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EXHIBIT 4.5
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS
EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH IN SECTION 3 OF THIS WARRANT
Warrant No. M-1 No. of Shares 5,000,000
(subject to adjustment)
Date of Issuance: MARCH 14, 2001
SHARED TECHNOLOGIES CELLULAR, INC.
COMMON STOCK PURCHASE WARRANT
SHARED TECHNOLOGIES CELLULAR, INC. (the "Company"), for value received,
hereby certifies that MOBILE INVESTMENTS LLC, or its registered assigns (the
"Registered Holder"), is entitled, subject to the terms set forth below, to
purchase from the Company, at any time or from time to time on or after MARCH
14, 2001 and on or before ten (10) business days after the receipt by the
Registered Holder of the Warrant Notice (as defined below) (the "Exercise
Period") at not later than 5:00 p.m. (Eastern time), 5,000,000 SHARES of Common
Stock, $0.01 par value per share, of the Company ("Common Stock") (subject to
appropriate adjustment in the event of any stock dividend, stock split, reverse
stock split, combination or other similar recapitalization affecting such Common
Stock), at a purchase price per share of $0.30; provided, however, if the
Obligations (as hereinafter defined) are not repaid in full by September 30,
2001 by the Company, then the purchase price per share shall be $.015. The
number of shares purchasable upon exercise of this Warrant, and the purchase
price per share, each as adjusted from time to time pursuant to the provisions
of this Warrant, are hereinafter referred to as the "Warrant Stock" and the
"Purchase Price," respectively. "Warrant Notice" shall mean written notice from
the Company to the Registered Holder stating that the Exercise Period shall
terminate ten (10) business days after the receipt by the Registered Holder of
such notice. The Company shall be permitted to send such Warrant Notice to the
Registered Holder only after the later to occur of September 14, 2001 or the
date on which the Company pays in full all obligations (the "Obligations") owing
to the Registered Holder as described in that certain commitment letter dated
the date hereof from the Registered Holder to the Company.
1. Exercise.
Cash Exercise. The purchase right represented by this Warrant may be
exercised by the Registered Holder, in whole or in part, by the surrender of
this Warrant (with the purchase form attached hereto as Exhibit 1 duly executed)
at the principal office of the Company and by the payment to the Company, by
check or wire transfer, of an amount equal to the then applicable Purchase Price
multiplied by the number of shares then being purchased. The Company agrees that
the shares so purchased shall be deemed to be issued to the Registered Holder as
the record owner of such shares as of the close of business on the date on which
this Warrant shall have been
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surrendered and payment made for such shares as aforesaid. In the event of any
exercise of this Warrant, the Company shall promptly, and in no event later than
ten (10) days after the exercise date, instruct the transfer agent of its Common
Stock to issue to the Registered Holder certificate(s) for the shares of stock
so purchased and, unless this Warrant has been fully exercised or expired, the
Company shall issue to the Registered Holder as soon as practicable, but in any
event within ten (10) days of the exercise date, a new Warrant representing the
portion of the shares, if any, with respect to which this Warrant shall not then
have been exercised.
2. Anti-Dilution Provisions.
(a) Adjustment for Recapitalization. If outstanding shares of the
Company's Common Stock shall be subdivided into a greater number of shares or a
dividend in Common Stock shall be paid in respect of Common Stock, the Purchase
Price in effect immediately prior to such subdivision or at the record date of
such dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately reduced.
If outstanding shares of Common Stock shall be combined into a smaller number of
shares, the Purchase Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased. When any adjustment is required to be made in the
Purchase Price, the number of shares of Warrant Stock purchasable upon the
exercise of this Warrant shall be changed to the number determined by dividing
(i) an amount equal to the number of shares issuable upon the exercise of this
Warrant immediately prior to such adjustment, multiplied by the Purchase Price
in effect immediately prior to such adjustment, by (ii) the Purchase Price in
effect immediately after such adjustment.
