EXHIBIT 4.5
WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER
EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
ADVANCED TECHNOLOGY INDUSTRIES, INC.
COMMON STOCK PURCHASE WARRANT
1. Issuance; Certain Definitions. In consideration of good and valuable
consideration, the receipt of which is hereby acknowledged by ADVANCED
TECHNOLOGY INDUSTRIES, INC., a Delaware corporation (the "Company"), HARBORVIEW
MASTER FUND L.P., or registered assigns (the "Holder") is hereby granted the
right to purchase at any time during the period (the "Exercise Period") from the
date hereof until 5:00 P.M., New York City time, on the second anniversary of
the Effective Date (the "Expiration Date"), 2,142,857 fully paid and
nonassessable shares of the Company's Common Stock (the "Common Stock"), at an
exercise price per share (the "Exercise Price") of $0.10 per share, as such
price may be adjusted as provided herein.
This Warrant is being issued pursuant to the terms of the Securities
Purchase Agreement, dated of even date (the "Securities Purchase Agreement"), to
which the Company and the Holder (or the Holder's predecessor in interest) are
parties. Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Securities Purchase Agreement.
2. Exercise of Warrants.
2.1 General.
(a) This Warrant is exercisable in whole or in part at any time during
the Exercise Period. Such exercise shall be effectuated by submitting to the
Company (either by delivery to the Company or by facsimile transmission as
provided in Section 8 hereof) a completed and duly executed Notice of Exercise
(substantially in the form attached to this Warrant Certificate) as provided in
this paragraph and by delivering to the Company this Warrant Certificate,
together with appropriate payment of the Exercise Price for the shares of Common
Stock purchased (the date all such deliveries are completed, the "Exercise
Date"); provided that the Holder will only be able to exercise this Warrant if
such exercise is exempt from the registration requirements of the Act, as
defined below, (and the Company has received such information as the Company may
reasonable request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Act). The Notice of Exercise shall be executed by the Holder
of this Warrant and shall indicate the number of shares then being purchased
pursuant to such exercise. Upon surrender of this Warrant Certificate, together
with appropriate payment of the Exercise Price for the shares of Common Stock
purchased, the Holder shall be entitled to receive a certificate or certificates
for the shares of Common Stock so purchased. This Warrant shall expire and be of
no force or effect from and after the Expiration Date.
(b) The Holder shall be deemed to be the holder of the shares issuable
to it in accordance with the provisions of this Section 2.1 on the Exercise
Date.
(c) The Holder shall pay the Exercise Price in cash; provided that in
the event that the Registration Statement is not effective on any Exercise Date
subsequent to the one year anniversary of the date hereof (other than during a
Permitted Suspension Period), then the Holder may pay the Exercise Price with
respect to the shares of Common Stock set forth in the Notice of Exercise
delivered in connection with such Exercise Date, pursuant to a cashless exercise
by surrendering this Warrant to the Company together with a notice of cashless
exercise, in which event the Company shall issue to the Holder the number of
Warrant Shares determined as follows:
X = Y (A-B)/A
where:
X = the number of Warrant Shares to be
issued to the Holder.
Y = the number of Warrant Shares with
respect to which this Warrant is being
exercised.
A = the average of the closing sale prices
of the Common Stock for the five (5) Trading
Days immediately prior to (but not
including) the Exercise Date.
B = the Exercise Price.
For purposes of Rule 144 promulgated under the Act, it is intended, understood
and acknowledged that the Warrant Shares issued in a cashless exercise
transaction shall be deemed to have been acquired by the Holder, and the holding
period for the Warrant Shares shall be deemed to have been commenced, on the
issue date. If the Registration Statement has been declared effective on or
before the one year anniversary of the date hereof, and is effective on any
Exercise Date subsequent to the one year anniversary of the date hereof (other
than during a Permitted Suspension Period), the Holder shall not have a right of
cashless exercise, but shall pay the Exercise Price in cash as set forth in
subsection 9(a) above.
