SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 4)*
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
P.O. Box 10803, Chantilly, Virginia 20153
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 25, 1997
(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 [ ]. (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
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SCHEDULE 13D
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CUSIP No. 893934109 Page 2 of 5 Pages
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
The Fairchild Corporation -- IRS EIN 34-0728587
RHI Holdings, Inc. -- IRS EIN 34-1545939
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)[ ]
(b)[ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
PF
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
The Reporting Persons are incorporated under the laws of
Delaware
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7 SOLE VOTING POWER
6,225,000
--------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 6,225,000
--------------------------------------
OWNED BY EACH 9 SOLE DISPOSITIVE POWER
REPORTING PERSON
WITH 0
--------------------------------------
10 SHARED DISPOSITIVE POWER
6,225,000
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
6,225,000
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
36.2%
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14 TYPE OF REPORTING PERSON
CO
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Page 2 of 5 Pages
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This Amendment No. 4 is being filed to amend Items 4, 5, and 6 of the Schedule
13D.
1. Item 4 of the Schedule 13D is hereby amended in its entirety as follows:
On November 20, 1997, Shared Technologies Fairchild Inc. (the "Company"),
Intermedia Communications Inc. ("Intermedia") and Moonlight Acquisition Corp.,
("Purchaser") a wholly owned subsidiary of Intermedia, entered into an Agreement
and Plan of Merger dated November 20, 1997 (the "Merger Agreement"). Pursuant to
the Merger Agreement, Purchaser will be merged (the "Merger") with and into the
Company and holders of the Company's issued and outstanding common stock, Series
D preferred stock, Series I 6% convertible preferred stock and the Series J
redeemable special preferred stock will receive in cash $15.00, $15.00, $251.21
and $109.44, respectively. In accordance with the Merger Agreement, RHI will
receive $15.00 a share for its 6,225,000 shares of common stock of the Company.
In connection with the Merger Agreement, Intermedia loaned the Company
$21,899,455 and the Company used such proceeds to redeem on November 24, 1997
all 200,000 shares of the Series J Special Preferred Stock of the Company owned
by RHI. In addition, in connection with the Merger Agreement, RHI and Intermedia
entered into a Stock Purchase Agreement pursuant to which Intermedia purchased
on November 25,1997 all 250,000 shares of the Series I 6% Cumulative convertible
Preferred Stock of the Company owned by RHI for $62,833,815
2. Items 5(a) and (b) of the Schedule 13D are hereby amended in their entirety
as follows:
5(a) The Company's 10-Q for the period ended September 30, 1997 reported
17,174,622 shares of Common Stock outstanding. Based on such number of
outstanding shares, the Reporting Persons beneficial ownership of 6,225,000
shares (the "Shares") of common stock constitutes approximately 36.2% of the
outstanding common stock. Upon consummation of the Merger, neither TFC nor RHI
will have any beneficial ownership or interest in the common stock, preferred
stock or any other securities of the Company.
5(b) The Reporting Persons have sole power to direct the shares except as
set forth in Item 6. In addition, pursuant to the Stock Option Agreement (as
defined in Item 6) the
Page 3 of 5 Pages
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Reporting Persons do not have sole dispositive power of the shares.
The Reporting Persons share voting and dispositive power over the Shares
with Intermedia. Intermedia is a publicly held Delaware corporation. Intermedia,
directly and through its subsidiaries, is a rapidly growing integrated
communications services provider, offering a full suite of local, long distance
and enhanced data telecommunications services to business and government end
user customers, long distance carriers, Internet service providers, resellers
and wireless communication companies. The principal office of Intermedia is
located at 3625 Queen Palm Drive, Tampa, Florida 33619.
3. Item 6 of the Schedule 13D is partially amended to add the following:
In connection with the Merger Agreement, Intermedia has entered into a
stock option agreement (the "Stock Option Agreement") with RHI, pursuant to
which Intermedia has an irrevocable stock option to purchase approximately
6,225,000 shares of common stock of the Company from RHI. In addition pursuant
to the Stock Option Agreement RHI has, among other things, (i) agreed to vote
its shares in favor of the merger of the Company into the Purchaser; (ii)
granted an irrevocable proxy to Intermedia such that Intermedia can vote the
shares of common stock of STF owned by RHI in favor of the Merger Agreement; and
(iii) has agreed to not sell or otherwise dispose of the 6,225,000 shares of
common stock of the Company owned by RHI.
Item 7. Items to be Filed as Exhibits.
Exhibit A Stock Option Agreement dated November 20, 1997 between
RHI Holdings, Inc. and Intermedia Communications Inc.
Exhibit B Stock Purchase Agreement dated November 25, 1997 between
RHI Holdings, Inc. and Intermedia Communications Inc.
Page 4 of 5 Pages
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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.
December 1, 1997
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 5 of 5 Pages
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of November 24, 1997,
between INTERMEDIA COMMUNICATIONS INC., a Delaware corporation ("Buyer"), RHI
HOLDINGS, INC., a Delaware corporation (the "Seller") and Shared Technologies
Fairchild Inc., a Delaware corporation (the "Company").
