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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
UNDER THE SECURITIES ACT OF 1934
MYCOGEN CORPORATION
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(NAME OF SUBJECT COMPANY)
Common Stock, par value $.001 per share (Including the Associated Rights)
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(TITLE OF CLASS OF SECURITIES)
628452 10 4
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(CUSIP NUMBER OF CLASS OF SECURITIES)
John Scriven J. Pedro Reinhard Louis W. Pribila
Vice President and President Vice President, Secretary
General Counsel Rofan Services Inc. and General Counsel
The Dow Chemical Company 2030 Dow Center DowElanco
2030 Dow Center Midland, MI 48674 9330 Zionsville Road
Midland, MI 48674 (517) 636-1000 Indianapolis, IN 46236
(517) 636-1000 (317) 337-3000
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS
January 15, 1996
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(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1 (b) (3) or (4), check the following
box [_]
Check the following box if a fee is being paid with the statement [X].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
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CUSIP NO.: 628452 10 4 13D
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S IDENTIFICATION NOS. OF ABOVE PERSONS
The Dow Chemical Company (#38-1285128)
Rofan Services Inc. (#38-2853855)
DowElanco (#35-1781118)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) (_)
(b) (_)
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) (_)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
The Dow Chemical Company - Delaware
Rofan Services Inc. - Delaware
DowElanco - Indiana
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NUMBER OF 7 SOLE VOTING POWER
SHARES 9,502,348 *
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BENEFICIALLY
8 SHARED VOTING POWER
OWNED BY
O
EACH
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9 SOLE DISPOSITIVE POWER
REPORTING
0
PERSON
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WITH 10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,502,348 shares of Common Stock
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (_)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
36.58%
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Page 2 of 21 Pages
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14 TYPE OF REPORTING PERSON
The Dow Chemical Company CO
Rofan Services Inc. CO
DowElanco PN
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* The power to vote is pursuant to an irrevocable proxy contained in the
Stock Purchase Agreement dated January 15, 1996 among DowElanco, The
Lubrizol Corporation and AGC Holdings, Inc. DowElanco is an Indiana
general partnership whose 60% general partner is Rofan Services Inc., a
wholly-owned subsidiary of The Dow Chemical Company.
Page 3 of 21 Pages
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ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, $.001 par value per share (the
"Common Stock") of Mycogen Corporation, a California corporation ("Mycogen")
whose principal executive offices are located at 5501 Oberlin Drive, San Diego,
California 92121-1718.
ITEM 2. IDENTITY AND BACKGROUND.
The Dow Chemical Company, a Delaware corporation ("TDCC"), is engaged in
the manufacture and sale of chemicals, plastic materials, pharmaceuticals,
agricultural and consumer products and other specialized products. TDCC's
principal business and executive offices are located at 2030 Dow Center,
Midland, Michigan 48674.
Rofan Services Inc., a Delaware corporation ("Rofan") is a wholly-owned
subsidiary of TDCC and the 60% general partner of DowElanco. Rofan's principal
executive offices are located at 2030 Dow Center, Midland, Michigan 48674.
Rofan has no significant independent operations other than its partnership
interests in DowElanco and other entities.
DowElanco, an Indiana general partnership ("DowElanco") is engaged in the
manufacture and sale of agricultural chemicals and seed. DowElanco's principal
business and executive offices are located at 9330 Zionsville Road,
Indianapolis, Indiana 46268.
DowElanco's remaining 40% general partner is EPCO, Inc., an Indiana
corporation and a wholly-owned subsidiary of Eli Lilly and Company, an Indiana
corporation. The principal business and executive offices of EPCO, Inc. and Eli
Lilly and Company are located at Lilly Corporate Center, Indianapolis, Indiana
46285.
A list of certain of TDCC's executive officers, all having business
addresses which are the same as TDCC's principal executive offices, is set forth
below:
Chairman of the Board Frank P. Popoff
President and CEO William S. Stavropoulos
Financial Vice President, Treasurer
and Chief Financial Officer J. Pedro Reinhard
Executive Vice President Enrique C. Falla
Group Vice President Anthony J. Carbone
Group Vice President Michael D. Parker
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A list of TDCC's directors, their addresses and their principal occupation
or employment is noted below:
Jacqueline K. Barton Enrique C. Falla
California Institute of Technology The Dow Chemical Company
Division of Chem. & Chem. Engr. 2020 Dow Center
Mail Code 127-72 Midland, MI 48674
Pasadena, CA 91125
Barbara H. Franklin
David T. Buzzelli Barbara Franklin Enterprises
The Dow Chemical Company 2600 Virginia Avenue NW
2020 Dow Center Washington, DC 20037
Midland, MI 48674
Allan D. Gilmour
Anthony J. Carbone The Dow Chemical Company
The Dow Chemical Company 2020 Dow Center
2020 Dow Center Midland, MI 48674
Midland, MI 48674
William J. Neely
Fred P. Corson The Dow Chemical Company
The Dow Chemical Company 2030 Dow Center
2020 Dow Center Midland, MI 48674
Midland, MI 48674
Michael D. Parker
Willie D. Davis The Dow Chemical Company
All Pro Broadcasting, Inc. 2020 Dow Center
161 N. LaBrea Avenue Midland, MI 48674
Inglewood, CA 90301
Frank P. Popoff
Michael L. Dow The Dow Chemical Company
Michael L. Dow, Associates 2020 Dow Center
General Aviation Building Midland, MI 48674
Capital City Airport
Lansing, MI 48906 J. Pedro Reinhard
The Dow Chemical Company
Joseph L. Downey 2020 Dow Center
The Dow Chemical Company Midland, MI 48674
2020 Dow Center
Midland, MI 48674 Harold T. Shapiro
Princeton University
1 Nassau Hall
Princeton, NJ 08544
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William S. Stavropoulos Paul G. Stern
The Dow Chemical Company Thayer Capital Partners
2020 Dow Center 901 Fifteenth Street, N.W.
Midland, MI 48674 Washington, DC 20005
A list of certain of Rofan's executive officers, all having business
addresses which, are the same as Rofan's principal executive offices, is set
forth below:
President J. Pedro Reinhard
Vice President Robert W. Dupree, Jr.
Vice President J. Frank Whitley, Jr.
Treasurer Henry Kahn
Vice President and Secretary Eric P. Blackhurst
Vice President Murray N. Trask
A list of Rofan's directors, their addresses and their principal occupation
or employment is noted below:
Henry Kahn
The Dow Chemical Company
2030 Dow Center
Midland, MI 48674
J. Pedro Reinhard
The Dow Chemical Company
2020 Dow Center
Midland, MI 48674
Eric P. Blackhurst
The Dow Chemical Company
DOC Center
235 North Main Street
Midland, MI 48640
Of the foregoing executive officers and directors of TDCC and Rofan, all
are United States citizens except J. Pedro Reinhard and Michael D. Parker who
are citizens of Brazil and Great Britain, respectively.
During the last five years, none of the foregoing persons or entities have
been (a) convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (b) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
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violations of, or prohibiting or mandating activities subject to, Federal or
state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On January 15, 1996, DowElanco entered into an Exchange and Purchase
Agreement (the "Exchange and Purchase Agreement") among Mycogen, Agrigenetics,
Inc., a Delaware corporation and wholly-owned subsidiary of Mycogen
("Agrigenetics") and United AgriSeeds, Inc., a Delaware corporation and wholly-
owned subsidiary of DowElanco ("UAS"). Pursuant to the Exchange and Purchase
Agreement DowElanco has agreed to acquire (a) 2,707,884 shares of Common Stock
and a $100,000 promissory note of Agrigenetics (the "Promissory Note") in
exchange for all of the outstanding common stock of UAS and (b) 1,745,450 shares
of Common Stock in exchange for $26,400,000. The consideration under the
Exchange and Purchase Agreement is subject to adjustment based on the tangible
net worth of UAS as of the closing of the transactions contemplated by the
Exchange and Purchase Agreement (the "Mycogen Closing"). Pursuant to the
Exchange and Purchase Agreement, Mycogen, Agrigenetics and DowElanco have agreed
to execute and deliver at the Mycogen Closing an agreement (the "Technology
Agreement") providing for the exchange between the parties of certain currently
existing genes and tools and certain new genes and tools developed or acquired
during the five year period following the Mycogen Closing. The obligations of
each party to effect the Mycogen Closing are subject to certain conditions as
more fully set forth below.
Also on January 15, 1996, DowElanco entered into a Stock Purchase Agreement
(the "Stock Purchase Agreement") among The Lubrizol Corporation, an Ohio
corporation ("Lubrizol") and AGC Holdings, Inc., a Delaware corporation and a
second-tier wholly-owned subsidiary of Lubrizol ("AGC"). Pursuant to the Stock
Purchase Agreement, DowElanco has agreed to acquire 9,502,348 shares of Common
Stock from AGC and Lubrizol in exchange for approximately $126,217,849. In
addition, if the closing of the transactions contemplated by the Stock Purchase
Agreement (the "Lubrizol Closing") occurs on or after February 29, 1996,
DowElanco will pay interest, for each day beginning on February 29, 1996 through
and including the Lubrizol Closing, on the amount of $124,938,000 at a rate
equal to the Six-Month London Interbank Offered Rate ("LIBOR") in effect from
time to time divided by 365 from February 29, 1996 until the Lubrizol Closing.
In addition, in the event any additional options to purchase shares of Common
Stock vest prior to the Lubrizol Closing, Lubrizol has agreed to exercise, or
cause the exercise of such options and to sell the resulting shares of Common
Stock to DowElanco in exchange for the difference between $13.00 and the average
option exercise price for such options. The obligations of each party to effect
the Lubrizol Closing are subject to certain conditions as more fully set forth
below.
DowElanco expects to obtain the funds required to effect the transactions
contemplated by the Exchange and Purchase Agreement and the Stock Purchase
Agreement from working capital and other internal sources.
ITEM 4. PURPOSE OF TRANSACTION.
The purpose of the transactions contemplated by the Exchange and Purchase
Agreement for DowElanco is to acquire approximately 4.45 million shares of
Common Stock from Mycogen, to cause UAS to become a wholly-owned indirect
subsidiary of Mycogen and, pursuant to the Technology Agreement, to acquire
access to certain technology of Mycogen.
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The purpose of the transaction contemplated by the Stock Purchase Agreement for
DowElanco is to acquire approximately 9.5 million shares of Common Stock from
Lubrizol.
If the Mycogen Closing occurs and the Lubrizol Closing also occurs,
DowElanco will own approximately 45.86% of the outstanding Common Stock and will
be entitled to designate the number of Mycogen directors equal to the nearest
whole number that is less than one-half of the total number of Mycogen
directors. DowElanco's ability to acquire more Common Stock or to designate
additional Mycogen directors is subject to certain restrictions imposed by the
Exchange and Purchase Agreement, as described more fully below. However, the
Exchange and Purchase Agreement, after the Mycogen Closing, would not prohibit
DowElanco from acquiring a majority of the Common Stock, at which time it would
have the right to designate a majority of Mycogen's directors. It is likely
that DowElanco will attempt to acquire a majority of the Common Stock and
designate a majority of Mycogen's directors if the Mycogen Closing occurs and
the Lubrizol Closing also occurs, although DowElanco has not made a final
decision on this matter.
DowElanco has agreed that, unless another person or group has made a
proposal to acquire 25% or more of the Common Stock, (a) for a period of two
years from the earlier to occur of the Mycogen Closing or, under certain
circumstances, the termination of the Exchange and Purchase Agreement (the
"Measurement Date") DowElanco will not acquire more than 60% of the outstanding
Common Stock and (b) from the second anniversary of the Measurement Date to the
third anniversary of the Measurement Date, DowElanco will not acquire more than
65% of the outstanding Common Stock, (in the case of both (a) and (b), excluding
shares of Common Stock, if any, purchased directly from Mycogen or its employees
after the Measurement Date). In any event, DowElanco has agreed not to acquire
from any person more than 79.9% of the total outstanding shares of Common Stock
for three years after the Measurement Date and after that time only pursuant
to a "Buyout Transaction" as described below.
Following the third anniversary of the Measurement Date, DowElanco may
increase its beneficial ownership of Common Stock above 79.9% of the total
outstanding shares only pursuant to a tender offer, merger or similar
transaction (but not a sale of assets) for all of the outstanding shares of
Common Stock that offers each holder of Common Stock other than DowElanco the
opportunity to dispose of some or all of their Common Stock at the value that an
unaffiliated third party would be expected to pay in an arms'-length transaction
negotiated by a willing seller and a willing buyer for all of Mycogen's then
outstanding shares of Common Stock and not taking into account the potentially
controlling position of DowElanco (a "Buyout Transaction"). A Buyout Transaction
may only be effected if approved by a majority of Mycogen's independent
directors or if the value to be offered to holders of Common Stock is determined
through arbitration by an independent appraiser.
Following the Mycogen Closing, Mycogen has agreed to establish, upon
DowElanco's request, a voluntary procedure by which DowElanco will be permitted
to purchase shares of
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Common Stock from participating employees of Mycogen upon the exercise of
employee stock options by such participating employees. DowElanco will have no
obligation to purchase any shares of Common Stock pursuant to such procedures.
The board of directors of Mycogen is currently comprised of six members.
For a period of three years following the Measurement Date, (a) at any time
DowElanco is the beneficial owner of less than 20% of the outstanding Common
Stock, DowElanco will be entitled to designate for nomination one person to
serve on the board of directors of Mycogen, (b) at any time DowElanco is the
beneficial owner of 20% or more but less than 30% of the outstanding Common
Stock, DowElanco will be entitled to designate for nomination two directors of
Mycogen, (c) at any time DowElanco is the beneficial owner of 30% or more but
less than 50% of the outstanding Common Stock, Mycogen will cause its board of
directors to consist of seven members and DowElanco will be entitled to
designate for nomination three (or, if the number of directors is other than
seven, the nearest whole number less than one-half times the total number of
directors) directors of Mycogen and (d) at any time DowElanco is the beneficial
owner of more than 50% of the outstanding Common Stock, Mycogen will cause its
board of directors to consist of nine directors and DowElanco will be entitled
to designate for nomination five (or, if the number of directors is other than
nine, the nearest whole number greater than one-half times the total number of
directors) directors of Mycogen.
Under the Stock Purchase Agreement, Lubrizol and AGC have agreed to obtain
the resignations of the directors nominated by Lubrizol and AGC to serve on the
board of directors of Mycogen as a condition to DowElanco's obligations to
effect the Lubrizol Closing. In accordance with the rights of DowElanco set
forth above, it is expected that persons designated for nomination by DowElanco
will be nominated to fill the vacancies created by such resignations.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) If the Mycogen Closing occurs and the Lubrizol Closing also occurs,
DowElanco will own an aggregate of 13,955,682 shares of Common Stock which will,
upon issuance by Mycogen of 4,453,334 of such shares of Common Stock at the
Mycogen Closing, represent approximately 45.86% of the then total outstanding
shares of Common Stock (based on the number of shares of Common Stock
outstanding at January 12, 1996 and assuming the consummation of the
transactions contemplated by the Exchange and Purchase Agreement and the Stock
Purchase Agreement).
(b) Lubrizol and AGC have granted DowElanco an irrevocable proxy to vote
9,487,349 currently outstanding shares of Common Stock and 14,999 shares of
Common Stock which may be issued upon the exercise of options. In addition to
such irrevocable proxy, Lubrizol and AGC have agreed, if that proxy is for any
reason invalid, to vote any shares of Common Stock held by them against certain
matters which would conflict with or impede the transactions contemplated by the
Exchange and Purchase Agreement or the Stock Purchase Agreement and in favor of
any action or agreement that would further the
Page 9 of 21 Pages
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consummation of the transactions contemplated by the Exchange and Purchase
Agreement or the Stock Purchase Agreement.
(c) None of TDCC, Rofan, DowElanco or their respective affiliates have
effected any transactions in the Common Stock in the past sixty days except, in
the case of DowElanco, for the execution on January 15, 1996 of the Exchange and
Purchase Agreement and the Stock Purchase Agreement.
(d) None of TDCC, Rofan, DowElanco or their respective affiliates is known
to have the right to receive or the power to direct the receipt of dividends
from, or the proceeds from the sale of any shares of Common Stock.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENT, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
The following summaries of certain terms of the Exchange and Purchase
Agreement and the Stock Purchase Agreement do not purport to be complete and are
qualified in their entirety by reference to the complete text of the Exchange
and Purchase Agreement and the Stock Purchase Agreement, which are filed as
exhibits to this Schedule 13D and incorporated herein by reference.
THE EXCHANGE AND PURCHASE AGREEMENT
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Sale and Purchase of Common Stock and the Promissory Note. Upon the terms
and subject to satisfaction or, if appropriate, waiver of all of the conditions
described below under "Conditions to the Parties' Obligations," at the Mycogen
Closing DowElanco will acquire (a) 2,707,884 shares of Common Stock and the
Promissory Note in exchange for all of the outstanding common stock of UAS and
(b) 1,745,450 shares of Common Stock in exchange for $26,400,000. The
consideration for the Exchange and Purchase Agreement is subject to an
adjustment based on the tangible net worth of UAS at the Mycogen Closing.
Representations and Warranties. The Exchange and Purchase Agreement
contains representations and warranties of Mycogen relating to, among other
things (a) organization, qualification and similar corporate matters, (b)
capitalization of Mycogen, (c) capitalization of Agrigenetics, (d) the
authorization, execution, delivery, performance and enforceability of the
Exchange and Purchase Agreement, (e) waiver of Mycogen's amended and restated
Rights Agreement dated as of October 19, 1995 between Mycogen and The First
National Bank of Boston (the "Rights Agreement"), (f) the non-contravention of
the Exchange and Purchase Agreement and related transactions with any charter
provision, by-law, material contract, order, law or regulation to which Mycogen
or Agrigenetics is a party or by which it is bound or obligated, (g) the filing
of required Securities and Exchange Commission reports and the absence of untrue
statements of material facts or omissions of material facts, (h) the absence of
changes or events which have had a Material Adverse Effect on Mycogen, (i)
broker's fees and expenses, (j) the absence of claims and litigation, (k) the
filing of tax returns and the payment of taxes, (l)
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employee benefits and labor matters, (m) compliance with laws, rules, statutes,
orders, ordinances or regulations, National Association of Securities Dealers
rules, and material notes, bonds, mortgages, indentures, contracts, agreements,
leases, licenses, permits, franchise or other instruments or obligations of
Mycogen or any of its subsidiaries, (n) the absence of environmental claims and
compliance with all environmental laws and regulations, (o) possession of all
necessary rights and licenses in intellectual property, (p) significant
agreements, and (q) possession of all necessary right, title and interest in
product registrations relating to seeds, pesticides or genetically modified
products.
The Exchange and Purchase Agreement contains representations and
warranties of DowElanco relating to, among other things (a) organization,
qualification, standing and similar corporate matters, (b) the authorization,
execution, delivery, performance and enforceability of the Exchange and Purchase
Agreement, (c) the non-contravention of the Exchange and Purchase Agreement and
related transactions with any charter provision, by-law, material contract,
order, law or regulation to which DowElanco or UAS is a party or by which they
are bound or obligated, (d) capitalization of UAS, (e) financial statements of
UAS, (f) the absence of changes or events which have had a Material Adverse
Effect on UAS, (g) broker's fees and expenses, (h) the absence of claims and
litigation, (h) the filing of tax returns and the payment of taxes, (i) employee
benefits and labor matters, (j) compliance with laws, rules, statutes, orders,
ordinances or regulations, and material notes, bonds, mortgages, indentures,
contracts, agreements, leases, licenses, permits, franchise or other instruments
or obligations of DowElanco or UAS, (k) the absence of environmental claims and
compliance with all environmental laws and regulations, (l) possession of all
necessary rights and licenses in intellectual property, (m) significant
agreements, (n) the accuracy and completeness of charter documents and corporate
records, (o) the ownership or the right to use all assets used predominantly in
or necessary for the conduct of UAS's business as currently conducted, (p)
government authorization, (q) employee relations, and (r) the investment intent
of DowElanco.
Conditions to the Parties' Obligations. The obligations of Mycogen,
Agrigenetics, DowElanco and UAS under the Exchange and Purchase Agreement are
subject to the satisfaction or, if appropriate, waiver of the following
conditions:
(a) No Prohibition. No order, decree or ruling or other action
restraining, enjoining or otherwise prohibiting the transactions
contemplated by the Exchange and Purchase Agreement, or the purchase of
shares of Common Stock by DowElanco pursuant to the Stock Purchase
Agreement, will have been issued or taken by any court of competent
jurisdiction or other governmental body located or having jurisdiction
within the United States or any country or economic region in which Mycogen
or any of its subsidiaries or DowElanco or any of its affiliates, directly
or indirectly, has material assets or operations.
(b) HSR Act; No Material Modification. Any waiting period under the
HSR Act applicable to the transactions contemplated by the Exchange and
Purchase Agreement or the Stock Purchase Agreement will have terminated or
expired and there will have been no material modification to the terms of
the transactions
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contemplated by the Exchange and Purchase Agreement or the Stock Purchase
Agreement.
The obligations of DowElanco and UAS under the Exchange and Purchase
Agreement are subject to the satisfaction or, if appropriate, waiver of the
following conditions:
(a) Directors. Provision will have been made to the reasonable
satisfaction of DowElanco that Mycogen's board of directors will have the
composition described below under the heading "Election of Directors."
(b) Stock Purchase Agreement. The Stock Purchase Agreement will not
have been terminated.
(c) Performance. Mycogen and Agrigenetics will have performed in all
material respects their respective covenants, agreements and obligations
under the Exchange and Purchase Agreement to the date of the Mycogen
Closing.
(d) Representations and Warranties True. Except as otherwise
contemplated by the Exchange and Purchase Agreement, the representations
and warranties of Mycogen which are qualified as to materiality will be
true and correct in all material respects and which are not so qualified
will be true and correct in all material respects, in each case, as of the
date when made and at and as of the Mycogen Closing as though newly made at
and as of that time, except that the representations and warranties made as
of a particular date need only be so true and correct as of such date.
(e) Certificate. Mycogen will have delivered to DowElanco a
certificate dated as of the Mycogen Closing and signed by the President and
the Chief Financial Officer of Mycogen certifying as to (i) the accuracy,
as of the date when made and at and as of the Mycogen Closing as though
newly made at and as of that time, of the representations and warranties of
Mycogen contained in the Exchange and Purchase Agreement which are
qualified as to materiality (except that representations and warranties
made as of a particular date need only be so accurate as of such date),
(ii) the accuracy, as of the date when made and at and as of the Mycogen
Closing as though newly made at and as of that time, in all material
respects of the representations and warranties of Mycogen contained in the
Exchange and Purchase Agreement which are not so qualified (except that
representations and warranties made as of a particular date need only be so
accurate as of such date), and (iii) the performance in all material
respects of the obligations required by Mycogen and Agrigenetics to be
performed under the Exchange and Purchase Agreement as of the Mycogen
Closing.
(f) Deliveries by Mycogen and Agrigenetics. Mycogen and Agrigenetics
will have delivered, or will deliver concurrently with the Mycogen Closing,
4,453,334 shares of Common Stock, the Promissory Note and the documents and
any other instruments required to be delivered by Mycogen and Agrigenetics.
Page 12 of 21 Pages
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The obligations of Mycogen and Agrigenetics under the Exchange and Purchase
Agreement are subject to the satisfaction or, if appropriate, waiver of the
following conditions:
(a) Performance. DowElanco and UAS will have performed in all
material respects their respective covenants, agreements and obligations
under the Exchange and Purchase Agreement to the date of the Mycogen
Closing.
(b) Representations and Warranties True. Except as otherwise
contemplated by the Exchange and Purchase Agreement, the representations
and warranties of DowElanco which are qualified as to materiality will be
true and correct in all material respects and which are not so qualified
will be true and correct in all material respects, in each case, as of the
date when made and at and as of the Mycogen Closing as though newly made at
and as of that time, except that the representations and warranties made as
of a particular date need only be so true and correct as of such date.
(c) Certificate. DowElanco will have delivered to Mycogen a
certificate dated as of the Mycogen Closing and signed by the Chief
Financial Officer and General Counsel of DowElanco certifying as to (i) the
accuracy, as of the date when made and at and as of the Mycogen Closing as
though newly made at and as of that time, of the representations and
warranties of DowElanco contained in this Agreement which are qualified as
to materiality (except that representations and warranties made as of a
particular date need only be so accurate as of such date), (ii) the
accuracy, as of the date when made and at and as of the Mycogen Closing as
though newly made at and as of that time, in all material respects of the
representations and warranties of DowElanco contained in the Exchange and
Purchase Agreement which are not so qualified (except that representations
and warranties made as of a particular date need only be so accurate as of
such date), and (iii) the performance in all material respects of the
obligations required by DowElanco and UAS to be performed under the
Exchange and Purchase Agreement as of the Mycogen Closing.
(d) Deliveries by DowElanco. DowElanco will have delivered, or will
deliver concurrently with the Mycogen Closing, all of the outstanding
common stock of UAS, $26,400,000 and any other documents and instruments
required to be delivered by DowElanco.
Covenants. The parties to the Exchange and Purchase Agreement have agreed
to certain covenants as follows.
(a) Conduct of Business of Mycogen. The Exchange and Purchase
Agreement provides that until the Mycogen Closing, the business of Mycogen,
Agrigenetics and their respective subsidiaries and of UAS will be conducted
in the ordinary course of business consistent with past practice, and
Mycogen, Agrigenetics and their respective subsidiaries and UAS will each
use its best efforts to preserve
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intact its business organization, to keep available the services of its
officers and employees and to maintain existing business relationships.
Accordingly, except as otherwise expressly approved by DowElanco in
writing, neither Mycogen and Agrigenetics on the one hand, nor UAS on the
other hand, may, prior to the Mycogen Closing, engage or agree to engage in
an enumerated list of transactions generally characterized as being outside
the ordinary course of business.
(b) No Solicitation. Mycogen has agreed, among other things, to
immediately cease any existing discussions or negotiations with any third
parties conducted prior to the date of the Exchange and Purchase Agreement
with respect to any Acquisition Proposal (as defined below). Mycogen has
agreed that it will not, directly or indirectly, (i) solicit, initiate, or
encourage any inquiries or proposals that constitute, or may lead to, a
proposal or offer for a merger, consolidation, business combination, sale
of substantial assets, sale of shares of capital stock (including without
limitation by way of a tender offer) or similar transactions (an
"Acquisition Proposal") involving the acquisition of a material equity
interest in or a material amount of voting securities or assets of Mycogen,
Agrigenetics or any of their respective subsidiaries, other than the
transactions contemplated by the Exchange and Purchase Agreement, (ii)
engage in negotiations or discussions concerning, or provide any non-public
information to any person or entity relating to, any Acquisition Proposal
or (iii) agree to, approve or recommend any Acquisition Proposal; provided,
that Mycogen may furnish information to, or enter into discussions or
negotiations with, any person in connection with an unsolicited bona fide
written Acquisition Proposal if the Mycogen board determines in good faith
after consultation with outside legal counsel that such action is necessary
for the board to comply with its fiduciary duties to stockholders under
applicable law and if a confidentiality agreement in customary form is
executed. Mycogen also has agreed to notify DowElanco immediately after
receipt of an Acquisition Proposal.
(c) Additional Stock Acquisition. The Exchange and Purchase Agreement
places certain limits on the ability of DowElanco to purchase additional
equity of Mycogen.
