SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Period Ended March 31, 1995
Commission File Number 0-10745
DATA SWITCH CORPORATION
______________________________________________________
(Exact name of Registrant as specified in its Charter)
DELAWARE 06-0962862
_______________________________ ____________________________
(State or other jurisdiction of (IRS Employer Identification
incorporation) Number)
One Enterprise Drive, Shelton, Connecticut 06484
__________________________________________ __________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (203) 926-1801
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to filing requirements for
the past 90 days, [X] YES [ ] NO.
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock at March 31, 1995.
Securities registered pursuant to Section 12(b) of the Act.
Title of Each Class Number of Shares Outstanding
Common Stock, $.01 par value, 12,485,929
with Purchase Rights attached
Common Stock Purchase Warrants 10,112
(expiring December 31, 1995)
This 10-Q/A is being filed solely to included the electronic filing
of Exhibit 2 - 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 previously filed May 12,
1995 on Form SE pursuant to Rule 202 of Regulation S-T for a
continuing hardship exemption.
DATA SWITCH CORPORATION
SIGNATURES
Pursuant to the requirements of Section 13 or 15(b) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto
duly authorized.
DATA SWITCH CORPORATION
_______________________
(Registrant)
Date: May 16, 1995 /s/ William J. Lifka
_______________________
William J. Lifka
Chairman, President and
Chief Executive Officer
Date: May 16, 1995 /s/ W. James Whittle
_________________________
W. James Whittle
Senior Vice President and
Chief Financial Officer
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
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
Statement ............................. 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
Statement .............................. 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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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
Section 8.04. Certain Proceedings ....................... 52
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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
Abandonment ............................ 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
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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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
Corporation, 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
contemplated by this Agreement result in a strategic alliance
of the products, markets, people, business and assets of the
Company with products, markets, people, business, assets and
capital strengths of Parent and believe that the combined
opportunities 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
Parent 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:
<PAGE>
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
existence under the laws of the State of Delaware. At the
election of Parent, any direct wholly owned subsidiary of
Parent incorporated under the laws of the State of Delaware may
be substituted 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
provided 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
accordance 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
immediately 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
Surviving Corporation, in each case until their successors are
elected and qualified.
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 commercially
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
consider 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 officers and directors of the Surviving
Corporation shall be authorized 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 Corporations 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, properties 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
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
Subsidiary 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, 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 Company Common
Stock shall also have the right to receive together with each
share of Parent 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
Company Common Stock pursuant to this Section 2.01(a) are
hereinafter 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 Common Stock or Company Common Stock by reason of any
stock split, readjustment, stock dividend, exchange of shares,
reclassification, 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
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
common stock, par value $.01 per share, of Newco issued and
outstanding immediately prior to the Effective Time shall, by
virtue 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
Certificates 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 Certificate 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 surrendered 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 accordance with the provisions of this
Section 2.03, each Certificate shall represent, for all
purposes, the right to receive the Closing Consideration in
respect of the number of shares of 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
abandoned 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
purchase 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
immediately prior to the Effective Time would be converted
under Section 2.01 if such option were exercised prior to the
Effective 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
immediately 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 adjustment 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
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
fractional share, cash in an amount equal to such fraction
multiplied by the Average Market Value. The fractional share
interests 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
consideration 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 references 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
contemplated 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
represents 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
organized, validly existing and in good standing under the laws
of the state of Delaware. Newco has not engaged in any
business 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
issuance 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 Parent 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 warrants with an exercise price of $96.54 per share
and an expiration 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, subscriptions, or other rights or other agreements or
commitments obligating Parent to issue, transfer or sell any
shares of its capital stock or any other securities convertible
into or evidencing 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
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
stockholder 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
consummation by Parent and Newco of the Merger and the other
transactions contemplated hereby will not (i) violate any
provision 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 Parent, 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 contemplated hereby or have a material
adverse effect on the business, 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 Parent or Newco prior to the Merger
shall have received appropriate consents or waivers.
(b) No filing or registration with, or
authorization, consent or approval of, or notification to, any
governmental entity is required by Parent or Newco in
connection 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 Securities 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, authorizations,
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 Material
Adverse Effect.