R E C I T A L S :
Seller desires to sell to Buyer and Buyer desires to purchase from Seller,
all right, title and interest in and to 250,000 shares of Series I 6% Cumulative
Convertible Preferred Stock, par value $.01 per share (the "Preferred Stock")
issued by the Company and owned by Seller, all upon the terms and subject to
conditions contained herein.
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, the parties hereto hereby agree as follows:
1. PURCHASE AND SALE
1.1. Purchase ans Sale. In consideration of the payment by Buyer of the
Convertible Purchase Price (as defined in Section 1.2(a) below), Seller hereby
agrees to sell, assign, transfer, convey and deliver to Buyer, and Buyer hereby
agrees to purchase, acquire and take assignment and delivery of, all the right,
title and interest of Seller on the day designated by Seller (the "Closing
Date") in and to the Preferred Stock.
1.2. Purchase Price. The aggregate purchase price for the Convertible
Preferred Stock (the "Convertible Purchase Price") shall be $62,827,425 plus any
accrued dividends from November 24, 1997 to the Closing Date. The Convertible
Purchase Price is payable on the Closing Date in cash, by certified or bank
check or by wire transfer of immediately available funds to such accounts as the
Seller may designate in writing.
1.3. Delivery of the Preferred Stock. On the Closing Date, Seller shall
deliver to Buyer certificate(s) representing the Preferred Stock duly endorsed
in blank or accompanied by stock powers or other instruments of transfer duly
endorsed in blank, and bearing or accompanied by all requisite stock transfer
stamps.
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2. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to Buyer and the Company as follows:
2.1. Organization of Seller. Seller is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation.
2.2. Authority. Seller has all requisite power and authority to execute and
deliver this Agreement and to carry out its obligations hereunder. Seller has
obtained all necessary corporate approvals for the execution and delivery of
this Agreement and the performance of its obligations hereunder. This Agreement
has been duly executed and delivered by Seller and (assuming due authorization,
execution and delivery by the other parties hereto) constitutes Seller's legal,
valid and binding obligation, enforceable against it in accordance with its
terms.
2.3. Authorized Capital. Seller owns the Preferred Stock beneficially and
of record, free and clear of all liens, pledges, security interests, claims,
voting restrictions and agreements, proxies or other encumbrances ("Liens"),
except as may be otherwise provided for (i)in that certain Shareholder's
Agreement, dated March 13, 1996, among Seller, the Company and Anthony D.
Autorino and that certain Pledge Agreement dated as of March 13, 1996 by RHI in
favor of Gadsby & Hannah as pledge agent (the "Pledge Agreement") and (ii) that
certain Amended and Restated Pledge Agreement dated as of July 18, 1997 between
RHI and Citicorp USA Inc. (the "Citicorp Pledge Agreement"). Upon consummation
of the transactions contemplated hereby, Buyer will acquire good and marketable
title to the Convertible Preferred Stock free and clear of any Liens.
2.4. Brokers, Finders, etc. All negotiations relating to this Agreement and
the transactions contemplated hereby have been carried on without the
participation of any person or entity acting on behalf of Seller in such manner
as to give rise to any valid claim against Buyer for any brokerage or finder's
fee, commission or similar compensation.
2.5. No Misstatements or Omissions. No representation or warranty made in
this Agreement by Seller is false or misleading as to any material fact, or
omits to state a material fact required to make any of the statements made
herein not misleading in any material respect.
3. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants to Seller and the Company as follows:
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<PAGE>
3.1. Organization of Buyer. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of Delaware.
3.2. Authority. Buyer has all requisite power and authority to execute and
deliver this Agreement and to carry out its obligations hereunder. Buyer has
obtained all necessary corporate approvals for the execution and delivery of
this Agreement and the performance of its obligations hereunder. This Agreement
has been duly executed and delivered by Buyer and (assuming due authorization,
execution and delivery by the other parties hereto) constitutes Buyer's legal,
valid and binding obligation, enforceable against it in accordance with its
terms.
3.3. Brokers, Finders, etc. All negotiations relating to this Agreement and
the transactions contemplated hereby have been carried on without the
participation of any person or entity acting on behalf of Buyer in such manner
as to give rise to any valid claim against Seller for any brokerage or finder's
fee, commission or similar compensation, other than Bear, Stearns & Co. Inc.,
whose fees shall be paid by Buyer.
3.4. No Misstatements or Omissions. No representation or warranty made in
this Agreement by Buyer is false or misleading as to any material fact stated
therein, or omits to state a material fact required to make any of the
statements made therein not misleading in any material respect.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to Seller and Buyer as follows:
4.1. Organization of the Company. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Delaware.
4.2. Authority. The Company has all requisite power and authority to
execute and deliver this Agreement and to carry out its obligations hereunder.
The Company has obtained all necessary corporate approvals for the execution and
delivery of this Agreement and the performance of its obligations hereunder.
