EXHIBIT 4.1
EXECUTION COPY
WARRANT
THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER
APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED
OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO A TRANSACTION WHICH IS EXEMPT FROM, OR
NOT SUBJECT TO, SUCH REGISTRATION.
DECEMBER 14, 2004
Warrant to Purchase up to 275,000 shares of Common Stock of American
Technology Corporation (the "Company").
In consideration for Kingsbridge Capital Limited (the "INVESTOR")
agreeing to enter into that certain Common Stock Purchase Agreement, dated as of
the date hereof, between the Investor and the Company (the "Agreement"), the
Company hereby agrees that the Investor or any other Warrant Holder (as defined
below) is entitled, on the terms and conditions set forth below, to purchase
from the Company at any time during the Exercise Period (as defined below) up to
275,000 fully paid and nonassessable shares of common stock, par value $.00001
per share, of the Company (the "COMMON STOCK") at the Exercise Price
(hereinafter defined), as the same may be adjusted from time to time pursuant to
Section 6 hereof. The resale of the shares of Common Stock or other securities
issuable upon exercise or exchange of this Warrant is subject to the provisions
of the Registration Rights Agreement (as defined in the Agreement).
Section 1. DEFINITIONS.
"AFFILIATE" shall mean any Person that, directly or indirectly through
one or more intermediaries, controls or is controlled by, or is under direct or
indirect common control with any other Person. For the purposes of this
definition, "control," when used with respect to any Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the term "controls" and "controlled" have meanings correlative to the
foregoing.
"CLOSING PRICE" shall mean the closing price per share of the Company's
Common Stock as reported by Bloomberg L.P. using the AQR function.
"EXERCISE PERIOD" shall mean that period beginning six months after the
date of this Warrant and continuing until the expiration of the five-year period
thereafter.
"EXERCISE PRICE" as of the date hereof shall mean $8.60 per share, as
may be adjusted from time to time pursuant to Section 6 hereof.
"PER SHARE WARRANT VALUE" shall mean the difference resulting from
subtracting the Exercise Price from the Closing Price on the Trading Day
immediately preceding the Exercise Date.
"PERSON" shall mean an individual, a corporation, a partnership, a
limited liability company, an association, a trust or other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"PRINCIPAL MARKET" shall mean the Nasdaq National Market, the Nasdaq
SmallCap Market, the American Stock Exchange or the New York Stock Exchange,
whichever is at the time the principal trading exchange or market for the Common
Stock.
"SEC" shall mean the United States Securities and Exchange Commission.
"TRADING DAY" shall mean any day other than a Saturday or a Sunday on
which the Principal Market is open for trading in equity securities.
"WARRANT HOLDER" shall mean the Investor or any permitted assignee or
permitted transferee, as described in Section 13(d), of all or any portion of
this Warrant.
"WARRANT SHARES" shall mean those shares of Common Stock received upon
exercise of this Warrant.
Section 2. EXERCISE.
(a) METHOD OF EXERCISE. This Warrant may be exercised in whole
or in part (but not as to a fractional share of Common Stock), at any time and
from time to time during the Exercise Period, by the Warrant Holder by (i)
surrender of this Warrant, with the form of exercise attached hereto as Exhibit
A completed and duly executed by the Warrant Holder (the "EXERCISE NOTICE"), to
the Company as set forth in Section 14 hereof, accompanied by payment of the
Exercise Price multiplied by the number of shares of Common Stock for which this
Warrant is being exercised (the "AGGREGATE EXERCISE PRICE") or (ii) telecopying
an executed and completed Exercise Notice to the Company and delivering to the
Company within five (5) business days thereafter the original Exercise Notice,
this Warrant and the Aggregate Exercise Price. Each date on which an Exercise
Notice is received by the Company in accordance with clause (i) and each date on
which the Exercise Notice is telecopied to the Company in accordance with clause
(ii) above shall be deemed an "EXERCISE DATE."
(b) PAYMENT OF AGGREGATE EXERCISE PRICE. Subject to paragraph
(c) below, payment of the Aggregate Exercise Price shall be made by wire
transfer of immediately available funds to an account designated by the Company.
