Exhibit 2.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "AGREEMENT") is dated as of
October 26, 2004, among Access Integrated Technologies, Inc., a Delaware
corporation (the "COMPANY"), and the investors identified on the signature pages
hereto (each, an "INVESTOR" and collectively, the "INVESTORS").
WHEREAS, subject to the terms and conditions set forth in this Agreement
and pursuant to Section 4(2) of the Securities Act (as defined below) and Rule
506 promulgated thereunder, the Company desires to issue and sell to each
Investor, and each Investor, severally and not jointly, desires to purchase from
the Company certain securities of the Company, as more fully described in this
Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Investors agree
as follows:
Article I.
DEFiNITIONS
1.1 DEFINITIONS. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms shall have
the meanings indicated in this Section 1.1:
"ACTION" means any action, claim, suit, inquiry, notice of violation,
proceeding or investigation pending or threatened in writing against or
affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency,
regulatory authority (federal, state, county, local or foreign), stock market,
stock exchange or trading facility.
"AFFILIATE" means any Person that, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 144.
"BUSINESS DAY" means any day except Saturday, Sunday and any day which
shall be a federal legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other governmental action
to close.
"CLOSING" means the closing of the purchase and sale of the Shares
pursuant to Article II.
"CLOSING DATE" means the date of the Closing.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the Class A Common Stock of the Company, $.001
par value per share, and any securities into which such Class A Common Stock may
hereafter be reclassified.
"COMMON STOCK EQUIVALENTS" means any options, warrants, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities (debt or equity), rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire,
directly or indirectly, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
issue additional shares of Common Stock at any time.
"COMPANY COUNSEL" means ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"INVESTMENT AMOUNT" means, with respect to each Investor, the
investment amount indicated below such Investor's name on the signature page of
this Agreement.
"LIEN" means any lien, charge, encumbrance, security interest, right
of first refusal or other restrictions of any kind.
"PURCHASE PRICE" equals $3.89 and applies to each Share purchased
hereunder.
"PERSON" means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
"REGISTRATION STATEMENT" means a registration statement meeting the
requirements set forth in the Registration Rights Agreement and covering the
resale by the Investors of the Shares.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated on or about the Closing Date, among the Company and the
Investors, in the form of EXHIBIT A hereto.
"RULE 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"SECURITIES" means the Shares.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means the shares of Common Stock issued to the Investors
pursuant to this Agreement.
"SHORT SALES" has the meaning set forth in Section 3.2(f).
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"SUBSIDIARY" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of stock or other equity interest entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereto is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"TRADING DAY" means (i) a day on which the Common Stock is traded on a
Trading Market, or (ii) if the Common Stock is not listed on a Trading Market, a
day on which the Common Stock is traded in the over-the-counter market is quoted
in the over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding to its functions
of reporting prices); provided, that in the event that the Common Stock is not
listed or quoted as set forth in (i) or (ii) hereof, then Trading Day shall mean
a Business Day.
"TRADING MARKET" means whichever of the New York Stock Exchange, the
American Stock Exchange, the NASDAQ National Market, the NASDAQ SmallCap Market
or OTC Bulletin Board on which the Common Stock is listed or quoted for trading
on the date in question.
"TRANSACTION DOCUMENTS" means this Agreement, the Registration Rights
Agreement and any other documents or agreements executed in connection with the
transactions contemplated hereunder.
Article II.
PURCHASE AND SALE
2.1 CLOSING. Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to each Investor, and
each Investor shall, severally and not jointly, purchase from the Company, the
Closing Shares (as defined below) at the Purchase Price, representing such
Investor's Investment Amount. The Closing shall take place, as soon as
practicable after the date this Agreement is executed and delivered by the
parties and the Company provides to each Investor the last of the two documents
set forth in Sections 2.2 (a) (ii) and 2.2 (a) (iii), or at such other location
or time as the parties may agree. In order to facilitate a timely Closing, each
Investor hereby agrees to deliver its Investment Amount, in U.S. dollars and
immediately available funds, by wire transfer to an account designated by the
Company by the third (3rd) Business Day following the date upon which the
Company provides to each Investor the last of the two documents set forth in
Sections 2.2 (a) (ii) and 2.2 (a) (iii).
2.2 CLOSING DELIVERIES. (a) At the Closing, the Company shall deliver or
cause to be delivered to each Investor the following:
(i) a certificate evidencing a number of Shares (the "CLOSING
SHARES") equal to such Investor's Investment Amount divided by the Purchase
Price, registered in the name of such Investor;
(ii) the legal opinion of Company Counsel, in agreed form,
addressed to the Investors; and
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(iii) the Registration Rights Agreement, duly executed by the
Company.
