AGREEMENT AND PLAN OF MERGER
BY AND AMONG
GENERAL ELECTRIC COMPANY,
XXXXX ACQUISITION COMPANY
AND
BHA GROUP HOLDINGS, INC.
Dated May 31, 2004
TABLE OF CONTENTS
Article I [INTENTIONALLY OMITTED].........................................................................1
Article II THE MERGER......................................................................................1
Section 2.1 Merger; Surviving Corporation..........................................................1
Section 2.2 Certificate of Incorporation...........................................................1
Section 2.3 By-Laws................................................................................2
Section 2.4 Directors and Officers.................................................................2
Section 2.5 Effective Time.........................................................................2
Section 2.6 Conversion of Shares of Company Common Stock...........................................2
Section 2.7 Purchaser Common Stock.................................................................3
Section 2.8 Surrender of Company Common Stock......................................................3
Section 2.9 Company Stock Options..................................................................5
Section 2.10 Adjustments............................................................................5
Article III REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................................................5
Section 3.1 Organization, Standing and Corporate Power.............................................6
Section 3.2 Capital Structure......................................................................6
Section 3.3 Subsidiaries...........................................................................7
Section 3.4 Authority..............................................................................7
Section 3.5 Compliance with Laws; Licenses, Permits and Registrations..............................8
Section 3.6 No Conflicts...........................................................................9
Section 3.7 Consents; Approvals....................................................................9
Section 3.8 Company SEC Documents..................................................................9
Section 3.9 Financial Statements..................................................................10
Section 3.10 Absence of Certain Changes or Events..................................................11
Section 3.11 Contracts and Commitments.............................................................12
Section 3.12 Information Supplied..................................................................13
Section 3.13 Litigation............................................................................13
Section 3.14 Employee Benefits.....................................................................13
Section 3.15 Intellectual Property.................................................................17
Section 3.16 Voting Requirements...................................................................19
Section 3.17 Brokers...............................................................................19
Section 3.18 Transactions with Affiliates..........................................................19
Section 3.19 Amendment to Rights Agreement.........................................................19
Section 3.20 Disclosure............................................................................20
Section 3.21 Title to Properties...................................................................20
Section 3.22 Insurance, Claims and Warranties......................................................20
Section 3.23 Opinion of Financial Advisors.........................................................21
Section 3.24 Taxes.................................................................................21
Section 3.25 Environmental Compliance and Disclosure...............................................23
Section 3.26 State Takeover Statutes...............................................................24
Article IV REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.........................................25
Section 4.1 Organization, Standing and Corporate Power............................................25
Section 4.2 Authority.............................................................................25
Section 4.3 No Conflicts..........................................................................25
Section 4.4 Consents; Approvals...................................................................26
Section 4.5 Information Supplied..................................................................26
Section 4.6 Financial Capacity....................................................................26
Article V COVENANTS......................................................................................26
Section 5.1 Conduct of Business by the Company....................................................26
Section 5.2 No Solicitation.......................................................................29
Section 5.3 Further Assurances; Reasonable Best Efforts...........................................31
Section 5.4 Employee Benefit Plans................................................................32
Section 5.5 Certain Notifications.................................................................33
Section 5.6 Expenses..............................................................................33
Section 5.7 Public Announcements..................................................................33
Section 5.8 Company Stockholders Meeting..........................................................33
Section 5.9 Proxy Statement.......................................................................34
Section 5.10 ESOP and Profit Sharing Plan..........................................................34
Section 5.11 Access to Information; Confidentiality................................................35
Section 5.12 Indemnification, Exculpation and Insurance............................................35
Section 5.13 Profit Sharing Plan...................................................................36
Section 5.14 Undertakings of Parent................................................................36
Section 5.15 Director Resignations.................................................................36
Section 5.16 Rights Agreement......................................................................36
Section 5.17 Stockholder Litigation................................................................36
Section 5.18 Standstill Agreements; Confidentiality Agreements.....................................36
Article VI CONDITIONS.....................................................................................37
Section 6.1 Conditions to the Merger..............................................................37
Section 6.2 Conditions to Obligations of Parent and Purchaser.....................................37
Section 6.3 Conditions to the Obligations of the Company..........................................38
Section 6.4 Frustration of Closing Conditions.....................................................38
Article VII TERMINATION, AMENDMENT AND WAIVER..............................................................38
Section 7.1 Termination...........................................................................38
Section 7.2 Effect of Termination.................................................................40
Section 7.3 Termination Payment...................................................................40
Section 7.4 Amendment.............................................................................41
Section 7.5 Waiver................................................................................41
Article VIII DEFINITIONS; INTERPRETATION....................................................................41
Section 8.1 Definitions...........................................................................41
Section 8.2 Interpretation........................................................................46
Article IX GENERAL PROVISIONS.............................................................................46
Section 9.1 Nonsurvival of Representations and Warranties.........................................46
Section 9.2 Notices...............................................................................46
Section 9.3 Severability..........................................................................48
Section 9.4 Entire Agreement, Third Party Beneficiaries...........................................48
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Section 9.5 Governing Law.........................................................................48
Section 9.6 Counterparts..........................................................................48
Section 9.7 Assignment............................................................................48
Section 9.8 Specific Performance..................................................................48
Section 9.9 WAIVER OF JURY TRIAL..................................................................48
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AGREEMENT AND PLAN OF MERGER (this "Agreement") made and
entered into as of this 31st day of May, 2004 by and among General Electric
Company, a New York corporation ("Parent"), Xxxxx Acquisition Company, a
Delaware corporation which is wholly owned by Parent ("Purchaser"), and BHA
Group Holdings, Inc., a Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of Purchaser and the Company
have each determined that it is in the best interests of their respective
stockholders for Parent to acquire the Company upon the terms and subject to the
conditions set forth herein;
WHEREAS, in furtherance of such acquisition, the Boards of
Directors of Purchaser and the Company have each approved the merger (the
"Merger") of Purchaser with and into the Company in accordance with the General
Corporation Law of the State of Delaware (the "DGCL") upon the terms and subject
to the conditions set forth herein; and
WHEREAS, simultaneously with the execution and delivery of
this Agreement and as a condition and inducement to the willingness of Parent to
enter into this Agreement, Parent and certain stockholders of the Company are
entering into a voting agreement (the "Voting Agreement") in the form attached
as Exhibit B hereto, pursuant to which such stockholders have agreed to vote to
approve the Merger upon the terms and subject to the conditions set forth in the
Voting Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
[INTENTIONALLY OMITTED]
ARTICLE II
THE MERGER
Section 2.1 Merger; Surviving Corporation. In accordance with the
provisions of this Agreement and the DGCL, at the Effective Time, Purchaser
shall be merged with and into the Company, and the Company shall be the
surviving corporation (hereinafter sometimes called the "Surviving Corporation")
and shall continue its corporate existence under the laws of the State of
Delaware. At the Effective Time the separate corporate existence of Purchaser
shall cease. All properties, franchises and rights belonging to Purchaser and
the Company, by virtue of the Merger and without further act or deed, shall be
deemed to be vested in the Surviving Corporation, which shall thenceforth be
responsible for all the liabilities and obligations of each of Purchaser and the
Company.
Section 2.2 Certificate of Incorporation. The Company Certificate of
Incorporation, as in effect immediately prior to the Effective Time, shall be
amended and restated in the Merger to be in the form of Exhibit A attached
hereto with an effective time as of the Effective Time and, as so amended and
restated, at the Effective Time and without any further action on the part
of the Company or Purchaser such certificate of incorporation shall be the
certificate of incorporation of the Surviving Corporation until thereafter
amended as provided therein or by applicable Law.
Section 2.3 By-Laws. At the Effective Time and without any further action
on the part of the Company or Purchaser, the by-laws of Purchaser in effect
immediately prior to the Effective Time shall be the by-laws of the Surviving
Corporation until altered, amended or repealed as provided therein and in the
certificate of incorporation of the Surviving Corporation.
Section 2.4 Directors and Officers. In accordance with Section 5.15, the
directors of the Company immediately prior to the Effective Time shall submit
their resignations to be effective as of the Effective Time. The directors of
Purchaser immediately prior to the Effective Time shall be the initial directors
of the Surviving Corporation, each to hold office in accordance with the
certificate of incorporation and by-laws of the Surviving Corporation, and the
officers of the Company immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation, in each case until the earlier of
their resignation or removal or their respective successors are duly elected or
appointed (as the case may be) and qualified.
Section 2.5 Effective Time. The Merger shall become effective at the time
of filing of a certificate of merger (the "Certificate of Merger") with the
Secretary of State of the State of Delaware in accordance with the relevant
provisions of the DGCL, or at such later time specified as the effective time in
the Certificate of Merger, which Certificate of Merger shall be so filed as soon
as practicable after the meeting of stockholders contemplated in Section 3.16
and the satisfaction or, if permissible, waiver of the conditions set forth in
Article VI. The time when the Merger shall become effective is referred to
herein as the "Effective Time." Prior to such filing, a closing shall be held at
the offices of King & Spalding LLP, 0000 Xxxxxx xx Xxxxxxxx, Xxx Xxxx, XX 00000,
or such other place as shall be agreed to by the parties, for the purpose of
confirming the satisfaction or waiver, as the case may be, of the conditions set
forth in Article VI.
Section 2.6 Conversion of Shares of Company Common Stock. (a) Each share of
common stock, par value $0.01 per share, of the Company (the "Company Common
Stock") together with the associated rights attached thereto (the "Company
Rights") issued pursuant to the Rights Agreement, issued and outstanding
immediately prior to the Effective Time (other than shares to be canceled in
accordance with Sections 2.6(b) and 2.6(c) and Appraisal Shares) shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into, exchanged for and represent the right to receive $38.00 per
share of Company Common Stock (including the associated Company Right) in cash
(the "Merger Consideration"), payable, without interest, to the holder of such
share of Company Common Stock, upon surrender, in the manner described below, of
the certificate that formerly evidenced such share of Company Common Stock.
(b) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time which is then owned beneficially and of
record by Parent or any of its Affiliates shall, by virtue of the Merger and
without any action on the part of the holder thereof, be cancelled and retired
and cease to exist, without any conversion thereof.
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(c) Each share of Company Common Stock held in the treasury of
the Company immediately prior to the Effective Time shall, by virtue of the
Merger, be cancelled and retired and cease to exist, without any conversion
thereof.
(d) Notwithstanding anything in this Section 2.6 to the
contrary, shares of Company Common Stock which are issued and outstanding
immediately prior to the Effective Time and which are held by any stockholders
of the Company who have not voted such shares in favor of the Merger and who
shall have properly exercised their rights of appraisal for such shares in the
manner provided in Section 262 of the DGCL ("Appraisal Shares") shall not be
converted into or be exchangeable for the right to receive the Merger
Consideration, unless and until such holder shall have failed to perfect or
shall have effectively waived, withdrawn or lost such right to appraisal under
Section 262 of the DGCL. If such holder shall have so failed to perfect or shall
have effectively waived, withdrawn or lost such right to appraisal under Section
262 of the DGCL, his shares of Company Common Stock shall thereupon be deemed to
have been converted into and to have become exchangeable for, at the Effective
Time, the right to receive the Merger Consideration, without any interest
thereon. The Company shall give Parent prompt notice of any demands for
appraisal of any shares of Company Common Stock (and shall also give Parent
prompt notice of any withdrawals of such demands for appraisal rights), and
Parent shall have the right to direct all negotiations and proceedings with
respect to any such demands. Neither the Company nor the Surviving Corporation
shall, except with the prior written consent of Parent, voluntarily make any
payment with respect to, or settle or offer to settle, any such demand for
appraisal rights. Stockholders of the Company who shall have perfected their
right of appraisal and not waived, withdrawn or otherwise lost such right of
appraisal, shall be entitled to receive payment of the appraised value of the
shares of Company Common Stock held by them in accordance with the provisions of
Section 262 of the DGCL.
Section 2.7 Purchaser Common Stock. Each share of Purchaser common stock
issued and outstanding immediately prior to the Effective Time shall, by virtue
of the Merger and without any action on the part of Purchaser or any holder
thereof, be converted into and become one fully paid and nonassessable share of
Surviving Corporation common stock. From and after the Effective Time, each
outstanding certificate theretofore representing shares of Purchaser common
stock shall be deemed for all purposes to evidence ownership of and to represent
the number of shares of Surviving Corporation common stock into which such
shares of Purchaser common stock shall have been converted. Promptly after the
Effective Time, the Surviving Corporation shall issue to Parent a stock
certificate or certificates representing shares of Surviving Corporation common
stock in exchange for the certificate or certificates that formerly represented
an equal number of shares of Purchaser common stock, which shall be surrendered
by Parent and cancelled.
Section 2.8 Surrender of Company Common Stock. (a) Promptly after the
Effective Time, Parent shall deposit, or cause to be deposited, with the Paying
Agent for the benefit of the stockholders of the Company, such amount of cash as
shall be payable in exchange for outstanding shares of Company Common Stock
pursuant to Section 2.6 hereof upon surrender of the Certificates. Such funds
shall be invested by the Paying Agent as directed by the Parent.
(b) As soon as practicable after the Effective Time, but in no
event later than 5 calendar days after the Effective Time, the Paying Agent
shall mail to each holder of record
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(other than to holders of Company Common Stock to be cancelled as set forth in
Section 2.6(b) or 2.6(c) or Appraisal Shares) of a certificate or certificates
that immediately prior to the Effective Time represented outstanding shares of
Company Common Stock (the "Certificates") (i) a form letter of transmittal
(which shall be in customary form and 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 (ii) instructions
for effecting the surrender of the Certificates in exchange for the Merger
Consideration.
(c) Upon surrender of a Certificate for cancellation to the
Paying Agent, together with such letter of transmittal, duly executed, and such
other agreements as the Paying Agent shall reasonably request, the holder of
such Certificate shall be entitled to receive in exchange therefor the Merger
Consideration (net of all applicable withholding taxes), and the Certificate so
surrendered shall forthwith be cancelled. Until surrendered as contemplated by
this Section 2.8(c), each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive the Merger Consideration
with respect to the shares of Company Common Stock formerly represented thereby.
No interest shall accrue or be paid on the Merger Consideration payable upon the
surrender of any Certificate.
(d) Any amounts of cash delivered or made available to the
Paying Agent pursuant to this Section 2.8 and not exchanged for Certificates
within 6 months after the Effective Time pursuant to this Section 2.8 shall be
returned by the Paying Agent to Parent. Thereafter, all holders of unsurrendered
Certificates under this Article II shall be entitled to look to the Surviving
Corporation (subject to abandoned property, escheat and other similar laws) only
as general creditors thereof with respect to any Merger Consideration that may
be payable upon due surrender of the Certificates held by them. Notwithstanding
the foregoing, neither the Surviving Corporation nor the Paying Agent shall be
liable to any holder of a share of Company Common Stock for any Merger
Consideration delivered in respect of such share to a public official pursuant
to any abandoned property, escheat or other similar Law.
(e) If any payment of the Merger Consideration is to be made
to a Person other than that in which the Certificate surrendered is registered,
it shall be a condition of payment that the Certificate so surrendered shall be
properly endorsed or otherwise in proper form for transfer and that the Person
requesting such payment shall pay any transfer or other taxes required by reason
of the payment to a Person other than the registered holder of the Certificate
surrendered or establish to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable.
(f) After the Effective Time, there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates representing such shares are presented to the Surviving
Corporation, they shall be cancelled and exchanged for the Merger Consideration
as provided in this Article II.
(g) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and indemnifying the Surviving
Corporation against any claim that may be made against it with respect to such
Certificate, which indemnification obligation, if reasonably
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requested by the Surviving Corporation, shall be secured by an indemnification
bond, the Paying Agent shall issue in exchange for such lost, stolen or
destroyed Certificate the Merger Consideration.
