EXHIBIT 4.16
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION OR
QUALIFICATION REQUIREMENTS OF ALL APPLICABLE STATE SECURITIES LAWS, AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY, SUBJECT TO CERTAIN EXCEPTIONS, A LEGAL OPINION
OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.
ACCESS INTEGRAtED TECHNOLOGIES, INC.
WARRANT
Warrant No. [ ] Date of Original Issuance: June __, 2004
ACCESS INTEGRATED TECHNOLOGIES, Inc., a Delaware corporation (the
"COMPANY"), hereby certifies that, for value received, XXXX CAPITAL PARTNERS,
LLC or its registered assigns (the "HOLDER"), is entitled to purchase from the
Company up to a total of 60,875 shares of Class A Common Stock, $0.001 par value
per share (the "COMMON STOCK"), of the Company (each such share, a "WARRANT
SHARE" and all such shares, the "WARRANT SHARES") at an exercise price equal to
$4.80 per share (as adjusted from time to time as provided in Section 9, the
"EXERCISE PRICE"), at any time and from time to time from and after the date
hereof and through and including June __, 2009 (the "EXPIRATION DATE"), and
subject to the following terms and conditions:
1. DEFINITIONS. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. In addition to the terms defined elsewhere in
this Warrant, the following capitalized terms shall have the following meanings:
(a) "AFFILIATE" shall mean any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with a Person, as such terms are used in and construed under Rule
144.
(b) "BUSINESS DAY" shall mean any day except (i) Saturday, (ii) Sunday
and (iii) any day which shall be a federal legal holiday or a day on which
banking institutions in the State of New York are authorized or required by law
or other governmental action to close.
(c) "CLOSING PRICE" shall mean the price for the last trade of the
Common Stock of the Company quoted on the Trading Market on the Closing Date.
(d) "COMMISSION" shall mean the Securities and Exchange Commission.
(e) "PERSON" shall mean an individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or subdivision
thereof) or other entity of any kind.
(f) "PURCHASE AGREEMENT" shall mean the Securities Purchase Agreement,
dated as of the date hereof, among the Company, Holder and certain other
investors.
(g) "RULE 144" and "RULE 144(k)" shall mean Rule 144 and Rule 144(k),
respectively, promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such
Rule.
(h) "TRADING DAY" shall mean (i) a day on which the Common Stock is
traded on a Trading Market, or (ii) if the Common Stock is not listed on a
Trading Market, a day on which the Common Stock is traded in the
over-the-counter market is quoted in the over-the-counter market as reported by
the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding to its functions of reporting prices); provided, that in the
event that the Common Stock is not listed or quoted as set forth in (i) or (ii)
hereof, then Trading Day shall mean a Business Day.
(i) "TRADING MARKET" means whichever of the New York Stock Exchange, the
American Stock Exchange, the NASDAQ National Market, the NASDAQ SmallCap Market
or OTC Bulletin Board on which the Common Stock is listed or quoted for trading
on the date in question.
2. REGISTRATION OF WARRANT. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the "WARRANT
REGISTER"), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.
3. REGISTRATION OF TRANSFERS. Subject to Section 6, the Company shall
register the transfer of any portion of this Warrant in the Warrant Register,
upon surrender of this Warrant, with the Form of Assignment attached hereto duly
2
completed and signed, and a legal opinion as contemplated by the legend on page
1 of this Warrant, to the Company at its address specified herein. Upon any such
registration or transfer, a new Warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new Warrant, a "NEW WARRANT"),
evidencing the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a holder
of a Warrant.
4. EXERCISE AND DURATION OF WARRANTS.
(a) This Warrant shall be exercisable by the registered Holder in whole
or in part at any time and from time to time on or after the date hereof to and
including the Expiration Date. At 6:30 p.m., New York City time on the
Expiration Date, the portion of this Warrant not exercised prior thereto shall
be and become void and of no value. Except as set forth in Section 4(b), the
Company may not call or redeem all or any portion of this Warrant without the
prior written consent of the Holder.
