UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __________________)*
SHARED TECHNOLOGIES FAIRCHILD INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.004 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
81948QAAS
- --------------------------------------------------------------------------------
(CUSIP Number)
Shared Technologies Fairchild Inc. 100 Great Meadow Road,
Wethersfield, CT 06109 Attn: Kenneth M.Dorros
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
March 13, 1996
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Check the following box if a fee is being paid with the statement |X|. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 6 Pages
<PAGE>
<PAGE>
SCHEDULE 13D
- ---------------------- ---------------------------
CUSIP No. 81948QAAS Page 2 of 6 Pages
--------- --- ---
- ---------------------- ---------------------------
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Fairchild Corporation - IRS EIN 34-0728587
RHI Holdings, Inc. - IRS EIN 34-1545939
- -------------------------------------------------------------------------------
2 CHECK THE APPROXIMATE BOX IF A MEMBER OF A GROUP (a) |_|
(b) |_|
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) |_|
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OR ORGANIZATION
The Reporting Persons are incorporated under the laws of Delaware
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 9,921,568
SHARES ------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH ------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 9,921,568
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,921,568
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_|
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- -------------------------------------------------------------------------------
Page 2 of 6 Pages
<PAGE>
<PAGE>
Item 1. Security and Issuer.
This statement relates to the common stock, par value $.004 per share,
(the "Common Stock") of Shared Technologies Fairchild Inc., a Delaware
corporation ("STFI"), whose principal executive offices are located at 100 Great
Meadow Road, Wethersfield, CT 06109.
Item 2. Identity and Background
This statement is filed by The Fairchild Corporation ("TFC") and RHI
Holdings, Inc. ("RHI"), each a Delaware corporation. The address for each of TFC
and RHI is 300 West Service Road, Chantilly, VA 22021. TFC is a leading
worldwide supplier of aerospace fasteners. RHI is a wholly-owned subsidiary of
TFC.
Exhibit A, which is incorporated herein by reference, sets forth the
name, business address, the present principal occupation or employment, and the
citizenship of the executive officers and directors of RHI and TFC.
During the five years prior to the date hereof, neither TFC, RHI, and
to TFC's and RHI's knowledge no executive officer or director of TFC or RHI has
(i) been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) during the last five years nor has been (ii) a party to
any civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree, or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities law or finding any
violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
On March 13, 1996, Fairchild Industries, Inc., a wholly-owned
subsidiary of RHI and an indirect subsidiary of TFC, was merged into Shared
Technologies Inc. ("Shared Technologies") with the surviving corporation renamed
Shared Technologies Fairchild Inc. As a result of the merger, RHI received (i)
6,000,000 shares of Common Stock (representing approximately 41% of the
outstanding shares after giving effect to such issuance), (ii) shares of 6%
Cumulative Convertible Preferred Stock of STFI having an aggregate liquidation
preference of $25,000,000 (subject to upward adjustment) and which are
convertible into Common Stock at a conversion price of $6.3750 per share (which,
if converted, would represent an additional 3,921,568 shares of Common Stock
and, together with the other Common Stock issued to RHI, approximately 54% of
the Common Stock outstanding) and (iii) shares of a Special Preferred Stock
having an initial liquidation preference of $20,000,000 (which could accrete up
to a maximum of $30,000,000 over a ten-year period if not earlier redeemed).
Item 4. Purpose of Transaction
The Common Stock beneficially owned by TFC, through RHI, is currently
held for investment purposes only. Subject to certain exceptions, TFC and RHI
have agreed not to acquire additional shares of Common Stock or sell any of its
shares of Common Stock until March 13, 1998. Neither TFC nor RHI currently has
any plans or proposals which relate to or could result in STFI becoming a
privately held company. Neither TFC nor RHI currently has specific plans or
proposals that relate to or would result in any of the matters described in
subparagraphs (b) through (j) of Item 4 of Schedule 13D.
Page 3 of 6 Pages
<PAGE>
<PAGE>
Item 5. Interest in Securities of the Issuer.
(a) Based on Shared Technologies Inc.'s Quarterly report on form 10-Q
for its fiscal quarter ended September 30, 1995, TFC's beneficial ownership of
9,921,568 shares of Common Stock, through RHI, constitutes approximately 54% of
the Common Stock outstanding, based upon 8,504,823 shares of Common Stock issued
and outstanding as of November 14, 1995.
(b) The information required by this paragraph is set forth in Items 7
through 11 of the cover page of this Schedule.
(c) through (e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
RHI presently has a registration rights agreement and a shareholders
agreement for the shares of Common Stock it owns. Pursuant to the registration
rights agreement, RHI has certain demand and piggyback registration rights.
Pursuant to the shareholders agreement, RHI has agreed, subject to certain
exceptions, not to acquire additional shares of Common Stock or sell any of its
shares of Common Stock until March 13, 1998. In addition, the shareholders
agreement entitles RHI to nominate four members to the Board of Directors of
STFI. Pursuant to a pledge agreement, RHI has pledged all of its shares of
Special Preferred Stock and 6% Cumulative Preferred Stock having a liquidation
preference of $23,500,000 in favor of the pledge agent in respect of certain
liabilities of Fairchild Industries, Inc. Other than as previously mentioned,
neither RHI nor TFC any of their respective officers and directors has any
contracts, arrangements, understandings or relationships (legal or otherwise)
among such persons or with any other person with respect to any securities of
STFI, including, but not limited to, transfer or voting of any securities of
STFI, finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss or the giving or withholding
of proxies.
Item 7. Items to be Filed as Exhibits.
Exhibit A Information concerning the executive officers and directors of RHI
and TFC.
Exhibit B Agreement and Plan of Merger dated as of November 9, 1995 by and
among Fairchild, RHI, FII and Shared Technologies ("Merger
Agreement"). 1
Exhibit C Amendment No. 1 to Merger Agreement dated as of February 2, 1996.
Exhibit D Amendment No. 2 to Merger Agreement dated as of February 23, 1996.
Exhibit E Amendment No. 3 to Merger Agreement dated as of March 1, 1996.
- --------
1 Incorporated by reference from the Registrant's Form 8-K filed on
November 20, 1995.
Page 4 of 6 Pages
<PAGE>
<PAGE>
Exhibit F Shareholders Agreement dated as of March 13, 1996 by and among
RHI, Shared Technologies and Anthony A. Autorino
Exhibit G Registration Rights Agreement dated as of March 13, 1996 by and
among RHI and Shared Technologies.
Exhibit H Pledge Agreement dated as of March 13, 1996 by and among RHI,
Shared Technologies and Gadsby & Hannah.
Page 5 of 6 Pages
<PAGE>
<PAGE>
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
March 13, 1996
THE FAIRCHILD CORPORATION
By: /s/ Donald E. Miller
-------------------------------
Donald E. Miller
Senior Vice President
General Counsel
and Secretary
RHI HOLDINGS, INC.
By: /s/ Donald E. Miller
-------------------------------
Donald E. Miller
Vice President
and Secretary
Page 6 of 6 Pages
<PAGE>
<PAGE>
EXHIBIT A
DIRECTORS AND EXECUTIVE OFFICERS OF THE FAIRCHILD CORPORATION
The names, titles, present principal occupation, five year employment
history and business addresses of each of the directors and executive officers
of TFC are set forth below. The business address of each of the directors and
executive officers of TFC, with respect to positions, offices or employment with
TFC, is 300 West Service Road, Chantilly, VA 22021. All directors and officers
listed below are citizens of the United States, with the exception of Jeffrey J.
Steiner, Chairman of the Board, Chief Executive Officer and President of each of
TFC and RHI who is a citizen of Austria.
Title, Present Principal Occupation,
Name Five Year Employment History and Business Addresses
- ---- ---------------------------------------------------
Michael T. Alcox Senior Vice President and the Chief Financial
Officer of TFC since December 1987. He also served
as Treasurer of TFC from September 1990 until
November 1991. Since 1990, Mr. Alcox also has
served as Vice President and the Chief Financial
Officer of RHI Holdings, Inc. ("RHI") and Fairchild
Industries, Inc. ("Fairchild Industries"), two
subsidiaries of TFC. He is a director of RHI,
Fairchild Industries, and Banner Aerospace, Inc.
("Banner Aerospace"). He became a director of TFC
in 1988.
Mortimer M. Caplin Director of TFC since 1990. Senior member of Caplin
& Drysdale (attorneys) since 1964. Mr. Caplin
serves as a director of Fairchild Industries,
Presidential Realty Corporation and Danaher
Corporation.
Philip David Director of TFC since 1985. Consultant to TFC from
January 1988 to June 1993. He was also an employee
of TFC from January 1988 to December 1989. He was a
Professor of Urban Development at Massachusetts
Institute of Technology until June 1988. Dr. David
is also a director of Advanced NMR Systems, Inc.
Thomas J. Flaherty Director of TFC since 1993. Joined TFC in April
1993, as the Chief Operating Officer. Since 1993,
he also has served as a director and the Chief
Operating Officer of Fairchild Industries. He was
President and the Chief Operating Officer of IMO
Industries, Inc. from 1992 to April 1993. He was
the Chief Executive Officer & President of
Transnational Industries, Inc. from 1990 to 1992.
From 1977 to 1990, he held various executive
positions with the Hamilton Standard and Pratt &
Whitney units of United Technologies Corporation.
Harold J. Harris Director of TFC since 1985. President of Wm. H.
Harris, Inc. (retailer). He is a director of
Capital Properties Incorporated of Rhode Island.
Samuel J. Krasney Director since 1968. Retired in 1993 as the
Chairman of the Board, the Chief Executive Officer
and President of Banner Aerospace, positions he had
held since
<PAGE>
<PAGE>
Title, Present Principal Occupation,
Name Five Year Employment History and Business Addresses
- ---- ---------------------------------------------------
June 1990. He continues to serve as a member of the
Board of Banner Aerospace (since June 1990) and
also serves as the Vice Chairman of the Board of
TFC (since December 1985). He served as the Chief
Operating Officer of TFC from December 1985 until
December 1989. Mr. Krasney has served as the
managing partner of ABBA Capital Enterprises since
October 1985. Mr. Krasney is a director of
FabriCenters of America, Inc. and Waxman
Industries, Inc.
Frederick W. McCarthy Director since 1986. Chairman of the Board of
Triumph Capital Group, Inc. and a Managing Director
of Triumph Corporate Finance Group, Inc.
(investment bankers), a position held since March
1990. Prior thereto, he was a Managing Director of
Drexel Burnham Lambert Incorporated ("Drexel
Burnham"), investment bankers, from 1974 until
January 1990. Mr. McCarthy serves as a director of
RHI, RC/Arby's Corporation, Nutra Max Products,
Inc., and EnviroWorks, Inc.
Herbert S. Richey Director since 1977. Served as President of Richey
Coal Company (coal properties- brokerage and
consulting) until December 1993. Mr. Richey is a
director of Fairchild Industries and Sifco
Industries, Inc.
Robert A. Sharpe II Director since 1995. Joined Smithfield Foods, Inc.
as Vice President, Corporate Development, in July
1994. Prior to that time Mr. Sharpe served as
Senior Vice President of NationsBank Corporation
and held other management positions with
NationsBank.
Dr. Eric I. Steiner Served as Senior Vice President, Operations of TFC
since May 1992, and is currently President of
Fairchild Fasteners, a division of VSI Corporation,
a wholly owned subsidiary of Fairchild Industries.
Prior thereto, he served as President of Camloc/RAM
Products, one of TFC's operating units, from
September 1993 to February 1995. He served as Vice
President, Business Planning of TFC from March 1991
until May 1992. He has also served as Vice
President of Fairchild Industries since May 1992.
He received an M.B.A. from Insead in France in
1990. Prior thereto, he received an M.D. in 1988
from Faculte de Medicine de Paris and was a medical
doctor at Hospitaux De Paris in France until
November 1989. He is a director of Banner
Aerospace. Dr. Steiner became a director of TFC in
1988. He is the son of Jeffrey J. Steiner.
Jeffrey J. Steiner Chairman of the Board and the Chief Executive
Officer of TFC since December 1985, and as
President of TFC since July 1, 1991. Mr. Steiner
also served as President of TFC from November 1988
until January 1990. He has served as the Chairman
of the Board, the Chief Executive Officer and
President of Banner Aerospace since September 1993.
