WARRANT AGREEMENT
WARRANT AGREEMENT (this "Agreement"), dated as of September 29, 1997, by
and between Amnex, Inc., a corporation incorporated under the laws of the State
of New York (the "Company"), and HSBC Securities, Inc. (the "Initial Holder" or
"HSBC").
W I T N E S S E T H :
WHEREAS, the Company and HSBC are parties to a Purchase Agreement dated
September 11, 1997 (the "Purchase Agreement");
WHEREAS, as an inducement to HSBC to enter into the Purchase Agreement, the
Company has agreed to issue to HSBC Warrants (as hereinafter defined)
exercisable, in accordance with the terms and conditions thereof, for shares of
Common Stock (as hereinafter defined) of the Company;
WHEREAS, the Company has authorized the issuance of the Warrants; and
WHEREAS, HSBC now desires to subscribe for, and the Company now desires to
issue the Warrants to HSBC upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth herein and other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions.
1
1.01 Definitions. As used herein:
"Affiliate" shall mean, with respect to any Person, any other Person that
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with their correlative meanings, the terms "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of power to direct or cause the direction of the
management and policies of such Person (whether through ownership of securities
or partnership or other ownership interests, contract or otherwise), provided
that, in any event, any Person which owns, directly or indirectly, more than 10%
of the securities having ordinary voting power for the election of directors or
other
2
governing body of a corporation or more than 10% of the partnership or other
ownership interests of any Person (other than as a limited partner of such other
Person) will be deemed to control such corporation or other Person.
Notwithstanding the foregoing, neither the Initial Holder nor any of its
Affiliates shall be deemed to be an Affiliate of the Company.
"Business Day" shall mean any day other than a Saturday, Sunday or any
other day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
"Common Stock" shall mean the Company's authorized Common Stock, par value
$0.001 per share, as constituted on the date hereof.
"Commission" shall mean the Securities and Exchange Commission or any
successor entity.
"Deferral Period" shall have the meaning set forth in the Registration
Rights Agreement.
"Demand Registration" shall have the meaning provided in Section 5.01(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exercise Price" shall have the meaning set forth in the Warrant.
"Final Offering Memorandum" shall mean the Company's Offering Memorandum
dated September 11, 1997, as amended by the Supplement dated September 25, 1997,
relating to the Notes.
"GAAP" shall mean accounting principles generally accepted in the United
States from time to time.
"Galesi Warrants" shall have the meaning provided in Section 3.05.
"Holder" shall mean the Initial Holder and each other holder of any Warrant
or Warrant Share that is a direct or indirect transferee of the Initial Holder
or any other Holder as
3
permitted hereunder unless, with respect to any such Warrant Share, such Warrant
Share is acquired in a public distribution pursuant to an effective registration
statement under the Securities Act or pursuant to a transaction exempt from
registration under the Securities Act, if securities sold in such transaction
may be resold without registration under the Securities Act.
"Holder Expenses" shall have the meaning specified in Section 5.05.
"Notes" shall mean $15,000,000 principal amount of 8 1/2% Convertible
Subordinated Notes of the Company Due 2002 (plus an option to purchase up to
$8,000,000 additional principal amount of such Notes to cover over-allotments)
to be issued and sold by the Company to the Initial Holder for resale as set out
in the Final Offering Memorandum.
"Optional Notes" shall mean the Notes issued upon the exercise of the
Over-allotment Option, if any.
"Over-allotment Option" shall mean HSBC's option to purchase up to
$8,000,000 additional principal amount of the Notes to cover over-allotments.
"Person" shall mean an individual, a corporation, a limited liability
company, a company, a voluntary association, a general partnership, a limited
partnership, a trust, an unincorporated organization or a government or any
agency, instrumentality or political subdivision thereof.
"Piggy-Back Registration" shall have the meaning provided in Section 5.02.
"Purchase Agreement" shall mean the purchase agreement dated September 11,
1997 between the Company and the Initial Holder relating to the offering and
sale of the Notes.
"Registrable Securities" shall mean any Warrant Shares until (i) one or
more registration statements covering any such Warrant Shares has become
effective under the Securities Act and all such Warrant Shares have been
disposed of pursuant to such effective registration statement, (ii) such Warrant
Shares are sold under circumstances in which all of the applicable conditions of
Rule 144 (or any similar provisions then in force) under the Securities Act are
met, (iii) such Warrant Shares may be sold pursuant to Rule 144(k), (iv) the
Company has delivered a new certificate or other evidence of ownership for such
Warrant Shares not bearing any legend relating
4
to restrictions on transfer and such Warrant Shares may be resold without
registration under the Securities Act or (v) such Warrant Shares are no longer
outstanding.
"Registration Expenses" shall have the meaning provided in Section 5.05.
"Registration Period" shall have the meaning provided in Section 5.04(a).
"Registration Rights Agreement" shall have the meaning provided in Section
5.02.
"Required Holders" shall mean the holders of more than 50% of all Warrant
Shares (assuming the full exercise of all outstanding Warrants).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"shares of Common Stock" shall have the meaning provided in Section 4.1(b)
of the Warrants.
"Shelf Registration" shall mean (i) a registration statement filed on any
appropriate form under Rule 415 promulgated under the Securities Act or any
successor rule or regulation or (ii) an amendment or supplement to any
then-effective shelf registration.
"Suspension Period" shall have the meaning provided in Section
5.01(b)(iii).
"Warrant" shall mean an outstanding Warrant substantially in the form of
Exhibit A hereto issued in accordance with this Agreement and any Warrant or
Warrants issued upon transfer thereof or in substitution therefor.
"Warrant Share" shall mean a share of Common Stock issued or issuable upon
exercise of a Warrant. For purposes of this Agreement, a Warrant Share shall be
deemed to be "outstanding" from and after the date hereof until the redemption
or cancellation of such Warrant Share (or, if the related Warrant has not been
exercised, the expiration, repurchase or cancellation of such Warrant) by the
Company; provided, however, that for purposes of the definition of "Required
Holders", Warrant Shares shall not be deemed to be outstanding if they have been
sold pursuant to an effective registration statement.
5
1.02 Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be delivered hereunder shall be prepared, in accordance with GAAP.
Section 2. Terms and Conditions of Issuance of Warrants.
2.01 Issuance of the Warrants. In consideration of the premises and other
good and valuable consideration, the Company hereby agrees to issue to the
Initial Holder (i) on the date hereof one or more Warrants to purchase an
aggregate of 161,615 shares of Common Stock and (ii) on the date of the closing
of the exercise of the Over-allotment Option, if any, one or more warrants to
purchase an additional number of shares of Common Stock that shall be equal to
3% of the total number of shares of Common Stock into which the Optional Notes
are convertible (in each case as may be adjusted as provided in the Warrants).
Section 3. Representations and Warranties of the Company. The Company
represents and warrants to each Holder as follows:
3.01 Authorization. The Company has all necessary power and authority to
execute, deliver and perform its obligations under this Agreement and the
Warrants and to issue and deliver the Warrants and Warrant Shares; the
execution, delivery and performance by the Company of this Agreement and the
Warrants have been duly authorized by all necessary action; each of this
Agreement and the Warrants has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company
enforceable in accordance with its terms, subject, as to enforceability, to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws relating to creditors' rights generally and to
general equitable principles.
3.02 Reservation; Valid Issuances. The Warrant Shares have been duly and
validly reserved for issuance upon the exercise of the Warrants. The Warrants,
when issued and delivered pursuant hereto, and the Warrant Shares when issued
and delivered upon exercise of the Warrants in accordance with their terms and
the payment of the applicable Exercise Price, will be validly issued, fully paid
and non-assessable, with no liability on the part of the holders thereof, and
are not subject to any preemptive rights, rights of first refusal or rights of
first offer.
6
3.03 No Breach. None of the execution and delivery by the Company of this
Agreement or the Warrants, the consummation of the transactions herein or
therein contemplated, including the issuance and delivery of the Warrants and,
upon the exercise of the Warrants, the Warrant Shares, or compliance with the
terms and provisions hereof or thereof will conflict with or result in a breach
of, or require any consent under, the Certificate of Incorporation or By-Laws of
the Company, or any applicable law or regulation, or any order, writ, injunction
or decree of any court or governmental authority or agency (although the Company
will need to comply with the applicable provisions of the Securities Act, the
Exchange Act and state securities laws in connection with the exercise by the
Holders of their rights under Sections 5.01 and 5.02 hereof), or any agreement
or instrument to which the Company is a party or by which it is bound or to
which any of its properties or assets is subject, or constitute a default under
any such agreement or instrument or result in the creation or imposition of any
lien upon any of the revenues or assets of the Company pursuant to the terms of
any such agreement or instrument.
