<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 1998
---------------
inTEST Corporation
- ------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-22529 22-2370659
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
2 Pin Oak Lane, Cherry Hill, New Jersey 08034
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (609) 424-6886
--------------
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On August 3, 1998, inTEST Corporation (the "Company") acquired all of
the outstanding capital stock of TestDesign Corporation ("TestDesign"), a
privately held California corporation (the "Acquisition"). The purchase price
was $4,400,000 cash and 625,000 shares of the Company's Common Stock (subject
to certain adjustments). The consideration paid for the Acquisition was
determined in negotiations between the Company's management and Douglas W.
Smith, the former sole shareholder of TestDesign (the "Seller"), based upon
the current value of TestDesign and the Company's Common Stock. The Company
funded the cash portion of the purchase price from its cash on hand.
Prior to the Acquisition, there was no material relationship between
the Seller and the Company. In connection with the Acquisition, the Seller was
elected to the Board of Directors and appointed as Executive Vice President
and Chief Operating Officer of the Company.
TestDesign is engaged in the design and manufacture of wafer test
interfaces used by the semiconductor industry.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired:
The financial statements required by this Item will be filed by an
amendment to this report filed not later than October 17, 1998.
(b) Pro Forma Financial Information:
The pro forma financial statements required by this Item will be
filed by an amendment to this report filed not later than October 17, 1998.
(c) Exhibits:
2. Agreement and Plan of Reorganization between Douglas W.
Smith, TD Acquisition Corporation and inTEST Corporation,
dated August 3, 1998 (the Schedules and Exhibits, as set
forth on the lists of Schedules and Exhibits in the
Agreement and Plan of Reorganization, are omitted from this
report but will be furnished supplementally to the
Commission upon request).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
inTEST CORPORATION
By: /s/ Hugh T. Regan, Jr.
--------------------------------
Hugh T. Regan, Jr.
Treasurer and
Chief Financial Officer
Date: August 4, 1998
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EXHIBIT INDEX
2. Agreement and Plan of Reorganization between Douglas W.
Smith, TD Acquisition Corporation and inTEST Corporation,
dated August 3, 1998 (the Schedules and Exhibits, as set
forth on the lists of Schedules and Exhibits in the
Agreement and Plan of Reorganization, are omitted from this
report but will be furnished supplementally to the
Commission upon request).
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
--------------------
Dated August 3, 1998
--------------------
Among
TestDesign Corporation,
Douglas W. Smith,
inTEST Corporation
and
TD Acquisition Corp.
--------------------
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Schedules............................................................................................... ii
Exhibits iii
Definitions............................................................................................. iv
1. Merger......................................................................................... 1
2. The Closing.................................................................................... 2
3. Conversion of Capital Stock.................................................................... 4
4. Adjustment to Merger Consideration ............................................................ 4
5. Adjustment Procedure........................................................................... 4
6. Subsequent Payments............................................................................ 5
7. Warranties and Representations of inTEST and Newsub............................................ 6
8. Warranties and Representations of Smith........................................................ 9
9. Conduct of Business............................................................................ 20
10. Agreement Not to Compete or Disclose........................................................... 20
11. News Releases.................................................................................. 20
12. Securities Laws................................................................................ 21
13. Indemnity by inTEST and Newsub................................................................. 22
14. Indemnity by Smith............................................................................. 22
15. Indemnification Procedure...................................................................... 22
16. Duty to Minimize Damages....................................................................... 25
17. Assignment of Accounts Receivable.............................................................. 25
18. Survival of Representations.................................................................... 26
19. Notices........................................................................................ 26
20. General........................................................................................ 27
</TABLE>
<PAGE>
SCHEDULES
---------
Schedule 8(a) Due Qualification
Schedule 8(f) Subsidiaries
Schedule 8(j) Financial Statements
Schedule 8(i) Tangible Personal Property and Title
Schedule 8(n) Consents
Schedule 8(o) Taxes
Schedule 8(p) Material Permits
Schedule 8(q) Litigation
Schedule 8(r) Compliance with Laws
Schedule 8(s) Contracts and Commitments
Schedule 8(t) Insurance
Schedule 8(v) Employees
Schedule 8(w) Labor Disputes
Schedule 8(y) Patents and Trademarks
Schedule 8(z) Employee Benefit Plans
Schedule 8(aa) Affiliate Transactions
Schedule 8(bb)(ii) Regulated Substances
Schedule 8(bb)(v) Environmental Studies
Schedule 8(cc) Product Warranties
Schedule 8(dd) Future Events
Schedule 9 Conduct of Business
Schedule 10(a) Accessories
Schedule 20(m) Expenses
ii
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EXHIBITS
--------
Exhibit A Agreement of Merger
Exhibit B Escrow Agreement
Exhibit C Legal Opinion of Saul, Ewing, Remick & Saul
Exhibit D Release of Smith
Exhibit E Legal Opinion of Baker & McKenzie
iii
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DEFINITIONS
-----------
Term or Phrase Reference
- -------------- ---------
Actual Knowledge Section 20(n)(ii)
Adjustment Amount Section 4(c)
Admitted Liability Section 15(a)(iii)
Affiliate Section 8(aa)
Agreement First paragraph, page 1
Agreement of Merger Section 1(a)