(b) Adjustment for Reorganization, Consolidation, Merger, Etc. If
there shall occur any capital reorganization or reclassification of the
Company's Common Stock (other than a change in par value or a subdivision or
combination as provided for in subsection 2(a) above), or any consolidation or
merger of the Company with or into another corporation, or a transfer of all or
substantially all of the assets of the Company, then, as part of any such
reorganization, reclassification, consolidation, merger or sale, as the case may
be, lawful provision shall be made so that the Registered Holder of this Warrant
shall have the right thereafter to receive upon the exercise hereof the kind and
amount of shares of stock or other securities or cash or property which such
Registered Holder would have been entitled to receive if, immediately prior to
any such reorganization, reclassification, consolidation, merger or sale, as the
case may be, such Registered Holder had held the number of shares of Common
Stock which were then purchasable upon the exercise of this Warrant. In any such
case, appropriate adjustment (as reasonably determined by the Board of Directors
of the Company) shall be made in the application of the provisions set forth
herein with respect to the rights and interests thereafter of the Registered
Holder of this Warrant such that the provisions set forth in this Section 2
(including provisions with respect to adjustment of the Purchase Price) shall
thereafter be applicable, as nearly as is reasonably practicable, in relation to
any shares of stock or other securities or cash or property thereafter
deliverable upon the exercise of this Warrant. If any such capital
reorganization, reclassification, consolidation, merger or sale results in a
cash distribution in excess of the Purchase Price provided by this Warrant, the
Registered Holder may, at the Registered Holder's option, exercise this Warrant
without making payment of the Purchase Price, and in such case the Company
shall, upon distribution to the Registered Holder,
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consider the Purchase Price to have been paid in full, and in making settlement
to the Registered Holder, shall deduct an amount equal to the Purchase Price
from the amount payable to the Registered Holder.
(c) Liquidation, Dissolution, Etc. If the Company shall, other
than as provided in Section 2(b) above, dissolve, liquidate or wind up its
affairs, the Registered Holder shall thereafter have the right to receive upon
proper exercise of this Warrant, in lieu of the shares of Common Stock that the
Registered Holder otherwise would have been entitled to receive, the same kind
and amount of securities or assets as would have been issued, distributed or
paid to the Registered Holder upon any such dissolution, liquidation or winding
up with respect to such shares of Common Stock of the Company had the Registered
Holder been the Registered Holder of record of such shares of Common Stock
receivable upon exercise of this Warrant on the date for determining those
entitled to receive any such distribution, provided that the Registered Holder
shall have exercised this Warrant within thirty (30) days notice from the
Company of such dissolution, liquidation or winding up.
(d) Price Protection. The Purchase Price in effect at any time
shall be subject to adjustments from time to time upon the happening of the
events hereinafter specified. No adjustment shall be made for (i) a regular,
periodic dividend payable in cash and declared out of the earned surplus of the
Company as at the date hereof as increased by any credits (other than credits
resulting from a revaluation of property) and decreased by any debits made
thereto after such date or (ii) any Warrant Stock issued or issuable upon
exercise of the Warrant.
(i) Purchase Price Adjustment. If, at any time after the
date hereof, the Company issues or sells any shares of Common Stock for a
consideration per share less than the Purchase Price in effect immediately prior
to the time of such issue or sale, then, forthwith upon such issue or sale, the
Purchase Price in effect immediately prior to such issue or sale shall thereupon
be reduced to a price per share equal to the price per share at which such
shares of Common Stock were issued or sold, or deemed issued or sold pursuant to
the provisions hereof.
(ii) Special Rules for Adjusting the Purchase Price. For
the purposes of Section (i) above, the following subsections (1) to (5),
inclusive, shall also be applicable:
(1) Treatment of Options, Rights, Etc. At any
time the Company grants, issues or sells (whether directly or by assumption in a
merger or otherwise) any rights to subscribe for, or any rights or options to
purchase, Common Stock or any securities convertible into or exchangeable for
Common Stock (such convertible or exchangeable securities being herein called
"Convertible Securities"), whether or not such rights or options or the right to
convert or exchange any such Convertible Securities are immediately exercisable,
and the price per share for which Common Stock is issuable upon the exercise of
such rights or options or upon conversion or exchange of such Convertible
Securities (determined by dividing (i) the total amount, if any, received or
receivable by the Company as consideration for the granting of such rights or
options plus the minimum aggregate amount of additional consideration, if any,
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payable to all the Company upon the exercise of such rights or options plus, in
the case of any such rights or options that relate to such Convertible
Securities, the minimum aggregate amount of additional consideration, if any,
payable upon the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (ii) the total maximum number of shares of
Common Stock issuable upon the exercise of such rights or options or upon the
conversion or exchange of all such Convertible Securities issuable upon the
exercise of such rights or options) is less than the Purchase Price in effect
immediately prior to the granting of such rights or options, then the maximum
number of shares of Common Stock issuable upon the exercise of such rights or
options or upon conversion or exchange of the maximum number of such Convertible
Securities issuable upon the exercise of such rights or options shall be deemed
to be outstanding as of the date of granting of such rights or options and to
have been issued for such price per share and the Purchase Price shall be
adjusted as of the date of the granting of such rights or options as set forth
in Section (i) above; provided, however, that except as provided in Section
(iii) below, no further adjustments of the Purchase Price shall be made upon the
actual issue of such Common Stock or of such Convertible Securities upon
exercise of such rights of options or upon the actual issue of such Common Stock
upon conversion or exchange of such Convertible Securities.
