EXHIBIT 4.1
UNDERWRITER'S WARRANT AGREEMENT
This UNDERWRITER'S WARRANT AGREEMENT has been made and entered into
as of November ___, 2003, by and between ACCESS INTEGRATED TECHNOLOGIES, INC., a
Delaware corporation (the "Company"), and XXXXXX XXXXXX & CO., LLC, a New York
limited liability company (the "Underwriter").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue, to the Underwriter or its
designees, warrants (the "Warrants") to purchase up to an aggregate of 120,000
shares of Class A Common Stock, par value $.001, of the Company (the "Common
Stock");
WHEREAS, the Underwriter has agreed pursuant to the Underwriting
Agreement, dated as of November ___, 2003, by and between the Company and the
Underwriter (the "Underwriting Agreement"), to act as the lead underwriter in
connection with the Company's proposed public offering (the "Offering") of
1,200,000 shares of Common Stock at an initial public offering price of $5 per
share (the "Initial Public Offering Price") of the Common Stock; and
WHEREAS, the Warrants to be issued pursuant to this Agreement will
be issued on the Closing Date (as such term is defined in the Underwriting
Agreement) by the Company to the Underwriter, or its permitted designees, in
consideration for, and as part of the Underwriter's compensation in connection
with, the Underwriter acting as such pursuant to the terms of the Underwriting
Agreement.
NOW, THEREFORE, in consideration of the premises hereof, the payment
by the Underwriter to the Company of an aggregate of $100, the agreements herein
set forth and other good and valuable consideration, hereby acknowledged, the
parties hereto agree as follows:
1. Grant. The Underwriter or its designees are hereby granted the
right to purchase, at any time from November __, 2004, until 5:30 P.M., New York
time, on November ___, 2007 (the "Expiration Date"), up to an aggregate of
120,000 shares of Common Stock (the "Shares" or "Warrant Securities") (subject
to adjustment as provided in Section 8 hereof) at the Exercise Price (as
hereinafter defined) (subject to adjustment as provided in Section 8 hereof).
The one-year restriction on the exercise of the Warrants is pursant to Rule
2710(c)(7)(A) of the NASD Conduct Rules. Except as set forth herein, the Shares
issuable upon exercise of the Warrants will be in all respects identical to the
shares of Common Stock being purchased by the Underwriter for resale to the
public pursuant to the terms and provisions of the Underwriting Agreement. Any
Warrant that is not exercised on or prior to the Expiration Date shall be void
and all rights hereunder shall cease.
2. Warrant Certificates. The warrant certificates (the "Warrant
Certificates") delivered and to be delivered pursuant to this Agreement shall be
substantially in the form set forth in Exhibit A attached hereto and made a part
hereof, with such appropriate insertions, omissions, substitutions and other
variations as required or permitted by this Agreement.
3. Exercise of Warrant.
3.1 Method of Exercise. The Warrants are exercisable at the
Exercise Price payable by certified or official bank check in New York Clearing
House funds. Upon surrender of a Warrant Certificate with a duly executed
Election to Purchase (substantially in the form of Annex A to the Warrant
Certificate), together with payment at the Company's principal offices of the
aggregate Exercise Price of the Warrants being exercised, the holder of a
Warrant Certificate ("Holder" or "Holders") shall be entitled to receive a
certificate or certificates for the shares of Common Stock so purchased. The
purchase rights represented by each Warrant Certificate are exercisable at the
option of the Holder, in whole or in part (but not as to fractional shares of
the Common Stock underlying the Warrants). In the case of the purchase of less
than all the shares of Common Stock purchasable under any Warrant Certificate,
the Company shall cancel such Warrant Certificate upon the surrender thereof and
shall execute and deliver a new Warrant Certificate of like tenor for the
balance of the Warrants exercisable thereunder.
3.2 Exercise by Surrender of Warrants. In addition to the method
of payment set forth in Section 3.1 and in lieu of any cash payment required
thereunder, the Holder(s) shall have the right, at any time and from time to
time prior to the Expiration Date, to exercise the Warrants in full or in part
by surrendering the Warrant Certificate(s) representing a certain number of
additional Warrants as payment of the aggregate Exercise Price for the shares of
Common Stock being acquired upon exercise of the Warrants. The Warrants are
exercisable pursuant to this Section 3.2 by surrender of the Warrant
Certificate(s) with a duly executed Election to Purchase (substantially in the
form of Annex B to the Warrant Certificate) and surrender of a certain number of
Warrants in addition to those being exercised. The number of additional Warrants
to be surrendered in payment of the aggregate Exercise Price for the Warrants
being exercised shall be determined by multiplying the number of Warrants to be
exercised by the Exercise Price, and then dividing the product thereof by an
amount equal to the Market Price (as defined below). Solely for the purposes of
this Section 3.2, Market Price shall be calculated on the date on which all
deliveries required to be made to the Company upon exercise of the Warrants
pursuant to this Section 3.2 shall have been made in accordance with Section 13
hereof ("Notice Date").
