REDEMPTION AGREEMENT

Exhibit 10.2

 

 

 

 

 

 

REDEMPTION AGREEMENT

 

among

 

ACCESS INTEGRATED TECHNOLOGIES, INC.

 

and

 

THE HOLDERS REFERRED TO HEREIN

 

August 24, 2007

______________________

 

Relating to

 

8.5% Senior Notes due 2007

 

 

 

 

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TABLE OF CONTENTS

 

Page

 

 

 

 

 

 

 

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REDEMPTION AGREEMENT

This Redemption Agreement (this “ Agreement ”) is dated as of August 24, 2007, among Access Integrated Technologies, Inc., a Delaware corporation (the “ Company ”), and each holder identified on the signature pages hereto (each, including its successors and assigns, a “ Holder ” and collectively the “ Holders ”).

WHEREAS, the Holders are the owners of certain of the Company’s 8.5% Notes (such capitalized term and all other capitalized terms used in this Agreement having the meaning provided in Section 1);

WHEREAS, simultaneously herewith, the Holders are entering into a Securities Purchase Agreement (the “ Purchase Agreement ”), dated as of August24, 2007, by which the Holders have agreed to purchase from the Company and the Company has agreed to sell to the Holders, upon the terms and conditions stated in the Purchase Agreement, certain 10.0% Senior Notes issued in an original aggregate principal amount of $55,000,000 (the “ 10.0% Notes ”);

WHEREAS, upon the terms and subject to the conditions of this Agreement, each Holder wishes to redeem all such Holder’s 8.5% Notes and to receive the Kicker Shares payable with respect thereto and to have the cash proceeds payable with respect thereto credited against such Holder’s Subscription Amount due to the Company pursuant to the terms of the Purchase Agreement.

NOW THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

(a)         As used in this Agreement, the terms “Agreement”, “Company,” “Holder,” “Purchase Agreement” and “10.0% Notes” shall have the respective meanings assigned to such terms in the introductory paragraph and recitals of this Agreement.

(b)        As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“ Cash Redemption Amount ” shall have the meaning provided in Section 2(a)(A).

“ Closing Date ” shall have the meaning provided in the Purchase Agreement.

“ 8.5% Note ” means the Company’s 8.5% Senior Note, as amended by the First Amendment to the 8.5% Senior Note dated February 8, 2007, issued in the aggregate principal amount of $22,000,000 and due October 5, 2007.

“ Event of Default ” shall have the meaning provided in the 8.5% Note.

 

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“ Holder’s 8.5% Note ” means those of the Company’s 8.5% Senior Notes that are owned by the Holder and registered in the name of the Holder or the Holder’s nominees.

“ Interest Amount ” shall have the meaning provided in the 8.5% Note.

“ Interest Shares ” shall have the meaning provided in the 8.5% Note.

“ Kicker Shares ” shall have the meaning provided in the 8.5% Note.

“ Maturity Date ” shall have the meaning provided in the 8.5% Note.

“ Person ” means any natural person, corporation, partnership, syndicate, limited liability company, trust, incorporated organization, unincorporated association, group or similar entity or any government, governmental agency or political subdivision.

“ Principal ” shall have the meaning provided in the 8.5% Note.

“ Redemption Consideration ” shall have the meaning provided in Section 2(a)(B).

“ Registration Rights Agreement ” shall have the meaning provided in the Purchase Agreement.

“ Remaining Kicker Shares ” shall have the meaning provided in Section 2(a)(B).

“ SEC Reports ” shall have the meaning provided in the Purchase Agreement.

“ Subscription Amount ” shall have the meaning provided in the Purchase Agreement.

“ Subsidiary ” shall have the meaning provided in the Purchase Agreement.

“ Trading Day ” shall have the meaning provided in the Purchase Agreement.

“ Transaction Document ” shall have the meaning provided in the Purchase Agreement.

“ VWAP ” shall have the meaning provided in the 8.5% Note.

(a)         Agreement to Redeem; Redemption Value . Upon the terms and subject to the conditions of this Agreement, each Holder severally agrees to sell, assign, transfer and deliver such Holder’s 8.5% Note to the Company in exchange for the following:

(i)         cash in an amount equal to the total amount of Principal due in respect of such Holder’s 8.5% Note as of the Closing Date (the “ Cash Redemption Amount ”), which amount is set forth opposite its name on the signature page of this Agreement assuming a Closing Date of the date hereof, plus , a number of fully paid and nonassessable Shares with a total value equal to the Interest Amount due in respect of such Holder’s 8.5% Note as of the

 

