As filed with the Securities and Exchange Commission on June 19, 1998.
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
GENRAD, INC.
(Exact name of registrant as specified in charter)
Massachusetts 04-1360950
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
7 Technology Park Drive
Westford, Massachusetts 01886-0033
(978) 589-7000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
------------------
James F. Lyons Copies to:
President and Chief Constantine Alexander, Esq.
Executive Officer Nutter, McClennen & Fish, LLP
GenRad, Inc. One International Place
7 Technology Park Drive Boston, MA 02110-2699
Westford, MA 01886-0033 (617) 439-2000
(978) 589-7000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------
Approximate date of commencement of proposed sale to public: From time to time
after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================
Proposed Proposed
Title of Each Class of Maximum Maximum Amount of
Securities to be Amount to be Offering Price Aggregate Registration
Registered Registered Per Share(1) Offering Price(1) Fee
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of Common
Stock, $1.00 par value 1,237,917 shares $18.03 $22,319,643.51 $6,584.29
====================================================================================================
</TABLE>
(1) Determined pursuant to Rule 457(c) under the Securities Act of 1933, as
amended, based upon the average of the high and low prices per share of
Common Stock reported on the New York Stock Exchange on June 12, 1998.
--------------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE>
SUBJECT TO COMPLETION
JUNE 19, 1998
PROSPECTUS
1,237,917 Shares
GENRAD, INC.
Common Stock
This Prospectus relates to the resale of up to 1,237,917 shares (the
"Shares") of the common stock, $1.00 par value (the "Common Stock"), of GenRad,
Inc., a Massachusetts corporation (the "Company"), which Shares are owned and
may be offered and sold from time to time by the persons and entities listed
herein under, and referred to herein as, the "Selling Stockholders."
The Shares may be offered from time to time by the Selling Stockholders in
transactions on the New York Stock Exchange ("NYSE") or in privately-negotiated
transactions, at fixed prices which may be changed, at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. Specific information concerning the Selling Stockholders and
their plan of distribution is set forth under "Selling Stockholders" and "Plan
of Distribution."
The Company will not receive any proceeds from the sale of the Shares. The
Company has agreed to bear the expenses incurred in connection with the
registration of the Shares being offered and sold by the Selling Stockholders.
Shares of the Common Stock are quoted on the NYSE under the symbol "GEN."
On June 18, 1998, the closing price reported for the Common Stock on the NYSE
was $20.75.
See "Factors That May Affect Future Results" commencing on
Page 4 of this Prospectus for a discussion of certain
factors that should be considered by prospective
purchasers of the Common Stock offered hereby.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
---------------------
The date of this Prospectus is __________ , 1998.
<PAGE>
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and, if given or made, such information and representations must not
be relied upon as having been authorized by the Company. This Prospectus does
not constitute an offer to sell or a solicitation of any offer to buy the
securities described herein by anyone in any jurisdiction in which such offer or
solicitation is not authorized, or in which the person making the offer or
solicitation is not qualified to do so, or to any person to whom it is unlawful
to make such offer or solicitation. Under no circumstances shall the delivery of
this Prospectus or any sale made pursuant to this Prospectus create any
implication that the information contained in this Prospectus is correct as of
any time subsequent to the date of this Prospectus.
-------------------------
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (together with all amendments
and exhibits thereto, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), covering the Shares. This Prospectus
does not contain all the information set forth in the Registration Statement.
For further information with respect to the Company and the Shares, reference is
made to the Registration Statement, and the exhibits and schedules thereto,
which can be inspected and copied at the public reference facilities maintained
by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices located at
Seven World Trade Center, 13th Floor, New York, New York 10048 and the Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The
Commission maintains a web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants
that submit electronic filings to the Commission. Statements made in this
Prospectus as to the contents of any contract or other document referred to
herein are not necessarily complete, and reference is made (where applicable) to
the copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files periodic reports, proxy and information statements and other
information with the Commission. For further information with respect to the
Company, reference is hereby made to such reports and other information which
can be inspected and copied at the public reference facilities maintained by the
Commission referred to above. Copies of such material may also be obtained at
prescribed rates from the Public Reference Section of the Commission.
The Company's Common Stock is listed for trading on the NYSE under the
trading symbol "GEN." Reports, proxy statements and other information about the
Company also may be inspected at the offices of the NYSE, located at 20 Broad
Street, New York, New York 10005.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
The Company hereby incorporates by reference its Annual Report on Form 10-K
for its fiscal year ended January 3, 1998, and its Quarterly Report on Form 10-Q
for its fiscal quarter ended April 4, 1998.
All reports filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date hereof and prior to any
termination of the offering of the shares of Common Stock covered by this
Prospectus are deemed to be incorporated by reference into this Prospectus and
to be a part hereof from the respective dates of filing. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any subsequently filed
document that is also incorporated herein modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
Copies of all documents incorporated herein by reference (other than
exhibits to such documents, unless such exhibits are specifically incorporated
by reference into such documents) will be provided without charge to each person
who receives a copy of this Prospectus on written or oral request made to Nancy
Miller, Director, Corporate Relations, GenRad, Inc., 7 Technology Park Drive,
Westford, MA 01886-0033, or by telephone at (978) 589-7000.
-3-
<PAGE>
THE COMPANY
The Company is a leading worldwide supplier of integrated test measurement
and diagnostic solutions for the manufacture and maintenance of electronic
products. The Company offers products and services in three core business areas:
Electronic Manufacturing Systems, Advanced Diagnostic Solutions and GR Software.
The Company was incorporated in 1915 under the laws of the Commonwealth of
Massachusetts. The Company has its executive offices at 7 Technology Park Drive,
Westford, Massachusetts 01886-0033, Telephone: (978) 589-7000.
FACTORS THAT MAY AFFECT FUTURE RESULTS
In addition to the other information contained or incorporated by reference
in this Prospectus, prospective purchasers should consider carefully the factors
set forth below before investing in the shares of Common Stock offered hereby.
Prospective purchasers are cautioned that the statements contained or
incorporated by reference in this Prospectus that are not descriptions of
historical facts may be forward- looking statements. Such statements reflect
management's current views, are based on many assumptions and are subject to
risks and uncertainties. Actual results could differ materially from those
currently anticipated due to a number of factors, including, but not limited to,
those discussed below.
Highly Competitive Industry
Competition within the markets in which the Company operates is intense.
Competition in the industry focuses on technological innovation, product
performance, customer-specific applications engineering, price, and customer
service and support. The Company expects its competitors to continue to develop
new products, enhance the performance of existing products and provide improved
customer service. The Company also expects its competitors to engage in price
competition. Many of the Company's competitors have financial and other
resources that are substantially greater than the Company. In order to continue
to be competitive, the Company must continually develop innovative and improved
products, provide successful customer-specific applications engineering and
provide better customer service than its competitors while responding to its
competitors' price adjustments. The failure of the Company to meet such
challenges could have a material adverse effect on the Company's business,
financial condition and results of operations.
-4-
<PAGE>
Technological Change; Importance of Timely Product Introduction
The market for the Company's products is characterized by rapid
technological change, an increased demand for specific feature requests by
customers, evolving industry standards and frequent new product introductions,
and therefore is highly dependent on timely product innovation. The introduction
by the Company or its competitors of products embodying new technology or the
emergence of new industry standards or practices could render the Company's
existing products obsolete or otherwise unmarketable, which could have a
material adverse effect on the Company's business, financial conditions and
results of operations. The Company's ability to remain competitive is dependent
on its ability to develop, design, manufacture and market technologically
innovative products that meet customer needs. The success of the Company in
developing, designing, manufacturing and marketing innovative products that
successfully meet changing market needs depends upon a variety of factors,
including new product selection which anticipates customer demand and
technological trends, development of competitive products by competitors, timely
and efficient completion of product design and implementation of the
manufacturing and assembly processes, and product performance at customer
locations. There can be no assurance that the Company will be successful in
introducing new products that successfully contribute to the Company's operating
results, and the inability of the Company to do so could have a material adverse
effect on its business, financial condition and results of operations.
Dependence on Suppliers
The Company is dependent upon a number of suppliers for several key
components of its products. The loss of certain of the Company's suppliers,
supply shortages or increases in the costs of key raw materials could have a
material adverse effect on the Company's business, financial condition and
results of operations.
Limitations on Protection of Intellectual Property and Proprietary Rights
The Company attempts to protect its intellectual property rights and trade
secrets through patents and other measures. There can be no assurance that the
Company's innovations and developments will receive United States or foreign
patent protection or that such patents and other measures will prevent
infringement of the Company's intellectual property rights and trade secrets.
There can be no assurance that any patent owned by the Company will not be
invalidated, circumvented or challenged, that the rights granted thereunder will
provide competitive advantages to the Company or that any of the Company's
pending or future patent applications will be issued with the scope of the
claims sought by the Company, if at all. In addition, others may independently
develop substantially similar innovations, products or techniques. Loss of the
exclusive rights to trade secrets and intellectual property could have a
material adverse effect on the Company's business, financial condition and
results of operations. Litigation may be necessary to enforce the Company's
patents and other intellectual property rights, to protect the Company's trade
secrets, to determine the validity and scope of the proprietary rights of
others, or to defend against claims of infringement or invalidity. Such
litigation could result in substantial costs (which may be in excess of
available insurance coverage), diversion of management and other resources and
significant adverse publicity, and could have a material adverse effect on the
Company's business, financial condition and results of operations.
-5-
<PAGE>
International Trade and Operations
In recent years, more than 40% of the Company's sales have been in foreign
countries. In addition, the Company operates a manufacturing facility in
Manchester, England. As a result, a significant portion of the Company's sales
and operations is subject to certain risks inherent in international trade and
operations, including tariffs and other barriers, political and economic
instability, potentially adverse tax consequences, foreign currency
fluctuations, transportation delays and labor disruptions.
Possible Volatility of Stock Price
From time to time during or after the offering of securities hereby, there
may be significant volatility in the market price of the Company's Common Stock.
Quarterly operating results of the Company, changes in general conditions of the
economy or the industry, or other developments affecting the Company, its
customers or its competitors could cause the market price of the Common Stock to
fluctuate substantially. The Company's expense levels are based, in part, on
expectations of future revenues. If revenue levels in a particular period do not
meet expectations, due to the timing of the receipt of orders from customers,
customer cancellations or delays of shipments, then operating results for that
period could be adversely impacted. In addition, the equity markets in general
have, on occasion, experienced significant price and volume fluctuations that
have affected the market prices for the securities of many companies (including
the Company) and often have been unrelated to the operating performance of such
companies.
Dependence on Key Employees
The Company is dependent upon the ability and experience of its executive
officers and technical, sales and support personnel. Competition for the
services of such individuals is intense and there can be no assurance that the
Company will continue to be able to attract, retain and motivate individuals
with the qualifications and experience necessary for success. The loss of key
existing employees, failure of current employees to perform as expected or
failure of the Company to attract and retain qualified employees could have a
material adverse effect on the Company's business, financial condition and
results of operations.
Certain Anti-Takeover Effects
The Company has a classified Board of Directors which could discourage
potential acquisition proposals, delay or prevent a change in control of the
Company, or limit the price that certain investors might be willing to pay in
the future for shares of Common Stock.
-6-
<PAGE>
No Dividends
It is the policy of the Company to retain earnings to support the growth
and expansion of the Company's business. Although the Company has paid dividends
in the past, there are no plans to resume paying dividends. In addition, the
payment of dividends is restricted by the Company's financing arrangements.
USE OF PROCEEDS
The shares of Common Stock offered by the Selling Stockholders pursuant to
this Prospectus are not being sold by the Company, and the Company will not
receive any proceeds from the sale thereof.
SELLING STOCKHOLDERS
The following table sets forth the names of the Selling Stockholders, all
of whom acquired their Shares in transactions effected on April 7, 1998, and the
number of shares of Common Stock which may be offered from time to time by each
of them pursuant to this Prospectus. Other than their ownership of the Company's
securities and the relationship of certain of the Selling Stockholders to the
Company as employees of the Company, none of the Selling Stockholders has had
any material relationship with the Company during the past three years. The
following table sets forth certain information with respect to the Selling
Stockholders as of June 18, 1998. Such information may change from time to time
and will be set forth as required in supplements to this Prospectus or
amendments to the Registration Statement of which this Prospectus forms a part.
Because the Selling Stockholders may offer all or only some of the Shares
pursuant to the offering contemplated by this Prospectus, and to the Company's
knowledge there currently are no agreements, arrangements or understandings with
respect to the number of Shares that may be sold or held by the Selling
Stockholders after completion of this offering, no estimate can be given as to
the number of shares of Common Stock that will be held by the Selling
Stockholders after completion of this offering. See "Plan of Distribution."
-7-
<PAGE>
<TABLE>
<CAPTION>
Number of Number of
Shares Shares
Beneficially That May
Name Owned(1) Be Offered(2)
- ---- ------------ -------------
<S> <C> <C>
Frank B. Wingate (3) 795,610 911,691
William E. Massaker 191,696 219,664
Heritage Investment Limited Partnership 87,955 100,787
William E. Gaines (3) 5,038 5,773
</TABLE>
- ----------------------
(1) To the Company's knowledge, each of the Selling Stockholders owns less than
one percent of the number of outstanding shares of Common Stock, except for
Frank B. Wingate, who holds 795,610 shares, or 2.8%, of all outstanding
shares of Common Stock.
(2) Includes additional shares of Common Stock, some or all of which may be
offered from time to time by the Selling Stockholders to the extent that
any of such additional shares are released from escrow to the Selling
Stockholders. Any such release is currently scheduled to occur on or after
October 8, 1999. In order to liquidate fractional shares that otherwise
might be payable to Selling Stockholders upon release of the escrow, the
escrow agent also may sell (for the accounts of such Selling Stockholders)
shares of Common Stock pursuant to this Prospectus.
(3) Messrs. Wingate and Gaines are employees of the Company.
PLAN OF DISTRIBUTION
The Selling Stockholders may sell all or a portion of the Shares offered
hereby from time to time on any exchange on which the securities then are
listed, on terms to be determined at the times of such sales. The Selling
Stockholders also may make private sales directly or through one or more
brokers. Alternatively, any of the Selling Stockholders may from time to time
offer the Shares beneficially owned by them through underwriters, dealers or
agents, who may receive compensation in the form of underwriting discounts,
commissions or concessions from the Selling Stockholders and/or the purchasers
of the Shares for whom they may act as agent.
To the extent required, the aggregate principal amount of the Shares to be
sold hereby, the names of the Selling Stockholders, the purchase price, the name
of any such agent, dealer or underwriter and any applicable commissions,
discounts or other terms constituting compensation with respect to a particular
offer will be set forth in an accompanying Prospectus Supplement. The aggregate
proceeds to the Selling Stockholders
-8-
<PAGE>
from the sale of the Shares offered by them hereby will be the purchase price of
such Shares less discounts and commissions, if any.
The Shares which may be offered hereby may be sold in one or more
transactions at fixed offering prices, which may be changed, or at varying
prices determined at the time of sale or by negotiation. Such prices will be
determined by the holders of the Shares or by agreement between such holders and
underwriters or dealers who may receive fees or commissions in connection
therewith. Until April 7, 2000, no Selling Stockholder may sell more than
150,000 of the Shares held for his or its account during any calendar month.
The outstanding Common Stock is listed for trading on the NYSE.
In order to comply with the securities laws of certain states, if
applicable, the Shares offered hereby will be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states the Shares offered hereby may not be sold unless they have been
registered or qualified for sale or exemptions from the registration or
qualification requirements are available and compliance with same is effected.
The Selling Stockholders and any broker-dealers, agents or underwriters
that participate with the Selling Stockholders in the distribution of the Shares
offered hereby may be deemed to be "underwriters" within the meaning of the
Securities Act, in which event any commissions or discounts received by such
broker-dealers, agents or underwriters and any profit on the resale of the
Shares offered hereby and purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
The Company and the Selling Stockholders have agreed to indemnify each
other against certain liabilities, including liabilities under the Securities
Act. The Company has agreed to pay all expenses incident to the offer and sale
of the Shares offered hereby by the Selling Stockholders to the public, other
than selling commissions and fees.
DESCRIPTION OF CAPITAL STOCK
The Company has authorized capital stock consisting of 60,000,000 shares of
Common Stock, par value $1.00 per share, of which 28,840,611 shares were
outstanding as of June 18, 1998. The Company also has outstanding from time to
time options to purchase shares of Common Stock.
The holders of Common Stock have no preemptive rights and the Common Stock
has no redemption, sinking fund or conversion provisions. Each share of Common
Stock is entitled to one vote on any matter submitted to the vote of
stockholders, to equal dividend rights and to equal rights in the assets of the
Company available for distribution to the holders of Common Stock upon
liquidation. All of the outstanding shares of Common Stock are, and the Shares
to be sold in connection with the offering made hereby will be, fully paid
-9-
<PAGE>
and nonassessable. The payment of dividends on, and the redemption, retirement,
purchase or other acquisition of, Common Stock by the Company is currently
prohibited by the Company's financing agreements.
BankBoston, N.A. serves as transfer agent for the Common Stock.
In accordance with the Massachusetts Business Corporation Law, the
Company's Board of Directors is divided into three classes with staggered
three-year terms. The Company believes that a classified Board of Directors
helps to assure the continuity and stability of the Board of Directors and the
Company's business strategies and policies as determined by the Board of
Directors, since a majority of the directors at any given time will have had
prior experience as directors of the Company. The Company believes that such
continuity and stability, in turn, will permit the Board of Directors to
represent more effectively the interests of its stockholders.
