AGREEMENT AND PLAN OF REORGANIZATION

Exhibit 2.1

 

AGREEMENT AND PLAN OF REORGANIZATION

BY AND AMONG

TRIPLECROWN ACQUISITION CORP.,

CULLEN AGRICULTURAL HOLDING CORP.,

CAT MERGER SUB, INC.,

CULLEN AGRICULTURAL TECHNOLOGIES, INC.

and

CULLEN INC HOLDINGS LIMITED

DATED AS OF SEPTEMBER 4, 2009

 

AGREEMENT AND PLAN OF REORGANIZATION

 

THIS AGREEMENT AND PLAN OF REORGANIZATION is made and entered into as of September 4, 2009, by and among Triplecrown Acquisition Corp., a Delaware corporation (“ Parent ”), Cullen Agricultural Holding Corp., a Delaware corporation and wholly owned subsidiary of Parent (“ Holdco ”), CAT Merger Sub, Inc., a Georgia corporation and wholly owned subsidiary of Holdco (“ Merger Sub ”), Cullen Agricultural Technologies, Inc., a Georgia corporation (“ Company ”), and Cullen Inc Holdings Limited, a New Zealand limited company and the sole stockholder of the Company ( “ Stockholder ”).

 

RECITALS

 

A. Upon the terms and subject to the conditions of this Agreement (as defined in Section 1.3) and in accordance with the General Corporation Law of the State of Delaware (the “ DGCL ”) and the Georgia Corporate Code (“ GCC ” and together with the DGCL, the “ Applicable Corporate Law ”) and other applicable law, Parent and Company intend to enter into a business combination transaction by means of (i) a merger of Parent with and into Holdco, with Holdco surviving the merger and becoming the public company through the automatic conversion of all the issued and outstanding securities of Parent into a like type and numberof securities of Holdco as provided herein (the “ Parent Merger ”) and (ii) a merger of Merger Sub with and into the Company, with the Company surviving the merger and becoming a wholly owned subsidiary of Holdco through an exchange of all the issued and outstanding capital stock of the Company for shares of common stock of Holdco as provided herein (the “ Company Merger ” and, together with the Parent Merger, the “ Mergers ”).

 

B. The boards of directors of each of Parent, Holdco, Merger Sub, the Company and the Stockholder have determined that the Mergers are fair to, and in the best interests of, their respective companies and their respective stockholders.

 

C. The parties intend for the Mergers to qualify as Tax-free transactions pursuant to Section 351, Section 368(a)(1)(A) and Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the “ Code ”).

 

NOW, THEREFORE, in consideration of the covenants, promises and representations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows (defined terms used in this Agreement are listed alphabetically in Article IX, together with the Section and, if applicable, paragraph number in which the definition of each such term is located):

 

ARTICLE I

 

THE MERGERS

 

1.1 The Parent Merger .  At the Effective Time (as defined in Section 1.3) and subject to and upon the terms and conditions of this Agreement and the applicable provisions of the DGCL, Parent shall be merged with and into Holdco, the separate corporate existence of Parent shall cease and Holdco shall continue as the public corporation. Holdco as the surviving public corporation after the Parent Merger is hereinafter sometimes referred to as the “ Surviving Pubco .”

 

1.2 The Company Merger .  At the Effective Time and subject to and upon the terms and conditions of this Agreement and the applicable provisions of the GCC, Merger Sub shall be merged with and into the Company, the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving entity of the Company Merger. The Company as the surviving entity after the Company Merger is hereinafter sometimes referred to as the “ Surviving Subsidiary .”

 

1.3 Effective Time; Closing .  Subject to the conditions of this Agreement, as soon as practicable on or after the Closing Date (as hereinafter defined), the parties hereto shall cause (a) the Parent Merger to be consummated by filing a Certificate of Merger (the “ Parent Certificate of Merger ”) with the Secretary of State of the State of Delaware in accordance with the applicable provisions of Delaware law and (b) the Company Merger to be consummated by filing an Articles of Merger with the Secretary of State of the State of Georgia in accordance with the applicable provisions of Georgia law (the “ Company Articles of Merger ”) (the time of the later of such filings, or such later time as may be agreed in writing by Company and Parent

 

 

and specified in the Parent Certificate of Merger and the Company Articles of Merger, being the “ Effective Time ”). The term “ Agreement ” as used herein refers to this Agreement and Plan of Reorganization, as the same may be amended from time to time, and all schedules hereto (including the Company Schedule and the Parent Schedule, as defined in the preambles to Articles II and III hereof, respectively). Unless this Agreement shall have been terminated pursuant to Section 8.1, the consummation of the transactions contemplated by this Agreement (the “ Closing ”), other than the filing of the Parent Certificate of Merger and the Company Articles of Merger, shall take place at the offices of Graubard Miller, counsel to Parent and Holdco, 405 Lexington Avenue, New York, New York 10174-1901 at a time and date to be specified by the parties, which shall be no later than the second business day after the satisfaction or waiver of the conditions set forth in Article VI, or at such other time, date and location as the parties hereto agree in writing (the “ Closing Date ”). Closing signatures may be transmitted by facsimile or emailed “.pdf” file.

 

1.4 Effect of the Mergers .  At the Effective Time, (a) the effect of the Parent Merger shall be as provided in this Agreement and the Applicable Corporate Law and other laws and (b) the effect of the Company Merger shall be as provided in this Agreement and the Applicable Corporate Law and other laws. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time (c) all the property, rights, privileges, powers and franchises of Parent and Holdco shall vest in Surviving Pubco, and all debts, liabilities and duties of Parent and Holdco shall become the debts, liabilities and duties of Surviving Pubco and (d) all the property, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Subsidiary, and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Subsidiary.

 

1.5 Governing Documents .  At the Effective Time,

 

(a) the Certificate of Incorporation of Holdco in the form of Exhibit A hereto shall become the Certificate of Incorporation of Surviving Pubco;

 

(b) the Bylaws of Holdco in the form of Exhibit B hereto shall become the Bylaws of Surviving Pubco;

 

(c) the Articles of Incorporation of Merger Sub in the form of Exhibit C shall become the Articles of Incorporation of the Surviving Subsidiary; and

 

(d) the Bylaws of Merger Sub in the form of Exhibit D shall become the Bylaws of the Surviving Subsidiary.

 

1.6 Effect on Securities .  Subject to the terms and conditions of this Agreement, at the Effective Time, by virtue of the Mergers and this Agreement and without any action on the part of Parent, Holdco or the Company or the holders of any of the securities of Parent or the Company, the following shall occur:

 

(a) Conversion of Parent Common Stock .  Each share of common stock, par value $.0001, of Parent (“ Parent Common Stock ”) issued and outstanding immediately prior to the Effective Time will be automatically converted into one share of common stock, par value $.0001, of Holdco (“ Holdco Common Stock ”) and the holders thereof shall cease to have any further rights as holders of capital stock of Parent. Immediately following the Parent Merger, each certificate that evidenced Parent Common Stock immediately prior to the Parent Merger (“ Parent Certificate ”) shall represent the applicable number of shares of Holdco Common Stock into which the Parent Common Stock represented thereby have been converted.

 

(b) Conversion of Parent Warrants .  Each outstanding warrant to purchase a share of Parent Common Stock (“ Parent Warrant ”) issued and outstanding immediately prior to the Effective Time shall remain outstanding immediately following the Effective Time but shall be deemed to have been converted and to represent a warrant (“ Holdco Warrants ”) to purchase one share of Holdco Common Stock on the same terms existing under the Parent Warrant immediately prior to the Effective Time, subject to the changes contemplated by Section 5.1(c). Immediately following the Parent Merger, each certificate that evidenced Parent Warrants immediately prior to the Parent Merger (“ Parent Warrant Certificate ”) shall represent the applicable number of Holdco Warrants into which the Parent Warrants represented thereby have been converted.

