SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
______________
Date of Report (Date of earliest event reported):March 13, 1996
RHI Holdings, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 1-373 34-1545939
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
Washington Dulles International Airport
300 West Service Road
P.O. Box 10803
Chantilly, Virginia__ 22021-9998
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code:
(703) 478-5800
No change
(Former name or former address, if changed since last report)
_______________________________________________________________
_______________________________________________________________
<PAGE>
Item 2. Acquisition or Disposition of Assets
As previously disclosed on Form 8-K Item 5 filed with
the Commission on November 20, 1995, The Fairchild Corporation
("Fairchild") and its subsidiaries, RHI Holdings, Inc. ("RHI")
and Fairchild Industries, Inc. ("FII"), entered into an Agree-
ment and Plan of Merger dated as of November 9, 1995 (as
amended, the "Merger Agreement") with Shared Technologies Inc.
("Shared Technologies"). In accordance with the Merger Agree-
ment, Shared Technologies has acquired the telecommunications
systems and service business operated by Fairchild Communica-
tions Services Company ("FCSC").
The acquisition was effected by the merger of FII with and
into Shared Technologies (the "Merger"). Prior to the Merger, FII
transferred all of its assets to, and all of its liabilities were
assumed by, RHI or its subsidiaries other than FII and VSI
Corporation, except for (i) the assets and liabilities of FCSC,
(ii) the outstanding Series A and Series C Preferred Stock of
FII, (iii) $125,000,000 aggregate principal amount of 12-1/4%
Senior Notes due 1999 (the "Senior Notes") of FII and (iv) an
amount of bank and other indebtedness of approximately
$45,819,822.38 (the "Assumed Indebtedness") and commenced a cash
tender offer to purchase all of the outstanding Senior Notes.
Pursuant to the Merger, an amount sufficient to redeem the Series
A and C Preferred Stock at their liquidation value ($45.00 per
share plus accrued and unpaid dividends) was placed with Chemical
Mellon Shareholder Services as Escrow Agent. Also as part of the
Merger, Shared Technologies, as the surviving corporation, (i)
purchased the $125,000,000 aggregate principal amount of Senior
Notes tendered pursuant to the aforesaid tender offer and (ii)
repaid the Assumed Indebtedness in full.
As a result of the Merger, RHI received (i) 6,000,000
shares of Common Stock of Shared Technologies (representing
approximately 41% of the outstanding shares after giving effect
to such issuance), (ii) shares of 6% Cumulative Convertible
Preferred Stock of Shared Technologies having an aggregate
liquidation preference of $25,000,000 (subject to upward
adjustment) and which are convertible into Common Stock of
Shared Technologies at a conversion price of $6.3750 per share
(which, if converted, would represent, together with the other
Common Stock issued to RHI, approximately 42% of the Common
Stock of Shared Technologies on a fully diluted basis) and
(iii) shares of a Special Preferred Stock having an initial
<PAGE>
liquidation preference of $20,000,000 (which could accrete up
to a maximum of $30,000,000 over a ten-year period if not ear-
lier redeemed). In connection with its stock ownership,
Fairchild and RHI will have the right to elect four of the
eleven members of the Board of Directors of Shared Technologies
and have agreed, subject to certain exceptions, not to sell any
of such shares for a two-year period.
For a more complete description of the proposed terms
of the Merger and the transactions contemplated thereby, refer-
ence is hereby made to the Merger Agreement including the
amendments thereto (copies of which are filed as exhibits
hereto).
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
(c) Exhibits.
2.1 Agreement and Plan of Merger dated as of November 9,
1995 by and among Fairchild, RHI, FII and Shared
Technologies ("Merger Agreement").*
2.2 Amendment No. 1 to Merger Agreement dated as of
February 2, 1996.
2.3 Amendment No. 2 to Merger Agreement dated as of
February 23, 1996.
2.4 Amendment No. 3 to Merger Agreement dated as of
March 1, 1996.
___________________
* Incorporated by reference from the Registrant's Form 8-K
filed on November 20, 1995.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto
duly authorized.
RHI HOLDINGS, INC.
(Registrant)
By: /s/ Donald E. Miller
--------------------------
Name: Donald E. Miller
Title: Vice President
DATE: March 13, 1996
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit No. Numbered Page
2.1 Agreement and Plan of Merger dated as of
November 9, 1995 by and among
Fairchild, RHI, FII and Shared Technol-
ogies ("Merger Agreement")*............
2.2 Amendment No. 1 to the Merger Agreement
dated as of February 2, 1996...........
