FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER dated as of
February 2, 1996 ("First Amendment") is made by and among Fairchild Industries,
Inc., a Delaware corporation ("Fairchild"), RHI Holdings, Inc., a Delaware
corporation ("RHI"), The Fairchild Corporation, a Delaware corporation ("TFC"),
and Shared Technologies Inc., a Delaware corporation ("Shared Technologies"),
amending certain provisions of the Agreement and Plan of Merger dated as of
November 9, 1995, including the exhibits and schedules thereto (the "Merger
Agreement") by and among Fairchild, RHI, TFC and Shared Technologies. Terms not
otherwise defined herein which are defined in the Merger Agreement shall have
the same respective meanings herein as therein.
WHEREAS, Fairchild, RHI, TFC and Shared Technologies have agreed to
modify certain terms and conditions of the Merger Agreement as specifically set
forth in this First Amendment.
NOW THEREFORE, in consideration of the premises and mutual agreements
contained herein and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
AMENDMENTS TO MERGER AGREEMENT
1.1 References to the distribution of shares of Shared Technologies
Cellular Inc. shall be deleted from sections 5.7(b) and 7.1(c) and in Section
5.5 of the Disclosure Statement.
1.2 Section 6.19 of the Merger Agreement is hereby amended by deleting
the provisions of clause (ii) thereof and by inserting therefor the following:
"(ii) all material Taxes of Fairchild and its subsidiaries in respect
of the pre-Merger period (including but not limited to Taxes
attributable to the Fairchild Reorganization) have been paid in full to
the proper authorities, other than such Taxes as are being contested in
good faith by appropriate proceedings and/or are adequately reserved
for in accordance with generally accepted accounting principles;"
1.3 The first sentence of ss.8.1(c) of the Merger Agreement is hereby
deleted in its entirety.
1.4 The last sentence of ss.8.2(a) of the Merger Agreement is hereby
deleted in its entirety and replaced with the following:
"Shared Technologies shall cause Shared Technologies Cellular, Inc.
("STCI") to enter into an agreement preventing STCI from competing in
the telecommunications systems and service business."
1.5 Section 9.1(f) shall be amended to state "43.5" in place of "47.5".
1.6 Section 9.1 shall be amended to replace the references to
"Recapitalization" with "Reorganization."
1.7 Section 9.2(d) of the Merger Agreement and Schedule 9.2(d) of the
Merger Agreement shall be deleted in their entirety.
1.8 Schedule 9.2(e) shall be amended by adding to the end thereof the
following:
"(h) Article III, Section 20 shall be amended to include the following
language at the end of such section:
'; provided that in no event shall the board authorize or permit to be
issued any preferred or special class of shares which are entitled to
more than one vote per share or authorize or permit to be issued any
additional shares of the Corporation's Series C Preferred Stock, in
each case without the affirmative vote of 80% of the directors.' "
1.9 Section 9.2(i) is hereby deleted in its entirety and replaced with
the following:
"STCI shall have executed a non-competition agreement with Shared
Technologies in form and substance satisfactory to Fairchild."
1.10 The "and" at the end of ss.9.3(d) of the Merger Agreement shall be
deleted.
1.11 The following is added as new ss.9.3(e) of the Merger Agreement
and existing Section 9.3(e) of the Merger Agreement is renumbered as ss.9.3(f):
"(e) TFC and RHI shall have entered into a Tax Sharing
Agreement with Shared Technologies in the form of Exhibit E hereto; and
1.12 The reference to the entities "D-M-E, Inc." and B-3 and "Fairchild
Fasteners, Inc." in ss.9.3(f) (formerly ss.9.3(e)) of the Merger Agreement shall
be deleted and replaced with the entity "Fairchild Holding Corp." and the
reference to "B-1, B-2 and B-3" shall be replaced by "B-1 and B-2."