(b) At the Closing, each Investor shall deliver or cause to be
delivered to the Company the following:
(i) its Investment Amount, in United States dollars and in
immediately available funds, by wire transfer to an account designated in
writing by the Company for such purpose; and
(ii) the Registration Rights Agreement, duly executed by such
Investor.
Article III.
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby makes
the following representations and warranties to each Investor:
(a) SUBSIDIARIES. The Company has no direct or indirect Subsidiaries
other than those listed in SCHEDULE 3.1(A). Except as disclosed in SCHEDULE
3.1(A), the Company owns, directly or indirectly, all of the capital stock of
each Subsidiary free and clear of any and all Liens, and all the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights.
(b) ORGANIZATION AND QUALIFICATION. Each of the Company and each
Subsidiary is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. Neither the Company nor any Subsidiary is in violation
of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of the
Company and each Subsidiary is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which
the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not, individually or in the aggregate, have
or reasonably be expected to result in (i) an adverse effect on the legality,
validity or enforceability of any Transaction Document, (ii) a material and
adverse effect on the results of operations, assets, prospects, business or
condition (financial or otherwise) of the Company and the Subsidiaries, taken as
a whole, or (iii) an adverse impairment to the Company's ability to perform on a
timely basis its obligations under any Transaction Document (any of (i), (ii) or
(iii), a "MATERIAL ADVERSE EFFECT").
(c) AUTHORIZATION; ENFORCEMENT. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
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contemplated thereby have been duly authorized by all necessary action on the
part of the Company and, if applicable, its stockholders, and no further action
is required by the Company or its stockholders in connection therewith. Each
Transaction Document has been (or upon delivery will have been) duly executed by
the Company and, when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms.
(d) NO CONFLICTS. The execution, delivery and performance of the
Transaction Documents by the Company, the issuance and sale of the Securities
and the consummation by the Company of the transactions contemplated thereby do
not and will not (i) conflict with or violate any provision of the Company's or
any Subsidiary's certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company or
any Subsidiary is a party or by which any property or asset of the Company or
any Subsidiary is bound or affected, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company or a Subsidiary is
subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company or a Subsidiary is bound or affected;
except in the case of each of clauses (ii) and (iii), such as could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.
(e) FILINGS, CONSENTS AND APPROVALS. The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents,
other than (i) the filing with the Commission of one or more Registration
Statements in accordance with the requirements of the Registration Rights
Agreement, (ii) filings required by federal or state securities laws, which the
Company will promptly make, (iii) the filings required in accordance with
Section 4.5, (iv) an additional listing application filing with the American
Stock Exchange and matters related thereto, and (v) those that have been made or
obtained prior to the date of this Agreement.
(f) ISSUANCE OF THE SECURITIES. The Securities have been duly
authorized and, when issued and paid for in accordance with the Transaction
Documents, will be duly and validly issued, and the Shares will be fully paid
and nonassessable, free and clear of all Liens. The issuance of the Securities
is not subject to any preemptive or similar rights to subscribe for or purchase
securities. The Company has reserved from its duly authorized capital stock all
of the Shares issuable pursuant to this Agreement.
(g) CAPITALIZATION. The number of shares and type of all authorized,
issued and outstanding capital stock of the Company, and all shares of Common
Stock reserved for issuance under the Company's various option and incentive
plans, is set forth in SCHEDULE 3.1(G). Except as set forth in SCHEDULE 3.1(G),
no securities of the Company are entitled to preemptive or similar rights, and
no Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
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contemplated by the Transaction Documents. Except as a result of the purchase
and sale of the Securities and except as disclosed in SCHEDULE 3.1(G), there are
no outstanding Common Stock Equivalents. Except as set forth in SCHEDULE 3.1(G),
the issue and sale of the Securities will not, immediately or with the passage
of time, obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Investors) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities.
