Agreement and Plan of Merger - Monsanto Co. and Seminis Inc.
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 the creation of a Lien on any property or asset of
Parent 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 Parent or Merger Sub is a party or by which either of them or their
respective properties or assets may be bound, or (c) violate any order, writ,
injunction, decree, law, statute, rule or regulation applicable to Parent or
Merger Sub or any of their respective properties or assets, except in the case
of (b) or (c) above for violations, breaches, defaults or other occurrences that
would not, individually or in the aggregate, have a Parent Material Adverse
Effect.
SECTION 5.4. Capitalization.
(a) Immediately prior to the Effective Time, (i) Merger Sub
shall have authority to issue 1,000 shares of MS Common Stock, 100 of which
shares shall be issued and outstanding and all of which issued and outstanding
shares are owned by Parent.
(b) All issued and outstanding shares of capital stock of
Merger Sub have been duly authorized, validly issued and are fully paid and
nonassessable and are owned free and clear of all Liens.
SECTION 5.5. Proxy Statement; Information. In the event a Stockholders
Meeting is held, none of the information supplied by Parent or Merger Sub in
writing specifically for inclusion or incorporation by reference 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
they were made, not misleading.
SECTION 5.6. Brokers. Except as set forth in Section 5.6 of the Parent
Disclosure Schedule, no broker, finder, investment banker or other intermediary
is or might be entitled to any brokerage, finder's or other fee or commission
payable by the Company in connection with the transactions contemplated by this
Agreement and the Related Agreements based upon arrangements made by or on
behalf of Parent or its Affiliates for which the Company would be liable either
prior to or after the Effective Time.
SECTION 5.7. Availability of Funds. At Closing, Parent will have
sufficient funds available to consummate the Merger and the transactions
contemplated by this Agreement, including the payment of any expenses.
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ARTICLE VI.
COVENANTS
SECTION 6.1. Stockholders Meeting. Unless the written consents of all
of the Company's stockholders adopting this Agreement have been received, the
Company, acting through the Company Board in accordance with its certificate of
incorporation and bylaws, shall, as promptly as practicable following the date
of this Agreement and in consultation with Parent, take all action reasonably
necessary, except as otherwise provided for herein, to seek adoption of this
Agreement and the Merger at a duly called and noticed meeting of the Company's
stockholders (the "Stockholders Meeting").
SECTION 6.2. Proxy Statement. Unless the written consents of all of the
Company's stockholders adopting this Agreement have been received, promptly
following the date of this Agreement, the Company and Parent shall, except as
otherwise provided for herein and to the extent necessary, cooperate in
preparing a proxy statement or information statement (together with any
amendments thereof or supplements thereto, the "Proxy Statement") to seek the
adoption of this Agreement and the Merger by the Company's stockholders. The
Company shall use its commercially reasonable efforts to cause the Proxy
Statement to be mailed to the Company's stockholders as promptly as reasonably
practicable. The Company and Parent each agrees to correct any information
provided by it for use in the Proxy Statement that shall have become false or
misleading. All mailings to the Company's stockholders in connection with the
Merger, including the Proxy Statement, shall be subject to the prior review and
comment by Parent. Parent will furnish (or cause to be furnished) to the Company
the information relating to it and its Affiliates to be set forth in the Proxy
Statement. The Company agrees to use its commercially reasonable efforts, after
consultation with the other parties hereto, to cause such Proxy Statement to be
mailed to the Company's stockholders at the earliest practicable time. The
Company shall include in the Proxy Statement the recommendation of the Company
Board that the Company's stockholders vote in favor of the adoption of this
Agreement and the Merger.
SECTION 6.3. Conduct of Business of the Company. The Company hereby
covenants and agrees that, prior to the Effective Time, unless Parent shall
otherwise consent in writing (which consent shall not be unreasonably withheld
or delayed) or except as otherwise expressly contemplated by this Agreement
(including Sections 6.3(a) through 6.3(q) of the Company Disclosure Schedule) or
the Related Agreements, the Company shall, and shall cause its Subsidiaries to,
(i) operate its business in the usual and ordinary course consistent with past
practice, (ii) use its commercially reasonable efforts to preserve substantially
intact its business organization, maintain its rights and franchises, retain the
services of its respective principal officers and key employees and maintain its
relationships with its respective principal customers, suppliers and other
persons with which it or any of its Subsidiaries has significant business
relations and (iii) use its commercially reasonable efforts to maintain and keep
its properties and assets in as good repair and condition as at present,
ordinary wear and tear excepted. Without limiting the generality of the
foregoing, and except as otherwise expressly contemplated by this Agreement,
Sections 6.3(a)-6.3(q) of the Company Disclosure Schedule or the Related
Agreements or consented to in writing by Parent (which consent shall not be
unreasonably withheld or delayed), the Company shall not, and shall not permit
its Subsidiaries to, do any of the following:
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(a) amend or propose to amend its certificate of incorporation
or bylaws (or other governing documents);
(b) authorize for issuance, issue, sell, deliver, or agree or
commit to issue, sell or deliver, dispose of, encumber or pledge (whether
through the issuance or granting of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any stock of any class or any
securities, except as required by agreements with the Company's employees under
the Company Stock Plans, Warrant Agreements or Co-Investment Agreements, in each
case as in effect as of the date hereof, or amend any of the terms of any such
securities or agreements outstanding as of the date hereof;
(c) (i) split, combine or reclassify any shares of its capital
stock, declare, set aside or pay or agree to pay any dividend or other
distribution (whether in cash, stock or property or any combination thereof) in
respect of its capital stock, or redeem or otherwise acquire any of its
securities or any securities of its Subsidiaries or (ii) pay any fee (including
without limitation any management fee under the Management Agreement or
otherwise) or other amount to 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.