If the amount of the payment received by the Company is less than the Aggregate
Exercise Price, the Warrant Holder will be notified of the deficiency and shall
make payment in that amount within three (3) Trading Days. In the event the
payment exceeds the Aggregate Exercise Price, the Company will refund the excess
to the Warrant Holder within five (5) Trading Days of receipt.
(c) CASHLESS EXERCISE. In the event that the Warrant Shares to
be received by the Warrant Holder upon exercise of the Warrant may not be resold
pursuant to an effective registration statement or an exemption to the
registration requirements of the Securities Act of 1933, as amended, and
applicable state laws, the Warrant Holder may, as an alternative to payment of
the Aggregate Exercise Price upon exercise in accordance with paragraph (b)
above, elect to effect a cashless exercise by so indicating on the Exercise
Notice and including a calculation of the number of shares of Common Stock to be
issued upon such exercise in accordance with the terms hereof (a "CASHLESS
EXERCISE"). If a registration statement on Form S-1 under the Securities Act of
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1933, as amended, or such other form as deemed appropriate by counsel to the
Company for the registration for the resale by the Warrant Holder of (x) the
shares of Common Stock of the Company that may be purchased under the Agreement,
(y) the Warrant Shares, or (z) any securities issued or issuable with respect to
any of the foregoing by way of exchange, stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise, has been declared effective by the SEC and
remains effective, the Company may permit or require the Warrant Holder elect to
effect a Cashless Exercise. In the event of a Cashless Exercise, the Warrant
Holder shall receive that number of shares of Common Stock determined by (i)
multiplying the number of Warrant Shares for which this Warrant is being
exercised by the Per Share Warrant Value and (ii) dividing the product by the
Closing Price on the Trading Day immediately preceding the Exercise Date,
rounded to the nearest whole share. The Company shall cancel the total number of
Warrant Shares equal to the excess of the number of the Warrant Shares for which
this Warrant is being exercised over the number of Warrant Shares to be received
by the Warrant Holder pursuant to such Cashless Exercise.
(d) REPLACEMENT WARRANT. In the event that the Warrant is not
exercised in full, the number of Warrant Shares shall be reduced by the number
of such Warrant Shares for which this Warrant is exercised, and the Company, at
its expense, shall forthwith issue and deliver to or upon the order of the
Warrant Holder a new Warrant of like tenor in the name of the Warrant Holder,
reflecting such adjusted number of Warrant Shares.
Section 3. TEN PERCENT LIMITATION. The Warrant Holder may not exercise
this Warrant such that the number of Warrant Shares to be received pursuant to
such exercise aggregated with all other shares of Common Stock then owned by the
Warrant Holder beneficially or deemed beneficially owned by the Warrant Holder
would result in the Warrant Holder owning more than 9.9% of all of such Common
Stock as would be outstanding on such Exercise Date, as determined in accordance
with Section 13(d) of the Exchange Act of 1934 and the rules and regulations
promulgated thereunder.
Section 4. DELIVERY OF WARRANT SHARES.
(a) Subject to the terms and conditions of this Warrant, as
soon as practicable after the exercise of this Warrant in full or in part, and
in any event within ten (10) Trading Days thereafter, the Company at its expense
(including, without limitation, the payment by it of any applicable issue taxes)
will cause to be issued in the name of and delivered to the Warrant Holder, or
as the Warrant Holder may lawfully direct, a certificate or certificates for, or
make deposit with the Depositary Trust Company via book-entry of, the number of
validly issued, fully paid and non-assessable Warrant Shares to which the
Warrant Holder shall be entitled on such exercise, together with any other stock
or other securities or property (including cash, where applicable) to which the
Warrant Holder is entitled upon such exercise in accordance with the provisions
hereof.
(b) This Warrant may not be exercised as to fractional shares
of Common Stock. In the event that the exercise of this Warrant, in full or in
part, would result in the issuance of any fractional share of Common Stock, then
in such event the Warrant Holder shall receive the number of shares rounded to
the nearest whole share.
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Section 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
(a) The Warrant Shares, when issued in accordance with the
terms hereof, will be duly authorized and, when paid for or issued in accordance
with the terms hereof, shall be validly issued, fully paid and non-assessable.