Section 2.9 Company Stock Options. (a) Prior to the Effective Time the
Company (i) shall take all actions necessary to cause all outstanding options to
acquire Company Common Stock, including "phantom" stock options, whether or not
vested (the "Company Stock Options"), to be cancelled at the Effective Time in
exchange for a payment by Parent to each holder of such Company Stock Options in
cash equal to (x) the excess, if any, of the Merger Consideration over the
exercise price for the shares of Company Common Stock subject to such Company
Stock Option multiplied by (y) number of shares of Company Common Stock for
which such Company Stock Option shall not theretofore have been exercised, less
all applicable deductions and withholdings with respect to such payment under
the Code and the rules and regulations promulgated thereunder and under any
provision of any applicable state, local or foreign tax law. Such cash payment
shall be made as soon after the Effective Time as shall be practical.
(b) The Company shall take such steps as may be reasonably
requested by any party hereto to cause dispositions of Company equity securities
(including derivative securities) pursuant to the transactions contemplated by
this Agreement by each individual who is a director or officer of the Company to
be exempt under Rule 16b-3 promulgated under the Exchange Act in accordance with
that certain No-Action Letter dated January 12, 1999 issued by the SEC regarding
such matters.
Section 2.10 Adjustments. If during the period between the date of this
Agreement and the Effective Time, any change in the outstanding shares of
Company Common Stock, or securities convertible or exchangeable into or
exercisable for shares of Company Common Stock, shall occur by reason of any
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares of Company Common Stock, or any similar transaction, or
any stock dividend thereon with a record date during such period, the Merger
Consideration shall be appropriately adjusted to reflect such change.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent and
Purchaser (except as set forth in the written disclosure schedule (with specific
reference to the particular section or subsection of this Agreement to which the
information set forth in such disclosure schedule relates, except to the extent
a matter is disclosed in such a way as to make its relevance to the information
called for by another section or subsection readily apparent; for the avoidance
of doubt, any matter included in such disclosure schedule shall not be deemed
disclosed for purposes of the definition of Material Adverse Effect to the
extent that any additional or different state of facts, change, development,
circumstance, event or effect occurs, or becomes known, relating directly or
indirectly to such matter after the date of this Agreement) delivered by the
Company to Parent and Purchaser in connection with the execution and delivery of
this Agreement (the "Company Disclosure Schedule")) as follows:
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Section 3.1 Organization, Standing and Corporate Power. The Company and
each of its Subsidiaries is a corporation duly organized, validly existing and
in good standing under the Laws of the jurisdiction in which it is organized and
has the requisite corporate power and authority to own, lease and operate its
properties and assets and to conduct its business as presently conducted. Each
of the Company and its Subsidiaries 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 ownership, leasing or operation of its properties makes such
qualification or licensing necessary, except for those jurisdictions in which
the failure to be so qualified or licensed or to be in good standing,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Material Adverse Effect on the Company. The Company has made
available to Parent true and complete copies of its certificate of
incorporation, as amended, supplemented, modified or restated through the date
of this Agreement (including any and all certificates of designations attached
thereto, the "Company Certificate of Incorporation") and bylaws, as amended,
supplemented, modified or restated through the date of this Agreement (including
any and all amendments thereto the "Company Bylaws") and the certificate of
incorporation and bylaws, or equivalent organizational documents, each as
amended, supplemented, modified or restated through the date of this Agreement
(or equivalent organizational documents) of each Subsidiary. The Company
Certificate of Incorporation, the Company Bylaws and such other certificates of
incorporation, bylaws or equivalent organizational documents for the
Subsidiaries are in full force and effect, and neither the Company nor any
Subsidiary is in violation of any provision of its certificate of incorporation,
bylaws or equivalent organizational documents. The Company has made available to
Parent and its representatives correct and complete copies of the minutes (or,
in the case of minutes that have not yet been finalized, drafts thereof) of all
meetings of stockholders, the Board of Directors of the Company and each
committee of the Board of Directors of the Company and each of its Subsidiaries
held since October 1, 2000 through the date of this Agreement.
Section 3.2 Capital Structure. The authorized capital stock of the Company
consists of 20,000,000 shares of Company Common Stock. As of May 28, 2004 (i)
6,282,274 shares of Company Common Stock are issued and outstanding, all of
which are validly issued, fully paid and nonassessable and free of preemptive
rights, (ii) 2,789,848 shares of Company Common Stock are held in the treasury
of the Company, (iii) 898,924 shares of Company Common Stock are subject to
outstanding Company Stock Options and 320,877 additional shares of Company
Common Stock are authorized and reserved for future issuance pursuant to the
Company Stock Option Plan, and (iv) 278,985 shares of Company Common Stock are
reserved for issuance in connection with the Company Rights issued pursuant to
the Rights Agreement dated as of December 13, 1995, between the Company and
Boatmen's Trust Company (as amended, the "Rights Agreement"). There are not any
bonds, debentures, notes or other indebtedness of the Company having the right
to vote (or convertible into, or exchangeable for, securities having the right
to vote) on any matters on which holders of Company Common Stock may vote
("Voting Company Debt"). Schedule 3.2(a) of the Company Disclosure Schedule sets
forth a true and complete list of the outstanding Company Stock Options with the
exercise prices thereof, the name of the holder thereof, the number of options
that are vested and the number of Shares into which the outstanding Company
Stock Options may be exercised. Except as set forth above or on Schedule 3.2(a)
of the Company Disclosure Schedule, there are no options, warrants, convertible
securities, subscriptions, stock appreciation rights, phantom stock plans or
stock equivalents or other rights, agreements, arrangements or commitments
(contingent or otherwise)
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of any character issued or authorized by the Company or any Subsidiary relating
to the issued or unissued capital stock of the Company or any Subsidiary or
obligating the Company or any Subsidiary to issue or sell any shares of capital
stock of, or options, warrants, convertible or exchangeable securities,
subscriptions or other equity interests in, the Company or any Subsidiary or any
Voting Company Debt. All shares of Company Common Stock subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. Except as set forth on Schedule
3.2(a) of the Company Disclosure Schedule, there are no outstanding contractual
obligations of the Company or any Subsidiary to repurchase, redeem or otherwise
acquire any shares of Company Common Stock or any other capital stock of the
Company or any Subsidiary or to pay any dividend or make any other distribution
in respect thereof or to provide funds to, or make any investment (in the form
of a loan, capital contribution or otherwise) in, any Person.
Section 3.3 Subsidiaries. Schedule 3.3 of the Company Disclosure Schedule
sets forth a true and complete list of each of the Company's Subsidiaries as of
the date hereof. All the outstanding shares of capital stock of, or other equity
interests in, each Subsidiary of the Company have been validly issued and are
fully paid and nonassessable and are owned directly or indirectly by the Company
or a Subsidiary, free and clear of all Encumbrances. Except for the capital
stock or other ownership interests of its Subsidiaries and as disclosed on
Schedule 3.3 of the Company Disclosure Schedule, as of the date hereof, the
Company does not beneficially own directly or indirectly any capital stock,
membership interest, partnership interest, joint venture interest or other
equity interest in any Person.
Section 3.4 Authority. (a) The Company has the requisite corporate power
and corporate authority to enter into this Agreement and to consummate the
transactions contemplated hereby, subject to the receipt of the Company
Stockholder Approval in connection with the Merger. The execution and delivery
of this Agreement and the consummation of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of the Company (including the unanimous approval of the Board of Directors
of the Company), and no other corporate proceedings on the part of the Company
are necessary to authorize this Agreement or to consummate the transactions
contemplated by this Agreement (other than, with respect to the Merger, the
approval and adoption of this Agreement and the Merger by the receipt of the
Company Stockholder Approval and the filing and recordation of appropriate
merger documents as required by the DGCL). This Agreement has been duly executed
and delivered by the Company and, assuming the due authorization, execution and
delivery by each of the other parties hereto, constitutes the legal, valid and
binding obligation of the Company, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar Laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
(b) The Board of Directors of the Company, at a meeting duly
called and held, has (w) determined that this Agreement, the Merger and the
transactions contemplated hereby are fair to and in the best interests of the
holders of Company Common Stock, (x) approved and
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adopted this Agreement, the Merger and the transactions contemplated hereby, (y)
consented to the transactions contemplated hereby, including the Merger, for
purposes of the Rights Agreement, and has acknowledged that the Rights Agreement
shall not apply in connection with such transactions and (z) recommended that
such stockholders approve and adopt this Agreement and the transactions
contemplated hereby (the "Company Recommendation").
Section 3.5 Compliance with Laws; Licenses, Permits and Registrations. (a)
Except as set forth on Schedule 3.5(a) of the Company Disclosure Schedule,
neither the Company nor any of its Subsidiaries is in violation of, or has
violated, any applicable provisions of any United States federal, state or local
or any foreign statute, law, rule, regulation, ordinance, code, order, judgment
or decree (including any Law relating to Export Control Requirements, improper
payments and anti-boycotting) (a "Law"). Without limiting the generality of the
foregoing, except as set forth on Schedule 3.5(a) of the Company Disclosure
Schedule, none of the Company or its Subsidiaries is a party to any contract or
bid with, or has conducted business with (directly or, to the Knowledge of the
Company, indirectly), a third party located in Cuba, Myanmar (Burma), Iran,
Iraq, North Korea, Libya or Sudan. Since October 1, 2001, neither the Company
nor any of its Subsidiaries has made or has been ordered to make any payment in
respect of Governmental Damages. Since October 1, 2001, neither the Company nor
any of its Subsidiaries has received written notice that a Governmental
Authority claimed or alleged that the Company or any of its Subsidiaries was not
in compliance in a material respect with any Law applicable to the Company or
any of its Subsidiaries, any of their material properties or other assets or any
of their businesses or operations (including those Laws relating to Export
Control Requirements, improper payments and anti-boycotting). For purposes of
this Agreement, "Governmental Damages" means (i) any penalties or fines paid by
the Company or any of is Subsidiaries to a Governmental Authority or (ii) any
restitution paid by the Company or any of its Subsidiaries to a third party, in
each case, resulting from the (x) conviction (including as a result of the entry
of a guilty plea, a consent judgment or a plea of nolo contendre) of the Company
or any of its Subsidiaries of a crime or (y) settlement with or payments to a
Governmental Authority for the purpose of closing an investigation by a
Governmental Authority for the purpose of imposing criminal sanctions on the
Company or any of its Subsidiaries.
(b) Except as set forth on Schedule 3.5(b) of the Company
Disclosure Schedule, each of the Company and its Subsidiaries has all permits,
licenses, approvals, franchises, certificates, authorizations of and
registrations with and under all Laws, and from all Governmental Authorities
required by the Company and its Subsidiaries to carry on their respective
businesses as now being conducted, including the manufacture and sale of their
respective products (collectively, "Permits"), except where the failure to have
any such Permits, individually or in the aggregate, has not had and would not
reasonably be expected to have a Material Adverse Effect on the Company. Since
October 1, 2001, neither the Company nor any of its Subsidiaries has received
written notice that a Governmental Authority was considering the amendment,
termination, revocation or cancellation of any Permit. The Company and its
Subsidiaries are (and since October 1, 2001 have been) in compliance in all
material respects with the terms of all Permits. The consummation of the Merger,
in and of itself, will not cause the revocation or cancellation of any Permit
that is material to the Company and its Subsidiaries taken as a whole.
8
Section 3.6 No Conflicts. Except as set forth on Schedule 3.6 of the
Company Disclosure Schedule, the execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby and compliance
with the provisions hereof will not, conflict with, or result in any violation
of or default under (with or without notice or lapse of time or both), or give
rise to a right of termination, cancellation or acceleration of any obligation
or loss of a benefit under, or result in the creation of any Encumbrance upon
any of the properties or assets of the Company or any of its Subsidiaries under
(i) the organizational documents of the Company or any of its Subsidiaries, (ii)
any loan or credit agreement, note, bond, mortgage, indenture, contract, lease
or other agreement, commitment or obligation, instrument, permit, concession,
franchise, license or similar authorization applicable to the Company or any of
its Subsidiaries or their respective properties or assets or (iii) subject to
the governmental filings and other matters referred to in Section 3.7, any Law
applicable to the Company or any of its Subsidiaries or their respective
properties or assets, other than, in the case of clauses (ii) and (iii), any
such conflicts, violations, defaults, rights, losses or Encumbrances that,
individually or in the aggregate, have not had and would not reasonably be
expected to (x) have a Material Adverse Effect on the Company or (y) prevent or
materially delay the consummation of the transactions contemplated by this
Agreement.
Section 3.7 Consents; Approvals. Except as set forth on Schedule 3.7 of the
Company Disclosure Schedule, no license, permit, consent, approval, order or
authorization of, action by or in respect of, or registration, declaration or
filing with, any Governmental Authority is required by or with respect to the
Company or any of its Subsidiaries in connection with the execution and delivery
of this Agreement by the Company or the consummation by the Company of the
transactions contemplated by this Agreement, except for (i) the filing of a
premerger notification and report form by the Company under the HSR Act and any
applicable filings and approvals under Foreign Antitrust Laws; (ii) the filing
with the SEC of the Proxy Statement and the filing of any reports under the
Exchange Act and the rules of The Nasdaq National Market, as may be required in
connection with this Agreement and the transactions contemplated by this
Agreement; (iii) the filing of: (A) the Certificate of Merger with the Secretary
of State of the State of Delaware, and (B) appropriate documents with the
relevant authorities of other states in which the Company and its Subsidiaries
are qualified to do business; and (iv) such other consents, approvals, orders or
authorizations the failure of which to be made or obtained, individually or in
the aggregate, have not had and would not reasonably be expected to (x) have a
Material Adverse Effect on the Company, or (y) prevent or materially delay the
consummation of the transactions contemplated by this Agreement.
Section 3.8 Company SEC Documents.
(a) The Company and each Subsidiary, as necessary, has filed
all required reports, schedules, forms, statements and other documents
(including exhibits and all other information incorporated therein) with the SEC
since September 30, 2002 (collectively, the "Company SEC Documents"). Except as
set forth on Schedule 3.8 of the Company Disclosure Schedule, as of their
respective dates, the Company SEC Documents complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, the Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx Act") and the rules and
regulations of the SEC promulgated thereunder applicable to such Company SEC
Documents, and none of the Company SEC Documents when filed (or, if amended or
superseded by a filing prior to the date
9
of this Agreement, as of the date of such filing) contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. No investigation by
the SEC with respect to the Company or any of its Subsidiaries is pending or, to
the Knowledge of the Company, threatened. The principal executive officer of the
Company and the principal financial officer of the Company (and each former
principal executive officer of the Company and each former principal financial
officer of the Company, as applicable) has made the certifications required by
Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act and the rules and regulations of
the SEC thereunder with respect to the Company SEC Documents, when applicable.
For purposes of the preceding sentence, "principal executive officer" and
"principal financial officer" shall have the meanings given to such terms in the
Xxxxxxxx-Xxxxx Act.
(b) The Company's principal executive officer and its
principal financial officer have disclosed, based on their most recent
evaluation, to the Company's auditors and the audit committee of the Board of
Directors of the Company (i) all significant deficiencies in the design or
operation of internal controls that could adversely affect the Company's ability
to record, process, summarize and report financial data and have identified for
the Company's auditors any material weaknesses in internal controls and (ii) any
fraud, whether or not material, that involves management or other employees who
have a significant role in the Company's internal controls. The Company has
established and maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15 under the Exchange Act); such disclosure controls and
procedures are designed to ensure that material information relating to the
Company, including its consolidated Subsidiaries, is made known to the Company's
principal executive officer and its principal financial officer by others within
those entities, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared; and, to the Knowledge of the
Company, such disclosure controls and procedures are effective in timely
alerting the Company's principal executive officer and its principal financial
officer to material information required to be included in the Company's
periodic reports required under the Exchange Act.
Section 3.9 Financial Statements. Except as set forth on Schedule 3.9 of
the Company Disclosure Schedule, the financial statements included in the
Company SEC Documents, including any related notes thereto, comply as to form,
as of their respective dates of filing with the SEC, in all material respects
with the applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto ("Accounting Rules"), have been
prepared in accordance with GAAP (except, in the case of unaudited statements,
as permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present in all material respects the respective consolidated financial position
of the Company and its consolidated Subsidiaries as of the dates thereof and
their respective consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
recurring year-end audit adjustments and the absence of footnotes if
applicable). Except (i) as reflected in the Company SEC Documents, (ii) for
liabilities incurred in connection with this Agreement or the transactions
contemplated by this Agreement or (iii) for liabilities incurred after March 31,
2004 in the ordinary course of business consistent with past practice, neither
the Company nor any of its Subsidiaries has any liabilities or obligations of
any nature (whether accrued, absolute,
10
contingent or otherwise) that would be required to be disclosed on a balance
sheet of the Company and its consolidated Subsidiaries or the footnotes thereto
prepared in accordance with GAAP which, individually or in the aggregate, have
had or would reasonably be expected to have a Material Adverse Effect on the
Company. The Company has made available to Parent a correct and complete summary
of any such disclosure made by management of the Company to the Company's
auditors and audit committee since October 1, 2002.
