EXHIBIT 4
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AGREEMENT AND PLAN OF MERGER
among
BBI HEALTHCARE CORPORATION,
IVAX CORPORATION,
BERGEN ▇▇▇▇▇▇▇▇ CORPORATION,
BBI-I SUB, INC.
and
BBI-B SUB, INC.
Dated as of November 10, 1996
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TABLE OF CONTENTS
Section Page
ARTICLE I
THE MERGERS
1.01. Formation of Merger Subsidiaries..................................... 3
1.02. The Mergers.......................................................... 3
1.03. Closing.............................................................. 3
1.04. Effective Time....................................................... 4
1.05. Effect of the Mergers................................................ 4
1.06. Articles of Incorporation; Certificate of Incorporation; Bylaws;
Directors and Officers of Surviving Corporation................... 4
1.07. Restated Certificate of Incorporation and Restated Bylaws of BBI..... 5
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
2.01. Conversion of Securities............................................. 5
2.02. Conversion of Shares................................................. 5
2.03. Cancellation of Treasury Shares and of Outstanding BBI Common Stock.. 6
2.04. Conversion of Common Stock of IVAX Merger Sub and Bergen Merger Sub
into Common Stock of the Surviving Corporations................... 7
2.05. Exchange of Shares Other than Treasury Shares........................ 7
2.06. Stock Transfer Books................................................. 8
2.07. No Fractional Share Certificates..................................... 9
2.08. Options to Purchase Each of IVAX Common Stock and Bergen Common Stock 10
2.09. Restricted Stock..................................................... 11
2.10. Certain Adjustments.................................................. 11
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF IVAX
3.01. Organization and Qualification; Subsidiaries......................... 12
3.02. Articles of Incorporation and Bylaws................................. 12
3.03. Capitalization....................................................... 12
3.04. Authority Relative to this Agreement and the IVAX Stock Option
Agreement......................................................... 13
3.05. No Conflict; Required Filings and Consents........................... 14
3.06. Permits; Compliance with Laws........................................ 15
3.07. SEC Filings; Financial Statements.................................... 17
3.08. Absence of Certain Changes or Events................................. 18
(ii)
Section Page
3.09. Employee Benefit Plans; Labor Matters................................ 18
3.10. Accounting and Tax Matters........................................... 20
3.11. Contracts; Debt Instruments.......................................... 20
3.12. Litigation........................................................... 21
3.13. Environmental Matters................................................ 21
3.14. Intellectual Property................................................ 22
3.15. Taxes .............................................................. 22
3.16. Pooling Affiliates................................................... 23
3.17. Suppliers............................................................ 23
3.18. Opinion of Financial Advisor......................................... 23
3.19. Brokers.............................................................. 23
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BERGEN
4.01. Organization and Qualification; Subsidiaries......................... 24
4.02. Certificate of Incorporation and Bylaws.............................. 24
4.03. Capitalization....................................................... 24
4.04. Authority Relative to this Agreement................................. 25
4.05. No Conflict; Required Filings and Consents........................... 26
4.06. Permits; Compliance with Laws........................................ 27
4.07. SEC Filings; Financial Statements.................................... 28
4.08. Absence of Certain Changes or Events................................. 29
4.09. Employee Benefit Plans; Labor Matters................................ 29
4.10. Accounting and Tax Matters........................................... 31
4.11. Contracts; Debt Instruments.......................................... 32
4.12. Litigation........................................................... 32
4.13. Environmental Matters................................................ 32
4.14. Intellectual Property................................................ 33
4.15. Taxes .............................................................. 33
4.16. Pooling Affiliates................................................... 33
4.17. Customers............................................................ 33
4.18. Opinion of Financial Advisor......................................... 34
4.19. Brokers.............................................................. 34
ARTICLE V
COVENANTS
5.01. Conduct of Business by IVAX Pending the Closing...................... 34
5.02. Conduct of Business by Bergen Pending the Closing.................... 37
5.03. Cooperation.......................................................... 39
(iii)
Section Page
5.04. Notices of Certain Events............................................ 39
5.05. Access to Information; Confidentiality............................... 40
5.06. No Solicitation of Transactions...................................... 40
5.07. Pooling.............................................................. 41
5.08. Letters of Accountants............................................... 42
5.09. Plan of Reorganization............................................... 42
5.10. Subsequent Financial Statements...................................... 42
5.11. Control of Operations................................................ 42
5.12. Further Action; Consents; Filings.................................... 42
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01. Registration Statement; Joint Proxy Statement........................ 43
6.02. Shareholders' Meetings............................................... 46
6.03. Employee Benefits Matters............................................ 47
6.04. Executive Officers................................................... 48
6.05. Pooling Affiliates................................................... 48
6.06. Assumption of Debt................................................... 49
6.07. Directors' and Officers' Indemnification and Insurance............... 50
6.08. No Shelf Registration................................................ 52
6.09. Public Announcements................................................. 52
6.10. Dividends............................................................ 52
6.11. Headquarters......................................................... 52
6.12. Post-Merger BBI Board of Directors................................... 53
6.13. Stock Exchange Listings.............................................. 53
6.14. Blue Sky............................................................. 54
ARTICLE VII
CONDITIONS TO THE MERGERS
7.01. Conditions to the Obligations of Each Party to Consummate the
Mergers........................................................... 54
7.02. Conditions to the Obligations of IVAX................................ 55
7.03. Conditions to the Obligations of Bergen.............................. 56
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01. Termination.......................................................... 57
8.02. Effect of Termination................................................ 59
(iv)
Section Page
8.03. Amendment............................................................ 60
8.04. Waiver .............................................................. 60
8.05. Fees and Expenses.................................................... 60
ARTICLE IX
GENERAL PROVISIONS
9.01. Non-Survival of Representations and Warranties....................... 62
9.02. Notices.............................................................. 62
9.03. Certain Definitions.................................................. 63
9.04. Severability......................................................... 66
9.05. Assignment; Binding Effect; Benefit.................................. 66
9.06. Incorporation of Exhibits............................................ 66
9.07. Specific Performance................................................. 67
9.08. Governing Law........................................................ 67
9.09. Consent to Jurisdiction; Venue....................................... 67
9.10. Headings............................................................. 67
9.11. Counterparts......................................................... 67
9.12. Entire Agreement..................................................... 67
EXHIBITS
EXHIBIT 1.07(a) Restated Certificate of Incorporation of BBI
EXHIBIT 1.07(b) Restated Bylaws of BBI
EXHIBIT 6.05(a) Form of IVAX Affiliate Letter
EXHIBIT 6.05(b) Form of Bergen Affiliate Letter
Index of Defined Terms
Defined Term Section
------------ -------
affiliate Section 9.03(a)
Agreement Preamble
AMEX Section 3.05(b)
Ancillary Agreements Section 9.03(b)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Section 3.10(b)
BBI Preamble
BBI Common Stock Section 2.02(a)
BBI Replacement Plans Section 6.03(b)
beneficial owner Section 9.03(e)
Bergen Preamble
Bergen Affiliate Letter Section 6.05(b)
Bergen Benefit Plans Section 4.09(a)
Bergen Certificate of Merger Section 1.04
Bergen Common Shares Trust Section 2.07(c)
Bergen Common Stock Recitals
Bergen Director Section 6.12
Bergen Disclosure Schedule Section 4.03
Bergen Exchange Ratio Section 2.02(b)
Bergen Foreign Benefit Plan Section 4.09(c)
Bergen Material Adverse Effect Section 9.03(c)
Bergen Material Adverse Effect Exclusion Section 9.03(d)
Bergen Material Contract Section 4.11(a)
Bergen Merger Section 1.02(b)
Bergen Merger Sub Preamble
Bergen Permits Section 4.06(a)
Bergen Preferred Stock Section 4.03
Bergen Reports Section 4.07(a)
Bergen Shareholders' Approval Section 5.06(b)
Bergen Shareholders' Meeting Section 6.01(a)
Bergen Shares Section 2.02(c)
Bergen Stock Incentive Plan Section 4.03
Bergen Stock Option Agreement Recitals
Bergen Stock Options Section 2.08
Bergen Stock Plans Section 4.03
Bergen Subsidiaries Section 4.01
Bergen Surviving Corporation Section 1.02(b)
Bergen Termination Fee Section 8.05(c)
Bergen Voting Agreement Recitals
Index of Defined Terms (cont'd)
Defined Term Section
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Bergen ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 4.03
Bergen 1995 10-K Section 4.02
Blue Sky Laws Section 3.05(b)
business day Section 9.03(f)
CERCLA Section 3.13(b)
Closing Section 1.03
Code Recitals
Competing Transaction Section 5.06(b)
Confidentiality Agreement Section 5.05(b)
Costs Section 6.07(e)
DEA Section 3.06(a)
Deloitte & Touche Section 4.10(b)
DGCL Recitals
$ Section 9.03(g)
Effective Time Section 1.04
Environmental Law Section 3.13(b)
Environmental Permit Section 3.13(b)
ERISA Section 3.09(a)
Excess Shares Section 2.07(b)
Exchange Act Section 3.05(b)
Exchange Agent Section 2.05
Exchange Fund Section 2.05
Exchange Ratios Section 2.02(b)
Expenses Section 8.05(a)
FBCA Recitals
FDA Section 3.06(a)
FDCA Section 3.06(a)
Governmental Entity Section 3.05(b)
Governmental Order Section 9.03(j)
Hazardous Material Section 3.13(b)
HSR Act Section 3.05(b)
Indemnified Parties Section 6.07(e)
IRS Section 3.09(a)
IVAX Preamble
IVAX Affiliate Letter Section 6.05(a)
IVAX Articles of Merger Section 1.04
IVAX Benefit Plans Section 3.09(a)
IVAX Common Shares Trust Section 2.07(c)
IVAX Common Stock Recitals
IVAX Director Section 6.12
(ii)
Index of Defined Terms (cont'd)
Defined Term Section
------------ -------
IVAX Disclosure Schedule Section 3.03
IVAX Exchange Ratio Section 2.02(a)
IVAX Foreign Benefit Plan Section 3.09(c)
IVAX Indenture Section 6.06(a)
IVAX Material Adverse Effect Section 9.03(h)
IVAX Material Adverse Effect Exclusion Section 9.03(i)
IVAX Material Contract Section 3.11
IVAX Merger Section 1.02(a)
IVAX Merger Sub Preamble
IVAX Permits Section 3.06(a)
IVAX Reports Section 3.07(a)
IVAX Savings Plan Section 3.03
IVAX Savings Plan (Puerto Rico) Section 3.03
IVAX Shareholders' Approval Section 5.06(b)
IVAX Shareholders' Meeting Section 6.01(a)
IVAX Shares Section 2.02(c)
IVAX Stock Option Agreement Recitals
IVAX Stock Options Section 2.08
IVAX Stock Plans Section 3.03
IVAX Subordinated Notes Section 3.03
IVAX Subsidiaries Section 3.01
IVAX Surviving Corporation Section 1.02(a)
IVAX Termination Fee Section 8.05(b)
IVAX Voting Agreement Recitals
IVAX 1985 Plan Section 3.03
IVAX ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 3.03
IVAX 1995 10-K Section 3.02
Joint Proxy Statement Section 6.01(a)
knowledge Section 9.03(k)
Law Section 3.06(a)
▇▇▇▇▇▇ Brothers Section 3.18
▇▇▇▇▇ 1991 Plan Section 3.03
Merger Subsidiaries Preamble
Mergers Section 1.02(b)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Section 4.18
New Bergen Common Stock Section 2.04(b)
New IVAX Common Stock Section 2.04(a)
NJBCA Recitals
NYSE Section 4.05(b)
Parties Section 1.01
(iii)
Index of Defined Terms (cont'd)
Defined Term Section
------------ -------
person Section 9.03(l)
Pooling Affiliate Section 3.16
Presurrender Dividends Section 2.05
Registration Statement Section 6.01(a)
Regulations Recitals
Reorganization Recitals
Representatives Section 5.05(a)
SEC Recitals
Securities Act Section 3.05(b)
Shareholders' Meetings Section 6.01(a)
Shares Section 2.02(c)
Steering Committee Section 5.03
Stock Plans Section 6.03(d)
subsidiary or subsidiaries Section 9.03(m)
Surviving Corporations Section 1.02(b)
Taxes Section 3.15
Terminating Bergen Breach Section 8.01(h)
Terminating IVAX Breach Section 8.01(g)
U.S. GAAP Section 3.07(b)
Zenith 1992 Plan Section 3.03
Zenith Directors' Plan Section 3.03
(iv)
AGREEMENT AND PLAN OF MERGER, dated as of November 10, 1996
(this "Agreement"), among BBI HEALTHCARE CORPORATION, a Delaware corporation
("BBI"), IVAX CORPORATION, a Florida corporation ("IVAX"), BERGEN ▇▇▇▇▇▇▇▇
CORPORATION, a New Jersey corporation ("Bergen"), BBI-I SUB, INC., a Florida
corporation and a wholly owned subsidiary of BBI ("IVAX Merger Sub"), and BBI-B
SUB, INC., a New Jersey corporation and a wholly owned subsidiary of BBI
("Bergen Merger Sub" and, together with IVAX Merger Sub, the "Merger
Subsidiaries").
W I T N E S S E T H:
WHEREAS, the boards of directors of IVAX and Bergen have
determined that it is consistent with and in furtherance of their respective
long-term business strategies and fair to and in the best interests of their
respective companies and shareholders to combine their respective businesses in
a "merger-of-equals" transaction so that they will be conducted by such
companies or their successors as direct subsidiaries of BBI as set forth in this
Agreement (the "Reorganization");
WHEREAS, upon the terms and subject to the conditions of this
Agreement and in accordance with the Business Corporation Act of the State of
Florida (the "FBCA"), the Business Corporation Act of the State of New Jersey
(the "NJBCA") and the General Corporation Law of the State of Delaware (the
"DGCL"), BBI will acquire all of the common stock of each of IVAX and Bergen
through the merger of IVAX Merger Sub with and into IVAX and the merger of
Bergen Merger Sub with and into Bergen and the shareholders of each of IVAX and
Bergen will receive shares of common stock of BBI in proportion to their
interests in IVAX and Bergen, respectively;
WHEREAS, IVAX and Bergen have organized BBI and have caused
BBI to issue to each of them 50% of its outstanding capital stock;
WHEREAS, as a result of the merger of IVAX Merger Sub with and
into IVAX and the merger of Bergen Merger Sub with and into Bergen, (i) IVAX
will be a wholly owned subsidiary of BBI, (ii) Bergen will be a wholly owned
subsidiary of BBI, (iii) the shareholders of IVAX will become shareholders of
BBI and (iv) the shareholders of Bergen will become shareholders of BBI;
WHEREAS, in furtherance of the Reorganization, the board of
directors of IVAX has adopted this Agreement and the Mergers, as contemplated by
this Agreement and
2
has recommended that the holders of common stock, par value $.10 per share, of
IVAX ("IVAX Common Stock") vote to approve this Agreement and the terms of the
Mergers as contemplated by this Agreement;
WHEREAS, in furtherance of the Reorganization, the Board of
Directors of Bergen has approved this Agreement and the Mergers, as contemplated
by this Agreement and has recommended that the holders of Class A common stock,
par value $1.50 per share, of Bergen ("Bergen Common Stock"), vote to approve
this Agreement and the terms of the Mergers as contemplated by this Agreement;
WHEREAS, concurrently with the execution of this Agreement and
as an inducement to Bergen to enter into this Agreement, certain shareholders of
IVAX have entered into a voting agreement (the "IVAX Voting Agreement") pursuant
to which such shareholders, among other things, have agreed to vote certain of
the outstanding shares of IVAX Common Stock in favor of the approval of this
Agreement and the Mergers contemplated hereby, upon the terms and subject to the
conditions set forth therein;
WHEREAS, concurrently with the execution of this Agreement and
as an inducement to IVAX to enter into this Agreement, certain shareholders of
Bergen have entered into a voting agreement (the "Bergen Voting Agreement")
pursuant to which such shareholders, among other things, have agreed to vote
certain of the outstanding shares of Bergen Common Stock in favor of the
approval of this Agreement and the Mergers contemplated hereby, upon the terms
and subject to the conditions set forth therein;
WHEREAS, concurrently with the execution of this Agreement and
as an inducement to Bergen to enter into this Agreement, IVAX and Bergen have
entered into a Stock Option Agreement (the "IVAX Stock Option Agreement")
pursuant to which IVAX has granted to Bergen an option to purchase from IVAX
shares of IVAX Common Stock, upon the terms and subject to the conditions set
forth therein;
WHEREAS, concurrently with the execution of this Agreement and
as an inducement to IVAX to enter into this Agreement, IVAX and Bergen have
entered into a Stock Option Agreement (the "Bergen Stock Option Agreement")
pursuant to which Bergen has granted to IVAX an option to purchase from Bergen
shares of Bergen Common Stock, upon the terms and subject to the conditions set
forth therein;
WHEREAS, the parties hereto intend that each of the Mergers
shall be accounted for as a "pooling of interests" for financial reporting
purposes under applicable United States accounting rules and the accounting
standards of the United States Securities and Exchange Commission (the "SEC");
and
3
WHEREAS, for United States federal income tax purposes, it is
intended that the Mergers qualify as reorganizations under the provisions of
Section 368(a) of the United States Internal Revenue Code of 1986, as amended
(the "Code"), and the Treasury regulations thereunder (the "Regulations");
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth in
this Agreement, the parties hereto agree as follows:
ARTICLE I
THE MERGERS
SECTION 1.01. Formation of Merger Subsidiaries. BBI has formed
IVAX Merger Sub and Bergen Merger Sub under the FBCA and the NJBCA,
respectively, as wholly owned subsidiaries of BBI. Each of the Merger
Subsidiaries has been formed solely to facilitate the Mergers and shall conduct
no business or activity other than in connection with the Mergers. BBI shall,
and IVAX and Bergen shall each cause BBI to, execute formal written consents
under Section 607.0704 of the FBCA and Section 14A:5-6 of the NJBCA,
respectively, as the sole shareholder of each of the Merger Subsidiaries,
approving the execution, delivery and performance of this Agreement by each of
the Merger Subsidiaries.
SECTION 1.02. The Mergers. (a) Upon the terms and subject to
the conditions set forth in this Agreement, and in accordance with the FBCA, at
the Effective Time, IVAX Merger Sub shall be merged with and into IVAX (the
"IVAX Merger"). As a result of the IVAX Merger, the separate corporate existence
of IVAX Merger Sub shall cease and IVAX shall continue as the surviving
corporation of the IVAX Merger as a wholly owned subsidiary of BBI (the "IVAX
Surviving Corporation").
(b) Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the NJBCA, at the Effective Time, Bergen
Merger Sub shall be merged with and into Bergen (the "Bergen Merger" and,
together, with the IVAX Merger, the "Mergers"). As a result of the Bergen
Merger, the separate corporate existence of Bergen Merger Sub shall cease and
Bergen shall continue as the surviving corporation of the Bergen Merger as a
wholly owned subsidiary of BBI (the "Bergen Surviving Corporation"; either of
IVAX Surviving Corporation or Bergen Surviving Corporation being separately
referred to as a "Surviving Corporation" and collectively referred to as the
"Surviving Corporations").
SECTION 1.03. Closing. Unless this Agreement shall have been
terminated and the Mergers herein contemplated shall have been abandoned
pursuant to Section 8.01 and
4
subject to the satisfaction or waiver of the conditions set forth in Article
VII, the consummation of the Reorganization shall take place as promptly as
practicable (and in any event within three business days) after satisfaction or
waiver of the conditions set forth in Article VII, at a closing (the "Closing")
to be held at the offices of Shearman & Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, unless another date, time or place is agreed to by IVAX and
Bergen.
SECTION 1.04. Effective Time. At the time of the Closing, the
parties shall cause the Mergers to be consummated concurrently, (a) in the case
of the IVAX Merger, by filing articles of merger (the "IVAX Articles of Merger")
with the Florida Department of State in such form as required by, and executed
in accordance with the relevant provisions of, the FBCA and (b) in the case of
the Bergen Merger, by filing a certificate of merger (the "Bergen Certificate of
Merger") with the Secretary of State of the State of New Jersey in such form as
required by, and executed in accordance with the relevant provisions of, the
NJBCA (the date and time of such filing, or such later date or time as set forth
therein, being the "Effective Time").
SECTION 1.05. Effect of the Mergers. At the Effective Time,
the effect of the IVAX Merger shall be as provided in the applicable provisions
of the FBCA and the effect of the Bergen Merger shall be as provided in the
applicable provisions of the NJBCA. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, except as otherwise
provided herein, (a) all the property, rights, privileges, powers and franchises
of IVAX and IVAX Merger Sub shall vest in IVAX as the IVAX Surviving
Corporation, and all debts, liabilities and duties of IVAX and IVAX Merger Sub
shall become the debts, liabilities and duties of IVAX as the IVAX Surviving
Corporation and (b) all the property, rights, privileges, powers and franchises
of Bergen and Bergen Merger Sub shall vest in Bergen as the Bergen Surviving
Corporation, and all debts, liabilities and duties of Bergen and Bergen Merger
Sub shall become the debts, liabilities and duties of Bergen as the Bergen
Surviving Corporation. As of the Effective Time, each of the Surviving
Corporations shall be a direct wholly owned subsidiary of BBI.