3.04 Approvals. No authorizations, approvals or consents of, and no filings
or registrations with, any governmental or regulatory authority or agency, which
have not already been made or obtained, are necessary for the execution,
delivery or performance by the Company of this Agreement or the Warrants, the
consummation of the transactions contemplated herein and therein or the validity
or enforceability hereof or thereof, except for compliance by the Company with
the applicable provisions of the Securities Act, the Exchange Act and state
securities laws in connection with the exercise by the Holders of their rights
under Sections 5.01 and 5.02 hereof.
3.05 Capitalization. The Company's authorized equity capitalization is as
set forth in the Final Offering Memorandum; the Common Stock conforms in all
material respects to the description thereof contained under the heading
"Description of Capital Stock" in the Final Offering Memorandum. As of the date
hereof, except as set forth in the Final Offering Memorandum under the heading
"Description of Capital Stock," there are no other outstanding shares of capital
stock of the Company and, except as set forth therein and for (i) the Warrants,
(ii) the warrants issued to Xxxxxxxxx Xxxxxx and the Xxxxxxxxx Xxxxxx
Irrevocable Grantor-Trust dated October 18, 1991 on January 7, 1997 and June 3,
1997, respectively, which entitle him and it to purchase 1,500,000 shares of
Common Stock at an exercise price of $3.03 per share (subject to reduction in
certain circumstances) and 500,000 shares of Common Stock at an exercise price
of $2.3125 per share (plus 100,000 additional shares of Common Stock in case of
certain defaults, as described in such warrant), respectively (the "Galesi
Warrants"), (iii) other warrants for the purchase of an aggregate of
approximately 2,260,000 shares of Common Stock, (iv) options to purchase
approximately
7
3,500,000 shares of Common Stock issued under the Company's 1992 Stock Option
Plan (v) written agreements to issue an aggregate of approximately 950,000
shares of Common Stock in effect on the date hereof, (vi) promissory notes
convertible into an aggregate of approximately 3,100,000 shares of Common Stock
and (vii) the Notes, there are no outstanding options or warrants to acquire, or
any securities convertible into, any shares of capital stock of the Company.
3.06 Offer of Warrants. Except to the extent, if any, caused by the
issuance of the Galesi Warrants, neither the Company nor any Person acting on
its behalf has directly or indirectly offered the Warrants or any part thereof
or any similar securities for sale to, or solicited any offer to buy any of the
same from, or otherwise approached or negotiated in respect thereof with, any
Person other than the Initial Holder so as to cause the registration provisions
of the Securities Act to apply to the offer and sale of the Warrants. Neither
the Company nor any Person acting on its behalf has taken or will take any
action which would subject the offer and sale of the Warrants to the provisions
of Section 5 of the Securities Act, or to the provisions of any state securities
law requiring registration of securities, notification of the issuance or sale
thereof or confirmation of the availability of any exemption from such
registration except pursuant to this Agreement.
Section 4. Covenants.
4.01 Notice of Merger. Prior to the exercise of all of the Warrants, the
Company shall give each Holder at least 20 Business Days' prior written notice
before it agrees to any merger, acquisition, consolidation or similar
transaction in which the Company shall not be the surviving corporation.
4.02 Inspection. The Company covenants and agrees that it will permit each
Holder and its representatives to examine and make extracts and copies from the
books and records of the Company during normal business hours to the same extent
that any shareholder of the Company has the right to do so under the laws of the
State of New York.
4.03 Information. The Company covenants and agrees that it will deliver to
each Holder such financial statements and other information regarding the
Company or any of its subsidiaries that the Company is obligated to prepare and
deliver to its shareholders generally, in each case at the same time such
financial statements and other information are delivered to such shareholders.
The Company hereby acknowledges and agrees that each Holder may share with any
of its Affiliates any information related to the Company and any of its
subsidiaries (including,
8
without limitation, any non-public customer information regarding the
creditworthiness of the Company and its subsidiaries). Each Holder agrees to
treat, and to cause its respective Affiliates to treat, any non-public
information received from the Company pursuant to this Section 4.03 as
confidential.
4.04 Rules 144 and 144A. The Company covenants that it will file any
reports required to be filed by it under the Exchange Act and that it will take
such further action as the Initial Holder or the Required Holders may reasonably
request, all to the extent required from time to time to enable the Holders to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rules 144 and 144A under the
Securities Act, as such Rules may be amended from time to time, or (b) any
similar or successor rules or regulations hereafter adopted by the Commission.
In particular, while any Registrable Securities remain outstanding, the Company
will make available, upon request, to any Holder the information required
pursuant to Rule 144(d)(4) under the Securities Act during any period in which
the Company is not subject to Section 13 or 15(d) of the Exchange Act. Upon the
request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
Section 5. Registration Rights.
5.01 Demand Registrations. (a) Demand Registrations. If (i) the Company
fails to timely file the Shelf Registration required under the Registration
Rights Agreement, (ii) the Company fails to cause such Shelf Registration to
become effective within the 180-day time period set forth in the Registration
Rights Agreement, (iii) the number of Deferral Periods exceeds one in any
three-month period or three in any twelve-month period, or (iv) the number of
days in a Deferral Period exceeds 30 days, then on the date of such event the
Holders of the Warrants shall have demand registration rights as set forth in
this Section 5.01. From and after such event, for so long as the Warrants or any
Registrable Securities are outstanding, the Holder may make a written request to
the Company for registration under the Securities Act on Form S-1 or Form S-3
(or other similar short-form if the Company then qualifies for such short form
registration) of Registrable Securities for public offering (a "Demand
Registration"); provided, however, that the Holders shall have the right to only
one Demand Registration of all or any part of their Registrable Securities.
Whenever the Company shall receive a request for a Demand Registration, the
Company will promptly give written notice of such registration request to all
Holders. All requests made pursuant to this Section
9
5.01(a) will specify the number of shares of Registrable Securities to be
registered and will also specify the intended methods of disposition thereof.
(b) Effective Registration. (i) A registration initiated as a Demand
Registration shall not be deemed a Demand Registration until such registration
has become effective and (except in the case of a Shelf Registration) until the
Registrable Securities included in such registration have actually been sold;
provided, however, that a registration that does not become effective after the
Company has filed a registration statement with respect thereto solely by reason
of the refusal to proceed by the Holders shall be deemed to have been effected
by the Company unless the Holders shall have elected (without any obligation) to
pay, and in fact pay all reasonable Registration Expenses in connection with
such registration.
(ii) The Company may delay the filing of a registration statement for
up to 90 days if at the time of a request for registration under Section
5.01(a) above, (i) the Company is a party to a transaction involving the
purchase, sale, conversion or issuance of securities of the Company, (ii)
there is material undisclosed information concerning the Company or any
subsidiary of the Company which cannot be disclosed for bona fide and
significant business reasons, which reason shall be provided to the
Holders, in writing (iii) financial statements required to be included or
incorporated in the registration statement have not been prepared or are
otherwise not available or (iv) the Company reasonably expects to promptly
commence an offering of securities of the Company and the investment banker
for the Company shall advise the Company in writing (with a copy to the
Holders) that, in its opinion, the offering contemplated by the Company
would be materially and adversely affected by the sale of Registrable
Securities by the Holders. The Company shall promptly notify the Holders of
any delay in such filing, the reasons for such delay and proposed length of
such delay.
(iii) The Company may suspend the effectiveness of any registration
statement filed pursuant to a Demand Registration or, without suspending
such effectiveness, instruct the Holders that no sales of Registrable
Securities included in such registration statement may be made (a
"Suspension Period") (and the Holders shall forthwith discontinue
disposition of any such Registrable Securities) if, in the Company's
reasonable good faith judgment, the Company would be required to disclose
any actions taken or proposed to be taken by the Company, which disclosure
would have a material adverse effect on the Company or on such actions by
providing the Holders with written notice of such Suspension Period and the
reasons therefor. The Company shall use its best efforts to provide such
notice as soon as reasonably practicable prior to the commencement of
10
a Suspension Period; provided that in any event the Company shall provide
such notice no later than two Business Days prior to the commencement of
such Suspension Period. No more than one Suspension Period may be commenced
in any three-month period, no more than three Suspension Periods may be
commenced in any 12-month period and no Suspension Period shall exceed 30
days. The Company shall give prompt written notice to the Holders of the
termination of any Suspension Period.