(i) Pre-Closing Restrictions on Stock Acquisitions. From the
date of the Exchange and Purchase Agreement to the Mycogen Closing,
DowElanco and its affiliates have agreed not to acquire shares of
Common Stock other than pursuant to the Exchange and Purchase
Agreement or the Stock Purchase Agreement, unless, on or after the
date of the Exchange and Purchase Agreement, (a) any person or group
of persons (other than certain institutional investors and persons who
own 10% or more of the outstanding Common Stock on the date of the
Exchange and Purchase Agreement) acquires beneficial ownership
representing 10% or more of the outstanding Common Stock; (b) any
beneficial owner of 10% or more of the outstanding Common Stock (other
than certain institutional investors) on the date of the Exchange
Page 14 of 21 Pages
<PAGE>
and Purchase Agreement acquires beneficial ownership of 2% or more of
the outstanding Common Stock; (c) any person or group of persons other
than DowElanco or its affiliates announces an intention or commences a
tender offer to acquire 10% or more of the total outstanding shares of
Common Stock; (d) any person or group of persons other than DowElanco
or its affiliates makes an Acquisition Proposal to acquire 40% or more
of the outstanding Common Stock; or (e) Mycogen enters into an
agreement with any other person after determining that it was required
to do so by its fiduciary obligation to shareholders or the Exchange
and Purchase Agreement has been terminated.
(ii) Post-Closing Restrictions on Stock Acquisitions. DowElanco
has agreed that, unless another person or group has made a proposal to
acquire 25% or more of the Common Stock, (a) for a period of two years
from the Measurement Date, DowElanco will not acquire more than 60% of
the outstanding Common Stock and (b) from the second anniversary of
the Measurement Date to the third anniversary of the Measurement Date,
DowElanco will not acquire more than 65% of the outstanding Common
Stock, (in the case of both (a) and (b), excluding shares of Common
Stock, if any, purchased directly from Mycogen or its employees after
the Mycogen Closing). In any event, DowElanco has agreed not to
acquire from any person more than 79.9% of the total outstanding
shares of Common Stock for three years after the Measurement Date
and after that time only pursuant to a Buyout Transaction as
described below.
(iii) Buyout Transaction. Following the third anniversary of
the Measurement Date, DowElanco may increase its beneficial ownership
of Common stock above 79.9% of the total outstanding shares only
pursuant to a Buyout Transaction. A Buyout Transaction may only be
effected if approved by a majority of Mycogen's independent directors
or if the value to be offered to holders of Common Stock is determined
through arbitration by an independent appraiser.
(iv) Employee Stock Options. Following the Mycogen Closing,
Mycogen has agreed to establish, upon DowElanco's request, a voluntary
procedure by which DowElanco will be permitted to purchase shares of
Common Stock from participating employees of Mycogen upon the exercise
of employee stock options by such participating employees. DowElanco
will have no obligation to purchase any shares of Common Stock
pursuant to such procedures.
(d) Election of Directors. The board of directors of Mycogen
currently is comprised of six members. For a period of three years
following the Measurement Date, (a) at any time DowElanco is the beneficial
owner of less than 20% of the outstanding Common stock, Mycogen will cause
its board of directors to consist of seven members and DowElanco will be
entitled to designate for nomination one person to serve on the board of
directors of Mycogen, (b) at any time DowElanco is
Page 15 of 21 Pages
<PAGE>
the beneficial owner of 20% or more but less than 30% of the outstanding
Common Stock, DowElanco will be entitled to designate for nomination two
directors of Mycogen, (c) at any time DowElanco is the beneficial owner of
30% or more but less than 50% of the outstanding Common Stock, Mycogen will
cause its board of directors to consist of seven members and DowElanco will
be entitled to designate for nomination three (or, if the number of
directors is other than seven, the nearest whole number less than one-half
times the total number of directors) directors of Mycogen and (d) at any
time DowElanco is the beneficial owner or more than 50% of the outstanding
Common Stock, Mycogen will cause its board of directors to consist of nine
directors and DowElanco will be entitled to designate for nomination five
(or, if the number of directors is other than nine, the nearest whole
number greater than one-half times the total number of directors) directors
of Mycogen.
(e) Issuance of Common Stock and Right of First Refusal.
(i) So long as DowElanco has the right to nominate at least two
members to Mycogen's board of directors, Mycogen will not, without
prior approval of DowElanco, issue any shares of Common Stock or any
securities exchangeable for shares of Common Stock except: (i) shares
of Common Stock authorized and reserved as of January 15, 1996
pursuant to certain existing benefit plans; (ii) new securities
exchangeable for not more than an aggregate of 2,000,000 shares of
Common Stock pursuant to employee benefit plans approved by Mycogen
during the three-year period after the Measurement Date; and (iii) not
more than 2,000,000 shares of Common Stock in exchange for the assets
or securities of one or more other persons. If Mycogen issues any
Common Stock pursuant to the above, Mycogen will offer DowElanco the
right to purchase at market value (based on the average daily closing
price for the trading days within the 90 calendar days preceding the
date of the proposed sale) additional shares of Common Stock to
maintain its total percentage interest in Mycogen.
(ii) Following the second anniversary of the Measurement Date,
Mycogen may issue new securities for cash, other than (i) any
securities issuable upon conversion of any convertible security of
Mycogen outstanding as of January 15, 1996, (ii) any securities
issuable upon exercise of any option, warrant or other similar
security of Mycogen authorized as of January 15, 1996, and (iii) any
securities issuable to Mycogen stockholders on a proportional basis in
connection with any stock split, stock dividend or recapitalization of
Mycogen; provided, that Mycogen affords DowElanco a right of first
refusal to purchase all of the new securities proposed to be issued
(other than any new securities issued to officers, directors and
employees pursuant to certain existing benefit plans or any newly
created employee benefit plan or to DowElanco and its affiliates) at
market value (based on the average daily closing price for the trading
days within the 90 calendar days preceding the date of the proposed
sale).
(f) Rights Agreement. Unless the Exchange and Purchase Agreement and
the Stock Purchase Agreement both have been terminated according to their
terms without the purchase of any shares of Common Stock by DowElanco or an
affiliate, successor or assign of DowElanco, Mycogen (i) will ensure that
the Rights Agreement
Page 16 of 21 Pages
<PAGE>
and the rights thereunder will not prevent DowElanco or an affiliate from
acquiring or proposing to acquire some or all of the outstanding shares of
Common Stock and (ii) will not amend, interpret or enforce the Rights
Agreement or adopt any new shareholder rights agreement if such action
would have an adverse effect on DowElanco or on the ability of DowElanco or
an affiliate to acquire or propose to acquire some or all of the
outstanding shares of Common Stock.
(g) Indemnification of UAS Directors, Officers, Employees and Agents.
With respect to matters occurring prior to the Mycogen Closing, Mycogen and
Agrigenetics have agreed that all existing rights to indemnification of
present or former directors, officers, employees and agents of UAS as
provided in UAS's Certificate of Incorporation or By-Laws as in effect on
January 15, 1996 will continue for at least five years.
(h) Federal Income Tax Considerations. The parties have agreed that
the sale of all the shares of common stock of UAS in exchange for 2,707,884
shares of Common Stock and the Promissory Note is intended to constitute a
"qualified stock purchase" within the meaning of Section 338(d)(3) of the
Internal Revenue Code of 1986, as amended (the "Code").
(i) Strategic Review Committee. DowElanco and Mycogen have agreed to
form a strategic review team to meet quarterly and on an "as-needed" basis
to develop and review the strategic direction of Mycogen and its
subsidiaries and their projects and the tactics employed to pursue such
strategic objectives.
(j) Transition Steering Committee. DowElanco and Mycogen have agreed
to form a transition steering committee to oversee the integration of UAS
and its employees with Mycogen and its employees. The transition steering
committee may be discontinued at any time upon mutual agreement, but in no
event will it exist beyond 12-months after the Mycogen Closing.
(k) Technology Agreement. Mycogen, Agrigenetics and DowElanco have
agreed to execute and deliver at the Mycogen Closing an agreement providing
for the exchange between the parties of certain currently existing genes
and tools and certain new genes and tools developed or acquired during the
five year period following the Mycogen Closing.
Indemnification. The parties to the Exchange and Purchase Agreement have
agreed to certain indemnification provisions as follows.
(a) Mycogen has agreed to indemnify and hold DowElanco and its
affiliates and any of their respective directors, officers, partners and
affiliates of partners, employees and agents harmless from and against any
and all losses, damages, claims, liabilities or obligations (including
interest, penalties, amounts paid in settlement and reasonable fees and
disbursements of attorneys) (collectively the "Losses") suffered, sustained
or incurred or required to be paid by any such party due to, based upon, or
Page 17 of 21 Pages
<PAGE>
arising out of or otherwise with respect to (i) any breach of any
representation, warranty, covenant, agreement or obligation of Mycogen or
Agrigenetics contained in the Exchange and Purchase Agreement, (ii) any
brokerage fees, commissions or finders' fees payable on the basis of any
action taken by Mycogen or any of its affiliates and (iii) any taxes or tax
liabilities attributable to any merger of UAS, any transfer of assets of
UAS or any election with respect to UAS pursuant to Section 338(g) of the
Code to the extent the foregoing occur after the completion of the
transactions contemplated by the Exchange and Purchase Agreement.
(b) DowElanco has agreed to indemnify and hold Mycogen and its
affiliates and any of their respective directors, officers, employees and
agents harmless from and against any and all Losses suffered, sustained or
incurred or required to be paid by any such party due to, based upon, or
arising out of or otherwise with respect to (i) any breach of any
representation, warranty, covenant, agreement or obligation of DowElanco or
UAS contained in the Exchange and Purchase Agreement, (ii) any brokerage
fees, commissions or finders' fees payable on the basis of any action taken
by DowElanco or any of its affiliates.
Termination. The Exchange and Purchase Agreement may be terminated (a) by
mutual written consent of Mycogen, Agrigenetics, DowElanco and UAS; (b) by
DowElanco or Mycogen if the Mycogen Closing has not occurred prior to April 30,
1996, unless such failure results solely from the waiting period under the HSR
Act continuing beyond April 30, 1996 (in which case the parties may terminate if
the Mycogen Closing has not occurred prior to July 31, 1996); (c) by DowElanco
or Mycogen if any court or other governmental body issues a final and
nonappealable order, decree or ruling prohibiting the consummation of the
transactions contemplated by the Exchange and Purchase Agreement; (d) by
DowElanco if any court or other governmental body issues a final and
nonappealable order, decree or ruling prohibiting the consummation of the
transactions contemplated by the Stock Purchase Agreement; (e) by DowElanco if
there is a material breach of any representation or warranty or covenant,
agreement or obligation of Mycogen or Agrigenetics under the Exchange and
Purchase Agreement or of AGC under the Stock Purchase Agreement which is not
cured within 10 business days following notice of such breach; (f) by Mycogen if
there is a material breach of any representation or warranty or covenant,
agreement or obligation of DowElanco under the Exchange and Purchase Agreement
which is not cured within 10 business days following notice of such breach; (g)
by DowElanco if the Stock Purchase Agreement terminates without the consummation
of the transactions contemplated thereunder; (h) by DowElanco if Mycogen's board
withdraws or modifies approval of the Exchange and Purchase Agreement and the
transactions contemplated thereunder in a manner adverse to DowElanco, or if
Mycogen indicates it does not intend to consummate the transactions contemplated
by the Exchange and Purchase Agreement or enters into an agreement with respect
to an Acquisition Proposal; and (i) by Mycogen if its board of directors
determines in good faith such action is necessary to comply with its fiduciary
duties to stockholders.
Page 18 of 21 Pages
<PAGE>
THE STOCK PURCHASE AGREEMENT
----------------------------
Purchase of Common Stock by DowElanco. As soon as practicable (but at least
one business day) following the satisfaction or waiver of all of the conditions
described below under "Conditions to the Parties' Obligations," DowElanco has
agreed to purchase 9,502,348 shares of Common Stock from AGC and Lubrizol for
(a) approximately $126,217,849 plus (b) if the Lubrizol Closing occurs on or
after February 29, 1996, interest, for each day beginning on February 29, 1996
through and including the Lubrizol Closing, on $124,938,000 at a rate equal to
the Six-Month LIBOR in effect from time to time divided by 365. In addition, in
the event options to purchase Common Stock vest prior to the Lubrizol Closing,
Lubrizol shall exercise, or cause to be exercised such options, and the
resulting shares of Common Stock will be sold to DowElanco for an amount equal
to the number of shares resulting from the exercise of such options multiplied
by the difference between $13 and the average option exercise price for such
options.
Deposit. On January 16, 1996 DowElanco deposited with AGC $1,262,000 (the
"Deposit") to be held by AGC until the Lubrizol Closing. The Deposit will be
credited against the purchase price so that, at the Lubrizol Closing, DowElanco
will be required to pay the purchase price less the Deposit.
Lubrizol is required to return the Deposit to DowElanco unless (a) the
Stock Purchase Agreement is terminated without the consummation of the
transactions contemplated thereby and the Exchange and Purchase Agreement has
terminated pursuant to Section 8.1.8 (which allows DowElanco to terminate if
Mycogen's board of directors has withdrawn or adversely modified its approval,
if Mycogen has indicated to DowElanco that it does not intend to consummate the
transactions contemplated by the Exchange and Purchase Agreement or if Mycogen
has entered into an agreement with respect to an Acquisition Proposal) or
Section 8.1.9 (which allows Mycogen to terminate if and only to the extent that
its board of directors has determined in good faith after consultation with
outside legal counsel that termination of the Exchange and Purchase Agreement is
necessary for the Mycogen board of directors to comply with its fiduciary duties
to stockholders under applicable law) thereof without the consummation of the
transactions contemplated thereunder or (b) the transactions contemplated by the
Exchange and Purchase Agreement have been consummated and DowElanco has failed
to consummate the transactions contemplated by the Stock Purchase Agreement when
it was required to do so thereunder.
Representations and Warranties. The Stock Purchase Agreement contains
customary representations and warranties of Lubrizol, AGC, and DowElanco.
Directors. Lubrizol and AGC have agreed to cause the existing members of
the board of directors of Mycogen nominated by Lubrizol or AGC to deliver duly
executed resignations from such positions effective as of the Lubrizol Closing.
No Solicitation. Lubrizol and AGC have agreed, among other things, to
immediately cease any existing discussions or negotiations with any third
parties conducted prior to the date of the Stock Purchase Agreement with respect
to any Acquisition Proposal. Lubrizol and AGC have agreed that they will not,
directly or indirectly, (i) solicit, initiate, or encourage any inquiries or
proposals that constitute an Acquisition Proposal involving Mycogen or any of
its subsidiaries, other than the transactions contemplated by the Stock Purchase
Agreement or (ii) engage in negotiations or discussions concerning, or provide
any non-public information to any person or entity relating to, any Acquisition
Proposal. Lubrizol and AGC have also agreed to notify DowElanco immediately
after receipt of an Acquisition Proposal.
Page 19 of 21 Pages
<PAGE>
Irrevocable Proxy. Lubrizol and AGC have granted DowElanco an irrevocable
proxy and irrevocably appointed DowElanco or its designees, with full power of
substitution, their attorney and proxy to vote 9,487,349 currently outstanding
shares of Common Stock and 14,999 shares of Common Stock which may be issued
upon the exercise of options. Lubrizol and AGC have agreed not to grant any
other proxies with respect to shares of Common Stock. The proxy would terminate
upon the termination of the Stock Purchase Agreement. In addition to such
irrevocable proxy, Lubrizol and AGC have agreed, if the proxy is invalid for any
reason, to vote any shares of Common Stock held by them against certain matters
which would conflict with or impede the transactions contemplated by the
Exchange and Purchase Agreement or the Stock Purchase Agreement and in favor of
any action or agreement that would further the consummation of the transactions
contemplated by the Exchange and Purchase Agreement or the Stock Purchase
Agreement.
Conditions to the Parties' Obligations. Notwithstanding any other
provision of the Stock Purchase Agreement, the obligation of DowElanco to
purchase shares of Common Stock from AGC is subject to the satisfaction or, if
appropriate, waiver of certain customary conditions, and to the conditions that
(i) any waiting period applicable to the purchase and sale of Lubrizol's and
AGC's shares of Common Stock under the HSR Act shall have terminated or expired;
(ii) Lubrizol or AGC shall have caused the existing members of the board of
directors of Mycogen nominated by Lubrizol or AGC to have delivered duly
executed resignations from such positions effective as of the Lubrizol Closing;
and (iii) the Mycogen Closing shall have occurred.
The obligation of Lubrizol and AGC to sell shares of Common Stock to
DowElanco is subject to the satisfaction or, if appropriate, waiver of certain
customary conditions, and to the condition that any waiting period applicable to
the purchase and sale of Common Stock under the HSR Act shall have terminated or
expired.
Termination. The Stock Purchase Agreement may be terminated by either
party on or after July 31, 1996 if DowElanco has not purchased shares of Common
Stock thereunder.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<C> <S>
99(a)(1) Exchange and Purchase Agreement dated as of January 15, 1996
among Mycogen Corporation, Agigenetics, Inc., DowElanco and
United AgriSeeds, Inc.
99(a)(3) Stock Purchase Agreement dated as of January 15, 1996 among The
Lubrizol Corporation, AGC Holdings, Inc. and DowElanco.
99(a)(3) Agreement among The Dow Chemical Company, Rofan Services Inc. and
DowElanco pursuant to Rule 13d-1(f)(1).
</TABLE>
Page 20 of 21 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: January 25, 1996
THE DOW CHEMICAL COMPANY
By: /s/ J.Pedro Reinhard
-------------------------------------------
Name: J. Pedro Reinhard
Title: Financial Vice President,
Treasurer and Chief Financial Officer
ROFAN SERVICES INC.
By: /s/ J. Pedro Reinhard
-------------------------------------------
Name: J. Pedro Reinhard
Title: President
DOWELANCO
By: /s/ Louis W. Pribila
-------------------------------------------
Name: Louis W. Pribila
Title: Vice President, Secretary and
General Counsel
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<C> <S>
99(a)(1) Exchange and Purchase Agreement dated as of January
15, 1996 among Mycogen Corporation, Agigenetics,
Inc., DowElanco and United AgriSeeds, Inc.
99(a)(3) Stock Purchase Agreement dated as of January 15, 1996
among The Lubrizol Corporation, AGC Holdings, Inc.
and DowElanco.
99(a)(3) Agreement among The Dow Chemical Company, Rofan
Services Inc. and DowElanco pursuant to Rule 13d-
1(f)(1).
</TABLE>
<PAGE>
EXCHANGE AND PURCHASE AGREEMENT
Among
MYCOGEN CORPORATION, a California corporation,
AGRIGENETICS, INC., a Delaware corporation,
DOWELANCO, an Indiana general partnership, and
UNITED AGRISEEDS, INC., a Delaware corporation
Dated as of
January 15, 1996
<PAGE>
|| TABLE OF CONTENTS
-----------------
Page
ARTICLE 1
DEFINITIONS............................... 2
Section 1.1 Definitions.................................................. 2
ARTICLE 2
THE TRANSACTION............................. 7
Section 2.1 Sale and Purchase of Purchase Shares and
Promissory Note.............................................. 7
Section 2.2 Closing Balance Sheet Adjustment............................. 8
ARTICLE 3
THE CLOSING............................... 9
Section 3.1 Closing...................................................... 9
Section 3.2 Deliveries by Parent......................................... 10
Section 3.3 Deliveries by the Company and Agrigenetics................... 10
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............. 11
Section 4.1 Organization and Qualification; Subsidiaries................. 11
Section 4.2 Capitalization of the Company................................ 12
Section 4.3 Capitalization of Agrigenetics............................... 13
Section 4.4 Authority Relative to This Agreement......................... 13
Section 4.5 Waiver of Rights Agreement................................... 13
Section 4.6 Non-Contravention; Required Filings and Consents............. 14
Section 4.7 SEC Reports.................................................. 15
Section 4.8 Absence of Certain Changes................................... 16
Section 4.9 Finder's Fee................................................. 16
Section 4.10 Absence of Claims and Litigation............................. 16
Section 4.11 Taxes........................................................ 17
Section 4.12 Employee Benefits and Labor Matters.......................... 18
Section 4.13 Compliance................................................... 20
Section 4.14 Environmental Matters........................................ 20
Section 4.15 Intellectual Property........................................ 21
Section 4.16 Significant Agreements....................................... 21
Section 4.17 Product Registrations........................................ 22
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT................. 22
Section 5.1 Organization................................................. 22
Section 5.2 Authority Relative to this Agreement......................... 23
Section 5.3 Non-Contravention; Required Filings and Consents............. 23
Section 5.4 Capitalization of Subsidiary................................. 24
i
<PAGE>
Page
----
Section 5.5 Financial Statements......................................... 24
Section 5.6 Absence of Certain Changes................................... 25
Section 5.7 Finder's Fee................................................. 25
Section 5.8 Absence of Claims and Litigation............................. 25
Section 5.9 Taxes........................................................ 26
Section 5.10 Employee Benefits............................................ 27
Section 5.11 Compliance................................................... 29
Section 5.12 Environmental Matters........................................ 29
Section 5.13 Intellectual Property........................................ 30
Section 5.14 Significant Agreements....................................... 30
Section 5.15 Charter Documents and Corporate Records...................... 30
Section 5.16 Assets....................................................... 31
Section 5.17 Licenses, Permits, Authorizations, Etc....................... 32
Section 5.18 Employee Relations........................................... 32
Section 5.19 Investment Intent............................................ 33
ARTICLE 6
COVENANTS................................ 33
Section 6.1 Conduct of Business of the Company, Agrigenetics
and Subsidiary............................................... 33
Section 6.2 Qualified Stock Purchase..................................... 36
Section 6.3 Access to Information and Facilities......................... 36
Section 6.4 Reasonable Best Efforts...................................... 37
Section 6.5 Public Announcements......................................... 37
Section 6.6 Indemnification of Subsidiary, Directors,
Officers, Employees and Agents............................... 37
Section 6.7 Notification of Certain Matters.............................. 38
Section 6.8 No Solicitation.............................................. 38
Section 6.9 Pre-Closing Restrictions on Stock Acquisitions............... 39
Section 6.10 Rights Agreement............................................. 40
Section 6.11 Post-Closing Covenants of the Company........................ 40
Section 6.12 Post-Closing Restrictions on Stock Acquisitions.............. 42
Section 6.13 Buyout Transaction........................................... 43
Section 6.14 Election of Directors........................................ 44
Section 6.15 Audited Financial Statements................................. 45
Section 6.16 Benefit Plans................................................ 46
Section 6.17 Post-Closing Human Resources Matters......................... 46
Section 6.18 Strategic Review Committee................................... 46
Section 6.19 Technology Agreement......................................... 47
ii
<PAGE>
Page
----
ARTICLE 7
CONDITIONS................................ 47
Section 7.1 Conditions to Each Party's Obligations....................... 47
Section 7.2 Conditions to the Obligation of Parent and
Subsidiary................................................... 47
Section 7.3 Conditions to the Obligations of the Company and
Agrigenetics................................................. 48
ARTICLE 8
TERMINATION; AMENDMENT; WAIVER...................... 49
Section 8.1 Termination.................................................. 49
Section 8.2 Effect of Termination........................................ 51
Section 8.3 Fees and Expenses............................................ 51
Section 8.4 Amendment.................................................... 51
Section 8.5 Extension; Waiver............................................ 51
ARTICLE 9
MISCELLANEOUS.............................. 52
Section 9.1 Survival of Representations and Warranties................... 52
Section 9.2 Indemnification.............................................. 52
Section 9.3 Entire Agreement; Assignment................................. 54
Section 9.4 Notices...................................................... 54
Section 9.5 Governing Law................................................ 55
Section 9.6 Parties in Interest.......................................... 55
Section 9.7 Specific Performance......................................... 55
Section 9.8 Severability................................................. 56
Section 9.9 Descriptive Headings......................................... 56
Section 9.10 Counterparts................................................. 56
||
iii
<PAGE>
EXHIBITS AND SCHEDULES
----------------------
EXHIBITS
- --------
EXHIBIT A
EXHIBIT B
SCHEDULES
- ---------
SCHEDULE 4.2
SCHEDULE 4.3
SCHEDULE 4.7.2
SCHEDULE 4.10
SCHEDULE 4.11
SCHEDULE 4.12.1
SCHEDULE 4.12.5
SCHEDULE 4.16
SCHEDULE 4.17
SCHEDULE 5.5.1
SCHEDULE 5.5.2
SCHEDULE 5.8
SCHEDULE 5.9
SCHEDULE 5.10.1
SCHEDULE 5.10.5
SCHEDULE 5.14
SCHEDULE 5.16.1
SCHEDULE 5.16.3
iv
<PAGE>
EXCHANGE AND PURCHASE AGREEMENT
THIS EXCHANGE AND PURCHASE AGREEMENT, dated as of January 15, 1996, is
among MYCOGEN CORPORATION, a California corporation (the "Company"),
AGRIGENETICS, INC., a Delaware corporation ("Agrigenetics"), DOWELANCO, an
Indiana general partnership ("Parent"), and UNITED AGRISEEDS, INC., a Delaware
corporation and a wholly-owned subsidiary of Parent ("Subsidiary").
WHEREAS, it is proposed that (i) Parent will sell to Agrigenetics all of
the outstanding shares of common stock, $1.00 par value per share, of Subsidiary
(the "Subsidiary Shares") in exchange for the sale by Agrigenetics to Parent of
2,707,884 shares (the "Seed Purchase Shares") of common stock, $.001 par value
per share, of the Company ("Common Stock") and the delivery to Parent of a
promissory note of Agrigenetics payable to Parent in the amount of $100,000
substantially in the form attached hereto as Exhibit A (the "Promissory Note")
and (ii) the Company will sell to Parent 1,745,450 shares of Common Stock (the
"Cash Purchase Shares") for $26,400,000 (the "Cash Payment") (such transactions
are collectively referred to herein as the "Transaction" and the Seed Purchase
Shares and Cash Purchase Shares (which together consist of 4,453,334 shares of
Common Stock) are collectively referred to herein as the "Purchase Shares");
WHEREAS, simultaneously with the execution and delivery hereof, Parent, The
Lubrizol Corporation, an Ohio corporation ("Lubrizol") and AGC Holdings, Inc., a
Delaware corporation, and an indirect wholly-owned subsidiary of Lubrizol
("Investor"), are entering into a stock purchase agreement (the "Stock Purchase
Agreement") pursuant to which Investor has agreed, among other things, to sell,
transfer and assign to Parent all of the shares of Common Stock and other direct
or indirect ownership interests in the Company held by Investor (the "Investor
Interests"); and
WHEREAS, the Board of Directors of the Company (the "Board") and Parent, in
accordance with its Amended and Restated Partnership Agreement, have approved
this Agreement and the transactions contemplated hereby and Parent, in
accordance with its Amended and Restated Partnership Agreement, has approved the
transactions contemplated by the Stock Purchase Agreement; and
WHEREAS, the Board of Directors of Agrigenetics and Parent, as the sole
shareholder of Subsidiary, have approved this Agreement and the transactions
contemplated hereby.
<PAGE>
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
Company, Agrigenetics, Parent and Subsidiary hereby agree as follows.
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. The following terms will have the meanings set
forth below unless otherwise defined herein.
"affiliate" of a person means a person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned person.
"beneficial owner" has the meaning set forth in Rule 13d-3 under the
Exchange Act.
"Blue Sky Laws" means laws and regulations of any state or territory of the
United States relating to the regulation of the offer and sale of securities.
"Board" means the board of directors of the Company.
"Buyout Transaction" means a tender offer, merger or similar transaction
involving Parent or one of its affiliates and the Company that offers each
holder of Common Stock other than Parent or its affiliates the opportunity to
dispose of some or all Common Stock owned by such stockholder for consideration
reflecting such stockholder's proportionate share of the Third Party Sale Value
Consideration, but will expressly exclude any sale of the Company's assets.
