AMENDED AND RESTATED AGREEMENT AND
PLAN OF MERGER AND REORGANIZATION
TABLE OF CONTENTS
Page
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1. Merger ................................................................ A-2
2. The Closing ........................................................... A-2
3. Conversion of Capital Stock ........................................... A-2
4. Escrow Fund ........................................................... A-3
5. Warranties and Representations of inTEST and Newsub ................... A-5
6. Warranties and Representations of the Company ......................... A-7
7. Conduct of Business ................................................... A-15
8. News Releases ......................................................... A-15
9. Registration Statement, Proxy Statement and Piggyback Rights .......... A-15
10. Shareholder Meetings ................................................. A-16
11. Covenants of the Parties ............................................. A-16
12. Conditions to Obligations of Each Party .............................. A-17
13. Conditions to Obligations of the Company ............................. A-17
14. Conditions to Obligations of inTEST and Newsub ....................... A-18
15. Indemnity by inTEST and Newsub ....................................... A-19
16. Indemnities by the Shareholders of the Company ....................... A-20
17. Indemnification Procedure ............................................ A-20
18. Duty to Minimize Damages ............................................. A-22
19. Survival of Representations .......................................... A-22
20. Notices .............................................................. A-22
21. General .............................................................. A-23
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
Agreement and Plan of Merger and Reorganization (the "Agreement") made as
of January 4, 2000 by and among Temptronic Corporation, a Massachusetts
corporation (the "Company"), inTEST Corporation, a Delaware corporation
("inTEST") and Temptronic Corporation, a Delaware corporation ("Newsub").
RECITALS
The Company desires that the Company be merged with and into Newsub.
inTEST owns all of the issued and outstanding capital stock of Newsub and
desires that the Company merge with and into Newsub.
Newsub was incorporated on December 14, 1999 expressly for the purpose of
this Agreement and has not conducted any business.
For federal income tax purposes, it is intended that the merger of the
Company into Newsub shall qualify as a reorganization within the meaning of
Sections 368(a)(1)(A) and 368(a)(2)(D) of the Internal Revenue Code of 1986, as
amended (the "Code").
It is the intent of all parties hereto that at the time of the Closing
(defined below) that the Company be merged with and into Newsub and that Newsub
be the surviving corporation.
WITNESSETH
In consideration of the payments, mutual promises, representations,
covenants and actions herein provided, the parties hereto, each intending to be
legally bound hereby, do agree as follows:
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1. Merger
(a) Agreement of Merger. Subject to the terms and upon the conditions set
forth herein, at the time of the Closing, the Company and Newsub shall execute
and deliver the Agreement of Merger in the form of Exhibit "A" hereto (the
"Agreement of Merger") and file the Agreement of Merger and any required
certificates and other documents with the Secretary of the State of Delaware
and the Secretary of State of Massachusetts.
(b) The Merger. At the time of the Closing, the Company shall be merged
with and into Newsub in accordance with the Agreement of Merger (the "Merger"),
with Newsub as the "Surviving Corporation", and the separate existence of the
Company shall cease.
2. The Closing
The "Closing" hereunder shall be made at 10:00 o'clock a.m. on or about
March 9, 2000 (the "Closing Date") at the offices of Saul, Ewing, ▇▇▇▇▇▇ &
▇▇▇▇, Philadelphia, Pennsylvania, or at such other time and place as the
parties shall mutually agree. In no event shall the Closing take place later
than April 30, 2000 unless all parties hereto agree; and if all of such parties
do not so agree, any party may give notice to the other parties that this
Agreement is terminated.
3. Conversion of Capital Stock
(a) Company Stock. At the time of the Merger, each share of the common
stock of the Company issued and outstanding immediately prior thereto (the
"Company Common Stock") shall be converted into the right to receive .925
shares of the Common Stock of inTEST, par value $.01 per share (the "inTEST
Stock") (the "Exchange Ratio"), and each share of the Company Common Stock
issued and held in the treasury of the Company shall be cancelled and retired.
(b) Newsub Stock. At the time of the Merger, each share of the common
stock, par value $.01 per share, of Newsub (the "Newsub Common Stock") issued
and outstanding immediately prior thereto shall not be converted and shall
remain issued and outstanding.
(c) Company Options. At the time of the Merger, each outstanding option to
acquire or receive Company Common Stock (whether or not vested) (the "Company
Options") shall be transferred to and assumed by inTEST in such manner that it
is converted into an option to purchase shares of inTEST Stock ("inTEST
Option"). Following the time of the Merger each inTEST Option shall be
exercisable upon the same terms and conditions as then were applicable to such
Company Options, except that (i) each inTEST Option shall be exercisable for
that number of shares of inTEST Stock equal to the product obtained by
multiplying the number of shares of Company Common Stock that were issuable
upon exercise in full of such assumed Company Option immediately prior to the
time of the Merger by the Exchange Ratio, rounded down to the nearest whole
number of shares of inTEST Stock and (ii) the per share exercise price for the
shares of inTEST Stock issued upon exercise of inTEST Options shall be equal to
the quotient obtained by dividing the exercise price per share of Company Stock
at which such Company Option was exercisable immediately prior to the time of
the Merger by the Exchange Ratio, rounded up to the nearest whole cent. It is
the intention of the parties that, to the extent that any Company Option
constituted an "incentive stock option" (within the meaning of Section 422 of
the Code) immediately prior to the time of the Merger, the inTEST Option shall
continue to qualify as an incentive stock option to the maximum extent
permitted by Section 422 of the Code and that the assumption of the Company
Options provided by this Section 3(c) satisfy the conditions of Section 424(a)
of the Code. As soon as practicable after the Closing inTEST shall use
reasonable efforts to file and cause to become effective a Form S-8
registration statement under the Securities Act to cover the inTEST Stock to be
issued upon the exercise of the inTEST Options into which the Company Options
are converted.
(d) Exchange Agent. inTEST shall appoint a reputable institution
reasonably acceptable to the Company to serve as Exchange Agent (the "Exchange
Agent") in the Merger.
(e) inTEST to Provide inTEST Stock. Promptly after the time of the Merger,
inTEST shall make available to the Exchange Agent for exchange in accordance
with this Section 3 the shares of inTEST Stock issuable pursuant to Section
3(a) in exchange for all the outstanding shares of the Company Stock.
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(f) Exchange Procedures. Promptly after the time of the Merger, inTEST
shall cause the Exchange Agent to mail to each holder of record (as of the time
of the Merger) of a certificate or certificates (the "Certificates") which,
immediately prior to the time of the Merger represented outstanding shares of
Company Stock, which shares were converted into shares of inTEST Stock pursuant
to Section 3(a), (i) a letter of transmittal (which shall specify that delivery
shall be effective, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall contain
such other provisions as inTEST may reasonably specify) and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for
certificates representing shares of inTEST Stock. Upon surrender of
Certificates for cancellation to the Exchange Agent, together with such letter
of transmittal, duly completed and validly executed in accordance with the
instructions thereto, the holders of such Certificates shall be entitled to
receive in exchange therefor Certificates representing the number of whole
shares of inTEST Stock into which their shares of Company Stock were converted
at the time of the Merger (less the shares of inTEST Stock deposited in the
Escrow Fund), and the Certificates so surrendered shall forthwith be cancelled.
Until so surrendered, outstanding Certificates will be deemed from and after
the time of the Merger, for all corporate purposes, to evidence the ownership
of the number of full shares of inTEST Stock into which such shares of Company
Stock shall have been so converted. If any portion of the inTEST Stock, and
cash in lieu of fractional shares thereof otherwise payable hereunder to any
person, is to be issued or paid to a person other than the person in whose name
the Certificate is registered, it shall be a condition of such issuance or
payment that the Certificate so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the person requesting such
issuance or payments shall pay to the Exchange Agent any transfer or other
taxes required as a result of such issuance or payment to a person other than
the registered holder of such Company Stock or establish to the satisfaction of
the Exchange Agent that such tax has been paid or is not payable.
(g) Fractional Shares. No fractional shares of inTEST Stock shall be
issued pursuant to the Merger. In lieu of the issuance of any fractional share
of inTEST Stock pursuant to the Merger, cash adjustment will be paid to holders
in respect of any fractional share of inTEST Stock that would otherwise be
issuable, and the amount of such cash adjustment shall be equal to the product
of such fractional share and the closing price of inTEST Stock on the Closing
Date.
(h) Rule 145. Subject to applicable law, Company Stock Certificates
surrendered for exchange by any person constituting an "affiliate" of the
Company for purposes of Rule 145 (c) under the Securities Act of 1933, as
amended (the "Securities Act"), shall not be exchanged until inTEST has
received a written agreement in substantially the form attached hereto as
Exhibit "B" from such person agreeing to comply with the provisions of Rule 145
under the Securities Act.
4. Escrow Fund
(a) Escrow Agreement. At the time of the Closing, inTEST, Newsub,
Shareholder Representative and PNC Bank, National Association, (the "Escrow
Agent") shall enter into an Escrow Agreement in the form attached as Exhibit
"C" hereto (the "Escrow Agreement").
(b) Deposits to the Escrow Funds. At the time of the Closing, from the
shares of inTEST Stock to be delivered to the former shareholders of the
Company hereunder, inTEST shall deliver a stock certificate representing 10% of
such shares of the inTEST Stock to the Escrow Agent which shares shall be
deposited in the "Escrow Fund". All such shares shall be held and distributed
in accordance with the terms of this Agreement and the Escrow Agreement.
(c) Claims Under Agreement. If an event or state of facts giving rise to
indemnification under Section 16 hereof has occurred (an "Event"), inTEST shall
provide the Shareholder Representative and the Escrow Agent with a Claim Notice
in accordance with the terms of Section 17 hereof, stating that such Event has
occurred, describing such Event in reasonable detail, specifying the amount of
the Losses and the method of computation thereof, containing a reference to the
provision(s) of this Agreement in respect of which such right of
indemnification is claimed or arises (a "Claim"). inTEST may make more than one
Claim with respect to any Event.
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(i) If all or a portion of the amount described in a Claim Notice
becomes an Admitted Liability or is determined by an arbitrator (as
provided in Section 21(b) hereof) to be due and owing to inTEST, then the
Escrow Agent shall be instructed to distribute, out of the Escrow Fund, to
inTEST (or, at the direction of inTEST, to Newsub) such number of shares
of inTEST Stock having a Market Value equal to the amount due to inTEST.
