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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
DATA SWITCH CORPORATION
(Name of Issuer)
COMMON STOCK, $0.01 PAR VALUE
(Title of Class of Securities)
237863105
(CUSIP Number)
EDGAR J. SMITH, ESQ.
Vice President, General Counsel and Secretary
General Signal Corporation
One High Ridge Park
P.O. Box 10010
Stamford, Connecticut 06904
(203) 329-4100
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
Copy to:
W. LESLIE DUFFY, ESQ.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
(212) 701-3000
May 8, 1995
(Date of Event which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ X]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
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CUSIP No. 237863105
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(1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
General Signal Corporation I.R.S. No. 16-0445660
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(2) Check the Appropriate Row if a Member of a Group
(a) [ ]
(b) [ ]
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(3) SEC Use Only
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(4) Source of Funds
OO (See Item 3)
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Item 2(d) or 2(e) [ ]
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(6) Citizenship or Place of Organization
New York
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(7) Sole Voting Power 0
----------------------------------------------------
(8) Shared Voting Power 2,041,275 shares, subject
to the Letter Agreement, dated May 8,
1995, attached hereto as Exhibit (3) (See
Number of Shares Item 5)
Beneficially Owned
by Each Reporting ----------------------------------------------------
Person With (9) Sole Dispositive Power 0
----------------------------------------------------
(10) Shared Dispositive Power 0
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
2,041,275 shares, subject to the Letter Agreement, dated May 8, 1995,
attached hereto as Exhibit (3) (See Item 5)
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
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(13) Percent of Class Represented by Amount in Row (11) Approximately
16.3% (See Item 5)
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(14) Type of Reporting Person
CO
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CUSIP No. 237863105
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(1) Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
General Signal Acquisition Corporation I.R.S. No. 06-1313676
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(2) Check the Appropriate Row if a Member of a Group
(a) [ ]
(b) [ ]
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(3) SEC Use Only
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(4) Source of Funds
OO (See Item 3)
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Item 2(d) or 2(e) [ ]
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(6) Citizenship or Place of Organization
Delaware
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(7) Sole Voting Power 0
----------------------------------------------------
(8) Shared Voting Power 2,041,275 shares, subject
to the Letter Agreement, dated May 8,
1995, attached hereto as Exhibit (3) (See
Number of Shares Item 5)
Beneficially Owned
by Each Reporting ----------------------------------------------------
Person With (9) Sole Dispositive Power 0
----------------------------------------------------
(10) Shared Dispositive Power 0
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
2,041,275 shares, subject to the Letter Agreement, dated May 8, 1995,
attached hereto as Exhibit (3) (See Item 5)
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
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(13) Percent of Class Represented by Amount in Row (11) Approximately
16.3% (See Item 5)
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(14) Type of Reporting Person
CO
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Item 1. Security and Issuer
This statement relates to the Common Stock, par value
$.01 per share (the "Common Stock"), of Data Switch Corporation
(the "Company"), the principal executive offices of which are
located at One Enterprise Drive, Shelton, Connecticut 06484.
Item 2. Identity and Background
This statement is being filed by General Signal Cor-
poration, a New York corporation ("Parent"), and General Signal
Acquisition Corporation, a Delaware corporation ("Merger Sub") and
a wholly-owned subsidiary of Parent. Parent manufactures
equipment for the process control, electrical and industrial
technology industries. Merger Sub was formed to acquire the
Company. The principal executive offices of Parent and Merger
Sub are located at One High Ridge Park, Stamford, Connecticut
06904.
During the last five years, neither Parent, Merger Sub
nor, to the best of their knowledge, any of their directors or
executive officers, has been convicted in any criminal proceeding
(excluding traffic violations or similar misdemeanors) or has been
a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction as a result of which it, he, or she was or
is subject to a judgment, decree or final order enjoining
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future violations of, or prohibiting or mandating actions sub-
ject to, federal or state securities laws or finding any viola-
tions with respect to such laws.
Appendix I hereto sets forth additional information
relating to the directors and executive officers of Parent and
Merger Sub, which information is incorporated herein by
reference.
Item 3. Source and Amount of Funds or Other Consideration
Parent acquired shared voting power with respect to
the shares of Common Stock described below in connection with
the execution and delivery by Parent and Merger Sub of the
Merger Agreement described below. Parent did not pay any
amounts to acquire such shared voting power with respect to
such shares of Common Stock.
Item 4. Purpose of Transaction
Parent, Merger Sub and the Company entered into an
Agreement and Plan of Merger, dated as of May 8, 1995 (the
"Merger Agreement"), a copy of which is attached hereto as
Exhibit 1 and incorporated by reference herein. Pursuant to
the Merger Agreement, Merger Sub will, upon the terms and con-
ditions set forth therein, be merged with and into the Company
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(the "Merger"), with the Company being the surviving corpora-
tion in the Merger (the "Surviving Corporation") and each out-
standing share of Common Stock being automatically converted
into the right to receive the fraction of a share (the
"Exchange Ratio") of common stock, par value $1.00 per share,
of Parent ("Parent Common Stock") determined by dividing $4.55
by the arithmetic average of the closing price per share of
Parent Common Stock as reported on the New York Stock Exchange
composite tape for the thirty (30) consecutive trading days
ending with the last trading day prior to the scheduled date of
the special meeting of stockholders of the Company specified in
the proxy statement to be sent to such stockholders in connec-
tion with such special meeting; provided, however, that the
Exchange Ratio shall be calculated to five decimal places and
shall in no event be greater than 0.14677 of a share of Parent
Common Stock or less than 0.10581 of a share of Parent Common
Stock. Holders of Common Stock shall also have the right to
receive together with each share of Parent Common Stock issued
in the Merger pursuant to Section 2.01(a) of the Merger Agree-
ment, an associated common stock purchase right ("Parent Pur-
chase Right") pursuant to the Rights Agreement dated as of
March 7, 1986, as amended, between Parent and the Rights Agent
named therein. In the event of any change in Parent Common
Stock or the Common Stock by reason of any stock split,
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readjustment, stock dividend, exchange of shares, reclassifica-
tion, recapitalization or otherwise, the Exchange Ratio shall
be correspondingly adjusted. The Merger is subject to certain
conditions, including the approval of the Merger by the holders
of a majority of the outstanding shares of Common Stock of the
Company.
Following the Merger, (i) the Surviving Corporation
will be a direct wholly-owned subsidiary of Parent, (ii) the
Board of Directors of Merger Sub will be the initial Board of
Directors of the Surviving Corporation, (iii) the officers of
the Company will be the initial officers of the Surviving Cor-
poration, (iv) the Restated Certificate of Incorporation and
By-laws of the Company will be the Certificate of Incorporation
and By-laws of the Surviving Corporation, (v) the Common Stock
will no longer be quoted on NASDAQ or any other national secu-
rities exchange and (vi) the Surviving Corporation will no
longer be subject to the reporting requirements of Section 12
of the Exchange Act.
In connection with the execution of the Merger Agree-
ment and to facilitate the consummation of the Merger, Parent
entered into a Letter Agreement, dated as of May 8, 1995 (the
"Letter Agreement"), with Richard E. Greene, a copy of which is
attached hereto as Exhibit 2 and incorporated by reference
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herein. Pursuant to the Letter Agreement, Richard E. Greene
represented that he is the beneficial and/or record owner of
2,041,275 shares of Common Stock (the "Shares") and has the
right to acquire certain additional shares of Common Stock (the
"Rights"). Richard E. Greene agreed that at any meeting of the
stockholders of the Company and in any action by written con-
sent of the stockholders of the Company on or before
December 31, 1995, he will (a) vote the Shares and any Future
Shares (as defined below) in favor of the approval of the
Merger Agreement, the Merger and the other transactions contem-
plated thereby; and (b) vote the Shares and any Future Shares
against any proposal or offer (other than a proposal or offer
by Parent or its affiliates) for a tender or exchange offer,
merger, consolidation or other business combination involving
the Company or any subsidiary of the Company or any proposal to
acquire in any manner a substantial equity interest in, or a
substantial portion of the assets of, the Company or any of its
subsidiaries or a liquidation or dissolution of the Company.
Richard E. Greene has also granted Parent an irrevocable proxy
(the "Proxy"), a copy of which is attached hereto as Exhibit 3
and incorporated by reference herein, to vote the Shares and
any shares of Common Stock acquired after May 8, 1995, includ-
ing without limitations upon exercise of any Rights (the
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"Future Shares") as specified above. The Proxy shall remain in
effect until December 31, 1995.
Pursuant to the Letter Agreement, if prior to the
termination of the Merger Agreement pursuant to Section
10.01(b), (c) or (d) or 10.2 thereof any person shall have made
a bona fide proposal concerning a Business Combination Transac-
tion (as defined in the Merger Agreement) to the Company or its
stockholders and within twelve months after any such termina-
tion the Company or any of its subsidiaries effects a Business
Combination Transaction which Richard E. Greene has consented
to or voted the Shares or the Future Shares to approve or rat-
ify or in respect of which Richard E. Greene has taken any
action that would or could have the effect of increasing the
likelihood that such Business Combination Transaction is
effected, than he shall pay to Parent cash, by wire transfer of
immediately available funds, in an amount equal to the excess
of the amount realized by him in connection with such Business
Combination Transaction and $4.55 per Share.
The foregoing summaries of the Merger Agreement, the
Letter Agreement and the Proxy do not purport to be complete
and are subject to, and qualified in their entirety by refer-
ence to, all of the terms and provisions of the Merger Agree-
ment, the Letter Agreement and the Proxy.
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Except as set forth above, Parent and Merger Sub cur-
rently have no other plans or intentions that could result in
or relate to any of the transactions described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a) and (b) Pursuant to the Letter Agreement and the
Proxy, Parent may be deemed to beneficially own, for purposes
of Section 13(d) of the Exchange Act, 2,041,275 shares of Com-
mon Stock of the Company, representing approximately 16.3% of
the Company's outstanding shares of Common Stock (based upon
the Company's representation in the Merger Agreement that there
were 12,485,929 shares of Common Stock outstanding as of May 8,
1995). The filing of this statement shall not be construed as
an admission by Parent or Merger Sub that it is for the pur-
poses of Section 13(d) of the Exchange Act the beneficial owner
of such shares.
Parent has shared power pursuant to the Letter Agree-
ment to vote or to direct the vote of the 2,041,275 shares of
Common Stock beneficially owned by it in the manner set forth
in the Letter Agreement. Parent does not have sole power to
vote or to direct the vote or the sole or shared power to
<PAGE>
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dispose or to direct the disposition of any shares of Common
Stock.
To the best knowledge of Parent or Merger Sub, no director
or executive officer of Parent or Merger Sub owns any shares of
Common Stock.
(c) No transactions in the shares of Common Stock of
the Company were effected by Parent during the past 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings
or Relationships with Respect to Securities
of the Issuer
Except for the Merger Agreement, the Letter Agreement
and the Proxy, neither Parent, Merger Sub nor, to the best of their
knowledge, any other person named in Item 2 has any contracts,
arrangements, understandings or relationships (legal or other-
wise) with any person with respect to any securities of the
Company, including, but not limited to, transfer or voting of
any securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
<PAGE>
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Item 7. Material to be Filed as Exhibits
The following are filed as exhibits hereto:
Exhibit 1: Agreement and Plan of Merger, dated as of
May 8, 1995, among General Signal Corporation, General Signal
Acquisition Corporation and Data Switch Corporation.
Exhibit 2: Letter Agreement, dated as of May 8,
1995, between General Signal Corporation and Richard E. Greene.
Exhibit 3: Irrevocable Proxy, dated May 8, 1995, by
Richard E. Greene.
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SIGNATURE
After reasonable inquiry and to the best of its
knowledge and belief, the undersigned certifies that the infor-
mation set forth in this statement is true, complete and
correct.
Dated: May 17, 1995 GENERAL SIGNAL CORPORATION
By: /s/ Edgar J. Smith, Jr.
Name: Edgar J. Smith, Jr.
Title: Vice President,
General Counsel &
Secretary
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SIGNATURE
After reasonable inquiry and to the best of its
knowledge and belief, the undersigned certifies that the infor-
mation set forth in this statement is true, complete and
correct.
Dated: May 17, 1995 GENERAL SIGNAL ACQUISITION
CORPORATION
By: /s/ Edgar J. Smith, Jr.
Name: Edgar J. Smith, Jr.
Title: Vice President &
Secretary
<PAGE>
APPENDIX I
The following table sets forth the name, business
address, position with Parent or Merger Sub and principal occu-
pation or employment and the name and principal business of any
corporation or other organization in which such employment is
conducted of each director and executive officer of Parent and
Merger Sub. The principal business address of Parent and
Merger Sub is One High Ridge Park, Stamford, Connecticut 06904
and, unless otherwise indicated, the business address of each
person listed below is the aforesaid address. All of the indi-
viduals listed below are citizens of the United States. Direc-
tors of Parent and Merger Sub are indicated by an asterisk.
Parent
Position with Parent;
Name and Principal
Business Address Occupation or Employment
Ralph E. Bailey*................. Chairman of United Meridian
Corporation, a publicly traded
company engaged in making equity
investments in the oil and gas
industry. Chairman and Chief
Executive Officer of American
Bailey Corporation, a private
holding company, since April
1987. Also a director of The
Williams Companies, Inc. and
Rowan Companies, Inc.
Robert N. Brooks................. Vice President - Manufacturing
since March 1995. Previously,
held various management posi-
tions since joining G.S. Build-
ing Systems Corporation, a unit
of Parent, in 1974.
Van C. Campbell*................. Vice Chairman for Finance and
Administration since 1983 and a
director of Corning Incorpo-
rated. Also a director of
Armstrong World Industries,
Inc., Corning International
<PAGE>
A-2
Corporation and Dow Corning
Corporation.
Edmund M. Carpenter*............. Chairman and Chief Executive
Officer since May 1988. Also a
director of Campbell Soup Com-
pany, Dana Corporation and
Texaco Inc.
George Falconer.................. Vice President - Human
Resources since October 1986.
Ronald E. Ferguson*.............. Chairman and Chief Executive
Officer since 1987 and President
of General Re Corporation from
1983 to March 1995. Also a
director of Colgate-Palmolive
Company.
Nino J. Fernandez................ Vice President - Investor
Relations since May 1987.
Joel S. Friedman................. Senior Vice President - Opera-
tions since March 1987.
Philip A. Goodrich............... Vice President - Corporate
Development since December 1991.
Previously, Director of Corpo-
rate Development since May 1989.
John P. Horgan*.................. Private investor since 1971.
Also a director of DTX
Corporation.
C. Robert Kidder*................ Chairman and Chief Executive
Officer of Borden, Inc. since
January 1995. Chairman of the
Board of Duracell International,
Inc. from October 1994 to Janu-
ary 1995. Chairman of the Board
and Chief Executive Officer of
Duracell International, Inc.
from April 1992 to October 1994.
Chairman of the Board, President
and Chief Executive Officer of
Duracell International, Inc.
from August 1991 until
April 1992. President and Chief
<PAGE>
A-3
Executive Officer of Duracell
International, Inc. from June
1988 until August 1991. Also a
director of Dean Witter, Dis-
cover & Co. and Duracell Inter-
national, Inc.
Richard J. Kogan*................ President and Chief Operating
Officer since January 1986 and a
director of Schering-Plough Cor-
poration. Also a director of
Atlantic Reinsurance Company,
Centennial Insurance Company
National Westminster Bancorp,
Inc., and a Trustee of the
Atlantic Mutual Insurance
Company.
Michael D. Lockhart*............. President and Chief Operating
Officer since October 1994.
Previously, Vice President and
General Manager from 1992 to
1994 of General Electric's Com-
mercial Engines and Services
division, and Vice President and
General Manager of Transporta-
tion Systems from 1989 to 1992.
Terence D. Martin................ Executive Vice President and
Chief Financial Officer since
February 1995. Previously,
Chief Financial Officer of Amer-
ican Cyanamid Company since 1991
and Treasurer since 1988.
Terry J. Mortimer................ Vice President and Controller
since May 1990. Previously
Director - Finance and Chief
Accountant for Apple Computer
since June 1988.
Roland W. Schmitt*............... President Emeritus since July
1993 and President of Rensselaer
Polytechnic Institute from March
1988 to July 1993. Also a mem-
ber and former Chairman of the
National Science Board and
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A-4
former Councillor of the
National Academy of Engineering.
John R. Selby*................... Former Chairman from 1986 to
November 1993 and Chief Execu-
tive Officer from 1971 to Novem-
ber 1993 of SPS Technologies,
Inc. Also a director of Berwind
Industries, Inc.
Edgar J. Smith, Jr............... Vice President, General Coun-
sel, and Secretary since
April 1984, and Vice President
and General Counsel since
January 1980.
Thomas E. Taylor................. Vice President - Taxes since
September 1993. Previously with
Elf Aquitaine, Inc. as Vice
President - Taxes since 1985.
Julian B. Twombly................ Vice President and Treasurer
since December 1991. Prior to
joining Parent associated with
United Dominion Industries, Ltd.
since 1974, most recently as
Senior Vice President and
Treasurer.
Merger Sub
Position with Merger Sub;
Name and Principal
Business Address Occupation or Employment
Joel S. Friedman*............. For additional information please
see Appendix I - Parent above.
Michael D. Lockhart*.......... President of Merger Sub. For
additional information please see
Appendix I - Parent above.
Terence D. Martin............. Vice President of Merger Sub.
For additional information please
see Appendix I - Parent above.
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A-5
Edgar J. Smith, Jr.*.......... Vice President and Secretary of
Merger Sub. For additional infor-
mation please see Appendix I - Par-
ent above.
Thomas E. Taylor.............. Vice President of Merger Sub.
For additional information please
see Appendix I - Parent above.
Julian B. Twombly............. Vice President and Treasurer of
Merger Sub. For additional infor-
mation please see Appendix I - Par-
ent above.
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
to
SCHEDULE 13D
DATA SWITCH CORPORATION
<PAGE>
EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NO. DESCRIPTION PAGE NUMBER
1 -- Agreement and Plan of Merger,
dated as of May 8, 1995, among
General Signal Corporation,
General Signal Acquisition Cor-
poration and Data Switch
Corporation.
2 -- Letter Agreement, dated as of
May 8, 1995, between General
Signal Corporation and Richard
E. Greene.
3 -- Irrevocable Proxy, dated May 8,
1995, by Richard E. Greene.
Exhibit 1
AGREEMENT AND PLAN
OF MERGER
BY AND AMONG
GENERAL SIGNAL CORPORATION,
GENERAL SIGNAL ACQUISITION CORPORATION
AND
DATA SWITCH CORPORATION
DATED AS OF MAY 8, 1995
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
Section 1.01. The Merger ........................................ 2
Section 1.02. Effective Time .................................... 2
Section 1.03. Certificate of Incorporation and
By-Laws of Surviving Corporation ............... 2
Section 1.04. Directors and Officers of Surviving
Corporation .................................... 2
Section 1.05. Stockholders' Meeting ............................. 3
Section 1.06. Filing of Certificate of Merger ................... 3
Section 1.07. Further Assurances ................................ 3
ARTICLE II
CONVERSION OF SHARES
Section 2.01. Shares ............................................ 3
Section 2.02. Newco Common Stock ................................ 5
Section 2.03. Exchange of Shares ................................ 5
Section 2.04. Effect on Company Options ......................... 6
Section 2.05. Fractional Shares ................................. 7
Section 2.06. No Appraisal Rights ............................... 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND NEWCO
Section 3.01. Organization ...................................... 7
Section 3.02. Capitalization .................................... 8
Section 3.03. Authority Relative to This Agree-
ment ........................................... 8
Section 3.04. No Violations, Etc. ............................... 9
Section 3.05. Registration Statement; Proxy State-
ment ........................................... 10
Section 3.06. SEC Filings ....................................... 11
Section 3.07. Financial Statements .............................. 12
Section 3.08. Absence of Material Adverse Change ................ 12
Section 3.09. Litigation ........................................ 12
Section 3.10. Compliance with Law ............................... 13
Section 3.11. Disclosure ........................................ 13
Section 3.12 Finders or Brokers................................. 13
Section 3.13 Accounting Matters................................. 13
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.01. Organization and Qualification .................... 13
Section 4.02. Authority Relative to This Agree-
ment ........................................... 14
Section 4.03. No Violations, Etc. ............................... 15
Section 4.04. Board Recommendation .............................. 16
Section 4.05. Accounting Matters ................................ 16
Section 4.06. State Antitakeover Statutes ....................... 16
Section 4.07. Fairness Opinion .................................. 16
Section 4.08. Rights Agreement .................................. 16
Section 4.09. Affiliates ........................................ 17
Section 4.10. Stockholder Letter Agreement ...................... 17
Section 4.11. Registration Statement; Proxy State-
ment ........................................... 17
Section 4.12. Finders or Brokers ................................ 18
Section 4.13. SEC Filings ....................................... 18
Section 4.14. Financial Statements .............................. 19
Section 4.15. Absence of Undisclosed Liabilities ................ 19
Section 4.16. Absence of Changes or Events ...................... 19
Section 4.17. Capitalization .................................... 21
Section 4.18. Capital Stock of Subsidiaries ..................... 22
Section 4.19. Litigation ........................................ 22
Section 4.20. Insurance ......................................... 22
Section 4.21. Title to and Condition of
Properties ..................................... 23
Section 4.22. Leases; Contracts ................................. 23
Section 4.23. Contracts and Commitments ......................... 24
Section 4.24. Labor Matters ..................................... 25
Section 4.25. Compliance with Law ............................... 26
Section 4.26. Employment and Labor Contracts .................... 26
Section 4.27. Intellectual Property Rights ...................... 26
Section 4.28. Taxes ............................................. 27
Section 4.29. Employee Benefit Plans; ERISA ..................... 29
Section 4.30. Environmental Matters ............................. 33
Section 4.31. Directors, Officers and Compensation
of Employees ................................... 37
Section 4.32. Disclosure ........................................ 37
ARTICLE V
COVENANTS
Section 5.01. Conduct of Business of the Company ................ 38
Section 5.02. No Solicitation ................................... 41
Section 5.03. Access to Information ............................. 42
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Page
Section 5.04. Registration Statement and Proxy
Statement ...................................... 43
Section 5.05. Commercially Reasonable Efforts;
Other Actions .................................. 44
Section 5.06. Public Announcements .............................. 44
Section 5.07. Notification of Certain Matters ................... 45
Section 5.08. Indemnification ................................... 45
Section 5.09. Expenses .......................................... 46
Section 5.10. Affiliates ........................................ 46
Section 5.11. Stock Exchange Listings ........................... 46
Section 5.12. Company and Subsidiary Actions .................... 46
Section 5.13. Environmental Matters ............................. 47
Section 5.14. Resignation of Directors .......................... 47
Section 5.15. Stock Purchase Plan ............................... 47
Section 5.16. Company Rights Agreement .......................... 47
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS
OF PARENT, NEWCO AND THE COMPANY
Section 6.01. Registration Statement ............................ 48
Section 6.02. Stockholder Approval .............................. 48
Section 6.03. Listings .......................................... 48
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF PARENT AND NEWCO
Section 7.01. Representations and Warranties True ............... 48
Section 7.02. Performance ....................................... 49
Section 7.03. Certificates ...................................... 49
Section 7.04. Certain Proceedings ............................... 49
Section 7.05. Consents and Approvals ............................ 49
Section 7.06. Material Adverse Change ........................... 49
Section 7.07. Opinion of Counsel ................................ 50
Section 7.08. Tax Matters ....................................... 50
Section 7.09. Environmental Matters ............................. 50
Section 7.10. Average Market Value .............................. 50
Section 7.11. Other Matters ..................................... 50
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
Section 8.01. Representations and Warranties True ............... 51
Section 8.02. Performance ....................................... 51
Section 8.03. Certificates ...................................... 51
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Page
Section 8.04. Certain Proceedings ............................... 52
Section 8.05. Opinion of Counsel ................................ 52
ARTICLE IX
CLOSING
Section 9.01. Time and Place .................................... 52
Section 9.02. Filings at the Closing ............................ 52
ARTICLE X
TERMINATION AND ABANDONMENT
Section 10.01. Termination ....................................... 52
Section 10.02. Termination by Parent ............................. 53
Section 10.03. Termination by the Company ........................ 54
Section 10.04. Procedure for Termination ......................... 54
Section 10.05. Effect of Termination and Abandon-
ment ........................................... 54
ARTICLE XI
DEFINITIONS
Section 11.01. Terms Defined in This Agreement ................... 56
ARTICLE XII
MISCELLANEOUS
Section 12.01. Amendment and Modification ........................ 57
Section 12.02. Waiver of Compliance; Consents .................... 57
Section 12.03. Survivability; Investigations ..................... 58
Section 12.04. Notices ........................................... 58
Section 12.05. Assignment ........................................ 59
Section 12.06. Governing Law ..................................... 60
Section 12.07. Counterparts ...................................... 60
Section 12.08. Severability ...................................... 60
Section 12.09. Interpretation .................................... 60
Section 12.10. Entire Agreement .................................. 61
Signatures .......................................................... S-1
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<PAGE>
EXHIBITS
Exhibit A Amendment No. 1 to Rights Agreement
Exhibit B Form of Affiliate Letter
Exhibit C Form of Stockholder Letter
Agreement
Exhibit D-1 Form of Opinion of Parker Duryee
Rosoff & Haft
Exhibit D-2 Form of Opinion of Shawn A. Smith,
Esq.
Exhibit D-3 Form of Opinion of D. David Cohen,
Esq.
