ACQUISITION AGREEMENT
This Acquisition Agreement dated March 5, 1997 between Crop Growers
Corporation, a Delaware corporation (the "COMPANY"), and Fireman's Fund
Insurance Company, a California corporation (the "BUYER"), sets forth the
agreement of the parties with respect to an acquisition (the "ACQUISITION") on
the terms and conditions set forth herein.
1. ACQUISITION. The Acquisition will consist of the merger of a
subsidiary or affiliate of the Buyer into the Company, with the Company being
the surviving corporation, in which (i) the common stockholders of the Company
will be entitled to receive cash in the amount of $10.25 per share (as
constituted on the date hereof) upon surrender of the relevant stock certificate
following the closing, (ii) the holders of options to acquire common stock of
the Company will receive a cash settlement equal to the spread (if any)
represented by each option, based on such price per share, and (iii) the Buyer
or an affiliate of the Buyer will become the holder of all the outstanding
common stock and rights to acquire common stock of the Company.
2. EFFECT OF THIS ACQUISITION AGREEMENT; IMPLEMENTATION DOCUMENTATION.
It is understood that this Acquisition Agreement constitutes a binding agreement
as to the terms of and the parties' respective obligations with respect to the
Acquisition. The parties hereto shall promptly and diligently negotiate in good
faith and use their respective best efforts to enter into implementing
agreements with respect to the Acquisition (collectively, the "IMPLEMENTATION
AGREEMENTS"), each of which shall be consistent with the terms hereof. Although
the parties hereto intend to diligently negotiate and promptly enter into the
Implementation Agreements, the parties acknowledge and agree that this
Acquisition Agreement contains all of the substantive terms of the Acquisition,
and, in the event that the parties do not enter into the Implementation
Agreements, that this Acquisition Agreement is a binding agreement and shall
form the basis for consummation of the Acquisition as contemplated hereby.
3. NO SOLICITATION.
(a) Except with respect to those entities listed in the Company's
letter to the Buyer (the "EXCEPTED CONTACTS") (but with respect to the Excepted
Contacts only through March 28, 1997), until the earlier of the termination of
this Acquisition Agreement pursuant to its terms or the consummation of the
Acquisition, neither the Company nor any of its subsidiaries or representatives
shall, directly or indirectly, take any action to (i) encourage, solicit or
initiate the submission of any Acquisition Proposal, (ii) enter into any
agreement for or relating to a Third Party Transaction, or (iii) participate in
any way in discussions or negotiations with, or furnish any non-public
information to, any person in connection with any Acquisition Proposal.
Notwithstanding any other provision of this Section 3(a), the Company may, in
response
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to an unsolicited BONA FIDE offer or proposal made by a third party to it,
provide information to or have discussions or negotiations with such third
party; provided, however, that if such offer or proposal is received after March
28, 1997, the Board of Directors must first make a determination in good faith,
after hearing advice of its outside counsel, that such action is necessary in
order for the Board of Directors to comply with its fiduciary duties under
applicable law. The Company will immediately communicate to the Buyer the
receipt of any third party solicitation, proposal or BONA FIDE inquiry that the
Company or any of its representatives may receive in respect of any such
transaction, or of any request for such information, including in each case a
copy thereof and all other particulars thereof.
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(b) "ACQUISITION PROPOSAL" means any proposed Acquisition
Transaction. "ACQUISITION TRANSACTION" means any (i) merger, consolidation or
similar transaction involving the Company, (ii) sale, lease or other disposition
directly or indirectly by merger, consolidation, share exchange or otherwise of
any assets of the Company or its subsidiaries representing 15% or more of the
consolidated assets of the Company and its subsidiaries, (iii) issue, sale or
other disposition of (including by way of merger, consolidation, share exchange
or any similar transaction) securities (or options, rights or warrants to
purchase, or securities convertible into, such securities) representing 15% or
more of the votes attached to the outstanding securities of the Company, (iv)
transaction in which any person shall acquire Beneficial Ownership or the right
to acquire Beneficial Ownership, or any Group shall have been formed which has
Beneficial Ownership or has the right to acquire Beneficial Ownership, of 15% or
more of the outstanding shares of common stock of the Company, (v)
recapitalization, restructuring, liquidation, dissolution, or other similar type
of transaction with respect to the Company or any of its subsidiaries, or (vi)
transaction which is similar in form, substance or purpose to any of the
foregoing transactions. "THIRD PARTY TRANSACTION" shall mean an Acquisition
Transaction with a party unrelated to the Buyer. "BENEFICIAL OWNERSHIP" and
"GROUP" shall have the meanings stated in Regulation 13D-G under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT").
