<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 14, 1996 (September
30, 1996)
Mycogen Corporation
-------------------
(Exact name of registrant as specified in its charter)
California 0-15881 95-3802654
---------- ------- ----------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
5501 Oberlin Drive, San Diego California, 92121
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(Address of principal executive offices)
Registrant's telephone number, including area code: 619-453-8030
Not Applicable
--------------
(Former name or former address, if changed since last report.)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT. Not applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 30, 1996, Registrant acquired all of the capital stock of
Santa Ursula S.A.A.I.C. e I., a corporation organized under the laws of
Argentina doing business as Morgan Seeds ("Morgan") in exchange for $27 million
in cash. The information required by (a) and (b) is hereby incorporated by
reference from the Registrant's Press Release dated October 1, 1996, and
attached hereto as Exhibit 99.1. The Registrant intends to continue Morgan's
current business purpose.
ITEMS 3 THROUGH 6. Not applicable.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) It is anticipated that any applicable Financial Statements will be
available within the next (60) days and will be filed separately under Form
8-K/A.
(b) It is anticipated that any applicable Pro Forma Financial Statements will
be available within the next (60) days and will be filed separately under
Form 8-K/A.
(c) EXHIBITS.
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<TABLE>
<CAPTION>
EXHIBIT NUMBER Description
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<C> <S>
2.1 Stock Acquisition Agreement by and among Agrigenetics,
Inc., Mr. Jose Alberto Benegas Lynch, Ms. Maria Alejandra
Rebagliati and Genetic Resources (Latin America)
Corporation dated September 30, 1996.
99.1 Registrant's Press Release dated October 1, 1996.
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Mycogen Corporation
-------------------
(Registrant)
Date: October 14, 1996 /s/ James A. Baumker
---------------- --------------------
James A. Baumker
Vice President,
Chief Financial Officer,
Chief Accounting Officer
<PAGE>
EXHIBIT 2.1
Stock Acquisition Agreement
<PAGE>
STOCK ACQUISITION AGREEMENT
by and among
AGRIGENETICS, INC.,
MR. JOSE ALBERTO BENEGAS LYNCH,
MS. MARIA ALEJANDRA REBAGLIATI
and
GENETIC RESOURCES (LATIN AMERICA) CORPORATION
Dated as of September 30, 1996
<PAGE>
STOCK ACQUISITION AGREEMENT
This Stock Acquisition Agreement (the "Agreement"), dated as of September
30, 1996, is entered into by and among AGRIGENETICS, INC., a corporation
organized under the laws of Delaware, d/b/a Mycogen Seeds ("Buyer"), MR. JOSE
ALBERTO BENEGAS LYNCH, an individual ("Benegas"), MS. MARIA ALEJANDRA
REBAGLIATI, an individual ("Rebagliati"), and GENETIC RESOURCES (LATIN AMERICA)
CORPORATION, a corporation organized under the laws of the Bahamas ("Genetic
Resources", and jointly and severally with Benegas and Rebagliati, "Sellers").
WHEREAS, Sellers own all of the outstanding capital stock of Santa Ursula
S.A.A.I.C. e I., a corporation organized under the laws of Argentina ("Morgan");
and
WHEREAS, Buyer desires to purchase from Sellers, and Sellers desire to sell
to Buyer, all of the capital stock of Morgan upon the terms and subject to the
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
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1.1 DEFINED TERMS. As used herein, the terms below shall have the
-------------
following meanings:
"Action" shall mean any action, order, writ, injunction, judgment or
------
decree outstanding or claim, suit, litigation, proceeding, arbitration or
investigation by or before any court, governmental or other regulatory or
administrative agency or commission or any other person.
"Affiliate" shall mean, with respect to any party, any individual,
---------
corporation, partnership, limited liability company, or other entity that
directly, or through one or more intermediaries, controls or is controlled by or
is under common control with such party.
"Assets" shall mean land, buildings, improvements, Leasehold
------
Improvements, Fixtures and Equipment and other assets (tangible or intangible),
including Proprietary Rights, breeding stock, germplasm and the like.
"Best Knowledge of Morgan" shall mean the best knowledge of each of
------------------------
Sellers and Victor Poggi after appropriate investigation and review by each such
person.
"Books and Records" shall mean (a) records and lists of Morgan
-----------------
pertaining to its Assets, (b) records and lists pertaining to the business,
customers, suppliers or personnel of Morgan, (c) product, business and marketing
plans of Morgan, and (d) books, ledgers, files, reports, plans, drawings and
operating records of every kind maintained by Morgan.
5
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"Contracts" shall mean any agreement, contract, note, loan, evidence
---------
of indebtedness, purchase order, letter of credit, indenture, security or pledge
agreement, franchise agreement, undertaking, practice, covenant not to compete,
intellectual property or germplasm license, employment agreement, license,
instrument, obligation or commitment to which Morgan is a party or is bound or
which relates to its business or Assets, whether oral or written, but excluding
all Leases.
"Copyrights" shall mean registered copyrights, copyright applications
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and unregistered copyrights.
"Court Order" shall mean (i) with respect to Morgan and Sellers, any
-----------
judgment, decision, consent decree, injunction, ruling or order of any federal,
provincial, state, municipal or local court or governmental agency, department
or authority of (a) the United States or any other jurisdiction except Argentina
that was issued to Morgan or Sellers, as applicable, and was received by Morgan
or Sellers, as applicable, or (b) Argentina, in each case, that is binding on
Morgan or Sellers or their respective properties under applicable law and (ii)
with respect to Buyer, any judgment, decision, consent decree, injunction,
ruling of or order of any federal provincial, state, municipal or local court or
governmental agency, department or authority of (a) any jurisdiction except the
United States and Argentina that was issued to Buyer and was received by Buyer
or (b) the United States or Argentina, in each case, that is binding on Buyer or
its property under applicable law.
"Covered Liabilities" shall mean any and all debts, losses, claims,
-------------------
damages, costs, demands, fines, judgments, contracts (implied and expressed,
written and unwritten), penalties, obligations, payments, liabilities of every
type and nature (whether fixed or contingent) (including, without limitation,
those arising out of any Action), together with any reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees and out-of-
pocket expenses) incurred in connection with any of the foregoing (including,
without limitation, reasonable costs and expenses incurred in investigating,
preparing or defending any Action). Notwithstanding the foregoing, Covered
Liabilities shall not include an Indemnified Party's own consequential or
special damages, but shall include any consequential or special damages of a
third party for which an Indemnified Party may be liable.
"Default" shall mean (a) a breach of or default under any Contract or
-------
Lease, (b) the occurrence of an event that with the passage of time or the
giving of notice or both would constitute a breach of or default under any
Contract or Lease, or (c) the occurrence of an event that with or without the
passage of time or the giving of notice or both would give rise to a right of
termination, renegotiation or acceleration under any Contract or Lease.
"Disclosure Schedule" means the schedules attached to this Agreement
-------------------
which set forth exceptions to the representations and warranties contained in
Article IV hereof and certain other information called for by other provisions
of this Agreement.
"Distribution Agreement" shall mean the License and Supply Agreement
----------------------
between Morgan and Genetic Resources for the marketing of Morgan's seed
varieties in Asia, Eastern Europe and Bolivia.
"Encumbrances" shall mean any claim, lien, pledge, option, charge,
------------
easement, security interest, deed of trust, mortgage, right-of-way, encumbrance
or other rights of third parties.
6
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"Facility" or "Facilities" shall mean all plants, offices,
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manufacturing facilities, warehouses, improvements, administration buildings,
and all real property and related facilities which are currently utilized by
Morgan.
"Facility Leases" shall mean all of the Leases of Facilities listed on
---------------
Schedule 4.7.
