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THIS WARRANT AND THE SECURITIES THAT MAY BE ACQUIRED UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "FEDERAL ACT"), OR UNDER THE PROVISIONS OF ANY APPLICABLE STATE SECURITIES
LAWS. NEITHER THIS WARRANT NOR THE SECURITIES THAT MAY BE ACQUIRED UPON THE
EXERCISE OF THIS WARRANT MAY BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER PROVISIONS OF THE FEDERAL ACT AND ALL APPLICABLE STATE
SECURITIES LAWS, AND IN THE CASE OF ANY EXEMPTION, ONLY IF THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
TRANSACTION DOES NOT REQUIRE REGISTRATION OF THE WARRANT OR SUCH OTHER
SECURITIES.
SHARED TECHNOLOGIES CELLULAR, INC.
COMMON STOCK WARRANT
SHARED TECHNOLOGIES CELLULAR, INC., a Delaware corporation (the
"Company"), hereby certifies that, for good and valuable consideration,
including but not limited to that certain loan relationship between State Street
Bank and Trust Company and the Company ("SSBT") the receipt and sufficiency of
which are hereby acknowledged, SSB INVESTMENTS, INC. ("SSBI") or permitted
assigns (SSBI or such permitted assigns at the time being the registered holder
or holders hereof being hereinafter referred to as "Holder") is entitled,
subject to the terms set forth below, to acquire from the Company, at no charge
or cost to the Holder, at any time or from time to time on or after the date
hereof and prior to 5:00 P.M., Boston time, on the Expiration Date, that number
of aggregate fully paid and non assessable shares of Common Stock of the Company
equal to the Net Number in effect from time to time as calculated in accordance
with the terms of SECTION 1.2 hereof.
The Net Number is based in part on the Base Number of Shares, which is
to be adjusted pursuant to the terms of this Common Stock Warrant. On the date
hereof, and subject to such adjustment, the Base Number of Shares is 150,000.
Certain capitalized terms used herein shall have the meanings set forth
in SECTION 8.
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SECTION I. EXERCISE OF WARRANT.
1.1. EXERCISE. This Warrant may be exercised by Holder, in whole or in
part, at any time and from time to time on or before the Expiration Date, AT NO
CHARGE OR COST TO THE HOLDER, by surrender of this Warrant, together with the
form of subscription at the end hereof duly executed by Holder, to the Company
at its principal office. In the event the Warrant is not exercised in full, the
Base Number of Shares shall be reduced by the portion of such previous Base
Number of Shares to which such partial exercise relates, and the Company, at its
expense, shall forthwith issue and deliver to or upon the order of Holder a new
Warrant of like tenor in the name of Holder or as Holder (upon payment by Holder
of any applicable transfer taxes) may request, reflecting such adjusted Base
Number of Shares. Notwithstanding the foregoing, this Warrant may not be
exercised at any one time for fewer than the Net Number of shares of Common
Stock based on 10% (or the remaining balance) of the Base Number of Shares.
1.2 CALCULATION OF NET NUMBER. The aggregate number of shares of Common
Stock with respect to which this Warrant may be exercised from time to time
shall be equal to the Net Number, which shall be calculated in accordance with
the following formula:
Net Number = (A x B) - (A x C)
-----------------
B
Where: A equals the Base Number of Shares then in
effect at the time of such calculation; and
Where: B equals the Market Price then in effect at
the time of such calculation; and
Where: C equals the Base Index then in effect at
the time of such calculation.
Whenever the Base Index is adjusted pursuant to SECTION 2, the Base
Number of Shares shall be adjusted by multiplying such Base Number of Shares
immediately prior to such adjustment by a fraction the numerator of which is the
Base Index prior to such adjustment and the denominator of which is the Base
Index after such adjustment.
1.3 DELIVERY OF STOCK CERTIFICATES. Subject to the terms and conditions
of this Warrant, as soon as practicable after the exercise of this Warrant in
full or in part, and in any event within 10 days thereafter, the Company at its
expense (including, without limitation, the payment by it of any applicable
issue taxes) will cause to be issued in the name of and delivered to Holder, or
as Holder (upon payment by Holder of any applicable transfer taxes) may lawfully
direct, a certificate or certificates for the number of fully paid
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and non assessable shares of Common Stock to which Holder shall be entitled on
such exercise, together with any other stock or other securities and property
(including cash, where applicable) to which Holder is entitled upon such
exercise.
1.4 FRACTIONAL SHARES. This Warrant may not be exercised as to
fractional shares of Common Stock. In the event that the exercise of this
Warrant, in full or in part, would result in the issuance of any fractional
share of Common Stock, then in such event Holder shall be entitled to cash equal
to the Market Price of such fractional share.
