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Agreement And Plan Of Merger Among

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Sectors: Biotechnology / Pharmaceuticals
Governing Law: Washington, View Washington State Laws
Effective Date: November 16, 1994
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Exhibit 2.1


AGREEMENT
AND
PLAN OF MERGER
AMONG
BERGEN BRUNSWIG CORPORATION,
BIDDLE & CROWTHER COMPANY,
RAYMOND L. BIDDLE
AND
BERKLEY G. BIDDLE


TABLE OF CONTENTS


RECITALS................................................................ 1


ARTICLE I DEFINITIONS......................................... 1


ARTICLE II THE PLAN OF MERGER.................................. 5


2.1 The Merger.................................................... 5
2.2 Exchange of Shares............................................ 6
2.3 Further Assurances............................................ 9
2.4 Adjustment Upon Recapitalization.............................. 9
2.5 Securities Law Matters........................................ 9


ARTICLE III REPRESENTATIONS AND WARRANTIES...................... 10


ARTICLE IV ADDITIONAL COVENANTS AND
AGREEMENTS OF THE PARTIES........................... 11


4.1 Corporate Approval............................................ 11
4.2 Conduct of Business........................................... 11
4.3 Negative Covenants............................................ 11
4.4 Exclusive Dealing............................................. 12
4.5 Recent Certified Financial.................................... 12
4.6 Access........................................................ 13
4.7 Security...................................................... 13
4.8 Intentionally Omitted......................................... 13
4.9 Transitional Provisions....................................... 13
4.10 Best Efforts.................................................. 13
4.11 Brokers or Finders............................................ 14
4.12 Notice to Customers........................................... 14
4.13 Covenants Not to Compete...................................... 14
4.14 Employment Agreements......................................... 14
4.15 Payment of Special Dividends.................................. 14
4.16 Environmental Matters......................................... 14
4.17 Certain Real Estate Matters................................... 15
4.18 Indebtedness of Employees and Stockholders.................... 15
4.19 Trade Accounts Receivable Aging............................... 15
4.20 Debit Memos................................................... 15
4.21 Termination of Employment Contracts........................... 15
4.22 Press Release................................................. 15
4.23 Clauson Contract.............................................. 15
4.24 Commission Rate Freeze........................................ 15


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ARTICLE V AUDIT............................................... 16


5.1 Accountant's Reports.......................................... 16
5.2 Asset Value................................................... 17
5.3 Liability Value............................................... 18


ARTICLE VI THE CLOSING......................................... 18


6.1 The Closing................................................... 18
6.2 Listed Shares................................................. 18
6.3 Termination................................................... 18
6.4 Liability on Termination...................................... 19


ARTICLE VII CONDITIONS TO OBLIGATION OF EACH PARTY.............. 19


7.1 No Prohibition of Transaction................................. 20
7.2 Compliance With Law........................................... 20
7.3 Proceedings, Documentation and Consents....................... 20


ARTICLE VIII CONDITIONS TO THE OBLIGATION OF
BBC TO CLOSE............................................. 20


8.1 Representations and Warranties True at the Closing
Date.......................................................... 20
8.2 No Material Adverse Change.................................... 21
8.3 Corporation's Performance..................................... 21
8.4 Necessary Corporate Approvals................................. 21
8.5 Corporate Authority........................................... 21
8.6 Opinion of Counsel............................................ 21
8.7 Investment Letters............................................ 22
8.8 Satisfactory Searches......................................... 22
8.9 Covenants Not To Compete...................................... 22
8.10 Employment Agreements......................................... 22
8.11 Environmental Review.......................................... 22
8.12 Consents to the Merger........................................ 22
8.13 Seattle Lease................................................. 23
8.14 Tax Waivers................................................... 23
8.15 Continuation Agreements with Major Customers.................. 23
8.16 Results of Investigation...................................... 23


ARTICLE IX CONDITIONS TO THE CORPORATION'S
AND STOCKHOLDERS' OBLIGATIONS TO CLOSE.............. 23


9.1 Representations and Warranties True at the
Closing....................................................... 23


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9.2 BBC's Performance............................................. 23
9.3 No Material Adverse Change.................................... 24
9.4 Authority..................................................... 24
9.5 Opinion of BBC's Counsel...................................... 24
9.6 Employment Agreements......................................... 24
9.7 Seattle Lease................................................. 24