"Cleanup" means all actions required to: (1) cleanup, remove, treat or
remediate Hazardous Materials in the indoor or outdoor environment; (2) prevent
the Release of Hazardous Materials so that they do not migrate, endanger or
threaten to endanger public health or welfare of the indoor or outdoor
environment; (3) perform pre-remedial studies and investigations and post-
remedial monitoring and care; or (4) respond to any government requests for
information or documents in any way relating to cleanup, removal, treatment or
remediation or potential cleanup, removal, treatment or remediation of Hazardous
Materials in the indoor or outdoor environment.
"Closing" means the closing of the Transaction.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Common Stock Equivalent" means any Company Security (or fraction of a
Company Security) exchangeable for one share of Common Stock and/or having
voting power in an election of directors equal to that of one share of Common
Stock.
"Company Securities" means shares of capital stock or other voting
securities of the Company, securities of the Company or of any subsidiary of the
Company convertible into or exchangeable for shares of capital stock or voting
securities of the Company, options, subscriptions, warrants, convertible
securities, calls or other rights to acquire from the Company, and obligations
of the Company to issue, deliver or sell any capital stock, voting securities or
securities convertible into or exchangeable for shares of capital stock or
voting securities of the Company and equity equivalents, interests in the
ownership or earnings of the Company or other similar rights.
"Confidentiality Agreement" means the Confidentiality Agreement entered
into on October 6, 1995 between Parent and the Company.
"control" (including the terms "controlled by" and "under common control
with") means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the management policies of a
person, whether through the ownership of stock, as trustee or executor, by
contract or credit arrangement or otherwise.
"Data" means the technical and other data and studies which are necessary
to obtain and maintain Product Registrations.
"Environmental Claim" means any claim, action, cause of action,
investigation or notice (written or, if known to an authorized officer, oral) by
any person or entity alleging potential liability (including, without
limitation, potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, or penalties) arising out of, based on or resulting from (a)
the presence, or Release into the indoor or outdoor environment, of any
Hazardous Materials at any location, whether or not owned or operated by the
Company or any of its subsidiaries or (b) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
"Environmental Laws" means all federal, state, local and foreign laws and
regulations relating to pollution or protection of human health and safety or
the environment, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, the Resource Conservation and Recovery
Act, the Clean Air Act, the Clean Water Act, the Occupational Safety and Health
Act of 1970, as amended, and
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similar state laws and other laws relating to Releases or threatened Releases of
Hazardous Materials or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, Release, disposal, transport or handling
of Hazardous Materials and all laws and regulations with regard to
recordkeeping, notification, disclosure and reporting requirements respecting
Hazardous Materials, provided, however, that the term Environmental Laws will
not include any Product Registrations.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"generally accepted accounting principles" will mean the generally accepted
accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession in the United
States, in each case applied on a consistent basis.
"Hazardous Materials" means all substances defined as Hazardous Substances,
Oils, Pollutants or Contaminants in the National Oil and Hazardous Substances
Pollution Contingency Plan, 40 C.F.R. (S) 300.5, or defined as such by, or
regulated as such under, any Environmental Law, or which otherwise may be the
basis for any federal, state, local or foreign government requiring Cleanup.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
"Independent Directors" means a director of the Company (i) who is not and
has never been an officer or employee of the Company or any affiliate of the
Company, (ii) who is not and has never been an officer, employee or director of
Parent or any affiliate of Parent and (iii) who has no affiliation,
compensation, consulting or contracting arrangement with the Company, Parent or
any of their respective affiliates other than solely arising out of such
director's position as a member of the Board.
"Intellectual Property" means trademarks, service marks, brand names,
certification marks, trade dress, assumed names, trade names and other
indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application; inventions,
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discoveries and ideas, whether patentable or not in any jurisdiction; patents,
applications for patents (including, without limitation, divisions,
continuations, continuations in part and renewal applications), and any
renewals, extensions or reissues thereof, in any jurisdiction; plant variety
protection certificates, nonpublic information, trade secrets, confidential
information and proprietary materials and rights in any jurisdiction to limit
the use or disclosure thereof by any person; writings and other works, whether
copyrightable or not in any jurisdiction; registrations or applications for
registration of copyrights in any jurisdiction, and any renewals or extensions
thereof; any similar intellectual property or proprietary rights; and any claims
or causes of action arising out of or related to any infringement or
misappropriation of any of the foregoing.
"Investment Agreement" means Amended and Restated Equity Investment
Agreement dated December 31, 1993 between the Company, Agrigenetics, Investor
and MPS.
"Investor's Conversion Right" means the Investor's rights under the
Investment Agreement to convert its equity interest in Agrigenetics into shares
of Common Stock.
"Market Value" with respect to any security means the average of the daily
closing price for the trading days within the 90 calendar days preceding the
date of the proposed sale and purchase of such security on any national
securities exchange or inter-dealer quotation system on which the security is
then traded, or, if the security is not then traded on any national securities
exchange or inter-dealer quotation system, the fair market value of such
security.
"Material Adverse Effect" with respect to any person means a material
adverse effect, or the occurrence or existence of facts or circumstances
reasonably expected to result in a material adverse effect, on the business,
assets, results of operations, properties, or financial or operating condition
of such person and its subsidiaries taken as a whole or the ability of such
person (and to the extent applicable, its subsidiaries) to perform its (or
their) obligations under this Agreement or consummate the transactions
contemplated hereby.
"Measurement Date" means the earlier to occur of the Closing Date or, if
applicable, the date of termination of this Agreement pursuant to Section 8.1.
"MPS" means Mycogen Plant Science, Inc.
"NASD Rules" means the rules and policies promulgated by the National
Association of Securities Dealers applicable to issuers of securities designated
for inclusion in the Nasdaq National
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Market, including, without limitation, the By-Laws of the National Association
of Securities Dealers and the Schedules thereto.
"New Security" means any Company Securities issued by the Company after the
Closing other than (i) any securities issuable upon conversion of any
convertible Company Security outstanding as of the date of this Agreement, (ii)
any securities issuable upon exercise of any option, warrant or other similar
Company Security authorized as of the date of this Agreement and (iii) any
securities issuable in connection with any stock split, stock dividend or
recapitalization of the Company where such securities are issued to all
stockholders of the Company on a proportionate basis.
"person" means an individual, corporation, partnership, limited liability
company, association, trust, unincorporated organization, other entity or group
(as defined in Section 13(d)(3) of the Exchange Act).
"Product Registrations" means any approval of a governmental or other
regulatory body which is necessary to market, distribute or sell seeds,
pesticides or genetically modified products in any jurisdiction, including,
without limitation, registrations with the U.S. Environmental Protection Agency
pursuant to the Federal Insecticide, Rodenticide and Fungicide Act and the
regulations promulgated thereunder.
"Release" means any release, spill, emission, discharge, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment (including, without limitation, ambient air,
surface water, groundwater and surface or subsurface strata) or into or out of
any property, including the movement of Hazardous Materials through or in the
air, soil, surface water, groundwater or property.
"Rights" means the preferred share purchase rights under the Rights
Agreement.
"Rights Agreement" means the Company's Amended and Restated Rights
Agreement dated as of October 19, 1995, between the Company and The First
National Bank of Boston.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"subsidiary" or "subsidiaries" of any person means any corporation,
partnership, joint venture or other legal entity of
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which such person (either alone or through or together with any other
subsidiary), owns, directly or indirectly, 50% or more of the stock or other
equity interests the holder of which is generally entitled to vote for the
election of the board of directors or other governing body of such corporation,
partnership, joint venture or other legal entity.
"Subsidiary Securities" means shares of capital stock or other voting
securities of Subsidiary, securities of Subsidiary convertible into or
exchangeable for shares of capital stock or voting securities of Subsidiary,
options, subscriptions, warrants, convertible securities, calls or other rights
to acquire from Subsidiary, and obligations of Subsidiary to issue, deliver or
sell any capital stock, voting securities or securities convertible into or
exchangeable for shares of capital stock or voting securities of Subsidiary and
equity equivalents, interests in the ownership or earnings of Subsidiary or
other similar rights.
"Technology Agreement" means the Technology Agreement that will be executed
between the Company, Agrigenetics and Parent at the Closing substantially in the
form attached hereto as Exhibit B.
"Third Party Sale Value" means the value that an unaffiliated third party
would be expected (based on financial analyses generally employed by investment
bankers in the preparation of a fairness opinion for an acquisition transaction)
to pay in an arms'-length transaction negotiated by a willing seller and a
willing buyer for all of the Company's then outstanding shares of Common Stock
and Common Stock Equivalents and not taking into account the potentially
controlling position of Parent, including its rights under Sections 6.11, 6.12
and 6.14.
"Third Party Sale Value Consideration" means consideration at least equal
as of the relevant date to Third Party Sale Value.
ARTICLE 2
THE TRANSACTION
Section 2.1 Sale and Purchase of Purchase Shares and Promissory Note.
Upon the terms and subject to satisfaction or, if appropriate, waiver of all of
the conditions set forth in Article 7, at the Closing: (a) the Company will
issue the Seed Purchase Shares to Agrigenetics, (b) Parent will sell the
Subsidiary Shares to Agrigenetics in exchange for the Seed Purchase Shares and
the Promissory Note, (c) Agrigenetics will sell the Seed Purchase Shares and
deliver the Promissory Note to Parent in exchange for the Subsidiary Shares, and
(d) the Company
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will issue and sell to Parent, and Parent will purchase from the Company, the
Cash Purchase Shares in exchange for the Cash Payment. Parent will pay the Cash
Payment to the Company at the Closing by bank wire transfer of immediately
available funds to an account designated in writing by the Company, or by such
other means as is acceptable to the Company and Parent.
Section 2.2 Closing Balance Sheet Adjustment.
2.2.1 As used in this Section 2.2, the following terms will have the
meanings set forth below:
"Subsidiary Closing Balance Sheet" means the unaudited balance sheet
of Subsidiary prepared in accordance with generally accepted accounting
principles as of the Closing.
"Subsidiary Tangible Net Worth" means the tangible net worth of
Subsidiary as agreed upon between the Company and Parent based on the average
tangible net worth calculated from the balance sheets of Subsidiary for the four
fiscal quarters ending immediately preceding the date of determination of
Subsidiary Tangible Net Worth is made, which balance sheets will be prepared in
accordance with generally accepted accounting principles as mutually agreed.
Parent will provide the Company with its determination of the Subsidiary
Tangible Net Worth within 7 days of the date of this Agreement. In the event
that the Company and Parent are not able to agree on any of the matters in the
immediately preceding sentence within 22 days after the execution of this
Agreement, then such dispute immediately will be submitted for final and binding
determination to a firm of Neutral Auditors (as defined below). The Neutral
Auditors will, within 30 days after the submission of the relevant information
to them, resolve any dispute in the amount of the Subsidiary Tangible Net Worth
and deliver a written report to the Company and Parent. All expenses relating to
the work, if any, to be performed by the Neutral Auditors will be borne one-half
by the Company and one-half by Parent.
2.2.2 Parent will prepare and deliver to the Company the Subsidiary
Closing Balance Sheet on or before the 10th day after the Closing. The
Subsidiary Closing Balance Sheet will be prepared using the same procedures and
in all other respects consistently with the manner of preparing the quarterly
balance sheets of Subsidiary used to determine Subsidiary Tangible Net Worth.
2.2.3 In the event that the tangible net worth of Subsidiary based on the
Subsidiary Closing Balance Sheet is different than the Subsidiary Tangible Net
Worth, then an adjustment (the "Adjustment") will be made to the consideration
for the Transaction as follows:
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(a) If such tangible net worth of Subsidiary is less than the
Subsidiary Tangible Net Worth, Parent will, in accordance with Section 2.2.4,
pay to Company an amount equal to the difference between such tangible net worth
and the Subsidiary Tangible Net Worth.
(b) If such tangible net worth of Subsidiary is greater than the
Subsidiary Tangible Net Worth, the Company or Agrigenetics will, in accordance
with Section 2.2.4, pay to Parent an amount equal to the difference between such
tangible net worth and the Subsidiary Tangible Net Worth.
2.2.4 The Adjustment will be paid in cash within 45 days after the receipt
of the Subsidiary Closing Balance Sheet (the "Adjustment Date"), unless the
Company, in accordance with Section 2.2.5, objects to any matter set forth in
the Subsidiary Closing Balance Sheet. Notwithstanding any objection by the
Company, the undisputed portion of the Adjustment will be paid by the Adjustment
Date, and the disputed portion will be, if applicable, paid within five days
after delivery by the Neutral Auditors (as defined below) of their written
report.
2.2.5 The Company will have 30 days after receipt of the Subsidiary
Closing Balance Sheet to object to any matter set forth therein or any
accounting principle applied in the preparation thereof. Such objection will be
in writing and will set forth in reasonable detail the nature of the objection
and the basis therefor. Failure by the Company to notify Parent in writing of
any objection within such 30-day period will be deemed to be acceptance by the
Company of the Subsidiary Closing Balance Sheet. In the event the Company and
Parent are unable to resolve any objection within 10 days from the date of
receipt of a notice of objection, the matter(s) in dispute will be submitted for
final and binding determination to a "Big Six" accounting firm selected by the
Company (but not any such firm that has previously provided services to the
Company or Parent or any of their respective subsidiaries), which firm will be
reasonably acceptable to Parent (the "Neutral Auditors"). The Neutral Auditors
will, within 30 days of submission of relevant information to them, resolve any
dispute in the amount of the Adjustment and deliver a written report to the
Company and Parent. All expenses relating to the work, if any, to be performed
by the Neutral Auditors will be borne one-half by the Company and one-half by
Parent.
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ARTICLE 3
THE CLOSING
Section 3.1 Closing. The Closing will be held as soon as practicable
after the satisfaction or, if appropriate, waiver of the conditions set forth in
Article 7. At the Closing, the parties hereto will consummate the Transaction.
The Closing will be held at the offices of Mayer, Brown & Platt, 190 South
LaSalle Street, Chicago, Illinois, 60603, or such other place as the parties may
agree. The date of the Closing is hereafter referred to as the Closing Date.
Section 3.2 Deliveries by Parent. At the Closing, Parent will deliver:
3.2.1 the Subsidiary Shares to Agrigenetics;
3.2.2 the Cash Payment to the Company; and
3.2.3 such other documents and instruments, duly executed to the
extent required, as may be reasonably requested by the Company or Agrigenetics
in order to consummate the Transaction.
Section 3.3 Deliveries by the Company and Agrigenetics. At the Closing, the
Company will deliver, or will cause Agrigenetics to deliver, to Parent the
following:
3.3.1 Agrigenetics will deliver to Parent the Promissory Note;
3.3.2 Agrigenetics will deliver to Parent a certificate, or
certificates in such denominations as may be requested in writing by Parent,
evidencing Parent's ownership of the Seed Purchase Shares and the Company will
deliver to Parent a certificate, or certificates in such denominations as may be
requested in writing by Parent, evidencing Parent's ownership of the Cash
Purchase Shares. The certificates for the Purchase Shares will bear the
following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH LAWS OR PURSUANT TO A WRITTEN
OPINION OF COUNSEL
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FOR THE COMPANY THAT REGISTRATION IS NOT REQUIRED."
; and
3.3.3 such other documents and instruments, duly executed to the
extent required, as may be reasonably requested by Parent in order to consummate
the Transaction.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent as follows:
Section 4.1 Organization and Qualification; Subsidiaries.
4.1.1 Each of the Company, MPS, Agrigenetics and their respective
subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate 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 so organized, existing and in good standing or to have such power and
authority would not, individually or in the aggregate, have a Material Adverse
Effect on the Company.
4.1.2 Each of the Company, MPS, Agrigenetics and their respective
subsidiaries is duly qualified or licensed and in good standing to do business
in each jurisdiction (including any foreign country) 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 where the failure to be
so duly qualified or licensed and in good standing would not, individually or in
the aggregate, have a Material Adverse Effect on the Company.
4.1.3 The Company has heretofore furnished to Parent complete and
correct copies of the Company's and Agrigenetics' Articles or Certificate of
Incorporation and By-Laws and, within 15 days of the execution of this
Agreement, will furnish the equivalent organizational documents of each of their
subsidiaries, each as amended through the date hereof. Such Articles of
Incorporation, By-Laws and equivalent organizational documents are in full force
and effect and no other organizational documents are applicable to or binding
upon the Company, Agrigenetics or their subsidiaries. Neither the Company nor
Agrigenetics is in violation of any of the provisions of their respective
Articles or Certificates of Incorporation or By-Laws in any material respect and
no subsidiary of the Company or
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Agrigenetics is in violation of any of the provisions of such subsidiary's
equivalent organizational documents in any material respect.
4.1.4 The Company has heretofore furnished to Parent a complete and
correct list of the subsidiaries of the Company, which list sets forth the
amount of capital stock of or other equity interests in such subsidiaries owned
by the Company, directly or indirectly. No entity in which the Company owns,
directly or indirectly, less than a 50% equity interest is, individually or when
taken together with all other such entities, material to the business of the
Company and its subsidiaries, taken as a whole.
Section 4.2 Capitalization of the Company. The authorized capital stock
of the Company consists of (i) 40,000,000 shares of Common Stock of which, as of
January 12, 1996, 22,610,767 shares of Common Stock were issued and outstanding
(including 186,500 shares of Common Stock subject to restrictions issued
pursuant to employee benefit plans of the Company and its subsidiaries or
otherwise) and (ii) 5,000,000 shares of preferred stock, of which, as of January
14, 1996, 3,940 shares of Senior Redeemable Convertible Preferred Stock, Series
A ("Series A Convertible Preferred Stock") were authorized and 3,158 shares of
Series A Convertible Preferred Stock were issued and outstanding and 200,000
shares of Series B Junior Participating Preferred Stock were reserved for
issuance upon exercise of Rights. All outstanding shares of capital stock of
the Company have been validly issued, and are fully paid, nonassessable and free
of preemptive rights. As of January 12, 1996, (i) employee options to purchase
an aggregate of 4,169,506 shares of Common Stock were authorized, (ii) employee
options to purchase an aggregate of 4,151,248 shares of Common Stock were
outstanding, (iii) 4,169,506 shares of Common Stock were reserved for issuance
pursuant to employee options, and (iv) the weighted average exercise price of
such employee options was $9.76 per share of Common Stock. The Company has
previously provided Parent with a complete list of the dates upon which each
employee option outstanding as of the date of this Agreement becomes exercisable
by the holder thereof. As of January 12, 1996, 1,988,301 shares of Common Stock
were reserved for issuance upon conversion of the Series A Convertible Preferred
Stock and as of January 14, 1996, the outstanding shares of Series A Convertible
Preferred Stock were convertible into 1,815,274 shares of Common Stock and the
Investor's Conversion Right was convertible into 1,538,008 shares of Common
Stock. As of January 12, 1996, 43,500 shares of Common Stock were reserved for
future issuances pursuant to the Restricted Stock Issuance Plan. As of January
12, 1996, 250,000 shares of Common Stock were reserved for future issuances
pursuant to the Employee Stock Purchase Plan. Except as set forth above, and
except as a result of the exercise of employee
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options outstanding as of January 12, 1996, there are no Company Securities
outstanding. Except as disclosed on Schedule 4.2, there are no outstanding
obligations of the Company or any of its subsidiaries to sell or to repurchase,
redeem or otherwise acquire any Company Securities. Each of the outstanding
shares of capital stock of each of the Company's subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and, except with
respect to Agrigenetics or as otherwise disclosed on Schedule 4.2, is directly
or indirectly owned by the Company, free and clear of all security interests,
liens, claims, pledges, charges, voting agreements or other encumbrances of any
nature whatsoever (collectively, "Liens"). Except as disclosed on Schedule 4.2,
there are no existing options, calls, agreements or commitments of any character
relating to the issued or unissued capital stock or other securities of the
Company or any subsidiary of the Company.
Section 4.3 Capitalization of Agrigenetics. The authorized capital stock
of Agrigenetics consists of (i) 100,000 shares of common stock, $.001 par value
per share ("Agrigenetics Stock"), of which, as of January 12, 1996, 10,000
shares were issued and outstanding. MPS has good and valid title to 8,054
shares of Agrigenetics Stock, free and clear of any Liens. As of the date of
this Agreement, the remaining 1,946 outstanding shares of Agrigenetics Stock are
held by Investor and, assuming these shares of Agrigenetics Stock are exchanged
for Common Stock as contemplated by the Stock Purchase Agreement, MPS will have,
at the Closing, good and valid title to all of the shares of Agrigenetics Stock
issued and outstanding. All outstanding shares of Agrigenetics Stock have been
validly issued, and are fully paid, nonassessable and free of preemptive rights.
Except as set forth above there are outstanding (i) no shares of capital stock
or other voting securities of Agrigenetics, (ii) no securities of Agrigenetics
convertible into or exchangeable for shares of capital stock or voting
securities of Agrigenetics, (iii) no options, subscriptions, warrants,
convertible securities, calls or other rights to acquire from Agrigenetics, and
no obligation of Agrigenetics to issue, deliver or sell any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of Agrigenetics and (iv) no equity equivalents,
interests in the ownership or earnings of Agrigenetics or other similar rights
(collectively, "Agrigenetics Securities"). Except as disclosed on Schedule 4.3,
there are no outstanding obligations of the Company or any of its subsidiaries
to repurchase, redeem or otherwise acquire any Agrigenetics Securities.
Section 4.4 Authority Relative to This Agreement. The Company and
Agrigenetics have all necessary corporate power and authority to execute and
deliver this Agreement, to perform their obligations hereunder and to consummate
the transactions
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contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by the Board and no other corporate proceedings on the part
of the Company or Agrigenetics are necessary to authorize this Agreement or to
consummate the transactions so contemplated. This Agreement has been duly and
validly executed and delivered by the Company and constitutes a legal, valid and
binding agreement of the Company enforceable against the Company in accordance
with its terms.
Section 4.5 Waiver of Rights Agreement. The Company and the Board have
taken all necessary action prior to the execution of this Agreement pursuant to
the Rights Agreement so that Parent and its affiliates will not be included in
the definition of "Acquiring Person" (as defined in the Rights Agreement), and
that their acquisition of any shares of Common Stock hereunder, under the Stock
Purchase Agreement, or otherwise after the date hereof will not cause any
adverse consequence to Parent or its affiliates, or the Company, including,
without limitation, the occurrence of a Distribution Date (as defined in the
Rights Agreement) or any adjustment to the Purchase Price (as defined in the
Rights Agreement) as a consequence of the transactions contemplated hereby, by
the Stock Purchase Agreement, or any future acquisitions or proposed
acquisitions of shares of Common Stock by Parent or its affiliates.
Section 4.6 Non-Contravention; Required Filings and Consents.
4.6.1 The execution, delivery and performance by the Company and
Agrigenetics of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) contravene or conflict with the
Articles or Certificate of Incorporation or By-Laws of the Company or
Agrigenetics or the equivalent organizational documents of any of their
respective subsidiaries; (ii) assuming that all consents, authorizations and
approvals contemplated by Section 4.6.2 have been obtained and all filings
described therein have been made, contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to the Company, Agrigenetics, any of their
respective subsidiaries or any of their respective properties; (iii) contravene
or conflict with the NASD Rules; (iv) conflict with, or result in the breach or
termination of any provision of or constitute a default (with or without the
giving of notice or the lapse of time or both) under, or give rise to any right
of termination, cancellation, or loss of any benefit to which the Company,
Agrigenetics or any of their respective subsidiaries is entitled under any
provision of any Significant Agreement as defined in Section 4.16 or any
material agreement, contract,
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license or other instrument binding upon the Company, Agrigenetics, any of their
respective subsidiaries or any of their respective properties, or allow the
acceleration of the performance of, any obligation of the Company, Agrigenetics
or any of their respective subsidiaries under any Significant Agreement or any
material indenture, mortgage, deed of trust, lease, license, contract,
instrument or other agreement to which the Company, Agrigenetics or any of their
respective subsidiaries is a party or by which the Company, Agrigenetics or any
of their subsidiaries or any of their respective assets or properties is subject
or bound, or prevent the Company or any of its subsidiaries from realizing the
benefits otherwise obtainable by the Company or any of its subsidiaries under
any Permits (as defined below) or property interests of Company or any of its
subsidiaries or any contract, agreement, license, arrangement or commitment of
the Company or any of its subsidiaries relating to the business of the Company
with respect to employment arrangements, purchase, sale, lease or license of
assets, guarantees, restriction on conduct of business, leases, licenses,
letters of credit, powers of attorney, joint venture agreements or affiliate
agreements or require the affirmative consent or approval of any third party
under any such material contract, agreement, license, arrangement or commitment;
or (v) result in the creation or imposition of any Lien on any material asset of
the Company, Agrigenetics or any of their respective subsidiaries.
4.6.2 The execution, delivery and performance by the Company and
Agrigenetics of this Agreement and the consummation of the transactions
contemplated hereby by the Company and Agrigenetics require no action by or in
respect of, or filing with, any governmental body, agency, official or authority
(either domestic or foreign) other than (i) compliance with any applicable
requirements of the HSR Act; (ii) compliance with any applicable requirements of
the Exchange Act and state securities, takeover and Blue Sky Laws; and (iii)
such actions or filings which, if not taken or made, would not individually or
in the aggregate have a Material Adverse Effect on the Company or materially
interfere with the consummation of the transactions contemplated by this
Agreement.
Section 4.7 SEC Reports.
4.7.1 The Company has filed or will file when due all required forms,
reports and documents with the SEC since December 31, 1992 (collectively, the
"SEC Reports"), each of which has complied in all material respects with
applicable requirements of the Securities Act and the Exchange Act. As of their
respective dates, none of the SEC Reports, including, without limitation, any
financial statements or schedules included therein, contained any untrue
statement of a material
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fact or omitted to state a 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. The audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company included in the SEC Reports fairly present, in conformity with generally
accepted accounting principles applied on a consistent basis (except as may be
indicated in the notes thereto), the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates thereof and their
consolidated results of operations and cash flows for the periods then ended
(subject to normal year-end adjustments in the case of any unaudited interim
financial statements). The Company has heretofore provided complete and correct
copies of each of the SEC Reports to Parent.
4.7.2 Except as reflected or reserved against in the audited
consolidated balance sheet of the Company and its subsidiaries at August 31,
1995 or as set forth on Schedule 4.7.2, to the Company's knowledge, the Company
and its subsidiaries have no liabilities of any nature (whether accrued,
absolute, contingent or otherwise), except for liabilities incurred in the
ordinary course of business since November 30, 1995 which would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
Section 4.8 Absence of Certain Changes. Since August 31, 1995, there has
not occurred any change or event that has had a Material Adverse Effect on the
Company.
Section 4.9 Finder's Fee. No broker, finder, investment banker or other
intermediary is entitled to any brokerage, finder's or other fee or commission
in connection with the transactions contemplated by this Agreement based upon
arrangements made by and on behalf of the Company, other than BioScience
Securities, Inc., the fees and expenses of which will be paid by the Company.
Section 4.10 Absence of Claims and Litigation. Except as specifically
disclosed in Schedule 4.10, as of the date hereof, there is no action, suit,
claim, investigation or proceeding pending against the Company or any of its
subsidiaries or any of their respective properties before any court or
arbitrator or any administrative, regulatory or governmental body, or any agency
or official, nor to the knowledge of the Company, is any action, suit, claim,
investigation or proceeding threatened against or affecting the Company or any
of its subsidiaries or any of their respective properties, other than claims
relating to alleged nonperformance of seeds or biopesticide products or
unsatisfactory services, which, in the aggregate, are adequately reserved
against in the consolidated balance sheet of the Company
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and its subsidiaries in the ordinary course of business. Neither the Company
nor any of its subsidiaries nor any of their respective properties is subject to
any order, writ, judgment, injunction, decree, determination or award having, or
which would reasonably be expected to have, a Material Adverse Effect on the
Company or which would prevent or delay the consummation of the transactions
contemplated hereby. Except as specifically disclosed on Schedule 4.10, as of
the date hereof, there is no action, suit, claim, investigation or proceeding
pending against, or to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries or their respective properties
before any court or arbitrator or any administrative, regulatory or governmental
body, or any agency or official which in any manner challenges or seeks to
prevent, enjoin, alter or delay the Transaction or any of the other transactions
contemplated hereby or by the Stock Purchase Agreement.