SECTION 2. ADJUSTMENT OF BASE INDEX.
2.1. ADJUSTMENT FOR STOCK DIVIDENDS. In case the Company shall pay a
dividend of securities or property (including cash) or make any other
distribution on any class of capital stock of the Company in shares of Common
Stock (other than in connection with the payment of the Premium on the Company's
Series C Convertible Preferred Stock), the Base Index in effect at the close of
business on the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Base Index by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares and
the total number of shares of Common Stock constituting such dividend or other
distribution, such reduction to become effective immediately prior to the
opening of business on the day following the date fixed for such determination.
For the purposes of this SECTION 2.1, the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of the
Company.
2.2. ADJUSTMENT FOR ISSUANCE OF CERTAIN RIGHTS OR WARRANTS. If the
Company either:
(a) shall issue rights, options or warrants after the date
hereof to any persons (including holders of the Company's capital
stock) entitling them to subscribe for or purchase shares of Common
Stock, or
(b) shall offer after the date hereof for purchase such shares
of Common Stock,
at a price per share less than the Market Price on the date fixed for such
issuance or purchase, then the Base Index in effect at the close of business on
such date shall be reduced by multiplying such Base Index by a fraction of
which:
(i) the numerator shall be (1) the number of shares of Common
Stock outstanding at the close of business on such date plus (2) the
number of shares
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of Common Stock that the aggregate of the offering price of the total
number of shares of Common Stock so offered for subscription or
purchase would purchase at such Market Price; and
(ii) the denominator shall be (1) the number of shares of
Common Stock outstanding at the close of business on such date plus (2)
the number of shares of Common Stock so offered for subscription or
purchase;
such reduction to become effective immediately prior to the opening of business
on the day following such date. For the purposes of this SECTION 2.2, the
issuance of rights, options, or warrants to subscribe for or purchase securities
convertible into Common Stock shall be deemed to be the issuance of rights,
options, or warrants to purchase the number of shares of Common Stock into which
such securities are convertible at an aggregate offering price equal to the
aggregate offering price of such securities plus the minimum aggregate amount
(if any) payable upon conversion of such securities into Common Stock. For the
purposes of this SECTION 2.2, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company.
Notwithstanding the foregoing, subsections (a) and (b) above shall not apply to
the following:
(1) Options granted under stock options plans approved by the
Company's Board of Directors; and
(2) Shares to be issued to Retail Distributors, Inc. ("RDI")
pursuit to a Stock Purchase Agreement dated in 1999; and
(3) Warrants to be issued to RDI pursuant to a Services Agreement
dated in 1999.
2.3. ADJUSTMENT FOR STOCK SUBDIVISIONS AND COMBINATIONS. In case
outstanding shares of Common Stock shall be subdivided into a greater number of
shares of Common Stock, the Base Index in effect at the close of business on the
day upon which such subdivision becomes effective shall be proportionately
reduced and, conversely, in case outstanding shares of Common Stock shall be
combined into a smaller number of shares of Common Stock, the Base Index in
effect at the opening of business on the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately prior to the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
2.4 DILUTION IN CASE OF OTHER SECURITIES. In case any other securities
than Common Stock (the "Other Securities") shall be issued or sold by the
Company after the date hereof, or shall become subject to issue, after the date
hereof, upon the conversion or exchange of any securities (or Other Securities)
of the Company (or any other issuer of Other Securities or any other person
referred to in SECTION 5) or to subscription, purchase or other
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acquisition pursuant to any rights or options granted by the Company (or such
other issuer or person), after the date hereof, for a consideration per share of
Common Stock such as to dilute the purchase rights evidenced by this Warrant,
the computations, adjustments and readjustments provided for in this SECTION 2
with respect to the number of shares of Common Stock issuable upon exercise of
this Warrant shall be made as nearly as possible in the manner so provided and
applied to determine the amount of Other Securities from time to time receivable
on the exercise of the Warrant, so as to protect the holders of the Warrant
against the effect of such dilution.
2.5. ADJUSTMENT FOR DISTRIBUTION OF ASSETS. In case the Company shall,
by dividend or otherwise, distribute to all holders of its Common Stock
evidences of its indebtedness or assets (including securities, but excluding any
rights, warrants or Common Stock referred to in SECTION 2.2, any dividend or
distribution paid in cash out of the earned surplus or capital surplus of the
Company, and any dividend or distribution referred to in SECTION 2.1), the Base
Index shall be adjusted so that the same shall equal the price determined by
multiplying the Base Index in effect immediately prior to the close of business
on the date fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the Market Price on
the date fixed for such determination less the then fair market value (as
reasonably determined by the Company's Board of Directors) of the portion of the
assets or evidences of indebtedness so distributed (net of the fair market
value, as so determined, of any consideration paid or exchanged with respect
thereto) applicable to one share of Common Stock and the denominator shall be
such Market Price, such adjustment to become effective immediately prior to the
opening of business on the day following the date fixed for the determination of
stockholders entitled to receive such distribution.