3.3 Definition of Market Price. As used herein, the phrase
"Market Price" at any date shall be deemed to be the last reported sale price of
the Common Stock, as no such reported sale takes place on such day, the average
of the last reported bid prices for the last three trading days, in either case
as officially reported by the American Stock Exchange or any other principal
securities exchange on which the Common Stock is listed or admitted to trading
or by the Nasdaq National Market (collectively, "NASDAQ"), or, if the Common
Stock is not listed or admitted to trading on any national securities exchange
or quoted by NASDAQ, the average between the closing bid and closing asked
prices as furnished by the NASD or similar organization, or, if no trades have
been made or not quotes are available for such day, as determined in good faith
by resolution of the Board of Directors of the Company, based on the best
information available to it.
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4. Issuance of Certificates. Upon the exercise of the Warrants, the
issuance of certificates for the total number of whole shares of Common Stock
for which such Warrants were exercised shall be made promptly (and in any event
within five business days thereafter) without charge to the Holder thereof,
including, without limitation, any stock transfer or similar tax imposed by or
through the Company that may be payable with respect to the issuance thereof,
and such certificates shall (subject to Section 5 hereof) be issued in the name
of, or in such names as may be directed by, the Holder thereof; provided,
however, that the Company shall not be required to pay any tax that may be
payable with respect to any transfer involved in the issuance and delivery of
any such certificates in a name other than that of the Holder, and the Company
shall not be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
The Warrant Certificates and the certificates representing the
Shares underlying the Warrants shall be executed on behalf of the Company by the
manual or facsimile signature of the then present Chairman of the Board of
Directors or President of the Company under its corporate seal reproduced
thereon and by the then present Treasurer or Secretary of the Company. The
Warrant Certificates shall be dated the date of execution by the Company upon
initial issuance, division, exchange, substitution or transfer. Certificates
representing the shares of Common Stock issuable upon exercise of the Warrants
shall be dated the date on which the Company receives the Election to Purchase,
Warrant Certificate and payment of the Exercise Price in accordance with Section
3.1 or 3.2 hereof.
5. Restriction on Transfer of Warrants. The Warrants may not be
sold, transferred, assigned, hypothecated or otherwise disposed of, in whole or
in part, except that the Warrants may be (i) assigned in whole or part to any
officer or member of the Underwriter and (ii) transferred by operation of law as
a result of the death or divorce of any transferee to whom the Warrants may have
been transferred. Any assignment shall be effected by a duly executed assignment
in the form of Annex C to the Warrant Certificate.
6. Exercise Price.
The initial exercise price of each Warrant shall be one hundred
twenty five (125%) percent of the Initial Public Offering Price, or $6.25 per
share of Common Stock, subject to adjustments as provided in Section 8 hereof
(as in effect from time to time, the "Exercise Price").
7. Registration Rights.
The Company agrees to register the Warrant Securities in the
Registration Statement for the Offering and agrees to file at the Company's
expense, such post-effective amendments (or, to the extent legally permissible,
a registration statement on Form S-3) that may be required to permit the public
resale of the Warrant Securities, but only until the Expiration Date.
Notwithstanding the foregoing, in the event an underwriter of a proposed
secondary offering of the Company's equity securities requests that the
Underwriter execute a lock-up agreement concerning the Warrant Securities, the
Underwriter will do so on terms not less favorable than other shareholders
having holdings of similar size.
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8. Adjustments.
8.1 Intentionally Omitted.
8.2 Adjustment of Exercise Price.
8.2.1 Initial Exercise Price. The Exercise Price shall be adjusted
and readjusted from time to time as provided in this Section 8 and, as so
adjusted or readjusted, shall remain in effect until a further adjustment or
readjustment thereof is required by this Section 8; provided, however, that
there shall be no adjustment of the Exercise Price in connection with any of the
Excluded Issuances (as defined below).
