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Sample Business ContractsHome: Sample Business Contracts:
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of January 22, 2005 (this
"Agreement"), is made by and among Monsanto Company, a Delaware corporation
("Parent"), Monsanto Sub, Inc., a Delaware corporation and wholly owned
subsidiary of Parent ("Merger Sub"), and Seminis, Inc., a Delaware corporation
(the "Company").
WHEREAS, the board of directors of the Company (the "Company Board"),
Parent and Merger Sub have determined that this Agreement and the merger of
Merger Sub with and into the Company, with the Company as the surviving
corporation, upon the terms and subject to the conditions set forth in this
Agreement (the "Merger") are advisable and in the best interests of their
respective corporations and stockholders and have approved this Agreement and
the Merger;
WHEREAS, as a condition and inducement to Parent's willingness to enter
into this Agreement and incurring the obligations set forth herein, Parent has
required the holders of all the outstanding shares of common stock, par value
$.01 per share, of the Company (the "Company Common Stock") to enter into
support agreements, of even date herewith (each, a "Support Agreement"),
pursuant to which, among other things, and subject to the terms and conditions
therein, each Person party to a Support Agreement agrees to vote, or cause to be
voted, all shares of Company Common Stock beneficially owned by such stockholder
in favor of the Merger;
WHEREAS, as additional conditions and inducements to Parent's
willingness to enter into this Agreement and incur the obligations set forth
herein, Parent has required (i) each of Alfonso Romo Garza, Bruno Ferrari, Mateo
Mazal, Bernardo Jimenez, Gaspar Alvarez, Jose Manuel Madero, Charles Edward
Green, Franco Campana and Jean Pierre Posa to enter into noncompetition and
nonsolicitation agreements of even date herewith (collectively, the "Non-Compete
Agreements") and (ii) each of Alfonso Romo Garza, Bernardo Jimenez and Mateo
Mazal to enter into a separation agreement of even date herewith with the
Company (the "Separation Agreements"), pursuant to which each of Alfonso Romo
Garza, Bernardo Jimenez and Mateo Mazal, respectively, has agreed with the
Company to terminate his employment as of the Closing Date; and
WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
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ARTICLE I.
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the
respective meanings set forth below:
"Affiliate" of a specified Person means a Person who, directly or
indirectly, through one or more intermediaries controls, is controlled by or is
under common control with such specified Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting shares, by
contract or otherwise.
"Agreement" shall have the meaning set forth in the preamble.
"Award Cancellation Time" means the time that is on the Closing Date
and immediately prior to the Effective Time.
"Award List" shall have the meaning set forth in Section 3.10(a).
"Benefit Plans" shall have the meaning set forth in Section 4.10(a).
"Business Day" shall mean any day, other than a Saturday, Sunday or
legal holiday on which banks are permitted to close in the City and State of New
York.
"Certificate" shall have the meaning set forth in Section 3.8(d).
"Certificate of Designation" means Certificate of Designation of
Preferences and Rights of Class C PIK Preferred Stock of Seminis, Inc. filed
with the Secretary of State of the State of Delaware on September 29, 2003.
"Certificate of Merger" shall have the meaning set forth in Section
3.2.
"Closing" shall have the meaning set forth in Section 3.2.
"Closing Date" shall have the meaning set forth in Section 3.2.
"Co-Investment Agreements" shall mean, collectively, that certain (i)
15% Co-Investment Rights Agreement, dated as of September 29, 2003, between the
Company and Marinet, (ii) Hurdle Co-Investment Rights Agreement, dated as of
September 29, 2003, between the Company and Marinet, (iii) Hurdle Co-Investment
Rights Agreement, dated as of September 29, 2003, between the Company and Fox
Paine Capital Fund II, L.P., (iv) Hurdle Co-Investment Rights Agreement, dated
as of September 29, 2003, between the Company and Fox Paine Capital Fund II
Co-Investors, L.P., (v) Hurdle Co-Investment Rights Agreement, dated as of
September 29, 2003, between the Company and the E and A `J' Trust, (vi) Hurdle
Co-Investment Rights Agreement, dated as of September 29, 2003, between the
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Company and FPC Investment GP, (vii) Hurdle Co-Investment Rights Agreement,
dated as of September 29, 2003, between the Company and FPSH Coinvestment Fund
I, LLC, (viii) Hurdle Co-Investment Rights Agreement, dated as of September 29,
2003, between the Company and FPSH Coinvestment Fund II, LLC, (ix) Hurdle
Co-Investment Rights Agreement, dated as of September 29, 2003, between the
Company and FPSH Coinvestment Fund III, LLC, (x) Hurdle Co-Investment Rights
Agreement, dated as of September 29, 2003, between the Company and FPSH
Coinvestment Fund IV, LLC and (xi) Hurdle Co-Investment Rights Agreement, dated
as of September 29, 2003, between the Company and FPSH Coinvestment Fund V, LLC.
"Co-Investment Rights" shall have the meaning set forth in Section
3.12(a).
"Co-Investment Rights Payment" shall have the meaning set forth in
Section 3.12(a).
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" shall have the meaning set forth in the preamble.
"Company 2004 10-K" shall have the meaning set forth in Section
4.15(a).
"Company Balance Sheet" means the audited consolidated balance sheet of
the Company for the period ended September 30, 2004, contained in the Company's
2004 10-K.
"Company Board" shall have the meaning set forth in the recitals.
"Company Common Stock" shall have the meaning set forth in the
recitals.
"Company Competing Transaction" means any recapitalization, merger,
consolidation or other business combination involving the Company, or direct or
indirect acquisition of shares of Company Common Stock representing 15% or more
of the voting power of the Company or any material portion of the assets (except
for acquisitions of assets in the ordinary course of business consistent with
past practice) of the Company and its Subsidiaries, or any combination of the
foregoing.
"Company Credit Agreement" means the Credit Agreement, dated as of
September 29, 2003, among Seminis Vegetable Seeds, Inc., as the borrower, the
Company as the parent guarantor, the financial institutions listed on Schedule
2.01 thereof, as lenders, Citicorp North America, Inc., as administrative agent
for the lenders, Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., Rabobank
International, New York Branch and CIBC World Markets Corp., as co-documentation
agents, Harris Trust and Savings Bank, as syndication agent and joint lead
arranger and Citigroup Global Markets Inc, as joint lead arranger, as amended by
Amendment No. 1 thereto dated as of January 15, 2004.
"Company Disclosure Schedule" means the schedule of disclosures
delivered by the Company to Parent and Merger Sub concurrent with the execution
of this Agreement.
"Company Employees" means any employee of the Company as of the Closing
Date.
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"Company Germplasm" means the germplasm used in the breeding or
research programs of the Company and its Subsidiaries.
"Company Indenture" means the Indenture, dated as of September 29,
2003, between Seminis Vegetable Seeds, Inc., the Guarantors named therein and
Wells Fargo Bank, National Association, as Trustee.
"Company Intellectual Property" means the intellectual property rights
used in the conduct of the business of the Company or its Subsidiaries,
including all patents and patent applications, plant variety protection
certificates and applications therefor, trademarks, trademark registrations and
applications, domain names, copyrights and copyright registrations and
applications, computer programs, technology, know-how, trade secrets,
proprietary processes, inventions, service marks, original works of authorship
and formulae, together with the goodwill associated with the foregoing.
"Company's Knowledge" means the actual knowledge, after reasonable
inquiry, of Bernardo Jimenez, Alfonso Romo Garza, Mateo Mazal, Bruno Ferrari, C.
Edward Green, Jose Manuel Madero, Gaspar Alvarez, Keith Redenbaugh, Oscar
Velasco, Franco Campana, Jean Pierre Posa, Juliet Ream, Bruno Rossolini, Dieter
Holtz, Patrick Turner, Steve Witt and, with respect to seedmen's claims only,
Pieter Vandenberg.
"Company Material Adverse Effect" means any event, change,
circumstance, effect or state of facts that is or is reasonably likely to be
materially adverse to (a) the business, results of operations, condition
(financial or otherwise), assets or liabilities of the Company and its
Subsidiaries, taken as a whole, or (b) the ability of the Company to consummate
the Merger, except to the extent that such adverse effect results from (i)
general economic conditions or changes therein, (ii) financial or securities
market fluctuations or conditions, (iii) changes in, or events or conditions
affecting, the industries or businesses in which the Company and its
Subsidiaries operate, (iv) the announcement of the transactions contemplated by
this Agreement, or (v) any actions that may be required pursuant to Section
6.6(a) or 9.7, which effect in the case of clauses (i), (ii) and (iii) does not
disproportionately affect the Company and its Subsidiaries in a material and
adverse manner.
"Company Notes" shall mean the $190,000,000 aggregate principal amount
of 10 1/4% Senior Subordinated Notes due 2013 and the $140,000,000 aggregate
principal amount of 10 1/4% Senior Subordinated Notes due 2013, the terms of
which are governed by the Company Indenture.
"Company Permits" shall have the meaning set forth in Section 4.9.
"Company Preferred Stock" shall mean the Class C PIK Preferred Stock of
the Company, par value $.01 per share.
"Company PVP Certificates" shall have the meaning set forth in Section
4.12(a).
"Company SEC Documents" shall have the meaning set forth in Section
4.4(a).
"Company Securities" shall have the meaning set forth in Section
4.2(a).
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"Company Stock Plans" shall have the meaning set forth in Section
3.10(a).
"Company Stockholder Approval" means the vote of a majority of the
voting power of the Company Common Stock for the adoption of this Agreement and
the Merger, or the obtainment of written consents of all of the Company
Stockholders in favor of adoption of this Agreement and the Merger.
"Confidentiality Agreement" shall have the meaning set forth in Section
6.5(a).
"Controlled Group Liability" shall have the meaning set forth in
Section 4.10(f).
"CVR Agreement" shall mean a contingent value right agreement, between
Marinet and the Parent in the form of Exhibit A.
"CVR Option Notice" shall have the meaning set forth in Section
3.12(b).
"Desarrollo" means Desarrollo Consolidado de Negocios, S.A. de C.V.
"DGCL" means the General Corporation Law of the State of Delaware.
"Dissenting Shares" shall have the meaning set forth in Section 3.9.
"Effective Time" shall have the meaning set forth in Section 3.2.
"Environmental Claim" shall have the meaning set forth in Section
4.17(a).
"Environmental Laws" means all applicable statutes, laws, ordinances,
codes, common law, licenses, permits, rules, regulations, orders, demands,
approvals, authorizations and similar items of any Governmental Entity relating
to pollution or Hazardous Substances or protection of human health or the
environment (including ambient air, surface water, ground water, land surface or
subsurface strata) or emissions, discharges, releases, disposal or handling of
any pollutants or Hazardous Substances.
"ERISA" shall have the meaning set forth in Section 4.10(a).
"ERISA Affiliate" shall have the meaning set forth in Section 4.10(c).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Existing Policy" shall have the meaning set forth in Section 6.8(c).
"Financial Statements" shall have the meaning set forth in Section
4.4(a).
"GAAP" means U.S. generally accepted accounting principles.
"Governmental Entity" shall have the meaning set forth in Section 4.6.
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"Hazardous Substance" means any substance presently listed, defined,
designated or classified as hazardous, toxic, radioactive or dangerous, or
otherwise regulated, under any Environmental Law, including any toxic waste,
pollutant, contaminant, hazardous substance, toxic substance, hazardous waste,
special waste, industrial substance or petroleum or any derivative or byproduct
thereof, radon, radioactive material, asbestos, or asbestos containing material,
urea formaldehyde, foam insulation or polychlorinated biphenyls, lead or
lead-based paints or materials.
