EXHIBIT 99.3
This EXCHANGE AGREEMENT dated as of July 1, 2002 (the "Agreement") is
made and entered into by and between Seminis, Inc., a Delaware corporation
("Seminis"), and Savia, S.A. de C.V, a Mexican corporation ("Savia").
WHEREAS, Savia owns 12,018 shares of Class C Redeemable PIK Preferred
Stock, par value $.01 per share, of Seminis (the "Class C Preferred Stock") with
a liquidation value of $120,181,364, which constitutes all of the issued and
outstanding shares of Class C Preferred Stock, and has contributed to Seminis
$46,695,372 of additional capital contributions ( the "APIC");
WHEREAS, Seminis is restructuring its debt under its Credit Agreement,
and as part of the restructuring it is necessary for Seminis to recapitalize the
issued and outstanding shares of Class C Preferred Stock, the APIC, and the
accrued and unpaid dividends on the Class C Preferred Stock and APIC, other than
$15,000,000 of such accrued and unpaid dividends to be paid by the Cash Payment
(as defined below), through the date of the Exchange (as defined below), (the
"Dividends");
WHEREAS, Savia has agreed as part of the recapitalization to exchange
the shares of Class C Preferred Stock, the APIC and the Dividends for shares of
Class A Common Stock, par value $.01 per share, of Seminis (the "Class A Common
Stock") and the payment of $15,000,000 plus Interest from the date hereof until
the date of payment, (including such Interest, the "Cash Payment"); and
WHEREAS, a special committee of independent directors of the Board of
Directors of Seminis and representatives of Savia have agreed that Savia will
receive in the Exchange (as defined below) an aggregate of 37,669,480 shares of
Class A Common Stock in exchange for the Class C Preferred Stock, the APIC and
the Dividends.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
EXCHANGE AND CLOSING
1.01 Exchange. Savia and Seminis hereby agree to exchange all of the
right, title and interest of Savia in and to the Class C Preferred Stock, the
APIC and the Dividends for the Seminis Shares (as defined below) (the
"Exchange"), on the terms and subject to the conditions set forth in Section
2.01.
1.02 Closing. The Closing will take place at the offices of Seminis,
Inc., 2700 Camino del Sol, Oxnard, California 93030, or at such other place as
Seminis and Savia mutually agree, at 10:00 A.M. local time, on the Closing Date.
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ARTICLE II
EXCHANGE OF SHARES AND PAYMENTS
2.01 Exchange of Shares.
(a) At the Closing, Seminis will deliver to Savia, a certificate or
certificates representing 37,669,480 shares of Class A Common Stock, registered
in the name of Savia (the "Seminis Shares"), and
(b) At the Closing, Savia will assign and transfer to Seminis all of
Savia's right, title and interest in and to the shares of Class C Preferred
Stock, the APIC and the Dividends by delivering to Seminis (i) a certificate or
certificates representing the shares of Class C Preferred Stock, in genuine and
unaltered form, duly endorsed in blank or accompanied by duly executed stock
powers endorsed in blank, with requisite stock transfer tax stamps, if any,
attached, and (ii) an acknowledgement that the APIC and the Dividends have been
fully satisfied as part of the delivery of the Seminis Shares.
2.02 Payment of Cash Payment. Seminis will pay to Savia the Cash Payment
simultaneously with the closing of the refinancing of the Credit Agreement, but
in no event later than December 31, 2002.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SAVIA
Savia hereby represents and warrants to Seminis as follows:
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3.01 Organization of Savia. Savia is a corporation duly organized,
validly existing and in good standing under the laws of the United Mexican
States. Savia has full corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby, including without limitation to own, hold,
exchange and transfer the shares of Class C Preferred Stock, the APIC and the
Dividends.
3.02 No Conflicts. The execution and delivery by Savia of this Agreement
do not, and the performance by Savia of its obligations under this Agreement and
the consummation of the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the certificate or articles of
incorporation or by-laws (or other comparable corporate charter
documents) of Savia;
(b) conflict with or result in a violation or breach of any term
or provision of any law or order applicable to Savia; or
(c) except for the consent required under the Pledge Agreement
(as defined in Section 3.04), (i) conflict with or result in a violation
or breach of, (ii) constitute (with or without notice or lapse of time
or both) a default under, or (iii) require Savia to obtain any consent,
approval or action of, make any filing with or give any notice to any
person under, the terms of any contract or agreement to which Savia is a
party.
