1
Exhibit 4
May 6, 1999
Xxxxxx X. Xxxx
Xxxxx X. Xxxx
The Xxxxxx Xxxxxxx Trust, dated 4/11/69
c/o Instron Corporation
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Gentlemen:
Reference is hereby made to the Agreement and Plan of Merger
(the "Merger Agreement"), dated as of May 6, 1999, among Kirtland Capital
Partners III L.P., an Ohio limited partnership ("KCP"), ISN Acquisition
Corporation, a Massachusetts corporation ("MergerCo"), and Instron Corporation,
a Massachusetts corporation (the "Company"). Capitalized terms used and not
defined herein shall have the respective meanings ascribed to them in the Merger
Agreement.
1. CONCERNING ROLLOVER. This letter agreement (this
"Agreement") memorializes our mutual understanding and agreement relating to
your willingness to maintain an equity ownership position in the Company
following the completion of the Merger. To this end, you hereby (i) agree that,
from and after the date hereof and upon the request of the Company or KCP, you
will take such actions as may be reasonably necessary to exchange an aggregate
of, subject to Section 2, 160,000 shares of Common Stock owned by you (comprised
of 60,000 shares by Xx. Xxxx, 20,000 shares by Xxx. Xxxx and 80,000 shares by
The Xxxxxx Xxxxxxx Trust, dated 4/11/69 (the "Xxxxxxx Trust")) for an aggregate
of 32,000 shares of Series B Stock (comprised of 12,000 shares by Xx. Xxxx,
4,000 by Xxx. Xxxx and 16,000 shares by the Xxxxxxx Trust) pursuant to customary
documentation reasonably acceptable to KCP, the Company and you, and (ii)
consent to the conversion at the Effective Time of all such shares of Series B
Stock into a like number of shares of Surviving Corporation Common Stock
pursuant to customary documentation reasonably acceptable to KCP, the Company
and you. It is the intention of the parties hereto that the rollover of stock
described above be structured on a tax-free basis, and the parties agree to use
their respective reasonable best efforts to attempt to give effect to such
intentions. Simultaneously with the execution and delivery hereof, KCP is
entering into a letter agreement with certain members of management of the
Company (the "Management Stockholders") providing for their continued
participation in the equity ownership of the Company as set forth in Exhibit A
attached hereto. A fully executed copy of such letter agreement is being
delivered to you simultaneously herewith. KCP hereby agrees that, subject to the
satisfaction of the conditions set forth in the Merger Agreement, at the
Effective Time: (i) it will and will cause its affiliates to provide all of the
equity capital necessary to consummate the Transactions other than the equity
capital (a) that you will be providing as described above and (b) that will be
provided by the Management Stockholders as set forth on Exhibit A attached
hereto, (ii) it will and will cause its affiliates to provide such equity
capital by means of the issuance to KCP and its affiliates
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Xxxxx X. Xxxx
The Xxxxxx Xxxxxxx Trust
May 6, 1999
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of shares of Surviving Corporation Common Stock, and (iii) the purchase price
for each such share purchased by KCP and its affiliates shall be $110 payable
solely in cash. At the Effective Time, you agree to execute and deliver the
Stockholders Agreement substantially in the form attached hereto as Exhibit B.
2. CERTAIN AGREEMENTS. At the Effective Time, each of you, the
Company and KCP will execute and deliver (and KCP will cause each of its
affiliates who are stockholders of the Company to execute and deliver) a
registration rights agreement, in customary form, providing "piggyback"
registration rights to you, subject to customary "cutbacks," as recommended by
the underwriters participating in any particular underwritten equity offering.
Following the date hereof, KCP and its independent accountants will consider
alternative strategies proposed by you and/or your representatives to reduce by
up to an aggregate of 50,000 shares (18,750, 6,250 and 25,000 for each of you,
respectively) the number of shares of Common Stock to be exchanged by you as
contemplated by Section 1 hereof (it being understood that, in considering any
such strategy, KCP will use its reasonable best efforts to assist in the
achievement of this objective but that KCP need not agree to any such strategy
unless KCP, its independent accountants and the Company are able to attain at
least the same level of comfort that the Merger will receive recapitalization
accounting treatment utilizing any such strategy as has been determined by KCP
and its independent accountants based on the rollover of an aggregate of 160,000
shares (60,000, 20,000 and 80,000 from each of you, respectively) of Common
Stock as contemplated in Section 1 hereof). If KCP, its independent accountants
and the Company are able to attain at least the same level of comfort as set
forth in the previous sentence to the satisfaction of each of them, then KCP and
the Company will use their reasonable best efforts to implement such strategy
and reduce the number of shares to be exchanged by you as contemplated by
Section 1 to the extent set forth in this Section 2. In the event that (i) you
do not propose any alternative strategies, (ii) your proposed alternative
strategy or strategies do not provide each of KCP, its independent accountants
and the Company with the same level of comfort as set forth above or (iii) KCP
and the Company cannot implement your proposed alternative strategy or
strategies in accordance with the previous sentence, you will participate in the
exchange as contemplated by Section 1 hereof to the full extent of the 160,000
shares (60,000, 20,000 and 80,000 from each of you, respectively) set forth
therein. You should understand that, while KCP and its independent accountants
will use their reasonable best efforts as set forth above, no assurance can be
given that such a reduction can be achieved. Each of you hereby acknowledge that
KCP is entering into the Merger Agreement on the assumption that the Merger will
qualify as a recapitalization for accounting purposes and would not have entered
into the Merger Agreement if this objective could not have been achieved.