Exhibit E Form of Tax Opinion of Cahill
Gordon & Reindel
Exhibit F Form of Opinion of Cahill Gordon &
Reindel
Exhibit G Form of Company Officer's
Certificate
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<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 8, 1995
(the "Agreement"), by and among General Signal Corporation, a
New York corporation ("Parent"), General Signal Acquisition
Corporation, a Delaware corporation ("Newco"), which is a
direct wholly owned Subsidiary of Parent, and Data Switch Cor-
poration, a Delaware corporation (the "Company"). Newco and
the Company are hereinafter sometimes collectively referred to
as the "Constituent Corporations."
RECITALS
WHEREAS, Newco desires to merge with the Company and
the Company desires to merge with Newco, all upon the terms and
subject to the conditions of this Agreement;
WHEREAS, Parent and the Company desire that the
merger of Newco and the Company and the other transactions con-
templated by this Agreement result in a strategic alliance of
the products, markets, people, business and assets of the Com-
pany with products, markets, people, business, assets and capi-
tal strengths of Parent and believe that the combined opportu-
nities and prospects, in which their respective stockholders
will participate, will be greater than the opportunities and
prospects of the Company and the Parent separately;
WHEREAS, it is intended that the merger of Newco and
the Company be recorded for accounting purposes as a pooling of
interests, and for Federal income tax purposes as a tax-free
reorganization described in Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code") in which the
shareholders of the Company will receive voting shares of Par-
ent in exchange for their voting shares of the Company and
thereby continue to participate in the equity and appreciation
of the combined enterprise; and
WHEREAS, Parent, Newco and the Company desire to make
certain representations, warranties, covenants and agreements
in connection with the merger of Newco and the Company.
NOW, THEREFORE, in consideration of the premises and
the mutual representations, warranties, covenants, agreements
and conditions contained herein, the parties hereto agree as
follows:
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ARTICLE I
THE MERGER
Section 1.01 The Merger. (a) In accordance with
the provisions of this Agreement and the General Corporation
Law of the State of Delaware (the "Delaware Act"), at the
Effective Time (as hereinafter defined), Newco shall be merged
(the "Merger") with and into the Company, and the Company shall
be the surviving corporation (hereinafter sometimes called the
"Surviving Corporation") and shall continue its corporate exis-
tence under the laws of the State of Delaware. At the election
of Parent, any direct wholly owned subsidiary of Parent incor-
porated under the laws of the State of Delaware may be substi-
tuted for Newco as a Constituent Corporation in the Merger.
The name of the Surviving Corporation shall be "Data Switch
Corporation". At the Effective Time the separate existence of
Newco shall cease.
(b) The Merger shall have the effects on Newco and
the Company as constituent corporations of the Merger as pro-
vided under the Delaware Act.
Section 1.02 Effective Time. The Merger shall
become effective at the time of filing of, or at such later
time specified in, a certificate of merger, in the form
required by and executed in accordance with the Delaware Act,
with the Secretary of State of the State of Delaware in accor-
dance with the provisions of { 251 of the Delaware Act (the
"Certificate of Merger"). The date and time when the Merger
shall become effective is herein referred to as the "Effective
Time."
Section 1.03 Certificate of Incorporation and
By-Laws of Surviving Corporation. The Restated Certificate of
Incorporation and By-Laws of the Company, as in effect immedi-
ately prior to the Effective Time, shall be the Certificate of
Incorporation and By-Laws of the Surviving Corporation until
thereafter amended as provided by law.
Section 1.04 Directors and Officers of Surviving
Corporation. The directors of Newco immediately prior to the
Effective Time will be the initial directors of the Surviving
Corporation, and the officers of the Company immediately prior
to the Effective Time will be the initial officers of the Sur-
viving Corporation, in each case until their successors are
elected and qualified.
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Section 1.05 Stockholders' Meeting. The Company
will take all action necessary in accordance with applicable
law and its Restated Certificate of Incorporation and By-Laws
to convene a special meeting of its stockholders (the "Special
Meeting") as soon as practicable to consider and vote upon the
approval of this Agreement. The Company, through its Board of
Directors, shall recommend to its stockholders approval of this
Agreement (which recommendation shall be contained in the Proxy
Statement (as hereinafter defined)) and shall use all commer-
cially reasonable efforts to solicit from its stockholders
proxies in favor of approval and adoption of this Agreement.
Section 1.06 Filing of Certificate of Merger. At
the Closing (as hereinafter defined), Parent, Newco and the
Company shall cause a Certificate of Merger to be executed and
filed with the Secretary of State of the State of Delaware as
provided in { 251 of the Delaware Act, and shall take any and
all other lawful actions and do any and all other lawful things
to cause the Merger to become effective.
Section 1.07 Further Assurances. If, at any time
after the Effective Time, the Surviving Corporation shall con-
sider 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 of the rights, properties or assets of either of
the Constituent Corporations acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with,
the Merger or otherwise to carry out this Agreement, the offic-
ers and directors of the Surviving Corporation shall be autho-
rized to execute and deliver, in the name and on behalf of each
of the Constituent Corporations or otherwise, all such deeds,
bills of sale, assignments and assurances and to take and do,
in the name and on behalf of each of the Constituent Corpora-
tions or otherwise, 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, proper-
ties or assets in the Surviving Corporation or otherwise to
carry out this Agreement.
ARTICLE II
CONVERSION OF SHARES
Section 2.01 Shares. (a) At the Effective Time,
each share of common stock, par value $.01 per share, of the
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Company (the "Company Common Stock") issued and outstanding
immediately prior to the Effective Time (except for shares
owned by the Company as treasury stock or owned by any Subsid-
iary of the Company) shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted into
the right to receive the fraction of a share (the "Exchange
Ratio") of common stock, par value $1.00 per share, of Parent
("Parent Common Stock") determined by dividing $4.55 by the
Average Market Value (as hereinafter defined); provided, how-
ever, that the Exchange Ratio shall be calculated to five deci-
mal places and shall in no event be greater than 0.14677 of a
share of Parent Common Stock or less than 0.10581 of a share of
Parent Common Stock. Holders of Company Common Stock shall
also have the right to receive together with each share of Par-
ent Common Stock issued in the Merger pursuant to this Section
2.01(a), an associated common stock purchase right ("Parent
Purchase Right") pursuant to the Rights Agreement dated as of
March 7, 1986, as amended, between Parent and the Rights Agent
named therein. References herein to the Company Common Stock
being converted in the Merger shall be deemed to include the
associated Company Purchase Rights (as hereinafter defined) and
to the Parent Common Stock issuable in the Merger shall be
deemed to include the associated Parent Purchase Rights.
The shares of Parent Common Stock and Parent Purchase
Rights to be delivered by Parent in exchange for shares of Com-
pany Common Stock pursuant to this Section 2.01(a) are herein-
after sometimes called the "Closing Consideration." "Average
Market Value" shall mean the arithmetic average of the closing
price per share of Parent Common Stock as reported on the New
York Stock Exchange (the "NYSE") composite tape for the thirty
(30) consecutive trading days ending with the last trading day
prior to the scheduled date of the Special Meeting specified in
the Proxy Statement. In the event of any change in Parent Com-
mon Stock or Company Common Stock by reason of any stock split,
readjustment, stock dividend, exchange of shares, reclassifica-
tion, recapitalization or otherwise, the Exchange Ratio shall
be correspondingly adjusted.
(b) At the Effective Time, all shares of Company
Common Stock, by virtue of the Merger and without any action on
the part of the holders thereof, shall no longer be outstanding
and shall be cancelled and retired and shall cease to exist,
and each holder of a certificate representing any such shares
of Company Common Stock shall thereafter cease to have any
rights with respect to such shares of Company Common Stock,
except the right to receive the Closing Consideration for such
<PAGE>
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shares of Company Common Stock specified in the foregoing
clause (a) upon the surrender of such certificate in accordance
with Section 2.03.
Section 2.02 Newco Common Stock. All shares of com-
mon stock, par value $.01 per share, of Newco issued and out-
standing immediately prior to the Effective Time shall, by vir-
tue of the Merger and without any action on the part of the
holder thereof, be converted at the Effective Time into such
number of newly issued shares of common stock of the Surviving
Corporation as shall equal the sum of (x) the number of shares
of Company Common Stock outstanding immediately prior to the
Effective Time and (y) the number of shares of Company Common
Stock underlying options to purchase Company Common Stock
assumed by Parent pursuant to Section 2.04.
Section 2.03 Exchange of Shares. (a) Promptly
after the Effective Time, Parent shall mail to each record
holder, as of the Effective Time, of an outstanding certificate
or certificates which immediately prior to the Effective Time
represented shares of Company Common Stock (the "Certificates")
a form letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certifi-
cates shall pass, only upon proper delivery of the Certificates
to Parent or Parent's designated agent) and instructions for
use in effecting the surrender of the Certificates for
exchange. Upon surrender to Parent of a Certificate, together
with such letter of transmittal duly executed together with any
other required documents, the holder of such Certificate shall
be entitled to receive from Parent in exchange therefor that
number of shares of Parent Common Stock which such holder has
the right to receive under this Article II, and such Certifi-
cate shall forthwith be cancelled. If any shares of Parent
Common Stock are to be issued to a person other than the person
in whose name the Certificate surrendered is registered, it
shall be a condition of exchange that the Certificate so sur-
rendered shall be properly endorsed or otherwise in proper form
for transfer and that the person requesting such exchange shall
pay any transfer or other taxes required by reason of the
exchange to a person other than the registered holder of the
Certificate surrendered or such person shall establish to the
satisfaction of the Surviving Corporation that such tax has
been paid or is not applicable. Until surrendered in accor-
dance with the provisions of this Section 2.03, each Certifi-
cate shall represent, for all purposes, the right to receive
the Closing Consideration in respect of the number of shares of
<PAGE>
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Company Common Stock evidenced by such Certificate, without any
interest thereon.
(b) From and after the Effective Time there shall be
no transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock which were
outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to the Surviving
Corporation, they shall be cancelled and exchanged as provided
in this Article II.
(c) Neither Parent nor the Surviving Corporation
shall be liable to any holder of shares of Company Common Stock
delivered to a public official pursuant to any applicable aban-
doned property, escheat or similar law.
Section 2.04 Effect on Company Options. (a) As of
the Effective Time, by virtue of the Merger and without any
action on the part of the holders thereof, each option to pur-
chase shares of Company Common Stock that is outstanding under
the Company Plans (as hereinafter defined) immediately prior to
the Effective Time, whether or not exercisable, shall be
assumed by Parent in such manner that each such option shall be
exercisable upon the same terms and conditions as under the
applicable Company Plan and the applicable option agreement
issued thereunder, except that (i) each such option shall be
exercisable for that number of shares of Parent Common Stock
(rounded up to the nearest whole share) into which the number
of shares of Company Common Stock subject to such option imme-
diately prior to the Effective Time would be converted under
Section 2.01 if such option were exercised prior to the Effec-
tive Time, and (ii) the option price per share of Parent Common
Stock shall be an amount equal to the option price per share of
Company Common Stock subject to such option in effect immedi-
ately prior to the Effective Time divided by the Exchange Ratio
(rounded up to the nearest whole cent); provided, however, that
in the case of options intended to qualify as "incentive stock
options" pursuant to Section 422 of the Code, any such adjust-
ment shall be made in such a manner as not to disqualify such
options as "incentive stock options."
(b) Prior to the Effective Time, the Company shall
(i) obtain any consents from holders of outstanding options to
purchase Company Common Stock granted under the Company Plans
and (ii) make any amendments to the terms of the Company Plans
or any award granted thereunder that, in the case of either (i)
or (ii), are necessary to give effect to the transactions
<PAGE>
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contemplated by this Section 2.04; provided, however, that any
such consents and amendments shall not change the vesting of
such options in accordance with their current terms.
Section 2.05 Fractional Shares. Notwithstanding any
other provision of this Agreement, each holder of shares of
Company Common Stock who upon surrender of Certificates would
be entitled to receive a fraction of a share of Parent Common
Stock shall not be entitled to receive dividends on or vote
such fractional share and shall receive, in lieu of such frac-
tional share, cash in an amount equal to such fraction multi-
plied by the Average Market Value. The fractional share inter-
ests of each Company stockholder will be aggregated, and no
Company stockholder will receive cash in an amount equal to or
greater than the value of one full share of Parent Common
Stock. The parties hereto agree that the total cash considera-
tion that will be paid to the Company stockholders in the
Merger instead of issuing fractional shares of Parent Common
Stock will not exceed one percent of the total consideration
that will be issued in the Merger to the Company stockholders
in exchange for their shares of Company Common Stock. All ref-
erences in this Agreement to shares of Parent Common Stock to
be issued as Closing Consideration shall be deemed to include
any cash in lieu of fractional shares payable pursuant to this
Section 2.05.
Section 2.06 No Appraisal Rights. This Agreement
provides that the stockholders of the Company shall be entitled
to notice of the Special Meeting. The Company Common Stock is
designated as a national market system security on NASDAQ and
the Parent Common Stock is listed on the NYSE and is contem-
plated to be so designated and listed at the record date for
the Special Meeting. Therefore, in accordance with { 262(b) of
the Delaware Act, no holder of shares of Company Common Stock
shall be entitled to appraisal rights.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF PARENT AND NEWCO
Each of Parent and Newco jointly and severally repre-
sents and warrants to the Company as follows:
Section 3.01 Organization. Parent is a corporation
duly organized, validly existing and in good standing under the
laws of the state of New York. Newco is a corporation duly
<PAGE>
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organized, validly existing and in good standing under the laws
of the state of Delaware. Newco has not engaged in any busi-
ness since it was incorporated other than in connection with
the transactions contemplated by this Agreement. Parent owns
directly all of the outstanding capital stock of Newco.
Section 3.02 Capitalization. The authorized capital
stock of Parent consists of 150,000,000 shares of Parent Common
Stock and 10,000,000 shares of preferred stock, par value $1.00
per share ("Parent Preferred Stock"). As of April 30, 1995,
there are 47,256,691 shares of Parent Common Stock issued and
outstanding (excluding treasury shares), 16,680,568 shares of
Parent Common Stock held in Parent's treasury, and no shares of
Parent Preferred Stock outstanding. As of April 30, 1995 there
were 2,891,245 shares of Parent Common Stock reserved for issu-
ance upon the exercise of outstanding options and options or
restricted stock which may be granted under the stock incentive
plans of Parent (the "Parent Plans"), 2,532,000 shares of Par-
ent Common Stock reserved for issuance upon the conversion of
the outstanding $100,000,000 aggregate principal amount of
5 3/4% Convertible Subordinated Notes due 2002 of Parent (the
"Convertible Notes"), 118,675 shares of Parent Common Stock
reserved for issuance upon the exercise of the outstanding war-
rants with an exercise price of $96.54 per share and an expira-
tion date of June 2, 1995 (the "1995 Warrants"), and
442,542.812 shares of Parent Common Stock reserved for issuance
upon the exercise of the outstanding warrants with an exercise
price of $65.9406 per share and an expiration date of April 23,
2002 (the "2002 Warrants"). Each share of Parent Common Stock
is, and each share of Parent Common Stock to be issued at the
Effective Time will be, when issued, accompanied by one Parent
Purchase Right. Except for the Parent Purchase Rights, the
Convertible Notes, the 1995 Warrants, the 2003 Warrants and the
options granted under the Parent Plans, there are not as of the
date hereof any existing options, warrants, calls, subscrip-
tions, or other rights or other agreements or commitments obli-
gating Parent to issue, transfer or sell any shares of its cap-
ital stock or any other securities convertible into or evidenc-
ing the right to subscribe for any such shares. All issued and
outstanding shares of Parent Common Stock are, and all shares
of Parent Common Stock to be issued at the Effective Time shall
be, when issued, duly authorized and validly issued, fully
paid, non-assessable and free of preemptive rights with respect
thereto.
Section 3.03 Authority Relative to This Agreement.
Each of Parent and Newco has full corporate power and authority
<PAGE>
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to execute and deliver this Agreement and to consummate the
Merger and the other transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation
of the Merger and the other transactions contemplated hereby
have been duly and validly authorized by the Board of Directors
of each of Parent and Newco and by Parent as the sole stock-
holder of Newco and no other corporate proceedings on the part
of Parent or Newco are necessary to authorize this Agreement or
to consummate the Merger or the other transactions contemplated
hereby. This Agreement has been duly and validly executed and
delivered by each of Parent and Newco and, assuming the due
authorization and delivery hereof by the Company, constitutes a
valid and binding agreement of each of Parent and Newco,
enforceable against each of them in accordance with its terms,
except to the extent that its enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting the enforcement of creditors' rights
generally or by general equitable or fiduciary principles.
Section 3.04 No Violations, Etc. (a) Assuming that
all filings, permits, authorizations, consents and approvals
have been duly made or obtained as contemplated by this Section
3.04, the execution and delivery of this Agreement and the con-
summation by Parent and Newco of the Merger and the other
transactions contemplated hereby will not (i) violate any pro-
vision of the Certificate of Incorporation or By-Laws of either
Parent or Newco, (ii) violate any statute, rule, regulation,
order or decree of any public body or authority by which Par-
ent, Newco or any of their properties is bound, or (iii) result
in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default under, any license,
franchise, permit, indenture, agreement or other instrument to
which Parent or Newco is a party, or by which Parent, Newco or
any of their properties is bound, excluding from the foregoing
clauses (ii) and (iii) violations, breaches and defaults
(x) which, either individually or in the aggregate, would not
either materially impair or preclude the ability of Parent or
Newco to consummate the Merger or the other transactions con-
templated hereby or have a material adverse effect on the busi-
ness, operations, assets, condition (financial or otherwise) or
results of operations of Parent and its Subsidiaries taken as a
whole ("Parent Material Adverse Effect") or (y) for which Par-
ent or Newco prior to the Merger shall have received appropri-
ate consents or waivers.
(b) No filing or registration with, or authoriza-
tion, consent or approval of, or notification to, any
<PAGE>
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governmental entity is required by Parent or Newco in connec-
tion with the execution and delivery of this Agreement or the
consummation by Parent and Newco of the Merger and the other
transactions contemplated hereby, except (i) in connection with
the applicable requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (ii) in
connection, or in compliance, with the provisions of the Secu-
rities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Securities Act"), (iii) the filing
of appropriate merger documents as required by { 251 of the
Delaware Act, (iv) such filings and consents as may be required
under any Environmental Law (as hereinafter defined) pertaining
to any notification, disclosure or required approval triggered
by the Merger or other transactions contemplated hereby,
(v) filings with, and approval of, the NYSE and the Pacific
Stock Exchange ("PSE") in connection with obligations of Parent
under Section 5.11, (vi) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may
be required under the corporation, takeover or blue sky laws of
various states and (vii) such other consents, orders, authori-
zations, registrations, declarations and filings the failure of
which to be obtained or made, either individually or in the
aggregate, would not either materially impair or preclude the
ability of Parent or Newco to consummate the Merger and the
other transactions contemplated hereby or have a Parent Mate-
rial Adverse Effect.
Section 3.05 Registration Statement; Proxy State-
ment. None of the information supplied by either Parent or
Newco for inclusion or incorporation by reference in (i) the
registration statement registering under the Securities Act the
Parent Common Stock to be issued at the Effective Time (such
registration statement as amended by any amendments thereto
being referred to herein as the "Registration Statement") or
(ii) the proxy statement/prospectus to be sent to the stock-
holders of the Company in connection with the Special Meeting,
including all amendments and supplements thereto (the "Proxy
Statement") shall, in the case of the Registration Statement,
at (i) the time the Registration Statement becomes effective
and (ii) the Effective Time, and in the case of the Proxy
Statement, on the date the Proxy Statement is first mailed to
stockholders, at the time of the Special Meeting and at the
Effective Time, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not mis-
leading. If at any time prior to the Effective Time any event
with respect to Parent or Newco shall occur which is required
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to be described in the Registration Statement or Proxy State-
ment, such event shall be so described, and an amendment or
supplement shall be promptly filed with the Securities and
Exchange Commission (the "SEC") and, as required by law, dis-
seminated to the stockholders of the Company. The Registration
Statement and Proxy Statement will (with respect to Parent and
Newco) comply as to form in all material respects with the
applicable provisions of the Securities Act and the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Exchange Act"), as the case may
be.
Section 3.06 SEC Filings. (a) Parent has filed
with the SEC all required forms, reports and documents required
to be filed by it with the SEC since January 1, 1993 (collec-
tively, the "Parent SEC Reports"), all of which complied as to
form when filed in all material respects with the applicable
provisions of the Securities Act and the Exchange Act, as the
case may be. As of their respective dates the Parent SEC
Reports (including all exhibits and schedules thereto and docu-
ments incorporated by reference therein) did not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
(b) Parent will deliver to the Company as soon as
they become available true and complete copies of any report or
statement mailed by it to its securityholders generally or
filed by it with the SEC, in each case subsequent to the date
hereof and prior to the Effective Time. As of their respective
dates, such reports and statements (excluding any information
therein provided by the Company, as to which Parent and Newco
make no representation) will not contain any untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not
misleading and will comply in all material respects with all
applicable requirements of law. The audited consolidated
financial statements and unaudited consolidated interim finan-
cial statements of Parent to be included or incorporated by
reference in such reports and statements will be prepared in
accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods involved
and will fairly present the consolidated financial position of
Parent as of the dates thereof and the consolidated results of
operations and consolidated cash flow for the periods then
<PAGE>
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ended (subject, in the case of any unaudited interim financial
statements, to normal year-end adjustments and to the extent
they may not include footnotes or may be condensed or summary
statements).
Section 3.07 Financial Statements. The audited con-
solidated financial statements and unaudited consolidated
interim financial statements of Parent and its Subsidiaries
included or incorporated by reference in Parent's forms,
reports and documents filed with the SEC since January 1, 1993
have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the
periods involved (except as may be indicated in the notes
thereto), and fairly present the consolidated financial posi-
tion of Parent and its Subsidiaries as of the dates thereof and
the consolidated results of operations and consolidated cash
flows for the periods then ended (subject, in the case of any
unaudited interim financial statements, to normal year-end
adjustments and to the extent they may not include footnotes or
may be condensed or summary statements) and such audited con-
solidated financial statements have been certified as such
(without exception) by Parent's independent accountants.
Section 3.08 Absence of Material Adverse Change.
Since December 31, 1994, except as set forth in the Parent SEC
Reports furnished to the Company prior to the delivery of this
Agreement, there has been no change, or any development involv-
ing a prospective change, in the business, operations, assets,
financial condition or results of operations of Parent and its
Subsidiaries taken as a whole that would have a Parent Material
Adverse Effect.
Section 3.09 Litigation. There is no (a) claim,
action, suit or proceeding pending or, to the best knowledge of
Parent, threatened against or relating to Parent or any of its
subsidiaries before any court or governmental or regulatory
authority or body or arbitration tribunal, or (b) outstanding
judgment, order, writ, injunction or decree, or application,
request or motion therefor, of any court, governmental agency
or arbitration tribunal in a proceeding to which Parent, any
subsidiary of Parent or any of their respective assets was or
is a party except, in the case of clauses (a) and (b) above,
such as would not, individually or in the aggregate, either
materially impair or preclude Parent's ability to consummate
the Merger or the other transactions contemplated hereby or
have a Parent Material Adverse Effect.
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Section 3.10 Compliance with Law. Neither Parent
nor any of its subsidiaries has violated or failed to comply
with any statute, law, ordinance, regulation, rule or order of
any foreign, federal, state or local government or any other
governmental department or agency, or any judgment, decree or
order of any court, applicable to its business or operations,
except where any such violation or failure to comply would not,
individually or in the aggregate, have a Parent Material
Adverse Effect. Parent and its Subsidiaries have all permits,
licenses and franchises from governmental agencies required to
conduct their businesses as now being conducted, except for
such permits, licenses and franchises the absence of which
would not, individually or in the aggregate, have a Parent
Material Adverse Effect.
Section 3.11 Disclosure. No representation or war-
ranty by Parent and no statement or information relating to
Parent or any of its Subsidiaries contained herein, or in any
certificate furnished by or on behalf of Parent or Newco to the
Company in connection herewith, contains or will contain any
untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements
herein or therein, in light of the circumstances under which
they were made, not misleading.
Section 3.12 Finders or Brokers. Except for
Donaldson, Lufkin & Jenrette Securities Corporation, neither
Parent nor Newco has employed any investment banker, broker,
finder or intermediary in connection with the transactions con-
templated hereby who might be entitled to a fee or any commis-
sion the receipt of which is conditioned upon consummation of
the Merger.
Section 3.13 Accounting Matters. Parent has not
taken or agreed to take any action that would prevent Parent
from accounting for the business combination to be effected by
the Merger as a "pooling of interests."
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and
Newco that:
Section 4.01 Organization and Qualification. Each
of the Company and its Subsidiaries is a corporation duly
<PAGE>
-14-
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite
corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
Each of the Company and its Subsidiaries is duly qualified as a
foreign corporation to do business, and is in good standing, in
each jurisdiction (as listed in Section 4.01 of the disclosure
statement being delivered confidentially to Parent by the Com-
pany to Parent concurrently with the execution and delivery of
this Agreement (the "Disclosure Statement")) where the char-
acter of its properties owned or leased or the nature of its
activities makes such qualification necessary, except for fail-
ures to be so qualified or in good standing which would not,
individually or in the aggregate, have a material adverse
effect on the business, operations, assets, condition (finan-
cial or otherwise) or prospects of the Company and its Subsid-
iaries taken as a whole (a "Company Material Adverse Effect");
provided, however, the matters described in Section 4.01 of the
Disclosure Statement shall not constitute, of themselves indi-
vidually or in the aggregate, a Company Material Adverse
Effect. Neither the Company nor any of its Subsidiaries is in
violation of any of the provisions of its Restated Certificate
of Incorporation (or other applicable charter document) or
By-laws. Set forth in Section 4.01 of the Disclosure Statement
are accurate and complete copies of the Restated Certificate of
Incorporation (or other applicable charter document) and
By-laws, as currently in effect, of each of the Company and its
Subsidiaries.