"Financial Statements" shall mean (i) the audited balance sheets of
--------------------
Morgan at June 30, 1996 and the audited statements of income and audited
statements of cash flows for Morgan for the fiscal year ended as of June 30,
1996, together with the notes thereon and the related unqualified report of
Deloitte & Co., Morgan's certified public accountants, and (ii) the Interim
Balance Sheet, all of which were previously delivered to Buyer and are attached
hereto as Schedule 4.11.
"Fixtures and Equipment" shall mean the furniture, fixtures,
----------------------
furnishings, machinery, automobiles, trucks, spare parts, supplies, equipment,
tooling and other tangible personal property owned by Morgan and located in, at
or upon the Facilities, including all warranty rights with respect thereto.
"Interim Balance Sheet" shall mean the audited balance sheet of Morgan
---------------------
dated July 31, 1996 reviewed and verified by Deloitte & Co., Morgan's certified
public accountants.
"Leased Real Property" shall mean all leased property described in the
--------------------
Facility Leases.
"Leasehold Estate" shall mean all of the rights and obligations as
----------------
lessee under a given Lease.
"Leasehold Improvements" shall mean all leasehold improvements
----------------------
situated in or on the Leased Real Property and owned by Morgan.
"Leases" shall mean all of the existing leases with respect to the
------
personal or real property of Morgan listed on Schedule 4.8, and leases with
respect to the personal and real property of Morgan which are not required to be
listed on Schedule 4.8.
"Liability" or "Liabilities" shall mean any direct or indirect
--------- -----------
liability, indebtedness, obligation, commitment, expense, claim, deficiency,
guaranty or endorsement of or by any person of any type, whether accrued,
absolute, contingent, matured, unmatured or otherwise.
"Material Adverse Effect" shall mean, with respect to any person or
-----------------------
entity, a material adverse effect on the business, assets, liabilities, results
of operations or financial condition of such person or entity or the ability of
such person to consummate the transactions contemplated by this Agreement.
"Owned Real Property" shall mean all real property owned in fee,
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including without limitation all rights, easements and privileges appertaining
or relating thereto, all buildings, Fixtures and Equipment, and improvements
located thereon and all Facilities thereon, if any.
"Patents" shall mean all patents and patent applications and
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registered and unregistered design applications.
7
<PAGE>
"Permits" shall mean licenses, permits, franchises, approvals,
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authorizations, consents or orders of, or filings with, any governmental
authority of Argentina, whether federal, provincial or municipal, or any other
person, necessary or desirable for the past, present or anticipated conduct of,
or relating to the operation of the business of Morgan.
"Plant Variety Protection Certificates" shall mean all certificates or
-------------------------------------
registrations protecting the proprietary of plant varieties created by or on
behalf of Morgan.
"Proprietary Rights" shall mean all of the Copyrights, Patents,
------------------
Trademarks, Plant Variety Protection Certificates, technology rights and
licenses, know-how and intellectual property rights of Morgan.
"Regulations" shall mean any laws, statutes, ordinances, regulations
-----------
and rules of any federal, provincial or municipal government of Argentina and
any other governmental department or agency, including without limitation,
zoning, building and health codes, occupational safety and health and laws
respecting employment practices, employee documentation, terms and conditions of
employment and wages and hours.
"Tax" or "Taxes" shall mean taxes, assessments, charges, duties, fees,
--- -----
levies or other governmental charges imposed by Argentina, including, without
limitation, all federal, provincial and municipal and other income, franchise,
profits, capital gains, asset, capital stock, transfer, sales, use, value added
tax (VAT), occupation, property, excise, severance, stamp, license, payroll,
social security contributions, withholding and other taxes, assessments,
charges, duties, fees, levies or other governmental charges of any kind
whatsoever (whether payable directly or by withholding and whether or not
requiring the filing of Returns), and all estimated taxes, deficiency
assessments, additions to tax, penalties, and interest, and shall include any
liability for such amounts as a result of a contractual obligation to indemnify
any person or entity.
"Taxable Year," in the case of any Tax, shall mean the period for
------------
which such Tax is computed.
"Trademarks" shall mean registered trademarks, registered service
----------
marks, trademark and service mark applications and unregistered trademarks and
service marks.
1.2 OTHER DEFINED TERMS. The following terms shall have the meanings
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defined for such terms in the Sections set forth below:
<TABLE>
<CAPTION>
Term Section
- ---- -------
<S> <C>
Agreement Preamble
Benegas Preamble
Buyer Preamble
Buyer Indemnified Parties 7.4(a)
Closing 3.1
Common Shares 4.4
Fideliter 3.2(c)
Genetic Resources Preamble
Indemnified Party 7.6
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
Indemnifying Party 7.6
Notes 2.2
Plans 4.20
Purchase Price 2.3
Rebagliati Preamble
Returns 4.22(a)
Sellers Preamble
Sellers Indemnified Parties 7.5
</TABLE>
ARTICLE II
PURCHASE AND SALE OF STOCK
--------------------------
2.1 TRANSFER OF STOCK. Upon the terms and subject to the conditions
-----------------
contained herein, at the Closing, Sellers will sell, convey, transfer, assign
and deliver to Buyer, and Buyer will acquire from Sellers, all the Common
Shares, free and clear from all Encumbrances.
2.2 TRANSFER OF INDEBTEDNESS; TERMINATION OF DISTRIBUTION AGREEMENT.
---------------------------------------------------------------
Upon the terms and subject to the conditions contained herein, at the Closing,
(a) Sellers will sell, convey, transfer, assign and deliver to Buyer, duly
endorsed, each original promissory note or other instrument evidencing any
indebtedness or Liability of Morgan to Sellers (the "Notes"), and all loans
advanced by Sellers to Morgan and all other Liabilities of Morgan to Sellers
shall be transferred to Buyer and (b) Genetic Resources will deliver to Buyer a
termination of the Distribution Agreement executed by Sellers and Morgan and
otherwise in form and substance acceptable to Buyer.
2.3 PURCHASE PRICE. Subject to adjustment as provided in Section 2.4
--------------
below, Buyer shall pay to Sellers at Closing for (a) the sale, transfer,
assignment, conveyance and delivery of the Common Shares, (b) the sale,
transfer, assignment, conveyance and delivery of the Notes and the indebtedness,
(c) the termination of the Distribution Agreement and (d) the performance by
Sellers of each of their other obligations hereunder, the aggregate amount of
Twenty Seven Million U.S. Dollars (U.S. $27,000,000) (the "Purchase Price").
2.4 CLOSING ADJUSTMENT. The Purchase Price shall be subject to the
------------------
following adjustments, which adjustments shall be calculated by Morgan and
Deloitte & Co. and reviewed by Sellers and Buyer:
(a) If the aggregate outstanding amount of all loans by Sellers to
Morgan (including accrued and unpaid interest thereon) as of the date of the
Closing exceeds the aggregate amount of such outstanding loans as set forth on
the Interim Balance Sheet, then the Purchase Price shall be increased by the
amount of such excess but in no event shall the increase exceed the portion of
the proceeds of loans made by Sellers (including accrued and unpaid interest
thereon) after the date of the Interim Balance Sheet used by Morgan to make
qualifying capital expenditures for the benefit of Morgan. For this purpose, a
cost shall be considered a qualifying capital expenditure if made to an
independent entity for fair value.
(b) If the aggregate outstanding amount of all loans advanced by
Sellers to Morgan (including accrued and unpaid interest thereon) as set forth
on the Interim Balance Sheet exceeds the
9
<PAGE>
aggregate amount of such outstanding loans as of the date of the Closing, then
the Purchase Price shall be reduced by the amount of such excess.
