Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
among
EMPRESAS LA MODERNA, S.A. de C.V.
BIONOVA, S.A. de C.V.
BIONOVA U.S. INC.
BIONOVA ACQUISITION, INC.
and
DNA PLANT TECHNOLOGY CORPORATION
January 26, 1996
TABLE OF CONTENTS
Page
AGREEMENT AND PLAN OF MERGER . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I THE MERGER AND RELATED TRANSACTIONS. . . . . . . . . . . . . . 2
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Effective Time of the Merger . . . . . . . . . . . . . . . . . 2
1.3 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Effects of the Merger. . . . . . . . . . . . . . . . . . . . . 2
1.5 Certificate of Incorporation . . . . . . . . . . . . . . . . . 2
1.6 Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.7 Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8 Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 Name Change. . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.10 Directors of the Surviving Corporation . . . . . . . . . . . . 3
1.11 Capitalization of Bionova U.S. and Surviving Corporation . . . 4
ARTICLE II CONVERSION OF SECURITIES; ASSUMPTION OF OPTIONS AND WARRANTS
2.1 Conversion of Securities . . . . . . . . . . . . . . . . . . . 5
2.2 Dissenting Shares. . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Exchange of Certificates . . . . . . . . . . . . . . . . . . . 6
2.4 Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.5 Stock Options. . . . . . . . . . . . . . . . . . . . . . . . . 9
2.6 Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING THE
COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . 10
3.2 Qualification. . . . . . . . . . . . . . . . . . . . . . . . . 10
3.3 Charter and Bylaws . . . . . . . . . . . . . . . . . . . . . . 11
3.4 Capitalization of the Company. . . . . . . . . . . . . . . . . 11
3.5 Authority Relative to This Agreement . . . . . . . . . . . . . 12
3.6 Noncontravention . . . . . . . . . . . . . . . . . . . . . . . 12
3.7 Governmental Approvals . . . . . . . . . . . . . . . . . . . . 12
3.8 Company Subsidiaries . . . . . . . . . . . . . . . . . . . . . 13
3.9 Inapplicability of Section 203 . . . . . . . . . . . . . . . . 14
3.10 SEC Filings. . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.11 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . 14
3.12 Absence of Certain Changes . . . . . . . . . . . . . . . . . . 15
3.13 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.14 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . 15
3.15 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 16
3.16 Title to Properties. . . . . . . . . . . . . . . . . . . . . . 16
3.17 Sufficiency and Condition of Properties. . . . . . . . . . . . 16
3.18 Intellectual Property. . . . . . . . . . . . . . . . . . . . . 17
3.19 Permits. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.20 Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.21 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.22 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 23
3.23 Labor Relations. . . . . . . . . . . . . . . . . . . . . . . . 25
3.24 Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.25 Confidentiality Matters. . . . . . . . . . . . . . . . . . . . 26
3.26 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.27 Insider Interests. . . . . . . . . . . . . . . . . . . . . . . 26
3.28 Offerings of Securities. . . . . . . . . . . . . . . . . . . . 27
3.29 Brokerage Fees . . . . . . . . . . . . . . . . . . . . . . . . 27
3.30 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.31 Disclosure Documents . . . . . . . . . . . . . . . . . . . . . 27
3.32 Representations and Warranties on Closing Date . . . . . . . . 28
3.33 Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING PARENT,
BIONOVA MEXICO, BIONOVA U.S. AND SUB . . . . . . . . . . . . . 28
4.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . 28
4.2 Qualification. . . . . . . . . . . . . . . . . . . . . . . . . 29
4.3 Charter and Bylaws . . . . . . . . . . . . . . . . . . . . . . 29
4.4 Authority Relative to This Agreement . . . . . . . . . . . . . 29
4.5 Noncontravention . . . . . . . . . . . . . . . . . . . . . . . 30
4.6 Governmental Approvals . . . . . . . . . . . . . . . . . . . . 30
4.7 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 31
4.8 Brokerage Fees . . . . . . . . . . . . . . . . . . . . . . . . 31
4.9 Stock Ownership of Bionova Mexico, Bionova U.S. and Sub. . . . 31
4.10 Parent Securities Filings. . . . . . . . . . . . . . . . . . . 32
4.11 Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE V REPRESENTATIONS AND WARRANTIES
REGARDING THE BIONOVA GROUP. . . . . . . . . . . . . . . . . . 33
5.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . 33
5.2 Qualification. . . . . . . . . . . . . . . . . . . . . . . . . 33
5.3 Charter and Bylaws . . . . . . . . . . . . . . . . . . . . . . 33
5.4 Capitalization of the Bionova Group. . . . . . . . . . . . . . 33
5.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . 34
5.6 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . 34
5.7 Absence of Certain Changes . . . . . . . . . . . . . . . . . . 35
5.8 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.9 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . 36
5.10 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 36
5.11 Title to Properties. . . . . . . . . . . . . . . . . . . . . . 36
5.12 Sufficiency and Condition of Properties. . . . . . . . . . . . 37
5.13 Intellectual Property. . . . . . . . . . . . . . . . . . . . . 37
5.14 Permits. . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.15 Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.16 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.17 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 42
5.18 Labor Relations. . . . . . . . . . . . . . . . . . . . . . . . 43
5.19 Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.20 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.21 Insider Interests. . . . . . . . . . . . . . . . . . . . . . . 44
5.22 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.23 Disclosure Documents . . . . . . . . . . . . . . . . . . . . . 45
5.24 Representations and Warranties on Closing Date . . . . . . . . 45
5.25 Confidentiality Matters. . . . . . . . . . . . . . . . . . . . 46
5.26 Offerings of Securities. . . . . . . . . . . . . . . . . . . . 46
5.27 Customers and Suppliers. . . . . . . . . . . . . . . . . . . . 46
5.28 No Prior Activities. . . . . . . . . . . . . . . . . . . . . . 46
5.29 Holding Company. . . . . . . . . . . . . . . . . . . . . . . . 46
5.30 Arm's Length Contracts . . . . . . . . . . . . . . . . . . . . 46
5.31 Real Property. . . . . . . . . . . . . . . . . . . . . . . . . 47
5.32 Leased Property. . . . . . . . . . . . . . . . . . . . . . . . 47
5.33 Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.34 Bionova U.S. Common Stock. . . . . . . . . . . . . . . . . . . 48
5.35 Capital Contribution . . . . . . . . . . . . . . . . . . . . . 48
5.36 Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE VI CONDUCT OF PARTIES PENDING CLOSING . . . . . . . . . . . . . 48
6.1 Conduct and Preservation of Business . . . . . . . . . . . . . 48
6.2 Restrictions on Certain Actions. . . . . . . . . . . . . . . . 48
ARTICLE VII ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . 51
7.1 Access to Information; Confidentiality . . . . . . . . . . . . 51
7.2 Acquisition Proposals. . . . . . . . . . . . . . . . . . . . . 52
7.3 Special Meeting; Proxy Statement . . . . . . . . . . . . . . . 52
7.4 Proxy Statement/Registration Statement . . . . . . . . . . . . 53
7.5 Reasonable Best Efforts. . . . . . . . . . . . . . . . . . . . 54
7.6 HSR Act Notification . . . . . . . . . . . . . . . . . . . . . 54
7.7 Public Announcements . . . . . . . . . . . . . . . . . . . . . 54
7.8 Delivery and Amendment of Schedules. . . . . . . . . . . . . . 55
7.9 Delivery of 1995 Audited Financial Statements. . . . . . . . . 55
7.10 Notice of Litigation . . . . . . . . . . . . . . . . . . . . . 56
7.11 Notification of Certain Matters. . . . . . . . . . . . . . . . 56
7.12 Bionova U.S. Standstill. . . . . . . . . . . . . . . . . . . . 56
7.13 Indemnification and Insurance. . . . . . . . . . . . . . . . . 57
7.14 Limited Guaranty of Parent . . . . . . . . . . . . . . . . . . 57
7.15 Governing Documents. . . . . . . . . . . . . . . . . . . . . . 58
7.16 Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . 58
7.17 Bionova U.S. Organizational Documents. . . . . . . . . . . . . 58
7.18 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE VIII CONDITIONS TO OBLIGATIONS OF THE PARTIES . . . . . . . . . 58
8.1 HSR Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.2 Stockholder Approval . . . . . . . . . . . . . . . . . . . . . 58
8.3 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 59
8.4 Registration Statement . . . . . . . . . . . . . . . . . . . . 59
8.5 Bionova U.S. Common Stock. . . . . . . . . . . . . . . . . . . 59
ARTICLE IX CONDITIONS TO OBLIGATIONS OF THE COMPANY . . . . . . . . . . 59
9.1 Representations and Warranties True. . . . . . . . . . . . . . 59
9.2 Covenants and Agreements Performed . . . . . . . . . . . . . . 59
9.3 Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.4 Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . 60
9.5 Legal Opinion. . . . . . . . . . . . . . . . . . . . . . . . . 60
9.6 No Material Adverse Change . . . . . . . . . . . . . . . . . . 60
9.7 Phase I Environmental. . . . . . . . . . . . . . . . . . . . . 60
9.8 Governance Agreement . . . . . . . . . . . . . . . . . . . . . 60
9.9 Long-Term Funded Research Agreement. . . . . . . . . . . . . . 60
9.10 Severance Agreements . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE X CONDITIONS TO OBLIGATIONS OF PARENT,
BIONOVA MEXICO, BIONOVA U.S. AND SUB . . . . . . . . . . . . 61
10.1 Representations and Warranties True. . . . . . . . . . . . . . 61
10.2 Covenants and Agreements Performed . . . . . . . . . . . . . . 61
10.3 Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.4 Legal Opinion. . . . . . . . . . . . . . . . . . . . . . . . . 61
10.5 No Material Adverse Change . . . . . . . . . . . . . . . . . . 61
10.6 Preemptive Rights. . . . . . . . . . . . . . . . . . . . . . . 61
10.7 Phase I Environmental. . . . . . . . . . . . . . . . . . . . . 61
10.8 Authorized Shares. . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE XI TERMINATION, AMENDMENT, AND WAIVER . . . . . . . . . . . . . 62
11.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 62
11.2 Effect of Termination. . . . . . . . . . . . . . . . . . . . . 63
11.3 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
11.4 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . 65
11.5 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE XII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 66
12.1 Nonsurvival of Representations, Warranties, and Agreements . . 66
12.2 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 66
12.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
12.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 69
12.5 Binding Effect; Assignment; No Third Party Benefit . . . . . . 69
12.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 69
12.7 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . 69
12.8 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 69
12.9 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . 70
12.10 Gender. . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.11 References. . . . . . . . . . . . . . . . . . . . . . . . 70
12.12 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 70
12.13 Assignment. . . . . . . . . . . . . . . . . . . . . . . . 70
12.14 Confidentiality Agreement and Standstill. . . . . . . . . 70
ARTICLE XIII DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 71
13.1 Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . 71
13.2 Certain Additional Defined Terms . . . . . . . . . . . . . . . 74
13.3 Construction . . . . . . . . . . . . . . . . . . . . . . . . . 75
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of January 26,
1996, among Empresas La Moderna, S.A. de C.V., a corporation organized under
the laws of the United Mexican States ("Parent"), Bionova, S.A. de C.V., a
corporation organized under the laws of the United Mexican States and a wholly
owned subsidiary of Parent (except for four shares thereof owned by affiliates
of Parent) ("Bionova Mexico"), Bionova U.S. Inc., a Delaware corporation and
a wholly owned subsidiary of Bionova Mexico ("Bionova U.S."), Bionova
Acquisition, Inc., a Delaware corporation and a wholly owned subsidiary of
Bionova U.S. ("Sub"), and DNA Plant Technology Corporation, a Delaware
corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Bionova Mexico, Bionova
U.S., Sub and the Company have determined that the transactions contemplated
hereby are desirable and in the best interests of those entities and their
respective stockholders; and
WHEREAS, the respective Boards of Directors of Bionova U.S., Sub and the
Company, and Bionova U.S., acting as the sole stockholder of Sub, have
approved the Merger of Sub with and into the Company in a transaction in which
the Company will be the surviving entity and will become a wholly-owned
subsidiary of Bionova U.S. and the stockholders of the Company will become
stockholders of Bionova U.S., all upon the terms and subject to the conditions
set forth herein; and
WHEREAS, the Board of Directors of the Company has resolved to recommend
that stockholders of the Company approve this Agreement and the Merger; and
WHEREAS, on the Closing Date, Parent shall cause to be transferred to
Bionova U.S. all of the capital stock then owned by Parent or affiliates
thereof in International Produce Holding Company, a Delaware corporation
("IPHC"), and Agricola Xxxxx, X.X. de C.V., a corporation organized under the
laws of the United Mexican States ("ABSA"), as provided in Section 1.11(c);
and
WHEREAS, the Non-Exclusive Patent License Agreement and the Loan
Agreement have been executed and delivered as of the date hereof; and
WHEREAS, the parties intend that the Merger qualify for accounting
treatment as a purchase; and
WHEREAS, the parties intend that the Merger shall constitute for United
States federal income tax purposes a tax-free reorganization under the
Internal Revenue Code of 1986, as amended, and that this Agreement, as it
relates to the Merger, shall constitute a "plan of reorganization" within the
meaning thereof; and
WHEREAS, the parties desire to set forth certain representations,
warranties and covenants made by each to the other as an inducement to the
consummation of the Merger; and
WHEREAS, certain terms which are used herein shall have the respective
meanings ascribed to such terms in Article XIII;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Bionova Mexico, Bionova U.S., Sub and the Company hereby agree
as follows:
ARTICLE I
THE MERGER AND RELATED TRANSACTIONS
1.1 The Merger. At the Effective Time, and on the terms and subject
to the conditions set forth in this Agreement, Sub shall be merged with and
into the Company (the "Merger"), the Company shall continue its corporate
existence under the General Corporation Law of the State of Delaware ("State
Law") as the surviving corporation in the Merger (the "Surviving
Corporation"), and the separate corporate existence of Sub shall cease.
1.2 Effective Time of the Merger. At the Closing, the parties hereto
will cause the Merger to be consummated by filing with the Secretary of State
of Delaware a certificate of merger in such form as required by, and executed
in accordance with, the relevant provisions of State Law. The Merger shall
become effective at such time as the certificate of merger is duly filed with
the Secretary of State of Delaware (the "Effective Time").
1.3 Closing. The closing of the Merger (the "Closing") shall take
place (i) at the offices of Xxxxxxxx & Knight, 0000 Xxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000, as soon as practicable after the satisfaction or,
if permissible, waiver of the conditions to the obligations of the parties set
forth in Articles VIII, IX and X or (ii) at such other time or place or on
such other date as the parties hereto shall agree, provided that the closing
conditions set forth in Articles VIII, IX and X have been satisfied or waived
at or prior to such other time and date. The date on which the Closing occurs
is herein referred to as the "Closing Date". All Closing transactions shall
be deemed to have occurred simultaneously.
1.4 Effects of the Merger. The Merger shall have the effects set
forth in the applicable provisions of State Law. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all
the properties, rights, privileges, powers, and franchises of the Company and
Sub shall vest in the Surviving Corporation, without any transfer or
assignment having occurred, and all debts, liabilities, and duties of the
Company and Sub shall become the debts, liabilities, and duties of the
Surviving Corporation.
1.5 Certificate of Incorporation. The Certificate of Incorporation of
the Company, as in effect immediately prior to the Effective Time, shall be
the Certificate of Incorporation of the Surviving Corporation, until
thereafter amended in accordance with its terms and as provided by State Law.
1.6 Bylaws. The Bylaws of the Company, as in effect immediately prior
to the Effective Time, shall be the Bylaws of the Surviving Corporation, until
thereafter amended in accordance with its terms and as provided by State Law.
1.7 Directors. The initial directors of Bionova U.S. following the
Effective Time shall be as set forth in Schedule 1.7, each to hold office in
accordance with the Certificate of Incorporation and Bylaws of Bionova U.S.
and until his successor is duly elected and qualified in accordance with State
Law or until his earlier death, resignation, or removal. Not later than the
date on which the Company first transmits its preliminary Proxy Statement to
the Securities and Exchange Commission as provided in Section 7.4, letters
from each of those persons identified in Schedule 1.7 shall have been obtained
pursuant to which they shall consent to their designation as such directors;
provided that if any such person shall not have consented to serve as a
director by that date, then a substitute therefor shall be appointed in a
manner consistent with the applicable terms of the Governance Agreement.
1.8 Officers. The initial officers of Bionova U.S. following the
Effective Time shall be identified by Bionova U.S. not later than the date on
which the Company first transmits its preliminary Proxy Statement to the
Securities and Exchange Commission as provided in Section 7.4. Each such
officer shall hold office in accordance with the Certificate of Incorporation
and Bylaws of Bionova U.S. and until his successor is duly elected and
qualified in accordance with State Law or until his earlier death,
resignation, or removal.
1.9 Name Change. Prior to or on the Closing Date, the Certificate of
Incorporation of Bionova U.S. shall be amended to change the name of Bionova
U.S. to "DNAP Holding Corporation."
1.10 Directors of the Surviving Corporation. Prior to or on the
Closing Date, the then existing directors of the Company and each Company
Subsidiary shall have submitted their resignations from such positions. On
the Closing Date, Bionova U.S., then acting as the sole stockholder of the
Surviving Corporation, and the Surviving Corporation, then acting as the sole
stockholder of each Company Subsidiary, shall cause to be elected as directors
of each of the Surviving Corporation and each Company Subsidiary, as the case
may be, the persons listed on Schedule 1.10. Such persons shall hold office
in accordance with the Certificate of Incorporation and Bylaws of the
Surviving Corporation and each Company Subsidiary, as the case may be, and
until his successor is duly elected and qualified in accordance with State Law
or until his earlier death, resignation, or removal. Not later than the date
on which the Company first transmits its preliminary Proxy Statement to the
Securities and Exchange Commission as provided in Section 7.4, letters from
each of those persons identified in Schedule 1.10 shall have been obtained
pursuant to which they shall consent to their designation as such directors;
provided that if any such person shall not have consented to serve as a
director by that date, then a substitute therefor shall be appointed by
Parent.
1.11 Capitalization of Bionova U.S. and Surviving Corporation.
(a) Concurrent with the execution and delivery of this
Agreement, Bionova U.S. and the Company have entered into the Loan
Agreement and Bionova U.S. has loaned the sum of $5 million to the
Company as provided in Section 2.01(i) of the Loan Agreement. Subject
to the terms of the Loan Agreement, on the date specified in Section
2.01(ii) of the Loan Agreement, Bionova U.S. shall, and Parent shall
cause Bionova U.S. to, loan the additional sum of $5 million to the
Company as provided therein. In each such case, Parent or affiliates
thereof will have provided such funds to Bionova U.S. and such funds
will have been provided to Bionova U.S. from sources other than the
members of the Bionova Group.
(b) On the Closing Date, Parent shall cause to be transferred to
Bionova U.S. free and clear of all Encumbrances all of the capital stock
then owned by Parent or affiliates thereof in IPHC and ABSA, which
entities shall then own, directly or indirectly, all of the issued and
outstanding capital stock of each other member of the Bionova Group
(except for Bionova Mexico, except to the extent specified in Schedule
5.4 and except for dormant members of the Bionova Group which do not
have material operations or assets). At such time, such transferred
businesses shall represent all of the assets and earning power indicated
in the Bionova Group Financial Statements delivered pursuant to Section
5.5 (except for immaterial variations resulting from the ordinary course
of business).
(c) On the Closing Date, Parent shall cause the $10 million
provided to Bionova U.S. referenced in Section 1.11(a) to be deemed a
contribution to the capital of Bionova U.S. Under such circumstances,
any related accounting entries previously recorded by any of Parent or
its affiliates or by Bionova U.S., as the case may be, shall be
appropriately modified to reflect such capital contribution, and any
conflicting written arrangements shall be deemed cancelled and of no
further force and effect.
(d) In consideration of the transactions specified in Section
1.11(b) and Section 1.11(c), on the Closing Date Bionova U.S. shall
issue to Bionova Mexico such number of shares of Bionova U.S. Common
Stock as shall represent (when added to the 25,000 shares of Bionova
U.S. Common Stock owned by Bionova Mexico as of the date of this
Agreement) 70% (assuming that the holder of any Dissenting Shares does
not exercise its appraisal rights under State Law) of the issued and
outstanding shares thereof as of the Effective Time of the Merger. Such
shares shall be fully paid and nonassessable shares of Bionova U.S.
Common Stock. At the Effective Time, all other issued and outstanding
shares of Bionova U.S. Common Stock shall be represented by the shares
thereof issued pursuant to Sections 2.1(a), (b) and (c).
ARTICLE II
CONVERSION OF SECURITIES; ASSUMPTION OF OPTIONS AND WARRANTS
2.1 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of Parent, Bionova U.S., Sub, the
Company or any holder of any of the following securities, the following events
will transpire:
(a) Each then outstanding share of Common Stock, par value $0.01
per share, of the Company ("Company Common Stock") (other than the
shares of Company Common Stock referred to in Section 2.1(d)) shall be
converted into the right to receive one fully paid and nonassessable
share of Common Stock, par value $0.01 per share, of Bionova U.S.
("Bionova U.S. Common Stock"), provided, however, that no fractional
shares of Bionova U.S. Common Stock shall be issued, and, in lieu
thereof, a cash payment shall be made in accordance with Section 2.3(d).
All such shares, when so converted, shall no longer be outstanding and
shall automatically be cancelled and retired and shall cease to exist,
and each holder of a certificate representing any such shares shall
cease to have any rights with respect thereto, except the right to
receive shares of Bionova U.S. Common Stock and any cash in lieu of
fractional shares as hereinafter provided.
(b) Each then outstanding share of $2.25 Convertible
Exchangeable Preferred Stock, par value $0.01 per share, of the Company
("Company Convertible Exchangeable Preferred Stock") (other than the
shares of such stock referred to in Section 2.1(d)) shall be converted
into the right to receive 6.8375 fully paid and nonassessable shares of
Bionova U.S. Common Stock, provided, however, that no fractional shares
of Bionova U.S. Common Stock shall be issued, and, in lieu thereof, a
cash payment shall be made in accordance with Section 2.3(d). All such
shares, when so converted, shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and
each holder of a certificate representing any such shares shall cease to
have any rights with respect thereto, except the right to receive shares
of Bionova U.S. Common Stock and any cash in lieu of fractional shares
as hereinafter provided.
(c) Each then outstanding share of Series A Convertible
Preferred Stock, par value $0.01 per share, of the Company ("Company
Series A Preferred Stock") (other than (i) the shares of such stock
referred to in Section 2.1(d) and (ii) Dissenting Shares) shall be
converted into the right to receive 1,000 fully paid and non assessable
shares of Bionova U.S. Common Stock, provided, however, that no
fractional shares of Bionova U.S. Common Stock shall be issued, and, in
lieu thereof, a cash payment shall be made in accordance with Section
2.3(d). All such shares, when so converted, shall no longer be
outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each holder of a certificate representing any such
shares shall cease to have any rights with respect thereto, except the
right to receive shares of Bionova U.S. Common Stock and any cash in
lieu of fractional shares or any amount paid in respect to appraisal
rights, if any, as hereinafter provided.
(d) Each share of Company Common Stock, Company Convertible
Exchangeable Preferred Stock and Company Series A Preferred Stock
(collectively "Company Stock") then held in the treasury of the Company
or by any of the Company Subsidiaries shall be cancelled and
extinguished without any conversion thereof and no payment shall be made
with respect thereto.
(e) Each then outstanding share of Common Stock, par value $.01
per share, of Sub shall be converted into and become one fully paid and
nonassessable share of Company Common Stock.
(f) All then outstanding options and warrants to purchase
Company Common Stock will be assumed by Bionova U.S. in accordance with
Sections 2.5 and 2.6.
The consideration to be paid or delivered to each holder of Company
Stock pursuant to any of Sections 2.1(a), (b) and (c) is herein referred to as
the "Merger Consideration."
2.2 Dissenting Shares. Notwithstanding anything in this Agreement to
the contrary, if the holder of shares of Company Series A Preferred Stock has
demanded appraisal of such shares in accordance with State Law, and if State
Law provides for appraisal rights for such shares in the Merger ("Dissenting
Shares"), then such holder shall be entitled to appraisal rights for his
Dissenting Shares in accordance with the provisions of State Law; provided
that such holder properly perfects his right to appraisal of his Dissenting
Shares under State Law. The Company shall give Bionova U.S. prompt notice of
any demands received by the Company for appraisal of shares, and Bionova U.S.
shall have the right to participate in all negotiations and proceedings with
respect to such demands. The Company shall not, except with the prior written
consent of Bionova U.S., make or agree to make any payment with respect to, or
settle or offer to settle, any such demands.