Best Knowledge Section 20(n)(i)
Claim or Claims Section 6(a)
Claim Notice Section 15(a)
Closing Section 2(a)
Closing Balance Sheet Section 5(a)
Closing Date Section 2(a)
Commitments Section 8(s)
Company First paragraph, page 1
Company Balance Sheet Section 8(j)
Company Common Stock Section 3(a)
Company Financial Statements Section 8(j)
Dispute Statement Section 15(a)(i)
Environmental Law Section 8(bb)(vi)
Escrow Agent Section 2(b)(ii)
Escrow Agreement Section 2(b)(ii)
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Escrow Fund Section 2(b)(ii)
Event Section 6(a)
Exchange Act Section 8(g)(ii)
Final Release Date Section 6(c)
GAAP Section 4(d)
Indemnified Party Section 15(a)
Indemnitor Section 15(a)
Independent Accountants Section 5(b)
inTEST First paragraph, page 1
inTEST Balance Sheet Section 8(g)(i)
inTEST Stock Section 3(a)
Losses Section 13
Market Value Section 15(d)
Material Adverse Effect Section 7(a)
Merger Section 1(b)
Merger Consolidation Section 3(a)
Net Assets Section 4(d)
Newsub First paragraph, page 1
Newsub Common Stock Section 3(b)
Notice Section 19
Permits Section 8(p)
Property Rights Section 8(y)
Regulated Substance Section 8(bb)(vii)
Slayton Section 2(b)(i)
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SEC Section 8(g)(ii)
SEC Reports Section 8(g)(ii)
Securities Act Section 8(g)(ii)
Smith First paragraph, page 1
Surviving Corporation Section 1(b)
Third Party Claim Section 15(b)(i)
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
-----------------------------------------------
Agreement and Plan of Merger and Reorganization (the
"Agreement") made as of August 3, 1998 by and among TestDesign Corporation, a
California corporation (the "Company"), Douglas W. Smith residing at 21
Sandstone, Portola Valley, CA 94028 ("Smith"), inTEST Corporation, a Delaware
corporation ("inTEST") and TD Acquisition Corp., a Delaware corporation
("Newsub").
RECITALS
--------
Smith owns all of the issued and outstanding capital stock of
the Company and 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 July 16, 1998 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.
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:
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 with the Secretary of the State of Delaware and the
Secretary of State of California.
(b) The Merger. At the time of the Closing, the Company will
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.
<PAGE>
(c) Name Change. At the time of the Merger, the Certificate of
Incorporation of the Surviving Corporation shall be amended to change the name
of the Surviving Corporation to "inTEST Sunnyvale Corporation".
2. The Closing
- --------------
(a) Closing. The "Closing" hereunder shall be made at 10:00
o'clock a.m. on or about August 3, 1998 (the "Closing Date") at the offices of
Saul, Ewing, Remick & Saul, Philadelphia, Pennsylvania, or at such other time
and place as the parties shall mutually agree.
(b) inTEST's Deliveries at Closing. At the Closing, inTEST
shall deliver or cause to be delivered to Smith all of the following:
(i) bank checks or wire transfers of immediately
available funds in the amount of $3,230,000 payable to the order of Smith and in
the amount of $170,000 payable to the order of Gregory W. Slayton ("Slayton");
(ii) a bank check or wire transfer of immediately
available funds in the amount of $1,000,000 (the "Escrow Fund") payable to the
order of PNC Bank, National Association (the "Escrow Agent"), which sum shall be
held and disbursed in accordance with the terms of this Agreement and the Escrow
Agreement attached as Exhibit "B" hereto (the "Escrow Agreement");
(iii) a share certificate representing 95% of the
inTEST Stock (as defined below) issued in the name of Smith and a share
certificate representing 5% of the inTEST Stock issued in the name of Slayton,
each subject to restrictions set forth in this Agreement;
(iv) the Escrow Agreement, duly executed by inTEST;
(v) an opinion of Saul, Ewing, Remick & Saul, counsel
for inTEST, dated the Closing Date and addressed to Smith, in the form of
Exhibit "C" attached hereto;
(vi) certified resolutions of the Board of Directors
of inTEST authorizing consummation of the transactions contemplated by this
Agreement;
(vii) certified resolutions of the Board of Directors
and the sole shareholder of Newsub authorizing consummation of the transactions
contemplated by this Agreement; and
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(viii) evidence that each of Smith and Slayton has
been elected as a member of the Board of Directors of inTEST, and evidence that
Smith has been appointed as Executive Vice President and Chief Operating Officer
of inTEST effective as of the Closing Date.
(c) Smith's Deliveries at Closing. At the Closing, Smith shall
deliver or cause to be delivered to inTEST and Newsub all of the following:
(i) stock certificates representing the Company
Common Stock (defined below) duly endorsed in blank;
(ii) the Escrow Agreement, duly executed by Smith;
(iii) the Release in the form of Exhibit "D" attached
hereto, pursuant to which Smith 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 this
Agreement and the agreements executed in connection herewith and claims for
indemnification arising out of his service prior to Closing as an officer and/or
director of the Company);
(iv) an opinion of Baker & McKenzie, counsel for the
Company, dated the Closing Date and addressed to inTEST, in the form of Exhibit
"E" attached hereto;
(v) certified resolutions of the Board of Directors
and the Sole Shareholder of the Company authorizing consummation of the
transactions contemplated by this Agreement;
(vi) a Certificate dated as of a recent date from the
Secretary of State of the State of California to the effect that the Company is
duly incorporated and in good standing and a Certificate of the Franchise Tax
Board of the State of California certifying as to the tax status of the Company;
(vii ) a copy of the Company's Articles of
Incorporation, including all amendments thereto, certified as of a recent date
by the Secretary of State of the State of California;
(viii) various consents, waivers, authorizations,
orders or approvals required by agreements to which the Company or Smith, or
either of them, may be a party or required by law, regulation or otherwise in
order to execute and deliver this Agreement, the Agreement of Merger, the Escrow
Agreement, and to perform their obligations hereunder and thereunder;
(ix) evidence of the resignation of all officers and
directors of the Company, to be effective as of the Closing Date; and
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(x) the corporate minute books and stock record books
of the Company.
