<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)<F*>
Calgene, Inc.
- ------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.001 par value
- ------------------------------------------------------------------------------
(Title of Class of Securities)
129598 10 8
----------------------------------------------------------
(CUSIP Number)
Karl R. Barnickol, 800 N. Lindbergh Boulevard, St. Louis, Missouri 63167,
(314) 694-1000
- ------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
November 12, 1996
----------------------------------------------------------
(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 [ ]. (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.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
<F*>The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 129598 10 8
------------------
1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NOS. OF
ABOVE PERSONS
Monsanto Company: 43-0420020
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
n/a
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)[ ]
n/a
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7. SOLE VOTING POWER
NUMBER OF 36,396,114
SHARES
BENEFICIALLY 8. SHARED VOTING POWER
OWNED
BY EACH n/a
REPORTING
PERSON 9. SOLE DISPOSITIVE POWER
WITH
36,396,114
10. SHARED DISPOSITIVE POWER
n/a
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
36,396,114
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES[ ]
n/a
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.5549%
14. TYPE OF REPORTING PERSON
CO
-2-
<PAGE> 3
This Amendment No. 3 amends Items 3, 4, 5 and 6 of the Schedule 13D filed by the
Company on April 10, 1996, as previously amended by Amendment No. 1 filed on
June 5, 1996 and Amendment No. 2 filed on August 8, 1996, to reflect the
purchase (the "Purchase") by the Company on November 12, 1996 of an additional
6,250,000 shares of the Issuer's common stock at a price of $8.00 per share, for
an aggregate purchase price of $50,000,000, pursuant to the terms of that
certain Stock Purchase Agreement dated as of September 27, 1996 between the
Company and the Issuer. As a result of the Purchase, the Company's equity
ownership interest in the Issuer increased from approximately 49.9% to
approximately 54.5549%. As a condition precedent to the Purchase, the Company
and the Issuer entered into that certain Amended and Restated Stockholders
Agreement dated as of November 12, 1996 (the "Restated Stockholders Agreement").
Pursuant to the terms of the Restated Stockholders Agreement, there has been a
shift in the composition of the Issuer's nine-person board of directors such
that the board of directors is now composed of four independent directors (three
designated by the Issuer (collectively, the "Issuer Directors") and one
designated by the Company), the chief executive officer of the Issuer designated
by the Issuer Directors and four designees of the Company.
Item 3. Source and Amount of Funds or Other Consideration.
- ----------------------------------------------------------
Item 3 is hereby amended by adding the following subheading and paragraph to the
end of Item 3:
"Additional Purchase of 6,250,000 Shares for an Aggregate
Purchase Price of $50,000,000 on November 12, 1996
--------------------------------------------------
On November 12, 1996, the Company purchased an additional 6,250,000 shares
of the Issuer's common stock at a price of $8.00 per share, resulting in an
aggregate purchase price of $50,000,000 (the "Purchase Price"). The Company
obtained the funds to pay the Purchase Price by drawing upon the available
general working capital of the Company."
Item 4. Purpose of Transaction.
- -------------------------------
Item 4 is hereby amended by adding the following subheading and paragraphs at
the end of Item 4:
"Additional Purchase of 6,250,000 Shares for an Aggregate
Purchase Price of $50,000,000 on November 12, 1996
--------------------------------------------------
On November 12, 1996, the Company purchased an additional 6,250,000 shares
of the Issuer's common stock at a price of $8.00 per share, resulting in an
aggregate purchase price of $50,000,000. The Company acquired such additional
shares of the Issuer's common stock for investment purposes.
The Issuer required significant additional funds to pay down debt, fund
its tomato operations, support the market introduction of new cotton products
and finance continued oils research and development. The Company purchased the
additional shares to provide the Issuer with the necessary funds to implement
these strategic plans."
Item 5. Interest in Securities of the Issuer.
- ---------------------------------------------
Item 5 is hereby amended by deleting paragraphs (a) and (b) thereof in their
entirety and inserting the following in lieu thereof:
(a) As determined in accordance with Rule 13d-3, the Company is the beneficial
owner of 36,396,114 shares of the common stock of the Issuer, representing
approximately 54.5549% of the total issued and outstanding common stock of the
Issuer.
(b) As determined in accordance with Rule 13d-3, the Company has sole voting
power and sole dispositive power with respect to 36,396,114 shares of the common
stock of the Issuer.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
- --------------------------------------------------------------------------------
Securities of the Issuer.
- -------------------------
Item 6 is hereby amended by adding the following subheadings and paragraphs to
the end of Item 6:
"Agreements Relating to Additional Purchase of 6,250,000 Shares for an Aggregate
Purchase Price of $50,000,000 on November 12, 1996
--------------------------------------------------
Stock Purchase Agreement
------------------------
On September 27, 1996, the Company and the Issuer entered into a Stock
Purchase Agreement, a copy of which has been attached hereto as Exhibit 1,
---------
whereby the Company agreed, subject to certain conditions precedent, to purchase
(the "Purchase") 6,250,000 shares of the Issuer's common stock at a price of
$8.00 per share. As a result of the Purchase (which occurred on November 12,
1996), the Company's equity ownership interest in the Issuer increased from
approximately 49.9% to approximately 54.6%. Two of the conditions precedent to
the Purchase were (i) the execution of the Amended and Restated Stockholders
Agreement (which is further described immediately below) by the Company and the
Issuer and (ii) the execution and delivery of the Certificate of Amendment of
Restated Certificate of Incorporation of Calgene, Inc. (which is further
described below) by the Issuer.
Amended and Restated Stockholders Agreement
-------------------------------------------
As a condition precedent to the Purchase, the Company and the Issuer
entered into that certain Amended and Restated Stockholders Agreement dated as
of November 12, 1996 (the "Restated Stockholders Agreement"), a copy of which
has been attached hereto as Exhibit 2. The Restated Stockholders Agreement
---------
amended and restated that certain Stockholders Agreement dated as of March 31,
1996 by and between the Company and the Issuer (the "Original Stockholders
Agreement"). Pursuant to the terms of the Restated Stockholders Agreement,
among other things, there has been a shift in the composition of the Issuer's
nine-person board of directors such that the board of directors is now composed
of four independent directors (three designated by the Issuer (collectively, the
"Issuer Directors") and one designated by the Company), the chief executive
officer of the Issuer designated by the Issuer Directors and four designees of
the Company. In addition, the Amended and Restated Stockholders Agreement
changed other sections of the Original Stockholders Agreement in order to
reflect the fact that the Company now owns approximately 54.5549%, as opposed
to 49.9%, of the Issuer.
Certificate of Amendment of Restated Certificate of
---------------------------------------------------
Incorporation of Calgene, Inc.
------------------------------
As a condition precedent to the Purchase, the Issuer executed and filed
that certain Amendment of Restated Certificate of Incorporation of Calgene, Inc.
dated as of November 12, 1996 (the "Charter Amendment"), a copy of which has
been attached hereto as Exhibit 3. The amendments contained in the Charter
---------
Amendment (i) reflect the amendments to the Stockholders Agreement contained in
the Amended and Restated Stockholders Agreement, as described above, and (ii)
increase the authorized shares of the Issuer from 80,000,000 shares to
100,000,000 shares."
Item 7. Material to be Filed as Exhibits.
- -----------------------------------------
1. Stock Purchase Agreement dated as of September 27, 1996 between
Monsanto Company and Calgene, Inc.
2. Amended and Restated Stockholders Agreement dated as of November 12,
1996 by and between Calgene, Inc. (formerly known as Calgene II, Inc.) and
Monsanto Company
3. Certificate of Amendment of Restated Certificate of Incorporation of
Calgene, Inc. dated as of November 12, 1996
Signature
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this
statement is true, complete, and correct.
Date: November 15, 1996 MONSANTO COMPANY, a Delaware
corporation
By: /s/ Karl R. Barnickol
-----------------------------------
Name: Karl R. Barnickol
---------------------------------
Title: Assistant Secretary
--------------------------------
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<PAGE> 4
<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit Description
- ------- -----------
<C> <S>
1. Stock Purchase Agreement dated as of September 27, 1996 between Monsanto
Company and Calgene, Inc.
2. Amended and Restated Stockholders Agreement dated as of November 12, 1996
by and between Calgene, Inc. (formerly known as Calgene II, Inc.) and
Monsanto Company
3. Certificate of Amendment of Restated Certificate of Incorporation of
Calgene, Inc. dated as of November 12, 1996
</TABLE>
-4-
<PAGE> 1
STOCK PURCHASE AGREEMENT
Agreement dated as of September 27, 1996 between Monsanto
Company, a Delaware corporation ("Monsanto"), and Calgene, Inc.,
a Delaware corporation ("Calgene").
In consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. Sale of Shares. Subject to the terms and
--------------
conditions of this Agreement, at the Closing (as defined below),
Calgene will sell and issue to Monsanto, and Monsanto will
purchase, 6,250,000 shares (the "Shares") of Common Stock, $.001
par value per share, of Calgene ("Common Stock") for an aggregate
purchase price of $50,000,000. The number of Shares shall be
appropriately adjusted for any stock splits, stock dividends or
similar events affecting the Common Stock after the date hereof
and prior to the Closing.
2. The Closing.
-----------
(a) The closing ("Closing") of the sale and purchase
of the Shares under this Agreement shall take place at the
offices of Hale and Dorr, 60 State Street, Boston, Massachusetts
at 9:00 a.m. on the first date on which all of the conditions set
forth in Sections 6 and 7 have been satisfied or duly waived. At
the Closing, Calgene shall deliver to Monsanto a certificate for
the Shares, registered in the name of Monsanto, against payment
to Calgene of the purchase price therefor, by wire transfer.
(b) Either Monsanto or Calgene may terminate this
Agreement if the conditions set forth in Sections 6 and 7 have
not been satisfied or duly waived prior to January 31, 1997,
other than by reason of a breach of this Agreement by the
terminating party.
3. Representations of Calgene. Subject to and except
--------------------------
as disclosed by Calgene in the disclosure schedule provided by
Calgene to Monsanto on the date hereof (the "Disclosure
Schedule"), Calgene hereby represents and warrants as follows:
3.1 Organization and Standing. Calgene is a
-------------------------
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has full corporate
power and authority to conduct its business as presently
conducted and as proposed to be conducted by it and to enter into
and perform this Agreement and to carry out the transactions
contemplated by this Agreement. Calgene is duly qualified to do
business as a foreign corporation and is in good standing in the
State of California and in every other jurisdiction in which the
failure to so qualify would have a material adverse effect on the
assets, business, results of operations or financial condition of
Calgene. Calgene has furnished to
<PAGE> 2
Monsanto true and complete copies of its Certificate of Incorporation
and By-Laws, each as amended to date and presently in effect.
3.2 Capitalization. The authorized capital stock
--------------
of Calgene consists of 80,000,000 shares of Common Stock, of
which 60,443,115 shares were issued and outstanding as of August
31, 1996, and 10,000,000 shares of Preferred Stock, $.001 par
value per share, none of which shares are issued or outstanding.
All of the issued and outstanding shares of Common Stock have
been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth in Section 3.2 of the
Disclosure Schedule hereto or provided in this Agreement, (i) no
subscription, warrant, option, convertible security or other
right (contingent or otherwise) to purchase or acquire any shares
of capital stock of Calgene is authorized or outstanding,
(ii) Calgene has no obligation (contingent or otherwise) to issue
any subscription, warrant, option, convertible security or other
such right or to issue or distribute to holders of any shares of
its capital stock any evidences of indebtedness or assets of
Calgene, and (iii) Calgene has no obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any shares of
its capital stock or any interest therein or to pay any dividend
or make any other distribution in respect thereof.
3.3 Issuance of Shares. The Shares, when issued,
------------------
sold and delivered against payment therefor in accordance with
the provisions of this Agreement, will be duly and validly
issued, fully paid and non-assessable.
3.4 Authority for Agreement. The execution,
-----------------------
delivery and performance by Calgene of this Agreement and the
Amended and Restated Stockholders Agreement attached hereto as
Exhibit A (the "Amendment"), and the consummation by
- ------- -
Calgene of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate action, subject
to (i) approval of the Certificate of Amendment attached hereto
as Exhibit B (the "Certificate of Amendment") by the
------- -
stockholders of Calgene holding a majority of the shares of
Common Stock outstanding, and (ii) approval of the issuance of
the Shares to Monsanto, the Amendment and this Agreement by the
holders of a majority of the outstanding shares of Common Stock
present or represented at the meeting of stockholders to be held
for such purpose (the "Stockholders Meeting"), excluding broker
non-votes and shares held by Monsanto; (such approvals being
referred to collectively as the "Requisite Stockholder
Approval"). This Agreement has been, and the Amendment as of the
Closing will be, duly executed and delivered by Calgene. This
Agreement constitutes, and the Amendment will constitute as of
the Closing, valid and binding obligations of Calgene,
enforceable in accordance with their respective terms. The
execution of and performance of the transactions contemplated by
this Agreement and the Amendment and compliance with their
provisions by Calgene will not violate any provision of law and
will not conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute a default
under, or require a consent or waiver under, its Certificate of
Incorporation or By-
2
<PAGE> 3
Laws (each as amended to date) or any indenture, lease, agreement or
other instrument to which Calgene is a party or by which it or any of
its properties is bound, or any decree, judgment, order, statute, rule
or regulation applicable to Calgene.
3.5 Governmental Consents. No consent, approval,
---------------------
order or authorization of, or registration, qualification,
designation, declaration or filing with, any governmental
authority is required on the part of Calgene in connection with
the execution and delivery of this Agreement, the issuance, sale
and delivery of the Shares, or the other transactions to be
consummated at the Closing, as contemplated by this Agreement,
except (i) the filing with the Secretary of State of Delaware of
the Certificate of Amendment and (ii) compliance with Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and (iii) compliance with the applicable requirements of
the Securities Exchange Act of 1934 (the "Exchange Act").
3.6 Reports and Financial Statements. Calgene
--------------------------------
has previously furnished to Monsanto complete and accurate
copies, as amended or supplemented, of its (a) Annual Report on
Form 10-K for the fiscal year ended June 30, 1995, as filed with
the Securities and Exchange Commission (the "SEC"), (b) proxy
statements relating to all meetings of its stockholders (whether
annual or special) since June 30, 1995 and (c) all other reports
or registration statements, other than Registration Statements on
Form S-8, filed by Calgene with the SEC since June 30, 1995 (such
annual reports, proxy statements, registration statements and
other filings, together with any amendments or supplements
thereto, are collectively referred to herein as the "Calgene
Reports"). The Calgene Reports constitute all of the documents
filed or required to be filed by Calgene with the SEC since June
30, 1995, other than any Registration Statement on Form S-8. As
of their respective dates, the Calgene Reports did not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading. The audited financial statements
and unaudited interim financial statements of Calgene included in
the Calgene Reports (together, the "Financial Statements")
(i) comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations
of the SEC with respect thereto, (ii) have been prepared in
accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the
periods covered thereby (except as may be indicated therein or in
the notes thereto, and in the case of quarterly financial
statements, as permitted by Form 10-Q under the Exchange Act),
and (iii) fairly present in all material respects the
consolidated financial condition, results of operations and cash
flows of Calgene as of the respective dates thereof and for the
periods referred to therein.