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(d) If the Average Price is equal to or greater than $0.50 during any
period of twenty (20) consecutive Trading Day and the Closing Price is equal to
or greater than $0.50 for a least ten (10) Trading Days during such period, then
on the fifteenth (15th) Trading Day following the end of such period, and
delivery of written notice thereof from Company to Holder, the Exercise Price
shall be adjusted to $0.25 (the "Adjusted Exercise Price"), as such price may be
adjusted as provided herein. For purposes of this Section 2.1(d), (i) Average
Price shall be the average closing bid prices of the Common Stock during the
applicable period, as reported by the Reporting Service, or, in the event the
Common Stock is listed on a stock exchange or traded on NASDAQ, the Average
Price shall be such closing prices on such exchange or NASDAQ, as reported in
the Wall Street Journal and (ii) Closing Bid Price shall be the closing bid
price of the Common Stock on the applicable date, as reported by the Reporting
Service, or, in the event the Common Stock is listed on a stock exchange or
traded on NASDAQ, the Closing Bid Price shall be such closing price on such
exchange or NASDAQ, as reported in the Wall Street Journal.
2.2 Limitation on Exercise. Notwithstanding the provisions of this
Warrant, the Securities Purchase Agreement or of the other Transaction
Agreements, in no event (except (i) as specifically provided in this Warrant as
an exception to this provision, (ii) while there is outstanding a tender offer
for any or all of the shares of the Common Stock, or (iii) at the Holder's
option, on at least sixty-five (65) days' advance written notice from the
Holder) shall the Holder be entitled to exercise this Warrant, or shall the
Company have the obligation to issue shares upon such exercise of all or any
portion of this Warrant to the extent that, after such exercise the sum of (1)
the number of shares of Common Stock beneficially owned by the Holder and its
Affiliates (other than shares of Common Stock which may be deemed beneficially
owned through the ownership of the unexercised portion of the Warrants or other
rights to purchase Common Stock or through the ownership of the unconverted
portion of the Debentures or other convertible securities), and (2) the number
of shares of Common Stock issuable upon the exercise of the Warrants with
respect to which the determination of this proviso is being made, would result
in beneficial ownership by the Holder and its Affiliates of more than 4.99% of
the outstanding shares of Common Stock (after taking into account the shares to
be issued to the Holder upon such exercise). For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), except as otherwise provided in clause (1) of such sentence.
The Holder, by its acceptance of this Warrant, further agrees that if the Holder
transfers or assigns any of the Warrants to a party who or which would not be
considered such an Affiliate, such assignment shall be made subject to the
transferee's or assignee's specific agreement to be bound by the provisions of
this Section 2.2 as if such transferee or assignee were the original Holder
hereof.
3. Reservation of Shares. The Company hereby agrees that from the date
hereof to the Expiration Date there shall be reserved for issuance upon exercise
of this Warrant such number of shares of the Common Stock as shall be required
for issuance upon exercise of this Warrant (the "Warrant Shares").
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4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) receipt of reasonably
satisfactory indemnification, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver a new Warrant
of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant
shall thereupon become void.
5. Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this Warrant and
are not enforceable against the Company except to the extent set forth herein.
6. Protection Against Dilution and Other Adjustments.
6.1 Adjustment Mechanism. If an adjustment of the Exercise Price is
required pursuant to Section 6.2, the Holder shall be entitled to purchase such
number of additional shares of Common Stock as will cause the total number of
shares of Common Stock the Holder is entitled to purchase pursuant to this
Warrant, multiplied by the adjusted Exercise Price per share, to equal the
dollar amount of the total number of shares of Common Stock Holder is entitled
to purchase before adjustment multiplied by the total Exercise Price before
adjustment.