(h) SEC REPORTS; FINANCIAL STATEMENTS. The Company has filed all
reports required to be filed by it under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months
preceding the date hereof (or such shorter period as the Company was required by
law to file such reports) (the foregoing materials are incorporated herein by
reference and are being collectively referred to herein as the "SEC REPORTS"
and, together with the Schedules to this Agreement (if any), the "DISCLOSURE
MATERIALS") on a timely basis or has timely filed a valid extension of such time
of filing and has filed any such SEC Reports prior to the expiration of any such
extension. The SEC Reports incorporated herein by reference include, without
limitation, the Company's Registration Statement (No. 333-17115) on Form SB-2,
including the audited and interim unaudited financial statements included
therein, and the Form 10-QSB for the quarter ended June 30, 2004, including the
unaudited interim financial statements included therein. As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in effect at the
time of filing. Such financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved ("GAAP"), except as may be otherwise specified in such
financial statements or the notes thereto, and fairly present in all material
respects the financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
(i) PRESS RELEASES. The press releases disseminated by the Company
during the two (2) years preceding the date of this Agreement taken as a whole
do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(j) MATERIAL CHANGES. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports, (i) the Company has not incurred any liabilities (contingent or
otherwise) other than trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice, or (ii) the Company
has not altered its method of accounting or the identity of its auditors. Since
the date of the latest SEC Report, except as specifically disclosed in the SEC
Reports, (i) there has been no event, occurrence or development that has had or
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that could reasonably be expected to result in a Material Adverse Effect, (ii)
the Company has not declared or made any dividend or distribution of cash or
other property to its stockholders or purchased, redeemed or made any agreements
to purchase or redeem any shares of its capital stock, and (iii) the Company has
not issued any equity securities to any officer, director or Affiliate, except
pursuant to existing Company stock option plans. The Company does not have
pending before the Commission any request for confidential treatment of
information.
(k) LITIGATION. There is no Action which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) except as set forth in the SEC Reports,
could, if there were an unfavorable decision, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect. Except as
set forth in the SEC Reports, neither the Company nor any Subsidiary, nor any
director or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty. There has not been, and to the knowledge of
the Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer of
the Company. The Commission has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
or any Subsidiary under the Exchange Act or the Securities Act.
(l) LABOR RELATIONS. No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company.
(m) COMPLIANCE. Neither the Company nor any Subsidiary (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body, or (iii)
is or has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety and employment and labor matters, except
in each case as could not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect. The Company is in compliance
with the applicable requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended,
and the rules and regulations thereunder, except where such noncompliance could
not have or reasonably be expected to result in a Material Adverse Effect.
(n) REGULATORY PERMITS. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits would not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect ("Material
Permits"), and neither the Company nor any Subsidiary has received any notice of
any Action relating to the revocation or modification of any Material Permit.
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(o) TITLE TO ASSETS. Except as set forth on Schedule 3.1(o), the
Company and the Subsidiaries have good and marketable title in fee simple to all
real property owned by them that is material to their respective businesses and
good and marketable title in all personal property owned by them that is
material to their respective businesses, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries. Any real property and
facilities held under lease by the Company and the Subsidiaries are held by them
under valid, subsisting and enforceable leases of which the Company and the
Subsidiaries are in compliance, except as could not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect.
(p) PATENTS AND TRADEMARKS. The Company and the Subsidiaries have, or
have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights that are necessary or material for use in connection with their
respective businesses as described in the SEC Reports and which the failure to
so have could, individually or in the aggregate, have or reasonably be expected
to result in a Material Adverse Effect (collectively, the "INTELLECTUAL PROPERTY
RIGHTS"). Neither the Company nor any Subsidiary has received a written notice
that the Intellectual Property Rights used by the Company or any Subsidiary
violates or infringes upon the rights of any Person. Except as set forth in the
SEC Reports, to the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights.
(q) INSURANCE. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the
Company and the Subsidiaries are engaged. The Company has no reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business without a significant increase in cost.
(r) TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. Except as set forth in
the SEC Reports, none of the officers or directors of the Company and, to the
knowledge of the Company, none of the employees of the Company is presently a
party to any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
(s) INTERNAL ACCOUNTING CONTROLS. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management's general
or specific authorization, and (iv) the recorded accounting records for assets
is compared with the existing assets at reasonable intervals and appropriate
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action is taken with respect to any differences. The Company has established
disclosure controls and procedures (as defined in Exchange Act rules 13a-15 and
15d-l5) for the Company and designed such disclosure controls and procedures to
ensure that material information relating to the Company and its Subsidiaries is
made known to the certifying officers by others within those entities,
particularly during the period in which the Company's Form 10-KSB or 10-QSB, as
the case may be, is being prepared. The Company's certifying officers have
evaluated the effectiveness of the Company's controls and procedures as of the
end of the period covered by the Form 10-QSB for the Company's most recently
ended fiscal quarter (such date, the "EVALUATION DATE"). The Company presented
in its most recently filed Form 10-KSB or Form 10-QSB the conclusions of the
certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no significant changes in the Company's
internal controls (as such term is defined in Item 307(b) of Regulation S-B
under the Exchange Act) or, to the Company's knowledge, in other factors that
could significantly affect the Company's internal controls.
