Exhibit 4.20
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), 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 A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
To Purchase __________ Shares of Class A Common Stock of
ACCESS INTEGRATED TECHNOLOGIES, INC.
THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") certifies that, for
value received, _____________ (the "Holder"), is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after the seven month anniversary of the Closing Date (the
"Initial Exercise Date") and on or prior to the close of business on [______ ]
year anniversary of the Initial Exercise Date (the "Termination Date") but not
thereafter, to subscribe for and purchase from Access Integrated Technologies,
Inc., a Delaware corporation (the "Company"), up to ______ shares (the "Warrant
Shares") of Class A Common Stock, par value $0.001 per share, of the Company
(the "Common Stock"). The purchase price of one share of Common Stock under this
Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
SECTION 1. DEFINITIONS. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Securities Purchase
Agreement (the "Purchase Agreement"), dated July 19, 2005, among the Company and
the purchasers signatory thereto.
SECTION 2. EXERCISE.
(a) EXERCISE OF WARRANT. Exercise of the purchase rights represented
by this Warrant may be made, in whole or in part, at any time or times on
or after the Initial Exercise Date and on or before the Termination Date by
delivery to the Company of a duly executed facsimile copy of the Notice of
Exercise Form annexed hereto (or such other office or agency of the Company
as it may designate by notice in writing to the registered Holder at the
address of such Holder appearing on the books of the Company); provided,
however, within 5 Trading Days of the date said Notice of Exercise is
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delivered to the Company, the Holder shall have surrendered this Warrant to
the Company and the Company shall have received payment of the aggregate
Exercise Price of the shares thereby purchased by wire transfer or
cashier's check drawn on a United States bank.
(b) EXERCISE PRICE. The exercise price of the Common Stock under this
Warrant shall be $11.00, subject to adjustment hereunder (the "Exercise
Price").
(c) CASHLESS EXERCISE. If at any time after one year from the date of
issuance of this Warrant there is no effective Registration Statement
registering, or no current prospectus available for, the resale of the
Warrant Shares by the Holder, then this Warrant may also be exercised at
such time by means of a "cashless exercise" in which the Holder shall be
entitled to receive a certificate for the number of Warrant Shares equal to
the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A)= the VWAP on the Trading Day immediately preceding the date of
such election;
(B)= the Exercise Price of this Warrant, as adjusted; and
(X)= the number of Warrant Shares issuable upon exercise of this
Warrant in accordance with the terms of this Warrant by means of
a cash exercise rather than a cashless exercise.
(d) EXERCISE LIMITATIONS.
(i) HOLDER'S RESTRICTIONS. A Holder shall not have the right
to exercise any portion of this Warrant, pursuant to Section 2(c)
or otherwise, to the extent that after giving effect to such
issuance after exercise, such Holder (together with such Holder's
Affiliates), as set forth on the applicable Notice of Exercise,
would beneficially own in excess of 4.99% of the number of shares
of the Common Stock outstanding immediately after giving effect
to such issuance. For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by such
Holder and its Affiliates shall include the number of shares of
Common Stock issuable upon exercise of this Warrant with respect
to which the determination of such sentence is being made, but
shall exclude the number of shares of Common Stock which would be
issuable upon (A) exercise of the remaining, nonexercised portion
of this Warrant beneficially owned by such Holder or any of its
Affiliates and (B) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company
(including, without limitation, any debentures or Warrants)
subject to a limitation on conversion or exercise analogous to
the limitation contained herein beneficially owned by such Holder
or any of its Affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 2(d)(i), beneficial
ownership shall be calculated in accordance with Section 13(d) of
the Exchange Act, it being acknowledged by a Holder that the
Company is not representing to such Holder that such calculation
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is in compliance with Section 13(d) of the Exchange Act and such
Holder is solely responsible for any schedules required to be
filed in accordance therewith. To the extent that the limitation
