-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SOLXT8Y4IH1rrz9mgdHA6UeO1Ut2a+oPlLy5ht9IjYqeketeIwZptT5k5NRCR4ky RWFlOyPI0wKvnNkhjZo/+Q== 0000928385-01-501177.txt : 20010622 0000928385-01-501177.hdr.sgml : 20010622 ACCESSION NUMBER: 0000928385-01-501177 CONFORMED SUBMISSION TYPE: SC TO-T PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20010621 GROUP MEMBERS: DANAHER CORP /DE/ GROUP MEMBERS: PHOENIX ACQUISITION CORP. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MICROTEST INC CENTRAL INDEX KEY: 0000891920 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 860485884 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T SEC ACT: SEC FILE NUMBER: 005-45391 FILM NUMBER: 1665018 BUSINESS ADDRESS: STREET 1: 4747 N 22ND STREET CITY: PHOENIX STATE: AZ ZIP: 85016 BUSINESS PHONE: 6029526400 MAIL ADDRESS: STREET 1: 4747 N 22ND STREET CITY: PHOENIX STATE: AZ ZIP: 85016 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DANAHER CORP /DE/ CENTRAL INDEX KEY: 0000313616 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 591995548 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T BUSINESS ADDRESS: STREET 1: 1250 24TH ST NW STREET 2: SUITE 800 CITY: WASHINGTON STATE: DC ZIP: 20037 BUSINESS PHONE: 2028280850 MAIL ADDRESS: STREET 1: 1250 24TH STREET NW STREET 2: SUITE 800 CITY: WASHINGTON STATE: DC ZIP: 20037 FORMER COMPANY: FORMER CONFORMED NAME: DMG INC DATE OF NAME CHANGE: 19850221 SC TO-T 1 dsctot.txt SC TO-T ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Schedule TO Tender Offer Statement under Section 14(d)(1) or 13(e)(1) of the Securities Exchange Act of 1934 Microtest, Inc. (Name of Subject Company) Phoenix Acquisition Corp. Danaher Corporation (Name of Filing Person-Offeror) Common Stock, Par Value $0.001 Per Share Preferred Share Purchase Rights (Title of Class of Securities) 594941106 (CUSIP Number of Class of Securities) Patrick W. Allender Executive Vice President, Chief Financial Officer and Secretary 2099 Pennsylvania Avenue, NW, 12th Floor Washington, D.C. 20006-1813 Telephone: (202) 828-0850 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons) Copy to: Mark A. Dewire, Esq. Wilmer, Cutler & Pickering 2445 M Street, NW Washington, D.C. 20037-1420 Telephone: (202) 663-6000 CALCULATION OF FILING FEE ================================================================================ Transaction Valuation* Amount of Filing Fee - -------------------------------------------------------------------------------- $81,852,194 $16,371 ================================================================================ * Based on the offer to purchase all of the outstanding shares of common stock of Microtest, Inc. at a purchase price of $8.15 cash per share, 8,576,540 shares issued and outstanding, and outstanding options with respect to 1,466,674 shares (including 34,672 shares reserved for issuance under the Microtest, Inc. Employee Stock Purchase Plan), in each case as of June 11, 2001. [_] Check box if any part of the fee is offset as provided by Rule 0- 11 (a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: None. Form or Registration No.: Not applicable. Filing Party: Not applicable. Date Filed: Not applicable. [_] Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: [x] third-party tender offer subject to Rule 14d-1. [_] issuer tender offer subject to Rule 13e-4. [_] going-private transaction subject to Rule 13e-3. [_] amendment to Schedule 13D under Rule l3d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: [_] ================================================================================ This Tender Offer Statement on Schedule TO is filed by Danaher Corporation, a Delaware corporation ("Danaher"), and Phoenix Acquisition Corp., a Delaware corporation and an indirect, wholly-owned subsidiary of Danaher (the "Purchaser"). This Schedule TO relates to the offer by the Purchaser to purchase all outstanding shares of common stock, par value $0.001 per share, including the associated preferred share purchase rights, (the "Shares"), of Microtest, Inc., a Delaware corporation ("Microtest") at $8.15 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 21, 2001 (the "Offer to Purchase") and in the related Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively, (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). The information set forth in the Offer to Purchase and in the related Letter of Transmittal is incorporated herein by reference with respect to Items 1 through 9 and 11 of this Schedule TO. The Agreement and Plan of Merger, dated as of June 12, 2001, among Microtest, Danaher and the Purchaser, a copy of which is attached hereto as Exhibit (d)(1), and the Confidentiality Agreement, dated February 25, 1999, by and between Danaher and Microtest, as amended May 22, 2001, a copy of which is attached hereto as Exhibit (d)(2), are each incorporated herein by reference with respect to Items 5 and 11 of this Schedule TO. Item 3. Identity and Background of Filing Person. None of Danaher, the Purchaser or, to the best knowledge of such corporations, any of the persons listed on Schedule I to the Offer to Purchase, has during the last five years (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. Item 10. Financial Statements of Certain Bidders. Not applicable. Item 12. Exhibits. (a)(1) Offer to Purchase, dated June 21, 2001. (a)(2) Form of Letter of Transmittal. (a)(3) Form of Notice of Guaranteed Delivery. (a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(6) Text of press release issued by Danaher dated June 13, 2001 (filed with the Securities and Exchange Commission under cover of Schedule TO-C by Danaher on June 13, 2001 and incorporated herein by reference). (a)(7) Text of press release issued by Fluke Networks, Inc. dated June 13, 2001 (filed with the Securities and Exchange Commission under cover of Schedule TO-C by Danaher on June 13, 2001 and incorporated herein by reference). (a)(8) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(9) Form of summary advertisement dated June 21, 2001. (d)(1) Agreement and Plan of Merger, dated June 12, 2001, among Danaher, the Purchaser and Microtest. (d)(2) Confidentiality Agreement, dated February 25, 1999, between Danaher and Microtest, as amended May 22, 2001. (g) None. (h) Not applicable. Item 13. Information Required by Schedule 13E-3. Not applicable. SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: June 21, 2001. PHOENIX ACQUISITION CORP. By: /s/ Christopher C. McMahon ---------------------------------------- Name: Christopher C. McMahon Title: Vice President and Secretary DANAHER CORPORATION By: /s/ Patrick W. Allender ---------------------------------------- Name: Patrick W. Allender Title: Executive Vice President, Chief Financial Officer and Secretary EXHIBIT INDEX (a)(1) Offer to Purchase, dated June 21, 2001. (a)(2) Form of Letter of Transmittal. (a)(3) Form of Notice of Guaranteed Delivery. (a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(6) Text of press release issued by Danaher dated June 13, 2001 (filed with the Securities and Exchange Commission under cover of Schedule TO-C by Danaher on June 13, 2001 and incorporated herein by reference). (a)(7) Text of press release issued by Fluke Networks, Inc. dated June 13, 2001 (filed with the Securities and Exchange Commission under cover of Schedule TO-C by Danaher on June 13, 2001 and incorporated herein by reference). (a)(8) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(9) Form of summary advertisement dated June 21, 2001. (d)(1) Agreement and Plan of Merger, dated June 12, 2001, among Danaher, the Purchaser and Microtest. (d)(2) Confidentiality Agreement, dated February 25, 1999, between Danaher and Microtest, as amended May 22, 2001. (g) None. (h) Not applicable. EX-99.A.1 2 dex99a1.txt OFFER TO PURCHASE DTD 21-JUN-01 Exhibit 99(a)(1) Offer to Purchase for Cash All Outstanding Shares of Common Stock (Including the Associated Preferred Share Purchase Rights) of Microtest, Inc. by Phoenix Acquisition Corp. an indirect, wholly-owned subsidiary of Danaher Corporation at $8.15 Net Per Share The offer and withdrawal rights will expire at 12:00 midnight, New York City time, on Thursday, July 19, 2001, unless the offer is extended. A summary of the principal terms of the offer appears on pages (ii) through (iv). You should read this entire document carefully before deciding whether to tender your shares. June 21, 2001 TABLE OF CONTENTS
Page ---- Summary of the Offer....................................................... ii Introduction............................................................... 1 1. Terms of the Offer.................................................... 2 2. Acceptance for Payment and Payment.................................... 5 3. Procedures for Accepting the Offer and Tendering Shares............... 6 4. Withdrawal Rights..................................................... 8 5. Material U.S. Federal Income Tax Consequences......................... 9 6. Price Range of the Shares; Dividends.................................. 10 7. Possible Effects of the Offer on the Market for the Shares; Nasdaq National Market Listing; Securities Exchange Act Registration; Margin Regulations.......................................................... 10 8. Information Concerning Microtest...................................... 12 9. Information Concerning Danaher and the Purchaser...................... 12 10. Background of the Offer; Contacts with Microtest...................... 13 11. Purpose of the Offer; the Merger Agreement; Change of Control Agreements; Confidentiality Agreement; Statutory Requirements; Appraisal Rights; Plans for Microtest; "Going Private" Transactions.. 15 12. Source and Amount of Funds............................................ 28 13. Dividends and Distributions........................................... 29 14. Conditions of the Offer............................................... 29 15. Legal Matters; Required Regulatory Approvals.......................... 31 16. Fees and Expenses..................................................... 33 17. Miscellaneous......................................................... 34
Schedule I--Directors and Executive Officers of Danaher and the Purchaser -i- SUMMARY OF THE OFFER Principal terms . Danaher Corporation ("Danaher"), through its indirect, wholly-owned subsidiary Phoenix Acquisition Corp. (the "Purchaser"), is offering to buy all outstanding shares of Microtest, Inc. ("Microtest") common stock for $8.15 per share, net to you in cash, upon the terms and subject to the conditions contained in this offer to purchase and in the related letter of transmittal. Tendering stockholders will not have to pay brokerage fees or commissions. Stockholders who hold their shares through a broker or bank should consult that institution as to whether it charges any service fees or commissions. . The offer is the first step in our plan to acquire all of the outstanding Microtest shares, as provided in our merger agreement with Microtest. If the offer is successful, we will acquire any remaining shares of Microtest common stock for $8.15 per share in cash in a later merger. If we acquire at least 90% of the outstanding shares, we intend to cause the merger to become effective without a meeting of the stockholders of Microtest in accordance with Section 253 of the General Corporation Law of the State of Delaware. The stockholders of Microtest will have appraisal rights in the merger. . The initial offering period of the offer will expire at 12:00 midnight, New York City time, on Thursday, July 19, 2001, unless we extend the offer. . If we decide to extend the offer, we will issue a press release giving the new expiration date no later than 9:00 a.m., New York City time, on the first business day after the previously scheduled expiration date of the offer. Microtest board recommendation The board of directors of Microtest unanimously: . determined that the merger agreement and each of the transactions contemplated thereby, including each of the offer and the merger, are advisable, fair to and in the best interests of Microtest and its stockholders, . approved the offer and the merger and adopted the merger agreement in accordance with the General Corporation Law of the State of Delaware, and . recommends that the stockholders of Microtest accept the offer and tender their shares pursuant to the offer. Conditions We are not required to complete the offer unless: . we receive U.S. federal antitrust clearance and approval from certain foreign antitrust authorities for the offer, and . at least a majority of the shares of common stock of Microtest outstanding on a fully diluted basis on the date of purchase are validly tendered and not withdrawn prior to the expiration of the offer. As used in this Offer to Purchase, "fully diluted basis" means the number of shares then outstanding, plus all shares issuable upon the conversion of any then outstanding convertible securities or upon the exercise of any then outstanding options, warrants or rights. Other conditions to the offer are described at pages 29 through 31. The offer is not conditioned on Danaher obtaining financing. -ii- Procedures for tendering If you wish to accept the offer, this is what you must do: . If you are a record holder (i.e., a stock certificate has been issued to you), you must complete and sign the enclosed letter of transmittal and send it with your stock certificate to the depositary for the offer or follow the procedures described in the offer for book-entry transfer. These materials must reach the depositary before the offer expires. Detailed instructions are contained in the letter of transmittal and on pages 6 through 8 of this document. . If you are a record holder but your stock certificate is not available or you cannot deliver it to the depositary before the offer expires, you may be able to tender your shares using the enclosed notice of guaranteed delivery. Please call our information agent, D.F. King & Co., Inc., toll-free at 800-207-2872 for assistance. See page 7 for further details. . If you hold your shares through a broker or bank, you should contact your broker or bank and give instructions that your Microtest shares be tendered. Withdrawal rights If, after tendering your shares in the offer, you decide that you do not want to accept the offer, you can withdraw your shares by so instructing the depositary in writing before the offer expires. If you tendered by giving instructions to a broker or bank, you must instruct the broker or bank to arrange for the withdrawal of your Microtest shares. See pages 8 and 9 for further details. Subsequent offering period . We may give stockholders who do not tender in the offer another opportunity to tender at the same price in a subsequent offering period. Although we do not currently intend to include a subsequent offering period, we reserve the right to do so. . Any subsequent offering period will begin on the day we announce that we have purchased shares in the offer and last for at least three business days. We may extend the subsequent offering period, but it will not last more than 20 business days in total. . There would be no withdrawal rights in any subsequent offering period. Recent Microtest trading prices; subsequent trading . The closing price for shares of Microtest common stock was: . $4.20 per share on June 12, 2001, the last trading day before we announced the merger agreement with Microtest, and . $7.98 per share on June 20, 2001, the last full trading day before the printing of these materials. . The trailing 20 trading day average closing price for shares of Microtest common stock was $3.585 per share as of June 12, 2001. Before deciding whether to tender, you should obtain a current market quotation for the shares. . If the offer is successful, we expect the shares of Microtest common stock to continue to be traded on the Nasdaq National Market until the time of the merger, although the trading volume may be below its pre-offer level. Following the merger, the shares will no longer trade on the Nasdaq National Market. -iii- Further information .If you have questions about the offer, you can call our Information Agent: D.F. King & Co., Inc. Banks and Brokers Call Collect: (212) 269-5550 All others call Toll Free: (800) 207-2872 -iv- To: All Holders of Shares of Common Stock of Microtest, Inc. INTRODUCTION The Purchaser, an indirect, wholly-owned subsidiary of Danaher, is offering to purchase all outstanding shares of common stock of Microtest, together with the associated preferred share purchase rights issued pursuant to the Rights Agreement, dated as of April 4, 2001, as amended through June 12, 2001, between Microtest and American Stock Transfer & Trust Company as Rights Agent (the "Rights Agreement"), at a purchase price of $8.15 per Share, net to the seller in cash, without interest, on the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which together constitute the "Offer"). The "Offer" includes any subsequent offering period, as described in Section 1. "Share" means a share of Microtest common stock, together with the associated preferred share purchase rights. You will not be required to pay brokerage fees or commissions or, except as described in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares in the Offer. Stockholders who hold their Shares through bankers or brokers should check with such institutions as to whether or not they charge any service fee. However, if you do not complete and sign the Substitute Form W-9 that is included in the Letter of Transmittal, you may be subject to a required backup U.S. federal income tax withholding of 31% of the gross proceeds payable to you. See Section 3. We will pay all charges and expenses of SunTrust Bank, as Depositary (the "Depositary"), and D.F. King & Co., Inc., as Information Agent (the "Information Agent"), incurred in connection with the Offer. See Section 16. The board of directors of Microtest has unanimously determined that the Merger Agreement (as defined herein) and each of the transactions contemplated thereby, including each of the Offer and the Merger (as defined herein), are advisable, fair to and in the best interests of Microtest and its stockholders, approved the Offer and the Merger and adopted the Merger Agreement in accordance with the General Corporation Law of the State of Delaware, and recommends that the stockholders of Microtest accept the Offer and tender their Shares pursuant to the Offer. We are not required to purchase any Shares unless at least a majority of the Shares outstanding on a fully diluted basis on the date of purchase are validly tendered and not withdrawn prior to the expiration of the Offer (the "Minimum Condition"). We reserve the right (subject to the applicable rules and regulations of the Securities and Exchange Commission (the "SEC") and to the prior written consent of Microtest), which we presently have no intention of exercising, to waive or reduce the Minimum Condition and to elect to purchase a smaller number of Shares. The Offer is also subject to certain other terms and conditions. See Sections 1, 14, and 15. We are making the Offer under the Agreement and Plan of Merger, dated as of June 12, 2001, by and among Microtest, Danaher and the Purchaser (the "Merger Agreement"). Following the consummation of the Offer and the satisfaction or waiver of certain conditions, the Purchaser will merge with and into Microtest (the "Merger"), with Microtest continuing as the surviving corporation. In the Merger, each outstanding Share (other than (a) any Shares held by Danaher, the Purchaser, any wholly-owned subsidiary of Danaher or the Purchaser, in the treasury of Microtest or by any wholly-owned subsidiary of Microtest, which Shares, by virtue of the Merger and without any action on the part of the holders of those Shares, will be canceled and retired and will cease to exist with no payment being made with respect thereto and (b) Shares held by a holder who has not voted in favor of the Merger and who has demanded appraisal for those Shares in accordance with the General Corporation Law of the State of Delaware (the "GCL")) will be converted into the right to receive $8.15, net in cash, or any higher price that may be paid in the Offer, without interest (the "Merger Consideration"). Section 11 contains a more detailed description of the Merger Agreement. Section 5 describes the principal U.S. federal income tax consequences of the sale of Shares in the Offer and the Merger. SG Cowen Securities Corporation, Microtest's financial advisor ("SG Cowen"), has delivered to the board of directors of Microtest a written opinion that, as of the date of the Merger Agreement and based on and subject to the assumptions and limitations described in the opinion, the consideration to be paid in the Offer and the Merger was fair, from a financial point of view, to the stockholders of Microtest. A copy of the opinion of SG Cowen, setting forth the assumptions made, procedures followed, other matters considered and limits on review by SG Cowen, is included with Microtest's Solicitation/Recommendation Statement on Schedule 14D-9, which is being mailed with this document. Stockholders are urged to read the opinion in its entirety for a description of the assumptions made, matters considered and limitations of the review undertaken by SG Cowen. Approval of the Merger requires the affirmative vote of holders of a majority of the outstanding Shares. As a result, if the Minimum Condition and the other conditions to the Offer are satisfied and the Offer is completed, we will own a sufficient number of Shares to ensure that the Merger will be approved by Microtest's stockholders. See Section 11. Microtest has advised us that, to its knowledge, all of its executive officers and directors intend to tender all Shares that they own of record or beneficially in the Offer (other than Shares that they have the right to purchase by exercising stock options and Shares, if any, that if tendered would cause them to incur liability under the short-swing profits provisions of the Securities Exchange Act of 1934, as amended (the "Securities Exchange Act")). Microtest has informed us that, as of the close of business on June 11, 2001, there were 8,576,540 Shares issued and outstanding, no shares of preferred stock outstanding and 1,466,674 Shares reserved for issuance upon the exercise of outstanding stock options and reserved for issuance under the Microtest, Inc. Employee Stock Purchase Plan. The Offer is conditioned upon the fulfillment of the conditions described in Section 14. The initial offering period of the Offer will expire at 12:00 midnight, New York City time, on Thursday, July 19, 2001, unless we extend it. This Offer to Purchase and the related Letter of Transmittal contain important information which you should read carefully before you make any decision with respect to the Offer. 1. Terms of the Offer. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), we will purchase all Shares validly tendered and not withdrawn in accordance with the procedures set forth in Section 3 on or prior to the Expiration Date. "Expiration Date" means 12:00 midnight, New York City time, on Thursday, July 19, 2001, unless we, in our sole discretion, or as may be required by the Merger Agreement, extend the period of time for which the initial offering period of the Offer is open, in which case "Expiration Date" will mean the time and date at which the initial offering period of the Offer, as so extended, will expire. Subject to the terms of the Merger Agreement (see Section 11 of this Offer to Purchase) and the applicable rules and regulations of the SEC, we expressly reserve the right, in our sole discretion, at any time or from time to time, to extend the Offer by giving oral or written notice of such extension to the Depositary and by making a public announcement as described below; provided, however, that in the event that (1) the required waiting period under U.S. federal antitrust laws or under material applicable foreign statutes or regulations, in each case to the extent such waiting period suspends the right to close the transactions contemplated by the Merger Agreement, have not expired or been terminated, we are required to extend the Offer until the earlier of such expiration or termination or September 30, 2001, or (2) the consummation of the Offer is prohibited or is materially limited pursuant to applicable laws or pending legal actions (as set forth in paragraphs (a) and (b) of Annex I to the Merger Agreement), we are required to extend the Expiration Date for additional periods until 2 the earliest of (A) five business days after the time such limitations no longer exist, (B) such time at which such limitations have become final and non-appealable, or (C) September 30, 2001. During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer and subject to your right to withdraw Shares. See Section 4. Subject to the applicable regulations of the SEC and the terms of the Merger Agreement, we also reserve the right, in our sole discretion, at any time or from time to time, to (a) delay purchase of or, regardless of whether we previously purchased any Shares, payment for any Shares pending receipt of any regulatory or governmental approvals specified in Section 15; (b) terminate the Offer (whether or not any Shares have previously been purchased) if any condition referred to in Section 14 has not been satisfied or upon the occurrence of any Event specified (and defined) in Section 14; and (c) except as set forth in the Merger Agreement, waive any condition or otherwise amend the Offer in any respect, in each case, by giving oral or written notice of the delay, termination, waiver or amendment to the Depositary and by making a public announcement as described below. We acknowledge (a) that Rule 14e-1(c) under the Securities Exchange Act requires us to pay the consideration offered or return the Shares tendered promptly after the termination or withdrawal of the Offer and (b) that we may not delay purchase of, or payment for (except as provided in clause (a) of the preceding sentence), any Shares upon the occurrence of any Event specified in Section 14 without extending the period of time during which the Offer is open. The rights we reserve in this paragraph are in addition to our rights pursuant to Section 14. Subject to the terms of the Merger Agreement, we have the right, in our sole discretion, to modify and make changes to the terms and conditions of the Offer, except that we have agreed that we will not, without the prior written consent of Microtest: . decrease the price per share to be paid pursuant to the Offer; . change the form of consideration payable in the Offer; . decrease the number of Shares sought to be purchased in the Offer; . impose additional conditions to the Offer; . waive the Minimum Condition; or . amend any other term of the Offer in any manner adverse to the holders of Shares. However, the Merger Agreement also provides that, without the consent of Microtest, we may (1) extend the Offer from time to time, if at the Expiration Date any of the conditions to the Offer are not satisfied or have not been waived by the Purchaser, (2) extend the Offer from time to time for up to a maximum of ten additional business days in the aggregate for all such extensions, if as of the Expiration Date all of the conditions to the Offer are satisfied and more than 70% but less than 90% of the outstanding Shares have been validly tendered and not withdrawn in the Offer; and (3) provide a subsequent offering period after the Expiration Date, in accordance with and subject to the requirements of Rule 14d-11 under the Securities Exchange Act. We have agreed that, upon the terms and subject to the conditions to the Offer, we will accept for payment and pay for, all Shares validly tendered and not withdrawn prior to the expiration of the Offer as promptly as practicable after expiration of the Offer. Any extension, delay, termination, waiver or amendment of the Offer or commencement or extension of a subsequent offering period will be followed as promptly as practicable by public announcement thereof, and such announcement in the case of an extension of the Offer or the commencement or extension of a subsequent offering period, will be made no later than 9:00 A.M., New York City time, on the next business day after the previously scheduled Expiration Date. Without limiting the manner in which we may choose to make any public announcement, subject to applicable law (including Rules 14d-4(d) and 14d-6(c) promulgated under the Securities Exchange Act, which require that material changes be promptly disseminated to holders of Shares), we will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a release to the Dow Jones News Service. 3 As of the date of this Offer to Purchase, the associated preferred share purchase rights do not trade separately. Accordingly, by tendering Shares, you are automatically tendering a similar number of preferred share purchase rights. If, however, the preferred share purchase rights detach and separate right certificates are issued, tendering shareholders will be required to deliver rights certificates with the shares. If we make a material change in the terms of the Offer, or if we waive a material condition to the Offer, we will extend the Offer and disseminate additional tender offer materials to the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 promulgated under the Securities Exchange Act. The minimum period during which a tender offer must remain open following material changes in the terms of the Offer, other than a change in price or a change in percentage of securities sought, depends upon the facts and circumstances, including the materiality of the changes. In the SEC's view, an offer should remain open for a minimum of five business days from the date the material change is first published, sent or given to stockholders, and, if material changes are made with respect to information that approaches the significance of price and the percentage of securities sought, a minimum of ten business days may be required to allow for adequate dissemination and investor response. With respect to a change in price or the percentage of the class of securities sought, a minimum ten-business-day period from the date of the change is generally required to allow for adequate dissemination to stockholders. Accordingly, if prior to the Expiration Date, we decrease the number of Shares being sought, or increase or decrease the consideration offered pursuant to the Offer, and if the Offer is scheduled to expire at any time earlier than the period ending on the tenth business day from the date that notice of the increase or decrease is first published, sent or given to holders of Shares, we will extend the Offer at least until the expiration of that period of ten business days. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or a U.S. federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. The Offer is conditioned upon, among other things, the satisfaction of the Minimum Condition. Consummation of the Offer is also conditioned upon expiration or termination of all waiting periods imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") and the other conditions set forth in Section 14. We reserve the right (but are not obligated), in accordance with applicable rules and regulations of the SEC and with the Merger Agreement, to waive any or all of those conditions, except for the Minimum Condition. If, by the Expiration Date, any or all of those conditions have not been satisfied, we may, in the exercise of our good faith judgment, elect to (a) extend the Offer and, subject to applicable withdrawal rights, retain all tendered Shares until the expiration of the Offer, as extended, subject to the terms of the Offer and the Merger Agreement; (b) waive all of the unsatisfied conditions (other than the Minimum Condition) and, subject to complying with applicable rules and regulations of the SEC, accept for payment all Shares so tendered; or (c) terminate the Offer and not accept for payment any Shares and return all tendered Shares to tendering stockholders. In the event that we waive any condition set forth in Section 14, the SEC may, if the waiver is deemed to constitute a material change to the information previously provided to the stockholders, require that the Offer remain open for an additional period of time and/or that we disseminate information concerning such waiver. Microtest has provided us with its stockholder lists and security position listings for the purpose of disseminating the Offer to holders of Shares. We will mail this Offer to Purchase, the related Letter of Transmittal and other relevant materials to record holders of Shares and we will furnish the materials to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the security holder lists or, if applicable, who are listed as participants in a clearing agency's security position listing, for forwarding to beneficial owners of Shares. Subsequent Offering Period. We reserve the right (but are not obligated) in accordance with the Merger Agreement and applicable rules and regulations of the SEC, to provide a subsequent offering period of three business days to 20 business days after the expiration of the initial offering period of the Offer and our purchase of Shares tendered in the Offer. A subsequent offering period would give stockholders who do not tender in the initial offering period of the Offer another opportunity to tender their Shares and receive the same 4 offer price. A subsequent offering period, if one is provided, is not an extension of the Offer, which already will have been completed. If we elect to provide a subsequent offering period, we will disseminate additional tender offer materials. During a subsequent offering period, stockholders will not have withdrawal rights, and we will promptly purchase and pay for any Shares tendered at the same price paid in the Offer. 2. Acceptance for Payment and Payment. Upon the terms and subject to the conditions of the Offer (including, if we extend or amend the Offer, the terms and conditions of the Offer as so extended or amended), we will purchase, by accepting for payment, and will pay for, all Shares validly tendered and not withdrawn (as permitted by Section 4) prior to the Expiration Date promptly after the later of (a) the Expiration Date and (b) the satisfaction or waiver of the conditions to the Offer set forth in Section 14. In addition, subject to applicable rules of the SEC, we reserve the right to delay acceptance for payment of, or payment for, Shares pending receipt of any regulatory or governmental approvals specified in Section 15. For information with respect to approvals that we are required to obtain prior to the completion of the Offer, including under the HSR Act and other laws and regulations, see Section 15. In all cases, we will pay for Shares purchased in the Offer only after timely receipt by the Depositary of (a) certificates representing the Shares ("Share Certificates") or timely confirmation (a "Book-Entry Confirmation") of the book-entry transfer of the Shares into the Depositary's account at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 3; (b) the appropriate Letter of Transmittal (or a facsimile), properly completed and duly executed, with any required signature guarantees or an Agent's Message (as defined below) in connection with a book-entry transfer; and (c) any other documents that the Letter of Transmittal requires. "Agent's Message" means a message transmitted by a Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which message states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares which are the subject of the Book-Entry Confirmation that the participant has received and agrees to be bound by the terms of the Letter of Transmittal and that we may enforce that agreement against the participant. For purposes of the Offer, we will be deemed to have accepted for payment, and purchased, Shares validly tendered and not withdrawn as, if and when we give oral or written notice to the Depositary of our acceptance of the Shares for payment pursuant to the Offer. In all cases, upon the terms and subject to the conditions of the Offer, payment for Shares purchased pursuant to the Offer will be made by deposit of the purchase price for the Shares with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from us and transmitting payment to validly tendering stockholders. Under no circumstances will we pay interest on the purchase price for Shares. If we do not purchase any tendered Shares pursuant to the Offer for any reason, or if you submit Share Certificates representing more Shares than you wish to tender, we will return Share Certificates representing unpurchased or untendered Shares, without expense to you (or, in the case of Shares delivered by book-entry transfer into the Depositary's account at a Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3, the Shares will be credited to an account maintained within the Book-Entry Transfer Facility), as promptly as practicable following the expiration, termination or withdrawal of the Offer. If, prior to the Expiration Date, we increase the price offered to holders of Shares in the Offer, we will pay the increased price to all holders of Shares that we purchase in the Offer, whether or not the Shares were tendered before the increase in price. We reserve the right, subject to the provisions of the Merger Agreement, to transfer or assign, in whole or from time to time in part, to one or more of our subsidiaries or affiliates the right to purchase all or any portion 5 of the Shares tendered in the Offer, but any such transfer or assignment will not relieve us of our obligations under the Offer or prejudice your rights to receive payment for Shares validly tendered and accepted for payment in the Offer. 3. Procedures for Accepting the Offer and Tendering Shares. Valid Tender of Shares. Except as set forth below, in order for you to tender Shares in the Offer, the Depositary must receive the Letter of Transmittal (or a facsimile), properly completed and signed, together with any required signature guarantees or an Agent's Message in connection with a book- entry delivery of Shares and any other documents that the Letter of Transmittal requires at one of its addresses set forth on the back cover of this Offer to Purchase on or prior to the Expiration Date or the expiration of the subsequent offering period, as the case may be, and either (a) you must deliver Share Certificates representing tendered Shares to the Depositary or you must cause your Shares to be tendered pursuant to the procedure for book-entry transfer set forth below and the Depositary must receive Book-Entry Confirmation, in each case on or prior to the Expiration Date or the expiration of the subsequent offering period, as the case may be, or (b) you must comply with the guaranteed delivery procedures set forth below. The method of delivery of Share Certificates, the Letter of Transmittal and all other required documents, including delivery through the Book-Entry Transfer Facility, is at your option and sole risk, and delivery will be considered made only when the Depositary actually receives the certificates. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, you should allow sufficient time to ensure timely delivery. Book-Entry Transfer. The Depositary will make a request to establish accounts with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the system of the Book-Entry Transfer Facility may make book-entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer the Shares into the Depositary's account at the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility's procedures. However, although Shares may be delivered through book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility, the Depositary must receive the Letter of Transmittal (or facsimile), properly completed and signed, with any required signature guarantees, or an Agent's Message in connection with a book-entry transfer, and any other required documents, at one of its addresses set forth on the back cover of this Offer to Purchase on or before the Expiration Date or the expiration of the subsequent offering period, as the case may be, or you must comply with the guaranteed delivery procedure set forth below. Required documents must be transmitted to and received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Delivery of documents to the Book-Entry Transfer Facility in accordance the Book-Entry Transfer Facility's procedures does not constitute delivery to the Depositary. Signature Guarantees. A bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP) or any other "eligible guarantor institution" (as such term is defined in Rule 17Ad-15 under the Securities Exchange Act) (an "Eligible Institution") must guarantee signatures on all Letters of Transmittal, unless the Shares tendered are tendered (a) by a registered holder of Shares who has not completed either the box labeled "Special Payment Instructions" or the box labeled "Special Delivery Instructions" on the Letter of Transmittal or (b) for the account of an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If the Share Certificates are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made to, or Share Certificates for unpurchased Shares are to be issued or 6 returned to, a person other than the registered holder, then the tendered Share Certificates must be endorsed or accompanied by appropriate stock powers, signed exactly as the name or names of the registered holder or holders appear on the Share Certificates, with the signatures on the Share Certificates or stock powers guaranteed by an Eligible Institution as provided in the Letter of Transmittal. See Instructions 1 and 5 of the Letter of Transmittal. If the Share Certificates are forwarded separately to the Depositary, a properly completed and duly executed Letter of Transmittal (or facsimile) must accompany each delivery of Share Certificates. Guaranteed Delivery. If you want to tender Shares in the Offer and your Share Certificates are not immediately available or time will not permit all required documents to reach the Depositary on or before the Expiration Date or the procedures for book-entry transfer cannot be completed on time, your Shares may nevertheless be tendered if you comply with all of the following guaranteed delivery procedures: (a) your tender is made by or through an Eligible Institution; (b) the Depositary receives, as described below, a properly completed and signed Notice of Guaranteed Delivery, substantially in the form made available by us, on or before the Expiration Date; and (c) the Depositary receives the Share Certificates (or a Book-Entry Confirmation) representing all tendered Shares, in proper form for transfer together with a properly completed and duly executed Letter of Transmittal (or facsimile), with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message) and any other documents required by the Letter of Transmittal within three Nasdaq National Market trading days after the date of execution of the Notice of Guaranteed Delivery. You may deliver the Notice of Guaranteed Delivery by hand or mail or by facsimile transmission to the Depositary. The Notice of Guaranteed Delivery must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery. Guaranteed delivery procedures are not available in the subsequent offering period. Notwithstanding any other provision of the Offer, we will pay for Shares only after timely receipt by the Depositary of Share Certificates for, or of Book-Entry Confirmation with respect to, the Shares, a properly completed and duly executed Letter of Transmittal (or facsimile thereof), together with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message) and any other documents required by the appropriate Letter of Transmittal. Accordingly, payment might not be made to all tendering stockholders at the same time, and will depend upon when the Depositary receives Share Certificates or Book-Entry Confirmation that the Shares have been transferred into the Depositary's account at a Book-Entry Transfer Facility. Backup U.S. Federal Income Tax Withholding. In order to avoid "backup withholding" of federal income tax on payments of cash pursuant to the Offer or the Merger, you must, unless an exemption applies, provide the Depositary with your correct taxpayer identification number ("TIN") on a Substitute Form W-9 included in the Letter of Transmittal and certify under penalties of perjury that such TIN is correct and that you are not subject to backup withholding. If you do not provide your correct TIN or you fail to provide the certifications described above, the IRS may impose a penalty on you and the payment of cash to you pursuant to the Offer or the Merger may be subject to backup withholding of 31% of the amount of such payment. All stockholders surrendering Shares pursuant to the Offer should complete and sign the main signature form and the Substitute Form W-9 included as part of the Letter of Transmittal to provide the information and certification necessary to avoid backup withholding (unless an applicable exemption exists and is proved in a manner satisfactory to us and the Depositary). Certain stockholders, including certain corporations and foreign individuals and entities, are not subject to these backup withholding and reporting requirements. In order for a foreign stockholder to qualify as an exempt recipient, however, the stockholder must submit, if eligible, an appropriate Form W-8 attesting to the stockholder's exempt status. See Instruction 9 of the Letter of Transmittal. 7 Appointment as Proxy. By executing the Letter of Transmittal, you irrevocably appoint our designees, and each of them, as your agents, attorneys- in-fact and proxies, with full power of substitution, in the manner set forth in the Letter of Transmittal, to the full extent of your rights with respect to the Shares that you tender and that we accept for payment and with respect to any and all other Shares and other securities or rights issued or issuable in respect of those Shares on or after the date of this Offer to Purchase. All such powers of attorney and proxies will be considered irrevocable and coupled with an interest in the tendered Shares. This appointment will be effective when we accept your Shares for payment in accordance with the terms of the Offer. Upon such acceptance for payment, all other powers of attorney and proxies given by you with respect to your Shares and such other securities or rights prior to such payment will be revoked, without further action, and no subsequent powers of attorney and proxies may be given by you (and, if given, will not be deemed effective). Our designees will, with respect to the Shares and such other securities and rights for which the appointment is effective, be empowered to exercise all your voting and other rights as they in their sole discretion may deem proper at any annual or special meeting of Microtest's stockholders, or any adjournment or postponement thereof, or by written consent in lieu of any such meeting or otherwise. In order for Shares to be deemed validly tendered, immediately upon the acceptance for payment of such Shares, we or our designee must be able to exercise full voting rights with respect to such Shares and other securities, including voting at any meeting of Microtest's stockholders. Determination of Validity. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by us, in our sole discretion, which determination will be final and binding on all parties. We reserve the absolute right to reject any or all tenders determined by us not to be in proper form or the acceptance of or payment for which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any of the conditions of the Offer or any defect or irregularity in any tender of Shares of any particular stockholder whether or not similar defects or irregularities are waived in the case of other stockholders. Our interpretation of the terms and conditions of the Offer will be final and binding. No tender of Shares will be deemed to have been validly made until all defects and irregularities with respect to the tender have been cured or waived by us. None of Danaher, the Purchaser or any of their respective affiliates or assigns, the Depositary, the Information Agent or any other person or entity will be under any duty to give any notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Our acceptance for payment of Shares tendered pursuant to any of the procedures described above will constitute a binding agreement between us and you upon the terms and subject to the conditions of the Offer. 4. Withdrawal Rights. Except as described in this Section 4, tenders of Shares made in the Offer are irrevocable. You may withdraw Shares that you have previously tendered in the Offer at any time on or before the Expiration Date and, unless theretofore accepted for payment as provided herein, may also be withdrawn at any time after August 19, 2001. You may not withdraw Shares during any subsequent offering period. See Section 1. If, for any reason, acceptance for payment of any Shares tendered in the Offer is delayed, or we are unable to accept for payment or pay for Shares tendered in the Offer, then, without prejudice to our rights set forth in this Offer to Purchase, the Depositary may, nevertheless, on our behalf, retain Shares that you have tendered, and you may not withdraw your Shares except to the extent that you are entitled to and duly exercise withdrawal rights as described in this Section 4. Any such delay will be by an extension of the Offer to the extent required by law. In order for your withdrawal to be effective, you must deliver a written or facsimile transmission notice of withdrawal to the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Any such notice of withdrawal must specify your name, the number of Shares that you want to withdraw, and (if Share Certificates have been tendered) the name of the registered holder of the Shares as shown on the Share 8 Certificate, if different from your name. If Share Certificates have been delivered or otherwise identified to the Depositary, then prior to the physical release of such Share Certificates, you must submit the serial numbers shown on the particular Share Certificates evidencing the Shares to be withdrawn and an Eligible Institution must guarantee the signature on the notice of withdrawal, except in the case of Shares tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedures for book- entry transfer set forth in Section 3, the notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares, in which case a notice of withdrawal will be effective if delivered to the Depositary by any method of delivery described in the first sentence of this paragraph. You may not rescind a withdrawal of Shares. Any Shares that you withdraw will be considered not validly tendered for purposes of the Offer, but you may tender your Shares again at any time before the Expiration Date by following any of the procedures described in Section 3. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by us, in our sole discretion, which determination will be final and binding. None of Danaher, the Purchaser or any of their respective affiliates or assigns, the Depositary, the Information Agent or any other person or entity will be under any duty to give any notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. 5. Material U.S. Federal Income Tax Consequences. Your receipt of cash for Shares in the Offer or the Merger will be a taxable transaction for U.S. federal income tax purposes, and may also be a taxable transaction under applicable state, local, foreign and other tax laws. For U.S. federal income tax purposes, if you sell or exchange your Shares in the Offer or the Merger, you will generally recognize gain or loss equal to the difference between the amount of cash received and your tax basis for the Shares that you sold or exchanged. That gain or loss will be capital gain or loss (assuming you hold your Shares as a capital asset). Any such capital gain or loss will be long term if, as of the date of sale or exchange, you have held such Shares for more than one year, or will be short term if, as of such date, you have held such Shares for one year or less. A stockholder's ability to use capital losses to offset ordinary income is limited. Under U.S. federal income tax backup withholding rules, unless an exemption applies, we will be required to withhold 31% of all payments to which you are entitled pursuant to the Offer or the Merger, unless you provide a taxpayer identification number and certify under penalties of perjury that the number is correct. If you are an individual, the taxpayer identification number is your social security number. If you are not an individual, the taxpayer identification number is your employer identification number. A stockholder that does not furnish its correct taxpayer identification number, or that does not otherwise establish a basis for an exemption from backup withholding, may be subject to a penalty imposed by the IRS. You should complete and sign the Substitute Form W-9, which will be included with the Letter of Transmittal to be returned to the Depositary, in order to provide the information and certification necessary to avoid backup withholding, unless an applicable exception exists and is proved in a manner satisfactory to the Depositary. Backup withholding is not an additional tax. Rather, the amount of the backup withholding can be credited against the U.S. federal income tax liability of the person subject to the backup withholding, provided that the required information is given to the IRS. The foregoing U.S. federal income tax discussion may not be applicable to certain types of stockholders, including stockholders who acquired Shares through the exercise of employee stock options or otherwise as compensation, individuals who are not citizens or residents of the United States, foreign corporations and other foreign entities, and entities that are otherwise subject to special tax treatment under the Internal Revenue Code, such as insurance companies, tax-exempt organizations, regulated investment companies and financial institutions. This discussion may also not be applicable to stockholders that are subject to special tax rules based on their own individual circumstances. 9 The U.S. federal income tax discussion set forth above is based upon laws, regulations, rulings and decisions now in effect, all of which are subject to change, possibly retroactively. You are urged to consult your own tax advisor with respect to the tax consequences of the Offer and the Merger, including the application and effect of state, local or foreign income or other tax laws. 6. Price Range of the Shares; Dividends. The Shares are traded on the Nasdaq National Market under the symbol "MTST". The following table sets forth, for the periods indicated, the reported high and low sale prices for the Shares on the Nasdaq National Market. MICROTEST, INC.