(t) SOLVENCY. Based on the financial condition of the Company as of
the Closing Date (and assuming that the Closing shall have occurred), (i) the
Company's fair saleable value of its assets exceeds the amount that will be
required to be paid on or in respect of the Company's existing debts and other
liabilities (including known contingent liabilities) as they mature; (ii) the
Company's assets do not constitute unreasonably small capital to carry on its
business for the current fiscal year as now conducted and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected capital
requirements and capital availability thereof and (iii) the current cash flow of
the Company, together with the proceeds the Company would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debt
when such amounts are required to be paid. The Company does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).
(u) CERTAIN FEES. Except as described in SCHEDULE 3.1(U), no brokerage
or finder's fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
this Agreement. The Investors shall have no obligation with respect to any fees
or with respect to any claims (other than such fees or commissions owed by an
Investor pursuant to written agreements executed by such Investor which fees or
commissions shall be the sole responsibility of such Investor) made by or on
behalf of other Persons for fees of a type contemplated in this Section that may
be due in connection with the transactions contemplated by this Agreement.
(v) CERTAIN REGISTRATION MATTERS. Assuming the accuracy of the
Investors' representations and warranties set forth in Section 3.2(b)-(e), the
offer and sale of the Securities by the Company to the Investors under the
Transaction Documents is exempt from the registration requirements of the
Securities Act and from the registration or qualification requirements of all
9
applicable state securities laws. Except as described in SCHEDULE 3.1(V), no
Person has any rights (including "piggy-back" registration rights) to have any
securities of the Company registered with the Commission or any other
governmental authority.
(w) LISTING AND MAINTENANCE REQUIREMENTS. Except as specified in the
SEC Reports, the Company has not, in the two years preceding the date hereof,
received notice from any Trading Market to the effect that the Company is not in
compliance with the listing or maintenance requirements thereof. The Company is,
and has no reason to believe that it will not in the foreseeable future continue
to be, in compliance with the listing and maintenance requirements for continued
listing of the Common Stock on the applicable Trading Markets, including the
eligibility rules thereunder. The issuance and sale of the Securities under the
Transaction Documents does not contravene the rules and regulations of the
Trading Market on which the Common Stock is currently listed or quoted, and no
approval of the shareholders of the Company thereunder is required for the
Company to issue and deliver to the Investors the Securities contemplated by
Transaction Documents. An application for the listing of the Shares has been
submitted to the American Stock Exchange.
(x) INVESTMENT COMPANY. The Company is not, and is not an Affiliate
of, an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
(y) APPLICATION OF TAKEOVER PROTECTIONS. The Company has taken all
necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company's
certificate of incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Investors as a
result of the Investors and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without
limitation the Company's issuance of the Securities and the Investors' ownership
of the Securities.
(z) NO ADDITIONAL AGREEMENTS. The Company does not have any agreement
or understanding with any Investor with respect to the transactions contemplated
by the Transaction Documents other than as specified in this Agreement. Without
limiting the generality of the foregoing, the Company acknowledges and agrees
that no Investor has made any representation or warranty with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 3.2.
(aa) DISCLOSURE. Except as permitted under Section 4.8, the Company
confirms that neither it nor any Person acting on its behalf has provided any of
the Investors or their agents or counsel with any information that the Company
believes constitutes material, non-public information. The Company understands
and confirms that the Investors will rely on the foregoing representations and
covenants in effecting transactions in securities of the Company. All disclosure
provided to the Investors regarding the Company, its business and the
transactions contemplated hereby, furnished by or on behalf of the Company
(including the Company's representations and warranties set forth in this
Agreement), when taken as a whole, are true and correct and do not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
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3.2 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each Investor hereby,
for itself and for no other Investor, represents and warrants to the Company as
follows:
(a) ORGANIZATION; AUTHORITY. Such Investor is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate, partnership or
limited liability company power and authority to enter into and to consummate
the transactions contemplated by the applicable Transaction Documents and
otherwise to carry out its obligations thereunder. The execution, delivery and
performance by such Investor of the transactions contemplated by this Agreement
has been duly authorized by all necessary corporate or, if such Investor is not
a corporation, such partnership, limited liability company or other applicable
like action, on the part of such Investor. Each of this Agreement and the
Registration Rights Agreement has been (or upon delivery will have been) duly
executed by such Investor, and when delivered by such Investor in accordance
with terms hereof, will constitute the valid and legally binding obligation of
such Investor, enforceable against it in accordance with its terms.
(b) INVESTMENT INTENT. Such Investor is acquiring the Securities as
principal for its own account for investment purposes only and not with a view
to or for distributing or reselling such Securities or any part thereof, without
prejudice, however, to such Investor's right at all times to sell or otherwise
dispose of all or any part of the Securities in compliance with applicable
federal and state securities laws. Subject to the immediately preceding
sentence, nothing contained herein shall be deemed a representation or warranty
by such Investor to hold the Securities for any period of time. Such Investor is
acquiring the Securities hereunder in the ordinary course of its business. Such
Investor does not have any agreement or understanding, directly or indirectly,
with any Person to distribute any of the Securities. Such Investor does not have
any agreement or understanding, directly or indirectly, with any other Investor
with respect to (i) the acquisition of the Securities, (ii) the holding of the
Securities, (iii) the disposition of the Securities, or (iv) the voting of the
Securities.