2.3 Exchange of Certificates.
(a) Pursuant to an agreement, to be entered into on or before
the Closing Date among Bionova U.S., the Company, and such designee,
Bionova U.S. shall designate a bank or trust company reasonably
acceptable to the Company to act as exchange agent in the Merger (the
"Exchange Agent") for purposes of effecting the exchange for the Merger
Consideration of certificates that, immediately prior to the Effective
Time, represented shares of Company Stock entitled to receive the Merger
Consideration pursuant to Section 2.1 ("Certificates"). Upon the
surrender to the Exchange Agent of each Certificate, together with the
letter of transmittal contemplated by Section 2.3(f) duly completed and
executed, the Exchange Agent shall pay the holder of such Certificate
the applicable Merger Consideration in exchange therefor, and such
Certificate shall forthwith be cancelled. Until so surrendered and
exchanged, each such Certificate shall represent solely the right to
receive the applicable Merger Consideration and any amounts to which the
holder thereof is entitled pursuant to Sections 2.3(c) and (d). No
interest shall be paid or accrue on the Merger Consideration. If the
Merger Consideration (or any portion thereof) is to be delivered to any
person other than the person in whose name the Certificate surrendered
in exchange therefor is registered, it shall be a condition to such
exchange that (i) the Certificate so surrendered shall be properly
endorsed or otherwise be in proper form for transfer and (ii) the person
requesting such exchange shall pay to the Exchange Agent any transfer or
other Taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the
Certificate surrendered or establish to the satisfaction of the Exchange
Agent that such Tax has been paid or is not applicable. Bionova U.S.
may impose such other reasonable conditions upon the exchange of
Certificates as it may deem necessary or desirable and as are consistent
with the provisions of this Agreement. Bionova U.S. Common Stock into
which Company Stock shall be converted pursuant to this Agreement and
the Merger shall be deemed to have been issued at the Effective Time;
provided, however, that, subject to Applicable Law, no holder of an
unsurrendered Certificate shall be entitled, until the surrender of such
Certificate, to vote the shares of Bionova U.S. Common Stock into which
his or her Company Stock shall have been converted.
(b) At or immediately prior to the Effective Time, Bionova U.S.
shall deposit, or cause to be deposited, in trust with the Exchange
Agent stock certificates representing the aggregate stock Merger
Consideration to which holders of shares of Company Stock shall be
entitled at the Effective Time pursuant to Section 2.1 (the "Payment
Fund"). The Exchange Agent shall, pursuant to irrevocable instructions,
make the payments or deliveries referred to in Section 2.3(a) out of the
Payment Fund. The Payment Fund shall not be used for any other purpose
except as expressly provided in this Agreement.
(c) Unless and until a Certificate is surrendered, dividends
payable to the holders of record of Bionova U.S. Common Stock shall not
be paid to the holder of such Certificate in respect of the Bionova U.S.
Common Stock represented thereby, but, subject to applicable abandoned
property, escheat, and similar laws, there shall be paid to the holder
thereof (i) upon surrender of such Certificate, the amount of any
dividends, the record date for the determination of the holders entitled
to which shall be after the Effective Time, which theretofore shall have
become payable with respect to the whole shares of Bionova U.S. Common
Stock represented by such Certificate and issued in exchange upon its
surrender, but without interest on such dividends, and (ii) after
surrender of such Certificate, the amount of any dividends with respect
to such whole shares of Bionova U.S. Common Stock, the record date for
the determination of the holders entitled to which shall be after the
Effective Time but prior to the surrender of such Certificate, and the
payment date of which shall be subsequent to such surrender, such amount
to be paid on such payment date.
(d) No certificates or scrip representing fractional shares of
Bionova U.S. Common Stock shall be issued upon the surrender for
exchange of any Certificate. In lieu of any such fractional share of
Bionova U.S. Common Stock, each holder of a Certificate whose aggregate
number of shares of Company Stock are not convertible into a whole
number of shares of Bionova U.S. Common Stock shall be entitled to
receive from the Exchange Agent, upon surrender of such holder's
Certificates for exchange as provided above, an amount of cash rounded
to the nearest cent (without interest) determined by multiplying such
fractional interest by the mean closing sales price of Bionova U.S.
Common Stock as reported on NASDAQ National Market System ("NASDAQ NMS")
for the ten trading days immediately following the fifth trading day
after the Closing Date. After the Closing Date, Bionova U.S. shall
deposit with the Exchange Agent, as and when required, cash sufficient
for the Exchange Agent to make payment of cash in lieu of fractional
shares in accordance with this Section 2.3(d). Notwithstanding the
foregoing, further rules and regulations concerning the settlement of
fractional shares otherwise issuable, not inconsistent with this
Agreement, may be adopted by Bionova U.S.
(e) Promptly following the date which is one year after the
Effective Time, the Exchange Agent shall deliver to Bionova U.S. all
cash, certificates, and other documents and instruments in its
possession relating to the transactions described in this Agreement, and
the Exchange Agent's duties shall terminate. Thereafter, each holder of
a Certificate may surrender such Certificate to Bionova U.S. and
(subject to applicable abandoned property, escheat, and similar laws)
receive in exchange therefor the applicable Merger Consideration and any
amounts to which such holder is entitled pursuant to Sections 2.3(c) and
(d), but such holder shall have no greater rights against Bionova U.S.
than may be accorded to general creditors of Bionova U.S. under
Applicable Law. Notwithstanding anything in this Agreement to the
contrary, neither the Exchange Agent nor any party hereto shall be
liable to a holder of shares of Company Stock for any cash or other
property delivered to a public official pursuant to applicable abandoned
property, escheat, or similar laws.
(f) Promptly after the Effective Time, the Exchange Agent shall
mail to each record holder of a Certificate a form of letter of
transmittal (which shall specify that delivery of a Certificate shall be
effected, and risk of loss and title to a Certificate shall pass, only
upon proper delivery of the Certificate to the Exchange Agent and shall
be in such form and contain such other provisions, reasonably acceptable
to the Company, as Bionova U.S. shall specify) and instructions for use
in surrendering such Certificate and receiving the applicable Merger
Consideration in exchange therefor.
(g) At the Effective Time, the stock transfer books of the
Company shall be closed and no transfers of Company Stock shall
thereafter be made. If, after the Effective Time, Certificates are
presented to the Surviving Corporation or the Exchange Agent, they shall
be cancelled and exchanged for the applicable Merger Consideration as
provided in Section 2.1, subject to State Law in the case of Dissenting
Shares.
(h) In the event any Certificate shall have been lost, stolen,
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen, or destroyed, Bionova U.S.
shall issue or cause to be issued in exchange for such lost, stolen, or
destroyed Certificate the Merger Consideration deliverable in respect
thereof as determined in accordance with Section 2.1. When authorizing
such issue of the Merger Consideration in exchange therefor, Bionova
U.S. may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed
Certificate to give Bionova U.S. a bond in such sum as it may direct as
indemnity against any claim that may be made against Bionova U.S. with
respect to the Certificate alleged to have been lost, stolen, or
destroyed.
(i) Bionova U.S. shall be entitled to deduct and withhold from
the Merger Consideration otherwise payable pursuant to this Agreement to
any holder of a Certificate such amounts as Bionova U.S. is required to
deduct and withhold with respect to the making of such payment under the
Code or any provision of state, local, or foreign tax law. To the
extent that amounts are so withheld by Bionova U.S., such withheld
amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the Certificate in respect of which such
deduction and withholding was made by Bionova U.S.
2.4 Adjustment. Subject to compliance with Section 6.2, in the event
of any stock split, combination, reclassification, recapitalization, exchange,
or stock dividend or distribution with respect to shares of Company Common
Stock or Bionova U.S. Common Stock (or if a record date with respect to any of
the foregoing should occur) during the period between the date of this
Agreement and the Effective Time, then the conversion rates set forth in
Section 2.1 shall be appropriately adjusted to reflect such stock split,
combination, reclassification, recapitalization, exchange, stock dividend, or
other distribution.
2.5 Stock Options.
(a) At the Effective Time, each then outstanding option
(including any option comprising a part of a unit) to purchase shares of
Company Common Stock (a "Company Stock Option") shall become an option
applicable to Bionova U.S., which Company Stock Option shall thereafter
constitute an option to acquire on the same terms, conditions and
vesting requirements as were applicable under the Company Stock Option,
the same number of shares of Bionova U.S. Common Stock as the holder of
such Company Stock Option would have been entitled to receive pursuant
to the Merger had such holder exercised such option in full immediately
prior to the Effective Time, at a price per share equal to (y) the
aggregate exercise price for the shares of Company Common Stock
otherwise purchasable pursuant to such Company Stock Option divided by
(z) the number of full shares of Bionova U.S. Common Stock deemed
purchasable pursuant to such option in accordance with the foregoing,
and Bionova U.S. agrees to issue such Bionova U.S. Common Stock upon any
such exercise; provided, however, that in the case of any Company Stock
Option to which Section 422 of the Code applies (incentive stock
options), the option price, the number of shares purchasable pursuant to
such option and the terms and conditions of exercise of such option
shall be determined in order to comply with Section 424(a) of the Code.
As soon as practicable after the Effective Time, Bionova U.S. shall
deliver to the participants in the Company's stock option plans
appropriate notice setting forth such participants' rights pursuant
thereto and the grants pursuant to those plans shall continue in effect
on the same terms and conditions (subject to the adjustments required by
this Section 2.5 after giving effect to the Merger), Bionova U.S. shall
ensure compliance with the terms of the stock option plans and Bionova
U.S. shall ensure, to the extent required by, and subject to the
provisions of, such plans and Applicable Laws, that the stock options
thereunder which qualified as incentive stock options prior to the
Effective Time continue to qualify as incentive stock options after the
Effective Time.
(b) Prior to the Effective Time, Bionova U.S. shall take all
corporate action necessary to reserve for issuance a sufficient number
of shares of Bionova U.S. Common Stock for delivery under the Company
Stock Options becoming options of Bionova U.S. in accordance with this
Section 2.5. If and to the extent required under the Securities Act, as
soon as practicable after the Effective Time, Bionova U.S. shall file a
registration statement on Form S-3 or Form S-8 as the case may be (or
any successor or other appropriate forms), or another appropriate form
with respect to the shares of Bionova U.S. Common Stock subject to such
options and shall use its best efforts to maintain the effectiveness of
such registration statement or registration statements (and maintain the
current status of the prospectus or prospectuses contained therein) for
so long as such options remain outstanding. With respect to those
individuals who subsequent to the Merger will be subject to the
reporting requirements under Section 16(a) of the Exchange Act, where
applicable, Bionova U.S. shall ensure administration of Company Stock
Options assumed pursuant to this Section 2.5 in a manner that complies
with Rule 16b-3 promulgated under the Exchange Act if and to the extent
the Company Option Plan complied with such rule prior to the Merger.
2.6 Warrants. At the Effective Time, each then outstanding warrant
(including any warrant comprising part of a unit) to purchase shares of
Company Common Stock shall become a warrant applicable to Bionova U.S., and
the registered holders thereof, after the Effective Time, will have the right
to acquire and receive in lieu of the shares of Company Common Stock
acquirable upon exercise of such warrants and upon payment of the
consideration required to be paid thereunder in connection with the exercise
thereof, such shares of Bionova U.S. Common Stock as would have been issued
pursuant to the Merger in exchange for the number of shares of Company Common
Stock acquirable if such warrants had been exercised immediately prior to the
Effective Time.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
The Company represents and warrants to Parent, Bionova Mexico, Bionova
U.S. and Sub that:
3.1 Corporate Organization. The Company is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
corporate authority to own, lease, and operate its properties and to carry on
its business as now being conducted. Other than as contemplated by this
Agreement, no actions or proceedings to dissolve the Company are pending or,
to the best knowledge of the Company, threatened.
3.2 Qualification. Each of the Company and the Company Subsidiaries
is duly qualified or licensed to do business as a foreign corporation and each
of the Company and the Company Subsidiaries is in good standing in each of the
jurisdictions set forth opposite its name on Schedule 3.2, which are all the
jurisdictions in which the property owned, leased, or operated by it or the
conduct of its business requires such qualification or licensing, except
jurisdictions in which the failure to be so qualified or licensed would not,
individually or in the aggregate, have a Company Material Adverse Effect.
3.3 Charter and Bylaws. The Company has delivered to Bionova U.S.
accurate and complete copies of (i) the charter and bylaws of each of the
Company and the Subsidiaries as currently in effect and (ii) the stock records
of each of the Subsidiaries. Such records accurately reflect the stock
ownership of the Subsidiaries. Neither the Company nor any Subsidiary is in
violation of any provision of its charter or bylaws.
3.4 Capitalization of the Company. The authorized capital stock of
the Company consists of 60,000,000 shares of Common Stock, par value $0.01 per
share, of which, as of the date hereof, 42,828,563 shares are outstanding and
held by persons or entities other than a Company Subsidiary, no shares are
outstanding and held by a Company Subsidiary and no shares are held in the
Company's treasury; 5,000,000 shares of Preferred Stock, par value $0.01 per
share, of which, as of the date hereof, 1,380,000 shares designated as $2.25
Convertible Exchangeable Preferred Stock are outstanding and held by persons
or entities other than a Company Subsidiary and no shares designated as such
are held by a Company Subsidiary, 2,750 shares designated as Series A
Convertible Preferred Stock are outstanding and held by persons or entities
other than a Company Subsidiary and no shares designated as such are held by a
Company Subsidiary, and no such shares of either such designation are held in
the Company's treasury. All outstanding shares of capital stock of the
Company have been validly issued and are fully paid and nonassessable, and no
shares of capital stock of the Company are subject to, nor have any been
issued in violation of, preemptive or similar rights. All issuances, sales,
and repurchases by the Company of shares of its capital stock have been
effected in compliance with all Applicable Laws, including without limitation
applicable federal and state securities laws. Schedule 3.4 describes all
outstanding options and warrants to purchase Company Stock, and the aggregate
number of shares of Company Common Stock reserved for issuance and issuable
upon the exercise of outstanding warrants and stock options. Except as set
forth above in this Section and on Schedule 3.4, there are (and as of the
Closing Date there will be) outstanding (i) no shares of capital stock or
other voting securities of the Company, (ii) no securities of the Company
convertible into or exchangeable for shares of capital stock or other voting
securities of the Company, (iii) no options, warrants or other rights
(including preemptive rights) to acquire from the Company, and no obligation
of the Company to issue or sell, any shares of capital stock or other voting
securities of the Company or any securities of the Company convertible into or
exchangeable for such capital stock or voting securities, and (iv) no equity
equivalents, interests in the ownership or earnings, or other similar rights
of or with respect to the Company. There are (and as of the Closing Date
there will be) no outstanding obligations of the Company or any Subsidiary to
repurchase, redeem, or otherwise acquire any of the foregoing shares,
securities, options, warrants, equity equivalents, interests, or rights. The
Company is not a party to, and is not aware of, any voting agreement, voting
trust, or similar agreement or arrangement relating to any class or series of
its capital stock. The classes of Company Stock denominated as Company Common
Stock and Company Convertible Exchangeable Preferred Stock are each listed for
trading and trade on the NASDAQ NMS.
3.5 Authority Relative to This Agreement. The Company has full
corporate power and corporate authority to execute, deliver, and perform this
Agreement and the Ancillary Documents to which it is a party and, subject to
the approval of this Agreement by the holders of Company Common Stock in
accordance with Applicable Law and the Company's Certificate of Incorporation,
to consummate the transactions contemplated hereby and thereby. The
execution, delivery, and performance by the Company of this Agreement and the
Ancillary Documents to which it is a party, and the consummation by it of the
transactions contemplated hereby and thereby, have been duly authorized by the
Board of Directors of the Company, and no other corporate proceedings (other
than the approval of this Agreement by the holders of Company Common Stock in
accordance with Applicable Law and the Company's Certificate of Incorporation)
are required on the part of the Company to authorize the execution, delivery,
and performance by the Company of this Agreement and such Ancillary Documents
and the consummation by it of the transactions contemplated hereby and
thereby. This Agreement has been duly executed and delivered by the Company
and constitutes, and each Ancillary Document executed or to be executed by the
Company has been, or when executed will be, duly executed and delivered by the
Company and constitutes, or when executed and delivered will constitute, a
valid and legally binding obligation of the Company, enforceable against the
Company in accordance with their respective terms, except that such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, and similar laws affecting creditors' rights
generally, (ii) fiduciary obligations under the laws of the jurisdiction of
its incorporation, (iii) equitable principles which may limit the availability
of certain equitable remedies (such as specific performance) in certain
instances, and (iv) public policy considerations with respect to the
enforceability of rights of indemnification.
3.6 Noncontravention. The execution, delivery, and performance, as
the case may be, by the Company or the Company Subsidiaries of this Agreement
and the Ancillary Documents to which it is a party and the consummation by it
of the transactions contemplated hereby and thereby do not and will not,
subject to any consents, waivers or approvals to be effective at the Closing
Date and as may be listed on Schedule 3.6, (i) conflict with or result in a
violation of any provision of the charter or bylaws of the Company or any
Company Subsidiary, (ii) conflict with or result in a violation of any
provision of, or constitute (with or without the giving of notice or the
passage of time or both) a default under, or give rise (with or without the
giving of notice or the passage of time or both) to any right of termination,
cancellation, or acceleration under, or require any consent, approval,
authorization or waiver of, or notice to, any party to, any material bond,
debenture, note, mortgage, indenture, lease, contract, agreement, or other
instrument or obligation to which the Company or any Company Subsidiary is a
party or by which the Company or any Company Subsidiary or any of their
respective properties may be bound or any material Permit held by the Company
or any Company Subsidiary, (iii) result in the creation or imposition of any
Encumbrance upon the properties of the Company or any Company Subsidiary, or
(iv) assuming compliance with the matters referred to in Section 3.7, violate
any Applicable Law binding upon the Company or any Company Subsidiary.
3.7 Governmental Approvals. No consent, approval, order, or
authorization of, or declaration, filing, or registration with, any
Governmental Entity is required to be obtained or made by the Company or any
Subsidiary in connection with the execution, delivery, or performance by the
Company of this Agreement and the Ancillary Documents to which it is a party
or the consummation by it of the transactions contemplated hereby or thereby,
other than (i) compliance with any applicable requirements of the HSR Act;
(ii) compliance with any applicable requirements of the Securities Act; (iii)
compliance with any applicable requirements of the Exchange Act;
(iv) compliance with any applicable state securities laws; (v) filings with
Governmental Entities to occur in the ordinary course following the
consummation of the transactions contemplated hereby, including without
limitation the filing of a Certificate of Merger with the Secretary of State
of Delaware; (vi) any approvals of Governmental Entities; and (vii) such
consents, approvals, orders, or authorizations which, if not obtained, and
such declarations, filings, or registrations which, if not made, would not,
individually or in the aggregate, have a Company Material Adverse Effect.
3.8 Company Subsidiaries.
(a) Except as set forth on Schedule 3.8, the Company does not
own, directly or indirectly, any capital stock or other securities of
any corporation or have any direct or indirect equity or ownership
interest in any other person, other than the Company Subsidiaries,
excluding for this purpose mutual funds. Schedule 3.8 lists each
Company Subsidiary, the jurisdiction of incorporation of each Company
Subsidiary, and the authorized and outstanding capital stock of each
Company Subsidiary. Each Company Subsidiary is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. Each Company Subsidiary has all
requisite corporate power and corporate authority to own, lease, and
operate its properties and to carry on its business as now being
conducted. No actions or proceedings to dissolve any Company Subsidiary
are pending.
(b) Except as otherwise indicated on Schedule 3.8, all the
outstanding capital stock of each Company Subsidiary is owned directly
by the Company, free and clear of all Encumbrances. All outstanding
shares of capital stock of each Company Subsidiary have been validly
issued and are fully paid and nonassessable. No shares of capital stock
of any Company Subsidiary are subject to, nor have any been issued in
violation of, preemptive or similar rights.
(c) Except as set forth on Schedule 3.8, there are (and as of
the Closing Date there will be) outstanding (i) no shares of capital
stock or other voting securities of any Company Subsidiary, (ii) no
securities of the Company or any Company Subsidiary convertible into or
exchangeable for shares of capital stock or other voting securities of
any Company Subsidiary, (iii) no options, warrants or other rights
(including preemptive rights) to acquire from the Company or any Company
Subsidiary, and no obligation of the Company or any Company Subsidiary
to issue or sell, any shares of capital stock or other voting securities
of any Company Subsidiary or any securities convertible into or
exchangeable for such capital stock or voting securities, and (iv) no
equity equivalents, interests in the ownership or earnings, or other
similar rights of or with respect to any Company Subsidiary. There are
(and as of the Closing Date there will be) no outstanding obligations of
the Company or any Company Subsidiary to repurchase, redeem, or
otherwise acquire any of the foregoing shares, securities, options,
equity equivalents, interests, or rights.
3.9 Inapplicability of Section 203. The Board of Directors of the
Company has taken all actions so that the restrictions contained in Section
203 of the State Law applicable to a "business combination" (as defined
therein) will not apply to the execution, delivery or performance of this
Agreement or the consummation of the Merger or the other transactions
contemplated by this Agreement.
3.10 SEC Filings. The Company has filed with the Securities and
Exchange Commission all forms, reports, schedules, statements, and other
documents required to be filed by it under the Securities Act, the Exchange
Act, and all other federal securities laws. All such forms, reports,
schedules, statements, and other documents (including all amendments thereto)
filed by the Company with the Securities and Exchange Commission are herein
collectively referred to as the "SEC Filings". The Company has delivered to
or made available for inspection by Bionova U.S. accurate and complete copies
of all the SEC Filings in the form filed by the Company with the Securities
and Exchange Commission since December 31, 1992. The SEC Filings, including,
without limitation, the financial statements, financial statement footnotes
and financial statement schedules included or incorporated by reference
therein, at the time filed, complied in all material respects with all
applicable requirements of federal securities laws. None of the SEC Filings,
including, without limitation, any financial statements or schedules included
therein, at the time filed, contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or
necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. All material
contracts of the Company and the Subsidiaries required to be filed in the
Company's filings with the SEC under Item 601 of Regulation S-K promulgated by
the SEC have been included in the SEC Filings. The audited consolidated
financial statements and unaudited consolidated interim financial statements
of the Company included in the SEC Filings present fairly, in conformity with
generally accepted accounting principles applied on a consistent basis (except
as may be indicated in the notes thereto), the consolidated financial position
of the Company as of the dates thereof and its consolidated results of
operations and cash flows for the periods then ended (subject to normal
year-end audit adjustments in the case of any unaudited interim financial
statements). The Company shall deliver to Bionova U.S. as soon as they become
available accurate and complete copies of all forms, reports, and other
documents furnished by it to its stockholders generally or filed by it with
the Securities and Exchange Commission subsequent to the date hereof and prior
to the Closing Date.
3.11 Absence of Undisclosed Liabilities. Except as and to the extent
disclosed in the SEC Filings filed prior to the date hereof, as of
September 30, 1995, neither the Company nor any Subsidiary had any liabilities
or obligations (whether accrued, absolute, contingent, unliquidated, or
otherwise, whether or not known to the Company or any Subsidiary, and whether
due or to become due) material to the Company and the Company's Subsidiaries
taken as a whole. Since September 30, 1995, neither the Company nor any
Subsidiary has incurred any such material liabilities or obligations, other
than those incurred in the ordinary course of business consistent with past
practice or pursuant to or as contemplated by this Agreement.
3.12 Absence of Certain Changes. Except as disclosed in the SEC
Filings filed prior to the date hereof or as disclosed on Schedule 3.12, since
September 30, 1995, (i) there has not been any change, development, or effect,
individually or in the aggregate, that has had, or might reasonably be
expected to have, a Company Material Adverse Effect; (ii) the businesses of
each of the Company and each of the Subsidiaries have been conducted only in
the ordinary course consistent with past practice; (iii) neither the Company
nor any Subsidiary has incurred any material liability, engaged in any
material transaction, or entered into any material agreement outside the
ordinary course of business consistent with past practice; (iv) neither the
Company nor any Subsidiary has suffered any material loss, damage,
destruction, or other casualty to any of its assets (whether or not covered by
insurance); and (v) neither the Company nor any Subsidiary has taken any of
the actions set forth in Section 6.2 except as permitted thereunder.
3.13 Tax Matters.
(a) Except as disclosed on Schedule 3.13:
(i) the Company and each Company Subsidiary have (and as
of the Closing Date will have) duly filed all material federal,
state, local, and foreign Tax Returns required to be filed by or
with respect to them with the IRS or other applicable Taxing
authority, and no extensions with respect to such Tax Returns have
(or as of the Closing Date will have) been requested or granted;
(ii) the Company and each Company Subsidiary have (and as
of the Closing Date will have) paid, or adequately reserved
against in its financial statements included as part of its SEC
Filings, all Taxes due, or claimed by any Taxing authority to be
due, from or with respect to them, except Taxes that are being
contested in good faith by appropriate legal proceedings and for
which adequate reserves have been set aside as disclosed on
Schedule 3.13;
(iii) there has been no issue raised or adjustment proposed
(and none is pending) by the IRS or any other Taxing authority in
connection with any of such Tax Returns;
(iv) the Company and each Company Subsidiary have (and as
of the Closing Date will have) made all deposits required with
respect to Taxes;
(v) the federal income Tax Returns of the Company and the
Subsidiaries have not been audited by the IRS; and
(vi) no waiver or extension of any statute of limitations
as to any federal, state, local, or foreign Tax matter has been
given by or requested from the Company or any Company Subsidiary.
3.14 Compliance With Laws. Except as disclosed in the SEC Filings
filed prior to the date hereof, the Company and the Company Subsidiaries have
complied in all material respects with all Applicable Laws (including without
limitation Applicable Laws relating to securities, properties, business
products, manufacturing processes, advertising and sales practices, employment
practices, terms and conditions of employment, wages and hours, safety,
occupational safety, health, environmental protection, product safety, and
civil rights) relating to any material aspect of the Company's or a Company
Subsidiary's business. Neither the Company nor any Company Subsidiary has
received any written notice, which has not been dismissed or otherwise
disposed of, that the Company or any Company Subsidiary has not so complied.
