COMMON STOCK PURCHASE WARRANT To Purchase ________ Shares of Class A Common Stock of ACCESS INTEGRATED TECHNOLOGIES, INC.
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
To
Purchase ________ Shares of Class A Common Stock of
ACCESS
INTEGRATED TECHNOLOGIES, INC.
THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies
that, for value received, ___________ (the “Holder”), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the one month
anniversary of the Closing Date (the “Initial Exercise
Date”) and on or prior to the close of business on the fifth year
anniversary of the Initial Exercise Date (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Access Integrated
Technologies, Inc., a Delaware corporation (the “Company”), up
to ________ shares (the “Warrant Shares”) of
Class A Common Stock, par value $0.001 per share, of the Company (the “Common
Stock”). The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).
Section 1. Definitions. Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Securities Purchase Agreement (the “Purchase Agreement”),
dated _________ 2009, among the Company and the Purchasers signatory
thereto.
Section 2.
Exercise.
(a) Exercise of
Warrant. Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to the
Company of a duly executed facsimile copy of the notice of exercise, in the form
annexed hereto (the “Notice of Exercise”)
(or such other office or agency of the Company as it may designate by notice in
writing to the registered Holder at the address of such Holder appearing on the
books of the Company); provided, however, within 5
Trading Days of the date said Notice of Exercise is delivered to the Company,
the Holder shall have surrendered this Warrant to the Company and the Company
shall have received payment of the aggregate Exercise Price of the
shares thereby purchased by wire transfer or cashier’s check drawn
on a
United States bank or by the surrender of shares of Series A 10% Non-Voting
Cumulative Preferred Stock of the Company, par value $0.001 per share (the
“Series A Preferred
Stock”).
(b) Exercise
Price. The exercise price of the Common Stock under this
Warrant shall be $_____, subject to adjustment hereunder (the “Exercise Price”), and
may be paid, following delivery of the Notice of Exercise, in cash, shares of
Series A Preferred Stock, or a combination thereof; provided, that if any of the
Exercise Price is paid in shares of Series A Preferred Stock, the per share
value of the Series A Preferred Stock shall be $500,000.
(c) Mechanics of
Exercise.
(i) Authorization of Warrant
Shares. The Company covenants that all Warrant Shares which
may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges in respect of the issue thereof (other than taxes
in respect of any transfer occurring contemporaneously with such
issue).
(ii) Delivery of Certificates
Upon Exercise. Certificates for shares purchased hereunder
shall be transmitted by the transfer agent of the Company to the Holder by
physical delivery to the address specified by the Holder in the Notice of
Exercise within 3 Trading Days from the receipt by the Company of the Notice of
Exercise, surrender of this Warrant and payment of the aggregate Exercise Price
as set forth above (“Warrant Share Delivery
Date”). This Warrant shall be deemed to have been exercised on
the date the Company has received the Notice of Exercise, this Warrant and the
full Exercise Price for the Warrant Shares being purchased upon the
exercise. The Warrant Shares shall be deemed to have been issued, and
Holder or any other Person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date
the Warrant has been exercised by payment to the Company of the Exercise Price
and all taxes required to be paid by the Holder, if any, pursuant to Section
2(c)(vii) prior to the issuance of such shares, have been paid.
(iii) Delivery of New Warrants
Upon Exercise. If this Warrant shall have been exercised in
part, the Company shall, within five Trading Days after the time of delivery of
the certificate or certificates representing Warrant Shares, deliver to Holder a
new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant
Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
(iv) Rescission
Rights. If the Company fails to cause its transfer agent to
transmit to the Holder a certificate or certificates representing
the
2
Warrant
Shares pursuant to this Section 2(c) by the 2nd Trading
Day immediately following the Warrant Share Delivery Date, then the Holder will
have the right to rescind such exercise.