(c) INVESTOR STATUS. At the time such Investor was offered the
Securities, it was, and at the date hereof it is, an "accredited investor" as
defined in Rule 501(a) under the Securities Act. Such Investor is not a
registered broker-dealer under Section 15 of the Exchange Act. To such
Investor's knowledge, neither such Investor nor any officer or director of such
Investor, in his or her capacity as such, is subject to any investigation or
order by the Commission or any administrative organization with oversight over
any Trading Market that relates to the acquisition, disposition, voting or
holding of any securities.
(d) GENERAL SOLICITATION. Such Investor is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.
(e) ACCESS TO INFORMATION. Such Investor acknowledges that it has
reviewed the Disclosure Materials and has been afforded (i) the opportunity to
ask such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Subsidiaries
11
and their respective financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the
Securities. Neither such inquiries nor any other investigation conducted by or
on behalf of such Investor or its representatives or counsel shall modify, amend
or affect such Investor's right to rely on the truth, accuracy and completeness
of the Disclosure Materials and the Company's representations and warranties
contained in the Transaction Documents.
(f) CERTAIN TRADING ACTIVITIES. Such Investor has not directly or
indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with such Investor, engaged in any transactions in the securities
of the Company (including, without limitations, any Short Sales involving the
Company's securities) since the time that such Investor was first contacted by
the Company or ▇▇▇▇ Capital Partners, LLC regarding the Shares to be purchased
under this Agreement. For purposes of this Section, "SHORT SALES" include,
without limitation, all "short sales" as defined in Rule 3b-3 of the Exchange
Act and include all types of direct and indirect stock pledges, forward sale
contracts, options, puts, calls, short sales, swaps and similar arrangements
(including on a total return basis), and sales and other transactions through
non-US broker dealers or foreign regulated brokers having the effect of hedging
the securities or investment made under this Agreement. Such Investor covenants
that neither it nor any Person acting on its behalf or pursuant to any
understanding with it will engage in any transactions in the securities of the
Company (including Short Sales) prior to the time that the transactions
contemplated by this Agreement are publicly disclosed.
(g) INDEPENDENT INVESTMENT DECISION. Such Investor has independently
evaluated the merits of its decision to purchase Securities pursuant to this
Agreement, such decision has been independently made by such Investor and such
Investor confirms that it has only relied on the advice of its own business
and/or legal counsel and not on the advice of any other Investor's business
and/or legal counsel in making such decision.
Article IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 (a) The Securities may only be disposed of in compliance with state and
federal securities laws. In connection with any transfer of the Securities other
than pursuant to an effective registration statement, to the Company, to an
Affiliate of an Investor or in connection with a pledge as contemplated in
Section 4.1(b), the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor, the form and substance
of which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Shares
under the Securities Act.
(b) Certificates evidencing the Shares will contain the following
legend, until such time as they are not required under Section 4.1(c):
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
12
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION OR
QUALIFICATION REQUIREMENTS OF ALL APPLICABLE STATE SECURITIES
LAWS, AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH
EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO
THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.
The Company acknowledges and agrees that an Investor may from time to
time pledge and/or grant a security interest in some or all of the Shares
pursuant to a bona fide margin agreement in connection with a bona fide margin
account and, if required under the terms of such agreement or account, such
Investor may transfer pledged or secured Shares to the pledgees or secured
parties. Such a pledge or transfer would not be subject to approval or consent
of the Company and no legal opinion of legal counsel to the pledgee, secured
party or pledgor shall be required in connection with the pledge, but such legal
opinion may be required in connection with a subsequent transfer following
default by the Investor transferee of the pledge. No notice shall be required of
such pledge. At the appropriate Investor's expense, the Company will execute and
deliver such reasonable documentation as a pledgee or secured party of Shares
may reasonably request in connection with a pledge or transfer of the Shares
including the preparation and filing of any required prospectus supplement under
Rule 424(b)(3) of the Securities Act or other applicable provision of the
Securities Act to appropriately amend the list of selling stockholders
thereunder.