SECTION 1.06. Articles of Incorporation; Certificate of
Incorporation; Bylaws; Directors and Officers of Surviving Corporation. Unless
otherwise agreed by IVAX and Bergen before the Effective Time, at the Effective
Time:
(a) the Articles of Incorporation and the Bylaws of IVAX as
the IVAX Surviving Corporation shall be the Articles of Incorporation
and the Bylaws of IVAX Merger Sub, as in effect immediately prior to
the Effective Time, until thereafter amended as provided by Law and
such Articles of Incorporation or Bylaws;
(b) the Certificate of Incorporation and the Bylaws of Bergen
as the Bergen Surviving Corporation shall be the Certificate of
Incorporation and the Bylaws of
5
Bergen Merger Sub, as in effect immediately prior to the Effective
Time, until thereafter amended as provided by Law and such Certificate
of Incorporation or Bylaws;
(c) the officers of each of IVAX and Bergen immediately prior
to the Effective Time shall continue to serve in their respective
offices of their respective Surviving Corporations from and after the
Effective Time, in each case until their successors are elected or
appointed and qualified or until their resignation or removal. If, at
the Effective Time, a vacancy shall exist in any office of either of
the Surviving Corporations, such vacancy may thereafter be filled in
the manner provided by Law and the Articles or Certificate of
Incorporation and Bylaws of such Surviving Corporation; and
(d) the directors of each of IVAX Merger Sub and Bergen Merger
Sub immediately prior to the Effective Time shall continue to serve as
the directors of their respective Surviving Corporations from and after
the Effective Time, in each case until their successors are elected or
appointed and qualified or until their resignation or removal. If, at
the Effective Time, a vacancy shall exist on the Board of Directors of
either of the Surviving Corporations, such vacancy may thereafter be
filled in the manner provided by Law and the Articles or Certificate of
Incorporation and Bylaws of such Surviving Corporation.
SECTION 1.07. Restated Certificate of Incorporation and
Restated Bylaws of BBI. Immediately prior to the Effective Time, BBI, IVAX and
Bergen shall cause the Certificate of Incorporation and Bylaws of BBI to be
amended and restated to read substantially in the form attached hereto as
Exhibits 1.07(a) and (b), respectively. The Restated Certificate of
Incorporation of BBI shall provide, among other things, that the name of BBI
shall be "BBI Healthcare Corporation".
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities. The manner and basis
of converting the securities of IVAX and Bergen and each of IVAX Merger Sub and
Bergen Merger Sub, respectively, at the Effective Time, by virtue of the
Mergers, shall be as hereinafter set forth in this Article II.
SECTION 2.02. Conversion of Shares. (a) Each share of IVAX
Common Stock issued and outstanding immediately before the Effective Time
(excluding those owned by Bergen or any wholly owned subsidiary of IVAX or
Bergen) and all rights in respect
6
thereof, shall, at the Effective Time, without any action on the part of any
holder thereof, forthwith cease to exist and be converted into and become
exchangeable for 0.4200 shares of common stock, par value $0.01 per share, of
BBI ("BBI Common Stock"; such ratio of shares of IVAX Common Stock to shares of
BBI Common Stock being referred to as the "IVAX Exchange Ratio").
(b) Each share of Bergen Common Stock issued and outstanding
immediately before the Effective Time (excluding those held in the treasury of
Bergen and those owned by IVAX or any wholly owned subsidiary of IVAX or Bergen)
and all rights in respect thereof, shall, at the Effective Time, without any
action on the part of any holder thereof, forthwith cease to exist and be
converted into and become exchangeable for 1.0000 share of BBI Common Stock
(such ratio of shares of Bergen Common Stock to shares of BBI Common Stock being
referred to as the "Bergen Exchange Ratio" and, together with the IVAX Exchange
Ratio, the "Exchange Ratios").
(c) Commencing immediately after the Effective Time, each
certificate which, immediately prior to the Effective Time, represented issued
and outstanding shares of IVAX Common Stock ("IVAX Shares") or Bergen Common
Stock ("Bergen Shares" and, together with IVAX Shares, the "Shares"), shall
evidence ownership of BBI Common Stock on the basis hereinbefore set forth, but
subject to the limitations set forth in Sections 2.03, 2.05, 2.07, 2.08, 2.09
and 2.10 hereof.
(d) For all purposes of this Agreement, unless otherwise
specified, all shares held by employee benefit plans of IVAX or Bergen (i) shall
be deemed to be issued and outstanding, (ii) shall not be deemed to be held in
the treasury of IVAX or Bergen, respectively, and (iii) shall be converted into
shares of BBI Common Stock in accordance with the IVAX Exchange Ratio or the
Bergen Exchange Ratio, respectively.
SECTION 2.03. Cancellation of Treasury Shares and of
Outstanding BBI Common Stock. (a) At the Effective Time, each share of IVAX
Common Stock owned by Bergen or any wholly owned subsidiary of IVAX or Bergen
immediately prior to the Effective Time, and each share of Bergen Common Stock
held in the treasury of Bergen or owned by IVAX or any wholly owned subsidiary
of IVAX or Bergen immediately prior to the Effective Time, shall be canceled and
retired and no shares of stock or other securities of BBI or either of the
Surviving Corporations or any other corporation shall be issuable, and no
payment or other consideration shall be made, with respect thereto.
(b) At the Effective Time, the shares of BBI Common Stock held
by IVAX and Bergen shall be canceled and retired and no shares of stock or other
securities of BBI or either of the Surviving Corporations or any other
corporation shall be issuable, and no payment or other consideration shall be
made, with respect thereto.
7
SECTION 2.04. Conversion of Common Stock of IVAX Merger Sub
and Bergen Merger Sub into Common Stock of the Surviving Corporations. (a) At
the Effective Time, each share of common stock, par value $0.01 per share, of
IVAX Merger Sub issued and outstanding immediately prior to the Effective Time,
and all rights in respect thereof, shall, without any action on the part of BBI,
forthwith cease to exist and be converted into one validly issued, fully paid
and nonassessable share of common stock, par value $0.01 per share, of IVAX
Surviving Corporation (the "New IVAX Common Stock"). Immediately after the
Effective Time and upon surrender by BBI of the certificate representing the
shares of the common stock of IVAX Merger Sub, IVAX Surviving Corporation shall
deliver to BBI an appropriate certificate or certificates representing the New
IVAX Common Stock created by conversion of the common stock of IVAX Merger Sub
owned by BBI.
(b) At the Effective Time, each share of common stock, par
value $0.01 per share, of Bergen Merger Sub issued and outstanding immediately
prior to the Effective Time, and all rights in respect thereof, shall, without
any action on the part of BBI, forthwith cease to exist and be converted into
one validly issued, fully paid and nonassessable share of common stock, par
value $0.01 per share, of Bergen Surviving Corporation (the "New Bergen Common
Stock"). Immediately after the Effective Time and upon surrender by BBI of the
certificate representing the shares of the common stock of Bergen Merger Sub,
Bergen Surviving Corporation shall deliver to BBI an appropriate certificate or
certificates representing the New Bergen Common Stock created by conversion of
the common stock of Bergen Merger Sub owned by BBI.
SECTION 2.05. Exchange of Shares Other than Treasury Shares.
Subject to the terms and conditions hereof, at or prior to the Effective Time,
BBI shall appoint an exchange agent to effect the exchange of Shares for BBI
Common Stock in accordance with the provisions of this Article II (the "Exchange
Agent"). From time to time after the Effective Time, BBI shall deposit, or cause
to be deposited, certificates representing BBI Common Stock for conversion of
Shares in accordance with the provisions of Section 2.02 hereof (such
certificates, together with any dividends or distributions with respect thereto,
being herein referred to as the "Exchange Fund"). Commencing immediately after
the Effective Time and until the appointment of the Exchange Agent shall be
terminated, each holder of a certificate or certificates theretofore
representing Shares may surrender the same to the Exchange Agent, and, after the
appointment of the Exchange Agent shall be terminated, any such holder may
surrender any such certificate to BBI. Such holder shall be entitled upon such
surrender to receive in exchange therefor a certificate or certificates
representing the number of full shares of BBI Common Stock into which the Shares
theretofore represented by the certificate or certificates so surrendered shall
have been converted in accordance with the provisions of Section 2.02 hereof,
together with a cash payment in lieu of fractional shares, if any, in accordance
with Section 2.07 hereof, and all such shares of BBI Common Stock shall be
deemed to have been issued at the Effective Time. Until so surrendered and
exchanged, each outstanding certificate which, prior to the
8
Effective Time, represented issued and outstanding Shares shall be deemed for
all corporate purposes of BBI, other than the payment of dividends and other
distributions, if any, to evidence ownership of the number of full shares of BBI
Common Stock into which the Shares theretofore represented thereby shall have
been converted at the Effective Time. Unless and until any such certificate
theretofore representing Shares is so surrendered, no dividend or other
distribution, if any, payable to the holders of record of BBI Common Stock as of
any date subsequent to the Effective Time shall be paid to the holder of such
certificate in respect thereof. Upon the surrender of any such certificate
theretofore representing Shares, however, the record holder of the certificate
or certificates representing shares of BBI Common Stock issued in exchange
therefor shall receive from the Exchange Agent or from BBI, as the case may be,
payment of the amount of dividends and other distributions, if any, which as of
any date subsequent to the Effective Time and until such surrender shall have
become payable with respect to such number of shares of BBI Common Stock
("Presurrender Dividends"). No interest shall be payable with respect to the
payment of Presurrender Dividends upon the surrender of certificates theretofore
representing Shares. After the appointment of the Exchange Agent shall have been
terminated, such holders of BBI Common Stock which have not received payment of
Presurrender Dividends shall look only to BBI for payment thereof.
Notwithstanding the foregoing provisions of this Section 2.05, risk of loss and
title to such certificates representing Shares shall pass only upon proper
delivery of such certificates to the Exchange Agent, and neither the Exchange
Agent nor any party hereto shall be liable to a holder of Shares for any BBI
Common Stock or dividends or distributions thereon delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law
or to a transferee pursuant to Section 2.06 hereof.
SECTION 2.06. Stock Transfer Books. (a) At the Effective Time,
the stock transfer books of IVAX with respect to IVAX Shares and the stock
transfer books of Bergen with respect to Bergen Shares shall each be closed, and
there shall be no further registration of transfers of Shares thereafter on the
records of any such stock transfer books. In the event of a transfer of
ownership of Shares that is not registered in the stock transfer records of IVAX
or Bergen, as the case may be, at the Effective Time, a certificate or
certificates representing the number of full shares of BBI Common Stock into
which such Shares shall have been converted shall be issued to the transferee
together with a cash payment in lieu of fractional shares, if any, in accordance
with Section 2.07 hereof, and a cash payment in the amount of Presurrender
Dividends, if any, in accordance with Section 2.05 hereof, if the certificate or
certificates representing such Shares is or are surrendered as provided in
Section 2.05 hereof, accompanied by all documents required to evidence and
effect such transfer and by evidence of payment of any applicable stock transfer
tax.
(b) Notwithstanding anything to the contrary herein,
certificates surrendered for exchange by any person constituting a Pooling
Affiliate of either or both of IVAX or Bergen shall not be exchanged until BBI
shall have received from such person an affiliate letter as provided in Section
6.05(a).
9
SECTION 2.07. No Fractional Share Certificates. (a) No scrip
or fractional share certificate for BBI Common Stock shall be issued upon the
surrender for exchange of certificates evidencing Shares, and an outstanding
fractional share interest shall not entitle the owner thereof to vote, to
receive dividends or to any rights of a shareholder of BBI or of either of the
Surviving Corporations with respect to such fractional share interest.
(b) As promptly as practicable following the Effective Time,
the Exchange Agent shall determine the excess of (i) the number of full shares
of BBI Common Stock to be issued and delivered to the Exchange Agent pursuant to
Section 2.05 hereof over (ii) the aggregate number of full shares of BBI Common
Stock to be distributed to holders of IVAX Common Stock and Bergen Common Stock
pursuant to Section 2.05 hereof (such excess being herein called the "Excess
Shares"). Following the Effective Time, the Exchange Agent, as agent for the
holders of IVAX Common Stock and Bergen Common Stock, shall sell the Excess
Shares at then prevailing prices on the New York Stock Exchange, Inc. (the
"NYSE"), all in the manner provided in subsection (c) of this Section 2.07.
(c) The sale of the Excess Shares by the Exchange Agent shall
be executed on the NYSE through one or more member firms of such exchange and
shall be executed in round lots to the extent practicable. The Exchange Agent
shall use all reasonable efforts to complete the sale of the Excess Shares as
promptly following the Effective Time as, in the Exchange Agent's reasonable
judgment, is practicable consistent with obtaining the best execution of such
sales in light of prevailing market conditions. Until the net proceeds of such
sale or sales have been distributed to the holders of each of IVAX Common Stock
and Bergen Common Stock, the Exchange Agent shall hold such proceeds in trust
for the holders of IVAX Common Stock (the "IVAX Common Shares Trust") and Bergen
Common Stock (the "Bergen Common Shares Trust"). BBI shall pay all commissions,
transfer taxes and other out-of-pocket transaction costs, including the expenses
and compensation of the Exchange Agent, incurred in connection with such sale of
Excess Shares. The Exchange Agent shall determine the portion of the IVAX Common
Shares Trust or the Bergen Common Shares Trust, as the case may be, to which
each holder of IVAX Common Stock or Bergen Common Stock shall be entitled, if
any, by multiplying the amount of the aggregate net proceeds comprising the IVAX
Common Shares Trust or the Bergen Common Shares Trust, respectively, by a
fraction the numerator of which is the amount of fractional share interests to
which such holder of IVAX Common Stock or Bergen Common Stock, as the case may
be, is entitled (after taking into account all shares of IVAX Common Stock or
Bergen Common Stock, respectively, held at the Effective Time by such holder)
and the denominator of which is the aggregate amount of fractional share
interests to which all holders of IVAX Common Stock or Bergen Common Stock,
respectively, are entitled.
(d) Notwithstanding the provisions of subsections (b) and (c)
of this Section 2.07, IVAX and Bergen may agree at their option, exercised prior
to the Effective Time, in lieu of the issuance and sale of Excess Shares and the
making of the payments contemplated
10
in such subsections, to cause BBI to pay to the Exchange Agent an amount in cash
sufficient for the Exchange Agent to pay each holder of IVAX Common Stock and/or
Bergen Common Stock an amount in cash equal to the product obtained by
multiplying (i) the fractional share interest to which such holder would
otherwise be entitled (after taking into account all shares of IVAX Common Stock
and/or Bergen Common Stock, as the case may be, held at the Effective Time by
such holder) by (ii) the closing price for a share of BBI Common Stock on the
NYSE Composite Transaction Tape on the first business day immediately following
the Effective Time, and, in such case, all references herein to the cash
proceeds of the sale of the Excess Shares and similar references shall be deemed
to mean and refer to the payments calculated as set forth in this subsection
(d). In such event, Excess Shares shall not be issued or otherwise transferred
to the Exchange Agent pursuant to Section 2.05 hereof.
(e) As soon as practicable after the determination of the
amount of cash, if any, to be paid to holders of IVAX Common Stock or Bergen
Common Stock with respect to any fractional share interests, the Exchange Agent
shall make available such amounts, net of any required withholding, to such
holders of IVAX Common Stock or Bergen Common Stock, subject to and in
accordance with the terms of Section 2.05 hereof.
(f) Any portion of the Exchange Fund, the IVAX Common Shares
Trust or the Bergen Common Shares Trust which remains undistributed for six
months after the Effective Time shall be delivered to BBI, and any holder of
IVAX Common Stock or Bergen Common Stock who has not theretofore complied with
the provisions of this Article II shall thereafter look only to BBI for
satisfaction of their claims for BBI Common Stock or any cash in lieu of
fractional shares of BBI Common Stock and any Presurrender Dividends.
SECTION 2.08. Options to Purchase Each of IVAX Common Stock
and Bergen Common Stock. At the Effective Time, each option or warrant granted
by IVAX to purchase shares of IVAX Common Stock ("IVAX Stock Options"), or by
Bergen to purchase shares of Bergen Common Stock ("Bergen Stock Options"), which
is outstanding and unexercised immediately prior to the Effective Time, shall be
assumed by BBI and converted into an option or warrant to purchase shares of BBI
Common Stock in such number and at such exercise price as provided below and
otherwise having the same terms and conditions as in effect immediately prior to
the Effective Time (except to the extent that such terms, conditions and
restrictions may be altered in accordance with their terms as a result of the
Mergers contemplated hereby):
(a) the number of shares of BBI Common Stock to be subject to
the new option or warrant shall be equal to the product of (x) the
number of shares of IVAX Common Stock or Bergen Common Stock subject to
the original option or warrant and (y) the IVAX Exchange Ratio (if the
original option related to IVAX Common Stock) or the Bergen Exchange
Ratio (if the original option related to Bergen Common Stock), as
appropriate;
11
(b) the exercise price per share of BBI Common Stock under the
new option or warrant shall be equal to (x) the exercise price per
share of the IVAX Common Stock or Bergen Common Stock under the
original option or warrant divided by (y) the IVAX Exchange Ratio (if
the original option related to IVAX Common Stock) or the Bergen
Exchange Ratio (if the original option related to Bergen Common Stock),
as appropriate; and
(c) upon each exercise of options or warrants by a holder
thereof, the aggregate number of shares of BBI Common Stock deliverable
upon such exercise shall be rounded down, if necessary, to the nearest
whole share and the aggregate exercise price shall be rounded up, if
necessary, to the nearest cent.
The adjustments provided herein with respect to any options which are "incentive
stock options" (as defined in Section 422 of the Code) shall be effected in a
manner consistent with the requirements of Section 424(a) of the Code.
SECTION 2.09. Restricted Stock. At the Effective Time, any
restricted shares of IVAX Common Stock or Bergen Common Stock awarded pursuant
to any plan, arrangement or transaction and outstanding immediately prior to the
Effective Time shall be assumed by BBI and converted into restricted shares of
BBI Common Stock in accordance with Section 2.02 hereof, subject to the same
terms, conditions and restrictions as in effect immediately prior to the
Effective Time, except to the extent that such terms, conditions and
restrictions may be altered in accordance with their terms as a result of the
Mergers contemplated hereby.
SECTION 2.10. Certain Adjustments. If between the date of this
Agreement and the Effective Time, the outstanding shares of IVAX Common Stock or
Bergen Common Stock shall be changed into a different number of shares by reason
of any reclassification, recapitalization, split-up, combination or exchange of
shares, or any dividend payable in stock or other securities shall be declared
thereon with a record date within such period, the exchange ratio established
pursuant to the provisions of Section 2.02 hereof shall be adjusted accordingly
to provide to the holders of IVAX Common Stock and Bergen Common Stock the same
economic effect as contemplated by this Agreement prior to such
reclassification, recapitalization, split-up, combination, exchange or dividend.
12
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF IVAX
IVAX hereby represents and warrants to Bergen that:
SECTION 3.01. Organization and Qualification; Subsidiaries.
Each of IVAX and each subsidiary of IVAX (the "IVAX Subsidiaries") has been duly
organized and is validly existing and in good standing (to the extent
applicable) under the laws of the jurisdiction of its incorporation or
organization, as the case may be, and has the requisite corporate power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such power, authority and governmental approvals would not, individually or in
the aggregate, have an IVAX Material Adverse Effect. Each of IVAX and each IVAX
Subsidiary is duly qualified or licensed to do business, and is in good standing
(to the extent applicable), in each jurisdiction where the character of the
properties owned, leased or operated by it or the nature of its business makes
such qualification or licensing necessary, except for such failures to be so
qualified or licensed and in good standing that would not, individually or in
the aggregate, have an IVAX Material Adverse Effect.
SECTION 3.02. Articles of Incorporation and Bylaws. The copies
of IVAX's Articles of Incorporation and Bylaws that are incorporated by
reference as exhibits to IVAX's Form 10-K for the period ending December 31,
1995 (the "IVAX 1995 10-K") are complete and correct copies thereof. Such
Articles of Incorporation and Bylaws are in full force and effect. IVAX is not
in violation of any of the provisions of its Articles of Incorporation or
By-laws.
SECTION 3.03. Capitalization. The authorized capital stock of
IVAX consists of 250,000,000 shares of IVAX Common Stock. As of September 30,
1996, (i) 121,467,592 shares of IVAX Common Stock were issued and outstanding,
all of which were validly issued, fully paid and nonassessable, (ii) no shares
of IVAX Common Stock were held in the treasury of IVAX or by the IVAX
Subsidiaries, (iii) 2,945,669 shares of IVAX Common Stock were reserved for
future issuance pursuant to the terms of IVAX's 6 1/2% Convertible Subordinated
Notes due November 15, 2001 (the "IVAX Subordinated Notes"), (iv) 10,724,175
shares of IVAX Common Stock were reserved for issuance pursuant to outstanding
IVAX Stock Options issued under the IVAX 1994 Stock Option Plan (the "IVAX 1994
Plan"), outstanding IVAX Stock Options granted under the IVAX 1985 Stock Option
Plan (the "IVAX 1985 Plan"), outstanding IVAX Stock Options granted under the
Zenith 1992 Employee Stock Option Plan (the "Zenith 1992 Plan"), outstanding
IVAX Stock Options granted under the Zenith 1990 Directors' Stock Option Plan
(the "Zenith Directors' Plan"), and outstanding IVAX Stock Options granted under
the ▇▇▇▇▇ 1991
13
Stock Option Plan (the "▇▇▇▇▇ 1991 Plan"), (v) 196,649 shares of IVAX Common
Stock were reserved for issuance under the IVAX Employee Savings Plan (the "IVAX
Savings Plan") and the IVAX Employee Savings Plan (Puerto Rico) (the "IVAX
Savings Plan (Puerto Rico)" and, together with the IVAX 1994 Plan, the IVAX 1985
Plan, the Zenith 1992 Plan, the Zenith Directors' Plan, the ▇▇▇▇▇ 1991 Plan, and
the IVAX Savings Plan, the "IVAX Stock Plans") and (vi) 30,177,342 shares of
IVAX Common Stock were reserved for future issuance under the IVAX Stock Option
Agreement. Except for the IVAX Stock Options granted pursuant to the IVAX Stock
Plans and the IVAX Stock Option Agreement and shares of IVAX Common Stock
issuable pursuant to the IVAX Stock Plans, and upon the conversion of the IVAX
Subordinated Notes or pursuant to agreements or arrangements described in
Section 3.03 of the Disclosure Schedule delivered by IVAX to Bergen prior to the
execution of (and forming part of) this Agreement (the "IVAX Disclosure
Schedule"), there are no options, warrants or other rights, agreements,
arrangements or commitments of any character to which IVAX is a party or by
which IVAX is bound relating to the issued or unissued capital stock of IVAX or
any IVAX Subsidiary or obligating IVAX or any IVAX Subsidiary to issue or sell
any shares of capital stock of, or other equity interests in, IVAX or any IVAX
Subsidiary. Between September 30, 1996 and the date of this Agreement, an
aggregate of 264,250 IVAX Stock Options have been granted and no awards have
been made under the IVAX Stock Plans. All shares of IVAX Common Stock subject to
issuance as aforesaid, upon issuance prior to the Effective Time 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 in Section 3.03 of the IVAX Disclosure Schedule, there are no
outstanding contractual obligations of IVAX or any IVAX Subsidiary to
repurchase, redeem or otherwise acquire any shares of IVAX Common Stock or any
capital stock of any IVAX Subsidiary. Except as disclosed in Section 3.03 of the
IVAX Disclosure Schedule, each outstanding share of capital stock of each IVAX
Subsidiary is duly authorized, validly issued, fully paid and nonassessable and
each such share owned by IVAX or another IVAX Subsidiary is free and clear of
all security interests, liens, claims, pledges, options, rights of first
refusal, agreements, limitations on IVAX's or such other IVAX Subsidiary's
voting rights, charges and other encumbrances of any nature whatsoever, except
where the failure to own such shares free and clear would not, individually or
in the aggregate, have an IVAX Material Adverse Effect. Except as set forth in
Section 3.03 of the IVAX Disclosure Schedule, there are no material outstanding
contractual obligations of IVAX or any IVAX Subsidiary to provide funds to, or
make any material investment (in the form of a loan, capital contribution or
otherwise) in, any IVAX Subsidiary or any other person.
