EXHIBIT 4.1
WARRANT AGREEMENT
WARRANT AGREEMENT (the "Warrant Agreement" or this
"Agreement") dated as of December 15, 2004 between Advanced Technology
Industries, Inc., a Delaware corporation ("Parent"), and LTDnetwork, Inc., a
Delaware corporation (the "Company").
WHEREAS, Parent, the Company and LTDN Acquisition Corp., a
Delaware corporation ("Acquisition"), have entered into an Amended and Restated
Agreement and Plan of Merger dated as of August 11, 2004 (the "Merger
Agreement") which provides for the merger (the "Merger") of the Company with and
into Acquisition;
WHEREAS, in connection with the Merger, Parent intends to
issue to the stockholders of the Company shares of series A convertible
preferred stock, par value $0.001, of Parent (the "Parent Convertible Preferred
Stock") and warrants (the "Warrants") to purchase, prior to the Conversion (as
hereinafter defined), shares of Parent Convertible Preferred Stock and,
following the Conversion, shares of common stock, par value $0.001, of Parent
(the "Common Stock"); and
WHEREAS, the shares of Parent Convertible Preferred Stock will
be converted (the "Conversion") into shares of Common Stock if the stockholders
of Parent approve an amendment to Parent's Certificate of Incorporation to
increase the authorized capital stock of Parent in an amount sufficient such
that (i) all outstanding shares of Parent Convertible Preferred Stock can be
converted into shares of Common Stock and (ii) following the Conversion, each
outstanding Warrant can be exercised to purchase such number of shares of Common
Stock subject to such Warrants.
NOW, THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used herein without
definition shall have the meanings ascribed to them in the Merger Agreement. As
used in this Agreement, the following defined terms shall have the following
meanings:
"Common Exercise Price" means $.040830923 per share of Common
Stock as such price may be adjusted pursuant to Section 11.
"Exercise Period" means the period commencing on the date the
Merger is consummated and terminating (i) with respect to 25% of the aggregate
Warrants under this Agreement, at 5:00 p.m. on May 15, 2005, (ii) with respect
to 25% of the aggregate Warrants under this Agreement, at 5:00 p.m. on June 15,
2005, (iii) with respect to 25% of the aggregate Warrants under this Agreement,
at 5:00 p.m. on July 15, 2005 and (iv) with respect to 25% of the aggregate
Warrants under this Agreement, at 5:00 p.m. on August 15, 2005.
"Exercise Price" means (a) prior to the Conversion, the
Preferred Exercise Price and (b) after the Conversion, the Common Exercise
Price.
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"Holder" means the registered holder of a Warrant Certificate.
"Preferred Exercise Price" means $16.33236928 per share of
Parent Convertible Preferred Stock as such price may be adjusted pursuant to
Section 11.
"Warrant Shares" means the Parent Convertible Preferred Stock,
Common Stock or other securities issued or issuable, as the case may be, from
time upon exercise of the Warrants.
SECTION 2. WARRANT CERTIFICATES. The certificates evidencing
the Warrants (the "Warrant Certificates") to be delivered pursuant to this
Agreement shall be in registered form only and shall be substantially in the
form set forth in Exhibit A attached hereto. With respect to the initial
issuance of Warrants in connection with the Merger, Holders shall receive a (a)
Warrant Certificate representing Warrants to be issued to such Holder with
respect to the 25% of the aggregate Warrants terminating on May 15, 2005, (b)
Warrant Certificate representing Warrants to be issued to such Holder with
respect to the 25% of the aggregate Warrants terminating on June 15, 2005, (c)
Warrant Certificate representing Warrants to be issued to such Holder with
respect to the 25% of the aggregate Warrants terminating on July 15, 2005 and
(d) Warrant Certificate representing Warrants to be issued to such Holder with
respect to the 25% of the aggregate Warrants terminating on August 15, 2005.