 

(c) Cancellation of Holdco Capital Stock .  Each share of capital stock of Holdco issued and outstanding immediately prior to the Effective Time will be canceled.

 

 

 (d) Conversion of Company Common Stock; Issuance to Holdco.   At the Effective Time, all of the outstanding shares of the common stock of the Company, no par value (“ Company Common Stock ”), shall be automatically converted into an aggregate of 15,881,148 shares of Holdco Common Stock (“ Transaction Shares ”).   Subject to Section 1.12, below, certificates representing the Transaction Shares shall be issued to the Stockholder upon surrender of the certificates representing all of the outstanding Company Common Stock (“ Company Certificates ”). Immediately following the conversion contemplated by this Section, 100 shares of the Company, as the Surviving Subsidiary, shall be issued to Holdco.

 

(e) Cancellation of Merger Sub Capital Stock .  At the Effective Time, each share of common stock, par value $.0001 per share, of Merger Sub (the “ Merger Sub Common Stock ”) issued and outstanding immediately prior to the Effective Time shall be cancelled.

 

(f) Adjustments to Exchange Ratios .  The numbers of shares of Holdco Common Stock that the holders of the Parent Common Stock and the Stockholder are entitled to receive as a result of the Mergers shall be equitably adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Parent Common Stock or Company Common Stock), extraordinary cash dividends, reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to Parent Common Stock or Company Common Stock occurring on or after the date hereof and prior to the Effective Time.

 

1.7 Surrender of Company Certificates .  

 

(a) Exchange Procedures .  Upon surrender of Company Certificates at the Closing, the Stockholder shall receive certificates representing the Transaction Shares into which the Company Common Stock shall be converted at the Effective Time, less the Escrow Shares, and the Company Certificates so surrendered shall forthwith be canceled. Until so surrendered after the Effective Time for the Transaction Shares, outstanding Company Certificates will be deemed, from and after the Effective Time, to evidence no rights.

 

(b) Distributions With Respect to Unexchanged Shares .  No dividends or other distributions declared or made after the date of this Agreement with respect to Holdco Common Stock with a record date after the Effective Time will be paid to the holders of any unsurrendered Company Certificates with respect to the Transaction Shares to be issued upon surrender thereof until the holders of record of such Company Certificates shall surrender such certificates. Subject to applicable law, following surrender of any such Company Certificates, Holdco shall promptly deliver to the record holders thereof, without interest, the certificates representing the Transaction Shares issued in exchange therefor and the amount of any such dividends or other distributions with a record date after the Effective Time theretofore paid with respect to such Transaction Shares.

 

(c) Transfers of Ownership .  If certificates representing Transaction Shares are to be issued in a name other than that in which the Company Certificates surrendered in exchange therefor are registered, it will be a condition of the issuance thereof that the Company Certificates so surrendered will be properly endorsed and otherwise in proper form for transfer and that the persons requesting such exchange will have paid to Holdco or any agent designated by it any transfer or other Taxes required by reason of the issuance of certificates representing Transaction Shares in any name other than that of the registered holder of the Company Certificates surrendered, or established to the satisfaction of Holdco or any agent designated by it that such Tax has been paid or is not payable.

 

(d) Required Withholding .  Parent and Holdco shall each be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of Company Common Stock such amounts as are required to be deducted or withheld therefrom under the Code or under any provision of state, local or foreign Tax law or under any other applicable legal requirement. To the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid.

 

(e) No Further Ownership Rights in Company Common Stock .  All shares of Holdco Common Stock issued to the Stockholder in accordance with the terms hereof shall be deemed to have been issued in consideration of the Stockholder transferring all ownership rights pertaining to the Company Common Stock and there shall be no further registration of transfers on the records of the Surviving Subsidiary of Company

 

 

Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Company Certificates are presented to the Surviving Subsidiary for any reason, they shall be canceled and exchanged as provided in this Article I.

 

1.8 No Liability .  Notwithstanding anything to the contrary in this Agreement, no party hereto shall be liable to a holder of shares of Parent Common Stock or Company Common Stock for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

 

1.9 Lost, Stolen or Destroyed Certificates .  In the event that any Company Certificates shall have been lost, stolen or destroyed, Holdco shall issue in exchange for such lost, stolen or destroyed Company Certificates, upon the making of an affidavit of that fact by the holder thereof, the certificates representing the Transaction Shares that the Company Common Stock formerly represented by such Company Certificates were converted into and any dividends or distributions payable pursuant to Section 1.7(b); provided, however, that, as a condition precedent to the issuance of such certificates representing Transaction Shares and other distributions, the owner of such lost, stolen or destroyed Company Certificates shall indemnify Holdco against any claim that may be made against the Surviving Pubco or Surviving Subsidiary with respect to the Company Certificates alleged to have been lost, stolen or destroyed.

 

1.10 Tax Consequences .  It is intended by the parties hereto that the Mergers shall constitute Tax-free transactions pursuant to Section 351, Section 368(a)(1)(A) and Section 368(a)(2)(E) of the Code and the United States Income Tax Regulations (“ Regulations ”). The parties hereto adopt this Agreement as a “plan or reorganization” for the Merger within the meaning of Section 1.368-2(g) and 1.368(a) of the Regulations.

 

1.11 Taking of Necessary Action; Further Action .  If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Subsidiary with full right, title and possession to all assets, property, rights, privileges, powers and franchises of the Company, the Company and Holdco and their respective officers and directors will take all such lawful and necessary action.

 

1.12 Escrow .  As the sole remedy for the indemnity obligations set forth in Article VII, at the Closing, the Stockholder shall deposit in escrow 1,588,114 of the Transaction Shares (“ Escrow Shares ”), all in accordance with the terms and conditions of the Escrow Agreement to be entered into at the Closing between Holdco, the Company, the Stockholder and Continental Stock Transfer & Trust Company (“ Continental ”), as Escrow Agent, in the form annexed hereto as Exhibit E (the “ Escrow Agreement ”). The Escrow Agreement shall provide that on the 30 ^th day after the date Holdco has filed with the SEC its Annual Report on Form 10-K for the year ending December 31, 2010 but, in any event, no later than April 16, 2011 (the “ Escrow Termination Date ”), the Escrow Agent shall release the Escrow Shares, less that number of Escrow Shares applied in satisfaction of or reserved with respect to indemnification claims made prior to such date, to the Stockholder. Any Escrow Shares held with respect to any unresolved claim for indemnification and not applied as indemnification with respect to such claim upon its resolution shall be delivered to such Persons promptly upon such resolution. While in escrow, the Escrow Shares shall be deemed to be issued and outstanding and the Stockholder shall have the right to (i) vote the Escrow Shares at any meeting of the stockholders of Holdco or (ii) receive dividends or distributions paid or made on the Escrow Shares.

 

1.13 New Zealand Income Tax Act 2007 .  To reflect that the conversion of the Company Common Stock constitutes a disposal of shares for the purposes of the financial arrangements rules in the Income Tax Act 2007 (New Zealand), the parties agree solely for the purposes of those rules that the consideration received by the Stockholder for that disposal (including, but not limited to, the Transaction Shares as provided in Section 1.6(d) and any Holdco Common Stock issued to the Stockholder pursuant to the Holdco Plan) is the lowest price that the parties would have agreed upon with respect to the Company Common Stock at the time this Agreement was executed on the basis of payment in full at the time at which the first right in the Company Common Stock is to be transferred and on that basis no income or expenditure arises under those rules.