The "Market Value" of a share of the inTEST Stock for the purposes of this
Agreement shall be the closing price of a share of the inTEST Stock as
reported by The NASDAQ Stock Market ("NASDAQ") on the Closing Date.
(ii) If the Shareholder Representative delivers to inTEST a Dispute
Statement in accordance with the terms of Section 17, then the portion of
the Claim that is disputed shall not be payable by the Escrow Agent to
inTEST or Newsub, except in accordance with a final decision of an
arbitrator (as provided in Section 21(b) hereof) or by joint written
instructions by inTEST and the Shareholder Representative to the Escrow
Agent stipulating the number of shares of inTEST Stock to be distributed
out of the Escrow Fund, which shares of inTEST Stock shall have a Market
Value equal to the amount of the Claim then due and payable.
(iii) If as a result of a Third Party Claim inTEST incurs Losses for
which it is determined that inTEST is entitled to indemnification under
Section 16, then the Escrow Agent shall be instructed to distribute to
inTEST out of the Escrow Fund such number of shares of inTEST Stock
having a Market Value equal to such Losses.
(d) Final Payment from Escrow Fund. On a date one year after the Closing
Date (the "Final Release Date"), the Escrow Agent shall be instructed to
deliver to the former shareholders of the Company the remaining balance of the
inTEST Stock in the Escrow Fund.
(e) Termination of the Escrow. The escrow shall terminate upon the final
disbursement of all shares of inTEST Stock deposited with the Escrow Agent as
provided herein and the Escrow Agreement.
(f) Escrow Agent Fees. The fees of the Escrow Agent shall be paid by
inTEST.
(g) Appointment of Shareholder Representative. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (or
another person designated by the Company) shall, by virtue of the Merger and
the resolutions to be adopted at the Company Shareholders Meeting, be
irrevocably appointed attorney-in-fact and authorized and empowered to act, for
and on behalf of any or all of the shareholders of the Company (with full power
of substitution) in connection with the indemnification provisions of this
Agreement as they relate to such shareholders generally, the Escrow Agreement,
the notice provisions of this Agreement and such other matters as are
reasonably necessary for the consummation of the transactions contemplated
hereby, including to act as the representative of such shareholders to review
and authorize all claims and other payments authorized or directed by the
Escrow Agreement and dispute or question the accuracy thereof, to compromise on
their behalf with inTEST any claims asserted thereunder and to authorize
payments to be made with respect thereto, and to take such further actions as
are authorized in this Agreement. The above-named representative, as well as
any subsequent representative of the shareholders of the Company appointed by
such representative (or, after such representative's death or incapacity,
elected by vote of holders of a majority of capital stock of the Company
outstanding immediately prior to the Merger), is referred to herein as the
"Shareholder Representative." The Shareholder Representative shall not be
liable to any stockholder of the Company, inTEST, Newsub, the Surviving
Corporation or any other person with respect to any action taken or omitted to
be taken by the Shareholder Representative under or in connection with this
Agreement or the Escrow Agreement unless such action or omission results from
or arises out of fraud, gross negligence, willful misconduct or bad faith on
the part of the Shareholder Representative. The shareholders of the Company
shall severally indemnify and hold the Shareholder Representative harmless
against any loss, liability or expense incurred without fraud, gross
negligence, willful misconduct or bad faith on the part of the Shareholder
Representative and arising out of or in connection with the acceptance or
administration of the duties of the Shareholder Representative hereunder,
including the reasonable fees and expenses of any legal counsel retained by the
Shareholder Representative. Each of inTEST and Newsub and each of their
respective affiliates shall be entitled to rely on such appointment and treat
the Shareholder Representative as the duly appointed attorney-in-fact of each
shareholder of the Company. Each shareholder of the Company who votes in favor
of the Merger pursuant to
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the terms hereof, by such vote, without any further action, and each
shareholder of the Company who receives shares of inTEST Stock in connection
with the Merger, by acceptance thereof and without any further action, confirms
such appointment and authority and acknowledges and agrees that such
appointment is irrevocable and coupled with an interest, it being understood
that the willingness of inTEST and Newsub to enter into this Agreement is
based, in part, on the appointment of a representative to act on behalf of the
shareholders of the Company.
5. Warranties and Representations of inTEST and Newsub
inTEST and Newsub, jointly and severally, represent and warrant to the
Company as follows, and all such representations and warranties shall be true
and correct at and as of the Closing as though then made:
(a) Organization of inTEST and Newsub. Each of inTEST and Newsub is a
corporation duly organized and validly existing in good standing under the laws
of the State of Delaware, and each is qualified, in good standing and entitled
to own its properties and conduct its business all as and in the places where
such properties are now owned or such business is conducted, except where
failure to be so qualified would not have a material adverse effect on the
business, results of operation or financial condition, in each case taken as a
whole (a "Material Adverse Effect"), on inTEST and its subsidiaries taken as a
whole. Newsub was incorporated on December 14, 1999 expressly for the purposes
of the Merger and has not conducted any business.
(b) Corporate Power. Each of inTEST and Newsub has all requisite corporate
power and authority to execute and deliver this Agreement and all of the
documents related hereto, to perform all the terms and conditions hereof to be
performed by them and, subject to shareholder approval, to consummate the
transaction contemplated hereby.
(c) Capitalization of inTEST. inTEST has an authorized capital stock of
20,000,000 shares of Common Stock, par value $.01 per share, 6,536,034 shares
of which are duly issued and now outstanding, fully paid and non-assessable,
and 5,000,000 shares of Preferred Stock, par value $.01 per share, none of
which are issued and outstanding. All voting rights are vested exclusively in
the said Common Stock. Except for 500,000 shares of said Common Stock reserved
for issuance under employee and director stock options, there are no authorized
or outstanding options, warrants, convertible securities, subscription rights,
puts, calls, unsatisfied preemptive rights or other rights of any nature to
purchase or otherwise receive, or to require inTEST to purchase, redeem or
acquire any shares of the capital stock of inTEST, and there is no outstanding
security of any kind convertible into such capital stock. No shareholder of
inTEST has been granted any registration rights in respect of the securities of
inTEST. The inTEST Common Stock to be issued pursuant to the Merger will be
duly authorized, validly issued, fully paid and non-assessable, and not subject
to preemptive rights created by statute, inTEST's Certificate of Incorporation
or By-Laws or any agreement to which inTEST is a party or by which inTEST is
bound.
(d) No Proceedings in Dissolution. No proceedings or actions are pending
to limit or impair any of the powers, rights or privileges of inTEST or Newsub.
(e) Certificate of Incorporation and By-Laws. Copies of the Certificates
of Incorporation and By-Laws, and all amendments thereto, of inTEST and Newsub
delivered to the Company are true and complete copies thereof and such
Certificates of Incorporation and By-Laws have not been amended since such
delivery.
(f) Authorization of Agreement and Enforceability. The execution and
delivery of this Agreement on behalf of inTEST and Newsub have been duly
approved by the boards of directors of inTEST and Newsub and the sole
stockholder of Newsub, and, with the exception of approval of this Agreement by
the shareholders of inTEST, no further corporate action is required to approve
the execution, delivery and performance of this Agreement on behalf of inTEST
or Newsub. The Agreement constitutes the legal, valid and binding obligation of
inTEST and Newsub enforceable in accordance with its terms and conditions.
(g) Conflict. Except for the filing and effectiveness of the Registration
Statement and the Joint Proxy Statement, filings under the state securities
laws, the approval by the shareholders of inTEST and Newsub, and the
fulfillment of the conditions required under this Agreement, the execution,
delivery and performance
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by inTEST and Newsub of this Agreement and the consummation of the transactions
contemplated hereby will not (with or without the giving of notice or the lapse
of time, or both): (i) violate any provision of the Certificate of
Incorporation or By-Laws of inTEST or Newsub, (ii) violate or require any
consent, authorization or approval of, or exemption by, or filing under any
provisions of law, statute, rule or regulation to which inTEST or Newsub is
subject, (iii) violate any judgment, order, writ or decree of any court
applicable to inTEST or Newsub, (iv) conflict with, result in a breach of,
constitute a default under, or accelerate or permit the acceleration of the
performance required by or require any consent, authorization or approval
(which has not been obtained) under any contract, agreement or instrument to
which inTEST or Newsub is a party or any of the assets of inTEST or Newsub are
bound, or (v) result in the creation or imposition of any claim, demand,
charge, mortgage, judgment, lien, lease, security interest, easement or any
encumbrance whatsoever upon any of the assets of inTEST or Newsub, which
violation, conflict, breach, default, acceleration or encumbrance or the
failure to make or obtain such filing, consent, authorization or approval with
respect to the matter specified in clauses (ii) through (v) could, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect
on inTEST or prevent or delay the consummation of the transactions contemplated
by this Agreement.
(h) Consents. No consent, waiver, approval, order or authorization of, or
registration, declaration or filing with, any governmental body or any other
party is required by or with respect to inTEST or Newsub in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for (i) the filing with the Securities
and Exchange Commission (the "SEC") of the joint proxy statement of inTEST and
the Company, as amended from time to time through effectiveness (the "Joint
Proxy Statement"), pursuant to the Securities Act for the solicitation of the
approval of the shareholders of inTEST, (ii) the filing with the SEC of a
registration statement on Form S-4 (the "Registration Statement") pursuant to
the Securities Act with respect to those shares of inTEST issuable in the
Merger, in which the Joint Proxy Statement will be included as part of the
Registration Statement, (iii) such consents, waivers, approvals, orders,
authorizations, registrations, declarations and filings as may be required
under applicable federal and state securities law, (iv) any applicable filing
required under the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (v) the approval of the shareholders of inTEST, (vi)
any other such filings or approvals as may be required under Delaware law and
(vii) such consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings which, if not obtained or made would not, individually
or in the aggregate have a Material Adverse Effect on inTEST or prevent or
materially delay the consummation of the transactions contemplated hereby.
(i) Financial Statements and SEC Reports.
(i) The audited consolidated balance sheet of inTEST as of December 31,
1998 (the "inTEST Balance Sheet"), and the related consolidated statements
of earnings, changes in shareholders' equity and cash flows for the year
then ended, with related notes, certified by KPMG LLP, certified public
accountants, copies of which have been delivered to the Company, present
fairly the financial position and results of operations and changes in
financial position of inTEST on the date or for the fiscal period covered
by such financial statements and were prepared in accordance with United
States generally accepted accounting principles ("GAAP"), and there has
been no material adverse change in the condition, financial or otherwise,
results of operations, retained earnings or business of inTEST from that
set forth in the financial statements dated December 31, 1998.