SECTION 3. EXECUTION OF WARRANT CERTIFICATES. Warrant
Certificates shall be signed on behalf of Parent by its Chairman of the Board or
its Chief Executive Officer or its President or its Chief Operating Officer or
its Chief Financial Officer or a Vice President and by its Secretary or an
Assistant Secretary. Each such signature upon the Warrant Certificates may be in
the form of a facsimile signature of the present or any future Chairman of the
Board, Chief Executive Officer, President, Chief Operating Officer, Chief
Financial Officer, Vice President, Secretary or Assistant Secretary and may be
imprinted or otherwise reproduced on the Warrant Certificates and for that
purpose Parent may adopt and use the facsimile signature of any person who shall
have been Chairman of the Board, Chief Executive Officer, President, Chief
Operating Officer, Chief Financial Officer, Vice President, Secretary or
Assistant Secretary, notwithstanding the fact that at the time the Warrant
Certificates shall be delivered or disposed of such person shall have ceased to
hold such office.
In case any officer of Parent who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been disposed of by Parent, such Warrant
Certificates nevertheless may be delivered or disposed of as though such person
had not ceased to be such officer of Parent; and any Warrant Certificate may be
signed on behalf of Parent by any person who, at the actual date of the
execution of such Warrant Certificate, shall be a proper officer of Parent to
sign such Warrant Certificate, although at the date of the execution of this
Warrant Agreement any such person was not such an officer.
SECTION 4. REGISTRATION. Parent shall number and register the
Warrant Certificates in a register as they are issued. Parent may deem and treat
the registered Holder(s) of the Warrant Certificates as the absolute owner(s)
thereof (notwithstanding any notation of ownership or other writing thereon made
by anyone), for all purposes, and shall not be affected by any notice to the
contrary. Parent shall act as the registrar for the Warrants.
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SECTION 5. REGISTRATION OF TRANSFERS AND EXCHANGES. (a) Parent
shall from time to time register the transfer of any outstanding Warrant
Certificates in a Warrant register to be maintained by Parent upon surrender
thereof accompanied by the Assignment Form on the reverse of the Warrant
Certificate, duly executed by the registered Holder or Holders thereof or by the
duly appointed legal representative thereof or by a duly authorized attorney
together with such legal opinions, certificates or other information required by
such Assignment Form. Upon any such registration of transfer, a new Warrant
Certificate shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled and disposed of by Parent.
(b) Each Warrant Certificate will bear the following legend:
"THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
(c) Each Holder of a Warrant Certificate, by accepting the
same, consents and agrees with Parent and with each subsequent holder of such
Warrant Certificate that, prior to due presentment of such Warrant Certificate
for registration of transfer, Parent may treat the person in whose name the
Warrant Certificate is registered as the owner thereof for all purposes and as
the person entitled to exercise the rights granted under the Warrants, and
neither Parent nor any agent thereof shall be affected by any notice to the
contrary.
SECTION 6. WARRANTS; EXERCISE OF WARRANTS. Subject to the
terms of this Agreement, each Warrant shall give the Holder thereof the right,
which may be exercised during the applicable period of the Exercise Period, upon
payment of the Exercise Price, to receive from Parent (a) prior to the
Conversion, one fully paid and nonassessable share of Parent Convertible
Preferred Stock and (b) after the Conversion, 400 fully paid and nonassessable
shares of Common Stock, subject in the case of clause (a) and (b) to adjustment
pursuant to Section 11 hereof, provided, however, that Holders will be able to
exercise their Warrants only if the exercise of such Warrants is exempt from the
registration requirements of the Securities Act (and Parent has received such
information as Parent may reasonably request to confirm that such transfer is
being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act). Each Warrant not exercised
during the applicable period of the Exercise Period, upon payment of the
Exercise Price, shall become void and all rights thereunder and all rights in
respect thereof under this Agreement shall cease as of such time.
A Warrant may be exercised upon surrender to Parent at its
office designated for such purpose (the address of which is set forth in Section
14 hereof) of the Warrant Certificate or Certificates evidencing the Warrants to
be exercised with the form of election to purchase on the reverse thereof duly
filled in and signed, which signature shall be guaranteed by a bank or trust
company having an office or correspondent in the United States or a broker or
dealer which is a member of a registered securities exchange or the National
Association of Securities Dealers, Inc., and upon payment to Parent of the
Exercise Price, for the number of Warrant Shares in respect of which such
Warrants are then exercised. Payment of the aggregate Exercise Price shall be
made in cash or by certified or official bank check to the order of Parent.