Section 4.02 Authority Relative to This Agreement.
The Company has full corporate power and authority to execute
and deliver this Agreement and to consummate the Merger and the
other transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the Merger
and the other transactions contemplated hereby have been duly
and validly authorized by the Board of Directors of the Company
and no other corporate proceedings on the part of the Company
are necessary to authorize this Agreement or to consummate the
Merger and the other transactions contemplated hereby (other
than, with respect to the Merger, the approval of a majority of
the outstanding shares of Company Common Stock at the Special
Meeting or any adjournment thereof as required by the Delaware
Act). This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due authorization,
execution and delivery hereof by Parent and Newco, constitutes
a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to the
<PAGE>
-15-
extent that its enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
laws affecting the enforcement of creditors' rights generally
or by general equitable or fiduciary principles.
Section 4.03 No Violations, Etc. Except for the
filings of the Certificate of Merger and the Proxy Statement,
the filing and effectiveness of the Registration Statement and
the filings required under and in compliance with the HSR Act
and as set forth in Section 4.03 of the Disclosure Statement,
no filing with, notification to and no permit, authorization,
consent or approval of, any governmental entity is necessary
for the consummation by the Company of the Merger or the other
transactions contemplated hereby, excluding from the foregoing,
permits, authorizations, consents, approvals and notices which
if not obtained, made or given, either individually or in the
aggregate, would not either (a) materially impair or preclude
the Company's ability to consummate the Merger or the other
transactions contemplated hereby, (b) otherwise materially
restrict Parent's or the Surviving Corporation's exercise of
full rights to own and operate the business of the Company or
(c) have a Company Material Adverse Effect. Neither the execu-
tion and delivery of this Agreement nor the consummation of the
Merger or the other transactions contemplated hereby nor com-
pliance by the Company with any of the provisions hereof will
(i) subject to obtaining the approval of a majority of the out-
standing shares of Company Common Stock at the Special Meeting
or any adjournment thereof as required by the Delaware Act,
conflict with or result in any breach of any provision of the
Restated Certificate of Incorporation (or other comparable
charter documents) or By-Laws of the Company or any of its Sub-
sidiaries, (ii) other than as set forth in Section 4.03 of the
Disclosure Statement, result in a violation or breach of, or
constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, can-
cellation, acceleration, redemption or repurchase) under, any
of the terms, conditions or provisions of any (x) note, bond,
mortgage, indenture, or deed of trust or (y) license, lease,
agreement or other instrument or obligation to which the Com-
pany or any of its Subsidiaries is a party or by which any of
them or any of their properties or assets may be bound or (iii)
violate any order, writ, injunction or decree applicable to the
Company, any of its Subsidiaries or any of their properties or
assets, excluding from the foregoing clauses (ii)(y) and (iii)
violations, breaches or defaults which, either individually or
in the aggregate, would not either materially impair or pre-
clude the Company's ability to consummate the Merger or the
<PAGE>
-16-
other transactions contemplated hereby or have a Company Mate-
rial Adverse Effect.
Section 4.04 Board Recommendation. The Board of
Directors of the Company has, by a unanimous vote at a meeting
of such Board duly held on, or by unanimous written consent of
such Board dated, May 5, 1995, approved and adopted this Agree-
ment, the Merger and the other transactions contemplated
hereby, determined that the consideration to be received by the
holders of shares of Company Common Stock pursuant to the
Merger is fair to the holders of such shares and recommended
that the holders of such shares approve and adopt this Agree-
ment, the Merger and the other transactions contemplated
hereby.
Section 4.05 Accounting Matters. The Company has
not taken or agreed to take any action that would prevent Par-
ent from accounting for the business combination to be effected
by the Merger as a "pooling of interests."
Section 4.06 State Antitakeover Statutes. The Com-
pany has granted all approvals and taken all other steps neces-
sary to exempt the Merger and the other transactions contem-
plated hereby (including, without limitation, the execution and
delivery to Parent of the Stockholder Letter Agreements (as
hereinafter defined)) from the requirements and provisions of
{ 203 of the Delaware Act and any other applicable state
antitakeover statute or regulation such that none of the provi-
sions of such { 203 or any other "business combination," "mora-
torium," "control share" or other state antitakeover statute or
regulation (x) prohibits or restricts the Company's ability to
perform its obligations under this Agreement or its ability to
consummate the Merger and the other transactions contemplated
hereby, (y) would have the effect of invalidating or voiding
this Agreement, any provision hereof or any Stockholder Letter
Agreement, or (z) would subject Parent or Newco to any material
impediment or condition in connection with the exercise of any
of their respective rights under this Agreement.
Section 4.07 Fairness Opinion. The Company has
received the opinion of Needham & Company to the effect that as
of the date hereof the financial terms of the Merger are fair
to the Company's stockholders from a financial point of view.
Section 4.08 Rights Agreement. The Rights Agreement
dated as of June 21, 1988 between the Company and Manufacturers
Hanover Trust Company (now Chemical Bank), as Rights Agent (the
<PAGE>
-17-
"Company Rights Agreement"), has been amended in the manner
provided in Exhibit A hereto to provide that none of Parent,
Newco or any of their affiliates will become an "Acquiring Per-
son" and that no "Triggering Event,", "Distribution Date" or
"Unapproved Transaction" (as such terms are defined in the Com-
pany Rights Agreement) will occur as a result of the approval,
execution or delivery of this Agreement or the consummation of
the Merger or the other transactions contemplated hereby,
including without limitation the execution and delivery to Par-
ent of the Stockholder Letter Agreements.
Section 4.09 Affiliates. Section 4.09 of the Dis-
closure Statement identifies all persons who, as of the date
hereof, may be deemed to be "affiliates" of the Company for
purposes of Rule 145 under the Securities Act ("Affiliates")
and the Company has delivered to Parent the written agreement
of each such person, substantially in the form of Exhibit B
hereto.
Section 4.10 Stockholder Letter Agreement. On or
prior to the date hereof, Richard E. Greene has delivered to
Parent a letter substantially in the form of Exhibit C hereto
(such letter a "Stockholder Letter Agreement").
Section 4.11 Registration Statement; Proxy State-
ment. None of the information supplied by the Company for
inclusion or incorporation by reference in the Registration
Statement or Proxy Statement shall, in the case of the Regis-
tration Statement, at the time the Registration Statement
becomes effective and the Effective Time, and in the case of
the Proxy Statement, at the date the Proxy Statement is first
mailed to stockholders, at the time of the Special Meeting and
at the Effective Time, contain any untrue statement of a mate-
rial fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. If at any time prior to the Effective
Time any event with respect to the Company or any of its Sub-
sidiaries shall occur which is required to be described in the
Registration Statement or Proxy Statement, such event shall be
so described, and an amendment or supplement shall be promptly
filed with the SEC and, as required by law, disseminated to the
stockholders of the Company. The Registration Statement and
Proxy Statement will (with respect to the Company and its Sub-
sidiaries) comply as to form in all material respects with the
applicable provisions of the Securities Act and Exchange Act,
as the case may be.
<PAGE>
-18-
Section 4.12 Finders or Brokers. Except for Needham
& Company, neither the Company nor any Subsidiary of the Com-
pany has employed any investment banker, broker, finder or
intermediary in connection with the transactions contemplated
hereby who might be entitled to a fee or any commission the
receipt of which is conditioned upon consummation of the
Merger.
Section 4.13 SEC Filings. (a) The Company has
filed with the SEC all required forms, reports and documents
required to be filed by it with the SEC since January 1, 1993
(collectively, the "Company SEC Reports"), all of which com-
plied as to form when filed in all material respects with the
applicable provisions of the Securities Act or the Exchange
Act, as the case may be. As of their respective dates the Com-
pany SEC Reports (including all exhibits and schedules thereto
and documents incorporated by reference therein) did not con-
tain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading.
(b) The Company will deliver to Parent as soon as
they become available true and complete copies of any report or
statement mailed by it to its securityholders generally or
filed by it with the SEC, in each case subsequent to the date
hereof and prior to the Effective Time. As of their respective
dates, such reports and statements (excluding any information
therein provided by Parent or Newco, as to which the Company
makes no representation) will not contain any untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not
misleading and will comply in all material respects with all
applicable requirements of law. The audited consolidated
financial statements and unaudited consolidated interim finan-
cial statements of the Company and its Subsidiaries to be
included or incorporated by reference in such reports and
statements will be prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved and will fairly present the
consolidated financial position of the Company and its Subsid-
iaries as of the dates thereof and the consolidated results of
operations and consolidated cash flow for the periods then
ended (subject, in the case of any unaudited interim financial
statements, to normal year-end adjustments and to the extent
<PAGE>
-19-
they may not include footnotes or may be condensed or summary
statements).
Section 4.14 Financial Statements. The audited con-
solidated financial statements and unaudited consolidated
interim financial statements of the Company and its Subsidiar-
ies included or incorporated by reference in the Company's
forms, reports and documents filed with the SEC since December
31, 1990 have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis
during the periods involved, and fairly present the consoli-
dated financial position of the Company and its Subsidiaries as
of the dates thereof and the consolidated results of operations
and consolidated cash flows for the periods then ended (sub-
ject, in the case of any unaudited interim financial state-
ments, to normal year-end adjustments and to the extent they
may not include footnotes or may be condensed or summary state-
ments) and such audited financial statements have been certi-
fied as such (without exception) by the Company's independent
accountants.
Section 4.15 Absence of Undisclosed Liabilities.
Neither the Company nor its Subsidiaries has any liabilities or
obligations of any nature, whether absolute, accrued,
unmatured, contingent or otherwise, or any unsatisfied judg-
ments or any leases of personalty or realty or unusual or
extraordinary commitments, except (a) the liabilities recorded
on the Balance Sheet (as hereinafter defined) and the notes
thereto, and (b) the liabilities or obligations incurred since
December 31, 1994 in the ordinary course of business and con-
sistent with past practice that would not, individually or in
the aggregate, have a Company Material Adverse Effect.
Section 4.16 Absence of Changes or Events. Since
December 31, 1994 (except with respect to the matters specified
in clause (a) which shall be since December 31, 1992):
(a) except as set forth in Section 4.16(a) of the
Disclosure Schedule, there has not been any direct or
indirect redemption, purchase or other acquisition of any
shares of capital stock of the Company or any of its Sub-
sidiaries, or any declaration, setting aside or payment of
any dividend or other distribution by the Company or any
of its Subsidiaries in respect of their capital stock
(other than dividends or other distributions payable
solely to the Company or a wholly owned Subsidiary of the
Company);
<PAGE>
-20-
(b) except as set forth in Section 4.16(b) of the
Disclosure Schedule or except in the ordinary course of
business and consistent with past practice, neither the
Company nor any of its Subsidiaries has incurred any
indebtedness for borrowed money, or assumed, guaranteed,
endorsed or otherwise as an accommodation become respon-
sible for the obligations of any other individual, firm or
corporation, made any loans or advances to any other indi-
vidual, firm or corporation or entered into any commitment
or transaction material to the Company and its Subsidiar-
ies taken as a whole;
(c) there has not been any change in accounting
methods, principles or practices of the Company;
(d) except in the ordinary course of business and
consistent with past practice and in amounts that are
immaterial, there has not been any revaluation by the Com-
pany or any of its Subsidiaries of any of their respective
assets, including without limitation, writing down the
value of inventory or writing off notes or accounts
receivables;
(e) there has not been any damage, destruction or
loss, whether covered by insurance or not, except for such
as would not, individually or in the aggregate, have a
Company Material Adverse Effect;
(f) there has been no change, or any development
involving a prospective change, in the general affairs,
business, operations, condition (financial or otherwise)
or prospects of the Company and its Subsidiaries, except
for changes or prospective changes that would not, indi-
vidually or in the aggregate, have a Company Material
Adverse Effect; and
(g) there has not been any agreement by the Company
or any of its Subsidiaries to (i) do any of the things
described in the preceding clauses (a) through (f) other
than as expressly contemplated or provided for in this
Agreement or (ii) take, whether in writing or otherwise,
any action which, if taken prior to the date of this
Agreement, would have made any representation or warranty
in this Article IV untrue or incorrect in any material
respect.
<PAGE>
-21-
As of the date hereof (i) Richard E. Greene has unconditionally
committed to repay in full in cash all outstanding loans owed
by him to the Company, in an aggregate principal amount of
approximately $593,000, and thereupon the Company will have no
security interest in, option to purchase or right of first
refusal or other right or interest with respect to, any shares
of Company Common Stock owned by Mr. Greene and (ii) all
options to purchase shares of Company Common Stock issued by
the Company in November, 1994 to directors of the Company have
been cancelled and are of no further force or effect.
Section 4.17 Capitalization. The authorized capital
stock of the Company consists of 20,000,000 shares of Company
Common Stock and 100,000 shares of Convertible Preferred Stock,
par value $10.00 per share (the "Company Preferred Stock"). As
of the date hereof, there are 12,485,929 shares of Company Com-
mon Stock and no shares of Company Preferred Stock outstanding
and 48,429 shares of Company Common Stock held in the Company's
treasury. As of the date hereof (i) 1,577,546 shares of Com-
pany Common Stock were reserved for issuance upon the exercise
of outstanding options, and 340,454 shares of Company Common
Stock were reserved for issuance upon the exercise of options
which may be granted under the stock option plans of the Com-
pany listed in Section 4.29 of the Disclosure Statement (the
"Company Plans"), (ii) 110,112 shares of Company Common Stock
were reserved for issuance upon the exercise of outstanding
warrants to purchase Company Common Stock and (iii) 2,682,948
shares of Company Common Stock were reserved for issuance upon
the conversion of the Company's outstanding 9% Convertible Sub-
ordinated Debentures due 1996 and 8 1/4% Convertible Subordi-
nated Debentures due 2002, all of which options, plans, war-
rants and convertible debt securities are listed and described
in Section 4.17 of the Disclosure Statement (the "Company Com-
mon Stock Equivalents"). Each share of Company Common Stock is
accompanied by one Purchase Right (the "Company Purchase
Rights") pursuant to the Company Rights Agreement. Except for
the Company Purchase Rights and the Company Common Stock Equiv-
alents there are not any existing options, warrants, calls,
subscriptions, or other rights or other agreements or commit-
ments obligating the Company to issue, transfer or sell any
shares of capital stock of the Company or any of its Subsidiar-
ies or any other securities convertible into or evidencing the
right to subscribe for any such shares. There are no outstand-
ing stock appreciation rights with respect to the capital stock
of the Company or any of its Subsidiaries. All issued and out-
standing shares of Company Common Stock are duly authorized and
<PAGE>
-22-
validly issued, fully paid, non-assessable and free of preemp-
tive rights with respect thereto.
Section 4.18 Capital Stock of Subsidiaries. The
only direct or indirect subsidiaries of the Company are those
listed in Section 4.18 of the Disclosure Statement ("Subsidiar-
ies"). The Company is directly or indirectly the record
(except for directors' qualifying shares as reflected in Sec-
tion 4.18 of the Disclosure Statement) and beneficial owner
(including all such qualifying shares) of all of the outstand-
ing shares of capital stock of each of its Subsidiaries, there
are no proxies with respect to such shares, and there are not
any existing options, warrants, calls, subscriptions, or other
rights or other agreements or commitments obligating any of
such Subsidiaries to issue, transfer or sell any shares of cap-
ital stock of such Subsidiary or any other securities convert-
ible into or evidencing the right to subscribe for any such
shares. Other than as set forth in Section 4.18 of the Disclo-
sure Statement, all of such shares so owned by the Company are
duly authorized and validly issued, fully paid, nonassessable
and free of preemptive rights with respect thereto and are
owned by the Company free and clear of any claim, lien or
encumbrance of any kind with respect thereto. Except as dis-
closed in Section 4.18 of the Disclosure Statement, the Company
does not directly or indirectly own any interest in any corpo-
ration, partnership, joint venture or other business associa-
tion or entity.
Section 4.19 Litigation. There is no (i) claim,
action, suit or proceeding pending or, to the best knowledge of
the Company, threatened against or relating to the Company or
any of its Subsidiaries before any court or governmental or
regulatory authority or body or arbitration tribunal, or
(ii) outstanding judgment, order, writ, injunction or decree,
or application, request or motion therefor, of any court, gov-
ernmental agency or arbitration tribunal in a proceeding to
which the Company, any Subsidiary of the Company or any of
their respective assets was or is a party except, in the case
of clauses (i) and (ii) above, such as would not, individually
or in the aggregate, either materially impair or preclude the
Company's ability to consummate the Merger or the other trans-
actions contemplated hereby or have a Company Material Adverse
Effect.
Section 4.20 Insurance. Section 4.20 of the Disclo-
sure Statement lists all material insurance policies in force
on the date hereof covering the businesses, properties and
<PAGE>
-23-
assets of the Company and its Subsidiaries and all outstanding
claims against such policies. All such policies are currently
in effect and true and complete copies of all such policies
have been delivered to Parent. Except as set forth in Section
4.20 of the Disclosure Statement, the Company has not received
notice of the cancellation of any of such insurance in effect
on the date of this Agreement.
Section 4.21 Title to and Condition of Properties.
Except as set forth in Section 4.21 of the Disclosure State-
ment, the Company and its Subsidiaries have good title to all
of the real property and own outright all of the personal prop-
erty which is reflected on the Company's and its Subsidiaries'
December 31, 1994 audited consolidated balance sheet contained
in the Company's Form 10-K for the fiscal year ended December
31, 1994 filed with the SEC (the "Balance Sheet") except for
property since sold or otherwise disposed of in the ordinary
course of business and consistent with past practice. Except
as set forth in Section 4.21 of the Disclosure Statement, no
such real or personal property is subject to claims, liens or
encumbrances, whether by mortgage, pledge, lien, conditional
sale agreement, charge or otherwise, except for those which
would not, individually or in the aggregate, either materially
impair or preclude the Company's ability to consummate the
Merger and the other transactions contemplated hereby or have a
Company Material Adverse Effect.
Section 4.22 Leases; Contracts. (a) There have
been delivered to Parent true and complete copies of each lease
requiring the payment of rentals aggregating at least $100,000
per annum pursuant to which either (i) real or personal prop-
erty is held under lease by the Company or any of its Subsid-
iaries or (ii) the Company or any of its Subsidiaries leases
real or personal property to others. A true and complete list
of all such leases is set forth in Section 4.22 (a) of the Dis-
closure Statement. All of the leases so listed are valid and
subsisting and in full force and effect with respect to the
Company and its Subsidiaries, as the case may be, and, to the
Company's knowledge, with respect to any other party thereto,
and the leased real property is in good and satisfactory
condition.
(b) Except as set forth in Section 4.22(b) of the
Disclosure Statement, the Company has not breached any material
term of, or any applicable regulations with respect to, any
contract with, or any contract constituting a subcontract with
<PAGE>
-24-
respect to, the General Services Administration or any other
governmental agency or authority.
Section 4.23 Contracts and Commitments. Except as
are listed in Section 4.23 of the Disclosure Statement, the
Company is not a party to any existing contract, obligation or
commitment of any type (other than those referred to in Section
4.22, 4.24, 4.26 or 4.27 of the Disclosure Statement) in any of
the following categories:
(a) any sales contract, including any open bid or
quotation, which is of an open-end or blanket nature or
contains warranties in excess of those consistent with
industry practice, or contains unusual penalty provisions
for late performance, or was incurred other than in the
ordinary course of business and consistent with past
practice;
(b) contracts for the purchase of materials, sup-
plies or equipment which have not been entered into in the
ordinary course of business and consistent with past prac-
tice or which provide for purchase prices substantially
greater than those presently prevailing for such materi-
als, supplies or equipment, or contracts for capital
expenditures in excess of $100,000;
(c) contracts with distributors, manufacturers' rep-
resentatives or sales agents, except those which are ter-
minable at the option of the Company or its assignees on
60 days' notice or less without incurring any liability
thereby;
(d) contracts under which the Company has, except by
way of endorsement of negotiable instruments for collec-
tion in the ordinary course of business and consistent
with past practice, become absolutely or contingently or
otherwise liable for (i) the performance of any other per-
son, firm or corporation under a contract, or (ii) the
whole or any part of the indebtedness or liabilities of
any other person, firm or corporation;
(e) powers of attorney outstanding from the Company
other than as issued in the ordinary course of business
and consistent with past practice with respect to customs,
insurance, patent, trademark or tax matters, or to agents
for service of process;
<PAGE>
-25-
(f) contracts under which any amount payable by the
Company is dependent upon the revenues or profits of the
Company;
(g) contracts with any director, officer or employee
of the Company other than in such person's capacity as a
director, officer or employee of the Company;
(h) contracts which limit or restrict where the Com-
pany or any of its Subsidiaries may conduct its or their
business or the type or line of business which the Company
or any of its Subsidiaries may engage in;
(i) material contracts containing any provisions
with respect to any change of control;
(j) contracts with any party for the loan of money
or availability of credit to or from the Company or any of
its Subsidiaries (except credit extended by the Company or
any of its Subsidiaries to its or their customers in the
ordinary course of business and consistent with past prac-
tice); or
(k) any hedging, option, derivative or other similar
transaction.
True and complete copies of all contracts, obligations and com-
mitments listed in Section 4.23 of the Disclosure Statement
have been delivered to Parent.
Section 4.24 Labor Matters. None of the Company or
any of its Subsidiaries is a party to any union contract or
other collective bargaining agreement, other than those set
forth in Section 4.24 of the Disclosure Statement, true and
complete copies of which contracts have been delivered to Par-
ent. Each of the Company and its Subsidiaries is in compliance
in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of
employment and wages and hours, and neither the Company nor any
of its Subsidiaries is engaged in any unfair labor practice.
There is no labor strike, slowdown or stoppage pending (or, to
the best knowledge of the Company, any labor strike or stoppage
threatened) against or affecting the Company or any of its Sub-
sidiaries. No petition for certification has been filed and is
pending before the National Labor Relations Board with respect
to any employees of the Company or any of its Subsidiaries who
are not currently organized.
<PAGE>
-26-
Section 4.25 Compliance with Law. Neither the Com-
pany nor any of its Subsidiaries has violated or failed to com-
ply with any statute, law, ordinance, regulation, rule or order
of any foreign, federal, state or local government or any other
governmental department or agency, or any judgment, decree or
order of any court, applicable to its business or operations,
except where any such violation or failure to comply would not,
individually or in the aggregate, have a Company Material
Adverse Effect. The Company and its Subsidiaries have all per-
mits, licenses and franchises from governmental agencies
required to conduct their businesses as now being conducted,
except for such permits, licenses and franchises the absence of
which would not, individually or in the aggregate, have a Com-
pany Material Adverse Effect.
Section 4.26 Employment and Labor Contracts. Nei-
ther the Company nor any of its Subsidiaries is a party to any
employment, management services, consultation or other contract
or agreement with any past or present officer, director or
employee or, to the best of the Company's knowledge, any entity
affiliated with any past or present officer, director or
employee other than those set forth in Section 4.26 of the Dis-
closure Statement, in each case true and complete copies of
which contracts have been delivered to Parent, and other than
the agreements executed by employees generally, the forms of
which have been provided to Parent.
Section 4.27 Intellectual Property Rights. The Com-
pany or its Subsidiaries own or have the right to use all
Intellectual Property Rights (as defined below in this Section
4.27) necessary to the conduct of their respective businesses.
Section 4.27 of the Disclosure Statement contains a worldwide
list of all patents, trade names, registered and unregistered
copyrights, trademarks and service marks, mask works and appli-
cations for the foregoing owned by the Company or its Subsid-
iaries. The Company and/or its Subsidiaries have clear and
unencumbered title to the Intellectual Property Rights set
forth in Section 4.27 of the Disclosure Statement which are
listed as owned by the Company and/or its Subsidiaries and such
title has not been challenged (pending or, to the knowledge of
the Company, threatened) by others except for the encumbrances
listed in Section 4.27 of the Disclosure Statement. No rights
or licenses to use Intellectual Property Rights have been
granted or acquired by the Company or its Subsidiaries except
those listed in Section 4.27 of the Disclosure Statement.
Except as listed in Section 4.27 of the Disclosure Statement,
to the knowledge of the Company, there have been (a) no claims
<PAGE>
-27-
or assertions made by others that the Company has infringed any
Intellectual Property Rights of others by the sale of products
or any other activity in the preceding six year period and
(b) no infringements by the Company during this period. Except
as listed in Section 4.27 of the Disclosure Statement, the Com-
pany has no knowledge of any infringement of Intellectual Prop-
erty Rights of the Company by others. All such patents, regis-
tered trademarks, service marks, and copyrights owned by the
Company or its Subsidiaries are in good standing, and are
recorded on the public record in the name of the Company or its
Subsidiaries except for those failures to be in good standing
and so recorded that would not, individually or in the aggre-
gate, have a Company Material Adverse Effect. True and com-
plete copies of all material listed in Section 4.27 of the Dis-
closure Statement have been delivered to Parent.
"Intellectual Property Rights" shall mean and include
rights relating to patents, trademarks, service marks, trade
names, copyrights, mask works, inventions, processes, trade
secrets, know-how, confidentiality agreements, consulting
agreements, software and any documentation relating to the
manufacture, marketing and maintenance of products.