ARTICLE X SURVIVAL OF REPRESENTATIONS
AND INDEMNIFICATION...................................... 24


10.1 Survival of Representations and Warranties.................... 24
10.2 Indemnification by the Corporation and
Stockholders.................................................. 25
10.3 Indemnification by BBC........................................ 27
10.4 Enforcement of Indemnification Rights......................... 27
10.5 Remedies Cumulative........................................... 28
10.6 Liability for Deficiency...................................... 28
10.7 Access to Books and Records................................... 28
10.8 Taxes......................................................... 29
10.9 Insurance..................................................... 29
10.10 Environmental Cleanup.................................... 29
10.11 Trade Accounts Receivable Guarantee...................... 30
10.12 Debit Memos.............................................. 31
10.13 Intentionally omitted.................................... 31
10.14 Defined Benefit Pension Plan............................. 31
10.15 Clauson Contract......................................... 31
10.16 Power of Attorney........................................ 31
10.17 Direction to Escrow Agent................................ 32


ARTICLE XI MISCELLANEOUS....................................... 32


11.1 Notices....................................................... 32
11.2 Assignability and Parties in Interest......................... 33
11.3 Expenses...................................................... 33
11.4 Collections................................................... 33
11.5 Governing Law................................................. 34
11.6 Counterparts.................................................. 34
11.7 Headings...................................................... 34
11.8 Pronouns, etc................................................. 34
11.9 Complete Agreement............................................ 34
11.10 Modifications, Amendments and Waivers.................... 34
11.11 Severability............................................. 34


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APPENDICES - ----------


SECTION DESCRIPTION REFERENCE


Appendix A Escrow Agreement..................................... 2.2(d) Appendix B Private Placement Questionnaire...................... 2.5(a) Appendix C Covenant Not to Compete.............................. 4.13 Appendix D Employment Agreement................................. 4.14 Appendix E Real Estate Lease.................................... 4.17 Appendix F Opinion of Corporation's Counsel..................... 8.6 Appendix G Opinion of BBC's Counsel............................. 9.5 Appendix H Joinder Agreement.................................... 8.5 Appendix I Business Terms of Clauson Contract................... 4.23


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AGREEMENT
AND
PLAN OF MERGER


THIS AGREEMENT AND PLAN OF MERGER ("Agreement") has been made and entered into as of this 16th day of November, 1994, by and among BERGEN BRUNSWIG CORPORATION, a New Jersey corporation ("BBC"), BIDDLE & CROWTHER COMPANY, a Washington corporation ("Corporation"), and RAYMOND L. BIDDLE and BERKLEY G. BIDDLE ("Stockholders").


RECITALS:


1. The respective boards of directors of BBC and the Corporation have determined that it is in the best interests of each corporation and its stockholders to provide for a merger (the "Merger") pursuant to which (x) the Corporation will be merged with and into BBC and (y) shareholders of the Corporation will receive, in exchange for their shares of the Corporation's Class A Common Stock, no par value and Class B Common Stock, no par value (collectively, the "Corporation Stock"), shares of BBC's Class A Common Stock, par value $1.50 per share (the "Stock"), all on the terms and conditions hereinafter set forth.


2. The Stockholders are the principal stockholders of the Corporation and are willing to enter into this Agreement in order to induce BBC to enter into this Agreement.


NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties adopt this Agreement as and for a Plan of Merger (the "Plan") under Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the "Code"), and in order to implement such Plan, the parties represent, warrant, covenant, and agree as follows:


ARTICLE I
DEFINITIONS


The terms defined in this Article (except as otherwise expressly provided in this Agreement) for all purposes of this Agreement and the Supplemental Agreement shall have the respective meanings specified in this Article.


1.1 Affiliate shall mean any entity controlling, controlled by, or under common control with the Corporation.


1.2 Agreement shall mean this Agreement, the Supplemental Agreement and all the exhibits and other documents attached to or referred to in either of them, and all amendments and supplements, if any, to either of them.