(c) No Right of Company or Other Person to Piggyback on Demand
Registrations. Neither the Company nor any Person owning any of its securities
(other than the Holders) shall have the right to include any of the Company's
securities in a registration statement initiated as a Demand Registration under
this Section 5.01, unless (i) such securities are of the same class and type as
the Registrable Securities being registered and (ii) if such Demand Registration
is to be in the form of an underwritten offering, the Company or such Person, as
applicable, agrees in writing to sell their securities on the same terms and
conditions as apply to the Registrable Securities being sold. If any Person
owning any securities of the Company (other than any Holder) registers
securities of the Company in a Demand Registration (in accordance with the
provisions of this Section 5.01(c)), such Person shall pay the fees and expenses
of counsel to such Person and its pro rata share of the Registration Expenses if
the Registration Expenses for such registration are not paid by the Company, for
any reason. The foregoing provisions of this Section 5.01(c) are subject to the
rights of certain Persons as set forth under the caption "Description of Capital
Stock -- Registration Rights" in the Final Offering Memorandum. The Company
covenants that it shall not grant any registration rights to any Person which
rights would, in the reasonable judgment of the Initial Holder, conflict or be
inconsistent with the provisions of this Section 5.01(c), and in the event of
such a conflict or inconsistency, the terms of this Section 5.01(c) shall
prevail.
(d) Selection of Underwriters and Counsel, Etc. If the Initial Holder or
any Affiliate of the Initial Holder so elects, as the case may be, the offering
of such Registrable Securities pursuant to such Demand Registration shall be in
the form of an underwritten offering. If a Demand Registration involves an
underwritten offering, the Initial Holder or such Affiliate thereof, as the case
may be, shall have the right to select (i) the investment banker or bankers and
manager or managers to administer the offering (who may include the Initial
Holder and one or more of its Affiliates); provided, however, that any
investment bankers and managers other than the Initial Holder or one of its
Affiliates, must be reasonably satisfactory to the Company, and (ii) one law
firm as counsel to represent the Holders. Any Holder participating in an
underwritten offering pursuant to this Section 5.01 or Section 5.02 shall, if
required by the managing underwriter or underwriters
11
of such offering, enter into an underwriting agreement in a form customary for
underwritten offerings of the same general type as such offering.
5.02 Piggy-Back Registration. If, at any time or from time to time while
any Warrants or Registrable Securities are outstanding, the Company proposes to
file a registration statement with respect to any of its securities (whether for
its own or another's account) under the Securities Act (including the Shelf
Registration to be filed by the Company in accordance with its obligations under
the Registration Rights Agreement dated September 29, 1997 between the Company
and the Initial Holder (the "Registration Rights Agreement"), but excluding
registration statements on Form X-0, X-0 or other forms that do not include
substantially the same information as would be required in a form for the
general registration of securities or that would not be available for
registration of Registrable Securities), the Company shall, as expeditiously as
possible, give written notice to the Holders of the Company's intention to file
such registration statement. If, within 20 days after receipt of such notice,
any Holder submits a written request to the Company specifying the Registrable
Securities such Holder proposes to sell or otherwise dispose of (a "PiggyBack
Registration"), the Company shall include the number of shares of Registrable
Securities specified in such Holder's request in such registration statement and
the Company shall use its best efforts to keep each such registration statement
in effect and to maintain compliance with each Federal and state law and
regulation for the period necessary for such Holder to effect the proposed sale
or other disposition.
5.03 Reduction of Offering. Notwithstanding anything contained herein, if
the managing underwriter or underwriters of an offering described in Section
5.01 or 5.02 hereof delivers a written opinion to the Holders that the size of
the offering that the Holders, the Company or any other Person intends to make
or the kind or combination of securities that the Holders, the Company and any
other Persons intend to include in such offering are such that the success of
the offering would be materially and adversely affected by inclusion of the
Registrable Securities requested to be included, then the amount of any
securities proposed to be offered shall be reduced or excluded from the offering
as follows:
(i) in the case of a Demand Registration, (x) all securities proposed
to be included in such offering by Persons other than the Holders shall be
reduced or excluded from such offering on a pro rata basis (or on another
basis agreed to by such other Persons) before any Registrable Securities of
the Holders are reduced or excluded from such offering, and (y) in the
event that any Registrable Securities of the Holders are required to be
reduced or excluded from such offering (which
12
will only be required after all securities of Persons other than the
Holders have been reduced or excluded as provided in immediately preceding
clause (x)), then the number of Registrable Securities of the Holders shall
be reduced or excluded from such offering on a pro rata basis;
(ii) in the case of a Piggy-Back Registration initiated by a Person
other than the Company, all securities (including Registrable Securities)
to be included in such offering by the Company, the Holders and the holders
of similar "piggyback" registration rights shall be reduced or excluded
from such offering on a pro rata basis before any securities of the Persons
initiating the Piggy-Back Registration are reduced or excluded; and
(iii) in the case of a Piggy-Back Registration initiated by the
Company, all securities (including Registrable Securities) to be included
in such offering by the Holders and any other holders of similar
"piggy-back" registration rights shall be reduced or excluded from such
offering on a pro rata basis before any securities of the Company are
reduced or excluded.
The foregoing provisions of this Section 5.03 are subject to the rights of
certain Persons as set forth under the caption "Description of Capital Stock --
Registration Rights" in the Final Offering Memorandum.
5.04 Registration Procedures. Whenever any Holder or Holders request that
any Registrable Securities be registered pursuant to this Section 5, the Company
will use its reasonable best efforts to effect the registration of the sale of
such Registrable Securities in accordance with the intended method of
disposition thereof as quickly as practicable, and in connection with any such
request:
(a) The Company will as expeditiously as possible prepare and file with the
Commission a registration statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of distribution thereof, and
use its reasonable best efforts to cause such filed registration statement to
become and remain effective for a period of not less than 180 days or until all
of such Registrable Securities have been disposed of (if earlier) (such period,
the "Registration Period"); provided, however, that, if the Holders specify that
such registration shall be a Shelf Registration, the Company shall use its
reasonable best efforts to effect such
13
Shelf Registration; provided further, that, in the case of a Piggy-Back
Registration, if the Company shall furnish to the Holders a certificate signed
by its chief executive officer stating that in such officer's good faith
judgment it would be significantly disadvantageous to the Company or its
shareholders for such a registration statement to be filed as expeditiously as
possible, the Company shall have a period of not more than 60 days within which
to file such registration statement measured from the date of receipt of the
request in accordance with Section 5.02 hereof.
(b) The Company will, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to the
Holders requesting registration of Registrable Securities and each underwriter,
if any, of the Registrable Securities covered by such registration statement
copies of such registration statement as proposed to be filed, and thereafter
furnish to the Holders requesting registration of Registrable Securities and
underwriter, if any, such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein), the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents as the Holders requesting registration of Registrable Securities
or underwriter may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such Holders.
(c) After the filing of the registration statement, the Company will
promptly notify the Holders of any stop order issued or threatened by the
Commission and take all reasonable actions required to prevent the entry of such
stop order or to remove it if entered.
(d) The Company will use its reasonable best efforts to (i) register or
qualify the Registrable Securities under such other securities or blue sky laws
of such jurisdictions in the United States as the Holders requesting
registration of Registrable Securities reasonably (in light of such Holders'
intended plan of distribution) request and (ii) cause such Registrable
Securities to be registered with or approved by such other governmental agencies
or authorities as may be necessary by virtue of the business and operations of
the Company and do any and all other acts and things that may be reasonably
necessary or advisable to enable the Holders to consummate the disposition of
the Registrable Securities owned by the Holders; provided, however, that the
Company will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for
14
this paragraph (d), (B) subject itself to taxation in any such jurisdiction or
(C) consent to general service of process in any such jurisdiction.
(e) The Company will immediately notify the Holders, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the occurrence of an event requiring the preparation of a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and
promptly make available to the Holders any such supplement or amendment.
(f) The Company will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities.
(g) The Company will make available for inspection by the Holders
requesting registration of Registrable Securities, any underwriter participating
in any disposition pursuant to such registration statement and any attorney,
accountant or other professional retained by such Holders or underwriter
(collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the "Records")
as shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any Inspectors in connection with
such registration statement. Records which the Company determines, in good
faith, to be confidential and which it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in such
registration statement or (ii) the release of such Records is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction. In the
event that an Inspector or any of its representatives is requested or required
(by oral questions, interrogatories, requests for information or documents,
subpoena, or similar process) to disclose any of the confidential information
contained in the Records, it is agreed that such Inspector or its
representative, as the case may be, will provide the Company with prompt notice
of such request(s) so that the Company may seek an appropriate protective order
or other appropriate remedy and/or waive such Inspector's or its
representative's compliance with this provision. In the event that such
protective order or other remedy is not obtained,
15
or that the Company grants a waiver hereunder, such Inspector or its
representative may furnish that portion of the Records which it is legally
compelled to disclose. Each Holder agrees that information obtained by it as a
result of such inspections shall be deemed confidential and shall not be used by
it as the basis for any market transactions in the securities of the Company or
its Affiliates unless and until such is made generally available to the public.