With a classified Board of Directors, at least two annual meetings of
stockholders, instead of one, generally will be required to effect a change in
the majority of the Board of Directors. As a result, a provision relating to a
classified Board of Directors may discourage proxy contests for the election of
directors or purchases of a substantial block of the Common Stock because the
provision could operate to prevent a rapid change in control of the Board of
Directors. The classification provision also could have the effect of
discouraging a third party from making a tender offer or otherwise attempting to
obtain control of the Company. Under Massachusetts law, a director on a
classified board may be removed by the stockholders of the corporation only for
cause.
The Company has elected not to be subject to the 1987 Massachusetts Control
Share Acquisition Act.
LEGAL MATTERS
Certain legal matters in connection with the Shares being offered hereby
will be passed upon by Nutter, McClennen & Fish, LLP, Boston, Massachusetts,
counsel to the Company.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the fiscal year ended
January 3, 1998, have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
-10-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses in connection with the offering to which this Registration
Statement relates, other than commissions, are to be borne by the Company and
are estimated as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission
Registration Fee............................................. $ 6,584
Accounting Fees.............................................. 5,000
Legal Fees................................................... 8,000
Printing Expenses............................................ 1,500
Miscellaneous Expense........................................ 1,916
Total........................................................ $23,000
=======
</TABLE>
Item 15. Indemnification of Directors and Officers.
The Company's By-laws, as amended to date, provide for indemnification of
officers and directors to the fullest extent permitted by the laws of the
Commonwealth of Massachusetts.
Section 67 of Chapter 156B of the Massachusetts General Laws, which is
applicable to the Company as a Massachusetts corporation, provides as follows:
"Indemnification of directors, officers, employees and other agents of a
corporation, and persons who serve at its request as directors, officers,
employees or other agents of another organization, or who serve at its request
in any capacity with respect to any employee benefit plan, may be provided by it
to whatever extent shall be specified in or authorized by (i) the articles of
organization or (ii) a by-law adopted by the stockholders or (iii) a vote
adopted by the holders of a majority of the shares of stock entitled to vote on
the election of directors. Except as the articles of organization or by-laws
otherwise require, indemnification of any persons referred to in the preceding
sentence who are not directors of the corporation may be provided by it to the
extent authorized by the directors. Such indemnification may include payment by
the corporation of expenses incurred in defending a civil or criminal action or
proceeding in advance of the final disposition of such action or proceeding,
upon receipt of an undertaking by the person indemnified to repay such payment
II-1
<PAGE>
if he shall be adjudicated to be not entitled to indemnification under this
section which undertaking may be accepted without reference to the financial
ability of such person to make repayment. Any such indemnification may be
provided although the person to be indemnified is no longer an officer,
director, employee or agent of the corporation or of such other organization or
no longer serves with respect to any such employee benefit plan.
"No indemnification shall be provided for any person with respect to any
matter as to which he shall have been adjudicated in any proceeding not to have
acted in good faith in the reasonable belief that his action was in the best
interest of the corporation or to the extent that such matter relates to service
with respect to an employee benefit plan, in the best interests of the
participants or beneficiaries of such employee benefit plan.
"The absence of any express provision for indemnification shall not limit
any right of indemnification existing independently of this section.
"A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or other agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or other agent of another organization or with
respect to any employee benefit plan, against any liability incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability."
The Company provides officers' and directors' liability insurance for its
officers and directors and has entered into indemnification agreements with each
of its executive officers providing contractual indemnification by the Company
to the fullest extent permissible under the laws of the Commonwealth of
Massachusetts.
The Company and the Selling Stockholders have agreed to indemnify each
other against certain liabilities under the Securities Act in connection with
this Registration Statement.
Item 16. List of Exhibits.
Exhibit No.
- -----------
<TABLE>
<S> <C>
* 2 Agreement and Plan of Merger by and among GenRad, Inc., Industrial
Computer Corporation, Frank B. Wingate, William E. Massaker,
William E. Gaines and Heritage Investment Limited Partnership dated
April 7, 1998.
* 5 Opinion of Nutter, McClennen & Fish, LLP
II-2
<PAGE>
* 23.1 Consent of Price Waterhouse LLP
* 23.2 Consent of Nutter, McClennen & Fish, LLP (included in Exhibit 5)
* 24.1 Power of Attorney (contained on Page II-5)
</TABLE>
- -------------
* Filed herewith.
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted against such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
II-3
<PAGE>
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering; and
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-4
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Westford, Massachusetts, on this 19th day of June 1998.
GENRAD, INC.
By: /s/ James F. Lyons
---------------------------------
James F. Lyons
President and Chief Executive Officer
Each person whose signature appears below on this Registration Statement
hereby constitutes and appoints James F. Lyons, Paul Pronsky, Jr. and
Constantine Alexander, and each of them, with full power to act without the
other, his or her true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities (until revoked in writing), to sign any and
all amendments (including post-effective amendments and amendments thereto) to
this Registration Statement on Form S-3 of the registrant, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary fully to all intents and purposes as
he or she might or could do in person, thereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C>
/s/ James F. Lyons June 19, 1998
- ----------------------------------------------
James F. Lyons
President, Chief Executive Officer and
Director
(Principal Executive Officer)
II-5
<PAGE>
/s/ Paul Pronsky, Jr. June 19, 1998
- --------------------------------------------
Paul Pronsky, Jr.
Vice President, Chief Financial Officer
and Secretary
(Principal Financial and Accounting Officer)
/s/ William S. Antle June 19, 1998
- --------------------------------------------
William S. Antle
Director
/s/ Russell A. Gullotti June 19, 1998
- -------------------------------------
Russell A. Gullotti
Director
/s/ Lowell B. Hawkinson June 19, 1998
- -------------------------------------
Lowell B. Hawkinson
Director
/s/ Richard G. Rogers June 19, 1998
- ------------------------------------
Richard G. Rogers
Director
/s/ William G. Scheerer June 19, 1998
- ------------------------------------
William G. Scheerer
Director
/s/ Adriana Stadecker June 19, 1998
- ------------------------------------
Adriana Stadecker
Director
/s/ Ed Zschau June 19, 1998
- ------------------------------------
Ed Zschau
Director
</TABLE>
II-6
EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
GENRAD, INC.,
INDUSTRIAL COMPUTER CORPORATION,
FRANK B. WINGATE, WILLIAM E. MASSAKER,
WILLIAM E. GAINES AND
HERITAGE INVESTMENT LIMITED PARTNERSHIP
DATED
APRIL 7, 1998
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I - THE MERGER; CLOSING; EFFECTIVE TIME................................... 1
1.1. The Merger............................................................ 1
1.2. The Closing........................................................... 1
1.3. Articles of Merger.................................................... 1
1.4. Further Assurances.................................................... 2
ARTICLE II - PURPOSES, CAPITALIZATION, CERTIFICATE OF INCORPORATION
AND BUSINESS OF THE SURVIVING CORPORATION............................. 2
2.1. Purposes of the Surviving Corporation................................. 2
2.2. Capitalization of the Surviving Corporation........................... 2
2.3. Articles of Organization.............................................. 2
2.4. By-Laws............................................................... 2
2.5. Tax Consequences...................................................... 2
2.6. Officers and Directors................................................ 3
ARTICLE III - CONSIDERATION FOR THE MERGER.......................................... 3
3.1. Conversion............................................................ 3
3.2. Stockholder Rights.................................................... 3
3.3. Dissenters' Rights.................................................... 4
3.4. Fractional Shares..................................................... 4
3.5. Lost Certificates..................................................... 5
3.6. Escrow Deposit........................................................ 5
ARTICLE IV - REPRESENTATIONS AND WARRANTIES........................................ 5
4.1. Representations and Warranties of the Company and the Stockholders.... 5
(a) Capitalization; Title to Shares............................ 5
(b) Options, Warrants, Rights, Etc............................. 5
(c) Organization, Good Standing and Power...................... 6
(d) Subsidiaries............................................... 6
(e) Effect of Agreement........................................ 6
(f) Power; Due Authorization................................... 7
(g) Financial Statements....................................... 7
(h) Loans, Notes, Accounts Receivable and Accounts Payable..... 7
(i) Customers.................................................. 8
(j) Absence of Certain Changes or Events....................... 8
(k) Taxes...................................................... 9
(l) Litigation................................................. 10
(m) Labor Matters.............................................. 10
(n) Intangible Property........................................ 11
(o) Books and Records.......................................... 12
(p) Licenses, Permits, Authorizations, Etc..................... 13
(i)
<PAGE>
(q) Applicable Laws........................................... 13
(r) Employee Benefit Plans.................................... 13
(s) Environmental Laws and Regulations........................ 16
(t) Insurance................................................. 18
(u) Title to Properties, Absence of Liens and Encumbrances.... 18
(v) Material Contracts........................................ 18
(w) Marketing Restrictions.................................... 20
(x) Product or Service Warranties............................. 20
(y) Rebates and Prepayments................................... 20
(z) Banks and Indebtedness.................................... 20
(aa) Minute Books.............................................. 21
(bb) Powers of Attorney and Suretyships........................ 21
(cc) Transactions with Related Parties......................... 21
(dd) Full Disclosure........................................... 21
(ee) Brokers................................................... 21
(ff) Pooling Interests; Tax-Free Reorganization................ 22
4.2. Representations and Warranties of GenRad............................. 22
(a) Organization, Good Standing and Power..................... 22
(b) Merger Stock.............................................. 22
(c) Power; Due Authorization.................................. 22
(d) SEC Filings............................................... 22
(e) Litigation................................................ 22
(f) Applicable Laws........................................... 22
(g) Brokers................................................... 23
(h) Effect of Agreement....................................... 23
(i) Full Disclosure........................................... 23
(j) Pooling Interests; Tax-Free Reorganization................ 23
(k) Absence of Certain Changes................................ 23
ARTICLE V - COVENANTS............................................................... 23
5.1. Stockholders' Approval.......................................... 23
5.2. Operation of Business........................................... 24
5.3. Maintain Properties............................................. 24
5.4. Books and Records............................................... 24
5.5. Encumbrances.................................................... 24
5.6. Compliance...................................................... 24
5.7. Filings; Other Action........................................... 24
5.8. Best Efforts.................................................... 25
5.9. Publicity....................................................... 25
5.10. Tax Free Reorganization......................................... 25
5.11. Accounting Basis................................................ 25
5.12. Employee Benefits and Contracts................................. 25
5.16. Further Action.................................................. 25
5.17 Additional Covenants of Frank B. Wingate and William E. Massaker 25
(ii)
<PAGE>
ARTICLE VI - CONDITIONS............................................................... 26
6.1. Conditions to Each Party's Obligation to Effect the Merger............. 26
(a) No Injunctions or Restraints; Illegality.................... 26
(b) Tax Opinion of Counsel for GenRad........................... 26
(c) Escrow Agreement............................................ 26
6.2. Conditions to Obligations of GenRad.................................... 26
(a) Representations and Warranties.............................. 26
(b) Performance of Obligations of the Company................... 27
(c) Employment Agreement........................................ 27
(d) Employee Resignation; Release Agreement..................... 27
(e) Opinion Letter of Counsel for the Company................... 27
(f) Dissenters; Stockholder Approval............................ 27
(g) Investment Representations.................................. 27
(h) No Material Adverse Change.................................. 27
(i) Filings and Consents........................................ 27
(j) Proceedings and Litigation.................................. 28
(k) Proceedings Satisfactory to Counsel......................... 28
(l) Non-Competition, Assignment and Non-Disclosure Agreements... 28
(m) Stockholder Letters......................................... 28
(n) Pooling of Interests........................................ 28
(o) Regulation D Safe Harbor.................................... 28
6.3. Conditions to Obligations of the Company............................... 29
(a) Representations and Warranties.............................. 29
(b) Performance of Obligations of GenRad........................ 29
(c) Opinion Letter of Counsel for GenRad........................ 29
(d) Registration Rights Agreement............................... 29
(e) Employment Agreement........................................ 29
(f) Absence of Changes or Events Having a Material Adverse Effect 29
(g) Filings and Consents........................................ 29
(h) Proceedings and Litigation.................................. 30
(i) Proceedings Satisfactory to Counsel......................... 30
(j) Pooling of Interests........................................ 30
ARTICLE VII - TERMINATION............................................................. 30
7.1. Termination by Mutual Consent.......................................... 30
7.2. Termination by Either the Company or GenRad............................ 30
7.3. Termination by GenRad.................................................. 30
7.4. Termination by the Company............................................. 31
7.5. Notice of Termination.................................................. 31
7.6. Effect of Termination and Abandonment.................................. 31
ARTICLE VIII - CERTAIN RIGHTS AND LIMITATIONS REGARDING THE MERGER
STOCK............................................................... 31
8.1. Restrictions on Sale or Transfer of Shares; Legend..................... 31
(iii)
<PAGE>
ARTICLE IX - INDEMNIFICATION; RIGHTS TO ESCROW SHARES................................. 32
9.1. Definitions............................................................ 32
9.2. Agreement of the Indemnitors to Indemnify.............................. 32
9.3. Procedures for Indemnification......................................... 34
9.4. Third Party Claims..................................................... 34
9.5. Other Rights and Remedies.............................................. 36
9.6. Limitations on Liability............................................... 36
(a) Time Limitations............................................ 36
(b) Damage Limitations and Exclusions........................... 36
9.7. Subrogation............................................................ 37
9.8. Cooperation............................................................ 37
9.9. Appointment of Indemnitor Representative; Acceptance; Effectiveness.... 37
9.10. Contribution by Indemnitors............................................ 38
9.11. Payment of Damages; Escrow Account..................................... 38
9.12. Release of Escrow Shares............................................... 39
ARTICLE X - MISCELLANEOUS............................................................. 39
10.1. Cooperation........................................................... 40
10.2. Payment of Expenses................................................... 40
10.3. Survival.............................................................. 40
10.4. Modification or Amendment............................................. 40
10.5. Waiver of Conditions.................................................. 40
10.6. Certification of Stockholder Approval................................. 40
10.7. Counterparts.......................................................... 40
10.8. Governing Law......................................................... 41
10.9. Arbitration; Judicial Proceedings..................................... 41
10.10. Jurisdiction.......................................................... 41
10.11. Notices............................................................... 41
10.12. Entire Agreement...................................................... 43
10.13. Captions.............................................................. 43
10.14. Severability.......................................................... 43
EXHIBIT 6.1(b) FORM OF TAX CERTIFICATES........................................... 45
EXHIBIT 6.2(c) FORM OF EMPLOYMENT AGREEMENT....................................... 46
EXHIBIT 6.2(d) FORM OF SEPARATION AND RELEASE AGREEMENT........................... 47
EXHIBIT 6.2(e) OPINION LETTER OF COUNSEL FOR THE COMPANY.......................... 48
EXHIBIT 6.2(g) FORM OF INVESTMENT LETTER.......................................... 50
EXHIBIT 6.2(l)(i) FORM OF NON-COMPETITION, ASSIGNMENT AND
NON-DISCLOSURE AGREEMENT........................................ 51
(iv)
<PAGE>
EXHIBIT 6.2(l)(ii) FORM OF ASSIGNMENT AND NON-DISCLOSURE AGREEMENT.................... 52
EXHIBIT 6.2(m) FORM OF STOCKHOLDER LETTER......................................... 53
EXHIBIT 6.3(c) OPINION LETTER OF COUNSEL FOR GENRAD............................... 54
EXHIBIT 6.3(d) REGISTRATION RIGHTS AGREEMENT...................................... 56
</TABLE>
INDUSTRIAL COMPUTER CORPORATION DISCLOSURE SCHEDULE
(v)
<PAGE>
THIS AGREEMENT AND PLAN OF MERGER (hereinafter, this "Agreement"), made
this 7th day of April, 1998, by and among GenRad, Inc., a Massachusetts
corporation ("GenRad"), Industrial Computer Corporation, a Georgia corporation
(the "Company"), Frank B. Wingate, a resident of Georgia, William E. Massaker, a
resident of Georgia, William E. Gaines, a resident of Georgia and Heritage
Investment Limited Partnership, a North Carolina limited partnership. GenRad and
the Company are sometimes hereinafter collectively referred to as the
"Constituent Corporations," and Messrs. Wingate, Massaker and Gaines and
Heritage Investment Limited Partnership are sometimes hereinafter each
individually referred to as a "Stockholder" and collectively referred to as the
"Stockholders."
WITNESSETH:
WHEREAS, GenRad and the Company desire that the Company be merged with and
into GenRad, with GenRad being the surviving corporation in the Merger, all upon
the terms and subject to the conditions of this Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
THE MERGER; CLOSING; EFFECTIVE TIME
1.1. The Merger. Subject to the terms and conditions of this Agreement and
in accordance with the laws of the States of Georgia and Massachusetts, at the
Effective Time (as defined in Section 1.3), the Company shall be merged with and
into GenRad and the separate corporate existence of the Company shall thereupon
cease (the "Merger"). GenRad shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "Surviving Corporation"). The Merger
shall have the effects specified in O.C.G.A. Section 14-2-1106 of the Georgia
Business Corporation Code (the "Georgia Corporation Code") and Chapter 156B,
Section 79 of the Massachusetts Business Corporation Law (the "Massachusetts
Corporation Law").