(c) The Company will use its best efforts to take all action
necessary in accordance with applicable law and its certificate of incorporation
and bylaws to convene a meeting of its stockholders as promptly as practicable
to consider and vote upon the approval of the Acquisition. The Board of
Directors of the Company shall recommend and declare advisable to its
stockholders such approval and the Company shall take all lawful action to
solicit, and use all best efforts to obtain, approval of its stockholders, and
neither the Board of Directors of the Company nor any committee of such Board of
Directors shall (i) withdraw or modify the approval or recommendation by such
Board of Directors or such committee of the Acquisition, (ii) approve or
recommend any Acquisition Proposal other than the Acquisition, or (iii) cause
the Company to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement with respect to any Acquisition
Proposal other than the Acquisition. Notwithstanding the foregoing, no later
than March 28, 1997, the Board of Directors of the Company may withdraw or
modify its approval or recommendation of the Acquisition, approve or recommend a
Superior Proposal or terminate this Acquisition Agreement, but in each case only
concurrently with the payment of the amount required by Section 14(d) or 14(e),
as applicable. A "SUPERIOR PROPOSAL" means any BONA FIDE Acquisition Proposal,
the terms of which the Board of Directors of the Company determines in its good
faith judgment (after hearing the advice of a financial advisor of nationally
recognized reputation) to be more favorable to the Company's stockholders than
the Acquisition. Further, after March 28, 1997, the Board of Directors of the
Company may withdraw or modify its approval or recommendation of the
Acquisition, approve or recommend a Superior Proposal or terminate this
Acquisition Agreement, but in each case only concurrently with the payment of
the amount required by Section 14(d) or 14(e), as applicable, and after a
determination in good faith, after hearing advice of its outside counsel, that
such action is necessary in
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order for the Board of Directors to comply with its fiduciary duties to
stockholders under applicable law.
4. ACCESS. The Company shall (and shall cause each of its subsidiaries
to) afford to the Buyer and its agents and representatives full access during
normal business hours throughout the period prior to the consummation of the
Acquisition to all of its properties, books, contracts, commitments and records
and during such period shall (and shall cause each of its subsidiaries to)
furnish promptly to such parties (i) a copy of each report, schedule and other
document filed or received by it pursuant to the requirements of federal or
state securities or insurance laws and (ii) all other information concerning its
business, properties and personnel as such party may reasonably request,
including any financial and operating data. Any such access shall commence
forthwith, and shall be conducted in such a manner so as not to interfere
unreasonably with the business or operations of the Company. The Buyer shall
maintain the confidentiality of any non-public information received by it or its
representatives pursuant to this Section 4.
5. CONSENTS. The parties hereto will use their respective reasonable
best efforts to (i) obtain all material consents, authorizations, orders and
approvals of or from private parties or Government Entities, required, proper or
advisable in connection with this Acquisition Agreement and the Acquisition and
(ii) resolve any action, suit, proceeding or investigation which shall have been
instituted or which a Government Entity shall have indicated its intention to
institute which jeopardizes the Acquisition; PROVIDED, HOWEVER, that no party
hereto shall be obligated to take any such action which, in the reasonable
opinion of such party (following consultation with its counsel), would (x) have
a material adverse effect on the assets, properties, liabilities, obligations,
financial condition, results of operations or business (a "MATERIAL ADVERSE
EFFECT") of such party and its subsidiaries taken as a whole or (y) have a
Material Adverse Effect or materially restrict or impair the effective
ownership, operation or control of the Company by the Buyer following the
consummation of the Acquisition. "GOVERNMENTAL ENTITY" means any federal, state
or local governmental or regulatory agency, authority or instrumentality,
whether domestic or foreign.
6. ANNOUNCEMENTS. The parties hereto will consult and cooperate with
each other and agree upon the terms and substance of all press releases,
announcements and public statements with respect to this Acquisition Agreement
and the Acquisition, provided that such consultation and cooperation shall not
interfere with any obligation of either party hereto to disclose any information
as required by applicable law. Any press release or other announcement by any
party with respect to the Acquisition will be subject to the consent and
approval of the other party, which consent or approval will not be unreasonably
withheld.
