SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: SEPTEMBER 16, 1996
C. R. BARD, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
New Jersey 1-6926 22-1454160
(STATE OF COMMISSION FILE NUMBER IRS EMPLOYER
INCORPORATION) IDENTIFICATION NO.
730 Central Avenue, Murray Hill, New Jersey
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
07974
(ZIP CODE)
(908) 277-8000
(REGISTRANT'S TELEPHONE NUMBER)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
Pursuant to an Agreement and Plan of Merger, dated as of August 2,
1996, as amended (the "Agreement and Plan of Merger"), among C. R.
Bard, Inc. ("Bard"), CRB Acquisition Company, a wholly-owned
subsidiary of Bard ("CRB"), and IMPRA, Inc. ("IMPRA"), on September
16, 1996 CRB was merged with and into IMPRA as a result of which
IMPRA has become a wholly-owned subsidiary of Bard. The shares of
common stock of IMPRA outstanding immediately prior to the merger
were converted into the right to receive a pro rata portion of
$143,196,000. The purchase price is subject to adjustment as
provided in the Agreement and Plan of Merger. In addition, Bard
acquired certain related real estate from affiliates of IMPRA for
$3,000,000. Such amounts were financed by Bard through borrowings.
IMPRA, a privately held company, develops, manufactures and markets
vascular grafts used for blood vessel replacement surgery. Bard
intends to continue such business. The Press Release, dated
September 16, 1996, is attached hereto as Exhibit 99 and is
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
a) Financial Statements of IMPRA, Inc.
Independent Auditors' Report. . . . . . . . . . . . . .Page E-2
Consolidated Balance Sheets at June 30, 1996 and 1995. Page E-3
Consolidated Statements of Income and Retained
Earnings for the Years Ended June 30, 1996 and 1995. . Page E-5
Consolidated Statements of Cash Flows for the
Years Ended June 30, 1996 and 1995. . . . . . . . . . .Page E-6
Notes to Consolidated Financial Statements for the
Years Ended June 30, 1996 and 1995. . . . . . . . . . .Page E-8
b) Pro Forma Financial Statements.
The following unaudited pro forma combined condensed financial
statements are filed with this report:
Unaudited Pro Forma Combined Condensed Balance Sheet as of
June 30, 1996. . . . . . . . . . . . . . . . . . . . . Page F-1
Unaudited Pro Forma Combined Condensed Consolidated Statement of
Income:
Year Ended December 31, 1995. . . . . . . . . . . Page F-3
Six Months Ended June 30, 1996. . . . . . . . . . Page F-4
- 2 -
<PAGE>
The following Unaudited Pro Forma Combined Condensed Balance
Sheet as of June 30, 1996 and the Unaudited Pro Forma Combined
Condensed Statements of Income for the twelve months ended
December 31, 1995 and six months ended June 30, 1996 give
effect to the merger described in Item 2 accounted for under
the purchase method of accounting. The Unaudited Pro Forma
Combined Condensed Financial Statements are based on the
historical Consolidated Financial Statements of Bard and IMPRA
under the assumptions and adjustments set forth in the
accompanying Notes to the Unaudited Pro Forma Combined
Condensed Financial Statements.
The Unaudited Pro Forma Combined Condensed Balance Sheet
assumes that the merger was consummated on June 30, 1996 and
the Unaudited Pro Forma Combined Condensed Statements of
Income assumes the merger was consummated on January 1, 1995.
The fiscal year of Bard ends on December 31 and the fiscal
year of IMPRA ends on June 30. For purposes of presenting the
Unaudited Pro Forma Combined Condensed Statements of Income
the historical statements of IMPRA were compiled on a calendar
year basis ended December 31, 1995, and six months
ended June 30, 1996 consistent with Bard's calendar year-end.
The pro forma adjustments are based on the Agreement and Plan
of Merger which provides for IMPRA common stockholders to
receive $143,196,000. Bard utilized borrowings to finance the
merger. For purposes of presenting the Unaudited Pro Forma
Combined Condensed Balance Sheet, IMPRA's assets and
liabilities have been recorded at their estimated fair market
values and the excess purchase price has been assigned to
goodwill. These fair values are based on preliminary
estimates. Upon completion of a detailed review of assets and
liabilities, including intangibles, certain adjustments may be
required to finalize the purchase accounting that could be
material to the Company's financial statements.
The Unaudited Pro Forma Combined Condensed Statements of
Income exclude any benefits that result from the merger due to
synergies that may be derived and the elimination of
duplicative efforts.
The Unaudited Pro Forma Combined Condensed Financial
Statements may not be indicative of the results that actually
would have occurred if the merger had been consummated on the
dates indicated or which may be obtained in the future. The
Unaudited Pro Forma Combined Condensed Financial Statements
should be read in conjunction with the historical Consolidated
Financial Statements and Notes for IMPRA and Bard.
- 3 -
<PAGE>
c) Exhibits.
No. Description
2 (a) Agreement and Plan of Merger dated as of August 2,
1996 among C.R. Bard, Inc., CRB Acquisition Corp.
and IMPRA, Inc.
2 (b) First Amendment to the Agreement and Plan of Merger
dated as of September 10, 1996 among C.R. Bard,
Inc., CRB Acquisition Corp. and IMPRA, Inc.
99 News Release - Bard Announces Acquisition of IMPRA
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
C. R. BARD, INC.
(Registrant)
By: William C. Bopp /s/
William C. Bopp
Executive Vice President
and Chief Financial Officer
Dated: September 27, 1996
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<PAGE>
<TABLE>
Unaudited Pro Forma Combined Condensed Balance Sheet
<CAPTION>
June 30, 1996
Historical
Pro Forma
(Dollars in thousands) Bard IMPRA Adjustments Total
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash and Short-Term Investments $ 64,500 $ 6,900 $ 71,400
Accounts Receivable, net 232,400 7,800 240,200
Inventories 245,600 3,900 249,500
Other Current Assets 9,500 4,200 $ (2,500)(1) 11,200
Total Current Assets 552,000 22,800 (2,500) 572,300
Property, Plant and Equipment 214,400 3,000 800 (2) 218,200
Intangible Assets, net 308,300 600 141,000 (3) 449,900
Other Assets 75,100 500 1,500 (4) 77,100
$1,149,800 $26,900 $140,800 $1,317,500
Liabilities and Shareholders' Investment
Current Liabilities
Short-Term Borrowings and Current
Maturities of Long-Term Debt $ 159,100 $ 2,800 $ (1,700)(5) $ 160,200
Accounts Payable 35,700 2,600 38,300
Accrued Expenses 129,300 6,000 12,700 (6) 148,000
Federal and Foreign Income Taxes 3,900 (2,300)(6) 1,600
Total Current Liabilities 328,000 11,400 8,700 348,100
Long-Term Debt 194,800 100 154,300 (4) 349,200
Other Long-Term Liabilities 43,100 43,100
Shareholders' Investment
Preferred Stock
Common Stock 14,300 14,300
Capital in Excess of Par Value 72,300 200 (200)(7) 72,300
Retained Earnings 494,900 15,200 (15,200)(7) 494,900
Other 2,400 (6,800)(6) (4,400)
583,900 15,400 (22,200) 577,100
$1,149,800 $26,900 $140,800 $1,317,500
<FN>
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Balance Sheet.
F - 1
<PAGE>
NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED BALANCE SHEET
The Unaudited Pro Forma Combined Condensed Balance Sheet gives
effect to the merger, which was accounted for under the purchase
method of accounting, as if it had been consummated on June 30,
1996.
The following is a summary of adjustments reflected in the
Unaudited Pro Forma Combined Condensed Balance Sheet:
1) Represents the settlement of IMPRA's related party notes
receivable at the date of merger. These proceeds have been
presented as a reduction to the long-term debt financing
required.
2) Represents the acquisition of the Tempe manufacturing facility
and adjustments to reflect the fair value of IMPRA's property,
plant and equipment.
3) Represents the adjustment required to record goodwill related
to the merger and adjustments to reflect the fair value of
IMPRA's intangibles. The purchase price of $143,196,000 has
been adjusted to include the direct costs of the acquisition
paid by Bard.
4) Represents the issuance of debt and deferral of debt issuance
costs to acquire the outstanding shares of IMPRA. Although
the acquisition was initially financed with commercial paper,
the Company anticipates refinancing approximately this amount
with long-term debt in the fourth quarter. The long-term debt
will be at higher interest rates. For pro forma purposes
long-term debt assumptions were utilized.
5) Represents the repayment of various bank notes payable at the
time of closing.
6) Represents direct acquisition costs and one-time charges to be
incurred by Bard related to the integration of the IMPRA
business and their associated tax effects.
7) Represents the elimination of IMPRA's historical equity.
F - 2
<PAGE>
<TABLE>
Unaudited Pro Forma Combined Condensed Income Statement
<CAPTION>
For the Twelve Month
Period 12/31/95
Historical
Pro Forma
(Dollars in thousands) Bard IMPRA Adjustments Total
<S> <C> <C> <C> <C>
Net sales $1,137,800 $45,600 $1,183,400
Costs and Expenses
Cost of Goods Sold 550,000 7,100 557,100
Marketing, Selling and
Administrative 354,600 29,000 $ 3,600 (1) 387,200
Research and Development 75,600 2,700 78,300
Costs to Combine Operations 17,700 9,000 (2) 26,700
997,900 38,800 12,600 1,049,300
Operating Income 139,900 6,800 (12,600) 134,100
Interest Expense (Income) 24,200 (300) 11,300 (3) 35,200
Other Income (Expense), net 7,800 (300) 7,500
Income Before Taxes 123,500 6,800 (23,900) 106,400
Provision (Benefit) for Income
Taxes 36,700 2,800 (6,600)(4) 32,900
Net Income $ 86,800 $ 4,000 $(17,300) $ 73,500
Weighted Average Number of
Common Shares Outstanding 56,731,000 56,731,000
Earnings Per Share of
Common Stock $ 1.53 $ 1.30
<FN>
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Income
Statement.
F - 3
<PAGE>
<TABLE>
Unaudited Pro Forma Combined Condensed Income Statement
<CAPTION>
For the Six Month
Period 6/30/96
Historical
Pro Forma
(Dollars in thousands) Bard IMPRA Adjustments Total
<S> <C> <C> <C> <C>
Net sales $ 584,400 $25,800 $ 610,200
Costs and Expenses
Cost of Goods Sold 283,900 4,300 288,200
Marketing, Selling and
Administrative 176,400 16,600 $ 1,800 (1) 194,800
Research and Development 39,100 1,600 40,700
499,400 22,500 1,800 523,700
Operating Income 85,000 3,300 (1,800) 86,500
Interest Expense (Income) 12,100 (300) 5,700 (3) 17,500
Other Income (Expense), net (23,300) (300) (23,600)
Income Before Taxes 49,600 3,300 (7,500) 45,400
Provision (Benefit) For
Income Taxes (5,000) 1,300 (2,200)(4) (5,900)
Net Income $ 54,600 $ 2,000 $(5,300) $ 51,300
Weighted Average Number of
Common Shares Outstanding 57,009,000 57,009,000
Earnings Per Share of
Common Stock $ .96 $ .90
<FN>
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Income
Statement.
F - 4
<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED STATEMENTS OF INCOME
The Unaudited Pro Forma Combined Condensed Statements of Income
have been prepared to reflect the merger as if it occurred on
January 1, 1995. The merger has been accounted for under the
purchase method of accounting. The excess of the purchase price
over the fair value of the net assets acquired (goodwill) is being
amortized on a straight-line basis over a 40-year period.
The following is a summary of adjustments reflected in the
Unaudited Pro Forma Combined Condensed Statements of Income:
1) Represents the amortization of additional goodwill over 40
years and the adjustment to depreciation resulting from the
acquisition of the Tempe manufacturing facility.
2) Represents one-time charges to be incurred by Bard related to
the integration of the IMPRA business.
3) Represents the increase in interest expense resulting from the
merger. The acquisition was financed with borrowings at an
assumed long-term rate of 7.25%. Interest expense includes
amortization of long-term debt issuance costs.
4) Represents the tax effect of the Unaudited Pro Forma Combined
Condensed Statements of Income adjustments, excluding the
goodwill amortization.
F - 5
Exhibit 2(a)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 2, 1996,
by and among C.R. Bard, Inc., a New Jersey corporation ("Buyer"),
CRB Acquisition Company, an Arizona corporation and a wholly-owned
subsidiary of Buyer ("Buyer Sub"), and IMPRA, Inc., an Arizona
corporation ("IMPRA"). The parties hereto are sometimes
hereinafter referred to collectively as the "Companies." Buyer Sub
and IMPRA are sometimes hereinafter referred to collectively as the
"Constituent Corporations," or individually as a "Constituent
Corporation."
WHEREAS, the respective Boards of Directors of the
Companies deem it advisable and in the best interests of their
respective shareholders that Buyer acquire IMPRA by the merger of
Buyer Sub with and into IMPRA upon the terms and subject to the
conditions set forth herein (the "Merger").
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements
set forth herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER ARTICLE I THE MERGER
1.1 The Merger1.1 The Merger . Subject to the terms and
conditions of this Agreement, at the Effective Time (as defined in
Section 1.2 hereof) of the Merger, Buyer Sub shall be merged with and into
IMPRA, with IMPRA being the surviving corporation in such Merger
(the "Surviving Corporation") and the separate existence of Buyer
Sub shall thereupon cease. The Merger shall have the effects set
forth in Section 10-1106 of the Arizona Business Corporation Act
(as amended, "ABCA"). Immediately following the Effective Time of
the Merger, the Surviving Corporation shall be a wholly-owned
subsidiary of Buyer.
1.2 Effective Time of the Merger1.2 Effective Time of the
Merger . The Merger shall become effective upon the completion of the
filing of properly executed Articles of Merger and a Plan of Merger with
the Arizona Corporation Commission, which filing shall be made on the
Closing Date after satisfaction of the conditions set forth in
Article VIII. When used in this Agreement, the term "Effective
Time" with respect to the Merger shall mean the date and time at
which such Articles of Merger and Plan of Merger are successfully
filed.