(h) The Company will furnish to each underwriter, if any, a signed
counterpart, addressed to such underwriter, of (i) an opinion or opinions of
counsel to the Company and (ii) a comfort letter or comfort letters from the
Company's independent public accountants, each in customary form and covering
such matters of the type customarily covered by opinions or comfort letters, as
the case may be, as the managing underwriter therefor reasonably requests.
(i) The Company will otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to the
Holders, as soon as reasonably practicable, an earnings statement covering a
period of 12 months, beginning within three months after the effective date of
the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act.
(j) The Company will (at its own expense) use its best efforts to cause all
such Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed.
The Company may require the Holders requesting registration of Registrable
Securities to promptly furnish in writing to the Company such information
regarding the distribution of the Registrable Securities as the Company may from
time to time reasonably request and such other information as may be legally
required in connection with such registration.
The Holders agree that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5.04(e) hereof, the
Holders will forthwith discontinue disposition of any Registrable Securities
registered pursuant to this Section 5 pursuant to the registration statement
covering such Registrable Securities until the Holders' receipt of the copies of
the supplemented or amended prospectus contemplated by Section 5.04(e) hereof,
and, if so directed by the Company, the Holders will deliver to the Company all
copies, other than
16
permanent file copies then in such Holders' possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice. In the event the Company shall give such notice, the Company shall
extend the period during which such registration statement shall be maintained
effective (including the Registration Period) by the number of days during the
period from and including the date of the giving of notice pursuant to Section
5.04(e) hereof to the date when the Company shall make available to the Holder a
prospectus supplemented or amended to conform with the requirements of Section
5.04(e) hereof.
5.05 Registration Expenses. In connection with any registration statement
required to be filed hereunder, the Company shall pay the following registration
expenses incurred in connection with the registration hereunder (the
"Registration Expenses"): (i) all registration and filing fees, (ii) fees and
expenses of compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel in connection with blue sky qualifications of
the Registrable Securities), (iii) printing expenses, (iv) internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (v) the fees and expenses
incurred in connection with the listing of the Registrable Securities, (vi) fees
and disbursements of counsel for the Company and customary fees and expenses for
independent certified public accountants retained by the Company (including the
expenses of any comfort letters or costs associated with the delivery by
independent certified public accountants of a comfort letter or comfort letters
requested pursuant to Section 5.04(h) hereof), (vii) the fees and expenses of
any special experts retained by the Company in connection with such
registration, and (viii) reasonable fees and expenses of one law firm acting as
counsel for the Holders. The Company shall have no obligation to pay any
underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities, or any out-of-pocket expenses of Holders (other than as
provided in clause (viii) above) selling Registrable Securities under this
Section 5 (or the agents who manage its account) (collectively, the "Holder
Expenses").
5.06 Indemnification and Contribution. (a) In connection with each
registration statement relating to the disposition of Registrable Securities,
the Company shall indemnify and hold harmless each of the Holders, each
underwriter of Registrable Securities, each partner, officer, director or
employee of each of the Holders or any such underwriter and each Person, if any,
who controls (within the meaning of either the Securities Act or the Exchange
Act) any of the Holders or any such underwriter against all losses, claims,
damages or liabilities, joint or several, to which any of the Holders, such
underwriter or any such Person may be subject arising out of or based upon (A)
any untrue statement or alleged untrue statement of a material fact contained in
such registration
17
statement or the prospectus included therein (or any supplement or amendment
thereto) or a preliminary prospectus, or (B) any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and the Company shall reimburse each of
the Holders and each of such other Persons for any reasonable legal or other
expenses incurred in connection with the investigation or defense thereof (any
such reimbursement to be made as such expenses are incurred); provided, however,
that the Company shall not be liable in any such instance to the extent that any
such loss, claim, damage or liability arises out of or is based upon (A) any
untrue statement or omission or alleged untrue statement or omission made in any
such registration statement, preliminary prospectus, or prospectus (or amendment
or supplement) in reliance upon and in conformity with information relating to
any Person referred to above who would be indemnified by the Company pursuant to
this Section 5.06(a) furnished in writing to the Company by such Person
expressly for use therein, (B) use of a Shelf Registration Statement or the
related Prospectus during a period when a stop order has been issued in respect
of such Shelf Registration or any proceedings for that purpose have been
initiated or use of a Prospectus when use of such Prospectus has been deferred
by the Company; provided further, in each case, that the Company delivered prior
notice, and the Holders have received such prior notice, in accordance with
Section 7.02 hereof of such stop order, initiation of proceedings or deferral or
(C) if the Holder fails to deliver a Prospectus or the then current Prospectus.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) In connection with each registration relating to the disposition of
Registrable Securities, each Holder shall severally indemnify the Company, each
director of the Company, each officer of the Company who signs the registration
statement and any Person who controls the Company (within the meaning of either
the Securities Act or the Exchange Act) to the same extent as the indemnity from
the Company provided in Section 5.06(a) hereof, but only with respect to
information relating to such Holder furnished in writing to the Company by such
Holder expressly for use in any such registration statement, preliminary
prospectus or prospectus (or amendment or supplement). The maximum liability of
any Holder under this Section 5.06(b) shall be limited to the aggregate amount
of all sales proceeds actually received by such Holder upon the sale of such
Holder's Registrable Securities in connection with such registration.
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any Person in respect of which indemnity may be sought
pursuant to subsections (a) or (b) of this Section 5.06, such Person (the
"indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
18
indemnifying party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the indemnified party, and shall assume the
payment of all fees and disbursements related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (x) the indemnifying party and indemnified party
shall have mutually agreed to the retention of such counsel at the expense of
the indemnifying party or (y) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate law firm (in addition to
any reasonably necessary local counsel) at any time for all such indemnified
parties, and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate law firm for the indemnified parties,
such law firm shall be designated in writing by the indemnified parties. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability arising out
of such proceeding.
(d) If the indemnification provided for in this Section 5.06 is unavailable
to the indemnified parties in respect of any losses, claims, damages or
liabilities referred to herein, then each such indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities as between the Company on the one hand and the respective Holder on
the other, in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and such Holder on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and of the respective Holder on
the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such
19
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and each Holder agree that it would not be just and equitable
if contribution pursuant to this Section 5.06(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5.06(d), no Holder shall be
required to contribute any amount in excess of the amount of all sales proceeds
actually received by such Holder upon the sale of such Holder's Registrable
Securities in connection with such registration. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
5.07 Participation in Underwritten Registrations. No Person may participate
in any underwritten registration hereunder unless such Person (a) agrees to sell
such Person's securities on the basis provided in any underwriting arrangements
approved by the Company and the Holders and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and these registration rights.
5.08 Holdback Agreement. (a) The Company and its Affiliates agree not to
effect any public sale or distribution of any Registrable Securities or any
securities similar to the Registrable Securities, or any securities convertible
into or exchangeable or exercisable for Registrable Securities during the 14
days prior to, and during the Registration Period of any registration statement
(other than the Shelf Registration Statement) filed pursuant to Section 5.01 or
5.02 of this Agreement with respect to an underwritten public offering of any
such securities (except as part of such registration statement where the Holders
consents) or the commencement of a public distribution of Registrable
Securities; provided, however, that the provisions of this Section 5.08(a) shall
not prevent (x) the conversion or exchange of any securities pursuant to their
terms into or for other securities or (y) the issuance of securities pursuant to
the Company's employee benefit plans.
20
(b) To the extent not inconsistent with applicable law, each Holder agrees
not to effect any public sale or distribution of the issue being registered or
any similar security of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the 14 days prior to and
during the Registration Period of any such registration statement with respect
to an underwritten public offering of any such securities (except in any case as
part of such registration), if and to the extent requested by the Company in the
case of a non-underwritten public offering or if and to the extent requested by
the managing underwriter or underwriters in the case of an underwritten public
offering.
5.09 Specific Enforcement. The Company and each of the Holders acknowledge
that remedies at law for the enforcement of this Section 5 may be inadequate and
intend that this Section 5 shall be specifically enforceable in accordance with
Section 7.04 hereof.
Section 6. Compliance with the Securities Act.
6.01 Representations and Warranties. Each Holder by its acceptance of the
Warrants represents and warrants as of the date hereof and as of the date of any
exercise of the Warrants held by such Holder as follows:
(a) Such Holder is acquiring the Warrants and the related Warrant
Shares for its own account and not as nominee or agent for any other Person
and not for offer or sale in any manner that would be in violation of the
securities laws of the United States of America or any state thereof,
without prejudice, however, to its right at all times to sell or otherwise
dispose of all or any part of said Warrants or Warrant Shares under a
registration under the Securities Act or any applicable state securities
laws or under an exemption from such registration available under such Act
or any applicable state securities laws.
(b) Such Holder is an "accredited investor" within the meaning of
Regulation D promulgated under the Securities Act.