"HMO" shall have the meaning set forth in Section 4.10(c).
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Indebtedness" of any Person means (a) all obligations of such Person
for borrowed money or for the deferred purchase price of property or services
(other than current trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices, and excluding
ordinary operating leases), (b) any other obligations of such Person that are
evidenced by a note, bond, debenture or similar instrument, (c) all obligations
under conditional sale or other title retention agreements relating to property
purchased, (d) capital lease or sale-leaseback obligations, (e) all liabilities
secured by any Lien on any property (other than ordinary operating leases), and
(f) any guarantee or assumption of any of the foregoing in clauses (a) through
(e) above or guaranty of minimum equity or capital or any make-whole or similar
obligation or any other guarantee of indebtedness of a third party.
"Indemnified Parties" shall have the meaning set forth in Section
6.8(b).
"Insurance Policies" shall have the meaning set forth in Section 4.16.
"IRS" means the U.S. Internal Revenue Service.
"Key Employee" means any Chief Executive Officer, President, Executive
Vice President or Senior Vice President or other employee of the Company or its
Subsidiaries whose annual base salary (excluding bonuses and other non-salary
compensation) exceeds $100,000.
"Leased Real Property" shall have the meaning set forth in Section
4.18(a).
"Lien" means, with respect to any asset (including any security), any
security interests, liens, claims, charges, title defects, deficiencies or
exceptions (including, with respect to Real Property Leases, subleases,
assignments, licenses or other agreements granting to any third party any
interest in a Real Property Lease or any right to the use or occupancy of any
Leased Real Property), mortgages, pledges, easements, encroachments,
restrictions on use, rights-of-way, rights of first refusal, options,
conditional sales or other title retention agreements, covenants, conditions or
other similar restrictions (including restrictions on transfer) or other
encumbrances of any nature whatsoever in respect of such asset.
"Management Agreement" shall mean that certain Management Fee Letter
Agreement, dated as of May 30, 2003, between Seminis Merger Corp., Fox Paine &
Company, LLC and Desarrollo, as amended.
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"Marinet" means Marinet Investments, LLC.
"Material Contracts" shall have the meaning set forth in Section
4.15(a).
"Merger" shall have the meaning set forth in the recitals.
"Merger Approvals" means any approval, consent, order, exemption or
waiver under the HSR Act, and similar rules and regulations of foreign
Governmental Entities relating to competition and merger control matters.
"Merger Consideration" shall have the meaning set forth in Section
3.8(d).
"Merger Sub" shall have the meaning set forth in the preamble.
"MS Common Stock" means shares of common stock, par value $.01 per
share, of Merger Sub.
"New Company Common Stock" shall mean the shares of common stock of the
Surviving Corporation, par value $.01 per share.
"New Plans" shall have the meaning set forth in Section 6.12(b).
"NOL Carryforwards" shall have the meaning specified in Section 4.13.
"Non-Compete Agreements" shall have the meaning set forth in the
recitals.
"Old Plans" shall have the meaning set forth in Section 6.12(b)(i).
"Outside Date" shall mean July 31, 2005.
"Owned Real Property" shall have the meaning set forth in Section
4.18(a).
"Parent" shall have the meaning set forth in the preamble.
"Parent Disclosure Schedule" means the schedule of disclosures
delivered by Parent to the Company concurrent with the execution of this
Agreement.
"Parent Material Adverse Effect" means any event, change, circumstance,
effect or state of facts that is or is reasonably expected to be materially
adverse to the ability of Parent or Merger Sub to consummate the Merger.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Per Share Amount" shall mean $10.52.
"Permitted Exceptions" shall have the meaning set forth in Section
4.20(e).
"Permitted Liens" means (a) growers', mechanics', carriers', workers',
repairers', materialmen's, warehousemen's, and other similar Liens arising in
the ordinary course of the
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Company's business and either (i) for sums not yet due and payable or (ii) such
Liens as are less than $100,000 in amount and are being contested in good faith
and by appropriate proceedings, (b) Liens under the Company Credit Agreement,
(c) Liens for current Taxes not yet due or payable or being contested in good
faith or for supplemental Taxes for which the Company has not received a written
notice of assessment, and (d) any other covenants, conditions, restrictions,
reservations, rights and non-monetary Liens incurred or suffered in the ordinary
course of business and that (i) do not materially detract from the current use
of the applicable Real Property and (ii) would not, individually or in the
aggregate, have a Company Material Adverse Effect.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other entity or
"group" (as defined in the Exchange Act).
"Proxy Statement" shall have the meaning set forth in Section 6.2.
"Real Property" shall have the meaning set forth in Section 4.18(a).
"Real Property Lease" shall mean any contract or agreement to which the
Company or any of its Subsidiaries is a party relating to the lease of real
property used by the Company or its Subsidiaries requiring annual payments in
excess of (or reasonably expected to be in excess of) $100,000.
"Record Date" shall mean the date on which holders of Company Common
Stock on such date, as reflected on the Company's (or its transfer agent's)
books and records, shall be entitled to vote at the Stockholders Meeting, if
held, which date shall be determined in accordance with the Company's Bylaws and
other applicable requirements.
"Related Agreements" shall mean the Support Agreement, the Non-Compete
Agreements and the Separation Agreements.
"Related Transactions" shall mean the transactions contemplated by the
Related Agreements.
"Required Approval" shall have the meaning set forth in Section
7.1(b)(iii).
"Restricted Shares" means shares of restricted stock granted under any
Company Stock Plan.
"RSU" shall have the meaning set forth in Section 3.10(a).
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Separation Agreements" shall have the meaning set forth in the
recitals.
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"Stock Option" shall have the meaning set forth in Section 3.10(a).
"Stockholders' Agreement" shall mean the Amended and Restated
Stockholders' Agreement, dated as of September 29, 2003, by and among Seminis,
Inc. and the investors listed on the signature pages thereto.
"Stockholders Meeting" shall have the meaning set forth in Section 6.1.
"Subsidiary" means, with respect to any Person, any other Person,
whether incorporated or unincorporated or domestic or foreign to the United
States, of which (a) such first Person or any other Subsidiary of such first
Person is a general partner (excluding such partnerships where such first Person
or any Subsidiary of such first Person does not have a majority of the voting
interest in such partnership) or (b) 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 corporation or other organization is, directly or indirectly, owned or
controlled by such first Person or by any one or more of its Subsidiaries, or by
such first Person and one or more of its Subsidiaries.
"Support Agreement" shall have the meaning set forth in the recitals.
"Surviving Corporation" shall have the meaning set forth in Section
3.1.
"Tail Period" shall have the meaning set forth in Section 6.8(c).
"Tax Returns" means all reports, returns, information returns,
statements, declarations and certifications required to be filed with respect to
Taxes.
"Taxes" means all U.S. or non-U.S. federal, national, state or local
taxes, assessments, levies or other governmental charges in the nature of taxes,
including all income, franchise, gross receipt, custom duties, withholding,
employment, unemployment insurance, social security, sales, use, excise, real
and personal property, stamp, transfer, value added taxes (VAT) and workers'
compensation taxes, and other taxes, duties or assessments of any nature
whatsoever, together with all interest, penalties and additions payable with
respect thereto.
"Transmittal Documents" shall have the meaning set forth in Section
3.11(a).
"WARN Act" shall have the meaning set forth in Section 4.11(b).
"Warrant Agreements" shall have the meaning set forth in Section
4.2(a).
"Warrants" shall have the meaning set forth in Section 3.13.
ARTICLE II.
RESTRUCTURING OF PREFERRED STOCK
SECTION 2.1. Company Preferred Stock. Upon Closing, Parent shall cause
the Company to provide to the holders of Company Preferred Stock a Change of
Control Offer (as
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defined in the Certificate of Designation) as required by Part 7 of the
Certificate of Designation and, if necessary, will provide to the Company the
funds required to redeem the Preferred Stock.
ARTICLE III.
THE MERGER
SECTION 3.1. The Merger. Subject to the conditions of this Agreement
and in accordance with the DGCL, the parties hereto shall consummate the Merger
pursuant to which (a) Merger Sub shall merge with and into the Company and the
separate corporate existence of Merger Sub shall thereupon cease, (b) the
Company shall be the surviving corporation in the Merger (sometimes referred to
as the "Surviving Corporation") and shall continue to be governed by the laws of
the State of Delaware, and (c) the corporate existence of the Company, with all
of its rights, privileges, immunities, powers and franchises, shall continue
unaffected by the Merger.
SECTION 3.2. Effective Time. As soon as practicable after the
satisfaction or waiver (to the extent permitted by applicable law) of the
conditions set forth in Article VII, the parties hereto shall cause a
certificate of merger substantially in the form attached hereto as Exhibit B
(the "Certificate of Merger") to be executed and filed on the Closing Date (or
on such other date as Parent and the Company may agree) with the Secretary of
State of the State of Delaware in such form as required by, and executed in
accordance with, the relevant provisions of the DGCL. The closing of the Merger
(the "Closing") will take place (a) at the offices of Willkie Farr & Gallagher
LLP, 787 Seventh Avenue, New York, New York, at 10:00 a.m. New York City time as
soon as reasonably practicable (but in any event no later than the third
Business Day) after satisfaction or waiver (to the extent permitted by
applicable law) of the conditions set forth in Article VII (other than those
conditions that are to be satisfied at the Closing, but subject to the
satisfaction or waiver (to the extent permitted by applicable law) of such other
conditions), or (b) at such other place or time and/or such other date as the
parties may agree. The date on which the Closing occurs is referred to in this
Agreement as the "Closing Date." The Merger shall become effective at such time
as the Certificate of Merger is duly filed with the Secretary of State of the
State of Delaware or at such later date and time as the parties shall agree and
as shall be specified in the Certificate of Merger (the time the Merger becomes
effective, the "Effective Time").
SECTION 3.3. Effects of the Merger. The Merger shall have the effects
as set forth in the applicable provisions of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all the
properties, rights, privileges, powers and franchises of the Company and Merger
Sub shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Company and Merger Sub shall become the debts, liabilities and
duties of the Surviving Corporation.
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SECTION 3.4. Certificate of Incorporation and Bylaws.
(a) The certificate of incorporation of the Company in effect
immediately prior to the Effective Time shall be the certificate of
incorporation of the Surviving Corporation until amended in accordance with its
terms and applicable law.
(b) The bylaws of Merger Sub in effect immediately prior to
the Effective Time, in the form attached hereto as Exhibit C, shall be the
bylaws of the Surviving Corporation until amended in accordance with their terms
and applicable law.
SECTION 3.5. Directors. The directors of Merger Sub immediately prior
to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the certificate of
incorporation and bylaws of the Surviving Corporation until such director's
successor is duly elected or appointed and qualified.
SECTION 3.6. Officers. Subject to the terms of the Separation
Agreements, the officers of the Company immediately prior to the Effective Time
shall be the initial officers of the Surviving Corporation, each to hold office
in accordance with the certificate of incorporation and bylaws of the Surviving
Corporation until such officer's successor is duly elected or appointed and
qualified.
SECTION 3.7. Subsequent Actions. If, at any time after the Effective
Time, the Surviving Corporation shall determine in good faith or be advised that
any deeds, bills of sale, assignments, assurances or any other actions or things
are necessary or desirable to vest, perfect or confirm of record or otherwise in
the Surviving Corporation its right, title or interest in, to or under any of
the rights, properties or assets of either of the Company or Merger Sub acquired
or to be acquired by the Surviving Corporation as a result of, or in connection
with the Merger or otherwise to carry out this Agreement, the officers and
directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of either the Company or Merger Sub, all such
deeds, bills of sale, assignments and assurances and to take and do, in the name
and on behalf of each of such corporations or otherwise, all such other actions
and things as may be necessary or desirable to vest, perfect or confirm any and
all right, title and interest in, to and under such rights, properties or assets
in the Surviving Corporation or otherwise to carry out this Agreement.