1.3 Closing shall mean the meeting of the parties at which all Closing Documents shall be exchanged by the parties, except for those documents or other items specifically required to be exchanged at a later time.


1.4 Closing Date shall mean January 10, 1995, or such other date thereafter as agreed to by the parties as the date on which the Closing shall occur.


1.5 Closing Documents shall mean the papers, instruments and documents required to be executed and delivered at the Closing pursuant to this Agreement.


1.6 CPA shall mean Deloitte & Touche.


1.7 Debit Memos shall mean memoranda issued by the Corporation to its vendors asserting its claim to a credit from such vendors with respect to merchandise returned to such vendors, promotional allowances earned, chargebacks or rebates, whether such items are classified by the Corporation as receivables from vendors or reductions of payables to vendors.


1.8 Durr shall mean Durr Medical Corporation, an Alabama corporation which is an indirect subsidiary of BBC.


1.9 ERISA shall mean the Employee Retirement Income Security Act.


1.10 Escrow Agent shall mean a fiduciary mutually acceptable to BBC and the Corporation.


1.11 Estimated Net Asset Value shall mean the Net Asset Value calculated as of November 30, 1994, and shall be based upon unaudited financial statements prepared by the Corporation in accordance with GAAP (as reflected on the most recent balance sheet of the Corporation which is annexed as part of Exhibit 2.25.1 to the Supplemental Agreement (the "Most Recent Balance Sheet")), as modified in accordance with Sections 5.2 and 5.3 of this Agreement and adjusted to give pro forma effect to the payment of the special dividends contemplated by Section 4.15 (the "Preliminary Balance Sheet"). The Preliminary Balance Sheet shall be delivered to BBC not later than two weeks prior to the Closing Date and shall be accompanied by a certificate of the Stockholders to the effect that it fairly presents their estimate of Net Asset Value as of that date.


1.12 Exchange Agent shall mean Lowenstein, Sandler, Kohl, Fisher & Boylan, P.C. or such other firm or financial institution as shall be designated by BBC prior to the Effective Time of the Merger.


1.13 FIFO Cost shall mean the cost of an item of inventory to the Corporation, determined on a first-in, first-out basis.


1.14 GAAP shall mean generally accepted accounting principles applied by the Corporation in a manner consistent with prior periods.


1.15 Initial Escrowed Shares shall mean that number of shares of Stock having an aggregate Market Value of $3,000,000.


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1.16 Initial Non-Escrowed Shares of Stock shall mean the shares of Stock to be issued by BBC pursuant to Section 2.2(c) other than the Initial Escrowed Shares.


1.17 Knowledge. Any limitation or qualification of a representation or warranty made by the Corporation or the Stockholders in this Agreement or in the Supplemental Agreement which is based on "knowledge" shall include facts known to either of the Stockholders or John Clauson.


1.18 Market Value shall mean the average of the last sale prices of the Stock on the New York Stock Exchange during the 30 trading days ending 10 days prior to the Closing Date, but such Market Value shall not be greater than $17 5/8 nor less than $14 5/8.


1.19 Merger Consideration shall mean Net Asset value plus three million dollars $3,000,000.


1.20 Net Asset Value shall mean the Corporation's assets as of the Closing Date, as valued pursuant to Section 5.2, less the Corporation's liabilities as of the Closing Date, as valued pursuant to Section 5.3. Net Asset Value shall be calculated after deducting the Special Dividends paid pursuant to Section 4.15.


1.21 Outstanding Share Number shall mean the number of shares of Corporation Stock outstanding at the Effective Time of the Merger.


1.22 BBC Representative shall mean any one of the following persons: Robert E. Martini, Dwight A. Steffensen, Neil F. Dimick or Milan A. Sawdei.


1.23 Per Share Merger Consideration shall mean a number of shares of Stock determined by dividing the Merger Consideration by a number resulting from the multiplication of Market Value by the Outstanding Share Number.


1.24 Premises shall mean all locations at which the Corporation or its Affiliates do business and which are listed in Exhibit 2.7.1 to the Supplemental Agreement.


1.25 Regulated Substances shall have the meaning ascribed to that term in Section 2.24(a) of the Supplemental Agreement.


1.26 Representative shall mean Berkley G. Biddle or Raymond L. Biddle if Berkley G. Biddle should be unable to act on any matter or matters.


