EXHIBIT 1
SUPPLEMENTAL WARRANT AGREEMENT
This SUPPLEMENTAL WARRANT AGREEMENT is effective as of
December 23, 1997 by and among ELCOTEL, INC. ("Elcotel"); TECHNOLOGY SERVICE
GROUP, INC. ("TSG"); LIBERTY BANK AND TRUST COMPANY OF OKLAHOMA CITY,
N.A. ("Liberty"); and AMERICAN STOCK TRANSFER AND TRUST COMPANY
("American").
WHEREAS, TSG and Liberty entered into a Warrant Agreement, dated as
of May 10, 1996 (the "Warrant Agreement") pursuant to which Liberty has acted
as Warrant Agent in connection with the issuance of 1,150,000 warrants to
purchase common stock of TSG (the "Warrants") pursuant to the Warrant Agreement;
WHEREAS, Elcotel, TSG and Elcotel Hospitality Services, Inc. ("EHS")
entered into an Agreement and Plan of Merger, dated August 13, 1997, as amended
(the "Merger Agreement") pursuant to which EHS, a wholly-owned subsidiary of
Elcotel, merged with and into TSG and TSG became a wholly-owned subsidiary of
Elcotel effective on December 18, 1997 (the "Merger"), and pursuant thereto
each share of common stock of TSG ("TSG Common Stock") issued and outstanding
immediately prior to the consummation of the Merger was converted into the
right to receive 1.05 shares of common stock of Elcotel ("Elcotel Common Stock);
WHEREAS, pursuant to the Merger Agreement, each Warrant outstanding
immediately prior to the effective time of the Merger was adjusted as of the
effective time of the Merger so as to constitute a warrant to acquire, on
substantially the same terms and conditions as were applicable to such Warrant
under the Warrant Agreement, 1.05 shares of Elcotel Common Stock for each
share of TSG Common Stock for which such Warrant could have been exercised
immediately prior to the effective time of the Merger;
WHEREAS, Liberty desires to resign as Transfer Agent and Warrant
Agent, and American, as a stock transfer company doing business in New York,
New York, desires to succeed Liberty as Transfer Agent and Warrant Agent
under the Warrant Agreement.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Liberty hereby resigns its duties pursuant to the Warrant
Agreement effective as of the date set forth above and Liberty shall be
discharged from all further rights, duties and liabilities under the Warrant
Agreement (except liabilities arising as a result of its gross negligence or
willful misconduct under the Warrant Agreement). TSG and Elcotel hereby
appoint American as the new Warrant Agent and Transfer Agent under the
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Warrant Agreement effective as of the date set forth above and American
accepts such appointment and hereby assumes all rights and duties of the
Transfer Agent and Warrant Agent under the Warrant Agreement. American shall
be vested with the same powers, rights, duties and responsibilities as if it
had been originally named in the Warrant Agreement as the Transfer Agent and
Warrant Agent, without any further assurance, conveyance, act or deed.
2. If for any reason it shall be necessary or expedient to execute
and deliver any further assurance, conveyance, act or deed, upon TSG's request,
the same shall be done at the expense of TSG and Liberty shall legally and
validly execute and deliver the same.
3. The following addresses set forth in paragraph 12 of the Warrant
Agreement to which notices shall be sent is modified so that notices to the
Company shall be sent to Technology Service Group, Inc., 0000 Xxxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxx 00000, Attention: President and to the Warrant Agent at its
Corporate Office at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
4. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together
constitute but one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Supplemental Warrant Agreement as of the date first above written.
TECHNOLOGY SERVICE GROUP, INC. ELCOTEL, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxx
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Xxxxxxx X. Xxxxxxxx, Vice President Xxxxxx X. Xxxx, President
LIBERTY BANK AND TRUST COMPANY OF OKLAHOMA CITY, N.A.
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title:
AMERICAN STOCK TRANSFER AND TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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