EXHIBIT 2.2
EXECUTION COPY
STOCK PURCHASE AGREEMENT
BY AND AMONG
MONSANTO COMPANY,
EMERGENT GENETICS INDIA LTD.
AND
INTERNATIONAL SEED HOLDINGS, L.P.
Dated as of February 15, 2005
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS ...........................................................................................1
1.1 Certain Definitions............................................................................1
ARTICLE 2 SALE AND PURCHASE OF SHARES............................................................................8
2.1 Sale and Purchase of Shares....................................................................8
2.2 Closing........................................................................................8
ARTICLE 3 CONSIDERATION..........................................................................................8
3.1 Consideration..................................................................................8
3.2 Payment of Purchase Price......................................................................8
3.3 Purchase Price Adjustment......................................................................8
ARTICLE 4 TERMINATION...........................................................................................10
4.1 Termination of Agreement......................................................................10
4.2 Procedure Upon Termination....................................................................11
4.3 Effect of Termination.........................................................................11
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................................11
5.1 Organization and Good Standing................................................................11
5.2 Authorization of Agreement....................................................................12
5.3 Conflicts; Consents of Third Parties..........................................................12
5.4 Capitalization................................................................................12
5.5 Subsidiaries..................................................................................13
5.6 Financial Statements..........................................................................13
5.7 No Undisclosed Liabilities....................................................................14
5.8 Absence of Certain Developments...............................................................14
5.9 Taxes.........................................................................................15
5.10 Real Property.................................................................................17
5.11 Tangible Personal Property....................................................................17
5.12 Intellectual Property.........................................................................18
5.13 Germplasm.....................................................................................18
5.14 Genetically Modified Organisms................................................................18
5.15 Material Contracts............................................................................19
5.16 Employee Benefits Plans.......................................................................20
5.17 Labor.........................................................................................21
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TABLE OF CONTENTS
(continued)
Page
5.18 Litigation....................................................................................21
5.19 Compliance with Laws; Permits.................................................................21
5.20 Environmental Matters.........................................................................22
5.21 Accounts Receivable...........................................................................22
5.22 Inventories...................................................................................22
5.23 Transactions with Related Persons; Affiliates.................................................22
5.24 Employees, Officers and Directors.............................................................22
5.25 Insurance.....................................................................................23
5.26 Books and Records and Financial Controls......................................................23
5.27 Sufficiency of Property.......................................................................24
5.28 Indebtedness and Liabilities..................................................................24
5.29 Cash and Cash Equivalents.....................................................................24
5.30 Financial Advisors............................................................................24
5.31 No Other Representations or Warranties; Schedules.............................................24
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE SELLER..........................................................24
6.1 Organization and Good Standing................................................................24
6.2 Authorization of Agreement....................................................................25
6.3 Conflicts; Consents of Third Parties..........................................................25
6.4 Ownership and Transfer of Shares..............................................................25
6.5 Litigation....................................................................................25
6.6 Financial Advisors............................................................................26
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF PURCHASER...........................................................26
7.1 Organization and Good Standing................................................................26
7.2 Authorization of Agreement....................................................................26
7.3 Conflicts; Consents of Third Parties..........................................................26
7.4 Investment Representations....................................................................27
7.5 Litigation....................................................................................27
7.6 Financial Advisors............................................................................27
7.7 Financing.....................................................................................27
7.8 Condition of the Business.....................................................................27
ARTICLE 8 COVENANTS ............................................................................................28
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TABLE OF CONTENTS
(continued)
Page
8.1 Access to Information.........................................................................28
8.2 Conduct of the Business Pending the Closing...................................................28
8.3 Consents......................................................................................30
8.4 Regulatory Approvals..........................................................................30
8.5 Further Assurances............................................................................32
8.6 Confidentiality...............................................................................32
8.7 Indemnification, Exculpation and Insurance....................................................32
8.8 Preservation of Records.......................................................................34
8.9 Publicity.....................................................................................34
8.10 Use of Name...................................................................................35
8.11 Employment and Employee Benefits..............................................................35
8.12 Supplementation and Amendment of Schedules....................................................35
8.13 Transition Services...........................................................................35
8.14 Tax Election..................................................................................36
ARTICLE 9 CONDITIONS TO CLOSING.................................................................................36
9.1 Conditions Precedent to Obligations of Purchaser..............................................36
9.2 Conditions Precedent to Obligations of the Seller.............................................37
9.3 Frustration of Closing Conditions.............................................................37
ARTICLE 10 MISCELLANEOUS........................................................................................38
10.1 Limitations of Representations, Warranties and Covenants......................................38
10.2 Exclusive Remedies............................................................................38
10.3 No Consequential Damages......................................................................38
10.4 Expenses......................................................................................38
10.5 Entire Agreement; Amendments and Waivers......................................................38
10.6 Governing Law.................................................................................39
10.7 Notices.......................................................................................39
10.8 Severability..................................................................................40
10.9 Binding Effect; Assignment....................................................................40
10.10 Non-Recourse..................................................................................40
10.11 Counterparts..................................................................................41
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Schedules
---------
Schedule 1.1(a) Company Debt
Schedule 1.1(a) Knowledge of the Company
Schedule 3.3(a) Net Working Capital
Schedule 5.3(a) No Conflicts
Schedule 5.3(b) Consents
Schedule 5.4(b) Stockholder Agreements
Schedule 5.5(a) Subsidiaries
Schedule 5.5(b) Subsidiary Liens
Schedule 5.8(a) Absence of Certain Changes
Schedule 5.9 Taxes
Schedule 5.10 Real Property
Schedule 5.11 Tangible Personal Property
Schedule 5.12 Intellectual Property
Schedule 5.13 Germplasm Listing
Schedule 5.14(b) Genetically Modified Organisms Compliance
Schedule 5.15(a) Material Contracts
Schedule 5.16(a) Employee Benefit Plans
Schedule 5.17(a) Labor and Collective Bargaining Agreements
Schedule 5.17(b) Labor
Schedule 5.18 Litigation
Schedule 5.20 Environmental Matters
Schedule 5.23 Affiliate Obligations
Schedule 5.24(a) Employees
Schedule 5.25 Insurance
Schedule 6.3(b) Consents
Schedule 7.3(a) No Conflicts
Schedule 8.2(a) Ordinary Course Exceptions
Schedule 8.2(b) Conduct of Business
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of February 15, 2005 (the "Agreement"),
by and among Monsanto Company, a corporation existing under the laws of Delaware
("Purchaser"), Emergent Genetics India Ltd., a Mauritius limited company (the
"Company"), and International Seed Holdings, L.P., a Cayman exempt limited
partnership (the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller owns, or at the Closing (as defined herein) will own,
(i) all of the outstanding shares of the Company's preferred stock, $1.00 par
value per share (the "Preferred Stock"), (ii) all of the outstanding shares of
the Company's common stock, $1.00 par value per share (the "Common Stock"),
(iii) 15,000 equity shares of Rs. 10/- face value per share, of Emergent
Genetics India Private Limited, an Indian private company, and (iv) 100 equity
shares of Rs. 10/- face value per share, of EG Technologies & Services Private
Limited, an Indian private company (collectively, the "Shares"); and
WHEREAS, the Seller desires to sell to Purchaser, and Purchaser desires to
purchase from the Seller, the Shares for the purchase price and upon the terms
and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties hereto agree
as follows:
ARTICLE 1
DEFINITIONS
1.1 Certain Definitions.
(a) For purposes of this Agreement, the following terms shall have the
meanings specified in this Section 1.1:
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person, and the term
"control" (including the terms "controlled by" and "under common control with")
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
ownership of voting securities, by contract or otherwise.
"Applicable Exchange Rate" means, in respect of any currency other than
Dollars on any date, the "daily 10 am spot rate" of exchange between Dollars and
the relevant currency, as published for such date on the website of the Federal
Reserve Bank of New York (xxx.xx.xxx.xxx).
"Business Day" means any day of the year on which national banking
institutions in New York, New York, Denver, Colorado and Mumbai, India are open
to the public for conducting business and are not required or authorized to
close.
"Company Debt" means the Indebtedness set forth on Schedule 1.1(a).
"Competition Laws" means any applicable Law enforced by a Governmental
Antitrust Entity regarding preacquisition notifications for purposes of
competition reviews, and any other national, federal, regional, state or local
statutes, rules, regulations, orders, decrees, administrative or judicial
doctrines or other Laws that are designed to prohibit, restrict or regulate
actions having the purpose or effect of monopolization, lessening of competition
or restraint of trade.
"Contract" means any contract, indenture, note, bond, lease, commitment or
other legally binding agreement.
"Current Assets" means the current assets of the Company and the combined
current assets of the Subsidiaries (excluding cash and cash equivalents and
indebtedness for borrowed money, plus accrued interest thereon, receivable from
Affiliates of the Company and its Subsidiaries) plus non-current deferred income
Taxes.
"Current Liabilities" means the current liabilities of the Company and the
combined current liabilities of the Subsidiaries (excluding indebtedness for
borrowed money, plus accrued interest thereon, the current portion of
capitalized lease obligations and indebtedness for borrowed money, plus accrued
interest thereon, payable to Affiliates of the Company and its Subsidiaries)
plus non-current deferred income Taxes.
"Environmental Law" means any applicable Law relating to the protection of
the environment or natural resources.
"FCPA" means the U.S. Foreign Corrupt Practices Act of 1977, as amended.
"Germplasm" means hybrids, lines and varieties that (i) are in commercial
use by the Company or any of its Subsidiaries or (ii) are in the pipeline for
development by the Company or any of its Subsidiaries for commercial use as of
the date of this Agreement, together with the breeding populations and sources
used to provide such hybrids, lines and varieties.
"Governmental Antitrust Entity" means any Governmental Body with regulatory
jurisdiction over enforcement of any applicable Competition Law.
"Governmental Body" means any government or governmental or regulatory body
thereof, or political subdivision thereof, whether national, federal, regional,
state, or local, or any agency, instrumentality or authority thereof, or any
court or arbitrator.
"Indebtedness" of any Person means, without duplication, (i) the principal
of and accrued interest or premium (if any) in respect of (A) indebtedness of
such Person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
Person is responsible or liable; (ii) all obligations of such Person issued or
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assumed as the deferred purchase price of property, all conditional sale
obligations of such Person and all obligations of such Person under any title
retention agreement (but excluding trade accounts payable and other accrued
current liabilities arising in the Ordinary Course of Business); (iii) all
obligations of such Person under leases required to be capitalized in accordance
with Indian GAAP or International Accounting Standards, as applicable; (iv) all
obligations of such Person for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction; (v) all obligations
of the type referred to in clauses (i) through (iv) of other Persons for the
payment of which such Person is responsible or liable, directly or indirectly,
as obligor, guarantor, surety or otherwise, including guarantees of such
obligations; and (vi) all obligations of the type referred to in clauses (i)
through (v) of other Persons secured by any Lien on any property or asset of
such Person (whether or not such obligation is assumed by such Person).
"Indian GAAP" means generally accepted accounting principles in India,
consistently applied.
"Intellectual Property" means all (i) patents and applications therefor,
including continuations, divisionals, continuations-in-part, or reissues of
patent applications and patents issuing thereon (collectively, "Patents"), (ii)
trademarks, service marks, trade names, service names, brand names, trade dress
rights, logos, Internet domain names and corporate names, together with the
goodwill associated with any of the foregoing, and all applications,
registrations and renewals thereof (collectively, "Marks"), (iii) copyrights and
registrations and applications therefor, works of authorship and mask work
rights (collectively, "Copyrights"), (iv) all Software, (v) Technology and (vi)
certificates of plant variety protection, plant breeders rights or variety
registrations or the like, applications therefor, and certifications issuing
therefrom in any country.
"International Accounting Standards" means international accounting
standards, consistently applied.
"Knowledge of the Company" means the actual knowledge of those Persons
identified on Schedule 1.1(b).
"Law" means any national, federal, regional, state or local law, statute,
code, ordinance, rule or regulation.
"Legal Proceeding" means any judicial, administrative or arbitral actions,
suits or proceedings (public or private) by or before a Governmental Body.
"Liability" means any debt, liability or obligation (whether direct or
indirect, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, or due or to become due) and including all costs and expenses
relating thereto.
"Lien" means any lien, encumbrance, pledge, mortgage, deed of trust,
security interest, claim, lease, charge, option, right of first refusal,
easement, servitude or transfer restriction.