This Agreement has been duly executed and delivered by the Company and (assuming
due authorization, execution and delivery by the other parties hereto)
constitutes the Company's legal, valid and binding obligation, enforceable
against it in accordance with its terms.
4.3. No Misstatements or Omissions. No representation or warranty made in
this Agreement by the Company is false or misleading as to any material fact
stated therein, or omits to state a material fact required to make any of the
statements made therein not misleading in any material respect.
3
<PAGE>
5. INDEMNIFICATION
5.1. Indemnification by Seller. Seller agrees to defend, indemnify and hold
harmless Buyer, any subsidiary or affiliate thereof and its officers, directors,
shareholders and controlling persons, employees, agents, successors and assigns
from and against any and all liabilities, losses, damages, claims, costs,
expenses, judgments, interest and penalties (including, without limitation,
attorneys', accountants' and outside advisors' fees and disbursements)
(collectively, "Losses") incurred as a result of, arising out of or resulting
from (i) the breach of any representation or warranty made by Seller and
contained in this Agreement or (ii) the breach of any covenant or agreement made
by Seller and contained in this Agreement.
5.2. Indemnification by Buyer. Buyer agrees to defend, indemnify and hold
harmless Seller, any subsidiary or affiliate thereof and its officers,
directors, shareholders and controlling persons, employees, agents, successors
and assigns from and against any and all Losses incurred as a result of, arising
out of or resulting from (i) the breach of any representation or warranty made
by Buyer and contained in this Agreement or (ii) the breach of any covenant or
agreement made by Buyer and contained in this Agreement.
5.3. Survival of Representations and Warranties. The representations,
warranties, covenants and agreements made by Buyer and Seller shall survive the
signing and consummation of this Agreement. All representations, covenants and
warranties made by Seller in this Agreement will be deemed to have been relied
upon by Buyer (notwithstanding any investigation by Buyer). All representations,
covenants and warranties made by Buyer in this Agreement will be deemed to have
been relied upon by Seller (notwithstanding any investigation by Seller).
5.4. Notice of Claims. An indemnified party shall give prompt written
notice to the indemnifying party of any claim against the indemnified party
which might give rise to a claim by the indemnified party against the
indemnifying party under the indemnification provisions contained herein,
stating the nature and basis of the claim and the actual or estimated amount
thereof, provided, however, that failure to give such notice will not effect the
obligation of the indemnifying party to provide indemnification in accordance
with the terms of Section 5.1 or 5.2 unless, and only to the extent that, the
indemnifying party is actually prejudiced thereby. In the event that any action,
suit or proceeding is brought against any indemnified party with respect to
which the indemnifying party may have liability under the indemnification
provisions contained herein, the indemnifying
4
<PAGE>
party shall, upon written acknowledgement by the indemnifying party that such
action, suit or proceeding is an indemnifiable Loss pursuant to Section 5.1 or
5.2, have the right, at the cost and expense of the indemnifying party, to
defend such action in the name and on behalf of the indemnified party (using
counsel satisfactory to the indemnified party), and, in connection with any such
action, the indemnified party and the indemnifying party agree to render to each
other such assistance as may reasonably be required in order to ensure proper
and adequate defense of such action, provided, however, that an indemnified
party shall have the right to retain its own counsel, with fees and expenses
paid by the indemnifying party, if representation of such indemnified party by
counsel retained by the indemnifying party would be inappropriate because of
actual or potential differing interests between such indemnified party and the
indemnifying party. If the indemnifying party shall fail to defend such action,
suit or proceeding, then the indemnified party shall have the right to defend
such action without prejudice to its rights to indemnification under Section 5.1
or 5.2 and, in connection therewith, the indemnified party and the indemnifying
party agree to render to each other such assistance as may reasonably be
required in order to ensure proper and adequate defense of such action. Neither
the indemnified party nor the indemnifying party shall make any settlement of
any claim which might give rise to liability of the indemnifying party under the
indemnification provisions contained herein without the written consent of each
party, which consent shall not be unreasonably withheld, delayed or conditioned.
6. OTHER AGREEMENTS
6.1. Termination of Pledge. Each of Buyer and the Company hereby consents
to the termination of the Pledge Agreement and the release of the proceeds from
the sale of the Preferred Stock to Seller pursuant hereto, subject to any claims
of Citicorp USA Inc. pursuant to the Citicorp Pledge Agreement.
7. GENERAL
7.1. Expenses. All expenses of the preparation, execution and consummation
of this Agreement and of the transactions contemplated hereby including, without
limitation, attorneys', accountants' and outside advisors' fees and
disbursements, shall be borne by the party incurring such expense.
7.2. Entire Agreement. This Agreement contains the entire understanding of
the parties and supersede all prior agreements and understandings relating to
the subject matter hereof and this Agreement shall not be amended except by a
written instrument hereafter signed by all of the parties hereto.
