Document:

Exhibit 10.6

 

ARKADOS GROUP, INC.

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of May 1, 2017, is entered into by and among Arkados Group, Inc.,
a Delaware corporation (the “Company”), the investors listed on the Schedule of Investors attached hereto and
the investors, if any, party to a joinder agreement with respect hereto (each, an “Investor” and collectively,
the “Investors”), in connection with the Note Purchase Agreement among the Company, the Investors and the Security
Agent (as defined therein) dated May 1, 2017 (the “Note Purchase Agreement”). Capitalized terms not otherwise
defined herein shall have the meaning ascribed to them in the Note Purchase Agreement.

 

WHEREAS:

      

A. In connection with the
Note Purchase Agreement, the Company has agreed, upon the terms and subject to the conditions of the Note Purchase Agreement, to
issue and sell to each Investor (i) senior secured convertible notes of the Company (the “Notes”), which will,
among other things, be convertible into the Company’s common stock, par value $0.0001 per share (the “Common Stock”)
(the shares of Common Stock issuable pursuant to the terms of the Notes, collectively, the “Conversion Shares”)
and (ii) warrants (the “Warrants”) which will be exercisable to purchase shares of Common Stock (as exercised,
collectively, the “Warrant Shares”) in accordance with the terms of the Warrants.

 

B. In accordance with the
terms of the Note Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “1933
Act”), and applicable state securities laws.

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and each of the Investors hereby agree as follows:

 

1. Definitions.

 

Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings set forth in the Note Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:

 

(a) “Additional
Effective Date” means the date the Additional Registration Statement is declared effective by the SEC.

 

(b) “Additional
Effectiveness Deadline” means the date which is (x) seventy-five (75) calendar days after the earlier of the Additional
Filing Date and the Additional Filing Deadline and (y) the fifth (5th) Business
Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Additional Registration
Statement will not be reviewed or will not be subject to further review; provided, however, that if the Additional
Effectiveness Deadline falls on a Saturday, Sunday or other day that the SEC is closed for business, the Additional Effectiveness
Deadline shall be extended to the next Business Day on which the SEC is open for business.

  

(c) “Additional
Filing Date” means the date on which the Additional Registration Statement is filed with the SEC.

 

(d) “Additional
Filing Deadline” means if Cutback Shares are required to be included in any Additional Registration Statement, the later
of (i) the date sixty (60) days after the date substantially all of the Registrable Securities registered under the immediately
preceding Registration Statement are sold and (ii) the date six (6) months from the Initial Effective Date or the most recent Additional
Effective Date, as applicable.

 

    	 	 	 

     

    

 

(e) “Additional
Registrable Securities” means, (i) any Cutback Shares not previously included on a Registration Statement and (ii) any
capital stock of the Company issued or issuable with respect to the Notes, the Conversion Shares, the Warrants, the Warrant Shares,
or the Cutback Shares, as applicable, as a result of any stock split, stock dividend, recapitalization, exchange or similar event
or otherwise, without regard to any limitations on conversion and/or redemption of the Notes or exercise of the Warrants.

 

(f) “Additional
Registration Statement” means a registration statement or registration statements of the Company filed under the 1933
Act covering the resale of any Additional Registrable Securities.

 

(g) “Additional
Required Registration Amount” means (I) any Cutback Shares not previously included on a Registration Statement, all subject
to adjustment as provided in Section 2(f) or (II) such other amount as may be permitted by the staff of the SEC pursuant to Rule
415, in each case without regard to any limitations on conversion and/or redemption of the Notes or exercise of the Warrants.

 

(h) “Business
Day” means any day other than Saturday, Sunday or any other day on which commercial banks in the City of New York are
authorized or required by law to remain closed.

 

(n) “Closing Date”
shall have the meaning set forth in the Note Purchase Agreement.

 

(i) “Cutback Shares”
means any of the Initial Required Registration Amount or the Additional Required Registration Amount (without regard to clause
(II) in the definition thereof) of Registrable Securities not included in all Registration Statements previously declared effective
hereunder as a result of a limitation on the maximum number of shares of Common Stock of the Company permitted to be registered
by the staff of the SEC pursuant to Rule 415. For the purpose of determining the Cutback Shares, in order to determine any applicable
Required Registration Amount, subject to the immediately preceding clause (i), unless an Investor gives written notice to the Company
to the contrary with respect to the allocation of its Cutback Shares, first the Warrant Shares shall be excluded on a pro rata
basis among the Investors until all of the Warrant Shares have been excluded, and second the Conversion Shares shall be excluded
on a pro rata basis among the Investors until all of the Conversion Shares have been excluded.

 

(j) “Effective
Date” means the Initial Effective Date and the Additional Effective Date, as applicable.

 

(k) “Effectiveness
Deadline” means the Initial Effectiveness Deadline and the Additional Effectiveness Deadline, as applicable.

 

(l) “Eligible
Market” means The New York Stock Exchange, Inc., the NYSE MKT LLC, The NASDAQ Capital Market, The NASDAQ Global Select
Market or The NASDAQ Global Market or, on or prior to December 31, 2017, the Principal Market.

 

(m) “Filing Deadline”
means the Initial Filing Deadline and the Additional Filing Deadline, as applicable.

  

(o) “Initial Effective
Date” means the date that the Initial Registration Statement has been declared effective by the SEC.

 

(p) “Initial Effectiveness
Deadline” means the date which is one-hundred twenty (120) calendar days after the Closing Date; provided, however,
that if the Initial Effectiveness Deadline falls on a Saturday, Sunday or other day that the SEC is closed for business, the Initial
Effectiveness Deadline shall be extended to the next Business Day on which the SEC is open for business.

 

(q) “Initial Filing
Date” means the date on which the Initial Registration Statement is filed with the SEC.

 

(r) “Initial Filing
Deadline” means the date which is seventy-five (75) calendar days after the Closing Date.

 

    	 	 	 

     

    

 

(s) “Initial Registrable
Securities” means (i) the Conversion Shares issued or issuable pursuant to the terms of the Notes, (ii) the Warrant Shares
issued or issuable upon exercise of the Warrants and (iii) any capital stock of the Company issued or issuable with respect to
the Notes, the Conversion Shares, the Warrant Shares or the Warrants as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise, in each case without regard to any limitations on conversion and/or redemption of the Notes
or exercise of the Warrants.

 

(t) “Initial Registration
Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering
the resale of the Initial Registrable Securities.

 

(u) “Initial Required
Registration Amount” means (I) the sum of (i) the maximum number of Conversion Shares issued and issuable pursuant to
the Notes and (ii) the maximum number of Warrant Shares issued and issuable pursuant to the Warrants, each as of the Trading Day
immediately preceding the applicable date of determination and all subject to adjustment as provided in Section 2(f), without regard
to any limitations on conversion and/or redemption of the Notes or exercise of the Warrants or (II) such other amount as may be
permitted by the staff of the SEC pursuant to Rule 415.

 

(v) “Investor”
means an Investor or any transferee or assignee thereof to whom an Investor assigns its rights under this Agreement and who agrees
to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee or assignee thereof to whom
a transferee or assignee assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement
in accordance with Section 9.

 

(x) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization
and a government or any department or agency thereof.

 

(y) “Principal
Market” means The OTCQB.

 

(z) “register,”
“registered,” and “registration” refer to a registration effected by preparing and filing
one or more Registration Statements (as defined below) in compliance with the 1933 Act and pursuant to Rule 415, and the declaration
or ordering of effectiveness of such Registration Statement(s) by the SEC.

