Exhibit 10.1
EXECUTION COPY
VALLEY FORGE VOTING AGREEMENT
THIS VALLEY FORGE VOTING AGREEMENT (this "Agreement") is made
and
entered into as of May 2, 2005 by and among
VALLEY FORGE SCIENTIFIC CORP., a
Pennsylvania corporation ("Valley Forge"),
SYNERGETICS, INC., a Missouri
corporation ("Synergetics"), and the
undersigned shareholders (each a
"Shareholder" and collectively, the
"Shareholders") of Valley Forge.
RECITALS
--------
A.
Concurrently with the execution of this Agreement, Valley
Forge, Synergetics Acquisition Corporation,
a Delaware corporation and a
wholly-owned subsidiary of Valley Forge
("MergerSub"), and Synergetics have
entered into an Agreement and Plan of
Merger (the "Merger Agreement"), providing
for the merger of MergerSub with and into
Synergetics (the "Merger");
B. All
capitalized terms not otherwise defined herein shall have
the meaning ascribed to them in the Merger
Agreement;
C. The
Shareholders are the beneficial holders of record of the
number of shares of outstanding Valley
Forge Shares as is indicated on Schedule
I attached hereto;
D. In
connection with the Merger, Valley Forge will acquire the
Synergetics shareholders' entire equity
interest in Synergetics and each of such
Synergetics shareholders will receive a
percentage of the Synergetics Merger
Consideration; and
E. In
consideration of and to induce the execution of the Merger
Agreement by Valley Forge, MergerSub and
Synergetics, until the Expiration Date
(as defined below), each of the
Shareholders, solely in their capacity as a
shareholder, agrees not to sell or
otherwise dispose of any Valley Forge Shares
held by the Shareholder, and to vote the
Valley Forge Shares so as to facilitate
consummation of the Merger and approve
certain other actions as more fully
described below.
NOW, THEREFORE, in consideration of the mutual promises and the
mutual
covenants contained herein, the parties
agree as follows:
1.
Agreement to Retain Valley Forge Shares. Each Shareholder,
severally and not jointly, agrees not to
transfer, pledge, sell, exchange or
offer to transfer or sell or otherwise
dispose of or encumber ("Transfer") any
of the Valley Forge Shares at any time
prior to the Expiration Date, as defined
herein, excluding (i) Transfers by
testamentary or intestate succession or
otherwise by operation of law, (ii) any
Transfer to a family member or
charitable organization provided that the
transferee agrees in writing to be
bound by the terms of this Agreement to the
same extent as such Shareholder and
(iii) any Transfer pursuant to court order.
The "Expiration Date" shall mean the
earlier of (i) the date and time on which
the Merger shall become effective in
accordance with the terms and provisions of
the Merger Agreement or (ii) the
<PAGE>
date on which the Merger Agreement shall be
terminated pursuant to the terms
therein. Each Shareholder agrees that this
Agreement and the obligations
hereunder shall attach to the Valley Forge
Shares owned by it and shall be
binding upon any person or entity to whom
legal or beneficial ownership of such
Valley Forge Shares shall pass, whether by
operation of law or otherwise,
including, without limitation, their
respective heirs, guardians, administrators
or successors.
2.
