-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RIaW6MmD1ogP9ZJUOMqW6qMxBaLElqYspLLXf4tPRGm9JEgy6mSByd1OpB9WDeGV EIuYxApv2r/HtJ6gICcZgQ== 0000950162-96-000199.txt : 19960328 0000950162-96-000199.hdr.sgml : 19960328 ACCESSION NUMBER: 0000950162-96-000199 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960327 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960327 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FAIRCHILD CORP CENTRAL INDEX KEY: 0000009779 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MACHINERY, EQUIPMENT & SUPPLIES [5080] IRS NUMBER: 340728587 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06560 FILM NUMBER: 96538966 BUSINESS ADDRESS: STREET 1: 300 W SERVICE RD STREET 2: PO BOX 10803 CITY: CHANTILLY STATE: VA ZIP: 22021 BUSINESS PHONE: 7034785800 FORMER COMPANY: FORMER CONFORMED NAME: BANNER INDUSTRIES INC /DE/ DATE OF NAME CHANGE: 19901118 8-K 1 FORM 8-K 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 THE FAIRCHILD CORPORATION (Exact name of Registrant as specified in its charter) Delaware 1-6560 34-0728587 (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) _______________________________________________________________ _______________________________________________________________ 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 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. 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. THE FAIRCHILD CORPORATION (Registrant) By: /s/ Donald E. Miller ------------------------------ Name: Donald E. Miller Title: Vice President DATE: March 13, 1996 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. THE FAIRCHILD CORPORATION 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.
THE FAIRCHILD CORPORATION PRO FORMA CONDENSED SEPARATED CONSOLIDATED BALANCE SHEET December 31, 1995 (in thousands) Historical Pro Forma ----------------------------- ---------------------- ASSETS TFC DME FCS Adjustments TFC - ------ -------- ---------- --------- ----------- -------- Cash $ 42,967 $ $ 366 $ 74,000 (1) (74,000)(2) $ 43,333 Accounts receivable 70,241 (11,694) 58,547 Notes receivable-current 171,377 (1) 171,377 Inventories 78,449 (1,271) 77,178 Prepaid expenses and other current assets 27,092 (2,051) 25,041 Net current assets of discontinued operations 34,609 (34,166) 443 -------- ---------- --------- --------- -------- Total Current Assets 253,358 (34,166) (14,650) 171,377 375,919 Property, plant and equipment 228,239 (85,545) 142,694 Accumulated depreciation (98,970) 35,086 (63,884) Net noncurrent assets of discontinued operations 85,577 (85,528) 49 Investment in affiliates 70,904 36,500 (3) 107,404 Goodwill 152,184 (25,871) 126,313 Other assets 137,405 (6,910) (5,286)(4) 125,209 -------- ---------- --------- --------- -------- Total Assets $828,697 $(119,694) $(97,890) $202,591 $813,704 ======== ========== ========= ========= ========
See Notes to Pro Forma Condensed Separated Financial Statements.
THE FAIRCHILD CORPORATION PRO FORMA CONDENSED SEPARATED CONSOLIDATED BALANCE SHEET December 31, 1995 (in thousands) Historical Pro Forma ----------------------------- ---------------------- LIABILITIES TFC DME FCS Adjustments TFC - ----------- -------- ---------- --------- ----------- -------- Bank notes payable and current maturities of long term debt $100,288 $ $ (367) $(66,603)(2) $ 33,318 Accounts payable 32,323 (9,308) 23,015 Other accrued liabilities 75,816 (8,589) 7,341 (1) (2,340)(3) 10,000 (3) 82,228 Accrued income tax -- 47,337 (1) (6,239)(4) 41,098 -------- ---------- --------- --------- --------- Current Liabilities 208,427 -- (18,264) (10,504) 179,659 Long-term debt, less current maturities 448,642 (99) (7,397)(2) (135,313)(3) (45,820)(3) 10,313 (4) 270,326 Other long-term liabilities 86,873 (25,126)(3) 61,747 Noncurrent income taxes 38,981 38,981 Redeemable preferred stock 15,311 (14,901)(3) 410 -------- ---------- --------- --------- --------- Total Liabilities 798,234 -- (18,363) (228,748) 551,123 Stockholders' equity: Common stock 2,242 (3,826) (1) 3,826 (1) 1 (3) 2,242 Treasury stock (51,719) (51,719) Paid-in capital 67,445 (100,084) (23,265) 100,084 (1) 23,265 (3) 67,445 Retained earnings 9,464 (15,784) (56,261) 15,784 (1) 56,261 (3) 71,005 (1) 170,473 (3) (9,360)(4) 241,582 Net unrealized holding loss on available-for- sale securities (120) (120) Cumulative translation adjustment 3,151 3,151 -------- ---------- --------- --------- -------- Total Stockholders' Equity 30,463 (119,694) (79,527) 431,339 262,581 Total Liabilities and Stockholders' Equity $ 828,697 $(119,694) $(97,890) $202,591 $813,704 ========= ========== ========= ========= ========
See Notes to Pro Forma Condensed Separated Financial Statements.
