Exhibit 10.5
UNISTAR GAMING CORP.
STANDBY AGREEMENT
________ ____, 1998
Unistar Buying Group, LLC
_________________________
_________________________
Dear Sirs:
Unistar Gaming Corp., a Delaware corporation (the "Company"),
proposes to offer (the "Offering") to the holders of common stock of EXECUTONE
Information Systems, Inc. ("Executone"), rights (the "Rights") to purchase up to
_________ shares of common stock, $.01 par value per share (the "Common Stock"),
of the Company. Each Right (i) will entitle the holder to purchase one share of
Common Stock at a subscription price of [$0.05] per share (the "Subscription
Price") and (ii) will be exercisable through _________, 1998 (the "Expiration
Date").
The Company desires to make arrangements pursuant to which the
shares (the "Standby Shares") of Common Stock underlying Rights that are not
exercised by the close of business on the Expiration Date will be purchased from
the Company by Unistar Buying Group, LLC (the "Purchaser").
1. Sale and Purchase of the Standby Shares. The Company will sell to
the Purchaser, and the Purchaser will purchase from the Company, the Standby
Shares at a per share price equal to the Subscription Price.
2. Payment and Delivery. On the seventh business day after the
Expiration Date (the "Delivery Date"), the Purchaser will deliver to the Company
Federal (same-day) funds representing the purchase price payable under Section 1
for all of the Standby Shares.
The Company will deliver to the Purchaser a certificate in
definitive form, registered in the name of the Purchaser representing the
Standby Shares.
All deliveries of funds and stock certificates will take place at
____________.
3. Open Market Transactions.
(a) Until the close of business on the third business day next
preceding the Expiration Date, the Purchaser may (but will not be obligated to)
purchase the Rights in the open market in such amounts and at such prices as the
Purchaser deems advisable. All Rights so purchased will be converted into Common
Stock pursuant to the terms of the Offering.
(b) The Purchaser will surrender for conversion into Common Stock
any Rights beneficially owned by it prior to the Expiration Date.
4. Registration Statement and Prospectus; Public Offering. The Company
has filed with the Securities and Exchange Commission (the "Commission"),
pursuant to the Securities Act of 1933, as amended (the "Act"), and the rules
and regulations adopted by the Commission thereunder (the "Rules"), a
registration statement on Form S-1, including a form of final prospectus,
relating to the Rights and the shares of Common Stock issuable on conversion of
the Rights. The Commission has declared the registration statement effective.
The Company proposes to file with the Commission pursuant to Rule 424(b) a final
prospectus, dated the date of this Agreement, in the form previously furnished
to the Purchaser. Such registration statement, including exhibits, when it
became effective (the "Effective Date"), is called the "Registration Statement,"
and the prospectus, as first filed with the Commission pursuant to Rule 424(b),
is called the "Prospectus." The terms "amend," "amendment" or "supplement" with
respect to the Registration Statement or the Prospectus include the filing of
any document under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), after the Effective Date or the date of the Prospectus and
incorporated by reference.
5. Representations of the Company. The Company represents to the
Purchaser as follows:
(a) On the Effective Date and when the Prospectus is first filed
with the Commission pursuant to Rule 424(b), when any post-effective amendment
to the Registration Statement becomes effective, when any supplement to the
Prospectus is filed with the Commission and on the Delivery Date, the
Registration Statement, the Prospectus and any such amendment or supplement will
comply in all material respects with the requirements of the Act and the Rules,
and no part of the Registration Statement, the Prospectus or any such amendment
or supplement will contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, except that this representation does not
apply to statements or omissions made in reliance on and in conformity with
written information furnished in writing to the Company by the Purchaser
specifically for inclusion in the Registration Statement, Prospectus, amendment
or supplement.
(b) The Offering and the exercise of the Rights prior to the
Expiration Date have been duly authorized by the Company. The right to convert
the Rights into Common Stock expires on the close of business on the Expiration
Date.
6. Agreements of the Company.
(a) The Company will promptly file the Prospectus with the
Commission under Rule 424(b).
(b) As soon as the Company is so advised, the Company will advise
the Purchaser of (1) the initiation or threatening by the Commission of any
proceedings for the issuance of any order suspending the effectiveness of the
Registration Statement and (2) receipt by the Company or any representative or
attorney of the Company of any other communication from the Commission relating
to the Company, the Registration Statement or the Prospectus. The Company will
make every reasonable effort to prevent the issuance of an order suspending the
effectiveness of the Registration Statement and, if any such order is issued, to
obtain as soon as possible its lifting.
