<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
ITI TECHNOLOGIES, INC.
(Name of Issuer)
COMMON STOCK, $0.01 PAR VALUE
(Title of Class of Securities)
450564109
(CUSIP Number)
SLC TECHNOLOGIES, INC.
12345 SW Leveton Drive
Tualatin, Oregon 97062
Attention: John R. Logan,
Vice President - Finance, CEO
(503) 691-7243
and
BERWIND GROUP PARTNERS
1 Belmont Avenue
Suite 401
Bala Cynwyd, PA 19004
Attention: President
(610) 771-0660
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
With a Copies to:
DECHERT PRICE & RHOADS
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attention: Herbert F. Goodrich
(215) 994-4000
<PAGE>
and
BERWIND CORPORATION
3000 Centre Square West
1500 Market Street
Philadelphia, PA 19102
Attention: Pamela I. Lehrer,
Vice President and General Counsel
(215) 575-2319
September 28, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
/ /.
Note: Six copies of this Statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
- --------------------------------------------------------------------------------
CUSIP NO. 450564109 Page 1 of 8 Pages
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
SLC TECHNOLOGIES, INC.
I.R.S. ID NO. 52-1833516
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
BK
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY ------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 1,607,737
- --------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON**
1,607,737
- --------------------------------------------------------------------------------
** The shares of Company Common Stock as to which the Reporting Persons are
hereby reporting beneficial interest are subject to Voting Support
Agreements with certain stockholders of the Company as described in Item 6
of this report.
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.1%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
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<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
CUSIP NO. 450564109 Page 2 of 8 Pages
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
BERWIND GROUP PARTNERS
I.R.S. ID NO. 23-2586128
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
BK
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Pennsylvania
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY ------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 1,607,737
- --------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,607,737
- --------------------------------------------------------------------------------
** The shares of Company Common Stock as to which the Reporting Persons are
hereby reporting beneficial interest are subject to Voting Support
Agreements with certain stockholders of the Company as described in Item 6
of this report.
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.1%
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14 TYPE OF REPORTING PERSON*
PN
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<PAGE>
SCHEDULE 13D
ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D (this "Statement") relates to the
common stock, $0.01 par value per share (the "Company Common Stock") of ITI
Technologies, Inc., a Delaware corporation (the "Company"). The principal
executive offices of the Company are located at 2266 North Second Street, North
St. Paul, Minnesota, 55109.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed jointly pursuant to Rule 13d-1(k)(1)
promulgated under the Securities Act of 1934, as amended (the "Exchange Act"),
by SLC Technologies, Inc., a Delaware corporation ("SLC") and Berwind Group
Partners, a Pennsylvania general partnership ("Berwind"). Hereinafter each of
SLC and Berwind is referred to individually as a "Reporting Person" and
collectively as the "Reporting Persons." The agreement among the Reporting
Persons relating to the joint filing of this Statement is attached as Exhibit 1
hereto.
SLC is principally engaged in the business of providing global
integrated communications technology for security and life safety systems. The
address of the principal business and executive offices of SLC is 12345 SW
Leveton Drive, Tualatin, Oregon 97062. Berwind is the sole stockholder of SLC.
Berwind is a private partnership principally engaged, through its subsidiaries,
in the ownership and operation of industrial, natural resources, financial and
real estate businesses. The address of the principal business and executive
offices of Berwind is 1 Belmont Avenue, Suite 401, Bala Cynwyd, PA 19004.
Berwind is a general partnership owned by five trusts, each of which was
organized in Pennsylvania (collectively, the "Berwind Trusts"). The name and
address of the business and principal office of each of the Berwind Trusts is
set forth in Schedule A hereto. The principal business of each Berwind Trust is
to hold investments for the benefit of its beneficiaries.
The name, business address, present principal occupation or
employment, and the name, principal business and address of any corporation or
other organization in which such employment is conducted, and citizenship of
each director and executive officer of SLC are set forth in Schedule A hereto.
The name, business address, present principal occupation or employment, and the
name, principal business and address of any corporation or other organization in
which such employment is conducted, and citizenship of each authorized
representative of Berwind and of each trustee of the Berwind Trusts are set
forth in Schedule A hereto.
During the last five years, neither SLC nor Berwind, nor, to the best
knowledge of SLC and Berwind, any of the persons referred to in this Item 2, (i)
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which any such
person was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The source of funds that will be used in connection with the Merger
described in Item 4 is expected to be borrowings from a syndicate of banks. SLC
has received a financing commitment for $325,000,000 in connection with the
Merger from The Bank of Nova Scotia, PNC Bank, National Association and PNC
Capital Markets, Inc., which commitment is subject to customary conditions. A
copy of this commitment letter is included as Exhibit 10 to this Statement and
is incorporated by
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<PAGE>
reference herein.
ITEM 4. PURPOSE OF TRANSACTION.
SLC and the Company have entered into the Agreement and Plan of Merger
and Reorganization dated as of September 28, 1999 (the "Merger Agreement"),
pursuant to which, among other matters and subject to the terms and conditions
set forth in the Merger Agreement, SLC will merge with and into the Company,
with the Company as the surviving corporation (the "Merger"). In the Merger,
SLC's outstanding common stock will be converted into 15,170,640 shares of
Company Common Stock. The Company's stockholders may elect to receive $36.50 in
cash at the effective time of the Merger for each share of Company Common Stock
owned, subject to the limitation that no more than 50 percent of the total
number of shares of Company Common Stock outstanding immediately prior to the
effective time of the Merger will be exchanged for cash. If the Company's
stockholders elect to exchange more than 50 percent of the outstanding shares of
Company Common Stock for cash, then the shares to be exchanged will be reduced
on a pro rata basis so that 50 percent of the outstanding shares of Company
Common Stock immediately prior to the effective time of the Merger are exchanged
for cash. As a result of the transaction, Berwind will have a 63.5 percent
ownership interest in the Company (on an equivalent shares basis calculated
under the treasury stock method), without giving effect to the cash election, or
a 78 percent ownership stake after giving effect to the cash election and
assuming that 50 percent of the outstanding shares of Company Common Stock are
exchanged for cash.
The Merger will be treated as a purchase by SLC for accounting
purposes. The Merger is intended to constitute a tax-free reorganization under
the Internal Revenue Code of 1986, as amended, except for shares exchanged for
cash.
Consummation of the Merger is subject to various conditions, including
(i) receipt of approval by the stockholders of the Company; (ii) receipt by SLC
of a supplemental ruling from the Internal Revenue Service on certain matters;
(iii) the expiration or termination of applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act; and (iv) satisfaction of certain
other conditions.
In connection with, and as a condition to entering into, the Merger
Agreement, SLC required certain stockholders of the Company to enter into Voting
Support Agreements described more completely in Item 6, by which they have
agreed, among other things, to vote their stock in favor of the Merger and have
granted irrevocable proxies to SLC for that purpose.
On September 28, 1999, prior to the execution of the Merger Agreement,
the Company and Norwest Bank, Minnesota, National Association entered into
Amendment No. 1 to the Rights Agreement dated as of November 27, 1996. A copy of
Amendment No. 1 to Rights Plan is included as Exhibit 8 to this Statement and is
incorporated by reference herein. The foregoing description of Amendment No. 1
to the Rights Plan is qualified in its entirety by reference to the full text of
Amendment No. 1 to the Rights Plan.
Pursuant to the terms of the Merger, at the effective time of the
Merger, the total number of persons serving on the Board of Directors of the
Company shall be nine (unless otherwise agreed in writing by the parties hereto
prior to the effective time of the Merger), two of whom shall be Thomas L. Auth
and Perry J. Lewis and seven of whom shall be selected by and at the absolute
discretion of the Board of Directors of SLC. Thereafter, membership on the Board
of Directors of the Company shall be determined in accordance with a voting
agreement by and among Berwind, Thomas L. Auth and MLGA Fund II, L.P. to be
executed at the effective time of the Merger (the "Voting Agreement"), the form
of which is included as Exhibit 9 to this Statement and incorporated by
reference herein. The foregoing
-4-
<PAGE>
description of the Voting Agreement is qualified in its entirety by reference to
the full text of the form of the Voting Agreement. Pursuant to the Voting
Agreement, Berwind will agree, subject to the terms of the Voting Agreement,
that until the second anniversary of the effective time of the Merger, it will
vote all shares of Company Common Stock owned by it for the following
individuals as directors of the Company: (a) Thomas L. Auth, who will serve as
Chairman of the Board of Directors of the Company, and (b) Perry J. Lewis, but
only for so long as he and certain controlled affiliates collectively own
(beneficially and of record) at least 25% of the shares of Company Common Stock
collectively owned by him and such controlled affiliates immediately prior to
the effective time of the Merger.
Pursuant to the terms of the Merger, at the effective time of the
Merger, the Certificate of Incorporation of the Company shall be amended to opt
out of Section 203 of the Delaware General Corporation Law and to increase the
number of authorized shares of Company Common Stock to 60,000,000.
A copy of the Merger Agreement is included as Exhibit 2 to this
Statement and is incorporated by reference herein. The foregoing description of
the Merger Agreement is qualified in its entirety by reference to the full text
of the Merger Agreement.
Other than as described above or in Item 6 or 7 below, none of the
Reporting Persons has any plans or proposals that relate to or would result in
(i) the acquisition by any person of additional securities of the Company, or
the disposition of securities of the Company, (ii) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company or any of it is subsidiaries, (ii) a sale or transfer of a material
amount of assets of the Company or of any of its subsidiaries, (iv) any change
in the present board of directors or management of the Company, including any
plans or proposals to change the number or term of directors or to fill any
existing vacancies on the board, (v) any material change in the present
capitalization or dividend policy of the Company, (vi) any other material change
in the Company's business or corporate structure, (vii) changes in the Company's
charter, bylaws or instruments corresponding thereto or other actions which may
impede the acquisition of control of the Company by any person, (viii) causing a
class of securities of the Company to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an inter-dealer quotation
system of a registered national securities association, (ix) a class of equity
securities of the Company becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act or (x) any action similar to
those enumerated above, although subject to the provisions of the Merger
Agreement, they reserve the right to develop such plans.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Under the definition of "beneficial ownership" as set forth in Rule
13d-3 under the Exchange Act, SLC may be deemed to beneficially own 1,607,737
shares of Company Common Stock or approximately 19.1% of the outstanding Company
Common Stock (based upon 8,438,342 shares of Company Common Stock outstanding as
represented by the Company in the Merger Agreement), subject to the Voting
Support Agreements. As a result of their relationship with SLC, each of the
executive officers and directors of SLC listed on Schedule A may be deemed to
have indirect beneficial ownership of the Company Common Stock with respect to
which SLC has beneficial ownership; however, each such individual disclaims
beneficial ownership of the Company Common Stock. Berwind is the sole owner of
SLC and the general partners of Berwind are the Berwind Trusts. Accordingly,
Berwind, Berwind's authorized representatives, the Berwind Trusts and the
trustees of the Berwind Trusts may be deemed to have indirect beneficial
ownership of any Company Common Stock deemed to be beneficially owned by SLC;
however, each such authorized representative, Berwind Trust and trustee
disclaims beneficial ownership of the Company Common Stock. Neither the filing
of this Statement nor any of its contents shall be deemed to constitute an
admission that any of the foregoing persons is the beneficial
-5-
<PAGE>
owner of the Company Common Stock referred to in this Item for purposes of
Section 13(d) of the Exchange Act or any other purpose.
Except as disclosed in this Statement, to the best of the Reporting
Persons' knowledge, none of the persons named in Item 2 hereof or on Schedule A
hereto beneficially owns any shares of Company Common Stock, nor have any
transactions in Company Common Stock been effected during the past 60 days by
any Reporting Person or, to the best knowledge of the Reporting Person, by any
of the persons named in Item 2 hereof or on Schedule A hereto. In addition, no
other person is known by the Reporting Persons to have the right to receive or
the power to direct the receipt of dividends from, or the proceeds from the sale
of, the securities covered by this Statement.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
On September 28, 1999, SLC entered into an agreement with the
following stockholders of the Company: Thomas L. Auth, Auth Family Limited
Partnership, Sangwoo Ahn, Perry J. Lewis and MLGA Fund II, L.P. (each such
agreement, a "Voting Support Agreement" and such agreements collectively, the
"Voting Support Agreements"). Pursuant to the Voting Support Agreements, each
such stockholder has agreed, among other things, to vote or cause to be voted
all of the shares of Company Common Stock owned by such stockholder (i) in favor
of the Merger, (ii) against any action or agreement that would result in a
breach in any material respect of any covenant, representation or warranty or
any other obligation or agreement of the Company under the Merger Agreement, and
(iii) against any action or agreement that would impede, interfere with, delay,
postpone or attempt to discourage the Merger. Each of the stockholders that
entered into a Voting Support Agreement granted SLC an irrevocable proxy to vote
his or its shares of Company Common Stock as indicated in the immediately
preceding sentence. The stockholders who executed Voting Support Agreements are
estimated to have voting power over approximately 19.1% of the outstanding
shares of Company Common Stock, based upon 8,438,342 shares of Company Common
Stock outstanding as represented by the Company in the Merger Agreement. Copies
of the Voting Support Agreements are filed as Exhibits 3, 4, 5, 6, and 7 to this
Statement and are incorporated by reference herein. The foregoing description of
the Voting Support Agreements is qualified in its entirety by reference to the
full text of the Voting Support Agreements.
A copy of the Merger Agreement is filed as Exhibit 2 to this Statement
and is incorporated by reference herein. The foregoing description of the Merger
Agreement is qualified in its entirety by reference to the full text of the
Merger Agreement.
The copy of the form of Voting Agreement is filed as Exhibit 9 to this
Statement and is incorporated by reference herein. The foregoing description of
the Voting Agreement is qualified in its entirety by reference to the full text
of the form of Voting Agreement.
To the extent such information was available on the date hereof, to
the knowledge of each Reporting Person on the date hereof, except as set forth
herein or in the Exhibits filed herewith, none of the persons named in Item 2 or
on Schedule A hereto has any other contracts, arrangements, understandings or
relationships (legal or otherwise) with any person and with respect to any
securities of the Company, including but not limited to transfer or voting of
any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
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<PAGE>
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following exhibits are filed as part of this Statement:
Exhibit 1 Joint Filing Agreement by and between SLC Technologies, Inc. and
Berwind Group Partners.
Exhibit 2 Merger Agreement between ITI Technologies, Inc. and SLC
Technologies, Inc. dated as of September 28, 1999, incorporated
by reference to Exhibit 2.1 of the Company's Current Report on
Form 8-K filed with the Securities and Exchange Commission on
September 30, 1999.
Exhibit 3 Voting Support Agreement dated as of September 28, 1999 between
SLC Technologies, Inc. and Thomas L. Auth.
Exhibit 4 Voting Support Agreement dated as of September 28, 1999 between
SLC Technologies, Inc. and Auth Family Limited Partnership.
Exhibit 5 Voting Support Agreement dated as of September 28, 1999 between
SLC Technologies, Inc. and Sangwoo Ahn.
Exhibit 6 Voting Support Agreement dated as of September 28, 1999 between
SLC Technologies, Inc. and Perry J. Lewis.
Exhibit 7 Voting Support Agreement dated as of September 28, 1999 between
SLC Technologies, Inc. and MLGA Fund II, L.P.
Exhibit 8 Amendment No. 1 to Rights Plan dated September 28, 1999 between
ITI Technologies, Inc. and Norwest Bank Minnesota, National
Association, incorporated by reference to Exhibit 4.1A of the
Company's Current Report on Form 8-K filed with the Securities
and Exchange Commission on September 30, 1999.
Exhibit 9 Form of Voting Agreement to be entered into among Berwind Group
Partners, Thomas L. Auth and MLGA Fund II, L.P.
Exhibit 10 Commitment Letter dated September 28, 1999 among SLC Technologies
Inc., The Bank of Nova Scotia, PNC Bank, National Association and
PNC Capital Markets, Inc.
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<PAGE>
SIGNATURES
After reasonable inquiry and to the best of their knowledge and
belief, the undersigned certify that the information set forth in this statement
is true, complete and correct. In executing this statement, the undersigned
agree, to the extent required by Rule 13d-1(k)(1), that this statement is being
filed on behalf of each of the reporting persons herein.
Dated: October 8, 1999 SLC TECHNOLOGIES, INC.
By: /s/ James C. Cook
----------------------
Name: James C. Cook
Title: Vice President
BERWIND GROUP PARTNERS
By: /s/ Bruce J. McKenncy
----------------------
Name: Bruce J. McKenney
Title: Vice President
-8-
<PAGE>
Schedule A
<TABLE>
<CAPTION>
________________________________________________________________________________________________________________________
Executive Officers and Directors
of SLC Technologies, Inc.