SECTION 3.8. Effect on the Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the Company, Parent,
Merger Sub or any holder of any shares of Company Common Stock, Company
Preferred Stock or any shares of capital stock of Merger Sub:
(a) Each share of MS Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into one share of New
Company Common Stock following the Merger.
(b) Each share of Company Common Stock, if any, that is owned
by Parent or Merger Sub immediately prior to the Effective Time shall
automatically be canceled and retired and shall cease to exist, and no cash,
Company Common Stock or other consideration shall be delivered or deliverable in
exchange therefor.
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(c) Each share of Company Common Stock that is owned by or
held in the treasury of the Company immediately prior to the Effective Time
shall automatically be canceled and retired and shall cease to exist, and no
cash, Company Common Stock or other consideration, including the Merger
Consideration, shall be delivered or deliverable in exchange therefor.
(d) Shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than any shares to be canceled
pursuant to Sections 3.8(b) and 3.8(c) and any Dissenting Shares) held by each
stockholder of the Company shall be converted into the right to receive an
amount in cash (the "Merger Consideration") equal to the product of (A) the
number of shares of Company Common Stock owned by such stockholder immediately
prior to the Effective Time, and (B) the Per Share Amount. The Merger
Consideration shall be payable to the holder of shares of Company Common Stock,
without interest thereon, upon the surrender of the certificate or certificates
formerly representing such shares of Company Common Stock (each, a
"Certificate") in the manner provided in Section 3.11, less any required
withholding of U.S. federal, state, local or foreign Taxes. From and after the
Effective Time, all such shares of Company Common Stock so converted into the
Merger Consideration shall no longer be outstanding and shall be deemed to be
canceled and retired and shall cease to exist, and each holder of a Certificate
or Certificates shall cease to have any rights with respect thereto, except the
right to receive the Merger Consideration therefor upon the surrender of such
Certificate or Certificates in accordance with Section 3.11 (or, with respect to
Dissenting Shares, as provided in Section 3.9).
(e) Each share of Company Preferred Stock issued and
outstanding or held by the Company as treasury stock immediately prior to the
Effective Time shall remain issued and outstanding or held as treasury stock, as
the case may be, and shall be unaffected by the Merger.
SECTION 3.9. Dissenting Shares. Anything in this Agreement to the
contrary notwithstanding, each share of Company Common Stock or Company
Preferred Stock outstanding immediately prior to the Effective Time and held by
a holder who has not voted in favor of the Merger or consented thereto in
writing and who has demanded appraisal for such share of Company Common Stock or
Company Preferred Stock in accordance with Section 262 of the DGCL, if such
Section 262 of the DGCL provides for appraisal rights for such shares of Company
Common Stock or Company Preferred Stock in the Merger ("Dissenting Shares"),
shall not, in the case of the Company Common Stock, be converted into or be
exchangeable for the right to receive the Merger Consideration unless and until
such holder of Company Common Stock as the case may be, fails to perfect or
withdraws or otherwise loses his right to appraisal and payment under the DGCL
(and, in the case of the Preferred Stock, shall be treated in accordance with
the DGCL). If, after the Effective Time, any such holder fails to perfect or
withdraws or loses his right to appraisal, such Dissenting Shares shall: (w) in
the case of Company Common Stock, thereupon be treated as if such shares had
been converted as of the Effective Time into the right to receive the Merger
Consideration, if any, to which such holder is entitled, without interest or
dividends thereon; and (x) in the case of Company Preferred Stock, be treated in
accordance with the DGCL. The Company shall give Parent (y) prompt notice of any
demands received by the Company for appraisal of shares of Company Common Stock
or Company Preferred Stock, if applicable, attempted written withdrawals of such
demands, and any other instruments served pursuant to the DGCL and received by
the Company relating to
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stockholders' rights to appraisal with respect to the Merger; and (z) the
opportunity to direct all negotiations and proceedings with respect to any
exercise of such appraisal rights under the DGCL. The Company shall not, except
with the prior written consent of Parent, voluntarily make any payment with
respect to any demands for payment of fair value for capital stock of the
Company, offer to settle or settle any such demands or approve any withdrawal of
any such demands.
SECTION 3.10. List of Other Equity Awards; Treatment of Other Equity
Awards.
(a) Section 3.10(a) of the Company Disclosure Schedule
contains a true and complete list (the "Award List") of each option to purchase
shares of Company Common Stock (a "Stock Option") and each restricted stock unit
( "RSU") granted under each employee and director stock incentive or
compensation plan, agreement or arrangement (the "Company Stock Plans")
outstanding as of the date hereof (along with the exercise prices thereof, if
applicable).
(b) At the Award Cancellation Time, each then-outstanding
Stock Option and RSU (whether vested or unvested), shall be canceled and, in
consideration of such cancellation, the Company shall pay or cause to be paid to
the holder on the first Business Day following the Award Cancellation Time, in
full satisfaction of such Stock Option or RSU, as applicable, less any
applicable withholding tax, an amount in cash equal to the product of (i) (x) in
the case of any Stock Option, the excess of the Per Share Amount over the
exercise price per share of such unexercised Stock Option, if any, or (y) in the
case of any RSU, the Per Share Amount and (ii) the number of shares of Company
Common Stock subject to such Stock Option, or RSU, as applicable.
(c) The Company shall (i) take all actions reasonably
necessary to cause the actions and effects specified in Section 3.10(b) to
occur, (ii) take all actions reasonably necessary, with Parent's assistance, to
ensure that, effective as of the Award Cancellation Time, no holder of Stock
Options or RSU will have any right to receive any shares of capital stock of the
Company or, if applicable, the Surviving Corporation, upon exercise of any Stock
Option or settlement of any RSU, as applicable, or any other event, and (iii)
provide its reasonable cooperation to Parent in connection with the actions
contemplated by this Section 3.10.
SECTION 3.11. Payment for Shares.
(a) As soon as reasonably practicable after the date hereof
but in no event later than the earlier of (i) 30 days after the date hereof and
(ii) five days prior to the Closing Date, Parent shall mail by overnight courier
to each record holder of an outstanding Certificate(s), whose shares of Company
Common Stock are to be converted pursuant to Section 3.8(d) into the right to
receive the Merger Consideration (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificate(s) shall pass, only upon proper delivery of the Certificate(s) to
Parent and shall be in such form and have such other provisions not inconsistent
with this Agreement as Parent may reasonably designate), and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for payment
of the Merger Consideration (together, the "Transmittal Documents"). Upon
surrender of a Certificate(s) for cancellation to Parent or to such other agent
or agents as may be appointed by Parent, together with such letter of
transmittal and any other required documents, duly executed,
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the holder of such Certificate(s) shall be entitled to receive in exchange
therefor as of the Effective Time the Merger Consideration in respect of all
shares of Company Common Stock formerly represented by such surrendered
Certificate(s), without any interest thereon, pursuant to Section 3.8(d). The
Certificate(s) so surrendered shall forthwith be canceled. If payment of the
Merger Consideration is to be made to a Person other than the Person in whose
name the surrendered Certificate(s) is registered, it shall be a condition of
payment that the Certificate(s) so surrendered shall be properly endorsed or
shall otherwise be in proper form for transfer, that the signatures on the
Certificate(s) or any related stock power shall be properly guaranteed and that
the Person requesting such payment shall have established to the satisfaction of
Parent that any transfer and other Taxes required by reason of the payment of
the Merger Consideration to a Person other than the registered holder of the
Certificate(s) surrendered have been paid or are not applicable. Until
surrendered in accordance with the provisions of and as contemplated by this
Section 3.11, any Certificate(s) (other than Certificate(s) representing shares
of Company Common Stock subject to Sections 3.8(b) and (c) and other than
Dissenting Shares) shall be deemed, at any time after the Effective Time, to
represent only the right to receive the Merger Consideration in cash without
interest as contemplated by this Section 3.11. Upon the surrender of a
Certificate(s) in accordance with the terms and instructions contained in the
Transmittal Documents, Parent shall pay to the holder of such Certificate(s) in
exchange therefor cash in an amount equal to the Merger Consideration (other
than Certificate(s) representing shares of Company Common Stock subject to
Sections 3.8(b) and (c) and other than Dissenting Shares) by wire transfer of
immediately available funds to the account(s) designated by such holder on or
before (i) the Closing Date, if such holder surrendered such documentation to
the Parent on or prior to 12:00p.m., New York City time, on the Business Day
preceding the Closing Date, or (ii) the second Business Day after such delivery,
if such delivery is made after such time.
(b) At the Effective Time, the stock transfer books of the
Company shall be closed and there shall not be any further registration of
transfers of any shares of capital stock thereafter on the records of the
Company. If, after the Effective Time, a Certificate (other than those subject
to Sections 3.8(b) and (c)) is presented to the Surviving Corporation, it shall
be canceled and exchanged for the consideration provided for, and in accordance
with the procedures set forth, in this Section 3.11. No interest shall accrue or
be paid on any cash payable upon the surrender of a Certificate.
(c) From and after the Effective Time, the holders of
Certificates shall cease to have any rights with respect to shares of Company
Common Stock represented by such Certificates except as otherwise provided
herein or by applicable law.
(d) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed, Parent shall pay or cause to
be paid in exchange for such lost, stolen or destroyed Certificate the relevant
portion of the Merger Consideration in accordance with Section 3.8(d) for shares
of Company Common Stock represented thereby. When authorizing such payment of
any portion of the Merger Consideration in exchange therefor, Parent may, in its
discretion and as a condition precedent to the payment thereof, require the
owner of such lost, stolen or destroyed Certificate to give the Surviving
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Surviving Corporation with respect to the
Certificate alleged to have been lost, stolen or destroyed.
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(e) Promptly following the date that is one year after the
Effective Time, holders of Certificates shall be entitled to look to the
Surviving Corporation (subject to abandoned property, escheat or similar laws)
only as a general creditor thereof with respect to any portion of the Merger
Consideration payable upon due surrender of their Certificates, without any
interest thereon.
(f) The Merger Consideration paid in the Merger shall be net
to the holder of shares of Company Common Stock in cash, subject to reduction
only for any applicable required federal, state, local or foreign withholding
Taxes. To the extent that amounts are so withheld, such amounts shall be treated
for all purposes of this Agreement as having been paid to the Person in respect
of which such withholding was made.
(g) Anything to the contrary in this Section 3.11
notwithstanding, to the fullest extent permitted by law, neither Parent nor the
Surviving Corporation shall be liable to any holder of a Certificate for any
amount properly delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If Certificates are not surrendered
prior to two years after the Effective Time, unclaimed funds payable with
respect to such Certificates shall, to the extent permitted by applicable law,
become the property of Parent, free and clear of all claims or interest of any
Person previously entitled thereto.
SECTION 3.12. Co-Investment Rights.
(a) Subject to the terms of Section 3.12(b), provided that the
holder of co-investment rights set forth in any of the Co-Investment Agreements
(the "Co-Investment Rights") has executed the Support Agreement, notwithstanding
anything to the contrary set forth in the Co-Investment Agreement applicable to
such Co-Investment Rights, on the Closing Date, such Co-Investment Rights will
be terminated, and, in consideration of such termination, the Company shall pay
to the holder of such Co-Investment Rights as of the Effective Time, in full
satisfaction of its Co-Investment Rights, less any applicable withholding tax,
an amount in cash (a "Co-Investment Rights Payment") equal to the product of (i)
the excess of the Per Share Amount over $3.40 and (ii) the number of shares of
Company Common Stock that each holder of Co-Investment Rights is entitled to
receive pursuant to its Co-Investment Rights as set forth in Section 3.12(a) of
the Company Disclosure Schedule.