contained in this Section 2(d) applies, the determination of
whether this Warrant is exercisable (in relation to other
securities owned by such Holder) and of which a portion of this
Warrant is exercisable shall be in the sole discretion of a
Holder, and the submission of a Notice of Exercise shall be
deemed to be each Holder's determination of whether this Warrant
is exercisable (in relation to other securities owned by such
Holder) and of which portion of this Warrant is exercisable, in
each case subject to such aggregate percentage limitation, and
the Company shall have no obligation to verify or confirm the
accuracy of such determination. For purposes of this Section
2(d), in determining the number of outstanding shares of Common
Stock, a Holder may rely on the number of outstanding shares of
Common Stock as reflected in (x) the Company's most recent Form
10-QSB or Form 10-KSB, as the case may be, (y) a more recent
public announcement by the Company or (z) any other notice by the
Company or the Company's transfer agent setting forth the number
of shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to such Holder the number of shares
of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the
Company, including this Warrant, by such Holder or its Affiliates
since the date as of which such number of outstanding shares of
Common Stock was reported. The provisions of this Section 2(d)
may be waived by such Xxxxxx, at the election of such Holder,
upon not less than 61 days' prior notice to the Company, and the
provisions of this Section 2(d) shall continue to apply until
such 61st day (or such later date, as determined by such Holder,
as may be specified in such notice of waiver).
(ii) TRADING MARKET RESTRICTIONS. If the Company has not
obtained Shareholder Approval (as defined below) if required by
the applicable rules and regulations of the Trading Market (or
any successor entity), then the Company may not issue upon
exercise of this Warrant a number of shares of Common Stock,
which, when aggregated with any shares of Common Stock issued (A)
issued pursuant to the Purchase Agreement and (B) upon prior
exercise of this or any other Warrant issued pursuant to the
Purchase Agreement, would exceed 19.999% of the number of shares
of Common Stock outstanding on the Trading Day immediately
preceding the Closing Date (such number of shares, the "Issuable
Maximum"). If on any attempted exercise of this Warrant, the
issuance of Warrant Shares would exceed the Issuable Maximum and
the Company shall not have previously obtained the vote of
shareholders (the "Shareholder Approval"), if any, as may be
required by the applicable rules and regulations of the Trading
Market (or any successor entity) to approve the issuance of
shares of Common Stock in excess of the Issuable Maximum pursuant
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to the terms hereof, then the Company shall issue to the Holder
requesting a Warrant exercise such number of Warrant Shares as
may be issued below the Issuable Maximum and, with respect to the
remainder of the aggregate number of Warrant Shares, this Warrant
shall not be exercisable until and unless Shareholder Approval
has been obtained.
(e) MECHANICS OF EXERCISE.
(i) AUTHORIZATION OF WARRANT SHARES. The Company covenants
that all Warrant Shares which may be issued upon the exercise of
the purchase rights represented by this Warrant will, upon
exercise of the purchase rights represented by this Warrant, be
duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
(ii) DELIVERY OF CERTIFICATES UPON EXERCISE. Certificates
for shares purchased hereunder shall be transmitted by the
transfer agent of the Company to the Holder by crediting the
account of the Holder's prime broker with the Depository Trust
Company through its Deposit Withdrawal Agent Commission ("DWAC")
system if the Company is a participant in such system, and
otherwise by physical delivery to the address specified by the
Holder in the Notice of Exercise within 3 Trading Days from the
receipt by the Company of the Notice of Exercise Form, surrender
of this Warrant and payment of the aggregate Exercise Price as
set forth above ("Warrant Share Delivery Date"). This Warrant
shall be deemed to have been exercised on the date the Exercise
Price is received by the Company, if such date is after the
Notice of Exercise Form and this Warrant is received by the
Company. The Warrant Shares shall be deemed to have been issued,
and Holder or any other Person so designated to be named therein
shall be deemed to have become a holder of record of such shares
for all purposes, as of the date the Warrant has been exercised
by payment to the Company of the Exercise Price and all taxes
required to be paid by the Holder, if any, pursuant to Section
2(e)(vii) prior to the issuance of such shares, have been paid.