SECTION 3.04. Authority Relative to this Agreement and the
IVAX Stock Option Agreement. IVAX has all necessary corporate power and
authority to execute and deliver this Agreement and the IVAX Stock Option
Agreement, to perform its obligations hereunder and thereunder and to consummate
the IVAX Merger. The execution and delivery of this Agreement and the IVAX Stock
Option Agreement by IVAX and the consummation
14
by IVAX of the Mergers contemplated hereby and thereby have been duly and
validly authorized by all necessary corporate action, and no other corporate
proceedings on the part of IVAX are necessary to authorize this Agreement or the
IVAX Stock Option Agreement or to consummate such Mergers (other than the
approval of this Agreement and the Mergers contemplated hereby by the holders of
a majority of the outstanding shares of IVAX Common Stock entitled to vote with
respect thereto at the IVAX Shareholders' Meeting and the filing and recordation
of the Articles of Merger as required by the FBCA). The IVAX Voting Agreement
and the IVAX Stock Option Agreement are not required to be adopted by the Board
of Directors of IVAX for purposes of Section 607.0902 of the FBCA or any other
Law of similar effect applicable to IVAX. This Agreement and the IVAX Stock
Option Agreement have been duly executed and delivered by IVAX and, assuming the
due authorization, execution and delivery by the other parties hereto and
thereto, constitute legal, valid and binding obligations of IVAX, enforceable
against IVAX in accordance with their terms.
SECTION 3.05. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement and the IVAX Stock Option Agreement
by IVAX do not, and the performance by IVAX of its obligations hereunder and
thereunder and the consummation of the Mergers will not, (i) conflict with or
violate any provision of the Articles of Incorporation or Bylaws of IVAX or any
equivalent organizational documents of any IVAX Subsidiary, (ii) assuming that
all consents, approvals, authorizations and permits described in Section 3.05(b)
have been obtained and all filings and notifications described in Section
3.05(b) have been made, conflict with or violate any Law applicable to IVAX or
any IVAX Subsidiary or by which any property or asset of IVAX or any IVAX
Subsidiary is bound or affected or (iii) except as set forth in Section 3.05(a)
of the IVAX Disclosure Schedule, result in any breach of or constitute a default
(or an event which with the giving of notice or lapse of time or both would
become a default) under, or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of IVAX or any IVAX Subsidiary pursuant to,
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation, except, with respect to
clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults
or other occurrences which would neither, individually or in the aggregate, (A)
have an IVAX Material Adverse Effect nor (B) prevent or materially delay the
performance by IVAX of its obligations pursuant to this Agreement, the IVAX
Stock Option Agreement or the consummation of the Mergers.
(b) The execution and delivery of this Agreement and the IVAX
Stock Option Agreement by IVAX do not, and the performance by IVAX of its
obligations hereunder and thereunder or the consummation of the Mergers will
not, require any consent, approval, authorization or permit of, or filing by
IVAX with or notification by IVAX to, any United States federal, state or local
or any foreign governmental, regulatory or administrative authority, agency or
commission or any court, tribunal or arbitral body (a "Governmental
15
Entity"), except (i) applicable requirements of the Securities Exchange Act of
1934, as amended (together with the rules and regulations promulgated
thereunder, the "Exchange Act"), the Securities Act of 1933, as amended
(together with the rules and regulations promulgated thereunder, the "Securities
Act"), state securities or "blue sky" laws ("Blue Sky Laws"), the rules and
regulations of the American Stock Exchange ("AMEX"), state takeover laws, the
premerger notification requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended, and the rules and regulations thereunder
(the "HSR Act"), the filing and recordation of the IVAX Articles of Merger as
required by the FBCA, and as set forth in Section 3.05(b) of the IVAX Disclosure
Schedule, and (ii) where failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
(A) prevent or materially delay the performance by IVAX of its obligations
pursuant to this Agreement or the IVAX Stock Option Agreement and the
consummation of the Mergers or (B) individually or in the aggregate have an IVAX
Material Adverse Effect.
SECTION 3.06. Permits; Compliance with Laws. (a) Each of IVAX
and the IVAX Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, establishment registrations, product listings,
permits, easements, variances, exceptions, consents, certificates, approvals and
orders of any Governmental Entity, including, without limitation, the United
States Food and Drug Administration (the "FDA"), United States Drug Enforcement
Administration (the "DEA"), and similar authorities in other jurisdictions,
necessary for IVAX or any IVAX Subsidiary to own, lease and operate its
properties or to produce, store, distribute and market its products or otherwise
to carry on its business as it is now being conducted (the "IVAX Permits"),
except where the failure to have, or the suspension or cancellation of, any of
the IVAX Permits would not, individually or in the aggregate, have an IVAX
Material Adverse Effect, and, as of the date of this Agreement, no suspension or
cancellation of any of the IVAX Permits is pending or, to the knowledge of IVAX,
threatened, except where the failure to have, or the suspension or cancellation
of, any of the IVAX Permits would not, individually or in the aggregate, have an
IVAX Material Adverse Effect. Neither IVAX nor any IVAX Subsidiary is in
conflict with, or in default or violation of, (i) any Law applicable to IVAX or
any IVAX Subsidiary or by which any property or asset of IVAX or any IVAX
Subsidiary is bound or affected or (ii) any IVAX Permits, except in the case of
clauses (i) and (ii) for any such conflicts, defaults or violations that would
not, individually or in the aggregate, have an IVAX Material Adverse Effect. As
used in this Agreement, "Law" means any federal, state or local statute, law,
ordinance, regulation, rule, code, order, other requirement or rule of law of
the United States or any other jurisdiction, including, without limitation, the
Federal Food, Drug, and Cosmetic Act (the "FDCA"), the Controlled Substances
Act, and any other similar act or law.
(b) Except as disclosed in the IVAX Reports or in Section
3.06(b) of the IVAX Disclosure Schedule or as would not, individually or in the
aggregate, have an IVAX Material Adverse Effect:
16
(i) all manufacturing operations of IVAX and the IVAX
Subsidiaries are being conducted in substantial compliance with
applicable good manufacturing practices;
(ii) all necessary clearances or approvals from governmental
agencies for all drug and device products which are manufactured or, to
the knowledge of IVAX, sold by IVAX and the IVAX Subsidiaries have been
obtained, and IVAX and the IVAX Subsidiaries are in substantial
compliance with the most current form of each applicable clearance or
approval with respect to the manufacture, storage, distribution,
promotion and sale by IVAX and the IVAX Subsidiaries of such products;
(iii) to the knowledge of IVAX, all of the clinical studies
which have been, or are being, conducted by or for IVAX and the IVAX
Subsidiaries are being conducted in substantial compliance with
generally accepted good clinical practices and all applicable
government regulatory requirements;
(iv) as of the date of this Agreement, neither IVAX nor any of
the IVAX Subsidiaries has received written notice of any petition or
other attempt by a brand name drug company to have the therapeutic
equivalence rating of an IVAX or IVAX Subsidiary product withheld or
altered;
(v) none of IVAX, the IVAX Subsidiaries or any of their
respective officers, employees or agents (during the term of such
person's employment by IVAX or an IVAX Subsidiary or while acting as an
agent of IVAX or an IVAX Subsidiary, or, to IVAX's actual knowledge,
prior to such employment) has made any untrue statement of a material
fact or fraudulent statement to the FDA or any similar governmental
agency, failed to disclose a material fact required to be disclosed to
the FDA or similar governmental agency, or committed an act, made a
statement or failed to make a statement that could reasonably be
expected to provide a basis for the FDA or similar governmental agency
to invoke its policy respecting "Fraud, Untrue Statements of Material
Facts, Bribery, and Illegal Gratuities" or similar governmental policy,
rule, regulation or law;
(vi) neither IVAX nor any of the IVAX Subsidiaries has
received any written notice that the FDA or any similar governmental
agency has commenced, or threatened to initiate, any action to withdraw
its approval or request the recall of any product of IVAX or any of the
IVAX Subsidiaries, or commenced, or overtly threatened to initiate, any
action to enjoin production at any facility of IVAX or any of the IVAX
Subsidiaries;
(vii) as to each article of drug, device, cosmetic or vitamin
manufactured and/or, to the knowledge of IVAX, distributed by IVAX or
any of the IVAX
17
Subsidiaries, such article is not adulterated or misbranded within the
meaning of the FDCA or any similar governmental act or Law of any
jurisdiction; and
(viii) none of IVAX, the IVAX Subsidiaries or any of their
respective officers, employees or agents (during the term of such
person's employment by IVAX or an IVAX Subsidiary or while acting as an
agent of IVAX or an IVAX Subsidiary, or, to IVAX's knowledge, prior to
such employment), subsidiaries or affiliates has been convicted of any
crime or engaged in any conduct for which debarment or similar
punishment is mandated or permitted by any applicable Law.
SECTION 3.07. SEC Filings; Financial Statements. (a) Except as
disclosed in Section 3.07 of the IVAX Disclosure Schedule, IVAX has timely filed
all forms, reports and documents required to be filed by it with the SEC and the
AMEX since January 1, 1994 through the date of this Agreement (collectively and
as amended, the "IVAX Reports"). Each IVAX Report (i) was prepared in accordance
with the requirements of the Securities Act, the Exchange Act or AMEX, as the
case may be, and (ii) did not at the time it was filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. No IVAX
Subsidiary is subject to the periodic reporting requirements of the Exchange Act
or required to file any form, report or other document with the SEC, AMEX, any
other stock exchange or any other comparable Governmental Entity.
(b) Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in the IVAX Reports was prepared in
accordance with United States generally accepted accounting principles ("U.S.
GAAP") applied on a consistent basis throughout the periods indicated (except as
may be indicated in the notes thereto) and each presented fairly, in all
material respects, the consolidated financial position of IVAX and the
consolidated IVAX Subsidiaries as at the respective dates thereof and for the
respective periods indicated therein, except as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring year-end
adjustments which were not and are not expected, individually or in the
aggregate, to have an IVAX Material Adverse Effect).
(c) Except as and to the extent set forth or reserved against
on the consolidated balance sheet of IVAX and its Subsidiaries as reported in
the IVAX Reports, including the notes thereto, none of IVAX or any IVAX
Subsidiary has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) that would be required to be reflected on a
balance sheet or in notes thereto prepared in accordance with U.S. GAAP, except
for liabilities or obligations incurred in the ordinary course of business since
January 1, 1996 that would not, individually or in the aggregate, have an IVAX
Material Adverse Effect.
18
SECTION 3.08. Absence of Certain Changes or Events. Since
January 1, 1996, except as contemplated by or as disclosed in this Agreement, as
set forth in Section 3.08 of the IVAX Disclosure Schedule or as disclosed in any
IVAX Report filed since January 1, 1996, IVAX and the IVAX Subsidiaries have
conducted their businesses only in the ordinary course and in a manner
consistent with past practice and, since such date, there has not been (i) any
IVAX Material Adverse Effect excluding any changes and effects resulting from
changes in economic, regulatory or political conditions or changes in conditions
generally applicable to the industries in which IVAX and the IVAX Subsidiaries
are involved, (ii) any event that could reasonably be expected to prevent or
materially delay the performance of its obligations pursuant to this Agreement
and the consummation of the Mergers by IVAX, (iii) any material change by IVAX
in its accounting methods, principles or practices, (iv) any declaration,
setting aside or payment of any dividend or distribution in respect of the
shares of IVAX Common Stock or any redemption, purchase or other acquisition of
any of IVAX's securities or (v) any increase in the compensation or benefits or
establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase or other employee
benefit plan, or any other increase in the compensation payable or to become
payable to any executive officers of IVAX or any IVAX Subsidiary except in the
ordinary course of business consistent with past practice.
SECTION 3.09. Employee Benefit Plans; Labor Matters. (a) With
respect to each employee benefit plan, program, arrangement and contract
(including, without limitation, any "employee benefit plan", as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) maintained or contributed to by IVAX or any IVAX Subsidiary, or with
respect to which IVAX or any IVAX Subsidiary could incur liability under Section
4069, 4212(c) or 4204 of ERISA (the "IVAX Benefit Plans"), IVAX has delivered or
made available to Bergen a true and correct copy of (i) such IVAX Benefit Plan
and the most recent summary plan description related to each IVAX Benefit Plan
for which a summary plan description is required, (ii) each trust agreement or
other funding arrangement relating to such IVAX Benefit Plan, (iii) the most
recent annual report (Form 5500) filed with the Internal Revenue Service (the
"IRS"), (iv) the most recent actuarial report or financial statement relating to
an IVAX Benefit Plan and (v) the most recent determination letter issued by the
IRS with respect to any IVAX Benefit Plan qualified under Section 401(a) of the
Code.
(b) Each IVAX Benefit Plan has been administered in all
material respects in accordance with its terms and all contributions required to
be made under the terms of any of the IVAX Benefit Plans as of the date of this
Agreement have been timely made or have been reflected on the most recent
consolidated balance sheet filed or incorporated by reference in the IVAX
Reports prior to the date of this Agreement. Except as set forth in Section
3.09(b) of the IVAX Disclosure Schedule, with respect to the IVAX Benefit Plans,
19
no event has occurred and, to the knowledge of IVAX, there exists no condition
or set of circumstances in connection with which IVAX or any IVAX Subsidiary
could be subject to any liability under the terms of such IVAX Benefit Plans,
ERISA, the Code or any other applicable Law which would individually or in the
aggregate have an IVAX Material Adverse Effect.
(c) Except as set forth in Section 3.09(c) of the IVAX
Disclosure Schedule or except as would not have an IVAX Material Adverse Effect,
with respect to each IVAX Benefit Plan that is not subject to United States Law
(an "IVAX Foreign Benefit Plan"):
(i) all employer and employee contributions to each IVAX
Foreign Benefit Plan required by Law or by the terms of such IVAX
Foreign Benefit Plan have been made or, if applicable, accrued in
accordance with normal accounting practices;
(ii) the fair market value of the assets of each funded IVAX
Foreign Benefit Plan, the liability of each insurer for any IVAX
Foreign Benefit Plan funded through insurance or the book reserve
established for any IVAX Foreign Benefit Plan, together with any
accrued contributions, is sufficient to procure or provide for the
accrued benefit obligations, as of the Effective Time, with respect to
all current and former participants in such plan according to the
actuarial assumptions and valuations most recently used to determine
employer contributions to such IVAX Foreign Benefit Plan and no
transaction contemplated by this Agreement shall cause such assets or
insurance obligations to be less than such benefit obligations; and
(iii) each IVAX Foreign Benefit Plan required to be registered
has been registered and has been maintained in good standing with the
appropriate regulatory authorities.
(d) Except as set forth in Section 3.09(d) of the IVAX
Disclosure Schedule, neither IVAX nor any IVAX Subsidiary is a party to any
collective bargaining or other labor union contract applicable to persons
employed by IVAX or any IVAX Subsidiary and no collective bargaining agreement
is being negotiated by IVAX or any IVAX Subsidiary. As of the date of this
Agreement, there is no labor dispute, strike or work stoppage against IVAX or
any IVAX Subsidiary pending or, to the knowledge of IVAX, threatened which may
interfere with the respective business activities of IVAX or any IVAX
Subsidiary, except where such dispute, strike or work stoppage would not have an
IVAX Material Adverse Effect. As of the date of this Agreement, to the knowledge
of IVAX, none of IVAX, any IVAX Subsidiary, or any of their respective
representatives or employees has committed any unfair labor practice in
connection with the operation of the respective businesses of IVAX or any IVAX
Subsidiary, and there is no charge or complaint against IVAX or any IVAX
Subsidiary by the National Labor Relations Board or any comparable
20
governmental agency pending or threatened in writing, except where such unfair
labor practice, charge or complaint would not have an IVAX Material Adverse
Effect.
(e) IVAX has delivered to Bergen true and complete copies of
(i) all employment agreements with officers of IVAX and each IVAX Subsidiary
providing for annual compensation in excess of $250,000, (ii) all severance
plans, agreements, programs and policies of IVAX and each IVAX Subsidiary with
or relating to their respective employees, and (iii) all plans, programs,
agreements and other arrangements of IVAX and each IVAX Subsidiary with or
relating to their respective employees which contain "change of control"
provisions.
(f) Except as provided in Section 3.09(f) of the IVAX
Disclosure Schedule or as otherwise required by Law, no IVAX Benefit Plan
provides retiree medical or retiree life insurance benefits to any person.
SECTION 3.10. Accounting and Tax Matters. (a) Except as
disclosed in the IVAX Reports, neither IVAX nor, to the knowledge of IVAX, any
of its affiliates has taken or agreed to take any action (other than actions
contemplated by this Agreement) that would prevent the Mergers from qualifying
for "pooling of interests" accounting treatment under applicable United States
accounting rules, including, without limitation, applicable SEC accounting
standards, or would prevent the Mergers from constituting a transaction
qualifying under Section 368(a) of the Code. IVAX is not aware of any agreement,
plan or other circumstance that would prevent the Mergers from so qualifying
under Section 368(a) of the Code.
(b) The representations and warranties made in IVAX's letter
of compliance with pooling of interest criteria addressed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇") are true as of the date hereof.
SECTION 3.11. Contracts; Debt Instruments. Except as disclosed
in the IVAX Reports or in Section 3.11 of the IVAX Disclosure Schedule, there is
no contract or agreement that is material to the business, financial condition
or results of operations of IVAX and the IVAX Subsidiaries taken as a whole
(each, an "IVAX Material Contract"). Except as disclosed in the IVAX Reports or
in Section 3.11 of the IVAX Disclosure Schedule, neither IVAX nor any IVAX
Subsidiary is in violation of or in default under (nor does there exist any
condition which with the passage of time or the giving of notice would cause
such a violation of or default under) any loan or credit agreement, note, bond,
mortgage, indenture or lease, or any other contract, agreement, arrangement or
understanding to which it is a party or by which it or any of its properties or
assets is bound, except for violations or defaults that would not, individually
or in the aggregate, result in an IVAX Material Adverse Effect. Set forth in
Section 3.11 of the IVAX Disclosure Schedule is a description of any material
changes to the amount and terms of the indebtedness of
21
IVAX and its subsidiaries as described in the notes to the financial statements
incorporated in the IVAX 1995 10-K.
SECTION 3.12. Litigation. Except as disclosed in the IVAX
Reports or in Section 3.12 of the IVAX Disclosure Schedule, there is no suit,
claim, action, proceeding or investigation pending or, to the knowledge of IVAX,
threatened against IVAX or any IVAX Subsidiary before any Governmental Entity
that, individually or in the aggregate, is reasonably likely to have an IVAX
Material Adverse Effect, and, except as disclosed to Bergen, to the knowledge of
IVAX, there are no existing facts or circumstances that would be reasonably
likely to result in such a suit, claim, action, proceeding or investigation.
Except as disclosed to Bergen, IVAX is not aware of any facts or circumstances
which would result in the denial of insurance coverage under policies issued to
IVAX and the IVAX Subsidiaries in respect of such suits, claims, actions,
proceedings and investigations, except in any case as would not, individually or
in the aggregate, have an IVAX Material Adverse Effect. Except as disclosed in
the IVAX Reports or in Section 3.12 of the IVAX Disclosure Schedule, neither
IVAX nor any IVAX Subsidiary is subject to any outstanding order, writ,
injunction or decree which, insofar as can be reasonably foreseen, individually
or in the aggregate, would have an IVAX Material Adverse Effect.
SECTION 3.13. Environmental Matters. Except as disclosed in
the IVAX Reports or in Section 3.13 of the IVAX Disclosure Schedule or as would
not, individually or in the aggregate, have an IVAX Material Adverse Effect:
(a) IVAX and the IVAX Subsidiaries are in compliance with all
applicable Environmental Laws. All past noncompliance of Eye or any Eye
Subsidiary with Environmental Laws or Environmental Permits has been
resolved without any pending, ongoing or future obligation, cost or
liability; and
(b) neither IVAX nor any IVAX Subsidiary has released a
Hazardous Material at, or transported a Hazardous Material to or from,
any real property currently or formerly owned, leased or occupied by
IVAX or any IVAX Subsidiary in violation of any Environmental Law.
For purposes of this Agreement:
"Environmental Law" means any federal, state or local statute,
law, ordinance, regulation, rule, code or order of the United States or
any other jurisdiction and any enforceable judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent decree or judgment, relating to pollution or protection of the
environment or natural resources, including, without limitation, those
relating to the use, handling, transportation, treatment, storage,
disposal, release or discharge of Hazardous Material, as in effect as
of the date of this Agreement.
22
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under or
issued pursuant to any applicable Environmental Law.