(b) Notwithstanding anything herein to the contrary, Marinet
may, no later than five (5) Business Days prior to the Closing Date, deliver to
Parent a notice informing Parent that Marinet elects to reduce the Co-Investment
Rights Payment it would otherwise be entitled to receive pursuant to Section
3.12(a) in exchange for the contingent value right described in the CVR
Agreement (the "CVR Option Notice"). In the event Marinet delivers to Parent a
CVR Option Notice in accordance with this Section 3.12(b), (i) the Co-Investment
Rights Payment otherwise payable to Marinet pursuant to Section 3.12(a) will be
reduced by $50,000,000 and (ii) Parent and Marinet will execute and deliver the
CVR Agreement at the Closing.
SECTION 3.13. Warrant Agreements. Provided that the holder of
outstanding warrants to purchase Company Common Stock (the "Warrants") granted
under any of the Warrant Agreements has executed the Support Agreement,
notwithstanding anything to the contrary set forth in the Warrant Agreement
applicable to such Warrants, upon consummation of the Merger,
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such Warrants, whether or not then exercisable or vested, shall be acquired by
the Company for cancellation in consideration of payment to the holder of such
Warrants of an amount in respect thereof equal to the product of (A) the excess,
if any, of the Per Share Amount over the per share exercise price thereof and
(B) the number of shares of Company Common Stock subject thereto (such payment
to be net of applicable required withholding taxes) as set forth in Section 3.13
of the Company Disclosure Schedule.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company 2004 10-K or in the Company
Disclosure Schedule (it being understood that any matter set forth in any
section of the Company Disclosure Schedule shall be deemed disclosed with
respect to any other section of the Company Disclosure Schedule to the extent
such matter is disclosed in a way as to make its relevance to the information
called for by such other section reasonably clear on its face), the Company
hereby represents and warrants to Parent and Merger Sub as follows:
SECTION 4.1. Organization and Qualification; Subsidiaries.
(a) Each of the Company and its Subsidiaries is a corporation
duly organized, validly existing and, if applicable, in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate or
other power and authority and all necessary governmental approvals to own, lease
and operate its properties and to carry on its businesses as now being
conducted, except where the failure to be in good standing or to have such
power, authority and governmental approvals, would not, individually or in the
aggregate, have a Company Material Adverse Effect. The Company has heretofore
delivered to Parent accurate and complete copies of the certificate of
incorporation and bylaws, as currently in effect, of the Company. Section 4.1(a)
of the Company Disclosure Schedule sets forth a complete list of the Company's
Subsidiaries.
(b) Each of the Company and its Subsidiaries is duly qualified
or licensed and, if applicable, in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification or licensing necessary,
except in such jurisdictions where the failure to be so duly qualified or
licensed and in good standing would not, individually or in the aggregate, have
a Company Material Adverse Effect.
(c) The Company does not own, directly or indirectly, and has
not entered into any agreement to acquire any equity in (other than equity of
its Subsidiaries) or debt of (other than debt of its Subsidiaries and other than
short-term investments of the Company's working capital in high-grade commercial
paper or similar high-grade, short-term instruments) or similar interest, or
assets operated as a business of, any Person.
SECTION 4.2. Capitalization of the Company and its Subsidiaries.
(a) The authorized capital stock of the Company consists of:
(i) 200,000,000 shares of Company Common Stock, and (ii) 5,000,000 shares of
preferred stock of the Company,
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par value $.01 per share, 400,000 shares of which are designated as shares of
Company Preferred Stock. As of the date hereof, (i) 64,333,205 shares of Company
Common Stock were issued and outstanding and (ii) 50,000 shares of Company
Preferred Stock were issued and outstanding. All of the outstanding shares of
Company Common Stock and Company Preferred Stock have been validly issued, and
are fully paid, nonassessable and free of preemptive rights. As of the date
hereof, a total of (i) 4,937,802 shares of Company Common Stock were reserved
for issuance pursuant to outstanding Stock Options and RSUs, and no other shares
of Company Common Stock are subject to issuance pursuant to Stock Options or any
other equity based awards, (ii) 3,873,108 shares of Company Common Stock were
reserved for issuance upon the exercise of currently outstanding warrants issued
under the warrant agreements listed in Section 4.2(a) of the Company Disclosure
Schedule (the "Warrant Agreements") and (iii) 32,664,256 shares of Company
Common Stock were reserved for issuance upon the exercise of Co-Investment
Rights. Set forth in Section 4.2(a) of the Company Disclosure Schedule is a
complete and accurate list of (i) the Company Stock Plans and the number of
shares of Company Common Stock reserved for issuance pursuant to Stock Options
outstanding as of the date hereof under each such Company Stock Plan, and no
other shares of Company Common Stock are subject to issuance pursuant to such
Company Stock Plans, (ii) all warrant agreements to acquire capital stock of the
Company and the number of shares of Company Common Stock reserved for issuance
pursuant to such warrant agreements, and no other shares of capital stock of the
Company are subject to issuance pursuant to such warrant agreements and (iii)
all Co-Investment Agreements to acquire capital stock of the Company and the
number of shares of Company Common Stock reserved for issuance pursuant to such
Co-Investment Agreements, and no other shares of capital stock of the Company
are subject to issuance pursuant to such Co-Investment Agreements. Since January
19, 2005, no shares of capital stock of the Company have been issued other than
pursuant to Stock Options set forth on the Award List, Warrant Agreements or
Co-Investment Agreements existing as of date hereof, and since January 19, 2005,
no Stock Options, Restricted Shares, Warrants or Co-Investment Rights have been
granted. Except as set forth above or in Section 4.2(a) of the Company
Disclosure Schedule, there are no outstanding (i) shares of capital stock
(including Restricted Shares) or other voting securities of the Company, (ii)
securities of the Company or any of its Subsidiaries convertible into or
exchangeable for shares of capital stock or voting securities of the Company,
(iii) options, warrants or other rights to acquire from the Company or any of
its Subsidiaries, or obligations of the Company or any of its Subsidiaries to
issue or sell, any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of the Company, or
(iv) equity equivalents, interests in the ownership or earnings of the Company
or other similar rights (collectively, "Company Securities"). Other than as
contemplated by this Agreement, Stockholders' Agreement or employment agreements
set forth in Section 4.10(a) of the Company Disclosure Schedule, there are no
outstanding obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any Company Securities.
(b) All of the outstanding capital stock of, or other
ownership interests in, each Subsidiary of the Company is owned by the Company,
directly or indirectly, free and clear of any Lien or any other limitation or
restriction (including any restriction on the right to vote or sell the same,
except as may be provided as a matter of law). All such shares have been validly
issued, fully paid and nonassessable, and have been issued free of preemptive
rights. There are no outstanding securities of the Company or any of its
Subsidiaries convertible into or exchangeable for, no options or other rights to
acquire from the Company or any of its
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Subsidiaries, and no other contract, understanding, arrangement or obligation
(whether or not contingent) providing for the issuance or sale, directly or
indirectly, of, any capital stock or other ownership interests in, or any other
securities of, any Subsidiary of the Company. There are no outstanding equity
equivalents, interests in the ownership or earnings or similar rights of any
Subsidiary of the Company. There are no contractual obligations of the Company
or any of its Subsidiaries to repurchase, redeem or otherwise acquire any
outstanding shares of capital stock or other ownership interests in any
Subsidiary of the Company, other than as contemplated by this Agreement and the
Stockholders' Agreement.
(c) No class of equity securities of the Company or any of its
Subsidiaries is registered or required to be registered under the Exchange Act.
No Subsidiary of the Company owns any capital stock in the Company.
(d) Other than the Support Agreements and the Stockholders'
Agreement, there are no voting trusts or other agreements or understandings to
which the Company or any of its Subsidiaries or to the Company's Knowledge, any
of the Company's stockholders, is a party with respect to the voting of the
capital stock of the Company or any of its Subsidiaries.
(e) Other than with respect to the Indebtedness set forth in
Section 4.2(e) of the Company Disclosure Schedule, there is no Indebtedness of
the Company or any of its Subsidiaries existing that contains any material
restriction upon, or imposes any material penalty with respect to (i) the
prepayment of such Indebtedness, (ii) the incurrence of Indebtedness by the
Company or its Subsidiaries, respectively, or (iii) the ability of the Company
or its Subsidiaries to grant any Liens on its properties or assets.
SECTION 4.3. Authority Relative to this Agreement.
(a) The Company has all the necessary corporate power and
authority to execute and deliver this Agreement and, subject to obtaining
Company Stockholder Approval, to consummate the transactions contemplated hereby
in accordance with the terms hereof. The execution, delivery and performance of
this Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action, and, except for obtaining the Company Stockholder Approval, no
other corporate action or corporate proceeding on the part of the Company is
necessary to authorize the execution and delivery by the Company of this
Agreement and the consummation by it of the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by the Company
and, assuming due and valid authorization, execution and delivery by Parent and
Merger Sub, constitutes a valid, legal and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except that such
enforcement may be subject to (i) any bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the effect of general principles
of equity (regardless of whether enforceability is considered in a proceeding of
law or equity).
(b) The Company Board, at a meeting thereof duly called and
held prior to the date hereof (i) determined that this Agreement, the Related
Agreements to which it is a party, the Merger and the Related Transactions are
in the best interests of the Company and its
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stockholders, (ii) approved and declared advisable this Agreement and the
Merger, and (iii) resolved to recommend that the Company's stockholders adopt
this Agreement and the Merger.
SECTION 4.4. SEC Reports; Financial Statements.
(a) Since September 29, 2003, the Company has filed with the
SEC all forms, reports, schedules, statements and other documents required to be
filed by it under the Securities Act and the Exchange Act (any such documents
filed since September 29, 2003 and prior to the Closing Date collectively,
including all exhibits and schedules thereto and documents incorporated by
reference therein, the "Company SEC Documents"). The Company SEC Documents,
including any financial statements or schedules included therein, at the time
filed, or, in the case of registration statements, on their respective effective
dates, (i) complied in all material respects with the applicable requirements of
the Securities Act and the Exchange Act, as the case may be and (ii) did not at
the time filed (or, in the case of registration statements, at the time of
effectiveness) contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. No Subsidiary of the Company is required to file any form,
report or other document with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. The financial statements included in the Company SEC Documents
(the "Financial Statements") (i) have been prepared from, and are in accordance
with, the books and records of the Company and its Subsidiaries, (ii) complied
on the date of filing and effectiveness thereof in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto on the date of filing and effectiveness thereof,
(iii) have been prepared in accordance with GAAP as in effect as of the dates of
such financial statements applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto and, in the case of
unaudited statements, as permitted by the rules and regulations of the SEC
during the periods involved), and (iv) fairly present in all material respects
in accordance with GAAP the consolidated financial position and the consolidated
results of operations and cash flows (and changes in financial position, if any)
of the Company and its Subsidiaries as of the times and for the periods referred
to therein, except that any Financial Statements that are unaudited, interim
financial statements were or are subject to normal and recurring year end
adjustments which were not and are not expected, individually or in the
aggregate, to be material in amount.
(b) Except as otherwise available via the SEC's Electronic
Data Gathering, Analysis, and Retrieval (EDGAR) service, the Company has
heretofore made available to Parent, in the form filed with the SEC (including
any amendments thereto), (i) its Annual Reports on Form 10-K for its most
recently completed fiscal year and (ii) all other reports (other than Quarterly
Reports on Form 10-Q) or registration statements filed by the Company with the
SEC since September 29, 2003.
