THIS OPTION AGREEMENT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED UNLESS SO REGISTERED OR AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT IS AVAILABLE.
OPTION AGREEMENT
This OPTION AGREEMENT ("Agreement") is made as of the 27th day of
December, 1996 by and between Shared Technologies Xxxxxxxxx Inc., a Delaware
corporation with a principal place of business at 000 Xxxxx Xxxxxx Xxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxx 00000 (the "Company") and RHI Holdings, Inc., a
Delaware corporation with a principal place of business at 000 Xxxx 00xx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Optionee"). Capitalized terms used herein
and not defined herein shall have the meanings ascribed to them in the Purchase
Agreement by and between Optionee and the Issuer of even date herewith (the
"Purchase Agreement").
WHEREAS, the Company is the owner of Two Hundred Fifty Thousand
(250,000) shares of Series B Convertible Preferred Stock (the "Series B
Preferred"), $.01 par value per share of Shared Technologies Cellular, Inc., a
Delaware corporation (the "Issuer"), and a certain warrant (the "Warrant")
registered in the name of the Company representing the right to purchase shares
of common stock ("Common Stock"), $.01 par value per share of the Issuer, and
all capital stock, rights and privileges appurtenant thereto and associated
therewith, (such shares of Series B Preferred, such Warrant and such capital
stock, rights and privileges, collectively, the "Securities"), including,
without limitation, the rights set forth in a certain Stock Purchase Agreement
dated as of August 19, 1996 between the Issuer and the Company (the "Stock
Purchase Agreement") and a certain Equity Holders Agreement dated as of August
19, 1996 among International Capital Partners, Inc. and its affiliates, Xxxxxxx
Capital Group LLC and the Company (the "Equity Holders Agreement"); and
WHEREAS, the Company desires to grant Optionee an option to purchase
the Securities and Optionee desires an option to purchase the Securities, upon
the terms and conditions herein stated.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Grant of Option. The Company hereby grants to Optionee an option
(the "Option") to purchase all, but not less than all, of the Securities upon
the terms and conditions hereinafter set forth.
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2. Payment for the Option. Simultaneously with the execution hereof,
Optionee shall pay to the Company Five Thousand Dollars ($5,000.00) (the "Option
Price") by certified or bank cashier's check or other immediately available
funds for the purchase of the Option.
3. Effective Date. This Option shall become effective upon the Initial
Closing.
4. Termination Date. This Option shall terminate and be of no further
force or effect 156 days after the date of the Initial Closing if Optionee has
failed to purchase 666,667 or more Units pursuant to the Purchase Agreement on
or prior to such date (the "Termination Date").
5. Repurchase of Option. If the Issuer exercises its Repurchase Option
pursuant to Section 2 of the Purchase Agreement, the Company shall repurchase
the Option from Optionee by paying to Optionee the Option Price by certified or
bank cashier's check or other immediately available funds.
6. Purchase Price. The purchase price of the Securities shall be Two
Million Four Hundred Ninety-Five Thousand Dollars ($2,495,000.00) (the "Purchase
Price") and shall be payable in the form of a Promissory Note substantially in
the form of Exhibit A attached hereto and made a part hereof (the "Note"). The
Note shall be secured by a Pledge Agreement substantially in the form of Exhibit
B attached hereto and made a part hereof (the "Pledge Agreement").
7. Exercise Procedure. Subject to the conditions set forth in this
Option Agreement, this Option shall be exercised by Optionee's delivery of
written notice of exercise to the Company at its address set forth above. Such
exercise shall be effective upon receipt by the Company of an executed original
copy of the Note and the Pledge Agreement. (The effective date of exercise, if
at all, is referred to herein as the "Exercise Date"). The Optionee may not
purchase less than all of the Securities.
8. Delivery of Shares. (a) Upon payment of the Purchase Price, the
Company shall deliver to Optionee :
(i) the shares of Series B Preferred, duly endorsed in blank or
accompanied by duly executed stock transfer powers with all requisite
stock transfer stamps attached; and
(ii) the Warrant, accompanied by a duly executed Warrant
assignment.
(b) Effective upon payment of the Purchase Price, the Company hereby
sells, assigns and transfers unto Optionee, and Optionee hereby purchases,
acquires and accepts all right, title, and interest of the Company in, to and
under the Stock Purchase Agreement and the Equity Holders Agreement.
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(c) The Company and Optionee shall execute such other instruments and
take such other action as are reasonably requested by the other or the Issuer to
effect the transfers of the Securities.
9. Representations and Warranties of the Company. The Company hereby
represents and warrants to Optionee as of the date hereof and as of the Exercise
Date, that:
(a) The Company is the sole, legal and beneficial owner and holder of
the Securities, and all such shares of Securities are owned free and clear of
all liens, encumbrances, charges, restrictions and assessments of every nature.
The Company has full power and authority to sell, assign and transfer the
Securities in accordance with the terms hereof.
(b) The Company has full right, power, authority and capacity to sell,
assign, transfer and deliver the Securities pursuant to this Assignment. Upon
payment of the Purchase Price and delivery of the Securities to Optionee,
Optionee will have good, valid and marketable title to the Securities, free and
clear of all liens, encumbrances, charges, restrictions and assessments of every
nature, except as provided in the Pledge Agreement.
(c) The execution, delivery and performance by the Company of this
Agreement has been duly authorized by all requisite corporate action. This
Agreement has been duly executed and delivered on behalf of the Company and
constitutes the valid and binding obligations of the Company, enforceable in
accordance with its terms, except that enforceability hereof may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by principles of equity regarding the
availability of remedies.