3. CERTAIN REPRESENTATIONS BY YOU. Each of you hereby
represent and warrant as follows:
(a) You have the legal capacity or (as
applicable) power and authority to enter into and perform all of your
obligations under this Agreement. The execution, delivery and
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The Xxxxxx Xxxxxxx Trust
May 6, 1999
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performance of this Agreement by you will not violate any other agreement to
which you are a party. This Agreement has been duly and validly executed and
delivered by you and constitutes a valid and binding agreement, enforceable
against you in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other similar
laws and principles of equity affecting creditors' rights and remedies
generally. There is no beneficiary or holder of a voting trust certificate or
other interest in any trust of which you are a trustee whose consent is required
for the execution and delivery of this Agreement or the consummation by you of
the transactions contemplated hereby.
(b) (i) Except for any filings under federal
and state securities laws and the filings referred to in Article VII of the
Merger Agreement, no filing with, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution of this
Agreement by you and the consummation by you of the transactions contemplated
hereby and (ii) none of the execution and delivery of this Agreement by you, the
consummation by you of the transactions contemplated hereby or compliance by you
with any of the provisions hereof (A) results in a violation or breach of, or
constitutes (with or without notice or lapse of time or both) a default (or
gives rise to any third-party right of termination, cancellation, material
modification or acceleration) under, any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which you are a party or by which you or any of your
properties or assets may be bound, or (B) violates any order, writ, injunction,
decree, judgment, statute, rule or regulation applicable to you or any of your
properties or assets.
(c) You understand and acknowledge that KCP is
entering into, and causing MergerCo to enter into, the Merger Agreement in
reliance upon your execution and delivery of this Agreement.
(d) You are an "accredited investor" within the
meaning of Regulation D promulgated under the Securities Act of 1933, as
amended.
4. CERTAIN REPRESENTATIONS BY KCP. KCP hereby represents and
warrants to you as follows:
(a) KCP has the power and authority to enter
into and perform all of its obligations under this Agreement. The execution,
delivery and performance of this Agreement by KCP will not violate any other
agreement to which it is a party. This Agreement has been duly and validly
executed and delivered by KCP and constitutes a valid and binding agreement of
KCP, enforceable against KCP in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
other similar laws and principles of equity affecting creditors' rights and
remedies generally.
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Xxxxx X. Xxxx
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May 6, 1999
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(b) (i) Except for any filings under federal
and state securities laws and the filings referred to in Article VII of the
Merger Agreement, no filing with, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution of this
Agreement by KCP and the consummation by KCP of the transactions contemplated
hereby and (ii) none of the execution and delivery of this Agreement by KCP, the
consummation by KCP of the transactions contemplated hereby or compliance by KCP
with any of the provisions hereof (A) conflicts with or results in any breach of
any organizational documents applicable to KCP, (B) results in a violation or
breach of, or constitutes (with or without notice of lapse of time or both) a
default (or gives rise to any third-party right of termination, cancellation,
material modification or acceleration) under, any of the terms, conditions or
provisions of any note, loan agreement, bond, mortgage, indenture, license,
contract, commitment, arrangement, understanding, agreement or other instrument
or obligation of any kind to which KCP is a party or by which KCP or any of its
properties or assets may be bound, or (C) violates any order, writ, injunction,
decree, judgment, statute, rule or regulation applicable to KCP or any of its
properties or assets.
(c) KCP understands and acknowledges that you
are entering into this Agreement in reliance upon the execution and delivery of
the Merger Agreement by KCP.
5. FURTHER ASSURANCES. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further lawful action as may
be reasonably necessary or desirable to consummate and make effective, in the
most expeditious manner practicable, the transactions contemplated by this
Agreement, PROVIDED that the foregoing shall not require any party hereto to
waive or amend any of its rights under this Agreement or any of the exhibits,
together with the Voting Agreement, hereto.
6. TERMINATION. This Agreement shall terminate upon the
termination of the Merger Agreement in accordance with its terms or execution
and delivery of the Stockholders Agreement.
7. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement (including
the Exhibits hereto) constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all other prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof.
(b) BINDING AGREEMENT. This Agreement and the
obligations hereunder shall be binding upon the successors and, subject to
Section 7(c) below, the assigns of the parties hereto, including, without
limitation, your heirs, guardians, administrators or successors.