8.2.2 Issuance of Additional Shares of Common Stock. In case the
Company, at any time or from time to time after the date on which the
Registration Statement becomes effective under the Securities Act (the
"Effective Date"), shall issue or sell Additional Shares of Common Stock (as
defined below), including Additional Shares of Common Stock deemed to be issued
pursuant to Section 8.3 or Section 8.4, without consideration or for a
consideration per share less than the lesser of the Exercise Price or the Market
Price of the shares of Common Stock outstanding immediately prior to such issue
or sale, then, and in each such case, the Exercise Price shall be reduced,
subject to Section 8.9, concurrently with such issue or sale, to a price
(calculated to the nearest cent) determined by multiplying such Exercise Price
by a fraction of which
(a) the numerator shall be (i) the number of shares of Common
Stock outstanding immediately prior to such issue or sale plus; (ii) the number
of shares of Common Stock issuable in respect of Convertible Securities
outstanding immediately prior to such issue plus; (iii) the number of shares of
Common Stock that the aggregate consideration received by the Company for the
total number of Additional Shares of Common Stock so issued or sold would
purchase at the lesser of such Exercise Price or Market Price immediately prior
to such issue or sale, and
(b) the denominator shall be (i) the number of shares of
Common Stock outstanding immediately after such issue or sale plus (ii) the
number of shares of Common Stock issuable in respect of Convertible Securities
outstanding immediately after such issue or sale. For the purposes of this
Section 8.2.2, (x) immediately after any Additional Shares of Common Stock shall
be deemed to be issued pursuant to Section 8.3 or Section 8.4, such Additional
Shares of Common Stock shall be deemed to be outstanding and (y) treasury shares
shall not be deemed to be outstanding.
8.2.3 Special Definitions.
(a) "Options" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire the Common Stock or Convertible
Securities.
(b) "Convertible Securities" shall mean any evidence of
indebtedness shares of capital stock (other than the Common Stock) or other
securities convertible into or exchangeable for the Common Stock.
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(c) "Common Stock Outstanding" shall include all Common Stock
issued and outstanding and issuable upon exercise of all outstanding Options and
conversions of all outstanding Convertible Securities.
(d) "Additional Shares of Common Stock" shall mean all shares
(including treasury shares) of Common Stock issued or sold (or pursuant to
Sections 8.3 or 8.4, deemed to be issued) by the Company after the Effective
Date, whether or not subsequently reacquired or retired by the Company, other
than shares of Common Stock issued at any time:
(i) upon exercise of the Warrants;
(ii) pursuant to the exercise of Options or other
Common Stock purchase rights issued (or to be issued) to employees, officers or
directors of, or consultants or advisors to, the Company pursuant to the
Company's 2000 Stock Option Plan;
(iii) solely to any strategic ally of the Company in
connection with it entering into business transactions with the Company;
(iv) in connection with the issuance of any so-called
"equity kickers" to banks or institutional investors;
(v) pursuant to the exercise of Options or conversion
of Convertible Securities outstanding as of the Effective Date; or
(vi) in connection with the acquisition of all or
part of another entity by stock acquisition, merger, consolidation or other
reorganization, or by the purchase of all or part of the assets of such other
entity (including securities issued to persons formerly employed by such other
entity and subsequently hired by the Company and to any brokers or finders in
connection therewith) where the Company or its stockholders own more than fifty
(50%) percent of the voting power of the acquired, surviving, combined or
successor company.
(e) If a public market for the Common Stock does not exist,
the Market Price of the Common Stock shall be determined in good faith by the
Board of Directors promptly after the issuance of any Additional Shares of
Common Stock or the occurrence of any other event or the existence of any other
circumstance as a result of which the Market Price of the Common Stock would be
required for any provision of this agreement, and the Company shall promptly
deliver to each Holder a certificate of the Secretary of the Company setting
forth the amount of the Market Price of the Common Stock and certifying that the
amount was determined by the Board of Directors of the Company. If any Holder
disagrees with the Market Price set forth in that certificate, such Holder may,
together with any other Holders who so disagree, engage an independent
investment bank or firm of independent public accountants to act as appraiser,
the expense of which shall be borne by such Holder or Holders, to determine the
Market Price of the Common Stock, and such Holder shall deliver such appraisal
to the Company within 30 days after the date of delivery of the certificate
referenced to above. Within five days after delivery to the Company of such
appraisal, the appraiser engaged by the Holder and a person designated by the
Board (the expense of which shall be borne by the Company) shall meet in order
to resolve any questions or differences with respect to the Market Price of the
Common Stock. If such persons agree on a Market Price of the Common Stock, such
Market Price shall be the Market Price. If no such agreement is reached, the
Market Price shall be determined within ten days after such meeting by an
appraiser who shall be selected by the appraiser engaged by the Holder and the
person designated by the Board (or, if they do not agree on an appraiser within
ten days, another independent investment bank or firm of independent public
accountants to act as appraiser selected by the American Arbitration
Association), the expense of which shall be shared equally by such Holder or
Holders, on the one hand, and the Company, on the other hand, and the
determination of that third appraiser shall be conclusive and binding on both
the Company and the Holder. In determining the Market Price of any share of
Common Stock, all warrants shall be treated as if they had been exercised for
the number of shares of Common Stock issuable upon their exercise, and the
Market Price of any Warrants shall be equal to the Market Price of the Shares of
Common Stock issuable upon the exercise of such Warrants less the exercise price
of such Warrants.