2.5 BANK LOANS. Buyer shall obtain a statement from the banks that
----------
have loaned funds (the list of said banks being set forth in Schedule 4.8
hereto) to Morgan indicating that they have been notified of the sale of
Benegas' controlling interest in Morgan and expressing their willingness to
continue to financially assist Morgan in view of its new ownership structure.
In the event that Buyer is unable to obtain said statement, Buyer shall advance
funds to Morgan as may be necessary to permit Morgan to, within 15 days of the
Closing, prepay all such loans.
ARTICLE III
THE CLOSING
-----------
3.1 CLOSING. The closing (the "Closing") shall occur at the offices of
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Corporacion Metropolitana de Finanzas, S.A., calle Macacha Guemes 555, 4th
floor, Buenos Aires, Argentina, or at such other place as the parties hereto
shall agree. In connection with the Closing, all actions, payments and
deliveries then required hereunder shall be completed. The Closing shall be
deemed to have occurred only when all of the payments, opinions, certificates
and other documents required to be delivered at the Closing have been delivered
(or the requirement therefor waived).
3.2 CLOSING DATE; SHAREHOLDERS MEETING. The Sellers shall cause all
----------------------------------
of Morgan's directors and syndics to submit written resignations from their
positions. In addition, Sellers shall cause Morgan to hold an ordinary
shareholders meeting substantially concurrent with the Closing where the
following resolutions shall be adopted, each effective immediately:
(a) Sellers, as the shareholders of Morgan prior to the Closing, will
approve the performance of Morgan's Board of Directors and Sindico for the
period commencing on the date of the last annual shareholders meeting and ending
on the date of the Closing.
(b) Sellers, as the shareholders of Morgan prior to the Closing, will
accept the written resignations of Morgan's directors and syndics.
(c) Sellers, as the shareholders of Morgan prior to the Closing, will
take all actions necessary or convenient to effectuate the transfers of (i) one
Class A Common Share to Fideliter, S.A. ("Fideliter") and (ii) all remaining
Common Shares to Buyer, including, without limitations, recording said transfers
in Morgan's registry.
(d) Sellers, as the shareholders of Morgan prior to the Closing, will
approve the directors report, general balance sheet, income statement, statement
of change in stockholders equity, statement of variation in current capital and
syndics report, each corresponding to fiscal year ended June 30, 1996.
(e) Sellers, as the shareholders of Morgan prior to the Closing, will
consider the profit and loss account and allocation of the balance, approve the
remuneration received by the directors and fix fees for directors and syndics.
10
<PAGE>
(f) Buyer and Fideliter, as the shareholders of Morgan subsequent to
the Closing, will appoint new directors and syndics for Morgan.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
-----------------------------------------
Sellers hereby jointly and severally represent and warrant to Buyer as
follows, which representations and warranties are true and correct as of the
date hereof:
4.1 ORGANIZATION. Morgan is a corporation duly organized, validly
------------
existing and in good standing under the laws of Argentina with full corporate
power and authority to own and operate its business as presently conducted.
Genetic Resources is a corporation duly organized, validly existing and in good
standing under the laws of the Bahamas with full corporate power and authority
to own and operate its business as presently conducted. Each of Morgan and
Genetic Resources is duly qualified to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or held under
lease or the nature of its activities makes such qualification necessary, except
where the failure to be so qualified will not have a Material Adverse Effect on
Morgan. Genetic Resources is duly qualified in Argentina to be a shareholder of
Morgan. Each of Morgan and Genetic Resources has previously provided Buyer with
true and correct copies of their respective charter documents, bylaws and other
governing documents, as currently in effect.
4.2 NO SUBSIDIARIES. Except as set forth on Schedule 4.2, Morgan has
---------------
no subsidiaries and no direct or indirect stock or other equity or ownership
interest (whether controlling or not) in any corporation, association,
partnership, limited liability company, trust or other entity.
4.3 AUTHORIZATION. Morgan has all requisite power and authority and
-------------
has taken all action necessary, corporate or otherwise, to execute and deliver
the termination of the Distribution Agreement and any other document
contemplated herein to which it is a party and to consummate the transactions
contemplated thereby and to perform its obligations thereunder. The execution
and delivery of the termination of the Distribution Agreement and any other
document contemplated herein to which it is a party and the consummation by
Morgan of the transactions contemplated hereby and thereby have been duly
approved by the board of directors and shareholders of Morgan. No other
corporate proceedings on the part of Morgan are necessary to authorize the
termination of the Distribution Agreement and any other document contemplated
herein and the transactions contemplated herein and therein. Genetic Resources
has all requisite power and authority and has taken all action necessary,
corporate or otherwise, to execute and deliver this Agreement and any other
document contemplated herein to which it is a party, to consummate the
transactions contemplated hereby and thereby, and to perform its obligations
hereunder and thereunder. The execution and delivery of this Agreement and any
other document contemplated herein by Genetic Resources and the consummation by
Genetic Resources of the transactions contemplated hereby and thereby have been
duly approved by the board of directors of Genetic Resources. No other
corporate proceedings on the part of Genetic Resources are necessary to
authorize this Agreement and any other document contemplated herein and the
transactions contemplated herein and therein. This Agreement has been duly
executed and delivered by each of Sellers and is a legal, valid and binding
obligation of each of Sellers enforceable against them in accordance with its
terms. Each of the other documents contemplated herein when duly executed and
delivered by each of
11
<PAGE>
Morgan and/or Sellers, as applicable, will be a legal, valid and binding
obligation of such parties, enforceable against them in accordance with its
terms.
4.4 CAPITALIZATION.
--------------
The authorized capital stock of Morgan consists of 5,000,000 nominal non-
endorsable shares of Class A common stock, par value $1 per share and one vote
per share, and 2,300,000 nominal non-endorsable shares of Class B Common Stock,
par value $1 per share and one vote per share (collectively, the "Common
Shares") all of which are validly issued and outstanding on the date hereof.
Benegas owns of record and beneficially 4,991,694 of the outstanding Class A
Common Shares free and clear of any Encumbrances. Rebagliati owns of record and
beneficially 8,306 of the outstanding Class A Common Shares free and clear of
any Encumbrances. Genetic Resources owns of record and beneficially all
2,300,000 Class B Common Shares free and clear of any Encumbrances. All of the
issued and outstanding Common Shares are fully paid and nonassessable and are
free and clear of all Encumbrances. Morgan has no outstanding options,
warrants, rights or other securities, plans, contracts or agreements which give
the holder or any other person the right to purchase or otherwise receive from
such entity any shares of capital stock or any securities which are convertible
into or exercisable for any shares of such capital stock or under which any such
option, warrant, right or security may be issued in the future. There have been
no irrevocable contributions for future increases of capital which are pending
capitalization.
4.5 NO MATERIAL ADVERSE CHANGE. Since the Interim Balance Sheet
--------------------------
Date:
(a) there has been no actual or threatened material adverse change in
the financial condition, results of operation, business or Assets of Morgan; and
(b) Morgan has operated its business in the ordinary course so as to
preserve the business intact, to keep available to the business the services of
its employees, and to preserve the business and the goodwill of its suppliers,
customers, distributors and others having business relations with it.
4.6 ASSETS. Excluding Assets leased by Morgan, Morgan has good and
------
marketable title to all Assets used in its business. The Assets owned or leased
by Morgan include without limitation all material Assets necessary for the
conduct of its business as presently conducted.
4.7 FACILITIES.
----------
(a) Owned Real Property. Morgan has no Owned Real Property other than
-------------------
the properties described on Schedule 4.7. Sellers will cause Mariano Gutierrez
O'Farrell to transfer the Laguna Blanca Facility to Ezequiel Fonseca as soon as
possible. Buyer shall be solely responsible for implementing all the
administrative procedures necessary in order to execute the public deed
transferring title and for the costs, expenses or taxes in connection therewith.