(ii) inTEST has filed all forms, reports and documents required to be
filed by it with the SEC under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (collectively, the "SEC Reports"). The SEC
Reports (i) at the time filed complied in all material respects in
accordance with the requirements of the Securities Act and the Exchange
Act, as the case may be, and the rules and regulations thereunder and (ii)
did not, at the time they were filed, contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. No
subsidiary of inTEST is currently required to file any form, report or
other document with the SEC under Section 12 of the Exchange Act.
(iii) inTEST has delivered to the Company a copy of each SEC Report in
the form filed with the SEC (excluding exhibits and any amendments
thereto and all documents incorporated by reference
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therein) since January 1, 1999. inTEST has furnished to the Company
complete and correct copies of all material amendments and modifications
(if any) that have not been filed by inTEST with the SEC to all agreements,
documents and other instruments that previously had been filed by inTEST as
exhibits to SEC Reports and are currently in effect.
(j) No Undisclosed Liabilities. Except (i) to the extent set forth on the
inTEST Balance Sheet, including the Notes thereto, or (ii) as disclosed in any
SEC Report filed by inTEST after December 31, 1998, inTEST does not have any
liability or obligation of any nature (whether accrued, absolute, contingent or
otherwise) which would be required to be reflected on a balance sheet, or in
the notes thereto, prepared in accordance with GAAP which would have a Material
Adverse Effect on inTEST, except for liabilities and obligations incurred in
the ordinary course of business consistent with past practice since December
31, 1998.
(k) Litigation. Except as set forth in Schedule "5(k)", there are no
material actions, suits or proceedings pending or, to the Actual Knowledge
(defined below) of inTEST or Newsub, threatened against or affecting inTEST or
Newsub or their properties or business before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency,
court or instrumentality. To the Best Knowledge (defined below) of inTEST,
there is no basis for any such action, suit or proceeding, the outcome of which
would have a Material Adverse Effect on inTEST. There are no outstanding
orders, decrees or stipulations which will have a Material Adverse Effect on
inTEST. There is no litigation or proceedings pending or, to the Actual
Knowledge of inTEST, threatened against or affecting inTEST or Newsub or
pertaining to this Agreement, the result of which could prevent, delay or make
unlawful the consummation of the transaction contemplated by this Agreement.
(l) Finders Fee. No person, corporation, partnership or firm retained by
or on behalf of inTEST or Newsub (i) brought about the transaction contemplated
hereunder or (ii) is entitled to any commission or fee from the Company, inTEST
or Newsub upon consummation of such transaction.
6. Warranties and Representations of the Company
The Company represents and warrants to inTEST and Newsub as follows and
all such representations and warranties shall be true and correct at and as of
the Closing as though then made:
(a) Organization of the Company. The Company is a corporation duly
organized, validly existing and in good standing under the laws of The
Commonwealth of Massachusetts. The Company has full corporate power and
authority to own, lease and use its properties and assets that it purports to
own, lease or use and to carry on its business as presently conducted. The
Company is duly qualified or licensed to do business and is in good standing as
a foreign corporation in each of the jurisdictions where the nature of its
business requires such qualification, except as set forth in Schedule "6(a)" or
except where the failure to be so qualified would not result in a loss to or a
liability of the Company in excess of $5,000. The Company is duly qualified and
licensed to do business in the jurisdictions set forth in Schedule "6(a)".
(b) Corporate Power. The Company has all requisite corporate power and
authority to execute and deliver this Agreement and all of the documents
related hereto, and subject to the approval of the shareholders of the Company,
to consummate the transaction contemplated hereby and to perform all of the
terms and conditions hereof to be performed by the Company.
(c) Capitalization. The authorized capital stock of the Company consists
of 3,000,000 shares of Common Stock, of which 2,204,120 shares are issued and
outstanding. All of the said shares of the Company Common Stock are validly
issued, fully paid and non-assessable and are entitled to vote at the
shareholder meeting at which the Merger will be considered, and none of the
shares of the Company Common Stock has been issued in violation of any
applicable law or any pre-emptive rights of any shareholder by which the
Company is bound or transferred in violation of any transfer restrictions
relating thereto under the Stockholders Agreements set forth on Schedule "6(c)"
(the "Stockholder Agreements"). Except as set forth in Schedule "6(c)", there
are no authorized or outstanding options, warrants, convertible securities,
subscriptions rights, puts, calls, unsatisfied pre-emptive rights or other
rights of any nature to purchase or otherwise receive, or to require the
Company to purchase, redeem, acquire or register, any shares of the capital
stock or other
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securities of the Company, and there is no outstanding security of any kind
convertible into such capital stock. Except as set forth in Schedule "6(c)", to
the Best Knowledge of the Company, there are no existing stockholder
agreements, voting agreements or voting trusts respecting any shares of the
capital stock of the Company.
(d) Corporate Instruments and Records. The copies of the Company's
Articles of Organization and By-Laws heretofore furnished to inTEST are true,
correct and complete and each include all amendments to the date of this
Agreement. Copies of the Company's minute books, as made available to inTEST,
contain a true and correct record of all material corporate action taken on or
prior to the date of this Agreement at the meetings of the Company's
shareholders and directors and committees thereof, and no meetings of any
shareholders, directors or committees have been held for which minutes have not
been prepared and are not contained in such minute books. Copies of the stock
certificate books and ledgers of the Company, as made available to inTEST for
inspection, are true, correct and complete copies of such books and ledgers, as
currently in effect, and accurately reflect, as of the date hereof, the
ownership of the Company Common Stock. The books of account, minute books,
stock record books and other records of the Company, copies of all of which
have been made available to inTEST, are complete and correct in all material
respects and have been maintained in accordance with reasonably sound business
practices. On the Closing Date, all of the Company's minute books and corporate
records will be in the possession of the Company.
(e) Subsidiaries. Except as set forth on Schedule "6(e)", the Company (i)
has no subsidiaries or affiliates or any ownership interest in any other
entity, (ii) is not a party to any joint venture and (iii) does not have the
right to acquire any securities of or ownership interest in any other person or
entity. Each of the subsidiaries of the Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated. Each subsidiary has full corporate
power and authority to own, lease and use its properties and assets that it
purports to own, lease or use and to carry on its business as presently
conducted. Each subsidiary of the Company is duly qualified or licensed to do
business and is in good standing in each of the jurisdictions where the nature
of its business requires such qualification, except where the failure to be so
qualified would not result in a loss or liability of such subsidiary in excess
of $5,000.
(f) No Proceedings in Dissolution. No proceedings or actions are pending
to limit or impair any of the powers, rights or privileges of the Company.
(g) Authorization of Agreement and Enforceability. The execution and
delivery of this Agreement on behalf of the Company have been duly approved by
the Board of Directors of the Company, and no further corporate action is
required to approve the execution and delivery of this Agreement on behalf of
the Company. This Agreement constitutes the legal, valid and binding obligation
of the Company, enforceable in accordance with its terms and conditions.
(h) Property and Assets. Schedule "6(h)" contains a true and correct
schedule and brief description of all of the tangible personal property owned
or leased by the Company having a fair market value in excess of $2,500, and
such assets are in good operating condition, reasonable wear and tear excepted,
and generally conform with all applicable municipal ordinances, regulations,
building and zoning laws. Except as set forth in Schedule "6(h)", the Company
has good title, free from any liens, security interests or encumbrances of any
kind, to all the assets listed or described as being owned in the Company
Balance Sheet and Schedule "6(h)", except for (i) any lien, claim or
encumbrance securing taxes, assessments, governmental charges or levies, or the
claims of materialmen, carriers, landlords and like persons, all of which are
not yet due and payable, and (ii) imperfections of title and other minor liens,
claims and encumbrances that do not materially detract from the value or impair
the use of the asset subject thereto. None of such assets, property or
operations of the Company have been adversely affected by fire, windstorm,
floods, strikes, walkouts, acts of God, condemnation of property or any other
cause.
(i) Financial Statements. The books of the Company fairly and correctly
reflects its income, expenses, assets and liabilities in accordance with GAAP
consistently applied. The balance sheets of the Company as of June 30, 1999,
1998 and 1997 and the related statements of income, shareholders' equity and
cash flow for the years then ended, certified by Ernst & Young LLP, independent
public accountants, and an unaudited balance sheet of the Company at November
30, 1999 (the "Company Balance Sheet") and the related
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Statement of Income, with related notes, copies of which have been delivered to
inTEST, present fairly the financial position and results of operations and
changes in financial position of the Company on the dates and for the fiscal
periods covered by such financial statements and were prepared in accordance
with GAAP applied on a consistent basis. There has been no Material Adverse
Effect on the financial condition, results of operations, retained earnings or
business of the Company from that set forth in the financial statements dated
November 30, 1999.
(j) No Undisclosed Liabilities. The Company has no debts, liabilities or
obligations in excess of $5,000 in the aggregate, known or unknown, of any
kind, character or description whether accrued, absolute, contingent or
otherwise or due or to become due, except (i) to the extent reflected in the
Company Balance Sheet; (ii) to the extent described or referred to in this
Agreement or in any Schedule to this Agreement; and (iii) those incurred in or
as a result of the ordinary course of business of the Company since November
30, 1999, each of which has been consistent with past practices. To the Best
Knowledge of the Company, there is no basis for the assertion against the
Company by any person of any claim in excess of $5,000 based on a liability
which is required to be and is not disclosed in the Company Balance Sheet or on
Schedule "6(p)".
(k) Accounts Receivable. All accounts receivable of the Company (i) have
or will have arisen only in the ordinary course of business consistent with
past practice for goods sold and delivered or services performed and (ii) are
collectable and will be collected in full at the recorded amounts thereof
(subject to no defenses, set-offs or counterclaims, other than the right of
customers to return goods) in the ordinary course of business (without resort
to litigation or assignment to a collection agency) no later than December 31,
2000, net of any allowance for bad debts reflected on the Company Balance
Sheet.
(l) Inventory. The inventory of the Company (i) was acquired and
maintained in accordance with the regular business practices of the Company,
(ii) consists of new and unused items of a quality and quantity usable and, to
the Best Knowledge of the Company, salable in the ordinary course of the
Company's business consistent with past practice, and (iii) is valued in
accordance with GAAP consistently applied and the value of obsolete items,
slow-moving items and of items below standard quality have been written off or
adequate reserves have been provided therefor.