3
<PAGE> 4
3.7 Litigation. Section 3.7 of the Disclosure
----------
Schedule identifies, and contains a brief description of, (a) any
unsatisfied judgment, order, decree, stipulation or injunction
and (b) any claim, complaint, action, suit, proceeding, hearing
or investigation of or in any court or governmental agency or
before any arbitrator to which Calgene or any subsidiary is a
party or, to the knowledge of Calgene, is threatened to be made a
party, in each case which could have a material adverse effect on
the assets, business, financial condition or results of
operations of Calgene.
4. Representations of Monsanto. Monsanto represents and
---------------------------
warrants as follows:
4.1 Investment. Monsanto is acquiring the Shares
----------
for its own account for investment and not with a view to, or for
sale in connection with, any distribution thereof, nor with any
present intention of distributing or selling the same.
4.2 Authority. Monsanto has full power and
---------
authority to enter into and to perform this Agreement and the
Amendment in accordance with their respective terms.
4.3 Experience. Monsanto has sufficient
----------
knowledge and experience in investing in companies similar to
Calgene so as to be able to evaluate the risks and merits of its
investment in Calgene and is able financially to bear the risks
thereof.
5. Covenants.
---------
5.1 Best Efforts.
------------
(a) Each of the parties shall use its respective
best efforts to take all actions and to do all things neces-
sary, proper or advisable to consummate the transactions
contemplated by this Agreement. Without limiting the
foregoing, Monsanto shall vote all of its shares of Common
Stock in favor of the Certificate of Amendment at the
Stockholders Meeting.
(b) At the Closing, Monsanto and Calgene shall
execute and deliver the Amendment.
(c) At the Closing, Monsanto and Calgene shall
execute a certificate setting forth the "Effective Date
Percentage" as defined in the Amendment.
5.2 Stockholders Meeting, Proxy Statement.
-------------------------------------
(a) As soon as practicable, Calgene shall
prepare and file with the SEC under the Exchange Act preliminary
proxy materials (the "Proxy Statement") for the purpose of
soliciting proxies from its stockholders to vote in favor of
(i) the
4
<PAGE> 5
issuance of the Shares, (ii) the Certificate of Amendment, and
(iii) the election of the directors contemplated by the Amendment
(the "Proposals") at the Stockholders Meeting. Calgene shall
promptly respond to any SEC comments on the Proxy Statement and
shall otherwise use its best efforts to resolve as promptly as
practicable all SEC comments to the satisfaction of the SEC.
Calgene shall furnish to Monsanto and its counsel copies of the
preliminary Proxy Statement prior to filing it with the SEC and
copies of the final Proxy Statement prior to mailing it to
stockholders.
(b) Promptly following the resolution to the
satisfaction of the SEC of all SEC comments on the Proxy
Statement (or the expiration of the ten-day period under Rule
14a-6(a) under the Exchange Act, if no SEC comments are received
by such date), Calgene shall distribute the Proxy Statement to
its stockholders and solicit proxies from its stockholders to
vote in favor of the Proposals.
(c) Calgene shall comply with all applicable
provisions of and rules under the Exchange Act and all applicable
provisions of the Delaware General Corporation Law in the
preparation, filing and distribution of the Proxy Statement, the
solicitation of proxies thereunder, and the calling and holding
of the Stockholders Meeting. Without limiting the foregoing,
Calgene shall ensure that the Proxy Statement does not, as of the
date on which it is distributed to its stockholders, and as of
the date of the Stockholders Meeting, contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading
(provided that Calgene shall not be responsible for the accuracy
or completeness of any information furnished by Monsanto in
writing for inclusion in the Proxy Statement).
5.3 HSR Act. Each of the parties shall promptly
-------
file any Notification and Report Forms and related material that
it may be required to file with the Federal Trade Commission and
the Antitrust Division of the United States Department of Justice
under the HSR Act, shall use its best efforts to obtain an early
termination of the applicable waiting period, and shall make any
further filings or information submissions pursuant thereto that
may be necessary, proper or advisable.
5.4 Pending Closing. Pending Closing Calgene
---------------
shall carry on the business of Calgene and its subsidiaries in
the ordinary and regular course of business.
6. Conditions to the Obligations of Monsanto. The
-----------------------------------------
obligation of Monsanto to purchase Shares at the Closing is
subject to the fulfillment, or the waiver by Monsanto, of each of
the following conditions on or before the Closing:
5
<PAGE> 6
6.1 Accuracy of Representations and Warranties. Each
------------------------------------------
representation and warranty contained in Section 3 shall be true
and correct in all material respects on and as of the Closing
Date with the same effect as though such representation and
warranty had been made on and as of that date (except for
representations and warranties made as of a specific date, which
shall be true and correct as of such date).
6.2 Performance. Calgene shall have performed and
-----------
complied with all agreements and conditions contained in this
Agreement required to be performed or complied with by Calgene
prior to or at the Closing.
6.3 Stockholder Agreement. The Amendment shall have
---------------------
been executed and delivered by Calgene.
6.4 Certificate of Amendment. The Certificate of
------------------------
Amendment shall have been filed with the Secretary of State of
Delaware.
6.5 HSR Act. All applicable waiting periods (and any
-------
extensions thereof) under the HSR Act shall have expired or
otherwise been terminated.
6.6 No Injunctions or Other Proceedings. No temporary
-----------------------------------
restraining order, preliminary or permanent injunction or other
order issued by any court or other legal or regulatory restraint
or prohibition preventing the consummation of the transactions
contemplated hereby shall have been issued and remain
outstanding. No investigation, action, suit or proceeding by any
governmental or regulatory commission, agency, body or authority,
and no action, suit or proceeding by any other person or entity
shall be pending on the Closing Date which challenges, or might
result in a challenge to, this Agreement or any transactions
contemplated hereby, or which claims, or might give rise to a
claim for, damages in a material amount as a result of the
consummation of this Agreement.
6.7 NASDAQ. The Shares shall have been authorized for
------
listing on the Nasdaq National Market, subject to official notice
of issuance.
6.8 Opinion of Counsel. Monsanto shall have received
------------------
an opinion from Hale and Dorr, counsel for Calgene, dated the
Closing Date, substantially in the form attached hereto as
Exhibit C.
- ---------
6.9 Stockholder Approval. The issuance of the Shares
--------------------
and the Certificate of Amendment shall have received the
Requisite Stockholder Approval and the directors contemplated by
the Amendment shall have been elected.
6.10 Material Adverse Change. Between the date of
-----------------------
this Agreement and the Closing Date there shall have been no
materially adverse change in the position,
6
<PAGE> 7
financial or otherwise, or the operations, assets, liabilities or
results of operations of Calgene or its subsidiaries, provided
--------
that such a material adverse change shall not be deemed to have
occurred as a result of any change in the customers, pricing or
sales volume of Calgene or any outcome of the litigation between
Calgene and Enzo Biochem, Inc.
6.11 No Change in Capitalization. Prior to
---------------------------
Closing Calgene shall not have issued, agreed to issue or approve
the issuance of any shares of its capital stock or any options,
warrants or other rights entitling the holder thereof to convert
into or receive shares of Calgene capital stock, except for the
grant of options for Calgene Common stock to employees and
consultants in the ordinary course of business and the issuance
of shares of Calgene Common Stock pursuant to the exercise of
outstanding options or warrants, unless approved by Calgene
directors designated by Monsanto in writing.
7. Conditions to the Obligations of Calgene. The
----------------------------------------
obligations of Calgene under this Agreement are subject to
fulfillment, or the waiver by Calgene, of the following
conditions on or before the Closing:
7.1 Accuracy of Representations and Warranties. The
------------------------------------------
representations and warranties of Monsanto contained in Section 4
shall be true and correct on and as of the Closing Date with the
same effect as though such representations and warranties had
been made on and as of that date.
7.2 Performance. Monsanto shall have performed and
-----------
complied with all agreements and conditions contained in this
Agreement required to be performed or complied with by Monsanto
prior to or at the Closing.
7.3 Stockholder Agreement. The Amendment shall have
---------------------
been executed and delivered by Monsanto.
7.4 HSR Act. All applicable waiting periods (and any
-------
extensions thereof) under the HSR Act shall have expired or
otherwise been terminated.
7.5 No Injunction or Other Proceedings. No temporary
----------------------------------
restraining order, preliminary or permanent injunction or other
order issued by any court or other legal or regulatory restraint
or prohibition preventing the consummation of the transaction
contemplated hereby shall have been issued and remain
outstanding. No investigation, action, suit or proceeding by any
governmental or regulatory commission, agency, body or authority,
and no action, suit or proceeding by any other person or entity
shall be pending on the Closing Date which challenges, or might
result in a challenge to, this Agreement or any transactions
contemplated hereby, or which claims, or might give rise to a
claim for, damages in a material amount as a result of the
consummation of this Agreement.
7
<PAGE> 8
7.6 Stockholder Approval. The issuance of the Shares
--------------------
and the Certificate of Amendment shall have received the
Requisite Stockholder Approval.
8. Miscellaneous.
-------------
8.1 Press Releases and Announcements. No party shall
--------------------------------
issue any press release or public disclosure relating to the
subject matter of this Agreement without the prior written
approval of the other party; provided, however, that any
-------- -------
party may make any public disclosure it believes in good faith is
required by law or regulation (in which case the disclosing party
shall advise the other party and provide it with a copy of the
proposed disclosure prior to making the disclosure).
8.2 No Third Party Beneficiaries. This Agreement
----------------------------
shall not confer any rights or remedies upon any person other
than the parties.
8.3 Entire Agreement. This Agreement (including the
----------------
documents referred to herein) constitutes the entire agreement
among the parties and supersedes any prior understandings,
agreements, or representations by or among the parties, written
or oral, with respect to the subject matter hereof.
8.4 Succession and Assignment. This Agreement shall be
-------------------------
binding upon and inure to the benefit of the parties named herein
and their respective successors. No party may assign either this
Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other party.
8.5 Counterparts. This Agreement may be executed in
------------
two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the
same instrument.
8.6 Headings. The section headings contained in this
--------
Agreement are inserted for convenience only and shall not affect
in any way the meaning or interpretation of this Agreement.
8.7 Governing Law. This Agreement shall be governed
-------------
by and construed in accordance with the internal laws (and not
the law of conflicts) of the State of Delaware.
8.8 Amendments and Waivers. The parties may mutually
----------------------
amend any provision of this Agreement at any time prior to the
Closing Date, provided, however, that any amendment
-------- -------
effected subsequent to the Requisite Stockholder Approval shall
be subject to the restrictions contained in the Delaware General
Corporation Law. No waiver by any party of any default,
misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation, or breach of
8
<PAGE> 9
warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.
8.9 Severability. Any term or provision of this
------------
Agreement that is invalid or unenforceable in any situation in
any jurisdiction shall not affect the validity or enforceability
of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of
a court of competent jurisdiction declares that any term or
provision hereof is invalid or unenforceable, the parties agree
that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific
words or phrases, or to replace any invalid or unenforceable term
or provision with a term or provision that is valid and enforce-
able and that comes closest to expressing the intention of the
invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
8.10 Specific Performance. Each of the parties
--------------------
acknowledges and agrees that the other party would be damaged
irreparably in the event any of the provisions of this Agreement
are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the parties agrees
that the other party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in any action instituted in any court
of the United States or any state thereof having jurisdiction
over the parties and the matter, in addition to any other remedy
to which it may be entitled, at law or in equity.
8.11 Construction. The language used in this Agreement
------------
shall be deemed to be the language chosen by the parties hereto
to express their mutual intent, and no rule of strict
construction shall be applied against any party.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
CALGENE, INC.
By:
--------------------------------
Title:
-----------------------------
9
<PAGE> 10
MONSANTO COMPANY
By:
--------------------------------
Title:
-----------------------------
10
<PAGE> 1
CALGENE, INC.
(formerly Calgene II, Inc.)
AND
MONSANTO COMPANY
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<S> <C>
ARTICLE 1 Effect of this Agreement . . . . . . . . . . . . . . 2
1.1 Effect of this Agreement . . . . . . . . . . . . . 2
ARTICLE 2 Compliance with Securities Act . . . . . . . . . . . 2
2.1 Certain Definitions. . . . . . . . . . . . . . . . 2
2.2 Requested Registration . . . . . . . . . . . . . . 8
2.3 Company Registration . . . . . . . . . . . . . . . 11
2.4 Expenses of Registration . . . . . . . . . . . . . 12
2.5 Registration Procedures. . . . . . . . . . . . . . 13
2.6 Indemnification. . . . . . . . . . . . . . . . . . 14
2.7 Information by Holder. . . . . . . . . . . . . . . 16
2.8 Rule 144 Reporting . . . . . . . . . . . . . . . . 17
2.9 Transfer of Registration Rights. . . . . . . . . . 17
2.10 Limitations on Subsequent Registration Rights. . . 18
2.11 Termination of Registration Rights . . . . . . . . 18
2.12 "Market Stand-off" Agreement . . . . . . . . . . . 18
ARTICLE 3 Anti-Dilution Rights and Limitations on Owner. . . . 18
3.1 Anti-Dilution Rights . . . . . . . . . . . . . . . 18
3.2 Private Offering . . . . . . . . . . . . . . . . . 19
3.3 Public Offering. . . . . . . . . . . . . . . . . . 19
3.4 Limitations. . . . . . . . . . . . . . . . . . . . 20
3.5 Open Market Purchases to Maintain Ownership
Percentage . . . . . . . . . . . . . . . . . . . . 20
3.6 Limitations on Holder's Ownership. . . . . . . . . 20
3.7 Limitations on Holder's Resale of Company
Securities . . . . . . . . . . . . . . . . . . . 21
ARTICLE 4 Company and Calgene Corporate Governance . . . . . . 22
4.1 Composition of the Board of Directors and Calgene
Board. . . . . . . . . . . . . . . . . . . . . . 22
4.2 Solicitation and Voting of Shares. . . . . . . . . 25
4.3 Committees . . . . . . . . . . . . . . . . . . . . 26
4.4 Approval Required for Certain Actions. . . . . . . 28
4.5 Enforcement of this Agreement. . . . . . . . . . . 31
4.6 Certificate of Incorporation and By-laws . . . . . 31
4.7 Advisors . . . . . . . . . . . . . . . . . . . . . 31
4.8 Injunctive Relief. . . . . . . . . . . . . . . . . 31
ARTICLE 5 Governance of Gargiulo . . . . . . . . . . . . . . . 32
<PAGE> 3
ARTICLE 6 Miscellaneous. . . . . . . . . . . . . . . . . . . . 32
6.1 Governing Law. . . . . . . . . . . . . . . . . . . 32
6.2 Successors and Assigns . . . . . . . . . . . . . . 32
6.3 Entire Agreement; Amendment. . . . . . . . . . . . 32
6.4 Notices. . . . . . . . . . . . . . . . . . . . . . 32
6.5 Delays or Omissions. . . . . . . . . . . . . . . . 33
6.6 Counterparts.. . . . . . . . . . . . . . . . . . . 33
6.7 Severability . . . . . . . . . . . . . . . . . . . 33
6.8 Stock Legends. . . . . . . . . . . . . . . . . . . 34
6.9 [This section intentionally left blank.] . . . . . 34
6.10 Audits, Consultants and Inspections. . . . . . . . 34
6.11 No Third Party Beneficiaries . . . . . . . . . . . 35
6.12 Sections and Articles. . . . . . . . . . . . . . . 35
6.13 Headings . . . . . . . . . . . . . . . . . . . . . 35
</TABLE>
<PAGE> 4
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
-------------------------------------------
AGREEMENT made as of the 12th day of November, 1996, by and
between Calgene, Inc., a Delaware corporation, (formerly known
as Calgene II, Inc.) having its principal place of business at
1920 Fifth Street, Davis, California 95616 (the "Company"), and
Monsanto Company, a Delaware corporation, having its principal
place of business at 800 North Lindbergh Boulevard, St. Louis,
Missouri 63167 ("Monsanto").
