EXHIBIT 2.7
Form of Exchange Agreement
(DEBT FOR DEBT)
EXCHANGE AGREEMENT
Exchange Agreement, dated as of March 24, 2004 (the "Agreement"), by and
between Access Integrated Technologies, Inc., a Delaware corporation (the
"Company"), and _____________________) (the "Investor").
WHEREAS, the parties hereto are parties to a Note Purchase Agreement dated
as of _________________ (the "Note Purchase Agreement"); and
WHEREAS, pursuant to the Note Purchase Agreement, the Company issued to the
Investor a certain Subordinated Promissory Note dated as of _________________
(the "Existing Note"); and
WHEREAS, the Investor and the Company have agreed to exchange the Existing
Note and any accrued and unpaid interest thereon as of March 24, 2004, for a
subordinated promissory note convertible into shares of the Company's Class A
Common Stock ("Common Stock") at the conversion rate and pursuant to the terms
and conditions set forth in the convertible promissory note, a form of which is
attached hereto as EXHIBIT A ("Convertible Note", and the shares of Common Stock
underlying the Convertible Note, the "Shares"); and
WHEREAS, the parties hereto desire to facilitate the Exchange as
hereinafter provided.
NOW, THEREFORE, the parties hereto, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound hereby, agree as follows:
1. EXCHANGE OF EXISTING NOTE FOR CONVERTIBLE NOTE.
1.1 EXCHANGE. Effective as of the date hereof, the Existing Note held by
Investor, together with any accrued and unpaid interest as of the date hereof,
shall be exchanged for the Convertible Note, and the Company shall issue the
Convertible Note. The Convertible Note shall be in principal amount set forth on
the signature page hereof (as derived from the principal plus accrued and unpaid
interest of the Existing Note). On or before the issuance of the Convertible
Note, Investor shall (A) (i) return the original Existing Note to the Company or
(ii) notify the Company in writing that such original of the Existing Note has
been lost, stolen or destroyed, and Investor shall execute an agreement
satisfactory to the Company to, among other things, indemnify the Company from
any loss incurred by the Company in connection with such original of the
Existing Note, and (B) Investor and the Company shall execute and deliver the
Registration Rights Agreement (hereinafter defined).
1.2 REGISTRATION RIGHTS; LOCK-UP. The Shares will have registration rights
as provided in a registration rights agreement, a form of which is attached
hereto as EXHIBIT B ("Registration Rights Agreement"). The Shares will also be
subject to the lock-up provisions set forth in EXHIBIT C attached hereto.
2. REPRESENTATIONS AND WARRANTIES.
2.1 INVESTOR. Investor represents and warrants to the Company as follows:
a. Investor is an "accredited investor" as defined under Regulation D
promulgated under the Securities Act of 1933, as amended ("Securities Act"), and
is acquiring the Convertible Note and will acquire the Shares for its own
account, for investment and not with a view to, or for sale in connection with,
any distribution thereof. Investor has no present intention of distributing or
reselling the Convertible Note or any of the Shares.
b. Investor, in making the decision to enter into this Agreement, has
not relied upon any representations or warranties, express or implied, except
for the representations and warranties expressly set forth in this Agreement;
and Investor has been provided by the Company with such access to the books and
records and personnel and other representatives of the Company and to such other
information as Investor has requested in order to make an informed decision as
to the advisability of participating in the transactions contemplated hereby.
c. Investor has the authority and capacity to execute and deliver this
Agreement and to perform its obligations hereunder.
d. This Agreement and the consummation of the transactions
contemplated hereby have been duly executed and delivered by Investor and are
the valid and binding obligation of Investor, enforceable against Investor in
accordance with their terms, except as such enforceability may be limited by
bankruptcy, moratorium, insolvency, reorganization or other similar laws
generally affecting the enforcement of creditors' rights, specific performance,
injunctive or other equitable remedies.
e. The execution, delivery and performance of this Agreement by
Investor and the consummation by Investor of the transactions contemplated
hereby will not violate, conflict with or otherwise result in the breach of any
of the terms and conditions of, result in a material modification of or
constitute (or with notice or lapse of time or both would constitute) a default
under, (i) any material instrument, contract or other agreement to which
Investor is a party or by or to which it or any of its properties is bound or
subject; or (ii) any law applicable to Investor or any of its properties or
operations.
f. No consent, approval or authorization of, or declaration or filing
with, any governmental authority or other person or entity is required on the
part of Investor in connection with the execution, delivery and performance of
this Agreement by it or the consummation by it of the transactions contemplated
hereby
2.2 COMPANY. The Company represents and warrants to Investor that:
a. The Company is a corporation duly organized and existing and in
good standing under the laws of the State of Delaware.
b. The Convertible Note and the Shares have been duly authorized and,
when or if so issued, will be fully paid and non-assessable and free and clear
of any lien, claim or right of any other person.