(d) (i) incur or assume any long-term or short-term
indebtedness or issue any debt securities, other than borrowings under (A) the
Revolving Loans (as defined in the Company Credit Agreement) or (B) those
agreements for short term bank borrowings listed on Section 4.2(e) of the
Company Disclosure Schedule; (ii) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or otherwise) for the
obligations of any other Person; (iii) make any loans, advances or capital
contributions to, or investments in, any other Person (other than to wholly
owned Subsidiaries of the Company) or make any change in its existing borrowing
or lending arrangements for or on behalf of any such Person, whether pursuant to
an employee benefit plan or otherwise; (iv) pledge or otherwise encumber shares
of capital stock of the Company or any of its Subsidiaries; or (v) mortgage,
pledge or otherwise encumber any of its material assets, tangible or intangible,
or create or suffer to exist any material Lien thereupon other than Permitted
Liens in the ordinary course of business, consistent with past practice;
(e) adopt a plan of complete or partial liquidation or adopt
resolutions providing for the complete or partial liquidation, dissolution,
consolidation, merger, restructuring or recapitalization of the Company or any
of its Subsidiaries;
(f) (i) except as may be required by law or existing
agreements, plans or arrangements as in effect as of the date hereof, or in the
ordinary course of business consistent with past practice, pay, agree to pay,
grant, issue or accelerate payments or benefits pursuant to any Benefit Plan in
excess of the payments or benefits provided under such Benefit Plan as of the
date hereof, (ii) except (A) for increases in the ordinary course of business
consistent with past practice for employees other than executive officers and
directors of the Company that, in the aggregate, do not result in a material
increase in benefits or compensation expense to the Company, or (B) as required
under existing agreements for directors, officers, consultants and employees,
increase in any manner the salary or fees or benefits of any director, officer,
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consultant or employee, or (iii) except as may be required by law, amend (other
than amendments made in the ordinary course of business consistent with past
practice) or terminate any Benefit Plan or establish, adopt or enter into any
plan, agreement, program, policy, trust, fund or other arrangement that would be
a Benefit Plan if it were in existence as of the date of this Agreement;
(g) acquire, sell, transfer, lease, encumber or dispose of any
assets outside the ordinary course of business (other than inventory in the
ordinary course consistent with past practice) that, in the aggregate, are
material to the Company and its Subsidiaries taken as a whole, or enter into any
commitment or transaction outside the ordinary course of business consistent
with past practice which is likely to involve payments by the Company during the
first 12 months of such commitment or transaction in excess of $200,000 or
$1,000,000 in the aggregate over the full term of such commitment or
transaction;
(h) except as may be required as a result of a change in law
or in GAAP, change any of the financial accounting principles or practices used
by it;
(i) revalue in any material respect any of its assets,
including writing down the value of inventory beyond the current obsolescence
reserve or writing off notes or accounts receivable other than in the ordinary
course of business;
(j) (i) acquire (by merger, consolidation, or acquisition of
stock or assets) any corporation, partnership or other business organization or
division thereof or any equity interest therein; (ii) other than as contemplated
by Section 6.3(j)(ii) of the Company Disclosure Schedule, authorize any new
capital expenditure or expenditures which, individually, is in excess of
$250,000 or, in the aggregate, are in excess of $1,000,000; or (iii) enter into
or amend any contract, agreement, commitment or arrangement providing for the
taking of any action that would be prohibited under this clause (j);
(k) make any material Tax election, change any material method
of Tax accounting or settle or compromise any material Tax liability of the
Company or any of its Subsidiaries, and, in any event, the Company shall consult
with Parent before filing or causing to be filed any material Tax Return of the
Company or any of its Subsidiaries, except to the extent such Tax Return is
filed in the ordinary course of business consistent with past practice, and
before executing or causing to be executed any agreement or waiver extending the
period for assessment or collection of any material Taxes of the Company or any
of its Subsidiaries;
(l) pay, discharge or satisfy any material claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business consistent with past practice or to the extent provided for
in reserves specific to such claim, liability or obligation;
(m) (i) permit any insurance policy or policies naming it as a
beneficiary or a loss payable payee, which policy or policies, individually or
in the aggregate, is/are material to the Company and the Subsidiaries taken as a
whole, to be canceled or terminated without notice to Parent unless the Company
or one of its Subsidiaries shall have obtained a comparable replacement policy,
or (ii) enter into any insurance policy or policies naming it as a beneficiary
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or a loss payable payee, which policy or policies, individually or in the
aggregate, is/are material to the Company and the Subsidiaries taken as a whole;
(n) except in the ordinary course of business consistent with
past practice, (i) terminate, amend or modify (in any material respect), or
waive any material provision of, any Material Contract, or (ii) amend, modify or
change (in any material respect) any material policies or procedures governing
product sales or returns or the treatment of accounts receivable;
(o) settle or compromise any pending or threatened material
suit, action or claim;
(p) enter into any agreement containing any provision or
covenant limiting in any material respect the ability of the Company or any of
its Subsidiaries 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;
(q) (i) terminate the employment of, materially change the
terms or conditions of employment of, or pay any severance amounts upon a
voluntary termination of employment or "retirement", of any of the individuals
listed in Section 6.3(q)(i) of the Company Disclosure Schedule other than
pursuant to agreements existing as of the date hereof and disclosed in Section
6.3(q) of the Company Disclosure Schedule, (ii) amend or modify any of the
employment agreements listed on Section 6.2(q)(ii) of the Company Disclosure
Schedule, or (iii) amend or modify any of the letter agreements listed on
Section 4.10(a) of the Company Disclosure Schedule; or
(r) take, or agree in writing or otherwise to take, any
of the actions prohibited in Sections 6.3(a) through (q).
