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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
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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
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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
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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 than
agreeme
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