- ------------------------------------------------------------------------------------------------------------------------
Name Office Business Address Citizenship
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Kenneth L. Boyda CEO, Director 12345 SW Leveton Drive USA
SLC Technologies, Inc. Tualatin, OR 97062
- ------------------------------------------------------------------------------------------------------------------------
M. Brian McCarthy CEO, Americas Group 12345 SW Leveton Drive USA
SLC Technologies, Inc. Tualatin, OR 97062
- ------------------------------------------------------------------------------------------------------------------------
Hugues L. Waucquez CEO, Europe/Africa Group Excelsiorlaan 28-30 Belgium
SLC Technologies, Inc. B-1930 Zavantem, Belgium
- ------------------------------------------------------------------------------------------------------------------------
Clifford W. Licko Sr. V.P.-Operations 1510 Tate Blvd, SE. USA
SLC Technologies, Inc. Hickory, NC 28603
- ------------------------------------------------------------------------------------------------------------------------
John R. Logan VP-Finance, CFO & Secretary 1510 Tate Blvd., S.E. USA
SLC Technologies, Inc. Hickory, NC 28603
- ------------------------------------------------------------------------------------------------------------------------
C. Graham Berwind, Jr. Chairman & CEO 3000 Centre Square West USA
Berwind Corporation 1500 Market St.
Philadelphia, PA 19102
- ------------------------------------------------------------------------------------------------------------------------
Edward F. Kosnik President & COO 3000 Centre Square West USA
Berwind Corporation 1500 Market St.
Philadelphia, PA 19102
- ------------------------------------------------------------------------------------------------------------------------
James L. Hamling President Suite 330, 6 Cadillac Drive USA
Berwind Industries LLC Brentwood, TN 37027
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
C. Graham Berwind, Jr., Edward F. Kosnik and James L. Hamling are directors of
SLC Technologies Inc.
Berwind Corporation is engaged, through its divisions and subsidiaries, in the
ownership and operation of industrial, natural resources, financial and real
estate businesses. Berwind Corporation's address is 3000 Centre Square West,
1500 Market Street, Philadelphia, PA 19102.
Berwind Industries LLC is engaged, through its subsidiaries, in the ownership
and operation of industrial businesses. Berwind Industries' address is Suite
330, 6 Cadillac Drive, Brentwood, TN 37027.
<TABLE>
<CAPTION>
________________________________________________________________________________________________________________________
Authorized Representatives
of Berwind Group Partners
- ------------------------------------------------------------------------------------------------------------------------
Name Office Business Address Citizenship
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Edward F. Kosnik President and COO 3000 Centre Square West USA
Berwind Corporation 1500 Market St.
Philadelphia, PA 19102
- ------------------------------------------------------------------------------------------------------------------------
James C. Cook Sr. Vice President - Finance 3000 Centre Square West USA
Berwind Corporation 1500 Market St.
Philadelphia, PA 19102
- ------------------------------------------------------------------------------------------------------------------------
Bruce J. McKenney Sr. Vice President - Admin. 3000 Centre Square West USA
Berwind Corporation 1500 Market St.
Philadelphia, PA 19102
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
______________________________________________________________________________________________________________
Berwind Trusts
- --------------------------------------------------------------------------------------------------------------
Trust Name Address Trustees
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
C. G. Berwind, Jr., Thomas B. Morris, Jr., 3000 Centre Square West C. Graham Berwind, Jr.
Joanna Berwind Creamer and Jessica 1500 Market Street Thomas B. Morris, Jr.
Berwind Brummett Trustees u/d/t of Philadelphia, PA 19102 Joanna Berwind Creamer
Charles G. Berwind dated 2/28/63 Jessica Berwind Brummett
for: C.G. Berwind, Jr., et al.
- --------------------------------------------------------------------------------------------------------------
C. Graham Berwind, III, Joanna Berwind 3000 Centre Square West C. Graham Berwind, III
Creamer, J. L. Hamling and Thomas B. 1500 Market Street Joanna Berwind Creamer
Morris, Jr. Trustees u/d/t of C. G. Philadelphia, PA 19102 James L. Hamling
Berwind, Jr. dated 12/31/72 for: Thomas B. Morris, Jr.
C. Graham Berwind, III, et al.
- --------------------------------------------------------------------------------------------------------------
Jessica Berwind Brummett, Joanna Berwind 3000 Centre Square West Jessica Berwind Brummett
Creamer, J. L. Hamling and Thomas B. 1500 Market Street Joanna Berwind Creamer
Morris, Jr., Trustees u/d/t of C. G. Philadelphia, PA 19102 James L. Hamling
Berwind, Jr. dated 12/31/72 for: Jessica Thomas B. Morris, Jr.
Berwind Brummett, et al.
- --------------------------------------------------------------------------------------------------------------
James D. Berwind, Joanna Berwind Creamer, 3000 Centre Square West James D. Berwind
J. L. Hamling and Thomas B. Morris, Jr., 1500 Market Street Joanna Berwind Creamer
Trustees u/d/t of C. G. Berwind, Jr., Philadelphia, PA 19102 James L. Hamling
dated 12/31/72 for: James D. Berwind, et al. Thomas B. Morris, Jr.
- --------------------------------------------------------------------------------------------------------------
Joanna Berwind Creamer, J. L. Hamling, 3000 Centre Square West Joanna Berwind Creamer
and Thomas B. Morris, Jr., Trustees 1500 Market Street James L. Hamling
u/d/t of C. G. Berwind, Jr., dated Philadelphia, PA 19102 Thomas B. Morris, Jr.
12/31/72 for: Joanna Berwind Creamer, et al.
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
_________________________________________________________________________________________________________________
Information Regarding Trustees
- -----------------------------------------------------------------------------------------------------------------
Name Office Business Address Citizenship
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
C. Graham Berwind, Jr. Chairman & CEO 3000 Centre Square West USA
Berwind Corporation 1500 Market St.
Philadelphia, PA 19102
- -----------------------------------------------------------------------------------------------------------------
C. Graham Berwind, III Portfolio Manager 3000 Centre Square West USA
Berwind Hotel Group, Inc. 1500 Market St.
Philadelphia, PA 19102
- -----------------------------------------------------------------------------------------------------------------
Joanna Berwind Creamer Trustee 3000 Centre Square West USA
1500 Market St.
Philadelphia, PA 19102
- -----------------------------------------------------------------------------------------------------------------
Jessica Berwind Brummett Marketing Director 3000 Centre Square West USA
Berwind Corporation 1500 Market St.
Philadelphia, PA 19102
- -----------------------------------------------------------------------------------------------------------------
James D. Berwind President 2450 Wilton Drive USA
Atlantic Yard Co. Wilton Manors, FL 33305
- -----------------------------------------------------------------------------------------------------------------
James L. Hamling President Suite 330, 6 Cadillac Drive USA
Berwind Industries LLC Brentwood, TN 37027
- -----------------------------------------------------------------------------------------------------------------
Thomas B. Morris, Jr. Attorney 4000 Bell Atlantic Tower USA
Dechert Price & Rhoads 1717 Arch St.
Philadelphia, PA 19103
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
Berwind Hotel Group is engaged, through its affiliated entities, in the business
of acquiring and managing hotels. Berwind Hotel Group's address is 1 Belmont
Avenue, Suite 401, Bala Cynwyd, PA 19004.
Atlantic Yard Co. is a retail provider of upscale garden supplies and its
address is 2450 Wilton Drive, Wilton Manors, FL 33305.
Dechert Price & Rhoads is a law firm and its address is 4000 Bell Atlantic
Tower, 1717 Arch St., Philadelphia, PA 19103.
<PAGE>
EXHIBIT INDEX
No. Description
- --- -----------
Exhibit 1 Joint Filing Agreement by and between SLC Technologies, Inc. and
Berwind Group Partners.
Exhibit 2 Merger Agreement between ITI Technologies, Inc. and SLC
Technologies, Inc. dated as of September 28, 1999, incorporated
by reference to Exhibit 2.1 of the Company's Current Report on
Form 8-K filed with the Securities and Exchange Commission on
September 30, 1999.
Exhibit 3 Voting Support Agreement dated as of September 28, 1999 between
SLC Technologies, Inc. and Thomas L. Auth.
Exhibit 4 Voting Support Agreement dated as of September 28, 1999 between
SLC Technologies, Inc. and Auth Family Limited Partnership.
Exhibit 5 Voting Support Agreement dated as of September 28, 1999 between
SLC Technologies, Inc. and Sangwoo Ahn.
Exhibit 6 Voting Support Agreement dated as of September 28, 1999 between
SLC Technologies, Inc. and Perry J. Lewis.
Exhibit 7 Voting Support Agreement dated as of September 28, 1999 between
SLC Technologies, Inc. and MLGA Fund II, L.P.
Exhibit 8 Amendment No. 1 to Rights Plan dated September 28, 1999 between
ITI Technologies, Inc. and Norwest Bank Minnesota, National
Association, incorporated by reference to Exhibit 4.1A of the
Company's Current Report on Form 8-K filed with the Securities
and Exchange Commission on September 30, 1999.
Exhibit 9 Form of Voting Agreement to be entered into among Berwind Group
Partners, Thomas L. Auth and MLGA Fund II, L.P.
Exhibit 10 Commitment Letter dated September 28, 1999 among SLC Technologies
Inc., The Bank of Nova Scotia, PNC Bank, National Association and
PNC Capital Markets, Inc.
<PAGE>
Exhibit 1
Filing Agreement dated October 8, 1999
Re: Joint Filing of Schedule 13D
The undersigned hereby agree that:
1. (i) each of them is individually eligible to use the Schedule 13D
attached hereto;
2. (ii) the attached Schedule 13D is filed on behalf of each of them;
3. (iii) each of them is responsible for the timely filing of such
Schedule 13D and any amendments thereto, and for the
completeness and accuracy of the information therein
concerning itself; but none of them is responsible for the
completeness and accuracy of the information concerning the
other persons making the filing, unless it knows or has
reason to believe that such information is inaccurate.
SLC TECHNOLOGIES, INC.
By: /s/ James C. Cook
----------------------
Name: James C. Cook
Title: Vice President
BERWIND GROUP PARTNERS
By: /s/ Bruce J. McKenney
---------------------
Name: Bruce J. McKenney
Title: Vice President
<PAGE>
Exhibit 3
VOTING SUPPORT AGREEMENT
------------------------
VOTING SUPPORT AGREEMENT ("Agreement"), dated September 28, 1999, by
and between SLC TECHNOLOGIES, INC., a Delaware corporation ("SLC"), and Thomas
L. Auth ("Stockholder").
A. The Board of Directors of ITI Technologies, Inc., a Delaware
corporation (the "Company"), has previously approved, and concurrently herewith
SLC and the Company are entering into, an Agreement and Plan of Merger and
Reorganization of even date herewith (as the same may be amended from time to
time, the "Merger Agreement"), pursuant to which SLC is to be merged with and
into the Company (the "Merger"). Capitalized terms used but not defined herein
have the meanings ascribed thereto in the Merger Agreement.
B. As of the date hereof, Stockholder is the record and beneficial owner
of 111,266 shares of Common Stock, par value $0.01 per share, of ITI (such
shares together with any other shares of Common Stock acquired after the date
hereof being collectively referred to herein as the "Shares").
C. As a condition to its willingness to enter into the Merger Agreement
SLC has required that Stockholder agree to vote the Shares as hereinafter
specified, all on the terms and conditions provided for herein.
In consideration of the mutual covenants and agreements contained
herein and intending to be legally bound hereby, the parties agree as follows:
1. Agreement to Vote; Proxy.
------------------------
(a) Voting. At any meeting of the stockholders of the Company however
------
called (or any action by consent in lieu of a meeting), Stockholder shall vote
the Shares or cause them to be voted (i) in favor of the Merger; (ii) against
any action or agreement that would result in a breach in any material respect of
any covenant, representation or warranty or any other obligation or agreement of
the Company under the Merger Agreement; and (iii) against any action or
agreement (other than the Merger Agreement or the transactions contemplated
thereby) that would impede, interfere with, delay, postpone or attempt to
discourage the Merger including, but not limited to: (A) any extraordinary
corporate transaction, such as a merger, consolidation or other business
combination involving the Company and the Subsidiaries; (B) a sale or transfer
of a material amount of assets of the Company and the Subsidiaries or a
reorganization, recapitalization or liquidation of the Company and the
Subsidiaries; (C) any change in the management or the board of directors of the
Company, except as otherwise agreed to in writing by SLC; (D) any material
change in the present capitalization or dividend policy of the Company; or (E)
any other material change in the Company's corporate structure or business.
<PAGE>
(b) Proxy. Stockholder hereby grants to SLC a proxy to vote the
-----
Shares as indicated in subsection (a) (or to take action by written consent in
lieu of such vote); provided that such proxy shall terminate upon the valid and
effective termination of this Agreement pursuant to Section 2 hereof.
Stockholder intends this proxy to be irrevocable and coupled with an interest
and will take such further action or execute such other instruments as may be
necessary to effectuate the intent of this proxy and hereby revokes any proxy
previously granted by Stockholder with respect to the Shares (other than to
another party subject to an agreement with SLC identical to this Agreement, to
the extent necessary to accomplish such party's granting of a proxy to SLC);
provided that such proxy shall terminate upon the valid and effective
termination of this Agreement pursuant to Section 2 hereof.
(c) No Alternative Disposition. Except as specifically permitted by
--------------------------
Section 5(b) hereof, Stockholder will not contract to sell, sell or otherwise
transfer or dispose of any Shares, or any interest therein or securities
convertible thereunto or any voting rights with respect thereto, other than
pursuant to the Merger, without first having obtained SLC's written consent.
Except as specifically permitted by Section 5(b) hereof, Stockholder will not
take any action that would adversely affect the voting power of any of the
Shares.
2. Termination. This Agreement shall terminate on the first to occur
-----------
of (a) the Effective Time, (b) the valid and effective termination of the Merger
Agreement in accordance with its terms; provided, however, that if such
termination is pursuant to Section 7.1(e), (f) or (g) of the Merger Agreement,
this Agreement shall not terminate until ITI has paid SLC $10,000,000 pursuant
to Section 5.6(b) of the Merger Agreement, and (c) written notice of termination
of this Agreement by SLC to Stockholder; provided further that nothing contained
in this Section 2 shall relieve Stockholder from any liability for any willful
breach of this Agreement prior to such termination.
3. Representation and Warranties of SLC. SLC hereby represents and
------------------------------------
warrants to Stockholder as follows:
(a) Organization and Existence. SLC is a corporation duly
--------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power to carry on its business as it is
now being conducted.
(b) Authority Relative to this Agreement. SLC has all requisite
------------------------------------
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and delivery by SLC of this
Agreement have been duly and validly authorized by SLC, and no other corporate
proceedings on the part SLC are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by SLC and, assuming this
-2-
<PAGE>
Agreement constitutes a valid and binding obligation of Stockholder, this
Agreement constitutes a valid and binding agreement of SLC enforceable against
it in accordance with its terms.
(c) Consents and Approvals; No Violation. Neither the execution and
------------------------------------
delivery of this Agreement by SLC nor the consummation of the transactions
contemplated hereby will (i) conflict with or result in any breach of any
provision of SLC's certificate of incorporation or bylaws, (ii) require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, except (A) in connection with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "H-S-R
Act"), (B) such filings and approvals as may be required under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or the "blue sky",
takeover or securities laws of various states, or (C) where the failure to
obtain such consent, approval, authorization or permit, or to make such filing
or notification, would not prevent or delay consummation of the transactions
contemplated by this Agreement or would not otherwise prevent SLC from
performing its obligations under this Agreement; (iii) result in a default (or
give rise to any right of termination, cancellation or acceleration) under any
of the terms, conditions or provisions of any license, agreement or other
instrument or obligation to which SLC or any of SLC's subsidiaries is a party or
by which any of them or any of their respective assets may be bound, except for
such defaults (or rights of termination, cancellation or acceleration) as to
which requisite waivers or consents have been obtained or which, in the
aggregate, would not result in a material adverse effect on SLC; or (iv) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
SLC, any of SLC's other subsidiaries or any of their respective assets, except
for violations which would not result in a material adverse effect on SLC.
4. Representations and Warranties of Stockholder. Stockholder hereby
---------------------------------------------
represents and warrants to SLC as follows:
(a) Ownership of Shares. Stockholder owns of record the number of
-------------------
Shares set forth in the preamble hereto and such Shares constitute all of the
shares of Common Stock of the Company owned of record by Stockholder.
Stockholder has sole voting power and sole power of disposition with respect to
all of such Shares, with no restrictions on Stockholder's rights of voting or
disposition pertaining thereto and no other person or entity has any right to
direct Stockholder with respect to voting any of the Shares or approve the
voting by Stockholder of any of the Shares or has any right to approve any
amendment or modification of this Agreement. Stockholder owns all of the Shares,
free and clear of any Lien, other than pursuant to this Agreement.
(b) Legal Capacity; Authority Relative to this Agreement. Stockholder
----------------------------------------------------
has the legal capacity, power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this
-3-
<PAGE>
Agreement by Stockholder and the consummation by Stockholder of the transactions
contemplated hereby have been duly and validly authorized by Stockholder and no
other proceedings on the part of Stockholder or any of the Affiliates of
Stockholder are necessary to authorize this Agreement or to consummate the
transactions so contemplated hereby. This Agreement has been duly and validly
executed and delivered by Stockholder and, assuming this Agreement constitutes a
valid and binding obligation of SLC, this Agreement constitutes a valid and
binding agreement of Stockholder enforceable against Stockholder in accordance
with its terms.