High Low ------ ----- Fiscal Year ended December 31, 1999 First Quarter..................................................... $ 4.13 $2.13 Second Quarter.................................................... 3.00 2.00 Third Quarter..................................................... 5.75 2.25 Fourth Quarter.................................................... 13.00 3.13 Fiscal Year ended December 31, 2000 First Quarter..................................................... $19.75 $7.25 Second Quarter.................................................... 14.75 5.67 Third Quarter..................................................... 12.50 4.03 Fourth Quarter.................................................... 4.94 2.38 Fiscal Year ending December 31, 2001 First Quarter..................................................... $ 5.00 $2.44 Second Quarter (through June 19, 2001)............................ 8.05 2.03
No cash dividends have been declared or paid on any of the Shares during the quarters indicated. In addition, under the terms of the Merger Agreement, Microtest is not permitted to declare or pay dividends with respect to any of the Shares prior to the time the Merger becomes effective (the "Effective Time"). See Section 13. On June 12, 2001, the last full day of trading prior to the announcement of the execution of the Merger Agreement, the reported closing price on the Nasdaq National Market for the Shares was $4.20 per Share. The trailing 20 trading day average closing price for the Shares was $3.585 per Share as of June 12, 2001. On June 20, 2001, the last full day of trading prior to the printing of this Offer to Purchase, the reported closing price on the Nasdaq National Market for the Shares was $7.98 per Share. Stockholders are urged to obtain current market quotations for the Shares. 7. Possible Effects of the Offer on the Market for the Shares; Nasdaq National Market Listing; Securities Exchange Act Registration; Margin Regulations. Possible Effects of the Offer on the Market for the Shares. The purchase of Shares pursuant to the Offer will reduce the number of Shares that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining Shares held by the public. The purchase of Shares pursuant to the Offer can also be expected to reduce the number of holders of Shares. We cannot predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for or marketability of the Shares or whether it would cause future market prices to be greater or less than the Offer price. 10 Stock Listing. Depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the requirements of the Nasdaq National Market for continued inclusion in the Nasdaq National Market. According to the Nasdaq National Market's published guidelines, the Shares would not meet the criteria for continued inclusion in the Nasdaq National Market if, among other things, (a) the number of publicly-held Shares were less than 750,000, (b) the aggregate market value of the publicly-held Shares were less than $5 million, or (c) there were less than two market makers for the Shares. If, as a result of the purchase of Shares pursuant to the Offer or otherwise, the Shares no longer meet these standards and the Shares were no longer quoted on the Nasdaq National Market, the market for the Shares could be adversely affected. If the Shares were no longer quoted on the Nasdaq National Market, it is possible that the Shares would continue to trade on another securities exchange or in the over-the-counter market and that price or other quotations would be reported by such exchange or through other sources. The extent of the public market for the Shares and the availability of such quotations would depend upon such factors as the number of stockholders and/or the aggregate market value of the publicly traded Shares remaining at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration under the Securities Exchange Act as described below and other factors. We cannot predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for or marketability of the Shares or whether it would cause future market prices to be greater or less than the Offer price. Securities Exchange Act Registration. The Shares are currently registered under the Securities Exchange Act. The purchase of Shares by the Purchaser pursuant to the Offer may result in the Shares becoming eligible for deregistration under the Securities Exchange Act. Registration of the Shares under the Securities Exchange Act may be terminated upon application by Microtest to the SEC if the Shares are not listed on a "national securities exchange" and there are fewer than 300 record holders of Shares. Termination of registration of the Shares under the Securities Exchange Act would substantially reduce the information that Microtest is required to furnish to its stockholders and the SEC and would make certain provisions of the Securities Exchange Act, such as the short-swing profit recovery provisions of Section 16(b) of the Securities Exchange Act and the requirements of furnishing a proxy statement in connection with stockholders' meetings pursuant to Section 14(a) or 14(c) of the Securities Exchange Act and the related requirement of an annual report, no longer applicable to Microtest. If the Shares are no longer registered under the Securities Exchange Act, the requirements of Rule 13e-3 promulgated under the Securities Exchange Act with respect to "going private" transactions would no longer be applicable to Microtest. In addition, the ability of "affiliates" of Microtest and persons holding "restricted securities" of Microtest to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended, may be impaired or, with respect to certain persons, eliminated. If registration of the Shares under the Securities Exchange Act were terminated, the Shares would no longer be "margin securities" or eligible for stock exchange listing or Nasdaq National Market reporting. We believe that the purchase of Shares pursuant to the Offer may result in the Shares becoming eligible for deregistration under the Securities Exchange Act, and it would be our intention to cause Microtest to make an application for termination of registration of the Shares as soon as possible after successful completion of the Offer if the Shares are then eligible for such termination. If registration of the Shares is not terminated prior to the Merger, then the registration of the Shares under the Securities Exchange Act and inclusion of the Shares on the Nasdaq National Market will be terminated following the completion of the Merger. Margin Regulations. The Shares are currently "margin securities" under the regulations of the Board of Governors of the Federal Reserve System, which regulations have the effect, among other things, of allowing brokers to extend credit on the collateral of the Shares for the purpose of buying, carrying or trading in securities ("Purpose Loans"). Depending upon factors such as the number of record holders of the Shares and the number and market value of publicly held Shares, following the purchase of Shares pursuant to the Offer, the Shares might no longer constitute "margin securities" for purposes of the Federal Reserve Board's margin 11 regulations and, therefore, could no longer be used as collateral for Purpose Loans made by brokers. In addition, if registration of the Shares under the Securities Exchange Act were terminated, the Shares would no longer constitute "margin securities." 8. Information Concerning Microtest. Microtest is a Delaware corporation with its principal executive offices located at 4747 North 22nd Street, Phoenix, Arizona 85016. Microtest's telephone number is 602-952-6400. The following description of Microtest and its business has been taken from Microtest's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 and is qualified in its entirety by reference to Microtest's Annual Report on Form 10-K for the fiscal year ended December 31, 2000: Microtest is a leading producer of network test and measurement products. Microtest also previously produced products relating to network storage and appliance servers, but has either sold or shut down all segments of this portion of its business. Microtest files annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information filed at the SEC's public reference room at 450 Fifth Street, N.W. Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Microtest's SEC filings are also available to the public from commercial document retrieval services and at the Internet world wide web site maintained by the SEC at http://www.sec.gov. Although we have no knowledge that any such information is untrue, we take no responsibility for the accuracy or completeness of information contained in this Offer to Purchase with respect to Microtest or any of its subsidiaries or affiliates or for any failure by Microtest to disclose events which may have occurred or may affect the significance or accuracy of any such information. 9. Information Concerning Danaher and the Purchaser. Danaher is a Delaware corporation with principal executive offices located at 2099 Pennsylvania Avenue, NW, 12th Floor, Washington, D.C. 20006-1813. Danaher's telephone number is 202-828-0850. Danaher designs, manufactures and markets industrial and consumer products with strong brand names, proprietary technology and major market positions in two principal businesses: process/environmental controls and tools and components. The Purchaser's principal executive offices are located care of Danaher at 2099 Pennsylvania Avenue, NW, 12th Floor, Washington, D.C. 20006-1813. The Purchaser is a newly formed Delaware corporation and an indirect, wholly-owned subsidiary of Danaher. The Purchaser has not conducted any business other than in connection with the Offer and the Merger. Danaher is subject to the information and reporting requirements of the Securities Exchange Act and is required to file periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. Certain information, as of particular dates, concerning Danaher's business, principal physical properties, capital structure, material pending legal proceedings, operating results, financial condition, directors and officers (including their remuneration and stock options granted to them), principal holders of Danaher's securities, any material interests of such persons in transactions with Danaher and certain other matters is required to be disclosed in proxy statements and annual reports distributed to Danaher's stockholders and filed with the SEC. You may inspect or copy these reports, proxy statements and other information at the SEC's public reference facilities and they should also be available for inspection in the same manner as set forth with respect to Microtest in Section 8. The name, business address, citizenship, present principal occupation and employment history for the past five years of each of the directors and executive officers of Danaher and the Purchaser are set forth in Schedule I hereto. 12 Except as set forth elsewhere in this Offer to Purchase or Schedule I hereto: (a) neither we nor, to our knowledge after reasonable inquiry, any of the persons listed in Schedule I hereto or any associate or majority-owned subsidiary of ours or of any of the persons so listed, beneficially owns or has a right to acquire any Shares or any other equity securities of Microtest; (b) neither we nor, to our knowledge after reasonable inquiry, any of the persons or entities referred to in clause (a) above or any of our associates or majority-owned subsidiaries has effected any transaction in the Shares or any other equity securities of Microtest during the past 60 days; (c) neither we nor, to our knowledge after reasonable inquiry, any of the persons listed in Schedule I hereto, has any agreement, arrangement or understanding with any other person with respect to any securities of Microtest (including, but not limited to, any agreement, arrangement or understanding concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies, consents or authorizations); (d) since June 1, 1999, there have been no transactions which would require reporting under the requirements of Schedule TO between us or any of our subsidiaries or, to our knowledge, any of the persons listed in Schedule I hereto, on the one hand, and Microtest or any of its executive officers, directors or affiliates, on the other hand; and (e) since June 1, 1999, there have been no material contacts, negotiations or transactions between us or any of our subsidiaries or, to our knowledge after reasonable inquiry, any of the persons listed in Schedule I hereto, on the one hand, and Microtest or any of its affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets of Microtest. 10. Background of the Offer; Contacts with Microtest. In late 1998, Danaher expressed interest to Microtest in pursuing discussions regarding a potential sale of Microtest's Network Test and Measurement ("NTM") division to Danaher. Mr. Richard Meise, then the Chairman of the Board and Chief Executive Officer of Microtest, responded to Mr. Daniel Comas, Vice President of Corporate Development for Danaher, that Microtest was not then prepared to discuss a potential sale, but would remain in contact from time to time with Danaher. After subsequent discussions between Mr. Comas and Mr. Meise in February 1999, in that same month Mr. Meise contacted Mr. Comas and indicated he would be willing to sign a confidentiality agreement with Danaher in order to discuss the potential sale of Microtest as a whole. A confidentiality agreement (including standstill provisions) was signed between Microtest and Danaher, and from February 1999 to April 1999, Mr. Comas and Mr. Vincent Hren, the newly- appointed Chief Executive Officer of Microtest, engaged in various conversations about the strategic and business fit between Microtest and Danaher's Fluke Networks, Inc. subsidiary ("Fluke Networks"). At various times throughout 1999 and early 2000, Mr. Comas and Mr. Paul Burgon, Danaher Manager of Corporate Development, spoke with Mr. Hren concerning a possible acquisition of Microtest's NTM division by Danaher. Danaher had no interest in the NAS Business (as defined in Section 11). Mr. Hren informed Mr. Comas and Mr. Burgon at various times that Microtest was considering its strategic alternatives, and that Microtest was not in a position to pursue the sale of its NTM division to Danaher at that time. In May 2000, Mr. Burgon was contacted by David Grove, an Associate with SG Cowen. Mr. Grove stated that his firm had been hired to explore the sale of Microtest for the Microtest Board. Mr. Grove sent Mr. Burgon a confidential information memorandum regarding Microtest in May 2000 and they held discussions concerning Danaher's interest in the NTM division, which Mr. Grove then reported to Microtest for further guidance. At various times during the remainder of 2000 and beginning of 2001, Mr. Grove, Microtest representatives and Mr. Burgon discussed a possible transaction involving the NTM division. In April 2001, Mr. Grove informed Mr. Burgon that the Microtest Board was prepared to accept indications of interest for the sale of the stock of Microtest. On April 16, 2001, Mr. Burgon, Mr. Christopher Odell, President of Fluke Networks, Mr. Mark Kuhn, Vice President of Finance of Fluke Networks, and Mr. Joe Martins, Business Development Director of Fluke Networks, met with Mr. Hren, Mr. William R. Crowell, Chief Financial Officer, Secretary and Treasurer of Microtest, Mr. David Coffin, Vice President of Microtest and NTM General Manager, and Mr. Grove in Phoenix, Arizona to discuss the business operations and prospects of Microtest's NTM division. 13 Microtest has advised Danaher that during May 2001, Microtest received and considered indications of interest regarding Microtest or selected assets of Microtest from other interested parties in addition to Danaher. On May 4, 2001, Mr. Burgon indicated to Mr. Grove that Danaher would be willing to pay a purchase price of $50-55 million for 100% of the stock of Microtest, plus the amount of Microtest's cash on hand (including any cash generated from the sale of all or part of the NAS Business, less any expenses from such sale (or from any related shutdown), and less certain other items, consisting predominantly of transaction costs. Mr. Grove responded several days later that the Microtest Board considered the value of Microtest's NTM division to be higher. On May 18, 2001, Danaher indicated that it was willing to pay $58 million for 100% of the shares of Microtest, with the other adjustments described above. On May 21, 2001, Danaher and Microtest signed a letter of intent upon these terms, subject to due diligence. The letter of intent was non-binding, except that Microtest was prohibited from conducting discussions relating to a business combination of Microtest or its NTM division with any other parties for a period of 30 days from the date of the letter of intent. Between May 21, 2001 and June 12, 2001, Mr. Burgon, Mr. Comas, Mr. Alex Joseph, Danaher Director of Corporate Development, and Danaher's legal counsel, Wilmer, Cutler & Pickering, negotiated the terms of the merger agreement with Mr. Grove, Mr. Crowell and Mr. Hren and Microtest's legal counsel, Snell & Wilmer L.L.P. Additionally, during this period, Mr. Odell, Mr. Kuhn, Mr. Martins and certain other Fluke Networks managers met with Mr. Hren and various Microtest managers to perform due diligence on Microtest. Between May 23, 2001 and June 12, 2001, Danaher's legal counsel also conducted legal due diligence on Microtest. Microtest has advised Danaher that during this period, Microtest also continued efforts to sell the NAS Business and its H&H Zentrum fuer Rechnerkommunikation GmbH subsidiary ("H&H") and on June 11, 2001, Microtest entered into various sale agreements relating to the sale of H&H and the optical segment of the NAS Business. See Section 11. On June 11, 2001, Danaher convened a telephonic meeting of its Board of Directors during which Mr. H. Lawrence Culp, Jr., President and Chief Executive Officer of Danaher, presented the terms of the Microtest acquisition to the Board of Directors at a proposed purchase price of $8.15 per share. The Board of Directors reviewed the business of Microtest and a summary of the negotiations between the parties up to that date. At that time, the Board of Directors unanimously approved the acquisition of Microtest on the terms presented by Mr. Culp, subject to negotiation of a definitive agreement on acceptable terms. Microtest has informed Danaher as follows: On June 12, 2001, the Microtest Board met to receive presentations from Microtest's legal and financial advisors and management, and to consider the proposed offer, merger and merger agreement with Danaher providing for the acquisition of Microtest at $8.15 per Share in cash. At the meeting, the Microtest Board discussed, among other things, the factors set forth under "Reasons for the Recommendation of the Board of Directors" in Microtest's Solicitation/Recommendation Statement on Schedule 14D-9, which is being mailed with this document. Representatives of Snell & Wilmer, L.L.P. gave a detailed presentation to the Microtest Board regarding the material terms of the Merger Agreement, including the structure of the Offer and Merger, the conditions to the Offer and Merger, covenants applicable to Microtest under the Merger Agreement (including restrictions in the ability to solicit or negotiate alternative transactions), the termination provisions and the circumstances on which Microtest would be required to pay a break-up fee in the event the Merger Agreement were terminated for a Superior Proposal (as defined in the Merger Agreement) or in the other circumstances outlined in the Merger Agreement, as well as various employee benefit matters. In addition, representatives of SG Cowen made a presentation regarding the financial terms of the Offer, explaining to the Microtest Board in detail the analysis undertaken by SG Cowen regarding the Offer and Merger with respect to its opinion. After extensive questions were asked by the Microtest Board, representatives of SG Cowen then rendered the opinion of SG Cowen, which was subsequently confirmed in writing as of June 12, 2001, that, based upon and subject to certain matters and the assumptions described in the written opinion, the consideration to be received by the stockholders of Microtest, $8.15 in cash per share, was fair from a financial point of view to stockholders as of that date. Following such presentations, the Microtest Board determined that the terms of the proposed Offer and Merger were fair to and in the best interests of the stockholders of Microtest, approved the Merger Agreement with Danaher and the transactions contemplated thereby, including the Offer and the Merger, determined that the Merger Agreement 14 with Danaher was advisable and determined to recommend that Microtest's stockholders accept Danaher's Offer and tender their Shares pursuant to Danaher's Offer and approve and adopt the Merger Agreement with Danaher. Following the meeting of the Microtest Board, representatives of Danaher and Microtest concluded negotiations of mutually acceptable definitive documentation. Microtest and Danaher executed a definitive merger agreement as of June 12, 2001, and press releases regarding the transaction were issued before the opening of the markets on June 13, 2001. Microtest shut down the remainder of the NAS Business, excluding the assets sold pursuant to the sale agreements executed on June 11, 2001, promptly following the execution of the Merger Agreement. 11. Purpose of the Offer; the Merger Agreement; Change of Control Agreements; Confidentiality Agreement; Statutory Requirements; Appraisal Rights; Plans for Microtest; "Going Private" Transactions. (a) Purpose. The purpose of the Offer and the Merger is to acquire control of, and the entire equity interest in, Microtest. The Offer, as the first step in the acquisition of Microtest, is intended to facilitate the acquisition of all of the Shares. The purpose of the Merger is to acquire all capital stock of Microtest not purchased pursuant to the Offer or otherwise. (b) The Merger Agreement. The following summary description of the Merger Agreement is qualified in its entirety by reference to the Merger Agreement itself, which we have filed as an exhibit to the Tender Offer Statement on Schedule TO that we have filed with the SEC, which you may examine and copy as set forth in Section 8 above (except that it will not be available at the regional offices of the SEC). Unless the context indicates otherwise, references to Microtest in this Section 11 include Microtest and its subsidiaries. The Offer. The Merger Agreement provides that the Purchaser will commence the Offer and that, upon the terms and subject to prior satisfaction or waiver of the conditions of the Offer, as set forth in Section 14, the Purchaser will purchase all Shares validly tendered and not withdrawn pursuant to the Offer. The Merger Agreement provides that, without the prior written consent of Microtest, the Purchaser will not (a) decrease the Offer price or change the form of consideration payable in the Offer, (b) decrease the number of Shares sought to be purchased in the Offer, (c) impose additional conditions to the Offer, (d) waive the Minimum Condition or (e) amend any other term of the Offer in a manner adverse to the holders of Shares. The Purchaser may extend the Offer, from time to time, if, at the then-scheduled Expiration Date of the Offer, any of the conditions to the Purchaser's obligation to accept for payment and pay for all Shares validly tendered shall not have been satisfied or waived; provided, however, that, on the scheduled expiration date of the Offer, (i) if the waiting period under the HSR Act or under any material applicable foreign statutes or regulations applicable to the Merger, in each case to the extent such waiting period suspends the right to close the transactions contemplated by the Merger Agreement, shall have not expired or been terminated, the Purchaser shall extend the Offer from time to time until the earlier of (1) September 30, 2001, or (2) expiration or termination of the waiting period under the HSR Act or any other applicable foreign statutes or regulations, and (ii) if any of the conditions set forth in paragraphs (a) or (b) of Annex I to the Merger Agreement shall have occurred and be continuing, the Purchaser shall extend the Offer from time to time until the earliest of (A) five business days after the time such condition shall no longer exist, (B) such time at which the matters described in such paragraphs (a) or (b) shall have become final and nonappealable, or (C) September 30, 2001. In addition, if all conditions to the Purchaser's obligation to accept for payment and pay for all Shares validly tendered are satisfied, and the number of Shares tendered and not withdrawn constitutes more than 70% but less than 90% of the outstanding Shares, the Purchaser shall have the right, in its sole discretion, to extend the Offer from time to time for up to a maximum of ten additional business days in the aggregate for all such extensions beyond the latest Expiration Date. Finally, the Purchaser may provide for a subsequent offering period after the Expiration Date, subject to the rules promulgated under the Securities Exchange Act. Recommendation. Microtest has represented to Danaher in the Merger Agreement that the board of directors of Microtest (the "Microtest Board"), at a meeting duly called and held at which a quorum was present throughout, has unanimously (i) determined that the Merger Agreement and each of the transactions 15 contemplated thereby, including each of the Offer and the Merger, is advisable, fair to and in the best interests of Microtest and its stockholders, (ii) approved the Offer and the Merger and adopted the Merger Agreement in accordance with the GCL, (iii) resolved to recommend that the stockholders of Microtest accept the Offer, tender their Shares pursuant to the Offer and approve the Merger (if such approval is required by applicable law), (iv) taken all other action necessary to render the restrictions on "business combinations" under Section 203 of the GCL inapplicable to the Offer and the Merger, and (v) taken all other action necessary to render the rights under the Rights Agreement inapplicable to the Offer and the Merger; provided, however, that such recommendation and approval may be withdrawn, modified or amended only prior to the purchase of Shares and only to the extent that the Microtest Board determines in good faith by majority vote, after consultation with its outside legal counsel and financial advisor, that an Acquisition Transaction which has been proposed to Microtest is reasonably likely to result in a transaction that is a Superior Proposal (as defined in the Merger Agreement), and that failure to take such action would constitute a breach of the Microtest Board's fiduciary obligations under applicable law. Microtest has further represented that, as of the date of execution of the Merger Agreement, SG Cowen delivered to the Microtest Board its opinion to the effect that, as of such date, the consideration to be paid pursuant to the Offer and the Merger was fair from a financial point of view to the stockholders of Microtest. Directors. The Merger Agreement provides that, subject to compliance with applicable law, Danaher, promptly upon the payment by the Purchaser for Shares pursuant to the Offer, and from time to time thereafter, will be entitled to designate that number of directors, rounded up to the next whole number, on the Microtest Board as is equal to the product of the total number of directors on the Microtest Board (determined after giving effect to the directors so elected pursuant to such provisions) multiplied by the percentage that the aggregate number of Shares beneficially owned by Danaher or its affiliates bears to the total number of Shares then outstanding. Microtest shall, upon request of Danaher, promptly take all actions necessary to cause designees to be so elected, including, if necessary, seeking the resignations of one or more existing directors; provided, however, that prior to the Effective Time, the Microtest Board shall always have at least two members who are not officers, directors, employees or designees of the Purchaser or any of its affiliates (other than Microtest) ("Purchaser Insiders"). If the number of directors who are not Purchaser Insiders is reduced below two prior to the Effective Time, the remaining director who is not a Purchaser Insider will be entitled to designate a person who is not a Purchaser Insider to fill such vacancy. Following the election or appointment of Danaher's designees and prior to the Effective Time, any amendment or termination of the Merger Agreement by Microtest, any extension by Microtest of the time for performance of any of the obligations or other acts of Danaher or the Purchaser or any waiver of any of Microtest's rights or conditions to the consummation of the Merger under the Merger Agreement, in addition to any required approval thereof by the full Microtest Board, will require the concurrence of a majority of the directors of Microtest then in office who are not Purchaser Insiders (or, in the case where there are two or fewer directors who are not Purchaser Insiders, the concurrence of one director who is not a Purchaser Insider) if that amendment, termination, extension or waiver would be reasonably likely to have an adverse effect on the minority stockholders of Microtest. The Merger. The Merger Agreement provides that, at the Effective Time, the Purchaser will be merged with and into Microtest. Following the Merger, the separate corporate existence of the Purchaser will cease and Microtest will continue as the surviving corporation (the "Surviving Corporation") and an indirect, wholly-owned subsidiary of Danaher. Microtest has agreed pursuant to the Merger Agreement that, subject to any right Danaher may have to take action by written consent, if required by applicable law or the applicable rules and regulations of the Nasdaq National Market in order to consummate the Merger, Microtest will (a) duly call, give notice of, convene and hold a special meeting of its stockholders as soon as practicable following the acceptance for payment of and payment for Shares by the Purchaser pursuant to the Offer for the purpose of adopting the Merger Agreement; (b) prepare and file with the SEC a preliminary proxy statement relating to the Merger Agreement, and use its commercially reasonable efforts (1) to obtain and furnish the information required to be included by the SEC in the Proxy Statement (as defined herein) and, after consultation with Danaher, to respond promptly to any comments made by the SEC with respect to the preliminary proxy statement and to 16 cause a definitive proxy statement (the "Proxy Statement") to be mailed to its stockholders and (2) to obtain the necessary approvals of the Merger and adoption of the Merger Agreement by its stockholders; and (c) (1) subject to the provisions described under "Recommendation," include in the Proxy Statement the recommendation of the Microtest Board that the stockholders of Microtest vote in favor of the approval of the Merger Agreement, and (2) include in the Proxy Statement the written opinion of SG Cowen. Danaher has agreed in the Merger Agreement that it will vote, or cause to be voted, all of the Shares then owned by it, the Purchaser or any of its other subsidiaries in favor of the approval of the Merger and the Merger Agreement. In addition, if following expiration of the Offer and satisfaction or waiver of all of the Tender Offer Conditions (as defined in the Merger Agreement), applicable laws or the applicable rules and regulations of the Nasdaq National Market require a vote of the Microtest stockholders in order to consummate the Merger, Danaher and the Purchaser may, in their sole discretion, in lieu of having Microtest call a special meeting of the stockholders, elect to approve the Merger by written consent without a meeting of the stockholders, to the extent permitted by Microtest's certificate of incorporation and bylaws. Microtest has agreed to take all actions necessary to permit Danaher and the Purchaser to take such action by written consent, including without limitation making and assisting in such filings with the SEC, and preparing and mailing an information statement and such other materials, as may be required under the federal securities laws and the GCL. The Merger Agreement further provides that, notwithstanding the foregoing, if Danaher, the Purchaser or any other of Danaher's subsidiaries acquires at least 90% of the outstanding Shares, pursuant to the Offer or otherwise, the parties to the Merger Agreement will take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the acceptance for payment of and payment for the Shares by the Purchaser pursuant to the Offer without a meeting of the stockholders of Microtest in accordance with Section 253 of the GCL. Charter, Bylaws, Directors and Officers. The certificate of incorporation of Microtest, as in effect immediately prior to the Effective Time, will be the certificate of incorporation of the Surviving Corporation, until amended afterward in accordance with the provisions of the certificate of incorporation of the Surviving Corporation and applicable law; provided, however, that any such amendments will be consistent with the rights of directors and officers to indemnification and insurance as described below under "Indemnification; Directors' and Officers' Insurance." The bylaws of the Purchaser in effect at the Effective Time will be the bylaws of the Surviving Corporation, until afterward amended in accordance with the provisions of the bylaws of the Surviving Corporation and applicable law; provided, however, that any such amendments will be consistent with the rights of directors and officers to indemnification and insurance as described below under "Indemnification, Directors' and Officers' Insurance." Subject to applicable law, (a) the directors of the Purchaser immediately prior to the Effective Time will be the initial directors of the Surviving Corporation and will hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal, and (b) the officers of the Purchaser immediately prior to the Effective Time will be the initial officers of the Surviving Corporation and will hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal. Conversion of Securities. By virtue of the Merger and without any action on the part of the holders of the Shares, at the Effective Time, each Share issued and outstanding immediately prior to the Effective Time (other than (a) any Shares held by Danaher, the Purchaser, any wholly-owned subsidiary of Danaher or the Purchaser, in the treasury of Microtest or by any wholly-owned subsidiary of Microtest, which Shares, by virtue of the Merger and without any action on the part of the holder of those Shares, will be canceled and retired and will cease to exist with no payment being made with respect thereto, and (b) Shares held by a holder who has not voted in favor of the Merger and who has demanded appraisal for those Shares in accordance with the GCL ("Dissenting Shares")) will be canceled and retired and will be converted into the right to receive $8.15 (or any higher amount Purchaser determines in its sole discretion to pay in the Offer) net per Share in cash, payable to the holder of that Share, without interest (the "Merger Price"), upon surrender of the Share Certificate formerly representing that Share. 17 At the Effective Time, each share of common stock of the Purchaser issued and outstanding immediately prior to the Effective Time will, by virtue of the Merger and without any action on the part of the holder thereof, be converted into and become one validly issued, fully paid and non-assessable share of common stock, par value $0.001 per share, of the Surviving Corporation. The Merger Agreement provides that, prior to the Effective Time, the Microtest Board (or, if appropriate, any committee thereof) will adopt appropriate resolutions and take all other actions necessary to provide for the cancellation or exercise, effective at the Effective Time, of all the outstanding stock options or similar rights (the "Options") granted by Microtest on or prior to the date of the Merger Agreement, whether under a stock option or similar plan (the "Stock Plans") or otherwise, without any payment therefor except as otherwise described in this paragraph. Immediately prior to the Effective Time, Microtest will accelerate the vesting of all unvested Options and each then vested Option shall thereafter no longer be exercisable but shall entitle each holder thereof, in cancellation and settlement therefor, to a payment in cash by Microtest (subject to any applicable withholding taxes), at the Effective Time, equal to the product of (i) the total number of Shares subject to such vested Option and (ii) the excess, if any, of the Merger Price over the exercise price per Share subject to such vested Option (such amounts payable being referred to as the "Cash Payment"). All other Stock Plans and any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of Microtest or any subsidiary will terminate as of the Effective Time; provided that the Microtest, Inc. Employee Stock Purchase Plan will be suspended as of the end of the enrollment period expiring on June 30, 2001, and terminated as of the Effective Time. Microtest has also agreed to obtain all necessary consents and waivers of notice periods to ensure that after the Effective Time, holders of Options will have no rights other than the rights of the holders of vested Options to receive the Cash Payment in cancellation and settlement thereof. Representations and Warranties. Pursuant to the Merger Agreement, Microtest has made customary representations and warranties to Danaher and the Purchaser with respect to, among other matters, its organization and qualification, capitalization, subsidiaries, authority, conflicts, required filings and consents, SEC filings, financial statements, litigation, compliance with law, applicability of state takeover statutes, insurance, brokers, employee benefit plans and labor matters, environmental matters, material contracts, opinion of financial advisor, information to be included in the Schedule 14D-9, the Proxy Statement or the other documents required to be filed with the SEC or any other governmental authority relating to the Offer and the Merger, related party transactions, product recalls, intellectual property, taxes, assets and properties, relationships with customers and suppliers, the absence of certain changes with respect to Microtest and the Rights Agreement. Danaher and the Purchaser have made customary representations and warranties to Microtest with respect to, among other matters, their organization and qualification, authority, conflicts, required filings and consents, information to be included in the Schedule 14D-9, the Proxy Statement or the other documents required to be filed with the SEC or any other governmental authority relating to the Offer and the Merger, and financing. Covenants. The Merger Agreement obligates Microtest and its subsidiaries, from May 21, 2001 until the Effective Time, to conduct their operations only in the ordinary and usual course of business consistent with past practice and in compliance with all laws and orders, and obligates Microtest and its subsidiaries to use their commercially reasonable efforts to preserve intact their business organizations, to keep available the services of their present officers and key employees and to preserve the goodwill of those having business relationships with them. The Merger Agreement also contains specific restrictive covenants as to certain impermissible activities of Microtest prior to the Effective Time, which provide that Microtest will not (and will not permit any of its subsidiaries to) take certain actions without the prior written consent of Danaher (which, with respect to matters involving employee compensation and benefits, settlement of litigation and certain changes to contracts, Danaher has agreed not to unreasonably withhold) including, among other things, actions related to amendments to the certificate of incorporation, bylaws or Rights Agreement of Microtest, issuances or sales of its securities, changes in capital structure, dividends and other distributions, repurchases or redemptions of securities, material acquisitions or dispositions, increases in compensation or adoption of new benefit plans, encumbrances, incurrence or payment of indebtedness, settlement of litigation, certain changes to 18 contracts, tax elections and tax liability, accounting practices, enforcement of standstill provisions and certain other material events or transactions, subject to specified exceptions. Access to Information. The Merger Agreement provides that, until the Effective Time and subject to certain confidentiality provisions, Microtest will give Danaher and the Purchaser and their representatives full access, during normal business hours, to the assets, properties, offices and other facilities and to the books and records of Microtest and its subsidiaries, and will provide Danaher and the Purchaser copies of documents filed pursuant to U.S. federal or state securities laws during this period, and, upon reasonable request, financial and operating data and other information with respect to the business and operations of Microtest and its subsidiaries. Efforts. Subject to the terms and conditions provided in the Merger Agreement, each of Microtest, Danaher and the Purchaser will cooperate and use their respective reasonable efforts to make or cause to be made all filings necessary or proper under applicable laws and regulations, and to take all other actions necessary, to consummate and make effective the transactions contemplated by the Merger Agreement. Each of the parties to the Merger Agreement also has agreed to use its commercially reasonable efforts to obtain as promptly as practicable all Consents (as defined in the Merger Agreement) of any governmental authorities or any other person required in connection with, and waivers of any Violations (as defined in the Merger Agreement) that may be caused by, the consummation of the transactions contemplated by the Offer and the Merger Agreement; provided, however, that Danaher would not be required to, and Microtest would not be permitted to without Danaher's prior written consent, divest, hold separate or otherwise materially restrict the use or operations of any of their respective businesses or assets, in order to consummate the transactions contemplated by the Offer and the Merger Agreement, if such divestiture, agreement to hold separate or other restriction would, in the good faith judgment of Danaher, have a Material Adverse Effect on Microtest (as defined in Section 14 hereof) or a Material Adverse Effect on Danaher (as defined in Section 14 hereof). Without limiting the foregoing obligations, the parties to the Merger Agreement also agreed that, within five business days after the date of the Merger Agreement, Danaher would make all necessary filings and submissions under the HSR Act, and Microtest would make all necessary filings and submissions under the HSR Act as soon as practicable, but no later than the date required by the HSR Act and the rules promulgated thereunder. See Section 15. Microtest and Danaher agreed to comply with other requests for information from the U.S. Federal Trade Commission ("FTC") and/or the Antitrust Division of the U.S. Department of Justice (the "Antitrust Division," and together with the FTC, the "Antitrust Governmental Entities"), to the extent required by applicable law. Microtest and Danaher also agreed to share equally all filing fees associated with filing of the Notification and Report Form. The parties further agreed that, except as may be restricted by applicable law, (a) the parties would cooperate with each other with respect to the obtaining of information needed for the preparation of the Notification and Report Forms required to be filed pursuant to the HSR Act by Microtest and Danaher in connection with the transactions contemplated by the Merger Agreement, (b) the parties would use their reasonable efforts and would cooperate in responding to any written or oral requests from the Antitrust Governmental Entities for additional information or documentary evidence, and (c) the parties would cooperate and provide notice and opportunity to consult regarding all meetings with the Antitrust Governmental Entities, whether in person or telephonic, and regarding all written communications with the Antitrust Governmental Entities, in connection with the transactions contemplated by the Merger Agreement. Microtest and Danaher also agreed to cooperate to make as soon as practicable all necessary filings and submissions required by the antitrust or competition laws of any other jurisdiction. Microtest has agreed to give Danaher the opportunity to participate in the defense of any litigation against Microtest, any of its subsidiaries and/or any of Microtest's directors relating to any of the transactions contemplated by the Merger Agreement. In the event that a claim is asserted against any of the parties hereto or any of their respective affiliates, relating to, based in whole or in part on events or conditions occurring or existing in connection with, or arising out of, any of the transactions contemplated by the Merger Agreement, each of the parties thereto has agreed to fully cooperate with the other parties thereto in the defense of any such claim at the expense of the party against whom such claim is asserted. 19 Public Announcements. Under the Merger Agreement, the parties thereto have agreed to consult promptly with each other prior to issuing any press release or otherwise making any public statement with respect to the Offer, the Merger and the other transactions contemplated by the Merger Agreement, provide to the other party for review a copy of any such press release or statement, and not to issue any such press release or make any such public statement prior to such consultation and review, unless required by applicable law or any listing agreement with a securities exchange. Employee Benefit Arrangements. With respect to employee benefit matters, the Merger Agreement provides that, from and after the Effective Time, solely with respect to employees of Microtest at its United States operations, Danaher will cause the Surviving Corporation to honor obligations under certain specified employee benefit plans of Microtest, provided that the Surviving Corporation is not thereby required to maintain any particular benefit or compensation arrangement or required to retain any person in employment. The Merger Agreement also provides that for the period ending December 31, 2001, the Surviving Corporation will continue the compensation and employee benefit and welfare plans of Microtest (other than those providing equity-based compensation), to the extent practicable, as in effect on the date of the Merger Agreement, and thereafter the Surviving Corporation will provide the employees of Microtest (and those of its subsidiaries) as a whole with compensation programs and employee benefits which are substantially the same as or not less favorable in the aggregate than those generally in effect with respect to similarly situated employees of Danaher or, at Danaher's election, those in effect before the Effective Time at Microtest, after giving effect to any regional differences. In addition, the Merger Agreement also provides that through the period ending on the first anniversary of the Effective Time, severance benefits available to employees of Microtest or its subsidiaries will be no less favorable than those severance benefits as in effect on the date of the Merger Agreement. Indemnification; Directors' and Officers' Insurance. Pursuant to the Merger Agreement, Danaher has agreed that from and after the Effective Time, the certificate of incorporation and the bylaws of the Surviving Corporation will contain provisions with respect to indemnification and exculpation from liability that are no less favorable than those provisions set forth in Microtest's certificate of incorporation and bylaws on the date of the Merger Agreement. Danaher has also agreed not to amend, repeal or otherwise modify these provisions for a period of six years from the Effective Time in any manner that would adversely affect the rights thereunder of individuals who on or prior to the Effective Time were directors, officers, employees or agents of Microtest, unless such amendment, repeal or modification is required by law. In addition, Danaher has agreed, during such period, to guarantee the obligations of the Surviving Corporation with respect to the indemnification provisions contained in the Surviving Corporation's certificate of incorporation and bylaws. Danaher has also agreed that it will not cancel Microtest's directors' and officers' liability insurance policy for a period of four years immediately following the Effective Time, provided that neither Danaher nor the Surviving Corporation will be obligated to pay premiums for such insurance in any year in an amount greater than 150% of the aggregate premiums paid by Microtest and its subsidiaries in the fiscal year ended December 31, 2000, and provided further that Danaher may instead adopt such other arrangements (including self- insurance) or policies that provide at least the same coverage and amounts on terms that are not less advantageous to the insured parties. In the event that Danaher or the Surviving Corporation consolidates or merges with another person or transfers its assets to another person, it must make proper provisions to assure that these obligations are assumed. Notification of Certain Matters. Danaher and Microtest have agreed to promptly notify each other of (a) any circumstance or the occurrence or non- occurrence of any fact or event which would be reasonably likely (1) to cause any representation or warranty contained in the Merger Agreement to be untrue or inaccurate in any material respect at any time prior to the Effective Time, (2) to cause any covenant, condition or agreement under the Merger Agreement not to be complied with or satisfied, or (3) to result in a Material Adverse Effect on Microtest, and (b) any failure of Microtest, Danaher or the Purchaser, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it under the Merger Agreement. Each of Microtest, Danaher and the Purchaser is also required to give prompt notice to the 20 other parties of any notice or communication from any third party alleging that the Consent of that third party is or may be required in connection with the transactions contemplated by the Merger Agreement. State Takeover Laws. Microtest and the Microtest Board have agreed (i) to take all actions necessary to ensure that no "fair price," "control share acquisition," "moratorium" or other anti-takeover statute, or similar law, is or becomes applicable to the Merger Agreement or any of the transactions contemplated by the Merger Agreement, and (ii) if any such statute or law is or becomes applicable to the Merger Agreement or any of the transactions contemplated by the Merger Agreement, to take all actions necessary to ensure that such transactions may be consummated as promptly as practicable on the terms contemplated by the Merger Agreement, and otherwise to minimize the effect of such statute or law on the transactions contemplated by the Merger Agreement. No Solicitation. The Merger Agreement requires Microtest to, and to direct its subsidiaries and affiliates and their respective officers, directors, employees, representatives and agents to, immediately cease any existing discussions or negotiations with any parties with respect to any Acquisition Transaction (as defined below). The Merger Agreement further provides that, prior to the Effective Time, Microtest will not authorize or permit any of its subsidiaries or any of its or its subsidiaries' directors, officers, employees, agents or representatives, directly or indirectly, to solicit, initiate or encourage, or furnish or disclose non-public information in furtherance of, any inquiries or the making of any proposal with respect to any merger, liquidation, recapitalization, consolidation or other business combination involving Microtest or its subsidiaries or acquisition of any capital stock or any material portion of the assets of Microtest or of its subsidiaries, or any combination of the foregoing (other than the Offer, the Merger and the sale or other disposition of the Excluded Business (as defined below), or the shut-down of Microtest's Network Appliances and Storage business (the "NAS Business") (excluding the Excluded Business), in each case in accordance with the terms of the Merger Agreement) (an "Acquisition Transaction"), or negotiate, explore or otherwise engage in substantive discussions with any person (other than Danaher, the Purchaser or their respective directors, officers, employees, agents and representatives) with respect to any Acquisition Transaction or enter into any agreement, arrangement or understanding with respect to any Acquisition Transaction or requiring it to abandon, terminate or fail to consummate the Merger or any other transaction contemplated by the Merger Agreement; provided, however, that Microtest may, prior to the purchase of Shares pursuant to the Offer, furnish information to, and negotiate or otherwise engage in substantive discussions with, any person who has delivered a bona fide written proposal for an Acquisition Transaction if the Microtest Board determines in good faith by a majority vote, following consultation with outside counsel and financial advisors, that (1) such a transaction is reasonably likely to result in a transaction that is superior in comparison to the Offer and the Merger and the terms of the Merger Agreement to Microtest's stockholders from a financial point of view and to Microtest, taking into account the terms and conditions thereof, the likelihood of consummation and the time required to complete such transaction (a "Superior Proposal"), and (2) failing to take such action would result in a breach of the fiduciary duties of the Microtest Board under applicable law, provided that prior to furnishing non-public information to any such party, Microtest shall have entered into a confidentiality agreement containing terms at least as favorable to Microtest as those of the letter agreement dated February 25, 1999 between Danaher and Microtest, as amended May 22, 2001 (provided that such confidentiality agreement need not contain any standstill provision). The term "Acquisition Transaction," as used in the Merger Agreement (other than in Section 8.3 thereof), excludes the acquisition by any person, in any single transaction or series of related transactions, of an aggregate number of Shares which, immediately following such acquisition, would represent no more than 5% of the issued and outstanding Shares (or securities convertible or exchangeable into, or exercisable for Shares, whether upon the passage of time or otherwise), to the extent such acquisition is not made for the purpose of, or as part of a plan for, acquiring control of Microtest and does not involve disclosure of material, non-public information to the prospective acquiror or purchaser. The Merger Agreement further provides that, from and after its execution, Microtest will promptly (and in any event no later than 12 hours after receipt of any inquiry, proposal or other materials relating to an Acquisition Transaction) (A) advise the Purchaser in writing of the receipt, directly or indirectly, of any such 21 inquiry, proposal or other materials, and of any discussions, negotiations or proposals relating to an Acquisition Transaction (including without limitation a Superior Proposal), (B) identify the offeror, and (C) provide Danaher or the Purchaser copies of all material proposed written agreements, arrangements, or understandings, including the forms of any material agreements supplied by third parties, and all applicable financial statements and evidence of any planned financing with respect to such Acquisition Transaction (and a description of all material oral agreements with respect thereto). Microtest has also agreed to promptly advise Danaher of all material developments relating to such proposal, including the results of any discussions or negotiations with respect thereto. FIRPTA Certificate. Microtest has agreed to provide Danaher and the Purchaser, prior to the Expiration Date, (1) a properly executed certificate for purposes of satisfying the obligations of Danaher and Purchaser under Treasury Regulation Section 1.1445-2(c)(3), and (2) a form of notice to the Internal Revenue Service in accordance with the requirements of Treasury Regulation Section 1.897-2(h)(2), along with written authorization for Danaher to deliver such notice form to the Internal Revenue Service on behalf of Microtest. Rights Agreement. Microtest has agreed in the Merger Agreement that it will not (a) redeem the preferred share purchase rights under the Rights Agreement, (b) amend the Rights Agreement or (c) take any action which would allow any Person (as defined in the Rights Agreement) other than Danaher or the Purchaser to acquire beneficial ownership of 15% or more of the Shares without causing a Distribution Date or a Triggering Event (as each such term is defined in the Rights Agreement) to occur, unless the Merger Agreement has been terminated in accordance with its terms. The Microtest Board has also agreed not make a determination that Danaher, the Purchaser or any of their respective Affiliates or Associates (as defined in the Rights Agreement) is an "Acquiring Person" for purposes of the Rights Agreement in respect of the transactions contemplated by the Agreement. Sale or Disposition of Excluded Business. Prior to the execution of the Merger Agreement, Microtest entered into the Asset Purchase Agreement by and between Microtest, Inc. and xStore, Inc. dated June 11, 2001, the Contract for sale and transfer of shares and part shares by and among Logicraft Information Systems, Inc., Dr. Klaus Romanek, Michael Etscheid, Volkmar Brauckhoff, Jens Diedrich, Annegret Elligsen and Ralf in der Beek dated June 11, 2001, and