Exhibit 10
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BRUNSWICK BIOMEDICAL CORPORATION
March 15, 1996
Board of Directors
Survival Technology, Inc.
2275 Research Boulevard
Suite 100
Rockville, Maryland 20850
Dear Sirs:
Brunswick Biomedical Corporation ("Brunswick") has informed you that it
is proposing to acquire shares of Common Stock of Survival Technology, Inc.
("STI") from the Estate of Dr. Stanley J. Sarnoff (the "Estate") which would
result in Brunswick becoming an "interested stockholder" within the meaning
of Section 203 of the Delaware General Corporation Law (the "DGCL"). It is a
condition of such acquisition that the Board of Directors of STI (the
"Board") approve Brunswick's acquisition of the STI shares from the Estate so
that the provisions of Section 203 will not apply to Brunswick. Brunswick
believes that it is in the best interests of STI and its stockholders for
Brunswick to acquire the shares from the Estate and, in order to assist the
Board to approve such acquisition, hereby makes the following
representations, warranties, undertakings and agreements:
1. The information previously furnished to the Board and to STI's
representatives regarding (i) the business and financial condition of
Brunswick, (ii) the identity and background of its stockholders and proposed
investors to fund the acquisition of the Estate's STI shares and (iii)
Brunswick's present plans regarding the conduct of the business of STI and
Brunswick following such acquisition, including without limitation the
information furnished to the Board at its January 11, 1996 meeting, is true
and complete in all material respects and, except to the extent disclosed in
writing to the Board at least 48 hours prior to such acquisition, will be
true and complete in all material respects at the time of such acquisition.
In the event of a material change in such information, the Board may revoke
its approval contemplated hereunder prior to such acquisition.
2. During the Undertaking Period (as defined below), Brunswick will use
its best efforts to cause the Board of Directors of STI to include at least
two qualified independent directors. A director shall not be considered
independent if he or she (i) is or at any time within ten years prior to the
date of determination was a director, officer or employee of, or a
consultant, attorney or advisor to, STI (other than persons who served as
independent directors of STI prior to the acquisition) or Brunswick or (ii)
has a direct or indirect material ownership interest in, or is an officer,
director or employee of an organization with a direct or indirect material
ownership interest in, Brunswick. The persons proposed to be elected as
independent directors of STI have previously been disclosed by Brunswick to
the Board, and Brunswick will use its best efforts during the Undertaking
Period to cause such persons to be elected and continued in office and, if
necessary, to cause suitable replacements to be elected.
3. During the Undertaking Period, Brunswick will use its best efforts
to not permit STI to terminate the employment of Jeffrey W. Church without
Cause (as such term is defined in the employment agreement between Mr. Church
and STI dated as of January 28, 1994) or to provide Mr. Church with Good
Reason (as such term is so defined).
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4. During the Undertaking Period, neither Brunswick nor any of its
stockholders will, directly or indirectly, enter into any agreement,
arrangement or transaction with STI (other than proportionately as a
stockholder of STI) except (i) on terms no less favorable to STI than would
be available from a third party on an arm's-length basis, as may be approved
by a Special Committee or (ii) if the agreement, arrangement or transaction
is approved by a Special Committee as being in the best interests of STI and
its stockholders other than Brunswick.
5. During the Undertaking Period or a period of 36 months from the date
Brunswick becomes an interested stockholder, whichever ends later, Brunswick
will not offer to acquire or acquire, and will use its best efforts to cause
STI and any other affiliate or shareholder of Brunswick and any person acting
in concert with Brunswick to refrain from offering to acquire or acquiring,
any shares of Common Stock of STI outstanding at the date Brunswick becomes
an interested stockholder at a price less than the price paid to the Estate,
except to the extent that (i) Brunswick can demonstrate to the satisfaction
of a Special Committee that a lower price is justified by events or
circumstances occurring subsequent to its acquisition from the Estate, (ii) such
acquisition is pursuant to an agreement existing at the time of Brunswick's
acquisition from the Estate and disclosed to the Board prior to execution
hereof or (iii) the transaction otherwise is approved by a Special Committee
as in the best interests of STI and its shareholders other than Brunswick.