He served as the Vice Chairman of the Board of
Rexnord Corporation from July 1992 to December
1993. He has served as the Chairman, President, and
the Chief Executive Officer of Fairchild Industries
-2-
<PAGE>
<PAGE>
Title, Present Principal Occupation,
Name Five Year Employment History and Business Addresses
- ---- ---------------------------------------------------
since July 1991 and of RHI since 1988. Mr. Steiner
is and for the past five years has been President
of Cedco Holdings Ltd., a Bermuda corporation (a
securities investor). He serves as a director of
The Franklin Corporation and The Copley Fund. He
became a director of TFC in 1985. He is the father
of Dr. Eric I. Steiner.
Mel D. Borer Vice President of TFC since September 1993. Mr.
Borer has also served as Vice President of
Fairchild Industries since 1991 and as President of
Fairchild Communications Services Company since
1989.
Robert D. Busey Vice President of TFC since September 1992.
Mr. Busey has also served as Vice President of
Fairchild Industries since November 1993. Prior to
September 1992, Mr. Busey was Assistant Vice
President of TFC and held other management
positions with Fairchild Industries.
Christopher Colavito Vice President and Controller of TFC since November
1990. Mr. Colavito also has served as Vice
President and Controller of Fairchild Industries
since August 1989. Prior thereto, Mr. Colavito, who
is a Certified Public Accountant, was Assistant
Controller of Fairchild Industries and held other
financial management positions with Fairchild
Industries.
John L. Flynn Senior Vice President, Tax of TFC since September
1994 and as Vice President, Tax since August 1989.
Mr. Flynn also has served as Vice President, Tax of
Fairchild Industries since November 1986.
Harold R. Johnson Brig. Gen., USAF (Ret.), has served as Senior Vice
President, Business Development of TFC since
November 1990. General Johnson has also served as
Vice President of Fairchild Industries since
February 1988.
Robert H. Kelley Vice President, Employee Benefits of TFC since
November 1993. He also has served as Vice President
of Fairchild Industries since November 1993. Prior
thereto, he held other management positions with
Fairchild Industries.
Donald E. Miller Senior Vice President and General Counsel of TFC
since January 1991 and Corporate Secretary since
January 1995. Mr. Miller also has served as Vice
President and General Counsel of Fairchild
Industries since November 1991. Prior to 1991,
Mr. Miller was a principal of the law firm of
Temkin & Miller, Ltd. in Providence, Rhode Island.
-3-
<PAGE>
<PAGE>
Title, Present Principal Occupation,
Name Five Year Employment History and Business Addresses
- ---- ---------------------------------------------------
Karen L. Schneckenburger Vice President of TFC since September 1992 and as
Treasurer of TFC since November 1991. Ms.
Schneckenburger also has served as Treasurer of
Fairchild Industries since August 1989. Prior
thereto, she served as Director of Finance of
Fairchild Industries from 1986 through 1989.
-4-
<PAGE>
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF RHI HOLDINGS, INC.
The names, titles, present principal occupation, five year employment
history and business addresses of each of the directors and executive officers
of RHI are set forth below. The business address of each of the directors and
executive officers of RHI with respect to positions, offices or employment with
RHI is 300 West Service Road, Chantilly, VA 22021. All directors and officers
listed below are citizens of the United States, with the exception of Jeffrey J.
Steiner, Chairman of the Board, Chief Executive Officer and President of RHI who
is a citizen of Austria.
Title, Present Principal Occupation,
Name Five Year Employment History and Business Addresses
- ---- ---------------------------------------------------
Michael T. Alcox See "Directors and Executive Officers of The
Fairchild Corporation."
Frederick W. McCarthy See "Directors and Executive Officers of The
Fairchild Corporation."
Jeffrey J. Steiner See "Directors and Executive Officers of The
Fairchild Corporation."
John L. Flynn See "Directors and Executive Officers of The
Fairchild Corporation."
Donald E. Miller See "Directors and Executive Officers of The
Fairchild Corporation."
Karen L. Schneckenburger See "Directors and Executive Officers of The
Fairchild Corporation."
Robert D. Busey See "Directors and Executive Officers of The
Fairchild Corporation."
Irving Levine Director since 1989. Mr. Levine is President and
Chairman of the Board of Directors of the Copley
Fund, Inc. (a management investment company), and
has been a director, consultant and employee of
investment companies and investment advisory firms
for approximately 25 years. He serves as a director
of the Franklin Corporation.
-5-
<PAGE>
EXHIBIT C
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER dated as of
February 2, 1996 ("First Amendment") is made by and among Fairchild Industries,
Inc., a Delaware corporation ("Fairchild"), RHI Holdings, Inc., a Delaware
corporation ("RHI"), The Fairchild Corporation, a Delaware corporation ("TFC"),
and Shared Technologies Inc., a Delaware corporation ("Shared Technologies"),
amending certain provisions of the Agreement and Plan of Merger dated as of
November 9, 1995, including the exhibits and schedules thereto (the "Merger
Agreement") by and among Fairchild, RHI, TFC and Shared Technologies. Terms not
otherwise defined herein which are defined in the Merger Agreement shall have
the same respective meanings herein as therein.
WHEREAS, Fairchild, RHI, TFC and Shared Technologies have agreed to
modify certain terms and conditions of the Merger Agreement as specifically set
forth in this First Amendment.
NOW THEREFORE, in consideration of the premises and mutual agreements
contained herein and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
AMENDMENTS TO MERGER AGREEMENT
1.1 References to the distribution of shares of Shared Technologies
Cellular Inc. shall be deleted from sections 5.7(b) and 7.1(c) and in Section
5.5 of the Disclosure Statement.
1.2 Section 6.19 of the Merger Agreement is hereby amended by deleting
the provisions of clause (ii) thereof and by inserting therefor the following:
"(ii) all material Taxes of Fairchild and its subsidiaries in respect
of the pre-Merger period (including but not limited to Taxes
attributable to the Fairchild Reorganization) have been paid in full to
the proper authorities, other than such Taxes as are being contested in
good faith by appropriate proceedings and/or are adequately reserved
for in accordance with generally accepted accounting principles;
1.3 The first sentence of Section 8.1(c) of the Merger Agreement is
hereby deleted in its entirety.
1.4 The last sentence of Section 8.2(a) of the Merger Agreement is
hereby deleted in its entirety and replaced with the following:
"Shared Technologies shall cause Shared Technologies Cellular, Inc.
("STCI") to enter into an agreement preventing STCI from competing in
the telecommunications systems and service business."
1.5 Section 9.1(f) shall be amended to state "43.5" in place of "47.5".
1.6 Schedule 9.1 shall be amended to replace the reference to
"Recapitalization" with "Reorganization."
1.7 Section 9.2(d) of the Merger Agreement and Schedule 9.2(d) of the
Merger Agreement shall be deleted in their entirety.
1.8 Schedule 9.2(e) shall be amended by adding to the end thereof the
following:
"(h) Article III, Section 20 shall be amended to include the
following language at the end of such section:
"; provided that in no event shall the board authorize or permit to
be issued any preferred or special class of shares which are
entitled to more than one vote per share or authorize or permit to
<PAGE>
be issued any additional shares of the Corporation's Series C
Preferred Stock, in each case without the affirmative vote of 80%
of the directors."
1.9 Section 9.2(i) is hereby deleted in its entirety and replaced with
the following:
"STCI shall have executed a non-competition agreement with Shared
Technologies in form and substance satisfactory to Fairchild."
1.10 The "and" at the end of Section 9.3(d) of the Merger Agreement
shall be deleted.
1.11 The following is added as new Section 9.3(e) of the Merger
Agreement and existing Section 9.3(e) of the Merger Agreement is renumbered as
ss.9.3(f):
"(e) TFC and RHI shall have entered into a Tax Sharing Agreement
with Shared Technologies in the form of Exhibit E hereto; and
1.12 The reference to the entities "D-M-E, Inc." and B-3 and the
"Fairchild Fasteners, Inc." in Section 9.3(f) (formerly Section 9.3(e)) of the
Merger Agreement shall be deleted and replaced with the entity "Fairchild
Holding Corp." and the reference to ""B1-3" shall be replaced by "B-1 and B-2."
1.13 Section 10.1(c) shall be deleted in its entirety and replaced with
the following:
"by either Fairchild or Shared Technologies if the Effective Time has
not occurred on or prior to March 8, 1996 or such other date, if any,
as Fairchild and Shared Technologies shall agree upon, unless the
absence of such occurrence shall be due to the failure of the party
seeking to terminate this Agreement (or its subsidiaries or affiliates)
to perform in all material respects each of its obligations under this
Agreement required to be performed by it at or prior to the Effective
Time."
ARTICLE II
AMENDMENTS TO INDEMNIFICATION AGREEMENTS
(EXHIBITS B-1 through B-3)
2.1 The first sentence of Section 1 of the Indemnification Agreement
set forth as Exhibit B-1 to the Merger Agreement is hereby amended by adding the
clause "and including all Taxes (including but not limited to Taxes related to
the Fairchild Reorganization)" after the first reference to "Merger Agreement"
therein.
2.2 The first sentence of Section 1 of the Indemnification Agreement
set forth as Exhibit B-2 to the Merger Agreement is hereby amended by adding the
clause "and including all Taxes (including but not limited to Taxes related to
the Fairchild Reorganization)" after the reference to "Merger Agreement"
therein.
2.3 All references to "Fairchild Recapitalization" in the
Indemnification Agreements set forth as Exhibits B-1 and B-2 to the Merger
Agreement are hereby deleted and replaced with the defined term "Fairchild
Reorganization."
2.4 All references to the entity "Fairchild Fasteners, Inc." in the
Indemnification Agreement set forth as Exhibit B-2 to the Merger Agreement are
hereby deleted and replaced with the entity "Fairchild Holding Corp." and all
references to the defined term "Fasteners" in the Indemnification Agreement set
forth as Exhibit B-2 to the Merger Agreement are hereby deleted and replaced
with the defined term "FHC".
2.5 All references to "Shared Technologies" in Section 1 of the
Indemnification Agreements set forth as Exhibits B-1 and B-2 shall include, and
shall be deemed to include for all purposes set forth in Section 1, all
subsidiaries of Shared Techologies Inc.
2.6 Exhibit B-3 shall be deleted in its entirety.
<PAGE>
<PAGE>
ARTICLE III
AMENDMENTS TO PLEDGE AGREEMENT
(EXHIBIT C)
3.1 The Pledge Agreement as set forth as Exhibit C to the Merger
Agreement is amended by deleting all references to D-M-E Inc. and Fairchild
Fasteners, Inc. and substituting therefor "Fairchild Holding Corp."
ARTICLE IV
AMENDMENTS TO TAX SHARING AGREEMENT
(EXHIBIT E)
4.1 The Tax Sharing Agreement as set forth as Exhibit E to the Merger
Agreement is hereby deleted and the Tax Sharing Agreement as attached hereto as
Exhibit E (Restated) is substituted therefor.
ARTICLE V
PROVISIONS OF GENERAL APPLICATION
5.1 Except as otherwise expressly provided by this First Amendment, all
of the terms, conditions and provisions to the Merger Agreement remain
unaltered. The Merger Agreement and this First Amendment shall be read and
construed as one agreement.
5.2 If any of the terms of this First Amendment shall conflict in any
respect with any of the terms of the Merger Agreement, the terms of this First
Amendment shall be controlling.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be executed by their duly authorized officers all as of the day and year
first above written.
SHARED TECHNOLOGIES INC. THE FAIRCHILD CORPORATION
By:__________________________ By:____________________________
Vincent DiVincenzo
Senior Vice President-Finance
and Administration, Treasurer
and Chief Financial Officer
FAIRCHILD INDUSTRIES, INC. RHI HOLDINGS, INC.
By:__________________________ By____________________________
ACCEPTED AND AGREED TO BY:
FAIRCHILD HOLDING CORP.
By:__________________________
-3-
<PAGE>
EXHIBIT D
SECOND AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER dated as of
February 23, 1996 ("Second Amendment"), is made by and among Fairchild
Industries, Inc., a Delaware corporation ("Fairchild"), RHI Holdings, Inc., a
Delaware corporation ("RHI"), The Fairchild Corporation, a Delaware corporation
("TFC"), and Shared Technologies Inc., a Delaware corporation ("Shared
Technologies"), amending certain provisions of the Agreement and Plan of Merger
dated as of November 9, 1995, as amended by the First Amendment to the Agreement
and Plan of Merger dated as of February 2, 1996, including the exhibits and
schedules thereto (the "Merger Agreement") by and among Fairchild, RHI, TFC and
Shared Technologies. Terms not otherwise defined herein which are defined in the
Merger Agreement shall have the same respective meanings herein as therein.