the Agreement between Microtest, Inc., Microtest Europe Limited, Microtest GmbH, Logicraft Information Systems, Inc. and H + H Zentrum fur Rechnerkommunikation GmbH dated June 11, 2001 (the "Sale Agreements"), pursuant to which Microtest sold certain assets relating to the H + H and optical segments of the NAS Business, including without limitation all of the stock of its subsidiary H + H Zentrum fur Rechnerkommunikation GmbH. Microtest has agreed not to amend or modify or waive any rights under any of the Sale Agreements or take any actions with respect to the transactions contemplated thereunder (unless expressly required by the terms of the applicable Sale Agreement), without the prior written consent of Danaher. The stock, assets and liabilities which are the subject of the Sale Agreements are referred to collectively as the "Excluded Business." Immediately following the execution of the Merger Agreement, Microtest shut down the remainder of the NAS Business, including the termination of approximately 40 employees. Microtest and, following the Effective Time, the Surviving Corporation, may from time to time attempt to sell certain of the assets relating to the NAS Business that was shut down. Parent Agreement. Danaher has agreed to cause the Purchaser to comply with its obligations under the Merger Agreement. Conditions to Consummation of the Merger. Pursuant to the Merger Agreement, the respective obligations of Danaher, the Purchaser and Microtest to consummate the Merger are subject to the satisfaction, at or before the Effective Time, of each of the following conditions: (a) the stockholders of Microtest will have duly adopted the transactions contemplated by the Merger Agreement in accordance with the procedures set forth in Microtest's certificate of incorporation and bylaws, if required by applicable law or by the rules and regulations of the Nasdaq National Market; (b) the Purchaser will have accepted for payment and paid for Shares in an amount sufficient to meet the Minimum Condition and otherwise pursuant to the Offer and in accordance with the terms of the Merger Agreement (provided, that this condition will be deemed satisfied with 22 respect to the Merger if the Purchaser fails to accept for payment or pay for Shares pursuant to the Offer in violation of the terms of the Offer or of the Merger Agreement; (c) the consummation of the Merger will not have been restrained, enjoined or prohibited by any order, judgment, decree, injunction or ruling of a court of competent jurisdiction or any governmental authority and there will not be any statute, rule or regulation enacted, promulgated or deemed applicable to the Merger by any governmental authority which prevents the consummation of the Merger, or has the effect of making the acquisition of Shares in the Merger illegal; and (d) expiration or termination of any waiting period (and any extension thereof) under the HSR Act and each material domestic or foreign statute or regulation that suspends the right to close the transactions contemplated by the Merger Agreement and is applicable to the Merger. Termination. The Merger Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time, notwithstanding approval thereof by the stockholders of Microtest (with any termination by Danaher also being an effective termination by the Purchaser): (a) by the mutual written consent of Danaher and Microtest, by action of their respective Boards of Directors; (b) by Danaher or Microtest if the Purchaser shall not have accepted for payment and paid for the Shares pursuant to the Offer in accordance with the terms of the Offer and the Merger Agreement on or before September 30, 2001 (provided that a party may not terminate the Merger Agreement pursuant to this provision if such failure to accept for payment and pay for the Shares is due to such party's material breach of the Merger Agreement); (c) by Danaher or Microtest if (1) the Offer is terminated or withdrawn pursuant to its terms and the terms of the Merger Agreement without any Shares being purchased under the Offer, or (2) the Merger has not been completed on or before November 30, 2001; provided, however that neither party may terminate the Merger Agreement pursuant to this provision if that party has materially breached the Merger Agreement; (d) by Danaher or Microtest if any court of competent jurisdiction or other governmental authority has issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the acceptance for payment of, or payment for, Shares pursuant to the Offer or the Merger and that order, decree or ruling or other action will have become final and nonappealable, provided that the party seeking to terminate the Merger Agreement will have used its commercially reasonable efforts to remove or lift such order, decree or ruling; (e) by Danaher or Microtest if, prior to the purchase of Shares pursuant to the Offer, the Microtest Board shall have determined to recommend a Superior Proposal to its stockholders and/or to enter into a contract or agreement concerning such Superior Proposal after making the determination required by Section 6.9(a) of the Merger Agreement; provided that Microtest cannot exercise its right to terminate under this paragraph (e) (and may not enter into a contract or agreement with respect to any Superior Proposal) unless and until (1) Microtest shall have provided the Purchaser and Danaher written notice at least five business days prior to such termination that the Microtest Board has authorized and intends to effect the termination of the Merger Agreement pursuant to this paragraph (e), including copies of all proposed contracts, including the forms of any agreements supplied by third parties, and all applicable financial statements and evidence of any planned financing with respect to such Superior Proposal (and a description of all material oral agreements with respect thereto), (2) the Microtest Board shall have determined, in good faith and after consultation with its outside legal counsel and financial advisors that, at the time of its determination to terminate the Merger Agreement and at the end of the five-business day period referred to above, (A) the foregoing Acquisition Transaction constitutes a Superior Proposal, and (B) failing to take such action would result in a breach of the fiduciary duties of the Microtest Board under applicable law, (3) Microtest shall otherwise be in compliance with its obligations under Sections 1.2, 6.9 and 6.11 of the Merger Agreement in all material respects, and (4) (A) within one business day of termination by Danaher, or (B) prior to such termination in the case of termination by Microtest, Microtest 23 shall have paid to Danaher the Termination Fee and the Expense Fee described in "Fees and Expenses" below; (f) by Danaher prior to the purchase of Shares pursuant to the Offer, if the Microtest Board (or, with respect to (3) below, Microtest) (1) shall have withheld, withdrawn or modified (including by amendment of the Schedule 14D-9) in any manner adverse to the Purchaser or Danaher its approval or recommendation of the Offer, the Merger Agreement or the Merger, (2) shall have approved or recommended an Acquisition Transaction, (3) shall have breached Section 6.9 of the Merger Agreement in any material respect or Section 6.11 of the Merger Agreement (provided that, to the extent a breach of Section 6.9(b)(C) of the Merger Agreement is cured within 72 hours after such breach, such breach shall not be considered a breach of Section 6.9 of the Merger Agreement), or (4) shall have resolved to effect any of the foregoing; (g) by Danaher prior to the purchase of Shares pursuant to the Offer if the Minimum Condition has not been satisfied by the then current Expiration Date and on or prior to such Expiration Date an Acquisition Transaction shall have been publicly announced or disclosed; (h) by Microtest, upon a material breach by Danaher or Purchaser of any material covenant or agreement set forth in the Merger Agreement, or upon the failure of any representation or warranty of Danaher or Purchaser set forth in the Merger Agreement to be true and correct as if such representation or warranty were made at the time of such determination (except as to any such representation or warranty which speaks as of a specific date, which must be untrue or incorrect as of such specific date); provided that to the extent that the representation or warranty is not qualified by Material Adverse Effect or any other materiality qualifier, no failure shall be deemed to have occurred so long as such failure, taken together with all other such failures, does not have a Material Adverse Effect on Danaher, and; provided further, that no breach or failure shall be deemed to have occurred for purposes of this provision so long as such breach or failure is satisfied or cured within 20 days after Microtest notifies Danaher of such breach or failure; or (i) by Danaher, upon a material breach by Microtest of any material covenant or agreement set forth in the Merger Agreement, or upon the failure of any representation or warranty of Microtest set forth in the Merger Agreement to be true and correct as if such representation or warranty were made at the time of such determination (except as to any such representation or warranty which speaks as of a specific date, which must be untrue or incorrect as of such specific date); provided that to the extent that the representation or warranty is not qualified by Material Adverse Effect or any other materiality qualifier, no failure shall be deemed to have occurred so long as such failure, taken together with all other such failures, does not have a Material Adverse Effect on Microtest, and; provided further, that no breach or failure shall be deemed to have occurred for purposes of this provision so long as such breach or failure is satisfied or cured within 20 days after Danaher or Purchaser notifies Microtest of such breach or failure. In the event of the termination of the Merger Agreement in accordance with its terms, the Merger Agreement will become void and have no effect, without any liability on the part of any party or its directors, officers or stockholders, other than certain specified provisions (including payment of the Termination Fee and Expense Fee under the circumstances described below), which shall survive any such termination; provided that no party would be relieved from liability for any material breach of the Merger Agreement. Fees and Expenses. Except as provided below, whether or not the Merger is consummated, all costs and expenses incurred in connection with the Offer, the Merger Agreement and the transactions contemplated by the Merger Agreement will be paid by the party incurring those costs and expenses. In the event that the Merger Agreement is terminated pursuant to paragraphs (e) or (f) under "Termination," or is terminated by Microtest pursuant to paragraph (b) or (c) under "Termination" at a time when Danaher could have terminated the Merger Agreement pursuant to paragraph (f) under "Termination," Microtest must promptly, and in any event within one business day after such termination, or in the case of termination by Microtest, prior to such termination, pay Danaher a termination fee of $2,500,000 (the "Termination Fee"), provided that in no event 24 will more than one Termination Fee be payable by Microtest, plus Danaher's aggregate expenses not to exceed $400,000 (the "Expense Fee"). In the event that the Merger Agreement is terminated pursuant to paragraph (g) under "Termination" and within 12 months of the date of that termination of the Merger Agreement an Acquisition Transaction is consummated, then Microtest must, prior to or simultaneously with the consummation of that transaction, pay Danaher the Termination Fee and the Expense Fee. As used in the previous sentence, "Acquisition Transaction" excludes (1) the acquisition by any person, in any single transaction or series of related transactions, of an aggregate number of Shares which, immediately following such acquisition, will represent no more than 20% of the issued and outstanding Shares (or securities convertible or exchangeable into, or exercisable for Shares, whether upon the passage of time or otherwise), to the extent such acquisition is not made for the purpose of, or as part of a plan for, acquiring control of Microtest, and (2) the acquisition by Microtest or any of its subsidiaries, in a merger, asset purchase, stock purchase or similar transaction, of any third party or business, provided that in the event that any portion of the consideration paid for the acquisition of such third party or business is in the form of capital stock or other securities, the 20% ownership limit set forth in the foregoing clause (1) is satisfied. Amendment. Subject to the provision described in the last sentence of "Directors," the Merger Agreement may be amended by Microtest, Danaher and the Purchaser at any time before or after any approval of the Merger Agreement by the stockholders of Microtest but, after any such approval, no amendment will be made which decreases the price to be paid for any of the Shares in the Merger or which adversely affects the rights of Microtest's stockholders thereunder without the approval of such stockholders. Extension; Waiver. Subject to the provision described in the last sentence of "Directors" in this Section 11, at any time prior to the Effective Time, the parties to the Merger Agreement may (a) extend the time for the performance of any of the obligations or other acts of the other, (b) waive any inaccuracies in the representations and warranties contained therein of any other party thereto or in any document, certificate or writing delivered pursuant to the Merger Agreement by any other party to the Merger Agreement or (c) waive compliance by any other party with any of the agreements or conditions in the Merger Agreement. Effects of Inability to Consummate the Merger. Pursuant to the Merger Agreement, following the consummation of the Offer and subject to certain other conditions, the Purchaser will be merged into Microtest. If, following the Offer, approval of Microtest's stockholders is required by applicable law in order to consummate the Merger of the Purchaser into Microtest, Microtest will either submit the Merger to Microtest's stockholders for approval or take action by written consent without a meeting of the stockholders, in the Purchaser's sole discretion. If the Merger is submitted to Microtest's stockholders for approval, the Merger will require the approval of the holders of not less than a majority of the outstanding Shares, including the Shares owned by the Purchaser. Provided that the Minimum Condition is satisfied without being reduced or waived, Danaher will, following completion of the Offer, own sufficient Shares to ensure that the required vote or written consent of the stockholders will be obtained and that the Merger will be consummated. If the Merger is consummated, stockholders of Microtest who elected not to tender their the Shares in the Offer will receive the same amount of consideration in exchange for each Share (other than Dissenting Shares) as they would have received in the Offer. If, following the consummation of the Offer, the Merger is not consummated, Danaher, which indirectly owns 100% of the common stock of the Purchaser, indirectly will control the number of Shares acquired by the Purchaser pursuant to the Offer. Under the Merger Agreement, promptly following payment by the Purchaser for Shares purchased pursuant to the Offer, and from time to time thereafter, subject to applicable law and at the request of the Purchaser, Microtest has agreed to take all actions necessary to cause a majority of the directors of Microtest to consist of persons designated by Danaher (whether by means of increasing the size of the board of directors or seeking the resignation of directors and causing Danaher designees to be elected). As a result of its ownership of such Shares and right to designate nominees for election to the Microtest Board, Danaher, indirectly, will be able to influence decisions of the Microtest Board and the decisions of the Purchaser as a stockholder of Microtest. This concentration of influence in one stockholder may adversely affect the market value of the Shares. 25 If Danaher controls more than 50% of the outstanding Shares following the consummation of the Offer but the Merger is not consummated, stockholders of Microtest, other than those affiliated with Danaher, will lack sufficient voting power to elect directors or to cause other actions to be taken which require majority approval. If for any reason following completion of the Offer the Merger is not consummated, Danaher and the Purchaser reserve the right to acquire additional Shares through private purchases, market transactions, tender or exchange offers or otherwise on terms and at prices that may be more or less favorable than those of the Offer or, subject to any applicable legal restrictions, to dispose of any or all Shares acquired by them. (c) Change of Control Agreements. Microtest entered into a Change of Control Agreement with Vincent C. Hren, its President, Chief Executive Officer and a director, on July 1, 2000. This agreement provides that should Mr. Hren's employment with Microtest be terminated without cause within two (2) years following a change of control or if he terminates his employment for any or no reason within two (2) years following a change of control, he will receive a lump sum severance payment equal to the sum of (a) 100% of his annualized base salary as of the day on which the change of control occurs, plus (b) 100% of an amount equal to the average incentive compensation paid or payable to him during, or for, the prior two calendar years immediately preceding the calendar year in which the change of control occurs. The agreement also provides for the continuation of life, disability, accident and group health insurance benefits, and other payments substantially similar to those that Mr. Hren was receiving prior to his termination for a period of 24 months after termination. If an agreement is entered into that will result in a change of control, before the change of control occurs, the compensation committee of Microtest's board is required to accelerate the exercisability of any options held by him to acquire common stock pursuant to their terms that are not yet exercisable ("Existing Options"). If Mr. Hren is employed by Microtest on the day on which a change of control occurs and at that time he holds any Existing Options that are not accelerated pursuant to the preceding sentence, he may be entitled to receive a special additional "Option Payment." If Mr. Hren is employed by Microtest on the day on which a change of control occurs, the incentive compensation to which he will be entitled will equal at least the incentive compensation to which he would have been entitled if the year were to end on the day on which the change of control occurs, based upon performance up to that date. If the present value of any "parachute payment" made to Mr. Hren under the Change of Control Agreement (together with payments under any other agreement) would cause the payment to be characterized as an "excess parachute payment" as defined in Section 280G of the Internal Revenue Code (the "Code"), Microtest must make an additional payment to Mr. Hren in an amount equal to the excise tax he is required to pay under Section 4999 of the Code plus any additional income tax liability resulting from such payment. The consummation of the Offer will constitute a "change of control" for purposes of the Change of Control Agreement. Microtest has estimated that, currently, it would be obligated to pay Mr. Hren approximately $325,000 pursuant to the Change of Control Agreement provisions described above, excluding amounts to be paid to Mr. Hren upon the acceleration and cash out of his options in accordance with the terms of the Merger Agreement and Change of Control Agreement, if Mr. Hren's employment is terminated by Microtest or Mr. Hren as described above. Microtest entered into a Change of Control Agreement with William R. Crowell, the Chief Financial Officer, Treasurer and Secretary, on July 1, 2000. This agreement provides that should Mr. Crowell's employment with Microtest be terminated without cause within two (2) years following a change of control or if he terminates his employment for any or no reason within two (2) years following a change of control, he will receive a lump sum severance payment equal to the sum of (a) 100% of his annualized base salary as of the day on which the change of control occurs, plus (b) 100% of an amount equal to the incentive compensation paid or payable to him during, or for, the calendar year immediately preceding the calendar year in which the change of control occurs. The agreement also provides for the continuation of life, disability, accident and group health insurance benefits, and other payments substantially similar to those that Mr. Crowell was receiving prior to his termination for a period of 24 months after termination. If an agreement is entered into that will result in a change of control, before the change of control occurs, the compensation committee of Microtest's board is required to accelerate the exercisability of any Existing Options. If Mr. Crowell is employed by Microtest on the day on which a change of control occurs and at that time he holds any Existing Options that are not accelerated pursuant to the preceding sentence, he may be entitled to receive a special additional "Option Payment." If Mr. Crowell is employed by Microtest on the day on which a change of 26 control occurs, the incentive compensation to which he will be entitled will equal at least the incentive compensation to which he would have been entitled if the year were to end on the day on which the change of control occurs, based upon performance up to that date. If the present value of any "parachute payment" made to Mr. Crowell under the Change of Control Agreement (together with payments under any other agreement) would cause the payment to be characterized as an "excess parachute payment" as defined in Section 280G of the Code, Microtest must make an additional payment to Mr. Crowell in an amount equal to the excise tax he is required to pay under Section 4999 of the Code plus any additional income tax liability resulting from such payment. The consummation of the Offer will constitute a "change of control" for purposes of the Change of Control Agreement. Microtest has estimated that, currently, it would be obligated to pay Mr. Crowell approximately $250,000 pursuant to the Change of Control Agreement provisions described above, excluding amounts to be paid to Mr. Crowell upon the accelearation and cash out of his options in accordance with the terms of the Merger Agreement and Change of Control Agreement, if Mr. Crowell's employment is terminated by Microtest or Mr. Crowell as described above. (d) Confidentiality Agreement. On February 25, 2001, Danaher executed a confidentiality agreement with Microtest, as amended May 22, 2001 (the "Confidentiality Agreement"). The Confidentiality Agreement contains customary provisions pursuant to which, among other things, Danaher agreed on behalf of itself and its representatives, subject to certain exceptions, to keep confidential all of Microtest's nonpublic, confidential or proprietary information furnished to it, and to use the confidential information solely in connection with evaluating a business combination between the parties. In addition, Danaher agreed not to disclose to any third parties the fact that negotiations between the parties were taking place. The Confidentiality Agreement also provides that Danaher will not, without the prior written consent of Microtest, knowingly solicit for hire any person currently employed by Microtest, until May 22, 2002 or so long as such person is employed by Microtest. In addition, the confidentiality agreement contains a standstill provision pursuant to which, among other things, until May 22, 2002, without the consent of the Microtest Board, neither Danaher nor its representatives will, in any manner: . acquire, propose or offer to acquire, or agree to acquire (directly or indirectly, by purchase or otherwise) any securities or direct or indirect rights to acquire any securities of Microtest or any subsidiaries thereof, or of any successor to or person in control of Microtest, or any assets of Microtest or any subsidiary or division thereof or of any such successor or controlling person, except for up to 5% of Microtest's public common stock; . make, or in any way participate, directly or indirectly, in, any solicitation of proxies to vote or seek to advise or influence any person or entity with respect to the voting of any securities of Microtest or otherwise seek to control or influence the management of Microtest and the Microtest Board; . make any public announcement with respect to, or submit a proposal for, or offer of (with or without conditions) any extraordinary transaction involving Microtest or any of its securities or assets, or take any action that might force Microtest to make a public announcement regarding any of the matters of the type set forth in this or any of the foregoing bullet points; or . form, join or in any way participate as a "group" (as defined in Section 13(d)(3) of the Securities Exchange Act) in connection with any of the foregoing bullet points. (e) Statutory Requirements. In general, under the GCL, a merger of two Delaware corporations requires the adoption of a resolution by the board of directors of each of the corporations desiring to merge approving an agreement of merger containing provisions with respect to certain statutorily specified matters, and the approval of such agreement of merger by the stockholders of each corporation by the affirmative vote of the holders of a majority of all the outstanding shares of stock entitled to vote on such merger. The Shares entitle the holders thereof to voting rights. The GCL also provides that, if a parent company owns at least 90% of each class of stock of a subsidiary, the parent company can effect a short-form merger with that subsidiary without the action of the other stockholders of the subsidiary. Accordingly, if, as a result of the Offer or otherwise the Purchaser acquires or controls the voting power of at least 90% of the outstanding Shares, the Purchaser could, and intends to, effect the Merger without prior notice to, or any action by, any other stockholder of Microtest. 27 (f) Appraisal Rights. No appraisal rights are available in connection with the Offer. However, if the Merger is consummated, stockholders of Microtest will have certain rights under Section 262 of the GCL to dissent and demand appraisal of, and payment in cash of the fair value of, Dissenting Shares. Such rights, if the statutory procedures were complied with, could lead to a judicial determination of the fair value (excluding any element of value arising from the accomplishment or expectation of the Merger) required to be paid in cash to such dissenting holders for their Dissenting Shares. Any such judicial determination of the fair value of Dissenting Shares could be based upon considerations other than, or in addition to, the price per Share paid in the Offer and the market value of the Dissenting Shares, including asset values and the investment value of the Dissenting Shares. The value so determined could be more or less than the price per Share pursuant to the Offer or the consideration per Share to be paid in the Merger. In addition, several decisions by Delaware courts have held that, in certain instances, a controlling stockholder of a corporation involved in a merger has a fiduciary duty to the other stockholders that requires the merger to be fair to such other stockholders. In determining whether a merger is fair to minority stockholders, the Delaware courts have considered, among other things, the type and amount of consideration to be received by the stockholders and whether there were fair dealings among the parties. Although the remedies of rescission or other damages are possible in an action challenging a merger as a breach of fiduciary duty, decisions of the Delaware courts have indicated that in most cases the remedy available in a merger that is found not to be "fair" to minority stockholders is a damages remedy based on essentially the same principles as an appraisal. The foregoing summary of the rights of objecting stockholders does not purport to be a complete statement of the procedures to be followed by stockholders desiring to exercise any available dissenters' rights. The preservation and exercise of dissenters' rights require strict adherence to the applicable provisions of the GCL. (g) Plans for Microtest. In connection with the Offer, Danaher and the Purchaser have reviewed and will continue to review various possible business strategies that they might consider in the event that the Purchaser acquires control of Microtest, whether pursuant to this Offer, the Merger or otherwise. Such changes could include, among other things, changes in Microtest's business, corporate structure, capitalization and management. (h) "Going Private" Transactions. The SEC has adopted Rule 13e-3 under the Securities Exchange Act which is applicable to certain "going private" transactions and which may, under certain circumstances, be applicable to the Merger. However, Rule 13e-3 would be inapplicable if (a) the Shares are deregistered under the Securities Exchange Act prior to the Merger or other business combination or (b) the Merger or other business combination is consummated within one year after the purchase of the Shares pursuant to the Offer and the amount paid per Share in the Merger or other business combination is at least equal to the amount paid per Share in the Offer. If applicable, Rule 13e-3 requires, among other things, that certain financial information concerning the fairness of the proposed transaction and the consideration offered to minority stockholders in such transaction be filed with the SEC and disclosed to stockholders prior to the consummation of the transaction. 12. Source and Amount of Funds. The Purchaser estimates that the total amount of funds required to purchase all outstanding Shares, other securities and rights pursuant to the Offer and to pay related fees and expenses will be approximately $75 million, plus debt to be assumed. Danaher will ensure that the Purchaser has sufficient funds to acquire all of the outstanding Shares pursuant to the Offer and the Merger. The funds necessary to close the Offer and the Merger will come from Danaher's cash on hand. 28 13. Dividends and Distributions. The Merger Agreement provides that, without the prior written consent of Danaher, Microtest will not, and will not permit any of its subsidiaries to, from May 21, 2001 to the Effective Time, (a) issue, reissue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, reissuance, sale, pledge, disposal, grant or encumbrance of (1) any shares of capital stock of any class of Microtest or any of its subsidiaries, or securities convertible into any such capital stock, or any rights, warrants or options to acquire any such convertible securities or capital stock, or any other ownership interest in Microtest or any of its subsidiaries, other than the issuance of Shares (and the related preferred share purchase rights), in accordance with the terms of the instruments governing such issuance on the date hereof, pursuant to the exercise of the Options outstanding on June 12, 2001 (or if a Triggering Event (as defined in the Rights Agreement) by a party other than Danaher or the Purchaser shall occur, pursuant to the exercise of the preferred share purchase rights), or (2) any other securities in respect of, in lieu of, or in substitution for, Shares outstanding as of June 12, 2001, (b) alter or make any other changes in its capital structure, or (c) declare, set aside or pay any dividend or other distribution (whether in cash, securities or property or any combination thereof) in respect of any class or series of its capital stock other than between Microtest and any of its wholly-owned subsidiaries. 14. Conditions of the Offer. Notwithstanding any other provision of the Offer, the Purchaser will not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated under the Securities Exchange Act (relating to the Purchaser's obligation to pay for or return tendered Shares promptly after termination or withdrawal of the Offer), pay for any tendered Shares, and may, subject to Article One of the Merger Agreement, terminate or, subject to Article Eight of the Merger Agreement, amend, the Offer and/or delay the acceptance of any tendered Shares for payment, if (A) there will not be validly tendered and not properly withdrawn prior to the Expiration Date that number of Shares which, when added to any shares already owned by Danaher or any of its subsidiaries, represents at least a majority of the total number of Shares outstanding on a fully diluted basis on the date of purchase (not taking into account the related preferred share purchase rights) (the "Minimum Condition"), (B) any applicable waiting period or approval under the HSR Act or any applicable domestic or foreign statutes or regulations that suspends the right to close the transactions contemplated by the Merger Agreement will not have expired or been terminated or obtained, (C) any consent from any person or governmental entity will not have been obtained on or prior to the Expiration Date, except for those the failure of which to be obtained would not reasonably be expected to have a Material Adverse Effect on Microtest, or (D) at any time on or after June 12, 2001, and on or prior to the Expiration Date, any of the following events (each, an "Event") will occur: (a) there will be any action taken, or any statute, rule, regulation, legislation, interpretation, judgment, order or injunction enacted, enforced, promulgated, amended, issued or deemed applicable to the Offer or the Merger, by any legislative body, court, government or governmental, administrative or regulatory authority or agency or any other governmental entity, domestic or foreign, other than the application of the waiting period provisions of the HSR Act to the Offer or to the Merger, that would reasonably be expected to, directly or indirectly: (1) make illegal or otherwise prohibit consummation of the Offer or the Merger, (2) prohibit or materially limit the ownership or operation by Danaher or the Purchaser of all or any material portion of the business or assets of Microtest or any of its subsidiaries taken as a whole or compel Danaher or the Purchaser to dispose of or hold separately all or any material portion of the business or assets of Danaher or the Purchaser or Microtest or any of its subsidiaries taken as a whole, or seek to impose any material limitation on the ability of Danaher or the Purchaser to conduct its business or own such assets, in any such case under this clause (2), which would reasonably be expected to have a Material Adverse Effect on Danaher or a Material Adverse Effect on Microtest, (3) impose material limitations on the ability of Danaher or the Purchaser effectively to acquire, hold or exercise full rights of ownership of the Shares, including, without limitation, the right to vote any Shares acquired or owned by the Purchaser or Danaher on all matters properly presented to the Microtest stockholders, or (4) require divestiture by Danaher or the Purchaser of any Shares; or 29 (b) there will be instituted or pending any action or proceeding by any governmental entity seeking, or that would reasonably be expected to result in, any of the consequences referred to in clauses (1) through (4) of paragraph (a) above or by any third party for which there is a substantial likelihood of resulting in any of the consequences referred to in clauses (1) through (4) of paragraph (a) above; or (c) any event or change will have occurred in the business, assets, liabilities, financial condition or results of operations of Microtest or any of its subsidiaries that has, or could reasonably be expected to have, a Material Adverse Effect on Microtest; or (d) (1) the Microtest Board or any committee of the Microtest Board will have withheld or withdrawn or will have modified or amended in a manner adverse to Danaher or the Purchaser, the approval, adoption or recommendation, as the case may be, of the Offer, the Merger or the Merger Agreement, or will have approved or recommended any Acquisition Transaction, (2) any person will have entered into an agreement, agreement in principle or any other contract with Microtest with respect to an Acquisition Transaction, or (3) the Microtest Board or any committee of the Microtest Board will have resolved to do or enter into any of the foregoing; or (e) Microtest, the Purchaser and Danaher will have reached an agreement that the Offer or the Merger Agreement be terminated, or the Merger Agreement will have been terminated in accordance with its terms; or (f) any of the representations and warranties of Microtest set forth in the Merger Agreement, when read without any exception or qualification as to materiality or Material Adverse Effect on Microtest, will not be true and correct, as if those representations and warranties were made at the time of such determination (except as to any such representation or warranty which speaks as of a specific date, which must be untrue or incorrect as of that specific date) except where the failure to be so true and correct would not, individually or in the aggregate, reasonably be expected to (1) have a Material Adverse Effect on Microtest, (2) prevent or materially delay the consummation of the Offer, (3) materially increase the cost of the Offer to the Purchaser or (4) have a material adverse effect on the benefits to Danaher of the transactions contemplated by the Merger Agreement; or (g) Microtest will have failed to perform in any material respect or to comply in any material respect with any of its material obligations, covenants or agreements under the Merger Agreement required to be performed or complied with prior to the time of such determination; or (h) there will have occurred, and continue to exist, (1) any general suspension of, or limitation on prices for, trading in securities on the New York Stock Exchange or on the over-the-counter stock market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System, (2) any decline of at least 25% in either the Dow Jones Average of Industrial Stocks or the Standard & Poor's 500 Index from the close of business on the last trading day immediately preceding the date of the Merger Agreement through the applicable Expiration Date, (3) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, or (4) a commencement of a war, commencement of armed hostilities that has or is reasonably likely to have a Material Adverse Effect on Microtest, or a material limitation (whether or not mandatory) by any governmental entity on the extension of credit by banks or other lending institutions; or (i) any of the directors of Microtest, and, to the extent requested by Purchaser, of any or all of Microtest's subsidiaries, shall not have submitted a letter of resignation effective as of the Effective Time, or any such letter of resignation shall no longer be in full force and effect. The foregoing conditions (including those set forth in clauses (A), (B) and (C) of the initial paragraph of this Section 14) are for the benefit of Danaher and the Purchaser and may be asserted by Danaher or the Purchaser regardless of the circumstances giving rise to any such conditions, and may be waived by Danaher or the Purchaser in whole or in part at any time and from time to time (provided that no individual condition may be reasserted after it has been waived, and provided further that, except for the conditions set forth in clause 30 (B) of the initial paragraph, no condition may be waived after the Expiration Date) in each case in the exercise of the reasonable discretion of Danaher and the Purchaser and subject to the terms of the Merger Agreement. The failure by Danaher or the Purchaser at any time to exercise any of the foregoing rights will not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. A public announcement may be made of a material change in, or waiver of, such conditions and the Offer may, in certain circumstances, be extended in connection with any such change or waiver. As used in the Merger Agreement, the term "Material Adverse Effect on Microtest" means any change in or effect on the business, assets, liabilities, financial condition or results of operations of Microtest and its subsidiaries taken as a whole that, individually or in the aggregate with all other changes and effects, would reasonably be expected to be materially adverse to Microtest and its subsidiaries taken as a whole, other than (a) the effects of changes that are generally applicable to (i) the United States economy or securities markets, or (ii) the world economy or international securities markets, and (b) changes or effects to the extent arising from the announcement of the Merger Agreement and the transactions contemplated thereby (including the sale or other disposition of the Excluded Business, and the shut-down of the NAS Business (excluding the Excluded Business), contemplated by the Merger Agreement and any loss of relationships with customers, suppliers, distributors, sales representatives or employees or the delay or cancellation of orders for products or services, in each case to the extent arising from such announcement); provided, that a change in the market price or trading volume of the Shares will not, in and of itself, constitute a Material Adverse Effect on Microtest (it being understood that this proviso does not exclude any underlying change or effect which resulted in such change in the market price or trading volume). As used in the Merger Agreement, the term "Material Adverse Effect on Danaher" means any change in or effect on the business, assets, liabilities, financial condition or results of operations of Danaher or any of its subsidiaries that, individually or in the aggregate, would be materially adverse to Danaher and its subsidiaries taken as a whole. 15. Legal Matters; Required Regulatory Approvals. Except as set forth in this Offer to Purchase, based on our review of publicly available filings by Microtest with the SEC and other information regarding Microtest, we are not aware of any licenses or regulatory permits that appear to be material to the business of Microtest and its subsidiaries, taken as a whole, and that might be adversely affected by our acquisition of Shares in the Offer. In addition, except as set forth in this Offer to Purchase, we are not aware of any filings, approvals or other actions by or with any governmental authority or administrative or regulatory agency that would be required for our acquisition or ownership of the Shares. Should any such approval or other action be required, we expect to seek such approval or action, except as described under "State Takeover Laws." Should any such approval or other action be required, we cannot be certain that we would be able to obtain any such approval or action without substantial conditions or that adverse consequences might not result to Microtest's or its subsidiaries' businesses, or that certain parts of Microtest's, Danaher's, the Purchaser's or any of their respective subsidiaries' businesses might not have to be disposed of or held separate in order to obtain such approval or action. In that event, we may not be required to purchase any Shares in the Offer. See Introduction and Section 14 for a description of the conditions to the Offer. State Takeover Laws. A number of states (including Delaware, where Microtest is incorporated) have adopted takeover laws and regulations that purport to be applicable to attempts to acquire securities of corporations that are incorporated in those states or that have substantial assets, stockholders, principal executive offices or principal places of business in those states. To the extent that these state takeover statutes purport to apply to the Offer or the Merger, we believe that those laws conflict with U.S. federal law and are an unconstitutional burden on interstate commerce. In 1982, the Supreme Court of the United States, in Edgar v. Mite Corp., invalidated on constitutional grounds the Illinois Business Takeovers Statute, which as a matter of state securities law made takeovers of corporations meeting certain requirements more difficult. The reasoning 31 in that decision is likely to apply to certain other state takeover statutes. In 1987, however, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the United States held that the State of Indiana could as a matter of corporate law and, in particular, those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining stockholders, as long as those laws were applicable only under certain conditions. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a federal district court in Oklahoma ruled that the Oklahoma statutes were unconstitutional insofar as they apply to corporations incorporated outside Oklahoma, because they would subject those corporations to inconsistent regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a federal district court in Tennessee ruled that four Tennessee takeover statutes were unconstitutional as applied to corporations incorporated outside Tennessee. This decision was affirmed by the United States Court of Appeals for the Sixth Circuit. In December 1988, a federal district court in Florida held, in Grand Metropolitan PLC v. Butterworth, that the provisions of the Florida Affiliated Transactions Act and the Florida Control Share Acquisition Act were unconstitutional as applied to corporations incorporated outside of Florida. We have not attempted to comply with any state takeover statutes in connection with the Offer or the Merger. We reserve the right to challenge the validity or applicability of any state law allegedly applicable to the Offer or the Merger, and nothing in this Offer to Purchase nor any action that we take in connection with the Offer is intended as a waiver of that right. In the event that it is asserted that one or more takeover statutes apply to the Offer or the Merger, and it is not determined by an appropriate court that the statutes in question do not apply or are invalid as applied to the Offer or the Merger, as applicable, we may be required to file certain documents with, or receive approvals from, the relevant state authorities, and we might be unable to accept for payment or purchase Shares tendered in the Offer or be delayed in continuing or consummating the Offer. In that case, we may not be obligated to accept for purchase, or pay for, any Shares tendered. See Section 14. Antitrust. Under the HSR Act and the related rules and regulations that have been issued by the FTC, certain acquisition transactions may not be consummated until certain information and documentary material has been furnished for review by the FTC and the Antitrust Division and certain waiting period requirements have been satisfied. These requirements apply to the Purchaser's acquisition of Shares in the Offer and the Merger. Under the HSR Act, the purchase of Shares in the Offer may not be completed until the expiration of a 15-calendar-day waiting period following the filing of certain required information and documentary material concerning the Offer with the FTC and the Antitrust Division, unless the waiting period is earlier terminated by the FTC and the Antitrust Division. Danaher filed a Premerger Notification and Report Form under the HSR Act with the FTC and the Antitrust Division in connection with the purchase of Shares in the Offer and the Merger on June 18, 2001, and the required waiting period with respect to the Offer and the Merger will expire at 11:59 p.m., New York City time, on July 3, 2001, unless earlier terminated by the FTC or the Antitrust Division, Danaher receives a request for additional information or documentary material prior to that time, or for any reason the initial waiting period is not deemed to have begun at the time of the initial filing. If, within the 15-calendar-day waiting period, either the FTC or the Antitrust Division requests additional information or documentary material from Danaher, the waiting period with respect to the Offer and the Merger would be extended for an additional period of ten calendar days following the date of Danaher's substantial compliance with that request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR rules. After that time, the waiting period could be extended only by court order or with Danaher's consent. The FTC or the Antitrust Division may terminate the additional ten-calendar-day waiting period before its expiration. In practice, complying with a request for additional information or documentary material can take a significant period of time. Although Microtest is required to file certain information and documentary material with the FTC and the Antitrust Division in connection with the Offer, neither Microtest's failure to make those filings nor a request made to Microtest from the FTC or the Antitrust Division for additional information or documentary material will extend the waiting period with respect to the purchase of Shares in the Offer and the Merger. 32 The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions, such as the acquisition of Shares in the Offer and the Merger. At any time before or after the Purchaser's purchase of Shares, the FTC or the Antitrust Division could take any action under the antitrust laws that either considers necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares in the Offer and the Merger, the divestiture of Shares purchased in the Offer or the divestiture of substantial assets of Danaher, the Purchaser, Microtest or any of their respective subsidiaries or affiliates. Private parties as well as state attorneys general may also bring legal actions under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Microtest is engaged, Danaher believes that the acquisition of Shares in the Offer and the Merger should not violate the applicable antitrust laws. Nevertheless, we cannot be certain that a challenge to the Offer and the Merger on antitrust grounds will not be made, or, if such challenge is made, what the result will be. Other Foreign Approvals. According to publicly available information, Microtest conducts business in a number of foreign countries and jurisdictions. In connection with the acquisition of the Shares in the Offer or the Merger, the laws of certain of those foreign countries and jurisdictions may also require the filing of information with, or the obtaining of the approval or consent of, governmental authorities in such other countries and jurisdictions. The governments in those countries and jurisdictions might attempt to impose additional conditions on the Surviving Corporation's operations conducted in those countries and jurisdictions as a result of the acquisition of the Shares in the Offer or the Merger. If such approvals or consents are found to be required the parties intend to make the appropriate filings and applications. In the event such a filing or application is made for the requisite foreign approvals or consents, we cannot be certain that such approvals or consents will be granted and, if such approvals or consents are received, we cannot be certain as to the date of those approvals or consents. In addition, we cannot be certain that we will be able to cause Microtest or its subsidiaries to satisfy or comply with those laws or that compliance or noncompliance will not have adverse consequences for Microtest or any subsidiary after purchase of the Shares pursuant to the Offer or the Merger. Both Danaher and Microtest are required to file a pre-merger notification with the Administrative Council for Economic Defense of Brazil ("CADE"), that country's antitrust regulatory agency. Danaher expects that the parties will make these filings promptly following the date of this Offer to Purchase. CADE does not require that Danaher, the Purchaser or Microtest obtain any clearance or approval from it in order for the Purchaser to purchase shares in the Offer or consummate the Merger, although certain post-closing implementation matters in Brazil may need to be postponed until Brazilian clearance is received. 16. Fees and Expenses. We have retained D.F. King & Co., Inc. as Information Agent in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telex, telegraph and personal interview and may request brokers, banks, agents, dealers and other nominee stockholders to forward material relating to the Offer to beneficial owners of Shares. We will pay the Information Agent reasonable and customary compensation for these services in addition to reimbursing the Information Agent for its reasonable out-of-pocket expenses. We have agreed to indemnify the Information Agent against certain liabilities and expenses in connection with the Offer, including certain liabilities under the U.S. federal securities laws. In addition, we have retained SunTrust Bank as the Depositary. We will pay the Depositary reasonable and customary compensation for its services in connection with the Offer, will reimburse the Depositary for its reasonable out-of-pocket expenses and will indemnify the Depositary against certain liabilities and expenses, including certain liabilities under the U.S. federal securities laws. Except as set forth above, we will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of Shares pursuant to the Offer. We will reimburse brokers, dealers, commercial banks and trust companies and other nominees, upon request, for customary clerical and mailing expenses incurred by them in forwarding offering materials to their customers. 33 17. Miscellaneous. We are not aware of any jurisdiction where the making of the Offer is prohibited by any applicable law. If we become aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares pursuant thereto, we will make a good faith effort to comply with that state statute or seek to have such statute declared in applicable to the Offer. If, after a good faith effort, we cannot comply with the state statute, we will not make the Offer to, nor will we accept tenders from or on behalf of, the holders of Shares in that state. We have filed with the SEC a Schedule TO, together with exhibits, furnishing certain additional information with respect to the Offer, and may file amendments to our Schedule TO. Our Schedule TO and any exhibits or amendments may be examined and copies may be obtained from the SEC in the same manner as described in Section 8 with respect to information concerning Microtest, except that copies will not be available at the regional offices of the SEC. We have not authorized any person to give any information or to make any representation on our behalf not contained in this Offer to Purchase or in the Letter of Transmittal and, if given or made, you should not rely on any such information or representation as having been authorized. Neither the delivery of the Offer to Purchase nor any purchase pursuant to the Offer will under any circumstances create any implication that there has been no change in the affairs of Danaher, the Purchaser, Microtest or any of their respective subsidiaries since the date as of which information is furnished or the date of this Offer to Purchase. PHOENIX ACQUISITION CORP. June 21, 2001 34 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF DANAHER AND THE PURCHASER Directors and executive officers of Danaher. The following table sets forth the name and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director and executive officer of Danaher. Unless otherwise indicated below each occupation set forth opposite each person refers to employment with Danaher. Unless otherwise indicated, the business address of each such person is c/o Danaher, at 2099 Pennsylvania Avenue, NW, 12th Floor, Washington, D.C. 20006-1813, and each such person is a citizen of the United States of America. 1. Directors of Danaher
Present Principal Occupation and Five-Year Name Employment History ---- ------------------------------------------ Mortimer M. Caplin......... Senior Member of Caplin & Drysdale, a law firm in Washington, D.C., for over five years; Director of Fairchild Corporation and Presidential Realty Corporation. Caplin & Drysdale, One Thomas Circle NW, Suite 1100, Washington, DC 20005 Donald J. Ehrlich.......... President, Chairman and Chief Executive Officer of Wabash National Corp. for over five years; Director of Indiana Secondary Market for Educational Loans, Inc. and INB National Bank, N.W. Wabash National Corp. 1000 Sagamore Parkway South, Lafayette, IN 47905 Walter G. Lohr, Jr. ....... Partner of Hogan & Hartson, a law firm in Baltimore, Maryland, for over five years. Hogan & Hartson, 111 S. Calvert Street, Suite 1600, Baltimore, MD 21202-6191 Mitchell P. Rales.......... Chairman of the Executive Committee of Danaher since 1990; during the past five years he has been a principal in a number of private business entities with interests in manufacturing companies, media operations and publicly traded securities; director of Imo Industries Inc. Steven M. Rales............ Chairman of the Board of Danaher since 1984; during the past five years he has been a principal in a number of private business entities with interests in manufacturing companies, media operations and publicly traded securities; director of Imo Industries Inc. H. Lawrence Culp, Jr. ..... President and Chief Executive Officer of Danaher since May 2001; appointed Chief Operating Officer in 2000 and Executive Vice President in 1999; has served in general management positions within Danaher for more than the past five years. Alan G. Spoon.............. General partner of Polaris Venture Partners; director of American Management Systems, Inc., Human Genome Sciences, Inc. and Ticketmaster Online-CitySearch, Inc. Polaris Venture Partners, 1000 Winter Street, Waltham, MA 02451. A. Emmet Stephenson, Jr. .. President of Stephenson and Co., a private investment firm in Denver, Colorado for more than five years; Chairman of StarTek, Inc. for more than five years. Stephenson and Company, 100 Garfield Street, Denver, CO 80206.