(2) Treatment of Convertible Securities. At any
time the Company issues or sells (whether directly or by assumption in a merger
or otherwise) any Convertible Securities, whether or not the rights to exchange
or convert thereunder are immediately exercisable, and the price per share for
which Common Stock is issuable upon such conversion or exchange (determined by
dividing (i) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities plus the
minimum aggregate amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof, by (ii) the total maximum
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities) is less than the Purchase Price in effect
immediately prior to the time of such issue or sale, then the maximum number of
shares of Common Stock issuable upon conversion or exchange of all such
Convertible Securities shall be deemed to be outstanding as of the date of the
issue or sale of such Convertible Securities and to have been issued for such
price per share and the Purchase Price shall be adjusted as of the date of such
issue or sale as set forth in Section (i) above; provided, however, that (A)
except as provided in Section (iii) below, no further adjustments of the
Purchase Price shall be made upon the actual issue of such Common Stock upon
conversion or exchange of such Convertible Securities and (B) if any such issue
or sale or such Convertible Securities is made upon exercise of any rights to
subscribe for or to purchase or any option to purchase any such Convertible
Securities for which adjustments of the Purchase Price have been or are to be
made pursuant to other provisions of this Section(ii), no further adjustment of
the Purchase Price shall be made by reason of such issue or sale.
(3) Computation of Consideration. For purposes
of this Section (d), in case any shares of Common Stock or Convertible
Securities or any rights or options to purchase any such Common Stock or
Convertible Securities shall be issued or sold:
a. for cash, the consideration
received therefor shall be deemed to be the amount received by the Company
therefor, without deduction therefrom of any expenses incurred or any
underwriting commissions or concessions or discounts paid or allowed by the
Company in connection therewith;
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b. for consideration other than cash,
the amount of the consideration other than cash received by the Company shall be
deemed to be the Fair Market Value of such consideration as reasonably
determined in good faith by the board of directors of the Company, without
deduction therefrom of any expenses incurred or any underwriting commissions or
concessions or discounts paid or allowed by the Company in connection therewith;
and
c. in connection with any merger or
consolidation of another corporation into the Company (other than any merger or
consolidation in which the previously outstanding shares of Common Stock of the
Company shall be changed into or exchanged for the stock or other securities of
another corporation), the amount of consideration therefor shall be deemed to be
the Fair Market Value of the portion of the assets and business of such merged
or consolidated corporation attributable to such Common Stock, Convertible
Securities, rights and/or options as reasonably determined in good faith by the
board of directors of the Company after deducting therefrom all cash and other
consideration, if any, paid by the Company in connection with such merger or
consolidation.
In the event of any consolidation or merger of the Company in
which the Company is not the surviving corporation or in which the previously
outstanding shares of Common Stock of the Company shall be changed into or
exchanged for the stock or other securities of another corporation or in the
event of any sale of all or substantially all of the property and assets and/or
the stock of the Company for stock or other securities of any corporation, the
Registered Holders shall receive either the marketable stock, securities or
other property and assets of the other corporation computed on the basis of the
actual exchange ratio on which the transaction was predicated and for a
consideration equal to the Fair Market Value on the date of such transaction of
all such stock, securities or other property and assets of the other
corporation. If any calculation required under the immediately preceding
sentence results in adjustment of the Purchase Price, the determination of the
number of shares of Warrant Stock issuable upon exercise of the Warrant
immediately prior to such merger, consolidation or sale shall be made after
giving effect to such adjustment of the Purchase Price.
(4) Record Date. At any time the Company takes a
record of the holders of its Common Stock for the purpose of entitling them (i)
to receive a dividend or other distribution payable in Common Stock or
Convertible Securities or (ii) to subscribe for or purchase Common Stock or
Convertible Securities, then such record date shall be deemed to be the date of
the actual issue or sale of the shares of Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the actual granting of such right of subscription or
purchase, as the case may be.