Neither the Company nor any Company Subsidiary is charged or, to the best
knowledge of the Company, threatened with, or, to the best knowledge of the
Company, under investigation with respect to, any violation of any Applicable
Law relating to any aspect of the business of the Company or any Company
Subsidiary.
3.15 Legal Proceedings. Except as disclosed on Schedule 3.15, there
are no Proceedings pending or, to the best knowledge of the Company,
threatened against or involving the Company or any Company Subsidiary (or, to
the Company's knowledge, any of their respective directors or officers in
connection with the business or affairs of the Company or any Company
Subsidiary) or any properties or rights of the Company or any Company
Subsidiary except (i) as disclosed in the SEC Filings filed prior to the date
hereof, (ii) for any Proceedings that pertain to routine claims by persons
other than Governmental Entities that are covered by insurance (subject to
applicable insurance deductibles), and (iii) for Proceedings which,
individually or in the aggregate, if prosecuted to judgment, would not have a
Company Material Adverse Effect. Neither the Company nor any Company
Subsidiary is subject to any judgment, order, writ, injunction, or decree of
any Governmental Entity which has had or is reasonably likely to have a
Company Material Adverse Effect. There are no Proceedings pending or, to the
best knowledge of the Company, threatened seeking to restrain, prohibit, or
obtain damages or other relief in connection with this Agreement or the
transactions contemplated hereby.
3.16 Title to Properties. Each of the Company and the Company
Subsidiaries has good and indefeasible title, and in the case of real property
insurable title, to all material properties (real, personal, and mixed,
tangible and intangible) it owns or purports to own, including without
limitation the properties reflected in its books and records and in the latest
balance sheet of the Company included in the SEC Filings filed prior to the
date hereof, other than those disposed of after the date of such balance sheet
in the ordinary course of business consistent with past practice, free and
clear of all Encumbrances, except (i) as disclosed in the SEC Filings filed
prior to the date hereof, and (ii) liens for Taxes not yet due and payable.
Except as disclosed on Schedule 3.16, no financing statement (or other
instrument sufficient or effective as a financing statement) under the Uniform
Commercial Code with respect to any properties of the Company or any Company
Subsidiary has been filed and is effective in any jurisdiction, and the
Company and the Company Subsidiaries have not signed any such financing
statement (or other instrument) or any mortgage or security agreement
authorizing any secured party thereunder to file any such financing statement
(or other instrument). Neither the whole nor any part of the Company's or any
Company Subsidiary's property is subject to any pending or, to the Company's
knowledge, threatened condemnation or similar proceeding.
3.17 Sufficiency and Condition of Properties. The material properties
owned, leased, or used by the Company and the Company Subsidiaries are (i) in
the case of tangible properties, in good operating condition and repair
(ordinary wear and tear excepted) and have been maintained in accordance with
standard industry practice, (ii) suitable for the purposes used, and (iii)
adequate and sufficient for the normal operation of the Company's and the
Company Subsidiaries' businesses, as presently conducted. The Company and the
Company Subsidiaries own or have a valid leasehold interest in, or otherwise
have a valid right to use, all such properties. The lessee under each such
lease is not in breach of or in default under such lease. Such properties and
their uses conform in all material respects to all Applicable Laws, except for
such minor variations as do not impair or interfere with the use of such
properties for the purposes for which they are employed and the Company and
the Company Subsidiaries have not received any notice to the contrary. All
such tangible properties are in the Company's or a Company Subsidiary's
possession or under their control.
3.18 Intellectual Property.
(a) Set forth on Schedule 3.18 is a list of all Intellectual
Property owned, held, or used by the Company or any Company Subsidiary.
Schedule 3.18 specifies, as applicable: (i) the nature of such
Intellectual Property; (ii) the owner of such Intellectual Property;
(iii) the jurisdictions by or in which such Intellectual Property is
recognized without regard to registration or has been issued or
registered or in which an application for such issuance or registration
has been filed, including the respective registration or application
numbers; and (iv) all licenses, sublicenses, and other agreements to
which the Company or any Company Subsidiary is a party and pursuant to
which the Company, any Company Subsidiary, or any other person is
authorized to use such Intellectual Property, including the identity of
all parties thereto, a description of the nature and subject matter
thereof, the applicable royalty, and the term thereof. Except as noted
in Schedule 3.18, all maintenance fees/annuities have been paid and
renewals thereof have been duly made with respect to such applications,
patents and registrations.
(b) The listed Intellectual Property constitutes all
Intellectual Property necessary for the operation of the Company's
business and that of the Subsidiaries as presently conducted. The
Company or a Company Subsidiary has good and indefeasible title to or is
validly licensed to use all such Intellectual Property. Except as noted
in Schedule 3.18, each item of such Intellectual Property is in full
force and effect, the Company or such Company Subsidiary is in
compliance with all its obligations with respect thereto, and, to the
best knowledge of the Company, no event has occurred which permits, or
upon the giving of notice or the passage of time or otherwise would
permit, revocation or termination of any thereof. During the
prosecution of the U.S. patents listed in Schedule 3.18, the Company
complied with its Rule 56 disclosure obligations. Other than as
identified in Schedule 3.15 hereto, there are no (i) Proceedings
pending, (ii) to the best knowledge of the Company, Proceedings
threatened against the Company or any Company Subsidiary, or (iii) to
the best knowledge of the Company, notices received by the Company or
any Company Subsidiary from another person, asserting that (x) use by
the Company or a Company Subsidiary of any of such Intellectual Property
(y) the making, producing, using or selling of any commercial product of
the Company or any Company Subsidiary, or (z) the making, producing,
using or selling of any experimental product of the Company or any
Company Subsidiary, infringes the rights of any other person. To the
best of the knowledge of the Company, the (x) use by the Company or a
Company Subsidiary of any of such Intellectual Property (y) the making,
producing, using or selling of any commercial product of the Company or
any Company Subsidiary, or (z) the making, producing, using or selling
of any experimental product of the Company or any Company Subsidiary,
does not infringe the rights of any other person. To the best knowledge
of the Company, none of such Intellectual Property is being infringed
upon by any other person. None of such Intellectual Property owned by
the Company or any Company Subsidiary and, to the best of Company's
knowledge, none of such Intellectual Property held or used by the
Company or any Company Subsidiary is subject to any outstanding
judgment, order, writ, injunction, or decree of any Governmental Entity,
or any agreement, arrangement, or understanding, written or oral,
restricting the scope or use thereof. To the best knowledge of the
Company, other than as identified on Schedule 3.15 the conduct of the
Company's and the Subsidiaries' businesses at any time prior to the
Closing Date did not, and the conduct of such businesses on a basis
consistent with past practice as of the Closing Date will not, infringe
upon or otherwise misappropriate any Intellectual Property of any other
person.
(c) The Company has provided Parent with a complete copy of the
option/license agreement (the "Option/License Agreement") between
Advanced Genetic Sciences, Inc. ("AGS") and Garching Instruments
("Garching"), which has not been amended or supplemented except to the
extent indicated in the correspondence identified in Schedule 3.18-1.
Schedule 3.18-1 is a complete list of all correspondence between the
Company and Garching defining royalty rates under the Option/License
Agreement. To the best of the Company's knowledge, the Option/License
Agreement is in full force and effect, and is enforceable by the
Company. To the best of the Company's knowledge and belief, Garching
was duly authorized by the Max-Xxxxxx Institute to enter the
Option/License Agreement on Max-Xxxxxx'x behalf with AGS. The Company
has made all required royalty payments in a timely manner to Garching
pursuant to the Option/License Agreement. The Company exercised its
option under the Option/License Agreement by providing Garching with
written notice of same, and now is licensed under that agreement. The
Company has made available to Parent's counsel copies of all
correspondence between Max-Xxxxxx or Garching on the one hand, and the
Company or AGS on the other. To the best of the Company's knowledge and
belief, there exist only five licenses under the Max-Xxxxxx technology
that is the subject of the Option/License Agreement. To the best of the
Company's knowledge and belief, the licensees are Hoechst, Bayer, Plant
Genetic Systems, Keygene and the Company. The only sublicensee under
the Company's Option/License Agreement is Hilleshog. To the best of the
Company's knowledge and belief, there are no patents or patent
applications owned by Max-Xxxxxx which dominate the patents or patent
applications licensed to AGS in the Option/License Agreement. AGS is a
wholly owned subsidiary of the Company. By change of name AGS is now
known as DNA Plant Technologies, Inc., which name has been changed to
DNAP Technologies, Inc. To the best of the Company's knowledge and
belief, none of the motions filed by the parties to the interference
proceedings involving the Max-Xxxxxx transformation technology has yet
been decided by the United States Patent and Trademark Office. To the
best of the Company's knowledge and belief, Max-Xxxxxx has a priority
position in connection with Max-Xxxxxx'x transformation technology
patent filings (corresponding to the filings that are the subject of the
interference proceedings referenced in the preceding sentence) in
Europe, Australia, Israel and Japan. To the best of the Company's
knowledge and belief, the contract between Gent University and Monsanto
provided to Bionova U.S. or its counsel by the Company, which contract
was filed in the above-referenced interference proceedings, does not in
any way reduce the rights of the Company pursuant to the Option/License
Agreement.
(d) Schedule 3.18-2 is a complete list of all of the Company's
research or license agreements in which the Company is the licensee. To
the best of the Company's knowledge, each of the agreements listed in
Schedule 3.18-2 is valid and subsisting and is enforceable by the
Company (except as the enforceability thereof may be limited by
bankruptcy, insolvency, bank moratorium or similar laws affecting
creditors' rights generally and laws restricting the availability of
equitable remedies and may be subject to general principles of equity
whether or not such enforceability is considered in a proceeding at law
or equity), and none of these agreements has been amended or
supplemented to include terms or conditions not disclosed to Bionova
U.S. To the best of the Company's knowledge, the Company is not in
material breach of the agreements identified in Schedule 3.18-2 except
as noted in Schedule 3.15.
(e) Schedule 3.18-3 is a complete list of all license agreements
of the Company's Transwitch Technology. The Company's Transwitch
patents were developed without the use of any government grant, and the
Company has no obligation to assign or license the Transwitch technology
to any governmental entity. To the best of the Company's knowledge and
belief, Xxxxxxxx & Xxxxxxxx has no documents relating to the Transwitch
patents and pending patent applications other than documents that are
part of the U.S. Patent and Trademark Office file histories, or
correspondence with the Company. To the best of the Company's knowledge
and belief, all of the Company's patents are valid, and the Company's
Transwitch patents cover sense suppression technology as claimed in the
patents.
(f) The Confidential Settlement Agreement between the Company
and Monsanto relating to the suit brought by Monsanto against the
Company in the District of Delaware, C.A. No. 95-278 LON, does not
change or alter any of the material terms of the Consent Judgment
entered in that action except as noted in Schedule 3.18-4, which
schedule will be prepared in a manner consistent with the requirements
of such Confidential Settlement Agreement.
3.19 Permits. Except as set forth in Schedule 3.19, (i) the Company
and the Company Subsidiaries hold all the Permits materially necessary or
required for the conduct of the business of the Company and the Company
Subsidiaries as currently conducted; (ii) each of such Permits is in full
force and effect, the Company and the Company Subsidiaries are in compliance
with all their obligations with respect thereto, and, to the best knowledge of
the Company, no event has occurred which permits, or with or without the
giving of notice or the passage of time or both would permit, the revocation
or termination of any thereof; and (iii) no notice has been issued by any
Governmental Entity and no Proceeding is pending or, to the best knowledge of
the Company, threatened with respect to any alleged failure by the Company and
the Company Subsidiaries to have any Permit the absence of which would have a
Company Material Adverse Effect.
3.20 Agreements.
(a) All agreements, arrangements, and understandings of any
nature (written or oral, formal or informal) (collectively, for purposes
of this Section, "agreements") to which the Company or any Company
Subsidiary is a party or by which the Company or any Company Subsidiary
or any of their respective properties is otherwise bound, that are
material to the business, assets, results of operations, condition
(financial or otherwise), or prospects of the Company and the Company
Subsidiaries considered as a whole, and that provide for annual payments
or receipts in excess of $100,000, are listed either in Part IV of the
Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1994 included in the SEC Filings or on Schedule 3.20.
(b) The Company has made available to Bionova U.S. accurate and
complete copies of the agreements listed in Part IV of the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1994
and on Schedule 3.20. Each of such agreements is a valid and binding
agreement of the Company and the Company Subsidiaries (to the extent
each is a party thereto) and (to the best knowledge of the Company) the
other party or parties thereto, enforceable against the Company and the
Company Subsidiaries (to the extent each is a party thereto) and (to the
best knowledge of the Company) such other party or parties in accordance
with its terms, except that such enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium, and
similar laws affecting creditors' rights generally, (ii) fiduciary
obligations under the laws of the jurisdiction of its incorporation,
(iii) equitable principles which may limit the availability of certain
equitable remedies (such as specific performance) in certain instances,
and (iv) public policy considerations with respect to the enforceability
of rights of indemnification. Neither the Company nor any Company
Subsidiary is in breach of or in default under, nor has any event
occurred which (with or without the giving of notice or the passage of
time or both) would constitute a default by the Company or any Company
Subsidiary under, any material provision of any of such agreements, and
neither the Company nor any Company Subsidiary has received any notice
from, or given any notice to, any other party indicating that the
Company or any Company Subsidiary is in breach of or in default under
any of such agreements. To the best knowledge of the Company, no other
party to any of such agreements is in material breach of or in material
default under such agreements, nor has any assertion been made by the
Company or any Company Subsidiary of any such breach or default.
(c) Neither the Company nor any Company Subsidiary has received
notice of any plan or intention of any other party to any agreement to
exercise any right of offset with respect to, or any right to cancel or
terminate, any agreement, and neither the Company nor any Company
Subsidiary knows of any fact or circumstance that would justify the
exercise by any such other party of such a right other than the
automatic termination of such agreement in accordance with its terms.
Neither the Company nor any Company Subsidiary currently contemplates,
or has reason to believe any other person currently contemplates, any
amendment or change to any agreement, which amendment or change could
have a Company Material Adverse Effect.
3.21 ERISA.
(a) Set forth on Schedule 3.21 is a list identifying each
"employee benefit plan", as defined in Section 3(3) of ERISA, (i) which
is subject to any provision of ERISA, (ii) which is maintained,
administered, or contributed to by the Company or any affiliate of the
Company, and (iii) which covers any employee or former employee of the
Company or any affiliate of the Company or under which the Company or
any affiliate of the Company has any liability. The Company has
delivered to Bionova U.S. accurate and complete copies of such plans
(and, if applicable, the related trust agreements) and all amendments
thereto and written interpretations thereof, together with (i) the three
most recent annual reports (Form 5500 including, if applicable,
Schedule B thereto) prepared in connection with any such plan and
(ii) the most recent actuarial valuation report prepared in connection
with any such plan. Such plans are referred to in this Section as the
"Employee Plans". For purposes of this Section only, an "affiliate" of
any person means any other person which, together with such person,
would be treated as a single employer under Section 414 of the Code.
The only Employee Plans which individually or collectively would
constitute an "employee pension benefit plan" as defined in Section 3(2)
of ERISA are identified as such on Schedule 3.21.
(b) Except as otherwise identified on Schedule 3.21, (i) no
Employee Plan constitutes a "multiemployer plan", as defined in
Section 3(37) of ERISA (for purposes of this Section, a "Multiemployer
Plan"), (ii) no Employee Plan is maintained in connection with any trust
described in Section 501(c)(9) of the Code, (iii) no Employee Plan is
subject to Title IV of ERISA or to the minimum funding standards of
ERISA and the Code, and (iv) during the past five years, neither the
Company nor any of its affiliates have made or been required to make
contributions to any Multiemployer Plan. There are no accumulated
funding deficiencies as defined in Section 412 of the Code (whether or
not waived) with respect to any Employee Plan. The fair market value of
the assets held with respect to each Employee Plan that is a defined
benefit plan and employee pension benefit plan, as defined in
Section 3(2) of ERISA, exceeds the actuarially determined present value
of all benefit liabilities accrued under such Employee Plan (whether or
not vested) determined using reasonable actuarial assumptions. Neither
the Company nor any affiliate of the Company has incurred any material
liability under Title IV of ERISA arising in connection with the
termination of, or complete or partial withdrawal from, any plan covered
or previously covered by Title IV of ERISA. The Company and all of the
affiliates of the Company have paid and discharged promptly when due all
liabilities and obligations arising under ERISA or the Code of a
character which if unpaid or unperformed might result in the imposition
of a lien against any of the assets of the Company or any Subsidiary.
To the knowledge of the Company, nothing done or omitted to be done and
no transaction or holding of any asset under or in connection with any
Employee Plan has or will make the Company or any Subsidiary or any
director or officer of the Company or any Subsidiary subject to any
liability under Title I of ERISA or liable for any Tax pursuant to
Section 4975 of the Code that could have a Company Material Adverse
Effect. To the knowledge of the Company, there are no threatened or
pending claims by or on behalf of the Employee Plans, or by any
participant therein, alleging a breach or breaches of fiduciary duties
or violations of Applicable Laws which could result in liability on the
part of the Company, its officers or directors, or such Employee Plans,
under ERISA or any other Applicable Law and there is no basis for any
such claim.
(c) Each Employee Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified
since the date of its adoption, and each trust forming a part thereof is
exempt from Tax pursuant to Section 501(a) of the Code. Set forth on
Schedule 3.21 is a list of the most recent IRS determination letters
with respect to any such Plans, accurate and complete copies of which
letters have been delivered to Bionova U.S. To the best of the
Company's knowledge, each Employee Plan has been maintained in
compliance with its terms and with the requirements prescribed by all
Applicable Laws, including but not limited to ERISA and the Code, which
are applicable to such Plans.
(d) There is set forth on Schedule 3.21 a list of each
employment, severance, or other similar contract, arrangement, or policy
and each plan or arrangement (written or oral) providing for insurance
coverage (including any self-insured arrangements), workers'
compensation, disability benefits, supplemental unemployment benefits,
vacation benefits, retirement benefits, deferred compensation, profit-
sharing, bonuses, stock options, stock appreciation rights, or other
forms of incentive compensation or post-retirement insurance,
compensation, or benefits which (i) is not an Employee Plan, (ii) is
entered into, maintained, or contributed to, as the case may be, by the
Company or any affiliate of the Company, and (iii) covers any employee
or former employee of the Company or any affiliate of the Company or
under which the Company or any affiliate of the Company has any
liability. Such contracts, plans, and arrangements as are described in
the preceding sentence are referred to for purposes of this Section as
the "Benefit Arrangements". Each Benefit Arrangement has been
maintained in substantial compliance with its terms and with the
requirements prescribed by Applicable Laws.
(e) To the best of the Company's knowledge, neither the Company
nor any affiliate of the Company has performed any act or failed to
perform any act, and there is no contract, agreement, plan, or
arrangement covering any employee or former employee of the Company or
any affiliate of the Company, that, individually or collectively, could
give rise to the payment of any amount that would not be deductible
pursuant to the terms of Section 162(a)(1) or 280G of the Code, or could
give rise to any penalty or excise Tax pursuant to Section 4980B or 4999
of the Code.
(f) Except as disclosed on Schedule 3.21, there has been no
amendment, written interpretation, or announcement (whether or not
written) by the Company or any affiliate of the Company of or relating
to, or change in employee participation or coverage under, any Employee
Plan or Benefit Arrangement which would increase materially the expense
of maintaining such Employee Plan or Benefit Arrangement above the level
of the expense incurred in respect thereof for the fiscal year ended
December 31, 1994.
3.22 Environmental Matters.
(a) Except as disclosed in the SEC Filings filed prior to the
date hereof or as previously disclosed on Schedule 3.22 and except for
matters that in the aggregate would not have a Company Material Adverse
Effect:
(i) the properties, operations, and activities of the
Company and the Company Subsidiaries comply with all Applicable
Environmental Laws (as defined below);
(ii) the Company and the Company Subsidiaries and the
properties, operations, and activities of the Company and the
Company Subsidiaries are not subject to any existing, pending, or,
to the best knowledge of the Company, threatened Proceeding under,
or to any remedial obligations under, any Applicable Environmental
Laws;
(iii) all Permits, if any, required to be obtained by the
Company or any Company Subsidiary under any Applicable
Environmental Laws in connection with any aspect of the business
of the Company or the Company Subsidiaries, including without
limitation those relating to the treatment, storage, disposal, or
release of a hazardous material (as defined below), have been duly
obtained and are in full force and effect, and the Company and the
Company Subsidiaries are in compliance with the terms and
conditions of all such Permits;
(iv) the Company and the Company Subsidiaries have
satisfied and are currently in compliance with all financial
responsibility requirements applicable to their respective
operations and imposed by any Governmental Entity under any
Applicable Environmental Laws, and the Company and the Company
Subsidiaries have not received any notice of noncompliance with
any such financial responsibility requirements;
(v) to the best knowledge of the Company, there are no
physical or environmental conditions existing on any property
owned or leased by the Company or any Company Subsidiary or
resulting from the Company's or any Company Subsidiary's
operations or activities, past or present, at any location, that
would give rise to any on-site or off-site remedial obligations
under any Applicable Environmental Laws;
(vi) to the best knowledge of the Company, since the
effective date of the relative requirements of Applicable
Environmental Laws, all hazardous materials generated by the
Company or any Company Subsidiary or used in connection with their
respective properties, operations, or activities have been
transported only by carriers authorized under Applicable
Environmental Laws to transport such materials, and have been
disposed of only at treatment, storage, and disposal facilities
authorized under Applicable Environmental Laws to treat, store, or
dispose of such materials, and, to the best knowledge of the
Company, such carriers and facilities have been and are operating
in compliance with such authorizations and are not the subject of
any existing, pending, or threatened Proceeding in connection with
any Applicable Environmental Laws;
(vii) there has been no exposure of any person or property
to hazardous materials, nor has there been any release of
hazardous materials into the environment, by the Company or any
Company Subsidiary or in connection with their respective
properties, operations, or activities that could reasonably be
expected to give rise to any claim for damages or compensation;
and
(viii) the Company and the Company Subsidiaries shall
make available to Bionova U.S. all internal and external
environmental audits and studies and all correspondence on
substantial environmental matters in the possession of the Company
and the Company Subsidiaries relating to any of the current or
former properties, operations, or activities of the Company and
the Company Subsidiaries, provided that the Company and the
Company Subsidiaries shall not be required to make available any
such audits, studies, or correspondence that may be subject to the
attorney-client privilege or similar privilege.
(b) For purposes of this Agreement, "Applicable Environmental
Laws" means any and all Applicable Laws pertaining to health, safety, or
the environment in effect in any and all jurisdictions in which the
Company or any Company Subsidiary has conducted operations or activities
or owned or leased property, including, without limitation, the Clear
Air Act, as amended, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, the Rivers and
Harbors Act of 1899, as amended, the Federal Water Pollution Control
Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Resource Conservation and Recovery Act of 1976, as amended,
the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Superfund Amendments and Reauthorization Act of
1986, as amended, the Hazardous Materials Transportation Act, as
amended, and other environmental conservation or protection laws. For
purposes of this Agreement, the term "hazardous material" means (i) any
substance that now or in the future is defined as a hazardous or toxic
material, waste or substance or solid waste or is regulated, governed
by, or the Handling (defined below) of which requires investigation,
removal, remediation or cleanup by any Governmental Entity or under any
Applicable Environmental Laws, or any amendment thereto, (ii) any
substance which is listed or defined as a hazardous substance, hazardous
constituent, or solid waste pursuant to any Applicable Environmental
Laws, (iii) petroleum (including crude oil and any fraction thereof),
natural gas, and natural gas liquids, and (iv) any substance that is
otherwise toxic, explosive, ignitable, corrosive, reactive, flammable,
infectious, mutagenic, radioactive, carcinogenic, a pollutant or
contaminant, dangerous or otherwise hazardous, including polychlorinated
biphenyls (PCBs), asbestos, radon or urea formaldehyde. For purposes of
this Agreement, the term "Handle," "Handled," or "Handling" shall mean
any installation, handling, generation, storing, treatment, use,
disposal, discharge, release, manufacture, refinement, processing,
production, presence, migration, emission, abatement, removal,
remediation, transportation, or any other activity of any type in
connection with or involving Hazardous Materials. For purposes of this
Agreement, the term "Remedial Obligations" shall mean any and all
remedial obligations, whether on-site or off-site, incurred in
connection with the Handling of Hazardous Materials, including without
limitation, the obligations to monitor, investigate, remediate, remove,
xxxxx and cleanup.
(c) The representations and warranties contained in this Section
would continue to be true and correct following disclosure to the
applicable Governmental Entities of all relevant facts, conditions, and
circumstances, if any, pertaining to the properties, operations, and
activities of the Company and the Company Subsidiaries.
