As filed with the Securities and Exchange Commission on June 10, 1996
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
AMNEX, INC.
(Exact name of registrant as specified in its charter)
New York 11-2790221
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
101 Park Avenue
New York, New York 10178
(212) 867-0166
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Peter M. Izzo, Jr.
President
AMNEX, Inc.
101 Park Avenue
New York, New York 10178
(212) 867-0166
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------
Copies of all communications and notices to:
Fred S. Skolnik, Esq.
Certilman Balin Adler & Hyman, LLP
90 Merrick Avenue
East Meadow, New York 11554
(516) 296-7000
---------------
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement
<PAGE>
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 of
theSecurities Act of 1933, check the following box. [x]
(Cover continued on following page)
<PAGE>
<TABLE><CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed
Proposed maximum
Title of Amount maximum aggregate Amount of
shares to be to be offering price offering registration
registered registered(1) per share (2) price(2) fee
<S> <C> <C> <C> <C>
Common Shares, 1,075,000 $3.40625(3) $3,661,718.70 $1,262.66
par value $.001 shs.
per share,
issuable upon
the exercise of
transferable
warrants
Common Shares, 1,738,690 $3.40625(4) $5,922,412.80 $2,042.21
par value $.001 shs.
per share,
registered for
the benefit of
Selling
Shareholders
TOTAL: $3,304.87
========
</TABLE>
(1) This Registration Statement also covers such additional
number of Common Shares as may be issuable by reason of the
operation of the antidilution provisions of the outstanding
transferable warrants.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457.
(3) Calculated in accordance with Rule 457(g). Represents the
average of the high and low trading prices of the Common Shares
of AMNEX, Inc. on June 3, 1996.
(4) Calculated in accordance with Rule 457(c). Represents the
average of the high and low trading prices of the Common Shares
of AMNEX, Inc. on June 3, 1996.
-------------------------
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which specifically
states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until this registration statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a), may
determine.
--------------------------
<PAGE>
Subject to Completion
Preliminary Prospectus Dated June 10, 1996
PROSPECTUS
---------------
COMMON SHARES
---------------
AMNEX, INC.
This Prospectus relates to 1,738,690 Common Shares (the "Shares") of
AMNEX, Inc. (the "Company").
Of the Shares, 1,075,000 are issuable to Robb, Peck, McCooey Clearing
Corporation ("Robb, Peck"), under certain circumstances, upon the exercise of
outstanding transferable warrants (the "Warrants") at exercise prices ranging
from $2.125 to $2.81 per share. In the event of the exercise of all the
Warrants, the Company will receive gross proceeds of $2,870,750. Robb, Peck is
required to exercise the Warrants only to the extent that it has agreements for
the sale of the underlying Common Shares to its customers and subject to certain
other conditions. This Prospectus covers the issuance of such Common Shares by
the Company upon the exercise of the Warrants and the resale of such Common
Shares by Robb, Peck.
This Prospectus also covers (i) the resale by a certain executive
officer and director of the Company of 25,000 Common Shares issuable upon
exercise of an outstanding warrant (such shares, as well as an additional 25,000
Common Shares covered by (ii) hereof, being subject to a one-year lock-up
agreement as described under "Selling Shareholders"); (ii) the resale by certain
persons, including such executive officer and director, as well as another
executive officer of the Company, of an aggregate of 75,000 Common Shares
issuable pursuant to a subscription to purchase; (iii) the resale by a certain
entity of 200,000 Common Shares issued or issuable pursuant to a contractual
arrangement with the Company; (iv) the resale by certain entities of an
aggregate of 163,690 Common Shares issuable upon the conversion of certain
indebtedness in the principal amount of $550,000, together with interest
thereon; and (v) the resale by a certain entity and certain persons of an
aggregate of 200,000 Common Shares upon the exercise of outstanding warrants
(such shares also being subject to certain limitations on resale for a six month
period). The various persons and entities referred to in this paragraph, as
well as Robb, Peck, are hereinafter referred to individually as a "Selling
Shareholder" and collectively as the "Selling Shareholders". There are no
commitments pursuant to which the Company will receive any proceeds from the
sale of the Shares by the Selling Shareholders. See "Selling Shareholders."
<PAGE>
A PURCHASE OF THESE SECURITIES INVOLVES A CERTAIN DEGREE OF RISK.
SEE "RISK FACTORS."
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
The Company is not aware of any underwriting arrangements with respect
to the sale of the Shares by the Selling Shareholders. Such securities may be
offered and sold from time to time in the over-the-counter market in one or more
transactions, including ordinary brokerage transactions, privately negotiated
transactions or through sales to one or more dealers for resale of the Shares as
principals, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. Usual and customary
or specifically negotiated brokerage fees or commissions may be paid by the
Selling Shareholders in connection with such sales. The Selling Shareholders
and intermediaries through whom the Shares are sold may be deemed "underwriters"
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the Shares offered.
The Company's Common Shares are traded in the over-the-counter market
(NASDAQ symbol: AMXI). On , 1996, the closing bid and asked quotations for
the Company's Common Shares, as reported by NASDAQ, were $ and $ ,
respectively.
---------------
, 1996
<PAGE>
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY TO ANYONE
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR
TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT ANY INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
----------------
AVAILABLE INFORMATION
The Company files reports with the Securities and Exchange Commission
(the "Commission"). Such reports filed by the Company with the Commission can
be inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the following Regional Offices of the Commission: 7 World Trade Center,
New York, New York 10048; and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can
also be obtained from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates.
----------------
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company with the
Commission (File No. 0-17158) and are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 (the "1995 Form 10-K").
(b) The Company's Quarterly Report on Form 10-Q for the period ended
March 31, 1996.
(c) The description of the Company's Common Shares contained in the
Company's Registration Statement on Form 10, as amended.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 after the date of this
Prospectus and prior to the termination of the offering of Common Shares offered
hereby shall be deemed to be incorporated by reference into this Prospectus and
to be a part hereof from their respective dates of filing.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any or all of the documents referred to above which have been
incorporated into this Prospectus by reference (other than exhibits to such
documents). Requests for such copies should be directed to Amy S. Gross,
Secretary, AMNEX, Inc., 101 Park Avenue, New York, New York 10178 (telephone
number: (212) 867-4639).
