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.
-5-
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.
-6-
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