(b) The Company shall take all commercially reasonable action
and proceedings as may be required and permitted by applicable law, rule and
regulation for the legal and valid issuance of this Warrant and the Warrant
Shares to the Warrant Holder.
(c) The Company has authorized and reserved for issuance to
the Warrant Holder the requisite number of shares of Common Stock to be issued
pursuant to this Warrant. The Company shall at all times reserve and keep
available, solely for issuance and delivery as Warrant Shares hereunder, such
shares of Common Stock as shall from time to time be issuable as Warrant Shares.
(d) From the date hereof through the last date on which this
Warrant is exercisable, the Company shall take all steps commercially reasonable
to ensure that the Common Stock remains listed or quoted on the Principal
Market.
Section 6. ADJUSTMENT OF THE EXERCISE PRICE. The Exercise Price and,
accordingly, the number of Warrant Shares issuable upon exercise of the Warrant,
shall be subject to adjustment from time to time upon the happening of certain
events as follows:
(a) RECLASSIFICATION, CONSOLIDATION, MERGER, MANDATORY SHARE
EXCHANGE, SALE OR TRANSFER.
(i) Upon occurrence of any of the events specified in
subsection (a)(ii) below (the "ADJUSTMENT EVENTS") while this Warrant is
unexpired and not exercised in full, the Warrant Holder may in its sole
discretion require the Company, or any successor or purchasing corporation, as
the case may be, without payment of any additional consideration therefor, to
execute and deliver to the Warrant Holder a new Warrant providing that the
Warrant Holder shall have the right to exercise such new Warrant (upon terms not
less favorable to the Warrant Holder than those then applicable to this Warrant)
and to receive upon such exercise, in lieu of each share of Common Stock
theretofore issuable upon exercise of this Warrant, the kind and amount of
shares of stock, other securities, money or property receivable upon such
Adjustment Event by the holder of one share of Common Stock issuable upon
exercise of this Warrant had this Warrant been exercised immediately prior to
such Adjustment Event. Such new Warrant shall provide for adjustments that shall
be as nearly equivalent as may be practicable to the adjustments provided for in
this Section 6.
(ii) The Adjustment Events shall be (1) any reclassification
or change of Common Stock (other than a change in par value, as a result of a
subdivision or combination of Common Stock or in connection with an Excluded
Merger or Sale), (2) any consolidation, merger or mandatory share exchange of
the Company with or into another corporation (other than a merger or mandatory
share exchange with another corporation in which the Company is a continuing
corporation and which does not result in any reclassification or change other
than a change in par value or as a result of a subdivision or combination of
Common Stock), other than (each of the following referred to as an "EXCLUDED
MERGER OR SALE") a transaction involving (A) sale of all or substantially all of
the assets of the Company, (B) any merger, consolidation or similar transaction
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where the consideration payable to the shareholders of the Company by the
acquiring Person consists substantially entirely of cash, or where the acquiring
Person does not agree to assume the obligations of the Company under outstanding
warrants (including this Warrant). In the event of an Excluded Merger or Sale
transaction, if the surviving, successor or purchasing Person does not agree to
assume the obligations under this Warrant, then the Company shall deliver a
notice to the Warrant Holder at least 10 days before the consummation of such
Excluded Merger or Sale, the Warrant Holder may exercise this Warrant at any
time before the consummation of such Excluded Merger or Sale (and such exercise
may be made contingent upon the consummation of such Excluded Merger or Sale),
and any portion of this Warrant that has not been exercised before consummation
of such Excluded Merger or Sale shall terminate and expire, and shall no longer
be outstanding.
(b) SUBDIVISION OR COMBINATION OF SHARES. If the Company, at
any time while this Warrant is unexpired and not exercised in full, shall
subdivide its Common Stock, the Exercise Price shall be proportionately reduced
as of the effective date of such subdivision, or, if the Company shall take a
record of holders of its Common Stock for the purpose of so subdividing, as of
such record date, whichever is earlier. If the Company, at any time while this
Warrant is unexpired and not exercised in full, shall combine its Common Stock,
the Exercise Price shall be proportionately increased as of the effective date
of such combination, or, if the Company shall take a record of holders of its
Common Stock for the purpose of so combining, as of such record date, whichever
is earlier.