(m) No Violation or Consents. Except as set forth on Schedule "6(m)", the
execution, delivery and performance by the Company of this Agreement and the
consummation of the transactions contemplated hereby will not (with or without
the giving of notice or the lapse of time, or both) (i) violate any provision
of the Articles of Organization or By-Laws of the Company, (ii) violate or
require any consent, authorization or approval of, or exemption by, or filing
under any provision of any law, statute, rule or regulation to which the
Company is subject, (iii) violate any judgment, order, writ or decree of any
court applicable to the Company, (iv) conflict with, result in a breach of,
constitute a default under, or accelerate or permit the acceleration of the
performance required by or require any consent, authorization or approval under
any contract, agreement or instrument to which the Company is a party or any of
the assets of the Company is bound or (v) result in the creation or imposition
of any claim, demand, charge, mortgage, judgment, lien, lease, security
interest, easement or any encumbrance whatsoever upon any of the assets of the
Company, which violation, conflict, breach, default, acceleration or
encumbrance or the failure to make or obtain such filing, consent,
authorization or approval with respect to the matter specified in clauses (ii)
through (v) could, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company or prevent or delay the
consummation of the transactions contemplated by this Agreement.
(n) Taxes. The Company has duly prepared and timely filed all federal,
state, local and other tax returns which are required to be filed and which
were due prior to the date of this Agreement and has paid all taxes and
assessments which have become due pursuant to such returns or pursuant to any
assessment received by the Company. All such tax returns were true and correct
in all material respects and have been completed in all material respects in
accordance with applicable law. All federal, state, local and other taxes
accruable since the filing of such returns have been accrued on the books of
the Company. All taxes and other assessments and levies which the Company has
been required by law to withhold or to collect have been duly withheld and
collected and have been paid over to the proper governmental authorities or
have been properly provided for by the Company for such payment and all other
payments due in connection therewith, to the extent accrued through November
30, 1999, are duly reflected in the Balance Sheet of the Company. No
proceedings
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or other action has been taken, nor is there any basis for any proceedings or
other action to be taken, for the assessment and collection of additional taxes
of any kind for any period for which returns have been filed, and no additional
taxes of any kind in excess of $5,000 for any such period will be assessed or
collected. Since the examination of the 1987 federal income tax returns of the
Company, none of the federal income tax returns of the Company has been
examined by the Internal Revenue Service and to the Actual Knowledge of the
Company, there is no examination by the Internal Revenue Service presently
pending.
(o) Governmental Approvals. The Company has all permits, licenses,
registrations, orders and approvals of federal, state or local government or
regulatory bodies that are required for it to conduct its business as presently
conducted (including, without limitation, those required under any
environmental law) (collectively the "Permits") where the failure to obtain any
Permits would result in a loss to or a liability of the Company in excess of
$5,000. All Permits are in full force and effect, and the Company is in
material compliance with all of the terms and conditions of the Permits.
Schedule "6(o)" hereto sets forth the correct and complete list of all material
Permits. To the Best Knowledge of the Company, no suspension or cancellation of
any of the Permits is threatened and, to its Best Knowledge, no cause exists
for such suspension or cancellation.
(p) Litigation. Except set forth in Schedule "6(p)", there are no actions,
suits or proceedings pending or, to the Actual Knowledge of the Company,
threatened against or affecting the Company, its assets or business before or
by any federal, state, municipal or other governmental department, commission,
board, bureau, agency, court or instrumentality. Except set forth in Schedule
"6(p)", there is no basis for any such action, suit or proceeding, the outcome
of which would result in a loss to or a liability of the Company in excess of
$5,000, and there are no outstanding orders, decrees or stipulations which
would have a Material Adverse Effect on the Company. There is no litigation or
proceedings pending or, to the Actual Knowledge of the Company, threatened
against or affecting the Company or pertaining to this Agreement, the result of
which could prevent, delay or make unlawful the consummation of the transaction
contemplated by this Agreement.
(q) Compliance with Laws. The Company has at all times conducted, and is
presently conducting, its business so as to comply with all laws, ordinances
and regulations applicable to the conduct or operation of its business or the
ownership or use of its assets, in each case except where the failure to comply
would not, individually or in the aggregate result in a loss to or a liability
of the Company in excess of $5,000.
(r) Contracts and Commitments. Except as listed and described on Schedule
"6(r)" hereto, the Company is not a party to any written or oral:
(i) agreement, contract or commitment for the future purchase of or
payment for supplies or products or for the performance of
services by another party involving in any one case $5,000 or
more per annum;
(ii) agreement, contract or commitment to sell or supply products or
to perform services involving in any one case $5,000 or more per
annum (other than purchase orders received by the Company in the
ordinary course of business);
(iii) agreement, contract or commitment continuing over a period of
more than six months from the date hereof or exceeding $5,000 in
value per annum;
(iv) representative, sales agency, dealer or distributor agreement,
contract or commitment;
(v) lease under which the Company is either lessor or lessee with
respect to real property;
(vi) note, debenture, bond, conditional sale agreement, equipment
trust agreement, letter of credit agreement, loan agreement or
other contract or commitment for the borrowing or lending of
money (including, without limitation, loans to or from
employees) or guarantee, pledge or undertaking of the
indebtedness of any other corporation, firm or person (other
than endorsement of items for deposit in the ordinary course of
business);
(vii) agreement, contract or commitment for any charitable or
political contribution;
(viii) agreement, contract or commitment limiting or restraining the
Company or any successor or assign from engaging or competing in
any lines of business with any corporation, firm or person;
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(ix) license, franchise, distributorship or other agreement,
including those that relate in whole or in part, to any patent,
trademark, tradename, service ▇▇▇▇ or copyright, or to any
ideas, technical assistance or other know-how of or used in the
business of the Company; or
(x) any other agreement, contract or commitment not made in the
ordinary course of business.
Each of the agreements, contracts, commitments, leases and other
instruments, documents and undertakings listed on Schedule "6(r)" hereto (the
"Commitments") is valid and enforceable in accordance with its terms, the
Company is in material compliance with the provisions thereof, the Company is
not in default in the performance, observance, or fulfillment of any material
obligation, covenant or condition contained in any Commitment, and no event has
occurred that, with or without the giving of notice or lapse of time, or both,
would constitute a default thereunder by the Company; and, to the Best
Knowledge of the Company, no such Commitment contains any contractual
requirement with which there is a reasonable likelihood the Company will be
unable to comply. Except as set forth in Schedule "6(r)", no advance payments
have been received by the Company from or on behalf of any party to any of the
Commitments for services to be rendered or products to be delivered to such
party after the Closing Date, and no consent or approval of any party to any
Commitment is required for the execution of this Agreement or the consummation
of the transaction contemplated hereby.
(s) Insurance. Schedule "6(s)" hereto is a true and complete list of all
insurance policies now owned by the Company covering the lives of shareholders,
product liabilities, umbrella and excess liabilities and blanket crime, all of
which policies are valid and are in full force and effect. The surrender value
of the life insurance policies owned by the Company is not less than
$1,031,320.
(t) Finder's Fee. With the exception of OEM Capital Corp. who will be paid
by inTEST, no person, corporation, partnership or firm retained by or on behalf
of the Company (i) brought about the transaction contemplated hereunder or (ii)
is entitled to any commission or fee from the Company, inTEST or Newsub upon
the consummation of such transaction.
(u) Employees. Schedule "6(u)" hereto is a true and correct list of all
current employees of the Company and a description of their titles and
positions and the wages (including base rates and total compensation for 1998
and 1999), benefits and vacation schedules currently paid or provided for such
employees.
(v) Labor Disputes. Except as set forth in Schedule "6(v)", there are no
discrimination complaints nor any other kind of employment or labor related
disputes against the Company in connection with its business pending before or,
to the Actual Knowledge of the Company, threatened before any federal, state or
local court or agency, and to the Best Knowledge of the Company, no disputes
respecting minimum wage or overtime claims or other conditions or terms of
employment exist. The Company has not experienced any labor disputes or any
work stoppage due to labor disagreements within the past three years. With
respect to the Company and its business (i) there is no unfair labor practice
charge or complaint against the Company pending or to the Actual Knowledge of
the Company threatened before the National Labor Relations Board; (ii) there is
no labor strike, slow down or stoppage pending or, to the Actual Knowledge of
the Company, threatened against or affecting the Company; and (iii) no question
concerning representation has been raised within the past three years, or to
the Actual Knowledge of the Company, is threatened respecting its employees.
(w) Customers and Suppliers. To the Best Knowledge of the Company, there
is no controversy with any customers or suppliers of a nature which,
individually or in the aggregate, will result in a loss to or a liability of
the Company in excess of $5,000.
(x) Proprietary Rights.
(i) Patents and Trademarks. Schedule "6(x)(i)" hereto sets forth a
correct and complete list of all patents, registered copyrights,
maskworks, logos, trademarks, tradenames, service marks and other
intellectual property rights and applications or registrations
therefor used in the business of the Company and/or owned by the
Company (collectively and including inventions and trade secrets,
the "Proprietary Rights").
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(ii) Fees. All necessary registration, maintenance and renewal fees in
connection with the Proprietary Rights, the absence of which would
have a Material Adverse Effect on the Company or the conduct of the
Company's business, have been paid and the necessary documents and
certificates in connection with such Proprietary Rights have been
filed with the relevant patent, copyright, trademark or other
authorities of the United States or foreign jurisdictions, as the
case may be, for the purposes of maintaining such Proprietary Rights
when commercially reasonable.
(iii) Rights and Title. The Company owns or possesses adequate licenses
or other valid rights to use (without making any payment to others,
except for standard software license payments or the obligation to
grant rights to others in exchange) all of the Proprietary Rights.
The Proprietary Rights constitute all such rights necessary to
conduct the business of the Company as presently conducted. The
validity of the Proprietary Rights and the rights therein of the
Company have not been questioned in any litigation to which the
Company is a party, nor, to the Actual Knowledge of the Company, is
any such litigation threatened or any claim made. To the Best
Knowledge of the Company, the conduct of the business of the Company
as presently conducted does not conflict with patent rights,
licenses, trademark rights, tradename rights, copyrights, maskworks
or other intellectual property rights of others, except as set forth
in Schedule 6(x)(iii).