6.02 Transfer Restriction. No Holder will sell, transfer or otherwise
dispose of any Warrant or Warrant Share other than to an Affiliate of such
Holder, an employee of such Holder or one of its Affiliates or in a transaction
that complies with the registration requirements of Section 5 of the Securities
Act or pursuant to an exemption (including, without limitation, sales under
Rules
21
144 and 144A promulgated under the Securities Act) therefrom. Notwithstanding
the foregoing sentence, in accordance with an agreement between the Initial
Purchaser and Xxxxxxxx Xxxxxx & Xxxxx ("RPC") whereby RPC has agreed to act as
the international sales agent in connection with the sale of the Notes, the
Initial Holder may transfer to RPC, in one or more transactions, up to 66.67% of
the Warrants to be issued to the Initial Holder in connection with the Notes
sold by RPC. Upon any such transfer to RPC, RPC shall be deemed to be a Holder
for all purposes hereunder.
6.03 Legend. Each Warrant or certificate or instrument (if any)
representing the Warrant Shares issued upon exercise of the Warrants (and each
Warrant or certificate or instrument (if any) representing the Warrant Shares
issued to transferees of such Warrant or certificate or instrument (if any)),
unless at such time as the same is no longer required under the applicable
requirements of the Securities Act, shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR
INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). SUCH SECURITIES MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION OR
AN EXEMPTION FROM REGISTRATION UNDER THE ACT."
Section 7. Miscellaneous.
7.01 Expenses. The Company agrees to pay all fees and disbursements of the
Initial Holder (including the reasonable fees and expenses of its counsel) in
connection with the purchase and sale of the Warrants as contemplated by this
Agreement or any amendments hereto and the fees and disbursements of the Initial
Holder (including the reasonable fees and expenses of its counsel) in connection
with the negotiation, execution, delivery and enforcement of this Agreement and
the Warrants or any waiver or consent hereunder or thereunder or any amendment
hereof or thereof; provided, however, that the sum of the Company's obligations
to pay such fees hereunder and the out-of-pocket expenses of the Initial
Purchaser as provided in Section 5(p) of the Purchase Agreement shall not exceed
$375,000. In addition, the Company agrees to pay any and all stamp, transfer and
other similar taxes payable or determined to be payable by the Initial Holder in
connection with the execution and delivery of this Agreement, any Warrants or
the issuance or transfer of the Warrants (other than any such taxes in
connection with a transfer of the Warrants to another Holder).
22
7.02 Notices. All notices and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telex, telegraph, facsimile,
cable or other writing and telexed, faxed, telegraphed, cabled, mailed or
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof; or, as to any party, at such other
address as shall be designated by such party in a notice to the Company given in
accordance with this Section 7.02. All such communications shall be deemed to
have been duly given when transmitted by telex or facsimile, delivered to the
telegraph or cable office or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.
7.03 Exclusion. This Agreement and the Warrants shall be binding upon, and
inure solely to the benefit of the Company and the Holders, and no other Person
shall acquire or have any right under or by virtue of this Agreement or the
Warrants (other than any such Person to whom such Holders have transferred an
interest in the Warrants pursuant to the terms thereof and hereof).
7.04 Specific Performance. The Company acknowledges and agrees that in the
event of any breach of this Agreement or the Warrants by the Company, the
Holders would be irreparably harmed and could not be made whole by monetary
damages. The Company accordingly agrees (i) to waive the defense in any action
for specific performance that a remedy at law would be adequate, and (ii) that
the Holders, in addition to any other remedy to which they may be entitled at
law or in equity, shall be entitled to compel specific performance of this
Agreement or the Warrants in any action instituted in the United States District
Court for the Southern District of New York, or, in the event such Court would
not have jurisdiction for such action, in any court of the United States or any
state thereof having subject matter jurisdiction for such action.
7.05 Holder Not a Shareholder. Prior to the exercise of any of its
Warrants, no Holder shall, except as specifically provided herein, be entitled
to any of the rights of, or be deemed to be, a shareholder in the Company.
7.06 No Waivers. No failure or delay by any party in exercising any rights,
power or privilege hereunder or under the Warrants shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies provided herein shall be cumulative and not exclusive of
any rights or remedies provided by law.
23
7.07 Amendments and Waivers. Any provision of this Agreement or the
Warrants may be amended or waived if, but only if, such amendment or waiver is
in writing and signed by the Company, the Required Holders and, until such time
as the Initial Holder (or any Affiliate thereof) no longer holds any Warrants or
Warrant Shares, the Initial Holder (or such Affiliates).
7.08 GOVERNING LAW. THIS AGREEMENT AND THE WARRANTS SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO THE CHOICE OF LAW OR CONFLICT OF LAW PRINCIPLES OF ANY
JURISDICTION WHICH WOULD CAUSE THE APPLICATION OF THE DOMESTIC SUBSTANTIVE LAWS
OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
7.09 Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatories thereto and hereto were upon the same instrument.
***
24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
AMNEX, INC.
By
Name:
Title:
Address for Notices:
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxx Xxxxx, Esq.
With a copy to:
Certilman Balin Xxxxx & Xxxxx, LLP
00 Xxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxx Xxxxxxx, Esq.
HSBC SECURITIES, INC.
By
Name:
Title:
Address for Notices:
000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. : (000) 000-0000
Telecopier No. : (000) 000-0000
Attention: Xxx Xxxxxxxxxx
25
With a copy to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx Xxxxxxx, Esq.
26
EXHIBIT A
FORM OF WARRANT
THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH
SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE ACT.
AMNEX, INC.
Common Stock Purchase Warrant
Representing Right To Purchase _________ shares of Common Stock of Amnex, Inc.
(as such number may be adjusted as provided herein).
No. R-_
FOR VALUE RECEIVED, AMNEX, INC, a New York corporation (the "Company"),
hereby certifies that _________________, or its registered assigns (the
"Holder"), is entitled, subject to the provisions of this Warrant, to purchase
from the Company, at any time or from time to time during the Exercise Period
(as hereinafter defined), up to a total of _________ shares (as such number of
shares may be adjusted pursuant to Section 2 and/or 4 below, the "Warrant
Shares") of Common Stock (as hereinafter defined), at $2.7844 per share (as such
price may be adjusted pursuant to Section 2 or 4 below, the "Exercise Price").
This Warrant is issued to the Holder (together with such other Warrants as may
be issued in exchange, transfer or replacement of this Warrant, the "Warrants")
and entitles the Holder to purchase the Warrant Shares (as hereinafter defined).
Section 1.1. Certain Definitions. Terms defined in the Warrant Agreement
(as hereinafter defined) and not otherwise defined herein have, as used herein,
the respective meanings
1
provided for therein. The following additional terms, as used herein, have the
following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any
successor entity.
"Common Stock" shall mean the Company's authorized Common Stock, $0.001 par
value, per share, as constituted on the date hereof.
"Conversion Price" shall have the meaning set forth in the Indenture.
"Current Market Price" shall have the meaning set forth in Section 4.1(h).
"Daily Market Price" shall have the meaning set forth in Section 4.1(j).
"Date of Issuance" shall have the meaning set forth in Section 8.
"Excess Payment" shall have the meaning set forth in Section 4.1(i).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exercise Period" shall mean the period of time from September 29, 1997
until 5:00 P.M., local time in The City of New York, on September 25, 2002.
"Exercise Price" shall have the meaning set forth in the preamble.
"Indenture" shall mean the Indenture, dated as of September 29, 1997, by
and between Amnex, Inc. and Marine Midland Bank, as trustee, pursuant to which
the Notes are issued.
"Notes" shall mean $15,000,000 aggregate principal amount of the Company's
8 1/2% Convertible Subordinated Notes Due 2002 (plus an option to purchase up to
an additional $8,000,000 aggregate principal amount of such Notes to cover
over-allotments).
"Trading Day" shall mean (A) if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another national
securities exchange, a day on which the
2
New York Stock Exchange or such other national securities exchange is open for
business, (B) if the applicable security is quoted on The Nasdaq National Market
or Nasdaq Stock Market's Small Cap Market, as the case may be, a day on which
trades may be made thereon or (C) if the applicable security is not so listed,
admitted for trading or quoted, any day other than a Saturday, Sunday or any
other day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
"Warrant Agreement" shall mean the Warrant Agreement, dated as of September
25, 1997, between the Company and the Initial Holder, as such agreement may be
modified, amended and supplemented and in effect from time to time.
Section 1.2. Other Definitions. Capitalized terms used but not defined
herein shall have the meaning set forth in the Indenture.