35 2. Executive Officers of Danaher
Date Became Name Present Title Executive Officer ---- ------------- ----------------- Steven M. Rales......... Chairman of the Board 1984 Mitchell P. Rales....... Chairman of the Executive Committee 1984 H. Lawrence Culp, Jr.... President and Chief Executive Officer 1995 Patrick W. Allender..... Executive Vice President, Chief Financial Officer and Secretary 1987 Philip W. Knisely....... Executive Vice President 2000 Steven E. Simms......... Executive Vice President 1996 William J. Butler....... Vice President and Group Executive 1999 Thomas S. Gross......... Vice President and Group Executive 1999 Daniel L. Comas......... Vice President--Corporate Development 1996 W. Bruce Graham......... Vice President--Danaher Business Systems 2000 James H. Ditkoff........ Vice President--Finance and Tax 1991 Dennis A. Longo......... Vice President--Human Resources 1997 Christopher C. McMahon.. Vice President--Controller 1999 Daniel A. Pryor......... Vice President--Strategic Development 2000 Uldis K. Sipols......... Vice President--Procurement 1999
Steven M. Rales has served as Chairman of the Board since January 1984. In addition, during the past five years he has been a principal in a number of private business entities with interests in manufacturing companies, media operations and publicly traded securities. He is also a director of Imo Industries, Inc. Mitchell P. Rales has served as a director of Danaher since January 1984. In addition, during the past five years he has been a principal in a number of private business entities with interests in manufacturing companies, media operations and publicly traded securities. He is also a director of Imo Industries, Inc. H. Lawrence Culp, Jr. was appointed President and Chief Executive Officer in May 2001. Previously, Mr. Culp had been appointed Chief Operating Officer of Danaher in 2000 and Executive Vice President in 1999. He has served in general management positions within Danaher for more than the past five years. Patrick W. Allender has served as Chief Financial Officer of Danaher since March 1987 and was appointed Executive Vice President in November 1999. Philip W. Knisely was appointed Executive Vice President of Danaher in 2000. He had previously served Colfax Corporation (a diversified industrial manufacturing company) as President and Chief Executive Officer. Colfax Corporation is majority-owned by Steven and Mitchell Rales. Steven E. Simms was appointed Executive Vice President of Danaher in 1999. He joined Danaher in 1996 as Vice President and Group Executive, and had previously served Black & Decker, most recently as President--Worldwide Accessories Business. William J. Butler was appointed Vice President and Group Executive of Danaher in 1999. He has served in general management positions within Danaher for more than the past five years. Thomas S. Gross was appointed Vice President and Group Executive of Danaher in 1999. He had previously served Xycom Automation Inc. (a provider of automation hardware and software) as President, and prior to joining 6 Xycom in 1998, he served Allen-Bradley/Rockwell Automation (a provider of industrial control and automation products) in various management positions for more than five years. Daniel L. Comas was appointed Vice President-Corporate Development of Danaher in 1996. He has served Danaher in an executive capacity in the corporate development area for more than the past five years. 36 W. Bruce Graham was appointed Vice President-Danaher Business Systems (DBS) in 2000. He previously served in general management positions within Danaher's Hand Tool Group for more than the past five years. James H. Ditkoff has served as Vice President-Finance and Tax of Danaher since January 1991. Dennis A. Longo was appointed Vice President-Human Resources of Danaher in 1997. He has served Danaher as a human resources executive for more than the past five years. Christopher C. McMahon was appointed Vice President-Controller of Danaher in August 1999. He has served in financial management positions within Danaher for more than the past five years. Daniel A. Pryor was appointed Vice President-Strategic Development of Danaher in 2000. He has served in general management positions within Danaher for more than the past five years. Uldis K. Sipols was appointed Vice President-Procurement of Danaher in 1999. He had previously served AMP, Inc. (an electronic products manufacturer) as Vice President, Global Procurement, and before joining AMP in 1997 held various procurement management positions with Ford Motor Company for more than five years. Directors and executive officers of the Purchaser. The following table sets forth the name and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director and executive officer of the Purchaser. Unless otherwise indicated below each occupation set forth opposite each person refers to employment with Danaher. The business address of each such person is c/o Danaher, at 2099 Pennsylvania Avenue, NW, 12th Floor, Washington, D.C. 20006-1813, and each such person is a citizen of the United States of America. 1. Directors of Purchaser
Present Principal Occupation and Five-Year Employment Name History ---- ----------------------------------------------------- Patrick W. Allender..... Chief Financial Officer of Danaher since March 1987; appointed Executive Vice President in November 1999. James H. Ditkoff........ Vice President--Finance and Tax of Danaher since January 1991. Christopher C. McMahon.. Vice President--Controller of Danaher since 1999; has served in financial management positions within Danaher for more than the past five years.
2. Executive Officers of the Purchaser
Date Became Name Present Title Executive Officer - ---- ------------- ----------------- Christopher Odell............... President 2001 Christopher C. McMahon.......... Vice President and Secretary 2001 Mark Kuhn....................... Vice President and Treasurer 2001 Daniel L. Comas................. Vice President 2001
Christopher Odell was appointed President of the Purchaser in June 2001. Mr. Odell has served as President of Fluke Networks, Inc., a wholly-owned subsidiary of Danaher, since it was incorporated in April 2000. Mr. Odell served as manager of the Networks Division of Fluke Corporation from June 1996 until April 2000. Christopher C. McMahon was appointed Vice President and Secretary of the Purchaser in June 2001. Mr. McMahon was appointed Vice President-Controller of Danaher in August 1999. He has served in financial management positions within Danaher for more than the past five years. 37 Mark Kuhn was appointed Vice President and Treasurer of the Purchaser in June 2001. Mr. Kuhn has served as Vice President and Treasurer of Fluke Networks, Inc. since January 2001. Mr. Kuhn served as corporate controller of HomeAdvisor Technologies, Inc., a subsidiary of Microsoft Corporation, from August 2000, until January 2001. From June 1998, to August 2000, Mr. Kuhn was Vice President Finance of Fluke Corporation. From 1994 to June 1998, Mr. Kuhn was Vice President and Manufacturing Manager of the Danaher Controls Group of Danaher Corporation. Daniel L. Comas was appointed Vice President of the Purchaser in June 2001. Mr. Comas is the Vice President-Corporate Development of Danaher. He has served Danaher in an executive capacity in the corporate development area for more than the past five years. 38 Facsimile copies of Letters of Transmittal, properly completed and duly executed, will be accepted. The appropriate Letter of Transmittal, Share Certificates and any other required documents should be sent or delivered by each stockholder of Microtest or such stockholder's broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below: The Depositary for the Offer is: SunTrust Bank Facsimile for Eligible By Mail: By Overnight Courier or Institutions: SunTrust Bank By Hand: 404-865-5371 Post Office Box 4625 SunTrust Bank Atlanta, Georgia 30302 Stock Transfer Confirm by Telephone: Department 1-800-568-3476 58 Edgewood Avenue Room 225, Annex Atlanta, Georgia 30303 You may direct questions and requests for assistance to the Information Agent at its address and telephone numbers set forth below. You may obtain additional copies of this Offer to Purchase, the Letter of Transmittal and other tender offer materials from the Information Agent as set forth below and they will be furnished promptly at our expense. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: D.F. King & Co., Inc. 77 Water Street New York, New York 10005 Banks and Brokers Call Collect (212) 269-5550 All Others Call Toll Free (800) 207-2872 EX-99.A.2 3 dex99a2.txt LETTER OF TRANSMITTAL Exhibit 99(a)(2) Letter of Transmittal to Tender Shares of Common Stock (Including the Associated Preferred Share Purchase Rights) of Microtest, Inc. Pursuant to the Offer to Purchase Dated June 21, 2001 by Phoenix Acquisition Corp. an indirect, wholly-owned subsidiary of Danaher Corporation THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, JULY 19, 2001, UNLESS THE OFFER IS EXTENDED. The Depositary for the Offer is: SunTrust Bank Facsimile for Eligible By Mail: By Overnight Courier or Institutions: By Hand: 404-865-5371 SunTrust Bank SunTrust Bank Post Office Box 4625 Stock Transfer Confirm by Telephone: Atlanta, Georgia 30302 Department 1-800-568-3476 58 Edgewood Avenue Room 225, Annex Atlanta, Georgia 30303 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This Letter of Transmittal is to be completed by stockholders, either if Share Certificates (as defined below) are to be forwarded herewith or, unless an Agent's Message (as defined in the Offer to Purchase, as referred to below) is utilized, if tenders of Shares are to be made by book-entry transfer into the account of SunTrust Bank, as Depositary (the "Depositary"), at The Depository Trust Company (the "Book-Entry Transfer Facility" or "DTC") pursuant to the procedures set forth in Section 3 of the Offer to Purchase. Stockholders who tender Shares by book-entry transfer are referred to herein as "Book-Entry Stockholders." DESCRIPTION OF SHARES TENDERED - --------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) (Please Fill in, if Blank, Exactly as Name(s) Appear(s) on Share Certificate(s) and Share(s) Tendered Certificate(s)) (Attach Additional Signed List if Necessary)* - ------------------------------------------------------------------------------ Total Number of Shares Shares Number Certificate Represented by of Share(s) Number(s)* Certificate(s) Tendered** -------------------------------------------------- -------------------------------------------------- -------------------------------------------------- -------------------------------------------------- -------------------------------------------------- -------------------------------------------------- Total Shares
- -------------------------------------------------------------------------------- * Need not be completed by Book-Entry Stockholders. ** Unless otherwise indicated, all Shares represented by Share Certificates delivered to the Depositary will be deemed to have been tendered. See Instruction 4. Holders of outstanding shares of common stock of Microtest, Inc. ("Microtest"), par value $0.001 per share, including the associated preferred share purchase rights described below, (the "Shares"), whose certificates for such Shares (the "Share Certificates") are not immediately available or who cannot deliver their Share Certificates and all other required documents to the Depositary on or prior to the Expiration Date (as defined in the Offer to Purchase), or who cannot complete the procedure for book-entry transfer on a timely basis, must tender their Shares according to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary. NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY [_]CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER): Name of Tendering Institution: ___________________________________________ Account Number: __________________________________________________________ Transaction Code Number: _________________________________________________ [_]CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Owner(s): __________________________________________ Window Ticket Number (if any): ___________________________________________ Date of execution of Notice of Guaranteed Delivery: ______________________ Name of Institution that Guaranteed Delivery: ____________________________ Account Number: __________________________________________________________ Transaction Code Number: _________________________________________________ Ladies and Gentlemen: The undersigned hereby tenders to Phoenix Acquisition Corp., a Delaware corporation (the "Purchaser"), and an indirect, wholly-owned subsidiary of Danaher Corporation, a Delaware corporation ("Danaher"), the above-described shares of common stock, par value $0.001 per share, including the associated preferred share purchase rights issued pursuant to the Rights Agreement, dated as of April 4, 2001, as amended through June 12, 2001, between Microtest and American Stock Transfer & Trust Company as Rights Agent, (the "Shares"), of Microtest, at a purchase price of $8.15 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 21, 2001 (the "Offer to Purchase"), and in this Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). The undersigned understands that the Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its affiliates the right to purchase all or any portion of the Shares tendered pursuant to the Offer. Subject to, and effective upon, acceptance for payment of the Shares tendered herewith in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchaser all right, title and interest in and to all of the Shares that are being tendered hereby and any and all dividends, distributions, rights, other Shares or other securities issued, paid or distributed or issuable, payable or distributable in respect of such Shares on or after June 12, 2001 and prior to the transfer to the name of the Purchaser (or a nominee or transferee of the Purchaser) on Microtest's stock transfer records of the Shares tendered herewith (collectively, a "Distribution"), and appoints the Depositary the true and lawful agent, attorney-in-fact and proxy of the undersigned with respect to such Shares (and any Distribution), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver such Share Certificates (and any Distribution) or transfer ownership of such Shares (and any Distribution) on the account books maintained by the Book-Entry Transfer Facility, together, in either case, with appropriate evidences of transfer, to the Depositary for the account of the Purchaser, (b) present such Shares (and any Distribution) for transfer on the books of Microtest and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any Distribution), all in accordance with the terms and subject to the conditions of the Offer. The undersigned irrevocably appoints designees of the Purchaser as such undersigned's agents, attorneys-in-fact and proxies, with full power of substitution, to the full extent of such stockholder's rights with respect to the Shares (and any Distribution) tendered by such stockholder and accepted for payment by the Purchaser. All such powers of attorney and proxies shall be considered irrevocable and coupled with an interest. Such appointment will be effective when, and only to the extent that, the Purchaser accepts such Shares for payment. Upon such acceptance for payment, all prior attorneys, proxies and consents given by such stockholder with respect to such Shares (and any Distribution) will be revoked without further action, and no subsequent powers of attorney and proxies may be given nor any subsequent written consents executed (and, if given or executed, will not be deemed effective). The designees of the Purchaser will, with respect to the Shares (and Distributions) for which such appointment is effective, be empowered to exercise all voting and other rights of such stockholder as they in their sole discretion may deem proper at any annual or special meeting of Microtest stockholders or any adjournment or postponement thereof, by written consent in lieu of any such meeting or otherwise. The Purchaser reserves the right to require that, in order for the Shares to be deemed validly tendered, immediately upon the Purchaser's payment for such Shares, the Purchaser must be able to exercise full voting rights with respect to such Shares and all Distributions including, without limitation, voting at any meeting of stockholders. The undersigned hereby represents and warrants that (a) the undersigned has full power and authority to tender, sell, assign and transfer the undersigned's Shares (and any Distribution) tendered hereby, and (b) when the Shares are accepted for payment by the Purchaser, the Purchaser will acquire good, marketable and unencumbered title to the Shares (and any Distribution), free and clear of all liens, restrictions, charges and encumbrances, and the same will not be subject to any adverse claim and will not have been transferred to the Purchaser in violation of any contractual or other restriction on the transfer thereof. The undersigned, upon request, will execute and deliver any additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and any Distribution). In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of Purchaser any and all Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance or appropriate assurance thereof, the Purchaser will, subject to applicable law, be entitled to all rights and privileges as owner of any such Distribution and may withhold the entire purchase price or deduct from the purchase price the amount or value thereof, as determined by the Purchaser, in its sole discretion. All authority herein conferred or agreed to be conferred shall not be affected by and shall survive the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Tenders of Shares made pursuant to the Offer are irrevocable, except that Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date, and, unless theretofore accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after August 19, 2001. See Section 4 of the Offer to Purchase. The undersigned understands that tenders of Shares pursuant to any of the procedures described in Section 3 of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions set forth in the Offer, including the undersigned's representation that the undersigned owns the Shares being tendered. Unless otherwise indicated herein under "Special Payment Instructions," please issue the check for the purchase price and/or issue or return any certificate(s) for Shares not tendered or not accepted for payment in the name(s) of the registered holder(s) appearing under "Description of Shares Tendered." Similarly, unless otherwise indicated herein under "Special Delivery Instructions," please mail the check for the purchase price and/or any Share Certificate(s) not tendered or not accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing under "Description of Shares Tendered." In the event that both the "Special Delivery Instructions" and the "Special Payment Instructions" are completed, please issue the check for the purchase price and/or any Share Certificate(s) not tendered or accepted for payment in the name of, and deliver such check and/or such Share Certificates to, the person or persons so indicated. Unless otherwise indicated herein under "Special Payment Instructions," please credit any Shares tendered herewith by book-entry transfer that are not accepted for payment by crediting the account at the Book-Entry Transfer Facility designated above. The undersigned recognizes that the Purchaser has no obligation, pursuant to the Special Payment Instructions, to transfer any Shares from the name(s) of the registered holder(s) thereof if the Purchaser does not accept for payment any of the Shares so tendered. [_]CHECK HERE IF ANY SHARE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE BEEN LOST, STOLEN OR DESTROYED AND SEE INSTRUCTION 11 Number of Shares represented by lost, stolen or destroyed Share Certificates: ____________________________________________________________ SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1, 5, 6 and 7) (See Instructions 1, 5, 6 and 7) To be completed ONLY if Share To be completed ONLY if Share Certificate(s) not tendered or Certificate(s) not tendered or not accepted for payment and/or not accepted for payment and/or the check for the purchase price the check for the purchase price of Shares accepted for payment of Shares accepted for payment are to be issued in the name of are to be sent to someone other someone other than the than the undersigned or to the undersigned or if Shares undersigned at an address other tendered by book-entry transfer than that shown above. which are not accepted for payment are to be returned by Mail[_] check credit to an account maintained [_] certificate(s) to: at the Book-Entry Transfer Facility other than that Name ____________________________ designated above. (Please Print) Issue[_] check Address _________________________ [_] certificate(s) to: _________________________________ Name ____________________________ (Include Zip Code) (Please Print) _________________________________ Address _________________________ (Tax I.D. or Social Security No.) _________________________________ (See Substitute Form W-9) (Include Zip Code) _________________________________ (Tax I.D. or Social Security No.) (See Substitute Form W-9) [_] Credit Shares tendered by book-entry transfer that are not accepted for payment to DTC to the account set forth below _________________________________ (DTC Account No.) _________________________________ _________________________________ _________________________________ SIGN HERE (and Complete Substitute Form W-9) --------------------------------------------------------------------------- --------------------------------------------------------------------------- (Signature(s) of Stockholder(s)) Date: ____________ , 2001 (Must be signed by the registered holder(s) exactly as name(s) appear(s) on Share Certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by Share Certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please provide the following information and see Instruction 5.) Name(s): __________________________________________________________________ (Please Print) Capacity (full title): ____________________________________________________ Address: __________________________________________________________________ (Include Zip Code) Area Code and Telephone Number: ___________________________________________ Tax Identification or Social Security No.: ________________________________ (See Substitute Form W-9) Guarantee of Signature(s) (See Instructions 1 and 5) Authorized Signature: _____________________________________________________ Name: _____________________________________________________________________ (Please Print) Name of Firm: _____________________________________________________________ Address: __________________________________________________________________ (Include Zip Code) Area Code and Telephone Number: ___________________________________________ Dated: ____________, 2001 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Guarantee of Signatures. No signature guarantee is required on this Letter of Transmittal (a) if this Letter of Transmittal is signed by the registered holder(s) of Shares (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered herewith, unless such holder(s) has completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions," or (b) if such Shares are tendered for the account of a firm which is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP) or any other "eligible guarantor institution" (as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended) (each of the foregoing, an "Eligible Institution"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5 of this Letter of Transmittal. 2. Requirements of Tender. This Letter of Transmittal is to be completed by stockholders either if Share Certificates are to be forwarded herewith or, unless an Agent's Message is utilized, if tenders are to be made pursuant to the procedure for tender by book-entry transfer set forth in Section 3 of the Offer to Purchase. Share Certificates evidencing tendered Shares, or timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer of Shares into the Depositary's account at the Book-Entry Transfer Facility, as well as this Letter of Transmittal (or a facsimile hereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message in connection with a book-entry transfer, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth herein on or prior to the Expiration Date. Stockholders whose Share Certificates are not immediately available or who cannot deliver their Share Certificates and all other required documents to the Depositary on or prior to the Expiration Date or who cannot complete the procedure for delivery by book-entry transfer on a timely basis may tender their Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution; (b) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchaser, must be received by the Depositary on or prior to the Expiration Date; and (c) the Share Certificates (or a Book-Entry Confirmation) representing all tendered Shares in proper form for transfer, in each case, together with this Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry delivery, an Agent's Message) and any other documents required by this Letter of Transmittal, must be received by the Depositary within three Nasdaq National Market trading days after the date of execution of such Notice of Guaranteed Delivery. If Share Certificates are forwarded separately in multiple deliveries to the Depositary, a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) must accompany each such delivery. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. All tendering stockholders, by execution of this Letter of Transmittal (or a facsimile hereof), waive any right to receive any notice of the acceptance of their Shares for payment. 3. Inadequate Space. If the space provided herein is inadequate, the Share Certificate numbers and/or the number of Shares and any other required information should be listed on a separate signed schedule attached hereto. 4. Partial Tenders. (Not Applicable to Book-Entry Stockholders) If fewer than all the Shares evidenced by any Share Certificate submitted are to be tendered, fill in the number of Shares which are to be tendered in the box entitled "Number of Shares Tendered" in the "Description of Shares Tendered." In such cases, new Share Certificates for the Shares that were evidenced by your old Share Certificates, but were not tendered by you, will be sent to you, unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the Expiration Date. All Shares represented by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificate(s) without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any of the tendered Shares are registered in different names on several Share Certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of Share Certificates. If this Letter of Transmittal or any Share Certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to the Purchaser of their authority so to act must be submitted. If this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and transmitted hereby, no endorsements of Share Certificates or separate stock powers are required unless payment is to be made to or Share Certificates for Shares not tendered or not purchased are to be issued in the name of a person other than the registered holder(s). In such latter case, signatures on such Share Certificates or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Share Certificate(s) listed, the Share Certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear on the Share Certificate(s). Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. 6. Stock Transfer Taxes. Except as otherwise provided in this Instruction 6, the Purchaser will pay any stock transfer taxes with respect to the transfer and sale of Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if Share Certificate(s) for Shares not tendered or accepted for payment are to be registered in the name of, any person other than the registered holder(s), or if tendered Share Certificate(s) are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s) or such person) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes or an exemption therefrom, is submitted. Except as otherwise provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Share Certificate(s) listed in this Letter of Transmittal. 7. Special Payment and Delivery Instructions. If a check is to be issued in the name of, and/or Share Certificates for Shares not tendered or not accepted for payment are to be issued or returned to, a person other than the signer of this Letter of Transmittal or if a check and/or such Share Certificates are to be returned to a person other than the person(s) signing this Letter of Transmittal or to an address other than that shown in this Letter of Transmittal, the appropriate boxes on this Letter of Transmittal must be completed. A Book-Entry Stockholder may request that Shares not accepted for payment be credited to such account maintained at the Book-Entry Transfer Facility as such Book-Entry Stockholder may designate under "Special Payment Instructions." If no such instructions are given, such Shares not accepted for payment will be returned by crediting the account at the Book-Entry Transfer Facility designated above. 8. Waiver of Conditions. Subject to the terms and conditions of the Merger Agreement (as defined in the Offer to Purchase), the conditions of the Offer (other than the Minimum Condition, as defined in the Offer to Purchase) may be waived by the Purchaser in whole or in part at any time and from time to time in its sole discretion. 9. 31% Backup Withholding; Substitute Form W-9. Each tendering stockholder is required to provide the Depositary with a correct Taxpayer Identification Number ("TIN") on the Substitute Form W-9 which is provided under "Important Tax Information" below, and to certify, under penalties of perjury, (1) that such number is correct, (2) that such stockholder is not subject to backup withholding of federal income tax and (3) that such stockholder is a U.S. person. If a tendering stockholder has been notified by the Internal Revenue Service that such stockholder is subject to backup withholding, such stockholder must cross out item (2) of the Certification box of the Substitute Form W-9, unless such stockholder has since been notified by the Internal Revenue Service that such stockholder is no longer subject to backup withholding. Failure to provide the requisite information on the Substitute Form W-9 may subject the tendering stockholder to a $50 penalty imposed by the Internal Revenue Service and to 31% U.S. federal income tax withholding on the payment of the purchase price of all Shares purchased from such stockholder. If the tendering stockholder has not been issued a TIN and has applied for one or intends to apply for one in the near future, such stockholder should write "Applied For" in the space provided for the TIN in Part I of the Substitute Form W-9, and sign and date the Substitute Form W-9 and the Certificate of Awaiting Taxpayer Identification Number. If "Applied For" is written in Part I and the Depositary is not provided with a TIN by the time of the payment of the purchase price to the tendering stockholder pursuant to the Offer, the Depositary will withhold 31% on such payment. Each foreign stockholder must complete and submit an appropriate Form W-8 in order to be exempt from the 31% federal income tax backup withholding due on payments with respect to the Shares. If backup withholding applies, the Depositary is required to withhold 31% of any payments to be made to the stockholder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained by filing a tax return with the Internal Revenue Service. The Depositary cannot refund amounts withheld by reason of backup withholding. 10. Requests for Assistance or Additional Copies. Questions or requests for assistance may be directed to the Information Agent at its address and telephone number set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery also may be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies. 11. Lost, Destroyed or Stolen Certificates. If any Share Certificate has been lost, destroyed or stolen, the stockholder should promptly notify the Depositary. The stockholder then will be instructed as to the steps that must be taken in order to replace the Share Certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed Share Certificates have been followed. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR THE NOTICE OF GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE. IMPORTANT TAX INFORMATION Under federal income tax law, a stockholder whose tendered Shares are accepted for payment is required to provide the Depositary (as payer) with such stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is an individual, the TIN is his or her social security number. If a tendering stockholder is subject to backup withholding, such stockholder must cross out item (2) of the Certification box on the Substitute Form W-9. If the Depositary is not provided with the correct TIN, the stockholder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, payments that are made to such stockholder with respect to Shares purchased pursuant to the Offer may be subject to backup withholding. Certain stockholders (including, among others, certain corporations and foreign individuals and entities) are not subject to these backup withholding and reporting requirements. In order for a foreign stockholder to qualify as an exempt recipient, that stockholder must submit an appropriate Form W-8 certifying to that stockholder's foreign status. Appropriate Forms W-8 can be obtained from the Depositary. An exempt stockholder, other than a foreign stockholder, should furnish its TIN, write "Exempt" on the face of the Substitute Form W-9 below, and sign, date and return the Substitute Form W-9 to the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If backup withholding applies, the Depositary is required to withhold 31% of any payments made to the stockholder. Backup withholding is not an additional tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If backup withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. What Number to Give The Depositary. The stockholder is required to give the Depositary the social security number or employer identification number of the record owner of the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. If the tendering stockholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, such stockholder should write "Applied For" in the space provided for in the TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold 31% on all payments of the purchase price, but if a certified TIN is provided within 60 days, such amounts will be refunded. PAYER'S NAME: SunTrust Bank, as Depositary ----------------------------------------------------------------------------- Part I: PLEASE PROVIDE YOUR ----------------- TIN IN THE BOX AT RIGHT AND Social security SUBSTITUTE CERTIFY BY SIGNING AND DATING number Form W-9 BELOW. OR ----------------- Employer identification number ---------------------------------------------------- Request for Taxpayer Part II: For U.S. Payees Exempt from Backup Identification Number Withholding (write "Exempt" in this space: ________ and Certification ---------------------------------------------------- Part III: Certification. Under penalties of perjury, I certify that: 1. The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and 2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service ("IRS") that I am subject to backup withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and 3. I am a U.S. person (including a U.S. resident alien). Certification Instructions. You must cross out item 2 above if you have been notified by the IRS that you are subject to backup withholding because you have failed to report all interest or dividends on your tax return. However, if after being notified by the IRS that you are subject to backup withhold- ing you received another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out item 2. ----------------------------------------------------- Signature: ________________ Date: ___________, 2001 Name: _____________________ (please print) Note: Failure to complete and return this substitute Form W-9 may result in backup withholding of 31% of any payments made to you. Please review the enclosed guidelines for certification of taxpayer identification number on substitute Form W-9 for additional details. If you have applied for and are awaiting a TIN, you must write "Applied For" in the space for the TIN in Part I above and complete the following certificate. Certificate of Awaiting Taxpayer Identification Number I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide my taxpayer identification number within sixty (60) days, 31% of all reportable payments made to me thereafter will be withheld and remitted to the Internal Revenue Service until I provide a taxpayer identification number. Signature: _______________________________ Date: ________________ , 2001 Name: ____________________________________ (please print) The Information Agent for the Offer is: D.F. King & Co., Inc. 77 Water Street New York, New York 10005 Bankers and Brokers Call Collect (212) 269-5550 All Others Call Toll Free (800) 207-2872 June 21, 2001 EX-99.A.3 4 dex99a3.txt NOTICE OF GUARANTEED DELIVERY Exhibit 99(a)(3) Notice of Guaranteed Delivery to Tender Shares of Common Stock (Including the Associated Preferred Share Purchase Rights) of Microtest, Inc. to Phoenix Acquisition Corp. an indirect, wholly-owned subsidiary of Danaher Corporation (Not to be Used for Signature Guarantees) This Notice of Guaranteed Delivery or one substantially equivalent hereto must be used to accept the Offer (as defined below) if certificates for Shares (as defined below) are not immediately available or the certificates for Shares and all other required documents cannot be delivered to SunTrust Bank (the "Depositary") on or prior to the Expiration Date (as defined in the Offer to Purchase) or if the procedure for delivery by book-entry transfer cannot be completed on a timely basis. This instrument may be delivered by hand or transmitted by facsimile transmission or mailed to the Depositary. See Section 3 of the Offer to Purchase. The Depositary for the Offer is: SunTrust Bank Facsimile for Eligible By Mail: By Overnight Courier or Institutions: SunTrust Bank By Hand: 404-865-5371 Post Office Box 4625 SunTrust Bank Confirm by Telephone: Atlanta, Georgia 30302 Stock Transfer 1-800-568-3476 Department 58 Edgewood Avenue Room 225, Annex Atlanta, Georgia 30303 DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY. This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box in the Letter of Transmittal. The guarantee on the reverse side must be completed. i Ladies and Gentlemen: The undersigned hereby tender(s) to Phoenix Acquisition Corp., a Delaware corporation and an indirect, wholly-owned subsidiary of Danaher Corporation, a Delaware corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 21, 2001 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"), receipt of which is hereby acknowledged, the number of shares of common stock, par value $0.001 per share, including the associated preferred share purchase rights issued pursuant to the Rights Agreement, dated as of April 4, 2001, as amended through June 12, 2001, between Microtest, Inc. ("Microtest") and American Stock Transfer & Trust Company as Rights Agent, (the "Shares"), of Microtest, indicated below pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Number of Tendered Shares: __________________________________________________ Certificate No(s) (if available): ___________________________________________ _____________________________________________________________________________ Check box if Shares will be tendered by book-entry transfer: [_] Name of Tendering Institution: ______________________________________________ Dated: __________________, 2001 Name(s) of Record Holder(s): ________________________________________________ _____________________________________________________________________________ (Please Print) Address(es): ________________________________________________________________ _____________________________________________________________________________ (Zip Code) Area Code and Telephone No(s): ______________________________________________ SIGN HERE Signature(s): _______________________________________________________________ ___________________________________________________________________ GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm which is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP) or any other "eligible guarantor institution" (as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended), guarantees to deliver to the Depositary either the certificates evidencing all tendered Shares, in proper form for transfer, or a Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to such Shares, in either case, together with the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or an Agent's Message (as defined in the Offer to Purchase) in the case of a book-entry delivery, and any other required documents, all within three Nasdaq National Market trading days after the date hereof. The eligible guarantor institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and Share Certificates to the Depositary within the time period indicated herein. Failure to do so may result in financial loss to such eligible guarantor institution. Name of Firm: _______________________________________________________________ _________________________________________________________________ (Authorized Signature) Address: ____________________________________________________________________ _____________________________________________________________________________ (Zip Code) Title: ______________________________________________________________________ Name: _______________________________________________________________________ (Please Print or Type) Area Code and Telephone No.: ________________________________________________ Dated: __________________, 2001 NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. ii EX-99.A.4 5 dex99a4.txt BROKER DEALER LETTER Exhibit 99(a)(4) Offer to Purchase for Cash All Outstanding Shares of Common Stock (Including the Associated Preferred Share Purchase Rights) of Microtest, Inc. by Phoenix Acquisition Corp. an indirect, wholly-owned subsidiary of Danaher Corporation at $8.15 Net Per Share THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, JULY 19, 2001, UNLESS THE OFFER IS EXTENDED. June 21, 2001 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: Phoenix Acquisition Corp., a Delaware corporation (the "Purchaser") and an indirect, wholly-owned subsidiary of Danaher Corporation, a Delaware corporation ("Danaher"), is offering to purchase for cash all the outstanding shares of common stock, par value $0.001 per share, including the associated preferred share purchase rights issued pursuant to the Rights Agreement, dated as of April 4, 2001, as amended through June 12, 2001, between Microtest, Inc. ("Microtest") and American Stock Transfer & Trust Company as Rights Agent, (the "Shares"), of Microtest, at a purchase price of $8.15 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 21, 2001 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer") enclosed herewith. Holders of Shares whose certificates for such Shares (the "Share Certificates") are not immediately available or who cannot deliver their Share Certificates and all other required documents to the Depositary (as defined below) on or prior to the Expiration Date (as defined in the Offer to Purchase), or who cannot complete the procedure for book-entry transfer on a timely basis, must tender their Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee. Enclosed herewith for your information and forwarding to your clients are copies of the following documents: 1. The Offer to Purchase, dated June 21, 2001. 2. The Letter of Transmittal to tender Shares for your use and for the information of your clients. Facsimile copies of the Letter of Transmittal may be used to tender Shares as long as you submit an original signature. 3. The Notice of Guaranteed Delivery for Shares to be used to accept the Offer if Share Certificates are not immediately available or if such certificates and all other required documents cannot be delivered to SunTrust Bank (the "Depositary") on or prior to the Expiration Date or if the procedure for book-entry transfer cannot be completed by the Expiration Date. 4. The Letter to Stockholders of Microtest from the Board of Directors of Microtest, accompanied by Microtest's Solicitation/Recommendation Statement on Schedule 14D-9. 5. A printed form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer. 6. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. 7. A return envelope addressed to SunTrust Bank, as Depositary. YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, JULY 19, 2001, UNLESS THE OFFER IS EXTENDED. The Offer is conditioned upon, among other things, (1) there being validly tendered and not withdrawn prior to the expiration of the Offer a number of Shares which represents at least a majority of the Shares outstanding on a fully-diluted basis on the date of purchase, and (2) any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or under any applicable foreign statutes or regulations that suspends the right to close the transactions contemplated by the Merger Agreement (as defined below) having expired or been terminated. As used herein, "fully diluted basis" means the number of Shares then outstanding, plus all Shares issuable upon the conversion of any then outstanding convertible securities or upon the exercise of any then outstanding options, warrants or rights. The board of directors of Microtest has unanimously determined that the Merger Agreement and each of the transactions contemplated thereby, including each of the Offer and the Merger (as defined below), are advisable, fair to and in the best interests of Microtest and its stockholders, approved the Offer and the Merger and adopted the Merger Agreement in accordance with the General Corporation Law of the State of Delaware (the "GCL"), and recommends that the stockholders of Microtest accept the Offer and tender their Shares pursuant to the Offer. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of June 12, 2001, among Danaher, the Purchaser and Microtest (as it may be amended or supplemented from time to time, the "Merger Agreement"). The Merger Agreement provides, among other things, for the making of the Offer by the Purchaser, and further provides that, following the completion of the Offer, upon the terms and subject to the conditions of the Merger Agreement, and in accordance with the GCL, Purchaser will be merged with and into Microtest (the "Merger"). Following the effective time of the Merger (the "Effective Time"), Microtest will continue as the surviving corporation and become an indirect, wholly-owned subsidiary of Danaher and the separate corporate existence of the Purchaser will cease. At the Effective Time, each Share issued and outstanding immediately prior to the Effective Time (other than (a) Shares held by Danaher, Purchaser, any wholly-owned subsidiary of Danaher or the Purchaser, in the treasury of Microtest or by any wholly-owned subsidiary of Microtest, which Shares, by virtue of the Merger, will be canceled and retired and will cease to exist with no payment being made with respect thereto, and (b) Shares, if any, held by stockholders who have properly exercised appraisal rights under Section 262 of the GCL) will, by virtue of the Merger and without any action on the part of the holders of the Shares, be converted into the right to receive in cash the per Share price paid in the Offer, payable to the holder thereof, without interest, upon surrender of the Share Certificate, less any required withholding taxes. If the Purchaser, together with Danaher, acquires, pursuant to the Offer, at least a majority of the then issued and outstanding Shares, which is a condition to closing the Offer, the Purchaser will have sufficient voting power to approve the Merger without the approval of any other stockholders, either at a meeting of stockholders or by written consent without a meeting. If the Purchaser, together with Danaher, acquires, pursuant to the Offer, at least 90% of the then issued and outstanding Shares, the Purchaser intends to effect the Merger without a vote of the Company's stockholders pursuant to Section 253 of the GCL. The Merger Agreement is more fully described in Section 11 of the Offer to Purchase. In order to take advantage of the Offer, (1) a duly executed and properly completed Letter of Transmittal (or a facsimile thereof) and any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry delivery of Shares, and other required documents should be sent to the Depositary, and (2) either Share Certificates representing the tendered Shares should be delivered to the Depositary or such Shares should be tendered by book-entry transfer and a Book- Entry Confirmation (as defined in the Offer to Purchase) with respect to such Shares should be delivered to the Depositary, all in accordance with the instructions set forth in the Letter of Transmittal and the Offer to Purchase. Holders of Shares whose Share Certificates are not immediately available or who cannot deliver their Share Certificates and all other required documents to the Depositary on or prior the expiration date of the Offer, or who cannot complete the procedure for delivery by book-entry transfer on a timely basis, must tender their Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. Purchaser will not pay any commissions or fees to any broker, dealer or other person (other than the Depositary and D.F. King & Co., Inc. (the "Information Agent") (as described in the Offer to Purchase)) for soliciting tenders of Shares pursuant to the Offer. Purchaser will, however, upon request, reimburse you for customary clerical and mailing expenses incurred by you in forwarding any of the enclosed materials to your clients. Purchaser will pay or cause to be paid any stock transfer taxes payable on the transfer of Shares to it, except as otherwise provided in Instruction 6 of the Letter of Transmittal. Inquiries you may have with respect to the Offer should be addressed to the Information Agent, at the address and telephone numbers set forth on the back cover of the Offer to Purchase. Additional copies of the enclosed materials may be obtained from the Information Agent. Very truly yours, D.F. King & Co., Inc. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, DANAHER, MICROTEST, THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. EX-99.A.5 6 dex99a5.txt CLIENT LETTER Exhibit 99(a)(5) Offer to Purchase for Cash All Outstanding Shares of Common Stock (Including the Associated Preferred Share Purchase Rights) of Microtest, Inc. by Phoenix Acquisition Corp. an indirect, wholly-owned subsidiary of Danaher Corporation at $8.15 Net Per Share THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, JULY 19, 2001, UNLESS THE OFFER IS EXTENDED. June 21, 2001 To Our Clients: Enclosed for your consideration is an Offer to Purchase dated June 21, 2001 (the "Offer to Purchase"), and the related Letter of Transmittal relating to an offer by Phoenix Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect, wholly-owned subsidiary of Danaher Corporation, a Delaware corporation ("Danaher"), to purchase all of the outstanding shares of common stock, par value $0.001 per share, including the associated preferred share purchase rights issued pursuant to the Rights Agreement, dated as of April 4, 2001, as amended through June 12, 2001, between Microtest, Inc. ("Microtest") and American Stock Transfer & Trust Company as Rights Agent, (the "Shares"), of Microtest, at a purchase price of $8.15 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer") enclosed herewith. Holders of Shares whose certificates for such Shares (the "Share Certificates") are not immediately available or who cannot deliver their Share Certificates and all other required documents to SunTrust Bank, the Depositary, on or prior to the Expiration Date (as defined in the Offer to Purchase), or who cannot complete the procedure for delivery by book-entry transfer on a timely basis, must tender their Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. We are the holder of record of Shares held by us for your account. A tender of such Shares can be made only by us as the holder of record and pursuant to your instructions. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account. We request instructions as to whether you wish to have us tender on your behalf any or all of such Shares held by us for your account, pursuant to the terms and subject to the conditions set forth in the Offer to Purchase. Your attention is directed to the following: 1. The Offer price is $8.15 per share, net to the seller in cash, without interest thereon. 2. The Offer is made for all of the outstanding Shares. 3. The board of directors of Microtest has unanimously determined that the Merger Agreement (as defined below) and each of the transactions contemplated thereby, including each of the Offer and the Merger (as defined below), are advisable, fair to and in the best interests of Microtest and its stockholders, approved the Offer and the Merger and adopted the Merger Agreement in accordance with the General Corporation Law of the State of Delaware (the "GCL"), and recommends that the stockholders of Microtest accept the Offer and tender their Shares pursuant to the Offer. 4. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of June 12, 2001, among Danaher, the Purchaser and Microtest (as it may be amended or supplemented from time to time, the "Merger Agreement"). The Merger Agreement provides, among other things, for the making of the Offer by the Purchaser, and further provides that, following the completion of the Offer, upon the terms and subject to the conditions of the Merger Agreement, and in accordance with the GCL, Purchaser will be merged with and into Microtest (the "Merger"). Following the effective time of the Merger (the "Effective Time"), Microtest will continue as the surviving corporation and become an indirect, wholly-owned subsidiary of Danaher and the separate corporate existence of Purchaser will cease. At the Effective Time, each Share issued and outstanding immediately prior to the Effective Time (other than (a) Shares held by Danaher, Purchaser, any wholly-owned subsidiary of Danaher or the Purchaser, in the treasury of Microtest or by any wholly-owned subsidiary of Microtest, which Shares, by virtue of the Merger, will be canceled and retired and will cease to exist with no payment being made with respect thereto, and (b) Shares, if any, held by stockholders who have properly exercised appraisal rights under Section 262 of the GCL) will, by virtue of the Merger and without any action on the part of the holders of the Shares, be converted into the right to receive in cash the per Share price paid in the Offer, payable to the holder thereof, without interest, upon surrender of the Share Certificate, less any required withholding taxes. If the Purchaser, together with Danaher, acquires, pursuant to the Offer, at least a majority of the then issued and outstanding Shares, which is a condition to closing the Offer, the Purchaser will have sufficient voting power to approve the Merger without the approval of any other stockholders, either at a meeting of stockholders or by written consent without a meeting. If the Purchaser, together with Danaher, acquires, pursuant to the Offer, at least 90% of the then issued and outstanding Shares, the Purchaser intends to effect the Merger without a vote of the Company's stockholders pursuant to Section 253 of the GCL. The Merger Agreement is more fully described in Section 11 of the Offer to Purchase. 5. The Offer and withdrawal rights will expire at 12:00 Midnight, New York City time, on Thursday, July 19, 2001, unless the Offer is extended. 6. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser pursuant to the Offer. 7. The Offer is conditioned upon, among other things, (1) there being validly tendered and not withdrawn prior to the Expiration Date a number of Shares which represents at least a majority of the total number of Shares outstanding on a fully diluted basis on the date of purchase, and (2) any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or under any applicable foreign statutes or regulations that suspends the right to close the transactions contemplated by the Merger Agreement having expired or been terminated. As used herein, "fully diluted basis" means the number of Shares then outstanding, plus all Shares issuable upon the conversion of any then outstanding convertible securities or upon the exercise of any then outstanding options, warrants or rights. The Offer is being made solely by the Offer to Purchase and the related Letter of Transmittal, and is being made to all holders of Shares. The Purchaser is not aware of any state or jurisdiction where the making of the Offer or the acceptance of the Shares is prohibited by any applicable law. If the Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a good faith effort to comply with any such state statute or seek to have such statute declared inapplicable to the Offer. If, after such good faith effort, the Purchaser cannot comply with such state statute, the Offer will not be made to nor will tenders be accepted from or on behalf of the holders of Shares in such state. In any jurisdiction where the securities, "blue sky" or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction. If you wish to have us tender any or all of the Shares held by us for your account, please instruct us by completing, executing and returning to us the instruction form contained in this letter. If you authorize a tender of your Shares, all such Shares will be tendered unless otherwise specified in such instruction form. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf on or prior to the expiration of the Offer. Instructions with Respect to the Offer to Purchase for Cash All Outstanding Shares of Common Stock of Microtest, Inc. by Phoenix Acquisition Corp. an indirect, wholly-owned subsidiary of Danaher Corporation The undersigned acknowledge(s) receipt of your letter enclosing the Offer to Purchase, dated June 21, 2001 (the "Offer to Purchase") and the related Letter of Transmittal pursuant to an offer by Phoenix Acquisition Corp., a Delaware corporation and an indirect, wholly-owned subsidiary of Danaher Corporation, a Delaware corporation, to purchase all outstanding shares of common stock, par value $0.001 per share (the "Shares"), of Microtest, Inc., a Delaware corporation, at a purchase price of $8.15 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal. This will instruct you to tender the number of Shares indicated below (or, if no number is indicated below, all Shares) which are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal furnished to the undersigned. - ------------------------------------------------------------------------------ Number of Shares to be Tendered* SIGN HERE - ----------------------------------- ------------------------------ Signature Dated:__________ , 2001 ----------------------------- Please Print ----------------------------- Address ----------------------------- Area Code and Telephone Number ----------------------------- Tax Identification Number, or Social Security Number(s) -------- * Unless otherwise indicated, it will be assumed that all of your Shares held by us for your account are to be tendered. - ------------------------------------------------------------------------------ EX-99.A.8 7 dex99a8.txt GUIDELINES FOR TAXPAYER CERTIFICATION Exhibit 99(a)(8) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYOR. Social Security numbers (SSNs) have nine digits separated by two hyphens: i.e., 000-00-0000. Employer identification numbers (EINs) have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payor. - -------------------------------------------------------------------------------- For this type of account: Give the name and SSN of: - -------------------------------------------------------------------------------- The individual 1.Individual The actual owner of the account or, 2.Two or more individuals (joint if combined funds, the first account) individual on the account/1/ 3. Custodian account of a minor The minor/2/ (Uniform Gift to Minors Act) The grantor-trustee/1/ 4. a. The usual revocable savings trust (grantor is also The actual owner/1/ trustee) The owner/3/ b. So-called trust account that is not a legal or valid trust under state law 5.Sole proprietorship - -------------------------------------------------------------------------------- For this type of account: Give the name and EIN of: - -------------------------------------------------------------------------------- 6.Sole proprietorship The owner/3/ 7.A valid trust, estate, or pension Legal entity/4/ trust The corporation 8.Corporate The organization 9. Association, club, religious, charitable, educational, or other The partnership tax-exempt organization The broker or nominee 10. Partnership The public entity 11. A broker or registered nominee 12. Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agriculture program payments - -------------------------------------------------------------------------------- /1/ List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that person's number must be furnished. /2/ Circle the minor's name and furnish minor's SSN. /3/ You must show your individual name, but you may also enter your business or "DBA" name. You may use either your SSN or EIN (if you have one). /4/ List first and circle the name of the legal trust, estate or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.) Note: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. (continued on back) OBTAINING A NUMBER If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service, or by calling 1 (800) TAX-FORM, and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding include the following: . An organization exempt from tax under section 501(a), any individual retirement account (IRA), or a custodial account under Section 403(b)(7) if the account satisfies the requirements of Section 401(f)(2). . The United States or any of its agencies or instrumentalities. . A State, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities. . A foreign government or any of its political subdivisions, agencies or instrumentalities. . An international organization or any of its agencies or instrumentalities. Payees that may be exempt from backup withholding include the following: . A corporation. . A foreign central bank of issue. . A registered dealer in securities or commodities registered in the United States, the District of Columbia, or a possession of the United States. . A futures commission merchant registered with the Commodity Futures Trading Commission. . A real estate investment trust. . An entity registered at all times during the tax year under the Investment Company Act of 1940. . A common trust fund operated by a bank under section 584(a). . A financial institution. . A middleman known in the investment community as a nominee or custodian. . An exempt charitable remainder trust, or a non-exempt trust described in section 4947. EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE SUBSTITUTE FORM W-9 TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, CERTIFY THAT YOU ARE EXEMPT FROM BACKUP WITHHOLDING, SIGN AND DATE THE FORM, AND RETURN IT TO THE PAYOR. PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payors who must report the payments to the IRS. The IRS uses the numbers for identification purposes. Payors must be given the numbers whether or not recipients are required to file tax returns. Payors must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payor. Certain penalties may also apply. PENALTIES (1) Failure to Furnish Taxpayer Identification Number. If you fail to furnish your taxpayer identification number to a payor, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) Civil Penalty for False Information with respect to Withholder. If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) Criminal Penalty for Falsifying Information. Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. EX-99.A.9 8 dex99a9.txt FORM OF SUMMARY ADVERTISEMENT DTD 21-JUN-01 Exhibit 99(a)(9) This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is made solely by the Offer to Purchase, dated June 21, 2001, and the related Letter of Transmittal, and any amendments or supplements thereto, and is being made to all holders of Shares. The Purchaser (as defined below) is not aware of any state or jurisdiction where the making of the Offer or the acceptance of the Shares is prohibited by any applicable law. If the Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a good faith effort to comply with such statute or seek to have such statute declared inapplicable to the Offer. If, after such good faith effort, the Purchaser cannot comply with such state statute, the Offer will not be made to nor will tenders be accepted from or on behalf of the holders of Shares in such state. In any jurisdiction where the securities, "blue sky" or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction. Notice of Offer to Purchase for Cash All Outstanding Shares of Common Stock (Including the Associated Preferred Share Purchase Rights) of Microtest, Inc. by Phoenix Acquisition Corp. an indirect, wholly-owned subsidiary of Danaher Corporation at $8.15 Net per Share Phoenix Acquisition Corp., a Delaware corporation (the "Purchaser") and an indirect, wholly-owned subsidiary of Danaher Corporation, a Delaware corporation ("Danaher"), is offering to purchase all of the issued and outstanding shares of common stock, par value $0.001 per share, including the associated preferred share purchase rights issued pursuant to the Rights Agreement, dated as of April 4, 2001, as amended through June 12, 2001, between Microtest, Inc. (the "Company") and American Stock Transfer & Trust Company as Rights Agent, (the "Shares"), of the Company, at a purchase price of $8.15 per Share, net to the seller in cash, without interest thereon and less any required withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 21, 2001 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the "Offer"). Stockholders who tender directly to the Depositary (as defined below) will not be obligated to pay brokerage fees or commissions or, subject to Instruction 6 of the Letter of Transmittal, stock transfer taxes, if any, on the purchase of Shares by the Purchaser pursuant to the Offer. Stockholders who hold their Shares through a broker or bank should consult that institution as to whether it charges any service fees or commissions. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, JULY 19, 2001, UNLESS THE OFFER IS EXTENDED. The Offer is conditioned upon, among other things, (1) there being validly tendered and not withdrawn prior to the expiration date of the Offer a number of Shares which represents at least a majority of the total number of outstanding Shares on a fully-diluted basis on the date of purchase, and (2) any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or under any applicable foreign statutes or regulations that suspends the right to close the transactions contemplated by the Merger Agreement (as defined below) having expired or been terminated. As used herein, "fully diluted basis" means the number of Shares then outstanding, plus all Shares issuable upon the conversion of any then outstanding convertible securities or upon the exercise of any then outstanding options, warrants or rights. The purpose of the Offer is to acquire control of, and the entire equity interest in, the Company. As promptly as practicable following consummation of the Offer and after satisfaction or waiver of all conditions to the Merger (as defined below) set forth in the Merger Agreement, the Purchaser intends to acquire the remaining equity interest in the Company not acquired in the Offer by consummating the Merger. The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of June 12, 2001, by and among Danaher, the Purchaser and the Company (the "Merger Agreement"). The Merger Agreement provides, among other things, for the making of the Offer by the Purchaser, and further provides that, following the completion of the Offer, upon the terms and subject to the conditions of the Merger Agreement, and in accordance with the Delaware General Corporation Law ("GCL"), the Purchaser will be merged with and into the Company (the "Merger"). Following the effective time of the Merger (the "Effective Time"), the Company will continue as the surviving corporation (the "Surviving Corporation") and become an indirect, wholly-owned subsidiary of Danaher, and the separate corporate existence of the Purchaser will cease. At the Effective Time, each Share issued and outstanding immediately prior to the Effective Time (other than (1) Shares held by Danaher, the Purchaser, any wholly-owned subsidiary of Danaher or the Purchaser, in the treasury of the Company or by any wholly-owned subsidiary of the Company, which Shares, by virtue of the Merger, will be canceled and retired and will cease to exist with no payment being made with respect thereto, and (2) Shares, if any, held by stockholders who have properly exercised appraisal rights under Section 262 of the GCL) will, by virtue of the Merger and without any action on the part of the holders of the Shares, be converted into the right to receive in cash the per Share price paid in the Offer, payable to the holder thereof, without interest, upon surrender of the certificate formerly representing such Share, less any required withholding taxes. If Purchaser, together with Danaher, acquires, pursuant to the Offer, at least a majority of the then issued and outstanding Shares, which is a condition to closing the Offer, Purchaser will have sufficient voting power to approve the Merger without the approval of any other stockholders, either at a meeting of stockholders or by written consent without a meeting. If Purchaser, together with Danaher, acquires, pursuant to the Offer, at least 90% of the then issued and outstanding Shares, Purchaser intends to effect the Merger without a vote of the Company's stockholders pursuant to Section 253 of the GCL. The Merger Agreement is more fully described in Section 11 of the Offer to Purchase. THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY (1) DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, ARE ADVISABLE, FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS, (2) APPROVED THE OFFER AND THE MERGER AND ADOPTED THE MERGER AGREEMENT IN ACCORDANCE WITH THE GCL, AND (3) RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. SG Cowen Securities Corporation ("SG Cowen"), the Company's financial advisor, has delivered to the Company its written opinion, dated June 12, 2001, that, as of that date and based on and subject to the assumptions and limitations described in the opinion, the consideration to be paid in the Offer and the Merger is fair, from a financial point of view, to the Company's stockholders. A copy of the written opinion of SG Cowen, setting forth the assumptions made, procedures followed, other matters considered and limits on review by SG Cowen, is contained in the Company's Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission in connection with the Offer, a copy of which is being furnished to the Company's stockholders concurrently with the Offer to Purchase. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment (and thereby purchased) Shares validly tendered and not properly withdrawn as, if and when the Purchaser gives oral or written notice to SunTrust Bank (the "Depositary") of the Purchaser's acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payments from Purchaser and transmitting such payments to the tendering stockholders whose Shares have been accepted for payment. Under no circumstances will interest on the purchase price for Shares be paid by the Purchaser, regardless of any extension of the Offer or any delay in making such payment. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (1) certificates representing such Shares, or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility (as defined in the Offer to Purchase) pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (2) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in connection with a book-entry transfer, an Agent's Message (as defined in the Offer to Purchase), and (3) any other documents required by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at different times depending upon when certificates for, or confirmation of a book-entry transfer with respect to, the Shares are actually received by the Depositary. Subject to the provisions of the Merger Agreement and the applicable rules and regulations of the Securities and Exchange Commission (the "SEC"), the Purchaser reserves the right, in its sole discretion, to waive any or all conditions to the Offer (other than the Minimum Condition (as defined in the Offer to Purchase)) and to make any other changes in the terms and conditions of the Offer. Subject to the provisions of the Merger Agreement and the applicable rules and regulations of the SEC, if, by the Expiration Date, any or all of the conditions to the Offer have not been satisfied or waived by the Purchaser, the Purchaser reserves the right (but will not be obligated) to (1) terminate the Offer and return all tendered Shares to tendering stockholders, (2) waive such unsatisfied conditions (other than the Minimum Condition) and purchase all Shares validly tendered, or (3) extend the Offer, and, subject to the terms of the Offer (including the rights of stockholders to withdraw their Shares), retain the Shares which have been tendered, until the termination of the Offer, as extended. In the event that, on the scheduled expiration date of the Offer, (1) the required waiting period under U.S. federal antitrust laws or under material applicable foreign statutes or regulations, in each case to the extent such waiting period suspends the right to close the transactions contemplated by the Merger Agreement, have not expired or been terminated, the Purchaser is required to extend the Offer until the earlier of such expiration or termination or September 30, 2001, or (2) the consummation of the Offer is prohibited or is materially limited pursuant to applicable laws or pending legal actions (as set forth in paragraphs (a) and (b) of Annex I to the Merger Agreement), the Purchaser is required to extend the Expiration Date for additional periods until the earliest of (A) five business days after the time such limitations no longer exist, (B) such time at which such limitations have become final and nonappealable, or (C) September 30, 2001. Subject to the provisions of the Merger Agreement and the applicable rules and regulations of the SEC, the Purchaser expressly reserves the right, in its sole discretion, at any time and from time to time, and regardless of whether or not any of the events set forth in Section 14 of the Offer to Purchase have occurred or have been determined by the Purchaser to have occurred, to (1) extend the period of time during which the Offer is open and thereby delay acceptance for payment of, and payment for, any Shares, by giving oral or written notice of such extension to the Depositary, and (2) amend the Offer in any respect permitted by the Merger Agreement by giving oral or written notice of such amendment to the Depositary. Without limiting the foregoing, if, as of the Expiration Date, all of the conditions to the Offer have been satisfied and more than 70% but less than 90% of the outstanding Shares have been validly tendered and not withdrawn in the Offer, the Purchaser shall have the right, in its sole discretion, to extend the Offer from time to time for up to a maximum of ten additional business days in the aggregate for all such extensions. In addition, Purchaser may elect to provide a "subsequent offering period" in accordance with Rule 14d-11 under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"). Any extension, delay, termination, waiver or amendment of the Offer or commencement or extension of a subsequent offering period will be followed as promptly as practicable by public announcement thereof, and such announcement in the case of an extension of the Offer or the commencement or extension of a subsequent offering period, will be made no later than 9:00 A.M., New York City time, on the next business day after the previously scheduled Expiration Date. During any such extension, all Shares previously tendered and not properly withdrawn will remain subject to the Offer, subject to the rights of a tendering stockholder to withdraw such stockholder's Shares. During a subsequent offering period, stockholders would not be able to withdraw Shares previously tendered in the Offer and stockholders would not be able to withdraw Shares tendered during the subsequent offering period. "Expiration Date" means 12:00 Midnight, New York City time, on Thursday, July 19, 2001, unless and until the Purchaser, in its sole discretion (but subject to the terms and conditions of the Merger Agreement), has extended the period during which the Offer is open, in which event the term "Expiration Date" means the latest time and date at which the Offer, as so extended by the Purchaser, will expire. Tenders of Shares made pursuant to the Offer are irrevocable, except that Shares tendered pursuant to the Offer may be withdrawn at any time on or prior to the Expiration Date, and, unless theretofore accepted for payment by Purchaser pursuant to the Offer, may also be withdrawn at any time after August 19, 2001. For a withdrawal to be effective, a written, telegraphic, telex or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase. Any notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of those Shares, if different from that of the person who tendered such Shares. If certificates for the Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of the certificates, the serial numbers shown on such certificates must be submitted to the Depositary and the signatures on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in the Offer to Purchase) unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer as set forth in Section 3 of the Offer to Purchase, any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares, in which case a notice of withdrawal will be effective if delivered to the Depositary by any method of delivery described in the second sentence of this paragraph. All questions as to the form and validity (including, without limitation, time of receipt) of any notice of withdrawal will be determined by the Purchaser, in its sole discretion, whose determination will be final and binding. None of the Purchaser, Danaher, any of their affiliates or assigns, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give such notification. Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered at any time prior to the Expiration Date by following one of the procedures described in Section 3 of the Offer to Purchase. The receipt by a stockholder of cash for Shares pursuant to the Offer and the Merger will be a taxable transaction for United States federal income tax purposes, and may also be a taxable transaction under applicable state, local or foreign tax laws. All stockholders are urged to consult with their own tax advisors as to the particular tax consequences to them of the Offer and the Merger. The information required to be disclosed by paragraph (d)(1) of Rule l4d-6 under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference. The Company has provided the Purchaser with the Company's stockholder list and security position listing for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase and the related Letter of Transmittal and other relevant materials will be mailed by the Purchaser to record holders of Shares and furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares. The Offer to Purchase and the related Letter of Transmittal contain important information which should be read carefully before any decision is made with respect to the Offer. Questions and requests for assistance may be directed to the Information Agent as set forth below. Requests for copies of the Offer to Purchase and the related Letter of Transmittal and all other tender offer materials may be directed to the Information Agent, and copies will be furnished promptly at the Purchaser's expense. The Purchaser will not pay any fees or commissions to any broker or dealer or any other person (other than the Information Agent) for soliciting tenders of Shares pursuant to the Offer. The Information Agent for the Offer is: D.F. King & Co., Inc. 77 Water Street New York, New York 10005 Banks and Brokers, please call: (212) 269-5550 All others call toll-free: (800) 207-2872 June 21, 2001 EX-99.D.1 9 dex99d1.txt AGREEMENT AND PLAN OF MERGER DTD 12-JUN-01 Exhibit 99(d)(1) Execution Copy AGREEMENT & PLAN OF MERGER BY AND AMONG DANAHER CORPORATION ("Parent") PHOENIX ACQUISITION CORP., ("Purchaser") and MICROTEST, INC. (the "Company") June 12, 2001 AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of June 12, 2001, by and among Danaher Corporation, a Delaware corporation ("Parent"), Phoenix Acquisition Corp., a Delaware corporation and an indirect, wholly owned subsidiary of Parent (the "Purchaser"), and Microtest, Inc., a Delaware corporation (the "Company"). Unless otherwise expressly set forth, the term "Company" when used herein shall refer to Microtest, Inc. and each of its subsidiaries. WHEREAS, the respective Boards of Directors of Parent, the Company and Purchaser, have approved the acquisition of the Company by Parent on the terms and subject to the conditions set forth in this Agreement; and WHEREAS, pursuant to and subject to the terms and conditions of this Agreement the Purchaser has agreed to commence a tender offer (the "Offer") to purchase all of the Company's common stock, par value $0.001 per share that are issued and outstanding, including the associated preferred share purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as of April 4, 2001, between the Company and American Stock Transfer & Trust Company as Rights Agent (the "Rights Agreement") (each share of common stock of the Company, together with its associated Rights, is referred to herein as a "Share" or "Common Share," and in the aggregate as the "Shares" or the "Common Shares") at a price per Share of $8.15 net to the seller in cash (such amount or any greater amount per Share paid pursuant to the Offer being hereinafter referred to as the "Offer Price"); and WHEREAS, the Board of Directors of the Company (the "Company Board") has, on the terms and subject to the conditions set forth herein, unanimously (i) approved the Offer and the Merger and adopted this Agreement in accordance with the General Corporation Law of the State of Delaware (the "GCL"), and (ii) resolved to recommend that the stockholders of the Company accept the Offer, tender their Shares pursuant to the Offer and approve the Merger (if such approval is required by applicable Law); and WHEREAS, the Board of Directors of Purchaser, and Fluke Networks, Inc. as the sole stockholder of the Purchaser, have approved the merger of the Purchaser with and into the Company with the Company as the surviving corporation, as set forth below (the "Merger"), in accordance with the GCL, and upon the terms and subject to the conditions set forth in this Agreement; and WHEREAS, Parent, the Purchaser and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Offer and the Merger and also to prescribe various conditions to the Offer and the Merger; NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Parent, the Purchaser and the Company agree as follows: ARTICLE ONE THE OFFER Section 1.1 The Offer. --------- (a) Provided that this Agreement shall not have been terminated in accordance with Article Eight hereof, none of the events set forth in Annex I hereto (the "Tender Offer Conditions") shall have occurred and be continuing, and the sales of the Excluded Business shall have closed, as promptly as reasonably practicable following the execution of this Agreement (but in no event later than 10 business days after the public announcement of the execution hereof), the Purchaser shall, and Parent shall cause the Purchaser to commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (including the rules and regulations promulgated thereunder, the "Exchange Act")) the Offer at the Offer Price, shall, upon commencement of the Offer but after affording the Company and its counsel a reasonable opportunity to review and comment thereon, file Schedule TO and all other necessary documents with the Securities and Exchange Commission (the "SEC") and make all deliveries, mailings and telephonic notices required by Rule 14d-3 under the Exchange Act, in each case in connection with the Offer (the "Offer Documents") and shall use its commercially reasonable efforts to consummate the Offer, subject to the terms and conditions thereof. The obligation of the Purchaser to accept for payment or pay for any Shares tendered pursuant to the Offer will be subject only to the satisfaction, or waiver by Purchaser, of the Tender Offer Conditions. (b) Without the prior written consent of the Company, the Purchaser shall not decrease the Offer Price or change the form of consideration payable in the Offer, decrease the number of Shares sought to be purchased in the Offer, impose conditions to the Offer in addition to the Tender Offer Conditions or amend any other term of the Offer in any manner adverse to the holders of Shares. The Offer shall remain open until the date that is 20 business days (as such term is defined in Rule 14d-1(g)(3) under the Exchange Act) after the commencement of the Offer (the "Expiration Date"), unless the Purchaser shall have extended the period of time for which the Offer is open pursuant to, and in accordance with, the two succeeding sentences or as may be required by applicable Law, in which event the term "Expiration Date" shall mean the latest time and date as the Offer, as so extended, may expire; provided, however, that the Purchaser may provide a subsequent offering period after the Expiration Date, in accordance with and subject to the requirements of Rule 14d-11 under the Exchange Act. If at any Expiration Date, any of the Tender Offer Conditions are not satisfied or waived by the Purchaser, the Purchaser may extend the Offer from time to time; provided, however, that, on the scheduled expiration date of the Offer, (i) if the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") or under any material applicable foreign statutes or regulations applicable to the Merger, in each case to the extent such waiting period suspends the right to close the transactions contemplated hereby, shall have not expired or been terminated, the Purchaser shall extend the Offer from time to time until the earlier of (1) September 30, 2001, or (2) expiration or termination under the HSR Act or any other applicable foreign statutes or regulations, and (ii) if any of the conditions set forth in paragraphs (a) or (b) of Annex I hereto shall have occurred and be continuing, the Purchaser shall extend the Offer from time to time until the earliest of (A) September 30, 2001, (B) five business days after the time such condition shall no longer exist, or (C) such time at which the matters described in such paragraphs (a) or (b) shall 2 have become final and nonappealable. Subject to the terms of the Offer and this Agreement and the satisfaction of all the Tender Offer Conditions as of any Expiration Date, the Purchaser will accept for payment and pay for all Shares validly tendered and not validly withdrawn pursuant to the Offer as soon as practicable after such Expiration Date of the Offer; provided that, if all of the Tender Offer Conditions are satisfied and more than 70% but less than 90% of the outstanding Common Shares have been validly tendered and not withdrawn in the Offer, the Purchaser shall have the right, in its sole discretion, to extend the Offer from time to time for up to a maximum of ten additional business days in the aggregate for all such extensions. Without the prior written consent of the Company, the Purchaser shall not accept for payment or pay for any Shares in the Offer if, as a result, Purchaser would acquire less than the number of Shares necessary to satisfy the Minimum Condition (as defined in Annex I hereto). Notwithstanding the foregoing and subject to the applicable rules of the SEC and the terms and conditions of the Offer, Purchaser expressly reserves the right to delay payment for Shares in order to comply in whole or in part with applicable Laws. Any such delay shall be effected in compliance with Rule 14e-1(c) under the Exchange Act. The Company agrees that no Common Shares held by the Company or any of its subsidiaries will be tendered in the Offer. If the payment for tendered Shares is to be made to a person other than the person in whose name the surrendered certificate formerly evidencing such Shares is registered on the stock transfer books of the Company, it shall be a condition of payment that the certificate so surrendered shall be endorsed properly or otherwise be in proper form for transfer and that the person requesting such payment shall have paid all transfer and other taxes required by reason of the payment of the purchase price therefor to a person other than the registered holder of the certificate surrendered, or shall have established to the satisfaction of Purchaser that such taxes either have been paid or are not applicable. (c) Parent and the Purchaser represent that the Offer Documents will comply in all material respects with the provisions of applicable federal securities Laws and, on the date filed with the SEC and on the date first published, sent or given to the Company's stockholders, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, except that no representation is made by Parent or the Purchaser with respect to information supplied by the Company in writing for inclusion in the Offer Documents. Each of Parent and the Purchaser, on the one hand, and the Company, on the other hand, agrees promptly to correct any information provided by it for use in the Offer Documents if and to the extent that it shall have become false or misleading in any material respect and the Purchaser further agrees to take all steps necessary to cause the Offer Documents as so corrected to be filed with the SEC and to be disseminated to stockholders of the Company, in each case, as and to the extent required by applicable federal securities Laws. Section 1.2 Company Actions. --------------- (a) The Company shall, after affording Parent and its counsel a reasonable opportunity to review and comment thereon, file with the SEC and mail to the holders of Shares, on the date of the filing by Parent and the Purchaser of the Offer Documents, a Solicitation/Recommendation Statement on Schedule 14D-9 (together with any amendments or supplements thereto, the "Schedule 14D-9") reflecting the recommendation of the Company Board that holders of Shares tender their Shares pursuant to the Offer and shall disseminate the Schedule 3 14D-9 as required by Rule 14d-9 promulgated under the Exchange Act. The Schedule 14D-9 will set forth, and the Company hereby represents, that the Company Board, at a meeting duly called and held at which a quorum was present throughout, has unanimously (i) determined that this Agreement and each of the transactions contemplated hereby, including each of the Offer and the Merger, is advisable, fair to and in the best interests of the Company and its stockholders, (ii) approved the Offer and the Merger and adopted this Agreement in accordance with the GCL, (iii) resolved to recommend that the stockholders of the Company accept the Offer, tender their Shares pursuant to the Offer and approve the Merger (if such approval is required by applicable Law), (iv) taken all other action necessary to render the restrictions on "business combinations" under Section 203 of the GCL inapplicable to the Offer and the Merger, and (v) taken all other action necessary to render the Rights inapplicable to the Offer and the Merger; provided, that such recommendation and approval may be withdrawn, modified or amended only after the Company Board has made the determinations described in Section 6.9(a)(i) and (ii). The Company further represents that, as of the date of this Agreement, S.G. Cowen ("Financial Advisor"), the Company's financial advisor, has delivered to the Company Board its oral or written opinion that, as of the date of this Agreement, the consideration to be received by the holders of Shares (other than Parent or any of its subsidiaries) pursuant to the Offer and the Merger is fair to the Company's stockholders from a financial point of view. The Financial Advisor has consented to the inclusion of a written copy of the foregoing fairness opinion in the Schedule 14D-9. The Company hereby consents to the inclusion in the Offer Documents of the recommendations of the Company Board described in this Section 1.2(a). (b) The Company represents that the Schedule 14D-9 will comply in all material respects with the provisions of applicable federal securities Laws and, on the date filed with the SEC and on the date first published, sent or given to the Company's stockholders, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, except that no representation is made by the Company with respect to information supplied by Parent or the Purchaser in writing for inclusion in the Schedule 14D-9. Each of the Company, on the one hand, and Parent and the Purchaser, on the other hand, agree promptly to correct any information provided by either of them for use in the Schedule 14D-9 if and to the extent that it shall have become false or misleading, and the Company further agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be disseminated to the holders of Shares, in each case, as and to the extent required by applicable federal securities Law. (c) In connection with the Offer, the Company will promptly (and in any event within three business days after the date hereof) furnish the Purchaser with mailing labels, security position listings, any available non-objecting beneficial owner lists and any available listing or computer list containing the names and addresses of the record holders of the Shares as of the most recent practicable date and shall furnish the Purchaser with such additional available information (including, but not limited to, updated lists of holders of Shares and their addresses, mailing labels and lists of security positions and non-objecting beneficial owner lists) and such other assistance as the Purchaser or its agents may reasonably request in communicating the Offer to the Company's record and beneficial stockholders. Subject to the requirements of applicable Law, and except for such steps as are necessary to disseminate the Offer Documents and any other 4 documents necessary to consummate the Merger, Parent, the Purchaser and their subsidiaries, affiliates, associates, agents and advisors, shall keep such information confidential and use the information contained in any such labels, listings and files only in connection with the Offer and the Merger and, should the Offer terminate or if this Agreement shall be terminated, will deliver to the Company all copies of such information then in their possession. Section 1.3 Directors. --------- (a) Subject to compliance with applicable Law, promptly upon the payment by the Purchaser for Shares pursuant to the Offer representing at least such number of Shares as shall satisfy the Minimum Condition, and from time to time thereafter, Parent shall be entitled to designate such number of directors, rounded up to the next whole number, on the Company Board as is equal to the product of the total number of directors on the Company Board (determined after giving effect to the directors elected pursuant to this sentence) multiplied by the percentage that the aggregate number of Common Shares beneficially owned by Parent or its affiliates bears to the total number of Common Shares then outstanding, and the Company shall, upon request of Parent, promptly take all actions necessary to cause Parent's designees to be so elected, including, if necessary, increasing the size of the Company Board and/or seeking the resignations of one or more existing directors; provided, however, that prior to the Effective Time (as defined in Section 2.2), the Company Board shall always have at least two members who are not officers, directors, employees or designees of the Purchaser or any of its affiliates (other than the Company) ("Purchaser Insiders"). If the number of directors who are not Purchaser Insiders is reduced below two prior to the Effective Time, the remaining director who is not a Purchaser Insider shall be entitled to designate a person to fill such vacancy who is not a Purchaser Insider and who shall be a director not deemed to be a Purchaser Insider for all purposes of this Agreement. (b) The Company's obligations to appoint Parent's designees to the Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 thereunder. The Company shall promptly take all actions required pursuant to such Section and Rule in order to fulfill its obligations under this Section 1.3 and shall include in the Schedule 14D-9 such information with respect to the Company and its officers and directors as is required under such Section and Rule in order to fulfill its obligations under this Section 1.3. Parent will supply to the Company any information with respect to itself and its officers, directors and affiliates required by such Section and Rule. (c) Following the election or appointment of Parent's designees pursuant to this Section 1.3 and prior to the Effective Time, any amendment or termination of this Agreement by the Company, any extension by the Company of the time for the performance of any of the obligations or other acts of Parent or the Purchaser or waiver of any of the Company's rights or conditions to consummation of the Merger hereunder, in addition to any required approval thereof by the full Company Board, will require the concurrence of a majority of the directors of the Company then in office who are not Purchaser Insiders (or in the case where there are two or fewer directors who are not Purchaser Insiders, the concurrence of one director who is not a Purchaser Insider) if such amendment, termination, extension or waiver would be reasonably likely to have an adverse effect on the minority stockholders of the Company. The Company 5 Board shall not delegate any matter set forth in this Section 1.3(c) to any committee of the Company Board. ARTICLE TWO THE MERGER Section 2.1 The Merger. Upon the terms and subject to the satisfaction or ---------- waiver of the conditions hereof, and in accordance with the applicable provisions of this Agreement and the GCL, at the Effective Time the Purchaser shall be merged with and into the Company. Following the Merger, the separate corporate existence of the Purchaser shall cease and the Company shall continue as the surviving corporation (the "Surviving Corporation"), and shall continue its existence under the GCL. Section 2.2 Effective Time. As soon as practicable after the -------------- satisfaction or waiver of the conditions set forth in Section 7.1(a) and (b), but subject to satisfaction of the conditions set forth in Section 7.1(c) and (d), the Merger shall become effective as set forth in the certificate of merger which shall be filed with the Secretary of State of the State of Delaware. The parties shall take such other and further actions as may be required by Law to make the Merger effective. The time the Merger becomes effective in accordance with applicable Law is referred to herein as the "Effective Time." Prior to such filing, a closing (the "Closing") shall be held at the offices of Wilmer, Cutler & Pickering, 2445 M Street, Washington, D.C. 20037, or such other place as the parties shall agree, for the purpose of confirming the satisfaction or waiver, as the case may be, of the conditions set forth in Article Seven. The date on which the Closing occurs is referred to as the "Closing Date." Section 2.3 Effects of the Merger. At and after the Effective Time the ------------------- Merger shall have the effects set forth in Section 259 of the GCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the properties, rights, privileges, powers and franchises of the Company and the Purchaser shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and the Purchaser shall become the debts, liabilities and duties of the Surviving Corporation. Section 2.4 Certificate of Incorporation and Bylaws of the Surviving -------------------------------------------------------- Corporation. - ----------- (a) The certificate of incorporation of the Company, as in effect immediately prior to the Effective Time, shall be the certificate of incorporation of the Surviving Corporation until thereafter amended, subject to the provisions of Section 6.6 of this Agreement, in accordance with the provisions thereof and hereof and applicable Law. (b) The bylaws of the Purchaser in effect at the Effective Time shall be the bylaws of the Surviving Corporation until amended, subject to the provisions of Section 6.6 of this Agreement, in accordance with the provisions thereof and applicable Law. Section 2.5 Directors. Subject to applicable Law, the directors of the --------- Purchaser immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation 6 and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal. Section 2.6 Officers. Subject to applicable Law, the officers of the -------- Purchaser immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal. Section 2.7 Conversion of Shares. At the Effective Time, by virtue of -------------------- the Merger and without any action on the part of the holders thereof, each Common Share issued and outstanding immediately prior to the Effective Time (other than (i) any Common Shares held by Parent, the Purchaser, any wholly owned subsidiary of Parent or the Purchaser, in the treasury of the Company or by any wholly owned subsidiary of the Company, which Common Shares, by virtue of the Merger and without any action on the part of the holder thereof, shall be cancelled and shall cease to exist with no payment being made with respect thereto, and (ii) Dissenting Shares (as defined in Section 3.1)), shall be cancelled and retired and shall be converted into the right to receive the Offer Price in cash (the "Merger Price"), payable to the holder thereof, without interest thereon, upon surrender of the certificate formerly representing such Common Share. Section 2.8 Conversion of Purchaser Stock. The Purchaser has outstanding ----------------------------- ten shares of common stock, par value $0.001 per share, all of which are entitled to vote with respect to the approval of this Agreement. At the Effective Time, each share of common stock of the Purchaser issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into and become one validly issued, fully paid and non-assessable share of common stock, par value $0.001 per share, of the Surviving Corporation. Section 2.9 Options; Stock Plans. Prior to the Effective Time, the Company -------------------- Board (or, if appropriate, any committee thereof) shall adopt appropriate resolutions and take all other actions necessary to provide for the cancellation or exercise, effective at the Effective Time, of all the outstanding stock options or similar rights (the "Options") heretofore granted by the Company, whether under a stock option or similar plan (the "Stock Plans") or otherwise, without any payment therefor except as otherwise provided in this Section 2.9. Immediately prior to the Effective Time, the Company shall accelerate the vesting of all unvested Options and each then vested Option shall thereafter no longer be exercisable but shall entitle each holder thereof, in cancellation and settlement therefor, to a payment in cash by the Company (subject to any applicable withholding taxes), at the Effective Time, equal to the product of (i) the total number of Common Shares subject to such vested Option and (ii) the excess, if any, of the Merger Price over the exercise price per Common Share subject to such vested Option (such amounts payable hereunder being referred to as the "Cash Payment"). All other Stock Plans and any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of the Company or any subsidiary shall terminate as of the Effective Time; provided that the Microtest, Inc. Employee Stock Purchase Plan shall be suspended as of the end of the current enrollment period expiring on June 30, 2001, and terminated as of the Effective Time. The Company will obtain all necessary consents to ensure that after the Effective Time, holders of Options will have no rights other than the rights of the holders of vested Options to receive the 7 Cash Payment in cancellation and settlement thereof. The Company shall also take all necessary action to approve the disposition of the Options in connection with the transactions contemplated by this Agreement to the extent necessary to exempt such transactions and dispositions under Rule 16b-3 of the Exchange Act. Section 2.10 Stockholders' Meeting. --------------------- (a) Subject to Section 2.10(d), if required by applicable Law or the applicable rules and regulations of the Nasdaq National Market in order to consummate the Merger, the Company, acting through the Company Board, shall, in accordance with applicable Law, the Company's certificate of incorporation and bylaws and the applicable rules and regulations of the Nasdaq National Market: (i) duly call, give notice of, convene and hold a special meeting of its stockholders (the "Special Meeting") as soon as practicable following the acceptance for payment of and payment for Shares by the Purchaser pursuant to the Offer for the purpose of considering and taking action upon this Agreement; (ii) prepare and file with the SEC a preliminary proxy statement relating to this Agreement, and use its commercially reasonable efforts (x) to obtain and furnish the information required to be included by the SEC in the Proxy Statement (as hereinafter defined) and, after consultation with Parent, to respond promptly to any comments made by the SEC with respect to the preliminary proxy statement and cause a definitive proxy statement (the "Proxy Statement") to be mailed to its stockholders and (y) to obtain the necessary approvals of the Merger and this Agreement by its stockholders; (iii) subject to Section 1.2(a), include in the Proxy Statement the recommendation of the Company Board that stockholders of the Company vote in favor of the approval of this Agreement; and (iv) include in the Proxy Statement the written opinion of Financial Advisor referred to in Section 1.2(a). (b) Company shall notify Parent of the receipt of any comments of the SEC with respect to the Proxy Statement and of any requests by the SEC for any amendment or supplement thereto or for additional information and shall provide to Parent promptly copies of all correspondence between the Company or any representative of the Company and the SEC with respect thereto. The Company shall give Parent and its counsel the opportunity to review the Proxy Statement, including all amendments and supplements thereto, prior to its being filed with the SEC and shall give Parent and its counsel the opportunity to review all responses to, requests for additional information and replies to comments prior to their being filed with, or sent to, the SEC, and shall include in the Proxy Statement and all such amendments, supplements, responses and requests all comments reasonably proposed by Parent. 