3. Conversion of Capital Stock
- ------------------------------
(a) Company Stock. At the time of the Merger, all of the
shares 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 the "Merger Consideration" which shall consist of (i) $4,400,000 in cash
(subject to adjustment and to a portion to be held in escrow as set forth herein
and in the Escrow Agreement, and (ii) 625,000 shares of the Common Stock of
inTEST, par value $.01 per share (the "inTEST Stock"). At the direction of
Smith, 5% of the Merger Consideration is to be paid to Slayton, a creditor of
the Company.
(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.
4. Adjustment to Merger Consideration
- -------------------------------------
(a) Net Assets below $1,500,000. If the value of the Net
Assets (defined in paragraph (d) below) of the Company as of July 31, 1998 is
less than $1,500,000, Smith shall pay to inTEST one dollar for each dollar that
the Net Assets are below $1,500,000.
(b) Net Assets above $1,900,000. If the value of the Net
Assets of the Company as of July 31, 1998 is greater than $1,900,000, inTEST
shall pay to Smith one dollar for each dollar the Net Assets exceed $1,900,000.
(c) Adjustment Amount. The "Adjustment Amount" will be the
amount to be paid by Smith or inTEST, as the case may be, pursuant to paragraphs
(a) and (b) of this Section 4.
(d) Definition of Net Assets. Net Assets shall mean the
historical cost of the assets of the Company as of the close of business on the
Closing Date, net of any accumulative depreciation or amortization of such
assets, less liabilities of the Company, as determined in accordance with
generally accepted accounting principles in the United States ("GAAP"),
consistently applied, and less any assets of Prim Distribution, Inc.
5. Adjustment Procedure
- -----------------------
(a) Closing Balance Sheet. As soon as practicable following
the Closing Date, the Surviving Corporation shall prepare a balance sheet of the
Company as of July 31, 1998 (the "Closing Balance Sheet"), including a valuation
of the Net Assets as of July 31,
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1998. The Closing Balance Sheet shall be prepared in accordance with GAAP
consistently applied and in a manner consistent with the Company Balance Sheet
(as defined below).
(b) Objections to Closing Balance Sheet. The Surviving
Corporation shall deliver the Closing Balance Sheet to Smith and inTEST within
fifteen days after the Closing Date. If within fifteen days following delivery
of the Closing Balance Sheet, neither Smith nor inTEST has given the Company
notice of objection to the Closing Balance Sheet (any such notice must contain a
statement of the basis of such objection), then the value of the Net Assets as
of the Closing Date reflected in the Closing Balance Sheet shall be used in
computing the Adjustment Amount, if any. If Smith or inTEST gives such a notice
of objection, then the issues in dispute will be submitted for resolution to a
nationally recognized certified public accounting firm in the United States
which does not act for inTEST, the Company or Smith and which shall be jointly
selected by the parties (the "Independent Accountants"). If issues in dispute
are submitted to the Independent Accountants for resolution, (i) each party will
furnish to the Independent Accountants such workpapers and other documents and
information relating to the disputed issues as the Independent Accountants may
request and are available to that party (or such party's own accountants), and
will be afforded the opportunity to present to the Independent Accountants any
material relating to the determination and to discuss the determination with the
Independent Accountants; (ii) the determination by the Independent Accounts, as
set forth in a notice delivered to both parties by the Independent Accountants,
will be binding and conclusive on the parties; (iii) Smith and inTEST will each
bear 50% of the fees of the Independent Accountants for such determination; and
(iv) the Company shall use its best efforts to cause the Independent Accountants
to deliver written confirmation to Smith and inTEST that the Closing Balance
Sheet, as finally determined, has been prepared in accordance with the
provisions of this Section 5.
(c) Payment of Adjustment Amount. On the tenth business day
following the final determination of the Adjustment Amount, Smith shall pay to
inTEST the Adjustment Amount if the value of the Net Assets as of the Closing
Date is less than $2,000,000 or inTEST shall pay to Smith the Adjustment Amount
if the Net Assets as of the Closing Date is greater than $2,400,000.
6. Subsequent Payment
- ---------------------
(a) Claims Under Agreement. If an event or state of facts
giving rise to indemnification under Section 14 hereof has occurred (an
"Event"), inTEST shall provide Smith and the Escrow Agent with a Claim Notice in
accordance with the terms of Section 15 hereof, stating that such Event has
occurred, describing such Event in reasonable detail and specifying the amount
of the Losses and the method of computation thereof and 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 and Newsub may make
more than one Claim with respect to any Event.