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"Material Adverse Effect" means (i) a material adverse effect on the
business, assets, properties, results of operations or financial condition of
the Company and its Subsidiaries (taken as a whole) or (ii) a material adverse
effect on the ability of the Seller or the Company to consummate the
transactions contemplated by this Agreement, in each case, other than an effect
resulting from an Excluded Matter. "Excluded Matter" means any one or more of
the following: (i)the effect of any change in economies or securities or
financial markets in general in the United States, India or elsewhere; (ii) the
effect of any change that generally affects any industry in which the Company or
any of its Subsidiaries operates (provided that such matter does not have a
disproportionate adverse effect on the Company or its Subsidiaries); (iii) the
effect of any change arising in connection with natural disasters or acts of
nature, hostilities, acts of war, sabotage or terrorism or military actions or
any escalation or material worsening of any such hostilities, acts of war,
sabotage or terrorism or military actions existing or underway as of the date
hereof; (iv) the effect of any action taken by Purchaser or its Affiliates with
respect to the transactions contemplated hereby or with respect to the Company
or its Subsidiaries; (v) any matter of which Purchaser is aware on the date
hereof, provided that Purchaser is or should be aware of the likely impact of
such matter on the Company and its Subsidiaries; (vi) the effect of any changes
in applicable Laws or accounting rules; (vii) the mere failure of the Company
and its Subsidiaries to meet any of its internal projections; or (viii) any
effect resulting from the public announcement of this Agreement, compliance with
terms of this Agreement or the consummation of the transactions contemplated by
this Agreement.
"Order" means any order, injunction, judgment, decree, ruling, writ,
assessment or arbitration award of a Governmental Body of competent
jurisdiction.
"Ordinary Course of Business" means the ordinary and usual course of
business of the Company and its Subsidiaries.
"Purchaser Board Approval" means the approval and adoption by the Board of
Directors of Purchaser of this Agreement and of the consummation of the
transactions contemplated hereby.
"Permits" means any approvals, authorizations, consents, licenses, permits
or certificates of a Governmental Body.
"Permitted Exceptions" means (i) statutory liens for current Taxes,
assessments or other governmental charges not yet delinquent or the amount or
validity of which is being contested in good faith by appropriate proceedings,
provided an appropriate reserve is established therefor; (ii) mechanics',
carriers', workers', repairers' and similar Liens arising or incurred in the
Ordinary Course of Business; (iii) zoning, entitlement and other land use and
environmental regulations by any Governmental Body; (iv) liens securing debt as
disclosed in the Financial Statements; (v) title of a lessor under a capital or
operating lease; and (vi) such other imperfections in title, charges, easements,
rights of way, restrictions, defects, exceptions and encumbrances which do not
materially and adversely impact the value or utility of the affected property.
"Person" means any individual, corporation, partnership, firm, joint
venture, association, joint-stock company, trust, unincorporated organization,
Governmental Body or other entity.
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"Release" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal or leaching into the environment, or
into or out of any property.
"Software" means, except for "off-the-shelf" or "shrinkwrap" software, any
and all (i) computer programs, including any and all software implementations of
algorithms, models and methodologies, whether in source code or object code,
(ii) databases and compilations, including any and all data and collections of
data, whether machine readable or otherwise, (iii) descriptions, flow-charts and
other work product used to design, plan, organize and develop any of the
foregoing, screens, user interfaces, report formats, firmware, development
tools, templates, menus, buttons and icons, and (iv) all documentation including
user manuals and other training documentation related to any of the foregoing.
"Subsidiary" means any Person of which a majority of the outstanding voting
securities or other voting equity interests are owned, directly or indirectly,
by the Company.
"Target Net Working Capital" means $12,700,000.
"Taxes" means (i) all national, federal, regional, state or local taxes,
charges, fees, imposts, levies or other assessments in any jurisdiction,
including all net income, gross receipts, capital, sales, use, ad valorem, value
added, transfer, franchise, profits, inventory, capital stock, license,
withholding, payroll, employment, social security, unemployment, excise,
severance, stamp, occupation, property and estimated taxes, customs duties,
fees, assessments and charges of any kind whatsoever, (ii) all interest,
penalties, fines, additions to tax or additional amounts imposed by any taxing
authority in connection with any item described in clause (i) and (iii) any
transferee liability in respect of any items described in clauses (i) and/or
(ii).
"Tax Return" means all returns, declarations, reports, estimates,
information returns and statements required to be filed in respect of any Taxes.
"Technology" means, collectively, all designs, formulae, algorithms,
procedures, methods, techniques, ideas, know-how, research and development,
technical data, programs, subroutines, tools, materials, specifications,
processes, inventions (whether patentable or unpatentable and whether or not
reduced to practice), apparatus, creations, improvements, works of authorship
and other similar materials, and all recordings, graphs, drawings, reports,
analyses, and other writings, and other tangible embodiments of the foregoing,
in any form whether or not specifically listed herein, and all related
technology.
(b) Terms Defined Elsewhere in this Agreement. For purposes of this
Agreement, the following terms have meanings set forth in the sections
indicated:
Term Section
---- -------
Accounting Referee 3.3(c)
Agreement Recitals
Antitrust Laws 8.4(b)
Balance Sheets 5.6(b)
Balance Sheet Dates 5.6(b)
Claim 8.7(c)
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Closing 2.2
Closing Date 2.2
Closing Statement 3.3(a)
Closing Working Capital 3.3(a)
Common Stock Recitals
Company Recitals
Company Balance Sheet 5.6(a)
Company Benefit Plans 5.16(a)
Company Documents 5.2
Company Financial Statements 5.6(a)
Company Property 5.10
Company Properties 5.10
Confidentiality Agreement 8.6
Continuing Employees 8.11(a)
Copyrights 1.1 (in Intellectual Property definition)
Deal Expenses 10.4
EG Common Stock Recitals
EGI 8.13
Excluded Matter 1.1 (in definition of Material Adverse Effect)
Existing Policy 8.7(f)
Final Working Capital 3.3(e)
Financial Statements 5.6(b)
Indemnitees 8.7(a)
India Transition Services Agreement 8.13
Marks 1.1 (in Intellectual Property definition)
Material Contracts 5.15(a)
Net Working Capital 3.3(a)
Outside Date 4.1(a)
Owned Property 5.10
Owned Properties 5.10
Patents 1.1 (in Intellectual Property definition)
Payoff Certificates 9.1(g)
Personal Property Leases 5.11
Preferred Stock Recitals
Purchase Price 3.1
Purchaser Recitals
Purchaser Documents 7.2
Purchaser Plans 8.11(b)
Real Property Lease 5.10
Real Property Leases 5.10
Securities Act 7.4
Seller Recitals
Seller Documents 6.2
Seller Indemnified Parties 10.4(a)
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Standstill Period 8.9(a)
Standstill Period 8.9(c)
Subject Marks 8.10
Subsidiary Balance Sheets 5.6(b)
Subsidiary Financial Statements 5.6(b)
Shares Recitals
(c) Other Definitional and Interpretive Matters. Unless otherwise expressly
provided herein, for purposes of this Agreement, the following rules of
interpretation shall apply:
Calculation of Time Period. When calculating the period of time before
which, within which or following which any act is to be done or step taken
pursuant to this Agreement, the date that is the reference date in calculating
such period shall be excluded. If the last day of such period is a non-Business
Day, the period in question shall end on the next succeeding Business Day.
Currency. Any reference in this Agreement to Dollars or $ shall mean U.S.
dollars. Any reference in this Agreement to Rupees or Rs. shall mean Indian
Rupees.
Exhibits/Schedules. The Exhibits and Schedules to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
All Exhibits and Schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Any capitalized terms used in any Schedule or Exhibit but not otherwise
defined therein shall be defined as set forth in this Agreement.
Gender and Number. Any reference in this Agreement to gender shall include
all genders, and words imparting the singular number only shall include the
plural and vice versa.
Headings. The provision of a Table of Contents, the division of this
Agreement into Articles, Sections and other subdivisions and the insertion of
headings are for convenience of reference only and shall not affect or be
utilized in construing or interpreting this Agreement. All references in this
Agreement to any "Section" are to the corresponding Section of this Agreement
unless otherwise specified.
Herein. The words such as "herein," "hereinafter," "hereof," and
"hereunder" refer to this Agreement as a whole and not merely to a subdivision
in which such words appear unless the context otherwise requires.
Including. The word "including" or any variation thereof means "including,
without limitation" and shall not be construed to limit any general statement
that it follows to the specific or similar items or matters immediately
following it.
Reflected On or Set Forth In. An item arising with respect to a specific
representation or warranty shall be deemed to be "reflected on" or "set forth
in" a balance sheet or financial statements, to the extent any such phrase
appears in such representation or warranty, if (a) there is a reserve, accrual
7
or other similar item underlying a number on such balance sheet or financial
statements that related to the subject matter of such representation, (b) such
item is otherwise specifically set forth on the balance sheet or financial
statements or (c) such item is reflected on the balance sheet or financial
statements and is specifically set forth in the notes thereto.
(d) The parties hereto have participated jointly in the negotiation and
drafting of this Agreement and, in the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as jointly drafted
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provision of this
Agreement.
ARTICLE 2
SALE AND PURCHASE OF SHARES
2.1 Sale and Purchase of Shares. Upon the terms and subject to the
conditions contained herein, on the Closing Date, the Seller agrees to sell to
Purchaser, and Purchaser agrees to purchase from the Seller, the Shares.
2.2 Closing. Subject to the satisfaction of the conditions set forth in
Sections 9.1 and 9.2 or the waiver thereof by the party entitled to waive any
such condition, the closing of the sale and purchase of the Shares provided for
in Section 2.1 hereof (the "Closing") will take place at 10:00 a.m. (New York
City time) on a date to be specified by the parties (the "Closing Date"), which
shall be no later than the later of (i) April 1, 2005 and (ii) the second
Business Day after satisfaction or waiver of each condition to the Closing set
forth in Sections 9.1 and 9.2 (other than those conditions that by their terms
are to be satisfied at the Closing, but subject to the satisfaction or waiver of
those conditions), at the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another date or place is agreed to in
writing by the parties hereto.
ARTICLE 3
CONSIDERATION
3.1 Consideration. The aggregate consideration for the Shares shall be an
amount in cash equal to (i) Fifty-Eight Million Dollars ($58,000,000) less (ii)
the aggregate amount of Company Debt as set forth in the Payoff Certificates
(the "Purchase Price"), subject to adjustment as provided in Section 3.3.
3.2 Payment of Purchase Price. On the Closing Date, Purchaser shall pay the
Purchase Price to the Seller, which shall be paid by wire transfer of
immediately available United States funds into one or more accounts designated
by the Seller.
3.3 Purchase Price Adjustment.
(a) As promptly as practicable, but no later than sixty (60) days after the
Closing Date, Purchaser shall cause to be prepared and delivered to the Seller
the Closing Statement (as defined below) and a certificate based on such Closing
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Statement setting forth Purchaser's calculation of Closing Working Capital. The
closing statement (the "Closing Statement") shall present the aggregate Net
Working Capital of the Company and its Subsidiaries as of the end of business on
the Closing Date plus all cash and cash equivalents held by the Company and its
Subsidiaries at the end of business on the Closing Date ("Closing Working
Capital"). "Net Working Capital," which shall be determined separately in
respect of the Company and each Subsidiary, means the Current Assets, reduced by
the Current Liabilities, of such entity, as determined in accordance with
International Accounting Standards in respect of the Company and in accordance
with India GAAP in respect of the Subsidiaries. The preparation of the Closing
Statement shall be for the sole purpose of calculating the Net Working Capital
as of the end of business on the Closing Date. The Net Working Capital as of the
end of business on the Closing Date shall be calculated in the manner set forth
on Schedule 3.3(a) attached hereto.
(b) If the Seller disagrees with Purchaser's calculation of Closing Working
Capital delivered pursuant to Section 3.3(a), the Seller may, within fifteen
(15) days after delivery of the Closing Statement, deliver a notice to Purchaser
disagreeing with such calculations and setting forth the Seller's calculation of
such amount(s). Any such notice of disagreement shall specify those items or
amounts as to which the Seller disagrees, and the Seller shall be deemed to have
agreed with all other items and amounts contained in the Closing Statement and
the calculation of Closing Working Capital delivered pursuant to Section 3.3(a).
Net Working Capital shall be calculated expressly for this purpose in Dollars,
with any amounts in other currencies converted to Dollars based on the
Applicable Exchange Rate as of the Closing Date.
(c) If a notice of disagreement shall be duly delivered pursuant to Section
3.3(b), the Seller and Purchaser shall, during the fifteen (15) days following
such delivery, use their commercially reasonable efforts to reach agreement on
the disputed items or amounts in order to determine, as may be required, the
amount of Closing Working Capital. If during such period, the Seller and
Purchaser are unable to reach such agreement, they shall promptly thereafter
cause a mutually satisfactory independent nationally recognized accounting firm
(the "Accounting Referee") to review the relevant portions of this Agreement and
the disputed items or amounts for the purpose of calculating Closing Working
Capital (it being understood that in making such calculation, the Accounting
Referee shall be functioning as an expert and not as an arbitrator). In making
such calculation(s), the Accounting Referee shall consider only those items or
amounts in the Closing Statement and Purchaser's calculation of Closing Working
Capital as to which the Seller has disagreed. The Accounting Referee shall
deliver to the Seller and Purchaser, as promptly as practicable (but in any case
no later than thirty (30) days from the date of engagement of the Accounting
Referee), a report setting forth its calculation of Closing Working Capital,
which amount shall not be less than the amount thereof shown in Purchaser's
calculation delivered pursuant to Section 3.3(a) nor more than the amount
thereof shown in the Seller's calculation delivered pursuant to Section 3.3(b).
