WARRANT AGREEMENT
American ATM Corp., a Florida corporation (Company), and AMERICAN SECURITIES
TRANSFER & TRUST, INC. (AST), ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, a Colorado corporation (Warrant Agent), agree as follows:
1. Purpose. The Company proposes to publicly offer and issue 2,000,000
Warrants ("Warrants") each warrant permitting the purchase of one
(1) share of the Company's $.001 par value common stock ("Shares").
2. Warrants. Each Warrant will entitle the registered holder of a Warrant
("Warrant Holder") to purchase from the Company one Share at $3.00 per
Share ("Exercise Price"). A Warrant Holder may exercise all or any
number of Warrants resulting in the purchase of a whole number of
Shares.
3. Exercise Period. The Warrants may be exercised at any time during the
period commencing the earlier of December 28, 1997 or upon the
effectiveness of a Registration Statement under the Securities Act of
1933, as amended, in which the Shares underlying the Warrant are
registered and ending at 3:00 p.m., Denver, Colorado time on December
27, 1999 (Expiration Date) except as changed by Section 11 of this
Agreement. After the Expiration Date, any unexercised Warrants will be
void and all rights of Warrant Holders shall cease.
4. Certificates. The Warrant Certificates shall be in registered form only
and shall be substantially in the form set forth in Exhibit A attached
to this Agreement. Warrant Certificates shall be signed by, or shall
bear the facsimile signature of, the President or a Vice President of
the Company and the Secretary or an Assistant Secretary of the Company
and shall bear a facsimile of the Company's corporate seal. If any
person, whose facsimile signature has been placed upon any Warrant
Certificate as the signature of an officer of the Company, shall have
ceased to be such officer before such Warrant Certificate is
countersigned, issued and delivered, such Warrant Certificate shall be
countersigned, issued and delivered with the same effect as if such
person had not ceased to be such officer. Any Warrant Certificate may be
signed by, or made to bear the facsimile signature of, any person who at
the actual date of the preparation of such Warrant Certificate shall be
a proper officer of the Company to sign such Warrant Certificate even
though such person was not such an officer upon the date of this
Agreement.
5. Countersigning. Warrant Certificates shall be manually countersigned by
the Warrant Agent and shall not be valid for any purpose unless so
countersigned. The Warrant Agent hereby is authorized to countersign and
deliver to, or in accordance with the instructions of, any Warrant
Holder any Warrant Certificate which is properly issued.
6. Registration of Transfers and Exchanges. The Warrant Agent shall from
time to time register the transfer of any outstanding Warrant
Certificate upon records maintained by the Warrant Agent for such
purpose upon surrender of such Warrant Certificate to the Warrant Agent
for transfer, accompanied by appropriate instruments of transfer in form
satisfactory to the Company and the Warrant Agent and duly executed by
the Warrant Holder or a duly authorized attorney. Upon any such
registration of transfer, a new Warrant Certificate shall be issued in
the name of and to the transferee and the surrendered Warrant
Certificate shall be canceled.
7. Exercise of Warrants.
a. Any one Warrant or any multiple of one Warrant evidenced by any
Warrant Certificate may be exercised upon any single occasion on or
after the Exercise Date, and on or before the Expiration Date. A
Warrant shall be exercised by the Warrant Holder by surrendering to
the Warrant Agent the Warrant Certificate evidencing such Warrant
with the exercise form on the reverse of such Warrant Certificate
duly completed and executed and delivering to the Warrant Agent, by
good check or bank draft payable to the order of the Company, the
Exercise Price for each Share to be purchased.
b. Upon receipt of a Warrant Certificate with the exercise form thereon
duly executed together with payment in full of the Exercise Price for
the Shares for which Warrants are then being exercised, the Warrant
Agent shall requisition from any transfer agent for the Shares, and
upon receipt shall make delivery of, certificates evidencing the
total number of whole Shares for which Warrants are then being
exercised in such names and denominations as are required for
delivery to, or in accordance with the instructions of, the Warrant
Holder. Such certificates for the Shares shall be deemed to be
issued, and the person to whom such Shares are issued of record shall
be deemed to have become a holder of record of such Shares, as of the
date of the surrender of such Warrant Certificate and
2
payment of the Exercise Price, whichever shall last occur, provided
that if the books of the Company with respect to the Shares shall be
deemed to be issued, and the person to whom such Shares are issued of
record shall be deemed to have become a record holder of such Shares,
as of the date on which such books shall next be open (whether
before, on or after the Expiration Date) but at the Exercise Price,
whichever shall have last occurred, to the Warrant Agent.