10. Representations and Warranties of Optionee. Optionee represents
and warrants on the date hereof and at the Exercise Date that:
(a) The execution, delivery and performance by Optionee of this
Agreement has been, and the Note and the Pledge Agreement will be, duly
authorized by all requisite corporate action. This Agreement has been, and the
Note and the Pledge Agreement will be, duly executed and delivered on behalf of
Optionee and constitute the valid and binding obligations of Optionee,
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the rights and remedies of creditors generally and to the exercise of
judicial discretion in accordance with general principles of equity.
(b) Optionee acknowledges that all documents, records and books
pertaining to this investment have been made available for inspection by it, its
attorney and/or its accountant and the books and records of the Company will be
available upon reasonable notice, for inspection by Optionee during reasonable
business hours at the Company's
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principal place of business. Optionee and/or its advisor(s) have had a
reasonable opportunity to ask questions of and receive answers from the Company
or a person or persons acting on its behalf, concerning the terms and
conditions of the offering of the Option and the Securities. All such questions
have been answered to the full satisfaction of Optionee. No representations
(whether written or oral) have been furnished to Optionee or its advisor(s) in
connection with the offering of the Option or the Securities which were in any
way inconsistent with the information referenced above. Optionee is acquiring
the Option and the Securities without being furnished any offering literature
or prospectus other than the documents referred to herein.
(c) Optionee (i) has adequate means of providing for its current needs
and possible personal contingencies, (ii) has no need for liquidity in this
investment, (iii) is able to bear the substantial economic risks of an
investment in the Option and the Securities for an indefinite period, (iv) can
afford a complete loss of such investment, and (v) does not have an overall
commitment to investments which are not readily marketable, that are
disproportionate to Optionee's net worth, and Optionee's investment in the
Option and the Securities will not cause such overall commitment to become
excessive.
(d) Optionee recognizes that the purchase of the Option and the
Securities involves significant risks and is not recommended for investors who
have any need for a current return on their investment or who cannot bear the
risk of losing their entire investment.
(e) Optionee understands that the sale of the Option or the Securities
have not been registered under the Securities Act of 1933, as amended (the
"Act"), in reliance upon an exemption therefrom. Optionee understands that the
Option and the Securities must be held indefinitely unless the sale or other
transfer thereof is subsequently registered under the Act or an exemption from
such registration is available.
(f) The Option and the Securities are being purchased solely for
Optionee's own account for investment purposes only and not for the account of
any other person and not for distribution, assignment or resale to others, and
no other person has a direct or indirect beneficial interest in the Option or
the Securities.
(g) Optionee will not transfer the Option or the Securities without
registering them under applicable federal or state securities laws unless the
transfer is exempt from registration under such laws. Optionee realizes that the
Company may not allow a transfer of the Option or the Securities unless the
transferee meets the suitability standards as an initial purchaser of the Option
or the Securities. Optionee understands that legends will be placed on
certificates representing the Securities, with respect to the above restrictions
on resale or other disposition of the Securities and that stop transfer
instructions have or will be placed with respect to the Option and the
Securities so as to restrict the assignment, resale or other disposition
thereof.
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11. Non Transferability of Option. The Option is personal and no
rights granted hereunder may be transferred, assigned, pledged or hypothecated
in any way (whether by operation of law or otherwise) nor shall any such rights
be subject to execution, attachment or similar process; provided, however, that
the Option may be transferred to The Xxxxxxxxx Corporation, a New York
corporation ("TFC"), or any of its affiliates (as such term is defined in the
Act). Upon any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of the Option or of such rights contrary to the provisions hereof, or
upon the levy of any attachment or similar process upon the Option or such
rights, the Option and such rights shall, at the election of the Company, shall
terminate and be of no further force or effect.
12. Miscellaneous.
(a) This Agreement shall be binding upon and inure to the benefit of
the successors and assigns of the parties hereto; provided, however that the
Option may be sold or otherwise transferred only to TFC or its affiliates
without any restriction whatsoever (other than applicable Federal and state
securities laws). Upon any such transfer, the transferee of the Option shall
have the benefits of this Agreement.
(b) Except as provided herein, this Agreement may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and
Optionee.
(c) Any notice required or desired to be served, given or delivered
hereunder shall be in writing, and shall be deemed to have been validly served,
given or delivered upon the earlier of (a) personal delivery to the address set
forth below, (b) in the case of mailed notice, three (3) days after deposit in
the United States mails, with proper postage for certified mail, return receipt
requested, postage prepaid, (c) in the case of telex, facsimile or other
telecommunications transmission, upon receipt, or (d) in the case of notice by
Federal Express or other reputable overnight courier service, one (1) business
day after delivery to such courier service, addressed to the party to be
notified as follows: (i) if to Optionee, at the address set forth above,
Attention: Xxxxxxx X. Xxxxxxx (Telecopy: (000) 000-0000), with a copy to Xxxxxx
X. Xxxxxx, Esq., The Xxxxxxxxx Corporation, 000 Xxxx Xxxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxx 00000 (Telecopy: (000) 000-0000) and (ii) if to the Company, at the
address set forth above, Attention: Legal Department (Telecopy: (000) 000-0000),
or at such other address as the party to whom such notice is directed may have
designated by notice to the other party hereto.
(d) This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut, without regard to its principles of
conflicts of laws.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed under their respective corporate seals as of the day and year first
above written.
SHARED TECHNOLOGIES FAIRCHILD INC.
By: /s/ Xxxxxxx XxXxxxxxxx
-------------------------------
Xxxxxxx XxXxxxxxxx
Chief Financial Officer
RHI HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President and
Chief Financial Officer
ACKNOWLEDGED AND AGREED TO:
SHARED TECHNOLOGIES CELLULAR, INC.
By: /s/ Xxxxxxx XxXxxxxxxx
-----------------------------
Xxxxxxx XxXxxxxxxx
Chief Financial Officer
Date: December 27, 1996