THE COMPANY
The Company, through its wholly-owned subsidiaries, American Network
Exchange, Inc. ("AMNEX"), Crescent Public Communications Inc., American Hotel
Exchange, Inc. and Hospital TeleServices, Inc., provides a variety of
telecommunications services for operator-assisted ("0+") and direct-dialed long
distance ("1+") telephone calls transmitted throughout the United States and to
international points.
In December 1995, the Company underwent an internal reorganization
designed to enable it to more efficiently focus on its different lines of
business. The new business units reflect the Company's plan to shift its focus
from its core operator services business to higher margin telecommunications
service transactions and integrated (hardware and telecommunications) services.
The reorganization is also intended to enable the Company to exploit market
niches created by the passage of telecommunications reform legislation in early
1996.
3
<PAGE>
Notwithstanding the shift in focus described above, the Company intends to
continue to seek consolidation opportunities for its core business. See Item
1(c) of the 1995 Form 10-K incorporated herein by reference.
The Company is a New York corporation which was organized on March 15,
1985. Its principal executive offices are located at 101 Park Avenue, New York,
New York 10178 (telephone number: (212) 867-0166).
RISK FACTORS
This offering entails certain risks. In analyzing such an investment,
the following factors, among others, should be read and considered carefully in
conjunction with the more detailed information set forth elsewhere herein.
1. Competition. AMNEX experiences formidable competition from AT&T,
-----------
which dominates the long distance and operator service businesses, as well as
from MCI, U.S. Sprint, LDDS and various other third tier carriers providing "0+"
services either as an adjunct to their "1+" business or as their primary
business. In 1995, after several intermediate steps, the FCC finally declared
AT&T to be a non-dominant carrier, thereby granting it a wide range of pricing,
tariff and operational flexibility. In addition to AT&T, many local exchange
carriers ("LECs"), including the Regional Bell Operating Companies ("RBOCs"),
which have significantly greater resources than AMNEX, have entered the operator
services business on a retail and wholesale basis. The Telecommunications Act
of 1996 (the "1996 Act") allows the RBOCs to enter the long distance marketplace
over time and, subject to Federal Communications Commission ("FCC") review, to
participate in the selection of the interLATA and intraLATA carrier at their
own payphones. The RBOCs can be expected to aggressively market their operator
services in competition with AMNEX and other providers. In addition, most major
interexchange carriers ("IXCs"), including MCI and U.S. Sprint, and certain
major non-RBOC LECs have entered the operator services business. Further, AMNEX
is aware of numerous other companies engaged in the operator services business,
either directly or through other entities, some of which have significantly
greater resources than AMNEX. Finally, some IXCs, notably MCI and AT&T, have
introduced specialized operator service products such as 1-800-COLLECT and 1-
800-CALL ATT which compete with a portion of AMNEX's operator services
offerings. AMNEX believes that these "dial around" services have had an adverse
impact on its revenues. See Item 1(c) of the 1995 Form 10-K incorporated herein
by reference.
2. Government Regulation. The Communications Act of 1934 requires
----------------------
that rates charged by long distance and operator service companies, such as
AMNEX, be just and reasonable and grants
4
<PAGE>
authority to the FCC to entertain and investigate complaints regarding
interstate and international services. The FCC has on several occasions
proposed adoption of a system of billed party preference whereby all calls of
the type currently handled by AMNEX would be routed directly to the IXC of the
billed party and not through operator service companies. Although the matter is
still pending before the FCC, given the age of the proceedings, the record
before it and the new mandate of the 1996 Act, it is not expected that the FCC
will adopt billed party preference. However, there can be no assurances in this
regard and, if such proposal is adopted, it would have a material adverse effect
on AMNEX's operator service business. The FCC is also considering a proposal
that it adopt a rate ceiling on operator-assisted calls. Although AMNEX
believes that the proposed ceiling would not have an adverse impact on the
overall profitability of its operator service business, no assurances can be
given that the FCC will not adopt rate cap levels different from those proposed
which would have such adverse effect.
In addition, AMNEX is currently authorized to provide intrastate
interexchange telecommunications service on a resale basis in numerous states
and its activities are regulated by public utilities commissions or commerce
departments in such jurisdictions. In many such states, rate caps on operator
services are in effect and/or the transmission of certain types of intrastate
calls by carriers other than the local telephone companies is prohibited or
restricted. AMNEX is also aware that a few states have found the provision of
competitive operator services not to be in the public interest. Further, from
time to time, various states consider a variety of regulatory measures which
could affect the manner, terms and conditions under which AMNEX could provide
service in such states. No assurances can be given that any regulations, if
adopted, will not have an adverse effect on the profitability of AMNEX's
services. See Item 1(c) of the 1995 Form 10-K incorporated herein by reference.
3. Recent Shift in Business Focus. As discussed under "The Company",
------------------------------
the Company plans to shift its focus from its core operator services business to
higher margin telecommunications service transactions and integrated (hardware
and telecommunications) services. Due to the lack of operating history with
respect to such new services, an evaluation of the long-term prospects of such
business lines is difficult to make. See Item 1(c) of the 1995 Form 10-K
incorporated herein by reference.
4. Material Dependence Upon Executive Officers. No executive officer
-------------------------------------------
of the Company is currently a party to an employment agreement with the Company
or any subsidiary and neither the Company nor any subsidiary has obtained a key-
man insurance policy on the life of any such person. Due to the expertise of
the Company's executive officers in the telecommunications industry,
5
<PAGE>
the loss of their services could have a material adverse effect on the business
and operations of the Company. See Item 10 of the 1995 Form 10-K incorporated
herein by reference.
5. No Dividends. The Company has never paid any dividends on its
------------
Common Shares and does not anticipate paying any dividends in the foreseeable
future.
6. Priority of Preferred Shares; Potential Substantial Dilution.
------------------------------------------------------------
Holders of the outstanding Series B, Series D and Series E Preferred Shares of
the Company are entitled to priority over holders of Common Shares with regard
to dividends and such shares, together with the Series F Preferred Shares of the
Company, are entitled to priority in the distribution of assets upon any
liquidation (such shares having an aggregate current liquidation preference of
approximately $8,900,000). In addition, since such outstanding Preferred Shares
are convertible into an aggregate of approximately 3,600,000 Common Shares (an
effective average conversion price of approximately $2.50 per share), there may
be a resulting substantial dilution in the equity interest of holders of Common
Shares.