(iv) Infringement. To the Best Knowledge of the Company, there is no
use of any of the Proprietary Rights being made by any corporation,
firm or person other than the Company that has not been authorized
by the Company as set forth on Schedule 6(x)(iv).
(v) Conflicts. No present or former director or officer or employee, or
consultant of the Company has any interest in any of the Proprietary
Rights.
(y) ERISA.
(i) Employee Benefit Plans. Schedule "6(y)" hereto contains a correct
and complete list of each employee benefit plan subject to the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), each holiday, vacation or other bonus practice or any
other employee pay practice, arrangement, agreement or commitment
maintained by or with respect to which the Company has any liability
or obligation, whether actual or contingent, with respect to any of
its employees or their respective beneficiaries.
(ii) Retiree Benefits. Except as set forth on Schedule 6(y), the
Company has no ERISA plan or other employee arrangement which
provides for the payment of retiree benefits.
(iii) Compliance. Except as disclosed in Schedule "6(y)", all employee
benefit plans of the Company are and have been operated in full
compliance with all applicable laws including, without limitation,
the Health Insurance Portability and Accountability Act, ERISA and
the regulations thereunder, and the Code (including Section 4980B
thereof). There are no violations of Sections 404, 406, or 407 of
ERISA, no prohibited transaction (as defined in the Code or ERISA),
no violation of the reporting and disclosure provisions of ERISA and
the Code, and no termination or partial termination (including any
termination or partial termination attributable to the Merger) of
any employee benefit plan maintained or established by the Company
or to which the Company contributes or has contributed. Except as
disclosed in Schedule "6(y)", no event has occurred or is expected
to occur which will result in liability to the Company in connection
with any employee pension benefit plan (as defined in ERISA)
established, maintained, or contributed to (currently or previously)
by the Company. If required by applicable law, the Company has
properly submitted, or intends to properly submit, all employee
benefit plans described in Schedule "6(y)" in good faith for the
purpose of meeting the applicable - requirements of ERISA or the
Code, as the case may be, to the Internal Revenue Service for its
approval within the time prescribed therefor under applicable
federal regulations.
A-12
(iv) Accruals. Except as set forth in Schedule "6(y)", the Company has
made on or prior to the date hereof and will have accrued on or
prior to the Closing Date all payments required to be made by it on
or prior to the date hereof and the Closing Date, and has accrued
(in accordance with GAAP) as of the date hereof and will have
accrued on or prior to the Closing Date all payments due but not yet
payable as of the date hereof and the Closing Date, so there have
not been nor will there be any Accumulated Funding Deficiencies (as
defined in ERISA or the Code), in respect of the employee benefit
plans, or waivers of such deficiencies.
(v) Multi-Employer Plans. Except as specifically set forth in Schedule
"6(y)", the Company does not sponsor or maintain, and is not a
contributing employer or otherwise a party to, nor has any
obligation or liability under or with respect to, and has never
maintained or participated in, or been obligated to contribute to
any defined benefit plan (as defined in Section 3(35) of ERISA) or
multi-employer plan (as defined in Section 3(37) of ERISA).
(z) Affiliate Transaction. Schedule "6(z)" hereto sets forth a summary of
all purchases of goods or services from the Company by any Affiliate of the
Company (except transactions for the purchases of goods or services between the
Company and any subsidiary of the Company in the ordinary course consistent
with past practices) for the three years ended as of the Closing Date. No
Affiliate of the Company provides any services or products to the Company. For
the purposes of this Agreement, the term "Affiliate" shall mean any director,
employee or any person or entity that directly or indirectly controls the
Company, is controlled by, or is under common control with, the Company.
(aa) Environmental Matters.
(i) Notice of Violation. The Company has not received any notice
relating to its business or any real property owned or leased by the
Company alleging any violation of any Environmental Law (defined
below) or any written request for written information from any
governmental agency or any other corporation, firm or person
pursuant to any Environmental Law. The Company and all real property
which the Company leases or uses is in compliance in all material
respects with, and is not in material violation of or liable under,
any applicable Environmental Law.
(ii) No Releases. Except as set forth in Schedule "6(aa)(ii)" hereto or
as authorized by any valid permit issued pursuant to any
Environmental Law, there are no Regulated Substances released by the
Company or any other person, firm or corporation on or beneath any
of the real property leased or used by the Company in quantities or
concentrations that could give rise to obligations,
responsibilities, liabilities or debts of the Company under any
Environmental Law.
(iii) Notice of Violation. The Company has not received any notice or
order from any governmental agency or private or public entity in
connection with its business advising it that the Company is
responsible for or potentially responsible for remediation or paying
for the cost of investigation or remediation of any Regulated
Substance, and the Company has not entered into any agreements
pertaining thereto.
(iv) Underground Problems. Except as set forth in Schedule "6(aa)(iv)",
none of the real property leased or used by the Company contains any
asbestos, equipment using PCB's, drums buried in the ground,
underground storage tanks, underground injection ▇▇▇▇▇ or septic
tanks in which processed waste water or any Regulated Substances
have been disposed.
(v) Environmental Studies. Schedule "6(aa)(v)" hereto identifies all
environmental studies in possession of the Company or its Affiliates
relating to any real property leased or used by the Company, and
true and complete copies of said studies have been delivered to
inTEST.
(vi) Environmental Law. "Environmental Law" shall mean any legal
requirement that requires or relates to:
o advising appropriate authorities, employees, and the public of
intended or actual releases of any Regulated Substance (defined
below), violations of discharge limits, or other prohibitions and
of the commencements of activities, such as resource extraction or
construction, that could have significant impact on the
environment;
A-13
o preventing or reducing to acceptable levels the release of
Regulated Substances into the environment;
o reducing the quantities, preventing the release, or minimizing the
hazardous characteristics of wastes that are generated;
o assuring that products are designed, formulated, packaged, and used
so that they do not present unreasonable risks to human health or
the environment when used or disposed of;
o protecting resources, species, or ecological amenities;
o reducing to acceptable levels the risks inherent in the
transportation of Regulated Substances, or other potentially
harmful substances;
o cleaning up Regulated Substances that have been released,
preventing the threat of release, or paying the costs of such
cleanup or prevention;
o making responsible parties pay private parties, or groups of them,
for damages done to their health or the environment, or permitting
self-appointed representatives of the public interest to recover
for injuries done to public assets by, or as a result of exposure
to, Regulated Substances; or
o any governmental authorization issued pursuant to any of the above.
(vii) Regulated Substance. "Regulated Substance" shall include any (i)
"hazardous substance," "pollutants," or "contaminant" (as defined in
Sections 101(14) and (33) of CERCLA or the regulations issued
pursuant to Section 102 of CERCLA and found at 40 C.F.R.ss.302),
including any element, compound, mixture, solution, or substance
that is designated pursuant to Section 102 of CERCLA; (ii) substance
that is designated pursuant to Section 311(b)(2)(A) of the Federal
Water Pollution Control Act, as amended (33 U.S.C.ss.ss.1251,
1321(b)(2)(A)) ("FWPCA"); (iii) hazardous waste having the
characteristics identified under or listed pursuant to Section 3001
of the Resource Conservation and Recovery Act, as amended (42
U.S.C.ss.ss.6901, 6921) ("RCRA"); (iv) substance containing
petroleum, as that term is defined in Section 9001(8) of RCRA; (v)
toxic pollutant that is or may be listed under Section 307(a) of
FWPCA; (vi) hazardous air pollutant that is listed under Section 112
of the Clean Air Act, as amended (42 U.S.C.ss.ss.7401, 7412); (vii)
imminently hazardous chemical substance or mixture with respect to
which action has been taken pursuant to Section 7 of the Toxic
Substances Control Act, as amended (15 U.S.C.ss.ss.2601, 2606);
(viii) source, special nuclear, or by product material as defined by
the Atomic Energy Act of 1954, as amended (42 U.S.C.ss.2011 et
seq.); (ix) asbestos, asbestos-containing material, or urea
formaldehyde or material that contains urea formaldehyde; (x) waste
oil and other petroleum products; and (xi) any other toxic
materials, contaminants, or hazardous substances or wastes pursuant
to any Environmental Law.
(bb) Product Warranties. Schedule "6(bb)" hereto contains true, correct
and complete copies of all product warranties issued by the Company which
remain outstanding for products sold by the Company prior to the Closing Date.
Except as set forth in Schedule "6(bb)": (i) the Company has made no other
written warranties relating to its products or services that would materially
increase the warranty obligations of the Company and (ii) there is no pending
or, to the Best Knowledge of the Company, threatened claim against the Company
on account of product warranties or with respect to defective or inferior
products in excess of $20,000.
(cc) Disclosure. None of the representations by the Company made in this
Agreement or in any Schedule or Exhibit hereto and the statements made in all
certificates furnished by it, required by this Agreement contains any untrue
statement of a material fact or omits to state any material fact necessary to
make any such representations or statements not misleading. Except as set forth
in Schedule "6(cc)", to the Best Knowledge of the Company, there is no fact
which may have a Material Adverse Effect on the Company which has not been set
forth in this Agreement or any Schedule hereto.
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7. Conduct of Business
Except as set forth in Schedule "7" hereto or in order to consummate the
transaction contemplated by this Agreement, during the period between November
30, 1999 and the Closing Date, the Company has and shall have conducted its
business in the usual and normal course consistent with past practices and has
and shall have refrained from any extraordinary transactions.
8. News Releases
No notices to third parties or any publicity, including press releases,
concerning any of the transactions provided for herein shall be made unless
planned and coordinated jointly between the Company and inTEST, unless inTEST
is advised by counsel that a news release or disclosure is required or
appropriate; provided that, in such case, inTEST shall deliver to the Company a
copy of the text of the proposed news release as far in advance of its
disclosure as is practicable, and shall in good faith consult with and consider
the suggestions of the Company concerning the nature and scope of the news
release.
9. Registration Statement, Proxy Statement and Piggyback Rights.
(a) Filing of Registration Statement. As soon as practicable after the
execution of this Agreement, inTEST shall, with the assistance and cooperation
of the Company, prepare and cause to be filed with the SEC a Joint Proxy
Statement and the Registration Statement. Each of inTEST and the Company shall
use all reasonable efforts to cause the Registration Statement and the Joint
Proxy Statement to comply with applicable law and the rules and regulations
promulgated by the SEC, to respond promptly to any comments of the SEC or its
staff, and to have the Registration Statement declared effective under the
Securities Act as promptly as practicable after it is filed with the SEC; and
the Company shall cooperate with inTEST in connection with such matters. inTEST
and the Company shall use all reasonable efforts to cause the Joint Proxy
Statement to be mailed to their respective shareholders as promptly as
practicable after the Registration Statement is declared effective under the
Securities Act.