SECTION 4.5. Proxy Statement. In the event a Stockholders Meeting is
held, none of the information included in the Proxy Statement will, at the time
mailed to the Company's stockholders or at the time of the Stockholders Meeting
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which such statements are made, not
misleading, except that no representation is made by the Company with respect to
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statements made in or omitted from the Proxy Statement relating to Parent or its
Affiliates based on information supplied by Parent or its Affiliates for
inclusion or incorporation by reference in the Proxy Statement. The Proxy
Statement will comply as to form in all material respects with the requirements
of the DGCL.
SECTION 4.6. Consents and Approvals, No Violations. No filing with or
notice to, and no permit, authorization, consent or approval of, any federal,
state, local or foreign court or tribunal or administrative, governmental,
arbitral or regulatory body, agency or authority (each, a "Governmental
Entity"), is required on the part of the Company or any of its Subsidiaries for
the execution, delivery and performance by the Company of this Agreement or the
Related Agreements or the consummation by the Company of the transactions
contemplated hereby or thereby, except (a) pursuant to the applicable
requirements of the Securities Act and the Exchange Act, (b) the filing of the
Certificate of Merger pursuant to the DGCL, (c) where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings or give
such notice would not, individually or in the aggregate, have a Company Material
Adverse Effect, and (d) in connection with the requirements of the HSR Act and
the rules and regulations in foreign jurisdictions governing antitrust or merger
control matters. Neither the execution, delivery and performance of this
Agreement or the Related Agreements to which it is a party by the Company, nor
the consummation by the Company of the transactions contemplated hereby or
thereby will (i) conflict with or result in any breach of any provision of the
respective certificate of incorporation or bylaws (or similar governing
documents) of the Company or of any its Subsidiaries, (ii) 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, amendment,
cancellation, alteration or acceleration, or result in the creation of a Lien on
any property or asset of the Company or any of its Subsidiaries, or trigger any
rights of first refusal) under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which the Company or any of its Subsidiaries
is a party or by which any of them or any of their respective properties,
capital stock or assets may be bound or result in the loss or impairment of the
Company's or any of its Subsidiary's right to use the Company Intellectual
Property, Company PVP Certificates or Company Germplasm, or (iii) violate any
order, writ, injunction, decree, law, statute, rule or regulation applicable to
the Company or any of its Subsidiaries or any of their respective properties or
assets, except in the case of (ii) or (iii) above for violations, breaches,
defaults or other occurrences that would not, individually or in the aggregate,
have a Company Material Adverse Effect.
SECTION 4.7. No Default. None of the Company or any of its Subsidiaries
is in default, breach or violation (and no event has occurred that with notice
or the lapse of time or both would constitute a default, breach or violation) of
any term, condition or provision of (a) its certificate of incorporation or
bylaws (or similar governing documents), (b) any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which the Company or any of its Subsidiaries is now a party or by which any
of them or any of their respective properties or assets may be bound or (c) any
order, writ, injunction, decree, law, statute, rule or regulation applicable to
the Company, any of its Subsidiaries or any of their respective properties or
assets, except in the case of (b) or (c) above for violations, breaches or
defaults that would not, individually or in the aggregate, have a Company
Material Adverse Effect.
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SECTION 4.8. No Undisclosed Liabilities; Absence of Changes.
(a) Except (i) for liabilities incurred since September 30,
2004 in the ordinary course of business consistent with past practice, or (ii)
for liabilities and obligations reasonably required by the Merger or any other
transactions contemplated by this Agreement or the Related Agreements, neither
the Company nor any of its Subsidiaries has, or has incurred since September 30,
2004, any material liabilities or obligations of any nature, whether or not
absolute, accrued, contingent or otherwise, that would be required to be
reflected or reserved against on a consolidated balance sheet, or in the notes
thereto, of the Company and its Subsidiaries prepared in accordance with GAAP.
(b) Other than as reasonably required by this Agreement and
the Related Agreements, (i) since September 30, 2004 and prior to the date
hereof, the Company and its Subsidiaries have conducted their businesses in the
ordinary course of business consistent with past practice, and (ii) since
September 30, 2004 and prior to the date hereof, the Company has not taken any
of the actions set forth in paragraphs (a) through (q) of Section 6.3.
(c) Since September 30, 2004, there has not been any Company
Material Adverse Effect.
SECTION 4.9. Compliance with Applicable Law.
(a) Except as would not, individually or in the aggregate,
have a Company Material Adverse Effect: (i) the Company and its Subsidiaries
hold all permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities necessary for them to own, lease or operate their
properties and assets and to carry on their businesses as now conducted
("Company Permits"); (ii) there has not occurred any default under, or violation
of, or failure of compliance under, any such Company Permit; (iii) the
businesses of the Company and its Subsidiaries, including but not limited to
their practices with respect to the employment of labor are not being, and have
not been, conducted in violation of any law, ordinance, regulation, order,
judgment, injunction, writ or decree of any Governmental Entity; and (iv) there
is (and during the past two years, there has been) no claim, action, proceeding,
review or investigation pending or threatened against the Company or any
Subsidiary of the Company or any of their respective products by, on behalf of
or before any Governmental Entity.
(b) To the Company's Knowledge, neither the Company nor any of
its Subsidiaries, nor any director, officer, agent or employee of the Company or
any of its Subsidiaries, has, in the past five years, acting on behalf of the
Company or any of its Subsidiaries, (i) made, authorized, offered or promised to
make any unlawful payment or transfer of anything of value, directly or
indirectly through a third party, to any officer, employee or representative of
a foreign government or any department, agency or instrumentality thereof
(including any state-owned enterprise), political party, political campaign or
public international organization, in violation of the U.S. Foreign Corrupt
Practices Act of 1977, as amended, or any applicable law of similar effect; (ii)
otherwise taken any action which would cause the Company or any of its
Subsidiaries to be in violation of the U.S. Foreign Corrupt Practices Act of
1977, as amended, or any applicable law of similar effect; or (iii) violated any
applicable law pertaining to export controls, antiboycott restrictions or trade
sanctions.
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SECTION 4.10. Employee Benefit Matters.
(a) Section 4.10(a) of the Company Disclosure Schedule sets
forth a complete list of all material employee, consultant or director benefit
plans, arrangements or agreements, including any employee welfare benefit plan
within the meaning of Section 3(1) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), any employee pension benefit plan within the
meaning of Section 3(2) of ERISA (whether or not such plan is subject to ERISA)
and any material bonus, incentive, deferred compensation, retirement, welfare
benefit, vacation, stock purchase, stock option, equity, severance, termination,
indemnity, employment, change of control or fringe benefit plan, program,
arrangement or agreement that provides benefits to any current or former
employee or director of the Company or any of its Subsidiaries or any
beneficiary or dependent thereof or with respect to which the Company or any of
its Subsidiaries could have a material liability (collectively, the "Benefit
Plans"). The Company has made available to Parent for each Benefit Plan, if
applicable, true and complete copies of (i) each Benefit Plan (or, in the case
of any unwritten Benefit Plan, a description thereof) and any amendment thereto,
(ii) the most recent summary plan description (or similar document), (iii) the
most recent Annual Reports (Form 5500 Series) and accompanying schedules, if
any, (iv) the most recent actuarial report, and (v) the most recent
determination letter from the IRS (if applicable).
(b) Section 4.10(b) of the Company Disclosure Schedule
contains a complete and accurate list of all Key Employees, setting forth their
respective names, current positions, salaries and target bonuses.
(c) (i) Each Benefit Plan has been maintained and administered
in material compliance with its terms and with all applicable laws including
ERISA and the Code; (ii) each Benefit Plan intended to be qualified under
Section 401(a) of the Code is so qualified and has been determined by the IRS to
be so qualified, and, to the Company's Knowledge, no event has occurred that
could reasonably be expected to adversely affect the qualified status of such
Benefit Plan; (iii) neither the Company nor any of its Subsidiaries has incurred
or is reasonably likely to incur any material liability or penalty under
Sections 4975 or 4976 of the Code or Sections 409 or 502(i) of ERISA; (iv) there
are no pending, or to the Company's Knowledge threatened, claims against or
otherwise involving any of the Benefit Plans (other than routine claims for
benefits); (v) no Benefit Plan is under audit or investigation by the IRS, the
Department of Labor or the PBGC or any other Governmental Entity, and no such
audit or investigation is pending or, to the Company's Knowledge, threatened;
(vi) all contributions or other payments required to be made, as well as all
required filings with Governmental Entities required to be made, as of the date
of this Agreement to or pursuant to the Benefit Plans with respect to the
Company or any of its Subsidiaries have been made; (vii) neither the Company nor
any entity under "common control" with the Company within the meaning of
Sections 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA (an "ERISA
Affiliate") has at any time contributed to, or been required to contribute to,
any "pension plan" (as defined in Section 3(2) of ERISA) that is subject to
Title IV of ERISA or Section 412 of the Code, including any "multi-employer
plan" (as defined in Sections 3(37) and 4001(a)(3) of ERISA); (viii) none of the
Company and its Subsidiaries nor any ERISA Affiliates has incurred any
"withdrawal liability" (as defined in Part I of Subtitle E of Title IV of ERISA)
that has not been satisfied in full; (ix) except as set forth in Section
4.10(c)(ix) of the Company Disclosure Schedule, neither the
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Company nor any of its Subsidiaries has any obligation for retiree health or
life benefits, other than benefits mandated by applicable law; (x) the Company
or its Subsidiaries may amend or terminate any of the Benefit Plans without
incurring any material liability thereunder; (xi) all amounts of deferred
compensation benefits under any Benefit Plan have been properly accrued on the
Financial Statements of the Company and its Subsidiaries to the extent required
under GAAP; and (xii) each Benefit Plan which is an "employee welfare benefit
plan" within the meaning of Section 3(1) of ERISA is either insured pursuant to
a contract of insurance whereby the insurance company bears any risk of loss
with respect to such claims or covered under a contract with a health
maintenance organization (an "HMO") pursuant to which the HMO bears the
liability for such claims.
(d) The consummation of the transactions contemplated by this
Agreement and the Related Agreements will not (either alone or upon the
occurrence of any additional or subsequent events) (i) constitute an event under
any Benefit Plan, trust, or loan that will or may result in any payment (whether
of severance pay or otherwise), acceleration, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligation to fund benefits with
respect to any current or former employee, officer, consultant or director of
the Company or any Subsidiary, or (ii) result in the triggering or imposition of
any restrictions or limitations on the right of the Company or Parent to amend
or terminate any Benefit Plan and receive the full amount of any excess assets
remaining or resulting from such amendment or termination, subject to applicable
taxes.
(e) No Benefit Plan is or has been subject to Title IV or
Section 302 of ERISA or Sections 412 or 4971 of the Code.
(f) There does not now exist, nor do any circumstances exist
that could result in, any Controlled Group Liability that would be a liability
of the Company or any of its Subsidiaries following the Closing. Without
limiting the generality of the foregoing, neither the Company nor any of its
Subsidiaries, nor any of their respective ERISA Affiliates, has engaged in any
transaction described in Section 4069 or Section 4204 or 4212 of ERISA.
"Controlled Group Liability" means any and all liabilities (i) under Title IV of
ERISA, (ii) under Section 302 of ERISA, (iii) under Sections 412 and 4971 of the
Code, (iv) as a result of a failure to comply with the continuation coverage
requirements of Section 601 et seq. of ERISA and Section 4980B of the Code, and
(v) under corresponding or similar provisions of foreign laws or regulations,
other than such liabilities that, in each case, arise solely out of, or relate
solely to, the Benefit Plans listed in Section 4.10(a) of the Disclosure
Schedule.