Section 4.28 Taxes. Except as disclosed in Section
4.28 of the Disclosure Statement: (i) the Company and its Sub-
sidiaries have prepared and timely filed or will timely file
with the appropriate governmental agencies all material fran-
chise, income and all other material Tax (as hereinafter
defined) returns and reports (Tax returns and reports are here-
inafter collectively referred to as "Tax Returns") required to
be filed for any period on or before the Effective Time, taking
into account any extension of time to file granted to or
obtained on behalf of the Company and/or its Subsidiaries (cop-
ies of which for the past three fiscal years have been deliv-
ered to Parent); (ii) all material Taxes of the Company and its
Subsidiaries (whether or not reported) in respect of the
pre-Merger period have been paid in full to the proper author-
ities or fully accrued for with respect to fiscal periods for
which there are publicly available financial statements in such
statements and otherwise on the books at the Company, other
than such Taxes as are being contested in good faith by appro-
priate proceedings and are adequately reserved for in accor-
dance with generally accepted accounting principles; (iii) all
deficiencies resulting from Tax examinations of federal, state
and foreign income, sales and franchise and all other material
Tax Returns filed by the Company and its Subsidiaries have
either been paid or adequately reserved for in accordance with
<PAGE>
-28-
generally accepted accounting principles; (iv) to the Company's
knowledge, no deficiency has been asserted or assessed against
the Company or any of its Subsidiaries and is pending, and no
examination of the Company or any of its Subsidiaries is pend-
ing or threatened for any material amount of Tax by any taxing
authority (with respect to any such action, Section 4.28 of the
Disclosure Statement sets forth the periods at issue and the
category of Tax, and the examining authority's and any corre-
sponding revenue agents' reports relating to the issue have
been delivered to Parent); (v) no extension of the period for
assessment or collection of any material Tax is currently in
effect and no extension of time within which to file any mate-
rial Tax Return has been requested, which Tax Return has not
since been filed; (vi) no material Tax liens have been filed
with respect to any Taxes; (vii) the Company and each of its
Subsidiaries have not agreed to make any adjustment by reason
of a change in their accounting methods that would affect the
taxable income or deductions of the Company or any of its Sub-
sidiaries for any period ending after the Effective Time;
(viii) the Company and its Subsidiaries have made timely pay-
ments of the Taxes required to be deducted and withheld from
the wages paid to their employees; (ix) there are no Tax shar-
ing agreements or arrangements under which the Company or any
Subsidiary will have any obligation or liability on or after
the Effective Time; (x) the Company and its Subsidiaries have
the net operating loss carryforwards set forth in Section 4.28
of the Disclosure Statement; (xi) the Company and its Subsid-
iaries have no overall foreign losses as defined in
Section 904(f)(2) of the Code; (xii) neither the Company nor
any of its Subsidiaries has unused foreign tax credits;
(xiii) to the Company's knowledge, all payments, other than
payments of dividends (including any payments deemed to be the
equivalent of a dividend) or Taxes, made or incurred by the
Company or any of its Subsidiaries since December 31, 1993 will
be deductible or capitalizable for Tax purposes including any
payments made by the Company or any of its Subsidiaries pursu-
ant to any transaction contemplated by this Agreement, except
for any payments the failure of which to be deductible or
capitalizable would not, individually or in the aggregate, have
a Company Material Adverse Effect; (xiv) to the Company's
knowledge, no income under any arrangement or understanding to
which the Company or any of its Subsidiaries is a party will be
attributed to the Company or any of its Subsidiaries which is
not represented by income to which the Company or the Subsid-
iary is legally entitled; (xv) to the Company's knowledge,
there are no transfer pricing agreements made with any taxation
authority; (xvi) no assets of the Company or any of its
<PAGE>
-29-
Subsidiaries is held in an arrangement for which partnership
Tax Returns are being filed and neither the Company nor any of
its Subsidiaries is a partner in any partnership;
(xvii) neither the Company nor any of its Subsidiaries owns any
interest in any "controlled foreign corporation" (within the
meaning of Section 957 of the Code), "passive foreign invest-
ment company" (within the meaning of Section 1296 of the Code)
or other entity the income of which is required to be included
in the income of the Company or such Subsidiary, whether or not
distributed; (xviii) neither the Company nor any of its Subsid-
iaries has made an election under Section 341(f) of the Code;
and (xix) the Company is not obligated to make any payments
that would constitute excess parachute payments within the
meaning of Section 280G of the Code.
"Tax" or "Taxes" shall mean all federal, state, local
and foreign taxes, duties, levies, charges and assessments of
any nature, including social security payments and deductibles
relating to wages, salaries and benefits and payments to sub-
contractors (to the extent required under applicable Tax law),
and also including all interest, penalties and additions
imposed with respect to such amounts.
Section 4.29 Employee Benefit Plans; ERISA. (a)
Except as set forth in Section 4.29 of the Disclosure State-
ment, there are no "employee pension benefit plans" as defined
in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), covering employees (or former
employees) employed in the United States, maintained or con-
tributed to by the Company or any of its Subsidiaries or any of
their ERISA Affiliates (as hereinafter defined), or to which
the Company or any of its Subsidiaries or any of their ERISA
Affiliates contributes or is obligated to make payments there-
under or otherwise may have any liability ("Pension Benefits
Plans"). For purposes of this Agreement, "ERISA Affiliate"
shall mean any person (as defined in Section 3(9) of ERISA)
that is a member of any group of persons described in
Section 414(b), (c), (m) or (o) of the Code of which the Com-
pany or a Subsidiary is a member.
(b) The Company has delivered to Parent true and
complete copies of all "welfare benefit plans" (as defined in
Section 3(1) of ERISA) covering employees (or former employees)
employed in the United States, maintained or contributed to by
the Company or any of its Subsidiaries ("Welfare Plans"), all
multiemployer plans (as defined in Section 3(37) of ERISA) cov-
ering employees (or former employees) employed in the United
<PAGE>
-30-
States to which the Company or any of its Subsidiaries or any
of their ERISA Affiliates is required to make contributions or
otherwise may have any liability, and, to the extent covering
employees (or former employees) employed in the United States,
all stock bonus, stock option, restricted stock, stock appreci-
ation right, stock purchase, bonus, incentive, deferred compen-
sation, severance and vacation plans maintained or contributed
to by the Company or a Subsidiary of the Company.
(c) Except as otherwise set forth in Section 4.29 of
the Disclosure Statement, the Company and each of its Subsid-
iaries, and each of the Pension Benefit Plans and Welfare
Plans, are in compliance with the applicable provisions of
ERISA and other applicable laws except where the failure to
comply would not, individually or in the aggregate, have a Com-
pany Material Adverse Effect.
(d) All contributions to, and payments from, the
Pension Benefit Plans which are required to have been made in
accordance with the Pension Benefit Plans and, when applicable,
Section 302 of ERISA or Section 412 of the Code have been
timely made except where the failure to make such contributions
or payments on a timely basis would not, individually or in the
aggregate, have a Company Material Adverse Effect.
(e) The Pension Benefit Plans intended to qualify
under Section 401 of the Code have been determined by the
Internal Revenue Service ("IRS") to be so qualified and, to the
Company's knowledge, nothing has occurred with respect to the
operation of such Pension Benefit Plans which would cause the
loss of such qualification or exemption or the imposition of
any material liability, penalty or tax under ERISA or the Code.
Such plans have been or will be amended on a timely basis to
comply with changes to the Code made by the Tax Reform Act of
1986 and other applicable legislative, regulatory or adminis-
trative requirements.
(f) There are (i) no investigations pending, to the
best knowledge of the Company, by any governmental entity
involving the Pension Benefit Plans or Welfare Plans, (ii) no
termination proceedings involving the Pension Benefit Plans and
(iii) no pending or, to the best of the Company's knowledge,
threatened claims (other than routine claims for benefits),
suits or proceedings against any Pension Benefit or Welfare
Plan, against the assets of any of the trusts under any Pension
Benefit or Welfare Plan or against any fiduciary of any Pension
Benefit or Welfare Plan with respect to the operation of such
<PAGE>
-31-
plan or asserting any rights or claims to benefits under any
Pension Benefit Plan or against the assets of any trust under
such plan, except for those which would not, individually or in
the aggregate, give rise to any liability which would have a
Company Material Adverse Effect, nor, to the best of the Compa-
ny's knowledge, are there any facts which would give rise to
any liability except for those which would not, individually or
in the aggregate, have a Company Material Adverse Effect in the
event of any such investigation, claim, suit or proceeding.
(g) To the Company's knowledge, none of the Company,
any of its Subsidiaries or any employee of the foregoing, nor
any trustee, administrator, other fiduciary or any other "party
in interest" or "disqualified person" with respect to the Pen-
sion Benefit Plans or Welfare Plans, has engaged in a "prohib-
ited transaction" (as such term is defined in Section 4975 of
the Code or Section 406 of ERISA) which would be reasonably
likely to result in a tax or penalty on the Company or any of
its Subsidiaries under Section 4975 of the Code or
Section 502(i) of ERISA, except any such event which would not,
individually or in the aggregate, have a Company Material
Adverse Effect.
(h) Neither the Pension Benefit Plans subject to
Title IV of ERISA nor any trust created thereunder has been
terminated nor have there been any "reportable events" (as
defined in Section 4043 of ERISA and the regulations thereun-
der) with respect to either thereof, except any such event
which would not, individually or in the aggregate, have a Com-
pany Material Adverse Effect nor has there been any event with
respect to any Pension Benefit Plan requiring disclosure under
Section 4063(a) of ERISA or any event with respect to any Pen-
sion Benefit Plan requiring disclosure under
Section 4041(c)(3)(C) of ERISA, except any such event which
would not, individually or in the aggregate, have a Company
Material Adverse Effect.
(i) Neither the Company nor any Subsidiary of the
Company nor any ERISA Affiliate has incurred any currently out-
standing liability to the Pension Benefit Guaranty Corporation
(the "PBGC") or to a trustee appointed under Section 4042(b) or
(c) of ERISA other than for the payment of premiums, all of
which have been paid when due. No Pension Benefit Plan has
applied for, or received, a waiver of the minimum funding stan-
dards imposed by Section 412 of the Code. The information sup-
plied to the actuary by the Company or any of its Subsidiaries
for use in preparing the most recent actuarial report for
<PAGE>
-32-
Pension Benefit Plans is complete and accurate in all material
respects.
(j) Neither the Company, any of its Subsidiaries nor
any of their ERISA Affiliates has any liability (including any
contingent liability under Section 4204 of ERISA) with respect
to any multiemployer plan, within the meaning of Section 3(37)
of ERISA, covering employees (or former employees) employed in
the United States.
(k) Except as disclosed in Section 4.29 of the Dis-
closure Statement, with respect to each of the Pension Benefit
and Welfare Plans, true, correct and complete copies of the
following documents have been delivered to Parent: (i) the
current plans and related trust documents, including amendments
thereto, (ii) any current summary plan descriptions, (iii) the
most recent Forms 5500, financial statements and actuarial
reports, if applicable, and (iv) the most recent IRS determina-
tion letter, if applicable.
(l) Neither the Company, any of its Subsidiaries,
any organization to which the Company is a successor or parent
corporation, within the meaning of Section 4069(b) of ERISA,
nor any of their ERISA Affiliates has engaged in any transac-
tion, within the meaning of Section 4069(a) of ERISA, except
where the liability for which would not, individually or in the
aggregate, have a Company Material Adverse Effect.
(m) Except as disclosed in Section 4.29 of the Dis-
closure Statement, none of the Welfare Plans maintained by the
Company or any of its Subsidiaries are retiree life or retiree
health insurance plans which provide for continuing benefits or
coverage for any participant or any beneficiary of a partici-
pant following termination of employment, except as may be
required under the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended ("COBRA"), or except at the expense of
the participant or the participant's beneficiary. The Company
and each of its Subsidiaries which maintain a "group health
plan" within the meaning of Section 5000(b)(1) of the Code have
complied with the notice and continuation requirements of
Section 4980B of the Code, COBRA, Part 6 of Subtitle B of
Title I of ERISA and the regulations thereunder except where
the failure to comply would not, individually or in the aggre-
gate, have a Company Material Adverse Effect.
(n) No liability under any Pension Benefit or Wel-
fare Plan has been funded nor has any such obligation been
<PAGE>
-33-
satisfied with the purchase of a contract from an insurance
company as to which the Company or any of its Subsidiaries has
received notice that such insurance company is in
rehabilitation.
(o) Except pursuant to the agreements listed in Sec-
tion 4.29 of the Disclosure Statement, the consummation of the
transactions contemplated by this Agreement will not result in
an increase in the amount of compensation or benefits or accel-
erate the vesting or timing of payment of any benefits or com-
pensation payable to or in respect of any employee of the Com-
pany or any of its Subsidiaries.
(p) The Company has disclosed to Parent in Section
4.29 of the Disclosure Statement each material Foreign Plan (as
hereinafter defined) to the extent the benefits provided there-
under are not mandated by the laws of the applicable foreign
jurisdiction. To the Company's knowledge, the Company and each
of its Subsidiaries and each of the Foreign Plans are in com-
pliance with applicable laws and all required contributions
have been made to the Foreign Plans, except where the failure
to comply or make contributions would not, individually or in
the aggregate, have a Company Material Adverse Effect. For
purposes hereof, the term "Foreign Plan" shall mean any plan,
program, policy, arrangement or agreement maintained or con-
tributed to by, or entered into with, the Company or any Sub-
sidiary with respect to employees (or former employees)
employed outside the United States.
Section 4.30 Environmental Matters. (a) The Com-
pany and its Subsidiaries and the properties and assets used in
their respective businesses (including the Real Properties (as
hereinafter defined)) are in substantial compliance with all
applicable Environmental Laws (as hereinafter defined), which
compliance includes, without limitation, the possession of all
licenses, permits, registrations and other governmental autho-
rizations (collectively, "Environmental Authorizations")
required under applicable Environmental Laws, and compliance
with the terms and conditions thereof. Since December 31,
1989, neither the Company nor any of its Subsidiaries has
received any communication, whether from a Governmental Author-
ity (as hereinafter defined), citizen group, employee or other-
wise, that alleges that the Company or any of its Subsidiaries
or any of the properties or assets used in their respective
businesses (including the Real Properties) is not in full com-
pliance with Environmental Laws. All Environmental Authoriza-
tions currently held by the Company and its Subsidiaries
<PAGE>
-34-
pursuant to Environmental Laws are identified in Section 4.30
of the Disclosure Statement and represent all Environmental
Authorizations necessary for the conduct of the businesses of
the Company and its Subsidiaries at the Closing Date. Neither
the Company nor any of its Subsidiaries has been notified by
any Governmental Authority since December 31, 1989 or has, to
the Company's knowledge, any basis to believe, that any such
Environmental Authorizations will be modified, suspended or
revoked or cannot be renewed or otherwise maintained in the
ordinary course of business, and no Environmental Authorization
will be modified, suspended or revoked, or denied renewal in
the ordinary course of business.
(b) There is no Environmental Notice (as hereinafter
defined) that (i) is pending or, to the best knowledge of the
Company, threatened against the Company or any of its Subsid-
iaries, (ii) is pending or, to the best knowledge of the Com-
pany, threatened against any person or entity whose liability
for such Environmental Notice may have been retained or assumed
contractually or otherwise by the Company or its Subsidiaries,
or to the Company's knowledge, (iii) could subject Parent or
Newco to any material risk of loss or damages.
(c) Except as set forth in Section 4.30 of the Dis-
closure Statement, and to the Company's knowledge, there are no
past or present actions, activities, circumstances, conditions,
events or incidents arising out of, based upon, resulting from
or relating to the operation, ownership or use of any proper-
ties or assets (including the Real Properties) currently or
formerly owned, operated, leased or used by the Company or any
of its Subsidiaries (or any of their respective predecessors in
interest), including, without limitation, the emission, dis-
charge, disposal or other release of any Hazardous Material (as
hereinafter defined) in or into the Environment (as hereinafter
defined), that (i) could reasonably be expected to result in
the incurrence of costs under Environmental Laws, (ii) could
reasonably be expected to form the basis of any Environmental
Notice against or with respect to the Company or any of its
Subsidiaries, or against any person or entity whose liability
for any Environmental Notice may have been retained or assumed
by or could be imputed or attributed by law or contract to the
Company or any of its Subsidiaries or (iii) could subject Par-
ent or Newco to any material risk of loss or damages.
(d) Without in any way limiting the generality of
the foregoing, to the Company's knowledge, and except as set
forth in Section 4.30 of the Disclosure Statement, (1) there
<PAGE>
-35-
are and have been no underground or above ground storage tanks
or other storage receptacles, or related piping, located on, at
or under property (including the Real Properties) owned, oper-
ated, leased or used by the Company or any of its Subsidiaries
(or any of their respective predecessors in interest),
(2) there are and have been no polychlorinated biphenyls used
or stored by the Company or any of its Subsidiaries, (3) there
are and have been no properties (including the Real Properties)
currently or formerly owned, operated, managed, leased or used
by the Company or any of its Subsidiaries (or any of their
respective predecessors in interest) at which Hazardous Materi-
als generated, used, owned, managed, stored or controlled by
the Company or any of its Subsidiaries (or any of their respec-
tive predecessors in interest) may have been disposed of or
otherwise released into the Environment and (4) there is no
asbestos contained in or forming part of any building, building
component, structure or office space owned, operated, leased or
used by the Company or any of its Subsidiaries.
(e) No lien has been recorded under Environmental
Laws with respect to any properties, assets or facilities
(including the Real Properties) owned, operated, managed,
leased or used by the Company or any of its Subsidiaries.
(f) Prior to the Closing, the Company shall have
made all environmental notifications, registrations and filings
as required by all applicable state and local real property
disclosure requirements, including those requirements pursuant
to Section 22a-134a of the Connecticut General Statutes (the
"Connecticut Transfer Act") and the regulations promulgated
thereunder.
(g) In accordance with Section 5.03, the Company has
given Parent, Newco and their authorized representatives access
to all records and files in its possession or otherwise avail-
able to the Company and its Subsidiaries relating to actual or
potential compliance or liability issues of the Company and its
Subsidiaries under Environmental Laws, including, without limi-
tation, all reports, studies, analyses, tests or monitoring
results pertaining to the existence of Hazardous Material or
any other environmental concern relating to properties, assets
or facilities (including the Real Properties) currently or for-
merly owned, operated, managed, leased, used or controlled by
the Company or any of its Subsidiaries, or otherwise concerning
compliance with or liability under Environmental Laws.
<PAGE>
-36-
(h) To the Company's knowledge, there has been no
disposal, release, discharge, spillage, uncontrolled loss,
seepage or filtration of Hazardous Material on-site at any
properties, assets or facilities (including the Real Proper-
ties) located in the State of Connecticut at which business
operations of the Company or any of its Subsidiaries are or
have been conducted (the "Properties") and except as set forth
in Section 4.30 of the Disclosure Statement, any Hazardous
Material which remains on-site is being managed in accordance
with state and Federal law and the regulations adopted
thereunder.
(i) Except as set forth in Section 4.30 of the Dis-
closure Statement, neither the Company nor any of its Subsid-
iaries has filed any forms pursuant to the Connecticut Transfer
Act with respect to the Properties or with respect to any prior
transfer thereof by the Company or any of its Subsidiaries or
their respective predecessors in interest.
(j) For purposes of this Agreement:
(i) "Environment" shall mean any surface water,
ground water, or drinking water supply, land surface or subsur-
face strata, or ambient air and includes, without limitation,
any indoor location.
(ii) "Environmental Laws" shall mean all federal,
state, local and foreign laws, codes, regulations, ordinances,
requirements, directives, orders, common law, and administra-
tive or judicial interpretations thereof that may be enforced
by any Governmental Authority or court, relating to pollution,
the protection of human health, the protection of the Environ-
ment, or the emission, discharge, disposal or other release or
threatened release of Hazardous Materials in or into the
Environment.
(iii) "Environmental Notice" shall mean any notice or
claim by any Governmental Authority or other third party alleg-
ing liability (including, without limitation, potential lia-
bility for investigatory costs, cleanup costs, governmental
costs, compliance costs or harm, injuries or damages to any
person, property, natural resources, or any fines or penalties)
arising out of, based upon, resulting from or relating to any
Environmental Law.
(iv) "Governmental Authority" shall mean any govern-
ment or political subdivision or any agency, authority, bureau,
<PAGE>
-37-
central bank, commission, department or instrumentality of
either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
(v) "Hazardous Materials" shall mean all pollutants,
contaminants, or chemical, industrial, hazardous or toxic mate-
rials, substances, constituents or wastes, including, without
limitation, asbestos or asbestos-containing materials,
polychlorinated biphenyls and petroleum, oil, or petroleum or
oil products, derivatives or constituents, including, without
limitation, crude oil or any fraction thereof.
(vi) "Real Property" shall mean all right, title and
interest of the Company or any of its Subsidiaries (including
any leasehold estate) in and to a parcel of real property owned
or operated by the Company or any of its Subsidiaries together
with, in each case, all improvements and appurtenant fixtures,
equipment, personal property, easements and other property and
rights incidental to the ownership, lease or operation thereof.
Section 4.31 Directors, Officers and Compensation of
Employees. There is set forth in Section 4.31 of the Disclo-
sure Statement a true and complete list showing (a) the names
and addresses of all directors and officers of the Company and
its Subsidiaries; (b) the names of all salaried persons (other
than salespersons) whose aggregate compensation for purposes of
tax reporting from the Company and its Subsidiaries in the fis-
cal year ended December 31, 1994 was, or in the fiscal year
ending December 31, 1995 is expected to be, $100,000 or more
per year, together with a statement of the full amount expected
to be paid to each such person for services in all capacities
to be rendered in the fiscal year ending December 31, 1995, and
the basis thereof, separately including the amounts paid or
payable, or expected to be paid or payable, under bonus or
incentive arrangements, if any; and (c) the names and titles of
all salespersons whose aggregate compensation for purposes of
tax reporting from the Company and its Subsidiaries in the fis-
cal year ended December 31, 1994 was, or in the fiscal year
ending December 31, 1995 is expected to be, $100,000 or more
per year, together with a statement of the base salary, the
commission and any amount or amounts under bonus or other
incentive arrangements, expected to be paid to each such person
in the fiscal year ending December 31, 1995.
Section 4.32 Disclosure. No representation or war-
ranty by the Company and no statement or information relating
to the Company or any of its Subsidiaries contained herein, or
<PAGE>
-38-
in any certificate furnished by or on behalf of the Company to
Parent or Newco in connection herewith contains or will contain
any untrue statement of a material fact or omits or will omit
to state a material fact necessary in order to make the state-
ments herein or therein, in light of the circumstances under
which they were made, not misleading.
ARTICLE V
COVENANTS
Section 5.01 Conduct of Business of the Company.