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8.2.4 Dividends and Distributions. In case the Company at any time
or from time to time after the Effective Date shall declare, order, pay or make
a dividend or other distribution on Common Stock (including, without limitation,
any distribution of stock or other securities, property or options by way of
dividend, spin-off, reclassification, corporate rearrangement, or any redemption
or acquisition of stock or options or other securities), then, and in each such
case, the Exercise Price in effect immediately prior to the close of business on
the record date fixed for the determination of holders of any class of
securities entitled to receive such dividend or other distribution shall be
reduced, subject to Section 8.9, effective as of the close of business on such
record date, to a price (calculated to the nearest cent) determined by
multiplying such Exercise Price by a fraction, of which
(a) the numerator shall be the Exercise Price in effect
immediately prior to the close of business on such record date minus the value
of such dividends or other distributions (as determined in good faith by the
Board of Directors of the Company) applicable to one share of Common Stock, and
(b) the denominator shall be such Exercise Price in effect
immediately prior to the close of business on such record date; provided,
however, that no such reduction shall be made pursuant to this Section 8.2.4 for
a dividend payable in Additional Shares of Common Stock or in Options for Common
Stock, or a dividend payable in cash or other property and declared out of the
earned surplus (i.e., retained earnings, when and if the Company has any) of the
Company (excluding any portion thereof resulting from a revaluation of
property). For purposes of the foregoing, a dividend payable other than in cash
shall be considered payable out of earned surplus only to the extent that such
earned surplus is charged an amount equal to the fair value of such dividend at
the time of declaration as determined in good faith by the Board of Directors of
the Company.
8.3 Treatment of Options and Convertible Securities. In case the
Company, at any time or from time to time after the Effective Date shall issue,
sell, grant or assume, or fix a record date for the determination of holders of
any class of securities entitled to receive, any Options or Convertible
Securities, then, and in each such case, the maximum number of Additional Shares
of Common Stock issuable upon the exercise of such Options or the conversion or
exchange of such Convertible Securities shall be deemed to be issued for
purposes of Section 8.2.2 as of the time of such issue, sale, grant or
assumption, or, in case such a record date shall have been fixed, as of the
close of business on such record date; provided, however, that such Additional
Shares of Common Stock shall not be deemed to be issued if the consideration per
share of such shares, as determined pursuant to Section 8.5, would be equal to
or greater than the lesser of the Exercise Price and the Market Price on the
Business Day on which such Additional Shares of Common Stock shall be deemed to
be issued; and provided further, however, that in each such case in which
Additional Shares of Common Stock would have been deemed to be issued,
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(a) no further Additional Shares of Common Stock shall be
deemed to be issued upon the subsequent issue or sale of Common Stock or any
other securities of the Company pursuant to the exercise of such Options or the
conversion or exchange of such Convertible Securities;
(b) if such Options or Convertible Securities by their terms
shall provide in any manner for any increase in the consideration payable to the
Company, or decrease in the number of Additional Shares of Common Stock
issuable, upon the exercise, conversion or exchange thereof, the Exercise Price
computed upon the original issue, sale, grant or assumption of such Options or
Convertible Securities (or upon the fixing of the record date with respect
thereto), and any subsequent adjustments in such Exercise Price, shall, upon any
such increase in consideration or decrease in the number of Additional Shares of
Common Stock issuable becoming effective, be recomputed to reflect such increase
or decrease insofar as it affects such Options, or the rights of conversion or
exchange under such Convertible Securities, as are outstanding at the time such
increase or decrease becomes effective;
(c) upon the expiration of any such Options or of the rights
of conversion or exchange under any such Convertible Securities that shall not
have been exercised, or upon purchase by the Company and cancellation or
retirement of any such Options that shall not have been exercised or of any such
Convertible Securities the rights of conversion or exchange under which shall
not have been exercised, the Exercise Price computed upon the original issue,
sale, grant or assumption of such Options or Convertible Securities (or upon the
fixing of the record date with respect thereto), and any subsequent adjustments
in such Exercise Price, shall, upon such expiration, cancellation or retirement,
be recomputed as if:
(i) in the case of Options or of Convertible
Securities, the only Additional Shares of Common Stock issued
or sold were the Additional Shares of Common Stock, if any,
actually issued or sold upon the exercise of such Options or
the conversion or exchange of such Convertible Securities and
the consideration received thereupon was
(A) in the case of Options, an amount equal
to (x) the consideration actually received by the Company for
the issue, sale, grant or assumption of all such Options, plus
(y) the consideration actually received by the Company upon
exercise of any such Options, minus (z) the consideration paid
by the Company for any purchase of such Options that were not
exercised; or
(B) in the case of Convertible Securities,
an amount equal to (x) the consideration actually received by
the Company for the issue, sale, grant or assumption of all
such Convertible Securities (unless theretofore taken into
account pursuant to clause (ii) below) which were actually
converted or exchanged, plus (y) the consideration actually
received by the Company upon such conversion or exchange,
minus (z) the consideration paid by the Company for any
purchase of such Convertible Securities the rights of
conversion or exchange under which were not exercised.