ARTICLE II
BUYER AND THE SURVIVING CORPORATIONARTICLE II BUYER AND THE SURVIVING
CORPORATION
2.1 Articles of Incorporation of the Surviving
Corporation2.1 Articles of Incorporation of the Surviving Corporation .
The Articles of Incorporation of Buyer Sub as in effect at the Effective
Time shall be the Articles of Incorporation of the Surviving Corporation of
the Merger.
2.2 Bylaws of the Surviving Corporation2.2 Bylaws of the
Surviving Corporation . The Bylaws of Buyer Sub as in effect at the
Effective Time shall be the Bylaws of the Surviving Corporation.
2.3 Directors and Officers of the Surviving Corporation2.3
Directors and Officers of the Surviving Corporation .
(a) The directors of Buyer Sub at the Effective
Time shall be the initial directors of the Surviving Corporation
and shall hold office from the Effective Time until their
respective successors are duly elected or appointed and qualified
in the manner provided in the Articles of Incorporation and Bylaws
of the Surviving Corporation, or as otherwise provided by law.
(b) The officers of Buyer Sub at the Effective Time
shall be the initial officers of the Surviving Corporation and
shall hold office from the Effective Time until removed or until
their respective successors are duly elected or appointed and
qualified in the manner provided in the Articles of Incorporation
and Bylaws of the Surviving Corporation, or as otherwise provided
by law.
ARTICLE III
EXCHANGE OF SHARESARTICLE III EXCHANGE OF SHARES
3.1 Disposition of Buyer Sub Shares; IMPRA Treasury
Shares3.1 Disposition of Buyer Sub Shares, IMPRA Treasury Shares .
At the Effective Time, by virtue of the Merger and without
any action on the part of the holder thereof:
(a) The shares of Buyer Sub common stock which
shall be outstanding immediately prior to the Effective Time of the
Merger shall be converted into a number of shares of common stock
of the Surviving Corporation equal to the number of shares of
common stock of Buyer Sub then outstanding.
(b) Each share of common stock of IMPRA ("IMPRA
Share") held in the treasury of IMPRA or by any subsidiary of IMPRA
and each such IMPRA Share held by Buyer or any subsidiary of Buyer
immediately prior to the Effective Time shall be canceled and
retired and cease to exist, and no consideration shall be given in
exchange therefor.
<PAGE>
3.2 Exchange of IMPRA Shares3.2 Exchange of IMPRA Shares .
(a) Each IMPRA Share outstanding immediately prior
to the Effective Time (other than IMPRA Shares canceled as set
forth in Section 3.1(b) above) shall at the Effective Time, by
virtue of the Merger and without any action on the part of the
holder thereof, be converted into the right to receive in cash an
amount equal to One Hundred Forty Three Million One Hundred Seventy
Eight Thousand Five Hundred Thirty Nine Dollars ($143,178,539) divided
by the number of shares of Common Stock outstanding on the date hereof
entitled thereto (subject to adjustment as provided in Sections 3.4 and 3.5
and subject to reduction as provided in Article X and the Escrow
Agreement), ninety percent (90%) of which amount prior to
adjustment and reduction, if any (the "Preliminary Purchase Price
Payment"), shall be payable to the holder thereof upon the
surrender of the certificate formerly representing such IMPRA Share
in accordance with this Section 3.2 and ten percent (10%) of which
amount prior to adjustment and reduction, if any (the
"Indemnification Escrow Payment"), shall be held by the escrow
agent (the "Escrow Agent") as provided for in Section 10.1(c)
hereof.
(b) Immediately following the Effective Time, each
record holder (a "Shareholder") of any certificate or certificates
which immediately prior to the Effective Time represented
outstanding IMPRA Shares (the "Certificates") whose IMPRA Shares
were converted into the right to receive a portion of the Purchase
Price (as defined in Section 3.4) shall be entitled to surrender
his or her Certificates to Buyer for cancellation in exchange for
the Shareholder's pro rata share of the Preliminary Purchase Price
Payment, and Buyer hereby agrees to cause such Shareholder's pro
rata share of the Preliminary Purchase Price Payment to be paid to
such person at such time. If any Shareholder shall fail to
surrender his or her Certificates promptly following the Effective
Time, Buyer shall send to such Shareholder notice of the Merger and
instructions for use in effecting the surrender of the Certificates
in exchange for the Shareholder's pro rata share of the Purchase
Price and the holder of such Certificates shall be entitled to
receive in exchange therefor solely the Shareholder's pro rata
share of the Purchase Price less any applicable stock transfer
taxes, and such Certificates shall forthwith be canceled. No
interest shall be paid or accrued for the benefit of holders of the
Certificates on the consideration payable upon the surrender of the
Certificates. It shall be a condition of payment that the
Certificate so surrendered shall be properly endorsed or otherwise
in proper form for transfer.
<PAGE>
(c) From and after the Effective Time, there shall
be no transfers on the stock transfer books of the Surviving
Corporation of the IMPRA Shares which were outstanding immediately
prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for
payment, they shall be canceled and exchanged for a pro rata share
of the Preliminary Purchase Price Payment in accordance with the
procedures set forth in this Section and Section 3.4.
(d) At or prior to the Effective Time of the
Merger, Buyer shall deliver irrevocably to the Escrow Agent
immediately available funds in an aggregate amount equal to the
Indemnification Escrow Payment. As provided in Article X hereof,
the Indemnification Escrow Payment shall be held in escrow (the
"Indemnification Escrow") and invested by the Escrow Agent. Income
and earnings therefrom shall become funds of the Indemnification
Escrow to be disbursed as provided in Article X of this Agreement
and in the Escrow Agreement.
3.3 No Further Rights in IMPRA Shares3.3 No Further Rights
in IMPRA Shares . All cash, or cash equivalents, received by any
Shareholders pursuant to this Agreement shall be deemed to have been
delivered and received in full satisfaction of all rights pertaining to
such Shareholders' IMPRA Shares. At the Effective Time of the Merger, the
holders of certificates representing outstanding IMPRA Shares shall cease to
have any rights with respect to shares (other than such rights as
they may have as dissenting shareholders under the ABCA), and their
sole right shall be to receive their pro rata share of the Purchase
Price. Dissenting shareholders shall have the rights accorded by
the ABCA.
3.4 The Purchase Price3.4 The Purchase Price . The aggregate
merger consideration for all outstanding IMPRA Shares shall be a cash
amount equal to One Hundred Forty Three Million One Hundred Seventy
Eight Thousand Five Hundred Thirty Nine Dollars ($143,178,539) (the
"Closing Price") plus an amount (the "Adjustment Amount"), which a
positive or a negative number, as determined below, subject to
reduction as provided in Section 3.4(e), Article X and the Escrow
Agreement ("Purchase Price").
(a) Within sixty (60) days after the Effective
Time, the Representative (as defined below) shall cause to be
delivered to Buyer a consolidated balance sheet of IMPRA as at the
close of business at the Effective Time (the "Effective Time
Balance Sheet") together with the related consolidated statements
of income, shareholder's equity and cash flows for the period from
June 30, 1996 to the Effective Time (the "Related Effective Time
Statements") audited by IMPRA's current independent accountants,
which audit shall include a physical inventory that representatives
of Buyer may observe. The Effective Time Balance Sheet and the
<PAGE>
Related Effective Time Statements shall be prepared in accordance
with generally accepted accounting principles applied on a basis
consistent with past practice, and the Effective Time Balance Sheet
shall fairly present the assets and liabilities and financial
condition of IMPRA at the Effective Time. The reasonable cost of
the audit pursuant to this Section 3.4(a) shall be borne by the
Surviving Corporation. After the Effective Time, Buyer agrees to
give the Representative and IMPRA's current accountants reasonable
access to IMPRA's books and records and to make available to such
parties such employees of IMPRA and the Surviving Corporation as
may be reasonably necessary in connection with the preparation of
the Effective Time Balance Sheet.
(b) The Effective Time Balance Sheet shall become
final and binding on IMPRA and Buyer thirty (30) days after its
delivery to Buyer, unless Buyer gives the Representative written
notice of Buyer's disagreement with respect to any item included in
such Effective Time Balance Sheet. During said thirty (30) day
period, Buyer and Buyer's representatives shall be given reasonable
access to all of the working papers of IMPRA's current independent
accountants for the purpose of its review of the Effective Time
Balance Sheet. Buyer shall notify Representative in writing by the
end of such thirty (30) day period of any objection it may have to
the Effective Time Balance Sheet, which objection shall identify
the basis of such objection and any adjustments to the Effective
Time Balance Sheet that Buyer proposes to make (the "Proposed
Adjustments").
(c) If Buyer provides written notice to the
Representative objecting to the Effective Time Balance Sheet within
the period specified in subparagraph (b) above, Representative
shall notify Buyer of his approval or disapproval of the Proposed
Adjustments to the Effective Time Balance Sheet contained in such
written objection within thirty (30) days of his receipt of such
written objection. If Representative shall fail to notify Buyer in
writing of his disapproval of the Proposed Adjustments within said
thirty (30) day period, or Representative notifies Buyer of his
approval of such Proposed Adjustments within said thirty (30) day
period, such adjustments shall be made to the Effective Time
Balance Sheet, and the Effective Time Balance Sheet, as so
adjusted, shall be final and binding upon all parties. If,
however, Representative shall notify Buyer in writing of his
disapproval of any or all of the Proposed Adjustments within said
thirty (30) day period and Representative and Buyer cannot reach
agreement with respect to the Proposed Adjustments and the
objections thereto raised by Representative within thirty (30) days
of the date of receipt by Buyer of Representative's objections (or
such longer period as may be acceptable to Buyer and
Representative), Buyer and Representative shall submit the Proposed
Adjustments in dispute to the Arbitrating Accountants (as defined below) for
resolution. The Arbitrating Accountants shall have no
authority (x) to decide any issues related to the Effective Time
Balance Sheet other than those issues expressly referred to them
for arbitration pursuant to the terms hereof, or (y) to determine
that any disputed Proposed Adjustment shall be made in excess
(negative or positive) of the amount originally proposed by Buyer.
(d) If the parties shall have submitted a dispute
to the Arbitrating Accountants, the parties shall instruct the
Arbitrating Accountants to resolve the disputed Proposed
Adjustments within thirty (30) business days after such adjustments
are submitted to them, and such resolution shall be final and
binding upon all parties hereto. Upon such resolution, the
adjustments to the Effective Time Balance Sheet determined by the
Arbitrating Accountants shall be made and the Effective Time
Balance Sheet, as so adjusted, shall be final and binding upon all
parties.
(e) The fees and expenses of the Arbitrating
Accountants shall be paid by Buyer; provided that the portion of
such fees and expenses equal to the lesser of (i) 100% or (ii) the
percentage obtained by dividing (A) the aggregate dollar amount of
the adjustments to the Effective Time Balance Sheet determined
under Section 3.4(d), by (B) the aggregate dollar amount of the
disputed Proposed Adjustments shall be reimbursed to Buyer from the
Indemnification Escrow.
(f) The "Arbitrating Accountants" shall be Price
Waterhouse LLP (provided that Price Waterhouse LLP shall not
represent IMPRA or Buyer and shall not have represented such
persons within the three (3) prior years), or if Price Waterhouse
LLP shall not be available, a "Big Six" accounting firm that is
mutually agreed to by Buyer and Representative.
(g) Upon the Effective Time Balance Sheet
(including any adjustments) becoming final and binding on all
parties as set forth above, the Adjustment Amount shall be
determined by the Buyer. Buyer's determination shall be final and
binding. The Adjustment Amount shall equal the difference between
the Net Worth (as defined below) as shown on the Effective Time
Balance Sheet and (y) the Net Worth as shown on IMPRA's Balance
Sheet at June 30, 1996. "Net Worth" shall equal the amount by
which assets exceed liabilities. Buyer shall provide notice to the
Representative and all Shareholders of the Adjustment Amount and
final Purchase Price within two (2) business days of such amounts
becoming final.
<PAGE>
3.5 Adjustment of Purchase Price3.5 Adjustment of Purchase Price.
(a) If the Adjustment Amount is a positive number, ninety percent (90%) of
such amount shall be paid by Buyer to Shareholders pro rata in cash and ten
percent (10%) to Escrow Agent (the "Escrow Adjustment") by wire
transfer to the financial institution identified by Escrow Agent of
immediately available funds on behalf of the Shareholders within
ten (10) business days of determination, and (b) if the Adjustment
Amount is a negative number, it shall be paid to Buyer in cash from
the Indemnification Escrow within ten (10) business days of receipt
of notice of determination. Interest shall accrue and be due on
any amounts payable under this Section 3.5 from the Effective Time
through the date such amounts are paid hereunder at the Prime Rate,
which shall mean the base interest rate on corporate loans at large
United States money center commercial banks as published in the
Wall Street Journal under the caption "Prime Rate."
3.6 Closing3.6 Closing . The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at
the offices of Squire, Sanders & Dempsey, Two Renaissance Square,
40 North Central Avenue, Suite 2700, Phoenix, Arizona 85004 at
9:00 a.m., local time, on the first business day (the "Closing
Date") after the later of (x) August 30, 1996, or (y) the day on
which all of the conditions set forth in Article VIII hereof are
satisfied or waived, or at such other date, time and place as the
Companies shall otherwise agree.
(a) At the Closing, IMPRA shall deliver to Buyer
the following:
(i) Resolutions. Copies of resolutions of
IMPRA certified by a Secretary, Assistant Secretary, or other
appropriate officer of IMPRA, authorizing the execution, delivery
and performance of this Agreement and the transactions contemplated
hereby and copies of resolutions of the meeting of Shareholders of
IMPRA (or written consent in lieu thereof), certified by a
Secretary, Assistant Secretary or other appropriate officer of
IMPRA, authorizing the execution, delivery and performance of this
Agreement and the transactions contemplated hereby.
(ii) Share Certificates. Certificates, other
than those held by any dissenting shareholder, duly endorsed in
blank or accompanied by appropriate stock powers.