Section 4.11 Taxes. Except as set forth on Schedule 4.11, (a) the Company
and its subsidiaries have filed, been included in or sent, all material returns,
declarations and reports and information returns and statements required to be
filed or sent by or relating to any of them relating to any Taxes (as defined
below) with respect to any material income, properties or operations of the
Company or any of its subsidiaries (collectively, "Returns"); (b) as of the time
of filing, the Returns correctly reflected in all material respects the facts
regarding the income, business, assets, operations, activities and status of the
Company and its subsidiaries and any other information required to be shown
therein; (c) the Company and its subsidiaries have timely paid or made
appropriate provision for all material Taxes that have been shown as due and
payable on the Returns that have been filed; (d) neither the Company nor any of
its subsidiaries is delinquent in the payment of any material Taxes or has
requested any extension of time within which to file or send any material
Return, which Return has not since been filed or sent or which extension has not
expired; (e) no material deficiency for any Taxes has been proposed, asserted or
assessed in writing against the Company or any of its subsidiaries (or any
member of any affiliated or combined group of which the Company or any of its
subsidiaries is or has been a member for which either the Company or any of its
subsidiaries could be liable) other than those Taxes being contested in good
faith by appropriate proceedings; (f) neither the Company nor any of its
subsidiaries has granted any extension of the limitation period applicable to
any material Tax claims other than those Taxes being contested in good faith by
appropriate proceedings; (g) neither the Company nor any of its subsidiaries is
subject to liability for Taxes of any person (other than the Company or its
subsidiaries), including, without limitation, liability arising from the
application of U.S. Treasury Regulation section 1.1502-6
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or any analogous provision of state, local or foreign law; (h) neither the
Company nor any of its subsidiaries is or has been a party to any material tax
sharing agreement with any corporation which is not currently a member of the
affiliated group of which the Company is currently a member; and (i) all Taxes
which the Company or any of its subsidiaries is required by law to withhold or
collect, including sales and use Taxes and amounts required to be withheld for
Taxes of employees and other withholding Taxes, have been duly withheld or
collected and, to the extent required, have been paid over to the proper taxing
authorities or are held in separate bank accounts for such purpose.
"Tax" means with respect to any person (i) any net income, gross income,
gross receipts, sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property, value-added or windfall profit tax, custom duty or other tax,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest and any penalty, addition to tax or additional amount
imposed by any taxing authority (domestic or foreign) on such person and (ii)
any liability of the Company or any subsidiary for the payment of any amount of
the type described in clause (i) as a result of being a member of an affiliated
or combined group.
Section 4.12 Employee Benefits and Labor Matters.
4.12.1 Within 15 days after the execution of this Agreement, the
Company will provide Parent with Schedule 4.12.1 which will contain a true and
complete list of each bonus, deferred compensation, incentive compensation,
stock purchase, stock option, restricted stock issuance, severance or
termination pay, hospitalization or other medical, life or other insurance,
supplemental unemployment benefits, profit-sharing, pension, or retirement plan,
program, agreement or arrangement, sponsored, maintained or contributed to or
required to be contributed to by the Company, by Agrigenetics, or by any trade
or business, whether or not incorporated (an "ERISA Affiliate"), that together
with the Company or Agrigenetics would be deemed a "single employer" within the
meaning of section 4001 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), for the benefit of any employee or terminated employee of
the Company, Agrigenetics, or any ERISA Affiliate (the "Company Plans").
Schedule 4.12.1 will identify each of the Company Plans that is an "employee
benefit plan," as that term is defined in section 3(3) of ERISA (the "Company
ERISA Plans").
4.12.2 Each of the Company Plans has been operated and administered
in all material respects in accordance with its terms and in compliance with all
statutes, laws, orders, rules,
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regulations, judgments or decrees applicable to each of the Company Plans
including, but not limited to ERISA and the Code.
4.12.3 With respect to each of the Company Plans, Company and
Agrigenetics have made available to Parent or will make available to Parent
within 15 days of the execution of this Agreement a true and correct copy of (a)
the most recent annual report (Form 5500) filed with the Internal Revenue
Service, (b) such Company Plan, (c) each trust agreement and group annuity
contract, if any, relating to such Company Plan, (d) the most recent actuarial
report or evaluation relating to Company ERISA Plan subject to Title IV of ERISA
and (e) each determination letter, if any, relating to any of the Company Plans
and any related trusts which are intended respectively to qualify under Section
401(a) of the Code and to be exempt from taxation under Section 501(a) of the
Code.
4.12.4 With respect to the Company Plans, individually and in the
aggregate, no event has occurred, and to the knowledge of the Company,
Agrigenetics, or any of their ERISA Affiliates, there exists no condition or set
of circumstances, including, without limitation, pending, threatened or
anticipated claims, actions, suits, proceedings, or investigations in connection
with which the Company, Agrigenetics, or any of their ERISA Affiliates, or any
of the Company Plans, could be subject to any liability that is reasonably
likely to have a Material Adverse Effect upon the Company, Agrigenetics and any
of their ERISA Affiliates or subsidiaries taken as a whole (except liability for
benefits claims and funding obligations payable in the ordinary course) under
ERISA, the Code or any other applicable law. This representation and warranty
as a liability with respect to the Company Plans includes, without limitation:
(i) liability for federal, state, local, or foreign taxes or civil
penalties;
(ii) termination indemnity liability;
(iii) liability for "reportable events" (within the meaning of
Section 4043 of Title IV of ERISA);
(iv) liability for any "accumulated funding deficiency" (as defined
in Section 302 of ERISA and Section 412 of the Code);
(v) liability under Sections 4064, 4069, or 4204 of ERISA; and
(vi) withdrawal liability under Section 4201 of Title IV of ERISA
with respect to any "multiemployer
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plan" (as defined in sections 3 (37) and 4001 of ERISA).
4.12.5 Except as will be set forth in Schedule 4.12.5, with respect
to the Company Plans, individually and in the aggregate, there are no funded
benefit contribution, or premium obligations for which contributions or payments
have not been made or properly accrued and there are no unfunded benefit,
contribution, or premium obligations which have not been made or accounted for
by reserves, or otherwise properly footnoted in accordance with generally
accepted accounting principles, on the financial statements of the Company,
Agrigenetics, and any of their ERISA Affiliates or subsidiaries, which
obligations are reasonably likely to have a Material Adverse Effect on the
Company, Agrigenetics, and any of their ERISA affiliates or subsidiaries, taken
as a whole.
4.12.6 Neither the Company nor any of its subsidiaries has any labor
contracts, collective bargaining agreements or other employment agreements with
any Company personnel or any representative of Company personnel. Neither the
Company nor any of its subsidiaries has engaged during the three immediately
preceding years in any unfair labor practice with respect to any Company
personnel, nor is there any pending unfair labor practice complaint against it.
Except for routine grievance procedures, there is no labor strike, dispute,
slowdown, or stoppage pending or threatened against or affecting the Company or
any of its subsidiaries or their businesses. Neither the Company nor any of its
subsidiaries has experienced any primary or secondary work stoppage or other
labor difficulty involving its employees during the last five (5) years.
Section 4.13 Compliance. Neither the Company nor any of its subsidiaries
is in violation of, or has violated, any applicable provisions of (i) any laws,
rules, statutes, orders, ordinances or regulations, (ii) the NASD Rules, or
(iii) any material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise, or other instrument or obligations to which the
Company or its subsidiaries is a party or by which the Company or any of its
subsidiaries or its or any of their respective properties are bound or affected,
which, individually or in the aggregate, would result or reasonably be expected
to result in a Material Adverse Effect on the Company.
Section 4.14 Environmental Matters.
4.14.1 The Company and its subsidiaries are in compliance with all
applicable Environmental Laws (which compliance includes, but is not limited to,
the possession by the Company and its subsidiaries of all permits and other
governmental authorizations required under applicable
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Environmental Laws for the operation of the business of the Company and its
subsidiaries, and compliance with the terms and conditions thereof), except for
any noncompliance that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect on the Company.
4.14.2 There is no Environmental Claim pending or threatened against
the Company or any of its subsidiaries which individually or in the aggregate
would reasonably be expected to have a Material Adverse Effect on the Company.
4.14.3 Neither the Company nor any of its subsidiaries has, and to
the knowledge of the Company, no other person has, Released, placed, stored,
buried or dumped Hazardous Materials or any other wastes produced by, or
resulting from, any business, commercial or industrial activities, operations or
processes, on, beneath or adjacent to or in any property owned, operated or
leased or formerly owned, operated or leased by the Company or any of its
subsidiaries which, in either case, would require Cleanup pursuant to applicable
Environmental Laws which, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect on the Company. Neither the Company
nor any of its subsidiaries has received notice that it is a potentially
responsible party for the Cleanup of any property, whether or not owned or
operated by the Company or any of its subsidiaries, which individually or in the
aggregate would reasonably be expected to have a Material Adverse Effect on the
Company.
Section 4.15 Intellectual Property. Except to the extent that the
inaccuracy of any of the following (or the circumstances giving rise to such
inaccuracy) individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect on the Company: (1) the Company and each of
its subsidiaries owns, or is licensed to use (in each case, free and clear of
any Liens), all Intellectual Property used in or necessary for the conduct of
its business as currently conducted; (2) to the knowledge of the Company, the
use of any Intellectual Property by the Company and its subsidiaries does not
infringe on or otherwise violate the rights of any person; (3) to the knowledge
of the Company, no product (or component thereof or process) used, sold or
manufactured by and/or for, or supplied to, the Company or any of its
subsidiaries infringes or otherwise violates the Intellectual Property of any
other person; and (4) to the knowledge of the Company, no person is infringing
on or otherwise violating any right of the Company or any of its subsidiaries
with respect to any Intellectual Property owned by and/or licensed to the
Company and its subsidiaries. Schedule 4.10 sets forth a complete list of all
challenges, claims, infringements, interferences and pending or, to the
knowledge of the Company, threatened litigation relating to any Intellectual
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Property owned, licensed or used by the Company or any of its subsidiaries.
Section 4.16 Significant Agreements. Schedule 4.16 sets forth as of the
date of this Agreement a complete and correct list of all contracts, agreements,
indentures, leases, mortgages, licenses, plans, arrangements, understandings,
commitments (whether written or oral) and instruments (collectively,
"Contracts") that are material to the Company and its subsidiaries, including,
without limitation, the following: (i) all Contracts set forth as exhibits to
the Company's Annual Report on Form 10-K for the fiscal year ended August 31,
1995 and (ii) any Contract between the Company or any of its subsidiaries, on
the one hand, and on the other hand, Pioneer Hi-Bred International or any of its
affiliates (collectively, the "Significant Agreements"). Except as set forth on
Schedule 4.16, since August 31, 1995, there have been no transactions between
the Company or any of its subsidiaries, on the one hand, and the other parties
to the Significant Agreements or any of their respective affiliates, on the
other hand, other than transactions in the ordinary course of business
consistent with past practice pursuant to and in accordance with the terms of
the Significant Agreements. The execution, delivery and performance by the
Company of this Agreement and the consummation of the transactions contemplated
hereby do not and will not conflict with, or result in the breach or termination
of any provision of or constitute a default (with or without the giving of
notice or the lapse of time or both) under, or give rise to any right of
termination, cancellation, or loss of any benefit to which the Company or any of
its subsidiaries is entitled under any provision of any Significant Agreement.
Section 4.17 Product Registrations. Except as disclosed in Schedule 4.17,
(i) the Company has obtained all Product Registrations required for the conduct
of its business or the business of any of its subsidiaries, (ii) the Company is
the sole and exclusive owner of all right, title and interest in such Product
Registrations, free and clear of any claim, security interest, lien, option or
charge of any kind, unless such Product Registrations must be held by companies
domiciled within a specific country, and (iii) the Company has an unrestricted
right to reference all studies and other Data used to obtain or maintain such
Product Registrations. The Company's Product Registrations are in full force
and effect and have not been used or enforced, or failed to be used or enforced,
in a manner that would result in their abandonment, cancellation or
unenforceability. There are no claims of adverse ownership, invalidity or other
opposition to or conflict with any of the Company's Product Registrations. To
the knowledge of the Company, neither the Company, nor any of its subsidiaries,
has violated or infringed or is in violation of or infringement of
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any Product Registrations held by any other person. To the Company's knowledge,
no infringements or violations of the Company's Product Registrations have
occurred or are continuing. The Company's Product Registrations constitute all
registrations and other governmental approvals to market and sell the pesticide
or genetically modified products currently marketed and sold by the Company.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company as follows:
Section 5.1 Organization. Parent is a general partnership organized
under the laws of the State of Indiana and Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and Parent and Subsidiary each has all requisite partnership or
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. Subsidiary is duly qualified or
licensed and in good standing to do business in each jurisdiction (including any
foreign country) 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 where the failure to be so duly qualified or licensed and in
good standing would not, individually or in the aggregate, have a Material
Adverse Effect on Subsidiary.
Section 5.2 Authority Relative to this Agreement. Each of Parent and
Subsidiary has all necessary partnership or corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by Parent in
accordance with its Amended and Restated Partnership Agreement, and by Parent as
the sole stockholder of Subsidiary, and no other partnership or corporate
proceedings on the part of Parent or Subsidiary are necessary to authorize this
Agreement or to consummate the transactions so contemplated. This Agreement has
been duly and validly executed and delivered by each of Parent and Subsidiary
and constitutes a legal, valid and binding agreement of each of Parent and
Subsidiary, enforceable against each of Parent and Subsidiary in accordance with
its terms.
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Section 5.3 Non-Contravention; Required Filings and Consents.
5.3.1 The execution, delivery and performance by Parent and
Subsidiary of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) contravene or conflict with the
Amended and Restated Partnership Agreement, Certificate of Incorporation, By-
Laws or other organizational documents of Parent, any of its partners or
Subsidiary; (ii) assuming that all consents, authorizations and approvals
contemplated by Section 5.3.2 have been obtained and all filings described
therein have been made, contravene or conflict with or constitute a violation of
any provision of any law, regulation, judgment, injunction, order or decree
binding upon or applicable to Parent, any of its partners or Subsidiary or any
of their respective properties; (iii) conflict with, or result in the breach or
termination of any provision of or constitute a default (with or without the
giving of notice or the lapse of time or both) under, or give rise to any right
of termination, cancellation, or loss of any benefit to which Parent or
Subsidiary is entitled under any provision of any Subsidiary Agreement (as
defined in Section 5.14 below) or any material agreement, contract, license or
other instrument binding upon Parent, Subsidiary or any of their respective
properties, or allow the acceleration of the performance of, any obligation of
Parent or Subsidiary under any Subsidiary Agreement or any material indenture,
mortgage, deed of trust, lease, license, contract, instrument or other agreement
to which Parent or Subsidiary is a party or by which Parent or Subsidiary or any
of their respective assets or properties is subject or bound, or prevent
Subsidiary from realizing the benefits otherwise obtainable by Subsidiary under
any Permits (as defined in Section 5.17 below) or property interests of Parent
or Subsidiary or any contract, agreement, license, arrangement or commitment of
Parent or Subsidiary relating to the business of Subsidiary with respect to
employment arrangements, purchase, sale, lease or license of assets, guarantees,
restriction on conduct of business, leases, licenses, letters of credit, powers
of attorney, joint venture agreements or affiliate agreements or require the
affirmative consent or approval of any third party under any such material
contract, agreement license, arrangement or commitment; or (iv) result in the
creation or imposition of any Lien on any asset of Parent or Subsidiary.
5.3.2 The execution, delivery and performance by Parent and
Subsidiary of this Agreement and the consummation of the transactions
contemplated hereby require no action by or in respect of, or filing with, any
governmental body, agency, official or authority (either domestic or foreign)
other than (i) compliance with any applicable requirements of the HSR Act; (ii)
compliance with any applicable requirements of the Exchange Act
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and state securities, takeover and Blue Sky Laws; and (iii) such actions or
filings which, if not taken or made, would not, individually or in the
aggregate, have a Material Adverse Effect on Subsidiary or materially interfere
with the consummation of the transactions contemplated by this Agreement or the
Stock Purchase Agreement.
Section 5.4 Capitalization of Subsidiary. The authorized capital stock of
Subsidiary consists of (i) 1,000 Subsidiary Shares of which, as of January 12,
1996, 1,000 Subsidiary Shares were issued and outstanding. Parent has, and at
the Closing hereunder Parent will have, good and valid title to all of the
outstanding Subsidiary Shares, free and clear of any Liens. All outstanding
Subsidiary Shares have been validly issued, and are fully paid, nonassessable
and free of preemptive rights. Except as set forth above, there are no
Subsidiary Securities outstanding. There are no outstanding obligations of
Subsidiary to sell or to repurchase, redeem or otherwise acquire any Subsidiary
Securities. Subsidiary has no subsidiaries.
Section 5.5 Financial Statements. 5.5.1 Schedule 5.5.1 sets forth
complete and correct copies of the pro forma unaudited financial statements of
Subsidiary for the twelve month periods ended September 30, 1994 and 1995.
Within 15 days after the execution of this Agreement, Parent will provide
Company a complete and correct copy of unaudited financial statements of
Subsidiary for the calendar quarters ended March 31, 1995, June 30, 1995,
September 30, 1995, and December 31, 1995. Within 10 days after the Closing
Parent will provide Company with a complete and correct copy of the Subsidiary
Closing Balance Sheet. All such financial statements collectively will
hereinafter be referred to as the "Subsidiary Financial Statements." The
Subsidiary Financial Statements and the calculations of the Subsidiary Tangible
Net Worth and the average tangible net worth fairly present, in conformity with
generally accepted accounting principles applied on a consistent basis (except
as may be indicated in the notes thereto), the financial position of Subsidiary
as of the dates thereof and the consolidated results of operations and cash
flows for the periods then ended.
5.5.2 Except as reflected or reserved against in the audited
consolidated balance sheet of Subsidiary at September 30, 1995 or as set forth
on Schedule 5.5.2, to the knowledge of Parent, Subsidiary has no liabilities of
any nature (whether accrued, absolute, contingent or otherwise), except for
liabilities incurred in the ordinary course of business since September 30, 1995
which would not, individually or in the aggregate, have a Material Adverse
Effect on Subsidiary.
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Section 5.6 Absence of Certain Changes. Since September 30, 1995, there
has not occurred any change or event that has had a Material Adverse Effect on
Subsidiary.
Section 5.7 Finder's Fee. No broker, finder, investment banker or other
intermediary is entitled to any brokerage, finder's or other fee or commission
in connection with the transactions contemplated by this Agreement or by the
Stock Purchase Agreement based upon arrangements made by and on behalf of
Parent.
Section 5.8 Absence of Claims and Litigation. Except as specifically
disclosed on Schedule 5.8, as of the date of this Agreement, there is no action,
suit, claim, investigation or proceeding pending against Subsidiary or any of
its respective properties before any court or arbitrator or any administrative,
regulatory or governmental body, or any agency or official, nor to the knowledge
of Parent, is any action, suit, claim, investigation or proceeding threatened
against or affecting Subsidiary or any of its properties, other than the claims
relating to alleged nonperformance of seeds, which, in the aggregate, are
adequately reserved against in Subsidiary's balance sheet in the ordinary course
of business. Neither Subsidiary nor any of its properties is subject to any
order, writ, judgment, injunction, decree, determination or award having, or
which would reasonably be expected to have, a Material Adverse Effect on
Subsidiary or which would prevent or delay the consummation of the transactions
contemplated hereby. Except as specifically disclosed on Schedule 5.8, as of
the date of this Agreement, there is no action, suit, claim, investigation or
proceeding pending against, or to the knowledge of Parent, threatened against or
affecting Parent or any of its partners or properties before any court or
arbitrator or any administrative, regulatory or governmental body, or any agency
or official which in any manner challenges or seeks to prevent, enjoin, alter or
delay the Transaction or any of the other transactions contemplated hereby or by
the Stock Purchase Agreement. Neither Parent nor any of its partners or
properties is subject to any order, writ, judgment, injunction, decree,
determination or award which would reasonably be expected to have a Material
Adverse Effect on Subsidiary or would prevent or delay the consummation of the
transactions contemplated hereby.
Section 5.9 Taxes. Except as set forth on Schedule 5.9, (a) Subsidiary
has filed, been included in or sent, all material returns, declarations and
reports and information returns and statements required to be filed or sent by
or relating to it relating to any Taxes with respect to any material income,
properties or operations of Subsidiary (collectively, "Subsidiary Returns"); (b)
as of the time of filing, the Subsidiary Returns correctly reflected in all
material respects the facts regarding
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the income, business, assets, operations, activities and status of Subsidiary
and any other information required to be shown therein; (c) Subsidiary has
timely paid or made provision for all material Taxes that have been shown as due
and payable on the Subsidiary Returns that have been filed; (d) Subsidiary has
made or will make provision for all material Taxes payable for any periods that
end before the Closing for which no Subsidiary Returns have yet been filed and
for any periods that begin before the Closing and end after the Closing to the
extent such Taxes are attributable to the portion of any such period ending at
the Closing; (e) the charges, accruals and reserves for taxes reflected on the
books of Subsidiary are adequate to cover the Tax liabilities accruing or
payable by Subsidiary in respect of periods prior to the date hereof; (f)
Subsidiary is not delinquent in the payment of any material Taxes nor has it
requested any extension of time within which to file or send any material
Subsidiary Return, which Subsidiary Return has not since been filed or sent or
which extension has not expired; (g) no material deficiency for any Taxes has
been proposed, asserted or assessed in writing against Subsidiary (or any member
of any affiliated or combined group of which Subsidiary is or has been a member
for which either the Company or any of its subsidiaries could be liable) other
than those Taxes being contested in good faith by appropriate proceedings; (h)
Subsidiary has not granted any extension of the limitation period applicable to
any material Tax claims other than those Taxes being contested in good faith by
appropriate proceedings; (i) Subsidiary is not subject to liability for Taxes of
any other person, including, without limitation, liability arising from the
application of U.S. Treasury Regulation section 1.1502-6 or any analogous
provision of state, local or foreign law; (j) Subsidiary is not nor has it been
a party to any material tax sharing agreement with any corporation which is not
currently a member of the affiliated group of which Subsidiary is currently a
member; and (k) all Taxes which Subsidiary is required by law to withhold or
collect, including sales and use Taxes and amounts required to be withheld for
Taxes of employees and other withholding Taxes, have been duly withheld or
collected and, to the extent required, have been paid over to the proper taxing
authorities or are held in separate bank accounts for such purpose.
Section 5.10 Employee Benefits.
5.10.1 Within 15 days after the execution of this Agreement, Parent
will provide the Company with Schedule 5.10.1 which will contain a true and
complete list of each bonus, deferred compensation, incentive compensation,
stock purchase, stock option, restricted stock issuance, severance or
termination pay, hospitalization or other medical, life or other insurance,
supplemental unemployment benefits, profit-sharing, pension, or retirement plan,
program, agreement or arrangement, sponsored,
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maintained or contributed to or required to be contributed to by Subsidiary for
the benefit of any employee or terminated employee of Subsidiary (the
"Subsidiary Plans"). Schedule 5.10.1 will identify each of the Subsidiary Plans
that is an "employee benefit plan," as that term is defined in section 3(3) of
ERISA (the "Subsidiary ERISA Plans").
5.10.2 Each of the Subsidiary Plans has been operated and
administered in all material respects in accordance with its terms and in
compliance with all statutes, laws, orders, rules, regulations, judgments or
decrees applicable to each of the Subsidiary Plans including, but not limited to
ERISA and the Code.
5.10.3 With respect to each of the Subsidiary Plans, Parent has made
available to the Company or will make available to Company within 15 days of the
execution of this Agreement a true and correct copy of (a) the most recent
annual report (Form 5500) filed with the Internal Revenue Service, (b) such
Subsidiary Plan, (c) each trust agreement and group annuity contract, if any,
relating to such Subsidiary Plan, (d) the most recent actuarial report or
evaluation relating to Subsidiary ERISA Plan subject to Title IV of ERISA and
(e) each determination letter, if any, relating to any of the Subsidiary Plans
and any related trusts which are intended respectively to qualify under Section
401(a) of the Code and to be exempt from taxation under Section 501(a) of the
Code.
5.10.4 With respect to the Subsidiary Plans, individually and in the
aggregate, no event has occurred, and to the knowledge of Parent there exists no
condition or set of circumstances, including, without limitation, pending,
threatened or anticipated claims, actions, suits, proceedings, or investigations
in connection with which Subsidiary, or any of the Subsidiary Plans, could be
subject to any liability that is reasonably likely to have a Material Adverse
Effect upon Subsidiary (except liability for benefits claims and funding
obligations payable in the ordinary course) under ERISA, the Code or any other
applicable law. This representation and warranty as a liability with respect to
the Company Plans includes, without limitation:
(i) liability for federal, state, local, or foreign taxes or civil
penalties;
(ii) termination indemnity liability;
(iii) liability for "reportable events" (within the meaning of
Section 4043 of Title IV of ERISA);
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(iv) liability for any "accumulated funding deficiency" (as defined
in Section 302 of ERISA and Section 412 of the Code);
(v) liability under Sections 4064, 4069, or 4204 of ERISA; and
(vi) withdrawal liability under Section 4201 of Title IV of ERISA
with respect to any "multiemployer plan" (as defined in
sections 3 (37) and 4001 of ERISA).
5.10.5 Within 15 days after the date of this Agreement, Parent will
provide the Company with Schedule 5.10.5. Except as will be set forth in
Schedule 5.10.5, with respect to the Subsidiary Plans, individually and in the
aggregate, there are no funded benefit contribution, or premium obligations for
which contributions or payments have not been made or properly accrued and there
are no unfunded benefit, contribution, or premium obligations which have not
been made or accounted for by reserves, or otherwise properly footnoted in
accordance with generally accepted accounting principles, on the financial
statements of Subsidiary, which obligations are reasonably likely to have a
Material Adverse Effect on Subsidiary.
5.10.6 Subsidiary does not have any labor contracts, collective
bargaining agreements or other employment agreements with any company personnel
or any representative of company personnel. Subsidiary has not engaged during
the three immediately preceding years in any unfair labor practice with respect
to any company personnel, nor is there any pending unfair labor practice
complaint against it. Except for routine grievance procedures, there is no
labor strike, dispute, slowdown, or stoppage pending or threatened against or
affecting Subsidiary or its business. Subsidiary has not experienced any
primary or secondary work stoppage or other labor difficulty involving its
employees during the last five (5) years.
5.10.7 None of the Company, Subsidiary, Agrigenetics or any of their
subsidiaries will be liable on or after the Closing in respect of any benefit
plan maintained or contributed to by any affiliate of Subsidiary prior to the
Closing.
Section 5.11 Compliance. Neither Parent nor Subsidiary is in violation
of, or has violated, any applicable provisions of (i) any laws, rules, statutes,
orders, ordinances or regulations or (ii) any material note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise, or other
instrument or obligations to which Parent or Subsidiary is a party or by which
Subsidiary or their respective properties are bound or affected, which,
individually or in the aggregate, would result
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or reasonably be expected to result in a Material Adverse Effect on Subsidiary.