"Hazardous Material" means (i) any petroleum, petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls or (ii) any
chemical, material or substance defined or regulated as toxic or
hazardous or as a pollutant or contaminant or waste under any
applicable Environmental Law.
SECTION 3.14. Intellectual Property. Except as set forth in
Section 3.14 of the IVAX Disclosure Schedule, or as would not, individually or
in the aggregate, have an IVAX Material Adverse Effect, IVAX and the IVAX
Subsidiaries own or possess adequate licenses or other valid rights to use all
patents, patent rights, trademarks, trademark rights, trade names, trade dress,
trade name rights, copyrights, service marks, trade secrets, applications for
trademarks and for service marks, know-how and other proprietary rights and
information used or held for use in connection with the respective businesses of
IVAX and the IVAX Subsidiaries as currently conducted, and IVAX is unaware of
any assertion or claim challenging the validity of any of the foregoing. Except
as set forth in Section 3.14 of the IVAX Disclosure Schedule, the conduct of the
respective businesses of IVAX and the IVAX Subsidiaries as currently conducted
does not conflict in any way with any patent, patent right, license, trademark,
trademark right, trade dress, trade name, trade name right, service ▇▇▇▇ or
copyright of any third party that, individually or in the aggregate, would have
an IVAX Material Adverse Effect. To the knowledge of IVAX, there are no
infringements of any proprietary rights owned by or licensed by or to IVAX or
any IVAX Subsidiary that, individually or in the aggregate, would have an IVAX
Material Adverse Effect.
SECTION 3.15. Taxes. Except as set forth in Section 3.15 of
the IVAX Disclosure Schedule and except for such matters that would not have an
IVAX Material Adverse Effect, (a) IVAX and each of the IVAX Subsidiaries have
timely filed or shall timely file all returns and reports required to be filed
by them with any taxing authority with respect to Taxes for any period ending on
or before the Effective Time, taking into account any extension of time to file
granted to or obtained on behalf of IVAX and the IVAX Subsidiaries, (b) all
Taxes shown to be payable on such returns or reports that are due prior to the
Effective Time have been paid or shall be paid, (c) as of the date hereof, no
deficiency for any amount of Tax has been asserted or assessed by a taxing
authority against IVAX or any of the IVAX Subsidiaries and (d) IVAX and each of
the IVAX Subsidiaries have provided adequate reserves in their financial
statements for any Taxes that have not been paid, whether or not shown as being
due on any returns. As used in this Agreement, "Taxes" shall mean any and all
taxes, fees, levies, duties, tariffs, imposts and other charges of any kind
(together with any and all interest, penalties, additions to tax and additional
23
amounts imposed with respect thereto) imposed by any government or taxing
authority, including, without limitation, taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation or net worth; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer,
value-added or gains taxes; license, registration and documentation fees; and
customers' duties, tariffs and similar charges.
SECTION 3.16. Pooling Affiliates. Section 3.16 of the IVAX
Disclosure Schedule sets forth the names and addresses of those persons who are,
in IVAX's reasonable judgment, "affiliates" within the meaning of Rule 145 of
the rules and regulations promulgated under the Securities Act or applicable SEC
accounting releases with respect to pooling of interests accounting treatment
(each such person, a "Pooling Affiliate") of IVAX.
SECTION 3.17. Suppliers. As of the date of this Agreement,
except as set forth on Section 3.17 of the IVAX Disclosure Schedule, no material
supplier of IVAX has indicated that it will stop or materially decrease
supplying materials, products or services to IVAX, the effect of which would
have an IVAX Material Adverse Effect.
SECTION 3.18. Opinion of Financial Advisor. ▇▇▇▇▇▇ Brothers,
Inc. ("▇▇▇▇▇▇ Brothers") has delivered to the board of directors of IVAX its
written opinion to the effect that, as of November 8, 1996, the IVAX Exchange
Ratio to be offered to the stockholders of IVAX in the proposed transaction is
fair to such stockholders. ▇▇▇▇▇▇ Brothers has authorized the inclusion of its
opinion in the Joint Proxy Statement and IVAX shall promptly, after the date of
this Agreement, deliver a signed copy of such opinion to Bergen.
SECTION 3.19. Brokers. No broker, finder or investment banker
(other than ▇▇▇▇▇▇ Brothers) is entitled to any brokerage, finder's or other fee
or commission in connection with the Mergers based upon arrangements made by or
on behalf of IVAX. IVAX has heretofore made available to Bergen complete and
correct copies of all agreements between IVAX and ▇▇▇▇▇▇ Brothers pursuant to
which such firm would be entitled to any payment relating to the Mergers.
24
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BERGEN
Bergen hereby represents and warrants to IVAX that:
SECTION 4.01. Organization and Qualification; Subsidiaries.
Each of Bergen and each subsidiary of Bergen (the "Bergen Subsidiaries") has
been duly organized and is validly existing and in good standing (to the extent
applicable) under the laws of the jurisdiction of its incorporation or
organization, as the case may be, and has the requisite corporate power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such power, authority and governmental approvals would not, individually or in
the aggregate, have a Bergen Material Adverse Effect. Each of Bergen and each
Bergen Subsidiary is duly qualified or licensed to do business, and is in good
standing (to the extent applicable), in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that would not, individually or in
the aggregate, have a Bergen Material Adverse Effect.
SECTION 4.02. Certificate of Incorporation and Bylaws. Except
as set forth in Section 4.02 of the Bergen Disclosure Schedule, the copies of
Bergen's Certificate of Incorporation and Bylaws that are incorporated by
reference as exhibits to Bergen's Form 10-K for the period ending September 30,
1995 (the "Bergen 1995 10-K") are complete and correct copies thereof. Such
Certificate of Incorporation and Bylaws are in full force and effect. Bergen is
not in violation of any of the provisions of its Certificate of Incorporation or
Bylaws.
SECTION 4.03. Capitalization. The authorized capital stock of
Bergen consists of (i) 100,000,000 shares of Bergen Common Stock and (ii)
3,000,000 shares of preferred stock, no par value ("Bergen Preferred Stock"),
including a series of 400,000 shares of Bergen Preferred Stock designated as
Series A Junior Participating Preferred Stock, no shares of which are
outstanding as of the date hereof. As of September 30, 1996, (i) 40,062,382
shares of Bergen Common Stock were issued and outstanding, all of which were
validly issued, fully paid and nonassessable and (ii) 4,354,558 shares of Bergen
Common Stock were held in the treasury of Bergen or by the Bergen Subsidiaries.
As of November 7, 1996, (i) 1,889,426 shares of Bergen Common Stock were
reserved for future issuance pursuant to outstanding Bergen Stock Options issued
under the Amended and Restated Bergen 1989 Stock Incentive Plan (the "Bergen
Stock Incentive Plan") and outstanding Bergen Stock Options issued under the
Bergen 1983 Stock Option Plan (the "Bergen 1983 Plan" and, together with the
Bergen Stock Incentive Plan, the "Bergen Stock
25
Plans") and (ii) 9,953,076 shares of Bergen Common Stock were reserved for
future issuance under the Bergen Stock Option Agreement. Except for the Bergen
Stock Options granted pursuant to the Bergen Stock Plans and the Bergen Stock
Option Agreement, shares of Bergen Common Stock issuable pursuant to the Bergen
Stock Option Agreement and the Bergen Stock Plans or pursuant to agreements or
arrangements described in Section 4.03 of the Disclosure Schedule delivered by
Bergen prior to the execution of (and forming part of) this Agreement (the
"Bergen Disclosure Schedule"), there are no options, warrants or other rights,
agreements, arrangements or commitments of any character to which Bergen is a
party or by which Bergen is bound relating to the issued or unissued capital
stock of Bergen or any Bergen Subsidiary or obligating Bergen or any Bergen
Subsidiary to issue or sell any shares of capital stock of, or other equity
interests in, Bergen or any Bergen Subsidiary. Between September 30, 1996 and
the date of this Agreement, an aggregate of 229,500 Bergen Stock Options have
been granted and no awards have been made under the Bergen Stock Incentive Plan.
As of the date hereof, no shares of Bergen Preferred Stock are issued and
outstanding. All shares of Bergen Common Stock subject to issuance as aforesaid,
upon issuance prior to the Effective Time 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. There are no outstanding
contractual obligations of Bergen or any Bergen Subsidiary to repurchase, redeem
or otherwise acquire any shares of Bergen Common Stock or any capital stock of
any Bergen Subsidiary. Each outstanding share of capital stock of each Bergen
Subsidiary is duly authorized, validly issued, fully paid and nonassessable and
each such share owned by Bergen or another Bergen Subsidiary is free and clear
of all security interests, liens, claims, pledges, options, rights of first
refusal, agreements, limitations on Bergen's or such other Bergen Subsidiary's
voting rights, charges and other encumbrances of any nature whatsoever, except
where the failure to own such shares free and clear would not, individually or
in the aggregate, have a Bergen Material Adverse Effect. Except as set forth in
Section 4.03 of the Bergen Disclosure Schedule, there are no material
outstanding contractual obligations of Bergen or any Bergen Subsidiary to
provide funds to, or make any material investment (in the form of a loan,
capital contribution or otherwise) in, any Bergen Subsidiary or any other
person.
SECTION 4.04. Authority Relative to this Agreement and the
Bergen Stock Option Agreement. Bergen has all necessary corporate power and
authority to execute and deliver this Agreement and the Bergen Stock Option
Agreement, to perform its obligations hereunder and thereunder and to consummate
the Bergen Merger. The execution and delivery of this Agreement and the Bergen
Stock Option Agreement by Bergen and the consummation by Bergen of the Mergers
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action, and no other corporate proceedings on the part of
Bergen are necessary to authorize this Agreement or the Bergen Stock Option
Agreement or to consummate such Mergers (other than the approval of this
Agreement and the Mergers contemplated hereby by the holders of a majority of
the votes cast by Bergen's shareholders with respect thereto at the Bergen
Shareholders' Meeting and the filing and
26
recordation of the Certificate of Merger as required by the NJBCA). This
Agreement and the Bergen Stock Option Agreement have been duly executed and
delivered by Bergen and, assuming the due authorization, execution and delivery
by the other parties hereto and thereto, constitute legal, valid and binding
obligations of Bergen, enforceable against Bergen in accordance with their
terms. The Rights Agreement, dated as of February 8, 1994 (the "Bergen Rights
Agreement"), between Bergen and Chemical Trust Company of California, a
California banking corporation, has been amended to exempt IVAX from the
definition of "Acquiring Person" contained in the Bergen Rights Agreement, and
the Mergers and the Bergen Stock Option Agreement and Bergen Voting Agreement
have each been approved by the Board of Directors of Bergen for the purposes of
Sections 14A:10A-4 and 14A:10A-5 of the NJBCA, and any other Law of similar
effect applicable to Bergen.
SECTION 4.05. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement and the Bergen Stock Option
Agreement by Bergen do not, and the performance by Bergen of its obligations
hereunder and thereunder and the consummation of the Mergers will not, (i)
conflict with or violate any provision of the Certificate of Incorporation or
Bylaws of Bergen or any equivalent organizational documents of any Bergen
Subsidiary, (ii) assuming that all consents, approvals, authorizations and
permits described in Section 4.05(b) have been obtained and all filings and
notifications described in Section 4.05(b) have been made, conflict with or
violate any Law applicable to Bergen or any Bergen Subsidiary or by which any
property or asset of Bergen or any Bergen Subsidiary is bound or affected or
(iii) except as set forth in Section 4.05(a) of the Bergen Disclosure Schedule,
result in any breach of or constitute a default (or an event which with the
giving of notice or lapse of time or both would become a default) under, or give
to others any right of termination, amendment, acceleration or cancellation of,
or result in the creation of a lien or other encumbrance on any property or
asset of Bergen or any Bergen Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation, except, with respect to clauses (ii) and (iii), for
any such conflicts, violations, breaches, defaults or other occurrences which
would neither, individually or in the aggregate, (A) have a Bergen Material
Adverse Effect nor (B) prevent or materially delay the performance by Bergen of
its obligations pursuant to this Agreement, the Bergen Stock Option Agreement or
the consummation of the Mergers.
(b) The execution and delivery of this Agreement and the
Bergen Stock Option Agreement by Bergen do not, and the performance by Bergen of
its obligations hereunder and thereunder and the consummation of the Mergers
will not, require any consent, approval, authorization or permit of, or filing
by Bergen with or notification by Bergen to, any Governmental Entity, except (i)
for applicable requirements of the Exchange Act, the Securities Act, state
securities or Blue Sky Laws, the rules and regulations of the New York Stock
Exchange (the "NYSE"), state takeover laws, the premerger notification
requirements of the HSR Act and the filing and recordation of the Certificate of
Merger as required by the NJBCA and (ii) where failure to obtain such consents,
approvals,
27
authorizations or permits, or to make such filings or notifications, would not
(A) prevent or materially delay the performance by Bergen of its obligations
pursuant to this Agreement or the Bergen Stock Option Agreement and the
consummation of the Mergers or (B) individually or in the aggregate, have a
Bergen Material Adverse Effect.
SECTION 4.06. Permits; Compliance with Laws. (a) Each of
Bergen and the Bergen Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, establishment registrations, product listings,
permits, easements, variances, exceptions, consents, certificates, approvals and
orders of any Governmental Entity, including, without limitation, the FDA, the
DEA and similar authorities in other jurisdictions, necessary for Bergen or any
Bergen Subsidiary to own, lease and operate its properties or to store,
distribute and market its products or otherwise to carry on its business as it
is now being conducted (the "Bergen Permits"), except where the failure to have,
or the suspension or cancellation of, any of the Bergen Permits would not,
individually or in the aggregate, have a Bergen Material Adverse Effect, and, as
of the date of this Agreement, no suspension or cancellation of any of the
Bergen Permits is pending or, to the knowledge of Bergen, threatened, except
where the failure to have, or the suspension or cancellation of, any of the
Bergen Permits would not, individually or in the aggregate, have a Bergen
Material Adverse Effect. Neither Bergen nor any Bergen Subsidiary is in conflict
with, or in default or violation of, (i) any Law applicable to Bergen or any
Bergen Subsidiary or by which any property or asset of Bergen or any Bergen
Subsidiary is bound or affected or (ii) any Bergen Permits, except in the case
of clauses (i) and (ii) for any such conflicts, defaults or violations that
would not, individually or in the aggregate, have a Bergen Material Adverse
Effect.
(b) Neither Bergen nor any of the Bergen Subsidiaries engages
in any manufacturing activities or clinical studies.
(c) Except as disclosed in the Bergen Reports or as would not,
individually or in the aggregate, have a Bergen Material Adverse Effect:
(i) all necessary clearances or approvals from governmental
agencies for all drug and device products which are sold by Bergen and
the Bergen Subsidiaries have, to the knowledge of Bergen, been obtained
and Bergen and the Bergen Subsidiaries are in substantial compliance
with the most current form of each applicable clearance or approval
with respect to the storage, distribution, promotion and sale by Bergen
and the Bergen Subsidiaries of such products;
(ii) none of Bergen, the Bergen Subsidiaries or any of their
respective officers, employees or agents (during the term of such
Person's employment by Bergen or a Bergen Subsidiary or while acting as
an agent of Bergen or a Bergen subsidiary, or, to Bergen's actual
knowledge, prior to such employment) has made any untrue statement of a
material fact or fraudulent statement to the FDA or any
28
similar governmental agency, failed to disclose a material fact
required to be disclosed to the FDA or similar governmental agency, or
committed an act, made a statement or failed to make a statement that
could reasonably be expected to provide a basis for the FDA or similar
governmental agency to invoke its policy respecting "Fraud, Untrue
Statements of Material Facts, Bribery, and Illegal Gratuities" or
similar governmental policy, rule, regulation or law;
(iii) neither Bergen nor any of the Bergen Subsidiaries has
received any written notice that the FDA or any similar governmental
agency has commenced, or threatened to initiate, any action to withdraw
its approval or request the recall of any product of Bergen or any of
the Bergen Subsidiaries, or commenced, or overtly threatened to
initiate, any action to enjoin production at any facility of Bergen or
any of the Bergen Subsidiaries;
(iv) as to each article of drug, device, cosmetic or vitamin
manufactured (directly or indirectly) and/or, to the knowledge of
Bergen, distributed by Bergen or any of the Bergen Subsidiaries, such
article is not adulterated or misbranded within the meaning of the FDCA
or any similar governmental act or Law of any jurisdiction; and
(v) none of Bergen, the Bergen Subsidiaries or any of their
respective officers, employees or agents (during the term of such
person's employment by Bergen or a Bergen Subsidiary or while acting as
an agent of Bergen or a Bergen Subsidiary, or, to Bergen's knowledge,
prior to such employment), subsidiaries or affiliates has been
convicted of any crime or engaged in any conduct for which debarment or
similar punishment is mandated or permitted by any applicable Law.
SECTION 4.07. SEC Filings; Financial Statements. (a) Bergen
has timely filed all forms, reports and documents required to be filed by it
with the SEC and the NYSE since January 1, 1994 through the date of this
Agreement (collectively and as amended, the "Bergen Reports"). Each Bergen
Report (i) was prepared in accordance with the requirements of the Securities
Act, the Exchange Act or the NYSE, as the case may be, and (ii) did not at the
time it was filed contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading. No Bergen Subsidiary is subject to the periodic
reporting requirements of the Exchange Act or required to file any form, report
or other document with the SEC, the NYSE, any other stock exchange or any other
comparable Governmental Entity.
(b) Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in the Bergen Reports was prepared in
accordance with U.S. GAAP applied on a consistent basis throughout the periods
indicated (except as may be
29
indicated in the notes thereto) and each presented fairly, in all material
respects, the consolidated financial position of Bergen and the consolidated
Bergen Subsidiaries as at the respective dates thereof and for the respective
periods indicated therein, except as otherwise noted therein (subject, in the
case of unaudited statements, to normal and recurring year-end adjustments which
were not and are not expected, individually or in the aggregate, to have a
Bergen Material Adverse Effect).
(c) Except as and to the extent set forth or reserved against
on the consolidated balance sheet of Bergen and its Subsidiaries as reported in
the Bergen Reports, including the notes thereto, none of Bergen or any Bergen
Subsidiary has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) that would be required to be reflected on a
balance sheet or in notes thereto prepared in accordance with U.S. GAAP, except
for liabilities or obligations incurred in the ordinary course of business since
October 1, 1995 that would not, individually or in the aggregate, have a Bergen
Material Adverse Effect.
SECTION 4.08. Absence of Certain Changes or Events. Since
October 1, 1995, except as contemplated by or as disclosed in this Agreement, as
set forth in Section 4.08 of the Bergen Disclosure Schedule or as disclosed in
any Bergen Report filed since October 1, 1995, Bergen and the Bergen
Subsidiaries have conducted their businesses only in the ordinary course and in
a manner consistent with past practice and, since such date, there has not been
(i) any Bergen Material Adverse Effect excluding any changes and effects
resulting from changes in economic, regulatory or political conditions or
changes in conditions generally applicable to the industries in which Bergen and
the Bergen Subsidiaries are involved, (ii) any event that could reasonably be
expected to prevent or materially delay the performance of its obligations
pursuant to this Agreement and the consummation of the Mergers by Bergen, (iii)
any material change by Bergen in its accounting methods, principles or
practices, (iv) any declaration, setting aside or payment of any dividend or
distribution in respect of the shares of Bergen Common Stock or any redemption,
purchase or other acquisition of any of Bergen's securities or (v) any increase
in the compensation or benefits or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing, stock
option (including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards), stock
purchase or other employee benefit plan, or any other increase in the
compensation payable or to become payable to any executive officers of Bergen or
any Bergen Subsidiary except in the ordinary course of business consistent with
past practice.
SECTION 4.09. Employee Benefit Plans; Labor Matters. (a) With
respect to each employee benefit plan, program, arrangement and contract
(including, without limitation, any "employee benefit plan", as defined in
Section 3(3) of ERISA) maintained or contributed to by Bergen or any Bergen
Subsidiary, or with respect to which Bergen or any Bergen Subsidiary could incur
liability under Section 4069, 4212(c) or 4204 of ERISA (the
30
"Bergen Benefit Plans"), Bergen has delivered or made available to IVAX a true
and correct copy of (i) such Bergen Benefit Plan and the most recent summary
plan description related to each Bergen Benefit Plan for which a summary plan
description is required, (ii) each trust agreement or other funding arrangement
relating to such Bergen Benefit Plan, (iii) the most recent annual report (Form
5500) filed with the IRS, (iv) the most recent actuarial report or financial
statement relating to a Bergen Benefit Plan subject to Title IV of ERISA and (v)
the most recent determination letter issued by the IRS with respect to any
Bergen Benefit Plan qualified under Section 401(a) of the Code.
(b) Each Bergen Benefit Plan has been administered in all
material respects in accordance with its terms and all contributions required to
be made under the terms of any of the Bergen Benefit Plans as of the date of
this Agreement have been timely made or have been reflected on the most recent
consolidated balance sheet filed or incorporated by reference in the Bergen
Reports prior to the date of this Agreement. With respect to the Bergen Benefit
Plans, no event has occurred and, to the knowledge of Bergen, there exists no
condition or set of circumstances in connection with which Bergen or any Bergen
Subsidiary could be subject to any liability under the terms of such Bergen
Benefit Plans, ERISA, the Code or any other applicable Law which would
individually or in the aggregate have a Bergen Material Adverse Effect.
(c) Except as would not have a Bergen Material Adverse Effect,
with respect to each Bergen Benefit Plan that is not subject to United States
Law (a "Bergen Foreign Benefit Plan"):
(i) all employer and employee contributions to each Bergen
Foreign Benefit Plan required by Law or by the terms of such Bergen
Foreign Benefit Plan have been made or, if applicable, accrued in
accordance with normal accounting practices;
(ii) the fair market value of the assets of each funded Bergen
Foreign Benefit Plan, the liability of each insurer for any Bergen
Foreign Benefit Plan funded through insurance or the book reserve
established for any Bergen Foreign Benefit Plan, together with any
accrued contributions, is sufficient to procure or provide for the
accrued benefit obligations, as of the Effective Time, with respect to
all current and former participants in such plan according to the
actuarial assumptions and valuations most recently used to determine
employer contributions to such Bergen Foreign Benefit Plan and no
transaction contemplated by this Agreement shall cause such assets or
insurance obligations to be less than such benefit obligations; and
(iii) each Bergen Foreign Benefit Plan required to be
registered has been registered and has been maintained in good standing
with the appropriate regulatory authorities.
