Exhibit 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
dated as of
August 14, 2006
by and among
MONSANTO COMPANY
MONSANTO SUB, INC.
and
DELTA AND PINE LAND COMPANY
TABLE OF CONTENTS
Page
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ARTICLE 1.
THE MERGER..................................................1
SECTION 1.01. The Merger..............................1
SECTION 1.02. Conversion of Shares....................2
SECTION 1.03. Payment for Shares......................3
SECTION 1.04. Certain Adjustments.....................5
SECTION 1.05. Stock Options and Company Awards........6
ARTICLE 2.
THE SURVIVING CORPORATION...................................6
SECTION 2.01. Certificate of Incorporation............6
SECTION 2.02. Bylaws..................................6
SECTION 2.03. Directors and Officers..................7
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............7
SECTION 3.01. Corporate Organization..................7
SECTION 3.02. Authorization...........................9
SECTION 3.03. Capital Stock...........................9
SECTION 3.04. Subsidiaries............................9
SECTION 3.05. Consents and Approvals; No Violation...10
SECTION 3.06. SEC Reports and Financial
Statements.............................11
SECTION 3.07. Absence of Undisclosed Liabilities.....12
SECTION 3.08. Changes................................12
SECTION 3.09. Investigations; Litigation.............14
SECTION 3.10. Contracts and Commitments..............15
SECTION 3.11. Environmental and Safety Matters.......16
SECTION 3.12. Taxes..................................18
SECTION 3.13. Employment Agreements..................19
SECTION 3.14. Change of Control Provisions...........19
SECTION 3.15. Employee Benefit Plans.................19
SECTION 3.16. Licenses...............................21
SECTION 3.17. Real Estate Leases.....................21
SECTION 3.18. Real Property..........................21
SECTION 3.19. Intellectual Property and Germplasm....22
SECTION 3.20. Compliance with Other Instruments
and Laws...............................24
SECTION 3.21. Employees..............................24
SECTION 3.22. Information Supplied...................24
SECTION 3.23. Rights Agreement.......................25
SECTION 3.24. Certain Fees...........................25
SECTION 3.25. Opinion of Financial Advisor...........25
SECTION 3.26. Voting Requirements....................25
SECTION 3.27. State Takeover Statutes................25
SECTION 3.28. No Additional Representations and
Warranties.............................26
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB....26
SECTION 4.01. Corporate Organization.................26
SECTION 4.02. Authorization..........................26
SECTION 4.03. No Prior Activities; Ownership of
Merger Sub Shares......................26
SECTION 4.04. Information Supplied...................27
SECTION 4.05. Consents and Approvals; No
Violations.............................27
SECTION 4.06. Certain Fees...........................27
SECTION 4.07. Necessary Financing....................28
SECTION 4.08. No Buyer Stockholder Vote..............28
ARTICLE 5.
COVENANTS OF THE COMPANY...................................28
SECTION 5.01. Conduct of Business by the Company
and its Subsidiaries Pending the
Merger.................................28
SECTION 5.02. Stockholders' Meeting..................30
SECTION 5.03. Access to Information; Cooperation;
Related Matters........................31
SECTION 5.04. No Solicitation........................33
SECTION 5.05. Employment and Noncompetition
Agreements.............................35
ARTICLE 6.
COVENANTS OF PARENT AND MERGER SUB.........................36
SECTION 6.01. Confidentiality........................36
SECTION 6.02. Indemnification........................36
SECTION 6.03. Operations After the Effective Time....36
SECTION 6.04. Employee Benefits......................37
ARTICLE 7.
COVENANTS OF BUYER AND THE COMPANY.........................37
SECTION 7.01. Best Efforts...........................37
SECTION 7.02. Certain Filings........................38
SECTION 7.03. Public Announcements...................38
SECTION 7.04. Further Assurances.....................38
SECTION 7.05. Notices of Certain Events..............38
SECTION 7.06. Preparation of the Company Proxy
Statement..............................39
SECTION 7.07. Consents; Antitrust Matters............39
SECTION 7.08. Confidentiality........................42
SECTION 7.09. Litigation Stay........................42
ARTICLE 8.
CONDITIONS TO THE MERGER...................................42
SECTION 8.01. Conditions to the Obligations of
Each Party.............................42
SECTION 8.02. Burden of Proof........................44
ARTICLE 9.
TERMINATION................................................44
SECTION 9.01. Termination............................44
SECTION 9.02. Waiver.................................46
SECTION 9.03. Closing................................46
SECTION 9.04. Effect of Termination..................46
ARTICLE 10.
MISCELLANEOUS..............................................49
SECTION 10.01. Notices................................49
SECTION 10.02. Survival of Representations and
Warranties.............................50
SECTION 10.03. Amendments; No Waivers.................50
SECTION 10.04. Expenses...............................50
SECTION 10.05. Successors and Assigns.................51
SECTION 10.06. Governing Law; Submission to
Jurisdiction; Waiver of Jury Trial.....51
SECTION 10.07. Counterparts; Effectiveness............52
SECTION 10.08. Headings...............................52
SECTION 10.09. No Third Party Beneficiaries...........52
SECTION 10.10. Remedies...............................52
SECTION 10.11. Severability...........................52
SECTION 10.12. Rules of Construction..................53
SECTION 10.13. Entire Agreement.......................53
SECTION 10.14. Certain Defined Terms..................53
DEFINED TERMS
Term Page Number
- ---- -----------
Acquisition Transaction..........................................34
Agreement.........................................................1
Buyer Material Adverse Effect....................................28
CERCLA...........................................................18
Certificate of Merger.............................................2
Certificates......................................................4
Closing..........................................................46
Closing Date.....................................................46
Company...........................................................1
Company 10-K.....................................................11
Company 10-Qs....................................................11
Company Award.....................................................6
Company Common Stock..............................................2
Company Disclosure Document......................................25
Company Disclosure Letter.........................................7
Company Proxy Statement..........................................10
Company Reports..................................................11
Company Stock Option Plans........................................6
Company Stockholders Meeting.....................................31
Confidentiality Agreement........................................31
Delaware Law......................................................1
Effective Time....................................................2
Environmental and Safety Requirements............................17
Environmental Lien...............................................18
ERISA............................................................20
Exchange Act.....................................................10
Filed Company SEC Documents.......................................7
Governmental Entity..............................................10
Hazardous Materials..............................................17
HSR Act..........................................................10
Indemnified Parties..............................................36
Investigation....................................................14
knowledge of the Company.........................................15
Licenses.........................................................21
Lien.............................................................21
Material Adverse Change..........................................12
Material Adverse Effect...........................................7
Merger............................................................1
Merger Sub........................................................1
Parent............................................................1
Paying Agent......................................................3
Payment Fund......................................................3
Permitted Liens..................................................22
Plans............................................................20
Release..........................................................17
Rights............................................................2
Rights Agreement.................................................25
Securities Act...................................................11
Series M Preferred Stock..........................................2
Shares............................................................2
Superior Proposal................................................35
Surviving Corporation.............................................2
Tax Returns......................................................18
Transaction.......................................................2
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of August 14, 2006, by and among MONSANTO COMPANY, a
Delaware corporation ("Parent"), MONSANTO SUB, INC., a Delaware corporation
and a wholly-owned subsidiary of Parent ("Merger Sub"), and DELTA AND PINE
LAND COMPANY, a Delaware corporation (the "Company").
RECITALS
WHEREAS, the Boards of Directors of Parent, Merger Sub and the Company
deem it advisable and in the best interests of the stockholders of such
corporations to effect the merger of Merger Sub with and into the Company
pursuant to this Agreement;
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and
the Company have approved the acquisition of the Company by Parent through
the merger of Merger Sub with and into the Company on the terms set forth
in this Agreement, and the Board of Directors of the Company has
unanimously resolved to recommend that this Agreement and the transactions
contemplated hereby, including such merger, be approved and adopted by the
stockholders of the Company;
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, Parent, the Company and the other parties named therein are
entering into several settlement agreements, dated as of the date hereof,
copies of which are attached hereto as Exhibits A, B and C, respectively
(collectively, the "Settlement Agreements"); and
WHEREAS, the parties hereto desire to make certain representations,
warranties, covenants and agreements in connection with the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
representations, warranties, covenants and agreements set forth herein, the
parties agree as follows:
ARTICLE 1.
THE MERGER
SECTION 1.01. The Merger.
(a) At the Effective Time (as defined in Section 1.01(b) hereof),
Merger Sub shall be merged (the "Merger") with and into the Company in
accordance with the Delaware General Corporation Law ("Delaware Law"),
whereupon the separate existence of Merger Sub shall cease, and the
Company shall be the surviving corporation (the "Surviving
Corporation"). The Merger is sometimes hereinafter referred to as the
"Transaction."
(b) On the Closing Date (as defined in Section 9.03), the Company
and Merger Sub will file a certificate of merger with the Secretary of
State of the State of Delaware (the "Certificate of Merger") and make
all other filings or recordings required by Delaware Law in connection
with the Merger. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Secretary of State of the
State of Delaware and any additional requirements of Delaware Law are
complied with or at such later time as is specified in the Certificate
of Merger (the "Effective Time").
(c) From and after the Effective Time, the Surviving Corporation
shall possess all the assets, rights, privileges, powers and
franchises and be subject to all of the liabilities, restrictions,
disabilities and duties of the Company and Merger Sub, all as provided
under Delaware Law.
SECTION 1.02. Conversion of Shares.
(a) At the Effective Time and by virtue of the Merger and without
any action on the part of the holders thereof or any other Person:
(i) each share of common stock of the Company, $0.10 par value per
share ("Company Common Stock"), and Series M Convertible Non-Voting
Preferred Stock of the Company ("Series M Preferred Stock") held by
the Company as treasury stock or owned by Parent or any subsidiary of
Parent immediately prior to the Effective Time (collectively, the
"Non-Converted Shares") shall be canceled, and no payment shall be
made with respect thereto;
(ii) subject to Section 1.02(b) and Section 1.03, each share of
Company Common Stock, and the associated preferred stock purchase
right (the "Rights"), and each share of Series M Preferred Stock
(collectively, the "Shares") outstanding immediately prior to the
Effective Time shall, except as otherwise provided in clause (i) of
this subsection, be converted into the right to receive $42.00 in
cash, without interest (the "Merger Consideration"). As of the
Effective Time, all such Shares shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist,
and each holder of a certificate representing any such Shares shall
cease to have any rights with respect thereto, except the right to
receive the Merger Consideration upon surrender of such certificate in
accordance with Section 1.03 hereof; and
(iii) each share of common stock of Merger Sub, $0.01 par value per
share, outstanding immediately prior to the Effective Time shall be
converted into one share of common stock of the Surviving Corporation,
$0.01 par value per share.
(b) Notwithstanding any provision of this Agreement to the
contrary and to the extent available under Delaware Law, any Shares
outstanding immediately prior to the Effective Time that are held by a
stockholder (a "Dissenting Stockholder") who has neither voted in
favor of the adoption of this Agreement nor consented thereto in
writing and who has demanded properly in writing appraisal for such
Shares and otherwise properly perfected and not withdrawn or lost his,
her or its rights (the "Dissenting Shares" and, together with the
Non-Converted Shares, the "Excluded Shares") in accordance with
Section 262 of Delaware Law will not be converted into, or represent
the right to receive, the Merger Consideration. Such Dissenting
Stockholders will be entitled to receive payment of the appraised
value of the Dissenting Shares held by them in accordance with the
provisions of such Section 262, except that all Dissenting Shares held
by stockholders who have failed to perfect or who effectively have
withdrawn or lost their rights to appraisal of such Dissenting Shares
pursuant to Section 262 of Delaware Law will thereupon be deemed to
have been converted into, and represent the right to receive, the
Merger Consideration in the manner provided in Section 1.02(a)(ii)
hereof and will no longer be Dissenting Shares. The Company will give
Parent prompt notice of any written demands for appraisal, attempted
withdrawals of such demands, and any other instruments served pursuant
to applicable law received by the Company relating to stockholders'
rights of appraisal. The Company will give Parent the opportunity to
participate in and direct all negotiations and proceedings with
respect to demands for appraisal. The Company will not, except with
the prior written consent of Parent, make any payment with respect to
any demands for appraisals of Dissenting Shares, offer to settle or
settle any such demands or approve any withdrawal or other treatment
of any such demands.
SECTION 1.03. Payment for Shares.
(a) As of the Effective Time, Parent and Merger Sub shall enter
into an agreement with a bank or trust company selected by Parent
(which is reasonably satisfactory to the Company) as paying agent for
the Merger (the "Paying Agent "), which shall provide that Parent
shall deposit with the Paying Agent as of the Effective Time, for the
benefit of the holders of Shares (other than Excluded Shares), for
exchange in accordance with this Article 1, through the Paying Agent,
cash in an amount sufficient to make the payments to the holders of
Shares (other than Excluded Shares) contemplated by Section
1.02(a)(ii) hereof (the "Payment Fund"). The Payment Fund shall not be
used for any purpose other than as provided in the immediately
preceding sentence. The Payment Fund shall be invested by the Paying
Agent as directed by Parent; provided, however, that such investments
shall be in obligations of or guaranteed by the United States of
America or any agency or instrumentality thereof and backed by the
full faith and credit of the United States of America, in commercial
paper obligations rated A-1 or P-1 or better by Moody's Investors
Service, Inc. or Standard & Poor's Corporation, respectively, or in
certificates of deposit, bank repurchase agreements or banker's
acceptances of commercial banks with capital exceeding $1 billion
(based on the most recent financial statements of such bank which are
then publicly available). Any net profit resulting from, or interest
or income produced by, such investments shall be property of and
payable to Parent, provided in the event of any losses due to the
investment of the Payment Fund, Parent shall be required to deposit
such additional amounts as may be required to ensure that the Payment
Fund is sufficient to make any and all payments contemplated by
Section 1.02(a)(ii) hereof.
(b) As soon as reasonably practicable after the Effective Time,
the Paying Agent shall mail to each holder of record of a certificate
or certificates which immediately prior to the Effective Time
represented outstanding Company Common Stock (the "Certificates")
whose shares were converted into the right to receive the Merger
Consideration pursuant to Section 1.02(a)(ii) hereof, (i) a letter of
transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Paying Agent and shall be in such
form and have such other provisions as Parent may reasonably specify)
and (ii) instructions for use in surrendering the Certificates in
exchange for the Merger Consideration. Upon surrender of a Certificate
for cancellation to the Paying Agent, together with such letter of
transmittal, duly executed, and such other documents as may reasonably
be required by the Paying Agent, the holder of such Certificate shall
be entitled to receive in exchange therefor (subject to the terms of
Section 1.03(g)) an amount in cash equal to the Merger Consideration
with respect to each share of Company Common Stock represented by the
Certificate so surrendered, and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of
Shares which is not registered in the transfer records of the Company,
the Merger Consideration payable in respect of the Shares represented
by such Certificate may be paid to a Person other than the Person in
whose name the Certificate so surrendered is registered if such
Certificate is properly endorsed or otherwise in proper form for
transfer and the Person requesting such issuance pays any transfer or
other taxes required by reason of the payment of such Merger
Consideration to a Person other than the registered holder of such
Certificate or establishes to the satisfaction of Parent that such tax
has been paid or is not applicable. Until surrendered as contemplated
by this Section 1.03, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon
such surrender the Merger Consideration which the holder thereof has
the right to receive in respect of such Certificate pursuant to the
provisions of this Article 1. No interest shall be paid or will accrue
on any cash payable to holders of Certificates pursuant to the
provisions of this Article 1.
(c) After the Effective Time, there will be no transfers on the
stock transfer books of the Company of Shares that were outstanding
immediately prior to the Effective Time other than to settle transfers
of Shares that occurred prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Paying Agent, they
will be cancelled and exchanged for the Merger Consideration as
provided in this Section 1.03.
(d) Any portion of the Payment Fund which remains undistributed
to the holders of the Certificates for six months after the Effective
Time shall be delivered to Parent, upon demand, and any holders of the
Certificates who have not theretofore complied with this Article 1
shall thereafter look only to Parent for payment of their claims for
Merger Consideration.
(e) Neither Parent, Merger Sub, the Company, the Surviving
Corporation nor the Paying Agent shall be liable to any Person in
respect of any amount delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any
Certificate shall not have been surrendered prior to two years after
the Effective Time (or immediately prior to such earlier date on which
any Merger Consideration would otherwise escheat to or become the
property of any Governmental Entity (as defined in Section 3.05
hereof)), any such Merger Consideration shall, to the extent permitted
by applicable law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any Person previously
entitled thereto.
(f) If any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such Person of a bond in
such reasonable amount as the Surviving Corporation may direct as
indemnity against any claim that may be made against it with respect
to such Certificate, the Paying Agent shall issue in exchange for such
lost, stolen or destroyed Certificate the Merger Consideration due to
such person pursuant to this Agreement in respect thereof.