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Subject to the provisions of Section 7 hereof, upon such
surrender of Warrant Certificates and payment of the Exercise Price, Parent
shall issue and cause to be delivered with all reasonable dispatch to or upon
the written order of the Holder and in such name or names as the Holder may
designate, a certificate or certificates for the number of full Warrant Shares
issuable upon the exercise of such Warrants. Such certificates shall contain a
legend substantially similar to the legend set forth in Section 5(b).
Prior to the exercise of the Warrants, except as may be
specifically provided for herein, (i) no Holder of a Warrant Certificate, as
such, shall be entitled to any of the rights of a holder of Parent Convertible
Preferred Stock or Common Stock, including, without limitation, the right to
vote at or to receive any notice of any meetings of stockholders; (ii) the
consent of any such Holder shall not be required with respect to any action or
proceeding of Parent; (iii) no such Holder, by reason of the ownership or
possession of a Warrant or the Warrant Certificate representing the same, shall
have any right to receive any cash dividends, stock dividends, allotments or
rights or other distributions paid, allotted or distributed or distributable to
the stockholders of Parent prior to, or for which the relevant record date
preceded, the date of the exercise of such Warrant; and (iv) no such Holder
shall have any right not expressly conferred by the Warrant or Warrant
Certificate held by such Holder.
In the event that a Warrant Certificate is exercised in
respect of fewer than all of the Warrant Shares issuable on such exercise at any
time prior to the date of expiration of the Warrants, a new Warrant Certificate
evidencing the remaining Warrant or Warrants will be issued and delivered
pursuant to the provisions of this Section and of Section 4 hereof.
All Warrant Certificates surrendered upon exercise of Warrants
shall be canceled by Parent.
SECTION 7. PAYMENT OF TAXES. Parent will pay all documentary
stamp taxes attributable to the initial issuance of Warrant Shares upon the
exercise of Warrants; PROVIDED, HOWEVER, that Parent shall not be required to
pay any tax or taxes which may be payable in respect of any transfer involved in
the issue of any Warrant Certificates or any certificates for Warrant Shares in
a name other than that of the registered Holder of a Warrant Certificate
surrendered for registration of transfer or upon the exercise of a Warrant, and
Parent shall not be required to issue or deliver such Warrant Certificates
unless or until the person or persons requesting the issuance thereof shall have
paid to Parent the amount of such tax or shall have established to the
reasonable satisfaction of Parent that such tax has been paid.
SECTION 8. MUTILATED OR MISSING WARRANT CERTIFICATES. In case
any of the Warrant Certificates shall be mutilated, lost, stolen or destroyed,
Parent may in its discretion issue, in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent number of
Warrants, but only upon receipt of evidence reasonably satisfactory to Parent of
such loss, theft or destruction of such Warrant Certificate and indemnity, if
requested, also reasonably satisfactory to it. Applicants for such substitute
Warrant Certificates shall also comply with such other reasonable regulations
and pay such other reasonable charges as Parent may prescribe.
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SECTION 9. RESERVATION OF WARRANT SHARES. Parent will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Parent Convertible Preferred Stock and,
after the Conversion, Common Stock or its authorized and issued Parent
Convertible Preferred Stock and, after the Conversion, Common Stock held in its
treasury, for the purpose of enabling it to satisfy any obligation to issue
Warrant Shares upon exercise of Warrants, the maximum number of shares of Parent
Convertible Preferred Stock and, after the Conversion, Common Stock which may
then be deliverable upon the exercise of all outstanding Warrants.
Parent represents and warrants that the initial Warrant Shares
issuable upon conversion of Warrants have been duly authorized and covenants
that all Warrant Shares which may be issued upon exercise of Warrants will, upon
issue, be fully paid, nonassessable, free of preemptive rights and, subject to
Section 7, free from all taxes, liens, charges and security interests with
respect to the issue thereof.