 

1.14 Rule 145 .  All shares of Holdco Common Stock issued pursuant to this Agreement will be subject to certain resale restrictions under Rule 145 promulgated under the Securities Act and all certificates representing such shares shall bear an appropriate restrictive legend.

 

 

1.15 Stockholder Matters .

 

(a) By its execution of this Agreement, the Stockholder, as the holder of all of the outstanding capital stock of the Company entitled to vote, hereby approves the adoption of this Agreement, approves the Mergers and the related transactions and authorizes the Company, its directors and officers to take all actions necessary for the consummation of the Mergers and the other transactions contemplated hereby pursuant to the terms of this Agreement and its Exhibits.

 

(b) The Stockholder hereby represents and warrants as follows: (i) all Holdco Common Stock to be acquired by it pursuant to this Agreement will be acquired for its account and not with a view towards distribution thereof other than, with respect to transfers to its stockholders; (ii) it understands that it must bear the economic risk of the investment in the Holdco Common Stock; (iii) it has had both the opportunity to ask questions and receive answers from the officers and directors of Parent and Holdco and all persons acting on Parent’s and Holdco’s behalf concerning the business and operations of Parent and Holdco and to obtain any additional information to the extent Parent or Holdco possesses or may possess such information or can acquire it without unreasonable effort or expense necessary to verify the accuracy of such information; and (iv) it has had access to the Parent SEC Reports (as defined in Section 3.7) filed prior to the date of this Agreement. The Stockholder acknowledges and represents that it is either (A) an “accredited investor” as such term is defined in Rule 501(a) promulgated under the Securities Act or (B) a Person possessing sufficient knowledge and experience in financial and business matters to enable it to evaluate the merits and risks of an investment in Holdco. The Stockholder understands that the certificates representing the Holdco Common Stock to be received by it will bear legends to the effect that the Holdco Common Stock may not be transferred except upon compliance with (x) the registration requirements of the Securities Act of 1933, as amended (the “ Securities Act ”), or an exemption therefrom, and (y) the provisions of this Agreement.

 

(c) The Stockholder represents and warrants that the execution and delivery of this Agreement by the Stockholder does not, and the performance of its obligations hereunder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any court, administrative agency, commission, governmental or regulatory authority, domestic or foreign (a “ Governmental Entity ”), except (i) for applicable requirements, if any, of the Securities, the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), state securities laws (“ Blue Sky Laws ”), and the rules and regulations thereunder, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect (as defined in Section 10.2(a)) on the Stockholder or the Company or, after the Closing, the Surviving Pubco or the Surviving Subsidiary, or prevent consummation of the Mergers or otherwise prevent the parties hereto from performing their obligations under this Agreement.

 

(d) The Stockholder represents and warrants it owns shares of Company Common Stock listed on Schedule 2.3(a) free and clear of all Liens (as defined in Section 10.2(e)).

 

1.16 Committee for Purposes of Escrow Agreement .  Prior to the Closing, the Board of Directors of Parent shall appoint a committee consisting of one or more of its then members to act on behalf of Holdco, as the Surviving Pubco, to take all necessary actions and make all decisions pursuant to the Escrow Agreement regarding Parent’s and Holdco’s right to indemnification pursuant to Article VII hereof. In the event of a vacancy in such committee, the board of directors of Parent or, after the consummation of the Mergers, the board of directors of Holdco, shall appoint as a successor a Person who was a director of Parent prior to the Closing Date or some other Person who would qualify as an “independent” director of Holdco and who has not had any relationship with the Company prior to the Closing. Such committee is intended to be the “ Committee ” referred to in Article VII hereof and the Escrow Agreement.

 

1.17 Sale Restriction .  The Stockholder shall not, prior to the first anniversary of the Closing, sell, transfer or otherwise dispose of an interest in any of the shares of Holdco Common Stock received as a result of the Mergers other than as permitted pursuant to the Lock-Up Agreement in the form of Exhibit F hereto to be executed by the Stockholder simultaneously herewith.

 

1.18 Holdco, as the Surviving Pubco, shall implement an Incentive Stock Option Plan (the “ Holdco Plan ”) in the form of Exhibit G hereto. The Holdco Plan shall provide that an aggregate of 12.5% of the

 

 

shares of Holdco Common Stock issued and outstanding as of the Closing Date (after giving effect to any conversions, surrenders and repurchases of Parent or Holdco Common Stock in connection with the Mergers and the approval by the Parent Stockholder thereof) shall be reserved for issuance pursuant to the Holdco Plan.

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES REGARDING

THE COMPANY AND THE STOCKHOLDER

 

Subject to the exceptions set forth in Schedule 2 attached hereto (the “ Company Schedule ”), the Company and the Stockholder jointly and severally represent and warrant to, and covenant with, Parent, Holdco and Merger Sub as follows (as used in this Article II, and elsewhere in this Agreement, the term “Company” includes the Subsidiaries, as hereinafter defined, unless the context clearly otherwise indicates):

 

2.1 Organization and Qualification .

 

(a) Each of the Company and the Stockholder is a corporation duly organized, validly existing and in good standing under the law of the jurisdiction of its formation. The Company has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being or currently planned by the Company to be conducted. The Company is in possession of all franchises, grants, authorizations, licenses, permits, easements, consents, certificates, approvals and orders (“ Approvals ”) necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business as it is now being conducted, except where the failure to have such Approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. Complete and correct copies of the articles or certificate of incorporation and bylaws (or other comparable governing instruments with different names) (collectively referred to herein as “ Charter Documents ”) of each of the Company and the Stockholder, as amended and currently in effect, have been heretofore made available to Parent or Parent’s counsel. Neither the Company nor the Stockholder is in violation of any of the material provisions of its Charter Documents.

 

(b) The Company is duly qualified or licensed to do business and is in good standing in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. Each jurisdiction in which the Company is so qualified or licensed is listed in Schedule 2.1 .  

 

(c) Copies of the minute books and records of the Company have been made available to Parent or Parent’s counsel.

 

(d) Copies of the equity ownership and transfer records of the Company have been made available to Parent or Parent’s counsel.

 

2.2 Subsidiaries .

 

(a) The Company has no direct or indirect subsidiaries or participations in joint ventures or other entities other than those listed in Schedule 2.2 and, as the context permits, those contemplated to be formed as specifically provided in the business section of the Proxy Statement/Prospectus (as defined hereinafter) (the “ Subsidiaries ”). The Company owns all of the outstanding equity securities of the Subsidiaries, free and clear of all Liens, either directly or indirectly through one or more Subsidiaries. Except for the Subsidiaries, the Company does not own, directly or indirectly, any ownership, equity, profits or voting interest in any Person or has any agreement or commitment to purchase any such interest, and has not agreed and is not obligated to make nor is bound by any written, oral or other agreement, contract, subcontract, lease, binding understanding, instrument, note, option, warranty, purchase order, license, sublicense, insurance policy, benefit plan, commitment or undertaking of any nature, as of the date hereof or as may hereafter be in effect under which it may become obligated to make, any future investment in or capital contribution to any other entity.