31
(d) Except as set forth in Section 4.09(d) of the Bergen
Disclosure Schedule, neither Bergen nor any Bergen Subsidiary is a party to any
collective bargaining or other labor union contract applicable to persons
employed by Bergen or any Bergen Subsidiary and no collective bargaining
agreement is being negotiated by Bergen or any Bergen Subsidiary. As of the date
of this Agreement, there is no labor dispute, strike or work stoppage against
Bergen or any Bergen Subsidiary pending or, to the knowledge of Bergen,
threatened which may interfere with the respective business activities of Bergen
or any Bergen Subsidiary, except where such dispute, strike or work stoppage
would not have a Bergen Material Adverse Effect. As of the date of this
Agreement, to the knowledge of Bergen, none of Bergen, any Bergen Subsidiary, or
any of their respective representatives or employees has committed any unfair
labor practice in connection with the operation of the respective businesses of
Bergen or any Bergen Subsidiary, and there is no charge or complaint against
Bergen or any Bergen Subsidiary by the National Labor Relations Board or any
comparable governmental agency pending or threatened in writing, except where
such unfair labor practice, charge or complaint would not have a Bergen Material
Adverse Effect.
(e) Bergen has delivered to IVAX true and complete copies of
(i) all employment agreements with officers of Bergen and each Bergen Subsidiary
providing for annual compensation in excess of $250,000, (ii) all severance
plans, agreements, programs and policies of Bergen and each Bergen Subsidiary
with or relating to their respective employees and (iii) all plans, programs,
agreements and other arrangements of Bergen and each Bergen Subsidiary with or
relating to their respective employees which contain "change of control"
provisions.
(f) Except as provided in Section 4.09(f) of the Bergen
Disclosure Schedule or as otherwise required by Law, no Bergen Benefit Plan
provides retiree medical or retiree life insurance benefits to any person.
SECTION 4.10. Accounting and Tax Matters. (a) Except as
disclosed in the Bergen Reports, neither Bergen nor, to the knowledge of Bergen,
any of its affiliates has taken or agreed to take any action (other than actions
contemplated by this Agreement) that would prevent the Mergers from qualifying
for "pooling of interests" accounting treatment under applicable United States
accounting rules, including, without limitation, applicable SEC accounting
standards, or would prevent the Mergers from constituting a transaction
qualifying under Section 368(a) of the Code. Bergen is not aware of any
agreement, plan or other circumstance that would prevent the Mergers from so
qualifying under Section 368(a) of the Code.
(b) The representations and warranties made in Bergen's letter
of compliance with pooling of interest criteria addressed to Deloitte & Touche
LLP ("Deloitte & Touche") are true as of the date hereof.
32
SECTION 4.11. Contracts; Debt Instruments. Except as disclosed
in the Bergen Reports or in Section 4.11 of the Bergen Disclosure Schedule,
there is no contract or agreement that is material to the business, financial
condition or results of operations of Bergen and the Bergen Subsidiaries taken
as a whole (each, a "Bergen Material Contract"). Except as disclosed in the
Bergen Reports, neither Bergen nor any Bergen Subsidiary is in violation of or
in default under (nor does there exist any condition which with the passage of
time or the giving of notice would cause such a violation of or default under)
any loan or credit agreement, note, bond, mortgage, indenture or lease, or any
other contract, agreement, arrangement or understanding to which it is a party
or by which it or any of its properties or assets is bound, except for
violations or defaults that would not, individually or in the aggregate, result
in a Bergen Material Adverse Effect. Set forth in Section 4.11 of the Bergen
Disclosure Schedule is a description of any material changes to the amount and
terms of the indebtedness of Bergen and its subsidiaries as described in the
notes to the financial statements incorporated in the Bergen 1995 10-K.
SECTION 4.12. Litigation. Except as disclosed in the Bergen
Reports or in Section 4.12 of the Bergen Disclosure Schedule, there is no suit,
claim, action, proceeding or investigation pending or, to the knowledge of
Bergen, threatened against Bergen or any Bergen Subsidiary before any
Governmental Entity that, individually or in the aggregate, is reasonably likely
to have a Bergen Material Adverse Effect, and, except as disclosed to IVAX, to
the knowledge of Bergen, there are no existing facts or circumstances that would
be reasonably likely to result in such a suit, claim, action, proceeding or
investigation. Except as disclosed to IVAX, Bergen is not aware of any facts or
circumstances which would result in the denial of insurance coverage under
policies issued to Bergen and the Bergen Subsidiaries in respect of such suits,
claims, actions, proceedings and investigations, except in any case as would
not, individually or in the aggregate, have a Bergen Material Adverse Effect.
Except as disclosed in the Bergen Reports, neither Bergen nor any Bergen
Subsidiary is subject to any outstanding order, writ, injunction or decree
which, insofar as can be reasonably foreseen, individually or in the aggregate,
would have a Bergen Material Adverse Effect.
SECTION 4.13. Environmental Matters. Except as disclosed in
the Bergen Reports or as would not, individually or in the aggregate, have a
Bergen Material Adverse Effect:
(a) Bergen and the Bergen Subsidiaries are in compliance with
all applicable Environmental Laws. All past noncompliance of Bergen or
any Bergen Subsidiary with Environmental Laws or Environmental Permits
has been resolved without any pending, ongoing or future obligation,
cost or liability; and
(b) neither Bergen nor any Bergen Subsidiary has released a
Hazardous Material at, or transported a Hazardous Material to or from,
any real property
33
currently or formerly owned, leased or occupied by Bergen or any Bergen
Subsidiary in violation of any Environmental Law.
SECTION 4.14. Intellectual Property. Except as would not,
individually or in the aggregate, have a Bergen Material Adverse Effect, Bergen
and the Bergen Subsidiaries own or possess adequate licenses or other valid
rights to use all patents, patent rights, trademarks, trademark rights, trade
names, trade dress, trade name rights, copyrights, service marks, trade secrets,
applications for trademarks and for service marks, know-how and other
proprietary rights and information used or held for use in connection with the
respective businesses of Bergen and the Bergen Subsidiaries as currently
conducted, and Bergen is unaware of any assertion or claim challenging the
validity of any of the foregoing. The conduct of the respective businesses of
Bergen and the Bergen Subsidiaries as currently conducted does not conflict in
any way with any patent, patent right, license, trademark, trademark right,
trade dress, trade name, trade name right, service ▇▇▇▇ or copyright of any
third party that, individually or in the aggregate, would have a Bergen Material
Adverse Effect. To the knowledge of Bergen, there are no infringements of any
proprietary rights owned by or licensed by or to Bergen or any Bergen Subsidiary
that, individually or in the aggregate, would have a Bergen Material Adverse
Effect.
SECTION 4.15. Taxes. Except as set forth in Section 4.15 of
the Bergen Disclosure Schedule and except for such matters that would not have a
Bergen Material Adverse Effect, (a) Bergen and each of the Bergen Subsidiaries
have timely filed or shall timely file all returns and reports required to be
filed by them with any taxing authority with respect to Taxes for any period
ending on or before the Effective Time, taking into account any extension of
time to file granted to or obtained on behalf of Bergen and the Bergen
Subsidiaries, (b) all Taxes shown to be payable on such returns or reports that
are due prior to the Effective Time have been paid or shall be paid, (c) as of
the date hereof, no deficiency for any amount of Tax has been asserted or
assessed by a taxing authority against Bergen or any of the Bergen Subsidiaries
and (d) Bergen and each of the Bergen Subsidiaries have provided adequate
reserves in their financial statements for any Taxes that have not been paid,
whether or not shown as being due on any returns.
SECTION 4.16. Pooling Affiliates. Section 4.16 of the Bergen
Disclosure Schedule sets forth the names and addresses of those persons who are,
in Bergen's reasonable judgment, Pooling Affiliates of Bergen.
SECTION 4.17. Customers. As of the date of this Agreement,
except as set forth in Section 4.17 of the Bergen Disclosure Schedule, no
material customer of Bergen has indicated that it will stop or materially
decrease purchasing materials, products or services from Bergen, the effect of
which would have a Bergen Material Adverse Effect.
34
SECTION 4.18. Opinion of Financial Advisor. ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., Inc. ("▇▇▇▇▇▇▇ ▇▇▇▇▇") has delivered to the board of directors of Bergen
its written opinion to the effect that, as of November 8, 1996, the ratio of the
Bergen Exchange Ratio to the IVAX Exchange Ratio is fair to the holders of
Bergen Shares (other than IVAX and its affiliates) from a financial point of
view. ▇▇▇▇▇▇▇ ▇▇▇▇▇ has authorized the inclusion of its opinion in the Joint
Proxy Statement and Bergen shall promptly, after the date of this Agreement,
deliver a signed copy of such opinion to IVAX.
SECTION 4.19. Brokers. No broker, finder or investment banker
(other ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇) is entitled to any brokerage, finder's or other fee
or commission in connection with the Mergers based upon arrangements made by or
on behalf of Bergen. Bergen has heretofore made available to IVAX complete and
correct copies of all agreements between Bergen and ▇▇▇▇▇▇▇ ▇▇▇▇▇ pursuant to
which such firm would be entitled to any payment relating to the Mergers.
ARTICLE V
COVENANTS
SECTION 5.01. Conduct of Business by IVAX Pending the Closing.
IVAX agrees that, between the date of this Agreement and the Effective Time,
except as set forth in Section 5.01 of the IVAX Disclosure Schedule or as
expressly contemplated by any other provision of this Agreement, unless Bergen
shall otherwise agree in writing, which agreement shall not be unreasonably
withheld or delayed, (x) the respective businesses of IVAX and the IVAX
Subsidiaries shall be conducted only in, and IVAX and the IVAX Subsidiaries
shall not take any action except in, the ordinary course of business consistent
with past practice and (y) IVAX shall use all reasonable efforts to keep
available the services of such of the current officers, significant employees
and consultants of IVAX and the IVAX Subsidiaries and to preserve the current
relationships of IVAX and the IVAX Subsidiaries with such of the customers,
suppliers and other persons with which IVAX or any IVAX Subsidiary has
significant business relations in order to preserve substantially intact its
business organization. By way of amplification and not limitation, except as set
forth in Section 5.01 of the IVAX Disclosure Schedule or as expressly
contemplated by any other provision of this Agreement and the IVAX Stock Option
Agreement, neither IVAX nor any IVAX Subsidiary shall, between the date of this
Agreement and the Effective Time, directly or indirectly, do, or agree to do,
any of the following without the prior written consent of Bergen, which consent
shall not be unreasonably withheld or delayed:
(a) amend or otherwise change its Articles of Incorporation or
Bylaws or equivalent organizational documents;
35
(b) issue, sell, pledge, dispose of, grant, transfer, lease,
license, guarantee or encumber, or authorize the issuance, sale,
pledge, disposition, grant, transfer, lease, license or encumbrance of,
(i) any shares of capital stock of IVAX or any IVAX Subsidiary of any
class, or securities convertible into or exchangeable or exercisable
for any shares of such capital stock, or any options, warrants or other
rights of any kind to acquire any shares of such capital stock, or any
other ownership interest (including, without limitation, any phantom
interest), of IVAX or any IVAX Subsidiary (except for the issuance of
(A) a maximum of 10,627,037 shares of IVAX Common Stock issuable
pursuant to the IVAX Stock Options outstanding on the date of this
Agreement and the issuance, in the ordinary course of business,
consistent with past practices and on terms no more favorable than
customary prior grants, of IVAX Stock Options to acquire 1,488,525
shares of IVAX Common Stock and the shares of IVAX Common Stock
issuable pursuant to such IVAX Stock Options, in accordance with the
terms of the IVAX Stock Plans, (B) a maximum of 2,945,669 shares of
IVAX Common Stock issuable pursuant to the IVAX Subordinated Notes, and
(C) shares of IVAX Common Stock issuable as consideration for
acquisitions permitted by clause (i) of paragraph (c) of this Section
5.01), or (ii) any property or assets of IVAX or any IVAX Subsidiary,
except in the ordinary course of business and in a manner consistent
with past practice or in an aggregate amount not in excess of
$50,000,000;
(c) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization or person or any
division thereof or any assets, other than acquisitions of assets
(excluding the acquisition of a business or substantially all of the
stock or assets thereof) in the ordinary course of business consistent
with past practice, and any acquisitions for consideration, calculated
as of the date of execution of the definitive agreement for any such
acquisition, that is not, in the aggregate for all such acquisitions,
in excess of $15,000,000; (ii) incur any indebtedness for borrowed
money or issue any debt securities or assume, guarantee or endorse, or
otherwise as an accommodation become responsible for, the obligations
of any person for borrowed money, except for (A) indebtedness for
borrowed money incurred in the ordinary course of business and
consistent with past practice or incurred to refinance outstanding
indebtedness for borrowed money existing on the date of this Agreement,
(B) other indebtedness for borrowed money with a maturity of not more
than one year in a principal amount not, in the aggregate, in excess of
$50,000,000 or (C) indebtedness for borrowed money incurred to finance
acquisitions permitted by clause (i) of this paragraph (c); (iii)
terminate, cancel or request any material change in, or agree to any
material change in, any IVAX Material Contract or enter into any
contract or agreement material to the business, results of operations
or financial condition of IVAX and the IVAX Subsidiaries taken as a
whole, in either case other than in the ordinary course of business,
consistent with past practice; (iv) make or
36
authorize any capital expenditure, other than capital expenditures in
the ordinary course of business consistent with past practice that are
not, in the aggregate, in excess of $100,000,000 for IVAX and the IVAX
Subsidiaries taken as a whole; or (v) enter into or amend any contract,
agreement, commitment or arrangement that, if fully performed, would
not be permitted under this Section 5.01(c);
(d) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock, except (i) for any semiannual
dividends not in excess of $.05 per share of IVAX Common Stock and (ii)
that any IVAX Subsidiary may pay dividends or make other distributions
to IVAX or any other IVAX Subsidiary;
(e) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
(f) increase the compensation payable or to become payable to
its officers or employees, except for increases in accordance with past
practices in salaries or wages of employees or officers of IVAX or any
IVAX Subsidiary, or grant any rights to severance or termination pay
to, or enter into any employment or severance agreement which provides
benefits upon a change in control of IVAX that would be triggered by
the Reorganization with, any director, officer or other employee of
IVAX or any IVAX Subsidiary who is not currently entitled to such
benefits from the Reorganization, or establish, adopt, enter into or
amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of
any director, officer or employee of IVAX or any IVAX Subsidiary,
except to the extent required by applicable Law or the terms of a
collective bargaining agreement;
(g) take any action with respect to accounting policies or
procedures, other than actions in the ordinary course of business and
consistent with past practice or as required by U.S. GAAP;
(h) make any tax election or settle or compromise any material
federal, state or local United States income tax liability, or any
income tax liability of any other jurisdiction, other than those made
in the ordinary course of business consistent with past practice and
those for which specific reserves have been recorded on the
consolidated balance sheet of IVAX and the consolidated IVAX
Subsidiaries dated as of December 31, 1995 included in the 1995 IVAX
10-K and only to the extent of such reserves; or
37
(i) authorize or enter into any formal or informal agreement
or otherwise make any commitment to do any of the foregoing.
SECTION 5.02. Conduct of Business by Bergen Pending the
Closing. Bergen agrees that, between the date of this Agreement and the
Effective Time, except as set forth in Section 5.02 of the Bergen Disclosure
Schedule or as expressly contemplated by any other provision of this Agreement,
unless IVAX shall otherwise agree in writing, which agreement shall not be
unreasonably withheld or delayed, (x) the respective businesses of Bergen and
the Bergen Subsidiaries shall be conducted only in, and Bergen and the Bergen
Subsidiaries shall not take any action except in, the ordinary course of
business consistent with past practice and (y) Bergen shall use its reasonable
efforts to keep available the services of such of the current officers,
significant employees and consultants of Bergen and the Bergen Subsidiaries and
to preserve the current relationships of Bergen and the Bergen Subsidiaries with
such of the customers, suppliers and other persons with which Bergen or any
Bergen Subsidiary has significant business relations as Bergen deems reasonably
necessary in order to preserve substantially intact its business organization.
By way of amplification and not limitation, except as set forth in Section 5.02
of the Bergen Disclosure Schedule or as expressly contemplated by any other
provision of this Agreement and the Bergen Stock Option Agreement, neither
Bergen nor any Bergen Subsidiary shall, between the date of this Agreement and
the Effective Time, directly or indirectly, do, or agree to do, any of the
following without the prior written consent of IVAX, which consent shall not be
unreasonably withheld or delayed:
(a) amend or otherwise change its Certificate of Incorporation
or Bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, transfer, lease,
license, guarantee or encumber, or authorize the issuance, sale,
pledge, disposition, grant, transfer, lease, license or encumbrance of,
(i) any shares of capital stock of Bergen or any Bergen Subsidiary of
any class, or securities convertible into or exchangeable or
exercisable for any shares of such capital stock, or any options,
warrants or other rights of any kind to acquire any shares of such
capital stock, or any other ownership interest (including, without
limitation, any phantom interest), of Bergen or any Bergen Subsidiary
(except for the issuance of (A) a maximum of 1,889,426 shares of Bergen
Common Stock issuable pursuant to the Bergen Stock Options outstanding
on the date of this Agreement and the issuance, in the ordinary course
of business, consistent with past practices and on terms no more
favorable than customary prior grants, of Bergen Stock Options to
acquire 561,105 shares of Bergen Common Stock and the shares of Bergen
Common Stock issuable pursuant to such Bergen Stock Options, in
accordance with the terms of the Bergen Stock Plans and (B) shares of
Bergen Common Stock issuable as consideration for acquisitions
permitted by clause (i) of paragraph (c) of this Section 5.02); or (ii)
any property or assets of Bergen or any Bergen Subsidiary,
38
except in the ordinary course of business and in a manner consistent
with past practice or in an aggregate amount not in excess of
$50,000,000;
(c) (i) acquire (including, without limitation, by merger,
consolidation or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization or person or any
division thereof or any assets, other than acquisitions of assets
(excluding the acquisition of a business or substantially all of the
stock or assets thereof) in the ordinary course of business consistent
with past practice, and any acquisitions for consideration, calculated
as of the date of execution of the definitive agreement for any such
acquisition, that is not, in the aggregate for all such acquisitions,
in excess of $15,000,000; (ii) incur any indebtedness for borrowed
money or issue any debt securities or assume, guarantee or endorse, or
otherwise as an accommodation become responsible for, the obligations
of any person for borrowed money, except for (A) indebtedness for
borrowed money incurred in the ordinary course of business and
consistent with past practice or incurred to refinance outstanding
indebtedness for borrowed money existing on the date of this Agreement,
(B) other indebtedness for borrowed money with a maturity of not more
than one year in a principal amount not, in the aggregate, in excess of
$50,000,000 or (C) indebtedness for borrowed money incurred to finance
acquisitions permitted by clause (i) of this paragraph (c); (iii)
terminate, cancel or request any material change in, or agree to any
material change in, any Bergen Material Contract or enter into any
contract or agreement material to the business, results of operations
or financial condition of Bergen and the Bergen Subsidiaries taken as a
whole, in either case other than in the ordinary course of business,
consistent with past practice; (iv) make or authorize any capital
expenditure, other than capital expenditures in the ordinary course of
business consistent with past practice that are not, in the aggregate,
in excess of $100,000,000 for Bergen and the Bergen Subsidiaries taken
as a whole; or (v) enter into or amend any contract, agreement,
commitment or arrangement that, if fully performed, would not be
permitted under this Section 5.02(c);
(d) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock, except (i) for any dividends not
in excess of $.12 per share of Bergen Common Stock for any calendar
quarter and (ii) that any Bergen Subsidiary may pay dividends or make
other distributions to Bergen or any other Bergen Subsidiary;
(e) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
(f) increase the compensation payable or to become payable to
its officers or employees, except for increases in accordance with past
practices in salaries or wages of employees or officers of Bergen or
any Bergen Subsidiary, or grant any
39
rights to severance or termination pay to, or enter into any employment
or severance agreement which provides benefits upon a change in control
of Bergen that would be triggered by the Reorganization with, any
director, officer or other employee of Bergen or any Bergen Subsidiary
who is not currently entitled to such benefits upon the Reorganization,
or establish, adopt, enter into or amend any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted
stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee of
Bergen or any Bergen Subsidiary, except to the extent required by
applicable Law or the terms of a collective bargaining agreement;
(g) take any action with respect to accounting policies or
procedures, other than actions in the ordinary course of business and
consistent with past practice or as required by U.S. GAAP;
(h) make any tax election or settle or compromise any material
federal, state or local United States income tax liability, or any
income tax liability of any other jurisdiction, other than those made
in the ordinary course of business consistent with past practice and
those for which specific reserves have been recorded on the
consolidated balance sheet of Bergen and the consolidated Bergen
Subsidiaries dated as of September 30, 1995 included in the 1995 Bergen
10-K and only to the extent of such reserves; or
(i) authorize or enter into any formal or informal agreement
or otherwise make any commitment to do any of the foregoing.
SECTION 5.03. Cooperation; Steering Committee. Upon the
execution and delivery of this Agreement, Bergen and IVAX shall establish a
committee (the "Steering Committee") for the purpose of, to the extent permitted
by applicable Laws, facilitating the efficient combination of the respective
businesses of Bergen and IVAX as promptly as practicable following the Effective
Time. The Steering Committee shall consist of the following individuals: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Dr. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇. The Steering Committee shall be dissolved as of the Effective
Time.