(g) The Surviving Corporation and the Paying Agent shall deduct
and withhold from amounts otherwise payable pursuant to this Agreement
to any holder of Shares or holder of Stock Options or Company Awards
any amounts required to be deducted and withheld with respect to such
payments under the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder (the "Code"), or any
provision of state, local or foreign law. Any amounts so deducted and
withheld will be timely paid to the applicable Governmental Entity and
will be treated for all purposes of this Agreement as having been paid
to the holder of the Shares or holders of Stock Options or Company
Awards, as the case may be, in respect of which such deduction and
withholding was made.
SECTION 1.04. Certain Adjustments. If after the date hereof and on or
prior to the Effective Time the outstanding shares of Company Common Stock
shall be changed into a different number, class or series of shares or any
other security by reason of any reclassification, recapitalization,
reorganization, merger, business combination, split-up, stock split,
combination or exchange of shares, or any dividend payable in stock or
other securities shall be declared thereon with a record date within such
period, or any similar event shall occur, the Merger Consideration shall be
equitably adjusted to reflect such change; provided, however, that nothing
contained herein shall be construed to permit the Company to take any
action with respect to its securities that is prohibited by the terms of
this Agreement.
SECTION 1.05. Stock Options and Company Awards.
(a) As of the Effective Time, each outstanding stock option to
purchase Company Common Stock (the "Stock Options"), whether granted
under the Company's 1995 Amended and Restated Long-Term Incentive Plan
or the Company's 2005 Omnibus Stock Plan (collectively, the "Company
Stock Option Plans") or otherwise, shall be cancelled and terminated
and the holder of such Stock Option will, in full settlement of such
Stock Option and in exchange for the surrender to the Company of any
certificate or other document evidencing such Stock Option, receive
from the Surviving Corporation an amount (subject to Section 1.03(g))
in cash equal to the product of (i) the excess, if any, of the Merger
Consideration over the exercise price per share of Company Common
Stock of such Stock Option multiplied by (ii) the number of shares of
Company Common Stock subject to such Stock Option (with the aggregate
amount of such payment rounded down to the nearest whole cent). The
holders of Stock Options will have no further rights in respect of any
Stock Options from and after the Effective Time.
(b) As of the Effective Time, each outstanding award (including
restricted stock, deferred stock, phantom stock, stock equivalents and
stock units), but excluding Stock Options (each a "Company Award"),
under the Company Stock Option Plans shall be cancelled and terminated
and the holder thereof shall be entitled to receive (subject to
Section 1.03(g)) from the Surviving Corporation an amount in cash
equal to the Merger Consideration in respect of each share of Company
Common Stock represented thereby, without interest. The holders of
Company Awards will have no further rights in respect of any such
Company Award from and after the Effective Time.
(c) Prior to the Effective Time, the Company will adopt such
resolutions and will take such other actions as shall be required to
effectuate the actions contemplated by this Section 1.05, without
paying any consideration or incurring any debts or obligations on
behalf of the Company or the Surviving Corporation, including, without
limitation, accelerating and causing the complete vesting, as of the
Effective Time, of all Stock Options and Company Awards.
ARTICLE 2.
THE SURVIVING CORPORATION
SECTION 2.01. Certificate of Incorporation. The certificate of
incorporation of Merger Sub in effect at the Effective Time shall be the
certificate of incorporation of the Surviving Corporation until amended in
accordance with applicable law, except that the name set forth in such
certificate of incorporation shall be changed to Delta and Pine Land
Company.
SECTION 2.02. Bylaws. The bylaws of Merger Sub in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until
amended in accordance with applicable law.
SECTION 2.03. Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed in accordance with
applicable law, (a) the directors of Merger Sub at the Effective Time shall
constitute the directors of the Surviving Corporation, and (b) the officers
of the Company at the Effective Time shall be the officers of the Surviving
Corporation.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub that,
except as set forth in (i) the disclosure letter (the "Company Disclosure
Letter") delivered by the Company to Parent and Merger Sub
contemporaneously with the execution of this Agreement or (ii) in (x) the
Company 10-K or the Company 10-Qs (excluding any amendments to the
foregoing documents filed after the date hereof), (y) any current report on
Form 8-K (or any amendment thereto) that was filed by the Company with the
Securities and Exchange Commission (the "SEC") following the date of the
Company 10-K and prior to the date hereof (collectively, the "Current
Reports") or (z) the Company's definitive proxy statement filed by the
Company with the SEC on November 19, 2005 (excluding, in the case of
clauses (x), (y) and (z) immediately above, (A) all exhibits (other than
press releases filed as exhibits to any such Current Report) and (B) all
disclosures in any "Risk Factors" section contained in any of the foregoing
documents) (the "Filed Company SEC Documents"), it being agreed that all
disclosures in the Company Disclosure Letter in any one or more sections
referred to therein shall be deemed to have been disclosed in response to
each relevant and/or applicable section of this Agreement, so long as the
relevance of such disclosures to the representations made by the Company in
each such section is reasonably apparent:
SECTION 3.01. Corporate Organization. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has all requisite corporate power and authority to
own, operate and lease its properties and assets and to carry on its
business as it is now being conducted. The Company is duly qualified to do
business and is in good standing in each jurisdiction in which 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 or to be in good standing would not, individually or in the
aggregate, have a material adverse effect on the business, assets or
financial condition of the Company and the Subsidiaries taken as a whole
(after giving effect to the terms set forth in clauses (a)-(h) immediately
below, a "Material Adverse Effect"), except for any effect resulting from
or relating to:
(a) conditions or circumstances generally affecting the cotton
and soybean planting seed industries, including any conditions or
circumstances resulting from reductions in planted acreage that
affects the cotton and soybean industries generally (other than any
such conditions or circumstances that affect the Company or its
Subsidiaries in a materially disproportionate manner when compared to
the effects of such conditions and circumstances on other Persons
engaged in the cotton and soybean planting seed industries, provided
that only the disproportionate amount shall be considered in
determining whether such conditions or circumstances would have a
material adverse effect on the business, assets or financial condition
of the Company and the Subsidiaries taken as a whole);
(b) the sale of seed containing technology licensed by the
Company or any Subsidiary from Parent or any of Parent's Affiliates;
(c) any of the litigation matters or investigations specifically
described in the Company Disclosure Letter;
(d) any change or effect relating to general political or
economic conditions, or resulting from or arising out of developments
or conditions in agricultural, credit, financial or securities markets
in general, including, without limitation, any such change or effect
caused by changes to government agricultural policies, acts of
terrorism or war (whether or not declared) or any material worsening
of such conditions existing as of the date of this Agreement,
excluding, for all purposes of this clause (d), any such change or
effect that affects the Company or its Subsidiaries in a materially
disproportionate manner when compared to the effects of such changes
and effects on other Persons engaged in the cotton and soybean
planting seed industries (provided that only the disproportionate
amount shall be considered in determining whether such change or
effect would have a material adverse effect on the business, assets or
financial condition of the Company and the Subsidiaries taken as a
whole);
(e) any weather condition or any hurricane, earthquake or other
natural disaster;
(f) any change or effect primarily attributable to the execution
and public announcement of this Agreement, compliance by the Company
and its Subsidiaries with the terms of this Agreement (other than any
such change or effect that arises due to compliance by the Company and
its Subsidiaries with the terms of Section 5.01(a) that require that
the Company and its Subsidiaries to conduct their respective
businesses in the ordinary and usual course) or the consummation of
the transactions contemplated hereby, excluding any such change or
effect resulting from any change of control or similar provision
contained in any agreement to which the Company or any Subsidiary is a
party or is otherwise bound (other than any such change or effect
resulting from any change of control or similar provision contained in
any agreement that is listed in Section 3.14 of the Company Disclosure
Letter);
(g) (i) actions taken by Parent or any of its Affiliates, (ii)
insects or weeds developing resistance to the technologies of Parent
or its Affiliates or (iii) actions of any Governmental Entity with
respect to the technologies of Parent and its Affiliates or from the
failure by Parent or any of its Affiliates to obtain or maintain
regulatory approvals with respect to the technology of Parent or its
Affiliates; or
(h) any currency fluctuations.
SECTION 3.02. Authorization. The Company has the necessary corporate
power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement by the
Company, the performance by the Company of its obligations hereunder and
the consummation by the Company of the transactions contemplated hereby
have been duly and validly authorized by the Company's Board of Directors,
have been unanimously approved by the Company's Board of Directors prior to
Parent or Merger Sub becoming an "Interested Stockholder" as defined in
Section 203 of Delaware Law and have been approved as otherwise required by
the Company's certificate of incorporation and bylaws, each as amended.
Except for the approval of this Agreement and the Merger by the Company's
stockholders, no other corporate proceeding on the part of the Company is
necessary for the execution and delivery of this Agreement by the Company,
the performance of the Company's obligations hereunder or the consummation
by the Company of the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by the Company and constitutes
a legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, moratorium, reorganization
or other laws affecting creditors' rights generally or by the availability
of equitable remedies generally.
SECTION 3.03. Capital Stock. The authorized capital stock of the
Company consists of: (a) 100,000,000 shares of Company Common Stock, of
which, as of August 14, 2006, there were (i) 41,943,690 shares issued and
outstanding, (ii) 1,066,667 shares reserved for issuance upon conversion of
Series M Preferred Stock, and (iii) 5,637,600 shares held in the Company's
treasury (all of which shares are included in the number of issued and
outstanding shares in clause (i) immediately above); and (b) 2,000,000
shares of preferred stock, $0.10 par value per share, consisting of (i)
501,989 shares designated for issuance upon the exercise of the Rights as
Series A Junior Participating Preferred Stock, of which no shares are
issued or outstanding, and (ii) 1,066,667 shares designated as Series M
Preferred Stock, all of which were issued and outstanding as of August 14,
2006. All of the outstanding shares of capital stock of the Company have
been validly issued and are fully paid, nonassessable and free of
preemptive rights with no personal liability attaching to the ownership
thereof. As of August 14, 2006, except for the Rights, the Series M
Preferred Stock and options to acquire not more than 2,829,110 shares of
Company Common Stock pursuant to the Company Stock Option Plans, there are
no outstanding subscriptions, options, warrants, rights, contracts or other
arrangements or commitments obligating the Company or any Subsidiary to
issue or sell any shares of the Company's or any Subsidiary's capital stock
or other equity interests or any securities convertible into or
exchangeable for shares of the Company's or any Subsidiary's capital stock
or other equity interests.
SECTION 3.04. Subsidiaries. The Company Disclosure Letter lists all
direct and indirect Subsidiaries and, for purposes of Section 3.09(c) of
this Agreement, Anhui An Dai Cotton Seed Technology Company, Ltd., DeltaMax
Cotton, LLC and MDM Sementes De Algodao Limitada (collectively, the "Other
Entities"), shall be deemed a Subsidiary. Each Subsidiary is a corporation
or other form of business entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization, as applicable, and has all requisite corporate or other power
and authority to own, operate and lease its properties and assets and to
carry on its business as it is now being conducted, and each Subsidiary is
duly qualified to do business and is in good standing in each jurisdiction
in which the character of its properties owned or held under lease or the
nature of its activities makes such qualification necessary, in each case,
except where the failure to be so qualified or to be in good standing would
not, individually or in the aggregate, have a Material Adverse Effect. All
outstanding shares of capital stock of each Subsidiary are validly issued,
fully paid and nonassessable and are owned by the Company or another
Subsidiary free and clear of any liens, claims or encumbrances, except for
any director's qualifying shares.
SECTION 3.05. Consents and Approvals; No Violation. Except for (a)
applicable requirements of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder (the "Exchange Act"), including
the filing with and clearing by the SEC of a proxy statement relating to
the Company Stockholders Meeting, as amended or supplemented from time to
time (the "Company Proxy Statement"), (b) the filing of a Pre-Merger
Notification and Report Form by the Company and the expiration or
termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (c) applicable
requirements of foreign and supranational laws relating to antitrust and
anticompetition clearances, filings or notices, (d) the filing of the
Certificate of Merger as required by Delaware Law, (e) such filings and
consents as may be required under any environmental law pertaining to any
notification, disclosure or required approval triggered by the Merger or
the transactions contemplated by this Agreement, (f) filing with the NYSE
and the SEC with respect to the delisting and deregistration of the shares
of Company Common Stock and (g) such consents, approvals, orders,
authorizations, notifications, registrations, declarations and filings as
may be required under the corporation, takeover or blue sky laws of various
states of the United States and jurisdictions outside the United States, no
filing with or prior notice to, and no permit, authorization, consent or
approval of, any Person, including any federal, state, local, foreign,
supranational or other governmental department, court, commission,
governmental body, board, bureau, agency, tribunal or instrumentality
(each, a "Governmental Entity") is necessary for the consummation by the
Company of the transactions contemplated by this Agreement. Neither the
execution and delivery of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby nor
compliance by the Company with any of the provisions hereof will (i)
conflict with or result in any violation of any provision of the
certificate of incorporation or bylaws of the Company, each as amended, or
the certificate of incorporation, bylaws or analogous organizational
documents (in the case of non-corporate entities) of any Subsidiary, each
as amended, (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
license, agreement or other instrument or obligation to which the Company
or any Subsidiary is a party or by which any of them or any of their
properties or assets may be bound, or (iii) violate any federal, state,
local or foreign order, writ, injunction, decree, statute, rule or
regulation applicable to the Company, any Subsidiary or any of their
properties or assets, excluding from the foregoing clauses (ii) and (iii)
violations, breaches or defaults which would not, individually or in the
aggregate, have a Material Adverse Effect.
SECTION 3.06. SEC Reports and Financial Statements.
(a) Since August 31, 2002, the Company has filed all required
forms, reports and documents with the SEC required to be filed by it
pursuant to the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Securities Act") and the
Exchange Act (hereinafter collectively referred to as the "Company
Reports"), all of which have complied in all material respects with
all applicable requirements of the Securities Act and the Exchange Act
as of the filing date thereof. The Company Reports included (i) all
certificates required to be included therein pursuant to Sections 302
and 906 of the Sarbanes-Oxley Act of 2002, as amended, and the rules
and regulations promulgated thereunder ("SOX"), and (ii) the internal
control report --- and attestation of the Company's outside auditors
required by Section 404 of SOX, to the extent such report and
attestation was required to be included therein under SOX.
(b) None of the Company Reports, including, without limitation,
any financial statements or schedules included or incorporated by
reference therein, at the time filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
(c) The consolidated balance sheets and the related consolidated
statements of income, cash flow and stockholders' equity (including,
without limitation, the related notes thereto) of the Company and its
consolidated Subsidiaries included in the financial statements
contained in the Company's Annual Report on Form 10-K for the year
ended August 31, 2005 (the "Company 10-K") and in the Company's
Quarterly Reports on Form 10-Q for the quarters ended November 30,
2005, February 28, 2006 and May 31, 2006 (collectively, the "Company
10-Qs"), present fairly the consolidated financial position of the
Company and its consolidated Subsidiaries as of their respective
dates, and the results of consolidated operations and cash flows for
the periods then ended, all in conformity with United States generally
accepted accounting principles ("GAAP") applied on a consistent ----
basis, except as otherwise noted therein, and in the case of unaudited
interim financial statements subject to normal year-end audit
adjustments and except for certain footnote disclosures required by
generally accepted accounting principles.
(d) The management of the Company has (i) implemented disclosure
controls and procedures (as defined in Rule 13a-15(e) of the Exchange
Act) that are reasonably designed to ensure that material information
relating to the Company and its consolidated Subsidiaries is made
known to the chief executive officer and chief financial officer of
the Company by others within those entities, and (ii) timely
disclosed, based on its most recent evaluation, to the Company's
outside auditors and the audit committee of the Company's Board of
Directors (x) all significant deficiencies and material weaknesses in
the design or operation of internal controls over financial reporting
(as defined in Rule 13a-15(f) of the Exchange Act) which are
reasonably likely to adversely affect in any material respect the
Company's ability to record, process, summarize and report financial
data and (y) any fraud known to the Company, whether or not material,
that involves management or other employees who have a significant
role in the Company's internal controls over financial reporting.
Since September 1, 2004, any material change in internal control over
financial reporting or failure or inadequacy of disclosure controls
required to be disclosed in any Company Report has been so disclosed.
SECTION 3.07. Absence of Undisclosed Liabilities. Except as would not,
individually or in the aggregate, have a Material Adverse Effect, neither
the Company nor any Subsidiary has any liabilities (whether absolute,
accrued or contingent), except: (a) liabilities that are accrued and
reserved against in the consolidated balance sheet of the Company and the
Subsidiaries or reflected in the notes thereto, in each case included in
the Filed Company SEC Documents; (b) liabilities incurred since May 31,
2006 in the ordinary course of business; (c) liabilities which,
individually or in the aggregate, are not required under GAAP to be set
forth on the consolidated balance sheet of the Company and its consolidated
Subsidiaries; and (d) liabilities incurred after the date hereof as
specifically permitted by this Agreement.