WHEREAS, Calgene Technology Corporation, a Delaware corporation
and a wholly-owned subsidiary of the Company (formerly known as
Calgene, Inc.) ("Calgene"), and Monsanto entered into an
Agreement and Plan of Reorganization, dated as of October 13,
1995 (the "Reorganization Agreement"), and certain other
Transaction Agreements (as defined in the Reorganization
Agreement) whereby Monsanto acquired shares of the Company's
common stock, par value $.001 per share ("Common Stock") and may
acquire additional shares of Common Stock;
WHEREAS, the Company and Monsanto agreed that the Company shall,
at the request of a Holder (as hereafter defined), register under
the Securities Act of 1933, as amended (the "Securities Act"),
and register or qualify under any applicable state securities or
blue sky laws the Common Stock of the Company acquired or to be
acquired by Holder so as to permit a Holder to sell such Common
Stock in the public markets;
WHEREAS, the Company and Monsanto agreed on certain restrictions
and obligations with respect to the management and operation of
the Company, Calgene and Tomato Investment Associates, Inc., a
Delaware corporation and a wholly-owned subsidiary of the Company
("Tomato Associates");
WHEREAS, the Company and Monsanto have entered into a Stock
Purchase Agreement dated as of September 27, 1996 (the "Stock
Purchase Agreement") pursuant to which Monsanto has agreed to
purchase additional shares of Common Stock of the Company; and
WHEREAS, in connection with the consummation of the transaction
contemplated by the Stock Purchase Agreement, the Company and
Monsanto desire to amend the Stockholders Agreement dated
March 31, 1996 by and between the Company and Monsanto (the
"Prior Stockholders Agreement") in its entirety and to become
bound by the terms of this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions herein contained, the Company and
Monsanto hereby agree as follows:
<PAGE> 5
ARTICLE 1
Effect of this Agreement
------------------------
1.1 Effect of this Agreement. Effective upon the date
------------------------
hereof, and subject only to the conditions set forth herein,
all provisions relating to the granting of registration
rights and covenants related thereto made by the Company and
Monsanto shall be contained in this Agreement. The
registration rights and covenants provided herein set forth
the sole and entire agreement between the Company and
Monsanto on the subject matter of registration rights.
ARTICLE 2
Compliance with Securities Act
------------------------------
2.1 Certain Definitions. As used in this Agreement, the
-------------------
following terms shall have the following respective meanings
(all terms defined in this Article 2 or in other provisions
of this Agreement in the singular shall have the same
meaning when used in the plural and vice versa):
-----------
"Affiliate" has the same meaning as in Rule 12b-2
---------
promulgated under the Exchange Act.
"Associate" has the same meaning as in Rule 12b-2
---------
promulgated under the Exchange Act.
"Board" or "Board of Directors" means the Board of
----- ------------------
Directors of the Company except where the context otherwise
requires.
"Calgene" has the meaning set forth in the recitals
-------
herein.
"Calgene Board" means the Board of Directors of Calgene.
-------------
"Calgene Director" means a member of the Calgene Board.
----------------
"Commission" means the Securities and Exchange
----------
Commission or any other federal agency at the time
administering the Securities Act.
"Common Stock" means the Common Stock, $.001 par value,
------------
of the Company.
"Company" has the meaning set forth in the first
-------
paragraph hereof.
"Company Credit Facility" means the Holding Company
-----------------------
Credit Facility Agreement dated March 31, 1996 between the
Company and Monsanto.
-2-
<PAGE> 6
"Company Director" means an Independent Director who
----------------
is designated for such position by the Company in accordance
with Section 4.1 hereof.
"Company Management Director" means the Chief Executive
---------------------------
Officer (or, if there is none at any time, a Director
nominated by a majority of the Company Directors) and a
second Director who shall be nominated by a majority of the
Company Directors.
"Company Securities" has the meaning set forth in Section 3.1
------------------
hereof.
"Control Securities" means securities of the Company,
------------------
other than Restricted Securities, owned by a Holder at the
time such Holder would be deemed to be an Affiliate of the
Company.
"Credit Facilities" means the Company Credit Facility
-----------------
and the Gargiulo Credit Facility.
"Director" means a member of the Board of Directors of
--------
the Company.
"Effective Date" means November 12, 1996.
--------------
"Effective Date Percentage" means the greater of 53% or
-------------------------
the percentage of outstanding shares of Common Stock of the
Company held by Monsanto immediately after the consummation
of the transactions contemplated by the Stock Purchase
Agreement.
"Equity Security" means (i) any Common Stock or other
---------------
Voting Stock, (ii) any securities of the Company convertible
into or exchangeable for Common Stock or other Voting Stock
or (iii) any options, rights or warrants (or any similar
securities) issued by the Company to acquire Common Stock or
other Voting Stock.
"Exchange Act" means the Securities Exchange Act of
------------
1934, as amended.
"Financial Purchaser" means a Person (i) purchasing
-------------------
Company Securities from Monsanto for investment purposes or
otherwise in the ordinary course of business and not for the
purpose nor with the effect of changing or influencing the
control of the Company and (ii) which Person is not already
primarily in the same lines of business as the Company.
"Gargiulo" means Gargiulo, Inc. formerly known as Tomato
--------
Investment Associates, Inc.
-3-
<PAGE> 7
"Gargiulo Business" means the business transacted by
-----------------
Tomato Associates after March 31, 1996, which business was
transacted by Gargiulo prior to March 31, 1996.
"Gargiulo Credit Facility" means the Gargiulo Credit
------------------------
Facility Agreement dated March 31, 1996 between the Company
and Monsanto.
"hereto", "hereunder", "herein", "hereof" and the like mean and
------ --------- ------ ------
refer to this Agreement as a whole and not merely to the specific
article, section, paragraph or clause in which the respective
word appears.
"Holder" means Monsanto and, subject to Section 2.9
------
hereof and except for purposes of Article 3 hereof, any
subsequent holder of outstanding Registrable Securities.
"Indemnified Party" has the meaning set forth in Section
-----------------
2.6(c) hereof.
"Indemnifying Party" has the meaning set forth in
------------------
Section 2.6(c) hereof.
"Independent Director" means a Director or Calgene
--------------------
Director (i) who is not and has never been an officer or
employee of Calgene, the Company, any Affiliate or Associate
of Calgene or the Company or of a Person that derived five
percent (5%) or more of its revenues or earnings in its most
recent fiscal year from transactions involving Calgene, the
Company or any Affiliate or Associate of Calgene or the
Company, (ii) who is not and has never been an officer or
employee of Monsanto, any Affiliate or Associate of Monsanto
or of a Person that derived more than five percent (5%) of
its revenues or earnings in its most recent fiscal year from
transactions involving Monsanto or any Affiliate or
Associate of Monsanto, (iii) who is not and never has been
an officer or employee of Gargiulo, any Affiliate or
Associate of Gargiulo or of a Person that derived more than
five percent (5%) of its revenues or earnings in its most
recent fiscal year from transactions involving Gargiulo or
any Affiliate or Associate of Gargiulo, (iv) who has no
affiliation, compensation, consulting or contracting
arrangement with Calgene, the Company, Monsanto, Gargiulo or
their respective Affiliates or Associates or any other
Person such that a reasonable person would regard such
Director as likely to be unduly influenced by management of
Calgene, the Company or Monsanto, respectively (provided,
however, that no Person shall be regarded as being unduly
influenced by the management of Monsanto merely because such
Person serves or previously served as a director of Monsanto
or any Affiliate or Associate of Monsanto), and (v) who has
an outstanding reputation for personal integrity and
distinguished achievement in areas relevant to the Company.
Notwithstanding the foregoing, no member of the immediate
family of any Person who does not qualify to be an
Independent Director by reason
-4-
<PAGE> 8
of clause (i), (ii), (iii) or (iv) above shall be considered an
Independent Director. For purposes of the preceding sentence,
the term "immediate family" shall have the same meaning as set
forth in Item 404(a) of Regulation S-K. Without limiting the
foregoing, Roger H. Salquist shall qualify as an Independent
Director so long as he continues to qualify under clauses (iv)
and (v) of such definition. Roger H. Salquist shall not fail to
qualify under clause (iv) above as a result of his Change in
Control Employment Agreement dated July 19, 1995, as
modified, or Consulting Agreement dated September 16, 1996
with the Company. Any of the above restrictions may be
waived by unanimous action of the Board of Directors.
"Monsanto" has the meaning set forth in the first
--------
paragraph hereof.
"Monsanto Director" means a Director or Calgene
-----------------
Director, including any Monsanto Management Director, who is
designated for such position by Monsanto in accordance with
Section 4.1 hereof.
"Monsanto Management Director" means a Director or
----------------------------
Calgene Director who is designated for such position by
Monsanto in accordance with Section 4.1 hereof and who is or
was an employee of Monsanto.
"New Percentage Ownership" has the meaning set forth in
------------------------
Section 3.6(c) hereof.
"Non-Financial Purchaser" means a Person, other than a
-----------------------
Financial Purchaser, purchasing Company Securities from
Monsanto.
"Operating Plan" has the meaning set forth in Section
--------------
4.4(a)(ix) hereof.
"Other Selling Stockholders" has the meaning set forth
--------------------------
in Section 2.2(c) hereof.
"Percentage Interest" means the percentage of
-------------------
outstanding Voting Stock that is controlled directly or
directly by Monsanto and its Affiliates.
"Person" means a corporation, association, partnership,
------
joint venture, limited liability company, individual, trust,
unincorporated organization, a government agency or
political subdivision thereof and any other entity.
"Preliminary Prospectus" means a preliminary prospectus
----------------------
as contemplated by Rule 430 or 430A under the Securities Act
included at any time in the Registration Statement.
"Pre-Offering Percentage" has the meaning set forth in
-----------------------
Section 3.1 hereof.
-5-
<PAGE> 9
"Prospectus" means (i) the prospectus as first filed
----------
with the Commission pursuant to Rule 424(b) under the
Securities Act or, (ii) if no such filing is required, the
form of final prospectus included in the Registration
Statement at the effective date thereof or (iii) if a Term
Sheet or Abbreviated Term Sheet (as such terms are defined
in Rule 434(b) and 434(c), respectively, under the
Securities Act) is filed with the Commission pursuant to
Rule 424(b) (7) under the Securities Act, the Term Sheet or
Abbreviated Term Sheet and the last Preliminary Prospectus
filed with the Commission prior to the time the Registration
Statement became effective, taken together (including, in
each case, the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act),
together with any supplement to any of the foregoing.
"Registration Statement" means any registration
----------------------
statement of the Company filed under the Securities Act
which covers any of the Registrable Securities pursuant to
the provisions of this Agreement, including the Prospectus
relating thereto and all amendments and supplements to such
registration statement, including post-effective amendments,
all exhibits and all material incorporated or deemed to be
incorporated by reference in such registration statement.
"Registrable Securities" means shares of Common Stock
----------------------
issued or issuable to Monsanto pursuant to the Transaction
Agreements and the Prior Stockholders Agreement and the
Stock Purchase Agreement whether owned by Monsanto or a
permitted transferee of Monsanto and all such other
securities of the Company acquired by Monsanto or any
Affiliate of Monsanto in accordance herewith.
"Register", "Registered" and "Registration", whether or not
-------- ---------- ------------
capitalized, mean and refer to a registration effected by
preparing and filing a Registration Statement in compliance with
the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness
of such Registration Statement.
"Registration Expenses" means all expenses incurred by
---------------------
the Company in compliance with this Article 2, including,
without limitation, all registration fees, qualification
fees, filing fees, advertising and road show expenses
(excluding advertising and road show expenses incurred by a
Holder), printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and
expenses, and the expense of any special audits incident to
or required by any such registration (but excluding the
compensation of regular employees of the Company, which
shall be paid in any event by the Company).
"Reorganization Agreement" has the meaning set forth in
------------------------
the recitals herein.
-6-
<PAGE> 10
"Requesting Holder" means a Holder requesting any
-----------------
registration pursuant to Section 2.2 hereof.
"Restricted Securities" means the securities of the
---------------------
Company acquired by a Holder from the Company or an
Affiliate of the Company otherwise than pursuant to a public
offering.
"Section 16 Officers" has the meaning set forth in
-------------------
Section 4.3(b)(iii) hereof.
"Securities Act" means the Securities Act of 1933, as
--------------
amended.
"Selling Expenses" means all underwriting discounts and
----------------
selling commissions applicable to the sale of Registrable
Securities.
"Strategic Plan" has the meaning set forth in Section
--------------
4.4(a)(ix) hereof.
"Subsidiary" has the same meaning as in Rule l2b-2
----------
promulgated under the Exchange Act.
"Substantial Part" means more than ten percent (10%) of
----------------
the total consolidated assets of the Company as shown on the
Company's consolidated balance sheet as of the end of the
most recent fiscal quarter ending prior to the time the
determination is made.
"Tomato Associates" has the meaning set forth in the
-----------------
recitals herein.
"Transaction Agreements" has the meaning set forth in
----------------------
the Reorganization Agreement.
"Trigger Event" means the earliest of (i) any time that
-------------
Monsanto's Percentage Interest is at least fifty-five
percent (55%), (ii) the Company elects to convert borrowings
made from Monsanto into Equity Securities and Monsanto's
Percentage Interest is at least fifty percent (50%) after
such conversion, or (iii) the closing of Monsanto's purchase
of additional shares of Common Stock pursuant to the Stock
Purchase Agreement.
"Unaffiliated Equity Holders" means holders of Equity
---------------------------
Securities other than Monsanto or any of its Affiliates.
"Voting Stock" means securities having the right to vote
------------
generally in any election of Directors of the Company (other
than solely by reason of the occurrence of an event).