SECTION 5.04. Notices of Certain Events. Each of Bergen and
IVAX shall give prompt notice to the other of (i) any notice or other
communication from any person alleging that the consent of such person is or may
be required in connection with the Mergers; (ii) any notice or other
communication from any Governmental Entity in connection with the Mergers; (iii)
any actions, suits, claims, investigations or proceedings commenced or, to its
knowledge, threatened against, relating to or involving or otherwise affecting
Bergen, IVAX, the Bergen Subsidiaries or the IVAX Subsidiaries that relate to
the
40
consummation of the Mergers; (iv) the occurrence of a default or event that,
with the giving of notice or lapse of time or both, will become a default under
any IVAX Material Contract or Bergen Material Contract; and (v) any change that
is reasonably likely to result in an IVAX Material Adverse Effect or a Bergen
Material Adverse Effect or is reasonably likely to delay or impede the ability
of either IVAX or Bergen to perform its respective obligations pursuant to this
Agreement, the IVAX Stock Option Agreement or the Bergen Stock Option Agreement,
as the case may be, and to effect the consummation of the Mergers.
SECTION 5.05. Access to Information; Confidentiality. (a)
Except as required pursuant to any confidentiality agreement or similar
agreement or arrangement to which Bergen or IVAX or any of the Bergen
Subsidiaries or the IVAX Subsidiaries is a party or pursuant to applicable Law
or the regulations or requirements of any stock exchange or other regulatory
organization with whose rules a party hereto is required to comply, from the
date of this Agreement to the Effective Time, Bergen and IVAX shall (and shall
cause the Bergen Subsidiaries and the IVAX Subsidiaries, respectively, to): (i)
provide to the other (and its officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives (collectively,
"Representatives")) access at reasonable times upon prior notice to its and its
Subsidiaries' officers, employees, agents, properties, offices and other
facilities and to the books and records thereof (including, without limitation,
for the purpose of conducting Phase I and, upon its consent (which consent shall
not be unreasonably withheld), Phase II environmental assessments (at the sole
cost and expense of the party conducting such assessments)), and (ii) furnish
promptly such information concerning its and its Subsidiaries' business,
properties, contracts, assets, liabilities and personnel as the other party or
its Representatives may reasonably request. No investigation conducted pursuant
to this Section 5.05 shall affect or be deemed to modify any representation or
warranty made in this Agreement.
(b) The parties hereto shall comply with, and shall cause
their respective Representatives to comply with, all of their respective
obligations under the Confidentiality Agreement dated September 18, 1996 (the
"Confidentiality Agreement") between Bergen and IVAX with respect to the
information disclosed pursuant to this Section 5.05.
SECTION 5.06. No Solicitation of Transactions. (a) Each party
to this Agreement shall not, directly or indirectly, and shall instruct its
officers, directors, employees, subsidiaries, agents or advisors or other
representatives (including, without limitation, any investment banker, attorney
or accountant retained by it), not to, directly or indirectly, solicit, initiate
or knowingly encourage (including by way of furnishing nonpublic information),
or take any other action knowingly to facilitate, any inquiries or the making of
any proposal or offer (including, without limitation, any proposal or offer to
its shareholders) that constitutes, or may reasonably be expected to lead to,
any Competing Transaction, or enter into or maintain or continue discussions or
negotiate with any person in furtherance of such inquiries or to obtain a
Competing Transaction, or agree to or endorse any Competing
41
Transaction, or authorize or permit any of the officers, directors or employees
of such party or any of its subsidiaries, or any investment banker, financial
advisor, attorney, accountant or other representative retained by such party or
any of such party's subsidiaries, to take any such action; provided, however,
that nothing contained in this Section 5.06 shall prohibit the Board of
Directors of Bergen or IVAX from furnishing information to, or entering into
discussions or negotiations with, any person in connection with an unsolicited
(from the date of this Agreement) proposal by such person to acquire such party
pursuant to a merger, consolidation, share exchange, tender offer, exchange
offer, business combination or other similar transaction or to acquire all or
substantially all of the assets of such party or any of its subsidiaries, if,
and only to the extent that, (i) such Board of Directors, after consultation
with outside legal counsel (which may include its regularly engaged outside
legal counsel), determines in good faith that such action is required for such
Board of Directors to comply with its duties to its shareholders imposed by
applicable Law and (ii) prior to furnishing such information to, or entering
into discussions or negotiations with, such person, such party uses all
reasonable efforts to obtain from such person an executed confidentiality
agreement on terms no less favorable to IVAX or Bergen, as the case may be, than
those contained in the Confidentiality Agreement. Each party hereto shall notify
the other parties hereto promptly if any proposal or offer, or any inquiry or
contact with any person with respect thereto, regarding a Competing Transaction
is made. Each party hereto immediately shall cease and cause to be terminated
all existing discussions or negotiations with any parties conducted heretofore
with respect to a Competing Transaction. Each party hereto agrees not to release
any third party from, or waive any provision of, any confidentiality or
standstill agreement to which it is a party.
(b) A "Competing Transaction" means any of the following
involving Bergen or IVAX, as the case may be (other than the Mergers
contemplated by this Agreement): (i) a merger, consolidation, share exchange,
business combination or other similar transaction, (ii) any sale, lease,
exchange, transfer or other disposition of 15 percent or more of the assets of
such party and its subsidiaries, taken as a whole, (iii) a tender offer or
exchange offer for 15 percent or more of the outstanding voting securities of
such party, or (iv) any solicitation in opposition to either the IVAX
Shareholders' Approval or the Bergen Shareholders' Approval.
SECTION 5.07. Pooling. From and after the date of this
Agreement, none of the parties hereto, or any of their respective subsidiaries
or other affiliates, shall knowingly take any action, or knowingly fail to take
any action, other than actions which such party is required to take or abstain
from taking pursuant to this Agreement or the Ancillary Agreements, which action
or failure to act is reasonably likely to jeopardize the treatment of each
Merger as a "pooling of interests" for accounting purposes. From and after the
date of this Agreement, each of the parties hereto shall take all reasonable
actions necessary to cause each Merger to be characterized as a pooling of
interests for accounting purposes.
42
SECTION 5.08. Letters of Accountants. Each of IVAX and Bergen
shall use all reasonable efforts to cause to be delivered to the other a
"comfort" letter of each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Deloitte & Touche, respectively,
each such letter dated and delivered as of the date the Registration Statement
shall have become effective and as of the Effective Time, and addressed to
Bergen and IVAX, respectively, in form and substance reasonably satisfactory to
the recipient thereof and reasonably customary in scope and substance for
letters delivered by independent public accountants in connection with mergers
such as those contemplated by this Agreement.
SECTION 5.09. Plan of Reorganization. This Agreement is
intended to constitute a "plan of reorganization" within the meaning of Section
1.368-2(g) of the income tax regulations promulgated under the Code. From and
after the date of this Agreement, each party hereto shall use all reasonable
efforts to cause the Mergers to qualify, and shall not, without the prior
written consent of the other parties hereto, knowingly take any actions or cause
any actions to be taken which could prevent the Mergers from qualifying as
reorganizations under the provisions of Section 368(a) of the Code. In the event
that the Mergers shall fail to qualify as reorganizations under the provisions
of Section 368(a) of the Code, then the parties hereto agree to negotiate in
good faith to restructure the Mergers in order that they shall qualify as
tax-free transactions under the Code. Following the Effective Time, and
consistent with any such consent, neither of the Surviving Corporations, IVAX,
Bergen, BBI nor any of their affiliates shall knowingly take any action or
knowingly cause any action to be taken which would cause the Mergers to fail to
qualify as reorganizations under Section 368(a) of the Code.
SECTION 5.10. Subsequent Financial Statements. Prior to the
Effective Time, each of IVAX and Bergen (a) shall consult with the other prior
to making publicly available its financial results for any period and (b) shall
consult with the other prior to the filing of, and shall timely file with the
SEC, each Annual Report on Form 10-K, Quarterly Report on Form 10-Q and Current
Report on Form 8-K required to be filed by such party under the Exchange Act and
the rules and regulations promulgated thereunder and shall promptly deliver to
the other copies of each such report filed with the SEC.
SECTION 5.11. Control of Operations. Nothing contained in this
Agreement shall give Bergen, directly or indirectly, the right to control or
direct the operations of IVAX and the IVAX Subsidiaries prior to the Effective
Time. Nothing contained in this Agreement shall give IVAX, directly or
indirectly, the right to control or direct the operations of Bergen and the
Bergen Subsidiaries prior to the Effective Time. Prior to the Effective Time,
each of Bergen and IVAX shall exercise, consistent with the terms and conditions
of this Agreement, complete control and supervision over its respective
operations.
SECTION 5.12. Further Action; Consents; Filings. Upon the
terms and subject to the conditions hereof, each of the parties hereto shall use
all reasonable efforts to
43
(i) take, or cause to be taken, all appropriate action, and do, or cause to be
done, all things necessary, proper or advisable under applicable Law or
otherwise to consummate and make effective the Mergers, (ii) obtain from
Governmental Entities any consents, licenses, permits, waivers, approvals,
authorizations or orders required to be obtained or made by Bergen, IVAX, BBI or
the Surviving Corporations or any of their subsidiaries in connection with the
authorization, execution and delivery of this Agreement and the consummation of
the Mergers and (iii) make all necessary filings, and thereafter make any other
required or appropriate submissions, with respect to this Agreement and the
Mergers required under (A) the rules and regulations of AMEX or the NYSE, (B)
the Securities Act, the Exchange Act and any other applicable federal or state
securities Laws, (C) the HSR Act, (D) the New Jersey Industrial Site Recovery
Act and (E) any other applicable Law. The parties hereto shall cooperate and
consult with each other in connection with the making of all such filings,
including by providing copies of all such documents to the nonfiling parties and
their advisors prior to filing, and none of the parties shall file any such
document if any of the other parties shall have reasonably objected to the
filing of such document. No party shall consent to any voluntary extension of
any statutory deadline or waiting period or to any voluntary delay of the
consummation of the Mergers at the behest of any Governmental Entity without the
consent and agreement of the other parties hereto, which consent shall not be
unreasonably withheld or delayed.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Registration Statement; Joint Proxy Statement.
(a) As promptly as practicable after the execution of this Agreement, Bergen and
IVAX shall jointly prepare and IVAX and Bergen shall file with the SEC a
document or documents that will constitute (i) the prospectus forming part of
the registration statement on Form S-4 of BBI (together with all amendments
thereto, the "Registration Statement"), in connection with the registration
under the Securities Act of (A) the BBI Common Stock to be issued to IVAX's
shareholders pursuant to the IVAX Merger and (B) the BBI Common Stock to be
issued to Bergen's shareholders pursuant to the Bergen Merger, and (ii) the
Joint Proxy Statement with respect to the Mergers relating to the special
meeting of each of IVAX's shareholders (the "IVAX Shareholders' Meeting") and
Bergen's shareholders (the "Bergen Shareholders' Meeting" and, together with the
IVAX Shareholders' Meeting, the "Shareholders' Meetings") to be held to consider
approval of this Agreement and the Mergers contemplated hereby (such document,
together with any amendments thereto, the "Joint Proxy Statement"). Copies of
the Joint Proxy Statement shall be provided to AMEX and the NYSE in accordance
with the rules of such exchanges. Each of the parties hereto shall use all
reasonable efforts to cause the Registration Statement to become effective as
promptly as practicable, and, prior to the effective date of the Registration
Statement, the parties hereto
44
shall take all action required under any applicable Laws in connection with the
issuance of shares of BBI Common Stock pursuant to the Mergers. Bergen or IVAX,
as the case may be, shall furnish all information concerning Bergen or IVAX as
the other party may reasonably request in connection with such actions and the
preparation of the Registration Statement and Joint Proxy Statement. As promptly
as practicable after the effective date of the Registration Statement, the Joint
Proxy Statement shall be mailed to the shareholders of Bergen and IVAX. Each of
the parties hereto shall cause the Joint Proxy Statement to comply as to form
and substance in all material respects with the applicable requirements of (i)
the Exchange Act, (ii) AMEX and the NYSE, (iii) the Securities Act and (iv) the
FBCA, the NJBCA and the DGCL.
(b) (i) The Joint Proxy Statement shall include the adoption
of the Mergers and recommendation of the Board of Directors of IVAX to IVAX's
shareholders that they vote in favor of approval of this Agreement and the
Mergers contemplated hereby; provided, however, that the Board of Directors of
IVAX may, at any time prior to the Effective Time, withdraw, modify or change
any such recommendation to the extent that the Board of Directors of IVAX
determines in good faith, after consultation with outside legal counsel (who may
be IVAX's regularly engaged outside legal counsel), that such withdrawal,
modification or change of its recommendation is required by its fiduciary duties
to IVAX's shareholders under applicable Law, and prior to such determination any
person (other than Bergen) shall have made a public announcement or otherwise
communicated to IVAX with respect to a Competing Transaction that, as determined
by the Board of Directors of IVAX in good faith after consultation with its
outside legal counsel (who may be its regularly retained outside counsel) and
financial advisors, contains terms more favorable to the shareholders of IVAX
than those provided for in the Reorganization. In addition, the Joint Proxy
Statement shall include the opinion of ▇▇▇▇▇▇ Brothers referred to in Section
3.18.
(ii) The Joint Proxy Statement shall include the approval of
the Mergers and recommendation of the Board of Directors of Bergen to Bergen's
shareholders that they vote in favor of approval of this Agreement and the
Mergers contemplated hereby; provided, however, that the Board of Directors of
Bergen may, at any time prior to the Effective Time, withdraw, modify or change
any such recommendation to the extent that the Board of Directors of Bergen
determines in good faith, after consultation with outside legal counsel (who may
be Bergen's regularly engaged outside legal counsel), that such withdrawal,
modification or change of its recommendation is required by its fiduciary duties
to Bergen's shareholders under applicable Law, and prior to such determination
any person (other than IVAX) shall have made a public announcement or otherwise
communicated to Bergen with respect to a Competing Transaction that, as
determined by the Board of Directors of Bergen after consultation with its
outside legal counsel (who may be its regularly retained outside counsel) and
financial advisors, contains terms more favorable to the shareholders of Bergen
than those provided for in the Reorganization. In addition, the Joint Proxy
Statement shall include the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ referred to in Section
4.18.
45
(c) No amendment or supplement to the Joint Proxy Statement or
the Registration Statement shall be made without the approval of Bergen and
IVAX, which approval shall not be unreasonably withheld or delayed. Each of the
parties hereto shall advise the other parties hereto, promptly after it receives
notice thereof, of the time when the Registration Statement has become effective
or any supplement or amendment has been filed, of the issuance of any stop
order, of the suspension of the qualification of the BBI Common Stock issuable
in connection with the Mergers for offering or sale in any jurisdiction, or of
any request by the SEC, AMEX or the NYSE for amendment of the Joint Proxy
Statement or the Registration Statement or comments thereon and responses
thereto or requests by the SEC for additional information.
(d) The information supplied by IVAX for inclusion in the
Registration Statement and the Joint Proxy Statement shall not, at (i) the time
the Registration Statement is filed with the SEC, (ii) if different, the time
the Registration Statement is declared effective, (iii) the time the Joint Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed to
the shareholders of IVAX and Bergen, (iv) the time of the IVAX Shareholders'
Meeting, (v) the time of the Bergen Shareholders' Meeting and (vi) the Effective
Time, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If at any time prior to the Effective Time any event or
circumstance relating to IVAX or any IVAX Subsidiary, or their respective
officers or directors, should be discovered by IVAX that should be set forth in
an amendment or a supplement to the Registration Statement or Joint Proxy
Statement, IVAX shall promptly inform Bergen. All documents that IVAX is
responsible for filing with the SEC in connection with the Mergers will comply
as to form in all material respects with the applicable requirements of AMEX,
the NYSE, the NJBCA, the FBCA, the DGCL, the Securities Act and the Exchange
Act.
(e) The information supplied by Bergen for inclusion in the
Registration Statement and the Joint Proxy Statement shall not, at (i) the time
the Registration Statement is filed with the SEC, (ii) if different, the time
the Registration Statement is declared effective, (iii) the time the Joint Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed to
the shareholders of Bergen and IVAX, (iv) the time of the IVAX Shareholders'
Meeting, (v) the time of the Bergen Shareholders' Meeting and (vi) the Effective
Time, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If, at any time prior to the Effective Time, any event or
circumstance relating to Bergen or any Bergen Subsidiary, or their respective
officers or directors, should be discovered by Bergen that should be set forth
in an amendment or a supplement to the Registration Statement or Joint Proxy
Statement, Bergen shall promptly inform IVAX. All documents that Bergen is
responsible for filing with the SEC in connection with the Mergers will comply
as to form in
46
all material respects with the applicable requirements of AMEX, the NYSE, the
NJBCA, the FBCA, the DGCL, the Securities Act and the Exchange Act.
SECTION 6.02. Shareholders' Meetings. IVAX shall call and hold
the IVAX Shareholders' Meeting and Bergen shall call and hold the Bergen
Shareholders' Meeting as promptly as practicable for the purpose of voting upon
the approval of this Agreement pursuant to the Joint Proxy Statement and the
Mergers contemplated hereby, and each of Bergen and IVAX shall use its
reasonable efforts to hold the Shareholders' Meetings on the same day and as
soon as practicable after the date on which the Registration Statement becomes
effective. IVAX shall use its reasonable efforts to solicit from its
shareholders proxies in favor of the approval of this Agreement and the Mergers
contemplated hereby pursuant to the Joint Proxy Statement and shall take all
other action necessary or advisable to secure the vote or consent of
shareholders required by the FBCA or applicable stock exchange requirements to
obtain such approval, except to the extent that the Board of Directors of IVAX
determines in good faith after consultation with outside legal counsel (who may
be IVAX's regularly engaged outside legal counsel) that the withdrawal,
modification or change of its recommendation is required by its fiduciary duties
to IVAX's shareholders under applicable Law, and prior to such determination any
person (other than Bergen) shall have made a public announcement or otherwise
communicated to IVAX with respect to a Competing Transaction that, as determined
by the Board of Directors of IVAX in good faith after consultation with its
outside legal counsel (who may be its regularly retained outside counsel) and
financial advisors, contains terms more favorable to the shareholders of IVAX
than those provided for in the Reorganization. Bergen shall use its reasonable
efforts to solicit from its shareholders proxies in favor of the approval of
this Agreement and the Mergers contemplated hereby pursuant to the Joint Proxy
Statement, and shall take all other action necessary or advisable to secure the
vote or consent of shareholders required by the NJBCA or applicable stock
exchange requirements to obtain such approval, except to the extent that the
Board of Directors of Bergen determines in good faith after consultation with
outside legal counsel (who may be Bergen's regularly engaged outside legal
counsel) that the withdrawal, modification or change of its recommendation is
required by its fiduciary duties to Bergen's shareholders under applicable Law,
and prior to such determination any person (other than IVAX) shall have made a
public announcement or otherwise communicated to Bergen with respect to a
Competing Transaction that, as determined by the Board of Directors of Bergen in
good faith after consultation with its outside legal counsel (who may be its
regularly retained outside counsel) and financial advisors, contains terms more
favorable to the shareholders of Bergen than those provided for in the
Reorganization. Each of the parties hereto shall take all other action necessary
or, in the opinion of the other parties hereto, advisable to promptly and
expeditiously secure any vote or consent of shareholders required by applicable
Law and such party's Certificate or Articles of Incorporation and Bylaws to
effect the Mergers.
47
SECTION 6.03. Employee Benefits Matters. (a) Except as
otherwise provided herein, each of the IVAX Benefit Plans and the Bergen Benefit
Plans in effect as of the Effective Time shall be maintained in effect with
respect to the employees or former employees of IVAX and the IVAX Subsidiaries,
on the one hand, and of Bergen and the Bergen Subsidiaries, on the other hand,
respectively, who are covered by such benefit plans immediately prior to the
Closing Date until BBI otherwise determines after the Effective Time; provided,
however, that nothing contained herein shall limit any reserved right in any
such IVAX Benefit Plan or Bergen Benefit Plan, as the case may be, to amend,
modify, suspend, revoke or terminate any such plan. Bergen and IVAX shall
discuss in good faith the advisability of amending any Bergen Benefit Plan or
IVAX Benefit Plan providing benefits upon a "change of control", to the extent
such amendment would be permitted by applicable Law.
(b) Prior to the Effective Time, the Steering Committee shall
develop short- and long-term incentive compensation arrangements for BBI which
are to be implemented after the Effective Time and make appropriate adjustments,
if any, to the performance goals, target awards and any other relevant criteria
under the incentive compensation plans of IVAX and Bergen that are in effect as
of the Effective Time to take the Reorganization into account. In addition, the
Steering Committee shall conduct a review of IVAX's and Bergen's respective
benefit plans following the execution of this Agreement in order to coordinate
the provision of benefits after the Effective Time and to eliminate duplicative
benefits, including, without limitation, through the establishment by BBI of
replacement benefit plans (the "BBI Replacement Plans"). Each participant in any
IVAX Benefit Plan or Bergen Benefit Plan that is replaced by an BBI Replacement
Plan shall receive credit for purposes of eligibility to participate, vesting,
benefit accrual and eligibility to receive benefits under any BBI Replacement
Plan for service credited for the corresponding purpose under such benefit plan;
provided, however, that such crediting of service shall not operate to duplicate
any benefit to any such participant of the funding of any such benefit.
(c) At the Effective Time, IVAX and Bergen shall cause BBI to
establish an omnibus stock incentive plan and a long-term bonus plan with terms
to be determined by the Steering Committee prior to the mailing of the Joint
Proxy Statement.
(d) With respect to any IVAX Benefit Plan, Bergen Benefit Plan
or benefit plan of BBI under which the delivery of IVAX Common Stock, Bergen
Common Stock or BBI Common Stock, as the case may be, is required upon payment
of benefits, grant of awards or exercise of options (the "Stock Plans"), BBI
shall take all corporate action necessary or appropriate to (i) obtain
shareholder approval with respect to such plan to the extent such approval is
required for purposes of the Code or other applicable law, or to enable such
plan to comply with Rule 16b-3 promulgated under the Exchange Act, (ii) reserve
for issuance under such plan or otherwise provide a sufficient number of shares
of
48
BBI Common Stock for delivery upon payment of benefits, grant of awards or
exercise of options under such plan and (iii) as soon as practicable after the
Effective Time, file registration statements on Form S-3 or Form S-8, as
appropriate (or any successor or other appropriate forms), with respect to the
shares of BBI Common Stock subject to such plan to the extent such registration
statement is required under applicable law, and BBI shall use its best efforts
to maintain the effectiveness of such registration statements (and maintain the
current status of the prospectuses contained therein) for so long as such
benefits and grants remain payable and such options remain outstanding. With
respect to those individuals who subsequent to the Mergers will be subject to
the reporting requirements under Section 16(a) of the Exchange Act, BBI shall
administer the Stock Plans, where applicable, in a manner that complies with
Rule 16b-3 promulgated under the Exchange Act.