Agreement to Vote Valley Forge Shares. At any time prior to
the Expiration Date, at any meeting of the
Valley Forge shareholders called with
respect to any of the following, and at any
adjournment thereof, and with
respect to any written consent solicited
with respect to any of the following,
each Shareholder agrees to vote the Valley
Forge Shares: (i) in favor of
approval of the Merger Agreement and the
Merger and any matter which would, or
could reasonably be expected to, facilitate
the Merger, and (ii) against (A)
approval of any proposal made in opposition
to or competition with consummation
of the Merger and the Merger Agreement, (B)
any merger, consolidation, sale of
assets, reorganization or recapitalization
with any other party, (C) any
liquidation, or winding up of Valley Forge
and (D) any other matter which would,
or could reasonably be expected to,
prohibit or discourage the Merger (each of
the foregoing is referred to as an
"Opposing Proposal"). In addition to the
foregoing, each Shareholder agrees to vote
the Valley Forge Shares in favor of
approval of (w) the Reincorporation, (x) if
necessary, a proposal to increase
the number of authorized Valley Forge
Shares to an amount not less than the sum
of the number of outstanding Valley Forge
Shares immediately following the
effectiveness of the Merger plus any Valley
Forge Shares reserved for issuance
pursuant to Valley Forge's stock option
plans, (y) a proposal to increase the
number of directors on the Valley Forge
Board of Directors to seven (7)
(effective upon consummation of the
Merger), and (z) a proposal to divide the
Valley Forge Board of Directors into three
(3) classes with three-year staggered
terms with the term of office of the Class
"A" directors expiring at Valley
Forge's (or its successor's) annual meeting
of shareholders in 2006, the term of
office of the Class "B" directors expiring
at Valley Forge's (or its
successor's) annual meeting of shareholders
in 2007 and the term of office of
the Class "C" directors expiring at Valley
Forge's (or its successor's) annual
meeting of shareholders in 2008 (effective
upon consummation of the Merger). The
Shareholders further agree to vote the
Valley Forge Shares in favor of election
of the directors as follows (effective upon
consummation of the Merger): (i)
Class "A" directors shall be Larry
Cardinale and Robert Dick; (ii) Class "B"
directors shall be Juanita Hinshaw and an
individual to be mutually agreed to by
Valley Forge and Synergetics; and (iii)
Class "C" directors shall be Jerry
Malis, Gregg D. Scheller and Kurt W. Gampp,
Jr. The Shareholders hereby
acknowledge that, effective upon
consummation of the Merger, the members of each
of the New Synergetics Audit Committee,
Compensation Committee and Nominating
Committee shall be constituted as set forth
in Section 8(c)(viii) of the Merger
Agreement. Each Shareholder, as the holder
of the Valley Forge Shares agrees to
be present, in person or by proxy, at all
meetings of shareholders of Valley
Forge so that all Valley Forge Shares are
counted for the purposes of
determining the presence of a quorum at
such meetings. This Agreement is
intended to bind the Shareholders in their
capacity as a shareholder only and
only with respect to the specific matters
set forth herein, and shall not
prohibit any Shareholder from acting in
accordance with his fiduciary duties as
an officer or director of Valley Forge.
2
<PAGE>
3.
Irrevocable Proxy. Concurrently with the execution of this
Agreement, each Shareholder agrees to
deliver to Synergetics a proxy in the form
attached hereto as Annex A (the "Proxy"),
which shall be irrevocable to the
extent provided therein; provided that the
Proxy shall be revoked upon
termination of this Agreement in accordance
with its terms or at the Expiration
Date.
4.
Additional Shares. For purposes of this Agreement, the term
Valley Forge Shares shall include any
shares of Valley Forge capital stock which
any Shareholder purchases or otherwise
acquires after the execution of this
Agreement and prior to the termination of
this Agreement.
5.
Representations, Warranties and Covenants of Shareholders.
Each Shareholder, severally and not
jointly, hereby represents, warrants and
covenants to Valley Forge and Synergetics
the following:
5.1.
Ownership of Valley Forge Shares. The Shareholder (i)
is the holder and beneficial owner of the
Valley Forge Shares set forth opposite
such Shareholder's name on Schedule I
attached hereto, which at the date hereof
and at all times until the termination of
this Agreement will be free and clear
of any liens, claims, options, charges or
other encumbrances, (ii) does not
beneficially own any shares of stock of
Valley Forge other than such Valley
Forge Shares and (iii) has full power and
authority to make, enter into, deliver
and carry out the terms of this Agreement
and the Proxy and to vote or otherwise
direct the voting of such Valley Forge
Shares.
5.2.
Validity; No Conflict. This Agreement constitutes the
legal, valid and binding obligation of the
Shareholder, enforceable against the
Shareholder in accordance with its terms,
except as such enforceability may be
limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or
relating to creditors' rights generally and
by general principles of equity.
Neither the execution of this Agreement by
the Shareholder nor the consummation
of the transactions contemplated hereby
will result in a breach or violation of
the terms of any agreement by which the
Shareholder is bound or of any decree,
judgment, order, law or regulation now in
effect of any court or other
governmental body applicable to the
Shareholder.
5.3.
No Voting Trusts and Agreements. Between the date of
this Agreement and the Expiration Date, the
Shareholder will not, and will not
permit any entity under the Shareholder's
control to, deposit any Valley Forge
Shares held by the Shareholder or such
entity in a voting trust or subject any
Valley Forge Shares held by the Shareholder
or such entity to any arrangement or
agreement with respect to the voting of
such shares of capital stock, other