1.2. The Closing. The closing of the Merger (the "Closing") shall take
place at the offices of Nutter, McClennen & Fish, LLP, One International Place,
Boston, Massachusetts, at 10:00 a.m., Eastern Standard Time, on April 7, 1998
(or at such other place, time or date as may be mutually agreed upon by GenRad
and the Company) (the "Closing Date"). At the Closing, each of the parties shall
take all action and deliver all such documents, instruments, certificates,
agreements, securities and other items as may be requisite and are within its
power to perform in order to fulfill and observe all covenants, conditions and
agreements on its part to be performed, fulfilled and observed at or prior to
the Merger (and not theretofore accomplished), and/or to cause all conditions
precedent to the other parties' obligations hereunder to be satisfied in full.
1.3. Articles of Merger. On the Closing Date, if all the conditions to the
Merger set forth in Article VI shall have been fulfilled or waived in accordance
herewith and this Agreement shall not have been terminated in accordance with
Article VII, the parties hereto shall
<PAGE>
cause Articles of Merger meeting the requirements of Chapter 156B, Section 79 of
the Massachusetts Corporation Law to be properly executed or filed in accordance
with such Section and Articles of Merger meeting the requirements of O.C.G.A.
Section 14-2-1105 of the Georgia Corporation Code to be properly executed and
filed in accordance with such Section. The Merger shall become effective at the
time (the "Effective Time") of the filing of the Articles of Merger in
accordance with the Massachusetts Corporation Law or at such later time as the
parties hereto have agreed and designated in such Articles as the effective time
of the Merger.
1.4. Further Assurances. If, at any time after the Effective Time, the
Surviving Corporation shall determine or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any rights, properties
or assets as a result of, or in connection with, the Merger or otherwise to
carry out this Agreement, the officers and directors of the Surviving
Corporation shall be authorized to execute and deliver all such deeds, bills of
sale, assignments and assurances and to take and do all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights, properties or assets in
the Surviving Corporation or otherwise to carry out this Agreement.
ARTICLE II
PURPOSES, CAPITALIZATION, CERTIFICATE OF
INCORPORATION AND BUSINESS OF THE SURVIVING CORPORATION
2.1. Purposes of the Surviving Corporation. The purposes of the Surviving
Corporation shall be the purposes set forth in the Articles of Organization of
GenRad in effect immediately prior to the Effective Time.
2.2. Capitalization of the Surviving Corporation. The capitalization of the
Surviving Corporation shall be as set forth in the Articles of Organization of
GenRad in effect immediately prior to the Effective Time.
2.3. Articles of Organization. The Articles of Organization of the
Surviving Corporation shall be the Articles of Organization of GenRad in effect
immediately prior to the Effective Time.
2.4. By-Laws. The By-Laws of the Surviving Corporation shall be the By-Laws
of GenRad in effect immediately prior to the Effective Time.
2.5. Tax Consequences. It is intended that the Merger shall constitute a
tax-free reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code") and that this Agreement shall
constitute a "plan of reorganization" for the purposes of Section 368 of the
Code.
-2-
<PAGE>
2.6. Officers and Directors. At the Effective Time, the executive officers
and directors of the Surviving Corporation shall consist of the executive
officers and directors of GenRad serving immediately prior to the Effective
Time.
ARTICLE III
CONSIDERATION FOR THE MERGER
3.1. Conversion. At the Effective Time, each share of common stock of the
Company, $1.00 par value per share, other than Dissenting Shares (as hereinafter
defined), issued and outstanding immediately prior the Effective Time ("Company
Shares") shall, by virtue of the Merger and without any action on the part of
the holder thereof, be cancelled and converted into the right to receive that
holder's "Pro Rata Share" (as hereinafter defined) of the "Fixed Merger
Consideration" (as hereinafter defined), together with the contingent contract
right to receive that holder's Pro Rata Share of the "Contingent Merger
Consideration" (as hereinafter defined) upon the release of the Contingent
Merger Consideration from the escrow established herein. The following
definitions shall apply:
(a) Average Closing Price means the average of the closing prices of
GenRad common stock, $1.00 par value ("GenRad common stock"), on the New York
Stock Exchange as reported in The Wall Street Journal for the ten trading days
ending April 2, 1998.
(b) Total Merger Consideration means a number of shares of GenRad
common stock determined by dividing Thirty-six Million Five Hundred Ninety-six
Thousand Seven Dollars and Fifty-five Cents ($36,596,007.55) by the Average
Closing Price.
(c) Exchange Ratio means the Total Merger Consideration divided by the
number of Company Shares outstanding at the Effective Time.
(d) Fixed Merger Consideration means a number of shares of GenRad
common stock representing the Total Merger Consideration less the number of
shares of GenRad common stock representing the Contingent Merger Consideration.
(e) Contingent Merger Consideration means 10% of the Total Merger
Consideration plus an additional number of shares of GenRad common stock
determined by dividing One Million Dollars ($1,000,000) by the Average Closing
Price.
(f) Pro Rata Share is the share obtained by dividing the number of each
Stockholder's Company Shares by the total number of Company Shares outstanding
at the Effective Time.
3.2. Stockholder Rights. From and after the Effective Time, each
Stockholder shall cease to have any rights with respect to such Company Shares
(except such rights, if any, as they may have as dissenting stockholders under
the Georgia Corporation Code) and his or its sole rights (except as aforesaid)
shall be the right to receive such Stockholder's Pro Rata Share
-3-
<PAGE>
of the Fixed Merger Consideration and a contingent contract right to receive
such Stockholder's Pro Rata Share of the Contingent Merger Consideration upon
compliance with the terms of the following paragraph.
After the Effective Time, each holder of a certificate or certificates
representing Company Shares outstanding immediately prior to the Effective Time
(other than dissenting Stockholders) shall be entitled, upon surrender of the
same (duly endorsed for transfer), together with the other instruments and
agreements referred to in Article VI hereof, to receive in exchange therefor (i)
a certificate or certificates (as the holder requests) representing that
Stockholder's Pro Rata Share of the Fixed Merger Consideration and (ii) a
contingent contract right to receive such Stockholder's Pro Rata Share of the
Contingent Merger Consideration. Until so surrendered for exchange, each such
certificate representing Company Shares outstanding as aforesaid (other than
certificates of dissenting Stockholders) shall be deemed for all corporate
purposes, other than the payment of dividends, to evidence the ownership of the
number of shares of GenRad common stock to be delivered and distributed in
exchange therefor pursuant to this Article III. Unless and until any such
certificate representing Company Shares outstanding as aforesaid shall be so
surrendered, no dividend payable to holders of record of GenRad common stock at
or after the Effective Time shall be paid to the holder of such certificate, but
upon surrender thereof, there shall be paid to the holder of record immediately
prior to the Effective Time of such surrendered certificate the dividends
(without interest) that have theretofore become payable with respect to the
GenRad common stock, deliverable and distributable in exchange therefor pursuant
to this Article III.
3.3. Dissenters' Rights. Company Shares held by Stockholders who have
properly exercised dissenters' rights with respect thereto in accordance with
Sections 14-2-1301 through 14-2-1332 of the Georgia Corporation Code
(collectively, the "Dissenting Shares") shall not be converted into the right to
receive GenRad common stock, but such Stockholders shall be entitled to receive
payment of the appraised value of the Dissenting Shares in accordance with the
provisions of the Georgia Corporation Code, except that any Dissenting Shares
held by a stockholder who shall thereafter withdraw such demand for appraisal of
his Company Shares or otherwise lose the right to such payment as provided in
the Georgia Corporation Code, shall thereupon be deemed to have been converted
into, as of the Effective Time, the right to receive GenRad common stock,
without any interest thereon. If any holder of Company Shares shall be entitled
to be paid the "fair value" of his Company Shares, as provided in Article 13 of
the Georgia Corporation Code, the Company shall give GenRad notice thereof and
GenRad shall have the right to participate in all negotiations and proceedings
with respect to any such demands. The Company shall not, except with the prior
written consent of GenRad, voluntarily make any payment with respect to, or
settle or offer to settle, any such demand for payment.
3.4. Fractional Shares. No fractional shares of GenRad common stock shall
be issued in the Merger. In lieu of the issuance of any such fractional shares,
GenRad shall pay to each Stockholder who otherwise would be entitled to receive
a fractional share of GenRad common stock (after taking into account all GenRad
common stock into which such stockholder's Company Shares were converted
pursuant to this Article III) an amount in cash (rounded to the nearest whole
cent) determined by multiplying (i) the Average Closing Price by (ii) the
fraction
-4-
<PAGE>
of a share of GenRad common stock which such holder would otherwise be entitled
to receive pursuant to this Article III.
3.5. Lost Certificates. In the event any certificate representing Company
Shares (a "Certificate") shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming such Certificate to
be lost, stolen or destroyed and indemnity against any claim that may be made
against GenRad with respect to such Certificate, and, if required by GenRad, the
posting by such person of a bond in such amount as GenRad may determine is
reasonably necessary in connection with such indemnity, GenRad will issue in
exchange for such lost, stolen or destroyed Certificate the GenRad common stock
and cash in lieu of any fractional shares deliverable in respect thereof
pursuant to this Agreement.
3.6. Escrow Deposit. Promptly following the Closing, GenRad shall deposit
in escrow pursuant to Article IX hereof, the number of shares of GenRad common
stock constituting the Contingent Merger Consideration. Such shares shall be
issued in the name of the Escrow Agent (as hereinafter defined), "as Escrow
Agent under that Escrow Agreement dated" the Closing Date (as hereinafter
defined), or otherwise with equivalent effect. Such shares shall be held for the
purposes described in Article IX and the Escrow Agreement (as hereinafter
defined), and released to GenRad and/or the Stockholders in accordance with the
provisions of Article IX and the Escrow Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. Representations and Warranties of the Company and the Stockholders.
The Company and the Stockholders hereby, jointly and severally, represent and
warrant to GenRad, subject to the matters set forth in the Company Disclosure
Schedule delivered herewith, as follows:
(a) Capitalization; Title to Shares. The authorized capital stock of
the Company consists of 100,000 shares of common stock, $1.00 par value per
share. On the date of this Agreement, there are 86,873 shares of Company common
stock issued and outstanding. The Company Shares represent all of the issued and
outstanding shares of the Company's capital stock. The Company Shares have been
duly authorized and are validly issued, fully paid and non-assessable, and the
Company has no liability under the provisions of federal and state securities
laws by reason of the issuance thereof. Each Stockholder owns beneficially and
of record the number of Company Shares set forth next to such Stockholder's name
on Section 4.1(a) of the Company Disclosure Schedule and except as set forth on
Section 4.1(a) of the Company Disclosure Schedule, each Stockholder owns his or
its Company Shares free and clear of all liens, claims, restrictions and
encumbrances and all right, title or interest of others.
(b) Options, Warrants, Rights, Etc. Except as set forth in Section
4.1(b) of the Company Disclosure Schedule, there are no outstanding or
authorized subscriptions, options, warrants, calls, rights, commitments or any
other agreements of any character which obligate
-5-
<PAGE>
or may obligate the Company to issue any additional shares of its capital stock
or any securities convertible into or evidencing the right to subscribe for any
shares of such capital stock and there are no outstanding or authorized stock
appreciation, phantom stock or similar rights granted by the Company to
employees or third parties. Except as set forth in Section 4.1(b) of the Company
Disclosure Schedule, there are no voting trusts or any other agreements or
understandings with respect to the voting of the capital stock of the Company.
Except as set forth in Section 4.1(b) of the Company Disclosure Schedule, the
Company is not obligated, directly, indirectly, or contingently to purchase or
redeem any of its shares of capital stock and has not so redeemed any shares of
its capital stock during the past five years.
Additionally, the Company and the Stockholders hereby, severally and not
jointly, represent and warrant to GenRad, subject to the matters set forth in
the Company Disclosure Schedule delivered herewith, as follows:
(c) Organization, Good Standing and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Georgia. The Company has all requisite corporate power and authority to
own, operate and lease its properties and to carry on its business as now being
conducted. The Company is duly qualified and in good standing as a foreign
corporation in each jurisdiction where the failure to so qualify would have a
material adverse effect on the Company. All such jurisdictions are set forth in
Section 4.1(c) of the Company Disclosure Schedule. The Company has delivered to
GenRad complete and correct copies of its Articles of Incorporation (certified
by the Secretary of the State of Georgia) and By-Laws (certified by the
Secretary or an Assistant Secretary of the Company), as amended to date.
(d) Subsidiaries. Except as set forth in Section 4.1(d) of the Company
Disclosure Schedule, the Company does not own and has not during the last five
years owned any shares of capital stock or other securities of, or any other
interest in, nor does it control or has it controlled during the last five
years, directly or indirectly, any other corporation, association, joint
venture, partnership or other business organization.
(e) Effect of Agreement. Except as set forth in Section 4.1(e) of the
Company Disclosure Schedule, the execution, delivery and performance of this
Agreement by the Company and each of the Stockholders and the consummation of
the transactions contemplated hereby by the Company and the Stockholders do not
require the consent, approval or authorization of any other person, entity or
public authority. The Company is not in default under or in material violation
of any provision of its Articles of Incorporation or in material default under
or in violation of any provision of its By-Laws or any restriction, lien,
encumbrance, indenture, contract, agreement, lease, sublease, loan agreement,
note or other obligation or liability to which it is a party or by which it is
bound or to which its assets are subject. Except as set forth in Section 4.1(e)
of the Company Disclosure Schedule, neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) result in the acceleration of, or the creation in any party of the right to
accelerate, terminate, modify or cancel, any indenture, contract, agreement,
lease, sublease, loan agreement, note or other obligation or liability to which
the Company is a party
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<PAGE>
or by which it is bound or to which any of its assets are subject, or (ii)
conflict with or result in a default under or material violation of any
provision of its Articles of Incorporation or a material default under or
violation of any provision of its By-Laws or any restriction, lien, encumbrance,
indenture, contract, agreement, lease, sublease, loan agreement, note or other
obligation or liability to which it is a party or by which it is bound or to
which its assets are subject, or result in the creation of any lien or
encumbrance upon said assets.
(f) Power; Due Authorization. The Company and each of the Stockholders
have the power and authority to execute and deliver this Agreement and to
perform all of their respective obligations hereunder in accordance with the
terms hereof. All necessary corporate action to authorize the consummation of
the transactions contemplated by this Agreement on the part of the Company has
been duly and effectively taken, including, without limiting the generality of
the foregoing, the approval thereof by the Company's Board of Directors and the
Stockholders.
(g) Financial Statements. The Company has delivered to GenRad the
Company's unaudited balance sheets as at January 31, 1998, 1997 and 1996,
together with statements of income, stockholders' equity and cash flows for the
three fiscal years then ended (the "Financial Statements"), all of which have
been certified by the Controller of the Company as being true, accurate and
complete and as having been prepared in accordance with the Company's historical
practices applied consistently during the periods covered thereby and presenting
fairly in all material respects the financial condition of the Company at the
dates of said statements and the results of its operations for the periods
covered thereby. Except as set forth in Section 4.1(g) of the Company Disclosure
Schedule, the balance sheets of the Company, included in the Financial
Statements, make full and adequate provision for all debts, liabilities and
obligations (fixed and contingent, including unpaid federal, state or local
taxes) of the Company as of the date thereof, which are normally shown on a
balance sheet prepared in accordance with the Company's historical practices.
Except to the extent reflected or reserved against in such Financial Statements
or as set forth in Section 4.1(g) of the Company Disclosure Schedule, there are
no liabilities or obligations of the Company or related to its business or
operations, of any nature, whether accrued, absolute, contingent or otherwise,
and whether due or to become due, other than liabilities which have been
incurred in the ordinary course of business and which are not material in
relation to the Company's business taken as a whole.
(h) Loans, Notes, Accounts Receivable and Accounts Payable. The loans,
notes and accounts receivable of the Company reflected in the balance sheet of
the Company as at January 31, 1998 and all loans, notes and accounts receivable
arising after January 31, 1998, and prior to the Closing Date arose, and will
arise, from bona fide transactions in the ordinary course of business of the
Company and have been collected or as of the date hereof are believed by the
Company to be fully collectible within one hundred eighty (180) days after the
date they arose or were created at the aggregate recorded amount thereof less a
bad debt reserve of $200,000, which bad debt reserve shall be stated on said
balance sheet. The accounts payable of the Company reflected on such balance
sheet and all accounts payable arising after January 31, 1998, and prior to the
Closing Date arose, and will arise, from bona fide transactions in the ordinary
course of business of the Company. The method of computing all reserves as at
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the Closing Date will not change from the method of computing said reserves on
January 31, 1998. Except as set forth in Section 4.1(h) of the Company
Disclosure Schedule, on the Closing Date, the Company shall have no accounts or
loans receivable from any person, firm or corporation with which it is
affiliated, or from any of its directors, officers or employees except for
customary advances to personnel incurred in the ordinary course of business.
(i) Customers. There are no pending or, to the Company's or any
Stockholder's knowledge, threatened disputes of a material nature with customers
of the Company, nor, to the Company's knowledge, are present customers of the
Company intending to cease doing business with Company. The Company has not
received any notice and has no reason to believe that any customer is
dissatisfied with, or refuses to pay for, services performed by the Company,
where such dissatisfaction or refusal to pay would, individually or in the
aggregate, result in a material adverse effect on the Company or the Company's
relationship with such customer. Section 4.1(i) of the Company Disclosure
Schedule sets forth a true, correct and complete list of the names and addresses
of all customers who are currently receiving, or are under contract or other
commitment to receive, services from the Company.
(j) Absence of Certain Changes or Events.