8 (c) Parent agrees that it will vote, or cause to be voted, all of the Shares then owned by it, the Purchaser or any of its other subsidiaries in favor of the approval of the Merger and of this Agreement. (d) If, following expiration of the Offer and satisfaction or waiver of all of the Tender Offer Conditions, applicable Law or the applicable rules and regulations of the Nasdaq National Market require a vote of the stockholders of the Company in order to consummate the Merger, Parent and Purchaser may, in their sole discretion, in lieu of having the Company call a special meeting of the stockholders as contemplated above, elect to approve the Merger by written consent without a meeting of the stockholders, to the extent permitted by the certificate of incorporation and bylaws of the Company. If Parent and Purchaser elect to approve the Merger by written consent, the Company shall take all actions necessary to permit Parent and the Purchaser to take such action by written consent, including without limitation making and assisting in such filings with the SEC, and preparing and mailing an information statement and such other materials, as may be required under the federal securities laws and the GCL. Section 2.11 Merger Without Meeting of Stockholders. Notwithstanding -------------------------------------- Section 2.10, in the event that Parent, the Purchaser or any other subsidiary of Parent shall acquire at least 90% of the then outstanding Common Shares, pursuant to the Offer or otherwise, the parties hereto agree to take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the acceptance for payment of and payment for Shares by the Purchaser pursuant to the Offer without a meeting of stockholders of the Company, in accordance with Section 253 of the GCL. ARTICLE THREE DISSENTING SHARES; PAYMENT FOR SHARES Section 3.1 Dissenting Shares Notwithstanding Section 2.7, Shares ----------------- outstanding immediately prior to the Effective Time and held by a holder who has not voted in favor of the Merger or consented thereto in writing and who has demanded appraisal for such Shares in accordance with the GCL ("Dissenting Shares") shall not be converted into a right to receive the Merger Price, unless such holder fails to perfect or withdraws or otherwise loses his right to appraisal. If after the Effective Time such holder fails to perfect or withdraws or loses his right to appraisal, such Shares shall be treated as if they had been converted as of the Effective Time into a right to receive the Merger Price. The Company shall give Parent prompt notice of any demands received by the Company for appraisal of any Shares, and Parent shall have the right to participate in and to control all negotiations and proceedings with respect to such demands. The Company shall not, except with the prior written consent of Parent, make any payment with respect to, or settle or offer to settle, any such demands. Section 3.2 Payment for Shares. ------------------ (a) From and after the Effective Time, such bank or trust company as shall be designated by Parent shall act as paying agent (the "Paying Agent") in effecting the payment of the Merger Price in respect of certificates (the "Certificates") that, prior to the Effective Time, represented Common Shares entitled to payment of the Merger Price pursuant to Section 2.7. 9 Promptly following the Effective Time, Parent shall deposit, or cause to be deposited, with the Paying Agent the aggregate Merger Price to which holders of Shares shall be entitled at the Effective Time pursuant to Section 2.7 (the "Exchange Fund"). The Exchange Fund shall be invested by the Paying Agent as directed by the Parent. (b) Promptly after the Effective Time, Parent shall cause the Paying Agent to mail to each record holder of Certificates that immediately prior to the Effective Time represented Shares (other than Certificates representing Shares held by Parent, the Purchaser, any wholly owned subsidiary of Parent or the Purchaser, in the treasury of the Company or by any wholly owned subsidiary of the Company, and other than Certificates representing Dissenting Shares) a form of letter of transmittal which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Paying Agent, and instructions for use in surrendering such Certificates and receiving the Merger Price in respect thereof. Upon the surrender of each such Certificate, the Paying Agent shall pay the holder of such Certificate the Merger Price, multiplied by the number of Common Shares formerly represented by such Certificate, in consideration therefor, and such Certificate shall forthwith be cancelled. Until so surrendered, each such Certificate (other than Certificates representing Shares held by Parent, the Purchaser, any wholly owned subsidiary of Parent or the Purchaser, in the treasury of the Company or by any wholly owned subsidiary of the Company, and other than Certificates representing Dissenting Shares) shall represent solely the right to receive the aggregate Merger Price relating thereto. No interest or dividends shall be paid or accrued on the Merger Price. If the Merger Price (or any portion thereof) is to be delivered to any person other than the person in whose name the Certificate formerly representing Shares surrendered therefor is registered, it shall be a condition to such right to receive such Merger Price that the Certificate so surrendered shall be properly endorsed or otherwise be in proper form for transfer and that the person surrendering such Shares shall pay to the Paying Agent any transfer or other similar taxes required by reason of the payment of the Merger Price to a person other than the registered holder of the Certificate surrendered, or shall establish to the satisfaction of the Paying Agent that such tax has been paid or is not applicable. If any holder of Shares shall be unable to surrender such holder's Certificates because such Certificates have been lost, mutilated or destroyed, such holder may deliver in lieu thereof an affidavit and indemnity bond (if reasonably required by the Surviving Corporation) in form and substance and with surety reasonably satisfactory to the Surviving Corporation. (c) Promptly following the date which is 180 days after the Effective Time, the Paying Agent shall deliver to the Surviving Corporation all cash, Certificates and other documents in its possession relating to the transactions described in this Agreement, and the Paying Agent's duties shall terminate. Thereafter, each holder of a Certificate formerly representing a Share may surrender such Certificate to the Surviving Corporation and (subject to applicable abandoned property, escheat and similar laws) receive in consideration therefor the aggregate Merger Price relating thereto, without any interest thereon. (d) Parent or the Paying Agent will be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of Shares such amounts as Parent (or any affiliate thereof) or the Paying Agent shall determine in good faith they are required to deduct and withhold with respect to the making of such payment under the Internal 10 Revenue Code of 1986, as amended (the "Code"), or any provision of federal, state, local or foreign Tax Law. To the extent that amounts are so withheld by Parent or the Paying Agent, such withheld amounts will be treated for all purposes of this Agreement as having been paid to the holder of the Shares in respect of whom such deduction and withholding were made. (e) After the Effective Time, there shall be no transfers on the stock transfer books of the Surviving Corporation of any Shares which were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates formerly representing Shares are presented to the Surviving Corporation or the Paying Agent, they shall be surrendered and cancelled in return for payment as and to the extent provided in this Article Three. ARTICLE FOUR REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to Parent and the Purchaser as follows: Section 4.1 Organization and Qualification; Subsidiaries. The Company is -------------------------------------------- a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. Each of the Company's subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. The Company and each of its subsidiaries has the requisite corporate power and authority to own, operate or lease its properties and to carry on its business as it is now being conducted, and is duly qualified or licensed to do business, and is in good standing, in each jurisdiction in which the nature of its business or the properties owned, operated or leased by it makes such qualification, licensing or good standing necessary, except where the failure to have such power or authority, or the failure to be so qualified, licensed or in good standing, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. The term "Material Adverse Effect on the Company," as used in this Agreement, means any change in or effect on the business, assets, liabilities, financial condition or results of operations of the Company and its subsidiaries taken as a whole that, individually or in the aggregate with all other changes and effects, would reasonably be expected to be materially adverse to the Company and its subsidiaries taken as a whole, other than (a) the effects of changes that are generally applicable to (i) the United States economy or securities markets, or (ii) the world economy or international securities markets, and (b) changes or effects to the extent arising from the announcement of this Agreement and the transactions contemplated hereby (including the sale or other disposition of the Excluded Business and the shut- down of the NAS Business (excluding the Excluded Business) (each as defined in Section 6.13 hereof) contemplated by this Agreement and any loss of relationships with customers, suppliers, distributors, sales representatives or employees or the delay or cancellation of orders for products or services, in each case to the extent arising from such announcement); provided, that a change in the market price or trading volume of the Common Shares shall not, in and of itself, constitute a Material Adverse Effect on the Company (it being understood that this proviso shall not exclude any underlying change or effect which resulted in such change in the market price or trading volume). The Company has heretofore provided to Parent and the Purchaser a complete and correct copy of the certificate of incorporation and the bylaws or comparable organizational documents, each as amended to the date hereof, of the Company and 11 each of its subsidiaries, and has provided a complete and correct copy of the Rights Agreement as amended to the date hereof. Neither the Company nor any of its subsidiaries is in violation of or default under any of the provisions of its respective certificate of incorporation, bylaws or comparable organizational documents. The Company has made available to Parent and its representatives true and complete copies of the minutes of all meetings of the stockholders, the Board of Directors and each committee of the Board of Directors of the Company held since January 1, 1998, and such minutes accurately reflect all proceedings of the stockholders and Board of Directors (and all committees thereof) of the Company. Section 4.2 Subsidiaries; Capitalization. Section 4.2(a) of the disclosure ---------------------------- schedule delivered by the Company to Parent prior to the execution of this Agreement (the "Company Disclosure Schedule") lists each subsidiary of the Company and its respective jurisdiction of incorporation. All the outstanding shares of capital stock and other securities of each such subsidiary have been validly issued and are fully paid and nonassessable and, except as set forth on Section 4.2(a) of the Company Disclosure Schedule, are owned by the Company, by another subsidiary of the Company or by the Company and another such subsidiary, free and clear of all Liens and free of any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such capital stock and securities). Except for the capital stock of its subsidiaries, the Company does not own, directly or indirectly, any capital stock, security or other ownership or equity interest in any person. There are no restrictions of any kind which prevent the payment of dividends by any of the Company's subsidiaries, and neither the Company nor any of its subsidiaries is subject to any obligation or requirement to provide funds for or to make any investment (in the form of a loan or capital contribution) to or in any person. (b) The authorized capital stock of the Company consists of 15,000,000 Common Shares and 5,000,000 shares of preferred stock, par value $0.001 per share. As of the close of business on the date immediately preceding the date hereof (1) 8,576,540 Common Shares were issued and outstanding, (2) no shares of preferred stock were issued or outstanding, (3) 233,213 Common Shares were held by the Company in its treasury, and (4) 1,466,674 Common Shares were reserved for issuance pursuant to outstanding Options, including 34,672 Shares reserved for issuance pursuant to the Microtest, Inc. Employee Stock Purchase Plan. No Common Shares are owned by any subsidiary of the Company. Except as set forth above or as contemplated by the Rights Agreement, at the time of execution of this Agreement, no shares of capital stock or other equity or voting securities of the Company are issued, reserved for issuance or outstanding. All outstanding shares of capital stock and other equity or voting securities of the Company (including all options, warrants and other convertible securities) are, and all shares which may be issued pursuant to outstanding options, warrants or other convertible securities will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to, or issued in violation of, any preemptive right, purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right. Except for the Common Shares, there are no outstanding bonds, debentures, notes or other indebtedness or securities of the Company or any of its subsidiaries, having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which any stockholders of the Company or of any of its subsidiaries may vote. 12 (c) Except as set forth above and except for the Rights, there are no outstanding securities, options, warrants, calls, rights, commitments, stock subscriptions or Contracts of any kind to which the Company or any of its subsidiaries is a party or by which any of them is bound obligating the Company or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities (including options, warrants and other convertible securities) of the Company or of any of its subsidiaries or obligating the Company or any of its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment or Contract. Except as contemplated by this Agreement or the Rights Agreement and except for the Company"s obligations in respect of the Options under the Stock Plans, there are no outstanding rights, commitments or Contracts of any kind obligating the Company or any of its subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock or other equity or voting securities of the Company or any of its subsidiaries or any securities of the type described in the two immediately preceding sentences. The Company has delivered or made available to Parent complete and correct copies of all Company option plans and all forms of Options. Section 4.2(c) of the Company Disclosure Schedule sets forth a complete and accurate list of all Options outstanding as of the date hereof and the exercise price of and number of shares underlying each such outstanding Option. Other than the Options set forth on Section 4.2(c) of the Company Disclosure Schedules, there are no Options, warrants or other convertible securities outstanding, and no other Options, warrants or other convertible securities will be or become outstanding at any time prior to the Effective Time. Except as set forth on Section 4.2(c) of the Company Disclosure Schedule, each Option outstanding as of the date hereof is immediately exercisable and vested as of the date hereof. Except as set forth on Section 4.2(c) of the Company Disclosure Schedule, no Options will become vested or exercisable, in whole or in part, as a result of the transactions contemplated hereby. Except as described in Section 4.2(c)of the Company Disclosure Schedule, as of the date hereof, there are no stock-appreciation rights, stock-based performance units, "phantom" stock rights or other Contracts of any character (contingent or otherwise) pursuant to which any person is or may be entitled to (1) receive any payment or other value based on the assets, revenues, earnings or financial performance, stock price performance or other attribute of the Company or any of its subsidiaries or calculated in accordance therewith (other than ordinary course payments or commissions to sales representatives of the Company based upon revenues generated by them without augmentation as a result of the transactions contemplated hereby), or (2) cause the Company or any of its subsidiaries to file a registration statement under the Securities Act, or which otherwise relate to the registration of any securities of the Company. Except as set forth in Section 4.2(c) of the Company Disclosure Schedule, there are no voting trusts, proxies, antitakeover plans or other Contracts of any character to which the Company or any of its subsidiaries is a party or by which any of them is bound or, to the knowledge of the Company and except as have been disclosed in the SEC Reports, to which any of the Company's stockholders is a party or by which any of them is bound, in each case, with respect to the issuance, holding, acquisition, voting or disposition of any shares of capital stock of the Company or any of its subsidiaries. Section 4.3 Authority Relative to this Agreement and Related Matters. -------------------------------------------------------- The Company has all necessary corporate power and authority to execute and deliver this Agreement and, except for any required approval by the Company's stockholders in connection with consummation of the Merger, to consummate the transactions contemplated hereby. The execution and delivery of this 13 Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized and approved by the Company Board and no other corporate proceedings on the part of the Company are necessary to authorize or approve this Agreement or to consummate the transactions contemplated hereby (other than, with respect to the Merger, the approval of this Agreement by the affirmative vote of the holders of a majority of the voting power of the then outstanding Common Shares entitled to vote thereon, to the extent required by applicable Law and the filing of the certificate of merger pursuant to the GCL). This Agreement has been duly and validly executed and delivered by the Company and, assuming the due and valid authorization, execution and delivery of this Agreement by Parent and the Purchaser, constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms. Section 4.4 Conflict; Required Filings and Consents. --------------------------------------- (a) Assuming (i) the filings required under the HSR Act and any domestic, foreign or supranational antitrust Laws are made and any waiting periods thereunder that suspend the right to close the transactions contemplated hereby have been terminated or have expired, (ii) the requirements of the Exchange Act and any applicable state securities, "blue sky" or takeover Law are met, (iii) the filing of the certificate of merger and other appropriate merger documents, if any, as required by the GCL, is made, and (iv) with respect to the Merger, approval of this Agreement by the affirmative vote of the holders of a majority of the voting power of the then outstanding Common Shares entitled to vote thereon, if required by the GCL, is received, none of the execution and delivery of this Agreement by the Company, the consummation by the Company of the transactions contemplated hereby or compliance by the Company with any of the provisions hereof will (i) conflict with or violate the certificate of incorporation or bylaws of the Company or the comparable organizational documents of any of its subsidiaries, (ii) except as disclosed on Section 4.4(a) of the Company Disclosure Schedule, result in a breach or violation of, a default under or the triggering of any payment or other material obligations pursuant to, any of the Company's existing Employee Benefit Arrangements (as hereinafter defined) or any grant or award made under any of the foregoing, (iii) except as disclosed on Section 4.4(a) of the Company Disclosure Schedule, conflict with or violate in any material respect any statute, ordinance, rule, regulation, order, judgment, decree, permit or license applicable to the Company or any of its subsidiaries, or by which any of them or any of their respective properties or assets may be bound or affected, or (iv) except as disclosed on Section 4.4(a) of the Company Disclosure Schedule, result in a violation or breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in any loss of any benefit, or the creation of any Lien on any of the properties or assets of the Company or any of its subsidiaries (any of the foregoing referred to in clause (ii), (iii) or this clause (iv) being a "Violation") pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or any of their respective properties may be bound or affected, other than, in the case of clause (iv) above, any such Violations that, individually or in the aggregate, would not (A) reasonably be expected to have a Material Adverse Effect on the Company, (B) materially impair the ability of the Company to perform its obligations under this Agreement or (C) prevent or materially delay consummation of the Offer or the Merger. 14 (b) None of the execution and delivery of this Agreement by the Company, the consummation by the Company of the transactions contemplated hereby or compliance by the Company with any of the provisions hereof will require any consent, waiver, approval, authorization or permit of, or registration or filing with or notification to (any of the foregoing being a "Consent"), any government or subdivision thereof, domestic, foreign or supranational or any administrative, governmental or regulatory authority, agency, commission, tribunal or body, domestic, foreign or supranational (each, a "Governmental Entity"), except for (i) compliance with any applicable requirements of the Exchange Act, (ii) the filing of the certificate of merger pursuant to the GCL, (iii) compliance with the HSR Act and any requirements of domestic, foreign and supranational antitrust Laws, and (iv) such filings, authorizations, orders and approvals as to which failure to obtain or make would not (x) reasonably be expected to have a Material Adverse Effect on the Company or (y) prevent or materially delay the consummation of the Offer or the Merger. Section 4.5 SEC Reports and Financial Statements. ------------------------------------ (a) The Company has filed with the SEC all forms, reports, schedules, registration statements, definitive proxy statements and other documents required to be filed by the Company with the SEC under the Securities Act or the Exchange Act since January 1, 1996 (as they have been amended or superseded by subsequent filings under the Securities Act or Exchange Act since the time of their filing, and including any documents filed as exhibits thereto and all financial statements or schedules included or incorporated by reference therein, collectively, the "SEC Reports") and complete and correct copies of all of the SEC Reports are available to Parent on EDGAR. The SEC Reports complied in all material respects with the requirements of the Exchange Act or the Securities Act of 1933, as amended (the "Securities Act"), as applicable, and the rules and regulations of the SEC promulgated thereunder. Except as set forth in Section 4.5(a) of the Company Disclosure Schedule, as of their respective dates, as of the date they were filed or, if amended or superseded by subsequent filings under the Securities Act or Exchange Act, as of the date of such amendment or superseding filing, none of the SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. None of the Company's subsidiaries is required to file any form, report or other document with the SEC. (b) Each of the consolidated financial statements (including, in each case, any notes thereto) contained in the SEC Reports (as such financial statements have been amended or restated since the time of that filing) was prepared in accordance with United States generally accepted accounting principles ("GAAP") (except, in the case of unaudited quarterly statements, as permitted by Form 10-Q of the Exchange Act and subject to normal year-end audit adjustments which are not individually or in the aggregate material) applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto) and each fairly presents, in all material respects, the consolidated financial position, results of operations and cash flows of the Company and its consolidated subsidiaries as at the respective dates thereof and for the respective periods indicated therein (except as otherwise noted therein). 15 (c) The consolidated balance sheets as of December 31, 2000 and 1999 and the consolidated statements of income, stockholders' equity and cash flows for each of the three fiscal years in the period ended December 31, 2000 (including the related notes and schedules thereto) of the Company contained in the Company's Form 10-K for the fiscal year ended December 31, 2000 present fairly the consolidated financial position and the consolidated results of operations and cash flows of the Company and its consolidated subsidiaries as of the dates and for the periods presented therein and were prepared in accordance with GAAP consistently applied during the periods involved except as otherwise noted therein, including the related notes. (d) Except as reflected, reserved against or otherwise disclosed in the consolidated balance sheet of the Company and its consolidated subsidiaries contained in the Company's Form 10-Q for the fiscal quarter ended March 31, 2001, neither the Company nor any of its subsidiaries has any material liabilities, indebtedness or obligations (absolute, accrued, fixed, contingent or otherwise) other than liabilities that have been (i) disclosed in the SEC Reports prior to the date hereof or in Section 4.5(d) of the Company Disclosure Schedule, or (ii) incurred in the ordinary course of business consistent with past practice since March 31, 2001 which, in the case of clause (ii), would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. (e) The Company has heretofore furnished to Parent a complete and correct copy of any amendments or modifications which have not yet been filed with the SEC to agreements, documents or other instruments which previously had been filed by the Company with the SEC pursuant to the Securities Act and the rules and regulations promulgated thereunder or the Exchange Act and the rules and regulations promulgated thereunder. (f) The Company is, and has been, in compliance in all material respects with all listing requirements required to maintain listing on the Nasdaq National Market. Section 4.6 Environmental Matters. --------------------- Except as may be set forth in Section 4.6 of the Company Disclosure Schedule: (a) The business and operations of the Company and its subsidiaries comply in all material respects with all applicable Environmental Laws; the Company and its subsidiaries have obtained all material Governmental Permits relating to Environmental Laws necessary for the operation of their businesses; and all such Governmental Permits are set forth on Section 4.6 of the Company Disclosure Schedule and are in full force and effect and the Company and its subsidiaries are in compliance with terms and conditions of such permits except, in the case of each of the foregoing, for such events or noncompliance as would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect on the Company. Neither the Company nor any of its subsidiaries has received notice of, or, to the knowledge of the Company, is subject to any pending or threatened investigation by, order from or claim by any person (including without limitation any Governmental Entity or prior owner or operator of any of the Company Property) respecting (i) any Environmental Law, (ii) any Remedial Action or (iii) any claim arising from the Release or threatened Release of a Contaminant into the environment. Neither the Company nor any of its subsidiaries is subject to any pending, or to the knowledge of 16 the Company, threatened, judicial or administrative proceeding, order, judgment, decree or settlement alleging or addressing a violation of or liability under any Environmental Law. (b) Neither the Company nor any of its subsidiaries has (i) reported a Release of a hazardous substance pursuant to Section 103(a) of CERCLA, or any state equivalent; (ii) filed a notice pursuant to Section 103(c) of CERCLA; or (iii) filed any notice under any applicable Environmental Law reporting a violation of any applicable Environmental Law. To the knowledge of the Company, there is not now nor has there ever been, on or in any Company Property: (A) any Release, (B) any treatment, recycling, disposal or storage, other than short term storage prior to removal by a licensed transporter for off-site disposal, of any hazardous waste, as that term is defined under RCRA or any state equivalent, or (C) any underground storage tank or surface impoundment or landfill or waste pile, except, in the case of each of the foregoing, for such events which would not, individually or in the aggregate, have a Material Adverse Effect on the Company. (c) To the knowledge of the Company, there is not now on or in any Company Property any polychlorinated biphenyls (PCB) used in the Company's operations in pigments, hydraulic oils, electrical transformers or other equipment. (d) To the knowledge of the Company, any asbestos-containing material or presumed asbestos-containing material which is on or part of any Company Property presently owned, leased or operated by the Company or any of its subsidiaries, as currently configured and operated, is in good repair according to the current standards and practices governing such material, and its presence or condition does not materially violate any currently applicable Environmental Law. None of the products manufactured, distributed or sold by the Company or any of its subsidiaries contained asbestos or asbestos-containing material. (e) For purposes of this Section: (i) "Company Property" means any real or personal property, plant, building, facility, structure, underground storage tank, equipment or unit, or other asset now or, to the Company's knowledge, previously owned, leased or operated primarily by the Company or any of its present or, to the Company's knowledge, past subsidiaries. (ii) "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act, as amended, and any regulations promulgated thereunder. (iii) "Contaminant" means any waste, pollutant, hazardous or toxic substance or waste, petroleum, petroleum-based substance or waste, special waste, hazardous material or any constituent of any such substance, waste or material, in each case to the extent regulated by Environmental Law. (iv) "Environmental Law" means all foreign, federal, state and local Laws or regulations relating to or addressing the environment, health and 17 safety as related to Contaminants, including but not limited to CERCLA, OSHA and RCRA, any analogous foreign, state or local law, and the common law. (v) "Governmental Permits" means any permits, licenses, certificates, orders, Consents, authorizations franchises and other approvals from, or required by, any Governmental Entity that are used by, or are necessary to own and to operate, the business of the Company and its subsidiaries as currently configured and operated, together with any applications for the issuance, renewal, modification or extension thereof and all supporting information and analyses. (vi) "OSHA" means the Occupational Safety and Health Act, as amended, and any regulations promulgated thereunder. (vii) "RCRA" means the Resource Conservation and Recovery Act, as amended, and any regulations promulgated thereunder. (viii) "Release" means release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration of a Contaminant into the environment or into or out of any Company Property, including the movement of Contaminants through or in the air, soil, surface water, or groundwater of Company Property. Section 4.7 Compliance with Applicable Laws. ------------------------------- (a) Except with respect to those matters that are the subject of the representations and warranties set forth in Sections 4.6, 4.12 and 4.16 of this Agreement, and except as set forth in Section 4.7 of the Company Disclosure Schedule, the Company and its subsidiaries hold all permits, registrations, clearances, licenses, variances, exemptions, orders and approvals of all Governmental Entities material to the Company or required for them to own their assets and conduct their business as now owned, conducted and performed (the "Company Permits"). The Company and its subsidiaries are in compliance in all material respects with the terms of the Company Permits. Except with respect to those matters that are the subject of the representations and warranties set forth in Sections 4.6, 4.12 and 4.16 of this Agreement, the business operations of the Company and its subsidiaries have been conducted in compliance, in all respects material to the Company and its subsidiaries, with all Laws, ordinances and regulations of any Governmental Entity. No suspension or cancellation of any of the Company Permits is pending or, to the knowledge of the Company, threatened. Neither the Company nor any Subsidiary is in material default, breach or violation of any Law applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries is bound or affected. No person other than the Company or one of its subsidiaries owns or has any proprietary, financial or other interest in any Company Permit. (b) The Company and its subsidiaries have not made, directly or indirectly, any payment or promise to pay, or gift or promise to give or authorized such a promise or gift, of any money or anything of value, directly or indirectly, to (i) any foreign official (as such term is defined in the Foreign Corrupt Practices Act of 1977, as amended (the "FCPA") for the purpose of influencing any official act or decision of such official or inducing him or her to do or omit to do 18 any act in violation of his or her lawful duty, to affect any act or decision of such official, or to secure any improper advantage, or inducing him or her to use his or her influence to affect any act or decision of a foreign government, or any agency or subdivision thereof or (ii) any foreign political party or official thereof or candidate for foreign political office for the purpose of influencing any official act or decision of such party, official or candidate or inducing him or her to do any act in violation of his or her lawful duty, or to secure any improper advantage, or inducing such party, official or candidate to use his, her or its influence to affect any act or decision of a foreign government or agency or subdivision thereof, in the case of both clauses (i) and (ii) above in order to assist the Company or any of its subsidiaries in obtaining or retaining business for or directing business to the Company or any of its subsidiaries or under circumstances which would subject the Company or any of its subsidiaries to liability under the FCPA (or any comparable foreign statute or regulation). The Company has not made any bribe, kickback or other illegal payment in violation of any foreign or domestic Law. Section 4.8 Change of Control. Except as set forth in Section 4.2(c), ----------------- Section 4.4(a) or Section 4.8 of the Company Disclosure Schedule, the transactions contemplated by this Agreement will not constitute a "change of control" under, require the Consent from or the giving of notice to a third party pursuant to, permit a third party to terminate or accelerate vesting or repurchase rights or create any other detriment under the terms, conditions or provisions of any material note, bond, mortgage, indenture, license, lease, agreement or other instrument, obligation or Contract to which the Company or any of its subsidiaries is a party or by which any of them or any of their properties or assets may be bound. Section 4.8 of the Company Disclosure Schedule sets forth the Company's best estimates of the amounts payable to the executives listed therein, as a result of the transactions contemplated by this Agreement and/or any subsequent employment termination (including any cash-out or acceleration of options and restricted stock and any "gross-up" payments with respect to any of the foregoing), based on compensation data applicable as of the date of such Schedule and the assumptions stated on that Schedule. Section 4.9 Litigation. Except as set forth on Section 4.9 of the Company ---------- Disclosure Schedule, there is no Litigation pending or, to the knowledge of the Company, threatened, against the Company or any of its subsidiaries which, individually or in the aggregate, would reasonably be expected to (i) have a Material Adverse Effect on the Company and its subsidiaries as a whole or (ii) prevent or materially delay the consummation of the Offer and the Merger. Except as disclosed in the SEC Reports filed prior to the date of this Agreement, neither the Company nor any of its subsidiaries, nor any of their respective rights, properties or assets, is subject to any outstanding Order which would reasonably be expected to (i) have a Material Adverse Effect on the Company or (ii) prevent or materially delay the consummation of the Offer and the Merger. To the knowledge of the Company, there are no Litigation or Orders pending or threatened against any person whom the Company or any of its subsidiaries has agreed to indemnify, concerning such person's conduct as a director, officer, employee or agent of the Company or any of its subsidiaries. Section 4.10 Information. Neither the Schedule 14D-9 nor any of the ----------- information supplied by the Company specifically for inclusion or incorporation by reference in (i) the Offer Documents, (ii) the Proxy Statement or (iii) any other document to be filed with the SEC or any other Governmental Entity in connection with the transactions contemplated by this Agreement 19 (the "Other Filings") will, at the respective times filed with the SEC or other Governmental Entity and, in addition, at the date any of such Other Filings or any amendment or supplement thereto is published, sent or given to stockholders, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Proxy Statement shall not, at the date it is first mailed to stockholders of the Company, at the time of the Stockholders' Meeting and at the Effective Time, contain any statement which, at the time and in light of the circumstances under which it was made, is false or misleading with respect to any material fact, or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of proxies for the Stockholders' Meeting which shall have become false or misleading. The Schedule 14D-9 and the Proxy Statement will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder, except that no representation is made by the Company with respect to any statements made therein based on information supplied by Parent or the Purchaser in writing specifically for inclusion in the Proxy Statement. Section 4.11 Certain Approvals. The Company has taken all necessary action ----------------- to ensure that the restrictions on "business combinations" under Section 203 of the GCL do not and shall not apply to or be triggered by this Agreement or the consummation of the transactions contemplated hereby and such action is effective as of the date hereof. To the knowledge of the Company, no state takeover statute or similar statute or regulation applies to the Offer, the Merger or the transactions contemplated by this Agreement. Section 4.12 Employee Benefit Plans. ---------------------- (a) Section 4.12(a) of the Company Disclosure Schedule includes a complete list of all material employee benefit plans, programs, and other arrangements providing incentive compensation or benefits to any employee or former employee or beneficiary or dependent thereof, whether or not written, and whether covering one person or more than one person, sponsored or maintained by the Company or any of its subsidiaries or to which the Company or any of its subsidiaries contributes or is obligated to contribute ("Plans"). Without limiting the generality of the foregoing, the term "Plans" includes all employee welfare benefit plans within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder ("ERISA") and all employee pension benefit plans within the meaning of Section 3(2) of ERISA. (b) With respect to each material Plan, the Company has delivered to Parent a true, correct and complete copy of: (i) each writing constituting a part of such Plan, including without limitation all plan documents, amendments, benefit schedules, trust agreements, and insurance contracts and other funding vehicles; (ii) the most recent Annual Report (Form 5500 Series) and accompanying schedule, if any; (iii) the current summary plan description, if any; (iv) the most recent annual financial report, if any; (v) the most recent actuarial report, if any; and (vi) the most recent determination letter from the Internal Revenue Service (the "IRS"), if any. Except as set forth on Section 4.12(b) of the Company Disclosure Schedule, neither the Company nor any of its subsidiaries has undertaken to make any amendments to any Plan. 20 (c) Section 4.12(c) of the Company Disclosure Schedule identifies each Plan that is intended to be a "qualified plan" within the meaning of Section 401(a) of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder (the "Code") ("Qualified Plans"). The IRS has issued a favorable determination letter with respect to each Qualified Plan that has not been revoked, and there are no existing circumstances nor any events that have occurred that could reasonably be expected to result in the loss of the qualified status of any Qualified Plan or the related trust. The Company does not provide benefits through a voluntary employee beneficiary association as defined in Code Section 501(c)(9)). (d) In all material respects, all contributions required to be made to any Plan by applicable Law or regulation or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any Plan, for any period through the date hereof have been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected in the financial statements of the Company included in the SEC Reports to the extent required under generally accepted accounting principles. (e) The Company and each of its subsidiaries has complied, and is now in compliance, in all material respects with all provisions of ERISA, the Code and all Laws and regulations applicable to the Plans. There is not now, nor do any circumstances exist that could give rise to, any requirement for the posting of security with respect to a Plan or the imposition of any lien on the assets of the Company or any of its subsidiaries under ERISA or the Code. No non-exempt prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) has occurred with respect to any Plan that could reasonably be expected to result in the imposition of any penalty or tax on the Company or for which the Company would be liable. (f) Neither the Company, any of its subsidiaries, nor any ERISA Affiliate has ever sponsored or maintained or had any liability (whether actual or contingent) with respect to any Plan subject to Code Section 412, ERISA Section 302, Title IV (including any plan described in ERISA Section 302) or any comparable plan not covered by ERISA ("Pension Plan"); neither the Company nor any of its subsidiaries has any liability (whether actual or contingent) with respect to any Pension Plan maintained by any predecessor entity (or any of their ERISA Affiliates); neither the Company nor any of its subsidiaries has any liability (whether actual or contingent) with respect to any Plans maintained, now or in the past (or that should have been maintained), by any ERISA Affiliate or predecessor. (g) No Plan is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA (a "Multiemployer Plan") or a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA and which is subject to Title IV of ERISA (a "Multiple Employer Plan"), nor has the Company or any of its subsidiaries, or any of their respective ERISA Affiliates (as defined in the next sentence), at any time during the last six years, contributed to or been obligated to contribute to any Multiemployer Plan or Multiple Employer Plan. An "ERISA Affiliate" means any entity, trade or business that is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes the Company or any of its subsidiaries, or that 21 is a member of the same "controlled group" as the Company or any of its subsidiaries, pursuant to Section 4001(a)(14) of ERISA. (h) There does not now exist, nor do any circumstances exist that could reasonably be expected to result in, any liability under (i) Title IV of ERISA, (ii) Section 302 of ERISA, (iii) Sections 412 and 4971 of the Code, (iv) the continuation coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the Code, or (v) corresponding or similar provisions of foreign Laws or regulations, other than a liability that arises solely out of, or relates solely to, the Plans, that would be a liability of the Company or any of its subsidiaries following the Effective Time. Without limiting the generality of the foregoing, none of the Company, its subsidiaries nor any ERISA Affiliate of the Company or any of its subsidiaries has engaged in any transaction described in Section 4069 or Section 4204 or 4212 of ERISA. (i) Neither the Company nor any of its subsidiaries has any liability for life, health, medical or other welfare benefits to former employees or beneficiaries or dependents thereof, except for health continuation coverage as required by Section 4980B of the Code or Part 6 of Title I of ERISA and at no additional expense to the Company and its subsidiaries. (j) There are no pending or, to the Company's knowledge, threatened claims (other than claims for benefits in the ordinary course), lawsuits or arbitrations which have been asserted or instituted against the Plans, any fiduciaries thereof with respect to their duties to the Plans or the assets of any of the trusts under any of the Plans which could reasonably be expected to result in any material liability of the Company or any of its subsidiaries to the Pension Benefit Guaranty Corporation, the Department of Treasury, the Department of Labor or any Multiemployer Plan. (k) Except as set forth in Section 4.2(c), or Section 4.8 of the Company Disclosure Schedule, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in conjunction with any other event) result in, cause the accelerated vesting, funding or delivery of, or increase the amount or value of, any payment or benefit to any employee, officer or director of the Company or any of its subsidiaries or result in any limitation on the right of the Company or any of its subsidiaries to amend, merge, terminate or receive a reversion of assets from any Plan or related trust. Without limiting the generality of the foregoing, no amount paid or payable (whether in cash, in property, or in the form of benefits) by the Company or any of its subsidiaries in connection with the transactions contemplated hereby (either solely as a result thereof or as a result of such transactions in conjunction with any other event) will be an "excess parachute payment" within the meaning of Section 280G of the Code. (l) All Plans subject to the Laws of any jurisdiction outside of the United States: (i) have been maintained in all material respects in accordance with all applicable requirements, (ii) if they are intended to qualify for special tax treatment meet all requirements for such treatment, and (iii) if they are intended to be funded and/or book-reserved are fully funded and/or book reserved, as appropriate, based upon reasonable actuarial assumptions. 22 (m) Except as set forth in Section 4.12(m) of the Company Disclosure Schedule, since January 1, 2001, the Company has not increased the compensation or fringe benefits payable or to be payable to its directors, officers or employees (whether from the Company or any of its subsidiaries), or paid or awarded any benefit not required by any existing plan or arrangement to any officer, director or employee (including, without limitation, the granting of stock options, stock appreciation rights, shares of restricted stock or performance units pursuant to the Stock Plans or otherwise), or granted any severance or termination pay to any officer, director or other employee of the Company or any of its subsidiaries (other than as required by existing agreements or policies described in the Company Disclosure Schedule), or entered into any employment or severance agreement with, any director, officer or other employee of the Company or any of its subsidiaries or established, adopted, entered into, amended or waived any Employee Benefit Arrangement (as hereinafter defined), except, in each case, to the extent required by applicable Law. Section 4.13 Intellectual Property. --------------------- (a) Set forth on Section 4.13(a) of the Company Disclosure Schedule is a list of all material patents, patent applications, patent disclosures, trademark registrations and trademark applications, Internet domain names, service mark registrations and service mark applications, certification mark registrations and certification mark applications, copyright registrations and copyright registration applications, mask works registrations and mask works registration applications, both domestic and foreign, which are owned or used by the Company or any of its subsidiaries. The assets described on Section 4.13(a) of the Company Disclosure Schedule and all other material computer software, trade secrets, trademarks, trade names, service marks, certification marks, copyrights, know-how, methods, processes, procedures, apparatus, equipment, industrial property, discoveries, inventions, patent disclosures, invention disclosures (whether or not patentable or reduced to practice), designs, drawings, plans, specifications, engineering data, manuals, development projects, research and development work in progress, technology and other proprietary rights, confidential information or intellectual property ("Intellectual Property") which are owned or used by the Company or any of its subsidiaries are referred to as the "Company Intellectual Property." To the knowledge of the Company, the Company and its subsidiaries own all right, title and interest in and to the Company Intellectual Property validly and beneficially, free and clear of all material Liens, with the sole and exclusive right to use the same, subject to those licenses listed on Section 4.13(b) of the Company Disclosure Schedule. To the knowledge of the Company, the Company Intellectual Property constitutes all the Intellectual Property necessary or appropriate to conduct the business of the Company and its subsidiaries as presently conducted and as currently proposed to be conducted. (b) Set forth on Section 4.13(b) of the Company Disclosure Schedule is a list of (i) all material licenses, assignments and other transfers of Company Intellectual Property granted or assigned to others by the Company or any of its subsidiaries, and (ii) all Intellectual Property licensed, granted or assigned to the Company or any of its subsidiaries by others. Neither the execution of this Agreement nor the consummation of any of the transactions contemplated hereby will adversely affect any of the Company's or any of its subsidiaries' rights with respect to any of the Company Intellectual Property, and none of the material licenses, assignments or other transfers described above is subject to termination or cancellation or change in its terms or 23 provisions as a result of this Agreement or the transactions provided for in this Agreement. To the knowledge of the Company, there is no material unauthorized use, infringement or misappropriation of any Company Intellectual Property by any third party. (c) Except as set forth on Section 4.13(c) of the Company Disclosure Schedule, no material claim by a third party against the Company, any of its subsidiaries or any of their respective assets with respect to the Company Intellectual Property has been asserted or, to the knowledge of the Company, is threatened by any person, nor does the Company have knowledge of any valid ground for any bona fide claims, (i) to the effect that the manufacture, sale or use of any product, service or process as used (currently or in the past) or offered or proposed for use or sale by the Company infringes on any Intellectual Property of any person, (ii) against the Company or any subsidiary relating to the use of any Intellectual Property, or (iii) challenging the ownership, validity or effectiveness of any Company Intellectual Property. All granted and issued patents and all registered trademarks and service marks listed in Section 4.13(a) of the Company Disclosure Schedule and all copyrights held by the Company are valid, enforceable and subsisting. (d) No Company Intellectual Property is subject to any outstanding order, judgment, decree, stipulation or agreement restricting in any manner the licensing, assignment or other transfer, use or enforceability thereof by the Company. The Company has not entered into any agreement to indemnify any other person against any charge of infringement of any Intellectual Property, except indemnities agreed to in the ordinary course of business in connection with the sale, delivery or transfer of Company products or services or included as part of the Company's license agreements. The Company or its subsidiaries have the exclusive right to file, prosecute and maintain all applications and registrations with respect to the Company Intellectual Property. Section 4.14 Taxes. ----- (a) All Tax Returns (as hereinafter defined) required to be filed by the Company and each of its subsidiaries have been timely filed after giving effect to any extensions. All such Tax Returns were correct and complete in all material respects. Except as set forth in Section 4.14(a) of the Company Disclosure Schedule, all Taxes required to be paid by the Company and each of its subsidiaries that are due and payable have been paid, whether or not shown on any Tax Return. Each of the Company and its subsidiaries has made adequate provision in reserves established in its financial statements and accounts for all Taxes which have accrued but are not yet due and payable. Except as set forth in Section 4.14(a) of the Company Disclosure Schedule, neither the Company nor any of its subsidiaries is currently the beneficiary of any extension of time within which to file any Tax Return. (b) There are no material liens for Taxes upon the assets of the Company or any of its subsidiaries other than liens for current Taxes not yet due and payable. (c) The Company and its subsidiaries have withheld or collected and paid over to the appropriate governmental authorities or are properly holding for such payment all Taxes required by law to be withheld or collected. 