Such report shall be final and binding upon the Seller and Purchaser. The cost
of such review and report shall be borne one-half by the Purchaser and one-half
by the Seller.
(d) The Seller, Purchaser and the Company shall, and shall cause their
respective representatives to, cooperate and assist in the preparation of the
Closing Statement and the calculation of Closing Working Capital and in the
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conduct of the review referred to in this Section 3.3, including the making
available to the extent necessary of books, records, work papers and appropriate
personnel.
(e) If Final Working Capital exceeds the Target Net Working Capital,
Purchaser shall pay to the Seller, in the manner and with interest as provided
in Section 3.3(f), the amount of such excess and, if the Target Net Working
Capital exceeds Final Working Capital, the Seller shall pay to Purchaser the
amount of such excess, in the manner and with interest as provided in Section
3.3(f). Any such payment shall be considered to be an adjustment to the Purchase
Price. "Final Working Capital" means Closing Working Capital (i) as shown in
Purchaser's calculation delivered pursuant to Section 3.3(a) if no notice of
disagreement with respect thereto is duly delivered pursuant to Section 3.3(b);
or (ii) if such a notice of disagreement is delivered, (A) as agreed by the
Seller and Purchaser pursuant to Section 3.3(c) or (B) in the absence of such
agreement, as shown in the Accounting Referee's calculation delivered pursuant
to Section 3.3(c). The Seller hereby agrees to retain and not distribute to its
limited partners $1,500,000 of the Purchase Price received by it pursuant to
Section 3.2 until Final Working Capital has been so determined and all payments
required by the Seller, if any, pursuant to this Section 3.3 have been made.
(f) Any payment pursuant to Section 3.3(e) shall be made in Dollars at a
mutually convenient time and place as soon as practicable, but in no event less
than five (5) Business Days after Final Working Capital has been determined, by
wire transfer by Purchaser or the Seller, as the case may be, of immediately
available funds to the account of such other party as may be designated in
writing by such other party. The amount of any payment to be made pursuant to
this Section 3.3 shall bear interest from and including the Closing Date to but
excluding the date of payment at a rate per annum equal to the rate of interest
published from time to time by the Wall Street Journal as the "prime rate" at
large U.S. money center banks during the period from the Closing Date to the
date of payment. Such interest shall be payable at the same time as the payment
to which it relates and shall be calculated daily on the basis of a year of
three hundred sixty five (365) days and the actual number of days elapsed.
ARTICLE 4
TERMINATION
4.1 Termination of Agreement. This Agreement may be terminated at any time
prior to the Closing as follows:
(a) at the election of the Seller or Purchaser on or after December 30,
2005 (the "Outside Date"), if the Closing shall not have occurred by the close
of business on such date, provided that the terminating party is not in material
default of any of its obligations hereunder, and provided further that such date
shall be automatically extended for 60 days if only the conditions to Closing
set forth in Sections 9.1(e) and 9.2(d) remain unsatisfied or unwaived at
December 30, 2005;
(b) by mutual written consent of the Seller and Purchaser;
(c) by the Seller or Purchaser if there shall be in effect a final
nonappealable Order restraining, enjoining or otherwise prohibiting the
10
consummation of the transactions contemplated hereby; it being agreed that the
parties hereto shall use all commercially reasonable efforts to promptly appeal
any adverse determination which is not nonappealable (and diligently pursue such
appeal);
(d) by Purchaser if (i) the Seller or the Company shall be in material
violation of any of their obligations hereunder, and if such violation (if
curable) is not cured within 20 days after the giving of written notice by
Purchaser to the Company or the Seller, or (ii) there has been any event,
change, occurrence or circumstance that renders the conditions set forth in
either Section 9.1(a) or Section 9.1(g) incapable of being satisfied by the
Outside Date;
(e) by the Seller if (i) Purchaser shall be in material violation of any of
its obligations hereunder, and if such violation (if curable) is not cured
within 20 days after the giving of written notice by the Seller to Purchaser, or
(ii) there shall have been any event, change, occurrence or circumstance that
has had or reasonably would be expected to have a material adverse effect on the
ability of Purchaser to consummate the transactions contemplated by this
Agreement; or
(f) by the Company if Purchaser shall have not obtained and delivered to
the Company on or before 10:00 p.m. (New York time) on February 18, 2005 written
evidence of the Purchaser Board Approval certified by an authorized officer of
Purchaser.
4.2 Procedure Upon Termination. In the event of termination and abandonment
by Purchaser or the Seller, or both, pursuant to Section 4.1 hereof, written
notice thereof shall forthwith be given to the other party or parties, and this
Agreement shall terminate, and the purchase and sale of the Shares hereunder
shall be abandoned, without further action by Purchaser or the Seller.
4.3 Effect of Termination. In the event that this Agreement is validly
terminated in accordance with Section 4.1, then each of the parties shall be
relieved of its duties and obligations arising under this Agreement after the
date of such termination and such termination shall be without liability to
Purchaser, the Company or the Seller; provided, that no such termination shall
relieve any party hereto from liability for any willful breach of this
Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser that:
5.1 Organization and Good Standing. The Company is a limited company duly
organized, validly existing and in good standing under the laws of Mauritius and
has all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now conducted. The Company is duly
qualified or authorized to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction in which it owns or leases real
property and each other jurisdiction in which the conduct of its business or the
ownership of its properties requires such qualification or authorization, except
where the failure to be so qualified, authorized or in good standing would not
have a Material Adverse Effect.
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5.2 Authorization of Agreement. The Company has all requisite power and
authority to execute and deliver this Agreement and each other agreement,
document, or instrument or certificate contemplated by this Agreement or to be
executed by the Company in connection with the consummation of the transactions
contemplated by this Agreement (the "Company Documents"), and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Company Documents and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
limited company action on the part of the Company. This Agreement has been, and
each of the Company Documents will be at or prior to the Closing, duly and
validly executed and delivered by the Company and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto)
this Agreement and the Company Documents constitute the legal, valid and binding
obligations of the Company, enforceable against it in accordance with their
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
5.3 Conflicts; Consents of Third Parties.
(a) Except as set forth on Schedule 5.3(a), none of the execution and
delivery by the Company of this Agreement or the Company Documents, the
consummation of the transactions contemplated hereby or thereby, or compliance
by the Company with any of the provisions hereof or thereof will conflict with,
or result in any violation of or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination or cancellation
under, any provision of (i) the organizational documents of the Company or any
Subsidiary; (ii) any material Contract or Permit to which the Company or any
Subsidiary is a party or by which any of the material properties or assets of
the Company or any Subsidiary are bound; (iii) any Order applicable to the
Company or any Subsidiary or by which any of the properties or assets of the
Company or any Subsidiary are bound; or (iv) any applicable Law, the violation
of which has or may have a material impact on the business of the Company or any
of its Subsidiaries.
(b) Except as set forth on Schedule 5.3(b), no material consent, waiver,
approval, Order, Permit or authorization of, or declaration or filing with, or
notification to, any Person or Governmental Body is required on the part of the
Company or any Subsidiary in connection with the execution and delivery of this
Agreement or the Company Documents or the compliance by the Company with any of
the provisions hereof or thereof, or the consummation of the transactions
contemplated hereby or thereby, except for compliance with the applicable
requirements of any Law enforced by any Governmental Antitrust Entity regarding
preacquisition notifications for the purpose of competition reviews.
5.4 Capitalization.
(a) The authorized capital stock of the Company consists of 100,000,000
shares of Common Stock and 10,000,000 shares of Preferred Stock. As of the date
hereof, there are 25,075,797 shares of Common Stock issued and outstanding, all
of which are held by the Seller, and no shares of Common Stock are held by
Company as treasury stock. All of the issued and outstanding shares of Common
12
Stock were duly authorized for issuance and are validly issued, fully paid and
non-assessable. As of the date hereof, there are 7,050,000 shares of Preferred
Stock issued and outstanding, all of which are, or will be, held by the Seller
at Closing, and no shares of Preferred Stock are held by the Company as treasury
stock. All of the issued and outstanding shares of Preferred Stock were duly
authorized for issuance and are validly issued, fully paid and non-assessable.
(b) There is no existing option, warrant, call, right, or Contract of any
character to which the Company is a party requiring, and there are no securities
of the Company outstanding which upon conversion or exchange would require, the
issuance, of any shares of capital stock of the Company or other securities
convertible into, exchangeable for or evidencing the right to subscribe for or
purchase shares of capital stock of the Company. Except as set forth on Schedule
5.4(b), the Company is not a party to any voting trust or other Contract with
respect to the voting, redemption, sale, transfer or other disposition of the
capital stock of the Company.
5.5 Subsidiaries.
(a) Schedule 5.5(a) sets forth the name of each Subsidiary, and, with
respect to each Subsidiary, the jurisdiction in which it is incorporated or
organized, the jurisdictions, if any, in which it is qualified to do business,
the number of shares of its authorized capital stock, the number and class of
shares thereof duly issued and outstanding, the names of all stockholders or
other equity owners and the number of shares of stock owned by each stockholder
or the amount of equity owned by each equity owner. Each Subsidiary is a duly
organized and validly existing corporation or other entity in good standing
under the laws of the jurisdiction of its incorporation or organization and is
duly qualified or authorized to do business as a foreign corporation or entity
and is in good standing under the laws of each jurisdiction in which the conduct
of its business or the ownership of its properties requires such qualification
or authorization, except where the failure to be so qualified, authorized or in
good standing would not have a Material Adverse Effect. Each Subsidiary has all
requisite corporate or entity power and authority to own, lease and operate its
properties and carry on its business as now conducted.
(b) The outstanding shares of capital stock of each Subsidiary are validly
issued, fully paid and non-assessable, and all such shares or other equity
interests represented as being owned, directly or indirectly, by the Company are
owned free and clear of any and all Liens, except as set forth on Schedule
5.5(b). No shares of capital stock are held by any Subsidiary as treasury stock.
There is no existing option, warrant, call, right or Contract to which any
Subsidiary is a party requiring, and there are no convertible securities of any
Subsidiary outstanding which upon conversion would require, the issuance of any
shares of capital stock or other equity interests of any Subsidiary or other
securities convertible into shares of capital stock or other equity interests of
any Subsidiary.
5.6 Financial Statements.
(a) The Company has delivered to Purchaser copies of the audited balance
sheets of the Company as at December 31, 2003 and 2002 and the related audited
statements of income and of cash flows of the Company for the years then ended
(the "Company Financial Statements"). Except as set forth in the notes thereto
and normal recurring year-end adjustments, the Financial Statements have been
prepared in accordance with International Accounting Standards consistently
applied and present fairly in all material respects the consolidated financial
13
position, results of operations and cash flows of EGI India as at the dates and
for the periods indicated therein. For the purposes hereof, the audited balance
sheet of the Company as at September 30, 2003 is referred to as the "Company
Balance Sheet."
(b) The Company has delivered to Purchaser copies of the audited balance
sheets of each of the Subsidiaries as at September 30, 2004 and 2003 and the
related audited statements of income and of cash flows of each of the
Subsidiaries for the years then ended (such audited statements, including the
related notes and schedules thereto, are referred to herein as the "Subsidiary
Financial Statements," and collectively with the Company Financial Statements ,
the "Financial Statements"). Except as set forth in the notes thereto and normal
recurring year-end adjustments, each of the Subsidiary Financial Statements has
been prepared in accordance with Indian GAAP consistently applied and presents
fairly in all material respects the consolidated financial position, results of
operations and cash flows of each of the Subsidiaries as at the dates and for
the periods indicated therein. For the purposes hereof, the audited balance
sheets of the Subsidiaries as at September 30, 2004 is referred to as the
"Subsidiary Balance Sheets" The Company Balance Sheet and the Subsidiary Balance
Sheets are collectively referred to as the "Balance Sheets," and the applicable
dates of the Balance Sheets are referred to herein as the "Balance Sheet Dates."
5.7 No Undisclosed Liabilities. Neither the Company nor any Subsidiary has
any material Liabilities of any kind that would have been required to be
reflected in, reserved against or otherwise described on the applicable Balance
Sheet or in the notes thereto in accordance with International Accounting
Standards or Indian GAAP, as applicable, and were not so reflected, reserved
against or described, other than (i) Liabilities incurred in the Ordinary Course
of Business after the applicable Balance Sheet Date, or (ii) Liabilities
incurred in connection with the transactions contemplated hereby.