Section 5.12 Environmental Matters.
5.12.1 Subsidiary is in compliance with all applicable Environmental
Laws (which compliance includes, but is not limited to, the possession by
Subsidiary of all permits and other governmental authorizations required under
applicable Environmental Laws for the operation of Subsidiary's business, and
compliance with the terms and conditions thereof), except for any noncompliance
that individually or in the aggregate would not reasonably be expected to result
in any loss or liability to Subsidiary in excess of $100,000.
5.12.2 There is no Environmental Claim pending or threatened against
Subsidiary which individually or in the aggregate would reasonably be expected
to result in any loss or liability to Subsidiary in excess of $100,000.
5.12.3 Subsidiary has not, and to the knowledge of Parent, no other
person has Released, placed, stored, buried or dumped Hazardous Materials or any
other wastes produced by, or resulting from, any business, commercial or
industrial activities, operations or processes, on, beneath or adjacent to or in
any property owned, operated or leased or formerly owned, operated or leased by
Subsidiary, which, in either case, would require Cleanup pursuant to applicable
Environmental Laws which, individually or in the aggregate, would reasonably be
expected to result in any loss or liability to Subsidiary in excess of $100,000,
and Subsidiary has not received notice that it is a potentially responsible
party for the Cleanup of any property, whether or not owned or operated by
Subsidiary, which individually or in the aggregate would reasonably be expected
to result in any loss or liability to Subsidiary in excess of $100,000.
Section 5.13 Intellectual Property.
5.13.1 Except to the extent that the inaccuracy of any of the
following (or the circumstances giving rise to such inaccuracy) individually or
in the aggregate, would not reasonably be expected to have a Material Adverse
Effect on Subsidiary: (1) Subsidiary owns, or is licensed to use (in each case,
free and clear of any Liens), all Intellectual Property used in or necessary for
the conduct of Subsidiary's business as currently conducted; (2) to the
knowledge of Parent, the use of any Intellectual Property by Subsidiary does not
infringe on or otherwise violate the rights of any person; (3) to the knowledge
of Parent, no product (or component thereof or process) used, sold or
manufactured by and/or for, or supplied to, Subsidiary
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infringes or otherwise violates the Intellectual Property of any other person;
and (4) to the knowledge of Parent, no person is challenging, infringing on or
otherwise violating any right of Subsidiary with respect to any Intellectual
Property owned by and/or licensed to Subsidiary. Schedule 5.8 sets forth a
complete list as of the date of this Agreement of all challenges, claims,
infringements, interferences and pending or, to the knowledge of Parent,
threatened litigation relating to any Intellectual Property owned, licensed or
used by Subsidiary.
Section 5.14 Significant Agreements. Schedule 5.14 sets forth as of the
date of this Agreement a complete and correct list of all contracts that are
material to the business, properties, assets, condition (financial or otherwise)
or results of operations of Subsidiary, except such contracts that were executed
in the ordinary course of business (collectively, the "Subsidiary Agreements").
Except as set forth on Schedule 5.14, since September 30, 1995, there have been
no transactions between Subsidiary, on the one hand, and the other parties to
the Subsidiary Agreements or any of their respective affiliates, on the other
hand, other than transactions in the ordinary course of business consistent with
past practice pursuant to and in accordance with the terms of the Subsidiary
Agreements. Except as specified on Schedule 5.14, all Subsidiary Agreements
required to be listed on Schedule 5.14 are valid and binding, enforceable (in
all material respects) in accordance with their respective terms and in full
force and effect. Neither Subsidiary nor, to the best of Parent's knowledge,
any other party thereto, is in breach of any material provision of or in default
under any material term of any such Subsidiary Agreement, and there exists no
condition or event which after lapse of time or notice (or both) would
constitute any such breach or default or result in any right of termination,
cancellation, acceleration or loss of any benefits thereunder. True and
complete copies of all such Subsidiary Agreements have been or will be delivered
to the Company within 15 days after the execution of this Agreement.
Section 5.15 Charter Documents and Corporate Records. Parent and
Subsidiary have delivered to the Company or will deliver within a reasonable
time after signing true and complete copies of (i) the Certificate of
Incorporation and By-laws, or comparable instruments, of Subsidiary as in effect
on the date hereof, (ii) the stock books of Subsidiary and (iii) the minute
books of Subsidiary. The minute books of Subsidiary contain true and complete
records of all meetings and consents in lieu of meeting of the Board of
Directors (and any committee thereof) of Subsidiary, and its stockholders, for
the periods covered thereby and accurately reflect in all material respects all
transactions referred to in such minutes and consents in lieu of meeting.
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Section 5.16 Assets.
5.16.1 Subsidiary owns or has the right to use all of the patents,
trademarks, tradenames, copyrights, conventional germplasm, real property and
equipment ("Assets") used predominantly in or necessary for the conduct of
Subsidiary's business as currently conducted; provided, however, that High Oil
Germ Plasm (as defined in Schedule 5.16.1) shall be specifically excluded from
Assets. Schedule 5.16.1 sets forth Parent's High Oil Germ Plasm as of the date
of this Agreement. To the extent any of the Assets were owned by Parent
immediately prior to the execution of this Agreement, they were transferred to
Subsidiary pursuant to the Transfer Agreement executed between Parent and
Subsidiary dated January 12, 1996, as amended.
5.16.2 None of the Assets are subject to Liens, except (i) Liens
incurred or made in the ordinary course of business which are not substantial in
character, amount or extent and do not materially impair the usefulness of such
properties and assets in the conduct of the business of Subsidiary; (ii) Liens
for taxes, assessments or other governmental charges or levies which are either
not yet due or are being contested in good faith and by appropriate proceedings
or can be paid without penalty and which do not materially impair the usefulness
of such Assets in the conduct of the business of Subsidiary; or (iii) as
reflected on the Subsidiary Balance Sheet.
5.16.3 Subsidiary has good and insurable fee title to, or a valid and
subsisting leasehold interest in, the real property and, in the case of such
owned real property, to all the buildings, structures and other improvements
located thereon. Subsidiary does not own or hold, and is not contractually
obligated under or a party to, any option, right of first refusal or other
contractual right to lease, purchase or acquire any real property or interest
therein. Within 15 days after the date of execution of this Agreement, Parent
will deliver to the Company true, correct and complete copies of all leases,
subleases, licenses and other agreements (including all modifications,
amendments and supplements thereto) for the leased real property listed on
Schedule 5.16.3 (collectively, the "Real Property Leases"). Each Real Property
Lease is valid, binding and in full force and effect, all rent and other sums
and charges payable by Parent or Subsidiary as tenant thereunder are current, no
notice of default or termination under any Real Property Lease is outstanding,
no termination event or condition or uncured default on the part of Parent or
Subsidiary or, to Parent's and Subsidiary's knowledge, the landlord, exists
under any Property Lease and, to Parent's or Subsidiary's knowledge no event has
occurred and no condition exists which, with the giving of notice or the lapse
of time or both, would constitute such a default or termination event or
condition. Parent has not received notice
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of, and Parent has no knowledge of, any pending, threatened or contemplated
condemnation proceeding affecting the real property or any part thereof or of
any sale or other disposition of the real property or any part thereof in lieu
of condemnation. No portion of the real property has suffered any material
damage by fire or other casualty which has not heretofore been completely
repaired and restored to its original condition.
Section 5.17 Licenses, Permits, Authorizations, Etc. Subsidiary has all
required governmental approvals, authorizations, consents, licenses, orders,
registrations and permits of all agencies, whether federal, state, local or
foreign (collectively, "Permits"), the failure to obtain which would be expected
to have a Material Adverse Effect on Subsidiary. Neither Parent nor, to
Parent's knowledge, Subsidiary, has received any notifications of any asserted
failure or is otherwise aware of any failure by it to have obtained any such
Permit or past and unremedied failure to obtain any such Permit. All Permits
are in full force and effect. No material violations have been alleged in
writing by any governmental authority or agency, whether federal, state, local
or foreign, and no proceeding is pending or, to the knowledge of Parent,
threatened, to revoke, suspend, cancel or limit a Permit, which revocation or
similar action would be expected to have a Material Adverse Effect on
Subsidiary. No action by any of the parties hereto is required in order that
all Permits will remain in full force and effect immediately after the Closing.
Section 5.18 Employee Relations. Subsidiary has approximately 160
employees. No union or other collective bargaining unit has been certified or
recognized by Subsidiary as representing any of its employees and, to the
knowledge of Parent, no union organizing efforts have been conducted within the
last five years or are now being conducted. Subsidiary has not at any time
during the last five years had, nor, to the knowledge of Parent, is there now
threatened, a strike, picket, work stoppage, work slowdown or other labor
trouble. Subsidiary has complied in all material respects with all applicable
laws, rules and regulations relating to the employment of labor, including,
without limitation, those relating to wages, hours, employment practices, terms
and conditions of employment, collective bargaining, equal opportunity or
similar laws and the payment and withholding of taxes, and Subsidiary has
withheld all amounts required by law or agreement to be withheld from the wages
or salaries of its employees and is not liable for any arrears of wages or other
taxes or penalties for failure to comply with any of the foregoing. There are
no material claims, suits, actions, proceedings or controversies pending or, to
the knowledge of Parent, threatened between Subsidiary and any of its employees,
and, to the knowledge of Parent, no basis exists for the making of any claim,
suit, action or proceeding against
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Subsidiary in respect of sexual harassment or discrimination based on sex, age,
race, disability or sexual orientation.
Section 5.19 Investment Intent. Parent is purchasing or acquiring the
Purchase Shares for its own account for investment and not with a present view
to, or for sale in connection with, any distribution thereof in violation of the
Securities Act. Subject to compliance with the HSR Act, the purchase of the
Purchase Shares by Parent hereunder is legally permitted by all laws and
regulations to which Parent is subject.
ARTICLE 6
COVENANTS
Section 6.1 Conduct of Business of the Company, Agrigenetics and
Subsidiary. Except as otherwise expressly provided in this Agreement, during
the period from the date hereof to the Closing, the Company, Agrigenetics and
their respective subsidiaries and Subsidiary will each conduct its operations
according to its ordinary course of business consistent with past practice, and
the Company, Agrigenetics and their respective subsidiaries and Subsidiary will
each use its best efforts to preserve intact its business organization, to keep
available the services of its officers and employees and to maintain existing
relationships with licensors, licensees, suppliers, contractors, distributors,
customers and others having business relationships with it. Without limiting
the generality of the foregoing, and except as otherwise expressly provided in
this Agreement, prior to the Closing, neither the Company and Agrigenetics on
the one hand, nor Subsidiary on the other hand, will, except, with the prior
written consent of the other:
6.1.1 amend or propose to amend its certificate or articles of
incorporation or by-laws or equivalent organizational documents;
6.1.2 authorize for issuance, issue, sell, deliver or agree or commit
to issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other securities or equity equivalents (including, without
limitation, stock appreciation rights), except, in the case of the Company,
pursuant to any Company Plan as in effect as of the date hereof or upon any
conversion of Series A Convertible Preferred Stock or upon exercise of the
Investor's Conversion Right, or amend any of the terms of any such securities or
agreements outstanding as of the date hereof;
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6.1.3 split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in cash,
stock, or property or any combination thereof) in respect of its capital stock
(other than dividends or distributions by a directly or indirectly wholly owned
subsidiary of the Company), or redeem, repurchase or otherwise acquire any of
its securities or any securities of its subsidiaries;
6.1.4 (i) incur any indebtedness for borrowed money or issue any debt
securities or, except in the ordinary course of business consistent with past
practice, assume, guarantee or endorse the obligations of any other person; (ii)
except as the Company has previously informed Parent in writing, make any loans,
advances or capital contributions to, or investments in, any other person (other
than, in the case of the Company, to subsidiaries of the Company); (iii) pledge
or otherwise encumber shares of its capital stock or of its subsidiaries; or
(iv) except in the ordinary course of business consistent with past practice,
mortgage or pledge any of its assets, tangible or intangible, or create or
suffer to exist any Lien thereupon;
6.1.5 enter into, adopt or (except as may be required by law) amend
or terminate any bonus, profit sharing, compensation, severance, termination,
stock appreciation right, restricted stock, performance unit, stock equivalent,
stock purchase agreement, pension, retirement, deferred compensation,
employment, severance or other employee benefit agreement, trust, plan, fund or
other arrangement for the benefit or welfare of any director, officer or
employee, increase in any manner the compensation or benefits of any director,
officer or employee or pay any benefit not required by any plan or arrangement
as in effect as of the date hereof (including, without limitation, the granting
of stock options, restricted stock, stock appreciation rights or performance
units); provided, however, the Company may adopt, amend or enter into (i)
employee stock option plans or agreements up to the limit described in Section
6.16.2 or (ii) in the case of employees who are not officers or directors,
provision for normal compensation increases in the ordinary course of business
consistent with past practice that, in the aggregate, do not result in a
material increase in benefits or compensation expense;
6.1.6 acquire, sell, lease or dispose of any assets outside the
ordinary course of business or any assets which in the aggregate are material to
the Company and Agrigenetics on the one hand or Subsidiary on the other hand, or
enter into any contract, agreement, commitment or transaction outside the
ordinary course of business consistent with past practice;
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6.1.7 change any of the accounting principles or practices
used by it;
6.1.8 (i) acquire (by merger, consolidation, or acquisition of stock
or assets) any corporation, partnership or other business organization or
division thereof; (ii) authorize any new capital expenditure or expenditures
which, individually, is in excess of $500,000 or, in the aggregate, are in
excess of $2,000,000 (in the case of the Company, other than capital
expenditures heretofore approved by the management of the Company in the
aggregate amount of $5,400,000 and additional capital expenditures that may be
approved by management of the Company to upgrade the production facilities which
shall not exceed $3,700,000; (iii) settle any litigation involving payments in
excess of $50,000 individually or $200,000 in the aggregate; or (iv) enter into
or amend any contract, agreement, commitment or arrangement with respect to any
of the foregoing;
6.1.9 make any tax election or settle or compromise any tax
liability;
6.1.10 pay, discharge or satisfy any 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 in accordance with their
terms, of liabilities reflected or reserved against in its financial statements
(or the notes thereto) or incurred in the ordinary course of business consistent
with past practice;
6.1.11 in the case of the Company or its subsidiaries, terminate,
modify, amend or waive compliance with any provision of, any of the Significant
Agreements, or fail to take any action necessary to preserve the benefits of any
Significant Agreement to the Company or any of its subsidiaries, and in the case
of Subsidiary, terminate, modify, amend or waive compliance with any provision
of, any of the Subsidiary Agreements (except as described in Schedule 5.14), or
fail to take any action necessary to preserve the benefits to Subsidiary of any
Subsidiary Agreements; or
6.1.12 except, in the case of the Company or its subsidiaries, as may
arise out of the discussions currently in progress that have been previously
disclosed to Parent in writing, enter into any licensing agreements, technical
collaborations with third parties or any other similar transactions outside of
the ordinary course of business;
6.1.13 take, or agree in writing or otherwise to take, any of the
actions described above in this Section 6.1 or any action which would make any
of the representations or warranties
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of the Company or of Parent contained in this Agreement untrue or incorrect or
would result in any of the conditions hereunder not being satisfied.
Section 6.2 Qualified Stock Purchase. The parties agree that the sale of
the Subsidiary Shares in exchange for the Seed Purchase Shares and the
Promissory Note is intended to constitute a "qualified stock purchase" within
the meaning of Section 338 (d)(3) of the Code and the parties will not take any
positions inconsistent with that intention in any Return or Subsidiary Return.
Section 6.3 Access to Information and Facilities.
6.3.1 Subject to applicable law, for a period of 90 days from the
date hereof, upon reasonable notice, the Company will give each of Parent and
its counsel, financial advisors, auditors, consultants and other authorized
representatives reasonable access to all senior management, outside accountants
and other experts and to all properties and books and records of the Company and
its subsidiaries, and the Company will permit each of Parent and its counsel,
financial advisors, auditors, consultants and other authorized representatives
to make such inspections of the foregoing properties, books and records as
Parent may reasonably require and will cause the Company's officers and those of
its subsidiaries to furnish Parent or its authorized representatives with such
financial and operating data and other information with respect to the business
and properties of the Company and any of its subsidiaries as Parent may
reasonably request. Any such access will be provided, and all such inspections
will be conducted, at reasonable times and in such a manner so as not to
interfere unreasonably with the operation of the business of the Company or its
subsidiaries. No investigation pursuant to this Section 6.3.1 will affect any
representations or warranties of the parties herein or the conditions to the
obligations of the parties hereunder. Information supplied and access granted
under this Section 6.3.1 will be subject to the Confidentiality Agreement.
6.3.2 Subject to applicable law, between the date hereof and the
Closing, upon reasonable notice, Subsidiary will give each of the Company and
its counsel, financial advisors, auditors, consultants and other authorized
representatives reasonable access to all senior management, outside accountants
and other experts and to all properties and books and records of Subsidiary, and
Subsidiary will permit each of the Company and its counsel, financial advisors,
auditors, consultants and other authorized representatives to make such
inspections of the foregoing properties, books and records as the Company may
reasonably require and will cause Subsidiary's officers and those of its
subsidiaries to furnish the Company or its authorized
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representatives with such financial and operating data and other information
with respect to the business and properties of Subsidiary as the Company may
reasonably request. Any such access will be provided, and all such inspections
will be conducted, at reasonable times and in such a manner so as not to
interfere unreasonably with the operation of the business of Subsidiary. No
investigation pursuant to this Section 6.3.2 will affect any representations or
warranties of the parties herein or the conditions to the obligations of the
parties hereunder. Information supplied and access granted under this Section
6.3.2 will be subject to the Confidentiality Agreement.
Section 6.4 Reasonable Best Efforts. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things reasonably necessary, proper or advisable under applicable laws
and regulations to consummate and make effective the transactions contemplated
by this Agreement. Without limiting the generality of the foregoing, Parent,
Subsidiary, the Company and Agrigenetics will cooperate with one another (i) in
the preparation and filing of any required filings under the HSR Act; (ii) in
determining whether action by or in respect of, or filing with, any governmental
body, agency, official or authority (either domestic or foreign) is required,
proper or advisable or any actions, consents, waivers or approvals are required
to be obtained from parties to any contracts, in connection with the
transactions contemplated by this Agreement and taking into account the
transactions contemplated by the Stock Purchase Agreement; and (iii) in seeking
to obtain on a timely basis any such actions, consents and waivers and to make
any such filings. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party hereto will take all such necessary action.
Section 6.5 Public Announcements. Parent and Subsidiary, one the one
hand, and the Company and Agrigenetics, on the other hand, will consult with
each other before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this Agreement and
the Stock Purchase Agreement, and will not issue any such press release or make
any such public statement prior to such consultation, except as may be required
by applicable law or by applicable rules of any securities exchange or inter-
dealer quotation system.
Section 6.6 Indemnification of Subsidiary, Directors, Officers, Employees
and Agents. The Company and Agrigenetics agree that all rights to
indemnification existing in favor of the present or former directors, officers,
employees and agents of Subsidiary as provided in Subsidiary's Certificate of
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Incorporation or By-Laws as in effect as of the date hereof with respect to
matters occurring prior to the Closing will survive the Closing and will
continue in full force and effect for a period of not less than five years.
Section 6.7 Notification of Certain Matters. The Company and Agrigenetics
will give prompt notice to Parent and Subsidiary, and Parent and Subsidiary will
give prompt notice to the Company and Agrigenetics, of (i) the occurrence, or
non-occurrence, of any event the occurrence, or non-occurrence, of which would
be likely to cause any representation or warranty contained in this Agreement to
be untrue or inaccurate and (ii) any failure of the Company, Agrigenetics,
Parent or Subsidiary, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, that the delivery of any notice pursuant to this Section
6.7 will not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
Section 6.8 No Solicitation.
6.8.1 The Company will immediately cease any existing discussions or
negotiations with any third parties conducted prior to the date hereof with
respect to any Acquisition Proposal (as defined below). The Company will not,
directly or indirectly, through any officer, director, employee, representative
or agent or any of its subsidiaries, (i) solicit, initiate, or encourage any
inquiries or proposals that constitute, or could reasonably be expected to lead
to, a proposal or offer for a merger, consolidation, business combination, sale
of substantial assets, sale of shares of capital stock (including, without
limitation, by way of a tender offer) or similar transactions involving the
acquisition, in any manner, directly or indirectly, of a material equity
interest in or a material amount of voting securities or assets of the Company,
Agrigenetics or any of their respective subsidiaries, other than the
transactions contemplated by this Agreement (any of the foregoing inquiries or
proposals being referred to in this Agreement as an "Acquisition Proposal"),
(ii) engage in negotiations or discussions concerning, or provide any non-public
information to any person or entity relating to, any Acquisition Proposal, or
(iii) agree to, approve or recommend any Acquisition Proposal; provided, that
nothing contained in this Section 6.8 will prevent the Company from (A)
furnishing information to, or entering into discussions or negotiations with,
any person in connection with an unsolicited bona fide written Acquisition
Proposal by such person or recommending an Acquisition Proposal to the
stockholders of the Company or entering into an agreement with respect to an
Acquisition Proposal or terminating this Agreement, if and only to the extent
that the Board determines in good faith after consultation with outside legal
counsel that
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such action is necessary for the Board to comply with its fiduciary duties to
stockholders under applicable law and prior to furnishing such information to,
or entering into discussions or negotiations with, such person, the Board
receives from such person an executed confidentiality agreement in form
customary for transactions of such nature, and the Company may do the foregoing
without any liability for breach of this Agreement; and (B) complying with Rules
14D-9 and 14e-2 promulgated under the Exchange Act with regard to an Acquisition
Proposal.
6.8.2 The Company will notify Parent immediately (and no later than
24 hours) after receipt by the Company of any Acquisition Proposal or any
request for non-public information in connection with an Acquisition Proposal or
for access to the properties, books or records of the Company, Agrigenetics or
any of their respective subsidiaries by any person or entity that informs the
Company that it is considering making, or has made, an Acquisition Proposal.
Such notice will be made orally and in writing and will indicate in reasonable
detail the identity of the offeror and the terms and conditions of such
proposal, inquiry or contract.
Section 6.9 Pre-Closing Restrictions on Stock Acquisitions. From the date
of this Agreement until the Closing, neither Parent nor any of its affiliates
will, directly or indirectly, acquire or propose to acquire any shares of Common
Stock other than pursuant to this Agreement or the Stock Purchase Agreement or
any amendments hereto or thereto, unless, on or after the date of this
Agreement, (a) any person or group of persons other than (1) any person
specified in Rule 13d-1(b)(1)(i) and (ii) under the Exchange Act or (2) any
person who does not own 10% or more of the outstanding shares of Common Stock as
of the date of this Agreement, acquires beneficial ownership of shares of Common
Stock representing 10% or more of the then total outstanding shares of Common
Stock, (b) any beneficial owner, other than any person specified in Rule 13d-
1(b)(1)(i) and (ii) under the Exchange Act, of the Company who beneficially
owned 10% or more of the outstanding shares of Common Stock as of the date of
this Agreement acquires beneficial ownership of additional shares of Common
Stock representing 2% or more of the outstanding shares of Common Stock, (c) any
person or group of persons other than Parent or any of its affiliates commences
or makes a public announcement of an intention to commence a tender offer to
acquire 10% or more of the then total outstanding shares of Common Stock, (d)
any person or group of persons other than Parent or any of its affiliates makes
an Acquisition Proposal relating to shares of Common Stock representing 40% or
more of the then outstanding shares of Common Stock, which Acquisition Proposal
is not conditioned on obtaining financing or financing commitments, or (e) the
Company enters into an agreement with any
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person pursuant to the proviso in Section 6.8.1 or this Agreement has been
terminated.
Section 6.10 Rights Agreement. Unless this Agreement and the Stock
Purchase Agreement have both been terminated according to their terms without
Parent or an affiliate, successor or assign of Parent having purchased any
shares of Common Stock under either this Agreement or the Stock Purchase
Agreement (collectively, "Double Termination"), the Company, from and after the
date of this Agreement (i) will take all necessary steps to ensure that the
Rights Agreement and the rights thereunder will not prevent Parent or an
affiliate of Parent from acquiring or proposing to acquire some or all of the
outstanding shares of Common Stock and (ii) will not amend, interpret or enforce
the Rights Agreement or adopt any new shareholder rights agreement or other
similar agreement, plan or measure, if such amendment, interpretation,
enforcement or adoption would have an adverse effect on Parent or on the ability
of Parent or an affiliate to acquire or propose to acquire some or all of the
outstanding shares of Common Stock. If a Double Termination occurs the action
described in Section 4.5 may be revoked.
Section 6.11 Post-Closing Covenants of the Company.
6.11.1 Subject to Section 6.12, so long as Parent has the right to
nominate at least two members to the Board, the Company will not, without the
prior written approval of Parent, issue any shares of Common Stock or Common
Stock Equivalents except: (i) shares of Common Stock authorized and reserved as
of the date hereof for issuance pursuant to any Company Plan, (ii) not more than
an aggregate of 2,000,000 new Common Stock Equivalents issued to directors,
officers or employees pursuant to any employee benefit plans approved by the
Company during the 3 year period after the Measurement Date and (iii) not more
than an aggregate of 2,000,000 shares of Common Stock in exchange for the assets
or securities of one or more other persons. In the event that the Company at
any time after the date of this Agreement declares or pays a dividend on any
Company Security payable in shares of Common Stock, subdivides or splits the
outstanding Common Stock, combines or consolidates the outstanding Common Stock
into a smaller number of shares, effects a reverse split of the outstanding
shares, or issues any shares of Common Stock in an exchange, reclassification,
consolidation or merger, the 2,000,000 share limitations in (ii) and (iii) above
will be proportionately adjusted accordingly. Whenever the Company proposes to
issue any shares of Common Stock pursuant to this Section 6.11.1, the Company
will offer Parent the right, exercisable within 60 days of such offer, to
purchase at Market Value such number of additional shares of Common Stock from
the Company as will prevent the Total Percentage Interest of Parent from being
reduced as a result of the proposed issuance of Common
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Stock. For purposes of this Section 6.11, "Total Percentage Interest of Parent"
means the percentage of shares of Common Stock beneficially owned by Parent and
its affiliates, determined on the basis of the total number of shares of Common
Stock actually outstanding.
6.11.2 Subject to Section 6.12, but notwithstanding the limitations
in Section 6.11.1, following the second anniversary of the Measurement Date, the
Company may issue New Securities for cash provided that the Company will have
first afforded Parent a right of first refusal to purchase all of the New
Securities proposed to be issued for cash in accordance with this Section 6.11.2
(other than any New Securities issued to (i) officers, directors or employees or
the Company and any of its subsidiaries pursuant to any Company Plan or newly
created employee benefit plan, and (ii) Parent or any of its affiliates). If
the Company proposes to issue any New Securities for cash at any time following
the second anniversary of the Measurement Date, the Company will deliver to
Parent a written notice stating the number and kind of New Securities proposed
to be issued, the identities of the persons to whom the New Securities are
proposed to be issued, the proposed cash issue price of the New Securities and
the other terms and conditions upon which the New Securities are proposed to be
issued (a "Right of First Refusal Notice"). For a period of 20 business days
following the date of Parent's receipt of a Right of First Refusal Notice,
Parent will have the right to purchase the New Securities described in the Right
of First Refusal Notice in whole or in part at a cash price equal to the Market
Value (the "Right of First Refusal") by so notifying the Company in writing. If
Parent has not notified the Company in writing of its intention to exercise such
Right of First Refusal by the close of business on the 20th business day
following Parent's receipt of the Right of First Refusal Notice, the Company may
issue such New Securities for cash in the manner stated in the Right of First
Refusal Notice, or, if Parent has notified the Company in writing of its
intention to exercise such Right of First Refusal only in part, the Company may
thereafter issue for cash the portion of the New Securities not being purchased
by Parent or its affiliates in the manner stated in the Right of First Refusal
Notice. If, subsequent to the date of any Right of First Refusal Notice, the
Company proposes to issue the New Securities described in the Right of First
Refusal Notice at a different price or on terms and conditions otherwise
materially different from those described in the Right of First Refusal Notice,
the Company will deliver to Parent a new Right of First Refusal Notice
describing such terms and conditions and repeat the foregoing procedures. The
Company and Parent understand and acknowledge that the foregoing Right of First
Refusal is not intended to enforce a common law preemptive right and is entered
into as a matter of contract at arms'-length. If the Right of First Refusal is
deemed to be invalid or unenforceable, in whole
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or in part, by the final judgment of a court of competent jurisdiction, the
Company will, for a period of 30 days following the date of such final judgment,
offer Parent the right to purchase at Market Value such number of additional
shares of Common Stock from the Company as will prevent the Total Percentage
Interest of Parent represented by the Common Stock then beneficially owned by
Parent from being reduced as a result of the proposed issuance of New
Securities.