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(d) no readjustment pursuant to subdivision (b) above shall
have the effect of increasing the Exercise Price by an amount in excess of the
amount of the adjustment thereof originally made pursuant to the issue, sale,
grant or assumption of such Options or Convertible Securities.
"Business Day" shall mean any day of the year which is not a
Saturday, Sunday or a day on which banks are required or authorized to close in
the State of New York.
8.4 Treatment of Stock Dividends, Stock Splits, etc. In case the
Company at any time or from time to time after the Effective Date shall fix a
record date for the determination of holders of any class of securities entitled
to receive any dividend or other distribution on any class of stock of the
Company payable in Common Stock, or shall otherwise effect any subdivision of
the outstanding shares of Common Stock into a greater number of shares of Common
Stock, then, and in each such case, Additional Shares of Common Stock shall be
deemed to be issued (a) in the case of any such dividend or other distribution,
immediately after the close of business on such record date, or (b) in the case
of any such subdivision, at the close of business on the day immediately prior
to the day upon which such corporate action shall have become effective.
8.5 Computation of Consideration. For the purposes of this Section
8:
(a) The consideration for any Additional` Shares of Common
Stock actually issued or sold or for the issue, sale, grant or assumption of any
Options or Convertible Securities, irrespective of the accounting treatment of
such consideration, shall
(i) insofar as it consists of cash, be
computed as the amount of cash actually received by the
Company;
(ii) insofar as it consists of consideration
(including securities as defined in the Securities Act) other
than cash, be computed as the market value thereof at the time
of any such issue, sale, grant or assumption as determined in
good faith by the Board of Directors of the Company (which
determination shall be evidenced in a certificate delivered
promptly to each Holder and which determination shall be
subject to the procedures for disagreement as provided in
Section 8.2.2); and
(iii) insofar as Additional Shares of Common
Stock are issued or sold, options or Convertible Securities
are issued, sold, granted or assumed together with other stock
or securities or other assets of the Company for a
consideration that covers both, be the proportion of such
consideration (computed as provided in clauses (i) and (ii)
above) allocable to such Additional Shares of Common Stock or
Convertible Securities as determined in good faith by the
Board of Directors of the Company (which determination shall
be evidenced in a certificate delivered promptly to each
Holder and which determination shall be subject to the
procedures for disagreement as provided in Section 8.2.2).
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(b) The following shall be deemed to be issued without
consideration: (i) all Additional Shares of Common Stock, Options or Convertible
Securities issued in payment of any dividend or other distribution on any class
of stock of the Company; and (ii) all Additional Shares of Common Stock issued
to effect a subdivision of the outstanding shares of Common Stock into a greater
number of shares of Common Stock otherwise than by payment of a dividend in
Common Stock. Additional Shares of Common Stock, Options or Convertible
Securities issued to directors, management, employees and related parties shall
be deemed to be issued (i) without consideration if not issued for cash or
property and (ii) for less than either the Exercise Price or the Market Price to
the extent that any cash or the fair value of property, as determined in good
faith by the Board of Directors, received for such securities is less than the
lesser of the Exercise Price or the Market Price of such securities.
(c) Additional Shares of Common Stock deemed to have been
issued for consideration pursuant to Section 8.3 shall be deemed to have been
issued for a consideration per share determined by dividing
(i) the total amount, if any, actually
received by the Company as consideration for the issue, sale,
grant or assumption of the Options or Convertible Securities
in question, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for
a subsequent adjustment of such consideration) payable to the
Company upon the exercise of all such Options or the
conversion or exchange of all such Convertible Securities or,
in the case of Options for Convertible Securities, the
exercise of all such Options for Convertible Securities and
the conversion or exchange of all such Convertible Securities,
in each instance computing such consideration as provided in
the foregoing subdivision (a), by
(ii) the maximum number of shares of Common
Stock (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the
exercise of such Options or the conversion or exchange of such
Convertible Securities or, in the case of Options for
Convertible Securities, the exercise of such Options and the
conversion or exchange of such Convertible Securities.
8.6 Adjustments for Combinations, etc. In case the outstanding
shares of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Exercise Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
increased proportionately.