 

(aa) “Registrable
Securities” means the Initial Registrable Securities and the Additional Registrable Securities.

 

(bb) “Registration
Statement” means the Initial Registration Statement and the Additional Registration Statement, as applicable.

 

(cc) “Required
Holders” means the holders of at least a majority of the Registrable Securities.

 

(dd) “Required
Registration Amount” means either the Initial Required Registration Amount or the Additional Required Registration Amount,
as applicable.

 

(ee) “Rule 415”
means Rule 415 promulgated under the 1933 Act or any successor rule providing for offering securities on a continuous or delayed
basis.

 

(ff) “SEC”
means the United States Securities and Exchange Commission.

  

(hh) “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded.

 

    	 	 	 

     

    

 

2. Registration.

 

(a) Initial Registration.
Promptly following the Closing Date, the Company shall use its reasonable best efforts to prepare, and, as soon as practicable
but in no event later than the Initial Filing Deadline, file with the SEC the Initial Registration Statement on Form S-3 covering
the resale of all of the Initial Registrable Securities. In the event that Form S-3 is unavailable for such a registration, the
Company shall use Form S-1 or such other form as is available for such a registration on another appropriate form reasonably acceptable
to the Required Holders, subject to the provisions of Section 2(e). The Initial Registration Statement prepared pursuant hereto
shall register for resale at least the number of shares of Common Stock equal to the Initial Required Registration Amount determined
as of the date the Initial Registration Statement is initially filed with the SEC, subject to adjustment as provided in Section
2(f). The Initial Registration Statement shall contain (except if otherwise directed by the Required Holders) the “Plan
of Distribution” and “Selling Stockholders” sections in substantially the form attached hereto as
Exhibit B. The Company shall use its reasonable best efforts to have the Initial Registration Statement declared effective
by the SEC as soon as practicable, but in no event later than the Initial Effectiveness Deadline. By 9:30 a.m. New York time on
the second Business Day following the Initial Effective Date, the Company shall file with the SEC in accordance with Rule 424 under
the 1933 Act the final prospectus to be used in connection with sales pursuant to such Initial Registration Statement.
Notwithstanding any of the foregoing obligations, if the Company furnishes to the Security Agent after such request for
registration, a certificate signed by the Company’s Chief Executive Officer stating that in the good faith judgment of the
Company’s Board of Directors it would be materially detrimental to the Company and its stockholders for such Initial Registration
Statement to either become effective or remain effective for as long as such registration statement otherwise would be required
to remain effective, then the Company shall have the right to defer taking action with respect to such filing for a period of not
more than one hundred fifty (150) days after the request of Security Agent is given (such deferral period, the “Initial
Deferral Period”).

 

(b) Additional Registrations.
The Company shall use its reasonable best efforts prepare, and, as soon as practicable but in no event later than the Additional
Filing Deadline, file with the SEC an Additional Registration Statement on Form S-3, provided that form S-3 is available to the
Company for such a registration, covering the resale of all of the Additional Registrable Securities not previously registered
on an Additional Registration Statement hereunder. To the extent the staff of the SEC does not permit the Additional Required Registration
Amount to be registered on an Additional Registration Statement, the Company shall file Additional Registration Statements successively
trying to register on each such Additional Registration Statement the maximum number of remaining Additional Registrable Securities
until the Additional Required Registration Amount has been registered with the SEC. In the event that Form S-3 is unavailable for
such a registration, the Company shall use Form S-1 or such other form as is available for such a registration on another appropriate
form reasonably acceptable to the Required Holders, subject to the provisions of Section 2(e). Each Additional Registration Statement
prepared pursuant hereto shall register for resale at least that number of shares of Common Stock equal to the Additional Required
Registration Amount determined as of the date such Additional Registration Statement is initially filed with the SEC, subject to
adjustment as provided in Section 2(f). Each Additional Registration Statement shall contain (except if otherwise directed by the
Required Holders) the “Plan of Distribution” and “Selling Stockholders” sections in substantially
the form attached hereto as Exhibit B. The Company shall use its reasonable best efforts to have each Additional Registration
Statement declared effective by the SEC as soon as practicable, but in no event later than the Additional Effectiveness Deadline.
By 9:30 a.m. New York time on the second Business Day following the Additional Effective Date, the Company shall file with the
SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Additional
Registration Statement. Notwithstanding any of the foregoing obligations, if the Company furnishes to the Security Agent a certificate
signed by the Company’s Chief Executive Officer stating that in the good faith judgment of the Company’s Board of Directors
it would be materially detrimental to the Company and its stockholders for such Additional Registration Statement to either become
effective or remain effective for as long as such registration statement otherwise would be required to remain effective, then
the Company shall have the right to defer taking action with respect to such filing for a period of not more than one hundred fifty
(150) days after the request of Security Agent is given (such deferral period, the “Additional Deferral Period”
and, together with the Initial Deferral Period, a “Deferral Period”).

 

(c) Allocation of Registrable
Securities. The initial number of Registrable Securities included in any Registration Statement and any increase or decrease
in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based on the number of
Registrable Securities held by each Investor at the time the Registration Statement covering such initial number of Registrable
Securities or increase or decrease thereof is declared effective by the SEC. In the event that an Investor sells or otherwise transfers
any of such Investor’s Registrable Securities, each transferee shall be allocated a pro rata portion of the then remaining
number of Registrable Securities included in such Registration Statement for such transferor. Any shares of Common Stock included
in a Registration Statement and which remain allocated to any Person which ceases to hold any Registrable Securities covered by
such Registration Statement shall be allocated to the remaining Investors, pro rata based on the number of Registrable Securities
then held by such Investors which are covered by such Registration Statement. In no event shall the Company include any securities
other than Registrable Securities on any Registration Statement without the prior written consent of the Required Holders.

 

    	 	 	 

     

    

 

(e) Ineligibility for
Form S-3. In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder,
the Company shall (i) register the resale of the Registrable Securities on Form S-1 or another appropriate form reasonably acceptable
to the Required Holders and (ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available,
provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC.

 

(f) Sufficient Number
of Shares Registered. In the event the number of shares available under a Registration Statement filed pursuant to Section
2(a) or Section 2(b) is insufficient to cover the Required Registration Amount of Registrable Securities required to be covered
by such Registration Statement or an Investor’s allocated portion of the Registrable Securities pursuant to Section 2(c),
the Company shall amend the applicable Registration Statement, or file a new Registration Statement (on the short form available
therefor, if applicable), or both, so as to cover at least the Required Registration Amount as of the Trading Day immediately preceding
the date of the filing of such amendment or new Registration Statement, in each case, as soon as practicable, but in any event
not later than fifteen (15) days after the necessity therefor arises. The Company shall use its reasonable best efforts to cause
such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof. For purposes
of the foregoing provision, the number of shares available under a Registration Statement shall be deemed “insufficient to
cover all of the Registrable Securities” if at any time the number of shares of Common Stock available for resale under the
Registration Statement is less than the Required Registration Amount. The calculation set forth in the foregoing sentence shall
be made without regard to any limitations on the conversion and/or redemption of the Notes or exercise of the Warrants and such
calculation shall assume (i) that the Notes are then convertible in full into shares of Common Stock at the then prevailing Conversion
Rate (as defined in the Notes) (ii) the initial outstanding principal amount of the Notes remains outstanding through the scheduled
Maturity Date (as defined in the Notes) and no redemptions of the Notes occur prior to the scheduled Maturity Date and (iii) the
Warrants are then exercisable in full into shares of Common Stock at the then prevailing Exercise Price (as defined in the Warrants).