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c. As of the date hereof, the authorized capital stock of Company
consists of (x) 80,000,000 shares of common stock, of which (i) 40,000,000
shares are designated as Class A Common Stock, and (ii) 15,000,000 shares are
designated as Class B Common Stock. There are 6,573,253 shares of Class A Common
Stock and 1,005,811 shares of Class B Common Stock issued and outstanding, which
are the only shares of capital stock of Company issued and outstanding on the
date hereof. 600,000 shares of Common Stock have been reserved for issuance
pursuant to Company's 2000 Stock Option Plan, as amended (the "2000 Stock Option
Plan"), of which 498,897 shares of Common Stock are reserved for issuance under
outstanding stock options under the 2000 Stock Option Plan. All of the issued
and outstanding Common Stock has been issued and sold in conformity with the
requirements of the Securities Act, and all other securities laws applicable to
Company or the Investor.
d. The Company has all requisite power and authority and all necessary
licenses, permits, franchises and other governmental authorizations necessary to
own and operate its properties and to carry on its business as now conducted and
as proposed to be conducted, except where the failure to do so would not have a
material adverse effect on the business, assets, financial condition or results
of operations of the Company and its subsidiaries taken as a whole.
e. This Agreement and the transactions contemplated hereby have been
duly authorized by all necessary corporate and stockholder action of the
Company. Neither this Agreement nor any of the transactions contemplated hereby
conflicts with or violates (i) any provision of the Certificate of Incorporation
or the By-laws of the Company; (ii) any agreement by which the Company, any
subsidiary of the Company or any of its or their respective properties is bound
in any manner that, individually or in the aggregate, would have a material
adverse effect on the business, assets, financial condition or results of
operations of the Company and its subsidiaries taken as a whole; (iii) any
federal or state law, rule or regulation or judicial order; or (iv) any local
law, rule or regulations in any manner that, individually or in the aggregate,
would have material adverse effect on the business, assets, financial condition
or results of operations of the Company and its subsidiaries taken as a whole.
This Agreement is binding on the Company and enforceable against the Company in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, moratorium, fraudulent transfer, preference and other laws and
equitable principles affecting the scope and enforcement of creditors' rights
generally and by the effects of judicial discretion on the availability of
remedies and realization of benefits under and enforceability of this Agreement
in all respects as written.
f. Other than a Form D and any applicable state securities filings, no
consent, approval or authorization of, or filing, registration or qualification
with, any governmental authority or any other person on the part of the Company
is required in connection with the execution, delivery and performance of this
Agreement or the issuance of the Convertible Note or the Shares pursuant to this
Agreement.
2.3 RESTRICTIONS ON TRANSFER. Investor agrees that (i)it will not offer,
sell, pledge, hypothecate or otherwise dispose of the Shares unless such offer,
sale, pledge, hypothecation or other disposition is (x) registered under the
Securities Act, or (y) in compliance with an opinion of counsel to Investor,
delivered to Company and reasonably acceptable to Company, to the effect that
such offer, sale, pledge, hypothecation or other disposition thereof does not
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violate the Securities Act and (ii) the certificate(s) representing the Shares
(if issued) shall bear legends stating in substance:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER SAID ACT OR, IN THE OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE
SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION
DOES NOT VIOLATE THE PROVISIONS THEREOF OR UNLESS SOLD PURSUANT
TO RULE 144 OF SAID ACT.
3. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof. Any changes in or
additions to this Agreement may be made only upon the written consent of all
parties hereto.
4. SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
5. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the state of New York without regard to any of its
principles of conflicts of laws.
6. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
7. FURTHER ASSURANCES. Each of the parties shall, at such party's expense,
execute such documents and other papers and take such other further actions as
may be reasonably required to carry out the provisions hereof and effectuate the
transactions contemplated hereby.
8. SEVERABILITY Should any provision of this Agreement be found to be void,
invalid or unenforceable by a court of competent jurisdiction, that finding
shall only affect the provision(s) found to be void, invalid or unenforceable
and shall not affect the remaining provisions of this Agreement.
9. PRONOUNS. All pronouns and any variations thereof used herein shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the persons or entities may require.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Exchange Agreement as of the date first set forth above.
ACCESS INTEGRATED TECHNOLOGIES, INC.
By:
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Name: A. Xxxx Xxxx
Title: President
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By:
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Name: _______________
PRINCIPAL AMOUNT OF THE CONVERTIBLE NOTE TO BE ISSUED TO INVESTOR: $___________,
AS CALCULATED BELOW.
Principal ($__________) plus accrued and unpaid interest ($______) of the
Existing Note as of March 24, 2004 = $______________
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EXHIBIT A
CONVERTIBLE NOTE
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
EXHIBIT C
LOCK-UP PROVISIONS
The Investor is prohibited, until after May 10, 2005 or such lesser period
as the Company may agree (the "Lock-Up Period"), from making any public sale or
distribution of any Shares without the prior written consent of the Company;
PROVIDED, HOWEVER, that in the event that Investor is the beneficial or record
owner of (i) 20,000 Shares or more, beginning November 10, 2004, the Investor
shall be permitted to make a public sale or distribution of up to 10,000 Shares
during any three month period, or (i) less than 20,000 Shares, beginning
November 10, 2004, the Investor shall be permitted to freely make a public sale
or distribution of any or all of Investor's Shares.
The Investor further agrees to execute and deliver any agreement to such
effect reasonably requested by the Company. The share numbers set forth above
shall be subject to proportionate adjustment in the event of any stock splits,
reclassifications or other such similar events.