SECTION 3.08. Changes. Since the date of the Company 10-K:
(a) there has been no material adverse change in the business,
assets or financial condition of the Company and its Subsidiaries
taken as a whole, (after giving effect to the terms set forth in
clauses (i)-(viii) immediately below, a "Material Adverse Change "),
except for any effect resulting from or relating to:
(i) conditions or circumstances generally affecting the
cotton and soybean planting seed industries, including any
conditions or circumstances resulting from reductions in planted
acreage that affects the cotton and soybean industries generally
(other than any such conditions or circumstances that affect the
Company or its Subsidiaries in a materially disproportionate
manner when compared to the effects of such conditions and
circumstances on other Persons engaged in the cotton and soybean
planting seed industries, provided that only the disproportionate
amount shall be considered in determining whether such conditions
or circumstances would have a material adverse effect on the
business, assets or financial condition of the Company and the
Subsidiaries taken as a whole);
(ii) the sale of seed containing technology licensed by the
Company or any Subsidiary from Parent or any of Parent's
Affiliates;
(iii) any of the litigation matters or investigations
specifically described in the Company Disclosure Letter;
(iv) any change or effect relating to general political or
economic conditions, or resulting from or arising out of
developments or conditions in agricultural, credit, financial or
securities markets in general, including, without limitation, any
such change or effect caused by changes to government
agricultural policies, acts of terrorism or war (whether or not
declared) or any material worsening of such conditions existing
as of the date of this Agreement, excluding, for all purposes of
this clause (iv), any such change or effect that affects the
Company or its Subsidiaries in a materially disproportionate
manner when compared to the effects of such changes and effects
on other Persons engaged in the cotton and soybean planting seed
industries (provided that only the disproportionate amount shall
be considered in determining whether such change or effect would
have a material adverse effect on the business, assets or
financial condition of the Company and the Subsidiaries taken as
a whole);
(v) any weather condition or any hurricane, earthquake or
other natural disaster;
(vi) any change or effect primarily attributable to the
execution and announcement of this Agreement, compliance by the
Company and its Subsidiaries with the terms of this Agreement
(other than any such change or effect that arises due to
compliance by the Company and its Subsidiaries with the terms of
Section 5.01(a) that require that the Company and its
Subsidiaries to conduct their respective businesses in the
ordinary and usual course) or the consummation of the
transactions contemplated hereby, excluding any such change or
effect resulting from any change of control or similar provision
contained in any agreement to which the Company or any Subsidiary
is a party or is otherwise bound (other than any such change or
effect resulting from any change of control or similar provision
contained in any agreement that is listed in Section 3.14 of the
Company Disclosure Letter);
(vii) (x) actions taken by Parent or any of its Affiliates,
(y) insects or weeds developing resistance to the technologies of
Parent or its Affiliates or (z) actions of any Governmental
Entity with respect to the technologies of Parent and its
Affiliates or from the failure by Parent or any of its Affiliates
to obtain or maintain regulatory approvals with respect to the
technology of Parent or its Affiliates; or
(viii) any currency fluctuations.
(b) there has been no direct or indirect redemption, purchase or
other acquisition of any shares of the Company's capital stock, or any
declaration, setting aside or payment of any dividend or other
distribution by the Company in respect of the Company's capital stock,
or any issuance of any shares of capital stock of the Company, or any
granting to any person of any option to purchase or other right to
acquire shares of capital stock of the Company or any stock split or
other change in the Company's capitalization, other than equity awards
in the ordinary course of business;
(c) neither the Company nor any Subsidiary has entered into or
agreed to enter into any new or amended contract with any works
council or trade or labor unions representing employees of the Company
or any Subsidiary;
(d) neither the Company nor any Subsidiary has entered into or
agreed to enter into any new or amended contract with any of the key
employees, officers or directors thereof or otherwise increased the
compensation payable to the key employees, officers or directors of
any such entity; and
(e) neither the Company nor any Subsidiary has (i) entered into
or amended any bonus, incentive compensation, deferred compensation,
profit sharing, retirement, pension, group insurance, severance or
termination indemnity or other benefit plan except as required by law
or regulations or (ii) made any contribution to any such plan except
for contributions specifically required pursuant to the terms thereof.
SECTION 3.09. Investigations; Litigation.
(a) Other than reviews pursuant to the Antitrust Laws which may
be commenced in connection with the execution and delivery of this
Agreement, there are no pending investigations, reviews or inquiries
by any Governmental Entity with respect to the Company or any
Subsidiary or with respect to the activities of any officer, director
or employee of the Company or any Subsidiary (an "Investigation"),
nor, to the knowledge of the Company, is an Investigation threatened,
nor has any Governmental Entity indicated, to the knowledge of the
Company, an intention to conduct an Investigation, other than
Investigations which would not, individually or in the aggregate, have
a Material Adverse Effect. For the purpose of this Agreement, (i)
"knowledge of the Company" and similar phrases means the actual
knowledge of any executive officer of the Company included in the
"Company Knowledge Group" set forth in the Company Disclosure Letter,
in each case assuming the compliance with the internal reporting
policies and procedures maintained by the Company and its Subsidiaries
as of the date hereof and (ii) "Antitrust Laws" means the HSR Act or
any other foreign or domestic antitrust, competition or premerger
notification, trade regulation law, regulation or order.
(b) (i) There are no actions or proceedings pending or, to the
knowledge of the Company, threatened against the Company or any
Subsidiary by any Governmental Entity (other than actions or
proceedings that may be commenced under the Antitrust Laws solely in
connection with the transactions contemplated by this Agreement),
which would, individually or in the aggregate, have a Material Adverse
Effect, (ii) there are no outstanding domestic or foreign judgments,
decrees or orders against the Company or any Subsidiary enjoining any
of them in respect of, or the effect of which is to prohibit, any
business practice or the acquisition of any property or the conduct of
business in any area that, individually or in the aggregate, would
have a Material Adverse Effect and (iii) neither the Company nor any
Subsidiary is in violation of, and none of them has received any claim
or notice that it is in violation of, any federal, state, local or
foreign laws, statutes, rules, regulations or orders promulgated or
judgments entered by any federal, state, local or foreign court or
other Governmental Entity, which violations, individually or in the
aggregate, would have a Material Adverse Effect.
(c) Without limiting the foregoing, to the knowledge of the
Company, neither the Company nor any of its Subsidiaries, nor any
director, officer, agent or employee of the Company or any of its
Subsidiaries, has, in the past five years, acting on behalf of the
Company or any of its Subsidiaries, (i) made, authorized, offered or
promised to make any unlawful payment or transfer of anything of
value, directly or indirectly through a third party, to any officer,
employee or representative of a foreign government or any department,
agency or instrumentality thereof (including any state-owned
enterprise), political party, political campaign or public
international organization, in violation of the U.S. Foreign Corrupt
Practices Act of 1977, as amended (the "FCPA"), or any applicable law
of similar effect; (ii) otherwise taken any action which would cause
the Company or any of its Subsidiaries to be in violation of the FCPA
or any application law of similar effect; or (iii) violated any
applicable law pertaining to export controls, antiboycott restrictions
or trade sanctions.
SECTION 3.10. Contracts and Commitments.
(a) As of the date hereof, the Company is not, nor is any
Subsidiary, a party to or bound by any oral or written contract:
(i) which is a "material contract" (as such term is defined
in Item 601(b)(10) of Regulation S-K promulgated under the
Securities Act) to be performed in full or in part after the date
of this Agreement that has not been filed or incorporated by
reference in the Company Reports;
(ii) that is a partnership, joint venture, strategic
alliance or cooperation agreement (or any agreement similar to
any of the foregoing), in each case which is material to the
Company and its Subsidiaries taken as a whole;
(iii) that prohibits the Company or any of its Subsidiaries
from freely engaging or competing in any line of business
anywhere in the world;
(iv) between the Company and any of its Affiliates (other
than Subsidiaries), directors or officers that is not on arms
length terms;
(v) pursuant to which the Company or any Subsidiary licenses
(as licensor or licensee) any cotton or soybean hybrids or any
germplasm or any other Intellectual Property related to cotton or
soybeans, in each case which is material to the Company and its
Subsidiaries taken as a whole, except in each case any of the
foregoing which is licensed to the Company or any Subsidiary by
the Parent or any of its Affiliates;
(vi) that involves an amount in excess of $1,500,000 and
pursuant to which the Company or any of its Subsidiaries has
incurred or accrued losses;
(vii) that by its terms may be terminated upon a change in
control of the Company or any of its Subsidiaries;
(viii) that commits the Company or any of its Subsidiaries
to purchase or sell any properties or assets outside of the
ordinary course of business for consideration in excess of
$1,500,000; or
(ix) that involves an unfulfilled obligation, individually
or in the aggregate, in excess of $1,500,000 and is incurred
outside the ordinary course of business and is not terminable by
the Company or any of its Subsidiaries upon less than 120
calendar days' notice for a cost of not less than $1,500,000.
The foregoing contracts and agreements to which the Company or any
Subsidiary are parties or are bound and that are listed in the Company
Disclosure Letter, together with all contracts and agreements filed as
exhibits to the Company Reports, are collectively referred to herein as the
"Company Material Contracts."
(b) (i) Each Company Material Contract is valid and binding on
the Company and any of its Subsidiaries that is a party thereto, as
applicable, and in full force and effect, except where the failure to
be valid, binding and in full force and effect would not, individually
or in the aggregate, have a Material Adverse Effect, (ii) the Company
and each of its Subsidiaries has and, to the knowledge of the Company,
all other parties thereto have, performed all obligations required to
be performed by such Person under each Company Material Contract,
except where such noncompliance would not, individually or in the
aggregate, have a Material Adverse Effect, and (iii) neither the
Company nor any of its Subsidiaries knows of, or has received written
notice of, the existence of any event or condition which constitutes,
or, after notice or lapse of time or both, will constitute, a default
on the part of the Company, any of its Subsidiaries or any other party
thereto under any Company Material Contract, except where such default
would not, individually or in the aggregate, have a Material Adverse
Effect.
SECTION 3.11. Environmental and Safety Matters. Except as would not,
individually or in the aggregate, have a Material Adverse Effect:
(a) The Company and its Subsidiaries are in compliance with all
applicable Environmental and Safety Requirements. "Environmental and
Safety Requirements" means all federal, state, local and foreign
statutes, regulations, permits, ordinances and other provisions having
the force or effect of law, all judicial and administrative orders and
determinations and all common law, in each case concerning public
health and safety, worker health and safety, and pollution or
protection of the environment (including without limitation, relating
to the presence, use, production, generation, handling,
transportation, treatment, storage, disposal, distribution, labeling,
testing, processing, discharge, Release or threatened Release (whether
onsite or offsite), control, or cleanup of any Hazardous Materials.
"Hazardous Materials" means any pollutant, contaminant, constituent,
chemical, raw material, product or by-product, petroleum or any
fraction thereof, asbestos or asbestos-containing material,
polychlorinated biphenyls, any hazardous waste, and any toxic,
radioactive, infectious or hazardous substance, material, or agent,
including all substances, materials or wastes which are subject to
regulation or give rise to liability under any Environmental and
Safety Requirements. "Release" has the meaning set forth in CERCLA.
(b) Without limiting the generality of the foregoing, the Company
and its Subsidiaries are in compliance with all permits, licenses and
other authorizations that are required pursuant to Environmental and
Safety Requirements for the occupation of their facilities and the
operation of their business.
(c) To the knowledge of the Company, the Company and its
Subsidiaries have not received any written notice, report or other
information alleging any liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise) or investigatory, removal,
remedial or corrective obligations, of the Company or its
Subsidiaries, in each case arising under Environmental and Safety
Requirements with respect to any of their respective current or former
properties and facilities or any current or former offsite properties
and facilities used in the business of the Company or its
Subsidiaries.
(d) The Company and its Subsidiaries have not treated, stored,
disposed of, arranged for or permitted the disposal of, transported,
handled, or Released, either onsite or offsite, any Hazardous
Materials, in each case so as to give rise to liabilities of the
Company or its Subsidiaries for response costs or natural resource
damages pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), as amended, or
similar state Environmental and Safety Requirements.
(e) Neither the Company nor its Subsidiaries have, either
expressly or by operation of law, assumed or undertaken any liability,
including without limitation any obligation for removal, corrective or
remedial action, of any other Person arising under any Environmental
and Safety Requirements.
(f) To the knowledge of the Company, no Environmental Lien has
attached to any property currently owned, leased or operated by the
Company or any Subsidiary. "Environmental Lien" means a lien, either
recorded or unrecorded, in favor of any Governmental Entity, arising
under Environmental and Safety Requirements.
(g) No facts or conditions at the current or former facilities or
properties of the Company or its Subsidiaries, or, to the knowledge of
the Company, any predecessor thereof, will prevent continued
compliance by the Company or any Subsidiary with applicable
Environmental and Safety Requirements, give rise to any investigatory,
removal, remedial or corrective obligations pursuant to Environmental
and Safety Requirements, or give rise to any other liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise)
pursuant to Environmental and Safety Requirements.
SECTION 3.12. Taxes.
(a) Except as would not have a Material Adverse Effect, (i) the
Company and each of the Subsidiaries has timely filed or will timely
file, taking into account extensions, (or has or will have had filed
on its behalf) all federal, state, local and foreign income and other
tax returns, reports and declarations ("Tax Returns")which are or were
required by applicable law to have been filed at or before the
Effective Time, (ii) each of the Company and the Subsidiaries has
timely paid or will timely pay (or has or will have paid on its
behalf), or where payment is not required to be made, has made or will
make adequate provision in reserves established on its financial
statements and accounts for the payment of, all taxes (including,
without limitation, all taxes required to be withheld, or any interest
and penalties on any taxes), in respect of the periods covered by said
returns, reports and declarations or any other taxable period ending
on or before the Effective Time, (iii) all Tax Returns, reports and
declarations filed by the Company and Subsidiaries, including, without
limitation, any amendments to date, have been prepared in good faith
and are complete and accurate in all material respects, (iv) no
deficiencies for any material tax, assessment or governmental charge
have been asserted or assessed in writing against the Company or any
of the Subsidiaries which have not been paid, settled or adequately
provided for through reserves established in the financial statements
and accounts of the Company and its Subsidiaries and, to the knowledge
of the Company, no such deficiency, assessment or charge has been
threatened.
(b) Neither the Company nor any of its Subsidiaries is obligated
to pay the taxes of any Person (other than the consolidated or similar
group of which the Company is the common parent or its equivalent)
under Treasury Regulation Section 1.1502-6 (or any similar provision
of state, local or foreign law).
(c) Neither the Company nor any Subsidiary has constituted a
"distributing corporation" or a "controlled corporation" within the
meaning of Section 355(a)(1)(A) of the Code in a distribution of stock
intended to qualify for tax-free treatment under Section 355 of the
Code.
(d) Except as would not have a Material Adverse Effect, there are
no Liens (other than Permitted Liens) upon any properties or assets of
the Company or any of its subsidiaries arising from any failure or
alleged failure to pay any tax.
(e) Neither the Company nor any of its Subsidiaries is required
to make any disclosure to the Internal Revenue Service with respect to
a "listed transaction" within the meaning of Treasury Regulation
Section 1.6011-4(b).
SECTION 3.13. Employment Agreements. There are no written employment,
consulting, severance, change of control or similar agreements between the
Company or any Subsidiary, on the one hand, and any directors, officers,
consultants or employees of the Company or any Subsidiary, on the other
hand, which provide for annual remuneration, severance payments,
termination indemnities or other payments in excess of $100,000.
SECTION 3.14. Change of Control Provisions.
(a) Except as disclosed in the Filed Company SEC Documents, as set
forth in the Company Disclosure Letter or as required under the terms of
Section 1.05 of this Agreement, none of the agreements described in Section
3.13 hereof and none of the Plans and no compensation plan maintained by
the Company or any Subsidiary for the benefit of their respective current
or former employees, officers, directors or consultants contains any
provision that would entitle any such employee, officer, director or
consultant to any additional or accelerated payments or benefits as a
result of the consummation of the Merger or the transactions contemplated
by this Agreement.
(b) Neither the Company nor any Subsidiary is a party to any
agreement, contract, arrangement or plan that has resulted or could result,
separately or in the aggregate, in the payment of any "excess parachute
payment" within the meaning of Section 280G of the Code (or any
corresponding provision of state, local or foreign law).