6.11.3 So long as Parent has the right to nominate at least two
members to the Board, the Company will not, without the prior written approval
of Parent, merge, consolidate, exchange, sell, lease, transfer or otherwise
dispose of (i) the Company's plant science business (the "Seed Business") or
(ii) the Company's crop protection business (the "Crop Business").
6.11.4 So long as Parent has the right to nominate at least two
members to the Board, the Company will not, without the prior written approval
of Parent, purchase, invest, lease or otherwise acquire securities or assets
which are not related to and for use in the Seed Business or the Crop Business.
6.11.5 After the Closing, the Company and Agrigenetics will use their
reasonable best efforts to cause Subsidiary to perform and comply with all of
its material contractual obligations existing as of the Closing, including such
obligations assigned by Parent to Subsidiary, where the failure of Subsidiary to
so perform and comply would result in actual damages or losses to Parent.
6.11.6 After the Closing, upon Parent's request, the Company will
establish a voluntary process by which Parent will be permitted to purchase
shares of Common Stock from participating employees of the Company upon the
exercise of employee stock options by such participating employees; provided,
however, that Parent shall have no obligation to purchase any such shares of
Common Stock.
Section 6.12 Post-Closing Restrictions on Stock Acquisitions.
6.12.1 (a) For a period of 2 years from the Measurement Date, neither
Parent nor any of its affiliates will acquire or propose to acquire shares of
Common Stock from third parties which, when aggregated with all shares of Common
Stock beneficially owned by Parent and its affiliates other than any shares of
Common Stock which were acquired by Parent or any of its affiliates after the
Measurement Date directly from the Company or any of its subsidiaries or
employees, would constitute in excess of 60% of the then total outstanding
shares of Common Stock and (b) from the second anniversary of the Measurement
Date
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through the third anniversary of the Measurement Date, neither Parent nor any of
its affiliates will acquire or propose to acquire shares of Common Stock from
third parties which, when aggregated with all shares of Common Stock owned by
Parent and its affiliates other than any shares of Common Stock which were
acquired by Parent or any of its affiliates after the Measurement Date directly
from the Company or any of its subsidiaries or employees, would constitute in
excess of 65% of the then total outstanding shares of Common Stock; provided,
however, that the foregoing restrictions will not apply if a person or group
other than Parent or its affiliates has made an Acquisition Proposal in which it
proposes to acquire 25% or more of the Company's then outstanding shares of
Common Stock or Common Stock Equivalents.
6.12.2 Except as provided in Section 6.13, at any time after the
Measurement Date, neither Parent nor any of its affiliates may acquire or
propose to acquire shares of Common Stock from persons, including the Company,
which, when aggregated with all shares of Common Stock then beneficially owned
by Parent and its affiliates, would constitute more than 79.9% of the then total
outstanding shares of Common Stock (taking into account in the calculation of
total outstanding shares of Common Stock any shares of Common Stock that the
Company issued or proposes to issue to Parent or any of its affiliates after the
Measurement Date).
Section 6.13 Buyout Transaction. Following the third anniversary of the
Measurement Date, Parent may increase its beneficial ownership of Common Stock
above 79.9% of the total outstanding shares of Common Stock only pursuant to a
Buyout Transaction complying with the following procedures:
6.13.1 If Parent is able to obtain the approval of a majority of the
Company's Independent Directors for a proposed Buyout Transaction after they
have received an opinion, satisfactory to them, from an internationally
recognized investment bank selected by the Independent Directors on the
aggregate Third Party Sale Value with respect to such Buyout Transaction, Parent
may proceed with such Buyout Transaction (in which event nothing in this
Agreement will prevent or impede such Buyout Transaction from proceeding or
being consummated and the Company will take all action reasonably necessary to
allow such transaction to proceed in accordance with the provisions hereof).
6.13.2 If pursuant to Section 6.13.1 Parent is not able to obtain the
approval of a majority of the Independent Directors for a proposed Buyout
Transaction within 60 days after such Buyout Transaction is first proposed to
the directors of the Company, Parent may either (a) withdraw such proposal or
(b) request arbitration of the amount of the Third Party Sale Value. Parent and
the Company will appoint an independent appraiser
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(which will be an internationally recognized investment bank) mutually
satisfactory to them that will determine the aggregate Third Party Sale Value
with respect to the proposed Buyout Transaction. If Parent and the Company are
unable to agree on a mutually acceptable appraiser within such 15-day period,
the Third Party Sale Value will be determined by an independent appraiser (which
will be an internationally recognized investment bank) chosen by two other
independent appraisers (which will be internationally recognized investment
banks), one of whom will be appointed by Parent and the other of whom will be
appointed by the Company or, if such two appraisers are unable to agree on a
third appraiser within seven days after the appointment of the second of them,
by the American Arbitration Association (or its successor); provided, however,
that if Parent or the Company will not have appointed its appraiser within 30
days after a request by Parent for determination of the amount of the Third
Party Sale Value, such determination will be made solely by the appraiser
selected by the other party. Parent and the Company may each submit to the
appraiser their respective positions on the Third Party Sale Value and may also
submit written and oral presentations to support their respective positions.
The appraiser will determine the aggregate amount of the Third Party Sale Value.
The appraiser will be directed to make its determination within 30 calendar days
of appointment and such determination, when made, will be final and binding with
respect to the proposed Buyout Transaction.
6.13.3 Within 10 business days after the appropriate Third Party Sale
Value is determined pursuant to the procedures set forth above, Parent will
elect: (a) to proceed with a Buyout Transaction offering the Third Party Sale
Value Consideration payable in cash and/or marketable securities (in which event
nothing in this Agreement will prevent or impede such Buyout Transaction from
proceeding or being consummated and the Company will take all action reasonably
necessary to allow such transaction to proceed in accordance with the provisions
hereof, including obtaining the vote of the directors on the Board in favor of
such Buyout Transaction so as to obtain the requisite Board approval therefor);
or (b) to withdraw its proposal for a Buyout Transaction (in which event Parent
may not again propose a Buyout Transaction for a period of one year after such
withdrawal, unless it is invited to do so by the Company's Independent
Directors).
6.13.4 The fees and expenses of the appraiser will be divided equally
between Parent and the Company.
Section 6.14 Election of Directors.
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6.14.1 For a period of three years from and after the Measurement
Date, Parent and the Company will use their reasonable best efforts to cause the
following to occur: (i) at any time that Parent and its affiliates are the
beneficial owners of less than 20% of the then outstanding Common Stock, Parent
will have the right to designate for nomination one director to the Board; (ii)
at any time that Parent and its affiliates are the beneficial owners of less
than 30% but in any event not less than 20% of the then outstanding Common
Stock, Parent will have the right to designate for nomination two directors to
the Board; (iii) at any time that Parent and its affiliates are the beneficial
owners of less than 50% but in any event not less than 30% of the then
outstanding Common Stock, the Company will cause the Board to consist of seven
directors with three of such directors to be designees of Parent, or, if the
Board will for any reason consist of a number of directors other than seven,
with such number of directors equal to the nearest whole number less than one-
half times the total number of directors to be designees of Parent; and (iv) at
any time that Parent and its affiliates are the beneficial owners of more than
50% of the then outstanding Common Stock, the Company will cause the Board to
consist of nine directors with five of such directors to be designees of Parent,
or, if the Board will for any reason consist of a number of directors other than
nine, with such number of directors equal to the nearest whole number greater
than one-half times the total number of directors to be designees of Parent.
The parties will use their best efforts to obtain the resignations of all
existing directors currently serving at the designation of Investor prior to the
closing of the transactions contemplated by the Stock Purchase Agreement and to
provide for the appointment of Parent's designees, in order to effectuate the
immediately preceding sentence.
6.14.2 Parent's initial nominee to fill a particular seat on the
Board shall be entitled to any benefits or compensation then generally paid or
made available to new members of the Board. Any person subsequently nominated
by Parent to fill that particular seat on the Board after it has become vacant
for any reason (a "Replacement Director") shall not be entitled to any benefits
or compensation then generally paid or made available to new members of the
Board; provided, however, that such Replacement Director shall be entitled to
any benefits or compensation then generally paid or made available to incumbent
directors upon their reelection to the Board upon such Replacement Director's
reelection to the Board for terms following his or her initial term.
Section 6.15 Audited Financial Statements. Within 50 days after the
Closing, Parent will provide to the Company, a complete and correct copy of
audited financial statements of Subsidiary
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for the twelve-month periods ended September 30, 1994 and September 30, 1995.
Section 6.16 Benefit Plans.
6.16.1 Parent will assume or retain all liability for the payment of
any and all benefits accrued as of the Closing Date under any Subsidiary Plan
that is an unfunded deferred compensation plan, program, agreement or
arrangement or any "excess benefit plan" (as such term is defined in section
3(36) of ERISA).
6.16.2 Parent hereby agrees that, for a period of 3 years from the
Closing, it will vote the shares of Common Stock beneficially owned by it and
its affiliates and to cause its nominees on the Board to vote in favor of an
increase in the number of stock options and restricted stock awards issuable
under the Company Plans by up to a combined total of 2,000,000 new shares of
Common Stock (including any increase authorized by Section 6.1.5) for future
issuances under such Company Plans or newly created employee benefit plans,
subject to adjustment to reflect any stock split, recapitalization, stock
dividend or other similar event.
Section 6.17 Post-Closing Human Resources Matters.
6.17.1 Parent and Company will form a transition steering committee
(the "Steering Committee") that will have responsibility for overseeing the
integration of Subsidiary and its employees with the Company and its
subsidiaries and employees. The Steering Committee will consist of 4 members, 2
of whom will be appointed by the Company and 2 of whom will be appointed by
Parent. Any Steering Committee action will require the unanimous consent of all
of the members. The Steering Committee will be effective immediately after the
Closing and may be discontinued at any time upon the mutual agreement of the
Company and Parent, but in no event will it exist beyond 12 months after the
Closing.
6.17.2 The Company and its subsidiaries will not implement any job
elimination programs that may impact current Subsidiary employees who have
satisfactory job performance without the approval of the Steering Committee for
as long as such committee is in existence. Any separations involving Subsidiary
personnel will be based on severance compensation policies approved by the
Steering Committee, with the Subsidiary personnel receiving credit for their
years of service with Subsidiary. For as long as the Steering Committee is in
existence, the committee will review modifications to the compensation and
benefits policies and programs offered to Subsidiary personnel.
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Section 6.18 Strategic Review Committee. Parent and the Company will form
a Strategic Review Team to meet quarterly and on an "as-needed" basis to develop
and review (i) the strategic direction of the Company and its Subsidiaries and
their projects, and (ii) the tactics employed to pursue such strategic
objectives. The Strategic Review Team may from time-to-time designate subteams
or specific personnel to review technical, intellectual property, and financial
issues that impact or support the strategic direction of the Company and its
Subsidiaries and their projects.
Section 6.19 Technology Agreement. The Company, Agrigenetics and Parent
will execute and deliver the Technology Agreement at the Closing.
ARTICLE 7
CONDITIONS
Section 7.1 Conditions to Each Party's Obligations. The respective
obligations of each party hereto to effect the Transaction is subject to the
satisfaction or, if appropriate, waiver at or prior to the Closing of the
following conditions:
7.1.1 There will not be in effect any order, decree or ruling or
other action restraining, enjoining or otherwise prohibiting the Transaction, or
the purchase of the Investor Interests by Parent, which order, decree, ruling or
action will have been issued or taken by any court of competent jurisdiction or
other governmental body located or having jurisdiction within the United States
or any country or economic region in which the Company or any of its
subsidiaries or Parent or any of its affiliates, directly or indirectly, has
material assets or operations.
7.1.2 Any waiting period under the HSR Act applicable to the
transactions contemplated by this Agreement or the Stock Purchase Agreement will
have terminated or expired and there will have been no material modification to
the terms of the transactions contemplated by this Agreement or the Stock
Purchase Agreement.
Section 7.2 Conditions to the Obligation of Parent and Subsidiary. The
obligations of Parent and Subsidiary to effect the Transaction is subject to the
satisfaction or, if appropriate, waiver at or prior to the Closing of the
following further conditions:
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7.2.1 Provision will have been made to the reasonable satisfaction of
Parent that the Board will have the composition described in Section 6.14
immediately following the Closing.
7.2.2 The Stock Purchase Agreement will not have been terminated.
7.2.3 The Company and Agrigenetics will have performed in all
material respects their respective covenants, agreements and obligations under
this Agreement to the date of the Closing.
7.2.4 Except as otherwise contemplated by this Agreement, the
representations and warranties of the Company contained in this Agreement which
are qualified as to materiality will be true and correct and which are not so
qualified will be true and correct in all material respects, in each case, as of
the date when made and at and as of the Closing as though newly made at and as
of that time, except that representations and warranties made as of a particular
date need only be so true and correct as of such date.
7.2.5 The Company will have delivered to Parent a certificate dated
as of the Closing and signed by the President and Chief Financial Officer of the
Company certifying as to (i) the accuracy, as of the date when made and at and
as of the Closing as though newly made at and as of that time, of the
representations and warranties of the Company contained in this Agreement which
are qualified as to materiality (except that representations and warranties made
as of a particular date need only be so accurate as of such date), (ii) the
accuracy, as of the date when made and at and as of the Closing as though newly
made at and as of that time, in all material respects of the representations and
warranties of the Company contained in this Agreement which are not so qualified
(except that representations and warranties made as of a particular date need
only be so accurate as of such date), and (iii) the performance in all material
respects of the obligations required by the Company and Agrigenetics to be
performed under this Agreement as of the Closing.
7.2.6 The Company and Agrigenetics will have delivered, or will be
delivering concurrently with the Closing, the Purchase Shares, the Promissory
Note and the documents and instruments required to be delivered by the Company
and Agrigenetics pursuant to Section 3.3.
Section 7.3 Conditions to the Obligations of the Company and Agrigenetics.
The obligations of the Company and Agrigenetics to effect the Transaction is
subject to the satisfaction or, if appropriate, waiver at or prior to the
Closing of the following further conditions:
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7.3.1 Parent and Subsidiary will have performed in all material
respects their respective covenants, agreements and obligations under this
Agreement to the date of the Closing.
7.3.2 Except as otherwise contemplated by this Agreement, the
representations and warranties of Parent contained in this Agreement which are
qualified as to materiality will be true and correct and which are not so
qualified will be true and correct in all material respects, in each case, as of
the date when made and at and as of the Closing as though newly made at and as
of that time, except that representations and warranties made as of a particular
date need only be so true and correct as of such date.
7.3.3 Parent will have delivered to the Company a certificate dated
as of the Closing and signed by the Chief Financial Officer and General Counsel
of Parent certifying as to (i) the accuracy, as of the date when made and at and
as of the Closing as though newly made at and as of that time, of the
representations and warranties of Parent contained in this Agreement which are
qualified as to materiality (except that representations and warranties made as
of a particular date need only be so accurate as of such date), (ii) the
accuracy, as of the date when made and at and as of the Closing as though newly
made at and as of that time, in all material respects of the representations and
warranties of Parent contained in this Agreement which are not so qualified
(except that representations and warranties made as of a particular date need
only be so accurate as of such date), and (iii) the performance in all material
respects of the obligations required by Parent and Subsidiary to be performed
under this Agreement as of the Closing.
7.3.4 Parent will have delivered, or will be delivering concurrently
with the Closing, the Subsidiary Shares, the Cash Payment and the documents and
instruments required to be delivered by Parent pursuant to Section 3.2.
ARTICLE 8
TERMINATION; AMENDMENT; WAIVER
Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
8.1.1 By mutual written consent of the Company, Agrigenetics, Parent
and Subsidiary.
8.1.2 By Parent or the Company if the Closing has not occurred prior
to April 30, 1996 unless such failure is solely a
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result of the failure to satisfy the condition set forth in Section 7.1.2 on or
prior to April 30, 1996, in which event, by Parent or the Company if the Closing
has not occurred prior to July 31, 1996.
8.1.3 By Parent or the Company if any court of competent jurisdiction
or other governmental body located or having jurisdiction within the United
States or any country or economic region in which the Company or any of its
subsidiaries or Parent or any of the affiliates, directly or indirectly, has
material assets or operations, will have issued an order, decree or ruling or
taken any other action restraining, enjoining or otherwise prohibiting the
Transaction and such order, decree, ruling or other action will have become
final and nonappealable.
8.1.4 By Parent if any court of competent jurisdiction or other
governmental body located or having jurisdiction within the United States or any
country or economic region in which the Company or any of its subsidiaries,
Parent or any of the affiliates or Investor or any of its affiliates, directly
or indirectly, has material assets or operations, will have issued an order,
decree or ruling or taken any other action restraining, enjoining or otherwise
prohibiting the sale and purchase of the Investor Interests and such order,
decree, ruling or other action will have become final and nonappealable.
8.1.5 By Parent if (i) there will have been a material breach of any
representation or warranty of the Company contained herein or of Investor
contained in the Stock Purchase Agreement, or (ii) there will have been a
material breach of any covenant, agreement or obligation of the Company or
Agrigenetics contained herein or of Investor contained in the Stock Purchase
Agreement, in either the case of (i) or (ii) which will not have been cured
prior to 10 business days following notice of such breach.
8.1.6 By the Company if (i) there will have been a material breach of
any representation or warranty of Parent contained herein, (ii) there will have
been a material breach of any covenant, agreement or obligation of Parent, in
either the case of (i) or (ii) which will not have been cured prior to 10
business days following notice of such breach.
8.1.7 By Parent if the Stock Purchase Agreement will have terminated
without the consummation of the transactions contemplated thereby.
8.1.8 By Parent if the Board will have withdrawn or modified in a
manner adverse to Parent the Board's approval of this Agreement, the Transaction
or the approval of the transactions contemplated by the Stock Purchase Agreement
for the purpose of rendering the Rights Agreement inapplicable to the
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transactions contemplated by the Stock Purchase Agreement, or the Company will
have indicated to Parent that the Company does not intend to consummate the
transactions contemplated by this Agreement or will have entered into an
agreement with respect to an Acquisition Proposal, or the Board will have
resolved to do any of the foregoing.
8.1.9 By the Company if and only to the extent that the Board has
determined in good faith after consultation with outside legal counsel that such
action is necessary for the Board to comply with its fiduciary duties to
stockholders under applicable law.
Section 8.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.1, the respective obligations of the
parties under this Agreement will terminate, except that, (i) if the Stock
Purchase Agreement has not been terminated according to its terms, the
provisions of Section 6.10, Section 6.11, Section 6.12 and Section 6.13 will
survive the termination of this Agreement, (ii) if Parent has purchased the
Investor Interests pursuant to the Stock Purchase Agreement, Section 6.14 will
survive the termination of this Agreement, (iii) this Section 8.2 will survive
the termination of this Agreement, and (iv) Section 8.3 will survive the
termination of this Agreement. Nothing contained in this Section 8.2 will
relieve any party from liability for any breach of this Agreement.
Section 8.3 Fees and Expenses. Each party will bear its own expenses and
costs in connection with this Agreement and the transactions contemplated
hereby.
Section 8.4 Amendment. This Agreement may not be amended except by an
instrument in writing signed by Parent and the Company. After the Closing, any
amendment to this Agreement must be approved by a majority of the Company's
Independent Directors in addition to a majority of the whole Board.
Section 8.5 Extension; Waiver. The Company and Agrigenetics, on the one
hand, and Parent and Subsidiary, on the other hand, 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 hereto
to any such extension or waiver will be valid only if set forth in an instrument
in writing signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder will not constitute a waiver of such rights.
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ARTICLE 9
MISCELLANEOUS
Section 9.1 Survival of Representations and Warranties. Each of the
representations and warranties made herein will survive for a period of 24
months from the date of the Closing, provided, that the representations and
warranties contained in Section 4.11 and Section 5.9 shall survive the Closing
and continue until the termination of any applicable statute of limitation. The
covenants and agreements herein will survive indefinitely.
Section 9.2 Indemnification.
9.2.1 The Company will indemnify and hold Parent and its affiliates
and any of their respective directors, officers, partners and affiliates of
partners, employees and agents (each, a "Parent Indemnified Party") harmless
from and against any and all losses, damages, claims, liabilities or obligations
(including interest, penalties, amounts paid in settlement and reasonable fees
and disbursements of attorneys) (collectively, the "Losses") (which, for the
purposes of this Section 9.2, will also include the reasonable fees and
disbursements of attorneys incurred by a Parent Indemnified Party in bringing a
claim under this Agreement, prosecuting its rights of indemnity in respect of
such claim and collecting any amounts awarded upon such claim) suffered,
sustained or incurred or required to be paid by any such Parent Indemnified
Party due to, based upon, arising out of or otherwise with respect to (i) any
breach of any representation, warranty, covenant, agreement or obligation of the
Company or Agrigenetics contained in this Agreement, (ii) any brokerage fees,
commissions or finders' fees payable on the basis of any action taken by the
Company or any of its affiliates and (iii) any Taxes or any liability with
respect to Taxes attributable to any merger of Subsidiary, any transfer of
assets of Subsidiary or any election with respect to Subsidiary pursuant to
Section 338(g) of the Code to the extent any of the foregoing occur after the
completion of the Transaction.
9.2.2 Parent will indemnify and hold the Company and its affiliates
and any of their respective directors, officers, employees and agents (each, a
"Company Indemnified Party") harmless from and against any and all Losses,
(which, for the purposes of this Section 9.2, will also include the reasonable
fees and disbursements of attorneys incurred by a Company Indemnified Party in
bringing a claim under this Agreement, prosecuting its rights of indemnity in
respect of such claim and collecting any amounts awarded upon such claim)
suffered, sustained or incurred or required to be paid by any such Company
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Indemnified Party due to, based upon, arising out of or otherwise with respect
to (i) any breach of any representation, warranty, covenant, agreement or
obligation of Parent or Subsidiary contained in this Agreement and (ii) any
brokerage fees, commissions or finders' fees payable on the basis of any action
taken by Parent or any of its affiliates.
9.2.3 If either a Parent Indemnified Party, on the one hand, or a
Company Indemnified Party, on the other hand, as the case may be (the
"Indemnitee"), receives written notice of any third party claim or potential
claim or the commencement of any action or proceeding which could give rise to
an obligation on the part of the Company, on the one hand, or Parent, on the
other hand, as the case may be, to provide indemnification (the "Indemnifying
Party") pursuant to Section 9.2.1 or 9.2.2, the Indemnitee will promptly give
the Indemnifying Party notice thereof (the "Indemnification Notice"); provided,
that the failure to give the Indemnification Notice promptly will not impair the
Indemnitee's right to indemnification in respect of such claim, action or
proceeding unless, and only to the extent that, the lack of prompt notice
adversely affects the ability of the Indemnifying Party to defend against or
diminish the Losses arising out of such claim, action or proceeding. Delivery
of the Indemnification Notice will be a condition precedent to any liability of
the Indemnifying Party under the provisions for indemnification contained in
this Agreement. The Indemnification Notice will contain factual information (to
the extent known to the Indemnitee) describing the asserted claim in reasonable
detail and will include copies of any notice or other document received from any
third party in respect of any such asserted claim. The Indemnifying Party will
have the right to assume the defense of a third party claim or suit described in
this Section 9.2.3 at its own cost and expense and with counsel of its own
choosing; provided, however, that, the Indemnitee is kept fully informed of all
developments and is furnished copies of all papers; the Indemnitee is given the
opportunity, at its option, to participate at its own cost and expense and with
counsel of its own choosing (which will be reasonably satisfactory to the
Indemnifying Party) in the defense of such claim or suit; and the Indemnifying
party diligently prosecutes the defense of such claim or suit. In the event
that all of the conditions of the foregoing provision are not satisfied, the
Indemnitee will have the right, without impairing any of its rights to
indemnification as provided herein, to assume and control the defense of such
claim or suit and to settle such claim or suit. No settlement of any such third
party claim or suit will be made by the Indemnifying Party without the prior
written consent of the Indemnitee (which will not be unreasonably withheld). No
settlement of any such third party claim or suit will be made by the Indemnitee
if the Indemnifying Party will have assumed the defense thereof and will be in
compliance with its obligations
54
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with respect thereto as set forth above in this Section 9.2.3. If the
Indemnifying Party chooses to defend any claim, the Indemnitee will make
available to the Indemnifying Party any books, records or other documents within
its control that are necessary or appropriate for such defense. Notwithstanding
the foregoing, the Indemnitee will have the right to employ separate counsel at
the Indemnifying Party's expense and to control its own defense of such asserted
liability if in the reasonable opinion of counsel to such Indemnitee (i) there
are or may be legal defenses available to such Indemnitee or to other
Indemnitees that are different from or additional to those available to the
Indemnifying Party, or (ii) a conflict or potential conflict exists between the
Indemnifying Party and such Indemnitee that would make such separate
representation advisable.
9.2.4 The indemnification contained in Section 9.2 shall not apply to
the extent that a loss has been reimbursed pursuant to the Adjustment.
Section 9.3 Entire Agreement; Assignment. This Agreement, the
Confidentiality Agreement and the Technology Agreement (i) 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,
among the parties with respect to the subject matter hereof and (ii) will not be
assigned by operation of law or otherwise; provided that Parent may assign its
rights and obligations in whole or in part (other than the rights of Parent to
nominate directors to the Board pursuant to Section 6.14) to any affiliate of
Parent, but no such assignment will relieve Parent of its obligations hereunder
if such assignee does not perform such obligations. This Agreement shall inure
to the benefit of and be binding upon Parent's successors and permitted assigns.
Section 9.4 Notices. All notices, requests, claims, demands and other
communications hereunder will be in writing and will be given (and will be
deemed to have been duly given upon receipt) by delivery in person, by facsimile
or by registered or certified mail (postage prepaid, return receipt requested),
to the other party as follows:
if to the Company or Agrigenetics:
Mycogen Corporation
5501 Oberlin Drive
San Diego, California 92121-1718
Fax: (619) 453-0142
Attention: President and Chief Operating Officer
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with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Fax: 212-373-2085
Attention: Judith R. Thoyer
if to Parent or Subsidiary, to:
DowElanco
9330 Zionsville Road
Indianapolis, IN 46268
Fax: (317) 337-6954
Attention: General Counsel
with a copy to:
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603-3441
Fax: 312-701-7711
Attention: Scott J. Davis
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
Section 9.5 Governing Law. This Agreement will be governed by and
construed in accordance with the law of the State of Delaware, without regard to
the principles of conflicts of law thereof, except for the General Corporation
Law of the State of California, as applicable to the Company, and the laws
applicable with respect to fiduciary duties of the Board, which will be governed
by and construed in accordance with the law of the State of California, without
regard to the principles of conflicts of law thereof.