3.23 Labor Relations.
(a) Except as disclosed on Schedule 3.23, (i) there are no
collective bargaining agreements or other labor union contracts
applicable to any employees to or by which the Company or any Company
Subsidiary is a party or is bound, no such agreement or contract has
been requested by any employee or group of employees of the Company or
any Company Subsidiary, and no discussions have occurred with respect
thereto by management of the Company or any Company Subsidiary with any
such employees; (ii) no employees of the Company or any Company
Subsidiary are represented by any labor organization, collective
bargaining representative, or group of employees; (iii) no labor
organization, collective bargaining representative, or group of
employees claims to represent a majority of the employees of the Company
or any Company Subsidiary in an appropriate unit of the Company or any
Company Subsidiary; (iv) neither the Company nor any Company Subsidiary
is aware of or involved with any representational campaign or other
organizing activities by any union or other organization or group
seeking to become the collective bargaining representative of any of its
employees; (v) neither the Company nor any Company Subsidiary is
obligated to bargain collectively with respect to wages, hours, and
other terms and conditions of employment with any recognized or
certified labor organization, collective bargaining representative, or
group of employees; and (vi) neither the Company nor any Company
Subsidiary is aware of any strikes, work stoppages, work slowdowns, or
lockouts or any threats thereof by or with respect to any of its
employees, and since December 31, 1990, there have been no labor
disputes, strikes, work stoppages, work slowdowns, lockouts, or similar
matters involving any such employees.
(b) The Company and the Company Subsidiaries are in compliance
with all Applicable Laws pertaining to employment and employment
practices and wages, hours, and other terms and conditions of employment
in respect of their respective employees, except for noncompliance with
such Applicable Laws which does not and will not have a Company Material
Adverse Effect, and have no accrued liability for any arrears of wages
or any Taxes or penalties for failure to comply with any thereof. The
Company and the Company Subsidiaries are not engaged in any unfair labor
practices or unlawful employment practices. There is no pending or, to
the best knowledge of the Company, threatened Proceeding against or
involving the Company or any Company Subsidiary by or before, and
neither the Company nor any Company Subsidiary is subject to any
judgment, order, writ, injunction, or decree of or inquiry from, the
National Labor Relations Board, the Equal Employment Opportunity
Commission, the Department of Labor, or any other Governmental Entity in
connection with any current, former, or prospective employee of the
Company or any Company Subsidiary.
3.24 Employees. Set forth on Schedule 3.24 is a list of:
(a) all directors and officers of the Company and the Company
Subsidiaries, and
(b) the name, social security number, and dates of employment by
the Company and the Company Subsidiaries of each employee, and
consultant of the Company and the Company Subsidiaries, whose annual
rate of cash compensation in the 1995 fiscal year will equal or exceed
$50,000, together with the total amounts of salary, bonuses, and other
cash compensation paid or payable by the Company and the Company
Subsidiaries to each such person for such fiscal year. Except as set
forth on Schedule 3.24, the Company has not materially altered any such
compensation arrangements since the end of the 1995 fiscal year, and the
Company does not have any material non-cash compensation arrangements in
favor of its employees.
Except as disclosed on Schedule 3.24, no severance payment, stay-on or
incentive payment, or similar obligation will be owed by the Company and the
Company Subsidiaries to any of their respective directors, officers, or
employees upon consummation of, or as a result of, the transactions
contemplated by this Agreement, nor will any such director, officer, or
employee be entitled to an increase in severance payments or other benefits as
a result of the transactions contemplated by this Agreement in the event of
the subsequent termination of his or her employment.
3.25 Confidentiality Matters. Each of the Company and the Company
Subsidiaries has taken reasonable measures to maintain the confidentiality of
any secret, confidential, or proprietary information relating to the Company
or any Company Subsidiary or its business including written confidentiality
agreements with their respective employees.
3.26 Insurance. Listed on Schedule 3.26 are the policies of insurance
maintained by the Company and the Company Subsidiaries with respect to their
respective assets and operations. All premiums due and payable with respect
to such policies have been timely paid. No notice of cancellation of, or
indication of an intention not to renew, any such policy has been received by
the Company or its Subsidiaries. During the past three years, no application
by the Company and its Subsidiaries for insurance with respect to their assets
or operations has been denied for any reason.
3.27 Insider Interests. Except as disclosed in the SEC Filings, no
event has occurred that would be required to be reported by the Company as a
Certain Relationship or Related Transaction pursuant to Item 404 of Regulation
S-K promulgated by the Securities and Exchange Commission.
3.28 Offerings of Securities. All securities which have been offered
or sold by the Company or any Subsidiary have been registered pursuant to the
Securities Act and applicable state securities laws or were offered and sold
pursuant to valid exemptions therefrom. No registration statement,
prospectus, private offering memorandum, or other information furnished
(whether in writing or orally) to any offeree or purchaser of such securities,
at the time such registration statement became effective (in the case of a
registered offering) or at the time of delivery of such registration
statement, prospectus, private offering memorandum, or other information,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. To the extent that any such securities were
registered under the Securities Act, the applicable registration statements
and prospectuses filed with the Securities and Exchange Commission pursuant to
the Securities Act, at the time each such registration statement became
effective, and at all times when delivery of a prospectus was required
pursuant to the Securities Act, complied in all material respects with the
requirements of the Securities Act and the rules and regulations thereunder.
3.29 Brokerage Fees. Neither the Company nor any of its affiliates has
retained any financial advisor, broker, agent, or finder or paid or agreed to
pay any financial advisor, broker, agent, or finder on account of this
Agreement or any transaction contemplated hereby except that Xxxxx Xxxxxxx,
Inc. and BioScience Securities have been retained as the Company's financial
advisors in connection with the transactions contemplated hereby. The Company
shall indemnify and hold harmless Bionova U.S. from and against any and all
losses, claims, damages, and liabilities (including legal and other expenses
reasonably incurred in connection with investigating or defending any claims
or actions) with respect to any finder's fee, brokerage commission, or similar
payment in connection with any transaction contemplated hereby asserted by any
person on the basis of any act or statement made or alleged to have been made
by the Company or any of its affiliates.
3.30 Disclosure. No representation or warranty made by the Company in
this Agreement, and no statement of the Company contained in any document,
certificate, or other writing furnished or to be furnished by the Company
pursuant hereto or in connection herewith, contains or will contain, at the
time of delivery, any untrue statement of a material fact or omits or will
omit, at the time of delivery, to state any material fact necessary in order
to make the statements contained therein, in light of the circumstances under
which they are made, not misleading.
3.31 Disclosure Documents. None of the information relating to the
Company or its subsidiaries, this Agreement, or the transactions contemplated
by this Agreement which has been or is to be supplied by the Company for
inclusion in, or which has been or is to be incorporated by reference from SEC
Filings of the Company in, (a) the Registration Statement, (b) the Proxy
Statement, and (c) any other documents to be filed with any regulatory
authority by the Company, Parent or their respective subsidiaries in
connection with the transactions contemplated by this Agreement, at the
respective time such document is filed, becomes effective, or is first mailed
to stockholders, or at the Effective Time, as the case may be, will be false
or misleading with respect to any material fact, or will omit to state any
material fact necessary in order to make the statements therein not
misleading, or, in the case of the Proxy Statement, at the time of the Special
Meeting, will be false or misleading with respect to any material fact, or
will omit to state any material fact necessary in order to make the statements
therein not misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for the Special
Meeting. All documents required to be filed by the Company and its
subsidiaries in connection with the Merger will comply as to form in all
material respects with the applicable requirements of the statutes, rules, and
regulations pursuant to which they are filed. No representations are made in
this Section with respect to any information included or incorporated by
reference in the Registration Statement, the Proxy Statement, or any other
document referred to in clause (c) of the first sentence of this Section which
relates to Parent or its subsidiaries.
3.32 Representations and Warranties on Closing Date. The
representations and warranties made in this Article III will be true and
correct on and as of the Closing Date with the same force and effect as if
such representations and warranties had been made on and as of the Closing
Date, except that any such representations and warranties which expressly
relate only to an earlier date shall be true and correct on the Closing Date
as of such earlier date.
3.33 Receivables. All receivables (including accounts and notes
receivable, employee advances, and accrued receivables) of the Company as
reflected in the Company's most recent consolidated financial statements
presented in the SEC Filings or arising since the date thereof are, to the
best of the Company's knowledge, valid obligations of the respective makers
thereof, have arisen in the ordinary course of business for goods and services
delivered or rendered, are not subject to any valid defenses, counterclaims,
or set offs, and have been collected or are, to the best of the Company's
knowledge, collectible in full at their recorded amounts in the ordinary
course of business, net of doubtful accounts reserved for in such financial
statements.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
REGARDING PARENT, BIONOVA MEXICO, BIONOVA U.S. AND SUB
Each of Parent, Bionova Mexico, Bionova U.S., and Sub represent and
warrant to the Company that:
4.1 Corporate Organization.
(a) Parent is a corporation duly organized and validly existing
under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and corporate authority to own, lease, and
operate its properties and to carry on its business as now being
conducted. No actions or proceedings to dissolve Parent are pending or,
to the best knowledge of Parent, threatened.
(b) Bionova Mexico is a corporation duly organized and validly
existing under the laws of the jurisdiction of its incorporation and has
all requisite corporate power and corporate authority to own, lease, and
operate its properties and to carry on its business as now being
conducted. No actions or proceedings to dissolve Bionova Mexico are
pending or, to the best knowledge of Bionova Mexico, threatened.
(c) Bionova U.S. is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and corporate
authority to own, lease, and operate its properties and to carry on its
business as now being conducted. No actions or proceedings to dissolve
Bionova U.S. are pending or, to the best knowledge of Bionova U.S.,
threatened.
(d) Sub is a corporation duly organized, validly existing, and
in good standing under the laws of the jurisdiction of its incorporation
and has all requisite corporate power and corporate authority to own,
lease, and operate its properties and to carry on its business as now
being conducted. Other than as contemplated by this Agreement and the
Ancillary Documents, no actions or proceedings to dissolve Sub are
pending or, to the best knowledge of Sub, threatened.
4.2 Qualification. Each of Parent, Bionova Mexico, Bionova U.S. and
Sub is duly qualified or licensed to do business as a foreign corporation and
each of Parent, Bionova U.S. and Sub is in good standing in each of the
jurisdictions set forth opposite its name on Schedule 4.2, which are all the
jurisdictions in which the property owned, leased, or operated by it or the
conduct of its business requires such qualification or licensing, except
jurisdictions in which the failure to be so qualified or licensed would not,
individually or in the aggregate, have a Bionova Xxxxx Xxxxxxxx Adverse
Effect.
4.3 Charter and Bylaws. Bionova U.S. has delivered to the Company
accurate and complete copies of (i) the estatutos sociales of each of Parent
and Bionova Mexico as currently in effect and (ii) the charter and bylaws of
each of Bionova U.S. and Sub as currently in effect, which charter and bylaws
are attached hereto as Schedule 4.3. Neither Parent, Bionova Mexico, Bionova
U.S. nor Sub is in violation of any provisions of its organizational
documents.
4.4 Authority Relative to This Agreement. Each of Parent, Bionova
Mexico, Bionova U.S., and Sub has full corporate power and corporate authority
to execute, deliver, and perform this Agreement and the Ancillary Documents to
which it is a party and to consummate the transactions contemplated hereby and
thereby. The execution, delivery, and performance by each of them of this
Agreement and the Ancillary Documents to which it is a party, and the
consummation by it of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate action of Parent, Bionova
Mexico, Bionova U.S., and Sub, as the case may be. This Agreement has been
duly executed and delivered by each of Parent, Bionova Mexico, Bionova U.S.,
and Sub and constitutes, and each Ancillary Document executed or to be
executed by each of them has been, or when executed will be, duly executed and
delivered by each of them and constitutes, or when executed and delivered will
constitute, a valid and legally binding obligation of each of them,
enforceable against each of them in accordance with their respective terms,
except that such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally, (ii) fiduciary obligations under the laws of its
jurisdiction of incorporation, (iii) equitable principles which may limit the
availability of certain equitable remedies (such as specific performance) in
certain instances, (iv) public policy considerations with respect to the
enforceability of rights of indemnification, and (v) priority claims under
Mexican law with respect to labor claims, taxes, social security payments,
retirement funds, housing funds and similar items.
4.5 Noncontravention. The execution, delivery, and performance, as
the case may be, by each of Parent, Bionova Mexico, Bionova U.S., and Sub of
this Agreement and the Ancillary Documents to which it is a party and the
consummation by it of the transactions contemplated hereby and thereby do not
and will not, subject to any consents, waivers or approvals to be effective at
the Closing Date and as may be listed on Schedule 4.5, (i) conflict with or
result in a violation of any provision of the organizational documents of such
company or any member of the Bionova Group, (ii) conflict with or result in a
violation of any provision of, or constitute (with or without the giving of
notice or the passage of time or both) a default under, or give rise (with or
without the giving of notice or the passage of time or both) to any right of
termination, cancellation, or acceleration under, or require any consent,
approval, authorization, or waiver of any party to, any material bond,
debenture, note, mortgage, indenture, lease, contract, agreement, or other
instrument or obligation to which such company or any member of the Bionova
Group is a party or by which such companies or any of their respective
properties may be bound, (iii) result in the creation or imposition of any
Encumbrance upon the properties of Parent, Bionova Mexico, Bionova U.S., Sub
or any member of the Bionova Group, or (iv) assuming compliance with the
matters referred to in Section 4.6, violate any Applicable Law binding upon
Parent, Bionova Mexico, Bionova U.S., Sub or any member of the Bionova Group.
4.6 Governmental Approvals. No consent, approval, order, or
authorization of, or declaration, filing, or registration with, any
Governmental Entity is required to be obtained or made by Parent, Bionova
Mexico, Bionova U.S., or Sub in connection with the execution, delivery, or
performance by Parent, Bionova Mexico, Bionova U.S. or Sub of this Agreement
and the Ancillary Documents to which it is a party or the consummation by it
of the transactions contemplated hereby or thereby, other than (i) compliance
with any applicable requirements of the HSR Act and necessary filings with the
Mexican Competition Commission; (ii) compliance with any applicable
requirements of the Securities Act; (iii) compliance with any applicable
requirements of the Exchange Act; (iv) compliance with any applicable state
securities laws; (v) filings with Governmental Entities to occur in the
ordinary course following the consummation of the transactions contemplated
hereby, including without limitation the filing of a Certificate of Merger
with the Secretary of State of Delaware, the filing of a notice with the
Mexican Foreign Investment Registry, the filing of a notice with the Mexican
Agrarian Registry, and the filing of a notice with the Mexican Tax
authorities; and (vi) such consents, approvals, orders, or authorizations
which, if not obtained, and such declarations, filings, or registrations
which, if not made, would not, individually or in the aggregate, have a
Bionova Xxxxx Xxxxxxxx Adverse Effect.
4.7 Legal Proceedings. There are no Proceedings pending or, to the
best knowledge of Parent, Bionova Mexico, Bionova U.S. or Sub, threatened
seeking to restrain, prohibit, or obtain damages or other relief in connection
with this Agreement or the transactions contemplated hereby.
4.8 Brokerage Fees. Neither Parent, Bionova Mexico, Bionova U.S. nor
Sub nor any of their affiliates has retained any financial advisor, broker,
agent, or finder or paid or agreed to pay any financial advisor, broker,
agent, or finder on account of this Agreement or any transaction contemplated
hereby except that X.X. Xxxxxx Securities, Inc. has been retained as Parent's
financial advisor in connection with the transactions contemplated hereby.
Parent shall indemnify and hold harmless the Company from and against any and
all losses, claims, damages, and liabilities (including legal and other
expenses reasonably incurred in connection with investigating or defending any
claims or actions) with respect to any finder's fee, brokerage commission, or
similar payment in connection with any transaction contemplated hereby
asserted by any person on the basis of any act or statement made or alleged to
have been made by Bionova U.S. or any of its affiliates.
4.9 Stock Ownership of Bionova Mexico, Bionova U.S. and Sub.
(a) All the outstanding capital stock of Bionova Mexico (except
for four shares owned by affiliates of Parent) is owned directly by
Parent.
(b) The authorized capital stock of Bionova U.S. is reflected in
the charter thereof attached as part of Schedule 4.3. As of the date
hereof, 25,000 shares of Common Stock, $.01 par value, of Bionova U.S.
are issued and outstanding. All of such shares are owned directly by
Bionova Mexico, free and clear of all Encumbrances. All of such shares
have been validly issued and are fully paid and nonassessable. No
shares of capital stock of Bionova U.S. are subject to, nor have any
been issued in violation of, preemptive or similar rights. Except (w)
for the 25,000 shares outstanding as of the date hereof as set forth in
this Section 4.9(b), (x) such shares as shall be issued to Bionova
Mexico on the Closing Date as contemplated by Section 1.11(d), (y) such
shares as shall be issued as a result of the Merger as contemplated by
Section 2.1, and (z) such shares as may be issued in connection with the
exercise of those options and warrants to be assumed by Bionova U.S. as
contemplated by Section 2.5 and Section 2.6, there are (and as of the
Closing Date there will be) outstanding (i) no shares of capital stock
or other voting securities of Bionova U.S., (ii) no securities of
Bionova U.S. convertible into or exchangeable for shares of capital
stock or other voting securities of Bionova U.S., (iii) no options,
warrants or other rights (including preemptive rights) to acquire from
Bionova U.S., and no obligation of Bionova U.S. to issue or sell, any
shares of capital stock or other voting securities of Bionova U.S. or
any securities of Bionova U.S. convertible into or exchangeable for such
capital stock or voting securities, and (iv) no equity equivalents,
interests in the ownership or earnings, or other similar rights of or
with respect to Bionova U.S.
(c) The authorized capital stock of Sub is reflected in the
charter thereof attached as part of Schedule 4.3. As of the date
hereof, 1,000 shares of Common Stock, $.01 par value, of Sub are issued
and outstanding. All of such shares are owned directly by Bionova U.S.,
free and clear of all Encumbrances. All of such shares have been
validly issued and are fully paid and nonassessable. No shares of
capital stock of Sub are subject to, nor have any been issued in
violation of, preemptive or similar rights. Except (x) for the 1,000
shares outstanding as of the date hereof as set forth in this Section
4.9(c), and (y) as provided in Section 2.1(e), there are (and as of the
Closing Date there will be) outstanding (i) no shares of capital stock
or other voting securities of Sub, (ii) no securities of Sub convertible
into or exchangeable for shares of capital stock or other voting
securities of Sub, (iii) no options, warrants or other rights (including
preemptive rights) to acquire from Sub, and no obligation of Sub to
issue or sell, any shares of capital stock or other voting securities of
Sub or any securities of Sub convertible into or exchangeable for such
capital stock or voting securities, and (iv) no equity equivalents,
interests in the ownership or earnings, or other similar rights of or
with respect to Sub.
4.10 Parent Securities Filings.
(a) Parent has filed with the Securities and Exchange Commission
and the Comision Nacional Bancaria y de Valores, as the case may be, all
forms, reports, schedules, statements, and other documents required to
be filed by it under the Securities Act, the Exchange Act, and all other
U.S. federal and Mexican securities laws. All such forms, reports,
schedules, statements, and other documents (including all amendments
thereto) filed by Parent with the Securities and Exchange Commission or
the Comision Nacional Bancaria y de Valores are herein collectively
referred to as the "Filings." Parent has delivered to or made available
for inspection by the Company accurate and complete copies of all the
Filings in the form filed by Parent with the Securities and Exchange
Commission or the Comision Nacional Bancaria y de Valores since December
31, 1992. The Filings, at the time filed, complied in all material
respects with all applicable requirements of United States or Mexican
securities laws, as the case may be. None of the Filings, including,
without limitation, any financial statements or schedules included
therein, at the time filed, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein
or necessary in order to make the statements contained therein, in light
of the circumstances under which they were made, not misleading. All
material contracts of Parent have been included in the Filings, except
for those contracts not required to be filed pursuant to the rules and
regulations of the Securities and Exchange Commission or the Comision
Nacional Bancaria y de Valores.
(b) The audited consolidated financial statements and unaudited
consolidated interim financial statements of Parent included in the
Filings present fairly, in conformity with generally accepted accounting
principles in effect in Mexico or the United States (as specified
therein) applied on a consistent basis (except as may be indicated in
the notes thereto), the consolidated financial position of Parent as of
the dates thereof and its consolidated results of operations and cash
flows for the periods then ended (subject to normal year-end audit
adjustments in the case of any unaudited interim financial statements).
Parent shall deliver to the Company as soon as they become available
accurate and complete copies of all forms, reports, and other documents
furnished by it to its stockholders generally or filed by it with the
Securities and Exchange Commission or the Comision Nacional Bancaria y
de Valores subsequent to the date hereof and prior to the Closing Date.
4.11 Control. Except as set forth on Schedule 4.11, Bionova Mexico
controls each other member of the Bionova Group as of the date of this
Agreement (which includes the power on its own, without the joinder of any
other person, to direct all material decisions) and, assuming the
effectiveness of this Agreement and the transactions contemplated by it,
Bionova U.S. will so control such Bionova Group members after the Effective
Time.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
REGARDING THE BIONOVA GROUP
Parent, Bionova Mexico, Bionova U.S. and Sub represent and warrant to
the Company that:
5.1 Corporate Organization. Each member of the Bionova Group is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and corporate authority to own, lease, and operate its properties and to
carry on its business as now being conducted. No actions or proceedings to
dissolve any member of the Bionova Group are pending or, to the best knowledge
of Bionova U.S., threatened except as set forth on Schedule 5.1.
5.2 Qualification. Each member of the Bionova Group is duly qualified
or licensed to do business as a foreign corporation, and is in good standing,
in each of the jurisdictions set forth opposite its name on Schedule 5.2,
which are all the jurisdictions in which the property owned, leased, or
operated by it or the conduct of its business requires such qualification or
licensing, except jurisdictions in which the failure to be so qualified or
licensed would not, individually or in the aggregate, have a Bionova Xxxxx
Xxxxxxxx Adverse Effect.
5.3 Charter and Bylaws. Bionova U.S. has delivered to the Company
accurate and complete copies of (i) the charter and bylaws (or other
organizational documents) of each member of the Bionova Group as currently in
effect, (ii) the stock records of each member of the Bionova Group, and (iii)
the minutes of all meetings of the respective Boards of Directors of each
member of the Bionova Group, any committees of such Boards, and the
stockholders of such companies (and all consents in lieu of such meetings).
Such records, minutes, and consents accurately reflect the stock ownership of
the Bionova Group and all actions taken by such Boards of Directors,
committees, and stockholders. As of the Closing Date, no member of the
Bionova Group will be in violation of any provision of its organizational
documents.
5.4 Capitalization of the Bionova Group. Except as set forth on
Schedule 5.4, no member of the Bionova Group owns, directly or indirectly, any
capital stock or other securities of any corporation or has any direct or
indirect equity or ownership interest in any other person, other than another
member of the Bionova Group. The jurisdiction of incorporation and authorized
and outstanding capital stock of each member of the Bionova Group is set forth
on Schedule 5.4. The ownership of the outstanding capital stock of each
member of the Bionova Group is also set forth on Schedule 5.4. All
outstanding shares of capital stock of the Bionova Group have been validly
issued and are fully paid and nonassessable, and no shares of capital stock of
the Bionova Group are subject to, nor have any been issued in violation of,
preemptive or similar rights. All issuances, sales, and repurchases by the
Bionova Group of shares of its capital stock have been effected in compliance
with all Applicable Laws, including without limitation applicable securities
laws. Except as set forth above in this Section and set forth on Schedule
5.4, there are (and as of the Closing Date there will be) outstanding (i) no
shares of capital stock or other voting securities of the Bionova Group, (ii)
no securities of the Bionova Group convertible into or exchangeable for shares
of capital stock or other voting securities of the Bionova Group, (iii) no
options, warrants or other rights (including preemptive rights, except to the
extent such preemptive rights exist under Applicable Law) to acquire from the
Bionova Group, and no obligation of the Bionova Group to issue or sell, any
shares of capital stock or other voting securities of the Bionova Group or any
securities of the Bionova Group convertible into or exchangeable for such
capital stock or voting securities, and (iv) no equity equivalents, interests
in the ownership or earnings, or other similar rights of or with respect to
the Bionova Group. Except as set forth on Schedule 5.4, there are (and as of
the Closing Date there will be) no outstanding obligations of the Bionova
Group to repurchase, redeem, or otherwise acquire any of the foregoing shares,
securities, options, equity equivalents, interests, or rights. Except as set
forth on Schedule 5.4, no member of the Bionova Group is a party to, or is
aware of, any voting agreement, voting trust, or similar agreement or
arrangement relating to any class or series of its capital stock.
5.5 Financial Statements. Bionova Mexico has delivered to the Company
accurate and complete copies of the Bionova Group's consolidated balance sheet
as of September 30, 1995, and the related consolidated statement of income for
the nine-month period then ended, as well as, for each material member of the
Bionova Group, such entity's consolidating balance sheet as of September 30,
1995, and the related consolidating statements of income and cash flow for the
nine-month period then ended (the "Bionova Group Financial Statements"). The
Bionova Group Financial Statements (i) represent actual bona fide
transactions, (ii) have been prepared from the books and records of the
Bionova Group in conformity with generally accepted accounting principles in
effect in Mexico or the United States, as the case may be, applied on a basis
consistent with preceding years throughout the periods involved, and (iii)
accurately, completely, and fairly present in all material respects the
Bionova Group's consolidated or consolidating financial position, as the case
may be, as of the date thereof and its consolidated or consolidating results
of operations and cash flows for the period then ended, as the case may be.