THE FAIRCHILD CORPORATION PRO FORMA CONDENSED SEPARATED CONSOLIDATED STATEMENT OF EARNINGS For the six months ended December 31, 1995 (in thousands, except per share data) Historical Pro Forma ------------------------------ ---------------------- TFC DME FCS Adjustments TFC --------- --------- --------- ----------- --------- Revenue: (*) Sales $211,376 $ $(65,028) $146,348 Other income, net 136 136 --------- --------- --------- --------- --------- 211,512 -- (65,028) -- 146,484 Cost and expenses: Cost of sales 162,141 (49,037) 113,104 Selling, general and administrative 41,274 (5,863) 35,411 Research and development 44 44 Amortization of goodwill 2,378 (357) 2,021 Restructuring 285 285 --------- --------- --------- --------- --------- 206,122 -- (55,257) -- 150,865 Operating income (loss) 5,390 -- (9,771) -- (4,381) Interest expense 36,047 (43) (13,484)(5) 22,520 Interest income (1,279) (6,855)(5) (8,134) --------- --------- --------- --------- --------- Net interest expense (income) 34,768 -- (43) (20,339) 14,386 Investment income, net 1,912 1,912 Equity in earnings (loss) of affiliates 1,889 (563)(5) 1,326 Minority interest (1,085) 1,173 (5) 88 -------- --------- --------- --------- --------- Earnings (loss) from continuing operations before taxes (26,662) -- (9,728) 20,949 (15,441) Income tax provision (benefit) (9,951) (3,891) 8,605 (5,237) -------- --------- --------- --------- --------- Earnings (loss) from continuing operations $(16,711) $ -- $ (5,837) $ 12,344 $(10,204) ========= ========= ========= ========= ========= Earnings (loss) per share: Loss from continuing operations $ (1.04) $ (0.63) ========= ========= Weighted average number of shares outstanding 16,122 16,122 ========= =========
* - 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.
THE FAIRCHILD CORPORATION PRO FORMA CONDENSED SEPARATED CONSOLIDATED STATEMENT OF EARNINGS For the year ended June 30, 1995 (in thousands, except per share data) Historical Pro Forma ------------------------------ ---------------------- TFC DME FCS Adjustments TFC -------- ---------- ---------- ----------- --------- Revenue: Sales $546,323 $(167,769) $(108,710) $ 269,844 Other income, net 656 396 1,052 -------- ---------- ---------- --------- --------- 546,979 (167,373) (108,710) -- 270,896 Cost and expenses: Cost of sales 419,290 (110,152) (80,621) 228,517 Selling, general and administrative 107,226 (30,208) (8,967) 68,051 Research and development 4,100 (1,114) 2,986 Amortization of goodwill 6,157 (1,637) (624) 3,896 -------- ---------- ---------- --------- --------- 536,773 (143,111) (90,212) -- 303,450 Operating income (loss) 10,206 (24,262) (18,498) -- (32,554) Interest expense 71,159 (60) (291) (26,968)(5) 43,840 Interest income (3,389) 18 (13,710)(5) (17,081) -------- --------- ---------- --------- --------- Net interest expense (income) 67,770 (42) (291) (40,678) 26,759 Investment income, net 5,705 5,705 Equity in earnings (loss) of affiliates 2,369 (762) (1,126)(5) 481 Minority interest (2,449) 156 2,345 (5) 52 -------- --------- ---------- --------- --------- Earnings (loss) from continuing operations before taxes (51,939) (24,826) (18,207) 41,897 (53,075) Income tax provision (benefit) (18,019) (10,410) (7,283) 17,209 (18,503) -------- --------- ---------- --------- --------- Earnings (loss) from continuing operations $(33,920) $(14,416) $ (10,924) $ 24,688 $(34,572) ========= ========= ========== ========= ========= Earnings (loss) per share: Loss from continuing operations $ (2.11) $ (2.15) ========= ========= Weighted average number of shares outstanding 16,103 16,103 ========= =========
See Notes to Pro Forma Condensed Separated Financial Statements. THE FAIRCHILD CORPORATION 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 ========= (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 ========= (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). EX-2.2 2 AMENDMENT NO. 1 TO MERGER AGREEMENT DATED AS OF FEBRUARY 2, 1996 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 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. 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- EX-2.3 3 AMENDMENT NO. 2 TO MERGER AGREEMENT DATED AS OF FEBRUARY 23, 1996 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 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." 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. 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 EX-2.4 4 AMENDMENT NO. 3 TO MERGER AGREEMENT DATED AS OF MARCH 1, 1996 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;". 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:____________________________ -----END PRIVACY-ENHANCED MESSAGE-----