There is also currently outstanding, in addition to the $550,000
principal amount of indebtedness referred to on the cover page hereof,
$1,825,000 in principal amount of indebtedness of the Company which is
convertible into an aggregate of approximately 2,800,000 Common Shares of the
Company (an effective average conversion price of approximately $.65 per share).
Any such conversion would result in a substantial dilution in the equity
interest of the holders of the Common Shares.
Further, there are currently outstanding options and warrants for the
purchase of approximately 3,100,000 Common Shares of the Company (substantially
all of which have exercise prices below the current market value of the
Company's Common Shares). Holders of "in the money" warrants and options are
likely to exercise them when, in all likelihood, the Company could obtain
additional capital on terms more favorable than those provided by the warrants
and options. In addition, any such option and warrant exercises would result in
a dilution in the equity interest of the holders of the Common Shares.
Moreover, while such warrants and options are outstanding, they may adversely
affect the terms on which the Company could obtain equity financing.
7. Limitation on Market-Making Activities. Robb, Peck, a Selling
--------------------------------------
Shareholder, is a registered broker-dealer and market- maker in the Company's
Common Shares. Under certain circumstances, the Securities Exchange Act of
1934, as amended (the "Exchange Act"), precludes such entity from making a
market in the Company's securities for up to nine business days prior to the
sale of its Shares pursuant to this Prospectus and continuing until it has
6
<PAGE>
completed the distribution of its Shares. The cessation of market-making
activities by Robb, Peck during the distribution of the Shares offered by it
hereby may have a material adverse effect on the market, including the price,
for the Company's Common Shares. See "Plan of Distribution".
USE OF PROCEEDS
The Company anticipates that the proceeds from any exercise of the
Warrants (a maximum of $2,870,750) will be used to repay indebtedness and for
working capital purposes.
There are no commitments pursuant to which the Company will receive
any proceeds from the sale of the Shares by the Selling Shareholders.
SELLING SHAREHOLDERS
The following table sets forth, as of May 31, 1996, to the Company's
knowledge, certain securities ownership information with respect to the Selling
Shareholders:
Common Shares to
Common Shares Number of Common be Beneficially
Beneficially Shares Offered Owned After
Name Owned for Sale Offering
---- ------------- ---------------- ---------------
Percent
of
Number Outstanding
------ -----------
Kenneth G. Baritz 275,666(1)(2) 50,000(3) 225,666 1.1%
Ann Diamond 3,000(1) 3,000 -0- -
Lawrence Diamond 7,000(1)(4) 7,000 -0- -
Dominick & Dominick
Incorporated 100,000(5) 100,000(6) -0- -
John F. Doss 20,000(5) 20,000(6) -0- -
John R. Doss 60,000(5) 60,000(6) -0- -
Joseph Getz 12,000(1) 10,000 2,000 *
John Kane 44,000(1)(7) 5,000 39,000 *
Maerki Baumann & Cie 114,404 74,404 40,000 *
Robert Metz 20,000(5) 20,000(6) -0- -
National Operator
Service, Inc. 250,000(8) 200,000 50,000 *
Neue Bank AG 144,643 44,643 100,000 *
Robb, Peck,
McCooey Clearing
Corporation 1,085,000(9) 1,075,000(9) 10,000 *
7
<PAGE>
Bruce Sandys 100,000(1) 25,000 75,000 *
Spring Technology
Corp. 3,079,643(10)(11) 44,643 3,035,000 13.2%
8
<PAGE>
- --------------------------
* Less than 1%.
(1) Includes shares issuable pursuant to subscription to purchase.
(2) Includes 91,666 Common Shares issuable pursuant to currently exercisable
options and warrants.
(3) Resale of shares is subject to the terms of a lockup agreement between Mr.
Baritz and the Company pursuant to which the shares may not be sold
publicly for a period of one year following the date of this Prospectus
(subject to certain exceptions).
(4) Shares are held in a retirement trust.
(5) Represents shares issuable pursuant to currently exercisable warrants.
(6) Resale of shares is subject to the terms of a lockup agreement between the
Selling Shareholder and the Company pursuant to which, for a period of six
months following the date of this Prospectus (subject to certain
exceptions), a limited number of shares may be sold publicly.
(7) Includes 37,500 Common Shares issuable pursuant to options which are
exercisable currently or within 60 days.
(8) Includes 50,000 Common Shares issuable pursuant to currently exercisable
warrants and 100,000 Common Shares issuable, under certain circumstances,
pursuant to a contractual commitment.
(9) Include the 1,075,000 Common Shares issuable upon exercise of the Warrants.
Robb, Peck is required to exercise the Warrants only to the extent it has
agreements for the sale of the underlying Common Shares to its customers,
and subject to certain other conditions. In the event the Warrants are not
exercised promptly following the effectiveness of the Registration
Statement of which this Prospectus forms a part, the ownership of the
Warrants is to revert to the prior owner thereof. See "Plan of
Distribution".
(10) The Company has been advised that the Selling Shareholder holds the Common
Shares as nominee for others.
(11) Includes 632,500 and 152,500 Common Shares issuable pursuant to the
conversion of Series B Preferred Shares and Series F Preferred Shares,
respectively, and 2,250,000 Common Shares issuable pursuant to the
conversion of outstanding indebtedness (excluding accrued interest). The
Company believes that Friedli Corporate Finance AG may have the right to
cause the conversion of such Series B Preferred Shares and indebtedness
into Common Shares.
9
<PAGE>
The securities set forth in the above table are included in this
Prospectus pursuant to registration commitments accorded to the Selling
Shareholders. There are no commitments pursuant to which the Company will
receive any proceeds from the sale of the Shares by the Selling Shareholders.