(v) Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise. In
addition to any other rights available to the Holder, if the Company fails to
cause its transfer agent to transmit to the Holder a certificate or certificates
representing the Warrant Shares pursuant to an exercise on or before the 2nd Trading
Day immediately following the Warrant Share Delivery Date, and if after such
date the Holder is required by its broker to purchase in a bona fide arm’s
length transaction for fair market value (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”), then the
Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of Warrant Shares that the Company was required to deliver to the Holder
in connection with the exercise at issue times (B) the price at which the sell
order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder given within three Trading Days of the failure to deliver,
either reinstate the portion of the Warrant and equivalent number of Warrant
Shares for which such exercise was not honored or deliver to the Holder the
number of shares of Common Stock that would have been issued had the Company
timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (1) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In, together with applicable confirmations
and other evidence reasonably requested by the Company. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.
(vi) No Fractional Shares or
Scrip. No fractional shares or scrip representing fractional
shares of Common Stock shall be issued upon the exercise of this
Warrant. As to any fraction of a share of Common Stock which Holder
would otherwise be entitled to purchase upon such exercise, the Company shall
pay a cash adjustment in respect of such final fraction in an amount equal to
such fraction multiplied by the Exercise Price.
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(vii) Charges, Taxes and
Expenses. Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the
event certificates for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder;
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any expenses incidental thereto. The
Holder shall be responsible for all other tax liability that may arise as a
result of holding or transferring this Warrant or receiving Warrant Shares upon
exercise thereof.
(viii) Closing of
Books. The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
(d) Call
Provision. If, after twelve months from issuance of this
Warrant, (i) the price determined by the daily volume weighted average price per
share of the Common Stock on its principal Trading Market as reported by
Bloomberg Financial L.P. (the “VWAP”) for each of 20
consecutive Trading Days (the “Threshold Period”,
which 20 Trading Day period shall not have commenced until after the twelve
month anniversary from issuance of this Warrant) exceeds 200% of the then
Exercise Price (subject to adjustment for forward and reverse stock splits,
recapitalizations, stock dividends and the like after the Initial Exercise Date)
(the “Threshold
Price”) and (ii) the average daily volume for any Threshold Period, which
Threshold Period shall have commenced only after the twelve month anniversary of
the issuance of this Warrant, exceeds 50,000 shares of Common Stock per Trading
Day (subject to adjustment for forward and reverse stock splits,
recapitalizations, stock dividends and the like after the Initial Exercise
Date), then the Company may, within three Trading Days of the end of such
period, call for cancellation of all or any portion of this Warrant for which a
Notice of Exercise has not yet been delivered (such right, a “Call”). To
exercise this right, the Company must deliver to the Holder an irrevocable
written notice (a “Call Notice”),
indicating therein the portion of unexercised portion of this Warrant to which
such notice applies. If all of the conditions set forth in this
Section 2(d) (including the honoring of all Notices of Exercises) for such
Call are satisfied from the period from the date of the Call Notice through and
including the Call Date (as defined below), then any portion of this Warrant
subject to such Call Notice for which a Notice of Exercise, together with
payment of the Exercise Price, shall not have been received by the Call Date
will be cancelled at 6:30 p.m. (New York City time) on the tenth Trading Day
after the date the Call Notice is received by the Holder (such date, the “Call Date”) upon
payment by the Company to the Holder of $0.05 per Warrant Share. Any
unexercised portion of this Warrant to which the Call Notice does not pertain
will be unaffected by such Call Notice. In furtherance thereof, the
Company covenants and agrees that it will honor all Notices of Exercise with
respect to Warrant Shares subject to a Call Notice that are tendered through
6:30 p.m. (New York City time) on the Call Date, together with payment of the
Exercise
4
Price. The
parties agree that any Notice of Exercise delivered following a Call Notice
shall first reduce to zero the number of Warrant Shares subject to such Call
Notice prior to reducing the remaining Warrant Shares available for purchase