5.8 Absence of Certain Developments. Except as contemplated by this
Agreement or as set forth on Schedule 5.8(a), since the applicable Balance Sheet
Date (i) the Company and its Subsidiaries have conducted their respective
businesses only in the Ordinary Course of Business and (ii) there has not been
any:
(a) event, change, occurrence or circumstance that has had or reasonably
would be expected to have a Material Adverse Effect;
(b) material change in the relationship of the Company or any of its
Subsidiaries with any of its suppliers, customers, distributors, lessors,
licensors, licensees or other third parties, in each case, which are material to
the business of the Company;
(c) declaration, setting aside, or payment of any dividend or any
distribution with respect to any capital stock of the Company;
(d) increase in or commitment to increase compensation benefits, or other
remuneration to or for the benefit of any employee, director, officer, or agent
of the Company or any of its Subsidiaries, or any benefits granted under any
plan with or for the benefit of any such employee, director, officer or agent,
in each case, other than in the Ordinary Course of Business;
14
(e) transaction entered into or carried out by the Company or any of its
Subsidiaries to sell or dispose of any material assets or any capital stock of
the Company or any of its Subsidiaries other than in the Ordinary Course of
Business;
(f) loan or advance by the Company or any of its Subsidiaries to any third
party except for advances not in excess of $20,000 made in the Ordinary Course
of Business to any employee of such entity;
(g) change made with respect to the Company or any of its Subsidiaries in
its Tax or financial accounting or any material Tax election; or
(h) commitment or agreement by the Company or any of its Subsidiaries to do
any of the foregoing items (a) through (g).
5.9 Taxes. Except as set forth on Schedule 5.9:
(a) The Company and each Subsidiary have filed all Tax Returns that are
required by the applicable tax laws within the statutory period specified or
allowed under the respective statutes. All such Tax Returns are true, correct
and complete in all material respects.
(b) Neither the Company nor any Subsidiary is the beneficiary of any
extension of time within which to file any such Tax Return.
(c) The Company and each Subsidiary have timely paid all Taxes which have
or may become due and payable (whether or not shown on any Tax Return) and
appropriate provisions have been made in accordance with Indian GAAP or
International Accounting Standards, as applicable, in the relevant Financial
Statements of the Company and each Subsidiary.
(d) No deficiencies or claims are being asserted in writing with respect to
any Taxes of the Company or any Subsidiary.
(e) Neither the Company nor any Subsidiary has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to any tax audit or deficiency, and no request for any such waiver or extension
is pending.
(f) No claim has been made by a tax authority that the Company or any
Subsidiary is or may be subject to tax in a jurisdiction where the relevant
company does not file Tax Returns.
(g) All claims made with regard to expenses, allowances or claims of any
nature whatsoever in the Tax Returns by the Company and each Subsidiary,
including, inter alia, those set forth immediately below, are accurate and
allowable under the applicable Laws and/or supported by judicial precedents,
including such claims regarding:
(i) Depreciation on business and commercial rights (being stated as
goodwill) and technical know-how;
15
(ii) Losses and unabsorbed depreciation claimed as carried forward in
the Tax Returns;
(iii) Expenditure on claim settlement for business acquired from
Hindustan Lever Ltd.;
(iv) Payments for goods and services availed from related parties,
which requires regulatory approvals or otherwise;
(v) Capital and revenue expenditure incurred on approved scientific
research & development activities relevant to any Subsidiary's business as
approved by the relevant authorities;
(vi) Expenditures incurred on business acquisition, mergers and such
other restructuring arrangement; and
(vii) Claim for amortization of expenditure incurred on voluntary
retirement scheme declared by the Subsidiaries.
(h) The Company and each Subsidiary holds or possesses all the relevant
documentation to substantiate the positions taken in their Tax Returns. In case
of litigation, the Company or the relevant Subsidiary would be in a position to
appropriately defend the claims so made. Neither the Company nor any Subsidiary
has taken a position on a Tax Return that would expose it to penalties, except
after consultation with tax counsel.
(i) Neither the Company nor any Subsidiary has an appeal pending before a
Tax appellate authority.
(j) All Taxes due with respect to any completed audits, examination or
litigation with any Tax authority have been paid in full. Further, appropriate
provisions have been made in accordance with Indian GAAP or International
Accounting Standards, as applicable, in the relevant Financial Statements of the
Company and each Subsidiary.
(k) The Company and each Subsidiary have complied in all material respects
with all applicable Tax laws relating to payment and withholding of Taxes in
connection with amounts owing to any employee, independent contractor, creditor,
stockholder or other similar third party including non-residents and have been,
or will have been, duly withheld, collected and paid over, in each case, in a
timely manner, to the proper Tax authorities to the extent due and payable for
all periods under all applicable Tax laws.
(l) In respect of any ongoing audit, investigation and other proceedings by
a Tax authority, the Company or relevant Subsidiary has filed appropriate
submissions defending itself against such action and Tax claim. The Company or
the relevant Subsidiary believes that such action and claim will be successfully
defended based on the filed submissions.
(m) Neither the Company nor any Subsidiary (i) is a party to any Tax
allocation, Tax sharing or similar agreement or arrangement (whether or not
16
written) pursuant to which it will have any obligation to make any payments
after the Closing Date, or (ii) has any liability for Taxes of any Person as a
transferee or successor, by contract or otherwise.
(n) There are no liens or encumbrances for Tax existing with respect to any
of the assets or properties of the Company or any Subsidiary except for
statutory liens for Taxes not yet due or payable or that are being contested in
good faith through appropriate proceedings.
(o) Neither the Company nor any Subsidiary is a party to any joint venture,
partnership or other arrangement that could be treated as a partnership for
income Tax purposes.
(p) No closing agreements, private letter rulings, technical advice
memoranda or similar agreements or rulings have been entered into or issued by
any taxing authority with respect to the Company or any Subsidiary.
(q) No written position has been taken in any Tax Return with respect to
the business or operations of the Company or any Subsidiary for a taxable year
for which the statute of limitations for the assessment of any Taxes with
respect thereto has not expired or that is contrary to any publicly announced
position of a taxing authority or that is substantially similar to any position
which a taxing authority has successfully challenged in the course of an
examination of a Tax Return of the Company or any Subsidiary.
(r) Neither the Company nor any Subsidiary is a "controlled foreign
corporation" as that term is defined under Section 957 of the United States
Internal Revenue Code of 1986, as amended.
(s) The Company is a Tax resident of Mauritius eligible for the benefits of
the income tax treaty between India and Mauritius and is managed and controlled
in Mauritius. It is the legal and beneficial owner of the shares of each
Subsidiary that it is stated as owning on Schedule 5.5(a).
5.10 Real Property. Schedule 5.10 sets forth a complete list of (i) all
material real property and interests in real property owned in fee by the
Company and its Subsidiaries (individually, an "Owned Property" and
collectively, the "Owned Properties"), and (ii) all leases of real property by
the Company or a Subsidiary involving annual payments in excess of $50,000 or
its Rupee equivalent (individually, a "Real Property Lease" and collectively,
the "Real Property Leases" and, together with the Owned Properties, being
referred to herein individually as a "Company Property" and collectively as the
"Company Properties"). The Company and its Subsidiaries have good and valid fee
title to all Owned Property reflected on Schedule 5.10 as owned by the Company
or its Subsidiaries, free and clear of all Liens of any nature whatsoever except
(A) Liens set forth on Schedule 5.10 and (B) Permitted Exceptions. To the
Knowledge of the Company, neither the Company nor any Subsidiary has received
any notice of any default or event that with notice or lapse of time, or both,
would constitute a default by the Company or any Subsidiary under any of the
Real Property Leases and, to the Knowledge of the Company, no other party to any
of the Real Property Leases is in material default thereunder.
5.11 Tangible Personal Property. Schedule 5.11 sets forth all leases of
personal property by the Company or a Subsidiary ("Personal Property Leases")
involving annual payments in excess of $50,000 or its Rupee equivalent. To the
17
Knowledge of the Company, neither the Company nor any Subsidiary has received
any notice of any default or any event that with notice or lapse of time, or
both, would constitute a default, by the Company or any Subsidiary under any of
the Personal Property Leases and, to the Knowledge of the Company, no other
party to any of the Personal Property Leases is in material default thereunder..
5.12 Intellectual Property. Except as set forth on Schedule 5.12, the
Company and its Subsidiaries own or have valid licenses to use all material
Intellectual Property used by them in the Ordinary Course of Business. Except as
set forth on Schedule 5.12, to the Knowledge of the Company, (i) the material
Intellectual Property used by the Company and its Subsidiaries are not the
subject of any challenge received by the Company or any of its Subsidiaries in
writing and (ii) neither the Company nor any of its Subsidiaries has received
any written notice of any default or any event that with notice or lapse of
time, or both, would constitute a default under any material Intellectual
Property license to which the Company or any of its Subsidiaries is a party or
by which it is bound.
5.13 Germplasm. Schedule 5.13 sets forth a description of the Germplasm of
the Company. Except as set forth on Schedule 5.13:
(a) the Company and/or its Subsidiaries (i) is the sole legal and
beneficial owner of such Germplasm and all related Intellectual Property rights,
(ii) has been granted, by a written agreement, all such Intellectual Property
rights as may be required in connection with the use by the Company and its
Subsidiaries of such Germplasm, (iii) has obtained and utilized such Germplasm
under the Breeders Exemption of the 1991 UPOV Convention and counterpart
national legislation (including the U.S. Plant Variety Protection Act of 1994)
at the time it was obtained and (iv) the Germplasm subject to the exemption
referred to in clause (iii) above is not, to the Knowledge of the Company, the
subject of any issued or pending U.S. Utility Patent application owned by a
third party;
(b) such Germplasm is not covered by any Intellectual Property rights of
any third party, other than those rights licensed to the Company or any of its
Subsidiaries for use in such Germplasm; and
(c) the acquisition and use of such Germplasm by the Company and its
Subsidiaries after December 30, 1999 and prior to the Closing Date: (i) did not
infringe on the Intellectual Property rights of any third party; (ii) did not
involve the misappropriation of the Intellectual Property rights of any third
party; (iii) was not in breach of any confidential, fiduciary, partnership,
master-servant or agency relationship arising under Law; (iv) was not in breach
of any obligation arising under any material Contract to which the Company or
any of its Subsidiaries is a party and, to the Knowledge of the Company, was not
in breach of any obligation arising under any Contract, regardless of the
identity of the parties to such Contract; (v) did not involve any trespass to
land or buildings used or occupied by third parties; and (vi) was not in
violation of any applicable Laws.
5.14 Genetically Modified Organisms.
(a) The Company and its Subsidiaries have developed, implemented and are
complying globally with quality management practices and procedures intended to
prevent the unintended presence of regulated biotech traits in their research
and commercial seed materials.
18
(b) Except as set forth on Schedule 5.14(b), since December 30, 1999,
neither the Company nor any of its Subsidiaries has knowingly delivered seed to
a final customer into a country containing a regulated trait without all
appropriate regulatory permits and approvals, or delivered seed that has been
produced in non-compliance with the quality management practices described in
Section 5.14(a).
(c) To the Knowledge of the Company, in the United States,there are no
market claims or reports of the presence of unintended regulated traits in the
products of the Company or any of its Subsidiaries or in materials directly
derived from such products.
5.15 Material Contracts.
(a) Schedule 5.15(a) sets forth all of the following Contracts to which the
Company or any of its Subsidiaries is a party or by which it is bound
(collectively, the "Material Contracts"):
(i) Contracts with any stockholders or any current officer or director
of the Company or any of its Subsidiaries or any Affiliate (other than a
Subsidiary) of the Company or any of the stockholders;
(ii) Contracts with any labor union or association representing any
employee of the Company or any of its Subsidiaries;
(iii) Contracts for the sale of any of the assets of the Company or
any of its Subsidiaries other than in the Ordinary Course of Business, for
consideration in excess of $250,000 or its equivalent in Rupees or other
currencies;
(iv) Contracts relating to the acquisition by the Company or any of
its Subsidiaries of any operating business or the capital stock of any
other Person, in each case for consideration in excess of $250,000 or its
equivalent in Rupees or other currencies;
(v) Contracts relating to the incurrence of Indebtedness, or the
making of any loans, in each case involving amounts in excess of $1,000,000
or its equivalent in Rupees or other currencies;
(vi) any Contract relating to the transfer or acquisition of cotton
traits or rights to cotton traits; and
(vii) any other Contracts which involve the expenditure of more than
$250,000, or its equivalent in Rupees or other currencies, in the aggregate
or require performance by any party more than one year from the date hereof
that, in either case, are not terminable by the Company or a Subsidiary
without penalty on notice of one hundred and eighty (180) days or less.
(b) The Company has made available to Purchaser true, correct and complete
copies of each Material Contract. Neither the Company nor any Subsidiary has
received any written notice of any default or event that with notice or lapse of
time, or both, would constitute a default by the Company and its Subsidiaries
under any Material Contract. Each of the Material Contracts is a valid, binding
19
and enforceable obligation of the Company or its Subsidiaries party thereto,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and subject, as
to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
5.16 Employee Benefits Plans.
(a) Schedule 5.16(a) sets forth a complete and correct list of all (i)
employment, consulting, severance or other compensation Contract, (ii) deferred
compensation, executive compensation, bonus or other incentive compensation,
gratuity, provident fund, superannuation fund, vacation pay, sickness,
disability, death benefit, life insurance, employee stock option or stock
purchase, club membership, educational assistance, severance pay, or termination
plan, arrangement, or practice, and (iii) other employee benefit plan, program
or arrangement, any of which relates to employees or former employees of the
Company or any of its Subsidiaries or in respect of which the Company or any of
its Subsidiaries has any Liability or obligation (contingent or otherwise) (the
"Company Benefit Plans"). Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will (i) result in
any payment becoming due, or increase the amount of compensation due, to any
employee or former employee of the Company or any of its Subsidiaries, (ii)
increase any benefits otherwise payable under any Company Benefit Plan, or (iii)
result in the acceleration of the time of payment or vesting of any such
benefits. With respect to each Company Benefit Plan, the Company has made
available to Purchaser complete and correct copies of all descriptions
distributed to employees or set forth in any manuals or other documents, the
text of the Company Benefit Plan and of any trust, insurance or annuity contract
maintained in connection therewith.