To the Company's knowledge, no Selling Shareholder has had any position,
office or other material relationship with the Company or any of its affiliates
during the past three years (other than as a holder of the Company's
securities), except that (i) Kenneth G. Baritz has served as a director of the
Company since October 1992 and as its Chairman of the Board since January 1994;
(ii) Lawrence Diamond has served as an employee of the Company or its
subsidiaries since July 1994 (Ann Diamond being the wife of Mr. Diamond); (iii)
Dominick & Dominick Incorporated ("Dominick") provided certain financial
advisory services to the Company (John F. Doss, John R. Doss and Robert Metz
being officers of Dominick); (iv) John Kane has served as AMNEX's Executive Vice
President for Corporate Development since June 1995 and as the Company's
Executive Vice President since February 1996; (v) National Operator Service,
Inc. has been a customer of the Company during such three year period; and (vi)
Robb, Peck has been a market-maker of the Company's Common Shares during such
period.
PLAN OF DISTRIBUTION
The Common Shares set forth in the "Selling Shareholders" table may be
sold either pursuant to the Registration Statement of which this Prospectus
forms a part or, if available, under Section 4(1) of the Securities Act or Rule
144 promulgated thereunder.
The Company is not aware of any underwriting arrangements with respect
to the sale of the Shares by the Selling Shareholders. Such securities may be
offered and sold from time to time by the Selling Shareholders in the over-the-
counter market, or otherwise, at prices and terms then prevailing or at prices
related to the then-current market price, or in negotiated transactions. The
Shares offered hereby by the Selling Shareholders may be sold by one or more of
the following methods, without limitation: (a) a block trade in which a broker
or dealer so engaged will attempt to sell the Shares as agent but may position
and resell a portion of the block as principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this Prospectus; (c) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; and (d)
face-to-face transactions between sellers and purchasers without a broker-
dealer. In effecting sales, brokers or dealers engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate. Such
brokers or dealers may receive commissions or discounts from the Selling
Shareholders in amounts to be negotiated immediately prior to the
10
<PAGE>
sale. Such brokers and dealers and any other participating brokers or dealers
may be deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales.
Robb, Peck, a Selling Shareholder, is a registered broker-dealer and a
market-maker in the Company's Common Shares. Under certain circumstances, Rule
10b-6, promulgated under the Exchange Act, may preclude Robb, Peck from making a
market in any of the Company's securities for up to nine business days prior to
the sale of its Shares pursuant to this Prospectus and continuing until it has
completed the distribution of its Shares. The cessation of market-making
activities by Robb, Peck during the distribution of the Shares offered hereby
may have a material adverse effect on the market, including the price, for the
Company's Common Shares.
Pursuant to an agreement with the Company, Robb, Peck has agreed, under
certain circumstances, to acquire the Warrants from certain holders thereof and
to exercise the Warrants to the extent it has agreements for the sale of the
underlying Common Shares to its customers.
LEGAL MATTERS
Matters relating to the legality of the securities being offered hereby
are being passed upon for the Company by Certilman Balin Adler & Hyman, LLP, 90
Merrick Avenue, East Meadow, New York 11554. Members of the firm of Certilman
Balin Adler & Hyman, LLP are shareholders of the Company.
EXPERTS
The consolidated financial statements of the Company appearing in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995 have
been audited by Ernst & Young, LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed a registration statement on Form S-3 (together
with all amendments thereto, the "Registration Statement") with the Commission
under the Securities Act of 1933, as amended, with respect to the securities
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statement. For further information with respect to
the Company and the securities offered hereby, reference is made to the
Registration Statement and to the exhibits filed therewith,
11
<PAGE>
copies of which may be obtained upon payment of a fee prescribed by the
Commission, or may be examined free of charge at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Each statement made in this Prospectus referring to a
document filed as an exhibit to the Registration Statement is qualified by
reference to the exhibit for a complete statement of its terms and conditions.
12
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses (estimated except for the
Registration Fee) in connection with the offering described in the Registration
Statement:
Registration Fee................................... $ 3,304.87
Accountants' Fees and Expenses..................... 6,000.00
Legal Fees and Expenses............................ 8,000.00
Printing .......................................... 500.00
Miscellaneous...................................... 195.13
---------
Total............................................ $18,000.00
===========
Item 15. Indemnification of Directors and Officers.
Under the laws of the State of New York, the officers and directors of
the Registrant are entitled to indemnification by the Registrant, under certain
circumstances, pursuant to Sections 721-727 of the New York Business Corporation
Law which authorizes the Registrant, generally, to indemnify officers and
directors against both expenses and liabilities in connection with any
proceeding involving any such officer or director, other than in a proceeding by
or in the right of the Registrant to procure a judgment in its favor, if (i)
such officer or director acted in good faith and in a manner he reasonably
believed to be in the best interests of the Registrant; and (ii) with respect to
any criminal proceeding, such officer or director also had no reasonable cause
to believe his conduct was unlawful. In addition, such statute authorizes the
Registrant, generally, to indemnify officers and directors against amounts paid
in settlement and their expenses in connection with any proceeding by or in the
right of the Registrant to procure a judgment in its favor which involved the
officer or director, if such officer or director acted in good faith for a
purpose which he reasonably believed to be in the best interests of the
Registrant.
The Registrant is required to indemnify an officer or director, as set
forth above, if such officer or director has been successful on the merits or
otherwise in the defense of any matter referred to herein. Otherwise,
indemnification of an officer or director, unless ordered by a court, may be
made by the Registrant only as authorized in a specific case upon a
determination that indemnification is proper in the circumstances because the
officer or director met the applicable standard of conduct or because
indemnification is permitted pursuant to Section 721 of the Business Corporation
Law. Such determination shall be made generally (a) by the Board of Directors
of the Registrant, acting
II-1
<PAGE>
by a quorum consisting of directors who were not parties to the proceeding; or
(b) if a quorum is not obtainable or, even if obtainable, a quorum of
disinterested directors so directs (i) by the Board of Directors upon the
written opinion of independent legal counsel that indemnification is proper
under the circumstances, or (ii) by the shareholders.
Article X of the Registrant's By-Laws provides that the Registrant
shall, to the fullest extent permitted by law, indemnify all its officers and
directors.
The Registrant's Certificate of Incorporation contains the provisions
of Section 402(b) of the Business Corporation Law of the State of New York
relating to the elimination of directors' liability for damages for breach of
duty in such capacity.