SECTION 3.15. Employee Benefit Plans. All material employee benefit
plans within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), maintained by the Company or
any of the Subsidiaries (collectively, the "Plans") and any related trusts
and funding vehicles are in compliance with, and have been administered and
operated in accordance with, the terms of such Plans, related trusts and
funding vehicles and applicable law, except for any failure to so comply,
operate or administer such Plans and related trusts and funding vehicles
that would not, individually or in the aggregate, have a Material Adverse
Effect. The Internal Revenue Service has issued a determination letter to
the effect that each such Plan which is intended to be "qualified" within
the meaning of Section 401(a) of the Code is so qualified and that its
related trust is tax exempt under Section 501(a) of the Code. No event
which constitutes a "reportable event" as defined in Section 4043 of ERISA
has occurred and is continuing with respect to any Plan subject to Title IV
of ERISA which presents a material risk of the termination or partial
termination of any such Plan or would, individually or in the aggregate,
have a Material Adverse Effect. At any time in the past six years, no Plan
and no plan maintained by an ERISA Affiliate that is subject to Title IV of
ERISA has been terminated pursuant to Title IV of ERISA in connection with
which any liability has been incurred by the Company or any Subsidiary
which has not been satisfied in full. Full payment has been made, or
provision has been made therefor, of all material amounts which the Company
or any of the Subsidiaries were required under the terms of the Plans or
applicable law to have paid as contributions to such Plans on or prior to
the date hereof and at any time during the past six years no Plan which is
subject to Part 3 of Subtitle B of Title I of ERISA has incurred any
"accumulated funding deficiency" (within the meaning of Section 302 of
ERISA or Section 412 of the Code), whether or not waived. Neither the
Company nor any of the Subsidiaries has engaged in any nonexempt prohibited
transactions in connection with any Plan (or its related trust or funding
vehicle) with respect to which the Company, any of the Subsidiaries, or any
officer, director or employee of the Company or any of the Subsidiaries
would be subject to either a penalty pursuant to Section 502(i) of ERISA or
a tax imposed by Section 4975 of the Code nor, to the knowledge of the
Company, will the consummation of the transactions contemplated by this
Agreement constitute such a transaction which penalty or tax would,
individually or in the aggregate, have a Material Adverse Effect. Neither
the Company nor any of its Subsidiaries, nor any officer, director or
employee of the Company or any of its Subsidiaries, has incurred any
liability under the fiduciary provisions of ERISA, other than any liability
that would not individually, or in the aggregate, have a Material Adverse
Effect. At any time in the past six years, no claim, action or litigation
has been made, commenced or, to the knowledge of the Company, threatened
with respect to any Plan or its related trust or funding vehicle that
would, if adversely determined, have (individually or in the aggregate) a
Material Adverse Effect. Neither the Company nor any entity under "common
control" with the Company within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001 of ERISA (an "ERISA Affiliate") has
participated in or contributed to any multiemployer plan as defined in
Section 3(37) of ERISA at any time during the past six years, and none of
the Company nor any ERISA Affiliate has incurred any "withdrawal liability"
(as defined in Part I of Subtitle E of Title IV of ERISA) at any time in
the past six years that has not been satisfied in full. With respect to
each employee pension benefit plan (as defined in Section 3(2) of ERISA)
which is a defined benefit plan and is not a multiemployer plan, the assets
of such Plan available to meet the accrued liabilities of such Plan would
exceed such liabilities, based on the actuarial assumptions used for plan
termination. There does not now exist, nor do any circumstances exist that
could result in, any Controlled Group Liability that would be a liability
of the Company or any of its Subsidiaries following the Closing that would,
individually or in the aggregate, have a Material Adverse Effect.
"Controlled Group Liability" means any and all liabilities (i) under Title
IV of ERISA, (ii) under Section 302 of ERISA, (iii) under Sections 412 and
4971 of the Code and (iv) as a result of a failure to comply with the
continuation coverage requirements of Section 601 et seq. of ERISA and
Section 4980B of the Code or the requirements of Section 701 et.seq. of
ERISA, other than such liabilities that, in each case, arise solely out of,
or relate solely to the Plans.
SECTION 3.16. Licenses. The Company and its Subsidiaries have obtained
all federal, state, local or foreign governmental and regulatory permits,
concessions, grants, franchises, licenses, authorizations and approvals
that are necessary or required in connection with the conduct of the
business as now conducted of the Company and the Subsidiaries
(collectively, "Licenses"), except where the failure to so obtain any such
License would not, individually or in the aggregate, have a Material
Adverse Effect. All of the Licenses are in full force and effect and, to
the Company's knowledge, will not be impaired or adversely affected by the
transactions contemplated by this Agreement in a manner or to a degree
that, individually or in the aggregate, would have a Material Adverse
Effect.
SECTION 3.17. Real Estate Leases. The Company Disclosure Letter sets
forth a list of all material leases and subleases existing as of the date
hereof (together with all amendments, supplements, nondisturbance
agreements and other agreements pertaining thereto) under which the Company
or any Subsidiary is lessor or lessee of any real property located in the
United States (the "U.S. Leases"). As to the U.S. Leases and the material
leases and subleases existing as of the date hereof under which the Company
or any Subsidiary is lessor or lessee of any real property that is not
located in the United States (the "Non-U.S. Leases" and, together with the
U.S. Leases, the "Company Leases"), except as would not, individually or in
the aggregate, have a Material Adverse Effect, (a) there exists no breach
or default, and no event has occurred which with notice or passage of time
(or both) would constitute such a breach or default or permit termination,
notification or acceleration, on the part of the Company or any Subsidiary,
or on the part of any other party thereto, and (b) as of the Effective
Time, no third party consents, approval or authorizations shall be required
for the consummation of the Merger. To the Company's knowledge, there is no
lien, claim, option, charge, security interest, limitation, encumbrance or
restriction of any kind (any of the foregoing being a "Lien") on any of the
leasehold interests covered by the Company Leases except for (a) Liens
reflected in the balance sheet included in the Company 10-K or any Company
10-Q, (b) Liens of record consisting of zoning or planning restrictions,
easements, permits and other restrictions or limitations on the use of real
property which do not materially detract from the value of, or a materially
impair the use of, such property by the Company and its Subsidiaries in the
operation of their respective businesses, (c) Liens for current taxes,
assessments or governmental charges or levies on property not yet
delinquent or being contested in good faith and for which appropriate
reserves have been established in accordance with GAAP (which contested
levies are described in the Company Disclosure Letter), (d) Liens imposed
by law, such as materialman's, mechanic's, carrier's, workers' and
repairmen's Liens securing obligations not yet delinquent or being
contested in good faith and for which appropriate reserves have been
established in accordance with GAAP or securing obligations not being paid
in the ordinary course of business in accordance with customary and
commercially reasonable practice, and (e) Liens that do not materially
adversely affect the use or enjoyment of the assets or properties of the
Company or its Subsidiaries (collectively, "Permitted Liens").
SECTION 3.18. Real Property. The Company Disclosure Letter lists all
material real property owned by the Company or a Subsidiary thereof as of
the date hereof. Except as would not, individually or in the aggregate,
have a Material Adverse Effect, each of the Company and its Subsidiaries
has good title in fee simple to its respective real properties set forth in
the Company Disclosure Letter, in each case free and clear of all Liens,
except for Permitted Liens.
SECTION 3.19. Intellectual Property and Germplasm.
(a) The Company Disclosure Letter lists (i) all of the United
States patents, certificates of plant variety protection, registered
trademarks, registered service marks, registered copyrights or
application for any of the foregoing, in each case that are owned by
the Company or its Subsidiaries as of the date hereof (collectively,
the "U.S. Intellectual Property" and, together with (x) all of the
patents, certificates of plant variety protection, registered
trademarks, registered service marks, registered copyrights or
application for any of the foregoing that are owned by the Company or
its Subsidiaries as of the date hereof (but excluding the US
Intellectual Property) and (y) all of the patents, certificates of
plant variety protection, registered trademarks, registered service
marks, registered copyrights or application for any of the foregoing
that are licensed to the Company or a Subsidiary as of the date hereof
for use in the conduct of their respective businesses, the
"Intellectual Property"), and (ii) all varieties and hybrids of cotton
and soybeans which the Company or its Subsidiaries are presently
selling in the United States or reasonably anticipates selling in the
United States within two years of the date of this Agreement. The
Company and its Subsidiaries own and possess all right, title and
interest in and to, or are licensed to use, all of the Intellectual
Property that is material to the Company and its Subsidiaries taken as
a whole. In the case where the Company's or its Subsidiaries' use of
the Intellectual Property is subject to a royalty payment in excess of
$2,000,000 per annum (excluding royalty payments payable to Parent or
any Affiliate thereof), the material terms of such royalty payment are
set forth in the Company Disclosure Letter. To the knowledge of the
Company, each item of material Intellectual Property owned by the
Company or a Subsidiary is valid and enforceable, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or other laws affecting creditors' rights
generally or by the availability of equitable remedies generally.
(b) The Company and its Subsidiaries own and possess all right,
title and interest in and to, or are licensed to use, in the manner
currently used by the Company and its Subsidiaries, all germplasm
(exclusive of transgenes and transgenic components) that the Company
or any Subsidiary is presently selling or reasonably anticipates
selling within two years of the date of this Agreement and that is
material to the Company and its Subsidiaries taken as a whole. In the
case where the Company's and its Subsidiaries' use of such germplasm
is subject to a royalty payment in excess of $2,000,000 per annum
(excluding royalty payments payable to Parent or any Affiliate
thereof), the material terms of such royalty payment are set forth in
the Company Disclosure Letter.
(c) To the knowledge of the Company, except (i) for any claim
that may be made by the Company or a Subsidiary against Parent or any
Affiliate thereof and (ii) as would not, individually or in the
aggregate, have a Material Adverse Effect, neither the Company nor any
of its Subsidiaries has received any notice of, and neither the
Company nor any of its Subsidiaries has any knowledge of any potential
claim that may be made by the Company or a Subsidiary against another
Person with respect to any infringement of any patent or certificate
of plant variety protection or misappropriation by a third party of
the Intellectual Property or any germplasm in the Company's or any
Subsidiary's breeding or research programs.
(d) Except (i) for any possible infringement of the intellectual
property rights of Parent or any of its Affiliates and (ii) as would
not, individually or in the aggregate, have a Material Adverse Effect,
to the knowledge of the Company, none of the operations and businesses
conducted by the Company or any of its Subsidiaries are infringing and
have not infringed any intellectual property rights of any other
Person and the transactions contemplated by this Agreement will not
impair any patent, trademark, trade name, copyright or other item of
Intellectual Property owned or used by the Company or any Subsidiary
in connection with the operation of their respective businesses.
(e) Neither the Company nor any of its Subsidiaries have entered
into or are bound by any agreement with any third party which would
grant any third party access to the technology (including germplasm)
of Parent or any of its Affiliates (excluding, after the Closing Date,
the Company and its Subsidiaries), except with respect to intellectual
property rights in improvements to technology licensed to the Company
or its Subsidiaries under such applicable agreement that are made by
Parent or any of its Affiliates as a result of access to such
technology from the Company or its Subsidiaries, whether as a result
of the execution and delivery of this Agreement, the consummation of
the transactions contemplated hereby or otherwise, and neither the
Company nor any of its Subsidiaries have entered into or are bound by
any agreement with any third party which would obligate Parent or any
of its Affiliates (excluding, after the Closing Date, the Company and
its Subsidiaries), whether as a result of the execution and delivery
of this Agreement, the consummation of the transactions contemplated
hereby or otherwise, to grant to any such Person any access to any of
the technology (including any germplasm) of Parent or any of its
Affiliates (excluding, after the Closing Date, the Company and its
Subsidiaries), except with respect to intellectual property rights in
improvements to technology licensed to the Company or its Subsidiaries
under such applicable agreement that are made by Parent or any of its
Affiliates as a result of access to such technology from the Company
or its Subsidiaries.
(f) Any other provision of this Agreement notwithstanding (but
subject to the next succeeding sentence), the Company makes no
representation or warranty whatsoever with respect to whether the
transgenes and transgenic components that are licensed by the Company
or any Subsidiary from a third party and used by the Company or any
Subsidiary in connection with the operation of their respective
businesses, are infringing the intellectual property rights of any
other Person. Notwithstanding the foregoing, to the knowledge of the
Company, as of the date hereof, such transgenes and transgenic
components do not infringe the intellectual property rights of any
other Person (other than Parent or any Affiliate thereof).
SECTION 3.20. Compliance with Other Instruments and Laws. Neither the
Company nor any Subsidiary is (a) in violation of any term of its
certificate of incorporation, bylaws or analogous organizational documents
(in the case of non-corporate entities), each as amended, (b) in violation
of any mortgage, indenture, instrument or agreement relating to
indebtedness for borrowed money or of any judgment, decree or order which
names the Company or any Subsidiary or (c) in violation of any term of any
other material instrument, contract or agreement to which it is a party or
by which it or any of its properties or assets is bound, except, in the
case of clauses (b) and (c) immediately above, to the extent that any such
violation would not, individually or in the aggregate, have a Material
Adverse Effect. The Company's and each Subsidiary's businesses are in
compliance with all federal, state, local or foreign statutes, laws,
ordinances, rules, governmental regulations, permits, concessions, grants,
franchises, licenses or other governmental authorizations or approvals
applicable to the operation of such business, except to the extent that the
failure of such compliance would not, individually or in the aggregate,
have a Material Adverse Effect.
SECTION 3.21. Employees. To the knowledge of the Company, as of the
date of this Agreement, no officer or group of employees of the Company or
any Subsidiary has any plans to terminate employment with the Company or
such Subsidiary other than employees with plans to retire. Without limiting
the generality of Section 3.20 hereof, the Company and its Subsidiaries
have complied in all respects with all laws relating to hiring or the
employment or cessation of employment of persons, including provisions
thereof relating to wages, hours, equal opportunity and collective
bargaining, and, to the knowledge of the Company, neither the Company nor
any Subsidiary has any labor relations problems (including without
limitation threatened or actual strikes or work stoppages or material
grievances), except as would not, individually or in the aggregate, have a
Material Adverse Effect.
SECTION 3.22. Information Supplied. None of the information supplied
or to be supplied by the Company specifically for inclusion or
incorporation by reference in the Company Proxy Statement will, at the date
it is first mailed to the Company's stockholders or at the time of the
Company Stockholders Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company Proxy
Statement will comply as to form in all material respects with the
requirements of the Exchange Act, except that no representation or warranty
is made by the Company with respect to statements made or incorporated by
reference therein based on information supplied by Parent or Merger Sub
specifically for inclusion or incorporation by reference in the Company
Proxy Statement. At the time of the filing of any disclosure document filed
after the date hereof pursuant to the Securities Act, the Exchange Act or
any state securities law (each a "Company Disclosure Document") other than
the Company Proxy Statement, each such Company Disclosure Document (as
supplemented or amended) will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading.
SECTION 3.23. Rights Agreement. The Company's Board of Directors has
taken any necessary action to provide that as a result of the execution and
delivery of this Agreement or any amendment hereto or the consummation of
the Merger and other transactions contemplated hereby, Parent and Merger
Sub will not become an "Acquiring Person," and no "Shares Acquisition Date"
or "Distribution Date" (as such terms are defined in the Rights Agreement,
dated as of August 13, 1996, between the Company and Harris Trust and
Savings Bank, as Rights Agent, as the same has been amended from time to
time (the "Rights Agreement")) will occur, and the Rights Agreement will
not be applicable to the execution and delivery of this Agreement or any
amendment hereto or the consummation of the Merger and other transactions
contemplated hereby.
SECTION 3.24. Certain Fees. Except in connection with the engagement
of UBS Securities LLC, neither the Company nor any Subsidiary has employed
any broker or finder or incurred any liability for any financial advisory,
brokerage or finders' fees or commissions in connection with the
transactions contemplated hereby.
SECTION 3.25. Opinion of Financial Advisor. The Board of Directors of
the Company has received the opinion of UBS Securities LLC to the effect
that, as of the date of such opinion, the Merger Consideration is fair,
from a financial point of view, to the holders of Company Common Stock
(other than Parent, Merger Sub and their respective Affiliates), a copy of
which opinion will be delivered to Parent solely for informational purposes
after receipt thereof by the Company.
SECTION 3.26. Voting Requirements. The affirmative vote of the holders
of a majority of the outstanding shares of Company Common Stock at the
Company Stockholders Meeting to adopt this Agreement is the only vote of
the holders of any class or series of Company's capital stock necessary to
approve and adopt this Agreement and the transactions contemplated hereby.
Parent agrees to vote any Shares held by it in favor of approval and
adoption of this Agreement and the transactions contemplated hereby, to the
extent any such Shares are entitled to vote with respect to such matter.
The Board of Directors of the Company has duly and validly approved and has
taken all corporate action required to be taken by the Company's Board of
Directors for the consummation of the transactions contemplated by this
Agreement, and no less than two-thirds of the members of the complete Board
of Directors of the Company have approved this Agreement and declared its
advisability in accordance with the terms of Delaware Law.
SECTION 3.27. State Takeover Statutes. The Board of Directors of the
Company has approved this Agreement and the consummation of the Merger and
the other transactions contemplated hereby and such approval constitutes
approval of the Merger and the other transactions contemplated by this
Agreement by the Board of Directors of the Company under the provisions of
Section 203 of Delaware Law such that Section 203 of Delaware Law does not
apply to the Merger or the other transactions contemplated by this
Agreement. To the knowledge of the Company, no other state takeover statute
is applicable to the Merger or the other transactions contemplated by this
Agreement.