(b) All contributions required to be made to or with respect to each
Company Benefit Plan with respect to the service of employees, former employees
or other individuals with the Company or any of its Subsidiaries prior to the
date hereof have been made or have been accrued for in the applicable Balance
Sheet or in the books and records of the Company or its Subsidiaries for periods
after the applicable Balance Sheet Date.
(c) Each Company Benefit Plan has in all material respects been
administered to date in accordance with applicable Laws and with the terms and
provisions of all documents or Contracts pursuant to which such Company Benefit
Plan is maintained, except as otherwise permitted by Law; there is no dispute,
arbitration, claim, suit or grievance, pending or, to the Knowledge of the
Company, threatened, involving a Company Benefit Plan (other than routine claims
for benefits), and there are no matters pending as to which the Company has
received written notice from any Governmental Body with respect to a Company
Benefit Plan.
(d) Except as required by Law, none of the Company Benefit Plans provides
for post-retirement life insurance or health benefits coverage to any
participant or any beneficiary of a participant.
(e) No loan has been granted by the Company or any of its Subsidiaries to
any employee, except for amounts pursuant to travel, entertainment and other
similar expenses made in accordance with the Company's policies.
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5.17 Labor.
(a) Except as set forth on Schedule 5.17(a), neither the Company nor any of
its Subsidiaries is a party to, or bound by, any collective bargaining
agreement, contract or other arrangement or understanding with a labor union or
a labor organization.
(b) Except as set forth on Schedule 5.17(b), there are no current (i)
strikes, work stoppages, work slowdowns or lockouts pending or, to the Knowledge
of the Company, threatened against or involving the Company or any of its
Subsidiaries, or (ii) unfair labor practice charges, grievances or complaints
pending or, to the Knowledge of the Company, threatened by or on behalf of any
employee or group of employees of the Company or any of its Subsidiaries. To the
Knowledge of the Company, and except as set forth on Schedule 5.17(b), there are
no investigations, inquiries or proceedings before any Governmental Body with
respect to or relating to the terms and conditions of employment of the
Company's employees.
5.18 Litigation. Except as set forth on Schedule 5.18, there are no
material Legal Proceedings pending or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries before any
Governmental Body.
5.19 Compliance with Laws; Permits.
(a) The Company and its Subsidiaries are in compliance with all Laws of any
Governmental Body applicable and material to their respective businesses or
operations. Neither the Company nor any Subsidiary has received any written
notice of or been charged with the violation of such Laws.
(b) The Company and its Subsidiaries currently have all material Permits
which are required for the operation of their respective businesses as presently
conducted. Neither the Company nor any of its Subsidiaries is in material
default or violation (and no event has occurred which, with notice or the lapse
of time or both, would constitute a material default or violation) of any term,
condition or provision of any material Permit to which it is a party.
(c) 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, since December 30, 1999, acting on behalf of the Company or
any of its Subsidiaries, has 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 FCPA (or which would have been
in violation of FCPA if it were applicable) or otherwise taken any action which
would cause the Company or any of its Subsidiaries to be in violation of the
FCPA.
(d) To the Knowledge of the Company and its Subsidiaries are in compliance
in all material respects with applicable Laws relating to labor and human
rights.
(e) 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
21
of its Subsidiaries, has, since December 30, 1999, acting on behalf of the
Company or any of its Subsidiaries violated any applicable Law pertaining to
export controls, antiboycott restrictions or trade sanctions.
5.20 Environmental Matters. Except as set forth on Schedule 5.20 hereto:
(a) the operations of the Company and each of its Subsidiaries are, and
have been since December 30, 1999, in compliance in all material respects with
all applicable Environmental Laws, which compliance includes obtaining,
maintaining and complying with all material Permits required under applicable
Environmental Laws to operate its business;
(b) neither the Company nor any of its Subsidiaries is the subject of any
outstanding Order or Contract with any Governmental Body pursuant to
Environmental Laws which imposes material obligations on the Company or any of
its Subsidiaries;
(c) neither the Company nor any of its Subsidiaries is subject to any
pending claims or Legal Proceedings or, to the Knowledge of the Company,
threatened claims alleging noncompliance with or potential Liability under
Environmental Laws or has received any written communication alleging
noncompliance with or potential Liability under any Environmental Law; and
(d) to the Knowledge of the Company, there are no investigations of the
businesses of the Company or any of its Subsidiaries, or currently or previously
owned, operated or leased property of the Company or any of its Subsidiaries
pending or threatened which would reasonably be expected to result in the
Company or any of its Subsidiaries incurring material Liability pursuant to any
Environmental Law.
5.21 Accounts Receivable. The accounts receivable of the Company and its
Subsidiaries as of the date hereof are, to the extent not yet paid in full,
valid, genuine and existing and arose from bona fide sales of products or
services in the Ordinary Course of Business.
5.22 Inventories. All inventory held by the Company and its Subsidiaries is
usable and salable in the Ordinary Course of Business in all material respects
and is not physically damaged or obsolete in any material respects, subject, in
each case, to reserves, if any, for inventory write-down set forth in the
applicable Balance Sheet.
5.23 Transactions with Related Persons; Affiliates. Except as set forth on
Schedule 5.23, the Company does not have any Liabilities, contractual or
otherwise, owed to or owing from, directly or indirectly, any Affiliate of the
Company (other than a Subsidiary) or any stockholder.
5.24 Employees, Officers and Directors.
(a) Schedule 5.24(a) lists the following information as of the date hereof
for each employee of the Company and its Subsidiaries, including each employee
on leave of absence or layoff status: name, job title and compensation paid or
payable.
22
(b) Neither the Company nor any of its Subsidiaries is indebted to any
stockholder, director, officer, employee or agent of the Company or any of its
Subsidiaries, except for amounts due as normal salaries, wages, employee
benefits and bonuses, and in reimbursement of ordinary expenses on a current
basis.
(c) No officer, director, employee or consultant of the Company or any of
its Subsidiaries is indebted to the Company or any of its Subsidiaries, except
for advances for ordinary business expenses on a basis consistent with past
practices.
(d) To the Knowledge of the Company, no current employee or current officer
or director of the Company or any of its Subsidiaries is a party to, or is
otherwise bound by, any agreement or arrangement, including any confidentiality,
non-competition or proprietary rights agreement, between such employee, officer
or director and any other Person that in any way materially and adversely
affects (i) the performance of his or her duties as an employee, officer or
director of the Company or any such Subsidiary or (ii) the ability of the
Company and its Subsidiaries to conduct the business now being conducted by
them. To the Knowledge of the Company, no director, officer or key employee of
the Company or any of its Subsidiaries intends to terminate his or her
employment.
5.25 Insurance. Schedule 5.25 lists the insurance policies maintained by
the Company and its Subsidiaries. To the Knowledge of the Company, such policies
evidence insurance in such amounts and against such risks and losses as are
generally maintained with respect to comparable companies and properties. All of
such insurance policies are in full force and effect, and neither the Company
nor any Subsidiary is in material default with respect to any of its obligations
under any of such insurance policies.
5.26 Books and Records and Financial Controls.
(a) True, correct and complete copies of the books of account, stock record
books and minute books of the Company and each of its Subsidiaries for the past
two years have been made available to Purchaser, and such books and records have
been maintained in accordance with good business practices and in accordance
with applicable Law. The minute books of the Company and each of its
Subsidiaries contain accurate and complete records in all material respects of
all meetings of the stockholders, the Board of Directors or other governing
bodies, and committees of the Board of Directors or such other governing bodies,
of such company, and no meeting of any such stockholders, Board of Directors,
other governing body or committee has been held where the corporate actions were
authorized for which minutes or written consents have not been prepared and are
not contained in such minute books. At the Closing, all of such books and
records will be in the possession of the Company or its Subsidiaries.
(b) The Company and its Subsidiaries have established proper internal
accounting controls which provide reasonable assurance that (i) material
transactions are executed with management's authorization and (ii) transactions
are recorded as necessary to permit preparation of the financial statements of
the Company, and to maintain accountability for the assets of the Company and
its Subsidiaries.
23
5.27 Sufficiency of Property. The assets owned or leased by the Company and
its Subsidiaries constitute all of the property and property rights used or
necessary for the conduct of their respective businesses in the manner and to
the extent now conducted by them in all material respects.
5.28 Indebtedness and Liabilities. Except as set forth on Schedule 1.1(a)
or Schedule 5.23, the Company and its Subsidiaries do not have outstanding any
indebtedness for borrowed money from any Person. The aggregate Liabilities of
the Company (excluding the Subsidiaries) does not exceed $30,000 (or the
equivalent amount in Rupees).
5.29 Cash and Cash Equivalents. Of the cash and cash equivalents held by
the Company and its Subsidiaries, not more than $50,000 (or the equivalent
amount in Rupees) is held in currencies other than Rupees or Dollars or held in
bank accounts outside India or the United States.
5.30 Financial Advisors. Except for Citigroup Global Markets Inc., no
Person has acted, directly or indirectly, as a broker, finder or financial
advisor for the Company in connection with the transactions contemplated by this
Agreement and no Person is entitled to any fee or commission or like payment
from Purchaser in respect thereof. The Seller shall be responsible for the
payment of the compensation of Citigroup Global Markets Inc., as provided in
Section 10.4.
5.31 No Other Representations or Warranties; Schedules. Except for the
representations and warranties contained in this Article 5 (as modified by the
Schedules hereto), neither the Company nor any other Person makes any other
express or implied representation or warranty with respect to the Company, its
Subsidiaries or the transactions contemplated by this Agreement, and the Company
disclaims any other representations or warranties, whether made by the Company,
the Seller or any of their respective Affiliates, officers, directors,
employees, agents or representatives. Except for the representations and
warranties contained in Article 5 hereof (as modified by the Schedules hereto),
the Company and the Seller hereby disclaim all liability and responsibility for
any representation, warranty, projection, forecast, statement, or information
made, communicated, or furnished (orally or in writing) to Purchaser or its
Affiliates or representatives (including any opinion, information, projection,
or advice that may have been or may be provided to Purchaser by any director,
officer, employee, agent, consultant, or representative of the Company or the
Seller or any of their respective Affiliates). The disclosure of any matter or
item in any schedule hereto shall not be deemed to constitute an acknowledgment
that any such matter is required to be disclosed.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents to Purchaser that:
6.1 Organization and Good Standing. The Seller is an exempt limited
partnership, duly organized, validly existing and in good standing under the
laws of the Cayman Islands and has all requisite partnership power and authority
to own, lease and operate its properties and to carry on its business as now
conducted.
24
6.2 Authorization of Agreement. The general partner of the Seller has all
requisite power, authority and legal capacity to execute and deliver on behalf
of the Seller this Agreement and each other agreement, document, or instrument
or certificate contemplated by this Agreement or to be executed by the Seller in
connection with the consummation of the transactions contemplated by this
Agreement (the "Seller Documents"), and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and each of the Seller Documents and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all required
partnership action on the part of the Seller. This Agreement has been, and each
of the Seller Documents will be at or prior to the Closing, duly and validly
executed and delivered by the general partner of the Seller on behalf of the
Seller, and (assuming the due authorization, execution and delivery by the other
parties hereto and thereto) this Agreement constitutes, and each Seller
Document, when so executed and delivered will constitute, the legal, valid and
binding obligation of the Seller, enforceable against the Seller in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar Laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
6.3 Conflicts; Consents of Third Parties.
(a) None of the execution and delivery by the general partner of the Seller
of this Agreement or the Seller Documents, the consummation of the transactions
contemplated hereby or thereby, or compliance by the Seller with any of the
provisions hereof or thereof will conflict with, or result in any violation of
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination or cancellation under, any provision of (i)
certificate of limited partnership or the limited partnership agreement of the
Seller; (ii) any Contract, or Permit to which the Seller is a party or by which
any of the properties or assets of the Seller are bound; (iii) any Order
applicable to the Seller or by which any of the properties or assets of the
Seller are bound; or (iv) any applicable Law.
(b) Except as set forth on Schedule 6.3(b), no consent, waiver, approval,
Order, Permit or authorization of, or declaration or filing with, or
notification to, any Person or Governmental Body is required on the part of the
Seller in connection with the execution and delivery of this Agreement or the
Seller Documents, or the compliance by the Seller with any of the provisions
hereof or thereof, the consummation of the transactions contemplated hereby or
thereby, except for such consents the failure of which would not have a material
adverse effect on the Seller's ability to consummate the transactions
contemplated hereby or thereby.
6.4 Ownership and Transfer of Shares. The Seller is, or at Closing will be,
the legal and beneficial owner of the Shares, free and clear of any and all
Liens.