Item 16. Exhibits.
--------
Exhibit Number Description of Exhibit
- -------------- ----------------------
1 Agreement, dated as of June 6, 1996, by and among Robb, Peck,
McCooey Clearing Corporation, the Registrant and Certilman
Balin Adler & Hyman, LLP
4 Specimen of certificate evidencing Common Shares of the
Registrant1
5 Opinion of Certilman Balin Adler & Hyman, LLP regarding the
legality of the securities being registered
23.1 Consent of Ernst & Young
23.2 Consent of Certilman Balin Adler & Hyman, LLP (included in its
opinion filed as Exhibit 5)
24 Powers of Attorney (included in signature page forming a part
hereof)
Item 17. Undertakings.
------------
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
- --------------------
1Denotes document filed as an exhibit to the Registrant's Registration
Statement on Form S-3 (Registration No. 33-58084) and incorporated herein by
reference.
II-2
<PAGE>
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of the securities offered would not exceed
that which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
however, that paragraphs (l)(i) and (l)(ii) do not apply if the registration
statement is on Form S-3 or Form S-8, and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post- effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, as amended, each filing of the Registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-3
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 6th day of June,
1996.
AMNEX, INC.
By: /s/Peter M. Izzo, Jr.
------------------------
Peter M. Izzo, Jr.
President and
Chief Executive Officer
----------------------
POWER OF ATTORNEY
Know all men by these presents, that each person whose signature appears
below constitutes and appoints Peter M. Izzo, Jr. and Kenneth G. Baritz his true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, and each of them, or his
or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Capacity Date
- --------- -------- ----
President, Chief
Executive Officer and
Director (Principal
/s/Peter M. Izzo Jr. Executive Officer) June 6, 1996
- ----------------------
Peter M. Izzo, Jr.
Chairman of the
Board (Principal
/s/Kenneth G. Baritz Financial Officer) June 6, 1996
- ----------------------
Kenneth G. Baritz
<PAGE>
Vice President - Finance,
Treasurer and Chief
Accounting Officer
(Principal Accounting
/s/Richard L. Stoun Officer) June 6, 1996
- -----------------------
Richard L. Stoun
/s/Russell K. Burbank Director June 7, 1996
- -----------------------
Russell K. Burbank
/s/Michael V. Dettmers Director May 28, 1996
- -----------------------
Michael V. Dettmers
Exhibit 1
AGREEMENT, dated as of June 6, 1996, by and among ROBB, PECK, MCCOOEY
CLEARING CORPORATION (the "Purchaser"), AMNEX, INC. (the "Company") and
CERTILMAN BALIN ADLER & HYMAN, LLP (the "Escrow Agent").
--------------------
WHEREAS, there are currently outstanding warrants (the "Warrants") for
the purchase of an aggregate of One Million Seventy-Five Thousand (1,075,000)
Common Shares of the Company (the "Shares") as set forth on Schedule A attached
hereto.
WHEREAS, the Purchaser desires to purchase the Warrants upon the terms
and conditions set forth herein.
WHEREAS, the holders of the Warrants have delivered, have agreed to
deliver or have indicated an intent to deliver to the Company the original
Warrants as well as executed Warrant Assignment Forms (the "Assignments") to
facilitate the sale contemplated hereby.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Purchase. Subject to the terms and conditions hereof, the
--------
Purchaser is hereby purchasing the Warrants for the prices set forth on Schedule
A (collectively, the "Purchase Price").
2. Escrow. Simultaneously herewith, the Purchaser is delivering to
------
the Escrow Agent, as escrow agent, by wire transfer, cash representing the
Purchase Price for the Warrants (the "Escrowed Cash") and the Company is
delivering to the Escrow Agent those original Warrants and Assignments indicated
on Schedule A as being in its possession (the "Possessed Warrant Documents").
The parties acknowledge and agree that the Escrowed Cash, the Possessed Warrant
Documents and those original Warrants and Assignments hereafter delivered to the
Escrow Agent pursuant to the terms hereof (collectively, the "Escrowed
Documents") shall be held by the Escrow Agent and delivered in accordance with
the terms hereof. The Escrow Agent hereby acknowledges receipt of the Escrowed
Documents (except only to the extent of the Possessed Warrant Documents with
respect to the Warrants and Assignments) and agrees to act in accordance with
the provisions hereof.
3. Escrowed Funds. Pending disbursement of the Escrowed Cash as
--------------
provided herein, the Escrow Agent is expressly authorized, empowered and
directed to deposit the Escrowed Cash in a segregated interest-bearing escrow
account with North Fork Bank
<PAGE>
(the "Bank"). In no event shall the Escrow Agent be liable to the Purchaser, the
Company or any holder of the Warrants with regard to the financial stability of
the Bank. The Escrowed Cash and the interest accrued thereon is hereinafter
referred to collectively as the "Escrowed Funds."
4. Registration Statement.
----------------------
(a) As promptly as reasonably practicable following the execution
of this Agreement, the Company shall file with the Securities and Exchange
Commission (the "Commission") a registration statement under the Securities Act
of 1933, as amended (the "Securities Act"), covering, among other matters, the
issuance of the Shares upon the exercise of the Warrants (the "Registration
Statement").
(b) Promptly following its being advised that the Registration
Statement has been declared effective by the Commission but in any event no
later than one (1) business day following its being so advised, the Company will
so notify the Purchaser and the Escrow Agent by facsimile transmission (the
"Effectiveness Notice"), which notice shall be accompanied by evidence of the
last sale price for the Common Shares of the Company (the "Share Price") on the
day immediately preceding the date of effectiveness of the Registration
Statement. On the day the Company is so advised as to the effectiveness of the
Registration Statement, it will send, or cause to be sent, to the Purchaser ten
(10) copies of the definitive prospectus by overnight mail or courier.
(c) Subject to the provisions of paragraph (d) hereof, the
expenses of the Registration Statement shall be borne by the Company. However,
under no circumstances shall the Company be liable or responsible for the fees
and expenses of the Purchaser, or its counsel, incurred in connection with the
registration.