(iii) Resignations. Resignations of
certain officers and all directors of IMPRA effective as of the
Effective Time, which Buyer shall request in writing prior to the
Closing.
(iv) Opinion of Counsel. Opinion of Polese,
Pietzsch, Williams & Nolan, P.A. as to the matters set forth in
Exhibit "B."
(v) Consulting Agreements. The Consulting
Agreements called for by Section 7.11.
(vi) Noncompete Agreements. The Noncompete
Agreements called for by Section 7.9.
(vii) Tax Clearances. Tax clearances from
the Department of Economic Security and the Arizona Department of
Revenue.
(viii) Conditions Precedent. Evidence
reasonably satisfactory to Buyer that all conditions to Buyer's
obligations hereunder have been satisfied in all material respects.
(b) At the Closing, Buyer shall deliver to
Shareholders the Preliminary Purchase Price Payment in cash in
accordance with Section 3.2 hereof, less any outstanding amounts
owed to IMPRA by such Shareholders, and in the case of Harold and
Elizabeth Green, amounts owed to IMPRA by IPE (as defined below) as
of the Closing.
(c) At the Closing, Buyer shall deliver to Escrow
Agent the Indemnification Escrow Payment, by wire transfer to the
financial institution identified by Escrow Agent of immediately
available funds in accordance with Section 3.2 hereof.
(d) At the Closing, Buyer shall deliver to IMPRA the
following:
(i) Resolutions. Copies of resolutions of
Buyer and Buyer Sub certified by a Secretary, Assistant Secretary,
or other appropriate officer of Buyer, authorizing the execution,
delivery and performance of this Agreement and the transactions
contemplated hereby.
(ii) Opinion of Counsel. Opinion of Buyer's
in-house general counsel as to the matters set forth in
Exhibit "B."
(iii) Consulting Agreements. The
Consulting Agreements called for by Section 7.11.
(iv) Real Estate Documents. The Real Estate
Documents called for by Section 7.7 executed by all parties
thereto.
(v) Noncompete Agreements. The Noncompete
Agreements called for by Section 7.9.
(vi) Conditions Precedent. Evidence reasonably
satisfactory to IMPRA that all conditions to IMPRA's obligations
hereunder have been satisfied in all material respects.
(e) At the Closing, Buyer shall (i) deliver to Alex.
Brown & Sons Incorporated the fee payable under that certain Letter
Agreement dated November 14, 1994 between IMPRA and Alex. Brown &
Sons Incorporated and (ii) make provision for full payment of all
transactional fees and expenses of IMPRA incurred in relation to
the transactions contemplated hereby, including but not limited to
legal fees and expenses payable to Polese, Pietzsch, Williams &
Nolan and Morrison & Foerster LLP.
3.7 Supplementary Action3.7 Supplementary Action . If at any time
after the Effective Time, any further assignments or assurances in law or
any other things are necessary or desirable to vest or to perfect
or confirm of record in the Surviving Corporation the title to any property
or rights of either Constituent Corporation, or otherwise to carry out
the provisions of this Agreement, the officers and directors of the
Surviving Corporation are hereby authorized and empowered on behalf of the
Constituent Corporations, in the name of and on behalf of either Constituent
Corporation as appropriate, to execute and deliver any and all things
necessary or proper to vest or to perfect or confirm title to such property
or rights in the Surviving Corporation and otherwise to carry out the
purposes and provisions of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYERARTICLE IV REPRESENTATIONS AND
WARRANTIES OF BUYER
As used in this Agreement, (i) the term "Material Adverse Effect"
with respect to any party hereto means any change or changes in, or effect
or effects on such party or any of its subsidiaries, that, individually or
in the aggregate, (x) is materially adverse to the business, assets,
market value, results of operations, or financial condition of such party
and its subsidiaries, taken as a whole, or (y) is probable to materially
and adversely affect the ability of such party to (A)
operate or conduct its business substantially in the manner in which it
is currently operated or conducted or (B) substantially perform its
obligations hereunder and consummate the transactions
contemplated hereby, (ii) the word "subsidiary" when used with respect to
any party means any corporation or other organization, whether incorporated
or unincorporated, of which such party or any other subsidiary of such
party is a general partner (excluding partnerships the general
partnership interests of which held by such party or any subsidiary of
such party do not have a majority of the voting interests in such
partnership) or of which at least a majority of the securities
or other interests having by their terms ordinary voting power to
elect a majority of the Board of Directors or others performing similar
functions with respect to such corporations or other organizations is
directly or indirectly owned or controlled by such party and/or by any
one or more of the subsidiaries, excluding in the case of IMPRA, Original
Equipment Manufacturers of Arizona, Inc. (dba International Polymer
Engineering) ("IPE"), and (iii) the term "Knowledge" with respect to IMPRA
shall mean the actual knowledge of any of the persons set forth on
Schedule 4 and with respect to Buyer shall mean the actual knowledge of
any of Buyer's executive officers.
Buyer and Buyer Sub represent and warrant to IMPRA, except as set
forth in the Disclosure Letter delivered to IMPRA at or prior to the date
hereof (the "Buyer Disclosure Letter"), as follows:
4.1 Organization4.1 Organization . Each of Buyer and Buyer Sub
is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has the corporate
power to carry on its business as it is now being conducted or presently
proposed to be conducted and to own all of its properties and assets.
Buyer is duly qualified as a foreign corporation to do business, and is
in good standing (to the extent the concept of good standing
exists), in each jurisdiction where the character of its properties owned
or held under lease or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified will
not have a Material Adverse Effect.
4.2 Authority Relative to this Agreement4.2 Authority Relative to
this Agreement . Each of Buyer and Buyer Sub has the corporate power to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement by Buyer and Buyer Sub and the
consummation by each of Buyer and Buyer Sub of the transactions contemplated
hereby have been duly authorized by the respective Boards of Directors of
Buyer and Buyer Sub, and this Agreement and each of the transactions
contemplated hereby has been approved by Buyer as the sole stockholder of
Buyer Sub. No other corporate proceedings on the part of either Buyer or
Buyer Sub are necessary to approve this Agreement or the transactions
contemplated hereby, and this Agreement constitutes the valid and binding
obligation of Buyer and Buyer Sub, enforceable against each in accordance
with its terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors, and the rules of law
governing specific performance, injunctive relief and other
equitable remedies.
4.3 Consents and Approvals; No Violations4.3 Consents and
Approvals; No Violations . Except for applicable requirements of
state or foreign laws relating to takeovers, state securities or blue sky
laws, filings under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and filing and recordation of Articles of Merger and a
Plan of Merger under the ABCA, no filing with, and no permit, authorization,
consent or approval of, any public body or authority is necessary for the
consummation by Buyer or Buyer Sub of the transactions contemplated by this
Agreement. Neither the execution and delivery of this Agreement by Buyer or
Buyer Sub, nor the consummation by Buyer or Buyer Sub of the transactions
contemplated hereby, nor compliance by Buyer or Buyer Sub with any of the
provisions hereof, will (a) result in any breach of the Articles of
Incorporation or Bylaws of Buyer or Buyer Sub, (b) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, cancellation
or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, contract, agreement or
other instrument or obligation to which Buyer or any of its subsidiaries
is a party or by which any of them or any of their properties or assets
may be bound or (c) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to Buyer, any of its subsidiaries or any of
their properties or assets, except in the case of clauses (b) and (c) for
violations, breaches or defaults that would not have a Material Adverse
Effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF IMPRAARTICLE V REPRESENTATIONS AND
WARRANTIES OF IMPRA
IMPRA represents and warrants to Buyer and Buyer Sub, except as set
forth in the Disclosure Letter delivered to Buyer at or prior to the date
hereof (the "IMPRA Disclosure Letter"), as follows:
5.1 Organization; Permits5.1 Organization Permits . IMPRA is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has the corporate power to
carry on its business as it is now being conducted and to own all of its
properties and assets. True and complete copies of the Articles of
Incorporation and Bylaws of IMPRA with all amendments and restatements
thereto through the date hereof have been provided to Buyer prior to the
date hereof. IMPRA is duly qualified as a foreign corporation to
do business, and is in good standing (to the extent the concept of good
standing exists), in each jurisdiction where the character of its
properties owned or held under lease or the nature of its activities makes
such qualification necessary, except where the failure to be so qualified
will not have a Material Adverse Effect. To IMPRA's Knowledge, it has all
business licenses, permits and approvals necessary to conduct its business
as presently conducted, except where the failure to have such permit or
approval does not have a Material Adverse Effect.
5.2 Capitalization; Shareholders5.2 Capitalization; Shareholders .
As of the date hereof, the authorized capital stock of IMPRA is as set forth
in the Disclosure Letter. As of the date hereof, the number and class of
IMPRA Shares which are issued and outstanding are as set forth in the
Disclosure Letter. As of the date hereof, all persons having record
ownership of shares of the capital stock of IMPRA or having any right to
purchase, acquire or obtain any of the capital stock of IMPRA are set forth
on the Disclosure Letter. All of the issued and outstanding IMPRA Shares are
validly issued, fully paid and nonassessable and not subject to any lien,
charge or encumbrance. Neither IMPRA nor any of its subsidiaries is, and
prior to the Effective Time will not become, a party to or subject to any
contract or obligation wherein any person has a right or option to purchase or
acquire any rights in any additional capital stock or other equity securities
of IMPRA or any of its subsidiaries.
5.3 Authority Relative to this Agreement5.3 Authority Relative to
this Agreement . IMPRA has the corporate power to enter into this Agreement
and to carry out its obligations hereunder. The execution and delivery of
this Agreement by IMPRA and the consummation by IMPRA of the transactions
contemplated hereby have been duly authorized by the Board of Directors and
Shareholders of IMPRA, and no other corporate proceedings on the part of
such Company are necessary to approve this Agreement or the transactions
contemplated hereby. This Agreement constitutes the legal, valid and binding
obligation of IMPRA, enforceable against it in accordance with the Agreement's
terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and the rules of law governing specific
performance, injunctive relief and other equitable remedies.
5.4 Consents and Approvals; No Violations5.4 Consents and
Approvals; No Violations . Except for applicable requirements of
state or foreign laws relating to takeovers, state securities or blue sky
laws, filings under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended and filing and recordation of Articles of Merger and Plan
of Merger under the ABCA, no filing with, and no permit, authorization,
consent or approval of, any public body or authority is necessary for the
consummation by IMPRA of the transactions contemplated by this Agreement.
Neither the execution and delivery of this Agreement by IMPRA, nor the
consummation by IMPRA of the transactions contemplated hereby, nor
compliance by IMPRA with any of the provisions hereof, will (a) result in
any breach of the Articles of Incorporation or Bylaws of IMPRA, (b) result
in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, contract,
agreement or other instrument or obligation to which IMPRA or any of its
subsidiaries is a party or by which any of them or any of their properties
or assets may be bound or (c) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to IMPRA or any of its properties or
assets, except in the case of clauses (b) and (c) for violations, breaches
or defaults that would not have a Material Adverse Effect.
5.5 Financial Statements5.5 Financial Statements . IMPRA has
furnished to Buyer IMPRA's consolidated financial statements (consolidated
balance sheets, consolidated statements of income, consolidated
statements of shareholders' equity and consolidated statements of cash
flows) at and for each of the 12-month periods ended June 30, 1992,
June 30, 1993, June 30, 1994 and June 30, 1995 and its unaudited
consolidated financial statements at and for the nine-month period ended
March 31, 1996 (collectively, the "IMPRA Financial Statements"). The IMPRA
Financial Statements at and for the periods ended June 30, 1994 and
June 30, 1995 have been audited by IMPRA's independent accountants and the
IMPRA Financial Statements at and for the periods ended June 30, 1992 and
June 30, 1993 have been reviewed by IMPRA's independent accountants. Each
of the balance sheets (including the related notes) included in the IMPRA
Financial Statements fairly presents in all material respects the financial
position of IMPRA as of the respective dates thereof, and the other related
statements (including the related notes) included therein fairly present in
all material respects the results of operations and cash flows of IMPRA for
the respective periods or as of the respective dates set forth therein, all
in conformity with generally accepted accounting principles consistently
applied during the periods involved, except as otherwise noted therein and
subject, in the case of the interim financial statements, to normal year-end
adjustments and any other adjustments described therein and the absence of
any notes thereto.
5.6 Absence of Certain Changes or Events5.6 Absence of Certain
Changes or Events . Other than as permitted under Section 6.1, since
March 31, 1996 IMPRA has not suffered a Material Adverse Effect and
IMPRA has not (i) declared any dividend or made any payment or other
distribution in respect of any shares of its capital stock, (ii) acquired
or disposed of any shares of its capital stock or granted any options,
warrants or other rights to acquire or convert any obligation into any shares
of its capital stock, (iii) entered into any material transaction with any
officer, director, employee or any known relative thereof or any entity in
which such person has an interest, except the payment of rent, salaries,
wages and expense reimbursement in the ordinary course of business,
(iv) incurred any material obligation or liability (contingent or
otherwise), except for (A) this Agreement, (B) normal trade and other
obligations incurred in the ordinary course of business consistent with
past practice and (C) obligations under contracts, agreements and leases, the
performance of which has not and will not, individually or in the aggregate,
have a Material Adverse Effect on IMPRA, (v) discharged or satisfied any
material lien or other encumbrance or paid any material obligation or
liability (fixed or contingent), except in the ordinary course of
business or as contemplated by this Agreement, (vi) mortgaged, pledged or
subjected to any lien or other encumbrance any of its material assets
(whether tangible or intangible), (vii) sold, assigned, transferred,
conveyed, leased or otherwise dispose of or agreed to sell, lease or
otherwise dispose of any of its material assets except for sales of
inventory or other assets for fair consideration in the ordinary course of
business or as contemplated by this Agreement, (viii) canceled or
compromised any material debt or claim, except in the ordinary course of
business, (ix) waived or released any material rights, except for waivers or
releases made in the ordinary course of business consistent with past
practice, (x) made any single capital expenditure in excess of Fifty
Thousand Dollars ($50,000), or entered into any commitment therefor,
(xi) suffered any material casualty loss or damage, whether or not covered
by insurance, or any adverse ruling, judgment or award, whether or not
amounts were reserved on IMPRA's books, which would have a Material Adverse
Effect on IMPRA, or (xii) lost any employees, distributors, dealers,
manufacturers representatives, customers or suppliers, the loss of which,
individually or in the aggregate, has had a Material Adverse Effect on IMPRA.