SECTION 3.28. No Additional Representations and Warranties. Parent and
Merger Sub acknowledge that neither the Company nor any other Person
advising or acting on behalf of the Company or any Affiliate of the Company
(i) has made any representation or warranty, express or implied, including
any implied representation or warranty, as to the condition,
merchantability, suitability or fitness for a particular purpose of any of
the assets used in the businesses of or held by the Company or any
Subsidiary or (ii) has made any representation or warranty, express or
implied, as to the accuracy or completeness of any information regarding
the Company or any Subsidiary or the business conducted by the Company or
any Subsidiary, in each case except as expressly set forth in this
Agreement.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent and warrant to
the Company as follows:
SECTION 4.01. Corporate Organization. Each of Parent and Merger Sub is
a corporation duly organized validly existing and in good standing under
the laws of Delaware, with all requisite corporate power and authority to
own, operate and lease its properties and assets and to carry on its
businesses as now being conducted.
SECTION 4.02. Authorization. Each of Parent and Merger Sub has the
necessary corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder. The execution and delivery of this
Agreement by each of Parent and Merger Sub, the performance by each of
Parent and Merger Sub of its obligations hereunder and the consummation by
each of Parent and Merger Sub of the transactions contemplated hereby have
been duly and validly authorized by the Boards of Directors of Parent and
Merger Sub and by Parent in its capacity as the sole stockholder of Merger
Sub, and no other corporate proceeding on the part of Parent or Merger Sub
is necessary for the execution and delivery of this Agreement by Parent or
Merger Sub, the performance by either of them of their respective
obligations hereunder and the consummation by Parent and Merger Sub of the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of Parent and Merger Sub and constitutes a
legal, valid and binding obligation of Parent and Merger Sub, enforceable
against each of them in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or other laws affecting creditors' rights
generally or by the availability of equitable remedies generally.
SECTION 4.03. No Prior Activities; Ownership of Merger Sub Shares.
Except for obligations or liabilities incurred in connection with its
incorporation or the negotiation and consummation of this Agreement and the
transactions contemplated hereby, Merger Sub has not incurred any
obligations or liabilities, and has not engaged in any business or
activities of any type or kind whatsoever or entered into any agreements or
arrangements with any Person or entity. Parent owns all of the issued and
outstanding shares of capital stock of Merger Sub.
SECTION 4.04. Information Supplied. None of the information supplied
or to be supplied by Parent or Merger Sub specifically for inclusion or
incorporation by reference in the Company Proxy Statement will, at the date
it is first mailed to the Company's stockholders or at the time of the
Company Stockholders Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
SECTION 4.05. Consents and Approvals; No Violations. Except for (a)
applicable requirements of the Exchange Act, (b) expiration or termination
of the waiting period under the HSR Act, (c) applicable requirements of
foreign and supranational laws relating to antitrust and anticompetition
clearances, filings or notices, (d) the filing of the Certificate of Merger
as required by Delaware Law (e) such filings and consents as may be
required under any environmental law pertaining to any notification,
disclosure or required approval triggered by the Merger or the transactions
contemplated by this Agreement and (f) such consents, approvals, orders,
authorizations, notifications, registrations, declarations and filings as
may be required under the corporation, takeover or blue sky laws of various
states of the United States and jurisdictions outside the United States, no
filing with or prior notice to, and no permit, authorization, consent or
approval of, any Person, including any Governmental Entity, is necessary
for the consummation by Parent or Merger Sub of the transactions
contemplated by this Agreement. Neither the execution and delivery of this
Agreement by Parent or Merger Sub nor the consummation by Parent or Merger
Sub of the transactions contemplated hereby nor compliance by Parent or
Merger Sub with any of the provisions hereof will (i) conflict with or
result in any breach of any provision of the certificate of incorporation
or bylaws of Parent or Merger Sub, each as amended, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination,
cancellation or acceleration or otherwise change the existing rights or
obligations of any party thereto) under, any of the terms, conditions or
provisions of any note, bond, mortgage indenture, license, agreement or
other instrument or obligation to which Parent or Merger Sub is a party or
by which Parent, Merger Sub or any of their respective properties or assets
may be bound, or (iii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Parent or Merger Sub or any of
their respective properties or assets, excluding from the foregoing clauses
(ii) and (iii) violations, breaches or defaults which would not,
individually or in the aggregate, have a material adverse effect on or
materially delay the ability of Parent or Merger Sub to consummate the
transactions contemplated by this Agreement (a "Buyer Material Adverse
Effect").
SECTION 4.06. Certain Fees. Except in connection with the engagement
of J.P. Morgan Securities Inc., neither Parent nor Merger Sub has employed
any broker or finder or incurred any liability for any financial advisory,
brokerage or finders' fees or commissions in connection with the
transactions contemplated hereby, and the fees of J.P. Morgan Securities
Inc. will be paid solely by Parent.
SECTION 4.07. Necessary Financing. Parent has available to it funds
sufficient to consummate the transactions contemplated by this Agreement,
including to pay the aggregate Merger Consideration to the stockholders of
the Company and all fees and expenses it and Merger Sub will incur in
connection therewith.
SECTION 4.08. No Buyer Stockholder Vote. No vote of the stockholders
of Parent is required under Delaware Law, the applicable rules and
regulations of the NYSE or any other applicable law or regulation, or
pursuant to the terms of Parent's certificate of incorporation or bylaws,
in order to authorize the consummation by Parent of the transactions
contemplated hereby.
ARTICLE 5.
COVENANTS OF THE COMPANY
SECTION 5.01. Conduct of Business by the Company and its Subsidiaries
Pending the Merger. The Company covenants and agrees that prior to the
Effective Time or the date, if any, on which this Agreement is earlier
terminated pursuant to Section 9.01 hereof, unless Parent shall otherwise
consent in writing (such consent not to be unreasonably withheld or
delayed) or except as otherwise specifically contemplated by this
Agreement:
(a) the businesses of the Company and the Subsidiaries will be
conducted only in the ordinary and usual course; the Company will use
its reasonable best efforts to preserve intact its business
organization and goodwill, keep available the services of its officers
and employees and maintain satisfactory relationships with suppliers,
distributors, customers and others having business relationships with
it and the Subsidiaries; and the Company will reasonably promptly
notify Parent of any event or occurrence or emergency not in the
ordinary and usual course of the business of the Company or any
Subsidiary or that is material to the business of the Company and the
Subsidiaries, taken as a whole;
(b) the Company will not (i) amend its certificate of
incorporation or bylaws or the certificate of incorporation, bylaws or
analogous organizational documents (in the case of non-corporate
entities) of any Subsidiary or (ii) split, combine, reclassify,
repurchase, redeem or otherwise acquire any of the outstanding Shares
or declare, set aside or pay any dividend payable in cash, stock or
property with respect to the Shares, provided that the Company may
declare and pay to holders of the Shares, in a manner consistent with
past practice as to timing, regular quarterly dividends of not more
than $0.15 per share (or $0.17 per share commencing with quarters
ending after August 31, 2006);
(c) neither the Company nor any Subsidiary will issue or agree to
issue any additional shares of, or rights of any kind to acquire
shares of, its capital stock of any class other than (i) the issuance
of shares of capital stock of a Subsidiary to the Company, (ii) with
respect to the Company, shares of Company Common Stock issuable upon
exercise of stock options outstanding as of the date hereof pursuant
to the Company Stock Option Plans or (iii) the grant of shares of
restricted Company Common Stock or restricted Company Common Stock
units, in each case after the date hereof to employees, officers,
consultants and directors of the Company or any Subsidiary in
accordance with past practices and the terms of the Company Stock
Option Plans, provided that the number of shares of restricted Company
Common Stock together with the number of shares of Company Common
Stock covered by any restricted stock unit, in each case granted after
August 31, 2006 and on or prior to August 31, 2007 shall not, in the
aggregate, exceed 154,762 shares of Company Common Stock and, for each
whole fiscal year thereafter, the Company shall be permitted to grant
up to 154,762 shares of restricted Company Common Stock or restricted
Company Common Stock units, in each case on the terms set forth in
this clause (iii);
(d) neither the Company nor any Subsidiary will enter into or
amend or agree to enter into or amend any contract or agreement with
any works councils or trade or labor unions representing employees of
the Company or any Subsidiary, except with respect to work councils or
trade or labor unions representing employees of the Company or any
Subsidiary in the People's Republic of China (provided that prior to
entering into or amending any such agreement with any works council or
trade or labor union, the Company shall consult with Parent);
(e) except as expressly permitted by Sections 5.02 and 5.04
hereof, neither the Company nor any Subsidiary will authorize,
recommend, propose or announce an intention to authorize, recommend or
propose, or enter into an agreement in principle or an agreement with
respect to any merger, consolidation or business combination (other
than the Merger) or any acquisition or disposition of any assets
(including, without limitation, any securities of any Subsidiary),
except that in the case of the acquisition or disposition of assets,
nothing contained herein shall limit the ability of the Company or any
Subsidiary from (i) taking any of the foregoing actions so long as (x)
the aggregate amount of assets to be acquired by the Company or any
Subsidiary outside of the ordinary course of business consistent with
past practice does not exceed $10,000,000 in the aggregate and (y) the
aggregate amount of assets to be disposed of by the Company or any
Subsidiary outside of the ordinary course of business consistent with
past practice does not exceed $10,000,000 in the aggregate or (ii)
acquiring or disposing of assets in the ordinary course of business
consistent with past practice;
(f) Except as set forth in Section 5.05, the Company will not and
will not permit any Subsidiary to (i) enter into or amend (x) any
employment, consulting, severance or termination indemnity agreement
(1) with any "named executive officer" (as defined in the Exchange
Act) or director of the Company or any Subsidiary or (2) other than in
the ordinary course of business consistent with past practice, (y) any
change of control agreement or (z) any bonus, incentive compensation,
deferred compensation, profit sharing, retirement, supplemental
retirement, pension, group insurance or other benefit plan, except as
required by law or regulations, (ii) make any contribution to any such
plan, except in the ordinary course of business consistent with past
practice or for contributions specifically required pursuant to the
terms thereof or (iii) grant any salary increase, except in the
ordinary course of business consistent with past practice;
(g) neither the Company nor any Subsidiary, which term for all
purposes of this clause (g) shall include the Other Entities, will (i)
except in the ordinary course of business consistent with past
practice, including the renewal or replacement of existing debt,
create, incur or assume any debt (including, without limitation,
obligations in respect of capital leases) other than under existing
lines of credit or to fund out-of-pocket costs incurred in connection
with the transactions contemplated hereby; (ii) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person
except Subsidiaries in the ordinary course of business; or (iii) make
any loans, advances or capital contributions to, or investments in,
any other Person other than a Subsidiary (other than trade credit or
customary advances to employees and short-term investments pursuant to
customary cash management systems of the Company in the ordinary
course and consistent with past practice);
(h) the Company will neither amend the Rights Agreement nor
redeem any of the rights granted under the Rights Agreement without
the written consent of Parent;
(i) except with respect to any litigation, proceeding, action,
suit, arbitration, investigation or other claim between the Company
and any of its Subsidiaries, on the one hand, and Parent and any of
its Subsidiaries, on the other hand, neither the Company nor any
Subsidiary will settle or compromise any material litigation,
proceeding, action, suit, arbitration, investigation or other claim in
a manner that will have a material effect on the Company;
(j) grant or permit to be created any Lien on any of the material
assets of the Company or any Subsidiary (other than Permitted Liens);
and
(k) neither the Company nor any Subsidiary shall agree in writing
or otherwise to take (i) any action that it is prohibited from taking
by this Section 5.01, or (ii) any action that would constitute a
breach of any covenant or agreement set forth herein.
SECTION 5.02. Stockholders' Meeting.
(a) The Company shall cause a meeting of its stockholders (the
"Company Stockholders Meeting") to be duly called and held as soon as
reasonably practicable following the execution and delivery of this
Agreement and the clearance of the Company Proxy Statement by the SEC
for the purpose of voting on the approval and adoption of this
Agreement and the Merger, notwithstanding any actions taken by the
Board of Directors of the Company pursuant to the terms of this
Section 5.02. Subject to Section 5.04 and to its fiduciary duties, the
Board of Directors of the Company will (i) recommend approval and
adoption of this Agreement by the Company's stockholders and (ii) use
reasonable best efforts to obtain the necessary approval by the
Company's stockholders of this Agreement and the transactions
contemplated hereby.
(b) Notwithstanding anything contained in Section 5.02(a) hereof
to the contrary, the Board of Directors of the Company may, if it
determines in good faith, after consultation with outside legal
counsel, that the failure to do so would result in a breach of its
fiduciary duties to the stockholders of the Company, (i) recommend the
approval or adoption of any Acquisition Transaction, (ii) determine
that this Agreement or the Merger is no longer advisable, (iii)
withdraw (or modify in a manner adverse to Parent or Merger Sub) the
approval of this Agreement, the Merger or any of the other
transactions contemplated hereby, (iv) recommend that the stockholders
of the Company reject this Agreement, the Merger or any of the other
transactions contemplated hereby or thereby or (v) resolve, agree or
publicly propose to take any such actions; provided, that the
foregoing action may only be taken (x) as a result of the occurrence
of a material unforeseen change in the business or financial condition
of the Company (without giving effect to any actual or perceived
changes in the Company's likelihood of success or any other matters
pertaining to the Litigation) or the market price for the Company
Common Stock or (y) in response to or related to an Acquisition
Transaction (other than this Agreement) or a proposal or expression of
interest in respect thereof, provided that if such action is in
response to or related to an Acquisition Transaction (other than this
Agreement) or a proposal or expression of interest in respect thereof,
the foregoing actions shall only be taken in accordance with the terms
of Section 5.04.
SECTION 5.03. Access to Information; Cooperation; Related Matters.
(a) Subject to the terms hereof and of the existing
confidentiality agreement, dated August 9, 2006, between the Company
and Parent (the "Confidentiality Agreement"), in compliance with
applicable law and existing agreements between the parties, during
normal business hours, upon reasonable notice and in a manner as shall
not unreasonably interfere with the conduct of the business of the
Company or any Subsidiary, the Company will give (or cause to be
given) Parent, its counsel, financial advisors, auditors and other
authorized representatives, in each case who are reasonably acceptable
to the Company, reasonable access throughout the period prior to the
Effective Time to all of the offices, properties, business plans,
books, files and records of the Company and the Subsidiaries, will
furnish to Parent, its counsel, financial advisors, auditors and other
authorized representatives such financial and operating data and other
information as such Persons may reasonably request and will instruct
the Company's and its Subsidiaries' employees, counsel and financial
advisors to cooperate with Parent in its investigation of the business
of the Company and its Subsidiaries. Without limiting the foregoing,
Company shall, and shall cause its Affiliates to, cooperate and
provide Parent and its counsel, financial advisors, auditors and other
authorized representatives with all relevant information required by
Parent or any of the foregoing Persons for the purpose of ensuring
that the business conducted by the Company and its Subsidiaries
complies with, and does not raise material liability risks under,
applicable laws and regulations, including, without limitation, the
FCPA and other applicable anti-corruption laws, regulations, and
policies. Notwithstanding any other provision of this Agreement, the
Company and its Subsidiaries are not required to make available to
Parent or its counsel, financial advisors, auditors and other
authorized representatives (i) any information that is subject to
confidentiality obligations to another Person, which obligations do
not permit disclosure to Parent or any such other Persons (ii) any
information related to the Company's or a Subsidiary's relationship
with any of the Persons listed in Section 5.03(a) of the Company
Disclosure Letter (including any contracts or agreements between any
such Person, on the one hand, and the Company or any Subsidiary
thereof, on the other hand) or (iii) any information that the Chief
Executive Officer of the Company and the Chief Financial Officer of
Parent agree (in good faith) constitutes competitively sensitive
information, provided in the event that such Persons cannot so agree,
such information shall be deemed competitively sensitive, and the
Company shall not be required to provide access to (or cause to be
provided access to) such information.
(b) The Company will furnish reasonably promptly to Parent a copy
of each report, schedule and other document filed or received by it
pursuant to the requirements of Federal or state securities laws.
Notwithstanding the foregoing, (i) no investigation made by Parent or
its counsel, financial advisors, auditors or other authorized
representatives, whether pursuant to this Section 5.03 or otherwise,
shall affect any representation or warranty contained in this
Agreement or the conditions to the obligations of Parent and Merger
Sub to consummate the Merger and (ii) nothing in this Agreement shall
require any Person to disclose any information in violation of any
applicable law, regulation or administrative order or decree and
nothing in this Agreement shall relieve any party of any existing
contractual obligations with respect to the use and/or disclosure of
such information.
(c) All information provided by one party to the other pursuant
to this Agreement shall be treated as "Evaluation Material" under the
Confidentiality Agreement.