2.3 Amendment No. 2 to the Merger Agreement
dated as of February 23, 1996..........
2.4 Amendment No. 3 to the Merger Agreement
dated as of March 1, 1996
___________________
* Incorporated by reference from the Registrant's Form 8-K
filed on November 20, 1995.
<PAGE>
RHI HOLDINGS, INC.
PRO FORMA CONDENSED SEPARATED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The Following unaudited pro forma condensed separated consolidated balance
sheet as of December 31, 1995, and the pro forma condensed separated
consolidated statements of earnings for the year ended June 30, 1995 and the six
months ended December 31, 1995, give effect to the Company's disposition of the
D-M-E Company ("DME") and the merger of its communications services systems
business ("FCS"). The pro forma information is based on the historical financial
statements of the Company, DME and FCS giving effect to the transaction and
assumptions and adjustments specified in the accompanying notes to the pro forma
financial statements.
The unaudited pro forma consolidated statements of the Company are not
necessarily indicative of the results or financial position that actually would
have occurred if the disposition of DME and the merger of FCS had been in effect
since July 1, 1994, nor are they necessarily indicative of future results or
financial position of the Company. The pro forma consolidated financial
statements should be read in conjunction with the audited financial statements
and notes thereto included in the Company's June 30, 1995 Form 10-K.
<PAGE>
<TABLE>
<CAPTION>
RHI HOLDINGS, INC.
PRO FORMA CONDENSED SEPARATED CONSOLIDATED BALANCE SHEET
December 31, 1995
(in thousands)
Historical Pro Forma
----------------------------- ----------------------
ASSETS RHI DME FCS Adjustments RHI
- ------ -------- ---------- --------- ----------- --------
<S> <C> <C> <C> <C> <C>
Cash $ 39,514 $ $ 366 $74,000 (1)
(74,000)(2) $ 39,880
Accounts receivable 68,272 (11,694) 56,578
Notes receivable-current 171,377 (1) 171,377
Inventories 77,630 (1,271) 76,359
Prepaid expenses and
other current assets 21,271 (2,051) 19,220
Net current assets of
discontinued operations 34,609 (34,166) 443
-------- ---------- --------- --------- --------
Total Current Assets 241,296 (34,166) (14,650) 171,377 363,857
Property, plant and
equipment 224,468 (85,545) 138,923
Accumulated depreciation (95,888) 35,086 (60,802)
Net noncurrent assets of
discontinued operations 85,577 (85,528) 49
Investment in affiliates 135,951 36,500 (3) 172,451
Goodwill 147,150 (25,871) 121,279
Other assets 128,903 (6,910) (5,286)(4) 116,707
-------- ---------- --------- --------- --------
Total Assets $867,457 $(119,694) $(97,890) $202,591 $852,464
======== ========== ========= ========= ========
</TABLE>
See Notes to Pro Forma Condensed Separated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
RHI HOLDINGS, INC.
PRO FORMA CONDENSED SEPARATED CONSOLIDATED BALANCE SHEET
December 31, 1995
(in thousands)
Historical Pro Forma
----------------------------- ----------------------
LIABILITIES RHI DME FCS Adjustments RHI
- ----------- -------- ---------- --------- ----------- --------
<S> <C> <C> <C> <C> <C>
Bank notes payable and
current maturities of
long term debt $ 76,048 $ $ (367) $(66,603)(2) $ 9,078
Accounts payable 31,206 (9,308) 21,898
Other accrued liabilities 67,752 (8,589) 7,341 (1)
(2,340)(3)
10,000 (3) 74,164
Accrued income tax -- 47,337 (1)
(6,239)(4) 41,098
-------- ---------- --------- --------- ---------
Current Liabilities 175,006 -- (18,264) (10,504) 146,238
Long-term debt, less
current maturities 274,755 (99) (7,397)(2)
(135,313)(3)
(45,820)(3)
10,313 (4) 96,439
Other long-term
liabilities 91,375 (25,126)(3) 66,249
Noncurrent income taxes 44,158 44,158
Redeemable preferred
stock 16,691 (14,901)(3) 1,790
-------- ---------- --------- --------- ---------
Total Liabilities 601,985 -- (18,363) (228,748) 354,874
Stockholders' equity:
Common stock 100 (3,826) (1) 3,826 (1)
1 (3) 100
Preferred stock 100 100
Paid-in capital 229,647 (100,084) (23,265) 100,084 (1)
23,265 (3) 229,647
Retained earnings 36,796 (15,784) (56,261) 15,784 (1)
56,261 (3)
71,005 (1)
170,473 (3)
(9,360)(4) 268,914
Net unrealized holding
loss on available-for-
sale securities (4,322) (4,322)
Cumulative translation
adjustment 3,151 3,151
-------- ---------- --------- --------- --------
Total Stockholders'
Equity 265,472 (119,694) (79,527) 431,339 497,590
Total Liabilities and
Stockholders' Equity $ 867,457 $(119,694) $(97,890) $202,591 $852,464
========= ========== ========= ========= ========
</TABLE>
See Notes to Pro Forma Condensed Separated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
RHI HOLDINGS, INC.