 

(g) Effect of Failure
to File and Obtain and Maintain Effectiveness of Registration Statement. If (i) the Initial Registration Statement when declared
effective fails to register the Initial Required Registration Amount of Initial Registrable Securities (a “Registration
Failure”), (ii) a Registration Statement covering all of the Registrable Securities required to be covered thereby and
required to be filed by the Company pursuant to this Agreement is not declared effective by the SEC on or before the applicable
Effectiveness Deadline (subject to any applicable Deferral Period), (an “Effectiveness Failure”) or (iii) on
any day after the applicable Effective Date, sales of all of the Registrable Securities required to be included on such Registration
Statement cannot be made (other than during an Allowable Grace Period or Deferral Period) pursuant to such Registration Statement
or otherwise (including, without limitation, because of the suspension of trading or any other limitation imposed by an Eligible
Market, a failure to keep such Registration Statement effective, a failure to disclose such information as is necessary for sales
to be made pursuant to such Registration Statement, a failure to register a sufficient number of shares of Common Stock or a failure
to maintain the listing of the Common Stock) (a “Maintenance Failure”) then, as partial relief for the damages
to any holder by reason of any such delay in or reduction of its ability to sell the underlying shares of Common Stock (which remedy
shall not be exclusive of any other remedies available at law or in equity, including, without limitation, specific performance
or the additional obligation of the Company to register any Cutback Shares), the Company shall pay to the Security Agent on behalf
each holder of Registrable Securities relating to such Registration Statement an amount in cash equal to one percent (1.0%) of
the aggregate outstanding principal amount of the Notes of such Investor’s Registrable Securities, whether or not included
in such Registration Statement, on each of the following dates: (i) on the thirtieth (30th) day after the date of a
Registration Failure, Effectiveness Failure or Maintenance Failure, as applicable, and every thirtieth (30th) day thereafter
(pro rated for periods totaling less than thirty (30) days) until such Registration Failure, Effectiveness Failure or Maintenance
Failure, as applicable, is cured. The payments to which a holder shall be entitled pursuant to this Section 2(g) are referred to
herein as “Registration Delay Payments.” Registration Delay Payments shall be paid on the earlier of (I) the dates
set forth above and (II) the third Business Day after the event or failure giving rise to the Registration Delay Payments is cured.
Notwithstanding anything to the contrary contained herein, Registration Delay Payments shall (i) not, in the aggregate, exceed
two (2.0%) of the aggregate outstanding principal amount of the Notes and (ii) cease to accrue after the Registration Period (as
defined below).

 

    	 	 	 

     

    

 

3. Related Obligations.
At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2(a), 2(b), 2(e)
or 2(f), the Company will use its reasonable best efforts to effect the registration of the Registrable Securities in accordance
with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:

 

(a) The Company shall promptly
prepare and file with the SEC a Registration Statement with respect to the Registrable Securities and use commercially reasonable
efforts to cause such Registration Statement relating to the Registrable Securities to become effective as soon as practicable
after such filing (but in no event later than the Effectiveness Deadline). The Company shall keep each Registration Statement effective
pursuant to Rule 415 until the earliest of (i) the date as of which the Investors may sell all of the Registrable Securities covered
by such Registration Statement without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance
with Rule 144(c)(1) (or any successor thereto) promulgated under the 1933 Act, (ii) the one year anniversary of the Closing Date,
(iii) the date on which the Investors shall have sold all of the Registrable Securities covered by such Registration Statement,
(iv) the exercise of the Warrants and the conversion of the Notes and (v) the full satisfaction
of all of the Notes (the “Registration Period”). The Company shall ensure that each Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of
prospectuses, in the light of the circumstances in which they were made) not misleading.

 

(b) The Company shall prepare
and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the
prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated
under the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period,
and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities
of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed
of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement.
In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-K, Form 10-Q, Form 8-K or any analogous
report under the Securities Exchange Act of 1934, as amended (the “1934 Act”), the Company shall have incorporated
such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the
SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement
such Registration Statement.

 

(c)

 

(d) The Company shall
furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge, (i) promptly
after the same is prepared and filed with the SEC, at least one copy of such Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, all
exhibits and each preliminary prospectus, and (iii) such other documents, including copies of any preliminary or final prospectus,
as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities
owned by such Investor.

 

    	 	 	 

     

    

 

(e) The Company shall use
its commercially reasonable efforts to (i) register and qualify, unless an exemption from registration and qualification applies,
the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities or “blue
sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions such amendments
(including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain
the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations
and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary
or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not
be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would
not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction,
or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify each Investor who
holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration
or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.

 

(f) The Company shall notify
each Investor in writing of the happening of any event, as promptly as practicable after becoming aware of such event, but in any
event on the same Trading Day as the Company becomes aware of such event, as a result of which the prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any material, nonpublic information), and, subject to Section 3(r),
promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission.. The Company
shall also promptly notify Legal Counsel and each Investor in writing (i) when a prospectus or any prospectus supplement or post-effective
amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification
of such effectiveness shall be delivered to each Investor by facsimile or email on the same day of such effectiveness and by overnight
mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related
information, and (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement
would be appropriate. By 9:30 a.m. New York City time on the date following the date any post-effective amendment has become effective,
the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection
with sales pursuant to such Registration Statement.

 

(g) The Company shall use
its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement,
or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order
or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify each
Investor who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of
actual notice of the initiation or threat of any proceeding for such purpose.

 

(h) If any Investor is
required under applicable securities laws to be described in the Registration Statement as an underwriter, at the reasonable request
of such Investor, the Company shall furnish to such Investor, on the date of the effectiveness of the Registration Statement and
thereafter from time to time on such dates as an Investor may reasonably request (i) a letter, dated such date, from the Company’s
independent certified public accountants in form and substance as is customarily given by independent certified public accountants
to underwriters in an underwritten public offering, addressed to the Investors, and (ii) an opinion, dated as of such date, of
counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given
in an underwritten public offering, addressed to the Investors.

 

(i) If any Investor is
required under applicable securities laws to be described in the Registration Statement as an underwriter the Company shall make
available for inspection by (i) such Investor and (ii) one firm of accountants or other agents retained by the Investors (collectively,
the “Inspectors”), all pertinent financial and other records, and pertinent corporate documents and properties
of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by each Inspector, and
cause the Company’s officers, directors and employees to supply all information which any Inspector may reasonably request;
provided, however, that each Inspector shall agree to hold in strict confidence and shall not make any disclosure (except to an
Investor) or use of any Record or other information which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement
or omission in any Registration Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered
pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (c) the information
in such Records has been made generally available to the public other than by disclosure in violation of this Agreement. Each Investor
agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any
other confidentiality agreement between the Company and any Investor) shall be deemed to limit the Investors’ ability to
sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

 

    	 	 	 

     

    

 

(j) The Company shall hold
in confidence and not make any disclosure of information concerning an Investor provided to the Company unless (i) disclosure of
such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered
pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv)
such information has been made generally available to the public other than by disclosure in violation of this Agreement or any
other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is
sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such
Investor and allow such Investor, at the Investor’s sole cost and expense, to undertake appropriate action to prevent disclosure
of, or to obtain a protective order for, such information.