-7-
<PAGE> 11
2.2 Requested Registration.
----------------------
(a) Request for Registration. Holders of Registrable
------------------------
Securities shall have the right to request (with such
requests in writing and stating the number of shares
of Registrable Securities to be disposed of and the
intended method of disposition of shares by such
Holders) up to two (2) registrations on Form S-3 (and
up to two (2) additional registrations on Form S-3
for each conversion of outstanding principal or
interest into shares of Common Stock upon the
occurrence of an "Event of Default" under the Company
Credit Facility or the Gargiulo Credit Facility (as
defined in each such Credit Facility, respectively))
at the Company's expense and an unlimited number of
additional registrations on Form S-3 at the selling
Holder's expense, provided that the requests for
additional registrations are made by Holders of at
least ten percent (10%) of the Registrable
Securities, subject only to the following:
(i) The Company shall not be required to effect a
registration pursuant to this Section 2.2
prior to September 30, 1998, unless an Event
of Default has occurred and is continuing
under the Company Credit Facility or under
the Gargiulo Credit Facility, in which event
the Company shall be required to effect a
registration pursuant to this Section 2.2 at
any time upon the request of a Holder with
respect to any shares of Common Stock issued
to a Holder upon conversion of outstanding
principal or accrued interest under either
the Company Credit Facility or the Gargiulo
Credit Facility after the occurrence of an
Event of Default under either of such
agreements.
(ii) The Company shall not be required to effect a
registration pursuant to this Section 2.2
within one hundred eighty (180) days after
the effective date of the last such
registration pursuant to this Section 2.2.
(iii) The Company shall not be required to effect a
Registration Statement in any particular
jurisdiction in which the Company would be
required to execute a general consent to
service of process in effecting such
registration, qualification or compliance,
unless the Company is already subject to
service in such jurisdiction and except as
may be required by the Securities Act or
applicable rules or regulations thereunder.
(iv) The Company shall not be required to effect a
Registration Statement for a period of not
more than ninety (90) days immediately
following the delivery of a certificate
signed by the
-8-
<PAGE> 12
President of the Company to the Requesting
Holders stating that, in the good faith
judgment of the Board of Directors of the
Company, it would be seriously detrimental to
the Company and its shareholders for such
Registration Statement to be filed on or
before the date filing would otherwise be
required hereunder; provided, however, that
the Company may not utilize this right more
than once in any twelve (12) month period and
the Company may not exercise this right based
on the fact that the Company has recently
registered any of its securities for the
account of a security holder or holders
exercising their respective demand
registration rights.
If the Company cannot qualify for registration on
Form S-3, then the Company shall effect any
registration required or requested by the Holder on
Form S-1, or such other appropriate form, in which
event this Section 2.2 shall apply in all respects as
if the words "Form S-3" were replaced by the words
"Form S-1" or the appropriate designation for such
other form.
(b) Notice of Inclusion. The Company shall give
-------------------
written notice to all Holders of Registrable
Securities of the receipt of a request for
registration pursuant to this Section 2.2 and shall
provide a reasonable opportunity for other Holders to
participate in the registration; provided, however,
that, if the registration is for an underwritten
offering, then the terms of Section 2.2(c) hereof
shall apply to all participants in such offering.
Subject to the foregoing, the Company shall use its
best efforts to effect promptly the registration of
all shares of Registrable Securities on Form S-3 to
the extent requested by the Holder or Holders thereof
for purposes of disposition.
(c) Underwriting. If the Requesting Holders intend
------------
to distribute the Registrable Securities covered by
their request by means of an underwriting, then they
shall so advise the Company as a part of their
request made pursuant to this Section 2.2, and the
Company shall include such information in the written
notice referred to in Section 2.2(b) hereof. The
right of any Holder to registration pursuant to this
Section 2.2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion
of such Holder's Registrable Securities in the
underwriting to the extent requested and to the
extent provided herein.
The Company shall (together with all Holders
proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in
customary form with the representative of the
underwriter
-9-
<PAGE> 13
or underwriters of recognized national
standing, selected for such underwriting by a
majority in interest of the Requesting Holders and
reasonably acceptable to the Company. Notwithstanding
any other provision of this Section 2.2, if the
representative advises the Requesting Holders in
writing that marketing factors require a limitation
on the number of shares to be underwritten, then the
Requesting Holders shall so advise all Holders, and
the number of shares of Registrable Securities that
may be included in the registration and underwriting
shall be allocated first among all Holders thereof in
proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by
such Holders at the time of filing the Registration
Statement. No Registrable Securities excluded from
the underwriting by reason of the underwriter's
marketing limitation shall be included in such
registration.
If any Holder of Registrable Securities disapproves
of the terms of the underwriting, then such person
may elect to withdraw therefrom by written notice to
the Company, the underwriter and the Requesting
Holders. The Registrable Securities and/or other
securities so withdrawn shall also be withdrawn from
registration; provided, however, that, if, by the
withdrawal of such Registrable Securities, a greater
number of Registrable Securities held by other
Holders may be included in such registration (up to
the maximum of any limitation imposed by the
underwriters), then the Company shall offer to all
Holders who have included Registrable Securities in
the registration the right to include additional
Registrable Securities in the same proportion used to
determine the underwriter limitation in this Section
2.2(c).
If the underwriter has not limited the number of
Registrable Securities to be underwritten, then the
Company and its executive officers, and such other
Persons as are determined by the Board of Directors,
their successors, and their assigns ("Other Selling
Stockholders"), may include securities for their own
account in such registration if the underwriter so
agrees and if the number of Registrable Securities
held by the Holders that would otherwise have been
included in such registration and underwriting will
not thereby be limited for any reason, including but
not limited to the price for which the Registrable
Securities will be sold. To the extent that the
underwriter wishes to limit the number of shares to
be included in the registration on behalf of the
Company and the Other Selling Stockholders, the
shares of Common Stock to be registered held by the
Other Selling Stockholders shall be excluded from
such offering prior to excluding any shares held by
the Company and those held by the Company shall be
excluded prior to excluding any Registrable
Securities held by the Holders.
-10-
<PAGE> 14
2.3 Company Registration.
--------------------
(a) Notice and Inclusion. If, at any time after
--------------------
September 30, 1998, the Company shall determine to
register any of its securities for its own account,
other than a registration relating solely to employee
benefit plans, or a registration relating solely to a
Commission Rule 145 transaction, the Company shall:
(i) promptly give to each Holder written notice
thereof (which shall include a list of the
jurisdictions in which the Company intends to
attempt to qualify such securities under the
applicable blue sky or other state securities
laws); and
(ii) include in such registration (and any related
qualification under blue sky laws or other
compliance), and in any underwriting involved
therein, all Registrable Securities specified
in a written request or requests, within
twenty (20) days after receipt of the written
notice from the Company, by any Holder or
Holders.
(b) Underwriting. If the registration of which the
------------
Company gives notice is for a registered public
offering by the Company of its securities through an
underwriting, then the Company shall so advise the
Holders as a part of the written notice given
pursuant to Section 2.3(a)(i) hereof. In such event,
the right of any Holder to registration pursuant to
this Section 2.3 shall be conditioned upon such
Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in
the underwriting to the extent provided herein. All
Holders proposing to distribute their securities
through such underwriting shall (together with the
Company, and all the Other Selling Stockholders
distributing their securities through such
underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters
selected for underwriting by the Company.
Notwithstanding any other provision of this Section
2.3, if the underwriter determines that marketing
factors require a limitation on the number of shares
to be underwritten, then the underwriter may exclude
from such registration and underwriting some or all
of the Registrable Securities held by the Holders or
the stock held by Other Selling Stockholders in
accordance with this Section 2.3(b). The Company
shall so advise all Holders and all Other Selling
Stockholders distributing their securities through
such underwriting, and (i) as to the first
registration in which Holders are entitled to
participate pursuant to this Section 2.3, the number
of Registrable Securities and other securities that
may be included in the registration and underwriting
shall be allocated among all Holders thereof on the
basis that shares held by all
-11-
<PAGE> 15
the Other Selling Stockholders who are not Holders
shall first be excluded to the extent required and, if
further exclusion is necessary, shares held by the
selling Holders shall then be excluded; provided,
however, that, as among the respective Other Selling
Stockholders as a group on the one hand and the
Holders as a group on the other hand suffering such
exclusion, the exclusion shall be in proportion, as
nearly as practicable, to the amount of securities
entitled to inclusion in such registration held by
each of the Other Selling Stockholders as a group and
each of the Holders at the time of filing the
Registration Statement; and (ii) as to all subsequent
registrations, the number of shares of Registrable
Securities and other securities that may be included
in the registration and underwriting shall be
allocated among all Other Selling Stockholders and
the Holders in proportion, as nearly as practicable,
to the respective amounts of securities entitled to
inclusion in such registration held by all such Other
Selling Stockholders and Holders at the time of
filing the Registration Statement. For purposes of
the apportionment provisions in clause (i) above, for
any selling Holder that is a partnership or
corporation, the partners, retired partners, and
shareholders of such Holder, the estate and family
members of such partners and retired partners, and
any trusts for the benefit of any of the foregoing
persons shall be deemed to be a single "selling
Holder," and any pro rata reduction with respect to
such selling Holder shall be based upon the aggregate
number of shares carrying registration rights owned
by all entities and individuals included in such
"selling Holder," as defined in this sentence. If
any Other Selling Stockholder or Holder disapproves
of the terms of any such underwriting, he may elect
to withdraw therefrom by written notice to the
Company and the underwriter. Any securities excluded
or withdrawn from such underwriting shall be
withdrawn from such registration.
2.4 Expenses of Registration. All Registration Expenses
------------------------
incurred in connection with any registration qualification
or compliance pursuant to this Article 2 shall be borne by
the Company; provided, however, that the Registration
Expenses for the fifth and all subsequent registrations
under Section 2.2(a) hereof requested by the Holders shall
be borne by the requesting Holders pro rata on the basis of
the number of their shares so registered. All Selling
Expenses relating to the securities registered by Holders
and, if applicable, Other Selling Stockholders, and fees and
disbursements of counsel, shall be borne by the Holders or
the Other Selling Stockholders, as the case may be, of such
securities pro rata on the basis of the number of their
shares so registered.
-12-
<PAGE> 16
2.5 Registration Procedures.
-----------------------
(a) Company shall use its best efforts to register or
qualify the Registrable Securities covered by such
Registration Statement under such other securities or
blue sky laws of such United States jurisdictions as
Holder shall reasonably request and do any and all
acts and things which may be necessary or desirable
to enable Holder to consummate the public sale or
other disposition in such jurisdictions; provided,
however, that Company shall not be required in
connection therewith or as a condition thereto to
qualify to do business or file a general consent to
service of process in any such jurisdictions.
(b) The Company represents and warrants that, on the date
of its effectiveness, the Registration Statement will
comply in all material respects with the applicable
requirements of the Securities Act and the rules
thereunder, including without limitation Rule 415; on
the date of its effectiveness, the Registration
Statement will not contain any untrue statement of a
material fact or omit to state any material fact
required to be stated therein or necessary in order
to make the statements made therein not misleading;
provided, however, that no representation is made by
Company with respect to information relative to any
Holder; and the Prospectus will not include any
untrue statement of a material fact or omit to state
a material fact necessary in order to make the
statements therein, in light of the circumstances
under which they were made, not misleading; provided,
however, that no representation is made by Company
with respect to information relative to any Holder.
(c) If, at any time or times while the Registration
Statement is effective, Company notifies Holder that
a development has occurred or is pending which, based
upon consultation with Company's legal counsel,
Company reasonably believes may cause the then
current Prospectus not to be in compliance with
applicable securities laws, then Holder shall refrain
from delivering the Prospectus and from making any
offers or sales of Registrable Securities requiring
the delivery of the Prospectus until such time as
Company either notifies Holder that the Prospectus
complies with such laws or delivers an amended
Prospectus in replacement of the deficient
Prospectus. Company shall use its reasonable best
efforts to minimize the time during which Holder must
so refrain, and no more than one (1) such period of
refrain shall be imposed during any period of one
hundred eighty (180) days.
(d) At least two (2) business days prior to the initial
filing of the Registration Statement or Prospectus
and no fewer than two (2) business days prior to the
filing of any amendment or supplement thereto
-13-
<PAGE> 17
(including any document that would be incorporated or
deemed to be incorporated therein by reference),
Company shall furnish Holder, its legal counsel and
the managing underwriter, if any, copies of all such
documents proposed to be filed, which documents
(other than those incorporated or deemed to be
incorporated by reference) shall be subject to review
of Holder, its legal counsel and such underwriters,
if any, and Company shall cause its officers and
directors and the independent certified public
accountants to Company to respond to such inquiries
as shall be necessary, in the opinion of respective
counsel to Company and any such underwriters, to
conduct a reasonable investigation within the meaning
of the Securities Act. Company shall not file any
such Registration Statement or Prospectus or any
amendments or supplements thereto to which Holder,
its legal counsel, or the managing underwriters, if
any, shall reasonably object on a timely basis
(i.e., within two (2) business days of receipt
----
thereof).
(e) Company shall promptly notify Holder when the
Registration Statement is declared effective; notify
Holder of any stop-order or similar proceeding by the
Commission or any state securities authority; and
furnish such number of Prospectuses, Prospectus
supplements and other documents incident thereto as
Holder from time to time may reasonably request.
(f) In the event of any breach by Company of the
provisions of Section 2.2, 2.3, 2.4 or 2.5, the
parties agree that Holder will suffer irreparable
harm. Accordingly, the parties agree that the
provisions of Sections 2.2, 2.3, 2.4 and 2.5 are
specifically enforceable by Holder and that Holder
shall be entitled to temporary and permanent
injunctive relief against Company and the other
rights and remedies to which Holder may be entitled
to at law, in equity or under this Agreement for any
such breach.
2.6 Indemnification.
---------------
(a) Indemnification by the Company. The Company
------------------------------
shall indemnify each Holder with respect to which
registration, qualification or compliance has been
effected pursuant to this Article 2, each of its
officers, directors, employees, agents and partners,
each Person controlling such Holder within the
meaning of Section 15 of the Securities Act, each
underwriter, if any, and each Person who controls any
underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses,
damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or
threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material
fact contained in any Prospectus,
-14-
<PAGE> 18
offering circular or other document (including any
related Registration Statement, notification or the
like) incident to any such registration qualification
or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to
be stated therein or necessary to make the statements
therein not misleading, or any violation by the
Company of the Securities Act or any rule or
regulation thereunder applicable to the Company and
relating to action or inaction required of the Company
in connection with any such registration,
qualification or compliance. The Company shall
reimburse each such Holder, each of its officers,
directors, employees, agents and partners, and each
Person controlling such Holder, each such underwriter
and each Person who controls any such underwriter for
any legal and any other expenses reasonably incurred
in connection with investigating, preparing or
defending any such expense, claim, loss, damage,
liability or action; provided, however, that the
Company shall not be liable in any such case to the
extent that any such claim, loss, damage, liability,
action or expense arises out of or is based on any
untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in
conformity with written information furnished to the
Company by an instrument duly executed by such Holder
or underwriter and stated to be specifically for use
therein.