under this Warrant. For example, if (x) this Warrant then permits the
Holder to acquire 100 Warrant Shares, (y) a Call Notice pertains to 75 Warrant
Shares, and (z) prior to 6:30 p.m. (New York City time) on the Call Date the
Holder tenders a Notice of Exercise, together with payment of the Exercise
Price, in respect of 50 Warrant Shares, then (1) on the Call Date the right
under this Warrant to acquire 25 Warrant Shares will be automatically cancelled,
(2) the Company, in the time and manner required under this Warrant, will have
issued and delivered to the Holder 50 Warrant Shares in respect of the exercises
following receipt of the Call Notice, and (3) the Holder may, until the
Termination Date, exercise this Warrant for 25 Warrant Shares (subject to
adjustment as herein provided and subject to subsequent Call
Notices). Subject again to the provisions of this Section 2(d), the
Company may deliver subsequent Call Notices for any portion of this Warrant for
which the Holder shall not have delivered a Notice of
Exercise. Notwithstanding anything to the contrary set forth in this
Warrant, the Company may not deliver a Call Notice or require the cancellation
of this Warrant (and any Call Notice will be void), unless, from the beginning
of the 20th consecutive Trading Days used to determine whether the Common Stock
has achieved the Threshold Price through the Call Date, (i) the Company shall
have honored in accordance with the terms of this Warrant all Notices of
Exercise delivered by 6:30 p.m. (New York City time) on the Call
Date, together with the payment of the Exercise Price, (ii) the Registration
Statement shall be effective as to all Warrant Shares and the prospectus
thereunder available for use by the Holder for the resale of all such Warrant
Shares and (iii) the Common Stock shall be listed or quoted for trading on the
Trading Market, and (iv) there is a sufficient number of authorized shares of
Common Stock for issuance of all Securities under the Transaction Documents, and
(v) the issuance of the shares shall be in accordance with Section 2(c)
herein. The Company’s right to Call the Warrant shall be exercised
ratably among the Holders based on each Holder’s initial purchase of Common
Stock.
(e) Limitation on
Issuance.
Notwithstanding anything to the contrary contained in this Warrant, this Warrant
shall not be exercisable by the Holder hereof to the extent (but only to the
extent) that, if exercised by the Holder, the sum of (1) the number of shares of
Class A Common Stock issued upon the exercise of warrants sold by the
Corporation in connection with the offer and sale of Series A Preferred Stock
that would be integrated with the shares of Class A Common Stock issuable upon
the exercise of this Warrant under the rules of The NASDAQ Stock Market and (2)
the number of shares of Class A Common Stock issued by the Corporation in
payment of dividends on such integrated Series A Preferred Stock, would exceed
5,366,529 shares (as shall be adjusted for stock splits) (such overage, the
“Excess
Shares”); provided that, the
Company agrees to use commercially reasonable efforts to seek stockholder
approval of the issuance of such Excess Shares at the earlier of its next annual
or any special meeting (called for any other purpose) of stockholders, and, if
such approval is obtained, to issue such Excess Shares promptly
thereafter. The limitations contained in this paragraph shall apply
to a successor holder of this Warrant. The holders of Common Stock
shall be third party beneficiaries of this paragraph and the Company may not
waive this paragraph without the consent of holders of a majority of
its Common Stock.
5
Section 3. Certain
Adjustments.
(a) Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding:
(A) pays a stock dividend or otherwise makes a distribution or distributions on
shares of its Common Stock, the Company’s Class B Common Stock or any other
equity or equity equivalent securities payable in shares of Common Stock (which,
for avoidance of doubt, shall not include any shares of Common Stock issued by
the Company pursuant to this Warrant), (B) subdivides outstanding shares of
Common Stock into a larger number of shares, (C) combines (including by way of
reverse stock split) outstanding shares of Common Stock into a smaller number of
shares, or (D) issues by reclassification of shares of the Common Stock any
shares of capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such
event. Simultaneously with any adjustment to the Exercise Price
pursuant to this Section 3(a), the number of shares issuable upon exercise of
this Warrant shall be proportionately adjusted, so that after such adjustment,
the aggregate amount of the adjusted Exercise Price multiplied by the aggregate
adjusted amount of Warrant Shares shall equal the aggregate amount of the
unadjusted Exercise Price multiplied by the aggregate unadjusted amount of
Warrant Shares. Any adjustment made pursuant to this Section 3(a)
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution and shall
become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.