(b) This warrant may be redeemed by the Company at any time after the
date that is one year from the "Date of Original Issuance" identified on the
front page hereof (the "DATE OF ORIGINAL ISSUANCE"), upon thirty (30) days
advance written notice to Xxxxxx (a "NOTICE OF REDEMPTION"), for a price of
$0.05 per Warrant Share for which this Warrant is then exercisable, provided,
that (i) a registration statement with the Commission is then in effect as to
the Warrant Shares and will be in effect as of a date thirty (30) days from the
date of giving the Notice of Redemption and (ii) for a period of twenty (20)
Trading Days prior to the giving of the Notice of Redemption the Common Stock
has closed at a price of $______ per share (which is two (2) times the Closing
Price) or higher.
5. DELIVERY OF WARRANT SHARES.
(a) To effect exercises hereunder, the Holder shall not be required to
physically surrender this Warrant unless all of the Warrant Shares then
represented by this Warrant are being exercised. Upon delivery of an "Exercise
Notice" in the form attached hereto (an "EXERCISE NOTICE") to the Company
(together with the attached "Warrant Shares Exercise Log") at its address for
notice set forth herein and, if such Holder is not utilizing the cashless
exercise provisions set forth in this Warrant, upon payment of the Exercise
Price multiplied by the number of Warrant Shares that the Holder intends to
purchase hereunder, the Company shall promptly (but in no event later than three
(3) Trading Days after the Date of Exercise (as defined herein)) issue and
deliver to the Holder a certificate for the Warrant Shares issuable upon such
exercise. The certificate evidencing such Warrant Shares shall bear restrictive
legends substantially similar to those imposed on this Warrant, PROVIDED, that
no such legend shall be imposed on any such Warrant Shares (i) following a sale
of such Warrant Shares pursuant to an effective registration statement, (ii)
following a sale of such Warrant Shares pursuant to Rule 144, (iii) while such
Warrant Shares are eligible for sale under Rule 144(k), or (iv) if such a legend
is not required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the Commission). Following
such time as restrictive legends are not required to be placed on certificates
3
representing Warrant Shares, the Company will, no later than three (3) Trading
Days following the delivery by the holder thereof to the Company or the
Company's transfer agent of a certificate representing such Warrant Shares
containing a restrictive legend, deliver or cause to be delivered to such holder
thereof a certificate representing such Warrant Shares that is free from all
restrictive and other legends. The Company shall, upon request of the Holder and
subsequent to the date on which a registration statement covering the resale of
the Warrant Shares has been declared effective by the Commission, use its best
efforts to deliver Warrant Shares hereunder electronically through the
Depository Trust Corporation or another established clearing corporation
performing similar functions, if available, provided, that the Company may, but
will not be required to, change its transfer agent if its current transfer agent
cannot deliver Warrant Shares electronically through the Depository Trust
Corporation. A "DATE OF EXERCISE" means the date on which the Holder shall have
delivered to Company: (i) the Exercise Notice (with the attached Warrant Shares
Exercise Log), appropriately completed and duly signed and (ii) if such Holder
is not utilizing the cashless exercise provisions set forth in this Warrant,
payment in full of the Exercise Price for the number of Warrant Shares so
indicated by the Holder to be purchased.
(b) If by the third (3rd) Trading Day after a Date of Exercise the
Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), then the Holder will have the right to
rescind such exercise.
(c) If by the third (3rd) Trading Day after a Date of Exercise the
Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), and if after such third (3rd) Trading Day and
prior to the receipt of such Warrant Shares, the Holder purchases in a bona fide
arm's length transaction for fair market value (in an open market transaction or
otherwise) shares of Common Stock necessary to deliver in satisfaction of a bona
fide arm's length sale for fair market value by the Holder of the Warrant Shares
which the Holder was entitled to receive upon such exercise (a "BUY-IN"), then
the Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder's total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the Holder's total proceeds from
such sale (after brokerage commissions, if any) of the shares, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or deliver to
the Holder the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations
hereunder. The Holder shall provide the Company written notice and reasonably
detailed documentation indicating the amounts payable to the Holder in respect
of the Buy-In.
(d) The Company's obligations to issue and deliver Warrant Shares in
accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by the Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Company or any violation or
alleged violation of law by the Holder or any other Person, and irrespective of
any other circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with the issuance of Warrant Shares. Nothing
herein shall limit a Xxxxxx's right to pursue any other remedies available to it
4
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company's
failure to timely deliver certificates representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.