7. INTERIM OPERATIONS. Except as set forth on the disclosure schedule
delivered concurrently herewith ("DISCLOSURE SCHEDULE") or expressly required or
permitted by this Acquisition Agreement, from and after the date hereof until
the earlier of (i) the consummation of the Acquisition or (ii) the termination
of this Acquisition
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Agreement pursuant to its terms, the Company will and will cause its
subsidiaries to (w), except as otherwise agreed to by Buyer orally or in
writing, operate its businesses in the ordinary course of business, (x) not take
any action or fail to take any action which would or could reasonably be
expected to jeopardize any of its material contracts or its good standing with
all applicable Departments of Insurance and similar regulatory agencies with
jurisdiction over the Company, (y) not take any extraordinary action or fail to
take any action, the failure of which to be taken would be an extraordinary
action, and (z) not declare, set aside or pay any dividend (other than stated
dividends on its preferred stock) or other distribution in respect of its
capital stock, whether in stock, cash or other property, or issue any capital
stock or any right to acquire, convert into or exchange for capital stock except
pursuant to stock options outstanding on the date hereof. The Company agrees
that, in the event it adopts a "rights plan," "poison pill" or similar plan or
arrangement, it will include a provision expressly exempting the Buyer from the
operation thereof.
8. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Buyer that:
(a) ORGANIZATION AND QUALIFICATIONS. The Company and each subsidiary
of the Company is a corporation duly incorporated or organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
organization and has the requisite corporate power and authority, and all
governmental permits, approvals and other authorizations, necessary to own,
lease and operate its properties and to carry on its business as it is now being
conducted, except for such exceptions as would not, individually or in the
aggregate, have a Material Adverse Effect on the Company and its subsidiaries
taken as a whole (a "COMPANY MATERIAL ADVERSE EFFECT").
(b) CAPITALIZATION. The authorized capital stock of the Company is
as set forth on the Disclosure Schedule. Except as set forth thereon, no shares
of capital stock or other voting securities of the Company are issued, reserved
for issuance or outstanding. Except as set forth above and except as
contemplated herein, there are no options or agreements relating to the issued
or unissued capital stock of the Company or any subsidiary of the Company, or
obligating the Company or any subsidiary to issue, transfer, grant or sell any
shares of capital stock of, or other equity interests in, or securities
convertible into or exchangeable for any capital stock or other equity interests
in, the Company or any subsidiary. There are no outstanding contractual
obligations of the Company or any subsidiary to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or any subsidiary.
(c) AUTHORITY RELATIVE TO THIS ACQUISITION AGREEMENT. The Company
has all necessary corporate power and authority to execute and deliver this
Acquisition Agreement, to perform its obligations hereunder and, subject to
adoption of this Acquisition Agreement (or the Implementation Agreements) by the
stockholders of the Company as contemplated hereby (the "STOCKHOLDER APPROVAL"),
to consummate the Acquisition. The execution and delivery of this Acquisition
Agreement by the
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Company and the consummation by it of the Acquisition have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of the Company is necessary to authorize this Acquisition Agreement
or to consummate the Acquisition (other than the Stockholder Approval). This
Acquisition Agreement has been duly and validly executed and delivered by the
Company and, assuming the due authorization, execution and delivery thereof by
each other party hereto, constitutes the legal, valid and binding obligation of
the Company, enforceable against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights generally and by equitable
principles.
(d) NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(i) The execution and delivery of this Acquisition Agreement by
the Company does not, and the performance of its obligations hereunder and the
consummation of the Acquisition by it will not, (A) conflict with or violate the
certificate of incorporation or bylaws of the Company or any of its
subsidiaries, (B) subject to the making of the filings and obtaining the
approvals identified in Section 8(d)(ii), conflict with or violate any law,
rule, regulation, order, judgment or decree (collectively, "LAWS") applicable to
the Company or any of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries is bound or affected, or (C) except as
disclosed in the Disclosure Schedule, conflict with, result in any breach of,
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, result in a loss or modification adverse to the
Company or its subsidiaries of any right or benefit under, give to others any
right of termination, amendment, acceleration, repurchase, repayment, increased
payments or cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of the Company or any subsidiary pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation, whether written or oral
(collectively, a "CONTRACT"), to which the Company or any subsidiary is a party
or by which the Company or any subsidiary or any property or asset of the
Company or any subsidiary is bound or affected, except, in the case of clauses
(B) and (C), for any such conflicts, violations or other consequences which
would not, individually or in the aggregate, prevent or delay in any material
respect the consummation of the Acquisition or prevent the Company from
performing its obligations under this Acquisition Agreement in any material
respect and which, in any case, would not, individually or in the aggregate,
have a Company Material Adverse Effect.
