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EXHIBIT (c)(3)
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 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
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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 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
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terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws and principles of
equity affecting creditors' rights and remedies generally.
(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.
(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
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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 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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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
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Accepted and Agreed this day of
May, 1999:
/s/ XXXXXX X. XXXX
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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
----------------------------
Trustee
By: /s/ XXXXXX X. XXXXXXX
----------------------------
Trustee
INSTRON CORPORATION
By: /s/ XXXX X. XXXXXXX
----------------------------
Name: Xxxx X. Xxxxxxx
Title: Treasurer
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EXHIBIT A
COMMON STOCK SURVIVING
OTHER TO BE SERIES B CORPORATION
STOCKHOLDER ROLLED OVER(1) STOCK(1) COMMON STOCK(1)
----------- -------------- -------- ---------------
Xxxxxx X. Xxxx....................................... 60,000 12,000 12,000
Xxxxx X. Xxxx........................................ 20,000 4,000 4,000
The Xxxxxx Xxxxxxx Trust............................. 80,000 16,000 16,000
---------------
(1) Subject to Section 2.