 

 

(b) Each Subsidiary that is a corporation is duly incorporated, validly existing and in good standing under the laws of its state of incorporation (as listed in Schedule 2.2 ) and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being or currently planned by the Company to be conducted. Each Subsidiary that is a limited liability company is duly organized or formed, validly existing and in good standing under the laws of its state of organization or formation (as listed in Schedule 2.2 ) and has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being conducted. Each Subsidiary is in possession of all Approvals necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business as it is now being conducted, except where the failure to have such Approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company or such Subsidiary. Complete and correct copies of the Charter Documents of each Subsidiary, as amended and currently in effect, have been heretofore delivered to Parent or Parent’s counsel. No Subsidiary is in violation of any of the material provisions of its Charter Documents.

 

(c) Each Subsidiary is duly qualified or licensed to do business as a foreign corporation or foreign limited liability company and is in good standing in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company or such Subsidiary. Each jurisdiction in which each Subsidiary is so qualified or licensed is listed in Schedule 2.2 .

 

(d) Copies of the minute books and records of each Subsidiary have been heretofore made available to Parent or Parent’s counsel.

 

2.3 Capitalization .

 

(a) The authorized capital stock of the Company consist of 100,000 shares of Company Common Stock and no preferred stock. As of the date of this Agreement, 100 shares of Company Common Stock are issued and outstanding, all of which are validly issued. The Stockholder is the sole owner of all of the outstanding Company Common Stock. Schedule 2.3(a) hereto contains a list of all Persons who hold options to purchase shares of Company Common Stock, the number of shares purchasable under such option, the vesting schedule relating to such option, the expiration date of such option and the per-share exercise price of such option. Except as set forth in Schedule 2.3(a) hereto, as of the date of this Agreement, no shares of Company Common Stock are reserved for issuance upon the exercise of outstanding options or other rights. There are no commitments or agreements of any character to which the Company is bound obligating the Company to accelerate the vesting of any option to purchase Company Common Stock as a result of the Company Merger. All outstanding shares of Company Common Stock and options to acquire Company Common Stock have been issued and granted in compliance with (x) all applicable securities laws and (in all material respects) other applicable laws and regulations, and (y) all requirements set forth in any applicable Company Contracts (as defined in Section 2.19). The Company has heretofore delivered to Parent or Parent’s counsel true and accurate copies of the forms of documents used for the issuance of options to acquire Company Common Stock.

 

(b) Except as set forth in Schedule 2.3(a) hereto or as set forth in Section 2.3(a) hereof, there are no subscriptions, options, warrants, equity securities, partnership interests or similar ownership interests, calls, rights (including preemptive rights), commitments or agreements of any character to which the Company is a party or by which it is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or acquisition of, any shares of capital stock or other ownership interests of the Company or obligating the Company to grant, extend, accelerate the vesting of or enter into any such subscription, option, warrant, equity security, call, right, commitment or agreement.

 

(c) Except as contemplated by this Agreement and except as set forth in Schedule 2.3(c) hereto, there are no registration rights, and there is no voting trust, proxy, rights plan, antitakeover plan or other agreement or understanding to which the Company is a party or by which the Company is bound with respect to any ownership interest or equity security of any class of the Company.

 

 

 (d) No shares of capital stock of the Company are unvested or subject to a repurchase option, risk of forfeiture or other condition under any applicable agreement with the Company.

 

(e) The authorized and outstanding capital stock of each Subsidiary is set forth in Schedule 2.3(d) hereto. The Company owns all of the outstanding equity securities of each Subsidiary, free and clear of all Liens, either directly or indirectly through one or more other Subsidiaries. There are no outstanding options, warrants or other rights to purchase securities of any Subsidiary.

 

2.4 Authority Relative to this Agreement .  Each of the Company and the Stockholder has all necessary power and authority to execute and deliver this Agreement and to perform its obligations hereunder and, to consummate the transactions contemplated hereby (including the Company Merger). The execution and delivery of this Agreement and the consummation by each of the Company and the Stockholder of the transactions contemplated hereby (including the Company Merger) have been duly and validly authorized by all necessary action on the part of the Company and the Stockholder (including the approval by its board of directors and stockholders, subject in all cases to the satisfaction of the terms and conditions of this Agreement, including the conditions set forth in Article VI), and no other proceedings on the part of the Company or the Stockholder or its respective directors, officers or stockholders are necessary to authorize this Agreement or to consummate the transactions contemplated hereby pursuant to Applicable Corporate Law and the terms and conditions of this Agreement. This Agreement has been duly and validly executed and delivered by each of the Company and the Stockholder and, assuming the due authorization, execution and delivery thereof by the other parties hereto, constitutes the legal and binding obligation of each of the Company and the Stockholder, enforceable against the Company and the Stockholder in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

 

2.5 No Conflict; Required Filings and Consents .  Except as set forth in Schedule 2.5 hereto:

 

(a) The execution and delivery of this Agreement by each of the Company and the Stockholder do not, and the performance of this Agreement by each of the Company and the Stockholder shall not, (i) conflict with or violate the Company’s or the Stockholder’s Charter Documents, (ii) conflict with or violate any Legal Requirements (as defined in Section 10.2(b)), (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or materially impair the Company’s rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any of the properties or assets of the Company pursuant to any Company Contracts or (iv) except as contemplated by the Farm Purchase Agreement (as defined hereinafter), the IP Transfer Agreement (as defined hereinafter) and the transactions contemplated thereunder, result in the triggering, acceleration or increase of any payment to any Person pursuant to any Company Contract, including any “change in control” or similar provision of any Company Contract, except, with respect to clauses (ii), (iii) or (iv), for any such conflicts, violations, breaches, defaults, triggerings, accelerations, increases or other occurrences that would not, individually and in the aggregate, have a Material Adverse Effect on the Company.

 

(b) The execution and delivery of this Agreement by each of the Company and the Stockholder does not, and the performance of its obligations hereunder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity or other third party (including, without limitation, lenders and lessors), except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act or Blue Sky Laws, and the rules and regulations thereunder, and appropriate documents received from or filed with the relevant authorities of other jurisdictions in which the Company is licensed or qualified to do business, (ii) for the filing of any notifications required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), and the expiration of the required waiting period thereunder,(iii) the consents, approvals, authorizations and permits described in Schedule 2.5(b) (“ Governmental and Third Party Consents ”) and (iv) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company or the Stockholder or, after the Closing, the Surviving Pubco or Surviving Subsidiary, or prevent consummation of the Company Merger or otherwise prevent the parties hereto from performing their obligations under this Agreement.

 

 

2.6 Compliance .  The Company has all necessary licenses and registrations in each state and other jurisdiction where the Company’s current business activities require such licensing and registration and is in good standing with respect to such licenses and registrations except where the failure, individually or in the aggregate, is not reasonably likely to have a Material Adverse Effect on the Company. The Company has complied with and is not in violation of any Legal Requirements with respect to the conduct of its business as currently conducted except for failures to comply or violations which, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect on the Company. The businesses and activities of the Company have not been and are not being conducted in violation of any Legal Requirements except where the failure, individually or in the aggregate, is not reasonably likely to have a Material Adverse Effect on the Company. Except as set forth in Schedule 2.6 , no written notice of non-compliance with any Legal Requirements has been received by the Company (and neither the Company nor the Stockholder has any knowledge of any such notice delivered to any other Person).

 

2.7 Financial Statements .

 

(a) The Company has provided to Parent a correct and complete copies of the audited consolidatedfinancial statements (including any related notes thereto) of the Company and its Subsidiaries for the period from the Company’s inception through and including August 18, 2009 (the “ Audited Financial Statements ”). The Audited Financial Statements were prepared in accordance with the published rules and regulations of any applicable Governmental Entity and with generally accepted accounting principles of the United States (“ U.S. GAAP ”) applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto), and each fairly presents in all material respects the financial position of the Company and its Subsidiaries at the respective dates thereof and the results of their operations and cash flows for the periods indicated.