(5) Treasury Shares. The number of shares of
Common Stock outstanding at any given time shall not include shares of Common
Stock directly or indirectly owned or held by or for the account of the Company
or any of its subsidiaries, and the disposition of any such shares of Common
Stock shall be considered an issue or sale of shares of Common Stock for the
purposes of this Section(ii).
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(iii) Certain Readjustments. If the purchase price provided
for in any right or option referred to in Section (ii)(1), or the additional
consideration, if any, payable upon the conversion or exchange of Convertible
Securities referred to in Section(ii)(1) or (ii)(2), or the rate at which any
Convertible Securities referred to in Section(ii)(1) or (ii)(2) are convertible
into or exchangeable for Common Stock, shall change or a different purchase
price or rate shall become effective at any time or from time to time (other
than under or by reason of provisions designed to protect against dilution),
then, upon such change becoming effective, the Purchase Price then in effect
under the Warrant shall thereupon be readjusted to such Purchase Price as would
have been in effect had the adjustments made upon the granting or issuance of
such rights or options or Convertible Securities been made upon the basis of (i)
the issuance of the number of shares of Common Stock theretofore actually
delivered upon the exercise of such options or rights or upon the conversion or
exchange of such Convertible Securities, and the total consideration received
therefor, and (ii) the granting or issuance at the time of such change of any
such options, rights or Convertible Securities then still outstanding for the
consideration, if any, received by the Company therefor and to be received on
the basis of such changed price. On the expiration of any right or option
referred to in Section (ii)(1), or on the termination of any right to convert or
exchange any Convertible Securities referred to in Section (ii)(1) or (ii)(2),
the Purchase Price then in effect under the Warrant shall thereupon be
readjusted to the Purchase Price as would have been in effect had the adjustment
made upon the granting or issuance of such rights or options or Convertible
Securities been made upon the basis of the issuance or sale of only the number
of shares of Common Stock actually issued upon the exercise of such options or
rights or upon the conversion or exchange of such Convertible Securities. If the
purchase price provided for in any such right or option, or the rate at which
any such Convertible Securities are convertible into or exchangeable for Common
Stock, shall change at any time under or by reason of provisions with respect
thereto designed to protect against dilution, then in case of the delivery of
Common Stock upon the exercise of any such right or option or upon conversion or
exchange of any such Convertible Security, the Purchase Price then in effect
shall forthwith be decreased to such Purchase Price as would have been obtained
had the adjustments made upon the issuance of such right or option or
Convertible Security never been made as to such Common Stock and had adjustments
instead been made upon the issuance of such right or option or Convertible
Security upon the basis of the issuance of (and the total consideration received
for) the shares of Common Stock delivered as aforesaid.
(iv) Reflection of Adjustments. Notwithstanding any
adjustments in the Purchase Price, any Warrant theretofore or thereafter issued
may continue to express the same price as is stated in this Warrant initially
issued to the Registered Holder.
(v) Certain Events. If (a) in the good faith opinion of
the Registered Holder, any event occurs as to which the other provisions of this
Section (d) are not strictly applicable but the lack of an adjustment would not
in the opinion of the Registered Holders fairly protect the purchase rights of
the Registered Holders in accordance with the basic intent and principles of
such provisions, or if strictly applicable would not fairly protect the purchase
rights of the Registered Holders in accordance with the basic intent and
principles of such provisions and (b) following notice to the Company, the
Registered Holders and the Company shall disagree as to the applicability or
appropriateness of such adjustment, then the Company shall appoint a firm of
independent certified public accountants of recognized national standing (which
may be the
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independent accounting firm then regularly engaged by the Company to report on
the financial statements of the Company), which shall give its opinion upon the
adjustment, if any, on a basis strictly consistent with the basic intent and
principles established in the other provisions of this Section (d), necessary to
preserve, without dilution as provided for herein, the exercise rights of the
Registered Holder in accordance with this Section (d). Upon receipt of such
opinion, the Company shall forthwith make the adjustments described therein,
absent manifest error.