(b) Indemnification by the Holders. To the extent
------------------------------
set forth in the second sentence of this Section
2.6(b), each Holder shall, if Registrable Securities
or other securities held by such Holder are included
in the securities as to which such registration,
qualification or compliance is being effected,
indemnify the Company, each of its directors,
officers, employees and agents, each underwriter, if
any, of the Company's securities covered by such a
Registration Statement, each Person who controls the
Company or such underwriter within the meaning of
Section 15 of the Securities Act, each other such
Holder, each of such other Holder's officers,
directors, employees, agents and partners, and each
Person controlling such Holder within the meaning of
Section 15 of the Securities Act against all
expenses, claims, losses, damages and liabilities (or
actions in respect thereof), including any of the
foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or based on
any untrue statement (or alleged untrue statement) of
a material fact made by the Holder and contained in
any such Registration Statement, Prospectus, offering
circular or other document, or any amendment or
supplement thereto or incident to any such
registration, qualification or compliance or based on
any omission (or alleged omission) to state therein a
material fact required to be made by the Holder and
stated therein or necessary to make the statements
therein not misleading or any violation by the
Company of any rule or regulation promulgated
-15-
<PAGE> 19
under the Securities Act applicable to the Company in
connection with such registration, qualification or
compliance as a result of any statement (or based on
any omission to state or alleged omission) required
to be made by such Holder. Each such Holder shall
reimburse the Company, such other Holders, directors,
officers, employees, agents, partners, Persons,
underwriters and control persons for any legal or any
other expenses reasonably incurred in connection with
investigating, preparing or defending any such
expense, claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such
Registration Statement, Prospectus, offering circular
or other document or any amendment or supplement
thereto in reliance upon and in conformity with
written information furnished by the Holder to the
Company by an instrument duly executed by such Holder
and stated to be specifically for use therein;
provided, however, that the obligations of such
Holders hereunder shall be limited to an amount equal
to the proceeds to each such Holder of Registrable
Securities sold as contemplated herein in connection
with the particular registration qualification or
compliance involved.
(c) Notice. Each party entitled to indemnification
------
under this Section 2.6 (the "Indemnified Party")
shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly
after such Indemnified Party has actual knowledge of
any claim as to which indemnity may be sought and
shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting
therefrom; provided, however, that counsel for the
Indemnifying Party, who shall conduct the defense of
such claim or any litigation resulting therefrom,
shall be approved by the Indemnified Party (whose
approval shall not unreasonably be withheld), and
that the Indemnified Party may participate in such
defense at its own expense; and provided further that
the failure of any Indemnified Party to give notice
as provided herein shall not relieve the Indemnifying
Party of its obligations under this Section 2.6
unless such failure resulted in detriment to the
Indemnifying Party. No Indemnifying Party, in the
defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any
settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
2.7 Information by Holder. Each Holder or Holders of
---------------------
Registrable Securities in any registration shall furnish to
the Company such information regarding such Holder or
Holders and the distribution proposed by such Holder or
Holders as
-16-
<PAGE> 20
the Company may reasonably request in writing but only to the
extent as shall be required in connection with any
registration, qualification or compliance referred to in this
Article 2.
2.8 Rule 144 Reporting. With a view to making available the
------------------
benefits of certain rules and regulations of the Commission
which may permit the sale of the Restricted Securities or
Control Securities to the public without registration, the
Company agrees to:
(a) Use its best efforts to make and keep public
information available as those terms are understood
and defined in Rule 144 under the Securities Act;
(b) Use its best efforts to file with the Commission in a
timely manner all reports and other documents
required of the Company under the Securities Act and
the Exchange Act (at any time after it has become
subject to such reporting requirements);
(c) For so long as a Holder owns any Restricted
Securities or Control Securities, furnish to the
Holder forthwith upon request (i) a written statement
by the Company as to its compliance with the
reporting requirements of Rule 144 and of the
Securities Act and the Exchange Act, (ii) a copy of
the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents
so filed as such Holder may reasonably request in
availing itself of any rule or regulation of the
Commission allowing a Holder to sell any such
securities without registration; and
(d) When any Holder qualifies under Rule 144 for the
unrestricted right of sale under Rule 144, the
Company shall, upon written request of such Holder
(such request to include sufficient detail as to
establish how the Holder so qualifies under Rule
144), promptly remove any restrictive legend that may
have been placed on any Restricted or Control
Securities and issue Common Stock of the Company free
of such restrictive or other legends.
2.9 Transfer of Registration Rights. The rights to cause
-------------------------------
the Company to register the Registrable Securities
granted to each Holder by the Company under Sections 2.2
and 2.3 hereof may be transferred or assigned to a
transferee or assignee in connection with the transfer or
assignment of not less than one million (1,000,000)
shares of the Registrable Securities; provided, however,
that the Company shall be entitled to notice of any such
transfer of registration rights within thirty (30) days
of the date such transfer is effected.
-17-
<PAGE> 21
2.10 Limitations on Subsequent Registration Rights. No
---------------------------------------------
owner or prospective owner of securities of the Company
shall have any registration rights other than as set
forth in this Agreement. The Company shall not, without
the prior written consent of the Holders (which consent
shall not be unreasonably withheld) of not less than
sixty-six and two-thirds percent (66 2/3%) of the
Registrable Securities then held by Holders, enter into
any agreement with any owner or prospective owner of any
securities of the Company that would allow such owner or
prospective owner to include such securities in any
registration filed under this Article 2 if such inclusion
would adversely affect the rights of any Holder.
2.11 Termination of Registration Rights. The registration
----------------------------------
rights granted pursuant to this Article 2 shall terminate
as to each Holder at such time as (a) all Registrable
Securities can be sold within a given three (3) month
period without compliance with the registration
requirements of the Securities Act pursuant to Rule 144
supported by a written opinion of legal counsel for the
Company, which opinion shall be reasonably satisfactory
in form and substance to legal counsel for such Holders,
and (b) all accrued interest and principal under the
Company Credit Facility and the Gargiulo Credit Facility
has been repaid in full or converted into Common Stock of
the Company (and such Common Stock can be sold as
provided in (a) above).
2.12 "Market Stand-off" Agreement. Each Holder hereby
---------------------------
agrees that, to the extent requested by the Company and
an underwriter of a sale of Common Stock (or other
securities) of the Company for the account of the Company
and not for the account of a security holder or holders
exercising their respective demand registration rights,
it shall not sell or otherwise transfer or dispose of
(other than to transferees who agree to be similarly
bound) any Registrable Securities during the ninety (90)
day period following the effective date of a registration
statement of the Company filed under the Securities Act;
provided, however, that all officers and directors of the
Company, all Other Selling Stockholders and all other
Persons with registration rights (whether or not pursuant
to this Agreement) shall enter into similar agreements.
To enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the
Registrable Securities of each Holder (and the shares or
securities of every other Person subject to the foregoing
restriction) until the end of such ninety (90) day
period.
ARTICLE 3
Anti-Dilution Rights and Limitations on Owner
---------------------------------------------
3.1 Anti-Dilution Rights. If, at any time after the
--------------------
Effective Date, Company agrees to sell shares of its
Common Stock or other Voting Stock ("Company
-18-
<PAGE> 22
Securities") in a private or public offering (other than
Company Securities issued pursuant to the Company's stock
option plans), Holder shall have the right, but not the
obligation, to acquire all or any portion of the Company
Securities sufficient for Holder to maintain, after the
offering, the same percentage of ownership of issued and
outstanding Company Securities that Holder possessed
immediately prior to the offering (the "Pre-Offering
Percentage"). With respect to the issuance of Company
Securities pursuant to the Company's stock option plans,
Holder shall have a right to maintain its percentage
ownership of issued and outstanding Company Securities by
making open market purchases as provided in Section 3.5
hereof.
3.2 Private Offering. With respect to a private
----------------
offering, other than pursuant to a Company stock option
plan, Company shall, within five (5) business days after
the execution of any agreement entered into in connection
with such private offering, notify Holder in writing of
the proposed offering and provide Holder with copies of
all related documentation, including, for example, any
letter of intent and the final contract. Holder shall
have twenty (20) business days from the date of receipt
of Company's notice in which to advise Company whether
Holder elects to exercise its rights under Section 3.1
hereof. If Holder does not respond, or if Holder
indicates that it will not exercise its rights, Holder
shall be considered irrevocably to have waived its rights
under Section 3.1 hereof with respect to such specific
private offering. If Holder timely advises Company that
Holder will exercise its rights under Section 3.1 hereof,
Holder shall have the right to acquire all or any portion
of the necessary amount of the Company Securities to
maintain Holder's Pre-Offering Percentage at the price or
value of the consideration specified in the private
offering agreement entered into between Company and the
purchaser. Closing shall be in accordance with the terms
of the private offering agreement, and Holder shall make
such investment representations to Company and shall
provide Company with such other documentation at closing
as is reasonably required by Company to comply with
applicable securities laws.
3.3 Public Offering. With respect to a public offering,
---------------
Company shall notify Holder no later than five (5)
business days after Company has entered into a letter of
intent with its underwriters, and shall provide Holder
with a copy of the letter of intent. Holder shall have
twenty (20) business days from the date of receipt of
Company's notice in which to advise Company whether
Holder elects to exercise its rights under Section 3.1
hereof. If Holder does not respond or if Holder indicates
that it will not exercise its rights, Holder shall be
considered irrevocably to have waived its rights under
Section 3.1 hereof with respect to the public offering.
If Holder timely advises Company that Holder desires to
retain its rights under Section 3.1 hereof, then, when
Company files a Registration Statement containing a
Preliminary Prospectus with the Commission, Company shall
provide Holder with copies of the Preliminary
-19-
<PAGE> 23
Prospectus and all subsequent amendments. Holder shall
have twenty (20) business days from its receipt of the
Preliminary Prospectus in which to exercise its rights
under Section 3.1 hereof by making an offer to acquire all
or any portion of the necessary amount of Company
Securities to maintain Holder's Pre-Offering Percentage
based on the price, less all Selling Expenses, and the
other terms contained in the final Prospectus. No such
offer to buy shall be accepted prior to the time that the
Registration Statement becomes effective. The Registration
Statement shall indicate that Holder has anti-dilution
rights to purchase Company Securities on the terms offered
to the public.
3.4 Limitations. Notwithstanding the preceding
-----------
provisions of this Article 3, Company shall not be
required to issue any fractional shares as a result of
Holder's exercise of its rights under Section 3.1 hereof.
Company shall not be required to transfer any Company
Securities to Holder under this Article 3 if to do so
would result in the violation of any applicable law, rule
or regulation.
3.5 Open Market Purchases to Maintain Ownership Percentage.
------------------------------------------------------
Notwithstanding any other provision hereof, at any time
after the Effective Date, Holder may make such open
market purchases of Company Securities as are necessary
to maintain Holder's percentage of ownership of issued
and outstanding Company Securities at the Effective Date
Percentage or to increase its percentage of ownership of
issued and outstanding Company Securities to the
Effective Date Percentage. With respect to the issuance
of Company Securities pursuant to a Company stock option
plan or any warrant, conversion right or other option,
Company shall notify Holder no later than ten (10)
calendar days after the end of each calendar quarter and
within ten (10) calendar days of the record date for a
shareholder meeting and for dividend payments for Company
Securities of the number of shares and issuance price of
Company Securities issued pursuant to Company's stock
option plans or any warrant, conversion right or other
option subsequent to the last notice given pursuant to
this Section 3.5 so as to enable Holder to make open
market purchases of Company Securities as permitted under
this Section 3.5.
3.6 Limitations on Holder's Ownership. Except for
---------------------------------
purchases of Company Securities made in accordance with
this Article 3 or the Stock Purchase Agreement, during
the term of this Agreement, Holder shall not directly or
indirectly acquire any Company Securities except as
follows:
(a) On and after March 31, 1996 until September
30, 1998, Holder shall not increase or
further increase its ownership of issued and
outstanding Company Securities above the
Effective Date Percentage, except through one
(1) or more of the following:
-20-
<PAGE> 24
(i) Conversion of principal and/or interest under
the Company Credit Facility or the Gargiulo
Credit Facility into shares of Common Stock;
(ii) Issuance of Company Securities in an asset
sale by Holder to Company; and
(iii) A tender offer by Holder to increase its
ownership to seventy percent (70%) or more of
the issued and outstanding Company Securities
at a price approved by the disinterested
Directors of Company and based upon a
fairness opinion delivered to the Board of
Directors of the Company by an investment
banking firm; provided, however, that, if
Holder makes a tender offer to increase its
ownership to more than eighty percent (80%)
of the issued and outstanding Company
Securities, such tender offer must be for one
hundred percent (100%) of the publicly traded
Company Securities.
(b) After September 30, 1998, Holder may increase its
ownership of Company Securities through open
market purchases or otherwise.
(c) If, at any time after the Effective Date, Holder
shall elect to increase its percentage of
ownership of issued and outstanding Company
Securities above the Effective Date Percentage as
permitted by paragraph (a) above (such increased
percentage hereafter being the "New Percentage
Ownership"), then thereafter Holder may make such
open market purchases of Company Securities as are
necessary to maintain such New Percentage
Ownership or to increase its percentage of
ownership of issued and outstanding Company
Securities to such New Percentage Ownership.
(d) Holder shall not be required to dispose of any
Company Securities if Holder's percentage
ownership of Company Securities is increased as a
result of any recapitalization by Company or any
other action taken by Company.
3.7 Limitations on Holder's Resale of Company Securities.
----------------------------------------------------
Holder shall not directly or indirectly sell any Company
Securities (other than to an Affiliate of Holder) except
as follows:
(a) On and after March 31, 1997 until September 30,
1998, Holder may sell Company Securities (i) as
part of a joint venture, merger or sale of all or
substantially all of its current Crop Protection
business unit, as such
-21-
<PAGE> 25
business may be subsequently renamed or
reorganized, or (ii) pursuant to a tender offer by
a third party to the shareholders of Company.
(b) After September 30, 1998, in addition to the
rights to sell Company Securities set forth in
paragraph (a) above, Holder may sell Company
Securities (i) in a registered public offering
pursuant to the registration rights granted to
Holder under this Agreement, (ii) through sales
pursuant to Rule 144 under the Securities Act,
(iii) through sales of not more than ten percent
(10%) of the total issued and outstanding Company
Securities to a Non-Financial Purchaser, or (iv)
through sales to a Financial Purchaser.
(c) After September 30, 1999, in addition to the
rights to sell Company Securities as set forth in
paragraphs (a) and (b) above, Holder may sell
Company Securities through a private sale of
thirty-five percent (35%) or more of the total
issued and outstanding Company Securities to a
Non-Financial Purchaser under circumstances where
such third party assumes the applicable and
proportionate rights and obligations of Holder
under this Agreement and the other Transaction
Agreements.