6.2 Capital Adjustments. If, at any time while this Warrant remains
outstanding, the Company effectuates a stock split or reverse stock split of the
Common Stock or issues a dividend on the Common Stock consisting of shares of
Common Stock, the Exercise Price, Adjusted Exercise Price and any other amounts
calculated as contemplated hereby shall be equitably adjusted to reflect such
action. By way of illustration, and not in limitation, of the foregoing, (i) if
the Company effectuates a 2:1 split of the Common Stock, thereafter, with
respect to any exercise for which the Company issues shares after the record
date of such split, the Exercise Price, Adjusted Exercise Price and any market
price from a date prior to such split which was used in the calculation of the
Average Price or Closing Bid Price shall be deemed to be one-half of what it had
been immediately prior to such split; (ii) if the Company effectuates a 1:10
reverse split of the Common Stock, thereafter, with respect to any exercise for
which the Company issues shares after the record date of such reverse split, the
Exercise Price, Adjusted Exercise Price and any market price from a date prior
to such split which was used in the calculation of the Average Price or Closing
Bid Price shall be deemed to be ten times what it had been calculated to be
immediately prior to such split; and (iii) if the Company declares a stock
dividend of one share of Common Stock for every 10 shares outstanding,
thereafter, with respect to any exercise for which the Company issues shares
after the record date of such dividend, the Exercise Price, Adjusted Exercise
Price and any market price from a date prior to such split which was used in the
calculation of the Average Price or Closing Bid Price shall be deemed to be such
amount multiplied by a fraction, of which the numerator is the number of shares
(10 in the example) for which a dividend share will be issued and the
denominator is such number of shares plus the dividend share(s) issuable or
issued thereon (11 in the example).
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6.3 Merger, Consolidation, Etc. If, for as long as this Warrant
remains outstanding, the Company enters into a merger (other than where the
Company is the surviving entity) or consolidation with another corporation or
other entity or a sale or transfer of all or substantially all of the assets of
the Company to another person (collectively, a "Sale"), and the holders of the
Common Stock are entitled to receive stock, securities or property in respect of
or in exchange for Common Stock, then as a condition of such Sale, the Company
and any such successor, purchaser or transferee will agree that this Warrant may
thereafter be converted on the terms and subject to the conditions set forth
above into the kind and amount of stock, securities or property receivable upon
such merger, consolidation, sale or transfer by a holder of the number of shares
of Common Stock into which this Warrant might have been converted immediately
before such merger, consolidation, sale or transfer, subject to adjustments
which shall be as nearly equivalent as may be practicable.
6.3 Adjustment for Spin Off. If, for any reason, prior to the exercise
of this Warrant in full, the Company spins off or otherwise divests itself of a
part of its business or operations or disposes all or a part of its assets in a
transaction (the "Spin Off") in which the Company does not receive compensation
for such business, operations or assets, but causes securities of another entity
(the "Spin Off Securities") to be issued to security holders of the Company,
then
(a) the Company shall cause (i) to be reserved Spin Off Securities
equal to the number thereof which would have been issued to the Holder had
all of the Holder's unexercised Warrants outstanding on the record date
(the "Record Date") for determining the amount and number of Spin Off
Securities to be issued to security holders of the Company (the
"Outstanding Warrants") been exercised as of the close of business on the
Trading Day immediately before the Record Date (the "Reserved Spin Off
Shares"), and (ii) to be issued to the Holder on the exercise of all or any
of the Outstanding Warrants, such amount of the Reserved Spin Off Shares
equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of
which (I) the numerator is the amount of the Outstanding Warrants then
being exercised, and (II) the denominator is the amount of the Outstanding
Warrants; and
(b) the Exercise Price on the Outstanding Warrants shall be adjusted
immediately after consummation of the Spin Off by multiplying the Exercise
Price by a fraction (if, but only if, such fraction is less than 1.0), the
numerator of which is the average closing bid price of the Common Stock for
the five (5) Trading Days immediately following the fifth Trading Day after
the Record Date, and the denominator of which is the average Closing Bid
Price of the Common Stock on the five (5) Trading Days immediately
preceding the Record Date; and such adjusted Exercise Price shall be deemed
to be the Exercise Price with respect to the Outstanding Warrants after the
Record Date.
7. Transfer to Comply with the Securities Act; Registration Rights.
7.1 Transfer. This Warrant has not been registered under the
Securities Act of 1933, as amended, (the "Act") and has been issued to the
Holder for investment and not with a view to the distribution of either the
Warrant or the Warrant Shares. Except for transfers to officers, employees and
Affiliates of the Holder, neither this Warrant nor any of the Warrant Shares or
any other security issued or issuable upon exercise of this Warrant may be sold,
transferred, pledged or hypothecated in the absence of an effective registration
statement under the Act relating to such security or an opinion of counsel
satisfactory to the Company that registration is not required under the Act.