These obligations shall survive until the transfer has been completed.
(b) Actions. There are no pending or, to the Best Knowledge of
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Morgan, threatened condemnation proceedings or other Actions relating to any
Facility.
12
<PAGE>
(c) Leases or Other Agreements. Except for Facility Leases listed on
--------------------------
Schedule 4.7, there are no leases, subleases, licenses, occupancy agreements,
options, rights, concessions or other agreements or arrangements, written or
oral, granting to any person the right to purchase, use or occupy any Facility
of Morgan.
(d) Facility Leases and Leased Real Property. With respect to each
----------------------------------------
Facility Lease, Morgan has an unencumbered interest in the Leasehold Estate.
Morgan enjoys peaceful and undisturbed possession of all of its Leased Real
Property, subject to the rights of the owners thereof.
(e) Utilities. There is no condition which would reasonably be
---------
expected to result in the termination of the present access from any Facility to
any utility services currently being supplied.
(f) Improvements, Fixtures and Equipment. Except as described on
------------------------------------
Schedule 4.7, to the Best Knowledge of Morgan, the improvements constructed on
the Facilities, including, without limitation, all Leasehold Improvements, and
all Fixtures and Equipment and other tangible assets owned, leased or used by
Morgan at its Facilities are in conformity, in all material respects, with all
applicable Regulations.
(g) No Special Assessment. Except as described in Schedule 4.7,
---------------------
Morgan has received no notice of any special tax or similar assessment relating
to any Facility or any portion thereof and there is no pending or threatened
special tax or similar assessment.
4.8 CONTRACTS AND COMMITMENTS.
-------------------------
(a) Contracts. Except as set forth on Schedule 4.8, Morgan is not a
---------
party to, and is not otherwise bound by, any Contract, Lease or other legally
enforceable obligation:
(1) That (A) in the case of Contracts with parties other than
suppliers of seeds, involve an obligation on the part of Morgan in excess of One
Hundred Fifty Thousand Dollars ($150,000), or (B) in the case of Contracts that
involve suppliers of seeds, involve an obligation on the part of Morgan in
excess of Seven Hundred Fifty Thousand Dollars ($750,000);
(2) Under which Morgan holds or has a right to receive any patent
license or technology;
(3) That was not made in the ordinary course of business;
(4) That is of an unusual character and affects the business of
Morgan in a material way;
(5) That constitutes or arises from any promissory notes, loans,
agreements, indentures, evidences of indebtedness, letters of credit,
guarantees, or other instruments relating to an obligation to pay money, whether
Morgan shall be the borrower, lender or guarantor thereunder or whereby any of
Morgan's Assets are pledged (excluding credit provided by Morgan in the ordinary
course of business to purchasers of its products); or
(6) That constitutes or arises from any License Agreements whether for
research or commercial purposes relating to germplasm or plant varieties.
13
<PAGE>
Sellers have delivered, or provided access, to Buyer true, correct and complete
copies of all of the Contracts and Leases listed on Schedule 4.8, including all
amendments and supplements thereto.
(b) Absence of Defaults. All of the Contracts and Leases to which
-------------------
Morgan is a party or by which it or any of its Assets is bound or affected are
valid, binding and enforceable in accordance with their terms. Morgan has
fulfilled, or taken all action necessary to enable it to fulfill when due, all
of its material obligations under each of its Contracts and Leases. To the Best
Knowledge of Morgan, all parties to such Contracts and Leases have complied in
all material respects with the provisions thereof, no party is in Default
thereunder, and no notice of any claim of Default has been given to Morgan. To
the Best Knowledge of Morgan, all the products and services called for by any
unfinished Contract can be supplied in accordance with the terms of such
Contract, including time specifications. With respect to any Leases, Morgan has
not received any notice of cancellation or termination under any option or right
reserved to the lessor, or any notice of Default, thereunder.
4.9 PERMITS.
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(a) Schedule 4.9 sets forth a complete list of all material Permits
held by Morgan. Morgan has not received any notice of any claim of Default,
with respect to any such Permits.
(b) Except as disclosed on Schedule 4.9 hereto, no notice to,
declaration, filing or registration with, or Permit from, any domestic or
foreign governmental or regulatory body or authority, or any other person or
entity, is required to be made or obtained by Sellers or Morgan in connection
with the execution, delivery or performance of this Agreement and the
consummation of the transactions contemplated hereby.
4.10 NO CONFLICT OR VIOLATION. Neither the execution, delivery or
------------------------
performance of this Agreement nor the consummation of the transactions
contemplated hereby, nor compliance by Sellers with any of the provisions
hereof, will (a) violate or conflict with any provision of the Articles of
Incorporation or Bylaws of Morgan or Genetic Resources, (b) to the Best
Knowledge of Morgan and except as set forth on Schedule 4.10, violate, conflict
with, or result in or constitute a Default under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration under, or result in the creation of any Encumbrance
upon any of Morgan's Assets under, any of the terms, conditions or provisions of
any Regulation, Contract, Lease or Permit, (i) to which Morgan is a party or
(ii) by which Morgan's Assets are bound, or (c) violate any Regulation or Court
Order.
4.11 FINANCIAL STATEMENTS. Sellers have heretofore delivered to Buyer
--------------------
Morgan's Financial Statements. All such financial statements (a) are in
accordance with the Books and Records of Morgan, (b) have been and will be
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods covered thereby and (c) fairly and
accurately present the Assets, Liabilities (including all reserves) and
financial position of Morgan as of the respective dates thereof and the results
of operations and changes in cash flows for the periods then ended (subject, in
the case of the interim financial statements, to normal year-end adjustments).
The Financial Statements for the year ended June 30, 1996 and the Interim
Balance Sheet have been examined by Deloitte & Co., independent certified public
accountants, whose reports thereon are included with such Financial Statements.
All of the Financial Statements previously delivered to Buyer are attached
hereto as Schedule 4.11.
14
<PAGE>
4.12 BOOKS AND RECORDS. Sellers have given access to Buyer to all the
-----------------
Books and Records and all accounts, minutes books and stock books of Morgan
which, in reasonable detail, reflect the records and activities of Morgan.
4.13 LITIGATION. Except as set forth on Schedule 4.13, there is no
----------
material Action pending, or to the Best Knowledge of Morgan, threatened or
anticipated (a) against, related to or affecting (i) Morgan or its business or
Assets, (ii) any officers or directors of Morgan, as such, or (iii) any
shareholder of Morgan in such shareholder's capacity as such, (b) seeking to
delay, limit or enjoin the transactions contemplated by this Agreement or (c) in
which Morgan is a plaintiff, including any derivative suits brought by or on
behalf of Morgan. Morgan is not in Default with respect to or subject to any
Court Order, and there are no unsatisfied judgments against Morgan or its
business or Assets.
4.14 LABOR MATTERS. Except as set forth in Schedule 4.14, to the Best
-------------
Knowledge of Morgan, (a) there are no controversies pending or threatened
between Morgan and any of its employees, former employees, job applicants or any
association or group of such persons, (b) there is no labor strike or labor
disturbance pending or threatened against Morgan nor is any grievance currently
being asserted, and (c) Morgan has not experienced a work stoppage or other
labor difficulty, and is not and has not engaged in any unfair labor practice.