(b) Furnishing Information. Each of the parties hereto shall promptly
furnish to the other party all information concerning itself, its shareholders
and its affiliates that may be required or reasonably requested in connection
with any action contemplated by this Section 9. If any event relating to inTEST
or the Company occurs, or if inTEST or the Company becomes aware of any
information, that should be disclosed in an amendment or supplement to the
Registration Statement or the Joint Proxy Statement, then inTEST or the
Company, as applicable, shall inform the other thereof and shall cooperate with
each other in filing such amendment or supplement with the SEC and, if
appropriate, in mailing such amendment or supplement to the shareholders of
inTEST and the Company. inTEST will notify the Company promptly upon the
receipt of any comments from the SEC or its staff or any other government
officials and of any request by the SEC or its staff or any other government
officials for amendments or supplements to the Registration Statement or the
Joint Proxy Statement or for additional information and will supply the Company
with copies of all correspondence between inTEST or any of its representatives,
on the one hand, and the SEC or its staff or any other government officials, on
the other hand, with respect to the Registration Statement, the Joint Proxy
Statement or the Merger. The Joint Proxy Statement shall include the
recommendations of the Boards of Directors of inTEST and the Company in favor
of this Agreement, the Merger and the transactions contemplated hereby.
(c) Blue Sky Filings. Prior to the time of the Merger inTEST shall use
reasonable efforts to obtain all regulatory or other approvals needed to ensure
that inTEST Stock to be issued in the Merger: (i) will be registered or
qualified under the securities law of every jurisdiction of the United States
in which any registered holder of Company Common Stock who is receiving shares
of registered inTEST Stock has an address of record or be exempt from such
registration and (ii) will be approved for quotation at the time of the Merger
on the Nasdaq National Market provided, however, that inTEST shall not,
pursuant to the foregoing, be required (A) to qualify to do business as a
foreign corporation in any jurisdiction in which it is not now qualified or (B)
to file a general consent to service of process in any jurisdiction with
respect to matters unrelated to the issuance of inTEST Stock pursuant hereto.
A-15
(d) No Misrepresentation. Each of inTEST and the Company (in respect of
the information respectively supplied by it) agrees that at the time (1) the
Registration Statement is filed, (2) the Registration Statement becomes
effective, (3) the Joint Proxy Statement is mailed to the shareholders of
inTEST and the Company, (4) of the meetings of the shareholders of inTEST and
the Company and (5) of the Closing: (i) none of the information to be supplied
by each of inTEST and the Company or its affiliates for inclusion in the
Registration Statement will contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading; and (ii) as to matters respecting it, the Joint
Proxy Statement and the Registration Statement will comply as to form in all
material respects with the provisions of the Securities Act and the Exchange
Act, as applicable, and the rules and regulations promulgated by the SEC
thereunder, except that no covenant, representation or warranty is made by the
Company with respect to statements made or incorporated by reference therein
based on information supplied by inTEST for inclusion or incorporation by
reference therein and no covenant, representation or warranty is made by inTEST
with respect to statements made or incorporated by reference therein based on
information supplied by the Company for inclusion or incorporation by reference
therein.
(e) Piggyback Rights. All shareholders of the Company who, immediately
prior to the Merger, own five percent or more of the then outstanding Company
Stock shall be included, at their option, in any future registered offering of
inTEST Stock by inTEST if other shareholders are included in such offering and
on the terms and conditions on which such other shareholders participate.
10. Shareholder Meetings.
(a) Company Shareholder Meeting. The Company shall promptly after the date
hereof take all action necessary in accordance with applicable law and its
Articles of Organization and Bylaws to hold and convene a meeting of the
Company's Shareholders (the "Company Shareholders Meeting"). Except as required
by the SEC or applicable court order and except as may be required in order to
amend or supplement the Registration Statement or Joint Proxy Statement, the
Company shall not postpone or adjourn (other than for the absence of a quorum)
the Company Shareholders Meeting without the consent of inTEST. The Company
shall take all reasonable actions necessary or advisable to secure the vote or
consent of its shareholders required by applicable law to effect the Merger and
the transactions contemplated hereby.
(b) inTEST Shareholder Meeting. inTEST shall promptly after the date
hereof take all action necessary in accordance with applicable law and its
Certificate of Incorporation and Bylaws to hold and convene a meeting of
inTEST's shareholders (the "inTEST Shareholders Meeting"). Except as required
by the SEC or applicable court order, inTEST shall not postpone or adjourn
(other than for the absence of a quorum) the inTEST Shareholders Meeting
without the consent of the Company. inTEST shall take all reasonable actions
necessary or advisable to secure the vote or consent of its shareholders
required by applicable law to effect the issuance of shares of inTEST Stock in
the Merger.
11. Covenants of the Parties.
(a) Confidentiality. Until the time of the Merger, all information
regarding the Company received by inTEST or Newsub shall be subject to the
provisions of the Confidentiality Agreement between the Company and inTEST
dated April 8, 1999.
(b) Take No Action. No party shall take any action that would, or is
reasonably likely to, result in any of its representations and warranties set
forth in this Agreement being untrue or in any of the conditions precedent set
forth in Sections 12, 13 and 14 not being satisfied.
(c) Salary and Benefits. Following consummation of the Merger, the salary
and benefits of all employees of Newsub formerly employed by the Company (other
than ▇▇▇▇▇▇▇ ▇▇▇▇▇) shall remain the same until each employee's next regularly
scheduled review date.
(d) ESOP. After the Merger, the Temptronic Equity Participation Plan will
remain in place.
(e) Reasonable Efforts. Subject to the terms and conditions provided in
this Agreement, each of the parties hereto shall use reasonable efforts to take
promptly, or cause to be taken, all actions, and to do promptly, or cause to be
done all things necessary, proper or advisable under applicable laws and
regulations
A-16
to consummate and make effective the transactions contemplated hereby, to
obtain all necessary waivers, consents and approvals and to effect all
necessary registrations and filings and to remove any impediments or delays,
legal or otherwise, in order to consummate and make effective the transactions
contemplated by this Agreement for the purpose of securing to the parties
hereto the benefits contemplated by this Agreement.
(f) Access to Information. Upon reasonable prior notice, the Company shall
afford inTEST and its accountants, counsel and other representatives,
reasonable access during normal business hours during the period prior to the
time of the Merger to all of its properties, books, contracts, commitments and
records, all other information concerning its business, properties and
personnel (subject to restrictions imposed by applicable law) as inTEST may
reasonably request and all its key employees. Upon reasonable prior notice, the
Company agrees to provide inTEST and its accountants, counsel and other
representatives copies of internal financial statements (including tax returns
and supporting documentation) promptly upon request. No information or
knowledge obtained in any investigation pursuant to this Section 11 shall
affect or be deemed to modify any representation or warranty contained herein
or the conditions to the obligations of the parties to consummate the Merger.
(g) Re-election. For a period of two years following the Closing Date,
inTEST shall nominate the Temptronic Directors for re-election at each annual
meeting of its stockholders or special meeting in lieu thereof and shall
recommend their re-election to its stockholders.
(h) Thirty Day Financials. As soon as reasonably practicable after the
Merger, inTEST shall publish by a public filing or announcement the results of
operations covering at least thirty days of combined operations of Newsub and
inTEST in accordance with and to the extent permitted by applicable accounting
principles and applicable laws.
12. Conditions to Obligations of Each Party.
The respective obligations of each party to this Agreement are subject to
the fulfillment, at or prior to the Closing of each of the following
conditions:
(a) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect, nor shall any proceeding brought
by an administrative agency or commission or other governmental authority or
instrumentality seeking any of the foregoing be pending.
(b) Listing. The shares of inTEST Stock to be issued in the Merger to the
shareholders of the Company shall have been approved for quotation, subject to
official notice of issuance, on NASDAQ.
(c) Effectiveness of Registration Statement. The Registration Statement
shall have become effective in accordance with the provisions of the Securities
Act, and no stop order shall have been issued by the SEC with respect thereto,
and no similar proceeding in respect of the Joint Proxy Statement shall have
been initiated or threatened in writing by the SEC.
(d) Shareholder Approval. The shareholders of the Company shall have
approved the Merger at the Company Shareholders Meeting and the shareholders of
inTEST shall have approved the issuance of shares of inTEST Stock in the Merger
at the inTEST Shareholders Meeting.
13. Conditions to Obligations of the Company
All obligations of the Company under this Agreement are subject to the
fulfillment, at or prior to the Closing of each of the following conditions:
(a) Representations and Warranties. All representations and warranties of
inTEST and Newsub contained in this Agreement or in any certificate or document
delivered pursuant to this Agreement shall be true and correct at and as of the
time of Closing as though then made at and as of such time (except that such
A-17
representations and warranties shall reflect the consummation of any
transactions permitted by this Agreement); and inTEST and Newsub shall have
performed and complied with all of their obligations under this Agreement which
are to be performed and complied with by them prior to or at the time of the
Closing.
(b) No Material Adverse Effect. No Material Adverse Effect with respect to
inTEST shall have occurred since the date of this Agreement and no events or
circumstances shall have occurred since the date hereof that would have a
Material Adverse Effect on inTEST.
(c) Escrow Stock. inTEST shall have delivered to the Escrow Agent shares
of the inTEST Stock registered in the name of the Escrow Agent for deposit in
the Escrow Fund as set forth in Section 4(b) hereof.
(d) Escrow Agreement. inTEST and Newsub shall have delivered to the Escrow
Agent the Escrow Agreement duly executed by inTEST and Newsub.
(e) inTEST Resolutions. inTEST shall have delivered to the Company
certified resolutions of the Board of Directors and the Shareholders of inTEST
authorizing consummation of the transactions contemplated by this Agreement.
(f) Resolutions of Newsub. Newsub shall have delivered to the Company
certified resolutions of the Board of Directors and Sole Shareholder of Newsub
authorizing consummation of the transactions contemplated by this Agreement.
(g) Election of Directors. inTEST shall have delivered to the Company
evidence that ▇▇▇▇▇ Greed and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Temptronic Directors")
have been elected as members of the Board of Directors of inTEST.