Each certificate for the Warrant, the Warrant Shares and any other security
issued or issuable upon exercise of this Warrant shall contain a legend on the
face thereof, in form and substance satisfactory to counsel for the Company,
setting forth the restrictions on transfer contained in this Section.
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7.2 Registration Rights. (a) The Holder shall have registration rights
with respect to the Warrant Shares as set forth in the Securities Purchase
Agreement and the Registration Rights Agreement. The Holder's rights under this
Section 7.2 shall expire at such time as the Holder can sell all of the Warrant
Shares held by such Holder under Rule 144 without volume or other restrictions
or limit.
8. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage pre-paid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission,
or, if mailed, two days after the date of deposit in the United States mails, as
follows:
(i) if to the Company, to:
Advanced Technology Industries, Inc..
000 Xxxxxxx Xxxxxx, #00X
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxxx , Esq.
Ropes & Gray LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
(ii) if to the Holder, to:
Harbor House
Waterfront Drive
Road Town, Tortola
British Virgin Islands
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
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with a copy to:
Xxxxxxx & Xxxxxx LLP, Esqs.
00 Xxxxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopier No. (000) 000-0000
Any party may give notice in accordance with this Section to the other parties
designate to another address or person for receipt of notices hereunder.
9. Supplements and Amendments; Whole Agreement. This Warrant may be amended
or supplemented only by an instrument in writing signed by the Holder and the
Company. This Warrant contains the full understanding of the Holder and the
Company with respect to the subject matter hereof and thereof and there are no
representations, warranties, agreements or understandings other than expressly
contained herein and therein.
10. Governing Law. This Warrant shall be deemed to be a contract made under
the laws of the State of New York for contracts to be wholly performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws. The Company and, by its acceptance of this Warrant, the Holder each
consents to the jurisdiction of the federal courts whose districts encompass any
part of the City of New York or the state courts of the State of New York
sitting in the City of New York in connection with any dispute arising under
this Warrant and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on FORUM NON CONVENIENS, to the
bringing of any such proceeding in such jurisdictions. To the extent determined
by such court, the Company shall reimburse the Holder for any reasonable legal
fees and disbursements incurred by the Holder in enforcement of or protection of
any of its rights under this Warrant.
11. Jury Trial Waiver. The Company and, by its acceptance of this Warrant,
the Holder hereby waive a trial by jury in any action, proceeding or
counterclaim brought by either of the Parties hereto against the other in
respect of any matter arising out or in connection with this Warrant.
12. Descriptive Headings. Descriptive headings of the several Sections of
this Warrant are inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the Company has executed this Warrant as of the ___ day
of December, 2005.
ADVANCED TECHNOLOGY INDUSTRIES, INC.
By:_______________________________________
Title: President
NOTICE OF EXERCISE OF WARRANT
The undersigned hereby irrevocably elects to exercise the right,
represented by the Warrant Certificate dated as of _______________, ____, to
purchase ____________ shares of the Common Stock of ADVANCED TECHNOLOGY
INDUSTRIES, INC., and tenders herewith payment in accordance with Section 1 of
said Common Stock Purchase Warrant.
__ CASH: $___________________________ = (Exercise Price x Exercise Shares)
Payment is being made by:
__ enclosed check
__ wire transfer
__ other
__ CASHLESS EXERCISE
Net number of Warrant Shares to be issued to Holder: _________*
* based on: Current Market Value - (Exercise Price x Exercise Shares)
---------------------------------------------------------
Market Price of Common Stock
where:
Market Price of Common Stock ["MP"] = $_______________
Current Market Value [MP x Exercise Shares] = $_______________
It is the intention of the Holder to comply with the provisions of Section
2.2 of the Warrant regarding certain limits on the Holder's right to exercise
thereunder.
To the extent that, pursuant to the exercise effected hereby, the Holder
would have more shares than permitted under said Section, this notice should be
amended and revised, ab initio, to refer to the exercise which would result in
the issuance of shares consistent with such provision. Any exercise above such
amount is hereby deemed void and revoked.
Please deliver the stock certificate to:
Dated:
[Name of Xxxxxx]
By:____________________________