c. If less than all the Warrants evidenced by a Warrant Certificate are
exercised upon a single occasion, a new Warrant Certificate for the
balance of the Warrants not so exercised shall be issued and
delivered to, or in accordance with, transfer instructions properly
given by the Warrant Holder until the Expiration Date.
d. All Warrant Certificates surrendered upon exercise of Warrants shall
be canceled.
e. Upon the exercise, or conversion of any Warrant, the Warrant Agent
shall promptly deposit the payment into an escrow account established
by mutual agreement of the Company and the Warrant Agent at a
federally insured commercial bank. All funds deposited in the escrow
account will be disbursed on a weekly basis to the Company once they
have been determined by the Warrant Agent to be collected funds. Once
the funds are determined to be collected, the Warrant Agent shall
cause the share certificate(s) representing the exercised warrants to
be issued.
f. Expenses incurred by American Securities Transfer & Trust, Inc. while
acting in the capacity as Warrant Agent will be paid by the Company.
These expenses, including delivery of exercised share certificates to
the shareholder, will be deducted from the exercise fee submitted
prior to distribution of funds to the Company. A detailed accounting
statement relating to the number of shares exercised, names of
registered warrant holders and the net amount of exercised funds
remitted will be given to the Company with the payment of each
exercise amount
g. At the time of exercise of the Warrants, the transfer fee is to be
paid by the Company.
3
8. Taxes. The Company will pay all taxes attributable to the initial
issuance of Shares upon exercise of Warrants. The Company shall not,
however, be required to pay any tax which may be payable in respect to
any transfer involved in any issue of Warrant Certificates or in the
issue of any certificates of Shares in the name other than that of the
Warrant Holder upon the exercise of any Warrant
9. Mutilated or Missing Warrant Certificates. If any Warrant Certificate
is mutilated, lost, stolen or destroyed, the Company end the Warrant
Agent may, on such terms as to indemnify or otherwise as they may in
their discretion impose (which shall, in the case of a mutilated
Warrant Certificate, include the surrender thereof), and upon receipt
of evidence satisfactory to the Company and the Warrant Agent of such
mutilation, loss, theft or destruction, issue a substitute Warrant
Certificate of like denomination and tenor as the Warrant Certificate
so mutilated, lost, stolen or destroyed. Applicants for substitute
Warrant Certificates shall comply with such other reasonable
regulations and pay any reasonable charges as the Company or the
Warrant Agent may prescribe.
10. Reservation of Shares. For the purpose of enabling the Company to
satisfy all obligations to issue Shares upon exercise of Warrants, the
Company will at all times reserve and keep available free from
preemptive rights, out of the aggregate of its authorized but unissued
shares, the full number of Shares which may be issued upon the exercise
of Warrants which will, upon issue, be fully paid and nonassessable and
free from all taxes, liens, charges and security interests with respect
to the issue thereof.
11. Governmental Restrictions. If any Shares issuable upon the exercise of
Warrants require registration or approval of any governmental
authority, the Company will endeavor to secure such registration or
approval; provided that in no event shall such Shares be issued, and
the Company shall have the authority to suspend the exercise of all
Warrants, until such registration or approval shall have been obtained;
but all Warrants, the exercise of which is requested during any such
suspension, shall be exercisable at the Exercise Price. If any such
period of suspension continues past the Expiration Date, all Warrants,
the exercise of which have been requested on or prior to the Expiration
Date, shall be exercisable upon the removal of such suspension until
the close of business on the business day immediately following the
expiration of such suspension.
4
12. Adjustments. If prior to the exercise of any Warrants the Company shall
have effected one or more stock split-ups, stock dividends or other
increases or reductions of the number of shares of its $.001 par value
common stock outstanding without receiving compensation therefore in
money, services or property, the number of shares of common stock
subject to the Warrant granted shall, (i) if a net increase shall have
been effected in the number of outstanding shares of the Company's
common stock, be proportionately increased, and the cash consideration
payable per share shall be proportionately reduced, and, (ii) if a net
reduction shall have been effected in the number of outstanding shares
of the Company's common stock, be proportionately reduced and the cash
consideration payable per share be proportionately increased.