(b) Pro Rata
Distributions. If the Company, at any time prior to the
Termination Date, shall distribute to all holders of Common Stock, including all
holders of the Company’s Class B Common Stock (and not to Holders of the
Warrants), evidences of its indebtedness or assets (including cash and cash
dividends) or rights or warrants to subscribe for or purchase any security other
than the Common Stock (which shall be subject to Section 3(b)), then in each
such case the Exercise Price shall be adjusted by multiplying the Exercise Price
in effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the
denominator shall be the VWAP determined as of the record date mentioned above,
and of which the numerator shall be such VWAP on such record date less the then
per share fair market value at such record date of the portion of such assets or
evidence of indebtedness so distributed applicable to one outstanding share of
the Common Stock or Common Stock equivalent share of Class B Common Stock
(determined by dividing the amount distributed by the then issued and
outstanding shares of Common Stock) as determined by the Board of Directors in
good faith. In either case the adjustments shall be described in a
statement provided to the Holder of the portion of assets or evidences of
indebtedness so distributed or such subscription rights applicable to one share
of Common Stock (or for Class B Common Stock, equivalent
measures). Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the record
date mentioned above. Notwithstanding the foregoing, with respect to any rights
that may be issued or distributed pursuant to any rights plan that the Company
implements after the date of issuance of this Warrant (a “Rights Plan”),
upon
6
exercise
of this Warrant into Common Stock, to the extent such Rights Plan is in effect
upon such exercise, the holder of this Warrant will receive, in addition to the
Common Stock, the rights described therein (whether or not the rights have
separated from the Common Stock prior to the time of exercise), subject to the
limitations set forth in any such Rights Plan. In the event the holder
receives such rights, there will be no adjustment to the Exercise Price or the
number of shares issuable upon exercise of this Warrant pursuant to this Section
3. In the event the holder does not or is not entitled to receive such
rights upon exercise of this Warrant for any reason, then an appropriate
adjustment shall be made to the Exercise Price in a manner similarly provided
for in the other provisions of this Section 3.
(c) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (A) the
Company effects any merger or consolidation of the Company with or into another
Person, (B) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (C) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (D) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities (other than capital stock of the Company), cash or property (in any
such case, a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder, (a) upon exercise of this
Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any
additional consideration (the “Alternate
Consideration”) receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event or (b) if the Company is acquired in an all cash
transaction, cash equal to the value of this Warrant as determined in accordance
with the Black-Scholes option pricing formula. For purposes of any
such exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If
holders of Common Stock are given any choice as to the securities, cash or
property to be received in a Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction. To
the extent necessary to effectuate the foregoing provisions, any successor to
the Company or surviving entity in such Fundamental Transaction shall issue to
the Holder a new warrant consistent with the foregoing provisions and evidencing
the Holder’s right to exercise such warrant into Alternate Consideration. The
terms of any agreement pursuant to which a Fundamental Transaction is effected
shall include terms requiring any such successor or surviving entity to comply
with the provisions of this Section 3(c) and insuring that this
7
Warrant
(or any such replacement security) will be similarly adjusted upon any
subsequent transaction analogous to a Fundamental Transaction.
(d) Issuance of Additional Stock
below Exercise Price. If the Company shall issue, at any time
or from time to time, any Additional Stock (as defined below) without
consideration or for a consideration per share less than the Exercise Price in
effect immediately prior to the issuance of such Additional Stock, then the
Exercise Price, as applicable, in effect immediately prior to each such issuance
shall automatically be adjusted as set forth in this Section 3(d).
(i) Adjustment Formula.