2.6. COMPUTATION OF ADJUSTED BASE INDEX. Whenever the Base Index is
adjusted as provided in this SECTION 2:
(a) The Company shall compute the adjusted Base Index to the
nearest one hundredth of a cent in accordance with this SECTION 2 and
shall prepare a certificate signed by the Chief Financial Officer or
the Treasurer of the Company setting forth the adjusted Base Index and
showing in reasonable detail the facts upon which such adjustment is
based, and such certificate shall forthwith be filed at the office
maintained pursuant to SECTION 4.3;
(b) A notice stating that the Base Index has been adjusted and
setting forth the adjusted Base Index shall, as
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soon as practicable after it is required, be mailed to Holder; and
(c) At its option, Holder may confirm the adjustment noted on
the certificate by causing such adjustment to be computed by an
independent certified public accountant at the expense of the Company.
2.7. MINIMUM ADJUSTMENT. No adjustment in the Base Index shall be
required under this SECTION 2 unless such adjustment would require an increase
or decrease of at least one percent in such price; provided, however, that any
adjustments that by reason of this SECTION 2.7 are not required to be made shall
be carried forward and taken into account in any subsequent adjustment. All
calculations under this SECTION 2 shall be made to the nearest one hundredth of
a cent or to the nearest one hundredth of a share as the case may be.
2.8. ACCOUNTANTS' CERTIFICATE AS TO ADJUSTMENTS. In each case of any
adjustment or readjustment in the Base Number of Shares (or other securities)
issuable on the exercise of the Warrant, the Company at its expense will
promptly cause independent certified public accountants of recognized standing
selected by the Company to compute such adjustment or readjustment in accordance
with the terms of the Warrant and prepare a certificate setting forth such
adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock (or other securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or other securities)
outstanding or deemed to be outstanding, and (c) the Purchase Price and the
number of shares of Common Stock to be received upon exercise of the Warrant, in
effect immediately prior to such issue or sale and as adjusted and readjusted as
provided in the Warrant. The Company will forthwith mail a copy of each such
certificate to each Holder of a Warrant.
SECTION 3. REDEMPTION OF THIS WARRANT.
At the option of Holder, at any time after the third (3rd) anniversary
of the date of this Warrant, the Company shall redeem this Warrant for a price
equal to the GREATER OF:
(i) the number of shares of Common Stock for which
this Warrant is exercisable on the date on which written notice of the
request for redemption is given by the Holder to the Company (the
"Request Date"), multiplied by the Market Price at the close of
business on the business day immediately prior to the Request Date; or
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(ii) The balance of: (x) Two Hundred Thousand Dollars
($200,000.00), minus (y) the product of the number of shares of Warrant
Stock then held times the Market Price, and minus (z) the amount of any
proceeds theretofore received by the Holder from the sales of any
shares of Warrant Stock.
The closing of the redemption shall take place at the principal office of the
Company no later than thirty days following the date of any such notice unless a
different time and/or place is agreed to by the Company and Holder. At the
closing, Holder shall deliver to the Company the Warrant to be redeemed, and the
Company shall deliver to Holder a certified check in the full amount due upon
the redemption.
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SECTION 4. CERTAIN OBLIGATIONS OF THE COMPANY.
4.1. RESERVATION OF STOCK. The Company covenants that it will at all
times reserve and keep available out of its authorized and unissued Common Stock
or out of shares of its treasury stock, solely for the purpose of issue upon
exercise of the purchase rights evidenced by this Warrant, a number of shares of
Common Stock equal to the number of shares of Common Stock issuable hereunder.
The Company will from time to time, in accordance with the laws of the State of
Delaware, take action to increase the authorized amount of its Common Stock if
at any time the number of shares of Common Stock authorized but remaining
unissued and unreserved for other purposes shall be insufficient to permit the
exercise of this Warrant.