Except as expressly contemplated by this Agreement or as
expressly agreed to in writing by Parent, during the period
from the date of this Agreement to the Effective Time, the Com-
pany and its Subsidiaries each will conduct its operations
according to its ordinary course of business and consistent
with past practice, and will use all commercially reasonable
efforts to preserve intact its business organization, to keep
available the services of its officers and employees and to
maintain satisfactory relationships with suppliers, distribu-
tors, customers and others having business relationships with
it and will take no action which would materially impair or
preclude its ability to consummate the Merger or the other
transactions contemplated hereby. Without limiting the gener-
ality of the foregoing, and except as otherwise expressly pro-
vided in this Agreement, prior to the Effective Time, neither
the Company nor any of its Subsidiaries will, without the prior
written consent of Parent:
(a) amend its Restated Certificate of Incorporation
(or other applicable charter document) or By-Laws;
(b) authorize for issuance, issue, sell, deliver,
grant any options for, or otherwise agree or commit to
issue, sell or deliver any shares of any class of capital
stock of the Company or its Subsidiaries (except for
options to employees who are not executive officers not to
exceed 60,000 shares in the aggregate for all such employ-
ees) or any securities convertible into or exchangeable or
exercisable for shares of any class of capital stock of
the Company or its Subsidiaries, other than pursuant to
and in accordance with the terms of the Company Common
Stock Equivalents listed in Section 4.17 of the Disclosure
Statement;
<PAGE>
-39-
(c) split, combine or reclassify any shares of its
capital stock, declare, set aside or pay any dividend or
other distribution (whether in cash, stock or property or
any combination thereof) in respect of its capital stock
or purchase, redeem or otherwise acquire any shares of its
own capital stock or that of any of its Subsidiaries;
(d) except in the ordinary course of business and
consistent with past practice (i) create, incur, assume,
maintain or permit to exist any long-term debt or any
short-term debt for borrowed money other than under
(x) existing loans or replacements thereof on terms no
less favorable than, and in amounts not exceeding, exist-
ing loans or (y) existing lines of credit or replacements
thereof on terms no less favorable than existing lines of
credit, provided that in no event shall borrowings under
such replacement line of credit, whether or not in the
ordinary course, exceed $8 million; (ii) assume, guaran-
tee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the
obligations of any person (other than wholly owned Subsid-
iaries of the Company) in the ordinary course of business
and consistent with past practices, except for endorse-
ments of negotiable instruments for deposit in the ordi-
nary course of business and consistent with past practice;
or (iii) make any loans, advances or capital contributions
to, or investments in, any other person;
(e) (i) (x) except pursuant to written agreements
existing on the date of execution of this Agreement,
increase in any manner the compensation of any of its
directors or officers, or (y) except in the ordinary
course of business and consistent with past practice any
of its other employees; (ii) pay or agree to pay any pen-
sion, retirement allowance or other employee benefit not
required, or enter into or agree to enter into any agree-
ment or arrangement with any of its past or present
employees relating to any such pension, retirement allow-
ance or other employee benefit, except as required under
currently existing agreements, plans or arrangements set
forth in Section 4.29 of the Disclosure Statement;
(iii) grant any severance or termination pay (other than
as required under currently existing agreements, plans or
arrangements set forth in Section 4.29 of the Disclosure
Statement) to, or enter into any employment or severance
agreement with, any of its past or present employees;
(iv) except to the extent permitted by the foregoing
<PAGE>
-40-
clause (i), enter into any contract, agreement or under-
standing with any of its past or present directors or
officers; or (v) except in the ordinary course of business
and consistent with past practice or as may be required to
comply with applicable law, become obligated (other than
pursuant to any new or renewed collective bargaining
agreement) under any new pension plan, welfare plan,
multiemployer plan, employee benefit plan, benefit
arrangement, or similar plan or arrangement which was not
in existence on the date hereof, including any bonus,
incentive, deferred compensation, stock purchase, stock
option, stock appreciation right, group insurance, sever-
ance pay, retirement or other benefit plan, agreement or
arrangement, or employment or consulting agreement with or
for the benefit of any person, or amend any of such plans
or any of such agreements in existence on the date hereof;
(f) except in the ordinary course of business and
consistent with past practice or as otherwise expressly
contemplated hereby, sell, transfer, lease, license,
pledge, mortgage, or otherwise dispose of, or encumber, or
agree to sell, transfer, lease, license, pledge, mortgage
or otherwise dispose of or encumber, any material proper-
ties, real, personal or mixed;
(g) except as otherwise expressly contemplated
hereby, enter into any other agreements, commitments or
contracts, except agreements, commitments or contracts for
the purchase, sale or lease of goods or services in the
ordinary course of business and consistent with past prac-
tice and having a term of no more than one year;
(h) authorize, recommend, propose or announce an
intention to authorize, recommend or propose, or enter
into any agreement in principle or an agreement with
respect to, any plan of liquidation or dissolution, any
acquisition of a material amount of assets or securities,
any disposition of a material amount of assets or securi-
ties or any material change in its capitalization, or any
entry into a material contract or any amendment or modifi-
cation of any material contract or any release or relin-
quishment of any material contract rights not in the ordi-
nary course of business and consistent with past practice
except as expressly contemplated by this Agreement;
(i) except as previously approved by the Board of
Directors of the Company prior to the date hereof and as
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identified to Parent prior to the date hereof, authorize
or commit to make capital expenditures in excess of
$100,000;
(j) knowingly undertake any act, or suffer to exist
any condition, causing any insurance policy naming it as a
beneficiary or a loss payee to be cancelled or terminated,
except in the ordinary course of business and consistent
with past practice and following written notice to Parent;
(k) maintain its books and records in a manner not
in the ordinary course of business and consistent with
past practice;
(l) enter into any hedging, option, derivative or
other similar transaction;
(m) change any assumption underlying, or method of
calculating, any bad debt, contingency, provision or other
reserve;
(n) pay, discharge or satisfy any claims, liabili-
ties or obligations (absolute, accrued, contingent or
otherwise), other than the payment, discharge or satisfac-
tion of liabilities (including accounts payable) in the
ordinary course of business and consistent with past prac-
tice, or collect, or accelerate the collection of, any
amounts owed (including accounts receivable) other than
the collection in the ordinary course of business; or
(o) agree to do any of the foregoing.
Section 5.02 No Solicitation. (a) The Company
agrees that, prior to the Effective Time, it and its Subsidiar-
ies shall not, and shall not give authorization or permission
to any of its or its Subsidiaries' directors, officers, employ-
ees, agents or representatives to, and shall use all commer-
cially reasonable efforts to see that such persons do not,
directly or indirectly, solicit, initiate, facilitate or
encourage (including by way of furnishing or disclosing infor-
mation) any merger, consolidation, other business combination
involving the Company or its Subsidiaries, acquisition of all
or any substantial portion of the assets or capital stock of
the Company and its Subsidiaries taken as a whole, or inquiries
or proposals concerning or which may reasonably be expected to
lead to, any of the foregoing (an "Acquisition Transaction") or
negotiate, explore or otherwise communicate in any way with any
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third party (other than Parent or its affiliates) with respect
to any Acquisition Transaction or enter into any agreement,
arrangement or understanding requiring it to abandon, terminate
or fail to consummate the Merger or any other transactions
expressly contemplated by this Agreement, or contemplated to be
a material part thereof. The Company shall immediately advise
Parent in writing of any inquiries or proposals relating to an
Acquisition Transaction.
(b) Notwithstanding the foregoing, in the event that
there is an unsolicited written proposal for an Acquisition
Transaction from a bona fide financially capable third party
that contains no financing contingency, the Company, in its
discretion, shall be permitted to furnish to and communicate
with any such party all publicly available information
requested by such party. In the event that such party requests
information in addition to that which is publicly available,
the Company may furnish to and communicate with such third
party non-public information only if (i) five business days'
written notice shall have been given to Parent; and (ii)(A) the
Company's Board of Directors shall have been advised in writing
by its investment banker that such third party is financially
capable, without any financing contingency, of consummating an
Acquisition Transaction that would yield a higher value to the
Company's stockholders than will the Merger, (B) the Company's
Board of Directors shall have been advised, by the written
opinion of outside counsel to the Company, that any failure to
provide such non-public information to such party would consti-
tute a breach of the fiduciary responsibilities of the Board of
Directors to the stockholders of the Company and (C) the Board
of Directors, after weighing such advice, determines that tak-
ing such action is more likely than not to lead to an Acquisi-
tion Transaction with such third party that would yield a
higher value to the Company's stockholders than will the Merger
and that failing to furnish such information would constitute a
breach of the Board's fiduciary duties.
Section 5.03 Access to Information. (a) From the
date of this Agreement until the Effective Time, the Company
will give Parent and Newco and their authorized representatives
(including counsel, environmental and other consultants,
accountants, auditors, and intellectual property counsel and
agents) full access during normal business hours to all facili-
ties, personnel and operations and to all books and records of
the Company and its Subsidiaries, will permit Parent and Newco
to make such inspections as they may reasonably require
(including without limitation any air, water or soil testing or
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sampling deemed necessary by them) and will cause its officers
and those of its Subsidiaries to furnish Parent with such
financial and operating data and other information with respect
to the businesses and properties of the Company and its Subsid-
iaries as Parent may from time to time reasonably request.
(b) Parent will permit the Company and its agents,
including its counsel, auditors, investment bankers and con-
sultants to have full access to Parent's books and records and
personnel (including senior executives) for the purpose of con-
ducting customary due diligence regarding the accuracy and com-
pleteness of the Parent SEC Reports and the Registration State-
ment and other information with respect to the business of Par-
ent as the Company may from time to time reasonably request.
(c) Each of Parent and Newco will hold and will
cause their respective authorized representatives, including
consultants and advisors, to hold in strict confidence pursuant
to the Confidentiality Agreement dated April 19, 1995 between
Parent and the Company (the "Confidentiality Agreement") all
documents and information concerning the Company and its Sub-
sidiaries furnished to Parent or Newco in connection with the
transactions contemplated by this Agreement. The Company will
hold and will cause its authorized representatives, including
consultants and advisors, to hold in strict confidence pursuant
to the Confidentiality Agreement all documents and information
(whether oral or written) concerning Parent and its subsidiar-
ies furnished to the Company in connection with the transac-
tions contemplated by this Agreement. Notwithstanding any pro-
vision of Article X hereof, nothing herein shall relieve any
party of liabilities for any and all damages to the other party
by reason of any breach of this Section 5.03(c).
Section 5.04 Registration Statement and Proxy State-
ment. The Company shall file with the SEC as soon as is rea-
sonably practicable after the date hereof the Proxy Statement
and Parent shall file the Registration Statement in which the
Proxy Statement shall be included. Parent and the Company
shall use all commercially reasonable efforts to have the Reg-
istration Statement declared effective by the SEC and the Proxy
Statement cleared by the staff of the SEC as promptly as prac-
ticable. Parent shall also take any action required to be
taken under applicable state blue sky or securities laws in
connection with shares of Parent Common Stock to be issued as
Closing Consideration. Parent and the Company shall promptly
furnish to each other all information, and take such other
actions (including without limitation using all commercially
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reasonable efforts to provide any required consents of their
respective independent auditors), as may reasonably be
requested in connection with any action by any of them in con-
nection with the preceding sentences of this Section 5.04(a).
Section 5.05 Commercially Reasonable Efforts; Other
Actions. (a) Subject to the terms and conditions herein pro-
vided, Parent, Newco and the Company shall use all commercially
reasonable efforts to take, or cause to be taken, all other
actions and do, or cause to be done, all other things neces-
sary, proper or appropriate under applicable laws and regula-
tions to consummate and make effective the transactions contem-
plated by this Agreement, including, without limitation,
(i) the filing of Notification and Report Forms under the HSR
Act with the Federal Trade Commission (the "FTC") and the Anti-
trust Division of the Department of Justice (the "Antitrust
Division") and using all commercially reasonable efforts to
respond as promptly as practicable to all inquiries received
from the FTC or the Antitrust Division for additional informa-
tion or documentation, (ii) the taking of any actions required
to qualify the Merger for pooling-of-interests accounting
treatment and as a tax-free reorganization within the meaning
of Section 368(a) of the Code, (iii) the obtaining of all nec-
essary consents, approvals or waivers, and (iv) the lifting of
any legal bar to the Merger. Parent shall cause Newco to per-
form all of its obligations under this Agreement and provide
Newco the resources necessary to perform Newco's obligations
under this Agreement and shall not take any action which would
cause the Company to fail to perform its obligations hereunder.
The Company shall not take any action which would cause Parent
or Newco to fail to perform its obligations hereunder.
(b) Prior to the Effective Time, the Company shall
cooperate with Parent in taking such actions as are reasonably
appropriate or necessary in connection with any redemption,
prepayment, modification, satisfaction or elimination of any
outstanding indebtedness of the Company or any of its Subsid-
iaries with respect to which a consent is required to be
obtained to effectuate the Merger or other transactions contem-
plated hereby and has not been so obtained; provided that any
such restructuring shall become effective at the Effective
Time.
Section 5.06 Public Announcements. Before issuing
any press release or otherwise making any public statement with
respect to the Merger or any of the other transactions contem-
plated hereby, Parent, Newco and the Company will consult with,
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and obtain the consent of, each other as to its form and sub-
stance and shall not issue any such press release or make any
such public statement prior to obtaining such consent, except
as may be required by law.
Section 5.07 Notification of Certain Matters. The
Company shall give prompt notice to Parent of any notice of, or
other communication asserting, a default or event which, with
notice or lapse of time or both, would become a default,
received by the Company or any of its Subsidiaries subsequent
to the date of this Agreement and prior to the Effective Time,
under any contract material to the general affairs, business,
operations, assets, condition (financial or otherwise) or pros-
pects of the Company and its Subsidiaries taken as a whole to
which the Company or any of its Subsidiaries is a party or is
subject. Each of the Company and Parent shall give prompt
notice to the other party of (a) any notice or other communica-
tion from any third party alleging that the consent of such
third party is or may be required in connection with the Merger
or other transactions contemplated hereby, (b) any material
adverse change in their respective general affairs, business,
operations, assets, condition (financial or otherwise) or pros-
pects or the occurrence of any event which, so far as reason-
ably can be foreseen at the time of its occurrence, is reason-
ably likely to result in any such change or (c) the occurrence
or existence of any event which would, or could with the pas-
sage of time or otherwise, make any representation or warranty
contained herein untrue in any material respect.
Section 5.08 Indemnification. (a) Parent shall
cause the Surviving Corporation to indemnify, defend and hold
harmless the present and former directors and officers of the
Company against all losses, claims, damages, expenses or lia-
bilities arising out of actions or omissions or alleged actions
or omissions occurring at or prior to the Effective Time to the
extent permitted or required under applicable law and the Com-
pany's Restated Certificate of Incorporation and By-Laws in
effect at the date hereof (to the extent consistent with appli-
cable law).
(b) For a period of six years after the Effective
Time, the Surviving Corporation shall cause to be maintained in
effect the current policies of directors' and officers' lia-
bility insurance maintained by the Company (provided that the
Surviving Corporation may substitute therefor policies of at
least the same coverage and amounts containing terms and condi-
tions which are no less advantageous) with respect to claims
<PAGE>
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arising from facts or events which occurred before the Effec-
tive Time; provided, however, that the Surviving Corporation
shall not be obligated to make annual premium payments for such
insurance to the extent such premiums exceed an amount equal to
150% of the annual premiums paid as of the date hereof by the
Company for such insurance, in which case the Surviving Corpo-
ration shall purchase policies in such amounts and with such
coverage as reasonably can be purchased for such amounts.
(c) The provisions of this Section 5.08 are intended
to be for the benefit of, and shall be enforceable by, each
person indemnified pursuant to this Section 5.08, his or her
heirs and his or her representatives.
Section 5.09 Expenses. Except as set forth in Sec-
tion 10.05, Parent and Newco, on the one hand, and the Company,
on the other hand, shall bear their respective expenses
incurred in connection with the Merger, including, without
limitation, the preparation, execution and performance of this
Agreement and the transactions contemplated hereby and all fees
and expenses of investment bankers, finders, brokers, agents,
representatives, counsel and accountants, except that expenses
incurred in printing, mailing and filing (including without
limitation, SEC filing fees and stock exchange listing applica-
tion fees) the Proxy Statement shall be shared equally by the
Company and Parent.
Section 5.10 Affiliates. The Company shall advise
Parent in writing of any person who becomes an Affiliate after
the date hereof and prior to the Effective Time and shall use
all commercially reasonable efforts to have each such person
deliver to Parent, no later than the date such person becomes
an Affiliate, a written agreement substantially in the form of
Exhibit B hereto.
Section 5.11 Stock Exchange Listings. Parent shall
use all commercially reasonable efforts to list on the NYSE and
the PSE, upon official notice of issuance, any newly-issued
Parent Common Stock (and the accompanying Parent Purchase
Rights) to be issued in connection with the Merger.
Section 5.12 Company and Subsidiary Actions. The
Company shall not take or omit to take, and shall not cause or
permit any of its Subsidiaries to take or omit to take, any
action which would cause a breach of any representation or war-
ranty of the Company contained in this Agreement such that the
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Closing condition set forth in Section 7.01 would not be
satisfied.
Section 5.13 Environmental Matters. The Company
shall make all filings and use all commercially reasonable
efforts to take all actions necessary to comply with the provi-
sions and requirements of all Environmental Laws (including,
without limitation, the Connecticut Transfer Act) applicable to
the Merger and other transactions contemplated hereby, includ-
ing without limitation, any assets or property of the Company
or any of its Subsidiaries located in the State of Connecticut.
The Company shall keep Parent informed of all actions taken in
connection with the foregoing and all such actions shall be on
terms and conditions satisfactory to Parent.
Section 5.14 Resignation of Directors. Prior to the
Effective Time, the Company shall take all commercially reason-
able efforts to enable the Company to deliver to Parent at the
Closing at no cost the resignation of such directors of the
Company and, to the extent the Company has the power to remove
directors, its Subsidiaries as Parent shall specify, effective
at the Effective Time. In connection with any such resigna-
tion, the directors shall simultaneously reconvey their direc-
tors' qualifying shares, if any, to the applicable Subsidiary
or such other persons as Parent shall specify at no additional
expense to Parent, Newco or any such Subsidiary other than cus-
tomary expenses directly relating to the transfer and issuance
of directors' qualifying shares, if any.
Section 5.15 Stock Purchase Plan. The Company
shall, on or before the Effective Time, terminate its 1991
Employee Stock Purchase Plan and distribute to the participants
thereunder the entire balance in shares of Company Common Stock
and monies of any outstanding stock purchase accounts. Such
shares shall be entitled to be exchanged pursuant to this
Agreement.
Section 5.16 Company Rights Agreement. The Company
shall not redeem, amend or otherwise modify the rights issued
under the Company Rights Agreement (other than to delay any
"distribution date" thereon or to render the rights inappli-
cable to the Merger or any action permitted under this Agree-
ment) or terminate the Company Rights Agreement prior to the
earlier of (i) a vote by the holders of Company Common Stock at
the Special Meeting (including any adjournments thereof) which
shall not have been sufficient to satisfy the requirements of
Section 6.02, (ii) the termination of this Agreement in
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accordance with its terms or (iii) the Effective Time, unless
required to do so by a court of competent jurisdiction.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF PARENT, NEWCO AND THE COMPANY
The respective obligations of each party to effect
the Merger shall be subject to the fulfillment at or prior to
the Closing of each of the following conditions:
Section 6.01 Registration Statement. The Registra-
tion Statement shall have become effective in accordance with
the provisions of the Securities Act. No stop order suspending
the effectiveness of the Registration Statement shall have been
issued by the SEC and remain in effect. All necessary state
securities or blue sky authorizations shall have been received.
Section 6.02 Stockholder Approval. The approval of
a majority of the outstanding shares of Company Common Stock
cast at the Special Meeting or any adjournment thereof shall
have been obtained.
Section 6.03 Listings. The Parent Shares (and the
accompanying Parent Purchase Rights) issuable in the Merger
shall have been authorized for listing on the NYSE and the PSE
subject to official notice of issuance.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF PARENT AND NEWCO
The obligation of Parent and Newco to effect the
Merger and to perform their other obligations to be performed
at or subsequent to the Closing shall be subject to the ful-
fillment at or prior to the Closing of the following additional
conditions, any one or more of which may be waived by Parent or
Newco:
Section 7.01 Representations and Warranties True.
The representations and warranties of the Company contained
herein (without regard to any materiality exceptions or provi-
sos therein) shall be true and correct in all respects on the
date of this Agreement and the Closing Date as though such rep-
resentations and warranties were made at and on such date,
except (i) for those untruths or inaccuracies which individu-
ally or in the aggregate would not either materially impair or
<PAGE>
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preclude the Company's ability to consummate the Merger and the
other transactions contemplated hereby or have a Company Mate-
rial Adverse Effect and (ii) for changes expressly permitted or
contemplated by this Agreement.
Section 7.02 Performance. The Company shall have
performed and complied in all material respects with all agree-
ments, obligations and conditions required by this Agreement to
be performed or complied with by it on or prior to the Closing
Date except for those failures to so perform or comply which
individually or in the aggregate would not either materially
impair or preclude the Company's ability to consummate the
Merger and the other transactions contemplated hereby or have a
Company Material Adverse Effect.
Section 7.03 Certificates. The Company shall fur-
nish such certificates of its officers to evidence compliance
with the conditions set forth in Sections 7.01 and 7.02 as may
be reasonably requested by Parent or Newco.
Section 7.04 Certain Proceedings. No writ, order,
decree or injunction of a court of competent jurisdiction or
governmental entity shall have been entered against Parent,
Newco or the Company which, and no proceedings therefor shall
have been threatened or commenced by any governmental entity
which seek to, prohibit or restrict the consummation of the
Merger or would otherwise restrict Parent's or the Surviving
Corporation's exercise of full rights to own and operate the
business of the Company.
Section 7.05 Consents and Approvals. All necessary
consents and approvals of any United States or any other gov-
ernmental authority or any other third party required for the
consummation of the Merger and the other transactions contem-
plated hereby (including without limitation any such consents
and approvals required under any Environmental Law) shall have
been obtained, and any waiting period applicable to the consum-
mation of the Merger under the HSR Act shall have expired or
been terminated.
Section 7.06 Material Adverse Change. There shall
not have occurred since December 31, 1994 any material adverse
change in the general affairs, management, business, opera-
tions, assets, condition (financial or otherwise) or prospects
of the Company and its Subsidiaries taken as a whole.
<PAGE>
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Section 7.07 Opinion of Counsel. (a) Parent shall
have received the opinions of Parker Duryee Rosoff & Haft,
counsel to the Company, with respect to Delaware, New York and
U.S. federal law, Shawn A. Smith, Esq., counsel to the Company
with respect to Connecticut and U.S federal law and D. David
Cohen, Esq., counsel to the Company, each substantially in the
form of Exhibits D-1, D-2 and D-3, respectively.
(b) Parent shall have received the opinions of U.K.,
Canadian and German counsel, each reasonably acceptable to Par-
ent, respectively, with respect to the corporate existence and
share ownership of the Company's Subsidiaries formed in the
U.K., Canada and Germany substantially in the form of
paragraphs (a) and (b) of Exhibit D-1.
(c) Parent shall have received the opinion of Pepe &
Hazard, Connecticut counsel to the Company with respect to the
Connecticut Transfer Act and the matters referred to in
Section 7.09.
Section 7.08 Tax Matters. Parent shall have
received from the Company an Officer's Certificate dated the
Closing Date in the form of Exhibit G.
Section 7.09 Environmental Matters. The Company,
after consultation with Parent, shall have delivered to Parent
in accordance with the requirements of the Connecticut Transfer
Act (i) a fully executed Form I Negative Declaration, or (ii) a
fully executed Form II Negative Declaration, or (iii) a fully
executed Form III Declaration, which Form III shall provide
that the Company shall be responsible for such ongoing environ-
mental requirements as are set forth in such Form III. If the
Company delivers to Parent a Form I or Form II Negative Decla-
ration, Company shall also have delivered to Parent such affi-
davits and other documentation as are reasonably sufficient to
support the Company's conclusion to provide such Form I or Form
II.
Section 7.10 Average Market Value. The Average Mar-
ket Value of Parent Common Stock shall be equal to or greater
than $31 per share.
Section 7.11 Other Matters. At least 30 days prior
to the scheduled date of the Special Meeting, Richard E. Greene
shall have repaid in full in cash, all outstanding loans to him
by the Company, in an aggregate principal amount of approxi-
mately $593,000, and the Company shall have, directly and
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indirectly, no security interest in, option to purchase, or
other right or interest with respect to, any shares of Company
Common Stock owned by Mr. Greene; or Parent shall have received
a letter from its independent auditors, Ernst & Young LLP,
stating the failure to so repay all such loans and/or the Com-
pany continuing to have such an interest would not prevent Par-
ent from accounting for the Merger as a "pooling of interests."
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
The obligations of the Company under this Agreement
to effect the Merger shall be subject to the fulfillment on or
before the Closing Date of each of the following additional
conditions, any one or more of which may be waived by the Com-
pany:
Section 8.01 Representations and Warranties True.
The representations and warranties of Parent and Newco con-
tained herein (without regard to any materiality exceptions or
provisos therein) shall be true and correct in all material
respects on the date of this Agreement and the Closing Date as
though such representations and warranties were made at and on
such date, except (i) for those untruths or inaccuracies which
individually or in the aggregate would not either materially
impair or preclude the ability of Parent or Newco to consummate
the Merger and the other transactions contemplated hereby or
have a Parent Material Adverse Effect and (ii) for changes per-
mitted or contemplated by this Agreement.
Section 8.02 Performance. Parent and Newco shall
have performed and complied in all material respects with all
agreements, obligations and conditions required by this Agree-
ment to be performed or complied with by them on or prior to
the Closing Date except for those failures to so perform or
comply which individually or in the aggregate would not either
materially impair or preclude the ability of Parent or Newco to
consummate the Merger and the other transactions contemplated
hereby or have a Parent Material Adverse Effect.
Section 8.03 Certificates. Parent and Newco shall
furnish such certificates of their respective officers to evi-
dence compliance with the conditions set forth in Sections 8.01
and 8.02 as may be reasonably requested by the Company.
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Section 8.04 Certain Proceedings. No writ, order,
decree or injunction of a court of competent jurisdiction or
governmental entity shall have been entered against Parent,
Newco or the Company which prohibits the consummation of the
Merger, and any waiting period applicable to the consummation
of the Merger under the HSR Act shall have expired or been
terminated.
Section 8.05 Opinion of Counsel. The Company shall
have received the opinions of Cahill Gordon & Reindel, counsel
to Parent, substantially in the forms of Exhibits E and F
hereto.
ARTICLE IX
CLOSING
Section 9.01 Time And Place. Subject to the provi-
sions of Articles VI, VII, VIII and X, the closing of the
Merger (the "Closing") shall take place at the offices of
Cahill Gordon & Reindel, as soon as practicable but in no event
later than 9:30 A.M., local time, on the first business day
after the date on which each of the conditions set forth in
Articles VI, VII and VIII have been satisfied or waived by the
party or parties entitled to the benefit of such conditions; or
at such other place, at such other time, or on such other date
as Parent, Newco and the Company may mutually agree. The date
on which the Closing actually occurs is herein referred to as
the "Closing Date."
Section 9.02 Filings at the Closing. Subject to the
provisions of Articles VI, VII, VIII and X hereof, the Company,
Parent and Newco shall cause to be executed and filed at the
Closing the Certificate of Merger and shall cause the Certifi-
cate of Merger to be recorded in accordance with the applicable
provisions of the Delaware Act and shall take any and all other
lawful actions and do any and all other lawful things necessary
to cause the Merger to become effective.
ARTICLE X
TERMINATION AND ABANDONMENT
Section 10.01 Termination. In connection with the
structure of the transactions as described in the recitals to
this Agreement, the parties have agreed that this Agreement
shall not be terminated, nor the Merger abandoned, except in
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accordance with the provisions of this Article X, all strictly
construed against the party seeking such termination. This
Agreement may be terminated and the Merger may be abandoned any
time prior to the Effective Time, whether before or after
approval by the stockholders of the Company:
(a) by mutual consent of the Boards of Directors of
Parent and the Company;
(b) by either Parent or the Company if, without
fault of such terminating party, the Merger shall not have
been consummated on or before December 31, 1995, which
date may be extended by mutual consent of the parties
hereto;
(c) by either Parent or the Company, if any court of
competent jurisdiction in the United States or other gov-
ernmental body in the United States shall have issued an
order (other than a temporary restraining order), decree
or ruling or taken any other action restraining, enjoining
or otherwise prohibiting the Merger, and such order,
decree, ruling or other action shall have become final and
nonappealable; or
(d) by either Parent or the Company, if the approval
of a majority of the outstanding shares of Company Common
Stock cast at the Special Meeting (including any adjourn-
ment thereof) is not obtained.