Section 3.05 Registration Statement; Proxy
Statement. 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
stockholders 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 misleading. If at any time prior to the Effective
Time any event with respect to Parent or Newco 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
Securities and Exchange Commission (the "SEC") and, as required
by law, disseminated 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
(collectively, 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 documents 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
financial 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
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
consolidated 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
position 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
consolidated 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
involving 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.
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
warranty 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
contemplated hereby who might be entitled to a fee or any
commission 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
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
Company to Parent concurrently with the execution and delivery
of this Agreement (the "Disclosure Statement")) where the
character of its properties owned or leased or the nature of
its activities makes such qualification necessary, except for
failures 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
(financial or otherwise) or prospects of the Company and its
Subsidiaries 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 individually 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
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
execution and delivery of this Agreement nor the consummation
of the Merger or the other transactions contemplated hereby nor
compliance by the Company with any of the provisions hereof
will (i) subject to obtaining 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, 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
Subsidiaries, (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,
cancellation, 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
Company 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 preclude the Company's ability to
consummate the Merger or the other transactions contemplated
hereby or have a Company Material 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
Agreement, 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
Agreement, 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
Parent from accounting for the business combination to be
effected by the Merger as a "pooling of interests."
Section 4.06 State Antitakeover Statutes. The
Company has granted all approvals and taken all other steps
necessary to exempt the Merger and the other transactions
contemplated 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 provisions of such { 203 or any other "business
combination," "moratorium," "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
"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
Person" and that no "Triggering Event,", "Distribution Date" or
"Unapproved Transaction" (as such terms are defined in the
Company 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 Parent of the Stockholder Letter Agreements.
Section 4.09 Affiliates. Section 4.09 of the
Disclosure 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
Statement. 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
Registration 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
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. If at any time prior to the Effective
Time any event with respect to the Company or any of its
Subsidiaries 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 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.
Section 4.12 Finders or Brokers. Except for Needham
& Company, neither the Company nor any Subsidiary of the
Company 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
complied 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
Company SEC Reports (including all exhibits and schedules
thereto and documents 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) 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
financial 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
Subsidiaries 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 they may not include footnotes or may be
condensed or summary statements).
Section 4.14 Financial Statements. The audited
consolidated financial statements and unaudited consolidated
interim financial statements of the Company and its
Subsidiaries 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 consolidated 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 (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 financial
statements have been certified 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
judgments 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
consistent 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
Subsidiaries, 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);
(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
responsible for the obligations of any other individual,
firm or corporation, made any loans or advances to any
other individual, firm or corporation or entered into any
commitment or transaction material to the Company and its
Subsidiaries 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
Company 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,
individually 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.
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
Common 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 Company 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 Company 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 Subordinated Debentures due 1996 and 8 1/4%
Convertible Subordinated Debentures due 2002, all of which
options, plans, warrants and convertible debt securities are
listed and described in Section 4.17 of the Disclosure
Statement (the "Company Common 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 Equivalents there are not any existing
options, warrants, calls, subscriptions, or other rights or
other agreements or commitments obligating the Company to
issue, transfer or sell any shares of capital stock of the
Company or any of its Subsidiaries or any other securities
convertible into or evidencing the right to subscribe for any
such shares. There are no outstanding stock appreciation
rights with respect to the capital stock of the Company or any
of its Subsidiaries. All issued and outstanding shares of
Company Common Stock are duly authorized and validly issued,
fully paid, non-assessable and free of preemptive 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
("Subsidiaries"). The Company is directly or indirectly the
record (except for directors' qualifying shares as reflected in
Section 4.18 of the Disclosure Statement) and beneficial owner
(including all such qualifying shares) of all of the
outstanding 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 capital stock of such Subsidiary
or any other securities convertible into or evidencing the
right to subscribe for any such shares. Other than as set
forth in Section 4.18 of the Disclosure 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 disclosed in Section 4.18 of the
Disclosure Statement, the Company does not directly or
indirectly own any interest in any corporation, partnership,
joint venture or other business association 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,
governmental 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
transactions contemplated hereby or have a Company Material
Adverse Effect.