(c) Certificates evidencing the Shares shall not contain any legend
(including the legend set forth in Section 4.1(b)): (i) following a sale of such
Shares pursuant to an effective registration statement (including the
Registration Statement), or (ii) following a sale of such Shares pursuant to
Rule 144, or (iii) while such Shares are eligible for sale under Rule 144(k), or
(iv) if such legend is not required under applicable requirements of the
Securities Act (including judicial interpretations and pronouncements issued by
the Staff of the Commission). Following such time as restrictive legends are not
required to be placed on certificates representing Shares, the Company will, no
later than three Trading Days following the delivery by an Investor to the
Company or the Company's transfer agent of a certificate representing such
Shares containing a restrictive legend, deliver or cause to be delivered to such
Investor a certificate representing such Shares that is free from all
restrictive and other legends. The Company may not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section.
13
4.2 FURNISHING OF INFORMATION. As long as any Investor owns the Securities,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to the Exchange Act. As long as any
Investor owns Securities, but only until all such Securities may be sold under
Rule 144(k), if the Company is not required to file reports pursuant to such
laws, it will prepare and furnish to the Investors and make publicly available
in accordance with Rule 144(c) such information as is required for the Investors
to sell such Securities under Rule 144. The Company further covenants that it
will take such further action as any holder of Securities may reasonably
request, all to the extent required from time to time to enable such Person to
sell such Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144.
4.3 INTEGRATION. The Company shall not, and shall use its best efforts to
ensure that no Affiliate of the Company shall, sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Securities to the Investors hereunder in a manner that would require the
registration under the Securities Act of the sale of the Securities to the
Investors, or that would be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of any Trading Market.
4.4 INTENTIONALLY OMITTED.
4.5 SECURITIES LAWS DISCLOSURE; PUBLICITY. Prior to the opening of the
Trading Market on the first Trading Day following the date of this Agreement,
the Company shall issue a press release reasonably acceptable to the investors
disclosing the transactions contemplated hereby and file a Current Report on
Form 8-K disclosing the material terms of the transactions contemplated hereby.
In addition, the Company will make such other filings and notices in the manner
and time required by the Commission and the Trading Market on which the Common
Stock is listed. Notwithstanding the foregoing, the Company shall not publicly
disclose the name of any Investor, or include the name of any Investor in any
filing with the Commission (other than the Registration Statement and any
exhibits to filings made in respect of this transaction in accordance with
periodic filing requirements under the Exchange Act) or any regulatory agency or
Trading Market, without the prior written consent of such Investor, except to
the extent such disclosure is required by law or Trading Market regulations, in
which case the Company shall provide the Investors with prior notice of such
disclosure.
4.6 LOCK-UP. The Company shall take such actions as are required to ensure
that none of its executive officers shall sell more than five percent (5%) of
the total number of shares of Common Stock that such executive officer
beneficially owns as of the Closing Date during the period commencing on the
Closing Date and ending on the date that is three months following the Closing
Date without the consent of the Investors; PROVIDED, HOWEVER, that an executive
officer may transfer an unlimited number of shares of such Common Stock for
estate or tax planning purposes, so long as such transfer is to a Person that is
and remains at all times controlled by such executive officer and such Person
enters into a lock-up agreement with the Company with respect to such
transferred shares that contains provisions substantially similar to those
provided for in this Section 4.6. The foregoing limitation shall expire with
respect to any officer, upon his or her termination of employment with the
Company.
14
4.7 INDEMNIFICATION. In addition to the indemnity provided in the
Registration Rights Agreement, each of the parties hereto indemnify and hold
each other and their respective directors, officers, shareholders, partners,
employees and agents (each, a "Party") harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable
attorneys' fees and costs of investigation (collectively, "Losses") that any
such indemnified Party may suffer or incur as a result of or relating to any
misrepresentation, breach or inaccuracy of any representation, warranty,
covenant or agreement made by the indemnifying Party in any Transaction
Document. The Company will reimburse any such indemnified Party for its
reasonable legal and other expenses indemnified by the Company hereunder
(including the cost of any investigation, preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are incurred.
4.8 NON-PUBLIC INFORMATION. The Company covenants and agrees that neither
it nor any other Person acting on its behalf will provide any Investor or its
agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such Investor shall have
executed a written agreement regarding the confidentiality and use of such
information. The Company understands and confirms that each Investor shall be
relying on the foregoing representations in effecting transactions in securities
of the Company.
4.9 USE OF PROCEEDS. The Company shall use the net proceeds from the sale
of the Securities hereunder primarily for a contemplated acquisition and
acquisition related expenses and capital improvements, and any additional
proceeds shall be used for general corporate purposes (PROVIDED, HOWEVER, should
the Company not consummate such acquisition, the net proceeds from the sale of
the Securities hereunder shall be used for general corporate purposes), and not
for the satisfaction of any portion of the Company's debt (other than payment of
trade payables and accrued expenses in the ordinary course of the Company's
business and prior practices), to redeem any Common Stock or Common Stock
Equivalents or to settle any outstanding Action.