Section 2. Exercise of Warrant; Cancellations of Warrant. This Warrant may
be exercised in whole or in part, at any time or from time to time, during the
Exercise Period, by presentation and surrender of this Warrant to the Company at
its principal office at the address set forth on the signature page hereof (or
at such other address as the Company may after the date hereof notify the Holder
in writing), or at the office of its transfer agent or warrant agent, if any,
with the Purchase Form annexed hereto duly executed and accompanied by proper
payment either (at the option of the Holder) in cash or check equal to the
Exercise Price for the Warrant Shares for which this Warrant is being exercised.
Upon receipt by the Company of this Warrant and such Purchase Form,
together with the Exercise Price for the Warrant Shares for which this Warrant
is being exercised, the Holder shall be deemed to be the holder of record of the
number of Warrant Shares specified in such Purchase Form, notwithstanding that
the transfer books of the Company shall then be closed or that certificates (if
any) representing the Warrant Shares shall not then be actually delivered to the
Holder. The Company shall pay any and all documentary stamp or similar issue
taxes payable in respect of the issue of the Warrant Shares. If this Warrant
should be exercised in part only, the Company shall, upon surrender of this
Warrant, execute and deliver a new Warrant evidencing the rights of the Holder
thereof to purchase the balance of the Warrant Shares issuable hereunder.
Section 3. Exchange, Transfer, Assignment or Loss of Warrant. This Warrant
is exchangeable at the option of, and without cost to, the Holder, upon
presentation and surrender of this
3
Warrant to the Company for other Warrants of different denominations, entitling
the Holder to purchase in the aggregate the same number of Warrant Shares. The
Holder of this Warrant shall be entitled, without obtaining the consent of the
Company, to transfer or assign its interest in (and rights under) this Warrant
in whole or in part to any Person or Persons, subject to the provisions of
Section 6 of the Warrant Agreement. Upon surrender of this Warrant to the
Company, with the Assignment Form annexed hereto duly executed and funds
sufficient to pay any transfer tax, the Company shall, without charge, execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees
named in such instrument of assignment and, if the Holder's entire interest is
not being assigned, in the name of the Holder, and this Warrant shall promptly
be canceled. This Warrant may be divided or combined with other Warrants that
carry the same rights upon presentation hereof at the office of the Company,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof. Upon receipt by
the Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company shall execute and deliver a new Warrant
of like tenor and date.
Section 4.1. Adjustment of Number of Warrant Shares and Exercise Price. The
number of Warrant Shares purchasable pursuant hereto shall be subject to
adjustment from time to time on and after the Date of Issuance as hereinafter
provided in this Section 4.1.
(a) In case the Company shall at any time after the Date of Issuance (i)
declare or pay a dividend in shares of Common Stock, (ii) make a distribution in
shares of Common Stock, (iii) subdivide its outstanding shares of Common Stock,
(iv) combine its outstanding shares of Common Stock into a smaller number of
shares of Common Stock or (v) issue any shares of its capital stock or other
assets in a reclassification or reorganization of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing entity), the securities purchasable pursuant
hereto shall be adjusted to the number of Warrant Shares and amount of any other
securities, cash or other property of the Company which the Holder would have
owned or have been entitled to receive after the happening of any of the events
described above, had this Warrant been exercised immediately prior to the
happening of such event or any record date with respect thereto. An adjustment
made pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event, retroactive to the record date, if any, for such
event. Any Warrant Shares purchasable as a result of such adjustment shall not
be issued prior to the effective date of such event.
4
(b) For the purpose of this Section 4.1 and Section 4.2 hereof, the term
"shares of Common Stock" shall mean (i) the classes of stock designated as the
Common Stock of the Company as of the date hereof, (ii) any other class of stock
resulting from successive changes or reclassifications of such shares consisting
solely of changes in par value, or from par value to no par value, or from no
par value to par value, or (iii) any other capital stock of the Company which is
not by its terms restricted in amount or timing to the entitlement to dividends
or in the distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of the Company. In theevent that at any time, as a
result of an adjustment made pursuant to this Section 4.1, the Holder shall
become entitled to receive any securities of the Company other than shares of
Common Stock, thereafter the number of such other securities so receivable upon
exercise of this Warrant shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Warrant Shares contained in this Section 4.
(c) In case the Company shall issue rights or warrants to substantially all
holders of Common Stock entitling them (for a period commencing no earlier than
the record date for the determination of holders of Common Stock entitled to
receive such rights or warrants and expiring not more than 45 days after such
record date) to subscribe for or purchase shares of Common Stock (or securities
convertible into Common Stock) at a price per share less than the Current Market
Price per share of Common Stock on such record date (determined as provided in
paragraph (h) below), the number of Warrant Shares purchasable pursuant hereto
shall be adjusted so that the same shall equal the number of Warrant Shares
determined by multiplying the number of Warrant Shares purchasable immediately
prior to such record date by a fraction the numerator of which shall be the
number of shares of Common Stock outstanding on such record date plus the number
of additional shares of Common Stock offered (or into which the convertible
securities so offered are convertible) and the denominator of which shall be the
number of shares of Common Stock outstanding on such record date plus the number
of shares of Common Stock which the aggregate offering price of the offered
shares of Common Stock (or the aggregate conversion price of the convertible
securities so offered) would purchase at such Current Market Price. Such
adjustment shall become effective immediately after such record date.
(d) In case the Company shall distribute to all holders of Common Stock
shares of any class of Capital Stock of the Company other than Common Stock,
evidences of indebtedness or other assets (other than cash dividends out of
current or retained earnings), or shall distribute to substantially all holders
of Common Stock rights or warrants to subscribe for securities (other than
5
those securities referred to in paragraph (c) above), then in each such case the
number of Warrant Shares purchasable pursuant hereto shall be adjusted so that
the same shall equal the number of Warrant Shares determined by multiplying the
number of Warrant Shares purchasable immediately prior to the date of such
distribution by a fraction the numerator of which shall be the Current Market
Price per share of Common Stock on the record date mentioned below (determined
as provided in paragraph (h) below) and the denominator of which shall be such
Current Market Price less the then fair market value (as determined by the Board
of Directors, whose determination shall be conclusive evidence of such fair
market value and described in a Board Resolution (as defined in the Indenture))
of the portion of the assets so distributed or of such subscription rights or
warrants applicable to one share of Common Stock. Such adjustment shall become
effective immediately after the record date for the determination of the holders
of Common Stock entitled to receive such distribution.
(e) In case the Company shall, by dividend or otherwise, at any time
distribute to all holders of its Common Stock cash (including any distributions
of cash out of current or retained earnings of the Company, but excluding any
cash that is distributed as part of a distribution requiring an adjustment
pursuant to paragraph (d) above) in an aggregate amount that, together with the
sum of (x) the aggregate amount of any other distributions to all holders of its
Common Stock made in cash plus (y) all Excess Payments (as defined below in
paragraph (i)), in each case made within the 12 months preceding the date fixed
for determining the shareholders entitled to such distribution (the
"Distribution Record Date") and in respect of which no adjustment to the
Exercise Price of Warrants pursuant to paragraphs (d) or (f) of this Section 4.1
or this paragraph (e) has been made, exceeds 15% of the product of the Current
Market Price per share (determined as provided in paragraph (i) below) of Common
Stock on the Distribution Record Date multiplied by the number of shares of
Common Stock outstanding on the Distribution Record Date (excluding shares of
Common Stock held in the treasury of the Company), the number of Warrant Shares
purchasable pursuant hereto shall be adjusted so that the same shall equal the
number of Warrant Shares determined by multiplying the number of Warrant Shares
purchasable pursuant hereto immediately prior to the effectiveness of the
adjustment contemplated by this paragraph (e) by a fraction the numerator of
which shall be the Current Market Price per share of Common Stock on the
Distribution Record Date (determined as provided in paragraph (h) below) and the
denominator of which shall be such Current Market Price less the amount of such
cash and other consideration (including any Excess Payments) so distributed
applicable to one share of Common Stock (equal to the aggregate amount of such
cash and other consideration (including any Excess Payments) divided by the
number of shares of Common Stock outstanding on the Distribution Record Date).
Such adjustment shall become effective immediately prior to the opening of
business on the day following the Distribution Record Date.