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Xxxxx X. Xxxx
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(c) ASSIGNMENT. This Agreement shall not be
assigned without the prior written consent of the other parties.
(d) AMENDMENTS, WAIVERS, ETC. This Agreement
may not be amended, changed, supplemented, waived or otherwise modified or
terminated, except upon the execution and delivery of a written agreement
executed by the parties hereto.
(e) 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.
(f) SPECIFIC PERFORMANCE. Each of the parties
hereto recognizes and acknowledges that a breach by it of any covenants or
agreements contained in this Agreement will cause the other party 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, the aggrieved party 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.
(g) REMEDIES CUMULATIVE. All rights, powers
and remedies provided under this Agreement or otherwise available in respect
hereof at law or in equity shall be cumulative and not alternative or exclusive,
and the exercise of any thereof by any party shall not preclude the simultaneous
or later exercise of any other such right, power or remedy by such party.
(h) NO WAIVER. The failure of any party hereto
to exercise any right, power or remedy provided under this Agreement or
otherwise available in respect hereof at law or in equity, or to insist upon
compliance by any other party hereto with its obligations hereunder, and any
custom or practice of the parties at variance with the terms hereof, shall not
constitute a waiver by such party of its right to exercise any such or other
right, power or remedy or to demand such compliance.
(i) NO THIRD PARTY BENEFICIARIES. This
Agreement is not intended to be for the benefit of, and shall not be enforceable
by, any person or entity who or which is not a party hereto.
(j) CHOICE OF LAW/CONSENT TO JURISDICTION. All
disputes, claims or controversies arising out of this Agreement, or the
negotiation, validity or performance of this
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Agreement, shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts without regard to its rules of conflict of laws.
Each of the parties hereto hereby irrevocably and unconditionally consents to
submit to the sole and exclusive jurisdiction of the courts of the Commonwealth
of Massachusetts and of the United States District Court for the District of
Massachusetts (the "Massachusetts Courts") for any litigation arising out of or
relating to this Agreement, or the negotiation, validity or performance of this
Agreement (and agrees not to commence any litigation relating thereto except in
such courts), waives any objection to the laying of venue of any such litigation
in the Massachusetts Courts and agrees not to plead or claim in any
Massachusetts Court that such litigation brought therein has been brought in any
inconvenient forum. Each of the parties hereto agrees, (a) to the extent such
party is not otherwise subject to service of process in the Commonwealth of
Massachusetts, to appoint and maintain an agent in the Commonwealth of
Massachusetts as such party's agent for acceptance of legal process, and (b)
that service of process may also be made on such party by prepaid certified mail
with a proof of mailing receipt validated by the United States Postal Service
constituting evidence of valid service. Service made pursuant to (a) or (b)
above shall have the same legal force and effect as if served upon such party
personally within the Commonwealth of Massachusetts. For purposes of
implementing the parties' agreement to appoint and maintain an agent for service
of process in the Commonwealth of Massachusetts, KCP does hereby appoint CT
Corporation, 0 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, as such agent.
(k) 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.
(l) COUNTERPARTS. This Agreement may be
executed in counterparts, each of which shall be deemed to be an original, but
all of which, taken together, shall constitute one and the same Agreement.
(m) NO AGREEMENT UNTIL EXECUTED. Irrespective
of negotiations among the parties or the exchanging of drafts of this Agreement,
this Agreement shall not constitute or be deemed to evidence a contract,
agreement, arrangement or understanding among the parties hereto unless and
until (i) the Board of Directors of the Company has approved, for purposes of
Chapter 110F of the Massachusetts General Laws and any applicable provision of
the Company's articles of organization, the terms of this Agreement, and (ii)
this Agreement is executed by the parties hereto.
(n) ATTORNEY'S FEES. KCP acknowledges that the
Company will be responsible for the reasonable fees and expenses of the Other
Stockholders' legal counsel in connection with the preparation and negotiation
of this Agreement and the agreements contemplated hereby up to an aggregate of
$40,000.
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The Xxxxxx Xxxxxxx Trust
May 6, 1999
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If the foregoing accurately sets forth our mutual
understanding and agreement, kindly sign this Agreement in the space provided
below.
Very truly yours,
KIRTLAND CAPITAL PARTNERS III L.P.
By: Kirtland Partners Ltd., its General
Partner
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
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The Xxxxxx Xxxxxxx Trust
May 6, 1999
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Accepted and Agreed this _____ day of May, 1999:
/s/ Xxxxxx X. Xxxx
-------------------------------------
Xxxxxx X. Xxxx
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
THE XXXXXX XXXXXXX TRUST - 4/11/69
By: /s/ Xxxxxx Xxxxxxx
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Trustee
By: /s/ Xxxxxx X. Xxxxxxx
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Trustee
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The Xxxxxx Xxxxxxx Trust
May 6, 1999
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INSTRON CORPORATION
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Treasurer