4.10 LISTING OF COMMON STOCK. The Company shall take all action necessary
to cause the Shares to be duly approved for listing on the American Stock
Exchange prior to the Closing, subject to official notice of issuance.
Article V.
MISCELLANEOUS
5.1 FEES AND EXPENSES. Each Investor and the Company shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of the Transaction Documents.
The Company shall pay all stamp and other taxes and duties levied in connection
with the sale of the Securities.
5.2 ENTIRE AGREEMENT. The Transaction Documents, together with the Exhibits
and Schedules thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements and
15
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
5.3 NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified in this Section prior to 6:30 p.m. (New York City time) on a Trading
Day, (b)the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section on a day that is not a Trading Day or later than 6:30 p.m. (New
York City time) on any Trading Day, (c) the Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
upon actual receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as follows:
If to Corporation, to:
Access Integrated Technologies, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to an Investor: To the address set forth under such Investor's name
on the signature pages hereof;
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
5.4 AMENDMENTS; WAIVERS. No provision of this Agreement may be waived or
amended except in a written instrument signed by the Company and the Investor or
Investors against whom such waiver or amendment is to be enforced. No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right.
5.5 CONSTRUCTION. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party. This Agreement
16
shall be construed as if drafted jointly by the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement or any of the Transaction
Documents.
5.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investors. Any Investor may assign any
or all of its rights under this Agreement to any Person to whom such Investor
assigns or transfers any Securities, provided such transferee agrees in writing
to be bound, with respect to the transferred Securities, by the provisions
hereof that apply to the "Investors."
5.7 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.7 (as to each
Investor Party).
5.8 GOVERNING LAW. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all Actions concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other Transaction
Documents (whether brought against a party hereto or its respective Affiliates,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in City of New York, Borough of Manhattan (the "NEW YORK
COURTS"). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of the any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Action, any claim that it is not personally subject to the jurisdiction
of any such New York Court, or that such Action has been commenced in an
improper or inconvenient forum. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such
Action by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. Each party hereto hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence a proceeding to
enforce any provisions of a Transaction Document, then the prevailing party in
such proceeding shall be reimbursed by the other party for its attorney's fees
and other costs and expenses incurred with the investigation, preparation and
prosecution of such proceeding.
5.9 SURVIVAL. The representations, warranties, agreements and covenants
contained herein shall survive the Closing and the delivery of the Securities.
17
5.10 EXECUTION. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
5.11 SEVERABILITY. If any provision of this Agreement is held to be invalid
or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
5.12 RESCISSION AND WITHDRAWAL RIGHT. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Investor exercises a right, election, demand
or option under a Transaction Document and the Company does not timely perform
its related obligations within the periods therein provided, then such Investor
may rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights.
5.13 REPLACEMENT OF SECURITIES. If any certificate or instrument evidencing
any Securities is mutilated, lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities. If a replacement
certificate or instrument evidencing any Securities is requested due to a
mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.
5.14 REMEDIES. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Investors and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
5.15 PAYMENT SET ASIDE. To the extent that the Company makes a payment or
payments to any Investor pursuant to any Transaction Document or an Investor
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
18
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
5.16 INDEPENDENT NATURE OF INVESTORS' OBLIGATIONS AND RIGHTS. The
obligations of each Investor under any Transaction Document are several and not
joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document. The decision of each Investor to
purchase Securities pursuant to the Transaction Documents has been made by such
Investor independently of any other Investor. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such Investor in connection with monitoring its
investment in the Securities or enforcing its rights under the Transaction
Documents. Each Investor shall be entitled to independently protect and enforce
its rights, including without limitation the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose.
5.17 LIMITATION OF LIABILITY. Notwithstanding anything herein to the
contrary, the Company acknowledges and agrees that the liability of an Investor
arising directly or indirectly, under any Transaction Document of any and every
nature whatsoever shall be satisfied solely out of the assets of such Investor,
and that no trustee, officer, other investment vehicle or any other Affiliate of
such Investor or any investor, shareholder or holder of shares of beneficial
interest of such a Investor shall be personally liable for any liabilities of
such Investor.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOW]
19
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
ACCESS INTEGRATED TECHNOLOGIES, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: SVP - General Counsel
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOR INVESTORS FOLLOW]
20
IN WITNESS WHEREOF, the parties have executed this Securities Purchase
Agreement as of the date first written above.
RENAISSANCE US GROWTH INVESTMENT TRUST PLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
▇▇▇▇ Capital Group, Investment Manager
Investment Amount: $550,000
Address for Notice:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇-▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
State of Residence of Investor: United
Kingdom
21
IN WITNESS WHEREOF, the parties have executed this Securities Purchase
Agreement as of the date first written above.