Section 4.20 Insurance. Section 4.20 of the
Disclosure Statement lists all material insurance policies in
force on the date hereof covering the businesses, properties
and 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
Statement, the Company and its Subsidiaries have good title to
all of the real property and own outright all of the personal
property 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
property is held under lease by the Company or any of its
Subsidiaries 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 Disclosure 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
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,
supplies or equipment which have not been entered into in
the ordinary course of business and consistent with past
practice or which provide for purchase prices
substantially greater than those presently prevailing for
such materials, supplies or equipment, or contracts for
capital expenditures in excess of $100,000;
(c) contracts with distributors, manufacturers'
representatives or sales agents, except those which are
terminable 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
collection 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 person, 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;
(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
Company 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
practice); or
(k) any hedging, option, derivative or other similar
transaction.
True and complete copies of all contracts, obligations and
commitments 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
Parent. 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 Subsidiaries. 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.
Section 4.25 Compliance with Law. Neither the
Company 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
Company Material Adverse Effect. The Company 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 Company Material Adverse Effect.
Section 4.26 Employment and Labor Contracts.
Neither 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 Disclosure 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
Company 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
applications for the foregoing owned by the Company or its
Subsidiaries. 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
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
Company has no knowledge of any infringement of Intellectual
Property Rights of the Company by others. All such patents,
registered 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
aggregate, have a Company Material Adverse Effect. True and
complete copies of all material listed in Section 4.27 of the
Disclosure 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
Subsidiaries have prepared and timely filed or will timely file
with the appropriate governmental agencies all material
franchise, income and all other material Tax (as hereinafter
defined) returns and reports (Tax returns and reports are
hereinafter 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
(copies of which for the past three fiscal years have been
delivered 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
authorities 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
appropriate proceedings and are adequately reserved for in
accordance 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 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 pending 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 corresponding 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 material 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 Subsidiaries for any
period ending after the Effective Time; (viii) the Company and
its Subsidiaries have made timely payments of the Taxes
required to be deducted and withheld from the wages paid to
their employees; (ix) there are no Tax sharing 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 Subsidiaries
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 pursuant 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
Subsidiary 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 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
investment 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 Subsidiaries 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
subcontractors (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
Statement, 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 contributed 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
thereunder 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
Company 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)
covering employees (or former employees) employed in the United
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
appreciation right, stock purchase, bonus, incentive, deferred
compensation, 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
Subsidiaries, 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
Company 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
administrative 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
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
Company'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
Pension Benefit Plans or Welfare Plans, has engaged in a
"prohibited 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
thereunder) with respect to either thereof, except any such
event which would not, individually or in the aggregate, have a
Company 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
Pension 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
outstanding 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 standards imposed by Section 412 of the Code.
The information supplied to the actuary by the Company or any
of its Subsidiaries for use in preparing the most recent
actuarial report for 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
Disclosure 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
determination 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
transaction, 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
Disclosure 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 participant 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 aggregate, have a Company Material
Adverse Effect.
(n) No liability under any Pension Benefit or
Welfare Plan has been funded nor has any such obligation been
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
Section 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
accelerate the vesting or timing of payment of any benefits or
compensation payable to or in respect of any employee of the
Company 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
thereunder 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 compliance 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 contributed to by, or entered into with, the
Company or any Subsidiary with respect to employees (or former
employees) employed outside the United States.
Section 4.30 Environmental Matters. (a) The
Company 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
authorizations (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
Authority (as hereinafter defined), citizen group, employee or
otherwise, 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 compliance with Environmental Laws. All Environmental
Authorizations currently held by the Company and its
Subsidiaries 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
Subsidiaries, (ii) is pending or, to the best knowledge of the
Company, 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
Disclosure 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 properties 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, discharge, 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 Parent 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
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,
operated, 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 Materials generated, used, owned,
managed, stored or controlled by the Company or any of its
Subsidiaries (or any of their respective 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
available 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 limitation, 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 formerly 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.