(iii) DELIVERY OF NEW WARRANTS UPON EXERCISE. If this
Warrant shall have been exercised in part, the Company shall,
within five Trading Days after the time of delivery of the
certificate or certificates representing Warrant Shares, deliver
to Holder a new Warrant evidencing the rights of Holder to
purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be
identical with this Warrant.
(iv) RESCISSION RIGHTS. If the Company fails to cause its
transfer agent to transmit to the Holder a certificate or
certificates representing the Warrant Shares pursuant to this
Section 2(e)(iv) by the 2nd Trading Days immediately following
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the Warrant Share Delivery Date, then the Holder will have the
right to rescind such exercise.
(v) COMPENSATION FOR BUY-IN ON FAILURE TO TIMELY DELIVER
CERTIFICATES UPON EXERCISE. In addition to any other rights
available to the Holder, if the Company fails to cause its
transfer agent to transmit to the Holder a certificate or
certificates representing the Warrant Shares pursuant to an
exercise on or before the 2nd Trading Day immediately following
the Warrant Share Delivery Date, and if after such date the
Holder is required by its broker to purchase in a bona fide arm's
length transaction for fair market value (in an open market
transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving 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 amount obtained by multiplying (A) the
number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (B)
the price at which the sell order giving rise to such purchase
obligation was executed, and (2) at the option of the Holder
given within three Trading Days of the failure to deliver, 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. For example, if the
Holder purchases Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise
of shares of Common Stock with an aggregate sale price giving
rise to such purchase obligation of $10,000, under clause (1) of
the immediately preceding sentence the Company shall be required
to pay the Holder $1,000. The Holder shall provide the Company
written notice indicating the amounts payable to the Holder in
respect of the Buy-In, together with applicable confirmations and
other evidence reasonably requested by the Company. Nothing
herein shall limit a Holder's right to pursue any other remedies
available to it 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.
(vi) NO FRACTIONAL SHARES OR SCRIP. No fractional shares or
scrip representing fractional shares of Common Stock shall be
issued upon the exercise of this Warrant. As to any fraction of a
share of Common Stock which Holder would otherwise be entitled to
purchase upon such exercise, the Company shall pay a cash
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adjustment in respect of such final fraction in an amount equal
to such fraction multiplied by the Exercise Price.
(vii) CHARGES, TAXES AND EXPENSES. Issuance of certificates
for Warrant Shares shall be made without charge to the Holder for
any issue or transfer tax or other incidental expense in respect
of the issuance of such certificate, all of which taxes and
expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or
names as may be directed by the Holder; provided, however, that
in the event certificates for Warrant Shares are to be issued in
a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment
Form attached hereto duly executed by the Holder; and the Company
may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any expenses incidental thereto.
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 thereof.
(viii) CLOSING OF BOOKS. The Company will not close its
stockholder books or records in any manner which prevents the
timely exercise of this Warrant, pursuant to the terms hereof.