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8.7 Merger or Consolidation. In the event of (i) any
reclassification (including, without limitation, a reclassification effected by
means of an exchange or tender offer by the Company or any Subsidiary) or change
of outstanding Common Stock (other than a change relating to par value, or as a
result of a subdivision or combination), (ii) any consolidation, merger or
combination of the Company with another corporation as a result of which holders
of Common Stock shall be entitled to receive securities or other assets
(including cash) with respect to or in exchange for Common Stock or (iii) any
sale or conveyance of the assets of the Company as, or substantially as, an
entirety to any other corporation as a result of which holders of Common Stock
shall be entitled to receive securities or other assets (including cash) with
respect to or in exchange for Common Stock, then the Company or the successor or
purchasing corporation, as the case may be, shall execute and deliver to the
Holder upon surrender of the Warrant Certificate held by such Holder a
supplemental warrant agreement providing that the holder of each Warrant then
outstanding or to be outstanding shall have the right thereafter (until the
expiration of such Warrant) to receive, upon full exercise of such Warrant, the
kind and amount of shares of stock and/or other securities and/or property
receivable upon such consolidation or merger, by a holder of the number of
shares of Common Stock for which such Warrant might have been exercised
immediately prior to such reclassification, change, consolidation, merger,
combination, sale or conveyance. Such supplemental warrant agreement shall
provide for adjustments that shall be as nearly equivalent as practicable to the
adjustments provided for in this Section 8. The above provision of this
subsection shall similarly apply to successive events of the type described in
this Section 8.7.
8.8 Dilution in Case of Other Securities. In case any Other
Securities (as defined below) shall be issued or sold, or shall become subject
to issue or sale upon the conversion or exchange of any Common Stock or Other
Securities of the Company (or any issuer of Other Securities or any other person
referred to in Section 8.7), or shall become subject to subscription, purchase
or other acquisition pursuant to any Options issued, sold, granted or assumed by
the Company (or any such other issuer or person) for a consideration that
dilutes, in accordance with the standards established in the other provisions of
this Section 8 or otherwise, the purchase rights granted by the Warrants, then,
and in each such case, the computations, adjustments and readjustments provided
for in this Section 8 with respect to the Exercise Price shall be made and
applied as nearly as possible in the manner so provided, to determine the amount
of Other Securities that the Holder of such Warrants shall be entitled to
receive upon the exercise of such Warrants, in order to protect such Holder
against such dilution of purchase rights. "Other Securities" shall mean any
stock (other than Common Stock) of the Company or of any other person that the
Holders of the Warrants at any time shall be entitled to receive, or shall have
received, upon the exercise of the Warrants, in lieu of or in addition to Common
Stock, or that at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities pursuant to
this Section 8 or otherwise.
8.9 Minimum Adjustment of Exercise Price. If the amount of any
adjustment of the Exercise Price required pursuant to this Section 8 would be
less than $0.01, such amount shall be carried forward, and adjustment with
respect thereto shall be made at the time of and together with any subsequent
adjustment that, together with such amount and any other amount or amounts so
carried forward, shall equal at least $0.01 in the aggregate.
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8.10 Certificate of Adjustment. After each adjustment of the
Exercise Price or the amount of Warrant Securities purchasable upon exercise of
Warrants pursuant to this Section 8, the Company will promptly prepare a
certificate signed by the Chairman, President, Treasurer or Secretary of the
Company setting forth: (i) the Exercise Price, as so adjusted; (ii) the amount
of Warrant Securities purchasable upon exercise of each Warrant after such
adjustment; and (iii) a brief statement of the facts accounting for such
adjustment. The Company will promptly file such certificate with its records and
cause a brief summary thereof to be sent by ordinary first class mail to each
Holder at such Holder's last address as it shall appear on the registry books of
the Company.
8.11 Validity of Warrant Certificate. Notwithstanding any
adjustments or changes in the Exercise Price or the amount of Warrant Securities
purchasable upon exercise of Warrants, Warrant Certificates theretofore and
thereafter issued shall continue to express the Exercise Price per share and the
amount of Warrant Securities purchasable thereunder as of the date such Warrant
Certificates were originally issued; provided, the Holders shall be entitled to
exercise Warrants represented by such Warrant Certificates after giving effect
to each such adjustment and change, and such Warrant Certificate shall be deemed
to incorporate each such adjustment and change as if new Warrant Certificates
reflecting each such adjustment and change had been issued to the Holders.
8.12 No Dilution or Impairment. The Company shall not, by amendment
of its certificate of incorporation or bylaws or through any consolidation,
merger, reorganization, transfer of assets, dissolution, issue, sale, grant or
assumption of securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this agreement or the
Warrants, but will at all times, whether or not requested to do so, in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
Holders of the Warrants against dilution or other impairment. Without limiting
the generality of the foregoing, the Company takes all such action as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable Shares upon the exercise of all Warrants from time
to time outstanding.
9. Exchange and Replacement of Warrant Certificates. Each Warrant
Certificate is exchangeable, without expense, upon the surrender thereof by the
Holder at the principal executive office of the Company, for a new Warrant
Certificate of like tenor and date representing in the aggregate the right to
purchase the same number of Warrant Securities in such denominations as shall be
designated by the Holder thereof at the time of such surrender. Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any Warrant Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it,
and reimbursement to the Company of all reasonable expenses incidental thereto,
and upon surrender and cancellation of such Warrant Certificates, if mutilated,
the Company will make and deliver a new Warrant Certificate of like tenor in
lieu thereof.