5
<PAGE>
7.3. Assignment. None of the parties hereto may assign its rights or
delegate its obligations under this Agreement without the written consent of the
other parties hereto. This Agreement and all of the provisions hereof shall be
binding upon and inure only to the benefit of the parties hereto and their
respective heirs, executors, personal representatives and successors.
7.4. Further Action. Each of the parties hereto shall use all reasonable
efforts to do, or cause to be done, all things necessary, proper or advisable
under applicable law to carry out the provisions of this Agreement and shall
execute and deliver such documents and other papers as may be required to carry
out the provisions of this Agreement.
7.5. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally or by fax or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
if to Buyer, a copy to:
Intermedia Communications Inc.
3625 Queen Palm Drive
Tampa, Florida 33619
Attention: Chief Financial Officer
Telecopy: (813) 829-2470
with a copy to:
Kronish, Lieb, Weiner & Hellman LLP
1114 Avenue of the Americas
New York, NY 10036
Attention: Ralph J. Sutcliffe, Esq.
Telecopy: (212) 479-6275
if to Seller, a copy to:
RHI Holdings, Inc.
c/o The Fairchild Corporation
300 West Service Road
P.O. Box 10803
Chantilly, VA 22021
Telecopy No.: (703) 478-5775
Attention: Donald E. Miller, Esq.
if to the Company, a copy to:
Shared Technologies, Inc.
100 Great Meadow Road, Suite 104
6
<PAGE>
Wethersfield, CT 06109
Telecopy No.: (860) 258-2455
Attention: Kenneth M. Dorros, Esq.
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005
Telecopy No.: (212) 269-5420
Attention: James J. Clark, Esq.
7.6. Specific Performance. The parties agree that due to the unique subject
matter of this transaction, monetary damages will be insufficient to compensate
the non-breaching party in the event of a breach of any part of this Agreement.
Accordingly, the parties agree that the non-breaching party shall be entitled
(without prejudice to any other right or remedy to which it may be entitled) to
an appropriate decree of specific performance, or an injunction restraining any
violation of this Agreement or other equitable remedies to enforce this
Agreement (without establishing the likelihood of irreparable injury or posting
bond or other security), and the breaching party waives in any action or
proceeding brought to enforce this Agreement the defense that there exists an
adequate remedy at law.
7.7. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated thereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated by this Agreement be consummated as
originally contemplated to the fullest extent possible.
7.8. Headings. The headings of Sections and Subsections are for reference
only and shall not limit or control the meaning thereof.
7.9. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
7.10. GOVERNING LAW. THE VALIDITY AND CONSTRUCTION OF THIS AGREEMENT SHALL
BE GOVERNED BY THE INTERNAL LAWS (AND NOT
7
<PAGE>
THE PRINCIPLES OF CONFLICT OF LAWS) OF THE STATE OF DELAWARE.
7.11. VENUE. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF DELAWARE OR OF THE
UNITED STATES OF AMERICA RESIDING IN THE STATE OF DELAWARE AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO HEREBY ACCEPT FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HEREBY WAIVES, AND AGREES NOT
TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION
OR ENFORCEMENT OF THIS AGREEMENT THAT IT IS NOT SUBJECT THERETO OR THAT SUCH
ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID
COURTS OR THAT THIS AGREEMENT MAY NOT BE ENFORCED IN OR BY SAID COURTS OR THAT
ITS PROPERTY IS EXEMPT OR IMMUNE FROM EXECUTION, THAT THE SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER OR (PROVIDED THAT PROCESS SHALL BE SERVED IN
ANY MANNER REFERRED TO IN THE FOLLOWING SENTENCE) THAT SERVICE OF PROCESS UPON
SUCH PARTY IS INEFFECTIVE. EACH PARTY AGREES THAT SERVICE OF PROCESS IN ANY SUCH
ACTION, SUIT OR PROCEEDING AGAINST IT WITH RESPECT TO THIS AGREEMENT MAY BE MADE
UPON IT IN ANY MANNER PERMITTED BY THE LAWS OF THE STATE OF DELAWARE OR THE
FEDERAL LAWS OF THE UNITED STATES. SERVICE OF PROCESS IN ANY MANNER REFERRED TO
IN THE PRECEDING SENTENCE SHALL BE DEEMED, IN EVERY RESPECT, EFFECTIVE SERVICE
OF PROCESS UPON SUCH PARTY.
[SIGNATURE PAGE FOLLOWS]
8
<PAGE>
7.12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY OR AGAINST IT ON
ANY MATTERS WHATSOEVER, IN CONTRACT OR IN TORT, ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS AGREEMENT.
IN WITNESS WHEREOF, and intending to be legally bound thereby, the parties
hereto have caused this Agreement to be duly executed and delivered by their
duly authorized officers as of the date and year first above written.
INTERMEDIA COMMUNICATIONS INC.
By: _____________________________
Name:
Title:
RHI HOLDINGS, INC.
By: _____________________________
Name:
Title:
SHARED TECHNOLOGIES FAIRCHILD INC.