(c) STOCK DIVIDENDS. If the Company, at any time while this
Warrant is unexpired and not exercised in full, shall pay a dividend or other
distribution in shares of Common Stock to all holders of Common Stock, then the
Exercise Price shall be adjusted, as of the date the Company shall take a record
of the holders of its Common Stock for the purpose of receiving such dividend or
other distribution (or if no such record is taken, as at the date of such
payment or other distribution), to that price determined by multiplying the
Exercise Price in effect immediately prior to such payment or other distribution
by a fraction:
1. the numerator of which shall be the total number of shares
of Common Stock outstanding immediately prior to such dividend or
distribution, and
2. the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such dividend or
distribution.
The provisions of this subsection (c) shall not apply under any of the
circumstances for which an adjustment is provided in subsections (a) or (b).
(d) LIQUIDATING DIVIDENDS, ETC. If the Company, at any time
while this Warrant is unexpired and not exercised in full, makes a distribution
of its assets or evidences of indebtedness to all holders of its Common Stock as
a dividend in liquidation or by way of return of capital or other than as a
dividend payable out of earnings or surplus legally available for dividends
under applicable law or any distribution to such holders made in respect of the
sale of all or substantially all of the Company's assets (other than under the
circumstances provided for in the foregoing subsections (a) through (c)), then
the Warrant Holder shall be entitled to receive upon exercise of this Warrant in
addition to the Warrant Shares receivable in connection therewith, and without
payment of any consideration other than the Exercise Price, the kind and amount
of such distribution per share of Common Stock multiplied by the number of
Warrant Shares that, on the record date for such distribution, are issuable upon
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such exercise of the Warrant (with no further adjustment being made following
any event which causes a subsequent adjustment in the number of Warrant Shares
issuable), and an appropriate provision therefor shall be made a part of any
such distribution. The value of a distribution that is paid in other than cash
shall be determined in good faith by the Board of Directors of the Company.
Notwithstanding the foregoing, in the event of a proposed dividend in
liquidation or distribution to the shareholders made in respect of the sale of
all or substantially all of the Company's assets, the Company shall deliver a
notice to the Warrant Holder at least 10 days before the consummation of such
event, the Warrant Holder may exercise this Warrant at any time before the
consummation of such event (and such exercise may be made contingent upon the
consummation of such event), and any portion of this Warrant that has not been
exercised before consummation of such event shall terminate and expire, and
shall no longer be outstanding.
(e) Upon the expiration of any rights, options, warrants or
conversion privileges with respect to the issuance of which an adjustment to the
Exercise Price or number of Warrant Shares had been made, if such shall not have
been exercised, the Exercise Price or number of Warrant Shares purchasable upon
exercise of this Warrant, to the extent this Warrant has not then been
exercised, shall, upon such expiration, be readjusted and shall thereafter be
such as they would have been had they been originally adjusted (or had the
original adjustment not been required, as the case may be) on the basis of (i)
the fact that Common Stock, if any, actually issued or sold upon the exercise of
such rights, options, warrants or conversion privileges and (ii) the fact that
such shares of Common Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise plus the consideration, if
any, actually received by the Company for the issuance, sale or grant of all
such rights, options, warrants or conversion privileges whether or not
exercised; provided, however, that no such readjustment shall have the effect of
decreasing the number of Warrant Shares purchasable upon exercise of this
Warrant by an amount in excess of the amount of the adjustment initially made in
respect of the issuance, sale or grant of such rights, options, warrants or
conversion privileges.
Section 7. NOTICE OF ADJUSTMENTS.
(a) Whenever the Exercise Price or number of Warrant Shares
shall be adjusted pursuant to Section 6 hereof, the Company shall promptly
prepare a certificate signed by its President or Chief Financial Officer setting
forth in reasonable detail the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated (including a
description of the basis on which the Company's Board of Directors made any
determination hereunder), and the Exercise Price and number of Warrant Shares
purchasable at that Exercise Price after giving effect to such adjustment, and
shall promptly cause copies of such certificate to be sent by overnight courier
to the Warrant Holder. In the event the Company shall, at a time while the
Warrant is unexpired and not exercised in full, take any action that pursuant to
subsections (a) through (c) of Section 6 may result in an adjustment of the
Exercise Price, the Company shall give to the Warrant Holder at its last address
known to the Company written notice of such action ten (10) days in advance of
its effective date in order to afford to the Warrant Holder an opportunity to
exercise the Warrant prior to such action becoming effective.