5.6 Absence of Undisclosed Liabilities. No member of the Bionova
Group has any material liability or obligation (whether accrued, absolute,
contingent, unliquidated, or otherwise, whether or not known to it, and
whether due or to become due), except (i) liabilities reflected on the Bionova
Group Financial Statements, (ii) liabilities which have arisen since the date
of the Bionova Group Financial Statements in the ordinary course of business
(none of which is a material liability for breach of contract, breach of
warranty, tort, or infringement), (iii) liabilities arising under executory
contracts entered into in the ordinary course of business (none of which is a
material liability for breach of contract), (iv) liabilities specifically set
forth on Schedule 5.6, and (v) other liabilities which, in the aggregate, are
not material to the Bionova Group considered as a whole.
5.7 Absence of Certain Changes. Except as disclosed on Schedule 5.7,
since September 30, 1995, (i) there has not been any change, development, or
effect, individually or in the aggregate, that has had, or might reasonably be
expected to have, a Bionova Xxxxx Xxxxxxxx Adverse Effect; (ii) the business
of the Bionova Group has been conducted only in the ordinary course consistent
with past practice; (iii) no member of the Bionova Group has incurred any
material liability, engaged in any material transaction, or entered into any
material agreement outside the ordinary course of business consistent with
past practice; (iv) no member of the Bionova Group has suffered any material
loss, damage, destruction, or other casualty to any of its assets (whether or
not covered by insurance); and (v) no member of the Bionova Group has taken
any of the actions set forth in Section 6.2 except as permitted thereunder.
5.8 Tax Matters.
(a) Except as disclosed on Schedule 5.8:
(i) the Bionova Group has (and as of the Closing Date will
have) duly filed all material federal, state, local, and foreign
Tax Returns required to be filed by or with respect to it with the
IRS or other applicable Taxing authority, and no extensions with
respect to such Tax Returns have (or as of the Closing Date will
have) been requested or granted;
(ii) the Bionova Group has (and as of the Closing Date will
have) paid, or adequately reserved against in the Bionova Group
Financial Statements, all Taxes due, or claimed by any Taxing
authority to be due, from or with respect to it, except Taxes that
are being contested in good faith by appropriate legal proceedings
and for which adequate reserves have been set aside as disclosed
on Schedule 5.8;
(iii) there has been no issue raised or adjustment proposed
(and none is pending) by the IRS or any other Taxing authority in
connection with any of such Tax Returns;
(iv) the Bionova Group has (and as of the Closing Date will
have) made all deposits required with respect to Taxes;
(v) the federal income Tax Returns of the Bionova Group
have not been audited by the IRS; and
(vi) no waiver or extension of any statute of limitations
as to any federal, state, local, or foreign Tax matter has been
given by or requested from the Bionova Group.
5.9 Compliance With Laws. Except as disclosed on Schedule 5.9,
Bionova Mexico and the Bionova Group has complied in all material respects
with all Applicable Laws (including without limitation Applicable Laws
relating to securities, properties, business products, manufacturing
processes, advertising and sales practices, employment practices, terms and
conditions of employment, wages and hours, safety, occupational safety,
health, environmental protection, product safety, and civil rights) relating
to any material aspect of the Bionova Group's business. Neither Bionova
Mexico nor any member of the Bionova Group has received any written notice,
which has not been dismissed or otherwise disposed of, that it has not so
complied. Neither Bionova Mexico nor any member of the Bionova Group is
charged or, to the best knowledge of Bionova U.S., threatened with, or, to the
best knowledge of Bionova U.S., under investigation with respect to, any
violation of any Applicable Law relating to any aspect of the business of
Bionova Mexico or the Bionova Group.
5.10 Legal Proceedings. There are no Proceedings pending or, to the
best knowledge of Bionova Mexico and Bionova U.S., threatened against or
involving Bionova Mexico or the Bionova Group (or any of their respective
directors or officers in connection with the business or affairs of Bionova
Mexico or the Bionova Group) or any properties or rights of Bionova Mexico or
the Bionova Group except (i) as disclosed on Schedule 5.10, (ii) for any
Proceedings that pertain to routine claims by persons other than Governmental
Entities that are covered by insurance (subject to applicable insurance
deductibles), and (iii) for Proceedings which, individually or in the
aggregate, if prosecuted to judgment, would not have a Bionova Xxxxx Xxxxxxxx
Adverse Effect. Neither Bionova Mexico nor any member of the Bionova Group is
subject to any judgment, order, writ, injunction, or decree of any
Governmental Entity which has had or is reasonably likely to have a Bionova
Xxxxx Xxxxxxxx Adverse Effect. There are no Proceedings pending or, to the
best knowledge of Bionova Mexico or Bionova U.S., threatened seeking to
restrain, prohibit, or obtain damages or other relief in connection with this
Agreement or the transactions contemplated hereby.
5.11 Title to Properties. Each member of the Bionova Group has good
and indefeasible title, and in the case of real property located in the United
States of America insurable title, to all material properties (real, personal,
and mixed, tangible and intangible) it owns or purports to own, including
without limitation the properties reflected in its books and records and in
the Bionova U.S. Financial Statements, other than those disposed of after the
date of such balance sheet in the ordinary course of business consistent with
past practice, free and clear of all Encumbrances, except (i) as disclosed on
Schedule 5.11, and (ii) liens for Taxes not yet due and payable and (iii) such
imperfections or irregularities of title, if any, as (A) are not substantial
in character, amount, or extent and do not materially detract from the value
of the property subject thereto, (B) do not materially interfere with either
the present or intended use of such property, and (C) do not, individually or
in the aggregate, materially interfere with the conduct of the Bionova Group's
normal operations. Except as disclosed on Schedule 5.11, no financing
statement (or other instrument sufficient or effective as a financing
statement) under the Uniform Commercial Code or other comparable statute with
respect to any properties of the Bionova Group has been filed and is effective
in any jurisdiction, and no member of the Bionova Group has signed any such
financing statement (or other instrument) or any mortgage or security
agreement authorizing any secured party thereunder to file any such financing
statement (or other instrument).
5.12 Sufficiency and Condition of Properties. The material properties
owned, leased, or used by the Bionova Group's business are (i) in the case of
tangible properties, in good operating condition and repair (ordinary wear and
tear excepted) and have been maintained in accordance with standard industry
practice, (ii) suitable for the purposes used, and (iii) adequate and
sufficient for the normal operation of the Bionova Group's business, as
presently conducted. The members of the Bionova Group own or have a valid
leasehold interest in, or otherwise have a valid right to use, all such
properties. Such properties and their uses conform in all material respects
to all Applicable Laws, except for such minor variations as do not impair or
interfere with the use of such properties for the purposes for which they are
employed and Bionova U.S. has not, nor has any member of the Bionova Group,
received any notice to the contrary. All such tangible properties are in the
Bionova Group's possession or under their control.
5.13 Intellectual Property.
(a) Set forth on Schedule 5.13 is a list of all Intellectual
Property owned, held, or used by the Bionova Group. Schedule 5.13
specifies, as applicable: (i) the nature of such Intellectual Property;
(ii) the owner of such Intellectual Property; (iii) the jurisdictions by
or in which such Intellectual Property is recognized without regard to
registration or has been issued or registered or in which an application
for such issuance or registration has been filed, including the
respective registration or application numbers; and (iv) all licenses,
sublicenses, and other agreements to which any member of the Bionova
Group is a party and pursuant to which any member of the Bionova Group,
or any other person is authorized to use such Intellectual Property,
including the identity of all parties thereto, a description of the
nature and subject matter thereof, the applicable royalty, and the term
thereof.
(b) The listed Intellectual Property constitutes all
Intellectual Property necessary for the operation of the Bionova Group's
business as presently conducted. The Bionova Group has good and
indefeasible title to or is validly licensed to use all such
Intellectual Property, free from burdensome restrictions. Except as
noted in Schedule 5.13, each item of such Intellectual Property is in
full force and effect, the Bionova Group is in compliance with all its
obligations with respect thereto, and, to the best knowledge of Bionova
U.S., no event has occurred which permits, or upon the giving of notice
or the passage of time or otherwise would permit, revocation or
termination of any thereof. During the prosecution of the U.S. patents
listed on Schedule 5.13, the Bionova Group complied with its Rule 56
disclosure obligations. Other than as identified on Schedule 5.10,
there are no Proceedings pending or, to the best knowledge of Bionova
U.S., threatened against the Bionova Group asserting that the use by the
Bionova Group of any of such Intellectual Property infringes the rights
of any other person or seeking revocation, termination, or concurrent
use of any of such Intellectual Property, and there is, to the best
knowledge of the Bionova U.S., no basis for any such Proceeding. To the
best knowledge of the Bionova U.S., none of such Intellectual Property
is being infringed upon by any other person. None of such Intellectual
Property is subject to any outstanding judgment, order, writ,
injunction, or decree of any Governmental Entity, or any agreement,
arrangement, or understanding, written or oral, restricting the scope or
use thereof. Except as set forth on Schedule 5.13, to the best
knowledge of Bionova U.S., the conduct of the Bionova Group's business
at any time prior to the Closing Date did not, and the conduct of such
business on a basis consistent with past practice as of the Closing Date
will not, infringe upon or otherwise misappropriate any Intellectual
Property of any other person.
(c) To the best knowledge of Bionova Mexico and Bionova U.S.,
none of the Bionova Group's commercial products now in the marketplace
infringes any third-party utility patent, plant patent or plant
protection certificate. Schedule 5.13 sets forth a complete list of all
of the Bionova Group's research or license agreements in which a member
of the Bionova Group is a licensee. To the best knowledge of Bionova
Mexico and Bionova U.S., each of the agreements listed on Schedule 5.13
is valid and subsisting and is enforceable by the Bionova Group (except
as the enforceability thereof may be limited by bankruptcy, insolvency,
bank moratorium or similar laws affecting creditors' rights generally
and laws restricting the availability of equitable remedies and may be
subject to general principles of equity whether or not such
enforceability is considered in a proceeding at law or equity), and none
of these agreements has been amended or supplemented to include terms or
conditions not disclosed to the Company.
(d) As of the date of this Agreement, those members of the
Bionova Group using Parent's "Premier Selecion" and "Market Delight"
trademarks or tradenames have a royalty free arrangement from Parent
pursuant to which such members are permitted to utilize such trademarks
or tradenames. Such arrangement will not be cancelled or reconstituted
as a royalty bearing arrangement as a result of the consummation of the
Merger. Not later than the Effective Time of the Merger, such
arrangement will be memorialized in a written instrument granting to
such members of the Bionova Group the right to use all such trademarks
or tradenames for a perpetual period of time and on a royalty free
basis.
5.14 Permits. Except as set forth on Schedule 5.14, (i) the Bionova
Group holds all the Permits materially necessary or required for the conduct
of the business of the Bionova Group as currently conducted; (ii) each of such
Permits is in full force and effect, the Bionova Group is in compliance with
all its obligations with respect thereto, and, to the best knowledge of
Bionova U.S., no event has occurred which permits, or with or without the
giving of notice or the passage of time or both would permit, the revocation
or termination of any thereof; and (iii) no notice has been issued by any
Governmental Entity and no Proceeding is pending or, to the best knowledge of
Bionova U.S., threatened with respect to any alleged failure by the Bionova
Group to have any Permit the absence of which would have a Bionova Xxxxx
Xxxxxxxx Adverse Effect.
5.15 Agreements.
(a) All agreements, arrangements, and understandings of any
nature (written or oral, formal or informal) (collectively, for purposes
of this Section, "agreements") to which the Bionova Group is a party or
by which the Bionova Group or any of their respective properties is
otherwise bound, that are material to the business, assets, results of
operations, condition (financial or otherwise), or prospects of the
Bionova Group considered as a whole, and that provide for annual
payments or receipts in excess of $100,000, are listed on Schedule
5.15.
(b) Bionova U.S. has delivered to the Company accurate and
complete copies of the agreements listed on Schedule 5.15. Each of such
agreements is a valid and binding agreement of the Bionova Group (to the
extent each is a party thereto) and (to the best knowledge of Bionova
U.S.) the other party or parties thereto, enforceable against the
Bionova Group (to the extent each is a party thereto) and (to the best
knowledge of Bionova U.S.) such other party or parties in accordance
with its terms, except that such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium, and
similar laws affecting creditors' rights generally, (ii) fiduciary
obligations under the laws of its jurisdiction of incorporation,
(iii) equitable principles which may limit the availability of certain
equitable remedies (such as specific performance) in certain instances,
(iv) public policy considerations with respect to the enforceability of
rights of indemnification, and (v) priority claims under Mexican law
with respect to labor claims, taxes, social security payments,
retirement funds, housing funds and similar items. No member of the
Bionova Group is in breach of or in default under, nor has any event
occurred which (with or without the giving of notice or the passage of
time or both) would constitute a default by the Bionova Group under, any
material provision of any of such agreements, and no member of the
Bionova Group has received any notice from, or given any notice to, any
other party indicating that the Bionova Group is in breach of or in
default under any of such agreements. To the best knowledge of Bionova
U.S., no other party to any of such agreements is in material breach of
or in material default under such agreements, nor has any assertion been
made by the Bionova Group of any such breach or default.
(c) No member of the Bionova Group has received notice of any
plan or intention of any other party to any agreement to exercise any
right of offset with respect to, or any right to cancel or terminate,
any agreement, and no member of the Bionova Group knows of any fact or
circumstance that would justify the exercise by any such other party of
such a right other than the automatic termination of such agreement in
accordance with its terms. No member of the Bionova Group currently
contemplates, or has reason to believe any other person currently
contemplates, any amendment or change to any agreement, which amendment
or change could have a Bionova Xxxxx Xxxxxxxx Adverse Effect.
5.16 ERISA.
(a) Set forth on Schedule 5.16 is a list identifying each
"employee benefit plan", as defined in Section 3(3) of ERISA, (i) which
is subject to any provision of ERISA, (ii) which is maintained,
administered, or contributed to by Bionova U.S. or any affiliate of
Bionova U.S., and (iii) which covers any employee or former employee of
Bionova U.S. or any affiliate of Bionova U.S. or under which Bionova
U.S. or any affiliate of Bionova U.S. has any liability. Bionova U.S.
has delivered to the Company accurate and complete copies of such plans
(and, if applicable, the related trust agreements) and all amendments
thereto and written interpretations thereof, together with (i) the three
most recent annual reports (Form 5500 including, if applicable,
Schedule B thereto) prepared in connection with any such plan and
(ii) the most recent actuarial valuation report prepared in connection
with any such plan. Such plans are referred to in this Section as the
"Employee Plans". For purposes of this Section only, an "affiliate" of
any person means any other person which, together with such person,
would be treated as a single employer under Section 414 of the Code.
The only Employee Plans which individually or collectively would
constitute an "employee pension benefit plan" as defined in Section 3(2)
of ERISA are identified as such on Schedule 5.16.
(b) Except as otherwise identified on Schedule 5.16, (i) no
Employee Plan constitutes a "multiemployer plan", as defined in
Section 3(37) of ERISA (for purposes of this Section, a "Multiemployer
Plan"), (ii) no Employee Plan is maintained in connection with any trust
described in Section 501(c)(9) of the Code, (iii) no Employee Plan is
subject to Title IV of ERISA or to the minimum funding standards of
ERISA and the Code, and (iv) during the past five years, neither Bionova
U.S. nor any of its affiliates have made or been required to make
contributions to any Multiemployer Plan. There are no accumulated
funding deficiencies as defined in Section 412 of the Code (whether or
not waived) with respect to any Employee Plan. The fair market value of
the assets held with respect to each Employee Plan that is a defined
benefit plan and an employee pension benefit plan, as defined in
Section 3(2) of ERISA, exceeds the actuarially determined present value
of all benefit liabilities accrued under such Employee Plan (whether or
not vested) determined using reasonable actuarial assumptions. Neither
Bionova U.S. nor any affiliate of Bionova U.S. has incurred any material
liability under Title IV of ERISA arising in connection with the
termination of, or complete or partial withdrawal from, any plan covered
or previously covered by Title IV of ERISA. Bionova U.S. and all of the
affiliates of Bionova U.S. have paid and discharged promptly when due
all liabilities and obligations arising under ERISA or the Code of a
character which if unpaid or unperformed might result in the imposition
of a lien against any of the assets of the Bionova Group. To the
knowledge of Bionova Mexico or Bionova U.S., nothing done or omitted to
be done and no transaction or holding of any asset under or in
connection with any Employee Plan has or will make the Bionova Group or
any director or officer of the Bionova Group subject to any liability
under Title I of ERISA or liable for any Tax pursuant to Section 4975 of
the Code that could have a Bionova Xxxxx Xxxxxxxx Adverse Effect. To
the knowledge of Bionova Mexico or Bionova U.S., there are no threatened
or pending claims by or on behalf of the Employee Plans, or by any
participant therein, alleging a breach or breaches of fiduciary duties
or violations of Applicable Laws which could result in liability on the
part of Bionova U.S., its officers or directors, or such Employee Plans,
under ERISA or any other Applicable Law and there is no basis for any
such claim.
(c) To the knowledge of Bionova Mexico or Bionova U.S., each
Employee Plan which is intended to be qualified under Section 401(a) of
the Code is so qualified and has been so qualified since the date of its
adoption, and each trust forming a part thereof is exempt from Tax
pursuant to Section 501(a) of the Code. Set forth on Schedule 5.16 is a
list of the most recent IRS determination letters with respect to any
such Plans, accurate and complete copies of which letters have been
delivered to Bionova U.S. To the best of the knowledge of Parent,
Bionova Mexico, Bionova U.S. and Sub, each Employee Plan has been
maintained in compliance with its terms and with the requirements
prescribed by all Applicable Laws, including but not limited to ERISA
and the Code, which are applicable to such Plans.
(d) There is set forth on Schedule 5.16 a list of each
employment, severance, or other similar contract (including any non-
competition agreement), arrangement, or policy and each plan or
arrangement (written or oral) providing for insurance coverage
(including any self-insured arrangements), workers' compensation,
disability benefits, supplemental unemployment benefits, vacation
benefits, retirement benefits, deferred compensation, profit-sharing,
bonuses, stock options, stock appreciation rights, or other forms of
incentive compensation or post-retirement insurance, compensation, or
benefits which (i) is not an Employee Plan, (ii) is entered into,
maintained, or contributed to, as the case may be, by the Bionova Group,
and (iii) covers any employee or former employee of the Bionova Group.
Such contracts, plans, and arrangements as are described in the
preceding sentence are referred to for purposes of this Section as the
"Benefit Arrangements". Each Benefit Arrangement has been maintained in
substantial compliance with its terms and with the requirements
prescribed by Applicable Laws.
(e) To the knowledge of Bionova Mexico or Bionova U.S., neither
Bionova U.S. nor any affiliate of Bionova U.S. has performed any act or
failed to perform any act, and there is no contract, agreement, plan, or
arrangement covering any employee or former employee of Bionova U.S. or
any affiliate of Bionova U.S., that, individually or collectively, could
give rise to the payment of any amount that would not be deductible
pursuant to the terms of Section 162(a)(1) or 280G of the Code, or could
give rise to any penalty or excise Tax pursuant to Section 4980B or 4999
of the Code.
(f) Except as disclosed on Schedule 5.16, there has been no
amendment, written interpretation, or announcement (whether or not
written) by Bionova U.S. or any affiliate of Bionova U.S. of or relating
to, or change in employee participation or coverage under, any Employee
Plan or Benefit Arrangement which would increase materially the expense
of maintaining such Employee Plan or Benefit Arrangement above the level
of the expense incurred in respect thereof for the fiscal year ended
December 31, 1994.
5.17 Environmental Matters.
(a) Except as disclosed on Schedule 5.17 and except for matters
that in the aggregate would not have a Bionova Xxxxx Xxxxxxxx Adverse
Effect:
(i) the properties, operations, and activities of the
Bionova Group comply with all Applicable Environmental Laws;
(ii) the Bionova Group and the properties, operations, and
activities of the Bionova Group are not subject to any existing,
pending, or, to the best knowledge of Bionova U.S., threatened
Proceeding under, or to any remedial obligations under, any
Applicable Environmental Laws;
(iii) all Permits, if any, required to be obtained by the
Bionova Group under any Applicable Environmental Laws in
connection with any aspect of the business of the Bionova Group,
including without limitation those relating to the treatment,
storage, disposal, or release of a hazardous material, have been
duly obtained and are in full force and effect, and the Bionova
Group is in compliance with the terms and conditions of all such
Permits;
(iv) the Bionova Group has satisfied and is currently in
compliance with all financial responsibility requirements
applicable to their respective operations and imposed by any
Governmental Entity under any Applicable Environmental Laws, and
the Bionova Group has not received any notice of noncompliance
with any such financial responsibility requirements;
(v) to the best knowledge of Bionova U.S., there are no
physical or environmental conditions existing on any property
owned or leased by the Bionova Group or resulting from the Bionova
Group's operations or activities, past or present, at any
location, that would give rise to any on-site or off-site remedial
obligations under any Applicable Environmental Laws;
(vi) to the best knowledge of Bionova U.S., since the
effective date of the relative requirements of Applicable
Environmental Laws, all hazardous materials generated by the
Bionova Group or used in connection with their respective
properties, operations, or activities have been transported only
by carriers authorized under Applicable Environmental Laws to
transport such materials, and have been disposed of only at
treatment, storage, and disposal facilities authorized under
Applicable Environmental Laws to treat, store, or dispose of such
materials, and, to the best knowledge of Bionova U.S., such
carriers and facilities have been and are operating in compliance
with such authorizations and are not the subject of any existing,
pending, or threatened Proceeding in connection with any
Applicable Environmental Laws;
(vii) there has been no exposure of any person or property
to hazardous materials, nor has there been any release of
hazardous materials into the environment, by the Bionova Group or
in connection with their respective properties, operations, or
activities that could reasonably be expected to give rise to any
claim for damages or compensation; and
(viii) the Bionova Group shall make available to the
Company all internal and external environmental audits and studies
and all correspondence on substantial environmental matters in the
possession of the Bionova Group relating to any of the current or
former properties, operations, or activities of the Bionova Group,
provided that the Bionova Group shall not be required to make
available any such audits, studies, or correspondence that may be
subject to the attorney-client privilege or similar privilege.
(b) The representations and warranties contained in this Section
would continue to be true and correct following disclosure to the
applicable Governmental Entities of all relevant facts, conditions, and
circumstances, if any, pertaining to the properties, operations, and
activities of the Bionova Group.
5.18 Labor Relations.
(a) Except as disclosed on Schedule 5.18, (i) there are no
collective bargaining agreements or other labor union contracts
applicable to any employees to or by which the Bionova Group is a party
or is bound, no such agreement or contract has been requested by any
employee or group of employees of the Bionova Group, and no discussions
have occurred with respect thereto by management of the Bionova Group
with any such employees; (ii) no employee of the Bionova Group is
represented by any labor organization, collective bargaining
representative, or group of employees; (iii) no labor organization,
collective bargaining representative, or group of employees claims to
represent a majority of the employees of the Bionova Group in an
appropriate unit of the Bionova Group; (iv) no member of the Bionova
Group is aware of or involved with any representational campaign or
other organizing activities by any union or other organization or group
seeking to become the collective bargaining representative of any of its
employees; (v) no member of the Bionova Group is obligated to bargain
collectively with respect to wages, hours, and other terms and
conditions of employment with any recognized or certified labor
organization, collective bargaining representative, or group of
employees; and (vi) no member of the Bionova Group is aware of any
strikes, work stoppages, work slowdowns, or lockouts or any threats
thereof by or with respect to any of its employees, and since December
31, 1993, there have been no labor disputes, strikes, work stoppages,
work slowdowns, lockouts, or similar matters involving any such
employees.
(b) The Bionova Group is in compliance with all Applicable Laws
pertaining to employment and employment practices and wages, hours, and
other terms and conditions of employment in respect of their respective
employees, except for noncompliance with such Applicable Laws which does
not and will not have a Bionova Xxxxx Xxxxxxxx Adverse Effect, and has
no accrued liability for any arrears of wages or any Taxes or penalties
for failure to comply with any thereof. The Bionova Group is not
engaged in any unfair labor practices or unlawful employment practices.
There is no pending or, to the best knowledge of Bionova U.S.,
threatened Proceeding against or involving the Bionova Group by or
before, and no member of the Bionova Group is subject to any judgment,
order, writ, injunction, or decree of or inquiry from, the National
Labor Relations Board, the Equal Employment Opportunity Commission, the
Department of Labor, the Immigration and Naturalization Service or any
other Governmental Entity in connection with any current, former, or
prospective employee of the Bionova Group.
(c) No service agreement entered into by any of the companies
collectively identified as the Bionova Group with any third party
service company will cause the Bionova Group member receiving such
services to be deemed the employer of such service company's employees.
5.19 Employees. Set forth on Schedule 5.19 is a list of:
(a) all directors and officers of the Bionova Group, and
(b) the name, social security number, and dates of employment by
the Bionova Group of each employee, and consultant of the Bionova Group,
whose annual rate of cash compensation in the 1995 fiscal year will
equal or exceed $50,000, together with the total amounts of salary,
bonuses, and other cash compensation paid or payable by the Bionova
Group to each such person for such fiscal year. Except as set forth in
Schedule 5.19, the Bionova Group has not materially altered any such
compensation arrangement since the end of the 1995 fiscal year, and the
Bionova Group does not have any material non-cash compensation
arrangements in favor of its employees.