1.13 Section 10.1(c) shall be deleted in its entirety and replaced with
the following:
"by either Fairchild or Shared Technologies if the Effective Time has
not occurred on or prior to March 8, 1996 or such other date, if any,
as Fairchild or Shared Technologies shall agree upon, unless the
absence of such occurrence shall be due to the failure of the party
seeking to terminate this Agreement (or its subsidiaries or affiliates)
to perform in all material respects each of its obligations under this
Agreement required to be performed by it at or prior to the Effective
Time."
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ARTICLE II
AMENDMENTS TO INDEMNIFICATION AGREEMENTS
(EXHIBITS B-1 through B-3)
2.1 The first sentence of Section 1 of the Indemnification Agreement
set forth as Exhibit B-1 to the Merger Agreement is hereby amended by adding the
clause "and including all Taxes (including but not limited to Taxes related to
the Fairchild Reorganization)" after the first reference to "Merger Agreement"
therein.
2.2 The first sentence of Section 1 of the Indemnification Agreement
set forth as Exhibit B-2 to the Merger Agreement is hereby amended by adding the
clause "and including all Taxes (including but not limited to Taxes related to
the Fairchild Reorganization)" after the reference to "Merger Agreement"
therein.
2.3 All references to "Fairchild Recapitalization" in the
Indemnification Agreements set forth as Exhibits B-1 and B-2 to the Merger
Agreement are hereby deleted and replaced with the defined term "Fairchild
Reorganization."
2.4 All references to the entity "Fairchild Fasteners, Inc." in the
Indemnification Agreement set forth as Exhibit B-2 to the Merger Agreement are
hereby deleted and replaced with the entity "Fairchild Holding Corp." and all
references to the defined term "Fasteners" in the Indemnification Agreement set
forth as Exhibit B-2 to the Merger Agreement are hereby deleted and replaced
with the defined term "FHC".
2.5 All references to "Shared Technologies" in ss.1 of the
Indemnification Agreements set forth as Exhibits B-1 and B-2 shall include, and
shall be deemed to include for all purposes set forth in ss.1, all subsidiaries
of Shared Techologies Inc.
2.6 Exhibit B-3 shall be deleted in its entirety.
ARTICLE III
AMENDMENTS TO PLEDGE AGREEMENT
(EXHIBIT C)
3.1 The Pledge Agreement as set forth as Exhibit C to the Merger
Agreement is amended by deleting all references to "D-M-E Inc." and "Fairchild
Fasteners, Inc." and substituting therefor "Fairchild Holding Corp."
ARTICLE IV
AMENDMENTS TO TAX SHARING AGREEMENT
(EXHIBIT E)
4.1 The Tax Sharing Agreement as set forth as Exhibit E to the Merger
Agreement is hereby deleted and the Tax Sharing Agreement as attached hereto as
Exhibit E (Restated) is substituted therefor.
ARTICLE V
PROVISIONS OF GENERAL APPLICATION
5.1 Except as otherwise expressly provided by this First Amendment, all
of the terms, conditions and provisions to the Merger Agreement remain
unaltered. The Merger Agreement and this First Amendment shall be read and
construed as one agreement.
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5.2 If any of the terms of this First Amendment shall conflict in any
respect with any of the terms of the Merger Agreement, the terms of this First
Amendment shall be controlling.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be executed by their duly authorized officers all as of the day and year
first above written.
SHARED TECHNOLOGIES INC. THE FAIRCHILD CORPORATION
By:/s/ Vincent DiVincenzo By:/s/ Donald E. Miller
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Vincent DiVincenzo Donald E. Miller
Senior Vice President- Senior Vice President
Finance and Administration,
Treasurer and Chief Financial
Officer
FAIRCHILD INDUSTRIES, INC. RHI HOLDINGS, INC.
By:/s/ Donald E. Miller By:/s/ Donald E. Miller
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Donald E. Miller Donald E. Miller
Vice President Vice President
ACCEPTED AND AGREED TO BY:
FAIRCHILD HOLDING CORP.
By:/s/ Donald E. Miller
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Donald E. Miller
Vice President
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