5.7 Litigation5.7 Litigation . As of the date of this Agreement,
(a) there is no action, suit, judicial or administrative proceeding,
arbitration or investigation pending or, to IMPRA's Knowledge, threatened
against or involving IMPRA, or any of its properties or rights, before any
court, arbitrator, or administrative or governmental body; (b) there is no
judgment, decree, injunction, rule or order of any court, governmental
department, commission, agency, instrumentality or arbitrator outstanding
against IMPRA; and (c) IMPRA is not in violation of any term of any
judgments, decrees, injunctions or orders outstanding against it. An
action, suit, proceeding, arbitration or investigation shall be considered
"threatened" for purposes of this Article V if IMPRA has received written
notice that such event may be commenced.
5.8 Contracts5.8 Contracts .
(a) IMPRA has provided Buyer with copies of all contracts,
instruments, mortgages, notes, security agreements, leases, agreements or
understandings to which IMPRA is a party and which are material to the
business of IMPRA. Each of the contracts, instruments, mortgages, notes,
security agreements, leases, agreements or understandings to which IMPRA is
a party that relates to or affects the assets or operations of IMPRA or to
which IMPRA or its assets or operations may be bound or subject is a valid
and binding obligation of IMPRA and in full force and effect, except for
where the failure to be in full force and effect would not individually or
in the aggregate have a Material Adverse Effect. Except to the extent that
the consummation of the transactions contemplated by this Agreement may
require the consent of third parties, as disclosed in writing to Buyer
pursuant to the Disclosure Letter, there are no existing defaults by IMPRA
or any of its subsidiaries thereunder or, to the Knowledge of IMPRA,
by any other party thereto, which defaults, individually or in the
aggregate, would have a Material Adverse Effect; and no event of default
has occurred, and no event, condition or occurrence exists, that (whether
with or without notice, lapse of time or the happening or occurrence of any
other event) would constitute a default by IMPRA or its subsidiaries
thereunder which default would, individually or in the aggregate, have a
Material Adverse Effect.
(b) As of the date of this Agreement, IMPRA is not a party to
any oral or written (i) consulting agreement not terminable on sixty (60)
days or less notice involving the payment of more than One Hundred Thousand
Dollars ($100,000) per annum, in the case of any such agreement with an
individual, (ii) joint venture agreement, (iii) noncompetition or similar
agreement that restricts IMPRA from engaging in a line of business, (iv)
agreement with any executive officer or other employee of IMPRA the benefits
of which are contingent, or the terms of which are materially altered, upon
the occurrence of a transaction involving IMPRA of the nature contemplated
by this Agreement and which provides for the payment of in excess of One
Hundred Thousand Dollars ($100,000), (v) agreement with respect to any
executive officer of IMPRA or any subsidiary providing any term of
employment beyond one year or compensation guaranty in excess of One Hundred
Thousand Dollars ($100,000) Thousand Dollars per annum, or (vi) agreement or
plan, including any stock option plan, stock appreciation rights plan,
restricted stock plan or stock purchase plan, any of the benefits of which
will be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by
this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement.
5.9 Employee Benefit Plans5.9 Employee Benefit Plans
(a) The Disclosure Letter lists each "employee benefit plan"
(within the meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") that is maintained or otherwise
contributed to by IMPRA for the benefit of its employees (including, without
limitation, pension, profit sharing, stock bonus, medical reimbursement,
life insurance, disability and severance pay plans) (collectively, "Company
Plans") and all material employee benefit plans providing for deferred
compensation, bonuses, stock options, employee insurance coverage or any
similar compensation or welfare benefit plan (collectively, "Benefit
Arrangements" and, together with Company Plans, collectively referred to
as "Employee Benefit Programs").
(b) With respect to each Company Plan, IMPRA has made
available to Buyer a current, accurate and complete copy (or, to the extent
no such copy exists, an accurate description) thereof (including all
existing amendments thereto that shall become effective at a later date)
and, to the extent applicable, (i) any related trust agreement, annuity
contract or other funding instrument; and (ii) any summary plan description.
(c) (i) Each Employee Benefit Program has been established and
administered in substantial compliance with any applicable provisions of
ERISA, the Internal Revenue Code of 1986, as amended (the "Code"), and the
terms of all documents relating to such programs; (ii) each Company Plan
that is intended to be qualified within the meaning of section 401(a) of the
Code has received a favorable determination letter as to its qualification;
(iii) as of the date of this Agreement no "reportable event" (as such term
is used in section 4043 of ERISA) other than an event of a type as to which
the Pension Benefit Guaranty Corporation has waived the reporting
requirements, "prohibited transaction" (as such term is used in section 4975
of the Code or section 406 of ERISA) or "accumulated funding deficiency"
(as such term is used in section 412 or 4971 of the Code) has heretofore
occurred with respect to any Company Plan that has reasonable probability of
resulting in a termination that would have a Material Adverse Effect; and
(iv) there are no pending or, to IMPRA's Knowledge, threatened, actions,
claims or lawsuits which have been asserted or instituted against the
Employee Benefit Programs, the assets of any of the trusts under such plans
or the plan sponsor or the plan administrator, or against any fiduciary of
the Employee Benefit Programs with respect to the operation of such plans
(other than routine benefit claims).
(d) IMPRA does not maintain or contribute to any "multiemployer
plan" (as such term is defined in section 3(37) of ERISA) and has not
incurred any material liability that remains unsatisfied with respect to
any such plans.
5.10 Medical Device Regulatory Authority Matters5.10 Medical Device
Regulatory Authority Matters . Since June 30, 1992:
(a) IMPRA is, and the products sold by IMPRA are, in compliance
in all material respects with all current applicable statutes, rules,
regulations, standards, guides or orders administered or issued by the
Federal Food and Drug Regulatory Agencies or any other federal, state or
local agency or governmental body having regulatory authority over such
products (the "Regulatory Agencies").
(b) IMPRA has not received from the Regulatory Agencies, and has no
Knowledge of any facts that would furnish any reasonable basis for, any
notice of adverse findings, regulatory letters, warning letters, Section 305
notices or other similar communications from the Regulatory Agencies, and
there have been no seizures conducted or threatened by the Regulatory
Agencies, and no recalls, field notifications or alerts conducted, requested
or threatened by the Regulatory Agencies relating to the products sold by
IMPRA or any of its subsidiaries.
(c) Each premarket approval ("PMA") and premarket notification
("510(k)") document and related documents and information for each of the
products IMPRA manufactures, sells or distributes is in compliance in all
material respects with the applicable federal statutes, rules, regulations,
standards, guides or orders administered or promulgated by the Regulatory
Agencies and all preclinical and clinical studies have been conducted with
recognized good clinical and good laboratory practices in all material
respects. The Disclosure Letter sets forth a complete and accurate list of
all products of IMPRA indicating (i) which products are marketed under an
approved Regulatory Agencies authority (e.g., PMA, 510(k) or IDE) and
identifying such authority, and (ii) which products are not marketed under
an approved Regulatory Agencies authority, and indicating why such products
are being marketed without such authority. Such listing also contains a
complete and accurate list of all PMA applications, PMA supplements, 510(k)
submissions and IDE submissions of IMPRA or any of its subsidiaries
currently pending with the Regulatory Agencies.
(d) Neither IMPRA nor any of its subsidiaries is aware of any
facts which are reasonably likely to cause (i) the denial, withdrawal,
recall or suspension of any products sold or intended to be sold by IMPRA or
any of its subsidiaries, or (ii) a change in the marketing classification or
labeling of any such products, or (iii) a termination or suspension of
marketing of any such products.
(e) None of the products manufactured, marketed or sold by IMPRA or
any of its subsidiaries has been recalled or subject to a field notification
(whether voluntarily or otherwise), and neither IMPRA nor any of its
subsidiaries has received notice (whether completed or pending) of any
proceeding seeking recall, suspension or seizure of any products sold or
proposed to be sold by IMPRA or any of its subsidiaries.
5.11 Intellectual Property5.11 Intellectual Property .
(a) The Disclosure Letter contains an accurate and complete list
of (i) all patents, applications for patents, registrations of trademarks
(including service marks) and applications therefor, registrations of
copyrights and applications therefor and registrations of mask works and
applications therefor that are owned by IMPRA or any of its subsidiaries and
that are part of the business of IMPRA as presently conducted; (ii) all other
intellectual property rights that are owned by IMPRA or any of its
subsidiaries and that are material to the conduct of business as presently
conducted; (iii) all unexpired licenses relating to such of IMPRA intellectual
property rights that have been granted to or by IMPRA or any of its subsidiaries
and that are material to the conduct of the business of IMPRA as presently
conducted, but excluding end-user licenses granted to IMPRA or any of its
subsidiaries relating to standard "off the shelf" personal computer software
that is generally available on commercially reasonable terms from vendors that
are unaffiliated with IMPRA or it subsidiaries, including software made
available from such vendors on a "shrink wrap license" basis ("Non-Scheduled
Licenses"); and (iv) all other agreements relating to intellectual property
rights that are material to the conduct of the business of IMPRA as
presently conducted, but excluding the Non-Scheduled Licenses (collectively,
(i)-(iv) are referred to herein as "IMPRA Intellectual Property Rights").
(b) To IMPRA's Knowledge, (i) IMPRA and its subsidiaries
collectively own and have the right to use, and license others to use, all
IMPRA Intellectual Property Rights that are material to the conduct of the
business of IMPRA as presently conducted and (ii) such ownership and right
to use, and license of others to use, are free and clear of, and without
liability under, all liens and security interests of third parties. To
IMPRA's Knowledge, such ownership and right to use, and license other to
use, are free and clear of, and without liability under, all claims and
rights of third parties that, if determined to be legally protectable, could
have a Material Adverse Effect.
(c) IMPRA has taken reasonable steps sufficient to safeguard
and maintain the secrecy and confidentiality of, and its proprietary rights
in, the unpatented know-how, technology, proprietary processes, formulae,
and other information that is material to the conduct of the business of
IMPRA as presently conducted. Without limitation on the generality of the
foregoing, to IMPRA's Knowledge, IMPRA and its subsidiaries have obtained
confidentiality and inventions assignment agreements, in one or more forms
that have protections and conditions substantially similar in effect to
those included in the forms provided to Buyer prior to the date
hereof, from substantially all of IMPRA's past and present employees and
independent contractors involved in the creation or development of IMPRA
Intellectual Property Rights, including, without limitation from all
employees and contractors who are inventors, authors, creators or
developers of IMPRA Intellectual Property Rights that are material to the
conduct of the business as presently conducted.
(d) Except for payments made with respect to patents and patent
applications, there are no royalties, honoraria, fees or other payments
payable by IMPRA or its subsidiaries to any person by reason of the
ownership, use, license, sale or disposition of any IMPRA Intellectual
Property Right.
(e) IMPRA has not received notice that IMPRA or its
subsidiaries are infringing in the conduct of the business the right or
claimed right of any other party with respect to any IMPRA Intellectual
Property Rights, nor does IMPRA have any Knowledge of any alleged
or claimed infringement by any product or process manufactured, used, sold
or under development by or for IMPRA or its subsidiaries in the conduct of
the business of IMPRA as presently conducted.
(f) For purposes of this Section 5.11, "use" with respect to
intellectual property rights, includes make, reproduce, display or perform
(publicly or otherwise), prepare derivative works based on, sell, distribute,
disclose and otherwise exploit such intellectual property rights and
products incorporating or subject to such intellectual property rights. No
reference in this Section 5.11 to IMPRA's right to use the IMPRA
Intellectual Property Rights shall be construed as a representation of
warranty as to the validity of an issued patent included in the IMPRA
Intellectual Property Rights.
(g) Except as expressly set forth in this Agreement, IMPRA
makes, and Buyer receives no representation or warranty whether express,
implied, statutory or otherwise, relating to the IMPRA Intellectual Property
Rights, including, without limitation, warranties of merchantability or
fitness for a particular purpose. Except for the representations and
warranties as to IMPRA's Knowledge of infringement, IMPRA makes, and Buyer
receives, no representation or warranty, whether express, implied, statutory
or otherwise, relating to non-infringement of third party intellectual
property rights.
5.12 Owned Property; IMPRA Facilities5.12 Owned Property; IMPRA
Facilities . IMPRA owns no real property.
(a) The Disclosure Letter sets forth, by address, owner and
usage, a true and complete list of all material real property agreements
(including any amendments thereto) (the "Real Property Leases") pursuant to
which IMPRA leases, subleases or otherwise occupies any plants, offices,
manufacturing facilities, warehouses, improvements, administration buildings and
all other real property (the "IMPRA Facilities"). To IMPRA's Knowledge,
there are no defaults or events which with the passage of time would
constitute a default under the Real Property Leases, except in either
instance for defaults which individually or in the aggregate would not
have a Material Adverse Effect on IMPRA.
(b) IMPRA owns, leases or has the right to use, all material
fixtures, furniture, improvements, machinery or equipment necessary to
conduct its business as currently conducted.
5.13 Compliance With Legislation Regulating Environmental Quality5.13
Compliance With Legislation Regulating Environmental Quality .
(a) For the purposes of this Agreement, the term "Environmental
Laws" shall mean all federal, foreign, state and local environmental
protection, occupational, health and safety or similar laws, ordinances,
restrictions, licenses, rules, regulations and permit conditions,
including but not limited to the Federal Water Pollution Control Act,
Resource Conservation & Recovery Act, Safe Drinking Water Act, Toxic
Substances Control Act, Clean Air Act, Comprehensive Environmental Response,
Compensation and Liability Act, Emergency Planning and Community Right to
Know or other U.S. or foreign federal, state, province, or local laws of
similar effect, each as amended as of the Effective Time, and the term
"Hazardous Materials" shall mean any hazardous or toxic substances, wastes
or materials, including without limitation petroleum or petroleum products,
defined as such by any applicable Environmental Law or governmental agencies.