6. CHARGES, TAXES AND EXPENSES. Issuance and delivery of certificates for
shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the registration of any
certificates for Warrant Shares or Warrants in a name other than that of the
Holder. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.
7. REPLACEMENT OF WARRANT. If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity (which shall not include a surety bond), if requested.
Applicants for a New Warrant under such circumstances shall also comply with
such other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe. If a New Warrant is requested as
a result of a mutilation of this Warrant, then the Holder shall deliver such
mutilated Warrant to the Company as a condition precedent to the Company's
obligation to issue the New Warrant.
8. RESERVATION OF WARRANT SHARES. The Company covenants that it will at all
times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares which are then issuable and deliverable
upon the exercise of this Warrant, free from preemptive rights or any other
contingent purchase rights of Persons other than the Holder (taking into account
the adjustments and restrictions of Section 9). The Company covenants that all
Warrant Shares so issuable and deliverable shall, upon issuance and the payment
of the applicable Exercise Price in accordance with the terms hereof, be duly
and validly authorized and issued and fully paid and nonassessable.
9. CERTAIN ADJUSTMENTS. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this SECTION 9.
(a) STOCK DIVIDENDS AND SPLITS. If the Company, at any time while this
Warrant is outstanding, (i) pays a stock dividend on its Common Stock or
otherwise makes a distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into
a larger number of shares, or (iii) combines outstanding shares of Common Stock
into a smaller number of shares, then in each such case the Exercise Price shall
5
be multiplied by a fraction of which the numerator shall be the number of shares
of Common Stock outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to clause (i) of this
paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution,
and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall
become effective immediately after the effective date of such subdivision or
combination. If any event requiring an adjustment under this paragraph occurs
during the period that an Exercise Price is calculated hereunder, then the
calculation of such Exercise Price shall be adjusted appropriately to reflect
such event. Simultaneously with any adjustment to the Exercise Price pursuant to
this paragraph (a), the number of Warrant Shares that may be purchased upon
exercise of this Warrant shall be increased or decreased proportionately, so
that after such adjustment the aggregate Exercise Price payable hereunder for
the adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment.
(b) FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is
outstanding, (1) the Company effects any merger or consolidation of the Company
with or into another Person, (2) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (3)
any tender offer or exchange offer (whether by the Company or another Person) is
completed pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (4) the Company
effects any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property (in any such case, a
"FUNDAMENTAL TRANSACTION"), then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the same amount and kind of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise of this Warrant (the "ALTERNATE CONSIDERATION"). For
purposes of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such Fundamental
Transaction. At the Holder's option and request, any successor to the Company or
surviving entity in such Fundamental Transaction shall issue to the Holder a new
warrant substantially in the form of this Warrant and consistent with the
foregoing provisions and evidencing the Holder's right to purchase the Alternate
Consideration for the aggregate Exercise Price (adjusted as provided above, if
necessary) upon exercise thereof. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this paragraph
(b) and insuring that the Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.
6
(c) ADJUSTMENTS TO EXERCISE PRICE FOR CERTAIN DILUTIVE ISSUANCES.
(i) ADJUSTMENTS FOR ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK.