(h) Employment Agreement. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and inTEST or Newsub shall have
entered into an employment agreement in the form of Exhibit "D".
(i) Legal Opinion. Saul, Ewing, ▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for inTEST and
Newsub, shall have delivered to the Company its Opinion dated the Closing Date,
in the form of Exhibit "E".
14. Conditions to Obligations of inTEST and Newsub
All obligations of inTEST and Newsub under this Agreement are subject to
the fulfillment, at or prior to the Closing, of each of the following
conditions:
(a) Representations and Warranties. All representations and warranties of
the Company contained in this Agreement or in any certificate or document
delivered pursuant to this Agreement shall be true and correct at and as of the
time of the Closing as though then made at and as of such time (except that
such representations and warranties may reflect the consummation of any
transactions permitted by this Agreement); and the Company shall have performed
and complied with all of its obligations under this Agreement which are to be
performed and complied with by it prior to or at the time of the Closing.
(b) No Material Adverse Effect. No Material Adverse Effect with respect to
the Company shall have occurred since the date of this Agreement and no events
or circumstances shall have occurred since the date hereof that would have a
Material Adverse Effect on the Company.
(c) Escrow Agreement. The Shareholder Representative shall have executed
and delivered to the Escrow Agent an executed copy of the Escrow Agreement.
(d) Releases. There shall have been delivered to inTEST releases in the
form of Exhibit "F" pursuant to which each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ releases any and all claims that he may have against the Company (other
than for remuneration and benefits in the ordinary course of business for the
then current pay period, claims arising out of his Employment Agreement with
the Company, this Agreement and the Agreements executed in connection herewith
and claims for indemnification arising out of his service prior to Closing as
an officer or director of the Company).
A-18
(e) Resolutions of the Company. The Company shall have delivered to inTEST
certified resolutions of the Board of Directors and the Shareholders of the
Company authorizing consummation of the transactions contemplated by this
Agreement.
(f) Good Standing Certificate. The Company shall deliver to inTEST a
certificate dated as of a recent date from the Secretary of State of The
Commonwealth of Massachusetts to the effect that the Company is duly
incorporated and in good standing and a certificate of the Department of
Revenue of The Commonwealth of Massachusetts certifying as to the tax status of
the Company.
(g) Charter. The Company shall have delivered to inTEST a copy of the
Company's Articles of Organization, including all amendments thereto, certified
as of a recent date by the Secretary of State of The Commonwealth of
Massachusetts.
(h) Consents. The Company shall have delivered to inTEST all necessary
consents, waivers, authorizations, orders or approvals required by agreements
to which the Company may be a party or required by law, regulations or
otherwise in order to execute and deliver this Agreement, the Agreement of
Merger, the Escrow Agreement, and to perform its obligations hereunder and
thereunder.
(i) Resignations. The Company shall have caused to be delivered to inTEST
the resignations of all officers and directors of the Company, to be effective
as of the Closing Date.
(j) Corporate Books. The Company shall have delivered to inTEST and Newsub
the corporate minute books and stock record books of the Company.
(k) Company Stockholder Agreeement. All of the Stockholder Agreements of
the Company in effect at the time of the Merger shall have been terminated and
all life insurance policies related to such Stockholder Agreeements shall be
terminated by Newsub, and Newsub shall be entitled to keep all proceeds from
the surrender of such life insurance policies.
(l) ESOP. The Employee Stock Ownership Plan of the Company shall have been
assumed by Newsub.
(m) Pooling of Interests. inTEST shall have received an opinion of KPMG
LLP and an opinion of Ernst & Young LLP that the Merger and the other
transactions contemplated hereunder will be treated, for financial reporting
purposes, as a "pooling of interests".
(n) Dissenting Shareholders. The number of shares of the Company Stock
owned by those shareholders of the Company (if any) who shall have exercised
(or given notice of their intent to exercise) the rights of dissenting
shareholders under the law of The Commonwealth of Massachusetts or any other
applicable law shall be less than 2% of the total number of outstanding shares
of the Company Stock.
(o) Affiliate Letters. inTEST shall have received, from each director,
officer and other affiliate (as defined in Rule 144 under the Securities Act)
of the Company a duly signed letter, in form and substance satisfactory to
inTEST, stating that such affiliate (i) has not sold any shares of the capital
stock or other securities of the Company at any time during the 30 day period
ending on the Closing Date and (ii) will not sell, assign, give, pledge or
otherwise transfer, dispose of or reduce such affiliate's risk relating to any
of such affiliate's shares of the capital stock or other securities of the
Company until inTEST shall have published financial results covering at least
30 days of post-Merger combined operations of the Company and inTEST and,
thereafter, and, in any event, only in compliance with applicable federal and
state securities laws.
(p) Legal Opinion. An Opinion of ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for the
Company, shall have been delivered dated the Closing Date and addressed to
inTEST, in a form reasonably acceptable to inTEST and its counsel.
15. Indemnity by inTEST and Newsub
inTEST and Newsub, jointly and severally, hereby indemnify the
shareholders of the Company against and hold the shareholders of the Company
harmless of and from any and all demands, claims, losses, expenses, damages,
deficiencies and liabilities (including reasonable attorneys' fees and other
costs and expenses incident to any suit, action or proceeding) ("Losses"), to
the extent set forth in Section 17(d) of this
A-19
Agreement, resulting at any time after the Closing Date by reason of any
misrepresentation, breach of warranty or nonfulfillment of any covenant or
agreement on the part of inTEST or Newsub contained in this Agreement, the
Agreement of Merger, the Escrow Agreement or any Schedule hereto or in any
written statement or certificate furnished or to be furnished by inTEST or
Newsub to the Company pursuant to this Agreement. Any liability of inTEST or
Newsub under this Section 15 shall be satisfied by the delivery of such number
of shares of inTEST Stock having a Market Value equal to the amount due to the
shareholders of the Company hereunder.
16. Indemnities by the Shareholders of the Company
The shareholders of the Company hereby indemnify inTEST and Newsub against
and hold inTEST and Newsub harmless of and from any and all Losses, to the
extent set forth in Section 17(d) of this Agreement, resulting at any time
after the Closing Date by reason of any misrepresentation, breach of warranty
or nonfulfillment of any covenant or agreement on the part of the Company
contained in this Agreement, the Agreement of Merger, the Escrow Agreement or
any Schedule hereto or in any written statement or certificate furnished or to
be furnished by the Company pursuant to this Agreement.
17. Indemnification Procedure
(a) Claims for Indemnification. Any party seeking indemnification
hereunder (the "Indemnified Party") shall give to the party obligated to
provide indemnification to such Indemnified Party (the "Indemnitor") a written
notice (a "Claim Notice") describing in reasonable detail the facts giving rise
to any good faith claim for indemnification hereunder and shall include in such
Claim Notice the reasonably estimated amount of such claim, if known (which
amount shall not include interest), and a reference to the provision of this
Agreement or of any other agreement, document or instrument executed hereunder
or in connection herewith upon which such claim is based. Such Claim Notice
shall be given within thirty (30) days after the Indemnified Party becomes
aware of the facts giving rise to the claim for indemnification.
(i) If the Indemnitor shall in good faith dispute the validity of all or
any amount of a claim for indemnification as set forth in the Claim
Notice, the Indemnitor shall, within thirty (30) days of its receipt of
the Claim Notice, execute and deliver to the Indemnified Party a notice
setting forth with reasonable particularity the grounds and the basis upon
which the claim or amount of the alleged Losses is disputed (the "Dispute
Statement").
(ii) If the Indemnitor does not dispute the Claim Notice or only
disputes a portion of the amount set forth therein, then the amount of the
claim described in the Claim Notice or the portion thereof not disputed
shall be deemed to be admitted (the "Admitted Liability") and shall, upon
the incurring of such Losses, immediately be due and payable to the
Indemnified Party by the Indemnitor.
(iii) If the Indemnitor shall within thirty (30) days of its receipt of
the Claim Notice deliver to the Indemnified Party a Dispute Statement,
then the portion of the claim described in the Claim Notice that is
disputed by the Indemnitor shall not be due and payable, except in
accordance with a decision of an arbitrator (as provided in Section 21(b)
hereof), or a written agreement by the parties stipulating the amount of
the Admitted Liability.
(iv) The Indemnitor and the Indemnified Party shall endeavor to resolve
any portion of a claim described in a Claim Notice that is disputed by the
Indemnitor within sixty (60) days after the date of the applicable Dispute
Statement. Any such disputed claims not resolved within such sixty (60)
day period shall be resolved by arbitration in accordance with Section 21
hereof.
(b) Third Party Claims.
(i) If the Indemnified Party shall receive notice of any claim by a
third party which is or may be subject to indemnification (a "Third Party
Claim"), the Indemnified Party shall give the Indemnitor prompt written
notice of such Third Party Claim and shall permit the Indemnitor, at the
Indemnitor's option, to assume the defense of such Third Party Claim or to
participate in the defense using counsel of its own choice and at its own
expense; provided, however that the Indemnitor shall not have the right to
A-20
assume the defense of a Third Party Claim: (1) to the extent such Third
Party Claim seeks an injunction, restraining order, declaratory relief or
other non-monetary relief and such Third Party Claim, if decided adversely,
would have a Material Adverse Effect on the Indemnified Party; or (2) if
the named parties to any such Third Party Claim (including any impleaded
parties) include both the Indemnified Party and the Indemnitor and (A) the
Indemnified Party shall have been advised by counsel that there are one or
more legal or equitable defenses available to it which are different from
or additional to those available to the Indemnitor, and (B) in the
reasonable opinion of counsel for the Indemnified Party, counsel for the
Indemnitor would not be able to adequately represent the interests of the
Indemnified Party because such interests would materially conflict with
those of the Indemnitor, and (C) such Third Party Claim, if decided
adversely, would have a Material Adverse Effect on the Indemnified Party.
(ii) Regardless of which party is controlling the defense of a Third
Party Claim: (1) the controlling party shall keep the other party fully
informed of such Third Party Claim at all stages thereof; (2) the party
not controlling the defense of such Third Party Claim shall make
available, without charge, to the other party all books and records of
such party relating to such Third Party Claim; (3) the party not
controlling the defense of the Third Party Claim shall cooperate with the
other in connection therewith and shall furnish such records, information
and testimony and attend such conferences, discovery proceedings,
hearings, trials and appeals as may be reasonably requested by the
Indemnitor in connection therewith, and (4) subject to Section 17(b)(iii)
below, the controlling party shall not make any settlement of any Third
Party Claim without the written consent of the party not controlling the
defense, such consent not to be unreasonably withheld.