Except as disclosed on Schedule 5.19, no severance payment, stay-on or
incentive payment, or similar obligation will be owed by the Bionova Group to
any of their respective directors, officers, or employees upon consummation
of, or as a result of, the transactions contemplated by this Agreement, nor
will any such director, officer, or employee be entitled to an increase in
severance payments or other benefits as a result of the transactions
contemplated by this Agreement in the event of the subsequent termination of
his or her employment.
5.20 Insurance. Listed on Schedule 5.20 are the policies of insurance
maintained by the Bionova Group with respect to their respective assets and
operations. All premiums due and payable with respect to such policies have
been timely paid. No notice of cancellation of, or indication of an intention
not to renew, any such policy has been received by the Bionova Group. During
the past three years, no application by the Bionova Group for insurance with
respect to its assets or operations has been denied for any reason.
5.21 Insider Interests. Except as disclosed on Schedule 5.21, no
shareholder, director, officer, or employee of the Bionova Group or any
associate of any such shareholder, director, officer, or employee is
presently, directly or indirectly, a party to any material transaction
pertaining to Bionova U.S. or the Bionova Group, including, without
limitation, any agreement, arrangement, or understanding, written or oral,
providing for the employment of, furnishing of services by, rental of real or
personal property from, or otherwise requiring payments to any such
shareholder, director, officer, employee, or associate. To the best knowledge
of Bionova U.S., no shareholder, director, officer, or employee of the Bionova
Group or any associate of any such shareholder, director, officer, or employee
owns, directly or indirectly, any material interest in, or serves as a
director, officer, or employee of, any customer, supplier, or competitor of
Bionova U.S. or the Bionova Group. For purposes of this Section only, an
"associate" of any shareholder, director, officer, or employee means (i) a
spouse, parent, sibling, child, mother- or father-in-law, son- or daughter-in-
law, or brother- or sister-in-law of such shareholder, director, officer, or
employee or (ii) any corporation, partnership, trust, or other entity in which
such shareholder, director, officer, or employee or associate thereof has a
substantial ownership or beneficial interest (other than an interest in a
public corporation which does not exceed three percent of its outstanding
securities) or is a director, officer, partner, or trustee or person holding a
similar position.
5.22 Disclosure. No representation or warranty made by Parent, Bionova
Mexico, Bionova U.S., or Sub in this Agreement, and no statement of Parent,
Bionova Mexico, Bionova U.S., or Sub contained in any document, certificate,
or other writing furnished or to be furnished by Parent, Bionova Mexico,
Bionova U.S., or Sub pursuant hereto or in connection herewith, contains or
will contain, at the time of delivery, any untrue statement of a material fact
or omits, or will omit, at the time of delivery, to state any material fact
necessary in order to make the statements contained therein, in the light of
the circumstances under which they are made, not misleading.
5.23 Disclosure Documents. None of the information relating to Parent,
Bionova Mexico, Bionova U.S., Sub, the Bionova Group, this Agreement, or the
transactions contemplated by this Agreement which has been or is to be
supplied by Parent, Bionova Mexico, Bionova U.S. or the Bionova Group for
inclusion in (a) the Registration Statement, (b) the Proxy Statement, and (c)
any other documents to be filed with any regulatory authority by the Company,
Parent or their respective subsidiaries in connection with the transactions
contemplated by this Agreement, at the respective time such document is filed,
becomes effective, or is first mailed to stockholders, or at the Effective
Time, as the case may be, will be false or misleading with respect to any
material fact, or will omit to state any material fact necessary in order to
make the statements therein not misleading, or, in the case of the Proxy
Statement, at the time of the Special Meeting, will be false or misleading
with respect to any material fact, or will omit to state any material fact
necessary in order to make the statements therein not misleading or necessary
to correct any statement in any earlier communication with respect to the
solicitation of any proxy for the Special Meeting. All documents required to
be filed by Parent, Bionova Mexico, Bionova U.S., or the Bionova Group in
connection with the Merger will comply as to form in all material respects
with the applicable requirements of the statutes, rules, and regulations
pursuant to which they are filed. No representations are made in this Section
with respect to any information included or incorporated by reference in the
Registration Statement, the Proxy Statement, or any other document referred to
in clause (c) of the first sentence of this Section which relates to the
Company or its subsidiaries.
5.24 Representations and Warranties on Closing Date. The
representations and warranties made in Article IV and this Article V will be
true and correct on and as of the Closing Date with the same force and effect
as if such representations and warranties had been made on and as of the
Closing Date, except that any such representations and warranties which
expressly relate only to an earlier date shall be true and correct on the
Closing Date as of such earlier date.
5.25 Confidentiality Matters. Each member of the Bionova Group have
taken reasonable measures to maintain the confidentiality of any secret,
confidential or proprietary information relating to the Bionova Group or its
business.
5.26 Offerings of Securities. All securities which have been offered
or sold by any member of the Bionova Group have been registered pursuant to
Applicable Laws or were offered and sold pursuant to valid exemptions
therefrom. No registration statement, prospectus, private offering
memorandum, or other information furnished (whether in writing or orally) to
any offeree or purchaser of such securities, at the time such registration
statement became effective (in the case of a registered offering) or at the
time of delivery of such registration statement, prospectus, private offering
memorandum, or other information, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. To the extent that
any such securities were registered under the Securities Act or Mexican
securities law, the applicable registration statements and prospectuses filed
with the Securities and Exchange Commission pursuant to the Securities Act or
Mexican securities law, at the time each such registration statement became
effective, and at all times when delivery of a prospectus was required
pursuant to the Securities Act or Mexican securities law, complied in all
material respects with the requirements of the Securities Act and the rules
and regulations thereunder or Mexican securities law, as the case may be.
5.27 Customers and Suppliers. To Bionova Mexico's and Bionova U.S.'s
knowledge, none of the ten largest customers and none of the ten largest
suppliers of the Bionova Group taken as a whole for the most recent fiscal
year has materially reduced or terminated, or intends to materially reduce or
terminate its business with the Bionova Group.
5.28 No Prior Activities. Neither Bionova U.S. nor Sub has
(i) incurred, nor will it incur prior to and including the Closing Date,
directly or indirectly, any liabilities or obligations, (ii) engaged in any
business activity or transaction, or (iii) entered into any agreement or
arrangement with any person or entity, except in connection with its
organization, negotiation, execution and performance of this Agreement and the
Ancillary Documents and the consummation of the transactions contemplated
hereby and thereby.
5.29 Holding Company. Except as set forth in Schedule 5.29, Bionova
Mexico has no material assets other than its direct ownership of shares of
stock of IPHC and ABSA and its indirect ownership of shares of each other
member of the Bionova Group. Except as set forth on Schedule 5.29, IPHC has
no material assets other than its direct and indirect ownership interests in
its subsidiaries.
5.30 Arm's Length Contracts. Except as disclosed on Schedule 5.30,
each contract or other agreement material to the business or the financial
condition of the Bionova Group is a commercially reasonable, arm's length
contract. Except as disclosed on Schedule 5.30, no stockholder, director or
officer of any member of the Bionova Group possesses, directly or indirectly,
any financial interest in, or is a director, officer or employee of, any
corporation, firm, association or business organization which is a client,
supplier, customer, lessor, lessee, or competitor or potential competitor of
any member of the Bionova Group. Except as referenced on Schedule 5.30, none
of the items disclosed thereon is reasonably anticipated to have a Bionova
Xxxxx Xxxxxxxx Adverse Effect.
5.31 Real Property.
(a) Set forth on Schedule 5.31 is a list, by street address, of all
material real property owned or leased by the Bionova Group (for purposes of
this Section, the "Real Property"), a list of all material Encumbrances to
which the Real Property is subject, and a summary description of the principal
facilities and structures (if any) located thereon. There are no persons
(other than the Bionova Group) in possession of any material portion of the
Real Property. There exists no Proceeding or court order, or building code
provision, deed restriction, or restrictive covenant (recorded or otherwise),
or other private or public limitation, which might in any way materially
impede or materially adversely affect the continued use of the Real Property
by the Bionova Group in the manner it is currently used.
(b) All material buildings, improvements, and fixtures situated on the
Real Property conform in all material respects to all Applicable Laws. All
the Real Property is zoned for the various purposes for which such Real
Property is being materially used, and there exists no pending or, to the best
knowledge of Bionova U.S., threatened Proceeding which might materially
adversely affect the validity of such zoning.
(c) Neither the whole nor any material part of the Real Property is
subject to any pending Proceeding for condemnation or other taking by any
Governmental Entity, and, to the best knowledge of Bionova U.S., no such
condemnation or other taking is contemplated or threatened.
5.32 Leased Property. Set forth on Schedule 5.32 is a list and summary
description of the material terms of all leases under which the Bionova Group
is the lessee of material real or personal property. The Bionova Group has
good and valid leasehold interests in all material properties held by it under
lease. The lessee under each such lease is not in breach of or in default
under such lease.
5.33 Receivables. All receivables (including accounts and notes
receivable, employee advances, and accrued interest receivables) of the
Bionova Group as reflected in the Bionova Group Financial Statements or
arising since the date thereof are, to the best of the knowledge of Parent,
Bionova Mexico, Bionova U.S. or Sub, valid obligations of the respective
makers thereof, have arisen in the ordinary course of business for goods or
services delivered or rendered, are not subject to any valid defenses,
counterclaims, or set offs, and have been collected or are, to the best of the
knowledge of Parent, Bionova Mexico, Bionova U.S. or Sub, collectible in full
at their recorded amounts in the ordinary course of business, net of doubtful
accounts reserved for in such financial statements.
5.34 Bionova U.S. Common Stock. The shares of Bionova U.S. Common
Stock to be issued pursuant to the Merger shall be duly authorized and, when
issued in accordance with the terms of this Agreement, shall be validly
issued, fully paid, nonassessable, free from preemptive rights, registered
under United States federal securities laws, qualified (or exempt from
qualification) under applicable state securities laws, and listed for trading
on the NASDAQ NMS.
5.35 Capital Contribution. None of the transactions contemplated by
Section 1.11 will, upon consummation thereof, result in a Bionova Xxxxx
Xxxxxxxx Adverse Effect.
5.36 Inventory. To the best of the knowledge of Parent, Bionova
Mexico, Bionova U.S. and Sub, all inventory reflected in the Bionova Group
Financial Statements was, as of September 30, 1995, in good condition and was
merchantable for sale in the Bionova Group's ordinary course of business.
ARTICLE VI
CONDUCT OF PARTIES PENDING CLOSING
6.1 Conduct and Preservation of Business. Except as expressly
provided in this Agreement, during the period from the date hereof to the
Closing, the Company and the Company Subsidiaries, on the one hand, and
Bionova U.S., Sub and the Bionova Group, on the other hand, (i) shall each
conduct its operations according to its ordinary course of business consistent
with past practice and in compliance in all material respects with all
Applicable Laws; (ii) shall each use its reasonable best efforts to preserve,
maintain, and protect its properties; and (iii) shall each use its reasonable
best efforts to preserve intact its business organization, to keep available
the services of its officers and employees, and to maintain existing
relationships with licensors, licensees, suppliers, contractors, distributors,
customers, and others having business relationships with it, provided,
however, that no person shall be required to make any payments or enter into
or amend any contractual agreements, arrangements, or understandings to
satisfy the foregoing obligation unless such payment or other action is
required or consistent with past practice.
6.2 Restrictions on Certain Actions. Without limiting the generality
of the foregoing, and except as otherwise expressly provided in this
Agreement, prior to the Closing, neither the Company nor the Company
Subsidiaries, on the one hand, nor Bionova Mexico, Bionova U.S., Sub or the
Bionova Group, on the other hand, shall, without the prior written consent of
Bionova U.S. in the case of the Company and the Company Subsidiaries, and the
Company in the case of Bionova Mexico, Bionova U.S., Sub and the Bionova
Group, take any of the following actions, except the actions set forth on
Schedule 6.2A (in the case of the Company and the Company Subsidiaries) and
Schedule 6.2B (in the case of Bionova Mexico, Bionova U.S., Sub or the Bionova
Group), which are actions for which each party hereto hereby gives its
consent:
(a) amend its charter or bylaws or other governing instruments
in effect on the date of this Agreement;
(b) (i) issue, sell, or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to
purchase, or otherwise) any shares of its capital stock of any class or
any other securities or equity equivalents; or (ii) amend in any respect
any of the terms of any such securities outstanding as of the date
hereof;
(c) (i) split, combine, or reclassify any shares of its capital
stock; (ii) declare, set aside, or pay any dividend or other
distribution (whether in cash, stock, or property or any combination
thereof) in respect of its capital stock; (iii) repurchase, redeem, or
otherwise acquire any of its securities or any securities of any
Subsidiary except pursuant to contractual arrangements in effect on the
date hereof which have been disclosed to Bionova U.S.; or (iv) adopt a
plan of complete or partial liquidation or resolutions providing for or
authorizing a liquidation, dissolution, merger, consolidation,
restructuring, recapitalization, or other reorganization;
(d) (i) create, incur, guarantee, or assume any indebtedness for
borrowed money or otherwise become liable or responsible for the
obligations of any other person except for obligations of majority owned
subsidiaries; (ii) make any loans, advances, or capital contributions
to, or investments in, any other person (other than to majority owned
subsidiaries and customary loans or advances to employees in amounts not
material to the maker of such loan or advance); (iii) pledge or
otherwise encumber shares of capital stock; or (iv) mortgage or pledge
any of its material assets, tangible or intangible, or create or suffer
to exist any material lien thereupon;
(e) (i) enter into, adopt, or (except as may be required by law)
amend or terminate any bonus, profit sharing, compensation, severance,
termination, stock option, stock appreciation right, restricted stock,
performance unit, stock equivalent, stock purchase, pension, retirement,
deferred compensation, employment, severance, or other employee benefit
agreement, trust, plan, fund, or other arrangement for the benefit or
welfare of any director, officer, or employee; (ii) increase in any
manner the compensation or fringe benefits of any director, officer, or
employee; or (iii) pay to any director, officer, or employee any benefit
not required by any employee benefit agreement, trust, plan, fund, or
other arrangement as in effect on the date hereof;
(f) acquire, sell, lease, transfer, or otherwise dispose of,
directly or indirectly, any assets outside the ordinary course of
business consistent with past practice or any amount of assets that in
the aggregate is material to its business;
(g) acquire (by merger, consolidation, or acquisition of stock
or assets or otherwise) any corporation, partnership, or other business
organization or division thereof;
(h) make any capital expenditure or expenditures which in the
aggregate are in excess of $1,000,000;
(i) amend any Tax Return or make any Tax election or settle or
compromise any material federal, state, local, or foreign Tax
controversy;
(j) pay, discharge, or satisfy any claims, liabilities, or
obligations (whether accrued, absolute, contingent, unliquidated, or
otherwise, and whether asserted or unasserted), other than the payment,
discharge, or satisfaction in the ordinary course of business consistent
with past practice, or in accordance with their terms, of liabilities
reflected or reserved against in its financial statements or incurred
since September 30, 1995 in the ordinary course of business consistent
with past practice;
(k) enter into any lease, contract, agreement, commitment,
arrangement, or transaction outside the ordinary course of business
consistent with past practice;
(l) amend, modify, or change in any material respect any
existing lease, contract, or agreement, other than in the ordinary
course of business consistent with past practice;
(m) waive, release, grant, or transfer any rights of value,
other than in the ordinary course of business consistent with past
practice;
(n) change any of its banking or safe deposit arrangements;
(o) change any of the accounting principles or practices used by
it;
(p) take any action which would or likely might make any of its
representations or warranties contained in this Agreement untrue or
inaccurate as of any time from the date of this Agreement to the Closing
or would or might likely result in any of the conditions set forth in
this Agreement not being satisfied;
(q) except as specifically permitted under the Sole Patent
License, separately license, sell or otherwise dispose of any patents,
technology, intellectual property or similar items to any third parties;
or
(r) authorize or propose, or agree in writing or otherwise to
take, any of the actions described in this Section.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Access to Information; Confidentiality.
(a) Between the date hereof and the Closing, the Company (i)
shall give each of Parent, Bionova Mexico, Bionova U.S. and Sub and
their authorized representatives reasonable access to all employees, all
plants, offices, warehouses, and other facilities, and all books and
records, including work papers and other materials prepared by the
Company's independent public accountants, of the Company and the Company
Subsidiaries, (ii) shall permit each of Parent, Bionova Mexico, Bionova
U.S. and Sub and their authorized representatives to make such
inspections as they may reasonably require, and (iii) shall cause the
Company's officers and those of the Company Subsidiaries to furnish each
of Parent, Bionova Mexico, Bionova U.S. and Sub and their authorized
representatives with such financial and operating data and other
information with respect to the Company and the Company Subsidiaries as
they may from time to time reasonably request; provided, however, that
no investigation pursuant to this Section shall affect any
representation or warranty of the Company contained in this Agreement or
in any agreement, instrument, or document delivered pursuant hereto or
in connection herewith; and provided further that the Company shall have
the right to have a representative present at all times of any such
inspections, interviews, and examinations conducted at or on the offices
or other facilities or properties of the Company or its affiliates or
representatives. Each of Parent, Bionova Mexico, Bionova U.S. and Sub
and their authorized representatives shall hold in confidence all such
information on the terms and subject to the conditions contained in the
Confidentiality Agreement dated July 12, 1995, between the Company and
Bionova U.S., as amended and supplemented (the "Confidentiality
Agreement").
(b) Between the date hereof and the Closing, Parent, Bionova
Mexico, Bionova U.S., Sub and the Bionova Group (i) shall give the
Company and its authorized representatives reasonable access to all
employees, all plants, offices, warehouses, and other facilities, and
all books and records, including work papers and other materials
prepared by Bionova Mexico, Bionova U.S., Sub and the Bionova Group's
independent public accountants, (ii) shall permit the Company and its
authorized representatives to make such inspections as they may
reasonably require, and (iii) shall cause Bionova Mexico, Bionova U.S.,
Sub and the Bionova Group's officers to furnish the Company and its
authorized representatives with such financial and operating data and
other information with respect to Bionova Mexico, Bionova U.S., Sub and
the Bionova Group as the Company may from time to time reasonably
request; provided, however, that no investigation pursuant to this
Section shall affect any representation or warranty of Parent, Bionova
Mexico, Bionova U.S. or Sub contained in this Agreement or in any
agreement, instrument, or document delivered pursuant hereto or in
connection herewith; and provided further that Parent, Bionova Mexico,
Bionova U.S. or Sub shall have the right to have a representative
present at all times of any such inspections, interviews, and
examinations conducted at or on the offices or other facilities or
properties of Bionova Mexico, Bionova U.S., Sub or the Bionova Group or
its affiliates or representatives. The Company and its authorized
representatives shall hold in confidence all such information on the
terms and subject to the conditions contained in the Confidentiality
Agreement.
7.2 Acquisition Proposals.
(a) Except as provided in Section 7.2(b), none of the Company or
any affiliate, director, officer, employee, or representative of the
Company shall (i) directly or indirectly, solicit or initiate
discussions or negotiations with any person (other than Parent)
concerning any merger, consolidation, sale of assets, tender offer, sale
of shares of capital stock, or similar transaction involving the Company
or any Subsidiary, the securities of the Company, or any significant
assets of the Company or any Subsidiary (each an "Acquisition
Proposal"), or (ii) disclose directly or indirectly to any person
preparing to make an Acquisition Proposal any confidential information
regarding the Company or any Subsidiary, or (iii) enter into any
agreement, arrangement, understanding, or commitment regarding any
Acquisition Proposal. Notwithstanding the immediately preceding
sentence, the Board of Directors, officers, employees and
representatives of the Company may (a) take the actions described in
clauses (ii) and (iii) of the immediately preceding sentence in response
to solicitations and transactions which may, in the reasonable judgement
of the Board of Directors of the Company, ultimately result, directly or
indirectly, in ultimate consideration or value more favorable to the
stockholders of the Company than the consideration payable under (or
value represented by) this Agreement, and (b) under the circumstances
described in clause (a) above, provide confidential information to a
potential purchaser upon the prior written request of such purchaser who
the Board of Directors of the Company reasonably believes is qualified
and is credit worthy. Any disclosure made under this Section 7.2 shall
be made subject to an appropriate confidentiality agreement, and shall
be made only if the request for such disclosure did not arise as a
result of any solicitation for expression of interest made in violation
of this Section by the Company or its affiliates, directors, officers,
employees, or representatives. The Company shall notify Bionova U.S.
promptly if it discloses any confidential information to a potential
purchaser as provided in this Section. The Company shall also notify
Bionova U.S. promptly of the receipt of any Acquisition Proposal after
the date of this Agreement. The Company shall also notify Bionova U.S.
promptly of its determination to accept any Acquisition Proposal.
(b) Notwithstanding the provisions of Section 7.2(a), the
Company shall be permitted, subject to the provisions of Section 7.7,
within ten days of the date of this Agreement to issue a press release
announcing the Merger and its material terms and stating that the
Company's management and financial advisors would be available to
receive inquiries from any other parties interested in the possible
acquisition of the Company and, as appropriate, to provide information
and enter into discussions and negotiations with such parties in
connection with such indicated interest.
7.3 Special Meeting; Proxy Statement. The Company shall take all
action necessary in accordance with State Law and the Company's Certificate of
Incorporation and Bylaws to duly call, give notice of, convene, and hold a
special meeting of its stockholders (the "Special Meeting") as promptly as
practicable after the date hereof to consider and vote upon the adoption and
approval of this Agreement and the Merger. The Board of Directors of the
Company shall, subject to its fiduciary obligations to the Company's
stockholders under Applicable Law as advised by counsel, (i) recommend to the
stockholders of the Company that they vote in favor of the adoption and
approval of this Agreement and the Merger, (ii) use its reasonable best
efforts to solicit from the stockholders of the Company proxies in favor of
such adoption and approval, and (iii) take all other action reasonably
necessary to secure a vote of the stockholders of the Company in favor of such
adoption and approval.
7.4 Proxy Statement/Registration Statement. As promptly as
practicable after the date hereof, the Company shall prepare and file, or
cause to be prepared and filed, with the assistance and consent of Bionova
U.S., a proxy statement with the SEC under the Exchange Act. The term "Proxy
Statement," as used herein means such proxy statement and all amendments and
supplements thereto, if any. The Company shall use all reasonable best
efforts to have the proxy statement cleared with the SEC as promptly as
practicable after the filing thereof. As promptly as practicable after the
date hereof, Bionova U.S., with the assistance and consent of the Company,
shall prepare and file with the Securities and Exchange Commission a
registration statement on an appropriate form (which will contain a prospectus
to be used by the Company as the Proxy Statement) for the purpose of
registering under the Securities Act the offering, sale, and delivery of the
Bionova U.S. Common Stock to be issued to the stockholders of the Company
pursuant to the Merger. The term "Registration Statement", as used herein,
means such registration statement and all amendments and supplements thereto,
if any. Bionova U.S. shall use all reasonable best efforts to have the
Registration Statement declared effective under the Securities Act as promptly
as practicable after the filing thereof. Bionova U.S. or the Company, as the
case may be, shall notify the other promptly of the receipt of any comments
on, or any requests for amendments or supplements to, the Proxy Statement or
the Registration Statement by the Securities and Exchange Commission, and each
shall supply the other with copies of all correspondence between it and its
representatives, on the one hand, and the Securities and Exchange Commission
or members of its staff, on the other, with respect to the Proxy Statement or
the Registration Statement. Bionova U.S. or the Company, as the case may be,
after consultation with and the consent of the other, shall use its reasonable
best efforts to respond promptly to any comments made by the Securities and
Exchange Commission with respect to the Proxy Statement or the Registration
Statement. The Company shall obtain the approval of Bionova U.S. and Bionova
U.S. shall obtain the approval of the Company, before making any filings with
the Securities and Exchange Commission pertaining to the Proxy Statement or
the Registration Statement or any matter pertaining to this Agreement.
Parent, Bionova U.S., Sub, and the Company each agrees promptly to
correct any information provided by it for use in the Proxy Statement or the
Registration Statement if and to the extent that such information shall have
become false or misleading in any material respect, and Bionova U.S. further
agrees to take all steps necessary to cause the Proxy Statement or the
Registration Statement (or the prospectus contained therein) as so corrected
to be filed with the Securities and Exchange Commission and to be disseminated
promptly to holders of shares of Company Stock, in each case as and to the
extent required by Applicable Law. Bionova U.S. shall also take any action
reasonably required to be taken under any applicable state securities laws in
connection with the issuance of Bionova U.S. Common Stock pursuant to the
Merger, and the Company shall furnish all information concerning the Company
and its stockholders as may be reasonably requested in connection with any
such action.
Bionova U.S. shall prepare and file with the SEC a registration
statement on Form 8-A registering the Bionova U.S. Common Stock as a class of
"equity securities" under the Exchange Act prior to effectiveness of the
Registration Statement.