By: _____________________________
Name:
Title:
9
<PAGE>
By signing below each of Shared Technologies Fairchild Inc. (formerly known
as Shared Technologies, Inc.), RHI Holdings, Inc. and Anthony D. Autorino hereby
consent to the transactions contemplated by this Agreement and hereby amend the
terms of that certain Shareholder's Agreement, dated March 13, 1996, to the
extent necessary to permit the transactions contemplated by the terms of this
Agreement.
SHARED TECHNOLOGIES FAIRCHILD INC.
By: _____________________________
Name:
Title:
RHI HOLDINGS, INC.
By: _____________________________
Name:
Title:
---------------------------------
ANTHONY D. AUTORINO
10
EXECUTION COPY
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of November 20, 1997 (this "Agreement"),
among INTERMEDIA COMMUNICATIONS INC., a Delaware corporation ("Purchaser"), and
the individuals and entities whose names and addresses are set forth at the foot
of this Agreement (collectively, the "Stockholders", and each, individually, a
"Stockholder"), it being understood that the Stockholders are executing this
Agreement in their capacity as stockholders of the Company (as defined below)
and not in their capacity as directors or officers of the Company.
WHEREAS, Purchaser and its wholly owned subsidiary, Moonlight Acquisition
Corp. (the "Subsidiary"), propose to enter into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), with Shared Technologies
Fairchild, Inc., a Delaware corporation (the "Company"), which Merger Agreement
provides, among other things, for the acquisition of the Company by Subsidiary
through a merger pursuant to which Subsidiary will merge with and into the
Company (the "Merger") and all outstanding shares of Common Stock of the
Company, par value $.01 per share ("Company Common Stock") other than shares
held by Purchaser and Subsidiary will be converted into the right to receive
$15.00 per share (the "Per Share Amount") and each outstanding share of
Preferred Stock of the Company, par value, $.01 per share ("Company Preferred
Stock") which is convertible into Common Stock and is not owned by Purchaser
will be converted into the right to receive the Per Share Amount multiplied by
the number of shares of Company Common Stock into which such share of Company
Preferred Stock is convertible which would have been received had such share of
Preferred Stock been converted immediately prior to the Merger (the "Preferred
Stock Per Share Amount"), in each case, net to the holder thereof in cash; and
WHEREAS, as of the date hereof, the Stockholders own (both beneficially and
of record) the number of shares of Company Common Stock, options to purchase
Company Common Stock ("Options") and Company Preferred Stock set forth opposite
their respective names at the foot of this Agreement; and
WHEREAS, as a condition to the willingness of Purchaser and the Subsidiary
to enter into the Merger Agreement, Purchaser and the Subsidiary have required
that the Stockhold-
<PAGE>
ers agree, and in order to induce Purchaser and the Subsidiary to enter into the
Merger Agreement, the Stockholders have agreed, to enter into this Agreement
governing the voting and disposition of the shares of Company Common Stock,
Company Common Stock issuable upon exercise of Options and Company Preferred
Stock now owned and which may hereafter be acquired by any of the Stockholders
(the "Shares").
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
1. Grant of Option. Each Stockholder hereby grants to Purchaser an exclusive
and irrevocable option (each an "Option", and together the "Options") to
purchase from such Stockholder any and all Shares held by such Stockholder
(the "Option Shares") at a price equal to the Per Share Amount, net to the
Seller in cash, for each Share which is a share of Company Common Stock and
a price equal to the Preferred Stock Per Share Amount, net to the Seller in
cash, for each Share which is a share of Company Preferred Stock. Purchaser
may assign to any subsidiary or affiliate of Purchaser (including
Subsidiary) the right to exercise the Options. Each Option may be exercised
individually from each Stockholder, in whole or in part, at any time or
from time to time, on or after the date hereof and prior to the Termination
Date (as defined below). No Stockholder shall, prior to the termination of
the Option, take, or refrain from taking, any action which would have the
effect of preventing or disabling such Stockholder from delivering the
Option Shares or otherwise performing its obligations under this Agreement.
In the event Purchaser wishes to exercise any Option, in whole or in part,
the following procedures shall be followed:
(a) Purchaser shall send a written notice to such Stockholder specifying
the number and kind of Option Shares Purchaser will purchase and the
place and date on or before the later of (x) ten business days from
the date such notice is mailed, (y) two days after the date of
expiration or termination of any applicable waiting period under Title
II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the
"HSR Act") and (z) two days after
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the receipt of any necessary approvals from the Federal Communications
Commission (the "FCC") or any applicable State regulatory authority
for the closing of such purchase. If such closing is to occur sooner
than ten business days from the date such notice is mailed, notice
shall also be given at the time such written notice is given by
telephone or telecopy. To the extent such notice provides for the
purchase of Option Shares issuable upon exercise of Options, the
Stockholder hereby agrees to exercise the option relating to such
Option Shares sufficiently prior to such closing to permit
certificates for such Option Shares to be delivered at such closing.