(f) CALL PROVISION. Subject to the provisions of Section 2(d) and this
Section 2(f), if, after the later of the Effective Date and seven months
from issuance of this Warrant, (i) the VWAP for each of 20 consecutive
Trading Days (the "Measurement Period", which 20 Trading Day period shall
not have commenced until after the later of the seven months anniversary
and the Effective Date) exceeds 200% of the then Exercise Price (subject to
adjustment for forward and reverse stock splits, recapitalizations, stock
dividends and the like after the Initial Exercise Date) (the "Threshold
Price") and (ii) the average daily volume for any Threshold Period, which
Threshold Period shall have commenced only after the later of the seven
months anniversary and the Effective Date, exceeds 100,000 shares of Common
Stock per Trading Day (subject to adjustment for forward and reverse stock
splits, recapitalizations, stock dividends and the like after the Initial
Exercise Date), then the Company may, within three Trading Days of the end
of such period, call for cancellation of all or any portion of this Warrant
for which a Notice of Exercise has not yet been delivered (such right, a
"Call"). To exercise this right, the Company must deliver to the Holder an
irrevocable written notice (a "Call Notice"), indicating therein the
portion of unexercised portion of this Warrant to which such notice
applies. If all of the conditions set forth in this Section 2(f) (including
the honoring of all Notices of Exercises) for such Call are satisfied from
the period from the date of the Call Notice through and including the Call
Date (as defined below), then any portion of this Warrant subject to such
Call Notice for which a Notice of Exercise, together with payment of the
Exercise Price, shall not have been received by the Call Date will be
cancelled at 6:30 p.m. (New York City time) on the tenth Trading Day after
the date the Call Notice is received by the Holder (such date, the "Call
Date") upon payment by the Company to the Holder of $0.05 per Warrant
Share. Any unexercised portion of this Warrant to which the Call Notice
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does not pertain will be unaffected by such Call Notice. In furtherance
thereof, the Company covenants and agrees that it will honor all Notices of
Exercise with respect to Warrant Shares subject to a Call Notice that are
tendered through 6:30 p.m. (New York City time) on the Call Date, together
with payment of the Exercise Price. The parties agree that any Notice of
Exercise delivered following a Call Notice shall first reduce to zero the
number of Warrant Shares subject to such Call Notice prior to reducing the
remaining Warrant Shares available for purchase under this Warrant. For
example, if (x) this Warrant then permits the Holder to acquire 100 Warrant
Shares, (y) a Call Notice pertains to 75 Warrant Shares, and (z) prior to
6:30 p.m. (New York City time) on the Call Date the Holder tenders a Notice
of Exercise, together with payment of the Exercise Price, in respect of 50
Warrant Shares, then (1) on the Call Date the right under this Warrant to
acquire 25 Warrant Shares will be automatically cancelled, (2) the Company,
in the time and manner required under this Warrant, will have issued and
delivered to the Holder 50 Warrant Shares in respect of the exercises
following receipt of the Call Notice, and (3) the Holder may, until the
Termination Date, exercise this Warrant for 25 Warrant Shares (subject to
adjustment as herein provided and subject to subsequent Call Notices).
Subject again to the provisions of this Section 2(e), the Company may
deliver subsequent Call Notices for any portion of this Warrant for which
the Holder shall not have delivered a Notice of Exercise. Notwithstanding
anything to the contrary set forth in this Warrant, the Company may not
deliver a Call Notice or require the cancellation of this Warrant (and any
Call Notice will be void), unless, from the beginning of the 20th
consecutive Trading Days used to determine whether the Common Stock has
achieved the Threshold Price through the Call Date, (i) the Company shall
have honored in accordance with the terms of this Warrant all Notices of
Exercise delivered by 6:30 p.m. (New York City time) on the Call Date,
together with the payment of the Exercise Price, (ii) the Registration
Statement shall be effective as to all Warrant Shares and the prospectus
thereunder available for use by the Holder for the resale of all such
Warrant Shares and (iii) the Common Stock shall be listed or quoted for
trading on the Trading Market, and (iv) there is a sufficient number of
authorized shares of Common Stock for issuance of all Securities under the
Transaction Documents, and (v) the issuance of the shares shall be in
accordance with Section 2(d) herein. The Company's right to Call the
Warrant shall be exercised ratably among the Holders based on each Holder's
initial purchase of Common Stock.
SECTION 3. CERTAIN ADJUSTMENTS.
(a) STOCK DIVIDENDS AND SPLITS. If the Company, at any time while this
Warrant is outstanding: (A) pays a stock dividend or otherwise make a
distribution or distributions on shares of its Common Stock, the Company's
Class B Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company pursuant to this
Warrant), (B) subdivides outstanding shares of Common Stock into a larger
number of shares, (C) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares, or (D)
issues by reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the
number of shares of Common Stock outstanding immediately after such event.