(i) Since January 31, 1998, except as set forth in Section 4.1(j)(i) of
the Company Disclosure Schedule, the Company has not:
(A) incurred any material obligation or liability (contingent or
otherwise) except normal trade or business obligations incurred in the
ordinary course of business;
(B) discharged or satisfied any lien or encumbrance or paid any
material obligation or liability (contingent or otherwise), except
current liabilities of the Company outstanding on January 31, 1998, and
current liabilities incurred since January 31, 1998, in the ordinary
course of business;
(C) sold, transferred, leased or otherwise disposed of any
material amount of its assets or properties, except for fair
consideration in the ordinary course of business;
(D) cancelled or compromised any debt or claim;
(E) declared any dividend or made any payment or distribution to
the Stockholders;
(F) made any loan to or entered into any other transaction with
any officer, director or Stockholder of the Company;
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<PAGE>
(G) granted any material increase in the compensation of or
bonuses payable or paid to any of the Company's employees, directors or
consultants; or
(H) redeemed, issued or sold or agreed to redeem, issue or sell
any shares of its capital stock or options, warrants, pre-emptive or
other rights to purchase or acquire securities or capital stock of the
Company.
(ii) Since January 31, 1997, except as set forth in Section 4.1(j)(ii)
of the Company Disclosure Schedule or the Financial Statements of the
Company, the Company has not:
(A) mortgaged, pledged or subjected to lien, charge, security
interest or any other encumbrance any of its assets or properties;
(B) waived or released any rights of any material value;
(C) sold, assigned, transferred or granted any concessions,
leases, licenses, agreements, patents, inventions, trademarks,
servicemarks, trade names, copyrights or other intangible assets other
than in the ordinary course of business under or pursuant to contracts
with customers;
(D) disposed of or permitted to lapse any rights for the use of
any patent, trademark, service mark, trade name or copyright or
disposed of or disclosed to any person not an employee, consultant or
adviser any trade secret, process or know-how not theretofore a matter
of public knowledge;
(E) except as set forth in Section 4.1(v) of the Company
Disclosure Schedule, entered into any arrangement, agreement or
undertaking involving an obligation of, or expenditure by, the Company
in excess of $5,000 which is not terminable on thirty (30) days' or
fewer notice without cost or liability (including, without limitation,
any payment of or promise to pay any bonus or special compensation)
with employees or other third parties;
(F) suffered the occurrence of any event or events which,
individually or in the aggregate, has or have resulted in a material
adverse change in the Company's operations, prospects, earnings,
assets, properties or business, or in the Company's condition,
financial or otherwise; or
(G) entered into any other transaction, contract or commitment,
other than in the ordinary course of business.
(k) Taxes. Except as set forth in Section 4.1(k) of the Company
Disclosure Schedule, the Company has (a) in all material respects correctly
prepared and timely filed all returns, declarations, reports, estimates,
information returns and statements ("Returns") required
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to be filed with respect to all federal, state, local and foreign income (gross
or net), gross receipts, sales, use, ad valorem, transfer, franchise, profits,
license, withholding, payroll, stamp, excise, severance, occupation, property or
other taxes, customs, duties, fees, assessments or other taxes, together with
any interest and penalties or other additions, (b) timely and properly paid all
such taxes that are due and payable, (c) established on its books and records
reserves that are adequate for the payment of all such taxes accrued but not yet
due and payable and (d) complied in all material respects with all laws, rules
and regulations relating to the withholding and payment of all taxes with
respect to employees' wages.
To the knowledge of the Company or the Stockholders, except with
respect to matters underlying the Tax Claims (as hereinafter defined), there are
no actual or proposed tax deficiencies, assessments or adjustments with respect
to the Company or any assets, property or operations of the Company. Except as
set forth in Section 4.1(k) of the Company Disclosure Schedule, (a) there are no
liens for taxes upon the assets of the Company, (b) the Company has not
requested any extension of time within which to file any tax return that has not
been filed, (c) there are no waivers or consents given by the Company regarding
the application of the statute of limitations with respect to any taxes or tax
returns and (d) no federal, state, local or foreign audits or other
administrative proceedings or court proceedings are pending with regard to any
taxes or tax returns.
The Company has not filed a consent pursuant to Section 341(f) of the
Code or agreed to have Section 341(f)(2) of the Code applied to any disposition
of a subsection (f) asset (as such term is defined in Section 341(f)(4) of the
Code) owned by the Company. The Company is not required to include in income any
adjustment pursuant to Section 481(a) of the Code by reason of a voluntary
change in accounting method initiated by the Company (unless so directed by
GenRad), nor does the Company or any Stockholder have any knowledge that the
Internal Revenue Service (the "IRS") has proposed any such adjustment or change
in accounting method. The Company is not a party to any agreement, contract or
arrangement that would result, separately or in the aggregate, in the payment of
"excess parachute payments" within the meaning of Section 280G of the Code.
(l) Litigation. There are no actions, suits, proceedings or
investigations pending or, to the knowledge of the Company or the Stockholders,
threatened against the Company, at law or in equity, or before or by any
federal, state, municipal or other governmental or nongovernmental department,
commission, board, bureau, agency or instrumentality and there are no
outstanding or unsatisfied judgments, orders, decrees or stipulations against
the Company or, to the knowledge of the Company or the Stockholders, to which
the Company may become a party. Neither the Company nor any of the Stockholders
has reason to believe that any such action, suit, proceeding or investigation
may be brought or threatened against the Company. Neither the Company nor any
officer, director or employee of the Company, has been permanently or
temporarily enjoined by any order, judgment or decree of any court or any
governmental agency, authority or body from engaging in or continuing any
conduct or practice in connection with the business, assets, or properties of
the Company.
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<PAGE>
(m) Labor Matters. There are no controversies pending or, to the
knowledge of the Company or any Stockholder, threatened between the Company and
any employees of the Company. The Company has complied in all material respects
with all laws relating to employees, including any provisions thereof relating
to wages, hours, collective bargaining and the payment of withholding and social
security and similar taxes, and the Company is not liable for any material
arrears of wages or any taxes or penalties for failure to comply with any of the
foregoing. The Company has no knowledge of any organizational efforts presently
being made or threatened by or on behalf of any labor unions with respect to
employees of the Company. A true and complete list of all of the Company's
officers and employees and their respective salaries, wages, other compensation
and positions is set forth in Section 4.1(m) of the Company Disclosure Schedule.
The Company's personnel policies and manuals are listed in Section 4.1(m) of the
Company Disclosure Schedule and true and complete copies of such documents have
been delivered to GenRad. Except as set forth in Section 4.1(m) of the Company
Disclosure Schedule, no employee or consultant of the Company shall have the
right to receive from the Surviving Corporation or GenRad a severance payment or
other payment in the nature thereof in the event his or her employment is
terminated by the Surviving Corporation following the Merger (except any such
right granted by GenRad or pursuant to any agreement or policy instituted by
GenRad).
(n) Intangible Property. As used in this Agreement, "Intangible
Property" means all of the Company's (i) patents, patent applications, patent
disclosures and improvements thereto; (ii) trademarks, service marks, logos,
trade names, and corporate names and registrations and applications for
registration thereof; (iii) copyrights and registrations and applications for
registration thereof; (iv) computer software, data and documentation; (v) trade
secrets and confidential business information (including ideas, formulas,
compositions, inventions (whether patentable or unpatentable and whether or not
reduced to practice); know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, financial, marketing and business
data, pricing and cost information, business and marketing plans, and customer
and supplier lists and information); (vi) other proprietary rights; and (vii)
copies and tangible embodiments thereof (in whatever form or medium). Section
4.1(n) of the Company Disclosure Schedule contains (x) a complete and correct
list and, where appropriate, a summary description of all Intangible Property
described in (i), (ii), (iii) or (iv) of the preceding sentence and all other
material items of Intangible Property that are owned or licensed by the Company
or used in the conduct of the business and (y) a true, correct and complete list
of all licenses or similar agreements or arrangements to which the Company is a
party, either as licensee or licensor or sublicensee or sublicensor, with
respect to the Intangible Property. Except as disclosed in Section 4.1(n) of the
Company Disclosure Schedule:
(i) the Company is either the sole and exclusive owner of or holds
an exclusive, perpetual, worldwide, fully paid or royalty free, fully
transferable (with right to sublicense) license to, all right, title
and interest in and to the Intangible Property, free and clear of all
liens, security interests, charges, encumbrances, moral rights or other
adverse claims;
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<PAGE>
(ii) the Company has the sole and exclusive right and authority to
use the Intangible Property in connection with the conduct of its
business in the manner presently conducted, and such use does not
conflict with, infringe upon, contribute to or induce the infringement
of, or violate any rights of any other person, corporation or entity;
(iii) the Company has not received notice of, and knows of no
reasonable basis for, a pleading or threatened claim, interference
action or other judicial or adversarial proceeding against the Company
that any of the operations, activities, products, services or
publications of the Company infringe or will infringe any patent,
trademark, servicemark, trade name, copyright, trade secret or other
proprietary right of a third party, or that it is illegally or
otherwise using the trade secrets, formulae or proprietary rights of
others;
(iv) there are no outstanding nor, to the knowledge of the Company
or any Stockholder, are there any threatened, disputes or other
disagreements with respect to any licenses or similar agreements or
arrangements described in Section 4.1(n) of the Company Disclosure
Schedule or with respect to infringement by a third party of any of the
Intangible Property;
(v) the Intangible Property owned or licensed by the Company is
sufficient to conduct and continue conducting the Company's business as
presently conducted;
(vi) the Company has taken all steps reasonably necessary to
protect its continuing right, title and interest in and to the
Intangible Property and its continued use of the Intangible Property,
provided however, that GenRad acknowledges that the Company has not
filed any patents or copyright registrations to protect its rights to
the Intangible Property;
(vii) the Company has the exclusive, unencumbered, worldwide right
to use, produce, market, sell and distribute its Shop Floor Data
Manager product ("SFDM") or its proposed JAVA based manufacturing
execution system, and the Company has not granted to any other person
or entity any such rights to use, produce, market, sell or distribute
such products now or at any time in the future, and such use,
production, marketing, selling or distribution does not conflict with,
infringe upon, contribute to or induce the infringement of, or violate
any rights of any other person, corporation or entity; and
(viii) the Company knows of no third party infringing upon or
otherwise violating, or threatening to infringe upon or otherwise
violate, any of the Intangible Property in which the Company has
ownership rights.
(o) Books and Records. The books and records of the Company have
been, are and shall be kept in all material respects complete and
correct, accurately reflecting the basis for the financial condition
and results of operations of the Company set forth in its Financial
Statements.
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<PAGE>
(p) Licenses, Permits, Authorizations, Etc. The Company has
received all material approvals, authorizations, consents, licenses,
orders, governmental security clearances and registrations and permits
of all governmental agencies, whether federal, state or local, United
States or foreign, required to permit the operation of its business as
presently conducted.
(q) Applicable Laws. The Company has complied and is in compliance
with all United States and foreign laws, rules, regulations,
ordinances, decrees and orders applicable to the operation of its
business as presently conducted and/or its owned or leased properties,
the failure to comply with which would materially adversely affect the
operations, prospects, earnings, assets, properties or business of the
Company.
(r) Employee Benefit Plans.
(i) Employee Plans. Section 4.1(r) of Company Disclosure
Schedule contains a true, correct and complete list of all
pension, profit sharing, benefit, retirement, deferred
compensation, welfare, insurance, disability, bonus, vacation pay,
severance pay and other similar plans, programs and agreements,
including without limitation all "employee benefit plans" within
the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA"), whether reduced to writing or not,
other than any "multiemployer plan," as such term is defined in
Section 4001(a)(3) of ERISA, relating to the Company's employees,
or maintained or contributed to (including any such plans,
programs and agreements under which the Company had an obligation
to contribute) at any time since its inception by the Company or
by any other member (hereinafter, an "Affiliate") of any
controlled group of corporations, group of trades or businesses
under common control, affiliated service groups or other entity
that could be treated as a single employer with the Company (as
defined for purposes of Section 414(b), (c), (m) and/or (o),
respectively, of the Code) (the "Employee Plans") and, except as
set forth in Section 4.1(r) of the Company Disclosure Schedule,
the Company has no obligations, contingent or otherwise, past or
present, under the terms of or with respect to any Employee Plan
or under law applicable thereto.
(ii) Prohibited Transactions. Neither the Company nor any of
its Affiliates, directors, officers, employees or agents, or any
"party in interest" or "disqualified person," as such terms are
defined in Section 3 of ERISA and Section 4975 of the Code,
respectively, has, with respect to any Employee Plan, engaged in
or been a party to any nonexempt "prohibited transaction," within
the meaning of Section 4975 of the Code or Section 406 of ERISA,
in connection with which, directly or indirectly, the Company or
any of its Affiliates, directors, officers, employees, or agents
of any Employee Plan or any related funding medium could be
subject to either a penalty or a tax, including, without
limitation, a tax assessed pursuant to Section 502(i) of ERISA or
a tax imposed by Section 4975 of the Code.
(iii) Compliance. With respect to each Employee Plan, the
Company and its Affiliates are, and during the 60 consecutive
calendar month period ending on the
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Closing Date have been, in compliance in all material respects
with the requirements prescribed by any and all statutes, orders
or governmental rules or regulations in effect now or to the
extent applicable, during such 60 month period, including, but not
limited to, ERISA and the Code, applicable to such Employee Plans.
The Company and its Affiliates have performed in all material
respects all obligations required to be performed by them under,
and are not in violation of, and there has been no default or
violation by any other party with respect to, any of the Employee
Plans. Except as set forth in Section 4.1(r) of the Company
Disclosure Schedule: (A) none of the Employee Plans which is
subject to Title IV of ERISA has been or will be terminated in
whole or in part within the meaning of ERISA or the Code; (B) no
liability has been or will be incurred through, no event or
circumstance has occurred and no event or circumstance will occur
prior to, the Closing Date, which could result in such a liability
being asserted by the Pension Benefit Guaranty Corporation
("PBGC") with respect to any Employee Plan (other than the payment
of annual premiums under Section 4007 of ERISA or benefits payable
in accordance with the terms of such Employee Plan); (C) no
Employee Plan that is subject to Part 3 of Subtitle B of Title I
of ERISA or Section 412 of the Code, or both, has incurred any
"accumulated funding deficiency" (as defined in ERISA), whether or
not waived; (D) neither the Company nor any Affiliate has failed
to pay any amounts due and owing as required by the terms of any
Employee Plan; (E) there has been no "reportable event" within the
meaning of Section 4043 of ERISA, or any event described in
Section 4063(a) of ERISA, with respect to any Employee Plan, other
than as disclosed in Section 4.1(r) of the Company Disclosure
Schedule; (F) neither the Company nor any Affiliate has failed to
make any payment to an Employee Plan required under Section 302 of
ERISA nor has any lien ever been imposed under Section 302(f) of
ERISA; (G) neither the Company nor any Affiliate has adopted an
amendment to any Employee Plan which requires the provision of
security under Section 307 of ERISA; and (H) the PBGC has not
instituted any proceedings to terminate an Employee Plan pursuant
to Section 4042 of ERISA or otherwise.
(iv) Multiemployer Plans. Section 4.1(r) of the Company
Disclosure Schedule lists each and every multiemployer plan as
that term is defined in Section 4001(a)(3) of ERISA
("Multiemployer Plan") to which the Company or its Affiliates
contribute or are required to contribute or have ever been
required to contribute. No Multiemployer Plan listed in Section
4.1(r) of the Company Disclosure Schedule is in "reorganization"
(as defined in Section 4241 of ERISA) or is "insolvent" (as
defined in Section 4245 of ERISA). Neither the Company nor any
Affiliate has withdrawn or is reasonably expected to withdraw from
a Multiemployer Plan in a complete or partial withdrawal which has
resulted or will result in "withdrawal liability," whether or not
assessed, as defined for purposes of Part 1 of Subtitle E of Part
IV of ERISA, with respect to any such plan which has not been
satisfied in full. The Company and its Affiliates have made all
such contributions to any Multiemployer Plan as are required
through the Closing Date under the terms of any such applicable
law; and no event has occurred, or will occur prior to the Closing
Date, which could give rise to any other liability (other than a
continuing obligation to contribute to such plan(s) under the
terms
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<PAGE>
of any applicable collective bargaining agreements) on the part of
the Company or GenRad, or their Affiliates, officers, employees or
directors with respect to such plan(s).
(v) Retiree Benefits. Except as set forth in Section 4.1(r) of
the Company Disclosure Schedule, no Employee Plan provides
benefits, including, without limitation, health or life insurance
benefits, for retirees. No such plan, if any, contains any
provisions, and no commitments, agreements or other circumstances
exist, which in any way would limit or prohibit GenRad from
amending any such plan, including, without limitation, amending
any such plan to reduce or eliminate such retiree benefits.
(vi) Copies of Employee Plans and Related Documents. The
Company has previously delivered to GenRad true and complete
copies of all Employee Plans which have been reduced to writing
and written descriptions of all Employee Plans which have not been
reduced to writing, all agreements, including trust agreements and
insurance contracts, related to such Employee Plans, and the
Summary Plan Descriptions and Summary of Material Modifications
for each Employee Plan communicated to employees. With respect to
each Employee Plan that is an "employee pension benefit plan," as
such term is defined in Section 3(1) of ERISA ("Pension Benefit
Plan"), true and complete copies of (A) the annual actuarial
valuation reports for the last five years, (B) the Form 5500 and
Schedule A and B thereto, filed for the last five years, (C) the
nondiscrimination coverage and participation test data and results
for each such plan during such period, and (D) any filing made
with the PBGC, IRS or Department of Labor, or any correspondence
with or from such agencies, regarding the termination of any such
Pension Benefit Plan, have been delivered to GenRad.