BFS US SPECIAL OPPORTUNITIES TRUST PLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
▇▇▇▇ Capital Group, Investment Adviser
Investment Amount: $550,000
Address for Notice:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇-▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
State of Residence of Investor: United
Kingdom
SCHEDULE 3.1(a)
LIST OF SUBSIDIARIES
1. Access Digital Media, Inc., a wholly owned subsidiary of the Company.
2. Core Technology Services, Inc., a wholly owned subsidiary of the Company.
3. Hollywood Software, Inc., a wholly owned subsidiary of the Company.
4. FiberSat Global Services, Inc., a wholly owned subsidiary of the Company.
SCHEDULE 3.1(g)
CAPITALIZATION
ISSUED &
AUTHORIZED OUTSTANDING
Class A Common Stock, Par Value $.00l 40,000,000 8,574,946
Class B Common Stock, Par Value $.00l 15,000,000 1,005,811 (1)
Undesignated Common Stock, Par Value $.001 25,000,000 -
TOTAL COMMON STOCK 80,000,000 9,580,757
Undesignated Preferred Stock, Par Value $.001 15,000,000 -
TOTAL PREFERRED STOCK 15,000,000 -
TOTAL CAPITAL STOCK 95,000,000 9,580,757
POTENTIALLY ISSUABLE (2):
Stock Options 544,897
Plus: reserved, unissued options 305,103
IPO Underwriter's Warrants 120,000
Conversion of Convertible Notes Payable 307,871
PIPE Warrants 304,375
TOTAL POTENTIALLY ISSUABLE 1,027,871
TOTAL POTENTIALLY 0/S SHARES 11,163,039
(1) Class B shares are supervoting 10:1 and are convertible to Class A at any
time on a 1:1 basis.
(2) Excludes contingently issuable shares related to: Hollywood Software
earn-out, Hollywood Software price protection, Core Tech earn-out, Core Tech
price protection, notes exchange price protection. The amount of these shares is
currently not determinable.
SCHEDULE 3.1(o)
LIENS
Pursuant to the following agreements, the Company has granted a security
interest in all of the issued and outstanding capital stock of Hollywood
Software, Inc. to ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, as secured parties:
1. Stock Purchase Agreement, dated as of July 17, 2003, among the
Company, Hollywood Software, Inc., ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
2. Secured Promissory Note dated November 3, 2003 issued by the
Company to ▇▇▇▇▇ ▇▇▇▇▇
3. Secured Promissory Note dated November 3, 2003 issued by the
Company to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
4. Pledge and Security Agreement, dated as of November 3, 2003,
between the Company and ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
SCHEDULE 3.1(u)
FINDER'S FEE
The following are the only brokerage or finder's fees or commissions paid or to
be paid by the Company with respect to the transactions contemplated by the
Agreement:
1. ▇▇▇▇ Capital Partners, LLC ("RCP") -- cash payment of 6% of the gross
proceeds received from the sale of securities pursuant to the terms of the
Agreement.
SCHEDULE 3.1(v)
HOLDERS OF REGISTRATION RIGHTS
Pursuant to the following agreements, the Company and/or certain of its security
holders may include securities of the Company in a registration statement:
1. Registration Rights Agreement, dated as of March 29, 2004,
between the Company and The Boeing Company
2. Registration Rights Agreement, dated as of March 24, 2004,
between the Company and certain investors partaking in the
Company's exchange offering
3. Registration Rights Agreement, dated as of January 9, 2004,
between AccesslT and ▇▇▇▇ ▇▇▇▇▇▇
4. Registration Rights Agreement, dated as of November, 2003,
among AccessIT and ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
5. Third Amended and Restated Stockholders' Agreement, dated as
of July 28, 2003, among AccessIT, the Preferred Stockholders
and the Common Stockholders
NOTE: Stockholders of the Company that acquired their stock prior to the
Company's initial public offering ("IPO") executed Lock-up Agreements which, on
the effective date of the ]PO, represented 98 percent of the outstanding stock
of the Company. In addition, pursuant to Section 3.4 of that certain Third
Amended And Restated Stockholders' Agreement, dated as of July 28, 2002, by and
among the Company and the stockholders listed therein, all stockholders of the
Company have agreed to be locked up following the Company's IPO. Accordingly,
the Company believes that 100 percent of the registrable securities that are the
subject of the agreements listed above, except for 53,534 shares of common stock
held by The Boeing Company (which shares are subject to adjustments for stock
splits and similar transactions), are restricted from selling their stock
pursuant to the terms of the Lock-up Agreement until at least November 10,2005,
subject to the IPO underwriter's release of any locked-up shares.