4.2. NO VALUATION OR IMPAIRMENT. The Company will not, by amendment of
its Certificate of Incorporation, including, without limitation, amendment of
the par value of its Common Stock, or through reorganization, consolidation,
merger, dissolution, issuance of capital stock or sale of treasury stock
(otherwise than upon exercise of this Warrant) or sale of assets, or by any
other voluntary act or deed, avoid or seek to avoid the material performance or
observance of any of the covenants, stipulations or conditions in this Warrant
to be observed or performed by the Company. The Company will at all times in
good faith assist, insofar as it is able, in the carrying out of all of the
provisions of this Warrant in a reasonable manner and in the taking of all other
action that may be necessary in order to protect the rights of the holder of
this Warrant Against dilution in the manner required by the provisions of this
Warrant.
4.3. MAINTENANCE OF OFFICE. The Company will maintain an office where
presentations and demands to or upon the Company in respect of this warrant may
be made. The Company will give notice in writing to Holder, at the address of
Holder appearing on the books of the Company, of each change in the location of
such office.
SECTION 5 REORGANIZATION, ETC.
5.1 REORGANIZATION, CONSOLIDATION, MERGER. If any spin off, split up,
similar corporate rearrangement, reorganization or reclassification of the
capital stock of the Company, or consolidation or merger of the Company with
another corporation that after the transaction will be required to file reports
with the Securities and Exchange Commission (the "SEC") pursuant to Section 13
or 15 of the Securities Exchange Act of 1934, as amended (a "Public
Corporation"), or sale of all or substantially all of its assets to another
Public Corporation shall be effected, then, as a condition of such
reorganization, reclassification,
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consolidation, merger or sale, lawful and adequate provision shall be made
whereby Holder shall thereafter have the right to receive upon the terms and
conditions herein specified, and, in lieu of the shares of Common Stock of the
Company immediately theretofore receivable upon exercise of this Warrant, such
securities or property as may be issued or payable with respect to or in
exchange for a number of outstanding shares of Common Stock equal to the number
of shares of Common Stock immediately theretofore receivable upon the exercise
of this Warrant had such reorganization, reclassification, consolidation, merger
or sale not taken place, and in any such case appropriate provision shall be
made with respect to the rights and interests of Holder to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Base Index and of the number of shares purchasable upon the exercise of this
Warrant) shall thereafter be applicable, as nearly as may be, in relation to any
securities or property thereafter deliverable upon the exercise hereof.
The Company shall not effect any such spin off, split up, similar
corporate rearrangement, reorganization, consolidation, merger or sale unless,
prior to or contemporaneously with the consummation thereof, the successor
corporation (if other than the Company) resulting from such consolidation or
merger or the corporation purchasing such assets shall assume by written
instrument executed and delivered to Holder, the obligation hereunder and become
bound by all the terms hereof to deliver to Holder such securities or property
as, in accordance with the foregoing provisions, Holder may be entitled to
purchase or receive.
5.2. DISSOLUTION. In any event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the stock and other securities and property (including cash, where
applicable) receivable by the Holders of the Warrants after the effective date
of such dissolution pursuant to this SECTION 5 to the Holder or Holders of the
Warrants.
5.3. CONTINUATION OF TERMS. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this SECTION 5, this Warrant shall continue in full force and effect, subject to
expiration in accordance with SECTION 1.1 hereof, and the terms hereof shall be
applicable to the shares of stock and other securities and property receivable
on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may
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be, and shall be binding upon the issuer of any such stock or other securities,
including, in the case of any such transfer, the person acquiring all or
substantially all of the properties or assets of the Company, whether or not
such person shall have expressly assumed the terms of this Warrant as provided
in SECTION 5.1.
SECTION 6. NOTICES OF RECORD DATE.
In the event of:
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders
thereof who are entitled to receive, any dividend or other
distribution, or any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities or
property, or to receive any other right; or
(b) any capital reorganization of the Company, any
reclassification of the capital stock of the Company or any transfer of
all or substantially all the assets of the Company to or any
consolidation or merger of the Company with or into any other Person;
or
(c) any voluntary or involuntary dissolution, liquidation or
winding up of the Company,
then, and in each such event, the Company will give to Holder a notice
specifying (i) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and stating the amount and character of
such dividend, distribution or right, and (ii) the date on which any such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding up is to take place, and the time, if any is to be f
fixed, as of which the holders of record of Common Stock for securities or other
property deliverable on such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable on such reorganization, reclassification,
transfer, consolidation, merger, dissolution, liquidation or winding up. Such
notice shall be mailed at least 30 days prior to the date specified in such
notice on which any such action is to be taken.
SECTION 7. REGISTRATION RIGHTS.