(vii) Qualifications. Each Employee Plan intended to qualify
under Section 401(a) of the Code has been determined by the
Internal Revenue Service to so qualify and continues to so
qualify, and the trusts created thereunder have been determined to
be exempt from tax under the provisions of Section 501(a) of the
Code, and continues to be so exempt. Each Employee Plan which is a
funded welfare benefit plan intended to be exempt from tax under
the provisions of Section 501(c)(9) of the Code has been
determined by the Internal Revenue Service to be so exempt and
continues to be so exempt. Copies of all determination letters
with respect to each such Employee Plan have been previously
delivered by the Company to GenRad, and nothing has occurred, or
will occur prior to the Closing Date, which might cause the loss
of such qualification or exemption, no such Employee Plan has been
operated in a manner which would cause it to be disqualified in
operation, and all such Employee Plans have been administered in
compliance with and consistent with all applicable requirements of
the Code and ERISA, including, without limitation, all reporting,
notice, and disclosure requirements.
(viii) Funding Status, Etc.
(A) Except as set forth in Section 4.1(r) of the
Company Disclosure Schedule, neither the Company nor any
Affiliate would be liable for (1) any amount pursuant to
Section 4062, 4063, 4064, 4068 or 4069 of ERISA if any of the
Employee
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Plans which are subject to Title IV of ERISA were to terminate
or (2) any amount pursuant to Section 4201 of ERISA if a
complete or partial withdrawal from any Multiemployer Plan
listed in Section 4.1(r) of the Company Disclosure Schedule
occurred before the Closing. Except as set forth in Section
4(r) the Company Disclosure Schedule, all Employee Plans which
are subject to Title IV of ERISA have no amount of unfunded
benefit liabilities, as defined in Section 4001(a)(18) of
ERISA. There is no unpaid contribution due with respect to the
plan year of any Defined Benefit Plan ended prior to the
Closing Date, as required under the minimum funding
requirements of Section 412 of ERISA.
(B) With respect to each Employee Plan which is a
qualified defined contribution pension, profit-sharing or
stock bonus plan, as defined in ERISA, all employer
contributions accrued for plan years ending prior to the
Closing Date under the plan terms and applicable law have been
made by the Company.
(C) All premiums or other payments required by the
terms of any group or individual insurance policies and
programs maintained by the Company and covering any present or
former employees of the Company with respect to all periods up
to and including the Closing Date have been fully paid for the
length of the obligation except for payments not yet due in
the normal course of business. The Company shall be
responsible for any welfare benefits not fully covered by
third-party insurance policies or programs relating to claims
incurred by present or former employees of the Company on or
before the Closing Date.
(ix) Claims and Litigation. Except as set forth in Section
4.1(r) of the Company Disclosure Schedule, to the knowledge of the
Company or the Stockholders there are no threatened or pending
claims, suits or other proceedings by present or former employees
of the Company or its Affiliates, plan participants, beneficiaries
or spouses of any of the above, the Internal Revenue Service, the
PBGC, the Department of Labor, or any other person or entity
(including claims against the assets of any trust) involving any
Employee Plan, or any rights or benefits thereunder, other than
ordinary and usual claims for benefits by participants or
beneficiaries including claims pursuant to domestic relations
orders.
(x) No Implied Rights. Nothing expressed or implied herein
shall confer upon any past or present employee of the Company or
its Affiliates, his or her representatives, beneficiaries,
successors and assigns, or upon any collective bargaining agent,
any rights or remedies of any nature, including, without
limitation, any rights to employment or continued employment with
the Company, GenRad, or any successor or affiliate.
(s) Environmental Laws and Regulations.
(i) Compliance with Environmental Laws. Except as set forth in
Section 4.1(s)(i) of the Company Disclosure Schedule (i) the
Company is not in material violation
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of any applicable federal, state or local law, regulation, rule,
ordinance, permit (including, without limitation, any
authorization, approval, registration and license, collectively,
"Permits"), administrative order, judicial decree or the like,
including, without limitation, The Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. Sec. 9601 et seq., as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 (P.L. 99-499 42
U.S.C.), the Hazardous Materials Transportation Act (49 U.S.C.
ss.1801, et seq.), the Resource Conservation and Recovery Act (42
U.S.C. ss.6901, et seq.), the Clean Air Act (42 U.S.C. ss.7401 et
seq.), the Clean Water Act (33 U.S.C. ss.1251, et seq.) as
amended, the Rivers and Harbors Act (33 U.S.C. ss.401 et seq.), as
amended, and any so-called "Superlien law"; (collectively,
"Environmental Laws") relating to (A) pollution or protection of
the environment, natural resources or human health from any
Hazardous Substance (as hereinafter defined) or (B) nuisance,
trespass or "toxic tort", so called, including, without
limitation, Environmental Laws relating to emissions, discharges,
releases or threatened releases of any Hazardous Substance or
otherwise relating to the manufacture, processing, importation,
distribution, use, generation, treatment, storage, disposal,
transportation or handling of any Hazardous Substance. "Hazardous
Substance" as used herein means any chemical, pollutant,
contaminant, waste (including, without limitation, toxic,
hazardous, infectious, sanitary, solid, radioactive or petroleum
waste, collectively, "Waste"), toxic substance, hazardous
substance, extremely hazardous substance, hazardous material,
radioactive material, oil or petroleum product, as such terms are
used under any applicable Environmental Laws relating to pollution
or protection of the environment, natural resources or human
health.
(ii) Permits. The Company possesses and is in compliance in
all material respects with all Permits required under applicable
Environmental Laws in connection with the Company's business and
operations or its assets and properties and each of such Permits
is listed in Section 4.1(s)(ii) of the Company Disclosure
Schedule.
(iii) Environmental Claims. Except as set forth in Section
4.1(s)(iii) of the Company Disclosure Schedule, there are no
Environmental Claims (as hereinafter defined) pending or, to the
Company or any Stockholder's knowledge, threatened against the
Company. "Environmental Claim" as used herein means any civil,
criminal or investigative action, suit, litigation, communication
(written or oral), demand, claim, hearing, citation, notice,
warning, consent decree, contract right (including, without
limitation, right of indemnification), notice of violation,
investigation, judgment or order by any person or entity alleging,
claiming, concerning or finding liability or potential liability
(including, without limitation, liability or potential liability
for investigatory costs, clean-up costs, governmental response or
oversight costs, natural resources damages, property damages,
penalties, personal injuries, death or any other damages or costs,
including, without limitation, litigation and settlement costs and
consultants' and attorneys' fees) arising out of, based on or
resulting from, in whole or in part, (A) the actual or alleged
presence, threatened release, release, emission, disposal,
storage, treatment, transportation, generation, manufacture or use
of any Hazardous Substance at
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or from any location or (B) circumstances forming the basis of any
violation of any Environmental Laws.
(iv) Hazardous Substances. Except as disclosed in Section
4.1(s)(iv) of the Company Disclosure Schedule, no Hazardous
Substances are used, generated or disposed of in connection with
the Company's business.
(t) Insurance. The Company has adequate insurance covering its
business and operations and all of its tangible assets, including,
without limitation, product liability insurance, motor vehicle and
comprehensive general liability insurance, workman's compensation
insurance, and fire and extended coverage insurance, and will maintain
such insurance coverage in full force and effect, at its expense, until
the Closing Date. The Company is the sole owner of each such policy.
Such insurance is in at least such amounts and insures against at least
such risks as are generally insured against by companies of similar
size engaged in the same or a similar business. The Company has not
been refused any insurance during the last three years and is in
compliance with all requirements of the insurance companies. The
Company has not received any notice or other communication from any
issuer of the insurance policies cancelling or materially amending any
of the insurance policies, materially increasing any deductibles or
retained amounts thereunder, or materially increasing the annual or
other premiums payable thereunder, and, to the Company's knowledge, no
such cancellation amendment or increase of the deductibles, retainages
or premiums is threatened.
(u) Title to Properties, Absence of Liens and Encumbrances. Except
as set forth in Section 4.1(u) of the Company's Disclosure, the Company
has good and marketable title to, and owns outright, all of its
properties and assets (including, but not limited to, the assets
reflected in the Company's balance sheet as of January 31, 1998),
except for those disposed of in the ordinary course of business, and
none of such assets is encumbered by any mortgage, lien, claim or
encumbrance except liens, claims or encumbrances reflected in said
balance sheet, and liens for taxes which are not yet due and payable.
All leases pursuant to which the Company leases any real or personal
property are valid and binding in accordance with their respective
terms, and there is not under any such lease any existing default by
the Company, event of default or event which, with notice and/or lapse
of time, would constitute a default.
(v) Material Contracts. Section 4.1 (v) of the Company Disclosure
Schedule lists all material contracts, instruments, agreements or
commitments (whether oral or written) relating to the conduct of the
business of the Company (the "Contracts"). The Company has made
available to GenRad true and correct copies of each Contract and a
written description, accurate in all material respects, of each oral
Contract so listed. Without limiting the generality of the foregoing,
the term Contract includes all contracts, agreements, instruments of
the following types to which the Company is a party:
(i) contract which involves or may involve future expenditures
or obligations on the part of the Company of more than $10,000 or
any such contract continuing over a period of more than six months
from its date, or any contract for the sale of products or
rendering of services other than in the ordinary course of
business;
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(ii) contract for the employment of any individual and
consulting agreement with individuals or entities;
(iii) bonus, incentive, deferred compensation, severance pay,
pension, profit sharing, retirement, death benefit, employee stock
purchase, stock option, employee benefit, employee incentive,
fringe benefit, medical or dental insurance or plan, life
insurance, vacation pay, severance pay or similar or like plan,
agreement or arrangement, together with a list of all employees or
former employees currently receiving benefits thereunder;
(iv) collective bargaining agreement or other agreement with
any labor union or other organization (the Company hereby
represents that no other such agreement has been requested by, or
is under discussion by management with, any group of employees or
others);
(v) lease of any real or personal property or deeds or other
instruments representing ownership of any real property;
(vi) mortgage, security agreement, chattel mortgage or
conditional sales agreement or any similar instrument or
agreement;
(vii) agreement, indenture or other instrument relating to the
borrowing of money, or the guaranty of any obligation, including,
without limitation, for the borrowing of money, and a list of all
bank accounts identifying authorized signatories;
(viii) joint venture, partnering, strategic alliance or other
similar agreement;
(ix) sales representative or distributorship agreement;
(x) dealer, reseller, value added reseller, agency or
franchise agreement;
(xi) agreement not made in the ordinary and normal course of
business;
(xii) agreement of any nature with officers, directors,
stockholders or other affiliates of the Company, whether any such
person's interest is direct or indirect;
(xiii) agreement which requires prior approval in connection
with a change in control of the Company or which will be in
default or which gives rise to termination rights following a
change in control of the Company;
(xiv) agreement which provides, initially or contingently, for
the escrow or release to a third party of any source code of the
Company;
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(xv) agreement which involves the licensing by or to the
Company of any software or other technology, know-how, trade
secret, confidential or proprietary information, which is
necessary to the conduct of, or material to, the business of the
Company;
(xvi) non-competition agreement,
confidentiality/non-disclosure or assignment of inventions
agreement (both for the benefit of and/or restricting the
Company);
(xvii) property, casualty, director and officer liability and
other forms of insurance; or
(xviii) agreements which in any material way limit the freedom
of the Company to compete in any geographic area, business or
product line or with any person or entity.
All Contracts referred to in Section 4.1(v) of the Company Disclosure Schedule
are valid and enforceable by the Company in accordance with their respective
terms for the periods stated therein and except as disclosed in Section 4.1(v)
of the Company Disclosure Schedule, there are not under any of them existing
defaults or events of default or events which with notice and/or lapse of time
would constitute defaults. Consummation of the transactions contemplated by this
Agreement will not result in any material default by the Company under,
termination of or a right of any third party to terminate, any of the Contracts.
(w) Marketing Restrictions. Except as set forth in Section 4.1(w) of
the Company Disclosure Schedule, the Company is not restricted from carrying out
its business and operations anywhere in the United States or the world by any
agreement, license or by court decree in any action to which the Company was or
is a party.
(x) Product or Service Warranties. Except as set forth in Section
4.1(x) of the Company Disclosure Schedule, the Company has not given any third
party any express written or oral product or service warranties relating to
products licensed or services provided by the Company. The Company has not
licensed any material amount of products or performed any material level of
services which fail to comply with any warranty given by the Company with
respect to such products or services.
(y) Rebates and Prepayments. Except as disclosed in Section 4.1(y) of
the Company Disclosure Schedule, the Company has not made any commitment to
grant any rebates or discounts to its customers other than as normal and
ordinary trade terms. Included as Section 4.1(y) of the Company Disclosure
Schedule is a list of all prepayments or deposits received by the Company from
customers for services to be performed after the Closing Date.
(z) Banks and Indebtedness. Section 4.1(z) of the Company Disclosure
Schedule contains a complete list of all instruments, agreements or arrangements
pursuant to which the Company has borrowed or is able to borrow any money,
incurred any indebtedness
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or can incur any indebtedness, guaranteed any liability, or established any line
of credit or other banking arrangement other than credit extended in the
ordinary course of business to (i) the Company by its vendors or (ii) to
employees of the Company through Company issued credit cards. Section 4.1(z) of
the Company Disclosure Schedule also contains a description of all obligations
of the Company which are personally guaranteed by any of the officers of any of
the Company and a description of such guarantees. Section 4.1(z) of the Company
Disclosure Schedule also sets forth a complete list of each bank in which the
Company or any Employee Plan has an account or safe deposit box, the names of
all persons authorized to draw thereon or have access thereto, and the names of
each person holding a power of attorney from the Company.
(aa) Minute Books. All material corporate actions which have heretofore
been taken and which required approval of the board of directors or the
stockholders of the Company have been either approved and confirmed or ratified
by the Board of Directors and/or the stockholders of the Company as required by
the Certificate of Incorporation and By-Laws of the Company and by the Georgia
Corporation Code, and such approval and confirmation or ratification has been
duly and validly recorded.
(bb) Powers of Attorney and Suretyships. Except as set forth in Section
4.1(bb) of the Company Disclosure Schedule, the Company has no general or
special powers of attorney outstanding (whether as grantor or grantee) and has
no obligation or liability (whether actual, accrued, accruing, contingent or
otherwise) as guarantor, surety, co-signor, endorser, co- partnership, joint
venture, association, organization or other entity.
(cc) Transactions with Related Parties. Except as set forth in Section
4.1(cc) of the Company Disclosure Schedule, no officer, director, or shareholder
of the Company was during the past two years or is presently, a party, directly
or indirectly to any transaction or presently proposed transaction with the
Company.
(dd) Full Disclosure. All information furnished by the Company to
GenRad pursuant to or in connection with this Agreement and all instruments and
agreements executed in connection herewith, is, and will be on the Closing Date,
accurate and complete in all material respects, and does and will on the Closing
Date include all material facts required to be stated therein or necessary to
make the statements therein not misleading. All documents furnished by the
Company to GenRad pursuant to or in connection with this Agreement are true and
correct copies, and there are no amendments or modifications thereto except as
otherwise set forth in such documents. As of the date of this Agreement, the
Company has disclosed to GenRad all events, conditions and facts known to it
materially affecting the business and prospects of the Company. The Company has
not withheld knowledge of any such events, conditions or facts which it knows or
reasonably believes would materially affect the business and prospects of the
Company.
(ee) Brokers. Except as disclosed in Section 4.1(ee) of the Company
Disclosure Schedule, no broker, finder or investment banker is entitled to any
brokerage, finder's or other
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fee or commission in connection with the Merger or the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of the Company.
(ff) Pooling Interests; Tax-Free Reorganization. The Company has no
reason to believe that the Merger will not qualify as a pooling of interests for
accounting purposes or a reorganization within the meaning of Section 368(a) of
the Code.
4.2. Representations and Warranties of GenRad. GenRad hereby jointly and
severally represent and warrant to the Company and the Stockholders as follows:
(a) Organization, Good Standing and Power. GenRad is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, has all requisite corporate power and authority
to own, operate and lease its properties and to carry on its business as now
being conducted, and is duly qualified and in good standing in each jurisdiction
in which the property owned, leased or occupied by it or the nature of the
business conducted by it makes such qualification necessary.
(b) Merger Stock. The shares of GenRad common stock to be issued to the
Stockholders in connection with the Merger have been duly authorized by all
necessary corporate action by GenRad and, when issued and delivered by GenRad
pursuant to this Agreement, will be validly issued, fully paid and
non-assessable.
(c) Power; Due Authorization. GenRad has the power and authority to
execute and deliver this Agreement and to perform all of its obligations
hereunder in accordance with the terms hereof, and all necessary corporate
action to authorize the consummation of the transactions contemplated by this
Agreement by GenRad has been duly and effectively taken, including, without
limiting the generality of the foregoing, the approval thereof by the Board of
Directors of GenRad.
(d) SEC Filings. The information contained in GenRad's periodic reports
filed under the Securities Exchange Act of 1934, as amended (the "1934 Act"), do
not contain any statement that, at the time and in light of the circumstances
under which it was made, was false or misleading with respect to any material
fact, or that omitted to state any material fact required to be stated therein
or necessary in order to make the statements therein not false or misleading.