(g) Except as would not, individually or in the aggregate,
have a Company Material Adverse Effect, all Benefit Plans subject to the laws of
any jurisdiction outside of the United States (i) have been maintained in
accordance with such laws and all applicable requirements, (ii) if they are
intended to qualify for special tax treatment, meet all requirements for such
treatment, and (iii) if they are intended to be funded and/or book-reserved, are
fully funded and/or book reserved, as appropriate, based upon reasonable
actuarial assumptions.
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SECTION 4.11. Labor Matters.
(a) (i) There is no labor strike, dispute, slowdown, stoppage
or lockout of any material nature pending, or, to the Company's Knowledge,
threatened against or affecting the Company or any of its Subsidiaries and
during the immediately preceding three years there has not been any such action.
(ii) Section 4.11(a)(ii) of the Company Disclosure
Schedule sets forth a complete and accurate list of all collective
bargaining or similar agreements with any labor organization, or work
rules or practices agreed to with any labor organization or employee
association by the Company or any of its Subsidiaries.
(iii) There are no material complaints, lawsuits or
other proceedings pending or, to the Company's Knowledge, threatened in
any forum by or on behalf of any present or former employee,
consultant, officer or director of the Company or any of its
Subsidiaries, any applicant for employment or classes of the foregoing
alleging breach by the Company or its Subsidiaries of any express or
implied contract of employment, any laws governing employment or the
termination thereof or other discriminatory, wrongful or tortious
conduct in connection with the employment relationship.
(b) The Company and its Subsidiaries and each member of their
respective business enterprises has complied with the Worker Adjustment and
Retraining Notification Act (the "WARN Act") and any similar state, local or
foreign law or regulation, as applicable. There has not occurred a "mass layoff"
(as defined in the WARN Act) affecting any site of employment or facility of the
Company or its Subsidiaries during the 90-day period prior to the date of this
Agreement.
(c) Section 4.11(c) of the Company Disclosure Schedule sets
forth a complete and accurate list of all collective bargaining or similar
agreements which were in place as of September 30, 2004, but have since been
materially modified, renewed, renegotiated or superceded by one or more of the
collective bargaining or similar agreements set forth in Section 4.11(a)(ii) of
the Company Disclosure Schedule, none of which has resulted in a material
increase in cost on an annual basis to the Company or its Subsidiaries under
such modified, renewed, renegotiated or superseding agreement.
SECTION 4.12. Intellectual Property.
(a) Section 4.12(a) of the Company Disclosure Schedule sets
forth (i) a complete and accurate list of all (A) patents and patent
applications, (B) trademark and service mark registrations and applications, and
(C) copyright registrations and applications for copyright registrations,
currently owned by the Company or its Subsidiaries, in whole or in part,
including jointly with others, (ii) the corporate names under which the Company
or its Subsidiaries conduct business, (iii) the domain names currently owned by
the Company or its Subsidiaries, (iv) all of the certificates of plant variety
protection currently owned by the Company or its Subsidiaries ("Company PVP
Certificates") and all applications by the Company or any of its Subsidiaries
for certificates of plant variety protection; and (v) a list of all products
being offered or sold by the Company and its Subsidiaries as of the date hereof.
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(b) Except as would not, individually or in the aggregate,
have a Company Material Adverse Effect, the Company or one of its Subsidiaries
(i) owns or has the right to use all Company Intellectual Property, free and
clear of all Liens, other than Permitted Liens, and (ii) owns and possesses all
right, title and interest in and to, or possesses the valid right to use, in the
manner used by the Company and its Subsidiaries, all Company Germplasm and
Company PVP Certificates.
(c) Except as would not have, individually or in the
aggregate, a Company Material Adverse Effect, (i) no Person has a right to
receive from the Company any royalty or similar payment in respect of any item
of Company Intellectual Property or Company Germplasm or Company PVP Certificate
pursuant to any contractual or other arrangements entered into by the Company or
any of its Subsidiaries, (ii) no former or present employees, officers,
directors or Affiliates of the Company hold any right, title or ownership
interest, directly or indirectly, in whole or in part, in or to any Company
Intellectual Property, Company PVP Certificate or Company Germplasm, (iii)
except under confidentiality obligations, there has been no disclosure by the
Company or any of its Subsidiaries of any confidential information or trade
secrets or other proprietary information, and (iv) the Company and its
Subsidiaries, as applicable, have taken reasonable steps to enforce the
agreements that have been entered into by the Company's and its Subsidiaries'
employees, consultants, contractors and other entities for ownership and
confidentiality of the Company Intellectual Property, the Company PVP
Certificates and the Company Germplasm. Except as would not have, individually
or in the aggregate, a Company Material Adverse Effect, each current employee or
consultant of the Company or any of its U.S. Subsidiaries who is a breeder and
who has created Company Intellectual Property has executed an agreement with
provisions covering ownership and confidentiality of the Company Intellectual
Property (including, where applicable, Company Germplasm) and Company PVP
Certificates. With respect to current employees or consultants of the Company or
its Subsidiaries who are not covered by the immediately preceding sentence,
their failure to execute an agreement with provisions covering ownership and
confidentiality of the Company Intellectual Property (including where
applicable, Company Germplasm) and Company PVP Certificates, will not
individually or in the aggregate have a Company Material Adverse Effect.
(d) The conduct of the business of the Company and its
Subsidiaries as currently conducted (including the use of, or reliance upon, the
Company Intellectual Property, the Company PVP Certificates and the Company
Germplasm) does not infringe upon any intellectual property rights or any
certificate of plant variety protection owned or controlled by any Person,
except, as would not, individually or in the aggregate, have a Company Material
Adverse Effect, (ii) there are no material claims or suits pending or
threatened, and neither the Company nor any of its Subsidiaries has received
notice of any such material claim or suit (A) alleging that the conduct of the
business of the Company or any of its Subsidiaries infringes upon or constitutes
the unauthorized use of the proprietary rights (including with respect to any
certificate of plant variety protection or any germplasm) of any Person or (B)
challenging the ownership, use, validity or enforceability of the Company
Intellectual Property, Company PVP Certificates or Company Germplasm, (iii) no
material Company Intellectual Property or Company PVP Certificate is being
violated or infringed upon by any Person, and (iv) there are no settlements,
consents, judgments, orders or other agreements which restrict the Company's or
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any of its Subsidiary's rights to use any material Company Intellectual
Property, material Company PVP Certificate or material Company Germplasm.
(e) Except as would not individually, or in the aggregate,
have a Company Material Adverse Effect, the Company and its Subsidiaries are in
compliance with all requirements (including payment of filing, examination, or
maintenance fees and proofs of working or use) relating to the maintenance of
registrations of the Company Intellectual Property.
(f) Adequate procedures and processes are currently in place
at the Company to mitigate against the unintended presence of unapproved events
in Company Germplasm, auditing and training of such procedures and processes are
routinely conducted, such procedures and processes are routinely conducted, such
procedures and processes are implemented companywide as necessary, and to the
Company's Knowledge, there are no unintended or unapproved events in the
products offered or sold by the Company.
SECTION 4.13. Taxes. The Company and its Subsidiaries have filed all
material Tax Returns that are required by applicable laws to be filed by them,
and such Tax Returns are complete and accurate in all material respects. Neither
the Company nor any of its Subsidiaries currently is the beneficiary of any
extension of time within which to file any such material Tax Return. The Company
and its Subsidiaries have paid all material Taxes which have or may become due
and payable (whether or not shown on any Tax Return), other than those Taxes
being contested in good faith through appropriate proceedings for which
provision has been made in accordance with GAAP on the most recent consolidated
balance sheet of the Company set forth in the Financial Statements. All material
Taxes which the Company and its Subsidiaries are required by law to withhold and
collect at or prior to Closing (including any such Taxes arising in connection
with the transactions contemplated by Article III) have been, or will have been,
duly withheld, collected and paid over, in each case, in a timely manner, to the
proper taxing authorities to the extent due and payable. The Company and its
Subsidiaries have not executed any waiver to extend, or otherwise taken or
failed to take any action that would have the effect of extending, the
applicable statute of limitations in respect of any Tax liabilities of the
Company or any of its Subsidiaries for the taxable years prior to and including
the most recent taxable year. None of the Company or any of its Subsidiaries (a)
has been a member of any consolidated, combined or unitary group (other than
with the Company and its Subsidiaries) for Tax purposes, or (b) has any
liability for the Taxes of any other Person (other than the Company and its
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or successor, by
contract or otherwise. Neither the Company nor any of its Subsidiaries is a
party to any joint venture, partnership or other arrangement material to the
Company and its Subsidiaries taken as a whole that could be treated as a
partnership for income tax purposes other than LSL PlantScience LLC and Seminis
Vegetable Seeds Sp. Z.o.o. The Company and its Subsidiaries are not a party to
any tax sharing agreement or arrangement (other than with the Company and its
Subsidiaries). No material liens or encumbrances for Taxes exist with respect to
any of the assets or properties of the Company or any of its Subsidiaries,
except for statutory liens for Taxes not yet due or payable or that are being
contested in good faith through appropriate proceedings. All of the U.S. federal
income Tax Returns filed by or on behalf of each of the Company and its
Subsidiaries have been examined by and settled with the IRS, or the statute of
limitations with respect to the relevant
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Tax liability expired, for all taxable periods ending on or before September 30,
1996. All Taxes due with respect to any completed and settled audit, examination
or deficiency litigation with any taxing authority have been paid in full or
provided for in accordance with GAAP. There is no audit, examination,
deficiency, or refund litigation pending with respect to any material Taxes and
no taxing authority has given written notice of the commencement of (or its
intent to commence) any audit, examination or deficiency litigation with respect
to any material Taxes. No closing agreements, private letter rulings, technical
advice memoranda or similar agreements or rulings have been entered into or
issued by any taxing authority with respect to the Company or any of its
Subsidiaries. There are no outstanding assessments, claims or deficiencies for
any material Taxes of the Company or any of its Subsidiaries that have been
proposed, asserted or assessed, in each case in writing. None of the Company or
any Subsidiary has been a U.S. real property holding corporation within the
meaning of Section 897(c)(2) of the Code during the applicable period specified
in Section 897(c)(1)(A)(ii) of the Code. The Company and its Subsidiaries had
net operating loss carryforwards reflected on its consolidated U.S. federal
income Tax Return for the taxable year ended September 30, 2003 totaling not
less than $65,000,000 and the fiscal unit represented by three Dutch
subsidiaries of the Company is expected to have net operating loss carryforwards
reflected on its Dutch income Tax Return for such taxable year totaling not less
than (euro)30,000,000 (the U.S. and Dutch net operating loss carryforwards
together, the "NOL Carryforwards"), which NOL Carryforwards are subject to
adjustment as a result of current or future audits by appropriate taxing
authorities. Except as may result from this Agreement or the Related Agreements,
the transactions contemplated hereby or thereby, or the transactions which
occurred on September 29, 2003, none of the NOL Carryforwards is currently
subject to limitation under Section 382 of the Code or Treasury Regulations
Section 1.1502-15 or -21 (or any comparable provisions of Dutch tax law) or
otherwise. Neither the Company nor any of its Subsidiaries has constituted a
"distributing corporation" or a "controlled corporation" within the meaning of
Section 355(a)(1)(A) of the Code in a distribution of stock intended to qualify
for tax-free treatment under Section 355 of the Code.