(d) Notwithstanding the foregoing, at any time after
the Effective Date, Holder may sell Company
Securities issued to Holder upon conversion by
Holder of principal or accrued interest under
either of the Credit Facilities after the
occurrence of an Event of Default under either of
such Credit Facilities.
ARTICLE 4
Company and Calgene Corporate Governance
----------------------------------------
4.1 Composition of the Board of Directors and Calgene
-------------------------------------------------
Board. The number of Directors comprising both the
-----
Board of Directors and the Calgene Board and the manner
of nominating the members thereof shall be as follows:
(a) The number of Directors comprising the Board of
Directors shall initially be fixed at nine (9)
Directors. The parties agree that the manner of
nominating, and the governance provisions relating
to, the Board of Directors and the Calgene Board
shall be identical, and that the provisions of
this Section 4.1 set forth below and of Sections
4.3(c) and 4.3(d) hereof shall be deemed to apply
equally to the Calgene Board and Calgene
Directors. Accordingly, when applied to the
Calgene Board, the term "Director" shall be deemed
to mean "Calgene Director", the term "Company",
whether used alone or as a modifier, shall be
deemed to
-22-
<PAGE> 26
mean "Calgene", and the term "Board of Directors"
shall be deemed to mean "Calgene Board".
(b) Until changed in accordance with this Agreement,
the Board of Directors shall be comprised of nine
(9) Directors, and the Company shall nominate for
election as Directors: (i) one (1) Company
Management Director, (ii) three (3) Company
Directors, and (iii) five (5) Directors designated
by Monsanto, at least one (1) of which shall be an
Independent Director.
(c) [This section intentionally left blank]
(d) At any time that Monsanto's Percentage Interest is
at least seventy percent (70%), (i) the Company
shall nominate: (i) six (6) Directors designated
by Monsanto, which shall consist of the one (1)
Company Management Director and five (5) other
Monsanto Directors (including at least one (1)
Independent Director) and (ii) three (3)
Independent Directors. At such time as Monsanto's
Percentage Interest is at least ninety-nine
percent (99%), the Company shall nominate nine (9)
Directors designated by Monsanto.
(e) Notwithstanding anything in the foregoing
paragraphs (b) and (d) to the contrary, (i) at any
time Monsanto's Percentage Interest is less than
forty percent (40%) but at least twenty percent
(20%), the Company shall nominate three (3)
Directors designated by Monsanto, (ii) at any time
Monsanto's Percentage Interest is less than twenty
percent (20%) but at least ten percent (10%), the
Company shall nominate two (2) Directors
designated by Monsanto and (iii) at any time
Monsanto's Percentage Interest is less than ten
percent (10%) but at least five percent (5%), the
Company shall nominate one (1) Director designated
by Monsanto. If, at any time, Monsanto's
Percentage Interest is less than five percent
(5%), the Company shall not be obligated to
nominate any Director designated by Monsanto. At
any such time, all other Directors, other than the
Company Management Directors, shall be nominated
by the Company.
(f) The Independent Directors to be nominated by the
Company from time to time shall be nominated by
action of a majority of Company Directors then in
office. The Company Directors shall consult with
the other Independent Directors as to the
nomination of any Company Director, and in the
event a majority of the Company Directors are
unable to agree upon any Company Director nominee,
then the majority of all the Independent Directors
shall nominate such nominee. In the event that no
Company Directors are in office at the time of any
-23-
<PAGE> 27
nomination of a Company Director, such Company
Directors shall be nominated by a majority of the
Independent Directors then in office; provided,
however, that the holders of a majority of the
outstanding Voting Stock held by Unaffiliated
Equity Holders shall be entitled to nominate and
elect Company Directors in lieu of any individuals
so nominated to be such Company Directors by a
majority of the Independent Directors.
(g) The Company and Monsanto, respectively, shall have
the right to nominate any replacement for a
Director nominated in accordance with this Section
4.1 by the Company or Monsanto, respectively, upon
the death, resignation, retirement,
disqualification or removal from office for cause
of such Director. Such replacement for any
Independent Director shall also be an Independent
Director unless, in the case of a replacement of a
Monsanto Director, the Monsanto Directors include
more than the required number of Independent
Directors. The Board of Directors shall elect
each person so nominated by Monsanto or the
Company pursuant to this paragraph (g). In
addition, the Board of Directors shall nominate
the Company's Chief Executive Officer to replace
such officer's predecessor in office as a Company
Management Director.
(h) In the event that the number of Monsanto Directors
on the Board of Directors differs from the number
that Monsanto has the right (and wishes) to
designate for nomination pursuant to this Section
4.1, (i) if the number of Monsanto Directors
exceeds such number, Monsanto shall promptly take
all appropriate action to cause to resign that
number of Monsanto Directors as is required to
make the remaining number of such Monsanto
Directors conform to this Section 4.1 or (ii) if
the number of Monsanto Directors otherwise is less
than such number, the Company shall promptly take
all necessary action to create sufficient
vacancies on the Board of Directors to permit
Monsanto to designate the full number of Monsanto
Directors which it is entitled (and wishes) to
nominate pursuant to this Section 4.1 (such action
to include seeking the resignation or removal of
Directors or, at the request of Monsanto, calling
a special meeting of the stockholders of the
Company for the purpose of removing Directors to
create such vacancies to the extent permitted by
applicable law). Upon the creation of any vacancy
pursuant to the preceding sentence, Monsanto shall
nominate the person to fill such vacancy in
accordance with this Section 4.1 and the Board of
Directors shall elect each person so nominated.
Notwithstanding the foregoing, at each annual
meeting of the stockholders of the Company, the
Company shall nominate such number of Directors as
Monsanto is otherwise entitled to designate under
this Section 4.1.
-24-
<PAGE> 28
(i) Notwithstanding anything herein to the contrary,
no individual who is an officer, director,
employee, agent, partner or principal stockholder
of any competitor of the Company or any of its
Affiliates (other than Monsanto and its
Affiliates) or any competitor of Monsanto or any
of its Affiliates (other than the Company) shall
serve as a Director without the unanimous consent
of the Board of Directors.
(j) In the event that Monsanto desires to remove any
Monsanto Director with or without cause and
Monsanto is unable to procure the resignation of
such Monsanto Director, then, upon the request of
Monsanto, the Board of Directors shall promptly
call a special meeting of stockholders of the
Corporation for purposes of removing such Monsanto
Director. In the event that the Company desires to
remove any Company Director with or without cause
and the Company is unable to procure the
resignation of such Company Director, then, upon
the request of a majority of all of the
Independent Directors then in office, the Board of
Directors shall promptly call a special meeting of
stockholders of the Company for purposes of
removing such Company Director. In the event that
the Chief Executive Officer's employment with the
Company is terminated for any reason, then upon
the request of either Monsanto or a majority of
all of the Independent Directors then in office,
the Board of Directors shall promptly call a
special meeting of stockholders of the Corporation
for the purpose of removing such person as a
Company Management Director.
(k) Notwithstanding anything to the contrary herein,
the Board of Directors, by unanimous action of all
members of the Board of Directors, may increase
the number of directors comprising the Board of
Directors and may elect, or nominate for election,
the director(s) to fill the vacancy or vacancies
created by such increase.
4.2 Solicitation and Voting of Shares.
---------------------------------
(a) The Company shall use its best efforts to solicit
from the stockholders of the Company eligible to
vote for the election of Directors proxies in
favor of the Company Management Directors and the
nominees designated in accordance with Section 4.1
hereof or the removal of any Director pursuant to
Section 4.1(h) or 4.1(j) hereof.
(b) In any election of Directors or any meeting of the
stockholders of the Company called expressly for
the removal of Directors, so long as the Board of
Directors includes (and will include after any
such removal) the number of Monsanto Directors
contemplated by Section 4.1 hereof and so long as
such meeting is properly called and Monsanto is
-25-
<PAGE> 29
properly notified in accordance with the Company's
By-laws and Certificate of Incorporation, Monsanto
and its Affiliates shall attend such meeting for
purposes of establishing a quorum and shall vote
all their shares of Voting Stock (i) in favor of
any nominee or Director designated in accordance
with Section 4.1 hereof, (ii) in favor of removal
of any Director as contemplated by Section 4.1(h)
or 4.1(j) hereof, and (iii) otherwise against the
removal of any Director designated in accordance
with Section 4.1 hereof (other than in cases of
removal of a Director for cause); provided,
however, that, if Monsanto and its Affiliates
elect to cumulate their votes in accordance with
the Company's By-laws and Certificate of
Incorporation, then, in any vote electing Monsanto
Directors, Monsanto and its Affiliates may cast
all of their votes in favor of one (1) or more of
the Monsanto Directors designated by Monsanto and
in any vote with respect to the removal of a
Monsanto Director, Monsanto and its Affiliates may
cast all or any portion of their votes either in
favor or against the removal of any Monsanto
Director unless a Monsanto Director is otherwise
required to be removed in accordance with Section
4.1(h) hereof. In any other matter submitted to a
vote of the stockholders of the Company, Monsanto
and its Affiliates may vote any or all of their
shares in their sole discretion.
(c) Monsanto agrees that it will, and will cause any
of its Subsidiaries (other than the Company and
its Subsidiaries) to, take all action as a
stockholder of the Company or as is otherwise
reasonably within its control, as necessary to
effect the provisions of this Agreement,
including, without limitation, voting all shares
of Voting Stock in favor of all persons nominated
in accordance with Section 4.1 hereof; provided,
however, that, if Monsanto cannot so take actions
to give effect to all of the provisions of this
Agreement, it may first take actions to ensure
that it receives all of its benefits hereunder and
then, to the extent possible, to give effect to
the provisions in favor of the Company.
4.3 Committees.
----------
(a) The Board of Directors shall establish, empower
and maintain the committees of the Board of
Directors contemplated by this Section 4.3.
(b) The following committees shall be established,
empowered and maintained by the Board of Directors
at all times during the term of this Agreement:
(i) an Audit Committee, consisting of at least
three (3) of the Company's Independent
Directors, which committee shall be
-26-
<PAGE> 30
authorized and empowered to cause an audit
to be performed of the Company and each of
its Subsidiaries;
(ii) [This section intentionally left blank]
(iii) a Compensation Committee, responsible,
among other things, for recommending to
the Board of Directors, for approval by a
majority of the Board of Directors, (a)
the adoption and amendment of all employee
benefit plans and arrangements, (b) the
engagement of, terms of any employment
agreements and arrangements with, and
termination of, all persons designated by
the Company as "officers" for purposes of
Section 16 of the Exchange Act ("Section
16 Officers") and (c) the policies,
limitations and procedures under which the
Stock Option Plan Administration Committee
shall operate; and
(iv) such other committees as the Board of
Directors deems necessary or desirable;
provided, however, that such committees
are established in compliance with Section
4.4(a)(vi) hereof, if applicable.
(c) Except as otherwise provided in Section 4.3(b)
hereof or as agreed by a majority of the Monsanto
Management Directors, the number of Monsanto
Directors on each committee of the Board of
Directors shall be the same proportion (but not
less than one (1)) of the total membership of such
committee as the number of Monsanto Directors, as
the case may be, is of the entire Board of
Directors. Except as otherwise provided in
Section 4.3(b) hereof, the Monsanto Directors on
each committee of the Board of Directors shall be
determined by a majority of the Monsanto
Management Directors.
(d) No action by any committee of the Board of
Directors shall be valid unless taken by unanimous
written consent as provided in the Company's
by-laws or taken at a meeting for which adequate
notice has been duly given or waived by the
members of such committee. Such notice shall
include a description of the general nature of the
business to be transacted at the meeting, and no
other business may be transacted at such meeting
unless all members of the committee are present
and consent to the consideration of such other
business. Any committee member unable to
participate in person at any meeting shall be
given the opportunity to participate by telephone.
The Board of Directors or the remaining committee
members shall designate an Independent Director or
Company Management Director to replace any absent
or disqualified Independent Director member or
Company Management
-27-
<PAGE> 31
Director member, respectively, of any committee and
a majority of the Monsanto Management Directors
shall designate a Monsanto Director to replace any
absent or disqualified Monsanto Director member of
any committee. Each of the committees established
by the Board of Directors pursuant to this Section
4.3 shall establish such other rules and procedures
for its operation and governance (consistent with
the terms of this Agreement) as it shall see fit
and may seek such consultation and advice as to
matters within its purview as it shall require.