(b) (i) Throughout the period of its operation of the IMPRA
Facilities, IMPRA has not received any written notices, directives,
violation reports, actions or claims from or by (A) any local, state,
federal or foreign governmental agency concerning Environmental
Laws or (B) any person alleging that, in connection with Hazardous Materials,
conditions at any of the IMPRA Facilities or IMPRA's acts or omissions have
resulted in or caused or threatened to result in or cause injury or death to
any person or damage to any property, including without limitation, damage
to natural resources, and to IMPRA's Knowledge, no such notices, directives,
violation reports, actions, claims or allegations exist; (ii) to IMPRA's
Knowledge, the IMPRA Facilities and the business operated by IMPRA and its
subsidiaries are in compliance with all applicable state, federal, foreign
and local Environmental Laws, except where any noncompliance
with Environmental Laws would not have a Material Adverse Effect on IMPRA;
(iii) no underground storage tanks have been installed by IMPRA and to
IMPRA's Knowledge none either are or have been located at any of the IMPRA
Facilities; and (iv) to IMPRA's Knowledge, no friable asbestos or PCBs have
been located at any of the IMPRA Facilities.
(c) There has been no spill, discharge, release, cleanup or
contamination of or by any Hazardous Materials used, generated, treated,
stored, disposed of or handled by IMPRA at any of the IMPRA Facilities;
(ii) IMPRA has not treated, stored, disposed of, released or transported
any Hazardous Material in a manner which would give rise to any liability
under any Environmental Laws; and (iii) IMPRA holds all necessary permits,
licenses, approvals and consents to conduct its business as currently being
conducted and are not in violation of any condition of any such permit,
license or consent.
5.14 Violations; Condemnation5.14 Violations/Condemnation . To
IMPRA's Knowledge, it has not received, with respect to any IMPRA Facility,
any written notice of default or any written notice of noncompliance with
respect to applicable state, federal or local laws or regulations relating to
zoning, building, fire, use restriction or safety or health codes which have
not been remedied in all respects, and noncompliance with which could have a
Material Adverse Effect. To IMPRA's Knowledge, it has received no written
notice of any pending or threatened condemnation or other governmental taking
of any of the IMPRA Facilities.
5.15 Taxes5.15 Taxes .
(a) Except to the extent failure to comply with (i) through
(xix) below would not have a Material Adverse Effect IMPRA: (i) all Returns
(as defined below) in respect of Taxes (as defined below) required to be
filed with respect to IMPRA and each of its subsidiaries (including any
consolidated federal income tax return of IMPRA and any state Tax
return that includes IMPRA or any of its subsidiaries on a consolidated,
combined or unitary basis) have been timely filed, none of such Returns
contains, or is required to contain, a disclosure statement under section
6661 or 6662 of the Code or any similar provision of state, local or
foreign law, and no extension of time within which to file any such Return
has been requested, which Return has not since been filed; (ii) all Taxes
shown on such Returns have been timely paid and all payments of estimated
Taxes required to be made with respect to IMPRA or any of its subsidiaries
under section 6655 of the Code or any comparable provision of state, local
or foreign law have been made; (iii) all such Returns are true, correct and
complete in all material respects; (iv) no adjustment relating to any of
such Returns has been proposed formally or informally by any Tax authority;
(v) there are no outstanding subpoenas or requests for information with
respect to any Returns of IMPRA or any of its subsidiaries or the Taxes
reflected on such Returns; (vi) to IMPRA's Knowledge there are no pending
or threatened actions or proceedings for the assessment or collection of
Taxes against IMPRA or any of its subsidiaries or any corporation that was
included in the filing of a Return with IMPRA on a consolidated, combined
or unitary basis; (vii) no consent under section 341(f) of the Code has been
filed with respect to IMPRA or any of its subsidiaries; (viii) there are no
Tax liens on any assets of IMPRA or any of its subsidiaries except liens for
Taxes not yet due and payable or being contested in good faith by
appropriate proceedings; (ix) no acceleration of the vesting schedule for
any property that is substantially nonvested within the meaning of the
regulations under section 83 of the Code will occur in connection with the
transactions contemplated by this Agreement; (x) neither IMPRA
nor any of its subsidiaries is or has at any time been subject to any
accumulated earnings tax or personal holding company tax; (xi) neither
IMPRA nor any of its subsidiaries owes any amount pursuant to any written or
unwritten Tax sharing agreement or arrangement or will have any
liability after the date hereof in respect of any written or unwritten Tax
sharing agreement or arrangement executed or agreed to prior to the date
hereof; (xii) all Taxes required to be withheld, collected or deposited by
IMPRA or any of its subsidiaries have been timely withheld, collected or
deposited and, to the extent required, have been paid to the relevant Tax
authority; (xiii) any adjustment of Taxes of IMPRA or any of its
subsidiaries made by the IRS that is required to be reported to any state,
local or foreign Tax authority has been so reported and any additional Tax
due as a result thereof has been paid in full; (xiv) there are no
outstanding waivers or agreements extending the statute of limitations for
any period with respect to any Tax to which IMPRA or any of its subsidiaries
may be subject; (xv) to IMPRA's Knowledge there are no requests for rulings
or information currently outstanding that could affect the Taxes of IMPRA or
any of its subsidiaries, or any similar matters pending with respect to any
Tax authority; (xvi) no Tax authority has proposed reassessments of any
property owned or leased by IMPRA or any of its subsidiaries that could
materially increase the amount of any Tax to which IMPRA or any of its
subsidiaries would be subject; (xvii) no power of attorney that is currently
in force has been granted with respect to any matter relating to Taxes that
could affect IMPRA or any of its subsidiaries; (xviii) with respect to each
Return that has been examined by the relevant Tax authority, such
examination is closed and final without any adjustment having been made to
such Return (including adjustments not affecting the amount of Tax due with
respect to such Return); and (xix) IMPRA and each of its subsidiaries have
original receipts for all foreign Taxes paid or accrued for all unaudited
tax periods from and after June 30, 1993.
(b) For purposes of this Agreement, "Tax" or "Taxes" shall
mean any and all taxes, charges, fees, levies, and other governmental
assessments and impositions of any kind, payable to any federal, state,
local or foreign Governmental Entity or taxing authority or agency,
including, without limitation, (i) income, franchise, profits, gross
receipts, minimum, alternative minimum, estimated, ad valorem, value added,
sales, use, service, real or personal property, capital stock, license,
payroll, withholding, disability, employment, social security,
workers compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premiums, windfall profits, transfer
and gains taxes, (ii) customs duties, imposts, charges, levies or other
similar assessments of any kind, and (iii) interest, penalties and
additions to tax imposed with respect thereto; and "Returns" shall mean any
and all returns, reports, and information statements with respect to Taxes
required to be filed with the Internal Revenue Service or any other
Governmental Entity or Tax authority or agency, whether domestic or foreign,
including, without limitation, consolidated, combined and unitary tax
returns. For the purposes of this Section 5.15, references to IMPRA and
each of its subsidiaries shall include former subsidiaries of IMPRA for the
periods during which any such corporations were owned, directly or
indirectly, by IMPRA.
5.16 Product Liability Matters5.16 Product Liability Matters .
As of the date of this Agreement, neither IMPRA nor any of its subsidiaries
has submitted to its product liability insurance carriers any claims with
respect to potential product liability of IMPRA which claims could have a
Material Adverse Effect on IMPRA nor knows of any such claims which should
have been submitted to its product liability insurance carriers. Buyer has
previously been afforded access to all files containing, or been furnished
with copies of, all pleadings, claims complaints and relevant documents in
connection with the foregoing. Neither IMPRA, nor any of its subsidiaries,
nor to IMPRA's Knowledge, any employee or agent of IMPRA or any of its
subsidiaries, has made any untrue statement of a material fact or omitted to
state a material fact in connection with obtaining or renewing any insurance
policy providing product liability coverage in respect of the products of
IMPRA or any of its subsidiaries which could reasonably result in the loss of
any material portion of such coverage and to IMPRA's Knowledge, IMPRA has not
received any written notice from any insurance company stating that any
insurance policy of IMPRA or any of its subsidiaries may not provide coverage
up to the limits of such policy for any liability, loss or damage which may be
incurred or suffered by IMPRA in connection with product liability claims
other than the possible lack of coverage for punitive damages and claims for
deductible amounts.
5.17 No Undisclosed Liabilities5.17 No Undisclosed Liabilities .
Except to the extent specifically reflected or reserved against in the
Consolidated Balance Sheet of IMPRA as of March 31, 1996, or as
otherwise set forth on the Disclosure Letter, IMPRA does not have any
material liabilities or obligations of any nature, whether absolute, accrued,
contingent or otherwise (excluding any liability for Taxes) and obligations
arising after March 31, 1996 in the ordinary course of business.
5.18 Agreement Does Not Contain Untrue Statements5.18 Agreement
Does Not Contain Untrue Statements . This Agreement, the Schedules hereto
and the Disclosure Letter do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated herein or therein
or necessary to make the statements and facts contained herein or therein,
in light of the circumstances in which they were made, not false or
misleading. Copies of all documents delivered or made available to Buyer or
Buyer Sub by IMPRA, its agents and representatives are complete and accurate
copies of such documents.
5.19 Construction of Certain Provisions5.19 Construction of
Certain Provisions . It is understood and agreed that any dollar amount
specified in the foregoing representations and warranties or the inclusion
of any specific items on the Schedules hereto is not intended to imply that
higher or lower amounts, or that the items that have been so included, are
or are not material and neither party shall use the fact of the setting of
such amounts or the fact of the inclusion of any such items on the Schedules
hereto in any dispute or controversy between the parties on whether any
obligation, item or matter not described herein or included on a Schedule
hereto is or is not material for purposes of this Agreement.
5.20 No Additional Representations5.20 No Additional
Representations . NOTWITHSTANDING ANYTHING CONTAINED IN THIS ARTICLE V OR
ANY OTHER PROVISION OF THIS AGREEMENT, IT IS THE EXPLICIT INTENT OF EACH
PARTY HERETO THAT IMPRA IS MAKING NO REPRESENTATIONS OR WARRANTIES
WHATSOEVER, EXPRESS OR IMPLIED, BEYOND THOSE EXPRESSLY GIVEN IN THIS
AGREEMENT, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OR
REPRESENTATION AS TO CONDITION, MERCHANTABILITY OR SUITABILITY AS TO ANY
OF THE PROPERTIES OR ASSETS OF IMPRA, IT BEING UNDERSTOOD THAT ANY COST
ESTIMATES, PROJECTIONS OR OTHER PREDICTIONS CONTAINED OR REFERRED
TO IN THE SCHEDULES HERETO, ANY WRITTEN DISCLOSURE PROVIDED
HEREUNDER OR PROVIDED UNDER THE CONFIDENTIALITY AGREEMENT (THE
"CONFIDENTIALITY AGREEMENT") BETWEEN IMPRA AND BUYER ARE NOT, AND
SHALL NOT BE DEEMED TO BE, REPRESENTATIONS OR WARRANTIES OF IMPRA.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGERARTICLE VI CONDUCT OF BUSINESS
PENDING THE MERGER
6.1 Conduct of Business Pending the Merger6.1 Conduct of Business
Pending the Merger . IMPRA agrees that except as expressly contemplated by
this Agreement (including Section 6.1(f) below), or as contemplated by
the Disclosure Letter, during the period from the date of this Agreement and
continuing until the Effective Time:
(a) The business of IMPRA and its subsidiaries shall be
conducted only in the ordinary and usual course of business and consistent
with past practices;
(b) IMPRA shall not (i) amend its Articles of Incorporation or
Bylaws; or (ii) split, combine or reclassify any shares of its outstanding
capital stock, declare, set aside or pay any dividend or other distribution
payable in cash, stock or property in respect of its capital stock, or
directly or indirectly redeem, purchase or otherwise acquire any shares of
its capital stock or other securities;
(c) IMPRA shall not (i) authorize for issuance, issue, sell,
pledge, dispose of, encumber, deliver or agree or commit to issue, sell,
pledge, or deliver any additional shares of, or rights of any kind to
acquire any shares of, its capital stock of any class (whether through the
issuance or granting of options, warrants, commitments, subscriptions, rights
to purchase or otherwise), (ii) acquire, dispose of, transfer, lease,
license, mortgage, pledge or encumber any fixed or other substantial assets
other than in the ordinary course of business and consistent with
past practices; (iii) incur, assume or prepay any material indebtedness,
liability or obligation or any other material liabilities or issue any debt
securities other than in the ordinary course of business and consistent with
past practices; (iv) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations
of any other person in a material amount other than in the ordinary course of
business and consistent with past practices; (v) make any material loans,
advances or capital contributions to, or investments in, any other
person, other than in the ordinary course of business and consistent with
past practices; (vi) fail to maintain adequate insurance consistent with
past practices for its business; (vii) take any action described in items
(i) through (x) of Section 5.6 (not described in the Disclosure Letter) without
the consent of the Buyer or (viii) enter into any contract, agreement,
commitment or arrangement with respect to any of the foregoing;
(d) IMPRA shall use its best efforts to preserve intact its
business organization, to keep available the services of its present officers
and key employees, and to preserve the goodwill of those having business
relationships with it; provided, however, that no breach of this covenant
shall be deemed to have occurred as a result of any matter arising out of
the transactions contemplated by this Agreement or any acquisition proposals
made to IMPRA or the public announcement thereof;
(e) IMPRA shall use all reasonable efforts to prevent any
representation or warranty of IMPRA herein from becoming materially untrue
or incorrect in any material respect; and
(f) Notwithstanding anything to the contrary in (a)-(e) above,
IMPRA shall be permitted to take the following actions: (i) pay any judgment
or settlement of pending legal claims (including penalties, fees, or taxes
related thereto); (ii) repay any guarantors of IMPRA's obligations or
pledgors of collateral to secure IMPRA's obligations (including collateral
pledged to secure letters of credit relating to such obligations) if and to
the extent such guarantors pay any amount under the guaranty, or such
pledgors have such collateral foreclosed upon, in connection with any of
IMPRA's obligations, on behalf of IMPRA, and (iii) pay compensation as
permitted under Section 6.2, below.