3. Limitation on Sales, Etc. Each Registered Holder of this
Warrant acknowledges that this Warrant and the Warrant Stock have not been
registered under the Securities Act of 1933, as amended (the "Act"), and agrees
not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose
of this Warrant or any Warrant Stock issued upon its exercise in the absence of
(a) an effective registration statement under the Act as to this Warrant or such
Warrant Stock and registration or qualification of this Warrant or such Warrant
Stock under any applicable Blue Sky or state securities law then in effect, or
(b) an opinion of counsel, satisfactory to the Company, that such registration
and qualification are not required. Each certificate or other instrument for
Warrant Stock issued upon the exercise of this Warrant shall bear a legend
substantially to the foregoing effect.
Notwithstanding the foregoing, the Registered Holder may require the
Company to issue a certificate representing the Warrant Stock without a legend
in substitution for a legend certificate representing the Warrant Stock if
either (i) such Warrant Stock has been registered for resale under the Act or
(ii) the Registered Holder has received an opinion of counsel reasonably
satisfactory to the Company that such registration is not required with respect
to such Warrant Stock.
The Company shall use its best efforts to cause all of the Warrant
Stock to be registered for resale under the Act as soon as practicable after the
issuance of this Warrant.
4. No Impairment. The Company will not, by amendment of its
charter or through reorganization, consolidation, merger, dissolution, sale of
assets or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
Registered Holder of this Warrant against impairment.
5. Reservation of Stock. The Company will at all times duly and
validly reserve and keep available, solely for issuance and delivery upon the
exercise of this Warrant, such shares of Warrant Stock and other stock,
securities and property, as from time to time shall be issuable upon the
exercise of this Warrant. All such shares shall be duly authorized and, when
issued upon such exercise, shall be validly issued, fully paid and
nonassessable, free and clear of all taxes, liens, security interests, charges
and other encumbrances or restrictions on sale of any nature whatsoever and free
and clear of all preemptive rights. The issuance of certificates for shares of
Common Stock upon exercise of this Warrant shall be made without charge to the
Registered Holder for any issuance tax or transfer tax in respect thereof, or
other cost incurred by the Company in connection with such exercise and the
related issuance of Warrant Stock.
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6. Registration or Listing. If any shares of Common Stock
required to be reserved hereunder require registration with or approval of any
governmental authority under any Federal or state law (other than any
registration under the 1933 Act, or any similar Federal Statute then enforced,
or any state securities law, required by reason of any transfer involved in such
conversion), or listing on any domestic securities exchange, before such shares
may be issued upon exercise of this Warrant, the Company shall, at its expense
and as expeditiously as possible, use its best efforts to cause such shares to
be duly registered, listed or approved for listing on such domestic securities
exchange, as the case may be.
7. Exchange of Warrants. Upon the surrender by the Registered
Holder of any Warrant properly endorsed to the Company at the principal office
of the Company, the Company will, subject to the provisions of Section 3 hereof,
issue and deliver to or upon the order of such Registered Holder, at the
Company's sole expense, a new Warrant or Warrants of like tenor, in the name of
such Registered Holder or as such Registered Holder (upon payment by such
Registered Holder of any applicable transfer taxes) may direct, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face or faces of the Warrant or Warrants so surrendered.
8. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
9. Representations and Warranties:
(a) Due Authority. The execution and delivery by the
Company of this Warrant and the performance of all obligations of the Company
hereunder, including the issuance to the Registered Holder of the right to
acquire the shares of Warrant Stock upon exercise of the Warrant, have been duly
authorized by all necessary corporate action on the part of the Company, and
this Warrant is not inconsistent with the Company's corporate charter or
by-laws, each as amended to date, to the best of the Company's knowledge, does
not contravene any law or governmental rule, regulation or order applicable to
it, does not and will not contravene any provision of, or constitute a default
under, any material indenture, mortgage, contract or other instrument to which
it is a party or by which it is bound, and this Warrant constitutes a legal,
valid and binding agreement of the Company, enforceable against it in accordance
with their terms.
(b) Consents and Approvals. No consent or approval of,
giving of notice to, registration with, or taking of any other action in respect
of any state, Federal or other governmental authority or agency is required with
respect to the execution, delivery and performance by the Company of its
obligations under this Warrant other than as may be required under state and
Federal securities law.
(c) Exempt Transaction. The issuance of the shares of
Warrant Stock upon exercise of this Warrant will constitute a transaction exempt
from (i) the registration requirements of the Act and (ii) the qualification
requirements of applicable state securities laws.
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10. Transfers, etc.