4.4 Approval Required for Certain Actions.
-------------------------------------
(a) On and after the Effective Date and until the
earlier of a Trigger Event or such date on which
Monsanto's Percentage Interest is less than
twenty-five (25%), a majority of the Board,
including at least one (1) Company Director and
one (1) Monsanto Management Director, shall be
required to approve any of the following:
(i) the entry by the Company or any of its
Affiliates into any merger or
consolidation or the acquisition by the
Company or any of its Affiliates of any
business or assets that would constitute a
Substantial Part of the Company
(determined on a consolidated basis)
whether such acquisition be by merger or
consolidation or the purchase of stock or
assets or otherwise;
(ii) the sale, pledge, grant of security
interest in, transfer, retirement or other
disposal of (A) a Substantial Part of the
Company (determined on a consolidated
basis), except pursuant to a security
interest granted in connection with
borrowings permitted under subsection (iv)
below or (B) the pledge or granting of a
security interest in any intangible
property set forth in Exhibit B
---------
attached to the disclosure letter from
Monsanto to Calgene dated June 27, 1995
(the "Monsanto Disclosure Letter");
(iii) any dividend by or return of capital by
the Company or Gargiulo (other than such
distributions by Gargiulo to the Company
as are necessary for the Company to timely
perform its obligations under Sections
1.02 and 5.02(c) of the Gargiulo Credit
Facility);
(iv) any incurrence or assumption, in the
aggregate, by the Company, any of its
Affiliates or any combination thereof, of
any indebtedness for borrowed money at any
time outstanding exceeding in the
aggregate (determined on a consolidated
basis) the greater of (i) fifteen million
dollars ($15,000,000), increasing by five
million dollars ($5,000,000) on each July
1 commencing July
-28-
<PAGE> 32
1, 1996, plus amounts secured by inventory
and/or receivables for seasonal working
capital lines and indebtedness incurred to
acquire property, plant or equipment and
secured by the acquired asset, minus amounts
-----
outstanding under the Company Credit
Facility, or (ii) the amounts set forth in
the Company's Operating Plan (hereinafter
defined), provided that loans under the
Gargiulo Credit Facility shall not be
counted in this limitation;
(v) the repurchase or redemption of any Equity
Securities of the Company, other than from
employees upon termination of employment
or service;
(vi) the establishment of any new committees of
the Board (or the Calgene Board) or new or
revised delegation(s) of Board (or the
Calgene Board) authority to any Board (or
Calgene Board) committee or changes or
revisions to general delegations of
authority to officers or other Persons for
categories of expenditures;
(vii) the adoption of or amendment to any
benefit or incentive plans of the Company
or any of its Affiliates which would
increase the annual cost thereof by more
than fifteen percent (15%) from the prior
fiscal year or any adoption of, or
amendment to, any stock option plan;
(viii) the election, appointment or removal of
the Chief Executive Officer, Chief
Operating Officer or Chief Financial
Officer of the Company and Calgene and
their successors and the establishment of
their annual or long term compensation
level and benefits and basis for awards
(other than agreements in effect on the
Effective Date); provided, however, that
Monsanto shall have the right to select
the Chief Technical Officer of the Company
and a controller reporting to the Chief
Financial Officer of the Company;
(ix) approval of the annual operating plan
("Operating Plan") and long-term strategic
plan ("Strategic Plan") of the Company and
its Affiliates, as well as the annual
operating plan and long-term strategic
plan for the Gargiulo Business, to be
submitted to the Board annually for
approval, and any material changes
thereto;
(x) any transaction between the Company (and
its Affiliates), on the one hand, and its
(their) directors, officers or employees,
on the other hand, which is not in the
normal course of business;
-29-
<PAGE> 33
(xi) any modification of the Transaction
Agreements;
(xii) any amendment of the By-laws or
Certificate of Incorporation of the
Company, Calgene or Gargiulo by the
respective Boards of Directors thereof;
(xiii) the issuance of any warrants for the
purchase of Equity Securities or the
issuance of additional Equity Securities
(other than warrants for the purchase of
Equity Securities) in excess of four
million (4,000,000) shares of Common Stock
in any two (2) year period to a third
party, other than pursuant to plans
referred to in subsection (vii) above;
(xiv) the sale or licensing by the Company or
any of its Affiliates of (A) any
intangible property set forth in Exhibit B
---------
attached to the Monsanto Disclosure
Letter or (B) any other intangible
property for consideration (other than
royalties contingent on future sales)
exceeding five million dollars
($5,000,000) in the aggregate (determined
on a consolidated basis) per transaction
or per series of related transactions;
(xv) new fixed capital investments, capital
leases or noncancellable operating leases
by the Company and its Affiliates having
annual payments in the aggregate
(determined on a consolidated basis)
exceeding the aggregate amount set forth
in the Operating Plan;
(xvi) [This section intentionally left blank]
(xvii) any press release which mentions or
directly or indirectly refers to Monsanto,
except as required by law and where Board
approval cannot be obtained in a timely
manner;
(xviii) the initiation, settlement or termination
of any suit or proceeding concerning
intellectual property, any other matter
which could have an adverse public affairs
effect upon Monsanto or the filing of any
insolvency or bankruptcy proceeding by or
on behalf of the Company or any of its
Affiliates; or
(xix) the removal or election of the directors
of Gargiulo.
(b) After a Trigger Event and until the earlier of (i)
March 31, 1999 or (ii) Monsanto's Percentage
Interest is at least seventy percent (70%), a
majority of the Board, including at least two (2)
Company Directors, shall be required to approve
any of the following:
-30-
<PAGE> 34
(i) the matters set forth in subsections (i),
(ii), (vi), (viii), (ix) and (xi) of
paragraph (a) above; or
(ii) any transaction between the Company (and
its Affiliates) and Monsanto or any
Affiliate of Monsanto.
(c) From and after the occurrence of both (i) a
Trigger Event and (ii) March 31, 1999, and until
Monsanto's Percentage Interest is at least
ninety-nine percent (99%), neither Monsanto nor
any of its Affiliates shall enter into any
transaction with the Company or any of its
Affiliates without the approval of at least two
(2) Company Directors.
4.5 Enforcement of this Agreement. The Independent
-----------------------------
Directors, acting by unanimous consent, shall have full
and complete authority on behalf of the Company to
enforce the terms of this Agreement.
4.6 Certificate of Incorporation and By-laws. The Company
----------------------------------------
and Monsanto shall take or cause to be taken all lawful
action necessary to ensure at all times that the Company's
and Calgene's Certificate of Incorporation and By-laws are
not at any time inconsistent with the provisions of this
Agreement. Not later than the Effective Date, the Board of
Directors shall amend the Company's By-laws and the
Calgene Board shall amend Calgene's By-laws to reflect the
provisions of this Agreement.
4.7 Advisors. The Independent Directors shall be
--------
entitled to retain, at the cost and expense of the
Company, the services of an investment banking firm of
national reputation of their choice and one (1) law firm
of their choice to advise them in their capacity as
Independent Directors with respect to any matter on which
the Independent Directors are required or permitted to
act hereunder.
4.8 Injunctive Relief. In the event of a breach of the
-----------------
provisions of this Article 4, a party hereto entitled to
rights under this Article 4 will suffer irreparable harm
and the total amount of monetary damages will be
impossible to calculate and will therefore be an
inadequate remedy. Accordingly, in such event, such party
shall be entitled to temporary and permanent injunctive
relief against the Company and any other breaching party
and to any other rights and remedies to which such party
may be entitled to at law or in equity.
-31-
<PAGE> 35
ARTICLE 5
Governance of Gargiulo
----------------------
[This Article intentionally left blank.]
ARTICLE 6
Miscellaneous
-------------
6.1 Governing Law. This Agreement shall be governed in
-------------
all respects by the laws of the State of Delaware
(exclusive of such state's choice of laws rules).
6.2 Successors and Assigns. Except as otherwise provided
----------------------
herein, the provisions hereof shall inure to the benefit
of, and be binding upon, the successors, assigns, heirs,
executors, and administrators of the parties hereto.
6.3 Entire Agreement; Amendment. The Company and
---------------------------
Monsanto hereby agree that, as of the date of this
Agreement: (i) the Prior Stockholders Agreement is
hereby amended in its entirety by this Agreement,
(ii) the provisions of the Prior Stockholders Agreement
shall no longer be of any force or effect, (iii) the
Company and Monsanto shall be bound by the terms of this
Agreement, and (iv) this Agreement and the other
documents delivered pursuant hereto constitute the
complete, exclusive and final understanding and agreement
between the parties with regard to the subjects hereof
and thereof. Except as specifically set forth herein, any
term of Section 2 or 3 hereof may be waived only with the
prior written consent of the Company and the Holders of
at least sixty-six and two-thirds percent (66 2/3%) of
the outstanding shares of the Registrable Securities.
Any amendment or waiver effected in accordance with this
Section 6.3 shall be binding upon each Holder of the
Registrable Securities (including securities into which
such Registrable Securities have been converted)
outstanding at the time, each future Holder of all such
securities, and the Company. Any provision of this
Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and signed, in the case
of an amendment, by the Company and Monsanto, or in the
case of a waiver, by the party against whom the waiver is
to be effective; provided that no such amendment or
waiver shall be effective without the approval of all of
the Independent Directors.
6.4 Notices. Any notice required or permitted to be
-------
given under this Agreement shall be in writing, and shall
be deemed sufficiently given when delivered in
-32-
<PAGE> 36
person or transmitted by telegram or telecopier
(confirmed by mail), addressed as follows:
If to Monsanto: Monsanto Company
800 North Lindbergh Boulevard
St. Louis, Missouri 63167
Attention: Assistant Secretary
Telecopy Number: 314-694-2574
If to any other Holder, at such address and telecopy
number as such Holder shall have furnished the Company in
writing.
If to Company: Calgene, Inc.
1920 Fifth Street
Davis, California 95616
Attention: Chairman and Chief Executive
Officer
Telecopy Number:916-753-1510
or to such other address as may be specified from
time to time in a notice given by such party.
The parties agree to acknowledge in writing the
receipt of any such notice delivered in person.
6.5 Delays or Omissions. No delay or omission to
-------------------
exercise any right, power or remedy accruing to any
Holder of any Registrable Securities, upon any breach or
default of the Company under this Agreement, shall impair
any such right, power or remedy of such Holder nor shall
it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any
similar breach or default thereafter occurring. Any
waiver, permit, consent or approval of any kind or
character on the part of any party or any waiver on the
part of any party of any provisions or conditions of this
Agreement must be made in writing and shall be effective
only to the extent specifically set forth in such
writing. All remedies, either under this Agreement, at
law, in equity or otherwise afforded to any party, shall
be cumulative and not alternative.
6.6 Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which shall be an
original, but all of which together shall constitute one
instrument.
6.7 Severability. In the event that any provision of
------------
this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and
effect without said
-33-
<PAGE> 37
provision; provided, however, that no such severability
shall be effective if it materially changes the economic
benefit of this Agreement to any party.
6.8 Stock Legends. Subject to Section 2.8(d) hereof,
-------------
certificates representing Restricted Securities (other
than Restricted Securities issued to Monsanto in
connection with the conversion of principal and/or
accrued interest under the Company Credit Facility or the
Gargiulo Credit Facility upon the occurrence of an Event
of Default under either such Credit Facility) issued to
Monsanto pursuant to the Transaction Agreements and the
Stock Purchase Agreement shall bear the following legend:
"The securities represented by this certificate
are subject to certain resale restrictions and
entitled to the benefits set forth in a
Stockholders Agreement dated March 31, 1996, as
amended and restated on November 12, 1996, between
Calgene, Inc., a Delaware corporation (formerly
known as Calgene II, Inc.), and Monsanto Company,
a Delaware corporation (the "Agreement") . A copy
of the Agreement and all amendments thereto are on
file in the office of the Secretary of the
Company."
6.9 [This section intentionally left blank.]
6.10 Audits, Consultants and Inspections. Monsanto (using
-----------------------------------
Monsanto's internal and/or external auditors or any other
Person appointed by Monsanto to whom the Company does not
reasonably object) shall have the right (i) to audit the
books and records, other financial information and
business practices and operations of the Company and its
Affiliates, and (ii) to discuss the business practices
and operations, affairs, finances and accounts of the
Company and its Affiliates with the officers of the
Company and its Affiliates and the independent public
accountants who review or audit the Company's financial
statements, all at such reasonable times and as often as
may reasonably be requested. The Company shall also
permit inspection of its (and its Affiliates')
properties, books and records by Monsanto (using the
Persons identified above) during normal business hours or
at other reasonable times. The scope of all such audits,
discussions and inspections shall be determined by
Monsanto in its sole discretion. Any authorized
representative of Monsanto who or which is not employed
by Monsanto (i) shall be required to execute a
confidentiality agreement in a form approved by the Board
of Directors (which approval shall not be unreasonably
withheld or delayed) and (ii) may not be employed by or
affiliated with a competitor of the Company, as
reasonably determined by the Board of Directors;
provided, however, that an independent certified public
accounting firm shall not be deemed to be employed by or
affiliated with a competitor of the Company even if such
firm provides services to a competitor of the Company.
-34-
<PAGE> 38
6.11 No Third Party Beneficiaries. Nothing contained in
----------------------------
this Agreement, express or implied, is intended to or
shall confer upon anyone other than the parties hereto
(and their successors and assigns, including, without
limitation, subsequent Holders and purchasers under
Section 3.7(c)) any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
6.12 Sections and Articles. All sections and articles
---------------------
referred to herein are sections and articles of this
Agreement.
6.13 Headings. Headings as to the contents of particular
--------
articles and sections are for convenience only and are in
no way to be construed as part of this Agreement or as a
limitation of the scope of the particular articles or
sections to which they refer.
-35-
<PAGE> 39
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered as of the day and year first above
written.
CALGENE, INC.
By: ------------------------------
Lloyd M. Kunimoto
President
MONSANTO COMPANY
By: ------------------------------
Hendrik A. Verfaillie
Executive Vice President
-36-
<PAGE> 1
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
CALGENE, INC.
Pursuant to Section 242
of the Corporation Law
of the State of Delaware
--------------------------------
Calgene, Inc. (the "Corporation"), a corporation
organized and existing under and by virtue of the General
Corporation Law of the State of Delaware, does hereby certify as
follows:
At a meeting of the Board of Directors of the Corporation
held on September 20, 1996, a resolution was duly adopted,
pursuant to Section 242 of the General Corporation Law of the
State of Delaware, setting forth an amendment to the Certificate
of Incorporation of the Corporation and declaring said amendment
to be advisable. The stockholders of the Corporation duly
approved said proposed amendment in accordance with Sections 211
and 222 of the General Corporation Law of the State of Delaware
at a meeting of stockholders on November 12, 1996. The
resolution authorizing the amendment is as follows:
RESOLVED: That Article FIFTH of the Certificate of
--------
Incorporation of the Corporation be and hereby is amended as
follows:
1. Section A of Article FIFTH shall be amended as
follows:
(a) The following definitions shall be deleted:
"Gargiulo, G.P." and "Gargiulo, L.P."
(b) The definition of "Gargiulo" shall be amended to
read in its entirety as follows:
<PAGE> 2
"'Gargiulo' means Gargiulo, Inc.
formerly known as Tomato Investment
Associates, Inc."
(c) The definition of "Governance Agreement" shall be
amended and restated to read in its entirety as follows:
"'Governance Agreement' means the Amended and
Restated Stockholders Agreement dated as of
November --, 1996 by and between the Corporation
and Monsanto."
(d) The following sentence shall be added at the end
of the definition of "Independent Director":
"Without limiting the foregoing,
Roger H. Salquist shall qualify as
an Independent Director so long as
he continues to qualify under
clauses (iv) and (v) of such
definition. Roger H. Salquist
shall not fail to qualify under
clause (iv) above as a result of
his Change in Control Employment
Agreement dated July 19, 1995, as
modified, or Consulting Agreement
dated September 16, 1996 with the
Corporation. Any of the above
restrictions may be waived by
unanimous action of the Board of
Directors."
(e) The following definition shall be added:
"'Stock Purchase Agreement' means the Stock
Purchase Agreement dated as of September 27, 1996
between the Corporation and Monsanto."
(f) The definition of "Trigger Event" shall be amended
and restated to read in its entirety as follows:
"'Trigger Event' means the earliest
of (i) any time that Monsanto's
Percentage Interest is at least
fifty-five percent (55%), (ii) the
Corporation elects to convert
borrowings made from Monsanto into
Equity Securities and Monsanto's
Percentage Interest is at least
fifty percent (50%) after such
conversion, or (iii) the closing of
Monsanto's purchase of additional
shares of Common Stock pursuant to
the Stock Purchase Agreement."
(g) The definition of "Registrable Securities" shall
be amended and restated to read in its entirety as follows:
"'Registrable Securities' means
shares of Common Stock
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issued or issuable to Monsanto
pursuant to the Transaction
Agreements and the Prior
Stockholders Agreement (as defined
in the Governance Agreement) and
the Stock Purchase Agreement
whether owned by Monsanto or a
permitted transferee of Monsanto
and all such other securities of
the Corporation acquired by
Monsanto or any Affiliate of
Monsanto in accordance herewith."
2. Section C of Article FIFTH shall be amended and
restated to read in its entirety as follows:
"C. THE BOARD OF DIRECTORS; COMMITTEES
----------------------------------
During the term of the Governance Agreement (i) the
number of directors and the manner of nominating and removing
members thereof shall be set forth in Section C(1), below, and
(ii) the Board of Directors shall establish, empower, and
maintain committees as set forth in Section C(2), below.