4.15 LIABILITIES. Morgan has no Liabilities due or to become due,
-----------
except (a) Liabilities which are set forth or reserved for on the Interim
Balance Sheet of Morgan, which have not been paid or discharged since July 31,
1996, (b) Liabilities incurred since the date of the Interim Balance Sheet, in
the ordinary course of business and in accordance with this Agreement (none of
which relates to any Default under any Contract or Lease, breach of warranty,
tort, infringement or violation of any Regulation or Court Order or arose out of
any Action) and none of which, individually or in the aggregate, has or would
have a Material Adverse Effect on Morgan and (c) Liabilities which have been
disclosed in this Agreement or in the Disclosure Schedules attached hereto.
4.16 COMPLIANCE WITH LAW. To the Best Knowledge of Morgan, Morgan and
-------------------
the conduct of its business have not violated, and are in compliance with, all
Regulations and Court Orders relating to its Assets, business or operations,
except violations or failures which have been disclosed in this Agreement or in
the Disclosure Schedules attached hereto. Morgan has not received any notice to
the effect that, or otherwise been advised that, it is not in compliance with
any such Regulations or Court Orders.
4.17 NO BROKERS. Neither Sellers nor Morgan's directors have employed
----------
or made any agreement with any broker, finder or similar agent or any person or
firm which will result in the obligation of Buyer, Morgan to pay any finder's
fee, brokerage fees or commission or similar payment in connection with the
transactions contemplated hereby.
4.18 NO OTHER AGREEMENTS TO SELL ASSETS. Neither Morgan nor its
----------------------------------
officers, directors, shareholders or Affiliates has any commitment or legal
obligation, absolute or contingent, to any other person or firm other than Buyer
to sell, assign, transfer or effect a sale of any of its Assets (other than
inventory in the ordinary course of business). None of Morgan's shareholders
has any commitment or legal obligation, absolute or contingent, to any other
person or firm other than Buyer to sell or effect a sale of the capital stock of
Morgan, to effect any merger, consolidation, liquidation, dissolution or other
15
<PAGE>
reorganization of Morgan, or to enter into any agreement or cause the entering
into of an agreement with respect to any of the foregoing.
4.19 PROPRIETARY RIGHTS.
------------------
(a) Proprietary Rights. Morgan has no Patents. Schedule 4.19(a)
------------------
lists all material Trademarks, Copyrights and Plant Variety Protection
Certificates, including: (i) for each Trademark, the application serial number
or registration number, the class of goods covered and the expiration date for
each country in which a Trademark has been registered, (ii) for each Copyright,
the number and date of filing for each country in which a Copyright has been
filed and (iii) for each Plant Variety Protection Certificate, the date and
subject matter of such Plant Variety Protection Certificate.
(b) Royalties and Licenses. To the Best Knowledge of Morgan, except
----------------------
as set forth in Schedule 4.19(b), Morgan has no obligations to compensate any
person for the use of any of its Proprietary Rights nor has Morgan granted to
any person any license, option or other rights to use in any manner any of its
Proprietary Rights, whether requiring the payment of royalties or not.
(c) Ownership and Protection of Proprietary Rights. Morgan owns or
----------------------------------------------
has a valid right to use its Proprietary Rights, including, without limitation,
those listed on Schedule 4.19(a).
4.20 EMPLOYEE CONTRACTS AND BENEFIT PLANS. Schedule 4.20 sets forth a
------------------------------------
true and complete list of each bonus, deferred compensation, incentive
compensation, stock purchase, stock option, restricted stock issuance, severance
or termination pay, hospitalization or other medical, life or other insurance,
supplemental unemployment benefits, profit-sharing, pension, or retirement plan,
program, agreement or arrangement, sponsored, maintained or contributed to or
required to be contributed to by Morgan for the benefit of any employee or
terminated employee of Morgan (the "Plans"). Morgan has complied with the
Regulations relating to the Plan required to be maintained by the laws of
Argentina. Morgan is not a party to, and is not otherwise bound by any Contract
or other legally enforceable obligation that constitutes or arises from any
employment contracts and severance agreements, including, without limitation,
Contracts (a) to employ or terminate executive officers or other personnel and
other contracts with present or former officers, directors or shareholders and
(b) Contracts that will result in the payment by, or the creation of any
Liability to pay on behalf of, Buyer, Morgan or Sellers any severance,
termination or other similar payments to any present or former personnel
following termination of employment or otherwise as a result of the consummation
of the transactions contemplated by this Agreement.
4.21 TRANSACTIONS WITH CERTAIN PERSONS. As of the Closing, Morgan
---------------------------------
will not be a party to any Contracts, Leases or other legally enforceable
obligations with any persons who within two years prior to the Closing were
shareholders, officers, directors or employees of Morgan or are members of any
such person's immediate family other than (a) Contracts for the sale of seeds
entered into in the ordinary course of business and not exceeding $50,000 and
(b) the three agreements for the production of sunflower and corn seed between
Morgan and El Atamisque, S.A. which will continue in effect after the Closing.
4.22 TAXES. Except as disclosed on Schedule 4.22, (a) all Tax
-----
returns, reports and statements required to be filed by Morgan for the three
fiscal years ending prior to the Closing (the "Returns") have been timely filed
with the appropriate governmental authorities in all jurisdictions in which such
Returns are required to be filed and all such Returns were complete and accurate
in all material respects; (b) all
16
<PAGE>
Taxes required to be paid by such Returns have been timely paid (or, if not
timely paid, have been fully paid including any late payment fee or penalty) or
provided for in the Financial Statements; (c) Morgan has not received any notice
of assessment or proposed assessment from any governmental authority in
connection with any Returns and there are no pending Tax examinations of, or Tax
claims being asserted against, Morgan or any of its Assets or properties; (d)
there is no examination by any governmental authority affecting Morgan presently
pending or threatened; and (e) all payroll, sales and any other Taxes which
Morgan has been required to withhold or collect have been timely paid over to
the proper governmental authorities to the extent due and payable. Schedule 4.22
sets forth in reasonable detail the VAT Tax deferment arrangements of Morgan
with the province of San Juan.
4.23 INSURANCE. Schedule 4.23 contains a complete and accurate list
---------
of all principal policies or binders of fire, liability, title, worker's
compensation, product liability and other forms of insurance (showing as to each
policy or binder the carrier, policy number, coverage limits, expiration dates,
annual premiums, a general description of the type of coverage provided, and
loss experience history by line of coverage) maintained by Morgan on its
business, Assets or employees.
4.24 ACCOUNTS RECEIVABLE. The accounts receivable set forth on the
-------------------
Interim Balance Sheet and all accounts receivable arising since the date of the
Interim Balance Sheet represent bona fide claims of Morgan as applicable,
against debtors for sales, services performed or other charges arising on or
before the date hereof, and all the goods delivered and services performed which
gave rise to said accounts were delivered or performed in accordance with the
applicable orders, Contracts or customer requirements. Said accounts receivable
were generated pursuant to valid contracts, purchase orders or invoices and
within the applicable value, ceiling and scope of work on such contracts.
4.25 PAYMENTS. To the Best Knowledge of Morgan, Morgan has not,
--------
directly or indirectly, paid or delivered any fee, commission or other sum of
money or item of property, however characterized, to any finder, agent, client,
customer, supplier, government official or other party which is in any manner
related to the business, Assets or operations of Morgan and which is, or may be
with the passage of time or discovery, illegal under the laws of Argentina; and
Morgan has not participated, directly or indirectly, in any boycotts or other
similar practices affecting any of its actual or potential customers and has at
all times done business in an open and ethical manner.
4.26 COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as set forth in
----------------------------------
Schedule 4.26, there is no investigation or administrative or judicial
proceeding or other inquiry or communication from a governmental authority
involving Morgan with respect to any environmental condition on Morgan's
properties or elsewhere.