(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 20(b)
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hereof) to be due and owing to inTEST, then the Escrow Agent shall be instructed
to pay, out of the Escrow Fund, such amount to inTEST (or, at the direction of
inTEST, to Newsub).
(ii) If Smith delivers to inTEST a Dispute Statement
in accordance with the terms of Section 15, 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
20(b) hereof) or by joint written instructions by the parties to the Escrow
Agent stipulating the amount of the Admitted Liability to be paid out of the
Escrow Fund.
(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 15, then the Escrow Agent shall be instructed to
pay such amount to inTEST out of the Escrow Fund.
(b) Final Payment. On a date two years after the Closing Date
(the "Final Release Date"), the Escrow Agent shall be instructed to pay to Smith
the remaining balance of the Escrow Fund, if any, plus any interest earned and
unpaid, less the maximum amount payable under all then-pending good faith
Claims.
(c) Final Resolution of Disputes. If all Claims made by inTEST
have not been finally resolved by the Final Release Date and the Escrow Agent
retains any amount in the Escrow Fund, then the Escrow Agent shall retain such
amount in the Escrow Fund until all such Claims have been finally resolved.
(d) Interest on Escrow Fund. Current interest earned on the
principal of the Escrow Fund shall be paid to Smith in quarterly installments,
no later than forty-five (45) days following the end of each calendar quarter.
(e) Termination of the Escrow. The escrow shall terminate upon
the final disbursement of all funds deposited with the Escrow Agent as provided
herein.
(f) Escrow Agent Fees. The fees of the Escrow Agent shall be
shared equally by inTEST and Smith.
7. Warranties and Representations of inTEST and Newsub
- ------------------------------------------------------
inTEST and Newsub, jointly and severally, represent and
warrant to the Company and Smith as follows:
(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
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a whole, (a "Material Adverse Effect") on inTEST and its subsidiaries taken as a
whole. Newsub was incorporated on July 16, 1998 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 consummate the transaction
contemplated hereby and to perform all the terms and conditions hereof to be
performed by them.
(c) Capitalization of inTEST. inTEST has an authorized capital
stock of 20,000,000 shares of Common Stock, par value $.01 per share, 5,911,034
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 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) No Violation or Consents. The execution, delivery and
performance 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
provision of any 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 are bound, or (v)
result in the creation or imposition of any claim, demand, charge, mortgage,
judgment, lien, lease, security interest,
7
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easement or any encumbrance whatsoever upon any of the assets of inTEST, 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.
(g) Financial Statements and SEC Reports.
------------------------------------
(i) The audited consolidated balance sheet of inTEST
as of December 31, 1997 (the "inTEST Balance Sheet"), and the related
consolidated statements of earnings, changes in stockholders' equity and cash
flows for the year then ended, with related notes, certified by KPMG Peat
Marwick 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 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, 1997.
(ii) inTEST has filed all forms, reports and
documents required to be filed by it with the Securities and Exchange Commission
(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 of 1933, as amended (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 (or at the effective date thereof in the case of
registration statements), 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 Smith 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 therein). inTEST has
furnished to Smith 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.
(h) 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, 1997, 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
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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, 1997.
(i) Litigation. 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 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,
and 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.
(j) Finder's Fee. With the exception of Janney Montgomery
Scott, who will be paid by inTEST, no person, corporation, partnership or firm
retained by inTEST or Newsub (i) brought about the transaction contemplated
hereunder or (ii) is entitled to any commission or fee from the Company or Smith
upon the consummation of such transaction.
8. Warranties and Representations of Smith
- ------------------------------------------
Smith represents and warrants to inTEST and Newsub as follows:
(a) Organization of the Company. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California. 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 it owns or leases properties or
conducts its business, except as set forth in Schedule "8(a)" or where the
failure to be so qualified would result in a loss to or a liability of the
Company in excess of $5,000.
(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, 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 1,000,000 shares of Common Stock, of which 70,000 shares are
issued and outstanding. All of the said shares of the Company Common Stock are
validly issued, fully paid and non-assessable and were entitled to vote at the
shareholder meeting at which the Merger was approved, and none of the shares of
the Company Common Stock has been issued in violation of any pre-emptive rights
of any shareholder or transferred in violation of any transfer
9
<PAGE>
restrictions relating thereto. 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 securities of the Company, and there is no
outstanding security of any kind convertible into such capital stock. There are
no existing shareholder agreements, voting agreements or voting trusts
respecting any shares of the capital stock of the Company.
(d) Ownership of Stock and Power. Smith is the registered and
beneficial owner of all of the shares of the Company Common Stock, free and
clear of any liens, mortgages, security interests or encumbrances of any kind
whatsoever, and Smith has full power and authority without any restriction
whatsoever to vote said shares and to approve the transactions contemplated by
this Agreement. Smith has all requisite power and authority to execute and
deliver this Agreement and all of the documents related hereto, to consummate
the transaction contemplated hereby and to perform all the terms and conditions
hereof to be performed by him.
(e) Corporate Instruments and Records. The copies of the
Company's Articles of Incorporation and By-Laws heretofore furnished to inTEST
are true, correct and complete and each include all amendments to the date of
this Agreement. 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 has been held for which minutes have not been prepared and are not
contained in such minute books. The stock certificate books and ledgers of the
Company, as made available to inTEST for inspection, are true, correct and
complete, as currently in effect, and accurately reflect, as of the date hereof,
the ownership of the Company Common Stock by Smith. The books of account, minute
books, stock record books and other records of the Company, 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.