Section 3.10 Absence of Certain Changes or Events. Except as disclosed in
the Company SEC Documents or on Schedule 3.10 of the Company Disclosure
Schedule, since September 30, 2003, the Company and its Subsidiaries have
conducted their respective businesses only in the ordinary course and consistent
with prior practice and during such period there has not been:
(a) any event, change or occurrence of any condition that has
had or would reasonably be expected to have a Material Adverse Effect on the
Company;
(b) any declaration, setting aside or payment of any dividend
or any other distribution with respect to any of the capital stock of the
Company or any Subsidiary or any repurchase for value by the Company of any
capital stock of the Company or any Subsidiary;
(c) any split, combination or reclassification of any capital
stock of the Company or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for shares of
capital stock of the Company;
(d) any change in accounting methods, principles or practices
employed by the Company, except as may have been required by a change in GAAP;
(e) (i) any granting by the Company or any Subsidiary to any
director or officer of the Company or any Subsidiary of any increase in
compensation, except in the ordinary course of business or as was required under
employment agreements as of September 30, 2003 and included in the Company SEC
Documents, (ii) any granting by the Company or any Subsidiary to any such
director or officer any rights, warrants or options to acquire any capital stock
or convertible securities or any stock appreciation rights or phantom stock,
except in the ordinary course of business or as was required under agreements as
of September 30, 2003 and included in the Company SEC Documents, (iii) any
granting by the Company or any Subsidiary to any such director or officer of any
increase in severance or termination pay, except as was required under any
employment, severance or termination agreements as of September 30, 2003 and
included in the Company SEC Documents or (iv) any entry by the Company or any
Subsidiary into, or any amendment of, any employment, severance or termination
agreement with any such director or officer; or
(f) any action of the type described in Section 5.1 which had
such action been taken after the date of this Agreement would be in violation of
any such Section.
Without limiting the foregoing, since September 30, 2003,
there has not occurred any damage, destruction or loss whether or not covered by
insurances of any material asset of the Company or any of its Subsidiaries which
materially affects the use thereof.
11
Section 3.11 Contracts and Commitments.
(a) Except as set forth in the Company SEC Documents, Schedule
3.11(a) of the Company Disclosure Schedule sets forth a true, correct and
complete list of the following contracts (written or oral) to which the Company
or a Subsidiary is a party and under which the Company or any of its
Subsidiaries has any rights or obligations, contingent or otherwise, (including
every material amendment, modification or supplement to the foregoing): (i) any
contract that would be required to be filed as an exhibit to a Registration
Statement on Form S-1 under the Securities Act or an Annual Report on Form 10-K
under the Exchange Act if such registration statement or report was filed by the
Company with the SEC on the date hereof, (ii) partnership or joint venture
agreements, (iii) any material contracts of employment or consultancy with
employees or contracts with any non-employee representatives or agents, (iv) any
contracts or agreements which limit or restrict the Company or any Subsidiary or
any employee thereof from engaging in any business in any jurisdiction, (v)
agreements for the purchase, sale or lease of any properties or assets (other
than in the ordinary course of business), (vi) all bonds, debentures, notes,
loans, credit or loan agreements or commitments, mortgages, indentures or
guarantees or other agreements or contracts relating to the borrowing of money
involving amounts in excess of $1 million, (vii) agreements with unions,
independent contractor agreements requiring payments by the Company in excess of
$1 million and leased or temporary employee agreements requiring payments by the
Company in excess of $1 million, (viii) leases of any real or personal property
involving annual rent of $1 million or more, (ix) any contract with any
Governmental Authority, (x) license or royalty bearing contracts requiring
payments by or to the Company in excess of $200,000 per year except
off-the-shelf software, (xi) any contract providing for indemnification by the
Company or any Subsidiary against any charge of infringement of Intellectual
Property Rights, (xii) any contract with any director, officer or other
Affiliate of the Company or any of the Subsidiaries, (xiii) any voting,
"standstill" or similar agreement, (xiv) any contract requiring payment by or to
the Company in excess of $1 million per year that is not terminable by the
Company or its Subsidiaries on notice of 90 days or less, (xv) any contract
granting a right of first refusal or first negotiation, (xvi) all other
contracts, agreements or commitments involving payments made by or to the
Company or a Subsidiary of $1.0 million or more including customer contracts and
contracts with suppliers and (xvii) any commitment or agreement to enter into
any of the foregoing (individually, a "Material Contract" and collectively,
"Material Contracts"). Except for agreements or commitments disclosed in the
Company SEC Documents or on Schedule 3.11(a) of the Company Disclosure Schedule,
neither the Company nor any of its Subsidiaries is a party to any agreement or
commitment which is material to the business of the Company or any of its
Subsidiaries. The Company has heretofore made available to Parent complete and
correct copies of each Material Contract in existence as of the date hereof,
together with any and all material amendments and supplements thereto and
material "side letters" and similar documentation relating thereto. To the
Company's Knowledge, except as set forth on Schedule 3.11(a) of the Company
Disclosure Schedule, none of the contracts to which the Company or any of its
Subsidiaries is a party, and no bid outstanding as of the date of this Agreement
(if accepted or awarded), would result in a Loss Contract, in each case in the
reasonable judgment of the Company's management as of the date of this
Agreement. For purposes of this Agreement, "Loss Contract" means any contract
with a total contract value in excess of $250,000 that, to the Knowledge of the
Company, has a negative gross margin.
12
(b) Each Material Contract is valid, binding, in full force
and effect and enforceable in accordance with its terms with respect to the
Company and, to the Knowledge of the Company, with respect to each other party
thereto, except, in each case, to the extent that enforcement of rights and
remedies created by any Material Contracts are subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of
general application related to or affecting creditors' rights and to general
equity principles. There are no existing defaults or breaches of the Company
under any Material Contract and, to the Company's Knowledge, there are no such
defaults with respect to any third party to any Material Contract. The Company
has no Knowledge of any pending or threatened bankruptcy, insolvency or similar
proceeding with respect to any party to any such agreements. Schedule 3.11(b) of
the Company Disclosure Schedule identifies each Material Contract set forth
therein that, to the Knowledge of the Company, requires the consent of or notice
to the other party thereto to avoid any breach, default, or violation of such
contract, agreement or other instrument in connection with the transactions
contemplated by this Agreement.
Section 3.12 Information Supplied. The Proxy Statement and any other
document filed with the SEC by the Company in connection with the Merger
(including each amendment or supplement thereto) will not, at the time the Proxy
Statement or other document, as the case may be, is filed with the SEC, on the
date the Proxy Statement is first mailed to stockholders of the Company, at the
Effective Time, or, unless promptly corrected, at any time during the pendency
of the Company Stockholders' Meeting or at the time of the Company Stockholders'
Meeting, 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 therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement and such other documents filed with the SEC will
comply as to form and substance in all material respects with the requirements
of the Exchange Act. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to information supplied by or on behalf
of Parent or Purchaser for inclusion in the Proxy Statement.
Section 3.13 Litigation. Except as set forth in the Company SEC Documents
or on Schedule 3.13 of the Company Disclosure Schedule, there is no suit,
action, claim, grievance, investigation, indictment or information, or
administrative, arbitration or other proceeding pending or, to the Knowledge of
the Company, threatened against or affecting the Company or any of its
Subsidiaries nor is there any judgment, decree, injunction, rule or order of any
Governmental Authority or arbitrator outstanding against the Company or any of
its Subsidiaries, including, in each case, in connection with an alleged
violation of applicable Laws relating to (i) the export of goods and services to
any foreign jurisdiction against which the United States or the United Nations
maintains sanctions or export controls, including applicable regulations of the
US Department of Commerce and the US Department of State ("Export Control
Requirements"), or (ii) improper payments, including the Foreign Corrupt
Practices Act.
Section 3.14 Employee Benefits. (a)(i) Schedule 3.14(a)(i) of the Company
Disclosure Schedule sets forth a true, complete and correct list of (A) each
"employee benefit plan" which is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and provides benefits to any current
or former officer or employee of the Company or any Subsidiary, (B) each other
plan, policy or agreement which provides compensation or benefits of any kind or
description (whether in cash or in kind or in Company Common Stock or other
13
securities) to any current or former officer, employee or director of the
Company or any Subsidiary who performs or performed services for the Company or
a Subsidiary primarily in the United States and under which the Company or any
Subsidiary has any material liability (whether contingent or otherwise), and (C)
any employment agreement, change in control agreement, severance agreement or
consulting or similar agreement with any current or former officer, employee,
director or other individual who provides or provided services to the Company or
a Subsidiary primarily in the United States and under which the Company or any
Subsidiary has any material liability (each a "U.S. Benefit Plan" and
collectively the "U.S. Benefit Plans"). The Company has made available a true,
complete and current copy of each U.S. Benefit Plan to Parent together with a
copy of the most recent summary plan description which the Company was required
to provide participants in accordance with ERISA and a copy of any trust
agreement or insurance contract or other funding arrangement related to such
plan.
(ii) Schedule 3.14(a)(ii) of the Company Disclosure
Schedule sets forth a true, complete and correct list of (A) each "employee
benefit plan" which is described in Section 3(3) of ERISA and provides benefits
to any current or former officer or employee of the Company or any Subsidiary
who provides or provided services to the Company or a Subsidiary primarily
outside the United States, (B) each other plan, policy or agreement which
provides compensation or benefits of any kind or description (whether in cash or
in kind or in Company Common Stock or other securities) to any current or former
officer, employee or director of the Company or any Subsidiary who performs or
performed services for the Company or a Subsidiary primarily outside the United
States and under which the Company or any Subsidiary has any material liability
(whether contingent or otherwise), and (C) any employment agreement, change in
control agreement, severance agreement or consulting or other agreement with any
current or former officer, employee, director or other individual who provides
or provided services to the Company or a Subsidiary primarily outside the United
States and under which the Company or any Subsidiary has any material liability,
except in the case of (A), (B) and (C) for such plans and arrangements which are
established and maintained by a Governmental Authority or required by the Law of
the applicable jurisdiction (each a "Non-U.S. Benefit Plan" and collectively the
"Non-U.S. Benefit Plans"). The Company has made available a true, complete and
current copy of each Non-U.S. Benefit Plan to Parent together with a copy of any
trust agreement or insurance contract or other funding arrangement related to
such plan.
(b) No U.S. Benefit Plan is subject to Title IV of ERISA or
Section 412 of the Code, and no U.S. Benefit Plan is a multiemployer plan as
defined in Section 3(37) of ERISA or a plan which is subject to Section 4063 or
Section 4064 of ERISA or described in Section 413(c) of the Code or is a
multiple employer welfare plan which is described in Section 3(40) of ERISA.
Neither the Company nor any Subsidiary nor any Person which would be treated as
a single employer together with the Company or a Subsidiary under Section 414 of
the Code has any material liability (whether contingent or otherwise) with
respect to any employee benefit plan which is subject to Title IV of ERISA.
(c) There are two U.S. Benefit Plans which are intended to
satisfy the qualification requirements under Section 401(a) of the Code, the BHA
Group Holdings, Inc. Amended and Restated Employee Stock Purchase Plan and the
BHA Group Holdings, Inc. Profit Sharing Plan. Each such plan as in effect is the
subject to a favorable determination letter from the Internal Revenue Service.
To the Knowledge of the Company, no event has occurred since
14
the date of each such letter that is reasonably likely to adversely affect the
qualification of such plan under Section 401(a) of the Code, and each such plan
satisfies the non-discrimination and other testing requirements applicable to
such plan under the Code.
(d) There have been no prohibited transactions under Section
4975 of the Code or Section 406 of ERISA with respect to any U.S. Benefit Plan
which is subject to the Code or ERISA or any trust which is a part of any such
plan which have not been timely and properly corrected in full and for which any
applicable penalties or, if applicable, penalties and interest have not been
paid in full, except for any such transactions that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
the Company.
(e) No U.S. Benefit Plan provides healthcare continuation
benefits described in Section 3(1) of ERISA following a termination of
employment except for the healthcare continuation coverage required under Part 6
of Title I of ERISA, and the liabilities of any other U.S. Benefit Plan which
provides any other benefits described in Section 3(1) of ERISA following a
termination of employment either are fully provided for or otherwise fully
satisfied by one or more fully paid up insurance policies or annuity contracts
with a person unaffiliated with the Company or any Subsidiary or are reflected
on the most recent consolidate balance sheet filed or incorporated by reference
into the Company SEC Documents.
(f) Any interests in any U.S. Benefit Plan which are required
to be registered under the Securities Act have been timely and properly so
registered and any related prospectus has been properly prepared and timely
delivered to participants in such plan.
(g) To the Company's Knowledge, any individual who performs or
who has performed services for the Company or any Subsidiary and who is or was
not classified as an employee of the Company or such Subsidiary on its payroll
and other records for income tax or other purposes has been or was properly
classified as an individual who is not an employee of the Company or any
Subsidiary.
(h) Each U.S. Benefit Plan and each Non-U.S. Benefit Plan has
been maintained in all material respects in accordance with its terms and with
all applicable provisions of applicable Law, and all reporting and disclosure
requirements under ERISA and the Code applicable to each U.S. Benefit Plan and
any similar requirements under applicable Law with respect to each Non-U.S.
Benefit Plan have been satisfied in all material respects.
(i) All contributions, premiums and other payments that are
required to have been made with respect to any U.S. Benefit Plan or Non-U.S.
Benefit Plan as of the date of this Agreement have been made, and all such
contributions, premiums and other payments for which the Company or a Subsidiary
has accrued an obligation to make as of the date of this Agreement but which are
not due on or before such date have been reflected on the most recent
consolidated balance sheet filed or incorporated by reference into the Company
SEC documents. All contributions, premiums and other payments required under
applicable Law to be made for the benefit of current or former employees of the
Company or any Subsidiary with respect to any plan or program established by any
Governmental Authority have been made in full when due.
15
(j) All amendments and actions required to bring the U.S.
Benefit Plans and Non-U.S. Benefit Plans into conformity in all material
respects with the applicable provisions of the Code, ERISA or other applicable
Law have been made or taken except to the extent that such amendments or actions
are not required by Law to be made or taken until a date after the Effective
Time or would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company.
(k) The Company has made available to Parent a copy of the
most recently filed Annual Report (Form 5500) and all related exhibits and
reports for each U.S. Benefit Plan which is subject to ERISA and has made
available to Parent a copy of the most recently filed report (other than such an
Annual Report) with any Governmental Authority with respect to any U.S. Benefit
Plan and any Non-U.S. Benefit Plan.
(l) Except as set forth on Schedule 3.14(l) of the Company
Disclosure Schedule, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated by this Agreement will (either
alone or in conjunction with any other event) either (i) result in, cause the
acceleration and vesting or delivery of, or increase the amount or value of, any
payment or right or benefit to or for any current or former officer, employee or
director or independent contractor of the Company of any Subsidiary or (ii)
result in any "excess parachute payment" within the meaning of Section 280G of
the Code.
(m) There are no pending or, to the Company's Knowledge,
threatened claims with respect to a U.S. Benefit Plan or a Non-U.S. Benefit Plan
(other than routine and reasonable claims for benefits made in the ordinary
course of the plan's operations) or with respect to the terms and conditions of
employment or termination of employment of any current or former officer,
employee or director or independent contractor of the Company or any Subsidiary
which would reasonably be expected to result in any material liability to the
Company or a Subsidiary, and no audit or other investigation by any domestic or
former government or governmental agency is pending or, to the Knowledge of the
Company, has been proposed with respect to any U.S. Benefit Plan or Non-U.S.