WHEREAS, Fairchild, RHI, TFC and Shared Technologies have agreed to
modify certain terms and conditions of the Merger Agreement as specifically set
forth in this Second Amendment.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
AMENDMENTS TO MERGER AGREEMENT
1.1 The following shall be added as a new final paragraph to Schedule
3.1(b) to the Merger Agreement, "Summary of Terms of Special Preferred Stock":
"The terms of the Special Preferred Stock will provide, or Fairchild,
RHI and Shared Technologies shall enter into an agreement giving,
Shared Technologies the option to extend the final maturity of the
Special Preferred Stock from March 31, 2007, to March 31, 2008. If such
option is exercised, Shared Technologies will pay a dividend to the
holders of the Special Preferred Stock at the same rate payable on the
Senior Discount Notes due 2006 to be issued by a subsidiary of the
Surviving Corporation in connection with the Merger, calculated on the
outstanding liquidation preference of the Special Preferred Stock. Such
dividend shall accrue from March 31, 2007, and be payable quarterly
beginning June 30, 2007."
1.2 Section 6.7(a) of the Merger Agreement is amended by adding "(the
'Closing Date Balance Sheet')," after the words "Effective Date" on the last
<PAGE>
<PAGE>
line of such section, such that such line reads as follows:
"......gies on the Effective Date (the "Closing Date Balance Sheet"),
is at least $80,000,000);........ ."
1.3 Section 6.7(b) of the Merger Agreement is amended in its entirety
to read as follows:
"(b) except as contemplated by Schedule 9.1 and except for the
assignment to RHI by Fairchild of Fairchild's receivables (the
"Permitted Receivables Assignment"), in an amount of $9,000,000,
there has not been any direct or indirect redemption, purchase
or other acquisition of any shares of capital stock of Fairchild
or any of its subsidiaries, or any declaration, setting aside or
payment of any dividend or other distribution by Fairchild or
any of its subsidiaries in respect of their capital stock;
provided that the Permitted Receivables Assignment shall not
reduce the net worth of Fairchild to less than $80,000,000.
Notwithstanding the foregoing, if the Effective Time shall not
have occurred on or prior to March 15, 1996, the amount of the
Permitted Receivables Assignment shall be increased to the
maximum amount which would not cause the net worth of Fairchild,
as evidenced by the Closing Date Balance Sheet, to be less than
$80,000,000. Within 90 days of the Closing Date, Arthur
Andersen, L.L.P. will prepare and deliver to the parties an
audited balance sheet of Fairchild as of the Closing Date (the
"Audited Balance Sheet"). In the event that the net worth of
Fairchild, as shown on the Audited Balance Sheet, (x) is less
than $80,000,000, Fairchild shall pay to Shared Technologies an
amount in cash equal to such difference or (y) is more than
$80,000,000, Shared Technologies shall pay to Fairchild an
amount in cash equal to such difference; provided that no such
cash payment, when taken together with the amount of receivables
assigned to RHI by Fairchild pursuant to this paragraph, shall
be required in an amount greater than the amount of the
Permitted Receivables Assignment."
1.4 The following shall be added as a new Section 8.12 of the Merger
Agreement:
"8.12 Post-Merger Sale of Shared Technologies Cellular, Inc. RHI agrees
that if, within 150 days of the Effective Time, the Surviving
Corporation shall receive cash proceeds from the sale of its interest,
as of this date, in STCI, then RHI shall contribute to the Surviving
Corporation, a sum equal to 40% of such cash proceeds received by the
Surviving Corporation, up to a maximum contribution of $1,600,000."
<PAGE>
<PAGE>
1.5 Section 10.1(c) of the Merger Agreement is hereby amended by
deleting the date "March 8, 1996," and inserting the date "March 15, 1996," in
lieu thereof.
1.6 Section 10.1(d) shall be amended by deleting the words "..., at the
Special Meeting of (including any adjournment thereof)," and adding at the end
of such section the words "on or before March 4, 1996". ARTICLE II
AMENDMENTS TO THE TAX SHARING AGREEMENT
(EXHIBIT E)
2.1 The parties hereto agree to amend The Tax Sharing Agreement as set
forth as Exhibit E to the Merger Agreement to provide for the following
language:
(i) Notwithstanding any other representation in the Merger Agreement or
in the Tax Sharing Agreement, TFC and RHI make no representation or warranty as
to (i) the amount of any net operating loss and tax credits of the TFC Group
allocable to FII or VSI at the Effective Date as a result of the operations of
FII and VSI prior to the Effective Date; and (ii) the amount of any reduction in
tax payable by Shared Technologies due to utilization of any net operating loss
or tax credit of the TFC Group allocable to FII and VSI as a result of the
operations of FII and VSI prior to the Effective Date.
(ii) Notwithstanding any other provision of the Tax Sharing Agreement,
Shared Technologies shall not share with TFC and RHI any reduction in the tax
payment of Shared Technologies as a result of Shared Technologies utilizing any
net operating losses or tax credits of the TFC Group allocable to FII or VSI at
the Effective Date or as a result of operations of FII and VSI prior to the
Effective Date.
ARTICLE III
PROVISIONS OF GENERAL APPLICATION
3.1 Except as otherwise expressly provided by this Second Amendment,
all of the terms, conditions and provisions to the Merger Agreement remain
unaltered. The Merger Agreement and this Second Amendment shall be read and
construed as one agreement.
3.2 If any of the terms of this Second Amendment shall conflict in any
respect with any of the terms of the Merger Agreement, the terms of this Second
Amendment shall be controlling.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed by their duly authorized officers, all as of the day
and year first above written.
SHARED TECHNOLOGIES INC. THE FAIRCHILD CORPORATION
By:/s/Anthony D. Autorino By:/s/Donald E. Miller
Anthony D. Autorino Donald E. Miller
Chief Executive Officer Senior Vice President
FAIRCHILD INDUSTRIES, INC. RHI HOLDINGS, INC.
By:/s/Donald E. Miller By:/s/Donald E. Miller
Donald E. Miller Donald E. Miller
Vice President Vice President
ACCEPTED AND AGREED TO BY:
FAIRCHILD HOLDING CORP.
By:/s/Donald E. Miller
Donald E. Miller
Vice President
<PAGE>
EXHIBIT E
THIRD AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This THIRD AMENDMENT TO AGREEMENT AND PLAN OF MERGER dated as of March
1, 1996 ("Third Amendment"), is made by and among Fairchild Industries, Inc., a
Delaware corporation ("Fairchild"), RHI Holdings, Inc., a a Delaware corporation
("RHI"), The Fairchild Corporation, a Delaware corporation ("TFC"), and Shared
Technologies Inc., a Delaware corporation ("Shared Technologies"), amending
certain provisions of the Agreement and Plan of Merger dated as of November 9,
1995, as amended by the First Amendment to Agreement and Plan of Merger dated as
of February 2, 1996 (the "First Amendment"), as further amended by the Second
Amendment to Agreement and Plan of Merger dated as of February 23, 1996 (the
"Second Amendment"), including the exhibits and schedules thereto (the Agreement
and Plan of Merger, as amended by the First Amendment and the Second Amendment,
are referred to collectively herein as the "Merger Agreement") by and among
Fairchild, RHI, TFC and Shared Technologies. Terms not otherwise defined herein
which are defined in the Merger Agreement shall have the same respective
meanings herein as therein.
WHEREAS, Fairchild, RHI, TFC and Shared Technologies have agreed to
modify certain terms and conditions of the Merger Agreement as specifically set
forth in this Third Amendment.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
AMENDMENTS TO MERGER AGREEMENT
1.1 The Merger Agreement hereby is amended by deleting therefrom in its
entirety Section 1.1 of the Second Amendment.
1.2 Section 10.1(d) of the Merger Agreement (as amended by Section 1.6
of the Second Amendment) hereby is amended by deleting the words "on or before
March 4, 1996", and adding the words "on or before March 13, 1996" at the end of
such section.
1.3 Section 6.7(b) of the Merger Agreement (as amended by Section 1.3
of the Second Amendment) hereby is amended by deleting clauses (x) and (y)
therefrom in their entirety (but not deleting the proviso following such
clauses), and substituting therefor the following: "(x) is less than
$80,000,000, TFC shall pay to Shared Technologies an amount in cash equal to
such difference or (y) is more than $80,000,000 Shared Technologies shall pay to
TFC an amount in cash equal to such difference;".
<PAGE>
<PAGE>
ARTICLE II
PROVISIONS OF GENERAL APPLICATION
2.1 Except as otherwise expressly provided by this Third Amendment, all
of the terms, conditions and provisions to the Merger Agreement remain
unaltered. The Merger Agreement and this Third Amendment shall be read and
construed as one agreement.
2.2 If any of the terms of this Third Amendment shall conflict in any
respect with any of the terms of the Merger Agreement, the terms of this Third
Amendment shall be controlling.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be executed by their duly authorized officers, all as of the day and year
first above written.
SHARED TECHNOLOGIES INC. THE FAIRCHILD CORPORATION
By:____________________________ By:___________________________
FAIRCHILD INDUSTRIES, INC. RHI HOLDINGS, INC.
By:____________________________ By:___________________________
ACCEPTED AND AGREED TO BY:
FAIRCHILD HOLDING CORP.
By:____________________________
<PAGE>
EXHIBIT F
___________________________________________________________________________
___________________________________________________________________________
SHAREHOLDERS' AGREEMENT
among
SHARED TECHNOLOGIES INC.
RHI HOLDINGS, INC.
and
ANTHONY D. AUTORINO
___________________________________________________________________________
___________________________________________________________________________
<PAGE>
SHAREHOLDERS' AGREEMENT
This SHAREHOLDERS' AGREEMENT (this "Agreement") is executed on
March 13, 1996, by and among Shared Technologies Inc., a Delaware
corporation (the "Company"), RHI Holdings Inc. ("RHI") and Anthony D.
Autorino, shareholders of Shared Technologies Inc. (RHI and Anthony D.
Autorino and their respective legal representatives, successors and assigns
are referred to herein individually as a "Shareholder" and collectively as
the "Shareholders").
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger
dated as of November 9, 1995, as amended (the "Merger Agreement") among the
Company, The Fairchild Corporation, RHI and RHI's subsidiary, Fairchild
Industries, Inc. ("FII"), FII is merging with and into the Company (the
"Merger");
WHEREAS, each Shareholder owns as of the date hereof (after
giving effect to the Merger) the number of shares of common stock, $.004
par value per share ("Common Stock"), of the Company set forth opposite
such Shareholder's name on Schedule I;
WHEREAS, the shares of Common Stock owned by the Shareholders
represent approximately 47% of the issued and outstanding Common Stock of
the Company;
WHEREAS, the Shareholders and the Company deem it to be in their
respective best interests to impose certain restrictions on, and to provide
for certain rights and obligations in respect of, the shares of Common
Stock owned by them or any interest therein, now or hereafter held by the
Shareholders or the Company;
NOW, THEREFORE, in consideration of the mutual promises,
covenants, agreements and conditions made herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and accepted, the parties hereto hereby agree as follows:
ARTICLE I RESTRICTIONS ON TRANSFERS AND
PURCHASES BY THE SHAREHOLDERS
1.1. General Restrictions.
(a) No share of Common Stock, Convertible Preferred Stock, any
other capital stock or equity security (excluding the Special Preferred
Stock) of the Company or any interest in any of the foregoing, owned as of
the date hereof (beneficially or otherwise) by any Shareholder (the
"Shares") shall be sold, assigned, donated or transferred in any manner
(collectively, a "Transfer"), except in accordance with this Agreement;
provided, that the pledge or grant of a security interest in Shares, and
any subsequent foreclosure thereof and sale or transfer resulting from such
foreclosure, effected in good faith in a bona fide transaction with
<PAGE>
andddddds institutional lender, shall not constitute a Transfer and shall
not be prevented by the terms of this Agreement.
(b) Except for (i) Common Stock issuable upon conversion of
Convertible Preferred Stock, or exercise of stock options, (ii) shares of
Common Stock issued by the Company to RHI to satisfy indemnification
obligations of the Company under the Merger Agreement and (iii) shares of
Common Stock issued as a dividend or distribution to shareholders of the
Company, no Shareholder shall purchase or acquire, directly or indirectly,
any additional shares of Common Stock during the two-year period following
the date of this Agreement without the prior approval of not less than 80%
of the members of the Board of Directors of the Company.
(c) Except for Transfers permitted by Section 1.2, no
Shareholder shall Transfer any Shares during the two-year period following
the date of this Agreement without the prior approval of not less than 80%
of the members of the Board of Directors and full compliance with the
Securities Act of 1933, as amended (the "Act"), and any applicable state
securities laws. If the Board of Directors approves a Transfer within such
two-year period after the date of this Agreement, the conditions of this
Agreement, including, but not limited to this Article I, must be met.