(b) At the closing of such purchase, (i) Purchaser (or any affiliate or
subsidiary of Purchaser) shall pay to such Stockholder the aggregate
price for the Option Shares so purchased by certified or cashier's
check or wire transfer of immediately available funds and (ii) such
Stockholder shall deliver to Purchaser (or, at the option of
Purchaser, an affiliate or subsidiary of Purchaser) a certificate or
certificates, duly endorsed in blank or accompanied by stock powers
duly executed in blank, representing the number of Option Shares
purchased.
(c) To the extent any Stockholder has sold any Option Shares to Purchaser
pursuant to that certain purchase agreement dated the date hereof or
pursuant to the Lender offer to be made pursuant to the Merger
Agreement prior to the exercise of the Option, such Option Shares
shall cease to be Option Shares subject to this Agreement.
2. Voting of Shares. Each Stockholder, until the Termination Date, shall cause
the Shares owned by such Stockholder to be voted at any meeting of the
stockholders of the Company or in any consent in lieu of such a meeting in
favor of the consummation of the transactions contemplated by the Merger
Agreement, against any transactions inconsistent therewith, and as
otherwise reasonably requested by Purchaser in or-
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der to carry out the purposes of the Merger Agreement. For the purposes of
this Agreement, "Termination Date" shall mean the earlier of (i) two days
after the termination of the Merger Agreement in accordance with its terms,
(ii) the Effective Time (as defined in the Merger Agreement), and (iii) the
termination of this Agreement by the mutual written agreement of the
parties hereto or pursuant to the terms of Section 9 of this Agreement.
3. Irrevocable Proxy. Each Stockholder hereby irrevocably appoints Purchaser,
until the Termination Date, as its attorney and proxy pursuant to the
provisions of Section 212 of the General Corporation Law of the State of
Delaware, with full power of substitution, to vote and take other actions
(by written consent or otherwise) in favor of the consummation of the
transactions contemplated by the Merger Agreement, against any transactions
inconsistent therewith, and as otherwise reasonably required in order to
carry out the purposes of the Merger Agreement, with respect to the Shares
(and all other securities issued to the Stockholder in respect of the
Shares) which each Stockholder is entitled to vote at any meeting of
stockholders of the Company (whether annual or special and whether or not
an adjourned or postponed meeting) or in respect of any consent in lieu of
any such meeting or otherwise. This proxy and power of attorney is
irrevocable and coupled with an interest in favor of Purchaser. Each
Stockholder hereby revokes all other proxies and powers of attorney with
respect to the Shares (and all other securities issued to the Stockholder
in respect of the Shares) which it may have heretofore appointed or
granted, and no subsequent proxy or power of attorney shall be given or
written consent executed (and if given or executed, shall not be effective)
by the Stockholder with respect thereto.
4. No Disposition or Encumbrance of Shares. Each Stockholder hereby covenants
and agrees that, until the expiration of the Options as provided in Section
1 of this Agreement, except as contemplated by this Agreement, the
Stockholder shall not, and shall not offer or agree to, sell, transfer,
tender, assign, hypothecate or otherwise dispose of, or create or permit to
exist any security interest, lien, claim, pledge, option, right of first
refusal, agreement, limitation
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on the Stockholder's voting rights, charge or other encumbrance of any
nature whatsoever with respect to the Shares, except for the security
interest arising from that certain Pledge Agreement dated as of March 13,
1996 between RHI Holdings, Inc. and Gadsby & Hannah (the "Pledge Agent")
and except for the security interest arising from that certain Amended and
Restated Pledge Agreement dated as of July 18, 1997 between RHI Holdings,
Inc. and Citicorp USA, Inc. (the "Citicorp Pledge Agreement").
5. No Solicitation of Transactions. Each Stockholder shall not, directly or
indirectly, through any agent or representative or otherwise, (i) solicit,
initiate or encourage the submission of any proposal or offer from any
individual, corporation, partnership, limited partnership, syndicate,
person (including, without limitation, a "person" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934 as amended), trust,
association or entity or government, political subdivision, agency or
instrumentality of a government (collectively, other than Purchaser and any
affiliate of Purchaser, a "Person") relating to (a) any acquisition or
purchase of all or any of the Shares or (b) any acquisition or purchase of
all or any portion of the assets of, or any equity interest in, the Company
or any subsidiary of the Company or any business combination with the
Company or any subsidiary of the Company or (ii) participate in any
negotiations regarding, or furnish to any Person any information with
respect to, or otherwise cooperate in any way with, or assist or
participate or facilitate or encourage, any effort or attempt by any Person
to do or seek any of the foregoing. Each Stockholder immediately shall
cease and cause to be terminated all existing discussions or negotiations
of the Stockholder and its agents or other representatives with any Person
conducted heretofore with respect to any of the foregoing. Each Stockholder
shall notify Purchaser promptly if any such proposal or offer, or any
inquiry or contact with any Person with respect thereto, is made and shall,
in any such notice to Purchaser, indicate in reasonable detail the identity
of the Person making such proposal, offer, inquiry or contact and the terms
and conditions of such proposal, offer, inquiry or contact. The provisions
of this Section 3 shall not apply to or restrict any ac-
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<PAGE>
tion that may be taken by the Stockholder in its capacity as an officer or
director of the Company.