Benefit Plan.
(n) Except as disclosed on Schedule 3.14(n) of the Company
Disclosure Schedule, (i) none of the United States employees of the Company or
any Subsidiary is represented in his or her capacity as an employee of the
Company or any Subsidiary by any labor organization or works council or similar
representative ("Labor Organization"), and to the Knowledge of the Company, none
of the employees of the Company or any Subsidiary outside the United States is
represented in his or her capacity as an employee of the Company or any
Subsidiary by any Labor Organization and (ii) neither the Company nor any
Subsidiary has recognized any labor organization, nor has any labor organization
been elected as the collective bargaining agent of any employees, nor has the
Company or any Subsidiary entered into any collective bargaining agreement or
union contract recognizing any labor organization as the bargaining agent of any
employees. To the extent that any consultation or other obligations with respect
to any labor organizations arise as a result of or are required to effect the
transactions contemplated by this Agreement, either under applicable Law or
contract, the Company will fully satisfy all such obligations prior to the
Effective Time. To the Knowledge of the Company, there is no union organization
activity involving any employees pending or threatened, nor has there ever been
union representation involving any employees. There is no picketing pending or,
16
to the Knowledge of the Company, threatened, and there are no strikes,
slowdowns, work stoppages, lockouts, arbitrations or other similar labor
disputes involving any of the employees pending or, to the Knowledge of the
Company, threatened. There are no complaints, charges or claims against the
Company or any Subsidiary pending or, to the Knowledge of the Company,
threatened that would reasonably be expected to be brought or filed with any
Governmental Authority or arbitrator based on, arising out of, in connection
with, or otherwise relating to the employment or termination of employment of,
or failure by the Company or any Subsidiary to employ, any individual. The
Company and each Subsidiary are in compliance in all material respects with all
applicable Laws relating to the employment of labor, including all such Laws
relating to wages, hours, the Worker Adjustment and Retraining Notification Act
and any similar "mass layoff" or "plant closing" law ("WARN"), collective
bargaining, discrimination, civil rights, safety and health, workers'
compensation and the collection and payment of tax withholdings and social
security taxes and any similar tax. There has been no "mass layoff" or "plant
closing" (as defined by WARN) with respect to the Company or any Subsidiary
since October 1, 2003.
Section 3.15 Intellectual Property.
(a) Schedule 3.15(a) of the Company Disclosure Schedule sets
forth a true and complete list of the following items which the Company and/or
its Subsidiaries own in whole or in part and/or have a valid claim of ownership
in whole or in part (such as a contract right of assignment from an employee or
independent contractor) (hereinafter referred to as the "Intellectual Property
Rights"): (i) all United States and foreign patents and applications therefor;
(ii) all patentable inventions which have not yet become the subject of a patent
application; (iii) all United States and foreign trademark, trade name, service
xxxx, collective xxxx, and certification xxxx registrations and applications
therefor at the federal, state, local or foreign level; (iv) all material
trademarks, trade names, service marks, collective marks, and certification
marks which have been used by the Company or its Subsidiaries in commerce at any
time in the last five years; (v) all United States and foreign copyright
registrations and applications therefor; and (vi) all domain names, URLs and
Internet websites. Schedule 3.15(a) of the Company Disclosure Schedule also sets
forth a true and complete list of all items described in subsections (i) through
(iv) of the previous sentence in which the Company or any of its Subsidiaries
owns a license or otherwise has a right to use (the "Licensed Rights"), and
which are material to the conduct of the business of the Company and its
Subsidiaries taken as a whole. A copy of the written agreements with respect to
the Licensed Rights has been made available to the Parent. Prior to the date
hereof, the Company has provided Parent with reasonable access to the Company's
and its Subsidiaries' material trade secrets, proprietary information, databases
and data. The Company represents and warrants that, except as stated on Schedule
3.15(a) of the Company Disclosure Schedule, (i) the Intellectual Property Rights
are free and clear of any liens, claims or encumbrances, are not subject to any
license (royalty bearing or royalty free); (ii) the Licensed Rights are free and
clear of any liens, claims, encumbrances, royalties or other obligations; and
(iii) the Intellectual Property Rights and the Licensed Rights are all those
material rights necessary to the conduct of the business of the Company and its
Subsidiaries, taken as a whole. The validity of the Intellectual Property Rights
and exclusive title thereto and validity of the Licensed Rights, (i) have not
been questioned, since May 1, 2002, in any suit, action, claim or
administrative, arbitration or other proceeding; (ii) are not being questioned
in any pending suit, action, claim or administrative, arbitration or other
proceeding; and (iii) to the
17
Knowledge of the Company, are not the subject(s) of any threatened or proposed
suit, action, claim or administrative, arbitration or other proceeding. To the
Knowledge of the Company, the Intellectual Property Rights are valid,
enforceable and in full force and effect. To the Knowledge of the Company, no
Person other than the Company or any Subsidiary has or has made any claim of
ownership or right to use any of the Intellectual Property Rights that are owned
by the Company and/or its Subsidiaries, other than those Persons who are
authorized licensees under the Intellectual Property Rights. Except as disclosed
on Schedule 3.15(a) of the Company Disclosure Schedule, neither the Company nor
any Subsidiary has received any written notices or claims which allege
infringement or misappropriation of any patents, trademarks, trade names,
service marks, copyrights or other intellectual property rights owned or
licensed by any other Person. To the Knowledge of the Company, the business of
each of the Company and its Subsidiaries, as presently conducted, does not
materially conflict with and has not been alleged to materially conflict with
any patents, trademarks, trade names, service marks, copyrights or other
intellectual property rights of others. The consummation of the transactions
contemplated hereby will not result in the loss or impairment of any of the
material Intellectual Property Rights or the Company's or it's Subsidiaries'
right to use any of the material Licensed Rights. To the Knowledge of the
Company, there are no third parties using any of the Intellectual Property
Rights material to the business of the Company or its Subsidiaries as presently
conducted.
(b) Schedule 3.15(b) of the Company Disclosure Schedule
contains a true and complete list of all material computer programs and software
and related data necessary to perform, as presently performed, the specific
applications and operations which are material to the operation of the business
as presently conducted by each of the Company and its Subsidiaries, including
but not limited to products, manufacturing processes and internal business
operations, excluding off the shelf software (the "Business Technology"). Part 1
of Schedule 3.15(b) of the Company Disclosure Schedule sets forth all Business
Technology owned by the Company and/or its Subsidiaries and used in the business
of the Company and its Subsidiaries; Part 2 of Schedule 3.15(b) of the Company
Disclosure Schedule sets forth all Business Technology licensed by the Company
and/or its Subsidiaries and used in the business of the Company and its
Subsidiaries. All Business Technology is either exclusively owned by the Company
and/or its Subsidiaries or is licensed pursuant to a written licensing agreement
by or on behalf of the Company and/or its Subsidiaries, which licensing
agreement has been made available to the Parent. To the Knowledge of the
Company, each such license agreement is a valid and binding agreement and is in
full force and effect with respect to the Company or its Subsidiaries, as the
case may be. To the Knowledge of the Company, none of the Company, its
Subsidiaries, or any other party thereto is in default under the terms of any
such licensing agreement. The Company has not received notice of any pending or
threatened bankruptcy, insolvency or similar proceeding with respect to any
other party to any such licensing agreement. Unless otherwise indicated on
Schedule 3.15(b) of the Company Disclosure Schedule, the consummation of the
transactions contemplated by this Agreement will not result in the loss or
impairment of the right to utilize any of the Business Technology licensed by
the Company and/or its Subsidiaries and used in the business of the Company or
its Subsidiaries (i) for the uses in which it is employed and (ii) at a site
other than the site at which it is currently utilized, in each case without the
necessity of obtaining consent from or paying a fee to another Person. There are
no infringement suits, actions or proceedings pending or, to the Knowledge of
the
18
Company, threatened against the Company or any Subsidiary with respect to any
Business Technology owned or licensed by the Company or any Subsidiary.
Section 3.16 Voting Requirements. The affirmative vote of the holders of a
majority of the voting power represented by the outstanding shares of Company
Common Stock entitled to vote at the Company Stockholders Meeting to adopt this
Agreement (the "Company Stockholder Approval") is the only vote of the holders
of any class or series of the Company's capital stock necessary to adopt this
Agreement and approve the Merger.
Section 3.17 Brokers. No broker, investment banker, financial advisor or
other Person, other than the Company Financial Advisors, the fees, commissions
and expenses of which will be paid by the Company, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission, or the
reimbursement of expenses, in connection with the transactions contemplated by
this Agreement, based upon arrangements made by or on behalf of the Company. The
Company has made available to Parent correct and complete copies of the
Company's engagement letters with each of the Company Financial Advisors and any
other agreements with the Company Financial Advisors pursuant to which fees or
expenses are payable in connection with the transactions contemplated by this
Agreement (the "Engagement Letters").
Section 3.18 Transactions with Affiliates. Except as set forth on Schedule
3.18 of the Company Disclosure Schedule (other than compensation and benefits
received in the ordinary course of business consistent with past practice as an
employee or director of the Company or its Subsidiaries) (collectively, the
"Affiliate Transactions"), no director, officer or other "affiliate" or
"associate" of the Company or any Subsidiary or any entity in which, to the
Knowledge of the Company, any such director, officer or other affiliate or
associate, owns any beneficial interest (other than a publicly held corporation
whose stock is traded on a national securities exchange or in the
over-the-counter market and less than 1% of the stock of which is beneficially
owned by any such persons) has any interest in: (i) any contract or agreement
with, or relating to the business or operations of Company or any Subsidiary;
(ii) any loan, agreement or contract for or relating to indebtedness of the
Company or any Subsidiary; or (iii) any property (real, personal or mixed),
tangible, or intangible, used or currently intended to be used in, the business
or operations of the Company or any Subsidiary. For the purposes of this
Agreement the terms "associate" and "affiliate" shall have the same meanings for
such terms as set forth in Rule 12b-2 promulgated under the Exchange Act.
Section 3.19 Amendment to Rights Agreement.
(a) The Board of Directors of the Company has taken all
necessary action to irrevocably amend the Rights Agreement so that none of the
execution or delivery of this Agreement, the Merger or the transactions
contemplated by this Agreement will cause (i) the Company Rights to become
exercisable under the Rights Agreement, (ii) Parent or Purchaser or any of their
Affiliates to be deemed an "Acquiring Person" (as defined in the Rights
Agreement) or (iii) the "Stock Acquisition Date" (as defined in the Rights
Agreement) to occur upon any such event.
19
(b) The "Distribution Date" (as defined in the Rights
Agreement) has not occurred.
Section 3.20 Disclosure. To the Knowledge of the Company, no representation
or warranty made by the Company in this Agreement contains an untrue statement
of a material fact or omits to state a material fact required to be stated
herein or therein or necessary to make the statements contained herein or
therein not misleading.
Section 3.21 Title to Properties. Each of the Company and its Subsidiaries (i)
has good and marketable title to all properties and other assets which are
reflected on the most recent consolidated balance sheet of the Company included
in the Company SEC Documents as being owned by the Company or one of its
Subsidiaries (or acquired after the date hereof) and which are, individually or
in the aggregate, material to the Company's business or financial condition on a
consolidated basis free and clear of all Encumbrances except (x) statutory liens
securing payments not yet due, (y) security interests, mortgages and pledges
that are disclosed in the Company SEC Documents and (z) such other imperfections
or irregularities of title or other Encumbrances that, individually or in the
aggregate, do not and would not reasonably be expected to materially affect the
use of the properties or assets subject thereto or otherwise materially impair
business operations as presently conducted or as currently proposed by the
Company's management to be conducted, and (ii) is the lessee or sublessee of all
leasehold estates and leasehold interests reflected in the Company SEC Documents
(or acquired after the date hereof) which are, individually or in the aggregate,
material to the Company's business or financial condition on a consolidated
basis (other than any such leaseholds whose scheduled terms have expired
subsequent to the date of such Company SEC Documents). Schedule 3.21 of the
Company Disclosure Schedule sets forth a correct and complete list of all real
property owned or leased by the Company and its Subsidiaries as of the date of
this Agreement which are, individually or in the aggregate, material to the
Company's business.
Section 3.22 Insurance, Claims and Warranties.
(a) All material insurance policies of the Company and its
Subsidiaries (the "Policies") are in full force and effect. Neither the Company
nor any of its Subsidiaries is in material breach or default, and neither the
Company nor any of its Subsidiaries have taken any action or failed to take any
action which would constitute such a material breach or default, or permit
termination or modification or any of the Policies. No written notice of
cancellation or termination has been received by the Company with respect to any
such Policy (except with respect to Policies that have been replaced with
similar policies). None of the Merger or the transactions contemplated by this
Agreement will cause the Policies not to remain in full force and effect, and
the Policies will not terminate or lapse by reason of any such transaction.
(b) Schedule 3.22(b) of the Company Disclosure Schedule sets
forth, as of the date of this Agreement, a correct and complete list and summary
description of all material claims, liabilities or obligations arising since
October 1, 2003, from, or alleged to arise from, any injury to any Person
(including current and former employees) or property as a result of the
manufacture, sale, ownership, possession or use of any product of the Company or
any of its Subsidiaries. All such existing claims are fully covered by
insurance, except such claims that,
20
individually or in the aggregate, have not had or would not reasonably be likely
to have a Material Adverse Effect on the Company.
(c) Schedule 3.22(c) of the Company Disclosure Schedule
contains a complete and correct list of all written warranties, warranty
policies, service agreements and maintenance agreements of the Company and any
of its Subsidiaries in effect as of the date of this Agreement that provide for
warranty coverage for a period in excess of 12 months. All products of each of
the Company and its Subsidiaries manufactured, processed, assembled,
distributed, shipped or sold and any services rendered in the conduct of the
business of the Company or any of its Subsidiaries have been in material
conformity with all applicable contractual commitments and all express or
implied warranties, except as have not had or would not reasonably be likely to
have a Material Adverse Effect on the Company.
Section 3.23 Opinion of Financial Advisors. The Company has received the
opinion of each of the Company Financial Advisors, dated the date of this
Agreement, to the effect that, as of such date, the Merger Consideration is
fair, from a financial point of view, to the holders of the Company Common Stock
(other than Parent and any of its Affiliates).
Section 3.24 Taxes. (a) Each of the Company and its Subsidiaries has timely
filed or has caused to be filed all tax returns and reports required to be filed
by it and all such returns and reports are complete and correct in all material
respects, or requests for extensions to file such returns or reports have been
timely filed, granted and have not expired, except to the extent that such
failures to file, to be complete or correct or to have extensions granted that
remain in effect, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on the Company. The Company and each
of its Subsidiaries has paid or caused to be paid (or the Company has paid on
its behalf) all Taxes that are material in amount which are (i) shown as due on
such returns or reports, (ii) otherwise due and owing, or (iii) claimed or
asserted by any taxing authority to be due, unless such Taxes are being
contested in good faith and adequate reserves have been established in the
financial statements included in the Company SEC Documents for such contested
Taxes. The most recent financial statements contained in the Company SEC
Documents reflect an adequate reserve for all unpaid Taxes that are material in
amount of the Company and its Subsidiaries for all taxable periods and portions
thereof accrued through the date of such financial statements. The unpaid Taxes
of the Company and its Subsidiaries for the current taxable period do not exceed
the reserve for Tax liability set forth in the most recent financial statements
contained in the Company SEC Documents, such reserve being adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of the Company and its Subsidiaries in filing their tax returns and
reports.
(b) No deficiencies, audit examinations, refund litigation,
proposed adjustments, claims or matters in controversy for any Taxes have been
threatened, proposed, asserted or assessed in writing against the Company or any
of its Subsidiaries that are not adequately reserved for, except for
deficiencies, audit examinations, refund litigation, proposed adjustments,
claims or matters in controversy that individually or in the aggregate has not
had and would not reasonably be expected to have a Material Adverse Effect on
the Company. All assessments for Taxes due and owing by the Company or any of
its Subsidiaries with respect to completed and settled examinations or concluded
litigation have been paid.
21
(c) There are no liens for Taxes that are material in amount
(other than for current Taxes not yet due and payable) on the assets of the
Company or any of its Subsidiaries. Neither the Company nor any of its
Subsidiaries is bound by any agreement with respect to Taxes.
