CONSENT AGREEMENT
This Consent Agreement dated March 5, 1997 is entered into between Crop
Growers Corporation, a Delaware corporation (the "COMPANY"), and Fireman's Fund
Insurance Company, a California corporation (the "INVESTOR").
The Company and the Investor are parties to a Stock Purchase Agreement (the
"STOCK PURCHASE AGREEMENT") dated July 10, 1996. The Company, the Investor and
Xxxx X. Xxxxxxxxxx ("XXXXXXXXXX") are parties to a Right of First Offer and
First Refusal Agreement dated September 23, 1996 (the "XXXXXXXXXX AGREEMENT").
The Company, the Investor and Xxxx X. Black ("BLACK") are parties to a Right of
First Offer and First Refusal Agreement dated September 23, 1996 (the "BLACK
AGREEMENT").
Pursuant to the Xxxxxxxxxx Agreement and, in the view of the Investor,
pursuant to the Black Agreement, the Investor has been given the right of first
refusal with respect to a pending sale by Xxxxxxxxxx of 1,145,703 shares of
Company common stock and by Black of 681,774 shares of Company common stock.
Such 1,145,703 shares and 681,774 shares of Company common stock are herein
collectively called the "SHARES."
The Company has determined that it is in the best interests of it and its
stockholders to give its consent to the Investor's exercise of its right of
first refusal as to the Shares on the terms and conditions stated in this
Agreement.
NOW, THEREFORE, the parties hereby agree as follows
1. CONSENT. (a) The Company hereby consents, to the extent necessary, to
the Investor's purchases (the "PURCHASES") of up to (i) 1,145,703 shares of
Company common stock from Xxxxxxxxxx and (ii) 681,774 shares of Company common
stock from Black. Without limiting the generality of the foregoing consent, it
shall be deemed given under (i) Section 5.2 of the Stock Purchase Agreement,
(ii) Section 4.3 of the Separation Agreement dated September 23, 1996 between
the Company and Xxxxxxxxxx and (iii) Section 203 of the Delaware General
Corporation Law.
(b) The Company hereby represents and warrants that its Board of Directors
has approved the Purchases.
2. VOTING; TENDER.
(a) With respect to any vote or consent of stockholders of the Company
with respect to (or tender offer approved by the Board of Directors ("APPROVED
TENDER"), the consummation of which would constitute) any Acquisition
Transaction taken on or
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before December 31, 1997, the Investor agrees to vote (or give a consent with
respect to or tender in an Approved Tender, as the case may be), and to cause
its Affiliates to vote (or give a consent with respect to or tender in an
Approved Tender, as the case may be), the Excess Shares in the manner stated in
Section 2(c).
(b) "ACQUISITION TRANSACTION" means any (i) merger, consolidation or
similar transaction involving the Company, (ii) sale, lease or other disposition
directly or indirectly by merger, consolidation, share exchange or otherwise of
any assets of the Company or its subsidiaries representing 15% or more of the
consolidated assets of the Company and its subsidiaries, (iii) issue, sale or
other disposition of (including without limitation, by way of merger,
consolidation, share exchange or any similar transaction) securities (or
options, rights or warrants to purchase, or securities convertible into, such
securities) representing 15% or more of the votes attached to the outstanding
securities of the Company, (iv) transaction in which any Person shall acquire
Beneficial Ownership or the right to acquire Beneficial Ownership, or any Group
shall have been formed which has Beneficial Ownership or has the right to
acquire Beneficial Ownership, of 15% or more of the outstanding shares of common
stock of the Company, (v) recapitalization, restructuring, liquidation,
dissolution, or other similar type of transaction with respect to the Company or
any of its subsidiaries, or (vi) transaction which is similar in form, substance
or purpose to any of the foregoing transactions. "EXCESS SHARES" means the
number of shares of Company common stock, if any, owned or controlled by the
Investor or any of its Affiliates whose voting power, together with the voting
power of all Voting Stock owned or controlled by the Investor or any of its
Affiliates, exceeds the greater of (i) 1,742,593 votes (as the shares of the
Company's Voting Stock is constituted on the date hereof, as adjusted for any
stock split, stock dividend, combination, reverse stock split or
recapitalization effected after the date of this Agreement) and (ii) 20% of the
voting power of all Voting Stock outstanding at the time of such vote or
consent. "BENEFICIAL OWNERSHIP," "AFFILIATE" and "GROUP" have the meanings
stated in Regulation 13D-G under the Securities Exchange Act of 1934, as
amended. "VOTING STOCK" means any stock or other security that has the right,
irrespective of contingent events or conditions, to vote on or consent to a
particular Acquisition Transaction. A "PERSON" means any individual,
corporation, partnership, limited liability company, trust, unincorporated
association or entity of any kind.