1. Board of Directors. The number of Directors
------------------
and manner of nominating Directors shall be as follows:
(a) The number of Directors comprising the Board of
Directors shall initially be fixed at nine (9) Directors.
(b) Until changed in accordance with the Governance
Agreement, the Board of Directors shall be comprised of nine (9)
Directors, and the Corporation shall nominate for election as
Directors: (i) one (1) Corporation Management Director, (ii)
three (3) Corporation Directors, and (iii) five (5) Directors
designated by Monsanto, at least one (1) of which shall be an
Independent Director.
(c) [This section intentionally left blank]
(d) At any time that Monsanto's Percentage Interest is
at least seventy percent (70%), (i) the Corporation shall
nominate: (i) six (6) Directors designated by Monsanto, which
shall consist of the one (1) Corporation Management Director and
five (5) other Monsanto Directors (including at least one (1)
Independent Director) and (ii) three (3) Independent Directors.
At such time as Monsanto's Percentage Interest is at least
ninety-nine percent (99%), the Corporation shall nominate nine
(9) Directors designated by Monsanto.
(e) Notwithstanding anything in the foregoing
paragraphs (b) and (d) to the contrary, (i) at any time
Monsanto's Percentage Interest is less than forty percent (40%)
but at least twenty percent (20%), the Corporation shall nominate
three (3)
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Directors designated by Monsanto, (ii) at any time Monsanto's
Percentage Interest is less than twenty percent (20%) but at least
ten percent (10%), the Corporation shall nominate two (2)
Directors designated by Monsanto and (iii) at any time Monsanto's
Percentage Interest is less than ten percent (10%) but at least
five percent (5%), the Corporation shall nominate one (1) Director
designated by Monsanto. If, at any time, Monsanto's Percentage
Interest is less than five percent (5%), the Corporation shall not
be obligated to nominate any Director designated by Monsanto. At
any such time, all other Directors, other than the Corporation
Management Directors, shall be nominated by the Corporation.
(f) The Independent Directors to be nominated by the
Corporation from time to time shall be nominated by action of a
majority of Corporation Directors then in office. The
Corporation Directors shall consult with the other Independent
Directors as to the nomination of any Corporation Director, and
in the event a majority of the Corporation Directors are unable
to agree upon any Corporation Director nominee, then the majority
of all the Independent Directors shall nominate such nominee. In
the event that no Corporation Directors are in office at the time
of any nomination of a Corporation Director, such Corporation
Directors shall be nominated by a majority of the Independent
Directors then in office; provided, however, that the holders of
a majority of the outstanding Voting Stock held by Unaffiliated
Equity Holders shall be entitled to nominate and elect
Corporation Directors in lieu of any individuals so nominated to
be such Corporation Directors by a majority of the Independent
Directors.
(g) The Corporation and Monsanto, respectively, shall
have the right to nominate any replacement for a Director
nominated in accordance with this Section C(1) by the Corporation
or Monsanto, respectively, upon the death, resignation,
retirement, disqualification or removal from office for cause of
such Director. Such replacement for any Independent Director
shall also be an Independent Director unless, in the case of a
replacement of a Monsanto Director, the Monsanto Directors
include more than the required number of Independent Directors.
The Board of Directors shall elect each person so nominated by
Monsanto or the Corporation pursuant to this paragraph (g). In
addition, the Board of Directors shall nominate the Corporation's
Chief Executive Officer to replace such officer's predecessor in
office as a Corporation Management Director.
(h) In the event that the number of Monsanto Directors
on the Board of Directors differs from the number that Monsanto
has the right (and wishes) to designate for nomination pursuant
to this Section C(1), (i) if the number of Monsanto Directors
exceeds such number, Monsanto shall promptly take all appropriate
action to cause to resign that number of Monsanto Directors as is
required to make the remaining number of such Monsanto Directors
conform to this Section C(1) or (ii) if the number of Monsanto
Directors otherwise is less than such number, the Corporation
shall promptly take all necessary action to create sufficient
vacancies on
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<PAGE> 5
the Board of Directors to permit Monsanto to designate the full
number of Monsanto Directors which it is entitled (and wishes) to
nominate pursuant to this Section C(1) (such action to include
seeking the resignation or removal of Directors or, at the request
of Monsanto, calling a special meeting of the stockholders of the
Corporation for the purpose of removing Directors to create such
vacancies to the extent permitted by applicable law). Upon the
creation of any vacancy pursuant to the preceding sentence,
Monsanto shall nominate the person to fill such vacancy in
accordance with this Section C(1) and the Board of Directors shall
elect each person so nominated. Notwithstanding the foregoing, at
each annual meeting of the stockholders of the Corporation, the
Corporation shall nominate such number of Directors as Monsanto is
otherwise entitled to designate under this Section C(1).
(i) Notwithstanding anything herein to the contrary,
no individual who is an officer, director, employee, agent,
partner or principal stockholder of any competitor of the
Corporation or any of its Affiliates (other than Monsanto and its
Affiliates) or any competitor of Monsanto or any of its
Affiliates (other than the Corporation) shall serve as a Director
without the unanimous consent of the Board of Directors.
(j) In the event that Monsanto desires to remove any
Monsanto Director with or without cause and Monsanto is unable to
procure the resignation of such Monsanto Director, then, upon the
request of Monsanto, the Board of Directors shall promptly call a
special meeting of stockholders of the Corporation for purposes
of removing such Monsanto Director. In the event that the
Corporation desires to remove any Corporation Director with or
without cause and the Corporation is unable to procure the
resignation of such Corporation Director, then, upon the request
of a majority of all of the Independent Directors then in office,
the Board of Directors shall promptly call a special meeting of
stockholders of the Corporation for purposes of removing such
Corporation Director. In the event that the Chief Executive
Officer's employment with the Corporation is terminated for any
reason, then upon the request of either Monsanto or a majority of
all of the Independent Directors then in office, the Board of
Directors shall promptly call a special meeting of stockholders
of the Corporation for the purpose of removing such person as a
Corporation Management Director.
(k) Notwithstanding anything to the contrary herein,
the Board of Directors, by unanimous action of all members of the
Board of Directors, may increase the number of directors
comprising the Board of Directors and may elect, or nominate for
election, the director(s) to fill the vacancy or vacancies
created by such increase.
2. Committees.
----------
(a) The Board of Directors shall establish, empower
and maintain the committees of the Board of Directors
contemplated by this Section C(2).
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(b) The following committees shall be established,
empowered and maintained by the Board of Directors at all times
during the term of the Governance Agreement:
(i) an Audit Committee, consisting of at least
three (3) of the Corporation's Independent Directors, which
committee shall be authorized and empowered to cause an audit to
be performed of the Corporation and each of its Subsidiaries;
(ii) [This section intentionally left blank]
(iii) a Compensation Committee, responsible,
among other things, for recommending to the Board of Directors,
for approval by a majority of the Board of Directors, (a) the
adoption and amendment of all employee benefit plans and
arrangements, (b) the engagement of, terms of any employment
agreements and arrangements with, and termination of, all persons
designated by the Corporation as "officers" for purposes of
Section 16 of the Exchange Act ("Section 16 Officers"), and
(c) the policies, limitations and procedures under which the
Stock Option Plan Administration Committee shall operate; and
(iv) such other committees as the Board of
Directors deems necessary or desirable; provided, however, that
such committees are established in compliance with Section
D(a)(vi) below, if applicable.
(c) Except as otherwise provided in Section C(2)(b)
above or as agreed by a majority of the Monsanto Management
Directors, the number of Monsanto Directors on each committee of
the Board of Directors shall be the same proportion (but not less
than one (1)) of the total membership of such committee as the
number of Monsanto Directors, as the case may be, is of the
entire Board of Directors. Except as otherwise provided in
Section C(2)(b) above, the Monsanto Directors on each committee
of the Board of Directors shall be determined by a majority of
the Monsanto Management Directors.
(d) No action by any committee of the Board of
Directors shall be valid unless taken by unanimous written
consent as provided in the Corporation's By-laws or taken at a
meeting for which adequate notice has been duly given or waived
by the members of such committee. Such notice shall include a
description of the general nature of the business to be
transacted at the meeting, and no other business may be
transacted at such meeting unless all members of the committee
are present and consent to the consideration of such other
business. Any committee member unable to participate in person
at any meeting shall be given the opportunity to participate by
telephone. The Board of Directors or the remaining committee
members shall designate an Independent Director or Corporation
Management Director to replace any absent or disqualified
Independent Director member or
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<PAGE> 7
Corporation Management Director member, respectively, of any
committee and a majority of the Monsanto Management Directors
shall designate a Monsanto Director to replace any absent or
disqualified Monsanto Director member of any committee. Each of
the committees established by the Board of Directors pursuant to
this Section C(2) shall establish such other rules and procedures
for its operation and governance (consistent with the terms of the
Governance Agreement) as it shall see fit and may seek such
consultation and advice as to matters within its purview as it
shall require."
3. Section D of Article FIFTH shall be amended and
restated to read in its entirety as follows:
"D. APPROVAL REQUIRED FOR CERTAIN ACTIONS
-------------------------------------
(a) Until the earlier of a Trigger Event or such date
on which Monsanto's Percentage Interest is less than twenty-five
(25%), a majority of the Board, including at least one (1)
Corporation Director and one (1) Monsanto Management Director,
shall be required to approve any of the following:
(i) the entry by the Corporation or any of its
Affiliates into any merger or consolidation or the acquisition by
the Corporation or any of its Affiliates of any business or
assets that would constitute a Substantial Part of the
Corporation (determined on a consolidated basis) whether such
acquisition be by merger or consolidation or the purchase of
stock or assets or otherwise;
(ii) the sale, pledge, grant of security interest in,
transfer, retirement or other disposal of (A) a Substantial Part
of the Corporation (determined on a consolidated basis), except
pursuant to a security interest granted in connection with
borrowings permitted under subsection (iv) below or (B) the
pledge or granting of a security interest in any intangible
property set forth in Exhibit B attached to the Monsanto
---------
Disclosure Letter;
(iii) any dividend by or return of capital by the
Corporation or Gargiulo (other than such distributions by
Gargiulo to the Corporation as are necessary for the Corporation
to timely perform its obligations under Sections 1.02 and 5.02(c)
of the Gargiulo Credit Facility);
(iv) any incurrence or assumption, in the aggregate, by
the Corporation, any of its Affiliates or any combination
thereof, of any indebtedness for borrowed money at any time
outstanding exceeding in the aggregate (determined on a
consolidated basis) the greater of (i) fifteen million dollars
($15,000,000), increasing by five million dollars ($5,000,000) on
each July 1 commencing July 1, 1996, plus amounts secured by
inventory and/or receivables for seasonal working capital lines
and indebtedness incurred to acquire property, plant or equipment
and secured by the acquired asset,
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<PAGE> 8
minus amounts outstanding under the Corporation Credit Facility,
- -----
or (ii) the amounts set forth in the Corporation's Operating Plan,
provided that loans under the Gargiulo Credit Facility shall not
be counted in this limitation;
(v) the repurchase or redemption of any Equity
Securities of the Corporation, other than from employees upon
termination of employment or service;
(vi) the establishment of any new committees of the
Board or new or revised delegation(s) of Board authority to any
Board committee or changes or revisions to general delegations of
authority to officers or other Persons for categories of
expenditures;
(vii) the adoption of or amendment to any benefit or
incentive plans of the Corporation or any of its Affiliates which
would increase the annual cost thereof by more than fifteen
percent (15%) from the prior fiscal year or any adoption of, or
amendment to, any stock option plan;
(viii) the election, appointment or removal of the
Chief Executive Officer, Chief Operating Officer or Chief
Financial Officer of the Corporation and Calgene and their
successors and the establishment of their annual or long term
compensation level and benefits and basis for awards (other than
agreements in effect on the Effective Date); provided, however,
that Monsanto shall have the right to select the Chief Technical
Officer of the Corporation and a controller reporting to the
Chief Financial Officer of the Corporation;
(ix) approval of the annual operating plan ("Operating
Plan") and long-term strategic plan ("Strategic Plan") of the
Corporation and its Affiliates, as well as the annual operating
plan and long-term strategic plan for the Gargiulo Business, to
be submitted to the Board annually for approval, and any material
changes thereto;
(x) any transaction between the Corporation (and its
Affiliates), on the one hand, and its (their) directors, officers
or employees, on the other hand, which is not in the normal
course of business;
(xi) any modification of the Transaction Agreements;
(xii) any amendment of the By-laws or certificate of
incorporation of the Corporation, Calgene or Gargiulo by the
respective Boards of Directors thereof;
(xiii) the issuance of any warrants for the purchase of
Equity Securities or the issuance of additional Equity Securities
(other than warrants for the purchase of Equity Securities) in
excess of four million (4,000,000) shares of Common Stock in any
two (2)-year period to a third party, other than pursuant to plans
referred to in subsection (vii) above;
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(xiv) the sale or licensing by the Corporation or any of
its Affiliates of (A) any intangible property set forth in
Exhibit B attached to the Monsanto Disclosure Letter or (B)
- ---------
any other intangible property for consideration (other than
royalties contingent on future sales) exceeding five million
dollars ($5,000,000) in the aggregate (determined on a
consolidated basis) per transaction or per series of related
transactions;
(xv) new fixed capital investments, capital leases or
noncancellable operating leases by the Corporation and its
Affiliates having annual payments in the aggregate (determined on
a consolidated basis) exceeding the aggregate amount set forth in
the Operating Plan;
(xvi) [This section intentionally left blank]
(xvii) any press release which mentions or directly or
indirectly refers to Monsanto, except as required by law and where
Board approval cannot be obtained in a timely manner;
(xviii) the initiation, settlement or termination
of any suit or proceeding concerning intellectual property, any
other matter which could have an adverse public affairs effect
upon Monsanto or the filing of any insolvency or bankruptcy
proceeding by or on behalf of the Corporation or any of its
Affiliates; or
(xix) the removal or election of the directors of
Gargiulo.
(b) After a Trigger Event and until March 31, 1999 or
Monsanto's Percentage Interest is at least seventy percent (70%),
a majority of the Board, including at least two (2) Corporation
Directors, shall be required to approve any of the following:
(i) the matters set forth in subsections (i), (ii),
(vi), (viii), (ix) and (xi) of paragraph (a) above; or
(ii) any transaction between the Corporation (and its
Affiliates) and Monsanto or any Affiliate of Monsanto.
(c) From and after the occurrence of both (i) a
Trigger Event and (ii) March 31, 1999 and until Monsanto's
Percentage Interest is at least ninety-nine percent (99%),
neither Monsanto nor any of its Affiliates shall enter into any
transaction with the Corporation or any of its Affiliates without
the approval of at least two (2) Corporation Directors."
IN WITNESS WHEREOF, the Corporation has caused this
Amendment to be signed by its President on this --- day of
November, 1996.
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CALGENE, INC.
BY:
---------------------------------
Lloyd M. Kunimoto
President
10