(b) Notwithstanding Section 7(a), no adjustment in the
Exercise Price (or in the number of Warrant Shares) shall be required unless
such adjustment would require a change in the Exercise Price of a least $0.05
per share of Common Stock, provided, however, that any adjustment which by
reason of this Section 6.2(b) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 7 shall be made to the nearest cent.
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Section 8. NO IMPAIRMENT. The Company will not, by amendment of its
Certificate of Incorporation, as amended, or Bylaws or through any
reorganization, transfer of assets, consolidation, merger, dissolution or issue
or sale of securities, 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 action as may
be necessary or appropriate in order to protect the rights of the Warrant Holder
against impairment. Without limiting the generality of the foregoing, the
Company (a) will not increase the par value of any Warrant Shares above the
amount payable therefor on such exercise, and (b) will take all such action as
may be reasonably necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares on the exercise of
this Warrant.
Section 9. RIGHTS AS STOCKHOLDER. Except as set forth in Section 6
above, prior to exercise of this Warrant, the Warrant Holder shall not be
entitled to any rights as a stockholder of the Company with respect to the
Warrant Shares, including (without limitation) the right to vote such shares,
receive dividends or other distributions thereon or be notified of stockholder
meetings. However, in the event of any taking by the Company of a record of the
holders of any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a cash dividend) or
other distribution, any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property, or to
receive any other right, the Company shall mail to each Warrant Holder, at least
ten (10) days prior to the date specified therein, a notice specifying the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right.
Section 10. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of the
Warrant and, in the case of any such loss, theft or destruction of the Warrant,
upon delivery of an indemnity agreement or security reasonably satisfactory in
form and amount to the Company or, in the case of any such mutilation, on
surrender and cancellation of such Warrant, the Company at its expense will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
Section 11. CHOICE OF LAW. This Warrant shall be construed under the
laws of the State of New York.
Section 12. ENTIRE AGREEMENT; AMENDMENTS. Except for any written
instrument concurrent or subsequent to the date hereof executed by the Company
and the Investor, this Warrant and the Agreement contain the entire
understanding of the parties with respect to the matters covered hereby and
thereby. No provision of this Warrant may be waived or amended other than by a
written instrument signed by the party against whom enforcement of any such
amendment or waiver is sought.
Section 13. RESTRICTED SECURITIES.
(a) REGISTRATION OR EXEMPTION REQUIRED. This Warrant has been
issued in a transaction exempt from the registration requirements of the
Securities Act of 1933, as amended, in reliance upon the provisions of Section
4(2) and Regulation D thereof. This Warrant and the Warrant Shares issuable upon
exercise of this Warrant may not be resold except pursuant to an effective
registration statement or an exemption to the registration requirements of the
Securities Act of 1933 and applicable state laws.
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(b) LEGEND. Any replacement Warrants issued pursuant to
Section 2 and Section 9 hereof and, unless a registration statement has been
declared effective by the SEC in accordance with the Securities Act of 1933, as
amended, with respect thereto, any Warrant Shares issued upon exercise hereof,
shall bear the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN
RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE
DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO A TRANSACTION WHICH IS EXEMPT
FROM, OR NOT SUBJECT TO, SUCH REGISTRATION."
(c) NO OTHER LEGEND OR STOCK TRANSFER RESTRICTIONS. No legend
other than the one specified in Section 13(b) has been or shall be placed on the
share certificates representing the Warrant Shares and no instructions or "stop
transfer orders" (so called "stock transfer restrictions") or other restrictions
have been or shall be given to the Company's transfer agent with respect thereto
other than as expressly set forth in this Section 13.