SECTION 10. REGISTRATION RIGHTS AGREEMENT. The shares of
Common Stock and Parent Convertible Preferred Stock issued upon exercise of a
Warrant shall be entitled to the benefits of the Registration Rights Agreement
dated the date hereof between Parent and the Company.
SECTION 11. ADJUSTMENT OF NUMBER OF WARRANT SHARES ISSUABLE.
The number of Warrant Shares issuable upon the exercise of each Warrant are
subject to adjustment from time to time upon the occurrence of the events
enumerated in this Section 11.
(a) Adjustment for change in Parent Convertible Preferred
Stock.
If Parent:
(1) pays a dividend or makes a distribution on its Parent
Convertible Preferred Stock in shares of its Parent Convertible
Preferred Stock;
(2) subdivides its outstanding shares of Parent Convertible
Preferred Stock into a greater number of shares; or
(3) combines its outstanding shares of Parent Convertible
Preferred Stock into a smaller number of shares;
then the number of shares of Parent Convertible Preferred Stock issuable upon
exercise of any Warrant in effect immediately prior to such action shall be
proportionately adjusted so that the Holder of any Warrant thereafter exercised
may receive the aggregate number of shares of Parent Convertible Preferred Stock
which such Holder would have owned immediately following such action if such
Warrant had been exercised immediately prior to such action.
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The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) Adjustment for change in Common Stock.
If Parent:
(1) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a
greater number of shares; or
(3) combines its outstanding shares of Common Stock into a
smaller number of shares;
then the number of shares of its Common Stock issuable upon exercise of any
Warrant in effect immediately prior to such action shall be proportionately
adjusted so that the Holder of any Warrant thereafter exercised may receive the
aggregate number of shares of Common Stock which such Holder would have owned
immediately following such action if such Warrant had been exercised immediately
prior to such action.
The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
Such adjustment shall be made successively whenever any event
listed above shall occur.
(c) NOTICE OF ADJUSTMENT.
Whenever the number of Warrant Shares issuable upon exercise
of one Warrant is adjusted, Parent shall provide the notices required by Section
13 hereof.
(d) REORGANIZATION OF COMPANY.
If any capital reorganization or reclassification of the
capital stock of Parent or any consolidation or merger of Parent with another
corporation or entity or the sale of all or substantially all of its assets to
another corporation or entity shall be effected in such a way that holders of
Common Stock or Parent Convertible Preferred Stock shall be entitled to receive
stock, securities or assets in exchange for Common Stock or Parent Convertible
Preferred Stock, upon consummation of such transaction the Warrants shall
automatically become exercisable for the kind and amount of stock, securities,
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or assets which the Holder of a Warrant would have owned immediately after such
transaction if the Holder had exercised the Warrant immediately before the
effective date of such transaction. Concurrently with the consummation of such
transaction, the corporation formed by or surviving any such transaction if
other than Parent, or the person to which such sale or conveyance shall have
been made, shall enter into a supplemental Warrant Agreement so providing and
further providing for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Section. The successor company
shall mail to Holders a notice describing the supplemental Warrant Agreement as
soon as reasonably practicable after the execution of any such supplemental
Warrant Agreement.
If this subsection (d) applies, subsections (a) and (b) of
this Section 11 do not apply.
(e) ADJUSTMENT IN EXERCISE PRICE.
(i) Upon each adjustment of the number of shares of Parent
Convertible Preferred Stock pursuant to this Section 11, the Preferred Exercise
Price for each Warrant outstanding prior to the making of the adjustment in the
number of shares of Parent Convertible Preferred Stock shall thereafter be
adjusted to the Preferred Exercise Price (calculated to the nearest hundredth of
one cent) obtained from the following formula:
E'= E x N
N'
where:
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
N' = the adjusted number of shares of Parent Convertible Preferred
Stock issuable upon exercise of a Warrant.
N = the number or shares of Parent Convertible Preferred Stock
previously issuable upon exercise of a Warrant prior to
adjustment.