(d) Notwithstanding the provisions of paragraph (c) hereof, in
the event, pursuant to the provisions of Section 5 hereof (other than paragraph
(d) and (e) thereof), any of the Warrants are redelivered to the Company, the
Purchaser shall pay to the Company an amount equal to its Pro Rata Share (as
hereinafter defined) of all fees and expenses incurred in connection with (i)
the preparation and filing of the Registration Statement, and any and all
amendments and supplements thereto, and (ii) the qualification of the issuance
of the Shares under all state and foreign securities or "Blue Sky" laws
(collectively, "Fees and Expenses"). For purposes hereof, the term "Pro Rata
Share" shall mean the fraction derived by dividing the Redelivered Warrants (as
hereinafter defined) by all of the Warrants. Under no circumstances shall the
Purchaser's liability hereunder be based
<PAGE>
upon Fees and Expenses in excess of twenty thousand dollars ($20,000).
(e) The Company is hereby authorized to deregister the issuance
of any and all Common Shares that relate to Warrants which are redelivered to it
pursuant to the terms of this Agreement.
5. Release From Escrow.
-------------------
(a) Within one (1) day following receipt of the Effectiveness
Notice, the Purchaser shall advise the Company and the Escrow Agent by facsimile
transmission (the "Purchaser Notice") as to the aggregate number of Shares which
its customers have indicated an intent to purchase from the Purchaser in
connection with its exercise of the Warrants and shall provide wire transfer
instructions. Promptly following receipt of the Purchaser Notice, the Company
shall advise the Purchaser and the Escrow Agent by facsimile transmission (the
"Company Notice") as to the particular Warrants set forth on Schedule A that
shall relate to such aggregate number of Shares (the "Subject Warrants") and
shall provide wire transfer instructions. All of the remaining Warrants set
forth on Schedule A shall be referred to hereinafter as the "Redelivered
Warrants."
(b) Subject to the terms hereof, promptly following receipt of
the Purchaser Notice and the Company Notice, the Escrow Agent shall deliver to
(i) the Company, by wire transfer, such portion of the Escrowed Funds that
relate to the Subject Warrants, together with the original Warrants and the
Assignments that relate to the Redelivered Warrants and (ii) the Purchaser, by
wire transfer, such portion of the Escrowed Funds that relate to the Redelivered
Warrants, together with the original Warrants and the Assignments that relate to
the Subject Warrants.
(c) Subject to the terms hereof, in the event the Escrow Agent
shall not have received the Purchaser Notice within five (5) days following
receipt of Effectiveness Notice, the Escrow Agent shall deliver to (i) the
Company, all of the Escrowed Funds and (ii) the Purchaser, all of the original
Warrants and Assignments.
(d) Notwithstanding anything hereinabove to the contrary, in the
event the Escrow Agent shall not have received, within fifteen (15) days of the
date hereof, (i) either (A) the Effectiveness Notice or (B) a notice from the
Purchaser and the Company to the effect that, notwithstanding that the
Registration Statement shall not have been declared effective, the Escrow Agent
should continue to hold the Escrowed Documents for a stated period of time (the
"Extension Notice"), and (ii) either (A) all original Warrants and Assignments
not delivered on the date hereof or (B) a
3
<PAGE>
notice from the Purchaser and the Company to the effect that, notwithstanding
that such Warrants and Assignments have not been so delivered, the Escrow Agent
should continue to hold the Escrowed Documents for the period stated in the
Extension Notice, the Escrow Agent shall deliver to (i) the Company, all of the
original Warrants and Assignments in its possession and (ii) the Purchaser, all
of the Escrowed Funds. In the event the Escrow Agent shall timely receive an
Extension Notice, the provisions hereof shall continue to apply with regard to
the outside date set forth therein.
(e) Notwithstanding anything hereinabove to the contrary, in the
event the Effectiveness Notice is accompanied by evidence that, on the day
immediately preceding the date of effectiveness of the Registration Statement,
the Share Price was less than three dollars forty cents ($3.40) per share or
greater than four dollars ($4.00) per share, the Escrow Agent shall deliver (i)
to the Company, all of the original Warrants and Assignments in its possession
and (ii) to the Purchaser, all of the Escrowed Funds.
(f) Following the deliveries pursuant to this Section 5, the
Purchaser shall be considered to be the owner of any and all Warrants delivered
to it and shall not have any right, title or interest in or to any and all of
the Warrants delivered to the Company.
6. Termination of Agreement. Upon the conclusion of the actions
------------------------
contemplated by Section 5 hereof and the disposition of the Escrowed Documents,
this Agreement shall thereupon terminate and, except as set forth in Section 7
hereof, no party shall have any further obligation hereunder.
7. Exercise of Warrants. Promptly following the delivery of any and
--------------------
all of the Warrants to the Purchaser, the Purchaser shall exercise such Warrants
to the full extent permitted thereby and in accordance with the terms thereof,
and shall be entitled to receive within three (3) days thereof unlegended stock
certificates representing the underlying Shares registered in the name of the
Purchaser, its nominee or its transferee.
8. Terms of Escrow.
---------------
(a) The Escrow Agent shall not be liable for any action taken or
omitted by it, or any action suffered by it to be taken or omitted, in good
faith and in the exercise of its own best judgment, and may rely conclusively
and shall be protected in acting upon any order, notice, demand, certificate,
opinion or advice of counsel (including counsel chosen by the Escrow Agent),
statement, instrument, report or other paper or document (not only as to its due
execution and the validity and effectiveness of its
4
<PAGE>
provisions, but also as to the truth and acceptability of any information
therein contained) which is believed by the Escrow Agent to be genuine and to be
signed or presented by the proper person or persons. The Escrow Agent shall not
be bound by any notice or demand, or any waiver, modification, termination or
rescission of this Agreement unless evidenced by a writing delivered to the
Escrow Agent signed by the proper party or parties and, if the duties or rights
of the Escrow Agent are affected, unless it shall have given its prior written
consent thereto.