(f) Subsidiaries. Except as set forth on Schedule "8(f)", 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.
(g) No Proceedings in Dissolution. No proceedings or actions
are pending to limit or impair any of the powers, rights or privileges of the
Company.
(h) Authorization of Agreement and Enforceability. The
execution and delivery of this Agreement on behalf of the Company has been duly
approved by the Board of Directors of the Company and by Smith as the sole
shareholder of the Company, and no further corporate action is required to
approve the execution and delivery of this Agreement on
10
<PAGE>
behalf of the Company or its compliance herewith. This Agreement constitutes the
legal, valid and binding obligations of the Company and Smith, enforceable in
accordance with its terms and conditions.
(i) Property and Assets. Schedule "8(i)" hereto 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 "8(i)",
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 "8(i)" hereto. The Company also has
certain tooling and other equipment in its possession which belong to the
Company's customers which tooling and customers are listed on Schedule "8(i)"
hereto.
(j) Financial Statements. Prior to the date hereof, the
Company has delivered to inTEST true and complete copies of the following
(collectively, the "Company Financial Statements"): (i) audited balance sheet of
the Company as of June 30, 1997, and the related statement of income,
shareholders' equity and cash flow for the year then ended, and (ii) the audited
balance sheet of the Company at May 31, 1998 (the "Company Balance Sheet"), and
the related statements of income, shareholders' equity and cash flow for the
eleven-month period then ended, with related notes, in each case certified by
KPMG Peat Marwick LLP, independent public accountants for inTEST. The Company
Financial Statements present fairly the financial position and results of
operations and changes in financial position of the Company on such date and for
the fiscal period covered thereby and were prepared in accordance with GAAP
applied on a consistent basis. There has been no Material Adverse Effect on the
Company since May 31, 1998, except as set forth on Schedule 8(j).
(k) No Undisclosed Liabilities. To the Best Knowledge of Smith
and the Company, the Company has no debts, liabilities or obligations, known or
unknown, of any kind, character or description whether accrued, absolute,
contingent or otherwise or due or to become due in excess of $5,000,
individually or in the aggregate, 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 May 31,
1998, each of which has been consistent with past practices.
(l) 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 or will be collectable in full at the recorded amounts thereof
(subject to no defenses, set-offs or counterclaims) in the ordinary course of
business (without resort to litigation or assignment to a collection agency) no
later than 120 days after the Closing Date, net of any allowance for bad debts
reflected on the Company Balance Sheet.
11
<PAGE>
(m) 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 or Smith, 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.
(n) No Violation or Consents. Except as set forth on Schedule
"8(n)", the execution, delivery and performance by the Company and Smith 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 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 or Smith is subject, (iii) violate any judgment, order, writ
or decree of any court applicable to the Company or Smith, (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 or Smith 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 result in a loss to or a liability of the Company in excess of
$5,000 or prevent or delay the consummation of the transactions contemplated by
this Agreement.
(o) Taxes. The Company has duly prepared and 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 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 is
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 are duly reflected in the Company Balance Sheet and the
Closing Balance Sheet. No proceedings 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 1995 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 Smith, there is no examination of the
Internal Revenue Service presently pending, except as set forth on Schedule
8(o).
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<PAGE>
(p) 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 "8(p)"
hereto sets forth the correct and complete list of all material Permits. To the
Best Knowledge of the Company or Smith, no suspension or cancellation of any of
the Permits is threatened and, to their Best Knowledge, no cause exists for such
suspension or cancellation.
(q) Litigation. There are no actions, suits or proceedings
pending or, to the Actual Knowledge of the Company or Smith, 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 as set forth on Schedule 8(q). 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,
individually or in the aggregate, 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 or Smith, threatened against or affecting the Company or Smith or
pertaining to this Agreement, the result of which could prevent, delay or make
unlawful the consummation of the transaction contemplated by this Agreement.
(r) Compliance with Laws. Except as set forth on Schedule
8(r), 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.
(s) Contracts and Commitments. Except as listed and described
on Schedule "8(s)" 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;
13
<PAGE>
(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;
(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;
(ix) license, franchise, distributorship or other
agreement, including those that relate in
whole or in part, to any patent, trademark,
tradename, service mark 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 "8(s)" 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; and no such Commitment, in the reasonable
opinion of Smith, contains any contractual requirement with which there is a
reasonable likelihood the Company or any other party thereto will be unable to
comply. Except as set forth in Schedule "8(s)", 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
14
<PAGE>
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.
(t) Insurance. Schedule "8(t)" hereto is a true and complete
list of all insurance policies now owned by the Company, and all insurance
policies owned by the Company covering product liabilities, umbrella and excess
liabilities and blanket crime, all of which policies are valid and are in full
force and effect.
(u) Finder's Fee. With the exception of Slayton, who will be
paid out of the Merger Consideration, no person, corporation, partnership or
firm retained by the Company or Smith (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.
(v) Employees. Schedule "8(v)" 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
1997 and 1998), benefits and vacation schedules currently paid or provided for
such employees.
(w) Labor Disputes. Except as set forth on Schedule 8(w),
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 or Smith, threatened before
any federal, state or local court or agency, and to the Best Knowledge of the
Company or Smith, 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 or Smith 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 or Smith, 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 or
Smith, is threatened respecting its employees.