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3.03 Legal Proceedings. There are no actions or proceedings pending or,
to the knowledge of Savia, threatened against, relating to or affecting Savia or
any of its assets and properties which could reasonably be expected to result in
the issuance of an order restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any of the transactions contemplated by this
Agreement.
3.04 Title to Class C Preferred Stock. Savia owns the 12,018 shares of
Class C Preferred Stock, beneficially and of record, free and clear of all
liens, except for the lien under the Pledge and Security Agreement dated as of
June 27, 2001 between Savia and JP Morgan Chase Bank (formerly known as The
Chase Manhattan Bank), as collateral agent (the "Pledge Agreement"). The
delivery of a certificate or certificates at the Closing representing the shares
of Class C Preferred Stock in the manner provided in Section 2.01(b) will
transfer to Seminis good and valid title to the shares of Class C Preferred
Stock, free and clear of all liens.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SEMINIS
Seminis hereby represents and warrants to Savia as follows:
4.01 Organization. Seminis is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware. Seminis
has full corporate power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby.
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4.02 No Conflicts. The execution and delivery by Seminis of this
Agreement do not, and the performance by Seminis of its obligations under this
Agreement and the consummation of the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the certificate of incorporation
or by-laws of Seminis;
(b) subject to obtaining the approvals set forth in Section 6.01
conflict with or result in a violation or breach of any term or
provision of any law or order applicable to Seminis; or
(c) except for the consent of the Required Banks (as defined in
the Credit Agreement) under the Credit Agreement set forth in Section
6.01 (c), (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default
under, or (iii) require Seminis to obtain any consent, approval or
action of, make any filing with or give any notice to any person under,
the terms of any contract or agreement to which Seminis is a party.
4.03 Legal Proceedings. There are no actions or proceedings pending or,
to the knowledge of Seminis, threatened against, relating to or affecting
Seminis or any of its assets and properties which could reasonably be expected
to result in the issuance of an order restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the transactions
contemplated by this Agreement.
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4.04 Class A Common Stock. Upon issuance and delivery of the Seminis
Shares in accordance with this Agreement, the Seminis Shares will be duly
authorized, validly issued, fully paid and nonassessable.
ARTICLE V
COVENANTS OF SAVIA
Savia covenants and agrees with Seminis that, at all times from and
after the date hereof until the Closing, Savia will comply with all covenants
and provisions of this Article V, except to the extent Seminis may otherwise
consent in writing.
5.01 Approvals. Savia will use its best efforts to obtain, as promptly
as practicable:
(a) the consent or approval of the required lenders under the
Pledge Agreement to the consummation of the transactions contemplated
under this Agreement.
5.02 Restrictions on Other Transfers. Savia will not sell, dispose, or
otherwise transfer, or incur any lien or other interest on, the Class C
Preferred Stock, the APIC or the Dividends, other than pursuant to the Pledge
Agreement.
5.03 Fulfillment of Conditions. Savia will use its best efforts and
proceed diligently and in good faith to satisfy its obligations under this
Agreement and to
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consummate the transactions contemplated under this Agreement, and cooperate
with Seminis in connection with the performance by Seminis of the obligations of
Seminis under Section 6.01, including voting the shares of Class B Common Stock
owned by Savia in favor of the approval of the issuance of the Seminis Shares at
the meeting of shareholders of Seminis convened to approve the issuance of the
Seminis Shares.
ARTICLE VI
COVENANTS OF SEMINIS
Seminis covenants and agrees with Savia that, at all times from and
after the date hereof until the Closing, Seminis will comply with all covenants
and provisions of this Article VI, except to the extent Savia may otherwise
consent in writing.
6.01 Approvals. Seminis will use its best efforts to obtain, as promptly
as practicable:
(a) the approval by the Board of Directors of Seminis of this
Agreement and the performance by Seminis of its obligations under this
Agreement;
(b) the approval by the shareholders of Seminis of the issuance
of the Seminis Shares to Savia under this Agreement; and
(c) the consent of the Required Banks (as defined in the Credit
Agreement) under the Credit Agreement to the Cash Payment.