(d) No deduction of any amount that would otherwise be
deductible with respect to tax periods ending on or before the Effective Time
could be disallowed under Section 162(m) of the Code, except any disallowances
under Section 162(m) of the Code that alone or with other such disallowances has
not had and would not reasonably be expected to have a Material Adverse Effect
on the Company.
(e) Neither the Company nor any of its Subsidiaries has
constituted either a "distributing corporation" or a "controlled corporation" in
a distribution of stock qualifying for tax-free treatment under Section 355 of
the Code (x) in the two years prior to the date of this Agreement or (y) in a
distribution which could otherwise constitute part of a "plan" or "series of
related transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the Merger.
(f) Neither the Company nor any of its Subsidiaries has been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.
(g) Neither the Company nor any of its Subsidiaries (A) has
been a member of an affiliated group filing a consolidated federal income tax
return (other than a group the common parent of which was the Company) or (B)
has any liability for the Taxes of any person (other than any of the Company and
its Subsidiaries) under Reg. ss. 1.1502-6 (or any similar provision of state,
local, or foreign law), as a transferee or successor, by contract, or otherwise.
(h) Neither the Company nor any of its Subsidiaries has waived
any statute of limitations in respect of Taxes or agreed to any extension of
time with respect to a Tax assessment or deficiency.
(i) Neither the Company nor any of its Subsidiaries has made
an election under Section 341(f) of the Code.
(j) The Company and each Subsidiary has withheld and paid over
to the relevant taxing authority all Taxes required to have been withheld and
paid in connection with payments to employees, independent contractors,
creditors, stockholders or other third parties.
(k) Schedule 3.24 of the Company Disclosure Schedule sets
forth with reasonable specificity (i) each state in the United States and
foreign country in which the Company or any of its Subsidiaries is required or
has been required to file a tax return or report or pay Taxes, (ii) all income
tax returns and reports filed or due to be filed applicable to the one year
period ending on the date hereof and (iii) all correspondence with any Tax
authorities (including all audits, notices, and requests for information from or
to Tax authorities) since January 1, 2003. No claims have ever been made by a
taxing authority in a jurisdiction where any of the Company and each of its
Subsidiaries does not file a tax return that it is, or may be subject to,
taxation in that jurisdiction, except for claims which, individually or in the
aggregate,
22
has not had and would not reasonably be expected to have a Material Adverse
Effect on the Company.
Section 3.25 Environmental Compliance and Disclosure. Except as set forth
on Schedule 3.25 of the Company Disclosure Schedule:
(a) Each of the Company and its Subsidiaries possesses, and is
in compliance in all material respects with, all Permits and has filed all
notices that are required under, all Environmental Laws (as defined below)
applicable to the Company or any Subsidiary, and the Company and each of its
Subsidiaries is in material compliance with all applicable limitations,
restrictions, conditions, standards, prohibitions and obligations contained in
those Laws or contained in any Law, Permit or demand letter issued, entered,
promulgated or approved thereunder, including, but not limited to, with respect
to the use, storage, treatment, manufacture, generation, disposal and handling
of Hazardous Materials (as defined below);
(b) Neither the Company nor any Subsidiary has received
written notice of actual or threatened liability under the Federal Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") or any similar
state or local statute or ordinance from any governmental agency and, to the
Knowledge of the Company, there are no facts or circumstances which could form
the basis for the assertion of any material claim against the Company or any
Subsidiary under any Environmental Laws including, without limitation, CERCLA or
any similar local, state or foreign Law with respect to any on-site or off-site
location;
(c) No Hazardous Materials have ever been, or are being,
spilled, released, discharged, disposed, placed or otherwise caused to become
located in buildings or the soil, sub-surface strata, air, water or ground water
under, or upon any plant, facility, site, area or property currently or
previously owned or leased by the Company or any Subsidiary or on which the
Company or any Subsidiary is conducting or has conducted its business or
operations, by the Company or its Subsidiaries, except to the extent that such
spillages, releases, discharges, disposals, placements or otherwise would not
reasonably be expected to have a Material Adverse Effect on the Company;
(d) Neither the Company nor any Subsidiary has entered into or
agreed to any consent decree or order, and neither the Company nor any
Subsidiary is subject to any judgment, decree or judicial or administrative
order relating to compliance with, or the cleanup of Hazardous Materials under,
any applicable Environmental Laws;
(e) Neither the Company nor any Subsidiary has been subject to
any administrative or judicial proceeding pursuant to and, to the Knowledge of
the Company, has not been alleged to be in violation of, applicable
Environmental Laws or regulations either now or any time during the past three
years;
(f) Neither the Company nor any Subsidiary has received
written notice that it is subject to any claim, liability, loss, damage or
expense of whatever kind or nature, contingent or otherwise, incurred or imposed
or based upon any provision of any Environmental Law, including claims for
personal property damage, and arising out of any act or omission of the
23
Company or any Subsidiary, its employees, agents or representatives or, to the
Knowledge of the Company, arising out of the ownership, use, control or
operation by the Company or any Subsidiary of any plant, facility, site, area or
property (including any plant, facility, site, area or property currently or
previously owned or leased by the Company or any Subsidiary) or any other area
on which the Company or any Subsidiary is conducting or has conducted its
business or operations from which any Hazardous Materials were released into the
environment (the term "release" meaning any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment, and the term "environment" meaning any surface
or ground water, drinking water supply, soil, surface or subsurface strata or
medium, or the ambient air) and, to the Knowledge of the Company, there is no
basis for any such notice and none are threatened;
(g) The Company has heretofore made available to Parent true,
correct and complete copies of all files of the Company and each Subsidiary
relating to environmental matters. Neither the Company nor any Subsidiary has
paid any fines, penalties or assessments within the last three years with
respect to environmental matters; and
(h) To the Knowledge of the Company, none of the assets owned
by the Company or any Subsidiary or any real property owned or leased by the
Company or any Subsidiary contain any friable asbestos, regulated PCBs or
underground storage tanks. To the Company's Knowledge, the Company has not (i)
manufactured or distributed or otherwise incorporated into any product it
manufactured or distributed, nor (ii) ever acquired any company that
manufactured or distributed or otherwise incorporated into any product it
manufactured or distributed, any asbestos or asbestos-containing materials.
As used in this Section 3.25, the term "Environmental Laws"
means any and all Laws of the United States, any foreign jurisdiction in which
the Company is located or conducts any business, or political subdivision
thereof, for the protection of the environment or human health and safety,
including decrees, regulations, orders and permits issued by any Governmental
Authority under such laws, and shall include without limitation the
Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C.
9601 et seq.), the Clean Air Act (42 U.S.C.ss.ss.7401 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C.ss.ss.6901 et seq.), the Clean Water Act
(33 U.S.C.ss.ss.1251 et seq.), the Occupational Safety and Health Act (29
U.S.C.ss.ss.651 et seq.), the Toxic Substance Control Act (15 U.S.C.ss.ss.2601
et seq.), and the Safe Drinking Water Act (42 U.S.C.ss.ss.300f et seq.), as well
as any and all state laws that relate to pollution, contamination of the
environment, human health, or safety, and all present regulations, orders and
permits issued thereunder, including common law.
As used in this Section 3.25, the term "Hazardous Materials"
means any waste, pollutant, hazardous substance, toxic, radioactive, ignitable,
reactive or corrosive substance, hazardous waste, special waste, controlled
waste, industrial substance, by-product, process intermediate product or waste,
petroleum or petroleum-derived substance or waste, chemical liquids or solids,
liquid or gaseous products, or any constituent of any such substance or waste or
any other material which is regulated pursuant to an Environmental Law.
Section 3.26 State Takeover Statutes. No "fair price," "moratorium,"
"control share acquisition" or other similar antitakeover statute or regulation
enacted under state or federal laws
24
in the United States (with the exception of Section 203 of the DGCL) applicable
to the Company is applicable to the Merger or the other transactions
contemplated by this Agreement or the Merger. The action of the Board of
Directors of the Company in approving this Agreement (and the other transactions
contemplated by this Agreement and the Merger) is sufficient to render
inapplicable to this Agreement (and the other transactions contemplated by this
Agreement and the Merger) the restrictions on "business combinations" (as
defined in Section 203 of the DGCL) as set forth in Section 203 of the DGCL.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser each represent and warrant to the Company
as follows:
Section 4.1 Organization, Standing and Corporate Power. Each of Parent and
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is organized and has the
requisite corporate power and authority to carry on its business as now being
conducted.
Section 4.2 Authority. Each of Parent and Purchaser has the requisite
corporate power and corporate authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of each of Parent and Purchaser. This Agreement has been duly executed and
delivered by each of Parent and Purchaser and, assuming the due authorization,
execution and delivery by each of the other parties hereto, this Agreement
constitutes the legal, valid and binding obligations of each of Parent and
Purchaser, enforceable against it in accordance with its terms subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
Section 4.3 No Conflicts. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated by this Agreement,
and compliance with the provisions hereof will not, conflict with, or result in
any violation of or default under (with or without notice or lapse of time or
both), or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of a benefit under, or result in the creation of any
Encumbrance upon any of the properties or assets of Parent or any of its
Subsidiaries under (i) the organizational documents of Parent or any of its
Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise,
license or similar authorization applicable to Parent or any of its Subsidiaries
or their respective properties or assets or (iii) subject to the governmental
filings and other matters referred to in Section 4.4, any Law applicable to
Parent or any of its Subsidiaries or their respective properties or assets,
other than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights, losses or Encumbrances that, individually or in
the aggregate, would not reasonably be expected to prevent or materially delay
the ability of Parent
25
or Purchaser to consummate the transactions contemplated by this Agreement (a
"Parent Material Adverse Effect").
Section 4.4 Consents; Approvals. No license, permit, consent, approval,
order or authorization of, action by or in respect of, or registration,
declaration or filing with, any Governmental Authority is required by or with
respect to Parent or any of its Subsidiaries in connection with the execution
and delivery of this Agreement by Parent or Purchaser or the consummation by
Parent or Purchaser of the transactions contemplated by this Agreement, except
for (i) the filing of a premerger notification and report form by Parent and
Purchaser under the HSR Act and any applicable filings and approvals under
similar Foreign Antitrust Laws; (ii) the filing with the SEC of any reports
under the Exchange Act and the rules of the New York Stock Exchange as may be
required in connection with this Agreement and the transactions contemplated by
this Agreement; (iii) the filing of: (A) the Certificate of Merger with the
Secretary of State of the State of Delaware and (B) appropriate documents with
the relevant authorities of other states in which Parent and Purchaser are
qualified to do business; and (iv) such other consents, approvals, orders or
authorizations the failure of which to be made or obtained, individually or in
the aggregate, have not had and would not reasonably be expected to have a
Parent Material Adverse Effect.
Section 4.5 Information Supplied. The information supplied by Parent and
Purchaser for inclusion in the Proxy Statement will not, on the date the Proxy
Statement is first mailed to stockholders of the Company, at the Effective Time,
or, unless promptly corrected, at any time during the pendency of the Company
Stockholders' Meeting or at the time of the Company Stockholders' Meeting,
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
therein, in light of the circumstances under which they are made, not
misleading. Notwithstanding the foregoing, Parent and Purchaser make no
representation or warranty with respect to information supplied by or on behalf
of the Company for inclusion in the Proxy Statement.
Section 4.6 Financial Capacity. Parent has available, and on the Effective
Date will have available, sufficient funds, available lines of credit or other
sources of immediately available funds to enable it to pay the Merger
Consideration on the terms and conditions of this Agreement.
ARTICLE V
COVENANTS
Section 5.1 Conduct of Business by the Company. Except as expressly
permitted by this Agreement, as set forth in Schedule 5.1 of the Company
Disclosure Schedule or with the prior written consent of Parent and Purchaser,
which consent shall not be unreasonably withheld or delayed, from the date
hereof to the Effective Time, the Company shall, and shall cause its
Subsidiaries to, (i) carry on their respective businesses in the ordinary course
consistent with past practice, (ii) use reasonable best efforts to: preserve
intact their business organizations, to keep available the services of their
current officers and employees and to preserve the current relationships of the
Company and its Subsidiaries with customers, suppliers and other persons with
which the Company or its Subsidiaries has business relations, and (iii) comply
with all
26
applicable Laws wherever its business is conducted, including the timely filing
of all reports, forms or other documents with the SEC required pursuant to the
Securities Act or the Exchange Act. Without limiting the generality of the
foregoing, during the period from the date hereof to the Effective Time, except
as expressly contemplated by this Agreement or with the prior written consent of
Parent and Purchaser, which consent shall not be unreasonably withheld or
delayed, the Company shall not, and shall not permit any of its Subsidiaries to:
(a) amend the Company Certificate of Incorporation or the
Company Bylaws;
(b) authorize for issuance, issue, sell, dispose of, pledge or
otherwise encumber, deliver, grant any options for, or otherwise agree or commit
to issue, sell or deliver any shares of its capital stock or any securities
convertible into shares of its capital stock, or any rights, warrants or options
to acquire any such shares or convertible securities or any stock appreciation
rights, phantom stock plans or stock equivalents, except pursuant to and in
accordance with the terms of convertible securities and options of the Company
identified on Schedule 3.2(a) of the Company Disclosure Schedule and outstanding
as of the date hereof;
(c) split, combine or reclassify any shares of its capital
stock, declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock or purchase, redeem or otherwise acquire any shares of its own capital
stock or of any of its Subsidiaries, except for (i) the purchase from time to
time by the Company of Company Common Stock in the ordinary course of business
consistent with past practice in connection with the cashless exercise of
options or the funding of employee incentive plans, profit sharing plans or
other benefit plans of the Company consistent in timing and amount with past
practice, (ii) the payment by the Company of its regular annual dividend in an
amount not to exceed $0.50 per share of Company Common Stock and (iii) dividends
and distributions (including liquidating distributions) by a Subsidiary of the
Company to the Company;
(d) (i) create, incur, assume, maintain or permit to exist any
debt for borrowed money other than (x) under existing lines of credit in the
ordinary course of business consistent with past practice, and (y) intercompany
indebtedness between the Company and any of its Subsidiaries or between any of
the Company's Subsidiaries; (ii) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or otherwise) for the
obligations of any other Person except for the Company and its Subsidiaries
pursuant to existing credit facilities; or (iii) make any loans, advances or
capital contributions to, or investments in, any other Person (other than travel
and similar advances to employees of the Company in the ordinary course of
business consistent with past practice);
(e) increase in any manner the compensation of any of its
directors, officers or employees or enter into, establish, amend, modify or
terminate any employment, consulting, retention, change in control, collective
bargaining, bonus or other incentive compensation, profit sharing, health or
other welfare, stock option or other equity (or equity-based), pension,
retirement, vacation, severance, deferred compensation or other compensation or
benefit plan (including any plan that would constitute a Company Plan), policy,
agreement, trust, fund or arrangement with, for or in respect of, any
stockholder, director, officer, other employee, consultant or Affiliate, other
than (i) as required pursuant to applicable Law or the terms of
27
agreements in effect as of the date of this Agreement as set forth on Schedule
5.1(e) of the Company Disclosure Schedule (complete and correct copies of which
have been delivered to Parent by the Company) and (ii) increases in salaries,
wages and benefits of employees (other than officers) made in the ordinary
course of business consistent with past practice;
(f) authorize, recommend, propose or announce an intention to
authorize, recommend or propose, or enter into any agreement in principle or an
agreement with respect to, any plan of liquidation or dissolution, any
acquisition of an amount of assets or securities in excess of $250,000, any
sale, transfer, lease, license, pledge, mortgage, or other disposition or
encumbrance of a material amount of assets or securities or any change in its
capitalization, or any release or relinquishment of any material contract
rights;
(g) (i) enter into or extend the term or scope of any contract
that purports to restrict the Company, or any Subsidiary from engaging in any
line of business or in any geographic area, (ii) enter into or extend the term
or scope of any agreement with a consultant, sales representative, agent or
distributor, (iii) amend or modify any of the Engagement Letters, (iv) enter
into any contract that would be breached by, or require the consent of any third
party in order to continue in full force following, consummation of any of the
transactions contemplated by this Agreement (other than immaterial contracts
that would not materially impact the nature of the Company's business), (v)
release any Person from, or modify or waive any provision of, any
confidentiality, nondisclosure or similar agreement related to the Company's
proprietary Intellectual Property, (vi) take any action to render the
restrictive provisions of Section 203 of the DGCL or the Rights Agreement
inapplicable to any transaction (other than the Merger and the other
transactions contemplated by this Agreement among the parties hereto) or any
Person (other than Parent and Purchaser), (vii) pay, loan or advance (other than
the payment of compensation, directors' fees or reimbursement of expenses in the
ordinary course of business consistent with past practice) any amount to, or
sell, transfer or lease any properties or material assets (real, personal or
mixed, tangible or intangible) to, or enter into any agreement with, any of its
officers or directors or any "affiliate" or "associate" of any of its officers
or directors, (viii) merge or consolidate with any other entity in any
transaction in a single transaction or series of transactions or form or
commence the operations of any business or any corporation, partnership, joint
venture, business association or other business organization or division
thereof, or (ix) enter into, terminate or amend any Material Contract, or any
other contract that would be a Material Contract if such contract were entered
into during the period from the date of this Agreement until the Effective Time,
other than in the ordinary course of business.