(d) If, in connection with the performance by Parent and its
Affiliates of their respective obligations under Section 7.07 hereof,
including, without limitation, in the event that Parent determines to
sell or otherwise dispose of the Company as contemplated by Section
7.07 hereof, the Company shall, and shall cause its Subsidiaries and
their respective employees, counsel, financial advisors and other
representatives to, provide all cooperation and assistance that is
reasonably requested by Parent in connection therewith, including,
without limitation, (i) subject to the terms of the last sentence of
this Section 5.04(d), permitting the prospective buyer or buyers to
conduct due diligence in respect of the Company and its Subsidiaries
and to have access to all of the offices, properties, business plans,
books, files and records of the Company and the Subsidiaries, and any
other information regarding the Company and its Subsidiaries that any
such prospective buyer or buyers may reasonably request and (ii) if
applicable, in connection with the arrangement of any financing that
any prospective buyer or buyer may seek in connection with the
purchase of the Company, participation in meetings, due diligence
sessions, road shows, the preparation of offering memoranda, private
placement memoranda, prospectuses and similar documents. The
obligation of the Company to provide (or to cause to be provided) any
information to any Person under this Section 5.03 shall be conditioned
upon the entry by any such Person into an agreement with the Company
similar to and no less favorable to the Company as the Confidentiality
Agreement, and provided that the Company shall not be required to
provide any such Person with any information the Company is not
obligated to provide (or to cause to be provided) to Parent under
Section 5.03, and provided further than any obligations of the Company
under this Section 5.04(d) shall not unreasonably interfere with the
conduct of the business of the Company or any Subsidiary. Parent shall
reimburse Company for all reasonable expenses related to the
performance of the Company's obligations in this Section 5.03(d).
(e) As part of its investigation pursuant to Section 5.03(a),
following the execution and delivery of this Agreement, Parent will
continue to conduct due diligence with respect to the compliance by
the Company and its Subsidiaries (which term for purposes of this
Section 5.03(e) shall include the Other Entities) with the FCPA, and
the Company hereby agrees to fully cooperate with such efforts (and to
cause its Subsidiaries and their respective employees, counsel and
other representatives to fully cooperate with such efforts). If Parent
concludes that there is a possible violation of the FCPA by the
Company or any Subsidiary, Parent will so inform the Company, and the
Company will use its reasonable best efforts to resolve each such
violation and any issues related thereto, including by disclosing to
the applicable Governmental Entity the existence or occurrence of any
such violation if, in the opinion of the Company's outside counsel,
such disclosure should be made. In determining whether any
non-compliance with the FCPA by the Company or any Subsidiary is
material, or has caused a Material Adverse Change or Material Adverse
Effect, the evaluation of such determination will be based solely on
the effect of such non-compliance on the Company and its Subsidiaries
and shall not be based upon the effect of such non-compliance on
Parent and its Affiliates. Notwithstanding anything contained herein
to the contrary, the Company's failure to resolve any violation or
related issues in respect of the FCPA prior to the Closing Date shall
not result in a breach of the terms set forth in this Section 5.03(e),
it being understood and agreed that the foregoing shall not affect the
conditions to the obligation of Parent and Merger Sub to effect the
Closing, including, without limitation, the conditions to Closing set
forth in Sections 8.01(d) and 8.01(f) hereof.
SECTION 5.04. No Solicitation.
(a) The Company agrees that, prior to the earlier of the
Effective Time or the termination of this Agreement, it shall not, and
shall not authorize or permit any of its Subsidiaries or any of its or
its Subsidiaries' directors, officers, employees, agents or
representatives, directly or indirectly, to solicit, initiate or
encourage (including by way of furnishing or disclosing non-public
information) any inquiries or the making of any proposal with respect
to any merger, consolidation or other business combination involving
the Company or any material Subsidiary or the acquisition of all or
substantially all of the assets or capital stock of the Company or any
material Subsidiary (an "Acquisition Transaction") or negotiate,
explore or otherwise engage in discussions with any Person (other than
Parent or its directors, officers, employees, agents and
representatives), or enter into any agreement, with respect to any
Acquisition Transaction or enter into any agreement, arrangement or
understanding requiring it to abandon, terminate or fail to consummate
the Merger or any other transactions contemplated by this Agreement;
provided that the Company may, prior to the date of the Company
Stockholders Meeting, in response to a bona fide unsolicited written
proposal or written expression of interest with respect to an
Acquisition Transaction from a credible third party that is not
subject to any material financing uncertainties and that the Company's
Board of Directors determines, in good faith, after consultation with
its outside legal counsel and financial advisor, constitutes or could
reasonably result in a Superior Proposal, furnish or disclose
non-public information to, and negotiate, explore or otherwise engage
in discussions with, such third party, provided that the Company
concurrently discloses any material non-public information to Parent
as it is disclosing to such third party if such non-public information
has not previously been disclosed to Parent. Notwithstanding the
foregoing, the Company may, prior to the date of the Company
Stockholders Meeting, in response to a bona fide unsolicited written
proposal or written expression of interest with respect to an
Acquisition Transaction from a credible third party that is not
subject to any material financing uncertainties and that the Company's
Board of Directors determines, in good faith, after consultation with
its outside legal counsel and financial advisor, and after giving
effect to all of the adjustments which may be offered by Parent as
contemplated by the immediately following proviso, constitutes a
Superior Proposal, enter into a definitive agreement with a third
party in respect of an Acquisition Transaction (provided that the
Company shall concurrently with entering into such agreement terminate
this Agreement with the consequences specified in Section 9.04(d)
hereof); provided, however, that the Company shall only be permitted
to enter into any such agreement (and terminate this Agreement as
provided in Section 9.01(f) hereof in connection therewith) if: (i)
the Company shall (x) have delivered written notice thereof to Parent,
which written notice shall include the form of the agreement that is
to be entered into with such third party or a written summary of all
of the material provisions thereof and (y) have given Parent three
business days after delivery of such written notice (together with the
other documents required to be delivered in connection therewith) to
propose revisions to the terms of this Agreement (or make another
proposal); and (ii) at the end of such three business day period, the
Company's Board of Directors shall have determined in good faith,
after consultation with its outside legal counsel and financial
advisor, and in the exercise of its fiduciary duties, and after giving
effect to all of the adjustments which may be offered by Parent as
contemplated hereby, if any, that such agreement with such third party
constitutes a Superior Proposal. As used herein, the term "Superior
Proposal" means any bona fide written offer in respect of an
Acquisition Transaction that the Company's Board of Directors
determines in good faith, after consultation with its outside legal
counsel and financial advisor, is more favorable to the stockholders
of the Company than the Merger.
(b) The Company shall, and shall cause each of its Subsidiaries
and its and its Subsidiaries' directors, officers, employees, agents
or representatives, to immediately cease any solicitations,
discussions or negotiations existing on the date of this Agreement
with any Person (other than the parties hereto) that has made or
indicated an intention to make a proposal in respect of an Acquisition
Transaction.
(c) After the date hereof, the Company shall reasonably promptly
advise Parent in writing of the receipt, directly or indirectly, of
any inquiries or proposals, and of its intention to enter into any
agreement, relating to an Acquisition Transaction and any actions
taken pursuant to Section 5.04(a) hereof and shall promptly furnish to
Parent (and in any event within 24 hours following the receipt
thereof) either a copy of such proposal or a written summary of all of
the material terms of such proposal, and shall keep Parent reasonably
informed on a current basis (and in any event within 24 hours) of the
occurrence of any material changes, developments, discussions or
negotiations in respect of any of the foregoing.
SECTION 5.05. Employment and Noncompetition Agreements.
(a) As soon as practicable after the date hereof, the Company
shall (i) offer to the employees of the Company or its Subsidiaries
whose names are included in the list of the "Key Employee Group" set
forth in the Company Disclosure Letter, a Key Employee Employment
Protection and Retention Agreement in the form attached as an exhibit
to the Company Disclosure Letter and (ii) offer to the employees of
the Company or its Subsidiaries whose names are included in the list
of the "Management Key Employee Group" set forth in the Company
Disclosure Letter, a Key Employee Employment Protection and Retention
Agreement in the form attached as an exhibit to the Company Disclosure
Letter.
(b) As set forth in Section 3.07 and Section 3.08 of the Company
Disclosure Letter, prior to the Effective Time, the Company may enter
into employment, severance or change in control agreements with
certain executives and may pay a special cash award to employees.
ARTICLE 6.
COVENANTS OF PARENT AND MERGER SUB
Parent and Merger Sub agree that:
SECTION 6.01. Confidentiality. Prior to the Effective Time, Parent and
Merger Sub will hold, and will use their reasonable best efforts to cause
their respective officers, directors, employees, consultants, advisors and
agents to hold, in confidence all Evaluation Material (as defined in the
Confidentiality Agreement) in accordance with the terms of the
Confidentiality Agreement.
SECTION 6.02. Indemnification.
(a) Parent shall indemnify and shall cause the Surviving
Corporation to indemnify, to the full extent permitted under Delaware
Law, the present and former directors or officers of the Company and
the Subsidiaries (the "Indemnified Parties") from and against all
losses, obligations, expenses, claims, damages and liabilities arising
in respect of actions taken prior to and including the Effective Time
in connection with their duties as directors or officers of the
Company (including the transactions contemplated hereby) for a period
of not less than six years from the Effective Time; provided that (i)
in the event any claim or claims are asserted or made within such
six-year period, all rights to indemnification in respect of any such
claim or claims shall continue until final disposition of any and all
such claims and (ii) neither Parent nor the Surviving Corporation will
be liable for any settlement effected without Parent's prior written
consent (which consent shall not be unreasonably withheld or delayed).
Without limitation of the foregoing, in the event any Indemnified
Party becomes involved in such capacity in any action, proceeding or
investigation in connection with any matter, including the
transactions contemplated hereby, occurring prior to and including the
Effective Time, Parent shall periodically reimburse and shall cause
the Surviving Corporation to periodically reimburse such Indemnified
Party for his reasonable legal and other reasonable out-of-pocket
expenses (including the reasonable cost of any investigation and
preparation) incurred in connection therewith.
(b) For not less than six years after the Effective Time, Parent
or the Surviving Corporation shall maintain in effect directors' and
officers' liability insurance covering the Indemnified Parties who are
currently covered by the Company's existing directors' and officers'
liability insurance, on terms and conditions no less favorable to such
directors and officers than those in effect on the date hereof with
respect to Parent's officers and directors.
SECTION 6.03. Operations After the Effective Time. Parent currently
intends to maintain offices, facilities and operations of the Company at
their current locations. Parent looks forward to continuing the strong
relationship developed by the Company with the community in Scott,
Mississippi.
SECTION 6.04. Employee Benefits. From and after the Closing Date,
Parent shall cause the Surviving Corporation to honor, pay and perform all
obligations under all employment, severance, termination indemnity,
retention and change of control agreements with or for employees of the
Company or any Subsidiary in accordance with the terms thereof. Parent will
cause the Surviving Corporation to maintain and fund in accordance with
ERISA, the Code and any other applicable law for a period of two years
after the Effective Time employee benefit and compensation plans and
arrangements which, in the aggregate, provide benefits and compensation to
employees of the Surviving Corporation and its Subsidiaries which are no
less favorable in the aggregate than those provided pursuant to the
employee benefit and compensation plans and arrangements in effect for such
individuals on the date hereof. From and after the Effective Time, if any
employees of the Surviving Corporation or any Subsidiary will participate
in any employee benefit plan of Parent or any of its subsidiaries, Parent
will, and will cause its subsidiaries to, cause such employee benefit plans
to (i) recognize the service of the affected employees of the Company or
its Subsidiaries completed prior to the Effective Time for participation,
vesting and eligibility for early retirement under such plans of Parent or
any of its subsidiaries, but not for purposes of (a) benefit accrual under
any employee benefit plan (within the meaning of Section 3(2) of ERISA) or
(b) eligibility for subsidized retiree medical benefits under any retiree
medical plans maintained or sponsored by Parent or any of its Subsidiaries
and (ii) with respect to group health plans, waive any pre-existing
condition limitations or exclusions under such plans of Parent or its
subsidiaries. If the Closing Date occurs more than three months after the
end of the Company's last completed fiscal year, then the amount of bonuses
payable, if any, to each employee of the Company or any of its Subsidiaries
who is eligible to participate in a bonus plan or arrangement sponsored or
maintained by the Company or any of its Subsidiaries for the fiscal year of
the Company that includes the Closing Date shall be determined consistent
with past practices of the Company and shall be payable no later than
November 15 of the fiscal year of the Surviving Corporation next succeeding
the fiscal year that includes the Closing Date.
ARTICLE 7.
COVENANTS OF BUYER AND THE COMPANY
The parties hereto agree that:
SECTION 7.01. Best Efforts. Subject to the terms and conditions of
this Agreement, including, without limitation, the terms and conditions set
forth in Section 7.07 hereof, each party will use its best efforts to take,
or cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement. The Company,
Parent and Merger Sub shall each furnish to one another and to one
another's counsel all such information as may be required in order to
accomplish the foregoing actions. If any state takeover statute or similar
statute or regulation becomes applicable to the Merger, this Agreement or
any of the other transactions contemplated hereby, the Company, Parent and
Merger Sub will take all action necessary to ensure that the Merger and the
other transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger and the
other transactions contemplated by this Agreement.
SECTION 7.02. Certain Filings. Subject to the terms and conditions of
this Agreement, including, without limitation, the terms and conditions set
forth in Section 7.07 hereof, the Company, Parent and Merger Sub shall
cooperate with one another (a) in connection with the preparation of the
Company Proxy Statement and the Company Disclosure Documents, (b) in
determining whether any other action by or in respect of, or filing with,
any Governmental Entity or any actions, consents, approvals or waivers are
required to be obtained from parties to any material contracts in
connection with the consummation of the transactions contemplated by this
Agreement and (c) in seeking any such actions, consents, approvals or
waivers or making any such filings, furnishing information required in
connection therewith or with the Company Proxy Statement and the Company
Disclosure Documents and seeking timely to obtain any such actions,
consents, approvals or waivers.
SECTION 7.03. Public Announcements. Parent, Merger Sub and the Company
will consult with each other before issuing any press release or making any
public statement with respect to this Agreement and the transactions
contemplated hereby and, except as may be required by applicable law or any
listing agreement with any national securities exchange, will not issue any
such press release or make any such public statement prior to obtaining the
other party's or parties' consent to any such public statement.
SECTION 7.04. Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company and Merger
Sub, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf the Company and Merger Sub, any other actions
and things to vest, perfect or confirm of record or otherwise in the
Surviving Corporation any and all right, title and interest in, to and
under any of the rights, properties or assets of the Company or Merger Sub
acquired or to be acquired by the Surviving Corporation as a result of, or
in connection with, the Merger.
SECTION 7.05. Notices of Certain Events. The Company, Parent and
Merger Sub shall promptly notify the other of:
(a) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement;
(b) any notice or other communication from any Governmental
Entity in connection with the transactions contemplated by this
Agreement;
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against,
relating to or involving or otherwise affecting the Company or any
Subsidiary, on the one hand, or Parent or Merger Sub, on the other
hand, which relate to the consummation of the transactions
contemplated by this Agreement; and
(d) any action, event or occurrence that would constitute a
breach of any representation, warranty, covenant or agreement of it
set forth in this Agreement.
SECTION 7.06. Preparation of the Company Proxy Statement. As soon as
reasonably practicable following the date of this Agreement, the Company
shall prepare and file the Company Proxy Statement with the SEC. The
Company will use all reasonable efforts to cause the Company Proxy
Statement to be mailed to the Company's stockholders as promptly as
practicable after the Company Proxy Statement is cleared by the SEC. No
filing of, or amendment or supplement to, the Company Proxy Statement will
be made by the Company without providing Parent with the opportunity to
review and comment thereon, and the Company shall, promptly after its
receipt thereof, advise the Company of any request by the SEC for amendment
of the Company Proxy Statement or comments thereon and responses thereto or
requests by the SEC for additional information and the Company shall
provide Parent with copies of all such materials promptly following receipt
thereof and shall not respond thereto without providing Parent with an
opportunity to review any such response. If at any time prior to the
Effective Time any information relating to the Company, Parent or Merger
Sub or any of their respective affiliates, officers or directors, should be
discovered by the Company, Parent or Merger Sub which should be set forth
in an amendment or supplement to the Company Proxy Statement, so that the
Company Proxy Statement or any related documents would not include any
misstatement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, the party which discovers such
information shall promptly notify the other party or parties hereto and an
appropriate amendment or supplement describing such information shall be
promptly filed with the SEC and, to the extent required by law,
disseminated to the stockholders of the Company.
SECTION 7.07. Consents; Antitrust Matters.