Section 9.6 Parties in Interest. This Agreement will be binding upon and
inure solely to the benefit of each party hereto and its successors and
permitted assigns, and nothing in this Agreement, express or implied, is
intended to or will confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.
Section 9.7 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties will be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
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Section 9.8 Severability. The provisions of this Agreement will be deemed
severable and the invalidity or unenforceability of any provision will not
affect the validity and enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or entity
or any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision will be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid and unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons, entities or circumstances will not be affected by
such invalidity or unenforceability, nor will such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
Section 9.9 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 9.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed to be an original, but all of which
will constitute one and the same agreement.
57
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[INTENTIONALLY LEFT BLANK]
58
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its representatives thereunto duly authorized, all as
of the day and year first above written.
MYCOGEN CORPORATION
By: /s/ Carlton J. Eibl
---------------------------------------
Name: Carlton J. Eibl
Title: Executive Vice President Finance
and Legal
AGRIGENETICS, INC.
By: /s/ Carlton J. Eibl
---------------------------------------
Name: Carlton J. Eibl
Title: Vice President, Assistant
Secretary and Treasurer
DOWELANCO
By: /s/ William C. Schmidt
---------------------------------------
Name: William C. Schmidt
Title: Chief Financial Officer
UNITED AGRISEEDS, INC.
By: /s/ Thomas R. Wiltrout
---------------------------------------
Name: Thomas R. Wiltrout
Title: President
59
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EXHIBIT A
PROMISSORY NOTE
$100,000 Dated ____________, 1996
Chicago, Illinois
FOR VALUE RECEIVED, the undersigned, Agrigenetics, Inc., a Delaware
corporation ("Agrigenetics"), hereby promises to pay to the order of DowElanco
("Parent"), an Indiana general partnership, by bank wire transfer of immediately
available funds to an account designated in writing by Parent, or at such other
place as the holder hereof may from time to time designate in writing the
principal sum of ONE HUNDRED THOUSAND DOLLARS ($100,000), due and payable in
full on December 31, 1998.
The undersigned further promises to pay interest on the principal
amount from the date hereof until maturity (whether by acceleration or
otherwise), at the rate per annum equal to [THE APPLICABLE FEDERAL RATE].
Interest shall be payable hereon in arrears on the last business day of each
March, June, September and December commencing with March 29, 1996 and with the
final payment of interest due and payable on December 31, 1998.
Interest shall be charged on the unpaid principal balance of this Note
on a daily basis for the actual number of days elapsed, computed on the basis of
a 360-day year.
This Note has been made and delivered at Chicago, Illinois. This Note
is made under and governed by the internal laws of the State of Illinois,
without regard to principles of conflicts of law.
This Note shall be binding upon Agrigenetics and its respective
successors and assigns; provided, however, that Agrigenetics may not assign its
rights hereunder or in connection herewith; and this Note shall inure to the
benefit of Parent, or the holder hereof, and its successors and assigns.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Note as of the date and year first above written, at Chicago, Illinois pursuant
to proper authority duly granted.
AGRIGENETICS, INC.
By: _______________________________
Name: _____________________________
v
<PAGE>
Title: ____________________________
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EXHIBIT B
TECHNOLOGY AGREEMENT
This Technology Agreement, effective as of ________________, is among Mycogen
Corporation ("Mycogen"), a California corporation, Agrigenetics, Inc., a
Delaware corporation doing business as Mycogen Seeds ("MS"), and DowElanco, an
Indiana general partnership ("DowElanco").
Whereas, Mycogen, the parent company of MS, has acquired or developed technology
through Mycogen or Mycogen Affiliates to assorted biological tools which provide
the means by which particular genetic modifications may be made to plants;
Whereas, Mycogen and/or Mycogen Affiliates will continue to develop and acquire
tools which are useful in modifying plants such that the plants have desirable
commercial characteristics;
Whereas, DowElanco has been the parent of United AgriSeeds, Inc. ("UAS"), a
Delaware corporation involved in the seed business;
Whereas, as part of a series of transactions involving Mycogen and DowElanco,
UAS is being acquired by a Mycogen Affiliate and certain germplasm of UAS will
become available to Mycogen or a Mycogen Affiliate;
Whereas, apart from UAS, DowElanco has had, and is expected to continue to have,
a research program directed to the identification and development of genes and
tools which may have value when used to modify plants in a manner to enhance or
impart pesticidal properties to the plants;
Whereas, Mycogen desires to have access to new genes which DowElanco decides to
license and to new tools which are developed or acquired during the five year
period following the closing of the transactions between DowElanco and Mycogen;
Whereas, DowElanco desires to have access to the tools which Mycogen and Mycogen
Affiliates currently have and to new tools which are developed or acquired
during the five year period following the aforementioned closing which are
useful in modifying plants such that the plants have certain desirable
commercial characteristics, as well as to new genes which Mycogen decides to
license;
Now therefore, in consideration of the above, Mycogen, MS and DowElanco
(collectively referred to herein as the "Parties") agree as follows:
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Article 1 - Definitions
- -----------------------
The following terms when the initial letter of each word is capitalized as set
forth in this Article 1, will have the following meanings whenever used in this
Agreement:
1.01 "Agricultural Input" means the introduction of genes to plants to impart
Pesticidal Properties such that the plant, when grown from seed, exhibits
favorable Pesticidal Properties beyond those that were exhibited prior to
the introduction of the genes.
1.02 "Agricultural Output" means the introduction of genes to plants and/or
the genetic manipulation of plants using tools to impart desirable
commercial characteristics, that otherwise would not have been there, to
the plant and/or to any part thereof, such that the plant, or plant part,
when grown and/or harvested has such desirable commercial characteristics
without further processing, or desirable products can be obtained from
the plant or plant part by processing, purification or otherwise,
including any products which are made by modifying any material obtained
from such plant or plant part; provided that, in any event, Agricultural
Output does not include commercial characteristics which are new
Pesticidal Properties imparted by the introduction of one or more genes.
1.03 "Closing" means the definition of Closing as set forth in the Exchange
and Purchase Agreement dated January 15, 1996 to which Mycogen and
DowElanco are parties.
1.04 "Confidential Information" means all proprietary information (including,
without limitation, information related to technical, business and
intellectual property matters), know-how, data, trade secrets, biological
materials and other tangible materials or samples owned or held by a
Party to this Agreement which is maintained as confidential.
1.05 "Development Period" means the period commencing on the date of Closing
and ending five (5) years thereafter.
1.06 "DowElanco Affiliate" means any entity other than DowElanco which
directly or indirectly, through one or more intermediaries, is (a) owned
or controlled by DowElanco or DowElanco B.V., or (b) owns or controls
DowElanco or DowElanco B.V., or (c) is under common ownership or control
with DowElanco or DowElanco B.V., where ownership or control is direct or
indirect ownership of at least fifty percent (50%) of the voting shares
entitled to vote for the directors of the entity in question, or having
management control of the entity in question.
1.07 "DowElanco Companies" means DowElanco and DowElanco Affiliates
collectively.
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1.08 "DowElanco Tools" means all plasmids, constructions, markers, enhancers,
introns, promoters, genetic sequences to assist in transcription,
translation or transformation, and similar tools, excluding genes and
germplasm, useful to Mycogen in practicing the license granted to Mycogen
under this Agreement; provided that, in any event, DowElanco Tools do not
include any tools (a) which are developed or acquired outside of the
Development Period, or (b) which cannot be provided to Mycogen because of
obligations to another party.
1.09 "Effective Date" means the date entered on the first line of this
Agreement.
1.10 "Identity Preserved Oil" means oil produced from plant crops that are
grown from genetically transformed planting seeds, when said seeds are
planted, and when the resulting plants are grown and processed, the oil
produced consistently has one or more characteristics different from or
greater in degree than the characteristics of other similar oils produced
from other oil seeds without such specific genetic transformation, where
"genetically transformed" means using tools to modify the genetic
character of the plant.
1.11 "Mycogen Affiliate" means any entity which directly or indirectly,
through one or more intermediaries, is owned or controlled by Mycogen,
where ownership or control is direct or indirect ownership of at least
fifty percent (50%) of the voting shares entitled to vote for the
directors of the entity in question, or having management control of the
entity in question; this definition includes MS.
1.12 "Mycogen Companies" means Mycogen and Mycogen Affiliates collectively.
1.13 "Mycogen Tools" means all plasmids, constructions, markers, enhancers,
introns, promoters, genetic sequences to assist in transcription,
translation or transformation, and similar tools, excluding genes and
germplasm, useful to DowElanco Companies in practicing the license
granted to DowElanco Companies under this Agreement; provided that, in
any event, Mycogen Tools do not include any tools (a) which are developed
or acquired after the Development Period, or (b) which cannot be provided
to DowElanco Companies because of obligations to another party.
1.14 "Party" means a party to this Agreement.
1.15 "Pesticidal Properties" means that a plant or plant part, when grown from
seed or vegetatively propagated, exhibits resistance to insects,
nematodes, disease or herbicides.
1.16 "Third Party" means any entity which is not a Party, a Mycogen Affiliate
or a DowElanco Affiliate.
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Article 2 - Grant of Rights to Mycogen
- --------------------------------------
2.01 DowElanco hereby grants to Mycogen, an irrevocable, non-exclusive, non-
sublicensable (except to Mycogen Affiliates without the right to
sublicense further), non-transferable, royalty-free, world-wide license
to DowElanco Tools that DowElanco Companies (except for The Dow Chemical
Company), during the Development Period, discover or acquire (where
transferable) for Mycogen Companies to develop and commercialize
Agricultural Inputs that are delivered via the plant.
2.02 (a) Except to the extent restricted under current and future agreements
with Third Parties, DowElanco hereby grants to Mycogen the right to
obtain a non-exclusive, non-sublicensable (except to Mycogen Affiliates
without the right to sublicense further), non-transferable, royalty-
bearing, world-wide license to any genes that DowElanco Companies (except
for The Dow Chemical Company) discover during the Development Period in
research initiatives commencing on or after the date of Closing or
acquire (where transferable) during the Development Period for Mycogen
Companies to develop and commercialize Agricultural Inputs that are
delivered via the plant; provided that, this right will only apply to
those situations in which DowElanco elects to license the gene and
decides to license the gene non-exclusively, and only to the extent that
DowElanco so elects. If DowElanco grants a non-exclusive license to a
Third Party on terms more favorable than Mycogen's terms for licensing
the same gene when all factors are taken into consideration (including
the scope of the license and any reciprocal licensing of other
technologies to DowElanco), Mycogen, at its option, will have the right
to have its license modified so that the terms for Mycogen's license are
the same as the Third Party's terms.
(b) If DowElanco decides to license a gene that DowElanco Companies
(except for The Dow Chemical Company) discover during the Development
Period in research initiatives commencing on or after the date of Closing
or acquire (where transferable) during the Development Period and is
interested in licensing the gene to Mycogen on an exclusive or co-
exclusive basis, for all uses or for any particular field of use,
DowElanco will contact Mycogen and provide the terms and conditions on
which DowElanco is willing to license the gene. If Mycogen is interested
in taking a license, DowElanco and Mycogen will enter into good faith
negotiations to attempt to finalize the exclusive or co-exclusive
license. This provision does not restrict DowElanco, in any way, from
contacting and/or negotiating an exclusive or co-exclusive license with
any Third Party.
2.03 As used in this Article 2, (a) the term "except to Mycogen Affiliates
without the right to sublicense further" means that Mycogen Affiliates
can be sublicensed but
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that sublicensed Mycogen Affiliates do not have the right to grant
further sublicenses, and (b) the term "where transferable" means those
instances where DowElanco or a DowElanco Affiliate has the right to
license or sublicense others, except with respect to anything obtained
from The Dow Chemical Company.
2.04 If DowElanco Tools are acquired from a Third Party during the Development
Period, DowElanco will use reasonable efforts to ensure that DowElanco
has the right to sublicense such acquired DowElanco Tools to Mycogen.
Article 3 - Grant of Rights to DowElanco
- ----------------------------------------
3.01 (a) Mycogen and MS hereby grant to DowElanco Companies, an irrevocable,
non-exclusive, sublicensable (to the extent set forth below), non-
transferable, royalty-free, world-wide license to Mycogen Tools that
Mycogen Companies own or possess prior to Closing, or discover or acquire
(where transferable) during the Development Period, for DowElanco
Companies to conduct all activities on DowElanco Companies' projects or
DowElanco sponsored projects which DowElanco believes appropriate to
participate in, or develop or commercialize products in, the field of
Agricultural Outputs and Agricultural Inputs.
(b) The license granted in this section 3.01 is sublicensable by
DowElanco and/or DowElanco Affiliates to the extent necessary for
DowElanco Companies to work with any Third Parties in the field of
Agricultural Outputs, and for Agricultural Inputs to the following
extent. DowElanco shall only have the right to sublicense Third Parties
for Agricultural Input applications when the application involves genes
discovered or acquired by DowElanco Companies. In all cases, DowElanco
will only sublicense the Mycogen Tools under confidentiality and limited
use restrictions prohibiting the Third Party from disclosing the Mycogen
Tools to others, or using the Mycogen Tools other than in connection with
the specific gene discovered or acquired by DowElanco Companies. In any
event, DowElanco will notify Mycogen whenever DowElanco is considering
sublicensing a Third Party for an Agricultural Input application and will
confer with Mycogen prior to pursuing such opportunity.
3.02 (a) Except to the extent restricted under current and future agreements
with Third Parties, Mycogen and MS hereby grant to DowElanco Companies
the right to obtain a non-exclusive, sublicensable (to the extent set
forth below), non-transferable, royalty-bearing, world-wide license to
any genes that Mycogen Companies own or possess prior to Closing, or
discover or acquire (where transferable) during the Development Period,
for DowElanco Companies to participate in, or develop or commercialize
products in, the field of Agricultural Outputs; provided that, this right
will only apply to those situations in which
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Mycogen or MS elects to license the gene and decides to license the gene
non-exclusively, and only to the extent that Mycogen or MS so elects. If
Mycogen or MS grants a non-exclusive license to a Third Party on terms
more favorable than DowElanco's terms for licensing the same gene when
all factors are taken into consideration (including the scope of the
license and any reciprocal licensing of other technologies to Mycogen or
MS), DowElanco, at its option, will have the right to have its license
modified so that the terms for DowElanco's license are the same as the
Third Party's terms. If such licenses are granted to DowElanco, such
licenses will be sublicensable by DowElanco Companies to the extent
necessary for DowElanco Companies to work with any Third Parties in the
field of Agricultural Outputs; provided that, in all cases, DowElanco
will only sublicense the Mycogen genes under confidentiality and limited
use restrictions prohibiting the Third Party from disclosing the Mycogen
genes to others, or using the Mycogen genes other than in connection with
the specific DowElanco sponsored Agricultural Output project with such
Third Party. In any event, DowElanco will notify Mycogen whenever
DowElanco is considering sublicensing a Third Party for an Agricultural
Output application involving a Mycogen gene and will confer with Mycogen
prior to pursuing such opportunity.
(b) If Mycogen or MS decides to license a gene and is interested in
licensing the gene to DowElanco on an exclusive or co-exclusive basis,
for all uses or for any particular field of use, Mycogen or MS will
contact DowElanco and provide the terms and conditions on which Mycogen
or MS is willing to license the gene. If DowElanco is interested in
taking a license, DowElanco and Mycogen (or MS) will enter into good
faith negotiations to attempt to finalize the exclusive or co-exclusive
license. This provision does not restrict Mycogen or MS, in any way,
from contacting and/or negotiating an exclusive or co-exclusive license
with any Third Party.
3.03 As used in this Article 3, the term "where transferable" means those
instances where Mycogen or a Mycogen Affiliate has the right to license
or sublicense others.
3.04 If Mycogen Tools are acquired from a Third Party during the Development
Period, Mycogen and MS will use reasonable efforts to ensure that Mycogen
or a Mycogen Affiliate has the right to sublicense such acquired Mycogen
Tools to DowElanco Companies.
3.05 Mycogen will have a right to produce the seed necessary to deliver the
technology licensed pursuant to sections 3.01 and 3.02 above, so long as
Mycogen is able to meet competitive goals for production quality,
quantity and price. If Mycogen does not produce such seed and Mycogen's
germplasm is used in the seed commercialized, Mycogen will be entitled to
a three percent (3%) royalty on the
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net sales of the seeds containing such germplasm to the extent produced
by a Third Party for the intended application. The terms and conditions
under which Mycogen would produce the aforementioned seed will be the
subject of separate agreements between Mycogen (or a Mycogen Affiliate)
and DowElanco.
3.06 For a period of thirty-six (36) months after Closing, neither Mycogen nor
MS will grant to any Third Party any commercial license or other right or
permission to use Mycogen Tools for Agricultural Output applications
involving Identity Preserved Oil opportunities, except for phaseolin,
without DowElanco's prior consent. For the aforementioned thirty-six
(36) month period and thereafter, Mycogen will notify DowElanco of any
Agricultural Output opportunities, including phaseolin, and confer with
DowElanco about such opportunities. If new technologies or tools are
identified which make it reasonable to consider modifying or imposing a
requirement to obtain DowElanco's prior consent, Mycogen and DowElanco
will enter into good faith negotiations regarding such prior consent
requirements. In any event, DowElanco will indicate whether DowElanco
consents to any Agricultural Output opportunities requiring DowElanco's
prior consent within ten (10) working days of DowElanco being contacted
about the opportunity. DowElanco will not unreasonably withhold its
consent for Mycogen or MS to pursue Agricultural Output opportunities
with Third Parties.
3.07 DowElanco will consider contract research opportunities with Mycogen or a
Mycogen Affiliate. Contract research opportunities may include, but are
not limited to, breeding programs in corn, canola, soybeans and rice.
The terms and conditions of such research and development arrangements
will be the subject of separate agreements between Mycogen (or a Mycogen
Affiliate) and DowElanco.
Article 4 - Technical Consultation
- ----------------------------------
4.01 It is expected that Mycogen Companies may desire or require technical
consultation in order to implement DowElanco Tools, and that DowElanco
Companies may desire or require technical consultation in order to
implement Mycogen Tools. Each Party will provide reasonable assistance
to the other Parties, via telephone or other means of communication, to
address technical questions regarding the implementation of the
respective Tools.
4.02 The Parties will establish a Technology Assessment Committee, to meet
semi-annually, or as otherwise agreed by the Parties, to facilitate
technical interactions.
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Article 5 - Reports
- -------------------
5.01 Mycogen, within sixty (60) days after Closing, will provide a written
description of the Mycogen Tools subject to this Agreement at that time.
5.02 DowElanco and Mycogen will provide to each other, in writing, at least
fifteen (15) days prior to the meeting of the Technical Assessment
Committee, a semi-annual highlight report providing an overview of the
Tools developed in the interval since the last report. If Mycogen or
DowElanco identifies an item on the highlight report that appears of
interest to the recipient, the recipient may request additional
information about the item of interest. A more detailed description of
the item of interest will be provided to the requester within thirty (30)
days from the date of the request.
Article 6 - Export of Technology
- --------------------------------
6.01 The Parties agree that they will not disclose, export or re-export any
technology, or products made using technology provided herein, in
violation of the United States Department of Commerce Export
Administration Regulations or in violation of any other law or regulation
prohibiting the disclosure, export or re-export of the same.
Article 7 - Intellectual Property
- ---------------------------------
7.01 Unless otherwise specified in an agreement between DowElanco and Mycogen
(or MS), inventions, discoveries and improvements which are made and
information, data, technology, know-how and other items generated will be
owned by the party or parties making or generating the same.
7.02 No license or right is granted by implication or otherwise with respect
to any patent application, patent or other intellectual property, except
as specifically set forth in this Agreement.
Article 8 - Confidentiality
- ---------------------------
8.01 The Parties will exchange Confidential Information to the extent that the
disclosing Party, at its sole discretion, determines that it is needed by
the receiving Party. For a period of ten (10) years after its receipt
hereunder, each receiving Party will keep secret and confidential and
will not disclose to any Third Party any Confidential Information
received from another Party hereunder, and will use such
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Confidential Information only for the purposes permitted under this
Agreement; provided, however, that the receiving Party may voluntarily
disclose the portion of the disclosing Party's Confidential Information
relevant in any given situation to any governmental agency concerned with
public health or safety if the agency agrees to treat the disclosed
portion of the Confidential Information as proprietary and confidential
and the Party originally providing the information is informed in advance
of the proposed disclosure. If the receiving Party is compelled by law
to disclose any portion of the disclosing Party's Confidential
Information without a guarantee of confidentiality, the receiving Party
will notify the disclosing Party and consent to the disclosing Party's
intervention to attempt to preserve the confidentiality of the disclosing
Party's Confidential Information. Confidential Information disclosed by,
or received by, an Affiliate of a Party shall be treated as if the
disclosure was made by, or received by, a Party to this Agreement.
8.02 The obligations of confidence, non-disclosure and limited use set forth
in section 8.01 above shall not apply to any Confidential Information
which (a) was in the recipient's possession prior to receipt from another
Party or an Affiliate thereof; or (b) which is, or through no fault of
the recipient or its employees becomes, available to the general public;
or (c) which is received by the recipient, without binder of secrecy
therefor, from a Third Party having a legal right to disclose the same;
or (d) which is released from confidential status in writing by the Party
originally providing it.
8.03 Mycogen and DowElanco will ensure that each of their respective
Affiliates (if they are involved with the activities contemplated
hereunder) comply with the confidentiality obligations of this Agreement,
and that such Affiliates comply with any other obligations applying to
them hereunder.
Article 9 - Force Majeure
- -------------------------
9.01 The Parties will not be responsible to the other Parties hereto for any
failure or delay in performing any of their obligations under this
Agreement, or for non-performance hereunder, if such delay or non-
performance is beyond the reasonable control of the Party affected;
provided that, the Party affected has used reasonable efforts to avoid
such occurrence. Any failure or delay in performance will only be
excused for such time that the failure to perform is beyond the
reasonable control of the affected Party.
Article 10 - Notices
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10.01 Any notices or other communications required to be given under this
Agreement will be deemed to have been sufficiently given if mailed by
certified or registered mail addressed to the persons and addresses given
below, or to such other address as may be designated by written notice to
the other Parties.
(a) to DowElanco:
DowElanco
9330 Zionsville Road
Indianapolis, IN 46268-1053
Attention: Vice President, Research and Development
(b) to Mycogen:
Mycogen Corporation
5501 Oberlin Drive
San Diego, CA 92121-1718
Attention: Chief Technical Officer
(c) to Mycogen Seeds:
Mycogen Seeds
5501 Oberlin Drive
San Diego, CA 92121
Attention: President
Article 11 - Assignment
- -----------------------
11.01 This Agreement, and any of the rights or obligations hereof, will not be
assigned to any other party without the prior written consent of the
other Parties, except that a Party may assign its rights and obligations
under this Agreement to any party succeeding to substantially all of the
assets and relevant business interests of the assigning Party; provided
that, the assignee agrees to be bound by the rights and obligations of
the assigning Party.
xvi
<PAGE>
Article 12 - Warranties
- -----------------------
12.01 EXCEPT AS EXPLICITLY SET FORTH HEREIN, EACH PARTY EXPRESSLY DISCLAIMS ANY
AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION,
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF
THE TOOLS LICENSED HEREUNDER OR THE PRODUCTS MADE USING SUCH TOOLS.
12.02 Nothing in this Agreement will be construed as:
(a) a warranty or representation by DowElanco or Mycogen, or their
respective Affiliates, that anything made, used, sold or otherwise
disposed of under the terms of this Agreement is or will be free from
infringement of patents of Third Parties;
(b) a requirement that DowElanco or Mycogen, or their respective
Affiliates, file any patent application, secure any patent, or maintain
any patent in force;
(c) an obligation on DowElanco or Mycogen, or their respective
Affiliates, to bring or prosecute actions or suits against Third
Parties for infringement.
12.03 Each Party warrants that it is entitled to grant the rights granted
herein.
Article 13 - Indemnification
- ----------------------------
13.01 Except with respect to any claims relating to the infringement of any
intellectual property rights of a Third Party, Mycogen will indemnify and
hold harmless DowElanco, DowElanco Affiliates, and their respective
partners, directors, officers, employees and agents from and against any
and all claims, demands, causes of action or damages (including
reasonable attorney fees) arising from or in connection with Mycogen's
use of DowElanco Tools or the use or sale of any products developed using
DowElanco Tools by or for Mycogen Companies.
13.02 Except with respect to any claims relating to the infringement of any
intellectual property rights of a Third Party, DowElanco will indemnify
and hold harmless Mycogen, Mycogen Affiliates, and their respective
partners, directors, officers, employees and agents from and against any
and all claims, demands, causes of action or damages (including
reasonable attorney fees) arising from or in connection with DowElanco's
use of Mycogen Tools or the use or sale of any products developed using
Mycogen Tools by or for DowElanco Companies.
13.03 A person or entity claiming indemnification under this Article 13 will
give the indemnifying Party prompt notice of any such claim for which
indemnification is requested. The indemnifying Party will have the right,
but not the obligation, to assume the defense of any such claim at any
time. In such event, the indemnified
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<PAGE>
person or entity may participate in the action, at its expense, with
counsel of its own choosing reasonably acceptable to the indemnifying
Party. In no event will the indemnifying Party be liable for any
settlement without its express written consent, which consent will not be
unreasonably withheld.
Article 14 - Termination
- ------------------------
14.01 In the event of any material breach of this Agreement, a non-breaching
Party may, on ninety (90) days' advance written notice to the breaching
Party, terminate this Agreement. However, if such breach is corrected
within the ninety (90) day period, and there are no unreimbursed damages
resulting from the breach, this Agreement will continue in force.
14.02 If a Party (a) becomes insolvent or unable to pay its debts as they
mature, or (b) makes an assignment for the benefit of creditors, or (c)
permits or procures the appointment of a receiver for its assets, or (d)
becomes the subject of any bankruptcy, insolvency or similar proceeding,
then the other Parties may at any time thereafter on written notice
effective forthwith, terminate this Agreement.
14.03 Termination of this Agreement will not affect the Parties' obligations
under Article 8. In the event of a termination of this Agreement because
of a breach, the rights and licenses of the breaching party will
terminate; however, the licenses and rights granted to the nonbreaching
Parties will continue in perpetuity.
Article 15 - Miscellaneous
- --------------------------
15.01 This Agreement supersedes all previous oral and written agreements
between the Parties and constitutes the entire understanding between the
Parties with respect to the subject matter of this Agreement. No
amendment, modification, or alteration of any terms or provisions of this
Agreement will be valid unless in writing and signed by the Parties.
15.02 If any one or more of the provisions of this Agreement should for any
reason be held by a Court of competent jurisdiction to be invalid,
illegal or unenforceable, the remainder of this Agreement will
nevertheless remain in full force and effect unless such provision or
provisions go to the essence and substance of this Agreement.
15.03 It is agreed that any failure by a Party, at any time, to enforce or
require the strict keeping and performance by the other Parties of any of
the terms and conditions of this Agreement will not constitute a waiver
of such terms and conditions.
15.04 The headings of Articles used in this Agreement are for reference
purposes only and will not be considered as part of this Agreement for
purposes of interpretation.
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<PAGE>
15.05 In case of any dispute arising out of this Agreement, the Courts and Laws
of the domicile of the Party sued will be competent, however, the Parties
agree so far as possible to use every reasonable effort to settle any
dispute or disagreement between them relative to this Agreement by
amicable means, and if necessary, will utilize the assistance of an
independent party acceptable to both sides and will not resort to legal
action unless and until the Parties have in good faith attempted to
settle such dispute or disagreement in the foregoing manner.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed in
triplicate by their duly authorized representatives.