7.1. GENERAL. For purposes of this SECTION 7, the terms "register,"
"registered," and "registration" refer to a registration effected by preparing
and filing a registration
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statement in compliance with the Federal Act and the declaration or ordering of
effectiveness of such registration statement. The Company represents and
warrants that it has not granted rights to cause the Company to register any of
its securities to anyone, except to the Holder pursuant hereto and such other
persons or entities with the registration rights existing on the date hereof and
described in Schedule 7.1 hereto (the "Existing Registration Rights").
7.2. COMPANY REGISTRATION.
(a) If at any time the Company proposes to register any of its
Common Stock under the Federal Act in connection with the public offering of
such securities for its own account or for the accounts of its shareholders,
solely for cash on a form that would also permit the registration of the Warrant
Stock, the Company shall, each such time, promptly give Holder or any transferee
of registration rights under this SECTION 7 written notice of such proposal.
Upon the written request of any such Holder or Warrant Stock Holder (a "Selling
Holder") given within thirty (30) days after mailing of any such notice by the
Company, the Company shall use its reasonable best efforts to cause to be
registered under the Federal Act all of the Warrant Stock that Selling Holder
has requested be registered; provided that if, in the opinion of the managing
underwriter for an underwritten offering, the registration of all, or part of,
the Warrant Stock which the Holders have requested be included in such offering
would have an adverse effect thereon, then the Company shall be required to
include in the underwriting only that number of Warrant Stock, if any, which the
managing underwriter reasonably believes may be sold without causing such
adverse effect.
(b) If the number of shares to be included in the offering in
accordance with the foregoing is less than the number of shares which the
Holders and the persons or entities listed on Schedule 7.1 as holding Existing
Registration Rights have requested be included (pursuant to the exercise of such
Holder's registration rights, or such persons' or entities' Existing
Registration Rights, as the case may be), the Company shall be entitled to
include all shares which it had intended to register, after which the Holders
shall (subject to any superior rights in favor of persons holding Existing
Registration Rights) be entitled to participate in the underwriting pro rata
with such persons or entities holding Existing Registration Rights, based upon
their respective total owned number of shares of Common Stock.
(c) Notwithstanding the foregoing, the Company may withdraw
any registration statement referred to in this SECTION 7.2 (but not including
any registration statement referred to in SECTION 7.3) without incurring
liability to any Selling Holder on account of such withdrawal.
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7.3. REGISTRATION UPON SELLING HOLDER'S REQUEST.
(a) Each Selling Holder shall have the right, at any time from
and after the third (3rd) anniversary of the date of this Warrant, to request
and require the Company, by written notice to the Company, to register all or
part of the Warrant Stock of such Selling Holder under the Federal Act; provided
that the Company shall not be obligated to register Warrant Shares on more than
one occasion under this Section 7.3.
(b) Upon receipt of any such notice from such Selling Holder,
the Company shall use its reasonable best efforts to cause to be registered
under the Federal Act all of the Warrant Stock that such Selling Holder has
requested be registered; provided that if, in the opinion of the managing
underwriter for an underwritten offering, the registration of all, or part of,
the Warrant Stock which the Holders have requested be included in such offering
would have an adverse effect thereon, then, the Company shall be required to
include in the underwriting only that number of Warrant Stock, if any, which the
managing underwriter reasonably believes may be sold without causing such
adverse effect.
(c) If the number of shares to be included in the offering in
accordance with the foregoing is less than the number of shares which the
Holders and the persons or entities listed on Schedule 7.1 as holding Existing
Registration Rights have requested be included (pursuant to the exercise of such
Holder's registration rights, or such persons, or entities' Existing
Registration Rights, as the case may be), the Holders shall (subject to any
superior rights in favor of persons holding Existing Registration Rights) be
entitled to participate in the underwriting pro rata with such persons or
entities holding Existing Registration Rights, based upon their respective total
ownership of shares of Common Stock.
7.4. OBLIGATIONS OF THE COMPANY. Whenever required hereunder to use
"its reasonable best efforts to effect the registration of any Warrant Stock",
the Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Warrant Stock and use its reasonable best efforts
to cause such registration statement to become and remain effective;
provided, however, that in connection with any proposed registration
intended to permit an offering of any securities from time to time
(i.e., a so called "shelf registration"), the Company shall in no event
be obligated to cause any such registration to remain effective for
more than one hundred eighty (180) days.
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(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to
comply with the provisions of the Federal Act with respect to the
disposition of all securities covered by such registration statement.
(c) Furnish to Selling Holder such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Federal Act, and such other documents as it may
reasonably request in order to facilitate the disposition of Warrant
Stock owned by it.