(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
Properties) 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
Disclosure Statement, neither the Company nor any of its
Subsidiaries 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
subsurface 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
administrative 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 Environment, 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
alleging liability (including, without limitation, potential
liability 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
government or political subdivision or any agency, authority,
bureau, 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
materials, 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
Disclosure 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 fiscal 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 fiscal 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
warranty by the Company and no statement or information
relating to the Company or any of its Subsidiaries contained
herein, or 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 statements 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
Company 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,
distributors, 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 generality of the foregoing, and except as
otherwise expressly provided 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
employees) 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;
(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,
existing 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, guarantee, endorse or otherwise become liable
or responsible (whether directly, contingently or
otherwise) for the obligations of any person (other than
wholly owned Subsidiaries of the Company) in the ordinary
course of business and consistent with past practices,
except for endorsements of negotiable instruments for
deposit in the ordinary 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
pension, retirement allowance or other employee benefit
not required, or enter into or agree to enter into any
agreement or arrangement with any of its past or present
employees relating to any such pension, retirement
allowance 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
clause (i), enter into any contract, agreement or
understanding 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,
severance 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
properties, 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
practice 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
securities or any material change in its capitalization,
or any entry into a material contract or any amendment or
modification of any material contract or any release or
relinquishment of any material contract rights not in the
ordinary 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
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,
liabilities or obligations (absolute, accrued, contingent
or otherwise), other than the payment, discharge or
satisfaction of liabilities (including accounts payable)
in the ordinary course of business and consistent with
past practice, 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
Subsidiaries shall not, and shall not give authorization or
permission to any of its or its Subsidiaries' directors,
officers, employees, agents or representatives to, and shall
use all commercially reasonable efforts to see that such
persons do not, directly or indirectly, solicit, initiate,
facilitate or encourage (including by way of furnishing or
disclosing information) 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 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
constitute 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 taking such action is more likely than not to
lead to an Acquisition 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
facilities, 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 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 Subsidiaries 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
consultants to have full access to Parent's books and records
and personnel (including senior executives) for the purpose of
conducting customary due diligence regarding the accuracy and
completeness of the Parent SEC Reports and the Registration
Statement and other information with respect to the business of
Parent 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
Subsidiaries 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 subsidiaries furnished to the Company in
connection with the transactions contemplated by this
Agreement. Notwithstanding any provision 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
Statement. The Company shall file with the SEC as soon as is
reasonably 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 Registration Statement declared effective by the SEC and
the Proxy Statement cleared by the staff of the SEC as promptly
as practicable. 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
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
connection 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
provided, 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
necessary, proper or appropriate under applicable laws and
regulations to consummate and make effective the transactions
contemplated 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
Antitrust 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
information 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 necessary consents, approvals or waivers, and (iv) the
lifting of any legal bar to the Merger. Parent shall cause
Newco to perform 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
Subsidiaries with respect to which a consent is required to be
obtained to effectuate the Merger or other transactions
contemplated 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
contemplated hereby, Parent, Newco and the Company will consult
with, and obtain the consent of, each other as to its form and
substance 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
prospects 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
communication 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 prospects or the occurrence of any event which,
so far as reasonably can be foreseen at the time of its
occurrence, is reasonably likely to result in any such change
or (c) the occurrence or existence of any event which would, or
could with the passage 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
liabilities 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 Company's Restated Certificate of Incorporation and
By-Laws in effect at the date hereof (to the extent consistent
with applicable 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'
liability 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
conditions which are no less advantageous) with respect to
claims arising from facts or events which occurred before the
Effective 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 Corporation 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
Section 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
application 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
warranty of the Company contained in this Agreement such that
the 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
provisions and requirements of all Environmental Laws
(including, without limitation, the Connecticut Transfer Act)
applicable to the Merger and other transactions contemplated
hereby, including 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
reasonable 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
resignation, the directors shall simultaneously reconvey their
directors' 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 customary 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
inapplicable to the Merger or any action permitted under this
Agreement) 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 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
Registration 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
fulfillment 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
provisos therein) shall be true and correct in all 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 Company's ability to consummate the
Merger and the other transactions contemplated hereby or have a
Company Material 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
agreements, 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
furnish 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
governmental authority or any other third party required for
the consummation of the Merger and the other transactions
contemplated 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 consummation 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,
operations, assets, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole.
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
Parent, 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
environmental requirements as are set forth in such Form III.