6.2 Compensation Plans6.2 Compensation Plans . During the period
from the date of this Agreement and continuing until the Effective Time,
IMPRA agrees that, except as contemplated by the Disclosure Letter it will
not, without the prior written consent of Buyer (except as required by
applicable law or pursuant to existing contractual arrangements or other
plans or commitments as otherwise disclosed in writing pursuant hereto)
(a) enter into, adopt or amend any Employee Benefit Programs as to materially
increase the benefits thereunder, (b) grant or become obligated to grant
any material increase in the compensation or fringe benefits of directors,
officers or employees (including any such increase pursuant to any Employee
Benefit Program) or any material increase in the compensation payable or to
become payable to any officer, except for increases in compensation in the
ordinary course of business consistent with past practice, or enter into any
contract, commitment or arrangement to do any of the foregoing, except for
normal increases and non-stock benefit changes in the ordinary course of
business consistent with past practice, (c) institute any new Employee
Benefit Program, (d) make any material change in any Employee
Benefit Program arrangement or enter into any employment or similar agreement
or arrangement with any employee, or (e) enter into or renew any contract,
agreement, commitment or arrangement providing for the payment to any
director, officer or employee of compensation or benefits contingent, or the
terms of which are materially altered in favor of such individual, upon
the occurrence of any of the transactions contemplated by this Agreement.
Notwithstanding anything to the contrary in this Section 6.2, IMPRA shall be
permitted to (i) pay fiscal year-end cash bonuses to its employees in amounts
consistent with past practice and (ii) enter into staying bonus/severance
agreements with not more than fifteen (15) key employees (the "Key
Executives") as described in Exhibit "C"; provided, that the amount
potentially payable under such agreements does not exceed One Million Seven
Hundred Fifty Thousand Dollars ($1,750,000) in the aggregate.
6.3 Legal Conditions to Merger6.3 Legal Conditions to Merger . Each
of IMPRA and Buyer shall use all reasonable efforts (a) to take, or cause to
be taken, all actions reasonably necessary to comply promptly with all legal
requirements which may be imposed on such party or its subsidiaries with
respect to the Merger and to consummate the transactions contemplated by this
Agreement, subject to the appropriate vote or consent of shareholders and (b)
to obtain (and to cooperate with the other party to obtain) any consent,
authorization, order or approval of, or any exemption by, any governmental
entity and or any other public or private third party which is required to be
obtained or made by such party or any of its subsidiaries in connection with
the Merger and the transactions contemplated by this Agreement; provided,
however, that a party shall not be obligated to take any action pursuant to
the foregoing if the taking of such action or such compliance or the
obtaining of such consent, authorization, order, approval or exemption would,
in such party's reasonable opinion, (i) be materially burdensome to such
party or impact in such a materially adverse manner the economic or business
benefits of the transactions contemplated by this Agreement as to render
inadvisable the consummation of the Merger or (ii) result in the imposition
of a condition or restriction on such party or on the Surviving Corporation
of the type referred to in Section 8.1. Each party will cooperate with and
promptly furnish information to the other in connection with any such burden
suffered by, or requirement imposed upon, either of them in connection with
the foregoing.
ARTICLE VII
ADDITIONAL AGREEMENTSARTICLE VII ADDITIONAL AGREEMENTS
7.1 Access and Information7.1 Access and Information . IMPRA shall
afford to Buyer and to Buyer's financial advisors, legal counsel,
accountants, consultants and other representatives reasonable access
during normal business hours throughout the period from the date hereof to
the Effective Time to all of its books, records, properties, facilities,
personnel commitments and records (including but not limited to tax returns)
and, during such period, shall furnish promptly to Buyer all information
concerning its business, properties and personnel as Buyer may reasonably
request.
7.2 Director and Officer Indemnification7.2 Director and Officer
Indemnification . Buyer agrees that for acts occurring prior to the
Effective Time, all rights to indemnification and advancement of expenses
existing in favor of the directors and officers of IMPRA (the "Indemnified
Directors and Officers") under the provisions existing on the date hereof of
the Articles of Incorporation, By-Laws and indemnification agreements of
IMPRA shall survive the Effective Time, and Buyer agrees to indemnify and
advance expenses to the Indemnified Directors and Officers to the full extent
required or permitted under the provisions existing on the date hereof of
IMPRA's Certificate of Incorporation, By-Laws and indemnification agreements.
7.3 Public Announcements7.3 Public Announcements . Each of Buyer
and IMPRA agrees that it will obtain the approval of the other prior to
issuing any press release with respect to the transactions contemplated by
this Agreement or termination thereof and will use its best efforts to
consult with the others before otherwise making any public statement or
responding to any press inquiry with respect to this Agreement or the
transactions contemplated hereby or termination thereof, except
as may be required by law or any governmental agency.
7.4 Expenses7.4 Expenses . If the Merger is not consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses. If the Merger is consummated, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby,
including the costs and expenses of IMPRA, shall be paid by the Buyer.
7.5 Additional Agreements7.5 Additional Agreements .
(a) Subject to the terms and conditions herein provided,
including without limitation those set forth in the proviso to Section 6.3
hereof, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done,
all things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement, including using all reasonable efforts to obtain all necessary
waivers, consents and approvals, and to effect all necessary registrations
and filings. In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the
proper officers and/or directors of the Companies shall take all such
necessary action.
(b) Subject to the terms and conditions herein provided,
including without limitation those set forth in the proviso to Section 6.3
hereof, Buyer and IMPRA will cooperate with each other and use all reasonable
efforts to prepare all necessary documentation to effect promptly all
necessary filings and to obtain all necessary permits, consents, approvals,
orders and authorizations of or any exemptions by, all third parties and
governmental bodies necessary to consummate the transactions contemplated by
this Agreement.
(c) Each party will keep the other party apprised of the status
of any inquiries made of such party by any governmental agency or authority
or members of their respective staffs with respect to this Agreement or the
transactions contemplated herein.
7.6 Confidentiality7.6 Confidentiality . All confidential
information disclosed by any party to this Agreement to any other party to
this Agreement in connection with the transactions contemplated
hereby shall be kept confidential by such other party and shall not be used
by such other party otherwise than as herein contemplated, except to the
extent that (a) it is or becomes generally available to the public other
than as a result of a wrongful disclosure by a party receiving such
confidential information hereunder, (b) it was readily available to the
party receiving such information on a non-confidential basis prior to its
disclosure hereunder, (c) it was already lawfully in the receiving party's
possession prior to its disclosure hereunder, (d) it becomes available to the
receiving party on a non-confidential basis from a source other than the
disclosing party hereunder without violation of such source's confidentiality
agreement with the disclosing party or its representatives or of legal,
fiduciary or ethical constraints on disclosure of such information,
(e) it may be required by law, or (f) such duty as to confidentiality is waived
by the other party. Such obligation as to confidentiality and non-use shall
survive the termination of this Agreement for any reason. This Section 7.6
shall survive termination hereof or consummation of the transactions
hereunder and shall replace any prior confidentiality agreements, including
the Confidentiality Agreement, entered into by the parties hereto except to
the extent set forth in the Consulting Agreements, which Consulting
Agreements shall control.
7.7 Real Estate Transaction7.7 Real Estate Transaction . Subject to
the closing of the Merger and the provisions of the Real Estate Documents (as
defined below), Buyer shall in a separate transaction acquire that certain
real property described in the Real Estate Documents attached hereto as
Exhibits "D" and "E" for a purchase price equal to an aggregate of Three
Million Dollars ($3,000,000). The "Real Estate Documents" shall mean the
Agreement of Purchase and Sale and Escrow Instructions between Buyer and
BG & J Investments, dated concurrently herewith and attached hereto as
Exhibit "D," and the Agreement of Purchase and Sale and Escrow Instructions
between Buyer and Baker-Green Investments dated concurrently herewith and
attached hereto as Exhibit "E."
7.8 Bank Guarantees7.8 Bank Guarantees . Buyer shall cooperate with
IMPRA and use Buyer's best efforts to obtain prior to the Effective Time the
release of all guarantees ("Individual Guarantees") provided by individuals
on behalf of IMPRA relating to IMPRA's bank financings or other indebtedness
("Releases"), whether through Buyer's substitution of guarantors, repayment of
indebtedness, or provision of security otherwise satisfactory to the holders
of such indebtedness in lieu of the Individual Guarantees.
7.9 Noncompete Agreements7.9 Noncompete Agreements . Prior to the
Effective Time, Harold D. Green and Elizabeth A. Green shall enter into
Noncompete Agreements in the form attached hereto as Exhibit "F-1" and "F-2,"
respectively.
7.10 IPE7.10 IPE .
(a) Buyer agrees that after the Effective Time, the Surviving
Corporation shall continue to supply to IPE PTFE resin purchased by the
Surviving Corporation from ICI Americas, Inc. and its affiliates ("ICI") on
the same terms and conditions as IMPRA has heretofore supplied IPE with such
resin; provided, that the Surviving Corporation's obligation
shall be subject to the right of Buyer to terminate the supply arrangement
in the future, if, based upon the facts and circumstances then existing,
the Surviving Corporation's continuing to supply resin for IPE would
adversely and materially jeopardize the Surviving Corporation's relationship
with ICI.
(b) Prior to the Effective Time, IMPRA agrees to take or cause
to be taken all necessary action on its part to terminate the participation
of the employees of IPE in the IMPRA, Inc. Defined Benefit Pension Plan and
Trust.
7.11 Consulting Agreements7.11 Consulting Agreements . Prior to the
Effective Time, Buyer shall take or cause to be taken all necessary action on
its part to enter into Consulting Agreements with Harold D. Green and
Elizabeth A. Green on the terms and conditions attached hereto as Exhibit
"A-1" and Exhibit "A-2," respectively.
7.12 June 30, 1996 Financials7.13 June 30, 1996 Financials .
Promptly upon their completion, but in any event no later than
August 31, 1996, IMPRA shall provide to Buyer the consolidated balance sheet
and related consolidated statements of income, shareholders' equity and cash
flows of IMPRA for the fiscal year ended June 30, 1996, as audited by IMPRA's
public accountants and prepared in accordance with generally accepted
accounting principles applied on a basis consistent with past practice.
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGERARTICLE VIII CONDITIONS TO
CONSUMMATION OF THE MERGER
8.1 Conditions to Both IMPRA's and Buyer's Obligation to Effect the
Merger.8.1 Conditions to Both IMPRA'S and Buyer's Obligation to Effect the
Merger The respective obligations of IMPRA and Buyer to effect the
transactions contemplated herein shall be subject to the satisfaction at or
prior to the Effective Time of the following conditions, which may be waived
by mutual agreement: No preliminary or permanent injunction or other
order by or before any federal, state or foreign court of competent jurisdiction
which prohibits the consummation of the Merger shall have been issued and
remain in effect. No statute, rule, regulation, executive order, stay,
decree, or judgment shall have been enacted, entered, issued, promulgated or
enforced by or before any court or governmental authority which prohibits or
restricts the consummation of the Merger. Other than the filing of Articles
of Merger and Plan of Merger with the Arizona Corporation Commission, all
authorizations, consents, orders or approvals of, or declarations or filings
with, and all expirations of waiting periods imposed by, any governmental
entity (all of the foregoing, "Consents") which are necessary for the
consummation of the Merger, other than Consents the failure to obtain which
would have no Material Adverse Effect on the consummation of the Merger or on
the Surviving Corporation, Buyer and their subsidiaries shall have been
filed, occurred or been obtained (all such permits, approvals, filings
and consents and the lapse of all such waiting periods being referred to as
the "Requisite Regulatory Approvals") and all such Requisite Regulatory
Approvals shall be in full force and effect.
8.2 Conditions to Obligation of Each Company to Effect the Merger8.2
Conditions to Obligation of Each Company to Effect the Merger.
(a) The obligation of IMPRA to effect the Merger shall be
further subject to the following conditions: (i) Buyer shall satisfy all of
the obligations under this Agreement required to be performed by Buyer at or
prior to the Effective Time in all material respects, (ii) the
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects when made and at and as of the
Effective Time as if made at and as of such time, except as contemplated by
this Agreement, (iii) Buyer shall have performed its obligations under the
Real Estate Documents and Buyer shall concurrently with the consummation of
the Merger acquire that certain real property described in the Real Estate
Documents; provided, that the conditions to Buyer's obligations shall have
been satisfied in all material respects, and (iv) the Releases shall have
been obtained or Buyer shall have agreed to indemnify the individuals
providing the Individual Guarantees to such individuals' satisfaction.
These conditions may be waived by IMPRA.
(b) The obligation of Buyer to effect the Merger shall be
further subject to the following conditions: (i) IMPRA shall satisfy all of
the obligations under this Agreement required to be performed by IMPRA at or
prior to the Effective Time in all material respects, and (ii) the
representations and warranties of IMPRA contained in this Agreement shall be
true and correct in all material respects when made and at and as of the
Effective Time as if made at and as of such time, except as contemplated by
this Agreement. Any change in IMPRA's relationship with ICI and Vascutek,
including but not limited to any change due to the transactions
contemplated by this Agreement, shall not (A) permit Buyer to terminate or
fail to consummate this Agreement, or (B) constitute a breach of any
representation, warranty or covenant herein; provided, that IMPRA shall use
its reasonable best efforts to deal with ICI and Vascutek in a manner
consistent with past practice. These conditions may be waived by Buyer.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVERARTICLE IX TERMINATION, AMENDMENT AND WAIVER
9.1 Termination9.1 Termination. This Agreement may be terminated
and the Merger contemplated hereby abandoned at any time prior to the
Effective Time:
(a) By mutual written consent of Buyer and IMPRA.
(b) By Buyer or IMPRA if the Merger shall not have been
consummated on or before September 30, 1996, unless the failure of the
Effective Time to occur by such date shall be due to (i) the failure of the
party seeking to terminate this Agreement to perform or observe the covenants
and agreements of such party set forth herein, or (ii) the fact that the
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
has not expired by such date.