 

(k) The Company shall use
its best efforts either to (i) cause all of the Registrable Securities covered by a Registration Statement to be listed on each
securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing
of such Registrable Securities is then permitted under the rules of such exchange or (ii) secure the inclusion for quotation of
all of the Registrable Securities on The Principal Market or (iii) if, despite the Company’s best efforts, the Company is
unsuccessful in satisfying the preceding clauses (i) and (ii), to secure the inclusion for quotation on another Eligible Market
for such Registrable Securities and, without limiting the generality of the foregoing, to use its best efforts to arrange for at
least two market makers to register with the Financial Industry Regulatory Authority, Inc. (“FINRA”) as such
with respect to such Registrable Securities. The Company shall pay all fees and expenses in connection with satisfying its obligation
under this Section 3(k).

 

(l) The Company shall cooperate
with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant
to a Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the Investors
may reasonably request and registered in such names as the Investors may request.

 

(m) If requested by an
Investor, the Company shall as soon as practicable (i) incorporate in a prospectus supplement or post-effective amendment such
information as an Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase
price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) make
all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement
if reasonably requested by an Investor holding any Registrable Securities.

 

(n) The Company shall use
its commercially reasonable efforts to cause the Registrable Securities covered by a Registration Statement to be registered with
or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable
Securities.

 

(o) The Company shall make
generally available to its security holders as soon as practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under
the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal quarter next
following the applicable Effective Date of a Registration Statement.

 

    	 	 	 

     

    

 

(p) The Company shall otherwise
use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC in connection with any registration
hereunder.

 

(q) Within two (2) Business
Days after a Registration Statement which covers Registrable Securities is ordered effective by the SEC, the Company shall deliver
to the transfer agent for such Registrable Securities (with copies to the Investors whose Registrable Securities are included in
such Registration Statement) confirmation that such Registration Statement has been declared effective by the SEC in the form attached
hereto as Exhibit A.

 

(r) Notwithstanding anything
to the contrary herein, at any time after the Effective Date, the Company may delay the disclosure of material, non-public information
concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the Company
and its counsel, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required (a “Grace
Period”); provided, that the Company shall promptly (i) notify the Investors in writing of the existence of material,
non-public information giving rise to a Grace Period (provided that in each notice the Company will not disclose the content of
such material, non-public information to the Investors) and the date on which the Grace Period will begin, and (ii) notify the
Investors in writing of the date on which the Grace Period ends; and, provided further, that no Grace Period shall exceed thirty
(30) consecutive Trading Days and during any three hundred sixty five (365) day period such Grace Periods shall not exceed an aggregate
of sixty (60) Trading Days and the first day of any Grace Period must be at least five (5) Trading Days after the last day of any
prior Grace Period (each, an “Allowable Grace Period”). For purposes of determining the length of a Grace Period
above, the Grace Period shall begin on and include the date the Investors receive the notice referred to in clause (i) and shall
end on and include the later of the date the Investors receive the notice referred to in clause (ii) and the date referred to in
such notice. The provisions of Section 3(g) hereof shall not be applicable during the period of any Allowable Grace Period. Upon
expiration of the Grace Period, the Company shall again be bound by the first sentence of Section 3(f) with respect to the information
giving rise thereto unless such material, non-public information is no longer applicable. Notwithstanding anything to the contrary,
the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance
with the terms of the Note Purchase Agreement in connection with any sale of Registrable Securities with respect to which an Investor
has entered into a contract for sale, prior to the Investor’s receipt of the notice of a Grace Period and for which the Investor
has not yet settled.

 

(s) Neither the Company
nor any Subsidiary or affiliate thereof shall identify any Investor as an underwriter in any public disclosure or filing with the
SEC, the Principal Market or any Eligible Market and any Investor being deemed an underwriter by the SEC shall not relieve the
Company of any obligations it has under this Agreement or any other Transaction Document (as defined in the Note Purchase Agreement);
provided, however, that the foregoing shall not prohibit the Company from including the disclosure found in the “Plan
of Distribution” section attached hereto as Exhibit B in the Registration Statement.

 

(t) Neither the Company
nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the
date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights
granted to the Investors in this Agreement or otherwise conflicts with the provisions hereof.

 

4. Obligations of the
Investors.

 

(a) At least five (5) Business
Days prior to the first anticipated Filing Date of a Registration Statement, the Company shall notify each Investor in writing
of the information the Company requires from each such Investor if such Investor elects to have any of such Investor’s Registrable
Securities included in such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete
any registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that such Investor
shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be reasonably required to effect and maintain the effectiveness of
the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company
may reasonably request.

 

    	 	 	 

     

    

 

(b) Each Investor, by such
Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor has notified
the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities from such
Registration Statement.

 

 (c) Each Investor
agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g) or
the first sentence of Section 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant to
any Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of copies of the supplemented
or amended prospectus as contemplated by Section 3(g) or the first sentence of Section 3(f) or receipt of notice that no supplement
or amendment is required. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended
shares of Common Stock to a transferee of an Investor in accordance with the terms of the Note Purchase Agreement in connection
with any sale of Registrable Securities with respect to which an Investor has entered into a contract for sale prior to the Investor’s
receipt of a notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence
of Section 3(f) and for which the Investor has not yet settled.

 

(d) Each Investor covenants
and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it or an exemption therefrom
in connection with sales of Registrable Securities pursuant to the Registration Statement.

 

5. Expenses of Registration.
All reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings
or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees,
printers and accounting fees, and fees and disbursements of counsel for the Company shall be paid by the Company. The Company shall
also reimburse the Investors for the fees and disbursements of one legal counsel to the Investors in connection with registration,
filing or qualification pursuant to Sections 2 and 3 of this Agreement which amount shall be limited to $25,000 for all registrations,
filings or qualifications.

 

6. Indemnification.
In the event any Registrable Securities are included in a Registration Statement under this Agreement:

 

(a) To the fullest extent
permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor, the directors, officers,
partners, members, employees, agents, representatives of, and each Person, if any, who controls any Investor within the meaning
of the 1933 Act or the 1934 Act (each, an “Indemnified Person”), against any losses, claims, damages, liabilities,
judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or
several (collectively, “Claims”), incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or
other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party
thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions
or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing
made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction
in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to state
a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement
or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof
or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under which the statements therein were made, not misleading, (iii) any
violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any
state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant
to a Registration Statement or (iv) any violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, “Violations”). Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly
as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection
with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon
a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified
Person for such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(d);
and (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent
of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9.

 

    	 	 	 

     

    

 

(b) In connection with
any Registration Statement in which an Investor is participating, each such Investor agrees to severally and not jointly indemnify,
hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors,
each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning
of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages to
which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages
arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in
reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection
with such Registration Statement; and, subject to Section 6(c), such Investor shall reimburse the Indemnified Party for any legal
or other expenses reasonably incurred by an Indemnified Party in connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in
Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent
of such Investor, which consent shall not be unreasonably withheld or delayed; provided, further, however, that the Investor shall
be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to
such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer
of the Registrable Securities by the Investors pursuant to Section 9.

 

(c) Promptly after receipt
by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including
any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of
the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses
of not more than one counsel for all such Indemnified Person or Indemnified Party to be paid by the indemnifying party, if, in
the reasonable opinion of counsel retained by the Indemnified Person or Indemnified Party, as applicable, the representation by
such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel
in such proceeding. In the case of an Indemnified Person, legal counsel referred to in the immediately preceding sentence shall
be selected by the Investors holding at least a majority in interest of the Registrable Securities included in the Registration
Statement to which the Claim relates. The Indemnified Party or Indemnified Person shall reasonably cooperate with the indemnifying
party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to
the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such
action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to
the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement
of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which
does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified
Person of a release from all liability in respect to such Claim or litigation and such settlement shall not include any admission
as to fault on the part of the Indemnified Party. Following indemnification as provided for hereunder, the indemnifying party shall
be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in
its ability to defend such action.