(c) For the period specified in Section 2(a), the Investor will vote (or
give consents with respect to or tender in an Approved Tender, as the case may
be) and cause its Affiliates to vote (or give consents with respect to or tender
in an Approved Tender, as the case may be), or abstain or refrain from voting
(or giving consents with respect to or tendering in an Approved Tender, as the
case may be) and cause its Affiliates to abstain or refrain from voting (or
giving consents with respect to or tendering in an Approved Tender, as the case
may be), the Excess Shares with respect to any Acquisition Transaction in the
same proportions as the shares held by all Non-Interested Stockholders. "NON-
INTERESTED STOCKHOLDERS" means the stockholders of the Company, other than the
Investor and "interested stockholders" of the Company, as such term is defined
in Section 203 of the Delaware General Corporation Law (an "INTERESTED
STOCKHOLDER") .
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(d) The restrictions of this Section 2 shall (i) not apply to any
Acquisition Transaction with, or proposed by, any Person or Group that, after
the date hereof, becomes an Interested Stockholder of the Company without the
prior or concurrent approval of the Board of Directors of the Company and (ii)
terminate (to the extent not already expired under Section 2(a)) at the time, if
any, when any Person or Group publicly announces an intention to make or makes
or commences a tender or exchange offer, other than a tender or exchange offer
which has been approved by the Board of Directors of the Company on or before
the earliest to occur of such announcement, making or commencement, for more
than 15% of the outstanding common stock of the Company.
(e) It is expressly understood that nothing in this Section 2, nor any
other understanding between the Company and the Investor, shall restrict the
Investor in voting, giving consent with respect to or tendering in an Approved
Tender, as the case may be (or not voting, giving consent with respect to or
tendering in an Approved Tender, as the case may be) any stock it holds in the
Company from time to time other than the Excess Shares.
3. AMENDMENT OF STANDSTILL. Section 5.2 of the Stock Purchase Agreement
is hereby amended by adding at the end thereof the following:
Notwithstanding anything to the contrary in this Section 5.2, the
restrictions of this Section 5.2 will immediately terminate (to the extent
not terminated theretofore pursuant to the terms of this Section 5.2) at
the time, if any, when any person or group (as such term is defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended) publicly
announces an intention to make or makes or commences a tender or exchange
offer, other than a tender or exchange offer which has been approved by the
Board of Directors of the Company on or before the earliest to occur of
such announcement, making or commencement, for more than 15% of the
outstanding common stock of the Company.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Investor that:
(a) ORGANIZATION AND QUALIFICATIONS. The Company and each subsidiary of
the Company is a corporation duly incorporated or organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
organization and has the requisite corporate power and authority, and all
governmental permits, approvals and other authorizations necessary to own, lease
and operate its properties and to carry on its business as it is now being
conducted, except for such exceptions as would not, individually or in the
aggregate, have a material adverse effect on the assets, properties,
liabilities, obligations, financial condition, results of operations or business
(a "MATERIAL ADVERSE EFFECT") on the Company and its subsidiaries taken as a
whole (a "COMPANY MATERIAL ADVERSE EFFECT").
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(b) AUTHORITY RELATIVE TO THIS CONSENT AGREEMENT. The Company has all
necessary corporate power and authority to execute and deliver this Consent
Agreement and to perform its obligations hereunder. The execution and delivery
of this Consent Agreement by the Company have been duly and validly authorized
by all necessary corporate action and no other corporate proceedings on the part
of the Company is necessary to authorize this Consent Agreement. This Consent
Agreement has been duly and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery thereof by the Investor,
constitutes the legal, valid and binding obligation of the Company, enforceable
against it in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights generally and by equitable principles.
(c) NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(i) The execution and delivery of this Consent Agreement by the
Company does not, and the performance of its obligations hereunder by it
will not, (A) conflict with or violate the certificate of incorporation or
bylaws of the Company or any of its subsidiaries, (B) subject to the making
of the filings and obtaining the approvals identified herein, conflict with
or violate any law, rule, regulation, order, judgment or decree
(collectively, "LAWS") applicable to the Company or any of its subsidiaries
or by which any property or asset of the Company or any of its subsidiaries
is bound or affected, or (C) conflict with, result in any breach of,
constitute a default (or an event which with notice or lapse of time or
both would become a default) under, result in the loss or modification in a
manner materially adverse to the Company or its subsidiaries of any
material right or benefit under, give to others any right of termination,
amendment, acceleration, repurchase or repayment, increased payments or
cancellation of, or result in the creation of a lien or other encumbrance
on any property or asset of the Company or any subsidiary pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation, whether written or
oral (collectively, a "CONTRACT"), to which the Company or any subsidiary
is a party or by which the Company or any subsidiary or any property or
asset of the Company or any subsidiary is bound or affected.