If the Exercise Price is to be adjusted pursuant to this Section 3(d), the new
Exercise Price, as applicable, shall be determined by multiplying the Exercise
Price then in effect, by a fraction, (x) the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such issuance
not including treasury shares (the “Outstanding Common”)
plus the number of shares of Common Stock that the aggregate consideration
received by the Company for such issuance would purchase at the Exercise Price
then in effect; and (y) the denominator of which shall be the number of shares
of Outstanding Common plus the number of shares of such Additional Stock being
so issued; and the number of shares of Common Stock that may be purchased
pursuant to this Warrant as a result of such adjustment shall be determined by
multiplying the number of shares exercisable immediately prior to such
adjustment by a fraction (I) the numerator of which is the Exercise Price
immediately prior to such adjustment and (II) the denominator of which is the
new Exercise Price immediately after such adjustment, such that after the
adjustment, the aggregate Exercise Price to be paid by the Holder is
unchanged.
(ii) Definition of “Additional
Stock”. For purposes of this Section 3(d), “Additional Stock” means any
shares of Common Stock issued by the Company after the date of this Warrant,
other than:
(A) Shares
of capital stock issuable upon exercise of options, warrants and stock purchase
agreements or other rights to acquire securities of the Corporation outstanding
as of the date of this Warrant;
(B) Shares
of Common Stock issued to employees, consultants, officers or directors of the
Corporation pursuant to stock plans or agreements if such grants are approved by
the board of directors of the Company;
(C) Shares
of Common Stock issued in connection with bona fide business acquisitions by the
Company, whether by merger, consolidation, sale of assets, sale or exchange of
stock or otherwise, if approved by the board of directors of the Company;
and
8
(D) Shares
of Common Stock issued to holders of the Company’s 2007 10% senior notes (the
“2007 Notes”)
for payments of scheduled interest, including Additional Interest (as defined
therein), on the 2007 Notes;
(iii) No Increased Exercise
Price. Notwithstanding any other provisions of this Section 3(d) no
adjustment of the Exercise Price pursuant to this Section 3(d) shall have the
effect of increasing the Exercise Price above the Exercise Price in effect
immediately prior to such adjustment.
(e) Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding at the close of the Trading Day
on or, if not applicable, most recently preceding, such given date.
(f) Voluntary Adjustment By
Company. The Company may at any time during the term of this Warrant
reduce the then current Exercise Price to any amount and for any period of time
deemed appropriate by the Board of Directors of the Company.
(g) Notice to
Holders.
(i) Adjustment to Exercise
Price. Whenever the Exercise Price is adjusted pursuant to this Section
3, the Company shall promptly mail to each Holder a notice setting forth the
Exercise Price after such adjustment and setting forth a brief statement of the
facts requiring such adjustment.
(ii) Notice to Allow Exercise by
▇▇▇▇▇▇. If (A) the Company shall declare a dividend (or any other
distribution) on the Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (C) the
Company shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights; (D) the approval of any stockholders of the Company
shall be required in connection with any reclassification of the Common Stock,
any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Warrant Register of the Company,
at least 20 calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of
9
which the
holders of the Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined or (y) the
date on which such reclassification, consolidation, merger, sale, transfer or
share exchange is expected to become effective or close, and the date as of
which it is expected that holders of the Common Stock of record shall be
entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided, that the
failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. The Holder is entitled to exercise this Warrant
during the 20-day period commencing on the date of such notice to the effective
date of the event triggering such notice. Notwithstanding the
foregoing, the delivery of the notice described in this Section 3(f) is not
intended to and shall not bestow upon the Holder any voting rights whatsoever
with respect to outstanding unexercised Warrants.
(h) For
the purposes of this Section 3, the following term shall have the following
meaning:
“Common Stock
Equivalent” means any securities of the Company or the Subsidiaries which
would entitle the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exercisable or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.
Section 4. Transfer of
Warrant.