6. Legend on Certificates. The certificate(s) evidencing the Shares and the
agreements evidencing the Options shall be endorsed with a restrictive
legend substantially as follows:
The shares [options] evidenced by this certificate [agreement] are
subject to a stock option agreement dated as of November 20, 1997
between the registered holder hereof and Intermedia Communications
Inc., a copy of which is on file at the principal office of the
Company. The holder of this certificate [agreement], by his acceptance
hereof, agrees to be bound by all the terms of such agreement, as the
same is in effect from time to time.
7. Representations and Warranties of the Stockholders. Each Stockholder hereby
severally represents and warrants with respect to itself and its ownership
of the Shares to Purchaser and the Subsidiary as follows:
(a) Authority Relative to this Agreement. The Stockholder has all
necessary power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by the Stockholder and the consummation by the Stockholder
of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of the Stockholder.
This Agreement has been duly and validly executed and delivered by the
Stockholder and, assuming the due authorization, execution and
delivery by Purchaser, constitutes a legal, valid and binding
obligation of the Stockholder, enforceable against the Stockholder in
accordance with its terms, except that such enforceability may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally.
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(b) No Conflict. The execution and delivery of this Agreement by the
Stockholder does not, and the performance of this Agreement by the
Stockholder will not, (i) require any consent, approval, authorization
or permit of, or filing with or notification to (other than pursuant
to the HSR Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and the Other Regulatory Approvals), any governmental
or regulatory authority, domestic or foreign, (ii) conflict with or
violate the Certificate of Incorporation or By-laws (or comparable
organizational documents) of the Stockholder, (iii) conflict with or
violate any law, rule, regulation, order, judgment or decree
applicable to the Stockholder or by which any property or asset of the
Stockholder is bound, or (iv) result in any breach of or constitute a
default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation
of a lien or other encumbrance of any nature whatsoever on any
property or asset of the Stockholder pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Stockholder
is a party or by which the Stockholder or any property or asset of the
Stockholder is bound except that a consent pursuant to that certain
Shareholders' Agreement dated March 13, 1996 by and among Shared
Technologies Inc., RHI Holdings Inc. and Anthony D. Autorino (the
"Shareholders Agreement") may be required and have been obtained.
(c) Title to the Shares. The Shares and Options owned by the Stockholder
(as set forth on the signature pages hereto) are all the Shares and
Options of the Company owned, either of record or beneficially, by the
Stockholder. The Stockholder owns all such Shares free and clear of
all security interests, liens, claims, pledges, options, rights of
first refusal, agreements, limitations on the Stock-
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holder's voting rights, charges and other encumbrances of any nature
whatsoever (except for the liens granted to the Pledge Agent and
pursuant to the Citicorp Pledge Agreement), and, except as provided in
this Agreement, other than the Shareholders Agreement, the Pledge
Agreement and the Citicorp Pledge Agreement, the Stockholder has not
appointed or granted any proxy, which appointment or grant is still
effective, with respect to the Shares. RHI hereby agrees to obtain a
release from their limitation on voting rights in the Citicorp Pledge
Agreement within 10 days after the date of this Agreement.
(d) Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on
behalf of the Stockholder.
8. Representations and Warranties of Purchaser. Purchaser hereby represents
and warrants to the Stockholders as follows:
(a) Purchaser has all necessary power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by Purchaser and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary action on the part of Purchaser. This Agreement has been
duly and validly executed and delivered by Purchaser and, assuming the
due authorization, execution and delivery by the Stockholders,
constitutes a legal, valid and binding obligation of Purchaser,
enforceable against the Purchaser in accordance with its terms, except
that such enforceability may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally.
(b) No Conflict. The execution and delivery of this Agreement by Purchaser
does not, and the performance of this Agreement by Purchaser
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<PAGE>
will not, (i) require any consent, approval, authorization or permit
of, or filing with or notification to (other than pursuant to the HSR
Act, the Exchange Act and the Other Regulatory Approvals), any
governmental or regulatory authority, domestic or foreign, (ii)
conflict with or violate the Certificate of Incorporation or By-laws
of Purchaser, (iii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Purchaser or by
which any property or asset of Purchaser is bound, or (iv) result in
any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to
others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other
encumbrance of any nature whatsoever on any property or asset of
Purchaser pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which Purchaser is a party or by which Purchaser or any
property or asset of Purchaser is bound.
(c) Brokers. Other than Bear, Stearns & Co., Inc., no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated hereby
based upon arrangements made by or on behalf of Purchaser.
9. Termination of Agreement. Purchaser reserves the right in its sole
discretion at any time hereafter to terminate this Agreement, the Options
and all irrevocable proxies granted to it hereunder.