Every Transfer of Shares by a Shareholder pursuant to this paragraph shall
be subject to the condition that the proposed transferee, if not already
bound by this Agreement, shall first agree in writing, in form satisfactory
to the Company, to be bound by the terms hereof.
1.2. Certain Permitted Transfers.
(a) Notwithstanding any other provision of this Agreement,
either Shareholder may, at any time following notice to the other
Shareholder, Transfer any of his or her Shares or any interest therein to
(i) an entity that is directly or indirectly controlled by such Shareholder
or an affiliate of such Shareholder, (ii) his or her spouse, children,
grandchildren or parents or a trust solely for the benefit of any such
person or persons or (iii) to any other person not mentioned in clauses (i)
and (ii) of this Section 1.2(a) as long as the aggregate of all such
Transfers made by either Shareholder pursuant to this clause (iii) does not
exceed 10% of the number of shares of Common Stock owned by such
Shareholder as of the date of this Agreement, in each case without the
consent of any other party hereto and without first offering such Shares to
any other party; provided, however, that such Transfer must be in full
compliance with the Act, all applicable state securities laws. Every
Transfer of Shares by a Shareholder pursuant to clauses (i) and (ii) of
this paragraph shall be subject to the condition that the proposed
transferee, if not already bound by this Agreement, shall first agree in
writing, in form satisfactory to the Company, to be bound by the terms
hereof.
In addition, notwithstanding any other provision of this
Agreement, shares of Common Stock, Convertible Preferred Stock or other
<PAGE>
capital stock or equity securities of the Company acquired by either
Shareholder after the date of this Agreement (other than through the
exercise of options or warrants or through the conversion of convertible
securities outstanding as of the date hereof and other than shares received
as a result of stock splits or stock dividends) shall not be subject to any
of the provisions of Article I of this Agreement.
1.3. First Negotiation Rights.
Subject to Sections 1.4 and 1.5, following the expiration of the
two-year period after the date of this Agreement, a Shareholder may
Transfer any or all Shares (or any interest therein) owned by it free and
clear of all restrictions and other obligations imposed by this Agreement
provided such Shareholder first complies with Section 1.3. If any
Shareholder (for purposes of this Section 1.3, the "Offering Party")
desires to Transfer all or any portion of the Shares (or any interest
therein) held by such Offering Party, the Offering Party shall deliver
written notice to the other parties hereto (the "Notice"), which Notice
shall state the number of Shares (or interest therein) which the Offering
Party owns and wishes to sell (the "Offered Shares"). By giving the
Notice, the Offering Party shall be deemed to have granted to the other
parties hereto an option to negotiate for the purchase of all of (but not
less than all of) such shares at a price to be negotiated and agreed to
(the "Negotiated Price") by the Offering Party and such other Shareholder
for a 30-day period following the date of the Notice.
1.4. Take-Along Rights.
(a) Notwithstanding Section 1.3 of this Agreement, neither
Shareholder may effect a Transfer (or a series of related Transfers) of
Shares (except for Transfers permitted by Section 1.2) constituting more
than 50% of the Shares then owned by such Shareholder to one person or a
related group of persons (other than Transfers effected by sales of Shares
through underwriters in a public offering or in the securities markets
generally) (the "Section 1.4 Shares") without first complying with this
Section 1.4. If either Shareholder (for purposes of this Section 1.4, the
"Section 1.4 Offering Party") desires to Transfer the Section 1.4 Shares,
such shareholder shall give written notice (the "Take-Along Notice") to the
other Shareholder (the "Non-Selling Shareholder") stating (i) the name and
address of the transferee (the "Non-Qualified Transferee"), and (ii) the
price and terms upon which the Non-Qualified Transferee proposes to
purchase the Section 1.4 Shares. The Non-Selling Shareholder shall have
the irrevocable and exclusive option, but not the obligation (the
"Take-Along Option"), to sell to the Non-Qualified Transferee, up to such
number of Shares proposed to be sold by the Section 1.4 Offering Party (the
"Included Shares") determined in accordance with Section 1.4(b), at the
price and on the terms set forth in the Take-Along Notice. The Take-Along
Option shall be exercised by the Non-Selling Shareholder by giving written
notice to the Section 1.4 Offering Party, within ten business days of
receipt of the Take-Along Notice, indicating its election to exercise the
<PAGE>
Take-Along Option (the "Participating Shareholder"). Failure by such
Non-Selling Shareholder to give such notice within the ten business day
period shall be deemed an election by such Non-Selling Shareholder not to
sell its Shares pursuant to that Take-Along Notice. The closing with
respect to any sale to a Non-Qualified Transferee pursuant to this Section
shall be held at the time and place specified in the Take-Along Notice but
in any event within 30 days of the date the Take-Along Notice is given;
provided, that if through the exercise of reasonable efforts the Section
1.4 Offering Party is unable to cause such transaction to close within 30
days, such period may be extended for such reasonable period of time as may
be necessary to close such transaction. Consummation of the sale of Shares
by the Section 1.4 Offering Party to a Non-Qualified Transferee shall be
conditioned upon consummation of the sale by the Participating Shareholder
to such Non-Qualified Transferee of the Included Shares, if any.
(b) The number of Shares purchased from the Participating
Shareholder shall be determined by multiplying the number of Shares
proposed to be purchased from the Section 1.4 Offering Party by a
Non-Qualified Transferee by a fraction, the numerator of which is the total
number of Shares owned by the Participating Shareholder and the denominator
of which is the sum of the total number of Shares owned by the Section 1.4
Offering Party and the Participating Shareholder.
(c) The Section 1.4 Offering Party shall arrange for payment
directly by the Non-Qualified Transferee to the Participating Shareholder,
upon delivery of the certificate or certificates representing the Shares
duly endorsed for transfer, together with such other documents as the
Non-Qualified Transferee may reasonably request. The reasonable costs and
expenses incurred by the Section 1.4 Offering Party and the Participating
Shareholder in connection with a sale of Shares subject to this Section 1.4
shall be allocated pro rata based upon the number of Shares sold by each
Shareholder to a Non-Qualified Transferee.
(d) If at end of 30 days following the date on which a
Take-Along Notice was given, the sale of Shares by the Section 1.4 Offering
Party and the sale of the Included Shares have not been completed in
accordance with the terms of the Non-Qualified Transferee's offer, all
certificates representing the Included Shares shall be returned to the
Non-Selling Shareholder, and all the restrictions on transfer contained in
this Agreement with respect to Shares owned by the Section 1.4 Offering
Party shall again be in effect.
1.5. Right of First Refusal.
(a) Notwithstanding Section 1.3 of this Agreement, if at any
time following the expiration of the two-year period after the date of this
Agreement, either Shareholder receives an offer (or related series of
offers) (an "Offer") from any person or related group of persons to
purchase a number of Shares equal to 10% or more of the outstanding Shares
of the Company (the "Section 1.5 Shares") and such Shareholder desires to
<PAGE>
accept the Offer, (the "Selling Shareholder") shall give written notice of
its intent to accept the Offer (a "Transfer Notice") to the other
Shareholder (the "Section 1.5 Non-Selling Shareholder"). Such notice shall
contain a true and complete description of the Offer (including a copy
thereof) containing (i) the Shares subject to such Offer, (ii) the proposed
purchase price, (iii) the identity of the person or group making the Offer
and, if known by the Selling Shareholder, whether they are an agent for
another party and (iv) all other material terms and conditions of the
Offer.
The Section 1.5 Non-Selling Shareholder shall have the right, but
not the obligation, to purchase the Shares subject to the Offer (the "First
Option") on the same terms and conditions as set forth in such notice,
which option shall be exercised by delivering to the Selling Shareholder
written notice of its commitment to purchase the Shares subject to the
Offer within five business days after receipt of the Transfer Notice (the
"Option Period"). Failure by the Section 1.5 Non-Selling Shareholder to
give such notice within such five-business-day period shall be deemed an
election by such Section 1.5 Non-Selling Shareholder not to purchase the
Section 1.5 Shares.
(b) The purchase of any Shares pursuant to the exercise of the
First Option shall be completed not later than 45 days following delivery
of the Transfer Notice with respect to such Shares. In the event that the
First Option is not exercised, the Selling Shareholder shall have the right
for a period of 45 days after the termination of the Option Period to
transfer the Shares subject to such Offer to the person named in the
Transfer Notice and on terms and conditions no less favorable to the
Selling Shareholder than those set forth in the Transfer Notice.
(c) This Section 1.5 shall not be applicable with respect to
Transfers of Shares effected through underwriters in a public offering or
in the securities markets generally or Transfers permitted under
Section 1.2.
ARTICLE II LEGEND
In addition to any other legend required by applicable law, all
certificates representing Shares owned by any Shareholder (other than
Shares subject to Section 1.2(a)(iii)), or their permitted transferees,
shall bear legend number (1) to assure the enforceability of this Agreement
until such time as such shares are sold to a non-Shareholder after the two-
year period following the date of this Agreement in accordance with the
terms hereof. All certificates representing shares not registered under
the Act shall bear in addition to legend (1), legend (2):
(1) "THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED BY AN AGREEMENT ON FILE AT THE
OFFICES OF THE CORPORATION. THE CORPORATION WILL FURNISH A
COPY OF SUCH AGREEMENT TO THE RECORD HOLDER OF THIS INSTRUMENT
<PAGE>
WITHOUT CHARGE ON REQUEST TO THE CORPORATION AT ITS PRINCIPAL
PLACE OF BUSINESS OR REGISTERED OFFICE."
(2) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
OR AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
SUCH ACT OR SUCH LAWS AND THE COMPANY MAY REQUIRE AN OPINION
OF COUNSEL WITH RESPECT TO SUCH EXEMPTION."
ARTICLE III VOTING COVENANTS
(a) The Company and the Shareholders agree to take all actions
necessary to cause the Board of Directors of the Company to consist at all
times of eleven directors (subject to the rights of any holders of
Preferred Stock of the Company to elect directors in the event of a
dividend arrearage). The nominees to the Board of Directors shall be
determined in the following manner: the Shareholders (other than RHI)
shall nominate seven (7) members and RHI shall nominate four (4) members;
provided, that so long as Mel D. Borer shall be the President of the
Company, the Shareholders and the Company will take all actions necessary
to elect Mr. Borer as a member of the Board of Directors and during such
time as Mr. Borer is the President and a Director RHI shall only be
entitled to nominate three (3) members. In the event that any Shareholder
reasonably objects to the nomination of any particular person or persons as
a director, the Shareholder who nominated such person or persons shall
withdraw such nomination and nominate another person or persons in
replacement thereof.
(b) Each Shareholder shall, in any election for the Company's
Board of Directors, vote to cause the nominee or nominees of each party
listed in this section to be elected to the Board of Directors of the
Company. Each Shareholder shall cause the holder of any proxy given by
such Shareholder to comply with this Article III.
(c) Should any director elected to the Board be removed, become
incapacitated, or die (the "Affected Director") the shareholder or party
which nominated the Affected Director shall have the right to designate a
replacement director to complete the term of the Affected Director on the
Board of Directors of the Company.
(d) The Company and the Shareholders agree to take all actions
necessary to cause the Executive Committee of the Board of Directors to
consist of Anthony D. Autorino, who shall be Chairman and Chief Executive
Officer of the Company, the President and Chief Operating Officer of the
Company (who initially shall be Mel D. Borer) and Jeffrey J. Steiner (or
another person designated by RHI), who shall be Vice-Chairman of the
Company.
<PAGE>
ARTICLE IV MISCELLANEOUS
4.1. Termination. This Agreement, and all rights and
obligations of each party hereto, shall terminate upon (i) agreement of all
of the Shareholders and the Company, (ii) the voluntary or involuntary
dissolution of the Company, (iii) the sale of all or substantially all of
the assets of the Company, (iv) when either Shareholder and its affiliates
own less than 25% of the shares of Common Stock (including options to
purchase shares of Common Stock) owned by such Shareholder on the date of
this Agreement (adjusted accordingly for any stock splits or stock
dividends by the Company after the date hereof) or (v) on the date that
Anthony D. Autorino is no longer the Chief Executive Officer of the
Company.
4.2. Further Assurances. Each party hereto shall do and perform
or cause to be done and performed all such further acts and things and
shall execute and deliver all such other agreements, certificates,
instruments and documents as any other party hereto reasonably may request
in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.