4.27 BANKING RELATIONSHIPS. Schedule 4.27 sets forth a complete and
---------------------
accurate description of all arrangements that Morgan has with any banks, savings
and loan associations or other financial institutions providing for checking
accounts, safe deposit boxes, borrowing arrangements, and certificates of
deposit or otherwise, indicating in each case account numbers, if applicable,
and the person or persons authorized to act or sign on behalf of Morgan in
respect of any of the foregoing.
4.28 CONDUCT OF BUSINESS PENDING THE CLOSING. Since June 30, 1996,
---------------------------------------
Morgan has conducted its business only in the ordinary and usual course as such
business has previously been conducted and, except as set forth in Schedule 4.28
hereto, has not made any payments other than in the ordinary course or any
distributions. Since July 31, 1996, Morgan has not retained and has no payment
17
<PAGE>
obligation to any attorney, accountant or consultant in connection with, or as a
consequence of, this Agreement, except the fees payable to Deloitte & Co.
4.29 RECORDS AND STATEMENTS. Each of Sellers has delivered to Buyer
----------------------
all books, records, statements, ledgers, lists, accounts, files, plans and other
information in their respective possessions or to which they have access
pertaining to Morgan, Sellers' investment in Morgan and Morgan's business.
4.30 DELIVERY OF DOCUMENTS BY SELLERS. Sellers have furnished Buyer
--------------------------------
with (a) certified resolutions adopted by the Board of Directors of Genetic
Resources approving this Agreement and the transactions contemplated hereby and
(b) the legal opinion of Estudio de los Dres. O'Farrell, counsel to Sellers,
dated as of the date hereof, substantially in the form of Exhibit A hereto.
4.31 NO BUSINESS OUTSIDE ARGENTINA. Within the past three (3) years,
-----------------------------
Morgan and all entities controlled by Morgan have not engaged in any production,
selling, distribution, leasing or any other business activities in any
jurisdictions outside Argentina except for (a) the export and testing of
products to countries in Latin America through third party distributors located
in such countries, (b) the export and testing of products to the United States
through third party distributors located in the United States in aggregate
amounts not to exceed $150,000 per year and (c) the ownership of certain
Proprietary Rights listed in Schedule 4.19(a) in countries in Latin America.
Morgan has received no notice to the effect that, or otherwise been advised
that, it is not in compliance with any laws of any jurisdictions outside
Argentina. Morgan owns no assets in the United States.
4.32 LIABILITIES OF SUBSIDIARIES. Morgan has not entered into any
---------------------------
Contracts on behalf of any subsidiary which may create a Liability for Morgan
and none of the activities of Morgan's subsidiaries will create any Liability
for which Morgan could become responsible except for any Liabilities resulting
from the breach of the Project approved by the Province of San Juan in Decree
1224/93 and Decree 1248/95 after the Closing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
OF BUYER
--------
Buyer hereby represents and warrants to Sellers as follows, which
representations and warranties are true and correct as of the date hereof:
5.1 ORGANIZATION. Buyer is a corporation duly incorporated, validly
------------
existing and in good standing under the laws of Delaware and has full corporate
power and authority to conduct its business and to own and lease its properties.
Buyer is duly qualified to do business, and is in good standing, in Argentina.
5.2 AUTHORIZATION. Buyer has all requisite power and authority and
-------------
has taken all action necessary, corporate or otherwise, to execute and deliver
this Agreement and any other document contemplated herein to which it is a
party, to consummate the transactions contemplated hereby and thereby and to
perform its obligations hereunder and thereunder. The execution and delivery of
this Agreement and any other document contemplated herein by Buyer and the
consummation by Buyer of the transactions contemplated hereby and thereby have
been duly approved by the board of directors of
18
<PAGE>
Buyer. No shareholder approval or other corporate proceedings on the part of
Buyer are necessary to authorize this Agreement and any other document
contemplated herein and the transactions contemplated herein and therein. This
Agreement has been duly executed and delivered by Buyer and is a legal, valid
and binding obligation of Buyer enforceable against it in accordance with its
terms. Each of the other documents contemplated herein, when duly executed and
delivered by Buyer, will be a legal, valid and binding obligation of Buyer,
enforceable against it in accordance with its terms.
5.3 NO CONFLICT OR VIOLATION. Neither the execution, delivery or
------------------------
performance of this Agreement nor the consummation of the transactions
contemplated hereby, nor compliance by Buyer with any of the provisions hereof,
will (a) violate or conflict with any provision of the Articles of Incorporation
or Bylaws of Buyer, (b) violate, conflict with, or result in or constitute a
Default under, or result in the termination of, or accelerate the performance
required by, or result in a right of termination or acceleration under, or
result in the creation of any Encumbrance upon any of Buyer's assets under, any
of the terms, conditions or provisions of any applicable law, contract, lease or
agreement, (i) to which Buyer is a party or (ii) by which Buyer's assets are
bound, or (c) violate any Regulation or Court Order.
5.4 NO BROKERS. Buyer has not entered into nor will it enter into
----------
any agreement, arrangement or understanding with any person or firm which will
result in the obligation of Sellers or any Affiliate of Sellers to pay any
finder's fee, brokerage commission or similar payment in connection with the
transactions contemplated hereby.
5.5 DELIVERY OF DOCUMENTS BY BUYER. Buyer has furnished Sellers with
------------------------------
(a) certified resolutions adopted by the Board of Directors of Buyer approving
this Agreement and the transactions contemplated hereby and (b) legal opinions
of Loreen Collins and Estudio Beccar Varela, counsel to Buyer, in the forms
attached hereto as Exhibits B and C, respectively.
ARTICLE 6
COVENANTS
---------
6.1 FURTHER ASSURANCES AND COOPERATION. Subject to the terms and
----------------------------------
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective as promptly as practicable the transactions contemplated by this
Agreement and to cooperate with each other in connection therewith, (a) to
obtain all necessary waivers, consents and approvals from other parties to
material loan agreements, leases and other contracts, (b) to defend any lawsuits
or other legal proceedings challenging this Agreement or the consummation of the
transactions contemplated hereby, (c) to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the parties
to consummate the transactions contemplated hereby, (d) to effect all necessary
registrations and filings, and (e) to fulfill all conditions to this Agreement.
6.2 FEES AND EXPENSES. Buyer shall pay the fees and expenses of
-----------------
Buyer, and Sellers shall pay the fees and expenses of Sellers (including,
without limitation, attorneys' and accountants' fees), incurred in connection
with this Agreement and the consummation of the transactions contemplated
hereby, whether paid prior to or after the Closing. Notwithstanding the
foregoing, Buyer shall be responsible for the fees payable to Deloitte & Co. for
their due diligence review of Morgan's Books and Records conducted in connection
with this Agreement. Sellers shall pay any termination or profit
19
<PAGE>
sharing obligations or any other Liabilities to Victor Poggi which may arise,
whether by Contract, Regulation or otherwise as a result of the execution of
this Agreement and the consummation of the transactions contemplated herein.
ARTICLE 7
INDEMNITIES
-----------
7.1 TAX RETURNS. After the Closing, Buyer shall have the exclusive
-----------
authority and obligation to prepare and file, or cause to be prepared and filed,
all Returns of Morgan for, or with respect to, Taxes for all Taxable Years and
other taxable periods. Prior to the Closing, neither Morgan nor any person
acting on its behalf shall file or cause to be filed any amended Return without
the prior written consent of Buyer, which consent shall not be unreasonably
withheld.
7.2 PAYMENT OF TAXES. Sellers shall pay all Liabilities for Taxes of
----------------
Morgan that are shown as due on Returns with respect to or including all or a
portion of calendar year 1995 and the portion of calendar year 1996 ending on
and including June 30, 1996 to the extent that such Taxes have not been paid by
or on behalf of Morgan on or prior to the date hereof or provided for through
reserves reflected on the Financial Statements.