SECTION 6.4. Notification of Certain Matters. The Company, Merger Sub
and Parent each shall give prompt notice to the others of (a) the occurrence or
nonoccurrence of any event the occurrence or nonoccurrence of which would be
likely to cause (i) any representation or warranty contained in this Agreement
to be untrue or inaccurate or (ii) any covenant, condition or agreement
contained in this Agreement not to be complied with or satisfied, and (b) any
failure of a party to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section 6.4 shall not affect
the representations, warranties or covenants of the parties hereto or limit or
otherwise affect the remedies available to the Company, Parent or Merger Sub
hereunder; provided, further, that a breach of this Section 6.4 shall not
constitute a breach of the condition to Closing set forth in Section 7.1(a)(ii)
or Section 7.1(b)(ii), as applicable, unless such breach results from an untruth
or inaccuracy that would lead to a breach of the condition to Closing set forth
in Section 7.1(a)(i) or Section 7.1(b)(i), as applicable.
SECTION 6.5. Access to Information.
(a) Between the date hereof and the Effective Time, the
Company will, upon reasonable request, give Parent and its authorized
representatives and Persons providing or
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committed or proposing to provide the Company or Parent with financing and their
representatives, reasonable access during normal business hours to employees,
plants, offices, warehouses and other facilities and properties and to all books
and records (including Tax Returns and work papers of the Company's independent
auditors, when available and analytical records and methods) of the Company and
its Subsidiaries, will permit Parent and its authorized representatives to make
such inspections (including any physical inspections or soil or groundwater
investigations) as they may reasonably request (including to allow Parent to
assess the potential for unapproved or unintended events in products offered or
sold by the Company) and will instruct the officers and employees of the Company
and those of its Subsidiaries to furnish to Parent and its authorized
representatives such financial and operating data and other information with
respect to the business and properties of the Company and any of its
Subsidiaries (including information relating to vendors, growers, customers and
product quality) as Parent may from time to time reasonably request; provided,
that the Company shall not be required to provide any such information if the
Person receiving such information is not subject to a confidentiality agreement
for the benefit of the Company; provided, further, that in the event Parent or
its authorized representatives or agents elect to prepare Phase I environmental
site assessments, equivalent analyses, or any other reports analyzing potential
environmental, human health, or safety issues or liabilities based on the books
and records of the Company, or access to the Company's employees, plants, etc.,
Parent shall promptly provide to the Company copies of any such reports (when
executed and delivered), including cost estimates (if any). All information
obtained by Persons pursuant to this Section 6.5(a) shall be kept confidential
in accordance with, and shall otherwise be subject to the terms of, the
confidentiality letter agreement, dated October 13, 2004, from the Parent to the
Company and Alfonso Romo Garza (the "Confidentiality Agreement").
(b) Prior to the Effective Time, the Company shall, no later
than 30 days following the end of each month and 45 days following the end of
each quarter, prepare and deliver to Parent upon completion the balance sheet,
income statement and statement of cash flows prepared in accordance with GAAP of
the Company for each month ended between the date of this Agreement and the
Effective Time.
SECTION 6.6. Additional Agreements, Commercially Reasonable Efforts.
(a) Prior to the Effective Time, upon the terms and subject to
the conditions of this Agreement, each of Parent, Merger Sub and the Company
agrees to use its commercially reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper or
advisable under any applicable laws, rules or regulations to consummate and make
effective as promptly as practicable the Merger and the other transactions
contemplated by this Agreement and the Related Agreements, including (i) the
preparation and filing of all forms, registrations and notices required to be
filed to consummate the Merger and the other transactions contemplated hereby
and thereby and the taking of such actions as are necessary to obtain any
requisite approvals, consents, orders, exemptions or waivers by any third party,
including any Governmental Entity, and (ii) the satisfaction of the other
parties' conditions to the consummation of the Merger and the Related
Transactions. Without limiting this Section 6.6, Parent and the Company shall
each use its commercially reasonable efforts to avoid the entry of, or to have
vacated or terminated, any decree, order, or judgment that would restrain or
prevent the Closing, on or before the Outside Date, including defending through
litigation on the
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merits any claim asserted in any court by any Person. In addition, no party
hereto shall take any action after the date hereof that would reasonably be
expected to materially delay the obtaining of, or result in not obtaining, any
permission, approval or consent from any Governmental Entity, necessary to be
obtained prior to the consummation of the Merger and the Related Transactions.
(b) At Parent's expense, the Company agrees to use its
commercially reasonable efforts to cooperate with Parent in connection with its
efforts to refinance the Company's existing Indebtedness in connection with the
consummation of the Merger; provided that in no event shall the Company be
required to accelerate payment under, or otherwise take any action that would
adversely affect its rights or obligations under, any of its existing
Indebtedness prior to the Effective Time.