24 (d) Except as set forth in Section 4.14(d) of the Company Disclosure Schedule, there is no claim or dispute concerning any material Tax liability of the Company or its subsidiaries either (i) claimed or raised by any authority in writing or (ii) as to which any of the directors and officers (and employees responsible for Tax matters) of the Company and its subsidiaries has knowledge based on personal contact with any agent of such authority. There is no audit, examination, or similar proceeding currently in progress or pending with respect to Taxes or Tax Returns of the Company or any of its subsidiaries. (e) Section 4.14(e) of the Company Disclosure Schedule lists the periods for which the Tax Returns required to be filed by the Company or any of its subsidiaries have been examined by the IRS or other appropriate taxing authority. All material deficiencies and assessments asserted as a result of such examinations or other audits by federal, state, local or foreign taxing authorities have been paid, fully settled or adequately provided for in the Company's financial statements, and no issue or claim has been asserted in writing for Taxes by any taxing authority for any prior period, other than those heretofore paid or provided for in the Company's financial statements. There are no outstanding agreements or waivers extending the statutory period of limitation applicable to any Tax Return of the Company or any of its subsidiaries. (f) Neither the Company nor any of its subsidiaries is required to include in income any adjustment pursuant to Section 481(a) of the Code (or similar provision of state or local law) by reason of a change in accounting method. (g) Neither the Company nor any if its subsidiaries has been a party to any deferred intercompany transaction pursuant to which it realized but did not recognize a gain, and no excess loss account exists with respect to the shares of stock of any member of the federal consolidated income tax group of which the Company is the common parent. (h) Neither the Company nor any of its subsidiaries has been a party to any "closing agreement" as described in Section 7121 of the Code (or any corresponding provision of state or local income Tax law). (i) During the past five years, neither the Company nor any of its subsidiaries has been party to any transaction, either as a distributing corporation or controlled corporation, that has been reported to qualify for tax-free treatment under Section 355 of the Code. (j) Neither the Company nor any of its subsidiaries has a permanent establishment in any foreign country. (k) Neither the Company nor any of its subsidiaries has made any payments, nor is or will become obligated to make any payments, that will be non-deductible under Section 280G of the Code (or any corresponding provision of state, local, or foreign income Tax law). (l) Neither the Company nor any of its subsidiaries has filed a consent pursuant to Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as such term is defined in Section 341(f)(4) of the Code) owned by the Company or any of its subsidiaries. 25 (m) Neither the Company nor any of its subsidiaries (i) has been a member of a group filing consolidated returns for federal income Tax purposes (except for the group of which the Company is the common parent), (ii) has any liability for the Taxes of any person (other than the Company and its subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferor or successor, by contract or otherwise, or (iii) is a party to, bound by, or has any continuing obligation under any Tax sharing, Tax indemnity, or any other agreement of a similar nature. (n) For purposes of this Agreement, the term "Tax" or "Taxes" means all taxes, charges, fees, levies or other assessments, including, without limitation, income, gross receipts, excise, property, sales, transfer, license, payroll, withholding, capital stock and franchise taxes, imposed by the United States or any state, local or foreign government or subdivision or agency thereof, including any interest, penalties or additions thereto. For purposes of this Agreement, the term "Tax Return" means any report, return or other information or document required to be supplied to a taxing authority in connection with Taxes. (o) The Company has delivered to Parent true and complete copies of (i) all Federal income Tax Returns of the Company and its subsidiaries for the preceding three taxable years and (ii) any audit report issued within the last three years (or otherwise with respect to any audit or proceeding in progress) relating to Federal income taxes of the Company or any subsidiary. Section 4.15 Absence of Certain Changes. Except as disclosed in the SEC -------------------------- Reports filed prior to the date of this Agreement or as set forth in Section 4.15 of the Company Disclosure Schedule and except for the transactions expressly contemplated by this Agreement, since December 31, 2000 (i) there has not been any Material Adverse Effect on the Company; (ii) the businesses of the Company and each of its subsidiaries have been conducted only in the ordinary course and in a manner consistent with past practice; and (iii) neither the Company nor any of its subsidiaries has incurred any material liabilities (direct, contingent or otherwise) or engaged in any material transaction or entered into any material agreement or commitments outside the ordinary course of business, other than in connection with the contemplated sale or disposition of the Excluded Business in accordance with the terms hereof and other than the shut-down of the NAS Business. Section 4.16 Labor Matters. ------------- (a) No employees of the Company or of any of its subsidiaries are represented by any labor union or any collective bargaining organization. No labor organization or group of employees of the Company or any of its subsidiaries has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or, to the knowledge of the Company, threatened to be brought or filed, with the National Labor Relations Board or any other labor relations tribunal or authority. To the Company's knowledge, as of the date hereof, no facts or event exists that is likely to give rise to a violation of Section 4.16(a) on or before the Effective Time. (b) With respect to employees of and services providers to the Company: 26 (i) The Company complies and has complied materially with all employment agreements and all applicable domestic and foreign Laws respecting employment and employment practices, terms and conditions of employment and wages and hours, including without limitation any such employment agreements or Laws respecting employment discrimination, workers' compensation, family and medical leave, the Immigration Reform and Control Act, and occupational safety and health requirements, and no claims or investigations are pending or, to the Company's knowledge, threatened with respect to such Laws, either by private individuals or by governmental agencies; all employees of the Company and each of the subsidiaries are at will except as set forth in Section 4.16(b) of the Company Disclosure Schedule; and all employees have signed confidentiality/non-disclosure agreements; (ii) The Company is not, nor has it ever been, engaged in any unfair labor practice. There is not now, nor within the past three years has there been, any unfair labor practice complaint against the Company pending or, to the Company's knowledge, threatened, before the National Labor Relations Board or any other comparable foreign or domestic authority or any workers' council; (iii) As of the date of this Agreement, no material grievance or arbitration proceeding arising out of or under collective bargaining agreements or employment relationships (involving more than one employee) is pending, and no claims therefor exist or have, to the Company's knowledge, been threatened; no labor strike, lock-out, slowdown, or work stoppage is pending or, to the Company's knowledge, threatened, against or directly affecting the Company; and, to the Company's knowledge as of the date hereof, no fact or event exists that is likely to give rise to a violation of Section 4.16(b)(iii) on or before the Effective Time; and (iv) All persons who are or were performing services for the Company and are or were classified as independent contractors do or did satisfy and have satisfied the requirements of Law to be so classified, and the Company has fully and accurately reported their compensation on IRS Forms 1099 when required to do so. Section 4.17 Relationships with Customers, Suppliers, Distributors and --------------------------------------------------------- Sales Representatives. Neither the Company nor any of its subsidiaries has - --------------------- received written notice that any customer, supplier, distributor or sales representative intends to cancel, terminate or otherwise modify its relationship with the Company or any subsidiary, which action would reasonably be expected to have a Material Adverse Effect on the Company. Section 4.18 Contracts. Section 4.18(a) of the Company Disclosure Schedule --------- lists all written or oral Contracts to which the Company or any of its subsidiaries is a party or by which any of them or any of their respective properties, rights or assets are bound, and which fall within any of the following categories (all of the Contracts required to be disclosed on Section 4.18(a) of the Company Disclosure Schedule are referred to as the "Material Contracts"): (i) material Contracts not entered into in the ordinary course of business including, without limitation, all 27 contracts in which the Company assumed or retained environmental liabilities in connection with the sale of companies or properties, (ii) joint venture, partnership and like agreements, (iii) Contracts containing covenants purporting to limit the freedom of the Company or any of its affiliates to compete in any line of business in any geographic area or to hire or solicit any individual or group of individuals (which are set forth in Section 4.18(a)(iii) of the Company Disclosure Schedule), (iv) Contracts which after the Effective Time would have the effect of limiting the freedom of Parent or any of its affiliates (other than the Company and its subsidiaries) to compete in any line of business in any geographic area or to hire any individual or group of individuals (which are set forth in Section 4.18(a)(iv) of the Company Disclosure Schedule), (v) Contracts which contain minimum purchase conditions or requirements or other terms that restrict or limit the purchasing relationships of the Company or any of its subsidiaries, (vi) Contracts relating to any outstanding commitment for capital expenditures in excess of $100,000, (vii) indentures, mortgages, promissory notes, loan agreements, guarantees of amounts in excess of $100,000, letters of credit or other agreements or instruments of the Company or any of its subsidiaries or commitments for the borrowing or the lending of amounts in excess of $100,000 by the Company or any of its subsidiaries or providing for the creation of any material charge, security interest, encumbrance or Lien upon any of the assets of the Company or any of its subsidiaries, (viii) Contracts with or for the benefit of any affiliate of the Company (other than subsidiaries of the Company), and (ix) all other Contracts, whether or not made in the ordinary course of business, which are material to the Company or any of its subsidiaries or to the conduct of their respective businesses, or the absence of which would prevent or materially delay consummation of the Offer or the Merger or otherwise prevent or materially delay the Company from performing its obligations hereunder or would result in a Material Adverse Effect on the Company. (b) All of the Material Contracts are valid and binding obligations of the Company or a subsidiary of the Company and, to the Company's knowledge, the valid and binding obligation of each other party thereto, enforceable in each case in accordance with their respective terms. Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company and each of its subsidiaries, any other party thereto, is in violation of or in default in respect of, nor has there occurred an event or condition which with the passage of time or giving of notice (or both) could constitute a default under, any such Contract, nor has the Company or any of its subsidiaries received any notice or claim of any such default. None of the Material Contracts with any affiliate of the Company are on terms less favorable to the Company or its subsidiaries than those that would be obtained from unaffiliated third parties. The Company has provided to Parent true and complete copies of all written Material Contracts, and true and complete summaries of all oral Material Contracts, including in each case all amendments thereto. Section 4.19 Product Recalls. The Company is not aware of any pattern or --------------- series of claims against the Company or any of its subsidiaries which reasonably could be expected to result in a generalized product recall relating to products sold by the Company or any of its subsidiaries, regardless of whether such product recall is formal, informal, voluntary or involuntary. Section 4.20 Interested Party Transactions. Except as set forth in Section ----------------------------- 4.20 of the Company Disclosure Schedule or disclosed in the SEC Reports, (i) there are no existing, and since December 31, 2000 there has been no Contract, transaction, indebtedness or other arrangement, or 28 any related series thereof, between the Company and any of its subsidiaries, on the one hand, and any of the current or former directors, officers, stockholders or other affiliates of the Company or of any of its subsidiaries, or any of their respective affiliates or family members, on the other hand (except for amounts due as normal salaries and bonuses and in reimbursement of ordinary expenses), (ii) there are no transactions involving Company of a nature that would be required to be described under Item 404 of Regulation S-K promulgated under the Securities Act, and (iii) none of the officers or directors of the Company or any of its subsidiaries has any material direct or indirect interest in any material property or assets used in or pertaining to the business of the Company or that of its subsidiaries, or in any supplier, distributor or customer of the Company or any of its subsidiaries. Section 4.21 Brokers. Except for the engagement of Financial Advisor, none ------- of the Company, any of its subsidiaries, or any of their respective officers, directors or employees has employed any broker or finder or incurred any liability for any brokerage fees, commissions or finder's fees in connection with the transactions contemplated by this Agreement. The Company has previously delivered to Parent a copy of the Company's engagement letters with Financial Advisor. Section 4.22 Opinion of Financial Advisor. The Company Board has received ---------------------------- an oral or written opinion of Financial Advisor to the effect that, as of the date hereof, the consideration to be received by the holders of Common Shares (other than Parent or any of its affiliates) pursuant to the Offer and the Merger, is fair to the Company's stockholders from a financial point of view. Promptly following the date hereof, the Company will deliver to Parent a written copy of such opinion. Section 4.23 Property and Leases. ------------------- (a) The Company and its subsidiaries have good, marketable and valid title to, or a valid leasehold interest in, all of the real and personal property owned by the Company or any of its subsidiaries or used or held for use by any of them in connection with, or necessary for, their respective businesses, free and clear of all Liens (collectively, the "Company Assets"). The Company Assets are all of the assets and properties necessary for the Company and its subsidiaries to conduct their respective businesses as presently conducted and as proposed to be conducted. All of the tangible Company Assets have been maintained in a reasonably prudent manner, are in good operating condition and repair, and no maintenance with respect thereto has been deferred or delayed. (b) Each material parcel of real property owned or leased by the Company or any of its subsidiaries is neither subject to any decree or order by any Governmental Entity to be sold nor is being condemned, expropriated or otherwise taken by any public authority with or without payment of compensation therefor, nor, to the knowledge of the Company, has any such condemnation, expropriation or taking been proposed. There are no persons other than the Company and its subsidiaries in possession of any of the real property owned or leased by the Company or any of its subsidiaries, or any portion thereof, and, to the Company"s knowledge, there are no Contracts granting to any person or persons other than the Company and its subsidiaries the right of use or occupancy of any portion of such real property. None of the 29 Company nor any of its Subsidiaries is obligated under or bound by any option, right or first refusal, purchase Contract, or other Contract to sell or otherwise dispose of any such real property or any other interest in any such real property. To the Company's knowledge, there are no contractual or legal restrictions that preclude or restrict the ability to use any real property owned or leased by the Company or any of its subsidiaries for the purposes for which it is currently being used, or material latent defects or material adverse physical conditions affecting the real property, and improvements thereon, owned or leased by the Company or any of its subsidiaries. (c) Each lease and sublease covering any Company Assets is a legal, valid and binding obligation of the Company and/or such subsidiary, as applicable, and, to the Company's knowledge, of each other party thereto and is enforceable, in accordance with its terms, against the Company and/or such subsidiary, as applicable, and, to the Company's knowledge, against each other party thereto, and such lease or sublease will continue to be valid, binding and enforceable in accordance with its terms and in full force and effect immediately following the consummation of the transactions contemplated hereby, with no material alteration or acceleration or increase in fees or liabilities. There is not under any such lease or sublease any material default by the Company or any of its subsidiaries or, to the knowledge of the Company, by any other person, or any condition, event or act which would constitute such a material default. Section 4.24 Insurance. --------- The Company and its subsidiaries maintain policies of insurance on terms, and in amounts, that are adequate for the conduct of their respective businesses, in each case as such business is currently conducted and consistent with customary practices and standards of companies engaged in businesses similar to that of the Company and the subsidiaries, and with insurers reasonably believed by the Company to be responsible. With respect to each material insurance policy: (i) the policy is legal, valid, binding and enforceable in accordance with its terms and, except for policies that have expired under their terms in the ordinary course, is in full force and effect; and (ii) neither the Company nor any of its subsidiaries is in material breach or default (including any such breach or default with respect to the payment of premiums or the giving of notice), and no event has occurred which, with notice or the lapse of time, would constitute such a breach or default, or permit termination or modification, under the policy. Section 4.25 Rights Agreement. ---------------- The Company and the Company Board have authorized all necessary action to amend the Rights Agreement (without redeeming the Rights) so that none of the execution or delivery of this Agreement, the making of the Offer, the acquisition of Common Shares pursuant to the Offer or the consummation of the Merger will (i) cause any Rights issued pursuant to the Rights Agreement to become exercisable or to separate from the stock certificates to which they are attached, (ii) cause Parent, the Purchaser or any of their Affiliates or Associates to be an Acquiring Person (as each such term is defined in the Rights Agreement) or (iii) trigger other provisions of the Rights Agreement, including giving rise to a Distribution Date or a Triggering Event (as each such term is defined in the Rights Agreement), and such amendment shall be in full force and effect from and after the date hereof. The Company has delivered to Parent a copy of the executed certificate delivered to the Rights Agent pursuant to Section 27 of the Rights Agreement. 30 ARTICLE FIVE REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER Parent and the Purchaser represent and warrant to the Company as follows: Section 5.1 Organization and Qualification. Parent is a corporation duly ------------------------------ organized, validly existing and in good standing under the Laws of Delaware. The Purchaser is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. Each of Parent and Purchaser has the requisite corporate power and authority to own, operate or lease its properties and to carry on its business as it is now being conducted, and is duly qualified or licensed to do business, and is in good standing, in each jurisdiction in which the nature of its business or the properties owned, operated or leased by it makes such qualification, licensing or good standing necessary, except where the failure to have such power or authority, or the failure to be so qualified, licensed or in good standing, would not have a Material Adverse Effect on Parent. The term "Material Adverse Effect on Parent," as used in this Agreement, means any change in or effect on the business, assets, liabilities, financial condition or results of operations of Parent or any of its subsidiaries that, individually or in the aggregate, would be materially adverse to Parent and its subsidiaries taken as a whole. Section 5.2 Authority Relative to this Agreement. Each of Parent and the ------------------------------------ Purchaser has all necessary corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Parent and the Purchaser and the consummation by Parent and the Purchaser of the transactions contemplated hereby have been duly and validly authorized and approved by the respective Boards of Directors of Parent and the Purchaser and by Fluke Networks, Inc. as sole stockholder of the Purchaser and no other corporate proceedings on the part of Parent or the Purchaser are necessary to authorize or approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by each of Parent and the Purchaser and, assuming the due and valid authorization, execution and delivery by the Company, constitutes a valid and binding obligation of each of Parent and the Purchaser enforceable against each of them in accordance with its terms. Section 5.3 No Conflict; Required Filings and Consents. ------------------------------------------ (a) Assuming (i) the filings required under the HSR Act and any domestic, foreign or supranational antitrust Laws are made and any waiting periods thereunder that suspend the right to close the transactions contemplated hereby have been terminated or have expired, (ii) the requirements of the Exchange Act and any applicable state securities, "blue sky" or takeover Law are met, and (iii) the filing of the certificate of merger and other appropriate merger documents, if any, as required by the GCL, is made, none of the execution and delivery of this Agreement by Parent or the Purchaser, the consummation by Parent or the Purchaser of the transactions contemplated hereby or compliance by Parent or the Purchaser with any of the provisions hereof will (i) conflict with or violate the organizational documents of Parent or the Purchaser, (ii) conflict with or violate in any material respect any statute, ordinance, rule, regulation, order, judgment, decree, permit or license applicable to Parent or the Purchaser, or by 31 which either of them or any of their respective properties or assets may be bound or affected, or (iii) result in a Violation pursuant to any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which Parent or the Purchaser is a party or by which Parent or the Purchaser or any of their respective properties or assets may be bound or affected, which would materially impair the ability of Parent or the Purchaser to perform its obligations under this Agreement, or prevent or materially delay the consummation of the transactions contemplated hereby. (b) None of the execution and delivery of this Agreement by Parent and the Purchaser, the consummation by Parent and the Purchaser of the transactions contemplated hereby or compliance by Parent and the Purchaser with any of the provisions hereof will require any Consent of any Governmental Entity, except for (i) compliance with any applicable requirements of the Exchange Act and any state securities "blue sky" or takeover Law, (ii) the filing of a certificate of merger pursuant to the GCL, and (iii) compliance with the HSR Act and any requirements of domestic, foreign or supranational antitrust Laws. Section 5.4 Information. None of the information supplied or to be ----------- supplied by Parent and the Purchaser in writing specifically for inclusion in (i) the Schedule 14D-9, (ii) the Proxy Statement or (iii) the Other Filings will, at the respective times filed with the SEC or such other Governmental Entity and, in addition, in the case of the Proxy Statement, at the date it or any amendment or supplement is mailed to stockholders, at the time of the Special Meeting and at the Effective Time, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. Section 5.5 Financing. Parent has possession of, or has available to it --------- under existing lines of credit, sufficient funds to consummate the transactions contemplated by this Agreement, and will cause the Purchaser to have sufficient funds available to consummate the Offer and the Merger and the transactions contemplated hereby. ARTICLE SIX COVENANTS Section 6.1 Conduct of Business of the Company. Except as required by ---------------------------------- this Agreement or otherwise with the prior written consent of Parent, during the period from May 21, 2001 to the Effective Time, the Company will, and will cause each of its subsidiaries to, conduct its operations only in the ordinary and usual course of business consistent with past practice and in compliance with all Laws and Orders, will use its commercially reasonable efforts, and will cause each of its subsidiaries to use its commercially reasonable efforts, to preserve intact the business organization of the Company and each of its subsidiaries, to keep available the services of its and their present officers and key employees, and to preserve the goodwill of those having business relationships with it, including, without limitation, maintaining satisfactory relationships with suppliers, distributors, customers, licensors and others having business relationships with the Company or any of its subsidiaries. Without limiting the generality of the foregoing, and except as otherwise required by this Agreement, the Company will not and will not permit any of its subsidiaries to, 32 prior to the Effective Time, directly or indirectly, without the prior written consent of Parent, which in the case of clauses (f), (i) and (j) will not be unreasonably withheld: (a) adopt any amendment to its certificate of incorporation or bylaws or comparable organizational documents or the Rights Agreement (other than the amendment contemplated by Section 4.25); (b) sell, pledge or encumber any stock owned by it in any of its subsidiaries, other than in connection with the sale of the Excluded Business in accordance with the terms of the Sale Agreements; (c) (i) issue, reissue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, reissuance, sale, pledge, disposal of, grant or encumbrance of, (A) any shares of capital stock of any class of the Company or any of its subsidiaries, or securities convertible into any such capital stock, or any rights, warrants or options to acquire any such convertible securities or capital stock, or any other ownership interest in the Company or any of its subsidiaries, other than the issuance of Shares (and the related Rights), in accordance with the terms of the instruments governing such issuance on the date hereof, pursuant to the exercise of the Options outstanding on the date hereof (or if a Triggering Event (as defined in the Rights Agreement) by a party other than Parent or the Purchaser shall occur, pursuant to the exercise of Rights), or (B) any other securities in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof, or (ii) alter or make any other changes in its capital structure; (d) declare, set aside or pay any dividend or other distribution (whether in cash, securities or property or any combination thereof) in respect of any class or series of its capital stock, other than between any of the Company and any of its wholly owned subsidiaries; (e) split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any shares of its capital stock, or any of its other securities; (f) increase the compensation or fringe benefits payable or to become payable to its directors, officers or employees (whether from the Company or any of its subsidiaries), or pay or award any benefit not required by any existing plan or arrangement to any officer, director or employee (including, without limitation, the granting of stock options, stock appreciation rights, shares of restricted stock or performance units pursuant to the Stock Plans or otherwise), or grant any severance or termination pay to any officer, director or other employee of the Company or any of its subsidiaries (other than as required by existing agreements or policies described in the Company Disclosure Schedule), or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any of its subsidiaries or establish, adopt, enter into, amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, savings, welfare, deferred compensation, employment, termination, severance or other employee benefit plan, agreement, trust, fund, policy or arrangement for the benefit or welfare of any directors, officers or current or former employees of the Company or its subsidiaries (any of the foregoing being an "Employee Benefit Arrangement"), except, in each 33 case, to the extent required by applicable Law or required by the existing terms of any such Employee Benefit Arrangement as in effect prior to January 1, 2001 and described in the Company Disclosure Schedule; (g) acquire, mortgage, encumber, sell, lease, license or dispose of, or pledge, encumber or permit the placement of any Lien on, any material assets (including Intellectual Property) or securities, except pursuant to existing Contracts or commitments which have been disclosed on Section 4.18(a) of the Company Disclosure Schedule or for the lease, sale or purchase of goods in the ordinary course of business consistent with past practice, or enter into any commitment or transaction outside the ordinary course of business consistent with past practice, other than the contemplated sale or other disposition of the Excluded Business in accordance with the terms hereof and transactions between a wholly owned subsidiary of the Company and the Company or another wholly owned subsidiary of the Company; (h) (i) incur, assume or pre-pay any long-term indebtedness or incur or assume any short-term indebtedness, except that the Company and its subsidiaries may incur, assume or pre-pay debt in the ordinary course of business in an amount not to exceed $100,000 in the aggregate and for purposes consistent with past practice under existing lines of credit, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, (iii) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, (iv) make any loans, advances or capital contributions to, or investments in, any other person, except for loans, advances, capital contributions or investments between any wholly owned subsidiary of the Company and the Company or another wholly owned subsidiary of the Company, (v) authorize or make capital expenditures which are in excess of $100,000 individually or $250,000 in the aggregate, (vi) accelerate or delay collection of notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, (vii) delay or accelerate payment of any account payable beyond or in advance of its due date or the date such liability would have been paid in the ordinary course of business consistent with past practice, (viii) vary its inventory practices in any material respect from its past practices, (ix) issue any debt securities, or (x) grant any security interest in any of its assets or properties, except in the ordinary course of business consistent with past practice; (i) settle or compromise any Litigation, suit or claim or threatened Litigation, suit or claim where the amount involved is greater than $100,000; (j) other than in the ordinary course of business consistent with past practice, (i) modify, amend or terminate any Contract (unless the amount involved is less than $100,000), (ii) waive, release, relinquish or assign any Contract (or any of its rights thereunder), right or claim, or (iii) cancel or forgive any indebtedness owed to the Company or any of its subsidiaries; (k) make any tax election that is not required by Law (other than elections consistent with past practice) or settle or compromise any tax liability; 34 (l) permit any insurance policy naming it as a beneficiary or a loss payable payee to be canceled or terminated, except in the ordinary course of business consistent with past practice; (m) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership, business organization, division or any other person or, except in the ordinary course of business consistent with past practice, any assets; (n) enter into any Contract other than in the ordinary course of business consistent with past practice (and in any case, only if the amount or value involved is less than $100,000, except that this $100,000 limitation shall not apply with respect to Contracts entered into by or on behalf of the Company in the ordinary course of business consistent with past practice with any of the entities set forth on Section 6.1(n) of the Company Disclosure Schedule), other than in connection with the contemplated sale or other disposition of the Excluded Business in accordance with the terms hereof; (o) except as may be required as a result of a change in Law or in GAAP, make any change in its methods of accounting, including tax accounting policies and procedures; (p) fail to comply with any Law or the rules of any self- regulatory authority, including without limitation any failure to make in a timely manner any filings with the SEC required under the Securities Act or Exchange Act or the rules and regulations promulgated thereunder; (q) unless the Company Board has made the determinations set forth in Section 6.9(a)(i) and (ii) with respect to a specific Superior Proposal in accordance with the terms of Section 6.9(a), in which case this 6.1(q) shall not apply to that specific Superior Proposal after such determination has been made, waive, release or not enforce any standstill or confidentiality provisions of any agreements with a third party; or (r) agree in writing or otherwise to take any of the foregoing actions prohibited under this Section 6.1, or take or agree to take any action which would cause any representation or warranty in this Agreement to be or become untrue or incorrect. Section 6.2 Access to Information. From the date of this Agreement until --------------------- the Effective Time, the Company will, and will cause its subsidiaries, and each of their respective officers, directors, employees, counsel, advisors and representatives (collectively, the "Company Representatives") to, give Parent and the Purchaser and their respective officers, employees, counsel, advisors and representatives (collectively, the "Parent Representatives") full access, during normal business hours, to the assets, properties, offices and other facilities and to the books and records of the Company and its subsidiaries and will cause the Company Representatives and the Company's subsidiaries to furnish Parent, the Purchaser and the Parent Representatives with such financial and operating data and such other information with respect to the business and operations of the Company and its subsidiaries as Parent and the Purchaser may from time to time reasonably request. The Company shall furnish promptly to Parent and the Purchaser a copy of each report, schedule, registration statement and other document filed by it or any of its subsidiaries during such period pursuant to the requirements of federal or state securities Laws. 35 Parent and the Purchaser agree that any information furnished pursuant to this Section 6.2 will be subject to the provisions of the letter agreement dated February 25, 1999 by and between the Parent and the Company, as amended May 22, 2001 (the "Confidentiality Agreement"). Section 6.3 Efforts. -------- (a) Subject to the terms and conditions provided herein, each of the Company, Parent and the Purchaser shall, and the Company shall cause each of its subsidiaries to, cooperate and use all reasonable efforts to make, or cause to be made, all filings necessary or proper under applicable Laws and regulations, and to take all other actions necessary or advisable to consummate and make effective the transactions contemplated by this Agreement, including but not limited to cooperation in the preparation and filing of the Offer Documents, the Schedule 14D-9 and any actions or filings related thereto, the Proxy Statement, and filings required under the HSR Act, or other foreign filings and any amendments to any thereof, and cooperation in obtaining approvals necessary from Government Entities to continue fully existing operations. In addition, if at any time prior to the Effective Time any event or circumstance relating to either the Company or Parent or the Purchaser or any of their respective subsidiaries should be discovered by the Company or Parent, as the case may be, which should be set forth in an amendment to the Offer Documents or Schedule 14D-9, the discovering party will promptly inform the other party of such event or circumstance. If at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, including the execution of additional instruments, the proper officers and directors of each party to this Agreement shall take all such necessary action. (b) Each of the parties will use its commercially reasonable efforts to obtain as promptly as practicable all Consents of any Governmental Entity or any other person required in connection with, and waivers of any Violations that may be caused by, the consummation of the transactions contemplated by the Offer and this Agreement, provided, however, that, notwithstanding any other provision of this Agreement, the Company shall not, without Parent's prior written consent, and Parent shall not be obligated to, agree to divest, hold separate or otherwise materially restrict the use or operation of any business or assets of Parent, Purchaser or the Company, which divestiture, agreement to hold separate, or other restriction would, in the good faith judgment of Parent, have a Material Adverse Effect on Parent or a Material Adverse Effect on the Company, as the case may be. (c) Without limiting the foregoing, within five business days after the date of this Agreement, the Parent will make all necessary filings and submissions under the HSR Act, and the Company will make all necessary filings and submissions under the HSR Act as soon as practicable, but no later than the date required by the HSR Act and rules promulgated thereunder. The Company and Parent agree to comply with other requests for information from the Federal Trade Commission and/or the Antitrust Division of the Department of Justice ("Antitrust Governmental Entities"), to the extent required by applicable Law. The Company and Parent agree to share equally all filing fees associated with filing of the Notification and Report Form. Except as may be restricted by applicable Law, (a) the parties hereto shall cooperate with each other with respect to the obtaining of information needed for the preparation of the Notification and Report Forms required to be filed pursuant to the HSR Act by the Company and Parent in 36 connection with the transactions contemplated hereby, and (b) the parties shall use their reasonable efforts and shall cooperate in responding to any written or oral requests from Antitrust Governmental Entities for additional information or documentary evidence, and (c) the parties shall cooperate and shall provide notice and opportunity to consult regarding all meetings with Antitrust Governmental Entities, whether in person or telephonic, and regarding all written communications with Antitrust Governmental Entities, in connection with the transactions contemplated hereby. Company and the Parent will also cooperate to make as soon as practicable all necessary filings and submissions required by the antitrust or competition laws of any other jurisdiction. (d) The Company shall give Parent the opportunity to participate in the defense of any Litigation against the Company, any of its subsidiaries and/or any of the Company's directors relating to any of the transactions contemplated by this Agreement. In the event that a claim is asserted against any of the parties hereto or any of their respective affiliates, relating to, based in whole or in part on events or conditions occurring or existing in connection with, or arising out of, any of the transactions contemplated by this Agreement, each of the parties hereto agrees to fully cooperate with the other parties hereto in the defense of any such claim at the expense of the party against whom such claim is asserted. Section 6.4 Public Announcements. During the term of this Agreement, the -------------------- parties hereto shall use their commercially reasonable efforts to consult promptly with each other prior to issuing any press release or otherwise making any public statement with respect to the Offer, the Merger and the other transactions contemplated hereby, provide to the other party for review a copy of any such press release or statement, and not issue any such press release or make any such public statement prior to such consultation and review, unless required by applicable Law or any listing agreement with a securities exchange. Section 6.5 Employee Benefit Arrangements. ----------------------------- (a) Parent agrees that the Company will honor, and, from and after the Effective Time, Parent will cause the Surviving Corporation to honor, in accordance with their respective terms as in effect on the date hereof, the employment, severance and bonus agreements and arrangements to which the Company is a party which are set forth on Section 6.5 of the Company Disclosure Schedule covering current and former directors, officers and employees, subject to any amendment or termination that may be permitted by the terms thereof. Nothing in this Agreement is intended to require Parent, the Surviving Corporation, or the Company to maintain any particular benefit or compensation plan, program, or arrangement, to require any of the foregoing to retain any person in employment, or to change such person's status from "at-will" (except as an employment agreement may otherwise provide). The provisions of Section 6.5 apply exclusively to employees of the Company at its U.S. operations. (b) Parent agrees that (i) for the period ending December 31, 2001 the Surviving Corporation shall continue the compensation and employee benefit and welfare plans and programs of the Company, other than those providing equity- based compensation, to the extent practicable as in effect on the date hereof, and (ii) thereafter the Surviving Corporation shall provide employees of the Company and its subsidiaries as a whole (A) compensation (including 37 bonus and incentive awards) programs and plans and (B) employee benefit and welfare plans, programs, contracts, agreements and policies (including insurance and pension plans), fringe benefits and vacation policies which are substantially the same as or not less favorable in the aggregate to such employees than those generally in effect with respect to similarly situated employees of Parent or, at Parent's election, those in effect before the Effective Time at the Company, after giving effect to any regional differences. Notwithstanding the forgoing, in no event shall severance benefits available to employees of the Company or its subsidiaries through the first anniversary of the Effective Time be less favorable than the severance benefits in effect as of the date of this Agreement, as set forth on Section 6.5 of the Company Disclosure Schedule. (c) For all purposes under the employee benefit plans of Parent and its affiliates providing benefits to each employee of the Company (a "Company Employee") after the Effective Time, each Company Employee shall be credited with his or her years of service with the Company and its affiliates before the Effective Time, to the same extent as such Company Employee was entitled, before the Effective Time, to credit for such service for purposes of vesting, and eligibility under any similar Plans, except to the extent such credit would result in a duplication of benefits and except for purposes of accrual of benefits under defined benefit pension plans. In addition, and without limiting the generality of the foregoing: (i) each Company Employee shall be immediately eligible to participate, without any waiting time, in any and all employee benefit plans sponsored by Parent and its affiliates for the benefit of Company Employees (such plans, collectively, the "New Plans") to the extent coverage under such New Plan replaces coverage under a comparable Plan in which such Company Employee participated immediately before the Effective Time (such plans, collectively, the "Old Plan"); and (ii) for purposes of each New Plan providing medical, dental, pharmaceutical and/or vision benefits to any Company Employee, Parent shall cause all pre-existing condition exclusions of such New Plan to be waived for such employee and his or her covered dependents to the extent not currently applicable to such persons. Section 6.6 Indemnification. ---------------- (a) The certificate of incorporation and the bylaws of the Surviving Corporation shall contain provisions with respect to indemnification and exculpation from liability that are no less favorable than those provisions set forth in the Company's certificate of incorporation and bylaws on the date of this Agreement, and these provisions in the certificate of incorporation and bylaws of the Surviving Corporation shall not be amended, repealed or otherwise modified for a period of six years from the Effective Time in any manner that would adversely affect the rights thereunder of individuals who on or prior to the Effective Time were directors, officers, employees or agents of the Company (the "Indemnified Parties"), unless such amendment, repeal or modification is required by Law. Parent shall, during such period, guarantee the obligations of the Surviving Corporation with respect to the indemnification provisions contained in the Surviving Corporation's certificate of incorporation and bylaws. (b) Parent and the Surviving Corporation shall, from the Effective Time until the fourth anniversary of the Effective Time or such earlier date as may be mutually agreed upon by Parent, the Surviving Corporation, and the applicable Indemnified Party, cause to be maintained in effect, to the extent available, the policies of directors' and officers' liability 38 insurance maintained by the Company and its subsidiaries as of the date hereof (or other arrangements (including self-insurance) or policies that provide at least the same coverage and amounts on terms that are not less advantageous to the insured parties), true and complete copies of which have been delivered to Parent, with respect to claims arising from facts or events that occurred on or prior to the Effective Time. In lieu of the purchase of such insurance or adoption of such other arrangements, self-insurance or other policies by Parent or the Surviving Corporation, the Surviving Corporation may purchase a three-year extended reporting period endorsement ("reporting tail coverage") under the Company's directors' and liability insurance coverage. In no event shall Parent or the Surviving Corporation be obligated to expend in order to maintain or procure insurance coverage pursuant to this paragraph (b) any amount per year in excess of 150% of the aggregate premiums paid by the Company and its subsidiaries in the fiscal year ending December 31, 2000 for directors' and officers' liability insurance, which amount has been disclosed to Parent. (c) In the event Parent, the Surviving Corporation or any of their successors or assigns (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any person, then and in each such case, proper provisions shall be made so that the successors and assigns of Parent or the Surviving Corporation, as the case may be, shall assume the obligations set forth in this Section 6.6. (d) This Section 6.6 shall survive the consummation of the Merger at the Effective Time, is intended to benefit the Indemnified Parties and their respective heirs, executors and personal representatives, and shall be binding on all successors and assigns of the Company, Parent and the Surviving Corporation. This Section 6.6 shall not limit or otherwise adversely affect any rights any Indemnified Party may have under any agreement with the Company or any of its subsidiaries or the Company's or any such subsidiary's certificate of incorporation or bylaws. Section 6.7 Notification of Certain Matters. Parent and the Company ------------------------------- shall promptly notify each other of (a) any circumstance or the occurrence or non-occurrence of any fact or event which would be reasonably likely (i) to cause any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect at any time from the date hereof to the Effective Time, (ii) to cause any covenant, condition or agreement under this Agreement not to be complied with or satisfied, or (iii) to result in a Material Adverse Effect on the Company, and (b) any failure of the Company, Parent or Purchaser, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that no such notification shall affect the representations or warranties of any party, the conditions to the obligations of any party hereunder, or the remedies of any party whether under applicable Law or hereunder. Each of the Company, Parent and the Purchaser shall give prompt notice to the other parties hereof of any notice or other communication from any third party alleging that the Consent of such third party is or may be required in connection with the transactions contemplated by this Agreement. Section 6.8 State Takeover Laws. Without limiting the foregoing, the ------------------- Company and the Company Board shall (i) take all actions necessary to ensure that no "fair price," "control share acquisition," "moratorium" or other anti-takeover statute, or similar Law, is or becomes applicable 39 to this Agreement or any of the transactions contemplated hereby, and (ii) if any such statute or Law is or becomes applicable to this Agreement or any of the transactions contemplated hereby, take all actions necessary to ensure that the transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated hereby and otherwise to minimize the effect of such statute or Law on the transactions contemplated hereby. Section 6.9 No Solicitation. --------------- (a) The Company shall, and shall direct its subsidiaries and other affiliates and their respective officers, directors, employees, representatives and agents to, immediately cease any existing discussions or negotiations, if any, with any parties conducted heretofore with respect to any Acquisition Transaction (as hereinafter defined). The Company agrees that, prior to the Effective Time, it shall not, and shall not authorize or permit any of its subsidiaries or any of its or its subsidiaries' directors, officers, employees, agents or representatives, directly or indirectly, to solicit, initiate or encourage, or furnish or disclose non-public information in furtherance of, any inquiries or the making of any proposal with respect to any merger, liquidation, recapitalization, consolidation or other business combination involving the Company or its subsidiaries or acquisition of any capital stock or any material portion of the assets of the Company or its subsidiaries, or any combination of the foregoing (other than the Offer, the Merger and the sale or other disposition of the Excluded Business, or the shut-down of the NAS Business (excluding the Excluded Business), in each case in accordance with the terms hereof) (an "Acquisition Transaction"), or negotiate, explore or otherwise engage in substantive discussions with any person (other than the Purchaser, Parent or their respective directors, officers, employees, agents and representatives) with respect to any Acquisition Transaction or enter into any agreement, arrangement or understanding requiring it to abandon, terminate or fail to consummate the Merger or any other transactions contemplated by this Agreement; provided that the Company may, prior to the purchase of Shares pursuant to the Offer, furnish information to, and negotiate or otherwise engage in substantive discussions with, any person who delivers a bona fide, written proposal for an Acquisition Transaction if the Company Board determines in good faith by a majority vote, after consultation with its outside legal counsel and Financial Advisor or another nationally recognized investment banking firm, that (i) such a transaction is reasonably likely to result in a transaction that is superior in comparison to the Offer and the Merger and the terms of this Agreement to the Company's stockholders from a financial point of view and to the Company, taking into account the terms and conditions thereof, the likelihood of consummation and the time required to complete such transaction (a "Superior Proposal"), and (ii) failing to take such action would result in a breach of the fiduciary duties of the Company Board under applicable Law, and prior to furnishing non-public information to any such party, the Company shall have entered into a confidentiality agreement containing terms at least as favorable to the Company as those of the Confidentiality Agreement (provided that such confidentiality agreement need not contain any standstill provisions). The term "Acquisition Transaction" shall exclude the acquisition by any person, in any single transaction or series of related transactions, of an aggregate number of Shares which, immediately following such acquisition, will represent no more than 5% of the issued and outstanding Shares (or securities convertible or exchangeable into, or exercisable for Shares, whether upon the passage of time or otherwise), to the extent such acquisition is not made for the purpose of, or as part of a plan for, acquiring control of the Company and does not involve disclosure of material, non-public information to the prospective acquiror or purchaser. 