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6.02 Fulfillment of Conditions. Seminis will use its best efforts and
proceed diligently and in good faith to satisfy its obligations under this
Agreement and to consummate the transactions contemplated under this Agreement,
and cooperate with Savia in connection with the performance by Savia of the
obligations of Savia under Section 5.01.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF SEMINIS
The obligations of Seminis hereunder to deliver the Seminis Shares and
the Cash Payment, are subject to the fulfillment, at or before the Closing, of
each of the following conditions (except, with respect to the Cash Payment, (i)
the references to Closing Date in Sections 7.01 and 7.03 shall refer to the date
the Cash Payment is made, and (ii) the condition set forth in Section 7.02, 7.04
and 7.05 shall not be applicable, and with respect to the Exchange, the
condition set forth in Section 7.07 shall not be applicable) all or any of which
may be waived in whole or in part by Seminis in its sole discretion:
7.01 Representations and Warranties. Each of the representations and
warranties made by Savia in this Agreement shall be true and correct in all
material respects on and as of the Closing Date as though such representation or
warranty was made on and as of the Closing Date.
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7.02 Performance. Savia shall have performed and complied with, in all
material respects, each agreement, covenant and obligation required by this
Agreement to be so performed or complied with by Savia at or before the Closing.
7.03 Orders and Laws. There shall not be in effect on the Closing Date
any order or law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement.
7.04 Fairness Opinion. The Board of Directors of Seminis shall have
received an opinion from UBS Warburg that the number of Seminis Shares to be
issued to Savia in the Exchange is fair, from a financial point of view, to the
holders of Class A Common Stock and Class B Common Stock of Seminis, other than
Savia and its affiliates and holders of Class B Common Stock that also hold
Class B Preferred Stock of Seminis (the "Fairness Opinion"). The Fairness
Opinion shall not have been withdrawn or modified in any manner.
7.05 Seminis Shareholder Approval. All required approvals by the
shareholders of Seminis to the issuance of the Seminis Shares pursuant to the
Exchange shall have been obtained.
7.06. Seminis Board Approval. The Board of Directors of Seminis shall
have approved this Agreement and the transactions contemplated under this
Agreement.
7.07. Seminis Required Lender Approval. The consent of the Required
Banks (as defined in the Credit Agreement) under the Credit Agreement necessary
to permit Seminis to pay the Cash Payment shall have been obtained.
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ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF SAVIA
The obligations of Savia hereunder to exchange the shares of Class C
Preferred Stock, the APIC and the Dividends for the Seminis Shares and to accept
the Cash Payment are subject to the fulfillment, at or before the Closing, of
each of the following conditions (except, with respect to the Cash Payment, (i)
the references to Closing Date in Sections 8.01 and 8.03 shall refer to the date
the Cash Payment is made, and (ii) the condition under Section 8.02 shall not be
applicable), all or any of which may be waived in whole or in part by Savia in
its sole discretion:
8.01 Representations and Warranties. Each of the representations and
warranties made by Seminis in this Agreement shall be true and correct in all
material respects on and as of the Closing Date as though such representation or
warranty was made on and as of the Closing Date.
8.02 Performance. Seminis shall have performed and complied with, in all
material respects, each agreement, covenant and obligation required by this
Agreement to be so performed or complied with by Seminis at or before the
Closing.
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8.03 Orders and Laws. There shall not be in effect on the Closing Date
any order or law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement.
8.04 Savia Required Creditor Approval. All consents under the Pledge
Agreement necessary to permit Savia to perform its obligations under this
Agreement and to consummate the transactions contemplated hereby shall have been
duly obtained and shall be in full force and effect.
ARTICLE IX
TERMINATION
9.01 Termination. This Agreement may be terminated, and the transactions
contemplated herein may be abandoned:
(a) at any time before the Closing, by mutual written agreement
of Savia and Seminis;
(b) at any time before the Closing, by Savia or Seminis in the
event of a material breach hereof by the non-terminating party if such
non-terminating
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party fails to cure such breach within five (5) Business Days following
notification thereof by the terminating party; or
(c) at any time after January 31, 2003, by either party, if the
Closing has not occurred on or prior to such date.