(c) Prior to the Effective Time, the Company or its
Subsidiaries, on the one hand, and Parent or its Affiliates, on the other hand,
shall permit the other parties hereto to review and discuss in advance, and
consider in good faith the views of the other parties in connection with, any
proposed written (or any material proposed oral) communication with any
Governmental Entity regarding any of the transactions contemplated by this
Agreement or the Related Agreements. The Company or its Subsidiaries, on the one
hand, and Parent or its Affiliates, on the other hand, shall promptly inform the
other parties hereto of, and if in writing, furnish the other parties with
copies of (or, in the case of material oral communication, advise the other
parties orally of) any communication from any Governmental Entity regarding any
of the transactions contemplated by this Agreement or the Related Agreements. If
the Company or its Subsidiaries, on the one hand, or Parent or its Affiliates,
on the other hand, receives a request for additional information or documentary
material from any such Governmental Entity with respect to the Merger or the
Related Transactions, then such party will endeavor in good faith to make, or
cause to be made, as soon as reasonably practicable and after consultation with
the other parties hereto, an appropriate response in compliance with such
request. None of the Company or its Subsidiaries, on the one hand, or Parent or
its Affiliates, on the other hand, shall participate in any meeting with any
Governmental Entity with respect to the Merger or the Related Transactions
unless it consults with the other parties hereto in advance and, to the extent
permitted by such Governmental Entity, gives the other parties the opportunity
to attend and participate thereat. To the extent not otherwise provided in this
Section 6.6(c), the Company or its Subsidiaries, on the one hand, and Parent or
its Affiliates, on the other hand, shall furnish the other parties hereto with
copies of all correspondence, filings and communications between it and any such
Governmental Entity with respect to the Merger; provided, that either the
Company or Parent or an Affiliate of Parent may redact any information from such
correspondence, filings, and communications that discusses or reflects its
valuation of the Merger. Tax return filings in the ordinary course and Tax
proceedings with a Governmental Entity shall not be subject to the above
provisions of this Section 6.6(c). The Company or its Subsidiaries, on the one
hand, and Parent or its Affiliates, on the other hand, shall furnish the other
parties hereto with such necessary information and reasonable assistance as such
other parties may reasonably request in connection with their preparation of
necessary filings or submissions of information to any Governmental Entity. To
the extent that transfers of Company Permits are required as a result of
execution of this Agreement or the Related Agreements or consummation of the
Merger, the Company and Parent shall use all commercially reasonable efforts to
effect such transfers.
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(d) Between the date hereof and the Closing, the Company shall
use its commercially reasonable efforts to identify and secure or provide any
consents or notices required as a result of the execution, delivery or
performance of this Agreement or the Related Agreements or the consummation of
the transactions contemplated hereby or thereby.
SECTION 6.7. Public Announcements. Parent, Merger Sub and the Company,
as the case may be, will consult with each other before issuing any press
release or otherwise making any public statements with respect to this
Agreement, the Related Agreements, the Merger, the Related Transactions or the
other transactions contemplated hereby or thereby, and shall not issue any such
press release or make any such public statement without the prior consent of the
other parties hereto (which consent shall not be unreasonably withheld or
delayed), except as may be required by applicable law or by obligations pursuant
to any listing agreement with any national securities exchange or national
market system to which Parent, its Affiliates, the Company or its Subsidiaries
is a party.
SECTION 6.8. Director and Officer Indemnification.
(a) Parent and Merger Sub agree that all rights to
indemnification or exculpation now existing in favor of the directors, officers,
employees and agents of the Company and its Subsidiaries as provided in their
respective certificates of incorporation or bylaws (or other governing
documents) or otherwise in effect as of the date hereof with respect to matters
occurring prior to the Effective Time shall survive the Merger and shall
continue in full force and effect after the Effective Time. Any rights to
indemnification or exculpation pursuant to this Section 6.8(a) shall not be
amended, repealed or otherwise modified for a period of six years from the
Effective Time in a manner that would adversely affect the rights thereunder of
individuals who at the Effective Time were directors, officers, employees or
agents of the Company.
(b) From and after the Effective Time, the Surviving
Corporation shall, to the fullest extent permitted under the DGCL, indemnify and
hold harmless each present and former director and officer of the Company and
its Subsidiaries and each such individual who served at the request of the
Company or its Subsidiaries as a director, officer, trustee, partner, fiduciary,
employee or agent of another corporation, partnership, joint venture, trust,
pension or other employee benefit plan or enterprise (collectively, the
"Indemnified Parties") against all costs and expenses (including attorneys'
fees), judgments, fines, losses, claims, damages, liabilities and settlement
amounts paid in connection with any claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), whether
civil, administrative or investigative, based on the fact that such individual
is or was a director or officer of the Company or any of its Subsidiaries and
arising out of or pertaining to any action or omission occurring at or before
the Effective Time (including the transactions contemplated hereby). The
Surviving Corporation shall be entitled to assume the defense of any such claim,
action, suit, investigation or proceeding with counsel reasonably satisfactory
to the Indemnified Party and the Surviving Corporation shall not be liable to
any Indemnified Party for any legal expenses of separate counsel or any other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, except that if the Surviving Corporation elects not to assume
such defense or counsel for the Indemnified Party advises that there are issues
that raise conflicts of interest between the Surviving Corporation and the
Indemnified Party or such
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Indemnified Party shall have legal defenses available to it that are different
from or in addition to those available to the Surviving Corporation, the
Indemnified Party may retain counsel reasonably satisfactory to the Surviving
Corporation, and the Surviving Corporation shall pay all reasonable fees and
expenses of such counsel for the Indemnified Party promptly as statements
therefor are received; provided, that the Surviving Corporation shall not be
liable for the fees of more than one counsel with respect to a particular claim,
action, suit, investigation or proceeding, for all Indemnified Parties, other
than local counsel, unless a conflict of interest shall be caused thereby;
provided, further, that the Surviving Corporation shall not be liable for any
settlement effected without its written consent (which consent shall not be
unreasonably withheld or delayed).