(h) authorize or commit to make capital expenditures, except
in the ordinary course of business consistent with past practice and not in
excess of $1.0 million in the aggregate;
(i) make any change in the accounting methods or accounting
practices followed by the Company, except as required by GAAP or applicable Law;
(j) settle any action, suit, claim, investigation or
proceeding (legal, administrative or arbitrative) in excess of $250,000;
(k) make or change any election under the Code; or
28
(l) agree to do any of the foregoing.
Section 5.2 No Solicitation. (a) The Company shall, and shall cause its
Subsidiaries and the Company's and its Subsidiaries' respective directors,
officers, employees, investment bankers, financial advisors, attorneys,
accountants, agents and other representatives (collectively, "Representatives")
to, immediately cease and cause to be terminated all existing discussions or
negotiations with any parties conducted heretofore with respect to any Takeover
Proposal and use its reasonable best efforts to obtain the return from all such
parties or cause the destruction of all copies of confidential information
provided to such parties by the Company or its Representatives that are still in
the possession of such parties. Except as contemplated by Section 5.18, the
Company shall not release any third party from, or waive any provision of, any
confidentiality or standstill agreement to which the Company is a party. From
the date hereof to the Effective Time, the Company shall not, and shall cause
its Subsidiaries and Representatives not to, directly or indirectly, (i)
solicit, initiate, knowingly encourage or otherwise knowingly facilitate
(including by way of furnishing information) any inquiries or proposals with
respect to or the making or submission of any Takeover Proposal; or (ii)
participate in any discussions or negotiations with any third party regarding,
or furnish to any third party any non-public information in connection with, any
Takeover Proposal. Notwithstanding the foregoing, prior to the date the
Stockholder Approval is obtained, the Board of Directors of the Company and its
Representatives may, in any event, have discussions with and furnish non-public
information to any Person that has made an unsolicited, written Takeover
Proposal that was made in circumstances not otherwise in violation of this
Agreement if the Board of Directors of the Company determines in good faith that
there is a reasonable likelihood that such Takeover Proposal will constitute a
Superior Proposal and with respect to which the Board of Directors of the
Company determines in good faith after considering applicable Law and after
consulting with outside counsel, that the failure to do so would reasonably be
expected to constitute a breach by it of its fiduciary duties to the Company's
stockholders; provided that the Company may furnish non-public information to
such Person only after such Person has executed a confidentiality agreement with
the Company (which confidentiality agreement shall be no less favorable to the
Company (i.e., no less restrictive in respect of the conduct of such Person)
than the Confidentiality Agreement) and the Company advises Parent, and delivers
to Parent, all such non-public information not previously provided to Parent.
(b) In addition to the other obligations of the Company set
forth in this Section 5.2, the Company shall promptly advise Parent, orally and
in writing (and in no event later than 48 hours), after receipt, if any
proposal, offer, inquiry or other contact is received by, any information is
requested from, or any discussions or negotiations are sought to be initiated or
continued with, the Company in respect of any Takeover Proposal, and shall in
any such notice to Parent, indicate the identity of the Person making such
Takeover Proposal and the material terms and conditions of any Takeover
Proposals (and in connection therewith, shall simultaneously provide to Parent
copies of any written Takeover Proposal received by the Company), and thereafter
shall keep Parent informed, on a timely basis and in reasonable detail, of all
material developments affecting the status and terms of any such proposals,
offers, inquiries or requests (and the Company shall provide Parent with copies
of any updated written Takeover Proposals) and of the status of any such
discussions or negotiations.
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(c) For purposes of this Agreement, (i) "Takeover Proposal"
means any inquiry, proposal or offer from any Person (other than Parent and its
Subsidiaries) relating to any (A) direct or indirect acquisition (whether in a
single transaction or a series of related transactions) of assets of the Company
and its Subsidiaries equal to 15% or more of the Company's consolidated assets
or to which 15% or more of the Company's revenues or earnings on a consolidated
basis are attributable, (B) direct or indirect acquisition (whether in a single
transaction or a series of related transactions) of 15% or more of capital stock
of the Company, (C) tender offer or exchange offer that if consummated would
result in any Person beneficially owning 15% or more of the capital stock of the
Company or (D) merger, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its Subsidiaries or any assets of the Company and its
Subsidiaries to which 15% or more of the Company's revenues or earnings on a
consolidated basis are attributable, and (ii) "Superior Proposal" means a bona
fide written proposal or offer from any Person not obtained in breach of this
Agreement to acquire, directly or indirectly, for consideration involving cash
and/or securities, all the equity securities of the Company or all or
substantially all of the assets of the Company and its Subsidiaries on a
consolidated basis made by a third party, which the Board of Directors of the
Company determines, reasonably and in good faith, after consultation with the
Company Financial Advisors and outside counsel, taking into account all factors
the Board of Directors of the Company deems relevant, including the estimated
time required to consummate the offer, the Person making the offer and the
legal, financial, regulatory and other aspects of the offer, is reasonably
capable of being completed and, if consummated, would result in a transaction
that is more favorable to its stockholders from a financial point of view than
the Merger.
(d) Except as expressly permitted by this Section 5.2(d),
neither the Board of Directors of the Company nor any committee thereof shall
(i)(A) withdraw or modify, or propose publicly to withdraw or modify, in a
manner adverse to Parent, the Company Recommendation or (B) approve or
recommend, or propose publicly to approve or recommend, any Takeover Proposal or
(ii) allow, cause or authorize the Company or any of its Subsidiaries to enter
into any letter of intent, agreement in principle, memorandum of understanding,
merger, acquisition, purchase or joint venture agreement or other agreement
providing for or contemplating the consummation of any Takeover Proposal (other
than a confidentiality agreement in accordance with Section 5.2(a)) (each, a
"Company Acquisition Agreement"). Notwithstanding the foregoing or any other
provision of this Agreement, prior to the date the Stockholder Approval is
obtained, (x) the Board of Directors of the Company may withdraw or modify the
Company Recommendation, or approve or recommend a Superior Proposal, if such
Board of Directors determines in good faith, after considering applicable Law
and after consulting with outside counsel, that the failure to make such
withdrawal, modification or recommendation would reasonably be expected to
constitute a breach by the Board of Directors of the Company of its fiduciary
duties to the Company's stockholders, and (y) if the Board of Directors of the
Company receives an unsolicited, bona fide Takeover Proposal that was made in
circumstances not involving a breach of this Agreement and that such Board
determines in good faith constitutes a Superior Proposal, the Board of Directors
of the Company may, in response to such Superior Proposal and after the
expiration of the two Business Day period described below, enter into a
definitive agreement with respect to such Superior Proposal but only if the
Company shall have concurrently with entering into such definitive agreement
terminated this Agreement pursuant to Section 7.1(g) and prior thereto or
concurrently therewith paid the Termination Fee
30
required pursuant to Section 7.3, but in any event (i) only after the second
Business Day following the Company's delivery of written notice (the "Notice of
Superior Proposal") advising Parent that the Board of Directors of the Company
intends to enter into a definitive agreement with respect to such Superior
Proposal and terminate this Agreement (it being understood that the Company
shall be required to deliver a new Notice of Superior Proposal in respect of any
revised Superior Proposal (other than immaterial revisions) from such third
party or its Affiliates that the Company proposes to accept), attaching the most
current version of such agreement to such Notice of Superior Proposal (which
version shall be updated on a current basis), and (ii) only if, during such two
Business Day period, the Company and its Representatives shall have negotiated
or offered to negotiate in good faith with Parent and Parent's Representatives
to make such adjustments in the terms of this Agreement as would enable Parent
and the Company to proceed with the transactions contemplated by this Agreement
on such adjusted terms and, at the end of such two Business Day period, after
taking into account any such adjusted terms as may have been agreed upon by
Parent and the Company, since the Company's delivery of such Notice of Superior
Proposal, the Board of Directors of the Company has again in good faith made the
determination referred to above in this clause (y).
(e) Nothing contained in this Section 5.2 shall prohibit the
Company or the Board of Directors of the Company, in connection with a tender or
exchange offer for the Company's outstanding securities by a third party, from
taking and disclosing to its stockholders a position contemplated by Rules 14d-9
and 14e-2 promulgated under the Exchange Act or from making any disclosure to
the Company's stockholders if, in the good faith judgment of the Board of
Directors of the Company, failure so to disclose would be inconsistent with its
obligations under applicable Law; provided, however, that, except as provided in
Section 5.2(d), neither the Company nor its Board of Directors nor any committee
thereof shall withdraw or modify, or propose publicly to withdraw or modify, its
position with respect to this Agreement or the Merger or approve or recommend,
or propose publicly to approve or recommend, a Takeover Proposal.
Section 5.3 Further Assurances; Reasonable Best Efforts (a) Upon the terms
and subject to the conditions set forth in this Agreement, each of the parties
hereto shall, and shall cause their respective Affiliates to, use reasonable
best efforts to take, or cause to be taken, all actions necessary, proper and
advisable under applicable Laws to consummate the Merger and the other
transactions contemplated by this Agreement as promptly as practicable. In
furtherance and not in limitation of the foregoing, each party shall: (i) make
an appropriate filing of a Notification and Report Form pursuant to the HSR Act
with respect to the Transactions as promptly as practicable and supply as
promptly as practicable any additional information and documentary material that
may be requested pursuant to the HSR Act; (ii) make any additional filings
required by any applicable Competition Law and take all other actions reasonably
necessary, proper or advisable to cause the expiration or termination of the
applicable waiting periods under the HSR Act or other Competition Laws, and
comply with applicable Foreign Antitrust Laws, as promptly as practicable; and
(iii) subject to applicable Laws relating to access to and the exchange of
information, use its reasonable best efforts to (A) cooperate with each other in
connection with any filing or submission and in connection with any
investigation or other inquiry under or relating to any Competition Law; (B)
keep the other parties informed of any communication received by such party
from, or given by such party to, the Federal Trade Commission (the "FTC"), the
Antitrust Division of the Department of Justice (the "DOJ") or any
31
other Governmental Authority and of any communication received or given in
connection with any proceeding by a private party, in each case regarding any of
the Transactions; and (C) permit the other parties hereto to review in advance
any communication intended to be given by it to, and consult with the other
parties in advance of any meeting or conference with, the FTC, the DOJ or any
such other Governmental Authority, and to the extent permitted by the FTC, the
DOJ or such other applicable Governmental Authority, give the other parties the
opportunity to attend and participate in such meetings and conferences.
(b) Notwithstanding anything to the contrary contained in this
Agreement, in no event shall Parent or any of its Subsidiaries or Affiliates be
obligated to propose or agree to accept any undertaking or condition, enter into
any consent decree, make any divestiture, accept any operational restriction or
take or commit to take any action that would reasonably be expected to limit:
(i) the freedom of action of Parent or its Subsidiaries or Affiliates with
respect to the operation of, or Parent's ability to retain, the Company or any
businesses, product lines or assets of the Company or (ii) Parent's or its
Subsidiaries' or Affiliates' ability to retain, own or operate any portion of
the businesses, product lines or assets of Parent or any of its Subsidiaries or
Affiliates, or alter or restrict in any way the business or commercial practices
of Parent or its Subsidiaries or Affiliates or the Company or its Subsidiaries.
(c) For purposes hereof, "Competition Laws" means the Xxxxxxx
Act, as amended, the Xxxxxxx Act, as amended, the HSR Act, the Federal Trade
Commission Act, as amended, and all other applicable Laws issued by a
Governmental Authority that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade or lessening of competition through merger or acquisition.
Section 5.4 Employee Benefit Plans. Parent shall cause the Surviving
Corporation to either maintain the U.S. Benefit Plans and Non-U.S. Benefit Plans
(which for purposes of this Section 5.4 only, includes plans and arrangements
for the benefit of non-United States employees and agents of the Company and its
Subsidiaries currently in place) (other than the BHA Group Holdings, Inc.
Amended and Restated Employee Stock Ownership Plan, the BHA Group Holdings, Inc.
Profit Sharing Plan and equity-based arrangements) provided by the Company and
its Subsidiaries before the Effective Time or replace all or any such programs
with programs maintained for similarly situated employees of the Parent or its
Affiliates in accordance with Parent's standard policies and practices (each a
"Surviving Corporation Plan"). To the extent that any employee of the Company or
its Subsidiaries becomes an employee of the Surviving Corporation at the
Effective Time and thereafter participates in a Surviving Corporation Plan, the
Surviving Corporation shall grant, or cause to be granted, service credit to
such employee (in accordance with the service credit rules in such plan) for his
or her service with the Company and its Subsidiaries exclusively for the purpose
of determining eligibility to participate and nonforfeitability of benefits
(other than post-retirement benefits under a plan which is a "welfare benefit
plan" (as defined in Section 3(1) of ERISA)) and for purposes of benefit accrual
exclusively under vacation and severance pay plans (but only to the extent such
service was credited under similar plans of the Company and its Subsidiaries).
(a) If a Surviving Corporation Plan which is a "welfare
benefit plan" (as defined in Section 3(1) of ERISA)) replaces a U.S. Benefit
Plan or a Non-U.S. Benefit Plan which is a "welfare benefit plan" (as defined in
Section 3(1) of ERISA)) which provides
32
healthcare and related benefits (a "Surviving Corporation Welfare Plan"), the
Surviving Corporation shall (i) waive any waiting periods, pre-existing
condition exclusions and actively-at-work requirements under the Surviving
Corporation Welfare Plan for a participant and his or her covered dependants to
the extent such provisions were inapplicable to such individual under the U.S.
Benefit Plan or the Non-U.S. Benefit Plan immediately before such plan was
replaced by the Surviving Corporation Welfare Plan and (ii) provide for credit
under the Surviving Corporation Welfare Plan for any eligible expenses paid by
any participant and his or her covered dependents under the U.S. Benefit Plan or
the Non-U.S. Benefit Plan for purposes of satisfying any applicable deductible,
coinsurance and maximum out-of-pocket requirements under the Surviving
Corporation Welfare Plan to the same extent the participant and his or her
covered dependants would have received credit for paying such expenses if such
expenses had been paid made under the Surviving Corporation Welfare Plan.
(b) Subject to compliance by the Surviving Corporation with
its obligations under Section 5.4(a) and 5.4(b), nothing contained in this
Section 5.4 shall be construed to prevent the termination of employment of any
individual employee of the Company and its Subsidiaries or any changes in the
employee benefits available to any such individual employee or the amendment or
termination of any particular U.S. Benefit Plan or Non-U.S. Benefit Plan to the
extent permitted by its terms as in effect immediately prior to the Effective
Time.