9.02 Effect of Termination. If this Agreement is validly terminated
pursuant to Section 9.01, this Agreement will forthwith become null and void,
and there will be no liability or obligation on the part of Savia or Seminis (or
any of their respective officers, directors, employees, agents or other
representatives or Affiliates), except as provided in the next succeeding
sentence and except that the provisions with respect to expenses in Section
11.03 will continue to apply following any such termination. Notwithstanding any
other provision in this Agreement to the contrary, upon termination of this
Agreement pursuant to Section 9.01(b) , Savia will remain liable to Seminis for
any willful breach of this Agreement by Savia existing at the time of such
termination, and Seminis will remain liable to Savia for any willful breach of
this Agreement by Seminis existing at the time of such termination, and Savia or
Seminis may seek such remedies, including damages and fees of attorneys, against
the other with respect to any such breach as are provided in this Agreement or
as are otherwise available at law or in equity.
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ARTICLE X
DEFINITIONS
10.01 Definitions. As used in this Agreement, the following defined
terms have the meanings indicated below:
"Business Day" means a day when banks in the United States are open for
business.
"Closing" means the closing of the transactions contemplated by Section
1.02.
"Closing Date" means two Business Days after the date that all of the
applicable conditions set forth in Articles VII and VIII have occurred or have
been waived by the parties hereto.
"Credit Agreement" means the Credit Agreement, dated as of June 28,
1999, among Seminis, Seminis Vegetable Seeds, Inc. and SVS Holland B.V., as
Borrowers, Harris Trust and Savings Bank, as Administrative Agent, Bank of
Montreal, Chicago Branch, as Syndication Agent, and the other Lenders from time
to time party thereto, as heretofore or hereafter amended.
"Interest" means a rate of interest of 10% per year, compounded
quarterly.
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ARTICLE XI
MISCELLANEOUS
11.01 Notices. All notices and other communications in connection with
this Agreement must be in writing and given by hand delivery, airmail (postage
prepaid) or telex or facsimile transmission, in each case addressed as specified
below or in any subsequent notice from the intended recipient to the party
sending the notice. Such notices and communications will be effective upon
delivery if delivered by hand, upon receipt if sent by mail, upon transmission
with answerback confirmed if sent by telex or upon receipt if sent by facsimile
transmission.
If to Seminis, to:
Seminis, Inc.
2700 Camino del Sol
Oxnard, California 93030
Facsimile No.: 805-918-2553
Attn: Enrique Osorio
If to Savia, to:
Savia, S.A. de C.V.
Rio Sena No. 500 Pte.
Col. Del Valle
Entre Humberto Lobo y Tamesis
San Pedro Garza Garcia, Nuevo Leon 66220
Mexico
Facsimile No.: 011 528181735508
Attn: Francisco Garza
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All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail in the manner described above to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other person to whom a
copy of such notice, request or other communication is to be delivered pursuant
to this Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other party hereto.
11.02 Entire Agreement. This Agreement supersedes all prior discussions
and agreements between the parties with respect to the subject matter hereof and
contains the sole and entire agreement between the parties hereto with respect
to the subject matter hereof.
11.03 Expenses. Except as otherwise expressly provided in this Agreement
(including without limitation as provided in Section 9.02), whether or not the
transactions contemplated hereby are consummated, each party will pay its own
costs and expenses.
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11.04 Waiver. Any term or condition of this Agreement may be waived at
any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under
this Agreement or by law or otherwise afforded, will be cumulative and not
alternative.
11.05 Amendment. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto.
11.06 Headings. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.
11.07 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, and (c)
the remaining provisions of this Agreement will remain
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in full force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom.
11.08 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware applicable to a contract
executed and performed in the State of Delaware, without giving effect to the
conflicts of laws principles thereof.
11.09 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officer of each party hereto as of the date first written
above.
SAVIA, S.A. DE C.V.
/s/Bernardo Jimenez
--------------------------------------
Name: Bernardo Jimenez
Title: Attorney in Fact
/s/ Francisco J. Garza
--------------------------------------
Name: Francisco J. Garza
Title: Attorney in Fact
SEMINIS, INC.
/s/ Enrique Osorio
--------------------------------------
Name: Enrique Osorio
Title: Treasury V.P.
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