(e) With respect to any IVAX Benefit Plans or Bergen Benefit
Plans maintained or contributed to outside the United States for the benefit of
non-United States citizens or residents, the principles set forth in this
Section 6.03 shall apply to the extent the application of such principles does
not violate applicable foreign law.
(f) Without limiting the applicability of the foregoing or of
Sections 2.08 and 2.09 hereof, each of the parties hereto shall take all actions
as are necessary to ensure that IVAX and Bergen shall not be, at the Effective
Time, bound by any options, stock appreciation rights, warrants or other rights
or agreements which would entitle any person, other than BBI, to own any capital
stock of the Surviving Corporations or to receive any payment in respect
thereof, and all IVAX Benefit Plans and Bergen Benefit Plans conferring any
rights with respect to Shares or other capital stock of IVAX or Bergen, as the
case may be, shall be deemed hereby to be amended to be in conformity with this
Section 6.03.
SECTION 6.04. Executive Officers. At the Effective Time,
subject to the Bylaws of BBI, (i) Dr. ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall
hold the positions of Co-Chairmen of BBI and (ii) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ shall hold the
position of President and Chief Executive Officer of BBI. If any of such persons
is unable or unwilling to hold such offices as set forth above, his successor
shall be selected by the Board of Directors of BBI in accordance with its
Bylaws.
SECTION 6.05. Pooling Affiliates. (a) Not less than 45 days
prior to the Effective Time, IVAX shall deliver to Bergen a list of names and
addresses of those persons, in IVAX's reasonable judgment, at the record date
for the IVAX Shareholders' Meeting at which the Mergers were approved, who were
Pooling Affiliates of IVAX. IVAX shall provide Bergen such information and
documents as Bergen shall reasonably request for purposes of reviewing such
list. IVAX shall use its reasonable efforts to deliver or cause to be delivered
to Bergen, prior to the Effective Time, an affiliate letter in the form attached
hereto as Exhibit 6.05(a) (the "IVAX Affiliate Letter"), executed by each of the
Pooling Affiliates of IVAX identified in the above-referenced list. The
foregoing notwithstanding,
49
BBI shall be entitled to place legends as specified in the IVAX Affiliate Letter
on the certificates evidencing any of the BBI Common Stock to be received by (i)
any Pooling Affiliate of IVAX or (ii) any person Bergen reasonably identifies
(by written notice to IVAX) as being a person who may be deemed an "affiliate"
within the meaning of Rule 145 of the rules and regulations of the Securities
Act or applicable SEC accounting releases with respect to pooling-of-interests
accounting treatment, pursuant to the terms of this Agreement, and to issue
appropriate stop transfer instructions to the transfer agent for the BBI Common
Stock, consistent with the terms of the IVAX Affiliate Letter, regardless of
whether such person has executed the IVAX Affiliate Letter and regardless of
whether such person's name and address appear on Section 3.16 of the IVAX
Disclosure Schedules.
(b) Not less than 45 days prior to the Effective Time, Bergen
shall deliver to IVAX a list of names and addresses of those persons who were,
in Bergen's reasonable judgment, at the record date for the Bergen Shareholders'
Meeting at which the issuance of the Bergen Common Stock in the Mergers were
approved, Pooling Affiliates of Bergen. Bergen shall provide IVAX such
information and documents as IVAX shall reasonably request for purposes of
reviewing such list. Bergen shall use its reasonable efforts to deliver or cause
to be delivered to IVAX, prior to the Effective Time, an affiliate letter in the
form attached hereto as Exhibit 6.05(b) (the "Bergen Affiliate Letter"),
executed by each of the Pooling Affiliates of Bergen identified in the
above-referenced list. The foregoing notwithstanding, BBI shall be entitled to
place legends as specified in the Bergen Affiliate Letter on the certificates
evidencing any of the BBI Common Stock to be received by (i) any Pooling
Affiliate of Bergen or (ii) any person IVAX reasonably identifies (by written
notice to Bergen) as being a person who may be deemed an "affiliate" within the
meaning of Rule 145 of the rules and regulations of the Securities Act or
applicable SEC accounting releases with respect to pooling of interests
accounting treatment, pursuant to the terms of this Agreement, and to issue
appropriate stop transfer instructions to the transfer agent for the BBI Common
Stock, consistent with the terms of the Bergen Affiliate Letter, regardless of
whether such person has executed the Bergen Affiliate Letter and regardless of
whether such person's name and address appear on Section 4.16 of the Bergen
Disclosure Schedules.
SECTION 6.06. Assumption of Debt. With respect to the IVAX
Subordinated Notes issued by IVAX under an indenture qualified under the Trust
Indenture Act of 1939 (the "IVAX Indenture"), if required by the IVAX Indenture,
BBI shall execute and deliver to the trustee under the IVAX Indenture a
supplemental indenture, in form satisfactory to the trustee, expressly assuming
the obligations of IVAX with respect to the due and punctual payment of the
principal of (and premium, if any) and interest on the IVAX Subordinated Notes
and the due and punctual performance of all the terms, covenants and conditions
of the IVAX Indentures to be kept or performed by IVAX, and shall deliver such
supplemental indenture to the trustee under the IVAX Indenture. Holders of the
IVAX Subordinated Notes who convert after the Effective Time shall be entitled
to receive BBI Common Stock based on a ratio determined in accordance with
Section 2.02(b).
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SECTION 6.07. Directors' and Officers' Indemnification and
Insurance. (a) The Articles of Incorporation of IVAX, the Certificate of
Incorporation of Bergen and the Bylaws of IVAX and Bergen, as the case may be,
shall contain the provisions that are set forth, as of the date of this
Agreement, in the Articles of Incorporation of IVAX and the Certificate of
Incorporation of Bergen, respectively, and in the Bylaws of IVAX and Bergen, as
the case may be, which provisions shall not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner that
would affect adversely the rights thereunder of individuals who at or at any
time prior to the Effective Time were directors, officers, employees,
fiduciaries or agents of IVAX or Bergen, respectively.
(b) For a period of six years after the Effective Time, BBI
shall cause to be obtained and maintained in effect a noncancellable runoff
policy for the current directors' and officers' liability insurance policies
maintained by IVAX and Bergen with respect to claims arising from facts or
events that occurred prior to the Effective Time.
(c) This Section 6.07 is intended to be for the benefit of,
and shall be enforceable by, the indemnified parties, their heirs and personal
representatives and shall be binding on IVAX, Bergen and BBI and their
respective successors and assigns.
(d) Notwithstanding anything to the contrary contained herein,
BBI and each of the Surviving Corporations shall assume and perform all
obligations of each of IVAX and Bergen arising under any indemnification
agreement entered into prior to the date hereof between each of IVAX and Bergen
and certain officers and directors of IVAX and Bergen, respectively.
(e) From and after the Effective Time, BBI agrees that it
shall indemnify and hold harmless each present and former director and officer
of IVAX or Bergen, determined as of the Effective Time (the "Indemnified
Parties"), against any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages or liabilities (collectively, "Costs")
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of or pertaining to matters existing or occurring at or prior to the
Effective Time, whether asserted or claimed prior to, at or after the Effective
Time, to the fullest extent that IVAX or Bergen would have been permitted under
Florida or New Jersey law, as the case may be, and their charter documents (each
as in effect on the date hereof) to indemnify such Indemnified Parties (and BBI
shall also advance expenses as incurred to the fullest extent permitted under
applicable Law; provided, however, that the Indemnified Party to whom expenses
are advanced provides an undertaking to repay such advances if it is ultimately
determined pursuant to a final, non-appealable judgment by a court of competent
jurisdiction that such Indemnified Party is not entitled to indemnification).
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(f) To the extent paragraph (e) shall not serve to indemnify
and hold harmless an Indemnified Party, for a period of six years after the date
hereof, BBI shall, subject to the terms set forth herein, indemnify and hold
harmless, to the fullest extent permitted under applicable Law (and BBI shall
also advance expenses as incurred to the fullest extent permitted under
applicable Law; provided, however, that the Indemnified Party to whom expenses
are advanced provides an undertaking to repay such advances if it is ultimately
determined that such Indemnified Party is not entitled to indemnification), each
Indemnified Party against any Costs incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to the
transactions contemplated by this Agreement; provided further, however, that BBI
shall not be required to indemnify any Indemnified Party pursuant hereto if it
shall be determined that the Indemnified Party acted in bad faith and not in a
manner such Indemnified Party believed to be in or not opposed to the best
interests of IVAX or Bergen, as the case may be.
(g) Any Indemnified Party wishing to claim indemnification
under paragraph (e) or (f) of this Section 6.07, upon learning of any such
claim, action, suit, proceeding or investigation, shall promptly notify BBI
thereof, but the failure to so notify shall not relieve BBI of any liability it
may have to such Indemnified Party if such failure does not materially prejudice
BBI. In the event of any such claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time), (i) BBI shall have the
right to assume the defense thereof and BBI shall not be liable to such
Indemnified Parties for any legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified Parties in connection with
the defense thereof, except that if BBI elects not to assume such defense or
counsel for the Indemnified Parties advises that there are issues which raise
conflicts of interest between BBI and the Indemnified Parties, the Indemnified
Parties may retain counsel satisfactory to them, and BBI shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received; provided, however, that BBI shall
be obligated pursuant to this paragraph (f) to pay for only one firm of counsel
for all Indemnified Parties in any jurisdiction unless the use of one counsel
for such Indemnified Parties would present such counsel with a conflict of
interest, (ii) the Indemnified Parties shall cooperate in the defense of any
such matter and (iii) BBI shall not be liable for any settlement effected
without its prior written consent; and provided further, however, that BBI shall
not have any obligation hereunder to any Indemnified Party when and if a court
of competent jurisdiction shall ultimately determine, and such determination
shall have become final, that the indemnification of such Indemnified Party in
the manner contemplated hereby is prohibited by applicable Law. Notwithstanding
the foregoing, if such indemnity is not available with respect to any
Indemnified Party, then BBI and the Indemnified Party shall contribute to the
amount payable in such proportion as is appropriate to reflect relative faults
and benefits.
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(h) If BBI or any of its successors or assigns (i) shall
consolidate with or merge into any other corporation or entity and shall not be
the continuing or surviving corporation or entity in such consolidation or
merger or (ii) shall transfer all or substantially all of its properties and
assets to any individual, corporation or other entity, then, and in each such
case, proper provisions shall be made so that the successors and assigns of BBI
shall assume all of the obligations set forth in this Section 6.07.
SECTION 6.08. No Shelf Registration. BBI shall not be required
to amend or maintain the effectiveness of the Registration Statement for the
purpose of permitting resale of the shares of BBI Common Stock received pursuant
hereto by the persons who may be deemed to be "affiliates" of IVAX or Bergen
within the meaning of Rule 145 promulgated under the Securities Act.
SECTION 6.09. Public Announcements. The initial press release
concerning the Reorganization shall be a joint press release and, thereafter,
Bergen and IVAX shall consult with each other before issuing any press release
or otherwise making any public statements with respect to this Agreement or the
Reorganization and shall not issue any such press release or make any such
public statement without the prior written approval of the other, except to the
extent required by applicable Law or the requirements of AMEX or the NYSE, as
applicable, in which case the issuing party shall use its reasonable efforts to
consult with the other party before issuing any such release or making any such
public statement.
SECTION 6.10. Dividends. (a) Each of IVAX and Bergen shall
coordinate with the other the declaration of, and the setting of record dates
and payment dates for, dividends on IVAX Shares and Bergen Shares so that
holders of IVAX Shares or Bergen Shares (i) do not receive dividends on both
IVAX Shares or Bergen Shares, as the case may be, and BBI Common Stock received
in connection with the Mergers in respect of any calendar quarter or (ii) fail
to receive a dividend on either IVAX Shares or Bergen Shares, as the case may
be, or BBI Common Stock received in connection with the Mergers in respect of
any calendar quarter.
(b) It is the intention of the parties hereto that the initial
quarterly dividend per share of BBI Common Stock be at least equal to $0.12,
subject to approval and declaration thereof by the Board of Directors of BBI.
SECTION 6.11. Headquarters. IVAX and Bergen agree that the
Restated Bylaws of BBI will provide that the corporate headquarters of BBI shall
be located in Miami, Florida for a period of not less than three years and that
such provision of the Restated Bylaws of BBI shall not be amended without the
affirmative vote of at least two-thirds of the total number of directors of BBI.
53
SECTION 6.12. Post-Merger BBI Board of Directors. At the
Effective Time, the total number of persons serving on the Board of Directors of
BBI shall be 17 (unless otherwise agreed in writing by IVAX and Bergen prior to
the Effective Time), eight of whom shall be IVAX Directors, eight of whom shall
be Bergen Directors and one of whom shall be the Chief Executive Officer of BBI.
At least three of each of the IVAX Directors and the Bergen Directors shall be
directors who are not employees of BBI, IVAX or Bergen. The persons to serve
initially on the Board of Directors of BBI at the Effective Time who are IVAX
Directors shall be selected solely by and at the absolute discretion of IVAX
prior to the Effective Time; and the persons to serve on the Board of Directors
of BBI at the Effective Time who are Bergen Directors shall be selected solely
by and at the absolute discretion of Bergen prior to the Effective Time. In the
event that, prior to the Effective Time, any person so selected to serve on the
Board of Directors of BBI is unable or unwilling to serve in such position, the
company that selected such person shall designate another person to serve in
such person's stead in accordance with provisions of the immediately preceding
sentence. IVAX and Bergen, as the sole shareholders of BBI, agree that the
initial directors of BBI and the initial allocations of the directors among the
three classes of directors shall, at the Effective Time, be as follows: The
Board of Directors shall be divided into three classes, designated as Class I,
Class II and Class III. The initial directors of BBI shall allocate the
directors among the three classes as follows: (i) Class I shall consist of five
directors, two of whom shall be IVAX Continuing Directors, two of whom shall be
Bergen Continuing Directors and one of whom shall be the President and CEO of
BBI; (ii) Class II shall consist of six directors, three of whom shall be IVAX
Continuing Directors and three of whom shall be Bergen Continuing Directors; and
(iii) Class III shall consist of six directors, comprised of ▇▇. ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Dr. ▇▇▇▇▇▇▇ ▇▇▇▇▇, two other IVAX Continuing Directors and two other
Bergen Continuing Directors. Such directors shall serve as the directors of BBI
from and after the Effective Time in accordance with the Restated Certificate of
Incorporation of BBI until their successors are elected or appointed and
qualified or until their resignation or removal. The term "IVAX Director" means
(i) any person serving as a director of IVAX on the date hereof who becomes a
director of BBI at the Effective Time or any other designee selected by IVAX and
(ii) any person who becomes a Director of BBI pursuant to the second preceding
sentence and who is designated by the IVAX Directors; and the term "Bergen
Director" means (i) any person serving as a director of Bergen on the date
hereof who becomes a director of BBI at the Effective Time or any other designee
selected by Bergen and (ii) any person who becomes a director of BBI pursuant to
the second preceding sentence and who is designated by the Bergen Directors.
SECTION 6.13. Stock Exchange Listings. Each of the parties
hereto shall use its reasonable efforts to obtain, prior to the Effective Time,
the approval for listing on the NYSE, effective upon official notice of
issuance, of the shares of BBI Common Stock into which the Shares will be
converted pursuant to Article II hereof and which will be
54
issuable upon exercise of options pursuant to Section 2.08 hereof, under the
ticker symbol "BIH" or other mutually acceptable ticker symbol.
SECTION 6.14. Blue Sky. Each of the parties hereto shall use
all reasonable efforts to obtain prior to the Effective Time all necessary blue
sky permits and approvals required under Blue Sky Laws to permit the
distribution of the shares of BBI Common Stock to be issued in accordance with
the provisions of this Agreement.
ARTICLE VII
CONDITIONS TO THE MERGERS
SECTION 7.01. Conditions to the Obligations of Each Party to
Consummate the Mergers. The obligations of the parties hereto to consummate the
Mergers, or to permit the consummation of the Mergers, are subject to the
satisfaction or, if permitted by applicable Law, waiver of the following
conditions:
(a) the Registration Statement shall have been declared
effective by the SEC under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued by the SEC and no proceeding for that purpose shall have
been initiated by the SEC and not concluded or withdrawn;
(b) each of this Agreement and the Mergers shall have been
duly approved by the requisite vote of shareholders of each of IVAX and
Bergen in accordance with the FBCA and the NJBCA, respectively;
(c) no court of competent jurisdiction shall have issued or
entered any order, writ, injunction or decree, and no other
Governmental Entity shall have issued any order, which is then in
effect and has the effect of making either of the Mergers illegal or
otherwise prohibiting their consummation;
(d) any waiting period (and any extension thereof) applicable
to the consummation of the Reorganization under the HSR Act or any
other applicable competition, merger control or similar Law shall have
expired or been terminated;
(e) all consents, approvals and authorizations legally
required to be obtained to consummate the Reorganization shall have
been obtained from all Governmental Entities, except where the failure
to obtain any such consent, approval or authorization would not result
in a change in or have an effect on the business of IVAX or Bergen that
is, or is reasonably likely to be, materially adverse to the business,
assets (including intangible assets), liabilities (contingent or
otherwise),
55
condition (financial or otherwise) or results of operations of BBI and
its respective subsidiaries, taken as a whole;
(f) each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Deloitte & Touche, as the
independent public accountants of IVAX and Bergen, respectively, shall
have issued an opinion, addressed to each of Bergen and IVAX,
respectively, that the Mergers will qualify for "pooling of interests"
accounting treatment under applicable United States accounting rules,
including, without limitation, applicable SEC accounting standards; and
(g) the shares of BBI Common Stock into which the Shares will
be converted pursuant to Article II hereof and the shares of BBI Common
Stock issuable upon the exercise of options pursuant to Section 2.08
hereof shall have been authorized for listing on the NYSE, subject to
official notice of issuance.
SECTION 7.02. Conditions to the Obligations of IVAX. The
obligations of IVAX to consummate the IVAX Merger, or to permit the consummation
of the IVAX Merger, are subject to the satisfaction or, if permitted by
applicable Law, waiver of the following further conditions:
(a) each of the representations and warranties of Bergen
contained in this Agreement that is qualified by materiality shall be
true and correct on and as of the Effective Time as if made at and as
of the Effective Time (other than representations and warranties which
address matters only as of a certain date which shall be true and
correct as of such certain date) and each of the representations and
warranties that is not so qualified shall be true and correct in all
material respects on and as of the Effective Time as if made at and as
of the Effective Time (other than representations and warranties which
address matters only as of a certain date which shall be true and
correct in all material respects as of such certain date), in each case
except as contemplated or permitted by this Agreement, and IVAX shall
have received a certificate of the Chairman or President and Chief
Financial Officer of Bergen to such effect;
(b) Bergen shall have performed or complied in all material
respects with all material agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Effective Time and IVAX shall have received a certificate of the
Chairman or President and Chief Financial Officer of Bergen to that
effect;
(c) there shall not have occurred any material adverse change
in or effect on the business, assets (including intangible assets),
liabilities (contingent or otherwise), condition (financial or
otherwise) or results of operations of Bergen and
56
the Bergen Subsidiaries taken as a whole, except for any Bergen
Material Adverse Effect Exclusion;
(d) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.A.,
special counsel to IVAX, shall have issued its opinions, such opinions
dated on or about the date hereof and on or about the date of the
Closing addressed to IVAX, and reasonably satisfactory to it, based
upon customary representations of IVAX and BBI and customary
assumptions, to the effect that the IVAX Merger will be treated for
federal income tax purposes as a reorganization qualifying under the
provisions of Section 368(a) of the Code and that each of IVAX, IVAX
Merger Sub and BBI shall be a party to the reorganization within the
meaning of Section 368(b) of the Code, which opinions shall not have
been withdrawn or modified in any material respect; and
(e) Bergen shall have received the opinion described in
Section 7.03(d) hereof, in form and substance reasonably satisfactory
to IVAX.