1.27 SEC shall mean the Securities and Exchange Commission.


1.28 Supplemental Agreement shall mean an agreement, executed concurrently with this Agreement by the parties to this Agreement, containing a series of representations and warranties.


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1.29 Trade Accounts Receivable shall mean all accounts receivable arising from the sale or lease of goods or services to customers in the ordinary course of the Corporation's business and to manufacturers for goods delivered to manufacturers, salesmen.


1.30 Terms Defined in Other Sections. The following terms are defined elsewhere in this Agreement in the following Sections:


Term Section
---- -------
Act 2.5(a)
Closing Value 5.2(a)
Code Lead-in
Corporation Heading
Corporation Stock Recital 1
Effective Time of the Merger 2.1(d)
ERISA 4.2(j)
Escrow Agreement 2.2(d)
Escrow Shares 2.2(d)
Escrow Percentage 2.2(d)
Final Accountant's Report 5.1(b)
HSR Act 4.9
Initial Accountant's Report 5.1(a)
Loss or Losses 10.2
Merger Recital 1
Merger Document 2.1(d)
Most Recent Balance Sheet 1.11
Obsolete Inventory 5.2(a)
Old Certificates 2.2(h)
Outside Date 6.1
BBC Heading
PBGC 4.2(j)
Permitted Transferees 2.5(b)
Plan Lead-in
Preliminary Balance Sheet 1.11
Proposed Statement 5.1(a)
Pro-Rata Share 2.2(c)
Reassigned Receivables 10.11(a)
Registration Statement 2.5(c)
Saleable Inventory 5.2(a)
Special Dividends 4.15
State Law 2.1
Stockholders Heading
Stock Recital
Surviving Corporation 2.1(a)


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ARTICLE II
THE PLAN OF MERGER


2.1 The Merger. Upon performance of all covenants and obligations of the parties contained herein and upon fulfillment (or waiver) of all conditions to the obligations of the parties contained herein, at the Effective Time of the Merger and pursuant to the New Jersey Business Corporation Act and the Business Corporation Act of the State of Washington (the "State Law"), BBC and the Corporation shall cause the following to occur:


(a) The Surviving Corporation. The Corporation shall be merged with and into BBC, the latter of which shall be the surviving corporation (the "Surviving Corporation"). The separate existence and corporate organization of the Corporation shall cease at the Effective Time of the Merger, and thereupon BBC and the Corporation shall be a single corporation, the name of which shall be Bergen Brunswig Corporation. BBC, as the Surviving Corporation, shall succeed, insofar as permitted by law, to all rights, assets, liabilities and obligations of the Corporation in accordance with the State Law.


(b) Articles of Incorporation. The Articles of Incorporation of BBC shall be and remain the articles of incorporation of the Surviving Corporation until amended as provided by law.


(c) By-Laws. The By-Laws of BBC shall be and remain the By-Laws of the Surviving Corporation until amended as provided by law.


(d) Merger Document. Upon completion of the Closing, a Articles of Merger, in form satisfactory to BBC and the Corporation, in substance consistent in all respects with the terms of this Agreement, and properly executed in accordance with the State Law (the "Merger Document"), shall be filed with the Secretary of State of the State of New Jersey and with the Secretary of State of the State of Washington. The Merger shall become effective when the Merger Document is so filed. The date and time when the Merger shall become effective is referred to in this Agreement as the "Effective Time of the Merger."


(e) Directors. From and after the Effective Time of the merger and until their respective successors shall be duly elected and qualified, the Board of Directors of the Surviving Corporation shall consist of each of the members of the Board of Directors of BBC.


(f) Officers. From and after the Effective Time of the Merger, the officers of BBC shall be the officers of the Surviving Corporation until their respective successors shall be duly elected or appointed and qualified.


2.2 Exchange of Shares. The manner of converting the shares of Corporation Stock, at the Effective Time of the Merger into shares of Stock having an aggregate Market Value equal to the Merger Consideration shall be as follows:


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(a) Treasury Shares. Any shares of the Corporation's capital stock held in the treasury of the Corporation as of the Effective Time of the Merger shall be canceled and retired as of the Effective Time of the Merger. No cash, securities or other consideration shall be paid or delivered in exchange for any such treasury shares under this Agreement.