(a) Subject to the terms and conditions set forth in this Section
7.07, Parent, Merger Sub and the Company shall use their commercially
reasonable efforts to obtain all material consents of third parties
(which, in any event, shall include consents in respect of the
contracts listed under the heading "Consents" in the Company
Disclosure Letter) and Governmental Entities (other than the Antitrust
Authorities), and to make all governmental filings, necessary to the
consummation of the transactions contemplated by this Agreement. The
Company and Parent shall as soon as practicable following the
execution and delivery of this Agreement (and, in any event, within
ten business days following the execution and delivery of this
Agreement) file the Pre-Merger Notification and Report Forms under the
HSR Act with the Federal Trade Commission (the "FTC") and the
Antitrust Division of the Department of Justice (the "Antitrust
Division") (collectively the "Antitrust Authorities") and, subject to
the terms and conditions set forth in this Section 7.07, shall use
their best efforts to respond as fully and as promptly as practicable
to all inquiries received from the FTC or the Antitrust Division for
additional information or documentation prior to the issuance of a
Request for Additional Information under the HSR Act (a "Second
Request").
(b) In the event the Antitrust Division or the FTC issues a
Second Request, the parties hereto shall use reasonable best efforts
to substantially comply with the Second Request as promptly as
practicable (and in any event, the Company shall substantially comply
with a Second Request no later than Parent).
(c) In furtherance and not in limitation of the foregoing, and
subject to the terms set forth in this Section 7.07, each party shall
cooperate and consult with the other party in connection with the
actions referenced in this Section 7.07. In particular, each party
shall, subject to applicable law and the limitations set forth in
Section 5.03 and except as prohibited by any applicable representative
of any applicable Governmental Entity, (i) furnish to the other such
information and assistance as the other reasonably may request in
connection with the preparation of any submissions to, or agency
proceedings by, any Governmental Entity under the HSR Act or any
comparable laws of foreign jurisdictions; (ii) promptly notify and
apprise the other party of (and, if in writing, supply such party
with) any communication (or other correspondence or other memoranda)
to that party from the Antitrust Division, the FTC, any State Attorney
General or any other Governmental Entity, and permit the other party
to review in advance and accept all of the other party's reasonable
comments, in connection with, any proposed written communication to
any of the foregoing; (iii) to the extent practical, not participate
in any substantive meeting or any material discussion or communication
with any Governmental Entity in respect of any filings, investigation
or inquiry concerning this Agreement or the Merger, unless it consults
with the other party in advance and, as permitted by such Governmental
Entity, gives the other party the opportunity to attend and
participate thereat, or to the extent prior consultation is not
practical, shall promptly report to the other party the substance of
the communication; (iv) furnish the other party with copies of all
correspondence, filings, and written communications (and memoranda
setting forth the substance thereof) between them and their Affiliates
and their respective representatives on the one hand, and any
Governmental Entities or their respective staffs on the other hand,
with respect to this Agreement and the Merger; and (v) make available
such party's respective counsel, experts, and advisors to (and have
such persons participate with) the other party, and its respective
counsel, experts, and advisors for the purpose of (and in connection
with) the actions contemplated in this Section 7.07.
(d) Other than as provided elsewhere in this Section 7.07, Parent
shall take such reasonable best efforts to ensure that (x) no
requirement for a waiver, consent or approval of the FTC, the
Antitrust Division, any State Attorney General or other Governmental
Entity, (y) no decree, judgment, injunction, temporary restraining
order or any other order in any suit or proceeding, and (z) no other
matter relating to any Antitrust Law, would preclude consummation of
the Merger by the Outside Date, including promptly offering to divest:
(i) the United States cotton seed business acquired by
Parent in 2005, including the Stoneville(R) and NexGen(R) brands,
along with substantially all the United States assets acquired in
that transaction, or to the extent those assets no longer exist
or exist in a different form, substantially equivalent assets;
and
(ii) a license to Parent's currently commercialized cotton
traits (i.e., the traits marketed under the following trademarks:
Roundup Ready(R), Roundup Ready(R) Flex, Bollgard(R) and
Bollgard(R) II) on terms with respect to financial terms and
stacking rights at least as favorable as contained in any
existing commercial license to those traits.
In an effort to ensure that no requirement for a waiver, consent or
approval of the FTC, the Antitrust Division, any State Attorney General or
other Governmental Entity, no decree, judgment, injunction, temporary
restraining order or any other order in any suit or proceeding, and no
other matter relating to any Antitrust Law, would preclude consummation of
the Merger by the Outside Date, Parent shall defend through litigation on
the merits any claim asserted in any court by any Person, and in the event
of such litigation, the Company shall use its reasonable best efforts to
cooperate with Parent in such litigation.
(e) If, on or before the date that is six (6) months following
the date of the execution and delivery of this Agreement, the
condition to Closing set forth in Section 8.01(b) hereof has not been
satisfied, the Outside Date shall automatically be extended up to, but
not beyond, six (6) months, solely for the purpose of Parent
satisfying its obligations under Section 7.07(d).
(f) Notwithstanding any other provision of this Agreement,
including Section 7.07(d), in the event that this Agreement is
terminated pursuant to (i) Section 9.01(b) and at such time the
conditions to Closing set forth in Section 8.01(b) or 8.01(c) have not
been satisfied (in the case of Section 8.01(c), due to any statute,
rule, regulation, temporary restraining order, preliminary or
permanent injunction or other order or legal restraint, in each case
relating to antitrust or competition matters) or (ii) Section 9.01(c)
due to any law, regulation, judgment, injunction, order or decree
relating to antitrust or competition matters, and in either case, the
Merger has not been consummated, then within five business days
following such termination, Parent shall pay to the Company in cash
via wire transfer of immediately available federal funds an aggregate
amount equal to $600,000,000 (the "Antitrust Termination Payment") and
upon making such payment, the Litigation shall be terminated and
extinguished in all respects and the parties hereto shall promptly
take (or, if applicable, cause to be taken) any and all actions as may
be required to dismiss the Litigation with prejudice. Payment of the
Antitrust Termination Payment shall be the sole and exclusive remedy
of the Company for any breach by Parent of this Section 7.07. For the
avoidance of doubt, upon the payment of the Antitrust Termination
Payment pursuant to the first sentence of this paragraph, Parent shall
not have any other obligation to the Company under this Agreement.
SECTION 7.08. Confidentiality. The Confidentiality Agreement will
remain in full force and effect until its expiration in accordance with the
terms thereof.
SECTION 7.09. Litigation Stay. Upon the execution and delivery of this
Agreement by all of the parties hereto, and until the earlier to occur of
the termination of this Agreement pursuant to the terms of Article 9 hereof
and the Closing Date, and subject to the rights of the parties hereto in
respect of the Litigation as further provided in Article 9 hereof, each
party shall take all steps necessary to obtain (a) from the Mississippi
Supreme Court a continuance of up to twelve months of any hearing on, or
decision in, Delta and Pine Land Company v. Monsanto Company, et al, No.
05-M-00015-SCT consolidated with No. 05-M-00016-SCT (the "Supreme Court
Case") and (b) to the extent necessary, from the Circuit Court of the First
Judicial District of Bolivar County a stay of Delta and Pine Land Company
v. Monsanto Company, et al, Civil Action No. 2000-1 (the "Lower Court Case"
and, together with the Supreme Court Case, the "Litigation"). Without
limiting the foregoing, prior to the earlier to occur of the termination of
this Agreement in accordance with Article 9 hereof and the Closing Date,
Parent and the Company shall not, and shall cause their respective
Affiliates not to, prosecute any claims they may have in respect of or
otherwise pursue the Litigation. Notwithstanding the foregoing, in the
event the parties are unable to obtain (or attain the maintenance of) such
stay or continuance from any court with jurisdiction to grant such stay or
continuance, including the Mississippi Supreme Court and, to the extent
applicable, the Circuit Court of the First Judicial District of Bolivar
County, then the parties shall (i) take all steps necessary to obtain a
dismissal of the Litigation without prejudice with leave to refile in (and
only in) the same forum, (ii) consent to such refiling, (iii) waive, and
not assert, any applicable statute of limitations or defense (whether in
equity or otherwise) relating to the passage of time caused by any such
dismissal or the non-pursuit of claims or counterclaims as of the date
hereof through the termination of this Agreement or failure to prosecute
caused by any such dismissal or the non-pursuit of claims or counterclaims
as of the date hereof through the termination of this Agreement and (iv)
waive, and not assert, any defense relating to or arising out of the
parties' conduct in connection with negotiating or attempting to implement
this Agreement.
ARTICLE 8.
CONDITIONS TO THE MERGER
SECTION 8.01. Conditions to the Obligations of Each Party. The
obligations of the Company, Parent and Merger Sub to consummate the Merger
are subject to the satisfaction or written waiver of the following
conditions:
(a) this Agreement shall have been approved and adopted by the
stockholders of the Company in accordance with Delaware Law and the
Restated Certificate of Incorporation of the Company;
(b) (i) any applicable waiting period under the HSR Act relating
to the Merger shall have expired or been terminated, and (ii) any
applicable waiting or similar period with respect to the competition
laws of Spain shall have expired or terminated, provided that Parent
may, at any time and in its sole discretion, waive the condition to
Closing specified in this clause (ii);
(c) no statute, rule, regulation, temporary restraining order,
preliminary or permanent injunction or other order enacted, entered,
promulgated, enforced or issued by any Governmental Entity or other
legal restraint or prohibition preventing the consummation of the
Merger shall be in effect, but only if it is (i) any United States
federal or state statute, rule or regulation or United States federal
or state court order, injunction or other legal restraint or
prohibition or (ii) except as otherwise expressly provided in Section
8.01(b) hereof, any other statute, rule, regulation, court order,
injunction or other legal restraint or prohibition if the violation
thereof would, individually or in the aggregate, have or reasonably be
expected to have a Material Adverse Effect (after giving effect to the
Merger) or would subject any director, officer or other employee of
Parent, Merger Sub, the Company or any of its Subsidiaries to any
criminal liability; provided, -------- however, that prior to
asserting this condition each of ------- the parties shall have used
all reasonable best efforts to prevent the entry of any such
injunction, court order, legal restraint or prohibition to have any
such injunction, court order, legal restraint or prohibition lifted or
withdrawn, and to appeal as promptly as possible any such injunction,
court order, legal restraint or prohibition that may be entered;
(d) with respect to the obligations of Parent and Merger Sub, (i)
the representations and warranties of the Company as set forth in this
Agreement (other than the representations and warranties set forth in
Section 3.03, the first sentence of Section 3.19(b) and Section
3.19(e) of this Agreement) shall be true and correct as if made on and
as of the Effective Time (other than those representations and
warranties which address matters only as of a certain date, which
shall be true and correct as of such certain date and other than the
representations and warranties set forth Sections 3.08(b)-(e), which
shall only need to be true and correct as of the date of this
Agreement), except to the extent that the failures in the aggregate of
such representations and warranties (disregarding any qualifications
as to materiality contained therein) to be true and correct would not,
individually or in the aggregate, have a Material Adverse Effect, and
(ii) the representations and warranties of the Company set forth in
Section 3.03, the first sentence of Section 3.19(b) and Section
3.19(e) of this Agreement shall be true and correct as if made on and
as of the Effective Time, except to the extent that the failures in
the aggregate of such representations and warranties (disregarding any
qualifications as to materiality contained therein) to be true and
correct would not, individually or in the aggregate, result in or be
reasonably likely to result in aggregate liability to Parent or any
Affiliate thereof (including, for these purposes, the Company and its
Subsidiaries (including the Other Entities)) in excess of $4,000,000,
and Parent shall have received a certificate of the chief executive
officer, president or vice president/finance of the Company to such
effect;
(e) with respect to the obligations of the Company, the
representations and warranties of Parent and Merger Sub as set forth
in this Agreement shall be true and correct as if made on and as of
the Effective Time (other than those representations and warranties
which address matters only as of a certain date, which shall be true
and correct as of such certain date), except to the extent that the
failures in the aggregate of such representations and warranties
(disregarding any qualifications as to materiality contained therein)
to be true and correct would not, individually or in the aggregate,
have a Buyer Material Adverse Effect, and the Company shall have
received a certificate of the president, chief financial officer or
any vice president of Parent to such effect;
(f) with respect to the obligations of Parent and Merger Sub,
there shall not have been any change that, individually or in the
aggregate, would have a Material Adverse Change, and Parent shall have
received a certificate of the chief executive officer, president or
vice president/finance of the Company to such effect; and
(g) with respect to the obligations of Parent and Merger Sub, the
Company shall have performed in all material respects all obligations,
and complied in all material respects with all agreements and
covenants, in each case required to be performed by or complied with
by it under this Agreement on or prior to the Effective Time, and
Parent shall have received a certificate of the chief executive
officer, president or vice president/finance of the Company to such
effect; and, with respect to the obligations of the Company, Parent
and Merger Sub shall have performed in all material respects all
obligations, and complied in all material respects with all agreements
and covenants, in each case required to be performed by or complied
with by them under this Agreement on or prior to the Effective Time,
and the Company shall have received a certificate of the president,
chief financial officer or any vice president of Parent to such
effect.
SECTION 8.02. Burden of Proof. Any party seeking to claim that a
condition to its obligation to effect the Merger has not been satisfied by
reason of the fact that a Material Adverse Change or a Material Adverse
Effect has occurred or would be reasonably expected to occur or result will
have the burden of proof to establish that occurrence or likelihood.
ARTICLE 9.
TERMINATION
SECTION 9.01. Termination. This Agreement may be terminated and the
Transaction may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company):
(a) by mutual written consent of the Company and Parent;
(b) by either the Company or Parent, if the Merger has not been
consummated on or before February 14, 2007 (the "Outside Date");
provided, however, that the Outside Date shall be extended until
August 14, 2007 pursuant to the terms set forth in Section 7.07(e)
hereof and, in such circumstances, any and all references in this
Agreement to the "Outside Date" shall mean and refer to such extended
date; and provided, further however, that no party may terminate this
Agreement pursuant to this subsection if such party's failure to
fulfill any of its obligations under this Agreement shall have been
the reason that the Effective Time shall not have occurred on or
before said date;
(c) by either the Company or Parent, if there shall be any law or
regulation that makes consummation of the Transaction illegal or
otherwise prohibited or if any judgment, injunction, order or decree
enjoining Parent, Merger Sub or the Company from consummating the
Transaction is entered and such judgment, injunction, order or decree
shall become final and nonappealable;
(d) by Parent, if (i) the Company's Board of Directors shall
withdraw, modify or change its recommendation or approval in respect
of this Agreement or the Merger in a manner adverse to Parent or
Merger Sub, (ii) the Company Board approves, endorses or recommends
any Acquisition Transaction other than the Merger or (iii) this
Agreement has been submitted to the stockholders of the Company for
adoption at a duly convened Company Stockholders Meeting (including
any adjournment or postponement thereof) and the stockholders shall
not have approved this Agreement in accordance with the terms hereof
and Delaware Law and the Restated Certificate of Incorporation of the
Company;
(e) [Intentionally Omitted]
(f) subject to the terms of Section 5.04(a), by the Company prior
to the date of the Company Stockholders Meeting, to allow the Company
to enter into an agreement in respect of an Acquisition Transaction
which the Company's Board of Directors has determined, in good faith,
after consultation with its outside legal counsel and financial
advisor, and in the exercise of its fiduciary duties, and after giving
effect to all of the adjustments that may be offered by Parent as
contemplated by Section 5.04, constitutes a Superior Proposal;
(g) by Parent, if the Company has breached any representation,
warranty, covenant or agreement contained in this Agreement such that
the conditions to the obligation of Parent and Merger Sub to effect
the Closing that are set forth in Sections 8.01(d) or 8.01(g) hereof
would not be satisfied as of any date following the date hereof;
provided, however, that Parent may not terminate this Agreement
pursuant to this subsection unless any such breach has not been cured
within twenty (20) days after written notice thereof by Parent to the
Company informing the Company of such breach, it being understood and
agreed that no cure period shall be required for a breach which by its
nature cannot be cured; provided, further however, that Parent may not
terminate this Agreement pursuant to this subsection if it is then in
material breach of the terms of this Agreement; or
(h) by the Company, if Parent or Merger Sub has breached any
representation, warranty, covenant or agreement contained in this
Agreement such that the conditions to the obligation of the Company to
effect the Closing that are set forth in Sections 8.01(e) or 8.01(g)
hereof would not be satisfied as of any date following the date
hereof; provided, however, that the Company may not terminate this
Agreement pursuant to this subsection unless any such breach has not
been cured within twenty (20) days after written notice thereof by the
Company to Parent informing Parent of such breach, it being understood
and agreed that no cure period shall be required for a breach which by
its nature cannot be cured; provided, further however, that the
Company may not terminate this Agreement pursuant to this subsection
if it is then in material breach of the terms of this Agreement.
Such right of termination shall be exercised by written notice of
termination given by the terminating party to the other parties hereto in
the manner hereinafter provided.