6.5 Litigation. There are no Legal Proceedings pending or, to the knowledge
of the Seller, threatened that are reasonably likely to prohibit or restrain the
ability of the Seller to enter into this Agreement or any Seller Documents or
consummate the transactions contemplated hereby or thereby.
25
6.6 Financial Advisors. Except for Citigroup Global Markets Inc., no Person
has acted, directly or indirectly, as a broker, finder or financial advisor for
the Seller in connection with the transactions contemplated by this Agreement
and no Person is entitled to any fee or commission or like payment from
Purchaser in respect thereof. The Seller shall be responsible for the payment of
the compensation of Citigroup Global Markets Inc., as provided in Section 10.4.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company and the Seller
that:
7.1 Organization and Good Standing. Purchaser 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, lease and
operate properties and carry on its business.
7.2 Authorization of Agreement. Subject to receipt of the Purchaser Board
Approval, Purchaser has full corporate power and authority to execute and
deliver this Agreement and each other agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by Purchaser in
connection with the consummation of the transactions contemplated hereby and
thereby (the "Purchaser Documents"), and to consummate the transactions
contemplated hereby and thereby. Subject to receipt of the Purchaser Board
Approval, the execution, delivery and performance by Purchaser of this Agreement
and each Purchaser Document have been duly authorized by all necessary corporate
action on behalf of Purchaser. This Agreement has been, and each Purchaser
Document will be at or prior to the Closing, duly executed and delivered by
Purchaser and (assuming the due authorization, execution and delivery by the
other parties hereto and thereto) this Agreement constitutes, and each Purchaser
Document when so executed and delivered will constitute, the legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
7.3 Conflicts; Consents of Third Parties.
(a) Except as set forth on Schedule 7.3(a) hereto, none of the execution
and delivery by Purchaser of this Agreement or the Purchaser Documents, the
consummation of the transactions contemplated hereby or thereby, or compliance
by Purchaser with any of the provisions hereof or thereof will conflict with, or
result in any violation of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination or cancellation under,
any provision of (i) the certificate of incorporation or by-laws of Purchaser;
(ii) any Contract or Permit to which Purchaser is a party or by which any of the
properties or assets of Purchaser are bound; (iii) any Order applicable to
Purchaser or by which any of the properties or assets of Purchaser are bound; or
(iv) any applicable Law.
26
(b) No consent, waiver, approval, Order, Permit or authorization of, or
declaration or filing with, or notification to, any Person or Governmental Body
is required on the part of Purchaser in connection with the execution and
delivery of this Agreement or the Purchaser Documents or the compliance by
Purchaser with any of the provisions hereof or thereof, except for compliance
with the applicable requirements of any Law enforced by any Governmental
Antitrust Entity regarding preacquisition notifications for the purpose of
competition reviews.
7.4 Investment Representations.
(a) Purchaser understands and acknowledges that the Shares have not
been registered under the U.S. Securities Act of 1933, as amended (the
"Securities Act") or the securities Laws of any other jurisdiction.
Purchaser also understands that the Shares are being offered and sold
pursuant to an exemption from registration contained in the Securities Act
based in part upon Purchaser's representations contained in this Agreement.
(b) Acquisition for Own Account. Purchaser is acquiring the Shares for
Purchaser's own account for investment only, and not with a view towards
their distribution.
(c) Accredited Investor. Purchaser represents that it is an
"accredited investor" within the meaning of Regulation D under the
Securities Act.
7.5 Litigation. There are no Legal Proceedings pending or, to the knowledge
of Purchaser, threatened that are reasonably likely to prohibit or restrain the
ability of Purchaser to enter into this Agreement or any Purchaser Documents or
consummate the transactions contemplated hereby or thereby.
7.6 Financial Advisors. Except for X.X. Xxxxxx Securities Inc., no Person
has acted, directly or indirectly, as a broker, finder or financial advisor for
Purchaser in connection with the transactions contemplated by this Agreement.
Purchaser shall be responsible for the payment of the compensation under the
arrangements referred to on such Schedule, as provided in Section 10.4, and no
other Person is entitled to any fee or commission or like payment in respect
thereof.
7.7 Financing. Purchaser (i) has, and at the Closing will have, sufficient
internal funds (without giving effect to any unfunded financing regardless of
whether any such financing is committed) available to pay the Purchase Price and
any expenses incurred by Purchaser in connection with the transactions
contemplated by this Agreement, (ii) has, and at the Closing will have, the
resources and capabilities (financial or otherwise) to perform its obligations
under this Agreement and all Purchaser Documents, and (iii) has not incurred any
obligation, commitment, restriction or Liability of any kind, which would impair
or adversely affect such resources and capabilities
7.8 Condition of the Business. Notwithstanding anything contained in this
Agreement to the contrary, Purchaser acknowledges and agrees that neither the
Company nor the Seller is making any representations or warranties whatsoever,
express or implied, beyond those expressly given by the Company or the Seller,
as the case may be, in Article 5 and Article 6 respectively (as modified by the
Schedules hereto as supplemented or amended). Purchaser further represents that
none of the Company, the Seller or any of their respective Affiliates nor any
27
other Person has made any representation or warranty, express or implied, as to
the accuracy or completeness of any information regarding the Company or any of
its Subsidiaries, the Seller, or the transactions contemplated by this Agreement
not expressly set forth in this Agreement, and none of the Company, the Seller,
any of their respective Affiliates or any other Person will have or be subject
to any liability to Purchaser or any other Person resulting from the
distribution to Purchaser or its representatives or Purchaser's use of, any such
information. Purchaser acknowledges that it has conducted to its satisfaction
its own independent investigation of the condition, operations and business of
the Company and its Subsidiaries and, in making its determination to proceed
with the transactions contemplated by this Agreement, Purchaser has relied on
the results of its own independent investigation.
ARTICLE 8
COVENANTS
8.1 Access to Information. Prior to the Closing Date, Purchaser shall be
entitled, through its officers, employees and representatives (including its
legal advisors and accountants), to make such investigation of the properties,
businesses and operations of the Company and its Subsidiaries and such
examination of the books and records and Tax reporting positions of the Company
and its Subsidiaries as it reasonably requests and to make extracts and copies
of such books and records at its own expense. Any such investigation and
examination shall be conducted during regular business hours and under
reasonable circumstances and shall be subject to restrictions under applicable
Law. The Company shall cause the officers, employees, consultants, agents,
accountants, attorneys and other representatives of the Company and its
Subsidiaries to cooperate with Purchaser and Purchaser's representatives in
connection with such investigation and examination, and Purchaser and its
representatives shall cooperate with the Company and its representatives and
shall use their commercially reasonable efforts to minimize any disruption to
the business. Notwithstanding anything herein to the contrary, no such
investigation or examination shall be permitted to the extent that it would
require the Company or any of its Subsidiaries to disclose information subject
to attorney-client privilege or conflict with any confidentiality obligations to
which the Company or any of its Subsidiaries is bound; provided, however, that
the Company shall request, but shall not be required to obtain, a waiver of any
such confidentiality obligations upon Purchaser's reasonable request.
Notwithstanding anything to the contrary contained herein, prior to the Closing,
without the prior written consent of the Company, which may be withheld for any
reason, (i) Purchaser shall not contact any suppliers to, or customers of, the
Company or any Subsidiary other than in the ordinary course of business of the
Purchaser or any of its Affiliates with respect to matters not involving the
Company or its Subsidiaries, and (ii) Purchaser shall have no right to perform
invasive or subsurface investigations of the properties or facilities of the
Company or any of its Subsidiaries.
8.2 Conduct of the Business Pending the Closing.
(a) Prior to the Closing, except (i) as set forth on Schedule 8.2(a), (ii)
as required by applicable Law, (iii) as otherwise contemplated by this Agreement
or (iv) with the prior written consent of Purchaser (which consent shall not be
unreasonably withheld, delayed or conditioned), the Company shall, and shall
cause its Subsidiaries to:
28
(i) conduct the respective businesses of the Company and its
Subsidiaries only in the Ordinary Course of Business; and
(ii) use its commercially reasonable efforts to (A) preserve the
present business operations, organization and goodwill of the Company and
its Subsidiaries, and (B) preserve the present relationships with customers
and suppliers of the Company and its Subsidiaries.
(b) Except (i) as set forth on Schedule 8.2(b), (ii) as required by
applicable Law, (iii) as otherwise contemplated by this Agreement or (iv) with
the prior written consent of Purchaser (which consent shall not be unreasonably
withheld, delayed or conditioned), the Company shall not, and shall not permit
its Subsidiaries to:
(i) repurchase, redeem or otherwise acquire any outstanding shares of
the capital stock or other securities of, or other ownership interests in,
the Company or any of its Subsidiaries;
(ii) issue or sell any shares of capital stock or other securities of
the Company or any of its Subsidiaries or grant options, warrants, calls or
other rights to purchase or otherwise acquire shares of the capital stock
or other securities of the Company or any of its Subsidiaries;
(iii) effect any recapitalization, reclassification or like change in
the capitalization of the Company or any of its Subsidiaries;
(iv) amend the organizational documents of the Company or any of its
Subsidiaries;
(v) (A) materially increase the annual level of compensation of any
director or executive officer of the Company or any of its Subsidiaries,
(B) grant any unusual or extraordinary bonus, benefit or other direct or
indirect compensation to any director or executive officer, (C) materially
increase the coverage or benefits available under any (or create any new)
severance pay, termination pay, vacation pay, company awards, salary
continuation for disability, sick leave, deferred compensation, bonus or
other incentive compensation, insurance, pension or other employee benefit
plan or arrangement made to, for, or with any of the employees of the
Company or any of its Subsidiaries or otherwise modify or amend or
terminate any such plan or arrangement or (D) enter into any employment,
deferred compensation, severance, consulting, non-competition or similar
agreement (or amend any such agreement) to which the Company or any of its
Subsidiaries is a party or involving any employee of the Company or any of
its Subsidiaries, except, in each case, as required by the terms of any
Company Benefit Plans;
(vi) acquire any material properties or assets or sell, assign,
license, transfer, convey, lease or otherwise dispose of any of the
material properties or assets of the Company or any of its Subsidiaries
(except pursuant to an existing Contract for fair consideration in the
Ordinary Course of Business or for the purpose of disposing of obsolete or
worthless assets);
29
(vii) other than in the Ordinary Course of Business, cancel or
compromise any material debt or claim or waive or release any material
right of the Company or any of its Subsidiaries;
(viii) except as provided for in the Company's annual budget for the
2005 fiscal year (a copy of which has been delivered to the Purchaser),
enter into any commitment for capital expenditures of the Company and its
Subsidiaries in excess of $100,000, or its equivalent in Rupees or other
currencies, for any individual commitment and $500,000, or its equivalent
in Rupees or other currencies, for all commitments in the aggregate;
(ix) enter into, modify or terminate any labor or collective
bargaining agreement or, through negotiations or otherwise, make any
commitment or incur any liability to any labor organizations;
(x) enter into or agree to enter into any merger or consolidation with
any corporation or other entity, or acquire the securities of any other
Person;
(xi) enter into or modify any Contract with the Seller or any
Affiliate of the Seller;
(xii) except to the extent consistent with past practice or as
otherwise required by Law, make or rescind any material election relating
to Taxes, settle or otherwise compromise any claim, investigation, audit or
controversy relating to a material amount of Taxes;
(xiii) except to the extent required by Law or Indian GAAP or
International Accounting Standards, as applicable, make any material change
to any of its methods of accounting or methods of reporting revenue and
expenses or accounting practices; or
(xiv) agree to do anything prohibited by this Section 8.2.
8.3 Consents. The Purchaser and the Company shall use (and the Company
shall cause its Subsidiaries to use) their commercially reasonable efforts, and
the Seller, the Purchaser, the Company and its Subsidiaries shall cooperate to
obtain at the earliest practicable date all consents and approvals required to
consummate the transactions contemplated by this Agreement, including the
consents and approvals referred to in Sections 5.3(b), 6.3(b) and 7.3(b) hereof
(or the Schedules thereto), provided, however, that no party shall be obligated
to pay any consideration to any third party from whom consent or approval is
requested.
8.4 Regulatory Approvals.
(a) Subject to the terms and conditions herein provided, each of the
parties agrees to use all commercially reasonable efforts to take, or cause to
be taken, all action and to do, or cause to be done as promptly as practicable,
all things necessary, proper and advisable under applicable Laws to consummate
and make effective as promptly as practicable the transactions contemplated by
this Agreement. Subject to appropriate confidentiality protections, each party
hereto shall furnish to the other parties such necessary information and
reasonable assistance as such other party may reasonably request in connection
with the foregoing.