13. Notice to Warrant Holders. Upon any adjustment as described in Section
12, the Company within 20 days thereafter shall (i) cause to be filed
with the Warrant Agent a certificate signed by a Company officer
setting forth the details of such adjustment, the method of calculation
and the facts upon which such calculation is based, which certificate
shall be conclusive evidence of the correctness of the matters set
forth therein, and (ii) cause written notice of such adjustments to be
given to each Warrant Holder as of the record date applicable to such
adjustment. Also, if the Company proposes to enter into any
reorganization, reclassification, sale of substantially all of its
assets, consolidation, merger, dissolution, liquidation or winding up,
the Company shall give notice of such fact at least 20 days prior to
such action to all Warrant Holders which notice shall set forth such
facts as indicate the effect of such action (to the extent such effect
may be known at the date of such notice) on the Exercise Price and the
kind and amount of the shares or other securities and property
deliverable upon exercise of the Warrants. Without limiting the
obligation of the Company hereunder to provide notice to each Warrant
Holder, failure of the Company to give notice shall not invalidate
corporate action taken by the Company.
14. No Fractional Warrants or Shares. The Company shall not be required to
issue fractions of Warrants upon the reissue of Warrants, any
adjustments as described in Section 12 or otherwise; but the Company in
lieu of issuing any such fractional interest, shall round up or down to
the nearest full Warrant. If the total Warrants surrendered by exercise
would result in the issuance of a fractional share, the Company shall
not be required to issue a fractional share but rather the aggregate
number
5
of shares issuable will be rounded up or down to the nearest full
share.
15. No Warrant Holder. as such, shall have any rights of a shareholder of
the Company, either at law or equity, and the rights of the Warrant
Holders, as such, are limited to those rights expressly provided in
this Agreement or in the Warrant Certificates. The Company and the
Warrant Agent may treat the registered Warrant Holder in respect of any
Warrant Certificate as the absolute owner thereof for all purposes
notwithstanding any notice to the contrary.
16. Warrant Agent. The Company hereby appoints the Warrant Agent to act as
the agent of the Company and the Warrant Agent hereby accepts such
appointment upon the following terms and conditions by all of which the
Company end every Warrant Holder, by acceptance of his Warrants, shall
be bound:
a. Statements contained in this Agreement and in the Warrant
Certificates shall be taken as statements of the Company. The
Warrant Agent assumes no responsibility for the correctness of any
of the same except such as describes the Warrant Agent or for action
taken or to be taken by the Warrant Agent.
b. The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the Company's covenants contained to
this Agreement or in the Warrant Certificates.
c. The Warrant Agent may consult at any time with counsel satisfactory
to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any
Warrant Holder in respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance with the opinion or
the advice of such counsel, provided the Warrant Agent shall have
exercised reasonable care in the selection and continued employment
of such counsel.
d. The Warrant Agent shall incur no liability or responsibility to the
Company or to any Warrant Holder for any action taken in reliance
upon any notice, resolution, waiver, consent, order, certificate or
other paper, document or instrument believed by it to be genuine and
to have been signed, sent or presented by the proper party or
6
parties.
e. The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
execution of this Agreement, to reimburse the Warrant Agent for all
expense, taxes and governmental charges and all other charges of any
kind in nature incurred by the Warrant Agent in the execution of
this Agreement and to indemnify the Warrant Agent and save it
harmless against any and all liabilities, including judgments, costs
and counsel fees, for this Agreement except as a result of the
Warrant Agent's negligence or bad faith.
f. The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely
to involve expense unless the Company or one or more Warrant Holders
shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred in
connection with such action, suit or legal proceeding, but this
provision shall not effect the power of the Warrant Agent to take
such action as the Warrant Agent may consider proper, whether with
or without any such security or indemnity. All rights of action
under this Agreement or under any of the Warrants may be enforced by
the Warrant Agent without the possession of any of the Warrant
Certificates or the production thereof at any trial or other
proceeding relative thereto, and any such action, suit or proceeding
instituted by the Warrant Agent shall be brought in its name as
Warrant Agent, and any recovery of judgment shall be for the ratable
benefit of the Warrant Holders as their respective rights or
interests may appear.
g. The Warrant Agent and any shareholder, director, officer or employee
of the Warrant Agent may buy, sell or deal in any of the Warrants or
other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract
with or lend money to the Company or otherwise act as fully and
freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
17. Successor Warrant Agent. Any corporation into which the Warrant Agent
may be merged or converted or with which it may be consolidated, or any
corporation resulting from
7
any merger, conversion or consolidation to which the Warrant Agent
shall be a party, or any corporation succeeding to the corporate trust
business of the Warrant Agent, shall be the successor to the Warrant
Agent hereunder without the execution or filing of any paper or any
further act of a party or the parties hereto. In any such event or if
the name of the Warrant Agent is changed, the Warrant Agent or such
successor may adopt the countersignature of the original Warrant Agent
and may countersign such Warrant Certificates either in the name of the
predecessor Warrant Agent or in the name of the successor Warrant
Agent.