7.3 SURVIVAL OF REPRESENTATIONS, ETC. All statements contained in
--------------------------------
the Disclosure Schedules or in any certificate or instrument of conveyance
delivered by or on behalf of the parties pursuant to this Agreement or in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the parties hereunder. Except with respect to
the representations and warranties set forth in Section 4.22, the
representations and warranties set forth in Articles IV and V hereof shall
survive for one (1) year after the Closing without regard to any investigation
made by any of the parties hereto. The representations and warranties set forth
in Section 4.22 shall survive for two (2) years after the Closing without regard
to any investigation made by the parties hereto; provided, however, that the
representation contained in Section 4.22 relating specifically to Taxes on the
net income of Morgan shall survive for one (1) year after the Closing. If a
claim is made prior to the applicable expiration period of a representation or
warranty, such representation or warranty shall survive until such claim is
finally resolved. The truth or validity of any representation or warranty set
forth in this Agreement which is made to the best knowledge of the party making
such representation or warranty shall not be affected by any facts or
information learned by such party after the date hereof.
7.4 INDEMNIFICATION BY SELLERS. Effective from and after the
--------------------------
Closing, Sellers shall indemnify Buyer and its successors and assigns
(collectively, the "Buyer Indemnified Parties"), from and against (i) any and
all Covered Liabilities (A) arising from or relating to any breach or violation
of any representation or warranty of Sellers; or (B) arising from or relating to
any violation of any covenant to be performed by Morgan or Sellers hereunder
prior to or at the Closing or by Sellers after the Closing; and (ii) on an
after-tax basis as to all Taxable Years, (A) any and all Taxes of Morgan or any
Buyer Indemnified Party arising out of any breach of any representation or
warranty set forth in Section 4.22 hereof or any covenant or agreement set forth
in Section 7.1 or 7.2 hereof, regardless of the Taxable Year or other taxable
period to which such Taxes relate, and (B) any and all Taxes incurred by Sellers
attributable to transactions consummated pursuant to this Agreement. Sellers'
obligations under clauses (i) and (ii) above shall only apply to the extent that
Buyer's Covered Liabilities arising from or relating to each individual breach
or violation under said clauses (i) and (ii) exceed $50,000.
20
<PAGE>
7.5 INDEMNIFICATION BY BUYER. Effective from and after the Closing,
------------------------
Buyer shall indemnify Sellers and each of their heirs, executors, successors and
assigns (collectively, the "Sellers Indemnified Parties"), from and against any
and all Covered Liabilities arising from or relating to any breach or violation
of any covenant to be performed by Buyer hereunder. Buyer's obligations under
this Section 7.5 shall only apply to the extent that Sellers' Covered
Liabilities arising from or relating to each individual breach or violation
under this Section exceed $50,000.
7.6 CONTESTS.
--------
(a) Upon the receipt by the Buyer Indemnified Parties or the Sellers
Indemnified Parties (each, an "Indemnified Party") of notice of any pending or
threatened claim, Tax audit or assessment which may be subject to
indemnification by the other party (the "Indemnifying Party") under Section 7.4
or 7.5 hereof, the Indemnified Party shall promptly notify the Indemnifying
Party in writing of the receipt of such notice. Within 10 days after such
notification is made, the Indemnifying Party may elect to represent the
interests of the Indemnified Party in any Action, Tax audit or other
administrative or court proceeding to the extent of the Indemnifying Party's
Liability under Section 7.4 or 7.5 hereof, as the case may be, and to employ
counsel of its choice at its expense. The Indemnifying Party shall not,
however, be entitled to settle, either administratively or after the
commencement of litigation, any claim which would increase any Liability of any
Indemnified Party without the Indemnified Party's prior written consent, which
consent shall not be unreasonably withheld. Notwithstanding the foregoing, the
Indemnified Party shall be entitled, at its expense, to participate in the
conduct of any Action, Tax audit or any other judicial or administrative
proceeding relating to any claim described in this Section 7.6.
(b) To the extent not controlled by the Indemnifying Party in
accordance with subsection (a) above, all Actions, Tax audits and other
administrative or court proceedings affecting any Indemnified Party shall be
controlled solely by the Indemnified Party. The Indemnified Party shall not,
however, be entitled to settle, either administratively or after the
commencement of litigation, any claim that is subject to indemnification by the
Indemnifying Party under Section 7.4 or 7.5 hereof, as the case may be, without
the Indemnifying Party's prior written consent, which consent shall not be
unreasonably withheld. Further, to the extent that any Indemnified Party
represents itself as a result of the Indemnifying Party's failure to elect to
undertake such representation pursuant to subsection (a) above, the Indemnified
Party's representation of itself shall be at the Indemnifying Party's expense.
(c) All indemnity payments shall be made by the applicable
Indemnifying Party within ten (10) days after notice from the applicable
Indemnified Party that the amount of such Liability has been finally determined.
All such payments shall be made in U.S. Dollars in immediately available funds.
Except as otherwise provided herein, any payment not made when due hereunder
shall thereafter bear interest at a rate equal to ten percent (10%) per annum,
compounded monthly, but in no event greater than this maximum rate allowed under
applicable law.
(d) Any payment (other than interest thereon) owing to a Buyer
Indemnified Party or a Seller Indemnified Party pursuant to this Agreement shall
be treated by all parties for all purposes as an adjustment to the Purchase
Price.
7.7 NO RIGHT OF CONTRIBUTION. After the Closing, Morgan shall not be
------------------------
liable to indemnify Sellers on account of the breach of any representation or
warranty or the nonfulfillment of any covenant
21
<PAGE>
or agreement of Sellers under this Agreement; and Sellers shall have no right of
contribution against Morgan.
7.8 INSURANCE PROCEEDS; TAX EFFECT. The amount of any
------------------------------
indemnification due to a Buyer Indemnified Party or Sellers Indemnified Party
pursuant to this Article VII shall be calculated after taking into account the
amount of all insurance proceeds received by such Buyer Indemnified Party or
Sellers Indemnified Party, as the case may be, and after taking into account any
Tax benefits or detriments realized by the Buyer Indemnified Party or Sellers
Indemnified Party, as the case may be.
ARTICLE 8
COVENANT NOT TO COMPETE
-----------------------
Benegas acknowledges and agrees that the reputation and goodwill of Morgan
is an integral part of its business success. Accordingly, as an inducement for
Buyer to enter into this Agreement, and for the benefit of Buyer and Morgan,
Benegas agrees that for a period of three years after the date hereof, Benegas
shall not, without Buyer's prior written consent (which may be withheld in
Buyer's sole and absolute discretion), directly or indirectly, own, manage,
operate, join, control, invest in or otherwise participate in the ownership,
management, operation or control of, or be connected as a partner, member,
consultant or otherwise with, any person or entity which, directly or
indirectly, competes with the current operations of Morgan; provided, however,
that (a) Benegas may own up to 5% of the outstanding capital stock of one or
more publicly-held corporations which compete with the current operations of
Morgan, as long as Benegas holds such capital stock as a passive investment only
and does not serve as an officer, director or other representative of such
company or companies, (b) Benegas may provide loans and other banking services
to companies that compete with Morgan so long as such banking services are
provided in the ordinary course of Benegas' banking business and do not include
any business or strategic planning and (c) Benegas may continue to be a
shareholder and continue his current activities with respect to Genetic
Resources, Inc.. Benegas agrees to maintain in confidence, and not to disclose
to any third party, any ideas, methods, developments, inventions, improvements,
business plans or information which is the confidential information of Morgan.