SECTION 4.14. Absence of Litigation. There are no suits, claims,
actions, proceedings or investigations pending or, to the Company's Knowledge,
threatened against, affecting or involving the Company or any of its
Subsidiaries, or any properties of the Company or any of its Subsidiaries,
before any Governmental Entity, except as would not, individually or in the
aggregate, have a Company Material Adverse Effect. Neither the Company nor any
of its Subsidiaries, nor any of their respective properties or assets, is
subject to any order, writ, judgment, injunction, decree, determination or award
which has or would have, individually or in the aggregate, a Company Material
Adverse Effect. Set forth in Section 4.14 of the Company Disclosure Schedule is
a list, as of the date hereof, of all suits, claims, actions, proceedings and
investigations pending, or to the Company's Knowledge, threatened against,
affecting or involving the Company or any of its Subsidiaries, or any properties
of the Company or any of its Subsidiaries, before any Governmental Entity and
all orders, writs judgments, injunctions, decrees, determinations and awards to
which the Company, its Subsidiaries and their respective properties and assets
are subject that are reasonably likely to result in a loss or liability for the
Company or any of its Subsidiaries of more than $500,000 individually in damage
claims (excluding legal fees).
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SECTION 4.15. Material Contracts.
(a) Except for contracts filed as exhibits to the Company's
Annual Report on Form 10-K for the year ended September 30, 2004, as amended on
January 11, 2005 (the "Company 2004 10-K"), Section 4.15(a) of the Company
Disclosure Schedule lists, as of the date hereof, each of the following
contracts and agreements (including oral agreements) of the Company and each of
its Subsidiaries (such contracts and agreements, together with all contracts and
agreements disclosed in Section 4.15(a) of the Company Disclosure Schedule or
filed as exhibits to the Company 2004 10-K, being "Material Contracts"):
(i) each contract, agreement and other arrangement
for the purchase of inventory, spare parts, other materials or personal
property with any supplier or for the furnishing of services to the
Company and each of its Subsidiaries or otherwise related to the
businesses of the Company and each of its Subsidiaries, other than
purchase orders in the ordinary course of business consistent with past
practice, under the terms of which the Company or any of its
Subsidiaries: (A) is likely to pay or otherwise give consideration of
more than $200,000 in the aggregate during the calendar year ended
December 31, 2005; or (B) is likely to pay or otherwise give
consideration of more than $1,000,000 in the aggregate over the
remaining term of such contract;
(ii) each contract, agreement and other arrangement
for the sale of inventory or other property or for the furnishing of
services by the Company or any of its Subsidiaries, other than purchase
orders in the ordinary course of business consistent with past
practice, that: (A) is likely to involve consideration of more than
$200,000 in the aggregate during the calendar year ended December 31,
2005; or (B) is likely to involve consideration of more than $1,000,000
in the aggregate over the remaining term of the contract;
(iii) all material broker, distributor, dealer,
manufacturer's representative, franchise, agency, sales promotion,
market research, marketing, consulting and advertising contracts and
agreements to which the Company or any of its Subsidiaries is a party;
(iv) all management contracts and contracts with
independent contractors or consultants (or similar arrangements) to
which the Company or any of its Subsidiaries is a party and which are
not cancelable without penalty or further payment in excess of $200,000
and without more than 90 days' notice;
(v) all contracts and agreements relating to
Indebtedness of the Company or any of its Subsidiaries or to any direct
or indirect guaranty by the Company or any of its Subsidiaries of
Indebtedness of any other Person, other than any such contracts or
agreements as do not involve more than $100,000 individually or
$500,000 in the aggregate;
(vi) all material contracts, agreements, commitments,
written understandings or other arrangements with any Governmental
Entity, to which the Company or any of its Subsidiaries is a party;
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(vii) all contracts and agreements containing any
provision or covenant limiting or purporting to limit the ability of
the Company or any of its Subsidiaries in any material respect to (i)
sell any products or services of or to any other Person, (ii) engage in
any line of business or (iii) compete with or obtain products or
services from any Person or limiting the ability of any Person to
provide products or services to the Company or any of its Subsidiaries,
in each case, in any geographic area or during any period of time;
(viii) all material contracts or arrangements between
the Company or any of its Subsidiaries, on the one hand, and any
director, officer, employee, stockholder or Affiliate (or any of their
respective Affiliates), on the other hand;
(ix) all Real Property Leases;
(x) all license agreements and material transfer
agreements under which the Company or any of its Subsidiaries has
granted or received the right to use any Company Intellectual Property
(other than licenses for readily available commercial software) or
Company Germplasm, under the terms of which the Company or any of its
Subsidiaries: (A) is likely to pay or otherwise give consideration of
more than $200,000 in the aggregate during the calendar year ended
December 31, 2005; or (B) is likely to pay or otherwise give
consideration of more than $1,000,000 in the aggregate over the
remaining term of such agreement; and
(xi) all other contracts and agreements, whether or
not made in the ordinary course of business, which are material to the
Company and its Subsidiaries, taken as a whole, or the conduct of the
business of the Company and its Subsidiaries, taken as a whole, or the
absence of which would, in the aggregate, have a Company Material
Adverse Effect.
(b) Except as would not, individually or in the aggregate,
have a Company Material Adverse Effect, each Material Contract: (i) is legal,
valid and binding on the Company or its respective Subsidiary party thereto and,
to the Company's Knowledge, the other parties thereto, and is in full force and
effect and (ii) upon consummation of the transactions contemplated by this
Agreement and the Related Agreements, shall be in full force and effect without
penalty or other adverse consequence. Except as would not, individually or in
the aggregate, have a Company Material Adverse Effect, neither the Company nor
any of its Subsidiaries is in breach of, or default under, any Material
Contract. Neither the Company nor any Subsidiary has received any written or, to
the Company's Knowledge, oral notice of a material default (which has not been
cured), offset or counterclaim under any Material Contract, or any other written
or, to the Company's Knowledge, oral communication calling upon it to comply
with any provision of any Material Contract or asserting noncompliance therewith
or asserting the Company or any Subsidiary has waived or altered its rights
thereunder, nor has the Company or any Subsidiary received any written or, to
the Company's Knowledge, oral notice that any party to any Material Contract
intends or is threatening to terminate or fail to exercise any renewal or
extension of any Material Contract.
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(c) No other party to any Material Contract is, to the
Company's Knowledge, in material breach thereof or default thereunder.
(d) There is no contract, agreement or other arrangement
granting any Person any preferential right to purchase any of the material real
or personal properties or assets of the Company or any of its Subsidiaries,
other than inventory in the ordinary course of business consistent with past
practice.
SECTION 4.16. Insurance. The Company and its Subsidiaries have in full
force and effect the material policies of fire, liability, errors and omissions
and other forms of insurance listed in Section 4.16 of the Company Disclosure
Schedule (such policies, the "Insurance Policies"), all of which policies have
previously been provided to Parent. The Insurance Policies are in full force and
effect, and no notice of cancellation or non-renewal has been received by the
Company or any of its Subsidiaries with respect to any Insurance Policy that has
not been cured by the payment of premiums that are due. The Company and its
Subsidiaries have complied in all material respects with the terms and
provisions of the Insurance Policies. The Company or one of its Subsidiaries is
the primary party to each such Insurance Policy. To the Company's Knowledge,
since January 1, 2002, none of the insurers of the Company or any of its
Subsidiaries has rejected, or plans to reject, any insurance claim of the
Company or its Subsidiaries in excess of the relevant deductible.
SECTION 4.17. Environmental Laws and Regulations.
(a) (i) The Company and each of its Subsidiaries is in
compliance with all Environmental Laws which compliance includes the possession
by the Company and its Subsidiaries of all permits and other governmental
authorizations required under applicable Environmental Laws to operate their
properties and assets and to carry on their businesses as now conducted, and
compliance with the terms and conditions thereof, except for such non-compliance
that individually or in the aggregate would not have a Company Material Adverse
Effect; (ii) during the immediately preceding five years, neither the Company
nor any of its Subsidiaries has received written or oral notice of, or is the
subject of, any action or threatened action, cause of action, claim,
investigation, demand or notice by any Person alleging material liability
(including as a result of non-compliance) under any Environmental Law (an
"Environmental Claim") including relating to the business of the Company or any
of its Subsidiaries or relating to any contractor, subcontractor or agent of the
Company or any of its Subsidiaries or relating in any way to any facilities,
locations, or business previously owned, leased or operated by or on behalf of
the Company or any of its Subsidiaries; (iii) there are no conditions or
circumstances that are reasonably likely to result in any material liability of
the Company or any of its Subsidiaries under any Environmental Law or prevent or
interfere with any such compliance thereunder in the future, including relating
to any contractor, subcontractor or agent of the Company or any of its
Subsidiaries or relating to the business of the Company or any of its
Subsidiaries, or relating in any way to any facilities, locations, or business
previously owned, leased or operated by or on behalf of the Company or any of
its Subsidiaries; (iv) none of the properties owned or operated by the Company
or any of its Subsidiaries contains any Hazardous Substance in amounts or
concentrations exceeding the levels permitted by applicable Environmental Laws,
except for matters that are not reasonably likely to give rise to any material
liability for the Company or any of its Subsidiaries, and (v) no Hazardous
Substances have been
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disposed of, released or transported in violation of any applicable
Environmental Law from any of the properties owned or operated by the Company or
any of its Subsidiaries, except for matters that are not reasonably likely to
give rise to any material liability for the Company or any of its Subsidiaries.
There are no permits or other governmental authorizations held by the Company or
any of its Subsidiaries or required for the Company's business that are required
to be transferred or reissued, or that are otherwise prohibited from being
transferred or reissued, pursuant to any Environmental Laws as a result of the
transactions contemplated by this Agreement or the Related Agreements, except
for those the failure of which to possess would not, individually or in the
aggregate, have a Company Material Adverse Effect. To the Company's Knowledge,
the Company has provided to Parent all environmental assessments, reports, data,
results of investigations, or compliance or other environmental audits conducted
by or for the Company or any of its Subsidiaries, or otherwise relating to the
Company's or any Subsidiary's business or properties (owned, leased or operated)
in the possession or control (direct or indirect) of the Company or any of its
Subsidiaries. For purposes of Sections 4.17(a) and (b) only, the term "material
liability" shall mean any liability in excess of $100,000.
(b) There is no Environmental Claim that could reasonably be
expected to result in a material liability that is pending or, to the Company's
Knowledge, threatened against the Company or any of its Subsidiaries or, to the
Company's Knowledge, against any Person whose liability for any Environmental
Claim the Company or any of its Subsidiaries has or is reasonably likely to have
been retained or assumed either contractually or by operation of law.
(c) The only representations and warranties given in respect
of environmental matters and agreements relating thereto are those contained in
this Section 4.17 and none of the other representations and warranties shall be
deemed to constitute, directly or indirectly, a representation or warranty in
respect of environmental matters or agreements relating thereto.
(d) The matters disclosed in Section 4.17 of the Company
Disclosure Schedule would not, individually or in the aggregate, have a Company
Material Adverse Effect.
SECTION 4.18. Title to Real Properties; Encumbrances.