If the Company, at any time after the Date of Original Issuance, shall issue any
Additional Shares of Common Stock (as such term is defined below) at a price per
share less than the Per Unit Purchase Price, or without consideration, then the
applicable Exercise Price in effect immediately prior to such issuance shall
automatically be adjusted to that price (rounded to the nearest cent) determined
by multiplying the applicable Exercise Price then in effect by a fraction, (i)
the numerator of which shall be equal to the sum of (A) the number of shares of
Common Stock outstanding or deemed outstanding pursuant to paragraph (c)(ii)
below (the "FULLY DILUTED OUTSTANDING COMMON STOCK") immediately prior to the
issuance of such Additional Shares of Common Stock plus (B) the number of shares
of Common Stock (rounded to the nearest whole share) which the aggregate
consideration for the total number of such Additional Shares of Common Stock so
issued would purchase at a price per share equal to the applicable Exercise
Price then in effect, and (ii) the denominator of which shall be equal to the
number of shares of Fully Diluted Common Stock plus the number of such
Additional Shares of Common Stock. Simultaneously with any adjustment in the
Exercise Price pursuant to this paragraph (c), the number of Warrant Shares that
may be purchased upon exercise of this Warrant shall be increased or decreased
proportionately, so that after such adjustment the aggregate Exercise Price
payable hereunder for the adjusted number of Warrant Shares shall be the same as
the aggregate Exercise Price in effect immediately prior to such adjustment. The
provisions of this paragraph (c) shall not apply under any of the circumstances
for which an adjustment is provided in paragraphs (a) or (b) above. No
adjustment of the applicable Exercise Price shall be made under this paragraph
(c) upon the issuance of any Additional Shares of Common Stock which are issued
pursuant to any rights, options or warrants (other than as excluded by paragraph
(c)(iii) below) to subscribe for, purchase or otherwise acquire either Common
Stock or Convertible Securities (as such term is defined below) (collectively,
"OPTIONS") or securities (other than as excluded by paragraph (c)(iii) below)
convertible, either directly or indirectly, into or exchangeable for Common
Stock ("CONVERTIBLE SECURITIES"), if upon the issuance of such Options or
Convertible Securities (x) any adjustment shall have been made pursuant to
paragraph (c)(iii)(B) below or (y) no adjustment was required pursuant to this
paragraph (c)(i). No adjustment of the applicable Exercise Price shall be made
under this paragraph (c)(i) in an amount less than $.01 per share, but any such
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment, if any, which together with any
adjustments so carried forward shall amount to $.01 per share or more; provided,
that upon any adjustment of the applicable Exercise Price as a result of any
dividend or distribution payable in Common Stock or Convertible Securities or
the reclassification, subdivision or combination of Common Stock into a greater
or smaller number of shares, the foregoing figure of $.01 per share (or such
figure as last adjusted) shall be adjusted (to the nearest one-half cent) in
proportion to the adjustment in the applicable Exercise Price.
(ii) DEEMED ISSUANCES OF COMMON STOCK. In the case of the issuance
(whether before, on or after the Date of Original Issuance) of Options or
Convertible Securities, the following provisions shall apply for all purposes of
this paragraph (c):
7
(A) The aggregate maximum number of shares of Common Stock
deliverable upon exercise (assuming the satisfaction of any conditions to
exercisability, including without limitation, the passage of time, but without
taking into account potential antidilution adjustments) of such Options shall be
deemed to have been issued at the time such Options were issued and for a
consideration equal to the consideration (determined in the manner provided in
paragraph (c)(iv) below), if any, received by the Company upon the issuance of
such Options (without taking into account potential antidilution adjustments)
plus the minimum exercise price provided in such Options for the Common Stock
covered thereby.
(B) The aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange for (assuming the satisfaction of
any conditions to exercisability, including without limitation, the passage of
time, but without taking into account potential antidilution adjustments) any
such Convertible Securities or upon the exercise of Options therefor and
subsequent conversion or exchange thereof shall be deemed to have been issued at
the time such Convertible Securities were issued or such Options were issued and
for a consideration equal to the consideration, if any, received by the Company
for any such Convertible Securities or related Options (excluding any cash
received on account of accrued interest or accrued dividends), plus the minimum
additional consideration, if any, to be received by the Company (without taking
into account potential antidilution adjustments) upon the conversion or exchange
of such Convertible Securities or the exercise of any related Options (the
consideration in each case to be determined in the manner provided in paragraph
(c)(iv) below).
(C) In the event of any change in the number of shares of
Common Stock deliverable or in the consideration payable to the Company upon
exercise of such Options or upon conversion of or in exchange for such
Convertible Securities, including, but not limited to, a change resulting from
the antidilution provisions thereof, the Exercise Price, to the extent in any
way affected by or computed using such Options or Convertible Securities, shall
be recomputed to reflect such change, but no further adjustment shall be made
for the actual issuance of Common Stock or any payment of such consideration
upon the exercise of any such Options or the conversion or exchange of such
Convertible Securities.