11
10. Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
upon the exercise of the Warrants to purchase Common Stock, nor shall it be
required to issue scrip or pay cash in lieu of fractional interests, it being
the intent of the parties that all fractional interests shall be eliminated by
rounding any fraction up to the nearest whole number of shares of Common Stock
or other securities, properties or rights.
11. Reservation and Listing of Securities. The Company shall at all
times reserve and keep available out of its authorized capital stock, solely for
the purpose of issuance upon the exercise of the Warrants, such number of shares
of Common Stock or other securities, property or rights as shall be issuable
upon exercise thereof. The Company covenants and agrees that, upon exercise of
the Warrants and payment of the Exercise Price therefor, all shares of Common
Stock and other securities issued by the Company upon such exercise shall be
duly and validly issued, fully paid, non-assessable and not subject to the
preemptive rights of any security holder of the Company. As long as the Warrants
shall be outstanding, the Company shall use its reasonable efforts to cause the
Common Stock issuable upon the exercise of the Warrants to be listed (subject to
official notice of issuance) on all securities exchanges on which the Common
Stock may then be listed and/or quoted by NASDAQ if the Common Stock issued to
the public is so quoted.
12. Notices to Holders. Nothing contained in this Agreement shall be
construed as conferring upon the Holders the right to receive dividends or to
vote or to consent or to receive notice as a stockholder with respect to any
meetings of stockholders for the election of directors or any other matter or as
having any rights whatsoever as a stockholder of the Company. If, however, at
any time prior to the expiration of the Warrants and their exercise, any of the
following events shall occur:
(a) the Company shall set a record date for the purpose of
entitling holders of shares of Common Stock to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company;
(b) the Company shall offer to all the holders of shares of
Common Stock any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the Company, or
any option, right or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed; then, in any one or more of said events, the Company shall give
written notice of such event to each Holder at least 15 days prior to the date
fixed as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution or
offer, or entitled to vote on such proposed dissolution, liquidation, winding up
or sale. Such notice shall specify such record date or the date of closing the
transfer books, as the case may be. Failure to give such notice or any defect
therein shall not affect the validity of any action taken in connection with any
of the events described in this Section 12.
12
13. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly made and sent when delivered, or mailed by registered or certified mail,
return receipt requested:
(a) If to a Holder, to the address of such Holder as shown on
the books of the Company; or
(b) If to the Company, to the address set forth in the
Underwriting Agreement or to such other address as the Company may designate by
notice to the Holders.
14. Supplements and Amendments. The Company and the Underwriter may
from time to time supplement or amend this Agreement without the approval of any
Holders (other than the Underwriter) in order to cure any ambiguity, to correct
or supplement any provision contained herein which may be defective or
inconsistent with any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Underwriter may deem necessary or desirable and which the Company and the
Underwriter deem shall not adversely affect the interests of the Holders in any
material respect.
15. Successors. All the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the Company, the Holders and
their respective successors and permitted assigns hereunder.
16. Termination. This Agreement shall terminate at the close of
business on November ___, 2007.
17. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT AND
EACH WARRANT CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF SAID STATE.
The Company, the Underwriter and the Holders hereby agree that any
action, proceeding or claim against it arising out of, or relating in any way
to, this Agreement shall be brought and enforced in the courts of the State of
New York or of the United States of America for the Southern District of New
York, and irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company, the Underwriter and the Holders hereby irrevocably waive
any objection to such exclusive jurisdiction or inconvenient forum and also
hereby irrevocably waive any right or claim to trial by jury in connection with
any such action, proceeding or claim. Any such process or summons to be served
upon any of the Company, the Underwriter and the Holders (at the option of the
party bringing such action, proceeding or claim) may be served by transmitting a
copy thereof, by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 13 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the
party so served in any action, proceeding or claim. The Company, the Underwriter
and the Holders agree that the prevailing party(ies) in any such action or
proceeding shall be entitled to recover from the other party(ies) all of
its/their reasonable legal costs and expenses relating to such action or
proceeding and/or incurred in connection with the preparation therefor.
13
17. Entire Agreement; Modification. This Agreement (including the
Underwriting Agreement to the extent portions thereof are referred to herein)
contains the entire understanding between the parties hereto with respect to the
subject matter hereof. Except as set forth in Section 14 hereof, this Agreement
may not be modified or amended except by a writing duly signed by the Company,
Holders of Warrants or Warrant Securities representing a majority of the shares
of Common Stock issuable or issued hereunder and the party against whom
enforcement of the modification or amendment is sought.