In the event the agreement in this Article VIII shall be determined by any court
of competent jurisdiction to be unenforceable by reason of its extending for too
great a period of time or over too great a geographical area or by reason of its
being too extensive in any other respect, it shall be interpreted to extend only
over the maximum period of time for which it may be enforceable, and/or over the
maximum geographical area as to which it may be enforceable and/or to the
maximum extent in all other respects as to which it may be enforceable, all as
determined by such court in such action.
ARTICLE 9
MISCELLANEOUS
-------------
9.1 NOTICES. Unless otherwise provided herein, any notice, request,
-------
instruction or other document to be given hereunder by any party to the others
shall be in writing and delivered in person or by courier, telegraphed, telexed
or by facsimile transmission or mailed by certified mail, postage prepaid,
return receipt requested (such mailed notice to be effective on the date of such
receipt is acknowledged), as follows:
22
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
If to Sellers: Mr. Jose Alberto Benegas Lynch
Corporacion Metropolitana de Finanzas S.A.
Macacha Guemes 555
(1107) Buenos Aires, Argentina
Fax Number (54-1) 318-6800
With copies to: Genetic Resources (Latin America) Corporation
83 Shirley Street
Nassau, Bahamas
Fax Number: (598-2) 61-7614
Attn: Christopher Geoffrey Douglas Hooper
If to Buyer: Agrigenetics, Inc.
5501 Oberlin Road
San Diego, California 92121
Attention: Mr. Carl Eibl
Fax Number: (619) 453-0142
With a copy to: Latham & Watkins
701 "B" Street, Suite 2100
San Diego, California 92101
Attn: David C. Boatwright, Esq.
Fax Number: (619) 696-7419
</TABLE>
or to such other place and with such other copies as any party hereto may
designate as to itself by written notice to the others.
9.2 CHOICE OF LAW; SUBMISSION TO JURISDICTION. This Agreement shall
-----------------------------------------
be construed, interpreted and the rights of the parties determined in accordance
with the laws of Argentina, except with respect to matters of law concerning the
internal corporate affairs of any corporate entity which is a party to this
Agreement which shall be governed by the law of the jurisdiction under which the
respective entity derives its powers. Any legal action or proceeding with
respect to this Agreement may be brought solely in an Argentinean court located
in Buenos Aires, Argentina and, by execution and delivery of this Agreement,
each party irrevocably accepts for itself the jurisdiction of the aforesaid
court.
9.3 ENTIRE AGREEMENT. This Agreement, together with all exhibits and
----------------
schedules hereto constitute the entire agreement among the parties pertaining to
the subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties.
9.4 NO THIRD PARTY BENEFICIARIES. None of the provisions of this
----------------------------
Agreement shall be for the benefit of or enforceable by any third party.
9.5 LANGUAGE. This Agreement is being executed in the English and
--------
Spanish languages. In the event this Agreement becomes the subject of any
controversy, the Spanish version shall govern.
23
<PAGE>
9.6 RULES OF INTERPRETATION. In interpreting this Agreement, the
-----------------------
singular shall include the plural and the masculine shall include the feminine
and neuter and vice versa.
24
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
have caused this Agreement to be duly executed on their respective behalf by
their respective officers thereunto duly authorized, as of the day and year
first above written.
AGRIGENETICS, INC.
By: /s/ Carlton J. Eibl
-------------------
Its: Vice President
-------------------
MR. JOSE ALBERTO BENEGAS LYNCH
/s/ Jose Alberto Benegas Lynch
------------------------------
MS. MARIA ALEJANDRA REBAGLIATI
/s/ Maria Alejandra Rebagliati
------------------------------
GENETIC RESOURCES (LATIN AMERICA) CORPORATION
By: /s/ Pablo H. Miguens
--------------------
Its: Representative
------------------
25
<PAGE>
EXHIBITS
EXHIBIT A - Opinion of Estudio de los Dres. O'Farrell (counsel to Sellers)
EXHIBIT B - Opinion of Loreen Collins
EXHIBIT C - Opinion of Estudio Beccar Varela
<PAGE>
DISCLOSURE SCHEDULES
<TABLE>
<CAPTION>
<C> <S>
Schedule 4.2 - Subsidiaries
Schedule 4.7 - Facilities and Owned Real Property
Schedule 4.8 - Contracts, Commitments and Leases
Schedule 4.9 - Permits
Schedule 4.10 - Conflicts or Violations of Contracts and Leases
Schedule 4.11 - Financial Statements
Schedule 4.13 - Litigation
Schedule 4.14 - Labor Matters
Schedule 4.19(a) - Proprietary Rights
Schedule 4.19(b) - Royalties and Licenses in Respect of Proprietary Rights
Schedule 4.20 - Employee Benefit Plans
Schedule 4.21 - Transactions with Certain Persons
Schedule 4.22 - Taxes
Schedule 4.23 - Insurance
Schedule 4.26 - Environmental Matters
Schedule 4.27 - Banking Relationships
Schedule 4.28 - Payments and Other Distributions
</TABLE>
<PAGE>
EXHIBIT 99.1
Press Release
<PAGE>
FOR IMMEDIATE RELEASE CONTACT: Michael Sund
October 1, 1996 (619) 453-8030
MYCOGEN ACQUIRES MAJOR SOUTH AMERICAN SEED COMPANY
SAN DIEGO, Calif. -- Mycogen Corporation (Nasdaq: MYCO) has expanded its
seed business in South America with the acquisition of Morgan Seeds, Argentina's
third largest seed company.
Jerry Caulder, Mycogen's chairman and chief executive officer, said Mycogen
paid $27.4 million in cash, including repayment of long-term debt, for Morgan,
which has annual sales of approximately $25 million.
"This acquisition immediately expands Mycogen's seed sales base and opens
up significant growth opportunities in one of the world's most important markets
for hybrid corn and sunflower seed," Caulder said. "Our genetics and insect-
resistance and oil seed technology will provide the basis for many new, value-
added, products for South America."
Mycogen's wholly owned Mycogen Seeds subsidiary is the sixth largest seed
company in the United States, and ranks fourth in sales of seed corn, which
accounts for about half of $3 billion in total annual seed sales to U.S.
farmers. Argentina ranks third, behind the U.S. and France in hybrid corn
production, and is the world's largest sunflower producer. Mycogen Seeds is the
second leading U.S. marketer of hybrid sunflower seed.
Mycogen will combine its Agrigenetics, S.A., subsidiary in Argentina with
Morgan, and has appointed its Argentinean general manager, Ezequiel Fonseca, to
head the combined company, which will market seed products under the Morgan(R)
brand in several South American countries.
"Increased international distribution leverages our research and
development investments in the U.S.," said Carl Eibl, Mycogen's president and
chief operating officer. "Mycogen will supply technology and resources to help
Morgan grow. We will share germ plasm and value-added traits, but Morgan's
management will have considerable autonomy in product development and sales."
Mycogen's forward-looking statements are based on projections and estimates
regarding the economy and the seed and crop protection industries. Various
factors could cause actual results to vary significantly from management's
expectations. These include the impact of weather on production and sales,
actions by competitors and regulatory agencies, intellectual property positions,
fluctuations in international currency, commodity prices and crop acreage.
Mycogen is a diversified agricultural biotechnology company that develops
and markets technology-based products and provides crop protection services to
control agricultural pests and improve food and fiber production. Mycogen Seeds
develops and markets planting seeds for improved crop varieties with genetically
enhanced insect-resistance and other value-added characteristics. Mycogen Crop
Protection develops and markets environmentally compatible biopesticides and
provides crop protection services to growers of high value crops in California
and Arizona.
# # #
NOTE: Mycogen news releases are available on the company's World Wide Web site:
http://www.mycogen.com