(c) The Surviving Corporation shall provide or maintain in
effect for six years from the Effective Time (the "Tail Period"), through the
purchase of "run-off" coverage or otherwise, directors' and officers' and
corporate liability insurance covering those individuals who are covered by the
directors' and officers' and corporate liability insurance policy provided for
directors and officers of the Company and its Subsidiaries as of the date hereof
(the "Existing Policy") on terms (other than with respect to minimum aggregate
limits of liability for directors' and officers' and corporate liability
insurance coverage) comparable to the Existing Policy and such coverage shall
contain minimum aggregate limits of liability for directors' and officers' and
corporate liability insurance coverage for directors and officers of the Company
and its Subsidiaries of at least $10 million and deductibles no larger than
those customary for such type of insurance coverage; provided, however, that in
no event shall the Surviving Corporation be required to expend in excess of
$1,000,000 in aggregate premiums for such insurance coverage with respect to the
Tail Period, and if the premiums of such insurance coverage exceed such amount,
the Surviving Corporation shall be obligated to maintain or obtain a policy with
the greatest coverage available for a cost not exceeding such amount.
(d) If the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other Person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any Person, then, in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of the
Surviving Corporation, as the case may be, shall assume the obligations of the
Surviving Corporation set forth in this Section 6.8.
(e) The rights of each Indemnified Party under this Section
6.8 shall be in addition to any rights such individual may have under the
certificate of incorporation or bylaws (or other governing documents) of the
Company or any of its Subsidiaries, under the DGCL or any other applicable laws
or under any agreement of any Indemnified Party with the Company or any of its
Subsidiaries. These rights shall survive consummation of the Merger and are
intended to benefit, and shall be enforceable by, each Indemnified Party.
SECTION 6.9. No Solicitation.
(a) Except as set forth in this Section 6.9, the Company
agrees that, during the term of this Agreement, it shall not, and shall not
authorize or permit any of its Subsidiaries to, and shall use its commercially
reasonable efforts to cause its or its Subsidiaries' directors,
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officers, investment bankers, consultants, attorneys, agents or representatives,
directly or indirectly, not to (i) solicit, initiate or knowingly encourage or
facilitate, or furnish or disclose non-public information in furtherance of, any
inquiries or the making of any proposal with respect to a Company Competing
Transaction, (ii) negotiate, explore or otherwise engage in discussions with, or
furnish any information to, any Person (other than Parent, or its directors,
officers, employees, agents and representatives) with respect to any Company
Competing Transaction, or (iii) enter into any agreement, arrangement or
understanding with respect to a Company Competing Transaction. The Company
shall, and shall cause its Subsidiaries, and shall use commercially reasonable
efforts to cause the Company's and its Subsidiaries' respective directors,
officers, investment bankers, consultants, attorneys, agents and representatives
immediately to cease all existing activities, discussions and negotiations with
any parties conducted prior to the date hereof with respect to any inquiries or
proposals relating to a Company Competing Transaction.
(b) The Company Board shall not approve or recommend, or
propose publicly to approve or recommend, any Company Competing Transaction.
(c) From and after the execution of this Agreement, the
Company shall promptly advise Parent orally and in writing of any request for
information or of any proposal in connection with a Company Competing
Transaction, the material terms and conditions of such request or proposal and
the identity of the Person making such request or proposal.
SECTION 6.10. Resignation of Directors. Immediately prior to the
Effective Time, the Company shall deliver to Parent evidence satisfactory to
Parent of the resignation of all directors of the Company (other than those
directors set forth in a written notice of Parent to the Company), such
resignations to become effective as of the Effective Time.
SECTION 6.11. Privilege. The parties agree and acknowledge that the
disclosure, provision or furnishing of information, directly or indirectly, by
the Company under this Agreement shall not be deemed a waiver of any privilege
under applicable law that has been or may be asserted, including privileges
arising under or relating to the attorney-client relationship (which shall
include the attorney-client and work product privileges).
SECTION 6.12. Employee Matters.
(a) For a period of one year following the Effective Time, the
Surviving Corporation shall provide, or cause to be provided, to the employees
of the Company immediately prior to the Effective Time who continue employment,
employee benefit programs that provide employee compensation and benefits that
are, in the aggregate, generally comparable to those provided under employee
benefit programs provided for employees of the Company generally as of the date
hereof; provided, that, other than as required by applicable law or employment
agreements binding upon the Surviving Corporation or any of its Subsidiaries (in
the absence of the consent of the individuals party to such employment
agreements), the Surviving Corporation may at any time increase or reduce the
level of such benefit programs if such an increase or reduction shall be
determined to be advisable in the sole business judgment of the Surviving
Corporation. Notwithstanding the foregoing, this Section 6.12(a) shall not be
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construed as a guarantee of continued employment of the Company's employees for
a specified period.