(x) Customers and Suppliers. To the Best Knowledge of the
Company or Smith, 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.
(y) Proprietary Rights.
(i) Patents and Trademarks. Schedule "8(y)"
hereto sets forth a correct and complete
list of all inventions, trade secrets,
patents, copyrights, maskworks, logos,
trademarks, tradenames, service marks and
other intellectual property rights and
applications or
15
<PAGE>
registrations therefor used
in the business of the Company and/or owned
by the Company (collectively, the
"Proprietary Rights").
(ii) 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 or Smith, 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.
(iii) Infringement. To the Best Knowledge of the
Company or Smith, there is no use of any of
the Proprietary Rights being made by any
corporation, firm or person other than the
Company.
(iv) Conflicts. No present or former director or
officer or employee, or consultant of the
Company nor Smith has any interest in any of
the Proprietary Rights.
(z) ERISA.
-----
(i) Employee Benefit Plans. Schedule "8(z)"
hereto contains a correct and complete list
of each employee benefit plan subject to
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. The Company has no ERISA
plan or other employee arrangement which
provides for the payment of retiree
benefits.
(aa) Affiliate Transaction. Schedule "8(aa)" hereto sets forth
a summary of all purchases of goods or services from the Company by any
Affiliate of the Company for the three years ended as of the Closing Date. No
Affiliate of the Company or Smith provides any
16
<PAGE>
services or products to the Company. For the purposes of this Agreement, the
term "Affiliate" shall mean each member of Smith's family and any person or
entity that is directly or indirectly controlled by the Company, Smith or one or
more members of Smith's family.
(bb) 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 violation of or liable under,
any applicable Environmental Law.
(ii) No Releases. Except as set forth in Schedule
"8(bb)(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. 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 wells or septic tanks in which
processed waste water or any Regulated
Substances have been disposed.
(v) Environmental Studies. Schedule "8(bb)(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.
17
<PAGE>
(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;
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 does to public assets; or
o any governmental authorization
issued pursuant to any Environmental
Law.
(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,
18
<PAGE>
solution, or substance that is or may be
designated pursuant to Section 102 of
CERCLA; (ii) substance that is or may be
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") or having characteristics that may
subsequently be considered under RCRA to
constitute a hazardous waste; (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 or may be
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 or may be 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 it;
(x) waste oil and other petroleum products;
and (xi) any other toxic materials,
contaminants, or hazardous substances or
wastes pursuant to any Environmental Law.
(cc) Product Warranties. Schedule "8(cc)" 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 "8(cc)": (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 Actual Knowledge of the Company or Smith, threatened claim
against the Company on account of product warranties or with respect to
defective or inferior products in excess of $5,000.
(dd) Disclosure. No representation by the Company or Smith
made in this Agreement or in any Schedule or Exhibit hereto and no statement
made in any certificate furnished by them, or either of them, required by this
Agreement contains any untrue statement of a material fact or omits to state any
material fact necessary to make any such representation or statement not
misleading. Except as set forth in Schedule "8(dd)", to the Best Knowledge of
the Company or Smith, there is no fact which adversely affects or to their
Actual Knowledge in the future may adversely affect the assets, business,
condition (financial or otherwise) or results of operations of the Company which
has not been set forth in this Agreement or any Schedule hereto.
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<PAGE>
9. Conduct of Business
- ----------------------
Except as set forth in Schedule "9" hereto or in order to
consummate the transaction contemplated by this Agreement, during the period
between May 31, 1998 and the date of this Agreement the Company has conducted
its business in the usual and normal course consistent with past practices.
10. Agreement Not to Compete or Disclose
- ----------------------------------------
(a) Covenant Not to Compete. Smith agrees that he will not,
directly or indirectly, own, manage, operate, join, control or participate in
the ownership, management, operation and control of any business involved in
test handler or wafer sort interfaces, test head manipulators, docking hardware
or any accessories related to the foregoing (which accessories are set forth on
Schedule 10(a) hereto) for a period of two years after the date of the
termination of employment of Smith with the Surviving Corporation or inTEST, as
the case may be, other than by owning up to 1% of a class of securities
registered under Section 12 of the Securities Exchange Act of 1934 of such a
business. Smith agrees that the remedy at law for any breach of the foregoing
will be inadequate and that inTEST and Newsub shall be entitled, among other
remedies, to temporary and permanent injunctive relief without the necessity of
proving any actual damage to the Surviving Corporation or inTEST.
(b) Non-Disclosure. Smith agrees that he will not divulge,
other than in the regular course of business of the Surviving Corporation or
inTEST, any knowledge or information with respect to the operations, business or
finances of the Surviving Corporation or inTEST or with respect to confidential
information or trade secrets of the business transferred pursuant hereto;
provided, however, that Smith has no obligation, expressed or implied, to
refrain from using or disclosing to others any knowledge or information which:
(i) is or hereafter shall become otherwise available to the public through no
fault of Smith; (ii) is disclosed to Smith by a third party that is under no
obligation of nondisclosure to the Surviving Corporation or inTEST; or (iii) is
required to be disclosed pursuant to any valid order of a court or other
governmental body or agency.
11. 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 among the Company, Smith 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
Smith 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 Smith concerning the nature and scope of the news release.