 

(b) [Reserved]

 

(c) The books of account, minute books and transfer ledgers and other similar books and records of the Company and its Subsidiaries have been maintained in accordance with good business practice, are complete and accurate in all material respects and there have been no material transactions that are required to be set forth therein and which have not been so set forth.

 

(d) Except as otherwise noted in the Audited Financial Statements, the accounts and notes receivable of the Company and its Subsidiaries reflected on the balance sheets included in the Audited Financial Statements: (i) arose from bona fide sales transactions in the ordinary course of business and are payable on ordinary trade terms, (ii) are legal, valid and binding obligations of the respective debtors enforceable in accordance with their terms, except as such may be limited by bankruptcy, insolvency, reorganization, or other similar laws affecting creditors’ rights generally, and by general equitable principles, (iii) are not subject to any valid set-off or counterclaim except to the extent set forth in such balance sheet contained therein, (iv) are collectible in the ordinary course of business in the aggregate recorded amounts thereof, net of any applicable reserve reflected in such balance sheet referenced above, and (v) are not the subject of any actions or proceedings brought by or on behalf of the Company or any of its Subsidiaries.

 

2.8 No Undisclosed Liabilities .  Except as set forth in Schedule 2.8 hereto and as contemplated by the Farm Purchase Agreement and the transactions contemplated thereunder, the Company and its Subsidiaries have no liabilities (absolute, accrued, contingent or otherwise) of a nature required to be disclosed on a balance sheet or in the related notes to financial statements that are, individually or in the aggregate, material to the business, results of operations or financial condition of the Company and its Subsidiaries, except: (i) liabilities provided for in or otherwise disclosed in the balance sheet included in the Audited Financial Statements or in the notes thereto and (ii) liabilities incurred in a commercially reasonable manner and arising since September 1, 2009, none of which, individually or in the aggregate, would have a Material Adverse Effect on the Company.

 

2.9 Absence of Certain Changes or Events .  Since September 1, 2009, there has not been: (i) any Material Adverse Effect on the Company, (ii) any declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, stock or property) in respect of, any of the Company’s equity interests, or any purchase, redemption or other acquisition by the Company of any of the Company’s equity interests or

 

 

any other securities or any options, warrants, calls or rights to acquire any such shares or other securities, (iii) any split, combination or reclassification of any of the Company’s equity interests, (iv) any granting by the Company of any increase in compensation or fringe benefits, or any payment by the Company of any bonus, or any granting by the Company of any increase in severance or termination pay or any entry by the Company into any currently effective employment, severance, termination or indemnification agreement or any agreement the benefits of which are contingent or the terms of which are materially altered upon the occurrence of a transaction involving the Company of the nature contemplated hereby, (v) except as contemplated by the IP Transfer Agreement and the transactions contemplated thereunder, entry by the Company into any licensing or other agreement with regard to the acquisition or disposition of any Intellectual Property (as defined in Section 2.18 hereof) or consent with respect to any licensing agreement filed or required to be filed by the Company with respect to any Governmental Entity, (vi) any material change by the Company in its accounting methods, principles or practices except as required by concurrent changes in U.S. GAAP, (vii) any change in the auditors of the Company, (viii) except for the Capital Raise (as defined hereinafter), any issuance of equity interests of the Company, (ix) any revaluation by the Company of any of its assets, including, without limitation, writing down the value of capitalized inventory or writing off notes or accounts receivable or any sale of assets of the Company that is not commercially reasonable, or (x) any agreement, whether written or oral, to do any of the foregoing. To the knowledge of the Stockholder, no event has occurred and no circumstances exist as of the date of this Agreement that would reasonably be deemed likely to prevent or prohibit the Stockholder from consummating the transactions contemplated by this Agreement.

 

2.10 Litigation .  There are no claims, suits, actions or proceedings pending or, to the knowledge of the Company or the Stockholder, threatened against the Company before any court, governmental department, commission, agency, instrumentality or authority, or any arbitrator. There are no claims, suits, actions or proceedings pending or, to the knowledge of the Company or the Stockholder, threatened against the Stockholder before any court, governmental department, commission, agency, instrumentality or authority, or any arbitrator that would be reasonably likely to prevent or prohibit the Stockholder from consummating the transactions contemplated by this Agreement.

 

2.11 Employee Benefit Plans .

 

(a) Schedule 2.11(a) lists all employee compensation, incentive, fringe or benefit plans, programs, policies, commitments or other arrangements (whether or not set forth in a written document) covering any active or former employee, director or consultant of the Company, or any trade or business (whether or not incorporated) which is under common control with the Company, with respect to which the Company has liability (individually, a “ Plan ,” and, collectively, the “ Plans ”). All Plans have been maintained and administered in all material respects in compliance with their respective terms and with the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to such Plans, and all liabilities with respect to the Plans have been properly reflected in the financial statements and records of the Company. No suit, action or other litigation (excluding claims for benefits incurred in the ordinary course of Plan activities) has been brought, or, to the knowledge of the Company, is threatened, against or with respect to any Plan. There are no audits, inquiries or proceedings pending or, to the knowledge of the Company or the Stockholder, threatened by any governmental agency with respect to any Plan. All contributions, reserves or premium payments required to be made or accrued as of the date hereof to the Plans have been timely made or accrued. The Company does not have any plan or commitment to establish any new Plan, to modify any Plan (except to the extent required by law or to conform any such Plan to the requirements of any applicable law, in each case as previously disclosed to Parent in writing, or as required by this Agreement), or to enter into any new Plan. Except as disclosed in Schedule 2.11(a) , each Plan can be amended, terminated or otherwise discontinued after the Closing in accordance with its terms, without liability to Surviving Pubco or Surviving Subsidiary (other than ordinary administration expenses and expenses for benefits accrued but not yet paid).

 

(b) Except as disclosed in Schedule 2.11(b) hereto, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) result in any payment (including severance, unemployment compensation, golden parachute, bonus or otherwise) becoming due to any stockholder, director or employee of the Company under any Plan or otherwise, (ii) materially increase any benefits otherwise payable under any Plan, or (iii) result in the acceleration of the time of payment or vesting of any such benefits.

 

 

2.12 Labor Matters .

 

(a) Except as set forth on Schedule 2.12(a) , the Company is not a party to any collective bargaining agreement or other labor union contract applicable to persons employed by the Company nor does the Company or the Stockholder know of any activities or proceedings of any labor union to organize any such employees. There are no pending grievances or similar proceedings involving the Company and any of its employees subject to a collective bargaining agreement or other labor union contract and there are no continuing obligations of the Company pursuant to the resolution of any such proceeding that is no longer pending.

 

(b) Except as provided for in the collective bargaining agreements and labor union contracts set forth on Schedule 2.12(b) , each employee and consultant of the Company is terminable “at will” subject to applicable notice periods as set forth by law or in the employment agreement and there are no agreements or understandings between the Company and any of its employees or consultants that their employment or services will be for any particular period. The Company is not aware that any of its officers or key employees intends to terminate his or her employment with the Company. The Company is in compliance in all material respects and, to the Company’s and the Stockholder’s knowledge, each of its employees and consultants is in compliance in all material respects, with the terms of the respective employment and consulting agreements between the Company and such individuals. There are not, and there have not been, any oral or informal arrangements, commitments or promises between the Company and any employees or consultants of the Company that have not been documented as part of the formal written agreements between any such individuals and the Company that have been made available to Parent.