(e) Litigation. There are no actions, suits, proceedings or
investigations pending or, to the knowledge of GenRad, threatened against or
affecting GenRad, at law or in equity, or before or by any federal, state,
municipal or other governmental or nongovernmental department, commission,
board, bureau, agency or instrumentality, or any other person, which alone or in
the aggregate could reasonably be expected to prevent consummation of the
transactions contemplated hereby or which could reasonably be expected to
materially adversely affect the operations, prospects, earnings, assets,
properties or business of GenRad.
(f) Applicable Laws. GenRad has complied and is in compliance with all
United States and foreign laws, rules, regulations, ordinances, decrees and
orders applicable to
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the operation of its business as presently conducted and/or its owned or leased
properties the failure to comply with which could reasonably be expected to
prevent consummation of the transactions contemplated hereby or which could
reasonably be expected to materially adversely affect the operations, earnings,
assets, properties or business of GenRad.
(g) Brokers. GenRad shall be solely responsible for any brokerage,
finder's or other fee or commission in connection with the Merger or the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of GenRad.
(h) Effect of Agreement. The execution, delivery and performance of
this Agreement by GenRad and the consummation of the transactions contemplated
hereby by GenRad will not result in default under or in material violation of
any provision of its Articles of Organization or in material default under or in
violation of any provision of its By-Laws or any restriction, lien, encumbrance,
indenture, contract, agreement, lease, sublease, loan agreement, note or other
obligation or liability to which it is a party or by which it is bound or to
which its assets are subject.
(i) Full Disclosure. The Disclosure Material (as defined in the
Investment Letter executed pursuant to Section 6.2(g) hereof) furnished by
GenRad to the Company does and will on the Closing Date include all material
facts required to be stated therein or necessary to make the statements therein
not misleading. All documents furnished by GenRad to the Company pursuant to or
in connection with this Agreement are true and correct copies, and there are no
amendments or modifications thereto except as otherwise set forth in such
documents.
(j) Pooling Interests; Tax-Free Reorganization. GenRad has no reason to
believe that the Merger will not qualify as a pooling of interests for
accounting purposes or a reorganization within the meaning of Section 368(a) of
the Code.
(k) Absence of Certain Changes. Since the filing of GenRad's most
recent Form 10-K filed under the 1934 Act, there have been no changes in the
operations, earnings, assets, properties, business or condition of GenRad which
have resulted in a material adverse effect on GenRad.
ARTICLE V
COVENANTS
5.1. Stockholders' Approval. The Company shall have taken any and all
action necessary in accordance with applicable law and its Articles of
Incorporation and By-Laws to obtain, by a special meeting of its Stockholders or
by written consent in lieu thereof, the unanimous approval of the Stockholders
to the Merger and other transactions contemplated hereby no later than 5:00 p.m.
on April 3, 1998. The Board of Directors of the Company shall, subject to its
fiduciary duty to the Company's Stockholders, recommend such approval and shall
take all lawful action to solicit such approval.
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5.2. Operation of Business. The Company will operate its business only in
the usual, regular and ordinary manner so as to maintain the goodwill it
presently enjoys, and, to the extent consistent with such operation, will use
its best efforts to (i) preserve intact its present business organization, (ii)
preserve its assets, licenses, permits and contracts, (iii) preserve its present
relationship with its customers, suppliers, distributors, value added resellers,
consultants, joint venturers, strategic partners, and others with which it has
business dealings and (iv) keep in its employ its key personnel.
5.3. Maintain Properties. The Company will maintain all of its properties
in customary repair, order and condition, reasonable wear and use and damage by
fire or casualty excepted, and will maintain insurance upon all of its
properties and with respect to the conduct of its business in such amounts and
of such kinds as are in effect on the date of this Agreement or as the same may
be added to by mutual agreement of the Company and GenRad.
5.4. Books and Records. The Company will maintain its books, accounts, and
records in the usual, regular and ordinary manner on a basis consistent with the
Company's historical practices.
5.5. Encumbrances. The Company will not encumber or mortgage any of its
property or assets except in the usual and ordinary course of business or enter
into any contract or commitment which by reason of its size or otherwise is not
in the usual and ordinary course of business, and the Company will not, other
than in the usual and ordinary course of its business, dispose of, sell, or
convey or acquire any assets or property. The Company shall not enter into any
transaction which if effected before the date of this Agreement would constitute
a breach of the representations, warranties or agreements contained herein.
5.6. Compliance. The Company shall comply with the provisions of all laws,
regulations, ordinances, and judicial decrees applicable to it or the conduct of
its business, the failure to comply with which would materially adversely affect
its operations, prospects, earnings, assets, properties or business.
5.7. Filings; Other Action. Subject to the terms and conditions herein
provided, GenRad and the Company shall (a) cooperate with one another in (i)
determining which filings are required to be made prior to the Effective Time
with, and which consents, approvals, permits or authorizations are required to
be obtained prior to the Effective Time from, governmental or regulatory
authorities of the United States, the several states, foreign jurisdictions and
third parties in connection with the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby and (ii) timely
make all such filings and timely seek all such consents, approvals, permits or
authorizations; and (b) use all reasonable efforts to take, or cause to be
taken, all other action and do, or cause to be done, all other things necessary,
proper or appropriate to consummate and make effective the transactions
contemplated by this Agreement. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and/or directors of the Company and GenRad shall
take all such necessary action.
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5.8. Best Efforts. Subject to the terms and conditions hereof each party to
this Agreement agrees to fully cooperate with the others and the others'
counsel, accountants and representatives in connection with any steps required
to be taken as part of its obligations under this Agreement. Each party to this
Agreement agrees that it will use its reasonable best efforts (without incurring
material expense) to cause all conditions to its obligations under this
Agreement to be satisfied as promptly as possible, and will not knowingly
undertake a course of action inconsistent with this Agreement or which would
make any of its representations, warranties, agreements or covenants in this
Agreement untrue in any material respect or any conditions precedent to its
obligations under this Agreement unable to be satisfied at or prior to the
Closing.
5.9. Publicity. GenRad and the Company shall consult with each other in
issuing any press releases or otherwise making public statements with respect to
the transactions contemplated hereby and in making any filings with any federal
or state governmental or regulatory agency or with any national securities
exchange with respect thereto.
5.10. Tax Free Reorganization. From and after the Effective Time, neither
GenRad, the Surviving Corporation nor the Company shall take or suffer to be
taken any action which will cause the Merger not to constitute a reorganization
within the meaning of Section 368(a) of the Code.
5.11. Accounting Basis. Neither GenRad nor the Company nor any of their
respective officers and directors shall take or permit any action from and after
the date hereof which would prevent the transactions contemplated by this
Agreement from being treated by GenRad as a "pooling of interests" in accordance
with generally accepted accounting principles and the applicable General Rules
and Regulations published by the SEC.
5.12. Employee Benefits and Contracts. Following the Effective Time, the
service of the employees of the Company prior to the Effective Time shall be
treated as service with GenRad for purposes of eligibility, participation,
vesting and benefit accrual under GenRad's 401(k) retirement plan and vacation
policies.
5.16. Further Action. Subject to the fulfillment or waiver, at or before
the Effective Time, of each of the conditions of performance set forth herein,
each party hereto shall perform such further acts and execute such documents as
reasonably may be required to effectuate the Merger.
5.17 Additional Covenants of Frank B. Wingate and William E. Massaker.
(a) Within ten (10) business days following the first date that shares
of GenRad common stock can be re-offered under the registration statement
described in the Registration Rights Agreement executed pursuant to Section
6.3(d) hereof, Frank B. Wingate shall pay to GenRad any and all amounts of
principal and unpaid interest accrued thereon which are then due under two
promissory notes, dated July 10, 1997 and April 7, 1998, in the principal
amounts of $44,132.45 and $110,331.13, respectively.
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(b) Within ten (10) business days following the later to occur of (i)
the date on which William E. Massaker re-offers shares GenRad common stock under
the registration statement described in the Registration Rights Agreement
executed pursuant to Section 6.3(d) hereof or (ii) November 10, 1998, William E.
Massaker shall pay to GenRad any and all amounts of principal and unpaid
interest accrued thereon which are then due under two promissory notes, dated
July 10, 1997 and April 7, 1998, in the principal amounts of $10,000.00 and
$14,230.75, respectively.
ARTICLE VI
CONDITIONS
6.1. Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(a) No Injunctions or Restraints; Illegality. No order, injunction or
decree issued by any court or agency of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Merger or any of the
other transactions contemplated by this Agreement (an "Order") shall be in
effect. No statute, rule, regulation, order, injunction or decree shall have
been enacted, entered, promulgated or enforced by any governmental entity which
prohibits, restricts or makes illegal consummation of the Merger.
(b) Tax Opinion of Counsel for GenRad. GenRad shall have received an
opinion letter of Nutter, McClennen & Fish, LLP, counsel for GenRad, dated the
Closing Date, to the effect that the Merger constitutes a tax-free
reorganization within the meaning of Section 368(a) of the Code and that each of
the Company and GenRad is "a party to a reorganization" within the meaning of
Section 368(b) of the Code. As a condition to this obligation, counsel to GenRad
shall have received certificates in the form of Exhibit 6.1(b) hereto from the
Company and such other persons or entities sufficient, in such counsel's sole
discretion, to allow such counsel to render such opinion.
(c) Escrow Agreement. GenRad, the Stockholders and State Street Bank
and Trust Company, in its capacity as escrow agent for the Contingent Merger
Consideration, shall have entered into an escrow agreement in form and substance
reasonably satisfactory to the parties thereto (the "Escrow Agreement"), which
Escrow Agreement shall become effective at the Effective Time.
6.2. Conditions to Obligations of GenRad. The obligations of GenRad to
effect the Merger are also subject to the satisfaction by the Company or the
waiver by GenRad at or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Company set forth in this Agreement shall be true and correct in all
material respects as of the Closing Date as though made on and as of the Closing
Date (except to the extent such
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representations and warranties speak as of an earlier date and except to the
extent qualified by materiality, in which event such representations and
warranties shall be true and correct). GenRad shall have received a certificate
signed on behalf of the Company by its President to the foregoing effect.
(b) Performance of Obligations of the Company. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and GenRad shall have
received a certificate signed on behalf of the Company by its President to the
foregoing effect.
(c) Employment Agreement. At the Effective Time Frank B. Wingate shall
have executed and delivered an Employment Agreement substantially in the form
attached hereto as Exhibit 6.2(c) (the "Employment Agreement").
(d) Employee Resignation; Release Agreement. Prior to the Effective
Time, William E. Massaker shall have resigned from his employment by the Company
and shall have executed and delivered a Separation and Release Agreement
substantially in the form attached hereto as Exhibit 6.2(d) (the "Release
Agreement").
(e) Opinion Letter of Counsel for the Company. GenRad shall have
received an opinion letter of Brooks, Pierce, McLendon, Humphrey & Leonard,
L.L.P., counsel for the Company, dated the Closing Date, substantially in the
form set forth in Exhibit 6.2(e) attached hereto.
(f) Dissenters; Stockholder Approval. Holders of no more than one
percent (1%) of the issued and outstanding shares of the Company capital stock
(on a common stock equivalency basis) shall have filed written objection to the
Merger with the Company prior to the taking of the vote of the Stockholders with
respect thereto, and GenRad shall have received the documents contemplated by
Section 10.6 hereof.
(g) Investment Representations. All the Stockholders who have voted in
favor of the Merger and this Agreement shall have entered into agreements in the
form of Exhibit 6.2(g) hereto with respect to the GenRad Shares to be issued to
them hereunder, which agreements shall become effective on the Closing Date.
(h) No Material Adverse Change. There shall have been no material
adverse change in the operations, prospects, earnings, assets, properties,
business, or condition (financial or otherwise) of the Company. GenRad shall
have received a certificate signed on behalf of the Company by its President to
the foregoing effect.
(i) Filings and Consents. On the Closing Date, all filings, other than
the Certificate of Merger and the Articles of Merger, required to be made prior
to the Effective Time by the Company with, and all consents, approvals and
authorizations required to be obtained prior to the Effective Time by the
Company from, governmental authorities and other
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persons in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby shall have been made or
obtained, as the case may be. GenRad shall have received a certificate signed on
behalf of the Company by its President to the foregoing effect.
(j) Proceedings and Litigation. On the Closing Date, no action or
proceeding shall be threatened, instituted or pending by or before any court or
any governmental or other regulatory or administrative body requesting or
looking toward an order, judgment or decree which (i) questions the validity of
or seeks to restrain or prohibit the consummation of the transactions
contemplated hereby; (ii) seeks to compel GenRad to hold separate all or a
material portion of the Company's business or assets as a result of the
transactions contemplated hereby; (iii) in the reasonable judgment of GenRad,
would have a material adverse effect on GenRad; or (iv) in the reasonable
judgment of GenRad, would have a material adverse effect on the business or
financial condition of the Company or the Surviving Corporation.
(k) Proceedings Satisfactory to Counsel. All proceedings taken by the
Company and all instruments executed and delivered by the Company in connection
with the Merger at or prior to the Closing Date shall be reasonably satisfactory
in form and substance to counsel for GenRad.
(l) Non-Competition, Assignment and Non-Disclosure Agreements. There
shall have been delivered to GenRad Non-Competition, Assignment and
Non-Disclosure Agreements substantially in the form attached hereto as Exhibit
6.2(l)(i) executed by Frank B. Wingate and William E. Massaker. Additionally,
there shall have been delivered to GenRad Assignment and Non-Disclosure
Agreements substantially in the form attached hereto as Exhibit 6.2(l)(ii)
executed by William E. Gaines and Heritage Investment Limited Partnership.
(m) Stockholder Letters. There shall have been delivered to GenRad
agreements substantially in the form of Exhibit 6.2(m) hereto executed by each
of the Stockholders.
(n) Pooling of Interests. GenRad shall have received a letter from
Price Waterhouse, LLP addressed to GenRad, satisfactory to it, to the effect
that the Merger will qualify for "pooling of interests" accounting treatment
under Accounting Principles Board Opinion No. 16.
(o) Regulation D Safe Harbor. GenRad shall have received evidence
reasonably satisfactory to it that the issuance and exchange of GenRad
securities for those of the Company pursuant to the terms of this Agreement are
exempt from all federal and state registration requirements pursuant to Section
4(2) and Regulation D under the Securities Act of 1933, as amended (the "1933
Act"), and similar exemptions under applicable state blue sky laws.
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6.3. Conditions to Obligations of the Company. The obligation of the
Company to effect the Merger is also subject to the satisfaction or waiver by
the Company at or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. The representations and warranties
of GenRad set forth in this Agreement shall be true and correct in all material
respects as of the Closing Date as though made on and as of the Closing Date
(except to the extent such representations and warranties speak as of an earlier
date and except to the extent qualified by materiality, in which event such
representations and warranties shall be true and correct). The Company shall
have received a certificate signed on behalf of GenRad by an executive officer
of GenRad to the foregoing effect.
(b) Performance of Obligations of GenRad. GenRad shall have performed
in all material respects all obligations required to be performed by them under
this Agreement at or prior to the Closing Date, and the Company shall have
received a certificate signed on behalf of GenRad by an executive officer of
GenRad to such effect.
(c) Opinion Letter of Counsel for GenRad. The Company shall have
received an opinion letter of Nutter, McClennen & Fish, LLP, counsel for GenRad,
dated the Closing Date, substantially in the form set forth in Exhibit 6.3(c)
attached hereto.
(d) Registration Rights Agreement. GenRad shall have entered into a
Registration Rights Agreement in the form of Exhibit 6.3(d) hereto in favor of
the Stockholders with respect to the GenRad common stock to be issued to them
hereunder, which agreement shall become effective as of the Effective Time.
(e) Employment Agreement. GenRad shall have entered into the Employment
Agreement with Frank Wingate.
(f) Absence of Changes or Events Having a Material Adverse Effect. On
the Closing Date, there shall have been no changes in the operations, earnings,
assets, properties, business or condition of GenRad since the filing of GenRad's
most recent Form 10-K filed under the 1934 Act which have resulted in a material
adverse effect on GenRad. The Company shall have received a certificate signed
on behalf of GenRad by an executive officer of GenRad to the foregoing effect.
(g) Filings and Consents. On the Closing Date, all filings, other than
the two separate Articles of Merger, required to be made prior to the Effective
Time by GenRad with, and all consents, approvals and authorizations required to
be obtained prior to the Effective Time by GenRad from, governmental authorities
and other persons in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby shall
have been made or obtained, as the case may be. The Company shall have received
a certificate signed on behalf of GenRad by an executive officer of GenRad to
the foregoing effect.
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(h) Proceedings and Litigation. On the Closing Date, no action or
proceeding shall be threatened, instituted or pending by or before any court or
any governmental or other regulatory or administrative body requesting or
looking toward an order, judgment or decree which (i) questions the validity of
or seeks to restrain or prohibit the consummation of the transactions
contemplated hereby; (ii) in the reasonable judgment of the Company, would have
a material adverse effect on the business or financial condition of the Company
or the Surviving Corporation.
(i) Proceedings Satisfactory to Counsel. All proceedings taken by
GenRad and all instruments executed and delivered by GenRad in connection with
the Merger at or prior to the Closing Date shall be reasonably satisfactory in
form and substance to counsel for the Company.
(j) Pooling of Interests. GenRad shall have received a letter from
Price Waterhouse, LLP addressed to GenRad, satisfactory to it, to the effect
that the Merger will qualify for "pooling of interests" accounting treatment
under Accounting Principles Board Opinion No. 16.