(b) For purposes of vesting, eligibility to participate and
level of benefits (but not benefit accrual under pension or similar plans) under
the employee benefit plans of the Surviving Corporation and its Subsidiaries
providing benefits to any Company Employees after the Effective Time (the "New
Plans"), each Company Employee shall be credited with his or her years of
service with the Company and its Subsidiaries before the Effective Time, to the
same extent as such Company Employee was entitled, before the Effective Time, to
credit for such service under any similar Company employee benefit plan in which
such Company Employee participated or was eligible to participate immediately
prior to the Effective Time, provided, that the foregoing shall not apply to the
extent that its application would result in a duplication of benefits. In
addition, and without limiting the generality of the foregoing: (i) each Company
Employee shall be immediately eligible to participate, without any waiting time,
in any and all New Plans to the extent coverage under such New Plan is
comparable to a Company employee benefit plans or compensation arrangements or
agreements in which such Company Employee participated immediately before the
consummation of the Merger (such plans, collectively, the "Old Plans"); and (ii)
for purposes of each New Plan providing medical, dental, pharmaceutical and/or
vision benefits to any Company Employee, the Surviving Corporation shall cause
all pre-existing condition exclusions and actively-at-work requirements of such
New Plan to be waived for such employee and his or her covered dependents,
unless such conditions would not have been waived under the comparable plans of
the Company or its Subsidiaries in which such employee participated immediately
prior to the Effective Time and Parent shall cause any eligible expenses
incurred by such employee and his or her covered dependents during the portion
of the plan year of the Old Plan ending on the date such employee's
participation in the corresponding New Plan begins to be taken into account
under such New Plan for purposes of satisfying all deductible, coinsurance and
maximum out-of-pocket requirements applicable to such employee and his or her
covered dependents for the applicable plan year as if such amounts had been paid
in accordance with such New Plan.
(c) For a period of at least one year following the Effective
Time, the Surviving Corporation shall continue and cause to be honored the
Company's severance plan/policy listed on Section 6.12(c) of the Company
Disclosure Schedule as in effect prior to the Effective Time without any
amendments adverse to Company Employees.
(d) The Company's annual bonuses for the fiscal year ending in
2005 under the Company's Executive Incentive Plan shall be determined based upon
the incentive compensation targets set forth in Section 6.12(d) of the Company
Disclosure Schedule.
(e) Each party hereto shall use all reasonable efforts, at
request of the other, to take all actions necessary and sufficient to satisfy
any notice or information requirements relating to disclosure of the
transactions contemplated under this Agreement (i) to each works council or
other similar body established or maintained for the benefit of the employees of
the Company or any of its Subsidiaries, as may be required under applicable law
or regulation in the jurisdiction in which such employees are employed by the
Company or any of its subsidiaries; (ii) to any Governmental Entity, as may be
required under applicable law or otherwise from the Company or any of its
Subsidiaries; and (iii) as may be required under any collective bargaining
agreement
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applicable to employees of the Company or any of its Subsidiaries. A
list of such notice or information requests is set forth in Section 6.12(e) of
the Company Disclosure Schedule.
SECTION 6.13. Interests in Subsidiaries. The Company shall use its
reasonable best efforts to cause, effective as of the Effective Time, each
person set forth in Exhibit E hereto to transfer to Parent or Parent's designee
all equity interests held by such Person in the Subsidiary or Subsidiaries of
the Company set forth opposite such Person's name on Exhibit E.
SECTION 6.14. Management Agreement. The Company shall terminate the
Management Agreement at or prior to Closing.
SECTION 6.15. Debt.
(a) Following the Closing, the Parent will cause Seminis
Vegetable Seeds, Inc. to comply with its obligation to make a "Change of Control
Offer" in accordance with Section 4.08 of the Company Indenture.
(b) On or after the Closing Date, the Parent will cause
Seminis Vegetable Seeds, Inc. to pay when due any amounts which may become due
under the Company Credit Agreement as a result of the consummation of the
Merger, including any amounts which may become due as a result of Section
7.01(h) thereof.
ARTICLE VII.
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.1. Conditions to the Merger.
(a) The obligation of the Company to consummate the Merger and
the other transactions contemplated hereby is subject to the satisfaction or
waiver (to the extent permitted by applicable law) at or prior to the Effective
Time of each of the following conditions:
(i) Accuracy of Representations and Warranties. The
representations and warranties made by Parent and Merger Sub herein,
disregarding all qualifications and exceptions contained herein
relating to materiality or Parent Material Adverse Effect or words of
similar import, shall be true and correct on the date hereof and on the
Closing Date as if made on and as of such dates (except for
representations and warranties that are made as of a specified date,
which shall be true and correct only as of such specified date) with
only such exceptions as would not, individually or in the aggregate,
have a Parent Material Adverse Effect.
(ii) Compliance with Covenants. Each of Parent and
Merger Sub shall have performed in all material respects (or with
respect to any obligation or agreement qualified by materiality or
Parent Material Adverse Effect, in all respects) all obligations and
agreements, and complied in all material respects (or with respect to
any covenant qualified by materiality or Parent Material Adverse
Effect, in all respects) with all covenants, contained in this
Agreement to be performed or complied with by it prior to or on the
Closing Date.
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(iii) Officer's Certificates. The Company shall have
received a certificate of Parent, dated as of the Closing Date, signed
by an executive officer of Parent to evidence satisfaction of the
conditions set forth in Sections 7.1(a)(i) and (ii).