30
(b) Each of the parties shall cooperate with one another and use all
commercially reasonable efforts to prepare all necessary documentation
(including furnishing all information required under the Competition Laws) to
effect promptly all necessary filings and to obtain all consents, waivers and
approvals necessary to consummate the transactions contemplated by this
Agreement. Each party hereto shall provide to the other parties copies of all
correspondence between it (or its advisors) and any Governmental Antitrust
Entity relating to the transactions contemplated by this Agreement or any of the
matters described in this Section 8.4. Each such party shall promptly inform the
other parties hereto of any oral communication with, and provide copies of
written communications with, any Governmental Body regarding any such filings or
any such transaction. No party hereto shall independently participate in any
formal meeting with any Governmental Body in respect of any such filings,
investigation, or other inquiry without giving the other parties hereto prior
notice of the meeting and, to the extent permitted by such Governmental Body,
the opportunity to attend and/or participate. Subject to applicable Law, the
parties hereto will consult and cooperate with one another in connection with
any analyses, appearances, presentations, memoranda, briefs, arguments, opinions
and proposals made or submitted by or on behalf of any party hereto relating to
proceedings under the Competition Laws.
(c) Without limiting the generality of the undertakings pursuant to this
Section 8.4, the parties hereto shall provide or cause to be provided as
promptly as practicable to any Governmental Antitrust Entity information and
documents requested by any Governmental Antitrust Entity or necessary, proper or
advisable to permit consummation of the transactions contemplated by this
Agreement, including filing any notification and report form and related
material required under the Competition Law as promptly as practicable, but in
no event later than twenty (20) Business Days after the date hereof, and
thereafter to respond promptly to any request for additional information or
documentary material that may be made under the Competition Laws.
(d) Further, each of the parties hereto shall use its commercially
reasonable efforts to resolve such objections, if any, as may be asserted by any
Governmental Antitrust Entity with respect to the transactions contemplated by
this Agreement under any Competition Law. In connection therewith, if any Legal
Proceeding is instituted (or threatened to be instituted) challenging any
transaction contemplated by this Agreement as in violation of any Competition
Law, each of the parties hereto shall cooperate and use its commercially
reasonable efforts to contest and resist any such Legal Proceeding, and to have
vacated, lifted, reversed or overturned any decree, judgment, injunction or
other order whether temporary, preliminary or permanent, that is in effect and
that prohibits, prevents or restricts consummation of the transactions
contemplated by this Agreement, including by pursuing all available avenues of
administrative and judicial appeal and all available legislative action, unless,
by mutual agreement, Purchaser and the Company decide that litigation is not in
their respective best interests. Each of Purchaser and the Company shall use its
commercially reasonable efforts to take such action as may be required to cause
the expiration of the notice periods under the Competition Laws with respect to
such transactions as promptly as possible after the execution of this Agreement.
In connection with and without limiting the foregoing, each of Purchaser and the
Company agrees to use its commercially reasonable efforts to take promptly any
and all steps necessary to avoid or eliminate each and every impediment under
any Competition Laws that may be asserted by any Governmental Antitrust Entity,
so as to enable the parties to close the transactions contemplated by this
31
Agreement as expeditiously as possible in order to avoid the entry of, or to
effect the dissolution of, any decree, order, judgment, injunction, temporary
restraining order or other order in any suit or preceding, that would otherwise
have the effect of preventing or materially delaying the consummation of the
transactions contemplated by this Agreement.
8.5 Further Assurances. Each of Purchaser and the Company shall use (and
the Company shall cause each of its Subsidiaries to use) its commercially
reasonable efforts to (i) take all actions necessary or appropriate to
consummate the transactions contemplated by this Agreement and (ii) cause the
fulfillment at the earliest practicable date of all of the conditions to their
respective obligations to consummate the transactions contemplated by this
Agreement.
8.6 Confidentiality. Purchaser acknowledges that the information provided
to it in connection with this Agreement and the transactions contemplated hereby
is subject to the terms of the confidentiality agreement between Purchaser and
Citigroup Global Markets, Inc., on behalf of the Seller, dated October 21, 2004
(the "Confidentiality Agreement"), the terms of which are incorporated herein by
reference. Effective upon, and only upon, the Closing Date, the Confidentiality
Agreement shall terminate.
8.7 Indemnification, Exculpation and Insurance.
(a) From and after the Closing Date, Purchaser shall, and shall cause the
Company to, indemnify, defend and hold harmless, to the fullest extent permitted
under applicable Law, the individuals who on or prior to the Closing Date were
directors, officers or employees of the Company or any of its Subsidiaries
(collectively, the "Indemnitees") with respect to all acts or omissions by them
in their capacities as such or taken at the request of the Company or any of its
Subsidiaries at any time prior to the Closing Date. Purchaser agrees that all
rights of the Indemnitees to indemnification and exculpation from liabilities
for acts or omissions occurring at or prior to the Closing Date as provided in
the respective organizational documents of the Company or any of its
Subsidiaries as now in effect, and any indemnification agreements or
arrangements of the Company or any of its Subsidiaries shall survive the Closing
Date and shall continue in full force and effect in accordance with their terms.
Such rights shall not be amended, or otherwise modified in any manner that would
adversely affect the rights of the Indemnitees, unless such modification is
required by Law. In addition, Purchaser shall, or shall cause the Company to,
pay or reimburse any expenses of any Indemnitee under this Section 8.7, as
incurred to the fullest extent permitted under applicable Law, provided that the
person to whom expenses are advanced provides an undertaking to repay such
advances to the extent required by applicable Law.
(b) Purchaser, from and after the Closing Date, shall cause (i) the
organizational documents of the Company to contain provisions no less favorable
to the Indemnitees with respect to limitation of certain liabilities of
directors, officers, employees and agents and indemnification than are set forth
as of the date of this Agreement in the organizational documents of the Company
and (ii) the organizational documents of each Subsidiary of Purchaser to contain
the current provisions regarding indemnification of directors, officers,
employees and agents which provisions in each case shall not be amended,
repealed or otherwise modified in a manner that would adversely affect the
rights thereunder of the Indemnitees.
32
(c) The Indemnitee shall have the right (but not the obligation) to control
the defense of, including the investigation of, any litigation, claim or
proceeding (each, a "Claim") relating to any acts or omissions covered under
this Section 8.7 with counsel selected by the Indemnitee; provided, however,
that (i) Purchaser and the Company shall be permitted to participate in the
defense of such Claim at their own expense and (ii) Purchaser shall not be
liable for any settlement effected without its written consent, which consent
shall not be unreasonably withheld or delayed.
(d) In the event any Claim is asserted or made, any determination required
to be made with respect to whether an Indemnitee's conduct complies with the
standards set forth under applicable Law, the applicable organizational
documents of the Company, Purchaser or any of its Subsidiaries or any
indemnification agreements or arrangements of the Company, Purchaser or any of
its Subsidiaries, as the case may be, shall be made by independent legal counsel
selected by such Indemnitee.
(e) Each of Purchaser and the Indemnitee shall cooperate, and cause their
respective Affiliates to cooperate, in the defense of any Claim and shall
provide access to properties and individuals as reasonably requested and furnish
or cause to be furnished records, information and testimony, and attend such
conferences, discovery proceedings, hearings, trials or appeals, as may be
reasonably requested in connection therewith.
(f) The Surviving Corporation shall provide or maintain in effect for six
(6) years from the Effective Time, through the purchase of "run-off" coverage or
otherwise, directors' and officers' and corporate liability insurance covering
those individuals who are covered by the directors' and officers' and corporate
liability insurance policy or policies provided for directors and officers of
the Company and its Subsidiaries as of the date hereof (the "Existing Policy")
on terms (other than with respect to minimum aggregate limits of liability for
directors' and officers' and corporate liability insurance coverage) comparable
in all respects to the Existing Policy and such coverage shall contain minimum
aggregate limits of liability for directors' and officers' and corporate
liability insurance coverage for directors and officers of the Company and its
Subsidiaries with the amount of coverage at least equal to that of the Existing
Policy and deductibles no larger than those customary for such type of insurance
coverage.
(g) The provisions of this Section 8.7: (i) are intended to be for the
benefit of, and shall be enforceable by, each Indemnitee, his or her heirs and
his or her representatives; and (ii) are in addition to, and not in substitution
for, any other rights to indemnification or contribution that any such person
may have by Contract or otherwise.
(h) In the event that Purchaser, the Company or any of their respective
successors or assigns (i) consolidates with or merges into any other Person and
is not the continuing or surviving corporation or entity of such consolidation
or merger; or (ii) transfers or conveys all or substantially all of its
properties and assets to any Person, then, and in each such case, proper
provision shall be made so that the successors and assigns of Purchaser shall
assume all of the obligations thereof set forth in this Section 8.7.
(i) The obligations of Purchaser and the Company under this Section 8.7
shall not be terminated or modified in such a manner as to adversely affect any
Indemnitee to whom this Section 8.7 applies without the consent of the affected
33
Indemnitee (it being expressly agreed that the Indemnitees to whom this Section
8.7 applies shall be third party beneficiaries of this Section 8.7).
8.8 Preservation of Records. Purchaser shall, and shall cause the Company
to, preserve and keep the records held by them relating to the respective
businesses of the Company and its Subsidiaries for a period of seven (7) years
from the Closing Date (or longer if required by applicable Law) and shall make
such records and personnel available to the Seller as may be reasonably required
by the Seller in connection with, among other things, any insurance claims by,
Legal Proceedings or Tax audits against or governmental investigations of the
Seller or Purchaser or any of their Affiliates.
8.9 Publicity.
(a) None of the Seller, the Company or Purchaser shall issue any press
release or public announcement or comment concerning this Agreement or the
transactions contemplated hereby without obtaining the prior written approval of
the other party hereto, which approval will not be unreasonably withheld or
delayed, unless, in the judgment of the Seller, the Company or Purchaser,
disclosure is otherwise required by applicable Law or under the rules of any
securities exchange on which the securities of Purchaser are listed, provided
that, to the extent required by applicable Law, the party intending to make such
release shall use its commercially reasonable efforts consistent with applicable
Law to consult with the other party with respect to the text thereof.
(b) Each of Purchaser, the Company and the Seller agree that the terms of
this Agreement shall not be disclosed or otherwise made available to the public
and that copies of this Agreement shall not be publicly filed or otherwise made
available to the public, except where such disclosure, availability or filing is
required by applicable Law or under the rules of any securities exchange on
which the securities of Purchaser are listed and only to the extent required by
such Law or rules. In the event that such disclosure, availability or filing is
required by applicable Law, each of Purchaser, the Company and the Seller (as
applicable) agrees to use its commercially reasonable efforts to obtain
"confidential treatment" of this Agreement and to redact such terms of this
Agreement the other party shall request.
(c) Purchaser acknowledges that prior to the execution of this Agreement,
the Company and the Seller have been engaged in an auction process related to
the sale of the Company and the sale of Emergent Genetics, Inc. As a result of
the execution of this Agreement, the Company and the Seller have agreed that
during the period commencing on the date hereof and ending at 10:00 p.m. (New
York time) on February 18, 2005 (the "Standstill Period") not to (i) actively
pursue the current auction process or (ii) disclose the identity of the
Purchaser, the fact that this Agreement has been signed, or the amount of the
Purchase Price; provided, however, that nothing herein shall prevent the Company
or the Seller, during the Standstill Period, from having discussions with
participants in the current auction process that disclose the fact that the
Company has agreed to exclusivity with a third party. If the Purchaser Board
Approval is received on or prior to the end of the Standstill Period, the
Company and the Seller shall terminate the current auction process concurrent
with the press release announcing the transaction evidenced by this Agreement.
34
8.10 Use of Name. Purchaser agrees that it shall, and shall cause the Company
and its Subsidiaries to, (i) as soon as practicable after the Closing Date and
in any event within twelve (12) months following the Closing Date, cease to make
any use of the name "Emergent Genetics," or any service marks, trademarks, trade
names, identifying symbols, logos, emblems, signs or insignia related thereto or
containing or comprising the foregoing, including any name or xxxx confusingly
similar thereto (collectively, the "Subject Marks"), and (ii) immediately after
the Closing, cease to hold itself out as having any affiliation with the Seller
or any of its Affiliates. In furtherance thereof, as promptly as practicable but
in no event later than twelve months (12) months following the Closing Date,
Purchaser shall, and shall cause the Company and its Subsidiaries to, remove,
strike over or otherwise obliterate all Subject Marks from all materials
including any vehicles, business cards, schedules, stationery, packaging
materials, displays, signs, promotional materials, manuals, forms, computer
software and other materials.
8.11 Employment and Employee Benefits.
(a) Purchaser covenants and agrees to, and shall cause the Company to, (i)
for a period of one year following the Closing Date, provide compensation and
benefits to the employees of the Company and its Subsidiaries who remain
employed immediately prior to the Closing at levels which are similar, on an
overall basis, to the levels of compensation and benefits as in effect prior to
the Closing and (ii) provide severance compensation and benefits to any such
employees whose employment is terminated during the one-year period following
the Closing Date at levels at least equivalent to the levels of such
compensation and benefits to which such employees would have been entitled if
their employment had been terminated immediately prior to the Closing.
Individuals who continue their employment with the Company and its Subsidiaries
following the Closing Date are hereinafter referred to as the "Continuing
Employees."