PRO FORMA CONDENSED SEPARATED CONSOLIDATED STATEMENT OF EARNINGS
For the six months ended December 31, 1995
(in thousands)
Historical Pro Forma
------------------------------ ----------------------
RHI DME FCS Adjustments RHI
--------- --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Revenue: (*)
Sales $210,523 $ $(65,028) $145,495
Other income, net 334 334
--------- --------- --------- --------- ---------
210,857 -- (65,028) -- 145,829
Cost and expenses:
Cost of sales 161,771 (49,037) 112,734
Selling, general and
administrative 38,130 (5,863) 32,267
Research and
development 44 44
Amortization of
goodwill 2,302 (357) 1,945
Restructuring 285 285
--------- --------- --------- --------- ---------
202,532 -- (55,257) -- 147,275
Operating income (loss) 8,325 -- (9,771) -- (1,446)
Interest expense 22,342 (43) (13,484)(5) 8,815
Interest income (2,536) (6,855)(5) (9,391)
--------- --------- --------- --------- ---------
Net interest expense
(income) 19,806 -- (43) (20,339) (576)
Investment income, net 1,912 1,912
Equity in earnings (loss)
of affiliates 1,923 (563)(5) 1,360
Minority interest (1,085) 1,173 (5) 88
-------- --------- --------- --------- ---------
Earnings (loss) from
continuing operations
before taxes (8,731) -- (9,728) 20,949 2,490
Income tax provision
(benefit) (2,162) (3,891) 8,605 2,552
-------- --------- --------- --------- ---------
Earnings (loss) from
continuing operations $ (6,569) $ -- $ (5,837) $ 12,344 $ (62)
========= ========= ========= ========= =========
</TABLE>
* - Results of DME were included as part of earnings from discontinued
operations for the six months ended December 31, 1995.
See Notes to Pro Forma Condensed Separated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
RHI HOLDINGS, INC.
PRO FORMA CONDENSED SEPARATED CONSOLIDATED STATEMENT OF EARNINGS
For the year ended June 30, 1995
(in thousands)
Historical Pro Forma
------------------------------ ----------------------
RHI DME FCS Adjustments RHI
-------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Revenue:
Sales $545,435 $(167,769) $(108,710) $ 268,956
Other income, net 2,341 396 2,737
-------- ---------- ---------- --------- ---------
547,776 (167,373) (108,710) -- 271,693
Cost and expenses:
Cost of sales 419,008 (110,152) (80,621) 228,235
Selling, general and
administrative 103,129 (30,208) (8,967) 63,954
Research and
development 4,100 (1,114) 2,986
Amortization of
goodwill 6,018 (1,637) (624) 3,757
-------- ---------- ---------- --------- ---------
532,255 (143,111) (90,212) -- 298,932
Operating income (loss) 15,521 (24,262) (18,498) -- (27,239)
Interest expense 43,254 (60) (291) (26,968)(5) 15,935
Interest income (4,529) 18 (13,710)(5) (18,221)
-------- --------- ---------- --------- ---------
Net interest expense
(income) 38,725 (42) (291) (40,678) (2,286)
Investment income, net 5,954 5,954
Equity in earnings (loss)
of affiliates 2,778 (762) (1,126)(5) 890
Minority interest (2,449) 156 2,345 (5) 52
-------- --------- ---------- --------- ---------
Earnings (loss) from
continuing operations
before taxes (16,921) (24,826) (18,207) 41,897 (18,057)
Income tax provision
(benefit) 819 (10,410) (7,283) 17,209 335
-------- --------- ---------- --------- ---------
Earnings (loss) from
continuing operations $(17,740) $(14,416) $ (10,924) $ 24,688 $(18,392)
========= ========= ========== ========= =========
</TABLE>
See Notes to Pro Forma Condensed Separated Financial Statements.
<PAGE>
RHI HOLDINGS, INC.