20
<PAGE>
12. Securities Laws
- -------------------
(a) No Registration. Smith acknowledges that the conversion or
exchange of the Company Common Stock for shares of inTEST Stock has not been
registered under the Securities Act, or any applicable state securities law by
reason of exemptions from the registration requirements of the Securities Act
and such laws, and the shares of inTEST Stock may not be sold, pledged, assigned
or otherwise disposed of in the absence of an effective registration statement
for the inTEST Stock under the Securities Act or unless an exemption from such
registration is available. inTEST is under no obligation to, and has no
intention to, register the inTEST Stock or comply with any exemption from
registration so as to permit any resale and has not represented that at some
future date an attempt will be made to register the inTEST Stock or to comply
with an exemption from registration so as to permit any resale.
(b) Resale of Common Stock. Smith shall not attempt to sell,
transfer, assign, pledge or otherwise dispose of all or any portion of the
inTEST Stock in the absence of either an effective registration statement or an
opinion of reputable securities counsel satisfactory in form and substance to
inTEST and its counsel that such proposed sale, transfer, assignment, pledge or
other disposition would not be in violation of the Act.
(c) Rule 144. inTEST covenants that it shall file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder (or, if inTEST is not
required to file such reports, it will, upon the request of Smith, make publicly
available other information so long as necessary to permit sales under Rule 144
under the Securities Act), and it will take such further action as Smith may
reasonably request, all to the extent required from time to time to enable Smith
to sell the inTEST Stock without registration under the Securities Act within
the limitation of the exemptions provided by (1) Rule 144 under the Securities
Act, as such Rule may be amended from time to time, or (2) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of Smith, inTEST shall
deliver to Smith a written statement as to whether it has complied with such
requirements.
(d) Restrictive Legend. Smith agrees that inTEST may place
upon each certificate for the shares of inTEST Stock delivered to Smith a legend
to the effect that said shares have not been registered under the provisions of
the Act and were issued in a transaction not involving a public offering under
an investment representation.
(e) Due Diligence. Smith acknowledges that he has been given
the opportunity by inTEST to ask questions and receive additional documents and
information with respect to the conversion or exchange pursuant to the Merger.
Smith is acquiring the shares of inTEST Stock without being furnished any sales
literature or prospectus.
(f) Investment Intent. Smith is acquiring the shares of inTEST
Stock pursuant hereto solely for his own account for investment purposes and not
with a view to resale or distribution, and Smith has no present intention of
selling or distributing said shares.
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Smith is aware that there may be legal and practical limits on his ability to
sell or dispose of the inTEST Stock.
(g) Risk. Smith recognizes that an investment in the inTEST
Stock involves certain risks, and Smith has taken full cognizance of and
understands all of the risk factors related to the acquisition of the inTEST
Stock.
(h) Registration Exemption. Smith understands that the inTEST
Stock is being issued to Smith in reliance on specific exemptions from the
registration requirements of federal and state laws and that inTEST is relying
on the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings set forth in this Agreement.
13. Indemnity by inTEST and Newsub
- ----------------------------------
inTEST and Newsub, jointly and severally, hereby indemnify
Smith against and hold Smith 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 15(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 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 Smith pursuant to this Agreement.
14. Indemnity by Smith
- ----------------------
Smith hereby indemnifies inTEST and Newsub against and holds
inTEST and Newsub harmless of and from any and all Losses, to the extent set
forth in Section 15(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 Smith 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 or Smith pursuant to this Agreement.
15. 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
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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 20(b) hereof, or a
written agreement by the parties stipulating the amount of the Admitted
Liability.
(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
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
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<PAGE>
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 (iv) subject to Section
14(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 13, 14 and 15
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 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 13, 14 and 15 shall be in
lieu of any other rights or remedies that may be available to any party at law,
in equity or otherwise.
(d) Limitation of Indemnification. No party to this Agreement
shall be entitled to indemnification under 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 either party be liable under Sections 13, 14 and
15 of this Agreement for Losses in excess of $3,000,000; provided that such
limitations shall not apply to claims based on either party's intentional,
willful or reckless misrepresentations or 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 realized by and paid to the Indemnified Party in respect of
such claim. If inTEST or Newsub is entitled to indemnification under this
Agreement, the first $1,000,000 shall be paid by Smith in cash from the Escrow
Fund or directly from Smith if the Escrow Fund is no longer in existence. Any
additional amount owed by Smith would be paid by his delivering to inTEST or
Newsub (as directed by inTEST) shares of inTEST Stock having a Market Value
(defined below) equal to the amount owed by Smith to inTEST or Newsub. The
"Market Value" of a share of the inTEST Stock for the purposes of this Section
15(d) shall be determined as follows: If the inTEST Stock is listed on a
national securities exchange or quoted on The Nasdaq Stock Market ("NASDAQ"),
the Market Value shall be the average of the closing prices of a share
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of the inTEST Stock for the first twenty of the twenty-five trading days
immediately preceding the date the inTEST Stock is delivered to inTEST or
Newsub, as reported by the principal national exchange on which such shares are
traded (in the case of an exchange) or by NASDAQ, as the case may be. If the
inTEST Stock is not listed on a national securities exchange or quoted on
NASDAQ, the Market Value will be determined by Smith and inTEST in good faith.