4.3. Severability. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future law,
and if the rights or obligations of the parties under this Agreement would
not be materially and adversely affected thereby, such provision shall be
fully separable, and this Agreement shall be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part
thereof, the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance therefrom, and in lieu of such
illegal, invalid or unenforceable provision, there shall be added
automatically as a part of this Agreement, a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible, and the parties hereto request the court or
any arbitrator to whom disputes relating to this Agreement are submitted to
reform the otherwise illegal, invalid or unenforceable provision in
accordance with this Section 4.3.
4.4. Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the transactions contemplated
hereby and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
4.5. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more of the counterparts
have been signed by each party and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
<PAGE>
4.6. Notices. All notices, consents, requests, instructions,
approvals and other communications provided for herein shall be validly
given, if in writing and delivered personally, by confirmed telecopy or
sent by registered mail, postage prepaid, to:
if to any Shareholder:
addressed to such Shareholder at the address set forth opposite
such Shareholders' name in Schedule I
if to the Company:
Shared Technologies Inc.
100 Great Meadow Road, Suite 104
Suite 104
Wethersfield, Connecticut 06109
Facsimile No.: (203) 258-2401
Attention: Legal Department
or to such other address as any party may, from time to time, designate in
a written notice given in a like manner, and any such notice or
communication shall be deemed to have been given on the fifth business day
after the date so sent, unless actually received earlier.
4.7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES
SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
4.8. Specific Performance. Each party hereto acknowledges that
monetary damages would not adequately compensate the other parties hereto
for the breach of this Agreement and that this Agreement shall therefore be
specifically enforceable, and any breach or threatened breach of this
Agreement shall be the proper subject of a temporary or permanent
injunction or restraining order. Further, each party hereto and its
successors, heirs, representatives and assigns waive any claim or defense
that there is an adequate remedy at law for such breach or threatened
breach.
4.9. Attorney's Fees. If attorneys' fees or other costs are
incurred to secure performance of any of the obligations herein provided
for, or to establish damages for the breach thereof, or to obtain any other
appropriate relief, whether by way of prosecution or defense, the
prevailing party or parties shall be entitled to recover reasonable
attorney's fees and costs incurred therein.
4.10. Waiver. No amendment or waiver of any provision of this
Agreement, nor consent to any departure therefrom, shall be effective
unless the same shall be in writing and signed by each party thereto, and
then such waiver or consent shall be effective only in a specific instance
<PAGE>
and for the specific purpose for which given. No failure on the part of a
party hereto to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise
of any right hereunder preclude any other or further exercise thereof or
the exercise of any other right. The remedies provided in this Agreement
are cumulative and not exclusive of any remedies provided by law.
4.11. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each party hereto and his or its
successors, heirs, representatives and permitted assigns. This Agreement
shall be binding upon and inure to the benefit of each individual signatory
hereto and his, her or its respective heirs, personal representatives and
assigns, and any receiver, trustee in bankruptcy or representative of the
creditors of each such person.
4.12. Person Defined. For purposes of this Agreement, "Person"
means all natural persons, corporations, business trusts, associations,
companies, partnerships, joint ventures, and other entities and governments
and agencies and political subdivisions.
4.13. After-Acquired Shares. Subject to Section 1.1(b),
whenever a Shareholder shall hereafter acquire any shares of Common Stock,
Convertible Preferred Stock or rights or options with respect thereto, such
shares so acquired shall be voted in accordance with the terms of Article
III of this Agreement but shall not otherwise be subject to any of the
other terms and conditions contained herein.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been signed by or on
behalf of each of the parties hereto, all as of the date first above
written.
SHARED TECHNOLOGIES INC.
By:/s/ Vincent DiVencenzo
-------------------------
Name:
Title:
RHI HOLDINGS, INC.
By:/s/ John Flynn
------------------------------
Name:
Title:
/s/ Anthony D. Autorino
---------------------------
Anthony D. Autorino
<PAGE>
SCHEDULE I
List of Shareholders
Common
Shareholder and Address Stock
RHI Holdings, Inc.
300 West Service Road
P.O. Box 10803
Chantilly, VA 22001 6,000,000
Anthony D. Autorino 786,118
c/o Shared Technologies Inc.
100 Great Meadow Road
Suite 104
Wethersfield, CT 06109
Total 6,786,118
<PAGE>
EXHIBIT G
___________________________________________________________________________
___________________________________________________________________________
REGISTRATION RIGHTS AGREEMENT
between
RHI HOLDINGS, INC.
THE FAIRCHILD CORPORATION
and
SHARED TECHNOLOGIES INC.
Dated March 13, 1996
___________________________________________________________________________
___________________________________________________________________________
<PAGE>
REGISTRATION RIGHTS AGREEMENT dated as of March 13, 1996, between
SHARED TECHNOLOGIES INC., a Delaware corporation (the "Company"), RHI
HOLDINGS, INC., a Delaware corporation ("RHI") and THE FAIRCHILD
CORPORATION, a Delaware corporation ("TFC").
WITNESSETH:
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of
November 9, 1995, as amended (the "Merger Agreement"), among the Company,
TFC, RHI and Fairchild Industries, Inc. ("Fairchild"), RHI has
obtained 6,000,000 shares of Common Stock shares of the Company, par value
$.004 (the "Common Stock").
WHEREAS, pursuant to the Agreement to Exchange 6% Cumulative
Convertible Preferred Stock and Special Preferred Stock dated as of
March 1, 1996 (the "Exchange Agreement") among the Company, TFC, RHI,
Fairchild and Fairchild Holding Company, RHI has obtained (i) 250,000
shares of Series I 6% Cumulative Convertible Preferred Stock par value $.01
(the "Convertible Preferred Stock"), of the Company and (ii) 200,000 shares
of Series J Special Preferred Stock, par value $.01 (the "Special Preferred
Stock" and, together with the Convertible Preferred Stock, the "Preferred
Stock").
WHEREAS, the Company desires to provide RHI and its successors
and assigns with certain rights regarding the registration of the Common
Stock and the Preferred Stock (including Common Stock issuable upon
conversion of the Convertible Preferred Stock and Common Stock issuable by
the Company to RHI to satisfy indemnification obligations of the Company
under the Merger Agreement).
NOW, THEREFORE, in consideration of the mutual covenants and
agreements made herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and accepted, the
parties hereto agree as follows:
1. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
"Affiliate" has the meaning set forth in Rule 12b-2 under the
Exchange Act (as in effect on the date of this Agreement), it being
understood that any limited partner of a partnership shall not be an
Affiliate of such partnership solely by virtue of its status as such a
limited partner.
"Commission" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the
Securities Act.
<PAGE>
"Common Stock" means the common stock of Shared Technologies
Inc., par value $.004.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, as the same shall be in effect at the time.
Reference to a particular section of the Securities Exchange Act of 1934,
as amended, shall include reference to the comparable section, if any, of
any such subsequent similar federal statute.
"Exchange Agreement" is defined in the Recitals.
"Merger Agreement" is defined in the Recitals.
"Person" means any individual, partnership, joint venture,
corporation, trust, unincorporated organization, government or department
or agency of a government.
"Preferred Stock" means, collectively, (i) the 6% Cumulative
Convertible Preferred Stock of the Company, par value $.01, issued pursuant
to the Exchange Agreement and (ii) the Special Preferred Stock of the
Company, par value $.01, issued pursuant to the Exchange Agreement.
"Registrable Common Securities" means the shares of Common Stock
(i) issued to RHI pursuant to the Merger Agreement, (ii) issued to RHI in
the future to satisfy indemnification obligations of the Company under the
Merger Agreement and (iii) issuable and issued upon conversion of any
shares of Convertible Preferred Stock. As to any particular Registrable
Common Securities, once issued such securities shall cease to be
Registrable Common Securities when (a) a registration statement with
respect to the sale of such securities shall have become effective under
the Securities Act and such securities shall have been disposed of in
accordance with such registration statement, (b) they shall have been sold
as permitted by, and in compliance with, Rule 144 (or successor provision)
promulgated under the Securities Act or (c) they shall have ceased to be
outstanding.
"Registrable Preferred Securities" means the shares of Preferred
Stock issued to RHI pursuant to the Exchange Agreement. As to any
particular Registrable Preferred Securities, once issued such securities
shall cease to be Registrable Preferred Securities when (a) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement, (b) they shall
have been sold as permitted by, and in compliance with, Rule 144 (or
successor provision) promulgated under the Securities Act or (c) they shall
have ceased to be outstanding.
"Registrable Securities" means collectively the Registrable
Common Securities and Registrable Preferred Securities and any other
securities issuable in connection therewith or in replacement thereof by
<PAGE>
way of a dividend, distribution, recapitalization, exchange, merger,
consolidation or other reorganization.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with Section 2, including, without
limitation, all registration, filing and National Association of Securities
Dealers, Inc. fees, all listing fees, all fees and expenses of complying
with securities or blue sky laws (including, without limitation, reasonable
fees and disbursements of counsel for the underwriters in connection with
blue sky qualifications of the Registrable Securities), all word
processing, duplicating and printing expenses, messenger and delivery
expenses, the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of "comfort" letters
required by or incident to such performance and compliance, and any fees
and disbursements of underwriters customarily paid by issuers or sellers of
securities; provided, however, that Registration Expenses shall exclude,
and RHI shall pay, underwriters' fees and underwriting discounts and
commissions and transfer taxes in respect of the Registrable Securities
being registered.
"Securities Act" means the Securities Act of 1933, as amended, or
any subsequent similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
References to a particular section of the Securities Act of 1933, as
amended, shall include a reference to the comparable section, if any, of
any such subsequent similar federal statute.
"Special Securities" is defined in the definition of "Trigger
Date" below.
"Trigger Date" means (i) with respect to shares of Common Stock
issued to satisfy indemnification obligations of the Company under the
Merger Agreement (collectively "Special Securities"), on the date of their
issuance, (ii) with respect to the shares of Special Preferred Stock, on
their date of issuance and (iii) with respect to all other Registrable
Securities, on the date which is two years after the date of this
Agreement.
2. Registration Rights.
2.1 Registration on Demand.
2.1.1 Demand. At any time following a Trigger Date, upon
the written request (the "Demand") of RHI that the Company effect the
registration under the Securities Act of all or part of RHI's Registrable
Securities, the Company shall: use its best efforts to effect, as soon as
practicable and in any event within 90 days after the Demand is received
from RHI, the registration under the Securities Act (but not including by
means of a shelf registration pursuant to Rule 415 under the Securities
Act), of the Registrable Securities which the Company has been so requested
to register by RHI.
<PAGE>
2.1.2 Registration of Other Securities. Whenever the
Company shall effect a registration pursuant to this Section 2.1 in
connection with an underwritten offering by RHI of Registrable Securities,
holders of securities of the Company who have "piggyback" registration
rights may include all or a portion of such securities in such
registration, offering or sale; provided that, if the amount of Registrable
Securities to be sold by RHI is to be reduced because of the views of the
managing underwriter or underwriters, then the securities (other than the
Registrable Securities) to be sold by such other holders participating in
such offering shall be reduced by allocating the securities to be sold by
such other holders in proportion to the number of securities proposed to be
sold in such offering by such holders.
2.1.3 Registration Statement Form. Registrations under
this Section 2.1 shall be on such appropriate registration form of the
Commission as shall be selected by the Company. The Company shall include
in any such registration statement all information which, in the opinion of
counsel to the Company, is required to be included.
2.1.4 Expenses. The Company shall pay the Registration
Expenses in connection with any registration requested pursuant to this
Section 2.1.
2.1.5 Effective Registration Statement. A registration
requested pursuant to this Section 2.1 shall not be deemed to have been
effected (i) unless a registration statement with respect thereto has
become effective, (ii) if after it has become effective, such registration
is interfered with by any stop order, injunction or other order or
requirement of the Commission or other governmental agency or court for any
reason not attributable to RHI and has not thereafter become effective, or
(iii) if the conditions to closing specified in the underwriting agreement,
if any, entered into in connection with such registration are not satisfied
or waived, other than by reason of a failure on the part of RHI.
2.1.6 Selection of Underwriters. In connection with each
underwritten offering, RHI shall promptly select an underwriter subject to
the approval of the Company (which approval shall not be unreasonably
withheld by the Company).