Section 10.02 Termination by Parent. This Agreement
may be terminated and the Merger may be abandoned by action of
the Board of Directors of Parent, at any time prior to the
Effective Time, before or after the approval by the stockhold-
ers of the Company, if (a) the Company shall have failed to
comply in any material respect with any of the covenants or
agreements contained in Articles I and V of this Agreement to
be complied with or performed by the Company at or prior to
such date of termination, (b) there exists a breach or breaches
of any representation or warranty of the Company contained in
this Agreement such that the Closing condition set forth in
Section 7.01 would not be satisfied; provided, however, that if
such failure, breach or breaches are capable of being cured
prior to the Effective Time, such failure, breach or breaches
shall not have been cured within 15 days of delivery to the
Company of written notice of such failure, breach or breaches,
or (c) the Company shall furnish or disclose non-public infor-
mation to a third party with respect to any Acquisition
<PAGE>
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Transaction, or shall have resolved to do the foregoing and
publicly disclosed such resolution.
Section 10.03 Termination by the Company. This
Agreement may be terminated and the Merger may be abandoned at
any time prior to the Effective Time, before or after the
approval by the stockholders of the Company, by action of the
Board of the Directors of the Company, if (a) Parent or Newco
shall have failed to comply in any material respect with any of
the covenants or agreements contained in Articles I and V of
this Agreement to be complied with or performed by Parent or
Newco at or prior to such date of termination or (b) there
exists a breach or breaches of any representation or warranty
of Parent or Newco contained in this Agreement such that the
Closing condition set forth in Section 8.01 would not be satis-
fied; provided, however, that if such failure, breach or
breaches are capable of being cured prior to the Effective
Time, such failure, breach or breaches shall not be cured
within 15 days of delivery to Parent of written notice of such
failure, breach or breaches.
Section 10.04 Procedure for Termination. In the
event of termination and abandonment of the Merger by Parent or
the Company pursuant to this Article X, written notice thereof
shall forthwith be given to the other.
Section 10.05 Effect of Termination and Abandonment.
(a) In the event of termination of this Agreement and abandon-
ment of the Merger pursuant to this Article X, no party hereto
(or any of its directors or officers) shall have any liability
or further obligation to any other party to this Agreement,
except as provided in Section 5.03(c) and this Section 10.05
and except that nothing herein shall relieve any party from
liability for any breach of this Agreement.
(b) In the event of (i) a termination of this Agree-
ment pursuant to Section 10.01(b), (c) or (d) and if prior to
any such termination any person shall have made a bona fide
proposal concerning a Business Combination Transaction (as
defined hereinafter) to the Company or its stockholders or
(ii) any termination of this Agreement by Parent pursuant to
Section 10.02, then the Company shall promptly pay Parent by
wire transfer of immediately available funds to an account
specified by Parent up to $1.5 million for all documented fees
and expenses incurred by Parent (including the fees and
expenses of counsel, accountants, consultants and advisors) in
connection with this Agreement and the transactions
<PAGE>
-55-
contemplated hereby. In the event of a termination of this
Agreement pursuant to Section 10.02(c), the Company shall
promptly pay Parent by wire transfer of immediately available
funds to an account specified by Parent an additional fee of
$2.4 million. If an additional fee has not already become pay-
able and if prior to any termination pursuant to
Section 10.01(b), (c) or (d) or 10.02(a) or (b), any person
shall have made a bona fide proposal concerning a Business Com-
bination Transaction and within twelve months after the execu-
tion of this Agreement the Company or any of its Subsidiaries
enters into a definitive agreement with a third party with
respect to a Business Combination Transaction or a Business
Combination Transaction is effected, then the Company, prior to
entering into any such definitive agreement or any such Busi-
ness Combination Transaction being effected, shall promptly pay
Parent by wire transfer of immediately available funds to an
account specified by Parent an additional fee of $2.4 million.
As used in this Section 10.05, the term "Business Combination
Transaction" shall mean any of the following involving the Com-
pany or any Subsidiary, that is material to the business,
results of operation, prospects or financial condition of the
Company and its Subsidiaries taken as whole: (1) any merger,
consolidation, share exchange, business combination or other
similar transaction (other than the Merger); (2) any sale,
lease, exchange, transfer or other disposition of 25% or more
of the assets of the Company and its Subsidiaries, taken as a
whole, in a single transaction or series of transactions; or
(3) the acquisition by a person or entity, or any "group" (as
such term is defined under Section 13(d) of the Exchange Act
and the rules and regulations thereunder) of beneficial owner-
ship of 33 1/3% or more of the Company Common Stock, whether by
tender offer, exchange offer or otherwise.
(c) In the event of a termination of this Agreement
by the Company pursuant to Section 10.03, then Parent shall
promptly pay the Company by wire transfer of immediately avail-
able funds to an account specified by the Company up to $1.5
million for all documented fees and expenses incurred by the
Company (including the fees and expenses of counsel, accoun-
tants, consultants and advisors) in connection with this Agree-
ment and the transactions contemplated hereby.
<PAGE>
-56-
ARTICLE XI
DEFINITIONS
Section 11.01 Terms Defined in This Agreement. The
following capitalized terms used herein shall have the meanings
ascribed in the indicated sections.
Acquisition Transaction......................... 5.02
Affiliates...................................... 4.09
Agreement....................................... First Paragraph
Antitrust Division.............................. 5.05
Average Market Value............................ 2.01
Balance Sheet................................... 4.21
Business Combination Transaction................ 10.05(b)
Certificates.................................... 2.03
Certificate of Merger........................... 1.02
Closing......................................... 9.01
Closing Consideration........................... 2.01
Closing Date.................................... 9.01
COBRA........................................... 4.29
Code............................................ Recitals
Company......................................... First Paragraph
Company Common Stock............................ 2.01
Company Common Stock Equivalents................ 4.17
Company Material Adverse Effect................. 4.01
Company Plans................................... 4.17
Company Preferred Stock......................... 4.17
Company Purchase Rights......................... 4.17
Company Rights Agreement........................ 4.08
Company SEC Reports............................. 4.13
Confidentiality Agreement....................... 5.03
Connecticut Transfer Act........................ 4.30
Constituent Corporations........................ First Paragraph
Convertible Notes............................... 3.02
Delaware Act.................................... 1.01
Disclosure Statement............................ 4.01
Effective Time.................................. 1.02
Environment..................................... 4.30
Environmental Authorizations.................... 4.30
Environmental Laws.............................. 4.30
Environmental Notice............................ 4.30
ERISA........................................... 4.29
ERISA Affiliate................................. 4.29
Exchange Act.................................... 3.05
Exchange Ratio.................................. 2.01
Foreign Plan.................................... 4.29
<PAGE>
-57-
FTC............................................. 5.05
Governmental Authority.......................... 4.30
Hazardous Materials............................. 4.30
HSR Act......................................... 3.04
IRS............................................. 4.29
Intellectual Property Rights.................... 4.27
Merger.......................................... 1.01
Newco........................................... First Paragraph
NYSE............................................ 2.01
Parent.......................................... First Paragraph
Parent Common Stock............................. 2.01
Parent Material Adverse Effect.................. 3.04
Parent Plans.................................... 3.02
Parent Preferred Stock.......................... 3.02
Parent Purchase Right........................... 2.01
Parent SEC Reports.............................. 3.06
PBGC............................................ 4.29
Pension Benefit Plans........................... 4.29
Proxy Statement................................. 3.05
PSE............................................. 3.04
Real Property................................... 4.30
Registration Statement.......................... 3.05
SEC............................................. 3.05
Securities Act.................................. 3.04
Special Meeting................................. 1.05
Stockholder Letter Agreement.................... 4.10
Subsidiaries.................................... 4.18
Surviving Corporation........................... 1.01
Tax Returns..................................... 4.28
Taxes........................................... 4.28
Welfare Plans................................... 4.29
ARTICLE XII
MISCELLANEOUS
Section 12.01 Amendment and Modification. Subject
to applicable law, this Agreement may be amended, modified or
supplemented only by written agreement of Parent, Newco and the
Company at any time prior to the Effective Time with respect to
any of the terms contained herein; provided, however, that
after this Agreement is adopted by the stockholders of the Com-
pany, no such amendment or modification shall change the amount
or form of the Closing Consideration.
Section 12.02 Waiver of Compliance; Consents. Any
failure of Parent or Newco, on the one hand, or the Company, on
<PAGE>
-58-
the other hand, to comply with any obligation, covenant, agree-
ment or condition herein may be waived by the Company or Parent
or Newco, respectively, only by a written instrument signed by
the party granting such waiver, but such waiver or failure to
insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure.
Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 12.02.
Section 12.03 Survivability; Investigations. The
respective representations and warranties of Parent, Newco and
the Company contained herein or in any certificates or other
documents delivered prior to or at the Closing shall not be
deemed waived or otherwise affected by any investigation made
by any party hereto and shall not survive the Closing. Repre-
sentations and warranties to a party's knowledge shall mean
such party shall have made due inquiry and investigation,
except with respect to the Former Locations for which the par-
ties acknowledge that no such inquiry or investigation has been
undertaken by the Company. For purposes of this section,
Former Locations shall mean all locations owned, leased, or
subleased by the Company and where the Company operated or had
a principal place of business, but excluding its present loca-
tions, specifically One Enterprise Drive, Shelton, Connecticut
06484, 12 Cascade Boulevard, Orange, Connecticut 06477, One
Waterview Drive, Shelton, Connecticut 06484, and 540 New Haven
Avenue, Milford, Connecticut 06460.
Section 12.04 Notices. All notices and other commu-
nications hereunder shall be in writing and shall be delivered
personally, by next-day courier or mailed by registered or cer-
tified mail (return receipt requested), first class postage
prepaid, or telecopied with written confirmation of receipt, to
the parties at the addresses specified below (or at such other
address for a party as shall be specified by like notice; pro-
vided, that notices of a change of address shall be effective
only upon receipt thereof). Any such notice shall be effective
upon receipt, if personally delivered or telecopied, one day
after delivery to a courier for next-day delivery, or three
days after mailing, if deposited in the U.S. mail, first class
postage prepaid.
<PAGE>
-59-
(a) if to the Company, to
Data Switch Corporation
One Enterprise Drive
Shelton, Connecticut 06484
Telecopy: (203) 926-9879
Attention: Shawn A. Smith, Esq.
Secretary and Corporate Counsel
with copies to
D. David Cohen, Esq.
Expressway Plaza Two
Suite 200
Roslyn Heights, New York 11577
Telecopy: (516) 621-3516
Parker Duryee Rosoff & Haft
529 Fifth Avenue
New York, New York 10017
Telecopy: (212) 972-9487
Attention: Ira Roxland, Esq.
(b) if to Parent, or Newco, to
General Signal Corporation
One High Ridge Park
Stamford, Connecticut 06904
Telecopy: (203) 329-4396
Attention: Signe S. Gates, Esq.
Assistant General Counsel
with a copy to
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Telecopy: (212) 269-5420
Attention: W. Leslie Duffy, Esq.
Section 12.05 Assignment. This Agreement and all of
the provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors
<PAGE>
-60-
and permitted assigns (including, without limitation, any
wholly owned subsidiary of Parent incorporated under the laws
of Delaware and substituted for Newco as provided in
Section 1.01), but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of
the other parties, nor is this Agreement intended to confer any
rights or remedies hereunder upon any other person except the
parties hereto and, with respect to Section 5.08, the officers
and directors of the Company.
Section 12.06 Governing Law. Except as the laws of
the State of Delaware are by their terms applicable, this
Agreement shall be governed by the laws of the State of New
York (regardless of the laws that might otherwise govern under
applicable New York principles of conflicts of law) as to all
matters, including but not limited to matters of validity, con-
struction, effect, performance and remedies.
Section 12.07 Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute
one and the same instrument.
Section 12.08 Severability. In case any one or more
of the provisions contained in this Agreement should be
invalid, illegal or unenforceable in any respect against a
party hereto, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired thereby and such invalidity, illegality or
unenforceability shall only apply as to such party in the spe-
cific jurisdiction where such judgment shall be made.
Section 12.09 Interpretation. The article and sec-
tion headings contained in this Agreement are solely for the
purpose of reference, are not part of the agreement of the par-
ties and shall not in any way affect the meaning or interpreta-
tion of this Agreement. As used in this Agreement, (i) the
term "person" shall mean and include an individual, a partner-
ship, a joint venture, a corporation, a trust, an unincor-
porated organization and a government or any department or
agency thereof; and (ii) the term "Subsidiary" of any specified
corporation shall mean any corporation of which a majority of
the outstanding securities having ordinary voting power to
elect a majority of the board of directors is directly or indi-
rectly owned by such specified corporation or any other person
<PAGE>
-61-
of which a majority of the equity interests therein is,
directly or indirectly, owned by such specified corporation.
Section 12.10 Entire Agreement. This Agreement,
including the exhibits hereto and the documents and instruments
referred to herein (including the Confidentiality Agreement,
the Non-Solicitation Agreement, dated May 5, 1995, and Disclo-
sure Statement), embodies the entire agreement and understand-
ing of the parties hereto in respect of the subject matter con-
tained herein and supersedes all prior agreements and under-
standings between the parties with respect to such subject mat-
ter. There are no representations, promises, warranties, cove-
nants, or undertakings, other than those expressly set forth or
referred to herein and therein.
<PAGE>
S-1
IN WITNESS WHEREOF, Parent, Newco and the Company
have caused this Agreement to be signed by their respective
duly authorized officers as of the date first above written.
GENERAL SIGNAL CORPORATION
By: /s/ Philip A. Goodrich
Name: Philip A Goodrich
Title: Vice President -
Corporate Development
GENERAL SIGNAL ACQUISITION
CORPORATION
By: /s/ Michael D. Lockhart
Name: Michael D. Lockhart
Title: President
DATA SWITCH CORPORATION
By: /s/ William J. Lifka
Name: William J. Lifka
Title: Chairman, President and CEO
<PAGE>
EXHIBIT A
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
AMENDMENT No. 1 TO RIGHTS AGREEMENT, dated as of
May 8, 1995, between Data Switch Corporation, a Delaware corpo-
ration (the "Company"), and Manufacturers Hanover Trust Company
(now Chemical Bank, the "Rights Agent"), amending the Rights
Agreement, dated as of June 21, 1988, between the Company and
the Rights Agent (the "Rights Agreement").
W I T N E S S E T H :
WHEREAS, the Company intends to enter into an Agree-
ment and Plan of Merger ("Merger Agreement") by and among Gen-
eral Signal Corporation, a New York corporation ("Parent"),
General Signal Acquisition Corporation, a Delaware corporation
and a wholly owned Subsidiary of Parent ("Newco") and the Com-
pany, dated as of May 8, 1995, relating to the merger (the
"Merger") of Newco with and into the Company, with the Company
surviving and it is contemplated that this Amendment No. 1
shall be executed by the Company prior to entering into the
Merger Agreement; and
WHEREAS, the Company and the Rights Agent desire to
amend the Rights Agreement in accordance with Section 26 of the
Rights Agreement and this Amendment No. 1.
NOW, THEREFORE, in consideration of the premises and
mutual agreements set forth in the Rights Agreement and this
Amendment No. 1, the parties hereby agree as follows:
The Rights Agreement is amended by adding the follow-
ing new Section to the end of such Agreement:
"Section 21. Newco Merger. "Notwithstanding
any provision herein to the contrary, neither Gen-
eral Signal Corporation, a New York corporation
("Parent"), nor General Signal Acquisition Corpora-
tion, a Delaware corporation and a wholly owned
Subsidiary of Parent ("Newco"), shall be an
Acquiring Person under this Agreement and no Trig-
gering Event, Distribution Date or Unapproved
Transaction has occurred or will occur, in any such
case as a result of the approval, execution or
delivery of the Agreement and Plan of Merger by and
<PAGE>
-2-
among Parent, Newco and the Company, dated as of
May 8, 1995 (the "Merger Agreement") or the consum-
mation of the Merger (as defined in the Merger
Agreement) or other transactions contemplated
thereby including, without limitation, the execu-
tion and delivery to Parent of the Stockholder Let-
ter Agreements (as defined in the Merger
Agreement)."
Section 2. The term "Agreement" as used in the
Rights Agreement shall be deemed to refer to the Rights Agree-
ment as amended by this Amendment No. 1.
Section 3. This Amendment No. 1 shall be effective
as of the date hereof and, except as set forth herein, the
Rights Agreement shall remain in full force and effect and
shall be otherwise unaffected hereby.
Section 4. This Amendment No. 1 may be executed in
two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment No. 1 to be duly executed, all as of the day and
year first above written.
DATA SWITCH CORPORATION
By:
Name:
Title:
CHEMICAL BANK,
as Rights Agent
By:
Name:
Title:
<PAGE>
EXHIBIT B
Form of Company Affiliate Letter
General Signal Corporation
One High Ridge Park
Stamford, CT 06904
Gentlement:
The undersigned, a holder of shares of common stock,
par value $.01 per share ("Company Common Stock"), of Data
Switch Corporation, a Delaware corporation (the "Company"), is
entitled to receive in connection with the merger (the
"Merger") between the Company and a direct wholly owned Subsid-
iary of General Signal Corporation ("Parent") shares of common
stock, par value $1.00 per share ("Parent Common Stock"), of
Parent. The undersigned acknowledges that the undersigned may
be deemed an "affiliate" of the Company within the meaning of
Rule 145 ("Rule 145") promulgated under the Securities Act of
1933, as amended (the "Act"), although nothing contained herein
should be construed as an admission that the undersigned is an
affiliate.
The undersigned further acknowledges that the under-
signed has been informed that any Parent Common Stock received
by persons who are affiliates upon conversion of any shares of
Company Common Stock pursuant to the Merger may be restricted
under the Act unless such transaction is registered under the
Act or an exemption from such registration is available. The
undersigned understands that such exemptions are limited and
the undersigned has obtained advice of counsel as to the nature
and conditions of such exemptions, including information with
respect to the applicability to the sale of such securities of
Rules 144 and Rule 145(d) promulgated under the Act.
The undersigned hereby represents to and covenants
with Parent that the undersigned will not sell, assign or
transfer any of the Parent Common Stock received by the under-
signed upon conversion of shares of Company Common Stock pursu-
ant to the Merger except (i) pursuant to an effective registra-
tion statement under the Act, (ii) in conformity with the limi-
tations specified by Rules 144 and Rule 145(d) or (iii) in a
transaction which, in the opinion of counsel reasonably satis-
factory to Parent or as described in a "no-action" or interpre-
tive letter from the Staff of the Securities and Exchange Com-
mission (the "SEC"), is not required to be registered under the
Act.
<PAGE>
-2-
It is understood that I have no present intention to
sell the Parent Common Stock acquired by me pursuant to the
Merger. I agree that I will not sell, transfer or otherwise
dispose of any Company Common Stock for 30 days prior to the
effective date of the Merger or any Parent Common Stock
received by me in the Merger until after such time as results
covering at least 30 days of combined operations of the Company
and Parent have been published by Parent, in the form of a
quarterly earnings report, a report to the SEC on Form 10-K,
10-Q or 8-K, or any other public filing or announcement which
includes such combined results of operations.
In the event of a sale or other disposition by the
undersigned of Parent Common Stock pursuant to Rule 145, the
undersigned will supply Parent with evidence of compliance with
such Rule, in the form of a letter in the form of Annex I
hereto. The undersigned understands that Parent may instruct
its transfer agent to withhold the transfer of any Parent Com-
mon Stock disposed of by the undersigned, but that upon receipt
of such evidence of compliance the transfer agent shall effec-
tuate the transfer of the Parent Common Stock sold as indicated
in the letter.
The undersigned acknowledges and agrees that appro-
priate legends will be placed on certificates representing Par-
ent Common Stock received by the undersigned in the Merger or
held by a transferee thereof, which legends will be removed by
delivery of substitute certificates upon receipt of an opinion
in form and substance reasonably satisfactory to Parent from
counsel reasonably satisfactory to Parent to the effect that
such legends are no longer required for the purposes of the Act
or the fourth paragraph of this letter.
The undersigned acknowledges that (i) the undersigned
has carefully read this letter and understands the requirements
hereof and the limitations imposed upon the distribution, sale,
transfer or other disposition of Parent Common Stock and
(ii) the receipt by Parent of this letter is an inducement to
Parent's obligations to execute the Agreement and Plan of
Merger and to consummate the Merger.
Very truly yours,
<PAGE>
ANNEX I
TO EXHIBIT B
[Name] [Date]
On _____________ the undersigned sold _____________
shares of common stock, par value $1.00 per share (the "Parent
Common Stock"), of General Signal Corporation (the "Parent").
The Parent Common Stock was received by the undersigned in con-
nection with the merger of a direct wholly owned Subsidiary of
the Parent with and into Data Switch Corporation.
Based upon the most recent report or statement filed
by the Parent with the Securities and Exchange Commission, the
Parent Common Stock sold by the undersigned was within the pre-
scribed limitations set forth in paragraph (e) of Rule 144 pro-
mulgated under the Securities Act of 1933, as amended (the
"Act").
The undersigned hereby represents that the Parent
Common Stock was sold in "brokers' transactions" within the
meaning of Section 4(4) of the Act or in transactions directly
with a "market maker" as that term is defined in Section
3(a)(38) of the Securities Exchange Act of 1934, as amended.
The undersigned further represents that the undersigned has not
solicited or arranged for the solicitation of orders to buy the
Parent Common Stock, and that the undersigned has not made any
payment in connection with the offer or sale of the Parent Com-
mon Stock to any person other than to the broker who executed
the order in respect of such sale.
Very truly yours,
<PAGE>
EXHIBIT C
May 8, 1995
General Signal Corporation
One High Ridge Park
Stamford, CT 06904
Gentlemen:
This letter is being delivered to you in connection
with, and to induce you to enter into, the Agreement and Plan
of Merger by and among General Signal Corporation ("Parent"),
General Signal Acquisition Corporation and Data Switch Corpora-
tion dated as of May 8, 1995 (the "Merger Agreement"), a copy
of which is attached hereto as Annex 1.
You and the undersigned prior to the date hereof had
no agreement, arrangement or understanding to acquire the
Shares (as defined hereinafter) or for the purpose of
acquiring, holding, voting or disposing of the Shares. Prior
to the date hereof, the Board of Directors of Data Switch Cor-
poration, a Delaware corporation ("the Company"), has approved
you and the undersigned entering into this letter agreement and
the transactions contemplated by this letter agreement, as well
as the execution and delivery by the Company of the Merger
Agreement providing for the merger of the Company with a direct
wholly-owned subsidiary of yours (the "Merger") and the conver-
sion of each outstanding share of common stock, par value $.01
per share, of the Company (the "Company Common Stock"), other
than shares of Common Stock owned by the Company or any subsid-
iary of the Company, into the right to receive common stock,
par value $1.00 per share, of Parent ("Parent Common Stock").
The undersigned hereby represents and warrants to,
and covenants and agrees with, Parent as follows:
(a) Your and the undersigned's obligations hereunder
shall be subject to the condition that the Merger and this let-
ter agreement shall have been approved by the Board of Direc-
tors of the Company with the effect that Parent will not be
subject to the restrictions of Section 203 of the Delaware Gen-
eral Corporation Law.
(b) The undersigned is the beneficial and/or record
holder of approximately 2,041,275 shares of Company Common
Stock (the "Shares"), including 131,250 shares held in a trust
<PAGE>
-2-
for the benefit of Barry Greene and Lauren Jennifer Greene and
47,000 shares held by his wife (as to which the undersigned
disclaims beneficial ownership), and has the right to acquire
certain additional shares of Company Common Stock (the
"Rights"). 400,000 of the Shares (the "Pledged Shares") have
been pledged to the Company as collateral security for a loan
in the principal amount of approximately $500,000 (the "Loan").
(c) The undersigned will not assign, sell, transfer
or otherwise dispose of, including by way of pledge, hypotheca-
tion or grant of any security interest, any of the Shares, the
Rights, or any Future Shares (as hereinafter defined), or enter
into any direct or indirect agreement or arrangement to effect
any of the foregoing, on or before December 31, 1995; provided,
that the undersigned may pledge Pledged Shares to a broker or
commercial bank for the purpose of securing a loan to repay the
Loan and another loan by the Company to the undersigned in the
principal amount of approximately $93,000.