(c) Consents and Approvals; No Violation. Neither the execution and
------------------------------------
delivery of this Agreement by Stockholder nor the consummation of the
transactions contemplated hereby will (i) require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, except (A) in connection with the H-S-R Act or under
the Exchange Act, or (B) where the failure to obtain such consent, approval,
authorization or permit, or to make such filing or notification, would not
prevent or delay consummation of the transactions contemplated by this Agreement
or would not otherwise prevent Stockholder from performing Stockholder's
obligations under this Agreement; (ii) result in a default (or give rise to any
right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any license, agreement or other instrument or
obligation to which stockholder or any of Stockholder's Affiliates is a party or
by which Stockholder or any of such Affiliates or any of their respective assets
may be bound, except for such defaults (or rights of termination, cancellation
or acceleration) as to which requisite waivers or consents have been obtained or
(iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Stockholder, any of such Affiliates or any of their respective
assets.
5. Certain Covenants of Stockholder. Except in accordance with the
--------------------------------
terms of this Agreement, Stockholder hereby covenants and agrees as follows:
(a) No Solicitation. Stockholder shall not, nor shall it permit
---------------
any of its affiliates to, nor shall it authorize or permit any officer, director
or employee of or any financial advisor, attorney or other advisor or
representative of, Stockholder or any of its affiliates to, directly or
indirectly (i) solicit, initiate, induce or encourage the submission of, any ITI
Takeover Proposal (as defined in the Merger Agreement), (ii) enter into any
agreement contemplating or with respect to any ITI Takeover Proposal, (iii)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any ITI Takeover Proposal or (iv) approve, endorse or
recommend any ITI Takeover Proposal.
-4-
<PAGE>
(b) Restriction on Transfer, Proxies and Non-Interference. While
-----------------------------------------------------
this Agreement is in effect, Stockholder shall not sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of any of the Shares (each of the
foregoing, a "Transfer") unless, in connection with such Transfer, the
transferee executes an agreement, in form and substance satisfactory to SLC,
pursuant to which such transferee agrees to be bound by the terms and provisions
of this Agreement applicable to Stockholder and grants to SLC the proxy
described in Section 1(b) of this Agreement; provided, however, that
-------- -------
Stockholder may transfer Shares received as a result of the exercise of options
on or after the date hereof so long as such Shares are transferred to a third
party not affiliated with Stockholder in a brokers' transaction (as such term is
defined in Rule 144 promulgated under the Securities Act of 1933, as amended) in
connection with such exercise. While this Agreement is in effect, and except as
contemplated hereby, Stockholder will not, and shall cause Stockholder's
Affiliates to not (i) grant any proxies, deposit any Shares into a voting trust
or enter into a Voting Support Agreement with respect to any of the Shares or
(ii) take any action that would make any representation or warranty of
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling Stockholder from performing Stockholder's obligations
under this Agreement.
(c) Additional Shares. While this Agreement is in effect,
-----------------
Stockholder will promptly notify SLC of the number of any new Shares acquired or
beneficially owned by Stockholder or Stockholder's Affiliates, if any, after the
date hereof. Any such shares shall become Shares for purposes of this Agreement.
6. Further Assurances. From time to time, at any other party's
------------------
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
reasonably required to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement. All
certificates representing Shares shall bear, until the termination of this
Agreement, in a conspicuous place the following legend, except that in the event
Stockholder transfers Shares pursuant to a brokers' transaction in accordance
with Section 5(b) hereof such legend shall be removed with respect to such
transferred Shares:
The Shares represented by this certificate may not be sold, exchanged or
otherwise transferred or disposed of except in compliance with the terms and
conditions of the Voting Support Agreement, dated as of September 28, 1999,
between SLC Technologies, Inc. and Thomas L. Auth.
7. Stop Transfer Order. In furtherance of this Agreement, Stockholder
-------------------
hereby authorizes the Company's counsel to notify the Company's transfer agent
that a stop
-5-
<PAGE>
transfer order is to be entered with respect to all of the Shares (and that this
Agreement places limits on the voting and transfer of the Shares), except with
respect to Shares that Stockholder transfers pursuant to a brokers' transaction
in accordance with Section 5(b).
8. Miscellaneous.
-------------
(a) Entire Agreement; Assignment. This Agreement (i) constitutes
----------------------------
the entire agreement among the parties with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter hereof and (ii) shall
not be assigned by operation of law or otherwise, provided that SLC may assign
its rights and obligations hereunder to any subsidiary of SLC, but no such
assignment shall relieve SLC of its obligations hereunder if such assignee does
not perform such obligations.
(b) Amendments. This Agreement may not be modified, amended,
----------
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
(c) Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of the State of Delaware.
(d) Specific Performance. Each of the parties hereto recognizes and
--------------------
acknowledges that a breach by Stockholder of any covenants or agreements
contained in this Agreement will cause SLC to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore in the event
of any such breach SLC shall be entitled to the remedy of specific performance
of such covenants and agreements and injunctive and other equitable relief in
addition to any other remedy to which it may be entitled, at law or in equity.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
(f) Descriptive Headings. The descriptive headings used herein are
--------------------
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
(g) Severability. Whenever possible, each provision or portion of
------------
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any
-6-
<PAGE>
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.
(h) Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier, by facsimile
transmission with confirmation of receipt, or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties as
follows:
(i) if to SLC, to:
SLC Technologies, Inc.
c/o Berwind Group
3000 Centre Square West
1500 Market Street
Philadelphia, PA 19102
Attention: Pamela I. Lehrer
General Counsel
Fax No. 215-563-1493
with a copy to:
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attention: Herbert F. Goodrich, Jr.
Fax No. (215) 994-2222
(ii) if to Stockholder, to:
Thomas L Auth
_______________________
_______________________
_______________________
Fax No. _______________
-7-
<PAGE>
with a copy to:
_______________________
_______________________
_______________________
Attention:
Fax No.:
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
-8-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
SLC TECHNOLOGIES, INC.
By: /s/ John Logan
-------------------------------
Name: John Logan
Title: CFO, SLC Technologies, Inc.
/s/ Thomas L. Auth
--------------------------------
Thomas L. Auth
-9-
<PAGE>
Exhibit 4
VOTING SUPPORT AGREEMENT
------------------------
VOTING SUPPORT AGREEMENT ("Agreement"), dated September 28, 1999, by
and between SLC TECHNOLOGIES, INC., a Delaware corporation ("SLC"), and Auth
Family Limited Partnership ("Stockholder").
A. The Board of Directors of ITI Technologies, Inc., a Delaware
corporation (the "Company"), has previously approved, and concurrently herewith
SLC and the Company are entering into, an Agreement and Plan of Merger and
Reorganization of even date herewith (as the same may be amended from time to
time, the "Merger Agreement"), pursuant to which SLC is to be merged with and
into the Company (the "Merger"). Capitalized terms used but not defined herein
have the meanings ascribed thereto in the Merger Agreement.
B. As of the date hereof, Stockholder is the record and beneficial
owner of 125,000 shares of Common Stock, par value $0.01 per share, of ITI (such
shares together with any other shares of Common Stock acquired after the date
hereof being collectively referred to herein as the "Shares").
C. As a condition to its willingness to enter into the Merger
Agreement SLC has required that Stockholder agree to vote the Shares as
hereinafter specified, all on the terms and conditions provided for herein.
In consideration of the mutual covenants and agreements contained
herein and intending to be legally bound hereby, the parties agree as follows:
1. Agreement to Vote; Proxy.
------------------------
(a) Voting. At any meeting of the stockholders of the Company
------
however called (or any action by consent in lieu of a meeting), Stockholder
shall vote the Shares or cause them to be voted (i) in favor of the Merger; (ii)
against any action or agreement that would result in a breach in any material
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement; and (iii) against any
action or agreement (other than the Merger Agreement or the transactions
contemplated thereby) that would impede, interfere with, delay, postpone or
attempt to discourage the Merger including, but not limited to: (A) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company and the Subsidiaries; (B) a sale or
transfer of a material amount of assets of the Company and the Subsidiaries or a
reorganization, recapitalization or liquidation of the Company and the
Subsidiaries; (C) any change in the management or the board of directors of the
Company, except as otherwise agreed to in writing by SLC; (D) any material
change in the present capitalization or dividend policy of the Company; or (E)
any other material change in the Company's corporate structure or business.
<PAGE>
(b) Proxy. Stockholder hereby grants to SLC a proxy to vote the
-----
Shares as indicated in subsection (a) (or to take action by written consent in
lieu of such vote); provided that such proxy shall terminate upon the valid and
effective termination of this Agreement pursuant to Section 2 hereof.
Stockholder intends this proxy to be irrevocable and coupled with an interest
and will take such further action or execute such other instruments as may be
necessary to effectuate the intent of this proxy and hereby revokes any proxy
previously granted by Stockholder with respect to the Shares (other than to
another party subject to an agreement with SLC identical to this Agreement, to
the extent necessary to accomplish such party's granting of a proxy to SLC);
provided that such proxy shall terminate upon the valid and effective
termination of this Agreement pursuant to Section 2 hereof.
(c) No Alternative Disposition. Except as specifically
--------------------------
permitted by Section 5(b) hereof, Stockholder will not contract to sell, sell or
otherwise transfer or dispose of any Shares, or any interest therein or
securities convertible thereunto or any voting rights with respect thereto,
other than pursuant to the Merger, without first having obtained SLC's written
consent. Except as specifically permitted by Section 5(b) hereof, Stockholder
will not take any action that would adversely affect the voting power of any of
the Shares.
2. Termination. This Agreement shall terminate on the first to
-----------
occur of (a) the Effective Time, (b) the valid and effective termination of the
Merger Agreement in accordance with its terms; provided, however, that if such
termination is pursuant to Section 7.1(e), (f) or (g) of the Merger Agreement,
this Agreement shall not terminate until ITI has paid SLC $10,000,000 pursuant
to Section 5.6(b) of the Merger Agreement, and (c) written notice of termination
of this Agreement by SLC to Stockholder; provided further that nothing contained
in this Section 2 shall relieve Stockholder from any liability for any willful
breach of this Agreement prior to such termination.
3. Representation and Warranties of SLC. SLC hereby represents and
------------------------------------
warrants to Stockholder as follows:
(a) Organization and Existence. SLC is a corporation duly
--------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power to carry on its business as it is
now being conducted.
(b) Authority Relative to this Agreement. SLC has all requisite
------------------------------------
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and delivery by SLC of this
Agreement have been duly and validly authorized by SLC, and no other corporate
proceedings on the part SLC are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by SLC and, assuming this
-2-
<PAGE>
Agreement constitutes a valid and binding obligation of Stockholder, this
Agreement constitutes a valid and binding agreement of SLC enforceable against
it in accordance with its terms.
(c) Consents and Approvals; No Violation. Neither the execution
------------------------------------
and delivery of this Agreement by SLC nor the consummation of the transactions
contemplated hereby will (i) conflict with or result in any breach of any
provision of SLC's certificate of incorporation or bylaws, (ii) require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, except (A) in connection with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "H-S-R
Act"), (B) such filings and approvals as may be required under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or the "blue sky",
takeover or securities laws of various states, or (C) where the failure to
obtain such consent, approval, authorization or permit, or to make such filing
or notification, would not prevent or delay consummation of the transactions
contemplated by this Agreement or would not otherwise prevent SLC from
performing its obligations under this Agreement; (iii) result in a default (or
give rise to any right of termination, cancellation or acceleration) under any
of the terms, conditions or provisions of any license, agreement or other
instrument or obligation to which SLC or any of SLC's subsidiaries is a party or
by which any of them or any of their respective assets may be bound, except for
such defaults (or rights of termination, cancellation or acceleration) as to
which requisite waivers or consents have been obtained or which, in the
aggregate, would not result in a material adverse effect on SLC; or (iv) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
SLC, any of SLC's other subsidiaries or any of their respective assets, except
for violations which would not result in a material adverse effect on SLC.
4. Representations and Warranties of Stockholder. Stockholder
---------------------------------------------
hereby represents and warrants to SLC as follows:
(a) Ownership of Shares. Stockholder owns of record the number
-------------------
of Shares set forth in the preamble hereto and such Shares constitute all of the
shares of Common Stock of the Company owned of record by Stockholder.
Stockholder has sole voting power and sole power of disposition with respect to
all of such Shares, with no restrictions on Stockholder's rights of voting or
disposition pertaining thereto and no other person or entity has any right to
direct Stockholder with respect to voting any of the Shares or approve the
voting by Stockholder of any of the Shares or has any right to approve any
amendment or modification of this Agreement. Stockholder owns all of the Shares,
free and clear of any Lien, other than pursuant to this Agreement.
(b) Legal Capacity; Authority Relative to this Agreement.
----------------------------------------------------
Stockholder has the legal capacity, power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this
-3-
<PAGE>
Agreement by Stockholder and the consummation by Stockholder of the transactions
contemplated hereby have been duly and validly authorized by Stockholder and no
other proceedings on the part of Stockholder or any of the Affiliates of
Stockholder are necessary to authorize this Agreement or to consummate the
transactions so contemplated hereby. This Agreement has been duly and validly
executed and delivered by Stockholder and, assuming this Agreement constitutes a
valid and binding obligation of SLC, this Agreement constitutes a valid and
binding agreement of Stockholder enforceable against Stockholder in accordance
with its terms.
(c) Consents and Approvals; No Violation. Neither the execution
------------------------------------
and delivery of this Agreement by Stockholder nor the consummation of the
transactions contemplated hereby will (i) require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, except (A) in connection with the H-S-R Act or under
the Exchange Act, or (B) where the failure to obtain such consent, approval,
authorization or permit, or to make such filing or notification, would not
prevent or delay consummation of the transactions contemplated by this Agreement
or would not otherwise prevent Stockholder from performing Stockholder's
obligations under this Agreement; (ii) result in a default (or give rise to any
right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any license, agreement or other instrument or
obligation to which stockholder or any of Stockholder's Affiliates is a party or
by which Stockholder or any of such Affiliates or any of their respective assets
may be bound, except for such defaults (or rights of termination, cancellation
or acceleration) as to which requisite waivers or consents have been obtained or
(iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Stockholder, any of such Affiliates or any of their respective
assets.
5. Certain Covenants of Stockholder. Except in accordance with the
--------------------------------
terms of this Agreement, Stockholder hereby covenants and agrees as follows:
(a) No Solicitation. Stockholder shall not, nor shall it permit
---------------
any of its affiliates to, nor shall it authorize or permit any officer, director
or employee of or any financial advisor, attorney or other advisor or
representative of, Stockholder or any of its affiliates to, directly or
indirectly (i) solicit, initiate, induce or encourage the submission of, any ITI
Takeover Proposal (as defined in the Merger Agreement), (ii) enter into any
agreement contemplating or with respect to any ITI Takeover Proposal, (iii)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any ITI Takeover Proposal or (iv) approve, endorse or
recommend any ITI Takeover Proposal.
-4-
<PAGE>
(b) Restriction on Transfer, Proxies and Non-Interference.
-----------------------------------------------------
While this Agreement is in effect, Stockholder shall not sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of any of the Shares (each of the
foregoing, a "Transfer") unless, in connection with such Transfer, the
transferee executes an agreement, in form and substance satisfactory to SLC,
pursuant to which such transferee agrees to be bound by the terms and provisions
of this Agreement applicable to Stockholder and grants to SLC the proxy
described in Section 1(b) of this Agreement; provided, however, that Stockholder
-------- -------
may transfer Shares received as a result of the exercise of options on or after
the date hereof so long as such Shares are transferred to a third party not
affiliated with Stockholder in a brokers' transaction (as such term is defined
in Rule 144 promulgated under the Securities Act of 1933, as amended) in
connection with such exercise. While this Agreement is in effect, and except as
contemplated hereby, Stockholder will not, and shall cause Stockholder's
Affiliates to not (i) grant any proxies, deposit any Shares into a voting trust
or enter into a Voting Support Agreement with respect to any of the Shares or
(ii) take any action that would make any representation or warranty of
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling Stockholder from performing Stockholder's obligations
under this Agreement.
(c) Additional Shares. While this Agreement is in effect,
-----------------
Stockholder will promptly notify SLC of the number of any new Shares acquired or
beneficially owned by Stockholder or Stockholder's Affiliates, if any, after the
date hereof. Any such shares shall become Shares for purposes of this Agreement.
6. Further Assurances. From time to time, at any other party's
------------------
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
reasonably required to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement. All
certificates representing Shares shall bear, until the termination of this
Agreement, in a conspicuous place the following legend, except that in the event
Stockholder transfers Shares pursuant to a brokers' transaction in accordance
with Section 5(b) hereof such legend shall be removed with respect to such
transferred Shares:
The Shares represented by this certificate may not be sold, exchanged or
otherwise transferred or disposed of except in compliance with the terms
and conditions of the Voting Support Agreement, dated as of September 28,
1999, between SLC Technologies, Inc. and Auth Family Limited Partnership.
7. Stop Transfer Order. In furtherance of this Agreement,
-------------------
Stockholder hereby authorizes the Company's counsel to notify the Company's
transfer agent that a stop
-5-
<PAGE>
transfer order is to be entered with respect to all of the Shares (and that this
Agreement places limits on the voting and transfer of the Shares), except with
respect to Shares that Stockholder transfers pursuant to a brokers' transaction
in accordance with Section 5(b).