(a) The Company will maintain a register containing the
names and addresses of the Registered Holder of this Warrant. The Registered
Holder may change its or his address as shown on the warrant register by written
notice to the Company requesting such change.
(b) Subject to the provisions of Section 3 hereof, this
Warrant and all rights hereunder are transferable, in whole or in part, upon
surrender of this Warrant with a properly executed assignment (in the form of
Exhibit 2 hereto) at the principal office of the Company.
(c) Until any transfer of this Warrant is made in the
warrant register, the Company may treat the Registered Holder of this Warrant as
the absolute owner hereof for all purposes; provided, however, that if and when
this Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.
11. Veto Rights. Unless the Company shall obtain the prior written
consent of the Registered Holder, as long as the Warrant remains outstanding the
Company shall not (and shall cause its subsidiaries not to):
(a) Alter, change or amend the preferences or rights of
the Warrant or create a class of securities (including convertible debt) or
reclassify existing securities with rights, preferences or provisions which rank
senior to or on a parity with the Warrant;
(b) Amend the Company's corporate charter or by-laws in
any manner that adversely affects, or could adversely affect, the rights or
preferences of the Warrant (but excluding an increase in the number of shares of
capital stock which the Company is authorized to issue);
(c) Sell, lease or otherwise dispose of all or
substantially all of the assets of the Company, or otherwise be acquired by any
other person (by way or merger or otherwise);
(d) Acquire any other business or company, whether by
purchase of assets, purchase of stock or otherwise, or acquire any proprietary
interest, directly or indirectly, in any corporation, association, trust,
partnership, joint venture or other entity in a transaction or series of
transactions;
(e) Except as may be required by the outstanding Series C
and Series D Preferred Stock, pay dividends on or make other distributions with
respect to any securities except for dividends payable in the form of shares of
Common Stock of the Company;
(f) Repurchase or redeem any securities, except for
redemptions of shares (or options) held by employees of the Company, in a
transaction or series of transactions for an aggregate number of shares of
Common Stock less than five (5%) of the outstanding shares of Common Stock of
the Company on a fully diluted basis at the time of such repurchases or
redemptions;
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(g) Make any capital expenditures individually or in the
aggregate in excess of $500,000 in any fiscal year (except for ordinary course
purchases in accordance with the Company's past practices);
(h) Dissolve, liquidate or wind up the business of the
Company; or
(i) Make any material change in the nature of its
business.
12. Mailing of Notices, etc. All notices and other communications
from the Company to the Registered Holder of this Warrant shall be mailed by
first-class certified or registered mail, postage or charges prepaid, to the
address furnished to the Company in writing by the last Registered Holder of
this Warrant who shall have furnished an address to the Company in writing. All
notices and other communications from the Registered Holder of this Warrant or
in connection herewith to the Company shall be mailed by first-class certified
or registered mail or by reputable overnight courier, postage or charges
prepaid, to the Company at its principal office set forth below. If the Company
should at any time change the location of its principal office to a place other
than as set forth below, it shall give prompt written notice to the Registered
Holder of this Warrant and thereafter all references in this Warrant to the
location of its principal office at the particular time shall be as so specified
in such notice.
13. No Rights as Stockholder. Until the exercise of this Warrant,
the Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.
14. Change or Waiver. Any term of this Warrant may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of the change or waiver is sought.
15. Headings. The headings in this Warrant are for purposes of
reference only and shall not limit or otherwise affect the meaning of any
provision of this Warrant.
16. Governing Law. This Warrant will be governed by and construed
in accordance with the laws of the State of Connecticut without regard to
conflict-of-laws principles that would require the application of the laws of
another jurisdiction.
17. Specific Enforcement. The Company expressly agrees that the
Registered Holder shall be irreparably damaged if this Warrant is not
specifically enforced. Upon a breach or threatened breach of the terms,
covenants and/or conditions of this Warrant by the Company, the Registered
Holder shall, in addition to all other remedies, be entitled to a temporary or
permanent injunction, without showing any actual damage, and/or a decree for
specific performance, in accordance with the provisions hereof.
18. Severability. In the event any one or more of the provisions
of this Warrant shall for any reason be held invalid, illegal or unenforceable,
the remaining provisions of this Warrant shall be unimpaired, and the invalid,
illegal or unenforceable provision shall be replaced by a mutually
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acceptable valid, legal and enforceable provision, which comes closest to the
intention of the parties underlying the invalid, illegal or unenforceable
provision.