(b) The obligation of Parent and Merger Sub to consummate the
Merger and the other transactions contemplated hereby is subject to the
satisfaction or waiver (to the extent permitted by applicable law) at or prior
to the Effective Time of each of the following conditions:
(i) Accuracy of Representations and Warranties. The
representations and warranties made by the Company herein, disregarding
all qualifications and exceptions contained herein relating to
materiality or Company Material Adverse Effect or words of similar
import, shall be true and correct on the date hereof and on the Closing
Date as if made on and as of such dates (except for representations and
warranties that are made as of a specified date, which shall be true
and correct only as of such specified date) with only such exceptions
as would not have, individually or in the aggregate, a Company Material
Adverse Effect.
(ii) Compliance with Covenants. The Company shall
have performed in all material respects (or with respect to any
obligation or agreement qualified by materiality or Company Material
Adverse Effect, in all respects) all obligations and agreements, and
complied in all material respects (or with respect to any covenant
qualified by materiality or Company Material Adverse Effect, in all
respects) with all covenants, contained in this Agreement to be
performed or complied with by it prior to or on the Closing Date.
(iii) Approvals. All clearances and approvals listed
in Section 7.1(b)(iii) of the Company Disclosure Schedule ("Required
Approvals") shall have been obtained by the Company and shall remain in
full force and effect; provided, however, that this condition shall be
deemed satisfied fifteen days after all clearances and approvals listed
in Section 7.1(b)(iii)(A) of the Company Disclosure Schedule have been
obtained by the Company.
(iv) Officer's Certificate. Parent shall have
received a certificate of the Company, dated as of the Closing Date,
signed by an executive officer of the Company to evidence satisfaction
of the conditions set forth in Sections 7.1(b)(i) and (ii).
(v) No Litigation. After the date hereof, there shall
not be (A) any new suit, action or proceeding by any Governmental
Entity or any other Person or (B) any development in any existing suit,
action or proceeding by any Governmental Entity or any other Person
that, in any such case is more likely than not, individually or in the
aggregate, to have a Company Material Adverse Effect (for purposes of
this clause (v) only, excluding the reference to the phrase "or is
reasonably expected to be" from the definition of Company Material
Adverse Effect).
(vi) Foreign Investment in Real Property Tax Act.
Parent shall have received duly executed and acknowledged affidavits of
the Company, in form
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substantially identical to those attached hereto as Exhibit D in
accordance with Treasury Regulation Sections 1.1445-2(c)(3),
1.897-2(g), 1.897-2(g) and 1.897-2(h), certifying that each "interest"
in the Company (within the meaning of Section 897(c)(1) of the Code)
is not a "United States real property interest" within the meaning of
Section 897(c) of the Code.
SECTION 7.2. Conditions to Each Party's Obligations to Effect the
Merger. The respective obligations of each party hereto to effect the Merger and
the other transactions contemplated hereby are further subject to the
satisfaction at or prior to the Effective Time of each of the following
conditions, any and all of which may be waived in whole or in part by the
parties hereto to the extent permitted by applicable law:
(a) Statutes; Court Orders. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated, issued or enforced by any Governmental Entity that prohibits,
restrains, enjoins, precludes or restricts the consummation of the Merger.
(b) Stockholder Approval. The Company Stockholder Approval
shall have been validly obtained under the DGCL and the Company's certificate of
incorporation and bylaws.
ARTICLE VIII.
TERMINATION; AMENDMENT; WAIVER
SECTION 8.1. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time:
(a) by mutual written consent duly authorized by the Company
Board and the board of directors of Parent;
(b) by Parent or the Company, if (i) any Governmental Entity
shall have enacted, entered, promulgated, issued or enforced a final statute,
rule, regulation, executive order, decree, ruling or injunction (which statute,
rule, regulation, executive order, decree, ruling or injunction the parties
hereto shall use their commercially reasonable efforts to reverse, overturn or
lift) or taken any other final action restraining, enjoining or otherwise
prohibiting the Merger and such order, decree, ruling or other action is or
shall have become final and nonappealable, or (ii) the Effective Time shall not
have occurred on or before the Outside Date; provided, however, that the right
to terminate this Agreement under this clause (ii) shall not be available to any
party hereto whose failure to fulfill any obligation under this Agreement has
been the cause of, or resulted in, the failure of the Effective Time to occur on
or before the Outside Date;
(c) by Parent, if there shall have been a material breach of
any of the Company's representations, warranties or covenants, which breach (A)
would give rise to the failure of a condition set forth in Section 7.1(b) or
Section 7.2, and (B) is not capable of being cured prior to the Outside Date or,
if curable, has not been cured within 20 Business Days
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following receipt by the Company of written notice from Parent and Merger Sub of
such breach; or
(d) by the Company, if there shall have been a material breach
of any of Parent's or Merger Sub's representations, warranties or covenants,
which breach (i) would give rise to the failure of a condition set forth in
Section 7.1(a) or Section 7.2 and (ii) is not capable of being cured prior to
the Outside Date or, if curable, has not been cured within 20 Business Days
following receipt by Parent and Merger Sub of written notice from the Company of
such breach.
SECTION 8.2. Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.1, written notice thereof
shall forthwith be given to the other party or parties in accordance with
Section 9.4, specifying the provision hereof pursuant to which such termination
is made, and this Agreement shall forthwith become void and have no effect,
without any liability on the part of any of the Company or its Subsidiaries or
its Affiliates or Parent or its Affiliates or their respective directors,
officers, employees or stockholders, other than the provisions of this Section
8.2 and Section 8.3; provided, however, that nothing contained in this Section
8.2 shall relieve any party from liability for any willful and material breach
of this Agreement.