(b) Corporation Stock. Except as otherwise provided herein with respect to fractional share interests, each share of Corporation Stock outstanding immediately prior to the Effective Time of the Merger shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into the Per Share Merger Consideration.


(c) Delivery Outright. At the Effective Time of the Merger, BBC will deliver outright and free of escrow the Initial Non-Escrowed Shares to the stockholders of the Corporation in proportion to their respective ownership interests in the Corporation as reflected on Exhibit 2.12 to the Supplemental Agreement ("Pro-Rata Share").


(d) Delivery in Escrow. At the Effective Time of the Merger, BBC will withhold that proportion of the Merger Consideration represented by the Initial Escrowed Shares ("Escrow Percentage") and will deliver those shares to the Escrow Agent, to be held by the Escrow Agent as collateral for the indemnification and other obligations of the Corporation's stockholders hereunder and pursuant to the provisions of an escrow agreement (the "Escrow Agreement") in substantially the form of Appendix A hereto. The Initial Escrow Shares will be represented by a certificate or certificates issued in the name of the Escrow Agent and will be held by the Escrow Agent from the Effective Time of the Merger until distribution is authorized pursuant to the terms of this Agreement and the Escrow Agreement. By virtue of the approval of this Agreement by the stockholders of the Corporation, such stockholders shall, without any further act of any such stockholders, be deemed to have consented to and approved (i) the use of the Initial Escrow Shares as well as shares held in escrow after certain shares are released (collectively "Escrow Shares") as collateral for the above-mentioned obligations in the manner set forth in this Agreement and the Escrow Agreement, (ii) the appointment of the Representative as the Representative and as the attorney-in-fact and agent for each of the Corporation's stockholders under the Escrow Agreement, (iii) the taking by the Representative and the Representative's successors, if any, of any and all actions and the making of any and all decisions required or permitted to be taken by him under the Escrow Agreement (including, without limitation, the exercise of the power to: authorize delivery to BBC of Escrow Shares in accordance with the terms of this Agreement and satisfaction of claims by BBC; negotiate and enter into settlements and compromises of and comply with orders of courts with respect to such claims; resolve any claim made pursuant to Section 10.2 and; take all actions necessary in the judgment of the Representative for the accomplishment of the foregoing) and (iv) all of the other terms, conditions and limitations in the Escrow Agreement.


(e) Post-Closing Adjustment. If the Net Asset Value as of the Closing Date, as shown by the Final Accountant's Report prepared pursuant to Article V hereof, should exceed the Estimated Net Asset Value, then BBC shall deliver to the Escrow Agent that number of additional shares of Stock determined by multiplying such excess by the Escrow Percentage, and shall issue and deliver the balance of those additional shares to the stockholders of the Corporation in


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proportion to their respective Pro-Rata Shares. In no event shall BBC be required to issue more shares of Stock in connection with the Merger, including shares to be issued at and shares to be issued after the Closing, than that number of shares which have an aggregate value, calculated at Market Value, equal to 110% of Estimated Net Asset Value. if the Estimated Net Asset Value should exceed the Net Asset Value as of the Closing Date, as shown by the Final Accountant's Report, BBC shall be entitled to a refund of that number of shares determined by dividing that the total number of shares to be refunded by the Market Value. The Stockholders shall cause the Escrow Agent to return to BBC that number of shares determined by multiplying the shortfall by the Escrow Percentage, and agree jointly and severally to cause the stockholders of the Corporation to refund the balance of those shares to BBC.


(f) Fractional Shares. In lieu of the issuance, transfer or recognition of fractional shares of Stock or interests or rights therein pursuant to this Section 2.2, BBC shall pay or shall cause the Surviving Corporation to pay to each holder of Corporation Stock to be converted into Stock pursuant to this Section 2.2 an amount of cash equal to the fair market value of any fraction of a share of Stock to which such holder would be entitled but for this provision. For purposes of such payment, the fair market value of a fraction of a share of Stock shall equal such fraction multiplied by the Market Value.


(g) Records. For purposes of this
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