(ii) Upon each adjustment of the number of shares of Common
Stock pursuant to this Section 11, the Common Exercise Price for each Warrant
outstanding prior to the making of the adjustment in the number of shares of
Common Stock shall thereafter be adjusted to the Common Exercise Price
(calculated to the nearest hundredth of one cent) obtained from the following
formula:
E'= E x N
N'
where:
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E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
N' = the adjusted number of shares of Common Stock issuable upon
exercise of a Warrant.
N = the number or shares of Common Stock previously issuable upon
exercise of a Warrant prior to adjustment.
(iii) If any Escrow Warrants are cancelled in accordance with
Section 2.4(d) of the Merger Agreement, the Preferred Exercise Price for each
outstanding Warrant shall be adjusted subject to any other adjustments described
in subsections (a), (b) or (d) of this Section 11, to equal the quotient
obtained by dividing (1) the difference between (A) $10,000,000 and (B) the sum
of (I) the Closing Net Cash Amount and (II) the LTDN Interim Note Amount by (2)
the difference between (A) the Warrant Share Number and (B) such number of
Escrow Warrants cancelled.
(iv) If any Escrow Warrants are cancelled in accordance with
Section 2.4(d) of the Merger Agreement, the Common Exercise Price for each
outstanding Warrant shall be adjusted, subject to any other adjustments
described in subsections (a), (b) or (d) of this Section 11, to equal the
quotient obtained by dividing (1) the quotient obtained by dividing (A) the
difference between (I) $10,000,000 and (II) the sum of (a) the Closing Net Cash
Amount and (b) the LTDN Interim Note Amount by (B) the difference between (I)
the Warrant Share Number and (II) such number of Escrow Warrants cancelled by
(2) 400.
(f) FORM OF WARRANTS.
Irrespective of any adjustments in the number or kind of
shares purchasable upon the exercise of the Warrants, Warrants theretofore or
thereafter issued may continue to express the same price and number and kind of
shares as are stated in the Warrants initially issuable pursuant to this
Agreement.
SECTION 12. FRACTIONAL INTERESTS. Any one Warrant may be
exercised only in full and not in part. Parent shall not be required to issue
fractional Warrant Shares on the exercise of Warrants. If more than one Warrant
shall be presented for exercise at the same time by the same Holder, the number
of full Warrant Shares which shall be issuable upon the exercise thereof shall
be computed on the basis of the aggregate number of Warrant Shares purchasable
on exercise of the Warrants so requested to be exercised. If any fraction of a
Warrant Share would, except for the provisions of this Section 12, be issuable
on the exercise of any Warrants (or specified portion thereof), such fractional
interest shall be rounded down to the nearest whole share.
SECTION 13. NOTICES TO WARRANT HOLDERS. Upon any adjustment of
the Exercise Price or the number of Warrant Shares issuable upon exercise of one
Warrant pursuant to Section 11, Parent shall promptly thereafter cause to be
given to each of the registered Holders of the Warrant Certificates at such
Holder's address appearing on the Warrant register written notice of such
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adjustments by first-class mail, postage prepaid. Where appropriate, such notice
may be given in advance and included as a part of the notice required to be
mailed under the other provisions of this Section 13.
In case:
(a) of any consolidation or merger to which Parent is a party
and for which approval of any shareholders of Parent is required, or of the
conveyance or transfer of the properties and assets of Parent substantially as
an entirety, or a tender offer or exchange offer for shares of Common Stock; or
(b) of the voluntary or involuntary dissolution, liquidation
or winding up of Parent; or
(c) Parent proposes to take any action which would require an
adjustment of the number of Warrant Shares issuable upon exercise of one Warrant
pursuant to Section 11;
then Parent shall cause to be given to each of the registered Holders of the
Warrant Certificates at such Holder's address appearing on the Warrant register,
at least 10 days prior to the applicable record date hereafter specified, or
promptly in the case of events for which there is no record date, by first class
mail, postage prepaid, a written notice stating (i) the date as of which the
holders of record of shares of or Parent Convertible Preferred Stock or Common
Stock, as the case may be, to be entitled to receive any such distribution are
to be determined, or (ii) the initial expiration date set forth in any tender
offer or exchange offer for shares of Common Stock, or (iii) the date on which
any such consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding up is expected to become effective or consummated. The failure to
give the notice required by this Section 13 or any defect therein shall not
affect the legality or validity of any distribution, right, option, warrant,
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up, or the vote upon any action.
Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the Holders thereof the right
to vote or to consent or to receive notice as shareholders in respect of the
meetings of shareholders or the election of Directors of Parent or any other
matter, or any rights whatsoever as shareholders of Parent.
SECTION 14. NOTICES TO COMPANY AND HOLDERS. Any notice or
demand authorized by this Agreement to be given or made by the registered Holder
of any Warrant Certificate to or on Parent shall be sufficiently given or made
when and if deposited in the mail, first class or registered, postage prepaid,
addressed to the office of Parent expressly designated by Parent at its office
for purposes of this Agreement (until the Holders are otherwise notified in
accordance with this Section by Parent), as follows:
Advanced Technology Industries, Inc.
0000 Xxxx Xxxxxx, Xxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
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Any notice pursuant to this Agreement to be given by Parent to
the registered Holder(s) of any Warrant Certificate shall be sufficiently given
when and if deposited in the mail, first class or registered, postage prepaid,
addressed (until Parent is otherwise notified in accordance with this Section by
such Holder) to such Holder at the address appearing on the Warrant register of
Parent.
SECTION 15. SUPPLEMENTS AND AMENDMENTS. Parent may from time
to time supplement or amend this Agreement without the approval of any Holders
of Warrant Certificates in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provision herein, or to make any other provisions in regard to
matters or questions arising hereunder which Parent may deem necessary or
desirable and which shall not in any way adversely affect the interests of the
Holders of Warrant Certificates or discriminate against any Holder of Warrant
Certificates. Any amendment or supplement to this Agreement that has an adverse
effect on the interests of Holders shall require the written consent of
registered Holders of a majority of the then outstanding Warrants. Each Holder
of a Warrant outstanding at the time of any such amendment or supplement or
thereafter shall be bound by any amendment or supplement effected pursuant to
this Section 15, whether or not any notice, writing or marking indicating such
amendment or supplement appears on the Warrant or is delivered to such Holder.
SECTION 16. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of Parent shall bind and inure to the
benefit of its respective successors and assigns hereunder.
SECTION 17. TERMINATION. This Agreement shall terminate upon
the termination of the Exercise Period.
SECTION 18. GOVERNING LAW. This Agreement and, and all claims
arising hereunder or relating thereto, shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 19. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any person or corporation other than
Parent and the registered Holders of the Warrant Certificates or Warrant Shares
any legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of Parent and the
registered Holders of the Warrant Certificates and the Warrant Shares.
SECTION 20. COUNTERPARTS. This Agreement may be executed in
two counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
SECTION 21. SEVERABILITY. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such provisions in
every other respect and of the remaining provisions hereof shall not be in any
way impaired or affected thereby, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
ADVANCED TECHNOLOGY INDUSTRIES, INC.
By:_________________________________
Name:
Title:
LTDNETWORK, INC.
By:_________________________________
Name:
Title:
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EXHIBIT A
[Form of Warrant Certificate]
[Face]
"THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION."
No. ____ Warrants
Warrant Certificate
Advanced Technology Industries, Inc.
Reference is made to the Warrant Agreement dated as of
December 15, 2004 (the "Warrant Agreement") between Advanced Technology
Industries, Inc., a Delaware corporation ("Parent"), and LTDnetwork, Inc.
Capitalized terms used herein without definition shall have the meanings
ascribed to them in the Warrant Agreement. This Warrant Certificate certifies
that _____________, or registered assigns, is the registered holder of [ ]
Warrants. Each Warrant entitles the holder upon exercise to receive from Parent
until [ ] such number of Warrant Shares as described in the Warrant Agreement
upon payment of the Exercise Price and upon surrender of this Warrant
Certificate at the office of Parent designated for such purpose, but only
subject to the conditions set forth herein and in the Warrant Agreement.