(d) Use its reasonable best efforts to register and qualify
the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be
reasonably appropriate for the distribution of the securities covered
by the registration statement, provided that (anything in this section
to the contrary notwithstanding with respect to the bearing of
expenses) if any jurisdiction in which the securities shall be
qualified shall require that expenses incurred in connection with the
qualification of the securities in that jurisdiction be borne by
selling shareholders, then such expenses shall be payable by selling
shareholders pro rata, to the extent required by such jurisdiction.
(e) Provide a transfer agent for the Warrant Stock no later
than the effective date of the first registration of any Warrant Stock.
7.5. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section that
Selling Holder shall furnish to the Company such information regarding it and
the Warrant Stock held by it and the intended method of disposition of such
securities as the Company shall reasonably request and as shall be required in
connection with the action to be taken by the Company.
7.6. EXPENSES. All expenses incurred in connection with registrations
pursuant to this SECTION 7 (excluding underwriters, discounts and commissions)
including, without limitation, all registration and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for the
Corporation, shall be payable and duly paid by the Company, provided that the
Selling Holder shall be responsible for any fees and disbursements of counsel of
Selling Holder.
7.7. UNDERWRITING REQUIREMENTS. In connection with any offering
involving an underwriting of shares being issued by the Company, the Company
shall not be required under SECTION 7.2 to include any of Selling Holder's
Warrant Stock in such underwriting
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unless Selling Holder accepts the terms of the underwriting as agreed upon
between the Company and the underwriters selected by it (provided such terms are
customary for underwritings of like kind), and then only in such quantity as
will not, in the reasonable opinion of the underwriters, jeopardize the success
of the offering by the Company.
7.8. INDEMNIFICATION. In the event any Warrant Stock is included in a
registration statement as a result of this Section:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Selling Holder, any underwriter, and each
person, if any, who controls such Selling Holder or any such
underwriter within the meaning of the Federal Act, against any losses,
claims, damages or liabilities, joint or several, to which they may
become subject under the Federal Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based on any untrue or alleged untrue statement of
any material fact contained in such registration statement or any other
document, instrument, certificate or filing in connection with the
offering to which such registration statement relates, including,
without limitation, any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading or arise out of any
violation by the Company of any rule or regulation promulgated under
the Federal Act or state securities (or so called "Blue Sky") laws, or
regulations promulgated thereunder, of any jurisdiction applicable to
the Company and relating to action or inaction required of the Company
in connection with any such registration or such offering; and will
reimburse such Selling Holder, and each such underwriter or controlling
person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the Company shall
not be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises solely out of or is
based solely upon an untrue statement or alleged untrue statement or
omission or alleged omission made in connection with such registration
statement, document, instrument, certificate, filing, preliminary
prospectus, final prospectus, or amendments or supplements thereto, and
made solely in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by
such Selling Holder, or any such underwriter or controlling person.
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(b) To the extent permitted by law, each Selling Holder will
indemnify and hold harmless the Company against any losses, claims,
damages or liabilities, to which it may become subject under the
Federal Act or otherwise; insofar as any loss, claim, damage, or
liability arises solely out of or is based solely upon an untrue
statement or alleged untrue statement or omission or alleged omission
made in connection with such registration statement, document,
instrument, certificate, filing, preliminary prospectus, final
prospectus, or amendments or supplements thereto, and made solely in
reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by such Selling
Holder.
(c) Promptly after receipt by a indemnified party under this
SECTION 7.8 of, notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section, notify the
indemnifying party in writing of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, to assume the defense thereof
with counsel mutually satisfactory to the parties, but the failure to
notify the indemnifying party Company promptly of the commencement of
any such action will not relieve the indemnifying party of any
liability that it may have to any indemnified party. If any such action
is against both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that there may be
reasonable defenses available to it that are different from or
additional to those available to the indemnifying party or that its
interests conflict with the interests of the indemnifying party, the
indemnified party shall have the right to select a separate counsel and
to assume such legal defenses and otherwise to participate in the
defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred.
7.9 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to
making available to Holder the benefits of Rule 144 promulgated under the Act
and any other rule or regulation of the SEC that may at any time permit Holder
to sell securities of the Company to the public without registration, the
Company agrees to use its best efforts to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144, at all times;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the
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Federal Act and the Securities Exchange Act of 1934, as amended (the
"1934 Act"); and
(c) furnish to any Holder forthwith upon request a written
statement by the Company that it has, complied with the reporting
requirements of Rule 144 and of the Federal Act and the 1934 Act (at
any time after it hat become subject to such reporting requirements), a
copy of the most recent annual or quarterly report of the Company, and
such other reports and documents so filed by the Company as may be
reasonably requested in availing any such Molder to take advantage of
any rule or regulation of the SEC permitting the selling of any such
securities without registration.