8. Miscellaneous.
-------------
(a) Entire Agreement; Assignment. This Agreement (i)
----------------------------
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
SLC may assign its rights and obligations hereunder to any subsidiary of SLC,
but no such assignment shall relieve SLC of its obligations hereunder if such
assignee does not perform such obligations.
(b) Amendments. This Agreement may not be modified, amended,
----------
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
(c) Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of the State of Delaware.
(d) Specific Performance. Each of the parties hereto recognizes
--------------------
and acknowledges that a breach by Stockholder of any covenants or agreements
contained in this Agreement will cause SLC to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore in the event
of any such breach SLC shall be entitled to the remedy of specific performance
of such covenants and agreements and injunctive and other equitable relief in
addition to any other remedy to which it may be entitled, at law or in equity.
(e) Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be deemed to be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
(f) Descriptive Headings. The descriptive headings used herein
--------------------
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
(g) Severability. Whenever possible, each provision or portion
------------
of any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any
-6-
<PAGE>
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.
(h) Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier, by facsimile
transmission with confirmation of receipt, or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties as
follows:
(i) if to SLC, to:
SLC Technologies, Inc.
c/o Berwind Group
3000 Centre Square West
1500 Market Street
Philadelphia, PA 19102
Attention: Pamela I. Lehrer
General Counsel
Fax No. 215-563-1493
with a copy to:
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attention: Herbert F. Goodrich, Jr.
Fax No. (215) 994-2222
(ii) if to Stockholder, to:
Auth Family Limited Partnership
_______________________
_______________________
_______________________
Fax No. ________________
-7-
<PAGE>
with a copy to:
_______________________
_______________________
_______________________
Attention:
Fax No.:
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
-8-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
SLC TECHNOLOGIES, INC.
By: /s/ John Logan
-------------------------------
Name: John Logan
Title: CFO, SLC Technologies, Inc.
AUTH FAMILY LIMITED PARTNERSHIP
By: /s/ Thomas L. Auth
--------------------------------
Name: Thomas L. Auth
Title: General Partner
-9-
<PAGE>
Exhibit 5
VOTING SUPPORT AGREEMENT
------------------------
VOTING SUPPORT AGREEMENT ("Agreement"), dated September 28, 1999, by
and between SLC TECHNOLOGIES, INC., a Delaware corporation ("SLC"), and Sangwoo
Ahn ("Stockholder").
A. The Board of Directors of ITI Technologies, Inc., a Delaware
corporation (the "Company"), has previously approved, and concurrently herewith
SLC and the Company are entering into, an Agreement and Plan of Merger and
Reorganization of even date herewith (as the same may be amended from time to
time, the "Merger Agreement"), pursuant to which SLC is to be merged with and
into the Company (the "Merger"). Capitalized terms used but not defined herein
have the meanings ascribed thereto in the Merger Agreement.
B. As of the date hereof, Stockholder is the record and beneficial
owner of 42,656 shares of Common Stock, par value $0.01 per share, of ITI (such
shares together with any other shares of Common Stock acquired after the date
hereof being collectively referred to herein as the "Shares").
C. As a condition to its willingness to enter into the Merger
Agreement SLC has required that Stockholder agree to vote the Shares as
hereinafter specified, all on the terms and conditions provided for herein.
In consideration of the mutual covenants and agreements contained
herein and intending to be legally bound hereby, the parties agree as follows:
1. Agreement to Vote; Proxy.
------------------------
(a) Voting. At any meeting of the stockholders of the Company
------
however called (or any action by consent in lieu of a meeting), Stockholder
shall vote the Shares or cause them to be voted (i) in favor of the Merger; (ii)
against any action or agreement that would result in a breach in any material
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement; and (iii) against any
action or agreement (other than the Merger Agreement or the transactions
contemplated thereby) that would impede, interfere with, delay, postpone or
attempt to discourage the Merger including, but not limited to: (A) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company and the Subsidiaries; (B) a sale or
transfer of a material amount of assets of the Company and the Subsidiaries or a
reorganization, recapitalization or liquidation of the Company and the
Subsidiaries; (C) any change in the management or the board of directors of the
Company, except as otherwise agreed to in writing by SLC; (D) any material
change in the present capitalization or dividend policy of the Company; or (E)
any other material change in the Company's corporate structure or business.
<PAGE>
(b) Proxy. Stockholder hereby grants to SLC a proxy to vote the
-----
Shares as indicated in subsection (a) (or to take action by written consent in
lieu of such vote); provided that such proxy shall terminate upon the valid and
effective termination of this Agreement pursuant to Section 2 hereof.
Stockholder intends this proxy to be irrevocable and coupled with an interest
and will take such further action or execute such other instruments as may be
necessary to effectuate the intent of this proxy and hereby revokes any proxy
previously granted by Stockholder with respect to the Shares (other than to
another party subject to an agreement with SLC identical to this Agreement, to
the extent necessary to accomplish such party's granting of a proxy to SLC);
provided that such proxy shall terminate upon the valid and effective
termination of this Agreement pursuant to Section 2 hereof.
(c) No Alternative Disposition. Stockholder will not contract
--------------------------
to sell, sell or otherwise transfer or dispose of any Shares, or any interest
therein or securities convertible thereunto or any voting rights with respect
thereto, other than pursuant to the Merger, without first having obtained SLC's
written consent. Stockholder will not take any action that would adversely
affect the voting power of any of the Shares.
2. Termination. This Agreement shall terminate on the first to
-----------
occur of (a) the Effective Time, (b) the valid and effective termination of the
Merger Agreement in accordance with its terms; provided, however, that if such
termination is pursuant to Section 7.1(e), (f) or (g) of the Merger Agreement,
this Agreement shall not terminate until ITI has paid SLC $10,000,000 pursuant
to Section 5.6(b) of the Merger Agreement, and (c) written notice of termination
of this Agreement by SLC to Stockholder; provided further that nothing contained
in this Section 2 shall relieve Stockholder from any liability for any willful
breach of this Agreement prior to such termination.
3. Representation and Warranties of SLC. SLC hereby represents and
------------------------------------
warrants to Stockholder as follows:
(a) Organization and Existence. SLC is a corporation duly
--------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power to carry on its business as it is
now being conducted.
(b) Authority Relative to this Agreement. SLC has all requisite
------------------------------------
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and delivery by SLC of this
Agreement have been duly and validly authorized by SLC, and no other corporate
proceedings on the part SLC are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by SLC and, assuming this
-2-
<PAGE>
Agreement constitutes a valid and binding obligation of Stockholder, this
Agreement constitutes a valid and binding agreement of SLC enforceable against
it in accordance with its terms.
(c) Consents and Approvals; No Violation. Neither the execution
------------------------------------
and delivery of this Agreement by SLC nor the consummation of the transactions
contemplated hereby will (i) conflict with or result in any breach of any
provision of SLC's certificate of incorporation or bylaws, (ii) require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, except (A) in connection with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "H-S-R
Act"), (B) such filings and approvals as may be required under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or the "blue sky",
takeover or securities laws of various states, or (C) where the failure to
obtain such consent, approval, authorization or permit, or to make such filing
or notification, would not prevent or delay consummation of the transactions
contemplated by this Agreement or would not otherwise prevent SLC from
performing its obligations under this Agreement; (iii) result in a default (or
give rise to any right of termination, cancellation or acceleration) under any
of the terms, conditions or provisions of any license, agreement or other
instrument or obligation to which SLC or any of SLC's subsidiaries is a party or
by which any of them or any of their respective assets may be bound, except for
such defaults (or rights of termination, cancellation or acceleration) as to
which requisite waivers or consents have been obtained or which, in the
aggregate, would not result in a material adverse effect on SLC; or (iv) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
SLC, any of SLC's other subsidiaries or any of their respective assets, except
for violations which would not result in a material adverse effect on SLC.
4. Representations and Warranties of Stockholder. Stockholder
---------------------------------------------
hereby represents and warrants to SLC as follows:
(a) Ownership of Shares. Stockholder owns of record the number
-------------------
of Shares set forth in the preamble hereto and such Shares constitute all of the
shares of Common Stock of the Company owned of record by Stockholder.
Stockholder has sole voting power and sole power of disposition with respect to
all of such Shares, with no restrictions on Stockholder's rights of voting or
disposition pertaining thereto and no other person or entity has any right to
direct Stockholder with respect to voting any of the Shares or approve the
voting by Stockholder of any of the Shares or has any right to approve any
amendment or modification of this Agreement. Stockholder owns all of the Shares,
free and clear of any Lien, other than pursuant to this Agreement.
(b) Legal Capacity; Authority Relative to this Agreement.
----------------------------------------------------
Stockholder has the legal capacity, power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this
-3-
<PAGE>
Agreement by Stockholder and the consummation by Stockholder of the transactions
contemplated hereby have been duly and validly authorized by Stockholder and no
other proceedings on the part of Stockholder or any of the Affiliates of
Stockholder are necessary to authorize this Agreement or to consummate the
transactions so contemplated hereby. This Agreement has been duly and validly
executed and delivered by Stockholder and, assuming this Agreement constitutes a
valid and binding obligation of SLC, this Agreement constitutes a valid and
binding agreement of Stockholder enforceable against Stockholder in accordance
with its terms.
(c) Consents and Approvals; No Violation. Neither the execution
------------------------------------
and delivery of this Agreement by Stockholder nor the consummation of the
transactions contemplated hereby will (i) require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, except (A) in connection with the H-S-R Act or under
the Exchange Act, or (B) where the failure to obtain such consent, approval,
authorization or permit, or to make such filing or notification, would not
prevent or delay consummation of the transactions contemplated by this Agreement
or would not otherwise prevent Stockholder from performing Stockholder's
obligations under this Agreement; (ii) result in a default (or give rise to any
right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any license, agreement or other instrument or
obligation to which stockholder or any of Stockholder's Affiliates is a party or
by which Stockholder or any of such Affiliates or any of their respective assets
may be bound, except for such defaults (or rights of termination, cancellation
or acceleration) as to which requisite waivers or consents have been obtained or
(iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Stockholder, any of such Affiliates or any of their respective
assets.
5. Certain Covenants of Stockholder. Except in accordance with the
--------------------------------
terms of this Agreement, Stockholder hereby covenants and agrees as follows:
(a) No Solicitation. Stockholder shall not, nor shall it permit
---------------
any of its affiliates to, nor shall it authorize or permit any officer, director
or employee of or any financial advisor, attorney or other advisor or
representative of, Stockholder or any of its affiliates to, directly or
indirectly (i) solicit, initiate, induce or encourage the submission of, any ITI
Takeover Proposal (as defined in the Merger Agreement), (ii) enter into any
agreement contemplating or with respect to any ITI Takeover Proposal, (iii)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any ITI Takeover Proposal or (iv) approve, endorse or
recommend any ITI Takeover Proposal.
-4-
<PAGE>
(b) Restriction on Transfer, Proxies and Non-Interference.
-----------------------------------------------------
While this Agreement is in effect, Stockholder shall not sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of any of the Shares (each of the
foregoing, a "Transfer") unless, in connection with such Transfer, the
transferee executes an agreement, in form and substance satisfactory to SLC,
pursuant to which such transferee agrees to be bound by the terms and provisions
of this Agreement applicable to Stockholder and grants to SLC the proxy
described in Section 1(b) of this Agreement; provided, however, that Stockholder
may transfer up to 15,000 of the Shares to a private charitable foundation free
and clear from the terms and restrictions of this Agreement, including but not
limited to Section 6 hereof. While this Agreement is in effect, and except as
contemplated hereby, Stockholder will not, and shall cause Stockholder's
Affiliates to not (i) grant any proxies, deposit any Shares into a voting trust
or enter into a Voting Support Agreement with respect to any of the Shares or
(ii) take any action that would make any representation or warranty of
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling Stockholder from performing Stockholder's obligations
under this Agreement.
(c) Additional Shares. While this Agreement is in effect,
-----------------
Stockholder will promptly notify SLC of the number of any new Shares acquired or
beneficially owned by Stockholder or Stockholder's Affiliates, if any, after the
date hereof. Any such shares shall become Shares for purposes of this Agreement.
6. Further Assurances. From time to time, at any other party's
------------------
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
reasonably required to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement. All
certificates representing Shares shall bear, until the termination of this
Agreement, in a conspicuous place the following legend:
The Shares represented by this certificate may not be sold, exchanged or
otherwise transferred or disposed of except in compliance with the terms
and conditions of the Voting Support Agreement, dated as of September 28,
1999, between SLC Technologies, Inc. and Sangwoo Ahn.
7. Stop Transfer Order. In furtherance of this Agreement,
-------------------
Stockholder hereby authorizes the Company's counsel to notify the Company's
transfer agent that a stop transfer order is to be entered with respect to all
of the Shares (and that this Agreement places limits on the voting and transfer
of the Shares).
-5-
<PAGE>
8. Miscellaneous.
-------------
(a) Entire Agreement; Assignment. This Agreement (i)
----------------------------
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
SLC may assign its rights and obligations hereunder to any subsidiary of SLC,
but no such assignment shall relieve SLC of its obligations hereunder if such
assignee does not perform such obligations.
(b) Amendments. This Agreement may not be modified, amended,
----------
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
(c) Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of the State of Delaware.
(d) Specific Performance. Each of the parties hereto recognizes
--------------------
and acknowledges that a breach by Stockholder of any covenants or agreements
contained in this Agreement will cause SLC to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore in the event
of any such breach SLC shall be entitled to the remedy of specific performance
of such covenants and agreements and injunctive and other equitable relief in
addition to any other remedy to which it may be entitled, at law or in equity.
(e) Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be deemed to be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
(f) Descriptive Headings. The descriptive headings used herein
--------------------
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
(g) Severability. Whenever possible, each provision or portion
------------
of any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
-6-
<PAGE>
(h) Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier, by facsimile
transmission with confirmation of receipt, or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties as
follows:
(i) if to SLC, to:
SLC Technologies, Inc.
c/o Berwind Group
3000 Centre Square West
1500 Market Street
Philadelphia, PA 19102
Attention: Pamela I. Lehrer
General Counsel
Fax No. 215-563-1493
with a copy to:
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attention: Herbert F. Goodrich, Jr.
Fax No. (215) 994-2222
if to Stockholder, to:
Sangwoo Ahn
___________________________
___________________________
___________________________
Fax No.:
with a copy to:
___________________________
___________________________
___________________________
-7-
<PAGE>
Attention:
Fax No.:
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
-8-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
SLC TECHNOLOGIES, INC.
By: /s/ John Logan
-------------------------------
Name: John Logan
Title: CFO, SLC Technologies, Inc.
/s/ Sangwoo Ahn
--------------------------------
Sangwoo Ahn
-9-
<PAGE>
Exhibit 6
VOTING SUPPORT AGREEMENT
------------------------
VOTING SUPPORT AGREEMENT ("Agreement"), dated September 28, 1999, by
and between SLC TECHNOLOGIES, INC., a Delaware corporation ("SLC"), and Perry J.
Lewis ("Stockholder").
A. The Board of Directors of ITI Technologies, Inc., a Delaware
corporation (the "Company"), has previously approved, and concurrently herewith
SLC and the Company are entering into, an Agreement and Plan of Merger and
Reorganization of even date herewith (as the same may be amended from time to
time, the "Merger Agreement"), pursuant to which SLC is to be merged with and
into the Company (the "Merger"). Capitalized terms used but not defined herein
have the meanings ascribed thereto in the Merger Agreement.
B. As of the date hereof, Stockholder is the record and beneficial
owner of 47,656 shares of Common Stock, par value $0.01 per share, of ITI (such
shares together with any other shares of Common Stock acquired after the date
hereof being collectively referred to herein as the "Shares").
C. As a condition to its willingness to enter into the Merger
Agreement SLC has required that Stockholder agree to vote the Shares as
hereinafter specified, all on the terms and conditions provided for herein.
In consideration of the mutual covenants and agreements contained
herein and intending to be legally bound hereby, the parties agree as follows:
1. Agreement to Vote; Proxy.
------------------------
(a) Voting. At any meeting of the stockholders of the Company
------
however called (or any action by consent in lieu of a meeting), Stockholder
shall vote the Shares or cause them to be voted (i) in favor of the Merger; (ii)
against any action or agreement that would result in a breach in any material
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement; and (iii) against any
action or agreement (other than the Merger Agreement or the transactions
contemplated thereby) that would impede, interfere with, delay, postpone or
attempt to discourage the Merger including, but not limited to: (A) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company and the Subsidiaries; (B) a sale or
transfer of a material amount of assets of the Company and the Subsidiaries or a
reorganization, recapitalization or liquidation of the Company and the
Subsidiaries; (C) any change in the management or the board of directors of the
Company, except as otherwise agreed to in writing by SLC; (D) any material
change in the present capitalization or dividend policy of the Company; or (E)
any other material change in the Company's corporate structure or business.
<PAGE>
(b) Proxy. Stockholder hereby grants to SLC a proxy to vote the
-----
Shares as indicated in subsection (a) (or to take action by written consent in
lieu of such vote); provided that such proxy shall terminate upon the valid and
effective termination of this Agreement pursuant to Section 2 hereof.
Stockholder intends this proxy to be irrevocable and coupled with an interest
and will take such further action or execute such other instruments as may be
necessary to effectuate the intent of this proxy and hereby revokes any proxy
previously granted by Stockholder with respect to the Shares (other than to
another party subject to an agreement with SLC identical to this Agreement, to
the extent necessary to accomplish such party's granting of a proxy to SLC);
provided that such proxy shall terminate upon the valid and effective
termination of this Agreement pursuant to Section 2 hereof.