 

    	 	 	 

     

    

 

(d) The indemnification
required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense,
as and when bills are received or Indemnified Damages are incurred.

 

(e) The indemnity agreements
contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

 

7. Contribution.
To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees
to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest
extent permitted by law; provided, however, that: (i) no Person involved in the sale of Registrable Securities which Person is
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall
be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation;
and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds received
by such seller from the sale of such Registrable Securities pursuant to such Registration Statement.

 

8. Reports Under the 1934
Act. With a view to making available to the Investors the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the Investors to sell securities
of the Company to the public without registration (“Rule 144”), the Company agrees to:

 

(a) make and keep public
information available, as those terms are understood and defined in Rule 144;

 

(b) file with the SEC in
a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company
remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions
of Rule 144; and

 

(c) furnish to each Investor
so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company, if true, that
it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual
or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.

 

9. Assignment of Registration
Rights. The rights under this Agreement shall be automatically assignable by the Investors
to any transferee of all or any portion of such Investor’s Registrable Securities if: (i) the Investor agrees in writing
with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable
time after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written
notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration
rights are being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such
securities by the transferee or assignee is restricted under the 1933 Act or applicable state securities laws; (iv) at or before
the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees
in writing with the Company to be bound by all of the provisions contained herein; and (v) such transfer shall have been made in
accordance with the applicable requirements of the Note Purchase Agreement.

 

    	 	 	 

     

    

 

10. Amendment of Registration
Rights. Provisions of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent
of the Company and the Required Holders; provided that any such amendment or waiver that complies with the foregoing but that disproportionately,
materially and adversely affects the rights and obligations of any Investor relative to the comparable rights and obligations of
the other Investors shall require the prior written consent of such adversely affected Investor. Any amendment or waiver effected
in accordance with this Section 10 shall be binding upon each Investor and the Company. No such amendment shall be effective to
the extent that it applies to less than all of the holders of the Registrable Securities. No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration
(other than the reimbursement of legal fees) also is offered to all of the parties to this Agreement.

 

11. Miscellaneous.

 

(a) A Person is deemed
to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities. If
the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or election received from such record owner of such Registrable
Securities.

 

(b) Any notices, consents,
waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will
be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); (iii) when sent,
if sent by electronic mail; or (iv) one Business Day after deposit with a nationally recognized overnight delivery service, in
each case properly addressed to the party to receive the same. The addresses, facsimile numbers and email addresses for such communications
shall be:

 

If to the Company:

 

Arkados Group, Inc.

211 Warren Street, Suite 320

Newark, New Jersey 07103

Attention: Terrence DeFranco, CEO and Chairman

Email: tmdefranco@arkadosgroup.com

 

With a copy (for informational
purposes only) to:

 

LKP Global Law, LLP

1901 Avenue of the Stars, Suite 480

Los Angeles, CA 90067

Telephone: (424) 239-1890

Attention: Mark Crone, Esq.

Email: mcrone@lkpgl.com

 

If to the Transfer Agent:

 

VStock Transfer

18 Lafayette Pl, Woodmere, NY 11598

(212) 828-8436

  

If to an Investor, to its address, facsimile
number and/or email address set forth on the Schedule of Investors attached hereto, with copies to such Investor’s representatives
as set forth on the Schedule of Investors, or to such other address, facsimile number and/or email address to the attention of
such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness
of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender’s facsimile machine or email containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C) provided by a courier or overnight courier service
shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively.

 

    	 	 	 

     

    

 

(c) Failure of any party
to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall
not operate as a waiver thereof.

 

(d) All questions concerning
the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State
of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York
or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.
Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New
York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

(e) If any provision of
this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction,
the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent
that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity
of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change,
the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

(f) This Agreement, the
other Transaction Documents (as defined in the Note Purchase Agreement) and the instruments referenced herein and therein constitute
the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement, the other Transaction
Documents and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.

 

(g) Subject to the requirements
of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of
the parties hereto.

 

(h) The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

(i) This Agreement may
be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission
of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

(j) Each party shall do
and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

    	 	 	 

     

    

 

(k) All consents and other
determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise specified in this
Agreement, by the Required Holders, determined as if all of the outstanding Notes then held by the Investors have been converted
for Registrable Securities without regard to any limitations on redemption and/or conversion of the Notes and the outstanding Warrants
then held by Investors have been exercised for Registrable Securities without regard to any limitations on exercise of the Warrants.

 

(l) The language used in
this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction
will be applied against any party.

 

(m) This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.

 

(n) The obligations of
each Investor hereunder are several and not joint with the obligations of any other Investor, and no provision of this Agreement
is intended to confer any obligations on any Investor vis-à-vis any other Investor. Nothing contained herein, and no action
taken by any Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect
to such obligations or the transactions contemplated herein.

  

[Signature Page Follows]

 

    	 	 	 

     

    

 

 

IN WITNESS WHEREOF,
each Investor and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.

 

	 	COMPANY:
	 	 
	 	ARKADOS GROUP, INC.
	 	 	 
	 	By:	/s/ Terrence DeFranco
	 	 	Name: Terrence DeFranco
	 	 	Title: Chief Executive Officer

 

    	 	 	 

     

    

 

 

 

IN WITNESS WHEREOF,
each Investor and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.

 

	 	INVESTORS:
	 	 
	 	AIP GLOBAL MACRO FUND, LP
	 	 	 
	 	By:	/s/ Jay Bala
	 	 	Name: Jay Bala, CFA
	 	 	Title: Portfolio Manager
	 	 	 
	 	AIP GLOBAL MACRO CLASS
	 	 	 
	 	By:	/s/ Jay Bala
	 	 	Name: Jay Bala, CFA
	 	 	Title: Portfolio Manager
	 	 	 
	 	AIP CANADIAN ENHANCED INCOME CLASS
	 	 	 
	 	By:	/s/ Jay Bala
	 	 	Name: Jay Bala, CFA
	 	 	Title: Portfolio Manager

 

    	 	 	 

     

    

 

SCHEDULE OF INVESTORS

 

	Investor	 	Investor Address, Email 

and Facsimile Number	 	Investor’s Representative’s Address,

Email and Facsimile Number
	 	 	 	 	 
	 AIP GLOBAL MACRO FUND, LP	 	AIP Asset Management, Inc.

TD North Tower

77 King Street W, Suite 4140

Toronto, ON M5K1E7

Attn: Jay Bala	 	 
	 	 	 	 	 
	AIP GLOBAL MACRO CLASS	 	AIP Asset Management, Inc.

TD North Tower

77 King Street W, Suite 4140

Toronto, ON M5K1E7

Attn: Jay Bala	 	 
	 	 	 	 	 
	AIP CANADIAN ENHANCED 

INCOME CLASS	 	AIP Asset Management, Inc.

TD North Tower

77 King Street W, Suite 4140

Toronto, ON M5K1E7

Attn: Jay Bala	 	 

 

    	 	 	 

     

    

 

EXHIBIT A

 

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

VStock Transfer

18 Lafayette Pl, Woodmere, NY 11598

(212) 828-8436

 

		Re:	Arkados Group, Inc.