6. For a period of three years from the date it becomes an interested
stockholder, Brunswick will not engage in, and will use its best efforts to
cause STI not to engage in, (i) any merger or consolidation of STI or any
majority-owned subsidiary of STI with or into Brunswick or any affiliate or
shareholder of Brunswick or person acting in concert with Brunswick, (ii)
any sale, lease or exchange of all or substantially all the assets of
Brunswick or STI to the other or any affiliate or shareholder of, or person
acting in concert with, the other or (iii) any other transaction in which
the shares of capital stock of Brunswick are exchanged for or converted into
shares of capital stock or the right to acquire shares of capital stock of
STI or the shares of capital stock of STI are exchanged for or converted into
shares of capital stock or the right to acquire shares of capital stock of
Brunswick or any affiliate or shareholder of Brunswick or person acting in
concert with Brunswick, unless in each case any such transaction is approved
by a Special Committee with the advice and after receipt of an affirmative
opinion of an independent, generally recognized investment banking or similar
firm experienced in providing such advice and rendering "fairness opinions."
7. The following terms used herein have the meanings specified:
(a) "Special Committee" means a committee of the Board of
Directors of STI consisting solely of independent directors, not less than two
in number, except to the extent a lesser number is available to serve, which
shall act by majority action of its members and shall be authorized to
retain, if it chooses, independent counsel and independent financial advisors.
(b) "Undertaking Period" means the period from the date
Brunswick becomes an interested stockholder of STI and ending on the earlier
of (i) the date Brunswick and STI cease to be separate entities or one
becomes a wholly-owned subsidiary of the other in a transaction effected in
compliance with this Agreement, or (ii) the date which is three years after
the date Brunswick becomes an interested stockholder of STI.
(c) "Interested stockholder" means an interested stockholder
of STI within the meaning of Section 203 of the DGCL as in effect at the time
Brunswick becomes an interested stockholder.
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8. Brunswick acknowledges and agrees for the benefit of the directors
and officers of STI (i) that all rights to indemnification and all
limitations on liability existing in favor of the directors, officers and
employees of STI and its subsidiaries as provided in their respective
Certificates of Incorporation, By-Laws or similar governing documents as in
effect as of the date of this Agreement with respect to matters occurring
prior to the time of Brunswick's acquisition of the Estate's shares are
contractual in nature and that it will use its best efforts to cause STI and
such subsidiaries to continue such rights to indemnification and limitations
on liability in full force and effect and to be honored by such entities or
their respective successors as if they were the indemnifying party
thereunder, without any amendment thereto, for a period of not less than six
years from such time; PROVIDED, HOWEVER, that all rights to indemnification
in respect of any claim asserted or made within such period shall continue
until the final disposition of such claim; and (ii) that STI currently
carries directors' and officers' liability insurance and that, in order not
to detract from the coverage currently maintained on behalf of STI's
directors and officers, STI may, and Brunswick will use its best efforts to
cause STI to, provide for a period of no less than six years after the time
of such acquisition directors' and officers' liability insurance
substantially equivalent to that in effect on the date hereof for STI's
directors and officers covering causes of action that arise out of acts or
omissions occurring on or before the date Brunswick becomes an interested
stockholder of STI; PROVIDED, HOWEVER, that STI may elect instead to purchase
"tail coverage" or a "discovery period" as a substitute for some or all of
such insurance. Upon acquiring the shares of STI Common Stock from the
Estate, Brunswick will reimburse STI for the cost of purchasing such "tail
coverage" or "discovery period" as such cost is payable. STI shall use its
best efforts to finance such cost consistent with its past practice. In the
event Brunswick, STI or any of their respective successors and 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 or conveys all or substantially all of its
properties and assets to any person, then, and in each such case, to the
extent necessary, proper provision shall be made so that the successors and
assigns of Brunswick or STI, as the case may be, assume the obligations set
forth in this section.
9. Brunswick agrees for the benefit of the current directors of STI
that any director of STI who is not expected to be a continuing director of
STI after Brunswick's acquisition of the shares of STI Common Stock from the
Estate shall be given the opportunity to resign at the closing of such
acquisition, and such resignation will not be considered removal as a
director and will result in the stock options granted to such director under
STI's 1986 Stock Option Plan remaining outstanding until their otherwise
scheduled expiration.
10. Except as otherwise provided, this Agreement is for the benefit of
the Board, STI and its stockholders and shall become binding on Brunswick and
its successors upon the Board approving, for purposes of Section 203 of the
DGCL, Brunswick's acquisition of the shares of STI Common Stock from the
Estate and Brunswick's becoming an interested stockholder of STI, and
thereafter this Agreement shall not be amended without the approval of a
Special Committee after a finding that the amendment does not adversely
affect the rights of any person for whose benefit this Agreement is entered
into and is not contrary to the best interests of STI and its stockholders
other than Brunswick.
11. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to agreements made and entirely
to be performed within such jurisdiction, except to the extent federal law
may be applicable.
Very truly yours,
BRUNSWICK BIOMEDICAL CORPORATION
By: /s/ JAMES H. MILLER
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James H. Miller, President