The number of Warrant Shares issuable upon exercise of the
Warrants is subject to adjustment upon the occurrence of certain events set
forth in the Warrant Agreement.
No Warrant may be exercised after [ ], 2005 and to the extent
not exercised by such time such Warrants shall become void.
Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
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IN WITNESS WHEREOF, Advanced Technology Industries, Inc. has
caused this Warrant Certificate to be signed by the appropriate officers.
Dated:
ADVANCED TECHNOLOGY INDUSTRIES, INC.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
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[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants entitling the holder on exercise to receive
such number of Warrant Shares as described in the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of Parent and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants. A copy of the Warrant Agreement may be
obtained by the holder hereof upon written request to Parent.
Subject to the terms of the Warrant Agreement, Warrants may be
exercised until [ ], 2005. The holder of Warrants evidenced by this Warrant
Certificate may exercise them by surrendering this Warrant Certificate, with the
form of election to purchase set forth hereon properly completed and executed,
together with payment of the Exercise Price in cash at the office of Parent
designated for such purpose. In the event that upon any exercise of Warrants
evidenced hereby the number of Warrants exercised shall be less than the total
number of Warrants evidenced hereby, there shall be issued to the holder hereof
or his assignee a new Warrant Certificate evidencing the number of Warrants not
exercised.
The Warrant Agreement provides that upon the occurrence of
certain events the number of Warrant Shares issuable upon exercise of one
Warrant set forth on the face hereof and the Exercise Price of a Warrant may,
subject to certain conditions, be adjusted.
The holders of the Warrants are entitled to certain
registration rights with respect to shares of Parent Convertible Preferred Stock
and Common Stock purchasable upon exercise as described in Section 10 of the
Warrant Agreement.
Warrant Certificates, when surrendered at the office of Parent
by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this
Warrant Certificate at the office of Parent a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing in the aggregate a like number of
Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
Parent may deem and treat the registered holder(s) thereof as
the absolute owner(s) of this Warrant Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, of any distribution to the holder(s) hereof, and for all other
purposes, and Parent shall not be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles any holder hereof to
any rights of a stockholder of Parent.
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ASSIGNMENT FORM
If you the Holder want to assign this Warrant, fill in the
form below and have your signature guaranteed:
I or we assign and transfer this Warrant to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ____________________________________, agent to transfer
this Warrant on the books of Parent. The agent may substitute another to act for
him.
Date: Signed:
(Signed exactly as your name
appears on the other side of
this Warrant)
Signature Guarantee: ____________________________
The undersigned confirms that this Warrant is being transferred:
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[CHECK ONE]
(1) __ to Parent or a subsidiary thereof;
(2) __ outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act;
(3) __ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(4) __ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, Parent will refuse to register any of the
Warrants evidenced by this certificate in the name of any person other than the
registered holder thereof; provided that if box (2), (3) or (4) is checked,
Parent may require, prior to registering any such transfer, in its sole
discretion, such legal opinions, certifications and other information as Parent
may reasonably request to confirm that such transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. If none of the foregoing boxes is checked,
Parent shall not be obligated to register this Warrant in the name of any person
other than the holder hereof unless and until the conditions to any such
transfer of registration set forth herein shall have been satisfied.
Date: Signed:
(Signed exactly as your name
appears on the other side of
this Warrant)
Signature Guarantee:
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[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the
Warrant, represented by this Warrant Certificate, to receive ______ shares of
[Parent Convertible Preferred Stock] [Common Stock] and herewith tenders payment
for such shares to the order of Advanced Technology Industries, Inc. in the
amount of $_________ in accordance with the terms hereof.
The undersigned requests that a certificate for such shares be
registered in the name of _________, whose address is __________________, and
that such shares be delivered to _________________, whose address is
________________.
If said number of shares is less than all of the shares of
[Parent Convertible Preferred Stock] [Common Stock] purchasable hereunder, the
undersigned requests that a new Warrant Certificate representing the remaining
balance of such shares be registered in the name of _______________, whose
address is, ______________ and that such Warrant Certificate be delivered to,
_____________ whose address is ____________________.
Signature:
Date:
Signature Guaranteed:
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