(iii) If the Indemnitor exercises its right to assume the defense of a
Third Party Claim, the Indemnified Party may participate, through counsel
of its own choice and at its own expense, in the defense of any Third
Party Claim, action or suit as to which the Indemnitor has elected to
assume and control the defense thereof, and the Indemnitor shall not make
any settlement of any such action, suit or proceeding without the written
consent of the Indemnified Party, unless the settlement involves only the
payment of money by the Indemnitor without prejudice to the Indemnified
Party. So long as the Indemnitor is defending in good faith any Third
Party Claim as to which indemnification has been sought hereunder, the
Indemnified Party shall not settle or compromise such Third Party Claim.
(c) Exclusive Remedy. Except for (i) claims of fraud or willful
misrepresentation, or (ii) as otherwise specifically set forth in this
Agreement, the indemnification provisions contained in Sections 15, 16 and 17
shall be deemed to be, to the extent permitted by law, the exclusive remedy or
exclusive means to obtain relief, as the case may be, of any party hereto in
the event of any breach of any representation, warranty, covenant or agreement
contained herein (or in any certificates or other documents delivered pursuant
hereto) by any other party hereto, Claims pursuant to Section 16 hereof or with
respect to any claim of any third party arising out of or in connection with
this Agreement or the transactions contemplated hereby, and the provisions of
Sections 15, 16 and 17 shall be in lieu of any other rights or remedies that
may be available to any party at law, in equity or otherwise. Any
indemnification amount payable in accordance with the indemnification
provisions contained in Sections 15, 16 an 17 shall be deducted proportionately
from the shares of each shareholder of the Company held in the Escrow Fund,
provided, however, that recovery for any claim based upon a shareholder's
failure to have adequate title to his or her shares may only be made against
shares in the Escrow Fund held for the account of such shareholder.
(d) Limitation of Indemnification. inTEST and Newsub shall not be entitled
to indemnification under Section 16 of this Agreement until the aggregate
amount for which indemnification is sought exceeds $50,000, whether represented
by one or more claims, and then only to the extent such aggregate amount
exceeds $50,000, and in no event shall the shareholders of the Company be
liable under Sections 16 and 17 of this Agreement for Losses in excess of the
value of the inTEST Stock held in the Escrow Fund, provided that such
limitation shall not apply to claims based on any party's intentional, willful
or reckless (i) misrepresentations or (ii) breaches of warranties or agreements
made as a part of or contained in this Agreement. In addition, for purposes of
claims brought under this Agreement, Losses shall be calculated net of any
insurance proceeds (including, without limitation, proceeds from directors and
officers liability insurance) realized by and paid to or for the benefit of the
Indemnified Party in respect of such claim. If
A-21
inTEST or Newsub is entitled to indemnification under this Agreement, the
amount shall be paid by the Escrow Agent delivering to inTEST or Newsub (as
directed by inTEST) shares of inTEST Stock having a Market Value equal to the
amount owed by the Company to inTEST or Newsub.
18. Duty to Minimize Damages
Each party who shall seek indemnification under Sections 15, 16 and 17
hereof shall be under a duty to take all reasonable actions which would
minimize the Losses for which the Indemnitor may be liable.
19. Survival of Representations
All representations and warranties made herein, in the schedules hereto
and in any document delivered pursuant hereto by the Company, inTEST or Newsub
shall survive for one year after the Closing Date and then shall terminate.
Except as otherwise expressly provided in this Agreement, all covenants,
agreements, undertakings and indemnities set forth in this Agreement shall
survive indefinitely.
20. Notices
Any notice, request, demand or other communication given by any party
under this Agreement (each a "notice") shall be in writing, may be given by a
party or its legal counsel, may be given by the Shareholder Representative on
behalf of the shareholders of the Company, by inTEST on behalf of Newsub or by
Newsub on behalf of inTEST and shall be deemed to have been duly given (i) when
personally delivered, or (ii) upon delivery by United States Express Mail or
similar overnight courier service which provides evidence of delivery, or (iii)
when five days have elapsed after its transmittal by registered or certified
mail, postage prepaid, return receipt requested, addressed to the party to whom
directed at that party's address as it appears below or another address of
which that party has given notice, or (iv) when transmitted by facsimile
transmission if a copy thereof is also delivered in person or by overnight
courier. Notices of address change shall be effective only upon receipt
notwithstanding the provisions of the foregoing sentence.
Notice to inTEST or Newsub shall be sufficient if given to:
inTEST Corporation
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇ ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
Saul, Ewing, ▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Notice to the Company shall be sufficient if given to:
Temptronic Corporation
Attention ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax ▇▇▇-▇▇▇-▇▇▇▇
A-22
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esquire
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax ▇▇▇-▇▇▇-▇▇▇▇
Notice to the Shareholder Representative shall be sufficient if given to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esquire
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax ▇▇▇-▇▇▇-▇▇▇▇
21. General
(a) Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware.
(b) Arbitration.
(i) Any and all disputes or differences pertaining to or arising out of
this Agreement or the breach, termination or invalidity thereof, shall be
finally and exclusively settled by binding arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration Association.
The arbitration shall be held in Philadelphia, Pennsylvania, before one
arbitrator appointed in accordance with said rules. The arbitration
proceedings shall be conducted in English. Judgment upon an award rendered
may be entered in any court having jurisdiction or application may be made
to such court for a judicial acceptance of the award and an order of
enforcement, as the case may be. The prevailing party in any such
proceeding shall be entitled to its actual reasonable attorneys' fees and
all other costs in connection with the arbitration and enforcement of the
arbitor's award to the extent set forth in the arbitor's award.
(ii) Either party may, without inconsistency with this Agreement, seek
from a court any interim or provisional relief that may be necessary to
protect the rights or property of that party, pending the establishment of
the arbitral tribunal or pending the arbitral tribunal's determination of
the merits of the controversy.
(c) Further Assurances. The parties hereto agree: (i) to execute and
deliver any and all papers and documents which may be reasonably necessary to
carry out the terms of this Agreement, and (ii) in the case of licenses,
certificates, approvals, authorizations, agreements, contracts, leases,
easements and other commitments of the Company which cannot be transferred or
assigned effectively without the consent of third parties which consent has not
been obtained prior to the Closing Date, to cooperate with the other party at
its reasonable request in endeavoring to obtain such consent promptly.
(d) Schedules. All of the Schedules attached to this Agreement are hereby
incorporated herein and made a part hereof.
(e) Entire Agreement. This Agreement and the Exhibits hereto, together
with the Confidentiality Agreement between the Company and inTEST dated April
8, 1999, contain the entire agreement among the parties hereto and there are no
agreements, representations or warranties which are not set forth herein. All
prior negotiations, agreements and understandings are superseded hereby. This
Agreement may not be amended or revised except by a writing signed by all
parties hereto.
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(f) Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the successors and assign of the respective parties hereto;
provided, however, that this Agreement and any and all rights hereunder may not
be assigned by any party hereto except by or with the written consent of the
other parties.
(g) Construction of Agreement. In the case any provision of this Agreement
shall for any reason be held to be invalid, illegal or unenforceable, such
holding shall not affect the validity, legality or enforceability of the
remaining provisions of this Agreement, which shall be construed as if such
invalid, illegal or unenforceable provision had never been included herein.
(h) Headings. The section and paragraph headings of this Agreement are for
convenience only, form no part of this Agreement and shall not affect its
interpretation.
(i) Effect of Investigation. Any inspection, preparation or compilation of
information or Schedules or audit of the inventory, property, financial
condition or other matters relating to the Company conducted by or on behalf of
inTEST pursuant to this Agreement shall in no way limit, affect or impair the
ability of inTEST or Newsub to rely upon the representations, warranties,
covenants and agreements of the Company set forth in this Agreement or in any
Schedule or Exhibit to this Agreement or in the Company Financial Statements or
in any certificate furnished by the Company required pursuant hereto. All
statements contained in any certificate delivered at the Closing or by or on
behalf of the Company, inTEST or Newsub pursuant to this Agreement or in any
Schedule to this Agreement shall be deemed representations and warranties
hereunder by the Company, inTEST or Newsub, as the case may be. Any disclosure
made on one Schedule shall be deemed made on all Schedules provided an
appropriate cross reference is made.
(j) Waivers. Any term or provision of this Agreement may be waived, or the
time for its performance may be extended, by the party or parties entitled to
the benefit thereof. Any such waiver shall be validly and sufficiently
authorized for the purposes of this Agreement if, as to any party, it is
authorized in writing by an authorized representative of such party. The
failure of any party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor in any
way to affect the validity of this Agreement or any part hereof or the right of
any party thereafter to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to constitute a waiver of any other or
subsequent breach.
(k) Costs and Expenses. If the Merger is not consummated for any reason,
other than a breach by one of the parties hereto, inTEST and the Company will
each be responsible for and bear its own costs and expenses. If the Merger is
consummated, inTEST and Newsub will be responsible for and bear all costs and
expenses (including legal and accounting expenses and the fees of OEM Capital
Corp.) incurred by all parties hereto in connection with pursuing and
consummating the Merger.
(l) Execution in Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be considered an original instrument,
but all of which shall together be considered one and the same agreement, and
shall become binding when one or more counterparts have been signed by each of
the parties hereto and delivered to each of inTEST and the Company.
(m) Knowledge.
(i) "Best Knowledge" with respect to the Company means facts or
information that have come to the attention of any executive officer, and
facts or information that would have come to the attention of any
executive officer if he had made all reasonable inquiries into such
further information. An individual will be deemed to have "Best Knowledge"
of a particular fact or matter if such individual is actually aware of
such fact or matter or could be expected to discover or otherwise become
aware of such fact or matter in the course of conducting a reasonable
investigation concerning the existence of such fact or matter.
(ii) "Actual Knowledge" as used herein means the conscious awareness of
facts or information by an executive officer.
(iii) For the purposes of this Section 21(m) an "executive officer"
shall mean any of the following persons: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
Temptronic Corporation
(a Massachusetts corporation)
By: -------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
inTEST Corporation
By:-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Treasurer and Chief Financial Officer
Temptronic Corporation
(a Delaware corporation)
By:-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Treasurer and Chief Financial Officer
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