(e) Environmental Claims. Notwithstanding any other provisions
of this Agreement to the contrary, if inTEST or Newsub is entitled to be
indemnified by Smith under Sections 14 and 15 of this Agreement for any Losses
due to any misrepresentation or breach of warranty in respect of Section 8(bb)
(Environmental Matters) hereof, all Losses of inTEST and Newsub resulting
therefrom shall be paid or reimbursed by Smith in full if such Losses were
caused by any action or omission by or on behalf of the Company or Smith prior
to the Closing. If such Losses were not caused by any action or omission by or
on behalf of (i) the Company or Smith prior to the Closing, or (ii) inTEST or
the Surviving Corporation after the Closing, such Losses shall be shared equally
by Smith and inTEST; provided, however, that in such case Smith shall not be
liable to pay to inTEST, Newsub or one or more third parties an amount,
individually or in the aggregate, beyond the extent provided for in Paragraph
(d) of this Section 15.
16. Duty to Minimize Damages
- ----------------------------
Each party who shall seek indemnification under Sections 13,
14 and 15 hereof shall be under a duty to take all reasonable actions which
would minimize the Losses for which the Indemnitor may be liable.
17. Assignment of Accounts Receivable
- -------------------------------------
If, and to the extent that, the Surviving Corporation is
unable, using reasonable diligent efforts, to collect all of the accounts
receivable of the Company reflected in the Company Balance Sheet within 120 days
after the Closing Date (net of any allowance for bad debts reflected on the
Company Balance Sheet), and inTEST successfully asserts under Sections 14 and 15
hereof a claim for indemnification relating thereto and inTEST, Newsub or the
Company receives payment therefor, inTEST shall cause the Surviving Corporation
promptly to assign to Smith all of the Surviving Corporation's right, title and
interest in and to those uncollected accounts receivable that made up the basis
of such indemnification claim. Thereafter, if inTEST or the Surviving
Corporation receive any payments on such uncollected accounts receivable, inTEST
or the Surviving Corporation, as the case may be, shall promptly pay to Smith
any such amounts received by them.
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18. Survival of Representations
- -------------------------------
All representations and warranties made herein, in the
Schedules hereto and in any document delivered pursuant hereto by Smith, inTEST
or Newsub shall survive for two years after the Closing Date; provided, however,
that the representations and warranties of Smith set forth in Section 8(d)
(Ownership of Stock) shall survive indefinitely, those in Section 8(o) (Taxes)
shall survive until the expiration of any applicable statute of limitations or
waivers or extensions thereof agreed to (explicitly or implicitly) by the
Company or Smith prior to the Closing, and those in Section 8(bb) (Environmental
Matters) shall survive for four years after the Closing Date; provided further
that there shall be no termination of any such representation or warranty as to
which a Claim has been asserted prior to the termination of such survival period
in respect of such Claim. Except as otherwise expressly provided in this
Agreement, all covenants, agreements, undertakings and indemnities set forth in
this Agreement shall survive indefinitely.
19. 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 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: Robert Matthiessen
2 Pin Oak Lane
Cherry Hill, NJ 08003
Fax: (609) 751-1222
with a copy to:
James W. Schwartz, Esquire
Saul, Ewing, Remick & Saul LLP
1500 Market Street
38th Floor, Centre Square West
Philadelphia, PA 19102
Fax: (215) 972-1914
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<PAGE>
Notice to Smith shall be sufficient if given to:
Douglas W. Smith
21 Sandstone
Portola Valley, CA 94028
Fax:
with a copy to:
Baker & McKenzie
660 Hansen Way
Palo Alto, CA 94304
Attention: Jon M. Appleton, Esquire
Fax: (650) 856-9299
20. 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 arbiter'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 to: (i)
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.
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(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
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.
(f) Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the heirs, legal representatives and successors 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 Smith 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 or Smith required pursuant
hereto, except to the extent that any officer of inTEST has Actual Knowledge of
a breach by Smith of any such representation and warranty; provided, however,
that any knowledge of inTEST or Newsub relating to the matters set forth in
writing from inTEST or Newsub to Smith shall in no way limit, affect or impair
the ability of inTEST or Newsub to rely upon any representation or warranty of
Smith set forth in this Agreement, any Schedule or Exhibit hereto, the Company
Financials, or any certificate furnished by the Company or Smith required
pursuant hereto. All statements contained in any certificate delivered at the
Closing or by or on behalf of the Company, Smith, inTEST or Newsub pursuant to
this Agreement or in any Schedule to this Agreement shall be deemed
representations and warranties hereunder by the Company, Smith, 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
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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) Attorneys' Fees. In the event of any action for the breach
of this Agreement or misrepresentation of any party, the prevailing party shall
be entitled to reasonable attorneys' fees, costs and expenses incurred in
connection with such action.
(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 Smith.
(m) Expenses. Except as set forth on Schedule "20(m)", inTEST,
Newsub and Smith shall pay their respective expenses incident to this Agreement
and the transaction contemplated herein.
(n) Knowledge.
(i) "Best Knowledge" with respect to the Company means
facts or information that have come to the attention of Smith, and facts or
information that would have come to the attention of Smith 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 individual.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
TestDesign Corporation
By: /s/ Douglas W. Smith
----------------------------
President
/s/ Douglas W. Smith
----------------------------
Douglas W. Smith
inTEST Corporation
By: /s/ Hugh T. Regan, Jr.
-----------------------------
Treasurer and Chief Financial
Officer
TD Acquisition Corp.
By: /s/ Hugh T. Regan, Jr.
-----------------------------
Treasurer and Chief Financial
Officer
30