40 (b) From and after the execution of this Agreement, the Company shall promptly (and in any event no later than 12 hours after receipt of any inquiry, proposal or other materials relating to an Acquisition Transaction) (A) advise the Purchaser in writing of the receipt, directly or indirectly, of any such inquiry, proposal or other materials, and of any discussions, negotiations or proposals relating to an Acquisition Transaction (including without limitation a Superior Proposal), (B) identify the offeror, and (C) provide Parent or Purchaser copies of all material proposed written agreements, arrangements, or understandings, including the forms of any material agreements supplied by third parties, and all applicable financial statements and evidence of any planned financing with respect to such Acquisition Transaction (and a description of all material oral agreements with respect thereto). The Company shall promptly advise Parent of all material developments relating to such proposal, including the results of any discussions or negotiations with respect thereto. Section 6.10 FIRPTA Certificate. ------------------ Prior to the Expiration Date, the Company shall provide to Parent and Purchaser (i) a properly executed certificate for purposes of satisfying the obligations of Parent and Purchaser under Treasury Regulation Section 1.1445-2(c)(3), and (ii) a form of notice to the Internal Revenue Service in accordance with the requirements of Treasury Regulation Section 1.897-2(h)(2), along with written authorization for Parent to deliver such notice form to the Internal Revenue Service on behalf of the Company. Section 6.11 Rights Agreement. ---------------- The Company covenants and agrees that it will not (i) redeem the Rights, (ii) amend the Rights Agreement or (iii) take any action which would allow any Person (as defined in the Rights Agreement) other than Parent or the Purchaser to acquire beneficial ownership of 15% or more of the Common Shares without causing a Distribution Date or a Triggering Event (as each such term is defined in the Rights Agreement) to occur, unless this Agreement has been terminated in accordance with its terms. The Company Board shall not make a determination that Parent, the Purchaser or any of their respective Affiliates or Associates is an "Acquiring Person" for purposes of the Rights Agreement in respect of the transactions contemplated by this Agreement. Section 6.12 Parent Agreement Concerning Purchaser. ------------------------------------- Parent agrees to cause the Purchaser to comply with its obligations under this Agreement. Section 6.13 Sale or Disposition of Excluded Business. ---------------------------------------- The Company represents that the Asset Purchase Agreement by and between Microtest, Inc. and xStore, Inc. dated June 11, 2001, the Contract for sale and transfer of shares and part shares by and among Logicraft Information Systems, Inc., Dr. Klaus Romanek, Michael Etscheid, Volkmar Brauckhoff, Jens Diedrich, Annegret Elligsen and Ralf in der Beek dated June 11, 2001, and the Agreement between Microtest, Inc., Microtest Europe Limited, Microtest GmbH, Logicraft Information Systems, Inc. and H + H Zentrum fur Rechnerkommunikation GmbH dated June 11, 2001 (the "Sale Agreements") are the only agreements entered into by or on behalf of the Company in connection with the sale of all or any portion of the Company"s Network Appliances 41 and Storage (NAS) business (the "NAS Business"), and that the Sale Agreements have been duly authorized, executed and entered into by the Company and, to the knowledge of the Company, by the other parties thereto, and are in full force and effect as of the date hereof. The Company shall not amend or modify or waive any rights under any of the Sale Agreements, or take any actions with respect to such transactions (unless expressly required by the terms of the applicable Sale Agreement), without the prior written consent of Parent. The stock, assets and liabilities which are the subject of the Sale Agreements are referred to collectively as the "Excluded Business." The parties hereto agree that the NAS Business will be shut down immediately following the execution of this Agreement. ARTICLE SEVEN CONDITIONS TO CONSUMMATION OF THE MERGER Section 7.1 Conditions Applicable to All Parties. The respective ------------------------------------ obligations of Parent, the Purchaser and the Company to consummate the Merger are subject to the satisfaction, at or before the Effective Time, of each of the following conditions: (a) Stockholder Approval. The stockholders of the Company shall have duly approved the transactions contemplated by this Agreement in accordance with the procedures set forth in the Company's certificate of incorporation and bylaws, if required by applicable Law or by the rules and regulations of the Nasdaq National Market. (b) Purchase of Shares. The Purchaser shall have accepted for payment and paid for Shares in an amount sufficient to meet the Minimum Condition and otherwise pursuant to the Offer in accordance with the terms hereof; provided, that this condition shall be deemed satisfied with respect to the Merger if the Purchaser fails to accept for payment or pay for the Shares pursuant to the Offer in violation of the terms of the Offer or of this Agreement. (c) Injunctions; Illegality. The consummation of the Merger shall not be restrained, enjoined or prohibited by any order, judgment, decree, injunction or ruling of a court of competent jurisdiction or any Governmental Entity and there shall not have been any statute, rule or regulation enacted, promulgated or deemed applicable to the Merger by any Governmental Entity which prevents the consummation of the Merger or has the effect of making the acquisition of Shares in the Merger illegal. (d) Regulatory Approval. Any waiting period (and any extension thereof) under the HSR Act or under any material applicable domestic or foreign statutes or regulations that suspends the right to close the transactions contemplated hereby and that is applicable to the Merger shall have expired or terminated. ARTICLE EIGHT TERMINATION; AMENDMENTS; WAIVER Section 8.1 Termination. This Agreement may be terminated and the Merger ----------- contemplated hereby may be abandoned at any time prior to the Effective Time, notwithstanding 42 approval thereof by the stockholders of the Company (with any termination by Parent also being an effective termination by the Purchaser): (a) by the mutual written consent of Parent and the Company, by action of their respective Boards of Directors; (b) by Parent or the Company if Purchaser shall not have accepted for payment and paid for the Shares pursuant to the Offer in accordance with the terms hereof and thereof on or prior to September 30, 2001; provided, however, that a party may not terminate this Agreement pursuant to this Section 8.1(b) if such failure to accept for payment and pay for the Shares is due to such party's material breach of this Agreement; (c) by Parent or the Company if (1) the Offer is terminated or withdrawn pursuant to its terms and the terms of this Agreement without any Shares being purchased thereunder, or (2) the Merger shall not have been consummated on or before November 30, 2001; provided, however, that a party may not terminate this Agreement pursuant to this Section 8.1(c) if such party shall have materially breached this Agreement; (d) by Parent or the Company if any court of competent jurisdiction or other Governmental Entity shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the acceptance for payment of, or payment for, Shares pursuant to the Offer or the Merger and such order, decree or ruling or other action shall have become final and nonappealable, provided that the party seeking to terminate this Agreement shall have used its commercially reasonable efforts to remove or lift such order, decree or ruling; (e) by the Company or Parent if, prior to the purchase of Shares pursuant to the Offer, the Company Board shall have determined to recommend a Superior Proposal to its stockholders and/or to enter into a Contract concerning such Superior Proposal after making the determination required by Section 6.9(a); provided that the Company may not exercise its right to terminate under this Section 8.1(e) (and may not enter into a Contract with respect to any Superior Proposal) unless and until (i) the Company shall have provided the Purchaser and Parent written notice at least five business days prior to such termination that the Company Board has authorized and intends to effect the termination of this Agreement pursuant to this Section 8.1(e), including copies of all proposed Contracts, including the forms of any agreements supplied by third parties, and all applicable financial statements and evidence of any planned financing with respect to such Superior Proposal (and a description of all material oral agreements with respect thereto), (ii) the Company Board shall have determined, in good faith and after consultation with its outside legal counsel and the Financial Advisor or another nationally recognized investment banking firm, that, at the time of its determination to terminate this Agreement and at the end of the five-business day period referred to in clause (i) above, (A) the foregoing Acquisition Transaction constitutes a Superior Proposal, and (B) failing to take such action would result in a breach of the fiduciary duties of the Company Board under applicable Law, (iii) the Company shall otherwise be in compliance with its obligations under Section 1.2, Section 6.9 and Section 6.11 hereof in all material respects, and (iv) (A) within one business day of termination by Parent, or (B) prior to 43 such termination in the case of termination by the Company, the Company shall have paid to Parent the Termination Fee and the Expense Fee described in Section 8.3(b); (f) by Parent prior to the purchase of Shares pursuant to the Offer, if the Company Board (or, with respect to (iii) below, the Company) (i) shall have withheld, withdrawn or modified (including by amendment of the Schedule 14D-9) in any manner adverse to the Purchaser or Parent its approval or recommendation of the Offer, this Agreement or the Merger, (ii) shall have approved or recommended an Acquisition Transaction, (iii) shall have breached Section 6.9 in any material respect or Section 6.11 (provided that, to the extent a breach of Section 6.9(b)(C) is cured within 72 hours after such breach, such breach shall not be considered a breach of Section 6.9), or (iv) shall have resolved to effect any of the foregoing; (g) by Parent prior to the purchase of Shares pursuant to the Offer if the Minimum Condition (as defined in Annex I) shall not have been satisfied by the then current Expiration Date of the Offer and on or prior to such Expiration Date an Acquisition Transaction shall have been publicly announced or disclosed; (h) by the Company, upon a material breach by Parent or Purchaser of any material covenant or agreement set forth in this Agreement, or upon the failure of any representation or warranty of Parent or Purchaser set forth in this Agreement to be true and correct as if such representation or warranty were made at the time of such determination (except as to any such representation or warranty which speaks as of a specific date, which must be untrue or incorrect as of such specific date); provided that to the extent that the representation or warranty is not qualified by Material Adverse Effect or any other materiality qualifier, no failure shall be deemed to have occurred so long as such failure, taken together with all other such failures, does not have a Material Adverse Effect on Parent, and; provided further, that no breach or failure shall be deemed to have occurred for purposes of this Section 8.1(h) so long as such breach or failure is satisfied or cured within 20 days after the Company notifies Parent of such breach or failure; or (i) by Parent, upon a material breach by the Company of any material covenant or agreement set forth in this Agreement, or upon the failure of any representation or warranty of the Company set forth in this Agreement to be true and correct as if such representation or warranty were made at the time of such determination (except as to any such representation or warranty which speaks as of a specific date, which must be untrue or incorrect as of such specific date); provided that to the extent that the representation or warranty is not qualified by Material Adverse Effect or any other materiality qualifier, no failure shall be deemed to have occurred so long as such failure, taken together with all other such failures, does not have a Material Adverse Effect on the Company, and; provided further, that no breach or failure shall be deemed to have occurred for purposes of this Section 8.1(i) so long as such breach or failure is satisfied or cured within 20 days after Parent or Purchaser notifies the Company of such breach or failure. Section 8.2 Effect of Termination. In the event of the termination of this --------------------- Agreement pursuant to Section 8.1, this Agreement shall forthwith become void and have no effect, without any liability on the part of any party or its directors, officers or stockholders, other than the provisions of the last sentence of Section 6.2 and the provisions of this Section 8.2 and Section 44 8.3, which shall survive any such termination; provided, that nothing contained in this Section 8.2 shall relieve any party from liability for any material breach of this Agreement. Section 8.3 Fees and Expenses. ----------------- (a) Whether or not the Merger is consummated, except as otherwise specifically provided herein, all costs and expenses incurred in connection with the Offer, this Agreement and the transactions contemplated by this Agreement shall be paid by the party incurring such costs and expenses. (b) In the event that this Agreement is terminated pursuant to Section 8.1(e) or Section 8.1(f), or is terminated by the Company pursuant to Section 8.1(b) or Section 8.1(c) at a time when Parent could terminate pursuant to Section 8.1(f), then the Company shall promptly (and in any event within one business day after such termination or, in the case of any such termination by the Company, prior to such termination) pay Parent an amount equal to (i) a termination fee of Two Million Five Hundred Thousand United States Dollars (US$2,500,000) (the "Termination Fee"), provided that in no event shall more than one Termination Fee be payable by the Company, plus (ii) Parent's aggregate Expenses not exceeding Four Hundred Thousand United States Dollars (US$400,000) (the "Expense Fee"). Parent's "Expenses" shall mean all documented out-of-pocket fees and expenses incurred or paid by or on behalf of Parent or Purchaser in connection with or in contemplation of the Merger or the consummation of any of the transactions contemplated by this Agreement, including all fees and expenses of counsel, investment banking firms, accountants, experts and consultants to Parent and/or Purchaser. (c) In the event that this Agreement is terminated pursuant to Section 8.1(g) and within 12 months of the date of termination of this Agreement a transaction constituting an Acquisition Transaction is consummated, the Company shall, prior to or simultaneously with the consummation of such transaction, pay Parent the Termination Fee and the Expense Fee; provided, however, that in no event shall the Company be obligated to pay more than one Termination Fee and Expense Fee pursuant to this Section 8.3. When used in this Section 8.3(c), the term "Acquisition Transaction" shall exclude (1) the acquisition by any person, in any single transaction or series of related transactions, of an aggregate number of Shares which, immediately following such acquisition, will represent no more than 20% of the issued and outstanding Shares (or securities convertible or exchangeable into, or exercisable for Shares, whether upon the passage of time or otherwise), to the extent such acquisition is not made for the purpose of, or as part of a plan for, acquiring control of the Company, and (2) the acquisition by the Company or any of its subsidiaries, in a merger, asset purchase, stock purchase or similar transaction, of any third party or business, provided that in the event that any portion of the consideration paid for the acquisition of such third party or business is in the form of capital stock or other securities, the 20% ownership limit set forth in the foregoing clause (1) is satisfied. (d) The prevailing party in any legal action undertaken to enforce this Agreement or any provision hereof shall be entitled to recover from the other party the costs and expenses (including attorneys' and expert witness fees) incurred in connection with such action. 45 Section 8.4 Amendment. Subject to Section 1.3(c), this Agreement may be --------- amended by the Company, Parent and the Purchaser at any time before or after any approval of this Agreement by the stockholders of the Company but, after any such approval, no amendment shall be made which decreases the Merger Price or which adversely affects the rights of the Company's stockholders hereunder, in each case without the approval of such stockholders. This Agreement may not be amended except by an instrument in writing signed on behalf of all the parties. Section 8.5 Extension; Waiver. Subject to Section 1.3(c), at any time ----------------- prior to the Effective Time, Parent and the Purchaser, on the one hand, and the Company, on the other hand, may (i) extend the time for the performance of any of the obligations or other acts of the other, (ii) waive any inaccuracies in the representations and warranties contained herein of the other or in any document, certificate or writing delivered pursuant hereto by the other or (iii) waive compliance by the other with any of the agreements or conditions. Any agreement on the part of any party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. ARTICLE NINE MISCELLANEOUS Section 9.1 Representations, Warranties and Covenants. The ----------------------------------------- representations, warranties, covenants and agreements of each party hereto will remain operative and in full force and effect regardless of any investigation made by or on behalf of any other party hereto, any person controlling any such party or any of their officers, directors, representatives or agents whether prior to or after the execution of this Agreement. The representations and warranties in this Agreement will terminate at the Effective Time; provided, however, that nothing herein shall limit or affect any covenant or agreement that by its terms contemplates performance in part or in whole after the Effective Time. Section 9.2 Entire Agreement; Assignment. ---------------------------- (a) This Agreement (including without limitation the Confidentiality Agreement and the other documents and the instruments referred to herein) constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and thereof. (b) Neither this Agreement nor any of the rights, interests or obligations hereunder will be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other party (except that Parent may assign its rights and the Purchaser may assign its rights, interest and obligations to any direct or indirect subsidiary of Parent without the consent of the Company), provided that no such assignment shall relieve Parent of any liability for any breach of such assignee. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. 46 Section 9.3 Validity. The invalidity or unenforceability of any provision -------- of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, each of which shall remain in full force and effect. Section 9.4 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 or facsimile to the respective parties as follows: If to Parent or the Purchaser: Danaher Corporation 2099 Pennsylvania Avenue, NW Washington, D.C. 20006-1813 Attention: Vice President -- Corporate Development Facsimile: (202) 828-0860 with a copy to: Wilmer, Cutler & Pickering 2445 M Street, NW Washington, D.C. 20037-1420 Attention: Mark A. Dewire, Esq. Facsimile: (202) 663-6363 If to the Company: Microtest, Inc. 4747 North 22nd Street Phoenix, Arizona 85016 Attention: Chief Executive Officer Facsimile: with a copy to: Snell & Wilmer, L.L.P. One Arizona Center 400 East Van Buren Phoenix, Arizona 85004-2202 Attention: Steven D. Pidgeon, Esq. Facsimile: (602) 382-6070 or to such other address as the person to whom notice is given may have previously furnished to the other in writing in the manner set forth above; provided that notice of any change of address shall be effective only upon receipt thereof. 47 Section 9.5 Governing Law; Jurisdiction. This Agreement and the rights and --------------------------- duties of the parties hereunder shall be governed by, and construed in accordance with, the Law of the State of Delaware, regardless of the Laws that might otherwise govern under applicable principles of conflicts of laws thereof. Each of the parties hereto, (a) consents to submit itself to the personal jurisdiction of any Delaware State Court or any Federal court of the United States of America sitting in Delaware, and any appellate court from any thereof, in the event any dispute arises out of this Agreement or any transaction contemplated hereby, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it will not bring any action relating to this Agreement or any transaction contemplated hereby in any court other than a Delaware State Court or Federal court of the United States of America sitting in Delaware, or an appellate court from any thereof, and (d) waives any right to trial by jury with respect to any action related to or arising out of this Agreement or any transaction contemplated hereby. Section 9.6 Counterparts. This Agreement may be executed in two or more ------------ counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. Section 9.7 Parties in Interest Except with respect to Section 6.6 (which ------------------- is intended to be for the benefit of the persons identified therein and may be enforced by such persons), this Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement. Section 9.8 Certain Definitions. As used in this Agreement: ------------------- (a) the term "affiliate", as applied to any person, shall mean any other person directly or indirectly controlling, controlled by, or under common control with, that person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as applied to any person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that person, whether through the ownership of voting securities, by contract or otherwise. (b) the term "business day" means any day on which the principal offices of the SEC in Washington, D.C. are open to accept filings; or, in the case of determining a date when any payment is due, any day other than a Saturday, Sunday or Federal holiday. (c) the term "Contract" means any contract, plan, undertaking, arrangement, understanding, agreement, agreement in principle, franchise, permit, instrument, license, lease, note, mortgage or other binding commitment, whether written or oral. (d) the term "Court" means any court or arbitration tribunal of the United States, any domestic state, or any foreign country, and any political subdivision or agency thereof. 48 (e) the term "Fully Diluted Basis" means, as of any given time, the number of Common Shares then outstanding, plus all Common Shares issuable upon the conversion of all then outstanding convertible securities or upon the exercise of all then outstanding options, warrants (including, without limitation, the Options described on Section 4.2(c) of the Company Disclosure Schedule) and rights. (f) "indebtedness" shall mean, with respect to any person, without duplication, (a) all obligations of such person for borrowed money, or with respect to deposits or advances of any kind to such person, (b) all obligations of such person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such person upon which interest charges are customarily paid, (d) all obligations of such person under conditional sale or other title retention agreements relating to property purchased by such person, (e) all obligations of such person issued or assumed as the deferred purchase price of property or services (excluding obligations of such person to creditors for raw materials, inventory, services and supplies incurred in the ordinary course of such person's business), (f) all capitalized lease obligations of such person, (g) all obligations of others secured by any Lien on property or assets owned or acquired by such person, whether or not the obligations secured thereby have been assumed, (h) all obligations of such person under interest rate or currency swap transactions (valued at the termination value thereof), (i) all letters of credit issued for the account of such person, (j) all obligations of such person to purchase securities (or other property) which arises out of or in connection with the sale of the same or substantially similar securities or property, and (k) all guarantees and arrangements having the economic effect of a guarantee by such person of any indebtedness of any other person. (g) the term "knowledge" means (a) in the case an individual, knowledge of a particular fact or other matter if (i) such individual is actually aware of such fact or other matter, or (ii) a prudent individual could be expected to discover or otherwise become aware of such fact or other matter in the course of conducting a reasonable investigation concerning the existence of such fact or other matter, and (b) in the case of a person (as defined herein, other than an individual) such person will be deemed to have "knowledge" of a particular fact or other matter if any individual who is serving, or has at any time served, as a director, officer, partner, member, manager, executor, or trustee of such person (or in any similar capacity) has, or at any time had, knowledge (as contemplated by clause (i) above) of such fact or other matter. (h) the term "Law" means all laws, orders, judgments, rules, codes, requirements, variances, decrees, ordinances and regulations of any Governmental Entity, including all decisions of Courts having the effect of law in each such jurisdiction. (i) the term "Lien" means any mortgage, deed of trust, security interest, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), or other security agreement, option, warrant, attachment, right of first refusal, preemptive, put, call or other claim or right, restriction on transfer (other than restrictions imposed by federal and state securities Laws) or preferential arrangement of any kind or nature whatsoever (including any restriction on the transfer of any assets, any conditional sale or other title retention agreement, any financing lease involving substantially the same economic effect as any of the foregoing and the filing of any financing statement under the Uniform Commercial Code or comparable Law of any jurisdiction). 49 (j) the term "Litigation" means any claim, suit, action, arbitration, cause of action, claim, complaint, criminal prosecution, investigation, demand letter, or proceeding, whether at law or at equity, before or by any Court or Governmental Entity, any arbitrator or other tribunal. (k) the term "Order" means any judgment, order, writ, injunction, ruling or decree of, or any settlement under the jurisdiction of, any Court or Governmental Entity. (l) the term "person" means an individual (or such individual's estate), corporation, limited liability company, partnership, association, joint venture, trust, Governmental Entity or any other organization, entity or group (as defined in Section 13(d)(3) of the Exchange Act); (m) the term "subsidiary" or "subsidiaries" means, with respect to Parent, the Company or any other person, any corporation, partnership, joint venture or other legal entity of which Parent, the Company or such other person, as the case may be (either alone or through or together with any other subsidiary), owns, directly or indirectly, stock or other equity interests the holders of which are generally entitled to more than 50% of the vote for the election of the board of directors or other governing body of such corporation or other legal entity. Section 9.9 Specific Performance. The parties hereto agree that -------------------- irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. Section 9.10 Interpretation. The defined terms used herein shall apply -------------- equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. All references herein to Articles, Sections and Exhibits shall be deemed to be references to Articles and Sections of, and Exhibits to, this Agreement unless the context shall otherwise require. All Disclosure Schedules, Exhibits and Annexes attached hereto shall be deemed incorporated herein as if set forth in full herein and, unless otherwise defined therein, all terms used in any Exhibit or Annex shall have the meaning ascribed to such term in this Agreement. The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation." All accounting terms not defined in this Agreement shall have the meanings determined by GAAP. Whenever any payment hereunder is to be paid in "cash," payment shall be made in the legal tender of the United States and the method for payment shall be by wire transfer of immediately available funds. The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise expressly provided herein, any Contract, instrument 50 or statute defined or referred to herein or in any Contract or instrument that is referred to herein means such Contract, instrument or statute as from time to time amended, modified or supplemented, including (in the case of Contracts or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. This Agreement shall be deemed to have been drafted by each party hereto and this Agreement shall not be construed against any party as a principal draftsperson. Unless otherwise expressly provided, wherever the consent of any person is required or permitted herein, such consent may withheld in such person's sole discretion. Section 9.11 Disclosure Schedules. The Company Disclosure Schedule shall -------------------- be divided into sections corresponding to the sections and subsections of this Agreement. Disclosure of any fact or item in any section or subsection of the Company Disclosure Schedule shall not, should the existence of the fact or item or its contents be relevant to any other Section of the Company Disclosure Schedule, be deemed to be disclosed with respect to such other section or subsection. 51 IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on its behalf by its respective officer thereunto duly authorized, all as of the day and year first above written. DANAHER CORPORATION By: /s/ Daniel L. Comas ----------------------------------------------- Name: Daniel L. Comas Title: Vice President -- Corporate Development PHOENIX ACQUISITION CORP. By: /s/ Daniel L. Comas ----------------------------------------------- Name: Daniel L. Comas Title: Vice President MICROTEST, INC. By: Vincent C. Hren ----------------------------------------------- Name: Vincent C. Hren Title: President and Chief Executive Officer 52 ANNEX I Conditions to the Offer. Notwithstanding any other provisions of the ----------------------- Offer, the Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange Act, pay for any tendered Shares and may, subject to Article 1 of the Merger Agreement, terminate or, subject to Article 8 of the Merger Agreement, amend, the Offer and/or delay the acceptance of Shares for payment, if (i) there shall not be validly tendered and not properly withdrawn prior to the Expiration Date for the Offer that number of Shares which, when added to any Shares already owned by Parent or any of its subsidiaries, represents at least a majority of the total number of Common Shares on a Fully Diluted Basis on the date of purchase (not taking into account the Rights) (the "Minimum Condition"), (ii) any applicable waiting period or approval under the HSR Act or any applicable domestic or foreign statutes or regulations that suspends the right to close the transactions contemplated by the Merger Agreement shall not have expired or been terminated or obtained, (iii) any Consent from any person or Governmental Entity shall not have been obtained on or prior to the Expiration Date (except for those the failure of which to be obtained would not reasonably be expected to have a Material Adverse Effect on the Company), or (iv) at any time on or after the date of the Merger Agreement and on or prior to the Expiration Date, any of the following events (each, an "Event") shall occur: (a) there shall be any action taken, or any statute, rule, regulation, legislation, interpretation, judgment, order or injunction enacted, enforced, promulgated, amended, issued or deemed applicable to the Offer or the Merger, by any legislative body, court, government or governmental, administrative or regulatory authority or agency or any other Governmental Entity, domestic or foreign, other than the application of the waiting period provisions of the HSR Act to the Offer or to the Merger, that would reasonably be expected to, directly or indirectly: (i) make illegal or otherwise prohibit consummation of the Offer or the Merger, (ii) prohibit or materially limit the ownership or operation by Parent or the Purchaser of all or any material portion of the business or assets of the Company or any of its subsidiaries taken as a whole or compel Parent or the Purchaser to dispose of or hold separately all or any material portion of the business or assets of Parent or the Purchaser or the Company or any of its subsidiaries taken as a whole, or seek to impose any material limitation on the ability of Parent or the Purchaser to conduct its business or own such assets, in any such case under this clause (ii), which would reasonably be expected to have a Material Adverse Effect on Parent or a Material Adverse Effect on the Company, as the case may be, (iii) impose material limitations on the ability of Parent or the Purchaser effectively to acquire, hold or exercise full rights of ownership of the Shares, including, without limitation, the right to vote any Shares acquired or owned by the Purchaser or Parent on all matters properly presented to the Company's stockholders, or (iv) require divestiture by Parent or the Purchaser of any Shares; or (b) there shall be instituted or pending any action or proceeding by any Governmental Entity seeking, or that would reasonably be expected to result in, any of the consequences referred to in clauses (i) through (iv) of paragraph (a) above or by any third party for which there is a substantial likelihood of resulting in any of the consequences referred to in clauses (i) through (iv) of paragraph (a) above; or 53 (c) any event or change shall have occurred in the business, assets, liabilities, financial condition or results of operations of the Company or any of its subsidiaries that has, or could reasonably be expected to have, a Material Adverse Effect on the Company; or (d) (i) the Company Board or any committee thereof shall have withheld or withdrawn or shall have modified or amended in a manner adverse to Parent or the Purchaser, the approval, adoption or recommendation, as the case may be, of the Offer, the Merger or the Merger Agreement, or shall have approved or recommended any Acquisition Transaction, (ii) any person shall have entered into a Contract with the Company with respect to an Acquisition Transaction, or (iii) the Company Board or any committee thereof shall have resolved to do or enter into any of the foregoing; or (e) the Company and the Purchaser and Parent shall have reached an agreement that the Offer or the Merger Agreement be terminated, or the Merger Agreement shall have been terminated in accordance with its terms; or (f) any of the representations and warranties of the Company set forth in the Merger Agreement, when read without any exception or qualification as to materiality or Material Adverse Effect on the Company, shall not be true and correct, as if such representations and warranties were made at the time of such determination (except as to any such representation or warranty which speaks as of a specific date, which must be untrue or incorrect as of such specific date) except where the failure to be so true and correct would not, individually or in the aggregate, reasonably be expected to (i) have a Material Adverse Effect on the Company, (ii) prevent or materially delay the consummation of the Offer, (iii) materially increase the cost of the Offer to the Purchaser, or (iv) have a material adverse effect on the benefits to Parent of the transactions contemplated by this Agreement; or (g) the Company shall have failed to perform in any material respect or to comply in any material respect with any of its material obligations, covenants or agreements under the Merger Agreement required to be performed or complied with prior to the time of such determination; or (h) there shall have occurred, and continue to exist, (i) any general suspension of, or limitation on prices for, trading in securities on the New York Stock Exchange or on the over-the-counter stock market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ"), (ii) any decline of at least 25% in either the Dow Jones Average of Industrial Stocks or the Standard & Poor's 500 Index from the close of business on the last trading day immediately preceding the date of the Merger Agreement through the applicable Expiration Date, (iii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, or (iv) a commencement of a war, or commencement of armed hostilities that has or is reasonably likely to have a Material Adverse Affect on the Company, or a material limitation (whether or not mandatory) by any Governmental Entity on the extension of credit by banks or other lending institutions; or (i) any of the directors of the Company, and, to the extent requested by Purchaser, any or all of the Company's subsidiaries, shall not have submitted a letter of resignation 54 effective as of the Effective Time, or any such letter of resignation shall no longer be in full force and effect. The foregoing conditions (including those set forth in clauses (i), (ii) and (iii) of the initial paragraph) are for the benefit of Parent and the Purchaser and may be asserted by Parent or the Purchaser regardless of the circumstances giving rise to any such conditions, and may be waived by Parent or the Purchaser in whole or in part at any time and from time to time (provided that no individual condition may be reasserted after it has been waived, and provided further that, except for the conditions set forth in clause (ii) of the initial paragraph, no condition may be waived after the Expiration Date) in each case in the reasonable discretion of Danaher and the Purchaser and subject to the terms of the Merger Agreement. The failure by Parent or the Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. All terms defined in the Agreement to which this Annex I is appended will have the same meaning when used in this Annex I, except that the term "Merger Agreement" shall be deemed to refer to the Agreement to which this Annex I is appended. 55 EX-99 10 dex99.txt CONFIDENTIALITY AGREEMENT DANAHER/MICROTEST Exhibit 99(d)(2) February 25,1999 CONFIDENTIAL - ------------ DANAHER CORPORATION Attention: Daniel L. Comas, Vice President, Corporate Development 1250 24th Street NW, Suite 800 Washington, DC 20037 Dear Mr. Comas: In connection with your consideration of a possible transaction with MICROTEST, INC. (the "Company"), the Company is prepared to make available to you certain information concerning the business, financial condition, operations, assets and liabilities of the Company. As a condition to such information being furnished to you and your directors, officers, employees, agents or advisors (including, without limitation, attorneys, accountants, consultants, bankers and financial advisors) (collectively, the "Representatives"), you agree to treat any information concerning the Company (whether prepared by the Company, its advisors or otherwise and irrespective of the form of communication provided; however, if disclosed orally, such information must be restated in written form within five days after the oral disclosure) which has been or will be furnished to you or to your Representatives by or on behalf of the Company (herein collectively referred to as the "Evaluation Material") in accordance with the provisions of this letter agreement, and to take or abstain from taking certain other actions hereinafter set forth. The term "Evaluation Material" shall be deemed to include all notes, analyses, compilations, studies, interpretations or other documents prepared by you or your Representatives which contain, reflect or are based upon, in whole or in part, the information furnished to you or your Representatives pursuant hereto. The term "Evaluation Material" does not include information which (i) is or becomes generally available to the public other than as a result of a disclosure by you or your Representatives, (ii) was within your possession prior to its being furnished to you by or on behalf of the Company pursuant hereto, provided that the source of such information was not known by you to be bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Company or any other party with respect to such information, (iii) becomes available to you on a non-confidential basis from a source other than the Company or any of its Representatives provided that such source is not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Company or any other party with respect to such information, (iv) is independently developed by you, or (v) is disclosed by you to others in accordance with the terms of prior written authorization of the Company. You hereby agree that you and your Representatives shall use the Evaluation Material solely for the purpose of evaluating a possible transaction between the Company and you, that the Evaluation Material will be kept confidential and that you and your Representatives will not disclose any of the Evaluation Material in any manner whatsoever, provided, however, that (i) you may make any disclosure of such information to which the Company gives its prior written consent and (ii) any of such information may be disclosed to your Representatives who need to know such information for the sole purpose of evaluating a possible transaction with the Company, who agree to keep such information confidential and who are provided with a copy of this letter agreement and agree to be bound by the terms hereof to the same extent as if they were parties hereto. In any event, you shall be responsible for any breach of this letter agreement by any of your Representatives and you agree, at your sole expense, to take all reasonable measures (including but not limited to court proceedings) to restrain your Representatives from prohibited or unauthorized disclosure or use of the Evaluation Material. In addition, you agree that, without the prior written consent of the Company, you and your Representatives will use all reasonable efforts to not disclose to any other person the fact that the Evaluation Material has been made available to you, that discussions or negotiations are taking place concerning a possible transaction involving the Company or any of the terms, conditions or other facts with respect thereto (including the status thereof), unless in the written opinion of your counsel such disclosure is required by law and then only with as much prior written notice to the Company as is practical under the circumstances. In the event that you or any of your Representatives are requested or required (by deposition, interrogatories, requests for information or documents in legal proceedings, subpoena, civil investigative demand or other similar process) to disclose any of the Evaluation Material, you shall provide the Company with prompt written notice of any such request or requirement so that the Company may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this letter agreement. If, in the absence of a protective order or other remedy or the receipt of a waiver by the Company, you or any of your Representatives are nonetheless, in the written opinion of your counsel, legally compelled to disclose Evaluation Material to any tribunal or else stand liable for contempt or suffer other censure or penalty, you or your Representative may, without liability hereunder, disclose to such tribunal only that portion of the Evaluation Material which such counsel advises you is legally required to be disclosed, provided that you exercise your best efforts to preserve the confidentiality of the Evaluation Material, including, without limitation, by cooperating with the Company to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Evaluation Material by such tribunal. If you decide that you do not wish to proceed with a transaction with the Company, you will promptly inform the Company of that decision. In that case, or at any time upon the request of the Company for any reason, you will promptly deliver to the Company all documents (and all copies thereof) furnished to you or your Representatives by or on behalf of the Company pursuant hereto. In the event of such a decision or request, all other Evaluation Material prepared by you or your Representatives shall be destroyed and no copy thereof shall be retained. Notwithstanding the return or destruction of the Evaluation Material, you and your Representatives will continue to be bound by your obligations of confidentiality and other obligations hereunder. You understand and acknowledge that neither the Company nor any of its Representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of the Evaluation Material. You agree that neither the Company nor any of its Representatives shall have any liability to you or to any of your Representatives relating to or resulting from the use of the Evaluation Material. Only those representations or warranties which are made in a final definitive agreement regarding the transactions contemplated hereby, when, as and if executed, and subject to such limitations and restrictions as may be specified therein, will have any legal effect. You agree that unless and until a final definitive agreement regarding a transaction between the Company and you has been executed and delivered, neither the Company nor you will be under any legal obligation of any kind whatsoever with respect to such a transaction by virtue of this letter agreement except for the matters specifically agreed to herein. You further acknowledge and agree that the Company reserves the right, in its sole discretion, to reject any and all proposals made by you or any of your Representatives with regard to a transaction between the Company and you, and to terminate discussions and negotiations with you at any time. In consideration of the Evaluation Material being furnished to you, you hereby agree that without obtaining the prior written consent of the Company, neither you nor any of your affiliates (as such term is defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended ("the Exchange Act") will knowingly solicit to employ any current officers, engineers or other key employees of the Company with whom you come in direct or indirect contact during this transaction, for a period of one year from the date hereof or so long as they are employed by the Company. You further agree that, without the prior written consent of the Company's Board of Directors, for a period of one year from the date hereof, neither you nor any of your affiliates (as such term is defined in Rule 12b-2 of the Exchange Act, acting alone or as party of a group, will: (a) Acquire, propose, or offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, any securities or direct or indirect rights to acquire any securities of the Company or any subsidiary thereof, or of any successor to or person in control of the Company, or any assets of the Company or any subsidiary or division thereof or of any such successor or controlling person, except for up to 5% of the Company's public common stock; (b) Make, or in any way participate, directly or indirectly, in any "solicitation" of "proxies" (as such terms are used in the rules under Section 14 of the Exchange Act) to vote or seek to advise or influence any person or entity with respect to the voting of any securities of the Company or otherwise seek to control or influence the management of the Company and its Board of Directors; (c) Make any public announcement with respect to, or submit a proposal for, or offer of (with or without conditions) any extraordinary transaction involving the Company or any of its securities or assets, or take any action that might force the Company to make a public announcement regarding any of the matters of the type set forth in clauses (a) through (c) hereof, or (d) Form, join, or in any way participate in a "group" as defined in Section 13(d)(3) of the Exchange Act in connection with any of the foregoing clauses (a) through (c) hereof. In addition, you agree during such one year period not to (a) request the Company to directly or indirectly amend or waive any provision of this or the immediately preceding paragraph or (b) take any action designed to or which can reasonably be expected to require the Company to make a public announcement regarding any of the matters referred to in this or the immediately preceding paragraph. You are aware, and will advise your Representatives who are informed of the matters that are the subject of this letter agreement, of the restrictions imposed by the United States securities laws on the purchase or sale of securities by any person who has received material non-public information from the issuer of such securities and on the communication of such information to any person when it is reasonably foreseeable that such other person is likely to purchase or sell securities in reliance upon such information. The Company reserves the right to assign all of its rights, powers and privileges under this agreement (including without limitation, the right to enforce all of the terms of this letter agreement) to any person who enters into the transactions contemplated by this letter agreement. It is understood and agreed that no failure or delay by the Company in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. It is further understood and agreed that money damages would not be a sufficient remedy for any breach of this letter agreement by you or any of your Representatives and that the Company shall be entitled to equitable relief, including injunction and specific performance, as a remedy for any such breach. Such remedies shall not be deemed to be the exclusive remedies for a breach by you of this letter agreement but shall be in addition to all other remedies available at law or equity to the Company. This letter agreement and the obligations hereunder shall continue for a period of three years from the date of this letter agreement. This letter agreement shall be governed by and constructed in accordance with the laws of the State of Arizona. Please confirm your agreement with the foregoing by signing and returning one copy of this letter to the undersigned, whereupon this letter agreement shall become a binding agreement between you and the Company. Very truly yours, MICROTEST, INC. By: /s/ Kent Mueller ---------------- Name: Kent Mueller Title: Chairman of the Board Accepted and agreed to as of the date first written above: DANAHER CORPORATION By: /s/ Daniel L. Comas ------------------- Name: Daniel L. Comas Title: V P Corporate Development May 22, 2001 CONFIDENTIAL - ------------ DANAHER CORPORATION Attention: Daniel L. Comas, Vice President, Corporate Development 1250 24th Street NW, Suite 800 Washington, DC 20037 Dear Mr. Comas: Reference is made to (i) the letter dated May 21, 2001 (the "Offer Letter") by which Danaher Corporation made a non-binding offer to acquire Microtest, Inc. in an all-cash tender offer for all of the outstanding capital stock of Microtest and (ii) the letter dated February 25, 1999 (the "Letter Agreement"), which provided for certain confidentiality, non-solicitation, standstill and other obligations regarding a possible transaction with Microtest. In consideration of the exclusivity provisions set forth in sixth paragraph of the Offer Letter, and as a condition to Microtest making available to you and your representatives additional information concerning its business, financial condition, operations, assets and liabilities, you hereby agree to modify, extend and reinstate certain provisions of the Letter Agreement, as follows: 1. The Letter Agreement and, except as set forth below, each of the obligations thereunder shall continue and remain in full force and effect for a period of two years from the date hereof. 2. The non-solicitation provisions set forth in the ninth paragraph of the Letter Agreement are hereby reinstated and shall remain in full force and effect for a period of one year from the date hereof or so long as the officers, engineers or other key employees of Microtest referred to therein remain in the employ of Microtest. 3. The standstill provisions set forth in the tenth and eleventh paragraphs of the Letter Agreement are hereby reinstated and shall remain in full force and effect for a period of one year from the date hereof. 4. The term "Evaluation Material" shall be deemed to include any Evaluation Material made available to you or your Representatives (as defined in the Letter Agreement) from and after the date hereof as well as any other Evaluation Material heretofore made available to your pursuant to the terms of the Letter Agreement. Except as and to the extent modified, extended and reinstated pursuant hereto, the Letter Agreement shall remain in full force and effect in accordance with its terms. For your convenience, a copy of the Letter Agreement has been attached hereto. Please confirm your agreement with the foregoing by signing and returning one copy of this letter to the undersigned, whereupon this letter agreement shall become a binding agreement between you and Microtest. Very truly yours, MICROTEST, INC. By: /s/ Vincent C. Hren ------------------- Name: Vincent C. Hren Title: President & Chief Financial Officer Accepted and agreed to as of the date first written above: DANAHER CORPORATION By: /s/ Paul V. Burgon ------------------ Name: Paul V. Burgon Title: Manager, Corporate Development -----END PRIVACY-ENHANCED MESSAGE-----