(c) By either Buyer or IMPRA if there shall have been any
material breach of a material obligation of the other and, if such breach is
curable, such default shall have not been remedied within thirty (30) days
after receipt by the defaulting party of notice in writing from the
other party specifying such breach and requesting that it be remedied;
provided, that such thirty-day period shall be extended for so long as the
other party shall be making diligent attempts to cure such default.
(d) By IMPRA or Buyer, if any court of competent jurisdiction
in the United States or other United States governmental body shall have
issued an order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting any Merger and such order, decree, ruling
or any other action shall have become final and non-appealable.
9.2 Effect of Termination9.2 Effect of Termination. In the event of
termination of this Agreement as provided above, this Agreement shall
forthwith become of no further effect and, except for a termination resulting
from a breach by a party of this Agreement, there shall be no liability or
obligation on the part of any party or its respective officers or directors
(except as set forth in this Section 9.2 and except for Sections 7.3, 7.4,
7.6 and 11.6 hereof, all of which shall survive the termination). Nothing
contained in this Section 9.2 shall relieve any party from liability for
willful breach of this Agreement that results in termination of this
Agreement. Upon request therefor, each party will redeliver all documents,
work papers and other material of any other party relating to the
transactions contemplated hereby, whether obtained before or after the
execution hereof, to the party furnishing same.
9.3 Amendment9.3 Amendment. Any amendment of this Agreement which
alters the Purchase Price or which in any way materially adversely affects
the rights of the Shareholders, shall not be made without the further
approval of the Shareholders. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto.
9.4 Waiver9.4 Waiver. At any time prior to the Effective Time, the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth
in an instrument in writing signed on behalf of such party. Such waiver
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
ARTICLE X
SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATIONARTICLE X SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNIFICATION
10.1 Survival; Indemnification10.1 Survival, Indemnification.
(a) No representations, warranties or agreements contained
herein shall survive beyond the Effective Time except that (i) the agreements
contained in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 7.2, 7.3, 7.4, 7.5, 7.6,
9.2, 9.3, 9.4, 11.1, 11.2, 11.5, 11.6, 11.7, 11.8, 11.9 and 11.10 and Article
X hereof shall survive beyond the Effective Time without limitation and (ii)
the representations and warranties of Buyer and IMPRA in this Agreement shall
survive beyond the Effective Time (the end of such period, the "Termination
Date") for six (6) months following the Effective Time solely for the purpose
of the Indemnification Escrow as described below.
(b) Through the Indemnification Escrow described below, the
Surviving Corporation, Buyer, Buyer Sub and each of their officers,
directors, employees, agents, representatives and affiliates (collectively,
the "Indemnitees" and individually each an "Indemnitee") (subject to the
terms and conditions below) will be entitled to be indemnified and held
harmless by the Shareholders against and in respect of any claims, damages,
losses, costs, expenses, liabilities (absolute, accrued, contingent or
otherwise), and reasonable legal fees and expenses (collectively, "Losses")
incurred or suffered by any Indemnitee, directly or indirectly,
caused by or arising out of or related to any untruth, inaccuracy, error in,
or breach of, any representation or warranty of IMPRA contained in this
Agreement, when made or deemed to be made. The rights of Indemnitees to
indemnification under this Section 10.1(b) shall be limited to,
and satisfied solely out of and to the extent of, the Indemnification Escrow
as it may be reduced or increased pursuant to Sections 3.2(d), 3.4(e) and
3.5, this Section 10.1 and the Escrow Agreement, and any Loss shall be
limited to those amounts for which the Indemnitee does not receive coverage
under applicable insurance policies, if any. All indemnification requests of
Indemnitees hereunder shall be made by or through Buyer.
(c) By voting to approve this Agreement or by surrendering his
or her Certificate(s) evidencing IMPRA Shares at Closing, each Shareholder,
other than Shareholders who have perfected dissenter rights under the ABCA,
acknowledges and agrees that (i) the consideration to which such Shareholder
is entitled hereunder is subject to adjustment as contemplated in
Articles III and X, (ii) the Indemnification Escrow Payment and the Escrow
Adjustment shall be placed in the Indemnification Escrow provided for in an
Escrow Agreement to be entered into, as of the Effective Time, in the form of
Exhibit "G" attached hereto and (iii) the Escrow Agent shall be, and is
hereby, authorized from time to time to transfer all or any portion of the
amounts so deposited in satisfaction of the indemnity obligation and as
otherwise provided pursuant to Articles III and X and as contemplated in the
Escrow Agreement. The Indemnitees agree to look solely to the
Indemnification Escrow for recourse in the event of a breach of any
representation or warranty of IMPRA contained in this Agreement and will not
look directly to any Shareholder or Shareholders for any indemnification
hereunder.
(d) If any Indemnitee shall have any liquidated claim of
indemnification pursuant to Section 10.1(b) above, it shall promptly request
that Buyer give written notice thereof to the Representative and the Escrow
Agent, including a brief description of the facts upon which such claim is
based and the amount thereof. Any Indemnitee may also request that Buyer
provide written notice to the Representative and the Escrow Agent of any
unliquidated claim of indemnification pursuant to Section 10.1(b), including
a brief description of the facts upon which such claim is based and a demand
for a reserve amount to be created in respect of such claim. Any claim made
by any Indemnitee for Losses that are unliquidated shall not be paid, but
funds equal to such claim shall be held in the Indemnification Escrow until
such Losses are fully liquidated. Notwithstanding the foregoing, no amount
will be delivered to an Indemnitee pursuant to a written claim notice (with
respect to either a liquidated or unliquidated claim) pursuant to Section 10.
1(b) above unless, and then only to the extent that, the aggregate amount of
Losses sustained by Indemnitees as a group and as to which written claim
notices have been given exceeds Two Hundred Fifty Thousand Dollars ($250,000)
(taking into account any reduction of prior noticed claims resulting from the
dispute resolution procedures of Section 10.2 below).
(e) If the Representative shall notify the Escrow Agent in
writing (within fifteen (15) days of delivery to the Escrow Agent by Buyer of
a written notice of claim for indemnification) of his objection to a claim of
indemnification or a demand for the creation of a reserve against the
Indemnification Escrow for any unliquidated claim (or the amount thereof),
the Escrow Agent shall hold the disputed amount of funds in the
Indemnification Escrow until the rights of the IMPRA Shareholders and the
Indemnitees with respect thereto have been agreed upon between the
Representative and the claiming Indemnitee. In the event such an agreement is
reached, the claiming Indemnitee shall request Buyer to provide to the Escrow
Agent a written notice signed by the Representative in the form specified in
the Escrow Agreement. If no such agreement has been reached, either the
Indemnitee or the Representative may, not earlier than thirty (30) days after
the date of the initial claim notice, submit the dispute to confidential,
binding arbitration in Phoenix, Arizona before a panel of three arbitrators,
one each to be selected by Buyer and the Representative, and the third to be
selected by the other two arbitrators, pursuant to the procedures and rules
for commercial arbitration of the American Arbitration Association. The
Escrow Agent may rely on the order or other determination of such
arbitrators. If such arbitrators shall determine that any part of the
Indemnification Escrow is to be delivered to an Indemnitee or is to be set
aside in a reserve for any unliquidated claim, the Escrow Agent shall
promptly following receipt of a copy of such determination establish such
reserve or deliver to such Indemnitee the lesser of (i) the amount of the
claim or claims as awarded to the Indemnitee
to be satisfied, subject to the limitation set forth in paragraph (d) above,
or (ii) the entire amount remaining in the Indemnification Escrow. Any
disputed amounts not awarded to the Indemnitee shall promptly be transferred
to the unreserved portion of the Indemnification Escrow. Buyer and
the Representative shall bear their respective costs and expenses of any such
arbitration; provided that, the Representative shall be entitled to charge
the Indemnification Escrow for his reasonable costs and expenses as set forth
in the Escrow Agreement.
(f) On and after the Termination Date, the Escrow Agent shall
distribute to the Shareholders on a pro rata basis all remaining unreserved
amounts in the Indemnification Escrow, less an amount equal to the dollar
amount of all claims pursuant to Section 10.1(c) that are still in process
in (i) that are then-payable liquidated claims, (ii) for which a reserve
established pursuant to paragraph (d) then exists, or (iii) that are still
in the process of resolution pursuant to Section 10.1 hereto. No new claims
may be brought under this Section 10.1 after the Termination Date.
(g) After the Termination Date, (i) as each matter referred to
in Section 10.1(f) is resolved or otherwise concluded and (ii) as each
undisputed unliquidated claim which remains unliquidated as of the
Termination Date is liquidated, the Escrow Agent shall distribute to the
Shareholders their respective pro rata portion of the Escrow Fund then
determined by the Escrow Agent to be free of any rights of any Indemnitee,
and, when all such matters are resolved and such claims are liquidated, the
obligations under Section 10.1(b) hereof shall terminate. The
Indemnification Escrow shall be terminated when all of the Escrow Fund in
the Indemnification Escrow shall have been disbursed in accordance with the
provisions hereof and the Escrow Agreement by the Escrow Agent.
(h) As of the Effective Time, the Shareholders shall, by virtue
of the approval of this Agreement by the requisite vote of the Shareholders,
be deemed, for themselves and their heirs and representatives and successors,
to have constituted and appointed, effective from the Effective Time, Harold
D. Green, as their agent and attorney-in-fact (the "Representative") to take
all action required or permitted under the Indemnification Escrow as provided
in the Escrow Agreement or herein with respect to the interests and rights of
the Shareholders. In the event of the death, physical or mental incapacity
or resignation of the Representative a replacement Representative shall be
appointed as provided in the Escrow Agreement.
In taking any action whatsoever hereunder, the Representative shall be
protected in relying upon any notice, paper or other document reasonably
believed by him to be genuine, or upon any evidence reasonably deemed by him
to be sufficient. The Representative may consult with counsel in connection
with his duties hereunder and shall be fully protected in any act taken,
suffered or permitted by him in good faith or in accordance with the advice
of counsel. The Representative shall not be liable to the Shareholders for
the performance of any act or the failure to act so long as he acted or
failed to act in good faith within what he reasonably believed to be the
scope of his authority and for a purpose which he reasonably believed to be
in the best interests of the Shareholders.
10.2 Procedure10.2 Procedure. In the event that at any time or from
time to time after the Effective Time a person indemnified under Section 10.1
or 10.3 (an "Indemnified Party") shall sustain a loss of any nature
whatsoever against which such Indemnified Party is indemnified under
this Agreement, such Indemnified Party shall notify the party hereto
obligated to provide such indemnification (the "Indemnitor") of any such
loss so sustained. If Indemnitor is Buyer, Indemnitor shall within thirty
(30) days after transmittal of such notice pay to such Indemnified
Party the amount of such loss so sustained, subject to the right to contest
any claim which has not yet resulted in a loss, as herein provided. If
Indemnitor is the Escrow Agent, payment shall be governed by the Escrow
Agreement. The Indemnified Party shall promptly notify the Indemnitor
of the existence of any claim, demand, or other matter involving liabilities
to third parties to which the Indemnitor's indemnification obligations would
apply and shall give the Indemnitor (acting through the Representative if
Indemnitor is the Escrow Agent) a reasonable opportunity to defend
the same or prosecute such action to conclusion or settlement satisfactory
to the Indemnified Party at Indemnitor's own expense and with counsel of
Indemnitor's selection (who shall be approved by Indemnified Party, which
approval shall not be unreasonably withheld); provided that the Indemnified
Party shall at all times also have the right to fully participate in the
defense at its own expense. If the Indemnitor shall, within a reasonable
time after said notice, fail to defend, the Indemnified Party shall have the
right, but not the obligation, to undertake the defense of, and to
compromise or settle (exercising reasonable business judgment) the claim or
other matter on behalf, for the account, and at the risk and expense of
Indemnitor. Except as provided in the preceding sentence, the Indemnified
Party shall not compromise or settle the claim or other matter
without the prior written consent of the Indemnitor. If the claim is one
that cannot by its nature be defended solely by the Indemnitor, the
Indemnified Party shall make available all information and assistance that
the Indemnitor may reasonably request; provided that any associated expenses
shall be paid by the Indemnitor. If the Losses relate to a Loss or demand
asserted by a third party, the Indemnified Party and Indemnitor shall
jointly control the defense and settlement thereof and any settlement shall
require the prior written consent of both parties, which consent shall not be
unreasonably withheld.
10.3 Buyer's Indemnification10.3 Buyer's Indemnification. Buyer
agrees to indemnify and hold Shareholders harmless from and against any and
all Losses which may accrue or be sustained by Shareholders arising out of
or as a result of (a) the conduct of the business or ownership of IMPRA or the
Surviving Corporation after the Effective Time, or (b) any of the warranties,
representations or covenants of Buyer contained in this Agreement being
incorrect, untrue or breached.
10.4 Contest; Challenge10.4 Contest, Challenge. If Indemnitor
contests or challenges any claim or action asserted against Indemnified Party
referred to in this Article, it shall do so at its own cost and expense (or
in the case of Escrow Agent, at the cost of the Indemnification Escrow),
holding Indemnified Party harmless from all costs, fees, expenses, debts,
liabilities and charges in connection with such contest; shall diligently
defend against any such claim; and shall hold Indemnified Party's business
and assets free and harmless from any attachment, execution,
judgment, lien or other legal process.
ARTICLE XI
GENERAL PROVISIONSARTICLE XI GENERAL PROVISIONS
11.1 Brokers.11.1 Brokers IMPRA represents and warrants to Buyer and
Buyer Sub that, except for IMPRA's financial advisor, Alex. Brown & Sons
Incorporated, no broker, finder or financial advisor is entitled to any
brokerage, finder's or other fee or commission in connection with the Merger
or the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of IMPRA. Buyer represents and warrants to IMPRA that,
except for its financial advisor, CS First Boston Corporation, no broker,
finder or financial advisor is entitled to any brokerage, finder's or other
fee or commission in connection with the Merger or the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Buyer.
11.2 Notices11.2 Notices. All notices, claims, demands and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally or by telecopy or mailed by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) If to IMPRA, to:
IMPRA, Inc.