If the Company delivers to Parent a Form I or Form II Negative
Declaration, Company shall also have delivered to Parent such
affidavits 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
Market 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
approximately $593,000, and the Company shall have, directly
and 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
Company continuing to have such an interest would not prevent
Parent 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
Company:
Section 8.01 Representations and Warranties True.
The representations and warranties of Parent and Newco
contained 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
permitted 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
Agreement 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
evidence compliance with the conditions set forth in Sections
8.01 and 8.02 as may be reasonably requested by the Company.
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
provisions 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
Certificate 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
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
governmental 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
adjournment 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
stockholders 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 information to a third party with respect
to any Acquisition 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
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 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
abandonment 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
Agreement 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
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
payable 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
Combination Transaction and within twelve months after the
execution 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 Business 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 Company 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 ownership 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
available 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,
accountants, consultants and advisors) in connection with this
Agreement and the transactions contemplated hereby.
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
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
Company, 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
the other hand, to comply with any obligation, covenant,
agreement 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.
Representations 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
parties 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
locations, 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
communications hereunder shall be in writing and shall be
delivered personally, by next-day courier or mailed by
registered or certified 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; provided, 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.
(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
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,
construction, 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
specific jurisdiction where such judgment shall be made.
Section 12.09 Interpretation. The article and
section headings contained in this Agreement are solely for the
purpose of reference, are not part of the agreement of the
parties and shall not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement,
(i) the term "person" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, an unin-
corporated 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
indirectly owned by such specified corporation or any other
person 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
Disclosure Statement), embodies the entire agreement and
understanding of the parties hereto in respect of the subject
matter contained herein and supersedes all prior agreements and
understandings between the parties with respect to such subject
matter. There are no representations, promises, warranties,
covenants, or undertakings, other than those expressly set
forth or referred to herein and therein.
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. Lockhardt__
Name: Michael D. Lockhardt
Title: President
DATA SWITCH CORPORATION
By: /s/ William J. Lifka___
Name: William J. Lifka
Title: President
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
corporation (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
Agreement and Plan of Merger ("Merger Agreement") by and among
General Signal Corporation, a New York corporation ("Parent"),
General Signal Acquisition Corporation, a Delaware corporation
and a wholly owned Subsidiary of Parent ("Newco") and the
Company, 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
following new Section to the end of such Agreement:
"Section 21. Newco Merger. "Notwithstanding
any provision herein to the contrary, neither
General Signal Corporation, a New York corporation
("Parent"), nor General Signal Acquisition
Corporation, a Delaware corporation and a wholly
owned Subsidiary of Parent ("Newco"), shall be an
Acquiring Person under this Agreement and no
Triggering 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
among Parent, Newco and the Company, dated as of
May 8, 1995 (the "Merger Agreement") or the
consummation of the Merger (as defined in the
Merger Agreement) or other transactions
contemplated thereby including, without limitation,
the execution and delivery to Parent of the
Stockholder Letter 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
Agreement 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:
EXHIBIT B
Form of Company Affiliate Letter
General Signal Corporation
One High Ridge Park
Stamford, CT 06904
Gentlemen:
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
Subsidiary 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
undersigned 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
undersigned upon conversion of shares of Company Common Stock
pursuant to the Merger except (i) pursuant to an effective
registration statement under the Act, (ii) in conformity with
the limitations specified by Rules 144 and Rule 145(d) or
(iii) in a transaction which, in the opinion of counsel
reasonably satisfactory to Parent or as described in a
"no-action" or interpretive letter from the Staff of the
Securities and Exchange Commission (the "SEC"), is not required
to be registered under the Act.
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
Common Stock disposed of by the undersigned, but that upon
receipt of such evidence of compliance the transfer agent shall
effectuate the transfer of the Parent Common Stock sold as
indicated in the letter.