(a) Transferability. Subject
to compliance with any applicable securities laws and the conditions set forth
in Sections 5(a) and 4(d) hereof and to the provisions of Section 4.1 of the
Purchase Agreement, this Warrant and all rights hereunder are transferable, in
whole or in part, upon surrender of this Warrant at the principal office of the
Company, together with a written assignment of this Warrant substantially in the
form attached hereto duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion, if any, of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned,
may be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued.
(b) New Warrants. This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance
with Section
10
4(a), as
to any transfer which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with such
notice.
(c) Warrant Register. The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.
(d) Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with
any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant, as the case may be, furnish to the Company
a written opinion of counsel (which opinion shall be in form, substance and
scope customary for opinions of counsel in comparable transactions) to the
effect that such transfer may be made without registration under the Securities Act and under applicable state securities
or blue sky laws, (ii) that the
Holder or transferee execute and deliver to
the Company an investment letter in form and substance acceptable to the Company
and (iii) that the transferee be an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7),
or (a)(8) promulgated under the Securities Act or a qualified institutional
buyer as defined in Rule 144A(a) under the Securities Act.
Section 5. Miscellaneous.
(a) Title to
Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Section 4 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed and the legal opinion required under Section 4(d), if required
by the Company. The transferee shall sign an investment letter in
form and substance reasonably satisfactory to the Company.
(b) No Rights as Shareholder
Until Exercise. This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to the
exercise hereof. Upon the surrender of this Warrant and the payment
of the aggregate Exercise Price, the Warrant Shares so purchased shall be and be
deemed to be issued to such Holder as the record owner of such shares as of the
close of business on the later of the date of such surrender or
payment.
(c) Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the
11
posting
of any bond), and upon surrender and cancellation of such Warrant or stock
certificate, if mutilated, the Company will make and deliver a new Warrant or
stock certificate of like tenor and dated as of such cancellation, in lieu of
such Warrant or stock certificate.
(d) Saturdays, Sundays,
Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall be a
Saturday, Sunday or a legal holiday, then such action may be taken or such right
may be exercised on the next succeeding day not a Saturday, Sunday or legal
holiday.
(e) Authorized
Shares.
The
Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant. The Company further covenants
that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will
take all such reasonable action as may be necessary to assure that such Warrant
Shares may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of the Trading Market upon which the
Common Stock may be listed.
Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this
Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
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(f) Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the provisions of the
Purchase Agreement.
(g) Restrictions. The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws and will contain a restrictive legend substantially
in the following form:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.
(h) Nonwaiver and
Expenses. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date. If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.
(i) Notices. Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.
(j) Limitation of
Liability. No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
13
(k) Remedies. Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be
adequate.
(l) Successors and
Assigns. Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the successors and
permitted assigns of Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder.
(m) Amendment. This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.
(n) Severability. Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.
(o) Headings. The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.
********************
14
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.
Dated: ______________,
2009
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ACCESS
INTEGRATED TECHNOLOGIES, INC.
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By:
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▇.
▇▇▇▇ ▇▇▇▇
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President
and Chief Executive Officer
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15
NOTICE
OF EXERCISE
TO: [_____________]
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.
(2) Payment
shall take the form of either lawful money of the United States by wire transfer
or shares of Series A Preferred Stock or a combination of cash and shares of
Series A Preferred Stock.
(3) Please
issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below:
_______________________________
The
Warrant Shares shall be delivered to the following:
_______________________________
_______________________________
_______________________________
(4) Accredited
Investor. The undersigned is an “accredited investor” as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.
[SIGNATURE
OF HOLDER]
Name of
Investing Entity:
_________________________________________________________________
Signature
of Authorized Signatory of Investing Entity:
___________________________________________
Name of
Authorized Signatory:
_____________________________________________________________
Title of
Authorized Signatory:
______________________________________________________________
Date:
_________________________________________________________________________________
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute
this form
and supply required information.
Do not
use this form to exercise the warrant.)
FOR VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to
_______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________,
_______
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Holder’s
Signature:
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Holder’s
Address:
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Signature
Guaranteed: ___________________________________________
NOTE: The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.