(ii) The execution and delivery of this Consent Agreement by the
Company does not, and the performance of its obligations hereunder by it
will not, require any consent, approval, authorization or permit of, or
filing with or notification to, any federal, state or local governmental or
regulatory agency, authority or instrumentality, whether domestic or
foreign ("GOVERNMENTAL ENTITY") except for applicable requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act (the "HSR ACT").
5. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.
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(a) ORGANIZATION AND QUALIFICATIONS. The Investor is a corporation duly
incorporated or organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite corporate power
and authority and all governmental permits, approvals and other authorizations
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted, except for such exceptions as would not,
individually or in the aggregate, have a Material Adverse Effect on the Investor
and its subsidiaries, taken as a whole (an "INVESTOR MATERIAL ADVERSE EFFECT").
(b) AUTHORITY RELATIVE TO THIS CONSENT AGREEMENT. The Investor has all
necessary corporate power and authority to execute and deliver this Consent
Agreement and to perform its obligations hereunder. The execution and delivery
of this Consent Agreement by the Investor have been duly and validly authorized
by all necessary corporate action and no other corporate proceedings on the part
of the Investor is necessary to authorize this Consent Agreement. This Consent
Agreement has been duly and validly executed and delivered by the Investor and,
assuming the due authorization, execution and delivery thereof by the Company,
constitutes the legal, valid and binding obligation of the Investor, enforceable
against it in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights generally and by equitable principles.
(c) NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(i) The execution and delivery of this Consent Agreement by the
Investor does not, and the performance of its obligations hereunder by it
will not, (A) conflict with or violate the certificate of incorporation or
bylaws of the Investor, (B) subject to the making of the filings and
obtaining the approvals identified herein, conflict with or violate any
Laws applicable to the Investor or by which any property or asset of the
Investor is bound or affected, or (C) conflict with, result in any breach
of, constitute a default (or an event which with notice or lapse of time or
both would become a default) under, result in the loss or modification in a
manner materially adverse to the Investor of any material right or benefit
under, or give to others any right of termination, amendment, acceleration,
repurchase or repayment, increased payments or cancellation of, or result
in the creation of a lien or other encumbrance on any property or asset of
the Investor pursuant to, any Contract to which the Investor is a party or
by which the Investor or any property or asset of the Investor is bound or
affected.
(ii) The execution and delivery of this Consent Agreement by the
Investor does not, and the performance of its obligations hereunder by it
will not, require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Entity, except for
applicable requirements of (1) the insurance company holding laws of
certain states and (2) the HSR Act.
6. MISCELLANEOUS.
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(a) AMENDMENTS AND WAIVERS. This Consent Agreement may not be modified or
amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought. Any
party hereto may, in its sole election, solely as to itself and not as to any
other party hereto, only by an instrument in writing, waive compliance by
another party hereto with any term or provision hereof on the part of such other
party hereto to be performed or complied with. The waiver by any party hereto
of a breach of any term or provision hereof shall not be construed as a waiver
of any subsequent breach.
(b) ENTIRE AGREEMENT. This Consent Agreement, the Stock Purchase
Agreement dated July 10, 1996, the Acquisition Agreement of even date herewith
and the Letter of Intent re Revolving Credit Working Capital Facility of even
date herewith, each between the Investor and the Company, contain the entire
agreement between the parties hereto with respect to the transactions
contemplated hereby and thereby. This Consent Agreement is not intended to
confer upon any other person any rights or remedies hereunder.
(c) APPLICABLE LAW. This Consent Agreement shall be exclusively governed
by and construed in accordance with the internal laws of the State of Delaware
without regard to its rules of conflicts of laws.
(d) EXPENSES. All expenses incurred by each party will be borne by the
party incurring such expenses.
(e) DESCRIPTIVE HEADINGS. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Consent Agreement.
(f) COUNTERPARTS. This Consent Agreement and any amendments hereto may be
executed in any number of counterparts, each of which shall be deemed to be an
original but all of which together shall constitute but one agreement.
(g) SUCCESSORS AND ASSIGNS. This Consent Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors.
This Consent Agreement may not be assigned by any party without prior consent of
all parties hereto.
(h) BINDING EFFECT. This Consent Agreement shall, subject to the terms
and conditions hereof, be in all respects binding upon each of the Company and
the Investor from and after the date hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Consent
Agreement.
CROP GROWERS CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
FIREMAN'S FUND INSURANCE
COMPANY
By: /s/ Xxxxxx X. Xxxxx III
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Name: Xxxxxx X. Xxxxx III
Title: Senior Vice President & Treasurer