 

(c) The Company is in compliance in all material respects with all Legal Requirements applicable to its employees, respecting employment, employment practices, terms and conditions of employment and wages and hours and is not liable for any arrears of wages or penalties with respect thereto. The Company’s obligations to provide statutory severance pay to its employees are fully funded or accrued on the Audited Financial Statements and neither the Company nor the Stockholder has any knowledge of any circumstance that could give rise to any valid claim by a current or former employee of the Company for compensation on termination of employment (beyond the statutory severance pay to which employees are entitled). All amounts that the Company is legally or contractually required either (x) to deduct from its employees’ salaries or to transfer to such employees’ pension or provident, life insurance, incapacity insurance, continuing education fund or other similar funds or (y) to withhold from its employees’ salaries and benefits and to pay to any Governmental Entity as required by applicable Legal Requirements have, in each case, been duly deducted, transferred, withheld and paid, and the Company does not have any outstanding obligation to make any such deduction, transfer, withholding or payment. There are no pending, or to the Company’s and the Stockholder’s knowledge, threatened or reasonably anticipated claims or actions against the Company by any employee in connection with such employee’s employment or termination of employment by the Company.

 

(d) No employee or former employee of the Company is owed any wages, benefits or other compensation for past services (other than wages, benefits and compensation accrued in the ordinary course of business during the current pay period and any accrued benefits for services, which by their terms or under applicable law, are payable in the future, such as accrued vacation, recreation leave and severance pay).

 

2.13 Restrictions on Business Activities .  Except as disclosed in Schedule 2.13 hereto, there is no agreement, commitment, judgment, injunction, order or decree binding upon the Company or its assets or to which the Company is a party which has or could reasonably be expected to have the effect of prohibiting or materially impairing any current business practice or operation of the Company, any acquisition of property by the Company, or the conduct of business by the Company as currently conducted, other than such effects, individually or in the aggregate, which have not had and could not reasonably be expected to have a Material Adverse Effect on the Company.

 

2.14 Title to Property .

 

(a) All real property owned by the Company (including improvements and fixtures thereon, easements and rights of way) is shown or reflected on the balance sheet of the Company included in the Audited Financial Statements. The Company has good, valid and marketable fee simple title to the real property owned by it, and except as set forth in the Audited Financial Statements or on Schedule 2.14(a) hereto, all of such

 

 

real property is held free and clear of (i) all leases, licenses and other rights to occupy or use such real property and (ii) all Liens, rights of way, easements, restrictions, exceptions, variances, reservations, covenants or other title defects or limitations of any kind, other than liens for Taxes not yet due and payable and such liens or other imperfections of title, if any, as do not materially detract from the value of or materially interfere with the present use of the property affected thereby. Schedule 2.14(a) hereto also contains a list of all options or other contracts under which the Company has a right to acquire or the obligation to sell any interest in real property.

 

(b) All leases of real property held by the Company, and all personal property and other property and assets of the Company owned, used or held for use in connection with the business of the Company (the “ Personal Property ”) are shown or reflected on the balance sheet included in the Audited Financial Statements to the extent required by U.S. GAAP, as of the dates of such Audited Financial Statements, other than those entered into or acquired on or after the date of the Audited Financial Statements in a commercially reasonable manner. Schedule 2.14(b) hereto contains a list of all leases of real property and leases of Personal Property held by the Company. The Company has good and marketable title to the Personal Property owned by it, and all such Personal Property is in each case held free and clear of all Liens, except for Liens disclosed in the Audited Financial Statements or in Schedule 2.14(b) hereto, none of which Liens is reasonably expected to have, individually or in the aggregate, a Material Adverse Effect on such property or on the present or contemplated use of such property in the businesses of the Company.

 

(c) All leases pursuant to which the Company leases from others are valid and effective in accordance with their respective terms, and there is not, under any of such leases, any existing material default or event of default of the Company or, to the Company’s knowledge, any other party (or any event which with notice or lapse of time, or both, would constitute a material default), except where the lack of such validity and effectiveness or the existence of such default or event of default could not reasonably be expected to have a Material Adverse Effect on the Company.

 

(d) The Company is in possession of, or has valid and effective rights to, all properties, assets and rights (including Intellectual Property) required, in all material respects for the effective conduct of its business, as it is currently operated.

 

2.15 Taxes .

 

(a) Definition of Taxes .  For the purposes of this Agreement, “ Tax ” or “ Taxes ” refers to any and all federal, state, local and foreign taxes, including, without limitation, gross receipts, income, profits, sales, use, occupation, value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, assessments, governmental charges and duties together with all interest, penalties and additions imposed with respect to any such amounts and any obligations under any agreements or arrangements with any other Person with respect to any such amounts and including any liability of a predecessor entity for any such amounts.

 

(b) Tax Returns and Audits .  Except as set forth in Schedule 2.15 hereto:

 

 

 

 

Legal Requirements with respect to payments made to third parties and the withholding of any payment of withheld Taxes and has timely withheld from employee wages and other payments and timely paid over in full to the proper Taxing authorities all amounts required to be so withheld and paid over for all periods.

 

(iv) To the knowledge of the Company and the Stockholder, no audit or other examination of any Return of the Company by any Tax authority is presently in progress, nor has the Company been notified of any request for such an audit or other examination.

 

(v) No adjustment relating to any Returns filed by the Company has been proposed in writing, formally or informally, by any Tax authority to the Company or any representative thereof.

 

(vi) The Company has no liability for any unpaid Taxes which have not been accrued for or reserved on the Company’s balance sheets included in the Audited Financial Statements, whether asserted or unasserted, contingent or otherwise, other than any liability for unpaid Taxes that may have accrued since the end of the most recent fiscal year (or the Company’s inception, if more recent) in connection with the operation of the business of the Company in a commercially reasonable manner.

 

(vii) Neither the Company nor the Stockholder has taken any action and does not know of any fact, agreement, plan or other circumstance that is reasonably likely to prevent the Mergers from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

 

2.16 Environmental Matters .

 

(a) Except as disclosed in Schedule 2.16 hereto: (i) the Company has complied with all applicable Environmental Laws (as defined below); (ii) the properties currently operated by the Company (including soils, groundwater, surface water, air, buildings or other structures) and, to the knowledge of the Stockholder and the Company, the property that is subject to the Farm Purchase Agreement (as defined in Section 4.2) are not contaminated with any Hazardous Substances (as defined below); (iii) the properties formerly owned, operated or constructed by the Company were not contaminated with Hazardous Substances during the period of ownership, operation or construction by the Company or, to the Company’s knowledge, during any prior period; (iv) the Company is not subject to liability for any Hazardous Substance disposal or contamination on any third party or public property (whether above, on or below ground or in the atmosphere or water); (v) the Company has not been associated with any release or threat of release of any Hazardous Substance; (vi) the Company has not received any notice, demand, letter, claim or request for information alleging that the Company may be in violation of or liable under any Environmental Law; and (vii) the Company is not subject to any orders, decrees, injunctions or other arrangements with any Governmental Entity or subject to any indemnity or other agreement with any third party relating to liability under any Environmental Law or relating to Hazardous Substances.

 

(b) As used in this Agreement, the term “ Environmental Law ” means any federal, state, local or foreign law, regulation, order, decree, permit, authorization, opinion, common law or agency requirement relating to: (A) the protection, investigation or restoration of the environment, health and safety, or natural resources; (B) the handling, use, presence, disposal, release or threatened release of any Hazardous Substance or (C) noise, odor, wetlands, pollution, contamination or any injury or threat of injury to persons or property.