18. Severability. If any provision of this Agreement shall be held
to be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
19. Captions. The caption headings of the Sections of this Agreement
are for convenience of reference only, and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
20. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person, corporation or entity other than the Company,
the Underwriter and any other Holders of Warrants and/or Warrant Securities any
legal or equitable right, remedy or claim under this Agreement; and this
Agreement shall be for the sole and exclusive benefit of the Company and the
Underwriter and any other Holders of Warrants and/or Warrant Securities.
21. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original and such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
ACCESS INTEGRATED TECHNOLOGIES, INC.
By:
---------------------------
Name:
Title:
Attest:
--------------------------------
Name:
Title:
14
XXXXXX XXXXXX & CO., LLC
By:
---------------------------
Name:
Title: A Member
15
EXHIBIT A
FORM OF WARRANT CERTIFICATE
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME, November ___, 2007
No. W- __________
Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that Xxxxxx Xxxxxx & Co., LLC, or
registered assigns, is the registered holder of 120,000 Warrants to purchase
initially, at any time from November ___, 2004 until 5:30 p.m. New York time on
November__, 2007 (the "Expiration Date"), up to 120,000 fully paid and
nonassessable shares of Common Stock, no par value (the "Common Stock"), of
Access Integrated Technologies, Inc., a Delaware corporation (the "Company"), at
the initial exercise price, subject to adjustment in certain events (the
"Exercise Price"), of $6.25 per share upon surrender of this Warrant Certificate
and payment of the Exercise Price, at an office or agency of the Company, but
subject to the conditions set forth herein and in the Underwriter's Warrant
Agreement dated as of November ___, 2003 by and between the Company and Xxxxxx
Xxxxxx & Co, LLC (the "Warrant Agreement"). Payment of the Exercise Price, shall
be made by certified or official bank check in New York Clearing House funds
payable to the order of the Company and by surrender of this Warrant
Certificate.
No Warrant may be exercised after 5:30 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants issued pursuant to 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 the
Company and the holders (the words "holders" or "holder" meaning the registered
holders or registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price and the amount the type and/or number of the Company's
securities issuable hereunder may, subject to certain conditions, be adjusted.
Subject to Section 8.6 of the Warrant Agreement, in such event, the Company
will, at the request of the holder, issue a new Warrant Certificate evidencing
the adjustment in the Exercise Price and the number and/or type of securities
issuable upon the exercise of the Warrants; provided, however, that the failure
of the Company to issue such new Warrant Certificates shall not in any way
change, alter or otherwise impair the rights of the holder as set forth in the
Warrant Agreement.
16
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, 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 herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Warrant Certificate, the Company shall forthwith issue to the holder hereof a
new Warrant Certificate representing such number of unexercised Warrants. The
Company may deem and treat the registered holder(s) hereof 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,
and of any distribution to the holder(s) hereof, and for all other purposes, and
the Company shall not be affected by any notice to the contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
to be duly executed under its corporate seal.
Dated as of November ___, 2003
ACCESS INTEGRATED TECHNOLOGIES, INC.
[SEAL]
By:
---------------------------------
Name:
Title:
Attest:
--------------------------------
Name:
Title:
17
ANNEX A
TO WARRANT CERTIFICATE
FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.1
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase 120,000 shares of Common
Stock and herewith tenders in payment for such securities a certified or
official bank check payable in New York Clearing House Funds to the order of
___________________________________ in the amount of $_________________, all in
accordance with the terms of Section 3 of the Warrant Agreement dated as of
November ___, 2003 by and between Access Integrated Technologies, Inc. and
Xxxxxx Xxxxxx & Co., LLC. The undersigned requests that a certificate for such
securities be registered in the name of ________________________________ whose
address is _____________________________________________________________________
__________________________________________________and that such certificate be
delivered to _________________________ whose address is _____________________
_____________________________________________________________________________.
Dated: Signature
--------------- -------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate)
----------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
18
ANNEX B
TO WARRANT CERTIFICATE
FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.2
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase 120,000 shares of Common
Stock all in accordance with the terms of Section 3.2 of the Warrant Agreement
dated as of November ___, 2003 by and between Access Integrated Technologies,
Inc. and Xxxxxx Xxxxxx & Co., LLC. The undersigned requests that a certificate
for such securities be registered in the name of _______________________ whose
address is _____________________________ and that such certificate be delivered
to _____________________________ whose address is_______________________________
_______________________________________________________________________________.
Dated: Signature
--------------- -------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate)
----------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
19
ANNEX C
TO WARRANT CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED _______________________________ hereby sells,
assigns and transfers unto _____________________________________________________
(Please print name and address of transferee)
the within Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_____________________________ Attorney to transfer the within Warrant
Certificate on the books of the within-named Company, with full power of
substitution.
Dated: Signature
--------------- -------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate)
----------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
20