(d) In the event that any proposal or offer (other
than a proposal or offer by Parent or its affiliates) for a
tender or exchange offer, merger, consolidation or other busi-
ness combination involving the Company or any Subsidiary of the
Company or any proposal to acquire in any manner a substantial
equity interest in, or a substantial portion of the assets of,
the Company or any of its Subsidiaries or a liquidation or dis-
solution of the Company (an "Acquisition Proposal") is the sub-
ject of approval or ratification by the shareholders of the
Company on or before December 31, 1995, the undersigned agrees
to vote the Shares and any Future Shares for the Merger Agree-
ment and against approval or ratification of, and to refuse to
give any written consent for, any such Acquisition Proposal and
not otherwise to take any action that would or could have the
effect of increasing the likelihood that such Acquisition Pro-
posal would be approved or ratified by the shareholders of the
Company or otherwise entered into by the Company. If prior to
the termination of the Merger Agreement pursuant to Section
10.01(b), (c) or (d) or 10.2 thereof any person shall have made
a bona fide proposal concerning a Business Combination Transac-
tion (as defined in the Merger Agreement) to the Company or its
stockholders and within twelve months after any such termina-
tion the Company or any of its Subsidiaries effects a Business
Combination Transaction which the undersigned has consented to
or voted the Shares or the Future Shares to approve or ratify
or in respect of which the undersigned has taken any action
that would or could have the effect of increasing the likeli-
hood that such Business Combination Transaction is effected,
<PAGE>
-3-
then the undersigned shall pay to Parent cash, by wire transfer
of immediately available funds, in an amount equal to the
excess of the amount realized by the undersigned in connection
with such Business Combination Transaction and $4.55 per Share.
(e) The undersigned hereby delivers to you his duly
executed and irrevocable proxy attached hereto with respect to
the Shares and any shares of Company Common Stock acquired
after the date hereof, including without limitation upon exer-
cise of any Rights (the "Future Shares").
(f) The undersigned agrees that, prior to the ear-
lier of the Effective Time (as defined in the Merger Agreement)
and December 31, 1995, the undersigned shall not, directly or
indirectly, solicit, initiate or encourage (including by way of
furnishing information) inquiries or proposals concerning any
Acquisition Proposal or negotiate, explore or otherwise commu-
nicate with any third party (other than Parent or its affili-
ates) regarding any Acquisition Proposal.
(g) The undersigned hereby agrees, from and after
the date hereof, to use all reasonable efforts to assist in the
Merger (as defined in the Merger Agreement) becoming effective
and being treated as contemplated by the Merger Agreement; pro-
vided, however, that this provision shall not obligate the
undersigned to incur any costs, expenses or liability or take
any actions to its economic detriment. The undersigned further
agrees to execute and deliver or cause to be delivered to Par-
ent such additional powers and instruments as Parent may rea-
sonably require or deem advisable to carry into effect the pur-
poses of this letter agreement or the Merger Agreement.
<PAGE>
-4-
This letter agreement shall be governed by the laws
of the State of New York applicable to contracts made and per-
formed wholly in such state.
Very truly yours,
Agreed to:
General Signal Corporation
By:________________________
Name:
Title:
Approved:
Data Switch Corporation
By:________________________
Name:
Title:
<PAGE>
Irrevocable Proxy
The undersigned hereby revokes any previous proxies
and appoints , and ,
and each of them, as attorney and proxy of the undersigned to
attend any and all meetings of the shareholders of Data Switch
Corporation, a Delaware corporation ("the Company"), to vote
all shares of common stock, $.01 par value, of the Company
owned by the undersigned on the date hereof or hereafter
acquired (including, without limitation, any such shares
acquired upon exercise of any Rights (as defined in the
attached letter agreement)) and to represent and otherwise to
act for the undersigned in the same manner and with the same
effect as if done by the undersigned where any Acquisition Pro-
posal (as defined in the attached letter agreement), including
without limitation the Merger (as defined in the Agreement and
Plan of Merger by and among General Signal Corporation, General
Signal Acquisition Corporation and the Company dated as of
May 8, 1995), is submitted to shareholders of the Company for
approval.
This proxy shall be deemed to be a proxy coupled with
an interest and is irrevocable and shall remain in effect until
December 31, 1995.
The undersigned authorizes such attorney and proxy to
substitute any other person to act hereunder, to revoke any
substitution and to file this proxy and any substitution or
revocation with the Secretary of the Company.
Name:
Dated: May 8, 1995
<PAGE>
EXHIBIT D-1
[Form of Opinion of PARKER DURYEE ROSOFF & HAFT]
Ladies and Gentlemen:
We have acted as counsel to Data Switch Corporation,
a Delaware corporation (the "Company"), in connection with the
Agreement and Plan of Merger (the "Merger Agreement") dated as
of May 8, 1995 by and among the Company, General Signal Corpo-
ration, a New York corporation (the "Parent"), and General Sig-
nal Acquisition Corporation, a Delaware corporation ("Newco").
This opinion is being rendered to you pursuant to Section 7.07
of the Agreement. Capitalized terms, unless otherwise defined
herein, shall have the meanings ascribed to them in the Merger
Agreement.
As such counsel, we have reviewed the Agreement, the
Registration Statement, the Proxy Statement/Prospectus and the
Company SEC Reports. We have also examined the Certificate of
Incorporation and Bylaws of the Company, the resolutions
adopted by the Board of Directors of the Company and such other
documents, certificates and instruments as in our judgment were
necessary or appropriate to enable us to render the opinions
expressed below.
The law covered by the opinions expressed herein is
limited to the Federal law of the United States, the laws of
the State of New York and the General Corporation Law of the
State of Delaware (the "DGCL").
Based upon and subject to the foregoing and subject
to the limitations and qualifications set forth below, we are
of the opinion that:
(a) Each of the Company and the Company's Subsidiar-
ies incorporated under the laws of a state of the United States
(the "Domestic Subsidiaries") which would constitute a "sig-
nificant Subsidiary" as defined in Rule 1.02 of Regulation S-X
promulgated by the SEC (each a "Significant Subsidiary" and
collectively the "Significant Subsidiaries") is a corporation
duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all requisite
corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
Each of the Company and its Domestic Subsidiaries is duly qual-
ified to transact business and is in good standing as a foreign
corporation in each jurisdiction where, to our knowledge, the
character of its activities requires such qualification, except
<PAGE>
-2-
where the failure to be so qualified would not, individually or
in the aggregate, either materially impair or preclude the
ability of the Company to consummate the Merger and the other
transactions contemplated by the Merger Agreement or have a
Company Material Adverse Effect.
(b) The Company is directly or indirectly the record
and, to our knowledge, beneficial owner of all of the outstand-
ing shares of capital stock of each of its Domestic Subsidiar-
ies, all of such shares so owned by the Company are validly
issued, fully paid and nonassessable and, except as set forth
on Schedule (b) hereto, are owned by it free and clear of any
claim, lien or encumbrance perfected by possession of the cer-
tificates evidencing such shares and, to our knowledge, any
other claim, lien or encumbrance.
(c) The authorized capital stock of the Company con-
sists of 20,000,000 shares of common stock, par value $.01 per
share ("Common Stock") and 100,000 shares of Convertible Pre-
ferred Stock, par value $10.00 per share ("Preferred Stock").
As of the date hereof, there were shares of Common
Stock and no shares of Preferred Stock issued and outstanding
and shares of Common Stock held in the Company's trea-
sury. All of such outstanding shares of Common Stock are duly
authorized, validly issued, fully paid and nonassessable, and
have not been issued in violation of any preemptive rights.
Except for outstanding warrants and options entitling the hold-
ers thereof to purchase up to shares of Common Stock,
outstanding debt securities of the Company convertible in up to
shares of Common Stock and the Company Purchase
Rights, to our knowledge, there are no other outstanding or
authorized options, warrants, calls, subscriptions, rights,
commitments or any other agreements of any character obligating
the Company to issue, transfer or sell any shares of capital
stock of the Company or any securities convertible into or evi-
dencing the right to purchase or subscribe for any shares of
such stock.
(d) The Company has all requisite corporate power
and authority to execute and deliver the Merger Agreement and
to perform its obligations thereunder. The execution and
delivery of the Merger Agreement by the Company and the consum-
mation by the Company of the Merger and other transactions con-
templated thereby have been duly and validly authorized by all
necessary corporate action on the part of the Company and no
other corporate proceedings on the part of the Company (assum-
ing approval by the Company's stockholders as required by the
<PAGE>
-3-
Delaware Act and the Company's Restated Certificate of Incorpo-
ration) are necessary to authorize the Merger Agreement or the
consummation of the transactions contemplated thereby. The
Merger Agreement has been duly and validly executed and deliv-
ered by the Company and constitutes the legal, valid and bind-
ing agreement of the Company, enforceable against it in accor-
dance with its terms subject to applicable bankruptcy, insol-
vency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies gener-
ally, and subject, as to enforceability, to general principles
of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement
is sought in a proceeding at law or in equity).
(e) The execution and delivery of the Merger Agree-
ment, the consummation of the Merger and the other transactions
contemplated thereby and compliance by the Company with any of
the provisions thereof will not conflict with, constitute a
default under or violate (i) any of the terms, conditions or
provisions of the Restated Certificate of Incorporation (or
other applicable charter document) or By-Laws of the Company or
any of its Subsidiaries, (ii) any of the terms, conditions or
provisions of any document, agreement or other instrument of
which we have knowledge to which the Company or any of its Sub-
sidiaries is a party or by which any of them is bound,
(iii) any law or regulation (other than federal and state secu-
rities or blue sky laws, as to which we express no opinion)
applicable to the Company or any of its Subsidiaries, or
(iv) any judgment, writ, injunction, decree, order or ruling of
any court or governmental authority of which we have knowledge
binding on the Company or any of its Subsidiaries, excluding
from the foregoing clauses (ii), (iii) and (iv) conflicts,
defaults or violations which, either individually or in the
aggregate, would not have a Company Material Adverse Effect.
(f) No consent, approval, waiver, license or autho-
rization or other action by or filing with any governmental
authority is required in connection with the execution and
delivery by the Company of the Merger Agreement or the consum-
mation by the Company of the Merger or other transactions con-
templated thereby except for the filings required under and in
compliance with the HSR Act or the Delaware Act, and filings
under federal or state securities or blue sky laws, as to which
we express no opinion, and except for consents, approvals,
waivers, licenses or authorizations which if not obtained, made
or given will not, individually or in the aggregate, have a
Company Material Adverse Effect.
<PAGE>
-4-
(g) Except as disclosed on the Balance Sheet or in
the Disclosure Statement, to our knowledge, there is no
(i) claim, action, suit or proceeding pending or threatened
against or relating to the Company or any of its Subsidiaries
before any court or governmental or regulatory authority or
body or arbitration tribunal, or (ii) outstanding judgment,
order, writ, injunction or decree, or application, request or
motion therefor, of any court, governmental agency or arbitra-
tion tribunal in a proceeding to which the Company, any Subsid-
iary of the Company or any of their respective assets was or is
a party except, in the case of clauses (i) and (ii) above, such
as would not, individually or in the aggregate, have a Company
Material Adverse Effect.
(h) The Registration Statement and Proxy Statement
(with respect to the Company and its Subsidiaries) comply as to
form in all material respects with the applicable provisions of
the Securities Act and Exchange Act, as the case may be (except
that no opinion is expressed herein with respect to the finan-
cial statements and the notes thereto, the financial statement
schedules and the other financial, statistical and accounting
data included in the Registration Statement).
(i) Except for the persons listed on the attached
Schedule (i), to our knowledge, no person, for purposes of Rule
145 under the Securities Act, is an affiliate of the Company.
In addition, we have participated in conferences with
directors, officers and other representatives of the Company,
Parent and Newco, and representatives of the independent public
accountants for the Company, Parent and Newco, at which confer-
ences the contents of the Registration Statement and Proxy
Statement and related matters were discussed, and, although we
have not independently verified and are not passing upon and
assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration State-
ment or Proxy Statement, on basis of the foregoing (relying as
to materiality to a large extent upon the opinions of the
officers and other representatives of the Company) no facts
have come to our attention which lead us to believe that the
portions of the Registration Statement or Proxy Statement with
respect to the Company and its Subsidiaries, in the case of the
Registration Statement, on the effective date of the Registra-
tion Statement or at the Effective Time and, in the case of the
Proxy Statement, at the date the Proxy Statement was first
mailed to shareholders, at the time of the Special Meeting or
at the Effective Time, contained an untrue statement of a
<PAGE>
-5-
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements contained
therein not misleading (it being understood that we express no
view with respect to the financial statements and related
notes, the financial statement schedules and the other finan-
cial, statistical and accounting data included or incorporated
in the Registration Statement or the Prospectus).
The opinions set forth herein are subject to the fol-
lowing assumptions, qualifications and limitations:
(a) We have assumed, with your permission and with-
out independent investigation: (i) that the signatures on all
documents examined by us are genuine and that where any such
signature purports to have been made in a corporate, governmen-
tal, fiduciary or other capacity, the person who affixed such
signature to such document had authority to do so (other than
if such person is an officer of the Company), (ii) the authen-
ticity of documents submitted to us as originals, and the con-
formity to authentic original documents of all documents sub-
mitted to us as certified, conformed or photostatic copies and
(iii) the correctness of public files, records and certificates
of, or furnished by, governmental or regulatory agencies or
authorities.
(b) We have assumed, with your permission and with-
out independent investigation, that the Merger Agreement and
the agreements contemplated therein have been duly authorized,
executed and delivered by each of the parties thereto (other
than the Company) and constitute the valid and binding obliga-
tions of such parties, enforceable against such parties in
accordance with their terms.
(c) As to matters of fact we have relied upon and
assumed the accuracy of, with your permission, the statements
of fact contained in the certificates of the Company delivered
to Parent and Newco pursuant to Section 7.03 and such other
certificates of officers of the Company which are reasonably
satisfactory to your counsel and which are attached to this
opinion, and, except as otherwise specifically provided herein,
have not made any independent investigation or verification of
the accuracy of the factual statements contained therein.
(d) In rendering the opinions set forth in
paragraph (a), as to the good standing of the Company and its
Domestic Subsidiaries under the laws of the jurisdiction of its
incorporation or formation and the good standing and due
<PAGE>
-6-
qualification of the Company and its Domestic Subsidiaries as a
foreign corporation in the specific jurisdictions listed in
Section 4.01 of the Disclosure Statement, we have relied exclu-
sively upon certificates of public officials, copies of which
have been furnished to you.
(e) In rendering the opinions set forth in
paragraphs (b) and (c), we have assumed the correctness of, and
are relying solely upon, the statements set forth in the cer-
tificates of the Company delivered to Parent and Newco pursuant
to Section 7.03 and such other certificates of officers of the
Company which are reasonably satisfactory to your counsel and
copies of which have been furnished to you previously, without
making any independent investigation or inquiry whatsoever with
respect to the accuracy of such statements, other than a review
of the relevant minute books and stock transfer records.
(f) Except as otherwise specifically provided
herein, when we have given an opinion herein "to our knowl-
edge," "known to us," or "of which we have actual knowledge,"
we have relied solely upon the conscious awareness of informa-
tion by lawyers of this Firm who have been involved in negoti-
ating the Merger and preparing the Merger Agreement, the Proxy
Statement/Prospectus and the Registration Statement, upon cer-
tificates of officers of the Company and, where appropriate,
upon a review of the Certificate of Incorporation and By-laws
of the Company and upon the exhibits to the Registration State-
ment, and we have not made any other independent investigation
or inquiry.
This opinion is furnished as of the date hereof by
us, as counsel for the Company, to you solely with respect to
the Merger and with the understanding that we are not hereby
assuming any professional responsibility to any other person or
entity whatsoever.
Very truly yours,
PARKER DURYEE ROSOFF & HAFT
By: ________________________
A Member of the Firm
<PAGE>
EXHIBIT D-2
[Form of Opinion of SHAWN A. SMITH]
(a) Each of the Company and the Company's Subsidiar-
ies (the "Subsidiaries") which would constitute a "significant
Subsidiary" as defined in Rule 1.02 of Regulation S-X promul-
gated by the SEC (each a "Significant Subsidiary" and collec-
tively the "Significant Subsidiaries") is a corporation duly
organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has all requisite cor-
porate power and authority to own, lease and operate its prop-
erties and to carry on its business as now being conducted.
Each of the Company and its Subsidiaries is duly qualified to
transact business and is in good standing as a foreign corpora-
tion in each jurisdiction where, to my knowledge, the character
of its activities requires such qualification, except where the
failure to be so qualified would not, individually or in the
aggregate, either materially impair or preclude the ability of
the Company to consummate the Merger and the other transactions
contemplated by the Merger Agreement or have a Company Material
Adverse Effect.
(b) The Company is directly or indirectly the record
and, to my knowledge, beneficial owner of all of the outstand-
ing shares of capital stock of each of its Subsidiaries, all of
such shares so owned by the Company are validly issued, fully
paid and nonassessable and, except as set forth on Schedule (b)
hereto, are owned by it free and clear of any perfected claim,
lien or encumbrance and, to my knowledge, any other claim, lien
or encumbrance.
(c) The authorized capital stock of the Company con-
sists of 20,000,000 shares of common stock, par value $.01 per
share ("Common Stock") and 100,000 shares of Convertible Pre-
ferred Stock, par value $10.00 per share ("Preferred Stock").
As of the date hereof, there were shares of Common
Stock and no shares of Preferred Stock issued and outstanding
and shares of Common Stock held in the Company's trea-
sury. All of such outstanding shares of Common Stock are duly
authorized, validly issued, fully paid and nonassessable, and
have not been issued in violation of any preemptive rights.
Except for outstanding warrants and options entitling the hold-
ers thereof to purchase up to shares of Common Stock,
outstanding debt securities of the Company convertible in up to
shares of Common Stock and the Company Purchase
Rights, to my knowledge, there are no other outstanding or
authorized options, warrants, calls, subscriptions, rights,
<PAGE>
-2-
commitments or any other agreements of any character obligating
the Company to issue, transfer or sell any shares of capital
stock of the Company or any securities convertible into or evi-
dencing the right to purchase or subscribe for any shares of
such stock.
(d) The Company has all requisite corporate power
and authority to execute and deliver the Merger Agreement and
to perform its obligations thereunder. The execution and
delivery of the Merger Agreement by the Company and the consum-
mation by the Company of the Merger and other transactions con-
templated thereby have been duly and validly authorized by all
necessary corporate action on the part of the Company and no
other corporate proceedings on the part of the Company (assum-
ing approval by the Company's stockholders as required by the
Delaware Act and the Company's Restated Certificate of Incorpo-
ration) are necessary to authorize the Merger Agreement or the
consummation of the transactions contemplated thereby. The
Merger Agreement has been duly and validly executed and deliv-
ered by the Company and constitutes the legal, valid and bind-
ing agreement of the Company, enforceable against it in accor-
dance with its terms.
(e) The execution and delivery of the Merger Agree-
ment, the consummation of the Merger and the other transactions
contemplated thereby and compliance by the Company with any of
the provisions thereof will not conflict with, constitute a
default under or violate (i) any of the terms, conditions or
provisions of the Restated Certificate of Incorporation (or
other applicable charter document) or By-Laws of the Company or
any of its Subsidiaries, (ii) any of the terms, conditions or
provisions of any document, agreement or other instrument of
which I have knowledge to which the Company or any of its Sub-
sidiaries is a party or by which any of them is bound,
(iii) any law or regulation (other than federal and state secu-
rities or blue sky laws, as to which I express no opinion)
applicable to the Company or any of its Subsidiaries, or
(iv) any judgment, writ, injunction, decree, order or ruling of
any court or governmental authority of which I have knowledge
binding on the Company or any of its Subsidiaries, excluding
from the foregoing clauses (ii), (iii) and (iv) conflicts,
defaults or violations which, either individually or in the
aggregate, would not have a Company Material Adverse Effect.
(f) No consent, approval, waiver, license or autho-
rization or other action by or filing with any governmental
authority is required in connection with the execution and
<PAGE>
-3-
delivery by the Company of the Merger Agreement or the consum-
mation by the Company of the Merger or other transactions con-
templated thereby except for the filings required under and in
compliance with the HSR Act or the Delaware Act, and filings
under federal or state securities or blue sky laws, as to which
I express no opinion, and except for consents, approvals, waiv-
ers, licenses or authorizations which if not obtained, made or
given will not, individually or in the aggregate, have a Com-
pany Material Adverse Effect.
(g) Except as disclosed on the Balance Sheet or in
the Disclosure Statement, to my knowledge, there is no
(i) claim, action, suit or proceeding pending or threatened
against or relating to the Company or any of its Subsidiaries
before any court or governmental or regulatory authority or
body or arbitration tribunal, or (ii) outstanding judgment,
order, writ, injunction or decree, or application, request or
motion therefor, of any court, governmental agency or arbitra-
tion tribunal in a proceeding to which the Company, any Subsid-
iary of the Company or any of their respective assets was or is
a party except, in the case of clauses (i) and (ii) above, such
as would not, individually or in the aggregate, have a Company
Material Adverse Effect.
(h) The Registration Statement and Proxy Statement
(with respect to the Company and its Subsidiaries) comply as to
form in all material respects with the applicable provisions of
the Securities Act and Exchange Act, as the case may be (except
that no opinion is expressed herein with respect to the finan-
cial statements and the notes thereto, the financial statement
schedules and the other financial, statistical and accounting
data included in the Registration Statement).
(i) Except for the persons listed on the attached
Schedule (i), to my knowledge, no person, for purposes of Rule
145 under the Securities Act, is an affiliate of the Company.
In addition, I have participated in conferences with
directors, officers and other representatives of the Company,
Parent and Newco, and representatives of the independent public
accountants for the Company, Parent and Newco, at which confer-
ences the contents of the Registration Statement and Proxy
Statement and related matters were discussed, and, although I
have not independently verified and am not passing upon and
assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration State-
ment or Proxy Statement, on basis of the foregoing (relying as
<PAGE>
-4-
to materiality to a large extent upon the opinions of the
officers and other representatives of the Company) no facts
have come to my attention which lead me to believe that the
portions of the Registration Statement or Proxy Statement with
respect to the Company and its Subsidiaries, in the case of the
Registration Statement, on the effective date of the Registra-
tion Statement or at the Effective Time and, in the case of the
Proxy Statement, at the date the Proxy Statement was first
mailed to shareholders, at the time of the Special Meeting or
at the Effective Time, contained an untrue statement of a mate-
rial fact or omitted to state a material fact required to be
stated therein or necessary to make the statements contained
therein not misleading (it being understood that I express no
view with respect to the financial statements and related
notes, the financial statement schedules and the other finan-
cial, statistical and accounting data included or incorporated
in the Registration Statement or the Prospectus).
<PAGE>
EXHIBIT D-3
[Form of Opinion of D. DAVID COHEN]
(a) Each of the Company and the Company's Subsidiar-
ies (the "Subsidiaries") which would constitute a "significant
Subsidiary" as defined in Rule 1.02 of Regulation S-X promul-
gated by the SEC (each a "Significant Subsidiary" and collec-
tively the "Significant Subsidiaries") is a corporation duly
organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has all requisite cor-
porate power and authority to own, lease and operate its prop-
erties and to carry on its business as now being conducted.
Each of the Company and its Subsidiaries is duly qualified to
transact business and is in good standing as a foreign corpora-
tion in each jurisdiction where, to my knowledge, the character
of its activities requires such qualification, except where the
failure to be so qualified would not, individually or in the
aggregate, either materially impair or preclude the ability of
the Company to consummate the Merger and the other transactions
contemplated by the Merger Agreement or have a Company Material
Adverse Effect.
(b) The Company is directly or indirectly the record
and, to my knowledge, beneficial owner of all of the outstand-
ing shares of capital stock of each of its Subsidiaries, all of
such shares so owned by the Company are validly issued, fully
paid and nonassessable and, except as set forth on Schedule (b)
hereto, are owned by it free and clear of any perfected claim,
lien or encumbrance and, to my knowledge, any other claim, lien
or encumbrance.
(c) The authorized capital stock of the Company con-
sists of 20,000,000 shares of common stock, par value $.01 per
share ("Common Stock") and 100,000 shares of Convertible Pre-
ferred Stock, par value $10.00 per share ("Preferred Stock").
As of the date hereof, there were shares of Common
Stock and no shares of Preferred Stock issued and outstanding
and shares of Common Stock held in the Company's trea-
sury. All of such outstanding shares of Common Stock are duly
authorized, validly issued, fully paid and nonassessable, and
have not been issued in violation of any preemptive rights.
Except for outstanding warrants and options entitling the hold-
ers thereof to purchase up to shares of Common Stock,
outstanding debt securities of the Company convertible in up to
shares of Common Stock and the Company Purchase
Rights, to my knowledge, there are no other outstanding or
authorized options, warrants, calls, subscriptions, rights,
<PAGE>
-2-
commitments or any other agreements of any character obligating
the Company to issue, transfer or sell any shares of capital
stock of the Company or any securities convertible into or evi-
dencing the right to purchase or subscribe for any shares of
such stock.
(d) The Company has all requisite corporate power
and authority to execute and deliver the Merger Agreement and
to perform its obligations thereunder. The execution and
delivery of the Merger Agreement by the Company and the consum-
mation by the Company of the Merger and other transactions con-
templated thereby have been duly and validly authorized by all
necessary corporate action on the part of the Company and no
other corporate proceedings on the part of the Company (assum-
ing approval by the Company's stockholders as required by the
Delaware Act and the Company's Restated Certificate of Incorpo-
ration) are necessary to authorize the Merger Agreement or the
consummation of the transactions contemplated thereby. The
Merger Agreement has been duly and validly executed and deliv-
ered by the Company and constitutes the legal, valid and bind-
ing agreement of the Company, enforceable against it in accor-
dance with its terms.