2.1.7 Limitations on Registration on Demand. The Company
shall not be required to prepare and file a registration statement pursuant
to this Section 2.1 which would become effective within 90 days following
the effective date of a registration statement (other than a registration
statement filed on Form S-8) filed by the Company with the Commission
pertaining to an underwritten public offering of convertible debt
securities or equity securities for cash for the account of the Company or
another holder of securities of the Company or if the Company gives written
notice to RHI within 10 days of receipt of a Demand that the Company will
initiate within 30 days the preparation of such registration statement, and
in each such case RHI was afforded the opportunity to include Registrable
Securities in such registration pursuant to Section 2.2 (unless the
managing underwriter for such registration is of the opinion that such
<PAGE>
inclusion would adversely affect the Company's ability to complete its
underwritten offering). Notwithstanding anything in this Section 2.1 to
the contrary, in no event shall the Company be required to effect (i) in
the aggregate, more than three registrations pursuant to this Section 2.1
(other than registrations pertaining to Special Securities, which shall be
unlimited in number and not otherwise reduce the number of registrations
available to the Company pursuant to this Section 2.1) and (ii) more than
one registration pursuant to this Section 2.1 in any 180-day period (other
than registrations pertaining to Special Securities, which shall not affect
or be affected by this clause (ii)).
2.1.8 Right to Purchase in Lieu of Registration. If the
Company receives a request for a Demand registration and the Company
desires not to comply with such request, then the Company may purchase all
but not less than all of the Registrable Securities proposed to be disposed
of in such request (the "Redeemable Shares") by delivering to RHI a notice
of the Company's election to purchase such Registrable Securities (the
"Redemption Notice") within seven (7) days of receipt by the Company of the
request for the Demand registration pursuant to Section 2.1.1. Upon
issuance of the Redemption Notice, the Company shall be irrevocably
committed to purchase the Registrable Securities on the terms set forth
herein. The purchase price to be paid for the Registrable Securities shall
be the Closing Price on the Trading Day immediately prior to the date the
Company receives the notice for the Demand registration; provided, that in
the event the Registrable Securities are not listed and traded on any
national securities exchange or on NASDAQ (as defined below), the purchase
price shall be established by the written opinion of a nationally
recognized investment banking firm selected by RHI delivered to the Company
at time of the request for a Demand registration. The term "Trading Day"
shall mean a day on which the principal national securities exchange on
which the Registrable Securities in question shall be listed or admitted to
trading shall be open for the transaction of business or, if the
Registrable Securities shall not be listed or admitted to trading on any
national securities exchange, any day on which trading takes place in the
over-the-counter market. The Company shall purchase the Registrable
Securities within thirty (30) business days of the issuance of the
Redemption Notice by delivering the purchase price in cash to RHI against
delivery of the Registrable Securities. "Closing Price" means the last
sale price, regular way, as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted
to trading on the principal national securities exchange on which the
Registrable Securities shall be listed or admitted to trading or, if the
Registrable Securities shall not be listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers
Automated Quotations System ("NASDAQ") or such other system then in use.
<PAGE>
2.2 Piggyback Registration.
2.2.1 Right to Include Registrable Securities. If the
Company at any time proposes to register any of its securities under the
Securities Act by registration on Forms S-1, S-2, S-3 or any successor or
similar form(s) (except registrations on such Forms or similar form(s)
solely for registration of securities in connection with (i) an employee
benefit plan or dividend reinvestment plan or a merger or consolidation or
(ii) debt securities which are not convertible into Common Stock), whether
or not for sale for its own account, it shall, subject to Section 2.8, each
such time give written notice to RHI of its intention to do so and of RHI's
rights under this Section 2.2 at least 15 days prior to the filing of a
registration statement with respect to such registration with the
Commission. Upon the written request of RHI made as promptly as
practicable and in any event within 5 business days after the receipt of
any such notice, which request shall specify the Registrable Securities
intended to be disposed of by RHI, the Company shall, subject to
Section 2.7, use its best efforts to effect the registration under the
Securities Act of all Registrable Securities which the Company has been so
requested to register by RHI; provided, that with respect to registrations
effected for the account of another holder of securities of the Company,
RHI's rights to include Registrable Securities will be subject to the
consent of such other holder under agreements existing as of the date of
this Agreement; provided, further, that if, at any time after giving
written notice of its intention to register any securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or
to delay registration of such securities, the Company may, at its election,
give written notice of such determination to RHI and (i) in the case of a
determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration
(but not from any obligation of the Company to pay the Registration
Expenses in connection therewith), without prejudice; provided, however,
that RHI may request that such registration be effected as a registration
under Section 2.1 hereof and (ii) in the case of a determination to delay
registering, shall be permitted to delay registering any Registrable
Securities for the same period as the delay in registering such other
securities. No registration effected under this Section 2.2 shall relieve
the Company of its obligation to effect any registration upon demand under
Section 2.1. The Company shall pay all Registration Expenses in connection
with registration of Registrable Securities requested pursuant to this
Section 2.2.
2.2.2 Priority in Piggyback Registrations. Notwithstanding
anything in paragraph 2.2.1 above to the contrary, if the managing
underwriter of any underwritten offering shall inform the Company by letter
of its belief that the number or type of Registrable Securities requested
to be included in such registration would materially and adversely affect
such offering, then the Company shall include in such registration, to the
extent of the number and type which the Company is so advised can be sold
in (or during the time of) such offering, first, all securities proposed by
the Company to be sold for its own account or by the holder of securities
<PAGE>
who initiated a demand registration, and second, by reducing the other
securities (including Registrable Securities to be sold by other holders of
securities (including RHI)) in proportion to the number of securities
proposed to be sold in such offering by such holders.
2.3 Registration Procedures.
2.3.1 In connection with the registration of any
Registrable Securities under the Securities Act as provided in Sections 2.1
and 2.2, the Company shall as expeditiously as possible:
(i) prepare and file with the Commission the requisite
registration statement to effect such registration and thereafter use its
best efforts to cause such registration statement to become and remain
effective (subject to clause (ii) below); provided, however, that the
Company may discontinue any registration of its securities which are not
Registrable Securities at any time prior to the effective date of the
registration statement relating thereto;
(ii) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities covered by
such registration statement for such period as shall be required for the
disposition of all of such Registrable Securities; provided, that such
period need not exceed 90 days;
(iii) furnish to RHI such number of conformed copies of such
registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, as RHI may
reasonably request;
(iv) use its best efforts (x) to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or Blue Sky laws of such States of
the United States of America where an exemption is not available and as RHI
shall reasonably request, (y) to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and
(z) to take any other action which may reasonably be necessary or advisable
to enable RHI to consummate the disposition in such jurisdictions of the
securities to be sold by RHI, except that the Company shall not for any
such purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not, but for the
requirements of this paragraph (iv), be obligated to be so qualified or to
consent to general service of process in any such jurisdiction;
<PAGE>
(v) use its best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the Company
and counsel to RHI to consummate the disposition of such Registrable
Securities in accordance with their intended method of disposition;
(vi) furnish to RHI and its underwriters, if any, (x) an
opinion of counsel for the Company, and (y) a "comfort" letter signed by
the independent public accountants who have certified the Company's
financial statements included or incorporated by reference in such
registration statement, each covering substantially the same matters with
respect to such registration statement (and the prospectus included
therein) and, in the case of the accountant's comfort letter, with respect
to events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and in accountant's
comfort letters delivered to the underwriters in underwritten public
offerings of securities (and dated the dates such opinions and comfort
letters are customarily dated);
(vii) notify RHI when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or
upon the happening of any event as a result of which, the prospectus
included in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, in the light of the circumstances under which they were
made, and at the request of RHI promptly prepare and furnish to it a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made;
(viii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more than
eighteen months, beginning with the first full calendar month after the
effective date of such registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 promulgated thereunder, and promptly furnish the same to RHI;
(ix) provide and cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for all Registrable
Securities covered by such registration statement from and after a date not
later than the effective date of such registration; and
(x) use its best efforts to list all Registrable Securities
covered by such registration statement on any national securities exchange
or over-the-counter market, if any, on which Registrable Securities of the
<PAGE>
same class and, if applicable, series, covered by such registration
statement are then listed.
The Company may require RHI to furnish the Company such
information regarding RHI and the distribution of RHI's Registrable
Securities as the Company may from time to time reasonably request in
writing.
RHI agrees that upon receipt of any notice from the Company of
the happening of an event of the kind described in Section 2.3.1(vii), RHI
will forthwith discontinue its disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable
Securities until RHI's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 2.3.1(vii) and, if so directed by the
Company, RHI will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in RHI's possession, of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice.
2.4 Underwritten Offerings.
2.4.1 Requested Underwritten Offerings. If requested by
the underwriters for any underwritten offering by RHI pursuant to a
registration requested under Section 2.1, the Company will enter into an
underwriting agreement with such underwriters for such offering, such
agreement to be reasonably satisfactory in substance and form to the
Company, RHI and the underwriters, and to contain such representations and
warranties by the Company and RHI and such other terms as are generally
prevailing in agreements of that type, including, without limitation,
indemnities to the effect and to the extent provided in Section 2.8. RHI
will cooperate with the Company in the negotiation of the underwriting
agreement and will give consideration to the reasonable suggestions of the
Company regarding the form and substance thereof. RHI shall be a party to
such underwriting agreement. RHI shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding
RHI, RHI's Registrable Securities, RHI's intended method of distribution
and any other representations or warranties required by law or customarily
given by selling shareholders in an underwritten public offering.
2.4.2 Piggyback Underwritten Offerings. If the Company
proposes to register any of its securities under the Securities Act as
contemplated by Section 2.2 and such securities are to be distributed by or
through one or more underwriters, the Company will, subject to Section 2.2
and Section 2.7 hereof, if requested by RHI, arrange for such underwriters
to include all the Registrable Securities to be offered and sold by RHI
among the securities of the Company to be distributed by such underwriters
(subject to the provisio stated in Section 2.2). RHI shall become a party
to the underwriting agreement negotiated between the Company and such
underwriters. RHI shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding RHI, RHI's Registrable
<PAGE>
Securities and RHI's intended method of distribution or any other
representations or warranties required by law or customarily given by
selling shareholders in an underwritten public offering.
2.4.3 Holdback Agreements.
(i) If any registration of Registrable Securities (other
than special securities) shall be in connection with an underwritten public
offering, RHI agrees not to effect any public sale or distribution,
including any sale pursuant to Rule 144 under the Securities Act, of any
Registrable Securities, and not to effect any such public sale or
distribution of any other equity security of the Company or of any security
convertible into or exchangeable or exercisable for any equity security of
the Company (in each case, other than as part of such underwritten public
offering) during the 15 days prior to, and during the 90-day period
beginning on, the effective date of such registration statement, provided
that RHI has received written notice of such registration at least 15 days
prior to such effective date.
(ii) If any registration of Registrable Securities (other
than special securities) shall be in connection with an underwritten public
offering, the Company agrees (x) not to effect any public sale or
distribution of any of its equity securities or of any security convertible
into or exchangeable or exercisable for any equity security of the Company
(other than in connection with any employee stock option or other benefit
plan) during the 15 days prior to, and during the 90-day period beginning
on the effective date of such registration statement (except as part of
such registration) and (y) that any agreement entered into after the date
of this Agreement pursuant to which the Company issues or agrees to issue
any privately placed equity securities shall contain a provision under
which holders of such securities agree not to effect any public sale or
distribution of any such securities during the period referred to in the
foregoing clause (x), including any sale pursuant to Rule 144 under the
Securities Act (except as part of such registration, if permitted), if such
holder is participating in the offering pursuant to such registration.
2.5 Preparation; Reasonable Investigation. In connection with
the preparation and filing of each registration statement under the
Securities Act pursuant to this Agreement, the Company will give RHI, its
underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the Commission,
and each amendment thereof or supplement thereto, and give each of them
such access to its books and records, such opportunities to discuss the
business of the Company with officers and the independent public
accountants who have certified its financial statements as shall be
necessary, in the opinion of RHI's and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act. Any expenses incurred by RHI in connection with any such
investigation shall be borne by RHI.
<PAGE>
2.6 Limitations, Conditions and Qualifications to Obligations
under Registration Covenants. The obligations of the Company to use its
best efforts to cause the Registrable Securities to be registered under the
Securities Act are subject to each of the following limitations, conditions
and qualifications:
In addition to its rights under Section 2.1.8 the Company shall
be entitled to postpone for a reasonable period of time (but not exceeding
60 days) the filing of any registration statement otherwise required to be
prepared and filed by it pursuant to Section 2.1 if the Company determines,
in its reasonable judgment, that such registration and offering would
interfere with any financing, acquisition, corporate reorganization or
other material transaction involving the Company or any of its Affiliates
or would require premature disclosures thereof and promptly give RHI
written notice of such determination, containing a general statement of the
reasons for such postponement and an approximation of the anticipated
delay. If the Company shall so postpone the filing of a registration
statement, RHI shall have the right to withdraw the request for
registration by giving written notice to the Company within 30 days after
receipt of the notice of postponement and, in the event of such withdrawal,
such request shall not be counted for purposes of the requests for
registration to which RHI is entitled pursuant to Section 2.1 hereof.