SECTION 9.02. Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken by or pursuant to resolutions of their
respective Boards of Directors, may (a) extend the time for the performance
of any of the obligations or other acts of the parties hereto, (b) waive
any inaccuracies in the representations and warranties contained herein or
in any document delivered pursuant hereto, and (c) except for approval of
the holders of Shares and, in connection with all HSR Act filings, of the
FTC and the Antitrust Division, waive compliance with any of the agreements
or conditions contained herein. Any agreement on the part of a party hereto
to any such extension or waiver shall be valid if set forth in an
instrument in writing signed on behalf of such party.
SECTION 9.03. Closing. Subject to the satisfaction or waiver of the
conditions contained in Section 8.01 hereof, the closing of the Merger
contemplated by this Agreement (the "Closing") shall take place at the
offices of Willkie Farr & Gallagher LLP in New York, New York as soon as
practicable (but in no event later than the third business day) after the
satisfaction or waiver of all of the conditions to the Merger contained in
Section 8.01 hereof (other than those conditions that by their nature are
to be satisfied by actions taken at the Closing, but subject to the
satisfaction or waiver of those conditions) or at such other time and place
as Parent and the Company shall agree in writing (the "Closing Date").
SECTION 9.04. Effect of Termination.
(a) If this Agreement is terminated pursuant to Section 9.01
hereof, this Agreement shall terminate with no liability on the part
of any party hereto, except that the agreements contained in Sections
6.01, 7.08, this Section 9.04 and Article 10 hereof shall survive the
termination hereof. The parties acknowledge and agree that upon any
such termination of this Agreement, the rights of the parties set
forth in this Section 9.04 shall be the sole and exclusive remedy of
the parties and the parties shall not have the right to pursue any
other remedy at law, in equity or otherwise in respect of this
Agreement and the transactions contemplated hereby, with all such
rights being waived to the fullest extent permitted by applicable law.
(b) In the event that this Agreement is terminated by the Company
pursuant to Section 9.01(h) hereof due to the fact that Parent or
Merger Sub has breached any of their respective covenants set forth in
Article 6 or Article 7 hereof (a "Parent Covenant Termination Event"),
then within five business days following the termination of this
Agreement by the Company upon the occurrence of the Parent Covenant
Termination Event, Parent shall pay to the Company in cash via wire
transfer of immediately available federal funds an aggregate amount
equal to $600,000,000 and upon making such payment, the Litigation
shall be terminated and extinguished in all respects and the parties
hereto shall promptly take (or, if applicable, cause to be taken) any
and all actions as may be required to dismiss the Litigation with
prejudice.
(c) In the event that this Agreement is terminated by Parent
pursuant to Section 9.01(d)(i) hereof, and (i) if the Company's Board
of Directors withdrew, modified or changed its recommendation or
approval in respect of this Agreement or the Merger in accordance with
the terms set forth in Section 5.02(b) hereof and (ii) at the time the
Company's Board of Directors withdrew, modified or changed its
recommendation or approval in respect of this Agreement or the Merger,
the Company's Board of Directors had not received a written proposal
or written indication of interest (whether or not publicly announced)
from any Person (other than Parent or any Affiliate thereof) with
respect to an Acquisition Transaction (a "Stand-Alone Fiduciary
Termination Event"), then (x) within five business days following the
termination of this Agreement by Parent upon the occurrence of such
Stand-Alone Fiduciary Termination Event, the Company shall pay to
Parent in cash via wire transfer of immediately available federal
funds an aggregate amount equal to $15,000,000, (y) the obligations of
the parties under the terms of Section 7.09 hereof to obtain and
maintain a continuance or stay, as applicable, in respect of the
Litigation and otherwise not to prosecute or pursue any claims in
respect of the Litigation shall terminate and (z) the parties hereto
shall be permitted to pursue any and all rights and remedies that they
may have in respect of the Litigation (including, if applicable,
re-instituting all or any portion of the Litigation that was dismissed
without prejudice in accordance with the terms of Section 7.09
hereof), which rights and remedies shall expressly survive any such
termination.
(d) In the event that this Agreement is terminated by (i) Parent
pursuant to Section 9.01(d)(ii) hereof or (ii) by the Company pursuant
to Section 9.01(f) hereof (each, a "Topping Offer Termination Event"),
then contemporaneously with the termination of this Agreement by the
Company or Parent, as applicable, upon the occurrence of such Topping
Offer Termination Event, the Litigation shall be terminated and
extinguished in all respects and the parties hereto shall promptly
take (or, if applicable, cause to be taken) any and all actions as may
be required to dismiss the Litigation with prejudice.
(e) In the event that this Agreement is terminated by Parent
pursuant to Section 9.01(g) hereof due to the fact that the Company
has breached any of its covenants set forth in Article 5 or Article 7
hereof, including, without limitation, if the Company's Board of
Directors withdrew, modified or changed its recommendation or approval
in respect of this Agreement or the Merger in breach of the terms set
forth in Section 5.02(b) hereof (a "Company Covenant Termination
Event"), then contemporaneously with the termination of this Agreement
by Parent upon the occurrence of such Company Covenant Termination
Event, the Litigation shall be terminated and extinguished in all
respects and the parties hereto shall promptly take (or, if
applicable, cause to be taken) any and all actions as may be required
to dismiss the Litigation with prejudice.
(f) In the event that this Agreement is terminated by the Company
or Parent other than in connection with a termination which would give
rise to an obligation to make the Antitrust Termination Payment or a
Parent Covenant Termination Event, a Stand-Alone Fiduciary Termination
Event, a Topping Offer Termination Event or a Company Covenant
Termination Event, then, effective upon the effective date of any such
termination, (i) the obligations of the parties under the terms of
Section 7.09 hereof to obtain and maintain a continuance or stay, as
applicable, in respect of the Litigation and otherwise not to
prosecute or pursue any claims in respect of the Litigation shall
terminate and (ii) the parties hereto shall be permitted to pursue any
and all rights and remedies that they may have in respect of the
Litigation (including, if applicable, re-instituting all or any
portion of the Litigation that was dismissed without prejudice in
accordance with the terms of Section 7.09 hereof), which rights and
remedies shall expressly survive any such termination; provided,
however, that in the event that this Agreement is terminated by Parent
pursuant to (x) Section 9.01(g) hereof due to the fact that the
Company has breached any of its representations or warranties
contained in this Agreement or (y) Section 9.01(b) hereof and the
condition to closing set forth in Section 8.01(f) hereof is not
satisfied on the effective date of any such termination, in addition
to the consequences of such termination as set forth above in this
clause (f), (A) Section 2.1.39 of that certain U.S. Bollgard Gene
License and Seed Services Agreement, dated as of February 2, 1996, by
and among Parent, the Company and D&M Partners, as amended, shall,
effective upon the effective date of the termination of this Agreement
as contemplated by clause (x) or clause (y) immediately above, be
amended such that any and all references therein to "seventy-one
percent (71%)" or ".71" therein shall be changed to "sixty percent
(60%)" and ".60", respectively, and (B) Section 2.1.40 of that certain
U.S. Roundup Ready Gene License and Seed Services Agreement, dated as
of February 2, 1996, by and among Parent, the Company and D&M
Partners, as amended, shall, effective upon the effective date of the
termination of this Agreement as contemplated by clause (x) or clause
(y) immediately above, be amended such that Section 2.1.40 thereof be
deleted in its entirety and replaced with the following: "The term
MONSANTO ROYALTY PERCENTAGE" means sixty percent (60%)."
ARTICLE 10.
MISCELLANEOUS
SECTION 10.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile, telex or
similar writing) and shall be given:
If to Parent, Merger Sub or the Surviving
Corporation
(following the Effective Time), to:
Monsanto Company
800 North Lindbergh Boulevard
St. Louis, MO 63167
Facsimile: (314) 614-4832
Attention: Chief Financial Officer
with a copy to:
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
Attention: William H. Gump
Facsimile: (212) 728-8111
if to the Company (prior to the Effective Time), to:
Delta and Pine Land Company
P.O. Box 157
One Cotton Row
Scott, Mississippi 38772
Facsimile: (662) 742-3795
Attention: Chief Executive Officer
with copies to:
Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, NY 10014
Attention: Arthur Fleischer, Jr.
Peter Golden
Facsimile: (212) 859-4000
and
Fried, Frank, Harris, Shriver & Jacobson LLP
1001 Pennsylvania Avenue, NW
Washington, DC 20004
Attention: Lawrence R. Bard
Facsimile: (202) 639-7003
and
Phelps Dunbar LLP
111 East Capitol Street, Suite 600
P.O. Box 23066
Jackson, MS 39225
Attention: Jerome C. Hafter
Facsimile: (601) 360-9777
or such other address, facsimile or telex number as such party may
hereafter specify for the purpose by notice to the other parties hereto
delivered in accordance with the terms hereof. Each such notice, request or
other communication shall be effective (a) if given by facsimile or telex,
upon confirmation of receipt, or (b) if given by any other means, when
delivered at the address specified in this Section 10.01.
SECTION 10.02. Survival of Representations and Warranties. The
representations and warranties contained herein shall not survive the
Effective Time.
SECTION 10.03. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived
prior to the Effective Time if, and only if, such amendment or waiver
is in writing and signed, in the case of an amendment, by the Company,
Parent and Merger Sub or in the case of a waiver, by the party against
whom the waiver is to be effective; provided that after the adoption
of this Agreement by the stockholders of the Company, no such
amendment or waiver shall be effective if it requires further
stockholder approval under applicable law, unless the approval of the
requisite stockholders under applicable law has been obtained.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies provided by law.
SECTION 10.04. Expenses. Except as provided in this Agreement, each
party shall pay its own costs and expenses relating to this Agreement and
the transactions contemplated hereby, except that each of Parent and the
Company shall bear and pay one-half of the costs and expenses incurred in
connection with the filing, printing and mailing of the Company Proxy
Statement (including SEC filing fees, but excluding the fees and expenses
of legal counsel and other advisors incurred in connection with the
foregoing).
SECTION 10.05. Successors and Assigns. This Agreement and the rights
and obligations hereunder may not be assigned; provided that this Agreement
may be assigned by Parent and/or Merger Sub to, and the rights and
obligations hereunder shall be binding upon and inure to the benefit of,
its legal successors and assigns through a reorganization, merger, business
combination or similar transaction; provided further, however, that if
Parent determines that there is a reasonable likelihood that there would be
a termination event that would give rise to an obligation on the part of
Parent to pay the Antitrust Termination Payment, with not less than one (1)
business day's prior written notice to the Company, Parent and Merger Sub
may enter into an agreement to jointly assign their respective rights and
obligations under this Agreement, in whole but not in part, to any Person
acceptable to the Company in its reasonable discretion pursuant to an
instrument by which such Person assumes, effective immediately prior to
Closing, all of the obligations of Parent and Merger Sub under this
Agreement and, upon, but not prior to, the Closing, including without
limitation, the deposit of the Payment Fund, each of Parent and Merger Sub
shall be deemed fully released from all of their respective obligations
hereunder.
SECTION 10.06. Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of Delaware, without giving effect to
any choice of law or conflict of law rules or provisions (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of
Delaware.
(b) Each of the parties hereto irrevocably agrees that any legal
action or proceeding with respect to this Agreement and the rights and
obligations arising hereunder, or for recognition and enforcement of
any judgment in respect of this Agreement and the rights and
obligations arising hereunder brought by the other party hereto or its
successors or permitted assigns shall be brought and determined
exclusively in the Delaware Court of Chancery, or in the event (but
only in the event) that such court does not have subject matter
jurisdiction over such action or proceeding, in the United States
District Court for the District of Delaware. Each of the parties
hereto agrees that mailing of process or other papers in connection
with any such action or proceeding in the manner provided in Section
10.01 or in such other manner as may be permitted by applicable laws,
will be valid and sufficient service thereof. Each of the parties
hereto hereby irrevocably submits with regard to any such action or
proceeding for itself and in respect of its property, generally and
unconditionally, to the personal jurisdiction of the aforesaid courts
and agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated by this Agreement in
any court or tribunal other than the aforesaid courts. Each of the
parties hereto hereby irrevocably waives, and agrees not to assert, by
way of motion, as a defense, counterclaim or otherwise, in any action
or proceeding with respect to this Agreement and the rights and
obligations arising hereunder, or for recognition and enforcement of
any judgment in respect of this Agreement and the rights and
obligations arising hereunder (i) any claim that it is not personally
subject to the jurisdiction of the above named courts for any reason
other than the failure to serve process in accordance with this
Section 10.06(b), (ii) any claim that it or its property is exempt or
immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice,
attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise) and (iii) to the fullest
extent permitted by the applicable law, any claim that (x) the suit,
action or proceeding in such court is brought in an inconvenient
forum, (y) the venue of such suit, action or proceeding is improper or
(z) this Agreement, or the subject matter hereof, may not be enforced
in or by such courts.
(c) Each party acknowledges and agrees that any controversy which
may arise under this Agreement is likely to involve complicated and
difficult issues and, therefore, each such party irrevocably and
unconditionally waives any right it may have to a trial by jury in
respect of any legal action arising out of or relating to this
Agreement or the transactions contemplated by this Agreement. Each
party to this Agreement certifies and acknowledges that (i) no
representative of any other party has represented, expressly or
otherwise, that such other party would not seek to enforce the
foregoing waiver in the event of a legal action, (ii) such party has
considered the implications of this waiver, (iii) such party makes
this waiver voluntarily, and (iv) such party has been induced to enter
into this Agreement by, among other things, the mutual waivers and
certifications in this Section 10.06(c).
SECTION 10.07. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts (including by means of telecopied
signature pages), each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
SECTION 10.08. Headings. Section headings used in this Agreement are
for convenience only and shall be ignored in the construction and
interpretation hereof.
SECTION 10.09. No Third Party Beneficiaries. Except for Section 6.02
hereof, no provision of this Agreement is intended to, or shall, confer any
third party beneficiary or other rights or remedies upon any Person other
than the parties hereto.
SECTION 10.10. Remedies. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms. It is
accordingly agreed that the parties hereto shall be entitled to specific
performance of the terms hereof, this being in addition to any other remedy
to which they are entitled at law or in equity.
SECTION 10.11. Severability. The provisions of this Agreement are
severable and the invalidity or unenforceability of any provision will not
affect the validity or enforceability of the other provisions of this
Agreement. If any provision of this Agreement, or the application of that
provision to any Person or any circumstance, is invalid or unenforceable,
(a) a suitable and equitable provision will be substituted for that
provision in order to carry out, so far as may be valid and enforceable,
the intent and purpose of the invalid or unenforceable provision and (b)
the remainder of this Agreement and the application of that provision to
other Persons or circumstances will not be affected by such invalidity or
unenforceability, nor will such invalidity or unenforceability affect the
validity or enforceability of that provision, or the application of that
provision, in any other jurisdiction.
SECTION 10.12. Rules of Construction. The parties to this Agreement
have been represented by counsel during the negotiation and execution of
this Agreement and waive the application of any laws or rule of
construction providing that ambiguities in any agreement or other document
will be construed against the party drafting such agreement or other
document.
SECTION 10.13. Entire Agreement. This Agreement, including the
exhibits hereto, the Company Disclosure Letter, the Confidentiality
Agreement and the Settlement Agreements, embody the entire agreement and
understanding of the parties hereto in respect of the subject matter
contained herein and supersede all prior agreements and understandings,
both written and oral, between the parties with respect to such subject
matter.
SECTION 10.14. Certain Defined Terms. As used herein, the term (a)
"Person" means an individual, corporation, partnership, limited liability
company, limited liability partnership, syndicate, trust, association,
organization or other entity, including any Governmental Entity, and
including any successor, by merger or otherwise, of any of the foregoing,
(b) "Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person and (c) "Subsidiary" means, with respect to any Person, another
Person, an amount of the voting securities, other voting ownership or
voting partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if there
are no such voting interests, 50% or more of the equity interests of which)
is owned directly or indirectly by such Person. Notwithstanding any other
provision of this Agreement, the Company shall not be in breach of any
provision hereof that requires the Company to cause any Subsidiary to do or
take any action whatsoever if the Company and its Subsidiaries do not have
the power, authority or ability to cause the Subsidiary to do or take such
action under the organization documents of such Subsidiary, or any
agreement between the Company or its Subsidiaries and any other Person that
is in effect on the date hereof. Unless otherwise expressly specified in
this Agreement, a reference to a "Subsidiary" or "Subsidiaries" are
references to a Subsidiary or Subsidiaries of the Company.
[Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement and Plan of Merger to be duly executed by their
respective authorized officers as of the day and year first above
written.
MONSANTO COMPANY
By: /s/ Terrell K. Crews
-------------------------------
Name: Terrell K. Crews
Title: Chief Financial Officer
MONSANTO SUB, INC.
By: /s/ Nancy E. Hamilton
-------------------------------
Name: Nancy E. Hamilton
Title: Secretary
DELTA AND PINE LAND COMPANY
By: /s/ W.T. Jagodinski
-------------------------------
Name: W.T. Jagodinski
Title: President and
Chief Executive Officer
EXHIBIT A
EXHIBIT B
EXHIBIT C