NOTES TO PRO FORMA CONDENSED SEPARATED CONSOLIDATED FINANCIAL
STATEMENTS
On February 22, 1996, the Company completed the sale of DME to Cincinnati
Milacron for $74,000,000 in cash and $171,377,000 in 8% promissory notes which
mature one year following the closing of the sale.
On March 13, 1996, the Company completed the merger of FCS into Shared
Technologies Inc.("STI") with the resulting company named Shared Technologies
Fairchild Inc. ("STCH"). Pursuant to the merger, STCH assumed $223,500,000 of
the Company's existing debt and preferred stock and has issued to the Company
6,000,000 common shares (equal to approximately 41% of outstanding STCH common
shares immediately following the transaction), as well as $45,000,000 face
amount of newly issued preferred shares. The pro forma financial statements
separate (i) the assets and liabilities of DME and FCS from the Company's
consolidated balance sheets at December 31, 1995, and (ii) the results of
operations of DME and FCS from the Company's consolidated statement of earnings
for the year ended June 30, 1995 and six months ended December 31, 1995. In
separating the entities, the following pro forma adjustments have been made.
(1) Reflects the sale of certain assets and liabilities of DME in exchange
for cash and notes receivable, reduced by costs related to the disposition
(incentive compensation, legal, audit and other associated fees) as follows (in
thousands):
December 31,
1995
------------
Cash $ 74,000
Notes receivable 171,377
Costs related to disposal (7,341)
---------
Net proceeds received 238,036
Carrying value of net assets sold 119,694
---------
Gain before taxes 118,342
Tax provision (40% statutory tax rate) 47,337
---------
Net gain on sale $ 71,005
=========
(2) Cash received was immediately used to reduce bank loans(with interest
rates of approximately 8.73% in fiscal 1995) as follows (in thousands):
December 31,
1995
------------
Bank notes payable and current maturities
of debt $ 66,603
Long-term debt, less current maturities 7,397
---------
Total $ 74,000
=========
<PAGE>
(3) Reflects the merger of FCS into STI, the assumption of certain of the
Company's existing debt and related accrued expenses by STCH, recording accrued
expenses (incentive compensation, legal, etc.) associated with the transaction,
the issuance of equity to the Company, and the resulting non-taxable gain from
the transaction as follows (in thousands):
December 31,
1995
------------
Long-term debt:
12.25% Sr. secured notes $125,000
Premium paid for 12.25% Sr. secured notes 10,313
---------
135,313
Bank debt (8.73% approximating interest
rate in fiscal 1995) 45,820
---------
181,133
Redeemable preferred stock (FII Series A) 14,901
Minority interest (FII Series C preferred
stock) 25,126
Other accrued expenses (interest, dividends) 2,340
---------
Total debt assumed 223,500
Investment in affiliates (the Company's
investment in STCH) 36,500
Less:
Carrying value of net assets exchanged 79,527
Costs related to transaction 10,000
---------
Net gain from merger $170,473
=========
The merger was structured as a reorganization under section 368(a)(1)(A) of
the Internal Revenue Code of 1986, as amended, resulting in a non-taxable
transaction for the Company.
(4) The sale of DME and assumption of some of the Company's debt by STCH
resulted in an extraordinary loss from the early extinguishment of debt as
follows (in thousands):
December 31,
1995
------------
Premiums paid on 12.25% Sr. Notes (being
recorded as long-term debt in December) $ 10,313
Deferred loan fees written off 5,286
---------
15,599
Tax benefit (40% statutory rate) (6,239)
---------
Extraordinary loss, net $ 9,360
=========
<PAGE>
(5) For purposes of presenting the pro forma condensed separated statement
of earnings, the following adjustments (which are expected to be recurring) have
been made (in thousands):
Six Months
Ended Year Ended
December 31, June 30,
1995 1995
Increase (decrease) in earnings: ----------- -----------
Interest expense from revised debt
structures (see Note 2 and Note 3) $ 13,484 $ 26,968
Interest income from notes receivable
(see Note 1) 6,855 13,710
Minority interest (see Note 3) 1,173 2,345
Tax effects of the above adjustments (8,605) (17,209)
Equity in loss of affiliates (*) (563) (1,126)
--------- ---------
Net adjustments $ 12,344 $ 24,688
========= =========
* - 41% of the estimated loss to common shareholders' of STCH adjusted by
preferred stock dividends to be paid by STCH to the Company.