(ii) The execution and delivery of this Acquisition Agreement by
the Company does not, and the performance of its obligations hereunder and the
consummation of the Acquisition by it will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Government
Entity for or by either party, except (A) for applicable requirements of (1) the
Exchange Act (in the case of the Company only) and the filing of a certificate
of merger under the Delaware General Corporation Law, (2), to the knowledge of
the Company on the date hereof, the state insurance holding company laws of the
states of Kansas, Nebraska, North Dakota
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and Texas (in the case of the Buyer only) and (3) the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvement Act (the "HSR ACT") and (B) 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, prevent or delay in
any material respect consummation of the Acquisition, or otherwise prevent the
Company from performing its obligations hereunder in any material respect, and
would not, individually or in the aggregate, have a Company Material Adverse
Effect.
(e) SECURITIES REPORTS AND FINANCIAL STATEMENTS. Except as set forth
on the Disclosure Schedule, each form, report, schedule, registration statement
and definitive proxy statement filed by the Company with the Securities and
Exchange Commission ("SEC") since December 31, 1995 and prior to the date hereof
(as such documents have been amended prior to the date hereof, collectively the
"COMPANY SEC REPORTS"), as of their respective dates, complied in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act and the rules and regulations thereunder. Except as set forth in the
Disclosure Schedule, none of the Company SEC Reports, as of their respective
dates, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except for such statements, if any, as have been modified or
superseded by subsequent Company SEC Reports filed prior to the date hereof.
The consolidated financial statements of the Company and its subsidiaries
included in such reports comply in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto or, in the case of the
unaudited interim financial statements, as permitted by Form 10-Q of the SEC)
and fairly present (subject, in the case of the unaudited interim financial
statements, to normal year-end audit adjustments) the consolidated financial
position of the Company and its subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended. Except as set forth in the Disclosure Schedule, since December 31, 1995,
neither the Company nor any of its subsidiaries has incurred any liabilities or
obligations (whether absolute, accrued, fixed, contingent, liquidated,
unliquidated or otherwise and whether due or to become due) of any nature,
except liabilities, obligations or contingencies (i) which are reflected on the
unaudited balance sheet of the Company and its subsidiaries, as of September 30,
1996 (including the notes thereto), or (ii) which (A) were incurred in the
ordinary course of business after such interim date and are consistent with past
practices, (B) are disclosed in the Company SEC Reports filed after such date,
or (C) would not, individually or in the aggregate, have a Company Material
Adverse Effect. Since December 31, 1995, there has been no change in any of the
significant accounting (including tax accounting) policies, practices or
procedures of the Company or any material subsidiary.
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as contemplated by
this Acquisition Agreement, as disclosed in any Company SEC Report
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or as set forth in the Disclosure Schedule, since December 31, 1995, (i) the
Company and its subsidiaries have conducted their respective businesses only in
the ordinary course, consistent with past practice, and have not taken any
action that would be inconsistent with the covenants set forth in Section 7 if
they had applied during such period, and (ii) there has not occurred or arisen
any event that, individually or in the aggregate, has had or, insofar as
reasonably can be foreseen, is likely in the future to have, a Company Material
Adverse Effect other than any developments that generally affect the industry in
which the Company operates.
9. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
(a) ORGANIZATION AND QUALIFICATIONS. The Buyer is a corporation duly
incorporated or organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite power and
authority and all governmental permits, approvals and other authorizations
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted, except for such exceptions as would not,
individually or in the aggregate, have a Material Adverse Effect on the Buyer
and its subsidiaries, taken as a whole (a "BUYER MATERIAL ADVERSE EFFECT").
(b) AUTHORITY RELATIVE TO THIS ACQUISITION AGREEMENT. The Buyer has
all necessary corporate power and authority to execute and deliver this
Acquisition Agreement, to perform its obligations hereunder and to consummate
the Acquisition. The execution and delivery of this Acquisition Agreement by
the Buyer and the consummation by it of the Acquisition have been duly and
validly authorized by all necessary corporate action and no other corporate
proceedings on the part of the Buyer is necessary to authorize this Acquisition
Agreement or to consummate the Acquisition. This Acquisition Agreement has been
duly and validly executed and delivered by the Buyer and, assuming the due
authorization, execution and delivery thereof by each other party hereto,
constitutes the legal, valid and binding obligations of the Buyer, except as
enforcement may be limited by bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights generally and by equitable
principles.