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Simultaneously with any adjustment to the Exercise Price pursuant to this
Section 3(a), the number of shares issuable upon exercise of this Warrant
shall be proportionately adjusted, so that after such adjustment, the
aggregate amount of the adjusted Exercise Price multiplied by the aggregate
adjusted amount of Warrant Shares shall equal the aggregate amount of the
unadjusted Exercise Price multiplied by the aggregate unadjusted amount of
Warrant Shares. Any adjustment made pursuant to this Section 3(a) shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall
become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.
(b) PRO RATA DISTRIBUTIONS. If the Company, at any time prior to the
Termination Date, shall distribute to all holders of Common Stock,
including all holders of the Company's Class B Common Stock (and not to
Holders of the Warrants) evidences of its indebtedness or assets (including
cash and cash dividends) or rights or warrants to subscribe for or purchase
any security other than the Common Stock (which shall be subject to Section
3(b)), then in each such case the Exercise Price shall be adjusted by
multiplying the Exercise Price in effect immediately prior to the record
date fixed for determination of stockholders entitled to receive such
distribution by a fraction of which the denominator shall be the VWAP
determined as of the record date mentioned above, and of which the
numerator shall be such VWAP on such record date less the then per share
fair market value at such record date of the portion of such assets or
evidence of indebtedness so distributed applicable to one outstanding share
of the Common Stock or Common Stock equivalent share of Class B Common
Stock (determined by dividing the amount distributed by the then issued and
outstanding shares of Common Stock) as determined by the Board of Directors
in good faith. In either case the adjustments shall be described in a
statement provided to the Holder of the portion of assets or evidences of
indebtedness so distributed or such subscription rights applicable to one
share of Common Stock (or for Class B Common Stock, equivalent measures).
Such adjustment shall be made whenever any such distribution is made and
shall become effective immediately after the record date mentioned above.
(c) FUNDAMENTAL TRANSACTION. If, at any time while this Warrant is
outstanding, (A) the Company effects any merger or consolidation of the
Company with or into another Person, (B) the Company effects any sale of
all or substantially all of its assets in one or a series of related
transactions, (C) 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 (D) 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 (other than capital stock of the Company),
cash or property (in any such case, a "Fundamental Transaction"), then,
upon any subsequent exercise of this Warrant, the Holder shall have the
right to receive, for each Warrant Share that would have been issuable upon
such exercise immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder, (a) upon exercise of this
Warrant, the number of shares of Common Stock of the successor or acquiring
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corporation or of the Company, if it is the surviving corporation, and any
additional consideration (the "Alternate Consideration") receivable upon or
as a result of such reorganization, reclassification, merger, consolidation
or disposition of assets by a Holder of the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to such event
or (b) if the Company is acquired in an all cash transaction, cash equal to
the value of this Warrant as determined in accordance with the
Black-Scholes option pricing formula. 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. To the extent necessary to effectuate the foregoing
provisions, any successor to the Company or surviving entity in such
Fundamental Transaction shall issue to the Holder a new warrant consistent
with the foregoing provisions and evidencing the Holder's right to exercise
such warrant into Alternate Consideration. 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 Section 3(c) and insuring that this Warrant (or any such
replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.
(d) CALCULATIONS. All calculations under this Section 3 shall be made
to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 3, the number of shares of Common Stock deemed
to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) issued
and outstanding at the close of the Trading Day on or, if not applicable,
most recently preceding, such given date.
(e) VOLUNTARY ADJUSTMENT BY COMPANY. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to
any amount and for any period of time deemed appropriate by the Board of
Directors of the Company.
(f) NOTICE TO HOLDERS.
(i) ADJUSTMENT TO EXERCISE PRICE. Whenever the Exercise
Price is adjusted pursuant to this Section 3, the Company shall
promptly mail to each Holder a notice setting forth the Exercise
Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.