1625 West 3rd Street
P.O. Box 1740
Tempe, Arizona 85280
Attention: Harold D. Green, President
Telecopy Number: (602) 966-7062
with a copy to:
Polese, Pietzsch, Williams & Nolan, P.A.
2702 North Third Street
Suite 3000
Phoenix, Arizona 85004-4607
Attention: James F. Polese, Esq.
Telecopy Number: (602) 279-5107
and a copy to:
Morrison & Foerster
19900 MacArthur Boulevard, Suite 1200
Irvine, California 92715
Attention: Robert M. Mattson, Jr., Esq.
Telecopy Number: (714) 251-0900
(b) If to Buyer or Buyer Sub, to:
C.R. Bard, Inc.
730 Central Avenue
Murray Hill, New Jersey 07974
Attention: General Counsel
Telecopy Number: (908) 277-8025
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Philip T. Ruegger III, Esq.
Telecopy Number: (212) 455-2502
and
Squire, Sanders & Dempsey
Two Renaissance Square
40 North Central Avenue, Suite 2700
Phoenix, Arizona 85004
Attention: Norman C. Storey, Esq.
Telecopy Number: (602) 253-8129
(c) If to the Representative to:
IMPRA, Inc.
1625 West 3rd Street
P.O. Box 1740
Tempe, Arizona 85280
Attention: Harold D. Green, President
Telecopy Number: (602) 966-7062
11.3 Descriptive Headings11.3 Descriptive Headings. The headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
11.4 Entire Agreement; Assignment11.4 Entire Agreement, Assignment.
This Agreement (including the Schedules, Exhibits, and other documents and
instruments referred to herein) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and
oral, among the parties or any of them, with respect to the subject matter
hereof, and shall not be assigned by operation of law or otherwise.
11.5 Governing Law11.5 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Arizona without giving effect to the provisions thereof relating to
conflicts of law.
11.6 Parties in Interest11.6 Parties in Interest. Except for
Sections 7.2, 7.7, 7.8, 7.9, 7.10, 7.11 and Article X hereof, nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefit or remedies of any nature whatsoever or by reason
of this Agreement.
11.7 Counterparts11.7 Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed to be an original
but all of which shall constitute one and the same agreement.
11.8 Validity11.8 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not effect the validity or enforceability
of any other provisions of this Agreement, which shall remain in full force
and effect.
11.9 Investigation11.9 Investigation. The respective representations
and warranties of Buyer or IMPRA contained herein or in the certificates or
other documents delivered prior to the Effective Time shall not be deemed
waived or otherwise affected by any investigation made by the other.
11.10 Consents11.10 Consents. For purposes of any provision of
this Agreement requiring, permitting or providing for the consent of any
party, the written consent of the Chief Executive Officer of such party
shall be sufficient to constitute such consent.
IN WITNESS WHEREOF, each of Buyer, Buyer Sub and IMPRA has caused this
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the date first above written.
C.R. BARD, INC., a New Jersey corporation
By:
Name:
Title:
CRB ACQUISITION COMPANY, an Arizona
corporation
By:
Name:
Title:
IMPRA, INC., an Arizona corporation
By:
Name:
Title:
The undersigned hereby consents to his
appointment as Representative as herein
provided and agrees to the provisions
hereof relating thereto.
. . . . . . . . . . . . . . . . . . . .
Harold D. Green, solely in his capacity
as Representative
<PAGE>
AGREEMENT AND PLAN OF MERGER
by and among
C.R. Bard, Inc., a New Jersey corporation
CRB Acquisition Company,
an Arizona corporation and a wholly-owned subsidiary of Buyer
and
IMPRA, Inc., an Arizona corporation
Dated: August 2, 1996
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I THE MERGER 1
1.1 The Merger 1
1.2 Effective Time of the Merger
ARTICLE II BUYER AND THE SURVIVING CORPORATION 1
2.1 Articles of Incorporation of the Surviving Corporation 1
2.2 Bylaws of the Surviving Corporation 2
2.3 Directors and Officers of the Surviving Corporation 2
ARTICLE III EXCHANGE OF SHARES 2
3.1 Disposition of Buyer Sub Shares, IMPRA Treasury Shares 2
3.2 Exchange of IMPRA Shares 2
3.3 No Further Rights in IMPRA Shares 3
3.4 The Purchase Price 4
3.5 Adjustment of Purchase Price 6
3.6 Closing 6
3.7 Supplementary Action 8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER 8
4.1 Organization 8
4.2 Authority Relative to this Agreement 9
4.3 Consents and Approvals; No Violations 9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF IMPRA 10
5.1 Organization Permits 10
5.2 Capitalization; Shareholders 10
5.3 Authority Relative to this Agreement 10
5.4 Consents and Approvals; No Violations 11
5.5 Financial Statements 11
5.6 Absence of Certain Changes or Events 11
5.7 Litigation 12
5.8 Contracts 12
5.9 Employee Benefit Plans 13
5.10 Medical Device Regulatory Authority Matters 14
5.11 Intellectual Property 15
5.12 Owned Property; IMPRA Facilities 17
5.13 Compliance With Legislation Regulating Environmental Quality 17
5.14 Violations/Condemnation 18
5.15 Taxes 18
5.16 Product Liability Matters 19
5.17 No Undisclosed Liabilities 20
5.18 Agreement Does Not Contain Untrue Statements 20
5.19 Construction of Certain Provisions 20
5.20 No Additional Representations 20
ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGER 21
6.1 Conduct of Business Pending the Merger 21
6.2 Compensation Plans 22
6.3 Legal Conditions to Merger 23
ARTICLE VII ADDITIONAL AGREEMENTS 23
7.1 Access and Information 23
7.2 Director and Officer Indemnification 23
7.3 Public Announcements 23
7.4 Expenses 24
7.5 Additional Agreements 24
7.6 Confidentiality 24
7.7 Real Estate Transaction 25
7.8 Bank Guarantees 25
7.9 Noncompete Agreements 25
7.10 IPE 25
7.11 Consulting Agreements 25
7.13 June 30, 1996 Financials 26
ARTICLE VIII CONDITIONS TO CONSUMMATION OF THE MERGER 26
8.1 Conditions to Both IMPRA'S and Buyer's Obligation
to Effect the Merger 26
8.2 Conditions to Obligation of Each Company to
Effect the Merger 27
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER 27
9.1 Termination 27
9.2 Effect of Termination 28
9.3 Amendment 28
9.4 Waiver 28
ARTICLE X SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION 29
10.1 Survival, Indemnification 29
10.2 Procedure 31
10.3 Buyer's Indemnification 32
10.4 Contest, Challenge 32
ARTICLE XI GENERAL PROVISIONS 32
11.1 Brokers 32
11.2 Notices 33
11.3 Descriptive Headings 34
11.4 Entire Agreement, Assignment 34
11.5 Governing Law 35
11.6 Parties in Interest 35
11.7 Counterparts 35
11.8 Validity 35
11.9 Investigation 35
11.10 Consents 35
SCHEDULES AND EXHIBITS
Seller Disclosure Schedule
SCHEDULE 4 Persons to Whom "Knowledge" is Attributed
EXHIBIT A-1 Harold Green Consulting Agreement
EXHIBIT A-2 Elizabeth Green Consulting Agreement
EXHIBIT B Opinion of Counsel
EXHIBIT C Staying Bonus/Severance Agreements
EXHIBIT D Agreement of Purchase and Sale and
Escrow Instructions (BG&J Investments)
EXHIBIT E Agreement of Purchase and Sale and
Escrow Instructions (Baker-Green Investments)
EXHIBIT F-1 Harold Green Noncompete Agreement
EXHIBIT F-2 Elizabeth Green Noncompete Agreement
EXHIBIT G Escrow Agreement
Exhibit 2(b)
CONFORMED COPY
FIRST AMENDMENT
TO THE
AGREEMENT AND PLAN OF MERGER
AMENDMENT, dated as of September 10, 1996, to the
Agreement and Plan of Merger, dated as of August 2, 1996 (the
"Agreement and Plan of Merger"), by and among C. R. Bard, Inc., a
New Jersey corporation ("Buyer"), CRB Acquisition Company, an
Arizona corporation and a wholly-owned subsidiary of Buyer
("Buyer Sub"), and IMPRA, Inc., an Arizona corporation ("IMPRA").
WHEREAS, the parties wish to amend the Agreement and
Plan of Merger as herein set forth.
NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Defined Terms. Unless otherwise defined herein,
all capitalized terms defined in the Agreement and Plan of Merger
and used herein are so used as so defined.
2. Amendment to Sections 3.2(a) and 3.4 of the
Agreement and Plan of Merger. Sections 3.2(a) and 3.4 of the
Agreement and Plan of Merger shall be amended by deleting from
the respective first sentences thereof the phrase "One Hundred
Forty Three Million One Hundred Seventy Eight Thousand Five
Hundred Thirty Nine Dollars ($143,178,539)" and substituting in
lieu thereof the following new phrase:
"One Hundred Forty Three Million One Hundred Ninety
Five Thousand Five Hundred Thirty Nine Dollars
($143,195,539)".
3. Amendment to Section 3.4(a) of the Agreement and
Plan of Merger. Section 3.4(a) of the Agreement and Plan of
Merger shall be deleted in its entirety and the following
substituted in lieu thereof:
"Within sixty (60) days after the Effective Time,
the Representative shall cause to be delivered to Buyer
a consolidated balance sheet of IMPRA as at the close
of business at the Effective Time (the "Effective Time
Balance Sheet") together with the related consolidated
statements of income, shareholders' equity and cash
flows for the period from June 30, 1996 to the
Effective Time (the "Related Effective Time
Statements"), in each case as proposed to be delivered
as final and audited by IMPRA's current independent
accountants. Such financial statements shall be
prepared based in pertinent part on a physical
inventory that representatives of Buyer may observe.
The Effective Time Balance Sheet and the Related
Effective Time Statements shall be prepared in
accordance with generally accepted accounting
principles applied on a basis consistent with past
practice, and the Effective Time Balance Sheet shall
fairly present the assets and liabilities and financial
condition of IMPRA at the Effective Time. The
reasonable fees and expenses of IMPRA's current
independent accountants for their services pursuant to
this Section 3.4 shall be borne by the Surviving
Corporation. After the Effective Time, Buyer agrees to
give the Representative and IMPRA's current accountants
reasonable access to IMPRA's books and records and to
make available to such parties such employees of IMPRA
and the Surviving Corporation as may be reasonably
necessary in connection with the preparation of the
Effective Time Balance Sheet.
4. Amendment to Section 3.4(b). Section 3.4(b) of
the Agreement and Plan of Merger shall be amended by adding to
the end thereof the following new sentence:
"Buyer agrees not to raise as an objection, and
shall not propose any Proposed Adjustment with
respect to, the omission from the Effective Time
Balance Sheet of a reserve relating to Vascutek
inventory held by IMPRA."
5. Amendment to Section 3.4(g) of the Agreement and
Plan of Merger. Section 3.4(g) of the Agreement and Plan of
Merger shall be amended by adding to the end thereof the
following new sentence:
"Further, upon the Effective Time Balance Sheet
becoming final, the Surviving Corporation shall
request that IMPRA's current independent
accountants deliver their final audit report with
respect to the Effective Time Balance Sheet
(including any adjustments) and the Related
Effective Time Statements."
6. Limited Amendment. Except as expressly amended
hereby, all the provisions of the Agreement and Plan of Merger
shall continue to be in full force and effect in accordance with
their terms.
7. Governing Law. This Amendment shall be governed
by and construed in accordance with the laws of the State of
Arizona without giving effect to the provisions thereof relating
to conflicts of law.
8. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an
original but all of which shall constitute one and the same
agreement.
<PAGE>
IN WITNESS WHEREOF, each of Buyer, Buyer Sub and IMPRA
has caused this Amendment to be executed on its behalf by its
officers thereunto authorized, all as of the date first above
written.
C. R. BARD, INC.
By: /s/ Richard A. Flink
Name: Richard A. Flink
Title: Vice President
CRB ACQUISITION COMPANY
By: /s/ Richard A. Flink
Name: Richard A. Flink
Title: President
IMPRA, INC.
By: /s/ Harold D. Green
Name: Harold D. Green
Title: President
Exhibit 99
News Release C. R. Bard, Inc.
730 Central Avenue
Murray Hill, NJ 07974
Contact: E.L. Parker
Vice President and Treasurer
(908) 277-8059
BARD ANNOUNCES ACQUISITION OF IMPRA
MURRAY HILL, NJ - September 16, 1996 - C. R. Bard, Inc. (NYSE-BCR)
announced today that it has completed the acquisition of Impra,
Inc. Impra, headquartered in Tempe, AZ, is a leader in the
development, manufacturing and marketing of PTFE vascular grafts
used for blood vessel replacement surgery. It offers more than 260
products to the vascular surgeon as a complete line, full service
supplier, with sales for the fiscal year ended June 30, 1996, of
$48.8 million. In addition, Impra has several active R&D programs
in vascular graft and endovascular technology.
"This acquisition will strengthen Bard's position in one of our key
surgical markets and help fuel top line growth for 1996 and
beyond," commented William H. Longfield, chairman and CEO. "The
Impra acquisition fits very well with our strategy of strengthening
our franchise product areas. We are particularly pleased with
Impra's R&D capability, especially in the potentially large market
opportunity for covering stents."
Bard plans to consolidate its current vascular graft product line
with the Impra products and headquarter the new subsidiary, named
Bard Impra division, in the Tempe, AZ location. John McDermott,
Impra's former chief operating officer, will manage Bard's new
consolidated operation as president of Bard Impra.
Bard paid $143.2 million for the common stock of Impra, making this
the largest acquisition in Bard's history. Financing for the
acquisition was accomplished under Bard's new $350 million
commercial paper program which was initiated on Monday, September
9, 1996, with the sale of $100 million of commercial paper of
varying maturities.
C. R. Bard, Inc. headquartered in Murray Hill, NJ, is a leading
multinational developer, manufacturer and marketer of health care
products.
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