The undersigned acknowledges and agrees that
appropriate legends will be placed on certificates representing
Parent 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
connection 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
prescribed limitations set forth in paragraph (e) of Rule 144
promulgated 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
Common 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
Corporation 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
Corporation, 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 conversion 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 subsidiary 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
letter agreement shall have been approved by the Board of
Directors of the Company with the effect that Parent will not
be subject to the restrictions of Section 203 of the Delaware
General 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
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,
hypothecation 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
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 (an "Acquisition
Proposal") is the subject 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 Agreement 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 Proposal 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 Transaction (as defined in
the Merger Agreement) to the Company or its stockholders and
within twelve months after any such termination 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 likelihood that such
Business Combination Transaction is effected, 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
exercise of any Rights (the "Future Shares").
(f) The undersigned agrees that, prior to the
earlier 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 communicate with any third party (other
than Parent or its affiliates) 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;
provided, 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
Parent such additional powers and instruments as Parent may
reasonably require or deem advisable to carry into effect the
purposes of this letter agreement or the Merger Agreement.
This letter agreement shall be governed by the laws
of the State of New York applicable to contracts made and
performed wholly in such state.
Very truly yours,
Agreed to:
General Signal Corporation
By:________________________
Name:
Title:
Approved:
Data Switch Corporation
By:________________________
Name:
Title:
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
Proposal (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
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
Corporation, a New York corporation (the "Parent"), and General
Signal 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
Subsidiaries incorporated under the laws of a state of the
United States (the "Domestic Subsidiaries") which would
constitute a "significant 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 qualified 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 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
outstanding shares of capital stock of each of its Domestic
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 claim, lien or encumbrance perfected by possession of the
certificates evidencing such shares and, to our knowledge, any
other claim, lien or encumbrance.
(c) The authorized capital stock of the Company
consists of 20,000,000 shares of common stock, par value $.01
per share ("Common Stock") and 100,000 shares of Convertible
Preferred 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 treasury. 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 holders 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 evidencing 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
consummation by the Company of the Merger and other
transactions contemplated 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 (assuming approval by the Company's stockholders as
required by the Delaware Act and the Company's Restated
Certificate of Incorporation) 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 delivered by the Company and constitutes
the legal, valid and binding agreement of the Company,
enforceable against it in accordance with its terms subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, 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
Agreement, 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 Subsidiaries is a party or by which any
of them is bound, (iii) any law or regulation (other than
federal and state securities 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
authorization 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 consummation by the Company of the Merger or other
transactions contemplated 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.
(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
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,
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
financial 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
conferences 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 Statement 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 Registration 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 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 financial,
statistical and accounting data included or incorporated in the
Registration Statement or the Prospectus).
The opinions set forth herein are subject to the
following assumptions, qualifications and limitations:
(a) We have assumed, with your permission and
without 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,
governmental, 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 authenticity of documents submitted to us as
originals, and the conformity to authentic original documents
of all documents submitted 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
without 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 obligations 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
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
exclusively 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
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 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
knowledge," "known to us," or "of which we have actual
knowledge," we have relied solely upon the conscious awareness
of information by lawyers of this Firm who have been involved
in negotiating the Merger and preparing the Merger Agreement,
the Proxy Statement/Prospectus and the Registration Statement,
upon certificates 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 Statement, 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
EXHIBIT D-2
[Form of Opinion of SHAWN A. SMITH]
(a) Each of the Company and the Company's
Subsidiaries (the "Subsidiaries") which would constitute a
"significant 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 Subsidiaries is duly qualified to
transact business and is in good standing as a foreign
corporation 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 outstanding
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
consists of 20,000,000 shares of common stock, par value $.01
per share ("Common Stock") and 100,000 shares of Convertible
Preferred 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 treasury. 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 holders 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, 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 evidencing 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
consummation by the Company of the Merger and other
transactions contemplated 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 (assuming approval by the Company's stockholders as
required by the Delaware Act and the Company's Restated
Certificate of Incorporation) 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 delivered by the Company and constitutes
the legal, valid and binding agreement of the Company,
enforceable against it in accordance with its terms.
(e) The execution and delivery of the Merger
Agreement, 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 Subsidiaries is a party or by which any of them
is bound, (iii) any law or regulation (other than federal and
state securities 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) con-
flicts, 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
authorization 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 consummation by the Company of the Merger or other
transactions contemplated 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, waivers, licenses or authorizations which
if not obtained, made or given will not, individually or in the
aggregate, have a Company 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 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,
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
financial 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
conferences 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 Statement 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 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 Registration 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 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 I express no view with
respect to the financial statements and related notes, the
financial statement schedules and the other financial,
statistical and accounting data included or incorporated in the
Registration Statement or the Prospectus).