2.7 Indemnification.
2.7.1 Indemnification by the Company. In the event of any
registration of any securities of the Company under the Securities Act, the
Company will, and hereby does, indemnify and hold harmless, in the case of
any registration statement filed pursuant to Section 2.1 or 2.2, RHI, its
directors, officers, partners, agents, and affiliates and each other Person
who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls RHI or any such
underwriter within the meaning of the Securities Act, insofar as losses,
claims, damages, or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus, final
prospectus, or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which they were made
not misleading, and the Company will reimburse RHI and each such director,
officer, partner, agent or affiliate, underwriter and controlling Person
for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, liability,
action or proceeding; provided, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement
<PAGE>
in reliance upon and in conformity with written information furnished to
the Company through an instrument duly executed by or on behalf of RHI or
such underwriter, as the case may be, specifically stating that it is for
use in the preparation thereof; and provided, further, that the Company
shall not be liable to RHI or any Person who participates as an underwriter
in the offering or sale of Registrable Securities or any other person, if
any, who controls RHI or such underwriter within the meaning of the
Securities Act, in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense
arises out of such Person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of
Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus so long as such final prospectus, and
any amendments or supplements thereto, have been furnished to such
underwriter or RHI, as applicable. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
RHI or any such director, officer, partner, agent or affiliate or
controlling Person and shall survive the transfer of such securities by
RHI.
2.7.2 Indemnification by RHI. If any Registrable
Securities are included in any registration statement, each of TFC and RHI
will, and each hereby does, jointly and severally indemnify and hold
harmless (in the same manner and to the same extent as set forth in
Section 2.7.1 above) the Company, and each director of the Company, each
officer of the Company and each other Person, if any, who controls the
Company within the meaning of the Securities Act, with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement
thereto, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by
TFC or RHI specifically stating that it is for use in the preparation of
such registration statement, preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement.
2.7.3 Notice of Claims, Etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding paragraphs of this
Section 2.7, such indemnified party will, if a claim in respect thereof is
to be made against an indemnifying party, immediately give written notice
to the latter of the commencement of such action; provided, however, that
the failure of any indemnified party to give notice as provided herein
shall not relieve the indemnifying party of its obligations under the
preceding paragraphs of this Section 2.7, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice.
In case any such action is brought against an indemnified party, unless in
such indemnified party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist in respect of such
<PAGE>
claim, the indemnifying party shall be entitled to participate in and to
assume the defense thereof, jointly with any other indemnifying party
similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable
costs related to the indemnified party's cooperation with the indemnifying
party, unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties arises in
respect of such claim after the assumption of the defense thereof. No
indemnifying party shall be liable for any settlement of any action or
proceeding effected without its written consent, which consent shall not be
unreasonably withheld. No indemnifying party shall, without the consent of
the indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release
from all liability in respect to such claim or litigation.
2.7.4 Contribution. If the indemnification provided for in
this Section 2.7 shall for any reason be held by a court to be unavailable
to an indemnified party under paragraph 2.7.1 or 2.7.2 hereof in respect of
any loss, claim, damage or liability, or any action in respect thereof,
then, in lieu of the amount paid or payable under paragraph 2.7.1 or 2.7.2
hereof, the indemnified party and the indemnifying party under paragraph
2.7.1 or 2.7.2 hereof shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating the same), (i) in such proportion
as is appropriate to reflect the relative fault of the Company on one hand
and TFC and RHI on the other which resulted in such loss, claim, damage or
liability, or action in respect thereof, with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or
action in respect thereof, as well as any other relevant equitable
considerations or (ii) if the allocation provided by paragraph (i) above is
not permitted by applicable law, in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on one hand and
TFC and RHI on the other. No Person guilty of fraudulent misrepresentation
(within the meaning of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim,
effected without such Person's consent, which consent shall not be
unreasonably withheld.
2.7.5 Other Indemnification. Indemnification and
contribution similar to that specified in the preceding paragraphs of this
Section 2.7 (with appropriate modifications) shall be given by the Company
and TFC and RHI with respect to any required registration or other
qualification of securities under any federal or state law or regulation of
any governmental authority other than the Securities Act.
<PAGE>
2.7.6 Indemnification Payments. The indemnification and
contribution required by this Section 2.7 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or expense, loss, damage or
liability is incurred.
2.7.7 Disclosure of Results of Investigation. Each of TFC
and RHI covenants and agrees that if in the course of its investigation of
the Company anything comes to its attention that indicates there is or
there could become a breach of the Company's representations and
warranties, covenants and agreements contained in any underwriting
agreement, TFC and RHI shall promptly notify the Company of such matter.
Failure to so notify the Company shall cause TFC and RHI to lose its right
to indemnification under Section 2.7 with respect to such discovered
matter.
3. Rule 144. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time
permit the sale of the Registrable Securities to the public without
registration, after such time as a public market exists for its Common
Stock, the Company agrees to:
(a) use its best efforts to facilitate the sale of the
Registrable Securities to the public, without registration under the
Securities Act, pursuant to Rule 144 promulgated under the Securities Act,
provided that this shall not require the Company to file reports under the
Securities Act and the Exchange Act at any time prior to the Company's
being otherwise required to file such reports;
(b) make and keep public information available, as those terms
are understood and defined in Rule 144 promulgated under the Securities
Act at all times after ninety (90) days after the effective date of the
first registration under the Securities Act filed by the Company for an
offering of its securities to the general public;
(c) use its best efforts to then file with the Commission in a
timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act; and
(d) deliver a written statement as to whether it has complied
with such requirements of this Section, to RHI upon RHI's request.
4. Legend. Any certificate evidencing Registrable Securities shall
bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
A REGISTRATION RIGHTS AGREEMENT, DATED AS OF
BY AND BETWEEN RHI HOLDINGS, INC. AND
SHARED TECHNOLOGIES INC. A COPY OF SUCH AGREEMENT SHALL BE
FURNISHED WITHOUT CHARGE BY SHARED TECHNOLOGIES INC. TO THE
HOLDER HEREOF UPON SUCH HOLDER'S WRITTEN REQUEST."
<PAGE>
5. Modification; Waivers. This Agreement may be modified or amended
only with the written consent of each party hereto. No party hereto shall
be released from its obligations hereunder without the written consent of
the other party. The observance of any term of this Agreement may be
waived (either generally or in a particular instance and either
retroactively or prospectively) by the party entitled to enforce such term,
but any such waiver shall be effective only if in a writing signed by the
party against which such waiver is to be asserted. Except as otherwise
specifically provided herein, no delay on the part of any party hereto in
exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party hereto of any
right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder.
6. Entire Agreement. This Agreement represents the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to
the subject matter hereof.
7. Severability. If any provision of this Agreement, or the
application of such provision to any Person or circumstance, shall be held
invalid, the remainder of this Agreement or the application of such
provision to other Persons or circumstances shall not be affected thereby;
provided, that the parties shall negotiate in good faith with respect to an
equitable modification of the provision or application thereof held to be
invalid.
8. Notices. (a) Any notice or communication to any party hereto
shall be duly given if in writing and delivered in person or mailed by
first class mail (registered or certified, return receipt requested),
facsimile or overnight air courier guaranteeing next day delivery, to such
other party's address.
If to RHI Holdings, Inc.:
300 West Service Road
P.O. Box 10803
Chantilly, VA 22001
Facsimile No.: (703) 888-5674
Attention: Donald Miller, Esq.
If to Shared Technologies Inc.:
100 Great Meadow Road, Suite 104
Wethersfield, CT 06109
Facsimile No.: (203) 258-2401
Attention: Legal Department
<PAGE>
(b) All notices and communications will be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, if mailed; when receipt
acknowledged, if sent by facsimile; and the next business day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next
day delivery.
9. Successors and Assigns. This Agreement shall inure to the
benefit of and shall be binding upon RHI and Shared Technologies and their
respective successors and assigns. In the event that RHI assigns its
rights to a holder or holders of only a portion of the Registrable
Securities, then all references to RHI herein shall also be deemed to refer
to such other holder or holders but in such event RHI will have the sole
right to make decisions by and give notices for such holder or holders
under this Agreement; provided, that if RHI no longer owns any Registrable
Securities, then all decisions and notices hereunder must be made by the
holders of not less than a majority of the Registrable Securities
outstanding.
10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which for all purposes shall be deemed to be an
original and all of which together shall constitute the same agreement.
11. Headings. The Section headings in this Agreement are for
convenience of reference only, and shall not be deemed to alter or affect
the meaning or interpretation of any provisions hereof.
12. Construction. This Agreement shall be governed, construed and
enforced in accordance with the laws of the state of New York, without
regard to its principles of conflict of laws.
13. No Inconsistent Agreements. The Company has not previously, and
will not hereafter, enter into any agreement with respect to its securities
which is inconsistent with the rights granted to RHI in this Agreement;
except that holders of piggy-back registration rights with respect to 9,458
shares of Common Stock have such registration rights without allowance for
cut-back.
14. Recapitalizations, etc. In the event that any capital stock or
other securities are issued in respect of, in exchange for, or in
substitution of, any Registrable Securities by reason of any
reorganization, recapitalization, reclassification, merger, consolidation,
spin-off, partial or complete liquidation, stock dividend, split-up, sale
of assets, distribution to stockholders or combination of the shares of
Registrable Securities or any other change in the Company's capital
structure, appropriate adjustments shall be made in this Agreement so as to
fairly and equitably preserve, as far as practicable, the original rights
and obligations of the parties hereto under this Agreement.
<PAGE>
15. Attorneys' Fees. In any action or proceeding brought to enforce
any provision of this Agreement by a party hereto, or where any provision
hereof is validly asserted as a defense by such party, such party, if
successful, shall be entitled to recover reasonably attorneys' fees in
addition to any other available remedy.
16. Specific Performance. The parties hereto agree that the
Registrable Securities of the Company cannot be purchased or sold in the
open market and that, for these reasons, among others, the parties will be
irreparably damaged in the event that this Agreement is not specifically
enforceable. Accordingly, in the event of any controversy concerning the
Registrable Securities which is the subject of this Agreement, or any right
or obligation to register such securities, such right or obligation shall
be enforceable in a court of equity by specific performance. The rights
granted in this Section 16 shall be cumulative and not exclusive, and shall
be in addition to any and all other rights which the parties hereto may
have hereunder, at law or in equity.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
SHARED TECHNOLOGIES INC.
By:/s/ Vincent DiVencenzo
Name:
Title:
RHI HOLDINGS, INC.
By:/s/ John Flynn
Name:
Title:
THE FAIRCHILD CORPORATION
By:/s/ John Flynn
Name:
Title:
<PAGE>
EXHIBIT H
PLEDGE AGREEMENT
PLEDGE AGREEMENT (the "Agreement"), dated as of
March 13, 1996, made by RHI HOLDINGS, INC., a Delaware
corporation ("Pledgor"), in favor of Gadsby & Hannah (the
"Pledgee").
R E C I T A L S :
A. Pursuant to the terms of an Agreement to
Exchange 6% Cumulative Convertible Preferred Stock and Special
Preferred Stock dated as of March 1, 1996 (the "Exchange
Agreement") among Shared Technologies Inc. ("Shared
Technologies"), The Fairchild Corporation ("TFC"), RHI and
Fairchild Industries, Inc. (a wholly-owned subsidiary of RHI),
RHI has received 250,000 shares of Series I 6% Cumulative
Convertible Preferred Stock, par value $.01 per share (the
"Convertible Preferred Stock"), of Shared Technologies and
200,000 shares of Series J Special Preferred Stock, par value
$.01 per share (the "Special Preferred Stock" and, together
with the Convertible Preferred Stock, the "Preferred Stock").
B. This Agreement is given by Pledgor in favor of
Pledgee for the benefit of Shared Technologies to secure the
payment and performance by the Indemnifying Parties (as
hereinafter defined) of Indemnification Agreements dated the
date hereof (the "Indemnification Agreements") between Shared
Technologies and each of TFC, RHI, and Fairchild Holding Corp.
(collectively, the "Indemnifying Parties").
A G R E E M E N T :
NOW, THEREFORE, in consideration of the foregoing
premises and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Pledgor and
Pledgee hereby agree as follows:
SECTION 1. Pledge. As collateral security for the
payment and performance when due of all of the Indemnifying
Parties' obligations to Shared Technologies under the
Indemnification Agreements (the "Secured Obligations"), Pledgor
hereby pledges, assigns and grants to Pledgee for the benefit
of and as agent for Shared Technologies, until this Agreement
terminates, a continuing first priority security interest in
<PAGE>
and to all of the right, title and interest of Pledgor in
shares of Preferred Stock of Shared Technologies described in
Schedule I hereto (the "Pledged Shares"). The term "Pledged
Collateral" shall mean (i) the Pledged Shares and all other
securities or property issued in exchange or as replacement for
(by reason of merger, reorganization or otherwise) the Pledged
Shares by the Company or a third party ("New Pledged Shares")
and (ii) all other assets or property substituted for the
Pledged Shares in accordance with Section 6 of this Agreement.