10. Miscellaneous.
(a) Expenses. Except as otherwise provided herein or in the Merger
Agreement, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party
incurring such expenses.
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<PAGE>
(b) Further Assurances. Purchaser and the Stockholders will execute and
deliver all such further documents and instruments and take all such
further action as may be necessary in order to consummate the
transactions contemplated hereby.
(c) Specific Performance. The parties hereto agree that irreparable damage
would occur in the event any of the provisions of this Agreement were
not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof (without
establishing the likelihood of irreparable injury or posting bond or
other security) in addition to any other remedy to which they may be
entitled at law or in equity.
(d) Entire Agreement. This Agreement constitutes the entire agreement
between Purchaser and the Stockholders with respect to the subject
matter hereof and supersedes all prior agreements and understandings,
both written and oral, between Purchaser and the Stockholders with
respect to the subject matter hereof.
(e) Assignment. This Agreement shall not be assigned by operation of law
or otherwise, except that Purchaser may assign all or any of its
rights and obligations hereunder to any affiliate of Purchaser,
provided that no such assignment shall relieve Purchaser of its
obligations hereunder if such assignee does not perform such
obligations.
(f) Obligations of Successors; Parties in Interest. This Agreement shall
be binding upon, inure solely to the benefit of, and be enforceable
by, the successors and permitted assigns of the parties hereto.
Nothing in this Agreement, express or implied, is intended to or shall
confer upon any other person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
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(g) Amendment; Waiver. This Agreement may not be amended or changed except
by an instrument in writing signed by the parties hereto. Any party
hereto may (i) extend the time for the performance of any obligation
or other act of the other party hereto, (ii) waive any inaccuracy in
the representations and warranties contained herein or in any document
delivered pursuant hereto and (iii) waive compliance with any
agreement or condition contained herein. Any such extension or waiver
shall be valid if set forth in an instrument in writing signed by the
party or parties to be bound thereby.
(h) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, which shall remain in full force
and effect.
(i) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in
person, by cable, telecopy, telegram or telex or by registered or
certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other
address for a party as shall be specified in a notice given in
accordance with this Section 7(i)):
if to Purchaser:
Intermedia Communications Inc.
3625 Queen Palm Drive
Tampa, Florida 33619
Attention: Chief Financial Officer
Telecopy: (813) 829-2470
with a copy to:
Kronish, Lieb, Weiner & Hellman LLP
1114 Avenue of the Americas
New York, New York 10036
Attention: Ralph J. Sutcliffe, Esq.
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Telecopy: (212) 997-3527
if to any Stockholder:
at the respective addresses of such Stockholder set forth at the foot of
this Agreement.
(j) Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State.
(k) Headings. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
(l) Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the
same agreement.
(m) The obligations of the Stockholders hereunder are several and no
Stockholder shall be liable for any breach by any other Stockholder if
his or its obligations hereunder.
(n) WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY RIGHT IT MIGHT HAVE
TO A JURY TRIAL OF ANY DISPUTE ARISING IN CONNECTION WITH THIS
AGREEMENT.
11. Consents. Each of the Stockholders, the Company and RHI Holdings, Inc.
hereby consents to the execution and delivery of this Agreement by all
parties hereto and the grants of voting rights and Options pursuant hereto
and agrees that all Option Shares purchased by Purchasers pursuant hereto
shall be acquired free and clear of any obligation under the Shareholders
Agreement.
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IN WITNESS WHEREOF, Purchaser has caused this Agreement to be executed by
its officers thereunto duly authorized and the Stockholders and the Company have
duly executed or caused this Agreement to be executed by its officers thereunto
duly authorized as of the date first written above.
PURCHASER:
INTERMEDIA COMMUNICATIONS INC.
By:
-------------------------------------
Name: Robert M. Manning
Title: Senior Vice President and
Chief Financial Officer
SHAREHOLDERS: NUMBER OF SHARES OWNED:
RHI HOLDINGS, INC. 6,225,000 Company Common Stock
250,000 Company Preferred Stock
By:
-------------------------------
Name:
Title:
Address: c/o The Fairchild Corporation
300 West Service
PO Box 10803
Chantilly, Virginia
Attention: Donald Miller, Esq.
Telecopy: (703) 478-5775
[Signature Pages Continue on Next Page]
Anthony D. Autorino 870,416 Company Common Stock
Options to purchase 296,667
shares of Company Common Stock
Address: c/o Shared Technologies Fairchild, Inc.
100 Great Meadow Road
Wethersfield, Connecticut 06109
Attention: Kenneth Doros
Telecopy: (860) 258-2455
Jeffrey J. Steiner up to 47,500 Company Common Stock
Options to purchase 116,667 shares
of Company Common Stock
<PAGE>
- ---------------------------------
Address: c/o The Fairchild Corporation
300 West Service
PO Box 10803
Chantilly, Virginia
Attention: Donald Miller, Esq.
Telecopy: (703) 478-5775
SHARED TECHNOLOGIES FAIRCHILD INC.
By:
-----------------------------------------
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