(b) For purposes of eligibility and vesting (but not benefit accrual) under
the employee benefit plans of Purchaser or the Company providing benefits to
Continuing Employees (the "Purchaser Plans"), Purchaser and the Company shall
credit each Continuing Employee with his or her years of service with such
Company, its Subsidiaries and any predecessor entities, to the same extent as
such Continuing Employee was entitled immediately prior to the Closing to credit
for such service under any similar Company Benefit Plan. The Purchaser Plans
shall not deny Continuing Employees coverage on the basis of pre-existing
conditions and shall credit such Continuing Employees for any deductibles and
out-of-pocket expenses paid in the year of initial participation in the
Purchaser Plans.
8.12 Supplementation and Amendment of Schedules. From time to time prior to
the Closing, the Company shall have the right to supplement or amend the
Schedules with respect to any matter hereafter arising or discovered after the
delivery of the Schedules pursuant to this Agreement; provided, however, if the
Closing shall occur, then Purchaser shall be deemed to have waived any right or
claim pursuant to the terms of this Agreement or otherwise, with respect to any
and all matters disclosed pursuant to any such supplement or amendment at or
prior to the Closing.
8.13 Transition Services. Concurrently with the Closing, the Seller shall
cause Emergent Genetics, Inc. ("EGI") to enter into a transition services
agreement (the "India Transition Services Agreement"), with the Company,
35
pursuant to which EGI shall, or shall cause its Subsidiaries to, provide, at
cost, all functions and services that are provided to the Company and its
Subsidiaries by EGI as of the date hereof until the earlier of (i) a period of
one (1) year from the Closing Date or (ii) the closing of the transactions
contemplated by that certain Agreement and Plan of Merger, dated as of the date
hereof, by and among the Purchaser, EG Acquisition Co., EGI and the Seller.
8.14 Tax Election. The Purchaser will not permit the Company to make an
election under Section 338 of the U.S. Internal Revenue Code of 1986, as
amended, which would have an adverse effect on the Seller without the consent of
the Seller.
ARTICLE 9
CONDITIONS TO CLOSING
9.1 Conditions Precedent to Obligations of Purchaser. The obligation of
Purchaser to consummate the transactions contemplated by this Agreement is
subject to the fulfillment, on or prior to the Closing Date, of each of the
following conditions (any or all of which may be waived by Purchaser in whole or
in part to the extent permitted by applicable Law):
(a) (i) the representations and warranties of the Company and the Seller
set forth in this Agreement qualified as to materiality shall be true and
correct, and those not so qualified shall be true and correct in all material
respects, at and as of the Closing Date (without regard to any supplement or
amendment to the Schedules pursuant to Section 8.12) as though made on the
Closing Date, except to the extent such representations and warranties relate to
an earlier date (in which case such representations and warranties qualified as
to materiality shall be true and correct, and those not so qualified shall be
true and correct in all material respects, on and as of such earlier date
(without regard to any supplement or amendment to the Schedules pursuant to
Section 8.12)), in each case, except as in the aggregate would not have a
Material Adverse Effect, and (ii) Purchaser shall have received a certificate
signed by an authorized officer of each of the Company and the Seller, dated the
Closing Date, to the foregoing effect;
(b) each of the Company and the Seller shall have performed and complied in
all material respects with all covenants required by this Agreement to be
performed or complied with by them on or prior to the Closing Date, and
Purchaser shall have received a certificate signed by an authorized officer of
each of the Company and the Seller, dated the Closing Date, to the foregoing
effect;
(c) there shall not be in effect any Law or Order restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby;
(d) the Seller shall have delivered, or caused to be delivered, to
Purchaser stock certificates representing the Shares, duly endorsed in blank or
accompanied by duly stamped and executed stock transfer powers or instruments;
(e) Indian Foreign Investment Promotion Board approval shall have been
granted or obtained for the purchase of the Shares hereunder and any waiting
period applicable to the transactions contemplated by this Agreement under any
36
Law enforced by any Governmental Antitrust Entity regarding preacquisition
notifications for the purpose of competition reviews shall have expired or early
termination shall have been granted;
(f) all outstanding shares of any of the Company's Subsidiaries shall have
been acquired by the Seller and included in the Shares transferred to the
Purchaser on the Closing Date;
(g) Purchaser shall have received final payoff certificates with respect to
the Company Debt from the lender parties thereof (the "Payoff Certificates");
and
(h) there shall not have occurred any event, change, occurrence or
circumstance that has had or reasonably would be expected to have a Material
Adverse Effect.
9.2 Conditions Precedent to Obligations of the Seller. The obligations of
the Seller to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, prior to or on the Closing Date, of each of the
following conditions (any or all of which may be waived by the Seller in whole
or in part to the extent permitted by applicable Law):
(a) The representations and warranties of Purchaser set forth in this
Agreement qualified as to materiality shall be true and correct, and those not
so qualified shall be true and correct in all material respects, at and as of
the Closing Date as though made on the Closing Date, except to the extent such
representations and warranties relate to an earlier date (in which case such
representations and warranties qualified as to materiality shall be true and
correct, and those not so qualified shall be true and correct in all material
respects, on and as of such earlier date), and the Seller shall have received a
certificate signed by an authorized officer of Purchaser, dated the Closing
Date, to the foregoing effect;
(b) Purchaser shall have performed and complied in all material respects
with all covenants required by this Agreement to be performed or complied with
by Purchaser on or prior to the Closing Date, and the Seller shall have received
a certificate signed by an authorized officer of Purchaser, dated the Closing
Date, to the foregoing effect;
(c) there shall not be in effect any Law or Order restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby;
(d) Indian Foreign Investment Promotion Board approval shall have been
granted or obtained for the purchase of the Shares hereunder and any waiting
period applicable to the transactions contemplated by this Agreement under any
Law enforced by any Governmental Antitrust Entity regarding preacquisition
notifications for the purpose of competition reviews shall have expired or early
termination shall have been granted; and
(e) Purchaser shall have delivered, or caused to be delivered, to the
Seller evidence of the payment of the Purchase Price and evidence of payment of
funds to the lender parties set forth in the Payoff Certificates.
9.3 Frustration of Closing Conditions. Neither Purchaser nor the Seller may
rely on the failure of any condition set forth in Sections 9.1 or 9.2, as the
case may be, if such failure was caused by such party's failure to comply with
any provision of this Agreement.
37
ARTICLE 10
MISCELLANEOUS
10.1 Limitations of Representations, Warranties and Covenants. Except for
the representation set forth in Section 6.4 (which shall survive the Closing
Date), the representations and warranties of the parties made herein or in any
other agreement delivered pursuant to this Agreement shall terminate upon (and
shall not survive) the Closing Date.
10.2 Exclusive Remedies. Purchaser's sole and exclusive remedy (i) for a
breach of any representation or warranty made by the Company or the Seller
herein or in any document delivered pursuant hereto (other claim made after the
Closing Date based upon a breach of the representation set forth in Section
6.4), or (ii) for a breach of any covenant made by the Company or the Seller
herein or in any document delivered pursuant hereto and required to be performed
by the Company on or prior to the Closing Date, shall, in either case, be
limited to Purchaser's right to terminate this Agreement pursuant to and to the
extent permitted by (i) Section 4.1(a) as a result of Closing not having
occurred by the Outside Date due to such breach or (ii) Section 4.1(d); and
Purchaser hereby waives and releases the Company and the Seller from any and all
other claims or causes of action (whether by statute or in contract or tort)
that may be based upon, arise out of, or relate to such breaches. Purchaser's
sole and exclusive remedy for any claim made after the Closing Date based upon,
arising out of, or related to a breach of the representation made by the Seller
in Section 6.4, shall be limited to the recovery of the aggregate Purchase
Price, as adjusted, received by the Seller for the Shares as to which there is a
breach of Section 6.4.
10.3 No Consequential Damages. Notwithstanding anything to the contrary
elsewhere in this Agreement, no party shall, in any event, be liable to any
other Person for any tort, consequential, incidental, indirect, special or
punitive damages of such other Person, including loss of future revenue, income
or profits, diminution of value or loss of business reputation or opportunity
relating to the breach or alleged breach hereof (provided that such limitation
shall not limit the Company's right to recover contract damages in connection
with Purchaser's failure to close in violation of this Agreement).
10.4 Expenses. Except as otherwise provided in this Agreement, each of the
Company, the Seller and Purchaser shall bear its own expenses incurred in
connection with the negotiation and execution of this Agreement and each other
agreement, document and instrument contemplated by this Agreement and the
consummation of the transactions contemplated hereby and thereby ("Deal
Expenses"); provided, however, that the Seller shall bear the Company's Deal
Expenses related to financial advisors, legal advisors and independent
accountants to the extent not paid by the Company on or prior to Closing.
10.5 Entire Agreement; Amendments and Waivers. This Agreement (including
the schedules and exhibits hereto) and the Confidentiality Agreement represent
the entire understanding and agreement between the parties hereto with respect
to the subject matter hereof. This Agreement can be amended, supplemented or
changed, and any provision hereof can be waived, only by written instrument
making specific reference to this Agreement signed by the party against whom
enforcement of any such amendment, supplement, modification or waiver is sought.
No action taken pursuant to this Agreement, including any investigation by or on
38
behalf of any party, shall be deemed to constitute a waiver by the party taking
such action of compliance with any representation, warranty, covenant or
agreement contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent
breach. No failure on the part of any party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such party preclude any other or further exercise thereof or the exercise of
any other right, power or remedy.
10.6 Governing Law. This Agreement, and all claims or causes of action
(whether in contract or tort) that may be based upon, arise out of or relate to
this Agreement or the negotiation, execution or performance of this Agreement
(including any claim or cause of action based upon, arising out of or related to
any representation or warranty made in or in connection with this Agreement,
shall be governed by and construed in accordance with the internal Laws of the
State of New York. Any action against any party relating to the foregoing shall
be brought in any federal or state court of competent jurisdiction located
within the State of New York, and the parties hereto hereby irrevocably submit
to the non-exclusive jurisdiction of any federal or state court located within
the State of New York over any such action. The parties hereby irrevocably
waive, to the fullest extent permitted by applicable Law, any objection which
they may now or hereafter have to the laying of venue of any such action brought
in such court or any defense of inconvenient forum for the maintenance of such
action.
10.7 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given (i) when delivered personally by
hand (with written confirmation of receipt), (ii) when sent by facsimile (with
written confirmation of transmission) or (iii) one Business Day following the
day sent by overnight courier (with written confirmation of receipt), in each
case at the following addresses and facsimile numbers (or to such other address
or facsimile number as a party may have specified by notice given to the other
party pursuant to this provision):
If to the Seller or the Company, to:
International Seed Holdings, L.P.
c/o Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxx
and
Emergent Genetics, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: X. X. Xxxxxx, Xx.
With a copy to:
39
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esq.
If to Purchaser, to:
Monsanto Company
000 X. Xxxxxxxxx Xxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel's Office
With a copy to:
Xxxxx Xxxx LLP
One Metropolitan Square
000 X. Xxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. XxXxxxxx
10.8 Severability. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any Law or public policy,
all other terms or provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal, or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
10.9 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. Nothing in this Agreement shall create or be deemed to create
any third party beneficiary rights in any Person not a party to this Agreement
except as contemplated by Section 8.7 and Section 10.10. No assignment of this
Agreement or of any rights or obligations hereunder may be made by any of the
Company, the Seller or Purchaser, directly or indirectly (by operation of law or
otherwise), without the prior written consent of the other parties hereto and
any attempted assignment without the required consents shall be void, except
that Purchaser may, at its option, assign this Agreement to a direct or indirect
wholly-owned subsidiary or controlled Affiliate of the Purchaser. No assignment
of any obligations hereunder shall relieve the parties hereto of any such
obligations. Upon any such permitted assignment, the references in this
Agreement to Purchaser shall also apply to any such assignee unless the context
otherwise requires.
10.10 Non-Recourse. This Agreement may only be enforced against, and any
claim or clause of action based upon, arising out of, or related to this
40
Agreement may only be brought against the entities that are expressly named as
parties hereto and then only with respect to the specific obligations set forth
herein with respect to such party. Except to the extent a named party to this
Agreement (and then only to the extent of the specific obligations undertaken by
such named party in this Agreement and not otherwise), no past, present or
future director, officer, employee, incorporator, member, partner, stockholder,
Affiliate, agent, attorney or representative of any party hereto shall have any
liability for any obligations or liabilities of any party hereto under this
Agreement or for any claim based on, in respect of, or by reason of, the
transactions contemplated hereby and thereby.
10.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
** REMAINDER OF PAGE INTENTIONALLY LEFT BLANK **
41
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first written above.
PURCHASER:
MONSANTO COMPANY
By: /s/ XXXX XXXXX
---------------------------------------------
Name: Xxxx Xxxxx
Title: President and Chief
Executive Officer
COMPANY:
EMERGENT GENETICS INDIA LTD.
By: /s/ XXX XXXXXX
----------------------------------------------
Name: Xxx Xxxxxx
Title: Director
SELLER:
INTERNATIONAL SEED HOLDINGS, L.P.
By: Seed Cayman L.L.C., its general partner
By: /s/ XXXXX XXXXXX
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Name: Xxxxx Xxxxxx
Title: Vice President