(e) The execution and delivery of the Merger Agree-
ment, the consummation of the Merger and the other transactions
contemplated thereby and compliance by the Company with any of
the provisions thereof will not conflict with, constitute a
default under or violate (i) any of the terms, conditions or
provisions of the Restated Certificate of Incorporation (or
other applicable charter document) or By-Laws of the Company or
any of its Subsidiaries, (ii) any of the terms, conditions or
provisions of any document, agreement or other instrument of
which I have knowledge to which the Company or any of its Sub-
sidiaries is a party or by which any of them is bound,
(iii) any law or regulation (other than federal and state secu-
rities or blue sky laws, as to which I express no opinion)
applicable to the Company or any of its Subsidiaries, or
(iv) any judgment, writ, injunction, decree, order or ruling of
any court or governmental authority of which I have knowledge
binding on the Company or any of its Subsidiaries, excluding
from the foregoing clauses (ii), (iii) and (iv) conflicts,
defaults or violations which, either individually or in the
aggregate, would not have a Company Material Adverse Effect.
(f) No consent, approval, waiver, license or autho-
rization or other action by or filing with any governmental
authority is required in connection with the execution and
<PAGE>
-3-
delivery by the Company of the Merger Agreement or the consum-
mation by the Company of the Merger or other transactions con-
templated thereby except for the filings required under and in
compliance with the HSR Act or the Delaware Act, and filings
under federal or state securities or blue sky laws, as to which
I express no opinion, and except for consents, approvals, waiv-
ers, licenses or authorizations which if not obtained, made or
given will not, individually or in the aggregate, have a Com-
pany Material Adverse Effect.
(g) Except as disclosed on the Balance Sheet or in
the Disclosure Statement, to my knowledge, there is no (i)
claim, action, suit or proceeding pending or threatened against
or relating to the Company or any of its Subsidiaries before
any court or governmental or regulatory authority or body or
arbitration tribunal, or (ii) outstanding judgment, order,
writ, injunction or decree, or application, request or motion
therefor, of any court, governmental agency or arbitration tri-
bunal in a proceeding to which the Company, any Subsidiary of
the Company or any of their respective assets was or is a party
except, in the case of clauses (i) and (ii) above, such as
would not, individually or in the aggregate, have a Company
Material Adverse Effect.
(h) The Registration Statement and Proxy Statement
(with respect to the Company and its Subsidiaries) comply as to
form in all material respects with the applicable provisions of
the Securities Act and Exchange Act, as the case may be (except
that no opinion is expressed herein with respect to the finan-
cial statements and the notes thereto, the financial statement
schedules and the other financial, statistical and accounting
data included in the Registration Statement).
(i) Except for the persons listed on the attached
Schedule (i), to my knowledge, no person, for purposes of Rule
145 under the Securities Act, is an affiliate of the Company.
In addition, I have participated in conferences with
directors, officers and other representatives of the Company,
Parent and Newco, and representatives of the independent public
accountants for the Company, Parent and Newco, at which confer-
ences the contents of the Registration Statement and Proxy
Statement and related matters were discussed, and, although I
have not independently verified and am not passing upon and
assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration State-
ment or Proxy Statement, on basis of the foregoing (relying as
<PAGE>
-4-
to materiality to a large extent upon the opinions of the
officers and other representatives of the Company) no facts
have come to my attention which lead me to believe that the
portions of the Registration Statement or Proxy Statement with
respect to the Company and its Subsidiaries, in the case of the
Registration Statement, on the effective date of the Registra-
tion Statement or at the Effective Time and, in the case of the
Proxy Statement, at the date the Proxy Statement was first
mailed to shareholders, at the time of the Special Meeting or
at the Effective Time, contained an untrue statement of a mate-
rial fact or omitted to state a material fact required to be
stated therein or necessary to make the statements contained
therein not misleading (it being understood that I express no
view with respect to the financial statements and related
notes, the financial statement schedules and the other finan-
cial, statistical and accounting data included or incorporated
in the Registration Statement or the Prospectus).
<PAGE>
EXHIBIT E
[Form of Tax Opinion of Cahill Gordon & Reindel]
We have acted as counsel to General Signal Corpora-
tion, a New York corporation ("Parent"), in connection with the
planned merger (the "Merger") of General Signal Acquisition
Corporation, a Delaware corporation ("Newco"), with and into
Data Switch Corporation, a Delaware corporation (the "Com-
pany"), pursuant to the Agreement and Plan of Merger by and
among Parent, Newco and the Company dated as of May 8, 1995
(the "Merger Agreement"). Any capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the
Merger Agreement or, if not defined therein, in the Joint Proxy
Statement/Prospectus (the "Proxy Statement") that is included
in the Registration Statement on Form S-4 (the "Registration
Statement", Registration No. 33- ) covering the registration
of Parent Common Stock under the Securities Act of 1933, as
amended (the "Act"), as filed by Parent with the Securities and
Exchange Commission (the "SEC") on [ ], 1995.
For purposes of this opinion we have relied, with
your consent, upon the accuracy and completeness of the state-
ments and representations contained in (i) the Officer's Cer-
tificate of each of Parent and the Company, (ii) the Merger
Agreement, and (iii) the Proxy Statement, which statements and
representations we have not verified. We have also assumed
that the Merger will be consummated in accordance with the
Merger Agreement and as described in the Proxy Statement.
Based upon and subject to the foregoing we are of
the opinion that, for federal income tax purposes:
1. The Merger will be treated as a reorganiza-
tion within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the
"Code").
2. Each of Parent, Newco and the Company will
be a party to such reorganization within the meaning
of Section 368(b) of the Code.
3. No gain or loss will be recognized by the
stockholders of the Company on the exchange of their
shares of Company Common Stock for shares of Parent
Common Stock.
4. The basis of the shares of Parent Common
Stock to be received by the shareholders of the
<PAGE>
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Company (including any fractional share interest to
which they may be entitled) will be the same as the
basis of the shares of Company Common Stock surren-
dered in exchange therefor.
5. The holding period of the shares of Parent
Common Stock to be received by the shareholders of the
Company in the exchange (including any fractional
share interest to which they may be entitled) will
include the holding period of the shares of Company
Common Stock to be surrendered in exchange therefor,
provided the shares of Company Common Stock are held
as capital assets in the hands of the shareholders of
the Company at the Effective Time.
6. Cash received by a shareholder of the Com-
pany in lieu of a fractional share of Parent Common
Stock will be treated as if the fractional share were
distributed as part of the exchange and then redeemed
by Parent, with the cash being received in full pay-
ment for the fractional share.
This opinion letter is intended only for the use of
Parent and the Company in connection with the transactions con-
templated in the Merger Agreement. This opinion may not be
relied upon by Parent or the Company for any other purpose and
it may not be relied on by any other person for any purpose, in
each case without our prior written consent.
We hereby consent to the filing of this opinion with
the SEC as an exhibit to the Registration Statement. In giving
the foregoing consent, we do not hereby admit that we are in
the category of persons whose consent is required under Section
7 of the Act or the rules and regulations thereunder.
Very truly yours,
<PAGE>
EXHIBIT F
[Form of Opinion of Cahill Gordon & Reindel]
Capitalized terms, unless otherwise defined herein,
shall have the meanings ascribed to them in the Merger Agree-
ment to which this Exhibit F is attached (the "Merger
Agreement").
1. Parent is a corporation duly organized and val-
idly existing under the laws of the State of New York. Newco
is a corporation duly organized and validly existing under the
laws of the State of Delaware.
2. Each of Parent and Newco has full corporate
power and authority to execute and deliver the Merger Agreement
and to consummate the transactions contemplated thereby. The
execution and delivery of the Merger Agreement and the consum-
mation of the transactions contemplated thereby have been duly
and validly authorized and approved by the Boards of Directors
of Parent and Newco and, with respect to Newco, by Parent as
sole stockholder of Newco, and no other corporate proceedings
on the part of Parent or Newco are necessary to authorize the
Merger Agreement or the consummation of the transactions con-
templated thereby. The Merger Agreement has been duly and val-
idly executed and delivered by each of Parent and Newco and,
assuming the Merger Agreement constitutes a legal, valid and
binding agreement of the Company, constitutes a legal, valid
and binding agreement of each of Parent and Newco, enforceable
against each of them in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reor-
ganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceabil-
ity, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regard-
less of whether enforcement is sought in a proceeding at law or
in equity).
3. No filing or registration with, or authoriza-
tion, consent or approval of, any governmental entity is
required by Parent or Newco in connection with the execution
and delivery of the Merger Agreement or the consummation of the
Merger and the other transactions contemplated thereby, other
than those which have already been made and those other fil-
ings, registrations, authorizations, consents or approvals the
failure of which to be obtained or made would not, individually
or in the aggregate, have a material adverse effect on the
business, operations, assets, condition (financial or
<PAGE>
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otherwise) or results of operations of Parent and its Subsid-
iaries taken as a whole, materially impair or preclude the
ability of Parent or Newco to perform their respective obliga-
tions under the Merger Agreement or prevent the consummation of
any of the transactions contemplated thereby.
4. The execution and delivery of the Merger Agree-
ment and the consummation of the transactions contemplated
thereby will not (i) violate any provision of the Certificate
of Incorporation or By-Laws of either Parent or Newco, (ii) to
the best of our knowledge, violate any statute, rule, regula-
tion, order or decree of any public body or authority by which
Parent, Newco or any of their properties is bound, or (iii) to
the best of our knowledge, result in a violation or breach of,
or constitute (with or without due notice or lapse of time or
both) a default under, any license, franchise, permit, inden-
ture, agreement or other instrument to which Parent or Newco is
a party or by which Parent, Newco or any of their properties is
bound, excluding from the foregoing clauses (ii) and (iii) vio-
lations, breaches or defaults which, either individually or in
the aggregate, would not materially impair or preclude Newco's
ability to consummate the transactions contemplated by the
Merger Agreement or for which Parent or Newco have received
appropriate consents or waivers.
5. The Parent Common Stock issuable in exchange for
the shares of Company Common Stock has been duly authorized,
and, upon issuance as contemplated by the Merger Agreement,
will be validly issued, fully paid and nonassessable, and will
not be issued in violation of any preemptive rights of any
shareholders of Parent.
6. The Registration Statement and Proxy Statement
(with respect to Parent and Newco) comply as to form in all
material respects with the applicable provisions of the Securi-
ties Act and Exchange Act, as the case may be (except that no
opinion is expressed herein with respect to the financial
statements and the notes thereto, the financial statement
schedules and the other financial, statistical and accounting
data included in the Registration Statement).
In addition, we have participated in conferences, in
person or by telephone, with officers and other representatives
of Parent and Newco, representatives of the independent public
accountants for Parent and Newco and officers and other repre-
sentatives of the Company, at which the contents of the Regis-
tration Statement and Proxy Statement and related matters were
<PAGE>
-3-
discussed, and although we are not passing upon and do not
assume responsibility for the accuracy, completeness or fair-
ness of the statements contained in the Registration Statement
or Proxy Statement, on the basis of the foregoing (relying as
to materiality to a large extent upon the opinions of officers
and other representatives of Parent and Newco), no facts have
come to our attention which would lead us to believe that the
portions of the Registration Statement or Proxy Statement with
respect to Parent or Newco, in the case of the Registration
Statement, on the effective date of the Registration Statement
or at the Effective Time and, in the case of the Proxy State-
ment, at the date the Proxy Statement was first mailed to
shareholders, at the time of the Special Meeting or at the
Effective Time contained an untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary to make the statements therein in light of
the circumstances in which they were made not misleading
(except that we make no statement as to the financial state-
ments, related schedules or statistical information of a finan-
cial nature contained or incorporated therein).
<PAGE>
EXHIBIT G
DATA SWITCH CORPORATION
OFFICER'S CERTIFICATE
In connection with the merger (the "Merger") of Data
Switch Corporation, a Delaware corporation (the "Company"),
with General Signal Acquisition Corporation, a Delaware corpo-
ration ("Newco") that is a direct wholly-owned subsidiary of
General Signal Corporation, a New York corporation ("Parent"),
pursuant to the Agreement and Plan of Merger by and among Par-
ent, Newco and the Company dated as of May 8, 1995 (the "Merger
Agreement"; capitalized terms, unless otherwise defined herein,
shall have the meanings ascribed to them in the Merger Agree-
ment to which this Exhibit G is attached), the undersigned
officer of the Company hereby represents on behalf of the Com-
pany that to the best knowledge and belief of such officer,
after due inquiry and investigation, the facts relating to the
Merger, as such facts are described in the Proxy
Statement/Prospectus of the Company and Parent filed with the
Securities and Exchange Commission (the "Commission") on [ ],
1995, are, insofar as such facts pertain to the Company, true,
correct, and complete in all material respects in accordance
with applicable rules of the Commission.
The undersigned further represents on behalf of the
Company that to the best knowledge and belief of such officer,
after due inquiry and investigation, the following:
1. The fair market value of the shares of Parent
Common Stock and cash in lieu of fractional
shares received by each Company shareholder
will be approximately equal to the fair mar-
ket value of the shares of Company Common
Stock surrendered in the exchange, as deter-
mined in arm's length bargaining between Par-
ent and the Company.
2. The Company Purchase Rights associated with
the shares of Company Common Stock are con-
tingent stock purchase rights that enable the
holder to purchase stock of the Company in
certain instances at very favorable prices.
At the Effective Time, the Company Purchase
Rights remain attached to the shares of
<PAGE>
-2-
Company Common Stock, may not be separately
traded, and remain contingent, nonexercisable
and subject to redemption.
3. There is no plan or intention by the share-
holders of the Company who own five percent
or more of the shares of Company Common Stock
as of the date of the Merger, and to the best
knowledge of the management of the Company,
there is no plan or intention on the part of
the remaining shareholders of the Company to
sell, exchange, or otherwise dispose of a
number of shares of Parent Common Stock
received in the Merger that would reduce the
Company shareholders' ownership of shares of
Parent Common Stock to a number of shares of
Parent Common Stock having a value, as of the
date of the Merger, of less than 50% of the
value of all of the formerly outstanding
shares of Company Common Stock as of the same
date. For purposes of this representation,
(i) shares of Company Common Stock exchanged
for cash or other property, surrendered by
dissenters, or exchanged for cash in lieu of
fractional shares of Parent Common Stock will
be treated as outstanding shares of Company
Common Stock on the date of the Merger and
(ii) shares of Company Common Stock and
shares of Parent Common Stock held by Company
shareholders and otherwise sold, redeemed, or
disposed of prior (after the date hereof) or
subsequent to the Merger will be considered
in making this representation.
4. The payment of cash in lieu of fractional
shares of Parent Common Stock is solely for
the purpose of avoiding the expense and
inconvenience to Parent of issuing fractional
shares and does not represent separately
bargained-for consideration. The total cash
consideration that will be paid in the trans-
action to the Company shareholders instead of
issuing fractional shares of Parent Common
Stock will not exceed one percent of the
total consideration that will be issued in
the transaction to the Company shareholders
in exchange for their shares of Company
<PAGE>
-3-
Common Stock. The fractional share interests
of each Company shareholder will be aggre-
gated, and no Company shareholder will
receive cash in an amount equal to or greater
than the value of one full share of Parent
Common Stock.
5. Following the Merger, the Company will hold
at least 90 percent of the fair market value
of its net assets and at least 70 percent of
the fair market value of its gross assets
held immediately prior to the Merger. For
purposes of this representation, amounts paid
by the Company to dissenters, amounts paid by
the Company to shareholders who receive cash
or other property, amounts used by the Com-
pany to pay reorganization expenses, and all
redemptions and distributions (except for
regular, normal dividends) made by the Com-
pany will be included as assets of the Com-
pany immediately prior to the Merger.
6. The Company and the shareholders of the Com-
pany will pay their respective expenses, if
any, incurred in connection with the Merger.
Further, no liabilities of the Company's
shareholders will be assumed by Parent, nor
will any of the Company Common Stock be sub-
ject to any liabilities.
7. There is no intercorporate indebtedness
existing between Parent and the Company or
between Newco and the Company that was
issued, acquired, or will be settled at a
discount.
8. In the Merger, shares of Company Common Stock
representing control of the Company will be
exchanged solely for voting stock of Parent.
For purposes of this representation: (i) any
shares of Company Common Stock exchanged for
cash or other property originating with Par-
ent or a direct or indirect Subsidiary of
Parent will be treated as outstanding Company
Common Stock on the date of the Merger; and
(ii) control means the direct ownership of
stock in the Company possessing at least 80%
<PAGE>
-4-
of the total combined voting power of all
classes of capital stock entitled to vote and
at least 80% of the total number of shares of
each other class of capital stock of the
Company.
9. At the time of the Merger, the Company will
not have outstanding any warrants, options,
convertible securities, or any other type of
right pursuant to which any person could
acquire stock in the Company that, if exer-
cised or converted would affect Parent's
acquisition or retention of control of the
Company. For purposes of this representa-
tion, control means the direct ownership of
stock in the Company possessing at least 80%
of the total combined voting power of all
classes of capital stock entitled to vote and
at least 80% of the total number of shares of
each other class of capital stock of the
Company.
10. The Company has no plan or intention to issue
additional shares of Company Common Stock
that would result in Parent losing control of
the Company. For purposes of this represen-
tation, control means the direct ownership of
stock in the Company possessing at least 80%
of the total combined voting power of all
classes of capital stock entitled to vote and
at least 80% of the total number of shares of
each other class of capital stock of the
Company.
11. None of the Parent Common Stock received by
any shareholder-employees of the Company will
be separate consideration for, or allocable
to, past or future services. None of the
compensation paid by the Company to any
shareholder-employee of the Company was sepa-
rate consideration for, or intended to be
allocable to, such shareholder-employee's
shares of the Company Common Stock surren-
dered in the Merger, and the compensation
paid to such shareholder-employee will be
commensurate with amounts paid to third
<PAGE>
-5-
parties bargaining at arm's length for simi-
lar services.
12. The Company is not an investment company as
defined in Section 368(a)(2)(F)(iii) and (iv)
of the Internal Revenue Code of 1986, as
amended (the "Code").
13. On the date of the Merger, the fair market
value of the assets of the Company will
exceed the sum of its liabilities, plus the
amount of liabilities, if any, to which the
assets are subject.
14. The Company is not under the jurisdiction of
a court in a "title 11 or similar case"
within the meaning of Section 368(a)(3)(A) of
the Code.
15. The Merger Agreement, its Exhibits and Sched-
ules, and the other documents referenced in
the Merger Agreement, its Exhibits or its
Schedules represent the full and complete
agreement among Parent, Newco and the Company
regarding the Merger, and there are no other
written or oral agreements regarding the
Merger.
IN WITNESS WHEREOF, I have, on behalf of the Company,
signed this Certificate as of [ ] [ ], 1995.
DATA SWITCH CORPORATION
By:
Name:
Title:
Exhibit 2
May 8, 1995
General Signal Corporation
One High Ridge Park
Stamford, CT 06904
Gentlemen:
This letter is being delivered to you in connection
with, and to induce you to enter into, the Agreement and Plan
of Merger by and among General Signal Corporation ("Parent"),
General Signal Acquisition Corporation and Data Switch Corpora-
tion dated as of May 8, 1995 (the "Merger Agreement"), a copy
of which is attached hereto as Annex 1.
You and the undersigned prior to the date hereof had
no agreement, arrangement or understanding to acquire the
Shares (as defined hereinafter) or for the purpose of
acquiring, holding, voting or disposing of the Shares. Prior
to the date hereof, the Board of Directors of Data Switch Cor-
poration, a Delaware corporation ("the Company"), has approved
you and the undersigned entering into this letter agreement and
the transactions contemplated by this letter agreement, as well
as the execution and delivery by the Company of the Merger
Agreement providing for the merger of the Company with a direct
wholly-owned subsidiary of yours (the "Merger") and the conver-
sion of each outstanding share of common stock, par value $.01
per share, of the Company (the "Company Common Stock"), other
than shares of Common Stock owned by the Company or any subsid-
iary of the Company, into the right to receive common stock,
par value $1.00 per share, of Parent ("Parent Common Stock").
The undersigned hereby represents and warrants to,
and covenants and agrees with, Parent as follows:
(a) Your and the undersigned's obligations hereunder
shall be subject to the condition that the Merger and this let-
ter agreement shall have been approved by the Board of Direc-
tors of the Company with the effect that Parent will not be
subject to the restrictions of Section 203 of the Delaware Gen-
eral Corporation Law.
(b) The undersigned is the beneficial and/or record
holder of approximately 2,041,275 shares of Company Common
Stock (the "Shares"), including 131,250 shares held in a trust
<PAGE>
-2-
for the benefit of Barry Greene and Lauren Jennifer Greene and
47,000 shares held by his wife (as to which the undersigned
disclaims beneficial ownership), and has the right to acquire
certain additional shares of Company Common Stock (the
"Rights"). 400,000 of the Shares (the "Pledged Shares") have
been pledged to the Company as collateral security for a loan
in the principal amount of approximately $500,000 (the "Loan").
(c) The undersigned will not assign, sell, transfer
or otherwise dispose of, including by way of pledge, hypotheca-
tion or grant of any security interest, any of the Shares, the
Rights, or any Future Shares (as hereinafter defined), or enter
into any direct or indirect agreement or arrangement to effect
any of the foregoing, on or before December 31, 1995; provided,
that the undersigned may pledge Pledged Shares to a broker or
commercial bank for the purpose of securing a loan to repay the
Loan and another loan by the Company to the undersigned in the
principal amount of approximately $93,000.
(d) In the event that any proposal or offer (other
than a proposal or offer by Parent or its affiliates) for a
tender or exchange offer, merger, consolidation or other busi-
ness combination involving the Company or any Subsidiary of the
Company or any proposal to acquire in any manner a substantial
equity interest in, or a substantial portion of the assets of,
the Company or any of its Subsidiaries or a liquidation or dis-
solution of the Company (an "Acquisition Proposal") is the sub-
ject of approval or ratification by the shareholders of the
Company on or before December 31, 1995, the undersigned agrees
to vote the Shares and any Future Shares for the Merger Agree-
ment and against approval or ratification of, and to refuse to
give any written consent for, any such Acquisition Proposal and
not otherwise to take any action that would or could have the
effect of increasing the likelihood that such Acquisition Pro-
posal would be approved or ratified by the shareholders of the
Company or otherwise entered into by the Company. If prior to
the termination of the Merger Agreement pursuant to Section
10.01(b), (c) or (d) or 10.2 thereof any person shall have made
a bona fide proposal concerning a Business Combination Transac-
tion (as defined in the Merger Agreement) to the Company or its
stockholders and within twelve months after any such termina-
tion the Company or any of its Subsidiaries effects a Business
Combination Transaction which the undersigned has consented to
or voted the Shares or the Future Shares to approve or ratify
or in respect of which the undersigned has taken any action
that would or could have the effect of increasing the likeli-
hood that such Business Combination Transaction is effected,
<PAGE>
-3-
then the undersigned shall pay to Parent cash, by wire transfer
of immediately available funds, in an amount equal to the
excess of the amount realized by the undersigned in connection
with such Business Combination Transaction and $4.55 per Share.
(e) The undersigned hereby delivers to you his duly
executed and irrevocable proxy attached hereto with respect to
the Shares and any shares of Company Common Stock acquired
after the date hereof, including without limitation upon exer-
cise of any Rights (the "Future Shares").
(f) The undersigned agrees that, prior to the ear-
lier of the Effective Time (as defined in the Merger Agreement)
and December 31, 1995, the undersigned shall not, directly or
indirectly, solicit, initiate or encourage (including by way of
furnishing information) inquiries or proposals concerning any
Acquisition Proposal or negotiate, explore or otherwise commu-
nicate with any third party (other than Parent or its affili-
ates) regarding any Acquisition Proposal.
(g) The undersigned hereby agrees, from and after
the date hereof, to use all reasonable efforts to assist in the
Merger (as defined in the Merger Agreement) becoming effective
and being treated as contemplated by the Merger Agreement; pro-
vided, however, that this provision shall not obligate the
undersigned to incur any costs, expenses or liability or take
any actions to its economic detriment. The undersigned further
agrees to execute and deliver or cause to be delivered to Par-
ent such additional powers and instruments as Parent may rea-
sonably require or deem advisable to carry into effect the pur-
poses of this letter agreement or the Merger Agreement.
<PAGE>
-4-
This letter agreement shall be governed by the laws
of the State of New York applicable to contracts made and per-
formed wholly in such state.
Very truly yours,
/s/ Richard E. Greene
Agreed to:
General Signal Corporation
By: /s/ Philip A. Goodrich
Name: Philip A. Goodrich
Title: Vice President
Approved:
Data Switch Corporation
By: /s/ W. James Whittle
Name: W. James Whittle
Title: Sr. Vice President and CEO
Exhibit 3
Irrevocable Proxy
The undersigned hereby revokes any previous proxies
and appoints Philip A. Goodrich, Edgar J. Smith, Jr. and Robert Coackley,
and each of them, as attorney and proxy of the undersigned to
attend any and all meetings of the shareholders of Data Switch
Corporation, a Delaware corporation ("the Company"), to vote
all shares of common stock, $.01 par value, of the Company
owned by the undersigned on the date hereof or hereafter
acquired (including, without limitation, any such shares
acquired upon exercise of any Rights (as defined in the
attached letter agreement)) and to represent and otherwise to
act for the undersigned in the same manner and with the same
effect as if done by the undersigned where any Acquisition Pro-
posal (as defined in the attached letter agreement), including
without limitation the Merger (as defined in the Agreement and
Plan of Merger by and among General Signal Corporation, General
Signal Acquisition Corporation and the Company dated as of
May 8, 1995), is submitted to shareholders of the Company for
approval.
This proxy shall be deemed to be a proxy coupled with
an interest and is irrevocable and shall remain in effect until
December 31, 1995.
The undersigned authorizes such attorney and proxy to
substitute any other person to act hereunder, to revoke any
substitution and to file this proxy and any substitution or
revocation with the Secretary of the Company.
/s/ Richard E. Greene
Name: Richard E. Greene
Dated: May 8, 1995