 

Ladies and Gentlemen:

 

[We are][I am] counsel to
Arkados Group, Inc., a Delaware corporation (the “Company”), and have represented the Company in connection
with that certain Note Purchase Agreement, dated as of May 1, 2017 (the “Note Purchase Agreement”), entered
into by and among the Company and the Investors named therein (collectively, the “Holders”) pursuant to which
the Company issued to the Holders senior secured convertible notes (the “Notes”) pursuant to which shares of
the Company’s common stock, par value $0.0001 per share (the “Common Stock”) are issuable thereunder and
warrants exercisable for shares of Common Stock (the “Warrants”). Pursuant to the Note Purchase Agreement, the
Company also has entered into a Registration Rights Agreement with the Holders (the “Registration Rights Agreement”)
pursuant to which the Company agreed, among other things, to register the resale of the Registrable Securities (as defined in the
Registration Rights Agreement), including the shares of Common Stock issuable upon conversion of the Notes and upon exercise of
the Warrants under the Securities Act of 1933, as amended (the “1933 Act”). In connection with the Company’s
obligations under the Registration Rights Agreement, on ____________ ___, the Company filed a Registration Statement on Form S-3
(File No. 333-_____________) (the “Registration Statement”) with the Securities and Exchange Commission (the
“SEC”) relating to the Registrable Securities which names each of the Holders as a selling stockholder thereunder.

 

In connection with the foregoing,
[we][I] advise you that a member of the SEC’s staff has advised [us][me] by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF
EFFECTIVENESS] and [we][I] have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop
order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by,
the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement.

 

This letter shall serve as
our standing instruction to you that the shares of Common Stock are freely transferable by the Holders pursuant to the Registration
Statement. You need not require further letters from us to effect any future legend-free issuance or reissuance of shares of Common
Stock to the Holders as contemplated by the Company’s Irrevocable Transfer Agent Instructions dated [________], [_____].

 

	 	Very truly yours,
	 	 	 
	 	[ISSUER’S COUNSEL]
	 	 	 
	 	By:	 

 

CC:     [ LIST NAMES OF HOLDERS] 

 

    	 	 	 

     

    

 

EXHIBIT B

 

SELLING STOCKHOLDERS

 

The shares of common stock
being offered by the selling stockholders are those issuable to the selling stockholders pursuant to the terms of the convertible
notes and upon exercise of the warrants. For additional information regarding the issuance of those convertible notes and warrants,
see “Private Placement of Convertible Notes and Warrants” above. We are registering the shares of common stock in order
to permit the selling stockholders to offer the shares for resale from time to time. Except for the ownership of the convertible
notes and the warrants issued pursuant to the Note Purchase Agreement, the selling stockholders have not had any material relationship
with us within the past three years.

 

The table below lists the
selling stockholders and other information regarding the beneficial ownership of the shares of common stock by each of the selling
stockholders. The second column lists the number of shares of common stock beneficially owned by each selling stockholder, based
on its ownership of the convertible notes and warrants, as of ________, 2017, assuming conversion of all convertible notes and
exercise of all warrants held by the selling stockholders on that date, without regard to any limitations on conversion, redemption
or exercise.

 

The third column lists
the shares of common stock being offered by this prospectus by the selling stockholders, which includes the shares of common stock
issuable upon conversion of the convertible notes and upon exercise of the warrants held by such selling stockholder. The fourth
column lists the percentage of shares of common stock beneficially owned by such selling stockholder after the completion of the
offering, based on its ownership as of ________, based on ________ shares of common stock outstanding as of ________ and assuming
the sale of all of the shares offered by the selling stockholders pursuant to this prospectus.

 

In accordance with the
terms of a registration rights agreement with the selling stockholders, this prospectus generally covers the resale of at least
the sum of (i) the maximum number of shares of common stock issued and issuable pursuant to the convertible notes as of the trading
day immediately preceding the date the registration statement is initially filed with the SEC, and (ii) the maximum number of shares
of common stock issued and issuable upon exercise of the related warrants as of the trading day immediately preceding the date
the registration statement is initially filed with the SEC. Because the conversion price of the convertible notes and the exercise
price of the warrants may be adjusted, the number of shares that will actually be issued may be more or less than the number of
shares being offered by this prospectus.

 

Under the terms of the
convertible notes and the warrants, a selling stockholder may not convert the convertible notes or exercise the warrants to the
extent such conversion or exercise would cause such selling stockholder, together with its affiliates, to beneficially own a number
of shares of common stock which would exceed 9.99% of our then outstanding shares of common stock following such conversion or
exercise, excluding for purposes of such determination shares of common stock issuable upon conversion of the convertible notes
which have not been converted and upon exercise of the warrants which have not been exercised. The number of shares in the second
column does not reflect this limitation. The selling stockholders may sell all, some or none of their shares in this offering.
See “Plan of Distribution.” 

 

	Name of Selling Stockholder	 	Number of Shares
 of Common Stock 
 Beneficially 
 Owned Prior to 
 Offering(1)	 	 	Maximum 
 Number of Shares 
 of Common Stock 
 to be Sold 
 Pursuant to this 
 Prospectus(2)	 	 	Number of Shares 
 of Common Stock 
 Beneficially 
 Owned After 
 Offering(3)	 	 	Percentage of 
 Shares 
 Beneficially 
 Owned After 
 Offering(3)	 
	[	 	 		 	 	 		 	 	 		 	 	 		 

 

(1) The number of shares
of common stock owned are those “beneficially owned” as determined under the rules of the SEC, including any shares
of common stock as to which the selling stockholder has sole or shared voting or investment power and any shares of common stock
that the selling stockholder has the right to acquire within 60 days of ________ through the exercise of any option, warrant, or
right.

 

    	 	 	 

     

    

 

(2) Includes both the convertible
notes purchased by each selling stockholder in ________ and the shares of common stock issuable upon exercise of the warrants held
by such selling stockholder.

 

(3) Assumes the sale of
all of the shares offered by the selling stockholders pursuant to this prospectus.

 

    	 	 	 

     

    

 

PLAN OF DISTRIBUTION

 

We are registering the
shares of common stock issuable pursuant to the terms of the convertible notes and upon exercise of the warrants to permit the
resale of these shares of common stock by the holders of the convertible notes and warrants from time to time after the date of
this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the shares of common stock.
We will bear all fees and expenses incident to our obligation to register the shares of common stock.

 

The selling stockholders
may sell all or a portion of the shares of common stock beneficially owned by them and offered hereby from time to time directly
or through one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers,
the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares
of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at
varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may
involve crosses or block transactions,

 

		·	on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;

 

		·	in the over-the-counter market;

 

		·	in transactions otherwise than on these exchanges or systems or in the over-the-counter market;

 

		·	through the writing of options, whether such options are listed on an options exchange or otherwise;

 

		·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

		·	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;

 

		·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

		·	an exchange distribution in accordance with the rules of the applicable exchange;

 

		·	privately negotiated transactions;

 

		·	short sales;

 

		·	sales pursuant to Rule 144;

 

		·	broker-dealers may agree with the selling securityholders to sell a specified number of such shares at a stipulated price per
share;

 

		·	a combination of any such methods of sale; and

 

		·	any other method permitted pursuant to applicable law.

 

If the selling stockholders
effect such transactions by selling shares of common stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholders
or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal
(which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales of the shares of common stock or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of
common stock in the course of hedging in positions they assume. The selling stockholders may also sell shares of common stock short
and deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection
with such short sales. The selling stockholders may also loan or pledge shares of common stock to broker-dealers that in turn may
sell such shares.

 

    	 	 	 

     

    

 

The selling stockholders
may pledge or grant a security interest in some or all of the convertible notes, warrants or shares of common stock owned by them
and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares
of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling stockholders to include
the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders
also may transfer and donate the shares of common stock in other circumstances in which case the transferees, donees, pledgees
or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

 

The selling stockholders
and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be “underwriters”
within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer
may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares
of common stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of
shares of common stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents,
any discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts, commissions
or concessions allowed or reallowed or paid to broker-dealers.

