
- ___
To
Purchase____________ Shares of Common Stock of
THIS
CERTIFIES that, for value
received, __________________ (the “Holder”) is entitled, upon
the terms and subject to the conditions hereinafter set forth, at any time
prior
to the close of business on July 15, 2010 (the “Termination Date”),
but not thereafter, to subscribe for and purchase from Arkados Group, Inc.,
a
corporation incorporated in Delaware (the “Company”), up to
____________________________________ (_________) shares (the
“Warrant Shares”) of the common stock, $.0001 par value, of the Company (the
“Common Stock”). The purchase price of one share of Common Stock (the
“Exercise Price”) under this Warrant shall be $0.85. The Exercise
Price and the number of shares for which the Warrant is exercisable shall be
subject to adjustment as provided herein. This Warrant is part of an
authorized class of up to 310,866 Warrants of like tenor authorized by the
Company pursuant to agreements to amend the 6% Convertible Subordinated Notes
due June 30, 2007 or to exchange such Notes for other securities of the
Company.
1. Title
to Warrant. Prior to and subject to compliance with applicable
laws, this Warrant and all rights hereunder are transferable, in whole or in
part, at the office or agency of the Company by the Holder hereof in person
or
by duly authorized attorney, upon surrender of this Warrant together with the
Assignment Form annexed hereto properly endorsed.
2. Authorization
of Shares. The Company covenants that all shares of Common Stock
that may be issued upon the exercise of rights represented by this Warrant
will,
upon exercise of the rights represented by this Warrant, be duly authorized,
validly issued, fully-paid and nonassessable and free from all taxes, liens
and
charges in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
3. Exercise
of Warrant. Except as otherwise expressly provided herein,
exercise of the purchase rights represented by this Warrant may be made at
any
time or times on or before the close of business on the Termination Date by
the
surrender of this Warrant and the
Notice
of
Exercise form annexed hereto duly executed, at the office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to the registered Holder hereof at the address of such Holder appearing
on the books of the Company), and upon payment of the Exercise Price of the
Warrant Shares thereby purchased by wire transfer or certified check, cashier’s
check or money order drawn on a United States bank. The Holder of
this Warrant shall be entitled to receive a certificate for the number of shares
of Common Stock so purchased. If a registration statement for the
resale of the shares of Common Stock issuable upon exercise of this Warrant
has
not been declared effective by the Securities and Exchange Commission by the
first anniversary of the first closing of the offering contemplated by the
Purchase Agreement (and provided further that (a) such registration statement
shall also have been kept current for at least one year after the effective
date
thereof and (b) the Holder of the Warrant shall be entitled to the benefits
of
indemnification and contribution provisions of the Purchase Agreement with
respect to such registration statement, this Warrant may also be exercised
in
whole or in part by means of a “cashless exercise” by means of tendering this
Warrant to the Company together with a written demand to receive the number
of
shares of Common Stock equal in total Market Value (as hereinafter defined)
to
the difference between the total Market Value of the shares of Common Stock
issuable upon such exercise of this Warrant (to the extent exercised) and the
total cash Exercise Price of that part of the Warrant being
exercised. “Market Value” for this purpose shall be the price for the
last trade of the Common Stock as reported by Bloomberg L.P. on the close of
business on the last Trading Day (as such term is defined in the Note issued
pursuant to the Purchase Agreement) preceding the tender of the original
documentation for such cashless exercise. Certificates for shares purchased
hereunder shall be delivered to the Holder hereof within seven (7) Trading
Days
after the date on which this Warrant shall have been exercised as aforesaid.
This Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and Holder or any other person
so designated to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the Warrant has been
exercised by payment to the Company of the Exercise Price (or in the case of
a
cashless exercise, the date the original documents for such cashless exercise
have been received by the Company). If this Warrant shall have been
exercised in part, the Company shall, at the time of delivery of the certificate
or certificates representing Warrant Shares, deliver to Holder a new Warrant
evidencing the rights of Holder to purchase the unpurchased shares of Common
Stock called for by this Warrant; which new Warrant shall in all other respects
be identical with this Warrant.