(6) The pro forma statement of earnings has not been adjusted for non-
recurring credits or charges that are expected to be incurred within the ensuing
year. Such non-recurring items omitted from the pro forma statement of earnings
represents (i) the $71,005,000 gain, net of tax, on the sale of DME (see Note
1), (ii) the $170,473,000 non-taxable gain from the merger of FCS into STCH (see
Note 3), and (iii) the $9,360,000 extraordinary loss, net of tax, from the early
extinguishment of debt assumed by the merger (see Note 4).
EXHIBIT 2.2
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER dated as of
February 2, 1996 ("First Amendment") is made by and among Fairchild Industries,
Inc., a Delaware corporation ("Fairchild"), RHI Holdings, Inc., a Delaware
corporation ("RHI"), The Fairchild Corporation, a Delaware corporation ("TFC"),
and Shared Technologies Inc., a Delaware corporation ("Shared Technologies"),
amending certain provisions of the Agreement and Plan of Merger dated as of
November 9, 1995, including the exhibits and schedules thereto (the "Merger
Agreement") by and among Fairchild, RHI, TFC and Shared Technologies. Terms not
otherwise defined herein which are defined in the Merger Agreement shall have
the same respective meanings herein as therein.
WHEREAS, Fairchild, RHI, TFC and Shared Technologies have agreed to
modify certain terms and conditions of the Merger Agreement as specifically set
forth in this First Amendment.
NOW THEREFORE, in consideration of the premises and mutual agreements
contained herein and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
AMENDMENTS TO MERGER AGREEMENT
1.1 References to the distribution of shares of Shared Technologies
Cellular Inc. shall be deleted from sections 5.7(b) and 7.1(c) and in Section
5.5 of the Disclosure Statement.
1.2 Section 6.19 of the Merger Agreement is hereby amended by deleting
the provisions of clause (ii) thereof and by inserting therefor the following:
"(ii) all material Taxes of Fairchild and its subsidiaries in respect
of the pre-Merger period (including but not limited to Taxes
attributable to the Fairchild Reorganization) have been paid in full to
the proper authorities, other than such Taxes as are being contested in
good faith by appropriate proceedings and/or are adequately reserved
for in accordance with generally accepted accounting principles;
1.3 The first sentence of Section 8.1(c) of the Merger Agreement is
hereby deleted in its entirety.
1.4 The last sentence of Section 8.2(a) of the Merger Agreement is
hereby deleted in its entirety and replaced with the following:
"Shared Technologies shall cause Shared Technologies Cellular, Inc.
("STCI") to enter into an agreement preventing STCI from competing in
the telecommunications systems and service business."
1.5 Section 9.1(f) shall be amended to state "43.5" in place of "47.5".
1.6 Schedule 9.1 shall be amended to replace the reference to
"Recapitalization" with "Reorganization."
1.7 Section 9.2(d) of the Merger Agreement and Schedule 9.2(d) of the
Merger Agreement shall be deleted in their entirety.
1.8 Schedule 9.2(e) shall be amended by adding to the end thereof the
following:
"(h) Article III, Section 20 shall be amended to include the
following language at the end of such section:
"; provided that in no event shall the board authorize or permit to
be issued any preferred or special class of shares which are
entitled to more than one vote per share or authorize or permit to
<PAGE>
be issued any additional shares of the Corporation's Series C
Preferred Stock, in each case without the affirmative vote of 80%
of the directors."
1.9 Section 9.2(i) is hereby deleted in its entirety and replaced with
the following:
"STCI shall have executed a non-competition agreement with Shared
Technologies in form and substance satisfactory to Fairchild."
1.10 The "and" at the end of Section 9.3(d) of the Merger Agreement
shall be deleted.
1.11 The following is added as new Section 9.3(e) of the Merger
Agreement and existing Section 9.3(e) of the Merger Agreement is renumbered as
ss.9.3(f):
"(e) TFC and RHI shall have entered into a Tax Sharing Agreement
with Shared Technologies in the form of Exhibit E hereto; and
1.12 The reference to the entities "D-M-E, Inc." and B-3 and the
"Fairchild Fasteners, Inc." in Section 9.3(f) (formerly Section 9.3(e)) of the
Merger Agreement shall be deleted and replaced with the entity "Fairchild
Holding Corp." and the reference to ""B1-3" shall be replaced by "B-1 and B-2."
1.13 Section 10.1(c) shall be deleted in its entirety and replaced with
the following:
"by either Fairchild or Shared Technologies if the Effective Time has
not occurred on or prior to March 8, 1996 or such other date, if any,
as Fairchild and Shared Technologies shall agree upon, unless the
absence of such occurrence shall be due to the failure of the party
seeking to terminate this Agreement (or its subsidiaries or affiliates)
to perform in all material respects each of its obligations under this
Agreement required to be performed by it at or prior to the Effective
Time."