7.10 TRANSFER OF REGISTRATION RIGHTS. The registration rights of Holder
may be transferred to any transferee who acquires (otherwise than in a
registered public offering) this Warrant or Warrant Stock, provided, however,
that such rights may be held by no more than ten Persons at any one time and
that the Company is given written notice by Holder at the time of such transfer
stating the name and address of the transferee and identifying the securities
with respect to which the rights are being assigned.
SECTION 8. DEFINITIONS.
As used herein, the following terms, unless the context otherwise
requires, have the following respective meanings:
8.1. The term COMMON STOCK includes the Company's Common Stock, par
value $0.01 per share, and any other securities or rights into which or for
which the Common Stock is converted or exchanged, whether pursuant to a plan of
reclassification, reorganization, consolidation, merger, sale of assets,
dissolution, liquidation, or otherwise.
8.2. The term EXPIRATION DATE shall mean the tenth (10th) anniversary
of the date of this Warrant.
8.3. The term MARKET PRICE shall mean the average of the per share
daily closing prices of Common Stock for the ten (10) consecutive business days
immediately prior to the day in question. The closing price for each day shall
be:
(a) the last reported sales price or, in case no such reported
sale takes place on such day, the average of the reported closing bid
and ask prices, in either case on the principal national securities
exchange on which the Common Stock is listed or admitted to trading or,
if the Common Stock is not listed or admitted to trading on any
national securities exchange, on the National Association of Securities
Dealers Automated Quotation National Market System; or
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(b) if the Common Stock is not listed or admitted to trading
on any national securities exchange or quoted in such National Market
System, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange
member firm reasonably selected from time to time by the Company for
that purpose; or
(c) if the Common Stock is not listed or admitted to trading
on any national securities exchange or quoted on such National Market
System and the average price cannot be determined as contemplated by
clause (b), the fair market value as, reasonably determined in good
faith by the Company's Board of Directors or in any manner reasonably
prescribed by the Company's Board of Directors.
For the purposes of this SECTION 8.3, the term "BUSINESS DAY" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on which
securities are not traded on such exchange or in such market,
8.4. The term NET NUMBER shall mean the number of fully paid and
non-assessable shares of Common Stock of the Company with respect to which the
Warrant is exercisable, as calculated in accordance with SECTION 1.2 hereof.
8.5. The term BASE INDEX shall mean $10.00 as of the date hereof, to be
adjusted pursuant to SECTION 2.
8.6. The term BASE NUMBER OF SHARES shall mean 150,000 shares as of the
date hereof, to be adjusted pursuant to SECTION 1.2 hereof.
8.7. The term WARRANT STOCK shall mean any equity security issued upon
exercise of this Warrant.
8.8. The term PERSON shall mean an individual, partnership,
corporation, association, trust, joint venture, unincorporated organization or
any government, governmental department or agency or political subdivision
thereof.
SECTION 9. REPLACEMENT OF WARRANTS.
Upon (a) surrender of this Warrant in mutilated form or receipt of
evidence satisfactory to the Company of the loss, theft or destruction of this
Warrant and (b) in the case of any loss, theft or destruction of any Warrant,
receipt of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company, then, in the absence of actual notice to the Company
that this Warrant has been acquired by a bona fide purchaser, the Company, at
its expense, shall execute and deliver, in lieu of this Warrant, a new Warrant
identical in form to this Warrant.
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SECTION 10. REMEDIES.
The Company stipulates that the remedies at law of the Holder in the
event of any breach or threatened breach by the Company of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a breach of any of the terms hereof
or otherwise.
SECTION 11. TRANSFER.
This Warrant and the shares of Common Stock issuable hereunder shall
not be sold, transferred, pledged or hypothecated unless the proposed
disposition is the subject of a currently effective registration statement under
the Federal Act or unless the Company has received any opinion of counsel, in
form and substance reasonably satisfactory to the Company, to the effect that
such registration is not required in connection with such disposition. Subject
to the first sentence of this Section, this Warrant and all rights hereunder are
freely transferable, in whole or in part, but to no more than ten (10)
transferees in the aggregate (including the transferor if it retains a part of
this Warrant), at the office or agency of the Company by the registered holder
thereof in person or by a duly authorized attorney, upon surrender of this
Warrant together with an assignment hereof properly endorsed. Until transfer
hereof on the registration books of the Company, the Company may treat the
existing registered holder hereof as the owner hereof for all purposes. Any
transferee of this Warrant and any rights hereunder, by acceptance thereof,
agrees to assume all of the obligations of Holder and to be bound by all of the
terms and provisions of this Warrant.
SECTION 12. NOTICES.