ARTICLE VII
TERMINATION
7.1. Termination by Mutual Consent. This Agreement may be terminated and
the Merger abandoned at any time prior to the Effective Time, before or after
the approval of this Agreement by the stockholders and/or directors of the
Constituent Corporations by the mutual consent of the Company and GenRad.
7.2. Termination by Either the Company or GenRad. This Agreement may be
terminated and the Merger abandoned by either the Company or GenRad at any time
prior to the Effective Time, before or after the approval of this Agreement by
the stockholders and/or directors of the Constituent Corporations if: (a) the
Merger shall not have become effective by April 10, 1998, or such later date as
shall have been approved by the Boards of Directors of the Company and GenRad
(the "Termination Date"); (b) a final and nonappealable Order shall be in
effect; or (c) any statute, rule or regulation shall have been enacted or
promulgated by any government or governmental agency which makes consummation of
the Merger illegal.
7.3. Termination by GenRad. This Agreement may be terminated by GenRad, and
the Merger abandoned at any time prior to the Effective Time, before or after
the approval of this Agreement by the stockholders and/or directors of the
Constituent Corporations, if: (a) any of the representations or warranties made
by the Company in this Agreement shall not be correct or accurate in all
material respects at and as of the time the Closing is scheduled to take place
hereunder with the same effect as if made at such time; or (b) the Company shall
have failed to comply with or perform any of the covenants, conditions or
agreements contained in this Agreement to be complied with or performed by the
Company at or prior to the Closing in any material respect.
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7.4. Termination by the Company. This Agreement may be terminated by the
Company, and the Merger abandoned at any time prior to the Effective Time,
before or after the approval of this Agreement by the stockholders and/or
directors of the Constituent Corporations, if (a) any of the representations and
warranties made by GenRad in this Agreement shall not be correct or accurate in
all material respects at and as of the time the Closing is scheduled to take
place hereunder with the same effect as if made at such time; or (b) GenRad
shall have failed to comply with or perform any of the covenants, conditions or
agreements contained in this Agreement to be complied with or performed by
GenRad prior to the Closing in any material respect.
7.5. Notice of Termination. In the event of any termination pursuant to
this Article VII (other than pursuant to Section 7.1 hereof), written notice
setting forth the reasons therefor shall forthwith be given by the terminating
party to the other party hereto.
7.6. Effect of Termination and Abandonment. In the event of termination of
this Agreement and abandonment of the Merger pursuant to this Article VII,
except as provided herein, no party hereto (or any of its directors or officers)
shall have any liability or further obligation to any other party to this
Agreement. Notwithstanding the foregoing, nothing herein will relieve any party
from liability for any breach of this Agreement and, in the event of termination
of this Agreement due to the failure of any party to consummate the Merger for
any reason other than the failure of any condition to closing specified in
Article VI, the defaulting party shall reimburse the non-defaulting party for
all of its expenses incident to preparing for and entering into this Agreement,
including, without limitation, legal and accounting fees and expenses.
ARTICLE VIII
CERTAIN RIGHTS AND LIMITATIONS
REGARDING THE MERGER STOCK
8.1. Restrictions on Sale or Transfer of Shares; Legend. The offering of
GenRad common stock to be issued hereunder will not have been registered under
the 1933 Act or the blue sky laws of any state by reason of their contemplated
issuance in a transaction exempt from the registration and prospectus delivery
requirements of the 1933 Act and of such state laws. Such shares may not be
sold, transferred, or otherwise disposed of without registration of such
transaction under the 1933 Act and such state laws or an exemption therefrom and
an opinion of counsel to such effect and satisfactory to GenRad shall have been
delivered to GenRad. The certificates representing the GenRad common stock shall
contain the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS.
NEITHER SUCH SHARES NOR ANY PORTION THEREOF OR INTEREST THEREIN MAY BE
SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS THE
SAME IS REGISTERED UNDER SAID ACT AND
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APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE AND THE CORPORATION SHALL HAVE RECEIVED EVIDENCE
OF SUCH EXEMPTION SATISFACTORY TO THE CORPORATION (WHICH MAY INCLUDE, AMONG
OTHER THINGS, AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION)."
ARTICLE IX
INDEMNIFICATION; RIGHTS TO ESCROW SHARES
9.1. Definitions. For the purposes of this Article IX:
(a) "Damages" shall mean claims, damages, losses, liabilities,
deficiencies, assessments, penalties, taxes, judgments, settlements and
expenses, including, without limitation, all reasonable fees and disbursements
of counsel incident to the investigation or defense of any claim or proceeding
or threatened claim or proceeding, of accountants and of expert witnesses and
costs and expenses of litigation or arbitration.
(b) "Escrow Shares" shall mean those shares representing the Contingent
Merger Consideration deposited in escrow pursuant to the terms of the Escrow
Agreement.
(c) "Escrow Value" shall mean the value of the Escrow Shares, as
determined by multiplying the number of such Escrow Shares by the Average
Closing Price.
(d) "Indemnification Claim" shall mean a written claim for
indemnification hereunder, including with respect to Third Party Claims.
(e) "Indemnitees" shall mean GenRad and its agents, representatives,
employees, officers, directors, stockholders and affiliates.
(f) "Indemnitors" shall mean the Stockholders.
(g) "Indemnitor Representative" shall mean Frank B. Wingate or such
other person appointed as set forth in Section 9.10(b).
(h) "Tax Claim" shall mean any payment made by GenRad to any U.S. state
taxing authority on account of sales, use, excise or income taxes owed by the
Company or its customers in connection with sales (or licenses) of products
and/or services by the Company to such customers at any time prior to the
Effective Time and, with respect to continued sales to such customers by GenRad
following the Closing Date of products or services formerly sold to such
customers by the Company, for an additional period of 60 days following the
Effective Date.
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(i) "Third Party Claim" shall mean any action, claim, proceeding or
audit that is instituted against one or more Indemnitees which, if prosecuted
successfully, would result in Damages for which one or more Indemnitees is
entitled to indemnification hereunder and shall include, without limitation,
those Specified Third Party Claims (as hereinafter defined) made pursuant to
Section 9.2(c)(i)-(iv).
9.2. Agreement of the Indemnitors to Indemnify. Subject to the terms and
conditions of this Agreement, the Indemnitors agree to indemnify, defend and
hold harmless the Indemnitees from, against, for and in respect of any and all
Damages paid, suffered or incurred by the Indemnitees, or any of them, and
resulting from, based upon, or arising out of:
(a) any inaccuracy in or breach of any representations or warranties of
the Company and the Stockholders contained in or made pursuant to this
Agreement;
(b) a breach of or failure to perform any covenant or agreement of the
Company and/or the Stockholders made in this Agreement;
(c) any Third Party Claims, including, without limitation any of the
following (hereinafter referred to as the "Specified Third Party Claims"):
(i) the matter set forth in Section 9.2(c)(i) of the Company
Disclosure Schedule;
(ii) the matter set forth in Section 9.2(c)(ii) of the
Company Disclosure Schedule;
(iii) the matter set forth in Section 9.2(c)(iii) of the
Company Disclosure Schedule; or
(iv) the matter set forth in Section 9.2(c)(iv) of the
Company Disclosure Schedule;
(d) any Tax Claim; and
(e) any action, claim or proceeding brought by an Indemnitee to seek
enforcement of this Section 9.2. as to any of the foregoing, in which such
Indemnitee is the prevailing party.
9.3. Procedures for Indemnification.
(a) An Indemnification Claim shall be made by an Indemnitee by prompt
delivery of a written notice to the Indemnitor Representative requesting
indemnification and specifying the basis on which indemnification is sought and
the amount of asserted Damages and in the case of a Third Party Claim,
containing (by attachment or otherwise) such other information as the Indemnitee
shall have concerning such Third Party Claim (a "Notice of
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Claim"). The date of a Notice of Claim shall mean (i) the second day following
date of the postmark on the registered or certified mail containing the Notice
of Claim which is received by the Indemnitor Representative, or (ii) if the
Notice of Claim is personally delivered, the date of such personal delivery.
(b) If the Indemnification Claim involves a Tax Claim, the procedures
set forth in Section 9.4 hereof shall be observed by the Indemnitee, the
Indemnitor Representative and the Indemnitors.
(c) If the Indemnification Claim involves a Third Party Claim, the
procedures set forth in Section 9.5 hereof shall be observed by the Indemnitee,
the Indemnitor Representative and the Indemnitors.
(d) If the Indemnification Claim involves a matter other than a Third
Party Claim or a Tax Claim, the Indemnitor Representative shall have ten (10)
business days from the date of the Notice of Claim to object to such
Indemnification Claim by delivery of a written notice of such objection to the
Indemnitee specifying in reasonable detail the basis for such objection. Failure
to so object within such ten (10) business day period shall constitute a final
and binding acceptance of the Indemnification Claim by the Indemnitor
Representative, and the Indemnification Claim shall be paid in accordance with
Section 9.12. If an objection is timely interposed by the Indemnitor
Representative and the dispute is not resolved by the Indemnitee and the
Indemnitor Representative within fifteen (15) business days from the date the
Indemnitee receives such objection, such dispute shall be resolved by
arbitration as provided in Section 10.9 of this Agreement.
9.4. Tax Claims. Prior to the settlement of any Tax Claim involving the
asserted liability of the Indemnitors under this Article IX, the Indemnitees and
the Indemnitor Representative together shall establish parameters for the
settlement of such Tax Claim and no settlement of any Tax Claim shall be made
without the mutual consent of GenRad and the Indemnitor Representative.
9.5. Third Party Claims. The rights, obligations and liabilities of an
Indemnitee and the Indemnitors with respect to a Third Party Claim shall be
subject to the following terms and conditions:
(a) The Indemnitee seeking indemnification for such Third Party Claim
shall give the Indemnitor Representative a Notice of Claim promptly after
receipt by the Indemnitee of notice thereof, and the Indemnitor Representative
may undertake the defense, compromise and settlement thereof by representatives
of their own choosing reasonably acceptable to the Indemnitee. The failure of
the Indemnitee to provide a Notice of Claim to the Indemnitor Representative of
such Third Party Claim shall not relieve the Indemnitor(s) of any liability that
the Indemnitor(s) may have with respect to such claim except to the extent the
Indemnitor(s) demonstrates that the defense of such Third Party Claim is
prejudiced by such failure. The assumption of the defense, compromise and
settlement of any such Third Party Claim by the Indemnitor Representative shall
not be an acknowledgment of the obligation of the Indemnitor(s)
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to indemnify such Indemnitee with respect to such claim hereunder. If the
Indemnitee desires to participate in, but not control, any such defense,
compromise and settlement, it may do so at its sole cost and expense. If,
however, the Indemnitor Representative fails or refuses to undertake the defense
of such Third Party Claim within ten (10) business days after receipt of a
Notice of Claim from the Indemnitee, the Indemnitee shall have the right to
undertake the defense, compromise and settlement of such claim with counsel of
its own choosing. In the circumstances described in the preceding sentence, the
Indemnitee shall, promptly upon its assumption of the defense of such claim,
make an Indemnification Claim as specified in Section 9.2 which shall be deemed
an Indemnification Claim that is not a Third Party Claim for the purpose of the
procedures set forth herein.
(b) If, in the reasonable opinion of the Indemnitee, any Third Party
Claim, or the related action or resolution thereof, involves an issue or matter
which could result in a material adverse effect with respect to the business,
operations, assets, properties or prospects of an Indemnitee (including, without
limitation, the administration of the tax returns and responsibilities under
applicable tax laws), the Indemnitee shall have the right to control the
defense, compromise and settlement of such Third Party Claim undertaken by the
Indemnitor Representative, and the Damages of the Indemnitee in connection
therewith shall be included as part of the indemnification obligations of the
Indemnitors hereunder. If the Indemnitee elects to exercise such right, the
Indemnitors shall have the right to participate in, but not control, the
defense, compromise and settlement of such Third Party Claim at its sole cost
and expense.
(c) No settlement of a Third Party Claim involving the asserted
liability of the Indemnitors under this Article IX shall be made without the
prior written consent by or on behalf of the Indemnitor Representative, which
consent shall not be unreasonably withheld or delayed. Consent shall be presumed
in the case of settlement of $20,000 or less where the Indemnitor Representative
has not responded within ten (10) business days of notice of a proposed
settlement. If the Indemnitor Representative assumes the defense of such a Third
Party Claim, (i) no compromise or settlement thereof may be effected by the
Indemnitor Representative without the Indemnitee's consent unless (A) there is
no finding or admission of any violation of law or any violation of the rights
of any person and no effect on any other action that may be made against the
Indemnitee, (B) the sole relief provided is monetary damages that are paid in
full by the Indemnitors, and (C) the compromise or settlement includes, as an
unconditional term thereof, the giving by the claimant or the plaintiff to the
Indemnitee of a release, in form and substance satisfactory to the Indemnitee,
from all liability in respect of such Third Party Claim, and (ii) the Indemnitee
shall have no liability with respect to any compromise or settlement thereof
effected without its consent.
(d) In connection with the defense, compromise or settlement of any
Third Party Claim, the Indemnitee and the Indemnitors shall execute such powers
of attorney as may reasonably be necessary or appropriate to permit
participation of counsel selected by such Indemnitee or the Indemnitor
Representative and, as may reasonably relate to any such Third Party Claim,
shall provide access to the counsel, accountants and other representatives of
such Indemnitee or Indemnitors during normal business hours to all properties,
personnel, books, tax records, contracts, commitments and all other business
records of such Indemnitee or
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Indemnitors and will furnish to such Indemnitee or Indemnitors copies of all
such documents as may reasonably be requested (certified, if requested).
9.6. Other Rights and Remedies. The rights of the Indemnitees under this
Article IX are the sole and exclusive rights and remedies of the Indemnitees as
to the Indemnitors for the recovery of Damages resulting from, based upon or
arising out of this Agreement and the matters set forth herein. Nothing
contained in this Article IX shall limit in any way the rights of the parties to
the Escrow Agreement thereunder. Nothing contained in this Article IX shall
limit in any way the rights of the parties to seek injunctive relief, specific
performance or other act decrees.
9.7. Limitations on Liability.
(a) Time Limitations on Liability. The obligations of the Indemnitors
to indemnify the Indemnitees shall expire on the earlier of 12:00 a.m. on the
first anniversary of the Effective Time and the date on which GenRad first
releases its audited consolidated financial statements which include the results
of operations of the Surviving Corporation (the "Expiration Date"); provided,
however, that such obligations with respect to (i) any Tax Claims made pursuant
to Section 9.2(d) shall expire as of 12:00 a.m. on the first year anniversary of
the Effective Time, and (ii) any Specified Third Party Claims made pursuant to
Section 9.2(c)(i)-(iv) shall expire as of 12:00 a.m. on the eighteen (18) month
anniversary of the Effective Time.
(b) Damage Limitations and Exclusions.
(i) Except as to those obligations of the Indemnitors to
indemnify the Indemnitees for Damages resulting from, based upon, or arising out
of a breach of or inaccuracy in the representations and warranties contained in
Section 4.1(a) and (b) for which the Indemnitors shall be jointly and severally
liable, the aggregate indemnity obligations of each Indemnitor under this
Agreement shall not exceed such Indemnitor's Pro Rata Share of any such Damages.
(ii) The Indemnitors shall have no liability to the
Indemnitees with respect to Indemnification Claims not based on willful or
fraudulent actions or omissions until the total of all Damages arising under
such provisions exceeds $365,960 and then only to the extent the Damages are in
excess of that amount; provided, however, that the aggregate amount of Damages
for which the Indemnitors shall be liable shall not exceed $36,596,007.55.
(iii) As to those Specified Third Party Claims made pursuant
to Section 9.2(c)(ii), the aggregate amount of Damages for which the Indemnitors
shall be liable shall be equal to $250,000 as liquidated damages and not as a
penalty.
(iv) As to those Tax Claims made pursuant to Section 9.2(d),
the aggregate amount of Damages for which the Indemnitors shall be liable shall
not exceed $1,000,000.
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(v) As to those Indemnification Claims made pursuant to
Section 9.2 as a result of a breach of the covenants set forth under Section
5.17, only the Indemnitor(s) committing such a breach shall have any liability
to the Indemnitors and William E. Gaines and Heritage Investment Limited
Partnership shall have no liability thereunder.
9.8. Subrogation. Upon payment in full of any Indemnification Claim by the
Indemnitor(s), whether such payment is effected by set-off or otherwise, or the
payment of any judgment or settlement with respect to a Third Party Claim, the
rights of the Indemnitors shall be subrogated to the extent of such payment to
the rights of the Indemnitee against any other person with respect to the
subject matter of such Indemnification Claim or Third Party Claim; provided,
however, that the Indemnitors shall not bring any action or make any claim
against any customer of the Company as of the Closing Date who was also a
customer of GenRad during any portion of the six-month period immediately
preceding the date of the applicable Notice of Claim.
9.9. Cooperation. The Company, the Indemnitors and the Indemnitees shall
cooperate with each other in all reasonable respects in connection with the
defense of any Third Party Claim, including making available records relating to
such Third Party Claim and furnishing, without expense, management employees of
such person as may be reasonably necessary for the preparation of the defense of
any such claim or for testimony as a witness in any action relating to such
claim provided, however, that the foregoing right to cooperation shall not be
exercisable by one party in such a manner as to interfere unreasonably with the
normal operations and business of another party.