(b) The Escrow Agent shall not be responsible for the
sufficiency or accuracy of, the form of, or the execution, validity, value or
genuineness of, any document or property received, held or delivered by it
hereunder, or of any signature or endorsement thereon, or for any lack of
endorsement thereon, or for any description therein, nor shall the Escrow Agent
be responsible or liable in any respect on account of the identity, authority or
rights of the persons executing or delivering or purporting to execute or
deliver any document or property paid or delivered to the Escrow Agent pursuant
to the provisions hereof. The Escrow Agent shall not be liable for any loss
which may be incurred by reason of any investment of any monies or properties
which it holds hereunder.
(c) The Escrow Agent shall have the right to assume, in the
absence of written notice to the contrary from the proper person or persons,
that a fact or an event by reason of which an action would or might be taken by
the Escrow Agent does not exist or has not occurred, without incurring liability
for any action taken or omitted, in good faith and in the exercise of its own
best judgment, in reliance upon such assumption.
(d) The Escrow Agent shall be indemnified and held harmless by
the other parties hereto, jointly and severally, from and against any expenses,
including reasonable counsel fees and disbursements, or loss suffered by the
Escrow Agent in connection with any action, suit or other proceeding, claim or
demand, which in any way, directly or indirectly, arises out of or relates to
this Agreement, the services of the Escrow Agent hereunder, the Escrowed
Documents or other property held by it hereunder or any such expense or loss.
(e) Promptly after the receipt by the Escrow Agent of notice of
any demand or claim or the commencement of any action, suit or proceeding, the
Escrow Agent shall, if such notice shall relate to any other party hereto,
notify such parties thereof in writing; but the failure by the Escrow Agent to
give such notice shall not relieve any party from any liability which such party
may have to the Escrow Agent hereunder. In the event of the receipt of such
notice, the Escrow Agent, in its sole discretion, may commence an action in the
nature of interpleader in an appropriate court to determine ownership or
disposition of the Escrowed Documents or it
5
<PAGE>
may deposit the Escrowed Documents with the clerk of any appropriate court or it
may retain the Escrowed Documents pending receipt of a final, non-appealable
order of a court having jurisdiction over all of the parties hereto directing to
whom and under what circumstances the Escrowed Documents are to be delivered or
it may deliver the Escrowed Documents to the Purchaser and the Company in
accordance with the provisions of Section 5 hereof.
(f) In the event of a dispute between the Purchaser and the
Company, the Escrow Agent shall also be entitled to reimbursement from the
parties hereto for all expenses paid or incurred by it in the administration of
its duties hereunder including, but not limited to, all counsel, advisors' and
agents' fees and disbursements and all taxes or other governmental charges.
(g) From time to time on and after the date hereof, the parties
other than the Escrow Agent shall deliver or cause to be delivered to the Escrow
Agent such further documents and instruments and shall do or cause to be done
such further acts as the Escrow Agent shall reasonably request (it being
understood that the Escrow Agent shall have no obligation to make any such
request) to carry out more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to assure itself that it is
protected in acting hereunder.
(h) The Escrow Agent may resign at any time and be discharged
from its duties as the Escrow Agent hereunder by its giving the other parties
hereto at least thirty (30) days prior notice thereof in accordance with the
terms hereof. As soon as practicable after its resignation, the Escrow Agent
shall turn over to a successor Escrow Agent appointed by the other parties
hereto, jointly, the Escrowed Funds held hereunder upon presentation of the
document appointing the new Escrow Agent and its acceptance thereof. If no new
agent is so appointed within the sixty (60) day period following the giving of
such notice of resignation, the Escrow Agent may deposit the Escrowed Documents
with any court it deems appropriate.
(i) The Escrow Agent shall resign and be discharged from its
duties as the Escrow Agent hereunder if so requested in writing at any time by
the other parties hereto, jointly; provided, however, that such resignation
shall become effective only upon acceptance of appointment by a successor Escrow
Agent as provided in Section 8(h) hereof.
(j) Following resignation and/or discharge of the Escrow Agent,
the provisions of this Section 8 shall nonetheless continue to be applicable
with respect to the Escrow Agent.
6
<PAGE>
9. Miscellaneous.
-------------
(a) This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes any and all
prior and contemporaneous agreements, understandings and commitments with
respect thereto or in connection therewith. Except as may be specifically
provided herein, no change, modification, amendment, addition or termination of
this Agreement or any part thereof shall be valid unless in writing and signed
by or on behalf of the party to be charged therewith.
(b) Except as otherwise provided herein, any and all notices or
other communications or deliveries required or permitted to be given or made
pursuant to any of the provisions of this Agreement shall be deemed to have been
duly given or made for all purposes when hand delivered or sent by certified or
registered mail, return receipt requested and postage prepaid, overnight mail or
courier, or telecopier as follows:
If to the Purchaser, at:
Robb, Peck, McCooey Clearing Corporation
20 Broad Street
6th Floor
New York, New York 10005
Telecopier: (212) 509-8387
with a copy to:
Victor J. Digioia, Esq.
Goldstein Axelrod & Digioia
369 Lexington Avenue
New York, New York 10017
Telecopier: (212) 557-0295
If to the Company at:
101 Park Avenue
Suite 2507
New York, New York 10178
Attention: Chairman of the Board
Telecopier Number: (212) 867-0092
with a copy to:
Certilman Balin Adler & Hyman, LLP
90 Merrick Avenue
East Meadow, New York 11554
Attention: Fred Skolnik, Esq.
Telecopier Number: (516) 296-7111
If to the Escrow Agent, at:
Certilman Balin Adler & Hyman, LLP
90 Merrick Avenue
7
<PAGE>
East Meadow, New York 11554
Attention: Fred Skolnik, Esq.
Telecopier Number: (516) 296-7111
or at such other address as any party or person shall designate by notice to the
other parties in accordance with the provisions hereof.
(c) This Agreement shall be governed by, and interpreted and
construed in accordance with, the laws of the State of New York, excluding
choice of law principles thereof.
(d) A waiver of the breach of any term or condition of this
Agreement shall not be deemed to constitute a waiver of any other breach of the
same or any other condition.
(e) This Agreement shall be binding upon and inure to the
benefit of the parties and their respective legal representatives, successors
and permitted assigns; provided, however, that no party may assign this
Agreement without the prior written consent of the other parties.
(f) The headings or captions in this Agreement are for
convenience and reference only and do not in any way modify, interpret or
construe the intent of the parties or affect any of the provisions of this
Agreement.