Where this Warrant provides for notice of any event such notice shall
be given (unless otherwise herein expressly provided) in writing and either (a)
delivered personally, (b) sent by certified, registered or express mail, postage
prepaid, (c) telegraphed or (d) telexed or sent by facsimile transmission, and
shall be deemed given when so delivered personally, telegraphed, telexed, sent
by facsimile transmission (confirmed in writing) or mailed. Notices shall be
addressed, if to Holder, to the address of Holder appearing in the register
referred to in SECTION 11 or, if to the Company, to its office maintained
pursuant to SECTION 4.3.
SECTION 13. MISCELLANEOUS.
(a) This Warrant shall be binding upon the Company and Holder and their
legal representatives, successors and assigns.
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(b) In case any provision of this Warrant shall be invalid, illegal or
unenforceable, or partially invalid, illegal or unenforceable, the provision
shall be enforced to the extent, if any, that it may legally be enforced and the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
(c) This Warrant and any term hereof may be changed, waived, discharged
or terminated only by a statement in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
(d) This Warrant shall be governed by, and construed and enforced in
accordance with the laws of The Commonwealth of Massachusetts without regard to
its principles of conflicts of laws.
(e) The headings in this Warrant are for purposes of reference only,
and shall not limit or otherwise affect any of the terms hereof.
(f) This Warrant shall take effect as an instrument under seal.
(g) Reference is made to that certain Loan Agreement of even date
between SSBT and the Company, (the "Loan Agreement"). The Company acknowledges
that SSBT would not have entered into the Loan Agreement but for the execution
and delivery of this Common Stock Warrant.
(h) The provisions of Section 7 shall survive the termination or
expiration of this Warrant and shall continue to be effective with respect to
any Warrant Stock issued.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized officer and its corporate seal to be impressed hereon and
attested by its Secretary or Assistant Secretary.
Dated as of July 7, 1999 SHARED TECHNOLOGIES
CELLULAR, INC.
By \s\ Xxxxxxx XxXxxxxxxx
-----------------------
Name: Xxxxxxx XxXxxxxxxx
Title: Chief Financial Officer
Attest:
\s\ Xxxxxx Xxxxx (Corporate Seal)
----------------
Ass't Secretary
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FORM OF SUBSCRIPTION
(To be signed only on exercise of
Common Stock Warrant)
TO: SHARED TECHNOLOGIES CELLULAR, INC.
The undersigned, the holder of the within Common Stock Warrant, hereby
irrevocably elects to exercise this Common Stock Warrant for, and to receive
thereunder ___________ shares of Common Stock of SHARED TECHNOLOGIES CELLULAR,
INC. (the "Company"), and requests that the certificates for such shares be
issued in the name ______________ of, and delivered to whose address is
_______________________.
Dated: ____________
________________________________________
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant)
________________________________________
(Address)
*Insert here the number of shares (all or part of the number
of shares called for in the Common Stock) as to which the Common Stock
Warrant is being exercised without making any adjustment for any other
stock or other securities or property or cash that, pursuant to the
adjustment provisions of the Common Stock Warrant, may be deliverable
on exercise.
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FORM OF ASSIGNMENT
(To be signed only on transfer of
Common Stock Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto __________________ of _____________________ the right represented
by the within Common Stock Warrant to receive the Net Number of shares of Common
Stock of SHARED TECHNOLOGIES CELLULAR, INC. to which the within Common Stock
Warrant relates, and appoints_________________, Attorney to transfer such right,
on the books of SHARED TECHNOLOGIES CELLULAR, INC. with full power of
substitution in the premises.
Dated: __________
________________________________________
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant)
________________________________________
(Address)
Signed in the presence of: ____________________
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SCHEDULE 7.1
Existing Registration Rights
1. Registration rights in favor of Retail Distributors, Inc. pursuant to a
Registration Rights Agreement to be entered into with RDI.
2. Registration rights in favor of the holders of the Company's Series C
Convertible Preferred Stock and related Warrants to purchase Common
Stock pursuant to a Registration Rights Agreement dated January 28,
1999. A Registration Statement on Form S-3 was filed with the
Securities and Exchange Commission in satisfaction of these rights, but
has not yet been effective by the SEC (the "Pending S-3").
3. Registration rights in favor of the holders of the Company's 5%
Convertible Notes pursuant to the terms of such notes issued in May,
1998. The shares of Common Stock issuable upon conversion of these
notes are included in the Pending S-3.
4. The Company currently has two additional Form S-3 Registration
Statements in effect in satisfaction of registration rights in favor of
the holders of shares of Common Stock and Warrants to purchase Common
Stock that were previously issued by the Company in private placements.
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