(d) ASSIGNMENT. Assuming the conditions of Section 13(a) above
regarding registration or exemption have been satisfied, the Warrant Holder may
sell, transfer, assign, pledge or otherwise dispose of this Warrant (each of the
foregoing, a "TRANSFER"), in whole or in part, but only to an Affiliate of the
Warrant Holder. The Warrant Holder shall deliver a written notice to Company,
substantially in the form of the Assignment attached hereto as Exhibit B,
indicating the person or persons to whom the Warrant shall be Transferred and
the respective number of warrants to be Transferred to each assignee. The
Company shall effect the Transfer within ten (10) days, and shall deliver to the
Transferee(s) designated by the Warrant Holder a Warrant or Warrants of like
tenor and terms for the appropriate number of shares. In connection with and as
a condition of any such proposed Transfer, the Company may request the Warrant
Holder to provide an opinion of counsel to the Warrant Holder in form and
substance reasonably satisfactory to the Company to the effect that the proposed
Transfer complies with all applicable federal and state securities laws.
(e) INVESTOR'S COMPLIANCE. Nothing in this Section 13 shall
affect in any way the Investor's obligations under any agreement to comply with
all applicable securities laws upon resale of the Common Stock.
Section 14. NOTICES. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be
given in accordance with Section 11.04 of the Purchase Agreement.
Section 15. MISCELLANEOUS. This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought. The headings in this Warrant are for purposes of
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reference only, and shall not limit or otherwise affect any of the terms hereof.
The invalidity or unenforceability of any provision hereof shall in no way
affect the validity or enforceability of any other provision.
IN WITNESS WHEREOF, this Warrant was duly executed by the undersigned,
thereunto duly authorized, as of the date first set forth above.
AMERICAN TECHNOLOGY CORPORATION
By:/s/ Michael A. Russell
Michael A. Russell
Chief Financial Officer
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EXHIBIT A TO THE WARRANT
EXERCISE FORM
AMERICAN TECHNOLOGY CORPORATION
The undersigned hereby irrevocably exercises the right to purchase
__________________ shares of Common Stock ("Warrant Shares") of American
Technology Corporation, a Delaware corporation (the "Company"), evidenced by the
attached Warrant, and (CIRCLE EITHER (i) or (ii)) (i) tenders herewith payment
of the Aggregate Exercise Price with respect to such shares in full, in the
amount of $________, in cash, by certified or official bank check or by wire
transfer for the account of the Company or (ii) elects, pursuant to Section 2(c)
of the Warrant, to convert such Warrant into shares of Common Stock of American
Technology Corporation on a cashless exercise basis, all in accordance with the
conditions and provisions of said Warrant.
As of the date hereof, the undersigned reaffirms to the Company the
following representations and warranties:
(a) If an entity, the undersigned is a company duly organized,
validly existing and in good standing under its jurisdiction of
incorporation and has the requisite corporate power and authority to
exercise the Warrant and purchase the Warrant Shares;
(b) The undersigned and its advisors, if any, have been
furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the purchase of the
Warrant Shares which have been requested by the undersigned. The
undersigned and its advisors, if any, have been afforded the
opportunity to ask questions of the Company. The undersigned has sought
such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision with respect to its acquisition of
the Warrant Shares. The Investor understands that it (and not the
Company) shall be responsible for its own tax liabilities that may
arise as a result of this exercise.
The undersigned is an "accredited investor" as defined in Regulation D
of the United States Securities Act of 1933, as amended and the rules and
regulations promulgated thereunder.
The undersigned requests that stock certificates for such Warrant
Shares be issued, and a Warrant representing any unexercised portion hereof be
issued, pursuant to this Warrant, in the name of the registered Warrant Holder
and delivered to the undersigned at the address set forth below.
Dated:_____________________________
___________________________________
Signature of Registered Holder
Name of Registered Holder (Print)
___________________________________
Address
EXHIBIT B TO THE WARRANT
ASSIGNMENT
(To be executed by the registered Warrant Holder
desiring to transfer the Warrant)
FOR VALUED RECEIVED, the undersigned Warrant Holder of the attached
Warrant hereby sells, assigns and transfers unto the persons below named the
right to purchase ______________ shares of Common Stock of American Technology
Corporation (the "Company") evidenced by the attached Warrant and does hereby
irrevocably constitute and appoint ______________________ attorney to transfer
the said Warrant on the books of the Company, with full power of substitution in
the premises.
Dated:___________________________________
Signature
Fill in for new Registration of Warrant:
_________________________________________
Name
_________________________________________
Please print name and address of assignee
(including zip code number)