9.10. Appointment of Indemnitor Representative; Acceptance; Effectiveness.
(a) By executing this Agreement, each Indemnitor irrevocably
constitutes and appoints Frank A. Wingate as each Indemnitor's attorney-in-fact
and agent, with full power of substitution, to execute and deliver the Escrow
Agreement on behalf of each Indemnitor and to act for and on behalf of such
Indemnitor with respect to any Indemnification Claim or other matter arising
under this Agreement or the Escrow Agreement. Each Indemnitor acknowledges and
agrees that the appointment of the Indemnitor Representative for such Indemnitor
is coupled with an interest and may not be revoked, and shall survive the mental
incompetency of such Indemnitor.
The Indemnitor Representative (i) accepts his appointment and
authorization to act as attorney-in-fact and agent on behalf of each Indemnitor
in accordance with the terms of this Agreement and the Escrow Agreement, and
(ii) agrees to perform his obligations hereunder and under the Escrow Agreement.
Each Indemnitor fully and completely, without restrictions, agrees to be bound
by all notices received and agreements and determinations made by and documents
executed and delivered by the Indemnitor Representative under this Agreement and
the Escrow Agreement, and authorizes the Indemnitor Representative to (i)
dispute or refrain from disputing any Indemnification Claim made by an
Indemnitee under Article IX of this Agreement or under the Escrow Agreement,
(ii) negotiate and compromise any dispute which may arise under Article IX of
this Agreement or under the Escrow Agreement,
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(iii) exercise or refrain from exercising any remedies available to the parties
under Article IX of this Agreement or under the Escrow Agreement, (iv) sign any
releases or other documents with respect to any such dispute or remedy, (v)
waive any condition contained in Article IX of this Agreement or under the
Escrow Agreement, and (vi) give such instructions and to do such things and
refrain from doing such other things as the Indemnitor Representative, in his
sole discretion, deems necessary or appropriate to carry out the provisions of
Article IX of this Agreement or under the Escrow Agreement.
(b) The Indemnitor Representative may resign as such by delivering
written notice to such effect at least thirty (30) days prior to the effective
date of such resignation to each Indemnitor and the Indemnitee. In the event of
such resignation or the termination, death or mental incompetency of a
Indemnitor Representative, a successor to such person as a Indemnitor
Representative shall be appointed by a majority vote of the Shares previously
held by the Indemnitors. After the appointment of a person as successor
Indemnitor Representative, all references herein to the Indemnitor
Representative shall be deemed to include such successor.
(c) No Person serving as a Indemnitor Representative shall have any
liability to the Indemnitors for any actions or omissions taken or suffered in
good faith in his capacity as a Indemnitor Representative.
9.11. Contribution by Indemnitors. In the event any Indemnitor elects to
make a payment to any Indemnitee of any amount pursuant to Article IX in excess
of his or its Pro Rata Share of such amount, each other Indemnitor shall
contribute, pay and reimburse such Indemnitor a proportionate part of such
excess, with such proportion being determined based on the ratio of the
aggregate number of Shares sold by such Indemnitor to GenRad to the aggregate
number of Shares sold to GenRad by the Indemnitors other than the Indemnitor
making such election.
9.12. Payment of Damages; Escrow Account.
(a) At the Effective Time, GenRad shall deposit the Escrow Shares in
escrow pursuant to the terms of the Escrow Agreement.
(b) The Escrow Shares deposited with the Escrow Agent as set forth in
Section 9.12(a) shall be reserved for distribution as follows: (i) a number of
Escrow Shares having an Escrow Value equal to $1,000,000 (33,826.63 Escrow
Shares) shall be reserved to satisfy Tax Claims; (ii) a number of Escrow Shares
having an Escrow Value equal to $200,000 (6,765.32 Escrow Shares) shall be
reserved to satisfy those Specified Third Party Claims made pursuant to Section
9.2(c)(i); (iii) a number of Escrow Shares having an Escrow Value equal to
$250,000 (8,456.65 Escrow Shares) shall be reserved to satisfy those Specified
Third Party Claims made pursuant to Section 9.2(c)(ii); (iv) a number of Escrow
Shares having an Escrow Value equal to $100,000 (3,382.66 Escrow Shares) shall
be reserved to satisfy those Specified Third Party Claims made pursuant to
Section 9.2(c)(iii); and (v) a number of Escrow Shares having an Escrow Value
equal to $400,000 (approximately 13,530.65 Escrow Shares) shall be reserved to
satisfy those Specified Third Party Claims made pursuant to Section 9.2(c)(iv).
The remaining
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Escrow Shares (91,656.09 Escrow Shares) (the "Generally Reserved Escrow Shares")
shall be reserved to satisfy any and all other Indemnification Claims made under
this Article IX.
(c) Upon the determination of the amount of an Indemnification Claim
under Section 9.2, whether by agreement of the Indemnitor Representative and the
Indemnitee or by an arbitration award or by any other final adjudication, a
number of Escrow Shares with an Escrow Value equal to the amount of such
Indemnification Claim shall be delivered to the Indemnitee within five (5)
business days of the date of such determination (the "Determination Date").
(d) To the extent the amount of an Indemnification Claim under Section
9.2 exceeds the Escrow Value of the remaining Escrow Shares reserved as set
forth in Section 9.12(b), the Indemnitors shall pay the excess to the Indemnitee
by the aforesaid date in accordance with the terms and subject to the
limitations set forth in this Article IX.
9.13. Release of Escrow Shares.
(a) As of the Expiration Date, the Generally Reserved Escrow Shares
shall be distributed to the Stockholders in accordance with the Escrow
Agreement; provided that, if, on such date, there exists any Indemnification
Claim which was asserted by the Indemnitee prior to such date, but which is not
then finally resolved and discharged, a number of Generally Reserved Escrow
Shares having an Escrow Value equal to the reasonable estimate of the amount of
Damages asserted by such Indemnification Claim shall remain in escrow pending
resolution thereof; provided, however, that if such Indemnification Claim arises
by reason of a breach of the covenants set forth under Section 5.17, the Escrow
Shares remaining in Escrow shall be drawn solely from the Escrow Shares
attributable to the Indemnitor(s) committing such breach.
(b) As of the six (6) month anniversary of the Effective Time, the
Indemnitees and the Indemnitor Representative shall review the status of any Tax
Claim which is not then finally resolved and discharged. Upon the conclusion of
said review, that portion of the Escrow Shares which remain reserved under
Section 9.12(b)(i) having an Escrow Value in excess of GenRad's reasonable
estimate of the amount of Damages resulting from or arising out of such Tax
Claims shall be distributed to the Stockholders. As of the first year
anniversary of the Effective Time, all of the Escrow Shares remaining reserved
under 9.11(b)(i) to satisfy Tax Claims shall be distributed to the Stockholders
in accordance with the Escrow Agreement.
(c) As of the eighteen (18) month anniversary of the Effective Time,
the Escrow Shares reserved under Section 9.12(b)(ii)-(v) to satisfy Specified
Third Party Claims shall be distributed to the Stockholders in accordance with
the Escrow Agreement; provided that, if, on such date, there exists any such
Specified Third Party Claim which was asserted by the Indemnitee prior to such
date, but which is not then finally resolved and discharged, a number of Escrow
Shares reserved under Section 9.12(b)(ii)-(v) to satisfy Specified Third Party
Claims having an Escrow Value equal to the reasonable estimate of the amount of
Damages asserted by such Specified Third Party Claim shall remain in escrow
pending resolution thereof.
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<PAGE>
ARTICLE X
MISCELLANEOUS
10.1. Cooperation. The parties agree that each of them will fully cooperate
with the other and with the others' counsel and accountants in connection with
any steps required to be taken as part of its obligations under this Agreement.
Each party agrees that it will use its best efforts to cause all conditions to
this Agreement to be satisfied as promptly as possible, and each party agrees
that it will not undertake any course of action inconsistent with this Agreement
or which would make any representations, warranties or agreements made by it in
this Agreement untrue or any conditions precedent to this Agreement unable to be
satisfied at or prior to the Closing Date.
10.2. Payment of Expenses. Whether or not the Merger shall be consummated,
except as otherwise provided under Section 7.6 hereof, each party hereto shall
pay its own expenses incident to preparing for, entering into and carrying out
this Agreement and the consummation of the Merger.
10.3. Survival. The representations, warranties and agreements of the
parties contained in Article III (but only to the extent that such provision
expressly relate to actions to be taken after the Effective Time), Article VIII,
Article IX, Article X and Sections 1.4 and 4.1 shall survive the consummation of
the Merger. The representations, warranties and agreements of the parties
contained in Section 4.2 shall survive the consummation of the Merger but shall
expire on Expiration Date. The agreements of the parties contained in Sections
5.7, 5.8, 5.9, 5.10, 5.11, 5.12, 5.17, 7.6, 10.1, 10.2, 10.3, 10.8, 10.9, 10.10,
10.11, 10.12, 10.13, and 10.14 shall survive the termination of this Agreement.
All other representations, warranties, agreements and covenants in this
Agreement shall be deemed to be conditions of the Merger, as provided herein and
shall not survive consummation of the Merger.
10.4. Modification or Amendment. At any time (before or after approval
hereof by the stockholders of the Constituent Corporations) prior to the
Effective Time, the parties hereto may, by written agreement, make any
modification or amendment of this Agreement approved by their respective Boards
of Directors, provided such modification or amendment does not reduce the total
consideration to be paid in the Merger. This Agreement shall not be modified or
amended except pursuant to an instrument in writing executed and delivered on
behalf of each of the parties hereto.
10.5. Waiver of Conditions. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law.
10.6. Certification of Stockholder Approval. Promptly following the
Stockholders' approval of the Merger pursuant to Section 5.1 hereof, but in any
event no later than 10:00 a.m. on April 6, 1998, the Company shall deliver to
GenRad a certificate signed on behalf of the Company by its President verifying
(i) that the Company had not received any written objections
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<PAGE>
to the Merger before the taking of the vote to approve the Merger and (ii) that
the Stockholders had voted unanimously to approve the Merger.
10.7. Counterparts. For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.
10.8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, without giving
effect to its conflicts of laws principles.
10.9. Arbitration; Judicial Proceedings. All Indemnification Claims arising
under Article IX, and any other action, claim, proceeding or dispute between or
among any of the parties hereto arising out of this Agreement or any other
agreement executed in connection with this Agreement (other than actions seeking
injunctions, specific relief or other act decrees) shall be resolved by
arbitration conducted in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. Any and all arbitration proceedings shall be
conducted in Boston, Massachusetts. The arbitration shall be by a single
arbitrator jointly selected by GenRad and the Indemnitor Representative. If
GenRad and the Indemnitor Representative are unable within fifteen (15) days of
the initial request for arbitration to mutually agree upon an arbitrator, then
such arbitrator will be designated according to the rules of the arbitration
organization conducting the proceedings. The award or judgment of such
arbitration shall be final and binding on the parties hereto and shall be
enforceable, if necessary, through entry in any court of competent jurisdiction;
provided, however, that the arbitrators shall have no authority to award
punitive damages against any party.
10.10. Jurisdiction. Each of the parties hereto hereby irrevocably submits
to the personal jurisdiction of the state courts of the Commonwealth of
Massachusetts and to the personal jurisdiction of the United States District
Court for the District of Massachusetts, and all courts from which an appeal may
be taken, solely for the purpose of any suit, action, or other proceeding
arising out of or based upon this Agreement, and hereby waives to the extent not
prohibited by law, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such proceeding, any claim that such Indemnifying Party is not
subject personally to the jurisdiction of the above-named courts for such
proceedings.
10.11. Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, with a copy
contemporaneously telecopied, to:
<TABLE>
<S> <C>
Company: Industrial Computer Corporation
5871 Glenridge Drive, Suite 300
Atlanta, GA 30328
Telecopy: (404) 250-0602
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<PAGE>
Copy to: Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P.
Renaissance Plaza, Suite 2000
230 North Elm Street
Greensboro, NC 27401
Attention: Robert A. Singer, Esq.
Telecopy: (336) 378-1001
GenRad: GenRad, Inc.
7 Technology Park Drive
Westford, MA 01886-0033
Attention: Sarah H. Lucas
Chief Strategic Officer
Telecopy: (978) 589-7700
Copy to: Nutter, McClennen & Fish, LLP
One International Place
Boston, MA 02110-2699
Attention: Arthur R. Hofmann, Jr., Esq.
Telecopy: (617) 973-9748
Stockholders: Frank B. Wingate
Industrial Computer Corporation
5871 Glenridge Drive, Suite 300
Atlanta, GA 30328
Telecopy: (404) 250-0602
Copy to: Wagner, Johnston & Rosenthal, P.C.
Tower Place, Suite 1200
3340 Peachtree Road, N.E.
Atlanta, GA 30326-1044
Attention: Michael Rosenthal, Esq.
Telecopy: (404) 261-6779
William E. Massaker
6210 Deerwood Trail
Alpharetta, GA 30202
William E. Gaines
Industrial Computer Corporation
5871 Glenridge Drive, Suite 300
Atlanta, GA 30328
Telecopy: (404) 250-0602
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<PAGE>
Heritage Investment Limited Partnership
c/o Nexgen Capital Corporation
507 West Innes Street, Suite 280
Salisbury, NC 28144
Telecopy: (704) 633-0608
Copy to: Brooks, Pierce, McLendon, Humphrey &
Leonard, L.L.P.
Renaissance Plaza, Suite 2000
230 North Elm Street
Greensboro, NC 27401
Attention: Robert A. Singer, Esq.
Telecopy: (336) 378-1001
</TABLE>
or following the Effective Date to the address for such Stockholder set forth on
the books of GenRad.
10.12. Entire Agreement. This Agreement (a) constitutes the entire
agreement, and supersedes the Memorandum of Understanding executed February 6,
1998 between GenRad and the Company and all other prior agreements and
understandings, both written and oral, among the parties, with respect to the
subject matter hereof, (b) is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder and (c) shall not be
assignable by operation of law or otherwise.
10.13. Captions. The Article, Section and paragraph captions herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
10.14. Severability. Should a court or other body of competent jurisdiction
determine that any provision of this Agreement is excessive in scope or
otherwise invalid or unenforceable, such provision shall be adjusted rather than
voided, if possible, so that it is enforceable to the maximum extent possible,
and all other provisions of this Agreement shall be deemed valid and enforceable
to the extent possible.
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<PAGE>
WITNESS the execution hereof as an instrument under seal as of the date
first above written.
INDUSTRIAL COMPUTER CORPORATION
By /s/ Frank B. Wingate
-----------------------------------------
Its President
/s/ Frank B. Wingate
--------------------------------------------
Frank B. Wingate
/s/ William E. Massaker
--------------------------------------------
William E. Massaker
/s/ William E. Gaines
--------------------------------------------
William E. Gaines
HERITAGE INVESTMENT LIMITED
PARTNERSHIP
By: NEXGEN CAPITAL CORPORATION
Its: General Partner
By: /s/ Mike J. Smith III
--------------------------------------------
Its: Sec./Treas.
GENRAD, INC.
By /s/ James F. Lyons
--------------------------------------------
James F. Lyons, President
By /s/ Walter A. Shephard
-----------------------------------------
Walter A. Shephard, Treasurer
EXHIBIT 5
NUTTER, McCLENNEN & FISH, LLP
ATTORNEYS AT LAW
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110-2699
TELEPHONE: 617-439-2000 FACSIMILE: 617-973-9748
CAPE COD OFFICE DIRECT DIAL NUMBER
HYANNIS, MASSACHUSETTS
June 19, 1998
21326-59
GenRad, Inc.
7 Technology Park Drive
Westford, MA 01886-0033
Gentlemen/Ladies:
Reference is made to that certain Shelf Registration Statement on Form S-3
(the "Registration Statement") which GenRad, Inc. (the "Company") is filing on
the date hereof with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to the resale of up
to 1,237,917 shares (the "Shares") of the Company's common stock, $1.00 par
value per share, acquired by the holders thereof (the "Holders") in connection
with the Company's acquisition by merger of Industrial Computer Corporation.
We have acted as counsel for the Company in connection with the
Registration Statement. We have examined original or certified copies of the
Articles of Organization of the Company, the Company's By-laws, certain
corporate records of the Company, certificates of public officials and such
other documents, records and materials as we have deemed necessary in connection
with this opinion letter. Based upon the foregoing, and in reliance upon
information from time to time furnished to us by the Company's officers,
directors and agents, we are of the opinion that the Shares, when sold by the
Holders upon the terms described in the Registration Statement, will be duly and
validly issued, fully paid and non-assessable.
We understand that this opinion letter is to be used in connection with the
Registration Statement, as finally amended, and hereby consent to the filing of
this opinion letter with and as a part of the Registration Statement as so
amended, and to the reference to our firm in the Prospectus under the heading
"Legal Matters." It is understood that this opinion letter is to be used in
connection with the resale of the aforesaid Shares only while the Registration
Statement is effective as so amended and as it may be amended from time to time
as contemplated by Section 10(a)(3) of the Securities Act.
<PAGE>
NUTTER, MCCLENNEN & FISH, LLP
GenRad, Inc.
June 19, 1998
Page 2
Very truly yours,
/s/ Nutter, McClennen & Fish, LLP
Nutter, McClennen & Fish, LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 26, 1998, which appears on page 20 of the 1997 Annual Report to
Shareholders of GenRad, Inc., which is incorporated by reference in GenRad,
Inc.'s Annual Report on Form 10-K for the year ended January 3, 1998. We also
consent to the application of such report to the Financial Statement Schedule
for the three years ended January 3, 1998 when such schedule is read in
conjunction with the financial statements referred to in our report. We also
consent to the reference to us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Boston, Massachusetts
June 19, 1998