(c) NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(i) The execution and delivery of this Acquisition Agreement by
the Buyer does not, and the performance of its obligations hereunder and the
consummation of the Acquisition by it will not (A) conflict with or violate the
certificate of incorporation or bylaws of the Buyer, (B) subject to the making
of the filings and obtaining the approvals identified in Section 9(c)(ii),
conflict with or violate any Laws applicable to the Buyer or by which any
property or asset of the Buyer is bound or affected, or (C) conflict with or
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, result in the loss or
modification in a manner materially adverse to the Buyer of any material right
or benefit under, or give to others any right of termination, amendment,
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acceleration, repurchase or repayment, increased payments or cancellation of, or
result in the creation of a lien or other encumbrance on any property or asset
of the Buyer pursuant to, any Contract to which the Buyer is a party or by which
the Buyer or any property or asset of the Buyer is bound or affected, except, in
the case of clauses (B) and (C), for any such conflicts or violations which
would not prevent or delay in any material respect the consummation of the
Acquisition, or otherwise, individually or in the aggregate, prevent the Buyer
from performing its obligations under this Acquisition Agreement in any material
respect.
(ii) The execution and delivery of this Acquisition Agreement by
the Buyer does not, and the performance of its obligations hereunder and the
consummation of the Acquisition by it will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Entity, except (A) for applicable requirements of (1) the insurance company
holding laws of certain states and (2) the HSR Act, and (B) 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, prevent
or delay in any material respect consummation of the Acquisition, or otherwise
prevent the Buyer from performing its obligations hereunder in any material
respect.
10. CONDITIONS TO THE COMPANY'S OBLIGATION. The obligation of the Company
to consummate the Acquisition is subject to the satisfaction of each of the
following conditions:
(a) All waivers, consents, authorizations, orders, approvals or
expiration of waiting periods required under any Law or Contract to be obtained
by the Company in order to consummate the Acquisition shall have been obtained,
except where the failure to have obtained any such waiver, consent,
authorization, order or approval would not have a Company Material Adverse
Effect.
(b) The representations and warranties of the Buyer set forth herein
shall be true and correct in all respects as of the date hereof, and as of the
time the Acquisition is consummated, other than, in all such cases, such
failures to be true and/or correct as would not in the aggregate reasonably be
expected to have a Buyer Material Adverse Effect; PROVIDED, HOWEVER, that if any
of the representations and warranties are already qualified in any respect by
materiality or as to a Buyer Material Adverse Effect, for purposes of this
Section 10(b) such materiality or Buyer Material Adverse Effect qualification
will be in all respects ignored (but subject to the overall standard as to Buyer
Material Adverse Effect set forth immediately prior to this proviso), and the
Buyer shall have complied in all material respects with all covenants and
agreements set forth herein to be performed by it.
(c) No injunction, restraining order or other order of any federal or
state court which prevents the consummation of the Acquisition shall be in
effect.
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(d) No statute, rule or regulation shall have been enacted by any
state or governmental agency that would prevent the consummation of the
Acquisition.
(e) The Stockholder Approval shall have been obtained.
11. CONDITIONS TO THE BUYER'S OBLIGATION. The obligation of the Buyer to
consummate the Acquisition is subject to the satisfaction of each of the
following conditions:
(a) All waivers, consents, authorizations, orders, approvals or
expiration of waiting periods required under any Law or Contract to be obtained
by any of the parties hereof in order to consummate the Acquisition shall have
been obtained, except where the failure to have obtained any waiver, consent,
authorization, order or approval would not have a Company Material Adverse
Effect or a Buyer Material Adverse Effect.
(b) The representations and warranties of the Company set forth
herein shall be true and correct in all respects as of the date hereof, and as
of the time the Acquisition is consummated, other than, in all such cases, such
failures to be true and/or correct as would not in the aggregate reasonably be
expected to have a Company Material Adverse Effect; PROVIDED, HOWEVER, that if
any of the representations and warranties is already qualified in any respect by
materiality or as to a Company Material Adverse Effect, for purposes of this
Section 11(b) such materiality or Company Material Adverse Effect qualification
will be in all respects ignored (but subject to the overall standard as to
Material Adverse Effect set forth immediately prior to this proviso), and the
Company shall have complied in all material respects with all covenants and
agreements set forth herein to be performed by it.