SECTION 2. Delivery of Pledged Shares. The
certificates representing the Pledged Shares, together with
stock powers, are, concurrently with the execution of this
Agreement, being delivered to Pledgee (and with respect to any
New Pledged Shares will be promptly delivered to Pledgee when
received by Pledgor) and will be held by Pledgee pursuant to
and in accordance with the terms of this Agreement.
SECTION 3. Voting Rights; Distributions; etc.
(a) Pledgor shall be entitled to exercise any and
all voting and other consensual rights (including rights to
exercise) pertaining to the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms or
purpose of this Agreement.
(b) Pledgor shall be entitled to receive and retain,
and to utilize free and clear of the lien of this Agreement,
any and all dividends or distributions made with respect to the
Pledged Collateral, provided, however, if a Dispute Notice (as
hereinafter defined) has been delivered, until there has been a
resolution of the dispute to which such Dispute Notice relates,
all dividends and distributions on the portion of Pledged
Collateral required to satisfy Shared Technologies' claims
under the relevant Dispute Notice, shall be delivered to and
held by the Pledge Agent. Upon resolution of the dispute which
is the subject of the Dispute Notice all dividends and
distributions shall forthwith be delivered to the party in
whose favor the dispute was resolved.
(c) Pledgee shall be deemed without further action
or formality to have granted to Pledgor all necessary consents
relating to voting rights and shall, if necessary, upon written
request of Pledgor, from time to time execute and deliver (or
cause to be executed and delivered) to Pledgor all such
instruments as Pledgor may reasonably request in order to
permit Pledgor to exercise the voting and other rights which it
is entitled to exercise pursuant to Section 3(a) hereof and to
receive the dividends and distributions which it is authorized
to receive and retain pursuant to Section 3(b) hereof.
<PAGE>
SECTION 4. Other Liens. Pledgor shall not (i) sell,
convey, assign or otherwise dispose of (except pursuant to
Section 6), or grant any option, right or warrant with respect
to, any of the Pledged Collateral, or (ii) create or permit to
exist any lien upon or with respect to any Pledged Collateral
other than the lien and security interest granted to Pledgee
for the benefit of Shared Technologies under this Agreement.
SECTION 5. Cancellation of Pledged Shares upon
Payment Default. In the event that Shared Technologies claims
it is entitled to a payment from an Indemnifying Party in
accordance with the terms of an Indemnification Agreement
because of a payment that Shared Technologies has made or is
then obligated to make to a third party and for which it is
entitled to indemnification under the Indemnification
Agreements, such Indemnifying Party shall have 30 days (the
"Notice Period") from its receipt of written notice of such
claim to pay to Shared Technologies the amount of such claim in
cash or dispute responsibility for indemnification of such
claim by delivering a written notice thereof to Shared
Technologies (a "Dispute Notice"). In the event that such
Indemnifying Party fails to pay any such claim or deliver a
Dispute Notice within such 30-day period, Pledgee shall deliver
to Shared Technologies, at Shared Technologies' request (a
"Pledge Notice"), Pledged Shares or, if applicable, New Pledged
Shares (in each case valued at their liquidation preference) in
an amount equal to such claimed amount and Shared Technologies
shall cancel the same and they will cease to be Pledged
Collateral for all purposes of this Agreement. In the event of
a claim subject to a Dispute Notice, upon settlement of such
dispute, if the Indemnifying Party fails to pay the amount
owing to Shared Technologies, if any, as a result of such
settlement (the "Undisputed Claim Amount"), within 30 days
thereof, Pledgee shall deliver to Shared Technologies, upon
delivery to Pledgee of a Pledge Notice, Pledged Shares or, if
applicable, New Pledged Shares (in each case valued at their
liquidation preference) equal to the Undisputed Claim Amount
and Shared Technologies shall cancel the same. Any such
cancellation of Pledged Shares or New Pledged Shares pursuant
to this Section 5 will be deemed to have satisfied the
Indemnifying Party's obligations under the Indemnification
Agreements for the claim to the extent of the liquidation
preference of the Pledged Shares or New Pledged Shares so
cancelled. The foregoing rights of Shared Technologies shall
not obviate Shared Technologies' other available rights to seek
indemnification payments from the Indemnifying Parties.
SECTION 6. Substitution of Collateral. At its
election, Pledgor may substitute property or assets owned by it
for all or a portion of the Pledged Shares (or New Pledged
<PAGE>
Shares) so long as (i) the fair market value of such substitute
property or assets is at least equal to the fair market value
of the Pledged Shares (or New Pledged Shares) for which
substitution is sought, as evidenced by the written opinion of
an investment banking firm of nationally recognized standing
reasonably acceptable to Shared Technologies, (ii) such
substitute property or assets are not subject to any other lien
or security interest at the time of such substitution, (iii)
Pledgor delivers to Pledgee such instruments and documents
which are necessary for Pledgee to perfect a first priority
lien on and security interest in such substitute property or
assets and (iv) Pledgor, Pledgee and Shared Technologies shall
have entered into such amendments or supplements to this
Agreement as are reasonably requested by Pledgee and Shared
Technologies in order to ensure Pledgee's rights and remedies
hereunder with respect to such substituted property or assets.
SECTION 7. Termination of Agreement; Release of
Pledged Collateral. On the Termination Date, this Agreement
shall terminate and Pledgee's and Shared Technologies' rights
with respect to the Pledged Collateral shall terminate and
Pledgee shall promptly deliver the certificates (or other
property or assets) representing the Pledged Collateral to
Pledgor, free and clear of any lien or encumbrance thereon.
"Termination Date" means the later to occur of (i) the third
anniversary of the date of this Agreement and (ii) the date on
which the consolidated net worth (computed in accordance with
generally accepted accounting principles) of The Fairchild
Corporation at such time (as evidenced by an audited balance
sheet delivered to Pledgee by Pledgor) is at least (x) $25
million greater than such net worth at September 30, 1995
(excluding for such purpose any value attributed to the
Preferred Stock on such balance sheet) and (y) $225 million
(including for such purpose the value of the Preferred Stock);
provided that in the event of any outstanding claims under the
Indemnification Agreements that are subject to a Dispute
Notice, the Termination Date shall not be deemed to occur with
respect to an amount of Pledged Collateral equal to the claim
which is the subject of such Dispute Notice, until such dispute
is resolved unless, as to any such claim, the appropriate
Indemnifying Parties accept, by written agreement reasonably
satisfactory to Shared Technologies, full and unconditional
liability for such claim and agree to assume the defense
thereof and full responsibility therefor (an "Assumption").
The foregoing provisions notwithstanding, in the event that a
Pledge Notice has been delivered as to which Pledgor has not
yet responded and the Notice Period has not yet expired, such
claims shall be subject to the terms of the proviso of the
preceding sentence until the earlier to occur of the payment by
<PAGE>
Pledgor of the Undisputed Claim Amount or delivery by Pledgor
to Shared Technologies of an Assumption.
SECTION 8. Continuing Security Interest; Assignment.
This Agreement shall create a continuing security interest in
the Pledged Shares and shall (i) be binding upon Pledgor, its
successors and assigns, and (ii) inure, together with the
rights and remedies of each of Pledgee and Shared Technologies
hereunder, to the benefit of each of Pledgee and Shared
Technologies and their respective successors, transferees and
assigns; no other Person (including, without limitation, any
other creditor of Pledgor or Shared Technologies) shall have
any interest herein or any right or benefit with respect
hereto.
SECTION 9. GOVERNING LAW; TERMS. THIS AGREEMENT
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO THE EXTENT
THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
PROPERTY ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN
THE STATE OF NEW YORK.
SECTION 10. Severability of Provisions. Any
provision of this Agreement which is prohibited or unenforce-
able in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforce-
ability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in
any other jurisdiction.
SECTION 11. Execution in Counterparts. This
Agreement and any amendments, waivers, consents or supplements
hereto may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an
original, but all such counterparts together shall constitute
one and the same agreement.
SECTION 12. Headings. The Section headings used in
this Agreement are for convenience of reference only and shall
not affect the construction of this Agreement.
SECTION 13. Arbitration. Any controversy, dispute
or question arising out of or in connection with this
Agreement, or the interpretation, performance or
non-performance of this Agreement or any breach hereof, shall
be determined by arbitration held in New York, in accordance
with the then existing rules of the American Arbitration
<PAGE>
Association. Any decision or award of such arbitration shall
be final, conclusive and binding on the parties hereto.
Nothing contained herein shall in any way deprive either party
of its right to obtain injunctions or other equitable relief,
including preliminary relief pending arbitration. All costs
and expenses (including counsel and expert witness fees)
associated with any such arbitration shall be paid by the party
adjudged by the arbitrator to be responsible for the costs.
Any award rendered by an arbitrator shall be enforceable in any
court of competent jurisdiction.
SECTION 14. Pledgee. Shared Technologies hereby
appoints Gadsby & Hannah as its agent to act as its pledge
agent with respect to the Pledged Collateral pursuant to this
Agreement. The actions of Pledgee hereunder are subject to the
provisions of this Agreement. Pledgee shall have the right
hereunder to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from
taking action (including, without limitation, the release or
substitution of Pledged Collateral), in accordance with this
Agreement. Pledgee may resign as long as Pledgee is replaced
by a successor Pledgee approved by Pledgor and Shared
Technologies. Upon the acceptance of any appointment as
Pledgee by a successor Pledgee, that successor Pledgee shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Pledgee under
this Agreement, and the retiring Pledgee shall thereupon be
discharged from its duties and obligations under this
Agreement. After any retiring Pledgee's resignation, the
provisions of this Agreement shall inure to its benefit as to
any actions taken or omitted to be taken by it under this
Agreement while it was Pledgee.
SECTION 15. Notices.
(a) Any notice or communication to any party hereto
shall be duly given if in writing and delivered in person or
mailed by first class mail (registered or certified, return
receipt requested), facsimile or overnight air courier
guaranteeing next day delivery to such other party's address.
If to RHI Holdings, Inc.:
300 West Service Road
P.O. Box 10803
Chantilly, VA 22001
Facsimile No.: (703) 888-5674
Attention: Donald Miller, Esq.
<PAGE>
with a copy to:
James J. Clark, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005
Facsimile No.: (212) 269-5420
If to Shared Technologies Inc.:
100 Great Meadow Road, Suite 104
Wethersfield, CT 06109
Facsimile No.: (203) 258-2401
Attention: Legal Department
with a copy to:
Walter D. Wekstein, Esq.
Harold J. Carroll, Esq.
Gadsby & Hannah
125 Summer Street
Boston, MA 02110
Facsimile No.: (617) 345-7050
If to Gadsby & Hannah:
125 Summer Street
Boston, MA 02110
Facsimile No.: (617) 345-7050
Walter D. Wekstein, Esq.
Harold J. Carroll, Esq.
Gadsby & Hannah
125 Summer Street
Boston, MA 02110
Facsimile No.: (617) 345-7050
<PAGE>
(b) All notices and communications will be deemed to
have been duly given: at the time delivered by hand, if
personally delivered; five business days after being deposited
in the mail, if mailed; when sent, if sent by facsimile; and
the next business day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.
SECTION 16. Entire Agreement. This Agreement
constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, between
the parties with respect to the subject matter hereof.
<PAGE>
IN WITNESS WHEREOF, Pledgor has caused this Agreement
to be executed and delivered by its duly authorized officer as
of the date first above written.
RHI HOLDINGS, INC.,
as Pledgor
By: /s/ John Flynn
----------------------------------
Name:
Title:
GADSBY & HANNAH
as Pledgee
By: /s/ Marianne Gilleran
-----------------------------------
Name:
Title:
SHARED TECHNOLOGIES INC.
By: /s/ Vincent DiVincenzo
--------------------------------
Name:
Title:
<PAGE>
SCHEDULE I
Pledged Shares
CLASS OF PAR CERTIFICATE NUMBER
ISSUER STOCK VALUE NO(S). OF SHARES
Shared Technologies Series I 6% $.01 1 235,000
Fairchild Inc. Cumulative
Convertible
Preferred
Shared Technologies Series $.01 1 200,000
Fairchild Inc. Special
Preferred