ARTICLE II
AMENDMENTS TO INDEMNIFICATION AGREEMENTS
(EXHIBITS B-1 through B-3)
2.1 The first sentence of Section 1 of the Indemnification Agreement
set forth as Exhibit B-1 to the Merger Agreement is hereby amended by adding the
clause "and including all Taxes (including but not limited to Taxes related to
the Fairchild Reorganization)" after the first reference to "Merger Agreement"
therein.
2.2 The first sentence of Section 1 of the Indemnification Agreement
set forth as Exhibit B-2 to the Merger Agreement is hereby amended by adding the
clause "and including all Taxes (including but not limited to Taxes related to
the Fairchild Reorganization)" after the reference to "Merger Agreement"
therein.
2.3 All references to "Fairchild Recapitalization" in the
Indemnification Agreements set forth as Exhibits B-1 and B-2 to the Merger
Agreement are hereby deleted and replaced with the defined term "Fairchild
Reorganization."
2.4 All references to the entity "Fairchild Fasteners, Inc." in the
Indemnification Agreement set forth as Exhibit B-2 to the Merger Agreement are
hereby deleted and replaced with the entity "Fairchild Holding Corp." and all
references to the defined term "Fasteners" in the Indemnification Agreement set
forth as Exhibit B-2 to the Merger Agreement are hereby deleted and replaced
with the defined term "FHC".
2.5 All references to "Shared Technologies" in Section 1 of the
Indemnification Agreements set forth as Exhibits B-1 and B-2 shall include, and
shall be deemed to include for all purposes set forth in Section 1, all
subsidiaries of Shared Techologies Inc.
2.6 Exhibit B-3 shall be deleted in its entirety.
<PAGE>
<PAGE>
ARTICLE III
AMENDMENTS TO PLEDGE AGREEMENT
(EXHIBIT C)
3.1 The Pledge Agreement as set forth as Exhibit C to the Merger
Agreement is amended by deleting all references to D-M-E Inc. and Fairchild
Fasteners, Inc. and substituting therefor "Fairchild Holding Corp."
ARTICLE IV
AMENDMENTS TO TAX SHARING AGREEMENT
(EXHIBIT E)
4.1 The Tax Sharing Agreement as set forth as Exhibit E to the Merger
Agreement is hereby deleted and the Tax Sharing Agreement as attached hereto as
Exhibit E (Restated) is substituted therefor.
ARTICLE V
PROVISIONS OF GENERAL APPLICATION
5.1 Except as otherwise expressly provided by this First Amendment, all
of the terms, conditions and provisions to the Merger Agreement remain
unaltered. The Merger Agreement and this First Amendment shall be read and
construed as one agreement.
5.2 If any of the terms of this First Amendment shall conflict in any
respect with any of the terms of the Merger Agreement, the terms of this First
Amendment shall be controlling.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be executed by their duly authorized officers all as of the day and year
first above written.
SHARED TECHNOLOGIES INC. THE FAIRCHILD CORPORATION
By:__________________________ By:____________________________
Vincent DiVincenzo
Senior Vice President-Finance
and Administration, Treasurer
and Chief Financial Officer
FAIRCHILD INDUSTRIES, INC. RHI HOLDINGS, INC.
By:__________________________ By____________________________
ACCEPTED AND AGREED TO BY:
FAIRCHILD HOLDING CORP.
By:__________________________
-3-
EXHIBIT 2.3
SECOND AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER dated as of
February 23, 1996 ("Second Amendment"), is made by and among Fairchild
Industries, Inc., a Delaware corporation ("Fairchild"), RHI Holdings, Inc., a
Delaware corporation ("RHI"), The Fairchild Corporation, a Delaware corporation
("TFC"), and Shared Technologies Inc., a Delaware corporation ("Shared
Technologies"), amending certain provisions of the Agreement and Plan of Merger
dated as of November 9, 1995, as amended by the First Amendment to the Agreement
and Plan of Merger dated as of February 2, 1996, including the exhibits and
schedules thereto (the "Merger Agreement") by and among Fairchild, RHI, TFC and
Shared Technologies. Terms not otherwise defined herein which are defined in the
Merger Agreement shall have the same respective meanings herein as therein.