Section 5.5 Certain Notifications. At all times from the date hereof until
the Effective Time, each party shall promptly notify the others in writing of
the occurrence of (i) any event which will or may result in the failure to
satisfy the conditions specified in Article VI, (ii) any notice or other
communication received by such party from any Governmental Authority in
connection with the Merger or the transactions contemplated by this Agreement or
from any person alleging that the consent of such person is or may be required
and (iii) the occurrence, or nonoccurrence, of any event which would be
reasonably likely to cause any representation or warranty contained in this
Agreement to be materially untrue or inaccurate; provided, however, that the
delivery of any notice pursuant to this Section 5.5 shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
Section 5.6 Expenses. Subject to Section 7.3, whether or not the Merger is
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such expense, except expenses incurred in connection with the filing fee under
the HSR Act shall be equally shared by Parent and the Company.
Section 5.7 Public Announcements. The initial press release with respect to
the execution of this Agreement shall be a joint press release to be reasonably
agreed upon by Parent and the Company. Parent and the Company shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or any transaction contemplated herein
and shall not issue any such press release or make any such public statement
prior to such consultation, except as may be required by Law or any listing
agreement with a national securities exchange to which Parent or the Company is
a party.
Section 5.8 Company Stockholders Meeting. The Company shall, in accordance
with applicable Law and the Company Certificate of Incorporation and the Company
Bylaws, subject
33
to Section 7.1(g), (a) as soon as practicable following the date of this
Agreement, establish a record date for, duly call, give notice of, convene and
hold an annual or special meeting of its stockholders solely for the purpose of
considering and taking action on this Agreement and the transactions
contemplated hereby (the "Company Stockholders' Meeting") and (b) (i) include in
the Proxy Statement the recommendation of the Board of Directors of the Company
that the stockholders of the Company approve and adopt this Agreement and the
transactions contemplated hereby and (ii) use its reasonable best efforts to
obtain such approval and adoption. At the Company Stockholders' Meeting, Parent
and Purchaser shall cause all shares of Company Common Stock then owned by them
and their Subsidiaries to be voted in favor of the approval and adoption of this
Agreement and the transactions contemplated hereby. Without limiting the
generality of the foregoing (but subject to Section 7.1(g)), the Company's
obligations pursuant to the first sentence of this Section 5.8 shall not be
affected by (x) the commencement, public proposal, public disclosure or
communication to the Company of any Takeover Proposal or (y) the withdrawal or
modification by the Board of Directors of the Company or any committee thereof
of the Company Recommendation.
Section 5.9 Proxy Statement. (a) As promptly as practicable following the
date of this Agreement, the Company shall prepare and file the Proxy Statement
with the SEC. The Company shall use its reasonable best efforts to (i) respond
to any comments on the Proxy Statement or requests for additional information
from the SEC with respect thereto as soon as practicable after receipt of any
such comments or requests and (ii) cause the Proxy Statement to be mailed to the
stockholders of the Company as promptly as practicable following the date of
this Agreement. The Company shall promptly (A) notify Parent upon the receipt of
any such comments or requests and (B) provide Parent with copies of all
correspondence between the Company and its Representatives, on the one hand, and
the SEC and its staff, on the other hand, with respect to the Proxy Statement.
Prior to responding to any such comments or requests or the filing or mailing of
the Proxy Statement, (x) the Company shall provide Parent with a reasonable
opportunity to review and comment on any drafts of the Proxy Statement and
related correspondence and filings, (y) the Company shall include in such
drafts, correspondence and filings all comments reasonably proposed by Parent
and (z) to the extent practicable, the Company and its outside counsel shall
permit Parent and its outside counsel to participate in all communications with
the SEC and its staff (including all meetings and telephone conferences)
relating to the Proxy Statement, this Agreement or any of the transactions
contemplated hereby. Subject to Section 5.2(d), the Proxy Statement shall
include the Company Recommendation and a copy of the written opinions of the
Company Financial Advisors referred to in Section 3.23.
(b) If at any time prior to the Effective Time any event shall
occur, or fact or information shall be discovered by Parent or the Company, that
should be set forth in an amendment of or a supplement to the Proxy Statement,
the party which discovers such information shall promptly notify the other
parties hereto, and the Company shall, in accordance with the procedures set
forth in Section 5.9(a), prepare and file with the SEC such amendment or
supplement as soon thereafter as is reasonably practicable and to the extent
required by applicable Law, cause such amendment or supplement to be distributed
to the stockholders of the Company.
Section 5.10 ESOP and Profit Sharing Plan. The Company shall amend the BHA
Group Holdings, Inc. Amended and Restated Employee Stock Purchase Plan and the
BHA
34
Group Holdings, Inc. Profit Sharing Plan (if necessary) to expressly provide
that each participant shall have the right to direct the trustee of each such
plan on how to vote such participant's Shares at the Company Stockholders'
Meeting to adopt this Agreement and to approve the Merger.
Section 5.11 Access to Information; Confidentiality. Subject to the
existing confidentiality agreement dated as of March 25, 2004 (the
"Confidentiality Agreement"), among Parent, Purchaser and the Company, upon
reasonable notice, the Company shall, and shall cause each of its Subsidiaries
to, afford to Parent and to its officers, employees, accountants, counsel,
financial advisors and other representatives reasonable access during normal
business hours to all their properties, books, contracts, commitments, personnel
and records and, the Company shall, and shall cause each of its Subsidiaries to,
furnish promptly to Parent all other information concerning its business,
properties and personnel as Parent may reasonably request (including, the
opportunity to conduct "Phase II" or other environmental testing or sampling,
provided that Parent's representatives shall not unreasonably interfere with or
otherwise disrupt the business or operations of the Company or any of its
Subsidiaries while conducting such testing or sampling). The Company shall use
reasonable efforts to obtain from third parties any consents or waivers of
confidentiality restrictions with respect to any such information being provided
by it. No review pursuant to this Section 5.11 shall have an effect for the
purpose of determining the accuracy of any representation or warranty given by
any party hereto to the other parties hereto. Each of Parent and Purchaser will
hold, and will cause its respective officers, employees, accountants, counsel,
financial advisors and other representatives and Affiliates to hold, any
non-public information in accordance with the terms of the Confidentiality
Agreement.
Section 5.12 Indemnification, Exculpation and Insurance. (a) From and after
the Effective Time, Parent will, or will cause the Surviving Corporation to,
indemnify each individual who at the Effective Time is, or any time prior to the
Effective Time was, a director or officer of the Company or any of its
Subsidiaries in respect of indemnification and exculpation from liabilities for
acts or omissions by them in their capacity as such occurring at or prior to the
Effective Time (and rights for advancement of expenses) to the extent provided
in (i) the Company Certificate of Incorporation or Company Bylaws as in effect
on the date hereof and (ii) any indemnification or other agreements of the
Company as in effect on the date hereof, which shall survive the Merger, without
further action, and shall continue in full force and effect in accordance with
their terms; provided, however that the Surviving Corporation shall not be
required to indemnify any such person for fraud, criminal conduct or
responsibility for breach of this Agreement.
(b) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other Person and
is not the continuing or surviving corporation or entity of such consolidation
or merger or (ii) transfers or conveys all or substantially all its properties
and assets to any Person, then, and in each such case, the Surviving Corporation
shall cause proper provision to be made so that its successors and assigns
assume the obligations set forth in this Section 5.12.
(c) For six years from and after the Effective Time, Parent
shall maintain, or cause the Surviving Corporation to maintain, in effect
directors' and officers' liability insurance covering acts or omissions
occurring prior to the Effective Time covering each Person currently
35
covered by the directors' and officers' liability insurance policy as of the
date hereof (the "Current D&O Policy") maintained by the Company and its
Subsidiaries on terms with respect to such coverage and amounts no less
favorable than those of such policy in effect on the date hereof or, if
substantially equivalent insurance coverage is unavailable, the best available
coverage; provided, however, that Parent and the Surviving Corporation shall not
be required to pay an annual premium for such insurance in excess of $350,000
(which amount represents 200% of the annual premium currently paid by the
Company for the Current D&O Policy); provided, further that Parent may
substitute therefor policies of Parent of at least the same coverage and amount
and such other terms which are, in the aggregate, no less favorable to such
directors and officers.
(d) The provisions of this Section 5.12 are (i) intended to be
for the benefit of, and will be enforceable by, each party currently covered by
such insurance or such indemnification agreements or provisions, his heirs and
his representatives and (ii) are in addition to, and not in substitution for,
any other rights to indemnification or contribution that any such Person may
have by contract or otherwise.
Section 5.13 Profit Sharing Plan. The Company shall terminate the BHA Group
Holdings, Inc. Profit Sharing Plan in accordance with its terms immediately
prior to the Effective Time.
Section 5.14 Undertakings of Parent. Parent shall perform, or cause to be
performed, when due all obligations of Purchaser under this Agreement.
Section 5.15 Director Resignations. The Company shall cause to be delivered
to Parent resignations of all the directors of the Company to be effective at
the Effective Time. The Company shall cause such directors, prior to
resignation, to appoint new directors nominated by Parent to fill such
vacancies.
Section 5.16 Rights Agreement. The Rights Agreement has been amended as
provided in Exhibit C hereto. Except as approved in writing by Parent, neither
the Company nor the Board of Directors of the Company shall (i) amend the Rights
Agreement, (ii) redeem the Company Rights or (iii) take action with respect to,
or make any determination under, the Rights Agreement.
Section 5.17 Stockholder Litigation. The Company shall give Parent the
opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and its directors relating to the transactions
contemplated by this Agreement and the Merger; provided, however, that no such
settlement shall be agreed to without Parent's consent, which consent will not
be unreasonably withheld.
Section 5.18 Standstill Agreements; Confidentiality Agreements.
Notwithstanding anything in this Agreement to the contrary, during the period
from the date of this Agreement through the Effective Time or earlier
termination of this Agreement, the Company shall not terminate, release or waive
any provision of any confidentiality or standstill agreement to which it or any
of its Subsidiaries is a party in connection with the making of a Takeover
Proposal unless, in response to an unsolicited request to do so from the other
party to such agreement that
36
was made in circumstances not otherwise in violation of Section 5.2, the Board
of Directors shall have determined in good faith, after consultation with
outside counsel to the Company, that such action is appropriate in order for the
Board of Directors to act in a manner consistent with its fiduciary duties under
applicable Law.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to the Merger. The obligations of each party to
effect the Merger and/or carry out its respective obligations hereunder shall be
subject to the satisfaction, at or prior to the Effective Time, of each of the
following conditions:
(a) the Company Stockholder Approval shall have been obtained
with respect to the Merger and this Agreement;
(b) the applicable waiting periods (and any extension thereof)
applicable to the Merger shall have expired or been terminated under the HSR Act
and under applicable Foreign Antitrust Laws and all filings, approvals and
notifications required under the HSR Act and under Foreign Antitrust Laws, in
all jurisdictions in which such filings, approvals and notifications are
required by Law to be made or obtained, shall have been made or obtained;
(c) no preliminary or permanent injunction or other order of
any Governmental Authority of competent jurisdiction shall have been issued and
be in effect, and no provision of any applicable statute, rule, regulation,
order or decree shall have been enacted or promulgated and be in effect that
prohibits the consummation of the Merger;
(d) there shall not be pending any action, investigation or
proceeding by any Governmental Authority which makes illegal or, directly or
indirectly, restrains or prohibits the consummation of the Merger;
Section 6.2 Conditions to Obligations of Parent and Purchaser. The
obligations of Parent and Purchaser to effect the Merger shall be further
subject to the satisfaction or waiver at or prior to the Effective Time of the
following conditions:
(a) on or prior to the Effective Time, there shall not have
been any event, change or occurrence of any condition not covered by the
representations and warranties set forth in Article III hereof, that has had or
would reasonably be expected to have a Material Adverse Effect on the Company;
(b) the representations and warranties of the Company
contained in this Agreement (without giving effect to any materiality or
Material Adverse Effect qualification) shall be true and correct as of the date
of this Agreement and as of the Effective Time as though made at the Effective
Time (except to the extent such representations and warranties expressly relate
to an earlier date, in which case as of such earlier date), except as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company;
37
(c) the Company shall have performed in all material respects
the obligations and complied in all material respects with the agreements and
covenants, required to be performed by or complied with by it under this
Agreement at or prior to the Effective Time; and
(d) Parent shall have received a certificate of the Chief
Executive Officer, President or Chief Financial Officer of the Company
certifying that the conditions set forth in Sections 6.2(a)-(c) have been
satisfied.
Section 6.3 Conditions to the Obligations of the Company. The obligation of
the Company to effect the Merger shall be further subject to the satisfaction or
waiver at or prior to the Effective Time of the following conditions:
(a) the representations and warranties of Parent and Purchaser
contained in this Agreement (without giving effect to any materiality or
Material Adverse Effect qualification) shall be true and correct as of the date
of this Agreement and as of the Effective Time as though made at the Effective
Time (except as to the extent such representations and warranties expressly
relate to an earlier date, in which case as of such earlier date), except as
would not reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect;
(b) each of Parent and Purchaser shall have performed in all
material respects the obligations, and complied in all material respects with
the agreements and covenants, required to be performed by or complied with by it
under this Agreement at or prior to the Effective Time;
(c) the Company shall have received a certificate of an
authorized signatory of each of Parent and Purchaser, certifying that the
conditions set forth in Sections 6.3(a) and (b) have been satisfied.
Section 6.4 Frustration of Closing Conditions. Neither Parent and
Purchaser, on the one hand, nor the Company, on the other hand, may rely on the
failure of any condition set forth in this Article VI to be satisfied if such
failure was caused by such party's failure to use its reasonable efforts to
consummate the Merger and the other transactions contemplated by this Agreement,
as required by and subject to Section 5.3.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after the Company Stockholder Approval:
(a) by consent of the duly authorized representatives of
Parent, Purchaser and the Company;
(b) by Parent, if the Company shall have breached or failed to
perform any of its covenants or agreements set forth in this Agreement, or if
any representation or warranty of the Company shall have become untrue, in
either case, such that the conditions set forth in
38
Section 6.2(b) or (c) would not be satisfied and such breach or failure shall
not have been cured within 30 days after written notice to the Company;
(c) by Parent, if the condition set forth in Section 6.2(a)
would not be satisfied;
(d) by the Company, if Parent or Purchaser shall have breached
or failed to perform any of its covenants or agreements set forth in this
Agreement, or if any representation or warranty of Parent or Purchaser shall
have become untrue, in either case, such that the conditions set forth in
Section 6.3(a) or (b) would not be satisfied and such breach or failure shall
not have been cured within 30 days after written notice to Parent;
(e) by Parent and Purchaser, on the one hand, and the Company,
on the other hand, if the Effective Time shall not have occurred on or before
November 30, 2004 (the "Termination Date"), unless such date is extended by the
consent of the duly authorized representatives of the Company, Parent and
Purchaser provided, however, that the right to terminate this Agreement under
this Section 7.1(e) shall not be available to any party whose failure to fulfill
any obligation under this Agreement has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before such date;
(f) by any of Parent, Purchaser or the Company if the Company
Stockholder Approval shall not have been obtained at the Company Stockholders'
Meeting duly convened therefor or at any adjournment or postponement thereof;
(g) by the Company, prior to the Company Stockholder Approval
and pursuant to and in accordance with Section 5.2(d);
(h) by Parent, if, (i) the Board of Directors of the Company
shall have failed to recommend, or shall have withdrawn or modified in a manner
adverse to Parent, its approval or recommendation of this Agreement or the
Merger (except pursuant to Section 5.2(e)), or shall have recommended, or
entered into, or publicly announced its intention to enter into, an agreement or
an agreement in principle with respect to a Superior Proposal (or shall have
resolved to do any of the foregoing), (ii) the Company shall have breached in
any material respect any of its obligations under Section 5.2, (iii) the Board
of Directors of the Company shall have refused to affirm its approval or
recommendation of this Agreement or the Merger within ten Business Days of any
written request from Parent, (iv) a competing tender or exchange offer
constituting a Takeover Proposal shall have been commenced and the Company shall
not have sent holders of the Company Common Stock pursuant to Rule 14e-2
promulgated under the Exchange Act, (within ten Business Days after such tender
or exchange offer is first published, sent or given (within the meaning of Rule
14e-2)), a statement disclosing that the Board of Directors of the Company
recommends rejection of such Takeover Proposal, (v) the Board of Directors of
the Company shall exempt any other Person from the provisions of Section 203 of
the DGCL, (vi) the Board of Directors of the Company exempts any other Person
under the Rights Agreement or (vii) the Company or its Board of Directors
publicly announces its intention to do any of the foregoing;
39
(i) by any of Parent, Purchaser and the Company if any
injunction, order, statute or regulation prohibiting the consummation of the
Merger shall be in effect and shall have become final and nonappealable;
provided that the party seeking to terminate this Agreement pursuant to this
Section 7.1(i) shall have used reasonable efforts to prevent the entry of and to
remove such injunction, order, statute or regulation; and
(j) By Parent, Purchaser or the Company if the Company fails
to provide the necessary certifications when due and as and in the form required
under, Sections 302 or 906 of the Xxxxxxxx-Xxxxx Act of 2002.