(c) No Alternative Disposition. Stockholder will not contract to
--------------------------
sell, sell or otherwise transfer or dispose of any Shares, or any interest
therein or securities convertible thereunto or any voting rights with respect
thereto, other than pursuant to the Merger, without first having obtained SLC's
written consent. Stockholder will not take any action that would adversely
affect the voting power of any of the Shares.
2. Termination. This Agreement shall terminate on the first to occur of
-----------
(a) the Effective Time, (b) the valid and effective termination of the Merger
Agreement in accordance with its terms; provided, however, that if such
termination is pursuant to Section 7.1(e), (f) or (g) of the Merger Agreement,
this Agreement shall not terminate until ITI has paid SLC $10,000,000 pursuant
to Section 5.6(b) of the Merger Agreement, and (c) written notice of termination
of this Agreement by SLC to Stockholder; provided further that nothing contained
in this Section 2 shall relieve Stockholder from any liability for any willful
breach of this Agreement prior to such termination.
3. Representation and Warranties of SLC. SLC hereby represents and
------------------------------------
warrants to Stockholder as follows:
(a) Organization and Existence. SLC is a corporation duly organized,
--------------------------
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power to carry on its business as it is now
being conducted.
(b) Authority Relative to this Agreement. SLC has all requisite
------------------------------------
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and delivery by SLC of this
Agreement have been duly and validly authorized by SLC, and no other corporate
proceedings on the part SLC are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by SLC and, assuming this
-2-
<PAGE>
Agreement constitutes a valid and binding obligation of Stockholder, this
Agreement constitutes a valid and binding agreement of SLC enforceable against
it in accordance with its terms.
(c) Consents and Approvals; No Violation. Neither the execution and
------------------------------------
delivery of this Agreement by SLC nor the consummation of the transactions
contemplated hereby will (i) conflict with or result in any breach of any
provision of SLC's certificate of incorporation or bylaws, (ii) require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, except (A) in connection with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "H-S-R
Act"), (B) such filings and approvals as may be required under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or the "blue sky",
takeover or securities laws of various states, or (C) where the failure to
obtain such consent, approval, authorization or permit, or to make such filing
or notification, would not prevent or delay consummation of the transactions
contemplated by this Agreement or would not otherwise prevent SLC from
performing its obligations under this Agreement; (iii) result in a default (or
give rise to any right of termination, cancellation or acceleration) under any
of the terms, conditions or provisions of any license, agreement or other
instrument or obligation to which SLC or any of SLC's subsidiaries is a party or
by which any of them or any of their respective assets may be bound, except for
such defaults (or rights of termination, cancellation or acceleration) as to
which requisite waivers or consents have been obtained or which, in the
aggregate, would not result in a material adverse effect on SLC; or (iv) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
SLC, any of SLC's other subsidiaries or any of their respective assets, except
for violations which would not result in a material adverse effect on SLC.
4. Representations and Warranties of Stockholder. Stockholder hereby
---------------------------------------------
represents and warrants to SLC as follows:
(a) Ownership of Shares. Stockholder owns of record the number of
-------------------
Shares set forth in the preamble hereto and such Shares constitute all of the
shares of Common Stock of the Company owned of record by Stockholder.
Stockholder has sole voting power and sole power of disposition with respect to
all of such Shares, with no restrictions on Stockholder's rights of voting or
disposition pertaining thereto and no other person or entity has any right to
direct Stockholder with respect to voting any of the Shares or approve the
voting by Stockholder of any of the Shares or has any right to approve any
amendment or modification of this Agreement. Stockholder owns all of the Shares,
free and clear of any Lien, other than pursuant to this Agreement.
(b) Legal Capacity; Authority Relative to this Agreement.
----------------------------------------------------
Stockholder has the legal capacity, power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this
-3-
<PAGE>
Agreement by Stockholder and the consummation by Stockholder of the transactions
contemplated hereby have been duly and validly authorized by Stockholder and no
other proceedings on the part of Stockholder or any of the Affiliates of
Stockholder are necessary to authorize this Agreement or to consummate the
transactions so contemplated hereby. This Agreement has been duly and validly
executed and delivered by Stockholder and, assuming this Agreement constitutes a
valid and binding obligation of SLC, this Agreement constitutes a valid and
binding agreement of Stockholder enforceable against Stockholder in accordance
with its terms.
(c) Consents and Approvals; No Violation. Neither the execution and
------------------------------------
delivery of this Agreement by Stockholder nor the consummation of the
transactions contemplated hereby will (i) require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, except (A) in connection with the H-S-R Act or under
the Exchange Act, or (B) where the failure to obtain such consent, approval,
authorization or permit, or to make such filing or notification, would not
prevent or delay consummation of the transactions contemplated by this Agreement
or would not otherwise prevent Stockholder from performing Stockholder's
obligations under this Agreement; (ii) result in a default (or give rise to any
right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any license, agreement or other instrument or
obligation to which stockholder or any of Stockholder's Affiliates is a party or
by which Stockholder or any of such Affiliates or any of their respective assets
may be bound, except for such defaults (or rights of termination, cancellation
or acceleration) as to which requisite waivers or consents have been obtained or
(iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Stockholder, any of such Affiliates or any of their respective
assets.
5. Certain Covenants of Stockholder. Except in accordance with the terms
--------------------------------
of this Agreement, Stockholder hereby covenants and agrees as follows:
(a) No Solicitation. Stockholder shall not, nor shall it permit any
---------------
of its affiliates to, nor shall it authorize or permit any officer, director or
employee of or any financial advisor, attorney or other advisor or
representative of, Stockholder or any of its affiliates to, directly or
indirectly (i) solicit, initiate, induce or encourage the submission of, any ITI
Takeover Proposal (as defined in the Merger Agreement), (ii) enter into any
agreement contemplating or with respect to any ITI Takeover Proposal, (iii)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any ITI Takeover Proposal or (iv) approve, endorse or
recommend any ITI Takeover Proposal.
-4-
<PAGE>
(b) Restriction on Transfer, Proxies and Non-Interference. While
-----------------------------------------------------
this Agreement is in effect, Stockholder shall not sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of any of the Shares (each of the
foregoing, a "Transfer") unless, in connection with such Transfer, the
transferee executes an agreement, in form and substance satisfactory to SLC,
pursuant to which such transferee agrees to be bound by the terms and provisions
of this Agreement applicable to Stockholder and grants to SLC the proxy
described in Section 1(b) of this Agreement. While this Agreement is in effect,
and except as contemplated hereby, Stockholder will not, and shall cause
Stockholder's Affiliates to not (i) grant any proxies, deposit any Shares into a
voting trust or enter into a Voting Support Agreement with respect to any of the
Shares or (ii) take any action that would make any representation or warranty of
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling Stockholder from performing Stockholder's obligations
under this Agreement.
(c) Additional Shares. While this Agreement is in effect,
-----------------
Stockholder will promptly notify SLC of the number of any new Shares acquired or
beneficially owned by Stockholder or Stockholder's Affiliates, if any, after the
date hereof. Any such shares shall become Shares for purposes of this Agreement.
6. Further Assurances. From time to time, at any other party's request
------------------
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be reasonably
required to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement. All certificates
representing Shares shall bear, until the termination of this Agreement, in a
conspicuous place the following legend:
The Shares represented by this certificate may not be sold, exchanged or
otherwise transferred or disposed of except in compliance with the terms
and conditions of the Voting Support Agreement, dated as of September 28,
1999, between SLC Technologies, Inc. and Perry J. Lewis.
7. Stop Transfer Order. In furtherance of this Agreement, Stockholder
------------------
hereby authorizes the Company's counsel to notify the Company's transfer agent
that a stop transfer order is to be entered with respect to all of the Shares
(and that this Agreement places limits on the voting and transfer of the
Shares).
-5-
<PAGE>
8. Miscellaneous.
-------------
(a) Entire Agreement; Assignment. This Agreement (i) constitutes the
----------------------------
entire agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof and (ii) shall not
be assigned by operation of law or otherwise, provided that SLC may assign its
rights and obligations hereunder to any subsidiary of SLC, but no such
assignment shall relieve SLC of its obligations hereunder if such assignee does
not perform such obligations.
(b) Amendments. This Agreement may not be modified, amended, altered
----------
or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
(c) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the internal laws of the State of Delaware.
(d) Specific Performance. Each of the parties hereto recognizes and
--------------------
acknowledges that a breach by Stockholder of any covenants or agreements
contained in this Agreement will cause SLC to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore in the event
of any such breach SLC shall be entitled to the remedy of specific performance
of such covenants and agreements and injunctive and other equitable relief in
addition to any other remedy to which it may be entitled, at law or in equity.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
(f) Descriptive Headings. The descriptive headings used herein are
--------------------
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
(g) Severability. Whenever possible, each provision or portion of
------------
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
-6-
<PAGE>
(h) Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier, by facsimile
transmission with confirmation of receipt, or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties as
follows:
(i) if to SLC, to:
SLC Technologies, Inc.
c/o Berwind Group
3000 Centre Square West
1500 Market Street
Philadelphia, PA 19102
Attention: Pamela I. Lehrer
General Counsel
Fax No. 215-563-1493
with a copy to:
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attention: Herbert F. Goodrich, Jr.
Fax No. (215) 994-2222
(ii) if to Stockholder, to:
Perry J. Lewis
___________________________
___________________________
___________________________
Fax No.:
with a copy to:
___________________________
___________________________
-7-
<PAGE>
___________________________
Attention:
Fax No.:
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
-8-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
SLC TECHNOLOGIES, INC.
By: /s/ John Logan
-------------------------------
Name: John Logan
Title: CFO, SLC Technologies, Inc.
/s/ Perry J. Lewis
--------------------------------
Perry J. Lewis
-9-
<PAGE>
Exhibit 7
VOTING SUPPORT AGREEMENT
------------------------
VOTING SUPPORT AGREEMENT ("Agreement"), dated September 28, 1999, by
and between SLC TECHNOLOGIES, INC., a Delaware corporation ("SLC"), and MLGA
Fund II, L.P. ("Stockholder").
A. The Board of Directors of ITI Technologies, Inc., a Delaware
corporation (the "Company"), has previously approved, and concurrently herewith
SLC and the Company are entering into, an Agreement and Plan of Merger and
Reorganization of even date herewith (as the same may be amended from time to
time, the "Merger Agreement"), pursuant to which SLC is to be merged with and
into the Company (the "Merger"). Capitalized terms used but not defined herein
have the meanings ascribed thereto in the Merger Agreement.
B. As of the date hereof, Stockholder is the record and beneficial owner
of 1,281,159 shares of Common Stock, par value $0.01 per share, of ITI (such
shares together with any other shares of Common Stock acquired after the date
hereof being collectively referred to herein as the "Shares").
C. As a condition to its willingness to enter into the Merger Agreement
SLC has required that Stockholder agree to vote the Shares as hereinafter
specified, all on the terms and conditions provided for herein.
In consideration of the mutual covenants and agreements contained
herein and intending to be legally bound hereby, the parties agree as follows:
1. Agreement to Vote; Proxy.
------------------------
(a) Voting. At any meeting of the stockholders of the Company
------
however called (or any action by consent in lieu of a meeting), Stockholder
shall vote the Shares or cause them to be voted (i) in favor of the Merger; (ii)
against any action or agreement that would result in a breach in any material
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement; and (iii) against any
action or agreement (other than the Merger Agreement or the transactions
contemplated thereby) that would impede, interfere with, delay, postpone or
attempt to discourage the Merger including, but not limited to: (A) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company and the Subsidiaries; (B) a sale or
transfer of a material amount of assets of the Company and the Subsidiaries or a
reorganization, recapitalization or liquidation of the Company and the
Subsidiaries; (C) any change in the management or the board of directors of the
Company, except as otherwise agreed to in writing by SLC; (D) any material
change in the present capitalization or dividend policy of the Company; or (E)
any other material change in the Company's corporate structure or business.
<PAGE>
(b) Proxy. Stockholder hereby grants to SLC a proxy to vote
-----
the Shares as indicated in subsection (a) (or to take action by written consent
in lieu of such vote); provided that such proxy shall terminate upon the valid
and effective termination of this Agreement pursuant to Section 2 hereof.
Stockholder intends this proxy to be irrevocable and coupled with an interest
and will take such further action or execute such other instruments as may be
necessary to effectuate the intent of this proxy and hereby revokes any proxy
previously granted by Stockholder with respect to the Shares (other than to
another party subject to an agreement with SLC identical to this Agreement, to
the extent necessary to accomplish such party's granting of a proxy to SLC);
provided that such proxy shall terminate upon the valid and effective
termination of this Agreement pursuant to Section 2 hereof.
(c) No Alternative Disposition. Stockholder will not contract
--------------------------
to sell, sell or otherwise transfer or dispose of any Shares, or any interest
therein or securities convertible thereunto or any voting rights with respect
thereto, other than pursuant to the Merger, without first having obtained SLC's
written consent. Stockholder will not take any action that would adversely
affect the voting power of any of the Shares.
2. Termination. This Agreement shall terminate on the first to
-----------
occur of (a) the Effective Time, (b) the valid and effective termination of the
Merger Agreement in accordance with its terms; provided, however, that if such
termination is pursuant to Section 7.1(e), (f) or (g) of the Merger Agreement,
this Agreement shall not terminate until ITI has paid SLC $10,000,000 pursuant
to Section 5.6(b) of the Merger Agreement, and (c) written notice of termination
of this Agreement by SLC to Stockholder; provided further that nothing contained
in this Section 2 shall relieve Stockholder from any liability for any willful
breach of this Agreement prior to such termination.
3. Representation and Warranties of SLC. SLC hereby represents and
------------------------------------
warrants to Stockholder as follows:
(a) Organization and Existence. SLC is a corporation duly
--------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power to carry on its business as it is
now being conducted.
(b) Authority Relative to this Agreement. SLC has all
------------------------------------
requisite corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder. The execution and delivery by SLC of
this Agreement have been duly and validly authorized by SLC, and no other
corporate proceedings on the part SLC are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by SLC and, assuming this
-2-
<PAGE>
Agreement constitutes a valid and binding obligation of Stockholder, this
Agreement constitutes a valid and binding agreement of SLC enforceable against
it in accordance with its terms.
(c) Consents and Approvals; No Violation. Neither the
------------------------------------
execution and delivery of this Agreement by SLC nor the consummation of the
transactions contemplated hereby will (i) conflict with or result in any breach
of any provision of SLC's certificate of incorporation or bylaws, (ii) require
any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, except (A) in
connection with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "H-S-R Act"), (B) such filings and approvals as may be required
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") or
the "blue sky", takeover or securities laws of various states, or (C) where the
failure to obtain such consent, approval, authorization or permit, or to make
such filing or notification, would not prevent or delay consummation of the
transactions contemplated by this Agreement or would not otherwise prevent SLC
from performing its obligations under this Agreement; (iii) result in a default
(or give rise to any right of termination, cancellation or acceleration) under
any of the terms, conditions or provisions of any license, agreement or other
instrument or obligation to which SLC or any of SLC's subsidiaries is a party or
by which any of them or any of their respective assets may be bound, except for
such defaults (or rights of termination, cancellation or acceleration) as to
which requisite waivers or consents have been obtained or which, in the
aggregate, would not result in a material adverse effect on SLC; or (iv) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
SLC, any of SLC's other subsidiaries or any of their respective assets, except
for violations which would not result in a material adverse effect on SLC.
4. Representations and Warranties of Stockholder. Stockholder
---------------------------------------------
hereby represents and warrants to SLC as follows:
(a) Ownership of Shares. Stockholder owns of record the
-------------------
number of Shares set forth in the preamble hereto and such Shares constitute all
of the shares of Common Stock of the Company owned of record by Stockholder.
Stockholder has sole voting power and sole power of disposition with respect to
all of such Shares, with no restrictions on Stockholder's rights of voting or
disposition pertaining thereto and no other person or entity has any right to
direct Stockholder with respect to voting any of the Shares or approve the
voting by Stockholder of any of the Shares or has any right to approve any
amendment or modification of this Agreement. Stockholder owns all of the Shares,
free and clear of any Lien, other than pursuant to this Agreement.
(b) Legal Capacity; Authority Relative to this Agreement.
----------------------------------------------------
Stockholder has been duly created or organized and is validly existing under the
laws of the jurisdiction under which it was created or organized and has the
legal capacity, power and authority to carry on its activities as they are now
being conducted. Stockholder has the legal capacity, power and
-3-
<PAGE>
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Stockholder and the consummation by Stockholder of the transactions
contemplated hereby have been duly and validly authorized by Stockholder and no
other proceedings on the part of Stockholder or any of the Affiliates of
Stockholder are necessary to authorize this Agreement or to consummate the
transactions so contemplated hereby. This Agreement has been duly and validly
executed and delivered by Stockholder and, assuming this Agreement constitutes a
valid and binding obligation of SLC, this Agreement constitutes a valid and
binding agreement of Stockholder enforceable against Stockholder in accordance
with its terms.