(c) No injunction, restraining order or other order of any federal or
state court which prevents the consummation of the Acquisition shall be in
effect.
(d) No statute, rule or regulation shall have been enacted by any
state or governmental agency that would prevent the consummation of the
Acquisition.
(e) Except as set forth in the Disclosure Schedule, no Company
Material Adverse Effect shall have occurred between the date hereof and
consummation of the Acquisition other than any developments that generally
affect the industry in which the Company operates.
(f) The Stockholder Approval shall have been obtained.
12. CONSENT. Concurrently herewith, the Company and the Buyer have
entered into a Consent Agreement (the "CONSENT AGREEMENT"), subject to the terms
and conditions stated therein, pursuant to which the Company is delivering its
consent to the Buyer's purchase of up to (i) 1,145,703 shares of Company common
stock from
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and (ii) 681,774 shares of Company common stock from ▇▇▇▇ ▇.
Black.
13. WORKING CAPITAL LINE OF CREDIT. Concurrently herewith, the Buyer and
the Company have entered into a Letter of Intent re Revolving Credit Working
Capital Facility (the "LETTER OF INTENT"), subject to the terms and conditions
stated therein, to furnish the Company a working capital line of credit.
14. TERMINATION. This Acquisition Agreement shall terminate at the
earlier of:
(a) Such time as the parties shall mutually agree.
(b) At the option of the Company, on or after December 31, 1997, if
by that date all of the conditions set forth in Section 10 shall not have been
satisfied or waived.
(c) At the option of the Buyer, on or after December 31, 1997, if by
that date all of the conditions set forth in Section 11 shall not have been
satisfied or waived.
(d) At the option of the Company in accordance with Section 3(c),
provided the Company has complied with all provisions thereof, and provided
further that the Company simultaneously pays to the Buyer the sum of $2.4
million plus, if said termination occurs after March 28, 1997, Buyer's out-of-
pocket costs (including, without limitation, outside legal fees and expenses)
and internal legal costs as the Buyer shall reasonably determine (collectively,
the "TERMINATION FEE AMOUNT") in immediately available funds.
(e) At the option of the Buyer, if (i) the Board of Directors of the
Company or any committee of such Board of Directors shall have (A) withdrawn or
modified its approval or recommendation of this Acquisition Agreement (or the
Implementation Agreements) or the Acquisition, or (B) failed to recommend that
the stockholders of the Company vote in favor of the Acquisition, or (C)
approved or recommended any Acquisition Proposal other than the Acquisition, or
(ii) the Board of Directors of the Company or any committee of such Board of
Directors shall have resolved to do any of the foregoing. The Company shall
promptly following termination for any of the reasons set forth in this clause
(e) pay to the Buyer the Termination Fee Amount in immediately available funds.
(f) At the option of any of the parties hereto if the stockholders of
the Company do not approve the Acquisition.
In the event this Acquisition Agreement is terminated pursuant to Section 14(f)
because the Company stockholders did not approve the Acquisition and prior to
eighteen (18) months following such termination the Company enters into a
binding agreement for a Third Party Transaction, the Company shall pay to the
Buyer the Termination Fee
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Amount in immediately available funds simultaneously with its entry into such
binding agreement.
15. RECORD DATE. The Company agrees that the record date for determining
stockholders entitled to vote on (or give consents or exercise appraisal rights
with respect to) the Acquisition or any Third Party Transaction will be no
earlier than 10 business days after the Buyer's receipt of all required
approvals under the insurance holding company laws of states with applicable
jurisdiction, and the expiration of the applicable waiting period under the HSR
Act, with respect to the Buyer's purchase of 1,145,703 shares of Company common
stock from ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and 681,774 shares of Company common stock from
▇▇▇▇ ▇. Black, provided that, in the case of a Third Party Transaction, this
Section 15 shall not require the Company to set a record date later than
December 31, 1997. This Section 15 shall continue in effect (with respect to
any Third Party Transaction) notwithstanding any termination of this Acquisition
Agreement in accordance with its terms or otherwise
16. MISCELLANEOUS.
(a) AMENDMENTS AND WAIVERS. This Acquisition Agreement may not be
modified or amended except by an instrument or instruments in writing signed by
the party against whom enforcement of any such modification or amendment is
sought. Any party hereto may, in its sole election, solely as to itself and not
as to any other party hereto, only by an instrument in writing, waive compliance
by another party hereto with any term or provision hereof on the part of such
other party hereto to be performed or complied with. The waiver by any party
hereto of a breach of any term or provision hereof shall not be construed as a
waiver of any subsequent breach.