Section 7.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to the provisions of Section 7.1, the provisions of this
Agreement (other than the last sentence of Section 5.10 and Sections 5.6, 7.2
and 7.3 hereof) shall become void and have no effect, with no liability on the
part of any party hereto or its stockholders or directors or officers in respect
thereof, provided that nothing contained herein shall be deemed to relieve any
party of any liability it may have to any other party with respect to a breach
of its obligations under this Agreement.
Section 7.3 Termination Payment. (a) As compensation for entering into this
Agreement, taking action to consummate the transactions hereunder and incurring
the costs and expenses related thereto and other losses and damages, including
the foregoing of other opportunities, the Company and Parent agree as follows:
in the event that this Agreement is terminated pursuant to Section 7.1(f),
7.1(g) or 7.1(h), then the Company shall pay Parent a fee as liquidated damages
and not as a penalty to reimburse Parent for its time, expense and lost
opportunity costs of pursuing the Merger equal to $8.0 million (the "Termination
Fee"), payable by wire transfer of immediately available funds, concurrently
with such termination pursuant to Section 7.1(g), and within two Business Days
of the date of any such other termination.
(b) In the event of termination of this Agreement under
Section 7.1(b) (but only as a result of the failure to satisfy the condition set
forth in Section 6.2(c)), and at or prior to the time of such termination a
Takeover Proposal shall have been made known to the Company or publicly
announced, and within one year following the termination, the Company shall
enter into any Company Acquisition Agreement in respect of or consummate a
Takeover Proposal with the Person who made the original Takeover Proposal or an
Affiliate of such Person (except that references in the definition of Takeover
Proposal to "15%" shall be deemed to be "50%" for purposes hereof), then
immediately prior to, and as a condition of, entering into of such agreement or
the consummation of such transaction, as the case may be, the Company shall pay
to Parent, upon demand, the Termination Fee, payable in cash by wire transfer in
immediately available funds, as liquidated damages and not as a penalty, to
reimburse Parent for its time, expense and lost opportunity costs of pursuing
the Merger; provided that no such amount shall be payable if the Termination Fee
shall have become payable or have been paid in accordance with Section 7.3(a) of
this Agreement.
(c) Notwithstanding anything to the contrary set forth in this
Agreement, if the Company fails to pay to Parent any amounts due under this
Section 7.3 within 5 Business Days of the date such amount was required to be
paid, the Company shall pay the costs and expenses (including reasonable legal
fees and expenses) in connection with any action, including
40
the filing of any lawsuit or other legal action, taken to collect payment,
together with interest on the amount of any unpaid fee or obligation at the
publicly announced prime rate of Citibank, N.A. in effect from time to time from
the date such fee or obligation was required to be paid. The Company
acknowledges that the fee and the other provisions of this Section 7.3 are an
integral part of this Agreement and that without these agreements, Parent would
not enter into this Agreement.
Section 7.4 Amendment. This Agreement may be amended by the parties at any
time before or after Company Stockholder Approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of all of the
parties.
Section 7.5 Waiver. Any term or provision of this Agreement (subject to
applicable Law) may be waived in writing at any time by the party or parties
entitled to the benefits thereof.
ARTICLE VIII
DEFINITIONS; INTERPRETATION
Section 8.1 Definitions. As used in the Agreement, the following terms have
the following respective meanings:
Accounting Rules: as defined in Section 3.9.
Acquiring Person: as defined in Section 3.19(a).
Affiliate: with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person where "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management policies of a Person,
whether through the ownership of voting securities, by contract, as trustee or
executor, or otherwise.
Affiliate Transactions: as defined in Section 3.19.
Agreement: as defined in the first paragraph of this
Agreement.
Appraisal Shares: as defined in Section 2.6(d).
Business Day: a day except a Saturday, a Sunday or other day
on which the SEC or banks in the City of New York are authorized or required by
Law to be closed.
Business Technology: as defined in Section 3.15(b).
Certificate of Merger: as defined in Section 2.5.
CERCLA: as defined in Section 3.25(b).
Certificates: as defined in Section 2.8(b).
Code: Internal Revenue Code of 1986, as amended.
41
Company: as defined in the first paragraph of this Agreement.
Company Acquisition Agreement: as defined in Section 5.2(d).
Company Bylaws: as defined in Section 3.1.
Company Certificate of Incorporation: as defined in Section
3.1.
Company Common Stock: as defined in Section 2.6.
Company Disclosure Schedule: as defined in the first paragraph
of Article III.
Company ESOP: the BHA Group Holdings, Inc. Amended and
Restated Employee Stock Ownership Plan, effective originally August 1, 1986 and
last amended and restated as of October 1, 2002.
Company Financial Advisors: each of Xxxxxx X. Xxxxx & Co.
Incorporated and Xxxxx & Company LLC.
Company Recommendation: as defined in Section 5.2(d).
Company Rights: as defined in Section 2.6.
Company SEC Documents: as defined in Section 3.8(a).
Company Stock Options: as defined in Section 2.9.
Company Stock Option Plan: means the Amended and Restated
Incentive Stock Plan, dated as of December 20, 2001.
Company Stockholder Approval: as defined in Section 3.16.
Company Stockholders' Meeting: as defined in Section 5.7(a).
Competition Laws: as defined in Section 5.3(c).
Confidentiality Agreement: as defined in Section 5.10.
Current D&O Policy: as defined in 5.11(c).
DGCL: as defined in the recitals to this Agreement.
Distribution Date: as defined in Section 3.19(b).
DOJ: as defined in Section 5.3.
Effective Time: as defined in Section 2.5.
42
Encumbrance: any security interest, pledge, mortgage, lien
(including environmental and tax liens), charge, encumbrance, adverse claim,
preferential arrangement or restriction of any kind, including any restriction
on the use, voting, transfer, receipt of income or other exercise of any
attributes of ownership.
Engagement Letters: as defined in Section 3.17.
Environmental Laws: as defined in Section 3.26.
ERISA: as defined in Section 3.14(a).
Exchange Act: the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
Export Control Requirements: as defined in Section 3.13.
Foreign Antitrust Laws: means non-U.S. Laws intended to
prohibit, restrict or regulate actions or transactions having the purpose or
effect of monopolization, restraint of trade or harm to competition.
FTC: as defined in Section 5.3.
GAAP: United States generally accepted accounting principles
and practices as in effect from time to time and applied consistently throughout
the periods involved.
Governmental Authority: means any United States federal, state
or local or any foreign government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal or judicial or arbitral
body.
Governmental Damages: as defined in Section 3.5(a).
Hazardous Materials: as defined in Section 3.26.
HSR Act: the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
Intellectual Property: means (i) trade names, logos,
trademarks, service marks, collective marks, and certification marks (registered
or otherwise), including any and all registrations and applications for
registration thereof and renewals thereof and all related goodwill (ii)
copyrights (registered or otherwise) and any and all registrations and
applications for registration thereof, (iii) domain names, URLs and Internet web
sites and all rights (including all trademark and common law rights) therein,
(iv) patents, patent applications and patentable inventions, (v) computer
software, including source code and object code, operating systems and
specifications, data, data bases, files, documentation and other materials
related thereto, (vi) trade secrets, (vii) whether or not confidential,
technology (including know-how and show-how), production processes and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, copyrightable works, financial,
marketing and business data, pricing and cost information, business and
marketing plans and
43
customer and supplier lists and information and know-how, and any other
proprietary rights of any type whatsoever together with all associated goodwill.
Intellectual Property Rights: as defined in Section 3.15(a).
Knowledge (or any derivations thereof): with respect to any
Person that is not an individual, as to any specific matter, the actual
knowledge of such Person's executive officers and other officers and manager
having primary responsibility for such matter.
Labor Organization: as defined in Section 3.14(n).
Law: as defined in Section 3.5(a).
Licensed Rights: as defined in Section 3.15(a).
Loss Contract: as defined in Section 3.11(a).
Material Adverse Effect or Material Adverse Effect on the
Company: means, with respect to the Company any change or effect that,
individually or in the aggregate with all other changes or effects, is or is
reasonably likely to be materially adverse to the business, operations,
properties, financial condition, assets or liabilities of the Company and its
Subsidiaries, taken as a whole, other than those relating to (i) the economy or
securities markets in general and not specifically relating to (or
disproportionately affecting) the Company, or (ii) to the announcement of the
transactions contemplated by this Agreement. Without limiting the generality of
the foregoing, a "Material Adverse Effect" or "Material Adverse Effect on the
Company" shall be deemed to have occurred if the applicable state of facts,
change, development, circumstance, event or effect (or aggregation of state of
facts, changes, developments, circumstances, events or effects) has resulted in
or would reasonably be expected to result in reputational harm to the Company's
business, Parent or any affiliate of Parent of such seriousness and significance
that a reasonable person in the position of Parent would not proceed with the
Merger and the transactions contemplated by this Agreement.
Material Contract: as defined in Section 3.11(a).
Merger: as defined in the recitals to this Agreement.
Merger Consideration: as defined in Section 2.6(a).
Non-U.S. Benefit Plan: as defined in Section 3.14(a).
Notice of Superior Proposal: as defined in Section 5.2(d).
Parent: as defined in the first paragraph of this Agreement.
Parent Material Adverse Effect: as defined in Section 4.3.
Paying Agent: means a financial institution selected by
Parent.
Permits: as defined in Section 3.5(b).
44
Person: an individual, general or limited partnership, joint
venture, corporation, limited liability company, trust, unincorporated
organization and a government or any department or agency thereof.
Policies: as defined in Section 3.22(a).
Proxy Statement: the proxy statement relating to the
solicitation of the approval of the Merger by the holders of the outstanding
Company Common Stock.
Purchaser: as defined in the first paragraph of this
Agreement.
Representatives: as defined in Section 5.2(c).
Rights: those certain rights to purchase one tenth of a share
of Company Common Stock upon the terms and subject to the provisions of the
Rights Agreement.
Rights Agreement: as defined in Section 3.2.
Xxxxxxxx-Xxxxx Act: as defined in Section 3.8(a).
SEC: the United States Securities and Exchange Commission.
Securities Act: the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
Shares: all the issued and outstanding Company Common Stock
together with the associated Company Rights.
Stock Acquisition Date: as defined in Section 3.19(a).
Subsidiary: with respect to any Person, any corporation or
other business entity, of which a majority (by number of votes) of the shares of
capital stock (or other voting interests) at the time outstanding is owned by
such Person directly or indirectly through Subsidiaries.
Superior Proposal: as defined in Section 5.2(c).
Surviving Corporation: as defined in Section 2.1.
Surviving Corporation Plan: as defined in Section 5.4(a).
Surviving Corporation Welfare Plan: as defined in Section
5.4(b).
Takeover Proposal: as defined in Section 5.2(c).
Taxes: all (x) Federal, state, local or foreign income, gross
receipts, consumption, value added, stamp, property, sales, use, excise, ad
valorem, franchise, employment, withholding, transfer and other taxes, customs,
duties or similar governmental charges, including any interest, penalties or
additions with respect thereto, whether disputed or not, (y) liability for the
payment of any amounts of the type described in clause (x) as a result of being
a member of
45
an affiliated, consolidated, combined or unitary group, and (z) liability for
the payment of any amounts as a result of being party to any tax sharing
agreement or as a result of any express or implied obligation to indemnify any
other person with respect to the payment of any amounts of the type described in
clause (x) or (y).
Termination Date: as defined in Section 7.1(e).
Termination Fee: as defined in Section 7.3(a).
Transactions: as defined in Section 5.3.
Transition Period: as defined in Section 5.4(a).
U.S. Benefit Plan: as defined in Section 3.14(a).
Voting Agreement: as defined in the recitals to this
Agreement.
Voting Company Debt: as defined in Section 3.2.
WARN: as defined in Section 3.14(n).
Section 8.2 Interpretation. When a reference is made in this Agreement to
an Article, Section, Schedule or Annex, such reference shall be to an Article,
or Section of, or Schedule or Annex to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." 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. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Nonsurvival of Representations and Warranties. None of the
representations, warranties, covenants or agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 9.1 shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time.
Section 9.2 Notices. All notices, consents, instructions and other
communications required or permitted under this Agreement shall be effective
only if given in writing and shall be considered to have been duly given when
(i) delivered by hand, (ii) sent by telecopier (with receipt confirmed),
provided that a copy is mailed (on the same date) by certified or registered
mail, return receipt requested, postage prepaid, or (iii) received by the
addressee, if sent by
46
Express Mail, Federal Express or other reputable express delivery service
(receipt requested), in which case, receipt shall be deemed to have occurred on
the next business day (including Saturday), or by first class certified or
registered mail, return receipt requested, postage prepaid. Notice shall be sent
in each case to the appropriate addresses or telecopier numbers set forth below
(or to such other addresses and telecopier numbers as a party may from time to
time designate as to itself by notice similarly given to the other parties in
accordance herewith, which shall not be deemed given until received by the
addressee). Notice shall be given:
if to the Company to:
BHA Group Holdings, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxx
Facsimile: 000-000-0000
With a copy to:
Kronish Xxxx Xxxxxx & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Parent or Purchaser:
General Electric Company
GE Energy
0000 Xxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
With additional copies to:
General Electric Company
GE Energy
0000 Xxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
King & Spalding LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
47
Section 9.3 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon a determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated by this Agreement, including the
Merger, be consummated as originally contemplated to the fullest extent
possible.
Section 9.4 Entire Agreement, Third Party Beneficiaries. This Agreement
(including the exhibits, schedules, documents and instruments referred to herein
or therein) (a) constitute the entire agreement and supersede all other prior
agreements and understandings, both written and oral, among the parties, or any
of them, with respect to the subject matter hereof and thereof; and (b) except
with respect to Sections 2.9 and 5.12 of this Agreement, are not intended to
confer upon any Person other than the parties hereto any rights or remedies
hereunder.
Section 9.5 Governing Law. This Agreement shall be governed in all
respects, including validity, interpretation and effect, by the internal laws of
the State of Delaware without giving effect to the conflicts of law provisions
thereof.
Section 9.6 Counterparts. This Agreement may be delivered by facsimile and
executed in two or more counterparts which together shall constitute a single
instrument and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
Section 9.7 Assignment. Neither this Agreement nor any of the rights,
interest or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties hereto without the
prior written consent of the other parties. Any assignment in violation of the
preceding sentence shall be void. Subject to the preceding two sentences, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
Section 9.8 Specific Performance. The parties agree that due to the unique
subject matter of this transaction, monetary damages will be insufficient to
compensate the non-breaching parties in the event of a breach of any part of
this Agreement. Accordingly, the parties agree that any non-breaching party
shall be entitled (without prejudice to any other right or remedy to which it
may be entitled) to an appropriate decree of specific performance, or an
injunction restraining any violation of this Agreement or other equitable
remedies to enforce this Agreement (without establishing the likelihood of
irreparable injury or posting bond or other security), and the breaching party
waives in any action or proceeding brought to enforce this Agreement the defense
that there exists an adequate remedy at law.
Section 9.9 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY OR AGAINST IT
ON ANY MATTERS WHATSOEVER,
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IN CONTRACT OR IN TORT, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
AGREEMENT.
[SIGNATURE PAGE FOLLOWS]
49
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed, by their respective duly authorized officers, on the date first
above written.
GENERAL ELECTRIC COMPANY
By:
--------------------------
Name:
Title:
XXXXX ACQUISITION COMPANY
By:
--------------------------
Name:
Title:
BHA GROUP HOLDINGS, INC.
By:
--------------------------
Name:
Title:
50