(c) Consents and Approvals; No Violation. Neither the
------------------------------------
execution and delivery of this Agreement by Stockholder nor the consummation of
the transactions contemplated hereby will (i) require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, except (A) in connection with the H-S-R Act or under
the Exchange Act, or (B) where the failure to obtain such consent, approval,
authorization or permit, or to make such filing or notification, would not
prevent or delay consummation of the transactions contemplated by this Agreement
or would not otherwise prevent Stockholder from performing Stockholder's
obligations under this Agreement; (ii) result in a default (or give rise to any
right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any license, agreement or other instrument or
obligation to which stockholder or any of Stockholder's Affiliates is a party or
by which Stockholder or any of such Affiliates or any of their respective assets
may be bound, except for such defaults (or rights of termination, cancellation
or acceleration) as to which requisite waivers or consents have been obtained or
(iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Stockholder, any of such Affiliates or any of their respective
assets.
5. Certain Covenants of Stockholder. Except in accordance with
--------------------------------
the terms of this Agreement, Stockholder hereby covenants and agrees as follows:
(a) No Solicitation. Stockholder shall not, nor shall it
---------------
permit any of its affiliates to, nor shall it authorize or permit any officer,
director or employee of or any financial advisor, attorney or other advisor or
representative of, Stockholder or any of its affiliates to, directly or
indirectly (i) solicit, initiate, induce or encourage the submission of, any ITI
Takeover Proposal (as defined in the Merger Agreement), (ii) enter into any
agreement contemplating or with respect to any ITI Takeover Proposal, (iii)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any ITI Takeover Proposal or (iv) approve, endorse or
recommend any ITI Takeover Proposal.
-4-
<PAGE>
(b) Restriction on Transfer, Proxies and Non-Interference.
-----------------------------------------------------
While this Agreement is in effect, Stockholder shall not sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of any of the Shares (each of the
foregoing, a "Transfer") unless, in connection with such Transfer, the
transferee executes an agreement, in form and substance satisfactory to SLC,
pursuant to which such transferee agrees to be bound by the terms and provisions
of this Agreement applicable to Stockholder and grants to SLC the proxy
described in Section 1(b) of this Agreement. While this Agreement is in effect,
and except as contemplated hereby, Stockholder will not, and shall cause
Stockholder's Affiliates to not (i) grant any proxies, deposit any Shares into a
voting trust or enter into a Voting Support Agreement with respect to any of the
Shares or (ii) take any action that would make any representation or warranty of
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling Stockholder from performing Stockholder's obligations
under this Agreement.
(c) Additional Shares. While this Agreement is in effect,
-----------------
Stockholder will promptly notify SLC of the number of any new Shares acquired or
beneficially owned by Stockholder or Stockholder's Affiliates, if any, after the
date hereof. Any such shares shall become Shares for purposes of this Agreement.
6. Further Assurances. From time to time, at any other party's
------------------
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
reasonably required to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement. All
certificates representing Shares shall bear, until the termination of this
Agreement, in a conspicuous place the following legend:
The Shares represented by this certificate may not be sold, exchanged or
otherwise transferred or disposed of except in compliance with the terms
and conditions of the Voting Support Agreement, dated as of September 28,
1999, between SLC Technologies, Inc. and MLGA Fund II, L.P.
7. Stop Transfer Order. In furtherance of this Agreement,
-------------------
Stockholder hereby authorizes the Company's counsel to notify the Company's
transfer agent that a stop transfer order is to be entered with respect to all
of the Shares (and that this Agreement places limits on the voting and transfer
of the Shares).
-5-
<PAGE>
8. Miscellaneous.
-------------
(a) Entire Agreement; Assignment. This Agreement (i)
----------------------------
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
SLC may assign its rights and obligations hereunder to any subsidiary of SLC,
but no such assignment shall relieve SLC of its obligations hereunder if such
assignee does not perform such obligations.
(b) Amendments. This Agreement may not be modified, amended,
----------
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
(c) Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of the State of Delaware.
(d) Specific Performance. Each of the parties hereto
--------------------
recognizes and acknowledges that a breach by Stockholder of any covenants or
agreements contained in this Agreement will cause SLC to sustain damages for
which it would not have an adequate remedy at law for money damages, and
therefore in the event of any such breach SLC shall be entitled to the remedy of
specific performance of such covenants and agreements and injunctive and other
equitable relief in addition to any other remedy to which it may be entitled, at
law or in equity.
(e) Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which shall be deemed to be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
(f) Descriptive Headings. The descriptive headings used
--------------------
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
(g) Severability. Whenever possible, each provision or
------------
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
-6-
<PAGE>
(h) Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier, by facsimile
transmission with confirmation of receipt, or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties as
follows:
(i) if to SLC, to:
SLC Technologies, Inc.
c/o Berwind Group
3000 Centre Square West
1500 Market Street
Philadelphia, PA 19102
Attention: Pamela I. Lehrer
General Counsel
Fax No. 215-563-1493
with a copy to:
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attention: Herbert F. Goodrich, Jr.
Fax No. (215) 994-2222
(ii) if to Stockholder, to:
MLGA Fund II, L.P.
_______________________
_______________________
_______________________
Attention:
Fax No.:
with a copy to:
_______________________
_______________________
-7-
<PAGE>
_______________________
Attention:
Fax No.:
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
-8-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
SLC TECHNOLOGIES, INC.
By: /s/ John Logan
------------------------------
Name: John Logan
Title: CFO, SLC Technologies, Inc.
MLGA FUND II, L.P.
By: MLGAL PARTNERS, L.P., its general partner
By: /s/ Sangwoo Ahn, its general partner
---------------
Name: Sangwoo Ahn
Title:
-9-
<PAGE>
EXHIBIT 9
VOTING AGREEMENT
----------------
VOTING AGREEMENT, dated ______________ (the "Agreement"), by and among
Berwind Group Partners, a Pennsylvania partnership ("Investor"), MLGA Fund II,
L.P., a ______ partnership ("MLGA") and Thomas L. Auth, an individual ("Auth").
Background
----------
A. SLC Technologies, Inc. ("SLC") and ITI Technologies, Inc. ("the
Company") have entered into an Agreement and Plan of Merger dated as of
September 28, 1999 (the "Merger Agreement"). Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Merger Agreement.
Pursuant to the Merger Agreement, SLC will be merged with and into the Company
(the "Merger"), with the Company as the surviving corporation (the "Surviving
Corporation"), and each issued and outstanding share of capital stock of SLC
shall be converted into and exchanged for ____________________ shares of ITI
Common Stock.
B. In accordance with the terms of the Merger Agreement, the Board of
Directors of the Company has the right to designate two individuals who are
members of the Board of Directors of the Company prior to the Effective Time to
serve as directors of the Surviving Corporation . The Company has designated
Auth and Perry J. Lewis ("Lewis") to serve as directors on the Board of
Directors of Surviving Corporation immediately after the Effective Time.
C. Investor is the sole shareholder of SLC and, after the Merger, Investor
will own in excess of 60% of the issued and outstanding shares of ITI Common
Stock. In connection with the Merger, Investor has agreed to vote its shares of
ITI Common Stock in favor the election of certain individuals as directors of
the Surviving Corporation in accordance with the terms of this Agreement.
Terms
-----
In consideration of the mutual covenants contained herein and intending to
be legally bound hereby, the parties hereto agree as follows:
1. Representations, Warranties and Covenants of Investor. Investor
-----------------------------------------------------
represents and warrants that it has the requisite legal right, power and
authority to enter into this Agreement and to perform its obligations hereunder
without the need for the consent of any other person; and this Agreement has
been duly authorized, executed and delivered and constitutes the legal, valid
and binding obligation of it enforceable against Investor in the accordance with
the terms hereof.
2. Representations Warranties and Covenants of MLGA. MLGA represents and
------------------------------------------------
warrants that it has the requisite legal right, power and authority to enter
into this Agreement
<PAGE>
and to perform its obligations hereunder without the need for the consent of any
other person; and this Agreement has been duly authorized, executed and
delivered and constitutes the legal, valid and binding obligation of MLGA
enforceable against it in accordance with the terms hereof.
3. Representations, Warranties and Covenants of Auth. Auth represents and
-------------------------------------------------
warrants that he has the requisite legal right, power and authority to enter
into this Agreement and to perform his obligations hereunder without the need
for the consent of any other person; and this Agreement has been duly
authorized, executed and delivered and constitutes the legal, valid and binding
obligation of Auth enforceable against him in accordance with the terms hereof.
4. Directors and Voting Agreements. Subject to Sections 5, 6 and 7
-------------------------------
hereof, Investor agrees that until the second anniversary of the Closing Date it
will vote all shares owned by it (including executing and delivering written
consents) for the following individuals as directors of the Surviving
Corporation: (a) Auth, who will serve as Chairman of the Board of Directors of
the Surviving Corporation, and (b) Lewis, but only so long as he and his
Controlled Affiliates collectively own (beneficially and of record) at least 25%
of the shares of ITI Common Stock collectively owned by him and his Controlled
Affiliates on the date hereof. As used herein, "Controlled Affiliate" means
MLGA, MLGAL Partners, L.P., John A. Morgan and Sangwoo Ahn.
5. Right to Fill Certain Vacancies in Surviving Corporation's Board. In
----------------------------------------------------------------
the event that a vacancy is created on the Board of Directors of the Surviving
Corporation during the two-year period commencing on the Closing Date by the
death, disability, retirement, resignation or removal for Cause of a director
specified in Section 4 (or a successor thereto appointed pursuant to this
Section 5), Investor will promptly to consent in writing or vote or cause to be
voted all of the shares of ITI Common Stock owned by it to and will cause the
directors elected by it to (a) in the case of a vacancy left by Auth, to elect
an individual designated by the majority of the individuals who were directors
of the Company immediately prior to the Effective Time to fill such vacancy and
serve as a director and (b) so long as MLGA meets the ownership test of Section
4(b), in the case of a vacancy left by Lewis, to elect an individual designated
by MLGA to fill such vacancy and serve as a director.
6. Transfer of Shares by Investor. If Investor transfers any shares of
------------------------------
ITI Common Stock that it receives in connection with the Merger, then Investor
shall cause such transferee to execute a joinder to this Agreement whereby the
transferee agrees to be bound to the same terms of this Agreement to which
Investor is bound.
7. Right to Remove Directors. Notwithstanding Section 4, Investor may
-------------------------
take all action necessary to remove a director specified in Section 4 (or a
successor thereto appointed pursuant to Section 5 hereof) if Cause (defined
below) exists for such removal. As used herein, "Cause" means (i) theft,
misappropriation or embezzlement of the funds of the Surviving Corporation or
(ii) conviction of any felony, crime involving fraud or misrepresentation, or of
any other crime the effect of which is likely to adversely affect on the
Surviving Corporation;
-2-
<PAGE>
provided, however, that Investor shall not vote its shares of ITI Common Stock
- -------- -------
to remove for cause the directors designated in Section 4 unless a majority of
the entire Board of Directors of the Surviving Corporation affirmatively
determines that, in good faith, such director was guilty of the type of conduct
set forth above and specifying the particulars thereof in reasonable detail. In
the event any person ceases to be a director, such person shall also cease to be
a member of any committee of the Board of Directors of the Surviving
Corporation.
8. Termination. This Agreement will terminate on the second anniversary
-----------
of the Closing Date.
9. Amendment and Modification. This Agreement may be amended or
--------------------------
modified, or any provision hereof may be waived, provided that such amendment or
waiver is set forth in a writing executed by the parties hereto.
10. Successors and Assigns; Entire Agreement. 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 and
executors, administrators and heirs. This Agreement sets forth the entire
agreement and understanding among the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.
11. Governing Law. The validity, performance, construction and effect of
-------------
this Agreement shall be governed by and construed in accordance with the
internal law of the State of Delaware, without giving effect to principles of
conflicts of law.
12. Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not constitute a part of this Agreement, nor shall they
affect its meaning, construction or effect.
13. Counterparts. This Agreement may be executed in two or more
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same instrument.
14. Further Assurances. Each party shall cooperate and take such action
------------------
as maybe reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
15. Remedies. In the event of a breach or a threatened breach by any
--------
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The parties
agree that the provisions of this Agreement shall be specifically enforceable,
it being agreed by the
-3-
<PAGE>
parties that the remedy at law, including monetary damages, for breach of such
provision will be inadequate compensation for any loss and that any defense in
any action for specific performance that a remedy at law would be adequate is
waived.
16. No Third Party Beneficiaries. Nothing in this Agreement, express or
----------------------------
implied, is intended to or shall confer upon any other person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
BERWIND GROUP PARTNERS
By: ______________________
Name:
Title:
__________________________
Thomas L. Auth
MLGA FUND II, L.P.
By: MLGAL PARTNERS, L.P.,
its general partner
By: _______________________
Name:
Title:
-4-
<PAGE>
Exhibit 10
The Bank of Nova Scotia PNC Bank, National Association
One Liberty Plaza 1000 Westlakes Drive
New York, New York 10006 Suite 2000
Berwyn, Pennsylvania 19312
PNC Capital Markets, Inc.
1600 Market Street
21st Floor
Philadelphia, Pennsylvania 19103
CONFIDENTIAL
------------
September 28, 1999
SLC Technologies, Inc.
12345 Leveton Drive
Tualatin, Oregon 97062
Attention: Kenneth Boyda
President and Chief Executive Officer
U.S. $325,000,000
Senior Secured Facilities Commitment Letter
-------------------------------------------
Dear Sirs:
We understand that Berwind Group Partners ("BGP"), a partnership
---
wholly owned by The Berwind Family Trusts ("Berwind"), plans to acquire
-------
approximately 60-77% of the capital stock of ITI Technologies, Inc., a Delaware
corporation ("Target"), by merging (the "Merger") pursuant to an Agreement and
------ ------
Plan of Merger and Reorganization (including the schedules thereto) previously
delivered to us (the "Merger Agreement") its wholly-owned subsidiary, SLC
----------------
Technologies, Inc. ("SLC" or the "Borrower") with and into Target (which, after
--- --------
giving effect to the Merger, shall be the Borrower), with Target being the
<PAGE>
surviving corporation. Pursuant to the Merger, (a) the capital stock of SLC
will be converted into approximately 60-77% of the capital stock of Target,
depending on the results of the cash election described below, (b) the
shareholders of Target will have the option to receive $36.50 per share in cash
for up to 50% of the outstanding capital stock of Target (the "Cash Election
-------------
Consideration"), and (c) Target will expressly assume all obligations of the
- -------------
Borrower under the Credit Facilities referred to below.
The Borrower is seeking certain senior credit facilities to finance
the payment of the Cash Election Consideration, refinance (the "Refinancing")
-----------
the debt of the Borrower and Target and to provide for working capital and
general corporate purposes. As a result of the Merger, BGP will own at least
60% of the capital stock of the Target. The Transaction (as defined below)
will be consummated such that the debt outstanding under the Credit Agreement
immediately following such consummation does not exceed the lesser of
$275,000,000 and an amount equal to three times the combined EBITDA of the
Borrower and the Target for the twelve month period ending on the last day of
the fiscal quarter ending prior to the Funding Date. The Transaction will be
accomplished as set forth in the Merger Agreement as in effect on the date
hereof or as is otherwise satisfactory to The Bank of Nova Scotia ("Scotiabank")
----------
and PNC Bank ("PNC") and for the other purposes set forth in the Term Sheet
---
attached as Annex I hereto (the "Term Sheet"). The Merger, the financing of the
------- ----------
payment of the Cash Election Consideration and the Refinancing as contemplated
by the Merger Agreement and the other financing contemplated by this Commitment
Letter and the Term Sheet are referred to collectively as the "Transaction".
-----------
Based on our review of the Transaction and our discussions with you
and Berwind, we understand that, in connection with the Transaction, you are
interested in obtaining a commitment for $325,000,000 of senior, secured
financing consisting of (i) a $225,000,000 revolving credit facility (the
"Revolving Facility") and (ii) a $100,000,000 term A loan facility (the "Term A
------------------ ------
Facility"; the Term A Facility and the Revolving Facility are collectively
- --------
referred to as the "Credit Facilities"). The Credit Facilities will be reduced
-----------------
in the event the shareholders of Target do not elect to receive cash for the
entire 50% of the outstanding capital stock of Target. In such event, the
reduced amount of the Cash Election Consideration from that otherwise payable if
such election had been made in full shall be applied to reduce first, the amount
-----
of the Term A Facility and, second, the amount of the Revolving Facility (but
------
not by more than $25,000,000).
Scotiabank and PNC are pleased to inform you that they hereby each
commit to provide 50% of the total amount of the Credit Facilities. Scotiabank
and PNC Capital Markets, Inc. ("PNC Capital Markets") undertake to use
-------------------
reasonable commercial efforts to form a syndicate of other financial
institutions
<PAGE>
identified by Scotiabank and PNC Capital Markets (together with Scotiabank and
PNC, the "Lenders") that will with the consent of the Borrower (which consent
-------
shall not be unreasonably withheld), collectively, participate in the Credit
Facilities. Scotiabank and PNC Capital Markets each agrees to act as a joint
lead arranger (in such capacity, a "Joint Lead Arranger") of the Credit
-------------------
Facilities. Scotiabank agrees to act as the syndication agent (in such capacity,
the "Syndication Agent"), and PNC agrees to act as the administrative agent (the
-----------------
"Administrative Agent", and together with the Syndication Agent, the "Agents"),
-------------------- ------
for such syndicate of Lenders. The obligations of each Agent and Joint Lead
Arranger hereunder are several and not joint.