18. Change of Warrant Agent. The Warrant Agent may resign or be discharged
by the Company from its duties under this Agreement by the Warrant
Agent or the Company, as the case may be, giving notice in writing to
the other, and by giving a date when such resignation or discharge
shall take effect, which notice shall be sent at least 30 days prior to
the date so specified. If the Warrant Agent shall resign, be discharged
or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Warrant Agent. If the Company shall fail to
make such appointment within a period of 30 days after it has been
notified in writing of such resignation or incapacity by the resigning
or incapacitated Warrant Agent or by any Warrant Holder or after
discharging the Warrant Agent, then any Warrant Holder may apply to the
District Court for Denver County, Colorado, for the appointment of a
successor to the Warrant Agent. Pending appointment of a successor to
the Warrant Agent, either by the Company or by such Court, the duties
of the Warrant Agent shall be carried out by the Company. Any successor
Warrant Agent, whether appointed by the Company or by such Court, shall
be a bank or a trust company, in good standing, organized under the
laws of the State of Colorado or of the United States of America,
having its principal office in Denver, Colorado and having at the time
of its appointment as Warrant Agent, a combined capital and surplus of
at least four million dollars. After appointment, the successor Warrant
Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent
without further act or deed and the former Warrant Agent shall deliver
and transfer to the successor Warrant Agent any property at the time
held by it thereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for effecting the delivery or
transfer. Failure to give any notice provided for in this section,
however, or any defect therein, shall not affect the legality or
validity
8
of the resignation or remover of the Warrant Agent or the appointment
of the successor Warrant Agent, as the case may be.
19. Notices. Any notice or demand authorized by this Agreement to be given
or made by the Warrant Agent or by any Warrant Holder to or on the
Company shall be sufficiently given or made if sent by mall, first
class, certified or registered, postage prepaid, addressed (until
another address is filed in writing by the Company with the Warrant
Agent), as follows:
American ATM Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Any notice or demand authorized by this Agreement to be given or made
by any Warrant Holder or by the Company to or on the Warrant Agent
shall be sufficiently given or made if sent by mail, first class,
certified or registered, postage prepaid, addressed (until another
address is filed in writing by the Warrant Agent with the Company), as
follows:
American Securities Transfer & Trust, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Any distribution, notice or demand required or authorized by this
Agreement to be given or made by the Company or the Warrant Agent to or
on the Warrant Holders shall be sufficiently given or made if sent by
mall, first class, certified or registered, postage prepaid, addressed
to the Warrant Holders at their last known addresses as they shall
appear on the registration books for the Warrant Certificates
maintained by the Warrant Agent.
20. Supplements and Amendments. The Company and the Warrant Agent may from
time to time supplement or amend this Agreement without the approval of
any Warrant Holders in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein or to make any other
provisions in regard to matters or questions arising hereunder which
the Company and the Warrant Agent may deem necessary or desirable.
21. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and
inure to tho benefit of their respective successors and assigns
hereunder.
22. Termination. This Agreement shall terminate at the close
9
of business on the Expiration Date or such earlier date upon which all
Warrants have been exercised; provided, however, that if exercise of
the Warrants is suspended pursuant to Section 11 and such suspension
continues past the Expiration Date, this Agreement shall terminate at
the close of business on the business day immediately following the
expiration of such suspension. The provisions of Section 11 shall
survive such termination.
23. Governing Law. This Agreement and each Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the
State of Colorado and for all purposes shall be construed in accordance
with the laws of said State.
24. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give any person or Corporation other than the Company, the
Warrant Agent and the Warrant Holders any legal or equitable right
remedy or claim under this Agreement; but this Agreement shall be for
the sole and exclusive benefit of the Company, the Warrant Agent and
the Warrant Holders.
25. Counterparts. This Agreement may be executed in any number of
counterparts, each of such counterparts shall for all purposes be
deemed to be an original and all such counterparts shall together
constitute but one and the same instrument.
Date: March 18, 1997 American ATM Corp.
(A Florida corporation)
By: /s/ Mori ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Mori ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President
SEAL
ATTEST:
/s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------
▇▇▇▇▇ ▇▇▇▇▇, Secretary
American Securities Transfer & Trust, Inc.
10
(A Colorado Corporation)
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇ Vice President
SEAL
ATTEST:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, Secretary
11