19. Covenants:
(a) Compliance with Rule 144. At the written request of
any Registered Holder who proposes to sell shares of Warrant Stock in compliance
with Rule 144 promulgated by the Securities and Exchange Commission, the Company
shall furnish to such Registered Holder, within ten (10) days after receipt of
such request, a written statement confirming the Company's compliance with the
filing requirements of the Securities and Exchange Commission as set forth in
such Rule, as such Rule may be amended from time to time.
(b) Information Rights. So long as any Registered Holder
holds the Warrant and/or any shares of Warrant Stock, the Company shall deliver
to such Registered Holder (a) promptly after mailing, copies of all annual
reports, notices or other written communications to the shareholders of the
Company, (b) within ninety (90) days after the end of each fiscal year of the
Company, the annual audited financial statements of the Company certified by an
accounting firm or other independent public accountants acceptable to the
Registered Holder, and (c) within thirty (30) days after the end of each
calendar month, the Company's preliminary consolidated and consolidating balance
sheet as at the end of such month and preliminary statement of income,
stockholders' equity and cash flow for such month.
20. Opinion of Counsel. Upon execution of this Warrant by the
Company, the Registered Holder shall receive an opinion, dated on or about the
date hereof, from Day, ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to the Company, in form and
substance satisfactory to the Registered Holder.
21. Expenses. The Company shall pay its own expenses in connection
with the transactions contemplated hereby, and the Company shall (i) pay the
costs of effecting the transactions hereunder, including legal fees, plus
disbursements, of the Registered Holder's counsel, ▇▇▇▇▇ ▇▇▇▇▇▇▇ Freed & Gesmer,
P.C., in connection with such transactions, (ii) pay the fees and disbursements
of the Registered Holder's counsel in connection with any subsequent amendment,
waiver, consent or enforcement thereof, and (iii) reimburse the Registered
Holder for all reasonable, direct expenses incurred in connection with such
Registered Holder's "due diligence" investigation of the Company, and the
Company shall pay the amounts described in clauses (i), (ii) and (iii) above,
whether or not such transactions shall be consummated.
22. Board of Directors. The Board of Directors of the Company
agrees to elect two non-executive directors designated by Mobile Investments LLC
(and not its registered assigns) (the "Investor Designee") to fill current
vacancies on the Company's Board of Directors. Mobile Investments LLC (and not
its registered assigns) shall notify the Company of such designation.
Thereafter, the Company agrees to recommend to its shareholders two Investor
Designees among the other directors so recommended for election by the Company
at the first annual meeting of its shareholders called for the purpose of
electing directors of the Company after the issuance of this Warrant. The
Company agrees that it will use its best efforts to call such annual meeting
within 120 days following the issuance of this Warrant. Mobile Investments LLC
(and not its registered assigns) shall notify the Company of such designation.
Following the first annual meeting, in the
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absence of such notice, the Investor Designees then serving and previously
designated by Mobile Investments LLC (and not its registered assigns) shall be
recommended again if still eligible to serve. If there is a vacancy on the board
with respect to the Investor Designee, Mobile Investments LLC (and not its
registered assigns) shall designate another such director and the Company agrees
to so recommend such director at the next meeting called for the purpose of
electing directors. The Company agrees to pay the reasonable out-of-pocket costs
and expenses of any Investor Designee in connection with the attendance by such
Investor Designee at any and all meetings of the Board of Directors of the
Company.
[REMAINDER OF PAGE BLANK]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed and issued by its duly authorized officers as of the date hereof.
[Corporate Seal] SHARED TECHNOLOGIES CELLULAR, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman and CEO
ATTEST: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇
CFO
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EXHIBIT 1
PURCHASE FORM
To: Dated:
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ___), hereby irrevocably elects to exercise the Warrant and to
purchase _____ shares of the Common Stock covered by such Warrant and herewith
makes payment of $________, representing the full purchase price for such shares
at the price per share provided for in such Warrant.
Signature______________________________
Address:_______________________________
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EXHIBIT 2
ASSIGNMENT FORM
FOR VALUE RECEIVED, _____________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (No. _____) with respect to the number of shares of Common Stock covered
thereby set forth below, unto:
Name of Assignee Address No. of Shares
---------------- ------- -------------
The undersigned hereby irrevocably constitutes and appoints
__________________, attorney in fact, to transfer same on the books of the
Company with full power of substitution.
Dated:_____________________ Signature_______________________________
Witness_________________________________