(b) ENTIRE AGREEMENT. This Acquisition Agreement, the Letter of
Intent, the Consent Agreement and the Stock Purchase Agreement dated July 10,
1996, each between the Company and Buyer, contain the entire agreement between
the parties hereto with respect to the transactions contemplated hereby and
thereby. This Acquisition Agreement is not intended to confer upon any other
person any rights or remedies hereunder.
(c) APPLICABLE LAW. This Acquisition Agreement shall be exclusively
governed by and construed in accordance with the internal laws of the State of
Delaware without regard to its rules of conflicts of laws.
(d) EXPENSES. Except as otherwise included herein, in the event the
Acquisition contemplated hereby is not consummated for any reason, then all
expenses incurred by each party will be borne by the party incurring such
expenses
(e) DESCRIPTIVE HEADINGS. The descriptive headings contained herein
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Acquisition Agreement.
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(f) COUNTERPARTS. This Acquisition Agreement and any amendments
hereto may be executed in any number of counterparts, each of which shall be
deemed to be an original but all of which together shall constitute but one
agreement
(g) SUCCESSORS AND ASSIGNS. This Acquisition Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors. This Acquisition Agreement may not be assigned by any party without
prior consent of all parties hereto, provided that any party hereto may assign
its rights and obligations hereunder to any affiliate to implement the
Acquisition, provided that such affiliate agrees to be bound hereby, provided
that such party remains liable hereunder, and that such assignment does not
adversely effect the Acquisition from the perspective of the other parties.
(h) BINDING EFFECT. This Acquisition Agreement shall, subject to the
terms and conditions hereof, be in all respects binding upon each of the Company
and the Buyer from and after the date hereof
(i) SURVIVAL. None of the representations or warranties set forth in
Sections 8 and 9 hereof shall survive the consummation of the Acquisition.
(j) BOARD OF DIRECTORS. Effective as of the closing of the
Acquisition, the Board of Directors of the Company will consist of nominees
selected by the Buyer.
(k) INDEMNIFICATION; INSURANCE. The Implementation Documents will
provide, among other things, that the Company will maintain in effect all rights
to indemnification existing in favor of any director, officer, employee or agent
of the Company and its subsidiaries (the "INDEMNIFIED PARTIES") as provided in
its certificate of incorporation, by-laws or in indemnification agreements with
the Company or any of its subsidiaries, all of which shall survive the
consummation of the Acquisition and shall continue in full force and effect for
a period of not less than four years from the effective time of the Acquisition
(the "EFFECTIVE TIME"); PROVIDED, that in the event any claim or claims are
asserted or made within such four-year period, all rights to indemnification in
respect of any such claim or claims shall continue until final disposition of
any and all such claims. It is understood and agreed that the Company shall
advance, indemnify and hold harmless, as and to the full extent permitted by
applicable law, each Indemnified Party against any losses, claims, damages
liabilities, costs, expenses (including attorneys' fees and expenses),
judgments, fines and amounts paid in settlement in connection with any
threatened or actual claim, action, suit, proceeding or investigation (whether
asserted or arising before or after the Effective Time). In addition, the
Implementation Documents will provide that the Company shall cause to be
maintained in effect for not less than four years from the Effective Time any
current policies of the directors' and officers' liability insurance maintained
by the Company; PROVIDED, that the Company will be permitted to substitute
therefor policies of at least the same coverage containing terms and conditions
which are no less advantageous and provided that such substitution shall not
result in any gaps or lapses in coverage with respect to matters occurring prior
to the Effective Time; PROVIDED, FURTHER, that the
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Company shall not be required to pay an annual premium in excess of 200% of the
last annual premium paid by the Company prior to the date hereof and if it is
unable to obtain the insurance required, it shall obtain as much comparable
insurance as possible for an annual premium equal to such maximum amount
[remainder of page left blank intentionally]
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IN WITNESS WHEREOF, the parties hereto have executed this Acquisition Agreement.
CROP GROWERS CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
FIREMAN'S FUND INSURANCE
COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Title: Senior Vice President & Treasurer
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