AGREED TO AND ACCEPTED:
Mycogen Corporation Agrigenetics, Inc.
DBA Mycogen Seeds
By __________________________ By __________________________
Name ________________________ Name ________________________
(type or print) (type or print)
Title _______________________ Title _______________________
DowElanco
By __________________________
Name_________________________
(type or print)
Title _______________________
[IN TRIPLICATE]
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<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated this 15th day of January, 1996,
effective as of January 15, 1996, is among DowElanco, an Indiana general
partnership ("Purchaser"), The Lubrizol Corporation, an Ohio corporation
("Lubrizol"), and AGC Holdings, Inc., a Delaware corporation ("Seller"), a
second tier wholly owned subsidiary of Lubrizol.
WHEREAS, simultaneously with the execution and delivery of this Agreement,
Purchaser, United AgriSeeds, Inc., a Delaware corporation and wholly owned
subsidiary of Purchaser ("Subsidiary"), Mycogen Corporation, a California
Corporation (the "Company") and Agrigenetics, Inc., a Delaware corporation
("Acquisition"), are entering into an Exchange and Purchase Agreement (the
"Mycogen Purchase Agreement");
WHEREAS, Seller owns 6,134,067 shares (the "Common Shares") of common
stock, par value $.001 per share, of the Company (the "Common Stock");
WHEREAS, Seller owns 3,158 shares of Senior Redeemable Convertible
Preferred Stock, Series A (the "Preferred Shares") of the Company convertible
into 1,815,274 shares (the "P Common Shares") of Common Stock as of the date of
this Agreement;
WHEREAS, Seller owns 1,946 shares of the common stock of Acquisition and
has the right to convert such ownership interest in Acquisition (the
"Acquisition Shares") into 1,538,008 shares (the "A Common Shares") of Common
Stock as of the date of this Agreement under the Amended and Restated Equity
Investment Agreement, dated December 31, 1993 between Lubrizol, the Company,
Acquisition and Mycogen Plant Sciences, Inc. ("Holding") (the "Equity Investment
Agreement");
WHEREAS, Lubrizol is the equitable owner of exercisable options to purchase
14,999 shares of Common Stock (the "O Common Shares" which, for the purposes of
this Agreement, are treated as part of Seller's Shares); and
WHEREAS, given the Common Shares, the P Common Shares, the A Common Shares
and the O Common Shares, Seller owns or has the right to acquire 9,502,348
shares of Common Stock (collectively, the "Seller's Shares") as of the date of
this Agreement.
<PAGE>
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows.
Section 1. Conversion. On the date of this Agreement, Lubrizol shall
cause Seller to, and Seller shall, convert the Preferred Shares into 1,815,274
shares of Common Stock and the Acquisition Shares into 1,538,008 shares of
Common Stock. Prior to the Closing (as defined below), Lubrizol shall exercise,
or cause to be exercised, the options to purchase the O Common Shares. Lubrizol
and Seller will take whatever steps are necessary so that Lubrizol and Seller
will own, by the Closing, the Seller's Shares.
Section 2. Representations and Warranties of Lubrizol and Seller.
Lubrizol and Seller represent and warrant to Purchaser as follows:
(a) Lubrizol and Seller are corporations duly organized, validly existing
and in good standing under the laws of the jurisdiction of their incorporation.
(b) Lubrizol and Seller have all necessary corporate power and authority to
execute and deliver this Agreement, to perform their obligations hereunder and
to consummate the transactions contemplated hereby.
(c) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the board of directors of Lubrizol and Seller and approved by the
sole shareholder of Seller, and no other corporate proceedings on the part of
Lubrizol and Seller are necessary to authorize this Agreement or to consummate
the transactions so contemplated.
(d) This Agreement has been duly and validly executed and delivered by
Lubrizol and Seller and constitutes a legal, valid and binding agreement of
Lubrizol and Seller enforceable against Lubrizol and Seller in accordance with
its terms.
(e) The execution, delivery and performance by Lubrizol and Seller of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not (i) contravene or conflict with the Certificate of Incorporation or
By-Laws of Lubrizol or Seller; (ii) assuming that all consents, authorizations
and approvals contemplated by subsection (f) below have been obtained and all
filings described therein have been made, contravene or conflict with or
constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to Lubrizol or Seller,
any
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<PAGE>
of their subsidiaries or any of their properties; (iii) conflict with, or result
in the breach or termination of any provision of or constitute a default (with
or without the giving of notice or the lapse of time or both) under, or give
rise to any right of termination, cancellation, or loss of any benefit to which
Lubrizol or Seller or any of their subsidiaries is entitled under any provision
of any agreement, contract, license or other instrument binding upon Lubrizol or
Seller, any of their subsidiaries or any of their respective properties, or
allow the acceleration of the performance of, any obligation of Lubrizol or
Seller or any of their subsidiaries under any indenture, mortgage, deed of
trust, lease, license, contract, instrument or other agreement to which Lubrizol
or Seller or any of their subsidiaries is a party or by which Lubrizol or Seller
or any of their subsidiaries or any of their respective assets or properties is
subject or bound; or (iv) result in the creation or imposition of any Lien on
any asset of Lubrizol or Seller or any of their subsidiaries, except in the case
of clauses (ii), (iii) and (iv) for any such contraventions, conflicts,
violations, breaches, terminations, defaults, cancellations, losses,
accelerations and Liens which would not individually or in the aggregate
materially interfere with the consummation of the transactions contemplated by
this Agreement.
(f) The execution, delivery and performance by Lubrizol and Seller of this
Agreement and the consummation of the transactions contemplated hereby by
Lubrizol and Seller require no action by Lubrizol or Seller in respect of, or
filing by Lubrizol or Seller with, any governmental body, agency, official or
authority (either domestic or foreign) other than (i) compliance with any
applicable requirements of the HSR Act; (ii) compliance with the Securities Act
of 1933, the Securities Exchange Act of 1934, and any applicable requirements of
state securities, takeover and Blue Sky laws; and (iii) such actions or filings
which, if not taken or made, would not individually or in the aggregate
materially interfere with the consummation of the transactions contemplated by
this Agreement.
(g) Neither Lubrizol, Seller, nor any of their subsidiaries or their
respective properties is subject to any order, writ, judgment, injunction,
decree, determination or award which would prevent or delay the consummation of
the transactions contemplated hereby.
(h) At the Closing, Lubrizol or Seller will have good and valid title to
Seller's Shares, free and clear of any Liens.
(i) There are no options or rights to acquire, or any agreements to which
Lubrizol or Seller is a party relating to, Seller's Shares, other than this
Agreement, the Equity Investment Agreement and the rights of the Company under
the provisions for
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<PAGE>
the Preferred Shares and the options with respect to the O Common Shares.
(j) The transfer of Seller's Shares hereunder to Purchaser will transfer to
Purchaser good and valid title to Seller's Shares, free and clear of any Liens.
(k) Seller's Shares represent all of the Common Shares beneficially owned
(within the meaning of Rule 13d-3 under the Exchange Act) by Lubrizol or Seller
except for options that are not exercisable at or prior to the Closing.
Section 3. Representations and Warranties of Purchaser. Purchaser
represents and warrants to Seller as follows:
(a) Purchaser is a general partnership organized under the laws of Indiana.
(b) Purchaser has all necessary power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.
(c) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the board of directors of Purchaser and no other proceedings on
the part of Purchaser are necessary to authorize this Agreement or to consummate
the transactions so contemplated.
(d) This Agreement has been duly and validly executed and delivered by
Purchaser and constitutes a legal, valid and binding agreement of Purchaser
enforceable against Purchaser in accordance with its terms.
(e) The execution, delivery and performance by Purchaser of this Agreement
and the consummation of the transactions contemplated hereby do not and will not
(i) contravene or conflict with the Partnership Agreement of Purchaser; (ii)
assuming that all consents, authorizations and approvals contemplated by
subsection (f) below have been obtained and all filings described therein have
been made, contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or decree binding
upon or applicable to Purchaser, any of its subsidiaries or any of its
properties; (iii) conflict with, or result in the breach or termination of any
provision of or constitute a default (with or without the giving of notice or
the lapse of time or both) under, or give rise to any right of termination,
cancellation, or loss of any benefit to which Purchaser or any of its
subsidiaries is entitled under any provision of any agreement, contract,
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<PAGE>
license or other instrument binding upon Purchaser, any of its subsidiaries or
any of their respective properties, or allow the acceleration of the performance
of, any obligation of Purchaser or any of its subsidiaries under any indenture,
mortgage, deed of trust, lease, license, contract, instrument or other agreement
to which Purchaser or any of its subsidiaries is a party or by which Purchaser
or any of its subsidiaries or any of their respective assets or properties is
subject or bound; or (iv) result in the creation or imposition of any Lien on
any asset of Purchaser or any of its subsidiaries, except in the case of clauses
(ii), (iii) and (iv) for any such contraventions, conflicts, violations,
breaches, terminations, defaults, cancellations, losses, accelerations and Liens
which would not individually or in the aggregate materially interfere with the
consummation of the transactions contemplated by this Agreement.
(f) The execution, delivery and performance by Purchaser of this Agreement
and the consummation of the transactions contemplated hereby by Purchaser
require no action by Purchaser or in respect of, or filing by Purchaser with,
any governmental body, agency, official or authority (either domestic or
foreign) other than (i) compliance with the HSR Act; (ii) compliance with any
applicable requirements of the Securities Act of 1933, the Securities Exchange
Act of 1934, and any applicable requirements of state securities, takeover and
Blue Sky laws; and (iii) such actions or filings which, if not taken or made,
would not individually or in the aggregate materially interfere with the
consummation of the transactions contemplated by this Agreement.
(g) Purchaser or its affiliates are acquiring Seller's Shares solely for
their own account for investment only and not with a view to resale in
connection with a distribution thereof as that term is defined in the Securities
Act of 1933 and the rules and regulations of the Securities and Exchange
Commission thereunder. Purchaser acknowledges that Seller's Shares to be
purchased pursuant to this Agreement have not been registered under the
Securities Act of 1933, as amended, or any applicable state securities law and
may not be transferred or sold except pursuant to an effective registration
statement under the Securities Act of 1933 or exemption therefrom and that
certificates evidencing Seller's Shares will bear a restrictive legend to that
effect. Purchaser has conducted its own investigation with respect to the
transactions contemplated by this Agreement and has not relied upon Lubrizol or
Seller with respect to information about Mycogen.
(h) Neither Purchaser nor any of its subsidiaries or their respective
properties is subject to any order, writ, judgment, injunction, decree,
determination or award which would
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<PAGE>
prevent or delay the consummation of the transactions contemplated by this
Agreement.
Section 4. Purchase of Seller's Shares by Purchaser. As soon as
practicable (but at least one business day) following the satisfaction or waiver
of all of the conditions set forth in Section 12 hereof and subject to Section
5, Purchaser shall purchase all of Seller's Shares for (a) $126,200,000 plus (b)
$17,849 (an amount equal to (i) 14,999 multiplied by (ii) the difference between
$13 and the average option exercise price of $11.81) plus (c) if the Closing
occurs on or after February 29, 1996, for each day beginning on February 29,
1996 through and including the Closing, the interest on $124,938,000 at a rate
equal to the Six-Month London Interbank Offered Rate in effect from time to time
divided by 365 (collectively, the "L Purchase Price"). The closing of such
purchase and sale (the "Closing") shall occur at the offices of Mayer, Brown &
Platt, 190 South LaSalle Street, Chicago, Illinois, 60603, or at such other
place as the parties may mutually agree.
Section 5. New Options. In the event additional options to purchase
Common Stock vest prior to the Closing, Lubrizol shall exercise, or cause to be
exercised, such options, the resulting shares of Common Stock shall be included
in Seller's Shares and the L Purchase Price shall be increased by an amount
equal to (a) the number of shares of Common Stock, if any, resulting from the
exercise of such options multiplied by (b) the difference between $13 and the
average option exercise price for such options.
Section 6. Deposit. One day following the execution and delivery of this
Agreement by the parties hereto, Purchaser will deposit with Seller $1,262,000
(the "Deposit") to be held by Seller until the Closing. The Deposit shall be
credited against the L Purchase Price so that, at the Closing, Purchaser will be
required to pay the L Purchase Price less the Deposit. Seller shall immediately
(and in any event within one business day) refund to Purchaser the full amount
of the Deposit (without any right of counterclaim, indemnity, rebate,
recoupment, retention, offset, set-off or other similar right or claim) unless
(i) this Agreement has terminated without the consummation of the transactions
contemplated hereunder and the Mycogen Purchase Agreement has terminated
pursuant to Section 8.1.8 or Section 8.1.9 of that agreement without the
consummation of the transactions contemplated thereunder or (ii) the
transactions contemplated by the Mycogen Purchase Agreement have been
consummated and Purchaser has failed to consummate the transactions contemplated
by this Agreement when it was required by this Agreement to do so.
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<PAGE>
Section 7. Transfer of Shares. At the Closing, subject to the conditions
set forth in Section 12 of this Agreement, Lubrizol and Seller will sell,
transfer and deliver Seller's Shares to Purchaser (duly endorsed for transfer in
blank or accompanied by stock transfer powers duly executed in blank, with
signatures guaranteed by a commercial bank or a member of The New York Stock
Exchange, Inc., with all necessary stock transfer tax stamps affixed and
cancelled) and Purchaser will purchase Seller's Shares and wire transfer to
Lubrizol or Seller (to such account(s) as Lubrizol shall specify on at least two
business days prior notice) immediately available funds representing the
aggregate L Purchase Price for Seller's Shares. Lubrizol or Seller will, upon
request of Purchaser, promptly execute and deliver all additional documents
reasonably deemed by Purchaser to be necessary, appropriate or desirable to
effect, complete and evidence the sale, assignment and transfer of Seller's
Shares pursuant to this Agreement.
Section 8. Anti-Dilution Adjustments. In the event of any change in the
number of shares of Common Stock outstanding by recapitalization, declaration of
a stock split or combination or payment of a stock dividend or the like, the
number of Seller's Shares to be transferred to Purchaser shall be adjusted
appropriately. Seller's Shares shall not include all dividends or cash
distributions in respect of Seller's Shares.
Section 9. Additional Covenants of Lubrizol and Seller. Lubrizol and
Seller agree that from the date hereof:
(a) subject to the terms and conditions hereof, Lubrizol and Seller shall
take all actions necessary to fulfill their obligations under the terms of this
Agreement and shall use their best efforts to effect the consummation of the
transactions contemplated hereby, including, without limitation, the execution
of such instruments as Purchaser may reasonably request as well as any other
actions to ensure that Purchaser becomes the owner of Seller's Shares free and
clear of all Liens;
(b) except as provided for herein, Lubrizol and Seller agree not to
(either directly or indirectly) sell, transfer, pledge, assign, hypothecate or
otherwise dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, assignment,
hypothecation or other disposition of Seller's Shares (including, without
limitation, through the disposition or transfer of control of another person);
(c) except as provided for herein, Lubrizol and Seller agree not to
(either directly or indirectly) grant any proxies with respect to the Seller's
Shares, deposit the Seller's Shares
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<PAGE>
into a voting trust or enter into a voting agreement with respect to any of the
Seller's Shares;
(d) except as provided for herein, Lubrizol and Seller agree not to
(either directly or indirectly) take any action that would make any
representation or warranty of Lubrizol or Seller herein untrue or incorrect in
any material respect; and
(e) Lubrizol and Seller shall cause the existing members of the board of
directors of the Company nominated by Lubrizol or Seller to deliver duly
executed resignations from such positions effective as of the Closing.
Section 10. No Solicitation. (a) Lubrizol and Seller will immediately
cease any existing discussions or negotiations with any third parties conducted
prior to the date hereof with respect to any Acquisition Proposal (as defined
below). Lubrizol and Seller shall not, directly or indirectly, through any
officer, director, employee, representative or agent or any of their
subsidiaries, (i) solicit, initiate, or encourage any inquiries or proposals
that constitute, or could reasonably be expected to lead to, a proposal or offer
for a merger, consolidation, business combination, sale of substantial assets,
sale of shares of capital stock (including without limitation by way of a tender
offer) or similar transactions involving the Company or any of its subsidiaries,
other than the transactions contemplated by this Agreement (any of the foregoing
inquiries or proposals being referred to in this Agreement as an "Acquisition
Proposal") or (ii) engage in negotiations or discussions concerning, or provide
any non-public information to any person or entity relating to, any Acquisition
Proposal.
(b) Lubrizol and Seller shall notify Purchaser immediately (and no later
than 24 hours) after receipt by Lubrizol or Seller of any Acquisition Proposal.
Such notice shall be made orally and in writing and shall indicate in reasonable
detail the identity of the offeror and the terms and conditions of such
proposal, inquiry or contract.
Section 11. Proxy; Voting Agreement.
(a) Lubrizol (with respect to shares acquired upon exercise of options,
after they are issued) and Seller (with respect to the remaining Seller's
Shares) hereby grant Purchaser an irrevocable proxy and irrevocably appoint
Purchaser or its designees, with full power of substitution, their attorney and
proxy to vote all Seller's Shares at any meeting of the stockholders of the
Company however called, or in connection with any action by written consent by
the stockholders of the Company. Lubrizol and Seller acknowledge and agree that
such proxy is coupled with an interest, constitutes, among other things, an
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<PAGE>
inducement for Purchaser to enter into this Agreement, is irrevocable and shall
not be terminated upon the occurrence of any event (other than the termination
of this Agreement) and that no subsequent proxies will be given (and if given
will not be effective). This proxy shall terminate upon the termination of this
Agreement.
(b) If the proxy granted in Section 11(a) above is for any reason invalid,
for so long as this Agreement is in effect, in any meeting of the stockholders
of the Company, however called, and in any action by consent of the stockholders
of the Company, Lubrizol or Seller shall vote or cause to be voted all of
Seller's Shares: (i) against any action or agreement that would result in a
breach in any material respect of any covenant, representation or warranty or
any other obligation of Lubrizol or Seller under this Agreement or of Purchaser,
Subsidiary, Acquisition or the Company under the Mycogen Purchase Agreement;
(ii) against any action or agreement that would impede, interfere with or
discourage the transactions contemplated by this Agreement or the Mycogen
Purchase Agreement, including, without limitation: (1) any extraordinary
corporate transaction, such as a merger, reorganization or liquidation involving
the Company or any or its subsidiaries, (2) a sale or transfer of a material
amount of assets of the Company or any of its subsidiaries or the issuance of
securities by the Company or any of its subsidiaries, (3) any change in the
board of directors of the Company (other than as contemplated by this Agreement
or the Mycogen Purchase Agreement), (4) any change in the present capitalization
or dividend policy of the Company (other than as contemplated by the Mycogen
Purchase Agreement) or (5) any other material change in the Company's corporate
structure or business; and (iii) in favor of any action or agreement that would
further the consummation of the transactions contemplated by this Agreement or
the Mycogen Purchase Agreement.
Section 12. Conditions. (a) The obligation of Purchaser to purchase
Seller's Shares hereunder shall be subject to the satisfaction or, in the case
of Section 12(a)(iii) through 12(a)(vii), waiver by Purchaser at or prior to the
Closing of each of the following conditions:
(i) any waiting period applicable to the purchase and sale of
Seller's Shares pursuant to this Agreement under the HSR Act shall have
terminated or expired;
(ii) no statute, rule, regulation, executive order, temporary
restraining order, decree, ruling, injunction or other order shall have been
enacted, entered, promulgated or enforced by any court or governmental authority
of competent jurisdiction which prohibits or makes illegal the sale of Seller's
Shares pursuant to this Agreement;
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(iii) the representations and warranties of Lubrizol and Seller
contained in this Agreement shall be true in all material respects both when
made and at and as of the Closing as though newly made at and as of that time;
(iv) Lubrizol and Seller shall have performed and complied in all
material respects with all agreements, covenants, obligations and conditions
required by this Agreement to be performed or complied with by Lubrizol and
Seller on or prior to the Closing Date;
(v) Lubrizol or Seller shall have caused the existing members of the
board of directors of the Company nominated by Lubrizol or Seller to have
delivered duly executed resignations from such positions effective as of the
Closing;
(vi) Purchaser shall have purchased the Purchase Shares (as defined
in the Mycogen Purchase Agreement); and
(vii) no third party shall have acquired, or shall have an agreement
to acquire, a majority of the outstanding Common Stock.
(b) The obligation of Lubrizol and Seller to sell Seller's Shares shall be
subject to the satisfaction or, in the case of Section 12(b)(iii), waiver by
Lubrizol and Seller at or prior to the Closing of each of the following
conditions:
(i) no statute, rule, regulation, executive order, decree, ruling,
injunction or other order shall have been enacted, entered, promulgated or
enforced by any court or governmental authority of competent jurisdiction which
prohibits or makes illegal the sale of Seller's Shares pursuant to this
Agreement;
(ii) any waiting period applicable to the purchase and sale of
Seller's Shares pursuant to this Agreement under the HSR Act shall have
terminated or expired; and
(iii) the representations and warranties of Purchaser contained in
this Agreement shall be true in all material respects both when made and at and
as of the Closing as though newly made at and as of that time.
Section 13. Public Announcements. Purchaser, Lubrizol and Seller will
consult with each other before issuing any press release or otherwise making any
public statements with respect to the transactions contemplated by this
Agreement and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by
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applicable law or by applicable rules of any securities exchange or upon advice
of outside counsel.
Section 14. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with its terms and that each party shall be entitled
to specific performance of the terms hereof, in addition to any other remedy at
law or in equity such party may have.
Section 15. Indemnification. Each party (an "indemnitor"), in connection
with the transactions contemplated herein, shall indemnify and hold the other
party (the "indemnitee") harmless from and against any and all losses, damages,
claims, liabilities or obligations (including attorney fees) with respect to (i)
any breach of any representation, warranty or agreement by the indemnitor
contained in this Agreement and (ii) any brokerage fees, commissions or finders'
fees payable on the basis of any action taken by the indemnitor or any of its
affiliates.
Section 16. Expenses. Each party shall bear its own expenses and costs in
connection with this Agreement and the transactions contemplated hereby. Each
party shall bear the cost of compensating any investment banker it has retained.
Section 17. Survival of Representations and Warranties; Agreements Joint
and Several. Notwithstanding anything contained in this Agreement to the
contrary, all representations, warranties and agreements made by each party
hereto in this Agreement shall survive the Closing for a period of five (5)
years.
Section 18. Amendment; Assignment. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto. No party to this Agreement
may assign any of its rights or obligations under this Agreement without the
prior consent of the other parties except that the rights and obligations of
Purchaser may be assigned by Purchaser to any of Purchaser's affiliates, but no
such transfer shall relieve Purchaser of its obligations hereunder.
Section 19. 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 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.
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Section 20. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by facsimile
or by registered or certified mail (postage prepaid, return receipt requested),
to the other party as follows:
(a) If to Lubrizol or Seller, to:
The Lubrizol Corporation
29400 Lakeland Blvd.
Wickliffe, Ohio 44092-2298
Attn: Kenneth H. Hopping
Vice President and Secretary
with a copy to:
Fred D. Kidder, Special Counsel
c/o The Lubrizol Corporation
29400 Lakeland Blvd.
Wickliffe, Ohio 44092-2298
(b) If to Purchaser, to:
DowElanco
9330 Zionsville Road
Indianapolis, Indiana 46236
Fax: 317-337-6954
Attention: Louis W. Pribila, Vice President
Secretary and General Counsel
with a copy to:
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603-3441
Fax: 312-701-7711
Attention: Scott J. Davis
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
Section 21. Reasonable Best Efforts. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things reasonably necessary, proper or advisable under applicable laws
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and regulations to consummate and make effective the transactions contemplated
by this Agreement. Without limiting the generality of the foregoing, the
parties hereto shall cooperate with one another (i) in determining whether
action by or in respect of, or filing with, any governmental body, agency,
official or authority (either domestic or foreign) is required, proper or
advisable or any actions, consents, waivers or approvals are required to be
obtained from parties to any contracts, in connection with the transactions
contemplated by this Agreement and (ii) in seeking to obtain on a timely basis
any such actions, consents, waivers or to make any such filings. In case at any
time after the Closing any further action is necessary or desirable to carry out
the purposes of this Agreement, the proper officers and directors of each party
hereto shall take all such necessary action.
Section 22. Termination. This Agreement may be terminated by either party
on or after July 31, 1996 if Purchaser has not purchased Seller's Shares
pursuant to this Agreement. No such termination shall relieve any party from
liability for any breach of this Agreement.
Section 23. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity and enforceability of the other provisions hereof. If
any provision of this Agreement, or the application thereof to any person or
entity or any circumstance, is invalid or unenforceable, (a) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid and
unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to other persons, entities or circumstances shall
not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
Section 24. Entire Agreement. This Agreement and the Confidentiality
Agreement between Purchaser and Lubrizol dated November 17, 1995 (to the extent
that Confidentiality Agreement, by its terms, survives the execution of this
Agreement) constitute the entire agreement among the parties hereto with respect
to the subject matter hereof and thereof and supersede all other prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
Section 25. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
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Section 26. Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliate" of a person means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned person;
(b) "Blue Sky" laws means laws and regulations of any state or territory
of the United States relating to the regulation of the offer and sale of
securities.
(c) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee, of
the power to direct or cause the direction of the management policies of a
person, whether through the ownership of stock, as trustee, by contract or
credit arrangement or otherwise;
(d) "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
(e) "knowledge" means knowledge after reasonable inquiry;
(f) "Liens" means any security interests, liens, claims, pledges, charges,
voting agreements or other encumbrances of any nature whatsoever;
(g) "person" means an individual, corporation, partnership, association,
trust, unincorporated organization, other entity or group (as defined in Section
13(d)(3) of the Securities Exchange Act of 1934); and
(h) "subsidiary" or "subsidiaries" of any person means any corporation,
partnership, joint venture or other legal entity of which such person (either
alone or through or together with any other subsidiary), owns, directly or
indirectly, a majority or more of the stock or other equity interests the holder
of which is generally entitled to vote for the election of the board of
directors or other governing body of such corporation, partnership, joint
venture or other legal entity.
Section 27. 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 has caused this Agreement to be
executed on its behalf by its representatives thereunto duly authorized, all as
of the day and year first above written.
DOWELANCO
By: /s/ William C. Schmidt
-------------------------------
Name: William C. Schmidt
Title: Chief Financial Officer
THE LUBRIZOL CORPORATION
By: /s/ Ray Andreas
-------------------------------
Name: Ray Andreas
Title: Vice President and Chief
Financial Officer
AGC HOLDINGS, INC.
By: /s/ O. F. Heider
-------------------------------
Name: O. F. Heider
Title: President
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AGREEMENT
---------
Pursuant to Rule 13d-1(f)(1) under the Securities Exchange Act of 1934, as
amended, The Dow Chemical Company, a Delaware corporation, ("TDCC") Rofan
Services Inc., a Delaware corporation, ("Rofan") and DowElanco, an Indiana
general partnership ("DowElanco"), hereby agree that the Schedule 13D, together
with any amendments thereto, relating to shares of common stock, $.001 par value
per share, of Mycogen Corporation, is filed on behalf of each of TDCC, Rofan and
DowElanco.
Dated: January 25, 1996
The Dow Chemical Company
By: /s/ J. Pedro Reinhard
---------------------------------
Name: J. Pedro Reinhard
Title: Financial Vice President,
Treasurer and Chief
Financial Officer
Rofan Services Inc.
By: /s/ J. Pedro Reinhard
---------------------------------
Name: J. Pedro Reinhard
Title: President
DowElanco
By: /s/ Louis W. Pribila
---------------------------------
Name: Louis W. Pribila
Title: Vice President, Secretary
and General Counsel