(c) The Company will pay, or reimburse if paid by the Purchaser,
whether or not the transactions contemplated by this Agreement are consummated
or this Agreement is terminated, all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, including
those relating to (1) the preparation, printing and filing of the Registration
Statement and exhibits thereto, the Prospectus and all amendments and
supplements to the Registration Statement and the Prospectus, (2) the issuance
of the Standby Shares and the preparation and delivery of certificates
evidencing the Standby Shares, (3) the furnishing to the Purchaser of copies of
the Prospectus and all amendments or supplements to the Prospectus, including
costs of shipping and mailing, (4) all transfer taxes, if any, with respect to
the sale and delivery of the Standby Shares by the Company to the Purchaser, (5)
any listing of the Standby Shares on the __________ and (6) ____________, the
Right Agent.
7. Conditions of the Purchaser's Obligations. The obligation of the
Purchaser to purchase the Standby Shares is subject to the accuracy, on the date
of this Agreement and on the Delivery Date, of the representations of the
Company in this Agreement, to performance by the Company of its obligations
under this Agreement and to each of the following additional conditions:
(a) The Registration Statement must have become effective.
(b) No order suspending the effectiveness of the Registration
Statement may be in effect and no proceedings for such purpose may be pending
before or threatened by the Commission, and any requests for additional
information on the part of the Commission (to be included in the Registration
Statement or the Prospectus or otherwise) must have been complied with to the
reasonable satisfaction of the Purchaser.
(c) The Company, Executone and certain affiliates of the Purchaser
shall have entered into a Share Exchange Agreement, dated as of even date
herewith (the "Share Exchange Agreement"), all representations and warranties of
the Company and Executone contained in the Share Exchange Agreement shall be
true and correct in all material respects as of the date hereof and Executone
and Unistar shall have performed all obligations and complied with all
agreements, undertakings, covenants and conditions required under the Share
Exchange Agreement as of the date hereof.
(d) The Company and Executone shall have entered into the
Reorganization Agreement, as of even date herewith (the "Reorganization
Agreement"), and the Company and Executone shall have performed all obligations
and complied with all agreements, undertakings, covenants and conditions
required under the Reorganization Agreement as of the date hereof.
8. Conditions of Unistar's Obligations. The obligation of Unistar to
sell the Standby Shares is subject to performance by the Purchaser of its
obligations under this Agreement and to each of the following conditions:
(a) the Company, Executone and certain affiliates of the Purchaser
shall have entered into the Share Exchange Agreement, all representations and
warranties of the Shareholders (as defined in the Share Exchange Agreement)
shall be true and correct in all material respects as of the date hereof and the
Shareholders shall have performed all obligations and complied with all
agreements, undertakings, covenants and conditions required under the Share
Exchange Agreement as of the date hereof.
(b) The Company and Executone shall have entered into the
Reorganization Agreement and the Company and Executone shall have performed all
obligations and complied with all agreements, undertakings, covenants and
conditions required under the Reorganization Agreement as of the date hereof.
9. Termination.
(a) This Agreement may be terminated by the Purchaser by notifying
the Company as specified herein at any time at or before the Delivery Date, if
any of the conditions specified in Section 7 have not been fulfilled when and as
required by this Agreement.
(b) This Agreement may be terminated by the Company by notifying
the Purchaser as specified herein at any time at or before the Delivery Date, if
any of the conditions specified in Section 8 have not been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its provisions
except as otherwise provided, the Company will not be under any liability to the
Purchaser and the Purchaser will not be under any liability to the Company,
except that the Purchaser, if it has failed or refused to purchase the Standby
Shares agreed to be purchased by it under this Agreement, without some reason
sufficient to justify cancellation or termination of its obligations pursuant to
this Agreement, will not be relieved of liability to the Company for damages
occasioned by its default.
10. Miscellaneous.
This Agreement is for the benefit of the Purchaser and the Company
and their respective successors and assigns, and, to the extent expressed in
this Agreement, for the benefit of persons controlling the Purchaser or the
Company, and directors and officers of the Company and their respective
successors and assigns, and no other person, partnership, association or
corporation shall acquire or have any right under or by virtue of this
Agreement.
All notices and communications under this Agreement will be in
writing, effective only on receipt and mailed or delivered, by messenger,
facsimile transmission or otherwise, to the Purchaser, _______________, at
______________, and to the Company, ______________, at _________________.
This Agreement may be signed in multiple counterparts that taken as
a whole constitute one agreement.
This Agreement will be governed by and construed in accordance with
the laws of the State of __________________.
Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
UNISTAR GAMING CORP.
By ______________________________
Name: ______________________________
Title:______________________________
Confirmed:
UNISTAR BUYING GROUP, LLC
By ______________________________
Name: ______________________________
Title:______________________________