(D) Upon the expiration of such Options, the termination of any
such rights to convert or exchange or the expiration of any Options related to
such Convertible Securities, the Exercise Price shall, to the extent in any way
affected by or computed using such Options or Convertible Securities or Options
related to such Convertible Securities, be recomputed to reflect the issuance of
only the number of shares of Common Stock (and Convertible Securities which
remain in effect) actually issued upon the exercise of such Options, upon the
conversion or exchange of such Convertible Securities or upon the exercise of
the Options related to such Convertible Securities.
(E) The number of shares of Common Stock deemed issued and the
consideration deemed paid therefor pursuant to paragraphs (c)(ii)(A) and
(c)(ii)(B) above shall be appropriately adjusted to reflect any change,
termination or expiration of the type described in paragraphs (c)(ii)(C) and
(c)(ii)(D) above.
(iii) DEFINITION OF ADDITIONAL SHARES OF COMMON STOCK. As used
herein, the term "ADDITIONAL SHARES OF COMMON STOCK" shall mean all shares of
8
Common Stock issued (or deemed to be issued) by the Company after the Date of
Original Issuance, other than shares of Common Stock issued (or deemed to be
issued):
(A) to employees, consultants or directors pursuant to stock
option, stock grant, stock purchase or similar plans or arrangements approved by
the Company's Board of Directors;
(B) as a dividend or other distribution in connection with
which an adjustment to the Warrant Exercise Price is made;
(C) in a merger, consolidation, acquisition or similar business
combination that is approved by the Company's Board of Directors;
(D) in exchange for technology or other non-cash assets as
approved by the Company's Board of Directors;
(E) pursuant to any rights or agreements outstanding on the
Date of Original Issuance;
(F) to Persons with which the Company has business or banking
relationships, provided that such issuance is approved by the Company's Board of
Directors and is not primarily for capital raising purposes; or
(G) if the Holder agrees in writing that such shares shall not
constitute Additional Shares of Common Stock.
(iv) DETERMINATION OF CONSIDERATION. For purposes of this paragraph
(c) the consideration received by the Company for any Additional Shares of
Common Stock issued (or deemed to be issued) shall be computed as follows:
(A) CASH AND PROPERTY. Such consideration shall:
(1) insofar as it consists of cash, be computed at the
aggregate amount of cash received by the Company;
(2) insofar as it consists of securities and the value of
such securities is not determinable by reference to a separate agreement, (A) if
the securities are then traded on a Trading Market, then the value shall be
computed based on the average of the closing prices of the securities on such
Trading Market over the thirty (30)-day period ending on the date of receipt by
the Company, (B) if the securities are actively traded over-the-counter, then
the value shall be computed based on the average of the closing bid prices over
the thirty (30) day ending on the date of receipt by the Company, and (C) if
there is no active public market, then the value shall be computed based on the
fair market value thereof on the date of receipt by the Company, as determined
in good faith by the Board of Directors;
(3) insofar as it consists of property other than cash and
securities, be computed at the fair market value thereof at the time of such
issuance, as determined in good faith by the Board of Directors; and
9
(4) if Additional Shares of Common Stock are issued (or
deemed to be issued) together with other shares or securities or other assets of
the Company for consideration which cover both, by the proportion of such
consideration so received, computed as provided in the immediately preceding
paragraphs (1), (2) and (3), as determined in good faith by the Board of
Directors; and
(B) OPTIONS AND CONVERTIBLE SECURITIES. The consideration
received by the Company for Additional Shares of Common Stock deemed to have
been issued pursuant to this paragraph (c) relating to Option and Convertible
Securities, shall be the sum of (x) the total amount, if any, received or
receivable by the Company as consideration for the issue of such Options or
Convertible Securities, plus (y) the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the Company upon the exercise of such Options or the
conversion or exchange of such Convertible Securities, or in the case of Options
for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities.
(v) NO INCREASE IN EXERCISE PRICE. Notwithstanding any other
provisions of this paragraph (c), except to the limited extent provided for in
paragraphs (c)(ii)(D) and (c)(ii)(E) above, no adjustment of the Exercise Price
pursuant to this paragraph (c) shall have the effect of increasing the Exercise
Price above the Exercise Price in effect immediately prior to such adjustment.