(ii) NOTICE TO ALLOW EXERCISE BY HOLDER. If (A) the Company
shall declare a dividend (or any other distribution) on the
Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common
Stock; (C) the Company shall authorize the granting to all
holders of the Common Stock rights or warrants to subscribe for
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or purchase any shares of capital stock of any class or of any
rights; (D) the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a
party, any sale or transfer of all or substantially all of the
assets of the Company, of any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or
property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs
of the Company; then, in each case, the Company shall cause to be
mailed to the Holder at its last address as it shall appear upon
the Warrant Register of the Company, at least 20 calendar days
prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to
be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be
taken, the date as of which the holders of the Common Stock of
record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the
date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of
the Common Stock of record shall be entitled to exchange their
shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided, that the failure to
mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to
be specified in such notice. The Holder is entitled to exercise
this Warrant during the 20-day period commencing on the date of
such notice to the effective date of the event triggering such
notice. Notwithstanding the foregoing, the delivery of the notice
described in this Section 3(f) is not intended to and shall not
bestow upon the Holder any voting rights whatsoever with respect
to outstanding unexercised Warrants.
(g) For the purposes of this Section 3, the following term shall have
the following meaning:
"Common Stock Equivalent" means any security or obligation which
is by its terms, directly or indirectly, convertible into or
exchangeable or exercisable for shares of Common Stock,
including, without limitation, any option, warrant or other
subscription or purchase right with respect to Common Stock or
any Common Stock Equivalent.
SECTION 4. TRANSFER OF WARRANT.
(a) TRANSFERABILITY. Subject to compliance with any applicable
securities laws and the conditions set forth in Sections 5(a) and 4(d)
hereof and to the provisions of Section 4.1 of the Purchase Agreement, this
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Warrant and all rights hereunder are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Company,
together with a written assignment of this Warrant substantially in the
form attached hereto duly executed by the Holder or its agent or attorney
and funds sufficient to pay any transfer taxes payable upon the making of
such transfer. Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor
a new Warrant evidencing the portion, if any, of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. A Warrant, if
properly assigned, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.
(b) NEW WARRANTS. This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in
which new Warrants are to be issued, signed by the Holder or its agent or
attorney. Subject to compliance with Section 4(a), as to any transfer which
may be involved in such division or combination, the Company shall execute
and deliver a new Warrant or Warrants in exchange for the Warrant or
Warrants to be divided or combined in accordance with such notice.
(c) WARRANT REGISTER. 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.
(d) TRANSFER RESTRICTIONS. If, at the time of the surrender of this
Warrant in connection with any transfer of this Warrant, the transfer of
this Warrant shall not be registered pursuant to an effective registration
statement under the Securities Act and under applicable state securities or
blue sky laws, the Company may require, as a condition of allowing such
transfer (i) that the Holder or transferee of this Warrant, as the case may
be, furnish to the Company a written opinion of counsel (which opinion
shall be in form, substance and scope customary for opinions of counsel in
comparable transactions) to the effect that such transfer may be made
without registration under the Securities Act and under applicable state
securities or blue sky laws, (ii) that the Holder or transferee execute and
deliver to the Company an investment letter in form and substance
acceptable to the Company and (iii) that the transferee be an "accredited
investor" as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
promulgated under the Securities Act or a qualified institutional buyer as
defined in Rule 144A(a) under the Securities Act.
SECTION 5. MISCELLANEOUS.
(a) TITLE TO WARRANT. Prior to the Termination Date and subject to
compliance with applicable laws and Section 4 of this Warrant, this Warrant
and all rights hereunder are transferable, in whole or in part, at the
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office or agency of the Company by the Holder in person or by duly
authorized attorney, upon surrender of this Warrant together with the
Assignment Form annexed hereto properly endorsed and the legal opinion
required under Section 4(d), if required by the Company. The transferee
shall sign an investment letter in form and substance reasonably
satisfactory to the Company.
(b) NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of
the Company prior to the exercise hereof. Upon the surrender of this
Warrant and the payment of the aggregate Exercise Price, the Warrant Shares
so purchased shall be and be deemed to be issued to such Holder as the
record owner of such shares as of the close of business on the later of the
date of such surrender or payment.