EXHIBIT D-3
[Form of Opinion of D. DAVID COHEN]
(a) Each of the Company and the Company's
Subsidiaries (the "Subsidiaries") which would constitute a
"significant 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 Subsidiaries is duly qualified to
transact business and is in good standing as a foreign
corporation 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
outstanding 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
consists of 20,000,000 shares of common stock, par value $.01
per share ("Common Stock") and 100,000 shares of Convertible
Preferred 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 treasury. 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 holders 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, 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 evidencing 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
consummation by the Company of the Merger and other
transactions contemplated 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 (assuming approval by the Company's stockholders as
required by the Delaware Act and the Company's Restated
Certificate of Incorporation) 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 delivered by the Company and constitutes
the legal, valid and binding agreement of the Company,
enforceable against it in accordance with its terms.
(e) The execution and delivery of the Merger
Agreement, 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 Subsidiaries is a party or by which any of them
is bound, (iii) any law or regulation (other than federal and
state securities 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) con-
flicts, 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
authorization 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 consummation by the Company of the Merger or other
transactions contemplated 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, waivers, licenses or authorizations which
if not obtained, made or given will not, individually or in the
aggregate, have a Company 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
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, 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
financial 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
conferences 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 Statement 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 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 Registration 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 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 I express no view with
respect to the financial statements and related notes, the
financial statement schedules and the other financial,
statistical and accounting data included or incorporated in the
Registration Statement or the Prospectus).
EXHIBIT E
[Form of Tax Opinion of Cahill Gordon & Reindel]
We have acted as counsel to General Signal
Corporation, 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
"Company"), 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
statements and representations contained in (i) the Officer's
Certificate 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
reorganization 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
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
surrendered 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
Company 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
payment for the fractional share.
This opinion letter is intended only for the use of
Parent and the Company in connection with the transactions
contemplated 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,
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
Agreement to which this Exhibit F is attached (the "Merger
Agreement").
1. Parent is a corporation duly organized and
validly 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
consummation 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 contemplated thereby. The Merger Agreement has
been duly and validly 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, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally 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).
3. No filing or registration with, or
authorization, 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
filings, 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 otherwise) or results of operations of Parent and
its Subsidiaries taken as a whole, materially impair or
preclude the ability of Parent or Newco to perform their
respective obligations under the Merger Agreement or prevent
the consummation of any of the transactions contemplated
thereby.
4. The execution and delivery of the Merger
Agreement 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,
regulation, 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, 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 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
Securities 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
representatives of the Company, at which the contents of the
Registration Statement and Proxy Statement and related matters
were discussed, and although we are not passing upon and do not
assume responsibility for the accuracy, completeness or
fairness 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 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 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 statements, related schedules or statistical
information of a financial nature contained or incorporated
therein).
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
corporation ("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 Parent, 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 Agreement to which this Exhibit G is attached), the
undersigned officer of the Company hereby represents on behalf
of the Company 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
market value of the shares of Company Common
Stock surrendered in the exchange, as
determined in arm's length bargaining between
Parent and the Company.
2. The Company Purchase Rights associated with
the shares of Company Common Stock are
contingent 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 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
shareholders 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
transaction 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 Common Stock. The fractional share
interests of each Company shareholder will be
aggregated, 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
Company to pay reorganization expenses, and
all redemptions and distributions (except for
regular, normal dividends) made by the
Company will be included as assets of the
Company immediately prior to the Merger.
6. The Company and the shareholders of the
Company 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 subject 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
Parent 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%
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
exercised or converted would affect Parent's
acquisition or retention of control of the
Company. For purposes of this
representation, 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
representation, 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
separate consideration for, or intended to be
allocable to, such shareholder-employee's
shares of the Company Common Stock
surrendered in the Merger, and the
compensation paid to such shareholder-
employee will be commensurate with amounts
paid to third parties bargaining at arm's
length for similar 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
Schedules, 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:
