EXHIBIT 10.23
LOAN AGREEMENT
-125-
LOAN AGREEMENT
This Loan Agreement ("Agreement") is made as of September 29, 1997 between
DowElanco, an Indiana general partnership (the "Lender"), and Mycogen
Corporation, a California corporation (the "Borrower").
The parties hereto have agreed and do hereby agree as follows:
1. The Loan
--------
1.1 The Advance
From the above date to April 1, 1998, the Lender agrees to make from
time to time advances to the Borrower ("Advances"), in an aggregate
amount not exceeding $50,000,000 (fifty million U.S. dollars), at any
time outstanding ("Commitment"). Advances repaid prior to April 1,
1998, may be reborrowed. This Agreement involves U.S. dollars only.
1.2 Repayment
Repayment may be made at any time, provided that the final repayment
be made on or prior to April 1, 1998. Borrower must receive Lender's
request for repayment by 9:00 a.m. Eastern Standard Time on any
Business Day if repayment is to be made that day.
1.3 Cancellation/Reduction
From time to time and upon 30 days written notice, except as provided
under 2, Events of Default, the Borrower or Lender may at any time
-----------------
permanently reduce the Commitment and the unpaid principal and all
interest shall be due and payable immediately.
1.4 Evidence of Debt
The Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower
resulting from the Loan and the amounts of principal and interest
payable and paid from time to time hereunder. In any legal action or
proceeding in respect of the Agreement, the entries made in such
account or accounts shall, unless in case of obvious or manifest
error, be conclusive evidence of the existence and amounts of the
obligations of the Borrower therein recorded.
-126-
1.5 Interest
The Loan shall bear interest from day to day at Lender's cost of
borrowing, as advised from time to time by Lender, plus 1/8% per annum
payable every three months from the date hereof to maturity on the
outstanding balance.
2. Events of Default
-----------------
In the event that:
(A) The Borrower fails to pay any sum payable hereunder when due; or
(B) The Borrower defaults in the due performance and observance of any
other term of this Agreement and such default is not remedied within
15 days after notice of such default; or
(C) The Borrower goes bankrupt or becomes insolvent or is subject to a
receivership either voluntary or compulsory; or
(D) Any order is made or law, decree, regulation or resolution passed for
the liquidation, winding up or dissolution of the Borrower; or
(E) All or any substantial part of the business or assets of the Borrower
is expropriated, nationalized, compulsorily acquired or taken into
public ownership or the Borrower ceases to be able or entitled to
exercise the rights of control or ownership of the same; or
(F) The Borrower ceases to be directly or indirectly controlled by Lender,
then and in any such event, and at any time thereafter if any such event
shall then be continuing, the Lender may, by written notice to the Borrower
declare the Loan immediately due and payable together with all interest
accrued thereon and all other amounts payable hereunder, including all
interest accrued on any past due principal, to the extent permitted by law.
3. Representations and Warranties of Borrower. The Borrower represents and
------------------------------------------
warrants as follows:
(A) The Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the State of California;
(B) The execution, delivery and performance by the Borrower of this
Agreement are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene
(i) the Borrower's Articles of Incorporation or By-laws or (ii) any
law or any judgment or contractual restriction binding on or affecting
the Borrower;
(C) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body which has
not already been obtained or made is required for the due execution,
delivery and performance by the Borrower of this Agreement; and
(D) This Agreement is the legal, valid and binding obligation of the
Borrower enforceable against Borrower in accordance with its terms.
4. Covenants of the Borrower; Reporting Requirements. So long as the Loan
-------------------------------------------------
shall remain unpaid, the Borrower will, unless the Lender shall otherwise
consent in writing, furnish to the Lender:
-127-
(A) As soon as practicable, in any event within five Business Days after
the occurrence of each Event of Default, or each event which with
notice or lapse of time or both would become an Event of Default,
which is continuing on the date of such statement, a statement of an
authorized representative of the Borrower setting forth details of
such Event of Default or event and the action which the Borrower
proposes to take with respect thereto; and
(B) Such other information respecting the business, properties or the
condition or operations, financial or otherwise, of the Borrower as
the Lender may from time to time reasonably request.
5. Costs and Expenses
------------------
The Borrower agrees to pay on demand all losses and all costs and expenses,
if any, in connection with the enforcement of this Agreement and any
instruments or other documents delivered hereunder, including, without
limitation, losses, costs and expenses sustained as a result of a default
by the Borrower in the performance of its obligations contained in this
Agreement or any instrument or document delivered hereunder.
6. Alternative Dispute Resolution
------------------------------
The parties shall negotiate in good faith to resolve any dispute arising
out of or relating to this Agreement. In the event that the parties fail
to resolve a dispute by good faith negotiations, or if either party deems a
resolution by such means to be improbable, either party may initiate
mediation of the dispute upon written notice to the other party. Such
mediation shall be conducted promptly in accordance with the Center for
Public Resources Model Procedure for Mediation of Business Disputes. If,
within 60 days after notice of mediation, the parties have failed to
resolve the dispute by mediation, either party may propose binding
arbitration or initiate litigation. If either party requests mediation, it
shall occur in Indianapolis, Indiana.
7. Change of Control. After any change of Control (as defined below) of the
-----------------
Borrower, the Lender may, at its option, upon notice to the Borrower
declare all principal, interest, and other amounts payable under this
Agreement to be immediately due and payable, whereupon the same shall
become immediately due and payable.
8. Definitions. Capitalized terms as to which such capitalization would not
-----------
be required in accordance with standard rules of grammar shall have the
meanings specified below.
"Affiliate" means, with respect to each party hereto, a party that
directly, or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, the party specified. The
term "control" is defined below. For purposes of this Agreement, Borrower
is not an Affiliate of Lender.
"Business Day" means any day other than a Saturday, Sunday or other day on
which banking institutions in Indianapolis, Indiana are required or
authorized by law to suspend operations.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of any
individual, corporation, partnership, unincorporated association or other
entity, whether through the ownership of voting stock, by contract or
otherwise. A person who is the owner of 20% or more of a corporation's
outstanding voting stock shall be deemed to have Control of such
corporation.
-128-
9. Miscellaneous
-------------
The Borrower agrees to take all such steps and actions and to execute and
to deliver and/or cause to be delivered all such further documents and
instruments as may be necessary in the opinion of the Lender to establish,
maintain and protect the rights of the Lender hereunder and generally to
carry out the true intent of this Agreement.
10. Assignment
----------
This Agreement may not be assigned in whole or in part by Borrower without
the express written consent of the other party. This Agreement may be
assigned by Lender to any Affiliate.
11. Successors
----------
This Agreement and any instrument or document executed in accordance
herewith shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assignees.
-129-
12. Governing Law
-------------
This Agreement and any instruments or other documents executed in
accordance herewith shall be governed by and construed in accordance with
the laws of the State of Indiana.
13. Amendments, Etc.
---------------
No amendment or waiver of any provision of this Agreement or any instrument
delivered hereunder, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in
writing and signed by an authorized representative of the Lender.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the date first written above.
LENDER: BORROWER:
DowElanco Mycogen Corporation
By: /s/ SEAN S. SKINNER By: /s/ JAMES A. BAUMKER
------------------- --------------------
Printed: Sean S. Skinner Printed: James A. Baumker
--------------- ----------------
Title: Treasurer Title: Vice President/CFO
--------- ------------------
Date: May 20, 1997 Date: June 10, 1997
------------ -------------
-130-