 

Under the securities laws
of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers. In
addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for sale
in such state or an exemption from registration or qualification is available and is complied with.

 

There can be no assurance
that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration statement,
of which this prospectus forms a part.

 

The selling stockholders
and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act,
which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholders and any other
participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability
of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the
shares of common stock.

 

We will pay all expenses
of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to be $[ ] in total,
including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities
or “blue sky” laws; provided, however, that a selling stockholder will pay all underwriting discounts and selling commissions,
if any. We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act, in
accordance with the registration rights agreements, or the selling stockholders will be entitled to contribution. We may be indemnified
by the selling stockholders against civil liabilities, including liabilities under the Securities Act, that may arise from any
written information furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the
related registration rights agreement, or we may be entitled to contribution.

 

Once sold under the registration
statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other
than our affiliates.Exhibit 10.7

 

No. 2017-C-O-XX

 

ARKADOS GROUP, INC.

       

COMMON STOCK PURCHASE WARRANT

 

THE WARRANT REPRESENTED BY THIS CERTIFICATE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND IS SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AS SET FORTH IN THIS CERTIFICATE. THIS WARRANT MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT
THAT THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT REGISTRATION UNDER THE ACT.

 

WARRANT CERTIFICATE

 

THIS WARRANT CERTIFICATE
(the "Warrant Certificate") certifies that for value received, ___________________ (the "Holder"), is
the owner of this warrant (the "Warrant"), which entitles the Holder to purchase at any time on or before the Expiration
Date (as defined below) ____________________________________ (_______________) shares (the "Warrant Shares") of fully
paid non-assessable shares of the common stock (the "Common Stock") of ARKADOS GROUP, INC., a Delaware corporation (the
"Company"), at a purchase price per Warrant Share of One Dollar and No Cents ($1.00) (the "Purchase Price"),
in lawful money of the United States of America by bank or certified check, subject to adjustment as hereinafter provided or by
cashless exercise as provided in Section 2(a). This Warrant is issued for services rendered by Holder to Company.

 

		1.	WARRANT; PURCHASE PRICE.

 

This Warrant shall entitle
the Holder to purchase the Warrant Shares at the Purchase Price. The Purchase Price and the number of Warrant Shares evidenced
by this Warrant Certificate are subject to adjustment as provided in Article 6.

 

    	 	 	 

     

    

 

		2.	EXERCISE; EXPIRATION DATE.

 

(a)            This Warrant is
exercisable, at the option of the Holder, at any time after the date of issuance and on or before the Expiration Date (as defined
below) by (i) delivering to the Company written notice of exercise (the "Exercise Notice"), stating the number of Warrant
Shares to be purchased thereby, accompanied by bank or certified check payable to the order of the Company for the Warrant Shares
being purchased or (ii) presentation and surrender of this Warrant to the Company at its principal executive offices with a written
notice of the holder's intention to effect a cashless exercise, including a calculation of the number of shares of Common Stock
to be issued upon such exercise in accordance with the terms hereof (a "Cashless Exercise. In the event of a Cashless Exercise,
in lieu of paying the Exercise Price in cash, the holder shall surrender this Warrant for that number of shares of Common Stock
determined by multiplying the number of Warrant Shares to which it would otherwise be entitled by a fraction, (x) the numerator
of which shall be the difference between the closing market price per share of the Common Stock on the last business day prior
to the date the exercise is delivered to the Company (the “Current Market Price”) and the Purchase Price and (y) the
denominator of which shall be the Current Market Price per share of Common Stock. Within ten (10) business days of the Company's
receipt of the Exercise Notice accompanied by the consideration for the Warrant Shares being purchased, or a Cashless Exercise,
the Company shall instruct its transfer agent to issue and deliver to the Holder a certificate representing the Warrant Shares
being purchased. In the case of exercise for less than all of the Warrant Shares represented by this Warrant Certificate, the Company
shall cancel this Warrant Certificate upon the surrender thereof and shall execute and deliver a new Warrant Certificate for the
balance of such Warrant Shares.

 

(b)            Expiration.
The term "Expiration Date" shall mean 5:00 p.m., New York time, on the third (3rd) anniversary of the date
set forth in the signature block of this Warrant or if such date in the State of New York shall be a holiday or a day on which
banks are authorized to close, then 5:00 p.m., New York time, the next following day which in the State of New York is not a holiday
or a day on which banks are authorized to close.

 

		3.	RESTRICTIONS ON TRANSFER.

 

(a)            Restrictions.
This Warrant, and the Warrant Shares or any other security issuable upon exercise of this Warrant may not be assigned, transferred,
sold, or otherwise disposed of unless (i) there is in effect a registration statement under the Act covering such sale, transfer,
or other disposition or (ii) the Holder furnishes to the Company an opinion of counsel, reasonably acceptable to counsel for the
Company, to the effect that the proposed sale, transfer, or other disposition may be effected without registration under the Act,
as well as such other documentation incident to such sale, transfer, or other disposition as the Company's counsel shall reasonably
request.

 

(b)            Legend. Any
Warrant Shares issued upon the exercise of this Warrant shall bear substantially the following legend:

 

    	 	 2	 

     

    

 

“The shares
represented by this certificate have not been registered under the Securities Act of 1933, as amended. The shares have been acquired
for investment and may not be offered, sold or otherwise transferred in the absence of an effective registration statement and
with respect to the shares or an exemption from the registration requirements of said act that is then applicable to the shares,
as to which a prior opinion of counsel acceptable to the issuer or transfer agent may be required.”

 

		4.	RESERVATION OF SHARES.

 

The Company covenants that
it will at all time reserve and keep available out of its authorized Common Stock, solely for the purpose of issuance upon exercise
of this Warrant, such number of shares of Common Stock as shall then be issuable upon the exercise of this Warrant. The Company
covenants that all shares of Common Stock which shall be issuable upon exercise of this Warrant shall be duly and validly issued
and fully paid and non-assessable and free from all taxes, liens, and charges with respect to the issue thereof.

 

		5.	LOSS OR MUTILATION.

 

If the Holder loses this
Warrant, or if this Warrant is stolen, destroyed or mutilated, the Company shall issue an identical replacement Warrant upon the
Holder's delivery to the Company of a customary agreement to indemnify the Company for any losses resulting from the issuance of
the replacement Warrant.

 

		6.	PROVISIONS REGARDING ADJUSTMENTS TO STOCK.

 

		(a)	Stock Dividends, Subdivisions and Combinations. If at any time the Company shall:

 

(i)            take a record
of the holders of its Common Stock for the purpose of entitling them to receive a dividend payable in, or other distribution of,
additional shares of Common Stock,

 

(ii)           subdivide its outstanding
shares of Common Stock into a larger number of shares of Common Stock, or

 

(iii)          combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock,

 

then (A) the number of shares of Common Stock
for which this Warrant is exercisable into immediately after the occurrence of any such event shall be adjusted to equal the number
of shares of Common Stock which a record holder of the same number of shares of Common Stock for which this Warrant is exercisable
into immediately prior to the occurrence of such event would own or be entitled to receive after the happening of such event, and
(B) the Purchase Price shall be adjusted to equal (x) the current Purchase Price immediately prior to the adjustment multiplied
by the number of shares of Common Stock for which this Warrant is exercisable into immediately prior to the adjustment divided
by (y) the number of shares of Common Stock for which this Warrant is exercisable into immediately after such adjustment.