(g) The provisions of this Agreement shall apply only to the
extent consistent with the requirements of applicable law. In the event any
clause, section or part of this Agreement shall be held or declared to be void,
illegal or invalid for any reason, such provision(s) shall be deemed not to be a
part of this Agreement and all other clauses, sections or parts of this
Agreement which can be effected without such void, illegal or invalid clause,
section or part shall nevertheless continue in full force and effect.
8
<PAGE>
WITNESS the execution of this Agreement as of the date first above
written.
ROBB, PECK, MCCOOEY CLEARING
CORPORATION
By: /s/
----------------------------
AMNEX, INC.
By: /s/
----------------------------
CERTILMAN BALIN ADLER & HYMAN, LLP
By: /s/
----------------------------
9
<PAGE>
Schedule A
NUMBER OF PURCHASE
COMMON SHARES EXERCISE PRICE PER AGGREGATE
SUBJECT TO PRICE EXPIRATION UNDERLYING PURCHASE
WARRANT PER SHARE DATE SHARE PRICE
16,667 $2.125 12/31/98 $1.375 $ 22,917
16,667 2.125 02/28/99 1.375 22,917
16,666 2.125 04/30/99 1.375 22,916
50,000 2.125 06/30/99 1.375 68,750
100,000 2.56 05/31/99 .94 94,000
50,000 2.62 07/31/99 .88 44,000
175,000 2.73 11/27/00 .77 134,750
50,000* 2.75 11/15/98 .75 37,500
300,000 2.75 11/24/98 .75 225,000
150,000* 2.75 12/15/98 .75 112,500
50,000 2.75 08/18/99 .75 37,500
100,000 2.81 03/31/99 .69 69,000
--------- --------
1,075,000 $891,750
========= ========
____________________
* Original Warrants and Assignments are in the possession of the Company on the
date hereof.
Exhibit 5
June 7, 1996
AMNEX, Inc.
101 Park Avenue
New York, New York 10178
Re: Registration Statement on Form S-3
----------------------------------
Gentlemen:
In our capacity as counsel to AMNEX, Inc., a New York corporation (the
"Company"), we have been asked to render this opinion in connection with the
Company's Registration Statement on Form S-3 (the "Registration Statement")
being filed contemporaneously by the Company with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, covering (i) 1,075,000
Common Shares, $.001 par value, of the Company (the "Issuable Shares") which are
issuable by the Company to Robb, Peck, McCooey Clearing Corporation ("Robb,
Peck") upon the exercise of certain outstanding warrants (the "Warrants") and
are being registered for issuance by the Company as well as for resale by Robb,
Peck; and (ii) 663,690 Common Shares, $.001 par value, of the Company (the
"Selling Shareholder Shares") which are being registered for resale by certain
selling shareholders as follows: (a) 75,000 Common Shares which are issuable to
certain persons pursuant to subscription arrangements with the Company; (b)
200,000 Common Shares which were issued or are issuable pursuant to contractual
arrangements (the "Contract Shares"); (c) 25,000 Common Shares issuable to
Kenneth G. Baritz, Chairman of the Board of the Company, upon the exercise of an
outstanding warrant; (d) 163,690 Common Shares issuable to certain entities upon
the conversion of certain outstanding indebtedness; and (e) 200,000 Common
Shares issuable upon the exercise of outstanding warrants. The Issuable Shares
and the Selling Shareholder Shares are collectively referred to herein as the
"Shares".
In connection with our opinion, we have examined the Certificate of
Incorporation and By-Laws of the Company, each as amended, the Registration
Statement, and certain agreements entered into, and instruments and warrants
issued, by the Company in connection with the issuance of the Shares. We are
also familiar with proceedings of the Board of Directors of the Company, or
otherwise have relied upon representations made by officers of the Company,
relating to the authorization of the issuance of the Shares. We have also
examined such other instruments and documents as we deemed relevant under the
circumstances.
<PAGE>
AMNEX, Inc.
June 7, 1996
Page 2
For purposes of the opinions expressed below, we have assumed (i) the
authenticity of all documents submitted to us as originals, (ii) the conformity
to the originals of all documents submitted as certified, photostatic or
facsimile copies and the authenticity of the originals, (iii) the legal capacity
of natural persons, (iv) the due authorization, execution and delivery of all
documents by all parties and the validity and binding effect thereof and (v) the
conformity to the proceedings of the Board of Directors of all minutes of such
proceedings and all representations, oral and written, made by officers of the
Company with respect thereto. We have also assumed that the corporate records
furnished to us by the Company include all corporate proceedings taken by the
Company to date.
Based upon and subject to the foregoing, including the assumptions made,
we are of the opinion that the Contract Shares that are outstanding have been
duly and validly authorized and issued, and are fully paid and nonassessable
Common Shares, $.001 par value, of the Company, subject to the provisions of
Section 630 of the Business Corporation Law of the State of New York (the
"BCL"); and (ii) the remaining Shares will be, upon issuance in accordance with
the terms of the respective instruments, duly and validly authorized and issued,
fully paid and nonassessable Common Shares, $.001 par value of the Company,
subject to the provisions of Section 630 of the BCL.
We hereby consent to the use of our opinion as herein set forth as an
exhibit to the Registration Statement and to the use of our name under the
caption "Legal Matters" in the Prospectus forming a part of the Registration
Statement.
This opinion is as of the date hereof, and we do not undertake, and
hereby disclaim, any obligation to advise you of any changes in any of the
matters set forth herein.
We are rendering this opinion only as to the matters expressly set forth
herein, and no opinion should be inferred as to any other matters.
This opinion is for your exclusive use only and is to be utilized and
relied upon only in connection with the matters expressly set forth herein.
Your attention is directed to the fact that members of this firm are
shareholders of the Company.
Very truly yours,
CERTILMAN BALIN ADLER & HYMAN, LLP
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of AMNEX, Inc. for the
registration of 1,738,690 shares of its common stock and to the incorporation by
reference therein of our report dated March 14, 1996 with respect to the
consolidated financial statements and schedule of AMNEX, Inc. included in its
Annual Report (Form 10-K) for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
June 6, 1996