6
(f) In case a tender offer or other negotiated transaction made by the Company
or any subsidiary of the Company for all or any portion of the Common Stock
shall be consummated, if an Excess Payment is made in respect of such tender
offer or other negotiated transaction and the amount of such Excess Payment,
together with the sum of (x) the aggregate amount of all Excess Payments plus
(y) the aggregate amount of all distributions to all holders of the Common Stock
made in cash (including any distributions of cash out of current or retained
earnings of the Company), in each case made within the 12 months preceding the
date of payment of such current negotiated transaction consideration or
expiration of such current tender offer, as the case may be (the "Purchase
Date"), and as to which no adjustment pursuant to paragraph (d) or paragraph (e)
of this Section 4.1 or this paragraph (f) has been made, exceeds 15% of the
product of the Current Market Price per share of Common Stock on the Purchase
Date (determined as provided in paragraph (i) below) multiplied by the number of
shares of Common Stock outstanding (including any tendered shares but excluding
any shares of Common Stock held in the treasury of the Company) on the Purchase
Date, the number of Warrant Shares purchasable pursuant hereto shall be adjusted
so that the same shall equal the number of Warrant Shares purchasable pursuant
hereto determined by multiplying the number of Warrant Shares purchasable
pursuant hereto in effect immediately prior to the effectiveness of the
adjustment contemplated by this paragraph (f) by a fraction the numerator of
which shall be the Current Market Price per share of Common Stock on the
Purchase Date (determined as provided in paragraph (h) below) and the
denominator shall be such Current Market Price less the amount of such Excess
Payments and such cash distributions, if any, applicable to one share of Common
Stock (equal to the aggregate amount of such Excess Payments and such cash
distributions divided by the number of shares of Common Stock outstanding on the
Purchase Date). Such adjustment shall become effective immediately prior to the
opening of business on the day following the Purchase Date.
(g) Whenever the number of Warrant Shares purchasable pursuant hereto is
adjusted as herein provided, the Exercise Price shall be adjusted by multiplying
the Exercise Price immediately prior to such adjustment by a fraction, the
numerator of which shall be the number of Warrant Shares purchasable pursuant
hereto immediately prior to such adjustment, and the denominator of which shall
be the number of Warrant Shares purchasable pursuant hereto immediately
thereafter.
(h) The "Current Market Price" per share of Common Stock on any date of
determination shall be deemed to be the average of the Daily Market Prices for
the shorter of (i) 15 consecutive Business Days ending on the last full Trading
Day on the exchange or market referred to in determining such Daily Market
Prices prior to the time of determination or (ii) the period
7
commencing on the date next succeeding the first public announcement of the
issuance of such rights or such warrants or such other distribution or such
negotiated transaction through such last full Trading Day on the exchange or
market referred to in determining such Daily Market Prices prior to the time of
determination.
(i) "Excess Payment" means the excess of (A) the aggregate of the cash and
fair market value of other consideration paid by the Company or any of its
subsidiaries with respect to the shares acquired in a tender offer or other
negotiated transaction over (B) the Daily Market Price on the Trading Day
immediately following the completion of such tender offer or other negotiated
transaction multiplied by the number of acquired shares.
(j) "Daily Market Price" means the price of a share of Common Stock on the
relevant date, determined (a) on the basis of the last reported sale price
regular way of the Common Stock as reported on the Nasdaq Stock Market's Small
Cap Market (the "Nasdaq Small Cap"), or if the Common Stock is not then listed
on the Nasdaq Small Cap, as reported on such national securities exchange upon
which the Common Stock is listed, or (b) if there is no such reported sale on
the day in question, on the basis of the average of the closing bid and asked
quotations regular way as so reported, or (c) if the Common Stock is not listed
on the Nasdaq Small Cap or on any national securities exchange, on the basis of
the average of the high bid and low asked quotations regular way on the day in
question in the over-the-counter market as reported by the National Association
of Securities Dealers Automated Quotation System, or if not so quoted, as
reported by National Quotation Bureau, Incorporated, or a similar organization.
4.2. No Adjustment. No adjustment in the number of Warrant Shares
purchasable pursuant hereto shall be required until cumulative adjustments
amount to 1% or more of the number of Warrant Shares purchasable pursuant hereto
as last adjusted; provided, however, that any adjustments which by reason of
this Section 4.2 are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section 4
shall be made to the nearest cent or to the nearest one-hundredth of a share, as
the case may be. No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest. No
adjustment need be made for a change in the par value or no par value of the
Common Stock.
4.3. Other Adjustments. In the event that shares of Common Stock are not
delivered after the expiration of any of the rights or warrants referred to in
Section 4.1(c) and Section 4.1(d)
8
hereof, the number of Warrant Shares purchasable pursuant hereto shall be
readjusted to the number of Warrant Shares purchasable pursuant hereto which
would otherwise be in effect had the adjustment made upon the issuance of such
rights or warrants been made on the basis of delivery of only the number of
shares of Common Stock actually delivered.
4.4. Adjustments for Tax Purposes. The Company may, at its option, make
such reductions in the number of Warrant Shares purchasable pursuant hereto, in
addition to those required by Section 4.1 above, as it determines to be
advisable in order that any stock dividend, subdivision of shares, distribution
of rights to purchase stock or securities or distribution of securities
convertible into or exchangeable for stock made by the Company to its
shareholders will not be taxable to the recipients thereof.
4.5. Adjustments by the Company. The Company from time to time may, to the
extent permitted by law, increase the number of Warrant Shares purchasable
pursuant hereto by any amount for any period of at least 20 days, in which case
the Company shall give at least 15 days' prior notice of such increase in
accordance with Section 4.6, if the Board of Directors has made a determination
that such increase would be in the best interests of the Company, which
determination shall be conclusive.
4.6. Reorganization, Merger, etc. If any capital reorganization,
reclassification or similar transaction involving the capital stock of the
Company (other than a stock dividend), any consolidation, merger or business
combination of the Company with another corporation, or the sale or conveyance
of all or any substantial part of its assets to another corporation (such
transactions collectively, a "Reorganization"), shall be effected in such a way
that holders of the shares of Common Stock shall be entitled to receive stock,
securities or assets (including, without limitation, cash)with respect to or in
exchange for shares of the Common Stock, then, prior to and as a condition of
such Reorganization, lawful and adequate provision shall be made whereby the
Holder shall thereafter have the right to purchase and receive upon the basis
and upon the terms and conditions specified in this Warrant and in lieu of the
Warrant Shares of the Company immediately theretofore purchasable and receivable
upon the exercise of this Warrant, such shares of stock, securities or assets as
may be issued or payable with respect to or in exchange for a number of
outstanding Warrant Shares equal to the number of Warrant Shares immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby had such Reorganization not taken place. The Company shall
not effect any such Reorganization unless prior to or simultaneously with the
consummation thereof the survivor or successor corporation (if other than the
Company) resulting
9
from a consolidation or merger, or the corporation purchasing the Company's
assets, as the case may be, shall assume by written instrument executed and sent
to each registered Holder, the obligation to deliver to such Holder such shares
of stock, securities or assets as, in accordance with the foregoing provisions,
such Holder may be entitled to receive.
4.7. Other Events. If any event occurs as to which the provisions of
Section 4.6 are not strictly applicable or, if strictly applicable, would not,
in the good faith judgment of the Board of Directors of the Company, fairly and
adequately protect the purchase rights represented by the Warrants in accordance
with the essential intent and principles of such provisions, then such Board of
Directors shall make such adjustments in the application of such provisions, in
accordance with such essential intent and principles, as shall be reasonably
necessary, in the good faith opinion of such Board of Directors, to protect such
purchase rights as aforesaid.
4.8. Statement on Warrant Certificates. Irrespective of any adjustments in
the Exercise Price or the number or kind of Warrant Shares, this Warrant may
continue to express the same price and number and kind of shares as are stated
on the front page hereof.
4.9. Exceptions to Adjustment. Anything herein to the contrary
notwithstanding, the Company shall not be required to make any adjustment of the
number of Warrant Shares issuable hereunder in the case of the issuance of the
Warrants or the issuance of shares of the Common Stock upon exercise of the
Warrants.
4.10. Common Stock Outstanding. The number of shares of the Common Stock
outstanding at any time shall not include shares owned or held by or for the
account of the Company, but the disposition of any such shares shall be
considered an issue or sale of the Common Stock for the purposes of this Section
4.
4.11. Adjustment Notices to Holder. Upon any increase or decrease in the
number of Warrant Shares purchasable upon the exercise of this Warrant the
Company shall, within 15 days thereafter, deliver written notice thereof to the
Holder, which notice shall state the increased or decreased number of Warrant
Shares purchasable upon the exercise of this Warrant and the changed Exercise
Price, if any, setting forth in reasonable detail the method of calculation and
the facts upon which such calculations are based. If the Company shall fail so
to timely deliver any notice required pursuant to this Section 4.11, the
Exercise Period shall be extended until the Holder shall have received the
proper notification under this Section 4.11.
10
Section 5.1. Special Covenants of the Company. The Company covenants and
agrees that until all Warrants have been exercised in full:
(a) The Company will not, by amendment of its certificate of
incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, directly or indirectly avoid or seek to avoid the
observance or performance of any of the terms of this Warrant or the
Warrant Agreement, 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 Holder
against dilution or other impairment in accordance with the terms of this
Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable
upon the exercise of the Warrants above the Exercise Price payable therefor
upon such exercise, and (ii) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of stock upon the exercise of all
Warrants from time to time outstanding (including as a result of a
reduction in the purchase price pursuant to the terms hereof).