Our commitments, undertakings and agreements hereunder are subject to
the following conditions: (a) the terms and conditions set forth herein and in
the Term Sheet and the provisions set forth in Annex II hereto, (b) the terms
--------
and conditions contained in the confidential fee letter, dated the date hereof
(the "Fee Letter"), between you, Scotiabank, PNC and PNC Capital Markets, (c)
----------
prior to and continuing through the Signing Date, (i) trading in securities
generally on the New York Stock Exchange or NASDAQ not having been suspended or
materially limited, (ii) a general moratorium on commercial banking activities
in New York not having been declared by either Federal or state authorities, and
(iii) there not having occurred any outbreak or escalation of hostilities or
other international or domestic calamity, crisis or change in political
financial or economic conditions, the effect of which on the global financial
markets is such as to make it impossible to complete the financing for the
Transaction contemplated by this Commitment Letter, (d) there being no facts,
events or circumstances hereafter arising which come to our attention and
materially adversely affect the consolidated business, assets, liabilities,
financial condition or results of operations of the Target, the Borrower and
their subsidiaries taken as a whole, or the ability of the Borrower to repay the
Credit Facilities and (e) prior to the Funding Date, there being no competing
issuance of debt, securities or commercial bank facilities by the Borrower, the
Target or your or their subsidiaries or on your or their behalf being offered,
placed or arranged except with the prior written consent of Scotiabank and PNC.
In the event any of the foregoing conditions, events or circumstances are not
satisfied, we reserve the right to either terminate our commitments hereunder
(and thereafter have no other or further obligations hereunder or in connection
with the Credit Facility) or to propose alternative financing amounts or
structures that assure adequate protection for the Agents and the Lenders. You
further agree that, notwithstanding any other provision contained herein or the
Term Sheet, we shall be entitled prior to the Signing Date, after consultation
with you, to change the pricing, terms and structure of the Credit Facilities if
we determine that such changes are advisable in order to ensure a successful
syndication of the Credit Facilities; provided that the total amount of the
--------
Credit Facilities remains sufficient to consummate the Transactions and
<PAGE>
the interest rate margins under the Credit Facilities may not be increased by
more than an additional 2.50% per annum and the Facility Fee may not be
increased by more than $1,625,000. Our commitments hereunder are subject to your
agreement to the foregoing. Furthermore, as a condition to our commitments, you
each agree that no other agents, co-agents or arrangers will be appointed, no
other titles will be awarded and no compensation (other than as expressly set
forth in the Term Sheet and the Fee Letter) will be paid in connection with the
Credit Facilities unless the Borrower, Scotiabank and PNC Capital Markets shall
so agree.
The Joint Lead Arrangers intend to solicit commitments from the
prospective Lenders promptly following the execution of this Commitment Letter
in an amount sufficient to allow Scotiabank and PNC to achieve their desired
hold levels in the Credit Facilities. Nonetheless, our commitments are not
subject to syndication of any portion of the Credit Facilities. The Joint Lead
Arrangers will manage all aspects of the syndication, including, without
limitation, decisions as to the selection of institutions to be approached
(subject to the consent of the Borrower, which consent will not be unreasonably
withheld), and when they will be approached, when their commitments will be
accepted, the allocations of the commitments among the Lenders and the amount
and distribution of fees among the Lenders. In that regard, you agree to
actively assist the Joint Lead Arrangers, in all commercially reasonable
respects, in the syndication of the Credit Facilities, which assistance will
require, among other things, that you provide all information the Joint Lead
Arrangers deem to be reasonably necessary to successfully complete the
syndication, including all the information prepared by you or on your behalf
relating to the Transaction and the business, assets, financial condition,
operations and prospects of the Borrower and Target, as the Joint Lead Arrangers
may deem to be reasonably necessary, and all projections (the "Projections"), as
-----------
the Joint Lead Arrangers may reasonably request in connection with the
arrangement and syndication of the Credit Facilities. You hereby represent and
covenant that, to the best of your knowledge, (a) all factual information (the
"Information") that has been or will be made available in writing to the Joint
-----------
Lead Arrangers or the Agents by you or on your behalf is or will be, when
furnished, complete and correct in all material respects and does not or will
not, when furnished, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which such
statements are made and (b) the Projections that have been or will be made
available to the Agents and the Joint Lead Arrangers by you or on your behalf
have been or will be prepared in good faith based upon reasonable assumptions.
In arranging and syndicating the Credit Facilities, the Joint Lead Arrangers
will use and rely on the Information and Projections without independent
verification thereof.
<PAGE>
In addition, you agree to make certain members of your management, as
well as, to the best of your ability, Berwind's management, Target's management,
and each of your, Berwind's and Target's respective consultants and advisors,
available during regular business hours to answer questions regarding the
Transaction and the business, assets, financial condition, operations and
prospects of the Borrower and Target, to review and assist in the preparation of
the syndication memorandum relating to the Credit Facilities, to meet with
prospective Lenders and to use your commercially reasonable efforts to ensure
that our syndication efforts benefit from each of your, Berwind's and Target's
lending relationships.
By your execution of this Commitment Letter, you hereby indemnify and
hold harmless each Joint Lead Arranger, Scotiabank, PNC, each other Lender
committing to participate in the Credit Facilities and each of our and their
respective affiliates, directors, officers, agents and employees, and agree to
promptly pay all of the reasonable out-of-pocket fees and expenses, in each case
following demand, as set forth in Annex II hereto (with the terms and provisions
--------
of such Annex II hereby being incorporated by reference), whether or not
--------
definitive credit, security and other documentation (collectively, the "Credit
------
Documentation") is ultimately executed and delivered or the Transaction or any
- -------------
of the other transactions contemplated hereby or in connection therewith are
ultimately consummated.
This Commitment Letter, the Term Sheet, Annex II hereto and the Fee
--------
Letter are delivered to you, Berwind and Target with the understanding that
neither this letter, the Term Sheet, such Annex II or the Fee Letter, nor the
--------
substance hereof or thereof, shall be disclosed to any third party (including,
without limitation, other lenders, underwriters, placement agents, or advisors
or any similar persons), without our prior written consent, except in the case
of those in a confidential relationship to you, Berwind or Target, such as legal
counsel or accountants, to Target and its financial and other advisors (provided
it is supplied to them on a confidential basis with the understanding that it
may not be supplied to any other person (or their financing sources) seeking to
purchase Target) or as required by law or any court or governmental agency (and
in each such event of permitted disclosure you agree promptly to inform us).
This Commitment Letter, the Term Sheet, Annex II hereto and the Fee Letter
--------
constitute the entire understanding among the parties hereto with respect to the
subject matter hereof and thereof and supersede any prior agreements, written or
oral, with respect hereto or thereto. THIS COMMITMENT LETTER, THE TERM SHEET,
ANNEX II HERETO AND THE FEE LETTER SHALL BE GOVERNED BY AND CONSTRUED IN
- --------
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH OF THE
UNDERSIGNED PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR ARISING OUT OF OR IN CONNECTION WITH, THIS COMMITMENT LETTER, THE TERM SHEET,
ANNEX II HERETO AND THE FEE LETTER, AND ANY OTHER
- --------
<PAGE>
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF ANY OF THE UNDERSIGNED PARTIES IN CONNECTION HEREWITH OR THEREWITH.
IN NO EVENT SHALL ANY PARTY TO THIS COMMITMENT LETTER BE LIABLE FOR
CONSEQUENTIAL DAMAGES.
If you agree with the foregoing, please sign and return to us the
enclosed copy of this Commitment Letter and the Fee Letter no later than 5:00
p.m., New York time, on October 1, 1999. Our commitments, undertakings and
agreements hereunder will terminate at such time unless a copy of this
Commitment Letter and the Fee Letter, signed by you, has been delivered to us
(together with the portion of the facility fee payable thereunder on the date of
acceptance); provided, however, that, any term or provision hereof to the
-------- -------
contrary notwithstanding (i) the two immediately preceding paragraphs shall
survive any termination of our commitments, undertakings and agreements pursuant
to this paragraph, (ii) following your execution and delivery of this Commitment
Letter and the Fee Letter as required above, our commitments, undertakings and
agreements hereunder will terminate at 5:00 p.m., New York time, on November 18,
1999 (the "Signing Date"), as PNC and Scotiabank shall reasonably specify, on or
------------
prior to such time, unless definitive Credit Documentation reasonably
satisfactory to us and our counsel has been executed and delivered by the
Borrower, the other obligors and us and (iii) following the Signing Date, our
commitments, undertakings and agreements hereunder will terminate at 5:00 p.m.,
New York time, on May 31, 2000 unless, on or prior to such time all conditions
precedent to the initial extension of credit under the Credit Facilities have
been satisfied, including consummation of the Transaction (the "Funding Date").
------------
Scotiabank, PNC and the Borrower agree to cooperate in good faith to promptly
complete the definitive Credit Documentation as required by the prior sentence
without regard to the completion of syndication of the Credit Facilities,
provided Scotiabank and PNC will not be required to enter into otherwise
- --------
satisfactory Credit Documentation prior to November 18, 1999, unless the
Borrower needs the Funding Date to occur before November 18, 1999. This letter
supersedes our letter, dated August 23, 1999, to you.
<PAGE>
We look forward to working with you.
Very truly yours,
THE BANK OF NOVA SCOTIA
By /s/ J. Alan Edwards
-------------------------------
Title: Authorized Signatory
<PAGE>
PNC BANK, NATIONAL ASSOCIATION
By /s/ Amy T. Petersen
----------------------------
Title: Vice President
<PAGE>
PNC CAPITAL MARKETS, INC.
By /s/ Douglas Winters
-------------------------
Title: Managing Director
<PAGE>
Agreed to and Accepted
this 28th day of September, 1999
SLC TECHNOLOGIES, INC.
By /s/ James C. Cook
--------------------------
Title: Vice President
<PAGE>
ANNEX I
TERM SHEET
----------
(Unless otherwise defined, terms used
in this Term Sheet have the meanings
ascribed thereto in the Commitment Letter,
dated September 28, 1999 (the "Commitment Letter"),
-----------------
to which this Term Sheet is annexed).
I. PARTIES
-------
Borrower: SLC Technologies, Inc., a Delaware corporation
- -------- ("SLC" or the "Borrower"). The obligations of SLC
--- --------
will be expressly assumed by the Target (as
defined below) pursuant to the Merger (as defined
below).
Target: ITI Technologies, Inc., a Delaware corporation
- ------ ("Target")
------
Guarantors: All direct and indirect subsidiaries of the Target
- ---------- and the Borrower; provided, however, that non-U.S.
-------- -------
subsidiaries shall only be required to deliver
guarantees to the extent it would not result in
material increased tax or similar liabilities for
the Borrower and its subsidiaries on a
consolidated basis (collectively, the
"Guarantors").
----------
Joint Lead Arrangers and The Bank of Nova Scotia ("Scotiabank") and PNC
Joint Bookrunners ----------
- ----------------- Capital Markets, Inc. ("PNC Capital Markets")
-------------------
Administrative Agent: PNC Bank, National Association ("PNC")
- -------------------- ---
Syndication Agent: Scotiabank (the Administrative Agent and the
- ----------------- Syndication Agent are herein sometimes referred to
as an "Agent")
-----
Lenders: Scotiabank, PNC and a group of financial
- ------- institutions (collectively, the "Lenders") as may
-------
be consented to by Scotiabank, PNC and the
Borrower, such consent not to be unreasonably
withheld.
Issuer of Letters of Credit: PNC and/or Scotiabank (in such capacity, the
- --------------------------- "Issuer")
------
<PAGE>
II. THE CREDIT FACILITIES
---------------------
Signing Date: The date, which shall be no later than November
- ------------ 18, 1999 (the "Signing Date"), on which all
------------
definitive Credit Documentation reasonably
satisfactory to PNC, Scotiabank and their counsel
has been executed and delivered by the Borrower,
the other obligors, PNC and Scotiabank.
Scotiabank, PNC and the Borrower agree to
cooperate in good faith to promptly complete the
definitive Credit Documentation as required by the
prior sentence without regard to the completion of
syndication of the Credit Facilities, provided
--------
Scotiabank and PNC will not be required to enter
into otherwise satisfactory Credit Documentation
prior to November 18, 1999, unless the Borrower
requires the Funding Date before November 18,
1999.
Funding Date: The date, which shall be no later than May 31,
- ------------ 2000 (the "Funding Date"), on which all
------------
"Conditions Precedent" below have been satisfied
(or waived), including, without limitation, the
consummation of the Transaction.
General Description of A maximum amount of $325,000,000 in senior, first-
Credit Facilities: priority secured financing to be provided to the
- ----------------- Borrower pursuant to a revolving credit facility
(the "Revolving Facility") and a term A loan
------------------
facility (the "Term A Facility"). The Term A
---------------
Facility and the Revolving Facility are
collectively referred to herein as the "Credit
------
Facilities". Loans made under the Credit
----------
Facilities are herein collectively referred to as
"Loans", with Loans under the Term A Facility
-----
being herein collectively referred to as "Term A
------
Loans" and Loans under the Revolving Facility
-----
being herein collectively referred to as
"Revolving Loans".
---------------
Berwind Group Partners ("BGP"), a partnership
---
wholly owned by The Berwind Family Trusts
("Berwind"), plans to acquire approximately 60-77%
-------
of the capital stock of the Target by merging (the
"Merger") SLC with and into Target (which, after
------
giving effect to the Merger, shall be the
<PAGE>
Borrower), with Target being the surviving
corporation. Pursuant to the Merger, (a) the
capital stock of SLC will be converted into
approximately 60-77% of the capital stock of
Target, depending on the results of the cash
election described below, (b) the shareholders of
Target will have the option to receive $36.50 per
share in cash for up to 50% of the outstanding
capital stock of Target (the "Cash Election
-------------
Consideration"), and (c) Target will expressly
-------------
assume all obligations of the Borrower under the
Credit Facilities. The Merger, the financing of the
Cash Election Consideration, the Refinancing as
contemplated by the Merger Agreement and the other
financing contemplated by the Commitment Letter and
this Term Sheet are referred to collectively as the
"Transaction".
-----------
The Credit Facilities will be reduced in the event
the shareholders of Target do not elect to receive
cash for the entire 50% of the outstanding capital
stock of Target. In such event, the reduced amount
of the Cash Election Consideration from that
otherwise payable if such election had been made in
full shall be applied to reduce first, the amount
-----
of the Term A Facility and, second, the amount of
------
the Revolving Facility (but not by more than
$25,000,000).
The Transaction will be consummated such that the
debt outstanding under the Credit Agreement
immediately following such consummation does not
exceed the lesser of $275,000,000 and an amount
equal to three times the combined EBITDA of the
Borrower and the Target for the twelve month period
ending on the last day of the fiscal quarter ending
prior to the Funding Date. The Transaction will be
accomplished as set forth in the Merger Agreement
(including the schedules thereto) previously
delivered to the Agents (the "Merger Agreement").
----------------
Revolving Facility: Pursuant to the Revolving Facility, Revolving Loans
- ------------------ may be borrowed, prepaid and reborrowed by the
Borrower from time to time prior to the Revolving
Facility Commitment Termination Date (as set forth
below).
Revolving Facility $225,000,000, subject to reduction as set
<PAGE>
Commitment Amount: forth above.
- -----------------
Foreign Currency: Up to an amount to be agreed upon of the Revolving
- ---------------- Facility Commitment may be outstanding at any time
in foreign currencies acceptable to the Agents (but
which shall include [Belgian Francs, Deutsche
Marks, Dutch Guilders, French Francs, Italian Lira,
British Pounds and the Euro]).
Purpose: The proceeds of Revolving Loans shall be used to
- ------- finance the Cash Election Consideration and the
Refinancing, to provide for working capital and
general corporate purposes and to finance in part
the fees and expenses arising from the Transaction
(which shall not exceed $15,000,000).
Revolving Facility The fifth anniversary of the Funding Date.
Commitment
Termination Date:
- ----------------
Letter of Credit Outstanding Letters of Credit and related
Sub-Facility Availability: reimbursement obligations may not exceed
- ------------------------- $10,000,000. Each issuance of a Letter of Credit
will constitute usage under the Revolving Facility
and will reduce availability of Revolving Loans
and, if necessary, Swing Line Loans (as defined
below) dollar for dollar. Letters of Credit must
expire on the earlier of (i) one year from the date
of issuance and (ii) the Revolving Facility
Commitment Termination Date.
Swing Line $10,000,000, which will be available for swing line
Facility: advances ("Swing Line Loans") to be made to the
- -------- ----------------
Borrower by PNC. Swing Line Loans will constitute
usage under the Revolving Facility (except for
purposes of computing the Commitment Fee, as
defined below) and will reduce availability of
Revolving Loans and, if necessary, Letters of
Credit, dollar for dollar.
Term A Facility: The Term A Facility will be made available in a
- --------------- single borrowing to occur on the Funding Date to
the Borrower pursuant to which non-revolving loans
("Term A Loans") will be made. Once repaid, Term A
------------
Loans
<PAGE>
cannot be reborrowed.