The
Holder is granted the piggy back
registration rights set forth in the Purchase Agreement, provided such rights
may only be assigned in the manner described in the Securities Purchase
Agreement.
4. No
Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share that Holder would otherwise be
entitled to purchase upon such exercise, the Company shall cause the Transfer
Agent to issue one whole share of Common Stock in respect of such fraction
of a
share of Common Stock.
5. Charges,
Taxes and Expenses. Issuance of certificates for shares of Common
Stock upon the exercise of this Warrant shall be made without charge to the
Holder
2
hereof
for any issue or transfer tax or other incidental expense in respect of the
issuance of such certificate, all of which taxes and expenses shall be paid
by
the Company, and such certificates shall be issued in the name of the Holder
of
this Warrant or in such name or names as may be directed by the Holder of this
Warrant; provided, however, that in the event certificates for shares of Common
Stock are to be issued in a name other than the name of the Holder of this
Warrant, this Warrant when surrendered for exercise shall be accompanied by
the
Assignment Form attached hereto duly executed by the Holder hereof; and the
Company may require, as a condition thereto, the payment of a sum sufficient
to
reimburse it for any transfer tax incidental thereto.
6. Closing
of Books. The Company will not close its shareholder books or
records in any manner that prevents the timely exercise of this
Warrant.
7. Transfer,
Division and Combination. (a) Subject to compliance with any
applicable securities laws, transfer of this Warrant and all rights hereunder,
in whole or in part, shall be registered on the books of the Company to be
maintained for such purpose, upon surrender of this Warrant at the principal
office of the Company, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by Holder or its agent
or attorney, and payment of funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant
or
Warrants in the name of the assignee or assignees and in the denomination or
denominations specified in such instrument of assignment, and shall issue to
the
assignor a new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be cancelled. A Warrant, if properly
assigned, may be exercised by a new Holder for the purchase of shares of Common
Stock without having a new Warrant issued.
(b) This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by Holder or its agent or attorney. Subject to compliance with
Section 7(a), as to any transfer that may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants
in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
(c) The
Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrant or Warrants under this Section 7.
(d) The
Company agrees to maintain, at its aforesaid office, books for the registration
and the registration of transfer of the Warrants.
8. No
Rights as Shareholder until Exercise. This Warrant does not
entitle the Holder hereof to any voting rights or other rights as a shareholder
of the Company prior to the exercise hereof. Upon the surrender of
this Warrant and the payment of the aggregate Exercise Price as contemplated
by
Section 3, the Warrant Shares so purchased shall be and be deemed to be issued
to such Holder as the record owner of such shares as of the close of business
on
the later of the date of such surrender or payment.
3
9. Loss,
Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant certificate
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
(which shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and
dated
as of such cancellation, in lieu of such Warrant or stock
certificate.
10. Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall be a Saturday, Sunday or a legal holiday, then such action may be taken
or
such right may be exercised on the next succeeding day not a Saturday, Sunday
or
legal holiday.
11. Adjustments
of Exercise Price and Number of Warrant Shares.
The
number and kind of securities
purchasable upon the exercise of this Warrant and the Exercise Price shall
be
subject to adjustment from time to time upon the happening of any of the
following.
(a) Reorganization,
Reclassification, Merger, Consolidation or Disposition of
Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or
any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to
or
in lieu of common stock of the successor or acquiring corporation (“Other
Property”), are to be received by or distributed to the holders of Common Stock
of the Company, then Holder shall have the right thereafter to receive, upon
exercise of this Warrant, the number of shares of common stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder
of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume
the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as
may
be deemed appropriate (as determined in good faith by resolution of the Board
of
Directors of the Company) in order to provide for adjustments of shares of
Common Stock for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section
11. For purposes of this Section 11, “common stock of the successor
or acquiring corporation” shall
4
include
stock of such corporation of any class which is not preferred as to dividends
or
assets over any other class of stock of such corporation and which is not
subject to redemption and shall also include any evidences of indebtedness,
shares of stock or other securities which are convertible into or exchangeable
for any such stock, either immediately or upon the arrival of a specified date
or the happening of a specified event and any warrants or other rights to
subscribe for or purchase any such stock. The foregoing provisions of
this Section 11 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of
assets.