 

(c) As used in this Agreement, the term “ Hazardous Substance ” means any substance that is: (i) listed, classified or regulated pursuant to any Environmental Law; (ii) any petroleum product or by-product, asbestos-containing material, lead-containing paint or plumbing, polychlorinated biphenyls, radioactive materials or radon; or (iii) any other substance which is the subject of regulatory action by any Governmental Entity pursuant to any Environmental Law.

 

(d) Schedule 2.16(d) sets forth all environmental studies and investigations completed with respect to the Company and/or its Subsidiaries or their respective properties, assets or operations. All such written reports and material documentation relating to any such study or investigation has been provided by the Company to Parent.

 

 

2.17 Brokers; Third Party Expenses .  Except as set forth in Schedule 2.17 hereto, neither the Company nor the Stockholder has incurred, nor will it incur, directly or indirectly, any liability for brokerage, finders’ fees, agent’s commissions or any similar charges in connection with this Agreement or any transactions contemplated hereby.

 

2.18 Intellectual Property .

 

(a) Schedule 2.18 hereto contains a complete descriptive overview of the material Intellectual Property necessary in all material respects for the operation of the Company’s business as currently proposed in the business section of the Proxy Statement/Prospectus. To the Company’s and the Stockholder’s knowledge, all Company Intellectual Property is (i) owned solely by the Company or (ii) sole ownership will be irrevocably and unconditionally assigned and transferred to the Company at Closing pursuant to the Deed of Assignment Relating to Intellectual Property (“ IP Transfer Agreement ”) in the form of Exhibit H hereto (which is being executed concurrently with this Agreement). The IP Transfer Agreement has been duly authorized by the Company and has been duly and validly executed and delivered by each party thereto and, to the knowledge of the Stockholder and the Company, comprises the binding obligation of each party thereto. No director, officer, consultant, agent, employee, equity holder or other party affiliated with the Company or any affiliate thereof (collectively, the “ Company Related Parties ”) has any right or claim to such Company Intellectual Property. Except as described on Schedule 2.18 , none of the Company Intellectual Property was developed under the terms of any agreement with any third party or using the assets or resources of any other party that would give such third party any right or claim to any ownership or economic or pecuniary interest in such Company Intellectual Property (“ Third Party IP Rights ”), including any agreement or understanding with any existing or prior employer or client of any of the Company Related Parties or any government or educational agency, institution or other body. All Third Party IP Rights are being waived or transferred to the Company, effective as of Closing, pursuant to the IP Transfer Agreement.

 

(b) For the purposes of this Agreement, the following terms have the following definitions:

 

 

 

 

 

 

 

(c) Except as contemplated by the IP Transfer Agreement and the transactions contemplated thereunder, no Company Intellectual Property or Company Product is subject to any material proceeding or outstanding decree, order, judgment, contract, license, agreement or stipulation restricting in any manner the use, transfer or licensing thereof by the Company, or which may affect the validity, use or enforceability of such Company Intellectual Property or Company Product, which in any such case could reasonably be expected to have a Material Adverse Effect on the Company.

 

(d) Giving effect to the IP Transfer Agreement, the Company owns and has good and exclusive title to each material item of Company Intellectual Property owned by it free and clear of any Liens and the Company is the exclusive owner of all material registered Trademarks and Copyrights used in connection with the operation or conduct of the business of the Company including the sale of any products or the provision of any services by the Company.

 

(e) To the Company’s and the Stockholder’s knowledge, the Company Intellectual Property does not currently infringe or misappropriate the Intellectual Property of any third party or constitute unfair competition or trade practices under the laws of any jurisdiction. The Company has not received any claims or threats from third parties alleging any such infringement, misappropriation or unfair competition or trade practices.

 

2.19 Agreements, Contracts and Commitments .

 

(a) Schedule 2.19 hereto sets forth a complete and accurate list of all Material Company Contracts (as hereinafter defined), specifying the parties thereto. For purposes of this Agreement, (i) the term “ Company Contracts ” shall mean all contracts, agreements, leases, mortgages, indentures, notes, bonds, licenses, permits, franchises, purchase orders, sales orders, and other understandings, commitments and obligations (including, without limitation, outstanding offers and proposals) of any kind, whether written or oral, to which the Company is a party or by or to which any of the properties or assets of the Company may be bound, subject or affected (including without limitation notes or other instruments payable to the Company) and (ii) the term “ Material Company Contracts ” shall mean (x) each Company Contract (A) providing for payments (present or future) to the Company in excess of $100,000 in the aggregate, (B) any Company Contract relating to Company Intellectual Property, (C) any Company Contract relating to land purchasable by the Company or (D) under or in respect of which the Company presently has any liability or obligation of any nature whatsoever (absolute, contingent or otherwise) in excess of $100,000, (y) each Company Contract that otherwise is or may be material to the businesses, operations, assets, condition (financial or otherwise) or prospects of the Company, and (z) the limitations of subclause (x) and subclause (y) notwithstanding, each of the following Company Contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b) Each Material Company Contract was entered into at arms’ length and in a commercially reasonable manner, is in full force and effect and, to the Company’s knowledge, is valid and binding upon and enforceable against each of the parties thereto, except insofar as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies. To the Company’s and the Stockholder’s knowledge, no other party to a Material Company Contract is the subject of a bankruptcy or insolvency proceeding. True, correct and complete copies of all Material Company Contracts (or written summaries in the case of oral Material Company Contracts) have been heretofore delivered to Parent or Parent’s counsel.

 

(c) Except as set forth in Schedule 2.19 , neither the Company nor, to the Company’s knowledge, any other party thereto is in breach of or in default under, and no event has occurred which with notice or lapse of time or both would become a breach of or default under, any Material Company Contract, and no party to any Material Company Contract has given any written notice of any claim of any such breach, default or event, which, individually or in the aggregate, are reasonably likely to have a Material Adverse Effect on the Company. Each Material Company Contract that has not expired by its terms is in full force and effect.

 

2.20 Insurance .   Schedule 2.20 sets forth the Company’s insurance policies and fidelity and surety bonds covering the assets, business, equipment, properties, operations, employees, officers and directors (collectively, the “ Insurance Policies ”). The insurances provided by such Insurance Policies are adequate in amount and scope as required to be maintained by Material Company Contracts.

 

2.21 Governmental Actions/Filings .

 

(a) Except as set forth in Schedule 2.21(a) and as contemplated by the Farm Purchase Agreement and the transactions contemplated thereunder, the Company has been granted and holds, and has made, all Governmental Actions/Filings (as defined below) (including, without limitation, Governmental Actions/Filings required for emission or discharge of effluents and pollutants into the air and the water) necessary to the conduct by the Company of its business as presently conducted or used or held for use by the Company, and true, complete and correct copies of which have heretofore been delivered to Parent. Each such Governmental Action/Filing is in full force and effect and, except as disclosed in Schedule 2.21(a) hereto, will not expire prior to December 31, 2009 and the Company is in material compliance with all of its obligations with respect thereto. No event has occurred and is continuing which requires or permits, or after notice or lapse of time or both would require or permit, and consummation of the transactions contemplated by this Agreement or any ancillary documents will not require or permit (with or without notice or lapse of time, or both), any modification or termination of any such Governmental Actions/Filings except such events which, either individually or in the aggregate, would not have a Material Adverse Effect upon the Company.   Except as set forth in Schedule 2.21(a) and as contemplated by the Farm Purchase Agreement and the transactions contemplated thereunder, no Governmental Action/Filing is necessary to be obtained, secured or made by the Company to enable it to continue to conduct its businesses and operations and use its properties and assets after the Closing in a manner which is consistent with current practice.