SECTION 7.03. Conditions to the Obligations of Bergen. The
obligations of Bergen to consummate the Bergen Merger, or to permit the
consummation of the Bergen Merger, are subject to the satisfaction or, if
permitted by applicable Law, waiver of the following further conditions:
(a) each of the representations and warranties of IVAX
contained in this Agreement that is qualified by materiality shall be
true and correct on and as of the Effective Time as if made at and as
of the Effective Time (other than representations and warranties which
address matters only as of a certain date which shall be true and
correct as of such certain date) and each of the representations and
warranties that is not so qualified shall be true and correct in all
material respects on and as of the Effective Time as if made on and as
of such date (other than representations and warranties which address
matters only as of a certain date which shall be true and correct in
all material respects as of such certain date), in each case except as
contemplated or permitted by this Agreement, and Bergen shall have
received a certificate of the Chairman or President and Chief Financial
Officer of IVAX to such effect;
(b) IVAX shall have performed or complied in all material
respects with all material agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Effective Time and Bergen shall have received a certificate of the
Chairman or President and Chief Financial Officer of IVAX to that
effect;
57
(c) there shall not have occurred any material adverse change
in or effect on the business, assets (including intangible assets),
liabilities (contingent or otherwise), condition (financial or
otherwise) or results of operations of IVAX and the IVAX Subsidiaries
taken as a whole, except for any IVAX Material Adverse Effect
Exclusion;
(d) Shearman & Sterling, special counsel to Bergen, shall have
issued its opinions, such opinions dated on or about the date hereof
and on or about the date of the Closing, addressed to Bergen, and
reasonably satisfactory to it, based upon customary representations of
Bergen and BBI and customary assumptions, to the effect that the Bergen
Merger will be treated for federal income tax purposes as a
reorganization qualifying under the provisions of Section 368(a) of the
Code and that each of Bergen, Bergen Merger Sub and BBI shall be a
party to the reorganization within the meaning of Section 368(b) of the
Code, which opinions shall not have been withdrawn or modified in any
material respect; and
(e) IVAX shall have received the opinion described in Section
7.02(d) hereof, in form and substance reasonably satisfactory to
Bergen.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated
and the Mergers may be abandoned at any time prior to the Effective Time,
notwithstanding any requisite adoption and approval of this Agreement, as
follows:
(a) by mutual written consent duly authorized by the Boards of
Directors of each of Bergen and IVAX;
(b) by either Bergen or IVAX, if the Effective Time shall not
have occurred on or before July 31, 1997; provided, however, that the
right to terminate this Agreement under this Section 8.01(b) shall not
be available to any party whose failure to fulfill any obligation under
this Agreement shall have caused, or resulted in, the failure of the
Effective Time to occur on or before such date;
(c) by either Bergen or IVAX, if any Governmental Order, writ,
injunction or decree preventing the consummation of either Merger shall
have been entered by any court of competent jurisdiction and shall have
become final and nonappealable;
(d) by Bergen, if (i) in accordance with the proviso to
Section 6.01(b)(i), the Board of Directors of IVAX withdraws, modifies
or changes its recommendation
58
of this Agreement and the IVAX Merger in a manner adverse to Bergen or
its shareholders or shall have resolved to do so, (ii) the Board of
Directors of IVAX shall have recommended to the shareholders of IVAX a
Competing Transaction or shall have resolved to do so or (iii) a tender
offer or exchange offer for 15 percent or more of the outstanding
shares of capital stock of IVAX is commenced and the Board of Directors
of IVAX fails to recommend against acceptance of such tender offer or
exchange offer by its shareholders (including by taking no position
with respect to the acceptance of such tender offer or exchange offer
by its shareholders);
(e) by IVAX, if (i) in accordance with the proviso to Section
6.01(b)(ii), the Board of Directors of Bergen withdraws, modifies or
changes its recommendation of this Agreement and the Bergen Merger in a
manner adverse to IVAX or its shareholders or shall have resolved to do
so, (ii) the Board of Directors of Bergen shall have recommended to the
shareholders of Bergen a Competing Transaction or shall have resolved
to do so or (iii) a tender offer or exchange offer for 15 percent or
more of the outstanding shares of capital stock of Bergen is commenced
and the Board of Directors of Bergen fails to recommend against
acceptance of such tender offer or exchange offer by its shareholders
(including by taking no position with respect to the acceptance of such
tender offer or exchange offer by its shareholders);
(f) by Bergen or IVAX, (i) if this Agreement and the Mergers
shall fail to receive the requisite votes for approval at the IVAX
Shareholders' Meeting or any adjournment or postponement thereof or
(ii) if this Agreement and the Mergers shall fail to receive the
requisite votes for approval at the Bergen Shareholders' Meeting or any
adjournment or postponement thereof;
(g) by Bergen, upon a breach of any representation, warranty,
covenant or agreement on the part of IVAX set forth in this Agreement,
or if any representation or warranty of IVAX shall have become untrue,
in either case such that the conditions set forth in Section 7.03 would
not be satisfied (a "Terminating IVAX Breach"); provided, however,
that, if such Terminating IVAX Breach is curable by IVAX through the
exercise of its reasonable efforts and for so long as IVAX continues to
exercise such reasonable efforts, Bergen may not terminate this
Agreement under this Section 8.01(g); and provided further that the
preceding proviso shall not in any event be deemed to extend any date
set forth in paragraph (b) of this Section 8.01;
(h) by IVAX, upon breach of any representation, warranty,
covenant or agreement on the part of Bergen set forth in this
Agreement, or if any representation or warranty of Bergen shall have
become untrue, in either case such that the conditions set forth in
Section 7.02 would not be satisfied (a "Terminating Bergen Breach");
provided, however, that, if such Terminating Bergen Breach is curable
by Bergen through the exercise of its reasonable efforts and for so
long as Bergen continues to exercise such reasonable efforts, IVAX may
not terminate this
59
Agreement under this Section 8.01(h); and provided further that the
preceding proviso shall not in any event be deemed to extend any date
set forth in paragraph (b) of this Section 8.01;
(i) by IVAX, if the Board of Directors of IVAX shall,
following receipt of advice of outside legal counsel (who may be IVAX's
regularly engaged outside legal counsel) that failure to so terminate
would be inconsistent with its duties to its shareholders under
applicable Law, in good faith have withdrawn, modified or changed its
recommendation of the adoption of this Agreement and the Mergers in a
manner adverse to Bergen and, on or prior to such date, any person
(other than Bergen) shall have made a public announcement or otherwise
communicated to IVAX and its shareholders with respect to a Competing
Transaction that, as determined by the Board of Directors of IVAX after
consultation with its outside legal counsel (who may be its regularly
engaged outside legal counsel) and financial advisors, contains terms
more favorable to the shareholders of IVAX than those provided for in
the Reorganization; provided, however, that IVAX may not terminate this
Agreement pursuant to this Section 8.01(i) until three business days
have elapsed following delivery to Bergen of written notice of such
determination of IVAX (which written notice shall inform Bergen of the
material terms and conditions of the Competing Transaction); provided
further, however, that such termination under this Section 8.01(i)
shall not be effective until IVAX has made payment to Bergen of the
amounts required to be paid pursuant to Section 8.05(b); or
(j) by Bergen, if the Board of Directors of Bergen shall,
following receipt of advice of outside legal counsel (who may be
Bergen's regularly engaged outside legal counsel) that failure to so
terminate would be inconsistent with its duties to its shareholders
under applicable Law, in good faith have withdrawn, modified or changed
its recommendation of the approval of this Agreement and the Mergers in
a manner adverse to IVAX and, on or prior to such date, any person
(other than IVAX) shall have made a public announcement or otherwise
communicated to Bergen and its shareholders with respect to a Competing
Transaction that, as determined by the Board of Directors of Bergen
after consultation with its outside legal counsel (who may be its
regularly engaged outside legal counsel) and financial advisors,
contains terms more favorable to the shareholders of Bergen than those
provided for in the Reorganization; provided further, however, that
Bergen may not terminate this Agreement pursuant to this subsection (j)
until three business days have elapsed following delivery to IVAX of
written notice of such determination of Bergen (which written notice
shall inform IVAX of the material terms and conditions of the Competing
Transaction); provided further, however, that such termination under
this Section 8.01(j) shall not be effective until Bergen has made
payment to IVAX of the amounts required to be paid pursuant to Section
8.05(c).
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SECTION 8.02. Effect of Termination. Except as provided in
Section 9.01, in the event of termination of this Agreement pursuant to Section
8.01, this Agreement shall forthwith become void, there shall be no liability
under this Agreement on the part of any Bergen or IVAX or any of their
respective officers or directors, and all rights and obligations of each party
hereto shall cease, subject to the remedies of the parties hereto set forth in
Section 8.05(b), (c), (d) and (e); provided, however, that nothing herein shall
relieve any party hereto from liability for the willful or intentional breach of
any of its representations and warranties or the willful or intentional breach
of any of its covenants or agreements set forth in this Agreement.
SECTION 8.03. Amendment. This Agreement may be amended by the
parties hereto by action taken by or on behalf of their respective Boards of
Directors at any time prior to the Effective Time; provided, however, that,
after the approval of this Agreement by the shareholders of IVAX or Bergen, as
the case may be, no amendment may be made, except such amendments that have
received the requisite shareholder approval and such amendments as are permitted
to be made without shareholder approval under the FBCA, that would (i) reduce
the amount or change the type of consideration into which each share of IVAX
Common Stock or Bergen Common Stock, as the case may be, shall be converted upon
consummation of the Mergers, (ii) change any terms of this Agreement in a manner
that would materially and adversely affect either IVAX or Bergen, as the case
may be, or IVAX's shareholders or Bergen's shareholders, as the case may be, or
(iii) change any term of the Articles of Incorporation of IVAX or the
Certificate of Incorporation of Bergen. This Agreement may not be amended except
by an instrument in writing signed by the parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time,
any party hereto may (a) extend the time for or waive compliance with the
performance of any obligation or other act of any other party hereto or (b)
waive any inaccuracy in the representations and warranties contained herein or
in any document delivered pursuant hereto. Any such extension or waiver shall be
valid if set forth in an instrument in writing signed by the party or parties to
be bound thereby.
SECTION 8.05. Fees and Expenses. (a) Except as set forth in
this Section 8.05, all Expenses incurred in connection with this Agreement, the
IVAX Stock Option Agreement, the Bergen Stock Option Agreement and the Mergers
shall be paid by the party incurring such Expenses, whether or not the Mergers
are consummated, except that Bergen and IVAX each shall pay one-half of all
Expenses incurred solely for printing, filing and mailing the Registration
Statement and the Joint Proxy Statement and all SEC and other regulatory filing
fees incurred in connection with the Registration Statement and the Joint Proxy
Statement and the fee required to be paid in connection with the HSR Act.
"Expenses", as used in this Agreement, shall include all reasonable
out-of-pocket expenses (including, without limitation, all fees and expenses of
counsel, accountants, investment bankers, experts and consultants to a party
hereto and its affiliates) incurred by a party or on
61
its behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of its obligations pursuant to this
Agreement and the consummation of the Mergers, the preparation, printing, filing
and mailing of the Registration Statement and the Joint Proxy Statement, the
solicitation of shareholder approvals, the filing of HSR Act notice and all
other matters related to the closing of the Mergers.
(b) IVAX agrees that, if:
(i) IVAX shall terminate this Agreement pursuant to Section
8.01(i),
(ii) (A) Bergen shall terminate this Agreement pursuant to
Section 8.01(d) and (B) at the time of such termination, there shall
exist or be proposed a Competing Transaction with respect to IVAX, or
(iii) (A) Bergen shall terminate this Agreement pursuant to
Section 8.01(f)(i), (B) at the time of such failure to so approve this
Agreement, there shall exist or have been proposed a Competing
Transaction with respect to IVAX and (C) within 12 months thereafter,
IVAX shall enter into a definitive agreement with respect to any
Competing Transaction or any Competing Transaction shall be
consummated,
then, in the case of (i), prior to such termination, in the case of (ii),
promptly after such termination, or, in the case of (iii), promptly after the
execution and delivery of such agreement or such consummation, IVAX shall pay to
Bergen $50 million (the "IVAX Termination Fee"). In the event Bergen
subsequently exercises the option granted under the IVAX Stock Option Agreement,
Bergen shall refund to IVAX an amount equal to the IVAX Termination Fee less the
Expenses incurred by Bergen.
(c) Bergen agrees that, if:
(i) Bergen shall terminate this Agreement pursuant to Section
8.01(j),
(ii) (A) IVAX shall terminate this Agreement pursuant to
Section 8.01(e) and (B) at the time of such termination, there shall
exist or be proposed a Competing Transaction with respect to Bergen, or
(iii) (A) IVAX shall terminate this Agreement pursuant to
Section 8.01(f)(ii), (B) at the time of such failure to so approve this
Agreement, there shall exist or have been proposed a Competing
Transaction with respect to Bergen and (C) within 12 months thereafter,
Bergen shall enter into a definitive agreement with respect to any
Competing Transaction or any Competing Transaction shall be
consummated,
62
then, in the case of (i), prior to such termination, in the case of (ii),
promptly after such termination, or, in the case of (iii), promptly after the
execution and delivery of such agreement or such consummation, Bergen shall pay
to IVAX $39 million (the "Bergen Termination Fee"). In the event IVAX
subsequently exercises the option granted under the Bergen Stock Option
Agreement, IVAX shall refund to Bergen an amount equal to the Bergen Termination
Fee less the Expenses incurred by IVAX.
(d) Any payment required to be made pursuant to Section
8.05(b) or (c) shall be made to the party entitled to receive such payment not
later than two business days after delivery to the other party of notice of
demand for payment and shall be made by wire transfer of immediately available
funds to an account designated by the party entitled to receive payment in the
notice of demand for payment delivered pursuant to this Section 8.05(d).
(e) In the event that Bergen or IVAX, as the case may be,
shall fail to pay the Bergen Termination Fee or the IVAX Termination Fee, as the
case may be, the amount of any such Bergen Termination Fee or IVAX Termination
Fee shall be increased to include the costs and expenses actually incurred or
accrued by the other (including, without limitation, fees and expenses of
counsel) in connection with the collection under and enforcement of this Section
8.05, together with interest on such unpaid Bergen Termination Fee or IVAX
Termination Fee, commencing on the date that such Bergen Termination Fee or IVAX
Termination Fee became due, at a rate equal to the rate of interest publicly
announced by Citibank, N.A., from time to time, in The City of New York, from
time to time, as such bank's base rate plus 2.00%.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations and Warranties.
The representations and warranties in this Agreement shall terminate at the
Effective Time or upon the termination of this Agreement pursuant to Section
8.01, as the case may be. Each party agrees that, except for the representations
and warranties contained in this Agreement and the Bergen Disclosure Schedule
and the IVAX Disclosure Schedule, no party hereto has made any other
representations and warranties, and each party hereby disclaims any other
representations and warranties made by itself or any of its officers, directors,
employees, agents, financial and legal advisors or other representatives, with
respect to the execution and delivery of this Agreement or the Mergers
contemplated herein, notwithstanding the delivery or disclosure to any other
party or any party's representatives of any documentation or other information
with respect to any one or more of the foregoing.
63
SECTION 9.02. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
telecopy or facsimile, by registered or certified mail (postage prepaid, return
receipt requested) or by a nationally recognized courier service to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
9.02):
(a) if to IVAX or IVAX Merger Sub:
IVAX Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
P.A.
2200 Museum Tower Building
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Bergen or Bergen Merger Sub:
Bergen Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Milan A. Sawdei, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to BBI, to both IVAX and Bergen in the manner provided
in this Section 9.02.
64
SECTION 9.03. Certain Definitions. For purposes of this
Agreement, the following terms have the following meanings:
(a) "affiliate" has the meaning specified in Rule 144
promulgated by the SEC under the Securities Act;
(b) "Ancillary Agreements" means the IVAX Voting Agreement,
the Bergen Voting Agreement, the IVAX Stock Option Agreement and the
Bergen Stock Option Agreement;
(c) "Bergen Material Adverse Effect" means any change in or
effect on the business of Bergen and the Bergen Subsidiaries that is,
or is reasonably likely to be, materially adverse to the business,
assets (including intangible assets), liabilities (contingent or
otherwise), condition (financial or otherwise) or results of operations
of Bergen and the Bergen Subsidiaries taken as a whole; provided,
however, that "Bergen Material Adverse Effect" shall not include any
Bergen Material Adverse Effect Exclusion.
(d) "Bergen Material Adverse Effect Exclusion" means any
change in or effect upon the business, assets (including intangible
assets), liabilities (contingent or otherwise), condition (financial or
otherwise), or results of operations of Bergen or any Bergen Subsidiary
directly or indirectly arising out of or attributable to (i) the loss
by Bergen of any of its customers (including, without limitation, any
financial consequence of such loss of customers) due primarily to the
public announcement of this Agreement and the transactions contemplated
hereby, (ii) any decrease in the market price of Bergen Common Stock
(but not any change or effect underlying such decrease to the extent
such change or effect would otherwise constitute an Bergen Material
Adverse Effect) and (iii) changes or effects that generally affect the
industries in which Bergen or the Bergen Subsidiaries operate.
Notwithstanding anything to the contrary contained in this Agreement,
no Bergen Material Adverse Effect Exclusion shall be deemed to cause
the condition contained in Section 7.02(a) or (b) not to have been
satisfied.
(e) "beneficial owner" with respect to any shares of capital
stock means a person who shall be deemed to be the beneficial owner of
such shares (i) which such person or any of its affiliates or
associates (as such term is defined in Rule 12b-2 promulgated under the
Exchange Act) beneficially owns, directly or indirectly, (ii) which
such person or any of its affiliates or associates has, directly or
indirectly, (A) the right to acquire (whether such right is exercisable
immediately or subject only to the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
consideration rights, exchange rights, warrants or options, or
otherwise, or (B) the right to vote pursuant to any agreement,
arrangement or understanding, or (iii) which are beneficially owned,
directly or indirectly, by any
65
other persons with whom such person or any of its affiliates or
associates or person with whom such person or any of its affiliates or
associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any shares of
capital stock;
(f) "business day" means any day on which the principal
offices of the SEC in Washington, D.C. are open to accept filings, or,
in the case of determining a date when any payment is due, any day on
which banks are not required or authorized by law or executive order to
close in ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇;
(g) "$" means United States Dollars;
(h) "IVAX Material Adverse Effect" means any change in or
effect on the business of IVAX and the IVAX Subsidiaries that is, or is
reasonably likely to be, materially adverse to the business, assets
(including intangible assets), liabilities (contingent or otherwise),
condition (financial or otherwise) or results of operations of IVAX and
the IVAX Subsidiaries taken as a whole; provided, however, that "IVAX
Material Adverse Effect" shall not include any IVAX Material Adverse
Effect Exclusion.
(i) "IVAX Material Adverse Effect Exclusion" means any change
in or effect upon the business, assets (including intangible assets),
liabilities (contingent or otherwise), condition (financial or
otherwise), or results of operations of IVAX or any IVAX Subsidiary
directly or indirectly arising out of or attributable to (i) the loss
by IVAX of any of its customers (including, without limitation, any
financial consequence of such loss of customers) due primarily to the
public announcement of this Agreement and the transactions contemplated
hereby, (ii) the financial results of IVAX for the third quarter of
1996, (iii) any default under the $425 million Revolving Credit and
Reimbursement Agreement among IVAX, Norton Healthcare, Ltd., various
lenders named therein, Nationsbank, N.A., as agent and lender, and BA
Securities, Inc., as agent, and any cross-default provisions triggered
thereby under any other debt arrangements or other agreements of IVAX
or any IVAX Subsidiary, (iv) any decrease in the market price of IVAX
Common Stock (but not any change or effect underlying such decrease to
the extent such change or effect would otherwise constitute an IVAX
Material Adverse Effect) and (v) changes or effects that generally
affect the industries in which IVAX or the IVAX Subsidiaries operate.
Notwithstanding anything to the contrary contained in this Agreement,
no IVAX Material Adverse Effect Exclusion shall be deemed to cause the
condition contained in Section 7.03(a) or (b) not to have been
satisfied.
(j) "Governmental Order" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or
with any Governmental Entity;
66
(k) "knowledge" means, with respect to any matter in question,
that the executive officers of Bergen or IVAX, as the case may be, (i)
have actual knowledge of such matter or (ii) after due investigation,
should have known of such matter;
(l) "person" means an individual, corporation, partnership,
limited partnership, limited liability company, syndicate, person
(including, without limitation, a "person" as defined in Section
13(d)(3) of the Exchange Act), trust, association, entity or government
or political subdivision, agency or instrumentality of a government;
and
(m) "subsidiary" or "subsidiaries" of any person means any
corporation, limited liability company, partnership, joint venture or
other legal entity of which such person (either alone or through or
together with any other subsidiary of such person) owns, directly or
indirectly, more than fifty percent of the stock or other equity
interests, the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such
corporation or other legal entity.
SECTION 9.04. 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 Reorganization is not affected in any manner materially
adverse to any party. Upon such 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 to
the fullest extent permitted by applicable Law in order that the Mergers may be
consummated as originally contemplated to the fullest extent possible.
SECTION 9.05. Assignment; Binding Effect; Benefit. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of Law or
otherwise) without the prior written consent of the other parties hereto.
Subject to the preceding sentence, this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Notwithstanding anything contained in this Agreement to
the contrary, other than Section 6.07, nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties hereto or
their respective successors and permitted assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
SECTION 9.06. Incorporation of Exhibits. The Bergen Disclosure
Schedule, the IVAX Disclosure Schedule and all Exhibits attached hereto and
referred to herein are
67
hereby incorporated herein and made a part of this Agreement for all purposes as
if fully set forth herein.
SECTION 9.07. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
were not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or in equity.
SECTION 9.08. Governing Law. Except to the extent that the
Laws of the jurisdiction of organization of any party hereto, or any other
jurisdiction, are mandatorily applicable to the Mergers or to matters arising
under or in connection with this Agreement, this Agreement shall be governed by
the Laws of the State of New York. All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined in any New York state
or federal court sitting in The City of New York.
SECTION 9.09. Consent to Jurisdiction; Venue. (a) Each of the
parties hereto irrevocably submits to the exclusive jurisdiction of the state
courts of New York and to the jurisdiction of the United States District Court
for the Southern District of New York, for the purpose of any action or
proceeding arising out of or relating to this Agreement and each of the parties
hereto irrevocably agrees that all claims in respect to such action or
proceeding may be heard and determined exclusively in any New York state or
federal court sitting in The City of New York. Each of the parties hereto agrees
that a final judgment in any action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by Law.
(b) Each of the parties hereto irrevocably consents to the
service of any summons and complaint and any other process in any other action
or proceeding relating to the Mergers, on behalf of itself or its property, by
the personal delivery of copies of such process to such party. Nothing in this
Section 9.09 shall affect the right of any party hereto to serve legal process
in any other manner permitted by Law.
SECTION 9.10. Headings. The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 9.11. Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 9.12. Entire Agreement. This Agreement (including the
Exhibits, the Bergen Disclosure Schedule and the IVAX Disclosure Schedule) and
the Ancillary
68
Agreements constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings
among the parties with respect thereto. No addition to or modification of any
provision of this Agreement shall be binding upon any party hereto unless made
in writing and signed by all parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
BBI HEALTHCARE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Executive Officer
IVAX CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, M.D.
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇, M.D.
Title: Chairman and Chief Executive Officer
BERGEN ▇▇▇▇▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman and Chief Executive Officer
BBI-I SUB, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, M.D.
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇, M.D.
Title: Chairman and Chief Executive Officer
BBI-B SUB, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman and Chief Executive Officer