(vi) LIMITATION ON DECREASE IN EXERCISE PRICE. Notwithstanding any
other provisions of this paragraph (c), no adjustment of the Exercise Price
pursuant to this paragraph (c) shall have the effect of reducing the Exercise
Price in effect immediately prior to such adjustment below $________ (the "Floor
Price"), which was the price for the last trade of the Common Stock of the
Company quoted on the Trading Market on June 2, 2004.
(d) CALCULATIONS. All calculations under this Section 9 shall be made to
the nearest cent or the nearest 1/100th of a share, as applicable. The number of
shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common Stock.
(e) NOTICE OF ADJUSTMENTS. Upon the occurrence of each adjustment
pursuant to this Section 9, the Company at its expense will promptly compute
such adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment, including a statement of the adjusted
Exercise Price and adjusted number or type of Warrant Shares or other securities
issuable upon exercise of this Warrant (as applicable), describing the
transactions giving rise to such adjustments and showing in detail the facts
upon which such adjustment is based. Upon written request, the Company will
promptly deliver a copy of each such certificate to the Holder and to the
Company's transfer agent.
(f) NOTICE OF CORPORATE EVENTS. If the Company (i) declares a dividend
or any other distribution of cash, securities or other property in respect of
its Common Stock, including without limitation any granting of rights or
warrants to subscribe for or purchase any capital stock of the Company or any
subsidiary, (ii) authorizes or approves, enters into any agreement contemplating
or solicits stockholder approval for any Fundamental Transaction or (iii)
authorizes the voluntary dissolution, liquidation or winding up of the affairs
of the Company, then the Company shall deliver to the Holder a notice describing
the material terms and conditions of such transaction, at least twenty (20)
calendar days prior to the applicable record or effective date on which a Person
would need to hold Common Stock in order to participate in or vote with respect
10
to such transaction, and the Company will take all steps reasonably necessary in
order to insure that the Holder is given the practical opportunity to exercise
this Warrant prior to such time so as to participate in or vote with respect to
such transaction; provided, however, that the failure to deliver such notice or
any defect therein shall not affect the validity of the corporate action
required to be described in such notice. Notwithstanding the foregoing, the
delivery of the notice described in this Section 9(f) is not intended to and
shall not bestow upon the Holder any voting rights whatsoever.
10. PAYMENT OF EXERCISE PRICE. The Holder may pay the Exercise Price in one
of the following manners:
(a) CASH EXERCISE. The Holder may deliver immediately available funds;
or
(b) CASHLESS EXERCISE. The Holder may notify the Company in an Exercise
Notice of its election to utilize 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 prices for the five Trading
Days immediately prior to (but not including) the Date of
Exercise.
B = the Exercise Price.
For purposes of Rule 144 promulgated under the Securities 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 commenced, on
the date this Warrant was originally issued.
11. LIMITATIONS ON EXERCISE. Notwithstanding anything to the contrary
contained herein, the number of shares of Common Stock that may be acquired by
the Holder upon any exercise of this Warrant (or otherwise in respect hereof)
shall be limited to the extent necessary to insure that, following such exercise
(or other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its Affiliates and any other Persons whose
beneficial ownership of Common Stock would be aggregated with the Holder's for
purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), does not exceed 9.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. This provision shall
11
not restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of a Fundamental
Transaction as contemplated in Section 9 of this Warrant. This restriction may
not be waived.
12. NO FRACTIONAL SHARES. No fractional shares of Warrant Shares will be
issued in connection with any exercise of this Warrant. In lieu of any
fractional shares which would otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the closing price of one
Warrant Share as reported by the applicable Trading Market on the date of
exercise.
13. NO SHAREHOLDER RIGHTS. The Holder of this Warrant shall not have,
solely on account of such status, any rights of a stockholder of the Company,
either at law or in equity, or to any notice of meetings of shareholders or of
any other proceedings of the Company, except as provided in this Warrant.
Without limiting the generality of the foregoing, and except as otherwise
provided herein, no dividends shall accrue to the Warrant Shares underlying this
Warrant until the exercise hereof and the purchase of the underlying Warrant
Shares, at which point dividends shall begin to accrue with respect to such
purchased Warrant Shares from and after the date such Warrant Shares are so
purchased.