WHEREAS, Fairchild, RHI, TFC and Shared Technologies have agreed to
modify certain terms and conditions of the Merger Agreement as specifically set
forth in this Second Amendment.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
AMENDMENTS TO MERGER AGREEMENT
1.1 The following shall be added as a new final paragraph to Schedule
3.1(b) to the Merger Agreement, "Summary of Terms of Special Preferred Stock":
"The terms of the Special Preferred Stock will provide, or Fairchild,
RHI and Shared Technologies shall enter into an agreement giving,
Shared Technologies the option to extend the final maturity of the
Special Preferred Stock from March 31, 2007, to March 31, 2008. If such
option is exercised, Shared Technologies will pay a dividend to the
holders of the Special Preferred Stock at the same rate payable on the
Senior Discount Notes due 2006 to be issued by a subsidiary of the
Surviving Corporation in connection with the Merger, calculated on the
outstanding liquidation preference of the Special Preferred Stock. Such
dividend shall accrue from March 31, 2007, and be payable quarterly
beginning June 30, 2007."
1.2 Section 6.7(a) of the Merger Agreement is amended by adding "(the
'Closing Date Balance Sheet')," after the words "Effective Date" on the last
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line of such section, such that such line reads as follows:
"......gies on the Effective Date (the "Closing Date Balance Sheet"),
is at least $80,000,000);........ ."
1.3 Section 6.7(b) of the Merger Agreement is amended in its entirety
to read as follows:
"(b) except as contemplated by Schedule 9.1 and except for the
assignment to RHI by Fairchild of Fairchild's receivables (the
"Permitted Receivables Assignment"), in an amount of $9,000,000,
there has not been any direct or indirect redemption, purchase
or other acquisition of any shares of capital stock of Fairchild
or any of its subsidiaries, or any declaration, setting aside or
payment of any dividend or other distribution by Fairchild or
any of its subsidiaries in respect of their capital stock;
provided that the Permitted Receivables Assignment shall not
reduce the net worth of Fairchild to less than $80,000,000.
Notwithstanding the foregoing, if the Effective Time shall not
have occurred on or prior to March 15, 1996, the amount of the
Permitted Receivables Assignment shall be increased to the
maximum amount which would not cause the net worth of Fairchild,
as evidenced by the Closing Date Balance Sheet, to be less than
$80,000,000. Within 90 days of the Closing Date, Arthur
Andersen, L.L.P. will prepare and deliver to the parties an
audited balance sheet of Fairchild as of the Closing Date (the
"Audited Balance Sheet"). In the event that the net worth of
Fairchild, as shown on the Audited Balance Sheet, (x) is less
than $80,000,000, Fairchild shall pay to Shared Technologies an
amount in cash equal to such difference or (y) is more than
$80,000,000, Shared Technologies shall pay to Fairchild an
amount in cash equal to such difference; provided that no such
cash payment, when taken together with the amount of receivables
assigned to RHI by Fairchild pursuant to this paragraph, shall
be required in an amount greater than the amount of the
Permitted Receivables Assignment."
1.4 The following shall be added as a new Section 8.12 of the Merger
Agreement:
"8.12 Post-Merger Sale of Shared Technologies Cellular, Inc. RHI agrees
that if, within 150 days of the Effective Time, the Surviving
Corporation shall receive cash proceeds from the sale of its interest,
as of this date, in STCI, then RHI shall contribute to the Surviving
Corporation, a sum equal to 40% of such cash proceeds received by the
Surviving Corporation, up to a maximum contribution of $1,600,000."
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1.5 Section 10.1(c) of the Merger Agreement is hereby amended by
deleting the date "March 8, 1996," and inserting the date "March 15, 1996," in
lieu thereof.
1.6 Section 10.1(d) shall be amended by deleting the words "..., at the
Special Meeting of (including any adjournment thereof)," and adding at the end
of such section the words "on or before March 4, 1996". ARTICLE II
AMENDMENTS TO THE TAX SHARING AGREEMENT
(EXHIBIT E)
2.1 The parties hereto agree to amend The Tax Sharing Agreement as set
forth as Exhibit E to the Merger Agreement to provide for the following
language:
(i) Notwithstanding any other representation in the Merger Agreement or
in the Tax Sharing Agreement, TFC and RHI make no representation or warranty as
to (i) the amount of any net operating loss and tax credits of the TFC Group
allocable to FII or VSI at the Effective Date as a result of the operations of
FII and VSI prior to the Effective Date; and (ii) the amount of any reduction in
tax payable by Shared Technologies due to utilization of any net operating loss
or tax credit of the TFC Group allocable to FII and VSI as a result of the
operations of FII and VSI prior to the Effective Date.