(c) LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The Company
covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant or any stock certificate relating to the Warrant Shares, and in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such
Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of
such cancellation, in lieu of such Warrant or stock certificate.
(d) SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day
for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday, Sunday or a legal holiday, then such
action may be taken or such right may be exercised on the next succeeding
day not a Saturday, Sunday or legal holiday.
(e) AUTHORIZED SHARES.
The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this
Warrant. The Company further covenants that its issuance of this
Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and
issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will
take all such reasonable action as may be necessary to assure that
such Warrant Shares may be issued as provided herein without violation
of any applicable law or regulation, or of any requirements of the
Trading Market upon which the Common Stock may be listed.
Except and to the extent as waived or consented to by the Holder,
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
12
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 as set forth in this Warrant against impairment. Without
limiting the generality of the foregoing, the Company will (a) not
increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par
value, (b) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares upon the exercise of this Warrant, and
(c) use commercially reasonable 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.
Before taking any action which would result in an adjustment in
the number of Warrant Shares for which this Warrant is exercisable or
in the Exercise Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having
jurisdiction thereof.
(f) JURISDICTION. All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be determined in
accordance with the provisions of the Purchase Agreement.
(g) RESTRICTIONS. The Holder acknowledges that the Warrant Shares
acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws and
will contain a restrictive legend substantially in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAW, AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION THEREOF OR A VALID EXEMPTION
THEREFROM.
(h) NONWAIVER AND EXPENSES. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice Xxxxxx's rights, powers or
remedies, notwithstanding the fact that all rights hereunder terminate on
the Termination Date. If the Company willfully and knowingly fails to
comply with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to Holder such amounts as
shall be sufficient to cover any costs and expenses including, but not
limited to, reasonable attorneys' fees, including those of appellate
proceedings, incurred by Holder in collecting any amounts due pursuant
hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
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(i) NOTICES. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase
Agreement.
(j) LIMITATION OF LIABILITY. No provision hereof, in the absence of
any affirmative action by Holder to exercise this Warrant or purchase
Warrant Shares, and no enumeration herein of the rights or privileges of
Holder, 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.
(k) REMEDIES. Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and
hereby agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.
(l) SUCCESSORS AND ASSIGNS. Subject to applicable securities laws,
this Warrant and the rights and obligations evidenced hereby shall inure to
the benefit of and be binding upon the successors of the Company and the
successors and permitted assigns of Holder. The provisions of this Warrant
are intended to be for the benefit of all Holders from time to time of this
Warrant and shall be enforceable by any such Holder.
(m) AMENDMENT. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the
Holder.
(n) SEVERABILITY. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this Warrant.
(o) HEADINGS. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant.
********************
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.
Dated: July 19, 2005
ACCESS INTEGRATED TECHNOLOGIES, INC.
By:
---------------------------------
Name:
Title:
15
NOTICE OF EXERCISE
TO: [_____________]
(1) The undersigned hereby elects to purchase ________ Warrant Shares
of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together
with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number
of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c).
(3) Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:
_______________________________
The Warrant Shares shall be delivered to the following:
_______________________________
_______________________________
_______________________________
(4) ACCREDITED INVESTOR. The undersigned is an "accredited investor"
as defined in Regulation D promulgated under the Securities Act of 1933, as
amended.
(5) By delivery of this Notice of Exercise, the undersigned represents
and warrants to the Company that after giving effect to the exercise evidenced
hereby, the Holder will beneficially own no more than 4.99% of the shares of
Common Stock of the Company (as determined in accordance with Section 2(c)
hereof).
[SIGNATURE OF HOLDER]
Name of Investing Entity: ______________________________________________________
Signature of Authorized Signatory of Investing Entity: _________________________
Name of Authorized Signatory: __________________________________________________
Title of Authorized Signatory: _________________________________________________
Date: __________________________________________________________________________
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ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
_______________________________________________ whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________, _______
Holder's Signature: _____________________________
Holder's Address: _____________________________
_____________________________
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
17