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Closing Date, as calculated in accordance with Section 6(c) of the 8.5% Note utilizing for such purposes the VWAP for the thirty (30) day Trading Period ended on August 23, 2007, which amount of Shares is set forth opposite its name on the signature page of this Agreement assuming a Closing Date on the date hereof and assuming a VWAP of 8.145127, which amount will be adjusted as appropriate if the Closing Date is not the date hereof to (i) account for the actual VWAP for the thirty (30) Trading Day period ended on the Trading Day immediately prior to the Closing Date, and (ii) account for the actual Interest Amount due as of the Closing Date (the “ Interest Shares ”). The Cash Redemption Amount will be credited dollar for dollar against such Holder’s Subscription Amount due to the Company pursuant to the terms of the Purchase Agreement; and

(ii)        the issuance by the Company to the Holder of a number of fully paid and nonassessable Kicker Shares equal to the sum of (x) the remaining number of Kicker Shares that would have been issued under Section 7 of the 8.5% Note for the period beginning on October 5, 2006 and ending on the Maturity Date, assuming that the 8.5% Note remained outstanding until the Maturity Date and utilizing for such purposes the VWAP for the thirty (30) Trading Day period ended on August 23, 2007, which amount of Kicker Shares is set forth opposite its name on the signature page of this Agreement assuming a Closing Date on the date hereof and assuming a VWAP of 8.145127, which amount will be adjusted as appropriate if the Closing Date is not the date hereof to account for the actual VWAP for the thirty (30) Trading Day period ended on the Closing Date (the “ Remaining Kicker Shares ”) plus (y) the additional Kicker Shares set forth opposite each Holder’s name on the signature page of this Agreement (the “ Additional Kicker Shares ”, and, together with the Remaining Kicker Shares and Interest Shares, the “ Securities ”). The Securities and the Cash Redemption Amount shall be referred to herein as the “ Redemption Consideration .”

(iii)       The Redemption Consideration shall be in full satisfaction of the Company’s obligations under the 8.5% Notes.

(b)        Closing; Termination. The closing of the redemption and sale of the 8.5% Notes provided for in Section 2(a) shall occur on the Closing Date at the offices of Kelley Drye & Warren LLP, 101 Park Avenue, New York, NY 10178, or such other location as the parties shall mutually agree. At the closing, upon the terms and subject to the conditions of this Agreement, (1) the Company shall deliver to the Holders the Cash Redemption Amount, (2) the Company shall deliver to the Company’s transfer agent, with a copy delivered to each Holder, irrevocable instructions to deliver, on an expedited basis, a certificate evidencing the number of Remaining Kicker Shares and Additional Kicker Shares required to be delivered to each Holder and registered in the name of such Holder, and (3) each Holder shall deliver to the Company such Holder’s 8.5% Notes. This Agreement shall automatically terminate and be of no further force and effect if the Purchase Agreement shall terminate.

(c)         Cancellation . The Company shall cancel such Holder’s 8.5% Notes in full immediately after the closing of the redemption and sale of the 8.5% Notes.

3.          Representations, Warranties and Covenants of the Holder. Each Holder severally and not jointly represents and warrants to, and covenants and agrees with, the Company as follows:

 

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(a)         Ownership of Securities. The Holder is the beneficial owner of the Holder’s 8.5% Note and, upon consummation of the redemption and sale of the 8.5% Notes as provided in Section 2(a), will transfer and deliver to the Company good title to the Holder’s 8.5% Note, free and clear of any lien or encumbrance.

(b)        Authority. The execution, delivery and performance by the Holder of this Agreement are within the powers of the Holder and have been duly authorized by all necessary action on the part of the Holder. This Agreement constitutes a valid and binding agreement of the Holder, enforceable against the Holder in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally and general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.

(c)         Waiver . Each Holder consents and agrees to waive the requirement that the Company deliver any notice under the 8.5% Note in connection with, and the Company is not in default under the 8.5% Note as a result of, the execution and delivery of the 10% Notes, the Purchase Agreement or this Agreement.

(d)        Registration . Each Holder consents and agrees that the Securities issued hereunder shall be deemed to be Registrable Securities (as defined in the Registration Rights Agreement) under the Registration Rights Agreement.

4.          Representations, Warranties and Covenants of the Company . The Company represents and warrants to each Holder that the following matters are true and correct on the date of execution and delivery of this Agreement, will be true and correct on the Closing Date and the Company covenants and agrees with the Holder as follows:

(a)         Organization and Authority . The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority (i) to own, lease and operate its properties and to carry on its business as described in the SEC Reports and as currently conducted, and (ii) to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby.

(b)        Corporate Authorization . This Agreement and the transactions contemplated hereby have been duly and validly authorized by all corporate action of the Company; this Agreement has been duly executed and delivered by the Comp