SECTION 8.3. Expenses. Except as specifically provided in this Section
8.3, all costs and expenses incurred in connection with this Agreement, the
Related Agreements, the Merger, the Related Transactions and the other
transactions contemplated by this Agreement and the Related Agreements shall be
paid by the party incurring such expenses, regardless of whether the Merger and
the Related Transactions or any other transaction contemplated by this Agreement
or the Related Agreements is consummated. Unless previously paid by the Company,
Parent shall pay the expenses listed in Section 8.3 of the Company Disclosure
Schedule at the Closing.
SECTION 8.4. Amendment. This Agreement may be amended at any time by an
instrument in writing signed by all of the parties.
SECTION 8.5. Waiver. At any time prior to the Effective Time, any party
hereto may (i) extend the time for the performance of any of the obligations or
other acts of the other party, (ii) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document, certificate or writing delivered pursuant hereto, or (iii) waive
compliance by the other party with any of the agreements or conditions contained
herein. Any agreement on the part of any party or parties hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party or parties. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such rights.
ARTICLE IX.
MISCELLANEOUS
SECTION 9.1. Nonsurvival of Representations and Warranties. The
representations and warranties made herein shall not
survive beyond the Effective Time.
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SECTION 9.2. Entire Agreement; Assignment. This Agreement, the Related
Agreements (including the schedules and Exhibits hereto and thereto) and the
Confidentiality Agreement constitute the entire agreement among the parties
hereto with respect to the subject matter hereof and supersede all other prior
agreements and understandings, both written and oral, between the parties hereto
with respect to the subject matter hereof. This Agreement shall not be assigned
by operation of law or otherwise, except that Parent may assign any or all of
its rights and obligations under this Agreement to an Affiliate of Parent, but
no such assignment shall relieve Parent of its obligations hereunder if such
assignee does not perform such obligations.
SECTION 9.3. Severability. If any provision of this Agreement, or the
application thereof to any Person or circumstance, is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other Persons or circumstances shall not be affected thereby, and
to such end, the provisions of this Agreement are agreed to be severable. Upon
such determination that any provision is invalid or unenforceable, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties hereto as closely as possible in a manner
acceptable to all parties hereto.
SECTION 9.4. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing (including by facsimile with
written confirmation thereof) and unless otherwise expressly provided herein,
shall be delivered during normal business hours by hand, by Federal Express or
other nationally recognized overnight commercial delivery service, or by
facsimile notice, confirmation of receipt received, addressed as follows, or to
such other address as may be hereafter notified by the respective parties
hereto:
(a) If to Parent or Merger Sub:
Monsanto Company
800 North Lindbergh Boulevard
Saint Louis, Missouri 63167
Attention: General Counsel
Facsimile: (314) 694-6399
With copies, which will not constitute notice, to:
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019
Attention: William H. Gump, Esq.
Facsimile: 212-728-8111
(b) If to the Company:
Seminis, Inc.
2700 Camino del Sol
Oxnard, California 93030-7967
Attention: Chief Executive Officer
Facsimile: 805-918-2530
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With copies, which will not constitute notice, to:
Seminis, Inc.
2700 Camino del Sol
Oxnard, California 93030-7967
Attention: General Counsel
Facsimile: 805-918-2530
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Mitchell S. Presser, Esq.
Facsimile: 212-403-2000
SECTION 9.5. Governing Law; Consent to Jurisdiction; Waiver of Jury
Trial.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of law thereof.
(b) The parties hereto hereby agree and consent to be subject
to the exclusive jurisdiction of the courts of the State of Delaware sitting in
the County of New Castle and the United States District Court for the State of
Delaware in any suit, action or proceeding seeking enforce any provision of, or
based on any matter arising out of or in connection with, this Agreement or the
Merger. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by law, (i) any objection that it may now or hereafter have to laying
venue of any suit, action or proceeding brought in such courts, and (ii) any
claim that any suit, action or proceeding brought in such courts has been
brought in an inconvenient forum.
(c) EACH OF PARENT, MERGER SUB AND THE COMPANY HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT, MERGER SUB OR THE COMPANY
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.
SECTION 9.6. Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled, without posting a bond or similar indemnity, to an injunction or
injunctions to prevent breaches of this Agreement or to enforce specifically the
performance of the terms and provisions hereof in any federal court located in
the State of Delaware or any Delaware state court, in addition to any other
remedy to which they are entitled at law or in equity.
SECTION 9.7. Interpretation. When a reference is made in this Agreement
to Articles, Sections, Exhibits or Schedules, such reference shall be to an
Article or Section of or Exhibit or Schedule to this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
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"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." Notwithstanding anything in this Agreement to
the contrary, each of the parties agrees to use its best efforts to obtain any
Required Approval.
SECTION 9.8. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and its successors and
permitted assigns, and except as provided in Section 6.8 and as otherwise
explicitly provided in this Agreement, nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 9.9. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed on its behalf as of the day and year first above
written.
MONSANTO COMPANY
By: /s/ Hugh Grant
-------------------------------------
Name: Hugh Grant
Title: Chairman, President and Chief
Executive Officer
MONSANTO SUB, INC.
By: /s/ Terrell K. Crews
-------------------------------------
Name: Terrell K. Crews
Title: President
SEMINIS, INC.
By: /s/ Bernardo Jimenez
--------------------------------------
Name: Bernardo Jimenez
Title: CFO