12. Voluntary
Adjustment by the Company. The Company may at any time during the
term of this Warrant, reduce the then current Exercise Price to any amount
and
for any period of time deemed appropriate by the Board of Directors of the
Company, except to the extent such action would delay or impair the Holder’s
right to publicly resell the Warrant Shares pursuant to Rule 144 promulgated
under the Securities Act or otherwise.
13. Notice
of Adjustment. Whenever the number of Warrant Shares or number or
kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall
promptly mail by registered or certified mail, return receipt requested, to
the
Holder of this Warrant notice of such adjustment or adjustments setting forth
the number of Warrant Shares (and other securities or property) purchasable
upon
the exercise of this Warrant and the Exercise Price of such Warrant Shares
(and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. Such notice, in the
absence of manifest error, shall be conclusive evidence of the correctness
of
such adjustment.
14. Notice
of Corporate Action. If at any time:
(i) the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right
to
subscribe for or purchase any evidences of its indebtedness, any shares of
stock
of any class or any other securities or property, or to receive any other right,
or
(ii) there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all
or
substantially all the property, assets or business of the Company to, another
corporation or,
(iii) there
shall be a voluntary or involuntary dissolution, liquidation or winding up
of
the Company; then,
in
any one or more of such cases, the Company shall give to Holder (i) at least
10
days’ prior written notice of the date on which a record date shall be selected
for such dividend, distribution or right or for determining rights to vote
in
respect of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, liquidation or winding up, and (ii) in the case
of
any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at least 10
days’
prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also
5
shall
specify (i) the date on which any such record is to be taken for the purpose
of
such dividend, distribution or right, the date on which the holders of Common
Stock shall be entitled to any such dividend, distribution or right, and the
amount and character thereof, and (ii) the date on which any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up is to take place and the
time, if any such time is to be fixed, as of which the holders of Common Stock
shall be entitled to exchange their shares of Common Stock for securities or
other property deliverable upon such disposition, dissolution, liquidation
or
winding up. Each such written notice shall be sufficiently given if
addressed to Holder at the last address of Holder appearing on the books of
the
Company and delivered in accordance with Section 16(d).
15. Authorized
Shares.
(a) The
Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise
of
any purchase rights under this Warrant. The Company further covenants
that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will
take all such reasonable action as may be necessary to assure that such Warrant
Shares may be issued as provided herein without violation of any applicable
law
or regulation, or of any requirements of the Principal Market upon
which the Common Stock may be listed.
(b) The
Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may
be
necessary or appropriate to protect the rights of Holder against
impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the amount payable therefor
upon such exercise immediately prior to such increase in par value, (ii) take
all such action as may be necessary or appropriate in order that the Company
may
validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this Warrant, and (iii) use its best efforts to obtain
all
such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be necessary to enable the Company to perform
its obligations under this Warrant.
(c) Upon
the request of Holder, the Company will at any time during the period this
Warrant is outstanding acknowledge in writing, in form reasonably satisfactory
to Holder, the continuing validity of this Warrant and the obligations of the
Company hereunder.
(d) Before
taking any action pursuant to Section 11 or 12 that would cause an
adjustment reducing the current Exercise Price below the then par value, if
any,
of the shares of Common Stock issuable upon exercise of the Warrants, the
Company shall take any
6
corporate
action that may be necessary in order that the Company may validly and legally
issue fully- paid and nonassessable shares of such Common Stock at such adjusted
Exercise Price.
(e) Before
taking any action that would result in an adjustment in the Exercise Price,
the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
16. Miscellaneous.
(a) Jurisdiction.
This Warrant shall be binding upon any successors or assigns of the
Company. This Warrant shall constitute a contract under the laws of
the State of Delaware without regard to its conflict of law principles or
rules.
(b) Restrictions. The
Holder hereof acknowledges that the Warrant Shares acquired upon the exercise
of
this Warrant, if not registered or exempt from registration, will have
restrictions upon resale imposed by state and Federal securities
laws.