7.5 Reasonable Best Efforts. Each party hereto agrees that it will
not voluntarily undertake any course of action inconsistent with the
provisions or intent of this Agreement and will use its reasonable best
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things reasonably necessary, proper, or advisable under Applicable
Laws to consummate the transactions contemplated by this Agreement, including,
without limitation, (i) cooperation in the preparation and filing of the
Registration Statement; (ii) reasonable best efforts to have the Registration
Statement cleared and declared effective by the Securities and Exchange
Commission as promptly as practicable after filing; (iii) cooperation in
determining whether any consents, approvals, orders, authorizations, waivers,
declarations, filings, or registrations of or with any Governmental Entity or
third party are required in connection with the consummation of the
transactions contemplated hereby; (iv) reasonable best efforts to obtain any
such consents, approvals, orders, authorizations, and waivers and to effect
any such declarations, filings, and registrations; (v) reasonable best efforts
to cause to be lifted or rescinded any injunction or restraining order or
other order adversely affecting the ability of the parties to consummate the
transactions contemplated hereby; (vi) reasonable best efforts to defend, and
cooperation in defending, all lawsuits or other legal proceedings challenging
this Agreement or the consummation of the transactions contemplated hereby;
and (vii) the execution of any additional instruments necessary to consummate
the transactions contemplated hereby.
7.6 HSR Act Notification. To the extent required by the HSR Act, each
of the parties hereto shall (i) file or cause to be filed, as promptly as
practicable after the execution and delivery of this Agreement, with the
Federal Trade Commission and the United States Department of Justice, all
reports and other documents required to be filed by such party under the HSR
Act concerning the transactions contemplated hereby and (ii) promptly comply
with or cause to be complied with any requests by the Federal Trade Commission
or the United States Department of Justice for additional information
concerning such transactions, in each case so that the waiting period
applicable to this Agreement and the transactions contemplated hereby under
the HSR Act shall expire as soon as practicable after the execution and
delivery of this Agreement. Prior to making any filing under the HSR Act,
each party will obtain the consent of the other party to the content of such
filing, which consent shall not be unreasonably withheld. Each party hereto
agrees to request, and to cooperate with the other party or parties in
requesting, early termination of any applicable waiting period under the HSR
Act. The filing fees and other costs of compliance with the HSR Act (other
than each party's attorneys' and accountant's fees and other third party
expenses) shall be borne equally by Bionova U.S. and the Company.
7.7 Public Announcements. Except as may be required by Applicable Law
or the National Association of Securities Dealers, Inc., neither Parent,
Bionova U.S. or any member of the Bionova Group, on the one hand, nor the
Company or the Company Subsidiaries, on the other, shall issue any press
release or otherwise make any public statement with respect to this Agreement
or the transactions contemplated hereby without the prior written consent of
the other party (which consent shall not be unreasonably withheld or delayed).
Any such press release or public statement required by Applicable Law or by
the National Association of Securities Dealers, Inc. shall only be made after
reasonable notice to the other party.
7.8 Delivery and Amendment of Schedules. Each of Bionova U.S. and the
Company shall deliver all Schedules relating to the representations and
warranties of such party contained in this Agreement to the other party
simultaneously with the execution of this Agreement, except that (i) the
following schedules may be delivered up to thirty days after the date this
Agreement is signed: Schedules 7.8A, 7.8B, 7.8C, 9.5 and 10.4; and
(ii) Schedules 7.9A and 7.9B may be delivered on February 28, 1996. Any date
on which a party delivers any such Schedule is referred to as a "Schedule
Delivery Date" for such party. Each party hereto agrees that, with respect to
the representations and warranties of such party contained in this Agreement,
such party shall have the continuing obligation until the Closing to
supplement or amend promptly the Schedules hereto with respect to any matter
hereafter arising or discovered which, if existing or known on a Schedule
Delivery Date, would have been required to be set forth or described in the
Schedules, including, without limitation, any material development with
respect to any pending on threatened litigation or governmental proceeding
previously disclosed in the Schedules. For all purposes of this Agreement,
including without limitation for purposes of determining whether the
conditions set forth in Sections 9.1 and 10.1 have been fulfilled, the
Schedules hereto shall be deemed to include only that information contained
therein on a Schedule Delivery Date and shall be deemed to exclude all
information contained in any supplement or amendment thereto; provided,
however, that if the Closing shall occur, then all matters disclosed pursuant
to any such supplement or amendment at or prior to the Closing shall be waived
and no party shall be entitled to make a claim thereon pursuant to the terms
of this Agreement. In addition to those schedules specifically referenced in
any other section of this Agreement, each of the parties hereto shall be
entitled to deliver to the other as provided in clause (i) above an omnibus
disclosure schedule through which they shall be entitled to supplement any of
the representations and warranties set forth in Articles III, IV and V hereof.
Any such omnibus disclosure schedule shall be delivered as Schedule 7.8A in
the case of the Company and Schedule 7.8B in the case of Parent, Bionova
Mexico, Bionova U.S. or Sub. Any documents referred to in either such
Schedule shall be delivered to the other party by the disclosing party
simultaneously with the delivery of Schedule 7.8A or 7.8B, as the case may be.
Schedule 7.8C referred to above shall consist of documents referenced in the
Schedules to the representations set forth in Articles IV and V together with
certain other documents requested by the Company in a written document request
to Bionova U.S. from the Company (or its counsel) dated January 25, 1996. The
failure to timely deliver any schedule required to be delivered after the date
hereof shall be deemed a material breach for all purposes hereof.
7.9 Delivery of 1995 Audited Financial Statements.
(a) On or before February 28, 1996, Bionova U.S. shall deliver
to the Company copies of the Bionova Group's audited consolidated
balance sheet as of December 31, 1995, and the related consolidated
statements of income, stockholders' equity, and cash flows for the year
then ended, and the notes and schedules thereto, prepared in accordance
with United States generally accepted accounting principles, which
financial statements shall be delivered as Schedule 7.9A hereto. Such
financial statements shall be accompanied by the audit report of a
nationally recognized "Big Six" accounting firm.
(b) On or before February 28, 1996, the Company shall deliver to
Bionova U.S. copies of the Company's audited consolidated balance sheet
as of December 31, 1995, and the related consolidated statements of
income, stockholders' equity, and cash flows for the year then ended,
and the notes and schedules thereto, prepared in accordance with United
States generally accepted accounting principles, which financial
statements shall be delivered as Schedule 7.9B hereto. Such financial
statements shall be accompanied by the audit report of a nationally
recognized "Big Six" accounting firm.
7.10 Notice of Litigation. Until the Closing, (i) Parent, Bionova
Mexico, Bionova U.S., and Sub upon learning of the same, shall promptly notify
the Company of any Proceeding which is commenced or threatened against Parent
(pertaining solely to the transactions contemplated by this Agreement),
Bionova Mexico, Bionova U.S., or the Bionova Group and (ii) the Company, upon
learning of the same, shall promptly notify Bionova U.S. of any Proceeding
which is commenced or threatened against the Company or a Company Subsidiary.
7.11 Notification of Certain Matters. The Company shall give prompt
notice to Bionova U.S. of the occurrence or nonoccurrence of any event the
occurrence or nonoccurrence of which would be likely to cause any
representation or warranty contained in Article III to be untrue or inaccurate
in any material respect at or prior to the Closing. Parent, Bionova Mexico,
Bionova U.S. and Sub shall give prompt notice to the Company of the occurrence
or nonoccurrence of any event the occurrence or nonoccurrence of which would
be likely to cause any representation or warranty contained in Article IV or
Article V to be untrue or inaccurate in any material respect at or prior to
the Closing. The delivery of any notice pursuant to this Section shall not be
deemed to (i) modify the representations or warranties hereunder of the party
delivering such notice, (ii) modify the conditions set forth in Articles IX
and X, or (iii) limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
7.12 Bionova U.S. Standstill. Prior to the earlier of the Closing or
the termination of this Agreement, none of Parent, Bionova Mexico, the Bionova
Group, or any affiliate, director, officer, employee, or representative of
Parent, Bionova Mexico or the Bionova Group shall (i) directly or indirectly,
solicit, initiate, or conduct discussions or negotiations with any person
(other than the Company) concerning any merger, consolidation, sale of assets,
tender offer, sale of shares of capital stock, or similar transaction
involving Bionova Mexico or the Bionova Group, the securities of the Bionova
Group, or any significant assets of Bionova Mexico or the Bionova Group which
would result in a change in control of Bionova Mexico or the Bionova Group
other than as contemplated by this Agreement (each a "Bionova Acquisition
Proposal"), or (ii) disclose directly or indirectly to any person preparing to
make a Bionova Acquisition Proposal any confidential information regarding the
Bionova Group, or (iii) enter into any agreement, arrangement, understanding,
or commitment regarding any Bionova Acquisition Proposal. Notwithstanding the
immediately preceding sentence, the Boards of Directors of Parent, Bionova
Mexico, Bionova U.S., Sub and the Bionova Group may take any of the actions
described in the preceding sentence where they have been advised by legal
counsel that taking such actions is advisable in order to fulfill their
fiduciary duties. Bionova U.S. shall notify the Company promptly of any
Bionova Acquisition Proposal that is received after the date of this Agreement
and which a related party desires to accept and shall inform the Company if
the Board of Directors of any such party has been advised by counsel to
consider such Bionova Acquisition Proposal in order to fulfill the directors'
fiduciary duties and shall provide to the Company such information regarding
the Bionova Acquisition Proposal as the Company may reasonably request.
7.13 Indemnification and Insurance. To the full extent permitted by
Applicable Law, and subject to the limitations contained in Applicable Law,
all rights to indemnification now existing in favor of the directors of the
Company as provided in its Certificate of Incorporation or Bylaws in effect on
the date of this Agreement shall survive the Merger and shall continue in full
force and effect for such period as shall be permitted by Applicable Law and
shall be deemed to cover and constitute indemnification obligations of the
Surviving Corporation with respect to acts or omissions by such directors
through and including the Effective Time of the Merger (but not thereafter).
The Surviving Corporation shall cause to be maintained for a period of three
years from the Effective Time of the Merger for the benefit of such directors,
policies of directors' and officers' liability insurance providing coverage no
less favorable than the policies currently maintained by the Company with
respect to matters occurring through and including the Effective Time of the
Merger (but not thereafter) and with aggregate limits equal to not less than
three times the aggregate limits of such currently maintained policies.
During such three year period, Bionova U.S. will fund any "deductible" amount
specified in any such policies in the event that a claim is asserted which
implicates such policies and then only to the extent that the Surviving
Corporation is permitted to do so under such policies and Applicable Law but
is unable to do so because of its financial condition. In the event that
Bionova U.S. or the Surviving Corporation or any of its successors and assigns
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger
or transfers and conveys all or substantially all of its property and assets
to any person, then, and in each case, proper provisions shall be made so that
the successor and assigns of Bionova U.S. or the Surviving Corporation, as the
case may be, assume the obligations set forth in this Section 7.13.
The provisions of this Section 7.13 are intended to be for the benefit
of, and shall be enforceable by, each aforementioned indemnified party, his
heirs and representatives, and may not be amended, altered or repealed without
the written consent of any such indemnified party.
7.14 Limited Guaranty of Parent. For a period of three years from the
Effective Time of the Merger, Parent covenants to provide when requested by
Bionova U.S. a guarantee in a form reasonably acceptable to the applicable
financial institution of Bionova U.S.'s obligations to such financial
institution pursuant to a loan or line of credit (a "Loan") if and only if
(i) Parent's maximum exposure under the guaranty is limited to $20 million,
and (ii) the documents evidencing the Loan provide that the amounts loaned to
Bionova U.S. from time to time will not exceed the sum of 80% of its and its
consolidated subsidiaries' accounts receivable from time to time plus 50% of
its and its consolidated subsidiaries' inventory from time to time and will be
secured by both such accounts and inventory.
7.15 Governing Documents. Prior to the Closing, Parent shall (i) cause
the governing documents of each of ABSA, Interfruver S.A. de C.V., Asesoria y
Servicios del Noreste, S.A. de C.V., Excelencia en Frutas y Verduras, S.A. de
C.V., Premier del Xxxxxxxx, X.X. de C.V. and Comercializadora Premier S.A. de
C.V. to be amended to permit the foreign ownership of such entities capital
stock to the maximum extent permitted by Mexican law, and (ii) cause the
governing documents of ABSA to be amended to reduce the quorum required to
conduct ordinary meetings of the equity owners to a simple majority of the
outstanding capital stock of ABSA and to provide that a concurring vote of a
simple majority of the present and voted capital stock of ABSA is sufficient
to validly pass resolutions at such meetings on such matters that do not
require a higher vote under Applicable Law or other governing documents. Such
amendments shall be in the form set forth in Schedule 7.15.
7.16 Fairness Opinion. The Company shall use its best efforts to
obtain the fairness opinion referenced in Section 9.4 not later than the date
set forth therein.
7.17 Bionova U.S. Organizational Documents. Not later than the Closing
Date, Parent shall cause the certificate of incorporation and bylaws of
Bionova U.S., copies of which are included in Schedule 4.3, to be amended if
necessary under State Law, in the reasonable judgment of the parties hereto,
to accomplish the purpose, and to carry out the intent, of the Governance
Agreement.
7.18 Notices. To the extent that the Company and the Company
Subsidiaries, on the one hand, and Parent, Bionova Mexico, Bionova U.S., Sub
or any member of the Bionova Group, on the other hand, are required under the
terms of any agreement or arrangement, whether written or oral, to notify any
third party or to take any other action as a result of the transactions
contemplated hereby or the Ancillary Documents, they will effect any such
notice or action not later than the date specified in any such agreement or
arrangement.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF THE PARTIES
The obligations of Parent, Bionova Mexico, Bionova U.S., Sub, and the
Company to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment on or prior to the Closing Date of each of the
following conditions:
8.1 HSR Act. All waiting periods (and any extensions thereof)
applicable to this Agreement and the transactions contemplated hereby under
the HSR Act shall have expired or been terminated.
8.2 Stockholder Approval. This Agreement and the Merger shall have
been duly and validly adopted and approved by the requisite vote of the
holders of Company Common Stock in accordance with the Certificate of
Incorporation and Bylaws of the Company, the rules of the NASDAQ NMS, and
Applicable Law.
8.3 Legal Proceedings. No Proceeding shall, on the Closing Date, be
pending seeking to restrain, prohibit, or obtain damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated hereby.
8.4 Registration Statement. The Registration Statement shall have
been declared effective, and no stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for such purpose
shall be pending before or threatened by the Securities and Exchange
Commission.
8.5 Bionova U.S. Common Stock. The Bionova U.S. Common Stock to be
issued in connection with the Merger shall have been authorized for quotation
on the NASDAQ NMS.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment on or prior
to the Closing Date of each of the following conditions:
9.1 Representations and Warranties True. All the representations and
warranties of Parent, Bionova Mexico, Bionova U.S. and Sub contained in this
Agreement, and in any agreement, instrument, or document delivered pursuant
hereto or in connection herewith on or prior to the Closing Date, shall be
true and correct in all material respects as of the date made and (having been
deemed to have been made again on and as of the Closing Date in the same
language) shall be true and correct in all material respects on and as of the
Closing Date, except as affected by transactions permitted by this Agreement
and except to the extent that any such representation or warranty is made as
of a specified date, in which case such representation or warranty shall have
been true and correct in all material respects as of such specified date.
9.2 Covenants and Agreements Performed. Parent, Bionova Mexico,
Bionova U.S. and Sub shall have performed and complied with in all material
respects all covenants and agreements required by this Agreement and the
Auxiliary Agreements to be performed or complied with by it on or prior to the
Closing Date.
9.3 Certificate. The Company shall have received a certificate
executed on behalf of Parent, Bionova Mexico, Bionova U.S. and Sub by the duly
authorized chief executive officer or chief financial officer and the
secretary of Parent, Bionova Mexico, Bionova U.S. and Sub, dated the Closing
Date, representing and certifying, in such detail as the Company may
reasonably request, that the conditions set forth in this Article IX have been
fulfilled and that Parent, Bionova Mexico, Bionova U.S. and Sub are not in
breach of any provision of this Agreement.
9.4 Fairness Opinion. The Board of Directors of the Company shall
have received a written opinion, in form and substance reasonably satisfactory
to the Board, of a nationally recognized investment banking firm, dated the
date of this Agreement, to the effect that the consideration to be received by
the stockholders of the Company pursuant to the Merger is fair, from a
financial point of view, to the stockholders of the Company, and such opinion
shall not have been amended in a manner adverse to the Company or its
stockholders or withdrawn.
9.5 Legal Opinion. The Company shall have been provided with a legal
opinion of Xxxxxxxx & Knight, P.C., in form and substance reasonably
satisfactory to the Company, as to the matters specified in Schedule 9.5. In
rendering such legal opinion, such counsel may rely on the opinions of other
acceptable legal counsel as to matters not covered by U.S. or Texas laws or as
otherwise agreed to by the Company.
9.6 No Material Adverse Change. Since December 31, 1995, there shall
not have occurred any Bionova Xxxxx Xxxxxxxx Adverse Effect.
9.7 Phase I Environmental. The Company shall have been provided not
later than the date on which the Company's preliminary Proxy Statement is
first transmitted to the Securities and Exchange Commission with a Phase I
environmental review (or its equivalent according to the applicable standards
in the country where the property is located), in form and content reasonably
satisfactory to the Company, with respect to all material real estate owned,
leased or operated by the Bionova Group (other than leased real estate used
exclusively for executive office purposes); provided that to the extent that
the Bionova Group has obtained a Phase I environmental review (or its
equivalent) on any such material property in the 18-month period prior to the
date of this Agreement, it shall not be required to obtain an updated version
thereof, subject to the reasonable acceptability of the form and content
thereof to the Company.
9.8 Governance Agreement. The Governance Agreement in the form
attached hereto as Schedule 9.8 shall have been executed and delivered by
Parent and Bionova U.S.
9.9 Long-Term Funded Research Agreement. The Long-Term Funded
Research Agreement in the form attached hereto as Schedule 9.9 shall have been
executed and delivered by the Company and Parent.
9.10 Severance Agreements. Severance agreements containing the
provision set forth in Schedule 9.10, together with such other terms and
conditions as shall be mutually satisfactory to the parties hereto, shall have
been executed by the Company and delivered to each of the Company's officers
and senior management specified in Schedule 9.10.
ARTICLE X
CONDITIONS TO OBLIGATIONS OF PARENT,
BIONOVA MEXICO, BIONOVA U.S. AND SUB
The obligations of Parent, Bionova Mexico, Bionova U.S., and Sub to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment on or prior to the Closing Date of each of the following
conditions:
10.1 Representations and Warranties True. All the representations and
warranties of the Company contained in this Agreement, and in any agreement,
instrument, or document delivered pursuant hereto or in connection herewith on
or prior to the Closing Date, shall be true and correct in all material
respects as of the date made and (having been deemed to have been made again
on and as of the Closing Date in the same language) shall be true and correct
in all material respects on and as of the Closing Date, except as affected by
transactions permitted by this Agreement and except to the extent that any
such representation or warranty is made as of a specified date, in which case
such representation or warranty shall have been true and correct in all
material respects as of such specified date.
10.2 Covenants and Agreements Performed. The Company shall have
performed and complied with in all material respects all covenants and
agreements required by this Agreement to be performed or complied with by it
on or prior to the Closing Date.
10.3 Certificate. Bionova U.S. shall have received a certificate
executed on behalf of the Company by the president and the vice president-
finance of the Company, dated the Closing Date, representing and certifying,
in such detail as Bionova U.S. may reasonably request, that the conditions set
forth in this Article X have been fulfilled and that the Company is not in
breach of any provision of this Agreement.
10.4 Legal Opinion. Bionova U.S. shall have been provided with a legal
opinion of Xxxxxxx, Xxxxx & Xxxxxx and/or Proskauer, Rose, Xxxxx & Xxxxxxxxxx,
LLP, in form and substance reasonably satisfactory to Bionova U.S., as to the
matters specified in Schedule 10.5. In rendering such legal opinion, such
counsel may rely on the opinions of other acceptable legal counsel as to
matters not covered by U.S., California or New York laws, as the case may be,
or as otherwise agreed to by Bionova U.S.
10.5 No Material Adverse Change. Since December 31, 1995, there shall
not have occurred any Company Material Adverse Effect.
10.6 Preemptive Rights. No party, if any, holding preemptive rights to
acquire capital stock or any other security of the Company or a Company
Subsidiary shall have notified the Company or the Company Subsidiary, as the
case may be, of the exercise of any such rights.
10.7 Phase I Environmental. Bionova U.S. shall have been provided not
later than the date on which the Company's preliminary Proxy Statement is
first transmitted to the Securities and Exchange Commission with a Phase I
environmental review (or its equivalent according to the applicable standards
in the country where the property is located), in form and content reasonably
satisfactory to Bionova U.S., with respect to all material real estate owned,
leased or operated by the Company or any Company Subsidiary (other than leased
real estate used exclusively for executive office purposes); provided that to
the extent that the Company or any Company Subsidiary has obtained a Phase I
environmental review (or its equivalent) on any such material property in the
18-month period prior to the date of this Agreement, it shall not be required
to obtain an updated version thereof, subject to the reasonable acceptability
of the form and content thereof to Bionova U.S.
10.8 Authorized Shares. Prior to June 30, 1996, the Company shall have
reserved sufficient authorized shares of Company Common Stock to meet its
contractual obligations to the holders of the options and/or warrants listed
on Schedule 10.8. Bionova U.S. acknowledges that in order to accomplish this,
the Company may be required to take action for which Bionova U.S.'s consent is
required pursuant to Section 6.2. If such consent is required, Bionova U.S.
agrees it shall not be unreasonably withheld or delayed.
ARTICLE XI
TERMINATION, AMENDMENT, AND WAIVER
11.1 Termination. With Bionova U.S. acting for such purpose on behalf
of itself and on behalf of Parent, Bionova Mexico and Sub, this Agreement may
be terminated and the transactions contemplated hereby abandoned at any time
prior to the Closing (notwithstanding any approval of this Agreement by the
stockholders of the Company) in the following manner:
(a) by mutual written consent of the Company and Bionova U.S.;
or
(b) by either the Company or Bionova U.S., if the Closing shall
not have occurred on or before July 31, 1996, unless such failure to
close shall be due to a breach of this Agreement by the party seeking to
terminate this Agreement pursuant to this clause (b); or
(c) by either the Company or Bionova U.S., if there shall be any
statute, rule, or regulation that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited or a Governmental
Entity shall have issued an order, decree, or ruling or taken any other
action permanently restraining, enjoining, or otherwise prohibiting the
consummation of the transactions contemplated hereby, and such order,
decree, ruling, or other action shall have become final and
nonappealable; or
(d) by either the Company or Bionova U.S., if the stockholders
of the Company shall have failed to approve this Agreement and the
Merger at a special meeting called for such purpose; or
(e) by the Company no later than fifteen days after a Schedule
Delivery Date for Bionova U.S. if, as a result of the delivery of any
such schedule on such date, the Company shall have become aware of
material facts relating to the business, assets, results of operations,
condition (financial or otherwise), or prospects of the Bionova Group
which, in the good faith judgment of the Company, make it inadvisable
for the Company to proceed with the consummation of the transactions
contemplated hereby; or
(f) by Bionova U.S. no later than fifteen days after a Schedule
Delivery Date for the Company if, as a result of the delivery of any
such schedule on such date, Bionova U.S. shall have become aware of
material facts relating to the business, assets, results of operations,
condition (financial or otherwise), or prospects of the Company or any
Company Subsidiary which, in the good faith judgment of Bionova U.S.,
make it inadvisable for Bionova U.S. to proceed with the consummation of
the transactions contemplated hereby; or
(g) by the Company, in the event of a material breach by Parent,
Bionova U.S., or Sub of any representation, warranty, covenant or
agreement contained herein which is not curable or has not been cured,
in the case of a representation or warranty, prior to the Closing or, in
the case of a covenant or agreement, within thirty days following
receipt by Bionova U.S. of written notice of such breach from the
Company; or
(h) by Bionova U.S., in the event of a material breach by the
Company of any representation, warranty, covenant or agreement contained
herein which is not curable or has not been cured, in the case of a
representation or warranty, prior to the Closing or, in the case of a
covenant or agreement, within thirty days following receipt by the
Company of written notice of such breach from Bionova U.S.; or
(i) by the Company, if, for the twelve month period ended
December 31, 1995, the Earnings Before Interest and Tax (net of minority
interests) of the entities that will constitute the Bionova Group as of
the Closing as set forth in the financial statements of the Bionova
Group delivered pursuant to Section 7.9(a) (Delivery of 1995 Audited
Financial Statements) are less than $6 million; or
(j) by either the Company or Bionova U.S., if the Board of
Directors of the Company shall have approved and/or recommended to the
stockholders of the Company an Alternative Transaction (as defined in
Section 11.3(e)).
11.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 11.1 by the Company, on the one hand, or Bionova
U.S., on the other, written notice thereof shall forthwith be given to the
other party specifying the provision hereof pursuant to which such termination
is made, and this Agreement shall become void and have no effect, except that
the agreements contained in this Section, in Sections 7.7 and 11.3, in Article
XII, and in applicable provisions of Article XIII shall survive the
termination hereof. Nothing contained in this Section shall relieve any party
from liability for damages actually incurred as a result of any breach of this
Agreement. No termination of this Agreement shall affect the obligations of
the parties pursuant to the Confidentiality Agreement referred to in
Section 7.1, except to the extent specified in such agreement.