Term A Facility $100,000,000, subject to reduction as set forth
Commitment Amount: above.
- -----------------
Amortization of Commencing on the last day of the first full fiscal
the Term A quarter after the Funding Date (but not later than
Facility: September 30, 2000), the Term A Loans will amortize
- -------- each year in equal quarterly installments (with the
remaining outstanding principal amount of all Term
A Loans being payable on the Final Maturity of Term
A Loans described below) in the following aggregate
percentages of the initial principal amount of the
Term A Loans for each such year set forth below:
Annual
Year Percentage of Initial
---- ---------------------
Principal Amount
----------------
1 10%
2 15%
3 20%
4 25%
5 30%
Final Maturity for The fifth anniversary of the Funding Date.
All Term A Loans:
- ----------------
III. COMMON TERMS APPLICABLE TO ALL FACILITIES
-----------------------------------------
<PAGE>
Interest Rate: At the Borrower's option, the Term A Loans and the
- ------------- Revolving Loans will bear interest at either PNC's
(i) alternate base rate or (ii) reserve-adjusted
LIBO rate, plus, in each case, the applicable
margin (the "Applicable Margin") described herein.
-----------------
For the first six months following the Funding Date
(regardless of the Total Debt to EBITDA ratio
(which shall be defined in a manner acceptable to
the Agents and the Borrower)) the Applicable Margin
shall be at least 1.50% in the case of LIBO rate
Loans and 0.5% in the case of alternate base rate
Loans. Thereafter, the Applicable Margin will be
subject to performance based pricing based on the
following:
Applicable Margin
-----------------
Base Rate
Leverage Ratio/1/ LIBOR Loans Loans
greater than or 1.75% 0.75%
equal to 3.00x
greater than or
equal to 2.50x
but less than 3.00x 1.50% 0.50%
less than 2.50x 1.25% 0.25%
Swing Line Loans will bear interest at either (a)
PNC's alternate base rate plus the Applicable
Margin shown in the above paragraph for Base Rate
Loans or (b) an interest rate mutually agreed upon
by PNC and the Borrower.
______________________
/1/ For purposes of this Term Sheet, the "Leverage Ratio, is the ratio of the
total debt to EBITDA.
<PAGE>
Interest Payment Dates: Interest periods for LIBO rate Loans shall be, at
- ---------------------- the Borrower's option, one, two, three or six
months. Interest on LIBO rate Loans shall be
payable on the last business day of the applicable
interest period for such Loans and, if earlier, the
third month anniversary of the commencement of such
interest period. Interest on alternate base rate
Loans shall be payable quarterly in arrears.
Letter of Credit A per annum fee payable to the Lenders with a
Fees and Payment Dates: commitment to make Revolving Loans in an amount
- ---------------------- equal to the Applicable Margin for Revolving Loans
which are maintained as LIBO rate Loans will accrue
on the daily average undrawn portion of all
outstanding Letters of Credit, payable quarterly in
arrears.
Optional Prepayments: Outstanding Loans are voluntarily payable without
- -------------------- penalty; provided, however, that LIBO rate breakage
-------- -------
costs, if any, shall be for the account of the
Borrower.
Mandatory Prepayments: Prepayments shall be required (subject to baskets
- --------------------- and customary exceptions to be agreed upon by the
Agents and the Borrower, in percentages to be
agreed upon by the Agents and the Borrower) with
the net cash proceeds of asset sales. Such
prepayments shall be applied, first, to the Term A
-----
Loans (pro rata to the remaining amortization
--- ----
payments of the Term A Loans), and then to the
repayment of the outstanding principal amount under
the Revolving Facility (with a permanent reduction
in the Commitment Amount).
Ticking Fee: Commencing on the Signing Date, a non-refundable
- ----------- per annum Facility Fee payable on the committed
amount of the Credit Facilities payable on the
Funding Date will accrue at the rate of (a) from
the Signing Date to March 1, 2000, 0.25% per annum
and (b) from and after March 1, 2000 to the Funding
Date, 0.375% per annum.
<PAGE>
Commitment Fee: Commencing on the Funding Date, a non-refundable
- -------------- per annum fee (the "Commitment Fee") will accrue on
---------- ---
the daily average unused portion of the Revolving
Credit Facility commitments (whether or not then
available), payable quarterly in arrears and on the
final maturity of the Revolving Facility (whether
by stated maturity or otherwise).
For the first six months following the Funding Date
(regardless of the Total Debt to EBITDA ratio
(which shall be defined in a manner acceptable to
the Agents and the Borrower) the Commitment Fee
shall accrue at the rate of 0.375% per annum.
Thereafter, the applicable Commitment Fee will be
subject to performance based pricing based on the
following:
Commitment Fee
--------------
Leverage Ratio Fee
greater than or 0.375%
equal to 3.00x
greater than or
equal to 2.50x
but less than 3.00x 0.375%
less than 2.50x 0.250%
Security: The Credit Facilities will be secured by a first-
- -------- priority perfected lien on all the capital stock of
each of the Borrower's direct and indirect
subsidiaries; provided, however, that not more than
-------- -------
65% of the equity interests of non-U.S.
subsidiaries will be required to be pledged as
security in the event that a security interest in
such pledge of a greater percentage of equity would
result in material increased tax or similar
liabilities for the Borrower and its subsidiaries
on a consolidated basis.
Guarantees: To be delivered by each Guarantor.
- ----------
<PAGE>
Conditions Precedent Customary for the type of transaction proposed
to Initial Extensions of and others to be reasonably specified by the
Credit: Agents, including, without limitation, the
- ------ following:
1. The negotiation, execution and delivery of
satisfactory credit, guarantee, pledge and
other related documentation embodying the
structure, terms and conditions contained
herein.
2. Review and satisfaction with (i) the final
structure of the Transaction (it being
understood that the structure contemplated by
the Merger Agreement is satisfactory) and (ii)
the terms and provisions of all documents,
agreements and contracts related to the
Transaction.
3. The Lenders shall have received interim
unaudited financial statements for the Target
and the Borrower and its subsidiaries for the
most recently completed full fiscal quarter
ended at least 45 days prior to the date a Loan
is made.
4. The Agents' receipt of the Borrower's and the
Target's audited financial statements for the
last two years (receipt of which is hereby
acknowledged) and the absence of any material
adverse change in the business, assets,
liabilities, financial condition, or results of
operations of the Target, the Borrower and
their subsidiaries taken as a whole since
December 31, 1998.
5. Receipt of closing certificates, resolutions,
solvency certificates, opinions of counsel,
etc. customary for the type of transaction
proposed and in each case reasonably
satisfactory in form and substance to the Joint
Lead Arrangers.
6. The Lenders, Agents and Joint Lead Arrangers
shall have received all fees and expenses
required to be paid on or before the Funding
Date.
<PAGE>
7. All governmental (including Internal Revenue
Service) and third party approvals and rulings
(or modifications of rulings) necessary in
connection with the Transaction, the financing
contemplated hereby and the continuing
operations of the Borrower and Target and their
respective subsidiaries shall have been
obtained and be in full force and effect, and
all applicable waiting periods shall have
expired without any action being taken or
threatened by any competent authority which
would restrain, prevent or otherwise impose
adverse conditions on the Transaction or the
financing thereof.
8. Evidence satisfactory to the Agents that all
funded debt of the Target, the Borrower and
their respective subsidiaries shall be repaid
(including with proceeds of Loans) on the
making of the initial Loans, all commitments
under credit facilities to which the Borrower
or the Target or their respective its
subsidiaries are party have been terminated and
all liens securing any such debt or commitments
have been released (except with respect to
certain credit facilities of foreign
subsidiaries of the Borrower and the Target
securing obligations not in excess of an amount
to be agreed upon).
9. The absence of any pending or threatened
litigation, proceedings or investigations (a)
which contests the Merger, the Credit
Facilities or any other aspect of the
transactions contemplated hereby or (b) which
could reasonably be expected to have a material
adverse effect on the business, assets,
liabilities, financial condition, or results of
operations of the Target, the Borrower and
their subsidiaries taken as a whole.
<PAGE>
10. A pro-forma opening consolidated balance sheet
---------
of the Target and all of its subsidiaries as
of the last day of the month prior to the
Funding Date, giving effect to the Transaction
and reflecting the existing and proposed legal
and capital structure (both debt and equity)
which legal and capital structure shall be in
all material respects the same as that
previously disclosed to the Agents.
11. The Transaction (including the Merger and the
Refinancing) shall have been consummated on
the terms set forth in the Merger Agreement
documents, such that the debt outstanding
under the Credit Agreement immediately
following such consummation does not exceed
the lesser of $275,000,000 and an amount equal
to three times the combined EBITDA of the
Borrower and the Target for the twelve month
period ending on the last day of the fiscal
quarter ending prior to the Funding Date.
12. The Lenders shall have received first priority
(subject to customary exceptions agreed to by
the Agents) perfected liens and guarantees, as
set forth above under the captions "Security"
and "Guarantees", respectively, in each case
to the satisfaction of the Agents.
13. Target shall have expressly assumed the
obligations of the Borrower under the Credit
Documentation.
Additional Conditions The making of each Loan and issuance of each
Precedent: Letter of Credit will be conditioned upon (i) all
- ---------
representations in the Credit Documentation being
true and correct in all material respects and (ii)
there being no event of default or condition which,
with the giving of notice or passage of time (or
both), would constitute an event of default.
Representations and Customary for the type of transaction proposed
Warranties: and others to be reasonably specified by the
- ----------
Agents, including as to "Year 2000 Compliance"
issues.
<PAGE>
Affirmative Customary for the type of transaction proposed
Covenants: and others to be reasonably specified by the Agents
- ---------
(to be applicable to the Borrower and its
subsidiaries), including, without limitation, as
follows:
1. Delivery of annual audited consolidated
financial statements, together with an audit
opinion and no default and compliance
certificate of the chief financial officer of
the Borrower.
2. Delivery of quarterly unaudited consolidated
financial statements, together with a no
default and compliance certificate of the chief
financial officer of the Borrower.
Negative Covenants: Customary for the type of transaction proposed
- ------------------
and others to be reasonably specified by the Agents
(to be applicable to the Borrower and its
subsidiaries), including, without limitation, as
follows (with basket amounts acceptable to the
Agents and the Borrower to be negotiated):
1. Restricting the incurrence of additional debt,
sale leasebacks, contingent liabilities and
foreign subsidiary indebtedness.
2. Restricting the making of dividends or similar
distributions (including direct or indirect
redemptions of capital stock).
3. Restricting the incurrence or sufferance of
liens or other encumbrances.
4. Restricting the sale, lease or transfer of
assets or similar transfers, other than in the
ordinary course of business.
5. Restricting the making of investments or
acquisitions (in a single transaction or in a
series of related transactions).
6. Restricting mergers, consolidations and similar
combinations and limitations on changes in
lines of business.
<PAGE>
7. Restrictions on transactions with affiliates.
8. Restrictions on negative pledges.
9. Restricting the refinancing, defeasance,
repurchase or prepayment of subordinated debt.
Financial The financial covenants set forth below, with,
Covenants: other than as set forth herein, the definitions and
- ---------
applicable levels and ratios to be negotiated:
1. Maximum Total Debt/EBITDA (with defined terms
to be agreed upon by the Borrower and the Joint
Lead Arrangers) shall not exceed at any time
3.25 to 1.00 prior to December 30, 2000 and
3.00 to 1.00 at any time thereafter.
2. Minimum Fixed Charge Coverage (the quotient of
(x) EBITDA less capital expenditures divided by
(y) the sum of debt service, plus cash taxes
plus Restricted Payments, with defined terms
and levels to be agreed upon by the Borrower
and the Joint Lead Arrangers).
3. Minimum Net Worth (with defined terms and
levels to be agreed upon by the Borrower and
the Agents).
The financial covenant levels set forth above will
be adjusted in a manner acceptable to the Borrower
and the Agents in the event the shareholders of
Target do not elect to receive cash for the 50% of
the outstanding capital stock of Target.
Covenants The covenants will be deemed amended to
Generally: incorporate terms and conditions of any financial
- ---------
covenants in any other agreement for borrowed money
which are more restrictive than those found in the
Credit Documentation.
<PAGE>
Events of Default: Customary for the type of transaction proposed
- -----------------
and others to be reasonably specified by the
Agents, including, without limitation, (i) a cross
default and cross acceleration to other material
indebtedness of the Borrower and its subsidiaries
or any Guarantor, (ii) default in the event of
asserted or actual invalidity of guarantees,
security documents or subordination provisions,
(iii) material adverse change in the Borrower or
Target which makes it reasonably likely that the
Borrower will be unable to comply with financial
covenants contained in the Credit Documentation,
and (iv) a change of control of the Borrower (to be
defined in a manner satisfactory to the Agents and
the Borrower).
Miscellaneous: Customary provisions to be included, together
- -------------
with others to be reasonably specified by the
Agents, including, without limitation, the
following:
1. Customary indemnity and capital adequacy
provisions, including but not limited to
compensation in respect of taxes (including
gross-up provisions for withholding taxes) and
decreased profitability resulting from U.S. or
foreign capital adequacy requirements,
guidelines or policies or their interpretation
or application, and any other customary yield
and increased costs protection, currency
provisions and judgment currency provisions
deemed necessary by the Lenders to provide
customary protection.
<PAGE>
2. The Lenders will be permitted to assign (in
minimum amounts to be agreed upon by PNC and
the Borrower) and participate Loans, notes and
commitments. Any assignments would be by
novation and, if to any person or entity other
than an affiliate of the assigning Lender,
would require the Agents' and the Borrower's
consent, not to be unreasonably withheld or
delayed. Participation shall be without
restrictions and participants will have the
same benefits as the Lenders with regard to
increased costs, capital adequacy, etc., and
provision of information on the Borrower;
provided, that the right of participants to
--------
vote on amendments, waivers, etc. will be
limited to certain, customary issues such as,
without limitation, extension of the final
scheduled maturity date of the Loans
participated in by such participant.
3. Indemnification of the Joint Lead Arrangers,
the Agents, each of the Lenders and each of
their respective affiliates, directors,
officers, agents and employees (collectively,
the "Indemnified Parties") from and against any
-------------------
losses, claims, damages, liabilities or other
expenses, as set forth in Annex II hereto.
--------
4. The Borrower shall pay all of the Agents'
reasonable fees and out-of-pocket expenses, as
set forth in Annex II hereto.
--------
5. Amendments and waivers of the Credit
Documentation will require the approval of
Lenders holding 51% or more of the Loans and
commitments, except that the consent of all the
Lenders shall be required with respect to
certain customary issues.
6. Waiver of jury trial.
7. New York governing law; consent to New York
jurisdiction; appointment of New York process
agent.
<PAGE>
Counsel to the Willkie Farr & Gallagher.
Joint Lead
Arrangers:
- ---------
This Term Sheet is intended as an outline only and does not purport to summarize
all the conditions, covenants, representations, warranties and other provisions
which would be contained in the definitive Credit Documentation. The Joint Lead
Arrangers' commitment will be subject to negotiation and execution of definitive
Credit Documentation in form and substance satisfactory to the Agents, their
legal counsel, and the Lenders.
<PAGE>
ANNEX II
INDEMNIFICATION PROVISIONS
--------------------------
Unless otherwise defined, terms used herein shall have the meanings
assigned thereto in the Commitment Letter (the "Commitment Letter") and term
-----------------
sheet (the "Term Sheet") to which this Annex II is attached.
---------- --------
The Borrower (the "Indemnitor") shall pay all of the Agents'
----------
reasonable out-of-pocket expenses (including all out-of-pocket costs and
expenses arising in connection with the syndication of the Credit Facilities and
any due diligence investigation performed by the Agents, and the reasonable fees
and expenses of Willkie Farr & Gallagher, special counsel to the Agents, and any
local or foreign counsel retained by the Agents) arising in connection with the
negotiation, preparation, execution, delivery and administration of the
Commitment Letter, the Term Sheet, the Fee Letter and the definitive Credit
Documentation, and the Indemnitor shall be obligated to pay such fees, costs and
expenses whether or not definitive Credit Documentation is executed or delivered
or the Transaction is consummated.
In addition, the Indemnitor hereby indemnifies and holds harmless all
Indemnified Parties (as defined below) from and against all Liabilities (as
defined below). "Indemnified Party" shall mean each Agent, each Joint Lead
-----------------
Arranger, each Lender, each affiliate of any of the foregoing and the respective
directors, officers, agents and employees of each of the foregoing, and each
other person controlling any of the foregoing within the meaning of either
Section 15 of the Securities Act of 1933, as amended, or Section 20 of the
Securities Exchange Act of 1934, as amended. "Liabilities" shall mean any and
-----------
all losses, claims, damages, liabilities or other costs or expenses to which an
Indemnified Party may become subject which arise out of or relate to or result
from any transaction, action or proceeding to or connected with the transaction
described in the Commitment Letter, Fee Letter or Term Sheet (except to the
extent arising from the gross negligence or willful misconduct of such
Indemnified Party). In addition to the foregoing, the Indemnitor agrees to
reimburse each Indemnified Party for all legal or other expenses incurred in
connection with investigating, defending or participating in any action or other
proceeding relating to any Liabilities (whether or not such Indemnified Party is
a party to any such action or proceeding).