(c) Nonwaiver
and Expenses. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver
of
such right or otherwise prejudice Holder’s rights, powers or remedies;
notwithstanding which all rights hereunder terminate on the Termination
Date. If the Company fails to comply with any provision of
this Warrant, the Company shall pay to Holder such amounts as shall be
sufficient to cover any costs and expenses including, but not limited to,
reasonable attorneys’ fees, including those of appellate proceedings, incurred
by Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder. The
foregoing shall not contribute a limitation on the rights of the Holder in
the
event of the Company’s breach or default of its obligations
hereunder.
(d) Notices. Any
notice, request or other document required or permitted to be given or delivered
to the Holder hereof by the Company shall be delivered in accordance with the
notice provisions of the Purchase Agreement.
(e) Limitation
of Liability. No provision hereof, in the absence of affirmative
action by Holder to purchase shares of Common Stock, and no enumeration herein
of the rights or privileges of Holder hereof, shall give rise to any liability
of Holder for the purchase price of any Common Stock or as a stockholder of
the
Company, whether such liability is asserted by the Company or by creditors
of
the Company.
(f) Remedies. Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by
it
of the provisions of this Warrant and hereby agrees to waive the defense in
any
action for specific performance that a remedy at law would be
adequate.
7
(g) Successors
and Assigns. Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit
of
and be binding upon the successors of the Company and the successors and
permitted assigns of Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant
Shares.
(h) Indemnification. The
Company agrees to indemnify and hold harmless Holder from and against any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, attorneys’ fees, expenses and disbursements of any kind that may
be imposed upon, incurred by or asserted against Holder in any manner relating
to or arising out of any failure by the Company to perform or observe in any
material respect any of its covenants, agreements, undertakings or obligations
set forth in this Warrant; provided, however, that the Company
will not be liable hereunder to the extent that any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, attorneys’
fees, expenses or disbursements are found in a final non-appealable judgment
by
a court to have resulted from Holder’s negligence, bad faith or willful
misconduct in its capacity as a stockholder or warrantholder of the
Company.
(i) Severability. Wherever
possible, each provision of this Warrant shall be interpreted in such manner
as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.
(j) Headings. The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.
IN
WITNESS WHEREOF, the Company has
caused this Warrant to be executed by its officer thereunto duly
authorized.
Dated:
July 12, 2007
|
|
By:
|
/s/ | |
| Name: Xxxxxxx Xxxx-Xxxxx | |||
| Title: Chief Financial Officer | |||
ATTEST:
__________________________
Secretary
8
NOTICE
OF
EXERCISE
(1) The
undersigned hereby elects to purchase ________ shares of Common Stock (the
“Common Stock”) of Arkados Group, Inc., pursuant to the terms of the attached
Warrant, and [ ] tenders herewith payment of the
exercise price in full OR [ ] tenders the Warrant
for cashless exercise, together with all applicable transfer taxes, if
any.
|
(2)
|
Calculation
of cashless exercise value, if
applicable:_________________________
|
___________________________________________________________________________________________________________.
(3) Please
issue a certificate or certificates representing said shares of Common Stock
in
the name of the undersigned or in such other name as is specified
below:
_______________________________
(Name)
_______________________________
(Address)
_______________________________
Dated:
______________________________
Signature
9
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute
this
form
and supply required information.
Do
not
use this form to exercise the Warrant.)
FOR
VALUE RECEIVED, the foregoing
Warrant and all rights evidenced thereby are hereby assigned to
_______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________,
_______
Holder's
Signature: _____________________________
Holder's
Address: _____________________________
_____________________________
Signature
Guaranteed: ___________________________________________
NOTE: The
signature to this Assignment Form must correspond with the name as it appears
on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.
ASSIGNMENT
OF THIS WARRANT AND RELATED RIGHTS MAY ONLY BE MADE IN COMPLIANCE WITH
APPLICABLE LAW AND THE TERMS OF THE SECURITIES PURCHASE AGREEMENT PURSUANT
TO
WHICH THIS WARRANT WAS ISSUED. ANY TRANSFER IN VIOLATION THEREOF
SHALL BE VOID NOT BINDING UPON THE COMPANY.
10