(a) Section 4.18(a)(i) of the Company Disclosure Schedule sets
forth a complete and accurate list of all real property (including land,
buildings and other improvements) and interests in real property owned by the
Company or its Subsidiaries that exceed $200,000 in value (the "Owned Real
Property"), including, for each parcel of Owned Real Property, a description
thereof, including the approximate size and use of the property. Section
4.18(a)(ii) of the Company Disclosure Schedule also sets forth a complete and
accurate list of all real property leased, subleased or otherwise occupied by
the Company or its Subsidiaries that require annual payments in excess of (or
reasonably expected to be in excess of ) $100,000 (the "Leased Real Property"),
which description shall include (for all Leased Real Property) a list of all
leases and subleases (and amendments and modifications) pertaining thereto and
approximate size of the premises leased thereunder, and the use of such
premises. The Owned Real Property and the Leased Real Property shall be
hereinafter collectively referred to as the "Real Property." The Company or its
Subsidiaries has good and valid fee or leasehold title (as the case may be) to
the Real Property, free and clear of all Liens, other than Permitted Liens.
Except as would not, individually or in the aggregate, have a Company Material
Adverse Effect, the Permitted Liens
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do not and will not impair or adversely affect the value of any Real Property,
the current or contemplated (the term "contemplated," as used in this Section
4.18(a), meaning contemplated or planned prior to the Closing Date) use,
occupancy or operation thereof, or the business, operations or condition
(financial or otherwise) of the Company or any of its Subsidiaries. All aspects
of the Real Property are in compliance in all respects with any and all
restrictions and other provisions included in the Permitted Liens, and there are
no matters which create, or which with notice or the passage of time would
create, a default under any of the documents evidencing the Permitted Liens,
except as would not, individually or in the aggregate, have a Company Material
Adverse Effect.
(b) The Company owns or leases all of the real property used
to conduct the business of the Company and its Subsidiaries in the manner
conducted prior to the date hereof. Except as would not, individually or in the
aggregate, have a Company Material Adverse Effect, all buildings, structures,
improvements and fixtures located on, under, over or within each of the Real
Properties and all other aspects of each of the Real Properties: (i) are in good
operating condition and repair and are structurally sound and free of any
material defects, with no material alterations or repairs being required thereto
under applicable law or insurance company requirements; (ii) consist of
sufficient land and improvements and lawful means of access and utility service
to permit the use thereof in the manner and for the purposes to which they are
presently devoted or to which they are contemplated to be devoted; and (iii) are
located adjacent to public roads or streets with adequate ingress and egress
available between such roads or streets and such Real Property for all purposes
related to the current operations of the Company and its Subsidiaries and are
otherwise suitable and adequate for their current use, operation and occupancy.
(c) There are no pending or, to the Company's Knowledge,
threatened material proceedings regarding the amount of the Taxes on, or the
assessed valuation of, any Real Property, or relating to eminent domain or the
condemnation of any portion of the Real Property, or impact fees, special
assessments or similar matters with respect thereto. To the Company's Knowledge,
no such action or proceeding is contemplated.
(d) All certificates, permits, variances or licenses from any
Governmental Entity having jurisdiction over any of the Real Property and all
agreements, easements or other rights that are necessary to permit the lawful
use and operation of the buildings and improvements, in the manner such
buildings and improvements are used and operated on any of the Real Property
have been obtained and are in full force and effect and there is no pending
threat of modification or cancellation of any of same, except as would not,
individually or in the aggregate, have a Company Material Adverse Effect.
(e) All of the Real Property Leases are valid, binding and in
full force and effect. True and complete copies of the Real Property Leases have
previously been delivered to Parent, including all amendments or modifications
thereof and all side letters or other instruments affecting the obligations of
any party thereunder. The lessee (identified in Section 4.18(a)(ii) of the
Company Disclosure Schedule) under each Real Property Lease is now in possession
of the Leased Real Property. There is no pending or, to the Company's Knowledge,
threatened suit, action or proceeding that might interfere with the quiet
enjoyment of each tenant. There are no outstanding defaults or circumstances
that, upon the giving of notice or passage of
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time or both, would constitute a default or breach by either party under any
Real Property Lease. The Company and its Subsidiaries have not assigned,
mortgaged, pledged or otherwise encumbered, in any material manner, their
interest, if any, under any Real Property Lease. Between the date hereof and the
Closing, the Company or its Subsidiaries will exercise within the time
prescribed in each Real Property Lease any option provided therein to extend or
renew the term thereof, (i) so long as such Real Property Lease is still
necessary for the conduct of the business of the Company and its Subsidiaries as
conducted during the fiscal year ended September 30, 2004 and (ii) since such
time an alternate lease has not been entered into with terms, in the aggregate,
generally not less favorable to the Company or its Subsidiaries. As used herein,
the term "lease" shall also include subleases and the term "lessee" shall also
include any sublessee.
SECTION 4.19. Tangible Personal Property; Sufficiency of Assets.
(a) The Company and its Subsidiaries have good and valid
title, free and clear of all Liens (other than Permitted Liens), to all tangible
personal property that they use in the operation of the business of the Company
and its Subsidiaries, including all such tangible personal property reflected in
the Company Balance Sheet as being owned by the Company and its Subsidiaries,
except for such tangible personal property disposed of to third parties since
September 30, 2004 in the ordinary course of business, consistent with past
practice and which disposals would not, individually or in the aggregate, have a
Company Material Adverse Effect. The tangible personal property of the Company
and its Subsidiaries is generally in good working order, reasonable wear and
tear excepted, and is suitable for the use for which it is intended in all
material respects.
(b) Upon consummation of the Merger, the Company and its
Subsidiaries will own or have valid rights to use all of the rights, facilities,
assets, properties and interests which are used in, and are sufficient for, the
operation of the business of the Company and its Subsidiaries in the manner in
which such business was conducted during the fiscal year ended September 30,
2004 and since such time in all material respects.
SECTION 4.20. Affiliate Transactions. For purposes of this Section
4.20, Affiliates of the Company shall not include the Company and its
Subsidiaries.
(a) To the Company's Knowledge, no Affiliate of the Company
owns or has any right or interest in any material tangible personal property,
Real Property or intangible personal property used in conducting the business of
the Company and its Subsidiaries in the manner in which such business was
conducted during the fiscal year ended September 30, 2004 and since such time in
all material respects;
(b) Other than for compensation as an employee of the Company
payable in the ordinary course of business consistent with past practice and
except as reflected in the Company SEC Documents, to the Company's Knowledge, no
Affiliate of the Company has entered into any transactions with the Company or
its Subsidiaries that are required to be disclosed in the Company SEC Documents;
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(c) To the Company's Knowledge, there are no outstanding loans
or other similar advances due and owing to any holder of Company Common Stock or
Company Preferred Stock or any of their respective Affiliates (other than the
Company and its Subsidiaries) by the Company or any of its Subsidiaries; and
(d) Except as set forth in Section 4.20 of the Company
Disclosure Schedule, (i) no Affiliate of the Company provides, or causes to be
provided to the Company or any of its Subsidiaries any rights, interests,
assets, facilities, properties, goods or services, (ii) neither the Company nor
any of its Subsidiaries provides or causes to be provided, to, an Affiliate of
the Company any rights, interests, assets, facilities, properties, goods or
services and (iii) neither the Company nor any of its Subsidiaries has any other
significant business relationship with any Affiliate of the Company.
(e) To the Company's Knowledge, no holder of Company Common
Stock or Company Preferred Stock or any of their respective Affiliates (other
than the Company and its Subsidiaries) has, or has incurred, any liabilities or
obligations of any nature, whether or not absolute, accrued, contingent or
otherwise, that have become or may become liabilities of the Company or any of
its Subsidiaries, in each case, other than (i) as contemplated by the terms of
this Agreement or the Stockholders' Agreement, (ii) expenses or expense
reimbursements (consistent with ordinary course), (iii) indemnification
obligations and (iv) other obligations (consistent with ordinary practice)
pursuant to existing contracts, which existing contracts are disclosed in the
Company Disclosure Schedule (such exceptions in (i)-(iv) being the "Permitted
Exceptions"). To the Company's Knowledge, neither the Company nor any of its
Subsidiaries, is responsible for liabilities or obligations of any nature,
whether or not absolute, accrued, contingent or otherwise, of any holder of
Company Common Stock or Company Preferred Stock or any of their respective
Affiliates (other than the Company and its Subsidiaries), in each case, other
than the Permitted Exceptions.
SECTION 4.21. Suppliers and Customers. Except as would not,
individually or in the aggregate, have a Company Material Adverse Effect, since
September 30, 2004, no licensor, vendor, supplier, grower, licensee or customer
of the Company or any of its Subsidiaries has canceled or otherwise modified its
relationship with the Company or its Subsidiaries and, to the Company's
Knowledge, no such Person has notified the Company of its intention to do so.
SECTION 4.22. Brokers. Except as set forth in Section 4.22 of the
Company Disclosure Schedule, no broker, finder, investment banker or other
intermediary is or might be entitled to any brokerage, finders' or other fee or
commission in connection with the transactions contemplated by this Agreement or
the Related Agreements based upon arrangements made by or on behalf of the
Company.
SECTION 4.23. Company Information. The Company has provided Parent and
Merger Sub with all information so as to be responsive to each of the
representations and warranties set forth in Article IV. In furtherance of the
foregoing, the Company represents that it has not withheld any information
required by the representations and warranties set forth in Article IV.
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby represent and warrant to the Company as
follows:
SECTION 5.1. Organization. Each of Parent and Merger Sub is duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate or similar power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted, except where the failure to be in good standing or to have such
corporate or similar power and authority would not, individually or in the
aggregate, have a Parent Material Adverse Effect. Merger Sub was formed solely
for the purpose of engaging in the transactions contemplated by this Agreement
and the Related Agreements. Merger Sub owns no equity, debt or similar interest
in any Person. Parent and Merger Sub have delivered to the Company accurate and
complete copies of the certificate of incorporation and bylaws (or other
governing documents), as currently in effect, of Parent and Merger Sub. Merger
Sub has not engaged in any activities, owned any assets or been subject to any
liabilities, except as is necessary to effect the Merger.
SECTION 5.2. Authority Relative to this Agreement. Each of Parent and
Merger Sub has all necessary power and authority to execute and deliver this
Agreement and the Related Agreements and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Related Agreements and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by the board of
directors of Parent and by the board of directors of Merger Sub, and no other
corporate or similar proceedings on the part of Parent or Merger Sub are
necessary to authorize this Agreement or the Related Agreements or to consummate
the transactions contemplated hereby or thereby. This Agreement and the Related
Agreements have been duly and validly executed and delivered by each of Parent
and Merger Sub and, assuming due and valid authorization, execution and delivery
by the other parties thereto, constitute valid, legal and binding agreements of
each of Parent and Merger Sub, enforceable against each of Parent and Merger Sub
in accordance with their terms, except that such enforcement may be subject to
(a) any bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
or other laws, now or hereafter in effect, affecting creditors' rights
generally, and (b) the effect of general principles of equity (regardless of
whether enforceability is considered in a proceeding of law or equity).
SECTION 5.3. Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Securities Act, the Exchange Act, any
Required Approval, state securities or blue sky laws, and the filing and
recordation of the Certificate of Merger as required by the DGCL, no filing with
or notice to, and no permit, authorization, consent or approval of, any
Governmental Entity is necessary for the execution and delivery by Parent and
Merger Sub of this Agreement or the Related Agreements or the consummation by
Parent and Merger Sub of the transactions contemplated hereby or thereby, except
where the failure to obtain such permits, authorizations, consents or approvals
or to make such filings or give such notice would not, individually or in the
aggregate, have a Parent Material Adverse Effect. Neither the execution,
delivery and performance of this Agreement or the Related Agreements by Parent
and Merger
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Sub nor the consummation by Parent and Merger Sub of the transactions
contemplated hereby or thereby will (a) conflict with or result in any breach of
any provision of the certificates of incorporation or bylaws (or similar
governing documents) of Parent or Merger 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, amendment, cancellation or
acceleration, or result in t |