(ii) Notwithstanding any other provision of the Tax Sharing Agreement,
Shared Technologies shall not share with TFC and RHI any reduction in the tax
payment of Shared Technologies as a result of Shared Technologies utilizing any
net operating losses or tax credits of the TFC Group allocable to FII or VSI at
the Effective Date or as a result of operations of FII and VSI prior to the
Effective Date.
ARTICLE III
PROVISIONS OF GENERAL APPLICATION
3.1 Except as otherwise expressly provided by this Second Amendment,
all of the terms, conditions and provisions to the Merger Agreement remain
unaltered. The Merger Agreement and this Second Amendment shall be read and
construed as one agreement.
3.2 If any of the terms of this Second Amendment shall conflict in any
respect with any of the terms of the Merger Agreement, the terms of this Second
Amendment shall be controlling.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed by their duly authorized officers, all as of the day
and year first above written.
SHARED TECHNOLOGIES INC. THE FAIRCHILD CORPORATION
By:/s/Anthony D. Autorino By:/s/Donald E. Miller
Anthony D. Autorino Donald E. Miller
Chief Executive Officer Senior Vice President
FAIRCHILD INDUSTRIES, INC. RHI HOLDINGS, INC.
By:/s/Donald E. Miller By:/s/Donald E. Miller
Donald E. Miller Donald E. Miller
Vice President Vice President
ACCEPTED AND AGREED TO BY:
FAIRCHILD HOLDING CORP.
By:/s/Donald E. Miller
Donald E. Miller
Vice President
EXHIBIT 2.4
THIRD AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This THIRD AMENDMENT TO AGREEMENT AND PLAN OF MERGER dated as of March
1, 1996 ("Third Amendment"), is made by and among Fairchild Industries, Inc., a
Delaware corporation ("Fairchild"), RHI Holdings, Inc., a a Delaware corporation
("RHI"), The Fairchild Corporation, a Delaware corporation ("TFC"), and Shared
Technologies Inc., a Delaware corporation ("Shared Technologies"), amending
certain provisions of the Agreement and Plan of Merger dated as of November 9,
1995, as amended by the First Amendment to Agreement and Plan of Merger dated as
of February 2, 1996 (the "First Amendment"), as further amended by the Second
Amendment to Agreement and Plan of Merger dated as of February 23, 1996 (the
"Second Amendment"), including the exhibits and schedules thereto (the Agreement
and Plan of Merger, as amended by the First Amendment and the Second Amendment,
are referred to collectively herein as the "Merger Agreement") by and among
Fairchild, RHI, TFC and Shared Technologies. Terms not otherwise defined herein
which are defined in the Merger Agreement shall have the same respective
meanings herein as therein.
WHEREAS, Fairchild, RHI, TFC and Shared Technologies have agreed to
modify certain terms and conditions of the Merger Agreement as specifically set
forth in this Third Amendment.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
AMENDMENTS TO MERGER AGREEMENT
1.1 The Merger Agreement hereby is amended by deleting therefrom in its
entirety Section 1.1 of the Second Amendment.
1.2 Section 10.1(d) of the Merger Agreement (as amended by Section 1.6
of the Second Amendment) hereby is amended by deleting the words "on or before
March 4, 1996", and adding the words "on or before March 13, 1996" at the end of
such section.
1.3 Section 6.7(b) of the Merger Agreement (as amended by Section 1.3
of the Second Amendment) hereby is amended by deleting clauses (x) and (y)
therefrom in their entirety (but not deleting the proviso following such
clauses), and substituting therefor the following: "(x) is less than
$80,000,000, TFC shall pay to Shared Technologies an amount in cash equal to
such difference or (y) is more than $80,000,000 Shared Technologies shall pay to
TFC an amount in cash equal to such difference;".
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ARTICLE II
PROVISIONS OF GENERAL APPLICATION
2.1 Except as otherwise expressly provided by this Third Amendment, all
of the terms, conditions and provisions to the Merger Agreement remain
unaltered. The Merger Agreement and this Third Amendment shall be read and
construed as one agreement.
2.2 If any of the terms of this Third Amendment shall conflict in any
respect with any of the terms of the Merger Agreement, the terms of this Third
Amendment shall be controlling.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be executed by their duly authorized officers, all as of the day and year
first above written.
SHARED TECHNOLOGIES INC. THE FAIRCHILD CORPORATION
By:____________________________ By:___________________________
FAIRCHILD INDUSTRIES, INC. RHI HOLDINGS, INC.
By:____________________________ By:___________________________
ACCEPTED AND AGREED TO BY:
FAIRCHILD HOLDING CORP.
By:____________________________