(b) If any Warrant Shares required to be reserved for the purposes of
exercise of this Warrant require registration with or approval of any
governmental authority under any federal law (other than the Securities
Act) or under any state law before such Warrant Shares may be issued upon
exercise of this Warrant, the Company will, at its expense, as
expeditiously as possible use its best efforts to cause such Warrant Shares
to be duly registered or approved, as the case may be.
(c) If at any time as the Common Stock is listed on any national
securities exchange (as defined in the Exchange Act), the Company will, at
its expense, obtain and maintain the approval for listing on each such
exchange upon official notice of issuance of all Warrant Shares receivable
upon the exercise of the Warrants at the time outstanding and maintain the
listing of such Warrant Shares after their issuance; and the Company will
so list on such national securities exchange, will register under the
Exchange Act (and any similar state statute then in effect), and will
maintain such listing of, any other securities that at any time are
issuable upon exercise of the Warrants, if and at the time that any
securities of the same class shall be listed on such national securities
exchange by the Company.
11
(d) The Company will give notice to the Holder within five days after
the Company shall have filed with the Commission or with any national
securities exchange an application to register any securities of the
Company pursuant to the Exchange Act.
Section 5.2. Pro Rata Purchase. If at any time the Company or any of its
Affiliates shall offer to purchase any shares of Common Stock, other than shares
purchased from any employees of the Company or any of its subsidiaries as
permitted by the terms of any employee benefit plan or shareholders or similar
agreement that has been approved by the Board of Directors of the Company, the
Company shall, as part of such offer, also make an offer to purchase the
Warrants and Warrant Shares from the holders of all outstanding Warrant Shares
and Warrants, and with any purchase pursuant to each offer to be allocated pro
rata among the holders of Warrant Shares and Warrants and the other holders of
Common Stock accepting each offer to purchase.
12
Section 6. Notification by the Company. In case at any time:
(i)the Company shall declare any dividend or make any distribution
upon its Common Stock or any other class of its capital stock; or
(ii)the Company shall offer for subscription pro rata to the holders
of its Common Stock or any other class of its capital stock any additional
shares of stock of any class or any other securities convertible into or
exchangeable for shares of stock or any rights or options to subscribe
thereto; or
(iii)the Board of Directors of the Company shall authorize any capital
reorganization, reclassification or similar transaction involving the
capital stock of the Company, or a sale or conveyance of all or a
substantial part of the assets of the Company, or a consolidation, merger
or business combination of the Company with another Person; or
(iv)actions or proceedings shall be authorized or commenced for a
voluntary or involuntary dissolution, liquidation or winding-up of the
Company;
then, in any one or more of such cases, the Company shall give written notice to
the Holder, at the earliest time legally practicable (and not less than 15 days
before any record date or other date set for definitive action) of the date on
which (A) the books of the Company shall close or a record shall be taken for
such dividend, distribution or subscription rights or options or (B) such
reorganization, reclassification, sale, conveyance, consolidation, merger,
dissolution, liquidation or winding up shall take place or be voted on by
shareholders of the Company, as the case may be. Such notice shall also specify
the date as of which the holders of the Common Stock of record shall participate
in said dividend, distribution, subscription rights or options or shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, sale, conveyance,
consolidation, merger, dissolution, liquidation or winding-up, as the case may
be. If the action in question or the record date is subject to the effectiveness
of a registration statement under the Securities Act or to a favorable vote of
shareholders, the notice required by this Section 6 shall so state.
Section 7. No Voting Rights; Limitations of Liability. Prior to exercise,
this Warrant will not entitle the Holder to any voting rights or other rights as
a shareholder of the Company. No provision hereof, in the absence of affirmative
action by the Holder to purchase Common Stock, and no enumeration herein of the
rights or privileges of the Holder shall give rise to any liability of the
Holder for the purchase price of Common Stock acquirable by exercise hereof or
as a shareholder of the Company.
13
Section 8. Date of Issuance. The date the Company initially issues this
Warrant will be deemed to be the "Date of Issuance" hereof and of each new
Warrant issued in exchange, transfer or replacement hereof, regardless of the
number of times new certificates representing the unexpired and unexercised
rights formerly represented by this Warrant shall be issued.
Section 9. Amendment and Waiver. (a) No failure or delay of the Holder in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of such right or power, or any abandonment
or discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Holder are cumulative and not exclusive of any rights
or remedies which it would otherwise have. The provisions of this Warrant may be
amended, modified or waived with (and only with) the written consent of the
Company and the Required Holders.
(b) Any such amendment, modification or waiver effected pursuant to this
Section 9 shall be binding upon the Holders of all Warrants and Warrant Shares,
upon each future holder thereof, upon the Company and its shareholders. In the
event of any such amendment, modification or waiver, the Company shall give
prompt written notice thereof to all Holders and, if appropriate, notation
thereof shall be made on all Warrants thereafter surrendered for registration of
transfer or exchange.
(c) No notice or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances.
Section 10. No Fractional Warrant Shares. The Company shall not be required
to issue stock certificates representing fractions of Warrant Shares, but may at
its option in respect of any final fraction of a Warrant Share make a payment in
cash based on the then current market price of the Common Stock (as determined
in good faith by the Board of Directors of the Company) after giving effect to
the full exercise or conversion of the Warrants.
Section 11. Reservation of Warrant Shares. The Company will authorize,
reserve and keep available at all times, free from preemptive rights, a
sufficient number of Warrant Shares to satisfy the requirements of this Warrant
and any other outstanding Warrants.
14
Section 12. Notices. All notices, requests, consents and other
communications hereunder shall be in writing (including, telegraphic, telex,
facsimile or cable communication) and delivered, mailed telegraphed, telexed,
telecopied or cabled:
(i)if to a Holder, to its address as set forth in records of the Company;
and
(ii)if to the Company, to Amnex, Inc., 0 Xxxxxx Xxxxx, Xxxx Xxxxxxx, Xxx
Xxxx 00000, Attention: President, or at such other address as may have been
furnished to the Holder in writing by the Company, with a copy to Xxx Xxxxx,
Esq., Amnex, Inc. 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000.
All such notices and communications shall, when mailed, telegraphed,
telexed, facsimiled, or cabled or sent by overnight courier, be effective three
Business Days after deposited in the mails, certified, return receipt requested,
when delivered to the telegraph company, cable company or one day following
delivery to an overnight courier, as the case may be, or sent by telex or
facsimile device.
Section 13. Headings. The headings of the sections and subsections of this
Warrant are inserted for convenience only and shall not be deemed to constitute
a part of this Warrant.
Section 14. Governing Law; Consent to Jurisdiction. THIS WARRANT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK. If any action or proceeding shall be brought by the Holder in order to
enforce any right or obligation in respect of this Warrant, the Company hereby
consents and submits, to the fullest extent permitted by law, to the
non-exclusive jurisdiction of any state or federal court of competent
jurisdiction sitting within the area comprising the Southern District of New
York on the date of this Warrant, and agrees that venue will be proper in any
such court.
Section 15. Binding Effect. The terms and provisions of this Warrant shall
inure to the benefit of the original Holder and its successors and assigns and
shall be binding upon the Company and its successors and assigns, including,
without limitation, any Person succeeding to the Company by merger,
consolidation or acquisition of all or substantially all of the Company's
assets.
15
Section 16. Registration Rights; etc. Each Holder shall be entitled to the
benefits of registration and other rights pursuant to the Warrant Agreement and
shall be subject to the restrictions on sale or transfer of this Warrant or the
Warrant Shares subject hereto, as the case may be, pursuant to the Warrant
Agreement.
***
IN WITNESS WHEREOF, the seal of the Company and the signature of its duly
authorized officer have been affixed hereto as of September 29, 1997.
AMNEX, INC.
By______________________________
Name:
Title:
Attest: _________________
16
PURCHASE FORM
Dated ________________,
The undersigned hereby irrevocably elects to exercise the attached Warrant
to the extent of purchasing ___ shares of the Common Stock issuable hereunder
and hereby makes payment of $________ in payment of the exercise price thereof.
-----------------
INSTRUCTIONS FOR REGISTRATION OF
COMMON STOCK
Name
(please typewrite or print in block letters)
Address
Signature
17
ASSIGNMENT FORM
FOR VALUE RECEIVED, ____________________________ hereby sells, assigns and
transfers unto
Name
(please typewrite or print in block letters)
Address
its right to purchase ___ shares of the Common Stock represented by this Warrant
and does hereby irrevocably constitute and appoint __________________ Attorney,
to transfer the same on the books of the Company, with full power of
substitution in the premises.
Date: ________________________
Signature ________________________
Signature Guaranteed:
1