11.3 Expenses.
(a) Except as otherwise expressly provided in this Agreement,
all fees and expenses, including fees and expenses of counsel, financial
advisors, and accountants, incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party
incurring such fee or expense, whether or not the transactions
contemplated hereby are consummated; provided, that all such fees and
expenses incurred by any of Bionova Mexico, Bionova U.S. or Sub shall be
paid by Parent (other than the expenses pertaining to compliance with
the HSR Act and the expenses associated with the printing and filing of
the Registration Statement, all of which shall be funded by Bionova
U.S.); and provided further, that Bionova U.S. and the Company shall
share equally all fees and expenses, other than attorney's fees,
incurred in relation to the printing and filing of the Registration
Statement (including any related preliminary materials) and any
amendments or supplements.
(b) The Company shall pay Bionova U.S. up to $1,500,000 as
reimbursement for expenses of Parent, Bionova Mexico, Bionova U.S., Sub
and the Bionova Group actually incurred relating to the transactions
contemplated by this Agreement prior to termination (including without
limitation fees and expenses of Bionova U.S.'s counsel, accountants and
financial advisers) upon the earliest to occur of the following:
(i) the termination of this Agreement by Bionova U.S.
pursuant to Section 11.1(f); or
(ii) the termination of this Agreement by Bionova U.S.
pursuant to Section 11.1(h) after a breach by the Company of this
Agreement; or
(iii) the termination of this Agreement pursuant to Section
11.1(j); or
(iv) the termination of the Agreement by the Company
pursuant to Section 11.1(b) at a time when Bionova U.S. could have
terminated the Agreement pursuant to Section 11.1(h).
(c) Parent or Bionova U.S. shall pay the Company up to
$1,500,000 as reimbursement for expenses of the Company actually
incurred relating to the transactions contemplated by this Agreement
prior to termination (including without limitation fees and expenses of
the Company's counsel, accountants and financial advisers) upon the
earliest to occur of the following:
(i) the termination of this Agreement by the Company
pursuant to Section 11.1(e); or
(ii) the termination of this Agreement by the Company
pursuant to Section 11.1(g) after a breach by Parent, Bionova
Mexico, Bionova U.S., or Sub of this Agreement; or
(iii) the termination of the Agreement by Bionova U.S.
pursuant to Section 11.1(b) at a time when the Company could have
terminated the Agreement pursuant to Section 11.1(g).
(d) In addition to any amounts required to be paid by the
Company pursuant to Section 11.3(b), the Company shall pay Bionova U.S.
(or any person designated by Bionova U.S. for such purpose) a fee equal
to the excess of $2,000,000 over the amount paid by the Company pursuant
to Section 11.3(b) if, within one year from the date of termination of
this Agreement for any of the reasons set forth in Section 11.3(b), an
Alternative Transaction occurs, the Company announces publicly its
intention to enter into an Alternative Transaction, or the Company
enters into an agreement contemplating an Alternative Transaction. Such
payment shall be made upon the earlier to occur of the events described
in the preceding sentence.
(e) As used in this Agreement, "Alternative Transaction" means
(i) a transaction pursuant to which any person (or group of persons)
other than Bionova U.S. or its affiliates (a "Third Party") acquires
capital stock (or other securities which are convertible, exchangeable
or exercisable into voting capital stock) of the Company representing
more than 15% (for purposes of Section 11.1(j)) or 35% (for purposes of
Section 11.3(d)) of the outstanding voting power of the Company, whether
from the Company, pursuant to a tender offer or exchange offer, or
otherwise; (ii) a merger or other business combination involving the
Company pursuant to which any Third Party acquires capital stock (or
other securities which are convertible, exchangeable or exercisable into
voting capital stock) of the Company representing more than 15% (for
purposes of Section 11.1(j)) or 35% (for purposes of Section 11.3(d)) of
the outstanding voting power of the Company or the entity surviving such
merger or business combination; or (iii) any other transaction pursuant
to which any Third Party acquires control of assets (including for this
purpose the outstanding equity securities of Subsidiaries of the
Company, and the entity surviving any merger or business combination
including any of them) of the Company having a fair market value equal
to more than 15% (for purposes of Section 11.1(j)) or 35% (for purposes
of Section 11.3(d)) of the fair market value of all the assets of the
Company immediately prior to such transaction.
11.4 Amendment. This Agreement may not be amended except by an
instrument in writing signed by or on behalf of all the parties hereto.
11.5 Waiver. Each of the Company and Bionova U.S. may (i) waive any
inaccuracies in the representations and warranties of the other contained
herein or in any document, certificate, or writing delivered pursuant hereto
or (ii) waive compliance by the other with any of the other's agreements or
fulfillment of any conditions to its own obligations contained herein. Any
agreement on the part of a party hereto to any such waiver shall be valid only
if set forth in an instrument in writing signed by or on behalf of such party.
No failure or delay by a party hereto in exercising any right, power, or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege.
ARTICLE XII
MISCELLANEOUS
12.1 Nonsurvival of Representations, Warranties, and Agreements. None
of the representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Closing and
the Effective Time, except for the agreements contained in Article I, Article
II, Article XII, and Sections 7.1, 7.5, 7.13, 7.14, 11.3, 12.2, 12.3, 12.5,
12.6 and 12.14.
12.2 Indemnification.
(a) Subject to the terms and conditions of this Section 12.2,
Parent shall indemnify and hold harmless Bionova U.S. from and against
any and all losses, damages, liabilities, judgments, settlements,
penalties, costs, and expenses (including reasonable attorneys' fees and
expenses), of any nature whatsoever (collectively, "Losses"), incurred
by Bionova U.S. or any member of the Bionova Group, directly or
indirectly, by reason of, relating to, or resulting from any of the
events ("Triggering Events") described on Schedule 12.2-1 (collectively,
"Company Claims").
(b) Parent shall not have any indemnification obligation
pursuant to this Section 12.2 or otherwise in respect of this Agreement
unless before the Claim Limitation Date it shall have received from
Bionova U.S. written notice that a Triggering Event has occurred (a
"Claim Notice"). The Claim Notice shall set forth with reasonable
specificity (i) the factual basis for asserting that a Triggering Event
has occurred and (ii) an estimate of the amount of Losses to be incurred
as a direct or indirect result of such Triggering Event (which estimate
shall not be conclusive of the final amount of indemnification) and an
explanation of the calculation of such estimate, including a statement
of any significant assumptions employed therein. The decision to
deliver a Claim Notice shall be in the sole discretion of the DNAP
Independent Directors as such term is defined in the Governance
Agreement. The "Claim Limitation Date" shall be the first anniversary
of the Closing Date (except for matters identified in items 1 and 4 of
Schedule 12.2-1, in which case the Claim Limitation Date shall be the
Final Claim Date, as defined below).
(c) The indemnification obligations of Parent pursuant to this
Section 12.2 shall be subject to the following limitations and other
provisions:
1. No indemnification shall be required to be made by
Parent with respect to any Company Claims unless the aggregate
amount of Losses incurred by Bionova U.S. and the Bionova Group
with respect to all Company Claims, less all reductions and other
adjustments provided for in this Section 12.2(c), exceeds
$300,000, in which event indemnification will relate back to the
first dollar of Loss.
2. Parent's indemnification obligation hereunder shall in
no event exceed $1,500,000.
3. Any indemnity payments owed by Parent to Bionova U.S.
pursuant to this Section 12.2 shall be reduced by the amount of
the Indemnity Offset, if any, provided that Parent has delivered
an Offset Notice to Bionova U.S. before the first anniversary of
the Closing Date. The "Indemnity Offset" shall be the aggregate
Losses incurred by Bionova U.S. and the Surviving Corporation by
reason of, relating to, or resulting from any of the events
described on Schedule 12.2-2 ("Offset Events"). "Offset Notice"
means a written notice setting forth with reasonable specificity
(i) the factual basis for asserting that an Offset Event has
occurred and (ii) an estimate of the amount of Losses to be
incurred as a direct or indirect result of such Offset Event
(which estimate shall not be conclusive of the final amount of
offset) and an explanation of the calculation of such estimate,
including a statement of any significant assumptions employed
therein.
4. Any indemnity payments owed by Parent to Bionova U.S.
pursuant to this Section 12.2 arising from Losses incurred by a
company of the Bionova Group shall be reduced to the product of
(x) the amount of such Losses multiplied by (y) the percentage of
the equity of such company owned directly or indirectly by Bionova
U.S.
5. Any indemnity payments owed by Parent to Bionova U.S.
pursuant to this Section 12.2 as a result of any Company Claim
shall be reduced to the extent of any amounts actually received by
Bionova U.S. or any other member of the Bionova Group pursuant to
the terms of any insurance policies or contractual indemnities
covering such claim. The amount of the Indemnity Offset shall
likewise be reduced to the extent of any amounts actually received
by Bionova U.S. or the Surviving Corporation pursuant to the terms
of any insurance policies or contractual indemnities covering such
matters.
6. Notwithstanding any other provision of this Section
12.2, Parent will have no obligation to make any payment to
Bionova U.S. relating to a matter described on Schedule 12.2-1
unless, prior to the date of the 1999 annual meeting of
shareholders of Bionova U.S. (the "Final Claim Date"), (i) a
Governmental Entity has issued an order or assessment against a
member of the Bionova Group with respect to that matter,
(ii) Bionova U.S. or a member of the Bionova Group has agreed to
make a payment in settlement of that matter, or (iii) Parent has
become obligated to make such payment pursuant to Section 12.2(d).
(d) With respect to any Company Claim for which a Claim Notice
was delivered to Parent prior to the applicable Claim Limitation Date,
Parent will pay Bionova U.S. the amount required to be paid by it
hereunder no later than ten days after receiving from Bionova U.S.
evidence of the actual payment by Bionova U.S. or a member of the
Bionova Group of the relevant Losses. If (i) an Offset Notice was
delivered to Bionova U.S. before the first anniversary of the Closing
Date, and (ii) Parent has made an indemnity payment to Bionova U.S.
under this Section 12.2, and (iii) thereafter, Bionova U.S. or the
Surviving Corporation incurs Losses constituting an Indemnity Offset,
then Bionova U.S. will pay Parent the amount of the Indemnity Offset no
later than ten days after receiving from Parent evidence of the actual
payment by Bionova U.S. or the Surviving Corporation of the Losses
constituting the Indemnity Offset; provided that in no event shall
Bionova U.S. be required to pay to Parent more than it has received from
Parent pursuant to this Section 12.2.
12.3 Notices. All notices, requests, demands, and other communications
required or permitted to be given or made hereunder by any party hereto shall
be in writing and shall be deemed to have been duly given or made if (i)
delivered personally, (ii) sent by prepaid overnight courier service, or (iii)
sent by telecopy or facsimile transmission, answer back requested, to the
parties at the following addresses (or at such other addresses as shall be
specified by the parties by like notice):
If to Parent, Bionova Mexico, Bionova U.S., or Sub:
c/o Pulsar Internacional, S.A. de C.V.
Edificio Torrealta
Av. Xxxxx 300 Mezzanine
66265 Xxxxx Xxxxxx, N.L.
Mexico
Attention: Lic. Xxxxxxxxx Xxxxxxx
Telefax: 000-000-000-0000
with a copy to:
Xxx X. Xxxxxxx
Xxxxxxxx & Knight, P.C.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telefax: (000) 000-0000
If to the Company:
DNA Plant Technology Corporation
0000 Xxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxx, Chief Executive Officer and
Legal Department
Telefax: (000) 000-0000
with a copy to:
Xxxxxxx, Xxxxx & Xxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: M. Xxxx Xxxxx
Telefax: (000) 000-0000
Such notices, requests, demands, and other communications shall be effective
upon actual receipt by the intended recipient.
12.4 Entire Agreement. This Agreement, together with the Schedules,
Ancillary Documents, Agreements, and other writings referred to herein or
delivered pursuant hereto, constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and thereof and
supersede all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and thereof.
12.5 Binding Effect; Assignment; No Third Party Benefit. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. Except as otherwise
expressly provided in this Agreement, neither this Agreement nor any of the
rights, interests, or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties. Except
as provided in Section 12.1, nothing in this Agreement, express or implied, is
intended to or shall confer upon any person other than the parties hereto, and
their respective successors and permitted assigns, any rights, benefits, or
remedies of any nature whatsoever under or by reason of this Agreement.
12.6 Severability. If any provision of this Agreement is held to be
unenforceable, this Agreement shall be considered divisible and such provision
shall be deemed inoperative to the extent it is deemed unenforceable, and in
all other respects this Agreement shall remain in full force and effect;
provided, however, that if any such provision may be made enforceable by
limitation thereof, then such provision shall be deemed to be so limited and
shall be enforceable to the maximum extent permitted by Applicable Law.
12.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
12.8 Further Assurances. From time to time following the Closing, at
the request of any party hereto and without further consideration, the other
party or parties hereto shall execute and deliver to such requesting party
such instruments and documents and take such other action (but without
incurring any financial obligation) as such requesting party may reasonably
request in order to consummate more fully and effectively the transactions
contemplated hereby.
12.9 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only, do not constitute a part of this
Agreement, and shall not affect in any manner the meaning or interpretation of
this Agreement.
12.10 Gender. Pronouns in masculine, feminine, and neuter genders shall
be construed to include any other gender, and words in the singular form
shall be construed to include the plural and vice versa, unless the context
otherwise requires.
12.11 References. All references in this Agreement to Articles,
Sections, and other subdivisions refer to the Articles, Sections, and other
subdivisions of this Agreement unless expressly provided otherwise. The words
"this Agreement", "herein", "hereof", "hereby", "hereunder", and words of
similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. Whenever the words "include",
"includes", and "including" are used in this Agreement, such words shall be
deemed to be followed by the words "without limitation". Unless the context
otherwise requires, each reference herein to a Schedule refers to the item
identified separately in writing by the parties hereto as the described
Schedule to this Agreement. All Schedules are hereby incorporated in and made
a part of this Agreement as if set forth in full herein.
12.12 Counterparts. This Agreement may be executed by the parties
hereto in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same agreement. Each
counterpart may consist of a number of copies hereof each signed by less than
all, but together signed by all, the parties hereto.
12.13 Assignment. Notwithstanding anything to the contrary set forth
herein and provided that Seminis, Inc. executes and delivers a written
instrument assuming all of Parent's obligations hereunder under such
circumstances, not later than the date on which the Proxy Statement is first
transmitted in preliminary form to the Securities and Exchange Commission,
Bionova Mexico shall be entitled to transfer its ownership interest in Bionova
U.S. to Seminis, Inc., a majority owned subsidiary of Parent, so that Bionova
U.S. then becomes a direct wholly-owned subsidiary of Seminis, Inc. Parent
shall notify the Company in writing of any such transfer and shall provide a
counterpart original of such instrument of assumption to the Company, which
instrument shall be in a form reasonably acceptable to the Company. After any
such transfer and upon the Effective Time of the Merger, Parent shall be
released from any further obligations hereunder (except for its obligations
under Sections 7.14, 11.3 and 12.2 and under the Governance Agreement and the
Long-Term Funded Research Agreement) and any representation and warranty or
other reference herein as to the ownership of the capital stock of Bionova
U.S. shall be deemed to have been amended to reflect such new ownership. Any
such transfer shall not affect the obligations of Bionova Mexico, Bionova U.S.
or Sub hereunder.
12.14 Confidentiality Agreement and Standstill. The Confidentiality
Agreement, including the standstill provisions included therein, shall survive
the execution and delivery of this Agreement and shall automatically
terminate, expire and be of no further force and effect upon the first to
occur of (i) the Effective Time of the Merger or (ii) the expiration date, if
any, set forth therein.
ARTICLE XIII
DEFINITIONS
13.1 Certain Defined Terms. As used in this Agreement, each of the
following terms has the meaning given it below:
"affiliate" has the meaning specified in Rule 12b-2 promulgated
under the Exchange Act (except as otherwise provided in Section 3.21 and
Section 5.16).
"Ancillary Documents" means each agreement, instrument, and
document (other than this Agreement) executed or to be executed by the
Company, Parent, Bionova Mexico, Sub or Bionova U.S. in connection with
the execution of this Agreement or the transactions contemplated hereby.
"Applicable Law" means any statute, law, rule, or regulation or
any judgment, order, writ, injunction, or decree of any Governmental
Entity to which a specified person or property is subject.
"Bionova Group" means Bionova, S.A. de C.V., a corporation
organized under the laws of the United Mexican States, International
Produce Holding Company, a Delaware corporation; R.B. Packing, Inc., an
Arizona corporation; Xxxxx and Sons, Inc., an Arizona corporation; R.B.
Packing of California, Inc., a California corporation; Tanimura
Distributing Inc., a California corporation; Premier Fruits and
Vegetables BBL Ltd., a Quebec corporation; Agricola Xxxxx, X.X. de C.V.,
a corporation organized under the laws of the United Mexican States;
Comercializadora Premier, S.A. de C.V. a corporation organized under the
laws of the United Mexican States; Interfruver, S.A. de C.V. a
corporation organized under the laws of the United Mexican States;
Premier del Xxxxxxxx, X.X. de C.V., a corporation organized under the
laws of the United Mexican States; Excelencia en Frutas y Verduras, S.A.
de C.V., a corporation organized under the laws of the United Mexican
States; Asesoria y Servicios del Noreste, S.A. de C.V., a corporation
organized under the laws of the United Mexican States; and R.B. Packing
of Texas, Inc., a Texas corporation.
"Bionova Xxxxx Xxxxxxxx Adverse Effect" means a material adverse
effect on the business, assets, results of operations, condition
(financial or otherwise), or prospects of Bionova Mexico, Bionova U.S.,
Sub, and the Bionova Group considered as a whole or on the ability of
Parent, Bionova Mexico, Bionova U.S., or Sub to perform on a timely
basis any material obligation of Bionova Mexico, Bionova U.S., Parent or
Sub under this Agreement or any agreement, instrument, or document
entered into or delivered in connection herewith.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Material Adverse Effect" means a material adverse effect
on the business, assets, results of operations, condition (financial or
otherwise), or prospects of the Company and the Company Subsidiaries
considered as a whole or on the ability of the Company to perform on a
timely basis any material obligation of the Company under this Agreement
or any agreement, instrument, or document entered into or delivered in
connection herewith.
"Encumbrances" means liens, charges, pledges, options, mortgages,
deeds of trust, security interests, claims, restrictions (whether on
voting, sale, transfer, disposition, or otherwise), easements, and other
encumbrances of every type and description, whether imposed by law,
agreement, understanding, or otherwise.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Governmental Entity" means any court or tribunal in any
jurisdiction (domestic or foreign) or any federal, state, municipal, or
other governmental body, agency, authority, department, commission,
board, bureau, or instrumentality (domestic or foreign).
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"independent director" means a person serving as a director of a
company other than an officer or employee of such company or its
subsidiaries or any other individual having a relationship which, in the
opinion of the board of directors of such company, would interfere with
the exercise by that person of independent judgment in carrying out the
responsibilities of a director.
"Intellectual Property" means patents, plant variety protection
certificate rights, breeders' rights, trademarks, service marks, trade
names, service names, brand names, copyrights, trade secrets, know-how,
technology, inventions, computer software (including documentation and
object and source codes), and similar rights, and all registrations,
applications, licenses, and rights with respect to any of the foregoing.
"IRS" means the Internal Revenue Service.
"Loan Agreement" means that certain Loan Agreement of even date
herewith between Bionova U.S. and the Company as well as the "Loan
Documents" referred to in Section 1.21 of such Loan Agreement.
"Non-Exclusive Patent License Agreement" means that certain Non-
Exclusive Patent License Agreement of even date herewith between the
Company and Bionova U.S.
"Permits" means licenses, permits, franchises, consents,
approvals, variances, exemptions, and other authorizations of or from
Governmental Entities.
"person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, enterprise,
unincorporated organization, or Governmental Entity.
"Proceedings" means all proceedings, actions, claims, suits,
investigations, and inquiries by or before any arbitrator or
Governmental Entity.
"reasonable best efforts" means a party's reasonable best efforts
in accordance with reasonable commercial practice and without the
incurrence of unreasonable expense.
"Securities Act" means the Securities Act of 1933, as amended.
"Sole Patent License" means that certain Sole Patent License
executed by Bionova U.S. and the Company as of the date of this
Agreement as required under the Loan Agreement.
"Subsidiary" means any corporation more than 50% of whose
outstanding voting securities, or any general partnership, joint
venture, or similar entity more than 50% of whose total equity
interests, is owned, directly or indirectly, by the relevant entity, or
any limited partnership of which the relevant entity or any Subsidiary
is a general partner. Subsidiaries of the Company are sometimes
referred to herein as "Company Subsidiaries."
"Tax" or "Taxes" means any income taxes or similar assessments or
any sales, excise, occupation, use, ad valorem, property, production,
severance, transportation, employment, payroll, franchise, or other tax
imposed by any United States federal, state, or local (or any foreign or
provincial) taxing authority, including any interest, penalties, or
additions attributable thereto.
"Tax Return" means any return or report, including any related or
supporting information, with respect to Taxes.
"to the best knowledge of the Company" (or similar references to
the Company's knowledge) means the knowledge of any of the Company's
officers, as such knowledge has been obtained in the normal conduct of
the business of the Company or in connection with the preparation of the
Schedules to this Agreement and the furnishing of information to Bionova
U.S. as contemplated by this Agreement, after having made a reasonable
investigation of the accuracy of the representations and warranties made
by the Company in this Agreement or in any document, certificate, or
other writing furnished by the Company to Bionova U.S. pursuant hereto
or in connection herewith.
"to the best knowledge of Bionova U.S." (or similar references to
Bionova U.S.'s knowledge) means the knowledge of any of Parent's,
Bionova Mexico, Bionova U.S.'s or Sub's officers, as such knowledge has
been obtained in the normal conduct of the business of the Bionova Group
or in connection with the preparation of the Schedules to this Agreement
and the furnishing of information to the Company as contemplated by this
Agreement, after having made a reasonable investigation of the accuracy
of the representations and warranties made by Parent, Bionova Mexico,
Bionova U.S. and Sub in this Agreement or in any document, certificate,
or other writing furnished by Parent, Bionova Mexico, Bionova U.S. and
Sub to the Company pursuant hereto or in connection herewith.
13.2 Certain Additional Defined Terms. In addition to such terms as
are defined in the opening paragraph of and the recitals to this Agreement and
in Section 13.1, the following terms are used in this Agreement as defined in
the Sections set forth opposite such terms:
Defined Term Section Reference
Acquisition Proposal 7.2
agreements 3.24; 5.19
AGS 3.22
Alternative Transaction 11.3
Applicable Environmental Laws 3.26
associate 5.25
Benefit Arrangements 3.25; 5.20
Bionova Group Financial Statements 5.5
Bionova U.S. Acquisition Proposal 7.12
Bionova U.S. Common Stock 2.1
Certificate 2.3
Claim Limitation Date 12.2
Claim Notice 12.2
Closing 1.3
Closing Date 1.3
Company Claims 12.2
Company Common Stock 2.1
Company Convertible Exchangeable Preferred Stock 2.1
Company Series A Preferred Stock 2.1
Company Stock 2.1
Company Stock Option 2.5
Confidential Information 7.1
Confidentiality Agreement 7.1
Dissenting Shares 2.2
Effective Time 1.2
Employee Plans 3.25; 5.16
Exchange Agent 2.3
Final Claim Date 12.2
Garching 3.22
hazardous material 3.26
Indemnity Offset 12.2
Losses 12.2
Merger 1.1
Merger Consideration 2.1
Multiemployer Plan 3.25; 5.20
NASDAQ NMS 2.3
Offset Events 12.2
Offset Notice 12.2
Option/License Agreement 3.22
Parent Directors 7.16
Payment Fund 2.3
Proxy Statement 7.3
Real Property 3.18; 5.13
Registration Statement 7.4
Schedule Delivery Date 7.8
SEC Filings 3.10
Special Meeting 7.3
State Law 1.1
Surviving Corporation 1.1
Third Party 11.3
Triggering Event 12.2
13.3 Construction. Unless herein otherwise provided, or unless the
context shall otherwise require, words importing the singular number shall
include the plural number, and vice versa; the terms "herein", "hereof",
"hereby", and "hereunder", or other similar terms, refer to this Agreement as
a whole and not only to the particular Article, Section, or other subdivision
in which any such terms may be employed; and references to Articles, Sections,
and other subdivisions refer to the Articles, Sections, and other subdivisions
of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
EMPRESAS LA MODERNA, DNA PLANT TECHNOLOGY
S.A. de C.V.
CORPORATION
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxx Name: Xxxxxx Xxxxxxxxx
Title: Director Title: Chief Executive Officer
By: /s/ Xxxx Xxxxxxxxx
Name: Xxxx Xxxxxxxxx
Title: Attorney-in-Fact
BIONOVA, S.A. de C.V.
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Director General
By: /s/ Xxxx Xxxxxxxxx
Name: Xxxx Xxxxxxxxx
Title: Attorney-in-Fact
BIONOVA U.S. INC.
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Chairman of the Board and Chief Executive Officer
BIONOVA ACQUISITION, INC.
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Chairman of the Board and Chief Executive Officer