 

    	 	 3	 

     

    

 

(b)            Certificate as
to Adjustments. Upon the occurrence of each adjustment or readjustment of the Purchase Price, the Company, at its expense,
shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to the Holder
a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment
is based. The Company shall, upon the written request at any time of the Holder, furnish or cause to be furnished to such holder
a like certificate setting forth (i) such adjustments and readjustments, (ii) the Purchase Price at the time in effect for this
Warrant and (iii) the number of shares of Common Stock and the amount, if any, or other property which at the time would be received
upon the exercise of this Warrant.

 

(c)            Notices of Record
Date. In the event of any fixing by the Company of a record date for the holders of any class of securities for the purpose
of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution,
any shares of Common Stock or other securities, or any right to subscribe for, purchase or otherwise acquire, or any option for
the purchase of, any shares of stock of any class or any other securities or property, or to receive any other right, the Company
shall mail to the Holder at least thirty (30) days prior to the date specified therein, a notice specifying the date on which any
such record is to be taken for the purpose of such dividend, distribution or rights, and the amount and character of such dividend,
distribution or right.

 

(d)            Merger, Consolidation,
etc. In case of any capital reorganization or any reclassification of the capital stock of the Company or in case of the consolidation
or merger of the Company with another corporation (or in the case of any sale, transfer, or other disposition to another corporation
of all or substantially all the property, assets, business, and goodwill of the Company), the Holder of this Warrant shall thereafter
be entitled to purchase the kind and amount of shares of capital stock which this Warrant entitled the Holder to purchase immediately
prior to such capital reorganization, reclassification of capital stock, consolidation, merger, sale, transfer, or other disposition;
and in any such case appropriate adjustments shall be made in the application of the provisions of this Section 6 with respect
to rights and interests thereafter of the Holder of this Warrant to the end that the provisions of this Section 6 shall thereafter
be applicable, as near as reasonably may be, in relation to any shares or other property thereafter purchasable upon the exercise
of this Warrant.

 

(e)            Fractional Shares.
No certificate for fractional shares shall be issued upon the exercise of this Warrant, but in lieu thereof the Company shall purchase
any such fractional shares calculated to the nearest cent or round up the fraction to the next whole share.

 

(f)            Rights of the
Holder. The Holder of this Warrant shall not be entitled to any rights of a shareholder of the Company in respect of any Warrant
Shares purchasable upon the exercise hereof until such Warrant Shares have been paid for in full and issued to it. As soon as practicable
after such exercise, the Company shall deliver a certificate or certificates for the number of full shares of Common Stock issuable
upon such exercise, to the person or persons entitled to receive the same.

 

		7.	RepResentations
and Warranties.

 

The Holder, by acceptance
of this Warrant, represents and warrants to, and covenants and agrees with, the Company as follows:

 

    	 	 4	 

     

    

 

(a)            The Warrant is being
acquired for the Holder's own account for investment and not with a view toward resale or distribution of any part thereof, and
the Holder has no present intention of selling, granting any participation in, or otherwise distributing the same.

 

(b)            The Holder is aware
that the Warrant is not registered under the Act or any state securities or blue sky laws and, as a result, substantial restrictions
exist with respect to the transferability of the Warrant and the Warrant Shares to be acquired upon exercise of the Warrant.

 

(c)            The Holder is an
accredited investor as defined in Rule 501(a) of Regulation D under the Act and is a sophisticated investor familiar with the type
of risks inherent in the acquisition of securities such as the Warrant, and its financial position is such that it can afford to
retain the Warrant and the Warrant Shares for an indefinite period of time without realizing any direct or indirect cash return
on this investment.

 

		8.	NO IMPAIRMENT.

 

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 (a) not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the amount payable therefore upon such exercise immediately prior
to such increase in par value, (b) take all such actions as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and non assessable shares of Common Stock upon the exercise of this Warrant, and (c) 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. Upon the request of Holder, the Company will
at any time during the period this Warrant is outstanding acknowledge in writing, in form satisfactory to Holder, the continuing
validity of this Warrant and the obligations of the Company hereunder.

 

		9.	NO REGISTRATION RIGHTS.

 

There are no registration
rights associated with this Warrant or the underlying Warrant Shares when issued.

 

		10.	SUPPLYING INFORMATION.

 

The Company shall cooperate
with Holder and each holder of Warrant Shares in supplying such information pertaining to the Company as may be reasonable necessary
for such Holder and each holder of Warrant Shares to complete and file any information reporting forms presently or hereafter required
by the Securities and Exchange Commission as a condition to the availability of an exemption from the Act for the sale of Warrant
Shares.

 

    	 	 5	 

     

    

 

		11	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.

 

		12	MISCELLANEOUS.

 

(a)            Transfer Taxes;
Expenses. The Holder shall pay any and all underwriters' discounts, brokerage fees, and transfer taxes incident to the sale
or exercise of this Warrant or the sale of the underlying shares issuable hereunder, and shall pay the fees and expenses of any
special attorneys or accountants retained by it.

 

(b)            Successors and
Assigns. Subject to compliance with the provisions of Section 3, this Warrant and the rights evidenced hereby shall inure to
the benefit of and be binding upon the successors of the Company and the successors and 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.

 

(c)            Notice. Any notice or other communication
required or permitted to be given to the Company shall be in writing and shall be delivered by certified mail with return receipt
or delivered in person against receipt, addressed to the Company at 211 Warren Street, Suite 320, Newark, New Jersey 07103.

 

(d)            Governing Law. This Warrant Certificate
shall be governed by, and construed in accordance with, the internal laws of the State of New Jersey, without reference to the
conflicts of laws provisions thereof.

 

IN WITNESS WHEREOF, the Company
has caused this Warrant Certificate to be duly executed as of the date set forth below.

 

	 	Arkados Group, Inc.
	 	 	 	 
	 	By:	/s/ Terrence DeFranco
	 	 	Name:	Terrence DeFranco
	 	 	Title:	CEO

 

Issuance Date: May 1, 2017

 

    	 	 6	 

     

    

 

ARKADOS GROUP, INC.

 

FORM OF EXERCISE OF WARRANT

 

No. 2017-C-O-XX

 

 ̈
The undersigned hereby elects to exercise this Warrant as to _____________ shares of the Common Stock of Arkados Group,
Inc., a Delaware corporation, covered thereby. Enclosed herewith is a bank or certified check in the amount of $_____________ payable
to the Company.

 

Delivery of exercise notice
requiring a payment by check must be by national courier (Fedex, UPS, etc.) to:

Arkados Group,
Inc.

211 Warren Street,
Suite 320,

Newark, NJ 07103

Attn: Terrence
DeFranco

 ̈
The undersigned hereby elects to effect a cashless exercise of this Warrant as to _____________ shares. The Company is authorized
to deduct from the requested number exercised and to issue me that number of shares of its Common Stock determined by the formula
set forth in Section 2(a) of the Warrant.

 

Please note: if the exercise involves a
cashless exercise for the entire amount (i.e. no cash due the Company), please execute this notice in blue ink, scan and email
to the Company’s general counsel via email at generalcounsel@arkadosgroup.com.

 

The shares should be sent to me at the address
provided below.

 

	Date:	 	 	 
	 	 	 	(Signature)

 

	 	Name (Printed):	 

 

	 	Address:	 

 

	 	 
	 	 
	 	Social Security Number (for individual holder) or Employer Identification Number (Tax ID) (for entity):
	 	 
	 	      

 

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