14. NOTICES. Any and all notices or other communications or deliveries
hereunder (including, without limitation, any Exercise Notice) shall be in
writing and shall be deemed given and effective on the earliest of (i) the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or
later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading
Day following the date of mailing, if sent by nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The addresses for such communications shall be: (x) if to
the Company, to ACCESS INTEGRATED TECHNOLOGIES, INC., Attn: Chief Executive
Officer, Facsimile No.: (000) 000-0000, or (y) if to the Holder, to the address
or facsimile number appearing on the Warrant Register or such other address or
facsimile number as the Holder may provide to the Company in accordance with
this Section.
15. WARRANT AGENT. The Company shall serve as warrant agent under this
Warrant. Upon 30 days' notice to the Holder, the Company may appoint a new
warrant agent. Any corporation into which the Company or any new warrant agent
may be merged or any corporation resulting from any consolidation to which the
Company or any new warrant agent shall be a party or any corporation to which
the Company or any new warrant agent transfers substantially all of its
corporate trust or shareholders services business shall be a successor warrant
agent under this Warrant without any further act. Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder's last
address as shown on the Warrant Register.
12
16. MISCELLANEOUS.
(a) This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns. Subject to the
preceding sentence, nothing in this Warrant shall be construed to give to any
Person other than the Company and the Holder any legal or equitable right,
remedy or cause of action under this Warrant. This Warrant may be amended only
in writing signed by the Company and the Holder and their successors and
assigns.
(b) All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of this
Warrant and the transactions herein contemplated ("PROCEEDINGS") (whether
brought against a party hereto or its respective Affiliates, employees or
agents) may be commenced non-exclusively in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the "NEW YORK COURTS"), although
depositions may be taken in other locations. Each party hereto hereby
irrevocably submits to the non-exclusive jurisdiction of the New York Courts 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 Proceeding, any claim that it is not
personally subject to the jurisdiction of any New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Warrant 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 hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or
relating to this Warrant or the transactions contemplated hereby. If either
party shall commence a Proceeding to enforce any provisions of this Warrant,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its attorney's fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.
(c) The headings herein are for convenience only, do not constitute a
part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.
(d) In case any one or more of the provisions of this Warrant shall be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Warrant shall not in any way be affected
or impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
[REMAINDER OF XXXX INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
13
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by its authorized officer as of the date first indicated above.
ACCESS INTEGRATED TECHNOLOGIES,
INC.
By:
----------------------------
Name:
Title:
14
ACCESS INTEGRATED TECHNOLOGIES, INC.
WARRANT ORIGINALLY ISSUED June __, 2004
WARRANT NO. [ ]
EXERCISE NOTICE
To ACCESS INTEGRATED TECHNOLOGIES, INC.:
The undersigned hereby irrevocably elects to purchase _____________ shares
of Class A Common Stock pursuant to the above captioned Warrant, and, if such
Holder is not utilizing the cashless exercise provisions set forth in the
Warrant, encloses herewith $________ in cash, certified or official bank check
or checks or other immediately available funds, which sum represents the
aggregate Exercise Price (as defined in the Warrant) for the number of shares of
Common Stock to which this Exercise Notice relates, together with any applicable
taxes payable by the undersigned pursuant to the Warrant.
By its delivery of this Exercise Notice, the undersigned represents and
warrants to the Company that in giving effect to the exercise evidenced hereby
the Holder will not beneficially own in excess of the number of shares of Common
Stock (determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934) permitted to be owned under Section 11 of this Warrant to which
this notice relates.
The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
(Please print name and address)
WARRANT SHARES EXERCISE LOG
Date Number of Warrant Number of Warrant Shares Number of Warrant
Shares Available to Exercised Shares Remaining
be Exercised to be Exercised
-------------- --------------------- ------------------------- -----------------
ACCESS INTEGRATED TECHNOLOGIES, INC.
WARRANT ORIGINALLY ISSUED JUNE __, 2004
WARRANT NO. [ ]
FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the
above-captioned Warrant to purchase ____________ shares of Class A Common Stock
to which such Warrant relates and appoints ________________ attorney to transfer
said right on the books of the Company with full power of substitution in the
premises.
Dated: _______________, ____
---------------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant)
---------------------------------------
Address of Transferee
---------------------------------------
---------------------------------------
In the presence of:
--------------------------