 

(b) Except as set forth in Schedule 2.21(b) and as contemplated by the Farm Purchase Agreement and the transactions contemplated thereunder, no Governmental Action/Filing is necessary to be obtained, secured or made by the Company to enable it to continue to conduct its businesses and operations and use its properties after the Closing in a manner which is consistent with current practice.

 

 

(c) For purposes of this Agreement, the term “ Governmental Action/Filing ” shall mean any franchise, license, certificate of compliance, authorization, consent, order, permit, approval, consent or other action of, or any filing, registration or qualification with, any federal, state, municipal, foreign or other governmental, administrative or judicial body, agency or authority.

 

(d) As of the date of this Agreement, no state agency or the Securities and Exchange Commission (“SEC”) have held that the products or services offered by the Company constitute a “security” under federal or state securities laws and the Company is not currently a party to any action or proceeding asserting that any product or service offered by the Company is a “security” and to the Company’s knowledge, no such action or proceeding is currently threatened.

 

2.22 Interested Party Transactions .  Except as set forth in the Schedule 2.22 hereto, no employee, director, officer or stockholder of the Company or a member of his or her immediate family is indebted to the Company, nor is the Company indebted (or committed to make loans or extend or guarantee credit) to any of such Persons, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of the Company, and (iii) for other employee benefits made generally available to all employees. Except as set forth in Schedule 2.22 , to the Company’s and the Stockholder’s knowledge, none of such individuals has any direct or indirect ownership interest in any Person with whom the Company is affiliated or with whom the Company has a contractual relationship, or in any Person that competes with the Company, except that each employee, stockholder, officer or director of the Company and members of their respective immediate families may own less than 5% of the outstanding stock in publicly traded companies that may compete with the Company. Except as set forth in Schedule 2.22 , to the knowledge of the Company and the Stockholder, no officer, director or stockholder or any member of their immediate families is, directly or indirectly, interested in any Material Company Contract with the Company (other than such contracts as relate to any such Person’s ownership of capital stock or other securities of the Company or such Person’s employment with the Company).

 

2.23 Board of Director and Certain Stockholder Approvals .  The board of directors of the Company (including any required committee or subgroup thereof) and the Stockholder (and the voting shareholders of the Stockholder) have, as of the date of this Agreement, duly approved, this Agreement and the transactions contemplated hereby.

 

2.24 No Illegal or Improper Transactions .  To the knowledge of the Company and the Stockholder, neither the Company or the Stockholder, nor any officer, director, stockholder, employee, agent or Affiliate thereof on the Company’s or the Stockholder’s behalf, has offered, paid or agreed to pay to any Person (including any governmental official) or solicited, received or agreed to receive from any such Person, directly or indirectly, any money or anything of value for the purpose or with the intent of (a) obtaining or maintaining business for the Company, (b) facilitating the purchase or sale of any product or service, or (c) avoiding the imposition of any fine or penalty, in any manner which is in violation of any applicable ordinance, regulation or law, the effect of which, individually or in the aggregate, would reasonably be expected to be materially adverse to the business, assets, prospects or financial condition of the Company, taken as a whole. To the Company’s and the Stockholder’s knowledge, no employee of the Company has provided or is providing information to any law enforcement agency regarding the commission or possible commission of any crime or the violation or possible violation of any applicable law. Neither the Company or the Stockholder, nor any officer, director, employee, stockholder, contractor, subcontractor or agent of the Company, has discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against an employee of the Company in the terms and conditions of employment because of any act of such employee described in 18 U.S.C. § 1514A(a).

 

2.25 Representations and Warranties Complete .  The representations and warranties of the Company and the Stockholder included in this Agreement and any list, statement, document or information set forth in, or attached to, any Schedule provided pursuant to this Agreement or delivered hereunder, are true and complete in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading, under the circumstance under which they were made.

 

 

2.26 Survival of Representations and Warranties .  The representations and warranties of the Company and the Stockholder set forth in this Agreement shall survive the Closing as set forth in Article VII.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF PARENT

 

Subject to the exceptions set forth in Schedule 3 attached hereto (the “ Parent Schedule ”), Parent represents and warrants to, and covenants with, the Company and the Stockholder as follows:

 

3.1 Organization and Qualification .

 

(a) Parent is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being or currently planned by Parent to be conducted. Parent is in possession of all Approvals necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business as it is now being or currently planned by Parent to be conducted, except where the failure to have such Approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent. Complete and correct copies of the Charter Documents of Parent, as amended and currently in effect, have been heretofore delivered to the Company. Parent is not in violation of any of the provisions of Parent’s Charter Documents.

 

(b) Parent is duly qualified or licensed to do business as a foreign corporation and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent.

 

3.2 Subsidiaries .

 

(a) Except for Holdco, which is a wholly owned subsidiary of Parent, and Merger Sub, which is a wholly owned subsidiary of Holdco, Parent has no direct or indirect Subsidiaries and does not own, directly or indirectly, any ownership, equity, profits or voting interest in any Person or have any agreement or commitment to purchase any such interest, and Parent has not agreed and is not obligated to make nor is bound by any written, oral or other agreement, contract, subcontract, lease, binding understanding, instrument, note, option, warranty, purchase order, license, sublicense, insurance policy, benefit plan, commitment or undertaking of any nature, as of the date hereof or as may hereafter be in effect under which it may become obligated to make, any future investment in or capital contribution to any other entity.

 

(b) Holdco is a corporation duly incorporated, validly existing and in good standing under the law of the State of Delaware and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being or currently planned by Parent to be conducted. Complete and correct copies of the Charter Documents of Holdco, as amended and currently in effect, have been delivered to the Company or its counsel. Holdco is not in violation of any of the material provisions of its Charter Documents.

 

(c) Merger Sub is a corporation duly incorporated, validly existing and in good standing under the law of the State of Georgia and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being or currently planned by Parent to be conducted. Complete and correct copies of the Charter Documents of Merger Sub, as amended and currently in effect, have been delivered to the Company or its counsel. Merger Sub is not in violation of any of the material provisions of its Charter Documents.

 

(d) Each of Holdco and Merger Sub (together, the “ Parent Subsidiaries ”) has no assets or properties of any kind, does not now conduct and has never conducted any business, and has and will have at the Closing no obligations or liabilities of any nature whatsoever except such obligations and liabilities as are imposed under this Agreement.

 

 

3.3 Capitalization .

 

(a) As of the date of this Agreement, the authorized capital stock of Parent consists of 160,000,000 shares of Parent Common Stock and 1,000,000 shares of preferred stock, par value $.0001 per share (“ Parent Preferred Stock ”), of which 69,000,000 shares of Parent Common Stock and no shares of Parent Preferred Stock are issued and outstanding, all of which are validly issued, fully paid and nonassessable.

 

(b) Except as set forth in Schedule 3.3(b) , (i) no shares of Parent Common Stock or Parent Preferred Stock are reserved for issuance upon the exercise of outstanding options to purchase Parent Common Stock or Parent Preferred Stock granted to employees of Parent or other parties (“ Parent Stock Options ”) and there are no outstanding Parent Stock Options; (ii) no shares of Parent Common Stock or Parent Preferred Stock are reserved for issuance upon the exercise of outstanding warrants to purchase Parent Common Stock or Parent Preferred Stock; and (iii) no shares of Parent Common Stock or Parent Preferred Stock are reserved for issuance upon the conversion of the Parent Preferred Stock or any outstanding convertible notes, debentures or securities (“ Parent Convertible Securities ”). All shares of Parent C